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Bursa Malaysia Daily Market Report - 13 November

Mohd Noordin
By Mohd Noordin
6 years ago
Bursa Malaysia Daily Market Report - 13 November

Ard, Islam, Mal, Participation, Sales


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  1. Monday , 13 November, 2017 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. We ek ly St r at e g y 3. We ek ly Te ch n i c a l Ou t lo ok Fu nd a me n tal Rep o r ts 1 . M a la ys i a A i rp o rt s H o l d i n g s Be rh a d : R e v is in g F Y 1 7 Pa s se n g e r Gro w th t o 8 .4 % 2 . P e t ro n a s Da g a n g a n Be rh a d : Be n e f ic ia ry o f R is i n g O il P r ic e 3 . P e t ro n a s Ga s Be r h a d : U p l if te d b y U t i li t ie s 4 . P la n t a t io n S e c t o r : Pro du c t io n H i t s 2 - Y e a r H ig h 5 . W e s t p o rt s H o l d in g s B e rh a d : F o u n d I t s Bo t to m in 3 Q 1 7 Te ch n ic al R ep o rt s 6 . We e k ly T e c h n ic a l S to c k Pic k s 7 . Da ily M o n e y F lo w Technical Stock Picks FBMKLCI Stocks Under Coverage PLANTATION Sector CONSTRUCTION Sector PROPERTY Sector 8. Weekly Ace Market Stock Watch 9. Weekly Small Cap Stock Watch 10.Weekly Stock Screen 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 Monday , 13 November 2017 For Internal Circulation Only TA Research, e-mail : taresearch@ta.com.my KLSE Market Statistics (10.11.2017) (mil) Main Market 2,026.2 Warrants 218.5 ACE Market 844.0 Bond 19.9 ETF 0.0 LEAP 0.0 Total 3,108.6 Off Market 142.6 Volume +/-chg (RMmn) 199.2 1,961.7 16.8 30.1 -203.0 141.4 4.4 2.9 -0.43 0.0 -0.16 0.0 2,136.2 1.5 431.3 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP November 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 (mn) 46.9 40.1 27.2 6.3 5.0 5.0 4.0 2.0 2.0 1.5 1.0 1.0 @ @ @ @ @ @ @ @ @ @ @ @ % chg % YTD chg Stocks wise, recent weakness on Gamuda, IOI Corp, Malakoff and Westports to lower and stronger support levels should attract investors looking for longer-term upside, while construction related lower liners such as Binapuri, Gadang, MRCB and WCT Holdings should also attract rotational buying interest. -4.53 -16.97 3.93 -5.00 -0.26 -0.13 0.02 -0.29 6.12 9.72 18.21 6.24 23,422.21 6,750.94 7,432.99 22,681.42 2,542.95 29,120.92 3,420.10 1,689.28 6,021.83 3,432.67 2,039.17 6,029.37 -39.73 0.89 -51.11 -187.29 -7.62 -15.65 -3.81 -13.75 -20.63 4.88 10.47 -20.05 -0.17 0.01 -0.68 -0.82 -0.30 -0.05 -0.11 -0.81 -0.34 0.14 0.52 -0.33 18.52 25.41 4.06 18.66 25.49 32.36 18.72 9.48 13.69 10.60 3.56 6.42 News Bites • • • • Top 09 KLCI Movers Based on Mkt Cap. (RM) Counter 0.02 3.93 4.40 0.18 9.07 7.45 14.90 2.90 0.27 0.65 0.60 1.14 IHH MAXIS AXIATA PCHEM DIGI GENTING GENM KLK RHBBANK YTLCORP Exchange Rate USD/MYR 4.1915 -0.0088 USD/JPY 113.41 -0.0600 EUR/USD 1.165 0.0038 Given the deteriorating momentum on technical indicators for the FBM KLCI following last week's range bound trade with upside checked below the crucial 200-day moving average level now at 1,750, more sideways trade with downside bias is anticipated this week. Unless foreign selling subside, downside momentum remains as our local market continues to negatively correlate with global markets which are clawing up to multiyear highs. Immediate overhead resistance for the index stays at the prior 2 Oct pivot low of 1,750, next will be 1,764, the 100-day moving average, while tough hurdle is seen from the 8 Aug peak of 1,782, followed by the double-top peak of 1,793 and 1,796. On the downside, stronger support below the recent pivot low of 1,733 will be the April low of 1,729, and subsequently 1,700. 1,742.28 12,581.49 17,394.65 1,737.50 Off Market DBE YINSON BIMB PMHLDG SIME PCHEM TENAGA INARI KNM SEACERA ACCSOFT VOIR Review & Outlook Value Value/ +/-chg Volume Up Down -157.9 0.97 258 327 3.3 0.14 71 89 -48.6 0.17 40 56 0.6 0.15 2 4 -0.62 1.92 0 2 -0.06 0.39 0 1 0.69 371 479 18.2 3.02 Mkt Cap. Chg (RM’mn) (RM) 55,942 48,313 46,785 46,386 37,631 35,998 28,626 26,305 19,609 13,862 -0.03 -0.10 -0.01 -0.01 -0.03 -0.07 -0.10 -0.08 -0.01 -0.02 Vol. (mn) 8.26 3.93 2.09 1.70 1.98 1.48 3.99 0.28 0.78 3.80 Commodities Futures Palm Oil (RM/mt) 2,811.00 -10.00 Crude Oil ($/Barrel) 56.90 -0.13 Gold ($/tr.oz.) 1,275.60 -10.00 • • • • • • • • • • • Important Dates Petronas Dagangan Bhd's 9M17 core net profit of RM793mn (+8% YTD) was above expectations, accounting for 81%/83% of TA/ consensus's full-year forecasts. Petronas Gas Berhad's 9M17 core profit of RM1.3bn (+3% YTD) was within our expectations and consensus estimates, accounting for 75% and 73% of full-year estimates respectively. Westports Holdings Berhad's 9M17 core profit of RM433.4mn came in within expectation at 74% of our full-year forecast and 73% of consensus estimates. As part of a mutual decision, Mudajaya Group Berhad has withdrawn from an RM810mn contract awarded by Consortium Zenith Construction Sdn Bhd for construction works in Penang. Malaysia's largest combined cycle gas turbine power plant in Alor Gajah, Melaka is expected to begin operations in 2021. KNM Group Berhad has proposed to undertake a private placement of up to 10% of its issued shares. Dialog Group Berhad entered into a lease agreement with Johor Corporation to lease two parcels of land at Tanjung Langsat for 30 years at a total lease rental of RM62mn. To further expand its overseas markets, Spritzer Bhd has proposed to place out a substantial 15% of its share base to a Singapore-based strategic investor called Dymon Asia Private Equity. IJM Land Bhd will be launching seven projects with a total GDV of RM1.2bn over the next few months. Titijaya Land Berhad has established an Islamic Commercial Papers Programme of up to RM150.0mn in nominal value and made its first issuance of Islamic Commercial Papers of RM20.0mn on 10 November 2017. CCK Consolidated Holdings Bhd would gradually increase the group's production to some 40,000 birds per day from current 30,000 birds starting next year. Hartalega Holdings Bhd has developed the world's first non-leaching anti-microbial nitrile examination gloves, which are scheduled to be launched in the market in early 2018. Malaysia Airports Holdings Berhad's network of airports registered 6.9% YoY growth for October 2017 with 10.6mn passenger traffic. Malaysia Palm Oil Board's October 2017 monthly data surprised us with a higher-than-expected production growth of 12.9%, which higher than market's expectation of 9%-10% growth. The University of Michigan said its preliminary reading on consumer sentiment was 97.8 in November, down from 100.7 in October. ATTA - 8-1 Rights Issue - RI of up to 2,515.0m ICPS . 8 ICPS for every 1 existing share held, at an issue price of RM0.08 per ICPS. Trading of Rights: 07/11 - 13/11/2017. Application Closed: 21/11/2017. LISTING ON: 06/12/2017. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan, Head of Research MENARA TA ONE, 22 JALAN for TA SECURITIES HOLDINGS BERHAD (14948-M) A PARTICIPATING ORGANISATION OF BURSA MALAYSIA SECURITIES BHD P RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL : 603 - 2072 1277. FAX : 603 - 2032 5048 www.ta.com.my
