Bursa Malaysia Daily Market Report - 13 February

Transcription

1. Tuesday , 13 February, 2018 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only N ew s 1. D ai l y M arke t C om men t a ry 2. D ai l y B ri ef Fu nd a me n tal Rep o r ts 1. 2. 3. 4. K e j u r u t e r a a n A s a s t e ra Be rh a d : C lo s in g F Y 1 7 o n a H i g h N o te K u a la L u m p u r K e p o n g Be r h a d : A g g re s s iv e R e p l a n tin g T a k in g P la c e M a la ys i a A i rp o rt s H o l d i n g s Be rh a d : A S lo w S ta rt to Pa s se n g e r M o v e m e n t f o r 2 0 1 8 P la n t a t io n S e c t o r : Sto c k p i le s F a l l Te ch n ic al R ep o rt s 1. D ai l y Te ch n ic a l St o ck Pi cks ( L oc al ) 2. D ai l y St o ck S cr een 3. D ai l y For ei gn T ech n i c al St o ck P i cks ( A 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
2. Daily Market Commentary Tuesday , 13 February 2018 TA Research, e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (12.02.2018) Volume Main Market 1,199.0 -376.8 Warrants 310.9 -200.3 ACE Market 287.9 -71.7 Bond 5.0 -0.3 ETF 1.1 1.0 LEAP 0.0 0.0 Total 1,804.0 Off Market 67.0 -11.1 2,150.0 64.1 50.8 1.3 1.3 0.0 2,267.6 5.6 Value -357.0 -42.0 -7.5 -0.4 1.1 0.0 -191.6 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 % YTD chg 10.35 41.54 0.40 11.50 0.57 0.32 0.00 0.63 1.86 0.57 -5.45 2.30 24,601.27 6,981.96 7,177.06 21,382.62 2,385.38 29,459.63 3,384.98 1,799.45 6,523.45 3,154.13 1,723.73 5,820.70 410.37 107.47 84.63 0.00 21.61 -47.79 7.74 13.00 17.93 24.27 44.47 -17.28 1.70 1.56 1.19 0.00 0.91 -0.16 0.23 0.73 0.28 0.78 2.65 -0.30 -0.48 1.14 -6.64 -6.07 -3.33 -1.54 -0.53 2.61 2.64 -4.63 -9.25 -4.03 (mn) 65.0 @ 1.5 @ 281 155 44 2 1 1 484 % chg 1,830.17 13,016.60 16,121.14 1,826.00 (RM) 0.07 0.63 Counter MAYBANK TENAGA PBBANK CIMB AXIATA IHH MAXIS SIMEPLT DIGI HLBANK Mkt Cap. Chg (RM’mn) (RM) 108,884 89,296 84,721 63,656 50,489 49,438 46,395 37,881 37,631 36,739 0.04 0.04 0.14 0.04 0.16 0.06 0.06 0.07 0.04 0.06 Blue chips rose on Monday, helped by utility, banks and oil & gas heavyweights and regional gains as US stock index futures recovered further in Asian trade. The KLCI ended up 10.35 points at 1,830.17, off an early low of 1,824.89 and high of 1,834.45, but losers edged gainers 484 to 453 on slow turnover of 1.8bn shares worth RM2.26bn. Given the cautious buying momentum at current levels, profit-taking resistance should likely increase towards 1,840, mirroring the 9 Jan high, with the 2 Feb peak of 1,880 acting as a formidable hurdle. Continue to watch 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. Gadang shares appear to be building double-bottom support above the 23.6%FR (RM1.00) pending recovery towards the 50%FR (RM1.13), with a confirmed breakout to aim for the 61.8%FR (RM1.18) ahead. Any price weakness on Kimlun shares towards the 50%FR (RM2.06) support will be attractive to bargain for recovery towards the 76.4%FR (RM2.25), while tougher hurdles are from the upper Bollinger band (RM2.34) and 13/11/ 17 high (RM2.43). News Bites Top 10 KLCI Movers Based on Mkt Cap. Off Market XINGHE VERSATL Review & Outlook Value/ 1.79 290 0.21 105 0.18 53 0.26 2 1.19 3 0.46 0 1.26 453 0.08 Vol. (mn) 9.64 10.57 9.33 18.89 6.19 4.73 4.15 3.33 4.89 0.45 Important Dates MASTEEL - 1:3 Bonus Issue - BI of up to 106.8m shares. 1 bonus share for every 3 existing shares held. Entitlement Date: 14/02/2018. LISTING ON: 15/02/2018. • Malaysia Palm Oil Board's Jan 2018 palm oil data showed FFB production fell 13.5 %MoM to 1.59mn tonnes and stockpiles fell sharply by 6.7% to 2.55mn tonnes, which were below street's expectations of 2.73 - 2.75mn tonnes. • Kuala Lumpur Kepong Berhad's 1QFY18 core net profit declined 23.3% YoY to RM295.2mn. It was within expectations. • Malaysia Airports Holdings Berhad's Jan-18 operating data shows passenger growth slowed to 1.5% to 8.1mn passengers, caused by a 6.4% YoY decline in domestic traffic. • Ajinomoto (M) Bhd has proposed to acquire a 188.6 ha plot of land at the Techpark@Enstek, Bandar Baru Enstek, Negeri Sembilan, from Lembaga Tabung Haji and THP Enstek Development Sdn Bhd for RM86.1mn. • George Kent (Malaysia) Bhd which had initially said it would work with Siemens to bid for the Kuala Lumpur High Speed Rail project, today announced three more players in its consortium, namely Alstom, Ferrovie dello Stato Italiane and PORR for the AssetsCo tender. • Two years after announcing the proposal, Ranhill Holdings Bhd has received a conditional letter of award from the Energy Commission to build a 300-megawatt combined cycle gas turbine power plant in Sandakan, Sabah. • MBM Resources Bhd plans to raise its shareholding in wheels producer Oriental Metal Industries Sdn Bhd to 100% by buying up the remaining 22% stake for RM1.7mn. • The long-drawn legal battle between Parkson Holdings Bhd's 55%owned unit Parkson Retail Group Ltd and Chinese parties involving the shareholding of department store Anshan Parkson, has come to a close with a settlement agreement. • The White House on Monday proposed taking an additional decade to balance the US budget as it delivered a spending plan that relies on aggressive growth predictions. Exchange Rate USD/MYR 3.9454 -0.013 USD/JPY 108.65 -0.490 EUR/USD 1.229 0.0033 Commodities Futures Palm Oil (RM/mt) 2,541.00 25.00 Crude Oil ($/Barrel) 59.38 0.33 Gold ($/tr.oz.) 1,325.10 7.00 LBS - 1:10 Bonus Issue - BI of up to 162.9m shares. 1 bonus share for every 10 subdivided shares held. Ex-Date: 22/02/2018. Entitlement Date: 26/02/2018. LISTING ON: 27/02/2018. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan, Head of Research MENARA TA ONE, 22 JALAN for TA SECURITIES HOLDINGS BERHAD (14948-M) A PARTICIPATING ORGANISATION OF BURSA MALAYSIA SECURITIES BHD P RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL : 603 - 2072 1277. FAX : 603 - 2032 5048 www.ta.com.my
3. Tuesday , February 13, 2018 FBMKLCI: 1,830.17 xx THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Brief Market View, News in Brief: Corporate, Economy, and Share Buybacks Chartist: Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my M a r k e t V i e w Limited Upside on Cautious Momentum Blue chips rose on Monday, helped by utility, banks and oil & gas heavyweights and regional gains as US stock index futures recovered further in Asian trade. The KLCI ended up 10.35 points at 1,830.17, off an early low of 1,824.89 and high of 1,834.45, but losers edged gainers 484 to 453 on slow turnover of 1.8bn shares worth RM2.26bn. Resistance at 1,840, Crucial Support at 1,796 Given the cautious buying momentum at current levels, profit-taking resistance should likely increase towards 1,840, mirroring the 9 Jan high, with the 2 Feb peak of 1,880 acting as a formidable hurdle. Continue to watch 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. Buy Dips on Gadang & Kimlun Gadang shares appear to be building double-bottom support above the 23.6%FR (RM1.00) pending recovery towards the 50%FR (RM1.13), with a confirmed breakout to aim for the 61.8%FR (RM1.18) ahead. Any price weakness on Kimlun shares towards the 50%FR (RM2.06) support will be attractive to bargain for recovery towards the 76.4%FR (RM2.25), while tougher hurdles are from the upper Bollinger band (RM2.34) and 13/11/17 high (RM2.43). S&P Futures Lift Most Asian Markets Higher Most Asian share markets found a semblance of calm on Monday as S&P futures extended their bounce in Asian trading, though bond investors were still fretting about the risks from looming U.S. inflation data. U.S. index futures implied a positive Monday open for stocks stateside after last week's volatile trade. The moves came after U.S. indexes rebounded on Friday, although the Dow still had its worst week in two years. Both the Dow and S&P 500 declined 5.2 percent on the week on investor concerns over rising interest rates. Particularly challenging will be U.S. consumer price data on Wednesday given it was fears of faster inflation, and thus more aggressive rate rises, that triggered the global rout in the first place. Trading volumes are expected to be lower in many Asian stock markets this week due to the coming Lunar New Year holiday. China stocks rebounded on Monday, led by small-caps, as some investors hunted for bargains after last week’s ferocious sell-off. The Shanghai Composite index was up 23.71 points or 0.76 percent at 3,153.56. South Korea's Kospi also advanced 0.91 percent, helped by a rise in heavily weighted technology stocks. Samsung Electronics rebounded 2.64 percent and SK Hynix gained 0.41 percent. Over in Australia, the S&P/ASX 200 slipped 0.30 percent as earnings season continued Down Under. Australian retailers were in the red, with Myer underperforming its peers in the sector and trading down 7.26 percent. Japanese markets is closed for a holiday. Page 1 of 7
4. 13-Feb-18 Wall Street Rebound After Turbulent Weeks Wall Street ’s three major indexes rebounded on Monday as investors waded back into the market, hunting for bargains amid signs of stability after one of the worst weeks for equity benchmarks in two years. Gains were broad, with increases seen in oil companies, regional banks and utilities firms. The trading session lacked the volatility that characterized last week’s stumble. Investors also digested the newly released plan by the Trump administration to revamp the nation’s infrastructure against the backdrop of mounting worries about accelerating inflation. The Trump administration unfurled a plan to spend USD200 billion over 10 years on grants to states and cities to improve highways, airports, bridges and tunnels and other infrastructure. Still, some investors and analysts warned that the market’s attempt to rebound could be tested as early as Wednesday, when the Bureau of Labor Statistics is expected to release fresh data on consumer prices. Concerns that a faster-than-expected pickup in inflation could push the Federal Reserve to pick up its pace of interest-rate increases have pushed government bond yields higher throughout the year, with the yield on the benchmark 10-year U.S. Treasury note settling Monday at its highest level since January 2014. The S&P materials sector was the biggest percentage gainer with a 2.1 percent rise followed by a 1.8 percent gain in information technology. The Dow Jones Industrial Average rose 410.37 points, or 1.70 percent, to 24,601.27, the S&P 500 gained 36.45 points, or 1.39 percent, to 2,656.00 and the Nasdaq Composite added 107.47 points, or 1.56 percent, to 6,981.96. 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 Tuesday, February 13, 2018, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 7
5. 13-Feb-18 N e w s i n B r i e f Corporate Ajinomoto (M) Bhd has proposed to acquire a 188.6 ha plot of land at the Techpark@Enstek, Bandar Baru Enstek, Negeri Sembilan, from Lembaga Tabung Haji and THP Enstek Development Sdn Bhd for RM86.1mn. In filing to Bursa Malaysia, Ajinomoto said the acquisition was in line with its long-term plans of growing its operations and expanding manufacturing facilities to keep up with growing demand for its products. (Bernama / Bursa Malaysia) George Kent (Malaysia) Bhd which had initially said it would work with Siemens to bid for the Kuala Lumpur High Speed Rail project, today announced three more players in its consortium, namely Alstom, Ferrovie dello Stato Italiane and PORR for the AssetsCo tender. The companies will work to prepare a joint offer encompassing engineering, procurement and construction and operations & maintenance. This partnership shall result in a powerful team combining European technology and project experience with the best local expertise. (The Sun Daily) Two years after announcing the proposal, Ranhill Holdings Bhd has received a conditional letter of award (CLOA) from the Energy Commission to build a 300-megawatt combined cycle gas turbine power plant in Sandakan, Sabah. The CLOA was issued to the consortium including SM Hydro Energy Sdn Bhd, which is a wholly-owned subsidiary of Ranhill Capital Sdn Bhd, which in turn is wholly-owned by Ranhill. Ranhill said SM Hydro Energy is currently evaluating the terms and conditions of the CLOA and Ranhill will make the necessary announcement to Bursa as and when the decision to accept the award is made by SM Hydro Energy. (The Edge Markets / Bursa Malaysia) Car distributor MBM Resources Bhd plans to raise its shareholding in wheels producer Oriental Metal Industries Sdn Bhd (OMI) to 100% by buying up the remaining 22% stake for RM1.7mn. This would facilitate the decision-making process, and open up opportunities and flexibility by OMI in choosing and initiating new working relationships with other parties. (The Edge Markets / Bursa Malaysia) Comments: We are rather neutral on the acquisition as OMI's crown jewel, i.e. the alloy wheel plant is still loss making at this juncture. However, the alloy wheel plant is expected to breakeven this year as a result of the Perodua Myvi launch. Going forward, MBM will be the sole shareholder of OMI. We place MBM Under Review pending quarterly results release and briefing which will be held later this month. The number of passengers passing through the 39 airports Malaysia Airports Holdings Bhd (MAHB) manages in the country rose by 1.5% YoY to 8.1mn in January 2018 — a new record for the month. MAHB said international traffic rose 9% YoY to 4.4mn passengers, while domestic traffic fell 6.4% YoY to 3.6mn passengers. The Kuala Lumpur International Airport in Sepang handled 5.1mn passengers in January 2018, 4.8% higher YoY. Systemwide including its Istanbul operations in Turkey, MAHB handled 10.8mn passengers, an increase of 6.5% YoY, in January 2018. Istanbul Sabiha Gokcen International Airport's passenger traffic grew 25.3% YoY in January 2018 as it saw international and domestic traffic increase YoY by 21.7% and 27% respectively. (The Edge Markets) The long-drawn legal battle between Parkson Holdings Bhd’s 55%-owned unit Parkson Retail Group Ltd and Chinese parties involving the shareholding of department store Anshan Parkson, has come to a close with a settlement agreement. The agreement involves proposed disposal by Serbadagang Holdings Sdn Bhd of entire 60% equity interest in Dalian Tianhe Parkson to Dashang Group Co Ltd at disposal consideration of one yuan. (Financial Daily / Bursa Malaysia) Page 3 of 7
