Amcorp Properties - Bursa Market Place

Transcription

25 September 2015
A jewel among the gems
Initiate Coverage
Amcorp Properties (AmProp) is a niche property developer that will
likely see its London and Tokyo property projects driving its robust
64% earnings CAGR over FY15-17E. Meanwhile, its recurring income
stream both from its investment properties (Amcorp Trade Centre)
and renewable energy projects (solar and hydro with a combined
16MW) is growing. At a 2016E PE of 4.9x, we believe AmProp is
significantly undervalued and ripe for a re-rating given: 1) its
improved earnings profile; 2) upside to valuations on greater stock
awareness; and 3) dividend upside potential in view of non-core
asset disposal. Initiate coverage with a BUY (upside potential 88%).
Amcorp
Properties
APRO MK
Sector: Properties
RM0.815 @ 23 September 2015
BUY
Pay day for AmProp’s premium London projects
Since 2009, AmProp has been investing in the London property market
taking advantage of depressed prices and the weak Pound sterling, post
the Global Financial Crisis. From a mere investor, AmProp has ventured
into property development (together with strategic partners) with more
sizeable projects both in London and Tokyo. Currently, the unbilled sales
from its London projects amount to a substantial £386m (or £79m for
AmProp’ portion), set to be recognized over FY17E-FY18E.
Upside: 88%
Price Target: RM1.53
Previous Target: n/a
(RM)
1.60
1.40
1.20
1.00
0.80
Quantum earnings leap – 3-year net profit CAGR of 64%
We believe AmProp’s earnings from FY16E are set for a quantum leap as
contribution from its overseas property projects kick in. We project FY17EFY18E earnings to jump between 31%-49% and achieve a 3-year core
earnings CAGR of 64%. For 1QFY16, AmProp has already recorded a net
profit RM57m, exceeding its full year FY15 earnings. For FY16E, 75% of
group earnings will be derived from London, while contribution from
overseas projects should jump to 88-91% over FY17E-18E.
Initiate coverage with a BUY and TP of RM1.53 (88% upside potential)
We initiate coverage on AmProp with a BUY rating and a SOP derived TP
of RM1.53. On the whole, we like AmProp for its: 1) stand-out 3-year
earnings CAGR of 64%; 2) attractive valuations (4.9x 2016E EPS) and
dividend yields of 4%-8%; 3) growing recurring income base; 4) potential
for disposal of non-core assets; and 5) forward-looking management team.
Backed by a cash/share of RM0.49 and management’s active stock
buyback programme, we believe that AmProp is significantly undervalued.
Earnings & Valuation Summary
FYE 31 Mar
Revenue (RMm)
EBITDA (RMm)
Pretax profit (RMm)
Net profit (RMm)
EPS (sen)
PER (x)
Core net profit (RMm)
Core EPS (sen)
Core EPS growth (%)
Core PER (x)
Net DPS (sen)
Dividend Yield (%)
EV/EBITDA (x)
2014
170.2
10.7
153.7
171.3
29.4
2.8
40.1
6.9
(58.9)
11.8
25.0
30.7
47.6
2015
173.6
50.3
41.2
35.5
5.9
13.7
35.5
5.9
(13.6)
13.7
3.0
3.7
10.8
Chg in EPS (%)
Affin/Consensus (x)
2016E
170.8
100.9
86.6
80.0
13.4
6.1
80.0
13.4
125.1
6.1
3.3
4.1
3.3
2017E
136.2
34.8
110.8
104.8
17.6
4.6
104.8
17.6
31.1
4.6
4.4
5.4
9.5
2018E
136.7
36.0
163.0
156.4
26.2
3.1
156.4
26.2
49.3
3.1
6.5
8.0
9.4
-
-
-
0.60
0.40
0.20
0.00
Sep-12
Mar-13
Sep-13
Mar-14
Sep-14
Mar-15
Sep-15
Price Performance
Absolute
Rel to KLCI
1M
5.2%
2.7%
3M
-7.9%
-1.4%
12M
-38.3%
-29.6%
Stock Data
Issued shares (m)
Mkt cap (RMm)/(US$m)
Avg daily vol - 6mth (m)
52-wk range (RM)
Est free float
BV per share (RM)
P/BV (x)
Net cash/ (debt) (RMm) (1Q16)
ROE (2016E)
Derivatives
Shariah Compliant
597.1
486.6/110.4
0.2
0.68-1.36
28%
1.71
0.48
230.3
8.1%
Nil
Yes
Key Shareholders
Amcorp Group
71.8%
Source: Affin, Bloomberg
Kevin Low
(603) 2146 7479
[email protected]
Source: Company, Affin Hwang estimates
Affin Hwang Investment Bank Bhd (14389-U)
(Formerly known as HwangDBS Investment Bank Bhd)
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25 September 2015
Key investment highlights
London projects a near term earnings catalyst
Not a new kid on the block
AmProp is no new kid on the block when it comes to property investment
th
and development overseas. 2015 marks the 6 year that AmProp has
been developing properties overseas. In fact, AmProp was also among the
earliest local listed developers to actively participate in the London
property market, taking advantage of depressed property prices and the
weak Pound sterling, post the Global Financial Crisis in 2009.
