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Bursa Malaysia Daily Market Report - 15 June

Mohd Noordin
By Mohd Noordin
5 years ago
Bursa Malaysia Daily Market Report - 15 June

Ard, Dinar, Mal, Commenda, Sales


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  1. Thursday , 15 June, 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. Astro Malaysia Holdings Berhad: Nurturing NJOI ARPU Poh Huat Resources Holdings Bhd: Strong Q2 Results, Looking at Expansion Sunway Berhad: Aiming Big in Other Business Segments US Economy: Fed Raises Rates; Sets Out Plan to Unwind Assets 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 Thursday, 15 June 2017 TA Research e-mail : taresearch@ta.com.my For Internal Circulation Only Review & Outlook KLSE Market Statistics (14.06.2017) (mil) Main Market 1,376.8 Warrants 179.1 ACE Market 379.4 Bond 13.5 ETF 0.0 Total 1,948.8 Off Market 51.0 Volume +/-chg (RMmn) 26.8 2,384.4 -30.1 19.8 -96.3 80.3 -5.1 5.2 -0.02 0.0 2,489.7 -183.1 80.6 Value +/-chg -42.5 -1.2 -33.7 -2.2 -0.03 -220.5 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 Value/ Volume 1.73 0.11 0.21 0.39 1.13 1.28 1.58 Up Down 341 252 86 83 50 42 6 2 0 2 483 381 % chg % YTD chg 1,792.35 12,783.58 17,526.58 1,792.50 7.91 53.29 23.97 3.50 0.44 0.42 0.14 0.20 9.17 11.49 19.10 9.60 21,374.56 6,194.89 7,474.40 19,883.52 2,372.64 25,875.90 3,253.43 1,577.00 5,792.90 3,130.67 1,852.79 5,833.90 46.09 -25.48 -26.04 -15.23 -2.06 23.80 -4.09 4.64 85.25 -23.07 -7.10 61.14 0.22 -0.41 -0.35 -0.08 -0.09 0.09 -0.13 0.30 1.49 -0.73 -0.38 1.06 8.16 15.08 4.64 4.02 17.08 17.61 12.94 2.21 9.37 0.87 -5.91 2.97 The local benchmark closed at a fresh two-year high on Wednesday, lifted by strength in defensive gaming stocks and banks but the broader market ended mixed ahead of the US Federal Reserve's key decision on raising interest rates tonight. The KLCI rose 7.91 points to settle at 1,792.35, off an early low of 1,786.92 and high of 1,793.07, as gainers edged losers 483 to 381 on cautious turnover of 1.95bn shares worth RM2.49bn. The local market should trade sideways as investors digest the potential impact of the US Federal Reserve's decision on raising interest rates. Immediate uptrend supports for the index stays at 1,782 and 1,775, the rising 10 and 30-day moving average levels followed by better support from the 50-day moving average level at 1,763. Immediate upside hurdles are from the 1,800 psychological level and 18 May 2015 high of 1,823. Affin shares should rebuild support above the 61.8%FR (RM2.65) pending oversold rebound towards the 100-day ma (RM2.74), with next resistance from the 76.4%FR (RM2.78), while stronger support is expected from the lower Bollinger band (RM2.60). Hook-up momentum indicators on AFG implies good rebound potential towards the 76.4%FR (RM4.16), with tougher hurdle seen from the 11/5/17 peak (RM4.49). Key retracement support from the 61.8%FR (RM3.95) is reinforced by the 200-day moving average level. News Bites • • • • • • Top 10 KLCI Movers Based on Mkt Cap. Off Market (mn) YONGTAI-PA 12.9 EDEN 6.4 EOCFIRS 6.3 EDUSPEC 5.4 CIMB 5.1 ECONBHD 5.0 YONGTAI-PA 3.2 RHBBANK 2.0 EDGENTA 1.0 MEDAINC 1.0 CONNECT-PA 1.0 @ @ @ @ @ @ @ @ @ @ @ (RM) 0.90 0.20 0.33 0.02 6.67 2.40 1.46 5.08 2.64 0.45 0.21 Counter Mkt Cap. (RM’mn) MAYBANK 101,056 PBBANK 78,774 SIME 65,424 CIMB 60,921 PCHEM 57,760 DIGI 38,642 GENTING 37,265 GENM 33,160 MISC 32,809 HLBANK 31,500 Chg (RM) 0.04 0.02 0.01 0.12 0.02 0.02 0.21 0.22 0.05 0.12 Important Dates JHM - 1:1 Bonus Issue - BI of 123.7m shares. 1 bonus share for every 1 existing share. Ex-Date: 15/06/2017. Entitlement Date: 19/06/2017. LISTING ON: 20/06/2017. SEG - 5:7 Bonus Issue - BI of 516.8m shares. 5 bonus shares for every 7 existing shares. Ex-Date: 22/06/2017. Entitlement Date: 28/06/2017. LISTING ON: 29/06/2017. Vol. (mn) 12.58 2.99 9.53 28.38 3.97 4.00 3.49 10.21 2.44 2.26 • • • • • • • Sunway Bhd plans to list its healthcare unit within the next 5 years, as the group is currently looking to add 5 more hospitals to its portfolio, estimated to cost approximately RM1bn. It has also announced a proposal to undertake a bonus issue. Astro Malaysia Holdings Bhd's net profit for 1QFY18 slipped 3.14% YoY to RM195.80mn due to reduced earnings before interest, tax, depreciation and amortisation, and rise in net finance costs. It was within expectations. Poh Huat Resources Holdings Bhd's net profit in 2QFY17 grew 2.7 times or 174% YoY to RM10.6mn due to higher shipping volume of furniture exported from its Vietnamese and Malaysian operations. It was above expectations. With regards to a RM100mn net profit forecast in FY18 by the Edge Financial Daily, the board of Priceworth International Bhd has confirmed that no forecast was made and the estimate referred to was a ballpark figure using an industry benchmark. JAG Bhd expects to achieve 25%-30% grow in revenue for FY17 due to more contract wins from existing and new suppliers and increased efficiency in its processing facility. Encorp Bhd expects revenue of at least RM350mn for FY17, which is driven by unbilled sales in 2 projects, Encorp Marina Puteri Harbour in Johor and Akasia at Encorp Cahaya Alam in Selangor. Sumatec Resources Bhd has received the confirmation from CaspiOilGas LLP that the Ministry of Energy in the Republic of Kazakhstan has granted COG further extension of up to 25 years to the mining lease. Bumi Armada Bhd has established a JV with Shapoorji Pallonji and Company Private Limited, and Cypress Energy Company Limited with the intention of ultimately securing the award of a floating, production, storage and offloading project in Ghana. The Kuala Lumpur High Court has ruled in favour of Stone Master Corporation Bhd's major shareholders, indicating that the extraordinary general meeting held on May 30 was valid. Xian Leng Holdings Bhd plans to implement a private placement of up to 7.23mn new ordinary shares or representing not more than 10% of its issued shares to independent third-party investors to be identified later. Water and waste-water management company Salcon Bhd expects its new investments in technology services and e-commerce may take some time to generate revenue as it shall only be able to contribute positive returns to its bottom line in FY18. A report by Datuk Seri Idris Jala as an independent party in the Felda Global Ventures Holdings Bhd crisis is ready and will be announced at an appropriate time. The US Federal Reserve raised its target for the federal funds rate by 25 basis points to a range of 1% to 1.25%. Exchange Rate USD/MYR 4.2573 -0.0047 USD/JPY 110.25 0.1400 EUR/USD 1.121 -0.0002 Commodities Futures Palm Oil (RM/mt) 2,421.00 28.00 Crude Oil ($/Barrel) 44.68 -1.27 Gold ($/tr.oz.) 1,262.50 -6.00 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 Thursday , June 15, 2017 FBMKLCI: 1,792.35 