Bursa Malaysia Daily Market Report - 14 June

Transcription

1. Wednesday , 14 June, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED REPORTS’ News 1. Daily Market Commentary 2. Daily Brief Fundamental Reports 1. Bermaz Auto Berhad: End to a Weak Year 2. IOI Properties Group Bhd: Forming JV to Develop Land in Singapore 3. KPJ Healthcare Berhad: Acquiring Office Premise to Expand KPJ Perdana’s Bed Capacity 4. Plantation Sector: Strong CPO Exports in May 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 Wednesday, 14 June 2017 For Internal Circulation Only KLSE Market Statistics (13.06.2017) (mil) Main Market 1,349.9 Warrants 209.1 ACE Market 475.8 Bond 18.6 ETF 0.0 Total 2,053.4 Off Market 234.1 Volume +/-chg (RMmn) 97.2 2,426.9 -21.5 21.1 75.9 114.0 -13.0 7.4 0.04 0.1 2,569.4 231.6 301.1 Value +/-chg 361.1 -8.6 3.0 -7.2 0.04 288.5 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP June Futures Other Markets DOW JONES NASDAQ (US) FTSE (UK) NIKKEI (JAPAN) KOSPI (KOREA) HANG SENG (HK) FSSTI (S'PORE) SET (BANGKOK) JCI (JAKARTA) SHANGHAI SHENZHEN AUSTRALIA (mn) 90.1 47.1 27.0 15.0 11.0 10.7 10.5 6.0 4.7 4.0 2.5 2.0 1.0 Up Down 265 355 55 130 27 63 2 6 0 3 349 557 % chg % YTD chg 1,784.44 12,730.29 17,502.61 1,789.00 -4.45 -34.40 -28.90 -5.00 -0.25 -0.27 -0.16 -0.28 8.69 11.02 18.94 9.39 21,328.47 6,220.37 7,500.44 19,898.75 2,374.70 25,852.10 3,257.52 1,572.36 5,707.65 3,153.74 1,859.88 5,772.77 92.80 44.90 -11.43 -9.83 16.83 144.06 9.18 8.55 16.21 13.87 23.12 94.96 0.44 0.73 -0.15 -0.05 0.71 0.56 0.28 0.55 0.28 0.44 1.26 1.67 7.92 15.55 5.01 4.10 17.18 17.51 13.08 1.91 7.76 1.61 -5.55 1.89 Top 10 KLCI Movers Based on Mkt Cap. Off Market KRONO YONGTAI-PA PTRANS SIME BIMB SGB-PA SOP SGB-PA FIBON CAREPLS CAMRES TAWIN YINSON Value/ Volume 1.80 0.10 0.24 0.40 1.21 1.25 1.29 @ @ @ @ @ @ @ @ @ @ @ @ @ (RM) 0.48 0.90 0.29 9.59 0.45 0.15 3.55 0.66 0.65 0.40 0.20 1.23 3.26 Exchange Rate USD/MYR 4.2620 -0.0030 USD/JPY 110.11 0.1500 EUR/USD 1.121 -0.0010 Counter TENAGA CIMB IHH MAXIS DIGI PETGAS GENTING MISC GENM IOICORP Mkt Cap. (RM’mn) 81,377 59,834 49,418 46,114 38,486 37,913 36,450 32,586 31,913 28,403 Chg Vol. (RM) (mn) -0.02 15.42 -0.02 45.23 -0.08 3.81 -0.05 2.84 -0.04 2.36 -0.04 1.05 -0.11 5.86 -0.13 2.53 -0.07 9.05 -0.02 6.29 TA Research e-mail : taresearch@ta.com.my Review & Outlook The local stock market eased lower Tuesday, as investors took profits following a correction on US technology shares overnight and ahead of a key interest rate decision by the US central bank tonight. The KLCI slipped 4.45 points to close at 1,784.44, off an early high of 1,793.01 and near session low of 1,784.31, as losers beat gainers 557 to 349 on cautious trade totaling 2.05bn shares worth RM2.57bn. Stocks are likely to remain in profit-taking mode as investors refrain from commitments due to caution ahead of the US Federal Reserve's decision on raising interest rates tonight. Immediate uptrend supports for the index stays at 1,779 and 1,774, the rising 10 and 30-day moving average levels followed by better support from the 50-day moving average level at 1,762. Immediate upside hurdles are from the 1,800 psychological level and 18 May 2015 high of 1,823. With Gadang shares still in base building mode, downside risk is capped by the lower Bollinger band (RM1.25) and 76.4%FR (RM1.22), while a confirmed breakout above the 25/10/16 peak (RM1.35) will aim for the 123.6%FP (RM1.48) ahead. WCT Holdings should rebuild support above the 100-day ma (RM1.99), while convincing strength above the 123.6%FP (RM2.18) should target the 138.2%FP (RM2.30), 150%FP (RM2.41) and 161.8%FP (RM2.51) going forward. • • • • • • • • • • • • Commodities Futures Palm Oil (RM/mt) 2,393.00 -27.00 Crude Oil ($/Barrel) 45.95 -0.05 Gold ($/tr.oz.) 1,268.50 0.60 Important Dates ANZ O - 6:4 Rights Issue - RI of up to 655.2m shares together with up ANZO to 327.6m free warrants 6 rights shares together with 3 free warrants for every 4 existing shares held, at an issue price of RM0.20 per rights share. Application Closed: 09/06/2017. LISTING ON: 23/06/2017. • • • • News Bites MPOB's May 2017 palm oil stockpiles declined by 2.6% MoM to 1.56mn tonnes after two-consecutive months of increase, which came in below market expectations mainly due to higher-than-expected exports and lower import. IOI Properties Group and Jardine Matheson Group's unit, Hong Kong Land have entered into a MOA to jointly develop and manage a land of about 2.7-acre in Central Boulevard, Marina Bay, Singapore. KPJ Healthcare Berhad announced that its 60.6% owned subsidiary, Perdana Specialist Hospital Sdn Bhd has proposed to acquire an office premise adjacent to KPJ Perdana, Kota bahru measuring 938 square metres for RM6.8mn. The board of Felda Global Ventures Holdings Bhd has issued and served the show-cause letters to its president cum chief executive officer Datuk Zakaria Arshad and chief financial officer Ahmad Tifli Mohd Talha in relations to the long outstanding debt of Safitex Trading LLC. PRG Holdings Bhd has entered into a MoU with SPNB Aspirasi Sdn Bhd and Mimbar Nusantara Holdings Sdn Bhd to explore potential joint venture opportunities on developing affordable housing projects nationwide, with combined gross development value of RM5bn. Vivocom International Holdings Bhd has bagged a RM195.23mn contract from SBA Property Management Sdn Bhd to construct and complete the construction of 4 blocks of 1.2k units of condominiums for 1Malaysia Civil Servants' Housing Programme in Manjung, Perak. Barakah Offshore Petroleum Bhd has received the letter of award from Asean Bintulu Fertilizer Sdn Bhd for rejuvenation of Urea Ship Loading Facilities Project at Bintulu, Sarawak. The value of the contract based on its work scope is estimated at RM35mn. SP Setia Bhd, which is preparing to launch its latest two projects in Melbourne, Australia this year, is looking to acquire more land in Australia for future developments according to its president and CEO Datuk Khor Chap Jen. Alliance Financial Group Holdings Bhd is targeting a modest growth for its loans segment for FY18 due to inefficiency arises from several loan portfolios in accordance to its group chief executive officer, Joel Kornreich. Pentamaster Corporation Bhd has the intention to pursue a separate listing of its automated solution business on the Main Board of Hong Kong Stock Exchange. Kronologi Asia Bhd's controlling shareholder and co-founder Piti Pramotedham sold 90.13mn of shares (33.34% stake) to the company's acting group chief executive officer Teo Chong Meng Philip Dominic and executive director Tan Jeck Min for RM43.26mn. The Kuala Lumpur High Court is expected to reach a verdict by today on the injunction to restrain Stone Master Corporation Bhd's largest shareholder to remove management through an extraordinary general meeting held on May 29 this year. Retail-centric Hektar Real Estate Investment Trust is actively looking to acquire more assets with good yields, especially outside of Klang Valley. Bermaz Auto Bhd registered 4QFY17 core net profit of RM22.2mn (QoQ: -11.5%, YoY: -57.0%). FY17 core net profit declined by 39.8% YoY to RM119.1mn. This was within ours but below streets' estimates. V.S. Industry Bhd's net profit rose by 2.6 times to RM50.5mn in 3QFY17 from RM19.31mn a year ago due to higher sales orders from its clients in Malaysia, Indonesia, and China. U.S. producer prices were unchanged in May as energy costs recorded their biggest decline in more than a year, suggesting inflation pressures were easing after rising at the start of the year. 