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| | | | | | | | | | | | | | | | Share Price: | MYR8.48 | Target Price: | MYR8.05 | Recommendation: | Hold | | |
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| | | Traffic growth normalizing | | MAHB's 3Q17 results look to be decent as total passenger traffic grew by 6.6% YoY and the higher yielding international passenger mix has increased by 2.7ppts YoY to 47.2%. We estimate a 3Q17 core net profit of about MYR72m (+175% YoY, +28% QoQ) — we now include perpetual sukuk as part of core net income and this cut MYR57m from our FY17-19 earnings forecasts. However, this has no bearing on our unchanged DCF-based target price of MYR8.05 (WACC: 9.7%, terminal growth: 2%). Maintain HOLD. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 3,870.2 | 4,172.8 | 4,613.7 | 4,920.5 | EBITDA | 1,342.0 | 1,709.6 | 1,982.3 | 2,079.1 | Core net profit | (114.9) | 35.8 | 346.4 | 387.8 | Core EPS (sen) | (7.2) | 2.2 | 20.9 | 23.4 | Core EPS growth (%) | nm | nm | 869.0 | 11.9 | Net DPS (sen) | 1.0 | 1.7 | 8.3 | 9.0 | Core P/E (x) | nm | 393.6 | 40.6 | 36.3 | P/BV (x) | 1.5 | 1.6 | 1.6 | 1.5 | Net dividend yield (%) | 0.1 | 0.2 | 1.0 | 1.1 | ROAE (%) | 0.5 | 0.8 | 4.6 | 4.9 | ROAA (%) | (0.5) | 0.2 | 1.6 | 1.9 | EV/EBITDA (x) | 10.1 | 8.2 | 9.0 | 8.2 | Net debt/equity (%) | 52.2 | 46.1 | 41.6 | 31.9 |
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| | | | | | | | | | | | Sunway (SWB MK)
by Wei Sum Wong |
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| | | | | Share Price: | MYR1.70 | Target Price: | MYR1.84 | Recommendation: | Hold | | |
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| | | Construction and medical to buffer property | | Sunway is an indirect beneficiary of the Government's infrastructure project spending. Its 54%-owned SCG, recently won MYR2.2b worth of the KVLRT3 contract from Prasarana, providing a strong boost to FY18-19 earnings growth. Elsewhere, Sunway's hospital expansion is on track while it is still looking to acquire more TOD sites for its property development business. We raise our earnings forecasts by 1%-20%. Our new RNAV-TP is MYR1.84 (on 0.7x P/RNAV) post-bonus issue. HOLD. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 4,448.4 | 4,655.6 | 5,398.2 | 7,007.9 | EBITDA | 427.2 | 1,596.1 | 787.8 | 1,085.2 | Core net profit | 590.7 | 547.4 | 544.0 | 662.0 | Core EPS (sen) | 14.4 | 12.6 | 11.2 | 13.6 | Core EPS growth (%) | (1.6) | (12.5) | (11.3) | 21.7 | Net DPS (sen) | 17.0 | 5.7 | 5.0 | 6.1 | Core P/E (x) | 11.8 | 13.5 | 15.2 | 12.5 | P/BV (x) | 1.1 | 1.1 | 1.1 | 1.0 | Net dividend yield (%) | 10.0 | 3.3 | 3.0 | 3.6 | ROAE (%) | na | na | na | na | ROAA (%) | 4.1 | 3.2 | 2.9 | 3.5 | EV/EBITDA (x) | 21.7 | 6.1 | 16.7 | 13.1 | Net debt/equity (%) | 45.2 | 40.5 | 48.7 | 57.8 |
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| | | | | | MACRO RESEARCH | | | | | | | BM TECHNOLOGY INDEX – Uptrend Extended
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI bucked the regional uptrend, ending 0.95pts lower at 1,754.37, led by declines in AXIATA, ASTRO and CIMB. Market breadth turned negative, with losers outpacing advancers by 487 to 404. A total of 3.2b shares worth MYR2.3b changed hands. Construction stocks will likely steal the limelight today following the award of several jobs related to MRT2. That said, sentiment would stay volatile ahead of Diwali holiday and China National Congress. | |
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| | | | | | | | Sustained positive momentum in remittances growth
by Suhaimi Ilias |
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| | | | | | The positive momentum in overseas Filipino workers' remittances (OFWR) continued in Aug 2017 as it rose +7.8% YoY to USD2.5b (July 2017: +7.1% YoY to USD2.3b). In local currency, it surged +17.5% YoY (July 2017: +15.3% YoY) amid softer PHP vs USD, which is supportive to private consumption. | |
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| | NEWS | | | Outside Malaysia:
U.K: London house prices are falling at their fastest pace since the aftermath of the financial crisis, confirming the British capital as the worst-performing part of a slowing market. Early data point to home values in London declining 2.7% YoY in September, the most since 2009, according to Acadata and LSL property Services. A 0.7% YoY fall in August marked the first negative reading since 2011 as sellers in some of the city's most expensive boroughs, including Westminster, Wandsworth and Hammersmith, were forced to cut prices. Outside of London and southeast England, the market appeared more buoyant, with prices on average rising in September by more than 3% YoY, though the pace of growth has been slowing since the end of 2016. (Source: Bloomberg)
