Bursa Malaysia Daily Market Report - 1 March

Transcription

1. Thursday , 01 March, 2018 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only N ew s 1. D ai l y M arke t C om men t a ry 2. D ai l y B ri ef Fu nd a me n tal Rep o r ts 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. A e o n C o . (M ) B h d : E x p a n s io n P la n C o m in g to F r u it io n A f f i n H o ld in g s Be rh a d : F Y 1 7 Da m p e n e d b y H ig h e r C o s t s a n d A l lo w a n c e s A M M B H o l d in g s Be r h a d : I m p a c te d b y N o r m a l i s i n g C r e d i t C o s t A m w a y (M a l a ys i a ) H o l d i n g s Be rh a d : B e n e f ic ia ry to St re n g th e n in g o f R i n g g i t Ba n k i n g S e c t o r : L o a n s U p 4 .2 % Y o Y in J a n 2 0 1 8 C IM B G ro u p H o l d i n g s Be r h a d : F Y 1 7 R e su lt s W ith in E x p e c ta ti o n s Ib ra c o Bh d : T a rg e t s R M 3 5 0 m n Sa le s f o r F Y 1 8 In a r i A m e rt ro n Be rh a d : R F a n d I r i s Sc a n n in g t o L e a d th e Wa y In d o f o o d A g r i Re s o u rc e s L t d : E a rn in g s I m p ro v e , b u t N o t E n o u g h I RIS C o r p o ra t io n Be r h a d : T ru ste d I D D iv i sio n U n de r ly in g P ro f i ta b i l ity I n ta c t K a re x Be r h a d : GP M a rg in to R e m a in Be lo w 3 0 % L e v e l s L in g k a ra n T ra n s K o t a H o l d in g s Be r h a d : F la t ti sh Pe rf o rm a n c e M a h S in g G ro u p B h d : F la t Sa le s G ro w th Y o Y M a la ya n B a n k i n g Be rh a d : R e c o r d F Y 1 7 N e t P r o f i t M a la ys i a n Ec o n o m y : C PI M o de ra te s in J a n u a ry 2 0 1 8 P e c c a G r o u p Bh d : Be tt e r 2 H R i d in g o n M y v i S e la n g o r P ro p e r t ie s B h d : H ig h e r M a rk e t in g E x p e n se s B i te S e rb a D in a m ik H o l d in g s B h d : A g g r e ss iv e ly E x p a n din g O v e r se a s S u n w a y B h d : N o Su rp ri se s T e n a g a N a s io n a l B e r h a d : Y e t A n o th e r D iv i de n d Bo n a n z a U M W O i l & G a s C o rp o ra t i o n B h d : I n c re a s in g E x p o su r e O v e r se a s Te ch n ic al R ep o rt s 1. D ai l y Te ch n ic a l St o ck Pi cks ( L oc al ) 2. D ai l y St o ck S cr een 3. D ai l y For ei gn T ech n i c al St o ck P i cks ( HK ) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
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Daily Market Commentary Thursday , 01 March 2018 TA Research, e-mail : taresearch@ta.com.my For Internal Circulation Only Review & Outlook KLSE Market Statistics (28.02.2018) (mil) Main Market 2,018.1 Warrants 592.4 ACE Market 334.0 Bond 6.7 ETF 1.5 LEAP 0.0 Total 2,952.8 Off Market 61.0 Volume +/-chg (RMmn) 396.3 3,457.4 150.0 117.3 -350.6 59.4 -3.6 1.8 0.0 1.8 (0.0) 0.0 3,637.7 -85.2 388.3 Value Value/ +/-chg Volume Up Down 762.6 1.71 181 467 32.8 0.20 52 255 -50.8 0.18 22 80 -1.1 0.27 5 7 0.0 1.16 5 2 0.0 0.31 0 1 1.23 265 812 6.6 6.36 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP March Futures Other Markets DOW JONES NASDAQ (US) FTSE (UK) NIKKEI (JAPAN) KOSPI (KOREA) HANG SENG (HK) FSSTI (S'PORE) SET (BANGKOK) JCI (JAKARTA) SHANGHAI SHENZHEN AUSTRALIA -15.26 -130.71 -217.59 -14.50 -0.82 -0.98 -1.28 -0.78 3.31 2.13 -1.94 3.84 25,029.20 7,273.01 7,231.91 22,068.24 2,427.36 30,844.72 3,517.94 1,830.13 6,597.22 3,259.41 1,811.78 6,015.96 -380.83 -57.35 -50.54 -321.62 -28.78 -423.94 -22.45 -0.26 -1.71 -32.66 2.87 -40.90 -1.50 -0.78 -0.69 -1.44 -1.17 -1.36 -0.63 -0.01 -0.03 -0.99 0.16 -0.68 1.25 5.35 -5.93 -3.06 -1.63 3.09 3.38 4.36 3.80 -1.44 -4.61 -0.81 (mn) 25.0 17.0 15.0 6.0 5.6 3.4 2.2 1.3 1.0 % YTD chg 1,856.20 13,218.25 16,720.59 1,853.50 (RM) @ @ @ @ @ @ @ @ @ 0.30 2.74 15.70 7.90 0.61 1.42 1.40 1.20 19.10 Exchange Rate USD/MYR 3.9230 -0.001 USD/JPY 106.67 -0.670 EUR/USD 1.220 -0.0037 Counter TENAGA CIMB PCHEM AXIATA IHH MAXIS DIGI SIMEPLT PETGAS GENTING Mkt Cap. Chg (RM’mn) (RM) 88,956 66,332 64,720 48,862 48,696 46,160 37,631 36,384 34,865 33,908 -0.06 -0.10 -0.03 -0.06 -0.20 -0.08 -0.04 -0.18 -0.28 -0.14 News Bites Vol. (mn) 5.36 24.17 7.92 8.75 7.62 3.29 5.24 8.28 1.28 7.95 Commodities Futures Palm Oil (RM/mt) 2,558.00 16.00 Crude Oil ($/Barrel) 61.55 -1.29 Gold ($/tr.oz.) 1,319.40 0.20 Important Dates Given resurging inflation fears and possibility of more rate hikes in the US, investors are likely to switch back to risk-off mode in the interim, and in the absence of more positive news-flow. On the index, immediate uptrend supports are at 1,855 and 1,844, the steeply rising 10 and 30-day moving averages, followed by the 50-day ma at 1,820. Immediate resistance will be yesterday's high of 1,872, with the 2 Feb peak of 1,880 and upper Bollinger band at 1,883 as tougher upside hurdles. Look to bargain KKB on any dips towards the 100-day ma (93sen), with better support from the lower Bollinger band (88sen), for rebound upside to the 23.6%FR (RM1.01), while a confirmed breakout should aim for the 38.2%FR (RM1.14) ahead. Core support is from the 23/10/17 low (80sen). Meantime, accumulate Naim Holdings at current level for rebound upside to the 100-day ma (RM1.12), with tougher hurdle seen at the 23.6%FR (RM1.20), matching the overhead 200-day ma. Crucial support is from the 6/2/18 low (99sen), matching the lower band. Top 10 KLCI Movers Based on Mkt Cap. Off Market UMWOG-WA SIME TENAGA KLCC SIGN YNHPROP GHB HEKTAR HLFG % chg Blue chips slumped on Wednesday due to month end profit-taking and selling which accelerated losses, falling in line with the region after China February manufacturing slowed more than expected and on new US Fed Chairman Jerome Powell's hawkish comments on interest rates and inflation. The KLCI lost 15.26 points to settle at the day's low of 1,856.2, off an earlier high of 1,872.02, as losers trashed gainers 812 to 265 on higher turnover totaling 2.95bn shares worth RM3.63bn. • Advancecon Holdings Bhd is acquiring 2 plots of lands in an industrial area in Gombak for RM13.75mn to develop a workshop for its expanding construction fleet. • Mudajaya Group Bhd is disposing of a 7.07% stake in R.K.M Powergen Pte Ltd to Apollo Ventures Co Ltd for US$19.5mn (RM76.6mn) cash. • AWC Bhd is venturing into the rail-related business by buying a 60% stake in Trackwork & Supplies Sdn. Bhd. for RM43.5mn. • UEM Sunrise Bhd is partnering Australia's workspace provider WOTSO Workspace Pty Ltd to form a 50:50 joint-venture company. • Star Media Group Bhd (STAR) has called on a corporate guarantee given by JAKS Resources Bhd. • Tun Jeanne Abdullah, wife of former Malaysia Prime Minister Tun Abdullah Ahmad Badawi, is now the chairman of TRC Synergy Bhd. • EITA Resources Bhd has bagged an RM80.6mn contract to supply escalators for the LRT3 from Bandar Utama to Johan Setia. • AirAsia Bhd. is set to fly to Hua Hin, Thailand, with 4 times weekly direct flights from Malaysia, starting May 18. • Through a tripartite collaboration called the MYHOME initiative, Lafarge Malaysia Bhd, S P Setia Bhd (SPSB), and EdgeProp.my seek to get feedback from Malaysians about their ideal home and turn it into reality. • Tenaga Nasional Bhd said it is undertaking a tendering exercise for the construction of phase 2 of its new headquarters. • Malaysia's January consumer price index (CPI) grew at 2.7% YoY, the lowest since December 2016. • Industrial production in Japan contracted a seasonally adjusted 6.6% on month in January. • The pace of growth in China's manufacturing activity fell sharply in February as plants closed for the Lunar New Year and demand for Chinese exports waned. • India's economy grew at its fastest pace at 7.2% in 4Q17, regaining the top spot from China of the world's fastest-growing major economies. • U.S. GDP rose at a 2.5% seasonally and inflation-adjusted annual rate in the 4Q17, slightly weaker than initially thought. • A gauge of contracts to purchase previously-owned U.S. homes unexpectedly declined in January to a more than three-year low, reflecting a shortage of inventories and rising mortgage rates. • Inflation in the eurozone fell to its lowest level in more than a year in February, but core inflation remained steady. • Germany's unemployment decreased notably in February. HSSEB - 1:10 Rights Issue - RI of up to 31.9m shares together with BI of up to 15.9m shares and up to 47.9m free detachable warrants. 