Stocks in a Focus (20-04-2018)

KUALA LUMPUR (April 19): Based on corporate announcements and news flow today, stocks in focus for Friday (Apr 20) may include the following: IHH Healthcare…

Report: Wells Fargo nears US$1b settlement over risk management

NEW YORK, April 20 ― Wells Fargo is close to paying US$1 billion (RM3.8 billion) to settle a US probe over its risk management policies in another blow to the banking giant, US media reported yesterday. The settlement, which could come as soon…

Opec, non-Opec panel finds oil glut virtually eliminated (VIDEO)

JEDDAH, April 19 — A global oil glut has been virtually eliminated, according to a joint Opec and non-Opec technical panel, two sources familiar with the matter said, thanks in part to an Opec-led supply cut deal in place since January 2017….

Indonesia keeps rates on hold for seventh month, rules out hike

JAKARTA, April 19 — Indonesia’s central bank kept its key interest rate unchanged today, tying the decision to a need to maintain stability as the economy faces external pressures including higher oil prices and a potential trade war. Bank…

Nestle, Unilever forego price increases to move product

ZURICH, April 19 — First-quarter sales growth at Nestle and Unilever was driven almost entirely by shifting more goods, in a stark illustration of how hard it is for consumer products makers to raise prices in a competitive retail environment….

Maxis earnings up 4.2% to RM523m in first quarter

PETALING JAYA: Maxis Bhd saw its net profit rise 4.18% to RM523 million in the first quarter ended March 31, from RM502 million in the previous corresponding quarter.

Revenue for the quarter declined 5.8% to RM2.2 billion, compared with RM2.4 billion in the same period last year.

“We delivered a steady quarter with solid earnings before interest, tax, depreciation and amortisation (ebitda) and high ebitda margin in a highly competitive market,” its CEO Robert Nason said in a statement.

Year-on-year (y-o-y), Maxis’ normalised profit after tax (PAT) was stable at RM510 million on the back of solid ebitda. Its normalised ebitda continued to be stable at RM1 billion.

Meanwhile, ebitda margin (on service revenue) was high at 51.5% against 49.3% last year, reflecting positive results from cost optimisation initiatives.

The group’s service revenue was marginally lower at RM2 billion from RM2.1 billion a year ago due to intense competition, particularly in the prepaid market.

Postpaid revenue grew 5.2% y-o-y to RM985 million from RM936 million last year, registering the highest shared line acquisition and increased average revenue per account (Arpa) through mobile and fixed offerings.

“This was supported by high monthly postpaid Arpu of RM92 and our flagship MaxisONE Plan (MOP) which continued to attract high-value subscribers. MOP registered 283,000 new additions y-o-y, bringing the total base to two million customers,” it noted.

Maxis’ prepaid revenue softened to RM849 million from RM1 billion last year due to lower subscription base, driven by aggressive price competition, continued SIM consolidation and migration to postpaid.

Nevertheless, the group said it continued to sustain high Mobile Internet (MI) penetration of 73%, which supported its high prepaid Arpu of RM41 per month.

Maxis has declared an interim dividend of five sen a share for the financial year ending Dec 31, to be paid on June 28.

In a note today, AmInvestment Bank Bhd said it is maintaining its “hold” call for the group with an unchanged discounted cash flow derived fair value of RM5.76 per share.

It said this was based on a weighted average cost of capital discount rate of 7% and a terminal growth rate assumption of 2%.

“The stock’s FY18 enterprise value/ebitda of 11 times is almost at parity to its three-year average, while dividend yields are decent at 3%,” it noted.

Pending an analyst briefing, AmInvestment said its forecasts are maintained as Maxis’ Q1’18 normalised net profit of RM510 million came in generally within the firm and consensus expectations.

“Unlike Digi.Com which recently registered a 10% increase in Q1’18 net profit from the adoption of MFRS 15 on device subsidy and sales commissions, Maxis’ results appear to be adversely impacted, with Q1’17 normalised net profit slightly adjusted down by 1% while revenue rose 10%,” it said.

Post-MFRS 15 adoption, it said management is now guiding for FY18 service revenue to decrease by a mid-single digit decline versus an earlier low single digit and for ebitda to decline by a high single digit versus mid-single digit.

This includes expectations for higher spectrum fees from the 2,100MHz and 700MHz bands, it added.

Nestle Malaysia pays RM7.2m interest for intra-group loan

KUALA LUMPUR, April 19 ― The interest charges paid for intra-group loan (IGL) from Nestle Treasury Centre-Middle East and Africa Ltd (NTC-MEA) from April 2017 to March 2018 amounted to RM7.2 million, said Nestlé (M) Bhd. In a filing to Bursa…

Iskandar Malaysia records committed investments of RM9b

JOHOR BARU: Iskandar Malaysia has recorded committed investments of RM9.33 billion in the first quarter of 2018, bringing its total cumulative committed investments from 2006 up to March 31 to RM262.43 billion.

In a statement today, Iskandar Regional Development Authority (IRDA) said 59%, or RM153.54 billion of the total amount, had been realised.

To date, local investors accounted for RM160 billion, or 61% of the total cumulative committed investments, while RM102 billion, or 39%, were from foreign investors.

“From 2006 to March 2018, the top five countries with the highest cumulative committed investments in Iskandar Malaysia were China, Singapore, the US, Japan and the European Union,” said IRDA CEO Datuk Ismail Ibrahim.

He said this reflected the investors’ continuous confidence in Iskandar Malaysia as it moved towards realising its long-term development objectives.

This was also supported by the increasing number of visits to Iskandar Malaysia by various international parties, he said.

“These visits provided us with the opportunity to further highlight Iskandar Malaysia’s many strengths and opportunities and also act as a platform to strengthen relationships and exchange knowledge with international parties and global players, in line with the region’s vision to become the preferred destination for investment, work, live and play,” Ismail said.

He said Iskandar Malaysia continued to welcome foreign investments which were aligned to its nine promoted economic sectors and those that provided spillover effects to the region’s economy, environment and social agendas.

“From 2007 to March 2018, a total of 746,457 jobs were created in Johor, most of it originating from various sectors in Iskandar Malaysia, including manufacturing, hospitality, food and beverage, and education,” he said.

Moving forward, Ismail said the next seven years would not only be about attracting new investments in Iskandar Malaysia, as the investments must be inclusive so that the local communities, businesses and talents would be able to participate and benefit from the wealth generated from economic activities. – Bernama

Iskandar Malaysia records committed investments of RM9.33b for Q1 2018

JOHOR BARU, April 19 — Iskandar Malaysia has recorded committed investments of RM9.33 billion in the first quarter of 2018, bringing its total cumulative committed investments from 2006 up to March 31, 2018 to RM262.43 billion. In a statement…

TSMC trims full-year revenue estimate on weaker smartphone demand


TAIPEI (April 19): Taiwan Semiconductor Manufacturing Co Ltd, the world’s largest contract chipmaker, revised its full-year revenue target to the low end of its earlier forecast due to softer demand for smartphones and uncertainty in the cryptocurrency market. Revenue for 2018 is expected to grow 10% compared with an earlier forecast of 10-15%, Co-Chief Executive C.C. Wei told an earnings briefing. TSMC, whose clients include Apple Inc, Qualcomm Inc and Nvidia Corp, reported a 2.5% rise in net profit for January-March at T$89.8 billion (US$3.1 billion) — in line withRead More