Bursa Malaysia Daily Market Report - 12 February

Transcription

1. Monday , 12 February, 2018 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only News 1. 2. 3. Daily Market Commentary Weekly Strategy Weekly Technical Outlook Fundamental Reports 1. 2. Malaysian Economy: Weak December IPI Result; but Strong 2017 Perak Transit Berhad: Rent Escalations Technical Reports 1. 2. 3. 4. Weekly Technical Stock Picks Daily Money Flow FBMKLCI Weekly Stock Screen Weekly Foreign Stock Watch (AUS, HK, FSSTI & US) 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 Monday , 12 February 2018 TA Research, e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (09.02.2018) Volume Main Market 1,575.7 273.7 Warrants 511.2 125.7 ACE Market 359.6 -3.0 Bond 5.3 2.5 ETF 0.2 -0.9 LEAP 0.0 (0.2) Total 2,452.0 Off Market 78.1 74.8 2,507.1 106.1 58.4 1.7 0.3 0.0 2,673.6 197.2 Value 577.1 14.0 -2.7 0.9 -1.0 -0.1 194.0 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP February 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 30.0 13.3 10.0 9.9 6.0 5.9 2.0 1.0 % chg % YTD chg Nevertheless, any further sharp dips on key banking and utility blue chips such as ABMB, AMBank, RHB Bank and TM should encounter buying support cushioning downside, while construction related stocks like Ekovest, Mudajaya, Naim Holdings and WCT Holdings should also attract bargain hunters at current depressed levels. -19.62 -130.47 -257.75 -17.50 -1.07 -1.00 -1.57 -0.96 1.28 0.25 -5.46 1.65 24,190.90 6,874.49 7,092.43 21,382.62 2,363.77 29,507.42 3,377.24 1,786.45 6,505.52 3,129.85 1,679.26 5,837.97 330.44 97.33 -78.26 -508.24 -43.85 -943.85 -38.66 -0.21 -39.11 -132.20 -55.31 -52.73 1.38 1.44 -1.09 -2.32 -1.82 -3.10 -1.13 -0.01 -0.60 -4.05 -3.19 -0.90 -2.14 -0.42 -7.74 -6.07 -4.20 -1.38 -0.75 1.87 2.36 -5.36 -11.59 -3.75 (mn) News Bites Top 10 KLCI Movers Based on Mkt Cap. (RM) @ @ @ @ @ @ @ @ 537 261 92 6 4 0 900 2.72 0.15 0.07 10.02 1.49 0.28 0.15 0.09 Exchange Rate USD/MYR 3.9580 -0.003 USD/JPY 109.14 0.300 EUR/USD 1.226 0.0013 Counter MAYBANK TENAGA PBBANK CIMB AXIATA MAXIS DIGI HLBANK PETGAS GENTING Due to visible deterioration on trend and momentum technical indicators following last week's severe correction, investors should expect the recent high volatility to persist for another week. Despite last Friday's rebound on Wall Street, downside risk persists unless there is proof that leveraged lowvolatility or so-called short-volatility bets, which are some derivative products blamed for the recent huge stock price swings, are unwound. On the index, monitor the crucial resistance-turn-support level at 1,796, the June 2017 peak matching the recent low, which must hold to prevent further correction potential towards next support from 1,778, the 38.2%FR of the 1,614 low of Nov 2016 to the recent 1,880 high. Failure of this support means that the 50%FR at 1,747 should be tested for resilience. Immediate resistance will be 1,840, mirroring the 9 Jan high, with the 2 Feb peak of 1,880 acting as a formidable hurdle. 1,819.82 12,975.06 16,120.74 1,814.50 Off Market SIME ALAM XINGHE MAYBANK SIMEPROP LEWEKO NWP PA Review & Outlook Value/ 1.59 130 0.21 65 0.16 11 0.33 1 1.63 1 0.00 0 1.09 208 2.53 Mkt Cap. Chg (RM’mn) (RM) 108,434 89,069 84,181 63,287 49,041 45,926 37,320 36,616 34,588 33,638 -0.06 -0.08 -0.18 -0.24 -0.06 -0.19 -0.06 -0.10 -0.52 -0.22 Vol. (mn) 9.94 8.77 7.16 22.90 7.98 6.96 5.46 0.90 0.61 7.72 Commodities Futures Palm Oil (RM/mt) 2,516.00 16.00 Crude Oil ($/Barrel) 59.05 -1.37 Gold ($/tr.oz.) 1,318.10 -2.70 Important Dates MASTEEL - 1:3 Bonus Issue - BI of up to 106.8m shares. 1 bonus share for every 3 existing shares held. Ex-Date: 12/02/2018. Entitlement Date: 14/02/2018. LISTING ON: 15/02/2018. • Malaysia's industrial output in December rose at a much slower pace of 2.9%, lower-than-expected 4.6% increase, weighed down by weakness in the mining sector. • Malaysia Airports Holdings Bhd is expecting to see a near 40% rise to 180,000 in daily passenger numbers passing through the Kuala Lumpur International Airport and klia2 in Sepang during the Chinese New Year period from Feb 14 to 18. • RHB Bank Bhd is acquiring the remaining 51% stake in Vietnam Securities Corp for VND121.6bn (RM21.3mn) cash. • Kuantan Flour Mills Bhd has inked a Memorandum of Understanding with Shou Guang Chang Tai Economic And Trade Co Ltd to facilitate an expansion of the group's starch and premix flour trade in China. • Bumi Armada Bhd executive director and head of offshore marine services Shaharul Rezza Hassan is resigning from his role effective Feb 28, citing the pursuit of other interests outside the group as the reason. • PUC Bhd announced that Pictureworks (Hong Kong) Ltd has inked a four-year exclusive partnership with Hong Kong's theme park operator Ocean Park Corp to provide the latter end-to-end photo imaging products, services and systems. • The Inland Revenue Board of Malaysia has imposed additional tax liabilities, inclusive penalties, amounting to RM5.0mn on management services provider DKLS Industries Bhd and three of its subsidiaries, after 'technical adjustments'. • Sunzen Biotech Bhd has announced that the proposed ratification of the diversification of the business into the trading of crude palm oil and derivative products will be approved by shareholders at an extraordinary general meeting. • Thailand, the world's third largest palm oil producer, will cooperate with Malaysia and Indonesia to reject the European Union's executive decision to adopt trade barrier against palm oil as part of its official legislation. • Amcorp Properties Bhd saw a near 19 times rise YoY in net profit to RM75.2mn for its 3QFY18, driven by stronger contribution from its joint ventures. • KKB Engineering Bhd returned to the black with a net profit of RM1.6mn in FY17 versus a net loss of RM5.8mn in FY16, after revenue grew 103% YoY to RM209.3mn. • IGB Corp Bhd posted a 2% YoY improvement in FY17 net profit to RM464.6mn despite total revenue slipping 5% YoY to RM1.1bn. • Malaysia's Employees Provident Fund has declared a dividend rate of 6.9% for conventional savings, the highest ever announced in the last two decades. • The US wholesale inventories rose 0.4% in December, more than initially estimated 0.2%, after a revised 0.6% rise in November, helped by a sturdy rise in auto stocks. 