1 rights share for every 10 existing shares held, at an issue price of RM1.30 per rights share, together with 1 bonus share and 3 warrants for every 2 rights shares subscribed. Application Closed: 08/03/2018. LISTING ON: 21/03/2018. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan, Head of Research MENARA TA ONE, 22 JALAN for TA SECURITIES HOLDINGS BERHAD (14948-M) A PARTICIPATING ORGANISATION OF BURSA MALAYSIA SECURITIES BHD P RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL : 603 - 2072 1277. FAX : 603 - 2032 5048 www.ta.com.my
3. Thursday , March 01, 2018 FBMKLCI: 1,856.20 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Brief Market View, News in Brief: Corporate, Economy, and Share Buybacks Chartist: Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my M a r k e t V i e w Risk-Off Mode Sparked by US Inflation Fears Blue chips slumped on Wednesday due to month end profit-taking and selling which accelerated losses, falling in line with the region after China February manufacturing slowed more than expected and on new US Fed Chairman Jerome Powell’s hawkish comments on interest rates and inflation. The KLCI lost 15.26 points to settle at the day’s low of 1,856.2, off an earlier high of 1,872.02, as losers trashed gainers 812 to 265 on higher turnover totaling 2.95bn shares worth RM3.63bn. Uptrend Supports at 1,855/1,844, Resistance at 1,872/1,880 Given resurging inflation fears and possibility of more rate hikes in the US, investors are likely to switch back to risk-off mode in the interim, and in the absence of more positive news-flow. On the index, immediate uptrend supports are at 1,855 and 1,844, the steeply rising 10 and 30-day moving averages, followed by the 50-day ma at 1,820. Immediate resistance will be yesterday’s high of 1,872, with the 2 Feb peak of 1,880 and upper Bollinger band at 1,883 as tougher upside hurdles. Bargain KKB & Naim Holdings Look to bargain KKB on any dips towards the 100-day ma (93sen), with better support from the lower Bollinger band (88sen), for rebound upside to the 23.6%FR (RM1.01), while a confirmed breakout should aim for the 38.2%FR (RM1.14) ahead. Core support is from the 23/10/17 low (80sen). Meantime, accumulate Naim Holdings at current level for rebound upside to the 100-day ma (RM1.12), with tougher hurdle seen at the 23.6%FR (RM1.20), matching the overhead 200-day ma. Crucial support is from the 6/2/18 low (99sen), matching the lower band. Asian Markets Stumble On Weaker China Data and Fed Rate Worries Asian shares extended losses on Wednesday, with sentiment dented by the weaker-thanexpected economic data from China and hawkish comments from Federal Reserve Chair Jerome Powell. Markets opened mildly lower earlier in the session but selling intensified after data showed growth in China’s manufacturing sector in February slowed more than expected to the weakest in over 1-1/2 years as the Lunar New Year holidays disrupted business activity and tougher pollution rules curtailed factory output. Sentiment was already sour after Fed’s Jerome Powell gave an upbeat view of the U.S. economy on Tuesday and said recent data had strengthened his confidence on inflation. The new chair also signaled the central bank could hike rates more than three times this year in an effort to keep the economy from overheating. Japan’s Nikkei share average fell, snapping a three-day winning streak, as the Bank of Japan’s decision to trim purchases of super long bonds soured sentiment by boosting the yen. The Nikkei ended 1.4 percent lower at 22,068.24 points. Over in Australia, the S&P/ASX 200 shed 0.68 percent, with gold producers and telecommunications stocks among the worst performing sectors. South Korea's Kospi also fell more than 1 percent as gains in tech heavyweight Samsung Electronics were offset by losses in automakers and manufacturing names. China stocks extended their decline, as weak factory data from China rekindled worries about the country’s economic health. The Shanghai Composite index was down 32.57 points or 0.99 percent at 3,259.50. Page 1 of 10
4. 1-Mar-18 Dow Log Worst Monthly Drop Since 2016 The Dow Jones Industrial Average fell for the second straight session Wednesday , snapping their 10-month winning streaks as Wall Street digested data that were seen as underlining the economy’s robust health and continued to weigh the impact of higher interest rates. Stocks got a slight boost after the opening bell as official data showed that U.S. economic growth had been revised down in the fourth quarter of last year, in line with what economists expected. However, the Dow tumbled more than 240 points in the final 60 minutes for the worst monthly performance since January 2016, as Jerome Powell’s remarks, which revived fears about more rate increases than expected this year, continued to weigh. Investors are now looking ahead to his next appearance on Capitol Hill, in front of a Senate committee later in the day. Roughly 35 percent of investors now expect that the Fed will raise interest rates at least four times this year, compared with about 28 percent a week ago, according to CME Group data. The central bank has previously projected three rate increases for this year. The Dow Jones Industrial Average fell 380.83 points, or 1.5 percent, to 25,029.20, the S&P 500 lost 30.45 points, or 1.11 percent, to 2,713.83 and the Nasdaq Composite dropped 57.35 points, or 0.78 percent, to 7,273.01. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, March 01, 2018, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 10
5. 1-Mar-18 N e w s i n B r i e f Corporate Advancecon Holdings Bhd is acquiring 2 plots of lands in an industrial area in Gombak for RM13 .75mn to develop a workshop for its expanding construction fleet. The deal will funded through internal funds and borrowings. (Bursa Malaysia/The Edge) Mudajaya Group Bhd is disposing of a 7.07% stake in R.K.M Powergen Pte Ltd to Apollo Ventures Co Ltd for US$19.5mn (RM76.6mn) cash, which would see its stake in the Indian independent power producer drop to 18.93% from 26%. The group is expected to realise a loss of RM49.1mn from the proposed disposal and it plans to use RM60mn of the total sale proceeds to repay borrowings, working capital and the rest for expenses relating to the proposed disposal. (Bursa Malaysia/The Edge) AWC Bhd is venturing into the rail-related business by buying a 60% stake in Trackwork & Supplies Sdn. Bhd. for RM43.5mn, to be satisfied with the combination of RM20mn cash and the balance RM23.50mn through issuance of new AWC shares. Meanwhile. The group also inked another deal with Trakniaga Sdn. Bhd., which owns 40% of Trackwork, to govern the management and operation of Trackwork. (Bursa Malaysia/The Star) UEM