6. 13-Feb-18 Thong Guan Industries Bhd executive director Ang See Ming has joined the board of directors of D ’nonce Technology Bhd as its independent and non-executive director effective immediately. In a filing with Bursa Malaysia, D’nonce said Ang, 48, also sits on the board of a few private limited companies involved in property development, commodity trading, investment holding and solar power generation. He is currently a central committee member of the Malaysian Plastics Manufacturers Association and the chairman of MPMA, Northern Branch. (Financial Daily / Bursa Malaysia) CSC Steel Holdings Bhd’s net profit more than doubled to RM14.8mn in the fourth quarter ended Dec 31, 2017 (4QFY17) from RM6.2mn a year ago, as it enjoyed higher sale margins for all its steel products. Quarterly revenue grew 28% YoY to RM367.2mn, due to the significant rise in the selling price of its steel products, and a marginal increase in sales volume. The group proposed to pay a final dividend of five sen per share for FY17. For the full FY17, the group’s net profit fell 13% YoY to RM59.8mn despite revenue growing 28% YoY to RM1.3bn. (The Edge Markets / Bursa Malaysia) Hektar Real Investment Trust's (Hektar REIT) net property income rose 12% YoY to RM20.9mn in the fourth quarter ended Dec 31, 2017 (4QFY17), largely due to the REIT having acquired the 1Segamat Shopping Centre in September last year. Revenue for 4QFY17 grew 7% YoY to RM33.4mn. Net income for the quarter was almost flat at RM12.1mn. It declared a final income distribution of 3.3 sen per unit, to be paid on March 15, up 22% YoY. For the full FY17, however, Hektar REIT's NPI retreated a marginal 1% YoY to RM73.7mn. Revenue, however, rose about 1% YoY to RM125.5mn. Net income for FY17 declined 24% YoY to RM32.7mn. (The Edge Markets / Bursa Malaysia) Kuala Lumpur Kepong Bhd’s net profit fell 11% YoY to RM320.6mn its first financial quarter ended Dec 31, 2017 (1QFY18), as both its plantation and property segments registered weaker earnings. Its quarterly revenue declined 6% YoY to RM5.2bn. (The Edge Markets / Bursa Malaysia) Batu Kawan Bhd's first quarter net profit fell 9.9% YoY to RM177.9mn, on lower contribution from the plantation and property development segments. Quarterly revenue slipped 5.1% YoY to RM5.3bn. (The Edge Markets / Bursa Malaysia) Higher retail sales helped Tomei Consolidated Bhd deliver a net profit of RM4.4mn for the fourth quarter ended Dec 31, 2017 (4QFY17), up 18 folds from RM226,000 a year ago. Quarterly revenue rose 17.5% YoY to RM150.1mn “mainly due to year-end festivities”. For the full FY17, Tomei’s net profit rose to RM16.2mn from RM4.7mn in FY16, largely attributed to higher revenue. Full-year revenue rose 36% YoY to RM617.0mn due mainly to increase in demand, said Tomei. The jeweller has recommended a one sen dividend per share. It paid no dividend for FY16. (The Edge Markets / Bursa Malaysia) Hexza Corp Bhd’s net profit shrank 84.0% YoY to RM1.5mn for the second quarter ended Dec 31, 2017 (2QFY18), dragged by its resins and investment segments. Quarterly revenue slipped 2.3% YoY to RM26.2mn. Hexza attributed the lower contribution from the resins segment to the lower sales volume and margin compression, as the rise in average raw material costs outpaced the increase in average selling price for resin products. For the 6MFY18, Hexza posted a net loss of RM23.8mn compared to a net profit of RM24.3mn in 6MFY17. While its revenue slipped 16.2% YoY to RM51.3mn. (The Edge Markets / Bursa Malaysia) Page 4 of 7
7. 13-Feb-18 N e w s I n B r i e f Economy Asia Malaysia Palm Oil Stocks Fall 5 .72% in January Malaysia's total palm oil stocks in January 2018 fell 6.75% to 2.55 million tonnes from 2.73 million tonnes recorded in December last year, said the Malaysian Palm Oil Board (MPOB). In a statement, MPOB said crude palm oil (CPO) stocks decreased 5.72% to 1.57 million tonnes during the month under review from 1.67 tonnes registered a month earlier. Stocks of processed palm oil reduced 8.37% to 973,965 tonnes from 1.06 million previously. On production, MPOB said, CPO output declined 13.49% to 1.59 million tonnes in January from 1.83 million tonnes recorded in December 2017. Palm kernel output was 10.03% lower at 418,422 tonnes in January versus December's production of 465,062 tonnes, it said. It added that exports rose 6.01% to 1.51 million tonnes in January from 1.43 million tonnes recorded in December. Exports of oleochemicals declined 3.52% to 255,21 tonnes, during the month under review, from 264,532 tonnes recorded in December. Palm kernel oil exports contracted 40.03% to 72,296 tonnes in January from 120,563 tonnes recorded in the previous month and that of palm kernel cake eased 1.72% to 217,817 tonnes from 221,622 tonnes, previously, it added. (The Star) BNM Governor: Using Disguise of Being Tied by Regulations Not Valid Excuse Financial institutions which view that regulation makes market players “boring” have become too complacent in their comfort zone and should undertake a reality check, says Bank Negara Malaysia (BNM) Governor Tan Sri Muhammad Ibrahim. He said financial institutions must be aware of innovations that would be relentless in accessing and penetrating the traditional market long enjoyed by the banks. Muhammad said Malaysia’s financial institutions especially must not lay idle as innovations will be relentless in accessing and penetrating the traditional market long enjoyed by the banks. “Using the disguise of being tied by regulations is not a valid excuse,” he said in his keynote address “Public policy perspective – Some thoughts and contemplations from a central banker,” at the 40th Harvard Business School Alumni Club Malaysia anniversary dinner. (The Star) Services Producer Price Index Records 0.4% Increase in Q4 The Services Producer Price Index (SPPI) compiled by the Department of Statistics Malaysia shows that prices charged by the local services industry increased an average of 0.4% over the last quarter of 2017. In a press statement, the department said the subsectors that contributed positively to the growth were Arts, Entertainment and Recreation (1%), Accommodation and Food & Beverage Service Activities (0.8%), Transportation (0.3%), Professional (0.3%), and the combined subsectors of Real Estate Activities and Health (0.1%). On a year-on-year basis, the SPPI recorded an increase of 1.6% with positive growth in Accommodation and Food & Beverage Service Activities (4.2%); Education (2.3%); Health (2.1%); Real Estate Activities (1.6%); Arts, Entertainment and Recreation (0.9%), Professional (0.6%); Transportation (0.4%) and Information & Communication (0.1%). (The Star) ‘Flat and Stable’ Property Market Expected for 2018 The Malaysian property market is expected to be “flat and stable” this year, as consumers continue to adopt a “wait and see approach” in light of the challenging environment, said property consultancy Rahim & Co. “Looking forward, 2018 will be yet another challenging year for our property market, but many are hoping that the results of the forthcoming general elections will give a firmer direction for the nation - hence reigniting the momentum in the property sector,” it said in a statement. “Although it may be too soon to say that the market has bottomed out, we do not expect the market in 2018 to be much worse off than in 2017.” Rahim & Co, which launched its Property Market Review 2017 / 2018, added that the residential sector is expected to see more projects within the “affordable housing” range, defined by prices of up to RM500,000 in the Klang Valley and lower in other less urbanised states. In the office sector, Rahim & Co said oversupply concerns continue to lurk as Klang Valley’s supply reached 131 million sqft. In the retail market, a similar picture is seen against Page 5 of 7