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 Wednesday , June 14, 2017 FBMKLCI: 1,784.44 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 Profit-Taking Mode to Prevail Ahead of US Rate Decision The local stock market eased lower Tuesday, as investors took profits following a correction on US technology shares overnight and ahead of a key interest rate decision by the US central bank tonight. The KLCI slipped 4.45 points to close at 1,784.44, off an early high of 1,793.01 and near session low of 1,784.31, as losers beat gainers 557 to 349 on cautious trade totaling 2.05bn shares worth RM2.57bn. Immediate Uptrend Supports at 1,779/1,774 Stocks are likely to remain in profit-taking mode as investors refrain from commitments due to caution ahead of the US Federal Reserve’s decision on raising interest rates tonight. Immediate uptrend supports for the index stays at 1,779 and 1,774, the rising 10 and 30-day moving average levels followed by better support from the 50-day moving average level at 1,762. Immediate upside hurdles are from the 1,800 psychological level and 18 May 2015 high of 1,823. Buy Weakness in Gadang & WCT Holdings With Gadang shares still in base building mode, downside risk is capped by the lower Bollinger band (RM1.25) and 76.4%FR (RM1.22), while a confirmed breakout above the 25/10/16 peak (RM1.35) will aim for the 123.6%FP (RM1.48) ahead. WCT Holdings should rebuild support above the 100-day ma (RM1.99), while convincing strength above the 123.6%FP (RM2.18) should target the 138.2%FP (RM2.30), 150%FP (RM2.41) and 161.8%FP (RM2.51) going forward. Asian Markets Shake off U.S Tech Slump Asian stock markets traded mostly higher as the shock from a slide in U.S. technology shares began to ease. Overall, movements were limited ahead of the Federal Reserve's two-day policy meeting that ends on Wednesday, at which the central bank is expected to raise interest rates. Investors will focus on any fresh hints on the pace of further tightening and any details of the central bank's plans to trim its balance sheet. The Bank of Japan, which is also meeting this week, is expected to keep its monetary policy unchanged. The Nikkei shares average fell 0.05 percent to 19,898.75 following weak cues overnight from Wall Street and a stronger yen. South Korea’s Kospi gained 0.71 percent to close at 2,374.70 aided by a sharp reversal in technology firms such as LG Display which rose 7.74 percent. In down under, the benchmark ASX200 ended higher by 1.67 percent to close at 5,772.80 driven by broad-based strength, with the financials sub-index leading gains. Strong gains in small-cap shares led China stocks higher on Tuesday. The blue-chip CSI300 index rose 0.22 percent to 3,582.27 points, while the Shanghai Composite Index gained 0.44 percent to 3,153.74 points. Page 1 of 7
4. TA Securities 14-Jun-17 A Member of the TA Group Wall Street Higher as Tech Stocks Rebound U .S stock markets traded higher on Tuesday, with The Dow and S&P 500 setting record closing highs as technology stocks rallied after two days of steep losses and financials gained ahead of a widely expected interest rate rise from the Federal Reserve. Big tech names such as Facebook rose 1.51 percent, while Microsoft added 1.25 percent. Financials, which tend to benefit when rates are rising, also climbed after the U.S. Treasury Department announced a plan to upend the country's financial regulatory framework, which would grant many items on Wall Street's wish list. Energy companies joined the gains as the price of oil reversed an early loss. U.S. crude futures rose 38 cents to settle at $46.46 a barrel. The Dow Jones Industrial Average rose 92.8 points, or 0.44 percent, to 21,328.47, the S&P 500 gained 10.96 points, or 0.45 percent, to 2,440.35 and the Nasdaq Composite rose 44.90 points, or 0.73 percent, to 6,220.37. Page 2 of 7
5. TA Securities 14-Jun-17 A Member of the TA Group News In Brief Corporate The board of Felda Global Ventures Holdings Bhd has issued and served the show-cause letters to its president cum chief executive officer Datuk Zakaria Arshad and chief financial officer Ahmad Tifli Mohd Talha in relations to the long outstanding debt of Safitex Trading LLC . with Delima Oil Products Sdn. Bhd. They both have been given 7 days from today to provide a written reply pertaining to the allegations. (Bursa Malaysia) PRG Holdings Bhd has entered into a memorandum of understanding with SPNB Aspirasi Sdn Bhd and Mimbar Nusantara Holdings Sdn Bhd to explore potential joint venture opportunities on developing affordable housing projects nationwide, with combined gross development value of RM5bn. (Bursa Malaysia) Vivocom International Holdings Bhd has bagged a RM195.23mn contract from SBA Property Management Sdn Bhd to construct and complete the construction of 4 blocks of 1.2k units of condominiums for 1Malaysia Civil Servants' Housing Programme in Manjung, Perak. This project will commence upon site possession and shall be completed within 42 months from the date of commencement. (Bursa Malaysia/The Edge) Barakah Offshore Petroleum Bhd has received the letter of award from Asean Bintulu Fertilizer Sdn Bhd for rejuvenation of Urea Ship Loading Facilities Project at Bintulu, Sarawak. The value of the contract based on its work scope is estimated at RM35mn and is expected to complete at the end of year 2019. (Bursa Malaysia) Anzo Holdings Bhd has received the letter of award from related party KL Northgate Sdn Bhd for the appointment as a main contractor for the work of revitalization of Hot Spring, Batu Caves in Selangor for the sum of RM10.17mn. The project is expected to complete in 1QFY19. (Bursa Malaysia) KPJ Healthcare Bhd’s 60.56%-owned subsidiary Perdana Specialist Hospital Sdn Bhd (PSHSB) is acquiring 938 square metre office premises in Kota Bharu, Kelantan for a cash consideration of RM6.8mn. The acquisition shall enable PSHSB to expand and complement the business operation of KPJ Perdana Specialist Hospital as the premises sit on a land adjacent to the hospital. The proposed acquisition will be funded through a combination of bank borrowing and internally generated funds. (Bursa Malaysia) BIMB Holdings Bhd has promoted Bank Islam Bhd deputy chief executive officer Khairul Kamarudin to chief executive officer for a period of 3 years with effect from 14 June 2017. He will take over from Datuk Seri Zukri Samat, 59, who retired as managing director of Bank Islam on last Friday. (Bursa Malaysia/The Edge) S P Setia Bhd, which is preparing to launch its latest two projects in Melbourne, Australia this year, is looking to acquire more land in Australia for future developments according to its president and CEO Datuk Khor Chap Jen. Meanwhile, the group has appointed Shangri-La as the official hotel operator for its landmark luxury development in Melbourne’s central business district. (The Edge) Alliance Financial Group Holdings Bhd is targeting a modest growth for its loans segment for FY18 due to inefficiency arises from several loan portfolios in accordance to its group chief executive officer, Joel Kornreich. (Bernama) Pentamaster Corporation Bhd has the intention to pursue a separate listing of its automated solution business on the Main Board of Hong Kong Stock Exchange. The details of the proposed listing have yet to be determined. The expected benefits from the proposed listing are to unlock shareholders’ value in the automated solution business as well as gaining wider recognition, greater efficiency, and greater access to the fund-raising platform. (Bursa Malaysia) Page 3 of 7