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. Monday , February 12, 2018 FBMKLCI: 1,819.82 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Weekly Strategy Market View, News in Brief: Corporate, Economy, and Share Buybacks Kaladher Govindan Tel: +603-2167 9609 kaladher@ta.com.my www.taonline.com.my M a r k e t V i e w Volatility Likely to Persist in this Holiday-shortened Week The blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) went through a roller coaster ride last week, dipping to a fresh five-week low triggered by spillover from the US stock market slump as major index averages slid more than 10 percent from record highs into correction territory. The selloff was sparked by worries that rising US bond yields and inflation may quicken the pace of interest rate increases. For the week, the FBM KLCI sank 50.66 points, or 2.7 percent to 1,819.82, with most of the losses coming from Hong Leong Bank (-90sen), Petronas Gas (-80sen), Hap Seng (-71sen), Genting Berhad (-64sen) and Petronas Dagangan (-58sen). Average daily traded volume and value rose to 3.13 billion shares worth RM3.28 billion, compared to the 2.95 billion shares and RM2.88 billion respectively the previous week. Market sentiment should remain weak in this holiday-shortened week (Bursa Malaysia is closed from Thursday afternoon session onwards for the week) due to external uncertainty and liquidation as some investors look forward to splurge their recent gains on upcoming Chinese New Year (CNY) celebrations this Friday and Saturday. In addition, the deteriorating crude oil price and corresponding weakness ringgit are additional dampeners that could induce net foreign outflows and exert pressure on the benchmark index, which could retest the 1,800-key support level this week. While market sentiment usually improves post CNY, this year’s high of 1,880 may not be revisited soon (in fact it could remain as the year’s high for the rest of 2018!) as investors await the outcome of 4Q17 results reporting season, which ends this February, and external markets remain volatile until the next US Federal Reserve (Fed) meeting on 20th and 21st March. So far, the results season did not display anything outstanding that could lead to a potential upward adjustment in CY18 and CY19 earnings growth, which is at mid-single digit now. No positive surprises are expected. As for the Fed meeting, consensus expectations are for Jerome Powell, the new chairman of the US Federal Reserve, to raise rates by another 25 basis points in the March meeting. As far as the US equity markets are concerned, the fear of a rate hike appears to be more potent than a rate hike itself! Conditions could improve after a rate hike in March, if the Fed can pacify investors about its gradualist monetary policy approach. However, that possibility is remote as benefits from President Trump’s tax overhaul measures and fiscal spending should trickle down to exert inflationary pressure on an economy that is already operating at full employment level. The unemployment rate should trend lower to hit 3.5% by end2018 from current 4.1%, pushing up wages, inflation and bond yields along the process. A greater fall (more than 20%) in the US equity market could nullify the wealth effect on consumption and private investment and induce Fed to apply brakes, otherwise great news for the economy is going to be bad news for equities this year due to a liquidity squeeze! Page 1 of 7
4. 12-Feb-18 The shrinking gap between our 10-year Malaysia Government Securities and US 10-year Treasury yield will exert more pressure on foreign fund outflows and the ringgit . Buying support from local funds could mitigate the downside pressure on equities to some extent but as investors are widely expecting parliament to be dissolved in the near future, the selling pressure could increase. Thus, investors are advised to take profit on overvalued stocks (Sell Petronas Dagangan TP: RM22.08, IOI Corp TP: RM4.12, MISC TP: RM7.13, Maxis TP: RM6.05, Malaysia Airport TP: RM3.83) on rebound (probably post CNY) and await cheaper reentry, potentially in the second half of 2018. For exposure, the volatility in blue chips should be a good opportunity to trade especially in stocks related to banking (Buy AmBank TP: RM5.50 and Public Bank TP: RM25.10), construction (Gamuda TP: RM6.00 & Gadang TP: RM1.69), gaming (Genting TP: RM11.53 and Genting Malaysia TP: RM6.51) and utilities (Tenaga TP RM:18.33) sectors. Figure 1: FBMKLCI Performance During Chinese New Year No. Year CNY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 15-Feb-91 04-Feb-92 23-Jan-93 10-Feb-94 31-Jan-95 19-Feb-96 07-Feb-97 28-Jan-98 16-Feb-99 05-Feb-00 24-Jan-01 12-Feb-02 01-Feb-03 22-Jan-04 09-Feb-05 29-Jan-06 18-Feb-07 07-Feb-08 26-Jan-09 14-Feb-10 03-Feb-11 23-Jan-12 09-Feb-13 31-Jan-14 19-Feb-15 08-Feb-16 28-Jan-17 Before CNY After CNY 3 mth 1 mth 2 weeks 2 weeks 1 mth -10.7% -10.8% -5.8% 6.0% 12.6% -6.9% -3.1% 0.0% 6.5% 4.3% 0.7% 3.3% 0.6% 3.0% 1.5% -12.7% 2.8% -3.1% 3.4% -4.7% 27.9% 11.6% 4.9% 10.2% 8.0% -18.0% -3.1% -0.9% 1.5% 2.4% -5.0% -0.2% 0.2% 1.7% 0.6% -4.2% -0.1% -5.8% 29.9% 30.9% -18.7% 4.9% 1.5% -7.8% -10.3% -24.7% -14.5% -0.4% 5.8% -1.0% 12.0% -2.1% -4.4% 2.5% 0.2% -13.8% -1.1% -0.6% -1.4% 7.0% -1.1% -4.9% 0.9% -1.2% -4.4% -2.5% -5.7% -1.4% -2.1% 4.5% -3.6% 0.4% 0.9% -1.7% -1.9% -0.9% -1.6% -0.2% 0.7% 1.6% -17.5% -9.1% -4.2% -7.7% -6.3% -0.1% 5.2% -2.3% -1.5% -8.2% -1.6% -0.6% 5.8% 2.7% 2.7% 1.9% 3.6% 0.5% 1.4% 4.6% -1.3% 1.3% 2.3% -1.5% -2.1% -4.8% -1.7% -0.1% 1.1% 2.5% -1.1% -3.6% -0.8% -0.1% 1.9% 0.4% 3.5% 0.5% 0.7% 1.8% 0.9% -3.0% 0.3% 1.0% 1.5% 1.4% -0.3% -1.9% 0.7% 1.8% -1.0% -3.3% -0.8% 0.7% 0.7% 3 mth 11.3% 3.7% 10.5% -10.7% 7.8% 6.0% -12.2% 9.0% 33.6% -5.3% -19.4% 10.9% 1.0% 4.8% -1.5% 3.9% 7.5% -9.9% 13.7% 7.5% 1.5% 4.5% 9.2% 3.7% 0.2% -0.8% 4.9% No. of years gain Total no. of years Gain ratio Avg gain 7 27 25.9% 6.4% 9 27 33.3% 4.1% 12 27 44.4% 1.5% 18 27 66.7% 4.4% 19 27 70.4% 4.8% 20 27 74.1% 7.8% No. of years loss Loss ratio Avg loss 20 74.1% -7.5% 18 66.7% -3.8% 15 55.6% -2.2% 9 33.3% -2.8% 8 29.6% -4.9% 7 25.9% -8.5% Total Avg Gain/ (Loss) -3.9% -1.2% -0.5% 2.0% 1.9% 3.5% Source: Bloomberg, TA Securities 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 Monday, February 12, 2018, the HOD, Kaladher Govindan, 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 7
