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| | | | | | | | | | | | | | Share Price: | MYR1.54 | Target Price: | MYR1.44 | Recommendation: | Hold | | |
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| | | Stepping up | | Mynews' planned ready-to-eat (RTE) facility will now be located at its newly acquired site in Kota Damansara as opposed to previous plans of building one from ground up at Rawang. Target operational date remains to be end-CY18. We believe that the stock is fairly valued now with its near-term earnings potential largely priced in. Our earnings forecasts, HOLD call and TP of MYR1.44 (27.6x PER CY19; peer average) are maintained. | | |
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| | FYE Oct (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 264.0 | 327.6 | 394.9 | 460.5 | EBITDA | 27.1 | 35.0 | 38.0 | 56.0 | Core net profit | 19.3 | 24.0 | 28.8 | 34.4 | Core EPS (sen) | 2.8 | 3.5 | 4.2 | 5.0 | Core EPS growth (%) | 42.6 | 24.6 | 19.7 | 19.7 | Net DPS (sen) | 0.7 | 0.9 | 1.1 | 1.3 | Core P/E (x) | 54.5 | 43.7 | 36.5 | 30.5 | P/BV (x) | 6.9 | 4.3 | 4.0 | 3.6 | Net dividend yield (%) | 0.4 | 0.6 | 0.7 | 0.8 | ROAE (%) | 17.4 | 12.2 | 11.4 | 12.5 | ROAA (%) | 12.7 | 9.7 | 9.4 | 10.3 | EV/EBITDA (x) | 19.2 | 20.1 | 26.6 | 18.0 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | MACRO RESEARCH | | | | | | Inflation rate stayed sub-2%
by Suhaimi Ilias |
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| | | | | | Inflation rate in Mar 2018 eased further to +1.3% YoY (Feb 2018: +1.4% YoY) on slower rise in food prices and bigger decline in transport costs. Core inflation rate also slowed to +1.7% YoY (Feb 2018: +1.8% YoY). Revised our 2018 headline inflation rate forecast to +2.3% from +2.8% (1Q 2018: +1.8% YoY; 2017: +3.7%) and expect BNM to keep OPR at 3.25% for the rest of this year after the +25bps hike on 25 Jan 2018. | |
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| | | | | | KLTEC Index: Correction Is Not Over Yet
by Nik Ihsan Raja Abdullah |
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| | | | | | Late buying support on selected blue chips helped narrow losses. At day's end, FBMKLCI eased 1.73pts to 1,879.32. Decliners were led by TM, DIGI and AMMB. Market breadth was negative with losers outpacing gainers by 617 to 285. A total of 2.36b shares worth MYR1.97b changed hands. | |
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| NEWS | | | Outside Malaysia:
Global: World debt load has ballooned to a record USD164t, a trend that could make it harder for countries to respond to the next recession and pay off debts if financing conditions tighten, the International Monetary Fund said. Global public and private debt swelled to 225% of global GDP in 2016, the last year for which the IMF provided figures, the fund said in its semi-annual Fiscal Monitor report. The previous peak was in 2009, according to the Washington-based fund. (Source: Bloomberg)
U.S: Debt load seen worse than Italy's by 2023, IMF predicts. In five years, the U.S. government is forecast to have a bleaker debt profile than Italy, the perennial poor man of the Group of Seven industrial nations. The U.S. debt-to-GDP ratio is projected widen to 116.9% by 2023 while Italy's is seen narrowing to 116.6%, according to the latest data from the International Monetary Fund. The numbers put renewed focus on the U.S. deteriorating budget after the enactment in December of USD1.5t in tax cuts, and the passage more recently of USD300b in new spending. (Source: Bloomberg)
E.U: Euro-area inflation accelerated less than initially estimated last month, a setback for European Central Bank policy makers as they consider winding down unprecedented stimulus. Consumer prices in the 19-country bloc rose just 1.3% in March from a year earlier, according the European Union's statistical office. Core inflation, which strips out volatile components such as food and fuel, held at 1% for a third month. (Source: Bloomberg)
Germany: Public sector workers and employers agreed on a wage hike in three steps, averting the threat of more disruptive strikes in Europe's biggest economy. Wages are set to rise by 3.19% on average retroactive to March, by another 3.09% next April, and by a further 1.06% in March 2020, according to the agreement for the nation's 2.3 million workers in federal and local governments. The Ver.di union had demanded a 6% pay raise, or at least EUR200 (USD250) a month, over 12 months. The accord means Germany will be spared more of the stoppages that severely disrupted flights at airports including major hubs Frankfurt and Munich last week. Cologne and Bremen airports were also hit, as well as some local transport networks, city administrations, nursery schools, utilities and job centers. (Source: Bloomberg)
U.K: Inflation slowed to the weakest in a year in March, raising questions about how quickly the Bank of England will increase interest rates. Consumer prices rose 2.5% from a year earlier, down from 2.7% in February, the Office for National Statistics said. That's less than economists estimated and below the BOE's most recent forecast of 2.8% for the same period. Core inflation cooled to 2.3%, also the lowest rate in a year. Policy makers are widely expected to raise the benchmark for a second time in six months at their May meeting as inflation continues to exceed the 2 percent target. Officials have also said they'll likely need to raise borrowing costs several times over the coming years as domestically generated inflation pressures pick up. (Source: Bloomberg) | |
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Keck Seng: To buy hotel investment platform for MYR121m.The group is buying a stake in hotel investment platform AccorInvest Group SA for MYR121m to gain exposure to a diversified portfolio of hotels in Europe with resilient income stream and opportunities for value creation. AccorInvest, which is owned by European hotel giant Accor SA, is the world leader in hotel real estate, with a current portfolio of 891 hotels. Kek Seng which is involved in plantation, hotel and property businesses, told the stock exchange that a special purpose vehicle will be set up in which the group together with other investors will acquire the shares of AccorInvest. (Source: The Sun Daily)
T7 Global: Receives contracts worth MYR63m. It has, via various subsidiaries, secured three contracts for the provision of services worth a total sum of MYR63m. The first contract is for the provision of maintenance services, spare parts and consummables for Murphy Sarawak Oil Co Ltd with a tenure of three years. The second contract involves the upgrading of a combat management system for a Royal Malaysian Navy vesse, expected to be completed in Aug 2019. Lastly, a contract for the supply of equipment and upgrading works, which expires on 16 Oct 2018. (Source: The Star)
UMW Holdings: Perodua Labour Union objects to UMWH's takeover offer of MBM Resources. The Perodua Labour Union has objected to a proposed acquisition of MBM Resources Bhd by UMW Holdings Bhd, as it fears the move would negatively affect the rights and interests of its members.The union expressed concerns that the takeover will be detrimental to the rights and interests of union members, which have been safeguarded by the existing Perodua management for the past 25 years. (Source: The Edge Financial Dailly) | |
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