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| | | | | | | | | | | | | | Share Price: | MYR6.10 | Target Price: | MYR7.00 | Recommendation: | Buy | | |
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| | | Cooling Down on Fortis Bid | | IHH confirmed that on 11 Apr 2018 it issued a non-binding letter to the Board of Fortis (FORH IN; Not-rated) with its interest to participate in Fortis (basically, a bid). However, Fortis indicated that it has already entered into binding agreements with Manipal Health Enterprises, Manipal Global Health Services and TPG Asia. With IHH's bid apparently only 3.2% higher, we see a risk of overpaying if it chooses to meaningfully raise, not to mention the short-term operational risks at Fortis. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 10,021.9 | 11,142.7 | 12,995.4 | 15,179.6 | EBITDA | 2,188.9 | 2,783.0 | 2,641.2 | 3,058.2 | Core net profit | 866.0 | 595.4 | 913.3 | 1,127.0 | Core FDEPS (sen) | 10.5 | 7.2 | 11.1 | 13.6 | Core FDEPS growth(%) | (4.0) | (31.3) | 53.4 | 23.4 | Net DPS (sen) | 3.0 | 3.0 | 3.0 | 3.0 | Core FD P/E (x) | 58.1 | 84.6 | 55.2 | 44.7 | P/BV (x) | 2.3 | 2.3 | 2.2 | 2.1 | Net dividend yield (%) | 0.5 | 0.5 | 0.5 | 0.5 | ROAE (%) | 2.8 | 4.4 | 4.1 | 4.9 | ROAA (%) | 2.4 | 1.6 | 2.3 | 2.8 | EV/EBITDA (x) | 27.0 | 18.3 | 20.0 | 17.0 | Net debt/equity (%) | 21.1 | 2.8 | 3.4 | net cash |
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| | | | | | | | | | | | Share Price: | MYR1.51 | Target Price: | MYR1.75 | Recommendation: | Buy | | |
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| | | Lights, camera, action | | We took YTB on a non-deal roadshow to Hong Kong and had meetings with ten mostly blue chip long-only funds. At the same time, we gleamed a few updates. Encore Melaka is on budget and scheduled to premiere in late May 2018. YTB may employ 50% DPR in FY6/19 and we estimate it may offer an attractive 5.5% dividend yield then. It may also receive a huge boost in being recognised as a Belt & Road cultural project soon. Our earnings estimates, BUY call and MYR1.75 TP are unchanged for now. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 17.9 | 85.4 | 298.5 | 663.3 | EBITDA | 2.1 | 18.6 | 64.8 | 182.4 | Core net profit | 0.9 | 13.7 | 39.8 | 120.1 | Core FDEPS (sen) | 0.5 | 3.2 | 5.4 | 16.4 | Core FDEPS growth(%) | (83.2) | 492.7 | 70.4 | 201.4 | Net DPS (sen) | 0.0 | 0.0 | 0.0 | 0.0 | Core FD P/E (x) | nm | 47.4 | 27.8 | 9.2 | P/BV (x) | 2.8 | 1.4 | 1.3 | 1.0 | Net dividend yield (%) | 0.0 | 0.0 | 0.0 | 0.0 | ROAE (%) | 1.0 | 6.9 | 11.1 | 25.7 | ROAA (%) | 0.7 | 3.9 | 5.3 | 11.2 | EV/EBITDA (x) | 72.4 | 29.8 | 14.9 | 4.9 | Net debt/equity (%) | net cash | net cash | 11.2 | net cash |
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| | MACRO RESEARCH | | | | | | Slower remittances growth
by Suhaimi Ilias |
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| | | | | | Overseas Filipino Workers' Remittances (OFWR) saw the growth rate halve its pace in Feb 2018 to +4.5% YoY (Jan 2018: +9.7% YoY) while expanding by +7.1% YoY in Jan-Feb 2018 (Jan-Feb 2017: +5.9% YoY). Maintain our 4%-5% OFWR full-year growth forecast. | |
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| | | | | | FBMKLCI Index: Fourth Time's a Charm?
