Bursa Malaysia Daily Market Report - 14 February

Transcription

1. Wednesday , 14 February, 2018 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only N ew s 1. D ai l y M arke t C om men t a ry 2. D ai l y B ri ef Fu nd a me n tal Rep o r ts 1 . Br i t i s h A m e ric a n T o b a c c o ( M a la ys ia ) Be rh a d : De f e n d in g I t s M a r k e t Sh a re s in th e L e g a l I n du s t ry 2 . M IS C Be r h a d : H e f ty 4 Q 1 7 Sh ip p in g F l e e t I m p a i r m e n t s Te ch n ic al R ep o rt s 1. D ai l y Te ch n ic a l St o ck Pi cks ( L oc al ) 2. D ai l y For ei gn T ech n i c al St o ck P i cks ( HK ) 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 February 2018 TA Research, e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (13.02.2018) Volume Main Market 1,008.0 -190.9 Warrants 314.2 3.3 ACE Market 285.1 -2.8 Bond 7.1 2.0 ETF 2.1 0.9 LEAP 0.0 (0.0) Total 1,616.5 Off Market 28.3 -38.8 2,317.1 67.2 48.0 1.6 2.4 0.0 2,436.3 23.0 Value 167.1 3.1 -2.9 0.3 1.1 0.0 17.4 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP February Futures Other Markets DOW JONES NASDAQ (US) FTSE (UK) NIKKEI (JAPAN) KOSPI (KOREA) HANG SENG (HK) FSSTI (S'PORE) SET (BANGKOK) JCI (JAKARTA) SHANGHAI SHENZHEN AUSTRALIA % YTD chg 2.85 33.26 104.44 -3.00 0.16 0.26 0.65 -0.16 2.02 0.83 -4.84 2.13 24,640.45 7,013.51 7,168.01 21,244.68 2,395.19 29,839.53 3,415.07 1,800.03 6,578.18 3,184.96 1,730.83 5,855.90 39.18 31.55 -9.05 -137.94 9.81 379.90 30.09 0.58 54.72 30.83 7.10 35.20 0.16 0.45 -0.13 -0.65 0.41 1.29 0.89 0.03 0.84 0.98 0.41 0.60 -0.32 1.60 -6.76 -6.68 -2.93 -0.27 0.36 2.64 3.50 -3.70 -8.87 -3.45 (mn) 17.1 @ 10.0 @ 1.0 @ 235 134 36 2 2 0 409 % chg 1,833.02 13,049.86 16,225.58 1,823.00 (RM) 0.12 2.05 0.07 Exchange Rate USD/MYR 3.9390 -0.006 USD/JPY 107.81 -0.840 EUR/USD 1.235 0.0062 Counter MAYBANK PBBANK AXIATA MAXIS SIMEPLT HLBANK PETGAS GENTING GENM IOICORP Mkt Cap. Chg (RM’mn) (RM) 109,329 85,030 50,761 47,020 37,949 36,821 35,221 33,946 29,765 29,534 0.04 0.08 0.03 0.08 0.01 0.04 0.04 0.06 0.01 0.02 Stocks ended slightly higher Tuesday, shored up by overnight Wall Street and regional gains on optimism over the Trump administration's USD200 billion infrastructure plan. The KLCI added 2.85 points to settle at 1,833.02, after oscillating between early high of 1,835.17 and low of 1,830.28, as gainers led losers 495 to 409 on reduced turnover of 1.61bn shares worth RM2.43bn. The local market is expected to remain subdued in range bound trade, with most market players sidelined ahead of the Chinese New Year weekend break. Immediate resistance will be at 1,840, mirroring the 9 Jan high, with the 2 Feb peak of 1,880 acting as a formidable hurdle. Continue to watch the crucial resistance-turn-support level at 1,796, the June 2017 peak matching the recent low, which must hold to prevent further correction potential towards next support from 1,778, the 38.2%FR of the 1,614 low of Nov 2016 to the recent 1,880 high. KKB remains in base building mode pending recovery upside to the 23.6%FR (RM1.01), while a decisive breakout should aim for the 38.2%FR (RM1.14) and 50%FR (RM1.25), and crucial support is from the 23/10/17 low (80sen). Similarly, Mudajaya is still building support above the lower Bollinger band (83sen), ahead of recovery towards the 23.6%FR (95sen), while a convincing breakout should target the 100-day ma (RM1.03) and 38.2%FR (RM1.08). Stronger supports are at 80sen and the 30/11/16 low (72.5sen). News Bites ï ï ï Top 10 KLCI Movers Based on Mkt Cap. Off Market TATGIAP CCM MQTECH Review & Outlook Value/ 2.30 330 0.21 114 0.17 47 0.22 2 1.18 2 0.00 0 1.51 495 0.82 Vol. (mn) 14.34 9.85 9.11 1.08 4.96 0.92 0.60 3.53 3.19 4.25 Commodities Futures Palm Oil (RM/mt) 2,515.00 -26.00 Crude Oil ($/Barrel) 58.95 -0.43 Gold ($/tr.oz.) 1,332.00 6.90 Important Dates LBS - 1:10 Bonus Issue - BI of up to 162.9m shares. 1 bonus share for every 10 subdivided shares held. Ex-Date: 22/02/2018. Entitlement Date: 26/02/2018. LISTING ON: 27/02/2018. MASTEEL - 1:3 Bonus Issue - BI of up to 106.8m shares. 1 bonus share for every 3 existing shares held. Entitlement Date: 14/02/2018. LISTING ON: 15/02/2018. ï ï ï ï ï ï ï ï ï ï ï ï ï ï ï Axiata Group Bhd announced that the dilution of its shareholding in its Indian associate Idea Cellular Ltd (Idea) is expected to result in an estimated loss on dilution (non-cash) of RM151.5mn. The Securities Commission Malaysia has charged two individuals, including Three-A Resources Bhd chairman Datuk Mohd Nor Abdul Wahid, with insider trading. Seacera Group Bhd is buying a 70% controlling stake in builder Teras Sari Resources Sdn Bhd, which is undertaking a RM338.1mn project to upgrade a public road in Pekan, Pahang. Borneo Oil Bhd is acquiring a parcel of quarry land in Lahad Datu, Sabah for RM47.0mn cash. Pansar Bhd has been appointed by construction equipment manufacturer JCB as its official dealer in Sabah and Sarawak. Denko Industrial Corp Bhd has appointed major shareholder Datuk Fong Chiu Wan as group CEO of the company, effective today. Vertice Bhd, previously Voir Holdings Bhd, has appointed the former Malaysian chief justice Tun Arifin Zakaria as its new non-executive independent chairman. Wan Zulkiflee Wan Ariffin's contract as Petronas president and the CEO has been renewed for three years, effective April 1, 2018. Puncak Niaga Bhd has gotten the green light from shareholders to take over TRIplc Bhd for RM210.0mn. Eastern & Oriental Bhd expects the overall property market to remain soft. MISC Bhd's fourth-quarter net profit tumbled 87.1% YoY to RM68., dragged mainly by higher impairment loss in the current quarter under review. British American Tobacco (Malaysia) Bhd announced a 74% YoY drop in its fourth quarter net profit to RM78.2mn. Singapore housing prices may rise as much as 10% this year, following a pickup in home sales, the CEO of CapitaLand Ltd. said in an interview. Producer prices in Japan picked up 0.3% on month in January, the Bank of Japan said. Australian companies are reluctant to grant wage rises as this would increase prices of their products in the face of competitive landscape, RBA Assistant Governor Luci Ellis said. Optimism among small companies in the U.S. rose more than forecast in January. UK inflation was unchanged at 3% in January as a fall in the price of fuel was offset by relatively stable prices for cultural services. Official figures suggest that Britain's house prices could be recovering, with annual growth up 5.2% in the year to December, an increase of 0.2% from November. 