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| | | | | | | | | | | | | | | | Share Price: | MYR4.87 | Target Price: | MYR5.63 | Recommendation: | Buy | | |
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| | | One of a kind | | SDPL recently raised MYR3.2b (or ~10% of current market cap) by merely monetizing 4,322ha of land in Malaysia. The market has under-appreciated the significant value of SDPL's 208,098ha of freehold land which, by our estimate, is larger than its existing market cap. In essence, investors are getting the rest of its assets for free. We estimate its RNAV at MYR9.45/sh. SDPL is a BUY with MYR5.63 TP, pegged to 30x FY18 PER, implying a P/RNAV of 0.6x. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 11,946.5 | 14,779.4 | 16,357.1 | 17,456.2 | EBITDA | 2,176.9 | 3,423.8 | 3,385.5 | 3,499.8 | Core net profit | 772.8 | 1,128.7 | 1,275.7 | 1,299.1 | Core EPS (sen) | 11.4 | 16.6 | 18.8 | 19.1 | Core EPS growth (%) | 14.4 | 46.1 | 13.0 | 1.8 | Net DPS (sen) | 10.3 | 13.2 | 9.4 | 9.6 | Core P/E (x) | 42.9 | 29.3 | 26.0 | 25.5 | P/BV (x) | 3.5 | 2.7 | 2.3 | 2.2 | Net dividend yield (%) | 2.1 | 2.7 | 1.9 | 2.0 | ROAE (%) | 10.5 | 31.8 | 14.6 | 8.9 | ROAA (%) | 2.8 | 3.9 | 4.3 | 4.3 | EV/EBITDA (x) | na | na | 12.1 | 11.6 | Net debt/equity (%) | 132.4 | 57.3 | 43.4 | 40.6 |
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| | | | | | | | | | | | | | Share Price: | MYR6.69 | Target Price: | MYR6.90 | Recommendation: | Hold | | |
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| | | A 2018 story | | Our expectation of substantial cost savings from transportation and lower exceptional cost did not come through in 3Q17. We think earnings may remain subdued in 4Q17 given the seasonally softer volume and the high cost base. We raise FY17E net loss and cut FY18-19E EPS by 9%-13%. That said, we remain hopeful of a recovery in 2018 on infrastructure-led demand growth. TP is unchanged at MYR6.90 (1.9x P/B, -1SD). | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 2,750.8 | 2,552.2 | 2,286.1 | 2,615.9 | EBITDA | 511.6 | 302.1 | 4.7 | 376.3 | Core net profit | 252.3 | 84.9 | (197.4) | 96.7 | Core EPS (sen) | 29.7 | 10.0 | (23.2) | 11.4 | Core EPS growth (%) | (1.4) | (66.3) | nm | nm | Net DPS (sen) | 31.0 | 5.0 | 0.0 | 10.2 | Core P/E (x) | 22.5 | 66.9 | nm | 58.8 | P/BV (x) | 1.8 | 1.9 | 2.0 | 2.0 | Net dividend yield (%) | 4.6 | 0.7 | 0.0 | 1.5 | ROAE (%) | 8.1 | 2.5 | (6.7) | 3.4 | ROAA (%) | 6.0 | 2.0 | (4.8) | 2.4 | EV/EBITDA (x) | 14.8 | 20.7 | nm | 15.7 | Net debt/equity (%) | 1.0 | 4.6 | 9.7 | 7.3 |
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| | | | | | | | | | | | | | Share Price: | MYR2.80 | Target Price: | MYR2.55 | Recommendation: | Hold | | |
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| | | Has seen better days | | 3QFY1/18 and 9MFY1/18 earnings fell short. Worryingly, the pace of TV subscription revenue easing YoY is accelerating. FY19 will also be a high content cost year due to the FIFA World Cup. We cut our earnings estimates by 12-28%. Rolling forward our valuation base year to end-FY19E from FY18E, our DCF-based TP is lowered to MYR2.55 from MYR2.72. Note that ASTRO will also invest MYR100m (MYR0.19/shr) into a 51%-owned JV with Karangkraf. | | |
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| | FYE Jan (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 5,475.4 | 5,612.6 | 5,619.8 | 5,534.3 | EBITDA | 1,940.6 | 1,816.5 | 1,914.1 | 1,710.3 | Core net profit | 662.0 | 663.4 | 777.5 | 655.8 | Core FDEPS (sen) | 12.7 | 12.7 | 14.9 | 12.5 | Core FDEPS growth(%) | 27.3 | 0.2 | 16.9 | (15.7) | Net DPS (sen) | 12.0 | 12.5 | 12.5 | 10.5 | Core FD P/E (x) | 22.1 | 22.0 | 18.8 | 22.3 | P/BV (x) | 24.3 | 23.4 | 19.5 | 17.0 | Net dividend yield (%) | 4.3 | 4.5 | 4.5 | 3.8 | ROAE (%) | 95.1 | 101.9 | 113.2 | 81.7 | ROAA (%) | 9.7 | 10.1 | 11.7 | 9.5 | EV/EBITDA (x) | 9.1 | 9.5 | 9.6 | 10.6 | Net debt/equity (%) | 516.4 | 481.0 | 507.3 | 423.4 |
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| | | | | | MACRO RESEARCH | | | | | | | Trade growth stays firm
by Suhaimi Ilias |
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| | | | | | Export and import growth quickened in Oct 2017 to +18.9% YoY (Sep 2017: +14.8% YoY) and +20.9% YoY (Sep 2017: +15.2% YoY). Trade surplus widened to +MYR10.6b (Sep 2017: +MYR8.6b). Maintain our full-year forecasts on export growth (2018E: +5.9%; 2017E: +19.6%; 2017YTD: +21.1%), import growth (2018E: +5.8%; 2017E: +20.6%; 2017YTD: +21.9%) and trade surplus (2018E: +MYR103.7b; 2017E: +MYR97.3b; 2017YTD: +MYR80.2b). | |
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| | | | | | | | Brent Crude Oil – Potential Correction Ahead
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI fell 6.51pts to 1,718.33 yesterday, led by declines in HLBK, HLFG and IJM. Market sentiment was weak amid regional selloff, with losers outpacing gainers by 454 to 380. A total of 1.58b shares worth MYR2.25b changed hands. Market could extend losses today; weigh by external uncertainties and a fall in oil price. Technically, if it fails to hold on above its previous low of 1,709, expect the bear to dominate in the near-term. | |
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| | NEWS | | | Outside Malaysia:
