Bursa Malaysia Daily Market Report - 14 August

Transcription

1. Wednesday , 14 August, 2019 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only N ew s 1. D ai l y M arke t C om men t a ry 2. D ai l y B ri ef Fu nd a me n tal Rep o r ts 1. 2. 3. 4. 5. M a la ys i a A i rp o rt s H o l d i n g s Be rh a d : Do n ’t J u m p th e Gu n , W a i t f o r N e w P SC P e t ro n a s C h e m ic a ls G ro u p B h d : R e s i l ie n t in S p it e o f T o u g h M a rk e t P la n t a t io n S e c t o r : L o w e r- th a n - E x p e c te d S to c k p i le S e rb a D in a m ik H o l d in g s B h d : U n r e l e n t in g O rd e rb o o k R e p le n i sh m e n t M o m e n tu m W ilm a r In t e r n a t io n a l L im it e d : A n o th e r We a k Q u a rt e r Te ch n ic al R ep o rt s 1. D ai l y Te ch n ic a l St o ck W at ch , D ai l y Mon e y F lo w , D a il y St oc k Sc reen ( Loc al ) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
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Daily Market Commentary Wednesday , 14 August 2019 TA Research, e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (13.08.2019) Volume (mil) +/-chg (RMmn) Main Market 1,421.2 Warrants 442.7 ACE Market 329.8 Bond 0.5 ETF 0.2 LEAP 0.2 Total 2,194.7 Off Market 83.2 195.3 100.3 -68.5 -0.1 0.2 0.1 1,543.7 105.4 41.3 0.3 0.5 0.0 1,691.3 -56.3 320.9 137.6 20.2 -19.3 -0.1 0.4 0.0 250.2 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP Aug 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) 41.7 17.4 12.0 4.1 3.0 1.0 110 38 18 2 4 1 173 477 192 66 5 3 1 744 % chg % YTD chg -22.17 -149.93 -256.41 -26.50 -1.37 -1.31 -1.94 -1.65 -5.78 -2.06 14.57 -6.62 26,279.91 8,016.36 7,250.90 20,455.44 1,925.83 25,281.30 3,146.73 1,620.23 6,210.96 2,797.26 1,498.63 6,568.54 372.54 152.95 24.18 -229.38 -16.46 -543.42 -22.21 -30.41 -39.63 -17.73 -10.36 -21.73 1.44 1.95 0.33 -1.11 -0.85 -2.10 -0.70 -1.84 -0.63 -0.63 -0.69 -0.33 12.66 20.81 7.77 2.20 -5.64 -2.18 2.54 3.60 0.27 12.16 18.20 16.33 7.00 1.05 0.07 0.06 0.48 1.24 Exchange Rate USD/MYR 4.198 -0.003 USD/JPY 105.220 0.090 EUR/USD 1.122 0.002 USD/CNY 7.065 0.006 Counter Mkt Cap. (RM’mn) MAYBANK 96,226 PBBANK 80,516 TENAGA 77,342 PCHEM 57,920 IHH 49,661 CIMB 48,637 AXIATA 45,278 MAXIS 42,152 DIGI 38,642 HLBANK 37,718 Chg (RM) -0.04 -0.78 -0.22 -0.15 -0.07 -0.04 -0.04 -0.02 -0.03 -0.12 Bursa Malaysia shares slumped on Tuesday, copying losses on regional peers with the overnight fall on Wall Street and weakening yuan and ringgit currency aggravating falls on banks. The FBM KLCI tumbled 22.17 points or 1.37% to settle at 1,592.88, off an opening high of 1,615.24 and low of 1,591.29, as losers trashed gainers 744 to 173 on total turnover of 2.19bn shares worth RM1.69bn. While the local market should rebound today on the overnight Wall Street bounce after the US delayed tariffs on selected Chinese imports, volatility should remain elevated on persistent uncertainty over the US-China trade war. Crucial chart supports are at the recent pivot lows of 1,588 (6/8/19) and 1,572 (14/5/19), while a breakdown could aim for next key supports at 1,543/1,525, the 123.6%/138.2% Fibonacci Projection (FP) of the rally from 1,572 low (14/5/19) to the recent 1,694 high (2/7/19). Overhead resistance remains the falling 10-day moving average at 1,619, followed by the 100-day ma at 1,644, with tougher hurdle at the 76.4%FR (1,665). Bearish technical momentum point to further correction possibilities for AMBank, with a confirmed breakdown below the 61.8%FR (RM3.97) to aim for the 76.4%FR (RM3.75) before stalling, and resistance seen from the 50%FR (RM4.15) and 38.2%FR (RM4.33). Likewise, a decisive breakdown on RHB Bank shares below the 200-day ma (RM5.54) could accelerate fall towards the 38.2%FR (RM5.44), with stronger support seen at the 23.6%FR (RM5.29), while overhead resistance is from the 61.8%FR (RM5.68). Top 10 KLCI Movers Based on Mkt Cap. (RM) @ @ @ @ @ @ 1.09 0.24 0.13 0.61 2.17 0.07 0.77 3.86 1,592.88 11,290.40 12,944.85 1,579.50 Off Market YINSON IGBB-PA MTRONIC MTOUCHE GLBHD KGB Review & Outlook Value Value/ +/-chg Volume Up Down Vol. (mn) 5.92 5.67 3.86 11.68 7.62 6.27 4.23 2.35 4.36 0.61 Commodities Futures Palm Oil (RM/mt) 2,232.00 34.00 Crude Oil (Brent) 60.94 2.57 Gold ($/tr.oz.) 1,506.20 -9.90 Important Dates TAWIN - 3:1 Rights Issue - RI of up to 238.8m shares, togehter with 159.2m warrants. TAWIN - 6:1 Rights Issue - RI of up to 477.7m ICPS. 3 rights shares and 6 ICPS together with 2 warrants for every 1 existing share held, at an issue price of RM0.10 per rights share and RM0.025 per ICPS. LISTING ON: 13/08/2019. News Bites • Sime Darby Bhd is acquiring Gough Group Ltd for NZ$211 mn (RM572 mn). Gough Group has the Caterpillar dealership in New Zealand and interests in the transport and materials handling business in New Zealand and Australia. • Serba Dinamik Holdings Bhd has secured an engineering, procurement, construction and commissioning (EPCC) contract in Uzbekistan, worth an estimated USD250.3mn (RM1.05bn). • Malaysia Airports Holdings Bhd (MAHB) saw a 5.3% increase in passenger traffic in July 2019, on the back of higher domestic passenger movements in Malaysia and the high growth of international passenger movements for SGIA. • George Kent (M) Bhd served a notice of arbitration on Malaysian Resources Corp Bhd (MRCB) over a dispute on financing requirements for their joint venture company that is undertaking the construction of the Light Rail Transit Line 3 (LRT3). • GHL Systems Bhd has obtained operating licences from the respective regulators to commence money lending services in both Malaysia and Thailand. • Dagang NeXchange Bhd has signed a MoU with Perbadanan Islam Johor Holdings Sdn Bhd to leverage on information and communications technology infrastructure in halal supply chain. • Axis Real Estate Investment Trust is acquiring two properties in Johor for RM55.8mn cash from Nusajaya Tech Park Sdn Bhd. • Complete Logistic Services Bhd (Not Rated) is planning to sell 80% of its shareholdings in three wholly-owned companies to SH Cogent Logistics Pte Ltd for RM85.6mn cash. • The Trump administration will delay tariffs on cellphones, laptop computers, toys and some other items imports from China until Dec. 15 • The National Fiberisation and Connectivity Plan led by the Minister of Communications and Multimedia will require a RM21.6 bn investment from 2019 to 2023. • Revenue for the services sector in Malaysia increased by 6.5% to RM441.3bn in 2Q19, from RM414.2bn in the same period last year. • Malaysia's total palm oil stocks fell 0.79% in July 2019 to 2.39mn tonnes from 2.41mn tonnes recorded in the previous month. • Singapore has cut its official GDP growth forecast to 0%-1% for 2019. • U.S. consumer prices rose at a robust pace in July on the back of higher prices for energy and most other goods and services. • Japan's tertiary industry activity fell for the first time in three months in June, data from the Ministry of Economy, Trade and Industry showed. • UK wages grew at the fastest pace since the 2008-09 global financial crisis and employment reached a record high in the second quarter, despite contraction in the economy. • Germany's investor confidence dropped sharply in August to its lowest level since the end of 2011. 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. Wednesday , August 14, 2019 FBMKLCI: 1,592.88 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Brief Market View, News in Brief: Corporate, Economy, and Share Buybacks Chartist: Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my M a r k e t V i e w Volatility to Stay Even as US Delays China Tariffs Bursa Malaysia shares slumped on Tuesday, copying losses on regional peers with the overnight fall on Wall Street and weakening yuan and ringgit currency aggravating falls on banks. The FBM KLCI tumbled 22.17 points or 1.37% to settle at 1,592.88, off an opening high of 1,615.24 and low of 1,591.29, as losers trashed gainers 744 to 173 on total turnover of 2.19bn shares worth RM1.69bn. Crucial Support at 1,572; Resistance at 1,619 While the local market should rebound today on the overnight Wall Street bounce after the US delayed tariffs on selected Chinese imports, volatility should remain elevated on persistent uncertainty over the US-China trade war. Crucial chart supports are at the recent pivot lows of 1,588 (6/8/19) and 1,572 (14/5/19), while a breakdown could aim for next key supports at 1,543/1,525, the 123.6%/138.2% Fibonacci Projection (FP) of the rally from 1,572 low (14/5/19) to the recent 1,694 high (2/7/19). Overhead resistance remains the falling 10-day moving average at 1,619, followed by the 100-day ma at 1,644, with tougher hurdle at the 76.4%FR (1,665). Sell AMBank & RHB Bank Bearish technical momentum point to further correction possibilities for AMBank, with a confirmed breakdown below the 61.8%FR (RM3.97) to aim for the 76.4%FR (RM3.75) before stalling, and resistance seen from the 50%FR (RM4.15) and 38.2%FR (RM4.33). Likewise, a decisive breakdown on RHB Bank shares below the 200-day ma (RM5.54) could accelerate fall towards the 38.2%FR (RM5.44), with stronger support seen at the 23.6%FR (RM5.29), while overhead resistance is from the 61.8%FR (RM5.68). Asian Stocks Fall as Hong Kong Protests Drag Stocks in Asia slipped on Tuesday as tensions remained high in Hong Kong amid increasingly violent protests. The city’s airport reopened after operations were crippled on Monday due to demonstrators staging a sit-in at the airport. Amid the political turmoil in Hong Kong, flagship carrier Cathay Pacific saw its stock drop more than 2%. The People’s Bank of China set the official midpoint reference rate for the yuan at 7.0326 per dollar on Tuesday, stronger than expected but above the psychologically important 7-yuan-per-dollar level for the fourth consecutive session. The onshore yuan last traded at 7.0647 per dollar, while its offshore counterpart changed hands at 7.1033 against the greenback. The Hang Seng index fell 2.1%. In mainland China, shares slipped on the day. The Shanghai composite slipped 0.63% to 2,797.26, while the Shenzhen composite shed 0.687% to 1,498.63. Elsewhere, the Nikkei 225 in Japan dropped 1.11% to close at 20,455.44 following its return from a holiday, South Korea’s Kospi slipped 0.85% to close at 1,925.83, while the S&P/ASX 200 in Australia declined 0.33% to end its trading day at 6,568.50. Page 1 of 9
4. 14-Aug-19 Wall Street Rebound as US Delay Tariffs Stocks soared overnight after the U .S. decided to delay tariffs on certain Chinese goods while outright removing some items from the tariff list, reigniting hopes Washington and Beijing could reach a long-term resolution. The Dow Jones Industrial Average, which jumped as much as 529 points, finished the day 372.54 points higher, or 1.44%, at 26,279.91. The S&P 500 rose 42.57 points or 1.48% to 2,926.32 and the Nasdaq Composite was 1.95% higher to 8,016.36, led by Apple which surged more than 4%. The United States Trade Representative announced Tuesday certain products including clothing and cellphones are being removed from the tariff list based on “health, safety, national security and other factors” and will not face additional tariffs of 10%. Other tariffs will be delayed to Dec. 15 from Sep. 1 for certain articles, it said. Retailers cheered the potential delayed rise in costs for apparel and electronics. Best Buy soared more than 6%, while Nike jumped 2%. President Donald Trump said Tuesday he delayed the tariffs ahead of Christmas season to avoid potential impact on holiday shopping. He added China would very much like to make a trade deal. The Labor Department’s consumer price index report showed inflation came in as expected last month. The yield curve continued to narrow after the report. Despite concerns about the yield-curve inversion, history shows stocks have another 18 months to run typically before doom hits, based on data going back to 1978, according to Credit Suisse. Data show a recession comes in about 22 months on average after the curve inverts. Page 2 of 9
5. 14-Aug-19 N e w s I n B r i e f Corporate Sime Darby Bhd is acquiring New Zealand 's Gough Group Ltd for NZ$211 mn (RM572 mn) from Gough Holdings Ltd. Gough Group has the Caterpillar dealership with service territory in New Zealand and interests in the transport and materials handling business in New Zealand and Australia. The deal is expected to be completed by Sept 30, 2019 (The Edge). Comments: We are neutral on the news as we do not expect the acquisitions to have a material impact on Sime Darby’s earnings. Nevertheless, we believe the acquisition will complement Sime Darby Motors’ commercial truck business in New Zealand and strengthen its position in Australasia. Assuming a margin of 2%, the earnings impact of NZ$11mn (RM29.8mn) is relatively small to the group’s bottom line. Maintain Sell on SDB with an unchanged TP of RM2.31/share, based on SOP valuations. Serba Dinamik Holdings Bhd has secured an engineering, procurement, construction and commissioning (EPCC) contract in Uzbekistan, worth an estimated USD250.3mn (RM1.05bn). In addition, the Group has also secured two operations and maintenance contracts from Petronas Carigali Sdn Bhd (The Edge). Comment: We are positive on Serba’s unrelenting orderbook replenishment momentum within and outside Malaysia. Year-to-date, Serba has announced new contract wins totalling an estimated RM2.6bn. This falls within our 2019 orderbook replenishment assumption of RM4.2bn (EPCC: RM1.4bn, O&M: RM2.8bn). Our assumption includes contract renewals and adhoc works. Inclusive of these new projects, we estimate that Serba has current outstanding orderbook of RM9.0bn (EPCC: RM3bn, O&M: RM6bn). This implies robust revenue visibility of approximately 3 years. We have a Buy recommendation on Serba with target price (TP) of RM4.91 based on 15x CY19 PER. Malaysia Airports Holdings Bhd (MAHB) saw a 5.3% increase in passenger traffic in July 2019, on the back of higher domestic passenger movements in Malaysia and the high growth of international passenger movements for Istanbul Sabiha Gokcen International Airport (SGIA) (The Edge). Comment: For 7M19, total passenger movements growth expanded to 4.9%, a tad higher than 4.5% a month ago. This was higher than our 2019 growth forecast of 3.0%. However, in view of a slowing global economy and the implementation of departure tax, we keep our forecast unchanged. We maintain our FY19-21 earnings projections for MAHB. Maintain Sell on MAHB with an unchanged target price of RM8.47. George Kent (M) Bhd (Not Rated) served a notice of arbitration on Malaysian Resources Corp Bhd (MRCB) (Not Rated) over a dispute on financing requirements for their joint venture (JV) company MRCB George Kent Sdn Bhd, that is undertaking the construction of the Light Rail Transit Line 3 (LRT3) (StarBiz). The National Fiberisation and Connectivity Plan (NFCP) led by the Minister of Communications and Multimedia will require a RM21.6 bn investment from 2019 to 2023, says Finance Minister Lim Guan Eng. He said a large portion of the investment would be funded by the Universal Service Provider (USP) Fund managed by the Malaysian Communications and Multimedia Commission, as well as by the private sector (Bernama). The Johor Port Authority is working to develop a RM2bn (USD477 mn) oil storage and ship refueling site at the state of Johor. The "Bunker Island Development" is set to have the capacity to store about 1.2 mn cubic metres of various oil and gas products. It will be used for storage, blending and redistribution (The Edge). Page 3 of 9