  3. Monday , November 13, 2017 FBMKLCI: 1,742.28 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Weekly Strategy Market View, News In Brief: Corporate, Economy, and Share Buybacks Kaladher Govindan Tel: +603-2167 9609 kaladher@ta.com.my www.taonline.com.my M a r k e t V i e w Downside Pressure Should Ease, Buy-on-Weakness While strong retail participation fueled rotational plays on small caps and ACE Market stocks last week, the local blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FMB KLCI) remain trapped in range trade. Local fund buying was offset by profit-taking interest, specifically ahead of the weekend, copying weaker regional peers on disappointment over the US tax bill proposal for a corporate tax rate cut to 20 percent that is only likely to come in 2019. Week-on-week, the FBM KLCI rose 1.35 points, or 0.08 percent to 1,742.28, with losses on Petronas Dagangan (-RM1.84), PPB Group (-12sen) and IJM Corp (-10sen) offset by gains on BAT (+RM2.05), Genting Berhad (+50sen), MISC (+19sen), and Petronas Chemicals (+15sen). Average daily traded volume and value last week was 2.96 billion shares worth RM2.27 billion, matching the 2.96 billion shares and RM2.26 billion average the previous week. The benchmark index needs strong catalysts to break free from last two weeks’ sideway trading and the upcoming third quarter GDP announcement this Friday should provide the fuel, if it succeeds in outperforming expectations for the third consecutive quarter after registering a strong growth of 5.6% year-on-year (YoY) and 5.8% YoY in first quarter and second quarter respectively. Consensus economic growth forecast for the third quarter is 5.5% YoY. Actual growth may not disappoint based on the recent Industrial Production Index (IPI) and trade data. The manufacturing output that made up about 66% of IPI rose 7.1% YoY in third quarter from 6.2% YoY in the second quarter. Nominal exports advanced by 22.1% YoY in July-toSeptember period versus 20.6% YoY in the second quarter and contributed to this year’s highest quarterly surplus of RM26.7bn. These data should translate into higher real figures as well. As historical data suggests a strong correlation of 95% between market capitalization and nominal GDP, the current mismatch between stronger-than-expected GDP and lacklustre equity market performance may not prolong. Signs of tapering off in foreign selling and strengthening of ringgit, despite rising 10-year Malaysian Government Securities (MGS) yield, suggest foreign interest in our local equity market, which lacks the strong double-digit year-to-date gains of regional markets, could improve in the coming months. Ringgit recovered 0.9% week-on-week to RM4.19 against the USD last Friday, almost near its 2017 low of RM4.18, despite MGS yield rising 0.4% to 4.06% during the same period. If foreigners are worried about the immediate-term uncertainty from the 14th General Election, this concern could be assuaged temporarily by the fact that the ongoing northeast monsoon season could delay the election to at least March next year and beyond. Page 1 of 7
  4. 13-Nov-17 Thus , there is still room for rotational investment given the stretched valuations of US equities, which were driven mainly by improving economic data, better-than-expected corporate earnings and policy measures. The near conclusion of the US third quarter earnings reporting season and delays in tax reforms can act as valid reasons for funds to lock in their profits and look for other high yielding assets in the short-term. Bursa Malaysia should benefit given its steep undervaluation against regional markets despite the recovery in economic growth, corporate earnings, crude oil and ringgit. As such, any sustained weakness in undervalued blue chips, especially those in the banking sector (Maybank (TP: RM10.20), CIMB (TP: RM8.00), AMMB (TP: RM5.70) & HLBank (TP: RM17.50)) construction (Gamuda (TP: RM6.00) & Gadang (TP: RM1.75)) and building materials (Chin Hin (TP: RM1.58) & Ann Joo (TP: RM4.40)) players, and growth stocks with good fundamentals should be viewed as a buying opportunity. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Monday, November 13, 2017, the HOD, Kaladher Govindan, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 7
  5. 13-Nov-17 N e w s I n B r i e f Corporate As part of a mutual decision , Mudajaya Group Berhad has withdrawn from an RM810mn contract awarded by Consortium Zenith Construction Sdn Bhd for construction works in Penang. This is following uncertainties in being able to secure the exact date for site possession, signing the construction contract and insufficient information provided for the project causing a lapse of time to the timelines in the letter of award. (Bursa) Malaysia’s largest combined cycle gas turbine power plant in Alor Gajah, Melaka is expected to begin operations in 2021. Edra Power Holdings Sdn Bhd chief operations officer Datuk Mohamad Nor Ali said the 2,242MW combined cycle gas turbine power plant project was on track. The amount of power generated can light up 10% of the country’s electricity requirements. (The Star) KNM Group Berhad has proposed to undertake a private placement of up to 10% of its issued shares. Estimated proceeds of RM53.3mn will be utilised for repayment of borrowings, working capital requirements and defrayment of expenses related to the proposed exercise. (Bursa) Dialog Group Berhad entered into a lease agreement with Johor Corporation to lease two parcels of land at Tanjung Langsat for 30 years at a total lease rental of RM62mn. It will also purchase a tank terminal facility on the land for RM91mn. This is to expand its tank terminal storage capacity and operations at Tanjung Langsat, Johor. (Bursa) To further expand its overseas markets, Spritzer Bhd has proposed to place out a substantial stake of its share base to a Singapore-based strategic investor called Dymon Asia Private Equity (Dape). If the private placement exercise is approved, Dape will own 15% of the enlarged share base of the company. (The Star) IJM Land Bhd