Bursa Malaysia Daily Market Report - 14 August

Transcription

1.   Monday,14August,2017 For Internal Circulation Only TARESEARCH’S‘DAILYCOMPILEDREPORTS’ News 1. DailyMarketCommentary 2. WeeklyStrategy 3. WeeklyTechnicalOutlook FundamentalReports 1. SerbaDinamikHoldingsBhd:MomentumStillStrong TechnicalReports 1. WeeklyTechnicalStockPicks 2. DailyMoneyFlow ‐ TechnicalStockPicks ‐ FBMKLCI ‐ StocksUnderCoverage ‐ PLANTATIONSector ‐ CONSTRUCTIONSector ‐ PROPERTYSector 3. WeeklyAceMarketStockWatch 4. WeeklySmallCapStockWatch 5. WeeklyStockScreen ForeignTechnicalReports 1. ForeignStockWatch(AUS) 2. ForeignStockWatch(HK) 3. ForeignStockWatch(FSSTI) 4. ForeignStockWatch(US) 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. forTA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR,  MALAYSIA TEL: +603‐20721277 / FAX: +603‐20325048  (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research
2. Daily Note Daily Market Commentary Monday , 14 August 2017 (A Participating Organisation of Bursa Malaysia Securities Bhd) Menara TA One, 22 Jalan P Ramlee, 50250 Kuala Lumpur Tel : 603 - 2072 1277. Fax : 603 - 2032 5048 TA Research e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (11.08.2017) Volume (mil) +/-chg (RMmn) Main Market 1,084.7 245.9 1,773.1 Warrants 205.6 47.3 31.1 ACE Market 338.7 -5.2 88.5 Bond 10.8 -1.4 1.2 ETF 0.1 0.04 0.1 Total 1,639.9 1,894.1 Off Market 20.7 -14.9 27.7 Value +/-chg 375.4 7.8 13.3 -0.5 0.07 -51.8 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP August 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) 10.0 3.0 3.0 2.0 Review & Outlook Up Down 95 577 35 154 14 84 3 8 1 3 148 826 % chg % YTD chg 1,766.96 12,502.44 16,622.68 1,766.00 -10.81 -102.99 -273.67 -10.00 -0.61 -0.82 -1.62 -0.56 7.63 9.03 12.96 7.98 21,858.32 6,256.56 7,309.96 19,729.74 2,319.71 26,883.51 3,279.72 1,561.31 5,766.14 3,208.54 1,842.60 5,693.14 14.31 39.68 -79.98 0.00 -39.76 -560.49 -43.52 -10.33 -59.81 -53.21 -30.00 -67.79 0.07 0.64 -1.08 0.00 -1.69 -2.04 -1.31 -0.66 -1.03 -1.63 -1.60 -1.18 10.60 16.23 2.34 3.22 14.47 22.19 13.85 1.19 8.86 3.38 -6.42 0.48 Top 10 KLCI Movers Based on Mkt Cap. Off Market WZSATU KGB-WA PRESBHD ESAFE Value/ Volume 1.63 0.15 0.26 0.11 1.49 1.16 1.34 @ @ @ @ (RM) 1.03 0.30 1.75 0.40 Counter Mkt Cap. (RM’mn) MAYBANK 102,257 TENAGA 80,358 PBBANK 79,470 SIME 63,996 CIMB 56,160 PCHEM 48,693 AXIATA 44,520 MAXIS 43,191 GENTING 36,607 DIGI 36,387 Chg Vol. (RM) (mn) -0.09 10.81 -0.02 7.14 -0.02 4.96 -0.01 5.27 -0.01 7.78 -0.09 1.59 -0.08 6.83 -0.07 2.69 -0.04 3.48 -0.11 3.09 Important Dates AMEDIA - 3:1 Rights Issue - RI of up to 965.6m shares together with up to 321.9m free detachable warrants. 3 rights shares together every 1 existing share held, at an issue price of RM0.05 per rights share, together with 1 warrant for every 3 rights shares subscribed. Application Closed: 16/08/2017. LISTING ON: 29/08/2017. Fresh bearish technical momentum headlined by a daily stochastics sell signal implies further weakness ahead for the FBM KLCI following last Friday's selloff. Downside momentum and cautious undertone on the local market could increase on further sabre rattling from North Korea and the US as they jostle for supremacy in the North Asian geopolitical space. On the index, a confirmed breakdown below the 100-day moving average level at 1,764 may accelerate downward correction to next major support at 1,729, matching a key support in April, while crucial uptrend support is available at the 200-day moving average at 1,715. Immediate overhead resistance will be at 1,783, the upper Bollinger band, followed by the 16 June peak of 1,796. Stock-wise, blue-chip banking and defensive gaming stocks like AMBank, RHBBank, Genting Berhad and Genting Malaysia could suffer further losses due to weak chart patterns reflecting keen profit-taking interest, and similarly oil & gas and construction related counters such as Bumi Armada, Sapura Energy, Gadang and Sunway Construction as investors lean towards reducing market exposure. News Bites • 1Malaysia Development Bhd has remitted the equivalent of USD350mn to International Petroleum Investment Co PJSC part payment of a settlement that was due on July 31, 2017. • Pos Malaysia Bhd is acquiring two second-hand bulk carriers for a combined USD32.9mn, as part of requirements of the contracts awarded by TNB Fuel Services Sdn Bhd. • Bursa Malaysia has clarified that there are no plans to facilitate the listing of dual class shares. • Bumi Armada Bhd has inked a supplemental agreement for additional job scope worth USD134mn (RM576mn) from Russia's LUKOILNizhnevolzhskneft LLC • Sime Darby Bhd, via its subsidiary, Weifang Sime Darby Port Co Ltd has launched its liquid terminal in China on Wednesday, which will see the port expanding its range of services to provide storage and usage of terminal facilities for bulk oil and chemicals. • Reach Energy Bhd has decided to call off its private placement exercise and is likely to gear up as it explores funding avenues to raise some RM180mn. • Sunway Bhd has appointed former minister and Performance Management & Delivery Unit chief, Datuk Seri Idris Jala, as co-chairman of its board today. • Asia Bioenergy Technologies Bhd is planning a rights issue of irredeemable convertible preference shares with warrants to raise up to RM81.43mn, to be mainly used as investments in companies listed on Bursa Securities' Leading Entrepreneur Accelerator Platform. • Trive Property Group Bhd is looking to start manufacturing solar panel products, from only trading solar products. • Serba Dinamik Holdings Bhd's 1H17 core net profit of RM161.5mn (+42.0% YoY) was broadly within ours' but above consensus estimates. • MRCB-Quill Real Estate Investment Trust's realised net income rose 43.3% YoY to RM22.04mn in the 2Q17 on higher realised net income attributable to rental reversions and the recognition of income from Menara Shell. • U. S. consumer prices climbed 1.7% YoY in July, as did core prices, below the Fed's 2% goal for inflation. Exchange Rate USD/MYR 4.2964 0.0041 USD/JPY 109.06 -0.7600 EUR/USD 1.176 0.0036 Commodities Futures Palm Oil (RM/mt) 2,689.00 20.00 Crude Oil ($/Barrel) 48.79 0.28 Gold ($/tr.oz.) 1,291.50 2.70 DISCLAIMER The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD Kaladher Govindan, Head of Research