by Nik Ihsan Raja Abdullah |
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| | | | | | Late buying support lifted FBMKLCI 10.29pts higher yesterday. At day's end, the benchmark index rose 0.55% to 1,878.76, led by gains in GENM, TM, and PETD. Broader market, however, remained in a negative mood, with losers outpacing gainers by 518 to 409. A total of 2.67b shares worth MYR2.06b changed hands. Market will likely take cue from Wall Street's gain but sentiment will remain cautious ahead of China's GDP report. | |
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| NEWS | | | Outside Malaysia:
U.S: March retail sales rebound in sign consumer weakness fading, suggesting consumer demand regained steam on the back of tax cuts and refunds. Receipts advanced 0.6% following a 0.1% drop in the previous month, according to Commerce Department figures. So-called retail control- group sales, which are used to calculate gross domestic product and exclude food services, auto dealers, building-materials stores and gasoline stations, gained 0.4%, matching estimates. (Source: Bloomberg)
U.S: China boosts its U.S. treasuries holdings by most in six months, underscoring the attractiveness of U.S. assets even amid trade tensions between the world's two largest economies. China's ownership of U.S. bonds, bills and notes increased by USD8.5b to USD1.18tr in February, according to data released by the U.S. Treasury department. China remained the largest foreign creditor to the U.S., followed by Japan whose holdings dropped to USD1.06tr, from USD1.07tr in January. Speculation is growing about whether China could use its vast Treasury holdings as a bargaining chip in a trade dispute with the U.S. While Chinese ambassador to the U.S. Cui Tiankai didn't rule out the possibility of the Asian nation scaling back Treasury purchases in response to tariffs proposed by the Trump administration in March, some observers have said a wide-scale sell-off is unlikely given that China has few alternatives to invest in. (Source: Bloomberg)
U.S: Homebuilder sentiment declined in April for a fourth month, reflecting higher lumber prices and limited land availability, according to data from the National Association of Home Builders/Wells Fargo. Housing Market Index eased by 1 point to a five-month low of 69. Current-sales measure for single-family homes dropped to 75, the lowest since October, from 77; gauge of prospective buyer traffic held at 51. Gauge of six-month sales outlook cooled to 77 from 78. (Source: Bloomberg)
U.K: Households continue to curb their spending, leading to the worst quarter for consumers in over five years, according to a report from Visa. Spending dropped by 2.1% in March following a 1% annual decline in February. Spending in stores and online both declined compared to a year ago, with transport and communication the weakest sectors. The figures show a continuing deterioration of one of the biggest parts of the U.K. economy. Britons have been struggling to maintain borrowing and consumption, with inflation accelerating in the wake of the U.K.'s 2016 vote to leave the European Union. (Source: Bloomberg)
China: IMF says complex fiscal system needs 'crucial' overhaul. China's sprawling local government financing system needs "crucial" reforms to increase consumption, build prosperity and encourage economic rebalancing, the International Monetary Fund said. Among the IMF's recommendations is to fund local governments by imposing recurring property taxes and adding local surcharges to national individual income taxes. China's fiscal system is the world's most decentralized, with local bodies responsible for 85% of government spending, the fund said in a report, citing the breadth across 31 provincial level governments, 334 prefectures, 2,850 counties, 40,000 townships and 900,000 informal village jurisdictions. Including off-budget spending by local government financing vehicles brings the ratio up to 89 percent of all public expenditures. Such a complex network must be overhauled to better deliver services, increase social spending and reduce regional disparities, Philippe Wingender, an economist in the tax policy division of the fiscal affairs department, said in a paper released. (Source: Bloomberg) | |
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Kelington : Bags MYR77.5m worth of new contracts in 1Q. The group has secured new orders worth MYR77.5m in the first quarter of 2018 (1Q18), bringing the group's total outstanding orderbook to MYR267.3m. Kelington chief executive officer Raymond Gan said the group is also bidding for new projects worth MYR500m across its key operating markets. Kelington said the bulk, or 85%, of the new orders came from the ultra high purity segment, for the company to provide specialised engineering services for the semiconductor and electronic manufacturing companies. (Source: The Edge Financial Daily)
Bina Darulaman: Signs up nine retailers as tenants at its Axis Commercial Hub development in Kedah. The group has signed up nine retailers to be tenants at its Axis Neighbourhood Retail Centre within the upcoming Axis Commercial Hub development located in Bandar Darulaman, Jitra, Kedah. They are operators or proprietors of business brands Petron petrol station, Coffee Books & Rain Café, Kopi & Roti, Wash Studio Laundry, Raja's Grocery, The Little Caliphs, Genius Aulad, Big Galley's Café and WellBeing Pharmacy respectively. (Source: the Edge Financial Daily)
NWP: Aborts deal for stake in aviation player. The group has terminated an agreement to buy a 30% stake in US-incorporated Aviation AI Inc. NWP said it had decided to terminate the deal which would have been undertaken by its wholly-owned subsidiary NWP Builder S/B. Back in Oct 14, 2016, NWP proposed to buy a stake in AAI to venture into the private charter air transport services business, with the intention of increasing its income. (Source: the Edge Financial Daily) | |
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