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| | | | | | | | | | | | | | | | Share Price: | MYR1.17 | Target Price: | MYR1.40 | Recommendation: | Buy | | |
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| | | Check-in to an Asia-Pac portfolio | | We are positive on YTLREIT, the only pure hospitality play in the M-REIT sector, with a strong asset portfolio consisting of Malaysian and Japanese assets (providing stable, recurring income) and Australian hotels (which provide earnings growth potential). Also, we favour its strong pipeline of potential assets injection, located globally, from its sponsor, YTL Corp (YTL MK; Not Rated). The trust offers a favourable, potential total return of 26%. Our DDM-TP is MYR1.40. Initiate BUY. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 426.3 | 449.7 | 477.7 | 504.0 | Net property income | 198.9 | 209.6 | 225.3 | 244.0 | Distributable income | 104.5 | 122.7 | 129.7 | 153.9 | DPU (sen) | 7.1 | 7.3 | 6.9 | 8.1 | DPU growth (%) | (1.0) | 2.4 | (5.8) | 18.6 | Price/DPU(x) | 16.5 | 16.1 | 17.1 | 14.4 | P/BV (x) | 0.8 | 0.8 | 0.8 | 0.8 | DPU yield (%) | 6.1 | 6.2 | 5.9 | 6.9 | ROAE (%) | (0.3) | (0.5) | 1.6 | 2.0 | ROAA (%) | 2.9 | 3.1 | 3.0 | 3.5 | Debt/Assets (x) | 0.4 | 0.3 | 0.4 | 0.4 |
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| | | | | | | | | | | | | | Share Price: | MYR2.88 | Target Price: | MYR3.18 | Recommendation: | Buy | | |
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| | | | | The pre-conditional cash offer from Jacobs Douwe Egberts Holdings Asia NL. B.V. (JDE) for all issued shares of OTB at MYR3.18/share provides a 10% upside from OTB's last share price. The takeover price translates to 19.8x CY18E PER, close to OTB's recent peak PER of 21.4x in May 2017. We recommend investors to accept the offer. We raise our TP to MYR3.18 from MYR2.90 to reflect the offer price. | | |
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| | FYE Mar (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 393.4 | 425.2 | 459.4 | 503.5 | EBITDA | 84.7 | 97.1 | 107.9 | 115.7 | Core net profit | 55.3 | 65.6 | 69.8 | 75.8 | Core EPS (sen) | 11.9 | 14.2 | 15.1 | 16.4 | Core EPS growth (%) | 6.1 | 18.6 | 6.5 | 8.5 | Net DPS (sen) | 9.0 | 10.0 | 8.3 | 9.0 | Core P/E (x) | 24.1 | 20.3 | 19.1 | 17.6 | P/BV (x) | 3.7 | 3.6 | 3.3 | 3.1 | Net dividend yield (%) | 3.1 | 3.5 | 2.9 | 3.1 | ROAE (%) | 15.0 | 16.6 | 18.1 | 18.1 | ROAA (%) | 12.5 | 14.5 | 14.8 | 14.9 | EV/EBITDA (x) | 6.4 | 11.5 | 10.7 | 9.8 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR3.80 | Target Price: | MYR4.45 | Recommendation: | Buy | | |
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| | | 9MFY1/18 results preview | | We expect 9MFY1/18 results, due this month, to yield minimal surprises. QoQ earnings are expected to be weaker due to lower associate contributions. We remain positive over Yinson's business direction & prospects, earnings growth and steady cashflow strength. Our SOP-based TP, which offers a 16% upside, has upside bias, for it has yet to include potential earnings/NPV positives from FPSO Lam Son and Layang. | | |
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| | FYE Jan (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,038.6 | 764.2 | 1,000.5 | 1,139.7 | EBITDA | 261.0 | 283.8 | 560.9 | 697.6 | Core net profit | 173.1 | 219.5 | 375.3 | 340.5 | Core EPS (sen) | 16.2 | 20.6 | 35.2 | 31.9 | Core EPS growth (%) | 17.5 | 26.8 | 71.0 | (9.3) | Net DPS (sen) | 1.5 | 16.8 | 10.4 | 10.0 | Core P/E (x) | 23.4 | 18.5 | 10.8 | 11.9 | P/BV (x) | 1.8 | 1.7 | 1.3 | 1.2 | Net dividend yield (%) | 0.4 | 4.4 | 2.7 | 2.6 | ROAE (%) | 12.0 | 8.5 | 13.7 | 10.7 | ROAA (%) | 4.8 | 3.9 | 5.6 | 4.8 | EV/EBITDA (x) | 15.6 | 21.4 | 11.3 | 8.5 | Net debt/equity (%) | 51.9 | 114.7 | 72.9 | 54.9 |
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| | | | | | MACRO RESEARCH | | | | | | | KLTEC Index Shaken off the Bear, Bull Remained In charge
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI edged lower after paring earlier gains At day's end, the benchmark index closed at 1,719.47 lead by a declines in GENTING, IJM, RHBBANK and SIME. The broader market, however, turned bullish after gainers outpaced losers by 444 to 409. A total of 1.64b shares worth MYR1.97b changed hands. Despite the lower close, sentiment has been improving as markets head into the seasonally bullish month of trading in Dec. | |
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| | NEWS | | | Outside Malaysia:
U.S: Firms say sales outlook, not taxes, to drive spending. U.S. companies expect their investment and hiring to grow at a slower pace in 2018, and only a small share say proposed tax legislation is driving their capital-spending decisions, according to a private survey. The Institute for Supply Management's semi-annual forecast showed factory purchasing managers see capital spending rising 2.7% in 2018, slower than the 8.7% gain reported for this year. Their counterparts at service providers' project investment growth of 3.8%, also weaker than this year's 7% advance. Less than half of respondents in both manufacturing and services said they'd raised wages to attract workers. (Source: Bloomberg)