Successful track record, project ROEs of up to 60%
To-date, AmProp has completed and sold 4 London projects, namely
Eastbourne Terrace, 101 Lexham Gardens, 99 Baker Street and 4B
Merchant Square for a total of £172.2m and netted a gain on disposal of
£33.8m. To-date, the ROEs for the respective projects have ranged from
23%-60%.
Fig 1: Completed London projects (year of acquisition)
Source: Company data, Affin Hwang
Niche high end projects to spur FY16E-17E earnings
We expect the next wave of earnings contribution from London to be
derived from its sizeable Burlington Gate (25% stake) and Campden Hill
(16.7% stake) projects, which have a combined GDV of £864m. The above
projects are located in the prestigious vicinity of Mayfair and Kensington
respectively, and are thus targeted at the higher-end segment of the
London residential property market.
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25 September 2015
Fig 2: Burlington project
Fig 3: Campden Hill project
Demand in the high end segment remains robust
The number of units available are limited (42 units for Burlington Gate and
72 units for Campden Hill) and the selling price are steep for both projects.
Average prices range from between >£3,700/sf, which are reflective of the
prestigious nature of these projects. Nevertheless, take up rate has been
encouraging – >80% for Burlington Gate and >30% for Campden Hill.
Strong partnership and location ensures project success
We are of the view that take-up for Campden Hill will improve as
construction progresses, as ground work currently stands at only 10%. On
the whole, we are not overly concerned given its locality and strong
partners which include Hotel Properties Limited (50%), Native Land
(16.6%) and Grosvenor (16.7%).
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25 September 2015
Exciting London product pipeline
Bankside Quarter is largest overseas project to-date
AmProp’s largest overseas property venture to-date is its Bankside
Quarter project, which is located at Southbank, in the vicinity of the South
End of the Blackfriar’s bridge in Central London, also conveniently located
at the opposite end of the City of London. While take-up of residential
properties within the price range of between £1200-£1600sf has been soft
of late, we are cognisant that this is a long term project and only expected
to be completed in >3 years.
Fig 4: Bankside Quarter
GDV of £1.1bn for Bankside Quarter
Planning permission has been granted for the development of 5 residential
buildings, 4 state-of-the art office buildings and associated retail and
leisure for a total build-up of 898k sf and an expected GDV of £1.1bn.
Based on an estimated net margin of 16% and AmProp’s 30% stake in the
project, we estimate contribution to the tune of RM317m over the
completion period of between 2019- 2022.
Fig 5: Bankside Quarter artist impression
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25 September 2015
Demand for Bankside Quarter should be exciting
Unlike other developments that are of fairly massive scale, Bankside
Quarters is more unique in the sense that it is relatively smaller in scale
and more quaint (489 residential units). Furthermore, we think that
Bankside Quarters could do well because of its proximity to Southbank
which has been recognized as one of central London’s leading cultural
hubs, and also home to famous institutions including the Royal Festival
Hall, Tate Modern and National Theatre.
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25 September 2015
Targeting Tokyo on same formula
Maiden Tokyo project in upscale Shibuya
Similar to its London strategy, AmProp has entered the Tokyo residential
property market targeting prime locations and with strong partners.
