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| | | | | | | | | | | | | | | | Share Price: | MYR4.62 | Target Price: | MYR5.60 | Recommendation: | Buy | | |
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| | | Vying for KL-SG HSR's PDP role | | Gamuda's announcement of its interest in the PDP role for the KL-SG HSR civil infrastructure construction is not unexpected given its significant contribution in major infrastructure development in Malaysia. However, its partnership with MRCB for the PDP role is a surprise. Based on its track record, we believe Gamuda is a strong contender for the PDP role. Maintain BUY with an unchanged RNAV-TP of MYR5.60. | | |
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| | FYE Jul (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,121.9 | 3,211.4 | 4,031.6 | 4,032.3 | EBITDA | 548.5 | 831.2 | 804.9 | 907.5 | Core net profit | 626.1 | 700.6 | 761.9 | 823.2 | Core EPS (sen) | 26.0 | 24.2 | 22.6 | 24.4 | Core EPS growth (%) | (10.2) | (6.9) | (6.6) | 8.1 | Net DPS (sen) | 12.0 | 12.0 | 12.0 | 12.0 | Core P/E (x) | 17.8 | 19.1 | 20.4 | 18.9 | P/BV (x) | 1.6 | 1.8 | 2.0 | 1.8 | Net dividend yield (%) | 2.6 | 2.6 | 2.6 | 2.6 | ROAE (%) | 9.5 | 8.4 | 9.9 | 10.1 | ROAA (%) | 4.6 | 4.7 | 4.7 | 4.9 | EV/EBITDA (x) | 29.0 | 24.5 | 26.2 | 22.5 | Net debt/equity (%) | 55.2 | 59.8 | 60.9 | 48.7 |
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| | | | | | | | | | | | | | Share Price: | MYR5.30 | Target Price: | MYR5.50 | Recommendation: | Hold | | |
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| | | Investor day takeaways | | The main surprise was digital business climbing up the priority list (both from capital allocation and earnings contribution) going forward, with the emphasis on profitability and returns. Maintain HOLD with an unchanged MYR5.50 TP. Risk-reward remains balanced for now. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 19,883.5 | 21,565.4 | 24,373.0 | 25,786.5 | EBITDA | 7,284.1 | 8,012.6 | 9,377.5 | 10,088.8 | Core net profit | 2,071.0 | 1,418.0 | 1,300.6 | 1,461.6 | Core EPS (sen) | 23.9 | 16.0 | 14.5 | 16.3 | Core EPS growth (%) | (8.6) | (33.1) | (9.2) | 12.4 | Net DPS (sen) | 20.0 | 8.0 | 7.2 | 13.8 | Core P/E (x) | 22.2 | 33.2 | 36.6 | 32.5 | P/BV (x) | 2.0 | 2.0 | 2.0 | 1.9 | Net dividend yield (%) | 3.8 | 1.5 | 1.4 | 2.6 | ROAE (%) | 11.5 | 2.1 | 5.4 | 6.0 | ROAA (%) | 3.9 | 2.2 | 1.8 | 2.0 | EV/EBITDA (x) | 9.4 | 8.0 | 7.3 | 6.8 | Net debt/equity (%) | 42.3 | 59.1 | 38.6 | 36.9 |
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| | | | | | | | | | | | | | Share Price: | MYR5.93 | Target Price: | MYR6.95 | Recommendation: | Buy | | |
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| | | 3Q17 results within expectations | | 9M17 core net earnings were within expectations, rising a commendable 29% YoY. Pressures on NIM however, are likely to persist and amid expectations of slower loan growth, our FY18/19E earnings are trimmed by 4-6%. We continue to view CIMB favourably for the ongoing recovery in overall ROEs and maintain our BUY call, but with a lower TP of MYR6.95 (vs MYR7.50 previously) on a lower FY18 PBV peg of 1.2x (FY18E ROE: 10.0%) versus 1.3x (ROE: 10.6%) previously. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Operating income | 15,395.8 | 16,065.3 | 16,935.0 | 17,450.1 | Pre-provision profit | 6,146.8 | 7,413.6 | 7,993.5 | 8,328.0 | Core net profit | 3,411.2 | 3,414.4 | 4,457.7 | 4,849.6 | Core EPS (MYR) | 0.40 | 0.39 | 0.50 | 0.55 | Core EPS growth (%) | 5.6 | (2.4) | 27.9 | 8.8 | Net DPS (MYR) | 0.14 | 0.20 | 0.26 | 0.28 | Core P/E (x) | 14.7 | 15.1 | 11.8 | 10.8 | P/BV (x) | 1.2 | 1.1 | 1.1 | 1.1 | Net dividend yield (%) | 2.4 | 3.4 | 4.4 | 4.7 | Book value (MYR) | 4.87 | 5.24 | 5.37 | 5.64 | ROAE (%) | 8.7 | 7.9 | 9.6 | 10.0 | ROAA (%) | 0.8 | 0.7 | 0.9 | 1.0 |
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| | | | | | | | | | | | | | Share Price: | MYR3.07 | Target Price: | MYR3.40 | Recommendation: | Buy | | |
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| | | 2QFY18: Slight shortfall | | 2QFY3/18 core earnings were below our/consensus estimates due to weaker contributions form plantation, industry and property. We lower net profit forecasts for FY18-20 by 9%-11% after adjusting for i) higher cost at plantation and industry, and ii) lower throughput assumption for Kuantan Port. Our SOP-based TP is lowered to MYR3.40 (-40sen). Remain positive on IJM for its robust orderbook of MYR9.4b, resilient unbilled property sales of MYR1.9b and long term investments in infrastructure. | | |
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| | FYE Mar (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 5,128.2 | 6,065.3 | 7,222.7 | 7,876.5 | EBITDA | 1,166.7 | 1,125.8 | 1,040.6 | 1,219.6 | Core net profit | 509.3 | 505.1 | 524.7 | 628.4 | Core EPS (sen) | 14.3 | 14.0 | 14.5 | 17.4 | Core EPS growth (%) | (12.5) | (2.0) | 3.9 | 19.8 | Net DPS (sen) | 10.0 | 7.5 | 7.0 | 7.0 | Core P/E (x) | 21.5 | 22.0 | 21.1 | 17.7 | P/BV (x) | 1.2 | 1.2 | 1.1 | 1.1 | Net dividend yield (%) | 3.3 | 2.4 | 2.3 | 2.3 | ROAE (%) | 9.1 | 7.1 | 5.4 | 6.3 | ROAA (%) | 2.6 | 2.5 | 2.5 | 2.9 | EV/EBITDA (x) | 15.4 | 15.5 | 15.9 | 13.4 | Net debt/equity (%) | 40.4 | 35.3 | 36.5 | 33.1 |
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| | | | | | | | | | | | | | Share Price: | MYR1.51 | Target Price: | MYR2.15 | Recommendation: | Buy | | |
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| | | Within expectations | | 9M17 core net loss of MYR73m made up 95% of our FY17 estimate, in-line as we expect losses to narrow significantly in 4Q17, aided by a year-end incentive from Nissan Japan, a repeat of 4Q16. On the brighter side, 3Q17 core net losses have narrowed QoQ while inventory was reduced further to MYR1.3b (-3% QoQ). We remain BUYers of TCM from a valuation angle, currently trading at its trough of 0.4x P/NTA. Our TP is unchanged at MYR2.15, pegged to an unchanged 0.5x 2017 P/NTA (-1SD). | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 5,716.7 | 5,460.8 | 4,637.1 | 5,098.0 | EBITDA | 307.2 | 158.9 | 127.5 | 177.2 | Core net profit | 76.5 | (48.4) | (76.9) | (23.6) | Core EPS (sen) | 11.7 | (7.4) | (11.8) | (3.6) | Core EPS growth (%) | 11.5 | nm | nm | nm | Net DPS (sen) | 5.0 | 2.0 | 1.0 | 1.0 | Core P/E (x) | 12.9 | nm | nm | nm | P/BV (x) | 0.4 | 0.3 | 0.4 | 0.4 | Net dividend yield (%) | 3.3 | 1.3 | 0.7 | 0.7 | ROAE (%) | 2.7 | (1.9) | (2.7) | (0.9) | ROAA (%) | 1.5 | (0.9) | (1.4) | (0.4) | EV/EBITDA (x) | 9.1 | 16.8 | 19.4 | 14.4 | Net debt/equity (%) | 37.7 | 51.2 | 51.7 | 55.1 |