Sunrise Bhd is partnering Australia’s workspace provider WOTSO Workspace Pty Ltd to form a 50:50 joint-venture company to manage the operations for the lease of coworking space and serviced office suites in Malaysia. (Bursa Malaysia/The Sun) Star Media Group Bhd (STAR) has called on a corporate guarantee given by JAKS Resources Bhd (JAKS) in relation to a property development project in Section 13, Petaling Jaya. Under the corporate guarantee, JAKS is to ensure its subsidiary to fulfil all its obligations under a sales and purchase agreement that it entered into with STAR on August 19, 2011. (Bursa Malaysia/The Star) Tun Jeanne Abdullah, wife of former Malaysia Prime Minister Tun Abdullah Ahmad Badawi, is now the chairman of TRC Synergy Bhd. (Bursa Malaysia/The Edge) EITA Resources Bhd has bagged an RM80.6mn contract to supply escalators for the LRT3 from Bandar Utama to Johan Setia. (Bursa Malaysia/The Edge) AirAsia Bhd. is set to fly to Hua Hin, Thailand, with 4 times weekly direct flights from Malaysia, starting May 18. (Bernama) Through a tripartite collaboration called the MYHOME initiative, Lafarge Malaysia Bhd, S P Setia Bhd (SPSB), and EdgeProp.my seek to get feedback from Malaysians about their ideal home and turn it into reality. Results from the poll will be used as the basis for the design of homes that will be built by SPSB in its Semenyih development, Setia Ecohill. (The Edge) DRB-Hicom Bhd reported a net loss of RM58.15mn for 3QFY18, against a net profit of RM351.86mn a year ago, due to a slump in automotive sales and a one-off impairment at Proton. Quarterly revenue slipped 11.2% YoY to RM3.05bn from RM3.43bn. For 9MFY18, the diversified group posted a net profit of RM508.71mn compared to a net loss of RM127.07mn with accumulative revenue expanded 13.42% YoY to RM9.73bn versus revenue of RM8.58bn. (Bursa Malaysia/The Edge) Page 3 of 10
6. 1-Mar-18 Malaysian Resources Corporation Bhd expects its engineering , construction and environment businesses to contribute a larger share of revenue in 2018, as property development slows amid cooling demand in the market. Meanwhile, the group reported a 43.8% drop YoY in net profit to RM105.65mn in 4QFY17 from RM188.08mn a year ago, on lower contribution from the property development and investment division. Quarterly revenue also fell 60.4% YoY to RM408.16mn from RM1.03bn. The weak quarterly performance dragged down the group's net profit for FY17 by 37.3% YoY to RM167.58mn from RM267.36mn in FY16. Revenue, however, was up 17.3% YoY to RM2.82bn from RM2.41bn. The group is proposing a first and final dividend of 1.75sen/share. (Bursa Malaysia/The Star/The Edge) Tenaga Nasional Bhd said it is undertaking a tendering exercise for the construction of phase 2 of its new headquarters within the vicinity of the current headquarters in Bangsar. Meanwhile. The group is changing its financial year end from Aug 31 to Dec 31 in 2018, booked in a net profit of RM2.76bn in 4-month period ended Dec 31, 2017. Revenue in the period stood at RM34.95bn. The group has proposed a final single tier dividend of 21.41sen/share. (Bursa Malaysia/The Edge) BIMB Holdings Bhd’s net profit for 4QFY17 went up 7.29% YoY to RM149.64mn from RM139.47mn previously, thanks to higher distributable income but offset by higher expenses incurred. Quarterly revenue rose 7.46% YoY to RM946.04mn from RM880.40mn. For FY17, the group booked a net profit of RM619.84mn, up 10.88% YoY from RM559.04mn while revenue climbed 5.48% YoY to RM3.72bn from RM3.53bn a year ago. (Bursa Malaysia/The Edge) AMMB Holdings Bhd registered 30% YoY drop in net profit in 3QFY18 to RM218.98mn from RM313.17mn, dragged by higher impairment, lower fund management fee and loss in joint venture share among others. This was despite a 9.2% YoY growth in its revenue to RM2.16bn, from RM1.98bn a year ago. For 9MFY18, the group’s net profit fell 11.1% YoY to RM878.72mn from RM988.79mn while revenue stood at RM6.37bn, up 3.7% YoY from RM6.14bn. Meanwhile, the group announced that it had completed its mutual separation scheme exercise with an estimated expense of RM128mn. (Bursa Malaysia/The Edge/The Sun) CIMB Group Holdings Bhd's net profit rose 24% YoY in 4QFY17 to RM1.06bn from RM854.39mn on overall better performance. Meanwhile, quarterly revenue increased 5% YoY to RM4.52bn from RM4.31bn a year ago. For FY17, the group's net profit climbed 26% YoY to RM4.48bn versus RM3.56bn in a year ago. Revenue rose 10% YoY to RM17.63bn from RM16.07bn. The group declared a second interim dividend of 12sen/share. (Bursa Malaysia/The Edge) Malayan Banking Bhd's net profit fell 9.7% YoY to RM2.13bn in 4QFY17 from RM2.36bn a year ago, due to higher overhead expenses and one-off proceeds from the sale of securities in 2016. Quarterly revenue, however, was up 4.8% YoY to RM11.79bn from RM11.25bn. For FY17, the group recorded net profit of RM7.52bn, up 11.5% from RM6.74bn while revenue rose by a marginal 2.1% YoY to RM45.58bn from RM44.66bn. The group also proposed a final single-tier dividend of 32sen/share. (Bursa Malaysia/The Edge) Aeon Co (M) Bhd’s net profit rose 26.4% YoY to RM39.17mn in 4QFY17 from RM30.98mn a year ago, due to higher margin and better operation expenses control. Quarterly revenue also grew 4.7% YoY to RM1.07bn from RM1.02bn. For FY17, the group posted a 15.5% YoY increase in net profit to RM105.01mn from RM90.89mn in FY16, while revenue rose by a marginal 1.7% YoY to RM4.09bn from RM4.02bn. The group declared an interim dividend of 4sen/share. (Bursa Malaysia/The Edge) Page 4 of 10
7. 1-Mar-18 Sunway Bhd ’s net profit for 4QFY17 fell 1.08% YoY to RM183.8mn from RM185.82mn a year ago, as its property development, trading and manufacturing, and quarry segments registered lower profit contributions. Revenue for the quarter rose 33.21% YoY to RM1.72bn, from RM1.29bn. For FY17, the group’s net profit rose 9.15% YoY to RM639.51mn from RM585.88mn, due to improved contributions from all segments except the property development and quarry segments. Meanwhile, annual revenue climbed 15.45% YoY to RM5.37bn from RM4.66bn a year ago. The group proposed a second interim dividend of 3sen/ share. (Bursa Malaysia/The Edge) Panasonic Manufacturing Malaysia Bhd's posted net profit grew 36.4% YoY in 3QFY17 to RM42.65mn from RM31.27mn on higher contribution from the home appliance products’ segment and a derivative gain from the hedging of forward contracts. Quarterly revenue grew 11.07% YoY to RM317.05mn from RM285.44mn, For 9MFY17, the group posted a 5.5% YoY increase in net profit to RM105.87mn from RM100.35mn while revenue also rose 5.34% YoY to RM922.43mn from RM875.65mn. (Bursa Malaysia/The Edge) PPB Group Bhd saw its net profit fall 24.2% YoY to RM375.93mn in 4QFY17 from RM496.03mn a year ago, on lower contributions from the grains and agribusiness, consumer products and property segments. Quarterly revenue, however, was up 11.1% YoY to RM1.14bn from RM1.02bn, with growth coming from across all major business segments. For FY17, net profit rose 15.4% YoY to RM1.21bn from RM1.04bn, while revenue grew 2.8% YoY to RM4.31bn from RM4.19bn. The group declared a final dividend of 22sen/share (Bursa Malaysia/The Edge) Datasonic Group Bhd's net profit for 3QFY18 surged 83.9% YoY to RM14.7mn from RM7.97mn a year earlier, mainly on lower operating expenses from effective control measures implemented by management as well as a lower tax expense. Quarterly revenue fell by 17.6% YoY to RM60.3mn from the RM73.2mn. For 9MFY18, the