8. 13-Feb-18 the backdrop of passive consumer spending . The industrial sector meanwhile is expected to see a rise in demand as the proliferation of e-commerce is anticipated to place properties within this segment under the radar of many logistics and warehousing players. (The Star) Singapore Retail Sales Up 4.6% in December Surging car sales as well as a brisk trade in mobile devices helped the retail sector end 2017 on a robust note. Total retail takings grew 4.6% in December compared with the same month a year earlier, according to latest data by the Singapore Department of Statistics. This came as motor vehicle sales soared 26% year on year, while sales of computer and telecommunications equipment went up 15.2%. Excluding motor vehicles, retail sales inched up just 0.6% year on year. Other segments fared less well. Sales of watches and jewellery declined 8.2% in December over a year earlier, while takings at minimarts and convenience stores slid 2.7%. The data also showed that takings in food and beverage services rose 3.1% year on year in December, with sales rising at restaurants, fast food outlets and other eating places such as cafes. (The Business Times) Singapore May Impose E-commerce Tax Singapore may unveil an e-commerce tax in next week’s budget, setting the tone for a region that’s grappling with online retail’s assault on brick-and-mortar vendors. Eight of the 12 economists in a Bloomberg survey said the Feb. 19 budget will contain a new tax on online vendors, with another betting that cross-border digital transactions will now be included in the goods-and-services tax regime. Thailand, Indonesia, and Malaysia -- where governments are funding ambitious infrastructure programs -- are also considering similar plans. Southeast Asian governments are seeking to level the playing field for traditional vendors given the rapid growth of online retailing on platforms such as Lazada, controlled by Alibaba Group Holding Ltd., and Amazon.com Inc. (The Star) United States Trump seeks 10 More Years to Balance US Budget The White House on Monday proposed taking an additional decade to balance the US budget as it delivered a spending plan that relies on aggressive growth predictions to close a yawning budget gap, drawing increased scrutiny from financial markets. The new $4.4tn proposal for next year, which includes a plan for $200bn in new infrastructure spending over the next decade, came just days after Donald Trump signed off on a two-year spending bill that includes large increases in defence and domestic programmes which are included in the new budget proposal. Mr. Trump’s push for freer spending is aspirational as Congress rather than the president ultimately controls the US purse strings. But it coincides with growing anxiety in financial markets over the prospect of rising interest rates and the wisdom of injecting fiscal stimulus into an economy at or near full employment. The benchmark 10-year Treasury bond on Monday traded at four-year lows, reflecting investor nervousness that the Federal Reserve may need to put a brake on an over-heating economy. Although Republicans control both houses of Congress, the Trump administration has sought to blame Democrats for the $1.2tn budget deficit next year that will result from last week’s two-year deal. But in the spending plan for fiscal 2019, the White House abandoned a pledge, included in its first budget last year, to close the deficit within a decade. Instead, it said its new plan would see the budget in deficit until fiscal 2039. (Financial Times) The U.S. Budget Gap Widens The U.S. budget deficit widened in the first four months of the fiscal year as growth in spending exceeded revenue. The U.S. fiscal gap increased by 11% to $175.7 billion between October and January from the same period a year earlier, the Treasury Department said in a report. Outlays rose by 5% to $1.3 trillion, while receipts increased by 4% to $1.1 trillion. The budget deficit widened the last fiscal year to the largest since 2013. The gap is expected to keep increasing as an aging population boosts spending on healthcare and retirement programs and from tax cuts enacted this year that are expected to cut revenue by up to $1.5 trillion over the next decade. The U.S. posted a surplus of $49.2 billion in January, about $2 billion less than the surplus a year earlier, according to the Treasury statement. Surpluses in Page 6 of 7
9. 13-Feb-18 January are boosted by shifts in certain payments normally made on the first day of the month , but are moved because of the New Year’s holiday, the Congressional Budget Office said in a report on Feb. 7. While the Internal Revenue Service released guidelines for 2018 withholding taxes to reflect the new tax cuts on Jan. 11, employers are only required to begin using them on Feb. 15, according to the CBO. (Bloomberg) Share Buy-Back: 12 February 2018 Company FI TTERS GRANFLO KPJ LIENHOE MALAKOF NYLEX PECCA SNTORIA UNI MECH Bought Back Price (RM) Hi/Lo (RM) 400,000 20,000 262,000 1,000 1,000,000 50,000 40,000 140,000 32,600 0.405/0.40 0.22 0.925/0.87 0.35 0.92/0.915 0.80/0.79 1.35/1.34 0.605/0.585 1.05/1.00 0.415/0.40 0.22/0.215 0.925/0.87 0.395/0.345 0.925/0.91 0.80/0.79 1.44/1.33 0.605/0.585 1.05/0.99 Total Treasury Shares 30,838,500 8,623,000 64,009,600 19,786,500 12,076,800 5,873,324 3,280,800 3,171,000 6,742,810 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 12-Feb-18 AUTOMOBILE BAUTO 2.17 2.50 15.2% Buy 2,514 0.48 14.3 19.9 15.2 10.9 5.3 5.5 2.47 -12.1 1.84 17.9 MBMR 2.28 2.32 1.8% Under Review 891 0.75 23.2 23.9 9.8 9.5 2.0 2.1 2.60 -12.3 2.01 13.4 -1.4 3.6 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 2.68 1.97 -26.5% Hold 18,226 1.57 12.0 12.7 22.4 21.2 1.1 1.2 3.06 -12.4 2.03 32.3 21.3 UMW 6.61 4.37 -33.9% Sell 7,722 1.29 20.7 36.9 32.0 17.9 1.5 2.7 6.98 -5.3 4.70 40.6 27.1 1.2 BANKS & FINANCIAL SERVICES ABMB 4.13 4.60 11.4% Hold 6,394 1.29 30.6 35.6 13.5 11.6 3.9 3.9 4.49 -8.0 3.62 14.1 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 4.39 5.50 25.3% Buy 13,232 1.38 48.6 52.0 9.0 8.4 4.1 4.1 5.70 -23.0 4.06 8.1 -0.5 CIMB 6.90 7.50 8.7% Hold 63,656 1.65 50.8 56.0 13.6 12.3 4.2 4.1 7.36 -6.3 4.91 40.5 5.5 HLBANK 17.96 19.30 7.5% Hold 36,739 0.83 114.2 120.9 15.7 14.9 2.5 2.5 18.80 -4.5 13.26 35.4 5.6 MAYBANK 10.06 10.50 4.4% Hold 108,884 1.02 70.6 77.4 14.3 13.0 5.0 5.0 10.24 -1.8 8.31 21.1 2.7 PBBANK 21.94 25.10 14.4% Buy 84,721 0.69 142.4 149.8 15.4 14.6 2.6 2.7 22.62 -3.0 19.66 11.6 5.6 RHBBANK 5.17 5.70 10.3% Hold 20,732 1.58 52.2 53.8 9.9 9.6 2.9 2.9 5.61 -7.8 4.71 9.8 3.4 BURSA 10.86 11.80 8.7% Buy 5,837 0.93 43.9 45.0 24.8 24.1 3.3 3.3 11.30 -3.9 8.08 34.4 7.3 Note: BURSA proposed bonus issue of shares on the basis of 1 for 2. Ex-Target price RM7.04 BUILDING MATERIALS ANNJOO 3.41 4.40 29.0% Buy 1,762 1.30 45.1 48.9 7.6 7.0 6.4 7.6 3.98 -14.3 2.27 50.2 -11.7 CHINHIN 1.03 1.36 32.0% Buy 573 1.09 12.4 12.0 8.3 8.6 4.9 5.8 1.49 -30.9 0.90 14.4 -14.9 ENGTEX 1.04 1.38 32.7% Buy 442 0.83 14.2 16.1 7.3 6.5 4.0 5.3 1.52 -31.6 1.01 3.0 -5.5 GADANG 1.05 1.69 61.0% Buy 693 1.12 14.2 18.1 7.4 5.8 2.9 2.9 1.37 -23.4 1.01 4.0 -5.4 GAMUDA 4.85 6.00 23.7% Buy 11,913 0.88 34.5 35.7 14.1 13.6 2.5 2.5 5.52 -12.1 4.58 5.9 -2.2 IJM 2.69 2.89 7.4% Sell 9,760 1.07 13.7 18.2 19.6 14.8 3.5 3.5 3.61 -25.5 2.66 1.1 -11.8 KAB 0.25 0.38 50.0% Buy 8 na 31.4 37.3 0.8 0.7 4.0 4.8 0.33 -24.2 0.25 2.0 -16.7 PESONA 0.40 0.55 39.2% Buy 274 1.11 5.8 4.8 6.8 8.3 3.8 3.8 0.74 -46.3 0.40 0.0 -12.2 CONSTRUCTION SENDAI 0.80 0.55 -30.8% Sell 621 1.19 9.1 8.5 8.8 9.4 1.3 1.3 1.39 -42.8 0.51 57.4 -8.1 SUNCON 2.43 2.65 9.1% Buy 3,140 0.62 14.7 16.4 16.5 14.8 2.3 2.5 2.64 -8.0 1.70 42.9 -3.2 WCT 1.49 1.64 10.1% Hold 2,096 0.86 12.6 11.2 11.8 13.4 2.0 2.0 2.48 -39.8 1.46 2.1 -8.0 LITRAK 5.75 6.26 8.9% Hold 3,035 0.36 45.6 47.1 12.6 12.2 4.3 4.3 6.15 -6.5 5.40 6.5 3.6 CARLSBG 16.36 18.06 10.4% Buy 5,033 0.76 86.2 88.7 19.0 18.4 5.3 5.4 16.60 -1.4 13.98 17.0 6.9 HEIM 20.04 19.14 -4.5% Buy 6,054 0.37 84.0 88.3 23.9 22.7 3.8 4.0 20.30 -1.3 15.86 26.4 6.0 AEON 1.57 1.97 25.5% Sell 2,204 0.43 6.7 7.7 23.5 20.4 2.5 2.9 2.70 -41.9 1.55 1.3 -10.8 AMWAY 7.60 8.18 7.6% Buy 1,249 0.48 43.9 45.2 17.3 16.8 5.0 5.3 8.18 -7.1 7.04 8.0 3.0 F&N 29.94 33.74 12.7% Buy 10,974 0.21 122.7 145.8 24.4 20.5 2.7 3.2 30.30 -1.2 22.64 32.2 10.9 CONSUMER Brewery Retail HUPSENG 1.10 1.25 13.6% Buy 880 0.41 5.7 5.9 19.3 18.6 5.5 5.5 1.28 -14.1 1.05 4.8 0.9 JOHOTIN 1.18 1.75 48.3% Buy 366 0.73 12.8 13.5 9.2 8.8 4.2 4.6 1.76 -33.0 1.16 1.7 -2.5 NESTLE 116.30 120.50 3.6% Buy 27,272 0.49 325.4 368.7 35.7 31.5 2.5 2.9 117.00 -0.6 75.40 54.2 12.7 PADINI 5.04 4.67 -7.3% Sell 3,316 0.75 28.0 30.4 18.0 16.6 2.5 2.6 5.50 -8.4 2.39 110.9 -4.5 POHUAT 1.50 2.01 34.0% Buy 330 0.49 22.9 25.4 6.5 5.9 5.3 5.3 2.07 -27.5 1.45 3.4 -16.2 QL 4.77 3.26 -31.7% Sell 7,739 0.53 12.8 14.7 37.2 32.4 0.9 1.0 4.84 -1.4 3.26 46.5 9.7 SIGN 0.59 0.92 55.9% Buy 135 0.78 6.9 9.2 8.5 6.4 4.2 5.9 1.07 -44.9 0.58 1.7 -16.3 32.12 52.08 62.1% Buy 9,171 1.41 187.4 175.4 17.1 18.3 6.2 6.2 51.04 -37.1 31.40 2.3 -19.7 GENTING 8.80 11.53 31.0% Buy 33,716 1.49 54.4 59.8 16.2 14.7 1.8 1.8 10.00 -12.0 8.48 3.8 -4.3 GENM 5.25 6.51 24.0% Buy 29,709 1.50 27.0 30.6 19.4 17.1 1.7 1.9 6.38 -17.7 4.87 7.8 -6.7 2.21 3.34 51.1% Buy 2,977 0.68 21.5 26.0 10.3 8.5 7.2 8.1 3.00 -26.3 2.20 0.5 -1.3 CCMDBIO 2.80 2.70 -3.6% Buy 781 0.87 15.0 16.1 18.6 17.4 3.5 3.7 3.03 -7.6 1.97 42.1 10.7 IHH 6.00 6.40 6.7% Buy 49,438 0.76 11.9 15.0 50.5 40.1 0.5 0.6 6.34 -5.4 5.42 10.7 2.4 KPJ 0.88 1.12 28.0% Buy 3,691 0.51 3.7 4.2 23.4 21.0 2.4 2.6 1.14 -23.2 0.87 0.6 -9.8 HARTA 11.06 7.80 -29.5% Sell 18,300 1.17 25.2 28.9 43.9 38.3 1.4 1.6 12.18 -9.2 4.67 136.8 3.6 KOSSAN 8.50 8.80 3.5% Buy 5,435 0.54 38.3 43.0 22.2 19.8 2.3 2.5 8.79 -3.3 5.62 51.2 4.8 SUPERMX 2.17 1.80 -17.1% Sell 1,423 0.41 15.3 17.9 14.2 12.1 2.4 2.8 2.50 -13.2 1.69 28.4 8.5 TOPGLOV 9.20 9.35 1.6% Sell 11,552 0.56 41.6 50.8 22.1 18.1 1.6 1.9 10.00 -8.0 4.56 101.8 15.1 KAREX 1.05 1.00 -4.8% Sell 1,052 0.61 2.8 5.2 38.0 20.2 0.7 1.2 2.41 -56.4 1.03 1.9 -19.2 SCIENTX 8.22 9.84 19.7% Buy 4,019 0.84 67.5 74.1 12.2 11.1 2.2 2.3 9.85 -16.5 6.89 19.3 -5.1 SKPRES 1.66 2.20 32.5% Buy 2,075 0.80 10.4 14.8 16.0 11.2 3.1 4.4 2.35 -29.4 1.24 33.9 -27.2 ASTRO 2.58 3.10 20.2% Buy 13,452 0.91 14.0 13.7 18.5 18.9 5.0 5.2 2.94 -12.2 2.40 7.5 -2.6 MEDIA PRIMA 0.60 0.45 -25.0% Sell 666 1.35 -3.8 -1.7 na na 0.0 0.0 1.28 -53.1 0.58 3.4 -21.1 STAR 1.37 1.25 -8.8% Sell 1,011 1.09 6.7 6.7 20.4 20.4 8.8 8.8 2.22 -38.2 1.31 4.6 -17.0 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 0.43 0.72 67.4% Buy 755 1.47 4.2 4.5 10.3 9.5 2.3 2.3 0.69 -37.7 0.29 50.9 -11.3 LCTITAN 5.21 6.10 17.1% Buy 11,842 na 56.3 60.9 9.2 8.6 4.8 5.2 6.53 -20.2 4.14 25.8 10.9 MHB 0.85 0.81 -4.1% Sell 1,352 1.38 0.5 1.7 175.6 50.6 0.0 0.0 1.16 -27.2 0.63 35.2 2.4 MISC 7.13 6.48 -9.1% Sell 31,827 1.17 46.3 51.7 15.4 13.8 4.2 4.2 7.90 -9.7 6.89 3.5 -3.9 PANTECH 0.59 0.69 17.9% Buy 436 1.23 6.1 6.8 9.6 8.6 4.7 5.2 0.74 -20.9 0.47 25.8 -9.3 PCHEM 7.98 7.96 -0.3% Hold 63,840 0.90 49.8 52.6 16.0 15.2 2.8 2.9 8.28 -3.6 6.80 17.4 3.6 SAPNRG 0.68 1.25 83.8% Buy 4,075 2.01 -6.5 -5.0 na na 0.0 0.0 2.10 -67.6 0.67 2.3 -4.2 SERBADK 3.46 4.16 20.2% Buy 5,081 na 27.7 32.7 12.5 10.6 2.3 2.9 3.66 -5.5 1.52 127.6 6.8 UMWOG 0.31 0.51 67.2% Buy 2,506 1.73 0.4 1.2 75.5 24.6 0.0 0.0 0.70 -56.3 0.27 13.0 0.0 UZMA 1.34 1.56 16.4% Sell 429 0.92 13.1 14.2 10.3 9.4 0.0 0.0 1.98 -32.3 1.26 6.3 4.7 FGV 1.83 2.01 9.8% Sell 6,676 1.52 3.7 4.5 49.4 40.3 2.7 2.7 2.18 -16.1 1.51 21.2 8.3 IJMPLNT 2.30 2.69 17.0% Sell 2,025 0.19 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 1.46 1.89 29.5% Buy 412 0.66 13.3 14.5 11.0 10.1 6.2 6.2 1.96 -25.5 1.45 0.7 -7.0 KLK 25.24 27.07 7.3% Hold 26,880 0.62 120.7 125.7 20.9 20.1 2.4 2.5 25.40 -0.6 23.66 6.7 1.0 SIMEPLT 5.57 6.25 12.2% Buy 37,881 na 21.0 22.1 26.5 25.2 2.5 2.7 6.00 -7.2 4.58 21.6 -7.2 TSH 1.60 2.10 31.3% Buy 2,209 0.60 9.3 9.6 17.2 16.7 1.5 1.5 1.93 -17.1 1.56 2.6 -3.0 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 0.65 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 0.89 0.7 3.4 89.5 17.2 0.9 0.9 1.21 -51.7 0.58 1.7 -4.1 IBRACO 0.76 0.92 21.9% Hold 375 na 9.1 12.4 8.3 6.1 5.3 6.6 0.98 -22.6 0.50 51.0 -7.4 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 1.30 1.69 30.0% Buy 3,156 0.98 13.0 12.6 10.0 10.4 5.0 5.0 1.64 -20.7 1.29 0.8 -10.3 PLANTATIONS PROPERTY SIMEPROP 1.47 1.61 9.5% Sell 9,997 na 9.2 9.1 16.0 16.1 1.4 1.4 1.78 -17.4 1.04 41.3 -17.4 SNTORIA 0.59 0.76 29.9% Buy 330 0.14 8.3 8.6 7.1 6.8 1.7 1.7 0.91 -35.7 0.57 3.5 -15.8 SPB 4.78 5.28 10.5% Hold 1,642 0.66 21.2 26.1 22.6 18.3 2.5 2.5 5.50 -13.1 4.39 8.9 -2.4 SPSETIA 3.30 3.77 14.2% Buy 12,385 0.94 21.3 21.9 15.5 15.1 3.6 3.6 4.38 -24.7 3.07 7.5 -17.5 SUNWAY 1.64 1.74 6.1% Hold 8,029 0.92 11.9 12.6 13.8 13.0 3.0 3.7 1.96 -16.3 1.31 25.1 0.6 SUNREIT 1.73 1.87 8.1% Hold 5,095 0.86 10.0 10.7 17.2 16.2 5.8 6.2 1.90 -8.9 1.64 5.5 -8.9 CMMT 1.28 1.64 28.1% Buy 2,608 0.74 7.9 8.6 16.2 14.8 6.4 7.0 1.83 -30.1 1.25 2.4 -30.1 REIT POWER & UTILITIES MALAKOF 0.92 1.16 26.1% Buy 4,584 0.85 6.0 6.8 15.3 13.5 7.6 7.6 1.32 -30.3 0.86 7.0 -6.1 PETDAG 25.00 22.08 -11.7% Sell 24,836 0.39 105.1 105.7 23.8 23.6 3.1 3.2 26.20 -4.6 21.00 19.0 3.1 PETGAS 17.76 19.10 7.5% Buy 35,142 0.87 98.8 99.5 18.0 17.8 3.9 