6. TA Securities 14-Jun-17 A Member of the TA Group Pasukhas Group Bhd (PGB) has entered into an Approval Letter with PT. Bangun Daya Perkasa (PTBDP) in expressing PGB’s interest in acquiring a 92.5% stake of PTBDP’s shares in PT Tenaga Listrik Gorontalo(PTTLG), a subsidiary company of PTBDP. PTTLG is a private limited company incorporated in Indonesia and its principal activity is generating power supply. (Bursa Malaysia) Bermaz Auto Bhd’s net profit declined 57% to RM22.21mn on 4QFY17, from RM51.62mn a year ago, due to lower revenue and compressed profit margin, as the ringgit continued to weaken against the yen. The contraction in profit margin was also partly caused by the sales incentive which were given to Mazda CX-5 run-out programme. Revenue dropped 33.8% to RM354.03mn in 4QFY17, from RM534.71mn in 4QFY16 largely due to intense competition and lower sales volume. Net profit for the full year was down by 39.8% to RM119.05mn from RM197.63mn and revenue fell 20.8% to RM1.66bn from RM2.1bn mainly due to lower sales volume from both the domestic and Philippine operations. The board has recommended a fourth interim dividend of 3.15sen single-tier dividend per share. (Bursa Malaysia/The Edge) V.S. Industry Bhd’s net profit rose by 2.6 times to RM50.5mn in 3QFY17 from RM19.31mn a year ago due to higher sales orders from its clients in Malaysia, Indonesia, and China. Revenue climbed 68.2% to RM854.11mn in 3QFY17, from RM507.84mn in 3QFY16. For the cumulative nine months (9MFY17), the group recorded an 11.7% increase in net profit to RM119.51mn, from RM106.98mn in 9MFY16, while revenue rose 41.7% to RM2.3bn from RM1.62bn. It declared a third interim dividend of 1.5sen per share. (Bursa Malaysia/The Edge) Kimlun Corp Bhd is expecting a flattish performance in terms of its revenue and profit for FY17 due to the substantial completion of some larger size construction projects in FY17, as well as the tunnel link segment supply and segmental box girders for the Klang Valley Mass Rapid Transit system line 2 project, which is expected to only pick up in the later part of FY17 in accordance to its chief executive officer Sim Tian Liang. (The Edge) Kronologi Asia Bhd’s controlling shareholder and co-founder Piti Pramotedham sold 90.13mn of shares which is equivalent to 33.34% stake to the company’s acting group chief executive officer Teo Chong Meng Philip Dominic and executive director Tan Jeck Min for RM43.26mn. (The Edge) The Kuala Lumpur High Court is expected to reach a verdict by today on the injunction to restrain Stone Master Corporation Bhd’s largest shareholder to remove management through an extraordinary general meeting held on May 29 this year. (The Edge) Retail-centric Hektar Real Estate Investment Trust is actively looking to acquire more assets with good yields, especially outside of Klang Valley, to bolster its financial performance according to chief executive officer Datuk Hisham Othman. (The Edge) Page 4 of 7
7. TA Securities 14-Jun-17 A Member of the TA Group News In Brief Economy Asia Mustapa : Malaysia Committed to Increasing Investments in Indonesia Malaysia is committed to increasing investments in Indonesia, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed. He said that in this regard both countries will come up with proposals to boost trade, including potential ventures in new areas of collaboration such as the digital economy and micro, small and medium enterprises (MSMEs). These proposals will be further deliberated at the upcoming Third Joint Investment and Trade Committee Meeting scheduled for July 10-13 in Kuching, Sarawak. Mustapa concluded a working visit to Indonesia from June 11-13, and the highlight was a roundtable session attended by 80 business leaders, comprising 40 from each country. The session was also attended by representatives of the Malaysia-Indonesia Business Council and Khazanah Nasional, along with their Indonesian counterparts, which reflected the interest in investing in the country. "During my courtesy call on Indonesian President Joko Widodo, I relayed the interest of Malaysian companies to continue investing in Indonesia's infrastructure development. “Indonesia's US$1 trillion economy with a 250 million population and growing middle class has a lot of potential, which once fully tapped, will contribute significantly towards creating a more prosperous ASEAN,” he said. In 2016, Prime Minister Datuk Seri Najib Tun Razak said he wants to double trade with Indonesia to US$30 billion in the coming years. Malaysia-Indonesia total trade stood at US$13.8 billion in 2016. On the investment front, from 2008-2016, Malaysia invested about US$15 billion in Indonesia. Indonesian investments in Malaysia stood at about US$2.6 billion. (The Star) Najib: Malaysia Needs to Identify Areas of Specialisation Prime Minister Datuk Seri Najib Tun Razak said Malaysia needs to identify areas of specialisation to remain competitive globally, specifically by 2050. He said the challenge still faced by Malaysia in the effort to transform the economy is to drive growth based on productivity, move industry to value-added activities and seize opportunities based on the Industrial Revolution 4.0. "The National Transformation 2050 (TN 50) is the country's longterm aspiration and I want to see Malaysia among the world's top 20 countries by 2050. "In this regard, we need to put down the goal or short and medium-term aspiration towards achieving it. “We need a foundation for the future that is in line with the country's development plan. I hope the gross domestic product (GDP) target can reach RM2 trillion by 2025,” he added. Najib, who is also the Finance Minister, said this at a roundtable session on current issues with small medium enterprises and techno entrepreneurs and associations at the Perdana Putra Building in Putrajaya on Tuesday. Also present was SME Corp Malaysia chief executive officer Datuk Dr Habsah Hashim and SME Association of Malaysia president Michael Kang Hua Keong. The dialogue session also discussed issues related to the economy and to obtain feedback on the TN50. Najib said Malaysian SMEs played a major role as agents of the economy and in supporting the country’s economic growth. (The Star) Japan's Business Sentiment Weakens in Q2 Japanese large industries' business sentiment deteriorated in the second quarter, the quarterly survey by the Ministry of Finance and the Cabinet Office showed. The Business Survey Index, or BSI, fell to -2 in the second quarter from 1.3 in the previous period. The index is forecast to rise to 7.1 points next quarter before falling to 6.7 points in the fourth quarter. The index for large manufacturers declined to -2.9 in the second quarter from 1.1 in the first quarter, data showed. The survey was conducted among 13,050 business enterprises on May 15. (RTT News) Australia Business Confidence Weakens in May: NAB Business confidence in Australia weakened notably in May, while business conditions eased marginally, the latest survey figures from National Australia Bank showed. The business confidence index fell to 7.0 in May from 13.0 in April, which was the highest score since 2010. At the same time, business conditions remained at an elevated level in May, though the corresponding index dropped slightly to 12.0 from 13.0 in April. The slight decline in Page 5 of 7
8. TA Securities 14-Jun-17 A Member of the TA Group the conditions index was mainly driven by construction , finance, property and business services. Alan Oster, chief economist at NAB said the business sector is looking quite upbeat, maintaining the apparent disconnect with a rather melancholy household sector. (The Star) United States Producer Prices Unchanged as Energy Costs Drop U.S. producer prices were unchanged in May as energy costs recorded their biggest decline in more than a year, suggesting inflation pressures were easing after rising at the start of the year. Signs of abating inflation came as Federal Reserve officials prepared to gather for a two-day policy meeting on Tuesday. The U.S. central bank is expected to raise interest rates at the end of the meeting on Wednesday, but weakening inflation could limit the scope for further monetary policy tightening this year. The Labor Department said last month's unchanged reading in its producer price index for final demand followed a 0.5% jump in April. In the 12 months through May the PPI increased 2.4%, retreating from April's 2.5% surge, which was the biggest yearly increase since February 2012. Last month's inflation readings were broadly in line with economists' expectations. Prices of U.S. government debt fell after the data. U.S. stock index futures were slightly stronger while the dollar .DXY was weaker against a basket of currencies. The Fed has a 2% inflation target and tracks a measure