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 , February 14, 2018 FBMKLCI: 1,833.02 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 Slower Momentum Ahead of CNY Break Stocks ended slightly higher Tuesday, shored up by overnight Wall Street and regional gains on optimism over the Trump administration's USD200 billion infrastructure plan. The KLCI added 2.85 points to settle at 1,833.02, after oscillating between early high of 1,835.17 and low of 1,830.28, as gainers led losers 495 to 409 on reduced turnover of 1.61bn shares worth RM2.43bn. Resistance at 1,840, Crucial Support at 1,796 The local market is expected to remain subdued in range bound trade, with most market players sidelined ahead of the Chinese New Year weekend break. Immediate resistance will be at 1,840, mirroring the 9 Jan high, with the 2 Feb peak of 1,880 acting as a formidable hurdle. Continue to watch the crucial resistance-turn-support level at 1,796, the June 2017 peak matching the recent low, which must hold to prevent further correction potential towards next support from 1,778, the 38.2%FR of the 1,614 low of Nov 2016 to the recent 1,880 high. Accumulate KKB & Mudajaya KKB remains in base building mode pending recovery upside to the 23.6%FR (RM1.01), while a decisive breakout should aim for the 38.2%FR (RM1.14) and 50%FR (RM1.25), and crucial support is from the 23/10/17 low (80sen). Similarly, Mudajaya is still building support above the lower Bollinger band (83sen), ahead of recovery towards the 23.6%FR (95sen), while a convincing breakout should target the 100-day ma (RM1.03) and 38.2%FR (RM1.08). Stronger supports are at 80sen and the 30/11/16 low (72.5sen). Asian Markets Continue Upswing as Wall Street Stabilize Asian stocks pulled further away from two-month lows on Tuesday, lifted by Wall Street’s extended rebound from last week’s steep fall. Wall Street’s three major indexes rose for the second day on Monday as investors regained some confidence after U.S. equities had their biggest weekly drop in two years. Investors also digested the release of the Trump administration's USD200 billion infrastructure plan. Still, caution lingered in the broader markets following the U.S.-led tumble in riskier assets last week and ahead of U.S. inflation data on Wednesday. A stronger-than-expected reading on price pressures could trigger a fresh wave of selling. China stocks rebounded as global equity markets appeared to regain some footing after last week’s heavy sell-off. Sentiment was also aided by signs of government support and record bank lending in January. The Shanghai Composite index was up 31.47 points or 1 percent at 3,185.60. Across the Korean Strait, the Kospi advanced 0.41 percent, with gains driven by strong showings from tech heavyweights Samsung Electronics and SK Hynix, which surged more than 3 percent, respectively. In down under, the S&P/ASX 200 edged up 0.60 percent as earnings season rolled on. The materials sector was among the best-performers, while the heavilyweighted financials sector also edged higher by 0.36 percent. Meanwhile, Japan’s Nikkei share average gave up early gains and closed at four-month low on Tuesday in choppy trade as investors turned risk averse again as the yen rose rising against the dollar. The Nikkei ended 0.7 percent lower at 21,244.68 points, its lowest closing level since mid-October. Page 1 of 8
4. 14-Feb-18 Dow Edge Up Ahead of Key Inflation Data Major U .S. stock indexes rose slightly Tuesday, gaining for a third consecutive session, ahead of a key inflation reading, even as shades of last week’s brutal selling lingered. The Dow Jones Industrial Average fell 180 points earlier in the session before recovering those losses to eke out a slight gain, led by index heavyweights Goldman Sachs Group Inc. and Wells Fargo & Co. The next big catalyst for the market could come from Wednesday’s January consumer-priceinflation data. There are concerns that if CPI comes in hotter than expected, it could spark another selloff, as worries about higher prices and its effect on the Federal Reserve’s interestrate hiking plans triggered last week’s dramatic selling and spike in volatility. Investors have also been considering a USD4.4 trillion federal budget that U.S. President Donald Trump has proposed, which would see the deficit nearly double in 2017 and rise some USD7 trillion over the next decade. The Dow Jones Industrial Average rose 39.18 points, or 0.16 percent, to 24,640.45, the S&P 500 gained 6.94 points, or 0.26 percent, to 2,662.94 and the Nasdaq Composite added 31.55 points, or 0.45 percent, to 7,013.51. 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, February 14, 2018, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 8
5. 14-Feb-18 N e w s i n B r i e f Corporate Axiata Group Bhd (Axiata) announced that the dilution of its shareholding in its Indian associate Idea Cellular Ltd (Idea) from 19.7% to 18.1% is expected to result in an estimated loss on dilution (non-cash) of RM151.5mn for the financial year ending 31 December 2018. This follows the non-participation by Axiata in a preferential issuance of Idea shares. (The Edge Markets / Bursa Malaysia) Comments: Notwithstanding the dilution impact on Axiata, the latest development at Idea is encouraging as it will be better capitalised and represents progress towards paring debt ahead of its merger with Vodafone India. In all, we deduce Axiata’s diluted stake in Idea to have minimal impact of <1% on our TP based on SOP valuation. Maintain our Buy recommendation on the stock with a TP of RM6.50/share. The Securities Commission Malaysia has charged two individuals, including Three-A Resources Bhd chairman Datuk Mohd Nor Abdul Wahid, with insider trading in relation to 3A’s joint venture with Singapore-listed Wilmar International Ltd in 2009. Mohd Nor, 64, is accused of acquiring 500,000 3A shares through Azuzay Zamani's central depository system account, while in possession of non-public information relating to the joint venture. Mohd Nor, who is also a director in the group, allegedly committed the offence on Oct 5, 2009 — the same day 3A announced to Bursa Malaysia that Wilmar will acquire a 17% stake in the company via a RM46.2mn private placement at 75 sen per share. (The Edge Markets) Seacera Group Bhd is buying a 70% controlling stake in builder Teras Sari Resources Sdn Bhd, which is undertaking a RM338.1mn project to upgrade the public road from Bandar Pekan to Kampung Sungai Miang in Pekan, Pahang. Seacera said its wholly-owned subsidiary Seacera Builders Sdn Bhd has entered into a head of agreement with LT Century Development Sdn Bhd and LTC Holdings Sdn Bhd for the proposed acquisition of 7.7mn shares or a 70% stake in Teras Sari Resources at a price to be determined later. (The Edge Markets / Bursa Malaysia) Borneo Oil Bhd is acquiring a parcel of quarry land in Lahad Datu, Sabah for RM47.0mn cash, amid its ongoing expansion into limestone mining and related activities. The sublease is fixed for 30 years with an automatic renewal for a further 30 years, with no further consideration. It will pay for the acquisition via internally-generated funds. Particularly, the quarry will allow for extraction of marble blocks for export purposes, Borneo Oil said in a statement. The balance of resources will be used for limestone aggregates and related products, the company added. (The Edge Markets / Bursa Malaysia) Sarawak-based Pansar Bhd has been appointed by construction equipment manufacturer JCB as its official dealer in Sabah and Sarawak. JCB said Pansar will provide their customers in plantations, construction, infrastructure and mining, with access to a broad choice of JCB's products, as well as delivering maintenance services and comprehensive spare part availability to local businesses. (The Edge Markets / Bursa Malaysia) Denko Industrial Corp Bhd has appointed major shareholder Datuk Fong Chiu Wan as group chief executive officer of the company, effective today. The appointment follows the acquisition of Integrated Manufacturing Solutions Sdn Bhd by Denko in November last year. Fong is IMS' co-owner and director. Fong owns a 24.1% stake in Denko, after acquiring 53.5mn shares on Feb 2. (The Edge Markets / Bursa Malaysia) Page 3 of 8