3. TA Securities Monday , August 14, 2017 FBMKLCI: 1,766.96 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Weekly Strategy Market View, News In Brief: Corporate, Economy, and Share Buybacks THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Kaladher Govindan Market View Tel: +603-2167 9609 kaladher@ta.com.my www.taonline.com.my War Uncertainty Likely to Sustain Selling Pressure After being lifted by regional strength due to the previous Friday’s stronger-than-expected U.S. jobs data in six consecutive trading sessions up to a six-week high, the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FMB KLCI) tumbled last Friday due to jittery investor sentiment sparked by the overnight Wall Street slump triggered by rising geopolitical tensions in North Korea. For the week, the FBM KLCI gave back 7.57 points, or 0.43 percent to end at 1,766.96, as losses on BAT (-RM1.21), and major banking heavyweights HLFG (-40sen), Hong Leong Bank (+20sen) and RHBBank (-20sen) overshadowed gains in CIMB (+18sen) and Public Bank (+9sen). Average daily traded volume and value dipped slightly to 1.69 billion shares and RM1.81 billion, compared with the 1.75 billion shares and RM1.96 billion average respectively the previous week. The market undertone is expected to remain weak until investors are convinced the ongoing war of words between the US and North Korea will not evolve into a nuclear war. A war in Korean Peninsula will not only affect the two nations but also US allies South Korea, Japan and Taiwan. Potential involvement of China and Russia, North Korea’s allies, will make the situation worse, which will affect the global economy. Technology sector will be crippled due to the dominance played by the US allies in the global product supply chain. As such any signs of increased tension may cause higher price volatility in tech stocks, which could be a buying opportunity if one believes the war of words won’t escalate. As the origin of North Korea’s nuclear capability is a common knowledge, this is all about a proxy war game to exert control in the Asia-Pacific region. An editorial in the influential Communist Party-run Global Times hinted that China will remain neutral if North Korea fires missiles at United States territory first, but will come to the hermit kingdom’s aide if the U.S. launch a pre-emptive strike. So, if North Korea walk the talk and attack Guam, market volatility will rise. If China and Russia take a neutral stand and the US’ priority is to protect its own territories than its allies, the Asian superpowers may win the proxy war if the US allies realign themselves. The US is unlikely to engage in a pre-emptive war without the support of other western superpowers, if it thinks China and Russia will come to the aide of North Korea. With the current uncertainty, investors should not worry too much if the forward indicators such as the US building permits and starts that will be released this Wednesday came in stronger-than-expected or if there are any hints in the US Federal Reserve’s July meeting minutes, which will be released the following day, about sooner-than-expected further increase in interest rate and/or the timing of QE tapering. Malaysia’s 2Q17 GDP number will be released this Friday. We forecast a growth of 5.2% versus consensus’s 5.3%. It is expected to be lower than 1Q17’s 5.6% due to moderation in exports and domestic activities (1Q16:4.1%YoY & 2Q16 3.9% YoY). It should be much within expectations. Page 1 of 7
4. TA Securities 14-Aug-17 A Member of the TA Group News In Brief Corporate 1Malaysia Development Bhd (1MDB) has remitted the equivalent of USD350mn to International Petroleum Investment Co PJSC (IPIC) as part payment of a settlement that was due on July 31, 2017. The balance of the original July 31, 2017 payment obligation to IPIC is accordingly now due on Aug 31, 2017. According to 1MDB, “all funds paid to IPIC are from proceeds of the ongoing rationalisation programme.” (StarBiz). Sime Darby Bhd, via its subsidiary, Weifang Sime Darby Port Co Ltd has launched its liquid terminal on Wednesday, which will see the port expanding its range of services to provide storage and usage of terminal facilities for bulk oil and chemicals. The new liquid terminal will be built, managed and operated by Weifang Sime Darby Liquid Terminal Co Ltd (WSDLT), a joint venture company owned in equal parts by Sime Darby Overseas (HK) Ltd and Dragon Crown Group Holdings Ltd. According to the group, the launch of the terminals is timely to capture the growing market for crude and refined oil, as well as chemicals in China (The Edge). Reach Energy Bhd has decided to call off its private placement exercise and is likely to gear up as it explores funding avenues to raise some RM180mn. The funding of RM180mn is largely to pay the dissenting shareholders who did not approve of it acquiring the Kazakhstan oil field (StarBiz). Sunway Bhd has appointed former minister and Performance Management & Delivery Unit (Pemandu) chief, Datuk Seri Idris Jala, as co-chairman of its board today. Idris, who is also adviser to the Prime Minister in the National Transformation Programme, is now a new independent and non-executive director of the company (Bernama). Serba Dinamik Holdings Bhd's net profit rose 7.18% to RM82.88mn from RM77.33mn in 1QFY17. This came on the back of a 6.09% increase in revenue to RM649.7mn as compared to RM612.4mn in the immediate preceding quarter ended March 31, 2017. The operation and maintenance (O&M) segment made a contribution of RM538.5mn or 82.9% to total revenue. Malaysia, Qatar and Bahrain were the biggest country contributors to this segment, which recorded operating profit of RM95.8mn (StarBiz). Pos Malaysia Bhd is acquiring two second-hand bulk carriers for a combined USD32.9mn, as part of requirements of the contracts awarded by TNB Fuel Services Sdn Bhd (TNBF). The vessels will be delivered in December this year. Pos