that is currently at 1.5%. The central bank raised its benchmark overnight interest rate by 25 basis points in March. The dollar's fading rally and rising oil prices boosted producer prices at the start of the year. But oil prices have retreated in recent weeks, putting a lid on producer inflation. Energy prices fell 3.0% last month, the biggest drop since February 2016, after rising 0.8% in April. The cost of gasoline declined 11.2% in May, which was also the largest drop since February of last year. As a result of weak energy prices, the cost of goods fell 0.5%, reversing April's 0.5% increase. (CNBC) Europe and United Kingdom U.K. Inflation Rate Rises More Than Forecast to Four-Year High U.K. inflation resumed its upward march last month, accelerating more than forecast to the fastest pace in four years. An increase in prices for computer games, laptops and package holidays -- partly reflecting the impact of the weaker pound -- lifted the inflation rate to 2.9%, the highest since June 2013. Economists had forecast that it would remain at 2.7%. Core inflation, which excludes food and energy, also unexpectedly quickened in May, according to the Office for National Statistics. It reached 2.6%, the highest since November 2012. The price pickup means additional pressures on households, who aren’t seeing their wages keep pace. Bank of England Governor Mark Carney expects inflation to keep accelerating this year before falling back slightly from 2018. The BOE targets a 2% rate. Faster inflation is already weighing on the economy. Growth slowed to 0.2% in the first quarter, partly because of weaker consumer spending, and the National Institute of Economic and Social Research estimates it hasn’t picked up so far this quarter. Consumers may further retrench after this month’s snap election saw Prime Minister Theresa May lose her parliamentary majority, adding to uncertainty surrounding Brexit negotiations. That prompted investors to pare bets on a BOE interest-rate increase by the end of 2018 to 36% from 52% before the vote. While inflation has climbed from just 0.3% a year ago, there are signs that some of the import-cost pressures are easing after the pound stabilized earlier this year. The annual increase in factory input prices slowed to 11.6% in May, the weakest since September, and the ONS said it’s “continuing its decline from 19.9% in January 2017 following the recent strength of sterling.” Output-price inflation held steady at 3.6%. (Bloomberg) German ZEW Economic Confidence at 3-Month Low German economic confidence weakened unexpectedly to a 3-month low in June, but financial market experts' assessment about the current situation improved notably, a closely watched survey showed. The ZEW Indicator of Economic Sentiment dropped to 18.6 in June from 20.6 in May, according to survey data from the Mannheim-based Centre for European Economic Research/ZEW. The indicator remained below the long-term average of 23.9 points and economists' forecast of 21.7. On the other hand, the current conditions index rose more-than-expected to 88.0 from 83.9 a month ago. This was the highest level Page 6 of 7
9. TA Securities 14-Jun-17 A Member of the TA Group since July 2011 . The expected reading was 85.4. Nearly 71 percent of the financial market experts expect the current situation to remain as favorable as it is at the moment, and 23.9 percent even expect it to improve in the coming six month, he added. The fact that the ZEW index remains in positive territory means that the majority of investors still see "economic conditions" improving in the next six months. However, the economist said it is unclear whether this means that they expect growth to gain pace or simply to remain positive. But the message is a broadly encouraging one. The finance ministry said the German economy continues its upturn in the second quarter. The ministry noted that both private as well as government spending picks up noticeably. The economic confidence index for the euro area climbed 2.6 points to 37.7. Likewise, the current conditions index rose 2.2 points to 20.5. (RTT News) Share Buy-Back: 13 June 2017 Company GRANFLO TEXCHEM Bought Back Price (RM) Hi/Lo (RM) 10,000 1,100 0.23 1.43 0.23/0.225 1.43/1.40 Total Treasury Shares 6,238,800 2,575,400 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. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 7 of 7 We accept no
10. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR UMW Share Price (RM) 13-Jun-17 2.02 2.25 5.99 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 5.41 0.98 0.60 1.26 10.3 24.1 19.7 15.8 25.3 29.8 19.5 9.4 30.5 12.8 8.9 20.1 5.8 4.0 2.2 7.8 4.0 3.2 2.44 2.70 7.00 -17.2 -16.7 -14.4 1.95 1.95 4.43 3.6 15.4 35.2 -5.2 5.1 31.1 4.60 3.50 5.30 7.00 15.90 9.90 22.10 5.20 10.00 1.28 0.95 1.33 1.37 0.67 0.96 0.79 1.34 0.70 33.6 29.4 43.9 49.6 101.6 73.3 136.6 50.6 40.3 30.4 33.1 48.3 54.8 110.2 82.3 140.4 54.0 39.0 11.9 9.1 11.4 13.3 15.0 13.1 14.9 10.1 26.0 13.1 8.1 10.4 12.1 13.9 11.6 14.5 9.5 26.8 4.0 3.0 3.5 3.1 2.7 5.2 2.7 2.3 3.2 4.0 3.0 3.6 3.4 2.7 5.2 2.8 2.3 3.2 4.49 3.00 5.70 6.87 15.60 9.68 20.58 5.59 11.14 -11.4 -11.0 -12.3 -3.8 -2.1 -1.1 -1.0 -8.4 -5.9 3.60 2.08 3.90 4.11 12.70 7.50 19.00 4.53 8.20 10.6 28.4 28.2 60.7 20.3 27.6 7.3 13.0 27.8 7.0 11.7 16.0 46.6 13.2 16.7 3.3 8.7 18.4 0.42 1.30 5.38 3.46 0.67 1.09 1.99 2.12 5.88 0.46 1.62 5.49 3.50 0.78 0.58 2.26 1.49 6.26 0.80 0.62 1.07 1.10 1.05 1.29 na 1.05 0.08 5.7 14.6 31.6 15.3 4.9 8.3 12.6 11.9 42.0 5.7 13.5 36.4 20.3 5.7 9.6 12.5 12.0 45.8 7.4 8.9 17.0 22.6 13.4 13.1 15.7 17.8 14.0 7.3 9.6 14.8 17.0 11.6 11.3 15.9 17.7 12.9 0.0 2.2 2.2 2.2 3.8 0.9 2.8 1.4 4.3 0.0 2.2 2.2 2.7 3.8 0.9 2.8 1.4 4.3 0.51 1.35 5.48 3.61 0.74 1.10 2.15 2.48 6.15 -17.6 -3.8 -1.8 -4.2 -9.5 -0.9 -7.4 -14.3 -4.4 0.36 0.80 4.65 3.07 0.33 0.41 1.49 1.46 5.50 16.7 63.3 15.7 12.7 101.5 169.1 33.6 45.1 6.9 -3.4 23.8 12.6 8.1 9.9 89.6 17.1 23.3 0.0 2.01 2.00 0.47 11.0 11.5 18.3 17.5 5.0 5.0 2.19 -8.2 1.93 4.1 0.0 14.80 18.84 17.84 21.08 0.50 0.57 74.8 93.1 81.3 19.8 101.9 20.2 18.2 18.5 5.0 4.4 5.5 4.9 15.30 19.10 -3.3 -1.4 12.90 14.86 14.7 26.8 6.3 15.0 2.23 7.43 24.90 1.24 82.60 3.54 1.89 4.84 0.94 2.23 8.62 27.41 1.39 88.66 4.10 2.51 4.41 1.36 0.50 0.35 0.34 0.46 0.36 0.50 0.66 0.43 0.56 6.7 26.4 120.5 6.1 293.5 22.3 25.1 15.7 9.3 7.9 30.5 148.1 6.2 326.2 24.7 25.3 16.6 12.7 33.2 28.2 20.7 20.4 28.1 15.9 7.5 30.8 10.2 28.3 24.4 16.8 19.9 25.3 14.3 7.5 29.1 7.4 1.8 4.0 2.8 4.8 3.3 4.2 4.2 0.9 5.3 2.1 4.7 3.0 4.8 3.4 4.8 4.2 1.0 5.3 3.00 8.89 27.00 1.35 83.68 3.66 2.04 5.00 1.07 -25.7 -16.4 -7.8 -8.0 -1.3 -3.1 -7.4 -3.2 -12.1 2.11 7.30 22.44 1.13 74.12 2.12 1.43 4.14 0.78 5.7 1.8 11.0 9.6 11.4 66.9 32.2 16.8 20.5 -13.2 1.4 6.0 7.7 5.6 39.4 9.2 11.7 18.2 45.56 52.08 1.05 198.6 187.4 22.9 24.3 4.4 4.4 55.64 -18.1 40.61 12.2 3.1 9.65 5.63 11.53 6.58 1.34 1.28 49.3 25.7 55.5 27.9 19.6 21.9 17.4 20.2 0.5 1.4 0.6 1.6 10.00 6.38 -3.5 -11.8 7.50 4.19 28.7 34.3 21.5 24.6 2.54 0.12 3.81 0.13 0.74 1.26 22.1 0.4 24.6 0.4 11.5 33.1 10.3 33.2 6.3 0.0 7.5 0.0 3.42 0.16 -25.7 -25.0 2.48 0.05 2.4 140.0 -14.2 140.0 6.00 4.17 6.65 4.70 0.78 0.52 10.3 13.3 16.4 16.5 58.2 31.3 36.6 25.3 0.6 1.5 0.7 1.8 6.73 4.37 -10.8 -4.6 5.54 3.85 8.3 8.3 -5.5 -0.2 6.95 6.50 2.03 5.82 1.79 6.05 7.70 1.80 5.75 2.40 0.62 0.16 0.33 -0.20 0.28 20.0 35.8 12.3 26.6 3.7 24.2 40.5 15.3 30.2 6.1 34.7 18.1 16.4 21.9 48.0 28.7 16.1 13.3 19.2 29.6 1.3 2.8 1.8 2.3 0.5 1.6 3.1 2.2 2.6 0.8 7.12 7.07 2.38 5.94 2.64 -2.4 -8.1 -14.7 -2.0 -32.2 4.05 5.62 1.88 4.20 1.65 71.6 15.7 8.0 38.6 8.5 43.9 -1.4 -3.8 8.8 -24.2 INDUSTRIAL SCIENTX SKPRES 8.38 1.34 9.69 1.90 0.55 0.50 54.4 8.6 66.4 11.4 15.4 15.6 12.6 11.8 2.5 3.1 2.9 4.1 8.99 1.44 -6.8 -6.9 5.96 1.12 40.6 19.6 25.1 3.9 MEDIA ASTRO MEDIA PRIMA STAR 2.55 0.97 2.22 3.20 0.60 1.40 1.03 0.65 0.64 13.2 1.7 7.1 14.5 2.8 6.5 19.3 56.8 31.3 17.6 34.3 34.2 4.9 1.4 8.1 5.1 2.3 8.1 3.01 1.52 2.70 -15.3 -36.2 -17.8 2.51 0.97 2.20 1.6 0.5 0.9 -1.9 -15.7 -0.9 0.19 0.84 7.03 0.44 6.16 1.29 0.51 207.9 1.2 3.8 41.4 16.9 47.3 2.0 129.4 -7.1 -0.7 38.2 3.2 17.3 -40.6 1.30 33.8 2.4 BANKS & FINANCIAL SERVICES AFG 3.98 AFFIN 2.67 AMBANK 5.00 CIMB 6.61 HLBANK 15.28 MAYBANK 9.57 PBBANK 20.38 5.12 RHBBANK BURSA 10.48 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 0.70 1.03 3.5 4.3 16.8 13.7 1.7 1.7 0.69 -15.2 MHB 0.85 0.95 1.84 -1.2 1.3 na 64.9 0.0 0.0 1.18 -28.0 MISC 7.30 7.65 0.82 61.4 54.7 11.9 13.4 4.1 4.1 7.90 -7.6 PANTECH 0.62 0.69 1.28 4.1 5.0 14.8 12.3 2.9 3.2 0.67 -7.5 PCHEM 7.20 7.91 1.07 39.2 41.6 18.4 17.3 2.9 3.1 7.80 -7.7 SENERGY 1.90 2.02 2.46 9.6 7.2 19.7 26.3 0.5 0.5 2.10 -9.5 UMWOG 0.52 0.80 2.01 -12.0 -3.6 na na 0.0 0.0 1.04 -50.0 Note: UMWOG proposed 14 for 5 rights issue shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.74 1.55 1.40 12.0 12.9 14.5 13.5 0.0 0.0 2.00 -13.0