group's net profit grew by 11.5% YoY to RM49.8mn from RM44.7mn. Revenue, however, fell by 14.1% to RM194mn as compared to RM225.7mn a year ago. The group declared a third interim dividend of 1sen/share. (Bursa Malaysia/The Edge) TH Plantations Bhd reported a 95% YoY dropped in net profit to RM6.88mn from RM127.46mn in 4QFY17, as the previous corresponding period benefitted from an extraordinary gain of RM112.58mn from the disposal of shares in a subsidiary. Quarterly revenue climbed 5% YoY to RM178.20mn from RM170.08mn, on higher sales of palm kernel and fresh fruit bunch. For FY17, the group’s net profit fell 75% YoY to RM36.73mn from RM147.07mn while revenue, however, grew 23% YoY to RM689.22mn from RM562.31mn. The group proposed a final dividend of 2sen/share. (Bursa Malaysia/The Edge) Hap Seng Consolidated Bhd’s net profit for 4QFY17 rose 65% YoY to RM144.2mn from RM87.57mn previously, thanks to the recognition of contingent consideration and profit guarantee relating to a subsidiary acquisition during the quarter. Quarterly revenue increased 16% YoY to RM1.41bn from RM1.21bn. For FY17, the group booked a net profit of RM1.1bn, up 10% from RM1bn while revenue rose 8% YoY to RM5.29bn from RM4.89bn. (Bursa Malaysia/The Edge) Vivocom International Holdings Bhd posted a net loss of RM2.64mn for 4QFY17, compared with a net profit of RM821k a year earlier, due to the provision of doubtful debts totalling RM5.93mn under its telecommunications segment. Quarterly revenue dropped 27.59% YoY to RM33.31mn from RM46.01mn. For FY17, the group’s net profit slumped 72.92% YoY to RM14.59mn, from RM53.90mn while revenue fell 50.21% YoY to RM181.73mn from RM365.03mn. (Bursa Malaysia/The Edge) Page 5 of 10
8. 1-Mar-18 Ahmad Zaki Resources Bhd has posted a net loss of RM3 .75mn for 4QFY17 versus a net profit of RM8.28mn a year earlier, on higher tax expenses. Meanwhile, quarterly revenue halved to RM178.27mn from RM357mn previously. For FY17, the group's net profit increased 4% YoY to RM28.23mn, from RM27.21mn while revenue fell 20% YoY to RM960.69mn from RM1.2bn. (Bursa Malaysia/The Edge) Page 6 of 10
9. 1-Mar-18 N e w s I n B r i e f Economy Asia Malaysia ’s Jan Inflation Growth at 2.7%, Lowest Since Dec 2016 Malaysia’s January inflation, as measured by the consumer price index (CPI), grew at 2.7% year-on-year, the lowest since December 2016. The figure was also below the consensus target of a 2.9% y-o-y growth. According to the Department of Statistics Malaysia (DoSM), the inflation rate was driven mainly by transportation which grew 5.7%, and food & nonalcoholic beverages which rose 3.8% from the year before. Eight other groups that pushed up the inflation rate were: furnishings, household equipment and routine household maintenance (up 2.6%), restaurants and hotels (up 2.4%), health (2.3%), housing, water, electricity, gas and other fuels (up 2.2%), education (up 1.2%), miscellaneous goods and services (up 0.9%), recreation services and culture (up 0.5%), as well as alcoholic beverages and tobacco (up 0.2%). On a monthly basis, the CPI rose 0.3% from December last year. Four states registered higher inflation rates than the nation’s 2.7%. They are: Malacca at 3%, Johor at 2.9%, Selangor and the Federal Territory of Putrajaya at 2.9%, and Negeri Sembilan at 2.8%. In 2017, headline inflation hit a high of 5.1% in March and remained above 3% throughout the year. The last time the headline inflation figure fell below 3% was in Dec 2016, when it came in at 1.7%. Bank Negara Malaysia raised the overnight policy rate (OPR) for the first time in three and a half years at the beginning of this year, by 25 basis points to 3.25%. (The Edge Market) Fuel Prices Up Across the Board from Midnight Prices for both petrol and diesel at the pumps are set to rise from midnight after last week’s plunge. The new price for RON95 grade petrol is RM2.20, up three sen from RM2.17 per litre while RON97 will be RM2.47 per litre, from RM2.43. Diesel is up five sen, from RM2.13 per litre to RM2.18. The new prices will be valid from March 1 to 7 under the weekly managed float system. (The Malay Mail) Japan Industrial Output Falls 6.6% In January Industrial production in Japan contracted a seasonally adjusted 6.6 percent on month in January, the Ministry of Economy, Trade and Industry said in Wednesday's preliminary reading. That missed forecasts for a decline of 4.0 percent following the 2.9 percent gain in December. On a yearly basis, industrial production added 2.7 percent - again missing forecasts for 5.3 percent and down from 4.4 percent in the previous month. Upon the release of the data, the METI maintained its assessment of industrial production saying that it is picking up slowly. Industries that weakened in January included transport equipment, business-oriented machinery and electronic parts and devices. Shipments were down 5.6 percent on month and up 4201percent on year. (RTT) Other news in Japan: Japan's housing starts logged a double-digit decline at the start of the year, the Ministry of Land, Infrastructure, Transport and Tourism said Wednesday. Housing starts decreased 13.2 percent year-on-year in January, faster than the 2.1 percent drop in December and the expected 4.7 percent decrease. Annualized housing starts totaled 856,000 compared to 936,000 in the previous month. The expected level was 940,000. (RTT) Retail sales in Japan were down a seasonally adjusted 1.8 percent on month in January, the Ministry of Economy, Trade and Industry said on Wednesday. That missed forecasts for a decline of 0.6 percent following the 0.9 percent gain in December. On a yearly basis, retail sales advanced 1.6 percent - again missing expectations for a gain of 2.4 percent and slowing from 3.6 percent in the previous month. Sales from large retailers advanced an annual 0.5 percent - exceeding forecasts for 0.4 percent and slowing from 1.1 percent a month earlier. (RTT) Page 7 of 10
10. 1-Mar-18 China Growth Loses Steam as Factory Activity Slips to 19-Month Low The pace of growth in China ’s manufacturing activity fell sharply in February as plants closed for the Lunar New Year and demand for Chinese exports waned. The official manufacturing purchasing managers index, a gauge of China’s factory activity, dropped to its lowest level in 19 months at 50.3 in February from 51.3 in January, the National Bureau of Statistics said Wednesday. That was well short of a forecast for a 51.2 reading by economists polled by The Wall Street Journal, though it stayed above the 50 mark that separates expansion from contraction. The lower-than-expected reading helped push down Chinese stocks, with the Shanghai Composite Index about 1% lower in midday trading. The days around the Lunar New Year are typically slow for the country’s manufacturing sector, as companies suspend or reduce production and market activity eases. Nonetheless, the broad drop was bigger than economists’ expectations, which had penciled in holiday factors. (The Wall Street Journal) India’s Quarterly GDP Increases 7.2% India’s economy grew at its fastest pace in more than a year last quarter, regaining the top spot from China of the world’s fastest-growing major economies. Asia’s third-largest economy grew 7.2% in the three months through December compared with a year earlier, government data show. The figure raised hope that the disruptions from dramatic policy moves by Prime Minister Narendra Modi last year may have faded. India’s growth beat economists’ prediction of 6.9% and