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| | | | | | | | | | | | | | Share Price: | MYR17.84 | Target Price: | MYR19.50 | Recommendation: | Buy | | |
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| | | A good start | | PTG's 1Q18 results were in line. A results call will be held on Friday morning, but is again unlikely to contain material TPA-related updates. We continue to view risk-reward as being attractive, with the stock still offering c.10% upside under a 50% probability of an adverse TPA outcome. Reiterate BUY with an unchanged MYR19.50 TP. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 4,561.3 | 4,809.6 | 5,258.4 | 5,309.5 | EBITDA | 2,968.1 | 3,170.8 | 3,420.6 | 3,384.5 | Core net profit | 1,747.2 | 1,777.6 | 1,861.7 | 1,894.5 | Core EPS (sen) | 88.3 | 89.8 | 94.1 | 95.7 | Core EPS growth (%) | (0.1) | 1.7 | 4.7 | 1.8 | Net DPS (sen) | 62.0 | 66.0 | 65.9 | 67.0 | Core P/E (x) | 20.2 | 19.9 | 19.0 | 18.6 | P/BV (x) | 2.9 | 2.8 | 2.7 | 2.6 | Net dividend yield (%) | 3.5 | 3.7 | 3.7 | 3.8 | ROAE (%) | 14.9 | 14.6 | 14.6 | 14.2 | ROAA (%) | 11.3 | 10.4 | 10.4 | 10.2 | EV/EBITDA (x) | 14.4 | 11.2 | 10.3 | 10.2 | Net debt/equity (%) | 4.0 | 4.6 | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR1.12 | Target Price: | MYR1.30 | Recommendation: | Buy | | |
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| | | 1Q18: In-line, but some easing in occupancy | | 1Q18 earnings were within our estimates. Despite having stable rental income from long-term tenants at selected assets, earnings were dragged by lower occupancy rate at Platinum Sentral and higher opex. We lower our FY18-20 earnings forecasts by 2-3% p.a. and DDM-TP by 5sen to MYR1.30 (unchanged cost of equity of 7.6%). MQREIT's CY18E net DPU yield of 6.7% remains favourable and above our M-REITs coverage's average of 5.8%. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 131.8 | 180.1 | 180.8 | 183.0 | Net property income | 102.3 | 140.0 | 138.1 | 139.7 | Distributable income | 59.2 | 92.4 | 94.9 | 95.2 | DPU (sen) | 7.5 | 7.6 | 7.5 | 7.5 | DPU growth (%) | 8.8 | 0.1 | (0.4) | (0.2) | Price/DPU(x) | 14.9 | 14.8 | 14.9 | 14.9 | P/BV (x) | 0.5 | 0.9 | 0.9 | 0.9 | DPU yield (%) | 6.7 | 6.7 | 6.7 | 6.7 | ROAE (%) | 5.6 | 5.1 | 6.4 | 6.4 | ROAA (%) | 3.0 | 3.8 | 3.9 | 3.9 | Debt/Assets (x) | 0.4 | 0.4 | 0.4 | 0.4 |
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| | | | | | | | | | | | Share Price: | MYR1.44 | Target Price: | MYR1.57 | Recommendation: | Hold | | |
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| | | Partnering Japan's Mitsui and Mitsubishi Estate | | We are positive on SDPR's latest venture with Japanese property players to jointly develop SDPR's industrial land in Bandar Bukit Raja (BKK) as the JV will not only enhance the long-term value of the Bandar Bukit Raja project (BKK) but also allow SDPR to tap onto its foreign partners' expertise and provide a steady recurring rental income. We maintain our earnings forecasts and MYR1.57 RNAV-TP (on an unchanged 0.55x P/RNAV peg) pending the release of its 3QFY6/18 results. Maintain HOLD. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,590.7 | 2,564.4 | 1,712.9 | 2,342.8 | EBITDA | 1,033.1 | 556.2 | 1,018.9 | 915.8 | Core net profit | 749.1 | 607.9 | 841.5 | 701.1 | Core EPS (sen) | 11.0 | 8.9 | 12.4 | 10.3 | Core EPS growth (%) | 33.6 | (18.8) | 38.4 | (16.7) | Net DPS (sen) | 0.0 | 0.0 | 4.9 | 4.1 | Core P/E (x) | 13.1 | 16.1 | 11.6 | 14.0 | P/BV (x) | 1.8 | 1.5 | 1.0 | 1.0 | Net dividend yield (%) | 0.0 | 0.0 | 3.4 | 2.9 | ROAE (%) | 18.2 | 10.7 | 10.5 | 7.1 | ROAA (%) | 6.2 | 4.5 | 5.9 | 4.6 | EV/EBITDA (x) | na | na | 10.9 | 13.0 | Net debt/equity (%) | 22.4 | 1.4 | 10.0 | 17.8 |
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| | | | | | | | | | | | Share Price: | MYR2.15 | Target Price: | MYR2.30 | Recommendation: | Hold | | |
