Bursa Malaysia Daily Market Report - 14 July

Transcription

1. Friday , 14 July, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED REPORTS’ News 1. Daily Market Commentary 2. Daily Brief Fundamental Reports 1. 2. 3. 4. Hua Yang Berhad: Weak Start to FY18 Malaysia Airports Holdings Berhad: 2Q17 Expected to Remain Strong Malaysian Economy: Bank Negara Holds Fire, OPR Keeps at 3.00% Sunway Berhad: Acquires Prime Land in Kuala Lumpur Technical Reports 1. Daily Technical Stock Picks 2. Daily Stock Screen 3. Foreign Technical Stock Watch (AUS, HK & FSSTI) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research
2. Daily Note Daily Market Commentary (A Participating Organisation of Bursa Malaysia Securities Bhd) Menara TA One, 22 Jalan P Ramlee, 50250 Kuala Lumpur Tel : 603 - 2072 1277. Fax : 603 - 2032 5048 Friday, 14 July 2017 TA Research e-mail : taresearch@ta.com.my For Internal Circulation Only Review & Outlook KLSE Market Statistics (13.07.2017) Volume (mil) +/-chg (RMmn) Main Market 1,080.0 -11.1 1,858.9 Warrants 123.5 -36.9 13.4 ACE Market 520.9 17.7 144.4 Bond 16.5 -15.2 3.3 ETF 0.6 0.57 0.6 Total 1,741.5 2,020.6 Off Market 72.0 23.9 238.8 Value +/-chg 225.4 -2.8 30.5 -3.5 0.63 144.4 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP July 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 1,753.78 12,496.26 17,162.13 1,760.50 21,553.09 6,274.44 7,413.44 20,099.81 2,409.49 26,346.17 3,235.67 1,579.41 5,830.04 3,218.16 1,888.70 5,736.77 Off Market BIMB MULPHA SMRT-WA SIME EFORCE TAWIN SCOCOM SCOPE DESTINI (mn) 18.7 13.1 11.2 11.0 8.0 2.0 1.7 1.6 1.1 @ @ @ @ @ @ @ @ @ (RM) 4.50 2.00 0.01 9.55 1.03 1.25 2.16 0.23 0.70 Exchange Rate USD/MYR 4.2925 -0.0030 USD/JPY 112.98 -0.5200 EUR/USD 1.139 -0.0065 -3.46 -18.50 -35.07 1.00 Value/ Volume 1.72 0.11 0.28 0.20 1.11 1.16 3.32 Up Down 310 257 70 68 58 38 2 3 1 4 441 370 % chg % YTD chg -0.20 -0.15 -0.20 0.06 6.83 8.98 16.63 7.64 20.95 0.10 13.27 0.21 -3.49 -0.05 1.43 0.01 17.72 0.74 302.53 1.16 26.76 0.83 4.48 0.28 10.91 0.19 20.62 0.64 -0.75 -0.04 62.94 1.11 Top 10 KLCI Movers Mkt Cap. Counter Mkt Cap. (RM’mn) MAYBANK 101,250 PCHEM 49,022 MAXIS 41,661 DIGI 36,776 PETGAS 36,765 IOICORP 32,482 KLK 26,305 TM 24,239 HAPSENG 22,656 HLFG 19,822 9.06 16.56 3.79 5.16 18.90 19.75 12.32 2.36 10.07 3.69 -4.08 1.25 Based on Chg Vol. (RM) (mn) -0.02 13.22 -0.04 5.59 -0.24 7.82 -0.17 10.15 -0.22 1.80 -0.02 1.57 -0.06 0.79 -0.02 1.68 -0.16 0.90 -0.08 0.51 Commodities Futures Palm Oil (RM/mt) 2,540.00 -25.00 Crude Oil ($/Barrel) 46.10 0.64 Gold ($/tr.oz.) 1,216.70 -3.00 Important Dates ORION - 7:2 Rights Issue - RI of up to 465.9m shares together with up to 232.9m free detachable warrants. 7 rights shares together every 2 existing shares held, at an issue price of RM0.17 per rights share, with 1 free warrants for every 2 rights shares subscribed. Application Closed: 19/07/2017. LISTING ON: 02/08/2017. Blue chips led by telcos ended lower Thursday, dampened by weaker profit outlook and persistent profit-taking interest, despite rebound in foreign markets encouraged by the US Fed chief's dovish comments on gradual interest rate hikes. The KLCI ended 3.46 points down at 1,753.78, off an early high of 1,760.66 and low of 1,752.59, but gainers led losers 441 to 370 on steady turnover totaling 1.73bn shares worth RM2.02bn. Given the absence of positive domestic catalyst, weak buying interest and bearish technical momentum, stocks should continue to drift lower ahead of the weekend. Immediate support stays at the 100-day moving average at 1,753, matching yesterday's low, with stronger support at 1,729, a key support level in April, while crucial uptrend support is from the 200-day moving average at 1,705. Immediate resistance for the index stays at the 50-day moving average (1,773), next 1,782, followed by the recent peak of 1,796. Further strength on Genting Bhd shares towards the 76.4%FR (RM9.41) should meet profit-taking resistance, with next hurdle seen from the 100day moving average (RM9.57). Key chart supports are from the 61.8%FR (RM9.04) and 200-day ma (RM8.78). Likewise, Genting Malaysia shares should encounter keen profit-taking interest on any rallies towards the upper Bollinger band (RM5.83) or 76.4%FR (RM5.92), while better chart supports are from the lower band (RM5.47) or 50%FR (RM5.40). News Bites • • • • • • • • • • • • Bank Negara Malaysia maintained the overnight policy rate at 3.00% in anticipation the country will register higher economic growth and moderating inflation. Sunway Berhad has entered into a Sale and Purchase Agreement with a few parties for the acquisition of a freehold land along Jalan Belfied, Kuala Lumpur, measuring approximately 4.53 acres for RM165mn. Australia and New Zealand Banking Group is nearing a deal to sell its 24% stake in AMMB Holdings Bhd to a pension fund, sources familiar with the matter said, in a transaction that could be worth around $900mn. Despite UMW Oil & Gas Corp Bhd's share price having plummeted by some 65% since it announced a massive rights issue back in January 2017, the company is forging ahead with the exercise, says president Rohaizad Darus. Felda Global Ventures Holdings Bhd said two of its directors, Datuk Dr Omar Salim and Datuk Noor Ehsanuddin Mohd Harun Narrashid, will remain on its board despite previously expressing their wish to resign. Mah Sing Group Bhd is offering business grants to eligible franchise and retail owners who buy a property project at any of its six selected projects. Dagang NeXchange Bhd has bagged a nationwide project from Petro Teguh (M) Sdn Bhd for up to 100 portable container systems with total expected value of RM50mn to RM75mn. Yinson Holdings Bhd announced that it has established a USD500mn multi-currency perpetual securities programme whereby proceeds from issuances will be utilised for the group's general corporate purposes. Axiata Group Bhd and iflix have inked a non-binding MoU relating to the expansion of their strategic collaboration to provide entertainment to Axiata's more than 125mn customers in six countries. Damansara Realty Bhd announced that its wholly-owned Metro Parking (M) Sdn Bhd has won a SGD18.1mn contract to operate and manage car parks for the Singapore Sports Council's Sport Centres for five years starting 1 September. Hua Yang Bhd 1QFY18's revenue and profit before tax decreased by 62.5% YoY to RM47.9mn and 91.3% YoY to RM2.8mn due to lesser on-going projects while newly launched projects are still in the early stage of construction. It was below expectations. China's exports rose 11.3% YoY in June, marking the fourth straight month of gains and higher than the forecast 9.0%, thanks to robust external demand for Chinese goods. DISCLAIMER The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD Kaladher Govindan, Head of Research