3.9 21.04 -15.6 15.82 12.3 1.6 TENAGA 15.76 18.33 16.3% Buy 89,296 0.57 131.3 127.5 12.0 12.4 4.3 4.1 16.12 -2.2 13.44 17.3 3.3 YTLPOWR 1.20 1.17 -2.5% Sell 9,329 0.87 9.8 10.3 12.2 11.7 4.2 4.2 1.50 -20.0 1.11 8.1 -7.0 TELECOMMUNICATIONS AXIATA 5.58 6.50 16.5% Buy 50,489 1.55 15.9 19.5 35.0 28.7 1.4 2.8 5.82 -4.1 4.24 31.6 1.6 DIGI 4.84 5.15 6.4% Hold 37,631 0.93 19.7 20.4 24.6 23.8 4.1 4.2 5.19 -6.7 4.36 11.0 -5.1 MAXIS 5.94 6.05 1.9% Sell 46,395 1.06 25.2 25.0 23.6 23.7 3.2 3.2 6.60 -10.0 5.48 8.4 -1.2 TM 6.13 7.20 17.5% Buy 23,036 0.62 23.2 24.9 26.4 24.7 3.4 3.7 6.69 -8.4 5.85 4.8 -2.7 ELSOFT 2.56 2.70 5.5% Hold 704 0.76 13.4 15.3 19.1 16.8 3.7 4.2 2.95 -13.2 1.54 66.0 -5.2 IRIS 0.18 0.25 42.9% Buy 433 2.46 0.6 0.7 31.6 26.2 0.0 0.0 0.25 -28.6 0.12 52.2 -5.4 INARI 3.21 3.35 4.4% Under Review 6,626 0.71 14.0 15.7 22.9 20.5 3.1 3.5 3.82 -16.0 1.83 75.8 -5.6 TECHNOLOGY Semiconductor & Electronics Note: INARI proposed bonus issue shares on the basis of 1 for 2. For more detail please refer to 30.01.18 report. MPI 9.05 10.70 18.2% Hold 1,800 0.75 73.9 86.9 12.3 10.4 3.5 3.5 14.52 -37.7 8.91 1.6 -28.3 UNISEM 2.77 3.25 17.3% Under Review 2,033 1.16 19.0 20.3 14.6 13.6 4.3 4.3 4.25 -34.8 2.65 4.5 -24.1 TRANSPORTATION Airlines AIRASIA 4.15 3.83 -7.7% Buy 13,869 1.31 38.3 39.8 10.8 10.4 1.2 1.4 4.34 -4.4 2.57 61.5 23.9 AIRPORT 9.12 8.64 -5.3% Sell 15,132 1.39 19.7 20.1 46.2 45.3 2.0 1.3 9.45 -3.5 6.35 43.6 3.8 Freight & Tankers PTRANS 0.28 0.46 67.3% Buy 346 na 2.4 3.8 11.5 7.3 2.5 3.9 0.38 -28.0 0.15 89.1 -1.8 TNLOGIS 1.12 1.80 60.7% Buy 512 1.14 13.6 14.0 8.2 8.0 4.5 4.5 1.83 -38.9 1.12 0.0 -16.4 WPRTS 3.70 4.06 9.7% Buy 12,617 0.49 15.6 20.0 23.7 18.5 1.0 1.3 4.19 -11.7 3.12 18.6 0.0 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) % upside Recom Market Cap. (S$m) Beta EPS (cent) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52week 52week % Chg High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 27.31 30.50 11.7% Buy 70,019 1.18 212.8 246.6 12.8 11.1 2.4 2.6 27.4 -0.3 18.12 50.7 9.9 OCBC 12.26 13.50 10.1% Buy 51,318 1.21 104.1 110.6 11.8 11.1 6.7 7.7 13.3 -8.0 9.38 30.7 -1.0 UOB 26.35 26.90 2.1% Hold 43,821 1.16 215.4 229.3 12.2 12.2 2.7 2.7 28.5 -7.4 20.63 27.7 -0.4 PLANTATIONS WILMAR 3.03 3.63 19.8% Hold 19,388 0.81 29.9 31.8 10.1 9.5 2.6 3.0 4.0 -23.5 2.97 2.0 -1.9 IFAR 0.35 0.53 51.4% Hold 502 1.01 5.2 5.7 6.7 6.1 3.6 4.0 0.6 -39.7 0.35 0.0 -10.3 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 Tuesday , February 13, 2018 FBMKLCI: 1,830.17 Sector: Construction THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM0.375 (+50.0%) Kejuruteraan Asastera Berhad Last Traded: RM0.25 Closing FY17 on a High Note Ooi Beng Hooi Tel: +603-2167 9612 BUY benghooi@ta.com.my Results Review Excluding listing expenses estimated at RM3.1mn, KAB’s FY17 core profit of RM9.9mn came in above our expectations, accounting for 118.4% of our full-year estimate. The variance was mainly due to stronger-thanexpected margin. Sequentially, 4Q17 core profit surged 33.7% to RM3.2mn, driven largely by margin improvement. 4Q17 performance was the strongest quarterly results for FY17. It recorded highest sequential revenue for the year at RM31.3mn, as well as the strongest quarterly gross margin of the year at 22.5%, versus FY17 full-year gross margin of 19.2%. www.taonline.com.my Share Information Bloomberg Code KASB MK Bursa KAB Stock Code 0193 Ace Market Listing 320.0 Share Cap (mn) 80.0 Market Cap (RMmn) 0.33/0.245 52-wk Hi/Lo (RM) 13192.9 12-mth Avg Daily Vol ('000 shrs) 35.0 Estimated Free Float (%) na Beta Major Shareholders (%) Dato' Lai Keng Oon - 61.25 Forecast Revision YoY, FY17 core profit surged 51.1% as the full-year revenue jumped 23.0% to RM114.6mn, further boosted by improvements in gross margin from 17.1% to 19.2%. Post IPO listing in November 2017, the reporting quarter ended Dec2017 saw the balance sheet improve from a slight net-debt position of RM0.9mn in the immediate preceding quarter to a net cash position RM12.7mn (4sen/share). Impact Maintain FY18 and FY19 earnings projections at RM10.0mn and RM11.9mn. Earnings forecasts for FY20 are introduced with net profit estimated to grow 7.6% to RM12.8mn. Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 10.0 11.9 Buy (Maintained) Financial Indicators FY18 net cash (0.9) (27.4) 9.1 15.6 1.6 FY19 net cash (0.6) (42.5) 9.1 18.1 1.4 vs. TA vs. Consensus % of FY 118.4 - Above - Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth KAB (15.3) - FBM KLCI 0.4 5.3 3.6 7.0 Net Debt / Equity (%) CFPS (sen) Price / CFPS (x) ROA (%) NTA/Share (sen) Price/NTA (x) Scorecard Outlook The company has an outstanding order book of RM217.1mn, sufficient to provide earnings visibility for the next 2 years. Valuation We maintain the target price at RM0.375, based on unchanged 12x CY18 earnings. Maintain BUY call on KAB as the stock trades at an undemanding forward PE multiple of 8.0x. (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 2
13. 13-Feb-18 Table 1 : Earnings Summary (RMmn) FYE Dec (RMmn) R evenue Gros s profit E B ITDA E B ITDA ma rg in E B IT P BT P AT Core net profit Core E P S * PER Gros s dividend Dividend yield R OE (% ) (s en) (x) (s en) (% ) (% ) 2016 93.1 15.9 10.9 11.7 10.1 8.8 6.6 6.6 2.0 12.2 na na 49.0 2017 114.6 22.0 11.5 10.0 11.4 10.2 6.8 9.9 3.1 8.1 0.0 0.0 33.6 2018F 130.0 21.8 14.9 11.4 14.1 13.6 10.0 10.0 3.1 8.0 1.0 4.0 21.6 2019F 150.0 25.5 17.5 11.6 16.3 16.0 11.9 11.9 3.7 6.7 1.2 4.8 22.1 2020F 160.0 27.2 18.7 11.7 17.3 17.2 12.8 12.8 4.0 6.2 1.2 4.8 20.5 Note: * based on enlarged share base of 320mn Table 2: 4QFY17 Results Analysis (RMmn) FYE Dec QoQ (%) YoY (%) Revenue 4Q16 na 3Q17 30.2 4Q17 31.3 3.8 na FY16 93.1 FY17 114.6 YoY (%) 23.0 Opera ting profit na 3.1 3.1 (17.6) na 10.1 11.4 12.3 F ina nc e cos ts na (0.3) (0.3) 14.1 na (1.3) (1.2) (9.8) P rofit before ta xa tion na 2.8 2.7 (3.5) na 8.8 10.2 15.8 Income ta x expens e na (0.7) (1.3) 84.7 na (2.2) (3.4) 51.9 Net profit na 2.1 1.4 (32.8) na 6.6 6.8 3.4 Core net profit na 2.4 3.2 33.7 na 6.6 9.9 51.1 Reported E P S (s en)* na 0.7 0.4 (32.8) na 2.0 2.1 3.4 Core E P S (s en)* na 0.7 1.0 33.7 na 2.0 3.1 51.1 Dividend (s en) na na 0.0 na na na 0.0 na Ma rg in (% ): - Opera ting na 10.3 9.7 (0.6) na 10.9 10.0 (0.9) - P BT na 9.4 8.7 (0.7) na 9.4 8.9 (0.6) - P AT na 7.9 10.2 2.3 na 7.0 8.6 1.6 - E ffec tive ta x ra te na 24.9 47.7 22.8 na 25.5 33.5 8.0 Note : * b as e d on e nlarg e d s hare b as e of 320mn Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Tuesday, February 13, 2018, the analyst, Ooi Beng Hooi, 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 2
