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| | | | | | | | | | | | | | Share Price: | MYR4.75 | Target Price: | MYR5.13 | Recommendation: | Buy | | |
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| | | Record profits | | IOI posted a record 3QFY6/18 headline PATMI of MYR2.07b, boosted by disposal gain on Loders (MYR1.66b) and FX translation gains (MYR162m). Even without this, operational performance still exceeded our estimates. Following our earnings revision, we maintain our tactical BUY with a revised TP of MYR5.13 on 28x FY18 PER, pegged at its updated historical 5-year mean (previously MYR5.03 on 29x FY18 PER). | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 11,739.3 | 14,127.3 | 12,206.3 | 10,187.8 | EBITDA | 1,494.6 | 1,603.8 | 2,418.0 | 1,916.2 | Core net profit | 951.5 | 1,022.8 | 1,151.5 | 1,222.0 | Core EPS (sen) | 14.7 | 16.3 | 18.3 | 19.4 | Core EPS growth (%) | 27.8 | 10.5 | 12.6 | 6.1 | Net DPS (sen) | 8.0 | 9.5 | 21.0 | 11.7 | Core P/E (x) | 32.3 | 29.2 | 25.9 | 24.4 | P/BV (x) | 4.3 | 4.0 | 3.2 | 3.0 | Net dividend yield (%) | 1.7 | 2.0 | 4.4 | 2.5 | ROAE (%) | 8.9 | 10.0 | 38.5 | 12.7 | ROAA (%) | 5.6 | 5.7 | 6.4 | 6.7 | EV/EBITDA (x) | 22.6 | 21.2 | 13.4 | 16.6 | Net debt/equity (%) | 73.4 | 75.4 | 22.9 | 16.0 |
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| | | | | | | | | | | | Share Price: | MYR3.32 | Target Price: | MYR3.50 | Recommendation: | Buy | | |
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| | | 9MFY6/18: No surprises | | 9MFY6/18 core earnings came in, in line with our FY estimates. We remain an enthusiast of Dialog's focused business and management. Dialog offers long-term secular growth, with business scalability and solid financials to leverage on the rising demand for tank terminal facilities in Asia via its operations at Pengerang. We make no change to our earnings forecasts. Our unchanged TP is SOP-based. | | |
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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) | 65.8 | 54.5 | 41.2 | 38.5 | P/BV (x) | 7.1 | 5.7 | 5.3 | 4.9 | Net dividend yield (%) | 0.7 | 0.8 | 1.0 | 1.1 | 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 | 36.0 | 36.6 | Net debt/equity (%) | net cash | net cash | 20.9 | 18.1 |
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| | | | | | | | | | | | Share Price: | MYR3.58 | Target Price: | MYR4.30 | Recommendation: | Buy | | |
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| | | Waiting for the dust to settle; U/G BUY | | AMMB's share price has declined 20% YTD and at 8.6x FY19 PER, the stock trades below its -1SD of 9.3x. Supported by an FY18E yield of 4.6%, we upgrade our call to BUY but with a lower TP of MYR4.30 on a CY19 PBV peg of 0.7x, having trimmed our earnings and ROE estimates. We do caution that there could still be near term volatility, for there is the high likelihood of the stock being dropped as an FBM KLCI constituent at month end. This has, nevertheless, been partially priced in, in our view. | | |
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| | FYE Mar (MYR m) | FY16A | FY17A | FY18E | FY19E | Operating income | 3,693.3 | 3,728.9 | 3,792.8 | 4,086.1 | Pre-provision profit | 1,519.0 | 1,568.4 | 1,470.1 | 1,902.3 | Core net profit | 1,355.9 | 1,196.9 | 1,229.9 | 1,323.9 | Core EPS (MYR) | 0.45 | 0.40 | 0.41 | 0.44 | Core EPS growth (%) | (17.2) | (11.8) | 2.5 | 7.6 | Net DPS (MYR) | 0.16 | 0.18 | 0.16 | 0.18 | Core P/E (x) | 7.9 | 9.0 | 8.8 | 8.2 | P/BV (x) | 0.7 | 0.7 | 0.6 | 0.6 | Net dividend yield (%) | 4.3 | 4.9 | 4.6 | 4.9 | Book value (MYR) | 5.03 | 5.32 | 5.69 | 5.95 | ROAE (%) | 9.2 | 7.7 | 7.4 | 7.6 | ROAA (%) | 1.0 | 0.9 | 0.9 | 0.9 |
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| | | | | | | | | | | | Share Price: | MYR1.00 | Target Price: | MYR1.25 | Recommendation: | Buy | | |
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| | | Value BUY | | 1Q18 net profit was within our expectations owed to savings from depreciation and staff costs at its print and new media segment. Following a 39% fall in share price YTD, we believe STAR's negative outlook has been largely priced in. At 0.9x FY18E PBV, valuations have also turned attractive giving rise to it being a potential takeover target. As such, we tactically upgrade STAR to BUY (from HOLD) with an unchanged SOP-TP of MYR1.25. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 630.4 | 517.7 | 506.9 | 505.3 | EBITDA | 163.2 | 87.2 | 96.2 | 97.7 | Core net profit | 69.9 | 60.6 | 47.4 | 51.9 | Core EPS (sen) | 9.5 | 8.2 | 6.4 | 7.0 | Core EPS growth (%) | (47.0) | (13.3) | (21.9) | 9.6 | Net DPS (sen) | 18.0 | 42.0 | 12.0 | 12.0 | Core P/E (x) | 10.6 | 12.2 | 15.6 | 14.2 | P/BV (x) | 0.7 | 0.8 | 0.9 | 0.9 | Net dividend yield (%) | 18.0 | 42.0 | 12.0 | 12.0 | ROAE (%) | 9.7 | 9.0 | 5.6 | 6.4 | ROAA (%) | 4.1 | 4.3 | 4.4 | 5.3 | EV/EBITDA (x) | 9.0 | 9.6 | 4.3 | 4.6 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR1.54 | Target Price: | MYR1.86 | Recommendation: | Buy | | |
