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| | | | | | | | | | | | | | Share Price: | MYR4.97 | Target Price: | MYR5.80 | Recommendation: | Buy | | |
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| | | KL-SG HSR PDP in the bag! | | We are positive on Gamuda-MRCB securing the KL-SG HSR PDP Package 1 (North) for the Malaysian civil infrastructure works portion as this would help alleviate the concern of Gamuda's orderbook replenishment. We see potential upside to our earnings forecasts and RNAV-based TP of MYR5.80. We are unable to compute the value accretion to Gamuda at this juncture due to the scarcity of details. Recent share price weakness represents an opportunity to accumulate. Reiterate BUY. | | |
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| | FYE Jul (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,121.9 | 3,211.4 | 4,164.5 | 4,320.6 | EBITDA | 548.5 | 831.2 | 883.9 | 990.4 | Core net profit | 626.1 | 700.6 | 832.1 | 887.6 | Core EPS (sen) | 26.0 | 28.8 | 34.3 | 36.5 | Core EPS growth (%) | (10.2) | 11.0 | 18.8 | 6.7 | Net DPS (sen) | 12.0 | 12.0 | 12.0 | 12.0 | Core P/E (x) | 19.1 | 17.2 | 14.5 | 13.6 | P/BV (x) | 1.7 | 1.6 | 1.5 | 1.4 | Net dividend yield (%) | 2.4 | 2.4 | 2.4 | 2.4 | ROAE (%) | 9.5 | 8.4 | 10.8 | 10.7 | ROAA (%) | 4.6 | 4.7 | 5.1 | 5.2 | EV/EBITDA (x) | 29.0 | 21.5 | 19.9 | 17.1 | Net debt/equity (%) | 55.2 | 59.8 | 60.7 | 48.2 |
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| | | | | | | | | | | | Share Price: | MYR2.99 | Target Price: | MYR3.50 | Recommendation: | Buy | | |
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| | | Launches Pengerang Deepwater Terminals, Phase 3 | | The launch of Phase 3 denotes Dialog's intent to develop a storage/ trading hub in Asia and position its Pengerang project as an ideal storage hub for strategic petroleum reserves among OECD countries. Phase 3 will also be a key support to turn Pengerang into a downstream complex hub. We lift our SOP-based TP to MYR3.50 (+17%) after incorporating Dialog's larger 46% effective stake at Phase 3 (from 25%). Maintain BUY. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,534.5 | 3,392.9 | 3,534.3 | 3,668.9 | EBITDA | 385.4 | 475.0 | 519.2 | 510.0 | Core net profit | 261.0 | 328.2 | 433.9 | 464.0 | Core EPS (sen) | 5.0 | 6.1 | 8.1 | 8.6 | Core EPS growth (%) | (0.9) | 20.8 | 32.2 | 6.9 | Net DPS (sen) | 2.2 | 2.6 | 3.5 | 3.7 | Core P/E (x) | 59.3 | 49.1 | 37.1 | 34.7 | P/BV (x) | 6.4 | 5.2 | 4.7 | 4.4 | Net dividend yield (%) | 0.7 | 0.9 | 1.2 | 1.2 | ROAE (%) | 13.4 | 13.4 | 13.3 | 13.1 | ROAA (%) | 6.7 | 6.6 | 7.4 | 7.6 | EV/EBITDA (x) | 20.7 | 21.9 | 32.6 | 33.1 | Net debt/equity (%) | net cash | net cash | 20.9 | 18.1 |
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| | MACRO RESEARCH | | | | | | Seasonal swing in external trade
by Suhaimi Ilias |
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| | | | | | Exports and imports in Feb 2018 dropped -2.0% YoY (Jan 2018: +17.9% YoY) and -2.8% YoY (Jan 2018: +11.6% YoY) amid sustained trade surplus (Feb 2018: +MYR9.0b; Jan 2018: +MYR9.6b). Jan-Feb 2018 export and import growth moderated to +7.8% YoY (Jan-Feb 2017: +19.8% YoY) and +4.6% YoY (Jan-Feb 2017: +21.5% YoY) with wider trade surplus of +MYR18.7b (Jan-Feb 2017: +MYR13.5b), consistent with our forecasts of slower trade growth this year after last year's surge and sustained surplus. | |
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| | | | | | S&P 500 Index: Congestion at Critical Support
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI rebounded strongly yesterday, rising 20.19pts to 1,836.13 on bargain hunting activities. Advancers were led by GENM, YTL and AMM. Sentiment improved after US softened stance on trade tariffs. Market breadth turned positive with gainers outpacing losers by 660 to 344. A total of 2.22b shares worth MYR2.02b changed hands. Market could remain choppy today after President Trump ordered his administration to consider additional tariffs on Chinese imports. | |
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| NEWS | | | Outside Malaysia:
U.S: Trump urges USD100b in new China tariffs, stoking tensions. President Donald Trump ordered his administration to consider imposing tariffs on an additional USD100b in Chinese imports, a salvo that sent U.S. stock futures tumbling on concern the world's two largest economies were hurtling toward a full-blown trade war. The move threatens to unravel efforts by top U.S. and Chinese trade officials to lower the heat and reach an agreement that could stave off an escalating conflict. (Source: Bloomberg)
U.S: Trade gap widens for sixth month ahead of Trump tariffs. The U.S. trade deficit widened by more than forecast to a fresh nine-year high in February amid broad-based demand for imports, ahead of Trump administration tariffs that have raised the spectre of a trade war. The gap increased 1.6% in February to USD57.6b, Commerce Department data showed. It was the sixth straight month with a wider deficit, the longest streak since 2000. Imports and exports both registered gains of 1.7%, with the data showing a USD1b jump in charges for imported intellectual property that probably reflect a temporary boost from rights fees to broadcast the Olympic Games. (Source: Bloomberg)
E.U: Euro-area economic momentum weakened to the lowest level in more than a year, adding to signs that the region's growth spurt has peaked. A composite Purchasing Managers' Index dropped to 55.2 in March from 57.1 in February, IHS Markit said. The reading is slightly below a flash estimate of 55.3, with the downward revision led by a worse-than-expected performance in services. (Source: Bloomberg)
Germany: Factory orders rebounded in February, adding to a pile of work that keeps getting higher as companies face capacity constraints. Orders, adjusted for seasonal swings and inflation, increased 0.3% after dropping a revised 3.5% in January, the Economy Ministry in Berlin said. Demand was up 3.5% YoY. (Source: Bloomberg)
India: Central bank kept interest rates unchanged for the fourth straight meeting and cut its inflation forecast citing lower food prices. Reserve Bank of India Governor Urjit Patel and his monetary policy committee retained the benchmark repurchase rate at 6%. Five of the six-member MPC voted for the decision, while one sought a hike. "Overall food inflation should remain under check on the assumption of a normal monsoon and effective supply management by the government," the Reserve Bank of India said in a statement. It retained its neutral policy stance. (Source: Bloomberg) | |
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Protasco: Wins extensions to federal govt, Perak road maintenance contracts. The group bagged an eight-year extension to its concession to maintain federal roads in central and eastern Peninsular Malaysia, which will run until 2026, and two other road maintenance concessions in Perak worth MYR216.2m in the first two years.The federal roads concession contract sum was not disclosed. (Source: The Sun Daily)
MRCB: MRCB-Gamuda, YTL-TH Properties consortia appointed as PDP for HSR. MyHSR Corp S/B has appointed the consortia of Malaysian Resources Corp Bhd – Gamuda Bhd (MRCB Gamuda Consortium), and Syarikat Pembenaan Yeoh Tiong Lay S/B – TH Properties S/B (YTL-THP) as its project delivery partners (PDP) for the Kuala Lumpur–Singapore High Speed Rail (HSR) civil works portion.MyHSR said the MRCB Gamuda Consortium has been selected for the northern portion of the alignment, while YTL-THP has been selected for the southern portion. The contracts will be awarded upon the conclusion of negotiations between MyHSR Corp and the PDPs. (Source: The Edge Financial Daily)
GHL Systems: To buy payment solutions firm for MYR80m. Its wholly-owned subsidiary S Capital S/B is acquiring payment solutions company Paysys Communications S/B for MYR80m, which will give it an opportunity to solidify its presence as a payment solutions provider in Malaysia. It added that the consideration will be satisfied via MYR40m cash and an issuance of up to 33.5m new GHL shares to be issued at MYR1.1927. (Source: The Edge Financial Daily) | |
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