Malaysia, was awarded two 10year contracts by TNBF to transport coal from various countries into ports in Malaysia. These contracts' value cumulatively amount to USD194mn for the whole 10-year period. Pos Malaysia is currently using chartered vessels to transport the coal prior to the acquisition of the two used vessels (The Edge). Bursa Malaysia has clarified that there are no plans to facilitate the listing of dual class shares. According to the group, there had been some misleading reports of late which had caused confusion on the exchange’s position on the listing of dual class shares (StarBiz). Bumi Armada Bhd has inked a supplemental agreement for additional job scope worth USD134mn (RM576mn) from Russia's LUKOIL-Nizhnevolzhskneft LLC. This extra engineering, procurement, construction and installation scope will involve the laying of subsea pipelines and the undertaking of post-trenching and back-filling works by Bumi Armada's subsea construction assets. The work is to be done on sections of the Filanovsky field in the Russian sector of the Caspian Sea. The works have started and is expected to be completed in the second half of 2018 (Bursa Malaysia). Page 2 of 7
5. TA Securities 14-Aug-17 A Member of the TA Group Asia Bioenergy Technologies Bhd (AsiaBio) is planning a rights issue of irredeemable convertible preference shares (ICPS) with warrants to raise up to RM81.43mn, to be mainly used as investments in companies listed on Bursa Securities' Leading Entrepreneur Accelerator Platform (LEAP Market). The exercise will involve the issuance of up to 1.16bn new ICPS and up to 116.32mn free detachable warrants (Warrants B), on the basis of 10 ICPS together with one free Warrant B for every five existing shares held by the entitled shareholders. The issue price of the ICPS and the entitlement date will be decided later after obtaining all approvals for the exercise (Bursa Malaysia). Samchem Holdings Bhd has today acquired the remaining 30% stake in subsidiary Samchemsphere Export Sdn Bhd (SESB) for RM4.19mn. SESB is principally involved in the export of intermediate and specialty chemicals, according to Samchem's Bursa Malaysia filing. It bought the equity from SESB director Dennis Ho Chin Chye. No reason was given for the move. The acquisition makes SESB, in which Samchem's founder and executive chairman Ng Thin Poh is also a director, a wholly-owned unit of the group (The Edge). MRCB-Quill Real Estate Investment Trust's (MQREIT) realised net income rose 43.3% to RM22.04mn in the second quarter ended June 30, 2017 (2QFY17) from RM15.39mn a year ago, on higher realised net income attributable to rental reversions from several properties and the recognition of income from Menara Shell here (Bernama). Green energy storage solutions provider Trive Property Group Bhd is looking to start manufacturing solar panel products, from only trading solar products. The group expressed his confidence in Trive Property being able to form a joint venture company with China's Fortunate Solar Technology Ltd. The group has been searching for a ready-built factory in either Port Klang or Johor Baru and is expected to purchase the factory by 1QCY18 (The Edge). Page 3 of 7
6. TA Securities 14-Aug-17 A Member of the TA Group News In Brief Economy Asia Malaysian Firms Generate Potential Sales of RM126mn at Semicon West Trade Fair Malaysian firms generated RM126mn worth of potential sales at the Semicon West trade fair , said Malaysia External Trade Development Corp (MATRADE). In a statement, Malaysian-made semiconductor products were well-received at the fair, which was held from July 11-13, 2017 in San Francisco, US. It stated that six companies were involved in the trade fair, showcasing their products and services to counterparts from among others, the US, Canada, UK, France, Germany, Italy and the Netherlands. MATRADE said the event showcased products, namely, cables and Busbars, communication engineering, computer and communication technology, data communications, electrical components and accessories and electronic engineering. It added that the top Malaysian products and services sourced at the event were original equipment manufacturer contract manufacturing services, design and assembly, precision tooling and fabrication of parts and components. (Bernama) China's July Fiscal Spending Pace Slows, but Revenues Rise China's fiscal spending rose at a slower pace in July due mainly to larger expenditure earlier, but a government-led infrastructure push has kept spending brisk this year. Fiscal spending in July rose 5.4% from a year earlier, while revenue increased 11.1%, the Ministry of Finance said in a statement on its website. The government attributed the slowdown in July spending mainly to significant expenditure earlier. Government spending in the first seven months of the year rose 14.5% on year, while revenues increased 10%. Governmentled stimulus has been a major driver of economic growth over the past years in the world's second-largest economy, but the pump-priming has also been accompanied by runaway credit growth and created a mountain of debt. But the government has kept its budget deficit at 3% of gross domestic product (GDP) for 2017, the same as last year, and pledged to clamp down on risks associated with local government debt. The Chinese economy has defied expectations for a slowdown and expanded at a solid pace in the first half supported by construction projects, though the broad consensus is for growth to cool slightly in the coming quarters, as the authorities continue to crack down on financial risks. Separately, China's overall vehicles sales grew 6.2% in July, from a year earlier to 1.97 million vehicles, showing the world's largest auto market continues to rebound from the weakness it saw in April and May, the China Association of Automobile Manufacturers (CAAM) said. In the first seven months of the year, sales grew 4.1% from the same period last year to 15.3 million vehicles, the association said at a briefing in Beijing. (The Edge Market) Singapore's Services Growth Picks up Pace Singapore's services sector showed signs