Bursa Malaysia Daily Market Report - 12 September

Transcription

1. Tuesday , 12 September, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED REPORTS’ News 1. Daily Market Commentary 2. Daily Brief Fundamental Reports 1. 2. 3. 4. 5. Bermaz Auto Berhad: Poised for a Comeback Ibraco Berhad: Expanding Presence in the Klang Valley Malaysia Airports Holdings Berhad: Benefitted from Sea Games Malaysian Economy: Surprise July IPI Result Plantation Sector: MPOB Data Within Expectations Technical Reports 1. Daily Technical Stock Picks 2. Daily Stock Screen 3. Foreign Technical Stock Watch (AUS HK & FSSTI) 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. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research
2. Daily Note Daily Market Commentary (A Participating Organisation of Bursa Malaysia Securities Bhd) Menara TA One, 22 Jalan P Ramlee, 50250 Kuala Lumpur Tel : 603 - 2072 1277. Fax : 603 - 2032 5048 Tuesday, 12 September 2017 TA Research e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (11.09.2017) Volume (mil) +/-chg (RMmn) Main Market 1,751.1 -6.1 1,966.8 Warrants 213.8 26.7 26.2 ACE Market 753.7 -254.1 167.6 Bond 11.6 -1.4 1.5 ETF 0.0 -0.03 0.0 Total 2,730.2 2,162.1 Off Market 48.6 -112.3 327.4 Value +/-chg -87.1 4.1 -16.7 -0.5 -0.06 190.9 Major Indices Index +/- chg Malaysia FBMKLCI 1,782.74 FBMEMAS 12,712.17 FBMSCAP 16,961.04 September Futures 1,781.00 Other Markets DOW JONES 22,057.37 NASDAQ (US) 6,432.26 FTSE (UK) 7,413.59 NIKKEI (JAPAN) 19,545.77 KOSPI (KOREA) 2,359.08 HANG SENG (HK) 27,955.13 FSSTI (S'PORE) 3,228.51 SET (BANGKOK) 1,637.54 JCI (JAKARTA) 5,871.88 SHANGHAI 3,376.42 SHENZHEN 1,991.73 AUSTRALIA 5,713.15 Value/ Volume 1.12 0.12 0.22 0.13 1.61 0.79 6.74 Review & Outlook Up Down 376 224 97 72 50 52 4 1 0 1 527 350 % chg % YTD chg 2.84 22.89 82.88 9.50 0.16 0.18 0.49 0.54 8.59 10.86 15.26 8.90 259.58 72.07 35.99 270.95 15.36 286.66 -0.05 1.93 14.76 11.18 15.86 40.53 1.19 1.13 0.49 1.41 0.66 1.04 0.00 0.12 0.25 0.33 0.80 0.71 11.61 19.49 3.79 2.26 16.41 27.07 12.07 6.13 10.86 8.79 1.15 0.84 Bursa Malaysia shares gained Monday on rotational buying interest in lower-liner steel-related counters, while blue chips recovered mildly in line with the region as geopolitical tensions over North Korea eased. The KLCI rose 2.84 points to close at 1,782.74, off an early low of 1,778.27 and high of 1,784.25, as gainers led losers 527 to 350 on robust turnover of 2.73bn shares worth RM2.16bn. Improving market breadth and trading momentum should support further gains, reinforced by overnight strength on Wall Street as Hurricane Irma caused less damage and reducing geopolitical tensions in North Korea. Immediate resistance for the index stays at the recent high of 1,785, followed by more significant hurdle from the 16 June peak of 1,796. Immediate support will be the recent low of 1,756, while a confirmed breakdown below the July low of 1,751 would expedite correction to stronger support at 1,729, matching a key support in April. AirAsia shares need convincing breakout above the 16/5/17 peak (RM3.59) to boost upside momentum towards RM3.90, the 123.6%FP (RM4.14) and 138.2%FR (RM4.48) going forward, while uptrend support is at RM3.26, matching the 50 and 100-day moving averages. Likewise, AAX requires decisive breakout above the 61.8%FR (41sen) to enhance upside potential and aim for the 76.4%FR (44sen), 49.5sen and the 22/5/ 17 peak (55sen), matching the 123.6%FP, ahead. Key retracement supports are from the 50%FR (38sen) and 38.2%FR (36sen). News Bites • • • • • Top 10 KLCI Movers Based on Mkt Cap. Off Market (mn) HAPSENG JAG DNONCE ANNJOO GCB 39.0 2.0 2.0 1.7 1.2 (RM) @ @ @ @ @ 7.82 0.14 0.31 3.74 1.48 Counter Mkt Cap. (RM’mn) MAYBANK 101,561 SIME 62,160 IHH 61,283 CIMB 59,760 MAXIS 46,071 AXIATA 45,379 DIGI 38,098 GENM 33,444 IOICORP 32,482 TM 24,239 Chg (RM) 0.02 0.07 0.01 0.02 0.03 0.02 0.02 0.04 0.24 0.05 Vol. (mn) 11.75 7.58 10.16 9.20 10.83 3.41 2.37 5.06 0.38 0.90 Important Dates QL - 3:10 Bonus Issue - BI of 374.4m shares. 3 bonus shares for every 10 existing shares. Entitlement Date: 12/09/2017. LISTING ON: 13/09/2017. HCK - 1:2 Rights Issue - RI of up to 210.6m warrants. 1 warrant for every 2 existing shares held, at an issue price of RM0.05 per rights warrant. Application Closed: 15/09/2017. LISTING ON: 02/10/2017. • • • • • • • Malaysia's industrial output surged by 6.1% YoY in July as all three major sub-sectors - manufacturing, mining and electricity - posted positive growth. Sime Darby Bhd has announced the board of directors' line-up for its pure plays, Sime Darby Plantation Bhd and Sime Darby Property Bhd. Maju Holdings Sdn Bhd, controlled by Tan Sri Abu Sahid Mohamed, has made an offer to UEM Group Bhd and EPF to take over PLUS Malaysia Bhd and the indicative offer implies a total enterprise value in excess of RM36bn. Malaysia Airports Holdings Bhd, including its Istanbul operations, recorded a 7.8% increase in August 2017 with 11.4mn passenger movements, boosted by higher number of international passengers. AirAsia Bhd said Philippines AirAsia has postponed its planned US$200mn IPO in 2017's second half to 2018 to further expand Philippines AirAsia's business. Bermaz Auto Bhd registered weaker 1QFY18 core net profit of RM20.2mn (QoQ: -9.0%, YoY: -50.8%) due to higher taxation and interest cost and weaker contributions from associates. It was within expectations. IHH Healthcare Bhd has merged its Bulgaria-based indirect units, Acibadem City Clinic EAD and Tokushukai-Sofia EOOD, as part of its internal structural re-organisation. George Kent (Malaysia) Bhd has won a tender bid for the second time to supply and deliver 650,000 water meters worth US$6.9mn to the Hong Kong's Water Supplies Department. Ibraco Bhd has proposed to buy 4 parcels of vacant freehold land in Petaling Jaya, measuring a total of 15,811.16 sqm for RM37.4mn. HSS Engineers Bhd's associate, HSS Integrated Sdn Bhd, has been appointed by Pengurusan Aset Air Bhd as the engineering consultant for the upgrading of high-priority water distribution system for the Iskandar Malaysia Region. Cypark Resources Bhd has bagged a RM17.0mn contract from the Department of Solid Waste Management for the proposal to design, build and complete the safe closure of the solid waste disposal site at Bukit Palong, Port Dickson, Negeri Sembilan. European Central Bank Executive Board member Benoit Coeure warned that the rising euro could depress inflation unless it's offset by a strengthening economy, bolstering the case for keeping monetary policy loose for an extended period. Exchange Rate USD/MYR 4.1989 0.0059 USD/JPY 108.53 1.1400 EUR/USD 1.201 -0.0058 Commodities Futures Palm Oil (RM/mt) 2,796.00 33.00 Crude Oil ($/Barrel) 48.10 0.54 Gold ($/tr.oz.) 1,328.00 -19.40 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. for TA SECURITIES HOLDINGS BERHAD Kaladher Govindan, Head of Research