was significantly stronger than the 6.5% and 5.7% expansion in the preceding quarters. China’s economic growth, which had overtaken India’s about a year ago, grew 6.8% last quarter. (The Wall Street Journal) Singapore PPI Falls for Second Month Singapore's producer prices declined for the second successive month in January, figures from the Department of Statistics showed Wednesday. The manufactured product price index dropped 1.9 percent year-over-year in January, faster than the 0.6 percent fall in December. The domestic supply price index decreased 0.3 percent annually in January, while it rose 0.5 percent from a month ago. On a monthly basis, producer prices declined 0.5 percent in January, reversing a 0.8 rise in December. Data also revealed that import prices slid 0.3 percent yearly in January, following a 0.4 percent drop in the preceding month. Export prices dipped 2.3 percent over the prior year, after a 2.4 percent fall in December. (RTT) United States Year-End Growth Revised Down, First Quarter Looks Set to Slow From There U.S. economic growth was slightly weaker than initially thought during the fourth quarter and may be cooling a bit in the first quarter as well. Gross domestic product, a broad measure of the goods and services produced across the U.S., rose at a 2.5% seasonally and inflationadjusted annual rate in the fourth quarter, the Commerce Department said Wednesday. The agency in January estimated last quarter’s growth rate at 2.6%. The government’s estimate of output was reduced because companies drew more from their inventories than previously estimated, meaning they had less to produce. Business investment also was slightly weaker than initially reported, growing at a 6.6% rate last quarter versus an originally reported 6.8%. The inventory drawdown could fuel restocking later in the year that leads to more production. Still some analysts have moved down their forecasts for first quarter growth in recent weeks after reports showing sluggish retail sales and durable-goods business orders. The Federal Reserve Bank of Atlanta, for example, has shifted its forecast for first quarter growth from 5.4% growth down to 2.6% since Feb. 1. Forecasting firm Macroeconomic Advisers projects a first quarter growth rate of 1.8% as of Wednesday. That would be slower than growth rates exceeding 3% in the middle of last year. (The Wall Street Journal) Page 8 of 10
11. 1-Mar-18 U .S. Pending Home Sales Gauge Falls to Lowest Since 2014 A gauge of contracts to purchase previously-owned U.S. homes unexpectedly declined in January to a more than three-year low, reflecting a shortage of inventories and rising mortgage rates, according to data released Wednesday from the National Association of Realtors in Washington. Index dropped 4.7% m/m (est. 0.5% gain) to 104.6, lowest since Oct. 2014, after no change (revised from 0.5% gain). Gauge fell 1.7% y/y on an unadjusted basis after 1.8% y/y drop in Dec. NAR reduced 2018 home-sales forecast to 5.5m from an actual 5.51m in 2017; previously projected an increase. The Realtors’ latest forecast for a decline in home sales this year would be the first annual decrease since 2014. The property market is settling into a cooler pace as there aren’t enough affordable listings to choose from. Rising property prices remain a hurdle, and prospective buyers also are facing an acceleration in mortgage costs. Until institutional investors begin to put their portfolio of homes up for sale and more hesitant homeowners decide to sell, the housing market will remain tight, the NAR said in a statement. (Bloomberg) Europe and Uni ted Kingdom Eurozone Inflation Dips to Weakest Level Since 2016 Inflation in the eurozone fell to its lowest level in more than a year in February, but core inflation remained steady ahead of next week’s closely-watched European Central Bank meeting. ECB economists next week will present revised quarterly projections for growth and inflation, which observers think could be key to the central bank’s decision over when to signal a final end to quantitative easing. Official figures from the EU’s statistics agency Eurostat on Wednesday showed the headline year on year inflation rate dipped from 1.3 per cent to 1.2 per cent in February, its weakest level since December 2016. Energy prices in particular have been driving a decline in headline inflation rate for several months, while February’s figure was also affected by a sharp pull-back in food price inflation, similar to the pattern seen in German figures yesterday, which were hit by the legacy of last-year’s lettuce shortage. Policymakers have warned that a stronger euro could threaten the ECB’s medium-term goal of keeping inflation below, but close to, 2 per cent, but despite the currency’s impressive recent gains against the dollar, it has remained fairly stable on a trade-weighted basis over the last six months. Wednesday’s data had little immediate impact on the euro, which was down around 0.15 per cent against the dollar at publication time. (Financial Times) Germany's Unemployment Falls Notably in February Germany's unemployment decreased notably in February, reports said citing data from Federal Labor Agency on Wednesday. The jobless claims decreased by 22,000 in February from the previous month, compared to the expected fall of 15,000. The jobless rate came in at 5.4 percent, which was the lowest since reunification in 1990. Elsewhere, Destatis said the number of unemployed decreased around 14,000 from the previous month to 1.55 million in January. The unemployment rate remained unchanged at seasonally adjusted 3.6 percent in January. On an unadjusted basis, the jobless rate rose to 3.6 percent from 3.5 percent a month ago. (RTT) Page 9 of 10
12. 1-Mar-18 Share Buy-Back : 28 February 2018 Company AMPROP EMETALL FIMACOR GLOMAC KPJ MALAKOF NYLEX REXIT SAUDEE SCGM TGUAN YILAI Bought Back Price (RM) Hi/Lo (RM) 68,000 374,000 1,500 42,000 50,000 700,000 71,000 60,700 5,000 11,000 186,200 4,200 0.73 0.685/0.675 2.00 0.54/0.52 0.99 0.915/0.91 0.80/0.79 0.73/0.725 0.47 2.29/2.24 3.13/3.08 0.75 0.74/0.715 0.685/0.67 2.00 0.54/0.505 1.01/0.94 0.92/0.91 0.80/0.79 0.73/0.72 0.47 2.33/2.18 3.20/3.02 0.75 Total Treasury Shares 15,910,700 394,000 4,204,000 5,758,400 66,820,600 19,556,400 5,964,324 10,839,100 79,000 838,600 186,200 9,086,508 Source: Bursa Malaysia Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 10 of 10
13. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) PER (X) Div Yield (%) FY18 FY19 FY18 FY19 FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD 28-Feb-18 AUTOMOBILE BAUTO 2.13 2.50 17.4% Buy 2,468 0.49 14.3 19.9 14.9 10.7 5.4 5.6 2.47 -13.8 1.84 15.8 MBMR 2.28 2.47 8.3% Hold 891 0.68 24.7 26.9 9.2 8.5 2.6 3.1 2.60 -12.3 2.01 13.4 -3.2 3.6 PECCA 1.35 1.62 20.0% Buy 249 0.45 9.7 10.9 13.9 12.4 3.7 3.7 1.70 -20.6 1.26 7.1 -12.9 SIME 2.76 2.13 -22.8% Sell 18,770 1.57 13.2 16.4 20.9 16.8 1.2 1.5 3.06 -9.8 2.03 36.2 24.9 UMW 6.50 4.37 -32.8% Sell 7,594 1.31 20.7 36.9 31.4 17.6 1.5 2.8 6.98 -6.9 4.70 38.3 25.0 BANKS & FINANCIAL SERVICES ABMB 4.12 4.60 11.7% Buy 6,378 1.26 32.6 35.8 12.6 11.5 3.9 3.9 4.49 -8.2 3.62 13.8 1.0 AFFIN 2.53 2.40 -5.1% Sell 4,916 0.93 22.2 23.9 11.4 10.6 3.2 3.2 2.98 -15.0 2.22 13.9 9.5 -6.1 AMBANK 4.14 4.70 13.5% Buy 12,479 1.40 38.1 44.4 10.9 9.3 4.3 4.3 5.70 -27.4 4.06 2.0 CIMB 7.19 8.60 19.6% Buy 66,332 1.68 58.2 59.9 12.3 12.0 4.0 4.2 7.39 -2.7 4.91 46.4 9.9 HLBANK 20.02 19.30 -3.6% Hold 40,953 0.84 116.8 126.8 17.1 15.8 2.4 2.4 20.02 0.0 13.28 50.8 17.8 MAYBANK 10.46 11.50 9.9% Buy 113,378 1.00 74.3 78.5 14.1 13.3 4.8 4.8 10.58 -1.1 8.59 21.8 6.7 PBBANK 23.00 27.30 18.7% Buy 88,814 0.72 153.3 166.5 15.0 13.8 2.7 2.8 23.04 -0.2 19.66 17.0 10.7 RHBBANK 5.38 6.10 13.4% Buy 21,574 1.55 54.3 59.0 9.9 9.1 2.8 2.8 5.61 -4.1 4.71 14.2 7.6 BURSA 11.30 11.80 4.4% Buy 6,074 0.93 43.9 45.0 25.8 25.1 3.2 3.2 11.48 -1.6 8.57 31.8 11.7 Note: BURSA proposed bonus issue of shares on the basis of 1 for 2. Ex-Target price RM7.04 BUILDING MATERIALS ANNJOO 3.75 4.34 15.7% Buy 1,939 1.33 43.8 46.7 8.6 8.0 5.8 6.6 3.98 -5.8 2.27 65.2 -2.8 CHINHIN 1.04 1.39 33.7% Buy 579 1.01 11.4 11.1 9.1 9.3 6.2 5.4 1.49 -30.2 1.00 4.5 -14.0 ENGTEX 1.08 1.38 27.8% Buy 459 0.82 14.2 16.1 7.6 6.7 3.8 5.1 1.52 -28.9 1.01 6.9 -1.8 GADANG 1.06 1.69 59.4% Buy 700 1.10 14.2 18.1 7.5 5.8 2.8 2.8 1.37 -22.6 1.01 5.0 -4.5 GAMUDA 4.96 6.00 21.0% Buy 12,187 0.86 34.5 35.7 14.4 13.9 2.4 2.4 5.52 -10.1 4.58 8.3 0.0 IJM 2.72 2.89 6.3% Sell 9,869 1.15 13.7 18.2 19.8 15.0 3.5 3.5 3.61 -24.7 2.66 2.3 -10.8 CONSTRUCTION KAB 0.29 0.38 31.6% Buy 9 na 31.4 37.3 0.9 0.8 3.5 4.2 0.33 -13.6 0.25 16.3 -5.0 PESONA 0.40 0.46 15.0% Buy 278 1.11 5.0 4.5 8.1 8.8 3.8 3.8 0.74 -45.6 0.39 3.9 -11.1 -4.0 SENDAI 0.83 0.55 -33.7% Sell 648 1.21 9.1 8.5 9.2 9.8 1.2 1.2 1.39 -40.3 0.51 64.4 SUNCON 2.40 2.65 10.4% Hold 3,101 0.57 14.7 16.4 16.3 14.6 3.3 3.8 2.64 -9.1 1.70 41.2 -4.4 WCT 1.54 1.50 -2.6% Sell 2,167 0.89 11.3 10.8 13.6 14.2 1.9 1.9 2.48 -37.8 1.46 5.5 -4.9 LITRAK 5.85 6.26 7.0% Hold 3,088 0.37 45.6 47.1 12.8 12.4 4.3 4.3 6.15 -4.9 5.40 8.3 5.4 CARLSBG 18.48 18.09 -2.1% Buy 5,685 0.77 87.8 91.8 21.1 20.1 4.7 4.9 18.48 0.0 14.12 30.9 20.8 HEIM 21.10 21.64 2.6% Hold 6,374 0.39 93.0 101.3 22.7 20.8 4.0 4.3 21.52 -2.0 16.98 24.3 11.6 AEON 1.47 1.97 34.0% Buy 2,064 0.33 7.7 9.2 19.0 16.0 3.1 3.4 2.52 -41.7 1.45 1.4 -16.5 AMWAY 7.58 8.59 13.3% Buy 1,246 0.47 48.4 49.9 15.7 15.2 5.3 5.4 8.18 -7.3 7.04 7.7 2.7 F&N 30.60 33.74 10.3% Buy 11,216 0.25 122.7 145.8 24.9 21.0 2.6 3.1 31.00 -1.3 22.80 34.2 13.3 CONSUMER Brewery Retail HUPSENG 1.08 1.25 15.7% Buy 864 0.41 5.7 5.9 18.9 18.3 5.6 5.6 1.28 -15.6 1.05 2.9 -0.9 JOHOTIN 1.12 1.48 32.1% Buy 348 0.95 11.1 11.9 10.1 9.4 5.4 5.8 1.76 -36.4 1.00 12.0 -7.4 NESTLE 128.10 129.90 1.4% Hold 30,039 0.54 322.2 360.2 39.8 35.6 2.3 2.5 128.10 0.0 75.40 69.9 24.1 PADINI 4.96 4.67 -5.8% Sell 3,263 0.77 28.0 30.4 17.7 16.3 2.5 2.6 5.50 -9.8 2.77 79.2 -6.1 POHUAT 1.56 2.01 28.8% Buy 343 0.59 22.9 25.4 6.8 6.1 5.1 5.1 2.07 -24.6 1.43 9.1 -12.8 QL 4.94 5.41 9.5% Hold 8,015 0.59 12.8 14.7 38.5 33.5 0.9 1.0 4.98 -0.8 3.26 51.7 13.6 SIGN 0.64 0.92 44.9% Buy 145 0.69 6.9 9.2 9.1 6.9 3.9 5.5 1.07 -40.7 0.57 11.4 -9.9 28.40 34.72 22.3% Hold 8,109 1.40 170.8 168.8 16.6 16.8 5.6 5.6 49.02 -42.1 28.00 1.4 -29.0 GENTING 8.85 11.58 30.8% Buy 33,908 1.47 55.1 61.8 16.0 14.3 1.8 1.8 10.00 -11.5 8.70 1.7 -3.8 GENM 5.27 6.68 26.8% Buy 29,822 1.44 27.6 32.0 19.1 16.5 2.3 2.5 6.38 -17.4 4.87 8.2 -6.4 2.25 3.34 48.4% Buy 3,031 0.60 21.5 26.0 10.5 8.6 7.1 8.0 2.98 -24.5 2.20 2.3 0.4 CCMDBIO 2.97 3.40 14.5% Buy 829 0.88 16.2 17.4 18.3 17.1 3.6 3.8 3.05 -2.6 1.97 50.8 17.4 IHH 5.91 6.40 8.3% Sell 48,696 0.79 11.9 15.0 49.8 39.5 0.5 0.6 6.33 -6.6 5.42 9.0 0.9 KPJ 0.99 1.13 14.7% Buy 4,152 0.55 3.9 4.3 25.5 22.9 2.2 2.4 1.14 -13.6 0.87 13.2 1.5 HARTA 11.68 7.80 -33.2% Sell 19,336 1.11 25.2 28.9 46.4 40.4 1.3 1.5 12.18 -4.1 4.70 148.5 9.4 KOSSAN 8.57 9.73 13.5% Buy 5,480 0.53 37.4 42.1 22.9 20.4 2.2 2.5 8.79 -2.5 5.62 52.5 5.7 SUPERMX 2.62 2.70 3.1% Buy 1,718 0.62 20.0 22.6 13.1 11.6 2.6 2.9 2.74 -4.4 1.69 55.0 31.0 TOPGLOV 9.71 9.35 -3.7% Sell 12,196 0.66 41.6 50.8 23.4 19.1 1.5 1.8 10.24 -5.2 4.56 112.9 21.5 KAREX 1.04 0.93 -10.6% Sell 1,042 0.76 1.8 3.1 58.6 34.1 0.4 0.8 2.30 -54.8 1.03 1.0 -20.0 SCIENTX 8.62 10.01 16.1% Buy 4,215 0.88 67.5 79.4 12.8 10.9 2.4 3.0 9.85 -12.5 7.20 19.7 -0.5 SKPRES 1.90 2.20 15.8% Buy 2,375 0.86 10.4 14.8 18.3 12.8 2.7 3.9 2.35 -19.1 1.24 53.2 -16.7 ASTRO 2.42 3.10 28.1% Buy 12,618 0.82 14.0 13.7 17.3 17.7 5.4 5.6 2.94 -17.7 2.40 0.8 -8.7 MEDIA PRIMA 0.54 0.45 -16.7% Sell 599 1.21 -3.8 -1.7 na na 0.0 0.0 1.28 -57.8 0.53 2.9 -28.9 STAR 1.30 1.25 -3.8% Sell 959 1.05 6.7 6.7 19.3 19.3 9.2 9.2 2.22 -41.4 1.30 0.0 -21.2 Tobacco BAT GAMING Casino NFO BJTOTO HEALTHCARE Hospitals/ Pharmaceutical Rubber Gloves INDUSTRIAL MEDIA
14. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) FY18 PER (X) Div Yield (%) FY19 FY18 FY19 FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.46 0.72 56.5% Buy 808 1.56 4.2 4.5 11.0 10.2 2.2 2.2 0.69 -33.3 0.38 22.7 -5.2 LCTITAN 5.52 6.10 10.5% Buy 12,547 na 56.3 60.9 9.8 9.1 4.5 4.9 6.53 -15.5 4.14 33.3 17.4 MHB 0.80 0.81 1.9% Sell 1,272 1.36 0.5 1.7 165.2 47.6 0.0 0.0 1.16 -31.5 0.63 27.2 -3.6 MISC 6.86 7.00 2.0% Sell 30,622 1.12 50.1 53.8 13.7 12.8 4.4 4.4 7.90 -13.2 6.73 1.9 -7.5 PANTECH 0.60 0.69 15.0% Buy 447 1.22 6.1 6.8 9.9 8.8 4.6 5.1 0.74 -18.9 0.47 29.0 -7.0 PCHEM 8.09 8.84 9.3% Hold 64,720 0.86 52.5 53.8 15.4 15.0 3.2 3.2 8.28 -2.3 6.80 19.0 5.1 SAPNRG 0.67 1.25 86.6% Buy 4,015 1.96 -6.5 -5.0 na na 0.0 0.0 2.10 -68.1 0.66 1.5 -5.6 SERBADK 3.68 4.15 12.8% Buy 5,404 na 27.7 31.5 13.3 11.7 2.4 2.7 3.68 0.0 1.63 125.8 13.6 UMWOG 0.32 0.39 21.9% Buy 2,629 1.82 0.4 1.2 83.7 27.6 0.0 0.0 0.68 -52.8 0.27 18.5 4.9 UZMA 1.38 1.57 13.8% Hold 442 0.85 13.1 13.9 10.6 9.9 0.0 0.0 1.98 -30.3 1.26 9.5 7.8 FGV 1.94 1.98 2.1% Sell 7,077 1.62 3.5 4.4 56.2 44.5 2.6 2.6 2.18 -11.0 1.51 28.5 14.8 IJMPLNT 2.30 2.25 -2.2% Sell 2,025 0.22 6.7 10.8 34.1 21.3 3.5 3.9 3.38 -32.0 2.28 0.9 -16.1 IOICORP 4.69 5.08 8.3% Sell 29,471 0.93 20.9 21.6 22.5 21.7 6.3 3.7 4.82 -2.7 4.31 8.8 3.3 KFIMA 1.51 1.89 25.2% Buy 426 0.69 14.1 14.7 10.7 10.3 6.0 6.0 1.96 -23.0 1.45 4.1 -3.8 KLK 25.04 27.07 8.1% Hold 26,667 0.65 120.7 125.7 20.7 19.9 2.4 2.5 25.78 -2.9 23.66 5.8 0.2 SIMEPLT 5.35 6.25 16.8% Buy 36,384 na 21.0 22.1 25.4 24.3 2.6 2.8 6.00 -10.8 4.58 16.8 -10.8 TSH 1.58 1.97 24.7% Buy 2,182 0.52 8.9 9.4 17.7 16.8 1.4 1.5 1.90 -16.8 1.56 1.3 -4.2 UMCCA 6.29 6.73 7.0% Sell 1,319 0.39 22.7 34.8 27.7 18.1 2.7 2.9 7.08 -11.2 5.76 9.2 -3.4 GLOMAC 0.54 0.46 -14.8% Sell 429 0.73 3.0 4.4 18.3 12.2 3.7 3.7 0.67 -19.7 0.50 9.1 -2.6 HUAYANG 0.58 0.58 0.0% Sell 204 0.91 0.7 3.4 88.8 17.1 0.9 0.9 1.16 -50.0 0.58 0.9 -4.9 IBRACO 0.71 0.80 12.7% Buy 352 na 7.2 10.7 9.8 6.6 4.2 5.6 0.98 -27.2 0.50 42.0 -12.9 IOIPG 1.85 2.00 8.1% Sell 10,186 0.86 16.3 15.6 11.3 11.8 3.2 3.2 2.22 -16.7 1.79 3.4 0.0 MAHSING 1.20 1.59 32.5% Buy 2,913 0.93 11.8 11.3 10.2 10.7 5.4 5.4 1.64 -26.8 1.20 0.0 -17.2 PLANTATIONS PROPERTY SIMEPROP 1.41 1.51 7.1% Hold 9,589 na 7.5 7.5 18.8 18.8 2.8 2.1 1.78 -20.8 1.04 35.6 -20.8 SNTORIA 0.64 0.76 18.8% Buy 360 0.16 8.3 8.6 7.7 7.5 1.6 1.6 0.91 -29.6 0.56 14.3 -7.9 SPB 4.75 5.10 7.4% Hold 1,632 0.55 21.2 26.1 22.5 18.2 2.5 2.5 5.50 -13.6 4.39 8.2 -3.1 SPSETIA 3.39 3.73 10.0% Buy 12,723 0.94 21.7 21.2 15.6 16.0 3.5 3.5 4.38 -22.7 3.07 10.4 -15.3 SUNWAY 1.65 1.75 6.1% Hold 8,078 0.93 11.8 12.4 14.0 13.3 3.0 3.6 1.96 -15.8 1.31 25.8 1.2 SUNREIT 1.69 1.87 10.7% Hold 4,977 0.83 10.0 10.7 16.8 15.8 5.9 6.3 1.90 -11.1 1.64 3.0 -11.1 CMMT 1.02 1.64 60.8% Buy 2,079 0.71 7.9 8.6 12.9 11.8 8.0 8.7 1.83 -44.3 1.02 0.0 -44.3 REIT POWER & UTILITIES MALAKOF 0.91 0.82 -9.9% Sell 4,527 0.93 6.6 7.2 13.8 12.7 7.7 7.7 1.30 -30.0 0.86 5.8 -7.1 PETDAG 25.80 24.08 -6.7% Sell 25,631 0.45 114.7 116.3 22.5 22.2 3.3 3.4 26.20 -1.5 21.00 22.9 6.3 PETGAS 17.62 19.46 10.4% Buy 34,865 0.88 99.3 100.0 17.7 17.6 3.9 4.0 20.24 -12.9 15.82 11.4 0.8 TENAGA 15.70 18.22 16.1% Buy 88,956 