5. 12-Feb-18 N e w s i n B r i e f Corporate Malaysia Airports Holdings Bhd (MAHB) is expecting to see a near 40% rise to 180,000 in daily passenger numbers passing through the Kuala Lumpur International Airport (KLIA) and klia2 in Sepang during the Chinese New Year period from Feb 14 to 18. The airport operator is working closely with various authorities, including the police, to ensure passengers travelling through KLIA will experience a smooth journey during the upcoming festive season, it said. (The Edge Markets) RHB Bank Bhd is acquiring the remaining 51% stake in Vietnam Securities Corp (VSEC) for VND121.6bn (RM21.3mn) cash. The banking group currently has a 49% stake in VSEC, which it acquired in November 2008. RHB Bank said its wholly-owned subsidiary RHB Investment Bank Bhd has entered into a conditional share purchase agreement with Chu Thi Phuong Dung, Truong Lan Anh and Viet Quoc Insurance Broker JSC for the proposed stake acquisition. The proposed acquisition is subject to the approvals of Bank Negara Malaysia and the State Securities Commission of Vietnam. The proposed acquisition is expected to be completed by the second quarter of 2018. (The Edge Markets / Bursa Malaysia) Kuantan Flour Mills Bhd has inked a Memorandum of Understanding with Shou Guang Chang Tai Economic And Trade Co Ltd (SGCT) to facilitate an expansion of the group’s starch and premix flour trade in China. Based in Shouguang City, Shandong province, SGCT is principally involved in the trading and retailing of corn, tapioca and food-related products. It has a stable import and export business with trading partners within China and Southeast Asian countries. (The Edge Markets / Bursa Malaysia) Bumi Armada Bhd executive director and head of offshore marine services (OMS) Shaharul Rezza Hassan is resigning from his role effective Feb 28, citing the pursuit of other interests outside the group as the reason. Bumi Armada said it has identified an internal successor, Megat Zariman Abdul Rahim, to take over the role of head of OMS. The offshore energy facilities and services provider said Rezza requested an early release from the group. Prior to his current role, Rezza, 46, was the chief financial officer of Bumi Armada. (The Edge Markets / Bursa Malaysia) PUC Bhd announced that Pictureworks (Hong Kong) Ltd has inked a four-year exclusive partnership with Hong Kong’s theme park operator Ocean Park Corp to provide the latter end-to-end photo imaging products, services and systems. Pictureworks HK is wholly-owned by Pictureworks Holdings Sdn Bhd. Last December, PUC proposed to acquire 33% of Pictureworks Holdings shareholdings from a group of individuals, including PUC managing director and chief executive officer Cheong Chia Chou. The RM52.8mn acquisition, to be satisfied via a combination of cash and new share issuance, is still pending authority and shareholders’ approvals. (The Edge Markets / Bursa Malaysia) The Inland Revenue Board of Malaysia has imposed additional tax liabilities, inclusive penalties, amounting to RM5.0mn on management services provider DKLS Industries Bhd and three of its subsidiaries, after 'technical adjustments'. The additional tax and penalties are for the years of assessment 2010 to 2016, and are expected to eat into the group's earnings and net assets for the financial year ended Dec 31, 2017 (FY17). (The Edge Markets / Bursa Malaysia) Sunzen Biotech Bhd has announced that the proposed ratification of the diversification of the business into the trading of crude palm oil and derivative products will be approved by shareholders at an extraordinary general meeting. Chief Executive Officer, Hong Choon Hau said the management decided to continue growth in this business segment, which has been contributing significantly to the group's financials as it delivers improved shareholders' value. (Bernama) Page 3 of 7
6. 12-Feb-18 Thailand , the world's third largest palm oil producer, will cooperate with Malaysia and Indonesia to reject the European Union's (EU) executive decision to adopt trade barrier against palm oil as part of its official legislation. Minister of Plantation Industries and Commodities, Datuk Seri Mah Siew Keong, who had a bilateral meeting with Thailand Minister of Commerce, Sontirat Sontijirawong, said Thailand's keenness to respond also portrayed the agreement and firmness of major palm oil producing countries to fight against the continuous prejudice and oppression by the EU on the commodity. (Bernama) Salutica Bhd's net profit for its second quarter ended Dec 31, 2017 (2QFY18) fell 43.3% YoY to RM6.0mn, due to a change in product mix, and higher costs. Quarterly revenue fell 3.6% YoY to RM87.6mn. Earnings per share stood at 1.55 sen compared with 2.73 sen in 2QFY17. It declared a third interim single-tier dividend of 0.6 sen per share, payable on March 15. In 1HFY18, Salutica turned in a net profit of RM12.5mn, down 22.7% YoY, due to the same reasons for its quarterly earnings decline. Cumulative revenue, however, was up 4.6% YoY to RM171.4mn, contributed mainly by the sale of bluetooth headsets. (The Edge Markets / Bursa Malaysia) Amcorp Properties Bhd (AmProp) saw a near 19 times rise YoY in net profit for its third quarter ended Dec 31, 2017 (3QFY18) to RM75.2mn, driven by stronger contribution from its joint ventures. Revenue for the quarter under review, however, is 19% YoY lower at RM36.1mn, as it saw lower sales achieved by Kayangan Heights in the quarter. Its share of results from joint ventures, however, jumped to RM87.6mn, which the group attributed to profit recognition from progressive delivery of sold units in overseas projects. In the first nine months of FY18, AmProp’s net profit stood at RM102.7mn, about 10 times higher YoY, despite revenue falling 25% YoY to RM106.3mn. (The Edge Markets / Bursa Malaysia) KKB Engineering Bhd achieved a net profit of RM5.3mn in its fourth quarter ended Dec 31, 2017 (4QFY17), compared to a net loss of RM4.1mn, as it recorded higher revenue in the civil construction and steel pipe manufacturing divisions. It was the second profitable quarter the group posted in a row, after reporting four straight quarters of net losses. Quarterly revenue jumped 2.7 times YoY to RM70.2mn in 4QFY17. The group declared a first and final single tier dividend of 2 sen per share in respect of the financial year ended Dec 31, 2017 (FY17), payable on June 12. For the full FY17, the group returned to the black with a net profit of RM1.6mn versus a net loss of RM5.8mn in FY16, after revenue grew 103% YoY to RM209.3mn. (The Edge Markets / Bursa Malaysia) IGB Corp Bhd posted earnings of RM86.7mn in its fourth quarter ended Dec 31, 2017, which was nearly double the earnings achieved in the previous corresponding quarter. This came on the back of revenue growing 16% YoY to RM329.4mn due to a turnover of RM61.9mn from the disposal of land by a subsidiary. The latest quarterly result brings the group’s full year earnings to RM464.6mn, a 2% YoY improvement over earnings, despite total revenue slipping 5% YoY to RM1.1bn. No dividend was declared for the quarter under review, which brings total dividends paid out during the year to five sen per share. (Starbiz / Bursa Malaysia) Page 4 of 7
