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| | | | | | | | | | | | | | Share Price: | MYR3.69 | Target Price: | MYR4.15 | Recommendation: | Buy | | |
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| | | Power up! Initiate BUY | | We like MFCB for its: i) potential returns from Don Sahong hydropower project in Laos; and ii) strong growth prospect from its Resources segment. Also, its net cash position as of end-2016 reinforces its balance sheet strength to take on the construction cost of Don Sahong. We value MFCB using the SOP method to derive our TP of MYR4.15 (+12%) with Don Sahong and its Resources segment making up the majority of its value. Initiate at BUY. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 588.7 | 915.5 | 1,125.6 | 767.9 | EBITDA | 189.8 | 258.2 | 259.8 | 283.2 | Core net profit | 47.0 | 121.5 | 140.9 | 120.0 | Core EPS (sen) | 18.5 | 35.1 | 36.9 | 31.4 | Core EPS growth (%) | (36.3) | 90.1 | 5.0 | (14.8) | Net DPS (sen) | 7.6 | 5.0 | 2.0 | 2.0 | Core P/E (x) | 20.0 | 10.5 | 10.0 | 11.7 | P/BV (x) | 1.2 | 1.2 | 1.2 | 1.1 | Net dividend yield (%) | 2.1 | 1.4 | 0.5 | 0.5 | ROAE (%) | na | na | na | na | ROAA (%) | 4.1 | 8.7 | 7.1 | 4.8 | EV/EBITDA (x) | 3.4 | 2.7 | 7.0 | 7.9 | Net debt/equity (%) | net cash | net cash | 14.6 | 37.0 |
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| | | | | | | | | | | | Share Price: | MYR0.70 | Target Price: | MYR1.20 | Recommendation: | Buy | | |
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| | | A MYR905m start to the year | | SAPE's MYR905m job wins offer up to 4.5 years of earnings visibility. That the improving replenishment on the back of firmer oil prices denotes higher activity, is a positive. Monetising its gas fields beyond SK310 B15 is a re-rating catalyst, which would unlock values and improve earnings/ valuations. Overall, we see SAPE as a direct proxy, beta play to a rising oil price outlook. Our SOP-based TP offers a 70% upside. | | |
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| | FYE Jan (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 10,184.0 | 7,651.3 | 5,917.6 | 6,202.1 | EBITDA | 3,056.4 | 3,913.3 | 2,162.4 | 2,118.4 | Core net profit | 1,009.4 | 447.3 | (400.3) | (374.8) | Core EPS (sen) | 16.9 | 7.5 | (6.7) | (6.3) | Core EPS growth (%) | (16.8) | (55.5) | nm | nm | Net DPS (sen) | 1.4 | 1.0 | 1.0 | 3.0 | Core P/E (x) | 4.2 | 9.4 | nm | nm | P/BV (x) | 0.3 | 0.3 | 0.3 | 0.3 | Net dividend yield (%) | 1.9 | 1.4 | 1.4 | 4.3 | ROAE (%) | (6.5) | 1.6 | (4.1) | (3.1) | ROAA (%) | 2.8 | 1.2 | (1.1) | (1.1) | EV/EBITDA (x) | 9.0 | 6.5 | 9.1 | 9.2 | Net debt/equity (%) | 134.1 | 115.7 | 123.7 | 127.6 |
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| | | | | | | | | | | | Share Price: | MYR10.88 | Target Price: | MYR10.60 | Recommendation: | Hold | | |
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| | | 4Q17: All in-line | | Bursa's FY17 net profit and dividend were in-line. Our FY18/19 net profit forecasts are marginally tweaked post results housekeeping; we also introduce FY20 forecast. Management expects the equity market to remain resilient and the new stamp duty exemption for exchange-traded funds and structured warrants to enhance trading and vibrancy. Our TP is raised to MYR10.60 (+30sen) as we roll forward valuation to 2018, while continuing to peg on a 25x PER, in-line with the average of peers. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 506.8 | 556.8 | 572.0 | 589.7 | EBITDA | 294.8 | 330.2 | 336.3 | 344.6 | Core net profit | 193.6 | 223.0 | 227.5 | 233.2 | Core EPS (sen) | 36.2 | 41.5 | 42.3 | 43.4 | Core EPS growth (%) | (2.8) | 14.8 | 1.9 | 2.5 | Net DPS (sen) | 34.0 | 53.5 | 40.5 | 42.5 | Core P/E (x) | 30.1 | 26.2 | 25.7 | 25.1 | P/BV (x) | 6.7 | 6.9 | 6.8 | 6.8 | Net dividend yield (%) | 3.1 | 4.9 | 3.7 | 3.9 | ROAE (%) | 23.2 | 26.0 | 26.6 | 27.0 | ROAA (%) | 8.6 | 9.6 | 10.1 | 10.0 | EV/EBITDA (x) | 15.1 | 15.7 | 16.6 | 16.1 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | MACRO RESEARCH | | | | | | FBMKLCI: Assessing Downside Risk
by Nik Ihsan Raja Abdullah |
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| | | | | | Dark cloud loomed over the local bourses as sentiment was hurt by the selloff on Wall Street last Friday. At day's end, the FBMKLCI plunged 17.41pts to 1,853.07, but off its intraday low of 1,842.06. Decliners were led by MISC, RHBBANK and AMM. Market breadth was bearish with losers outpacing gainers by 966 to 167. A total of 2.65b shares worth MYR2.85b changed hands. Expect another bloodbath today following the steep correction in Wall Street overnight. | |
