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| | | | | | | | | | | | | | | | Share Price: | MYR3.05 | Target Price: | MYR3.80 | Recommendation: | Buy | | |
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| | | Secures MYR1.5b concession in India | | The new concession will add onto IJM's construction orderbook, lifting it to another record high of MYR10.7b, further enhancing the group's medium-term earnings visibility. We raise FY18 job win assumption which leads to higher FY19E/FY20E earnings by 4%/5%. Without further details, we are unable to compute the absolute value accretion from the new concession. That said, we believe IJM should be provided good buffer. We leave our RNAV-based TP unchanged for now, at MYR3.80. | | |
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| | FYE Mar (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 5,128.2 | 6,065.3 | 7,187.8 | 7,850.2 | EBITDA | 1,166.7 | 1,125.8 | 1,203.7 | 1,394.3 | Core net profit | 509.3 | 505.1 | 589.7 | 696.3 | Core EPS (sen) | 14.3 | 14.0 | 16.3 | 19.3 | Core EPS growth (%) | (12.5) | (2.0) | 16.7 | 18.1 | Net DPS (sen) | 10.0 | 7.5 | 7.0 | 7.0 | Core P/E (x) | 21.4 | 21.8 | 18.7 | 15.8 | P/BV (x) | 1.2 | 1.2 | 1.1 | 1.1 | Net dividend yield (%) | 3.3 | 2.5 | 2.3 | 2.3 | ROAE (%) | 9.1 | 7.1 | 6.1 | 6.9 | ROAA (%) | 2.6 | 2.5 | 2.8 | 3.2 | EV/EBITDA (x) | 15.4 | 15.5 | 13.6 | 11.6 | Net debt/equity (%) | 40.4 | 35.3 | 34.9 | 30.1 |
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| | | | | | | | | | | | | | Share Price: | MYR2.91 | Target Price: | MYR3.38 | Recommendation: | Buy | | |
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| | | Poised for multi-year growth | | We remain positive on Inari as growth visibility for all key divisions remains on track. Solid track record in the RF division could see Inari replicating this division's success at one of its recent ventures; we see strong potential in Inari's wholly-owned IIS. Our earnings forecasts are slightly changed (-<2%) and we roll forward valuation to CY19 on an unchanged 20x PER peg (10% premium to our target PER for Malaysian listed tech coys) to derive a new TP of MYR3.38 (+13%). Maintain BUY. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,043.1 | 1,176.7 | 1,554.2 | 1,862.7 | EBITDA | 203.7 | 303.7 | 376.9 | 455.8 | Core net profit | 155.8 | 206.4 | 281.9 | 340.5 | Core EPS (sen) | 7.8 | 9.9 | 13.5 | 16.3 | Core EPS growth (%) | 1.7 | 27.4 | 36.6 | 20.8 | Net DPS (sen) | 4.2 | 8.3 | 10.1 | 12.2 | Core P/E (x) | 37.5 | 29.5 | 21.6 | 17.9 | P/BV (x) | 8.5 | 6.9 | 6.3 | 5.7 | Net dividend yield (%) | 1.4 | 2.9 | 3.5 | 4.2 | ROAE (%) | 24.3 | 29.2 | 30.7 | 33.6 | ROAA (%) | 18.2 | 19.9 | 22.3 | 24.4 | EV/EBITDA (x) | 13.8 | 13.2 | 14.9 | 12.4 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR0.99 | Target Price: | MYR1.25 | Recommendation: | Buy | | |
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| | | A non-cash boost | | The main takeaway for us from Malakoff's results call was the lower amortisation run-rate, which would boost reported net profit going forward. We lower our FY17 DPS forecast to 5sen (from 7sen) as it appears management would conserve cash for new projects. We think the stock's risk-reward is favourable given the stock's YTD underperformance. Reiterate BUY, with an unchanged TP of MYR1.25. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 5,302.0 | 6,098.4 | 6,313.8 | 6,058.6 | EBITDA | 2,468.8 | 2,835.6 | 2,748.5 | 2,435.2 | Core net profit | 453.2 | 355.5 | 334.0 | 302.7 | Core EPS (sen) | 9.1 | 7.1 | 6.7 | 6.1 | Core EPS growth (%) | (6.8) | (21.6) | (6.0) | (9.4) | Net DPS (sen) | 7.0 | 7.0 | 5.0 | 5.0 | Core P/E (x) | 10.9 | 13.9 | 14.8 | 16.4 | P/BV (x) | 0.9 | 0.8 | 0.8 | 0.8 | Net dividend yield (%) | 7.1 | 7.1 | 5.1 | 5.1 | ROAE (%) | 9.3 | 6.1 | 5.6 | 5.0 | ROAA (%) | 1.5 | 1.2 | 1.1 | 1.0 | EV/EBITDA (x) | 8.9 | 7.1 | 6.2 | 6.3 | Net debt/equity (%) | 230.4 | 214.1 | 188.4 | 162.5 |
