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| | | | | | | | | | | | | | | | Share Price: | MYR1.58 | Target Price: | MYR1.70 | Recommendation: | Hold | | |
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| | | Develops property in Subang | | We are mildly positive on the proposal which has a long-term lease structure and is potentially yield accretive, despite having a minor contribution to earnings. We tweak FY18/19 earnings forecast by -3%/+2% but maintain our MYR1.70 TP (cost of equity: 7.8%) due to marginal impact to our DDM valuation. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 165.7 | 171.3 | 170.1 | 199.6 | Net property income | 141.9 | 144.3 | 145.4 | 171.3 | Distributable income | 91.5 | 90.2 | 92.3 | 97.5 | DPU (sen) | 7.6 | 7.4 | 7.5 | 7.9 | DPU growth (%) | (14.9) | (1.8) | 1.2 | 5.7 | Price/DPU(x) | 20.9 | 21.3 | 21.0 | 19.9 | P/BV (x) | 1.3 | 1.3 | 1.3 | 1.3 | DPU yield (%) | 4.8 | 4.7 | 4.8 | 5.0 | ROAE (%) | 7.2 | 8.9 | 6.6 | 7.0 | ROAA (%) | 4.3 | 4.1 | 4.1 | 3.9 | Debt/Assets (x) | 0.3 | 0.3 | 0.3 | 0.5 |
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| | | | | SECTOR RESEARCH | | | | | | | Sep 2017 annualized loan growth stable
by Desmond Ch'ng |
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| | | | | | The pick-up in non-HH loan growth in Aug 2017 faded in September, contributing to a slowdown in overall loan growth. Nevertheless, annualized loan growth remains stable at 3.5% while loan applications and approvals are trending in the right direction. We maintain our industry loan growth forecasts of 4.7% for 2017 and 4.8% for 2018. NEUTRAL still on the sector with BUYs on CIMB and BIMB. | |
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| | | | MACRO RESEARCH | | | | | | | Brent Crude Oil: Into a 2-year High
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI bucked the regional uptrend to end the day 3.99pts lower at 1,743.93 yesterday, led by decline in Telekom, BAT and KLCCP. Broader market turned negative for the first time this week, with losers outpacing gainers by 504 to 368. A total of 3.06b shares worth MYR2.3b changed hands. Expect another day of volatile trade as investors turn risk-off ahead of President Trump's appointment of a new Fed chair as well as US' FOMC Meeting. | |
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| | NEWS | | | Outside Malaysia:
U.S: Fed signals December hike on track as Trump mulls next chair. Federal Reserve officials reinforced expectations for a December interest-rate increase by subtly upgrading their assessment of the U.S. economy, a day before President Donald Trump plans to unveil his choice to lead the U.S. central bank. "Economic activity has been rising at a solid rate despite hurricane-related disruptions," the Federal Open Market Committee said in a statement following a two-day meeting in Washington at which they left rates unchanged as expected. (Source: Bloomberg)
U.K: Manufacturing strengthened in October and measures of prices and capacity indicated an inflationary build-up within the industry. IHS Markit said costs rose and firms increased selling prices at the fastest pace in six months. A measure of hiring jumped to the highest in more than three years and there were "capacity pressures" in the supply of raw materials, it said. The survey's headline manufacturing activity index rose to 56.3 from 56 in September, far above the key 50 level and better than economists had forecast. (Source: Bloomberg)
U.K: House price growth remained stuck in a relatively slow gear at the start of the fourth quarter, Nationwide Building Society said. Values increased 0.2% from September and were up 2.5% YoY compared with a year earlier. The annual change - within the range recorded for much of this year - is about half the pace seen in 2016. (Source: Bloomberg)
S. Korea: Exports expanded at a slower pace than expected in October, affected by a national holiday that lasted more than a week. Inflation weakened slightly but remained near the central bank's 2% target. Exports jumped 7.1% YoY in October from a year ago, after a double-digit expansion in every previous month this year. Imports gained 7.4% YoY, leaving a trade surplus of USD7.3b. Consumer prices rose 1.8% YoY while core inflation rose 1.3% YoY in October. (Source: Bloomberg)
Crude Oil: OPEC output drops in October as Kurdistan tensions weigh on Iraq. Tensions in Iraq between the semi-autonomous northern region of Kurdistan and the central government in Baghdad weighed on OPEC's production last month. The Organization of Petroleum Exporting Countries pumped 180,000 barrels a day less in October than September, with overall output dipping to 32.59 million barrels a day, according to a Bloomberg News survey of analysts, oil companies and ship- tracking data. (Source: Bloomberg) | |
| | | | | Other News:
T7 Global: Proposes private placement to fund existing projects. The group has proposed a private placement of 10% of its issued share capital to third party investors to fund existing projects. The placement of up to 41.97m shares is expected to raise between MYR14.03m and MYR15.53m.T7 said the indicative issue price is assumed at 37 sen per share, representing a discount of about 8.42% to its volume-weighted average market price of 40.4 sen for the five-day period ended Oct 31. (Source: The Edge Financial Daily)
Unisem: Higher Q3 earnings for Unisem, dividend 3.5 sen. Unisem's earnings rose 4.7% to MYR40.44m in the third month ended Sep 30, 2017 due to higher sales, improved average selling prices and the appreciation of the USD against MYR. For the nine months, its earnings rose 14.9% to MYR127.44m from MYR110.95m. Its revenue increased increased by 15.4% to MYR1.11b from MYR960.65m. It declared an interim dividend of 3.5 sen a share. (Source: The Star)
Eden Inc: Proposes free warrants and medium term notes to raise money. The group plans to issue up to 155.68m free warrants to shareholders on the basis of one warrant for every two shares held. Assuming full exercise of the warrants at the exercise price of 19.6 sen, Eden said it will potentially raise maximum gross proceeds of MYR30.51m, which the group will use for working capital. Eden also proposed to issue redeemable convertible medium term notes with an aggregate principal amount of up to MYR60m in four tranches, for a tenure of 36 months. The notes bear an interest rate of 1% per annum, aiming to fund the group's turnaround plan. (Source: The Edge Financial Daily) | |
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