3. TA Securities Friday , July 14, 2017 FBMKLCI: 1,753.58 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Daily Brief Market View, News In Brief: Corporate, Economy, and Share Buybacks THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TA Research Team Coverage Market View Tel: +603-2072 1277 taresearch@ta.com.my www.taonline.com.my Drift Down on Weak Technical Momentum Blue chips led by telcos ended lower Thursday, dampened by weaker profit outlook and persistent profit-taking interest, despite rebound in foreign markets encouraged by the US Fed chief’s dovish comments on gradual interest rate hikes. The KLCI ended 3.46 points down at 1,753.78, off an early high of 1,760.66 and low of 1,752.59, but gainers led losers 441 to 370 on steady turnover totaling 1.73bn shares worth RM2.02bn. Key Supports at 1,753/1,729 Given the absence of positive domestic catalyst, weak buying interest and bearish technical momentum, stocks should continue to drift lower ahead of the weekend. Immediate support stays at the 100-day moving average at 1,753, matching yesterday’s low, with stronger support at 1,729, a key support level in April, while crucial uptrend support is from the 200day moving average at 1,705. Immediate resistance for the index stays at the 50-day moving average (1,773), next 1,782, followed by the recent peak of 1,796. Take Profit on Genting Bhd & Genting Malaysia Further strength on Genting Bhd shares towards the 76.4%FR (RM9.41) should meet profittaking resistance, with next hurdle seen from the 100-day moving average (RM9.57). Key chart supports are from the 61.8%FR (RM9.04) and 200-day ma (RM8.78). Likewise, Genting Malaysia shares should encounter keen profit-taking interest on any rallies towards the upper Bollinger band (RM5.83) or 76.4%FR (RM5.92), while better chart supports are from the lower band (RM5.47) or 50%FR (RM5.40). Asian Markets Higher after Yellen Comments Asian stock markets traded higher on Thursday as investors digested Federal Reserve Chair Janet Yellen’s comments. Yellen said the U.S economy is healthy enough for the Fed to raise rates and begin winding down its massive bond portfolio, though low inflation may leave the central bank with diminished leeway. The Nikkei ended flat at 20,099.81 as gains in tech shares offset weakness in financial stocks. South Korea's Kospi hit a record high, making gains after the Bank of Korea kept policy rates steady. Kospi ended 0.74 percent higher to close at 2,409.49. In down under, the benchmark ASX200 ended higher by 1.11 percent to close at 5,736.77 led by gains in the health care sub-index. Chinese stocks firmed on Thursday, with the blue-chip index closing at an 18-month high, underpinned by solid trade data. China June trade data came in stronger than expected. Exports and imports rose by 11.3 percent and 17.2 percent. The blue-chip CSI300 index rose 0.77 percent to 3,686.92 points, while the Shanghai Composite Index gained 0.67 percent to 3,219.04 points. Page 1 of 7
4. TA Securities 14-Jul-17 A Member of the TA Group Financials Leads Wall Street Higher U .S stock markets traded higher on Thursday with the Dow hitting another record closing high, buoyed by financial shares. The financial index was the best performer among the 11 major S&P sectors, ending up 0.61 percent ahead of profit reports due Friday. JPMorgan Chase, Wells Fargo and Citigroup are set to report their results. Healthcare index was up 0.09 percent, barely moving on news of U.S Senate Majority Leader Mitch McConnell's unveiling of a revised healthcare bill. Meanwhile, shares of Target climbed 4.8 percent after the company said it expects "modest increase" in second-quarter comparable-store sales. The news boosted other retailers, with Wal-Mart, Costco, Kohl's and Macy's all ending higher. In economic news, the U.S producer price index rose 0.1 percent in June. Weekly jobless claims, meanwhile, came in just above expectations at 247,000. The Dow Jones Industrial Average rose 20.95 points, or 0.10 percent, to 21,553.09, the S&P 500 added 4.58 points to 2,447.83 and the Nasdaq Composite gained 13.27 points, or 0.21 percent, to 6,274.44. Page 2 of 7
5. TA Securities 14-Jul-17 A Member of the TA Group News In Brief Corporate Axiata Group Bhd and iflix , a subscription video on demand service provider, have inked a non-binding memorandum of understanding relating to the expansion of their strategic collaboration to provide entertainment to Axiata’s more than 125mn customers in six countries. (The Star) Australia and New Zealand Banking Group is nearing a deal to sell its 24% stake in AMMB Holdings Bhd to a pension fund, sources familiar with the matter said, in a transaction that could be worth around $900mn. (The Star) Sunway Bhd is acquiring 4.5 acres of freehold prime land in Kuala Lumpur for RM165.0mn from vendors LGT Sdn Bhd, Tan Sri Lim Kok Thay, Puan Sri Datin Seri Lim (Nee Lee) Kim Hua, Yarraville Sdn Bhd, Dandenong Sdn Bhd, and Ripponlea Sdn Bhd. The proposed development on the land will comprise mainly serviced apartments with some lifestyle retail units. The estimated gross development value of the proposed development is RM1.1bn. (Bursa Malaysia) MMC Corporation Bhd (MMC) announced that KOTUG Asia Sdn Bhd (KASB) has ceased to be a 51% subsidiary of Johor Port Bhd (JPB), which in turn is a wholly-owned subsidiary of MMC, following the completion of JPB’s equity interest in KASB for a cash consideration of RM4.1mn. (Bursa Malaysia) Despite UMW Oil & Gas Corp Bhd’s share price having plummeted by some 65% since it announced a massive rights issue back in January 2017, the company is forging ahead with the exercise, says president Rohaizad Darus. (The Star) Felda Global Ventures Holdings Bhd said two of its directors, Datuk Dr Omar Salim and Datuk Noor Ehsanuddin Mohd Harun Narrashid, will remain on its board despite previously expressing their wish to resign. (The Edge) Mah Sing Group Bhd is offering business grants to eligible franchise and retail owners who buy a property project at any of its six selected projects. (The Edge) Atlan Holdings Bhd’s 1QFY17 revenue and profit before tax declined by 6.2% YoY to RM217.3mn and 10.5% YoY to RM23.3mn respectively mainly due to lower demand from customers for certain products as well as the imposition of goods and services tax at the border outlets and duty-free zones with effect from 1 January 2017 coupled with higher management fee incurred. However, the decrease was partially offset by decrease in transportation costs. (Bursa Malaysia) Dagang NeXchange Bhd has bagged a nationwide project from Petro Teguh (M) Sdn Bhd (Petro Teguh) for the design, engineering, procurement, construction, installation, commissioning and maintenance of up to 100 portable container systems for Petro Teguh with total expected value of RM50mn to RM75mn. (Bursa Malaysia) Dagang NeXchange Bhd’s wholly-owned subsidiary Dagang Net Technologies Sdn Bhd has been appointed as the reseller of Financio, a cloud-based accounting software, in Malaysia and Indonesia. Designed for users with little accounting knowledge, DNeX said Dagang Net will target to sell Financio to start-up firms, small business owners and micro small and medium enterprises. (The Edge) Yinson Holdings Bhd announced that it has established a USD500mn multi-currency perpetual securities programme whereby proceeds from issuances will be utilised for the group’s general corporate purposes. (Bursa Malaysia) Page 3 of 7