Germany: Factory orders unexpectedly rose for a third month in October, in a sign that Europe's largest economy will carry its strong momentum into 2018. Orders, adjusted for seasonal swings and inflation, increased 0.5% after an upwardly revised gain of 1.2% in September, data from the Economy Ministry showed. Demand was up 6.9% from the previous year. German companies are tapping into improving global trade --underpinned in part by the fastest euro-area expansion in a decade -- while also benefiting from domestic consumption and investment. (Source: Bloomberg)
U.K: Takes steps to improve productivity in infrastructure drive. Britain announced plans to generate savings of as much as GBP15b (USD20b) a year by improving productivity in sectors such as construction and transport. New programs to increase efficiency were published alongside the government's GBP 600b infrastructure pipeline, which sets out a series of publicly and privately funded projects over the next 10 years, the Treasury said in a statement. By increasing funding in technology and skills, the government hopes to make sure large-scale infrastructure projects such as building hospitals or road networks can be completed on time and within budget. (Source: Bloomberg)
India: Holds rates as inflation nears Central Bank's target. India's central bank kept interest rates unchanged as rebounding inflation limits room to spur an economy struggling to recover from disruptive government policies. The benchmark repurchase rate was left at 6%, the Reserve Bank of India said in a statement. Five of the six-member monetary policy committee voted for the move. (Source: Bloomberg)
Brazil: Cuts key rate to record low as easing cycle nears end. Brazil cut its key rate by 50 basis points, bringing benchmark borrowing costs in Latin America's largest nation to a record low, and signalled a slower pace of easing at its next meeting. Led by president Ilan Goldfajn, the bank's board lowered the Selic rate to 7%, following a previous 75 basis-point reduction in October. The move was the 10th consecutive rate cut in a cycle that's slashed the benchmark rate by 725 basis points since Oct. 2016. (Source: Bloomberg)
Australia: Economy grew slower than forecast as household spending rose at the weakest pace since the 2008 financial crisis, reinforcing the likelihood of the central bank keeping interest rates on hold for longer. GDP rose 0.6% in third quarter from previous three months and climbed 2.8% YoY. Household spending rose 0.1% -- the weakest gain since the fourth quarter of 2008. Household savings ratio was 3.2%, up from revised 3% in prior three months. (Source: Bloomberg) | |
| | | | | Other News:
Insurance: Insurance agency Fatberry.com targets two million users in first year. Fatberry.com the first insurance agency retail portal in Malaysia, announced it has partners with Tune Protect Group and targets to reach two million users in the first year of its operation. Launched yesterday, the company behind the digital insurance marketplace is Fatberry S/B, an insurtech start-up that encourages and helps users find and buy the best-fit insurance online through a fast and intuitive chabot-like interface. This interface provides consumers with choices of personalised insurance suitable for their needs within two minutes. Consumers can subsequently select the insurance products of their choice to complete their purchases online with various integrated payment options. (Source: The Edge Financial Daily)
Halex Holdings: To buy competitor Hextar Chemicals for MYR550m. Halex plans to buy Hextar Chemicals Ltd at an indicative price of MYR550m in a bid to eliminate business competition. The related party acquisition will also allow the group to expand its agrochemical business by tapping into Halex Chemicals' customer and supplier network in more than 30 countries worldwide. Hextar Chemicals is owned by Hextar Holdings S/B, whose major shareholders Datuk Ong Soon Ho and Datuk Ong Choo Meng are the directors of Halex. (Source: The Edge Financial Daily)
Nexgram: Aborts joint plan to develop AIC. Nexgram Holdings has aborted its plan to jointly-develop the Angkasa Icon City (AIC) mixed commercial project in Cyberjaya, Selangor with Seychelles-incorporated China Asian Capital Holding Ltd (CACH). In a filing with Bursa Malaysia yesterday, Nexgram wholly-owned subsidiary Nexgram Land S/B and CACH have agreed to discontinue the joint development agreement (JDA) signed and executed on May 19 which had lapsed on Aug 18. (Source: The Edge Financial Daily)
Ranhill: Unit's to raise up to MYR650m via sukuk. Ranhill Holdings' wholly-owned subsidiary, SAJ Capital S/B, has applied to issue sukuk with up to MYR650m in nominal value, which the water supply services provider will be guaranteeing. SAJ Capital yesterday made a lodgement with the Securities Commission Malaysia for the issuance of the sukuk, which will have a tenure of up to 12 years. The proceeds from the sukuk will be used by the issuer partly to finance the redemption of Ranhill Capital S/B's outstanding MYR800m Islamic medium-term notes. It will also be used for the general corporate purposes of Ranhill and its group of companies, which include capex, working expenditure, and general funding requirements. Additionally, the proceeds will go towards financing additional payments arising from the redemption of existing securities, financing the service reserve account, and paying fees and expenses related to the sukuk. (Source: The Edge Financial Daily) | |
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