6. 14-Aug-19 Uni Wall APS Holdings Bhd (Not Rated) has accepted a letter of award from Global Facade Sdn Bhd for sub-contract works worth RM83.5mn. The contract entailed the design, supply, fabrication and installation of aluminium and glazing works for office towers in Damansara Heights, Kuala Lumpur. The contract period started from May 16, 2019 to Nov 24, 2020 (Bursa Malaysia). GHL Systems Bhd (Not Rated) has obtained operating licences from the respective regulators to commence money lending services in both Malaysia and Thailand. The Group received the Money Lending Licence issued by the Ministry of Housing and Local Government under the Moneylenders Act 1951, while its Thailand unit GHL (Thailand) Co was issued the Nano Finance Licence by the Bank of Thailand. The licences permit money lending services to both individuals as well as businesses (The Edge). Vertice Bhd (Not Rated) has bagged two contracts worth a combined RM22mn for works on the Mass Rapid Transit Sungai Buloh–Serdang–Putrajaya (SSP) Line, also known as MRT2. The two contracts were awarded by Tri-Arch Sdn Bhd and TA Decke Sdn Bhd. The contract from Tri-Arch is worth RM12mn and is in respect to the supply and installation of a roofing system, whereas the contract from TA Decke is worth RM10mn and pertains to the supply and installation of aluminium box fin and cladding works (Bursa Malaysia). Complete Logistic Services Bhd (Not Rated) is planning to sell 80% of its shareholdings in three wholly-owned companies to SH Cogent Logistics Pte Ltd for RM85.6mn cash, as the company moves to realise "substantial value" from its investments in its forwarding, haulage and warehousing businesses. The disposal includes two pieces of leasehold land in Johor and Selangor, measuring about 14,961 sqm and 10,667 sqm respectively, together with a warehouse each on both the lands (Bursa Malaysia). Dagang NeXchange Bhd (DNeX) (Not Rated) has signed a Memorandum of Understanding (MoU) with Perbadanan Islam Johor Holdings Sdn Bhd (PIJ Holdings) to leverage information and communications technology (ICT) infrastructure in halal supply chain. Through this partnership, DNeX and PIJ Holdings would work together in the development of Johor Halal Certification Blockchain System, which includes embedding blockchain technology for application and verification of halal and marriage certificates (Bernama). Axis Real Estate Investment Trust (Axis-REIT) (Not Rated) is acquiring two properties in Johor for RM55.8mn cash from Nusajaya Tech Park Sdn Bhd. The company has inked two sale and purchase deals with Nusajaya Tech Park for the proposed acquisition of properties located within Iskandar Malaysia. The first property, which costs RM42.0mn, has a land area of 1.4674 hectares and is currently being leased to global engineering leader GKN Aerospace. The second property, which costs RM13.8mn, has a land area of 0.6585 hectare (Bernama). Tien Wah Press Holdings Bhd’s (Not Rated) net profit for the second quarter ended June 30, 2019 (2QFY19) dropped 68.5% to RM1.2mn, from RM3.81mn a year earlier, on higher costs. The Group had incurred additional costs for the completion of its new production footprint. Throughout the year, the group also incurred additional costs to intensify its Dubai operations, in order to compete in the Middle East market (Bursa Malaysia). Page 4 of 9
7. 14-Aug-19 N e w s I n B r i e f Economy Malaysi a Volume Index of Services Increased by 6 .4% According to the Department of Statistics Malaysia (DOSM), volume Index of Services portrayed an increasing trend of 6.4% to 126.5 points in second quarter 2019 as compared to the same quarter of previous year. The increase of Services sector in the second quarter of 2019 was led by Wholesale & Retail Trade, Food & Beverages and Accommodation segment, (6.6%) and Information & Communication and Transportation & Storage segment, (6.4%). Seasonally adjusted volume index of this sector edged up by 1.2% to 127.2 points as compared to the previous quarter. Volume index of Wholesale & Retail Trade, Food & Beverages and Accommodation segment rose by 6.6% as compared with the same quarter of 2018. The growth was contributed by Food & Beverages sub-sector, 10.0% and Accommodation sub-sector, 6.8%. Seasonally adjusted volume index of this segment went up by 2.6% as compared to the previous quarter. Business Services and Finance segment registered an increase of 6.2% as compared to the corresponding quarter of 2018. The growth was primarily reflected by Professional, Scientific & Technical and Administrative & Support Services sub-sector at 9.5%. Seasonally adjusted volume index of Business Services and Finance segment decreased by 1.5% as against first quarter 2019. (DOSM) Malaysia Services Sector Revenue Grew 6.5% in 2Q19 Revenue for the services sector in Malaysia increased by 6.5% to RM441.3bn in the second quarter of 2019 (2Q19), from RM414.2bn in the same period last year, according to the Department of Statistics Malaysia (DOSM). Meanwhile, on a quarterly basis, the total revenue recorded an increase of RM10bn or 2.3% compared to RM431.2bn in 1Q19. The growth was driven by the Wholesale & Retail Trade, Food & Beverages and Accommodation segment, which increased by 6.4% to RM349.3bn. Besides that, the growth was also contributed by Information & Communication and Transportation & Storage segment, which recorded an increase of 6.9% to RM65.9bn. It was noted, however, that the year-on-year total revenue growth in 2Q19 at 6.5% is slower compared to 1Q19 at 7.0%. Salaries and wages paid also registered an increase of RM1.1bn with a growth of 4.4% on year-on-year comparison, propelled by Wholesale & Retail Trade sub-sector with an increment of RM491.4mn or 4.1. On a quarterly basis, salaries and wages recorded an increase of 2.2% or RM531.1mn to RM25.2bn. The performance of the services sector is a quarterly publication by DOSM which encompasses Wholesale & Retail Trade; Information & Communication; Transportation & Storage; Food & Beverages; Professional; Private Health; Private Education; Accommodation; Arts, Entertainment & Recreation; and Real Estate Agent sub-sectors. (DOSM, The Edge) Malaysia’s Palm Oil Stocks Fell 0.79% in July 2019 Malaysia's total palm oil stocks fell 0.79% in July 2019 to 2.39mn tonnes from 2.41mn tonnes recorded in the previous month, according to the Malaysian Palm Oil Board (MPOB). The board in its "Performance of the Malaysian Palm Oil Industry for the Month of July 2019” report stated that crude palm oil (CPO) stocks fell 0.72% to 1.34 tonnes from 1.35 tonnes while processed palm oil stock decreased by 0.88% to 1.055mn tonnes from 1.64mn tonnes previously. It also said CPO production rose 15.06% to 1.74mn tonnes versus 1.51mn tonnes in June. Palm kernel output was higher by 15.60% at 411,701 tonnes from 355,397 tonnes. Biodiesel exports in the month under review also jumped 154.40% to 78,920 from 31,022 tonnes, while exports of palm kernel cake inched up 1.67% to 218,501 from 214,918 tonnes. Meanwhile, palm kernel oil exports shed 2.63% in June 2019 to 83.806 tonnes vis-a-vis 86,066 tonnes in the preceding month. (The Star) Page 5 of 9
8. 14-Aug-19 NFCP needs RM21 .6bn Investment from 2019-2023 The National Fiberisation and Connectivity Plan (NFCP) led by the Minister of Communications and Multimedia will require a RM21.6bn investment from 2019 to 2023, says Finance Minister Lim Guan Eng. He said a large portion of the investment would be funded by the Universal Service Provider (USP) Fund managed by the Malaysian Communications and Multimedia Commission, as well as by the private sector. “This plan will further improve Internet speed in Malaysia, and make our economy ready for the implementation of 5G,” he said in his opening remarks at the 2019 Focus Group Meeting: Embracing the Digital Economy here today. He said the government is currently organising a series of focus group discussions to obtain views and recommendations for the 2020 Budget to be tabled on Oct 11, 2019. “Today is the first of such focus groups where we will discuss the digital economy and ways the government could catalyse the growth of the digital economy to raise the well-being of the rakyat, and fulfil the ‘Shared Prosperity’ agenda espoused by Prime Minister Tun Dr Mahathir Mohamad,” he said. Lim said to support the digitalisation of the economy and wider adoption of Industry 4.0 technology in society, the government is also providing the necessary digital infrastructure by preparing to spend RM4.2bn to provide high-speed fibre optic connectivity to schools and selected industrial zones. (The Edge) Asia Singapore Cuts Economic Growth Forecast to 0% - 1% for 2019 Singapore has cut its official growth forecast for the second quarter running, on a flat economic performance in the first half of the year. The gross domestic product (GDP) is likely to come in between zero growth and 1% for the full year, the Ministry of Trade and Industry (MTI) said. The final print is expected to fall in the middle of that range. The MTI had already trimmed its growth expectations once this year, in May 2019, when it lowered the upper bound from 3.5%, and forecast growth of 1.5% to 2.5%. That would have made for a steep slowdown, against the full-year GDP growth of 3.1% clocked in 2018. But quarterly economic data has continued to soundly disappoint. The latest downgrade came as the MTI affirmed its flash estimate for second-quarter GDP growth of 0.1%, on better-than-feared factory and construction data, even as growth in the services sector was moved down by a smidgen. The GDP grew by 0.6% year on year for the first six months altogether. Looking ahead, GDP growth in many of Singapore’s key final demand markets in the second half of 2019 is expected to slow from, or remain similar to, that recorded in the first half. The MTI also noted that "the Singapore economy is likely to continue to face strong headwinds for the rest of the year", and singled out the electronics and precision engineering clusters, where weakness in the first half is expected to stretch into the rest of the year on poor global semiconductor demand. (The Business Times) Japan Tertiary Industry Activity Falls in June Japan's tertiary industry activity fell for the first time in three months in June, data from the Ministry of Economy, Trade and Industry showed. The tertiary industry activity index edged down 0.1% month-on-month in June, which was in line with expectations. Among the major industries, financial and insurance, transportation, postal, retail business, electricity, gas, heat supply, water supply, life entertainment related services, related services for businesses, and goods rental business declined. Meanwhile, wholesale trade, medical, welfare, information and communication industry, real estate business grew in June. On a yearly basis, tertiary industry activity advanced 0.6% in June. (RTT) United States U.S. Will Delay Some Tariffs Against China The Trump administration will delay tariffs on cellphones, laptop computers, toys and some other items until Dec. 15, softening the blow of levies that were scheduled to take effect on Page 6 of 9
9. 14-Aug-19 Sept . 1 against roughly US$300bn of imports from China. The office of the U.S. Trade Representative said that some products will be removed from the tariff lists entirely, based on health, safety, national security and other factors. The statement didn’t say which items would be removed. The USTR said it would release precise details of the delayed tariffs later Tuesday, but the items that will be delayed are some of the biggest ticket items facing tariffs. Cellphones alone represent more than US$40bn of trade. The USTR didn’t provide a reason beyond saying the decision was “part of USTR’s public comment and hearing process.” In June, over the course of seven days of hearings, hundreds of U.S. companies testified that the tariffs would damage their business. The delay in tariffs also buys a reprieve for negotiators. Talks between the U.S. and Chinese negotiating teams, in Shanghai last month, ended without a breakthrough, and a Chinese delegation was planning to visit Washington in September, shortly after the tariffs were scheduled to take effect. Now, the U.S. and China will have another opportunity to strike a deal and avert the tariffs. (WSJ) U.S. Inflation Picks Up in July as Core Prices Strengthen U.S. consumer prices rose at a robust pace in July on the back of higher prices for energy and most other goods and services, a possible sign that inflation is finding its footing after a weak start to the year. The consumer-price index, which measures what Americans pay for goods and services ranging from mutton chops to motel rooms, rose a seasonally adjusted 0.3% last month from June and 1.8% from July 2018, the Labor Department said Tuesday. Economists surveyed by The Wall Street Journal had expected prices to rise 0.3% on the month. Prices for an array of goods and services rose last month. Energy prices climbed in July from June, partly reversing a drop in the prior month, while prices for services such as shelter, transportation and health care also rose. Food prices were flat. The so-called core consumer-price index, which excludes volatile food and energy categories, was up 0.3% in July from June and 2.2% from a year earlier. The monthly increase exceeded economists’ forecast for a 0.2% gain. Higher prices eroded workers’ wage gains, a separate report showed Tuesday. Adjusted for inflation, average hourly earnings for all private-sector, nonfarm workers slipped 0.1% in July from June. For production and nonsupervisory employees—a category that includes most blue-collar workers—wages fell 0.2% in real terms. Compared with July 2018, real earnings were up 1.3% for all employees and 1.6% for production and nonsupervisory workers. Federal Reserve officials have frequently expressed concern this year about weak inflation, which has defied their predictions of strengthening price pressures in a steadily growing economy. (WSJ) Eurozone UK Wage Growth Strongest Since Global Crisis; Employment At Record High UK wages grew at the fastest pace since the 2008-09 global financial crisis and employment reached a record high in the second quarter, despite contraction in the economy, data from the Office for National Statistics revealed. Total average weekly pay grew 3.7% in the year to June to GBP538. This was the strongest growth rate seen since June 2008 and was in line with expectations. Excluding bonus, average pay climbed 3.9%, also the fastest since June 2008, and exceeded the forecast of 3.8%. Wage growth data suggests that it may be too early to be talking about Bank of England rate cuts, although as ever, it all depends on Brexit. In the three months to June, employment increased by 115,000 to reach a record 32.81mn. The ONS said employment has been on an upward trend since 2011. The employment rate remained unchanged at 76.1%. The jobless rate increased by 0.1 percentage points on the quarter to 3.9% in the three months to June. Economists had forecast the rate to remain unchanged at a 44-year low of 3.8%. The number of people out of work rose by 31,000 to 1.33mn. (RTT) Page 7 of 9