will be launching seven projects with a total GDV of RM1.2bn over the next few months. The seven included The Mezzo at Penang’s Light City, 3 Residence in Penang, Riana Dutamas at Segambut, Riana South at Cheras, Rimbun Ara and Safira at Seremban 2 and Austin Duta in Johor. (The Star) Titijaya Land Berhad has established an Islamic Commercial Papers Programme of up to RM150.0mn in nominal value and made its first issuance of Islamic Commercial Papers of RM20.0mn on 10 November 2017. Proceeds will be utilised for the repayment of borrowings, to finance investment activities, working capital requirements and general corporate purposes. (Bursa) CCK Consolidated Holdings Bhd, Sarawak’s largest integrated poultry firm, will raise the production output of its poultry abattoir in Kuching by one-third under an expansion and upgrading project. The expanded abattoir would gradually increase the group’s production to some 40,000 birds per day from current 30,000 birds starting next year. (The Star) Destini Berhad has entered into a joint venture and shareholders agreement with Federal International (2000) Ltd. Both parties intend to leverage on each other’s capabilities and expertise in tendering for projects in South Asia and South-East Asia region. This include floating production systems in greenfield development, transportation and installation services, well abandonment and field decommissioning services and downhole and well workover services. (Bursa) Page 3 of 7
  6. 13-Nov-17 Hartalega Holdings Bhd has developed the world 's first non-leaching anti-microbial nitrile examination gloves. The gloves are scheduled to be launched in the market in early 2018. (Bernama) Malaysia Airports Holdings Berhad’s network of airports registered 6.9% YoY growth for October 2017 with 10.6mn passenger traffic. International passengers registered a 12.6% YoY growth with 4.9mn passengers, while domestic passengers grew by 2.4% YoY with 5.7mn passengers. In a separate article, the group says it is unfazed by potentially stiffer competition affecting its Istanbul operations amid the ongoing construction of a third airport in the Turkish capital. It said travelers have a strong preference for ISD’s location compared to the Ataturk Airport. (Bursa, The Edge) Petronas Gas Berhad reported a 2.5% YoY increase in its 9MFY17 net profit to RM1.3bn. Revenue rose 2.9% YoY, driven by higher utilities price and volume, further supported by regasification revenue. Earnings were also aided by higher interest income and lower tax expenses. (Bursa) Petronas Dagangan Bhd reported an 84.5% YoY jump in its 9MFY17 profit to RM1.3bn. Revenue increased 26.6% YoY to RM19.7bn. Average selling price advanced 29% following an increase in MOPS prices, offset by lower sales volume of 2%. There was also a gain on disposal totalling RM424.6mn. (Bursa) Westports Holdings Berhad’s 9MFY17 net profit declined 8.6% YoY to RM440.5mn. Operational revenue declined 4.1% YoY. This was due to lower container throughput and higher fuel cost as a result of lower fuel price in 9M2016. (Bursa) Page 4 of 7
  7. 13-Nov-17 N e w s I n B r i e f Economy Asia RBA Sees Solid Growth , Slow Inflation as Cash Rate Stays on Hold Australia’s central bank used its Statement on Monetary Policy to flesh out its consistent recent view of accelerating growth and sluggish inflation, suggesting interest rates will stay at a record-low 1.5%. Underlying inflation forecasts revised slightly lower for 2018 and cut by half percentage point for 2019, mainly to allow for upcoming reweighting of CPI. “The assessment of pricing pressures in the near term has not changed,” the RBA said. Quarterly GDP growth to ease slightly in third quarter, then to average about 3% over next couple of years, led by resource exports and more positive business investment. Household consumption likely slowed in third quarter after weak retail data; weak income growth and high debt levels are constraints. Labor market conditions have “strengthened considerably” and forward indicators suggest “above-average employment growth” will continue. (Bloomberg) Singapore Retail Sales Slip 0.5% in September Singapore retail sales fell for the first time in six months in September amid poor motor vehicle sales, a sharp reversal from a strong showing in August. Retailers saw total takings decline by 0.5% year-on-year, but when car sales was stripped away, retail sales actually grew 3.3%, according to the latest data released by the Department of Statistics. This was a sharp deterioration from August's total sales growth of 3.7% - its strongest growth rate since March 2016 and the sixth straight month of expansion - which was revised up from 3.5%. On a year-on-year basis, motor vehicles plunged the most among all the categories at 15.3%, followed by computer and telecommunications equipment at 7.4%. Supermarket sales fared the best at 9.8%, with petrol service station next at 9.2%. On a month-onmonth basis, retail sales fell 4.2% from August. Excluding car sales, it still fell by 0.2%. Again, motor vehicles fared the worst, declining 19.9% compared to August. Recreational goods had the strongest growth at 5.5 per cent. Sales of food and beverage services also fell both in year-on-year and month-on-month terms in September. It declined 0.3% from a year ago, and 1.1% from August. The total retail sales value in September was estimated at S$3.4 billion, lower than the S$3.5 billion a year ago. (Business Times) Japan Tertiary Activity Index Down More than Expected Japan's tertiary activity index decreased for the second straight month in September, and at a faster-than-expected rate, data published by the Ministry of Economy, Trade and Industry showed. The tertiary activity index dropped 0.2% month-over-month in September, following a 0.1% decrease in August. Economists had expected a 0.1% stable rate of fall for the month. Among the individual components of the survey, activity was down for wholesale trade, medical, health care and welfare, information and communications, electricity, gas, heat supply and water, business related services and goods rental and leasing. At the same time, activity was up for finance and insurance, real estate, transport and postal activities, retail trade and living and amusement-related services. On a yearly basis, the tertiary activity index climbed at a steady pace of 0.6% in September. (RTT News) United States Consumer Sentiment Dips in Early November A measure of U.S. consumer sentiment dipped in early November from last month’s 13year high, as respondents’ expectations of current and future economic conditions declined slightly. The University of Michigan said its preliminary reading on consumer sentiment was 97.8 in November, down from 100.7 in October. The October reading was the index’s highest since early 2004. Economists surveyed by The Wall Street Journal had expected a preliminary reading of 100.0 in November. The index remained at a high level despite the month-over-month decline. November’s reading was the third-highest so far this year. Consumers’ short-term inflation expectations ticked higher, an encouraging development for Federal Reserve policy makers who monitor expectations for inflation because they Page 5 of 7