6. 14-Feb-18 Vertice Bhd , previously Voir Holdings Bhd, has appointed the former Malaysian chief justice Tun Arifin Zakaria as its new non-executive independent chairman. The appointment is effective yesterday as Arifin replaces Datuk Zarul Ahmad Mohd Zulkifli, who has resigned from the post to pursue other business interests, a statement from Vertice read. (The Edge Markets / Bursa Malaysia) Wan Zulkiflee Wan Ariffin’s contract as Petronas president and the chief executive officer has been renewed for three years, effective April 1, 2018. In a statement, the Prime Minister’s Office (PMO) said Wan Zulkiflee had a wealth of experience in the country’s oil and gas industry and had served the company for more than three decades. (Financial Daily) Puncak Niaga Bhd has gotten the green light from shareholders to take over TRIplc Bhd for RM210.0mn. The acquisition will enable Puncak Niaga to have a new core business – construction, to keep its concern going after the company disposed of its water treatment asset in Selangor for RM1.55bn in cash. (Financial Daily) Eastern & Oriental Bhd expects the overall property market to remain soft, as the developer posted a 30% drop in earnings for the third quarter ended Dec 31. “Nevertheless, we are encouraged by the recent sale of properties especially in our Penang projects,” it said in a filing with Bursa Malaysia. “The buyers are mainly locals signifying there is still significant interest in high end properties at the right price in the right location,” it added. E&O posted a net profit of RM22.0mn during three months under review compared with RM31.1mn achieved a year earlier, despite a 36% jump in revenue to RM331.9mn. Property development contributed close to 90% of the group’s revenue. (The Sun Daily / Bursa Malaysia) MISC Bhd's fourth-quarter net profit tumbled 87.1% YoY to RM68, dragged mainly by higher impairment loss of RM553.9mn in the current quarter under review. Operating profit for the three months ended Dec 31, 2017 (4QFY17) was 5.9% YoY lower at RM62.1mn, on lower contribution from its liquefied natural gas (LNG), as well as its petroleum segments' offset gains in offshore, heavy engineering and other operations. Earnings per share fell to 1.5 sen in 4QFY17, from 11.9 sen in 4QFY16. Quarterly revenue also slid 3.3% YoY to RM2.4bn, no thanks to lower revenue across its operations, save for LNG. (The Edge Markets / Bursa Malaysia) Damansara Realty Bhd — which just returned to the black in its financial year ended Dec 31, 2017 — expects to sustain its earnings growth momentum in FY18, and targets a topline growth of up to 15% YoY. For FY17, the group reported a net profit of RM17.8mn versus a net loss of RM27.8mn a year earlier, while revenue rose 36% YoY to RM249.4 mn. Damansara Realty group chief executive officer Brian Iskandar Zulkarim said the group is eyeing several contracts under its integrated facilities management division this year. He said there are two large contracts that could potentially contribute more than RM10.0mn per month in revenue each, and several smaller contracts, but declined to reveal further. (The Edge Markets / Bursa Malaysia) Southern Steel Bhd's net profit for its second quarter ended Dec 31, 2017 (2QFY18) almost doubled YoY to RM70.0mn, as the group's sales and margins were higher in the quarter under review. Its quarterly revenue grew 30.7% YoY to RM956.4mn. For 1HFY18, Southern Steel's net profit more than doubled YoY to RM123.4mn. Revenue, on the other hand, grew 40.9% YoY to RM1.9bn. (The Edge Markets / Bursa Malaysia) Page 4 of 8
7. 14-Feb-18 Goldis Bhd — which is in the midst of a takeover of IGB Corp Bhd — revealed its fourth quarter net profit has tripled year-on-year, thanks to better performance from its retail property investments, and a disposal gain. Goldis said net profit for the fourth quarter ended Dec 31, 2017 (4QFY17) jumped to RM59.9mn, from RM16.3mn in the corresponding quarter last year. The group said its property investment in the retail sector — namely IGB REIT, the owner of Midvalley Megamall and The Gardens Mall — did better, while it netted a one-off gain of RM27.3mn from the sale of land by a subsidiary, which was recognised in its property development segment during the quarter. (The Edge Markets / Bursa Malaysia) British American Tobacco (Malaysia) Bhd (BAT) announced a 74% YoY drop in its fourth quarter net profit to RM78.2mn from RM299.1mn, on the absence of land sale related income, and as operating expenses ballooned due to the provision of impairment for prepaid excise duties. The year-ago quarter had booked a land sale related income of RM159.5mn. Quarterly revenue, meanwhile, fell 17% YoY to RM700.2mn — its lowest in at least 40 quarters — from RM840.6mn. BAT said it made the provision for impairment of prepaid excise duties of RM21.0mn during the quarter, which pushed its operating expenses to RM118.2mn, from RM83.3mn a year ago. It said the sum is pending refund from the Royal Malaysian Customs, but it decided to be prudent by recording the provision as Customs has yet to decide on the refund. (The Edge Markets / Bursa Malaysia) Page 5 of 8
8. 14-Feb-18 N e w s I n B r i e f Economy Asia Singapore Home Prices May Rise Up to 10 %, CapitaLand CEO says Singapore housing prices may rise as much as 10% this year, following a pickup in home sales, the chief executive officer of Southeast Asia’s biggest developer said. “Transaction volume has gone up and usually that’s a precursor to some price increase,” Lim Ming Yan, the president and CEO of CapitaLand Ltd., said in an interview in Singapore. “A 5-to-10% increase is possible this year barring any unforeseen major volatility in the capital markets.” Lim was speaking after the developer said net income fell 38% to S$267.7mil (US$202mil) in the three months ended Dec. 31 after finishing fewer homes to sell in China. Rising prices and climbing sales are reinforcing signs the city-state’s residential market is emerging from a four-year slump. Developers have been aggressively bidding for land on the back of the recovery. CapitaLand, which has largely stayed away from the bidding war, said Tuesday it bought a redevelopment project near the central business district for S$728mil, which it will turn into an 800-unit residential complex. (The Star) Japan Producer Prices Gain 0.3% on Month in January Producer prices in Japan picked up 0.3 percent on month in January, the Bank of Japan said on Tuesday. That was in line with expectations and up from the downwardly revised 0.1 percent gain in December (originally 0.2 percent). On a yearly basis, producer prices advanced 2.7 percent - matching forecasts and down from the downwardly revised 3.0 percent in