10. 14-Aug-19 German Investor Confidence Falls Sharply to Lowest Level Since Dec11 Germany 's investor confidence dropped sharply in August to its lowest level since the end of 2011, survey data from the ZEW - Leibniz Centre for European Economic Research showed. The ZEW Indicator of Economic Sentiment for Germany tumbled to -44.1 from 24.5 in July, reaching its lowest level since December 2011. Economists had forecast a score of -28. The long-term average of the indicator is 21.6 points. The current conditions index of the survey fell to -13.5 from -1.1 in the previous month. The score was the lowest since May 2010. Economists had expected a reading of -5.9. The investor confidence index for Eurozone dropped to -43.6 from -20.3 in July. The current situation measure shed 3.9 points to -14.5. The results are based on the ZEW Financial Market Test conducted monthly among up to 300 experts from banks, insurance companies and financial departments of selected corporations. (RTT) German Wholesale Prices Fall For First Time in Nearly 3 Years Germany's wholesale prices eased in July for the first time in nearly three years, data from Destatis showed. Wholesale prices declined 0.1% year-on-year in July, following a 0.3% rise in June. The latest fall was the first since September 2016, when prices decreased 0.6%. The decline in July was led by a 3.1% fall in prices of petroleum products. Prices of scrap and residual materials decreased by 9.5% and those of equipment, peripherals and software prices fell by 5.7%. On a monthly basis, wholesale prices fell 0.3% in July, after a 0.5% decline in the previous month. Prices dropped on a monthly basis for the second consecutive month. Separately, Germany's consumer price inflation rose to a 3-month high in July, as estimated, largely driven by food and energy prices. The consumer price index climbed 1.7% year-onyear following a 1.6% increase in June. This was the highest since April and the rate came in line with the estimate published on July 30. Excluding energy, inflation came in at 1.5% in July. Energy prices gained 2.4% and food prices climbed 2.1%. On a monthly basis, consumer prices rose 0.5%, as estimated. Inflation based on the harmonized index of consumer prices, which is meant for EU comparison, slowed to 1.1% from 1.5% in June. The latest HICP inflation rate was the weakest since November 2016 and matched the flash estimate. (RTT) Page 8 of 9
11. 14-Aug-19 N e w s I n B r i e f Share Buy-Back Share Buy-Back : 13 August 2019 Company ANCOM BORNOIL BREM CCK FARLIM FIMACOR FITTERS KPJ NYLEX P&O SALCON SYF TITIJYA TSH WTHORSE Bought Back Price (RM) Hi/Lo (RM) 47,000 300,000 35,300 32,100 150,000 10,000 630,000 2,000,000 69,900 15,000 740,000 20,000 200,000 20,000 8,000 0.47/0.46 0.045 0.77 0.50/0.495 0.35 1.92/1.91 0.40/0.39 0.90/0.895 0.60/0.59 0.98/0.975 0.245/0.24 0.20 0.30 0.89/0.885 1.15/1.13 0.47/0.45 0.045/0.04 0.775/0.765 0.50/0.49 035/0.345 1.92/1.91 0.40/0.39 0.905/0.89 0.60/0.59 0.98/0.975 0.245/0.24 0.20/0.195 0.295/0.29 0.90/0.88 1.16/1.05 Total Treasury Shares 11,126,859 158,086,000 5,519,634 2,907,700 150,000 5,451,200 13,130,000 150,312,600 16,779,924 15,706,293 5,000,047 24,367,800 76,579,400 909,000 11,768,200 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 9 of 9
12. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) Beta EPS (sen) PER (X) Div Yield (%) FY19 FY20 FY19 FY20 FY19 FY20 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD 13-Aug-19 AUTOMOBILE BAUTO 2.41 2.86 18.7% Buy 2,799 0.64 22.8 21.8 10.6 11.0 8.8 6.8 2.78 -13.3 1.75 37.5 MBMR 3.26 3.36 3.1% Buy 1,274 0.57 40.5 42.0 8.1 7.8 1.8 1.8 3.37 -3.3 1.86 75.3 15.2 48.2 PECCA 1.17 1.28 9.4% Buy 215 0.75 9.4 10.3 12.5 11.4 6.0 6.8 1.24 -5.6 0.69 70.8 59.2 SIME 2.15 2.31 7.4% Sell 14,622 1.60 16.3 15.3 13.2 14.1 4.6 4.3 2.73 -21.2 2.04 5.4 -10.4 UMW 5.10 5.42 6.3% Sell 5,958 0.62 39.6 41.1 12.9 12.4 1.4 1.4 6.09 -16.3 4.20 21.4 -6.8 BANKS & FINANCIAL SERVICES ABMB 3.30 4.20 27.3% Buy 5,109 0.82 34.7 36.6 9.5 9.0 5.1 5.3 4.35 -24.1 3.30 0.0 -17.9 AFFIN 1.98 2.50 26.3% Buy 3,932 0.86 26.7 28.7 7.4 6.9 5.1 5.1 2.55 -22.4 1.97 0.5 -11.2 AMBANK 3.98 4.70 18.1% Buy 11,996 1.18 42.2 45.4 9.4 8.8 5.0 5.0 4.64 -14.2 3.70 7.6 -8.3 CIMB 5.00 5.80 16.0% Buy 48,637 1.32 50.9 58.0 9.8 8.6 5.2 5.8 6.28 -20.4 4.98 0.4 -12.4 HLBANK 17.40 20.30 16.7% Buy 37,718 0.89 128.8 138.9 13.5 12.5 2.8 2.8 21.66 -19.7 16.82 3.4 -14.7 MAYBANK 8.56 9.30 8.6% Buy 96,226 0.86 76.0 81.1 11.3 10.6 6.8 6.8 10.14 -15.6 8.51 0.6 -9.9 PBBANK 20.74 22.90 10.4% Hold 80,516 0.85 147.6 157.5 14.1 13.2 3.3 3.3 26.16 -20.7 20.46 1.4 -16.2 RHBBANK 5.55 6.50 17.1% Buy 22,256 1.05 60.0 64.0 9.2 8.7 4.0 4.0 6.07 -8.6 5.05 9.9 4.9 BURSA 6.38 6.10 -4.4% Sell 5,158 0.88 25.5 26.7 25.1 23.9 3.8 3.8 7.85 -18.7 5.92 7.8 -6.7 ANNJOO 1.41 1.00 -29.1% Sell 731 1.51 -2.1 10.0 na 14.1 0.0 2.8 2.24 -37.1 1.15 22.6 12.8 CHINHIN 0.80 0.70 -12.5% Sell 440 0.95 6.1 7.8 13.1 10.2 1.5 2.4 0.91 -12.1 0.63 27.0 10.3 CHINWEL 1.76 2.20 25.0% Buy 517 0.78 20.2 21.8 8.7 8.1 4.5 4.8 2.00 -12.0 1.54 14.3 8.6 CMSB 2.66 3.26 22.6% Hold 2,853 1.56 20.8 21.6 12.8 12.3 3.1 3.2 3.92 -32.1 2.52 5.6 -1.1 CSCSTEL 1.00 1.10 10.6% Sell 367 0.98 5.6 6.8 17.7 14.7 2.7 3.3 1.33 -25.2 0.98 2.1 -2.5 ENGTEX 0.68 0.80 17.6% Buy 296 0.74 2.5 4.0 27.6 16.9 1.2 1.2 1.12 -39.3 0.66 3.8 -17.6 GADANG 0.73 0.77 6.2% Sell 528 1.66 6.0 8.1 12.1 8.9 1.7 2.1 0.96 -24.5 0.48 52.6 42.2 GAMUDA 3.70 3.65 -1.4% Sell 9,148 1.55 27.9 30.2 13.2 12.2 3.2 3.2 4.04 -8.4 2.00 85.0 58.1 BUILDING MATERIALS CONSTRUCTION Note: GAMUDA proposed 1 for 4 rights issue warrants. For more details please refer to 17.12.18 report. GDB 0.30 0.31 1.7% Sell 188 na 4.1 3.4 7.3 8.9 5.0 5.0 0.44 -31.8 0.22 36.4 30.4 IJM 2.32 2.18 -6.0% Sell 8,420 1.65 9.5 10.0 24.4 23.3 1.7 2.2 2.51 -7.6 1.39 66.9 43.2 KAB 0.24 0.31 27.1% Buy 85 na 2.9 2.9 8.4 8.2 4.2 4.2 0.31 -22.6 0.19 29.7 23.1 PESONA 0.23 0.31 37.8% Buy 156 1.35 3.2 3.6 7.1 6.3 4.4 4.4 0.37 -38.4 0.17 32.4 18.4 -38.1 SENDAI 0.42 0.37 -10.8% Sell 324 1.39 7.0 6.2 5.9 6.7 0.0 2.4 0.90 -53.9 0.39 6.4 SUNCON 2.10 1.71 -18.6% Sell 2,708 1.24 11.0 12.3 19.1 17.1 3.8 3.8 2.20 -4.5 1.30 61.5 57.9 WCT 1.02 0.92 -10.3% Sell 1,438 1.32 3.9 3.9 26.0 26.4 2.0 2.0 1.22 -16.4 0.65 57.6 54.1 LITRAK 4.45 5.21 17.1% Buy 2,362 0.55 44.5 43.6 10.0 10.2 5.6 5.6 5.90 -24.6 3.72 19.6 7.2 CARLSBG 23.80 25.90 8.8% Hold 7,321 0.66 95.9 100.5 24.8 23.7 4.0 4.2 27.34 -13.0 17.06 39.5 21.1 HEIM 22.60 27.00 19.5% Buy 6,827 0.67 104.1 110.7 21.7 20.4 4.5 4.8 25.10 -10.0 17.42 29.7 10.5 AEON 1.60 1.75 9.4% Hold 2,246 0.84 10.1 10.7 15.9 14.9 3.1 3.4 2.27 -29.5 1.38 15.9 8.8 AMWAY 5.91 7.76 31.3% Buy 972 0.63 37.5 40.5 15.8 14.6 5.1 5.5 7.36 -19.7 5.53 6.9 -0.3 F&N 34.60 28.77 -16.8% Sell 12,691 0.80 123.3 125.7 28.1 27.5 1.9 2.2 40.00 -13.5 29.20 18.5 3.3 FOCUSP 0.54 0.66 22.2% Buy 89 na 5.1 5.5 10.6 9.8 2.8 3.1 0.58 -6.9 0.16 237.5 184.2 CONSUMER Brewery Retail Note: FOCUSP proposed bonus issue shares on the basis of 1 for 3. For more detail please refer to 10.07.19 report. HUPSENG 0.92 1.24 35.5% Buy 732 0.42 5.3 6.0 17.1 15.3 6.6 6.6 1.11 -17.6 0.90 1.7 -3.7 JOHOTIN 1.36 1.80 32.4% Buy 422 1.02 11.8 14.1 11.5 9.6 3.7 4.4 1.60 -15.0 0.84 62.9 41.7 -27.3 LHI 0.80 1.43 78.8% Buy 2,920 na 6.9 7.5 11.6 10.6 2.6 2.8 1.19 -32.8 0.78 3.2 NESTLE 147.70 159.60 8.1% Hold 34,636 0.59 310.0 332.9 47.6 44.4 2.1 2.3 150.60 -1.9 142.80 3.4 0.2 PADINI 3.48 4.28 23.0% Buy 2,290 0.61 22.8 25.6 15.3 13.6 3.3 3.4 6.16 -43.5 3.14 10.9 -0.5 -3.3 POHUAT 1.45 1.88 29.7% Buy 324 0.59 22.3 23.4 6.5 6.2 5.5 5.5 1.64 -11.6 1.30 11.5 QL 6.85 6.58 -3.9% Sell 11,114 0.73 13.5 15.5 50.9 44.2 0.7 0.7 7.63 -10.2 5.80 18.1 0.6 SCIENTX 8.34 9.80 17.5% Buy 4,297 0.80 62.5 75.6 13.3 11.0 2.5 2.8 9.48 -12.0 8.05 3.6 -5.8 SIGN 0.48 0.60 25.0% Buy 108 0.62 2.1 4.6 22.8 10.4 3.1 3.8 0.68 -28.9 0.32 52.4 43.3 22.80 28.20 23.7% Sell 6,510 0.70 135.3 136.2 16.9 16.7 5.7 5.9 38.68 -41.1 22.20 2.7 -36.8 GENTING 6.05 6.97 15.2% Sell 23,296 1.15 49.6 56.9 12.2 10.6 2.3 2.6 8.66 -30.2 5.85 3.4 0.2 GENM 3.12 3.47 11.2% Sell 18,527 1.31 17.1 23.5 18.2 13.3 2.6 3.2 5.12 -39.0 2.70 15.7 5.8 2.72 2.29 -15.8% Sell 3,664 0.75 22.9 20.1 11.9 13.6 5.9 5.1 2.82 -3.5 2.01 35.3 28.9 41.1 Tobacco BAT GAMING Casino NFO BJTOTO HEALTHCARE Hospitals/ Pharmaceutical DPHARMA 1.34 1.62 20.9% Buy 911 0.61 7.7 8.2 17.4 16.4 4.2 4.5 1.44 -6.9 0.93 44.9 IHH 5.66 5.90 4.2% Sell 49,661 0.64 10.9 12.4 51.8 45.6 0.5 0.5 5.95 -4.9 4.54 24.7 5.0 KPJ 0.90 1.05 16.7% Buy 3,861 0.72 4.4 4.7 20.6 19.0 2.3 2.5 1.17 -23.1 0.89 1.1 -13.5 HARTA 4.93 4.16 -15.6% Sell 16,556 0.88 13.6 14.4 36.3 34.3 1.7 1.7 7.45 -33.8 4.52 9.1 -19.7 KOSSAN 4.15 5.16 24.3% Buy 5,308 0.58 19.2 21.5 21.7 19.3 1.8 2.0 4.60 -9.8 3.44 20.6 -4.4 SUPERMX 1.53 1.77 15.7% Hold 1,999 0.89 9.9 10.6 15.4 14.4 3.0 3.2 2.22 -31.1 1.30 17.7 -12.1 TOPGLOV 4.49 4.67 4.0% Sell 11,494 0.42 15.3 17.3 29.3 25.9 1.7 1.9 6.36 -29.4 4.30 4.4 -19.8 0.66 0.87 32.8% Buy 492 0.97 7.4 8.2 8.9 8.0 5.1 5.6 0.95 -30.7 0.53 24.8 17.0 ASTRO 1.44 1.60 11.1% Buy 7,509 1.34 10.8 11.5 13.3 12.5 6.3 7.3 1.92 -25.0 1.05 37.1 10.8 MEDIA PRIMA 0.48 0.31 -35.4% Sell 532 1.06 -7.4 -5.8 na na 0.0 0.0 0.60 -20.0 0.33 47.7 39.1 STAR 0.60 0.69 16.0% Sell 439 1.02 1.8 2.0 32.6 30.3 0.8 0.8 1.25 -52.4 0.60 0.0 -13.1 Rubber Gloves INSURANCE TUNEPRO MEDIA
13. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Market Cap . Share Price Target Price (RM) (RM) LCTITAN 2.66 2.40 -9.8% Sell 6,046 MHB 0.81 1.05 30.4% Buy 1,288 MISC 7.20 6.30 -12.5% Sell PANTECH 0.50 0.75 50.0% % upside Recom (RMm) Beta EPS (sen) PER (X) Div Yield (%) 52weeks 52weeks % Chg FY19 FY20 FY19 FY20 FY19 FY20 High Price % Chg Low Price % Chg YTD 0.91 9.5 18.1 27.9 14.7 1.1 1.9 5.21 -48.9 2.50 6.4 -42.4 1.48 -3.6 3.8 na 21.3 0.0 0.0 0.97 -17.0 0.50 62.6 47.7 32,139 0.96 38.4 42.0 18.7 17.1 4.2 4.2 7.50 -4.0 5.48 31.4 7.5 Buy 375 1.02 6.4 7.1 7.9 7.0 4.0 4.3 0.61 -18.5 0.41 21.7 16.1 -22.1 OIL & GAS PCHEM 7.24 8.70 20.2% Buy 57,920 0.74 49.7 56.0 14.6 12.9 3.5 3.7 10.20 -29.0 7.08 2.3 SERBADK 4.09 5.00 22.2% Buy 6,006 1.08 31.0 33.5 13.2 12.2 2.2 2.4 4.29 -4.7 3.55 15.2 8.2 UZMA 0.62 0.71 14.5% Sell 13,556 1.62 5.9 7.9 10.6 7.9 0.0 0.0 1.51 -58.9 0.55 12.7 7.8 VELESTO 0.30 0.34 13.3% Buy 2,465 1.67 0.2 0.4 153.8 78.4 0.0 0.0 0.34 -11.8 0.17 81.8 66.7 FGV 1.09 1.03 -5.5% Sell 3,976 1.47 -4.6 -3.6 na na 0.0 0.0 1.75 -37.7 0.63 73.0 52.4 IJMPLNT 1.37 1.27 -7.3% Sell 1,206 0.96 -2.1 4.4 na 31.1 1.5 1.5 2.61 -47.5 1.30 5.4 -2.1 IOICORP 4.20 3.81 -9.3% Sell 26,396 0.77 11.3 14.2 37.1 29.5 1.6 2.0 4.74 -11.4 4.10 2.4 -5.6 PLANTATIONS KFIMA 1.75 1.89 8.0% Hold 492 0.65 11.8 11.1 14.9 15.8 5.1 5.1 1.80 -2.8 1.41 24.1 15.1 KLK 23.56 19.17 -18.6% Sell 25,091 0.53 62.3 72.1 37.8 32.7 1.3 1.5 25.78 -8.6 23.00 2.4 -4.7 SIMEPLT 4.60 4.07 -11.5% Sell 31,669 na 7.4 13.8 62.4 33.2 1.3 2.0 5.40 -14.7 3.95 16.5 -3.4 TSH 0.90 0.84 -6.7% Sell 1,243 0.48 2.2 3.5 40.5 25.6 0.8 1.2 1.25 -28.0 0.87 3.4 -9.1 UMCCA 5.15 5.19 0.8% Sell 1,080 0.57 -15.4 12.4 na 41.5 1.6 1.6 6.40 -19.5 5.00 3.0 -1.2 GLOMAC 0.38 0.37 -1.3% Sell 292 0.61 0.9 2.1 42.9 18.2 2.1 2.7 0.45 -16.7 0.35 8.7 -3.8 HUAYANG 0.40 0.43 7.5% Sell 141 0.62 -3.6 3.4 na 11.6 0.0 0.0 0.48 -16.7 0.30 33.3 15.9 IBRACO 0.67 0.70 5.3% Sell 330 0.46 7.4 9.1 9.0 7.3 4.1 4.1 0.75 -11.3 0.15 343.3 11.8 IOIPG 1.26 1.79 42.1% Buy 6,938 1.29 14.4 14.5 8.7 8.7 4.0 4.0 1.86 -32.3 1.16 8.6 -18.2 MAHSING 0.89 1.07 20.9% Buy 2,149 0.80 8.8 9.0 10.1 9.8 5.6 5.6 1.24 -28.6 0.88 0.6 -3.3 SIMEPROP 0.91 1.14 25.3% Buy 6,189 na 5.5 7.7 16.5 11.9 2.2 3.3 1.34 -32.1 0.91 0.6 -8.5 SNTORIA 0.21 0.32 56.1% Buy 114 0.53 3.6 4.5 5.6 4.5 0.0 4.9 0.55 -62.4 0.19 7.9 -48.8 SPSETIA 1.79 2.21 23.5% Hold 7,236 1.34 9.9 13.7 18.0 13.0 4.2 5.0 3.00 -40.3 1.79 0.0 -23.2 SUNWAY 1.64 1.65 0.6% Sell 7,993 0.82 12.5 13.7 13.1 12.0 4.6 4.6 1.72 -4.7 1.34 22.7 12.7 PROPERTY REIT CMMT 1.03 1.17 13.6% Hold 2,106 0.54 6.1 6.7 17.0 15.4 6.4 6.9 1.21 -14.9 0.99 4.0 2.0 SUNREIT 1.92 2.05 6.8% Hold 5,655 0.64 9.6 10.7 20.0 18.0 5.0 5.6 1.97 -2.5 1.61 19.3 11.0 POWER & UTILITIES MALAKOF 0.87 0.93 7.5% Buy 4,227 1.16 5.1 5.7 17.0 15.2 6.5 6.6 1.03 -16.0 0.75 16.1 8.1 PETDAG 23.20 25.90 11.6% Sell 23,048 0.79 105.7 108.1 21.9 21.5 3.8 3.9 28.48 -18.5 22.94 1.1 -12.5 PETGAS 15.98 16.50 3.3% Sell 31,620 1.00 97.3 98.3 16.4 16.3 4.6 4.6 20.00 -20.1 15.76 1.4 -16.8 TENAGA 13.60 16.40 20.6% Buy 77,342 1.26 97.9 98.8 13.9 13.8 4.0 4.0 16.00 -15.0 11.24 21.0 0.0 YTLPOWR 0.75 0.77 2.7% Sell 5,756 0.99 8.0 8.3 9.4 9.1 6.7 6.7 1.24 -39.5 0.75 0.0 -9.6 TELECOMMUNICATIONS AXIATA 4.96 4.95 -0.2% Sell 45,278 1.63 9.9 13.3 49.9 37.2 1.7 2.3 5.28 -6.1 3.20 55.0 26.2 DIGI 4.97 4.25 -14.5% Sell 38,642 1.09 19.7 20.6 25.2 24.1 3.8 3.9 5.10 -2.5 4.02 23.6 10.4 MAXIS 5.39 4.75 -11.9% Sell 42,152 0.92 20.3 20.5 26.5 26.3 3.7 3.7 5.89 -8.5 5.13 5.1 0.7 TM 4.07 3.51 -13.8% Sell 15,322 2.09 24.8 25.2 16.4 16.1 3.0 3.1 4.68 -13.0 2.11 92.9 53.0 ELSOFT 0.89 0.80 -9.6% Sell 590 0.70 4.4 5.3 19.9 16.6 3.6 4.3 1.50 -41.0 0.77 15.7 -18.8 INARI 1.52 2.10 38.2% Buy 4,831 1.04 6.3 8.0 24.0 19.0 3.3 4.2 2.48 -38.6 1.22 24.6 1.3 MPI 8.49 9.00 6.0% Sell 1,689 0.94 63.0 70.8 13.5 12.0 3.2 3.4 13.20 -35.7 8.49 0.0 -14.7 -30.0 TECHNOLOGY Semiconductor & Electronics N2N 0.74 1.02 38.8% Buy 439 0.86 3.7 4.3 20.1 17.2 4.1 4.1 1.31 -43.9 0.70 5.0 SKPRES 1.20 1.57 30.8% Buy 1,688 1.15 7.8 9.9 15.4 12.2 3.3 4.1 1.46 -17.8 0.95 27.0 14.3 UNISEM 2.04 1.88 -7.8% Sell 1,483 0.73 7.6 12.4 26.8 16.4 2.0 2.9 3.30 -38.2 2.04 0.0 -37.8 TRANSPORTATION Airlines AIRASIA 1.85 2.60 40.5% Buy 6,183 1.54 14.8 26.0 12.5 7.1 48.6 6.5 2.25 -17.8 1.37 35.4 -9.0 AIRPORT 8.31 8.47 1.9% Sell 13,788 1.05 35.0 39.9 23.8 20.8 1.8 2.0 9.50 -12.5 6.60 25.9 -0.8 Freight & Tankers PTRANS 0.20 0.44 125.6% Buy 277 0.74 2.9 3.5 6.8 5.7 5.2 6.3 0.32 -38.1 0.19 2.6 -17.0 TNLOGIS 0.53 0.77 45.3% Buy 238 0.59 -1.2 3.8 na 14.1 0.0 0.0 1.04 -49.0 0.42 26.2 -27.9 WPRTS 3.92 3.83 -2.3% Sell 13,367 0.79 21.3 22.9 18.4 17.1 4.0 4.4 4.15 -5.5 3.29 19.1 8.3 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) % upside Recom Market Cap. (S$m) Beta EPS (cent) FY19 PER (X) FY20 FY19 FY20 Div Yield (%) FY19 FY20 52week 52week % Chg High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 24.81 27.80 12.1% Hold 63,394 1.24 240.8 249.1 10.3 10.0 4.8 5.0 28.6 -13.4 22.65 9.5 4.7 OCBC 11.00 12.40 12.7% Buy 47,493 1.20 113.2 118.5 9.7 9.3 3.9 3.9 12.2 -9.8 10.36 6.2 -2.3 UOB 25.75 29.90 16.1% Buy 42,956 1.24 255.4 265.1 10.1 9.7 4.7 4.7 27.8 -7.3 23.39 10.1 5.6 4.05 3.65 -9.9% Sell 25,914 0.72 26.4 29.0 15.3 14.0 2.5 2.7 4.1 -1.5 2.99 35.5 29.8 PLANTATIONS WILMAR 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.