of improvement in the Q2, while manufacturing continues to be the star performer, although growth came at a slower pace, according to the latest data released by the Ministry of Trade and Industry. The services sector expanded by 2.4% in the Q2 compared to a year ago. This was faster than the 1.4% seen in Q1, and growth of 1.0% in the Q4 2016. Manufacturing, which accounts for a fifth of Singapore's gross domestic product, grew by 8.1% YoY. It had previously clocked 8.5% growth in Q1 and 11.5% in Q4 2016. Growth during the quarter was mainly driven by the electronics and precision engineering clusters, which expanded on the back of strong global demand for semiconductors and semiconductor-related equipment. On the other hand, the biomedical manufacturing, general manufacturing and transport engineering clusters saw a decline in output. The construction sector contracted by 5.7%YoY, extending the 6.3% decline in the previous quarter, due to a fall in both private sector and public sector construction output. QoQ, seasonally adjusted basis, services grew by 3.3% from Q1, a reversal of the 3% contraction seen in the previous period. The manufacturing sector expanded by 2.9%, accelerating from the 0.3% growth in the previous quarter. As for construction, the sector rebounded from the 15% contraction in the preceding quarter to post growth of 4.9% in the Q2. Page 4 of 7
7. TA Securities 14-Aug-17 A Member of the TA Group Other news in Singapore : • MTI narrowed its GDP forecast for this year to 2% to 3%, from an earlier estimate of 1% to 3%. The better outlook also prompted the Monetary Authority of Singapore (MAS) to keep its monetary policy stance, which the central banks said remains appropriate. • Retail sales in Singapore rose a stronger-than-expected 1.9% in June from a year ago, despite a 5.6% drop in auto sales, as most other categories enjoyed growth. June's performance was also stronger than the 0.8% increase in retail takings in May, revised down from a 0.9% rise. Excluding motor vehicles, retail sales in June grew 4% YoY, according to Department of Statistics data released (The Business Times/ The Straits Times) Australia's Central Bank Governor Signals Steady Rates for a While Yet Australia's central bank aims to keep interest rates at record lows for a while yet, governor Philip Lowe said, with any tightening "quite some time away" and likely to be gradual as households try to whittle down a mountain of debt. The Reserve Bank of Australia (RBA) has left interest rates at an all-time low 1.50%, after last easing in August 2016, as it balances lukewarm inflation with skyrocketing household debt. Futures market implies steady rates until early 2018, with a hike fully priced in only by next Christmas. But the tightening cycle, when it begins, will be slow as policymakers are aware of the impact higher interest rates would have on households saddled with a mountain of debt, Lowe said. The household debt-to-income ratio is at a record high 190% and rising faster than incomes. Annual wage growth is inching at its slowest ever pace of 1.90%. Together, that has weighed on consumer confidence and spending in recent months. Lowe said he would like to see annual wages growth of 3.5% or more as economic growth picks up. The RBA has said it is confident that the A$1.7tn economy will accelerate over the next two years to around 3%. Lowe also expects inflation to edge higher over time, as utility prices in the country are surging — another reason households are fretting over their finances. (The Edge Market) India Finance Ministry Flags Risks to Growth, Inflation to Undershoot The Indian government called for more monetary easing as it flagged risks to economic growth and budget targets, citing a series of deflationary impulses weighing on Asia's thirdlargest economy. In its mid-year economic survey, Chief Economic Adviser Arvind Subramanian said there were downside risks to the official growth forecast of 6.75% to 7.5% for the fiscal year to March 2018. Growth slowed to 6.1% in the March quarter, hitting its lowest in more than two years following a radical monetary reform that purged highvalue banknotes from circulation. The subsequent launch of a national Goods and Services Tax (GST) has caused chaos on the ground as ambiguous rules have left firms confused on how to price their products. In a sign of things to come, business surveys showed both services and manufacturing contracting at their fastest rate in years in July, the month that the GST was launched. Disinflationary pressures allowed the Reserve Bank of India last week to cut its main policy rate - the first easing by an Asian central bank this year - by 25 basis points to 6%, the lowest since November 2010. Yet the report by Subramanian, a top adviser to Finance Minister Arun Jaitley, saw "considerable" scope for further easing as the policy repo rate was 25-75 basis above the neutral rate. The survey also said inflation was expected to remain below the Reserve Bank of India's medium-term target of 4% through to the end of March 2018. Retail inflation cooled to 1.54%, its lowest level in more than five years. (Reuters) Page 5 of 7
8. TA Securities 14-Aug-17 A Member of the TA Group United States U .S. Consumer Prices Rose Slightly in July U. S. inflation was subdued in July, held down in part by weakness in hotel rates, which perpetuates a soft trend that is puzzling Federal Reserve officials who expected an improving economy to be pushing consumer prices up at a faster rate. The consumer-price index, which measures what Americans pay for everything from ice cream to doctor visits, increased 0.1% in July from the prior month, the Labor Department said. Excluding the often-volatile categories of food and energy, so-called core prices also rose 0.1%. From a year earlier, overall consumer prices climbed 1.7%, as did core prices, below the Fed’s 2% goal for inflation. Five months of 0.1% growth or lower in core prices marks “a remarkable run in the context of an economy that is clocking above-trend growth and a labour market that has moved well into tight territory. The