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| | | | | | | | | | | | | | | | Share Price: | MYR17.80 | Target Price: | MYR23.00 | Recommendation: | Buy | | |
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| | | No negatives | | PTG's 9M17 results were again in line. A results call will be held this afternoon, but is unlikely to contain material updates pertaining to TPA negotiations (we expect an announcement in Dec 2017 at the earliest). Our earnings forecasts and MYR23.00 TP are unchanged. Risk-reward is presently favourable in our view, with a negative TPA outcome having already been partly priced-in. Reiterate BUY. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 4,456.0 | 4,561.3 | 4,540.4 | 5,146.0 | EBITDA | 2,967.2 | 2,968.1 | 3,038.7 | 3,403.5 | Core net profit | 1,749.6 | 1,747.2 | 1,681.7 | 1,951.1 | Core EPS (sen) | 88.4 | 88.3 | 85.0 | 98.6 | Core EPS growth (%) | (2.0) | (0.1) | (3.8) | 16.0 | Net DPS (sen) | 60.0 | 62.0 | 59.5 | 69.0 | Core P/E (x) | 20.1 | 20.2 | 20.9 | 18.1 | P/BV (x) | 3.1 | 2.9 | 2.8 | 2.7 | Net dividend yield (%) | 3.4 | 3.5 | 3.3 | 3.9 | ROAE (%) | 18.1 | 14.9 | 13.8 | 15.3 | ROAA (%) | 12.7 | 11.3 | 10.0 | 11.2 | EV/EBITDA (x) | 15.1 | 14.4 | 11.8 | 10.3 | Net debt/equity (%) | net cash | 4.0 | 4.0 | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR2.33 | Target Price: | MYR2.63 | Recommendation: | Buy | | |
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| | | On an expansion mode | | Demand for tank terminal facilities in Asia is rising and Dialog aims to leverage on that via its Tanjung Langsat and Pengerang operations. It is already on a progressive capacity expansion drive (both green and brownfield facilities) and its land there will be tapped to realise this aspiration. We raise FY18-20 earnings forecasts by 4% p.a. and TP by 13%, incorporating for the added capacities at Tanjung Langsat (+300k cu m) and Pengerang (+1.25m cu m). | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,534.5 | 3,392.9 | 3,534.3 | 3,668.9 | EBITDA | 385.4 | 475.0 | 461.3 | 486.0 | Core net profit | 261.0 | 328.2 | 353.6 | 444.8 | Core EPS (sen) | 5.0 | 6.1 | 6.6 | 8.3 | Core EPS growth (%) | (0.9) | 20.8 | 7.8 | 25.8 | Net DPS (sen) | 2.2 | 2.6 | 2.8 | 3.6 | Core P/E (x) | 46.2 | 38.2 | 35.5 | 28.2 | P/BV (x) | 5.0 | 4.0 | 3.8 | 3.5 | Net dividend yield (%) | 0.9 | 1.1 | 1.2 | 1.5 | ROAE (%) | 13.4 | 13.4 | 11.0 | 12.8 | ROAA (%) | 6.7 | 6.6 | 6.1 | 7.4 | EV/EBITDA (x) | 20.7 | 21.9 | 28.7 | 27.2 | Net debt/equity (%) | net cash | net cash | 18.1 | 15.0 |
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| | | | | | | | | | | | | | Share Price: | MYR3.67 | Target Price: | MYR3.80 | Recommendation: | Hold | | |
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| | | Volume has bottomed | | Flattish 3Q17 results were within expectations and we expect better 4Q17 on festivity-led demand and potential tax credit. We maintain our FY17 and FY19 EPS forecasts, but raise FY18 EPS by 5% on lower tax assumption. Maintain HOLD and DCF-derived TP of MYR3.80 (WACC: 7.5%, 2025-54 growth rate: 2%). A re-rating will only come upon completion of the detailed studies of its proposed CT10-19 in 1Q19. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 1,578.3 | 1,804.3 | 1,696.2 | 1,800.0 | EBITDA | 869.1 | 963.5 | 906.6 | 967.8 | Core net profit | 504.9 | 616.6 | 600.0 | 569.0 | Core EPS (sen) | 14.8 | 18.1 | 17.6 | 16.7 | Core EPS growth (%) | (1.4) | 22.1 | (2.7) | (5.2) | Net DPS (sen) | 11.1 | 14.0 | 13.2 | 12.5 | Core P/E (x) | 24.8 | 20.3 | 20.9 | 22.0 | P/BV (x) | 6.6 | 6.0 | 5.6 | 5.3 | Net dividend yield (%) | 3.0 | 3.8 | 3.6 | 3.4 | ROAE (%) | 27.6 | 32.1 | 28.0 | 24.8 | ROAA (%) | 12.8 | 14.7 | 13.2 | 11.8 | EV/EBITDA (x) | 17.0 | 16.0 | 15.2 | 14.1 | Net debt/equity (%) | 39.7 | 35.3 | 57.1 | 46.7 |
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| | | | | SECTOR RESEARCH | | | | | | | Highest stockpile since Jan 2016
by Chee Ting Ong |
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| | | | | | Better-than-expected October monthly output lifted Malaysia's stockpile to 21-month high. This may temporarily pressure CPO price on the downside. But as the Northeast monsoon approaches, which typically brings heavy rainfall, we expect output to taper off seasonally from Nov 2017 to Feb 2018. A heavier-than-usual monsoon rainfall may momentarily lift CPO price in 1Q18. Our 12M NEUTRAL sector call is reiterated. Our BUYs are IOI, SOP, BAL, DSNG and TBLA. SELL BWPT. | |
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| | | | MACRO RESEARCH | | | | | | | Slower trade growth, but smaller trade deficit
by Suhaimi Ilias |
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| | | | | | Both exports and imports growth in USD slowed in Sep 2017 to +4.3% YoY (Aug 2017: +9.6% YoY) and +1.7% YoY (Aug 2017: +10.4% YoY). Exports and imports growth also eased in PHP to +12.2% YoY (Aug 2017: +19.4% YoY) and +9.4% YoY (Aug 2017: +20.3% YoY). As exports growth outpaced imports growth, trade deficit narrowed to -USD1.9b or -PHP97.7b (Aug 2017: -USD2.4b or -PHP121.7b). | |
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| | | | | | | | S&P 500 Index in Correction Mode as VIX Strengthen
by Nik Ihsan Raja Abdullah |
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| | | | | | S&P 500 Index rebounded from a low of 2,417 in August 2017 to a recent high of 2,597. The upward momentum was strong and it went close to challenge the 2,600 psychological level. While underlying sentiment remains positive, we caution that the benchmark may take a breather soon. We spotted a negative divergence on its Stochastic indicator, suggesting that follow through momentum is weakening. In the near-term, the index may ease towards the 2,544 support. | |
