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| | | | | | | | | | | | | | Share Price: | MYR2.80 | Target Price: | MYR3.00 | Recommendation: | Hold | | |
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| | | Deviating from norm | | The recent declaration of a 5sen final DPS for 2017 meant GMB deviated from its 100% DPR practice for the first time since listing. We see this as an attempt to keep dividends stable given potential earnings decline in 2018. Maintain HOLD with an unchanged MYR3.00 TP. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 4,053.0 | 5,348.8 | 6,042.3 | 6,649.6 | EBITDA | 264.6 | 301.7 | 293.2 | 303.0 | Core net profit | 165.1 | 194.6 | 173.2 | 184.1 | Core EPS (sen) | 12.9 | 15.2 | 13.5 | 14.3 | Core EPS growth (%) | 55.6 | 17.9 | (11.0) | 6.3 | Net DPS (sen) | 12.9 | 13.0 | 13.5 | 14.3 | Core P/E (x) | 21.8 | 18.5 | 20.8 | 19.5 | P/BV (x) | 3.5 | 3.4 | 3.4 | 3.4 | Net dividend yield (%) | 4.6 | 4.6 | 4.8 | 5.1 | ROAE (%) | 16.6 | 18.8 | 16.5 | 17.5 | ROAA (%) | 7.7 | 8.5 | 7.1 | 7.0 | EV/EBITDA (x) | 10.2 | 12.3 | 11.6 | 11.0 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | MACRO RESEARCH | | | | | | Sustained consumer spending growth
by Suhaimi Ilias |
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| | | | | | Retail trade index growth remained above-8% for the fifth month in a row at +8.1% YoY in Feb 2018: +8.1% YoY (Jan 2018: +8.5% YoY). It grew +8.3% YoY in Jan-Feb 2018 (4Q 2017: +8.3% YoY) signaling steady consumer spending growth momentum in early-2018, which is now expected to be sustained until 3Q 2018 thanks to the election-related increases in civil service pay and cash handout programme (BR1M). | |
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| | | | | | COMEX Gold: Consolidation Set to Continue in the Near Term
by Nik Ihsan Raja Abdullah |
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| | | | | | Late buying support lifted FBMKLCI 3.73pts higher yesterday. At day's end, the benchmark rose 0.2% to 1,873.62. Market reversed earlier losses thanks to gains in ASTRO, YTL and KLK. Market breadth, however, turned negative with losers outpacing gainers by 579 by 343. A total of 3.26b shares worth MYR2.33b changed hands. | |
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| NEWS | | | Outside Malaysia:
U.S: Fed sees GDP hit from trade war outweighing fleeting inflation. A trade war would leave the U.S. Federal Reserve having to decide between battling weaker economic growth or rising prices. Which one it focuses on already looks pretty clear. President Donald Trump's administration has proposed tariffs on imported steel and aluminum, from which a number of U.S. allies would be exempt, and has threatened to slap additional measures on as much as USD150b of Chinese goods. Higher and broader tariffs would raise the prices of those imports, potentially fanning U.S. inflation, while reducing economic activity by sapping confidence and tightening financial conditions. Minutes of the U.S. central bank's March 20-21 policy meeting, published, showed "a strong majority of participants viewed the prospect of retaliatory trade actions by other countries, as well as other issues and uncertainties associated with trade policies, as downside risks for the U.S. economy." (Source: Bloomberg)
U.S: Trump weighs rejoining TPP as he tones down China trade threat. President Donald Trump told lawmakers he is considering rejoining the Trans-Pacific Partnership, the free- trade deal he withdrew from shortly after taking office, as he expressed confidence the U.S. is headed toward resolving trade conflicts without economic disruption. A week after escalating tensions with his threat to impose tariffs on an additional USD100b in Chinese products, Trump said the two countries ultimately may end up levying no new tariffs on each other. "Now we're really negotiating and I think they're going to treat us really fairly," Trump said during a White House meeting with Republican governors and lawmakers from farm states. "I think they want to." (Source: Bloomberg)
U.K: Property market is wilting from lack of demand, leaving home prices unchanged for a second month in March. The Royal Institution of Chartered Surveyors said its gauge of prices remained at zero, with declines in London and the southeast being offset by gains in the East Midlands, Northern Ireland and Wales. Years of rampant price gains have stretched affordability in London, where demand from buyers continued to fall in March. Property in the capital has also been roiled by tax changes and the country's decision to leave the European Union, and estate agents reported an increase in the number of homes being withdrawn from sale. (Source: Bloomberg)
S. Korea: The Bank of Korea left its key interest rate unchanged, as inflation is expected to remain below its target for the time being and trade tensions are clouding the outlook. The economy remains on track to grow 3% this year but inflation is projected to register 1.6%, slightly below the central bank's previous forecast, Governor Lee Ju-yeol said during a news conference. The decision to keep the seven-day repurchase rate at 1.5% was widely expected, and the small inflation downgrade - from 1.7% - did little to alter expectations for further rate increases during the second half of the year. (Source: Bloomberg)
Singapore: Central Bank tightens policy amid solid growth outlook. Singapore's central bank tightened monetary policy, changing its stance for the first time in two years amid solid economic growth prospects for 2018. The Monetary Authority of Singapore, which uses the exchange rate as its main tool, increased the slope of the currency band slightly from zero percent, it said in a statement on its website. The majority of economists in a Bloomberg survey predicted a steeper slope, signaling the MAS would seek an appreciation in the Singapore dollar. In a separate report, the trade ministry said preliminary data showed gross domestic product grew 4.3% YoY in the first quarter. (Source: Bloomberg) | |
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Kerjaya Prospek: Bags contract worth MYR357.3m for BBCC project. The group has secured a contract worth MYR357.3m for main building works at the Bukit Bintang City Centre mixed development. The deal involves the construction of a block of eight-storey car park podium, a six-storey car park, and two towers (one 35 storeys and one 47 storeys), comprising a total of 666 service apartment units. (Source: The Edge Financial Daily)
HSS Engineers: Unit appointed independent consultant engineer for MRT 3 with MYR289.89m contract. Its unit has been appointed as the independent consultant engineer for the Line 3 of the Mass Rapid Transit project (MRT 3) with a contract value of MYR289.89m. The contract commenced on March 6 and is expected to be completed in 2026. (Source: The Sun Daily)
Destini: Bags two-year umbrella contract from Petronas Carigali. The group has been awarded a two-year umbrella contract to undertake well abandonment integrated services for Petronas Carigali S/B, which will start from March 29 this year till March 28, 2020 with a one-year optional extension. (Source: The Edge Financial Daily) | |
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