3. TA Securities Tuesday , September 12, 2017 FBMKLCI: 1,782.74 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Daily Brief Market View, News In Brief: Corporate, Economy, and Share Buybacks THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TA Research Team Coverage Market View Tel: +603-2072 1277 taresearch@ta.com.my www.taonline.com.my Further Rise Likely on Overnight US Strength Bursa Malaysia shares gained Monday on rotational buying interest in lower-liner steelrelated counters, while blue chips recovered mildly in line with the region as geopolitical tensions over North Korea eased. The KLCI rose 2.84 points to close at 1,782.74, off an early low of 1,778.27 and high of 1,784.25, as gainers led losers 527 to 350 on robust turnover of 2.73bn shares worth RM2.16bn. Resistance at 1,785, Next at 1,796 Improving market breadth and trading momentum should support further gains, reinforced by overnight strength on Wall Street as Hurricane Irma caused less damage and reducing geopolitical tensions in North Korea. Immediate resistance for the index stays at the recent high of 1,785, followed by more significant hurdle from the 16 June peak of 1,796. Immediate support will be the recent low of 1,756, while a confirmed breakdown below the July low of 1,751 would expedite correction to stronger support at 1,729, matching a key support in April. Buy Dips AirAsia & AirAsia X AirAsia shares need convincing breakout above the 16/5/17 peak (RM3.59) to boost upside momentum towards RM3.90, the 123.6%FP (RM4.14) and 138.2%FR (RM4.48) going forward, while uptrend support is at RM3.26, matching the 50 and 100-day moving averages. Likewise, AAX requires decisive breakout above the 61.8%FR (41sen) to enhance upside potential and aim for the 76.4%FR (44sen), 49.5sen and the 22/5/17 peak (55sen), matching the 123.6%FP, ahead. Key retracement supports are from the 50%FR (38sen) and 38.2%FR (36sen). Asian Markets Rebound on Relief at North Korea Procrastination Asian stocks rose on Monday after North Korean dictator Kim Jong Un decided to hold a party over the weekend rather than launch another missile. Against expectations, North Korea didn’t conduct a weapons test on Saturday, when the country celebrated its founding day. A year earlier, Pyongyang conducted a nuclear test to mark the occasion. The United States and its allies had been bracing for another long-range missile launch in time for the 69th anniversary of North Korea’s founding last weekend. Investors were also remained cautious over the possible economic impact of Hurricane Irma as it chewed its way up the Florida coast, knocking out electricity to 3 million homes and businesses statewide. Japan’s Nikkei rallied to more than a one-week high after the dollar recovered against the yen, lifting recently battered exporters and financial stocks. The Nikkei share average rose 1.4 percent to 19,545.77, its best closing level since Sept. 1. In down Under, the S&P/ASX 200 rose 0.71 percent, with the information technology sub-index leading gains. Meanwhile, China stocks were steady on Monday, as investors cheered the government’s plan to look into banning petrol fuel cars while new central bank policies apparently aimed at taming rapid gains in the yuan were also in focus. The blue-chip CSI300 index was unchanged at 3,825.65 points, while the Shanghai Composite Index added 0.3 percent to 3,376.42 points. Page 1 of 7
4. TA Securities 12-Sep-17 A Member of the TA Group S &P 500 Rallied to Record as Irma Threat Recedes The S&P 500 surged over 1 percent to a record high close on Monday as tropical storm Irma caused less damage than expected in Florida, and after North Korea did not test-fire missiles over the weekend, which some had feared. Irma caused severe flooding in many Florida cities and left more than 6 million homes and businesses without power, but damage appeared to be less than expected. That relieved investors, especially in the wake of Hurricane Harvey, whose devastation is estimated to dent third-quarter economic growth. Geopolitical tensions also eased after North Korea did not mark its founding day on Saturday with another launch of a long-range missile, which the United States and its allies had been bracing for. All 11 major S&P 500 sectors rose, led by financial stocks, with insurers advancing as Irma, once ranked as one of the most powerful hurricane recorded in the Atlantic, lost power. The Dow Jones Industrial Average rose 259.58 points, or 1.19 percent, to 22,057.37, the S&P 500 gained 26.68 points, or 1.08 percent, to 2,488.11 and the Nasdaq Composite added 72.07 points, or 1.13 percent, to 6,432.26. Page 2 of 7
5. TA Securities 12-Sep-17 A Member of the TA Group News In Brief Corporate Sime Darby Bhd has announced the board of directors ’ line-up for its pure plays, Sime Darby Plantation Bhd and Sime Darby Property Bhd. Abdul Ghani will head Sime Darby Plantation as its chairman, with Tan Sri Mohd Bakke Salleh as executive deputy chairman and managing director. Meanwhile, Sime Darby Property will be chaired by Tan Sri Abdul Wahid Omar, with Datuk Seri Amrin Awaluddin as managing director and Datuk Tong Poh Keow as executive director and chief financial officer. (The Edge) Felda Global Ventures Holdings Bhd has confirmed reports that Datuk Wira Azhar Abdul Hamid, 56, has been appointed its new chairman. Azhar is taking over the reins from acting chairman Tan Sri Dr Sulaiman Mahbob, in line with a previous announcement by Prime Minister Datuk Seri Najib Razak last Friday. (Bursa Malaysia/ The Edge) Maju Holdings Sdn Bhd, controlled by Tan Sri Abu Sahid Mohamed, has made an offer to UEM Group Bhd and EPF to take over PLUS Malaysia Bhd. It is understood that Maju’s indicative offer implies a total enterprise value in excess of RM36bn for PLUS. (The Edge) Malaysia Airports Holdings Bhd, including its Istanbul operations, recorded a 7.8% increase in August 2017 with 11.4mn passenger movements, boosted by higher number of international passengers. International passengers rose 15.8% with 5.5mn passengers in August while domestic passengers grew by 1.3% to 5.9mn passengers. (Bursa Malaysia/ The Star) AirAsia Bhd said Philippines AirAsia has postponed its planned US$200mn IPO to 2018 to further expand Philippines AirAsia's business. Philippines AirAsia had originally scheduled its IPO in 2017's second half (The Edge) IHH Healthcare Bhd has merged its Bulgaria-based indirect units, Acibadem City Clinic EAD and Tokushukai-Sofia EOOD, as part of its internal structural re-organisation. It was undertaken to streamline Acibadem group's structure and management. (Bursa Malaysia/ Bernama) George Kent (Malaysia) Bhd has won a tender bid for the second time to supply and deliver 650,000 water meters to the Hong Kong’s Water Supplies Department (WSD). George Kent will supply the DN15 Brass PSM-T water meters, worth US$6.9mn (RM 28.7mn) to WSD within two years in 24 shipments. (Bursa Malaysia/ New Straits Times) Bermaz Auto Bhd's 1QFY18 sank 50.8% to RM20.2mn from RM41.1mn in the previous corresponding quarter as revenue fell on lower sales volume, profit margins and contributions from Mazda Malaysia. The group has declared a dividend of 1.5sen per share. (Bursa Malaysia/ The Star) Ibraco Bhd has proposed to buy 4 parcels of vacant freehold land in Petaling Jaya, measuring a total of 15,811.16 sqm for RM37.4mn. It will be settled via a combination of debt and equity, with 30% to be paid from its cash hoard while the remaining 70% will be paid via bank borrowings. (Bursa Malaysia/ The Edge) HSS Engineers Bhd's (HEB Group) associate, HSS Integrated Sdn Bhd (HSSI), has been appointed by Pengurusan Aset Air Bhd as the engineering consultant for the upgrading of high-priority water distribution system for the Iskandar Malaysia Region. The RM5.1mn contract encompassed engineering design and construction supervision for the highpriority project. (Bursa Malaysia/ Bernama) Page 3 of 7