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| NEWS | | | Outside Malaysia:
U.S: Service industries expand by most in at least 10 years. America's service industries expanded in January at the fastest pace in at least a decade as a surge in orders led to a pickup in hiring, figures from the Institute for Supply Management showed. Non-factory index jumped to 59.9 (est. 56.7), exceeding all forecasts in a Bloomberg survey, from 56; readings above 50 indicate expansion. Employment gauge rose to 61.6, the strongest in records to July 1997, from 56.3. Measure of new orders surged to a seven-year high of 62.7 last month from 54.5. (Source: Bloomberg)
E.U: Euro-Area companies boost jobs as output nears 12-year high. Economic momentum in the euro area surged to the fastest pace in almost 12 years, pushing firms to pile on the most additional workers since the start of the millennium. A composite Purchasing Managers' Index rose to 58.8 in January from 58.1 in December, IHS Markit said. That unexpectedly beat the previous flash estimate of 58.6, with the revision driven mainly by better-than-expected momentum in the service sector, led by Germany. The region's expansion has been underpinned by a pickup in global trade, steadily declining unemployment, and ultra-low borrowing costs from the European Central Bank. As companies continue to accumulate orders that push them to the limits of their capacity, IHS Markit says the rapid pace of job creation - - the fastest since late 2000 -- is likely to help growth become less dependent on monetary support. (Source: Bloomberg)
Indonesia: Economy grew slightly better than expected last quarter, supported by a pick-up in exports while consumer spending continued to disappoint. GDP rose 5.2% YoY in the fourth quarter. GDP fell 1.7% from the previous quarter, matching the median estimate. For the full year, GDP rose 5.1% in 2017. Despite an aggressive run of monetary policy easing, consumer spending growth was little changed at about 5% last quarter. And while the economy's expansion was the fastest since 2016, risks are rising, including higher interest rates in the U.S., which could worsen financial market volatility. (Source: Bloomberg) | |
| | | | | Other News:
Vivocom: Unit bags MYR27.57m aluminium and glazing works contract in Melaka. The group has secured a MYR27.57m contract from China Construction Third Engineering Group (M) S/B for aluminium and glazing works in Melaka. The group, which specialises in building telecommunication towers, said its subsidiary Neata Aluminium (M) S/B had accepted the letter of award from China Construction. The project will be completed by September 2019. (Source: The Edge Financial Daily)
Serba Dinamik: To buy 40% stake in Maju Holdings' hydro power firms for MYR25m. The group is acquiring a 40% stake in Maju Renewable Energy S/B, Maju RE (Talang) S/B and Maju RE (Temenggor) S/B from Maju HoldingsS/B (Maju)— controlled by businessman Tan Sri Abu Sahid Mohamed — for a combined MYR24.85m. Serba said its wholly-owned subsidiary Serba Dinamik Group Bhd has entered into a memorandum of agreement with Maju, which currently owns 70% of the shares in each of the target companies, for the stake buy. The remaining 30% in the three target companies are held by Perak Hydro Renewable Energy Corp S/B. (Source: The Edge Financial Daily)
DBE Gurney Resources: Proposes property diversification. The group has proposed to diversify into property development and construction via a joint development with Misi Jutari S/B for a mixed development project in Perak. The project, developed on a 3.68-hectare land in Bota Kanan in Perak, comprises 95 units of semi-detached and terrace houses and 19 units of shop houses. DBE said the move was for the group to diversify into other industries with strong growth prospects, instead of relying solely on its core business which is primarily in the operation of poultry breeding farms and trading of related products. (Source: The Edge Financial Daily)
Daibochi: Declares dividend after reporting FY17 profit growth. Daibochi declared a dividend of 1.3 sen a share after the company reported higher fourth quarter and full-year net profit for financial year ended Dec 31, 2017 (FY17), from a year earlier. Daibochi declared its latest dividend after the company said 4QFY17 net profit rose to MYR7.93m, from MYR5.93m. Revenue grew to MYR105.66m, from MYR90.36m, Daibochi said. (Source: The Edge Financial Daily) | |
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