14. COMPANY UPDATE Wednesday , August 14, 2019 FBMKLCI: 1,592.88 Sector: Transportation THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Malaysia Airports Holdings Berhad TP: RM8.47 (+2.0%) Last Traded: RM8.31 Don’t Jump the Gun, Wait for New PSC Tan Kam Meng, CFA Tel: +603-2167 9605 SELL kmtan@ta.com.my Encouraging July traffic performance Malaysia Airports (MAHB) recorded total passenger movements of 9.2mn for its Malaysian operations in July-19, representing a YoY growth of 7.2% (Fig 1). The growth was spurred by strong domestic movements, which surged by 12.9% (Fig 3). Coming off a high base, the international movements chalked up a moderate growth of 2.3% in July-19 (Fig 4). In specific, passenger movements in the ASEAN and non-ASEAN sectors increased by 1.5% and 3.0% respectively (Figure 5 & 6). www.taonline.com.my Share Information Bloomberg Code MAHB MK Stock Code 5014 Listing Main Market 1659.2 Share Cap (mn) 13788.0 Market Cap (RMmn) 9.50/6.60 52-wk Hi/Lo (RM) 2850.5 12-mth Avg Daily Vol ('000 shrs) 54.5 Estimated Free Float (%) 1.1 Beta Major Shareholders (%) Management attributes the encouraging July performance to: 1) increased airline capacity and additional routes by AirAsia, Malaysian Airlines, Malindo, 2) hajj movements; and 3) new operations by Air Arabia. Khazanah -33.2 EPF - 12.3 Forecast Revision FY19 Forecast Revision (%) Figure 1: Encouraging 7.2% growth in passenger movements in July-19 mn 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 - 20.0% May-19 Sep-18 Jan-19 Jan-18 May-18 Sep-17 Jan-17 May-17 Sep-16 Jan-16 May-16 May-15 Sep-15 Consensus 542.4 630.7 TA's / Consensus (%) Previous Rating 107.0 105.1 Sell (Maintained) Net Gearing (%) -10.0% Jan-15 662.6 10.0% -5.0% Domestic 580.5 Financial Indicators 0.0% International 0.0 Net profit (RMm) 15.0% 5.0% Growth Source: MAHB & TA Research FY20 0.0 FY19 FY20 11.4 N.cash CFPs (sen) 161.0 28.4 P/CFPS (x) 5.2 29.3 ROE (%) 6.2 6.9 (1.3) nm (1.1) nm Share Performance (%) Price Change MAHB FBM KLCI NTA/Share (RM) Price/NTA (x) 1 mth (5.1) (4.6) 3 mth 12.3 (0.4) 6 mth 5.5 (5.7) 12 mth (11.1) (10.7) (12-Mth) Share Price relative to the FBMKLCI For 7M19, total passenger movements growth expanded to 4.9%, a tad higher than 4.5% a month ago. This was higher than our 2019 growth forecast of 3.0% but slightly lower than management’s target of 4.9%. However, in view of a slowing global economy and the implementation of departure tax, we keep our forecast unchanged. According to management, higher international movements was recorded for India, China, Korea, Singapore, Indonesia, Vietnam, UAE, Australia, Brunei and Saudi Arabia sectors. Source: Bloomberg Page 1 of 4
15. 14-Aug-19 No signs of abating for international movements in Istanbul Once again , Istanbul Sabiha Gokcen (ISG) recorded a relatively high movements in the international segment that offset a weak domestic performance. In July, the airport recorded 17.1% movement growth in the international segment and 8.7% contraction in the domestic segment. The double-digit growth in the international segment has lasted for 10th straight months since Oct-18 while the contraction in the domestic movements has been ongoing for past 9 months. Note that a stronger traffic seen in the international segment would bode well for MAHB due to favourable revenue mix. Figure 2 – ISG’s July-19 traffic expanded by 0.4% YoY mn 4000 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% 3500 3000 2500 2000 1500 1000 500 0 International Domestic Growth Source: MAHB & TA Research Wait for PSC decisions The implementation of departure tax in Malaysia, effective 1 September 2019, is expected to be insignificant to MAHB’s earnings. The impact on MAHB’s FY19 PSC collections for Malaysia operations and MAHB’s total revenue is estimated at 7.7% and 2.5% respectively for every 10% decline in passenger movements in the ASEAN and non-ASEAN sectors. However, in our opinion, the implementation of departure tax may cause a setback to the proposed regulatory asset base framework, where the final decision on airport tax (PSC) will be announced in Oct-19. In specific, we believe the timing of having a higher PSC, on top of departure tax, may lead to an outcry when citizens are tightening their belts to weather the slowdown in economy. As such, we advise investors not to jump the gun to invest in the stock before the final decision on PSC is made in Oct-19. FCFE FCFE valuation Rf Rm Beta CAP M P V of future F CF E - P erpectua l S ukuk S ha re outsta nding (mn sha re) FCFE/s hare 4% 12% 1.2 13.6% 15711.5 1000.0 1659.19 8.47 Forecast & Valuation We maintain our FY19-21 earnings projections for MAHB. Maintain Sell on MAHB with unchanged target price of RM8.47. Page 2 of 4
16. 14-Aug-19 Figure 3 : Malaysia’s Dom. passengers expanded by a strong 12.9% in July-19 mn 6.0 YoY growth (RHS) 15.0% 3.0 2.0 Figure 5: ASEAN sector grew 1.5% in July-19 25.0% 20.0% 1.9 1.8 2.0 2.0 2.0 2.0 2.1 2.1 1.9 2.0 2.0 2.3 2.1 1.9 2.2 2.1 2.0 2.2 2.3 2.2 2.0 2.0 2.1 2.4 2.1 2.0 2.2 2.2 2.0 2.3 2.3 15.0% 10.0% 5.0% 0.0% -5.0% Figure 7: Growth in ISG’s international sector surged to 17.1% in July-19. mn 2.8 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0 Pax (LHS) YoY growth (RHS) 40% YoY growth (RHS) 30.0% 25.0% 20.0% 15.0% 10% 0% Figure 8: Growth in ISG’s domestic sector remained subdued at -8.7% in July-19 Pax (LHS) 40% YoY growth (RHS) 30% 2000 20% 1500 10% 1000 0% 500 -10% 0 -20% May-19 Jan-19 Sep-18 Jan-18 May-18 Sep-17 May-17 Jan-17 Sep-16 May-16 Jan-16 Sep-15 May-15 Jan-19 May-19 Sep-18 May-18 Jan-18 Sep-17 Jan-17 May-17 Sep-16 May-16 Jan-16 Sep-15 May-15 Jan-15 -10% -20% 5.0% -5.0% 30% 20% 10.0% 0.0% '000 2500 Jan-15 Jul-19 Apr-19 Jan-19 Oct-18 Jul-18 Apr-18 Jan-18 Oct-17 Jul-17 Apr-17 Jan-16 Figure 6: Non-ASEAN sector grew 3.0% in July-19 YoY growth (RHS) Pax (LHS) 0.0% -5.0% May-19 Jan-19 Sep-18 May-18 Sep-16 Jan-18 - Sep-17 -10.0% May-17 2.5 Jan-17 1.0 May-16 -5.0% Jan-16 3.0 10.0% 5.0% Jan-17 0.0% 4.0 Oct-16 3.5 '000 1600 1400 1200 1000 800 600 400 200 0 25.0% 20.0% Jul-16 5.0% 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0 YoY growth (RHS) 5.0 Apr-16 10.0% 4.0 Pax (LHS) Non-ASEAN 1.8 1.7 1.8 1.7 1.7 1.6 2.0 2.0 1.9 1.8 1.8 2.3 2.1 1.9 2.0 2.1 2.0 1.9 2.2 2.3 2.0 2.0 2.1 2.5 2.3 2.2 2.3 2.2 2.0 2.1 2.3 2.3 2.0 2.0 2.2 2.5 2.3 2.2 2.2 2.2 2.0 2.1 2.4 15.0% 4.5 mn ASEAN 20.0% 1.7 1.7 1.8 1.7 1.8 1.7 1.9 1.8 1.7 1.8 1.8 2.1 1.9 1.8 2.0 2.0 2.0 2.0 2.1 2.1 1.9 2.0 2.0 2.3 2.1 1.9 2.2 2.1 2.0 2.2 2.3 2.2 2.0 2.0 2.1 2.4 2.1 2.0 2.2 2.2 2.0 2.3 2.3 Pax (LHS) 2.1 1.9 2.0 2.1 2.0 1.9 2.2 2.3 2.0 2.0 2.1 2.5 2.3 2.2 2.3 2.2 2.0 2.1 2.3 2.3 2.0 2.0 2.2 2.5 2.3 2.2 2.2 2.2 2.0 2.1 2.4 mn 5.0 Figure 4: Malaysia’s Int. passengers grew 2.3% in July-19 Source: MAHB & TA Securities Page 3 of 4
17. 14-Aug-19 Income Statement (RM'mn) FYE 31 Dec 2017 R evenue 4593.4 E B ITDA 1981.7 Dep & Amor (880.8) E B IT 1100.9 Net F ina ncing Cos t (720.6) As s ocia te & J V 20.6 EI (62.1) Adj. P B T 400.9 Ta x (98.4) P AT 239.8 Core Net Profit 301.9 Core E P S (s en) E P S g rowth (% ) P E (x) GDP S (s en) Dividend yield (% ) 13.8 >100 60.1 13.0 1.6 2018 4786.1 2077.5 (828.3) 1249.1 (745.6) 30.1 246.9 533.7 (53.3) 727.3 480.4 26.7 212.4 31.2 14.0 1.7 2019F 2020F 2021F 5424.7 5668.5 5885.2 2320.1 2498.6 2389.5 (970.8) (1019.2) (1049.0) 1349.2 1479.4 1340.5 (654.8) (620.3) (534.6) 22.2 24.4 26.9 0.0 0.0 0.0 716.6 883.5 832.7 (136.2) (220.9) (208.2) 580.5 662.6 624.5 580.5 662.6 624.5 31.5 18.2 26.4 15.0 1.8 36.5 15.7 22.8 17.0 2.0 34.2 (6.3) 24.3 17.0 2.0 Cas h Flow (RM'mn) FYE 31 Dec P BT Dep & Amor Cha ng es in WC Others CFO 2017 334.5 880.8 207.9 514.1 1937.3 2018 780.6 887.5 129.7 230.9 2028.7 2019F 716.6 970.8 1833.0 496.5 4016.9 2020F 883.5 1019.2 88.7 375.0 2366.5 2021F 832.7 1049.0 75.9 299.5 2257.2 Ca pex Others CFI (279.6) 120.6 (159.0) (462.3) (53.9) (516.1) (500.0) 0.0 (500.0) (300.0) 0.0 (300.0) (250.0) 0.0 (250.0) (182.5) (215.7) (248.9) (282.1) 0.0 0.0 0.0 0.0 0.0 0.0 (212.4) (1000.0) (829.2) (1119.9) (654.8) (620.3) (1011.7) (1335.6) (1116.1) (1902.4) (282.1) 0.0 0.0 (534.6) (816.7) Dividend E quity ra is ed Net B orrowing Others CFF Net Increa s e/(Decrea s e) in Ca766.5 sh F CF E 977.0 F CF /s ha re (R M) 0.2 176.9 654.6 0.1 Key As s umptions FYE 31 Dec P a s s eng er Movem. (mn) Aircra ft movement ('000) E ra ma n S a les / pa x (R M) R enta l (R M'mn) 2018 99.0 906.1 14.0 272.1 2017 96.6 879.7 13.2 255.3 2400.8 2671.9 0.5 2019F 102.0 933.3 14.4 284.3 164.1 470.6 0.1 2020F 105.1 961.3 14.8 298.0 1190.5 1499.5 0.3 2021F 108.2 970.9 15.3 312.4 Balance Sheet (RM'mn) 2017 FYE 31 Dec PPE 417.1 Inta ng ibles 17,409.6 Others 1,005.3 Non-current As s ets 18,832.0 2018 418.8 16,765.0 826.4 18,010.2 2019F 551.8 16,161.3 848.4 17,561.6 2020F 563.5 15,430.6 872.7 16,866.8 2021F 523.4 14,671.9 899.4 16,094.6 Inventories Tra de R ecb. Others Ca s h Current As s ets 140.6 758.5 1,180.3 1,293.4 3,372.8 127.9 1,283.5 1,401.0 1,450.5 4,262.9 222.9 1,174.1 1,401.0 3,851.3 6,649.3 233.0 1,242.4 1,401.0 4,015.4 6,891.7 241.9 1,306.0 1,401.0 5,205.9 8,154.7 Total As s ets 22,204.8 22,273.1 24,210.9 23,758.5 24,249.4 S ha re Ca pita l S ha re P remium Others R eta ined E a rning s MI Total Equity 5,114.3 0.0 1,018.1 2,583.3 0.0 8,715.7 5,114.3 0.0 989.0 3,037.4 0.0 9,140.7 5,114.3 0.0 989.0 3,369.0 0.0 9,472.3 5,114.3 0.0 989.0 3,749.6 0.0 9,852.9 5,114.3 0.0 989.0 4,092.0 0.0 10,195.4 B orrowing s 5,126.0 Other 6,136.7 Non-current Lia bilities 11,262.7 4,930.9 6,068.8 10,999.7 3,930.9 6,068.8 9,999.7 3,930.9 6,068.8 9,999.7 2,430.9 6,068.8 8,499.7 B orrowing s T. P a ya bles a nd other Current Lia bilites 423.3 1,803.1 2,226.4 212.4 1,920.3 2,132.6 1,000.0 3,738.9 4,738.9 0.0 3,905.9 3,905.9 1,500.0 4,054.3 5,554.3 Total Liabilities 13,489.1 13,132.4 14,738.6 13,905.6 14,054.0 NTA/s ha re (R M) P /NTA (x) E V/E BITDAR (x) (1.7) nm 23.6 (1.5) nm 22.2 (1.3) nm 18.8 (1.1) nm 17.0 (0.9) nm 17.3 Ratios FYE 31 Dec Profitability E BITDA ma rg in (% ) Core profit ma rg in (% ) R OE (% ) R OA (% ) 2017 2018 2019F 2020F 2021F 43.1 6.6 3.5 1.4 43.4 10.0 5.4 2.2 42.8 10.7 6.2 2.5 44.1 11.7 6.9 2.8 40.6 10.6 6.2 2.6 Liquidity Current R a tio (x) Quick R a tio (x) 1.5 1.5 2.0 1.9 1.4 1.4 1.8 1.7 1.5 1.4 Leverage Net g ea ring (x) Interes t Covera g e (x) 0.5 2.8 0.4 2.8 0.1 3.5 Net ca s h 4.0 Net ca s h 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. 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 Wednesday, August 14, 2019, 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
18. RESULTS UPDATE Wednesday , August 14, 2019 FBMKLCI: 1,592.88 Sector: Oil & Gas THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Petronas Chemicals Group Bhd TP: RM8.70 (+20.2%) Last Traded: RM7.24 Resilient in Spite of Tough Market Kylie Chan Sze Zan Tel: +603-2167 9601 BUY kyliechan @ta.com.my Review Petronas Chemicals Group’s (Pet Chem) 1H19 core profit of RM1.9bn (32% YTD) was within expectations, accounting for 47% of our full-year forecasts and consensus estimates. It was a commendable set of results despite a tough petrochemicals market. This is on the back of global trade tensions, which led to softer demand, and hence oversupplied market. Accordingly, this was evident in sustained product price weakness in 2Q19, whereby overall ASPs were weaker YoY, QoQ and YTD. In spite of the above, 2Q19 core net profit expanded 31% QoQ. This was driven by: 1) improved plant utilization of 100% (1Q19: 95%), 2) weaker MYR versus USD and 3) absence of seasonal staff costs recognized in 1Q19 (less than RM100mn). This more than offset the impact of lower average product prices for: 1) Olefins & Derivatives: -5% QoQ (YTD: -18%), and 2) Fertilizers & Methanol: stable QoQ (YTD: -8% YTD). YTD weakness (-32% YTD) was mainly attributed to similar factors that prevailed since 1Q19. They comprised a combination of weaker ASPs, sales volumes (-5% YTD) and product spreads. Additionally, this was exacerbated by:- 1) higher opex from increased plant turnaround (TA) activities, and 2) associates turned loss making. Nevertheless, bottomline contraction was partially cushioned by: 1) weaker MYR versus USD, 2) lower taxes, and 3) higher interest income. Improved plant utilization of 99% in 1H19 (1H18: 98%) led to higher production (+1% YTD). However, sales volume (-5% YTD) was lower due to inventory build-up in preparation for heavy statutory plant turnaround (TA) activity in 3Q19. In 2Q19, the group achieved its highest quarterly production output of 2.9mn tpa. This was underpinned by plant utilization exceeding 100% (actual: 103%) which led to peak production for urea and methanol. In 2Q19, Pet Chem undertook plant TA for PC Aromatics (completed: Apr19) and PC MTBE (completed: May-19). Pet Chem declared lower 1st interim DPS of 11 sen (2Q19: 14 sen). www.taonline.com.my Share Information Bloomberg Code PCHEM MK Stock Code 5183 Listing Main Market Share Cap (mn) 8,000 Market Cap (RMmn) 57,920 Par Value (RM) 0.10 52-wk Hi/Lo (RM) 10.20/7.08 12-mth Avg Daily Vol ('000 shrs) 7,417.0 Estimated Free Float (%) 18.0 Beta Major Shareholders (%) 0.6 Petronas - 64.4 EPF - 7.5 Skim Amanah Saham - 5 Forecast Revision (%) FY19 Forecast Revision (%) FY20 0.0 0.0 Core Net Profit (RM mn) 3,979.6 4,476.4 Consensus 3,945.5 4,484.8 100.9 99.8 TA/Consensus (%) Previous Rating Hold (Upgraded) Scorecard % of FY vs TA 47 Within vs Consensus 47 Within Financial Indicators Net Debt/Equity (x) FY19 FY20 Net Cash Net Cash ROA (%) 10.4 11.1 ROE (%) 12.3 12.9 NTA/Share (RM) 4.1 4.3 P/NTA (x) 1.8 1.7 Share Performance Price Change (%) PCHEM FBMKLCI 1 mth (13.8) 3 mth (17.9) (3.3) 0.3 6 mth (14.4) (4.3) 12 mth (20.1) (10.6) (12-Mth) Share Price relative to the FBMKLCI Key Takeaways from Conference Call On the back of US-China trade tensions, Pet Chem has benefited via improved sales volumes to China. However, due to product price weakness, this did not provide a boost to profits. RAPID will gradually ramp up over 3 years, starting with 60% plant utilization. On the back of this, management guided negligible contribution Source: Bloomberg Page 1 of 4
