MONEY MASTER

Downgrade to MARKET PERFORM from OUTPERFORM with a higher target price (TP) of RM9.38 We met up with SCIENTX?s management last week and came away feeling comforted as their expansion plans are well on track. As expected, the Group is focused on the expansion of its BOPP and PE plants, and longer term growth of stretch film plant in Arizona, US. All in, we maintain FY17-18E earnings. Downgrade to MARKET PERFORM (from OP) but increase TP to RM9.38 on a higher PE of 6.8x for our property segment. PE plant expansion at Ipoh to be completed by end CY17 . As part of expanding its consumer segment, SCIENTX is in the midst of completing capacity expansion at its PE plant in SGW Ipoh to 24,000MT p.a. by end CY17 (1HFY18), increasing total capacity for the PE segment to 84,000MT p.a. which is on track. BOPP plant focused on ramping up capacity.  The BOPP plants in Rawang and Pulau Indah currently have a total capacity of 60,000MT p.a. (as at Dec 2016) and will continue ...

Upgrade to OUTPERFORM with a higher target price (TP) to RM1.31 from RM1.23   Yesterday, HUAYANG announced that it will be acquiring another 20.1% stake in Magna Prima Bhd for a cash consideration of RM123.8m, effectively raising their stake to 30.9%, as part of their land banking strategy, of which we are mildly positive due to MAGNA’s strategic land banks in Klang Valley. No changes in FY17-18E earnings. Upgrade to OUTPERFORM with a higher Target Price of RM1.31 (from RM1.23) on a higher RNAV of RM3.05 with an unchanged discount factor of 57%. News.   Yesterday, HUAYANG announced that they will be acquiring another 20.1% stake in Magna Prima Bhd (MAGNA) for a cash consideration of RM123.8m - indicating RM1.85/share (same price as previous acquisition) effectively raising its stake to 30.9%. The acquisition will be funded through HUAYANG’s internally generated funds, and the exercise is expected to be completed by 2Q17 should there are no objections from its EG...

Reiterate MARKET PERFORM with an unchanged target price (TP) of RM9.50 SIME recently announced a tender invitation for the repurchase of its 2018 and 2023 sukuk totalling USD800.0m. Meanwhile, SPSETIA announced the acquisition of 342.5 acres land in Bangi from SIME’s 40%- owned associate Seriemas for RM447.6m. We are neutral on both developments, though we upgrade FY18E NP by 6% to reflect one-off gains. Maintain MARKET PERFORM with unchanged TP of RM9.50 based on SoP. Sukuk repurchase and associate’s land sale.  Sime Darby Berhad (SIME) recently invited eligible holders of its outstanding 2018 and 2023 sukuk to tender the respective sukuk (totaling USD800.0m) for repurchase. The company also announced a consent solicitation seeking the substitution of Sime Darby Plantation Sdn. Bhd. (Plantation) as the new obligor for the said sukuk, among other adjustments to the terms and conditions. Separately, SP Setia Berhad (SPSETIA) recently announced the acquisition of 342.5 ...

Trading BUY with a target price (TP) of RM1.52  We believe PRTASCO is an undervalued gem,  especially for its niche business specialising in roadwork maintenance, which provides a steady income stream, as most of its maintenance works are based on concessions awarded by state and federal governments. Projecting steady earnings growth of 13-3% for FY17-18E backed by both its existing and maintenance orderbooks, and we also like them for their decent dividend yield of 6.1% for FY17. TRADING BUY with a TP of RM1.52 based on 11x FY17E PER. Contractor with a niche.  PRTASCO is a well-established player in the construction industry where its forte is in road maintenance works on top of several business divisions (refer to business segments). Its road maintenance division made up 52% and 69% of FY15 revenue and PBT, respectively; while pre-tax margins are superior at an average of 10-13% compared to the conventional construction pre-tax margin that averag...

