STOCK FOCUS OF THE DAY
Sasbadi Holdings: Flat book sales from last year HOLD
We maintain a HOLD and FV of RM0.90/share on Sasbadi Holdings based on a PE of 22x — on par with its two-year average historical forward PE. Sasbadi’s net profit of RM4.4mil in its 1QFY18 ended Nov 2017 was in line with our projection as it met 26% of our FY forecast and 20% of consensus. The group recovered from a loss in the previous quarter, and earnings grew by a decent 3% on a YoY basis.
The group said it is cognizant that retail market conditions could remain weak this year and it is more aggressively developing non-core units and market segments. Management had previously emphasized it is shifting to collaborations from its previous focus of M&A in a bid to save costs and leverage on its publishing expertise.
We are positive on its proactive stance to find new revenue streams and bring down its fixed costs. However, we emphasize that these new ventures will still carry inherent risk and would take time before they become a formidable component of the group’s earnings.
QUICK TAKE
CIMB Group: CIMB Thai returns to black with lower provisions BUY
STOCKS ON RADAR
Tong Herr Rersources, Hiap Teck Venture, Inari Amertron, Mitrajaya Holdings
ECONOMIC HIGHLIGHTS
China: Moderate GDP outlook
NEWS HIGHLIGHTS
Investment: EPF, PNB want to buy Battersea Phase 2 assets for RM8.8b
Investment: Khazanah assets at all-time high, investments hits RM115.6bil
Parlo: Shares jump 80% on first day of trading
CCM: To boost chlor-alkali output at Pasir Gudang plant
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The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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