6. TA Securities 14-Jul-17 A Member of the TA Group Hua Yang Bhd 1QFY18 ’s revenue and profit before tax decreased by 62.5% YoY to RM47.9mn and 91.3% YoY to RM2.8mn due to lesser on-going projects while newly launched projects like Astetica Residence and Meritus Residence are still in the early stage of construction. (Bursa Malaysia) Damansara Realty Bhd announced that its wholly-owned Metro Parking (M) Sdn Bhd has won a SGD18.1mn (approximately RM56.6mn) contract to operate and manage car parks for the Singapore Sports Council’s Sport Centres for five years starting 1 September. (Bursa Malaysia) Page 4 of 7
7. TA Securities 14-Jul-17 A Member of the TA Group News In Brief Economy Asia Bank Negara Malaysia Maintains OPR at 3 %, Says Inflation Moderating Bank Negara Malaysia maintained the overnight policy rate (OPR) at 3.00% in anticipation the country will register higher economic growth and moderating inflation. Bank Negara said at the OPR's current level, the central bank's monetary policy was accommodative and supportive of economic activity. Malaysian economy performed better than expected in the first quarter of 2017 and the growth was lifted by stronger domestic demand, with additional impetus from exports. Overall, the economy is expected to register higher growth in 2017. Headline inflation is expected to moderate in the second half of the year, mainly reflecting the waning effect of global cost factors. Underlying inflation, as measured by core inflation, will be sustained by the more robust domestic demand, but is expected to remain contained. The central bank said the ringgit remained stable due to a more balanced demand and supply of foreign currencies, following implementation of Malaysia's financial market development measures. (The Edge Markets). China’s June Exports Beat Expectations With a 11.3% Rise China’s exports and imports both came in stronger than expected in June, reflecting resilience in the world’s second-largest economy amid Beijing’s effort to reduce debt and boding well for next week’s report on overall growth. China’s exports rose 11.3% in June from a year earlier, marking the fourth straight month of gains, thanks to robust external demand for Chinese goods, the General Administration of Customs said. The increase came in higher that the 8.7% growth in May and a forecast for a 9.0% rise by economists polled by The Wall Street Journal. Imports in June also came in stronger than expected, expanding 17.2% from a year earlier, after a 14.8% increase in May. Economists had forecast a 12.4% gain. China’s trade surplus widened in June to $42.77 billion from $40.81 billion in May, falling short of a median forecast for a $44.2 billion surplus. Continued global economic recovery and improving external demand boosted Chinese exports while imports were buoyed by steady domestic growth and higher commodity prices, China’s customs officials said in a briefing. China’s trade data is closely watched as a barometer of strength in global trade though exports have become a less important factor in China’s own growth in recent years. In Yuan terms, exports increased 17.3% and imports surged 23.1%. (CNBC) Australia Inflation Expectations Rise in July Inflation expectations in Australia increased in July, survey data from the Melbourne Institute showed. The expected inflation rate over the next twelve months rose by 0.8 %age points to 4.4% in July from 3.6% in June. In June, the weighted proportion of respondents expecting the inflation rate to fall within the 0-5 % range decreased by 3.6 %age points to 66.4%. The weighted mean of responses within this range rose by 0.2 %age points to 2.5%. (RTT News) United States Yellen: Premature to Conclude Inflation Trend Is Falling Well Short of Target Federal Reserve Chairwoman Janet Yellen said Thursday a stronger labor market and rising prices of imported goods supported her expectation that a recent downturn in inflation would prove transitory. In raising interest rates last month and penciling in one more increase later this year, Fed officials have so far looked past recent soft inflation readings by pointing to several idiosyncratic price declines, such as for wireless phone plans, which Ms. Yellen again cited on Thursday in testimony to the Senate Banking Committee. But Ms. Yellen cited the inherent uncertainty behind the past three months of muted price pressures. “There may be more going on. We’re watching inflation very carefully in light of low readings,” she said. “I think it’s premature to conclude that the underlying inflation trend is falling well short of 2%. I haven’t reached such a conclusion.” Fed officials next meet July 25-26, and are likely to leave short-term interest rates unchanged. At their meeting last month, officials raised rates for the third time in as many quarters to a range between 1% and 1.25%. Excluding volatile food and energy categories, the Fed’s preferred inflation gauge slowed to a gain of 1.4% over the year ended May, Page 5 of 7
8. TA Securities 14-Jul-17 A Member of the TA Group versus 1 .8% in February. The Fed has fallen short of its 2% inflation target for most of the past five years. (The Wall Street Journal) U.S. Jobless Claims Fell by 3,000 to 247,000 The number of Americans applying for unemployment benefits fell for the first time in a month, bolstering the Federal Reserve’s view that the labor market is firming. Initial jobless claims, a measure of workers laid off across the U.S., dropped by 3,000 to a seasonally adjusted 247,000 in the week ended July 8, the Labor Department said. Economists surveyed by The Wall Street Journal had expected 245,000 new claims. Weekly claims figures are rough estimates and tend to be volatile. A more-reliable measure, the four-week moving average of claims, rose by 2,250 to 245,750. Claims had climbed for three straight weeks before the latest drop. But they have consistently remained near four-decade lows this year, as most employers expand or hold steady rather than cut positions in a stable economy. The economy added 222,000 jobs in June and the unemployment rate stood at 4.4%, near its lowest level in 16 years. With the labor market appearing at or near full employment, markets increasingly expect the Fed to next raise short-term rates again in December. At its meeting last month, the Fed raised short-term interest rates for the third time in as many