Not Rated stock with a fair value of RM1.54 INVESTMENT MERIT We are closing our position on TASCO. (Previous call:  Trading Buy ). While it may be poised for a recovery over the longer term, arising from its expansion plans, the current poor share price performance coupled with a stagnating earnings outlook in the short-to-medium term render limited upside to the stock. It is now a NOT RATED stock with a  fair value of  RM1.54. Poor share price performance.  We last highlighted TASCO in On Our Radar report series in May last year, with a Trading Buy call. However, its share price has plunged 27%, from RM2.06 (pre-adjustment: RM4.12) to close at RM1.50 last Friday, bogged down by a disappointing set of FY16 results, coming in at only 64% of our previous earnings projection on the core level (actual CNP of RM25.2m vs. previous projection of RM39.4m), arrived after stripping off RM5.4m gains on disposal of PPE. The poor results were mainly due ...

Maintain OUTPERFORM  with unchanged target price (TP) of R17.76 9M17 CNP came in within expectations. Absence of dividend was expected. No changes made to our earnings estimate. It remains as our most preferred name in the NBFI space given its: (i) resilient earnings prospects on healthy gross financing receivables growth of 8-9%, (ii) decent asset quality with NPL at low 2-3%, (iii) healthy CAR of c.19%, (iv) high ROE of >20% as well as (v) decent yields of 4.5-4.8%. Moreover, valuation is still undemanding at 8.0x FY18E PER. Maintain OP with an unchanged TP of RM17.76. Within expectations.  The group reported 3Q17 core net profit (CNP) of RM63.4m (+22% QoQ; +27% YoY), widening its 9M17 CNP to RM174.5m (+17% YoY) which made up 72% of both our and consensus full-year forecasts. Note that the group’s 4Q is the seasonally strongest quarter. As expected, no dividend was declared. We are expecting the group to declare a total net DPS of 64.0 sen for FY17. ...

Maintain perform with higher target price (TP) of RM4.03 1H17 net profit of RM25.7m (+67% YoY) came above our expectation (62% of forecast). DPS of 5.0 sen was declared, as expected. Strong and sustained performance in MLM surprised us positively, which also reduced the risk of other operating divisions. Hence, FY17E-FY18E earnings forecasts are raised by 12%-13%. TP lifted to RM4.03 but MP call maintained as valuation is not compelling enough to warrant an upgrade. Above expectation.  1H17 net profit of RM25.7m (+66.6% YoY) was above our expectation by matching 61.9% of our full-year forecast. Consensus comparison is not available as the stock is not widely tracked. The positive deviation can be attributed to the stronger- than-expected performance in MLM division. As expected, the Group declared DPS of 5.0 sen (vs. 1H16: 4.0 sen). YoY,  1H17 revenue surged 38.4% to RM178.4m mainly driven by impressive growth in MLM division (+62.7%) thanks to the ...

Maintain outperform with unchanged target price (TP) of RM7.31 AIRPORT?s Malaysia and Turkey?s passenger traffic growth of 5.8% and 5.3% YoY-YTD came in within our 6.0% and 7.0% targets, respectively. Total November passenger numbers (including ISG) registered growth of 7.3% YoY mainly driven by its Malaysian operations. We maintain our passenger growth estimates and make no changes to earnings estimates. Reiterate OUTPERFORM with unchanged TP of RM7.31. YTD passenger traffic growth.  Total passenger growth for Malaysian airports and ISG (Turkey) which were up 5.8% and 5.3%  YoY-YTD  came in within targets of 6.0% and 7.0%, respectively. AIRPORT?s total  November  passenger numbers (including ISG) registered growth of 7.3%  YoY,  mainly driven by its stronger Malaysian operations. Malaysian passenger traffic review.  In November, AIRPORT?s passengers in Malaysia increased 8.8% YoY. International and domestic passengers we...