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| | | 1Q18: In line | | 1Q18 core earnings came in line with ours and consensus FY estimates. Nord Stream 2 (NS2) will continue to drive WSC's prospects up to 2019. Balance sheet strengthening will remain an ongoing agenda. Our earnings forecasts are unchanged. Our unchanged TP is based on 12x FY18 PER. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,276.6 | 2,492.1 | 2,503.3 | 2,520.3 | EBITDA | 53.6 | 287.1 | 343.4 | 344.4 | Core net profit | (23.3) | 94.2 | 114.5 | 115.8 | Core EPS (sen) | (3.0) | 12.2 | 14.8 | 15.0 | Core EPS growth (%) | nm | nm | 21.6 | 1.1 | Net DPS (sen) | 0.5 | 0.0 | 0.0 | 0.0 | Core P/E (x) | nm | 12.6 | 10.4 | 10.3 | P/BV (x) | 1.5 | 1.3 | 1.2 | 1.1 | Net dividend yield (%) | 0.3 | 0.0 | 0.0 | 0.0 | ROAE (%) | (23.2) | 13.5 | 12.0 | 10.8 | ROAA (%) | (0.8) | 3.3 | 3.5 | 3.4 | EV/EBITDA (x) | 30.4 | 5.7 | 4.8 | 4.2 | Net debt/equity (%) | 104.7 | 68.2 | 32.9 | 11.5 |
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| | | | | | | | | | | | Share Price: | MYR25.40 | Target Price: | MYR26.40 | Recommendation: | Hold | | |
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| | | Earnings moderated by inventory build-up | | We consider 1HFY9/18 earnings to be within estimates as overall earnings were moderated by net inventory build-up (ie lower sales volume relative to output in 1HFY18). Downstream was the outperformer. We maintain our earnings forecasts. Given muted FY18 earnings growth outlook, KLK remains a HOLD with an unchanged TP of MYR26.40 on 26x FY18 PER (5-year mean). | | |
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| | FYE Sep (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 16,505.8 | 21,004.0 | 20,743.7 | 22,092.0 | EBITDA | 1,805.8 | 2,157.1 | 2,072.0 | 2,236.9 | Core net profit | 824.5 | 1,063.8 | 1,080.1 | 1,194.2 | Core EPS (sen) | 77.2 | 99.9 | 101.4 | 112.1 | Core EPS growth (%) | 0.7 | 29.3 | 1.5 | 10.6 | Net DPS (sen) | 50.0 | 50.0 | 60.8 | 67.3 | Core P/E (x) | 32.9 | 25.4 | 25.0 | 22.7 | P/BV (x) | 2.6 | 2.3 | 2.3 | 2.2 | Net dividend yield (%) | 2.0 | 2.0 | 2.4 | 2.6 | ROAE (%) | 15.8 | 9.1 | 9.2 | 9.8 | ROAA (%) | 4.6 | 5.6 | 5.5 | 5.9 | EV/EBITDA (x) | 16.0 | 13.6 | 14.4 | 13.3 | Net debt/equity (%) | 22.5 | 19.3 | 15.1 | 12.5 |
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| | | | | | | | | | | | Share Price: | MYR7.82 | Target Price: | MYR8.00 | Recommendation: | Hold | | |
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| | | 1Q18 earnings on track | | 1Q18 results and first interim gross DPU of 8.7sen were within expectations. The higher 1Q18 earnings (YoY) were attributed to topline improvements at the office, retail and hotel assets but partly offset by the management services segment. Our earnings forecasts and MYR8.00 TP (cost of equity: 7.3%) are unchanged. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,343.5 | 1,366.8 | 1,489.4 | 1,530.0 | Net property income | 1,019.7 | 1,014.8 | 1,099.9 | 1,137.7 | Distributable income | 674.6 | 671.5 | 670.4 | 691.3 | DPU (sen) | 33.4 | 34.0 | 33.8 | 34.9 | DPU growth (%) | 2.7 | 2.0 | (0.7) | 3.2 | Price/DPU(x) | 23.4 | 23.0 | 23.1 | 22.4 | P/BV (x) | 1.1 | 1.1 | 1.0 | 1.0 | DPU yield (%) | 4.3 | 4.4 | 4.3 | 4.5 | ROAE (%) | 7.0 | 6.8 | 5.5 | 5.4 | ROAA (%) | 4.1 | 4.1 | 4.1 | 4.2 | Debt/Assets (x) | 0.1 | 0.1 | 0.1 | 0.1 |
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| | MACRO RESEARCH | | | | | | GST to be zero-rated
by Suhaimi Ilias |
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| | | | | | The new Pakatan Harapan (PH)-led Government yesterday announced the zero-rating of the 6% Goods and Services Tax (GST) effective 1 June 2018. This does not apply to goods and services where the 6% GST has been exempted, where the exemption stays; technical, in our view. The announcement from did not mention on the re-implementation of the Sales and Services Taxes (SST); we expect another announcement to be made on this. This represents the first delivery of the 10 promises for the first 100 days | |
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| | | | | | KLCSU Index: Punching Through Key Resistances