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 Sideways After US Rate Decision The local benchmark closed at a fresh two-year high on Wednesday, lifted by strength in defensive gaming stocks and banks but the broader market ended mixed ahead of the US Federal Reserve’s key decision on raising interest rates tonight. The KLCI rose 7.91 points to settle at 1,792.35, off an early low of 1,786.92 and high of 1,793.07, as gainers edged losers 483 to 381 on cautious turnover of 1.95bn shares worth RM2.49bn. Immediate Uptrend Supports at 1,782/1,775 The local market should trade sideways as investors digest the potential impact of the US Federal Reserve’s decision on raising interest rates. Immediate uptrend supports for the index stays at 1,782 and 1,775, the rising 10 and 30-day moving average levels followed by better support from the 50-day moving average level at 1,763. Immediate upside hurdles are from the 1,800 psychological level and 18 May 2015 high of 1,823. Buy Weakness in AFFIN & AFG Affin shares should rebuild support above the 61.8%FR (RM2.65) pending oversold rebound towards the 100-day ma (RM2.74), with next resistance from the 76.4%FR (RM2.78), while stronger support is expected from the lower Bollinger band (RM2.60). Hook-up momentum indicators on AFG implies good rebound potential towards the 76.4%FR (RM4.16), with tougher hurdle seen from the 11/5/17 peak (RM4.49). Key retracement support from the 61.8%FR (RM3.95) is reinforced by the 200-day moving average level. Asian Markets Lower Following Weak China Investment Data Asian stock markets traded mostly lower on Wednesday as investors refrained from taking positions ahead of the U.S. Federal Reserve's monetary policy decision. Chinese data showed retail sales and industrial output beat forecasts, but a miss in urban investment reinforced views the world's second-largest economy will start to lose momentum as lending costs rise and the property market cools. China stocks ended lower, led by blue-chips as sentiment was soured by a media report alleging a probe of the head of financial conglomerate Anbang Insurance Group. The blue-chip CSI300 index fell 1.31 percent to 3,535.30 points, while the Shanghai Composite Index lost 0.73 percent to 3,130.67 points. Japanese stocks ended marginally lower in choppy trade. The Nikkei shares average fell 0.08 percent to 19,883.52, while Korean Kospi ended lower by 0.09 percent to 2,372.64. In down under, the benchmark ASX200 ended higher by 1.06 percent to close at 5,833.90 with most sub-indexes trading higher, led by the strength in the information technology and health sub-indexes. U.S Markets Mixed after Fed Rate Hike The Dow hit intraday and closing records after the Federal Reserve raised interest rates for the second time this year. Policy makers agreed to raise their benchmark lending rate by 25 basis points for the third time in six months, maintained their outlook for one more hike in 2017 and set out some details for how they intend to shrink their USD4.5 trillion balance Page 1 of 8
  4. TA Securities 15-Jun-17 A Member of the TA Group sheet this year . However, a slide in technology stocks pulled down the Nasdaq Composite and the S&P 500 as investors worried about the pace of economic growth after weaker-thanexpected inflation numbers. The statement noted that inflation in the next 12 months "is expected to remain somewhat below 2 percent in the near term" but to stabilize. The tech sector fell 0.5 percent, recovering from steeper losses in the session and coming on the heels of its biggest two-day swoon in nearly a year. Meanwhile, energy sector dropped 1.8 percent as oil prices weakened. U.S. data showed an unexpectedly large weekly build in U.S. gasoline inventories and International Energy Agency data projected a big increase in non-OPEC output in 2018. The Dow Jones Industrial Average rose 46.09 points, or 0.22 percent, to 21,374.56, the S&P 500 lost 2.43 points, or 0.10 percent, to 2,437.92 and the Nasdaq Composite fell 25.48 points, or 0.41 percent, to 6,194.89. Page 2 of 8
  5. TA Securities 15-Jun-17 A Member of the TA Group News In Brief Corporate Sunway Bhd plans to list its healthcare unit within the next 5 years , as the group is currently looking to add 5 more hospitals to its portfolio, estimated to cost approximately RM1bn. Meanwhile, the group has announced a proposal to undertake a bonus issue of up to 2.8bn new shares in the company on the basis of 4 bonus shares for every 3 existing Sunway shares held. It has also proposed a bonus issue of up to 631mn free warrants, on the basis of 3 warrants for every 10 existing Sunway shares held. The proposals are expected to be completed by 2H2017. (Bursa Malaysia/The Edge) A group of second-generation federal land development authority (Felda) settlers has called on Tan Sri Mohd Isa Abdul Samad, the chairman of Felda Global Ventures Holdings Bhd (FGV), to resign and be replaced by Shahrir Abdul Samad, the chairperson of Felda. The group of settlers which consists of around 40 persons are in view that Felda, the biggest shareholder holding 33% stake in FGV, should have a representative on the scandal-ridden company's board. The settlers are further opined that FGV should not suspend Dato' Zakaria Arshad, the chief executive of FGV, as the matter is still under investigation. Meanwhile, the report by Datuk Seri Idris Jala as an independent party in the FGV’s crisis is ready and will be announced at an appropriate time, according to Prime Minister Datuk Seri Najib Tun Razak. (The Edge/Bernama) Astro Malaysia Holdings Bhd’s net profit for 1QFY18 slipped 3.14% YoY to RM195.80mn due to reduced earnings before interest, tax, depreciation and amortisation, and rise in net finance costs. Revenue for the quarter dropped 2.7% YoY to RM1.33bn because of lower licensing, subscription and advertising revenue. The group declared its first interim 3.0sen dividend per share. (Bursa Malaysia/The Edge) Berjaya Food Bhd posted a net loss of RM3.37mn in 4QFY17 compared to a net profit of RM3.17mn in 4QFY16 due to the impairment exercise in the face of a slowing economy which compelled the management to undertake measures to curtail further losses in the future, such as closure of non-performing restaurants and outlets which led to the impairments of fixed assets and intangible assets. Meanwhile, quarterly revenue grew 9% YoY to RM151.42mn. For FY17, net profit declined 46.69% YoY to RM11.35mn, despite a 9% YoY revenue growth to RM605.44mn. The group recommended a fourth interim dividend of 1.0sen per share. (Bursa Malaysia/The Edge) Bison Consolidated Bhd’s net profit in 2QFY17 grew 55% YoY to RM6.2mn due to intensive promotional activities as the company consistently varied its product offerings. The revenue in 2QFY17 increased 23% YoY to RM79.26mn. The group declared a single-tier dividend of 2.0sen per