cost to consumers of lodging away from home, which includes hotels and housing at schools, fell 4.2% in July from a month earlier, the biggest one-month decline since records began in 1997. Over the past year, these prices have declined 2.4%. Analysts say this could be an anomaly, and STR Inc. figures on hotel rates in the U.S. illustrate growth in the average price per room of more than 2% in the first half of 2017 from the same period a year earlier. (The Wall Street Journal) Europe and United Kingdom German Inflation Accelerates as Estimated in July Germany's consumer price inflation accelerated to a three-month high in July, final data from Destatis showed. Inflation, based on consumer prices, grew 1.7% annually, slightly faster than the 1.6% increase registered in June. This was the fastest since April and came in line with the flash estimate published on July 28. Excluding food and energy prices, the inflation rate came in at 1.7%. Food prices rose 2.7%, slower than the 2.8% rise in June. Meanwhile, energy prices climbed 0.9% after stabilizing a month ago. On a monthly basis, inflation doubled to 0.4%, as estimated, from 0.2% in June. Prices have increased for the second straight month. At the same time, the harmonized index of consumer prices climbed again by 1.5% annually. The index advanced 0.4% on month. Both monthly and annual figures matched the preliminary estimate. Separately, Germany's wholesale price inflation eased to an eight-month low in July, data from Destatis showed. Wholesale prices advanced 2.2% on a yearly basis in July, slower than the 2.5% increase in June. This was the weakest growth since November 2016, when prices gained 0.8%. Month-on-month, wholesale prices fell 0.1% after staying flat in June. (RTT News) Page 6 of 7
9. TA Securities 14-Aug-17 A Member of the TA Group Share Buy-Back : 11 August 2017 Company AMPROP DAIBOCI GRANFLO HAIO PECCA SALCON TROP UNIMECH Bought Back Price (RM) Hi/Lo (RM) 25,000 35,600 10,000 11,700 75,000 90,000 123,000 85,000 0.82 2.19/2.14 0.24 4.06/4.03 1.48 0.44/0.43 0.96/0.945 1.05/1.02 0.82/0.80 2.19/2.14 0.24/0.235 4.08/4.01 1.50/1.47 0.44/0.425 0.96/0.94 1.05/1.02 Total Treasury Shares 14,592,800 281,200 6,654,800 9,295,088 472,000 2,900,062 3,888,042 5,485,010 Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 7 of 7
10. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR UMW Share Price (RM) 11-Aug-17 1.94 2.19 5.70 Target Price BETA (RM) EPS (sen) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 2.37 2.28 5.04 0.86 0.56 1.31 10.3 24.1 19.7 15.8 25.3 30.6 18.8 9.1 28.9 12.3 8.7 18.6 6.0 4.1 2.3 8.1 4.1 3.5 2.44 2.70 6.18 -20.5 -18.9 -7.8 1.88 2.08 4.09 3.2 5.3 39.3 -8.9 2.3 35.0 4.80 3.70 5.70 8.00 17.50 11.00 23.60 5.80 11.10 1.25 0.87 1.34 1.44 0.62 0.90 0.79 1.33 0.72 33.6 29.4 43.9 49.6 105.2 71.4 137.2 50.7 40.2 30.5 33.6 48.4 55.2 115.5 80.7 142.4 54.5 39.0 11.3 8.5 10.8 13.7 14.8 13.6 15.0 9.4 25.4 12.4 7.5 9.8 12.3 13.5 12.0 14.5 8.8 26.2 4.2 3.2 3.7 3.0 2.6 5.2 2.7 2.5 3.3 4.2 3.2 3.8 3.3 2.6 5.2 2.8 2.5 3.3 4.49 3.00 5.70 6.87 16.30 9.84 20.76 5.59 10.98 -15.8 -16.3 -17.0 -1.0 -4.3 -1.5 -0.9 -14.5 -7.1 3.60 2.08 3.90 4.49 12.70 7.50 19.40 4.53 8.08 5.0 20.7 21.3 51.4 22.8 29.2 6.1 5.5 26.2 1.6 5.0 9.7 50.8 15.6 18.2 4.4 1.5 17.0 0.34 1.23 5.40 3.39 0.61 1.09 2.15 1.85 5.85 0.45 1.75 6.00 3.50 0.78 0.58 2.26 1.49 6.26 0.62 0.47 1.03 1.07 0.85 1.11 na 0.97 0.16 5.5 15.3 27.9 15.3 4.9 8.3 12.7 11.5 42.0 5.5 14.3 34.6 20.2 5.7 9.6 12.5 11.6 45.7 6.1 8.1 19.4 22.2 12.2 13.1 17.0 16.1 13.9 6.1 8.6 15.6 16.7 10.6 11.3 17.1 16.0 12.8 0.0 2.4 2.2 2.2 4.1 0.9 2.6 1.6 4.3 0.0 2.4 2.2 2.8 4.1 0.9 2.6 1.6 4.3 0.51 1.37 5.52 3.61 0.74 1.39 2.23 2.48 6.15 -34.3 -10.2 -2.2 -6.1 -17.7 -21.6 -3.6 -25.3 -4.9 0.33 0.89 4.65 3.07 0.39 0.41 1.56 1.53 5.57 1.5 39.0 16.1 10.4 57.1 169.1 37.8 20.9 5.0 -23.0 17.1 13.0 5.9 0.0 89.6 26.5 7.6 -0.5 1.33 1.95 1.58 2.00 na 0.43 8.6 11.0 11.8 11.5 15.4 17.8 11.3 17.0 3.0 5.1 4.5 5.1 1.49 2.19 -10.7 -11.0 0.85 1.93 57.4 1.0 52.9 -3.0 14.70 17.98 17.84 19.14 0.48 0.46 74.8 79.6 81.3 84.0 19.7 22.6 18.1 21.4 5.1 4.0 5.5 4.2 15.30 19.10 -3.9 -5.9 13.72 15.56 7.1 15.6 5.6 9.8 1.99 7.10 24.44 1.19 83.98 3.93 1.90 4.93 0.88 2.23 8.62 27.41 1.50 88.66 4.10 2.46 4.32 1.23 0.54 0.32 0.25 0.38 0.37 0.50 0.58 0.26 0.20 6.7 26.4 121.1 6.5 290.1 22.3 27.4 15.7 8.1 7.9 40.6 151.0 6.6 327.7 24.7 27.0 16.7 11.6 29.6 26.9 20.2 18.3 28.9 17.6 6.9 31.4 10.9 25.3 17.5 16.2 18.1 25.6 15.9 7.0 29.6 7.6 2.0 1.4 2.9 5.0 3.3 3.8 3.2 0.9 2.8 2.4 2.1 3.1 5.0 3.3 4.3 4.2 0.9 4.0 3.00 8.85 26.00 1.30 85.20 4.03 2.06 5.00 1.07 -33.7 -19.8 -6.0 -8.3 -1.4 -2.5 -7.8 -1.4 -17.8 1.98 7.10 22.44 1.13 74.12 2.26 1.50 4.14 0.78 0.5 0.0 8.9 5.2 13.3 73.9 26.7 19.0 12.8 -22.6 -3.1 4.1 3.4 7.4 54.8 9.8 13.8 10.7 43.00 52.08 0.98 198.6 187.4 21.7 22.9 4.7 4.7 51.50 -16.5 40.61 5.9 -2.7 9.66 5.81 11.51 6.54 1.40 1.33 49.3 25.7 54.7 27.7 19.6 22.6 17.6 20.9 0.5 1.4 0.6 1.5 10.00 6.38 -3.4 -8.9 7.50 4.22 28.8 37.6 21.6 28.6 2.30 0.12 3.34 0.13 0.76 1.17 19.3 0.4 23.2 0.4 11.9 31.7 9.9 31.9 6.1 0.0 7.0 0.0 3.42 0.16 -32.7 -28.1 2.28 0.05 0.9 130.0 -22.3 130.0 5.91 4.16 6.39 4.70 0.75 0.49 9.5 13.3 14.9 16.4 62.0 31.3 39.6 25.3 0.6 1.5 0.6 1.8 6.73 4.37 -12.2 -4.8 5.54 3.85 6.7 8.1 -6.9 -0.5 6.72 7.10 1.84 5.65 1.41 6.87 7.60 1.80 6.05 2.20 0.51 0.02 0.11 -0.37 0.17 19.5 35.8 12.4 26.4 3.7 24.6 40.0 15.1 29.8 5.5 34.5 19.8 14.9 21.4 37.8 27.3 17.8 12.2 18.9 25.7 1.3 2.5 2.0 2.4 0.7 1.6 2.8 2.4 2.7 1.0 7.40 7.36 2.38 5.94 2.62 -9.2 -3.5 -22.7 -4.9 -46.2 4.23 5.62 1.83 4.20 1.39 58.9 26.3 0.5 34.5 1.4 39.1 7.7 -12.8 5.6 -40.3 INDUSTRIAL SCIENTX SKPRES 8.47 1.35 9.28 1.75 0.41 0.38 55.1 8.6 66.6 10.6 15.4 15.7 12.7 12.7 2.1 3.1 2.4 3.8 8.99 1.45 -5.8 -6.9 6.01 1.15 40.9 17.4 26.4 4.7 MEDIA ASTRO MEDIA PRIMA STAR 2.67 0.77 2.25 3.50 0.60 1.40 1.13 0.60 0.63 13.2 1.7 7.1 14.5 2.8 6.5 20.2 44.8 31.7 18.5 27.1 34.7 4.7 1.8 8.0 4.9 3.0 8.0 3.01 1.46 2.65 -11.3 -47.6 -15.1 2.47 0.76 2.19 8.1 0.7 2.7 2.7 -33.5 0.4 -34.8 -33.2 -40.1 -7.7 -7.4 -10.0 -30.5 -17.0 -73.1 0.22 4.14 0.68 7.03 0.44 6.48 1.33 1.51 0.28 109.3 5.3 2.2 3.7 44.8 8.3 9.8 26.5 0.0 76.5 -32.9 -24.0 -0.8 41.6 0.6 -9.9 