AmProp has entered into a joint venture with Grosvenor Asia Pacific Ltd
and Nan Fung, a renowned Hong Kong property developer, to co-invest in
a portfolio of high-end residential real estate development projects and
commercial value-add projects in Tokyo. This JV is in the midst of making
its third investment since its inception in 2014.
Its maiden foray into Tokyo in 2014 was made with the acquisition of a 4storey apartment block in Shibuya. Forest Nanpeidai, a 52 unit freehold
apartment block with a net rentable area of 62,046 sf is strategically
located within 1 km from Shibuya station, one of the busiest stations on the
Yamanote line and within one of the prime commercial districts of Tokyo.
This prime project is expected to generate a GDV of ¥10.6bn (RM328m)
with sales expected to commence by late 2015.
Fig 6: Centrality located Shibuya project
The other property consists of 62 apartments located in Roppongi, Tokyo,
with a net rentable area of 21,130 sf and an expected GDV of ¥3.6bn
(approximately RM108m). The area is a premium location next to the
prominent Roponggi Hills development, one of Japan’s largest integrated
developments and home to many embassies and a large expatriate
community.
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25 September 2015
Fig 7: Court Annex Roponggi
Fig 8: Forest Nanpeidai
In the midst of acquiring Concieria, Shinjuku
AmProp and its partners are in the midst of acquiring its third property, in
Shinjuku, with a similar objective. We understand that the project will have
a GDV of ¥3.7bn (RM115m). Given the strategic location of these
upcoming projects, and strong demand for such projects, we are of the
view that AmProp’s proven strategy and formula would be successful.
Fig 9: Concieria, Shinjuku redevelopment
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25 September 2015
Tier-1 partners reduces risk of newer projects
From UK based partners…
Initially, AmProp invested in London through small exposures but largely
on its own. Most of these projects were for investment purposes with an
initial outlay of between £7m-£50m. However, over time, with improved
confidence, it scaled up to larger redevelopment property projects. In the
more recent years, AmProp sought strategic partners to ensure its project
success. Thus far, this strategy has worked out well, with the delivery of
the £65m Pavilion D, Neo Bankside project. AmProp’s JV partners in
London include UK based Grosvenor and Native Land, and Singapore
listed Hotel Properties Limited.
…to sovereign wealth funds
For its future project at Bankside Quarter, AmProp has an even stronger
and more credible partner like sovereign fund, Temasek Holdings of
Singapore (30% stake). Its other partners for Bankside Quarter include
HPL (50% stake) and Native Land (10%). In Tokyo, AmProp formed a joint
venture in April 2014 with Grosvenor Asia and Nan Fung Group with an
investment outlay of US$50m for a 38.5% stake in the JV. The JV’s
objective is to invest in a portfolio of high-end residential real estate
development projects and commercial value-add projects in Tokyo.
Fig 10: Project partners in UK
Fig 11: Project partners in Japan
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25 September 2015
RM1.6bn GDV from local property projects
Local projects centred on Sibu and Shah Alam
AmProp has RM1.6bn worth of property launches locally at Kayangan
Heights in Shah Alam (RM600m GDV) and in Sibu Jaya, Sarawak
(RM1bn). Kayangan Heights is a premium residential enclave and located
in a rapidly expanding enclave of Section U9, Shah Alam in Selangor. The
development is easily accessible via major highways.
Working with the state government in Sibu
In Sibu, AmProp is working in collaboration with the Sarawak state
government (40% stake) to develop a 1,200 acre (650 acres remaining)
township. Strategically located 1 km away from the Sibu Airport, the Sibu
Jaya development is a self-contained mixed development township. We
think the key catalyst for its Sibu development is its strategically located
township which is located along the Pan Borneo Highway. Upgrading
works for the Pan Borneo Highway, which involves single-carriageway into
a dual-carriageway is underway and being carried out at a cost of
RM27bn.
Fig 12: Kayangan Heights, Shah Alam
Fig 13: Sibu Jaya township
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25 September 2015
Growing recurring income base
12% of FY15 revenue was from rental income
In FY15, about 12% of revenue was derived from rental income. This was
derived from its investment property, predominantly from its property
located in Petaling Jaya, Amcorp Mall - Amcorp Trade Centre (AMTC) and
4B Merchant Square (which was subsequently disposed in June 2015).