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| | | | | | | | | | | | | | Share Price: | MYR14.00 | Target Price: | MYR16.30 | Recommendation: | Buy | | |
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| | | Still decent growth for life insurance | | 2017 has been a challenging year for Allianz General, but this has been buffered by a better performance from Allianz Life, with 9M17 VONB growth of 26%. We trim our FY17-19 earnings forecasts by 5-7%, to account for higher claims and lower banca contributions. Our SOP-TP is marginally lowered by 10sen to MYR16.30 as a result. Still a BUY for decent valuations and exposure to a fast growing life insurer. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Net earned premiums | 3,504.3 | 3,690.5 | 3,812.0 | 3,896.8 | Core profit (MYR m) | 308.9 | 312.1 | 292.4 | 315.4 | BVPS (MYR) | 7.6 | 8.3 | 9.3 | 10.4 | P/B (x) | 1.8 | 1.7 | 1.5 | 1.3 | EVPS (MYR) | na | na | na | na | PEV (x) | na | na | na | na | VNB (MYR) | na | na | na | na | VNB multiple (x) | na | na | na | na | ROE (%) | na | na | na | na | ROA (%) | 2.3 | 2.1 | 1.8 | 1.7 |
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| | | | | | | | | | | | | | Share Price: | MYR2.12 | Target Price: | MYR2.75 | Recommendation: | Buy | | |
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| | | Within expectations | | Excluding negative one-offs totalling MYR13m (mainly from impairment on goodwill), 9M17 core earnings of MYR56m came in within expectations. We expect sequential earnings to be stronger in 4Q17 with contributions from Perodua's all-new Myvi model, launched this month. Our earnings forecasts, BUY rating and MYR2.75 TP (on 10x CY18 PER) are unchanged. MBM offers the best exposure to Perodua as a (i) 22.6% shareholder, (ii) car dealer and (iii) auto parts supplier. Maintain BUY. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 1,815.1 | 1,670.2 | 1,727.0 | 1,832.9 | EBITDA | 49.7 | (24.3) | 22.1 | 31.0 | Core net profit | 87.6 | 102.6 | 82.2 | 107.3 | Core EPS (sen) | 22.4 | 26.2 | 21.0 | 27.5 | Core EPS growth (%) | (21.9) | 17.1 | (19.8) | 30.5 | Net DPS (sen) | 10.0 | 6.0 | 4.5 | 6.0 | Core P/E (x) | 9.5 | 8.1 | 10.1 | 7.7 | P/BV (x) | 0.5 | 0.5 | 0.5 | 0.5 | Net dividend yield (%) | 4.7 | 2.8 | 2.1 | 2.8 | ROAE (%) | 5.4 | 4.2 | 5.0 | 6.3 | ROAA (%) | 3.7 | 4.3 | 3.4 | 4.3 | EV/EBITDA (x) | 28.2 | nm | 59.4 | 41.6 | Net debt/equity (%) | 8.8 | 10.5 | 8.7 | 6.7 |
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| | | | | | | | | | | | | | Share Price: | MYR6.00 | Target Price: | MYR6.00 | Recommendation: | Hold | | |
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| | | No major concerns | | 9M17 results were slightly ahead of our forecast due to higher-than-expected minority losses. New management reported good progress on TM's rebranding and reorganisation initiatives. Maintain HOLD with an unchanged MYR6.00 TP. Risk-reward remains balanced, in our view. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 11,721.6 | 12,060.9 | 12,488.0 | 12,990.4 | EBITDA | 3,677.0 | 3,820.0 | 3,921.2 | 4,156.9 | Core net profit | 894.9 | 847.9 | 869.4 | 856.1 | Core EPS (sen) | 23.8 | 22.6 | 23.1 | 22.8 | Core EPS growth (%) | (8.1) | (5.3) | 2.5 | (1.5) | Net DPS (sen) | 21.4 | 21.5 | 20.8 | 20.5 | Core P/E (x) | 25.2 | 26.6 | 25.9 | 26.3 | P/BV (x) | 2.9 | 2.9 | 2.9 | 2.9 | Net dividend yield (%) | 3.6 | 3.6 | 3.5 | 3.4 | ROAE (%) | 9.1 | 10.0 | 11.2 | 10.9 | ROAA (%) | 3.8 | 3.4 | 3.5 | 3.4 | EV/EBITDA (x) | 7.9 | 7.1 | 7.3 | 7.0 | Net debt/equity (%) | 45.7 | 64.0 | 77.9 | 81.5 |