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price (RM) PLANTATIONS FGV IJMPLNT IOICORP KLK SIME UMCCA 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 1.73 3.12 4.52 24.76 9.61 6.08 1.55 3.88 4.15 26.19 10.02 7.52 1.76 0.46 1.09 0.87 1.23 0.47 4.2 12.3 18.7 111.8 34.0 32.7 8.5 15.7 21.0 119.1 37.5 34.5 41.0 25.4 24.2 22.2 28.2 18.6 20.3 19.8 21.5 20.8 25.6 17.6 2.9 2.2 2.2 2.2 2.6 2.8 2.9 2.6 2.7 2.4 3.2 2.8 2.52 3.70 4.81 25.50 9.66 6.51 -31.3 -15.7 -6.0 -2.9 -0.5 -6.6 1.42 3.00 4.21 22.72 7.30 5.53 21.8 4.0 7.4 9.0 31.6 9.9 11.6 -8.2 2.7 3.2 18.6 1.3 0.69 1.06 0.89 2.10 1.55 0.89 4.94 3.83 3.61 0.69 1.07 0.92 2.25 1.70 0.98 5.98 4.10 3.81 0.59 0.65 0.34 0.89 0.72 0.29 0.59 0.66 0.45 3.4 17.3 4.9 17.4 14.4 6.2 25.6 27.2 18.4 7.0 17.4 10.2 17.4 14.2 10.3 22.8 29.1 18.7 19.9 6.1 18.1 12.1 10.7 14.4 15.0 13.3 13.3 9.8 6.1 8.7 12.0 10.9 8.6 16.8 12.4 13.0 5.8 3.8 4.0 3.3 4.2 1.1 3.7 3.3 8.3 5.8 3.3 4.5 3.6 4.2 1.1 3.7 3.3 8.4 0.83 1.43 1.05 2.46 1.70 1.00 5.19 4.50 3.68 -17.0 -26.0 -15.7 -14.6 -8.8 -11.0 -4.8 -14.9 -1.9 0.67 1.05 0.79 1.85 1.34 0.69 4.32 2.80 2.84 3.0 1.0 12.7 13.7 15.7 29.0 14.3 36.8 27.0 -1.4 -6.2 -11.5 7.7 8.4 11.3 11.7 22.4 20.3 1.75 1.55 1.86 1.72 0.51 0.56 8.9 8.1 10.1 8.6 19.7 19.2 17.3 18.0 5.1 5.4 5.8 5.8 1.84 1.72 -4.9 -9.9 1.60 1.45 9.4 6.9 1.7 1.3 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.15 24.18 19.16 14.38 1.46 1.23 21.47 19.60 17.37 1.90 0.72 0.76 0.77 1.01 0.57 7.1 98.4 88.2 131.9 8.2 6.4 102.3 101.3 130.8 10.7 16.2 24.6 21.7 10.9 17.8 17.9 23.6 18.9 11.0 13.7 6.1 3.0 3.2 3.0 6.8 6.1 3.1 3.7 3.2 6.8 1.80 25.70 22.66 14.90 1.64 -36.1 -5.9 -15.4 -3.5 -11.0 1.13 22.92 18.10 13.00 1.38 1.8 5.5 5.9 10.6 5.8 -16.1 1.6 -10.0 3.5 -2.0 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 4.98 4.95 6.14 6.55 5.50 4.95 6.10 7.50 1.29 0.94 0.69 0.68 15.0 20.8 25.1 21.4 16.7 21.1 25.4 22.3 33.1 23.7 24.5 30.5 29.9 23.5 24.1 29.4 1.5 4.2 3.3 2.9 1.7 4.3 3.3 3.1 5.99 5.19 6.60 6.90 -16.9 -4.6 -7.0 -5.1 4.11 4.51 5.50 5.81 21.2 9.8 11.6 12.7 5.5 2.5 2.7 10.1 TECHNOLOGY Semiconductor & Electronics IRIS 0.15 INARI 2.05 MPI 12.92 UNISEM 3.53 0.28 2.40 15.90 4.10 1.34 0.80 0.51 0.81 -2.6 10.3 94.2 26.9 -0.3 na 12.6 19.9 115.7 13.7 29.1 13.1 na 16.3 11.2 12.1 0.0 3.9 2.1 3.4 0.0 2.4 2.1 3.4 0.24 2.23 13.50 3.70 -37.5 -8.1 -4.3 -4.6 0.10 1.41 7.02 2.27 50.0 45.7 84.0 55.5 36.4 23.5 74.4 49.6 3.30 9.03 3.23 8.10 1.12 1.48 37.6 17.2 35.9 17.5 8.8 52.4 9.2 51.6 1.2 1.1 1.5 1.1 3.59 9.45 -8.1 -4.4 2.16 5.76 52.8 56.8 44.1 49.0 1.81 3.85 2.05 4.05 0.74 0.67 14.3 17.1 22.7 15.1 12.6 22.5 8.0 25.5 2.4 3.3 3.9 2.9 1.87 4.59 -3.2 -16.1 1.26 3.62 43.7 6.4 13.8 -10.5 PROPERTY GLOMAC HUAYANG IBRACO IOIPG MAHSING SNTORIA SPB SPSETIA SUNWAY REIT SUNREIT CMMT TRANSPORTATION Airlines AIRASIA AIRPORT Freight & Tankers TNLOGIS WPRTS SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price (S$) BANKS & FINANCIAL SERVICES DBS 20.78 OCBC 10.74 UOB 23.63 PLANTATIONS WILMAR IFAR 3.51 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 1.22 1.13 1.08 173.8 87.7 195.6 190.2 12.0 92.4 12.2 209.3 12.1 10.9 11.6 11.3 2.9 5.7 3.0 2.9 6.7 3.0 21.2 10.8 24.0 -1.9 -0.2 -1.6 14.72 8.84 17.41 41.2 30.7 35.7 19.8 20.4 15.8 3.72 0.53 0.92 1.13 28.9 4.9 31.1 5.2 11.3 9.2 2.3 2.5 2.6 2.7 4.0 0.6 -12.3 -19.3 2.96 0.44 18.6 9.1 -2.2 -8.6 12.1 9.9 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. RESULTS UPDATE TA Securities Wednesday , June 14, 2017 FBM KLCI: 1,784.44 Sector: Automotive A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Bermaz Auto Berhad TP: RM2.37(+17.3%) Last Traded: RM2.02 End to a Weak Year BUY THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Abel Goon Tel: +603-2072 1277 ext.1641 abelgoon@ta.com.my Review Bermaz Auto Bhd (BAuto) registered 4QFY17 core net profit of RM22.2mn (QoQ: -11.5%, YoY: -57.0%). FY17 core net profit declined by 39.8% YoY to RM119.1mn. This was within ours but below streets’ estimates, accounting for 96% and 86% of full-year forecasts respectively. We note that EBIT margins were lower at 7.8% compared to previous quarter at 11.7%. Management attributes this to the Mazda CX-5 run-out programme, as sales incentives were given to dealers in anticipation of the all-new Mazda CX-5. To recap, the new CX-5 will be launched in 2QFY18 and is expected to boost sales volumes significantly. Revenue in FY17 was down 20.8% YoY, which is in-line with the decline in sales volume by 26.1% YoY. The lower sales volume was expected given the prevailing weak sales trend in the automotive sector. Besides that, we note that Mazda does not offer cash rebates to consumers. This strategy likely cost BAuto some market share as its competitors are offering very attractive cash rebates. However, we believe in the long-run it will be a positive for BAuto as it retains brand value. There was a large uptick in associates contribution in 4QFY17 (QoQ: >+100%, YoY: +22.8%) which was partly offset by higher interest costs from recent take-up of short-term borrowings. This is likely due to an increase in production in preparation for the export market. We expect associates contribution from Mazda Malaysia and Inokom to improve dramatically as Mazda Malaysia begins its export activities in July 2017. BAuto declared fourth interim dividend of 3.15 sen for 4QFY17, which brings full year dividend to 11.65 sen, and implies payout ratio of 112% for the full year. We believe BAuto will continue to pay out good dividends given low capex requirements. s www.taonline.com.my Share Information Bloomberg Code BAUTO MK Stock Code 5248 Listing Main Market Share Cap (mn) 1152.2 Market Cap (RMmn) 2327.5 Par Value 0.50 52-wk Hi/Lo (RM) 2.44/1.95 12-mth Avg Daily Vol ('000 shrs) 1852 Estimated Free Float (%) 55.1 Beta 1.0 Major Shareholders (%) Dynamic Mile. - 15.1 EPF - 12.5 PNB - 9.5 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 0.5 0.7 182.4 205.5 192.6 221.0 95 93 Buy (Maintain) Financial Indicators FY18 Net Cash 20.3 9.9 12.5 0.4 4.7 FY19 Net Cash 16.7 12.1 17.2 0.4 4.5 vs TA vs Consensus % of FY 96 86 Within Below Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth BAUTO (6.5) (1.0) (0.5) (9.9) FBM KLCI 0.5 3.6 8.6 9.7 Net Debt / Equity (%) CFPS (sen) Price / CFPS (x) ROA (%) NTA/Share (RM) Price/NTA (x) Scorecard Impact After accounting for full year results, our earnings are increased by 0.5%/0.7% for FY18/19. We also introduce FY20 earnings of RM219.6mn, which implies core net profit growth of 6.3%. Outlook We expect FY18 to be a significantly better year for BAuto with total sales volume growth of 20%. This is underpinned by the new CX-5 and CX-9 CKD launches, and growth in the Philippines market. On the other hand, the persistently high JPY/MYR rate will continue to weigh on BAuto’s input costs, and hence impact earnings negatively. Going forward, we expect BAuto to continue paying out generous dividends given subdued capex requirements, and large cash pile of circa RM200mn. Furthermore, we expect a special dividend arising from the listing of the Philippines division which is expected to be completed in 2HFY18. (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg Page 1 of 2