share. (Bursa Malaysia/The Edge) Poh Huat Resources Holdings Bhd's net profit in 2QFY17 grew 2.7 times or 174% YoY to RM10.6mn due to higher shipping volume of furniture exported from its Vietnamese and Malaysian operations, which led to higher revenue. The quarterly revenue grew 20% YoY to RM127.65mn. In a separate note, the group has re-designated its managing director Tay Kim Huat as group chief executive officer, effective today. (Bursa Malaysia/The Edge) The board of Priceworth International Bhd has issued a statement to clarify the matter pertaining to the forecast of RM100mn net profit in FY18 as reported by the Edge Financial Daily on June 12 2017. The board has confirmed that no forecast was made and the estimated net profit of RM100mn referred to was a ballpark figure using an industry benchmark. (Bursa Malaysia) JAG Bhd expects to achieve 25%-30% grow in revenue for FY17 due to more contract wins from existing and new suppliers and increased efficiency in its processing facility. The group hopes to register at least RM100mn in revenue for FY17 and aims to equalise the income contribution from waste management and property development in less than 5 Page 3 of 8
  6. TA Securities 15-Jun-17 A Member of the TA Group years , according to executive director Datin Stacey Tan Siew Ching. (The Star) Encorp Bhd expects revenue of at least RM350mn for FY17 which is driven by unbilled sales in 2 projects, Encorp Marina Puteri Harbour in Johor and Akasia at Encorp Cahaya Alam in Selangor. The group is currently looking for potential joint venture with established and reputable partners to fast track high value township developments, according to chief executive officer Datuk Zakaria Nordin. (The Edge) Sumatec Resources Bhd (SRB) has received the confirmation from CaspiOilGas LLP(COG) that the Ministry of Energy in the Republic of Kazakhstan has granted COG further extension of up to 25 years to the mining lease. COG initially had a 25-year concession expiring in August 2025. Under the joint investment agreement signed in March 2012, SRB is entitled to 100% of the profit for the first 2mn barrels while from the third years onwards, the profit will be split by half between SRB and COG. (Bursa Malaysia/The Star) Bumi Armada Bhd has established a joint venture with Shapoorji Pallonji and Company Private Limited, and Cypress Energy Company Limited with the intention of ultimately securing the award of a floating, production, storage and offloading project in Ghana. (Bursa Malaysia) The Kuala Lumpur High Court has ruled in favour of Stone Master Corporation Bhd's major shareholders, indicating that the extraordinary general meeting (EGM) held on May 30 was valid. The latest ruling sees the immediate removal of the group managing director Datuk Koh Mui Tee and executive director Datuk Lee Hwa Cheng and appointment of 8 new directors according to the EGM’s outcomes. (The Edge) MISC Bhd has appointed Liza Mustapha as its non-independent non-executive director, effective 1 July 2017. She is currently the chief financial officer of upstream business in Petroliam Nasional Bhd. (The Edge) Goodway Integrated Industries Bhd has appointed an external independent professional firm, PKF Business Service Sdn Bhd, to undertake an assessment of impairments on the carrying amount of plant and equipment and inventories for FY16 in response to the alleged irregularities comprise impairments worth of RM45.51mn from external auditor. (Bursa Malaysia/The Edge) Xian Leng Holdings Bhd plans to implement a private placement of up to 7.23mn new ordinary shares or representing not more than 10% of its issued shares to independent third-party investors to be identified later. The placement is expected to raise gross proceeds of up to RM3.32mn and is necessary to finance its future business projects and day-to-day working capital requirements. The proposed private placement is expected to be completed in 3Q2017. (Bursa Malaysia) Water and waste-water management company Salcon Bhd expects its new investments in technology services and e-commerce may take some time to generate revenue as it shall only be able to contribute positive returns to its bottom line in FY18. (The Edge) Page 4 of 8
  7. TA Securities 15-Jun-17 A Member of the TA Group News In Brief Economy Asia Malaysia Initiates Special Palm Oil Mission to EU Malaysia initiated a special palm oil mission to the European Parliament in Strasbourg , France, on June 12-13 to discuss the European Union's (EU) resolution on palm oil and deforestation. The mission, led by Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong, discussed with EU Commissioners and Members of European Parliament (MEPs) regarding the resolution. During the mission, Mah had engaged discussions with MEPs, including the EU Commissioner of Environment, Maritime Affairs and Fisheries, Karmenu Vella and chairman of Industry, Research and Energy Committee, MEP Jerzy Buzek. "The bilateral meetings focused on the European Commission's proposed follow-up actions arising from the adoption of the European Parliament Resolution on Palm Oil and Deforestation of Rainforests on April 4, 2017," said Mah in a statement on Wednesday. During the meetings, Mah explained Malaysia's position, national policies and various actions adopted throughout the industry to ensure Malaysia would remain the world leader in achieving the UN Sustainable Development Goals, particularly in relation to the oil palm industry. (The Star) IMF Boosts China GDP Growth Forecast to 6.7% China must speed up economic reforms while it still has a buffer of stable growth, the International Monetary Fund warned in its annual review of the world’s second-largest economy. “Reform progress needs to accelerate to secure medium-term stability”, and to lower the risk of a “sharp adjustment”, the IMF said in its Article IV report. However, the IMF acknowledged, “some near-term risks had receded” as a result of continuing tightening in the financial and housing markets. The IMF forecast China’s gross domestic product to grow 6.7% this year — edging up from a previous estimate of 6.6% — falling to 6.4% between 2018 and 2020, in line with government forecasts. However, the IMF warned that steady growth required “deep reforms to transition from the current growth model that relies on credit-fed investment and debt”, according to David Lipton, IMF first deputy managing director. (Financial Times) China Retail Sales, Industrial Output Growth Static as Investment Softens The pace of growth in China’s retail sales and industrial output was unchanged in May as fixed-asset investment deteriorated further, suggesting little improvement as the second quarter wears on. Retail sales grew 10.7% year on year in May, unchanged from April and just above a median estimate of 10.6% growth from economists surveyed. Online sales