6. TA Securities 12-Sep-17 A Member of the TA Group Cypark Resources Bhd has bagged a RM17 .0mn contract from the Department of Solid Waste Management for the proposal to design, build and complete the safe closure of the solid waste disposal site at Bukit Palong, Port Dickson, Negeri Sembilan. (Bursa Malaysia/ Bernama) Pasukhas Group Bhd announced that Telekom Malaysia Bhd is claiming a total sum of RM698,342.98, together with a 5% interest rate and other costs and reliefs. (Bursa Malaysia/ The Edge) Mexter Technology Bhd has redesignated its executive director Sui Diong Hoe as managing director, following the retirement of his predecessor Ivan Sia Teck Fatt. Mexter also announced the appointment of Ahmad Rafique Mat Tahir as its chief operating officer. (Bursa Malaysia/ The Edge) Page 4 of 7
7. TA Securities 12-Sep-17 A Member of the TA Group News In Brief Economy Asia Malaysia ’s Industrial Output Grows in July 2017 Malaysia’s industrial output surged by 6.1% in July as all three major sub-sectors – manufacturing, mining and electricity – posted positive growth. The Statistics Department said growth was led by manufacturing (+8.0%), electricity (+7.9%) and mining (+0.2%). In the case of manufacturing, the expansion was mainly due to higher growth in major subsectors namely: electrical and electronics products (+10.5%); food, beverages and tobacco (+19.2%); and petroleum, chemical, rubber and plastic products (+3.9%). The mining sector output rose due to an increase in natural gas although the index for crude oil fell during the month. Meanwhile, Malaysia’s July manufacturing sales continued to record a strong growth of 22.2%, rising to RM63.9bn as compared to RM52.3bn reported a year ago. YoY, the significant increase in sales value in July 2017 was due to the increase in E&E products (27.6%), petroleum, chemical, rubber and plastic products (+24.0%) and nonmetallic mineral products, basic metal and fabricated metal products (+10.2%). These three sub-sectors contributed 80.4% to the sales value of the manufacturing sector. (New Straits Times) Other news in Malaysia • The Agriculture and Agro-Based Industry Ministry will impose a minimum 30% quota for bumiputra importers to break the beef import monopoly. Its Deputy Minister, Datuk Seri Tajuddin Abdul Rahman, said the requirement would also be imposed on two abattoirs in India, which had received approval to export beef to Malaysia to ensure bumiputra participation in the beef import business. (The Star) • Malaysia’s business events industry is expected to generate more than RM3.9bil in gross national income and bring in 2.9 million visitors by 2020, said Tourism and Culture Minister, Datuk Seri Mohamed Nazri Abdul Aziz. He said the industry would also offer 16,720 jobs and last year alone, 5.1% of tourist arrivals came from business event visitors. (The Star) Singapore Business Sentiment for Q4 2017 Moderates but Still Optimistic Business sentiment for the fourth quarter of 2017 has moderated somewhat although it remains optimistic, according to the latest survey by the Singapore Commercial Credit Bureau (SCCB). It’s Business Optimism Index dropped from +3.58 percentage points in Q3 2017 to +2.60 percentage points in Q4 2017. Expectations for net profits have come down compared to a quarter ago. Inventory levels are contracting. Sales volumes and employment levels are still expected to expand, although the pace of expansion slowed. Expectations for selling prices, along with new orders, are up. Across industries, the manufacturing, services and wholesale sectors are the most optimistic. (The Business Times) Japan Core Machine Orders Jump 8.0% in July Core machine orders in Japan surged a seasonally adjusted 8.0% on month in July, the Cabinet Office said - standing at 853.3bn yen. That beat forecasts for an increase of 4.1% following the 1.9% decline in June. On a yearly basis, core machine orders tumbled 7.5% again beating expectations for a decline of 7.8% following the 5.2% decline in the previous month. The total value of machine orders, which includes volatile ones for ships and electric power companies, added 4.9% on month and 10.2% on year to 2,382.2bn yen. Manufacturing orders gained 2.9% on month and fell 1.8% on year to 355.7bn yen, while non-manufacturing orders added 4.8% on month and lost 12.3% on year to 472.3bn yen. Government orders shed 3.3% on month and 1.6% on year to 267.8bn yen. Orders from overseas gained 9.1% on month and 30.1% on year to 995.9bn yen. Orders from agencies eased 0.6% on month and gained 8.2% on year to 126.7bn yen. For the third quarter of 2017, core machine orders are forecast to have advanced 7.0% on quarter and 0.1% on year. Page 5 of 7
8. TA Securities 12-Sep-17 A Member of the TA Group Other news in Japan • The Bank of Japan said that the M2 money stock in Japan was up 4.0% on year in August, coming in at 978.0tn yen. That was unchanged from the July reading, although it was shy of estimates for a gain of 4.1%. The M3 money stock gained 3.4% on year to 1,305.0tn yen - unchanged and in line with forecasts. The L money stock jumped an annual 3.7% to 1,710.0tn yen, following the 3.5% gain in the previous month. • The tertiary industry activity index gained 0.1% MoM in July, reversing a 0.2% drop in June and flat growth in May. The monthly rate came in line with expectations. (RTT News) Weak Liquidity Still a Concern for Many Firms in Asia, Says Moody's Weak liquidity is still a concern for many companies in Asia though Moody's Investors Service's Asian Liquidity Stress Index (Asian LSI) showed an improvement in August. The ratings agency said its Asian LSI improved in August, decreasing to 26.8% from 28.5% in July 2017. The Asian LSI measures the percentage of high-yield companies with SGL-4 scores as a proportion of high-yield corporate family ratings (CFRs) and decreases when speculative-grade liquidity improves. A Moody's vice-president and senior credit officer Brian Grieser said the reading remained above the long-term average of 23.0%, highlighting that weak liquidity is still a concern for many companies in Asia. Moody's analysis is contained in its just-released monthly report titled "Asian Liquidity Stress Index: Asian LSI decreases to 26.8% in August from 28.5% in July". The Moody's report points out the liquidity stress sub-index for North Asian high-yield companies decreased to 25.0% in August from 27.6% in July. Within this portfolio, the Chinese subindex decreased to 25.6% from 28.6%. Meanwhile, the Chinese high-yield property subindex decreased to 9.5% from 9.8%, and the Chinese high-yield industrials sub-index decreased to 44.4% from 50%. As for South and Southeast Asian high-yield companies the liquidity stress sub-index for remained at 30%, while the Indonesian sub-index remained at 26.1%. (The Star) Europe and United Kingdom ECB's Coeure Warns Persistent Euro Gains May Weigh on Inflation European Central Bank Executive Board member Benoit Coeure warned that the rising euro could depress inflation unless it’s offset by a strengthening economy, bolstering the case for keeping monetary policy loose for an extended period. “Exogenous shocks to the exchange rate, if persistent, can lead to an unwarranted tightening of financial conditions with undesirable consequences for the inflation outlook,” Coeure said in Frankfurt. “Against this background, the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring.” The