7. 12-Feb-18 N e w s I n B r i e f Economy Asia Malaysia ’s Industrial Output Rose at Slower 2.9% Pace in December The country’s industrial output in December rose at a much slower pace of 2.9%, weighed down by weakness in the mining sector, government data showed. It was below a Bloomberg survey of a 4.6% increase. The Statistics Department said the December factory output, in economic jargon the industrial production index (IPI), was below the 5% pace set in November. Industrial output had reached a two-and-a-half year-high of 6.8% in August. According to the Statistics Department data, manufacturing output rose 5.3% from a year earlier in December, but slowed from the 6.7% achieved in November. The electrical and electronics expanded only 4.1% from 6.9% in November. As for the mining output, it fell 4.1% in December from a 0.2% increase in November due to the decrease in the index of crude oil and natural gas. Electricity output was maintained at 3.9%, which was similar to November’s growth. Malaysia’s exports in December rose 4.7% from a year ago, sharply down from November’s 14.4% growth as commodity prices and shipment volumes fell. (The Star) Highest EPF Dividend in Two Decades The Employees Provident Fund (EPF) has declared a dividend rate of 6.9% for conventional savings, the highest ever announced in the last two decades. For the estimated 6.8 million active contributors to EPF, this is no doubt delightful news as the dividend rate, which came this close, was in 1999 (6.84%). “We are very pleased with the overall performance in 2017, which is also a landmark year for the EPF as we are now managing two savings schemes and declaring two dividend rates,” said EPF chairman Tan Sri Samsudin Osman. Aside from the conventional savings, he was referring to the shariah savings for which EPF declared a 6.4% dividend rate. The EPF would pay out RM44bil in dividend for conventional savings and another RM3.98bil for shariah savings. This would represent an almost 30% increase in payout compared to 2016. (The Star) RBA Lowers Unemployment Forecast Australia's unemployment rate is expected to drop more than previously projected, the Reserve Bank of Australia said in its Statement on Monetary Policy, released. The unemployment rate is forecast to fall to 5.25% for the year ending June 2018, instead of 5.5% estimated three months ago. The rate is expected to remain at 5.25% until June 2020. At the same time, estimates for economic growth and inflation were broadly unchanged from the November statement. GDP is forecast to expand 3.25% each in the year ending December 2018 and 2019. Inflation is seen at 2% in June 2018, before easing slightly to 2.25%. (RTT) Australia's Big Banks Focus on Job Cuts as Inquiry Looms Australia's big banks are responding to a revenue crunch by cutting jobs and other costs, prompting fears on the eve of an inquiry into their businesses that the industry's tarnished reputation is about to take another hit. Regulators' demands that banks hold more capital and their scrutiny into internal operations have made cost-cuts the in-vogue metric at the so-called Big Four banks, Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corp, to boost profits. But the strategic change will come at a cost for the banks. "If you can be the most successful at bringing your staff numbers down the quickest, that's going to give you the quickest cost advantage," said one senior bank insider with direct knowledge of the cost-cutting strategy. But, added the insider, who requested anonymity because he was not authorised to speak to the media, as jobs cuts mount, "society and the community will push back, won't accept it." Cost cuts are not limited to jobs, with banks preparing to make use of improved technology to reengineer back office functions, and reduce the number and physical size of their branches. (The Star) Page 5 of 7
8. 12-Feb-18 Japan Tertiary Activity Index Falls Unexpectedly Japan 's tertiary activity index decreased unexpectedly at the end of the year, though slightly, data published by the Ministry of Economy, Trade and Industry showed. The tertiary activity index dropped 0.2% month-over-month in December, reversing a 1.1% rise in November. Meanwhile, economists had expected a 0.2% increase for the month. Among the individual components of the survey, activity was down for information and communications, finance and insurance, transport and postal activities, living and amusement-related services, retail trade and real estate. At the same time, activity was up for wholesale trade, business-related services, medical, health care and welfare, electricity, gas, heat supply and water, goods rental and leasing. On a yearly basis, the tertiary activity index rose at a slower rate of 1.1% in December, following a 1.6% gain in November. (RTT) United States U.S. Wholesale Inventories for December Revised Higher U.S. wholesale inventories rose more than initially estimated in December, helped by a sturdy rise in auto stocks. The Commerce Department said that wholesale inventories rose 0.4% after a revised 0.6% rise in November. The department reported last month that wholesale inventories rose 0.2% in December. Auto inventories rose 1.7% after increasing 0.9% in November. The component of wholesale inventories that goes into the calculation of gross domestic product - wholesale inventories excluding auto stocks - rose 0.2% in December. U.S. financial markets were little moved by the data. Inventory investment cut 0.67-percentage point from GDP growth in the fourth quarter, according to the government’s advance estimate released last month. GDP grew 2.6% in the OctoberDecember quarter. Sales at wholesalers rose 1.2% in December after gaining 1.9% in November. Inventories in December were up 3.4% from the year-earlier period, while sales jumped 9.1%. At December’s sales pace it would take wholesalers 1.22 months to deplete stocks, compared with 1.23 in November. The inventories-to-sales ratio for motor vehicles rose to 1.72 in December from 1.69 in the prior month. (Reuters) Europe and Uni ted Kingdom Oil Pipeline Shutdown Hits UK Industry but Manufacturing and Construction Grow British industry suffered its biggest fall since 2012 in December due to the temporary shutdown of a major oil pipeline, but