  8. 13-Nov-17 have the potential to feed into actual prices . The expected change in inflation rates over the next year was 2.6% in November compared with 2.4% in October. The expected rate of inflation over the next five years was 2.5% in November, unchanged for the fourth straight month. Inflation has undershot the Fed’s 2% annual target for months. The price index for personal-consumption expenditures slightly exceeded 2% in February for the first time in nearly five years but has since settled lower, and rose only 1.6% on the year in September. Officials including Chairwoman Janet Yellen have said current weak inflation likely reflects idiosyncratic, one-off developments. (The Wall Street Journal) Europe and Uni ted Kingdom UK Industrial Output Grows at Fastest Rate So Far in 2017, Finds ONS UK industrial output grew at its fastest rate seen this year in September according to the Office for National Statistics, in data which is likely to make the Bank of England feel more comfortable about its decision to raise interest rates for the first time in a decade last week. Within that, manufacturing rose by 0.7%, also ahead of expectations. The ONS further reported that the UK’s trade in goods deficit was £11.25bn in the month, better than the £12.8bn analysts had pencilled in, with exports rising faster than imports. The overall trade deficit, including services, came in at £2.75bn, down from £3.4bn in the previous month. The data briefly pushed up the pound to $1.3167, although the boost did not last. Despite the positive news on industrial production and trade, a separate release from the ONS suggested the construction sector had a torrid September, with output contracting 1.6%. The overall UK economy is estimated by the ONS to have grown by 0.4%, up from the 0.3% rate in the second quarter. The ONS reported that industrial production rose by 0.7% in the month, more than double the 0.3% financial analysts had expected. (BBC News) UK GDP Growth Improves in October: NIESR UK economic growth slightly improved in October, despite a slowdown in activity versus a year ago, the National Institute of Economic and Social Research showed. Economic output grew 0.5% in the three months to October, which was slightly stronger than the 0.4% expansion in the third quarter, the think tank said, citing its monthly estimates of GDP. The monthly estimate is closely tracking the forecast for real GDP growth for the final quarter of this year of 0.5%, the NIESR said. "Although economic growth is likely to be stronger in the second half of this year compared with the first, it is important to note that activity has slowed since last year and this at a time when growth in other OECD countries has strengthened," Amit Kara, Head of UK Macroeconomic Forecasting at NIESR, said. "Looking ahead, we expect the pattern of demand in the UK economy to rebalance towards international trade in response to strengthening global growth and weaker sterling and away from domestic demand." If the economy continues to expand at this pace and inflation remains elevated, there is a case for the Bank of England to gradually raise the policy rate to stop the economy from overheating, Kara said. The NIESR's latest forecast for the UK is conditioned on a 25 basis points increase in Bank Rate every six months such that the policy rate reaches 2% in 2021, the economist added. (RTT News) Page 6 of 7
  9. 13-Nov-17 Share Buy-Back : 10 November 2017 Company AMPROP BKAWAN BORNOIL E&O FFHB LIENHOE PECCA Bought Back Price (RM) Hi/Lo (RM) 85,000 132,400 500,000 100,000 20,000 247,700 10,000 0.80 19.90/19.84 0.10 1.48 0.67 0.35 1.29/1.28 0.80/0.79 19.98/19.84 0.095/0.09 1.49/1.48 0.67 0.36/0.35 1.31/1.28 Total Treasury Shares 15,601,800 33,323,431 40,900,000 13,322,747 792,800 14,393,900 2,130,000 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) BETA EPS (sen) PER (X) Div Yield (%) FY17 FY18 FY17 FY18 FY17 52weeks 52weeks % Chg FY18 High Price % Chg Low Price % Chg YTD 10-Nov-17 AUTOMOBILE BAUTO 2.07 2.50 0.81 10.2 14.3 20.3 14.4 5.6 5.6 2.20 -5.9 1.84 12.5 MBMR 2.10 2.09 1.00 20.7 23.2 10.2 9.1 2.0 2.2 2.60 -19.2 2.01 4.5 -2.8 -1.9 PECCA 1.30 1.69 na 7.8 11.1 16.6 11.7 3.8 4.2 1.81 -28.2 1.28 1.6 -18.2 UMW 5.20 5.04 1.38 19.7 30.6 26.4 17.0 2.5 3.8 6.08 -14.5 4.09 27.0 23.1 BANKS & FINANCIAL SERVICES ABMB 3.69 4.80 1.39 33.1 30.6 11.2 12.1 4.3 4.3 4.49 -17.8 3.60 2.5 -0.8 AFFIN 2.51 3.00 0.88 29.4 33.6 8.5 7.5 3.2 3.2 3.00 -16.3 2.22 13.1 5.0 AMBANK 4.33 5.70 1.20 43.9 48.6 9.9 8.9 4.1 4.2 5.70 -24.0 3.90 11.0 0.5 CIMB 6.18 8.00 1.47 49.6 55.2 12.4 11.2 4.1 4.5 7.08 -12.7 4.49 37.6 37.0 HLBANK 16.00 17.50 0.58 104.9 114.2 15.3 14.0 2.8 2.8 16.48 -2.9 12.80 25.0 18.5 MAYBANK 9.18 10.20 0.97 69.6 75.9 13.2 12.1 5.4 5.4 9.86 -6.9 7.63 20.3 12.0 PBBANK 20.46 23.60 0.60 137.2 142.4 14.9 14.4 2.7 2.8 20.90 -2.1 19.46 5.1 3.8 RHBBANK 4.89 5.80 1.44 50.6 55.0 9.7 8.9 3.1 3.1 5.59 -12.5 4.58 6.8 3.8 BURSA 9.88 11.10 0.78 40.2 39.0 24.6 25.3 3.4 3.4 10.98 -10.0 8.08 22.3 13.3 CONSTRUCTION BPURI 0.37 0.38 0.55 4.7 4.6 7.8 8.0 0.0 0.0 0.49 -24.7 0.33 12.3 -16.1 GADANG 1.20 1.75 0.39 15.2 14.3 7.9 8.4 2.5 2.5 1.37 -12.4 0.89 35.6 14.3 GAMUDA 4.80 6.00 0.97 27.8 34.5 17.3 13.9 2.5 2.5 5.52 -13.0 4.65 3.2 0.4 IJM 3.07 3.50 0.89 15.3 20.2 20.1 15.2 2.4 3.1 3.61 -15.0 3.06 0.3 -4.1 PESONA 0.53 0.64 0.68 4.4 6.6 12.0 7.9 4.8 4.8 0.74 -28.6 0.50 5.0 -13.2 SENDAI 0.95 0.58 1.22 8.2 9.6 11.5 9.9 1.1 1.1 1.39 -32.0 0.51 87.1 64.3 SUNCON 2.39 2.55 na 12.7 14.7 18.9 16.3 2.3 2.3 2.43 -1.6 1.58 51.3 40.6 WCT 1.68 1.61 1.01 11.5 12.5 14.6 13.5 1.8 1.8 2.48 -32.1 1.49 12.8 -2.3 LITRAK 5.80 6.26 0.33 41.9 45.7 13.8 12.7 4.3 4.3 6.15 -5.7 5.57 4.1 -1.4 ANNJOO 3.86 4.40 1.17 41.3 45.4 9.3 8.5 5.3 5.7 3.98 -3.0 1.97 95.9 77.9 CHINHIN 1.30 1.58 na 8.3 11.3 15.7 11.5 3.1 4.6 1.49 -12.8 0.85 53.8 49.4 WTHORSE 1.96 1.67 0.50 6.7 10.0 29.2 19.7 5.1 5.1 2.19 -10.5 1.92 2.1 -2.5 CARLSBG 15.66 