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| | | | | | | | | | | | | | | | Share Price: | MYR4.75 | Target Price: | MYR5.60 | Recommendation: | Buy | | |
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| | | Starting the year right | | 1QFY18 net earnings were within ours/consensus expectations. YoY growth was supported by i) acceleration in KVMRT 2 works and ii) stronger property sales. Gamuda remains a potential beneficiary of contracts from the East Coast Rail Link (ECRL), KVMRT 3, KL-SG HSR and Pan Borneo Sabah Highway (PBSaH). Recent share price weakness presents a buying opportunity. We keep our RNAV-based 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 | 28.8 | 31.4 | 33.9 | Core EPS growth (%) | (10.2) | 11.0 | 8.7 | 8.1 | Net DPS (sen) | 12.0 | 12.0 | 12.0 | 12.0 | Core P/E (x) | 18.3 | 16.5 | 15.1 | 14.0 | P/BV (x) | 1.7 | 1.6 | 1.5 | 1.4 | Net dividend yield (%) | 2.5 | 2.5 | 2.5 | 2.5 | ROAE (%) | 9.5 | 8.4 | 9.9 | 10.1 | ROAA (%) | 4.6 | 4.7 | 4.7 | 4.9 | EV/EBITDA (x) | 29.0 | 21.5 | 21.2 | 18.1 | Net debt/equity (%) | 55.2 | 59.8 | 60.9 | 48.7 |
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| | | | | | | | | | | | | | Share Price: | MYR1.48 | Target Price: | MYR1.71 | Recommendation: | Buy | | |
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| | | Delivered on its promise | | ECW's FY10/17 core net profit was above our expectation but below consensus. FY17's sales target was spot on. Given the challenging property market outlook and the lack of new projects, management targets lower sales of MYR3.5b for FY18 (-12.5% YoY). We adjust our earnings forecasts by -33% to +26% post-results. Our RNAV-TP is lowered to MYR1.71 (-17sen) based on a lower 0.6x P/RNAV peg. BUY. | | |
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| | FYE Oct (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,546.4 | 2,924.7 | 3,862.2 | 4,821.5 | EBITDA | 595.1 | 605.6 | 687.3 | 883.8 | Core net profit | 129.3 | 113.1 | 169.8 | 325.3 | Core EPS (sen) | 5.4 | 3.9 | 5.8 | 11.0 | Core EPS growth (%) | 105.9 | (28.1) | 47.5 | 91.6 | Net DPS (sen) | 0.0 | 0.0 | 0.0 | 1.1 | Core P/E (x) | 27.2 | 37.9 | 25.7 | 13.4 | P/BV (x) | 0.9 | 1.0 | 1.0 | 0.9 | Net dividend yield (%) | 0.0 | 0.0 | 0.0 | 0.7 | ROAE (%) | 3.7 | 5.2 | 3.9 | 7.1 | ROAA (%) | 1.6 | 1.2 | 1.6 | 2.8 | EV/EBITDA (x) | 9.3 | 12.4 | 11.0 | 8.5 | Net debt/equity (%) | 60.4 | 71.4 | 71.7 | 67.0 |
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| | | | | | | | | | | | | | Share Price: | MYR1.01 | Target Price: | MYR1.10 | Recommendation: | Hold | | |
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| | | Rooting in UK | | EWI's FY10/17 core net loss of MYR122m (+16% YoY) was in line but sales were above expectation. 2018 will be the tipping point with the handover of three towers at London City Island and Embassy Garden from April 2018. We are positive on the JV with Dixon where it will enhance EWI's foothold in UK, diversify its product range and for its fair pricing. We estimate a +9sen RNAV enhancement from the six projects. We adjust our earnings forecasts post results. Our RNAV-TP is intact at MYR1.10. | | |
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| | FYE Oct (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 0.7 | 0.6 | 0.6 | 1,693.8 | EBITDA | (37.6) | (53.3) | (89.1) | 1,602.2 | Core net profit | (220.1) | (87.6) | 173.7 | 383.2 | Core EPS (sen) | (89.3) | (5.8) | 7.2 | 16.0 | Core EPS growth (%) | nm | nm | nm | 120.6 | Net DPS (sen) | 0.0 | 0.0 | 0.0 | 4.0 | Core P/E (x) | nm | nm | 14.0 | 6.3 | P/BV (x) | 2.3 | 0.6 | 0.9 | 0.8 | Net dividend yield (%) | 0.0 | 0.0 | 0.0 | 4.0 | ROAE (%) | na | na | na | na | ROAA (%) | (35.9) | (4.5) | 6.2 | 12.8 | EV/EBITDA (x) | na | nm | nm | 1.1 | Net debt/equity (%) | 803.5 | net cash | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR2.96 | Target Price: | MYR3.00 | Recommendation: | Hold | | |
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| | | 4QFY17: Solid results | | 4QFY17: Solid results4QFY17 results were in line. Store openings are largely on track, having opened 62 stores in FY17 versus Mynews' internal target of 70. We tweak FY18/19 earnings forecasts by +4%/+1%, assuming lower taxes on tax incentives enjoyed by its MSC status subsidiary. Maintain HOLD with a higher TP of MYR3.00 on rolling forward valuations. | | |
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| | FYE Oct (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 264.0 | 326.5 | 394.9 | 460.5 | EBITDA | 27.1 | 35.0 | 38.9 | 55.9 | Core net profit | 19.3 | 24.0 | 30.3 | 34.4 | Core EPS (sen) | 6.2 | 7.8 | 8.9 | 10.1 | Core EPS growth (%) | 42.6 | 24.6 | 14.6 | 13.7 | Net DPS (sen) | 1.5 | 2.0 | 2.5 | 2.8 | Core P/E (x) | 47.6 | 38.2 | 33.3 | 29.3 | P/BV (x) | 6.0 | 3.8 | 3.8 | 3.5 | Net dividend yield (%) | 0.5 | 0.7 | 0.9 | 0.9 | ROAE (%) | 17.4 | 12.2 | 12.0 | 12.4 | ROAA (%) | 12.7 | 9.8 | 10.1 | 10.4 | EV/EBITDA (x) | 17.2 | 18.0 | 24.9 | 17.3 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | MACRO RESEARCH | | | | | | | Rebound in remittances
by Suhaimi Ilias |
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| | | | | | Overseas Filipino workers' remittances (OFWR) rebounded +8.4% YoY in Oct 2017 to USD2.28b (Sep 2017: -8.3% YoY to USD2.19b). OFRW growth in PHP terms surged by +15.1% YoY (Sep 2017: -1.3% YoY) which is supportive of domestic consumption in the final quarter of 2017. | |