the previous month (originally 3.1 percent). Export prices were down 0.4 percent on month and up 1.8 percent on year, the bank said, while import prices fell 0.4 percent on month and jumped 4.9 percent on year. (RTT) RBA's Ellis Says Firms Reluctant to Raise Wages Australian companies are reluctant to grant wage rises as this would increase prices of their products in the face of competitive landscape, Reserve Bank of Australia Assistant Governor Luci Ellis said. There are some signs of labor market tightening in the business surveys, suggesting that suitable labor is becoming increasingly difficult to find, Ellis said in Sydney. She noted that so far, though, the response to that difficulty has not been to pay people more to ensure they stay, or poach them from elsewhere. Instead, firms are increasingly using other creative ways to attract and keep staff without paying across-the-board wage rises, said Ellis. These include everything from hiring bonuses, to offering extra hours, to increasing perks and workplace conditions. RBA expects wage growth to pick up from the current level, but not immediately and then only gradually. The central bank last year estimated nonaccelerating-inflation rate of unemployment at around 5%. "Since then we have not seen a reason to change that broad assessment," the banker said. (RTT) Australia Business Confidence Index Rises to +12 – NAB Business confidence in Australia ticked higher in January, the latest survey from the National Australia Bank revealed with an index score of +12. That's up from the downwardly revised +10 in December. The NAB also said that its index for business conditions jumped to +19 from +13 in the previous month. (RTT) Page 6 of 8
9. 14-Feb-18 United States Record Number of U .S. Small-Business Owners Say It’s a Good Time to Expand Optimism among small companies in the U.S. rose more than forecast in January, fueled by a record number of owners who said now was a good time to expand, according to a National Federation of Independent Business survey. Overall index rose by 2 points to 106.9 (est. 105.3), close to November’s 107.5 reading that was highest in monthly data to 1986. 32% said now was a good time to expand businesses, exceeding all monthly figures to 1986 and quarterly readings back to 1973. Net 41% expect economy to improve, up from 37% month earlier. Six of the 10 components that make up the small-business optimism index increased in January, producing one of the strongest readings in the 45-year history of the survey. The figures show sustained, sturdy business sentiment since the November 2016 election. A measure of plans to boost capital spending in coming months increased by 2 points to 29 percent, consistent with other data indicating robust outlays for equipment. One in five small companies said they plan to boost hiring, unchanged from the prior month, as finding qualified workers remains problematic and underscores a tight job market. (Bloomberg) Europe and Uni ted Kingdom UK Inflation Sticks Near Five-Year Highs at 3% UK inflation was unchanged at 3% in January as a fall in the price of fuel was offset by relatively stable prices for cultural services such as trips to the zoo. Analysts had expected the rate of inflation to drop to 2.9% according to a poll by Thomson Reuters conducted before the data was released. Food prices fell alongside fuel prices. The ONS said that food prices tend to fall in January and an increase in the same month the previous year, “was unusual and reflected an increasing trend in food prices that began in late 2016.” Inflation as measured by the Retail Price Index dropped to 4% from 4.1% in December. RPI is no longer classed as a national statistic but is used for the price of some forms of government debt. The data follow indications from the Bank of England that it intends to raise interest rates earlier and faster than previously expected in order to tame emerging inflationary pressures from higher labour costs and a robust global economy. Data on the costs faced by businesses suggested that the inflationary effects of the fall in the pound following the Brexit vote are now easing. The annual rate of change in the price of imported materials and fuels fell to 3.5% from 5.2% in December, this was the slowest rate since June 2016. (Financial Times) UK House Prices Bouncing Back to 'Healthier Levels' Official figures suggest that Britain's house prices could be recovering, with annual growth up 5.2% in the year to December, an increase of 0.2% from November. The data, published by HM Land Registry and Office for National Statistics (ONS), shows that while the annual growth rate has lingered around 5% throughout 2017, prices appear to be rising. The average house stood at £227,000 in December, £12,000 higher than in December 2016 and £1,000 higher than last month. Despite reports of a sluggish housing market in London, prices have rebounded in the capital, rising by an average £4,000 between November and December, following a fall of £6,000 between October and November. Regionally, the South West showed the highest annual growth, with prices increasing by 7.5% in the year to December. This was followed by the East Midlands and the West Midlands, which both recorded annual growth of 6.3%. London experienced the lowest annual growth, at 2.5%. (The Telegraph) Page 7 of 8
10. 14-Feb-18 Share Buy-Back : 13 February 2018 Company GLOMAC KOMARK KPJ MALAKOF NPC NYLEX SNTORIA UNIMECH YILAI Bought Back Price (RM) 30,000 61,500 600,000 744,000 4,500 10,000 400,000 17,100 3,000 0.52 0.20/0.19 0.895/0.87 0.92/0.91 2.00/1.92 0.82/0.795 0.58/0.57 1.02/1.00 0.75 Total Treasury Shares 0.535/0.52 5,608,400 0.20/0.18 5,387,200 0.895/0.87 64,609,600 0.92/0.91 12,820,800 2.00/1.92 3,120,200 0.82/0.795 5,883,324 0.58/0.565 3,571,000 1.02/1.00 6,759,910 0.75 8,665,108 Source: Bursa Malaysia Hi/Lo (RM) 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 8 of 8
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) PER (X) Div Yield (%) FY18 FY19 FY18 FY19 FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD 13-Feb-18 AUTOMOBILE BAUTO 2.17 2.50 15.2% Buy 2,514 0.48 14.3 19.9 15.2 10.9 5.3 5.5 2.47 -12.1 1.84 17.9 MBMR 2.35 2.32 -1.3% Under Review 919 0.75 23.2 23.9 10.1 9.8 2.0 2.0 2.60 -9.6 2.01 16.9 -1.4 6.8 PECCA 1.34 1.86 38.8% Buy 248 0.41 11.1 12.5 12.0 10.7 4.1 4.6 1.70 -21.2 1.28 4.7 -13.5 SIME 2.68 1.97 -26.5% Hold 18,226 1.57 12.0 12.7 22.4 21.2 1.1 1.2 3.06 -12.4 2.03 32.3 21.3 UMW 6.61 4.37 -33.9% Sell 7,722 1.29 20.7 36.9 32.0 17.9 1.5 2.7 6.98 -5.3 4.70 40.6 27.1 BANKS & FINANCIAL SERVICES ABMB 4.12 4.60 11.7% Hold 6,378 1.29 30.6 35.6 13.5 11.6 3.9 3.9 4.49 -8.2 3.62 13.8 1.0 AFFIN 2.53 2.70 6.7% Hold 4,916 0.93 24.2 28.1 10.4 9.0 3.2 3.2 2.98 -15.0 2.22 13.9 9.5 AMBANK 4.43 5.50 24.2% Buy 13,353 1.38 48.6 52.0 9.1 8.5 4.1 4.1 5.70 -22.3 4.06 9.1 0.5 CIMB 6.90 7.50 8.7% Hold 63,656 1.65 50.8 56.0 13.6 12.3 4.2 4.1 7.36 -6.3 4.91 40.5 5.5 HLBANK 18.00 19.30 7.2% Hold 36,821 0.83 114.2 120.9 15.8 14.9 2.5 2.5 18.80 -4.3 13.26 35.7 5.9 MAYBANK 10.10 10.50 4.0% Hold 109,329 1.02 70.6 77.4 14.3 13.0 5.0 5.0 10.24 -1.4 8.31 21.5 3.1 PBBANK 22.02 25.10 14.0% Buy 85,030 