| 
| |
| |
| |
| | | | | | | | | | | | Sunway (SWB MK)
by Wei Sum Wong |
| |
| | | | | Share Price: | MYR1.51 | Target Price: | MYR1.99 | Recommendation: | Buy | | |
|
|
| | | Sales to pick up post-GE14 | | Sunway's 1Q18 net profit came in as expected but sales were below expectations on the lack of new launches in view of weak buying sentiment pre-GE14. As for its construction business, SCG has secured MYR542m of new jobs (including precast) YTD, lifting outstanding orderbook to MYR6.1b as at end-Mar 2018. We lower earnings forecasts by -0.4% to -4% following the cut in SCG's FY18-20 earnings forecasts. RNAV-TP is largely unchanged at MYR1.99 (-3sen; on 0.75x P/RNAV). BUY. | | |
|
| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 4,655.6 | 5,374.8 | 6,295.7 | 6,809.2 | EBITDA | 1,596.1 | 725.4 | 876.8 | 973.0 | Core net profit | 547.4 | 566.3 | 577.1 | 638.5 | Core FDEPS (sen) | 11.4 | 11.8 | 12.0 | 13.3 | Core FDEPS growth(%) | (16.0) | 3.4 | 1.9 | 10.6 | Net DPS (sen) | 5.7 | 6.0 | 5.4 | 6.0 | Core FD P/E (x) | 13.3 | 12.8 | 12.6 | 11.4 | P/BV (x) | 1.0 | 0.9 | 0.9 | 0.8 | Net dividend yield (%) | 3.8 | 4.0 | 3.6 | 4.0 | ROAE (%) | 8.4 | 8.4 | 7.2 | 7.6 | ROAA (%) | 3.2 | 2.9 | 2.8 | 3.0 | EV/EBITDA (x) | 6.1 | 16.9 | 13.6 | 12.4 | Net debt/equity (%) | 40.5 | 45.0 | 45.5 | 45.0 |
| |
| | | |
| | | | | | | | | | | | Share Price: | MYR2.12 | Target Price: | MYR2.25 | Recommendation: | Buy | | |
|
|
| | | Starting the year right | | 1Q18 earnings were in-line but 1Q18 dividends pleasantly surprised. Zero-rating of the GST and proposed re-introduction of fuel subsidies are positive for demand. Zero-rating the GST will also reduce direct cost and may accrete up to 11% to our EPS and DPS estimates and boost our TP to MYR2.50. Our earnings estimates, TP and call are unchanged for now. Other catalysts are:- (i) sharp reduction in tax penalty of MYR476.5m (MYR0.33/shr) and (ii) IPO/trade sale of 6%-owned U Mobile (Unlisted). | | |
|
| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,659.3 | 2,649.2 | 2,687.9 | 2,741.6 | EBITDA | 326.7 | 348.1 | 367.7 | 376.0 | Core net profit | 189.4 | 206.5 | 225.2 | 232.6 | Core EPS (sen) | 13.3 | 14.5 | 15.8 | 16.3 | Core EPS growth (%) | (16.3) | 9.0 | 9.1 | 3.3 | Net DPS (sen) | 13.0 | 11.0 | 13.0 | 13.0 | Core P/E (x) | 15.9 | 14.6 | 13.4 | 13.0 | P/BV (x) | 1.2 | 1.2 | 1.2 | 1.2 | Net dividend yield (%) | 6.1 | 5.2 | 6.1 | 6.1 | ROAE (%) | 7.8 | 8.4 | 9.0 | 9.1 | ROAA (%) | 5.2 | 5.8 | 6.4 | 6.6 | EV/EBITDA (x) | na | na | na | na | Net debt/equity (%) | 24.1 | 19.3 | 17.4 | 15.1 |
| |
| | | |
| | | | | | | | | | | | Share Price: | MYR1.10 | Target Price: | MYR1.25 | Recommendation: | Buy | | |
|
|
| | | Shutting Penang printing operations | | STAR will cease its printing operations at Star Northern Hub (SNH), Penang in Sep 2018. Although details are scant, we are constructive on this development as there are potential staff cost savings from staff redundancies that could buffer any further downside to earnings going forward. Our earnings estimates and SOP-TP of MYR1.25 are unchanged. Valuations are undemanding with STAR trading at 1x FY18E P/BV. We continue to like STAR as a value BUY and a potential take-over target. | | |
|
| | 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) | 11.6 | 13.4 | 17.1 | 15.6 | P/BV (x) | 0.7 | 0.9 | 1.0 | 1.0 | Net dividend yield (%) | 16.4 | 38.2 | 10.9 | 10.9 | 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 | 5.0 | 5.4 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
| |
| | | |
| | | | | | | | | | | | Share Price: | MYR8.70 | Target Price: | MYR8.60 | Recommendation: | Hold | | |
|
|
| | | 1Q18 lower on accounting accruals | | 1Q18's PATAMI of MYR1,065m (-18.2% YoY, +6.0% QoQ) was below expectations due to a MYR176m charge due to under-accrual of past manpower-related expenses. Notwithstanding this, result was in-line. We trim our FY18E earnings by 3% to factor in the weaker 1Q18; FY19-20E earnings are unchanged. TP has been trimmed to MYR8.60 (-5sen) pegged to unchanged 9x 2018 EV/EBITDA ― 10% premium to peer group average. Risk-reward is balanced at the current level; hence PCHEM is a HOLD. | | |
|
| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 13,860.0 | 17,407.0 | 17,602.6 | 17,879.1 | EBITDA | 5,291.0 | 6,618.0 | 6,514.0 | 7,200.1 | Core net profit | 3,183.0 | 4,192.0 | 4,117.7 | 4,708.6 | Core EPS (sen) | 39.8 | 52.4 | 51.5 | 58.9 | Core EPS growth (%) | 14.5 | 31.7 | (1.8) | 14.4 | Net DPS (sen) | 19.0 | 19.0 | 26.0 | 30.0 | Core P/E (x) | 21.9 | 16.6 | 16.9 | 14.8 | P/BV (x) | 2.6 | 2.5 | 2.3 | 2.1 | Net dividend yield (%) | 2.2 | 2.2 | 3.0 | 3.4 | ROAE (%) | 11.3 | 15.3 | 14.2 | 15.0 | ROAA (%) | 10.1 | 12.9 | 12.2 | 13.3 | EV/EBITDA (x) | 9.4 | 8.5 | 9.3 | 8.2 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
| |
| | | |
| | | | | | | | | | | | Share Price: | MYR33.40 | Target Price: | MYR31.75 | Recommendation: | Hold | | |
|
|
| | | Better from here on? | | 1Q18 results were below expectations. While Pakatan Harapan GE14 manifesto on better enforcement efforts on illicit could benefit BAT in the medium to long term, much of the volume recovery hinges on execution, strong will and concerted effort of multiple government agencies to reduce illicit levels. We cut earnings forecasts and TP to MYR31.75 (-9%). BAT now trades at 19.6x CY19 PER, in line with its long-term mean of 19.5x. FY18E dividend yield of 4.3% to support share price. | | |
|
| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 3,756.4 | 3,002.3 | 2,809.6 | 3,061.7 | EBITDA | 929.9 | 654.9 | 577.0 | 658.7 | Core net profit | 675.1 | 522.4 | 423.2 | 486.5 | Core EPS (sen) | 236.4 | 183.0 | 148.2 | 170.4 | Core EPS growth (%) | (26.2) | (22.6) | (19.0) | 14.9 | Net DPS (sen) | 278.0 | 169.0 | 145.2 | 166.9 | Core P/E (x) | 14.1 | 18.3 | 22.5 | 19.6 | P/BV (x) | 15.5 | 25.0 | 24.4 | 23.8 | Net dividend yield (%) | 8.3 | 5.1 | 4.3 | 5.0 | ROAE (%) | 124.4 | 99.0 | 109.5 | 122.9 | ROAA (%) | 56.2 | 46.6 | 40.5 | 45.8 | EV/EBITDA (x) | 13.8 | 18.0 | 17.1 | 15.0 | Net debt/equity (%) | 15.8 | 95.9 | 86.5 | 87.3 |
| |
| | | |
| | SECTOR RESEARCH | | | | | | Durian – truly the king of fruits | NEUTRAL
by Chee Ting Ong |
|
|
|
| | | | | | We recently hosted a Durian Plantation Day in KL as we witness growing interest on large-scale durian farming in Malaysia. The euphoria is understandable as Musang King durian estate is said to generate 9x more in revenue than oil palm at MYR150,000 per hectare (oil palm: MYR17,500) in 2017. Durian may overtake oil palm as the preferred choice of new investment in the future. We maintain our NEUTRAL call on the sector with selected BUYs on IOI, FR, GENP, SOP, and BAL. | |
| |
| | | | |
|
| | MACRO RESEARCH | | | | | | Dow Jones Industrial Average Index: The Shape of Bull
by Nik Ihsan Raja Abdullah |
|
|
|
| | | | | | Profit taking in the afternoon session dragged FBMKLCI 0.92pts lower at 1,853.58 yesterday. Decliners were led by TM, CIMB and GENM. Market breadth was mixed with gainers outpacing losers by 493 to 476. A total of 2.78b shares worth MYR3.05b changed hands. Volatility post GE14 has tapered off in recent days. This, together with continued strength in overnight US markets, could lend support to the local bourses. O&G stocks would be sought after on firmer oil price. | |
| |
| | | | |
|
| NEWS | | | Outside Malaysia:
U.S: Americans are more worried that AI will hurt jobs than help them. A Brookings Institution survey offers fresh fodder for the debate, showing opinion is heavily tilted against AI at a time companies are increasingly looking for ways to include it in everything they do. Some 38% of respondents said AI would reduce jobs, while only 12% thought it would create positions, according to an online national survey of 1,535 adult internet users conducted May 9-11 by the Washington-based think tank. Men were more likely than women to say AI would cause job losses. By age, the group most concerned about that possibility was 25-to-34-year-olds: Just 10% said the employment impact would be positive and more than four times that expected a negative fallout. (Source: Bloomberg)
China: Said to consider ending birth limits as soon as 2018. China is planning to scrap all limits on the number of children a family can have, according to people familiar with the matter, in what would be a historic end to a policy that spurred countless human-rights abuses and left the world's second-largest economy short of workers. The State Council, China's cabinet, has commissioned research on the repercussions of ending the country's roughly four-decade-old policy and intends to enact the change nationwide, said the people, who asked not to be named while discussing government deliberations. The leadership wants to reduce the pace of aging in China's population and remove a source of international criticism, one of the people said. Proposals under discussion would replace the population- control policy with one called "independent fertility," allowing people to decide how many children to have, the person said. The decision could be made as soon as the fourth quarter, the second person said, adding that the announcement might also be pushed into 2019. (Source: Bloomberg)