27.3 -68.0 -27.3 1.30 10.8 -15.3 BANKS & FINANCIAL SERVICES AFG 3.78 AFFIN 2.51 AMBANK 4.73 CIMB 6.80 HLBANK 15.60 MAYBANK 9.69 PBBANK 20.58 4.78 RHBBANK BURSA 10.20 CONSTRUCTION BPURI GADANG GAMUDA IJM PESONA SENDAI SUNCON WCT LITRAK Building Materials CHINHIN WTHORSE CONSUMER Brewery CARLSBG HEIM Retail AEON AMWAY F&N HUPSENG NESTLE PADINI POHUAT QL SIGN Tobacco BAT GAMING Casino GENTING GENM NFO BJTOTO LUSTER HEALTHCARE Hospitals IHH KPJ Rubber Gloves HARTA KOSSAN SUPERMX TOPGLOV KAREX OIL & GAS DNEX 0.45 0.76 0.94 3.7 4.6 12.3 9.9 2.2 2.2 0.69 LCTITAN 4.36 6.88 na 43.1 64.9 10.1 6.7 3.9 7.1 6.53 MHB 0.70 0.78 1.97 -2.0 -0.5 na na 0.0 0.0 1.16 MISC 7.29 6.56 0.87 56.3 46.9 13.0 15.6 4.1 4.1 7.90 PANTECH 0.63 0.69 1.21 4.0 6.1 15.8 10.3 2.9 4.4 0.68 PCHEM 7.02 7.62 1.07 34.7 39.3 20.2 17.9 2.7 2.7 7.80 SENERGY 1.46 1.71 2.50 6.6 4.0 22.1 36.8 0.7 0.7 2.10 SERBADK 1.91 2.77 na 22.1 25.2 8.6 7.6 3.7 4.0 2.30 UMWOG 0.28 0.80 2.00 -12.0 -3.5 na na 0.0 0.0 1.04 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.44 1.55 1.51 10.9 11.5 13.2 12.5 0.0 0.0 1.98
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price (RM) PLANTATIONS FGV IJMPLNT IOICORP KLK SIME UMCCA 1.53 3.02 4.44 24.74 9.41 6.32 Target Price BETA (RM) 1.55 3.88 4.15 26.19 10.02 7.52 1.89 0.43 1.15 0.85 1.26 0.34 EPS (sen) PER (X) FY17 FY18 FY17 FY18 4.2 12.3 18.8 111.7 34.0 37.5 8.5 15.7 21.1 119.1 37.5 34.5 36.3 24.6 23.7 22.1 27.7 16.8 18.0 19.2 21.1 20.8 25.1 18.3 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg 3.3 2.3 2.3 2.2 2.7 3.6 3.3 2.6 2.7 2.4 3.3 2.7 2.52 3.70 4.81 25.50 9.70 6.55 -39.3 -18.4 -7.7 -3.0 -3.0 -3.5 1.42 2.95 4.30 23.00 7.56 5.50 PROPERTY GLOMAC 0.68 0.70 0.39 1.6 6.3 42.4 10.7 4.0 4.0 0.83 -18.2 0.61 HUAYANG 0.81 0.96 0.56 17.3 10.2 4.7 7.9 4.9 2.5 1.43 -43.5 0.80 IBRACO 0.90 1.00 0.47 5.2 11.1 17.1 8.0 3.9 4.5 1.05 -14.8 0.76 IOIPG 2.09 2.25 0.89 17.4 17.4 12.0 12.0 3.3 3.6 2.46 -15.0 1.85 MAHSING 1.55 1.76 0.76 14.3 13.5 10.8 11.5 4.2 4.2 1.70 -8.8 1.34 SNTORIA 0.82 0.98 0.20 6.2 10.3 13.2 7.9 1.2 1.2 1.00 -18.5 0.69 SPB 4.88 5.98 0.55 25.6 22.8 12.7 14.3 2.5 2.5 5.19 -6.0 4.32 SPSETIA 3.25 4.10 0.69 11.6 12.5 35.6 33.2 4.3 4.3 4.50 -27.8 3.10 SUNWAY 4.13 4.16 0.46 15.5 15.6 17.1 17.0 1.2 1.2 4.40 -6.1 2.87 Note: SUNWAY proposed bonus issue of shares and warrants. Ex-Target price RM1.69. For more details please refer to 15.06.17 report. REIT SUNREIT 1.74 1.87 0.48 9.2 10.0 18.8 17.4 5.3 5.7 1.84 -5.4 1.63 CMMT 1.48 1.72 0.53 8.1 8.6 18.3 17.2 5.7 6.0 1.72 -14.0 1.45 % Chg YTD 7.7 2.4 3.3 7.6 24.5 14.8 -1.3 -11.2 0.9 3.1 16.2 5.8 10.7 1.2 18.5 13.1 15.7 18.1 12.9 4.8 43.8 -2.9 -28.3 -10.5 7.2 8.4 1.9 10.4 3.8 37.7 6.7 2.1 1.2 -3.3 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.00 23.90 18.78 14.20 1.41 1.13 21.47 19.60 17.38 1.45 0.70 0.73 0.78 0.92 0.51 7.1 98.5 88.2 131.9 8.2 6.4 102.4 101.3 130.6 10.6 14.1 24.3 21.3 10.8 17.1 15.6 23.3 18.5 10.9 13.3 7.0 3.1 3.3 3.1 5.0 7.0 3.2 3.8 3.2 3.5 1.80 25.70 22.50 14.90 1.64 -44.4 -7.0 -16.5 -4.7 -14.0 1.00 22.96 18.10 13.00 1.38 0.0 4.1 3.8 9.2 2.2 -27.0 0.4 -11.8 2.2 -5.4 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 4.80 4.68 5.70 6.39 5.20 4.90 5.85 7.50 1.39 0.99 0.75 0.65 14.5 20.0 24.5 21.4 15.9 20.4 24.7 22.3 33.0 23.4 23.3 29.8 30.1 22.9 23.1 28.7 1.5 4.3 3.5 3.0 1.7 4.4 3.5 3.1 5.99 5.19 6.60 6.90 -19.9 -9.8 -13.6 -7.4 4.11 4.63 5.48 5.81 16.8 1.1 4.0 10.0 1.7 -3.1 -4.7 7.4 TECHNOLOGY Semiconductor & Electronics IRIS 0.16 INARI 2.35 MPI 12.76 UNISEM 3.67 0.28 2.30 15.60 4.30 1.22 0.72 0.15 0.50 -2.3 10.2 94.2 26.9 -0.3 na 12.3 23.0 112.9 13.6 32.1 13.6 na 19.2 11.3 11.4 0.0 3.4 2.1 3.3 0.0 2.1 2.1 3.3 0.24 2.58 14.28 4.25 -33.3 -8.9 -10.6 -13.6 0.10 1.50 7.20 2.27 60.0 57.0 77.2 61.7 45.5 41.6 72.2 55.5 3.24 8.56 3.34 8.10 0.96 1.41 37.6 17.2 37.1 17.5 8.6 49.7 8.7 48.9 1.2 1.2 1.5 1.2 3.59 9.45 -9.7 -9.4 2.16 5.91 50.0 44.8 41.5 41.3 1.69 3.59 2.05 4.05 0.67 0.72 12.4 17.1 19.7 15.1 13.7 20.9 8.6 23.7 2.5 3.6 4.1 3.2 1.87 4.59 -9.6 -21.8 1.47 3.58 15.0 0.3 6.3 -16.5 TRANSPORTATION Airlines AIRASIA AIRPORT Freight & Tankers TNLOGIS WPRTS SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price (S$) BANKS & FINANCIAL SERVICES DBS 20.80 OCBC 11.20 UOB 24.20 PLANTATIONS WILMAR IFAR 3.20 0.46 Target Price Beta (S$) EPS (cent) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52week 52week FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 23.30 12.00 25.40 1.22 1.16 1.07 172.9 87.7 192.9 189.2 12.0 92.4 12.8 206.5 12.5 11.0 12.1 11.7 2.9 5.7 2.9 2.9 6.7 2.9 22.3 11.5 24.6 -6.5 -2.5 -1.6 14.72 8.84 17.51 41.3 34.5 38.2 20.0 25.6 18.6 3.72 0.53 0.93 1.12 28.9 4.9 31.1 5.2 10.3 8.9 2.5 2.6 2.8 2.8 4.0 0.6 -20.0 -22.7 3.03 0.44 5.6 4.5 -10.9 -12.4 11.1 9.5 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. T e c h n i c a l TA Securities V i e w Monday , August 14, 2017 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Weekly Technical Outlook FBM KLCI: 1,766.96 (-7.57, -0.43%) THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Chartist : Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my Further Correction Likely on Weak Technical Picture After being lifted by regional strength due to the previous Friday’s stronger-than-expected U.S. jobs data in six consecutive trading sessions up to a six-week high, the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FMB KLCI) tumbled last Friday due to jittery investor sentiment sparked by the overnight Wall Street slump triggered by rising geopolitical tensions in North Korea. For the week, the FBM KLCI gave back 7.57 points, or 0.43 percent to end at 1,766.96, as losses on BAT (-RM1.21), and major banking heavyweights HLFG (-40sen), Hong Leong Bank (+20sen) and RHBBank (-20sen) overshadowed gains in CIMB (+18sen) and Public Bank (+9sen). Average daily traded volume and value dipped slightly to 1.69 billion shares and RM1.81 billion, compared with the 1.75 billion shares and RM1.96 billion average respectively the previous week. Blue chips rose on Monday, pushing the benchmark index up to a six-week high, lifted by regional strength encouraged by last Friday’s stronger-than-expected U.S. jobs data. The