19. 14-Aug-19 from RAPID in FY19 , and breakeven profits in FY20. This is underpinned by single-digit EBIT margin and EBITDA contribution at the early stage. Statutory plant TA (duration: circa 50 days) planned for 3Q19 shall involve the Group’s ethylene cracker (capacity: 400k tpa) and its related downstream plants. Meanwhile, PC Fertilizer Sabah (formerly known as SAMUR) is scheduled for maintenance in 4Q19. Impact Maintain earnings estimates. Valuation We downgrade Pet Chem’s target multiple to 9.0x CY20 EV/EBITDA (previous: 9.5x). Correspondingly, our target price (TP) for Pet Chem is lowered to RM8.70 (previous: RM9.10). This is in-line with de-rating of regional peers to 8.0x CY20 EV/EBITDA (previous: 9.0x). We believe that Pet Chem’s premium versus its peers is justified given its cheap gas feedstock advantage, superior balance sheet, and capacity expansion at RAPID. Since we downgraded Pet Chem back in May-19, its share price has retraced by 17%. Therefore, we believe the risk-reward ratio has turned attractive at this juncture. As such, we upgrade the stock to Buy (previous: Hold). Page 2 of 4
20. 14-Aug-19 Figure 1 : Quarterly Results Analysis YE 31 Dec (RM mn) Revenue Core EBITDA 2Q19 1Q19 QoQ 2Q18 YoY FY19 FY18 4,337.0 4,130.0 5.0 4,733.0 (8.4) 8,467.0 9,684.0 (12.6) 1,534.0 1,249.0 22.8 1,798.0 (14.7) 2,783.0 3,771.0 (26.2) Depreciation (405.0) Net Finance Costs Associates EI Pretax Profit (400.0) 1.3 (812.0) (811.0) 0.1 80.0 87.0 (8.0) 77.0 3.9 167.0 119.0 40.3 (24.0) (4.2) 8.0 >-100 (47.0) 25.0 >-100 (12.0) >-100 37.0 Minority Interest (0.5) (23.0) 1,223.0 Taxation Reported Net Profit (407.0) YoY 893.0 37.0 (111.0) (80.0) 38.8 (8.0) (11.0) (27.3) 12.0 >100 25.0 1,495.0 (18.2) 2,116.0 (115.0) (8.0) (273.0) 2,831.0 >-100 (25.3) (3.5) (191.0) (344.0) (44.5) 0.0 (19.0) (8.0) >100 1,104.0 802.0 37.7 1,372.0 (19.5) 1,906.0 2,479.0 (23.1) 1,067.0 814.0 31.1 1,360.0 (21.5) 1,881.0 2,752.0 (31.6) Core EPS (sen) 13.5 10.1 33.3 16.9 (19.7) 23.7 33.2 (28.7) DPS (sen) 11.0 - 11.0 14.0 Core Net Profit 14.0 Core EBITDA Margin 35% 30% 38% 33% 39% Core Net Margin 25% 20% 29% 22% 28% Figure 2: Quarterly Segmental Analysis YE 31 Dec (RM mn) 2Q19 1Q19 2Q18 QoQ% YoY% FY19 FY18 YoY% Olefins & Derivatives 2,349.0 2,749.0 2,754.0 (14.6) (14.7) 5,098.0 5,905.0 (13.7) Fertilisers & Methanol 1,976.0 1,367.0 2,002.0 44.6 (1.3) 3,343.0 3,789.0 (11.8) (14.3) >-100 26.0 5.0 (8.4) 8,467.0 9,684.0 (12.6) Revenue Others 12.0 14.0 Group 4,337.0 4,130.0 4,733.0 (23.0) (10.0) >-100 Olefins & Derivatives 649.0 733.0 945.0 (11.5) (31.3) 1,382.0 2,051.0 (32.6) Fertilisers & Methanol 913.0 587.0 878.0 55.5 4.0 1,500.0 1,657.0 (9.5) 1,562.0 1,320.0 1,823.0 18.3 (14.3) 2,882.0 3,708.0 (22.3) EBITDA Group EBITDA margin Olefins & Derivatives 28% 27% 34% 27% 35% Fertilisers & Methanol 46% 43% 44% 45% 44% Group 36% 32% 39% 34% 38% Figure 3: Earnings Summary FYE Dec (RM mn) 2017 2018 2019E 2020F 2021F Revenue 17,407.0 19,576.0 16,889.1 17,855.8 18,501.8 EBITDA 6,625.0 7,110.0 5,853.1 6,266.5 6,447.7 EBITDA margin 38.1 36.3 34.7 35.1 34.8 Pretax Profit (%) 5,236.0 5,650.0 4,577.2 5,148.7 5,370.1 Reported Net Profit 4,177.0 4,979.0 3,979.6 4,476.4 4,669.0 4,184.0 5,226.0 3,979.6 4,476.4 4,669.0 52.1 65.1 49.7 56.0 58.4 Core Net Profit EPS (sen) EPS growth (%) 34.0 24.9 (23.6) 12.5 4.3 PER (x) 13.9 11.1 14.6 12.9 12.4 DPS (sen) 27.0 32.0 25.0 27.0 29.0 (%) 3.7 4.4 3.5 3.7 4.0 Dividend Yield Page 3 of 4
21. 14-Aug-19 (TH I S P A GE IS IN TE N TI ON AL L Y L E F T B L AN K ) 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 Wednesday, August 14, 2019, the analyst, Kylie Chan Sze Zan, 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
22. SECTOR UPDATE Wednesday , August 14, 2019 FBMKLCI: 1,592.88 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Plantation Sector Underweight Lower-than-Expected Stockpile Angeline Chin Tel: +603-2167 9611 angelinechin@ta.com.my www.taonline.com.my Stockpile Continued to Decline Malaysia Palm Oil Board (MPOB)’s July-2019 palm oil data was a bit of a surprise with the stockpile, exports and imports defied expectations. Stockpiles fell by 0.8% MoM to 2.39mn tonnes, which were below street’s expectation of 2.47mn tonnes. Exports surprised us on the upside with 7.4% growth in July, beating consensus estimates of 2.1% to 4.1% MoM growth. Meanwhile, production came in above expectations with a 15.1% MoM increase to 1.74mn tonnes, attributable to seasonal factor. Domestic usage increased 17.6% MoM to 309k tonnes, while imports dropped by 63.8% MoM to 37k tonnes, which is lower than expectations. Figure 1: Movement in Stockpiles Source: MPOB, TA Research Production Entering Peak Season Trend CPO production increased by 15.1% MoM (+15.6% YoY) to 1.74mn tonnes. We believe the surge was mainly attributable to the low-base effect as harvest activities resumed after workers came back from Eid-Al-Fitr holidays. Besides, the growth may also be seasonal as production growth usually picks up from July onwards. The YTD production stood at 11.5mn tonnes (+10.6% YoY). Meanwhile, the July FFB yield surged by 12.7% MoM to 1.51 tonnes/ha. Cumulative FFB yield of 9.96 tonnes/ha was higher than 9.21 tonnes/ha recorded a year ago. Page 1 of 5
23. 14-Aug-19 Figure 2 : CPO Production vs. MoM Growth Figure 3: Malaysia Average FFB Yield Trend Source: MPOB, TA Research Source: MPOB, TA Research Strong Exports in July Exports increased by 7.4% MoM to 1.49mn (+24.1% YoY) in July after a sharp fall in June. All major destinations experienced a MoM decline of between 15.7% to 22.4%, except for India (+7.6% MoM) and Pakistan (+5.8% YoY). Cumulatively, total exports grew 15.2% YoY to 10.9mn tonnes. Looking forward, cargo surveyors, AmSpec and Intertek estimated that the palm oil exports for the first 10 days of Aug to increase by 39% and 35% to 512k and 503k tonnes, respectively. Figure 4: Exports vs. MoM Growth Figure 5: Breakdown by Major Destinations Source: MPOB, TA Research Source: MPOB, TA Research Maintain CPO Price at RM2,100/tonne The YTD average CPO price stood at circa RM1,976/tonne. CPO futures reacted positively yesterday to the MPOB data and surged to RM2,150 to RM2,200/tonne for the Sep to Nov contracts. No change to our average CPO price forecast of RM2,100/tonne in 2019. We are expecting a stronger CPO prices in 2H, supported by strong exports and higher biodiesel mandate in both Malaysia and Indonesia, which is expected to ramp up biodiesel consumption. Having said that, the expected CPO price of RM2,100/tonne is still much lower than the 5-year average CPO price of RM2,452/tonne. Maintain Underweight We reiterate our Underweight recommendation on the Plantation sector. We maintain Sell recommendations for all of the plantation stocks under our coverage except KFima, which is currently under Hold with a TP of RM1.89/share. Re-rating catalysts include: 1) Extreme weather change, which leads to higher CPO price, 2) Downward revisions in soybean production estimates, 3) Better-than-expected demand in China and India and 4) Higher CPO demand due to biodiesel mandates. Page 2 of 5
24. 14-Aug-19 Figure 6 : CPO Prices Figure 7: Oceanic Nino Index (ONI) Source: Bloomberg, TA Research *above the +0.5 anomaly for warm (El Nino) events *below the -0.5 anomaly for cold (La Niña) events Source: NOAA, TA Research Figure 8: Monthly Palm Oil Data '000 tonnes Production Stock Export Dom. Usage Import Jul-18 1,503 2,232 1,197 306 44 Jun-19 1,511 2,411 1,383 263 101 Jul-19 1,738 2,392 1,485 309 37 % MoM 15.1 (0.8) 7.4 17.6 (63.8) % YoY 15.6 7.2 24.1 0.9 (16.7) 7M2018 10,423 9,431 1,832 339 7M2019 11,524 10,862 2,055 569 YoY % 10.6 15.2 12.2 67.6 Jul-19 144 40 91 456 81 673 1,485 % MoM (20.9) (22.4) (15.7) 7.6 5.8 24.4 7.4 % YoY (8.3) 23.7 (18.8) 245.6 4.4 (1.8) 24.1 7M2018 1,093 303 878 1,521 706 4,931 9,431 7M2019 1,268 388 1,098 3,041 593 4,475 10,862 YoY % 15.9 28.1 25.1 99.9 (15.9) (9.2) 15.2 Source: MPOB, TA Research Figure 9: Monthly Palm Oil Exports Data '000 tonnes EU-25 US China India Pakistan Others Total Jul-18 157 33 112 132 78 685 1,197 Jun-19 182 52 108 424 77 541 1,383 Source: MPOB, TA Research Figure 10: CPO Production Figure 11: CPO Production (YoY Growth) Source: MPOB, TA Research Source: MPOB, TA Research Page 3 of 5
25. 14-Aug-19 Figure 12 : Stock vs. CPO Price Figure 13: MYR/USD Source: MPOB, Bloomberg, TA Research Source: Bloomberg, TA Research Figure 14: Soybean Oil’s Premium Over Palm Oil (In USD/ Tonne) Figure 15: Tonne) CPO Differential to Gas Oil (In USD/ Source: Bloomberg, TA Research Source: Bloomberg, TA Research Figure 16: Peers’ Comparison Table Company Malaysia (RM) SD Plantation IOI Corp KLK FGV IJMP TSH United Malacca KFIMA Singapore (SGD) Wilmar Call Price (RM) TP (RM) PER (x) CY19 CY20 Sell Sell Sell Sell Sell Sell Sell Hold 4.60 4.20 23.56 1.09 1.37 0.90 5.15 1.75 4.07 3.81 19.17 1.03 1.27 0.84 5.19 1.89 61.7 33.0 36.4 (23.5) 49.1 40.5 162.7 15.6 32.8 28.7 32.0 (30.6) 25.8 25.6 36.8 14.1 2.2 2.7 2.1 0.9 0.9 0.8 0.7 0.5 Sell 4.05 3.65 18.8 15.0 1.2 P/BV (x) CY19 CY20 Dividend Yield (%) ROE (%) CY19 CY20 CY19 CY20 2.2 2.6 2.1 1.0 0.9 0.8 0.7 0.5 1.3 1.8 1.3 0.0 1.5 0.8 1.6 5.1 2.0 2.1 1.5 0.0 1.5 1.2 1.6 5.1 3.7 8.3 5.9 (3.9) 1.8 2.2 0.4 4.0 6.9 9.2 6.5 (3.1) 3.4 3.4 1.9 4.3 1.1 2.0 2.5 6.2 7.5 Source: Bloomberg, TA Research Page 4 of 5
26. 14-Aug-19 (TH I S P A GE IS IN TE N TI ON AL L Y L E F T B L AN K ) Sector Recommendation Guideline OVERWEIGHT: The industry, as per our coverage universe, is expected to outperform the FBMKLCI over the next 12 months. NEUTRAL: The industry, as per our coverage universe, is expected to perform in line with the FBMKLCI over the next 12 months. UNDERWEIGHT: The industry, as per our coverage universe, is expected to underperform the FBMKLCI over the next 12 months. 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 Wednesday, August 14, 2019, the analyst, Angeline Chin Swee Tyng, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 5 of 5
27. COMPANY UPDATE Wednesday , August 14, 2019 FBMKLCI: 1,592.88 Sector: Oil and Gas THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM5.00 (+22.9%) Serba Dinamik Holdings Bhd Last Traded: RM4.09 Unrelenting Orderbook Replenishment Momentum Kylie Chan Sze Zan Tel: +603-2167 9601 kyliechan@ta.com.my The News Serba Dinamik Holdings Bhd (Serba) announced contract wins totalling estimated RM1.1bn in Uzbekistan and Malaysia (Figure 1). Figure 1: Contract Details Scope EPCC for 90 Ton Per Day Chlorine Processing Plant at Hazarasp Free Economic at the Khorezm Region, Republic of Uzbekistan & 26MW/h Steam Turbine Independent Power Client Tenure Hazarasp Chlor Aug 2019 - Alkali LLC FC Aug 2021 Petronas Jun 2019 - Carigali Sdn Bhd June 2020 Location Segment Uzbekistan EPCC Malaysia O&M Plant Provision of Maintenance Services for Weir Gas Compressor BUY www.taonline.com.my Share Information Bloomberg Code SDH MK Stock Code 5279 Listing Main Market Share Cap (mn) 1,468.5 Market Cap (RMmn) 6,006.2 52-wk Hi/Lo (RM) 4.29/3.55 12-mth Avg Daily Vol ('000 shrs) 2,899 Estimated Free Float (%) 26.0 Beta 1.1 Major Shareholders (%) Mohd Abdul Karim - 23.6 Abdul Kadier Sahib - 19.0 Awang Daud - 10.4 EPF - 7.3 Forecast Revision Provison of Maintenance of Capstone Microturbine Generator Petronas Jun 2019 - Carigali Sdn Bhd June 2022 Malaysia O&M The estimated contract value for the EPCC contract is USD250.3mn (RM1.03bn, RM4.10/MYR). Meanwhile, the O&M contracts have no specific value as the contracts are on a call-out basis. Our Take We are positive on Serba’s unrelenting orderbook replenishment momentum within and outside Malaysia. YTD, Serba has announced new contract wins totalling an estimated RM2.6bn. This falls within our 2019 orderbook replenishment assumption of RM4.2bn (EPCC: RM1.4bn, O&M: RM2.8bn). Our assumption includes contract renewals and adhoc works (that will not be officially announced). Inclusive of these new projects, we estimate that Serba has current outstanding orderbook of RM9.0bn (EPCC: RM3bn, O&M: RM6bn). This implies robust revenue visibility of approximately 3 years. Impact Maintain earnings forecasts. Valuation We have a Buy recommendation on Serba with target price (TP) of RM5.00 based on 15x CY19 PER. Our affinity for Serba is underpinned by: 1) resilient demand for brownfield maintenance services, 2) diversification into utilities business via ownership stakes for stable recurring income, 3) global clientele and not reliant on Petronas, 4) new capacity at RM259mn Bintulu Integrated Energy Service Hub (start: 2020), 5) major expansion and real estate ventures (target completion: 4Q20-21) at Pengerang Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY19 FY20 0.0 0.0 454.7 492.1 472.7 558.3 96 89 Buy (Maintained) Financial Indicators Net Debt / Equity (x) ROA (%) ROE (%) NTA/Share (RM) Price/NTA (x) FY19 0.5 9.5 18.8 1.6 2.5 Share Performance (%) Price Change SDH 1 mth (1.2) 3 mth 2.0 6 mth 6.5 12 mth 7.1 FY20 0.5 9.3 17.8 1.9 2.2 FBM KLCI (4.6) (0.4) (5.7) (10.7) (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 3