growth for the year to date accelerated to 26.5% in May, compared to growth of 25.9% for the four months ended April. But sales growth at larger enterprises remained static from a month prior at 10.7%. Urban fixed-asset investment grew 8.6% year on year during the five months ending May 31, down from growth of 8.9% in the year ended April and missing expectations of an 8.8% rise. Investment by state-controlled firms fell back to 12.6% growth after rising in April to almost 14%. Deceleration in private investment growth eased in May, with a rise of 6.8% representing a drop of only 0.1%, compared to April’s fall of 0.8 percentage points. Together the two figures suggest a more rapid tightening in state spending as private investment growth stabilises, albeit near its lowest level for the year to date. Industrial production was static in May as well, growing 6.5%year on year, and besting expectations it would slow to 6.3%. (Financial Times) Japan's Industrial Production Rises as Estimated Japan's industrial production expanded as initially estimated in April, final data from the Ministry of Economy, Trade and Industry showed. Industrial output grew 4% month-onmonth in April, in line with the preliminary estimate published on May 31. Production had declined 1.9% in March. In April, shipping and stock advanced 2.7% and 1.5%, respectively as previously estimated. Compared to previous year, industrial production grew 5.7% in April. The capacity utilization increased 4.3% on a monthly basis, reversing a 1.6% fall in March. (RTT News) Page 5 of 8
  8. TA Securities 15-Jun-17 A Member of the TA Group Australia 's Consumer Confidence Remains Stable Australia's consumer confidence held steady during the week ended June 11, after rising in the previous three weeks, a weekly survey compiled by the ANZ bank and Roy Morgan Research showed. The consumer confidence index remained unchanged at 112.9 last week, following the release of the disappointing Q1 GDP result. Households' expectations regarding their own financial conditions in the next 12 months improved during the period, with the corresponding index rising to 123.5 from 121.5 in the prior month. Their current financial conditions jumped 9.4 percent bringing the index to its highest level in 14 weeks. The weekly inflation expectations series ticked down to 4.0% last week. The four-week moving edged down to 4.2%. (RTT News) Economists Raise 2017 Singapore Growth Forecast Economists raised their forecasts for Singapore's growth this year, compared to three months ago, as they upgraded their views on manufacturing and bank lending, a central bank survey showed on Wednesday. The median forecast of 21 economists surveyed by the Monetary Authority of Singapore (MAS) was for gross domestic product (GDP) to grow 2.5% in 2017, up from the 2.3% estimated in the previous survey, published in March. That would mark a pick-up from 2.0% growth in 2016, and would be at the upper end of the government's forecast range. The trade and industry ministry said in May that full-year 2017 GDP growth is likely to come in higher than 2.0% "barring the materialisation of downside risks", but kept its official GDP growth forecast unchanged at a range of 1%-3%. Economists now expect the manufacturing sector to expand 5.0% in 2017, up from 4.5% seen in the March survey. They also upgraded their view on bank loans, which are seen increasing 6.2% in 2017. The previous median forecast was 3.2% growth. Non-oil domestic exports are expected to grow 5.6% in 2017, down from the previous median forecast of 6.1%. Other forecasts that were trimmed include construction, now expected to grow 0.2% compared to 0.3% previously. The survey's median forecast for year-on-year GDP growth in the second quarter was 2.7%, up from the previous median of 2.5%. Singapore's GDP expanded 2.7% in the first quarter from a year earlier, but contracted 1.3% from the previous three months on an annualised and seasonally adjusted basis. The central bank's core inflation gauge was expected to rise 1.5% for the whole of 2017, unchanged from the previous survey. (The Star) United States Fed Raises Rates, Maintains Forecast for One More Hike Federal Reserve officials forged ahead with an interest-rate increase and additional plans to tighten monetary policy despite growing concerns over weak inflation. Policy makers agreed to raise their benchmark lending rate by 25 basis points for the third time in six months, maintained their outlook for one more hike in 2017 and set out some details for how they intend to shrink their $4.5 trillion balance sheet this year. In a press conference after the decision was announced, Fed Chair Janet Yellen said the unwinding plan could be put into effect “relatively soon” if the economy evolves as the central bank expects. Policy makers also issued forecasts showing another three quarter-point rate increases in 2018, similar to the previous projections in March. The Fed’s actions and words struck a careful balance between showing resolve to continue tightening in response to falling unemployment while acknowledging the persistence of unexpectedly low inflation this year. In a separate statement, the Fed spelled out the details of its plan to allow the balance sheet to shrink by gradually rolling off a fixed amount of assets on a monthly basis. The initial cap will be set at $10 billion a month: $6 billion from Treasuries and $4 billion from mortgagebacked securities. The caps will increase every three months by $6 billion for Treasuries and $4 billion for MBS until they reach $30 billion and $20 billion, respectively. Officials didn’t reveal the exact timing of when the process will begin this year, as well as specifically how large the portfolio might be when finished. The FOMC retained language that it expects to keep raising interest rates at a “gradual” pace if economic data play out in line with forecasts. Wednesday’s decision brings the Fed’s target for the federal funds rate, which covers overnight loans between banks, to a range of 1% to 1.25%. The vote was 8-1, with Page 6 of 8