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| | | | | | | | | | | | | | Share Price: | MYR24.50 | Target Price: | MYR26.20 | Recommendation: | Hold | | |
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| | | Full-year results within our expectation | | FY17's 29% core earnings growth met our expectation but missed consensus. We tweak FY18-19 earnings forecasts, but only anticipate marginally higher earnings in FY18. Given muted earnings growth outlook, we maintain our HOLD call but with a slightly lower TP of MYR26.40 (-1%) on unchanged 26x FY18 PER peg, its 5–year mean. | | |
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| | FYE Sep (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 16,505.8 | 21,004.0 | 20,260.1 | 21,486.7 | EBITDA | 1,805.8 | 2,157.1 | 2,039.4 | 2,190.3 | Core net profit | 824.5 | 1,063.8 | 1,076.4 | 1,195.6 | Core EPS (sen) | 77.2 | 99.9 | 101.1 | 112.3 | Core EPS growth (%) | 0.7 | 29.3 | 1.2 | 11.1 | Net DPS (sen) | 50.0 | 50.0 | 60.6 | 67.4 | Core P/E (x) | 31.7 | 24.5 | 24.2 | 21.8 | P/BV (x) | 2.5 | 2.3 | 2.2 | 2.1 | Net dividend yield (%) | 2.0 | 2.0 | 2.5 | 2.7 | ROAE (%) | 15.8 | 9.1 | 9.1 | 9.8 | ROAA (%) | 4.6 | 5.6 | 5.5 | 6.0 | EV/EBITDA (x) | 16.0 | 13.6 | 14.1 | 12.9 | Net debt/equity (%) | 22.5 | 19.3 | 13.6 | 10.0 |
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| | | | | | | | | | | | | | Share Price: | MYR10.48 | Target Price: | MYR11.16 | Recommendation: | Hold | | |
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| | | Results within expectations | | 9M17 results were within expectations as we expect stronger earnings in 4Q17. No change to our earnings forecasts. GENP remains a HOLD with an unchanged TP of MYR11.16 on unchanged 26x 2017 PER peg, its 5-year mean. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 1,374.9 | 1,480.1 | 1,761.9 | 1,885.8 | EBITDA | 358.7 | 536.3 | 645.2 | 718.2 | Core net profit | 205.7 | 295.3 | 340.8 | 397.3 | Core EPS (sen) | 26.3 | 37.2 | 42.9 | 50.0 | Core EPS growth (%) | (46.7) | 41.5 | 15.4 | 16.6 | Net DPS (sen) | 5.5 | 21.0 | 8.6 | 10.0 | Core P/E (x) | 39.9 | 28.2 | 24.4 | 20.9 | P/BV (x) | 1.9 | 1.9 | 1.8 | 1.7 | Net dividend yield (%) | 0.5 | 2.0 | 0.8 | 1.0 | ROAE (%) | 4.7 | 8.6 | 7.8 | 8.5 | ROAA (%) | 3.2 | 4.0 | 4.5 | 5.0 | EV/EBITDA (x) | 24.9 | 17.6 | 13.9 | 12.2 | Net debt/equity (%) | 8.1 | 12.9 | 7.5 | 3.2 |
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| | | | | | | | | | | | | | Share Price: | MYR1.08 | Target Price: | MYR1.22 | Recommendation: | Hold | | |
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| | | Core results in line | | THP's 3Q17 headline net profit was impacted by MYR3.5m impairment of receivables, offset by positive from the change in FV of forestry. 3Q17 core net profit however met expectations. We make no change to our FY17 core net profit forecast, but revise down headline forecast for the exceptionals. THP remains a HOLD with an unchanged TP of MYR1.22, on 0.8x trailing P/NTA (-1SD to 3-year mean). | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 455.3 | 562.3 | 548.8 | 565.0 | EBITDA | 110.2 | 175.9 | 225.2 | 209.1 | Core net profit | 13.3 | 46.1 | 50.7 | 50.0 | Core EPS (sen) | 1.5 | 5.2 | 5.7 | 5.7 | Core EPS growth (%) | (61.4) | 247.2 | 10.0 | (1.3) | Net DPS (sen) | 0.0 | 6.0 | 1.4 | 1.7 | Core P/E (x) | 71.8 | 20.7 | 18.8 | 19.1 | P/BV (x) | 0.8 | 0.7 | 0.7 | 0.6 | Net dividend yield (%) | 0.0 | 5.6 | 1.3 | 1.6 | ROAE (%) | 5.0 | 11.0 | 2.9 | 3.4 | ROAA (%) | 0.4 | 1.3 | 1.4 | 1.4 | EV/EBITDA (x) | 23.0 | 13.9 | 10.9 | 11.4 | Net debt/equity (%) | 71.4 | 63.6 | 63.6 | 59.1 |
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| | | | | | | | | | | | | | Share Price: | MYR1.22 | Target Price: | MYR1.34 | Recommendation: | Hold | | |