14. RESULT UPDATE Tuesday , February 13, 2018 FBMKLCI: 1,830.17 Sector: Plantation THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* K u a l a L u m p u r K e p o n g B e r h a d TP: RM27.07 Last Traded: RM25.24 Aggressive Replanting Taking Place Angeline Chin Tel: +603-2167 9611 (+7.3%) HOLD angelinechin@ta.com.my Review KLK's 1QFY18 results came in within expectations. Excluding the forex impact and other non-core items, 1QFY18 core net profit declined 23.3% YoY to RM295.2mn. This accounted for 23% and 25% of our and consensus’ full-year estimates. Overall, the improvement in the downstream segment in 1QFY18 failed to offset the decline in its upstream business. Plantation: 1QFY18 operating profit decreased by 35.9% YoY to RM270.8mn, mainly dragged by weaker average selling prices of CPO (5.1% YoY to RM2,581/tonne) and palm kernel (-6.0% YoY to RM2,488/tonne). Meanwhile, FFB and CPO production also declined by 1.9% and 2.6%, respectively. Manufacturing: 1QFY18 operating profit increased by more than 100% YoY to RM154.6mn, mainly attributed to unrealised fair value gain on derivatives, stabilised raw material cost of CPKO and higher contribution from the oleochemical segment. Nonetheless, profit from the other manufacturing units had decreased to RM709,000 vis-à-vis profit of RM6.3mn in 1QFY17. Property: 1QFY18 operating profit plunged 93.9% YoY to RM1.0mn, in line with 70.3% drop in revenue to RM17.9mn. No dividend was declared for the quarter under review. Impact Earnings forecast for FY19 was revised lower by 0.5% after incorporating audited FY17 accounts into our model. Meanwhile, we also take this opportunity to introduce our FY20 forecast, where we expect the group's net profit to increase by 3.1% YoY to RM1,379.8mn. Outlook Management believes that the various positive steps taken by Malaysian authorities, such as the suspension on export taxes on CPO, should limit any further CPO price erosion. Besides, management expects the improvement in oleochemical operations would help to offset decline in the plantation segment. We gather that KLK would take a more aggressive replanting exercise after the El Nino experience, especially in Sabah (Lahad Datu region) and Indonesia. A total of 7.2k hectares were replanted in FY17 while another 11k hectares have been targeted for replanting in FY18. We expect FY18 FFB production to increase by 4.5% YoY to 4.1mn, which is slightly below management’s guidance of 5% - 6% YoY. Note that KLK is the only company registered a YoY decline FFB production in 4QFY17 (-1.9%) for the companies under our coverage. www.taonline.com.my Share Information Stock Code KLK Listing Main Market Share Cap (m) 1,065 Market Cap (RMm) 26,880 52-wk Hi/Lo (RM) 25.24/23.66 12-mth Avg Daily Vol ('000 shrs) 1,199 Estimated Free Float (%) 27.1 Beta 0.67 Major Shareholders (%) Batu Kawan Bhd - 47.03 EPF - 12.83 Amanah Saham Bumiputera - 4.69 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 (0.0) (0.5) 1,285 1,339 1,203 1,264 107 106 Hold (Maintain) Financial Indicators Net debt/equity (%) CFPS (sen) P/CFPS (x) ROA (%) NTA/Share (RM) Price/ NTA (x) 3-year EPS CAGR (%) FY18 22.4 14.0 180.5 6.5 11.1 2.3 16.1 FY19 18.4 24.5 103.0 6.6 11.8 2.1 7.1 % of FY 23 25 Within Within KLK 0.2 2.8 2.0 0.6 FBM KLCI 0.4 5.3 3.6 7.0 Scorecard vs TA vs Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBMKLCI Valuation We revise up KLK’s target price to RM27.07, based on SOP valuation and after incorporating latest financial figures. The TP translates into CY18 implied PER of 22.2x. Maintain HOLD recommendation. Potential re-rating catalysts for the stock includes: i) stronger-than-expected FFB growth, ii) improvement in downstream margin, and iii) higher CPO prices. Source: Bloomberg Page 1 of 3
15. 13-Feb-18 Figure 1 : Plantation Statistics FFB (tonnes) 1QFY17 4QFY17 1QFY18 % QoQ % YoY 1,044,615 999,839 1,024,966 2.5 (1.9) 229,273 218,625 223,244 2.1 (2.6) 3,999,283 3,148,936 3,156,438 0.2 (21.1) 4QFY17 2,555 2,162 1QFY18 2,581 2,488 % QoQ % YoY 1.0 15.1 (5.1) (6.0) 1QFY18 270.8 154.6 1.0 30.6 456.9 % QoQ (6.3) 67.3 (95.5) >100 12.3 % YoY (35.9) >100 (93.9) (30.3) (12.2) CPO (tonnes) Rubber (kg) Source: Bursa announcement, TA Research Figure 2 : Average Selling Prices CPO (RM/tonne) Palm Kernel (RM/tonne) 1QFY17 2,720 2,648 Source: Bursa announcement, TA Research Figure 3 : Breakdown of Segmental Operating Profit RM mn Plantation Manufacturing Prop. dev. Inv. Holdings/Others Total 1QFY17 422.3 38.9 15.6 43.9 520.6 4QFY17 289.0 92.4 21.2 4.4 406.9 Source: Bursa announcement, TA Research Figure 4: Earnings Summary (RMmn) FYE Sept 30 Revenue EBITDA EBITDA margin Pretax profit Reported net profit Core net profit Reported EPS Core EPS Core EPS growth PER Gross DPS Gross Div Yield ROE (%) (sen) (sen) (%) (x) (sen) (%) (%) FY16 16,505.8 1,749.4 10.6 1,712.3 1,592.2 1,088.8 149.5 102.2 32.7 24.7 50.0 2.0 10.8 FY17 21,004.0 1,923.2 9.2 1,450.2 1,005.1 906.7 94.4 85.1 (16.7) 29.6 50.0 2.0 8.2 FY18F 20,403.0 2,399.5 11.8 1,854.7 1,285.5 1,285.5 120.7 120.7 41.8 20.9 60.0 2.4 10.8 FY19F 20,530.5 2,482.5 12.1 1,931.4 1,338.6 1,338.6 125.7 125.7 4.1 20.1 62.0 2.5 10.7 FY20F 20,620.7 2,540.7 12.3 1,990.8 1,379.8 1,379.8 129.6 129.6 3.1 19.5 64.0 2.5 10.4 Page 2 of 3
16. 13-Feb-18 Figure 5 : 4QFY17 Results Analysis (RM mn) FYE Sept 30 Turnover EBIT Forex and EI Net interest Associates & JV Pretax Taxation MI Net profit Core net profit Core EPS (sen) GDPS (sen) EBIT Margin Pretax Margin Tax Rate 1QFY17 5,496.1 525.0 (24.4) (28.2) 0.0 472.4 (96.3) (15.4) 360.7 385.1 4QFY17 5,164.1 437.2 (35.2) (20.5) (0.7) 380.8 (115.0) (23.7) 242.1 277.3 1QFY18 5,192.5 436.8 25.4 (21.2) 0.4 441.5 (99.0) (21.9) 320.6 295.2 (sen) (sen) 36.2 0.0 26.0 35.0 27.7 0.0 (%) (%) (%) 9.6 8.6 20.4 8.5 7.4 30.2 8.4 8.5 22.4 QoQ% 0.6 (0.1) nm 3.4 nm 15.9 13.9 7.6 32.4 6.5 YoY% (5.5) (16.8) nm 24.9 nm (6.5) (2.7) (42.3) (11.1) (23.3) Figure 6 : KLK’s Sum-of-Parts valuation table Value (RMmn) Plantations Manufacturing Property KLK-UEML JV Others Total Net debt SOP value Share capital (mn) Target price (RM) 24,506 3,828 284 1,873 303 30,795 (1,963) 28,832 1,065 27.07 Remarks 24x CY18 PAT 15x CY18 PAT 9x CY18 PAT Market value 1 x BV Implied CY18 PER of 22.2x Source: Company, TA Research Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Tuesday, February 13, 2018, the analyst, Angeline Chin Swee Tyng, 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
17. COMPANY UPDATE Tuesday , February 13, 2018 FBMKLCI: 1,830.17 Sector: Transportation THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Malaysia Airports Holdings Berhad TP: RM8.64 (-5.3%) Last Traded: RM9.12 A Slow Start to Passenger Movement for 2018 Tan Kam Meng, CFA Tel: +603-2167 9605 SELL kmtan@ta.com.my Growth slowed to 1.5% MAHB’s Jan-18 operating data shows that passenger growth slowed to 1.5% to 8.1mn passengers (Figure 1). Domestic traffic declined by 6.4% YoY to 3.6mn passengers (Figure 3) and this was due to 1) high base effect, and 2) different timing of Lunar Chinese New Year. However, the international growth remained encouraging at 9.0%, where the non-Asean sector grew 10.5% and the Asean sector grew by 7.3% (Figure 4). Note that the growth in the international segment has been sustaining for 19th straight month since Jul-16. Figure 1 – Jan-18 passenger movement slowed down to 1.5% mn 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 - www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (RMmn) Par Value 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) Khazanah -33.2 EPF - 11.1 20.0% 15.0% Forecast Revision 