  9. TA Securities 15-Jun-17 A Member of the TA Group Minneapolis Fed President Neel Kashkari dissenting from a rate increase for the second time this year , preferring no change. Quarterly projections for 2018 and 2019 showed Fed policy makers largely maintained their expected path for borrowing costs. The median forecast still has the central bank making three quarter-point increases in 2018; the end2019 rate is seen at 2.9%, a slight change from 3% in the March projections. (Bloomberg) U.S. Consumer Prices Down 0.1% in May Consumer prices fell slightly in May, a sign that inflation pressures remain muted. The consumer-price index, which measures what Americans pay for everything from dog food to doctors’ visits, declined a seasonally adjusted 0.1% in May from the prior month, the Labor Department said. Excluding the often-volatile categories of food and energy, so-called core prices rose 0.1% from April. Economists surveyed by The Wall Street Journal had expected overall prices to hold steady and core prices to rise 0.2% on the month. From a year earlier, consumer prices rose 1.9%, marking the third straight month annual gains have eased. Prices were up 1.7% on the year when excluding food and energy. The report is the Federal Reserve’s last peek at inflation before officials conclude a two-day policy meeting Wednesday afternoon. The central bank is expected to raise short-term interest rates in response to steady job creation and low unemployment. While the labor market appears strong, inflation has softened in recent months. The Fed’s preferred gauge, the price index for personal consumption expenditures, poked above the central bank’s 2% target in February but settled down to 1.7% in April, the most recent month of data available. The Fed is tasked with maintaining full employment and stable prices. The consumer price index tends to run a little bit higher than the personal consumption index, reflecting different methods for calculating inflation. Both gauges have followed the same pattern, with price gains peaking in February and then easing. In the May CPI report, gasoline was the main culprit behind falling prices. The gasoline index decreased 6.4% from April, but was up 5.8% from a year earlier. Food prices climbed 0.2% last month, and were up 0.9% from a year earlier. Shelter costs—which account for about a third of the overall price index—increased 0.2% on the month and rose 3.3% on the year. (The Wall Street Journal) U.S. Retail Sales Fell 0.3% in May Americans broadly reduced spending at retailers in May, dealing the latest setback to an economy struggling to shift into faster growth. Retail sales—measuring consumer spending at stores, restaurants and online—fell 0.3% from a month earlier, the Commerce Department said. That was the steepest drop since January 2016. Economists surveyed by The Wall Street Journal had expected no change in the sales level. The decline was driven by fewer car purchases and less spending at service stations after a drop in gasoline prices. Excluding cars, sales fell 0.3%. Excluding cars and gasoline stations, sales were flat. The figures suggest Americans remain cautious despite steady job growth, low unemployment, modest wage gains and a booming stock market. The report also signals economic output is struggling to rebound after a sluggish winter. Retail sales are a big component of consumer spending, which is in turn the biggest source of economic demand in the U.S. Monthly retail sales figures are volatile, and over a broader period retail sales are slowly rising. Sales climbed 3.9% in the first five months of this year compared with the same period in 2016. But many retailers are seeing a slowdown of late. Car sales slipped last month from April and fell nearly 2% in March through May compared with the prior three months. Spending fell sharply at department stores and electronic stores in May from April. Sales slipped at general merchandise stores. Conversely, sales continued to rise at online retailers, and climbed steadily at furniture and clothing outlets. (The Wall Street Journal) Europe and United Kingdom U.K. Jobless Rate Steady at 42-Year Low; Wage Growth Eases The UK unemployment rate remained unchanged at the lowest level since 1975, but wage growth remained subdued squeezing household spending. The ILO jobless rate came in at 4.6% in the three months to April, the same rate as seen in the three months to March, data from the Office for National Statistics showed. The rate came in line with economists' expectations. At the same time, the employment rate was 74.8%, the joint highest since comparable records began in 1971. The number of unemployed decreased by 50,000 from Page 7 of 8
  10. TA Securities 15-Jun-17 A Member of the TA Group January to 1 .53 million. Employment rose by 109,000 sequentially to 31.95 million. The claimant count held steady at 2.3% in May and the number of people claiming benefits rose by 7,300 from April. In nominal terms, average earnings including bonus increased 2.1% versus 2.3% in the January to March period. The expected rate was 2.4%. Excluding bonus, wages increased 1.7%, the weakest since the start of 2015. Real earnings fell 0.6%. Data released showed that inflation rose to 2.9% in May, the highest in almost four years. RTT News) Eurozone Industrial Production Rises as Expected Eurozone industrial production increased for the second straight month in April, in line with expectations, data from Eurostat showed. Industrial production climbed a seasonally adjusted 0.5% month-over-month in April, faster than the 0.2% rise in March, which was revised from a 0.2% drop reported earlier. The figure also matched consensus estimate. Among components, energy production grew the most by 4.7% over the month. Production of durable consumer goods rose 0.6%, while those of capital goods registered a decline of 0.7%. On a yearly basis, industrial production rose 1.4% in April, slower than the 2.2% gain in the prior month. The March figure was revised up from 1.9%. Separately, employment hit a record high in both the euro area and the EU28 in the first quarter of the year amid sustained growth in the figures, preliminary data from Eurostat showed. The number of employed totaled a seasonally adjusted 154.8 million for the Eurozone and 234.2 million for the EU28 during the first quarter. Both figures were the highest ever. The employment figure grew by 0.4% quarter-on-quarter in both the euro area and the EU28. In the fourth quarter of 2016, employment rose 0.4% in both regions. On a year-on-year basis, employment grew 1.5% in Eurozone and 1.4% in the EU28. That is after 1.4% and 1.1% gains, respectively, in the previous three months. (RTT News) German Inflation Slowest in 6 Months Germany's consumer price inflation slowed to a six-month low in May, as initially estimated, data from the statistical office Destatis showed. Inflation eased to 1.5% in May from 2% in April. This was the lowest since November, when the rate was 0.8%. On a monthly basis, consumer prices fell 0.2% after staying flat in April. Both annual and monthly figures matched the preliminary estimate published on May 30. Energy price inflation more than halved to 2% from 5.1%. Prices of goods moved up 1.8% and services cost gained 1.2%. The harmonized index of consumer price, or HICP, climbed 1.4%, the weakest since November, versus 2% rise in April. The rate came in line with flash estimate. Month-on-month, the HICP slid 0.2% as estimated. (RTT News) Share Buy-Back: 14 June 2017 Company AMPROP GRANFLO Bought Back Price (RM) Hi/Lo (RM) 60,000 10,000 0.805/0.80 0.23 0.805/0.79 0.23/0.225 Total Treasury Shares 13,729,100 6,248,800 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 8 of 8 We accept no We, our associates, directors, employees may have an interest in