AMTC comprises of a 5-storey retail mall known as Amcorp Mall, two 18storey office towers namely Amcorp Tower and PJ Tower and a 27-storey
tower block, Menara Melawangi, which holds business and residential
serviced suites. In short, AmProp owns approximately 188,600sf of net
lettable area in AMTC (out of a total of 400,000sf). With nearly full
occupancy and average rental rates of RM3.50/sf and coupled with car
parks, we estimate that AmProp’s recurring rental income would be around
RM10m/annum.
Fig 14: Location of Amcorp Mall and Amcorp Trade Centre
Renewable energy complements recurring earnings stream
On a separate but related note, AmProp first ventured into the generation
of renewable energy in 2009 with the completion of its Sg. Perting 4MW
mini-hydro power project in Bentong, Pahang. As at end FY15, AmProp
generated 16.25MW of energy both from hydro (6MW) and solar
(10.25MW) which is fully taken up by Tenaga Nasional (TNB MK, Hold;
RM:12.18) based on a feed-in tariff over a concession period of 21 years
(earliest expiry is in 2034).
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25 September 2015
Fig 15: Sg Perting Hydro Plant
Fig 16: Gemas 10.25MW solar farm
Renewable energy capacity to double by 2018
Management is targeting to grow its generation capacity by a further
30MW by 2018, which should help the group generate steady and stable
revenue of approximately RM50-60m/annum from the renewable energy
segment alone.
Fig 17: Renewable energy capacity to reach 46MW by 2018
Source: Company data
Strong management team
In our view, AmProp’s overseas success can be attributed to the group’s
founder and major shareholder, Tan Sri Azman Hashim. With a strong
management team in place together with Tan Sri’s guidance and
stewardship, we believe that the group will continue to identify strategic
opportunities and enhance shareholder wealth.
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25 September 2015
Earnings Outlook
Attractive earnings CAGR of 64% over FY15-18E
We project a strong 3-year forward core earnings CAGR of 64% for
AmProp. The stand-out growth for the group is largely underpinned by the
completion and thus recognition of earnings from its London property
projects namely Campden Hill (£593m GDV) and Burlington Gate (£271m
GDV) over FY17E-FY18E.
Fig 18: Property GDV of RM4.4bn
Projects
Developm't
Period
Project GDV
(RMm)
Stake
(%)
10 years
10 years
600
1,000
100%
60%
600
600
2012 - 2017
2013 - 2017
2016 - 2021
1,627
3,559
6,600
25%
17%
30%
407
593
1,980
Japan
Forest Nanpeidai, Tokyo
2015-2017
Court Annex Roppongi, Tokyo
2015-2017
Concieria Nishi-Shinjuku Tower's West, Tokyo 2016-2017
329
112
115
39%
39%
39%
127
43
44
Malaysia
Kayangan Heights, Selangor
Sibu Jaya, Sarawak
United Kingdom
Burlington Gate, London
Campden Hill, London
Bankside Quarters, London
Total GDV
AmProp's
GDV (RMm)
4,394
…led by a surge in JV contribution
Both the relatively large scale projects are expected to be completed by
November 2016 (Campden Hill) and March 2017 (Burlington Gate),
providing a strong profit contribution over FY17-18E for the group. We
have assumed net margins of between 18%-24% for both these projects
and thus forecast contribution from these JVs to jump to RM93m in FY17E
and RM143m FY18E, from RM6m in FY16E. As take up rates for both
projects are already comfortable at >30% and >80% respectively, this
provides us high earnings visibility over the next 2 financial years.
Fig 19: Strong 3-year earnings CAGR of 64%
Revenue
RMm
Core Profit
3-year earnings CAGR of
64% driven by London
and Tokyo projects
200
180
160
140
120
100
80
60
40
20
0
FY14
FY15
FY16E
FY17E
FY18E
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25 September 2015
FY16 earnings to jump 125% yoy
In 1QFY16, AmProp has already recorded a net profit of RM57m,
exceeding the full year 2015 net profit of RM35.5m. This was fueled by a
gain on disposal of RM57m, following the sale of 4B Merchant Square in
London for £59.2m. On the whole, we project AmProp to achieve a core
profit of RM80m (+125% yoy) in FY16E.