10.0% 5.0% 0.0% -5.0% International Domestic Jan-18 Oct-17 Jul-17 Apr-17 Jan-17 Oct-16 Jul-16 Apr-16 Jan-16 Oct-15 Jul-15 Apr-15 Jan-15 -10.0% Growth Source: MAHB & TA Research According to announcement, passenger movement in South Asia, North East Asia, South East Asia and the Middle East sectors registered double-digit growth in Jan-18. This was partly driven by new routes introduced by Malindo Air, Xiamen Airlines, AirAsia, China Southern Airlines, Indonesia AirAsia and Indonesia AirAsia X. Overall, the slow start to passenger movement for 2018 is within market expectation. We maintain our 2018 growth assumption of 3% versus management guidance of 6.3%. MAHB MK 5014 Main Market 1659.2 15231.5 1.0 9.45/6.35 3605.0 55.7 1.4 Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 0.0 0.0 327.1 331.6 271.9 405.7 120.3 81.7 Sell (Maintained) Financial Indicators Net Gearing (%) CFPs (sen) P/CFPS (x) ROE (%) NTA/Share (RM) Price/NTA (x) FY17 18.0 176.4 5.2 3.7 (4.7) nm Share Performance (%) Price Change MAHB 1 mth 0.6 3 mth 10.0 6 mth 6.5 12 mth 36.3 FY18 10.0 72.9 12.6 3.7 (4.2) nm FBM KLCI 0.4 5.3 3.6 7.0 (12-Mth) Share Price relative to the FBMKLCI ISG’s passenger movement expanded to 25.3% in Jan-18 Istanbul Sabiha Gokcen (ISG) airport recorded a strong start with 25.3% YoY (+4.0% MoM) growth in passenger movements to 2.6mn passengers. This was underpinned by both the international (+21.7% YoY) and domestic (+27.0%) segments (see Figure 5 & 6). Despite strong growth, we do not expect ISG to turnaround in 2018. Source: Bloomberg Page 1 of 5
18. 13-Feb-18 Figure 2 – ISG’s passenger rose 25.3% in Jan-18 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 MAHB’s earnings prospect is encouraging on the back of: 1) increase in capacity and introduction of new routes by Malaysian airline operators, especially AirAsia and Malindo Air; 2) potential increase in non-aeronautical contribution typically from duty-free sales and rental income; and 3) development within Aeropolis. We also believe the opening of 20th Fox Century Theme Park in Genting Highlands this year will likely attract “mustsee” foreign visitation. Forecast Maintain our earnings forecast. Valuation Despite the strong earnings visibility, we continue to believe MAHB’s valuation is expensive at a forward PE of 51x. Maintain Sell on MAHB with unchanged DCF valuation of RM8.64/share, based on unchanged discount rate of 10.7%. Figure 3: Malaysia’s Dom. passenger slipped 6.4% in Jan-18 mn Pass. Movement (LHS) 5.0 YoY growth (RHS) Figure 4: Malaysia’s Int. passengers expanded 9.0% in Jan18 'mn 6.0 ASEAN Non-ASEAN YoY growth (RHS) 25.0% 20.0% 5.0 20.0% 4.0 15.0% 10.0% 4.0 3.0 5.0% 3.5 1.8 1.7 1.8 1.7 1.7 1.6 2.0 2.0 1.9 1.8 1.8 2.3 2.1 1.9 2.0 2.1 2.1 1.9 2.2 2.4 2.0 2.1 2.1 2.5 2.4 15.0% 4.5 1.0 0.0% Jan-18 Nov-17 Sep-17 Jul-17 May-17 Mar-17 Jan-17 Nov-16 Sep-16 Jul-16 May-16 -5.0% Mar-16 Jan-16 Jan-18 Nov-17 Jul-17 Sep-17 May-17 Mar-17 Jan-17 Nov-16 Sep-16 Jul-16 -10.0% May-16 2.5 Mar-16 -5.0% Jan-16 3.0 5.0% 1.7 1.7 1.8 1.7 1.8 1.7 1.9 1.8 1.7 1.8 1.8 2.1 1.9 1.8 1.9 2.0 1.9 1.9 2.1 2.0 1.9 2.0 1.9 2.3 2.1 2.0 0.0% 10.0% Page 2 of 5
19. 13-Feb-18 Figure 6 : ISG’s Dom. passenger rose 27.0% in Jan-18 '000 2500 10% 500 0% Jan-18 -10% Oct-17 0 Jul-17 Jan-18 Oct-17 Jul-17 Apr-17 Jan-17 Oct-16 Jul-16 Apr-16 Jan-16 Oct-15 Jul-15 Apr-15 Jan-15 0 1000 Jan-17 200 20% Apr-17 400 1500 Oct-16 600 40% 30% Jul-16 800 YoY growth (RHS) 2000 Apr-16 1000 Jan-16 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Jul-15 YoY growth (RHS) Apr-15 Pass. Movement (LHS) Pass. Movement (LHS) Jan-15 '000 1200 Oct-15 Figure 5: ISG’s Int. passenger rose 21.7% in Jan-18 Source: MAHB & TA Securities Page 3 of 5
20. 13-Feb-18 Income Statement (RM'mn) FYE 31 Dec Balance Sheet (RM'mn) R evenue E B ITDA Dep & Amor E B IT Net F ina ncing Cos t As s ocia te & J V EI P BT Ta x P AT Core Net Profit 2015 3870.2 1656.6 (901.7) 754.9 (741.9) 10.4 22.5 23.5 (5.8) 40.9 18.5 2016 4172.8 1709.9 (852.5) 857.4 (689.8) 15.7 (28.6) 211.9 (110.2) 70.4 99.0 2017F 4462.7 1968.8 (898.2) 1070.6 (669.6) 18.4 0.0 419.4 (92.3) 327.1 327.1 Core E P S (s en) E P S g rowth (% ) P E (x) GDP S (s en) Dividend yield (% ) (0.6) (106.6) nm 8.5 0.9 1.3 >100 690.0 10.0 1.1 16.2 1121.9 56.5 10.0 1.1 P BT Dep & Amor Cha ng es in WC Others CFO 2015 45.9 902.3 (1576.7) 1306.4 677.9 2016 183.3 852.5 200.2 534.8 1770.9 2017F 419.4 898.2 2120.1 217.3 3655.0 2018F 641.1 924.9 116.5 80.5 1763.0 2019F 396.2 969.8 123.5 194.7 1684.1 Ca pex Others CFI (50.0) (1166.2) (1216.2) (430.5) 136.6 (293.9) (418.4) 0.0 (418.4) (418.4) 295.3 (123.1) (418.4) 0.0 (418.4) Dividend E quity ra is ed Net B orrowing Others CFF (116.8) 1306.0 (426.7) (1077.8) (315.3) (141.0) 0.0 0.0 (1074.3) (1215.3) (166.9) 10.0 0.0 (669.6) (826.5) (302.3) 10.0 0.0 (669.6) (961.8) (202.7) 10.0 (193.6) (658.0) (1044.3) Net Increa s e/(Decrea s e) in Ca s h F CF E F CF /s ha re (R M) (853.6) (1360.8) (0.8) 261.7 354.2 0.2 2410.1 2927.1 1.8 678.1 1209.7 0.7 Cas h Flow (RM'mn) FYE 31 Dec Key As s umptions FYE 31 Dec Tota l P a s s eng er Growth (mn) Aircra ft movement ('000) E ra ma n S a les / pa x (R M) R enta l - KLIA & KLIA 2 (R M'mn) 2015 83.8 815.3 11.7 226.9 2016 88.8 811.6 12.4 239.5 2017F 96.3 879.7 13.2 255.3 2018F 4676.8 1960.2 (924.9) 1035.4 (669.6) 20.2 255.1 386.0 (54.4) 586.7 331.6 17.8 10.3 51.2 18.0 2.0 2018F 99.1 906.1 14.0 272.1 2019F 4995.7 2001.7 (969.8) 1031.9 (658.0) 22.2 0.0 396.2 (55.9) 340.3 340.3 16.7 (6.0) 54.5 12.0 1.3 221.5 821.6 0.5 2019F 104.1 933.3 14.4 284.3 PPE Inta ng ibles Others Non-current As s ets FYE 31 Dec 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 389.7 16,746.6 1,101.0 18,237.3 2018F 396.8 16,236.7 1,077.3 17,710.8 2019F 403.2 15,682.9 1,095.6 17,181.6 Inventories Tra de R ecb. Others Ca s h Current As s ets 117.6 1,140.9 31.7 1,286.7 2,577.0 135.2 871.6 11.1 1,571.9 2,589.8 183.4 978.1 11.1 3,982.0 5,154.7 192.2 999.4 11.1 4,660.1 5,862.8 205.3 1,081.3 11.1 4,881.6 6,179.2 Total As s ets 21,992.3 21,288.6 23,392.0 23,573.6 23,360.9 S ha re Ca pita l S ha re P remium Others R eta ined E a rning s 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 2,481.4 2.0 8,867.1 1,679.2 3,455.1 1,259.3 2,765.8 2.0 9,161.5 1,689.2 3,455.1 1,259.3 2,903.4 2.0 9,309.1 B orrowing s Other Non-current Lia bilities 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 B orrowing s T. P a ya bles a nd other Current Lia bilites 398.3 1,825.7 2,224.0 193.6 1,572.1 1,765.8 193.6 3,505.3 3,699.0 193.6 3,392.6 3,586.2 1,000.0 3,225.9 4,225.9 Total Liabilities 13,151.7 12,591.7 14,524.9 14,412.1 14,051.8 NTA/s ha re (R M) P /NTA (x) E V/E B ITDAR (x) (5.4) nm 11.9 (5.1) nm 11.2 (4.7) nm 8.5 (4.2) nm 8.3 (3.8) nm 7.9 2015 2016 2017F 2018F 2019F 42.8 0.5 0.2 0.1 41.0 2.4 1.1 0.5 44.1 7.3 3.7 1.5 41.9 7.1 3.7 1.4 40.1 6.8 3.7 1.5 Current R a tio (x) Quick R a tio (x) 1.2 1.1 1.5 1.4 1.4 1.3 1.6 1.6 1.5 1.4 Leverage Net g ea ring (x) Interes t Covera g e (x) 0.5 2.2 0.5 2.5 0.2 2.9 0.1 2.9 0.1 3.0 Ratios FYE 31 Dec Profitability E B ITDA ma rg in (% ) Core profit ma rg in (% ) R OE (% ) R OA (% ) Liquidity Page 4 of 5