growth in manufacturing confirmed the broader picture of solid economic expansion at the end of 2017. Construction also showed a surprise surge in December. Britain’s economic growth slowed slightly in 2017 as higher inflation caused by the fall in sterling after the Brexit vote hurt consumers, but some exporters have gained from the weaker pound and the stronger global economy. Industrial output fell by 1.3% month-on-month in December, the biggest drop since September 2012 after a 0.3% rise in November, the Office for National Statistics (ONS) said. Economists taking part in a Reuters poll had expected to see output fall 0.9% as a shutdown in the damaged Forties North Sea oil pipeline looked certain drag on the sector. While the figures showed the hit was bigger than thought, the pipeline is back online so a rebound in production looks likely in January. (Reuters) UK GDP to Log Steady Growth: NIESR The UK economy is likely to log steady growth in three months to January, the National Institute of Economic and Social Research said. According to monthly estimates of GDP, output grew 0.5% in three months to January, unchanged from the preliminary estimate of the Office for National Statistics for the fourth quarter of 2017. "We are forecasting GDP growth of close to 2% this year assuming a soft Brexit scenario," Amit Kara, head of UK macroeconomic forecasting at NIESR, said. At this speed the economy could start to overheat unless the Bank of England withdraws some of the stimulus that it has injected by raising the policy rate, Kara noted. (RTT) Page 6 of 7
9. 12-Feb-18 Share Buy-Back : 09 February 2018 Company FIAMMA FIMACOR GENM HEVEA KFIMA KOMARK KPJ MALAKOF MMSV NYLEX PECCA SAUDEE SIGN SNTORIA UNIMECH YILAI Bought Back Price (RM) Hi/Lo (RM) 90,000 10,000 2,275,000 100,000 30,000 77,800 50,000 800,000 149,000 35,000 20,000 31,000 69,000 230,000 16,100 133,100 0.50 2.00 5.26/5.23 0.90 1.47/1.45 0.195/0.19 0.95/0.90 0.91/0.90 1.52/1.49 0.80/0.77 1.35 0.47/0.46 0.60/0.58 0.605/0.59 1.02/1.01 0.75/0.745 0.50/0.49 2.00 5.27/5.20 0.925/0.90 1.48/1.45 0.195/0.17 0.925/0.90 0.92/0.89 1.52/1.45 0.80/0.77 1.37/1.32 0.47/0.455 0.60/0.58 0.605/0.585 1.02/1.00 0.75/0.745 Total Treasury Shares 23,280,000 4,182,500 279,207,400 1,222,000 30,000 5,325,700 63,747,000 11,076,800 2,384,500 5,823,324 3,240,800 64,000 11,407,100 3,031,000 6,710,210 8,662,108 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 7 of 7
10. 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 09-Feb-18 AUTOMOBILE BAUTO 2.16 2.50 15.7% Buy 2,503 0.48 14.3 19.9 15.1 10.9 5.3 5.6 2.47 -12.6 1.84 17.4 MBMR 2.27 2.32 2.2% Under Review 887 0.80 23.2 23.9 9.8 9.5 2.0 2.1 2.60 -12.7 2.01 12.9 -1.8 3.2 PECCA 1.35 1.86 37.8% Buy 249 0.41 11.1 12.5 12.1 10.8 4.1 4.5 1.70 -20.6 1.28 5.5 -12.9 SIME 2.72 1.97 -27.6% Hold 18,498 1.56 12.0 12.7 22.7 21.5 1.1 1.2 3.06 -11.1 2.03 34.2 23.1 UMW 6.60 4.37 -33.8% Sell 7,711 1.34 20.7 36.9 31.9 17.9 1.5 2.7 6.98 -5.4 4.70 40.4 26.9 BANKS & FINANCIAL SERVICES ABMB 4.13 4.60 11.4% Hold 6,394 1.32 30.6 35.6 13.5 11.6 3.9 3.9 4.49 -8.0 3.62 14.1 1.2 AFFIN 2.53 2.70 6.7% Hold 4,916 0.93 24.2 28.1 10.4 9.0 3.2 3.2 2.98 -15.0 2.22 13.9 9.5 AMBANK 4.42 5.50 24.4% Buy 13,323 1.40 48.6 52.0 9.1 8.5 4.1 4.1 5.70 -22.5 4.06 8.9 0.2 CIMB 6.86 7.50 9.3% Hold 63,287 1.63 50.8 56.0 13.5 12.3 4.3 4.1 7.36 -6.8 4.91 39.7 4.9 HLBANK 17.90 19.30 7.8% Hold 36,616 0.81 114.2 120.9 15.7 14.8 2.5 2.5 18.80 -4.8 13.26 35.0 5.3 MAYBANK 10.02 10.50 4.8% Hold 108,434 1.01 70.6 77.4 14.2 12.9 5.0 5.0 10.24 -2.1 8.31 20.6 2.2 PBBANK 21.80 25.10 15.1% Buy 84,181 0.66 142.4 149.8 15.3 14.6 2.7 2.8 22.62 -3.6 19.66 10.9 4.9 RHBBANK 5.17 5.70 10.3% Hold 20,732 1.60 52.2 53.8 9.9 9.6 2.9 2.9 5.61 -7.8 4.71 9.8 3.4 BURSA 10.82 11.80 9.1% Buy 5,816 0.92 43.9 45.0 24.7 24.0 3.3 3.3 11.30 -4.2 8.08 33.9 6.9 Note: BURSA proposed bonus issue of shares on the basis of 1 for 2. Ex-Target price RM7.04 BUILDING MATERIALS ANNJOO 3.35 4.40 31.3% Buy 1,731 1.25 45.1 48.9 7.4 6.8 6.6 7.8 3.98 -15.8 2.27 47.6 -13.2 CHINHIN 1.07 1.36 27.1% Buy 595 1.09 12.4 12.0 8.6 8.9 4.7 5.6 1.49 -28.2 0.90 18.9 -11.6 ENGTEX 1.02 1.38 35.3% Buy 434 0.80 14.2 16.1 7.2 6.3 4.1 5.4 1.52 -32.9 1.01 1.0 -7.3 GADANG 1.04 1.69 62.5% Buy 686 1.14 14.2 18.1 7.3 5.7 2.9 2.9 1.37 -24.1 1.01 3.0 -6.3 GAMUDA 4.85 6.00 23.7% Buy 11,913 0.90 34.5 35.7 14.1 13.6 2.5 2.5 5.52 -12.1 4.58 5.9 -2.2 IJM 2.71 2.89 6.6% Sell 9,833 1.03 13.7 18.2 19.8 14.9 3.5 3.5 3.61 -24.9 2.71 0.0 -11.1 KAB 0.26 0.38 47.1% Buy 8 na 31.4 37.3 0.8 0.7 3.9 47.1 0.33 -22.7 0.25 4.1 -15.0 PESONA 0.41 0.55 35.8% Buy 281 1.08 5.8 4.8 7.0 8.5 3.7 3.7 0.74 -44.9 0.40 1.2 -10.0 -8.1 CONSTRUCTION SENDAI 0.80 0.55 -30.8% Sell 621 1.26 9.1 8.5 8.8 9.4 1.3 1.3 1.39 -42.8 0.51 57.4 SUNCON 2.50 2.65 6.0% Buy 3,231 0.61 14.7 16.4 17.0 15.2 2.2 2.4 2.64 -5.3 1.70 47.1 -0.4 WCT 1.50 1.64 9.3% Hold 2,110 0.90 12.6 11.2 11.9 13.4 2.0 2.0 2.48 -39.4 1.46 2.7 -7.4 LITRAK 5.75 6.26 8.9% Hold 3,035 0.40 45.6 47.1 12.6 12.2 4.3 4.3 6.15 -6.5 5.40 6.5 3.6 CARLSBG 16.28 18.06 10.9% Buy 5,008 0.76 86.2 88.7 18.9 18.3 5.3 5.4 16.60 -1.9 13.98 16.5 6.4 HEIM 19.98 19.14 -4.2% Buy 6,036 0.39 84.0 88.3 23.8 22.6 3.8 4.0 20.12 -0.7 15.86 26.0 5.7 AEON 1.59 1.97 23.9% Sell 2,232 0.44 6.7 7.7 23.8 20.6 2.5 2.8 2.70 -41.1 1.55 2.6 -9.7 AMWAY 7.60 8.18 7.6% Buy 1,249 0.49 43.9 45.2 17.3 16.8 5.0 5.3 8.18 -7.1 7.04 8.0 3.0 F&N 30.00 33.74 12.5% Buy 10,996 0.23 122.7 145.8 24.5 20.6 2.7 3.2 30.30 -1.0 22.64 32.5 11.1 CONSUMER Brewery Retail HUPSENG 1.10 1.25 13.6% Hold 880 0.45 5.7 5.9 19.3 18.6 5.5 5.5 1.28 -14.1 1.05 4.8 0.9 JOHOTIN 1.20 1.75 45.8% Buy 373 0.84 12.8 13.5 9.4 8.9 4.2 4.5 1.76 -31.8 1.16 3.4 -0.8 NESTLE 116.10 120.50 3.8% Buy 27,225 0.47 325.4 368.7 35.7 31.5 2.5 2.9 117.00 -0.8 75.40 54.0 12.5 PADINI 4.94 4.67 -5.5% Sell 3,250 0.81 28.0 30.4 17.7 16.3 2.5 2.6 5.50 -10.2 2.39 106.7 -6.4 POHUAT 1.51 2.01 33.1% Buy 332 0.66 22.9 25.4 6.6 5.9 5.3 5.3 2.07 -27.0 1.45 4.1 -15.6 QL 4.75 3.26 -31.4% Sell 7,707 0.48 12.8 14.7 37.0 32.2 0.9 1.0 4.84 -1.9 3.26 45.9 9.2 SIGN 0.60 0.92 53.3% Buy 137 0.98 6.9 9.2 8.6 6.5 4.2 5.8 1.07 -43.9 0.58 3.4 -14.9 32.38 52.08 60.8% Buy 9,245 1.37 187.4 175.4 17.3 18.5 6.2 6.2 51.04 -36.6 31.40 3.1 -19.1 GENTING 8.78 11.53 31.3% Buy 33,638 1.49 54.4 59.8 16.1 14.7 1.8 1.8 10.00 -12.2 8.48 3.5 -4.6 GENM 5.25 6.51 24.0% Buy 29,721 1.49 27.0 30.6 19.4 17.1 1.7 1.9 6.38 -17.7 4.87 7.8 -6.7 2.26 3.34 47.8% Buy 3,044 0.72 21.5 26.0 10.5 8.7 7.1 8.0 3.00 -24.7 2.20 2.7 0.9 CCMDBIO 2.80 2.70 -3.6% Buy 781 0.82 15.0 16.1 18.6 17.4 3.5 3.7 3.03 -7.6 1.97 42.1 10.7 