0.69 142.4 149.8 15.5 14.7 2.6 2.7 22.62 -2.7 19.66 12.0 6.0 RHBBANK 5.15 5.70 10.7% Hold 20,652 1.58 52.2 53.8 9.9 9.6 2.9 2.9 5.61 -8.2 4.71 9.3 3.0 BURSA 10.98 11.80 7.5% Buy 5,902 0.93 43.9 45.0 25.0 24.4 3.3 3.3 11.30 -2.8 8.08 35.9 8.5 Note: BURSA proposed bonus issue of shares on the basis of 1 for 2. Ex-Target price RM7.04 BUILDING MATERIALS ANNJOO 3.63 4.40 21.2% Buy 1,876 1.30 45.1 48.9 8.1 7.4 6.1 7.2 3.98 -8.8 2.27 59.9 -6.0 CHINHIN 1.03 1.36 32.0% Buy 573 1.09 12.4 12.0 8.3 8.6 4.9 5.8 1.49 -30.9 0.90 14.4 -14.9 ENGTEX 1.05 1.38 31.4% Buy 447 0.83 14.2 16.1 7.4 6.5 3.9 5.2 1.52 -30.9 1.01 4.0 -4.5 GADANG 1.05 1.69 61.0% Buy 693 1.12 14.2 18.1 7.4 5.8 2.9 2.9 1.37 -23.4 1.01 4.0 -5.4 GAMUDA 4.99 6.00 20.2% Buy 12,257 0.88 34.5 35.7 14.5 14.0 2.4 2.4 5.52 -9.6 4.58 9.0 0.6 IJM 2.88 2.89 0.3% Sell 10,450 1.07 13.7 18.2 21.0 15.9 3.3 3.3 3.61 -20.2 2.66 8.3 -5.6 CONSTRUCTION KAB 0.26 0.38 47.1% Buy 8 na 31.4 37.3 0.8 0.7 3.9 4.7 0.33 -22.7 0.25 4.1 -15.0 PESONA 0.40 0.55 39.2% Buy 274 1.11 5.8 4.8 6.8 8.3 3.8 3.8 0.74 -46.3 0.40 0.0 -12.2 -10.4 SENDAI 0.78 0.55 -29.0% Sell 605 1.19 9.1 8.5 8.5 9.1 1.3 1.3 1.39 -44.2 0.51 53.5 SUNCON 2.44 2.65 8.6% Buy 3,153 0.62 14.7 16.4 16.6 14.8 2.3 2.5 2.64 -7.6 1.70 43.5 -2.8 WCT 1.53 1.64 7.2% Hold 2,152 0.86 12.6 11.2 12.1 13.7 2.0 2.0 2.48 -38.2 1.46 4.8 -5.6 LITRAK 5.75 6.26 8.9% Hold 3,035 0.36 45.6 47.1 12.6 12.2 4.3 4.3 6.15 -6.5 5.40 6.5 3.6 CARLSBG 16.48 18.06 9.6% Buy 5,070 0.76 86.2 88.7 19.1 18.6 5.2 5.4 16.60 -0.7 13.98 17.9 7.7 HEIM 20.36 19.14 -6.0% Buy 6,151 0.37 84.0 88.3 24.2 23.1 3.7 3.9 20.38 -0.1 15.86 28.4 7.7 AEON 1.57 1.97 25.5% Sell 2,204 0.43 6.7 7.7 23.5 20.4 2.5 2.9 2.70 -41.9 1.55 1.3 -10.8 AMWAY 7.60 8.18 7.6% Buy 1,249 0.48 43.9 45.2 17.3 16.8 5.0 5.3 8.18 -7.1 7.04 8.0 3.0 F&N 29.82 33.74 13.1% Buy 10,930 0.21 122.7 145.8 24.3 20.4 2.7 3.2 30.30 -1.6 22.64 31.7 10.4 CONSUMER Brewery Retail HUPSENG 1.11 1.25 12.6% Buy 888 0.41 5.7 5.9 19.5 18.8 5.4 5.4 1.28 -13.3 1.05 5.7 1.8 JOHOTIN 1.20 1.75 45.8% Buy 373 0.73 12.8 13.5 9.4 8.9 4.2 4.5 1.76 -31.8 1.16 3.4 -0.8 NESTLE 116.80 120.50 3.2% Buy 27,390 0.49 325.4 368.7 35.9 31.7 2.5 2.9 117.00 -0.2 75.40 54.9 13.2 PADINI 5.04 4.67 -7.3% Sell 3,316 0.75 28.0 30.4 18.0 16.6 2.5 2.6 5.50 -8.4 2.39 110.9 -4.5 POHUAT 1.51 2.01 33.1% Buy 332 0.49 22.9 25.4 6.6 5.9 5.3 5.3 2.07 -27.0 1.45 4.1 -15.6 QL 4.81 3.26 -32.2% Sell 7,804 0.53 12.8 14.7 37.5 32.7 0.9 1.0 4.84 -0.6 3.26 47.8 10.6 SIGN 0.59 0.92 55.9% Buy 135 0.78 6.9 9.2 8.5 6.4 4.2 5.9 1.07 -44.9 0.58 1.7 -16.3 32.88 34.72 5.6% Hold 9,388 1.41 170.8 168.8 19.3 19.5 4.9 4.9 51.04 -35.6 31.40 4.7 -17.8 GENTING 8.86 11.53 30.1% Buy 33,946 1.49 54.4 59.8 16.3 14.8 1.8 1.8 10.00 -11.4 8.48 4.5 -3.7 GENM 5.26 6.51 23.8% Buy 29,765 1.50 27.0 30.6 19.5 17.2 1.7 1.9 6.38 -17.6 4.87 8.0 -6.6 2.21 3.34 51.1% Buy 2,977 0.68 21.5 26.0 10.3 8.5 7.2 8.1 3.00 -26.3 2.20 0.5 -1.3 CCMDBIO 2.74 2.70 -1.5% Buy 764 0.87 15.0 16.1 18.2 17.1 3.6 3.8 3.03 -9.6 1.97 39.1 8.3 IHH 6.00 6.40 6.7% Buy 49,438 0.76 11.9 15.0 50.5 40.1 0.5 0.6 6.34 -5.4 5.42 10.7 2.4 KPJ 0.90 1.12 25.1% Buy 3,775 0.51 3.7 4.2 23.9 21.5 2.3 2.6 1.14 -21.5 0.87 2.9 -7.7 HARTA 11.34 7.80 -31.2% Sell 18,763 1.17 25.2 28.9 45.0 39.3 1.3 1.5 12.18 -6.9 4.67 142.8 6.2 KOSSAN 8.50 8.80 3.5% Buy 5,435 0.54 38.3 43.0 22.2 19.8 2.3 2.5 8.79 -3.3 5.62 51.2 4.8 SUPERMX 2.19 1.80 -17.8% Sell 1,436 0.41 15.3 17.9 14.3 12.2 2.4 2.8 2.50 -12.4 1.69 29.6 9.5 TOPGLOV 9.25 9.35 1.1% Sell 11,615 0.56 41.6 50.8 22.3 18.2 1.5 1.9 10.00 -7.5 4.56 102.9 15.8 KAREX 1.05 1.00 -4.8% Sell 1,052 0.61 2.8 5.2 38.0 20.2 0.7 1.2 2.41 -56.4 1.03 1.9 -19.2 SCIENTX 8.23 9.84 19.6% Buy 4,024 0.84 67.5 74.1 12.2 11.1 2.2 2.3 9.85 -16.4 6.89 19.4 -5.0 SKPRES 1.77 2.20 24.3% Buy 2,213 0.80 10.4 14.8 17.1 12.0 2.9 4.2 2.35 -24.7 1.24 42.7 -22.4 ASTRO 2.59 3.10 19.7% Buy 13,504 0.91 14.0 13.7 18.6 18.9 5.0 5.2 2.94 -11.9 2.40 7.9 -2.3 MEDIA PRIMA 0.61 0.45 -26.2% Sell 677 1.35 -3.8 -1.7 na na 0.0 0.0 1.28 -52.3 0.58 5.2 -19.7 STAR 1.40 1.25 -10.7% Sell 1,033 1.09 6.7 6.7 20.8 20.8 8.6 8.6 2.22 -36.9 1.31 6.9 -15.2 Tobacco BAT GAMING Casino NFO BJTOTO HEALTHCARE Hospitals/ Pharmaceutical Rubber Gloves INDUSTRIAL MEDIA
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) FY18 PER (X) Div Yield (%) FY19 FY18 FY19 FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.43 0.72 67.4% Buy 755 1.47 4.2 4.5 10.3 9.5 2.3 2.3 0.69 -37.7 0.29 50.9 LCTITAN 5.16 6.10 18.2% Buy 11,729 na 56.3 60.9 9.2 8.5 4.8 5.2 6.53 -21.0 4.14 24.6 -11.3 9.8 MHB 0.85 0.81 -4.7% Sell 1,360 1.38 0.5 1.7 176.6 50.9 0.0 0.0 1.16 -26.7 0.63 36.0 3.0 MISC 7.08 7.00 -1.1% Sell 31,604 1.17 50.1 53.8 14.1 13.2 4.2 4.2 7.90 -10.4 6.89 2.8 -4.6 PANTECH 0.60 0.69 15.0% Buy 447 1.23 6.1 6.8 9.9 8.8 4.6 5.1 0.74 -18.9 0.47 29.0 -7.0 PCHEM 7.98 7.96 -0.3% Hold 63,840 0.90 49.8 52.6 16.0 15.2 2.8 2.9 8.28 -3.6 6.80 17.4 3.6 SAPNRG 0.67 1.25 86.6% Buy 4,015 2.01 -6.5 -5.0 na na 0.0 0.0 2.10 -68.1 0.67 0.8 -5.6 SERBADK 3.50 4.16 18.9% Buy 5,140 na 27.7 32.7 12.6 10.7 2.3 2.9 3.66 -4.4 1.52 130.3 8.0 UMWOG 0.31 0.51 67.2% Buy 2,506 1.73 0.4 1.2 75.5 24.6 0.0 0.0 0.70 -56.3 0.27 13.0 0.0 UZMA 1.33 1.56 17.3% Sell 426 0.92 13.1 14.2 10.2 9.4 0.0 0.0 1.98 -32.8 1.26 5.6 3.9 FGV 1.87 2.01 7.5% Sell 6,822 1.52 3.7 4.5 50.5 41.1 2.7 2.7 2.18 -14.2 1.51 23.8 10.7 IJMPLNT 2.29 2.69 17.5% Sell 2,017 0.19 9.1 12.5 25.1 18.3 3.5 3.9 3.50 -34.6 2.29 0.0 -16.4 IOICORP 4.70 4.12 -12.3% Sell 29,534 0.89 21.0 21.7 22.3 21.7 3.4 6.4 4.81 -2.3 4.31 9.0 3.5 KFIMA 1.45 1.89 30.3% Buy 409 0.66 13.3 14.5 10.9 10.0 6.2 6.2 1.96 -26.0 1.45 0.0 -7.6 KLK 25.28 27.07 7.1% Hold 26,922 0.62 120.7 125.7 20.9 20.1 2.4 2.5 25.40 -0.5 23.66 6.8 1.1 SIMEPLT 5.58 6.25 12.0% Buy 37,949 na 21.0 22.1 26.5 25.3 2.5 2.7 6.00 -7.0 4.58 21.8 -7.0 TSH 1.61 2.10 30.4% Buy 2,223 0.60 9.3 9.6 17.3 16.8 1.5 1.5 1.93 -16.6 1.56 3.2 -2.4 UMCCA 6.28 6.73 7.2% Sell 1,317 0.39 22.7 34.8 27.6 18.0 2.7 2.9 7.08 -11.3 5.76 9.0 -3.5 GLOMAC 0.52 0.46 -11.5% Sell 413 0.65 3.0 4.4 17.6 11.8 3.8 3.8 0.67 -22.7 0.50 5.1 -6.2 HUAYANG 0.59 0.58 -0.9% Sell 206 0.89 0.7 3.4 89.5 17.2 0.9 0.9 1.21 -51.7 0.58 1.7 -4.1 IBRACO 0.77 0.92 20.3% Hold 380 na 9.1 12.4 8.4 6.1 5.2 6.5 0.98 -21.5 0.50 53.0 -6.1 IOIPG 1.97 2.02 2.5% Hold 10,847 0.85 16.5 16.3 11.9 12.1 3.0 3.0 2.22 -11.3 1.79 10.1 6.5 MAHSING 1.27 1.69 33.1% Buy 3,083 0.98 13.0 12.6 9.7 10.1 5.1 5.1 1.64 -22.6 1.27 0.0 -12.4 PLANTATIONS PROPERTY SIMEPROP 1.45 1.61 11.0% Sell 9,861 na 9.2 9.1 15.8 15.9 1.4 1.4 1.78 -18.5 1.04 39.4 -18.5 SNTORIA 0.57 0.76 33.3% Buy 322 0.14 8.3 8.6 6.9 6.6 1.8 1.8 0.91 -37.3 0.57 0.9 -18.0 SPB 4.78 5.28 10.5% Hold 1,642 0.66 21.2 26.1 22.6 18.3 2.5 2.5 5.50 -13.1 4.39 8.9 -2.4 SPSETIA 3.20 3.77 17.8% Buy 12,010 0.94 21.3 21.9 15.0 14.6 3.8 3.8 4.38 -27.0 3.07 4.2 -20.0 SUNWAY 1.65 1.74 5.5% Hold 8,078 0.92 11.9 12.6 13.9 13.1 3.0 3.6 1.96 -15.8 1.31 25.8 1.2 SUNREIT 1.74 1.87 7.5% Hold 5,124 0.86 10.0 10.7 17.3 16.3 5.8 6.1 1.90 -8.4 1.64 6.1 -8.4 CMMT 1.25 1.64 31.2% Buy 2,547 0.74 7.9 8.6 15.8 14.5 6.6 7.1 1.83 -31.7 1.24 0.8 -31.7 REIT POWER & UTILITIES MALAKOF 0.92 1.16 26.1% Buy 4,583 0.85 6.0 6.8 15.3 13.5 7.6 7.6 1.32 -30.3 0.86 7.0 -6.1 PETDAG 25.00 22.08 -11.7% Sell 24,836 0.39 105.1 