U.K: Wants 'virtually identical' trade deal with EU after Brexit. International Trade Secretary Liam Fox said the U.K. would like a trading relationship with the European Union after it leaves the bloc that's "virtually identical" to the one it has now. A trade deal similar to the current arrangements would ensure a smooth transition period, Fox said in an interview in Buenos Aires while attending a World Trade Organization ministerial meeting. "What I want to see is a full and comprehensive agreement on trade that's as close to what we have today as possible," Fox said. "If you had a very open and liberal agreement that's virtually identical to what we have today, for example, then the transitional period wouldn't need to be as long or as difficult as if it was to something different." (Source: Bloomberg)
China: Credit growth exceeds estimates as funding remains buoyant. China's broadest gauge of new credit exceeded projections, signalling that a government push against leverage hasn't crimped lending growth. Aggregate financing stood at CNY1.6t (USD242b) in November, the People's Bank of China said, compared with CNY1.04t the prior month. New yuan loans stood at CNY1.12t. The broad M2 money supply increased 9.1% YoY, rising from the 8.8% YoY record low in October. (Source: Bloomberg)
China: Fiscal spending fell for a second month in November, dropping 9.1% YoY to CNY1.66t (USD251b), the Ministry of Finance said. The two-month decline came after spending increased in eight of the first nine months and annual fiscal expenditures rose 7.8% this year through November. Authorities smoothed out fiscal flows before a twice-a-decade Party Congress in October, a break with the past practice of hoarding revenue in early months for a splurge in the last quarter. Tighter local government finance rules as well as stricter reviews for infrastructure projects are compounding the effect of less stimulus in the final months, and may weigh on the world's second-largest economy where growth still depends largely on investment. (Source: Bloomberg) | |
| | | | | Other News:
Pos Malaysia: Shukrie Salleh steps down Pos Malaysia CEO. Pos Malaysia yesterday announced the resignation of its group CEO Datuk Mohd Shukrie Mohd Salleh effective December 31, 2017. Shukrie has expressed his desire to make a career change for quite some time having served DRB-Hicom, the parent company of Pos Malaysia for 12 years including serving Pos Malaysia for five years. Datuk Azlan Shahrim has been appointed as covering CEO and he will report to the board until a suitable candidate is appointed. (Source: The Sun Daily)
Gets Global: Buys 79% stake in public transport service provider. Gets Global is acquiring a 79.99% stake in Pengangkutan Awam Putrajaya Travel & Tours S/B (PAPTT) for MYR1. Its wholly-owned subsidiary Konsortium Bas Ekspres Semenanjung (M) S/B (KBESM) today entered into a share sale agreement (SSA) with Putrajaya Leisures & Services Group S/B (Pulse group). The signing follows a memorandum of understanding struck between the two companies in October. The acquisition will provide the group with an opportunity to venture into city bus services, which is a new sustainable business to complement its existing business activities of express bus services, new bus sales and repair and maintenance services. (Source: The Sun Daily)
SWS Capital: Proposes two-for-eight bonus issue with free warrants. SWS Capital has proposed a bonus issue of two new shares together with five warrants for every eight shares held. The exercise involves the issuance of 36.47m new shares and 91.17m free detachable warrants. The warrants will have a five-year tenure, with an exercise price of 90 sen. The price was fixed based on SWS Capital's five-day volume weighted average market price of up to Dec 5. The proceeds raised from the warrants in future will be utilised for working capital. (Source: The Edge Financial Daily)
KPJ Healthcare: To sell car park asset to Al-'Aqar for MYR13m. KPJ Healthcare's 60%-owned subsidiary Selangor Specialist Hospital S/B (SgSH) is disposing of a five-storey car park block located within the KPJ Selangor Specialist Hospital in Shah Alam to Al-'Aqar Healthcare REIT for MYR13m. SgSH last Friday, entered into a sale and purchase agreement (SPA) with AmanahRaya Trustees, being the trustee of Al-'Aqar, for the proposed disposal of the car park block, which it plans to inject into the REIT at a future date to be agreed by both parties. As a condition to the proposed disposal, SgSH will enter into a lease agreement based on the lease rental terms and conditions to be agreed with AmanahRaya Trustees on behalf of Al-'Aqar, and Damansara REIT Managers S/B being the manager of Al-'Aqar on the completion date of the SPA. (Source: The Edge Financial Daily) | |
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