18.06 0.65 79.3 86.2 19.8 18.2 5.0 5.5 16.00 -2.1 13.72 14.1 12.5 HEIM 18.60 19.14 0.48 79.6 84.0 23.4 22.1 3.9 4.1 19.58 -5.0 15.56 19.5 13.6 AEON 2.00 2.23 0.45 6.5 7.5 30.7 26.6 2.0 2.4 2.82 -29.1 1.95 2.6 -22.2 AMWAY 7.30 8.62 0.33 30.6 38.7 23.8 18.9 4.5 4.8 8.18 -10.7 7.05 3.5 -0.4 F&N 25.56 27.41 0.17 102.6 150.9 24.9 16.9 2.2 2.3 26.00 -1.7 22.44 13.9 8.9 HUPSENG 1.13 1.50 0.37 6.5 6.6 17.3 17.1 5.3 5.3 1.28 -11.7 1.12 0.9 -1.8 15.3 Building Materials CONSUMER Brewery Retail JOHOTIN 1.43 1.80 0.43 13.5 15.1 10.6 9.5 3.0 3.5 1.76 -18.8 1.08 32.4 NESTLE 88.78 92.76 0.39 292.7 325.4 30.3 27.3 3.1 3.2 90.00 -1.4 74.12 19.8 13.5 PADINI 5.30 4.67 0.51 23.5 27.0 22.6 19.7 2.2 2.4 5.38 -1.5 2.26 134.5 108.7 POHUAT 2.00 2.50 0.65 27.3 27.3 7.3 7.3 4.0 4.0 2.08 -3.8 1.55 29.0 15.6 QL 3.94 3.26 0.31 12.1 12.8 32.6 30.7 1.1 1.1 4.03 -2.2 3.26 21.0 18.3 SIGN 0.88 1.08 0.88 6.7 8.6 13.2 10.3 2.8 4.0 1.07 -17.8 0.79 12.1 10.7 39.40 52.08 1.30 198.6 187.4 19.8 21.0 5.1 5.1 51.04 -22.8 37.00 6.5 -10.8 GENTING 9.41 11.54 1.46 50.2 54.4 18.8 17.3 1.5 1.7 10.00 -5.9 7.50 25.5 18.4 GENM 5.05 6.53 1.53 21.0 27.1 24.0 18.6 1.6 1.8 6.38 -20.8 4.42 14.3 11.8 BJTOTO 2.37 3.34 0.79 18.3 21.5 12.9 11.0 5.9 6.8 3.13 -24.3 2.25 5.3 -19.9 LUSTER 0.13 0.15 2.00 0.4 0.4 34.4 34.7 0.0 0.0 0.16 -21.9 0.05 150.0 150.0 Tobacco BAT GAMING Casino NFO HEALTHCARE Hospitals/ Pharmaceutical CCMDBIO 2.20 2.45 0.58 12.7 13.6 17.4 16.2 3.9 4.1 2.43 -9.5 1.90 15.8 11.1 IHH 5.63 6.41 0.71 7.9 13.1 70.9 43.0 0.6 0.6 6.60 -14.7 5.50 2.4 -11.3 KPJ 1.02 1.17 0.39 3.3 4.1 30.8 25.1 1.5 1.8 1.14 -10.5 0.96 6.0 -2.4 HARTA 8.70 6.87 0.66 19.4 24.6 44.9 35.4 1.0 1.3 8.80 -1.1 4.53 92.1 80.1 KOSSAN 7.48 7.35 0.03 33.9 40.0 22.0 18.7 2.3 2.7 7.74 -3.4 5.62 33.1 13.5 SUPERMX 1.86 1.80 0.27 10.6 15.2 17.6 12.3 1.8 2.4 2.38 -21.8 1.69 10.1 -11.8 TOPGLOV 6.89 6.00 -0.30 26.4 29.4 26.1 23.4 2.1 2.1 6.97 -1.1 4.56 51.1 28.8 KAREX 1.60 1.60 0.17 2.8 4.6 57.4 34.5 1.3 0.7 2.62 -38.9 1.37 16.8 -32.2 SCIENTX 8.85 9.38 0.40 52.3 64.9 16.9 13.6 1.8 2.0 9.85 -10.2 6.64 33.3 32.1 SKPRES 1.92 2.20 0.45 8.3 10.4 23.2 18.5 2.2 2.7 2.02 -5.0 1.24 54.8 48.8 ASTRO 2.82 3.40 1.32 13.2 14.5 21.3 19.4 4.4 4.6 2.94 -4.1 2.47 14.2 8.5 MEDIA PRIMA 0.83 0.60 0.47 0.9 2.8 96.8 29.3 0.8 2.7 1.28 -35.5 0.66 26.0 -28.3 STAR 1.51 1.00 0.66 3.3 4.0 45.5 37.4 27.8 11.9 2.22 -31.9 1.50 0.7 -22.5 Rubber Gloves INDUSTRIAL MEDIA
  11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) BETA EPS (sen) FY17 PER (X) Div Yield (%) FY18 FY17 FY18 FY17 52weeks 52weeks % Chg FY18 High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.47 0.75 1.10 3.6 4.5 12.9 10.3 2.2 2.2 0.69 -32.6 0.23 106.7 82.4 LCTITAN 5.29 6.66 na 42.8 63.4 12.4 8.3 4.3 4.7 6.53 -19.0 4.14 27.8 -18.6 MHB 0.93 0.78 1.73 -2.0 -0.5 na na 0.0 0.0 1.16 -19.8 0.63 48.8 1.6 MISC 7.30 6.56 1.07 57.2 46.8 12.8 15.6 4.1 4.1 7.90 -7.6 6.91 5.6 -0.7 PANTECH 0.68 0.69 1.13 4.0 6.1 17.1 11.1 2.6 4.0 0.74 -8.1 0.44 56.3 52.8 PCHEM 7.44 8.05 0.99 52.7 49.8 14.1 14.9 3.1 3.0 7.80 -4.6 6.54 13.8 6.6 SENERGY 1.45 1.66 2.83 6.6 -0.4 21.9 na 0.7 0.0 2.10 -31.0 1.33 9.0 -10.5 SERBADK 2.76 3.40 na 22.9 25.7 12.1 10.7 2.5 2.7 2.79 -1.1 1.51 82.8 84.0 UMWOG 0.33 0.48 1.70 -3.2 -0.9 na na 0.0 0.0 0.92 -64.2 0.27 22.2 -61.4 -14.7 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.45 1.55 1.31 FGV 1.86 1.52 1.79 IJMPLNT 2.87 3.58 0.32 IOICORP 4.50 4.14 1.29 KFIMA 1.69 1.89 0.46 KLK 24.70 26.18 SIME 9.07 9.80 UMCCA 7.04 GLOMAC HUAYANG 11.3 12.3 12.8 11.8 0.0 0.0 1.98 -26.8 1.28 13.3 1.0 2.5 188.1 73.0 2.7 2.7 2.18 -14.7 1.42 31.0 20.0 12.3 14.1 23.3 20.4 2.4 2.8 3.60 -20.3 2.83 1.4 -15.6 17.3 21.0 25.9 21.4 2.1 3.6 4.81 -6.4 4.32 4.2 2.3 19.9 13.3 8.5 12.7 5.3 5.3 1.96 -13.8 1.65 2.4 -0.6 0.78 103.4 120.4 23.9 20.5 2.1 2.4 25.50 -3.1 23.00 7.4 2.9 1.51 34.2 37.3 26.5 24.3 2.5 2.5 9.70 -6.5 7.85 15.5 12.0 7.52 0.39 37.5 31.8 18.8 22.1 3.3 2.4 7.08 -0.6 5.54 27.0 17.9 0.64 0.60 0.53 1.4 5.0 44.2 12.7 4.3 4.2 0.77 -16.9 0.61 4.9 -7.9 0.71 0.69 0.65 17.3 1.8 4.1 38.8 5.6 0.7 1.21 -41.3 0.71 0.0 -37.2 IBRACO 0.87 0.94 na 3.3 10.5 26.7 8.3 2.3 4.6 1.05 -17.1 0.76 15.2 -13.0 IOIPG 1.99 2.23 0.81 18.9 16.9 10.5 11.8 3.0 3.0 2.28 -12.5 1.85 7.7 2.1 MAHSING 1.54 1.76 1.00 14.3 13.5 10.8 11.4 4.2 4.2 1.64 -6.1 1.34 14.9 7.7 SNTORIA 0.76 0.98 0.26 6.2 10.3 12.2 7.3 1.3 1.3 1.00 -24.5 0.69 9.4 -5.6 PLANTATIONS PROPERTY Note: SNTORIA proposed bonus issue of warrants & right issue of shares. For more details please refer to 25.09.17 report. SPB 4.80 5.97 0.67 25.6 22.8 12.9 14.4 2.5 2.5 5.19 -7.5 4.32 11.0 8.6 SPSETIA 3.29 4.10 0.91 11.6 12.7 14.5 13.2 4.3 4.3 4.50 -26.9 3.10 6.1 5.1 SUNWAY 1.68 1.83 0.73 15.8 15.2 12.4 12.9 3.0 3.0 1.96 -14.2 1.24 35.6 30.7 SUNREIT 1.69 1.87 0.75 9.2 10.0 18.3 16.8 5.4 5.9 1.81 -6.6 1.63 3.7 -1.7 CMMT 1.46 1.72 0.41 8.1 8.6 18.1 16.9 5.8 6.1 1.72 -15.1 1.40 4.3 -4.6 -27.0 REIT POWER & UTILITIES MALAKOF 1.00 1.22 0.61 6.8 6.9 14.6 14.6 7.0 7.0 1.51 -33.8 1.00 0.5 PETDAG 21.60 21.47 0.68 98.2 102.3 22.0 21.1 3.4 3.5 25.70 -16.0 21.00 2.9 -9.2 PETGAS 17.80 19.37 0.89 87.6 100.1 20.3 17.8 3.5 3.9 21.98 -19.0 16.64 7.0 -16.4 TENAGA 14.90 17.38 0.77 175.7 130.0 8.5 11.5 3.0 3.0 15.46 -3.6 13.00 14.6 7.2 YTLPOWR 1.31 1.40 0.68 8.2 11.2 15.9 11.7 3.8 3.8 1.50 -12.7 1.28 2.3 -10.3 TELECOMMUNICATIONS AXIATA 5.34 5.40 1.35 15.7 16.9 34.1 31.6 1.5 1.6 5.47 -2.4 4.11 29.9 13.1 DIGI 4.84 5.20 0.76 19.5 20.0 24.8 24.2 4.0 4.1 5.19 -6.7 4.63 4.5 0.2 MAXIS 5.99 6.10 0.74 26.0 26.2 23.1 22.8 3.3 3.3 6.60 -9.2 5.48 9.3 0.2 TM 6.16 7.20 0.63 22.6 23.2 27.3 26.6 3.3 3.4 6.69 -7.9 5.81 6.0 3.5 TECHNOLOGY Semiconductor & Electronics ELSOFT 2.55 3.00 0.57 11.3 14.1 22.6 18.1 3.1 3.9 2.95 -13.6 1.29 98.4 81.6 IRIS 0.17 0.25 1.84 -1.3 0.6 na 29.8 0.0 0.0 0.22 -25.0 0.10 65.0 50.0 INARI 2.89 2.75 0.80 11.3 13.0 25.7 22.3 3.4 3.2 2.95 -2.0 1.61 79.9 74.5 MPI 13.74 15.00 0.16 89.5 105.5 15.4 13.0 2.0 2.3 14.52 -5.4 7.20 90.8 85.4 UNISEM 3.89 3.85 0.77 23.5 27.1 16.5 14.3 3.1 3.1 4.25 -8.5 2.27 71.4 64.8 TRANSPORTATION Airlines AIRASIA 3.24 3.76 0.92 44.0 37.6 7.4 8.6 1.2 1.5 3.59 -9.7 2.16 50.0 41.5 AIRPORT 8.35 8.47 1.23 19.6 19.7 42.6 42.3 1.2 1.2 9.45 -11.6 5.91 41.3 37.8 Freight & Tankers PTRANS 0.30 0.44 na 2.1 2.3 14.6 13.2 2.1 2.3 0.38 -21.4 0.14 112.9 106.3 TNLOGIS 1.36 1.80 1.12 12.0 13.6 11.3 10.0 3.1 3.7 1.83 -25.8 1.35 0.7 -12.8 WPRTS 3.67 4.06 0.87 17.1 16.8 21.4 21.8 3.5 3.4 4.39 -16.4 3.58 2.5 -14.7 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) Beta EPS (cent) FY17 FY18 PER (X) FY17 FY18 Div Yield (%) FY17 52week 52week % Chg FY18 High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 24.01 23.30 1.25 172.7 189.1 13.9 12.7 2.5 2.5 -1.2 16.0 50.25 38.5 0.0 OCBC 11.75 13.50 1.20 95.5 104.0 12.3 11.3 5.7 6.7 -1.9 8.5 8.84 31.7 0.0 UOB 25.24 26.90 1.07 200.8 215.5 12.6 11.7 2.8 2.8 -1.0 18.6 36.06 23.7 0.0 PLANTATIONS WILMAR 3.31 3.72 0.84 28.9 31.1 11.4 10.6 2.4 2.7 -17.3 3.1 7.47 -7.8 0.0 IFAR 0.46 0.53 1.01 4.9 5.2 9.4 8.8 2.6 2.8 -23.5 0.4 4.60 -13.3 0.0 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