0.55 131.3 127.5 12.0 12.3 4.1 4.0 16.12 -2.6 13.44 16.8 2.9 YTLPOWR 1.13 1.16 2.7% Sell 8,784 0.89 8.6 8.9 13.1 12.7 4.4 4.4 1.50 -24.7 1.11 1.8 -12.4 -1.6 TELECOMMUNICATIONS AXIATA 5.40 6.50 20.4% Buy 48,862 1.53 15.9 19.5 33.9 27.8 1.5 2.9 5.82 -7.2 4.35 24.1 DIGI 4.84 5.15 6.4% Hold 37,631 0.95 19.7 20.4 24.6 23.8 4.1 4.2 5.19 -6.7 4.36 11.0 -5.1 MAXIS 5.91 6.05 2.4% Sell 46,160 1.07 25.2 25.0 23.5 23.6 3.2 3.2 6.60 -10.5 5.48 7.8 -1.7 TM 5.90 7.20 22.0% Buy 22,172 0.63 22.8 24.9 25.8 23.7 3.5 3.8 6.69 -11.8 5.85 0.9 -6.3 ELSOFT 2.49 3.30 32.5% Buy 685 0.84 13.1 15.0 19.0 16.6 3.7 4.2 2.95 -15.6 1.58 57.4 -7.8 IRIS 0.18 0.22 25.7% Buy 433 2.47 0.0 0.3 618.0 55.5 0.0 0.0 0.25 -28.6 0.12 52.2 -5.4 INARI 3.38 3.65 8.0% Hold 6,983 0.71 13.8 15.3 24.5 22.0 2.9 3.3 3.82 -11.5 1.88 80.2 -0.6 TECHNOLOGY Semiconductor & Electronics Note: INARI proposed bonus issue shares on the basis of 1 for 2. For more detail please refer to 30.01.18 report. MPI 9.16 10.70 16.8% Hold 1,822 0.83 73.9 86.9 12.4 10.5 3.5 3.5 14.52 -36.9 8.62 6.3 -27.4 UNISEM 2.71 2.70 -0.4% Sell 1,989 1.14 17.1 18.4 15.8 14.7 4.4 4.4 4.25 -36.2 2.52 7.5 -25.8 TRANSPORTATION Airlines AIRASIA 4.38 4.93 12.6% Buy 14,637 1.05 40.9 40.9 10.7 10.7 1.8 1.8 4.49 -2.4 2.58 69.8 30.7 AIRPORT 8.70 8.61 -1.0% Sell 14,435 1.29 17.9 18.7 48.7 46.6 1.5 1.1 9.45 -7.9 6.43 35.3 -1.0 Freight & Tankers PTRANS 0.29 0.46 58.6% Buy 365 na 2.3 3.8 12.4 7.7 2.4 3.7 0.38 -24.0 0.16 87.6 3.6 TNLOGIS 1.14 1.45 27.2% Buy 521 1.04 10.3 10.5 11.1 10.8 4.4 4.4 1.83 -37.8 1.10 3.6 -14.9 WPRTS 3.68 4.06 10.3% Buy 12,549 0.43 15.6 20.0 23.6 18.4 1.0 1.3 4.19 -12.2 3.12 17.9 -0.5 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) % upside Recom Market Cap. (S$m) Beta EPS (cent) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52week 52week % Chg High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 28.70 30.50 6.3% Buy 73,583 1.13 212.3 246.0 13.5 11.7 2.3 2.4 29.7 -3.4 18.47 55.4 OCBC 13.06 14.30 9.5% Buy 54,659 1.22 109.5 123.2 11.9 10.6 6.7 7.7 13.6 -4.0 9.42 38.6 15.5 5.4 UOB 27.89 27.80 -0.3% Hold 46,363 1.18 216.6 243.9 12.9 12.9 2.9 2.9 28.8 -3.2 21.30 30.9 5.4 PLANTATIONS WILMAR 3.23 3.31 2.5% Hold 20,667 0.82 29.9 31.8 10.8 10.2 2.5 2.8 3.9 -16.5 2.97 8.8 4.5 IFAR 0.33 0.36 9.1% Buy 473 0.94 5.2 5.7 6.4 5.8 3.9 4.2 0.5 -39.4 0.33 0.0 -15.4 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
15. RESULTS UPDATE Thursday , March 01, 2018 FBMKLCI: 1,856.20 Sector: Consumer THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM1.97 (+34.2%) Aeon Co. (M) Bhd Last Traded: RM1.47 Expansion Plan Coming to Fruition Damia Othman Tel: +603-2167-9602 Buy damia@ta.com.my Review Aeon Co. (M) Bhd’s (Aeon) FY17 adjusted net earnings came in above our full-year forecast by 35% but below consensus estimates 17%. This variance was due to higher-than-expected profit margin. FY17 adjusted net profit increased by 8.3% YoY to RM89.2mn after excluding exceptional items of RM15.8mn. This was due to stellar performance across segments where the Retailing operating profit improved by more than 100% to RM39.3mn on the back of higher profit margin resulted from: i) pricing strategies and ii) merchandise assortment recorded. Operating profit for the Property Management segment increased by 14.7% YoY to RM239.8mn after the opening of new Aeon Bandar Dato Onn in Johor Bahru coupled with strong revenue from newly-renovated and expanded malls. QoQ, Aeon’s adjusted net profit increased by more than 100% to RM26.2mn. Segmentally, Operating profit from the Retailing segment returned to the black at RM44.9mn from an operating loss of RM12.2mn in the preceding quarter due to better product margins. Revenue also increased by 8.3% QoQ due to year-end festive season sales. Property Management segment operating profit improved by 43.6% QoQ to RM76.6mn on the back of contribution from the newly-opened mall. The board declared an ordinary dividend of 4.0sen/share for FY17 (previously 3.0sen/share in FY16). Impact We increase our earnings forecasts by 15.4% and 18.9% for FY18 and FY19 respectively after taking into consideration stellar performance from FY17. We also introduce our profit forecast for FY20, which is expected to grow by 9.5% YoY to RM140.8mn. Outlook Aeon has allocated a CAPEX of RM500mn each for FY18 and FY19, which will be used to: i) finance the opening of new mall in Kuching by FY19; ii) re-open Taman Maluri Cheras mall extension by FY19; iii) construction of Nilai mall to be completed by FY19 and; iv) refurbishment of stores for Bandar Utama, Bandar Sunway as well as Seremban 2. This is lower than the RM700mn Capex budgeted for FY15 and FY16 each and this is expected to bring down the group’s net gearing to below 0.5x levels. FY18 earnings growth within the retailing segment is expected to be driven by: i) implementing appropriate product pricing; ii) reformation of merchandising mix; iii) active promotions; iv) strengthening of operation efficiency to improve financial performance within the retailing segment and; v) maintaining quality customer service. Meanwhile, we project the property segment sales growth of 13.1% driven mainly by i) sustainable www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (RMmn) Par Value 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) Aeon Co Aberdeen EPF Aeon MK 6599 Main Market 1404.0 2,063.9 0.50 2.52/1.45 609.8 31.2 0.33 51.7 18.8 8.6 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 15.4 18.9 108.4 128.6 108.1 117.8 100.3 109.1 Sell (Upgraded) Financial Indicators Net debt/equity (%) ROE (%) ROA (%) NTA/Share (RM) Price/ NTA (x) FY17 46.7 5.4 2.3 1.4 1.0 FY18 45.4 6.2 2.7 1.5 1.0 % of FY17 135 83 Above Below AEON (10.4) (18.8) (26.9) (37.4) FBM KLCI (0.7) 8.1 4.7 9.3 Scorecard vs. TA vs. Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 3
16. 1-Mar-18 occupancy rate across all malls ; ii) stable rental rates and; iii) favourable tenant mix to entice visitation. Valuation We upgrade our call from Sell to BUY with an unchanged target price of RM1.97/share based on DDM valuation (WACC: 6.6%, g: 3.0%). We believe the aggressive expansion plan started by Aeon since FY13 is coming to fruition due to: i) positive sales response from newly-opened and refurbished malls and stores; ii) higher disposable income post Budget 2018 announcement; and iii) positive consumer sentiment due to 14th GE season and World Cup fever in 2H18. Quarterly Results Analysis (RMmn) FYE 31 Dec (RMmn) Revenue EBIT Extraordinary Items Net Interest Associates Profit Before Tax Taxation Minority Interest Net Profit Adj. Net Profit Basic EPS DPS (sen) (sen) EBIT Margin PBT Margin Net Margin Tax Rate (%) (%) (%) (%) 4QFY16 1,018.8 74.2 (6.1) (10.9) 0.4 63.7 (32.7) 31.0 24.9 2.2 3.0 3QFY17 962.7 27.1 (0.3) (9.9) 0.1 17.3 (9.2) (1.2) 8.1 6.6 0.7 - 4QFY17 1,067.2 99.1 (12.9) (10.3) (7.0) 81.9 (42.7) 39.2 26.2 2.8 4.0 7.3 6.3 3.0 51.4 2.8 1.8 0.8 53.1 9.3 7.7 3.7 52.2 QoQ (%) 10.9 265.9 >+100 3.6 nm 374.1 366.1 nm >+100 >+100 >+100 >+100 %-points 6.5 5.9 2.8 (0.9) YoY (%) 4.7 33.6 >+100 (5.8) nm 28.5 30.5 nm 26.4 5.5 26.2 33.3 %-points 2.0 1.4 0.6 0.8 FY16 4,018.7 197.6 (8.5) (35.4) 0.9 163.0 (72.1) 90.9 82.4 6.5 3.0 FY17 4,088.2 240.5 (15.8) (39.5) (7.2) 193.8 (88.8) 105.0 89.2 7.5 4.0 4.9 4.1 2.3 44.2 5.9 4.7 2.6 45.8 YoY (%) 1.7 21.7 85.5 11.6 nm 18.9 23.1 nm 15.5 8.3 15.6 33.3 %-points 1.0 0.7 0.3 1.6 Segmentally Results Analysis (RMmn) FYE 31 Dec Revenue Retailing Property Management Operating profit Retailing Property Management 4QFY16 1,002.9 844.3 158.7 80.2 26.3 53.9 3QFY17 962.7 802.5 160.2 41.1 (12.2) 53.3 4QFY17 1,045.5 868.8 176.7 121.5 44.9 76.6 8.0 3.1 34.0 4.3 (1.5) 33.3 11.6 5.2 43.3 Operating margin (%) Retailing (%) Property Management (%) QoQ (%) 8.6 8.3 10.3 >+100 nm 43.6 %-points 7.3 6.7 10.0 YoY (%) 4.2 2.9 11.4 51.5 70.9 42.0 %-points 3.6 2.1 9.4 FY16 4,018.7 3,417.7 601.0 223.8 14.7 209.1 FY17 4,088.2 3,423.8 664.4 279.1 39.3 239.8 5.6 0.4 34.8 6.8 1.1 36.1 YoY (%) 1.7 0.2 10.5 24.7 >+100 14.7 %-points 1.3 0.7 1.3 Earnings Summary (RMmn) FYE 31 Dec (RMmn) Revenue Adj. EBIT EBITDA Reported PBT Adj. Net profit Adj. EPS EPS Growth PER Net Dividend Dividend Yield (sen) (%) (x) (sen) (%) FY16 4,018.7 197.6 461.4 163.0 82.4 5.9 (38.2) 25.1 3.0 2.0 FY17E 4,088.2 240.5 531.8 193.8 89.2 6.4 8.3 23.1 4.0 2.7 FY18F 4,759.2 239.3 536.3 200.0 108.4 7.7 21.5 19.0 4.5 3.1 FY19F 4,997.8 277.8 583.6 237.3 128.6 9.2 18.6 16.1 5.0 3.4 FY20F 5,248.6 299.1 612.8 259.9 140.8 10.0 9.5 14.7 5.5 3.7 Page 2 of 3