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| | | | | | | | | | | | | | Share Price: | MYR1.30 | Target Price: | MYR1.60 | Recommendation: | Buy | | |
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| | | A slow start, as expected | | Despite 1QFY6/18 earnings making up just 14% of our full-year forecast, the results are in line as we expect much stronger quarters ahead, riding on Perodua's successful launch of the all-new Myvi model which will translate into higher sales for Pecca's OEM division; Pecca is the sole supplier of leather car seat covers to Perodua. Our earnings forecasts, BUY rating and MYR1.60 TP (14.5x CY18 PER, 20% premium to peers valuation) are unchanged. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 126.3 | 122.2 | 144.9 | 150.8 | EBITDA | 22.6 | 21.0 | 28.4 | 30.9 | Core net profit | 16.5 | 14.8 | 20.0 | 21.4 | Core EPS (sen) | 8.8 | 7.9 | 10.8 | 11.5 | Core EPS growth (%) | (8.0) | (10.5) | 37.2 | 7.2 | Net DPS (sen) | 4.0 | 5.0 | 6.0 | 6.0 | Core P/E (x) | 14.8 | 16.6 | 12.1 | 11.3 | P/BV (x) | 1.6 | 1.5 | 1.4 | 1.3 | Net dividend yield (%) | 3.1 | 3.8 | 4.6 | 4.6 | ROAE (%) | 12.7 | 9.2 | 11.9 | 12.0 | ROAA (%) | 11.3 | 8.0 | 10.5 | 10.7 | EV/EBITDA (x) | 9.4 | 10.0 | 5.3 | 4.5 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR4.12 | Target Price: | MYR4.50 | Recommendation: | Hold | | |
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| | | 2QFY18 results within expectations | | AMMB's 1HFY18 earnings were within expectations and positively, loan growth momentum has been sustained, though this has been offset somewhat by lower NIMs for the quarter. Our earnings forecasts are unchanged but with ROEs expected to trend around the 8% range, which is the lowest within our bank coverage, we trim our CY18 PBV multiple peg to 0.75x from 0.8x and our TP to MYR4.50 from MYR4.80. Dividend yield of 4.5% (FY18) nevertheless provides support to share price. | | |
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| | FYE Mar (MYR m) | FY16A | FY17A | FY18E | FY19E | Operating income | 3,693.3 | 3,620.8 | 3,883.8 | 4,167.1 | Pre-provision profit | 1,519.0 | 1,460.4 | 1,680.8 | 1,903.3 | Core net profit | 1,355.9 | 1,216.5 | 1,386.6 | 1,475.5 | Core EPS (MYR) | 0.45 | 0.40 | 0.46 | 0.49 | Core EPS growth (%) | (17.2) | (10.3) | 13.7 | 6.4 | Net DPS (MYR) | 0.16 | 0.18 | 0.18 | 0.20 | Core P/E (x) | 9.1 | 10.2 | 9.0 | 8.4 | P/BV (x) | 0.8 | 0.8 | 0.7 | 0.7 | Net dividend yield (%) | 3.8 | 4.3 | 4.5 | 4.8 | Book value (MYR) | 5.03 | 5.32 | 5.74 | 6.04 | ROAE (%) | 9.2 | 7.8 | 8.3 | 8.3 | ROAA (%) | 1.0 | 0.9 | 1.0 | 1.0 |
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| | | | | | | | | | | | Ta Ann (TAH MK)
by Chee Ting Ong |
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| | | | | Share Price: | MYR3.56 | Target Price: | MYR3.86 | Recommendation: | Hold | | |