28. 14-Aug-19 Integrated Development (GDC: RM1.8bn), and 6) robust orderbook with strong earnings visibility. Earnings Summary Income Statement Balance Sheet FYE 31 Dec (RMmn) 2017 Revenue 2018 2,722.3 3,283.2 2019E 3,780.0 2020F 4,072.5 2021F 4,413.0 Core EBITDA 471.1 559.1 667.5 740.3 804.5 Depreciation (69.0) (89.9) (112.1) (141.5) (152.9) Net finance cost (33.9) (49.6) (58.9) (60.9) (68.8) (2.1) 10.3 10.0 10.2 10.4 (20.0) 4.2 0.0 0.0 0.0 434.1 506.5 548.1 593.3 Associate & JV Forex & EI PBT 346.1 Taxation & Zakat (41.3) MI 3.3 Net Profit Core Net Profit (44.8) (1.4) (52.3) (56.6) (61.2) 0.5 0.5 0.5 308.1 387.9 454.7 492.1 532.6 328.1 383.7 454.7 492.1 532.6 Per Share Data* FYE 31 Dec (RMmn) PPE 2017 2018 2019E 2020F 2021F 658.1 1,146.5 1,439.3 1,816.9 1,964.0 JV & Associates 44.1 314.6 324.6 334.8 345.3 Others 10.1 7.4 7.4 7.4 7.4 712.4 1,468.6 1,771.3 2,159.1 2,316.6 Non-Current Assets Inventories 577.8 848.3 1,035.6 1,126.9 1,221.1 Trade receivables 880.3 1,018.5 1,172.6 1,263.3 1,368.9 Cash and equivalents 300.8 760.8 643.1 600.0 800.5 89.2 142.9 142.9 142.9 142.9 Others Current Assets 1,848.1 2,770.4 2,994.2 3,133.1 3,533.4 TOTAL ASSETS 2,560.4 4,238.9 4,765.5 5,292.2 5,850.0 LT Borrowings 24.8 1,107.5 1,204.6 1,301.6 1,398.7 Others 16.2 33.5 33.5 33.5 33.5 41.0 1,141.0 1,238.1 1,335.2 1,432.2 Core EPS (sen) 24.6 26.3 31.0 33.5 36.3 Non-Current Liabilities DPS (sen) 6.8 8.0 9.0 10.0 11.0 Trade payables 423.4 359.7 414.1 446.2 483.5 BVPS (RM) 0.9 1.4 1.6 1.9 2.1 ST Borrowings 681.3 604.0 656.9 709.8 762.8 NTA/Share (RM) 0.9 1.4 1.6 1.9 2.1 Others 27.1 35.4 35.4 35.4 35.4 Current Liabilities 1,131.7 999.1 1,106.4 1,191.4 1,281.6 Shareholders Equity 1,383.9 2,094.7 2,417.3 2,762.5 3,133.6 3.9 4.1 3.6 3.1 2.6 Total Equity 1,387.7 2,098.8 2,420.9 2,765.7 3,136.2 TOTAL E&L 2,560.4 4,238.9 4,765.5 5,292.2 5,850.0 Ratios FYE 31 Dec (RMmn) 2017 2018 2019E 2020F 2021F Valuations Core PER (x) 16.6 15.5 13.1 12.1 11.2 Div. Yield (%) 1.7 2.0 2.2 2.5 2.7 P/BV (x) 4.3 2.9 2.5 2.2 1.9 FCF Yield (%) (3.4) (8.7) (1.4) 0.2 4.6 Profitability ratios MI Cash Flow Statement FYE 31 Dec (RMmn) 2017E 2019E 2020F Pretax profit 346.1 434.1 2018 506.5 548.1 2021F 593.3 Depreciation 69.0 89.9 112.1 141.5 152.9 33.9 49.6 58.9 60.9 68.8 2.1 (10.3) (10.0) (10.2) (10.4) (361.8) (444.7) (287.1) (150.0) (162.5) (41.3) (44.8) (52.3) (56.6) (61.2) Core EBITDA margin (%) 17.3 17.0 17.7 18.2 18.2 Net interest Core EBIT margin (%) 14.8 14.3 14.7 14.7 14.8 JV & Associate PBT margin (%) 12.7 13.2 13.4 13.5 13.4 Changes in WC Core Net Margin (%) 12.1 11.7 12.0 12.1 12.1 Tax Core ROE (%) 23.7 18.3 18.8 17.8 17.0 Others 37.3 23.4 0.0 0.0 0.0 Core ROA (%) 12.8 9.1 9.5 9.3 9.1 Operational cash flow 85.3 97.1 328.2 533.7 580.8 (265.4) Current ratio (x) 1.6 2.8 2.7 2.6 2.8 Interest income Quick ratio (x) 1.1 1.9 1.8 1.7 1.8 Liquidity ratios (586.7) (404.8) (519.1) (300.0) 3.1 12.5 12.5 16.6 14.7 Investment in JV/Associate (34.0) 0.0 0.0 0.0 0.0 Others (57.8) (299.2) 0.0 0.0 (354.1) (873.4) Capex Leverage ratios Investing cash flow Equity/total liabilities (x) 1.2 1.0 1.0 1.1 1.2 Net debt / equity (x) 0.3 0.5 0.5 0.5 0.4 Growth ratios (392.3) 0.0 0.0 (285.3) Issue of shares 396.4 416.2 Dividend paid (69.4) (107.2) (132.2) (146.9) (161.5) Net borrowings 0.0 (502.5) 0.0 90.0 206.5 150.0 150.0 150.0 (37.1) (62.1) (71.5) (77.5) (83.5) 6.0 800.0 0.0 0.0 Financial cash flow 385.9 1,253.3 (53.6) (74.3) (95.0) Net cash flow 117.1 477.0 (117.7) (43.1) 200.5 Beginning Cash 187.4 158.5 760.8 643.1 600.0 0.0 0.0 0.0 0.0 635.5 643.1 600.0 800.5 Revenue (%) 25.5 20.6 15.1 7.7 8.4 Interest paid Core Net Profit (%) 25.2 17.0 18.5 8.2 8.2 Others 0.0 Key Assumptions Orderbook Replenishment 3,500 3,800 4,000 Forex *based on 1,468mn shares End Cash (3.7) 300.8 Page 2 of 3
29. 14-Aug-19 (TH I S P A GE IS IN TE N TI ON AL L Y L E F T B L AN K ) 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 Wednesday, August 14, 2019, the analyst, Kylie Chan Sze Zan, 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
30. RESULTS UPDATE Wednesday , August 14, 2019 FSSTI: 3,146.73 Sector: Plantation THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Wilmar International Limited TP: SGD3.65 (-9.9%) Last Traded: SGD4.05 Another Weak Quarter Angeline Chin SELL Tel: +603-2167 9611 angelinechin@ta.com.my Review Wilmar's 2QFY19 results came in below expectations. Excluding exceptional items, core net profit plunged by 49.7% YoY to USD176.8mn as a result of lower crush margins due to impact of African swine fever (ASF), lower contributions from China associates and higher finance cost. 1HFY19 core net profit decreased by 20.2% YoY to USD427.1mn, accounting for 33% and 25% of our and consensus' full-year estimate. Tropical Oils. Despite lower CPO price and production yields, 1HFY19 PBT increased by 40.8% to USD361.2mn mainly attributable to better performance of the manufacturing and merchandising business coupled with better sales volume and margins. Meanwhile, 1HFY19 FFB production decreased by 8.1% YoY to 1.9mn tonnes as the yield decreased from 10.7 tonnes/ha to 9.9 tonnes/ha. Overall, sales volume for manufacturing & merchandising increased by 9.1% YoY to 12.4mn tonnes. Oilseeds & Grains. The group registered strong contribution from the Consumer Products, Rice and Flour milling businesses. However, 1HFY19 PBT still plunged by 67.5% YoY to USD150.3mn, dragged by poor results from the crushing business (which had been impacted by the ASF outbreak in China). Overall sales volume decreased by 1.1% YoY to 17.4mn tonnes. Sugar. 1HFY19 LBT narrowed to USD67.7mn (1HFY18: USD85.2mn), underpinned by stronger performance from refining and merchandising activities. Overall sales volume increased by 11.6% to 5.6mn tonnes in 1QFY19, mainly due to contributions from Shree Renuka Sugars Limited milling operations (which became a subsidiary in June 2018). Lastly, contributions from JV & Associates decreased by 52.9% YoY to USD42.8mn, dragged by weaker contributions from the African associates and investments in China. The group declared a lower interim dividend of SGD0.03/share for the quarter under review (SGD0.035/share in 2QFY18). Impact FY19 and FY20 earnings forecasts are revised downward by 21.6% and 10.3%, respectively, after incorporating lower margins and contribution from JV and associates. We also take this opportunity to introduce our FY21 earnings forecast of USD1,428.0mn. Outlook Management expects the margins of its crushing business and other segments to perform better in 2H. However, management expects the ASF’s impact on China soybean meal demand is likely to take several years to eradicate. On the other hand, the group has submitted application to list its China operations - Yihai Kerry Arawana Holdings (YKA) on the Shenzhen Stock Exchange. YKA is aiming to raise as much as RMB13.87bn by selling a stake of about 10% of its total pro forma share capital. The proceeds will be used to fund YKA’s capex requirements. The listing date has yet to be fixed. www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (SGD mn) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) WIL SP F34 SGX Mainboard 6,333 25,649 4.11/2.99 5,521 30.7 0.75 Archer Daniels (24.86) PPB Group Bhd (18.52) Forecast Revision Forecast Revision (%) Net profit (USD mn) Consensus TA's / Consensus (%) Previous Rating FY19 FY20 (10.3) (8.4) 1012.3 1269.6 1759.0 1871.0 57.5 67.9 Sell (Maintained) Financial Indicators Net Debt / Equity (%) FCPS (sen) Price / CFPS (x) ROE (%) ROA (%) NTA/Share (USD) Price/NTA (x) FY19 127.4 (11.7) nm 6.2 2.2 1.9 1.6 FY20 125.0 (0.7) nm 7.5 2.7 2.0 1.5 % of FY 33 25 Below Below WILMAR 7.7 15.1 22.7 24.6 FSSTI (6.3) (2.4) (3.3) (3.0) Scorecard vs TA vs Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FSSTI Source: Bloomberg Page 1 of 3
31. 14-Aug-19 Valuation Target price for Wilmar has been revised upward to SGD3 .65/share from SGD3.59/share previously as we attach higher valuation to the oilseeds & grains segment and consumer segment. The new TP translates into CY20 PER of 13.5x. YTD, Wilmar share price has appreciated by more than 30%. We believe that the rally was mainly triggered by the proposed IPO exercise for its China operations, which has gained some interest from investors. We maintain SELL on Wilmar and believe that the stock has run way ahead of fundamentals. Figure 1: Wilmar’s Sum-of-Part Valuation Table Segments Palm & laurics Oilseeds & grains Consumer products Plantations Sugar Others Net debt (holding co.) SOP (USD) Share capital (mn) SOP/share (SGD) 10% Discount Target PER (x) 13.0 15.0 21.0 16.0 15.0 9.0 Segment value (USDmn) 9,583 1,677 5,019 2,248 663 76 (242) 19,024 6,333 4.06 3.65 Figure 2: Breakdown of Revenue (USD mn) Tropical Oils - Plantation - Manufacturing Oilseeds & Grains - Manufacturing - Consumer Products Sugar - Milling - Processing 2QFY18* 4,256 14 4,242 1QFY19 3,820 11 3,808 2QFY19 3,768 12 3,756 QoQ % (1.3) 2.4 (1.4) YoY % (11.5) (14.0) (11.5) 1HFY18* 8,651 27 8,623 1HFY19 7,588 23 7,565 YoY % (12.3) (15.9) (12.3) 5,299 3,944 1,354 5,384 3,384 2,000 4,847 3,524 1,323 (10.0) 4.1 (33.9) (8.5) (10.7) (2.3) 10,957 7,628 3,330 10,231 6,908 3,323 (6.6) (9.4) (0.2) 996 68 928 1,008 133 875 948 166 782 (5.9) 24.5 (10.6) (4.9) 143.6 (15.8) 1,832 114 1,718 1,956 299 1,656 6.8 163.3 (3.6) 2QFY18* 154.9 290.2 (46.2) 1QFY19 183.8 91.1 1.7 2QFY19 177.3 59.2 (69.4) QoQ % (3.5) (35.0) nm YoY % 14.5 (79.6) (50.1) 1HFY18* 256.5 462.8 (85.2) 1HFY19 361.2 150.3 (67.7) YoY % 40.8 (67.5) 20.6 Figure 3: Breakdown of PBT (USD mn) Tropical Oils Oilseeds & Grains Sugar *Restated Page 2 of 3
32. 14-Aug-19 2QFY19 Results Analysis (USD mn) FYE 31 Dec Turnover Op. profit Net interest income EI Associates/JV Pretax Taxation MI Reported net profit Core net profit Core EPS GDPS EBIT Margin Pretax Margin Tax Rate 2QFY18* 10,751.1 481.5 (75.9) (35.4) 49.6 419.7 (74.9) (28.4) 316.4 351.8 1QFY19 10,444.5 394.0 (107.9) 19.3 20.9 326.4 (42.5) (14.3) 269.7 250.3 2QFY19 9,782.1 299.4 (121.4) (6.2) 21.9 193.7 (19.9) (3.2) 170.6 176.8 (US ¢) (SGD ¢) 5.6 3.0 4.0 0.0 (%) (%) (%) 4.5 3.9 17.8 3.8 3.1 13.0 QoQ (%) (6.3) (24.0) (12.5) nm 4.7 (40.7) 53.2 77.6 (36.7) (29.4) YoY (%) (9.0) (37.8) (59.9) 82.5 (55.8) (53.9) 73.5 88.8 (46.1) (49.7) 1HFY18* 21,888.6 781.3 (127.8) (15.7) 91.1 729.0 (148.4) (60.9) 519.7 535.3 1HFY19 20,226.5 693.4 (229.3) 13.1 42.8 520.1 (62.4) (17.5) 440.3 427.1 2.8 3.5 8.5 3.0 6.7 3.5 3.1 2.0 10.3 3.6 3.3 20.4 3.4 2.6 12.0 YoY (%) (7.6) (11.3) (79.5) (183.8) (52.9) (28.7) 58.0 71.3 (15.3) (20.2) *Restated Earnings Summary FYE Dec 31 Revenue EBITDA EBITDA margin Pretax profit Net profit Core net profit EPS Core EPS Core EPS growth PER GDPS Div yield Core ROE (USD mn) FY17 43,573.9 2,138.9 4.9 1,562.5 1,195.7 1,023.8 18.9 16.2 4.8 18.6 10.0 2.5 6.7 (%) (US¢) (US¢) (%) (x) (SGD¢) (%) (%) FY18 44,497.7 2,586.3 5.8 1,617.4 1,153.3 1,304.8 18.2 20.6 27.4 14.6 10.5 2.6 8.2 FY19F 43,637.7 2,557.8 5.9 1,331.9 1,012.3 1,012.3 16.0 16.0 (22.4) 18.8 8.0 2.0 6.2 FY20F 46,456.6 2,964.8 6.4 1,670.5 1,269.6 1,269.6 20.0 20.0 25.4 15.0 10.0 2.5 7.5 FY21F 48,925.8 3,220.8 6.6 1,879.0 1,428.0 1,428.0 22.5 22.5 12.5 13.3 12.0 3.0 8.0 Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy 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 Wednesday, August 14, 2019, the analyst, Angeline Chin, 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
33. Wednesday , 14 August, 2019 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only L oc al Te ch n ic al R ep o r ts 1. D ai l y Te ch n ic a l St o ck s W at ch 2. D ai l y Mon e y F low of T e ch n i c a l St o ck W at ch 3. D ai l y Mon e y F low of FB MK L CI 4. D ai l y S t o c k S c r e e n 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