quarters. Thursday’s report showed the number of continuing unemployment benefit claims—those drawn by workers for more than a week—fell by 20,000 to 1,945,000 in the week ended July 1. Continuing claims are reported with a oneweek lag. (The Wall Street Journal) U.S. Producer Prices Rose Slightly in June A gauge of U.S. business prices ticked up in June, pointing to modest inflation pressures. The producer-price index for final demand, which measures changes in the prices that U.S. companies receive for their goods and services, increased a seasonally adjusted 0.1% in June from a month earlier, the Labor Department said. Economists surveyed by The Wall Street Journal had expected the index to remain flat last month. From a year earlier, prices advanced 2%. The report showed food prices rose 0.6% in June, led by a 5.5% increase in the price of meat. Energy prices fell 0.5%. The index for core prices, which excludes the often-volatile prices for food and energy, grew 0.1% in June, in line with economist expectations. From a year earlier, core prices were up 1.9%. Changes in PPI aren’t necessarily a reflection of what consumers pay, as the inflation gauge looks at prices businesses receive from customers, including consumers, other businesses and governments. But in general, PPI readings follow the same trends as other major inflation gauges. The personal-consumption expenditures price index, the Fed’s preferred inflation gauge, rose 1.4% in May from a year earlier, the Commerce Department previously reported. That was a slowdown from a 2.1% annual increase in February, the first time in five years the index’s annual increase poked above the Fed’s 2% annual inflation target. (The Wall Street Journal) Europe and United Kingdom UK Banks Cautious on Consumer Lending Amid Fears of Slowing Economy The availability of consumer credit in the UK economy tightened in the second quarter and is expected to decline further as banks turn cautious amid a worsening in Britain’s economic outlook, according to the Bank of England. Retail banks and other lenders told the BoE they had cut back on the supply of unsecured lending – which includes credit card loans – in the three months to the end of June. Supply is expected to tighten further this year, according to the BoE’s quarterly credit conditions survey, which said banks’ appetite for risk was being effected by a “changing economic outlook”. The UK economy has been driven by strong consumer spending in the aftermath of the BREXIT vote last year. But growth fell back sharply in the first quarter of 2017 – from 0.7% to 0.2% – raising concerns growth is not sustainable. Higher inflation and weak wage growth have squeezed UK consumers, with average real pay falling by 0.7% in the three months to May. Demand for credit has also boomed as Britons are saving the lowest proportion of their income since at least 1963, according to official data. (Financial Times) Page 6 of 7
9. TA Securities 14-Jul-17 A Member of the TA Group German Inflation Rises as Estimated in June Germany 's consumer price inflation increased as initially estimated in June, latest figures from Destatis showed. The consumer price index rose at a slightly faster pace of 1.6% yearover-year in June, following a 1.5% climb in May. That was in line with the flash data published on June 26. Energy prices remained flat following May's 2% increase. Meanwhile, food inflation rose to 2.8% from 2.4%. On a monthly basis, consumer prices edged up 0.2% in June, reversing a 0.2% drop in the prior month. The latest figures confirmed preliminary data. The harmonized index of consumer prices advanced 1.5% YoY in June, as estimated earlier, after climbing 1.4% in May, MoM the HICP moved up 0.2%. (Alliance News) Share Buy-Back: 13 July 2017 Company Bought Back Price (RM) Hi/Lo (RM) 30,000 181,700 100,000 10,000 320,000 30,000 0.485/0.48 0.41 0.605/0.60 0.24 0.525/0.52 0.96 0.515/0.465 0.41/0.405 0.61/0.60 0.235/0.23 0.53/0.52 0.96/0.955 BSLCORP FITTERS GLBHD GRANFLO SALCON TROP Total Treasury Shares 1,329,113 22,249,500 7,589,800 6,463,800 1,667,762 3,167,942 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. liability for any direct or indirect loss arising from the use of this document. the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 7 of 7 We accept no We, our associates, directors, employees may have an interest in
10. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR UMW Share Price (RM) 13-Jul-17 1.95 2.20 5.68 Target Price BETA (RM) EPS (sen) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 2.37 2.28 5.04 0.94 0.61 1.26 10.3 24.1 19.8 15.8 25.3 30.6 18.9 9.1 28.7 12.3 8.7 18.5 6.0 4.1 2.3 8.1 4.1 3.5 2.44 2.70 6.47 -20.1 -18.5 -12.2 1.88 2.01 4.09 3.7 9.5 38.8 -8.5 2.8 34.5 4.80 3.70 5.70 8.00 17.50 11.00 23.60 5.80 10.00 1.29 0.96 1.33 1.38 0.66 0.96 0.79 1.32 0.69 33.6 29.4 43.9 49.6 105.2 73.4 137.2 50.7 40.3 30.5 33.6 48.4 55.2 115.5 82.9 142.4 54.5 39.0 11.6 8.9 11.5 12.8 15.1 13.1 14.8 10.0 25.5 12.7 7.8 10.5 11.5 13.7 11.6 14.3 9.3 26.3 4.1 3.1 3.5 3.2 2.6 5.2 2.8 2.4 3.3 4.1 3.1 3.6 3.6 2.6 5.2 2.8 2.4 3.3 4.49 3.00 5.70 6.87 16.30 9.68 20.66 5.59 11.14 -13.6 -12.7 -11.1 -7.7 -2.6 -0.7 -1.5 -9.7 -7.7 3.60 2.08 3.90 4.11 12.70 7.50 19.26 4.53 8.20 7.8 26.0 30.0 54.2 25.0 28.1 5.7 11.5 25.4 4.3 9.6 17.6 40.6 17.6 17.2 3.2 7.2 16.2 0.40 1.28 5.40 3.48 0.66 1.15 2.00 1.95 5.88 0.45 1.57 6.00 3.50 0.78 0.58 2.26 1.49 6.26 0.79 0.63 1.05 1.09 1.01 1.27 na 1.09 0.10 5.6 14.6 28.1 15.3 4.9 8.3 12.6 11.9 42.0 5.6 13.5 34.8 20.3 5.7 9.6 12.5 12.0 45.8 7.0 8.8 19.2 22.7 13.2 13.9 15.8 16.3 14.0 7.1 9.5 15.5 17.1 11.5 11.9 15.9 16.3 12.9 0.0 2.2 2.2 2.2 3.8 0.9 2.8 1.5 4.3 0.0 2.2 2.2 2.7 3.8 0.9 2.8 1.5 4.3 0.51 1.37 5.52 3.61 0.74 1.39 2.15 2.48 6.15 -22.5 -6.6 -2.2 -3.6 -10.9 -17.3 -7.0 -21.2 -4.4 0.37 0.89 4.65 3.07 0.37 0.41 1.56 1.48 5.57 6.8 44.6 16.1 13.4 79.5 184.0 28.2 31.7 5.6 -9.2 21.9 13.0 8.7 8.3 100.0 17.6 13.4 0.0 1.98 2.00 0.49 11.0 11.5 18.0 17.2 5.1 5.1 2.19 -9.6 1.93 2.6 -1.5 15.10 18.06 17.84 21.08 0.50 0.59 74.8 93.1 81.3 20.2 101.9 19.4 18.6 17.7 4.9 4.6 5.4 5.1 15.30 19.10 -1.3 -5.4 13.72 15.56 10.1 16.1 8.5 10.3 2.19 7.31 25.36 1.20 83.70 3.63 1.94 4.90 0.90 2.23 8.62 27.41 1.50 88.66 4.10 2.46 4.41 1.23 0.49 0.35 0.32 0.46 0.36 0.48 0.64 0.43 0.56 6.7 26.4 121.1 6.5 290.1 22.3 27.5 15.7 8.1 7.9 40.6 151.0 6.6 327.7 24.7 27.0 16.6 11.6 32.6 27.7 20.9 18.4 28.9 16.3 7.1 31.2 11.1 27.8 18.0 16.8 18.1 25.5 14.7 7.2 29.4 7.8 1.8 1.4 2.8 5.0 3.3 4.1 3.1 0.9 2.8 2.2 2.1 3.0 5.0 3.3 4.7 4.1 1.0 3.9 3.00 8.89 26.52 1.33 85.20 3.66 2.04 5.00 1.07 -27.0 -17.8 -4.4 -9.6 -1.8 -0.8 -4.9 -2.0 -15.9 2.11 7.30 22.44 1.13 74.12 2.26 1.47 4.14 0.78 3.8 0.1 13.0 6.1 12.9 60.6 32.0 18.3 15.4 -14.8 -0.3 8.0 4.3 7.0 42.9 12.1 13.1 13.2 42.80 52.08 1.01 198.6 187.4 21.6 22.8 4.7 4.7 55.64 -23.1 40.61 5.4 -3.1 9.24 5.70 11.51 6.54 1.35 1.29 49.3 25.7 54.7 27.7 18.7 22.2 16.9 20.5 