Fig 20: Improved profitability and upswing over FY16E-FY18E
RMm
180
Net Profit
Net margins
160
140%
120%
140
100%
120
100
80%
80
60%
60
40%
40
20%
20
0
0%
FY14
FY15
FY16E
FY17E
FY18E
71% of FY16E earnings achieved in 1QFY16
1QFY16 net earnings accounts for 71% of our FY16E full year forecast.
For the remainder of the financial year, we expect contribution from Sibu to
drive local property earnings, apart from rental income from its Amcorp
Trade Centre. Other stable earnings generators for AmProp are its
contracting and engineering division. 51% owned Blue Star, which is
involved in solutions for air-conditioning systems has an unbilled orderbook
of RM76m. However, contribution from its renewable energy division
should remain relatively small in FY16E.
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25 September 2015
Valuation and recommendation
Initiate coverage with a BUY and TP of RM1.53 (88% upside potential)
We initiate coverage on AmProp with a BUY rating and a SOP derived 12month TP of RM1.53. Stock is currently trading at 4.9x 2016E EPS and is
backed by cash/share of RM0.49. On the whole, we like AmProp for its: 1)
stand-out 3-year earnings CAGR of 64%; 2) attractive valuations (4.9x
2016E EPS) and dividend yields of 4%-8%; 3) growing recurring income
base from its renewable energy projects; 4) potential for disposal of noncore assets (hotel operations in Bangi and Vietnam among others); and 5)
strong management team.
Fig 21: Sum-of-Parts valuation
Projects
Type
Location
Est. GDV
(RM m)
Developm't
Period
Stake
(%)
Kayangan Heights, Shah Alam
Sibu Jaya, Sarawak
Residential
Residential
London
Burlington Gate
Campden Hill
Surplus NPV
(RMm)
Shah Alam
Sibu
600
1,000
10 years
10 years
100%
60%
20.8
69.6
Residential
Residential
Mayfair
Holland Park
1,627
3,559
2012 - 2017
2013 - 2017
25%
17%
55.6
86.2
Japan
Forest Nanpeidai
Japan - Court Annex Roppongi
Concieria Nishi-Shinjuku Tower's West
Residential
Residential
Retail/Office
Shibuya
Roppongi
Shinjuku
329
112
115
2015-2017
2015-2017
2016-2017
39%
39%
39%
17.5
15.4
15.9
Future development - over 3 years
UK - Bankside Quarters
Mixed
Bankside
6,600
2016 - 2021
30%
195.3
Under / Upcoming Development
Total surplus property NPV
Shareholders' fund @ 31 Mar 2015
RNAV for property division
RNAV based on a 30% discount
476.3
961.1
1,437.4
1,006.2
Renewable energy
Projects
Type
Gemas, Negeri Sembilan
Sg Perting, Bentong
Solar
Hydro
Installed
Concession
Capacity (MW) Period (years)
10.25
21
6.00
21
Total Renewable Energy NPV
Total Sum-of-Parts
Shares base (m)
Preference shares (m) *
Enlarged share base (m)
Sum-of Parts
* (convertible at a ratio of 2 Prefence share to 1 AmProp share)
Stake
(%)
100%
100%
NPV
(RMm)
43.1
56.8
100.0
1,106.2
597.1
255.5
724.8
1.53
Sum-of-parts value of RM1.53
We estimate AmProp’s RNAV for its property segment at RM476m based
on a DCF valuation for its property development projects (based on a
WACC of 8.2% derived from a debt-equity ratio of 35%:65%, a cost of
equity of 10% and a cost of debt of 6%). At a 30% discount (similar to the
discount applied to other local listed developers), we arrive at a RNAV of
RM1bn for its property division. The renewable segment generates a value
of RM100m, leading to our Sum-of-parts value of RM1.1bn.
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25 September 2015
Active share buyback programme
There is a share buyback programme in place, and management has been
accumulating shares at these levels, which further reinforces our view that
the stock is undervalued. Note that AmProp is backed by a cash per share
of RM0.49 and a book value of RM1.61 as at end FY15. Also, based on a
payout ratio of 25%, dividend yields are appealing at 4%-8% over FY16E18E.