IHH 5.94 6.40 7.7% Buy 48,943 0.75 11.9 15.0 50.0 39.7 0.5 0.6 6.34 -6.3 5.42 9.6 1.4 KPJ 0.92 1.12 22.4% Buy 3,859 0.51 3.7 4.2 24.4 22.0 2.3 2.5 1.14 -19.7 0.90 1.7 -5.7 HARTA 11.14 7.80 -30.0% Sell 18,432 1.14 25.2 28.9 44.2 38.6 1.4 1.6 12.18 -8.5 4.67 138.5 4.3 KOSSAN 8.50 8.80 3.5% Buy 5,435 0.51 38.3 43.0 22.2 19.8 2.3 2.5 8.79 -3.3 5.62 51.2 4.8 SUPERMX 2.19 1.80 -17.8% Sell 1,436 0.61 15.3 17.9 14.3 12.2 2.4 2.8 2.50 -12.4 1.69 29.6 9.5 TOPGLOV 9.30 9.35 0.5% Sell 11,678 0.55 41.6 50.8 22.4 18.3 1.5 1.9 10.00 -7.0 4.56 103.9 16.4 KAREX 1.07 1.00 -6.5% Sell 1,073 0.70 2.8 5.2 38.7 20.5 0.6 1.2 2.41 -55.6 1.05 1.9 -17.7 SCIENTX 8.17 9.84 20.4% Buy 3,995 0.77 67.5 74.1 12.1 11.0 2.2 2.3 9.85 -17.1 6.89 18.6 -5.7 SKPRES 1.75 2.20 25.7% Buy 2,188 0.80 10.4 14.8 16.9 11.8 3.0 4.2 2.35 -25.5 1.24 41.1 -23.2 ASTRO 2.55 3.10 21.6% Buy 13,295 0.89 14.0 13.7 18.3 18.6 5.1 5.3 2.94 -13.3 2.40 6.2 -3.8 MEDIA PRIMA 0.60 0.45 -24.4% Sell 660 1.38 -3.8 -1.7 na na 0.0 0.0 1.28 -53.5 0.58 2.6 -21.7 STAR 1.38 1.25 -9.4% Sell 1,018 1.08 6.7 6.7 20.5 20.5 8.7 8.7 2.22 -37.8 1.31 5.3 -16.4 Tobacco BAT GAMING Casino NFO BJTOTO HEALTHCARE Hospitals/ Pharmaceutical Rubber Gloves INDUSTRIAL MEDIA
11. 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 0.44 0.72 65.5% Buy 764 1.51 4.2 4.5 10.4 9.6 2.3 2.3 0.69 -37.0 0.29 52.6 -10.3 LCTITAN 5.17 6.10 18.0% Buy 11,751 na 56.3 60.9 9.2 8.5 4.8 5.2 6.53 -20.8 4.14 24.9 10.0 MHB 0.84 0.81 -3.6% Sell 1,344 1.58 0.5 1.7 174.5 50.3 0.0 0.0 1.16 -27.6 0.63 34.4 1.8 MISC 7.13 6.48 -9.1% Sell 31,827 1.20 46.3 51.7 15.4 13.8 4.2 4.2 7.90 -9.7 6.89 3.5 -3.9 PANTECH 0.60 0.69 16.0% Buy 443 1.25 6.1 6.8 9.8 8.8 4.6 5.2 0.74 -19.6 0.47 28.0 -7.8 PCHEM 8.00 7.96 -0.5% Hold 64,000 0.90 49.8 52.6 16.1 15.2 2.8 2.9 8.28 -3.4 6.80 17.6 3.9 SAPNRG 0.69 1.25 82.5% Buy 4,105 2.08 -6.5 -5.0 na na 0.0 0.0 2.10 -67.4 0.67 3.0 -3.5 SERBADK 3.41 4.16 22.0% Buy 5,008 na 27.7 32.7 12.3 10.4 2.3 2.9 3.66 -6.8 1.52 124.3 5.2 UMWOG 0.31 0.51 67.2% Buy 2,506 1.78 0.4 1.2 75.5 24.6 0.0 0.0 0.70 -56.3 0.27 13.0 0.0 UZMA 1.35 1.56 15.6% Sell 432 1.04 13.1 14.2 10.3 9.5 0.0 0.0 1.98 -31.8 1.26 7.1 5.5 FGV 1.87 2.01 7.5% Sell 6,822 1.51 3.7 4.5 50.5 41.1 2.7 2.7 2.18 -14.2 1.51 23.8 10.7 IJMPLNT 2.30 2.69 17.0% Sell 2,025 0.26 9.1 12.5 25.2 18.3 3.5 3.9 3.50 -34.3 2.30 0.0 -16.1 IOICORP 4.68 4.12 -12.0% Sell 29,408 0.89 21.0 21.7 22.2 21.6 3.4 6.4 4.81 -2.7 4.31 8.6 3.1 KFIMA 1.45 1.89 30.3% Buy 409 0.65 13.3 14.5 10.9 10.0 6.2 6.2 1.96 -26.0 1.45 0.0 -7.6 KLK 25.22 26.18 3.8% Hold 26,858 0.67 120.7 126.3 20.9 20.0 2.4 2.5 25.40 -0.7 23.66 6.6 0.9 SIMEPLT 5.50 6.25 13.6% Buy 37,405 na 21.0 22.1 26.1 24.9 2.5 2.7 6.00 -8.3 4.58 20.1 -8.3 TSH 1.63 2.10 28.8% Buy 2,251 0.63 9.3 9.6 17.5 17.0 1.5 1.5 1.93 -15.5 1.56 4.5 -1.2 UMCCA 6.28 6.73 7.2% Sell 1,317 0.39 22.7 34.8 27.6 18.0 2.7 2.9 7.08 -11.3 5.76 9.0 -3.5 GLOMAC 0.52 0.46 -11.5% Sell 413 0.62 3.0 4.4 17.6 11.8 3.8 3.8 0.67 -22.7 0.50 5.1 -6.2 HUAYANG 0.59 0.58 -0.9% Sell 206 0.91 0.7 3.4 89.5 17.2 0.9 0.9 1.21 -51.7 0.58 1.7 -4.1 IBRACO 0.77 0.92 20.3% Hold 380 na 9.1 12.4 8.4 6.1 5.2 6.5 0.98 -21.5 0.50 53.0 -6.1 IOIPG 1.96 2.02 3.1% Hold 10,792 0.85 16.5 16.3 11.8 12.0 3.1 3.1 2.22 -11.7 1.79 9.5 5.9 MAHSING 1.33 1.69 27.1% Buy 3,229 0.98 13.0 12.6 10.2 10.6 4.9 4.9 1.64 -18.9 1.30 2.3 -8.3 PLANTATIONS PROPERTY SIMEPROP 1.44 1.61 11.8% Sell 9,793 na 9.2 9.1 15.7 15.8 1.4 1.4 1.78 -19.1 1.04 38.5 -19.1 SNTORIA 0.61 0.76 25.6% Buy 342 0.22 8.3 8.6 7.3 7.0 1.7 1.7 0.91 -33.5 0.57 7.1 -12.9 SPB 4.79 5.28 10.2% Hold 1,646 0.66 21.2 26.1 22.6 18.3 2.5 2.5 5.50 -12.9 4.39 9.1 -2.2 SPSETIA 3.25 3.77 16.0% Buy 12,198 0.94 21.3 21.9 15.2 14.9 3.7 3.7 4.38 -25.9 3.07 5.9 -18.8 SUNWAY 1.65 1.74 5.5% Hold 8,078 0.91 11.9 12.6 13.9 13.1 3.0 3.6 1.96 -15.8 1.31 25.8 1.2 SUNREIT 1.69 1.87 10.7% Hold 4,977 0.89 10.0 10.7 16.8 15.8 5.9 6.3 1.90 -11.1 1.64 3.0 -11.1 CMMT 1.30 1.64 26.2% Buy 2,649 0.77 7.9 8.6 16.4 15.0 6.3 6.8 1.83 -29.0 1.25 4.0 -29.0 REIT POWER & UTILITIES MALAKOF 0.91 1.16 27.5% Buy 4,535 0.84 6.0 6.8 15.1 13.4 7.7 7.7 1.32 -31.1 0.86 5.8 -7.1 PETDAG 24.90 22.08 -11.3% Sell 24,737 0.41 105.1 105.7 23.7 23.6 3.1 3.2 26.20 -5.0 21.00 18.6 2.6 PETGAS 17.48 19.10 9.3% Buy 34,588 0.87 98.8 99.5 17.7 17.6 3.9 4.0 21.04 -16.9 15.82 10.5 0.0 TENAGA 15.72 18.33 16.6% Buy 89,069 0.57 131.3 127.5 12.0 12.3 4.3 4.1 16.12 -2.5 13.44 17.0 3.0 YTLPOWR 1.19 1.17 -1.7% Sell 9,251 0.82 9.8 10.3 12.1 11.6 4.2 4.2 1.50 -20.7 1.11 7.2 -7.8 -1.3 TELECOMMUNICATIONS AXIATA 5.42 6.50 19.9% Buy 49,041 1.60 15.9 19.5 34.0 27.9 1.5 2.9 5.82 -6.9 4.24 27.8 DIGI 4.80 5.15 7.3% Hold 37,320 0.96 19.7 20.4 24.4 23.6 4.1 4.2 5.19 -7.5 4.36 10.1 -5.9 MAXIS 5.88 6.05 2.9% Sell 45,926 1.06 25.2 25.0 23.3 23.5 3.3 3.3 6.60 -10.9 5.48 7.3 -2.2 TM 5.91 7.20 21.8% Buy 22,209 0.63 23.2 24.9 25.5 23.8 3.5 3.8 6.69 -11.7 5.85 1.0 -6.2 ELSOFT 2.54 2.70 6.3% Hold 699 0.81 13.4 15.3 19.0 16.6 3.7 4.2 2.95 -13.9 1.54 64.7 -5.9 IRIS 0.19 0.25 35.1% Buy 457 2.34 0.6 0.7 33.4 27.7 0.0 0.0 0.25 -24.5 0.12 60.9 0.0 INARI 3.34 3.35 0.3% Under Review 6,886 0.74 14.0 15.7 23.8 21.3 3.0 3.4 3.82 -12.6 1.83 82.9 -1.8 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 0.77 73.9 86.9 12.4 10.5 3.5 3.5 14.52 -36.9 8.91 2.8 -27.4 UNISEM 2.89 3.25 12.5% Under Review 2,121 1.19 19.0 20.3 15.2 14.2 4.2 4.2 4.25 -32.0 2.65 9.1 -20.8 TRANSPORTATION Airlines AIRASIA 4.13 3.83 -7.3% Buy 13,802 1.28 38.3 39.8 10.8 10.4 1.2 1.5 4.34 -4.8 2.57 60.7 23.3 AIRPORT 9.07 8.64 -4.7% Sell 15,049 1.37 19.7 20.1 45.9 45.0 1.1 1.3 9.45 -4.0 6.35 42.8 3.2 Freight & Tankers PTRANS 0.27 0.46 70.4% Buy 339 na 2.4 3.8 11.3 7.1 2.6 4.0 0.38 -29.3 0.15 85.6 -3.6 TNLOGIS 1.16 1.80 55.2% Buy 530 1.12 13.6 14.0 8.5 8.3 4.3 4.3 1.83 -36.7 1.13 2.7 -13.4 WPRTS 3.62 4.06 12.2% Buy 12,344 0.49 15.6 20.0 23.2 18.1 1.0 1.4 4.19 -13.6 3.12 16.0 -2.2 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) % upside Recom Market Cap. (S$m) Beta EPS (cent) PER (X) Div Yield (%) FY18 FY19 FY18 FY19 FY18 FY19 52week 52week % Chg High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 26.71 23.30 -12.8% Sell 68,481 1.17 189.1 214.6 14.1 12.4 2.2 2.2 27.4 -2.5 18.12 47.4 7.5 OCBC 12.19 13.50 10.7% Buy 51,024 1.21 104.1 110.6 11.7 11.0 6.7 7.7 13.3 -8.5 9.38 30.0 -1.6 UOB 26.24 26.90 2.5% Hold 43,639 1.09 215.4 229.3 12.2 12.2 2.7 2.7 28.5 -7.8 20.63 27.2 -0.8 PLANTATIONS WILMAR 3.00 3.63 21.0% Hold 19,196 0.87 29.9 31.8 10.0 9.4 2.7 3.0 4.0 -24.2 2.97 1.0 -2.9 IFAR 0.37 0.53 45.2% Hold 524 1.05 5.2 5.7 7.0 6.4 3.5 3.8 0.6 -37.1 0.36 2.8 -6.4 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.