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| | | The wait begins | | 1QFY18 results were in line, given that the Malaysia IPP did not contribute fully and taxes (high this quarter) tend to be volatile. Maintain HOLD with a lower MYR1.34 TP, as we now exclude Tj Jati A (yet to achieve financial close) from our SOP. With dividend yield no longer compelling, the investment thesis will largely revolve around the accretive new projects, which remain some time from commissioning. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 10,240.5 | 9,778.2 | 9,412.0 | 9,587.9 | EBITDA | 2,717.8 | 2,374.2 | 2,634.1 | 2,741.1 | Core net profit | 872.0 | 676.5 | 759.5 | 843.4 | Core FDEPS (sen) | 11.2 | 8.7 | 9.7 | 10.8 | Core FDEPS growth(%) | (8.5) | (22.8) | 12.3 | 11.0 | Net DPS (sen) | 10.0 | 5.0 | 5.0 | 5.0 | Core FD P/E (x) | 10.8 | 14.0 | 12.5 | 11.3 | P/BV (x) | 0.8 | 0.7 | 0.7 | 0.7 | Net dividend yield (%) | 8.2 | 4.1 | 4.1 | 4.1 | ROAE (%) | 8.8 | 5.2 | 5.7 | 6.1 | ROAA (%) | 2.0 | 1.5 | 1.6 | 1.7 | EV/EBITDA (x) | 9.2 | 11.6 | 9.9 | 9.5 | Net debt/equity (%) | 115.6 | 125.1 | 122.1 | 118.0 |
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| | | | | | | | | | | | | | Share Price: | MYR1.01 | Target Price: | MYR1.08 | Recommendation: | Hold | | |
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| | | Outlook remains challenging | | Tambun Indah's (TI) 9M17 net profit of MYR68m (-12% YoY) was slightly above our expectation but 9M17 locked-in sales of MYR116m fell short. There were no new launches in 3Q17 as TI has been focusing on clearing the unsold stocks under construction. We adjust our FY17-19 net profit forecasts by -7% to +7% and lower our RNAV-TP to MYR1.08 (-32sen; on a lower P/RNAV peg of 0.35x). Maintain HOLD. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 367.7 | 360.8 | 321.9 | 214.2 | EBITDA | 129.0 | 145.8 | 118.8 | 54.2 | Core net profit | 94.4 | 107.0 | 89.7 | 41.4 | Core EPS (sen) | 22.3 | 25.1 | 20.8 | 9.6 | Core EPS growth (%) | (8.3) | 12.6 | (17.1) | (53.9) | Net DPS (sen) | 9.7 | 9.0 | 8.3 | 3.8 | Core P/E (x) | 4.5 | 4.0 | 4.9 | 10.5 | P/BV (x) | 0.9 | 0.8 | 0.7 | 0.7 | Net dividend yield (%) | 9.6 | 8.9 | 8.2 | 3.8 | ROAE (%) | na | na | na | na | ROAA (%) | 13.2 | 14.1 | 11.3 | 5.0 | EV/EBITDA (x) | 4.7 | 4.5 | 3.8 | 8.3 | Net debt/equity (%) | 1.9 | 10.2 | 2.0 | 2.1 |
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| | | | | | MACRO RESEARCH | | | | | | | KLTEC Index: Support Seen at the 60-day EMA Line
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI extended its gain to a second consecutive day after rising 2.86pts to 1,723.54, led by WPRTS, GENM and PETD. Market breadth turned positive for the first time this week, with advancers outpacing losers by 589 to 318. A total of 2.23b shares worth MYR2.61b changed hands. As MYR continues to strengthen, we believe the feel-good factor will drive market higher, though there could be some profit taking along the way due to the subdued overnight US markets. | |
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| | NEWS | | | Outside Malaysia:
U.S: Consumer sentiment eases from highest since 2004. Consumer sentiment cooled from a 13-year high in November while remaining at levels that signal Americans will open their wallets for holiday purchases, a University of Michigan survey showed. Sentiment index fell to 98.5 from 100.7 in Oct.; preliminary reading was 97.8. Current conditions gauge, which measures Americans' perceptions of their finances, fell to 113.5 from 116.5. Expectations measure decreased to 88.9 from 90.5. (Source: Bloomberg)