euro’s surge has become an additional headache for the ECB as policy makers try to determine the future of their bond-buying program, which is currently scheduled to expire by the end of this year. President Mario Draghi warned last week that officials were watching the currency after it gained 14% against the dollar this year and forced the central bank to cut its inflation projection. Coeure said that while there is no immediate cause for concern, as the 19-nation bloc’s improving economy allows companies to raise prices to offset the dampening effect of the exchange rate, there is reason for watchfulness. (Bloomberg) UK Consumers Spend a Bit More in August, 2017 Still Seen Weak British consumers stepped up their domestic spending last month for the first time since April, as more of them holidayed at home due to the Brexit hit to the pound, payment card company Visa said. But Visa said this year still looks like being the weakest for spending since 2013, as households struggle with rising inflation in the wake of last year's referendum decision to leave the European Union and weak wage growth. Consumer spending, the engine of the British economy, last month rose 0.3% compared with August 2016 on an inflation-adjusted basis, Visa said based on its credit and debit card transaction Page 6 of 7
9. TA Securities 12-Sep-17 A Member of the TA Group data . In July spending fell 0.8% YoY, and in August spending on transport and communications fell for the eighth consecutive month as Britons shied away from big-ticket items such as car purchases and air travel, Visa said. But consumers were paying more to have fun, probably reflecting the growing number of people taking their holidays in Britain due to the fall in the value of sterling since the Brexit vote, Visa said. The rise in inflation caused by the weaker pound has weighed on British consumer spending since early 2017, leaving the Bank of England hoping that a pickup in exports and investment might offset the hit to the broader economy. (The Star) Share Buy-Back: 11 September 2017 Company BKAWAN DAIBOCI E&O EPMB FFHB GRANFLO KOMARK KSL PECCA SUPERMX TROP Bought Back Price (RM) Hi/Lo (RM) 9,500 15,000 48,000 5,000 16,000 10,000 10,000 98,300 14,400 100,000 140,000 18.94/18.80 2.19/2.18 1.61/1.60 0.53 0.61 0.25 0.25 1.26 1.45 1.80 0.95/0.94 18.94/18.80 2.19/2.18 1.66/1.59 0.54/0.53 0.62/0.60 0.245/0.24 0.25/0.245 1.27/1.25 1.46/1.45 1.82/1.80 0.95/0.935 Total Treasury Shares 33,058,231 418,100 5,887,647 6,928,900 212,200 6,904,800 4,852,700 8,552,700 862,900 16,301,000 4,456,542 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. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 7 of 7
10. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR PECCA UMW Share Price (RM) 11-Sep-17 2.14 2.18 1.46 5.44 Target Price BETA (RM) EPS (sen) FY17 FY18 PER (X) FY17 FY18 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 2.40 2.09 1.69 5.04 0.88 0.60 na 1.38 10.2 20.7 7.8 19.7 16.1 23.2 10.6 30.6 21.0 10.5 18.8 27.6 13.3 9.4 13.8 17.8 5.4 1.9 3.4 2.4 7.5 2.1 3.6 3.7 2.33 2.67 2.04 6.08 -8.2 -18.4 -28.4 -10.5 1.84 2.08 1.45 4.09 16.3 4.8 0.7 32.9 0.5 1.9 -8.2 28.8 4.80 3.70 5.70 8.00 17.50 10.20 23.60 5.80 11.10 1.30 0.82 1.21 1.52 0.63 0.91 0.73 1.31 0.68 33.6 29.4 43.9 49.6 104.9 69.7 137.2 50.6 40.2 31.0 33.6 48.6 55.2 114.2 76.1 142.4 55.0 39.0 11.5 9.0 9.8 13.6 15.1 13.8 15.0 9.9 25.8 12.5 7.9 8.8 12.3 13.9 12.6 14.5 9.1 26.6 4.1 3.0 4.1 3.7 2.8 5.2 2.7 3.0 3.3 4.1 3.0 4.2 4.1 2.8 5.2 2.8 3.0 3.3 4.49 3.00 5.70 7.08 16.30 9.84 20.76 5.59 10.98 -13.8 -11.7 -24.7 -4.4 -2.6 -2.2 -0.8 -10.0 -5.6 3.60 2.08 3.90 4.49 12.70 7.50 19.40 4.53 8.08 7.5 27.4 10.0 50.8 25.0 28.3 6.2 11.0 28.2 4.0 10.9 -0.5 50.1 17.6 17.3 4.5 6.8 18.8 0.37 1.25 5.40 3.40 0.57 1.02 2.31 1.81 5.87 0.38 1.75 6.00 3.50 0.78 0.58 2.26 1.49 6.26 0.62 0.35 0.99 0.97 0.85 1.25 na 0.85 0.23 4.7 15.3 27.8 15.3 4.9 8.3 12.7 11.5 41.9 4.6 14.3 34.5 20.2 5.7 9.6 12.5 11.6 45.7 7.8 8.2 19.4 22.3 11.5 12.3 18.3 15.7 14.0 8.0 8.8 15.6 16.8 10.0 10.6 18.4 15.6 12.8 0.0 2.4 2.2 2.2 4.4 1.0 2.4 1.7 4.3 0.0 2.4 2.2 2.8 4.4 1.0 2.4 1.7 4.3 0.51 1.37 5.52 3.61 0.74 1.39 2.41 2.48 6.15 -28.4 -8.8 -2.2 -5.8 -22.4 -26.6 -4.1 -26.9 -4.6 0.33 0.89 4.65 3.07 0.40 0.44 1.56 1.58 5.57 12.3 41.2 16.1 10.7 42.5 134.5 48.1 14.5 5.4 -16.1 19.0 13.0 6.2 -5.8 77.4 35.9 5.3 -0.2 1.33 1.97 1.58 1.67 na 0.43 8.6 6.7 11.8 10.0 15.4 29.4 11.3 19.8 3.0 5.1 4.5 5.1 1.49 2.19 -10.7 -10.0 0.85 1.92 57.4 2.6 52.9 -2.0 15.00 19.50 18.06 19.14 0.50 0.50 79.3 79.6 86.2 84.0 18.9 24.5 17.4 23.2 5.3 3.7 5.7 3.9 15.30 19.58 -2.0 -0.4 13.72 15.56 9.3 25.3 7.8 19.0 2.07 7.33 24.62 1.19 84.90 4.56 1.76 3.90 0.88 2.23 8.62 27.41 1.50 92.76 4.67 2.46 4.32 1.23 0.58 0.31 0.21 0.38 0.38 0.60 0.61 0.38 0.39 6.5 30.6 121.1 6.5 292.7 23.5 27.4 15.7 8.5 7.5 38.7 150.9 6.6 325.4 27.0 27.4 16.7 11.6 31.8 23.9 20.3 18.3 29.0 19.4 6.4 24.8 10.4 27.5 19.0 16.3 18.0 26.1 16.9 6.4 23.4 7.6 2.0 4.4 2.8 5.0 3.2 2.5 3.4 1.1 2.8 2.3 4.8 3.0 5.0 3.3 2.7 4.5 1.2 4.0 3.00 8.59 26.00 1.28 85.80 4.65 2.06 3.94 1.07 -31.0 -14.7 -5.3 -7.0 -1.0 -1.9 -14.6 -1.0 -17.8 1.98 7.05 22.44 1.13 74.12 2.26 1.50 3.19 0.78 4.5 4.0 9.7 5.2 14.5 101.7 17.3 22.4 12.8 -19.5 0.0 4.9 3.4 8.6 79.6 1.7 17.1 10.7 43.78 52.08 1.08 198.6 187.4 22.0 23.4 4.6 4.6 51.04 -14.2 40.61 7.8 -0.9 9.91 5.90 11.51 6.53 1.42 1.48 45.6 21.0 54.4 27.1 21.7 28.1 18.2 21.8 1.4 1.4 1.6 1.5 10.00 6.38 -0.9 -7.5 7.50 4.31 32.2 36.8 24.7 30.6 2.28 0.14 3.34 0.15 0.88 1.54 19.3 0.4 23.2 0.4 11.8 37.2 9.8 37.5 6.1 0.0 7.0 0.0 3.42 0.16 -33.3 -15.6 2.25 0.05 1.3 170.0 -23.0 170.0 5.86 4.24 6.41 4.70 0.74 0.44 7.9 13.3 13.1 16.4 73.8 32.0 44.8 25.9 0.6 1.4 0.6 1.8 6.70 4.32 -12.5 -1.9 5.54 3.85 5.8 10.1 -7.7 1.4 6.70 6.82 1.81 5.40 1.54 6.87 7.60 1.80 6.05 1.60 0.49 0.16 0.32 -0.20 0.30 17.2 33.9 10.6 26.4 2.8 24.6 40.0 15.1 29.8 4.6 39.0 20.1 17.1 20.4 55.2 27.2 17.1 12.0 18.1 33.2 1.3 2.5 1.8 2.5 1.3 1.6 2.9 2.5 2.8 0.8 7.40 7.36 2.38 5.94 2.62 -9.5 -7.3 -23.9 -9.1 -41.2 4.30 5.62 1.77 4.56 1.37 55.8 21.4 2.3 18.4 12.4 38.7 3.5 -14.2 0.9 -34.7 INDUSTRIAL SCIENTX SKPRES 9.51 1.52 9.28 1.75 0.48 0.56 51.0 8.4 56.5 10.4 18.6 18.2 16.8 14.7 1.8 2.7 1.9 3.4 9.60 1.53 -0.9 -0.7 6.10 1.23 55.9 23.6 41.9 17.8 MEDIA ASTRO MEDIA PRIMA STAR 2.70 0.70 2.36 3.50 0.60 1.35 1.23 0.60 0.55 13.2 0.9 3.3 14.6 2.8 4.0 20.4 82.1 71.2 18.5 24.8 58.4 4.6 1.0 17.8 4.8 3.2 7.6 2.95 1.39 2.60 -8.5 -49.6 -9.2 2.47 0.66 2.19 9.3 6.9 7.8 3.8 -39.1 5.4 -27.5 -11.6 -43.1 -7.7 -5.9 -4.2 -24.3 -3.9 -65.1 0.23 4.14 0.63 7.03 0.44 6.48 1.33 1.51 0.28 122.2 39.4 5.6 3.7 47.1 15.3 19.5 46.4 17.9 96.1 -11.2 -27.9 -0.8 43.8 7.0 -1.9 47.3 -62.3 -33.8 1.28 2.3 -22.9 BANKS & FINANCIAL SERVICES AFG 3.87 AFFIN 2.65 AMBANK 4.29 CIMB 6.77 HLBANK 15.88 MAYBANK 9.62 PBBANK 20.60 RHBBANK 5.03 BURSA 10.36 CONSTRUCTION BPURI GADANG GAMUDA IJM PESONA SENDAI SUNCON WCT LITRAK Building Materials CHINHIN WTHORSE CONSUMER Brewery CARLSBG HEIM Retail AEON AMWAY F&N HUPSENG NESTLE PADINI POHUAT QL SIGN Tobacco BAT GAMING Casino GENTING GENM NFO BJTOTO LUSTER HEALTHCARE Hospitals IHH KPJ Rubber Gloves HARTA KOSSAN SUPERMX TOPGLOV KAREX OIL & GAS DNEX 0.50 0.76 1.04 3.7 4.6 13.7 11.0 2.0 2.0 0.69 LCTITAN 5.77 6.88 na 43.1 64.9 13.4 8.9 2.9 5.4 6.53 MHB 0.66 0.78 1.69 -2.0 -0.5 na na 0.0 0.0 1.16 MISC 7.29 6.56 0.94 56.3 46.9 13.0 15.6 4.1 4.1 7.90 PANTECH 0.64 0.69 1.14 4.0 6.1 16.1 10.4 2.8 4.3 0.68 PCHEM 7.47 7.62 1.04 44.3 44.7 16.9 16.7 2.5 2.7 7.80 SENERGY 1.59 1.71 2.57 6.6 4.0 24.1 40.1 0.6 0.6 2.10 SERBADK 2.21 2.77 na 22.1 25.2 10.0 8.8 3.0 3.4 2.30 UMWOG 0.33 0.80 1.81 -12.0 -3.5 na na 0.0 0.0 0.95 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.31 1.55 1.49 11.3 12.3 11.6 10.7 0.0 0.0 1.98