12. Technical View Monday , February 12, 2018 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Weekly Technical Outlook FBM KLCI: 1,819.82 (-50.66, -2.71%) Chartist : Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my Volatility to Persist on US Inflation Fears The blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) went through a roller coaster ride last week, dipping to a fresh five-week low triggered by spillover from the US stock market slump as major index averages slid more than 10 percent from record highs into correction territory. The selloff was sparked by worries that rising US bond yields and inflation may quicken the pace of interest rate increases. For the week, the FBM KLCI sank 50.66 points, or 2.7 percent to 1,819.82, with most of the losses coming from Hong Leong Bank (-90sen), Petronas Gas (-80sen), Hap Seng (-71sen), Genting Berhad (-64sen) and Petronas Dagangan (-58sen). Average daily traded volume and value rose to 3.13 billion shares worth RM3.28 billion, compared to the 2.95 billion shares and RM2.88 billion respectively the previous week. Bursa Malaysia shares fell for profit-taking correction on Monday following the previous Friday’s sharp correction on Wall Street, sparked by concerns rising US bond yields and inflation may quicken the pace of interest rate increases. The KLCI slumped 17.41 points to close at 1,853.07, off an early low of 1,842.06 and high of 1,857.39, as losers trashed gainers 966 to 167 on total turnover of 2.65bn shares worth RM2.84bn. Stocks ended sharply lower the next day due to the sell-off spillover from overnight US and regional markets, which saw a record intra-day loss on the Dow Jones average on fears over rising US interest rates and inflation. The KLCI tumbled 40.62 points, or 2.2% to settle at 1,812.45, off an early high of 1,820.37 and low of 1,795.85, as losers swarmed gainers 1,215 to 121 on very active trade totaling 5.2bn shares worth RM5.32bn. The local market recovered Wednesday helped by the overnight rebound on Wall Street, but the afternoon fall on US stock index futures spilled over to regional stocks and eroded earlier gains. Still, the KLCI closed up 24.23 points, or 1.34% at 1,836.68, off an opening low of 1,825.8 and high of 1,841.08, as gainers led losers 625 to 460 on lower turnover of 3.32bn shares worth RM3.51bn. Blue chips stayed range bound on cautious trade the following day, with overhanging concerns over rising US interest rates and inflation restricting recovery momentum. The KLCI ended 2.76 points up at 1,839.44, off an early low of 1,834.83 and high of 1,842.65, as gainers edged losers 577 to 365 on cautious trade totaling 2.05bn shares worth RM2.08bn. The overnight US stock market slump, with major averages sliding more than 10 percent from record highs into correction territory, again spilled over to the region and local market on Friday, with concerns elevated US bond yields signaling higher inflation dampening investor sentiment ahead of the weekend. The index fell 19.62 points or 1.1% to settle at 1,819.82, off an opening low of 1,806.25 and high of 1,824.23, as losers trashed gainers 900 to 208 on moderate turnover of 2.45bn shares worth RM2.67bn. Trading range for the local blue-chip benchmark index last week ballooned to 61.54 points, compared to the 25.47 points range the previous week, as broad based selling spillover from the global market slump pressured it down to the lowest since the beginning of the year. For the week, the FBM-EMAS Index lost 401.52 points, or 3 percent to 12,975.06, while the FBM-Small Cap Index plunged 901.61 points, or 5.3 percent to close the week at 16,120.74. Page 1 of 3
13. 12-Feb-18 Following last week ’s steep selloff, the daily slow stochastic momentum indicator for the KLCI has fallen into the neutral region, but is hooking up due to last Friday’s rebound from an early slump (Chart 1), but the weekly indicator’s signal line hooked down in overbought territory and is set to trigger a sell. The 14-day Relative Strength Index (RSI) indicator has turned bearish with a weak reading of 48.27 as of last Friday, while the 14-week RSI registered a steep decline with a bearish reading of 59.71. Chart 1 On trend indicators, the daily Moving Average Convergence Divergence (MACD) turned southwards following a sell signal early last week, while the weekly MACD indicator’s signal line has hooked down, suggesting exhaustion of the uptrend (Chart 2). Meantime, the +DI and –DI lines on the 14-day Directional Movement Index (DMI) trend indicator crossed for sell on a falling ADX line, suggesting the end of uptrend momentum. Chart 2 Conclusion Due to visible deterioration on trend and momentum technical indicators following last week’s severe correction, investors should expect the recent high volatility to persist for another week. Despite last Friday’s rebound on Wall Street, downside risk persists unless there is proof that leveraged low-volatility or so-called short-volatility bets, which are some derivative products blamed for the recent huge stock price swings, are unwound. Page 2 of 3
14. 12-Feb-18 On the index , monitor the crucial resistance-turn-support level at 1,796, the June 2017 peak matching the recent low, which must hold to prevent further correction potential towards next support from 1,778, the 38.2%FR of the 1,614 low of Nov 2016 to the recent 1,880 high. Failure of this support means that the 50%FR at 1,747 should be tested for resilience. Immediate resistance will be 1,840, mirroring the 9 Jan high, with the 2 Feb peak of 1,880 acting as a formidable hurdle. Nevertheless, any further sharp dips on key banking and utility blue chips such as ABMB, AMBank, RHB Bank and TM should encounter buying support cushioning downside, while construction related stocks like Ekovest, Mudajaya, Naim Holdings and WCT Holdings should also attract bargain hunters at current depressed levels. Chart 3 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 Monday, February 12, 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 3 of 3
15. ECONOMIC UPDATE Monday , February 12, 2018 FBMKLCI: 1,819.82 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Mal ays ian Ec ono my Weak December IPI Result; but Strong 2017 Shazma Juliana Abu Bakar Farid Burhanuddin Tel: +603-2167 9608 Tel: +603-2167 9220 shazma@ta.com.my farid@ta.com.my www.taonline.com.my December IPI Review § Malaysia's Industrial Production Index (IPI) registered its slowest growth since May 2006. Overall industrial output eased to 2.6% YoY to 137.7 points in December 2017 from 5.0% YoY gain previously, due to weaker manufacturing output and a contraction in the mining production. The gain was below consensus estimate of 4.6% YoY. On a monthly comparison, IPI declined by 1.3% in seasonally adjusted terms, probably to lesser working days as compared to November 2017. § § During the month, manufacturing output (65.9% of total IPI) expanded by 5.3% YoY, as compared with 6.7%. YoY gain previously. The slower growth was led by softer output in the exports-oriented manufacturing industries (December 2017: +3.8% YoY; November 2017: +6.8% YoY). Preventing from further slowdown was better growth performance in the domestic-oriented industries (December 2017: +9.3% YoY; November 2017: +7.1% YoY). On seasonally adjusted basis, factory output decreased by 0.7% MoM in December 2017. - Slower production of export-oriented industries (47.4% of total IPI) was affected by lower output of electronics and electrical (E&E) products to 4.1% YoY from 6.9% YoY previously. Note that, this is also in tandem with lower exports of E&E products (December 2017: +6.2% YoY; November 2017: +21% YoY). Others showed moderate output growth of computer, electronics & optical products, which increased by 4.5% YoY, as compared with 7.5% YoY gain in November 2017; manufacture of electrical equipment eased to 1.1% YoY (November 2017: +3.1% YoY); and manufacture of machinery & equipment increase moderately by 2.9% YoY (November 2017: +3.6% YoY). - Outside E&E, petroleum, chemical, rubber and plastic products was also more than halved to 3.6% YoY from 7.5% YoY gain in November 2017, due to lower production of coke and refined petroleum products (December 2017: +1.7% YoY; November 2017: +9.4% YoY) as well as a drop in basic pharmaceutical products and pharmaceutical preparations (December 2017: -1.6% YoY; November 2017: +11.5% YoY) - In contrast, output of domestic-oriented industries posted a stronger growth output of 9.3% YoY vs. 7.1% YoY increase previously. The increase was reflected by higher demand for food and beverages following festive season as well as the flood factor. As a result, the food, beverages and tobacco surged by 17% YoY as compared with 8.2% YoY gain previously. Mining output (28.9% of total IPI) has registered its third consecutive month of contraction, declining by 4.1% YoY in December 2017 (November 2017: +0.2% YoY). This was due to lower crude oil production (December 2017: -5.0% YoY; November 2017: +0.3% YoY) and natural gas output (December 2017: -3.2% YoY; November 2017: flat growth). On seasonally adjusted terms, mining output declined by 2.6% MoM. Page 1 of 5