  11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR UMW Share Price (RM) 14-Jun-17 2.01 2.25 6.03 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 19.4 9.4 30.7 12.7 8.9 20.2 5.8 4.0 2.2 7.9 4.0 3.2 2.44 2.70 7.00 -17.6 -16.7 -13.9 1.95 1.95 4.43 3.1 15.4 36.1 -5.6 5.1 31.9 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 12.1 9.1 11.4 13.6 15.2 13.1 14.9 10.1 26.0 13.3 8.0 10.4 12.3 14.0 11.7 14.5 9.5 26.8 4.0 3.0 3.5 3.0 2.7 5.2 2.7 2.4 3.2 4.0 3.0 3.6 3.3 2.7 5.2 2.8 2.4 3.2 4.49 3.00 5.70 6.87 15.74 9.68 20.58 5.59 11.14 -9.8 -11.3 -12.1 -2.0 -2.2 -0.7 -0.9 -8.8 -5.9 3.60 2.08 3.90 4.11 12.70 7.50 19.02 4.53 8.20 12.5 27.9 28.5 63.7 21.3 28.1 7.3 12.6 27.8 8.9 11.3 16.2 49.2 14.1 17.2 3.4 8.3 18.4 0.42 1.29 5.39 3.49 0.67 1.13 2.00 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 7.3 8.8 17.1 22.8 13.5 13.6 15.8 17.8 14.0 7.3 9.6 14.8 17.2 11.7 11.7 15.9 17.7 12.9 0.0 2.2 2.2 2.1 3.7 0.9 2.8 1.4 4.3 0.0 2.2 2.2 2.7 3.7 0.9 2.8 1.4 4.3 0.51 1.35 5.48 3.61 0.74 1.14 2.15 2.48 6.15 -18.6 -4.6 -1.6 -3.3 -8.8 -0.9 -7.0 -14.3 -4.4 0.36 0.80 4.65 3.07 0.33 0.41 1.50 1.46 5.55 15.3 62.1 15.9 13.7 103.0 179.0 33.3 45.1 5.9 -4.6 22.9 12.8 9.1 10.7 96.5 17.6 23.3 0.0 2.04 2.00 0.47 11.0 11.5 18.6 17.7 4.9 4.9 2.19 -6.8 1.93 5.7 1.5 14.80 19.00 17.84 21.08 0.50 0.57 74.8 93.1 81.3 19.8 101.9 20.4 18.2 18.7 5.0 4.4 5.5 4.8 15.30 19.10 -3.3 -0.5 12.90 14.86 14.7 27.9 6.3 16.0 2.23 7.50 24.64 1.24 82.58 3.55 1.89 4.84 0.93 2.23 8.62 27.41 1.39 88.66 4.10 2.50 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 27.5 15.7 9.3 7.9 30.5 148.1 6.2 326.2 24.7 27.5 16.6 12.7 33.2 28.4 20.4 20.4 28.1 15.9 6.9 30.8 10.0 28.3 24.6 16.6 19.9 25.3 14.4 6.9 29.1 7.3 1.8 4.0 2.8 4.8 3.3 4.2 3.2 0.9 5.4 2.1 4.7 3.0 4.8 3.4 4.8 4.2 1.0 5.4 3.00 8.89 27.00 1.35 83.68 3.66 2.04 5.00 1.07 -25.7 -15.6 -8.7 -8.0 -1.3 -2.9 -7.4 -3.2 -13.1 2.11 7.30 22.44 1.13 74.12 2.12 1.43 4.14 0.78 5.7 2.7 9.8 9.6 11.4 67.4 32.2 16.8 19.2 -13.2 2.3 4.9 7.7 5.6 39.8 9.2 11.7 17.0 45.50 52.08 1.05 198.6 187.4 22.9 24.3 4.4 4.4 55.64 -18.2 40.61 12.1 3.0 9.86 5.85 11.53 6.58 1.34 1.28 49.3 25.7 55.5 27.9 20.0 22.8 17.8 21.0 0.5 1.4 0.6 1.5 10.00 6.38 -1.4 -8.3 7.50 4.19 31.5 39.5 24.1 29.5 2.63 0.12 3.81 0.13 0.74 1.26 22.1 0.4 24.6 0.4 11.9 33.1 10.7 33.2 6.1 0.0 7.2 0.0 3.42 0.16 -23.1 -25.0 2.48 0.05 6.0 140.0 -11.1 140.0 6.00 4.19 6.65 4.70 0.78 0.52 10.3 13.3 16.4 16.5 58.2 31.4 36.6 25.4 0.6 1.5 0.7 1.8 6.73 4.37 -10.8 -4.1 5.54 3.85 8.3 8.8 -5.5 0.2 6.86 6.53 2.03 5.84 1.84 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 34.3 18.2 16.4 22.0 49.3 28.3 16.1 13.3 19.3 30.4 1.3 2.7 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 -3.7 -7.6 -14.7 -1.7 -30.3 4.05 5.62 1.88 4.20 1.65 69.4 16.2 8.0 39.0 11.5 42.0 -0.9 -3.8 9.2 -22.0 INDUSTRIAL SCIENTX SKPRES 8.34 1.34 9.69 1.90 0.55 0.50 54.4 8.6 66.4 11.4 15.3 15.6 12.6 11.8 2.5 3.1 2.9 4.1 8.99 1.44 -7.2 -6.9 5.96 1.12 39.9 19.6 24.5 3.9 MEDIA ASTRO MEDIA PRIMA STAR 2.70 0.95 2.21 3.45 0.60 1.40 1.03 0.65 0.64 13.2 1.7 7.1 14.5 2.8 6.5 20.4 55.4 31.2 18.7 33.4 34.1 4.6 1.4 8.1 4.8 2.4 8.1 3.01 1.52 2.70 -10.3 -37.8 -18.1 2.51 0.94 2.20 7.6 0.5 0.5 3.8 -17.8 -1.3 0.19 0.84 7.03 0.44 6.16 1.29 0.51 218.4 1.8 4.6 39.1 17.2 49.6 1.0 137.3 -6.6 0.0 36.0 3.4 19.1 -41.1 1.30 33.8 2.4 BANKS & FINANCIAL SERVICES AFG 4.05 AFFIN 2.66 AMBANK 5.01 CIMB 6.73 HLBANK 15.40 MAYBANK 9.61 PBBANK 20.40 5.10 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 0.61 0.70 1.03 3.5 4.3 17.4 14.2 1.7 1.7 0.69 -12.3 MHB 0.86 0.95 1.84 -1.2 1.3 na 65.3 0.0 0.0 1.17 -26.9 MISC 7.35 7.65 0.82 61.4 54.7 12.0 13.4 4.1 4.1 7.90 -7.0 PANTECH 0.61 0.69 1.28 4.1 5.0 14.6 12.1 3.0 3.3 0.67 -9.0 PCHEM 7.22 7.91 1.07 39.2 41.6 18.4 17.3 2.9 3.0 7.80 -7.4 SENERGY 1.93 2.02 2.46 9.6 7.2 20.0 26.7 0.5 0.5 2.10 -8.1 UMWOG 0.52 0.80 2.01 -12.0 -3.6 na na 0.0 0.0 1.04 -50.5 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
  12. 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 1.74 3.12 4.49 24.80 9.62 6.10 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 41.2 25.4 24.0 22.2 28.3 18.7 20.5 19.8 21.4 20.8 25.6 17.7 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 -31.0 -15.7 -6.7 -2.7 -0.4 -6.3 1.42 3.00 4.21 22.72 7.30 5.53 22.5 4.0 6.7 9.2 31.8 10.3 12.3 -8.2 2.0 3.3 18.8 1.7 0.69 1.07 0.90 2.12 1.58 0.87 4.90 3.82 3.73 0.69 1.07 0.92 2.25 1.70 0.98 5.98 4.10 3.95 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 11.7 15.6 7.0 17.4 10.2 17.4 14.2 10.3 22.8 12.6 15.9 19.9 6.2 18.4 12.2 10.9 14.1 14.9 31.9 17.1 9.8 6.1 8.8 12.2 11.1 8.4 16.8 29.6 16.7 5.8 3.7 3.9 3.3 4.1 1.1 3.7 1.3 6.7 5.8 3.3 4.4 3.5 4.1 1.1 3.7 1.3 6.8 0.83 1.43 1.05 2.46 1.70 1.00 5.19 4.50 3.73 -17.0 -25.3 -14.3 -13.8 -7.1 -13.0 -5.6 -15.1 0.0 0.67 1.05 0.79 1.85 1.34 0.69 4.32 2.80 2.84 3.0 1.9 14.6 14.8 17.9 26.1 13.4 36.4 31.3 -1.4 -5.3 -10.0 8.7 10.5 8.7 10.8 22.0 24.3 1.75 1.54 1.86 1.72 0.51 0.56 8.9 8.1 10.1 8.6 19.7 19.1 17.3 17.9 5.1 5.5 5.8 5.8 1.84 1.72 -4.9 -10.5 1.60 1.45 9.4 6.2 1.7 0.7 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.14 24.24 18.90 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 16.0 24.6 21.4 10.9 17.8 17.8 23.7 18.7 11.0 13.7 6.1 3.0 3.3 3.0 6.8 6.1 3.1 3.7 3.2 6.8 1.80 25.70 22.66 14.90 1.64 -36.7 -5.7 -16.6 -3.5 -11.0 1.13 22.92 18.10 13.00 1.38 0.9 5.8 4.4 10.6 5.8 -16.8 1.8 -11.3 3.5 -2.0 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 4.98 4.97 6.08 6.57 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 23.8 24.2 30.6 29.9 23.6 23.9 29.5 1.5 4.2 3.3 2.9 1.7 4.2 3.3 3.1 5.99 5.19 6.60 6.90 -16.9 -4.2 -7.9 -4.8 4.11 4.55 5.50 5.81 21.2 9.2 10.5 13.1 5.5 2.9 1.7 10.4 TECHNOLOGY Semiconductor & Electronics IRIS 0.15 INARI 2.07 MPI 13.22 UNISEM 3.59 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 20.1 115.7 14.0 29.1 13.3 na 16.4 11.4 12.3 0.0 3.9 2.0 3.3 0.0 2.4 2.0 3.3 0.24 2.23 13.50 3.70 -37.5 -7.2 -2.1 -3.0 0.10 1.41 7.02 2.27 50.0 47.1 88.3 58.1 36.4 24.7 78.4 52.1 3.42 8.99 3.23 8.10 1.12 1.48 37.6 17.2 35.9 17.5 9.1 52.2 9.5 51.4 1.2 1.1 1.5 1.1 3.59 9.45 -4.7 -4.9 2.16 5.76 58.3 56.1 49.3 48.3 1.81 3.75 2.05 4.05 0.74 0.67 14.3 17.1 22.7 15.1 12.6 21.9 8.0 24.8 2.4 3.4 3.9 3.0 1.87 4.59 -3.2 -18.3 1.27 3.62 42.5 3.6 13.8 -12.8 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 20.59 OCBC 10.72 UOB 23.68 PLANTATIONS WILMAR IFAR 3.52 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 11.9 92.4 12.2 209.3 12.1 10.8 11.6 11.3 2.9 5.7 3.0 2.9 6.7 3.0 21.2 10.8 24.0 -2.8 -0.4 -1.4 14.72 8.84 17.41 39.9 30.4 36.0 18.7 20.2 16.1 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 -12.0 -19.3 2.96 0.44 18.9 9.1 -1.9 -8.6 12.2 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.