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| | | Expecting weaker 4Q17 | | Ta Ann's 3Q17 core net profit was impacted by a MYR5.3m loss from its timber division. It met 20%/18% of our/consensus full-year forecasts, within ours but below consensus expectations. We make no changes to our FY17 net profit forecast. Ta Ann remains a HOLD with an unchanged TP of MYR3.86, based on unchanged 15x FY17 PER (5-year mean). | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 1,048.3 | 1,147.8 | 957.2 | 988.6 | EBITDA | 317.4 | 268.6 | 264.7 | 279.8 | Core net profit | 168.4 | 125.6 | 114.4 | 117.3 | Core EPS (sen) | 37.9 | 28.2 | 25.7 | 26.4 | Core EPS growth (%) | 66.0 | (25.4) | (8.9) | 2.5 | Net DPS (sen) | 16.7 | 10.0 | 11.6 | 11.9 | Core P/E (x) | 9.4 | 12.6 | 13.8 | 13.5 | P/BV (x) | 1.3 | 1.2 | 1.2 | 1.1 | Net dividend yield (%) | 4.7 | 2.8 | 3.3 | 3.3 | ROAE (%) | 15.9 | 10.2 | 8.7 | 8.5 | ROAA (%) | 8.7 | 6.2 | 5.2 | 5.0 | EV/EBITDA (x) | 6.4 | 7.0 | 7.2 | 6.5 | Net debt/equity (%) | 11.2 | 5.4 | 20.0 | 10.9 |
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| | | | | | | | | | | | | | Share Price: | MYR0.41 | Target Price: | MYR0.39 | Recommendation: | Hold | | |
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| | | Hit by higher-than-expected tax rate | | 2QFY3/18 results missed our expectations on higher-than-expected taxes and lower-than-expected positive minority interest. Despite subdued consumer sentiment, the Malaysia and Greater China segments performed better QoQ. Our FY18-20 earnings estimates are lowered by 16%-17% after adjusting our tax and minority interest assumptions. Our new TP is MYR0.39 (vs. MYR0.44) pegged to an unchanged 11x CY17 PER. | | |
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| | FYE Mar (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,362.3 | 1,338.3 | 1,140.8 | 1,159.3 | EBITDA | 205.2 | 154.2 | 115.9 | 125.5 | Core net profit | 111.6 | 83.0 | 51.6 | 57.6 | Core EPS (sen) | 6.6 | 4.9 | 3.1 | 3.4 | Core EPS growth (%) | (22.7) | (25.7) | (37.8) | 11.5 | Net DPS (sen) | 4.3 | 3.2 | 2.1 | 2.4 | Core P/E (x) | 6.3 | 8.4 | 13.6 | 12.2 | P/BV (x) | 0.8 | 0.8 | 0.9 | 0.9 | Net dividend yield (%) | 10.3 | 7.7 | 5.2 | 5.8 | ROAE (%) | 12.9 | 7.9 | 6.3 | 7.2 | ROAA (%) | 7.1 | 5.6 | 3.9 | 4.8 | EV/EBITDA (x) | 5.5 | 6.1 | 4.1 | 3.4 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | MACRO RESEARCH | | | | | | | SHSZ300 Index: Corrective Wave 4 Underway
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI was hit by another round of selloff. At day's end, the benchmark index fell 5.44pts to 1,714.42, off its intraday low of 1,709.94, led by declines in AMM, YTL and GENT. Market breadth has worsened, with losers outpacing gainers by 613 to 286. A total of 1.80b shares worth MYR2.08b changed hands. Market could be choppy in the early going after North Korea launched a ballistic missile, but sentiment will likely get a lift from gains on Wall Street. | |
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| | NEWS | | | Outside Malaysia:
U.S: Consumer confidence unexpectedly climbs to 17-year high in November, a sign Americans are growing more confident about the economy and labor market. Confidence index rose to 129.5, the best since November 2000, from a revised 126.2 in October. Present conditions measure improved to 153.9, the highest since June 2001, from 152. Consumer expectations gauge advanced to 113.3, the strongest reading since September 2000, from 109. (Source: Bloomberg)
U.S: Merchandise trade deficit widens to biggest in two years in October, while inventories at wholesalers and retailers declined, according to preliminary figures released by the Commerce Department. Goods-trade gap grew to USD 68.3b, widest since March 2015, from USD 64.1b the prior month. Wholesale inventories decreased 0.4% MoM while retail stockpiles fell 0.1% MoM after declining 0.9% MoM. (Source: Bloomberg)