13. TA Securities 14-Jun-17 A Member of the TA Group Valuation After the earnings revision , we tweak our TP slightly upwards to RM2.37 based on unchanged 14x CY18 PER, and maintain our Buy recommendation on BAuto. Our recommendation is supported by BAuto’s handsome dividend yield of 7.8%-9.4% for FY18-20. Furthermore, we believe there may be upside upon successful listing of its Philippines arm. Quarterly Results Analysis FYE April Revenue EBIT Net Int Inc EI Associates Pretax Taxation MI Net Profit Core net profit 4QFY17 354.0 27.5 (0.4) 0.0 5.6 32.6 (7.0) (3.4) 22.2 22.2 Core EPS DPS (sen) (sen) EBIT Margin Pretax Margin Net Margin Tax Rate (%) (%) (%) (%) Sales Volume (unit) 3QFY17 338.7 39.5 (0.6) 0.0 0.1 39.0 (10.5) (3.3) 25.1 25.1 1.9 3.2 2.2 2.8 7.8 9.2 6.3 21.4 11.7 11.5 7.4 27.1 3,212 2,932 QoQ (%) 4.5 (30.4) 33.7 n.m. >100 (16.2) (33.7) 3.5 (11.5) (11.5) 4QFY16 534.7 70.0 1.5 0.0 1.8 73.3 (17.5) (4.2) 51.6 51.6 (11.9) 14.5 YoY (%) (33.8) (60.7) n.m. n.m. >100 (55.5) (60.0) (17.4) (57.0) (57.0) 4.5 10.0 FY17 1,659.5 161.8 0.8 0.0 14.0 176.6 (43.1) (14.4) 119.1 119.1 (57.2) (68.5) 13.1 13.7 9.7 23.9 9.5 4,627 (30.6) FY16 2,095.4 262.1 4.7 0.0 11.4 278.3 (67.9) (12.7) 197.6 197.6 10.4 11.7 17.3 16.9 9.7 10.6 7.2 24.4 12.5 13.3 9.4 24.4 14,736 19,936 YoY (%) (20.8) (38.3) (83.9) n.m. 22.8 (36.5) (36.5) 13.2 (39.8) (39.8) (40.1) (31.1) (26.1) Earnings Summary FYE April (RM mn) Revenue EBITDA EBITDA margin Pretax Profit Reported Net Profit Core Net Profit Core EPS Core EPS growth (sen) (%) Core PER DPS Dividend Yield (x) (sen) (%) (%) 2016 2,095.4 267.8 12.8 278.3 197.6 197.6 17.3 (6.9) 2017 1,659.5 167.9 10.1 176.6 119.1 119.1 10.4 (40.1) 11.7 16.9 8.4 19.5 11.7 5.8 2018E 2,143.2 246.9 11.5 270.5 182.4 182.4 15.9 53.2 12.7 15.8 7.8 2019F 2,272.8 279.2 12.3 304.8 205.5 205.5 17.9 12.7 11.3 17.8 8.8 2020F 2,411.1 298.5 12.4 325.7 219.6 219.6 19.0 6.3 10.6 19.0 9.4 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 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 2 of 2
14. COMPANY UPDATE TA Securities Wednesday , 14 Jun 2017 FBM KLCI: 1,784.44 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 IOI Properties Group Bhd TP: RM2.25 (7.2%) Last Traded: RM2.10 Forming JV to Develop Land in Singapore Hold THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Thiam Chiann Wen Tel: +603-2167 9615 cwthiam@ta.com.my Partnering Hong Kong Land to develop Marina Bay, Singapore IOI Properties Group (IOIPG) and Jardine Matheson Group’s unit, Hong Kong Land (HKL) have entered into a memorandum of agreement (MOA) to jointly develop and manage a land of about 2.7-acre in Central Boulevard, Marina Bay, Singapore. To recap, IOIPG has won the land for SGD2.57bn from the Urban Redevelopment Authority of Singapore (URA) in Nov-16. This land is strategically located next to One Raffles Quay and close to Marina Bay Financial Centre – see Appendix 1. Note that both One Raffles Quay and Marina Bay Financial Centre are currently held and managed by HKL Subject to regulatory approvals, IOIPG and HKL will hold 67% and 33% stake in the joint venture company. We understand that the IOIPG’s initial investment in the project is SGD2.84bn (inclusive of acquisition cost of SGD2.57bn and other related expenses). With that, IOIPG’s and HKL’s share of consideration in relation to the proposed JV is approximately SGD1.9bn and SGD0.94bn respectively. According to the announcement, the proposed JV is targeted to be formed by 1QCY18. Our View We are positive on the proposed JV as it will assist in reducing project funding and execution risks. We believe the office and retail component of Central Boulevard (at least 75% of the total allowable gross floor area of 141,294 sq.m.) will likely be retained as investment properties. This would implies huge capital expenditure requirement for this project over the next seven years. As at 31 Mar 2017, the group’s net gearing ratio stood at 0.64x, significantly higher than the sector’s average of 0.3x. Hence, roping in a JV partner will reduce IOIPG’s capital commitment on the project and help ease IOIPG’s debt burden. Elsewhere, the proposed JV will also allow IOIPG to leverage on HKL’s expertise in managing prime office and luxury retail property. More importantly, we envisage value creation given Central Boulevard project will have direct links to HKL’s One Raffles Quay and Marina Bay Financial Centre via underground and overhead pedestrian walkways, enabling better connectivity within that commercial zone. We also believe that HKL’s presence will help accelerate development activities on site and ensure timely launch of the project. The JV could also tap on HKL’s large pool of clientele to fill up the new commercial space. Forecast We understand that the gross development value and gross development costs of the proposed development to be undertaken on the proposed land has yet to be determined as the project development plans are still at a preliminary stage. As we have not factored in this land into our earnings model, we maintain our FY17-19 earnings forecasts pending the formal establishment of the JV. Recommendation We maintain our Hold recommendation with an unchanged target price of RM2.25/share, based on 13x CY18 EPS. Page 1 of 3 www.taonline.com.my Share Information Bloomberg Code IOIPG MK Stock Code 5249 Listing Main Market Share Cap (mn) 5506.1 Market Cap (RMmn) 11562.9 Par Value 1.00 52-wk Hi/Lo (RM) 2.46/1.85 12-mth Avg Daily Vol ('000 shrs) 3,228.20 Estimated Free Float (%) 30.9 Beta 0.89 Major Shareholders (%) Vertical Capacity Sdn Bhd - 51.7% Summervest Sdn BHd - 8.5% Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 0.0 0.0 961.2 963.5 873.2 909.0 110.1 106.0 Hold (Maintained) Financial Indicators FY17 37.3 (103.7) (0.0) 5.6 3.3 0.6 FY18 32.5 20.1 0.1 5.2 3.4 0.6 Price Change 1 mth IOIPG FBM KLCI (3.2) 0.5 3 mth 6 mth 12 mth 9.9 12.5 (3.8) 3.6 8.6 9.7 Net Debt/Equity (%) CFPS (sen) Price/CFPS (x) ROE (%) NTA/Share (RM) Price/NTA (x) Share Performance (%) (12-Mth) Share Price relative to the FBM KLCI
15. TA Securities 14-Jun-17 A Member of the TA Group Appendix 1 : Location Plan for Land Parcel at Central Boulevard Source: URA Page 2 of 3
16. TA Securities 14-Jun-17 A Member of the TA Group Financial Statement Profit & Loss (RMm) YE June 30 Revenue EBITDA Dep. & amortisation Fair Value Gains and EI Net finance cost Share of associtates & JV Reported PBT Normalised PBT Taxation MI Reported Net profit Normalised PBT Core EPS (sen) GDPS (sen) Div Yield (%) EV/EBITDA (x) 2015 1,906.5 866.9 (177.6) (316.6) 50.7 73.8 1,130.3 813.7 (229.7) (20.2) 890.7 574.1 15.2 6.0 2.9 1.0 2016 3,024.9 1,029.9 (207.9) (468.1) 57.1 177.5 1,524.7 1,056.6 (424.4) (25.2) 1,080.0 611.9 13.8 8.0 3.8 2.1 2017F 3,868.1 1,836.8 (498.5) 0.0 (3.0) 73.9 1,409.1 1,409.1 (422.7) (25.1) 961.2 961.2 17.4 7.0 3.3 3.7 2018F 4,002.7 1,765.0 (481.7) 0.0 (8.3) 137.3 1,412.2 1,412.2 (423.7) (24.6) 963.5 963.5 17.4 7.5 3.6 3.4 2019F 3,876.1 1,739.5 (465.7) 0.0 (13.6) 131.6 1,391.7 1,391.7 (417.5) 0.0 949.6 949.6 17.2 8.0 3.8 3.0 Cash Flow (RMm) YE June 30 PBT Adjustments Dep. & amortisation Changes in WC Operational cash flow Capex Others Investment cash flow Debt raised/(repaid) Equity raised(repaid) Dividend Others Financial cash flow Net cash flow 2015 1,130.3 (1,631.9) 177.6 658.3 334.3 (921.0) 508.9 (412.2) 695.0 1,024.8 (259.1) (117.1) 1,343.6 1,265.7 2016 1,524.7 (1,464.7) 207.9 (156.7) 111.1 (930.9) (101.0) (1,031.8) 1,450.6 0.0 (353.9) (1.2) 1,095.5 174.8 2017F 1,409.1 (3,428.2) 498.5 2,657.5 1,137.0 (6,870.0) 0.0 (6,870.0) 3,000.0 1,521.9 (386.9) 0.0 4,135.0 (1,598.0) 2018F 1,412.2 (2,030.9) 481.7 1,399.7 1,262.8 (150.0) 0.0 (150.0) 600.0 0.0 (414.5) 0.0 185.5 1,298.3 2019F 1,391.7 (1,816.4) 465.7 1,421.1 1,462.1 (150.0) 0.0 (150.0) 600.0 0.0 (442.1) 0.0 157.9 1,470.0 Assumptions YE June 30 New Sales (RM mn) Prop Dev Margins (%) 2015 1,770.0 45.4 2016 2,200.0 43.0 2017F 2,663.6 37.8 2018F 2,790.2 36.2 2019F 2,981.8 37.3 Balance Sheet (RMm) YE June 30 PPE Land Held for Development Investment Properties Others Total Non