  13. RESULTS UPDATE TA Securities Thursday , June 15, 2017 FBMKLCI: 1,792.35 Sector: Media A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Astro Malaysia Holdings Berhad TP: RM3.45 (+27.8%) Last Traded: RM2.70 Nurturing NJOI ARPU BUY THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Paul Yap, CFA Tel: +603-2167 9603 paulyap@ta.com.my Review Astro started its 1QFY18 with a core net profit of RM186mn (-1.6% QoQ, +14.1% YoY). Results were within ours and consensus estimates at 24.7% and 25.9%. Its first interim dividend was unchanged from the previous year at 3.0sen/share. Continued challenges in the external environment led to a sequential decline in subscription revenues (-2.6% QoQ) and adex (-21.0% YoY). Adex was also impacted by CNY revenue recorded in the prior quarter. Subscription revenues are expected to be flattish for the year, while adex numbers appear to be healthier going into the 2Q. Earnings for the quarter stood flattish, aided by lower opex (-8.9% QoQ) and depreciation (-6.3% QoQ). YoY. Revenue moderated 2.7% YoY, mainly due to lower licensing income as its B2B sports channel sub-licensing had ended. Subscription revenue fell marginally by 1.0% YoY. We believe this was attributed to Pay TV subscriber churns as ARPU expanded 1.8% YoY to RM100.8. Instead, growth in its TV customer base (+255k) mainly stemmed from NJOI subscribers. Household penetration improved 2pp to 71%. Immediate initiatives are to monetise its NJOI base, with ARPU still low at RM2.50. Despite market share gains, adex decreased 4.7% YoY due to the soft consumer sentiment. Its TV adex and radex share increased to 39% (+5pp) and 76% (+4pp) respectively. Given indications of healthier numbers in the second quarter, we still expect adex growth for the full year. Go Shop revenue decreased 3.1% YoY due to tactical campaigns executed during the quarter. EBITDA losses widened to RM5.0mn vs. RM1.8mn a year ago – attributing to costs for its Singapore operations. Its home shopping business is on track to be EBITDA positive for the year. EBITDA decreased 3.5% YoY. Content costs declined 1.0% YoY. Due to the absence of major sporting events, we expect lower content costs for the year. 80% of content costs have been hedged at rates lower than the existing spot rates. www.taonline.com.my Share Information Bloomberg Code ASTRO MK Stock Code 6399 Listing Main Market Share Cap (mn) 5209.5 Market Cap (RMmn) 14,065.7 52-wk Hi/Lo (RM) 3.01/2.51 12-mth Avg Daily Vol ('000 shrs) 1954.3 Estimated Free Float (%) 41.6 Beta 1.0 Major Shareholders (%) Pantai Cahaya Bulan Ventures - 20.7 All Asia Media Equities Limited - 19.5 E Asia Broadcast Network Systems - 8.1 EPF- 6.3 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY18 753.8 718.7 104.9 FY19 739.9 772.3 95.8 Buy (Maintained) Financial Indicators FY18 4.1 40.3 6.7 11.8 111.0 (0.3) (10.3) FY19 3.8 40.6 6.7 11.2 97.3 (0.3) (10.4) vs TA vs Consensus % of FY 24.7 25.9 Within Within Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth ASTRO (1.5) (4.3) (1.1) (3.6) FBM KLCI 0.8 4.4 9.5 10.1 Net Gearing (%) CFPS (sen) P/CFPS (x) ROE (%) ROA (%) NTA/Share (RM) P/NTA (x) Scorecard (12-Mth) Share Price relative to the FBM KLCI Impact We leave our earnings forecasts unchanged. Outlook The Pay TV segment is anticipated to remain challenging. Pay TV subscribers are expected to be flattish at 3.4-3.5mn. However, a slight Pay TV ARPU uplift to RM102-103 is expected from take up of value added product and services. Instead, immediate growth opportunities will stem from home shopping, adex and NJOI revenues. Its 1.7mn NJOI subscribers represent a sizeable opportunity, with NJOI ARPU still low at RM2.50. NJOI ARPU is estimated to quadruple to RM8-10 over the next five years – driven by a take up of on demand content. Page 1 of 4 Source: Bloomberg
  14. TA Securities 15-Jun-17 A Member of the TA Group Valuation Rolling forward our valuations to CY18 , we increase our TP for Astro to RM3.45/share (from RM3.20/share). This is based on a DCF valuation with WACC at 7.0% and long term growth rate of 1.0%. We continue to like the stock for its dominant Pay TV position and resilient revenues. We believe existing valuations are inexpensive, as the stock trades 1SD below its historical forward PE and EV/EBITDA. Dividends are similarly attractive at 4.8-5.2%. BUY. Figure 1: Forward PE Figure 2: Forward EV/EBITDA x x 32.0 11.5 30.0 11.0 +1sd: 28.8x 28.0 10.5 26.0 10.0 Mean: 24.7x 9.0 Source: Companies, TA Securities Source: Companies, TA Securities Table 1: Earnings Summary (RMmn) FYE Jan 31 (RMmn) FY16 Revenue 5,475.4 EBITDA 1,940.7 Depreciation & amortisation* (825.8) EBIT 1,114.9 Net finance costs (293.8) Share of associates 8.3 EI 0.0 PBT 829.4 Taxation (221.4) MI 7.4 Net profit 615.3 Core net profit 656.1 EPS (sen) 12.6 PE (x) 21.4 EV/EBITDA (x) 8.6 DPS (sen) 12.0 Dividend yield (x) 4.4 *excludes amortisation of film library and programme rights FY17 5,612.6 1,816.7 (721.5) 1,095.2 (236.3) 1.8 (15.1) 845.5 (228.5) 6.7 623.7 689.9 13.3 20.4 9.2 12.5 4.6 Page 2 of 4 FY18F 5,827.4 1,922.4 (687.9) 1,234.5 (234.2) 1.9 0.0 1,002.1 (240.5) (7.8) 753.8 753.8 14.5 18.6 8.7 13.0 4.8 FY19F 6,107.2 1,902.0 (674.4) 1,227.7 (236.7) 2.0 0.0 992.9 (238.3) (14.7) 739.9 739.9 14.2 19.0 8.8 13.5 5.0 FY20F 6,442.2 2,006.1 (675.8) 1,330.3 (238.8) 2.0 0.0 1,093.6 (262.5) (24.5) 806.7 806.7 15.5 17.4 8.3 14.0 5.2 Feb-17 May-17 Aug-16 Nov-16 Feb-16 May-16 Aug-15 Nov-15 Feb-15 May-15 Aug-14 Nov-14 Feb-14 May-14 Aug-13 -1sd: 9.2x Nov-12 Feb-17 May-17 Aug-16 Nov-16 Feb-16 May-16 Aug-15 Nov-15 Feb-15 May-15 Aug-14 Nov-14 Feb-14 May-14 Aug-13 Nov-13 8.0 Feb-13 18.0 May-13 8.5 Nov-12 20.0 Nov-13 -1sd: 20.7x Feb-13 22.0 Mean: 9.8x 9.5 May-13 24.0 +1sd: 10.4x