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| | NEWS | | | Outside Malaysia:
U.S: Consumer sentiment unexpectedly falls from 13-year high amid expectations that inflation and interest rates will rise, according to a University of Michigan report. Sentiment index dropped to 97.8 from 100.7, which was the highest since January 2004. Current conditions gauge, which measures Americans' perceptions of their finances, fell to 113.6 from 116.5. Expectations measure decreased to 87.6 from 90.5 (Source: Bloomberg)
U.K. Economy displays mixed fortunes at end of third quarter. Industrial production rose a larger-than-forecast 0.7% in September, with output increasing across most manufacturing sectors, the Office for National Statistics said. But construction fell the most in 18 months and a narrowing of the trade deficit was not enough to prevent the shortfall widening in the third quarter. The reports round off a quarter which saw economic growth pick up slightly to 0.4%, a level which remains below its pre-Brexit referendum average as political uncertainty and inflation crimp consumer spending. (Source: Bloomberg)
U.K: Four in 10 London home-sellers are cutting prices in tough market. The proportion of London home sellers dropping their asking price is rising as the property market slumps further. With more than four in 10 revising lower, the average price cut of 6.7% reflects "initial over-optimism and a tougher market," Rightmove Plc said in a report published. New vendors coming to the market in November are also reducing their expectations, albeit more modestly, with a 0.2% decline from a month earlier to GBP 628,219 (USD 538,500). That's an annual drop of 2.4% -- a far cry from growth of more than 20% in 2014. (Source: Bloomberg)
ASEAN: Hong Kong and ASEAN sign free-trade agreement in Manila. Hong Kong Secretary for Commerce & Economic Development Edward Yau and ministers from the Association of Southeast Asian Nations signed a trade deal at bloc's annual meeting in Manila. Deal concluded earlier this year after three years of negotiation. Total merchandise traded between two sides totalled USD107b last year, while services traded equalled USD15.5b in 2015, according to the Hong Kong government. (Source: Bloomberg)
Australia: RBA's Debelle says non-mining investment is picking up. Australia's central bank said improved expectations for demand are driving a pickup in non-mining investment, helping to buoy the post mining-boom economy. "It now appears that there has been a solid upward trajectory in non-mining business investment over the past couple of years," Reserve Bank of Australia Deputy Governor Guy Debelle said in notes of a speech. Non-mining investment had been hampered by sluggish global economic growth, pessimism among businesses about future prospects and a strong Australian dollar. Debelle also noted that some firms had been less willing to take risks since the financial crisis, choosing to reduce debt and increase cash holdings rather than invest. (Source: Bloomberg) | |
| | | | | Other News:
KNM: Plans to raise MYR53.32m via placement to repay loans. The group has proposed a private placement of up to 10% of its issued shares to independent investors to raise up to MYR53.32m, mainly to repay bank borrowings. KNM said the exercise involves the issuance of up to 213.28m placement shares, at an issue price to be fixed. Of the proceeds to be raised, it said MYR40m will be used to repay bank loans, while the remaining MYR13.32m will be used for working capital. (Source: The Edge Financial Daily)
Destini: Partners Singaporean firm to bid for oil and gas jobs. Destini is partnering with Singapore-listed Federal International (2000) Ltd to bid for oil and gas projects in South Asia and Southeast Asia. Upon the completion of the joint venture and shareholders agreement, Destini's wholly-owned subsidiary, Destini Oil Services S/B , and Federal International's wholly-owned subsidiary, Federal Hardware Engineering Co Ltd, will incorporate a 50:50 joint venture company (JVCo) in Singapore. The JVCo intends to bid for floating production systems in greenfield development; transportation and installation services; well abandonment and field decommissioning services; downhole and well workover services. (Source: The Sun Daily)
Mudajaya: Withdraws from MYR810m Penang job over 'uncertainties' of the project. Mudajaya is withdrawing from MYR810m contract it was awarded last year by Consortium Zenith Construction S/B for construction work in Penang over "uncertainties" of the project. Under the deal, Mudajaya was supposed to build major roads under Package 2 (the Ayer Itam to Lebuhraya Tun Dr Lim Chong Eu by-pass) and the Third Link Project in Penang, which it bagged via its wholly-owned unit Mudajaya Corp in December 2016. (Source: The Edge Financial Daily)
Samchem: 3Q net profit almost doubled on higher sales. Samchem Holdings' net profit for 3QFY17 almost doubled to MYR6.31m from MYR3.26m in the corresponding quarter a year ago, mainly due to higher sales. Quarterly revenue rose 41.6% to MYR242.62m from MYR171.26m last year, mainly due to the strategic market positioning of the group in the region. (Source: The Edge Financial Daily) | |
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