Period 5Q12/15M12
Actual vs. Expectations
The 15M12 core net
profit of RM152.9m came in higher than our estimate by 13% but within that of
the consensus.
The
stronger-than-expected results were mainly due to a slower-than-expected
decline in the mail business and the full-year
tariff impact during the period.
Dividends No
dividend was declared during the quarter. A total gross dividend of 17.5 sen
was proposed in March 2012 for FYE March 2012.
Key Results Highlights
YoY, 1QCY12 core net
profit of RM29.2m dropped by 37% on the back of a flat growth in revenue. This
is mainly due to a higher tax bracket for the quarter with an effective tax
rate at 39% as compared to 29% in 1QCY11.
QoQ, 1QCY12 revenue
grew by 6% while the core net profit jumped 13%. This is mainly due to the lower
loss at its retail division from RM18m to RM8m.
The improvement in
the margin and bottom line were mainly due to the full-year impact of the tariff hike.
Outlook We
expect the new management to reveal more transformation initiatives in the
near-term as its existing Business Transformation Plan is expiring FY12-FY13.
Change to Forecasts
No change to our
FY13E earnings forecast of RM79.6m, as we have not factored in the potential
new business contribution, i.e. business synergy with financial
institutions.
Rating MAINTAIN OUTPERFORM
Maintaining our
OUTPERFORM rating due to the attractive upside (+37%) from the current market price
coupled with its decent net yield of 4.1%.
Valuation Maintaining our Target Price at RM3.70 based
on DCF valuation.
Risks (1)
Lag impact from delays in the execution of its transformation plan (2) spike in
fuel prices and (3) a higher than expected decline in the mail volume of
>10%.
Source: Kenanga
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