KLCI gained 3.38 points to close at 1,777.91, off an early low of 1,771.90 and high of 1,778.48, but losers beat gainers 516 to 363 on improved turnover of 1.94bn shares worth RM1.67bn. The local benchmark managed to end higher the next day despite widespread profit-taking on the broader market, lifted by gains in key banking heavyweights Maybank and CIMB. The KLCI added 3.74 points to settle at 1,781.65, off a low of 1,775.78 and high of 1,782.63, but losers trashed gainers 602 to 269 on active turnover of 2.09bn worth RM2.25bn. Stocks closed lower Wednesday after rising for six consecutive trading sessions, as profittaking and regional weakness sparked by mounting geopolitical tensions over North Korea dampened sentiment. The KLCI shed 3.71 points to end at 1,777.94, after swinging within a tight range bordering early high of 1,779.77 and low of 1,775.99, as losers beat gainers 452 to 317 on slower trade totaling 1.42bn shares worth RM1.73bn. The broader market extended profit-taking consolidation the following day, as overhanging concerns over the escalating geopolitical hotspot in North Korea weighed down trading sentiment. The KLCI closed flat at 1,777.77 after oscillating between high of 1,778.18 and low of 1,773.64, as losers swamped gainers 624 to 259 on more cautious turnover totaling 1.35bn worth RM1.50bn. The market fell into correction mode ahead of the weekend, sparked by increased nervousness amongst investors following the overnight Wall Street slump triggered by rising geopolitical tensions in the North Korean region. The index tumbled 10.81 points Friday to end at the day’s low of 1,766.96, off an early high of 1,775.34, as losers trumped gainers 826 to 148 on moderate trade totaling 1.64bn shares worth RM1.89bn. The trading range for the blue-chip benchmark index last week was 15.67 points, compared to the 14.5-point range the previous week, as key index heavyweights slumped from a sixweek high after last Fridays sell-off. For the week, the FBM-EMAS Index lost 117.43 points or 0.93 percent to close at 12,502.44, while the FBM-Small Cap Index plunged 593.48 points, or 3.45 percent to 16,622.68, as small cap stocks tumbled on heavy retail profit-taking activities. Page 1 of 3
13. TA Securities 14-Aug-17 A Member of the TA Group Last Friday ’s steep correction triggered a sell signal on the daily slow stochastics indicator for the FBM KLCI from very overbought territory, implying further profit-taking correction potential this week, while the weekly indicator’s signal line dipped back down to reinforce the bearish daily indicator. The 14-day Relative Strength Index (RSI) indicator also slumped to a bearish reading of 47.82 after last Friday’s correction, while the 14-week RSI dipped to a weaker reading at 58.17. Chart 1 Meanwhile, the daily Moving Average Convergence Divergence’s (MACD) signal line also hooked back down to suggest bearish potential, which is reinforced by the weak trend reading on the weekly MACD indicator (Chart 2). The +DI and -DI lines on the 14-day Directional Movement Index (DMI) trend indicator are poised to trigger a sell signal on further weakness, with the ADX line rising to imply an emerging down-trending market. Chart 2 Page 2 of 3
14. TA Securities 14-Aug-17 A Member of the TA Group Conclusion Fresh bearish technical momentum headlined by a daily stochastics sell signal implies further weakness ahead for the FBM KLCI following last Friday ’s selloff. Downside momentum and cautious undertone on the local market could increase on further sabre rattling from North Korea and the US as they jostle for supremacy in the North Asian geopolitical space. On the index, a confirmed breakdown below the 100-day moving average level at 1,764 may accelerate downward correction to next major support at 1,729, matching a key support in April, while crucial uptrend support is available at the 200-day moving average at 1,715. Immediate overhead resistance will be at 1,783, the upper Bollinger band, followed by the 16 June peak of 1,796. Stock-wise, blue-chip banking and defensive gaming stocks like AMBank, RHBBank, Genting Berhad and Genting Malaysia could suffer further losses due to weak chart patterns reflecting keen profit-taking interest, and similarly oil & gas and construction related counters such as Bumi Armada, Sapura Energy, Gadang and Sunway Construction as investors lean towards reducing market exposure. Chart 3 Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 3 of 3
15. RESULTS UPDATE TA Securities Monday , August 14, 2017 FBMKLCI: 1,766.96 Sector: Oil & Gas A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Serba Dinamik Holdings Bhd TP: RM2.77 (+45.0%) Last Traded: RM1.91 Momentum Still Strong Buy THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Abel Goon Tel: +603 2072 1277 ext. 1641 abelgoon@ta.com.my Review Serba Dinamik (Serba) registered 1H17 core net profit of RM161.5mn (+42.0% YoY), which was broadly within ours’ but above consensus estimates at 55% and 58% respectively. The better results were a result of massive growth in operating profit from both the O&M (+32.0% YoY) and EPCC (+53.5% YoY) segments. 2Q17 revenue grew 6.1% QoQ on the back of stronger contribution from the EPCC segment due to 1) operations in UAE, 2) construction of hydropower plant in Kota Marudu, Sabah and 3) construction of water treatment plant in Terengganu. On the other hand, revenue from O&M dipped slightly by 3.0% QoQ. Operating margins were maintained at 17%-18% for O&M activities but expanded 1.7ppt for EPCC works. We note that actual profitability margins are slightly higher than our estimates. However, we prefer to maintain our conservative stance on Serba’s margins at this juncture given the possibility of Serba offering discounts on the back of lower oil prices. We note that quarterly finance costs decreased by 16.3% QoQ whilst YTD finance costs decreased by 27.2% YoY. This was a result of Serba utilising IPO proceeds to repay bank borrowings totalling circa RM60mn. Serba derived 61.1% of its revenue from the Middle East region with the biggest contributor being Qatar despite the