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| | NEWS | | | Outside Malaysia:
U.K: Export growth climbs to nine-month high, BDO says. Index of annual U.K. export growth rises to nine-month high of 110.3 in fourth quarter, outperforming the rest of Europe, compared with long-term average rate of 100, accountancy firm BDO says in report published. (Source: Bloomberg)
China: PBOC raises interest rates in open market operations after Fed. The People's Bank of China sells CNY30b of 7-day reverse-repurchase agreements at 2.50%, up from 2.45% in previous operation, central bank says in statement. The CNY20b of 28-day reverse repos offered at 2.80% vs 2.75% previously. (Source: Bloomberg)
Japan: Export recovery stretches to 12th month in November, as external demand fuelled the nation's longest stretch of economic growth since the 1990s. The value of exports rose 16.2% YoY. Imports increased 17.2% YoY. The trade surplus was JPY 113.4b (USD 1b). A yearlong recovery in exports has kicked Japan into higher gear, fuelling record profits and rising capital spending during the longest economic expansion since the mid-1990s. Confidence among the nation's large manufacturers has reached the highest level in a decade, while sentiment is rising even among smaller companies. The wage growth needed to drive a self-sustaining recovery remains elusive, though, even as the labor shortage intensifies, prompting the government to plan to offer tax benefits to encourage higher pay. (Source: Bloomberg)
India: Raises tariffs on electronics to curb imports. India increased the customs duty on some electronics including mobile phones, television sets, and microwave ovens in a bid to curb imports and boost local manufacturing. The levy on mobiles and TVs was raised from 10% to 15%, according to a Ministry of Finance statement. Duty on digital cameras, video cameras and projectors was doubled to 20%. India's electronics imports grew about 31% to USD 29.8b during April to October, the steepest increase after shipments of ores and gems. (Source: Bloomberg) | |
| | | | | Other News:
EcoWorld International: Buys into six projects in UK for GBP64.9m. EcoWorld International (EWI) has finalised the first part of a two-stage deal, to jointly develop 12 project sites in Greater London and South East London with Be Living Holdings Ltd, for GBP64.9m (MYR356m). The consideration is for a 70% interest in Be Eco World Holdings Ltd, and another 70% stake in Be Eco World Development Management Co Ltd from Be Living. The purchase will see it work on six projects, namely South Woking, Woking, Kensal Rise and Maida Hill Brent and Westminster, London, Millbrook Park Barnet, London, Barking Abbey Retail Park Barking and Dagenham, London, Barking Site Barking and Dagenham, London, and Nantly House (Lampton) Hounslow, London. The purchase consideration is to be fully funded by the proceeds from its initial public offering. Development costs, which have not been finalised yet are expected to be funded through bank borrowings and/or internally-generated funds. (Source: The Sun Daily)
LBS Bina: To issue MYR500m sukuk murabahah. LBS Bina Group's wholly-owned subsidiary LBS Bina Holdings S/B (LBSH) has made a lodgement to the Securities Commission Malaysia (SC) for the establishment of the sukuk murabahah programme of up to MYR500m. The sukuk murabahah programme has a tenure of up to 20 years from the date of the first issue of sukuk murabahah under the programme. Each sukuk murabahah issued under the programme willl have a tenure of more than one year and up to 20 years. The sukuk murabahah is unrated, non-tradable and nontransferable. The proceeds from the sukuk murabahah programme will be utilised to finance/reimburse future acquisition of properties by LBGB and its subsidiaries; to finance development cost of the projects undertaken by the group; to refinancing existing and/or future borrowings; and to finance working capital requirement. (Source: The Sun Daily)
Eversendai: MYR3.2m lawsuit against Eversendai O&G withdrawn. Eversendai Corp's subsidiary Eversendai Oil and Gas (M) S/B announced that the MYR3.2m lawsuit filed against it by Translift S/B has been withdrawn and the two parties have mutually agreed to resort to arbitration instead. The suit filed in the Shah Alam High Court has been withdrawn by Translift on December 14, which also happened to be the date fixed for case management. (Source: The Sun Daily)
Metronic Global: Eyes turnaround. Metronic Global, which will be shifting its focus to its engineering business, is banking on a new partnership collaboration to develop a global halal hub in China to recognise profit. Metronic entered into a collaboration agreement with MB Longji Group's wholly owned subsidiary MB Longji Holdings S/B last Friday to set up Metronic Global Halal Industrial Hub in Sichuan Province, China. MB Longji has been appointed master developer of land measuring 1,800 acres by the Sichuan provincial government. Of this, 72 acres of infrastructure equipped area has been designated for the development of the halal industrial park, known as Suining International Halal Park. The group is banking on this project, which is touted as a "turnaround project", to rake in a pre-tax profit of MYR12.5m within 12-18 months. (Source: The Sun Daily) | |
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