34. Technical View Wednesday , August 14, 2019 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Technical Stock Watch Malaysia FBM KLCI: 1,592.88 (-22.17, -1.37%) Chartist: Stephen Soo Close Name 13/Aug FBMKLCI 1592.88 Tel: +603-2167 9607 Change High Low (22.17) 1,615.24 1,591.29 Bollinger Bands Lower Mid RSI Upper 14d stsoo@ta.com.my Moving Averages 10d 30d www.taonline.com.my DMI 50d 1,600.60 1,642.24 1,683.88 33.77 1,624.93 1,655.68 1,655.70 MACD DMI MACD Recent Signal DMI MACD DI + DI - ADX Diff Line Signal Diff Signal Change 10.25 36.60 43.73 (26.35) (13.72) (9.60) (4.12) SELL SELL - - AFFIN 1.98 -0.02 2.00 1.97 1.98 2.04 2.10 32.23 2.02 2.06 2.08 13.91 27.80 23.05 (13.89) -0.03 -0.02 (0.00) SELL SELL - - ABMB 3.30 -0.08 3.38 3.30 3.38 3.62 3.86 23.93 3.53 3.67 3.72 6.50 38.23 36.24 (31.73) -0.09 -0.06 (0.03) SELL SELL - - AMBANK 3.98 -0.12 4.12 3.98 4.02 4.22 4.42 36.58 4.14 4.26 4.31 12.95 20.90 35.05 (7.95) -0.07 -0.05 (0.01) SELL SELL - - AXIATA 4.96 -0.04 5.00 4.82 4.87 5.06 5.25 48.92 4.98 5.09 4.98 18.63 22.29 25.39 (3.67) -0.02 0.01 (0.02) SELL SELL - - CIMB 5.00 -0.04 5.06 5.00 5.00 5.13 5.25 32.44 5.07 5.21 5.24 11.85 20.82 24.46 (8.98) -0.06 -0.05 (0.01) SELL SELL - - DIGI 4.97 -0.03 5.00 4.93 4.92 4.99 5.05 53.19 4.99 5.01 4.97 14.72 25.38 24.80 (10.67) 0.01 0.01 (0.00) SELL SELL - - GAMUDA 3.70 -0.02 3.74 3.69 3.60 3.79 3.99 47.81 3.71 3.83 3.70 14.16 25.84 25.96 (11.68) -0.01 0.01 (0.02) SELL SELL - - GENTING 6.05 -0.14 6.18 6.03 6.19 6.66 7.13 30.22 6.64 6.69 6.65 14.10 35.68 23.97 (21.58) -0.09 -0.02 (0.08) SELL SELL - - GENM 3.12 -0.10 3.19 3.10 3.06 3.52 3.98 37.60 3.60 3.44 3.36 19.47 38.33 35.51 (18.86) 0.01 0.08 (0.06) SELL SELL - - IHH 5.66 -0.07 5.69 5.63 5.68 5.75 5.81 48.98 5.73 5.77 5.72 13.82 12.72 10.75 1.11 0.00 0.00 (0.01) BUY SELL BUY - IOICORP 4.20 -0.02 4.22 4.16 4.15 4.21 4.27 49.56 4.20 4.23 4.24 22.68 14.51 16.55 8.17 -0.01 -0.02 BUY BUY MALAKOFF 0.87 -0.02 0.88 0.86 0.87 0.89 0.92 49.08 0.89 0.88 0.87 24.20 23.36 17.92 0.83 -0.02 -0.02 (0.00) BUY SELL BUY - MAXIS 5.39 -0.02 5.47 5.38 5.34 5.58 5.82 39.94 5.51 5.61 5.61 9.71 23.38 24.25 (13.66) -0.06 -0.03 (0.03) SELL SELL - - MAYBANK 8.56 -0.04 8.61 8.53 8.52 8.75 8.98 26.58 8.64 8.81 8.87 8.72 27.25 59.88 (18.54) -0.09 -0.08 (0.01) SELL SELL - - MBSB 0.84 -0.02 0.87 0.84 0.84 0.88 0.92 29.12 0.87 0.89 0.91 11.13 22.27 46.59 (11.14) -0.02 -0.01 (0.00) SELL SELL - - RHBBANK 5.55 -0.05 5.62 5.53 5.37 5.61 5.84 49.81 5.51 5.65 5.67 15.60 26.63 24.44 (11.03) -0.05 -0.05 (0.00) SELL SELL - - SIME 2.15 -0.04 2.19 2.15 2.11 2.20 2.29 46.47 2.17 2.23 2.26 16.85 16.23 21.76 0.62 -0.03 -0.03 (0.00) BUY SELL BUY - TENAGA 0.01 - 13.60 -0.22 14.00 13.58 13.49 13.75 14.02 54.30 13.81 13.81 13.49 18.64 15.19 12.09 3.45 0.09 0.11 (0.02) BUY SELL - TM 4.07 -0.02 4.09 4.02 3.85 4.23 4.62 47.64 4.07 4.25 4.05 19.39 27.85 33.20 (8.46) -0.01 0.03 (0.04) SELL SELL - - WPRTS 3.92 0.01 3.96 3.85 3.88 3.97 4.07 45.46 3.98 3.97 3.93 23.42 17.33 43.15 6.09 0.02 0.02 (0.01) BUY SELL - SELL AEMULUS 0.28 -0.02 0.30 0.28 0.25 0.29 0.32 58.72 0.29 0.27 0.24 32.40 25.68 32.40 6.72 0.01 0.02 (0.00) BUY SELL - - ARMADA 0.22 -0.01 0.23 0.22 0.21 0.23 0.25 54.49 0.23 0.23 0.22 19.29 17.57 34.06 1.73 0.00 0.00 (0.00) BUY SELL BUY - DIALOG 3.39 -0.02 3.43 3.38 3.36 3.45 3.54 50.61 3.42 3.41 3.36 19.88 16.91 30.13 2.96 0.01 0.02 (0.01) BUY SELL - - DNEX 0.26 -0.01 0.26 0.26 0.25 0.28 0.30 45.01 0.27 0.28 0.27 16.61 28.28 17.65 (11.66) 0.00 0.00 (0.00) SELL SELL - - FGV 1.09 0.01 1.09 1.06 1.03 1.09 1.15 46.23 1.09 1.11 1.12 20.79 24.70 17.15 (3.90) -0.02 -0.02 (0.00) SELL SELL - - GADANG 0.73 -0.05 0.78 0.73 0.72 0.85 0.97 34.77 0.79 0.87 0.87 14.17 36.20 35.59 (22.03) -0.03 -0.02 (0.01) SELL SELL - - GLOBETRONICS 1.65 -0.06 1.72 1.64 1.66 1.77 1.88 45.59 1.73 1.76 1.69 21.45 23.01 21.51 (1.56) -0.01 0.01 (0.01) SELL SELL - - HIAP TECK 0.21 0.00 0.21 0.20 0.20 0.22 0.24 27.28 0.22 0.22 0.23 8.96 26.52 27.54 (17.56) -0.01 0.00 (0.00) SELL SELL - - HIBISCUS 0.98 -0.02 1.00 0.98 1.00 1.04 1.09 34.17 1.03 1.05 1.05 14.75 23.86 13.87 (9.11) -0.02 -0.01 (0.01) SELL SELL - - INARI 1.52 -0.07 1.59 1.52 1.53 1.62 1.70 47.65 1.60 1.63 1.59 22.50 29.70 20.58 (7.20) -0.01 0.00 (0.01) SELL SELL - - MPI 8.49 -0.15 8.60 8.49 8.49 9.11 9.72 30.54 8.86 9.26 9.15 16.21 29.99 19.79 (13.78) -0.19 -0.12 (0.07) SELL SELL - - MRCB 0.87 -0.03 0.90 0.86 0.87 0.92 0.96 42.00 0.89 0.93 0.94 9.29 29.24 29.59 (19.95) -0.02 -0.02 (0.00) SELL SELL - - SAPURA ENERGY 0.28 -0.01 0.29 0.28 0.28 0.30 0.31 33.70 0.29 0.30 0.30 12.98 20.01 21.43 (7.03) 0.00 0.00 (0.00) SELL SELL - - SKP RESOURCES 1.20 -0.02 1.21 1.19 1.20 1.25 1.30 41.09 1.23 1.26 1.28 8.67 22.67 18.79 (14.00) -0.02 -0.02 (0.00) SELL SELL - - SUNCON 2.10 -0.02 2.14 2.08 2.07 2.13 2.20 51.17 2.13 2.13 2.08 27.50 21.31 24.50 6.20 0.01 0.02 (0.01) BUY SELL - - UEM SUNRISE 0.74 -0.04 0.77 0.73 0.77 0.80 0.83 38.62 0.79 0.80 0.82 13.23 24.60 23.15 (11.37) -0.01 -0.01 (0.00) SELL SELL - - VELESTO 0.30 -0.01 0.31 0.30 0.29 0.31 0.33 48.75 0.31 0.31 0.30 22.19 14.49 26.58 7.70 0.00 0.00 (0.00) BUY SELL BUY - UNISEM 2.04 -0.05 2.08 2.04 2.08 2.24 2.40 20.92 2.18 2.30 2.38 20.57 38.44 20.45 (17.87) -0.08 -0.07 (0.01) SELL SELL - - VS INDS 1.12 -0.02 1.15 1.12 1.10 1.17 1.25 47.69 1.16 1.17 1.12 24.29 24.88 29.60 (0.59) 0.00 0.01 (0.01) SELL SELL - - WASEONG 0.68 0.00 0.68 0.66 0.66 0.71 0.75 35.53 0.69 0.71 0.70 21.14 25.54 29.57 (4.39) -0.01 0.00 (0.00) SELL SELL - - The table above is a compilation of actively traded stocks with some popular technical indicators. The technical BUY/SELL signals on the last four columns are auto generated; the first two being existing or recent signals while the last two represent a signal change from BUY to SELL or the reverse, otherwise no change is indicated by a dash. INTERPRETATION OF TECHNICAL INDICATORS: Bollinger Bands: Variable width bands that narrow during less volatile periods and widen during more volatile periods. As a general rule, in a bearish trend, traders should buy when share price touches the lower band and exit when price touches the middle band. The reverse is true in a bullish trend, ie. Buy when price touches the middle band and sell when price touches the upper band. Momentum traders tend to buy on price breakouts above the upper band, and sell when price breaks down below the lower band. 14-day Relative Strength Index (RSI): A reading below 30 is considered oversold, above 70 is overbought. A rise above 50 with a corresponding share price surge above the 30-day moving average should be taken as a bullish move with good short-term upside potential. A fall below 50 and a simultaneous dip below the 30-day average is bearish and imply further near-term downside risk. Moving Averages: A stock’s short-term trend is bullish if share price stays above the 10-day moving average, and bearish if it stays below. The medium-term trend is positive if share price stays above the 30-day average, and negative if it remains below. A longer-term uptrend is intact if share price sustain above the 50-day average, and is deemed broken if it breaches below this level. Directional Movement Indicator (DMI): The DMI is an indicator of trend strength. A positive DMI difference (DMI diff) value is bullish and indicate a higher DI+ vs. DI-, while a negative DMI diff is bearish due to a lower DI+ vs. DI- (DMI diff = DI+ minus DI-). A crossover of DI+ above DI- triggers a BUY signal, while a SELL signal is flashed when the DI+ crosses below the DI-. The Average Directional Movement Index (ADX) indicates the strength of a trend, whether it is up or down. The higher the value of ADX, the stronger the trend. An ADX value above 25 suggests a trending market or stock, while a value below 20 signal congestion or absence of trend. Daily Moving Average Convergence Divergence (MACD): The MACD diff value is derived from the difference between the MACD line (the 12-day EMA minus the 26-day EMA) and the MACD signal line (the 9-day EMA of the MACD). A positive MACD diff value is bullish, while a negative MACD diff is bearish. A BUY signal is generated when the MACD diff rises above zero, and SELL signal sparked when the MACD diff value falls below zero. Page 1 of 4
35. 14-Aug-19 Technical Comments : Sell AMBank & RHB Bank Bearish technical momentum point to further correction possibilities for AMBank, with a confirmed breakdown below the 61.8%FR (RM3.97) to aim for the 76.4%FR (RM3.75) before stalling, and resistance seen from the 50%FR (RM4.15) and 38.2%FR (RM4.33). Likewise, a decisive breakdown on RHB Bank shares below the 200-day ma (RM5.54) could accelerate fall towards the 38.2%FR (RM5.44), with stronger support seen at the 23.6%FR (RM5.29), while overhead resistance is from the 61.8%FR (RM5.68). . AMBANK (1015) RM3.98 (-0.12) Z BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 4.42 4.20 3.98 10-day 30-day 50-day RM RM RM DAILY MACD DMI Recent Signal Signal Change SELL Recent Signal Signal Change RHB BANK (1066) RM RM RM SIMPLE MOVING AVERAGES 5.82 5.60 5.37 10-day 30-day 50-day DMI Recent Signal Signal Change SELL RM5.55 (-0.05) BOLLINGER BANDS Upper Middle Lower 4.11 4.25 4.30 SELL Recent Signal Signal Change RM RM RM DAILY MACD 5.50 5.65 5.66 SELL Page 2 of 4
36. 14-Aug-19 Daily Money Flow of Technical Stock Watch Malaysia Chartist : Stephen Soo No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 37 38 39 39 40 Name Tel: +603-2167 9607 Total Money Flow (RM'mn) 5-Aug 6-Aug 7-Aug 8-Aug 9-Aug stsoo@ta.com.my (A) Total 5D MF Prv. Chg www.taonline.com.my (B) Cur. Chg CLOSING PRICE 5-Aug 6-Aug 7-Aug 8-Aug 9-Aug Chg (A+B) DMF FBMKLCI (16.4) 5.6 (2.5) 20.3 (12.0) (4.9) 22.8 (32.3) 1,610 1,612 1,605 1,616 1,615 (0.97) OUT AFFIN ABMB AMBANK AXIATA CIMB DIGI GAMUDA GENTING GENM IHH IOICORP MALAKOFF MAXIS MAYBANK MBSB RHBBANK SIME TENAGA TM WPRTS AEMULUS ARMADA DIALOG DNEX FGV GADANG GTRONIC HIAP TECK HIBISCUS INARI MPI MRCB SAPURA ENERGY SKP RESOURCES SUNCON UEMS VELESTO UNISEM VS IND WASEONG (0.0) 0.0 (1.0) (1.4) 2.8 (2.2) 0.5 (0.8) 0.0 (0.4) 0.3 (0.0) (0.2) (4.2) (0.1) 0.4 0.5 (3.9) 0.8 0.3 (0.0) (0.1) 1.4 0.1 0.1 0.2 0.0 0.0 (1.2) (0.1) 0.1 0.0 0.2 0.0 (0.0) 0.1 0.1 (0.0) (0.2) (0.0) (0.0) 0.4 0.3 (4.2) 1.9 2.2 3.4 3.8 6.5 0.5 (0.6) 0.0 0.8 (5.9) 0.0 0.5 0.4 (3.4) (0.6) 1.2 (0.0) 0.5 0.9 0.1 (0.2) 0.2 0.2 (0.0) (0.0) 0.7 (0.3) (0.2) 0.3 0.0 (0.2) 0.1 0.1 (0.0) 0.4 0.0 (0.0) 0.1 0.1 (0.3) (1.3) (2.0) 0.2 (2.9) (2.9) (1.5) (0.0) (0.2) 0.1 (1.3) 0.1 1.3 0.1 3.1 (0.0) 1.1 0.0 0.2 1.9 0.0 (0.2) 0.1 0.1 0.0 (0.6) 0.4 0.0 0.1 0.0 (0.0) 0.0 0.0 (0.3) (0.0) (0.1) (0.0) (0.0) 0.0 0.4 (0.5) 2.1 0.9 1.2 5.0 2.5 (0.2) 0.1 (0.1) (0.5) 0.3 0.1 4.2 0.2 2.4 0.2 0.5 (0.0) 0.1 1.1 0.0 0.2 0.0 (0.1) (0.0) (0.1) 0.2 0.1 0.0 (0.0) (0.0) 0.0 (0.0) 0.0 (0.0) (0.6) 0.0 0.0 0.4 (0.2) 3.8 1.8 0.2 0.7 (0.2) 0.2 (0.4) 0.1 (0.1) (0.3) (0.8) (0.1) 0.4 0.3 (14.9) 1.0 (0.0) (0.1) 0.2 (0.9) 0.0 0.0 (0.0) (0.0) 0.0 (0.1) 0.3 0.0 0.0 0.0 (0.0) (0.0) (0.0) 0.1 (0.0) (0.5) 0.0 (0.1) 0.9 (0.4) (2.7) 7.3 (1.0) 6.0 4.8 6.3 (2.1) (0.2) (0.4) (0.0) (11.8) 0.1 6.9 1.4 (16.6) 1.4 3.0 (0.1) 1.0 4.3 0.2 (0.0) 0.5 0.3 (0.0) (2.1) 1.5 (0.1) (0.1) 0.5 (0.1) (0.1) 0.1 0.1 (0.1) (0.9) (0.0) 0.0 (0.1) 0.3 (0.2) 3.5 2.8 1.0 7.8 5.3 1.4 0.1 0.1 (0.6) 1.6 (0.1) 3.0 0.1 (0.7) 0.3 (0.6) (0.0) (0.2) (0.8) (0.0) 0.4 (0.0) (0.2) (0.0) 0.5 (0.2) 0.0 (0.1) (0.0) 0.0 0.0 (0.0) 0.3 0.0 (0.5) 0.0 0.0 0.3 (0.6) 4.3 (0.3) (0.7) (0.6) (5.2) (2.3) (0.3) 0.0 (0.0) 0.2 (1.1) (0.2) (3.8) 0.1 (17.3) 0.8 (0.5) (0.1) 0.2 (2.0) 0.0 (0.2) (0.1) 0.0 0.0 0.0 0.1 (0.0) 0.0 0.0 0.0 (0.0) (0.0) 0.1 (0.0) 0.1 (0.0) 2.01 3.49 4.08 4.94 5.03 4.98 3.63 6.64 3.61 5.68 4.17 0.87 5.42 8.58 0.86 5.36 2.14 13.78 4.00 3.96 0.26 0.22 3.38 0.26 1.06 0.77 1.66 0.22 1.02 1.55 8.72 0.86 0.29 1.22 2.10 0.77 0.30 2.18 1.08 0.68 2.00 3.43 4.03 4.83 5.06 4.97 3.70 6.65 3.61 5.68 4.17 0.87 5.37 8.59 0.85 5.43 2.16 13.84 4.02 3.98 0.27 0.22 3.37 0.27 1.06 0.74 1.70 0.21 1.01 1.53 8.71 0.90 0.29 1.21 2.07 0.78 0.30 2.14 1.10 0.68 2.00 3.40 4.04 4.89 5.06 5.00 3.74 6.18 3.18 5.75 4.19 0.88 5.38 8.60 0.86 5.46 2.14 13.84 4.09 4.03 0.26 0.22 3.39 0.26 1.04 0.76 1.70 0.21 1.00 1.55 8.61 0.89 0.29 1.19 2.13 0.77 0.30 2.10 1.12 0.67 1.99 3.43 4.12 5.00 5.06 5.02 3.74 6.21 3.23 5.75 4.28 0.89 5.42 8.62 0.86 5.58 2.16 13.84 4.09 4.04 0.29 0.23 3.41 0.26 1.06 0.76 1.72 0.21 1.00 1.56 8.63 0.90 0.29 1.20 2.14 0.78 0.30 2.09 1.15 0.68 2.00 3.38 4.10 5.00 5.04 5.00 3.72 6.19 3.22 5.73 4.22 0.88 5.41 8.60 0.86 5.60 2.19 13.82 4.09 3.91 0.30 0.23 3.41 0.27 1.08 0.78 1.71 0.21 1.00 1.59 8.64 0.90 0.29 1.22 2.12 0.78 0.31 2.09 1.14 0.68 0.01 (0.05) (0.02) 0.00 (0.02) (0.02) (0.02) (0.02) (0.01) (0.02) (0.06) (0.01) (0.01) (0.02) 0.00 0.02 0.03 (0.02) 0.00 (0.13) 0.01 0.01 0.00 0.01 0.02 0.02 (0.01) 0.00 (0.01) 0.03 0.01 (0.01) 0.00 0.02 (0.02) (0.01) 0.01 0.00 (0.01) 0.00 IN IN OUT IN IN IN IN IN IN IN IN IN OUT IN OUT OUT IN OUT IN OUT OUT IN OUT IN IN OUT OUT OUT IN OUT OUT OUT OUT IN OUT OUT IN IN OUT IN Sources: Bloomberg, TA Securities Daily Money Flow (DMF) Formulation If previous change (A) + current change (B) > 0, then DMF = “IN”; AND if (A) + (B) < 0, then DMF = “OUT”. Money Flow (MF) Calculation The value of money flow is set to zero at the start of the trading day. When a trade is performed, its price is compared to the price of the previous trade (the first trade of the day is compared to the previous day's close). If the prices differ, the money associated with the trade (price times number of shares) is added to or subtracted from the money flow. Additions (inflows, buys) are done on upticks; subtractions (outflows, sells) are done on downticks. Daily Money Flow (DMF) Interpretation In general, money flow trends confirm price trends. As prices rise, money flows are usually positive. As prices fall, money flows are usually negative. A divergence, however, between money flow and price trend can be a signal of a future price trend change. For example, a falling stock price with a positive money flow (IN) can indicate a future rally in the price of the stock. Conversely, a rising stock price with a negative money flow (OUT) implies potential correction in the stock price. Page 3 of 4