Current Assets Trade Receivables Inventories Cash Others Current Assets 2015 2016 2017F 2018F 2019F 1120.1 1122.3 1204.6 1236.3 1267.6 2894.1 4591.0 4791.0 4791.0 4791.0 3388.2 4024.2 10113.4 9749.9 9402.9 4468.7 5124.2 5198.1 5335.4 5467.0 11871.1 14861.7 21307.1 21112.7 20928.6 906.5 933.0 1839.2 1903.2 1843.0 302.4 700.3 734.8 779.5 757.0 1909.6 2087.0 489.0 1787.3 3257.3 3449.8 4228.3 6022.9 6230.0 6035.2 6568.4 7948.6 9086.0 10700.1 11892.5 Total assets 18439.5 22810.3 30393.1 31812.7 32821.0 ST debt Trade Payables Other current liabilities Current Liabilities Shareholders' funds MI LT borrowings Others LT liabilities Total long term Liabilities 560.4 1661.9 18.0 2240.3 13427.2 111.0 2238.7 422.4 2661.1 464.5 1576.7 39.2 2080.3 15885.1 130.8 3797.6 916.6 4714.2 2464.5 4038.0 39.2 6541.6 17981.3 155.9 4797.6 916.6 5714.2 2764.5 4283.5 39.2 7087.2 18530.3 181.0 5097.6 916.6 6014.2 3064.5 4159.8 39.2 7263.4 19037.9 205.6 5397.6 916.6 6314.2 Total Equity and Liabilities 18439.5 22810.3 30393.1 31812.7 32821.0 2015 27.3 13.8 6.0 2.9 889.4 0.1 4.6 3.5 3.6 0.6 2016 (9.0) 15.2 8.0 3.8 2175.0 0.1 4.1 3.0 3.6 0.6 2017F 25.7 12.1 7.0 3.3 6773.1 0.4 5.6 3.6 3.3 0.6 2018F 0.2 12.0 7.5 3.6 6074.7 0.3 5.2 3.1 3.4 0.6 2019F (1.4) 12.2 8.0 3.8 5204.8 0.3 5.0 2.9 3.5 0.6 Ratio YE June 30 EPS Growth (%) PER (x) GDPS (sen) Div Yield (%) Net Debt/ (Net cash) (RMm) Net gearing (x) ROE (%) ROA (%) NTA/share (RM) P/NTA (x) 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 3 of 3
17. COMPANY UPDATE TA Securities Wednesday , June 14, 2017 FBM KLCI: 1,784.44 Sector: Healthcare A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 TP: RM4.70 (+12.7%) KPJ Healthcare Berhad Last traded: RM4.17 Acquiring Office Premise to Expand KPJ Perdana’s Bed Capacity BUY THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Wilson Loo Tel: +603-2167 9606 wilsonloo@ta.com.my Acquiring Office Premise Adjacent to KPJ Perdana Specialist Hospital • KPJ announced that its 60.6% owned subsidiary, Perdana Specialist Hospital Sdn Bhd, which operates the 126 bed KPJ Perdana Specialist Hospital (KPJ Perdana) in Kota Bharu, Kelantan has proposed to acquire an office premise adjacent to KPJ Perdana measuring 938 square metres for RM6.8mn. The office premise is part of a commercial block in Kelantan Trade Centre (KTC). Q www.taonline.com.my Share Information Bl oomberg Code KPJ MK Stock Code 5878 Li sti ng Main Market Share Cap (mn) 1,049.8 Market Cap (RMmn) 4,377.5 Par Val ue 0.50 52-wk Hi /Lo (RM) 4.37/3.85 12-mth Avg Dai l y Vol ('000 shrs) • • According to management, plans are to expand and relocate the medical suites at KPJ Perdana to the adjacent office premise whereby, in addition to the office premise to be acquired, the group already owns 2-storeys of the commercial block. The vacant space at KPJ Perdana will then make way for about 40 to 50 new beds. Both KPJ Perdana and the adjacent office premise housing the medical suites will be linked by a skybridge. Estimated CAPEX for the expansion is about RM40mn and expected for completion by 1QCY18. The proposed acquisition is subject to the vendor, KTC Convention and Apartment Sdn Bhd, procuring and obtaining the ‘Surat Kebenaran Pihak Berkuasa Negeri’ within 6 months of the sale and purchase agreement. Our Take: Positive Move to Capitalize on Growth Opportunities • We are positive on the proposed acquisition as it would allow KPJ Perdana to address capacity constraints as well as capitalize on opportunities for increased revenue potential. KPJ Perdana is a relatively mature hospital with stable occupancy rates of about 70%. Established in 2001, we opine that its established patient profiles would naturally expedite the gestation period of the planned expansion. • On the consideration, it appears to be fair considering that it is at a slight premium of RM50k or 0.7% to the market value ascribed by an independent valuation party. Assuming full funding by debt, we estimate the impact on net gearing to be negligible to the group’s latest of 0.7x as at 1QFY17. Impact • We make no changes to our forecasts pending completion of the proposed acquisition. Esti mated Free Fl oat (%) 18.2 Beta 0.5 Major Sharehol ders (%) Johor Corp - 44.2 EPF - 12.9 Waqaf An-Nur Corporati on Bhd - 7.3 Forecast Revision FY17 FY18 - - Net profi t (RMm) 139.8 172.7 Cons ensus Forecast Revi si on (%) 149.8 169.0 TA's / Cons ensus (%) 93.3 102.2 Previ ous Rati ng Buy (Mai ntai ned) Financial Indicators FY17 FY18 Net gearing (x) 0.6 0.6 CFPS (RM) 0.4 0.3 P/CFPS (x) 11.7 13.6 ROAA (%) ROAE (%) NTA/Share (RM) Pri ce/ NTA (x) 3.5 8.1 1.3 4.1 9.5 1.4 3.2 3.0 Share Performance (%) Price Change 1 mth KPJ FBM KLCI 0.2 0.5 3 mth 3.5 3.6 6 mth 1.7 8.6 12 mth -3.5 9.7 (12-Mth) Share Price relative to the FBM KLCI Recommendation • We maintain our BUY recommendation on KPJ with a TP of RM4.70/share based on SOTP valuation. We continue to like the group for its leading and growing position in Malaysia’s private healthcare market. Downside risks include slower-than-expected growth in patient admissions as well as currency and expansion induced cost pressures. Source: Bloomberg Page 1 of 3 636.1
18. TA Securities 14-Jun-17 A Member of the TA Group Source : Bloomberg, TA Securities Dec-16 Mar-17 Jun-16 Sep-16 Dec-15 Mar-16 Jun-15 Sep-15 Dec-14 Mar-15 Jun-14 Sep-14 Dec-13 Mar-14 Jun-13 Sep-13 -1SD: 14.2x Jun-12 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 Jul-12 -1SD: 27.2x Dec-12 Average: 30.5x +1SD: 17.0x Average: 15.6x Mar-13 x 20.0 19.0 18.0 17.0 16.0 15.0 14.0 13.0 12.0 11.0 10.0 +1SD: 33.8x Oct-12 x 40.0 38.0 36.0 34.0 32.0 30.0 28.0 26.0 24.0 22.0 20.0 Figure 2: Forward EV/EBITDA Sep-12 Figure 1: Forward PER Source: Bloomberg, TA Securities Table 1: SOTP Valuation Segment Valuation Method Hospital Operations DCF (WACC: 8.0%, LT: 3.0%) Al-Aqar Healthcare REIT Equity Market Value (RM1.57/share) Value (RM mn) Stake (%) 4,656.1 100 434.5 38 5,090.5 Add: Proceeds from Outstanding Warrants 347.2 5,437.7 Fully Diluted Shares 1,150.1 Target Price/share RM4.70 Table 2: Peer Comparison Company IHH Healthcare Bhd Price TP Mkt Cap EPS Growth (%) PER (x) (MYR mn) CY17 CY18 CY17 CY18 Recomm. Country EV/EBITDA (x) CY17 CY18 ROE (%) Dividend Yield CY17 CY18 CY17 CY18 RM6.00 RM6.65 Hold Global 49,418 -2.0 59.1 58.2 36.6 23.1 18.2 3.8 5.8 0.6 0.7 Ramsay Healthcare Ltd Primary Healthcare Ltd AUD 69.13 AUD 3.82 N.R. N.R. N.R. N.R. Australia Australia 44,884 6,400 12.7 0.0 10.9 11.9 24.8 20.2 22.4 18.0 12.2 8.6 11.2 8.0 24.4 4.0 23.9 4.5 2.1 3.1 2.3 3.5 Phoenix Healthcare Group Co Ltd Harmonicare Medical Holdings Ltd HKD 10.18 HKD 3.89 N.R. N.R. N.R. N.R. Hong Kong Hong Kong 7,218 1,613 9.5 32.5 25.0 6.6 29.2 20.4 23.3 19.1 18.0 8.9 14.3 7.8 9.7 8.6 9.7 8.8 0.8 1.5 0.9 1.4 Apollo Hospitals Enterprise Ltd Fortis Healthcare Ltd INR 1,329 INR 189 N.R. N.R. N.R. N.R. India India 12,245 6,499 39.5 -16.0 46.4 -2.5 54.9 40.0 37.5 41.0 23.3 22.8 18.9 17.6 8.8 4.7 11.9 4.6 0.5 0.0 0.7 0.1 Mitra Keluarga Karyasehat Tbk PT IDR 2,000 Siloam International Hospitals Tbk PT IDR 12,650 N.R. N.R. N.R. N.R. Indonesia Indonesia 9,336 5,278 8.2 43.2 13.4 33.1 38.5 121.8 34.0 91.5 28.5 20.4 24.7 16.8 19.6 4.2 20.9 4.9 1.6 0.1 1.9 0.1 KPJ Healthcare Bhd RM4.17 RM4.70 Buy Malaysia 4,378 -6.3 23.5 37.3 30.2 15.2 13.5 8.1 9.5 1.5 1.8 Ryman Healthcare Ltd NZD 8.50 N.R. N.R. New Zld. 13,077 -12.7 12.0 23.2 20.7 21.5 19.2 13.9 10.8 2.3 2.5 N.R. N.R. N.R. N.R. N.R. N.R. N.R. N.R. N.R. N.R. Thailand Thailand Thailand Thailand Thailand 36,615 15,987 4,535 4,170 3,347 29,756 5,389 35,586 0.9 0.9 35.1 19.7 20.9 6.4 12.2 5.0 6.6 8.7 12.5 18.1 16.1 23.8 16.5 25.5 34.4 34.7 38.1 37.0 39.0 40.2 43.7 39.3 32.3 31.9 33.8 31.4 33.6 31.8 36.7 30.6 21.5 21.1 24.0 18.3 25.7 19.7 18.3 20.1 19.9 19.0 21.5 16.0 21.9 17.0 15.4 17.3 15.2 24.7 12.0 17.5 19.6 13.8 9.0 14.9 14.2 23.5 12.3 18.2 20.6 14.0 9.5 15.1 1.5 1.6 0.9 1.5 1.4 1.4 1.2 1.4 1.5 1.7 1.1 1.7 1.6 1.5 1.3 1.5 Bangkok Dusit Med Service THB 18.80 Bumrungrad Hospital Rub Co THB 174.50 Vibhavadi Medical Centre PCL THB 2.74 Bangkok Chain Hospital PCL THB 13.30 Chularat Hospital PCL THB 2.42 Weighted Average Weighted Average Small Mkt Cap (<RM10bn) Weighted Average Large Mkt Cap (>RM10bn) Page 2 of 3