Upgrade to outperform with unchanged target price (TP) of RM3.02 9M17 core PATAMI of RM482m came in within expectation, mainly underpinned by higher e-commerce and adex revenues. A third interim single-tier dividend of 3.0 sen was announced. Post-results, we have raised our FY17E/FY18E core PATAMI marginally after fine-tuning but keep our DCF- derived target price unchanged at RM3.02. Our stock rating on ASTRO, however, is raised to OUTPERFORM (from MARKET PERFORM previously) as the recent share price weakness provides great opportunity for bargain hunting. In Line.  9M17 core PATAMI of RM482m (4% YoY) came in within expectations at 76%/74% of our/consensus full-year estimates, mainly driven by higher performance in e-commerce and adex. Note that the normalised PATAMI excluded post-tax impact of unrealised forex loss of RM4.4m due to revaluation of M3B transponder lease liability. As expected, a third interim single-tier dividend of 3.0 sen was declared ...

Recommend BUY call with target price (TP) of RM0.28 DNEX is gradually widening its earnings base through acquisition of oil producing assets and OGPC, an oil and gas services provider, diversifying from its traditional bread and butter base in IT and e-services. The two-year extension of NSW contract allows DNEX to prolong its exclusivity on trade facilitation system while establishing new income stream from VEP contract. We recommend a TRADING BUY on DNEX with a Fair Value of RM0.28 based on 10x FY17E PER. Two-year extension of NSW.  DNEX has alleviated investors’ concern over its operation of core business, National Single Window (NSW), the trade facilitation system to expedite paperless custom clearance process with the successful two-year extension until September 2018 from the government. The service charge remains unchanged at 75.0 sen/kb for government agencies, 80.0 sen/kb for the private sector and RM5/successful application. This allows DNEX to prolo...

BUY recommendation with target price (TP) of RM3.78 INVESTMENT MERIT We are issuing a “Trading Buy” on NHFATT with a FV of RM3.78 based on 10.0x PE on FY17E earnings. The group is expanding its export base for both its manufacturing and trading segments, making them less vulnerable to the discouraging automotive market sentiment in the country. Margins are also expected to stabilise as the group has moved away from the gestation costs incurred to develop overseas arms. In the business of manufacturing and trading of replacement automotive parts.  NHFATT is involved in the manufacturing of REM metal and plastic automotive body parts (primarily focusing on Japanese marques), such as bumpers, doors, fenders, grilles, hoods and lamps. The group also trades third-party automotive parts, accessories and service items, such as engine oils and lubricants. Production costs on the manufacturing segment are exposed to USD rate fluctuations, where c.50% of raw materials are i...

Upgrade to outperform with an unchanged target price (TP) of RM2.54 9M16 CNP of RM278m was within expectations while sales surprised on the upside at RM1.15b (96% FY16E target). No dividends as expected. Being the only developer to enjoy pure exposure in KL while rolling out a pipeline of urbanbased affordable priced products will provide it an edge to generating stronger sales. Furthermore, this net cash developer offers an attractive yield of 6.3%. Upgrade to OUTPERFORM with  unchanged TP of  RM2.54. Sales beat expectations.  9M16 CNP of RM278m was within expectations at 75% of streets’ and 71% of our FY16E estimates. 9M16 sales was at RM1.15b (+62% YoY) which exceeded our expectations as it comes in at 96% of our FY16E target of RM1.20b; main drivers were United Point@Kepong, Sentul Point and Danau Kota. No dividends announced, as expected. Lower billings compensated by superior margins.  After stripping out its FV adjustments of RM55.5m, 3Q...

Maintain outperform recommendation with unchanged target price (TP) of RM7.33 AIRPORT’s Malaysian passenger traffic growth of 4.4% YoYYTD came in above our 3.0% target while its Turkey passenger growth of 5.9% YoY-YTD was below our 10.0% target. Total September passenger number (including ISG) registered growth of 8.6% YoY mainly driven by its Malaysian operation. No changes to our FY16-17E core earnings for now as we look to review our growth estimates after the October passenger traffic stats. Maintain OUTPERFORM with unchanged TP of RM7.33. YTD passenger traffic growth.  Total passenger growth for Malaysian airports and ISG (Turkey) was up 4.4% and 5.9% YoY-YTD,  respectively. While Malaysian passenger growth came in above our 3.0% target, ISG was below our 10.0% target. AIRPORT’s total  September  passenger numbers (including ISG) registered growth of 8.6%  YoY  mainly driven by its Malaysian operation due to an improved average load fa...