U.S. Business equipment orders fall for first time since June. U.S. business equipment orders unexpectedly fell in October for the first time in four months even as a gain in capital goods shipments pointed to steady investment growth, Commerce Department figures showed. Non-military capital goods orders excluding aircraft declined 0.5% after rising an upwardly revised 2.1% the prior month. Shipments of those goods, which are used to calculate gross domestic product, rose 0.4% after an upwardly revised 1.2% increase. Bookings for all durable goods dropped 1.2% following an upwardly revised 2.2% increase. (Source: Bloomberg)
U.S: Fed signals December hike even as debate on prices persists. Federal Reserve officials meeting earlier this month saw an interest-rate increase in the near term even as tepid inflation drove divisions over the policy path and as financial stability concerns cropped up. "Many participants thought that another increase in the target range for the federal funds rate was likely to be warranted in the near term if incoming information left the medium-term outlook broadly unchanged," according to minutes from their Oct. 31-Nov. 1 gathering, released in Washington. Policy makers held rates steady at the meeting but are expected to hike next month as they continue with gradual tightening. Unemployment is at a 16-year low, although inflation remains well beneath their 2 percent target. (Source: Bloomberg)
E.U: Euro-area consumer confidence continued its steady improvement this month, rising to its highest in 17 years. The index jumped to reach 0.1, the first time it's been above zero since January 2001. A year ago, the European Commission gauge was down at minus 6.2, and its crisis low was minus 34.7. (Source: Bloomberg)
Singapore: Sees economy growing as much as 3.5% in 2017. Singapore raised its economic growth forecast for this year to 3-3.5 percent after third-quarter data was revised higher on the back of stronger exports and manufacturing. Gross domestic product rose at a seasonally adjusted, annualized rate of 8.8% in the third quarter from the previous three months, the trade ministry said, revising its earlier projection of 6.3 percent. GDP increased 5.25 YoY. Economy seen expanding 1.5-3.5% next year. (Source: Bloomberg) | |
| | | | | Other News:
Kerjaya Prospek: Posts record profit in 3Q; bags MYR245m job. Net profit jumped 35% YoY to a record MYR34.4 m in the third quarter ended Sept 30, 2017, from MYR25.49m, driven by its construction segment which mitigated a slowdown in its manufacturing segment. For the cumulative nine-month period, the group's net profit rose 30.4% YoY to MYR96.16m from MYR73.75m. It also bagged a MYR245.35m contract to build an upmarket Triuni Condominium within "The Sanctuary" development in Batu Uban, Penang. (Source: The Edge Financial Daily)
Prestariang: Bags MYR13.31m contract from MOHE. Its subsidiary Prestariang Systems S/B has been awarded a MYR13.31m contract by the Higher Education Ministry to supply software licenses and related value-added services of Adobe Creative Cloud Software and Services to the ministry and its agencies, as well as all public universities, polytechnics and community colleges. (Source: The Sun Daily)
Econpile: 1Q profit up 29%, declares 1.5 sen dividend. Net profit for its first financial quarter ended Sept 30, 2017 climbed 28.9% to MYR21.19m from MYR16.45m a year earlier, thanks to higher revenue. Econpile said quarterly revenue jumped 48.1% YoY to MYR168.9m from MYR114.08m due to significant progress billings from larger-ticket projects, including works for iconic properties like Maju Kuala Lumpur, Oxley Towers KLCC and Pavilion Damansara Heights. It declared a first interim dividend of 1.5 sen per share. (Source: The Edge Financial Daily) | |
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