Fig 22: Backed by strong cash/share of RM0.49
Fig 23: Appealing dividend yield of 4-8% over FY16-18E
Historically, stock has traded at depressed valuations
Apart from its poor stock liquidity, we think that AmProp has largely
remained out of the radar of investors primarily due to its volatile earnings
in the past. However, with the strong and consistent earnings growth over
FY16-18E, we think that stock is ripe for a re-rating.
Fig 24: Traded at depressed PE multiples
Fig 25: P/BV of 0.4x
(
(x)
20
18
(x)
PE Ratio
Mean
+1SD
-1SD
PBV Ratio
Mean
+1SD
-1SD
0.8
16
0.7
14
0.6
12
10
0.9
+1SD: 9.7x
Avg: 0.4x
0.4
8
6
+1SD: 0.5x
0.5
Avg: 5.5x
0.3
0.2
4
2
-1SD: 1.3x
0
Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15
-1SD: 0.3x
0.1
0.0
Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15
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25 September 2015
Risks
Key downside risk
This would include: 1) a slowdown in property demand both locally and
overseas. Although the latter segment targets the high end property
segment, we think a sharp and prolonged global economic downturn will
have a detrimental effect on sales; 2) a soured relationship with its JV
partners; and 3) poor execution of property projects.
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25 September 2015
Company Background
Background
AmProp’s business activities can be broadly classified under property
development and investment and engineering. As at FY15, 48% of the
group’s revenue was derived from its property division, 31% from its
contracting and engineering unit. The remainder 21% of revenue was
generated from property rental income and also from its renewable energy
business.
Fig 26: Corporate structure
Properties
London
Japan
Bankside Quarter
30%
Campden Hill
16.7%
Forest Nanpeidai,
Shibuya-ku 38.5%
Burlington gate
25%
Neo Bankside 75%
Court Annex,
Roppongi 38.5%
Renewable Energy
Malaysia
Solar
Gemas 10.25MW
100%
Contracting
Hydro
Perting (6MW)
100%
AMBCT 100%
Blue Star M&E 51%
Liang (20MW)
100%
Conciera Nishi
Shinjuku Tower's
West 38.5%
An established property developer and more
AmProp is not only an established developer in the country, but an
investor and developer overseas. In Malaysia, AmProp is the developer of
award winning on-going projects such as Kayangan Heights in Shah Alam,
and Sibu Jaya in Sarawak.
Kayangan Heights is an exclusive high-end, low-density residential
bungalow development that sprawls over 400 acres of pristine forestland,
and is located within the fast-growing enclave of Section U9, Shah Alam in
Selangor. This project was awarded the Excellence Award by the Institute
of Landscape Architects Malaysia (“ILAM”) under the Property Developer
Awards in Landscape Planning & Development Category.
The Sibu Jaya township spans across a massive 1,200 acres. Sibu Jaya’s
Pearl Avenue Residential Homes was nominated for the Best Residential
Development Award at the South East Asia Property Awards.
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25 September 2015
AmProp made its first overseas debut in 2009 with the acquisition of
interests in two premier office buildings in Paddington known as 40/50
Eastbourne Terrace. In 2015, Amprop entered the Japanese real estate
through its maiden project, Forest Nanpeidai, which was immediately
followed by Court Annex, Roppongi, both projects centrally located in
Tokyo.
Engineering division
AmProp’s engineering division includes 51% owned Blue Star M&E
Engineering. Blue Star designs, engineers and executes central airconditioning cooling solutions for offices, hospitals, hotels, pharmaceutical
facilities and commercial complexes by combining a wide range of chillers
with air handling units and fan coil units, integrating them into a total
complete system. AmProp through AMBC Transmision is also a leading
contractor capable of handling substation and transmission line projects
which include design, procurement, construction and project management
of substation and transmission lines ranging from 11kV to 500kV.
Key shareholders
The controlling shareholder for AmProp is Amcorp Group which owns
71.28%, and ultimately owned by Tan Sri Azman Hashim.