  12. Technical View Monday , November 13, 2017 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Weekly Technical Outlook FBM KLCI: 1,742.28 (+1.35, +0.08%) Chartist : Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my KLCI Kept Below 200-day ma Bearish While strong retail participation fueled rotational plays on small caps and ACE Market stocks last week, the local blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FMB KLCI) remain trapped in range trade, as local fund buying was offset by profit-taking interest, specifically ahead of the weekend, copying weaker regional peers on disappointment over the US tax bill proposal for a corporate tax rate cut to 20 percent which is only likely to come in 2019. Week-on-week, the FBM KLCI rose 1.35 points, or 0.08 percent to 1,742.28, with losses on Petronas Dagangan (-RM1.84), PPB Group (-12sen) and IJM Corp (-10sen) offset by gains on BAT (+RM2.05), Genting Berhad (+50sen), MISC (+19sen), and Petronas Chemicals (+15sen). Average daily traded volume and value last week was 2.96 billion shares worth RM2.27 billion, matching the 2.96 billion shares and RM2.26 billion average the previous week. Blue chips stayed range bound Monday while rotational plays on small caps and ACE Market stocks sustained strong retail participation. The KLCI ended up 1.36 points at 1,742.29, after ranging between early high of 1,745.41 and low of 1,741.43, as losers edged gainers 451 to 429 on robust turnover of 3bn shares worth RM2.08bn. The local benchmark index rose the next day, lifted by strong gains on Petronas Gas, Genting Berhad and Genting Malaysia and regional market strength as global oil prices surged to fresh two-year highs. The KLCI climbed 8.65 points to close at the day’s high of 1,750.94, off the opening low of 1,742.44, but losers edged gainers 499 to 378 on steady turnover totaling 3.02bn shares worth RM2.66bn. The FBM KLCI gave back most of the previous day’s gains on Wednesday, dragged down by late afternoon foreign selling on key index heavyweights Petronas Dagangan (-72sen), Petronas Gas (-58sen) and HLFG (-30sen). The index shed 6.74 points to close at 1,744.20, near session low of 1,744.09 and off early high of 1,749.83, as losers beat gainers 481 to 367 on slower turnover of 2.6bn shares worth RM2.14bn. Stocks recovered the following day with strong gains on BAT (+RM1.50) and core oil & gas heavyweights lifting the benchmark up on renewed local fund buying interest due to the firm global oil prices. The KLCI recouped 2.61 points to settle at 1,746.81, off an early low of 1,742.32 and high of 1,749.31, as gainers narrowly edged losers 431 to 428 on improved turnover totaling 3.09bn shares worth RM2.34bn. The local market slipped lower on profit-taking ahead of the weekend, in line with weaker regional peers on disappointment over the proposed US tax bill with the corporate tax rate cut from 35 percent to 20 percent likely to come only in 2019. The index lost 4.53 points to close at 1,742.28 on Friday, off a high of 1,748.94 and low of 1,740.94, as losers beat gainers 479 to 371 on active trade totaling 3.11bn shares worth RM2.13bn. Page 1 of 3
  13. 13-Nov-17 The trading range for the blue-chip benchmark index last week was ten points , compared to the 11.66-point range the previous week, as blue chips traded sideways with bargain hunting checked by profit-taking interest. For the week, the FBM-EMAS Index gained 18.33 points or 0.15 percent to close at 12,581.49, but the FBM-Small Cap Index slipped 40.56 points, or 0.23 percent to 17,394.65. The daily slow stochastics indicator for the FBM KLCI hooked down again and is set to trigger a sell in the neutral region (Chart 1), while the weekly stochastics’ signal line stayed depressed in oversold territory. The 14-day Relative Strength Index (RSI) indicator hooked back down to a reading of 42.70 as of last Friday, while the 14-week RSI flattened with a soft reading of 44.56 to mirror the weak momentum on the daily indicator. Chart 1 On trend indicators, the signal line on the daily Moving Average Convergence Divergence (MACD) continued to suggest weaker upside momentum, while the weekly MACD signal line inched nearer to the mid-point to maintain the bearish trend reading (Chart 2). Meantime, the +DI and –DI lines on the 14-day Directional Movement Index (DMI) trend indicator expanded bearishly to sustain a weak trend signal. Chart 2 Page 2 of 3
  14. 13-Nov-17 Conclusion Given the deteriorating momentum on technical indicators for the FBM KLCI following last week ’s range bound trade with upside checked below the crucial 200-day moving average level now at 1,750, more sideways trade with downside bias is anticipated this week. Unless foreign selling subside, downside momentum remains as our local market continues to negatively correlate with global markets which are clawing up to multi-year highs. Immediate overhead resistance for the index stays at the prior 2 Oct pivot low of 1,750, next will be 1,764, the 100-day moving average, while tough hurdle is seen from the 8 Aug peak of 1,782, followed by the double-top peak of 1,793 and 1,796. On the downside, stronger support below the recent pivot low of 1,733 will be the April low of 1,729, and subsequently 1,700. Stocks wise, recent weakness on Gamuda, IOI Corp, Malakoff and Westports to lower and stronger support levels should attract investors looking for longer-term upside, while construction related lower liners such as Binapuri, Gadang, MRCB and WCT Holdings should also attract rotational buying interest. Chart 3 Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Monday, November 13, 2017, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