37. 14-Aug-19 Daily Money Flow of FBMKLCI Malaysia Chartist : Stephen Soo No Name 5-Aug Tel: +603-2167 9607 Total Money Flow (RM'mn) 6-Aug 7-Aug 8-Aug Total 9-Aug 5D MF stsoo@ta.com.my (A) (B) Prv. Chg Cur. Chg 5-Aug 6-Aug www.taonline.com.my CLOSING PRICE 7-Aug 8-Aug (A+B) 9-Aug Chg DMF FBMKLCI (16.4) 5.6 (2.5) 20.3 (12.0) (4.9) 22.8 (32.3) 1,610 1,612 1,605 1,616 1,615 (0.97) 1 MAYBANK (4.2) (5.9) (1.3) 0.3 (0.8) (11.8) 1.6 (1.1) 8.58 8.59 8.60 8.62 8.60 (0.02) IN 2 PBBANK (4.8) (3.0) 1.9 0.7 (0.3) (5.6) (1.3) (1.0) 21.56 21.60 21.28 21.42 21.52 0.10 OUT 3 TENAGA (3.9) (3.4) 3.1 2.4 (14.9) (16.6) (0.7) (17.3) 13.78 13.84 13.84 13.84 13.82 (0.02) OUT 4 CIMB 2.8 1.9 (1.3) 2.1 1.8 7.3 3.5 (0.3) 5.03 5.06 5.06 5.06 5.04 (0.02) IN 5 PCHEM (0.8) 0.1 (0.2) 0.4 0.5 (0.0) 0.6 0.1 7.23 7.37 7.29 7.30 7.39 0.09 IN 6 IHH (0.4) 0.5 (1.5) (0.2) (0.4) (2.1) 1.4 (0.3) 5.68 5.68 5.75 5.75 5.73 (0.02) IN 7 AXIATA (1.4) (4.2) (0.3) (0.5) 3.8 (2.7) (0.2) 4.3 4.94 4.83 4.89 5.00 5.00 0.00 IN 8 MAXIS (0.2) 0.8 0.1 (0.5) (0.3) (0.0) (0.6) 0.2 5.42 5.37 5.38 5.42 5.41 (0.01) OUT OUT 9 HLBANK (0.5) 0.7 (0.2) (0.1) 0.0 0.0 0.1 0.1 17.66 17.42 17.50 17.62 17.52 (0.10) IN 10 SIME PLT (0.1) 0.4 (0.1) 1.0 (0.4) 0.7 1.2 (1.4) 4.45 4.42 4.49 4.70 4.67 (0.03) OUT 11 DIGI (2.2) 2.2 (2.0) 0.9 0.2 (1.0) 2.8 (0.7) 4.98 4.97 5.00 5.02 5.00 (0.02) IN 12 NESTLE (0.2) 0.3 (0.1) (0.0) (0.0) (0.0) 0.0 0.0 147.40 147.30 148.00 148.30 148.00 (0.30) IN 13 PETGAS (0.8) 0.3 (0.1) (0.2) 0.1 (0.6) (0.0) 0.2 15.98 15.88 15.94 15.98 16.08 0.10 IN 14 GENTING (0.8) 3.8 (2.9) 5.0 (0.2) 4.8 7.8 (5.2) 6.64 6.65 6.18 6.21 6.19 (0.02) IN 15 MISC (0.3) (0.2) (0.4) 0.4 (0.2) (0.8) 0.7 (0.6) 7.20 7.20 7.21 7.21 7.22 0.01 IN 16 IOI CORP 0.3 (0.6) (0.0) 0.1 0.1 (0.2) 0.1 0.0 4.17 4.17 4.19 4.28 4.22 (0.06) IN 17 GENM 0.0 6.5 (2.9) 2.5 0.2 6.3 5.3 (2.3) 3.61 3.61 3.18 3.23 3.22 (0.01) IN 18 KLK 0.1 0.0 (0.3) (0.2) (0.1) (0.5) 0.1 0.1 23.42 23.34 23.60 23.68 23.60 (0.08) IN 19 PETDAG (0.9) (0.2) 0.3 (0.2) (0.0) (1.1) (0.5) 0.2 23.26 23.12 23.12 23.38 23.28 (0.10) OUT 20 HAP SENG (0.0) 0.6 0.3 (0.1) (0.0) 0.7 (0.4) 0.0 9.70 9.75 9.75 9.75 9.73 (0.02) OUT 21 HLFG 0.1 0.2 0.0 0.1 (0.1) 0.3 0.1 (0.1) 17.54 17.58 17.56 17.56 17.30 (0.26) OUT 22 PPB 0.0 0.1 (0.1) 0.0 0.1 0.1 0.2 0.0 18.64 18.58 18.56 18.76 18.76 0.00 IN 23 TOP GLOVE 0.7 1.0 1.1 0.3 0.3 3.3 (0.8) 0.0 4.52 4.59 4.58 4.55 4.52 (0.03) OUT 24 RHBBANK 0.4 0.5 1.3 4.2 0.4 6.9 3.0 (3.8) 5.36 5.43 5.46 5.58 5.60 0.02 OUT 25 PMETAL (0.1) (0.1) 0.6 (0.0) (1.1) (0.8) (0.6) (1.1) 4.77 4.70 4.70 4.81 4.86 0.05 OUT 26 SIME 0.5 0.4 0.1 0.2 0.3 1.4 0.1 0.1 2.14 2.16 2.14 2.16 2.19 0.03 IN 27 HARTALEGA (0.0) 1.6 0.1 0.0 0.1 1.7 (0.1) 0.0 4.86 5.05 5.04 5.00 4.99 (0.01) OUT 28 AMBANK (1.0) 0.3 0.1 0.4 (0.2) (0.4) 0.3 (0.6) 4.08 4.03 4.04 4.12 4.10 (0.02) OUT 29 DIALOG 1.4 0.9 1.9 1.1 (0.9) 4.3 (0.8) (2.0) 3.38 3.37 3.39 3.41 3.41 0.00 OUT 30 MAHB (0.1) 0.6 0.4 0.3 0.2 1.4 (0.1) (0.1) 8.24 8.46 8.41 8.50 8.50 0.00 OUT 6.3 (22.7) (16.4) 23.4 (17.8) 5.6 11.2 (13.7) (2.5) 22.2 (1.9) 20.3 7.9 (20.0) (12.0) 71.0 (76.0) (4.9) 14 (16) 25 (5) 16 (14) 14 (16) 14 (16) (RM'mn) INFLOW OUTFLOW NET FLOW Daily Trading Participation COMPANIES INFLOW OUTFLOW Date Retail Institution Foreign Total 5-Aug 6-Aug 7-Aug 8-Aug 9-Aug 23.9% 23.1% 24.8% 25.4% 25.0% 45.5% 49.5% 51.0% 44.9% 47.3% 30.6% 27.4% 24.3% 29.7% 27.7% 100% 100% 100% 100% 100% Sources: Bloomberg, TA Securities Daily Money Flow (DMF) Formulation If previous change (A) + current change (B) > 0, then DMF = “IN”; AND if (A) + (B) < 0, then DMF = “OUT”. Money Flow (MF) Calculation The value of money flow is set to zero at the start of the trading day. When a trade is performed, its price is compared to the price of the previous trade (the first trade of the day is compared to the previous day's close). If the prices differ, the money associated with the trade (price times number of shares) is added to or subtracted from the money flow. Additions (inflows, buys) are done on upticks; subtractions (outflows, sells) are done on downticks. Daily Money Flow (DMF) Interpretation In general, money flow trends confirm price trends. As prices rise, money flows are usually positive. As prices fall, money flows are usually negative. A divergence, however, between money flow and price trend can be a signal of a future price trend change. For example, a falling stock price with a positive money flow (IN) can indicate a future rally in the price of the stock. Conversely, a rising stock price with a negative money flow (OUT) implies potential correction in the stock price. 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 Wednesday, August 14, 2019, 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 4 of 4
38. Technical View Wednesday , August 14, 2019 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Stock Screen Malaysia End Day Census of 13.08.2019 Chartist: Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my Report Description: The Daily Stock Screen is a retail product which can be a very useful guide for momentum trading and trading ideas. The following list is derived from the screening of more than 1000 stocks currently listed on Bursa Malaysia to identify: the top 20 breakout, 20 breakdown, and 20 ‘potential’ breakout stocks which just climbed above the middle Bollinger band, with potential to appreciate toward the upper Bollinger band. [MIDDLE BOLLINGER RANGEBOUND] List of 20 Potential Breakout Stocks (Short-term BUY for upside toward Upper Bollinger Band or higher to TAKE PROFIT/ SELL) No Stock Name Price Bollinger Band Moving Average RSI Lower Middle Upper 14-day 5-day 10-day 30-day 50-day Vol 20-day avg vol 1 FRASER & NEAVE HOLDINGS BHD 34.60 33.98 34.43 34.87 53.26 34.36 34.41 34.45 34.47 355,200 247,795 2 PENTAMASTER CORP BHD 3.50 3.29 3.48 3.68 58.97 3.50 3.51 3.36 3.13 2,887,700 2,102,225 3 MASTER-PACK GROUP BHD 1.09 0.94 1.08 1.22 53.60 0.98 1.02 1.11 1.07 883,000 429,500 4 KUCHAI DEVELOPMENT BHD 1.92 1.61 1.83 2.05 62.22 1.90 1.91 1.76 1.72 126,300 93,105 5 COMPLETE LOGISTIC SERVICES 0.90 0.76 0.89 1.01 55.21 0.84 0.89 0.86 0.83 526,400 308,300 6 MAGNUM BHD 2.74 2.54 2.69 2.84 57.14 2.61 2.64 2.70 2.62 1,044,100 746,780 7 MAGNA PRIMA BHD 1.17 0.92 1.09 1.26 68.95 1.14 1.14 1.01 0.95 210,000 81,820 8 BERJAYA SPORTS TOTO BHD 2.72 2.58 2.70 2.81 53.89 2.64 2.66 2.73 2.68 1,482,900 775,395 9 FAVELLE FAVCO BHD 2.73 2.53 2.67 2.80 57.27 2.61 2.61 2.71 2.73 759,000 287,400 10 NPC RESOURCES BHD 1.90 1.69 1.83 1.97 54.08 1.89 1.89 1.83 1.88 15,000 1,525 11 COUNTRY VIEW BHD 1.46 1.35 1.43 1.52 53.74 1.46 1.47 1.42 1.45 8,000 4,895 12 KLCCP STAPLED GROUP 7.90 7.77 7.86 7.95 55.92 7.92 7.89 7.84 7.82 1,021,300 922,445 13 APEX EQUITY HOLDINGS BERHAD 0.97 0.87 0.95 1.02 52.34 0.93 0.92 0.97 0.98 3,000 1,860 14 CWG HOLDINGS BHD 0.46 0.38 0.44 0.51 54.93 0.48 0.47 0.43 0.43 15,700 9,380 15 UMS HOLDINGS BERHAD 2.06 1.98 2.05 2.11 48.93 2.04 2.04 2.05 2.15 1,600 950 16 COCOALAND HOLDINGS BHD 1.93 1.82 1.90 1.98 55.73 1.90 1.88 1.87 1.87 114,200 50,765 17 DKLS INDUSTRIES BERHAD 1.72 1.64 1.70 1.77 50.63 1.71 1.72 1.72 1.74 11,000 725 18 CYCLE & CARRIAGE BINTANG BHD 1.37 1.30 1.35 1.41 48.88 1.35 1.35 1.38 1.42 213,200 109,485 19 PJBUMI BHD 0.29 0.20 0.26 0.33 53.55 0.30 0.29 0.27 0.22 7,000 1,150 20 SMIS CORP BHD 0.45 0.39 0.44 0.48 51.97 0.45 0.44 0.43 0.44 500 380 Raw data sourced from Bloomberg *Note: To qualify in this list above, the first sorting criteria is stock price must have just climbed or stayed ABOVE the middle Bollinger Band, followed by a second criteria that trading volume for the day must be significantly strong. This is a good watch list for momentum traders looking for short-term BUY ideas, as they are laggards with good upside potential towards the upper Bollinger band or higher to TAKE PROFIT/SELL. Caveat: Some stocks may continue to stay range bound and trade sideways, hence traders should refer to their respective charts to spot accumulation (volume growth) or breakout patterns. INTERPRETATION OF TECHNICAL INDICATORS: Moving Averages: A stock’s short-term trend is bullish if share price stays above the 10-day moving average, and bearish if it stays below. The medium-term trend is positive if share price stays above the 30-day, and negative if it remains below this average. 14-day RSI: A reading below 30 is considered oversold, above 70 is overbought. A rise above 50 with a corresponding share price surge above the 30-day SMA should be taken as a bullish move with good short-term upside potential. A fall below 50 and a simultaneous dip below the 30-day SMA is bearish and imply further near-term downside risk. Bollinger Bands: Variable width bands that narrow during less volatile periods and widen during more volatile periods. As a general rule, in a bearish trend, traders should buy when share price touches the lower band and exit when price touches the middle band. The reverse is true in a bullish trend, ie. Buy when price touches the middle band and sell when price touches the upper band. Momentum traders will buy on price breaks above the upper band, and sell when price breaks below the lower band. Alternatively, a sharp move that originates at one band tends to go all the way to the other band, a useful observation when projecting price targets. Page 1 of 2
39. *Note: To qualify in the breakout list below, the first sorting criteria is stock price must close ABOVE the upper Bollinger Band, followed by a second criteria that trading volume for the day must be significantly higher than the 20-day average volume, which signal a bullish breakout. Caveat: We would caution momentum traders that a highly overbought 14-day RSI reading (> 80) and share price pullback BELOW the upper Bollinger Band are early warning signals to exit buy breakout trades. [UPPER BOLLINGER BREAKOUT] Top 20 Breakout Stocks (Generally BULLISH, but can be short-term TAKE PROFIT/ SELL guide) Stock Name Price RSI Bollinger Band Moving Average Middle Upper 14-day 5-day Vol 20-day avg vol 10-day 30-day 50-day 1 CARING PHARMACY GROUP BHD 2.07 1.86 1.94 2.02 74.01 1.94 1.92 1.93 1.92 117,400 19,175 2 WIDETECH (MALAYSIA) BHD 0.70 0.41 0.53 0.65 70.43 0.60 0.53 0.54 0.55 20,100 2,205 3 BOX-PAK (MALAYSIA) BERHAD 1.20 1.03 1.09 1.16 65.66 1.11 1.10 1.10 1.13 8,900 745 4 KWANTAS CORP BHD 0.85 0.66 0.74 0.81 62.94 0.74 0.74 0.76 0.78 10,000 3,500 5 ANALABS RESOURCES BHD 1.10 0.93 1.00 1.07 58.58 1.05 1.01 1.03 1.08 42,500 6,460 6 DATASONIC GROUP BHD 0.84 0.64 0.73 0.81 77.25 0.76 0.73 0.71 0.63 16,803,300 11,049,350 7 KEN HOLDINGS BHD 0.66 0.53 0.59 0.64 58.46 0.60 0.60 0.60 0.64 10,000 1,830 8 TEO GUAN LEE CORP BHD 1.08 0.95 1.01 1.07 61.97 1.04 1.02 1.01 1.01 2,300 1,495 9 PINEAPPLE RESOURCES BHD 0.36 0.27 0.31 0.35 59.64 0.33 0.32 0.32 0.31 900 1,175 0.15 0.10 0.12 0.14 59.87 0.11 0.11 0.12 0.13 1,000 40,200 11 MYCRON STEEL BHD 0.32 0.26 0.28 0.31 59.98 0.28 0.28 0.29 0.29 7,100 14,615 12 IGB REAL ESTATE INVESTMENT T 2.05 1.91 1.98 2.04 69.77 2.01 1.98 1.96 1.94 4,241,400 3,159,405 13 MNC WIRELESS BHD 0.08 0.01 0.05 0.08 91.10 0.06 0.05 0.04 0.03 19,906,400 8,725,735 14 OSK VENTURES INTERNATIONAL 0.45 0.40 0.42 0.45 60.07 0.42 0.42 0.42 0.43 900 2,075 15 BIOALPHA HOLDINGS BHD 0.21 0.19 0.20 0.21 63.16 0.20 0.20 0.20 0.20 2,326,700 1,548,095 16 YTL HOSPITALITY REIT 1.37 1.29 1.33 1.37 63.95 1.34 1.32 1.33 1.34 391,200 1,262,665 17 BREM HOLDING BHD 0.78 0.74 0.76 0.77 69.81 0.77 0.76 0.75 0.74 35,300 43,780 18 BERJAYA LAND BHD 0.19 0.16 0.17 0.18 61.06 0.17 0.17 0.18 0.18 15,591,500 9,024,765 19 BORNEO OIL BHD 0.05 0.05 0.05 0.05 49.34 0.05 0.05 0.05 0.05 1,921,000 2,540,370 20 JKG LAND BHD 0.08 0.08 0.08 0.08 55.31 0.08 0.08 0.08 0.08 15,000 683,355 10 OVERSEA ENTERPRISE BHD Lower Raw data sourced from Bloomberg *Note: As for the top 20 breakdown list below, the sole sorting criteria is stock price must close significantly BELOW the lower Bollinger Band, with the largest distance from the lower band at the top of the table, signaling a severe sell-off which is bearish. Caveat: A stock should bottom out if share price moves ABOVE the falling lower Bollinger Band, which can be a good buy signal for technical rebound upside after the sharp sell-off. [LOWER BOLLINGER BREAKDOWN] Top 20 Breakdown Stocks (Generally BEARISH, but can be short-term BUY guide) Stock Name Price Bollinger Band Lower Middle Upper RSI Moving Average 14-day 5-day 10-day 30-day 50-day Vol 20-day avg vol 1 PUBLIC BANK BERHAD 20.74 20.84 22.20 23.56 15.35 21.48 21.75 22.54 22.83 2 THONG GUAN INDUSTRIES BHD 2.34 2.39 2.51 2.63 23.11 2.45 2.50 2.54 2.53 5,666,900 79,200 3,474,860 97,635 3 SURIA CAPITAL HOLDINGS BHD 1.25 1.29 1.37 1.44 24.09 1.34 1.37 1.35 1.34 240,500 102,805 4 GENTING BHD 6.05 6.09 6.63 7.17 26.85 6.37 6.64 6.69 6.65 10,091,100 5,576,090 5 RAPID SYNERGY BHD 5.60 5.64 5.75 5.86 38.60 5.70 5.75 5.75 5.76 202,700 873,035 6 KIMLUN CORP BHD 1.24 1.27 1.36 1.45 28.04 1.32 1.35 1.39 1.38 72,500 23,215 7 PIE INDUSTRIAL BHD 1.11 1.14 1.25 1.36 20.54 1.20 1.23 1.30 1.29 573,900 364,895 8 METROD HOLDINGS BHD 1.50 1.53 1.69 1.85 32.27 1.59 1.67 1.67 1.68 3,000 1,500 9 WCT HOLDINGS BHD 1.02 1.05 1.13 1.22 33.93 1.09 1.12 1.12 1.07 6,326,700 4,407,780 10 LII HEN INDUSTRIES BHD 2.87 2.90 2.94 2.99 37.44 2.93 2.94 2.94 2.93 92,300 130,200 11 KHEE SAN BHD 0.20 0.22 0.30 0.37 18.58 0.26 0.28 0.32 0.34 8,873,400 6,374,315 668,755 12 ALLIANCE BANK MALAYSIA BHD 3.30 3.33 3.60 3.87 20.39 3.43 3.53 3.67 3.72 1,307,500 13 MKH BHD 1.13 1.15 1.20 1.25 16.68 1.18 1.19 1.22 1.23 233,900 158,205 14 UEM SUNRISE BHD 0.74 0.75 0.79 0.83 28.60 0.78 0.79 0.80 0.82 2,271,100 1,405,800 351,845 15 HUA YANG BHD 0.40 0.42 0.45 0.47 37.35 0.45 0.45 0.44 0.41 1,544,900 16 PASDEC HOLDINGS BHD 0.32 0.34 0.37 0.40 30.14 0.35 0.36 0.38 0.37 67,700 91,690 17 SIME DARBY PROPERTY BHD 0.91 0.93 0.98 1.03 30.61 0.95 0.97 0.99 1.02 7,638,300 2,300,740 336,560 18 HAP SENG CONSOLIDATED 9.65 9.66 9.86 10.06 32.25 9.74 9.82 9.89 9.89 532,000 19 LINGKARAN TRANS KOTA HLDGS 4.45 4.46 4.72 4.98 29.49 4.57 4.65 4.80 4.61 26,700 345,190 20 BINA PURI HOLDINGS BHD 0.14 0.15 0.18 0.21 23.90 0.17 0.18 0.18 0.18 2,885,000 3,992,510 Raw data sourced from Bloomberg 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 Wednesday, August 14, 2019, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 2