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25 September 2015
AmProp – FINANCIAL SUMMARY
Profit & Loss Statement
Key Financial Ratios and Margins
FYE Mar (RMm)
Total revenue
2014
170
2015
174
Operating expenses
2016E
171
2017E
136
2018E
137
FYE Mar (RMm)
Growth
2014
2015
2016E
2017E
(2)
(20)
2018E
(159)
(123)
(70)
(101)
(101)
Revenue (%)
(2)
2
EBITDA
11
50
101
35
36
EBITDA (%)
(79)
370
101
(65)
0
3
Depreciation
(8)
(11)
(12)
(13)
(14)
Core net profit (%)
(59)
(11)
125
31
49
Amortisation
EBIT
Net interest income/(expense)
Associates/JV contribution
3
39
89
22
22
Profitability
(14)
(5)
(8)
(4)
(2)
EBITDA margin (%)
34
7
6
93
143
PBT margin (%)
6.3
29.0
59.1
25.6
26.3
90.3
23.7
50.7
81.3
119.2
114.4
EI
131
0
0
0
0
Net profit margin (%)
100.7
20.4
46.8
76.9
Pretax profit
154
41
87
111
163
Effective tax rate (%)
(11.8)
10.9
5.9
4.1
3.1
(5)
(1)
(5)
(1)
22.6
5.3
5.4
5.4
10.3
10.3
13.8
13.8
20.9
20.9
171
36
80
105
156
ROCE (%)
40
36
80
105
156
Dividend payout ratio (%)
2015
2016E
2017E
2018E
Tax
Minority interest
Net profit
Core net profit
18
(1)
(5)
(1)
(5)
(1)
Balance Sheet Statement
FYE Mar (RMm)
ROA (%)
Core ROE (%)
0.2
3.0
6.8
1.6
1.5
363.0
50.4
25.0
25.0
25.0
Liquidity
2014
Current ratio (x)
4.0
3.6
4.7
5.0
4.9
Fixed assets
133
137
135
132
128
Op. cash flow (RMm)
7.9
77.9
80.1
28.1
28.8
Other long term assets
686
749
594
687
829
Free cashflow (RMm)
(89.9)
66.5
70.1
18.1
18.8
Total non-current assets
819
886
729
819
957
FCF/share (sen)
(15.4)
11.2
11.7
3.0
3.1
Cash and equivalents
329
292
418
416
389
Stocks
55
35
34
27
28
Asset management
Debtors
69
39
39
33
33
Debtors turnover (days)
93
59
60
60
60
Other current assets
171
153
153
153
153
Stock turnover (days)
119
73
73
73
73
Total current assets
624
519
644
629
603
Creditors turnover (days)
131
109
110
110
110
Creditors
68
60
52
41
41
Short term borrowings
74
70
70
70
70
Capital structure
Other current liabilities
16
16
16
16
16
Net Gearing (%)
3.7
5.8
(15.4)
(14.1)
(12.0)
Total current liabilities
158
146
138
127
126
Interest Cover (x)
(0.7)
(3.2)
(5.9)
(2.4)
(2.5)
Long term borrowings
290
278
190
190
190
Other long term liabilities
4
4
4
4
4
Total long term liabilities
295
282
194
194
194
Shareholders' Funds
938
961
1023
1108
1238
Quarterly Profit & Loss
FYE Mar (RMm)
Revenue
FYE Mar (RMm)
2014
Pretax Profit
2Q15
3Q15
4Q15
1Q16
41
44
40
49
34
-26
-33
-28
-37
29
EBITDA
15
12
12
12
63
Depreciation
-3
-3
-3
-3
-3
EBIT
12
9
9
9
60
Operating expenses
Cash Flow Statement
1Q15
2015
2016E
2017E
2018E
154
41
87
111
163
Depreciation & amortisation
8
11
12
13
14
Net int income/(expense)
0
-1
-2
-1
-2
Working capital changes
4
55
(8)
1
(0)
Associates' contribution
1
0
0
0
0
(14)
(5)
17
14
14
Exceptional Items
Pretax profit
12
7
6
8
59
Tax
-1
-1
-1
-2
-1
0
-1
0
-1
-1
Net profit
12
6
5
6
57
Core net profit
12
6
5
6
57
Net inct income/(expense)
Cash tax paid
Others
Cashflow from operations
6
(4)
(5)
(5)
(5)
(2)
(80)
(23)
(107)
(157)
8
78
80
28
29
Minority interest
Capex
(98)
(11)
(10)
(10)
(10)
Disposal/(purchases)
294
29
-
-
-
Others
(43)
(101)
-
-
-
Margins (%)
Cash flow from investing
153
(83)
(10)
(10)
(10)
EBITDA
36.4
26.2
29.5
25.2
183.4
PBT
30.5
16.9
15.9
16.5
171.0
Net profit
28.4
13.2
13.3
12.0
166.4
Debt raised/(repaid)
79
(3)
Equity raised/(repaid)
-
-
Dividends paid
(13)
(88)
-
-
0
-
-
(20)
(26)
(20)
(26)
-
(18)
Others
20
(15)
161
Cash flow from financing
86
(18)
55
Net change in CF
248
(23)
125
(2)
(7)
Free Cash Flow
(90)
67
70
18
19
Page 19 of
20
25 September 2015
Equity Rating Structure and Definitions
BUY
Total return is expected to exceed +10% over a 12-month period
HOLD
Total return is expected to be between -5% and +10% over a 12-month period
SELL
Total return is expected to be below -5% over a 12-month period
NOT RATED
Affin Hwang Investment Bank Berhad does not provide research coverage or rating for this company. Report is intended as information only and not as a
recommendation
The total expected return is defined as the percentage upside/downside to our target price plus the net dividend yield over the next 12 months.