Indonesia: Central bank pledged to continue its intervention in the currency and bonds market to ease volatility, and said it will boost forex liquidity as the rupiah slumped to a fresh 31-month low. Bank Indonesia will hold three forex swap auctions to ensure sufficient liquidity in the interbank market, Nanang Hendarsah, executive director for monetary management, said. The bank, which usually holds two auctions a week, has been holding additional sales to ensure the market is well supplied, he said. Bank Indonesia's pledge last week to add to its first interest rate hike since 2014 to restore market stability hasn't stopped foreign investors from dumping the nation's currency, bonds and stocks. Global funds have dumped a net USD2.3b of Indonesian sovereign bonds since the end of March, set for the biggest quarterly withdrawal based on data compiled from 2009, and pulled USD1.26b from the shares markets. The benchmark bond yield surged to its highest in 14 months on Monday, while the benchmark stock index extended its decline to more than 9% this year. (Source: Bloomberg) | |
| | | | | :
Maybank: Grab inks tie-up with Maybank for e-payment. Grab, which has morphed into a fintech platform, said on Monday with the partnership and support of Maybank, its consumers will also be able to eventually use their mobile wallet at Maybank's key merchants.Hence, GrabPay mobile wallet will not only be able to be used at GrabPay merchants, but also at more merchants. Maybank customers can eventually opt to paying via Maybank QRPay at GrabPay merchants. (Source: The Star)
Hengyuan Refining: 1Q net profit down 68.9% on lower crack spread. The group saw its net profit fall 68.94% to MYR86.81m in the first quarter ended March 31, 2018 from MYR279.49m a year ago as margins fell due to a lower crack spread for motor gas. The decline in the crack spread, which measures the pricing difference between a barrel of crude oil and the petroleum products refined from it, occurred amidst increasing crude prices and high inventory in the region, the refiner noted. (Source: The Edge Financial Daily)
MRCB: Hopes to resolve EDL toll issue by year-end. The group will work with the new government to resolve the termination of the Johor Bahru Eastern Dispersal Link's concession by year-end. Executive director Mohd Imran Mohamad Salim said the new government is keen to abolish or reduce tolls and MRCB is at the forefront of that, having already abolished the toll entirely. The firm stopped collecting the MYR6.80 per trip toll since the start of 2018. He said prior to the general election, MRCB and the previous government had agreed upon a mutual termination and MRCB had surrendered the highway, which is already a non-toll road being operated by the Public Works Department (JKR). (Source: The Sun Daily) | |
| |
| | | | | Disclaimer | | | This email and its attachment(s) are confidential and are intended solely for the use of the individual to whom it is addressed. Any views or opinions expressed are solely those of the author and do not necessarily represent those of Maybank Kim Eng or any of its affiliates. Intended recipients of this email are prohibited from disseminating, forwarding, printing and/or copying its contents. If you are not the intended recipient of this email, you are strictly prohibited to take any action based upon them, which also includes dissemination, forwarding, printing and copying of its contents. Maybank Kim Eng Research sent this e-mail to you because your Notification Preferences indicate that you want to receive information about our daily research reports. If you wish to read Disclaimer in details, please click HERE. | | | To unsubscribe or change preference settings, please contact your representative HERE. | | | | |
|
|
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.