  15. COMPANY UPDATE Monday , November 13, 2017 FBMKLCI: 1,742.28 Sector: Transportation THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM8.47 (+1.5%) Malaysia Airports Holdings Berhad Last Traded: RM8.35 Revising FY17 Passenger Growth to 8.4% Tan Kam Meng, CFA Tel: +603-2167 9605 SELL kmtan@ta.com.my International movement continued double-digit growth in Oct-17 MAHB’s Oct-17 operating data continued to reflect the favourable travel sentiment underpinned by visa relaxation and currency advantage. The international passenger movement surged 13.1% YoY in Oct to 4.0mn passengers (see Figure 4). However, the growth in the domestic segment stuck at a tepid 1.3% at 3.8mn in Oct-17 (see Figure 5). We attribute this to high base effect. All these have resulted in Oct-17 total passenger grew 7.0% YoY, higher than Sep-17’s YoY growth of 3.6%. Figure 1 – MAHB’s passenger rose 7.0% in Oct-17 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 (%) MAHB MK 5014 Main Market 1659.2 13854.3 1.0 9.45/5.91 3324.0 55.6 1.2 Khazanah -33.2 EPF - 11.2 mn 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 - 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% International Domestic 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 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 13.7 12.9 327.1 331.6 254.6 391.1 128.5 84.8 Sell (Maintained) Financial Indicators Net Gearing (%) CFPs (sen) P/CFPS (x) ROE (%) NTA/Share (RM) Price/NTA (x) FY17 18.0 176.4 4.7 3.7 (4.7) nm FY18 12.0 57.5 14.5 3.7 (4.3) nm Source: MAHB & TA Research On cumulative basis, the growth in passenger movement moderated slightly to 9.2% in Oct-17 from 9.4% a month ago. This was higher than our growth projection of 6.7% and management guidance of 6.5%, considering the remaining of 2-month operations, which are expected to be strong for the international segment. According to announcement, the growth in international was mainly contributed by the North East Asia, South Asia and South East Asia sectors. Largest increases in traffic were attributed to sectors including China, India, Indonesia, Thailand, Taiwan, Singapore, Vietnam, Korea and Japan. ISG’s cumulative growth expanded to 4.3% for 10M17 Istanbul Sabiha Gokcen (ISG) airport recorded 6.6% YoY (-6% MoM) growth in passenger movements to 2.8mn passengers. This was driven both the international (+10.3% YoY) and domestic (+4.9%) segments (see Figure 6 & 7). The increase in passenger has contributed to higher cumulative 10M17 growth of 4.3% versus 4.0% last month. We maintain our growth projections of 7.2% for 2017, in line with management guidance. Share Performance (%) Price Change MAHB 1 mth (0.5) 3 mth (2.5) 6 mth 3.2 12 mth 31.5 FBM KLCI (0.7) (1.4) (0.8) 6.6 (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 4
  16. 13-Nov-17 Figure 2 – ISG’s passenger rose 6.6% in Oct-17 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 The operating environment is now clouded with surging crude oil price, which would tend to reduce airline’s income. However, at current crude oil price levels (i.e.<US$100/barrel), we do not think airline companies would start to impose surcharge, which may affect travel sentiment. As such, we believe passenger movement in Malaysia would remain robust in 2018, underpinned by: 1) additional capacity from AirAsia group, and 2) a short term one-off impact of 14th general election in Malaysia. Forecast We raise our FY17-19 earnings projections by 12.9-14.0% after revising FY1719 passenger growth assumptions (see Figure 3). Figure 3: Change in growth forecast International Domestic FY17 Old FY18 FY19 7.0% 6.5% 4.7% 4.3% 5.0% 5.0% FY17 New FY18 FY19 14.0% 3.0% 3.0% 3.0% 5.0% 5.0% Valuation Following the earnings upgrade, we raise our DCF valuation to RM8.47/share (from RM8.10/share) based on unchanged discount rate of 11.7%. MAHB remains expensive at a forward PE of 51x and we believe the market has fully priced in those 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
  17. 13-Nov-17 Figure 4 : Malaysia’s Int. passenger rose 13.1% in Oct-17 mn 4.5 Pass. Movement (LHS) YoY Growth (RHS) 4.0 Figure 5: Malaysia’s Dom passenger rose 1.2% in Oct-17 25.0% mn 5.000 20.0% 4.500 Pass. Movement (LHS) YoY growth (RHS) 30.0% 15.0% 10.0% 3.5 5.0% 0.0% 3.0 20.0% 4.000 10.0% 3.500 0.0% 3.000 -10.0% 2.500 -20.0% '000 2500 Jul-17 Oct-17 Jan-17 Apr-17 Jul-16 Oct-16 Jan-16 Apr-16 Jul-15 Oct-15 Jan-15 Apr-15 Jul-14 Oct-14 Apr-14 20% 1000 10% 500 0% -10% Oct-17 0 Jul-17 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 0 1500 Apr-17 200 30% Jan-17 400 40% 2000 Oct-16 600 YoY growth (RHS) Jul-16 800 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Apr-16 1000 Jan-16 YoY growth (RHS) Oct-15 Pass. Movement (LHS) Pass. Movement (LHS) Jan-15 '000 1200 Figure 7: ISG’s Dom passenger rose 4.9% in Oct-17 Jul-15 Figure 6: ISG’s Int. passenger rose 10.3% in Oct-17 Apr-15 Jul-17 Oct-17 Jan-17 Apr-17 Jul-16 Oct-16 Apr-16 Jan-16 Jul-15 Oct-15 Jan-15 Apr-15 Oct-14 Jul-14 Jan-14 Apr-14 -10.0% Jan-14 -5.0% 2.5 40.0% Source: MAHB & TA Securities Page 3 of 4
  18. 13-Nov-17 Income Statement (RM'mn) Balance Sheet (RM'mn) FYE 31 Dec 2015 2016 2017F 2018F Revenue 3870.2 4172.8 4462.7 4676.8 4995.7 PPE 364.1 381.7 389.7 396.8 403.2 EBITDA 1656.6 1709.9 1968.8 1960.2 2001.7 Intangibles 17,842.4 17,231.0 16,746.6 16,236.7 15,682.9 Dep & Amor (901.7) (852.5) (898.2) (924.9) (969.8) Others 1,208.8 1,086.1 1,101.0 1,117.5 1,135.8 754.9 857.4 1070.6 1035.4 1031.9 Non-current Assets 19,415.3 18,698.8 18,237.3 17,751.0 17,221.8 FYE 31 Dec 2015 EBIT Net Financing Cost 2016 2017F 2018F 2019F 2019F (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 Inventories 117.6 135.2 183.4 192.2 205.3 PBT 23.5 211.9 419.4 386.0 396.2 Trade Recb. 1,140.9 871.6 978.1 999.4 1,081.3 Tax (5.8) (110.2) (92.3) (54.4) (55.9) Others 31.7 11.1 11.1 11.1 11.1 PAT 40.9 70.4 327.1 331.6 340.3 Cash 1,286.7 1,571.9 3,982.0 4,499.1 4,720.6 Core Net Profit 18.5 99.0 327.1 331.6 340.3 Current Assets 2,577.0 2,589.8 5,154.7 5,701.9 6,018.3 16.2 16.3 16.7 Total Assets 21,992.3 21,288.6 23,392.0 23,452.8 23,240.1 1121.9 1.0 2.6 Core EPS (sen) (0.6) EPS growth (%) (106.6) PE (x) nm 1.3 >100 631.7 51.7 51.2 49.9 Share Capital 1,659.2 1,659.2 1,669.2 1,679.2 1,689.2 GDPS (sen) 8.5 10.0 10.0 10.0 12.0 Share Premium 3,455.1 3,455.1 3,455.1 3,455.1 3,455.1 Dividend yield (%) 1.0 1.2 1.2 1.2 1.4 Others 1,277.5 1,259.3 1,259.3 1,259.3 1,259.3 Retained Earnings 2,449.5 2,321.2 2,481.4 2,645.0 2,782.6 Cash Flow (RM'mn) MI FYE 31 Dec 2015 PBT 2017F 2018F 2019F 396.2 Total Equity 2.0 2.0 2.0 8,867.1 9,040.7 9,188.3 183.3 419.4 386.0 852.5 898.2 924.9 969.8 Borrowings 5,500.0 5,386.1 5,386.1 5,386.1 4,386.1 (1576.7) 200.2 2120.1 116.5 123.5 Other 5,427.7 5,439.8 5,439.8 5,439.8 5,439.8 Non-current Liabilities 10,927.7 10,825.9 10,825.9 10,825.9 9,825.9 1306.4 534.8 217.3 335.6 194.7 CFO 677.9 1770.9 3655.0 1763.0 1684.1 Borrowings Capex (50.0) (430.5) (418.4) 0.0 (418.4) 0.0 (418.4) 0.0 398.3 193.6 193.6 193.6 1,000.0 T. Payables and other 1,825.7 1,572.1 3,505.3 3,392.6 3,225.9 