OVERWEIGHT
Industry, as defined by the analyst’s coverage universe, is expected to outperform the KLCI benchmark over the next 12 months
NEUTRAL
Industry, as defined by the analyst’s coverage universe, is expected to perform inline with the KLCI benchmark over the next 12 months
UNDERWEIGHT
Industry, as defined by the analyst’s coverage universe is expected to under-perform the KLCI benchmark over the next 12 months
This report is intended for information purposes only and has been prepared by Affin Hwang Investment Bank Berhad (14389-U) (formerly known as HwangDBS Investment Bank
Berhad) (“the Company”) based on sources believed to be reliable. However, such sources have not been independently verified by the Company, and as such the Company does
not give any guarantee, representation or warranty (express or implied) as to the adequacy, accuracy, reliability or completeness of the information and/or opinion provided or
rendered in this report. Facts, information, views and/or opinion presented in this report have not been reviewed by, may not reflect information known to, and may present a differing
view expressed by other business units within the Company, including investment banking personnel. Reports issued by the Company, are prepared in accordance with the
Company’s policies for managing conflicts of interest arising as a result of publication and distribution of investment research reports. Under no circumstances shall the Company, its
associates and/or any person related to it be liable in any manner whatsoever for any consequences (including but are not limited to any direct, indirect or consequential losses, loss
of profit and damages) arising from the use of or reliance on the information and/or opinion provided or rendered in this report. Any opinions or estimates in this report are that of the
Company, as of this date and subject to change without prior notice. Under no circumstances shall this report be construed as an offer to sell or a solicitation of an offer to buy any
securities. The Company and/or any of its directors and/or employees may have an interest in the securities mentioned therein. The Company may also make investment decisions or
take proprietary positions that are inconsistent with the recommendations or views in this report.
Comments and recommendations stated here rely on the individual opinions of the ones providing these comments and recommendations. These opinions may not fit to your financial
status, risk and return preferences and hence an independent evaluation is essential. Investors are advised to independently evaluate particular investments and strategies and to
seek independent financial, legal and other advice on the information and/or opinion contained in this report before investing or participating in any of the securities or investment
strategies or transactions discussed in this report.
Third-party data providers make no warranties or representations of any kind relating to the accuracy, completeness, or timeliness of the data they provide and shall not have liability
for any damages of any kind relating to such data.
The Company’s research, or any portion thereof may not be reprinted, sold or redistributed without the consent of the Company.
The Company, is a participant of the Capital Market Development Fund-Bursa Research Scheme, and will receive compensation for the participation.
This report is printed and published by:
Affin Hwang Investment Bank Berhad (14389-U)
(formerly known as HwangDBS Investment Bank Berhad)
A Participating Organisation of Bursa Malaysia Securities Bhd
Chulan Tower Branch,
3rd Floor, Chulan Tower,
No 3, Jalan Conlay,
50450 Kuala Lumpur.
www.affinhwang.com
Email : [email protected]
Tel : + 603 2143 8668
Fax : + 603 2145 3005
Page 20 of
20

Amcorp Properties - Bursa Market Place

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