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price (RM) PLANTATIONS FGV IJMPLNT IOICORP KLK SIME UMCCA 1.71 3.05 4.53 24.74 9.14 6.50 Target Price BETA (RM) 1.52 3.58 4.14 26.18 9.80 7.52 1.69 0.41 1.26 0.78 1.41 0.36 EPS (sen) FY17 FY18 1.0 12.3 17.3 103.4 34.2 37.5 PER (X) FY17 FY18 2.5 172.9 14.1 24.8 21.0 26.1 120.4 23.9 37.3 26.7 34.5 17.3 67.1 21.7 21.5 20.5 24.5 18.9 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg 2.9 2.3 2.1 2.1 2.5 3.5 2.9 2.6 3.5 2.4 2.5 2.6 2.52 3.70 4.81 25.50 9.70 6.55 -32.1 -17.6 -5.8 -3.0 -5.8 -0.7 1.42 2.95 4.30 23.00 7.56 5.50 PROPERTY GLOMAC 0.64 0.70 0.62 1.4 5.7 44.2 11.2 4.3 4.2 0.83 -22.4 0.61 HUAYANG 0.84 0.96 0.50 17.3 10.2 4.8 8.2 4.8 2.4 1.43 -41.7 0.80 IBRACO 0.88 0.94 0.51 3.3 10.5 27.0 8.4 2.3 4.5 1.05 -16.2 0.76 IOIPG 2.05 2.23 1.07 18.9 16.9 10.8 12.1 2.9 2.9 2.46 -16.7 1.85 MAHSING 1.47 1.76 0.83 14.3 13.5 10.3 10.9 4.4 4.4 1.70 -13.5 1.34 SNTORIA 0.81 0.98 0.22 6.2 10.3 13.0 7.8 1.2 1.2 1.00 -19.5 0.69 SPB 4.87 5.98 0.49 25.6 22.8 14.2 16.0 2.5 2.5 5.19 -6.2 4.32 SPSETIA 3.64 4.10 0.73 11.6 12.5 38.5 35.9 3.8 3.8 4.50 -19.1 3.10 SUNWAY 4.47 4.15 0.46 15.8 15.3 17.5 18.1 1.1 1.1 4.52 -1.1 2.89 Note: SUNWAY proposed bonus issue of shares and warrants. Ex-Target price RM1.69. For more details please refer to 15.06.17 report. REIT SUNREIT 1.72 1.86 0.53 8.9 10.1 19.4 17.0 5.3 5.8 1.84 -6.5 1.63 CMMT 1.47 1.72 0.39 8.1 8.6 18.2 17.0 5.7 6.1 1.72 -14.5 1.45 % Chg YTD 20.4 3.4 5.3 7.6 20.9 18.1 10.3 -10.3 3.0 3.1 12.8 8.8 4.9 4.4 16.6 11.0 9.7 16.7 12.7 17.4 54.6 -7.9 -26.1 -12.0 5.2 2.8 0.6 10.2 16.3 49.0 5.5 1.4 0.0 -3.9 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.08 24.20 18.10 14.58 1.41 1.22 21.47 19.37 17.38 1.45 0.60 0.75 0.78 0.77 0.55 6.8 98.2 87.6 131.8 8.4 6.9 102.3 100.1 130.4 11.4 15.8 24.6 20.7 11.1 16.8 15.7 23.7 18.1 11.2 12.3 6.5 3.0 3.5 3.0 3.5 6.5 3.1 3.9 3.1 3.5 1.69 25.70 22.50 14.80 1.64 -36.1 -5.8 -19.6 -1.5 -14.0 1.00 23.00 17.82 13.00 1.38 8.5 5.2 1.6 12.2 2.2 -21.2 1.7 -15.0 4.9 -5.4 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 5.12 4.90 5.81 6.45 5.40 4.90 5.85 7.40 1.39 0.88 0.80 0.62 15.7 20.0 24.5 22.7 16.9 20.4 24.7 23.4 32.7 24.5 23.7 28.4 30.3 24.0 23.5 27.6 1.5 4.1 3.4 3.2 1.7 4.2 3.4 3.3 5.62 5.19 6.60 6.90 -8.9 -5.6 -12.0 -6.5 4.11 4.63 5.48 5.81 24.6 5.8 6.0 11.0 8.5 1.4 -2.8 8.4 TECHNOLOGY Semiconductor & Electronics IRIS 0.18 INARI 2.54 MPI 14.00 UNISEM 4.08 0.25 2.75 15.40 4.30 1.40 0.77 0.20 0.50 -1.3 11.4 89.5 26.9 0.6 13.1 110.2 32.1 na 22.3 15.7 15.1 32.5 19.4 12.7 12.7 0.0 3.9 1.9 2.9 0.0 3.6 1.9 2.9 0.22 2.65 14.30 4.25 -18.2 -4.2 -2.1 -4.0 0.10 1.59 7.20 2.27 80.0 60.1 94.4 79.7 63.6 53.0 88.9 72.9 3.53 9.00 3.76 8.10 0.93 1.26 44.0 17.2 37.6 17.5 8.0 52.2 9.4 51.5 1.1 1.1 1.4 1.1 3.59 9.45 -1.7 -4.8 2.16 5.91 63.4 52.3 54.1 48.5 1.61 3.84 1.80 4.05 0.75 0.78 12.0 17.1 13.6 15.1 13.4 22.4 11.8 25.4 2.7 3.3 3.1 3.0 1.83 4.46 -12.2 -13.9 1.48 3.58 8.8 7.3 3.3 -10.7 TRANSPORTATION Airlines AIRASIA AIRPORT Freight & Tankers TNLOGIS WPRTS SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price (S$) BANKS & FINANCIAL SERVICES DBS 20.43 OCBC 10.92 UOB 23.38 PLANTATIONS WILMAR IFAR 3.22 0.46 Target Price Beta (S$) EPS (cent) FY17 FY18 PER (X) FY17 FY18 Div Yield (%) 52week 52week FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 23.30 12.00 25.40 1.23 1.16 1.06 172.9 87.7 192.9 189.2 92.4 206.5 11.8 12.5 12.1 10.8 11.8 11.3 2.9 5.7 3.0 2.9 6.7 3.0 22.3 11.5 24.6 -8.2 -5.0 -5.0 14.80 8.84 17.98 38.0 31.1 30.0 17.8 22.4 14.6 3.72 0.53 0.96 1.05 28.9 4.9 31.1 5.2 11.1 9.5 10.3 8.9 2.5 2.6 2.8 2.8 4.0 0.6 -19.5 -22.7 3.08 0.44 4.5 4.5 -10.3 -12.4 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. RESULTS UPDATE TA Securities Tuesday , September 12, 2017 FBM KLCI: 1,782.74 Sector: Automotive A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Bermaz Auto Berhad Poised for a Comeback TP: RM2.40(+12.1%) Last Traded: RM2.14 BUY THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Abel Goon Tel: +603-2072 1277 ext.1641 abelgoon@ta.com.my Review Bermaz Auto Bhd (BAuto) registered weaker 1QFY18 core net profit of RM20.2mn (QoQ: -9.0%, YoY: -50.8%) due to 1) higher taxation and interest cost and 2) weaker contributions from associates. Core net profit constitutes 11% and 11% of ours and consensus’ estimates which we deem to be within expectations. This is because we are expecting major earnings growth in the following quarters underpinned by 1) launch of new CX-5 (Oct) and 2) ramp up of exports and production, which would boost associates contributions. We note that EBIT margin expanded slightly QoQ due to better product mix, but was lower YoY due to sales incentives to clear the old CX-5 model. To recap, the new CX-5 will be launched in Oct-17, and is expected to boost sales volumes significantly. Note that the CX-5 is BAuto’s top selling model and boasts lucrative margins. Revenue in FY17 was down 20.7% YoY, which is in-line with the decline in sales volume by 21.4% YoY. However, revenue increased by 10.5% QoQ, which is in-line with prevailing industry trends, where sales is seasonally weaker in the first quarter of each year. Associates contribution fell substantially in 1QFY18 (QoQ: -88.3%, YoY: >100%) which was rather surprising. That said, we believe this was a oneoff event and unlikely to persist going forward. According to management, MMSB’s sales was only 1,813 units (1Q17: 3,559, 4Q17: 4,913) due to weaker demand from the CX-5 run-out programme, and ageing Mazda 3 model. Nevertheless, management expects sales to normalize in 2QFY18, followed by a huge jump in 3QFY18 on the back of full quarter contribution from the new CX-5. BAuto declared first interim dividend of 1.5 sen for 4QFY17, which implies payout ratio of 86% for the full year. We expect BAuto to pay out good dividends given low capex requirements and a large cashpile. Impact After accounting for annual audited figures, we tweak our earnings by 1.4%/1.0%/1.0% for FY18-20. Outlook We expect FY18 to be a significantly better year for BAuto with total sales volume growth of 20%. This is underpinned by the new CX-5 launch in 2QFY18, which has received many positive reviews. On the other hand, the persistently high JPY/MYR rate will continue to weigh on BAuto’s input costs, and hence impact earnings negatively. That said, the JPY/MYR rate has trended down in recent months. Going forward, we expect BAuto to continue paying out generous dividends. This is underpinned by 1) subdued capex requirements, 2) large cash pile of circa RM200mn and 3) special dividend arising from the listing of its Philippines division. Page 1 of 2 s www.taonline.com.my Share Information Bloomberg Code BAUTO MK Stock Code 5248 Listing Main Market Share Cap (mn) 1152.2 Market Cap (RMmn) 2465.8 Par Value 0.50 52-wk Hi/Lo (RM) 2.33/1.84 12-mth Avg Daily Vol ('000 shrs) 1459 Estimated Free Float (%) 54.8 Beta 0.8 Major Shareholders (%) Dynamic Mile. - 15.1 EPF - 12.3 PNB - 9.9 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 1.4 1.0 185.0 207.6 182.9 214.9 96 94 Buy (Maintain) Financial Indicators FY18 Net Cash 20.6 10.4 12.5 0.4 5.0 FY19 Net Cash 16.9 12.7 17.5 0.4 4.8 vs TA vs Consensus % of FY 11 11 Within Within Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth BAUTO 10.3 6.5 5.4 (5.3) FBM KLCI 0.9 (0.3) 3.8 5.7 Net Debt / Equity (%) CFPS (sen) Price / CFPS (x) ROA (%) NTA/Share (RM) Price/NTA (x) Scorecard (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg
13. TA Securities 12-Sep-17 A Member of the TA Group Valuation Post-earnings revision , we tweak our TP slightly upwards to RM2.40 based on unchanged 14x CY18 PER. Maintain Buy on BAuto. The group’s handsome dividend yield of 7.5%-9.0% for FY18-20 will cushion any downside risk. Quarterly Results Analysis FYE April Revenue EBIT Net Int Inc EI Associates Pretax Taxation MI Net Profit Core net profit 1QFY18 391.2 32.2 (1.2) 0.0 0.7 31.7 (8.6) (3.0) 20.2 20.2 Core EPS DPS (sen) (sen) EBIT Margin Pretax Margin Net Margin Tax Rate (%) (%) (%) (%) Sales Volume (unit) Earnings Summary FYE April (RM mn) Revenue EBITDA EBITDA margin (%) Pretax Profit Reported Net Profit Core Net Profit Core EPS (sen) Core EPS growth (%) Core PER DPS Dividend Yield (x) (sen) (%) 4QFY17 354.0 27.5 (0.4) 0.0 5.6 32.6 (7.0) (3.4) 22.2 22.2 1.8 1.5 1.9 3.2 8.2 8.1 5.2 27.0 7.8 9.2 6.3 21.4 3,437 3,212 2016 2,095.4 267.8 12.8 278.3 197.6 197.6 17.3 (6.9) 12.4 16.9 7.9 2017 1,660.0 169.7 10.2 175.2 117.6 117.6 10.3 (40.8) 20.9 11.7 5.4 QoQ (%) 10.5 17.3 >100 n.m. (88.3) (2.8) 22.5 (14.2) (9.0) (9.0) 1QFY17 493.6 52.1 1.4 0.0 5.0 58.6 (14.3) (3.1) 41.1 41.1 (9.3) (52.4) 3.6 3.0 YoY (%) (20.7) (38.1) n.m. n.m. >100 (45.8) (40.2) (6.0) (50.8) (50.8) (51.3) (50.0) 10.6 11.9 8.3 24.5 7.0 4,372 2018E 2,119.3 251.3 11.9 275.5 185.0 185.0 16.1 57.3 13.3 16.0 7.5 2019F 2,248.0 283.0 12.6 309.0 207.6 207.6 18.1 12.2 11.8 18.0 8.4 (21.4) 2020F 2,385.5 302.7 12.7 330.3 221.8 221.8 19.2 6.3 11.1 19.2 9.0 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 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. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 2 of 2
14. COMPANY UPDATE TA Securities A Member of the TA Group www .bursamids.com Tuesday, 12 September 2017 Sector: Property MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Ibraco Berhad TP: RM0.94 (+6.8%) Last traded: RM0.88 Expanding Presence in the Klang Valley Hold THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY Thiam Chiann Wen Tel: +603-2167 9615 cwthiam@ta.com.my Buys Land in Petaling Jaya Selatan Ibraco has entered into a sale and purchase agreement with Milan Sanctuary S/B and Jurapat S/B for the acquisition of 4 parcels of leasehold land in Petaling Jaya Selatan, totaling 15,811.66 square metres (sqm) for RM37.4mn (or RM220.55psf). The proposed acquisition is expected to be completed by 3Q18. The Land is Slated for Mixed Commercial Development Located in Bandar Petaling Jaya Selatan and fronting onto Baru Pantai Highway, the land is approved for a mixed commercial development. According to the announcement, the land is granted with Development Order (DO) by Majlis Bandaraya Petaling Jaya dated 11 November 2011 for mixed commercial development. However, the group intends to apply for variation/new DO in due course. As such, the gross development value (GDV) and gross development costs for the proposed development to be undertaken on this land has yet to be determined, as the project development plan is still at a preliminary stage. www.taonline.com.my Stock Return Information KLCI 1,782.74 Expected Share Price Return (%) 6.8 Expected Dividend Return (%) 4.3 Expected Total Return (%) 11.1 Share Information Bloomberg Code IBRA MK Stock Code 5084 Listing Main Market Issued Share (mn) 496.4 Market Cap (RMmn) 436.8 Par Value (RM) 0.5 52-wk Hi/Lo (RM) 1.05/0.76 Estimated Free Float (%) 12.2 Beta (x) 0.5 3-Month Average Volume ('000) Based on the initial plan, the land will be developed into a mixed development, comprising serviced apartments and retail units. We understand that the land comes with an approved plot ratio of 4.0 times. Assuming an efficiency ratio of 75% and average selling price of RM600-700psf, the land could potentially generate a GDV of RM306mn – RM357mn. 55.5 Top 3 Shareholders (%) Chew Chiaw Han 26.3 Sharifah Deborah 20.0 Ng Cheng Chuan 17.5 Share Performance (%) Acquisition Cost deemed Reasonable As far as the acquisition cost is concerned, we note there are no similar land deals for direct comparison. Meanwhile, commercial land in Petaling Jaya Selatan is currently asking for RM250psf, based on iProperty.com. Therefore, we believe the acquisition cost of RM220.55psf is fair. Furthermore, based on our GDV estimation, the land cost to GDV ratio is 11-12%, which we deem reasonable. Net Gearing to Rise to 0.51x Based on the group’s net debt level of RM154mn or net gearing ratio of 0.40x as at Jun-17, this land acquisition would increase Ibraco’s net gearing to approximately 0.51x, assuming the purchase consideration will be satisfied wholly in cash from internally generated funds of 30% and the remaining 70% via bank borrowings. We believe there is no imminent need of fresh cash for this acquisition as management has indicated that it is comfortable with a net gearing level of below 0.6x. Neutral on the Acquisition We consider this as a timely acquisition to replenish the group’s land bank in the Klang Valley. To recap, the group’s first and only project outside its home base in Sarawak, namely, the Continew KL (GDV: RM465mn), has recorded a satisfactory take up rate of 48% since its official launch in Feb-17. Nevertheless, we are neutral on this acquisition as we understand that the project is still in a very preliminary stage and immediate launch is unlikely. Page 1 of 2 Price Change IBRA 1 mth (1.7) FBM KLCI 0.9 3 mth (1.7) (0.3) 12 mth (11.1) 5.7 Financial Info FY17 FY18 Debt to Equity Ratio 40.1 42.2 ROA (%) 3.0 8.6 ROE (%) 4.8 14.5 NTA/Share (RM) 0.7 0.8 Price/NTA (x) 1.4 1.2 (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg
15. TA Securities 12-Sep-17 A Member of the TA Group Forecast No change to our FY17-19 earnings forecasts , pending more details on the development. Valuation We maintain our target price of RM0.94/share, based on unchanged 9x CY18 EPS. Reiterate Hold with a total return of 11.1%. Earnings Summary (RM mn) Profit & Loss (RMm) YE Dec 31 Revenue EBITDA Dep. & amortisation Net finance cost PBT Taxation MI Net profit Core net profit Reported EPS (diluted) Core EPS (diluted) PER GDPS Div Yield 2015 254.0 76.2 (1.3) (4.7) 70.3 (17.8) 6.5 46.0 46.0 9.3 9.3 9.5 3.5 4.0 2016 158.8 46.2 (1.3) (4.5) 40.4 (11.4) (2.0) 27.1 27.1 5.5 5.5 16.1 3.5 4.0 2017f 140.0 28.1 (1.2) (4.7) 22.2 (5.6) (0.5) 16.2 16.2 3.3 3.3 27.0 2.0 2.3 2018f 421.1 79.7 (1.3) (5.0) 73.4 (18.3) (3.1) 51.9 51.9 10.5 10.5 8.4 4.0 4.5 2019f 548.4 103.0 (1.3) (5.6) 96.1 (24.0) (4.1) 68.0 68.0 13.7 13.7 6.4 5.0 5.7 Cash Flow (RMm) YE Dec 31 PBT Adjustments Dep. & amortisation Changes in WC Operational cash flow 2015 70.3 (27.1) 1.3 (100.1) (55.7) 2016 40.4 (21.5) 1.3 (13.4) 6.9 2017f 22.2 (5.6) 1.2 (25.2) (7.3) 2018f 73.4 (18.3) 1.3 (53.7) 2.6 2019f 96.1 (24.0) 1.3 (43.6) 29.8 Capex Others Investment cash flow (0.4) (11.2) (11.6) (0.2) 8.4 8.2 (5.0) 0.0 (5.0) (5.0) 0.0 (5.0) (5.0) 0.0 (5.0) Debt raised/(repaid) Equity raised(repaid) Dividend Others Financial cash flow Net cash flow 54.7 49.9 (17.4) 49.7 87.0 19.8 (15.2) 0.0 (18.4) 0.0 (33.6) (18.5) 15.0 0.0 (9.9) 0.0 5.1 (7.3) 10.0 0.0 (19.9) 0.0 (9.9) (12.2) 20.0 0.0 (24.8) 0.0 (4.8) 