Result Briefing for Eight Stocks

Stockland Corporation Ltd

SGP Dividend Details
 
Positive revaluations contributed to the bottom line growth: Stockland Corporation Ltd.’s (ASX: SGP) statutory profit surged by 50.6% year on year (yoy) to $696 million during the first half of 2016, driven by commercial property revaluations increase to $433 million during the period from $170 million in prior corresponding period (pcp). The Group’s Funds from Operations (FFO) rose by 11.3% yoy to $342 million while FFO per security increased by 9.9% yoy to 14.5 cents during the period. The group delivered a distribution of 12.2 cents in 1H16 and is on track to generate full year distribution of 24.5 cents for FY16.
 


Strong portfolio performance in 1H16 (Source: Company Reports)
 
Meanwhile, management estimates its FY16 EPS growth in the range of 6.5% to 7.5% and an FFO per security rise to 9% to 10%, driven by marginally higher settlements from the 5,000 - 6,000 lots. The commercial property comparable FFO is forecasted to increase by 3% to 4% while comparable NOI rise is expected in the range of 2% to 3%. Residential margins is expected to be more than 14% for the second half of 2016. Based on the above, we put a BUY recommendation on the stock at the current price of $4.01
 
 
SGP Daily Chart (Source: Thomson Reuters)
 

Cimic Group Ltd

CIM Dividend Details
 
Built strong pipeline of projects: Cimic Group Ltd (ASX: CIM) developed a strong pipeline and already built infrastructure and mining projects pipeline worth $60 billion for FY16, with 60% from Australia and New Zealand markets. The group has >$170 billion worth of projects in hand for FY17 and FY18 with 70% from Australia and New Zealand. Meanwhile, CIM had work in hand worth of $14.1 billion for FY15. Despite the group’s revenues decrease by 11.9% yoy during fiscal year of 2015, Cimic Group managed to deliver an NPAT growth by 19.9% yoy to $520.4 million, driven by better margins from construction and contract mining as well as major margin increases on the back of enhanced project delivery. The group also improved its free operating cash flow by $745 million to $1.2 billion in FY15, as it controlled its Gross capex by $439 million to $266 million in FY15 against pcp. Based on the mixed outcome, we believe that the stock is Expensive at the current price of $26.92
 
 
CIM Daily Chart (Source: Thomson Reuters)
 

OZ Minerals Ltd

OZL Dividend Details
 
Enhancing production while controlling costs: OZ Minerals Limited (ASX: OZL) reported a strong copper production of 130,305 tonnes during fiscal year of 2015 leading to a revenue increase to $879.4 million against $831 million in pcp. The group’s efforts to control costs as well as capital expenditure paid off during the year, as OZL’s Net Profit after Tax delivered a 168% yoy rise to $130.2 million during FY15. OZL also has a strong capital position having a cash of $552.5 million as of December 2015 with no debt.
 


Improving production and costs (Source: Company Reports)
 
Management intends to further enhance its production and accordingly revised its FY16 copper production to 125,000 tonnes against 115,000 tonnes and gold production to 135,000 ounces of gold from 125,000 ounces. Based on the above, we put a HOLD recommendation on the stock at the current price of $4.69
 
 
OZL Daily Chart (Source: Thomson Reuters)
 

Commonwealth Bank of Australia

CBA Dividend Details
 
Decent performance across all divisions: Commonwealth Bank of Australia (ASX: CBA) reported a statutory net profit after tax (NPAT) rise of 2% on a year over year basis (yoy) to $4,618 million during the half year ended on December 2015, while cash NPAT rose by 4% yoy to 4,804 million during the same period. The group’s focus on customer satisfaction drove its volumes during the period, and consequently, CBA reported an operating income growth by 6% during the six months ended on December 2015 against prior corresponding period.
 


First half of 2016 performance across all segments (Source: Company Reports)
 
Customer deposits improved by 9% yoy to $500 billion, accounting over 64% of funding. Commonwealth Bank also enhanced its capital position to comply with APRA regulations and reported a Basel III Common Equity Tier 1 (CET1) of 10.2% and a CET1 (Internationally Comparable) ratio of 14.3%. However, we believe that the stock is Expensive at the current stock price.
 