17. 1-Mar-18 (TH I S P A GE IS IN TE N TI ON AL L Y L E F T B L AN K ) (THIS PAGE IS INTENTIONALLY LEFT BLANK) Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, March 01, 2018, the analyst, Damia Othman, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
18. RESULTS UPDATE Thursday , March 01, 2018 FBMKLCI: 1,856.20 Sector: Finance THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM2.40 (-1.6%) Affin Holdings Berhad Last Traded: RM2.44 FY17 Dampened by Higher Costs and Allowances Li Hsia Wong Tel: +603-2167 9610 SELL liwong@ta.com.my Review Affin FY17 results fell short of ours and consensus expectations. Accounting for around 92% of our net profit forecast, results were dampened by higher-than-expected operating expenses and allowances. On a positive note, topline growth was encouraging, led by a 69% YoY acceleration in non-interest income (non-NII). Total income climbed by 17.8% YoY. The increase helped support the rise in costs, which ballooned by some 34.6% YoY. Normalisation in credit costs saw Affin report total allowances of RM85.2mn vs. RM27.6mn in FY16. Sequentially, net profit surged 131.4%, anchored by a 66.8% reduction in total allowances and softer overhead expenses (-22.6% QoQ). Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (RMmn) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta LTAT - 35.4 BEA - 23.5 Boustead - 20.7 Forecast Revision Net interest income (NII) widened 2.8% YoY while contributions from Islamic Banking business advanced by 22.5% YoY. Gross loans broadened at a robust pace of 7% YoY, led by advances in consumer based loans (+13.5% YoY) such as for the purchase of securities (>100% YoY), credit cards (+22.3% YoY) and residential mortgages (+19.6% YoY). In the business segment, SME loans widened by marginal 0.1% but was supported by an increase of 6.0% from other (non-SME) businesses. Total deposits accelerated by 6.9% YoY - in tandem with loan growth, to RM50.9bn. The loan to deposit ratio stood at 90.4%. ROE (%) ROA (%) CTI Ratio (%) Gross NPL Ratio (%) BV/ Share (RM) Price/ BV (x) Compared to FY16, total allowances widened to RM71.6mn vs. RM23.7mn. The increase in allowances were attributed to higher individual impairments, decline in writebacks and lower bad debts recovered. The formation of new NPLs accelerated by some RM480mn during the year. While we note some increase in consumer impaired loans (mostly due to RM150mn surge in HP loans), bulk of the increase during the quarter was fuelled by impairments in the non-residential property space and the construction segment. Elsewhere, the CET1 and AHB MK 5185 Main Market 1942.9 4,740.7 2.975/2.221 319.9 12.9 1.04 Major Shareholders (%) Yearly, total income accelerated, driven by higher contributions from Islamic banking operations and non-interest income (non-NII). FY17 fee income almost doubled to RM212.2mn from RM106.4mn a year ago. Stronger profit from disposal of financial assets and investments helped boost income from financial instruments to RM94.3mn vs. RM43.5mn in 9M16. Operating expenses surged 34.6% YoY, underpinned by jumps in personnel costs (+55.4% YoY), marketing expenses (+30.7% YoY), and admin & general expenses (+24.1% YoY). Higher personnel costs were driven by an increase in headcount and one-off provision for VSS amounting to RM46.5mn. Marketing expenses surged on the back of higher commission and brokerage expenses to RM11.9mn from RM9.9mn a year ago. The cost-to-income (CTI) ratio climbed to 60% vs. 52% in FY16. www.taonline.com.my Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) FY18 (8.2) 432.3 n.a. n.a. FY19 (14.7) 465.3 n.a. n.a. FY18 5.4 0.6 58.8 1.6 4.0 0.6 FY19 5.8 0.6 58.3 1.4 4.2 0.6 % of FY 92.0 n.a. Below n.a. AHB (3.6) 3.0 (3.4) (1.2) FBM KLCI (0.7) 8.1 4.7 9.6 Financial Indicators Scorecard vs. TA vs. Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 3
19. 1-Mar-18 Total Capital Ratio for the group stood at 12 .2% and 17.2%. Impact Incorporating FY17 results but keeping our assumptions broadly unchanged, we adjust FY18 and FY19 net profit estimates to RM432.3mn and RM465.3mn from RM470.7mn and RM545.3mn previously. We forecast FY20 net profit to increase 14.5% to RM532.7mn. Outlook While we remain positive over the group’s new transformation efforts, we believe competition among other industry players will continue to intensify. Nevertheless, with many of its competitors at more advance stages in terms of technology, Affin’s Internet and Mobile Banking upgrades are timely to help retain loyalty from its existing customer base, in our view. Valuation We lower Affin’s TP to RM2.40 from RM2.70 on the back of the downward adjustment to our earnings estimates. This represents an implied FY18 PBV of around 0.6x, still a steep discount compared to industry peers average of 1.25x. Nevertheless, we downgrade Affin from hold to SELL on the back of reduced earnings estimates and TP. Table 1: Earnings Summary (RMmn) FYE Dec Net interest income Non-interest income Islamic Banking Total operating income Pre-provisioning profit Pretax profit Net profit EPS (sen) EPS growth (%) Gross div (sen) Div yield (%) 2016 832.1 219.5 272.8 1324.4 630.3 602.8 464.1 20.2 25.7 8.0 3.3 2017 855.3 370.9 334.3 1560.5 626.2 554.1 417.9 18.2 (10.0) 8.0 3.3 2018F 1032.1 415.4 367.7 1815.2 747.0 583.4 432.3 18.9 3.4 8.0 3.3 2019F 1065.9 466.0 404.5 1936.4 807.5 622.7 465.3 20.3 7.6 8.0 3.3 2020F 1134.6 523.6 444.9 2103.2 909.9 710.2 532.7 23.2 14.5 8.0 3.3 Table 2: 4QFY17 Results Analysis (RMmn) FYE Dec Net interest income Income from Islamic Banking business Non-interest income Total income Operating expenses Operating profit Total allowances Finance costs Profit from associates/ JVs PBT Net profit 4Q FY16 210.2 79.5 3Q FY17 241.3 84.6 4Q FY17 225.7 98.5 QoQ (6.5) 16.5 68.9 358.7 (172.4) 186.3 (19.0) 0.0 167.3 130.0 6.7 220.8 546.7 (400.3) 146.4 (42.0) 4.3 108.7 73.3 3.8 210.5 534.7 (310.0) 224.7 (13.9) 13.1 223.8 169.5 8.7 (4.7) (2.2) (22.6) 53.5 (66.8) 207.4 106.0 131.4 131.4 YoY 7.4 23.9 FY16 832.1 272.8 FY17 855.3 334.3 205.3 49.1 79.8 20.6 (26.6) n.m. 33.8 30.5 30.5 219.5 1,324.4 (694.1) 630.3 (27.6) 0.0 602.8 464.1 23.9 370.9 1,560.5 (934.3) 626.2 (85.2) 13.1 554.1 417.9 21.5 YoY 2.8 22.5 69.0 17.8 34.6 (0.7) 209.1 n.m. (8.1) (10.0) (10.0) Page 2 of 3
20. 1-Mar-18 (TH I S P A GE IS IN TE N TI ON AL L Y L E F T B L AN K ) (THIS PAGE IS INTENTIONALLY LEFT BLANK) Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, March 01, 2018, the analyst, Wong Li Hsia, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3