105.7 23.8 23.6 3.1 3.2 26.20 -4.6 21.00 19.0 3.1 PETGAS 17.80 19.10 7.3% Buy 35,221 0.87 98.8 99.5 18.0 17.9 3.9 3.9 21.04 -15.4 15.82 12.5 1.8 TENAGA 15.74 18.33 16.5% Buy 89,183 0.57 131.3 127.5 12.0 12.3 4.3 4.1 16.12 -2.4 13.44 17.1 3.1 YTLPOWR 1.20 1.17 -2.5% Sell 9,329 0.87 9.8 10.3 12.2 11.7 4.2 4.2 1.50 -20.0 1.11 8.1 -7.0 TELECOMMUNICATIONS AXIATA 5.61 6.50 15.9% Buy 50,761 1.55 15.9 19.5 35.2 28.8 1.4 2.8 5.82 -3.6 4.24 32.3 2.2 DIGI 4.83 5.15 6.6% Hold 37,553 0.93 19.7 20.4 24.5 23.7 4.1 4.2 5.19 -6.9 4.36 10.8 -5.3 MAXIS 6.02 6.05 0.5% Sell 47,020 1.06 25.2 25.0 23.9 24.0 3.2 3.2 6.60 -8.8 5.48 9.9 0.2 TM 6.07 7.20 18.6% Buy 22,811 0.62 23.2 24.9 26.2 24.4 3.4 3.7 6.69 -9.3 5.85 3.8 -3.7 ELSOFT 2.56 2.70 5.5% Hold 704 0.76 13.4 15.3 19.1 16.8 3.7 4.2 2.95 -13.2 1.54 66.0 -5.2 IRIS 0.19 0.25 35.1% Buy 457 2.46 0.6 0.7 33.4 27.7 0.0 0.0 0.25 -24.5 0.12 60.9 0.0 INARI 3.31 3.35 1.2% Under Review 6,833 0.71 14.0 15.7 23.6 21.1 3.0 3.4 3.82 -13.4 1.83 81.2 -2.6 TECHNOLOGY Semiconductor & Electronics Note: INARI proposed bonus issue shares on the basis of 1 for 2. For more detail please refer to 30.01.18 report. MPI 9.06 10.70 18.1% Hold 1,802 0.75 73.9 86.9 12.3 10.4 3.5 3.5 14.52 -37.6 8.91 1.7 -28.2 UNISEM 2.74 3.25 18.6% Under Review 2,011 1.16 19.0 20.3 14.4 13.5 4.4 4.4 4.25 -35.5 2.65 3.4 -24.9 TRANSPORTATION Airlines AIRASIA 4.23 3.83 -9.5% Buy 14,136 1.31 38.3 39.8 11.1 10.6 1.2 1.4 4.34 -2.5 2.57 64.6 26.3 AIRPORT 8.40 8.64 2.9% Sell 13,937 1.39 19.7 20.1 42.5 41.7 2.1 1.4 9.45 -11.1 6.35 32.3 -4.4 Freight & Tankers PTRANS 0.29 0.46 61.4% Buy 358 na 2.4 3.8 11.9 7.5 2.5 3.8 0.38 -25.4 0.15 95.9 1.8 TNLOGIS 1.12 1.80 60.7% Buy 512 1.14 13.6 14.0 8.2 8.0 4.5 4.5 1.83 -38.9 1.11 0.9 -16.4 WPRTS 3.60 4.06 12.8% Buy 12,276 0.49 15.6 20.0 23.1 18.0 1.1 1.4 4.19 -14.1 3.12 15.4 -2.7 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) % upside Recom Market Cap. (S$m) Beta EPS (cent) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52week 52week % Chg High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 27.63 30.50 10.4% Buy 70,840 1.18 212.8 246.6 13.0 11.2 2.4 2.5 27.7 -0.1 18.12 52.5 11.2 OCBC 12.57 13.50 7.4% Buy 52,616 1.21 104.1 110.6 12.1 11.4 6.7 7.7 13.3 -5.6 9.38 34.0 1.5 UOB 26.84 26.90 0.2% Hold 44,636 1.16 215.4 229.3 12.5 12.5 2.6 2.6 28.5 -5.7 20.63 30.1 1.5 PLANTATIONS WILMAR 3.01 3.63 20.6% Hold 19,260 0.81 29.9 31.8 10.1 9.5 2.7 3.0 4.0 -24.0 2.97 1.3 -2.6 IFAR 0.35 0.53 51.4% Hold 502 1.01 5.2 5.7 6.7 6.1 3.6 4.0 0.6 -39.7 0.35 0.0 -10.3 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
13. RESULTS UPDATE Wednesday , February 14, 2018 FBMKLCI: 1,832.18 Sector: Consumer THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* British American Tobacco (Malaysia) Berhad TP: RM34.72 (+5.6%) Last Traded: RM32.88 Defending Its Market Shares in the Legal Industry Damia Othman Tel: +603-2167-9602 Hold damia@ta.com.my Review BAT’s FY17 financial results came in below ours and consensus estimates at 90% of full-year forecasts. The variance was mainly due to lower-thanexpected revenue and higher-than-expected operating cost. After excluding exceptional items of RM19.4mn, FY17 adjusted net profit declined by 29.6% YoY to RM512.1mn. Revenue fell by 20.1% YoY to RM3.0bn due to: i) lower Domestic and Duty-Free volumes (-14.7 YoY; to 4.0bn sticks); ii) cessation of contract manufacturing for exports; and iii) high introductory costs of new product for the launch of Rothmans brand in 4QFY17. This was partially offset by the growth in lower price segment products. QoQ, 4QFY17 adjusted net profit declined by 28.8% to RM102.2m. Revenue was lower by 7.5% QoQ to RM700.2mn due to decline in sales volume (-1.5%-pts QoQ; to 1.0bn sticks). For this quarter, the total industry volume decreased by 3% due to illicit trades while BAT’s sales volume declined by only 1.5%, indicating a win of market share by 0.3%pts QoQ to 53.9%. BAT’s Premium brand, i.e.: Dunhill, recorded a market share of 37.7% (-0.7%-pts QoQ), the Aspiration Premium segment maintained its leadership position in the market with a 10.7% market share and the new entrant Value For Money segment; Rothmans held market share of 2.8% in end-FY17 (+1.0%-pts since introduction in Oct17). The board declared a final interim dividend of 43sen/share (77sen/share in 4QFY16), tax exempt under the single-tier tax system for the quarter under review. Impact We reduce our earnings forecasts by 8.9% and 3.8% to RM487.7mn and RM482.0mn for FY18 and FY19 respectively taking into consideration: i) growing threats of illegal cigarettes market, and ii) unfavourable sales mix due to declining sales of Premium segment products. We also introduce our FY20 earnings forecast and expect net profit to grow by 3.2% YoY to RM497.6mn. Outlook In 4QFY17, BAT has charged out a provision for impairment of prepaid excise duties of RM21.0mn (1.3% of total excise duties paid in FY17) which is pending a refund from the Royal Malaysian Customs (RMC). This refers to the unutilised tax stamps wastages from the manufacturing process. Decision on the refund for prepaid excise duties has yet to be approved by the RMC. We have considered this as part of our exceptional items together with other provisions, foreign exchange gains and loss/gains on derivatives. www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (RMmn) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) British American Tobacco Pls Aberdeen Employee Provident Fund ROTH MK 4162 Main Market 285.5 9,387.2 51.04/31.40 304.9 41.7 1.41 50 5.01 5.01 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 (8.9) (3.8) 488 482 609 635 80.1 76.0 Buy (Downgraded) Financial Indicators Net debt/equity (%) ROE (%) ROA (%) NTA/Share (RM) Price/ NTA (x) FY18 82.8 118.1 46.4 2.2 14.7 FY19 75.9 110.0 44.6 2.3 14.0 % of FY17 90 90 Below Below BAT (2.7) (17.1) (23.9) (30.8) FBM KLCI 0.5 5.7 3.4 7.2 Scorecard vs. TA vs. Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 3
14. 14-Feb-18 Management guided that the amount of marketing expenses for Rothmans in FY18 is expected to be the same as the amount spent in 4QFY17 for new product launch , i.e.: RM10-15mn. Considering that BAT imports all its cigarettes, the strengthening Ringgit is expected to support the group’s profit for FY18. Illicit cigarettes traders continued to be the main threat to the tobacco industry as it reached 59% of tobacco market share in Malaysia as of 4Q17. With estimated tax revenue loss of RM4.0bn for 2017, the government is expected to enforce stricter enforcements to combat illicit cigarettes traders. Management guided that re-introduction of small packs of cigarettes are still not off the table as the government has not come back with a decision, similar status to the clear packaging implementation proposed by government. Valuation We downgrade our call from Buy to Hold with a lower target price of RM34.72/share (previously RM52.08/share). We increase our discount rate to 6.6% and reduce the growth rate to 2.0% (previously WACC: 6.3%, g: 2.4%) based on DCF valuation. Our valuation has taken into account: i) continuing threat of illicit cigarette traders, ii) declining sales volume across Premium brand and, iii) continuous good dividend yield. Earnings Summary (RMmn) FYE 31 Dec Revenue Cost of sales Gross profit EBITDA EBIT Exceptional Item Reported PBT Taxation Reported net profit Adj. Net profit Adj. EPS EPS Growth PER Net Dividend Dividend Yield (sen) (%) (x) (sen) (%) FY16 3,756.4 (2,486.8) 1,269.6 931.6 919.0 6.5 908.5 (187.2) 721.3 714.8 FY17 3,002.3 (1,971.7) 1,030.6 656.3 650.6 19.4 639.2 (146.6) 492.6 512.1 FY18E 2,944.3 (2,032.3) 912.1 647.6 644.1 633.4 (145.7) 487.7 487.7 FY19F 3,003.2 (2,093.2) 910.0 641.3 636.7 625.9 (144.0) 482.0 482.0 FY20F 3,093.3 (2,156.0) 937.3 661.5 655.8 646.2 (148.6) 497.6 497.6 250.3 (20.7) 13.0 278.0 8.5 179.3 (31.7) 19.1 169.0 5.1 170.8 (1.0) 19.3 160.0 4.9 168.8 (1.2) 19.5 160.0 4.9 174.3 3.2 18.9 160.0 4.9 Page 2 of 3