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI shrugged off early losses to end the day 10.06pts higher at 1,858.26. Consumer stocks rallied after the government announced that GST will be zero-rated effective 1 Jun 2018. Advancers were led by MAXIS, PBBANK, and AMMB. Broader market however was mixed with gainers outpacing losers by 492 to 486. A total of 3.00b shares worth MYR2.91b changed hands. As corporate earnings take center stage, coupled with firmer US markets overnight, local bourses could extend its gain. | |
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| NEWS | | | Outside Malaysia:
U.S: Factory production regained its footing in April to push capacity utilization to the highest since 2015, indicating the industry will support economic growth this quarter, Federal Reserve data showed. Factory output rose 0.5% MoM after being unchanged in March (revised from up 0.1%). Total industrial production, which also includes mining and utilities, increased 0.7% MoM .Capacity utilization, measuring the amount of a plant that is in use, rose to 78% from downwardly revised 77.6% (prev. 78%). The gain in factory output was broad-based outside of a decline in motor vehicles and parts. Several categories posted increases of more than 1%, including machinery; computer and electronic products; electrical equipment and appliances; and aerospace and miscellaneous transportation. (Source: Bloomberg)
U.S: Broad gauge of factory productivity had record drop in 2016. U.S. manufacturing productivity is even more down in the dumps than before, a sobering reminder that recent gains in factory employment and business investment aren't all good news. Manufacturing-sector multifactor productivity -- a broader measure than quarterly figures on efficiency -- plunged 3.2% in 2016, the worst annual decline in data back to 1987, according to a Labor Department report. That reflected decreases in 14 of 18 industries, led by chemicals, food and transportation equipment. Multifactor productivity is calculated by dividing an index of real output by an index combining labor, capital services and intermediate inputs. It includes intangibles such as information on shifts in the size and quality of the workforce. To that extent, it's a more comprehensive concept than the commonly known gauge of labor productivity, or output per hour worked. The pullback in 2016 came as factory output rose 0.4% outpaced by a 3.6% increase in combined inputs. (Source: Bloomberg)
Japan: Economic growth streak set to restart after speed bump. Japan's first economic contraction in two years is expected to be only a speed bump on the road to further, yet slower growth. The economy shrank in the first quarter at an annualized rate of 0.6% due to capital investment unexpectedly falling 0.1% and flat private consumption. Growth is forecast to resume in the current quarter as global trade and Japanese exports regain traction. Still, the drop-off offers a reminder of the challenge facing the Bank of Japan as it continues its long-running efforts to achieve 2% inflation. Domestic demand remains soft after the two-year expansion, even accounting for temporary factors that weighed in the first quarter of this year, including unusually poor weather. (Source: Bloomberg) | |
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Meda Inc: Seeks MYR108.76m damages from PR1MA. Its wholly-owned subsidiary Maju Puncakbumi S/B has launched legal action against Perbadanan PR1MA Malaysia, claiming MYR108.76m in damages. This follows the termination of a plan by PR1MA to buy a 4.29-acre piece of land in Tanjung Kling, Melaka, from Maju Puncakbumi for MYR6.81m in December last year. Meda said Maju Puncakbumi had initiated a writ in the Shah Alam High Court on April 25, which was served to PR1MA today. (Source: The Edge Financial Daily)
Prestariang: Confident of keeping its SKIN. Prestariang does not expect the change in government to affect its 15-year concession agreement for the National Immigration Control System (Sistem Kawalan Imigresen Nasional or SKIN) project. Last year, Prestariang entered into a 15-year concession agreement with the government via the Home Affairs Ministry for the implementation of SKIN. (Source: The Sun Daily)
APM Automotive: 1Q net profit jumps 54% on higher margin. Its net profit jumped 53.6% to MYR16.21m in the first quarter ended March 31, 2018, from MYR10.55m a year ago, mainly due to the better utilisation of fixed overheads which led to an improved gross profit margin for the group. Quarterly revenue also grew 8.9% to MYR320.31m from MYR294.08m a year ago, driven by the interior and plastics division, which registered higher demand for certain original equipment manufacturer models. (Source: The Edge Financial Daily) | |
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