The outlook is positive. Our expectation in our previous report was for 2H18 to be stronger than 1H18 due to organic and inorganic growth. So far, YoY decline in PATMI has been narrowing and we expect YoY growth in 4Q18. 3Q18 PATMI (-2%YoY) is also comparatively better than 9M18 (-9.2%YoY). Recent and pipeline acquisitions to contribute positively to Group earnings.
Upgrade to BUY; new target price of $2.69 (previously $2.78)
Our lower target price is due to higher assumptions for staff, repair and maintenance costs. Our FY18e/FY19e revenue is +1%/+2% from previous estimate, and PATMI is ‑1%/-5% from previous estimate. Our target price gives an implied FY18e forward P/E multiple of 19.2 times. The 10.4 cents full year dividend is sustainable, supported by positive free cash flow.