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| | | Precast a drag to earnings | | 1Q18 results came in below ours/consensus expectations largely on weaker earnings from the precast segment affected by slower progress billing and higher cost of steel bars. Our FY18E-FY20E earnings are cut by 5%-23% after i) adjusting for slower precast recognition and lower margins and ii) slower construction progress at some projects. Maintain HOLD with a lower TP of MYR2.30 (rounded) pegged to a lower PE of 15x (-1SD) vs. 16x previously to FY19E earnings. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,788.8 | 2,076.3 | 2,536.1 | 3,100.5 | EBITDA | 188.3 | 202.4 | 244.3 | 288.9 | Core net profit | 123.5 | 137.8 | 164.5 | 196.5 | Core EPS (sen) | 9.6 | 10.7 | 12.7 | 15.2 | Core EPS growth (%) | (2.9) | 11.6 | 19.3 | 19.5 | Net DPS (sen) | 5.0 | 7.0 | 4.5 | 5.3 | Core P/E (x) | 22.5 | 20.2 | 16.9 | 14.1 | P/BV (x) | 5.6 | 5.0 | 4.2 | 3.5 | Net dividend yield (%) | 2.3 | 3.3 | 2.1 | 2.5 | ROAE (%) | 26.2 | 26.3 | 27.1 | 27.1 | ROAA (%) | 8.2 | 7.9 | 8.7 | 9.4 | EV/EBITDA (x) | 9.9 | 14.3 | 9.5 | 7.5 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR19.62 | Target Price: | MYR18.00 | Recommendation: | Hold | | |
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| | | 1Q18: Decent domestic ops | | 1Q18 results were above expectations on better-than-expected domestic operations. While operating conditions in Singapore (SG) may be challenging into 2H18 with the introduction of the European Free Trade Agreement which could result in a rise in cheaper imports, we expect domestic ops to provide the buffer, taking cue from the uptrend in consumer sentiment. We raise our earnings forecasts by 5-6% for FY18-20. Maintain HOLD but with a higher DCF-TP of MYR18.00 (+90sen). | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,679.5 | 1,768.2 | 1,857.2 | 1,939.7 | EBITDA | 327.8 | 331.9 | 368.3 | 399.9 | Core net profit | 205.0 | 236.2 | 256.2 | 275.2 | Core EPS (sen) | 67.0 | 77.2 | 83.8 | 90.0 | Core EPS growth (%) | (10.2) | 15.2 | 8.5 | 7.4 | Net DPS (sen) | 72.0 | 87.0 | 83.5 | 90.0 | Core P/E (x) | 29.3 | 25.4 | 23.4 | 21.8 | P/BV (x) | 18.6 | 20.1 | 21.4 | 20.4 | Net dividend yield (%) | 3.7 | 4.4 | 4.3 | 4.6 | ROAE (%) | 62.4 | 71.3 | 88.5 | 95.9 | ROAA (%) | 31.0 | 36.0 | 39.1 | 40.6 | EV/EBITDA (x) | 13.0 | 14.0 | 16.3 | 15.0 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR0.75 | Target Price: | MYR0.71 | Recommendation: | Hold | | |
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| | | 1Q18: Weaker logistics ops and higher courier start-up costs | | 1Q18 results were below expectations on weaker-than-expected total logistics operations and higher-than-expected initial start-up costs at its courier operations. While total logistics operations may remain weak in the near term, we expect better contribution from its procurement logistic segment (on a pick-up in exports sales) to provide some buffer. We have lowered our earnings forecasts by 8-17% for FY18-20. Maintain HOLD with but with a lower DCF-TP of MYR0.71 (-8sen). | | |
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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 | 27.9 | 36.9 | Core net profit | 22.5 | 15.3 | 13.0 | 13.4 | Core EPS (sen) | 5.8 | 3.9 | 3.3 | 3.5 | Core EPS growth (%) | 0.8 | (32.2) | (15.1) | 3.5 | Net DPS (sen) | 3.5 | 1.5 | 0.8 | 0.9 | Core P/E (x) | 12.9 | 19.0 | 22.3 | 21.6 | P/BV (x) | 1.0 | 0.9 | 0.9 | 0.9 | Net dividend yield (%) | 4.7 | 2.0 | 1.1 | 1.2 | ROAE (%) | 6.9 | 4.9 | 4.0 | 4.0 | ROAA (%) | 5.2 | 3.5 | 2.6 | 2.4 | EV/EBITDA (x) | 8.3 | 11.5 | 13.2 | 11.1 | Net debt/equity (%) | net cash | net cash | 23.7 | 35.8 |
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| | | | | | | | | | Dividend angle with LT growth potential | | Wellcall is well-positioned to capture the potential rise in demand for rubber hoses from the up-cycle in global construction and recovery in O&G activities. The Group's manufacturing plants have ample room to ramp-up production to meet the demand for higher quality products. Besides, its in-house compounding production should help the Group to sustain its gross profit margin of more than 30%. To top it off, Wellcall has been generously paying dividends above its policy of 50%. | | |