U.K: Is said to see Brexit breakdown without EU compromise. Brexit negotiations are heading for a catastrophic breakdown unless the European Union signals this week that it will allow talks to move on to trade, according to a person familiar with the U.K. government's position. Without a clear sign that negotiations will progress to trade and transition arrangements by December at this week's summit of EU leaders, the entire Brexit process will be in danger of collapse -- and senior British ministers are losing faith in the EU's willingness to strike a deal, the person said. The warning came as a new draft of the European Council summit conclusions dealt a blow to British hopes of making progress. (Source: Bloomberg)
China: Factory prices jumped more than estimated, as domestic demand remained resilient and the government continued to reduce excess industrial capacity. Consumer price gains matched projections. The producer price index rose 6.9% YoY in September, versus a 6.3% YoY August reading. The manufacturing PPI sub-index climbed 7.3% YoY, the most in nine years. The consumer price index climbed 1.6% YoY, versus a prior reading of 1.8% YoY, the statistics bureau said. Aggressive cuts to capacity in industries like steel and cement, coupled with resilient demand, have contributed to factory inflation that's lasted longer than economists expected. (Source: Bloomberg)
Crude Oil: Holds gains as Iraq-Kurd fighting disrupts Kirkuk production. Oil held gains after Iraqi troops clashed with Kurdish forces, halting output from two fields. The Kurdish KAR Group stopped pumping crude at the Avana and Bai Hassan deposits after technicians failed to report for work and some security guards left amid the fighting, an official at the central government-run North Oil Co. said. Brent for December settlement was USD 57.82/bbl. (Source: Bloomberg) | |
| | | | | Other News:
WCT: Plans new placement exercise to raise up to MYR242m. The company, which raised MYR178m earlier this year by placing out its shares, proposed a new placement exercise on Monday to raise as much as MYR242.2m more. According to a filing with Bursa, the latest proposed placement involved the issuance of up to 140 million new shares, representing 10% of its issued share capital. The construction and property development group said the proceeds would be used for the group's additional working capital, part repayment of bank borrowings as well as the widening of its equity base. The final number of placement shares to be issued would depend on the then prevailing market price of WCT shares closer to the implementation of the placement and the demand from the potential placees to be identified. (source: The Star Online)
Ahmad Zaki: Lands MRT2 job worth MYR288.5m. The company secured an additional work package contract worth MYR288.5m to construct three elevated stations and associated works for the upcoming second mass rapid transit (MRT 2) line: Serdang Raya (South), Seri Kembangan and Universiti Putra Malaysia. Following the latest MRT 2 job, which is the company's second — its YTD contract wins have increased to MYR502.5m, pushing its current unbilled orderbook to MYR4b. (Source: The Edge Markets)
EITA Resources: Bagged contract to install lifts, escalators at MRT stations. The company has won a MYR69.83m contract from Mass Rapid Transit Corp Sdn Bhd to install 30 lifts and 77 escalators at four MRT sites. The construction, which is to be completed by April 2022, will involve part of Package V203 (Jinjang-Jalan Ipoh North Portal viaduct guideway), Packages V204 (Bandar Malaysia South Portal-Kampung Muhibbah viaduct gateway), V205 (Kampung Muhibbah-Serdang Raya viaduct gateway) and V206 (Serdang Raya-UPM viaduct gateway). (Source: The Edge Markets)
MyEG: Lands foreign worker repatriation job. The company has received a Letter of Appointment from the Malaysian Ministry of Home Affairs to undertake the voluntary repatriation of illegal foreign workers for the Immigration Department of Malaysia from Oct 10 to Dec 31, 2017. "The project has no fixed value as it is dependent on the number of foreign workers successfully repatriated," it said. The company did not disclose the value per worker, nor the number of workers it has targeted for the repatriation process. (Source: The Edge Markets) | |
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