20.0 Assumptions YE Dec 31 New Sales Prop Dev Margins (sen) (sen) (x) (sen) (%) (RM mn) (%) 2015 169.3 2016 160.0 2017f 356.0 2018f 440.0 2019f 550.0 20.6 15.9 21.8 21.8 20.8 Balance Sheet (RMm) YE Dec 31 PPE, Land &Inv Prop Others Total Fixed Asset Cash Others CA 2015 253.0 6.0 259.0 53.3 240.3 293.5 2016 195.5 7.9 203.3 27.0 311.8 338.8 2017f 199.3 7.9 207.1 19.7 309.8 329.5 2018f 203.0 7.9 210.8 7.5 452.0 459.5 2019f 206.7 7.9 214.5 27.5 503.9 531.4 Total assets 552.6 542.2 536.6 670.3 745.9 ST debt Other liabilities CL Total Equity LT borrowings LT liabilities Total LT Liabilities 71.7 75.4 147.1 321.8 83.7 0.0 83.7 82.6 69.1 151.6 332.5 58.1 0.0 58.1 72.6 41.8 114.4 339.2 83.1 0.0 83.1 57.6 130.3 187.9 374.4 108.1 0.0 108.1 52.6 138.6 191.2 421.6 133.1 0.0 133.1 Total Equity & Liabilities 552.6 542.2 536.6 670.3 745.9 2015 2016 2017f 2018f 2019f Ratio YE Dec 31 Profitability ratios ROE ROA EBITDA Margins PBT Margins (%) (%) (%) (%) 16.5 9.4 30.0 27.7 8.3 4.9 29.1 25.4 4.8 3.0 20.1 15.9 14.5 8.6 18.9 17.4 17.1 9.6 18.8 17.5 Liquidity ratios Current ratio Quick ratio (x) (x) 2.0 1.6 2.2 2.1 2.9 2.7 2.4 2.4 2.8 2.6 Leverage ratios Total liabilities / equity Net debt / Equity (x) (x) 0.7 0.3 0.6 0.3 0.6 0.4 0.8 0.4 0.8 0.4 Growth ratios Revenue Pretax Profit Core net earnings Total assets (%) (%) (%) (%) 10.9 33.0 45.0 31.3 (37.5) (42.5) (41.1) (1.9) (11.8) (45.0) (40.2) (1.0) 200.7 230.4 220.7 24.9 30.2 31.0 30.9 11.3 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. This report has been prepared by TA SECURITIES HOLDINGS BERHAD for purposes of Mid and Small Cap Research Scheme ("MidS") administered by Bursa Malaysia Berhad and will be compensated to undertake the scheme. TA SECURITIES HOLDINGS BERHAD has produced this report independent of any influence from the MidS or the subject company. For more information about MidS and other research reports, please visit Bursa Malaysia’s website at: www.bursamids.com for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 2 of 2
16. COMPANY UPDATE TA Securities Tuesday , 12 September 2017 FBM KLCI: 1,782.74 Sector: Transportation A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 TP: RM8.10 (-10.0%) Malaysia Airports Holdings Berhad Last Traded: RM9.00 Benefitted from Sea Games SELL THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Tan Kam Meng, CFA Tel: +603-2167 9605 kmtan@ta.com.my Aug-17 supported by foreign tourist arrival MAHB’s August-17 passenger movement grew 9.3% YoY (-0.1% MoM) to 8.3mn (see Figure 1) in Malaysia. The monthly YoY growth has resumed after a slowdown to 5.2% in July, thanks to Sea Games Kuala Lumpur 2017 that contributed to 17.3% YoY (+1.7% MoM) increase in international passenger movement (see Figure 3). Also, management attributed the strong growth to visa relaxation for India and China and favourable exchange rates too. On the other hand, the domestic passenger movement increased by only 1.8% YoY (2.0% MoM) to 3.4mn and we attribute this to high-base effect (see Figure 4). Figure 1: Malaysia’s passenger movement surged 9.4% in Aug-17 www.taonline.com.my 1 Share Information 9 Bloomberg Code 2 Stock Code MAHB MK 5014 Main Market 1659.2 14932.8 1.0 9.45/5.91 3082.0 53.1 1.3 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 (%) Khazanah -36.7 EPF - 10.2 mn 10.0 20.0% 8.0 15.0% Forecast Revision 10.0% 6.0 2.0 -5.0% Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating - -10.0% Financial Indicators 5.0% 4.0 International Domestic Jul-17 Apr-17 Jan-17 Oct-16 Jul-16 Apr-16 Jan-16 Oct-15 Jul-15 Apr-15 Jan-15 0.0% Growth Source: MAHB & TA Research On cumulative basis, the 8M17 cumulative growth was flat at 10.2% versus 10.3% a month ago. This is in line with our full-year growth expectation of 6.7% and management’s guidance of 6.5%. According to announcement, passenger traffic to and from 15 countries recorded more than 10% growth including China, India, Indonesia, Vietnam, South Korea, Philippines, Cambodia and Japan. 25 airlines benefitted and registered double-digit growth including AirAsia X, Malindo, Thai Airways, Silk Air, All Nippon Airways, Oman Air, Xiamen Airlines, and Saudi Arabian Airlines among other. Net Gearing (%) CFPs (sen) P/CFPS (x) ROE (%) NTA/Share (RM) Price/NTA (x) FY17 19.0 170.9 5.3 3.3 (4.8) nm FY18 13.2 55.9 16.1 3.3 (4.3) nm Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth MAHB 5.1 (3.0) 31.4 39.5 FBM KLCI 0.9 (0.3) 3.8 5.7 (12-Mth) Share Price relative to the FBM KLCI ISG’s cumulative growth unchanged at 3.5% for 8M17 Istanbul Sabiha Gokcen (ISG) airport recorded a moderate growth of 3.7% YoY (2% MoM). This was driven mainly by the international segment where passenger movement surged by 10.1% YoY (+8.0% MoM) to 1.1mn which mitigated the slowdown in domestic passenger growth of 0.4% YoY (-2.0% MoM) (see Figure 6 & 7). The strong growth seen in the international segment is positive to MAHB’s earnings mix as the margin for the segment is higher than domestic passenger movement. Page 1 of 4 FY17 FY18 0.0 0.0 287.7 293.7 251.1 386.4 114.6 76.0 Sell (Maintained) Source: Bloomberg
17. TA Securities 12-Sep-17 A Member of the TA Group Figure 2 : ISG’s Aug-17 traffic grew 3.7% to 3.1mn passengers 3500 35% 3000 30% 25% 2500 20% 2000 15% 1500 10% 5% 1000 0% 500 -5% 0 -10% International Domestic Growth Source: MAHB & TA Research Outlook 4Q17 outlook is expected to remain buoyant but the high base effect is expected to reduce the growth rate. This has been seen in Aug-17 figures where the growth in the domestic segment has slowed down to 1.8%. The international segment would likely feel the high base impact in September after the closing of Sea Games in Aug-17. Note that 4Q16 passenger movement grew 11.2% YoY to 23.8mn led by international passengers, which increased 12.6% YoY to 11.6mn. This growth was incentivised by poor ringgit performance in 4Q16 against USD (4.3238), THB (0.1221) and IDR (0.0326 for 100). For 2018, the operating environment is expected to remain rosy supported by additional capacity from AirAsia. The 14th general election in Malaysia is a wild card, which could boost passenger movement higher. Forecast No change to our FY17-19 earnings projections. We maintain our FY17 passenger growth assumption of 6.7% (management forecast: 6.5%) for Malaysian operations and 7.2% (management forecast: 7.2%) for Istanbul operations. Valuation We maintain our DCF valuation at RM8.10/share based on a discount rate of 11.7%. The stock is currently trading at an expensive forward PE of 64x, which we believe it has priced in the positive catalysts including earnings recovery, concession extension, possible sale of minority stake in ISG and special dividend. Maintain Sell on MAHB. Page 2 of 4 FCFE valuation Rf Rm Beta CAPM PV of future FCFE - Perpectual Sukuk Share outstanding (mn share) FCFE/share 3% 9% 1.443 11.7% 14440.1 1000.0 1659.19 8.10
18. TA Securities 12-Sep-17 A Member of the TA Group Figure 3 : Sea Games boosted Malaysia’s Int. traffic up 17.3% in Aug-17 mn 4.5 Pass. Movement (LHS) YoY Growth (RHS) 25.0% 20.0% 4.0 Figure 4: Malaysia’s Dom.traffic grew only 1.8% due to high-base effect mn 5.0 Pass. Movement (LHS) YoY growth (RHS) 40.0% 30.0% 4.5 15.0% 3.5 10.0% 4.0 5.0% 3.5 0.0% 3.0 -5.0% 2.5 -10.0% 20.0% 10.0% 0.0% 3.0 -10.0% 2.5 -20.0% Source: MAHB & TA Research 30% 1500 20% 1000 10% 500 0% Source: MAHB & TA Research Page 3 of 4 Jul-17 -10% Apr-17 0 Jan-15 0 40% 2000 Jan-17 200 YoY growth (RHS) Oct-16 400 Pass. Movement (LHS) Jul-16 600 '000 2500 Apr-16 800 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Jan-16 1000 YoY growth (RHS) Oct-15 Pass. Movement (LHS) Figure 6: ISG’s Dom. segment surged 0.4% in Aug-17 Jul-15 '000 1200 Apr-15 Figure 5: ISG’s Int. segment surged 10.1% in Aug-17