15. 14-Feb-18 FY17 Results Analysis (RMmn) FYE 31 December Revenue Cost of sales Gross Profit EBITDA D&A EBIT Adj. EBIT Exceptional items Net interest Profit before tax Taxation Reported net profit Adj. Net Profit 4QFY16 840.6 (572.8) 267.8 319.3 (2.3) 317.0 448.9 (131.9) (0.5) 316.5 (27.2) 289.3 421.3 3QFY17 757.3 (481.2) 276.1 190.8 (1.3) 189.5 187.5 2.0 (2.6) 186.9 (41.4) 145.5 143.5 4QFY17 700.2 (483.3) 216.9 107.1 (1.7) 105.3 126.5 (21.1) (3.3) 102.0 (21.0) 81.0 102.2 QoQ (%) (7.5) 0.4 (21.5) (43.9) 35.1 (44.4) (32.5) nm 27.9 (45.4) (49.4) (44.3) (28.8) YoY (%) (16.7) (15.6) (19.0) (66.5) (24.6) (66.8) (71.8) (84.0) 578.7 (67.8) (22.8) (72.0) (75.7) FY16 3,756.4 (2,486.8) 1,269.6 932.7 (13.7) 919.0 925.5 (6.5) (10.5) 908.5 (187.2) 721.3 727.8 FY17 3,002.3 (1,971.7) 1,030.6 656.3 (5.8) 650.6 670.0 (19.4) (11.4) 639.2 (146.6) 492.6 512.1 YoY (%) (20.1) (20.7) (18.8) (29.6) (58.1) (29.2) (27.6) >+100 8.3 (29.6) (21.7) (31.7) (29.6) (72.0) (44.2) 99.2 % pts (22.7) (22.7) (23.1) 12.0 (22.8) 252.6 232.0 508.6 172.6 169.0 415.2 24.5 24.8 24.2 (20.6) 19.2 21.7 21.9 21.3 (22.9) 16.4 (31.7) (27.2) (18.4) % pts (2.8) (3.0) (2.9) (2.3) (2.8) Basic EPS DPS Dividend Payout (sen) (sen) (%) 101.3 77.0 76.0 51.0 43.0 84.3 28.4 43.0 151.4 EBIT Margin EBITDA Margin PBT Margin Tax Rate Net Profit Margin (%) (%) (%) (%) (%) 37.7 38.0 37.7 8.6 34.4 25.0 25.2 24.7 22.1 19.2 15.0 15.3 14.6 20.5 11.6 (44.3) nm 79.6 % pts (10.0) (9.9) (10.1) (1.6) (7.6) Industry volume BAT Volume; Domestic and duty free Contract manufacturing (bn) 1.9 1.9 1.8 (3.0) (3.4) 7.9 7.3 (7.1) (bn) (bn) 1.2 0.8 1.0 - 1.0 - (1.5) nm (14.9) nm 4.7 5.7 4.0 2.0 (14.7) (64.4) 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, February 14, 2018, the analyst, Damia Othman, 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 – 2031 6608 www.ta.com.my Page 3 of 3
16. RESULTS UPDATE Wednesday , February 14, 2018 FBMKLCI: 1,839.91 Sector: Oil & Gas THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* MISC Berhad TP: RM7.00 (-1.0%) Last Traded: RM7.11 Hefty 4Q17 Shipping Fleet Impairments Kylie Chan Sze Zan Tel: +603-2167 9601 SELL kyliechan@ta.com.my Review MISC’s FY17 core net profit of RM2.2bn (-4% YTD) was below our expectations but within consensus estimates, accounting for 86% and 101% of full-year forecasts respectively. www.taonline.com.my Share Information Bloomberg Code MISC MK Stock Code 3816 Listing Main Market Share Cap (mn) 4,464 Market Cap (RMmn) FY17 results are reflective of the weak operating environment for LNG and Petroleum shipping. This is on the back of depressed charter rates and fleet utilisation. This was also reflected in hefty vessel impairments amounting to USD130mn 4Q17. Therefore, even with the delivery of 3 newbuild LNG carriers, this failed to uplift shipping profit. If not for acquisition of the remaining 50% stake in Gumusut Kakap (GKL) floating production system, profits would have been much weaker. 31,604 Par Value 1.00 52-wk Hi/Lo (RM) 6.89/7.90 12-mth Avg Daily Vol ('000 shrs) 1,640.0 Estimated Free Float (%) 19.0 Beta 1.3 Major Shareholders (%) Petronas - 62.7 EPF - 6.0 Skim Amanah Saham Bumiputera - 4.4 Forecast Revision FY18 Major exceptional items in 4Q17 amounted to RM457mn, comprising: 1) vessel impairments for 5 LNG carriers (USD53.5mn) and 7 chemical carriers (USD76.5mn), 2) impairment in receivables (estimate: USD31.7mn) for Seri Balhaf and Seri Balqis due to deferral of payment collection, 3) net reversal of Tenaga 5 (T5) early contract termination fee (~USD8mn) following its disposal, 4) reversal of provisions for MOPU receivables (USD40mn), and 5) net FX changes (RM1mn). Forecast Revision (%) For Balhaf and Balqis, recall that both vessels suspended operations due to civil unrest in Yemen since 2H16. Despite this, MISC continues to receive payments from the client at the lower laid-up charter rate. Nevertheless, management is confident that contract arrears will eventually be paid, and the vessels shall resume its charters upon recommencement of operations at the Yemen LNG plant. However, as a conservative measure, MISC has impaired both vessels based on the assumption that operations shall remain suspended in FY18-19. Meanwhile, both vessels will continue to recognize deferred income based on the full charter rates, as is the case since FY17. Financial Indicators For the LNG carriers that were impaired in 4Q17, two vessels were on spot charter, whilst three have upcoming near-to-medium term contract expiries. FY19 6.9 2.8 2,234.6 2,401.0 Consensus 2,199 2,300 TA's / Consensus (%) 101.6 104.4 Net profit (RMm) Previous Rating Sell (Maintained) Scorecard % of FY vs TA vs Consensus Net Debt/equity (%) 86 Below 101 Within FY18 FY19 Net Cash Net Cash FCFPS (sen) 20.0 26.7 P/CFPS (x) 35.4 26.5 ROE (%) 6.3 6.6 ROA (%) 4.4 4.6 NTA/Share (RM) 3.9 4.0 Price/NTA (x) 1.8 1.8 Share Performance (%) Price Change MISC FBM KLCI 1 mth (2.1) -1.1 3 mth (3.5) -1.7 6 mth (3.8) -1.8 12 mth (1.7) 5.6 (12-Mth) Share Price relative to the FBMKLCI To recap, T5’s contract was prematurely terminated by its client, Petronas, in 2Q17. Following this, MISC recognised early termination fees of RM134mn from Petronas, which was partially offset by vessel impairment of USD28.5mn. The reversal of T5’s compensation was underpinned by MISC’s agreement with Petronas to share disposal gains if T5 is sold at a higher than expected price. In the case of MOPU Satu & Dua, recall that their contracts were also terminated prematurely in Jun-16. As a result, MISC recognised provisions for finance lease receivables (RM228mn) for both vessels in 1Q17. This was Source: Bloomberg Page 1 of 5