 
CBA Daily Chart (Source: Thomson Reuters)
 

Computershare Ltd

CPU Dividend Details
 
Falling Australian dollar continue to hurt the bottom line: Computershare Ltd (ASX: CPU) managed to deliver an overall management revenue increase by 5% to $1,007.6 million during first half of 2016 against $959.5 million in pcp. However, the group’s Management EBITDA fell by 0.4% yoy to $258.2 million during the period as its Employee Share Plans division was affected by the decrease in transactional volumes from major clients as well as impacted from reduced margin income. This decrease coupled with rising regulatory costs and the group’s investments in services and systems also hurt Employee Share Plans EBITDA. Moreover, Management Earnings per share fell by 5.9% against pcp due to ongoing fall of Australian dollar against US dollar coupled with decreased yields on client balances. As a result, management reiterated their guidance of 7.5% fall in its Earnings during fiscal year of 2016 to over US 55.3 cents per share. Given the above, we believe that the stock is Expensive at the current stock price.
 
 
CPU Daily Chart (Source: Thomson Reuters)
 

AGL Energy Ltd

AGL Dividend Details
 
Huge Natural Gas impairment costs hurt the bottom line: AGL Energy Ltd (ASX: AGL) reported an Underlying Profit rise by 24.2% yoy to $375 million during first half of 2016 driven by electricity generation volumes (7 TWh) contribution of $36 million and wholesale electricity prices contribution of $16 million during the period. But, the group reported a statutory loss of $449 million during the period due to $640 million of Natural Gas impairments charges related to the carrying value of gas exploration and production assets. However, AGL’s underlying EPS rose by 16.6% yoy to 55.6 cents per share during the period. The group’s top line rose by 8.1% yoy to $5,601 million and it also declared an interim dividend of 32.0 cents per share which is an increase of 2 cents per share against pcp.
 


Underlying profit drivers (Source: Company Reports)
 
AGL intends to achieve over $170 million in opex savings as well as derive $1 billion from its asset sales. Accordingly the group offloaded its Macarthur Wind Farm for $532 million. Management estimates to reach the upper side of its fiscal year of 2016 underlying profit guidance range of $650 to $720 million. However, we believe that the stock is Expensive at the current stock price.
 
 
AGL Daily Chart (Source: Thomson Reuters)
 

Boral Ltd

BLD Dividend Details
 
Better outlook: Boral Ltd (ASX: BLD) reported a revenue decrease of 4% yoy to $2.2 billion during first half of 2016. But the group managed to deliver a strong underlying net profit after tax rise by 23% yoy to $137 million and an EBIT increase of 19% to $200 million as its efforts to reduce costs and improve efficiency have paid off. Accordingly, BLD reported an interim dividend of 11 cents per share during the period against 8.5 cps in pcp. Management reported that the markets are recovering and the company expects major roads and infrastructure development in Australia in the coming five to six years despite resource-based projects pressure. Recovering US market might also improve its performance further in the coming periods. However, we believe that the stock is Expensive at the current price.
 
 
BLD Daily Chart (Source: Thomson Reuters)
 

Carsales.Com Ltd

CAR Dividend Details
 
Strong International performance: Carsales.Com Ltd (ASX:CAR) revenues surged 11% yoy to $167.3 million during first half of 2016, driven by the ongoing improvement of its core Online Advertising business growth by 9% yoy coupled with solid increase in International, and Finance and Related Services segments by 24% yoy and 17% yoy, respectively. Webmotors and SKENCARSALES revenues increased by 14% yoy and 22% yoy, respectively, supporting the group’s international sales. Meanwhile, the group’s NPAT increased by only 10% yoy to $51.3 million in 1H16 due to one-time costs from NCI inclusion of Redbook inspect. CAR finished its 65% acquisition of SoloAutos in Mexico during the period. Management issued a positive outlook for its domestic business and targets to penetrate into Korea and Brazil to enhance its international penetration. However, we believe that the stock is Expensive at the current price.
 
 
CAR Daily Chart (Source: Thomson Reuters)

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