0.5 1.4 0.6 1.6 10.00 6.38 -7.6 -10.7 7.50 4.22 23.2 35.0 16.3 26.1 2.40 0.12 3.34 0.13 0.75 1.25 19.3 0.4 23.2 0.4 12.4 33.1 10.3 33.3 5.8 0.0 6.7 0.0 3.42 0.16 -29.8 -25.0 2.38 0.05 0.8 140.0 -18.9 140.0 5.95 4.25 6.39 4.70 0.77 0.51 9.5 13.3 15.0 16.5 62.4 31.9 39.8 25.8 0.6 1.4 0.6 1.8 6.73 4.37 -11.6 -2.7 5.54 3.85 7.4 10.4 -6.3 1.7 6.94 7.09 1.92 5.66 1.56 6.80 7.60 1.80 6.05 2.20 0.58 0.16 0.33 -0.20 0.29 17.2 35.8 12.3 26.4 3.7 24.4 40.0 15.1 29.8 5.5 40.3 19.8 15.6 21.4 41.8 28.4 17.7 12.7 19.0 28.4 1.1 2.5 1.9 2.3 0.6 1.6 2.8 2.3 2.6 0.9 7.40 7.15 2.38 5.94 2.64 -6.2 -0.8 -19.3 -4.7 -40.9 4.06 5.62 1.88 4.20 1.51 70.9 26.2 2.1 34.8 3.3 43.7 7.6 -9.0 5.8 -33.9 INDUSTRIAL SCIENTX SKPRES 8.65 1.28 9.71 1.80 0.53 0.50 54.5 8.6 66.3 10.6 15.9 14.9 13.0 12.0 2.1 3.3 2.3 4.1 8.99 1.44 -3.8 -11.1 6.01 1.15 43.9 11.3 29.1 -0.8 MEDIA ASTRO MEDIA PRIMA STAR 2.58 0.89 2.37 3.45 0.60 1.40 1.06 0.65 0.64 13.2 1.7 7.1 14.5 2.8 6.5 19.5 52.1 33.4 17.8 31.5 36.5 4.8 1.5 7.6 5.0 2.5 7.6 3.01 1.52 2.67 -14.3 -41.4 -11.2 2.51 0.87 2.19 2.8 2.9 8.2 -0.8 -22.6 5.8 -15.2 -2.0 -32.8 -6.3 -10.5 -10.9 -23.3 -71.2 0.20 6.33 0.78 7.03 0.44 6.43 1.33 0.30 200.0 1.1 0.6 5.3 36.8 8.1 21.1 1.7 129.4 -1.5 -14.8 0.7 33.7 -0.4 -0.6 -65.7 -21.2 1.30 20.0 -8.2 BANKS & FINANCIAL SERVICES AFG 3.88 AFFIN 2.62 AMBANK 5.07 CIMB 6.34 HLBANK 15.88 MAYBANK 9.61 PBBANK 20.36 5.05 RHBBANK BURSA 10.28 CONSTRUCTION BPURI GADANG GAMUDA IJM PESONA SENDAI SUNCON WCT LITRAK Building Materials WTHORSE CONSUMER Brewery CARLSBG HEIM Retail AEON AMWAY F&N HUPSENG NESTLE PADINI POHUAT QL SIGN Tobacco BAT GAMING Casino GENTING GENM NFO BJTOTO LUSTER HEALTHCARE Hospitals IHH KPJ Rubber Gloves HARTA KOSSAN SUPERMX TOPGLOV KAREX OIL & GAS DNEX 0.59 0.76 1.02 3.7 4.6 16.0 12.8 1.7 1.7 0.69 LCTITAN 6.40 7.41 na 60.3 71.5 10.6 9.0 4.1 5.5 6.53 MHB 0.78 0.87 1.83 -1.2 1.3 na 59.5 0.0 0.0 1.16 MISC 7.40 6.85 0.79 56.4 48.9 13.1 15.1 4.1 4.1 7.90 PANTECH 0.60 0.69 1.27 4.1 4.9 14.3 12.1 3.0 3.3 0.67 PCHEM 6.95 7.74 1.06 39.2 40.5 17.7 17.2 3.0 3.2 7.80 SENERGY 1.61 1.71 2.49 6.6 4.0 24.4 40.6 0.6 0.6 2.10 UMWOG 0.30 0.80 2.06 -11.7 -3.5 na na 0.0 0.0 1.04 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.56 1.55 1.48 12.0 12.6 13.0 12.3 0.0 0.0 1.98
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price (RM) PLANTATIONS FGV IJMPLNT IOICORP KLK SIME UMCCA 1.63 2.96 4.51 24.70 9.54 6.47 Target Price BETA (RM) 1.55 3.88 4.15 26.19 10.02 7.52 1.78 0.46 1.07 0.86 1.23 0.43 EPS (sen) PER (X) FY17 FY18 FY17 FY18 4.2 12.3 18.7 111.8 34.0 37.6 8.5 15.7 21.0 119.1 37.5 34.5 38.6 24.1 24.1 22.1 28.0 17.2 19.2 18.8 21.4 20.7 25.4 18.8 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg 3.1 2.4 2.2 2.2 2.6 3.6 3.1 2.7 2.7 2.4 3.2 2.6 2.52 3.70 4.81 25.50 9.70 6.58 -35.3 -20.0 -6.2 -3.1 -1.6 -1.7 1.42 2.96 4.21 22.92 7.42 5.53 PROPERTY GLOMAC 0.64 0.70 0.57 1.6 6.3 39.8 10.1 4.7 4.7 0.83 -23.0 0.63 HUAYANG 1.02 1.07 0.66 17.3 17.4 5.9 5.9 3.9 3.9 1.43 -28.8 1.01 IBRACO 0.79 0.92 0.36 4.9 10.2 16.2 7.7 4.4 5.1 1.05 -24.8 0.77 IOIPG 2.16 2.25 0.86 17.4 17.4 12.4 12.4 3.2 3.5 2.46 -12.2 1.85 MAHSING 1.59 1.76 0.73 14.3 13.5 11.1 11.8 4.1 4.1 1.70 -6.5 1.34 SNTORIA 0.84 0.98 0.27 6.2 10.3 13.5 8.1 1.2 1.2 1.00 -16.5 0.69 SPB 4.88 5.98 0.59 25.6 22.8 12.7 14.3 2.5 2.5 5.19 -6.0 4.32 SPSETIA 3.25 4.10 0.67 27.1 29.5 14.5 13.3 4.3 4.3 4.50 -27.8 2.90 SUNWAY 3.93 4.15 0.47 18.2 18.6 13.1 12.9 3.1 3.1 4.05 -3.0 2.84 Note: SUNWAY proposed bonus issue of shares and warrants. Ex-Target price RM1.69. For more details please refer to 15.06.17 report. REIT SUNREIT 1.69 1.86 0.51 8.9 10.1 19.1 16.7 5.2 6.0 1.84 -8.2 1.63 CMMT 1.57 1.72 0.58 8.1 8.6 19.4 18.2 5.4 5.7 1.72 -8.7 1.45 % Chg YTD 14.8 0.0 7.1 7.8 28.6 17.0 5.2 -12.9 2.5 2.9 17.8 7.8 0.8 1.0 3.3 16.9 18.7 21.0 12.9 12.1 38.3 -8.6 -9.7 -21.0 10.8 11.2 4.4 10.4 3.8 31.0 3.7 8.3 -1.7 2.6 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.04 23.68 18.58 14.18 1.43 1.13 21.47 19.60 17.37 1.90 0.76 0.76 0.77 1.02 0.53 7.1 98.4 88.2 131.9 8.2 6.4 102.3 101.3 130.8 10.7 14.6 24.1 21.1 10.7 17.4 16.2 23.2 18.3 10.8 13.4 6.7 3.1 3.3 3.1 7.0 6.7 3.2 3.8 3.2 7.0 1.80 25.70 22.50 14.90 1.64 -42.2 -7.9 -17.4 -4.8 -12.8 1.01 22.92 18.10 13.00 1.39 3.0 3.3 2.7 9.1 2.9 -24.1 -0.5 -12.8 2.0 -4.0 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 4.63 4.73 5.52 6.45 5.25 4.90 5.70 7.50 1.31 0.93 0.71 0.66 14.6 20.0 24.8 21.4 16.0 20.4 25.0 22.3 31.7 23.6 22.2 30.1 29.0 23.2 22.0 28.9 1.6 4.2 3.6 3.0 1.7 4.3 3.6 3.1 5.99 5.19 6.60 6.90 -22.7 -8.9 -16.4 -6.5 4.11 4.67 5.48 5.81 12.7 1.3 0.7 11.0 -1.9 -2.1 -7.7 8.4 TECHNOLOGY Semiconductor & Electronics IRIS 0.17 INARI 2.40 MPI 13.28 UNISEM 3.58 0.28 2.30 15.60 3.95 1.31 0.80 0.51 0.82 -2.6 10.3 94.2 26.9 -0.3 na 12.4 23.3 112.9 14.1 27.1 13.3 na 19.4 11.8 13.2 0.0 3.3 2.0 3.4 0.0 2.0 2.0 3.4 0.24 2.41 13.58 3.70 -29.2 -0.4 -2.2 -3.2 0.10 1.46 7.20 2.27 70.0 64.2 84.4 57.7 54.5 44.6 79.2 51.7 3.08 8.63 3.34 8.10 1.10 1.44 37.6 17.2 37.1 17.5 8.2 50.1 8.3 49.3 1.3 1.2 1.6 1.2 3.59 9.45 -14.2 -8.7 2.16 5.76 42.6 49.8 34.5 42.4 1.73 3.69 2.05 4.05 0.75 0.67 14.3 17.1 22.7 15.1 12.1 21.5 7.6 24.4 2.5 3.5 4.0 3.1 1.87 4.59 -7.5 -19.6 1.47 3.61 17.7 2.2 8.8 -14.2 TRANSPORTATION Airlines AIRASIA AIRPORT Freight & Tankers TNLOGIS WPRTS SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price (S$) BANKS & FINANCIAL SERVICES DBS 21.03 OCBC 10.91 UOB 23.60 PLANTATIONS WILMAR IFAR 3.28 0.48 Target Price Beta (S$) EPS (cent) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52week 52week FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 23.30 12.00 25.40 1.23 1.14 1.08 173.8 87.7 195.6 190.2 12.1 92.4 12.4 209.3 12.1 11.1 11.8 11.3 2.9 5.7 3.0 2.9 6.7 3.0 21.2 11.0 24.0 -0.7 -0.4 -1.7 14.72 8.84 17.51 42.9 31.9 34.8 21.3 22.3 15.7 3.72 0.53 0.91 1.13 28.9 4.9 31.1 5.2 10.5 9.1 2.4 2.5 2.7 2.7 4.0 0.6 -18.0 -20.2 2.96 0.44 10.8 8.0 -8.6 -9.5 11.3 9.8 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