17. 14-Feb-18 on top of earlier write-offs in 4Q16 . In 4Q17, MISC had finally recovered part of its claims against the client, PCPP Operating Co. Sdn Bhd. The claims include outstanding lease and service rates, completed variation works, early termination fees, and other costs. In addition to the above, exceptional items excluded from FY17 core profit include: 1) MOPU 1 & 2 impairment loss on receivables (RM228mn), 2) (GKL) first adjudication award (USD65mn), 3) Aman Bintulu disposal gain (RM31mn), 4) Tenaga 5 compensation for early termination (RM134mn), 5) Tenaga 5 vessel impairment (USD28.5mn), 6) liner business writeback (USD9mn/RM39mn), 6) MISO Japan disposal loss (RM17.2mn), 7) Centralised Terminals disposal gain (RM43.5mn), 8) FSU Lekas maintenance cost reimbursement (USD10mn), 9) 2nd adjudication award for GKL (USD18mn), and net FX changes (RM26.6mn). LNG: FY17 reported PBT was lower, as FY16 was propped by compensation for early contract terminations. Nevertheless, this was partially offset by: 1) delivery of newbuild Seri C class vessels, comprising Camelia (Oct-16), Cenderawasih (Jan-17), and Cempaka (end-Jul-17), and 2) deferred income recognition from Seri Balhaf & Balqis, being the difference between lower laid-up rates in 2H16 and contracted rates. Additionally, lower depreciation charges cushioned profits, as several vessels were reclassified as assets held for sale in 2H17. Offshore: YTD, pretax profit was higher on the back of: 1) consolidation of GKL (previous: 50% JV stake) for the full-year (start: May-16), 2) contribution from FSO Benchamas 2 construction profits (~USD20mn). To a lesser extent, bottomline was also boosted by full-year contribution from MaMPU (Marginal Marine Production Unit), which commenced its lease in 4Q16. Petroleum: FY17 PBT slipped into losses (FY16: USD35mn profit) due to: 1) weaker charter rates, 2) more expensive bunker costs, 3) lower fleet utilisation, and 4) losses from the Chemical fleet. This was partially cushioned by: 1) delivery of two new VLCCs in 2H17, and 2) maiden contribution from two newbuild LR2 petroleum tankers that were chartered out to Total in Jun-July 2017. On the bright side, excluding 4Q17 vessel impairments, this segment managed to turnaround at the pretax level with core PBT of RM5.6mn (3Q17: RM19mn loss, 2Q17: RM10mn loss). Heavy Engineering: The surge in pretax profit was attributed to: 1) chunky recognition of change orders in 2H17, and 2) lumpy investment tax allowances in 4Q17. On the flipside, the Marine segment delivered weaker EBIT due to lower value of vessel repairs. MISC declared 4th interim DPS of 9 sen (4Q16: 20 sen), which brings FY17 DPS to 30 sen (FY16: 30 sen), similar to FY16’s payout. We expect FY18 results to be stronger, boosted by: 1) delivery of 7 new vessels (2x LNG Carriers in end-Feb and Apr, 2x Suezmax, 3x Aframax), 2) full-year contribution from LNG newbuilds, Seri Cenderawasih and Cempaka. However, this would be partially offset by: 1) weak fleet utilisation and charter rates for the petroleum fleet, 2) smaller fleet of Aframaxes, and 3) we assume that Puteri Intan & Delima do not secure new contracts in FY18. Page 2 of 5
18. 14-Feb-18 Impact Major changes to our earnings forecasts include : 1) lowered 2018-19 USD/MYR assumption to 4.0 (previous: 4.15), 2) incorporated FY17 annual unaudited figures, 3) introduced FY20 forecasts into our estimates, 4) incorporated our revised FY18-19 forecast for MMHE, 5) reduced depreciation charges in FY18-19 on the back of FY17 asset impairments, and 5) lowered tax assumptions in FY18-19. As a result, our FY18/19 forecasts are raised by 7%/3%. Valuation Following the revision to our forecasts, our TP for MISC is raised to RM7.00 (previous: RM6.56) based on unchanged 14x FY18 P/E. Maintain Sell. The outlook for charter and utilisation rates for the shipping fleet remain bleak at this juncture. This is underpinned by vessel oversupply, particularly in the petroleum and LNG segment. Evidently, spot rates are at multi-year lows (Figures 1 & 2), and Orderbook as a percentage of Fleet remains escalated in Jan-18:- 1) Petroleum: 23% (Jan-17: 22%) and 2) Aframax: 14% (Jan-17: 13%). Additionally, orderbook replenishment at the Offshore and Heavy Engineering segment also appear challenging. According to AFP, oil majors are expected to cut investment in Exploration and Production (E&P) activities by 16% this year. On top of that, oil majors are expected to maintain cost rationalisation measures, thus weighing on charter rates and contract margins. Table 1: Earnings Summary (RM’mn) FYE Dec 31 FY16 FY17 FY18E FY19F FY20F Revenue 9,597.2 10,037.7 10,797.4 12,069.3 12,564.1 EBITDA 4,250.4 4,588.3 4,255.9 4,391.3 4,474.0 44.3 45.7 39.4 36.4 35.6 Pretax Profit 2,537.2 2,227.5 2,266.7 2,435.4 2,583.4 Net Profit 2,581.6 1,981.4 2,234.6 2,401.0 2,546.9 Net Profit - adj 2,304.8 2,205.4 2,234.6 2,401.0 2,546.9 EBITDA Margin (%) EPS (sen) 57.8 44.4 50.1 53.8 57.1 EPS - adj (sen) 51.6 49.4 50.1 53.8 57.1 EPS growth (%) 4.6 (4.3) 1.3 7.4 6.1 PER (x) 13.7 14.3 14.1 13.2 12.4 DPS (sen) 30.0 30.0 30.0 30.0 30.0 (%) 4.2 4.2 4.2 4.2 4.2 Div yield Page 3 of 5
19. 14-Feb-18 Table 2 : FY17 Results Analysis (RM’mn) FYE Dec 4Q17 Turnover 3Q17 4Q16 QOQ (%) YOY (%) 2,434.5 2,315.8 2,517.5 5.1 ---> LNG Shipping (USD'mn) 153.8 159.9 127.9 (3.8) ---> Petroluem Shipping (USD'mn) 281.5 241.1 294.3 16.8 (4.3) ---> Offshore (USD'mn) 107.4 94.3 88.0 13.9 22.0 18.6 (14.4) (5.9) ---> Heavy Engineering (USD'mn) (3.3) FY17 FY16 YTD (%) 10,037.7 9,597.2 4.6 650.0 599.1 8.5 1,049.0 1,147.5 440.8 253.9 73.6 222.9 260.3 (14.4) 2,521.7 2,220.3 20.3 (8.6) 60.0 50.6 70.1 EBIT 627.0 678.1 666.6 Finance cost (68.6) (65.5) (68.3) 4.7 0.4 (265.0) (247.9) 6.9 35.9 49.0 6.7 (26.7) >100 194.8 288.1 (32.4) Associates & JV EI (7.5) (455.6) 138.7 20.4 >-100 >-100 276.8 >-100 42.0 706.2 504.5 (94.1) (91.7) 2,003.5 2,814.0 (28.8) PBT 497.6 567.5 484.1 (12.3) 2.8 2,227.5 2,537.2 (12.2) ---> LNG Shipping (USD'mn) (20.2) 87.6 54.4 >-100 >-100 259.0 322.2 (19.6) ---> Petroluem Shipping (USD'mn) Reported PBT (224.0) 13.6 (70.9) (18.7) 7.0 >100 >-100 (87.0) 35.2 >-100 ---> Offshore (USD'mn) 83.4 76.2 25.4 9.4 >100 276.9 80.7 >100 ---> Heavy Engineering (USD'mn) 17.2 3.6 3.4 >100 >100 13.7 1.1 >100 5.1 (10.4) (4.7) >100 >-100 (12.9) (20.7) (37.7) 21.1 (15.3) 30.1 >100 (29.9) (9.2) (211.7) (95.7) Taxation MI Reported Net Profit Adj net profit Core EPS (sen) 68.2 680.5 529.8 (90.0) (87.1) 1,981.4 2,581.6 (23.2) 523.8 541.8 509.5 (3.3) 2.8 2,205.4 2,304.8 (4.3) 11.5 12.1 11.4 (4.8) 0.7 49.4 51.6 (4.3) 9.0 7.0 20.0 30.0 30.0 DPS (sen) ppt ppt ppt EBIT margin (%) 25.8 29.3 26.5 (1.9) 15.7 25.1 23.1 (2.0) Pretax margin (%) 20.4 24.5 19.2 1.7 17.2 22.2 26.4 4.2 ---> LNG Shipping (%) (13.1) 54.8 42.5 (17.1) 17.5 56.0 73.4 17.4 ---> Petroluem Shipping (%) (25.2) (7.8) 2.4 (3.5) 2.8 (18.8) 8.0 26.8 ---> Offshore (%) 77.7 80.8 28.9 21.1 43.3 59.9 18.4 (41.5) ---> Heavy Engineering (%) 28.7 7.1 4.9 12.3 7.8 3.0 0.3 (2.7) Net margin - adj (%) 21.5 23.4 20.2 1.0 17.0 22.0 24.0 Tax rate (%) (1.0) 1.8 1.0 0.9 (4.9) (0.6) (0.8) Figure 1: LNG Charter Rates 2.0 (0.2) Figure 2: Aframax Charter Rates US$/day LNG - Time Charter 3 yrs Spot rate (USD/day) Spot rate 140000 3-yr Time Charter (USD/day) 60000 Charter Rate (USD/day) 120000 Source: Company 10000 Jul-17 Oct-17 Jan-17 Apr-17 Jul-16 Oct-16 Jan-16 Apr-16 Jul-15 Oct-15 Jan-15 Apr-15 Jul-14 Oct-14 0 Jan-14 Jul-17 Oct-17 Jan-17 Apr-17 Jul-16 Oct-16 Jan-16 Apr-16 Jul-15 Oct-15 Jan-15 Apr-15 Jul-14 Oct-14 Jan-14 Apr-14 Jul-13 Oct-13 Jan-13 Apr-13 0 Apr-14 20000 20000 Jul-13 40000 30000 Oct-13 60000 40000 Jan-13 80000 50000 Apr-13 100000 Source: Company Page 4 of 5
20. 14-Feb-18 [ TH E RE M A IN DE R OF T H IS P A GE IS IN TE N TI O NA L L Y L E F T BL 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, February 14, 2018, 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 – 2031 5048 www.ta.com.my Page 5 of 5