19. TA Securities 14-Jun-17 A Member of the TA Group P &L (RM mn) YE Dec 31 Revenue Gross profit EBITDA Depr & Amor Finance income Finance costs Net finance costs PBTZ PAT (-MI) Core PAT (-MI) EPS (sen) DPS (sen) DPR (%) FY15 2,847.6 826.4 340.0 119.2 13.7 (64.2) (50.4) 209.6 135.3 135.3 12.7 7.9 61.6 FY16 3,021.1 898.0 375.4 132.0 16.3 (83.1) (66.8) 210.2 149.2 149.2 11.9 6.6 54.9 FY17F 3,242.5 932.7 373.4 136.8 16.9 (85.0) (68.1) 197.0 139.8 139.8 11.2 6.1 54.9 FY18F 3,643.3 1,066.4 422.7 142.2 19.2 (86.8) (67.6) 243.3 172.7 172.7 13.8 7.6 54.9 FY19F 4,103.2 1,213.9 472.7 147.9 20.0 (88.6) (68.7) 288.9 205.1 205.1 16.4 9.0 54.9 FY20F 4,611.9 1,380.6 529.8 152.4 22.2 (90.5) (68.3) 344.2 244.3 244.3 19.5 10.7 54.9 Cash Flow (RM mn) YE Dec 31 PBZT Non-cash Changes in WC Others CFO FY15 209.6 157.0 (120.3) (57.3) 189.1 FY16 210.2 196.9 (194.5) (69.4) 143.2 FY17F 197.0 136.8 88.3 (11.2) 410.8 FY18F 243.3 142.2 (7.1) (25.7) 352.7 FY19F 288.9 147.9 (6.9) (38.6) 391.2 FY20F 344.2 152.4 (8.6) (55.7) 432.4 Purchase of PPE Purchase of inv. properties Others CFI (344.6) (0.1) 92.6 (252.1) (258.0) 0.0 126.5 (131.5) (228.1) 0.0 41.4 (186.7) (258.3) 0.0 44.6 (213.8) (250.1) 0.0 46.4 (203.7) (237.0) 0.0 49.4 (187.6) Borrowings Repayment Issue of shares Interest paid Dividends paid Others CFF 1,201.9 (915.3) 81.3 (64.2) (83.5) (25.2) 195.1 164.4 (132.2) 33.0 (83.1) (70.9) 3.0 (85.8) 168.4 (135.5) 0.0 (85.0) (66.9) 0.0 (118.9) 171.9 (138.3) 0.0 (86.8) (82.6) 0.0 (135.8) 175.5 (141.2) 0.0 (88.6) (98.1) 0.0 (152.3) 179.2 (144.1) 0.0 (90.5) (116.9) 0.0 (172.3) 132.0 305.3 (4.1) 433.2 (74.1) 433.2 0.3 359.4 105.1 359.4 0.0 464.5 3.2 464.5 0.0 467.7 35.2 467.7 0.0 502.9 72.5 502.9 0.0 575.4 Net cash flow Opening cash flow Forex Closing cash flow Balance Sheet (RMmn) YE Dec 31 PPE Associates Intangible assets Others LT Assets FY15 1,831.9 475.5 252.1 331.7 2,891.3 FY16 1,966.5 391.5 245.6 336.0 2,939.6 FY17F 2,033.4 419.9 245.6 336.0 3,034.9 FY18F 2,124.2 450.4 245.6 336.0 3,156.2 FY19F 2,200.0 483.1 245.6 336.0 3,264.6 FY20F 2,257.4 518.1 245.6 336.0 3,357.1 Inventories Receivables Cash Others ST Assets 48.1 517.4 433.2 25.6 1,024.3 47.1 555.5 359.4 33.9 995.9 51.8 575.8 464.5 33.9 1,125.9 57.8 646.9 467.7 33.9 1,206.2 64.8 728.6 502.9 33.9 1,330.1 72.4 818.9 575.4 33.9 1,500.6 Total Assets 3,915.6 3,935.5 4,160.8 4,362.4 4,594.7 4,857.7 Payables Borrowings Others ST Liabilities 616.9 359.1 115.3 1,091.3 490.9 333.4 104.6 928.9 604.1 340.4 104.6 1,049.1 674.2 347.5 104.6 1,126.3 756.0 354.8 104.6 1,215.4 845.4 362.2 104.6 1,312.2 Borrowings Others LT Liabilities 1,178.9 85.4 1,264.3 1,242.3 79.5 1,321.8 1,268.3 79.5 1,347.8 1,294.8 79.5 1,374.4 1,321.9 79.5 1,401.4 1,349.6 79.5 1,429.1 Share capital Treasury shares Reserves NCI Total Equity 527.2 (54.8) 999.1 88.4 1,560.0 531.8 (54.8) 1,118.1 89.6 1,684.7 531.8 (54.8) 1,191.0 95.9 1,763.9 531.8 (54.8) 1,281.1 103.6 1,861.8 531.8 (54.8) 1,388.1 112.8 1,977.9 531.8 (54.8) 1,515.6 123.8 2,116.3 Liabilities + Equity 3,915.6 3,935.5 4,160.8 4,362.4 4,594.7 4,857.7 Ratios YE Dec 31 Valuation ratios PER (x) EV/EBITDA (x) Dividend yield (%) FY15 FY16 FY17F FY18F FY19F FY20F 32.7 16.7 1.9 35.0 15.2 1.6 37.3 15.2 1.5 30.2 13.5 1.8 25.4 12.0 2.2 21.4 10.7 2.6 Profitability ratios Gross margins (%) EBITDA margins (%) PAT margins (%) ROAA (%) ROAE (%) 29.0 11.9 4.8 3.7 9.3 29.7 12.4 4.9 3.8 9.2 28.8 11.5 4.3 3.5 8.1 29.3 11.6 4.7 4.1 9.5 29.6 11.5 5.0 4.6 10.7 29.9 11.5 5.3 5.2 11.9 Leverage ratios Total liabilities/equity (x) Net debt/equity (x) Int. coverage ratio (x) 1.5 0.7 3.4 1.3 0.7 2.9 1.4 0.6 2.8 1.3 0.6 3.2 1.3 0.6 3.7 1.3 0.5 4.2 Growth ratios Sales (%) Gross profit (%) EBITDA (%) PAT (-MI) (%) 7.9 6.8 7.3 (5.4) 6.1 8.7 10.4 10.2 7.3 3.9 (0.5) (6.3) 12.4 14.3 13.2 23.5 12.6 13.8 11.8 18.7 12.4 13.7 12.1 19.1 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 3 of 3
20. TA Securities A Member of the TA Group MENARA TA ONE , 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 SECTOR UPDATE Wednesday, June 14, 2017 FBM KLCI: 1,784.44 Sector: Plantation Neutral Plantation Sector Strong CPO Exports in May THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Angeline Chin Swee Tyng Tel: +603-2167-9611 angelinechin@ta.com.my Lower Stockpiles Due to Strong Exports MPOB’s May 2017 palm oil stockpiles came in below market expectations mainly due to higher-than-expected exports and lower imports. Note that the palm oil stockpiles declined by 2.6% MoM to 1.56mn tonnes after two-consecutive months of increase. The market was expecting the stockpiles to be in the range of 1.58 – 1.61mn tonnes. The monthly production increased 6.9% MoM and 21.2% YoY to 1.65mn tonnes, which was within expectations. Meanwhile, exports gained 17.3% MoM to 1.5mn tonnes helped by strong demand from India and Pakistan. Imports were lower (-12.9% MoM, >100% YoY) at 47k tonnes and the domestic usage stood at 238k tonnes (-12.4%MoM, -7.2% YoY). Production Posted Strong YoY Growth CPO production marked its 6th consecutive YoY growth of 21.2% (at its highest growth so far this year) in May-17. The FFB yield increased 5.8% MoM or 15.0% YoY to 1.46 tonnes/ha during the month, supported by Peninsular Malaysia where the average yield increased the most by 17.6% YoY to 1.47tonne/ha, followed by Sarawak (+13.4%) and Sabah (+11.0%). The YTD production stood at 7.2mn tonnes (+18.9% YoY) with higher production coming from all states except Terengganu (-1.2% YTD). Note that although the FFB yield is currently on an upward trend, it is still below 2014 and 2015 levels (refer to figure 7). The YTD production is 3.9% and 1.1% below 2014 and 2015 cumulative figures. Exports Beat Expectations Exports to India and Pakistan increased by 70.1% and 97.5% MoM to 274k and 108k tonnes in May-17, respectively. This could be due to restocking activity ahead of Ramadan and Eid alFitri festivals. Demand is expected to fade after the festivals. Meanwhile, demand from US and China were weaker at 39k (-24.8% MoM) and 113k tonnes (-17.6% MoM). Looking forward, Intertek and SocieteGenerale de Surveillance (SGS) estimate that the palm oil exports for the first 10 days of June to increase by 5.8% and 2.2% to 347k and 367k tonnes, respectively. CPO Price Forecast at RM2,400-RM2,600 for 2H CPO price has been on a downward trend and depreciated by around 16% YTD. The YTD average CPO price stood at RM2,980/tonne compared with RM2,510/tonne in 2016. Looking forward, we expect CPO price to weaken further in 2H17 as FFB production is expected to recover strongly and Ringgit to appreciate gradually. Also, the US planting progress is nearly completed and market is expecting a huge crop supply in the US. The situation is exacerbated by big supplies coming from Latin America, which is expected to flood the market in 2H. For all these reasons, we expect CPO prices to trade in the range of RM2,400-RM2,600/tonne in 2H, and average at around RM2,700/tonne for 2017. Note that the August CPO futures is settled at RM2,432/tonne (-5.7% MoM and -9.6% discount to spot) while the September to November contracts are in the range of RM2,394 – RM2,398/tonne. Maintain Neutral We reiterate our Neutral recommendation on the Plantation sector. Our re-rating catalysts include: 1) extreme weather change which affects both the production and CPO price, 2) downward revisions in soybean production estimates, and 3) better-than-expected demand from China and India. Maintain BUY recommendation on IJMP and United Malacca. We continue to like IJMP for its huge potential earnings accretion from its Indonesia operation in the long-term. While for United Malacca, its young tree profile, a strong growth prospect and attractive valuations should help to support growth in share price. Meanwhile, KLK, Sime Page 1 of 4 www.taonline.com.my