12. TA Securities RESULTS UPDATE Friday , 14 July 2017 FBMKLCI: 1,753.78 Sector: Property A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 TP: RM1.07 (+5.4%) Hua Yang Berhad Last traded: RM1.02 Weak Start to FY18 Sell THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Thiam Chiann Wen Tel: +603-2167 9615 cwthiam@ta.com.my Review Hua Yang’s 1QFY18 net profit of RM1.7mn came in grossly below expectations. It only accounted for 3% and 2% of ours and consensus forecasts respectively. The variance was largely due to: 1) slower-thanexpected construction progress, and 2) lower-than-expected margin. 1QFY18 net profit plunged 93% YoY to RM1.7mn, underpinned by: 1) 63% drop in revenue, 2) 7.2ppt contraction in gross margin, and 3) higher interest expense from acquisition of Magna Prima Bhd (MPB). The decline in revenue was due to lower sales achieved in FY15-17. Meanwhile, we attribute the weaker margin to less favourable product mix. QoQ, 1QFY18 net profit decreased 82% on the back of 41% drop in revenue. Weak earnings were largely attributed to lower sales achieved in FY15-17 and several on-going projects that are already at the tail end of construction. Gross margin narrowed to 27% from 38% a quarter ago, largely impacted by Hua Yang’s social housing projects in Johor. Hua Yang recorded RM53.2mn sales in 1QFY18 (-2% YoY and -54%QoQ). The weaker sales performance was largely due to absence of new launches amid softer market conditions. Meritus Residensi, Mainland Penang was the key contributor to 1QFY18 sales, which made up about 30% of total property sales during the quarter under review. As a result of lower sales, unbilled sales declined to RM204mn as at Jun-17 from RM214mn a quarter ago. The group’s net gearing ballooned to 0.63x as at end Jun 2017 from 0.39x a quarter ago as it has drawn down new borrowings to fund the acquisition of 20.12% stake in MPB. Impact Earnings unchanged, pending more updates from analyst briefing. Outlook Management targets to deliver RM400mn new sales in FY18, underscored by RM718mn property launched in 4QFY17. In addition, the group will also roll out new properties worth RM322mn at Puchong West and Kota Masai Township in FY18. We expect landed residential properties in Bandar University Seri Iskandar and Meritus Residensi, Mainland Penang to be the key contributors to FY18 sales. Share Information Bloomberg Code Stock Name Stock Code Listing Share Cap (mn) Market Cap (RMmn) Par Value 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) Page 1 of 2 HYB MK HUAYANG 5062 Main Market 352.0 359.0 1.00 1.43/1.01 283.8 58.4 0.7 Heng Holdings - 31.1 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 0.0 0.0 61.4 63.6 73.1 78.6 84.0 80.9 Sell (Under Review) Financial Indicators Net Debt / Equity (%) FCPS (sen) Price / CFPS (x) ROE (%) ROA (%) NTA/Share (RM) Price/NTA (x) FY18 34.2 9.3 10.9 9.9 5.8 1.8 0.6 FY19 29.8 10.6 9.6 9.5 5.8 1.9 0.5 Scorecard vs TA vs Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth % of FY 3 2 Below Below HUAYANG FBM KLCI (4.7) (4.7) (6.4) (24.4) (2.2) 1.3 4.9 6.0 (12-Mth) Share Price relative to the FBM KLCI The group owns 31% substantial interest in MPB with the completion of the acquisition of an additional 20.1% stake in June-17. Management is currently exploring collaboration with Magna Prima to realise the value of MPB’s existing prime assets. Valuation Our target price is currently under review pending management’s guidance on the group’s future plans in an analyst briefing to be held later today. Maintain Sell. www.taonline.com.my Source: Bloomberg
13. TA Securities 14 /07/17 A Member of the TA Group Earnings Summary (RM mn) FYE Mar 31 FY15 Revenue 583.6 EBITDA 155.9 EBITDA margin (%) 26.7 Pretax profit 153.4 Net profit 110.6 Core net profit 110.6 EPS* (sen) 31.4 EPS growth (%) 34.5 PER (x) # 3.2 GDPS* (sen) 9.8 Div yield (%) # 9.6 Core ROE (%) 25.9 *Adjusted for 1:3 bonus issue completed in FY17 # Based on EPS and DPS after * FY16 575.7 147.9 25.7 144.8 110.1 110.1 31.3 (0.4) 3.3 3.8 3.7 21.9 FY17 385.4 83.4 21.6 80.6 60.7 60.7 17.3 (44.8) 5.9 4.0 3.9 10.7 FY18F 325.2 86.6 26.6 82.9 61.4 61.4 17.4 1.0 5.9 4.0 3.9 9.9 FY19F 338.2 90.6 26.8 86.0 63.6 63.6 18.1 3.7 5.6 4.0 3.9 9.5 1QFY18 Results Analysis (RM mn) YE 31 Mar Turnover Gross Profit 1Q17 4Q17 1Q18 QOQ(%) YOY(%) 128.0 43.4 80.7 30.3 47.9 12.8 (40.6) (57.6) (62.5) (70.5) EBIT Net Int Inc/ (exp) Share of associate Pretax Taxation Reported Net Profit Core Net Profit EPS -adj (sen) GDPS -adj (sen) 32.7 (0.4) 0.0 32.2 (8.3) 23.9 23.9 6.8 0.0 13.5 (1.0) 0.0 12.5 (3.0) 9.5 9.5 2.7 2.0 2.9 (0.8) 0.6 2.8 (1.1) 1.7 1.7 0.5 0.0 (78.3) (27.7) nm (77.5) (64.0) (81.9) (81.9) (81.8) (100.0) (91.0) 70.7 nm (91.3) (86.9) (92.8) (92.8) (92.8) 0.0 Gross margin (%) EBIT Margin (%) Pretax Margin (%) Net Margin (%) Effective Tax Rate (%) 33.9 37.5 26.8 (10.7) (7.2) 25.5 16.8 6.1 (10.6) (19.4) 25.2 18.7 25.8 15.5 11.7 24.2 5.9 3.6 38.8 (9.6) (8.1) 14.6 (19.3) (15.1) 13.0 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 or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 2 of 2
14. COMPANY UPDATE TA Securities Friday , 14 July 2017 FBM KLCI: 1,753.78 Sector: Transportation A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 TP: RM8.10 (-6.1%) Malaysia Airports Holdings Berhad Last Traded: RM8.63 2Q17 Expected to Remain Strong SELL THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Tan Kam Meng, CFA Tel: +603-2167 9605 kmtan@ta.com.my Results preview MAHB is scheduled to release its 2Q17 results performance end of this month. Based on the traffic data published (see Figure 1 & 2), we expect 2Q17 core earnings, after removing exceptional items, to come in the range between RM70 and 85mn. This would represent a growth of more than 200% on account for: 1) higher passenger movement (international +14%; domestic +9.7% YoY) in 2Q17, 2) reduction in amortisation cost caused by the extension of operating agreement; and 3) lower interest expense. Passenger movement surged 13.5% in June 2017 MAHB reported that the total passenger movement for June-17 increased by 13.5% YoY (-4.3% MoM) to 7.6mn (see Figure 1) for Malaysia’s traffic. This was led by 17.2% (-3.8% MoM) growth in the international segment (see Figure 4) and 10.0% (-4.8% MoM) growth in the domestic segment (see Figure 5). The strong data for both the international and domestic segments was due to higher travel demand in conjunction with Hari Raya Aidifitri. Figure 1: Malaysia’s passenger movement surged 13.5% in June-17 mn 10.0 20.0% 8.0 15.0% www.taonline.com.my 1 Share Information 9 Bloomberg Code 2 Stock Code Listing Share Cap (mn) Market Cap (RMmn) Par Value 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) Khazanah -36.7 EPF - 10.1 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating 5.0% 4.0 0.0% International Domestic Apr-17 Jan-17 Oct-16 Jul-16 Apr-16 Jan-16 Oct-15 -10.0% Jul-15 - Apr-15 -5.0% Jan-15 2.0 Growth FY17 FY18 0.0 0.0 287.7 293.7 241.2 367.6 119.3 79.9 Sell (Maintained) Financial Indicators 10.0% 6.0 MAHB MK 5014 Main Market 1659.2 14318.9 1.0 9.45/5.76 2998.2 53.2 1.4 Net Gearing (%) CFPs (sen) P/CFPS (x) ROE (%) NTA/Share (RM) Price/NTA (x) FY17 19.0 206.3 4.2 3.3 (4.8) nm FY18 13.2 67.5 12.8 3.3 (4.3) nm Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth MAHB (4.0) 21.5 40.1 37.0 FBM KLCI (2.2) 1.3 4.9 6.0 Source: MAHB & TA Research On a cumulative basis, the 1H17 cumulative growth expanded to 11.3% from 10.8% a month ago. The growth was supported mainly by early Hari Raya effect, which resulted in expansion in traffic movement in both the international (14.5%) and domestic segment (8.1%). ISG reported cumulative growth of 1.7% for 6M17 Istanbul Sabiha Gokcen (ISG) airport recorded a 7.5% (see Figure 2) increase in passenger movement in June-17 with positive growth in both the international (11.3%) and domestic segment (5.8%) (see Figure 6 & 7). This was the fourth positive growth in 2017 signalling a firm recovery in the aftermath of military coup and terrorist attack in Istanbul. Cumulatively, the 1H17 passenger movement recovered further to 1.7% in June from 0.6% a month ago. Page 1 of 4 (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg
15. TA Securities 14-Jul-17 A Member of the TA Group Figure 2 : 7.5% increase in ISG’s passenger traffic in June-17 3500 35% 3000 30% 25% 2500 20% 2000 15% 1500 10% 5% 1000 0% 500 -5% 0 -10% International Domestic Growth Source: MAHB & TA Research 2H17 outlook As ringgit is expected to stabilise at RM4.10-4.20 levels in 2H17 and coupled with start of 29th Sea Games event in Kuala Lumpur in Aug-17, passenger movement is expected to remain robust in 2H17. As far as the tourism tax is concerned, we expect the additional cost of accommodation, which works out to 5-8% of hotel room rate, is bearable. Meanwhile, the sale of minority stake in ISG could serve as a re-rating catalyst on condition of fair pricing and good use of disposal proceeds. We reckon that MAHB could make a special dividend from the disposal proceeds. Recall in 201314, MAHB exercised its rights of first refusal to acquire 80% stake in ISG and LGM in two occasions for EUR209mn and EUR285mn. The acquisitions were largely funded by equity financing. Forecast No change to our FY17-19 earnings projections. We maintain our FY17 passenger growth assumption of 6.7% (management forecast: 6.5%) for Malaysian operations after taking into account the high base effect in 2H16. In contrast, ISG’s traffic movement for 2H17 is expected to grow strongly due to low base effect as 2H16 volume was affected by the terrorist attack and military coup. As such, we also maintain our passenger growth assumption of 7.2% for ISG, in line with management guidance. Valuation We maintain our DCF valuation at RM8.10/share based on discount rate of 11.7%. Since our last upgrade to Buy in Feb-17, MAHB share price has appreciated 40.8%, which we believe has fully priced in those near-term earnings drivers. As such, we reiterate our Sell recommendation on MAHB. Page 2 of 4 FCFE valuation Rf Rm Beta CAPM PV of future FCFE - Perpectual Sukuk Share outstanding (mn share) FCFE/share 3% 9% 1.443 11.7% 14440.1 1000.0 1659.19 8.10
16. TA Securities 14-Jul-17 A Member of the TA Group Figure 3 : Quarterly performance of passenger traffic 2Q16 1Q17 Malaysia (mn passengers) International 10.1 11.7 --> Asean 5.1 5.6 2Q17 QoQ (%) YoY (%) 1H16 1H17 YoY (%) 11.9 2.1 14.0 20.6 23.6 14.5 5.8 3.9 13.0 10.3 11.4 10.7 --> Non-Asean 5.0 6.1 6.1 0.5 14.9 10.3 12.2 18.3 Domestic 10.8 11.6 11.8 1.9 9.7 21.6 23.3 8.1 2.1 4.5 2.5 5.3 19.8 18.9 16.5 17.0 4.5 9.7 4.7 9.8 3.5 0.9 Istanbul (mn passengers) International 2.3 Domestic 5.1 Figure 4: Malaysia Int. traffic surged 17.2% in Jun-17 mn 4.5 Pass. Movement (LHS) YoY Growth (RHS) Figure 5: Malaysia Dom. Traffic surged 10.0% in Jun-17 25.0% 20.0% 4.0 mn 5.0 Pass. Movement (LHS) YoY growth (RHS) 30.0% 4.5 15.0% 3.5 10.0% 4.0 5.0% 3.5 0.0% 3.0 -5.0% 2.5 -10.0% 40.0% 20.0% 10.0% 0.0% 3.0 -10.0% 2.5 -20.0% Source: MAHB & TA Research 30% 1500 20% 1000 10% 500 0% -10% Source: MAHB & TA Research Page 3 of 4 Apr-17 0 Jan-15 0 40% 2000 Jan-17 200 YoY growth (RHS) Oct-16 400 Pass. Movement (LHS) Jul-16 600 '000 2500 Apr-16 800 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Jan-16 1000 YoY growth (RHS) Oct-15 Pass. Movement (LHS) Figure 7: ISG’s Dom. segment declined 5.8% in Jun-17 Jul-15 '000 1200 Apr-15 Figure 6: ISG’s Int. segment surged 11.3% in Jun-17
17. TA Securities 14-Jul-17 A Member of the TA Group Income Statement (RM'mn) FYE 31 Dec 2015 2016 2017F 2018F 2019F Revenue 3870.2 4172.8 4369.6 4611.8 4924.4 EBITDA 1656.6 1709.9 1905.6 1915.9 1952.8 Dep. & Amort. (901.7) (852.5) (885.5) (924.6) (969.5) EBIT 754.9 857.4 1020.1 991.3 983.3 Net Financing Cost (741.9) (689.8) (669.6) (669.6) (658.0) Associate & JV 10.4 15.7 18.4 20.2 22.2 EI 22.5 (28.6) 0.0 0.0 0.0 PBT 23.5 211.9 368.9 341.9 347.6 Tax (5.8) (110.2) (81.1) (48.2) (49.0) PAT 40.9 70.4 287.7 293.7 298.6 Core Net Profit 18.5 99.0 287.7 293.7 298.6 Balance Sheet (RM'mn) FYE 31 Dec PPE Intangibles Others Non-current Assets 2015 364.1 17,842.4 1,208.8 19,415.3 2016 381.7 17,231.0 1,086.1 18,698.8 2017F 2018F 2019F 389.7 396.8 403.2 16,759.3 16,249.7 15,696.1 1,101.0 1,117.5 1,135.8 18,250.0 17,763.9 17,235.1 Inventories Trade Recb. Others Cash Current Assets 117.6 1,140.9 31.7 1,286.7 2,577.0 135.2 871.6 11.1 1,571.9 2,589.8 179.6 957.7 11.1 3,899.7 5,048.1 189.5 985.5 11.1 4,396.8 5,583.0 202.4 1,065.8 11.1 4,580.8 5,860.2 Core EPS (sen) EPS growth (%) PE (x) GDPS (sen) Dividend yield (%) (0.6) (106.6) (1482.9) 8.5 1.0 1.3 (327.1) 652.9 10.0 1.2 13.8 943.4 62.6 10.0 1.2 14.1 2.0 61.3 10.0 1.2 14.3 1.4 60.5 12.0 1.4 Total Assets 21,992.3 21,288.6 23,298.1 23,347.0 23,095.2 Cash Flow (RM'mn) FYE 31 Dec PBT Dep. & Amort. Changes in WC Others CFO 2015 2016 45.9 183.3 902.3 852.5 (1576.7) 200.2 1306.4 534.8 677.9 1770.9 2017F 368.9 885.5 2080.6 237.7 3572.7 2018F 341.9 924.6 128.1 348.3 1743.0 2019F 347.6 969.5 121.0 208.7 1646.7 Share Capital Share Premium Others Retained Earnings MI Total Equity 1,659.2 3,455.1 1,277.5 2,449.5 (0.8) 8,840.6 1,659.2 3,455.1 1,259.3 2,321.2 2.0 8,696.9 1,669.2 3,455.1 1,259.3 2,442.0 2.0 8,827.7 1,679.2 3,455.1 1,259.3 2,567.8 2.0 8,963.5 1,689.2 3,455.1 1,259.3 2,663.6 2.0 9,069.3 Borrowings Other Non-current Liabilities 5,500.0 5,427.7 10,927.7 5,386.1 5,439.8 10,825.9 5,386.1 5,439.8 10,825.9 5,386.1 5,439.8 10,825.9 4,386.1 5,439.8 9,825.9 Capex Others CFI (50.0) (1166.2) (1216.2) (430.5) 136.6 (293.9) (418.4) 0.0 (418.4) (418.4) 0.0 (418.4) (418.4) 0.0 (418.4) Borrowings T. Payables and other Current Liabilites 398.3 1,825.7 2,224.0 193.6 1,572.1 1,765.8 193.6 3,450.9 3,644.5 193.6 3,363.9 3,557.6 1,000.0 3,200.0 4,200.0 Total Liabilities 13,151.7 12,591.7 14,470.4 14,383.5 14,025.9 Dividend Equity raised Net Borrowing Others CFF (116.8) (141.0) 1306.0 0.0 (426.7) 0.0 (1077.8) (1074.3) (315.3) (1215.3) (166.9) 10.0 0.0 (669.6) (826.5) (167.9) (202.7) 10.0 10.0 0.0 (193.6) (669.6) (658.0) (827.5) (1044.3) NTA/share (RM) P/NTA (x) EV/EBITDAR (x) (5.4) nm 11.4 (5.1) nm 10.7 (4.8) nm 8.4 (4.3) nm 8.2 (3.9) nm 7.9 Change in Cash FCFE FCF/share (RM) (853.6) (1360.8) (0.8) 2327.9 2835.5 1.7 Key Assumptions FYE 31 Dec 2015 Total Passenger Growth (mn) 83.8 Aircraft move't ('000) 815.3 Eraman Sales/ pax (RM) 11.7 Total rental- KLIA & KLIA 2 226.9 261.7 354.2 0.2 2016 88.8 811.6 12.4 239.5 2017F 94.8 879.7 13.2 255.3 497.1 928.1 0.6 184.0 777.0 0.5 2018F 99.1 906.1 14.0 272.1 2019F 104.1 933.3 14.4 284.3 Ratios FYE 31 Dec Profitability EBITDA margin (%) Core profit margin (%) ROE (%) ROA (%) 2015 2016 2017F 2018F 2019F 42.8 0.5 0.2 0.1 41.0 2.4 1.1 0.5 43.6 6.6 3.3 1.3 41.5 6.4 3.3 1.3 39.7 6.1 3.3 1.3 Liquidity Current Ratio (x) Quick Ratio (x) 1.2 1.1 1.5 1.4 1.4 1.3 1.6 1.5 1.4 1.3 Leverage Net gearing (x) Interest Coverage (x) Interest Coverage (x) 0.5 2.2 2.2 0.5 2.5 2.5 0.2 2.8 2.6 0.1 2.9 2.6 0.1 3.0 2.6 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 or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 4 of 4
