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| | | | | | | | | | | | | | | | Share Price: | MYR1.62 | Target Price: | MYR1.85 | Recommendation: | Buy | | |
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| | | 3Q17: Earnings in-line | | 3Q17 results were within estimates; bottomline was driven by lower interest costs and higher rental income. We raise FY17-19 earnings forecasts by 1%-4% after adjusting for our interest cost estimates but maintain our MYR1.85 DDM-TP (cost of equity: 7.5%). IGBREIT remains our top pick for the sector. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 489.2 | 507.3 | 524.9 | 544.1 | Net property income | 342.8 | 361.1 | 373.6 | 387.7 | Distributable income | 291.0 | 317.3 | 338.3 | 344.6 | DPU (sen) | 7.4 | 7.8 | 8.7 | 8.8 | DPU growth (%) | 5.1 | 6.3 | 10.8 | 1.2 | Price/DPU(x) | 22.0 | 20.7 | 18.7 | 18.4 | P/BV (x) | 1.5 | 1.5 | 1.5 | 1.5 | DPU yield (%) | 4.5 | 4.8 | 5.4 | 5.4 | ROAE (%) | 6.9 | 7.6 | 8.1 | 8.2 | ROAA (%) | 4.9 | 5.4 | 5.8 | 5.8 | Debt/Assets (x) | 0.2 | 0.2 | 0.2 | 0.2 |
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| | | | | | | | | | | | | | Share Price: | MYR1.04 | Target Price: | MYR1.12 | Recommendation: | Hold | | |
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| | | Expanding UK presence | | We are Neutral on the latest partnership in London pending further details from the management. The partnership with WD, which involves twelve sites in Greater London and the South East of England, could expand EWI's presence in the UK by fourfold and allow it to tap into the local mainstream market. We maintain our earnings forecasts, MYR1.12 RNAV-TP and HOLD rating for now. | | |
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| | FYE Oct (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 0.0 | 0.7 | 0.5 | 0.6 | EBITDA | 0.0 | (37.6) | (63.4) | (60.5) | Core net profit | 0.0 | (220.1) | (125.2) | 207.1 | Core FDEPS (sen) | 0.0 | (89.3) | (5.2) | 8.6 | Core FDEPS growth(%) | na | nm | nm | nm | Net DPS (sen) | 0.0 | 0.0 | 0.0 | 0.0 | Core FD P/E (x) | nm | nm | nm | 12.1 | P/BV (x) | nm | 2.4 | 0.8 | 0.9 | Net dividend yield (%) | 0.0 | 0.0 | 0.0 | 0.0 | ROAE (%) | na | (408.0) | (9.5) | 7.9 | ROAA (%) | na | (35.4) | (5.3) | 5.8 | EV/EBITDA (x) | na | na | nm | nm | Net debt/equity (%) | nm | 803.5 | net cash | net cash |
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| | | | | | MACRO RESEARCH | | | | | | | Dow Jones Industrial Average: Pullback Imminent
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI gave up most of Tuesday's gain after the benchmark index tumbled 6.74pts to 1,744.20 yesterday, led by decline in PTG, PETD and GENM. Market breadth remained negative with losers outpacing gainers by 481 to 367. A total of 2.59b shares worth MYR2.14b changed hands. FBMKLCI will continue to be choppy in the near-term. Firm oil price and decent corporate earnings should lend support to the local bourses but market lacks catalyst to drive shares higher. | |
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| | NEWS | | | Outside Malaysia:
U.K: London house-price slump persists as brokers see sales tumble. A survey by the Royal Institution of Chartered Surveyors showed a price gauge at its lowest level for seven years, and far below the national average. Real-estate agents are more pessimistic about the market in the capital than any other region, with contributors flagging a potent mix of concerns, including Brexit uncertainty, the Bank of England's interest- rate hike and the government's budget later this month. There's also evidence that the weakness in the capital is spreading -- most U.K. regions showed a drop in sales in October, while a national gauge of prices turned dropped to near zero, indicating stagnant prices. (Source: Bloomberg)
China: Export buffer for deleveraging fading into year-end. China's October trade data pointed to fading momentum heading into the end of the year, as both exports and imports slowed. Exports came in at 6.9% YoY, down from 8.1% YoY in September. Imports came in at 17.2% YoY, down from 18.6% YoY in September. (Source: Bloomberg)
Thailand: Holds rate with inflation seen meeting goal in 2018. Thailand's central bank kept its benchmark interest rate unchanged near a record low and said it could meet its inflation target next year. The one-day bond repurchase rate was left at 1.5%, with monetary policy committee members voting unanimously in favor, the Bank of Thailand said in a statement on its website. Inflation could return to the target range of 1% to 4% in mid-2018, Assistant Governor Jaturong Jantarangs said in a briefing in Bangkok. Economic growth will be faster than previous assessment and overall financial conditions remain accommodative, central bank said in statement. Exchange rates might be highly volatile due to uncertainty of U.S. (Source: Bloomberg)
Crude Oil: Holds losses as US crude output climbs to record. U.S. crude output climbed to the highest in more than three decades and as stockpiles unexpectedly rose. Production expanded for a third week to 9.62 million barrels a day, the highest in weekly Energy Information Administration data going back to 1983. Crude inventories rose by 2.24 million barrels last week, compared with a forecast 2.45-million barrel decline in a Bloomberg survey. Brent for January settlement was USD 63.49/bbl on the London-based ICE Futures Europe exchange. (Source: Bloomberg) | |
| | | | | Other News:
LBS Bina: Launches 470-acre new township Alam Perdana. LBS Bina Group Bhd's latest township project Alam Perdana in Puncak Alam, Selangor will be launched this weekend. The developer is confident that phase 1 will be fully taken up within six months of the launch, according to group managing director Tan Sri Lim Hock San. Located in Ijok, Alam Perdana is a 470-acre leasehold township development that will be developed over eight phases. It has a GDV of MYR2.7b. (Source: The Edge Financial Daily)
Malaysian Pacific Industries: Records lower 1QFY18 profits. The group said its net profit fell 8.7% to MYR36.24m for its first financial quarter ended Sept 30, 2017, from MYR39.72m a year earlier, mainly due to higher material cost arising and higher commodity price. However, quarterly revenue inched up 8.3% to MYR387.6m from MYR358m. MPI has declared a higher first interim single tier dividend of 10 sen per share to be paid on Dec 8, compared with 8 sen previously. (Source: The Edge Financial Daily)
Wah Seong: Indirect unit faces EUR3.9m claim from Bauhuis, plans counter-claim. Wah Seong will be potentially sued for EUR3.9m (MYR19.1m) in relation to its contract for the supply of pipe coating equipment to be installed and commissioned by Bauhuis at a pipe manufacturing plant in Regina, Canada. (Source: The Sun Daily) | |
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