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| | FYE Sep (MYR m) | FY15A | FY16A | FY17A | FYna | Revenue | 158.1 | 134.5 | 159.1 | na | EBITDA | 53.4 | 47.0 | 54.5 | na | Core net profit | 41.4 | 31.4 | 36.9 | na | Core EPS (sen) | 8.3 | 6.3 | 7.4 | na | Core EPS growth (%) | 41.6 | (24.3) | 17.6 | na | Net DPS (sen) | 6.1 | 6.1 | 6.2 | na | Core P/E (x) | 16.6 | 21.9 | 18.6 | na | P/BV (x) | 7.1 | 7.0 | 6.6 | na | Net dividend yield (%) | 4.4 | 4.4 | 4.5 | na | ROAE (%) | 45.0 | 32.1 | 36.2 | na | ROAA (%) | 33.6 | 23.0 | 28.1 | na | EV/EBITDA (x) | 13.3 | 13.4 | 11.2 | na | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | SECTOR RESEARCH | | | | | | Let the dust settle
by Adrian Wong |
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| | | | | | Uncertainties related to implementation of key major infrastructure projects are now a key concern for future orderbook replenishment of the contractors. Major infrastructure projects could be delayed or postponed as they are likely to be re-prioritized by the new government as they review the country's finances. We downgrade the sector to NEUTRAL with the concerns in place. We also review our TPs and calls for GAM, HSL and KICB which are now HOLDs. | |
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| | | | | | GE14 impact | NEUTRAL
by Kevin Wong |
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| | | | | | The REIT sector has witnessed unit prices down 7-37% in 2018 YTD (till pre-GE14 polling date on 8 May) with the weakness, we believe, coming from expectations for interest rate rise to continue and concerns on asset occupancy. Our house view has been for an unchanged OPR for the rest of 2018. Meanwhile, the new Government's GE14 manifesto is a catalyst for a recovery in consumer spending which reduces occupancy risks at the malls. Our selective BUYs are IGBREIT, SunREIT, YTLREIT, and MQREIT. | |
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| | MACRO RESEARCH | | | | | | Larger current account surplus
by Suhaimi Ilias |
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| | | | | | Current account surplus widened to +MYR15.0b or +4.4% of GDP in 1Q 2018 (4Q 2017: +MYR13.9b or +3.9% of GDP, revised from +MYR12.9b or +3.6% of GDP) on larger goods account surplus and smaller deficit in services account. Revised our 2018 current account surplus forecast to +MYR51b or 3.5% of GDP from +MYR43.0b or +3.0% of GDP previously (2017:+MYR40.3b or +3.0% of GDP). | |
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| | | | | | Slower but still above-5% growth
by Suhaimi Ilias |
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| | | | | | In line with our estimate of +5.5% YoY, 1Q 2018 real GDP growth slowed to +5.4% YoY (4Q 2017: +5.9% YoY). Maintain our +5.3% full-year growth forecast but adjust growth components on both the supply-side and demand-side of GDP to factor in 1Q 2018 details and the expected economic impact of PH Government implementing its election manifesto i.e. stimulating consumer spending amid review of mega projects and curbs in Government spending. | |
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| | | | | | KLPRO Index: Seeing the Blue Sky
by Nik Ihsan Raja Abdullah |
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| | | | | | Late selldown dragged FBMKLCI 3.82pts lower at 1,854.44 yesterday. Foreign selling together with continued sell-off in several counters such as GKEN and MYEG weighed on the broader market. Decliners were led by KLK, ASTRO and YTL. Market breadth was negative with losers outpacing gainers by 570 to 438. A total of 3.32b shares worth MYR3.78b changed hands. Market is expected to remain volatile today. | |
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| NEWS | | | Outside Malaysia:
U.S: Fed manufacturing gauges show more pricing power as costs rise. U.S. manufacturers are indicating greater success in their ability to pass along soaring costs of raw materials. A gauge of prices received by Philadelphia-area factories jumped to 36.4 in May, the highest level in more than 29 years, according to a regional Federal Reserve report. Two days ago, a similar figure from the New York Fed was the strongest since the start of 2012. The data underscore a general pickup in manufacturing activity this month and help guide estimates for the closely followed Institute for Supply Management's monthly national factory index that is scheduled for release on June 1. (Source: Bloomberg)