19. TA Securities 12-Sep-17 A Member of the TA Group Income Statement (RM'mn) FYE 31 Dec 2015 2016 2017F 2018F 2019F Revenue 3870.2 4172.8 4369.6 4611.8 4924.4 EBITDA 1656.6 1709.9 1905.6 1915.9 1952.8 Dep. & Amort. (901.7) (852.5) (885.5) (924.6) (969.5) EBIT 754.9 857.4 1020.1 991.3 983.3 Net Financing Cost (741.9) (689.8) (669.6) (669.6) (658.0) Associate & JV 10.4 15.7 18.4 20.2 22.2 EI 22.5 (28.6) 0.0 0.0 0.0 PBT 23.5 211.9 368.9 341.9 347.6 Tax (5.8) (110.2) (81.1) (48.2) (49.0) PAT 40.9 70.4 287.7 293.7 298.6 Core Net Profit 18.5 99.0 287.7 293.7 298.6 Balance Sheet (RM'mn) FYE 31 Dec PPE Intangibles Others Non-current Assets 2015 364.1 17,842.4 1,208.8 19,415.3 2016 381.7 17,231.0 1,086.1 18,698.8 2017F 2018F 2019F 389.7 396.8 403.2 16,759.3 16,249.7 15,696.1 1,101.0 1,117.5 1,135.8 18,250.0 17,763.9 17,235.1 Inventories Trade Recb. Others Cash Current Assets 117.6 1,140.9 31.7 1,286.7 2,577.0 135.2 871.6 11.1 1,571.9 2,589.8 179.6 957.7 11.1 3,899.7 5,048.1 189.5 985.5 11.1 4,396.8 5,583.0 202.4 1,065.8 11.1 4,580.8 5,860.2 Core EPS (sen) EPS growth (%) PE (x) GDPS (sen) Dividend yield (%) (0.6) (106.6) (1546.5) 8.5 0.9 1.3 (327.1) 680.9 10.0 1.1 13.8 943.4 65.3 10.0 1.1 14.1 2.0 64.0 10.0 1.1 14.3 1.4 63.1 12.0 1.3 Total Assets 21,992.3 21,288.6 23,298.1 23,347.0 23,095.2 Cash Flow (RM'mn) FYE 31 Dec PBT Dep. & Amort. Changes in WC Others CFO 2015 2016 45.9 183.3 902.3 852.5 (1576.7) 200.2 1306.4 534.8 677.9 1770.9 2017F 368.9 885.5 2080.6 237.7 3572.7 2018F 341.9 924.6 128.1 348.3 1743.0 2019F 347.6 969.5 121.0 208.7 1646.7 Share Capital Share Premium Others Retained Earnings MI Total Equity 1,659.2 3,455.1 1,277.5 2,449.5 (0.8) 8,840.6 1,659.2 3,455.1 1,259.3 2,321.2 2.0 8,696.9 1,669.2 3,455.1 1,259.3 2,442.0 2.0 8,827.7 1,679.2 3,455.1 1,259.3 2,567.8 2.0 8,963.5 1,689.2 3,455.1 1,259.3 2,663.6 2.0 9,069.3 Borrowings Other Non-current Liabilities 5,500.0 5,427.7 10,927.7 5,386.1 5,439.8 10,825.9 5,386.1 5,439.8 10,825.9 5,386.1 5,439.8 10,825.9 4,386.1 5,439.8 9,825.9 Capex Others CFI (50.0) (1166.2) (1216.2) (430.5) 136.6 (293.9) (418.4) 0.0 (418.4) (418.4) 0.0 (418.4) (418.4) 0.0 (418.4) Borrowings T. Payables and other Current Liabilites 398.3 1,825.7 2,224.0 193.6 1,572.1 1,765.8 193.6 3,450.9 3,644.5 193.6 3,363.9 3,557.6 1,000.0 3,200.0 4,200.0 Total Liabilities 13,151.7 12,591.7 14,470.4 14,383.5 14,025.9 Dividend Equity raised Net Borrowing Others CFF (116.8) (141.0) 1306.0 0.0 (426.7) 0.0 (1077.8) (1074.3) (315.3) (1215.3) (166.9) 10.0 0.0 (669.6) (826.5) (167.9) (202.7) 10.0 10.0 0.0 (193.6) (669.6) (658.0) (827.5) (1044.3) NTA/share (RM) P/NTA (x) EV/EBITDAR (x) (5.4) nm 11.8 (5.1) nm 11.1 (4.8) nm 8.8 (4.3) nm 8.5 (3.9) nm 8.2 Change in Cash FCFE FCF/share (RM) (853.6) (1360.8) (0.8) 261.7 354.2 0.2 2327.9 2835.5 1.7 Key Assumptions FYE 31 Dec 2015 Total Passenger Growth (mn) 83.8 Aircraft move't ('000) 815.3 Eraman Sales/ pax (RM) 11.7 Total rental- KLIA & KLIA 2 226.9 2016 88.8 811.6 12.4 239.5 2017F 94.8 879.7 13.2 255.3 497.1 928.1 0.6 184.0 777.0 0.5 2018F 99.1 906.1 14.0 272.1 2019F 104.1 933.3 14.4 284.3 Ratios FYE 31 Dec Profitability EBITDA margin (%) Core profit margin (%) ROE (%) ROA (%) 2015 2016 2017F 2018F 2019F 42.8 0.5 0.2 0.1 41.0 2.4 1.1 0.5 43.6 6.6 3.3 1.3 41.5 6.4 3.3 1.3 39.7 6.1 3.3 1.3 Liquidity Current Ratio (x) Quick Ratio (x) 1.2 1.1 1.5 1.4 1.4 1.3 1.6 1.5 1.4 1.3 Leverage Net gearing (x) Interest Coverage (x) Interest Coverage (x) 0.5 2.2 2.2 0.5 2.5 2.5 0.2 2.8 2.6 0.1 2.9 2.6 0.1 3.0 2.6 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 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. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 4 of 4
20. TA Securities ECONOMIC REPORT Tuesday , September 12, 2017 A Member of the TA Group FBMKLCI: 1,782.74 MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Malaysian Economy Surprise July IPI Result THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TA Research Team Coverage • shazma@ta.com.my farid@ta.com.my Tel: +603-2167 9609 www.taonline.com.my Highest IPI growth since November 2016 Malaysia Industrial Production Index (IPI) improved in July 2017 owing to pick-up in the manufacturing and electricity output. The overall index came in at 133.5 in July 2017, the highest level last seen since November 2016. Total output registered a substantial yearly growth of 6.1% in July 2017, which was above June’s 4.0% YoY as well as consensus estimate of 5.1% YoY. On a monthly seasonally adjusted basis, overall output also increased by 1.3% from June 2017, due to better growth performance of manufacturing and electricity output, which increased 1.4% MoM and 5.5% MoM, respectively. Figure 1: Summary of IPI (February 2017 – July 2017) (2010=100) 2016 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 7M17 IPI Mining Electricity Manufacturing Manufacturing Sales Value 3.8% 1.6% 8.5% 4.3% 1.3% 4.7% 0.4% 1.5% 6.5% 15.7% 6.1% 0.2% 7.9% 8.0% 22.2% 4.5% 0.3% 1.9% 6.2% 15.4% 4.6% 2.0% -0.2% 5.9% 13.6% 4.2% -2.0% -1.5% 6.7% 15.6% 4.6% -2.3% 2.5% 7.3% 19.5% 4.0% 2.4% 2.1% 4.7% 11.5% Sources: Department of Statistics, TA Securities • Manufacturing posted the highest pace of growth in 3 years For the past few months, manufacturing output (65.9% of total IPI) growth has remained steady, registering consistently above last year average growth of 4.3% YoY, following the improvement from both external (mainly E&E) and domestic demand. In July 2017, manufacturing sector recorded a growth of 8.0% YoY, the highest growth since June 2014. In seasonally adjusted terms, it grew by 1.4% MoM. - Output of export-oriented industries (47.4% of total IPI) rose by 6.6% YoY (June 2017: +5.4% YoY) boosted by higher growth E&E output of 10.5% YoY. Details showed that the sub-components of manufacture of computer, electronics & optical products rose by 10.9% YoY (June 2017: +8.7% YoY); manufacture of electrical equipment increased by 9.8% YoY (June 2017: +7.3% YoY); and manufacture of machinery & equipment registered an increase of 7.8% YoY (June 2017: +5.2% YoY). The gain in the manufacturing sector was also due to higher output of resource based products. For instance, production of wood and petroleum products remained strong and recorded a same growth of 3.9% YoY. - Production of domestic-oriented industries also gained higher during the month, benefited from higher output of food, beverages & tobacco products with a double digit growth of 19.2% YoY (June 2017: +6.7% YoY). We believe this was due to the higher demand as a result of festive season during the month. Additionally, production of nonmetallic mineral products, basic metal & fabricated metal products rose by 7.6% YoY while transport equipment & other manufactures rebounded to 6.8% YoY in July 2017 from 1.0% YoY contraction in June 2017, underpinned by higher output of manufacture of motor vehicles, trailers & semi-trailers (July 2017: +5.9% YoY; June 2017: -6.6% YoY). As a result, output growth of domestic-oriented industries (18.5% of total IPI) quadrupled to 11.2% YoY in July 2017 as compared to 2.6% YoY in the prior month. Page 1 of 3