Japan: October retail sales slip after weak 3Q consumption. Japan's retail sales fell in October from a year earlier, missing expectations in a sign that recent weak consumption could continue in the fourth quarter. Retail sales fell 0.2% YoY in October. Sales were unchanged from September. Sales at department stores and supermarkets fell 0.7% YoY. (Source: Bloomberg)
India: An assessment of Indian companies shows Asia's No. 3 economy is far from full strength, even as GDP growth is poised to recover from a three-year low. CARE Ratings Ltd. surveyed more than 1,200 companies and found that net profit fell, dragged down by tepid demand and the disruptive roll out of a new consumption tax. Underlying weakness -- accompanied by surging inflation -- may complicate matters for the central bank which decides on borrowing costs Dec. 6. (Source: Bloomberg)
Indonesia: Bank Indonesia plans to ease reserve rules for Islamic banks. Bank Indonesia plans to ease reserve requirement rules for banks next year to tide over any potential cash crunch, according to Governor Agus Martowardojo. The central bank will expand easier reserve requirements rules to include Islamic banks and non-rupiah deposits, Martowardojo said at the annual bankers' dinner in Jakarta. Bank Indonesia has allowed conventional lenders to calculate their reserve requirement ratio as a two-week average since the beginning of July, while the amount of deposits that must be kept with the central bank each day has been cut to 5% from 6.5%. (Source: Bloomberg) | |
| | | | | Other News:
Advancecon: Bags MYR75.5m contract to undertake infrastructure works on SKVE. The group has bagged a MYR75.5m contract to carry out earthworks and infrastructure works on the South Klang Valley Expressway (SKVE). The contract was awarded by SKVE Holdings S/B to its subsidiary Advancecon Infra S/B. As the main contractor, Advancecon Infra would undertake site clearance, soil treatment works, drainage works, and general infrastructure works for SKVE. (Source: The Edge Financial Daily
Compugates: In JV for MYR775m mixed development in Dengkil. Its wholly-owned unit Compugates Development and Mining S/B (CDMSB) will jointly develop a piece of 25.09ha agriculture land in Dengkil, Selangor, with Jade Classic S/B. The plan, said the group, is for the land to be developed into a mixed development, subject to the approval of the authorities, comprising 500 houses, 1,100 Rumah Selangorku homes and four blocks of 600 units of high rise mixed residential and commercial units. The estimated gross development value (GDV) of the project is MYR775m. The group targets to launch the project in 2020, while the development is expected to take at least 10 years to complete with an extension of four years(Source: The Edge Financial Daily)
Ekovest: Posts flat 1Q net profit. The group reported a flat net profit for the first financial quarter ended Sept 30, 2017 (1QFY18), as higher sales recognition from its property development projects was offset by lower profits from its construction operations.Net profit came in at MYR39.91m in 1QFY18 compared with MYR40.1m a year ago. (Source: The Edge Financial Daily) | |
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