18. TA Securities ECONOMIC REPORT A Member of the TA Group Friday , July 14, 2017 FBMKLCI: 1,753.78 MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Malaysian Economy Bank Negara Holds Fire, OPR Keeps at 3.00% THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Tel: +603-2617 9608 Tel: +603-2167 9220 TA Research Team Coverage shazma@ta.com.my farid@ta.com.my Review • The Decision. At yesterday’s Monetary Policy Committee (MPC) meeting, Bank Negara Malaysia (BNM) decided to maintain the Overnight Policy Rate (OPR) at 3.00%. The decision was within consensus as well as ours estimate. There is no change in the Statutory Reserve Requirement (SRR) – kept at 3.50%. Figure 1: OPR vs. SRR Rate (January 2008 - July 2017) OPR SRR 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 Jan-17 Apr-16 Jul-15 Oct-14 Jan-14 Apr-13 Jul-12 Jan-11 Oct-11 Jul-09 Apr-10 Jan-08 Oct-08 Jul-06 Apr-07 Jan-05 Oct-05 0.00 Source: Bloomberg, TA Securities • Bullish Global Growth Prospect. The BNM noted that the global economy continues to improve while industrial activity and global trade are performing better than expectation with more synchronized growth across countries. In the advanced economies, the broadbased increase in investment amid the steady growth in consumption is raising growth prospects. The global economy is expected to grow by 3.5% this year, according to the latest IMF report. However, downside risks remain arising from political and policy uncertainties in the major economies, geopolitical and financial market developments, and volatility of commodity prices. • A Firmer Footing for Malaysia. In Asia, growth is expected to be driven by domestic activity and stronger external demand. This include Malaysia, with overall economy remained firm with a better-than expected result in the first quarter while inflation remained above its last year average. The more favorable global growth prospects will lead to sustained export performance and generate positive spillovers to the domestic economy. We predict real GDP to continue performing well in the second quarter onwards. Indeed, a string of economic indicators released recently was largely above expectation. IPI grew by 4.6% YoY in July 2017, while exports posted a robust growth of 32.5% YoY. Growth will also be supported by healthy private consumption, improvement in exports, private investment, as well as strong manufacturing and services sectors. (TA GDP Forecast for 2017: +5.1% YoY) • Inflation to moderate in 2H17. BNM also noted that headline inflation is expected to moderate in the 2H17 mainly reflecting the waning effect of global cost factors and volatile commodity prices. Malaysia’s CPI grew by 4.2% YoY in 5M17 and is expected to subside further to 3.5% in the second half of the year, in our view. Although the pressures is expected to subside, the trend of domestic headline inflation will be dependent on future global oil Page 1 of 3 www.taonline.com.my
19. TA Securities 14-Jul-17 A Member of the TA Group prices which remain highly uncertain . Meanwhile, underlying inflation, as measured by core inflation, will be sustained by the more robust domestic demand but is expected to remain contained. • OPR to increase? There will be three more meetings left with the next MPC meeting is on 7 September 2017. Although we believe that BNM may hold the rate at 3.00% level, we do not rule out the possibility of the central bank hiking the OPR by 25bps to 3.25%. This is especially, if robust economic performance continues following better performance in domestic activities and trade, challenged by higher inflation as well as volatile capital flows amid an on-going US Fed tightening cycle. Note that, we are in the negative real interest since early of this year. The last OPR hike was in July 2014, where Bank Negara raised OPR by 25 bps to 3.25% after experiencing 7 months of negative real interest rate. Still, we expect the central bank is going to go with the growth mandate rather than focus on inflationary pressure in making its decision on the key rate. • Ringgit to improve in a 1-2 years’ time. Meanwhile, the central bank acknowledged the domestic financial markets have been resilient. The ringgit has remained stable with a more balanced demand and supply of foreign currencies following the implementation of the two financial market development measures. Positive news flows to date has influenced our Ringgit firmer, making it as the best major Asian currencies in 2Q17. The tightening path of US monetary policy is not expected to pin down Ringgit as it will be on a slow and steady basis. We maintain our Ringgit forecast to be average at 4.25 against the greenback and expecting it to continue rally next year. Source: Bloomberg, TA Securities Source: Bloomberg, TA Securities Figure 4: Selected Asian Currencies Against the US Dollar (%) 2016 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 1H17 Malaysian Ringgit (MYR) -4.32 10.08 -3.27 -2.52 -7.81 1.37 3.08 4.49 Japanese Yen (JPY) 3.06 7.15 9.28 1.65 -13.41 4.47 -0.18 4.29 Singapore Dollar (SGD) -2.14 4.97 0.06 -1.41 -5.5 3.36 1.47 4.89 Indonesian Rupiah (IDR) 2.34 3.98 0.3 1.29 -3.13 1.10 -0.02 1.09 Thai Baht (THB) 0.79 2.55 0.13 1.34 -3.15 4.17 1.19 5.42 Korean Won (KRW) -2.93 2.53 -0.72 4.59 -8.82 8.00 -2.24 5.58 Philippine Peso (PHP) -5.15 2.39 -2.16 -2.92 -2.47 -0.94 -0.53 -1.46 Taiwan Dollar (TWD) 2.1 1.58 -0.15 2.93 -2.77 6.35 -0.34 5.99 Chinese Yuan (CNY) -6.5 0.62 -2.92 -0.36 -3.93 0.84 1.57 2.42 Hong Kong Dollar (HKD) -0.04 -0.05 -0.07 0.08 0 -0.21 -0.45 -0.66 Indian Rupee (INR) -2.61 -0.14 -1.89 1.37 -1.93 4.74 0.42 5.18 Source: Bloomberg, TA Securities Page 2 of 3 Jul-17 Mar-17 May-17 Jan-17 Nov-16 Sep-16 Jul-16 May-16 Mar-16 Jan-16 Sep-15 Nov-15 Jul-15 Jan-15 Jul-17 Mar-16 Mar-17 3.4 May-17 3.4 Jan-17 3.6 Nov-16 3.6 Jul-16 3.8 Sep-16 3.8 May-16 4.0 Jan-16 4.0 Sep-15 4.2 Nov-15 4.2 Jul-15 4.4 May-15 4.4 Jan-15 % 4.6 Mar-15 Ringgit 4.6 May-15 Figure 3: MGS 10-Year Yield (January 2015 – July 2017) Mar-15 Figure 2: Ringgit vs. USD (January 2016 – July 2017)
20. TA Securities 14-Jul-17 A Member of the TA Group Figure 5 : Schedule of MPC Meetings vs. FOMC meeting in 2017 No MPC Meeting FOMC Meeting 1 19-Jan-17 31 Jan - 1 Feb 17 2 2-Mar-17 14-15* Mar 17 3 12-May-17 2-3 May 17 4 13-Jul-17 13-14* Jun 17 5 7-Sep-17 25-26 Jul 17 6 9-Nov-17 19-20* Jul 17 7 31 Oct - 1 Nov 17 8 12-13* Dec 17 * Meeting associated with a Summary of Economic Projections and a press conference Source: BNM, Federal Reserves, TA Securities d o m e s Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 3 of 3