16. 12-Feb-18 § Electricity production (5.2% of total IPI) in December 2017 increased by 3.9% YoY (November 2017: +3.9% YoY). On seasonally adjusted terms, the output decreased by 0.5% MoM. Manufacturing Sales Performance § Mirroring the lower production and exports of manufacturing goods, the sales value moderated to a single-digit growth of 9.4% YoY growth amounted RM67.3bn in December 2017. On a MoM comparison, sales in the manufacturing sector increased by 0.9%. In 2017, sales increased at a robust pace of 13.7% vs. 2016’s 1.3%. § Meanwhile, total employees engaged in the sector during the month was 1,057,591, an increase of 24,694 persons (or +2.4% YoY). With that, productivity rose by 6.8% YoY in December 2017, as compared with November’s 8.6% YoY gain. Outlook § Despite weaker December output, overall IPI growth in 2017 was robust at 4.5% YoY vs. 3.8% YoY in 2016 (TA Forecast: +4.6%). Positive growth were seen across sectors with manufacturing, mining and electricity output rose by 6.1% YoY, 0.5% YoY and 2.6% YoY, respectively, last year. Higher manufacturing output last year was resulted from persistent output growth in both external and domestic sector. Output in the exportsoriented industries rose by 5.7% YoY while domestic production grew by 7.1% YoY. Positive growth was also seen in major products, including E&E (2017: +8.0% YoY; 2016: +7.0% YoY); food, beverages & tobacco (2017: +10.9% YoY; 2016: +1.3% YoY); textiles, wearing apparel, leather products and footwear (2017: +7.9% YoY; 2016: +6.7% YoY); and nonmetallic mineral products, basic metal and fabricated metal products (2017: +4.7% YoY; 2016: +4.4% YoY). § The Department of Statistics Malaysia is set to announce the result for 4Q17 GDP and 2017 on 14 February 2014. Though 4Q17 IPI data was behind than the third quarter, we still project for a resilient GDP growth performance. § On the supply side, we project a mixed performance across sub-sectors. Weaker results for manufacturing and mining sectors are expected in the fourth quarter (as suggested by moderate manufacturing and mining IPI data in the fourth quarter). The services sector is, however, expected to remain as the main catalyst of growth. In fact, the Volume Index of Services expanded by +6.8% YoY in 4Q17 (3Q17: +6.9% YoY). The agriculture sector is also expected to boost up growth following improving commodity prices and better demand. For instance, crude palm oil output grew by 22.4% YoY in the fourth quarter of last year (3Q17: +8.3% YoY). We may see a resilient growth in the construction sector. The value of construction work done in 4Q17 grew by +7.7% YoY vs. 8.1% YoY in the third quarter. § On the demand side, growth will be supported by the domestic sector, both from private and public consumption. Better growth result from the external side is also expected as suggested by robust trade performance in the last quarter. To recap, nominal exports increased by 12.4% YoY in 4Q17 while nominal imports was up by 14.4% YoY. § Thus, maintain our 4Q17 GDP projection at 6.0% and full year 2017 at 5.9%. Page 2 of 5
17. 12-Feb-18 Figure 1 : Statistical Summary of Malaysia’s Industrial Production (2010=100) IPI Mining Electricity Manufacturing Manufacturing Sales Value 2016 3.8% 1.6% 8.5% 4.3% 1.3% Sep-17 4.7% 2.1% 2.2% 5.7% 10.6% Oct-17 3.4% 0.8% 4.6% 4.2% 11.0% Nov-17 5.0% 0.2% 3.9% 6.7% 10.9% Dec-17 2.9% -4.1% 3.9% 5.3% 9.4% 3Q17 5.8% 2.5% 4.3% 7.1% 16.2% 4Q17 3.7% -1.1% 4.1% 5.4% 10.4% 2017 4.5% 0.5% 2.6% 6.1% 13.7% Source: DOS, TA Securities Malaysia: Industrial Production Figure 2: Overall IPI (2016-December 2017) Figure 3: IPI by Sector (2016-December 2017) Source: DOS, TA Securities Figure 4: Manufacturing Sales vs. Output (2016-December 2017) Source: DOS, TA Securities Source: DOS, TA Securities Figure 5: Domestic vs. Exports Oriented Industries (2016-December 2017) Source: DOS, TA Securities Page 3 of 5
18. 12-Feb-18 Figure 6 : Figure 6: Manufacturing: IPI vs GDP (2012-4Q17e) Source: DOS, TA Securities Figure 8: Index of Construction vs IPI Construction (2012-4Q17e) Source: DOS, TA Securities Figure 7: Figure 6: Mining: IPI vs GDP (2012-4Q17e) Source: DOS, TA Securities Figure 9: Index of Services vs IPI Services (2012-4Q17e) Source: DOS, TA Securities Figure 10: Wholesale & Retail vs Retail Trade vs PCE (2012-4Q17e) Source: DOS, TA Securities Page 4 of 5
19. 12-Feb-18 ( TH I S PAGE I S I N TEN TIO N ALL Y L EF T B L ANK ) 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 www.ta.com.my Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 Page 5 of 5
20. COMPANY UPDATE Monday , February 12, 2018 FBMKLCI: 1,819.82 Sector: Transportation THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM0.46 (+71.7%) Perak Transit Berhad Last Traded: RM0.27 Rent Escalations Tan Kam Meng, CFA BUY Tel: +603-2167 9605 kmtan@ta.com.my Updates Rental for advertising space. We can be certain now that Perak Transit’s (Ptrans) FY17 earnings, which will be due this month, will be ended with a bang. This is after being informed that the rental for advertising space has been revised higher by approximately 7%, effective Sep-17, after the group converted some of the space within Terminal Amanjaya (Terminal AJ) for digitised advertising activities. This will then be followed by another hike of approximately 5%, effective Apr-18, for the normal annual increment. All these came as a surprise to us as the timing and the quantum of the rent escalations came in better than our expectation. In our previous forecast, we project rental reversal of 5%, effective Apr-18 for the lease of advertising space. Share Information Bloomberg Code 0186 Listing Ace Market 1257.2 Share Cap (mn) 339.4 Market Cap (RMmn) 52-wk Hi/Lo (RM) 0.382/0.145 8,138.0 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) 55.6 na Beta Major Shareholders (%) Dato' Sri Cheong & family - 38.9% Tan Sri Dato' Sri Koh Kin Lip - 5.5% Forecast Revision Forecast Revision (%) Terminal Kampar to commence in end-18. As far as the new terminal, i.e.: Terminal Kampar, is concerned, we understand from management that construction works are progressing smoothly and the integrated terminal would likely open for express bus operations by end18. Meanwhile, the hotel, Cineplex and other F&B outlets would progressively open in 1H19. Valuation We raise our SOP-valuation to 52sen/share (from 49sen/share previously). The target price is increase to RM0.46 (from RM0.44 previously) after pegging a 10% discount to the group’s SOP-valuation (see Figure 1). We continue to like the stock for its superior earnings quality where the bulk of the group’s earnings are recurring. Meanwhile, we foresee earnings expansion and TP upgrade post completion of Terminal Kampar in end-18. Maintain Buy. PERAK MK Stock Code Rental for promotional space. Besides, we can also look forward to a prosperous FY18 as the company is affirmative that the rental rate for promotional space would be revised higher by approximately 15%, effective Apr-18. The hike is higher than our expectation of 5% as the group has managed to free up more net lettable areas by taking out those bus ticketing booths within Terminal AJ after a successful implementation of centralised ticketing system for express bus operations in Ipoh. Forecast We raise our FY17-19 earnings higher by 5-11% after changing our rental assumptions for advertising and promotional space within Terminal AJ. www.taonline.com.my FY17 10.7 FY18 4.8 Net profit (RMmn) 28.6 30.0 Consensus 25.6 28.0 TA's / Consensus (%) 111.9 107.3 Buy (Maintained) Previous Rating Financial Indicators FY17 FY18 Net gearing (x) 0.4 0.5 CFPS (sen) 0.5 (0.3) P/CFPS (x) 51.6 nm ROAA (%) 8.1 7.5 ROAE (%) 13.6 13.0 NTA/Share (RM) 0.2 1.6 0.2 1.4 Price/ NTA (x) Share Performance (%) Price Change PTRANS FBM KLCI 1 mth (8.5) (0.2) 3 mth (10.0) 4.5 6 mth (1.1) 3.0 12 mth 74.2 7.1 (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 3