China: Said to offer Trump $200 billion cut in U.S. trade deficit by increasing imports of American products and other steps, said a Trump administration official. China made the offer during talks in Washington this week as Chinese Vice Premier Liu He visited to try to resolve a trade dispute, the official said, speaking on condition of anonymity. The official didn't describe the U.S. response. A USD200b reduction in the U.S. trade gap with China by 2020 was on a list of demands the Trump administration made earlier this month. The U.S. merchandise trade deficit with China hit a record USD375b last year. But the Trump administration also made a series of additional demands, including a halt to subsidies and other government support for the country's 'Made in China 2025' plan that targets global domination in strategic industries from robotics to new-energy vehicles. (Source: Bloomberg)
Indonesia: Pledges 'stronger measures' as it raises key rate. Indonesia's central bank raised its benchmark interest rate for the first time since 2014 and pledged to take "stronger measures" to maintain stability after the currency took a beating along with other emerging markets amid a global rout. The seven-day reverse repurchase rate was increased by 25 basis points to 4.5% in a decision that split economists. Of the 33 surveyed by Bloomberg, 19 predicted a hike and the rest forecast no change. Chairing his final policy meeting before his five-year term ends, Governor Agus Martowardojo delivered on a pledge to act "pre-emptively" to restore confidence in financial markets as foreign investors dumped bonds and stocks and the currency slumped to a 31-month low against the dollar. Emerging markets from Argentina to the Philippines are being roiled by a stronger dollar and rising U.S. interest rates, prompting policy makers to raise borrowing costs. (Source: Bloomberg)
Japan: Inflation slows amid rising calls for delay in BOJ exit. Bank of Japan's key inflation gauge slowed for a second straight month in April, underscoring the central bank's struggles to hit its 2 percent inflation target. Core consumer prices, which exclude fresh food, rose 0.7% YoY in April. Stripping out fresh food and energy, prices climbed 0.4% YoY. Overall prices rose 0.6% YoY. (Source: Bloomberg)
Australia: Unemployment rate edged higher in April as additions to the workforce outweighed new positions, underscoring continued labor-market slack that's leaving the nation's central bank side-lined. The jobless rate has failed to break lower through a strong patch of job growth because increasing participation is swelling the workforce. Employers added 22,600 roles last month, outpacing estimates for a 20,000 gain, yet unemployment rose 0.1 percentage point to 5.6% as the participation rate climbed to 65.6%. (Source: Bloomberg) | |
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Ahmad Zaki Resources: Lands MYR198m road construction jobs. The group has secured a two-and-a-half year construction job via its unit Ahmad Zaki Sdn Bhd to build roads and related works worth MYR197.96m from PNB Merdeka Ventures S/B. The contract will start on May 21. (Source:The Edge Financial Daily)
Cypark: To raise up to MYR64m via private placement.The group has proposed to raise up to MYR64.37m via a new share placement to third party investors to meet the working capital for its engineering, procurement, construction and commissioning of a 30-megawatt solar photovoltaic plant at Empangan Kelinchi, Negeri Sembilan.(Source:The Edge Financial Daily)
OCR: Teams up with Casa Bangsar for MYR700m project in Johor. OCR Group Bhd, through its wholly owned subsidiary, Junjung Simfoni S/B, today entered into a joint venture agreement with Casa Bangsar S/B for an integrated mixed development across 47.87 acres of land located in Tebrau, Johor, with a total gross development value (GDV) of MYR700m. (Source: The Sun Daily) | |
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