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| | | | | | | | | | | | | | Share Price: | MYR0.73 | Target Price: | MYR0.79 | Recommendation: | Hold | | |
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| | | Heavy capex in FY18 | | Construction of its 3-storey warehouse in Klang is on track and is targeted to be completed by end-2018. FY18 will see heavy capex largely on investments in its courier operations. We make no changes to our earnings forecasts. Maintain HOLD but with a lower DCF-TP of MYR0.79 on reflecting the latest 5-year beta (-11sen, WACC: 9.4% & LTG: 2.0%, previously WACC: 8.9% & LTG: 2.0%). | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 300.3 | 294.6 | 337.6 | 394.8 | EBITDA | 37.9 | 31.5 | 31.5 | 40.5 | Core net profit | 22.5 | 15.3 | 15.6 | 16.2 | Core EPS (sen) | 5.8 | 3.9 | 4.0 | 4.2 | Core EPS growth (%) | 0.8 | (32.2) | 2.3 | 3.6 | Net DPS (sen) | 3.5 | 1.5 | 1.0 | 1.1 | Core P/E (x) | 12.7 | 18.7 | 18.3 | 17.6 | P/BV (x) | 0.9 | 0.9 | 0.9 | 0.8 | Net dividend yield (%) | 4.8 | 2.1 | 1.4 | 1.4 | ROAE (%) | 6.9 | 4.9 | 4.8 | 4.8 | ROAA (%) | 5.2 | 3.5 | 3.2 | 2.9 | EV/EBITDA (x) | 8.3 | 11.7 | 11.7 | 10.1 | Net debt/equity (%) | net cash | net cash | 24.7 | 35.8 |
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| | MACRO RESEARCH | | | | | | Fund flows & Lookouts
by Chew Hann Wong |
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| | | | | | March 2018 saw foreign investors net sold MYR0.1b worth of Malaysia equities, in-line with weakness in the external markets with the main concern being the potential eruption of a trade war between US and China and its implications on global trade and growth. We expect a cautious mood towards Malaysia equities in April as GE14 looms. We make no change to our end-2018 KLCI target of 1,880 for now. | |
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| | | | | | S&P 500 Index: Walking a Tightrope
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI started the week on a weak note as sentiment turned wary on renewed concerns over US-China trade war. At day's end, the benchmark fell 5.11pts to 1,858.35, led be declines in HLFG, PETDAG, TM and Hap Seng. Market breadth was negative with losers outpacing gainers by 553 to 313. A total of 2.07b shares worth MYR1.63b changed hands. Expect another bloodbath today following the steep correction in Wall Street overnight. | |
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| NEWS | | | Outside Malaysia:
U.S: Factory gains cool as raw-material inflation picks up. U.S. factories expanded at a robust yet slightly slower pace in March and tariffs helped drive a measure of raw-material prices to an almost seven-year high, data from the Institute for Supply Management showed. Factory index eased to 59.3 from 60.8; readings above 50 indicate expansion Measure of new orders fell to 61.9, the lowest since August, from 64.2. Prices-paid index rose for a fourth straight month to 78.1, the highest since April 2011, from 74.2; employment gauge declined to 57.3 from 59.7. (Source: Bloomberg)
U.S: Trump Said to Push for NAFTA Deal in Principle. The Trump administration is pushing for the U.S., Canada and Mexico to reach a NAFTA deal in principle to announce at the Summit of the Americas in Peru on April 13-14, according to three people familiar with the plans who asked not to be identified because they haven't been made public. The Trump administration will host negotiators in Washington this week to try to achieve a breakthrough on significant remaining differences, the people said. Under White House push, leaders of the three nations would be able to announce at regional summit that they've reached agreement on the broad outlines of an updated NAFTA deal, while technical talks could continue to hammer out the finer details and legal text. (Source: Bloomberg)
Canada: Trade concern seeps into consumer confidence numbers. It's been a dramatic reversal in sentiment for Canada's consumers. The Bloomberg Nanos Canadian Confidence Index – a composite gauge based on survey questions -- continued to tumble in March, dropping to the worst month-end reading in more than a year as households grow increasingly concerned about the durability of the economic expansion. The index ended the month at 56.8, the lowest since January 2017. Consumer sentiment has now declined every month this year, driven lower by worries over growth, with almost one-in-three Canadians anticipating the economy will weaken over the next six months. (Source: Bloomberg)
China: Urges more trade talks as tariffs on U.S. goods begin. China urged trade talks with the U.S. to prevent greater damage to relations while saying that previously announced retaliatory measures on American imports took effect Monday. The U.S. didn't respond to China's March 26 request for consultation on Washington's steel and aluminum tariffs, the Commerce Ministry said in a statement, adding that officials have widespread public support for tougher measures and repeating Beijing's stance that disputes should be resolved with dialogue. China previously planned to seek compensation for trade lost because of the U.S. metals actions. (Source: Bloomberg) | |
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GFM Services: Bags five-year contract worth MYR52m for Sabah state administration centre. The group has bagged an MYR51.78m contract from Sinar Uni-Resources S/B to provide integrated facilities management (FM) services to the Sabah state administration centre in Kota Kinabalu. The contract is for five years from January this year till January 2023. (Source: The Edge Financial Daily)
CIMB: Gets SC nod to sell cash equities business to Jupiter Securities. CIMB Group Holdings received approval from the Securities Commission Malaysia today for the proposed sale of its Malaysia cash equities business to Jupiter Securities S/B. This includes the sale of a 100% equity interest in CIMB Futures S/B. The proposed transaction is also subject to approval from Bank Negara Malaysia, CIMB said. (Source: The Edge Financial Daily)
Hibiscus Petroleum: Completes North Sabah PSC acquisition from Shell. Its wholly-owned subsidiary SEA Hibiscus S/Bhas completed the acquisition of a 50% participating interest in the North Sabah Enhanced Oil Recovery Production Sharing Contract (PSC) for USD25m (about MYR96.44m) from Shell. Hibiscus said SEA Hibiscus completed the acquisition on Saturday (March 31), and that the acquisition would "significantly boost" Hibiscus' oil production. (Source: The Edge Financial Daily) | |
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