Current Liabilites 2,224.0 1,765.8 3,699.0 3,586.2 4,225.9 Total Liabilities 13,151.7 12,591.7 14,524.9 14,412.1 14,051.8 NTA/share (RM) (5.4) (5.1) (4.7) (4.3) (3.8) nm nm nm nm nm 11.1 10.4 7.9 7.7 7.4 2015 2016 2017F 2018F 2019F EBITDA margin (%) 42.8 41.0 44.1 41.9 40.1 Core profit margin (%) 0.5 2.4 7.3 7.1 6.8 ROE (%) 0.2 1.1 3.7 3.7 3.7 ROA (%) 0.1 0.5 1.5 1.4 1.5 (1166.2) 136.6 (1216.2) (293.9) (418.4) (418.4) (418.4) Dividend (116.8) (141.0) (166.9) (167.9) (202.7) Equity raised 1306.0 0.0 10.0 10.0 10.0 Net Borrowing (426.7) 0.0 0.0 0.0 (193.6) P/NTA (x) EV/EBITDAR (x) CFI 2.0 8,696.9 45.9 Others Others (0.8) 8,840.6 902.3 Dep & Amor Changes in WC 2016 Others (1077.8) (1074.3) (669.6) (669.6) (658.0) CFF (315.3) (1215.3) (826.5) (827.5) (1044.3) Ratios Net Increase/(Decrease) in Cash FCFE (853.6) 261.7 2410.1 517.1 221.5 FYE 31 Dec (1360.8) 354.2 2927.1 954.6 821.6 Profitability (0.8) 0.2 1.8 0.6 0.5 FCF/share (RM) Key Assumptions FYE 31 Dec 2015 2016 2017F 2018F 2019F Total Passenger Growth (mn) 83.8 88.8 96.3 99.1 104.1 Aircraft movement ('000) 815.3 811.6 879.7 906.1 933.3 Liquidity Eraman Sales/ pax (RM) 11.7 12.4 13.2 14.0 14.4 Current Ratio (x) 1.2 1.5 1.4 1.6 1.4 226.9 239.5 255.3 272.1 284.3 Quick Ratio (x) 1.1 1.4 1.3 1.5 1.4 Net gearing (x) 0.5 0.5 0.2 0.1 0.1 Interest Coverage (x) 2.2 2.5 2.9 2.9 3.0 Rental - KLIA & KLIA 2 (RM'mn) Leverage 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 Monday, November 13, 2017, the analyst, Tan Kam Meng, 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 4 of 4
  19. RESULTS UPDATE Monday , November 13, 2017 FBMKLCI: 1,742.38 Sector: Power & Utilities THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM21.47 (-0.6%) Petronas Dagangan Berhad Last Traded: RM21.60 Beneficiary of Rising Oil Price Kylie Chan Sze Zan SELL Tel: +603-2167 9601 kyliechan@ta.com.my Review Petronas Dagangan Bhd (Pet Dag)’s 9M17 core net profit of RM793mn (+8% YTD) was above expectations, accounting for 81%/83% of TA/consensus’s full-year forecasts. www.taonline.com.my Share Information Bloomberg Code PETD MK Stock Code 5681 Listing Main Market Share Cap (mn) 994 Market Cap (RMmn) Improved YTD results were attributed to: 1) margin expansion, coupled with possible inventory lag gains as a result of higher overall ASPs (+29%), and 2) increased commercial volumes (+1% YTD). The above was partially offset by: 1) higher costs for professional services (RM38.1mn) for the Retail segment, 2) lower Retail Volumes (-5% YTD), 3) higher opex for transportation (RM13.2mn) at the Commercial segment, and 4) lower income from interest and hospitality. Meanwhile, QoQ improvement (+12% QoQ) was driven by higher sales volume (+7% QoQ) that more than offset lower overall ASPs (-3% QoQ) and increased opex (of RM24.5mn) due to higher staff costs. In particular, the following resulted in 3Q17 expansion:- 1) higher retail MOPS prices that boosted margins (by RM151mn), 2) higher other income of RM4.1mn, which was mainly derived from Mesra stores. Par Value YoY YTD QoQ 18% 19% 18% +29% +24% +35% -3%% ASP -2% -5% +1% 25.70/21.0 12-mth Avg Daily Vol ('000 shrs) 442.0 Estimated Free Float (%) 15.0 Beta 0.5 Major Shareholders (%) Petronas - 69.86 EPF - 3.84 Forecast Revision FY17 Forecast Revision (%) FY18 0.0 0.0 Net Profit (RM mn) 975.7 1,016.1 Consensus 952.8 977.2 TA's / Consensus (%) 102.4 104.0 Previous Rating Sell (Maintained) Scorecard % of FY vs TA 81 Above vs Consensus 83 Above Net Gearing (x) FCFPS (RM) +3% -4% +12% 1.00 52-wk Hi/Lo (RM) Financial Indicators Figure 1: Change in ASP & Volumes - Overall - Retail - Commercial Volumes - Overall - Retail - Commercial 21,460 +7% Pet Dag declared a higher 3rd interim DPS of 20 sen, (3Q16: 14 sen) which brings 9M17 payout to 48 sen (9M16: 40 sen). Impact Maintain earnings forecasts pending an Analyst Briefing today. FY17 FY18 Net Cash Net Cash 1.1 1.0 P/CFPS (x) 19.8 22.7 ROE (%) 17.5 17.5 ROA (%) 9.6 9.8 NTA/Share (RM) 5.6 5.8 Price/NTA (x) 3.9 3.7 Share Performance (%) Price Change PETD FBM KLCI 1 mth (11.0) 3 mth (9.6) -1.4 6 mth (10.0) -1.9 (8.1) 6.6 12 mth -0.7 (12-Mth) Share Price relative to the FBMKLCI Valuation Maintain Sell on Pet Dag with unchanged TP of RM21.47 based on 21x CY18 P/E. This is underpinned by toppish valuations, slowdown in retail network expansion, and prolonged slowdown in E&P activities. Source: Bloomberg Page 1 of 3
  20. 13-Nov-17 Table 1 : Earnings Summary (RMmn) FYE Dec 31 (RM mn) FY15 R evenue EBITDA E B ITDA Ma rg in FY16 FY17E FY18F FY19F 25,171.2 21,786.5 25,401.3 25,269.6 25,127.3 1,397.7 1,609.0 1,608.0 1,678.6 1,683.6 (% ) 5.6 7.4 6.3 6.6 6.7 1,084.6 1,212.3 1,303.6 1,357.6 1,364.9 Net P rofit 784.5 913.1 975.7 1,016.1 1,021.5 Core Net P rofit 774.4 994.8 975.7 1,016.1 1,021.5 77.9 100.1 98.2 102.3 102.8 P reta x P rofit Core E P S (s en) E P S g rowth (% ) 54.5 28.5 (1.9) 4.1 0.5 PER (x) 27.4 23.5 22.0 21.1 21.0 DP S (s en) 60 70 73 76 77 (% ) 2.8 3.2 3.4 3.5 3.6 Div yield Table 3: 9M17 Results Analysis (RMmn) YE 31 Dec (RM mn) R evenue EBITDA Deprecia tion F ina nce Cos ts As s ocia tes EI P reta x P rofit Ta xa tion Minority Interes t R eported Net P rofit Core Net Profit 3Q17 2Q17 QoQ 3Q16 YoY 9M17 9M16 YoY 6,551.5 6,505.3 0.7 5,537.5 18.3 19,743.0 15,779.4 25.1 461.0 405.4 13.7 386.6 19.2 1,266.0 1,159.2 9.2 (86.0) (97.3) (11.6) (89.1) (267.8) (267.4) 0.1 20.3 18.5 9.7 16.0 26.8 54.7 57.4 (4.8) 0.7 1.2 (44.0) 4.3 (84.1) 2.9 7.0 (57.7) (9.6) >-100 13.9 23.6 11.1 (79.8) >-100 29.8 331.7 24.6 1,066.9 24.8 17.1 413.1 318.2 (102.4) (75.6) 35.5 (82.1) (0.8) (1.7) (52.4) (0.9) (3.5) (4.6) 876.3 21.7 (259.0) (221.8) 16.8 (4.0) (2.9) 37.0 304.7 287.5 246.1 255.7 23.8 12.4 248.8 234.9 22.5 22.4 803.9 792.8 651.7 731.5 23.4 Core E P S (s en) 28.9 25.7 12.4 23.6 22.4 79.8 73.6 8.4 DP S (s en) 20.0 14.0 48.0 40.0 14.0 E B ITDA Ma rg in (% ) 7.0% 6.2% 7.0% 6.4 7.3 Core Net Ma rg in 4.4% 3.9% 4.2% 4.0 0.0 8.4 Table 3: 9M17 Segmental Analysis (RMmn) YE 31 Dec (RM mn) 3Q17 2Q17 QoQ 3Q16 YoY 9M17 9M16 YoY R eta il 3,336.8 3,441.2 (3.0) 2,979.8 12.0 10,334.0 8,760.0 18.0 Commercia l 3,209.9 3,059.9 4.9 2,551.9 25.8 9,394.6 7,001.2 34.2 Others Total Revenue 4.8 6,551.5 4.2 6,505.3 16.7 0.7 5.9 5,537.5 (17.7) 18.3 14.4 19,743.0 18.3 15,779.4 (21.3) 25.1 R eta il 257.0 154.4 66.4 165.5 55.3 610.2 422.7 44.4 Commercia l 147.2 155.2 (5.2) 166.0 (11.3) 434.6 451.9 (3.8) Others Total Operating Profit (13.5) 390.7 8.3 318.0 (261.3) 22.9 (1.9) 329.6 >100 18.6 0.0 1,044.8 1.2 875.8 >-100 19.3 R eta il 7.7% 4.5% 4.8% 5.9% 4.8% Commercia l 4.6% 5.1% 6.5% 4.6% 6.5% Operating Margin Page 2 of 3