recent Qatar-gulf crisis. That being said, the full impact of the Qatar-gulf crisis will only be seen in 3Q as the boycott only began in early June. In our opinion, Serba will benefit from the Qatar-gulf crisis as companies from the Gulf states are prohibited from working in Qatar and vice versa. This will reduce the number of competitors bidding for the various projects in the region. However, we do not discount a fall in revenue from the Middle East as geopolitical tensions in the region remain strained. Note that Serba derives circa 75% of its revenue from the overseas market. The overseas market typically has better margins with a longer contract period. Serba declared first interim single-tier dividend of 1.5sen for 2Q17. This translates to 24% dividend payout. We believe dividend upside is possible given Serba’s dividend payout policy of 30% net earnings. Impact www.taonline.com.my Share Information Bloomberg Code SDH MK Stock Code 5279 Listing Main Market Share Cap (mn) 1,335.0 Market Cap (RMmn) 2,549.9 Par Value 0.50 52-wk Hi/Lo (RM) 2.30/1.51 12-mth Avg Daily Vol ('000 shrs) 6,006 Estimated Free Float (%) 31.5 Beta n.a. Major Shareholders (%) Mohd Abdul Karim - 26.2 Abdul Kadier Sahib - 20.8 Awang Daud - 13.2 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 0.0 0.0 294.9 336.4 277.9 321.6 106 105 Buy (Maintain) Financial Indicators Net Debt / Equity (x) CFPS (sen) Price / CFPS (x) ROA (%) NTA/Share (RM) Price/NTA (x) FY17 0.1 0.2 11.6 11.9 1.1 1.8 FY18 Net cash 0.3 6.2 12.4 1.2 1.5 % of FY 55 58 Within Above SDH (1.0) (8.2) 13.7 n.a. FBM KLCI 0.7 (0.5) 3.4 4.9 Scorecard vs TA vs Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBM KLCI Maintain earnings forecast. Outlook We expect Serba’s business to continue expanding in the Middle East. Besides that, we believe it is only a matter of time before it penetrates the African continent given its competitive pricing model. Note that both regions are huge oil and gas producers. Furthermore, we are sanguine on Serba’s strategy to acquire associates stake in various assets, which would provide recurring income. Additionally, this would boost its O&M and EPCC orderbooks as the Page 1 of 3 Source: Bloomberg
16. TA Securities 14-Aug-17 A Member of the TA Group respective contracts for the assets would likely be awarded to Serba . Valuation We maintain our TP of RM2.77 based on 11x CY18 PER. Maintain Buy. Heightened geopolitical tension in the Middle East remains a key risk to the Group. Figure 1: Quarterly Results Analysis FYE Dec (RM mn) 2QFY17 1QFY17 1HFY17 1HFY16 % YoY 649.7 612.4 6.1 1,262.1 911.7 38.4 EBIT 96.4 Net Fina nce Cos t (7.0) 90.0 7.1 186.3 143.2 30.1 (8.3) (16.3) (15.3) (21.0) (27.2) As s ocia te & JV* (1.1) (0.4) >100 (1.5) 0.0 n.a . 0.0 0.0 n.a . 0.0 (0.9) n.a . Pretax 88.3 81.2 8.7 Ta xa tion (5.4) (3.9) 39.9 (9.3) (8.4) 0.3 1.0 (71.9) 1.3 (0.1) Net Profit 83.2 78.3 6.2 161.5 112.8 43.1 Core net profit 83.2 78.3 6.2 161.5 113.7 42.0 43.1 Revenue EI MI % QoQ 169.5 121.3 EPS (s en) 6.2 5.9 6.2 12.1 8.5 DPS (s en) 1.5 0.0 n.a . 1.5 0.0 EBIT ma rgin (%) 14.8 14.7 14.8 15.7 Preta x ma rgi n (%) 13.6 13.3 13.4 13.3 Core net ma rgi n (%) 12.8 12.8 12.8 12.5 Ta x ra te (%) 6.2 4.8 5.5 6.9 39.8 11.6 n.a . n.a . Figure 2: Segmental Results Analysis FYE Dec (RM mn) 2QFY17 1QFY17 % QoQ O&M 538.5 555.0 (3.0) EPCC 110.3 56.5 95.3 1HFY17 1HFY16 % YoY 1,093.4 815.7 34.1 166.7 93.8 77.7 Revenue Others 1.0 1.0 (4.5) 2.0 2.2 (12.1) 649.7 612.4 6.1 1,262.1 911.7 38.4 O&M 95.8 98.0 (2.2) 193.8 146.9 32.0 EPCC 20.1 9.3 >100 29.4 19.2 53.5 0.2 0.2 4.8 0.4 0.5 (15.5) 116.1 107.5 8.0 223.7 166.5 34.3 O&M 17.8% 17.7% 17.7% 18.0% EPCC 18.2% 16.5% 17.6% 20.4% Others 23.1% 21.0% 22.0% 22.9% Total Operating Profit Others Total Operating Margin Page 2 of 3
17. TA Securities 14-Aug-17 A Member of the TA Group Figure 3 : Earnings Summary FYE Dec (RM mn) 2015 Revenue 1,402.9 EBITDA 212.6 EBITDA margin (%) 15.2 Pretax Profit 159.6 Core Net Profit 156.7 Core EPS (sen) 11.7 Core EPS growth (%) 145.3 Core PER DPS Dividend Yield (x) (sen) (%) 16.3 0.0 0.0 2016 2,168.3 352.2 16.2 267.9 245.5 18.4 57.0 10.4 0.0 0.0 2017E 2,560.7 422.0 16.5 321.0 294.9 22.1 19.8 2018F 2,803.7 461.7 16.5 366.2 336.4 25.2 14.1 8.6 7.0 3.7 7.6 7.6 4.0 2019F 3,084.4 507.8 16.5 416.7 382.8 28.7 13.8 6.7 8.6 4.5 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. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 3 of 3
18. Monday , 14 August, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED LOCAL TECHNICAL REPORTS’ Local Technical Reports 1. Weekly Technical Stock Picks 2. Daily Money Flow 3. Technical Stock Picks a. FBMKLCI b. Stocks Under Coverage c. PLANTATION Sector d. CONSTRUCTION Sector e. PROPERTY Sector 4. Weekly Ace Market Stock Watch 5. Weekly Small Cap Stock Watch 6. Weekly Stock Screen Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research
19. TA Se c u r i t i e s T e c h n i c a l V i e w Monday , 14 August, 2017 A M em b e r o f t h e TA G r o u p MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Weekly Technical Stock Picks Malaysia THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Chartist: Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my AMBANK Upper Middle Lower BOLLINGER BANDS RM RM RM DMI Recent Signal Signal Change RM4.73 5.16 4.95 4.74 SELL SIMPLE MOVING AVERAGES RM 4.88 RM 4.98 RM 4.99 DAILY MACD Recent Signal SELL Signal Change 10-day 30-day 50-day GENTING Upper Middle Lower Recent Signal Signal Change BOLLINGER BANDS RM RM RM DMI www.taonline.com.my RM9.66 9.88 9.64 9.41 SELL SIMPLE MOVING AVERAGES RM 9.73 RM 9.52 RM 9.61 DAILY MACD Recent Signal BUY Signal Change 10-day 30-day 50-day Page 1 of 9
20. GENTING M ’SIA Upper Middle Lower BOLLINGER BANDS RM RM RM DMI Recent Signal Signal Change RM5.81 6.21 5.98 5.74 SELL SIMPLE MOVING AVERAGES RM 6.00 RM 5.87 RM 5.79 DAILY MACD Recent Signal BUY Signal Change 10-day 30-day 50-day RHB BANK Upper Middle Lower Recent Signal Signal Change BOLLINGER BANDS RM RM RM DMI RM4.78 5.17 5.00 4.84 SELL SIMPLE MOVING AVERAGES RM 4.94 RM 5.02 RM 5.07 DAILY MACD Recent Signal SELL Signal Change 10-day 30-day 50-day Page 2 of 9