  15. TA Securities 15-Jun-17 A Member of the TA Group Table 2 : Results Analysis (RMmn) 1QFY17 1,363 1,076 72 150 64 477 (195) 282 57 (61) 2 0 280 (79) 1 202 163 3.9 3.0 23 24 4QFY17 1,397 1,094 62 181 61 444 (171) 274 6 (91) (1) 0 188 (45) 2 145 189 2.8 3.5 116 55 1QFY18 1,326 1,065 56 143 62 460 (160) 301 20 (51) 0 0 270 (77) 4 196 186 3.8 3.0 24 54 QoQ (%) (5.1) (2.6) (8.9) (21.0) 1.6 3.6 (6.3) 9.8 257.1 (43.6) (112.5) n/a 43.5 72.1 66.7 35.0 (1.6) 34.8 (14.3) (79.3) (1.8) YoY (%) (2.7) (1.0) (22.3) (4.7) (3.1) (3.5) (18.0) 6.6 (64.9) (15.5) (94.1) n/a (3.8) (2.3) 250.0 (3.1) 14.1 (3.1) 0.0 4.3 125.0 Profitability ratio EBITDA margin (%) PBT margin (%) Net profit margin (%) Tax rate (%) 35.0 20.5 12.0 28.2 31.8 13.4 13.5 23.9 34.7 20.3 14.0 28.6 2.9 6.9 0.5 4.8 (0.3) (0.2) 2.1 0.4 Operating expenditure Content costs Others 409 676 434 695 405 624 (6.7) (10.2) (1.0) (7.7) 4,898 99 351 5,121 100 n/a 5,153 101 572 32 0.4 n/a 255 1.8 63.0 Revenue Subscription Others Adex Go Shop EBITDA Depreciation and amortisation EBIT Finance income Finance costs Associates and JV EI PBT Tax MI Net profit Core net profit EPS (sen) DPS (sen) Cash capex Capitalised capex Operational info TV Customer Base ('000) ARPU (RM) Connected boxes ('000) Figure 3: TV Households and Penetration Figure 4: TV Customer Base and ARPU '000 7,300 71 7,234 7,250 7,200 % '000 72 6,000 7,100 66 7,050 64 7,000 62 6,950 60 6,900 5,153 70 68 7,150 RM 101 100 5,000 98 4,000 96 3,000 94 2,000 58 Source: Companies, TA Securities Source: Companies, TA Securities Page 3 of 4 1QFY18 4QFY17 3QFY17 2QFY17 1QFY17 4QFY16 3QFY16 90 2QFY16 0 1QFY16 92 4QFY15 1,000 2QFY15 1QFY18 4QFY17 3QFY17 2QFY17 1QFY17 4QFY16 3QFY16 2QFY16 1QFY16 54 4QFY15 6,750 3QFY15 56 2QFY15 6,800 3QFY15 6,850
  16. TA Securities 15-Jun-17 A Member of the TA Group ( T HI S P AGE I S I NT E N T I ON AL L Y L E FT B L ANK) 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
  17. TA Securities R E S U L T S U P D A T E Thursday , June 15, 2017 FBMKLCI: 1,792.35 A Member of the TA Group Sector: Consumer MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Poh Huat Resources Holdings Bhd TP: RM2.50(+32.3%) g Last traded: RM1.89 Strong Q2 Results, Looking at Expansion BUY THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Ooi Beng Hooi Tel: +603-2167 9612 benghooi@ta.com.my Results Review Pohuat’s 1HFY17 net profit of RM28.3mn accounted for 53.0% of our FY17 full-year estimate. We deem the results to be above expectation as Pohuat generally delivers stronger results in 2H of its fiscal year as demand usually peaks in the run-up to Christmas and New Year festivities. The results outperformance was mainly due to higher-than-expected sales volume. No dividend was declared for the reporting quarter, versus an interim dividend of 2sen/share declared in the corresponding quarter last year. YoY, 1HFY17 net profit surged 57.0% to RM28.3mn, boosted largely by increased revenue (+13.0%) and better margins (operating margin +3.1% pts to 11.9%). Sales for both Vietnam and Malaysia segments improved by 8.8% and 22.2% respectively, attributable to favourable forex and introduction of new panel based bedroom sets at its Malaysia factories in 2H16. QoQ, the net profit was 40.0% lower at RM10.6mn due to seasonality. The group generally records slow sales in Q2 due to the Chinese New Year, drop in sales post-Christmas and New Year season, and ahead of the summer holiday in its main target market, US. Revenue contracted 21.9% to RM127.6mn. www.taonline.com.my Share Information Bloomberg Code Bursa 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 (x) Major Shareholders (%) PHR MK POHUAT 7088 Main Market 226.8 428.7 0.50 2.04/1.43 351.3 36.7 0.66 Tay Kim Huat - 24.11 Lim Pei Tiam - 13.30 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus (RM'mn) TA's / Consensus (%) Previous Rating FY17 9.4 58.6 NA FY18 8.5 58.6 NA Buy (Maintained) - Scorecard vs TA vs Consensus % of FY 53.0 na Above na Impact Following the stronger-than-expected results, we raise our plant utilisation rate assumptions and raise FY17/18/19 earnings forecasts by 9.4%, 8.5% and 8.4% respectively. We lower our FY17 dividend assumption from 8sen/share to 6sen/share as no dividend was declared for the reporting period versus our previous estimate of 2sen/share. Financial Indicators FY17 FY18 Net Debt / Equity (%) CFPS (sen) Price / CFPS (x) ROA (%) NTA/Share (RM) Price/NTA (x) net cash (8.8) (21.5) 14.7 1.3 1.5 net cash 12.8 14.8 13.2 1.4 1.3 Outlook With signs of sustained economy recovery and healthy job numbers in the US, coupled with the uptrend in the US housing starts (see Exhibit 1), a bellwether for the group’s furniture exports to US, we expect Pohuat’s earnings prospects to remain robust in the foreseeable future. Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth POHUAT 3.8 (3.1) 16.7 21.2 FBM KLCI 0.9 4.1 9.1 10.2 The group saw demand for its products continued to increase in recent months, especially for its panel based products. The sustained orders are expected for the remainder of FY17. The group is looking at capex to enhance its operations and expand its business. We think the group could be conserving cash for capex. (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg Page 1 of 3
  18. TA Securities 15-Jun-17 A Member of the TA Group Exhibit 1 : US Housing Starts Source: Bloomberg, TA Research Valuation In view of potential lower dividend payout, we reduce the target PE multiple for Pohuat from 12x to 11x. Previously, we upgraded the target PE multiple from 10x to 12x for reasons which included consistent quarterly dividend payout. Subsequent to the earnings forecasts revision, we tweak the target price slightly lower from RM2.51 to RM2.50, based on 11x CY18 EPS. Reiterate our BUY call on POHUAT. CY18 net profit Target PE (RMmn) multiple 58.7 11 Valuation (RMmn) 645.7 Proceeds from warrants conversion 53.3 699.0 280.1 2.50 Enlarged share base (mn shares) Target price (RM/share) Earnings Summary FYE Oct (RMmn) Revenue Gross profit EBITDA EBITDA margin EBIT Core PBT PAT Core net profit Core EPS* PER Gross dividend* Dividend yield ROE (%) (sen) (x) (sen) (%) (%) 2015 453.9 90.4 56.5 12.4 54.5 52.6 39.2 44.4 20.8 9.1 5.0 2.6 23.0 2016 535.2 107.0 68.0 12.7 60.4 56.4 47.1 44.9 20.1 9.4 8.0 4.2 19.6 2017F 615.6 129.3 82.3 13.4 73.2 72.1 58.6 58.6 25.1 7.5 6.0 3.2 21.7 2018F 620.3 130.3 84.6 13.6 74.8 74.3 58.6 58.6 24.1 7.8 8.0 4.2 18.2 Note: *Adjust for 1 into 2 share split in Oct 2015 Page 2 of 3 2019F 625.2 131.3 86.8 13.9 76.4 76.1 59.1 59.1 23.3 8.1 8.0 4.2 15.9
  19. TA Securities 15-Jun-17 A Member of the TA Group 2QFY17 Results Analysis FYE Oct (RMmn) Revenue Cost of Sales Gross profit Operating profit Finance Costs Core PBT Income tax expense Non-controlling interests Net profit Core net profit Reported EPS (sen) EPS (sen) Dividend (sen) Margin (%): - PBT - PAT - Effective tax rate 2Q16 1Q17 106.5 163.5 (89.6) (129.1) 16.8 34.3 6.0 20.0 (0.5) (0.5) 5.5 19.5 (1.7) (2.0) (0.1) (0.2) 3.9 17.7 3.9 17.7 1.8 1.8 2.0 8.3 8.3 2.0 5.1 3.5 30.9 11.9 10.7 10.2 2Q17 QoQ (%) YoY (%) 127.6 (21.9) 19.9 (99.2) (23.2) 10.6 28.5 (17.0) 69.3 14.6 (27.0) 144.2 (0.4) (20.9) (30.0) 14.2 (27.1) 160.4 (3.7) 87.9 121.2 (0.1) (22.0) 13.5 10.6 (40.0) 173.6 10.6 (40.0) 173.6 5.0 5.0 0.0 (40.0) (40.0) (100.0) 173.1 173.1 (100.0) 11.1 8.2 26.2 % pts (0.8) (2.5) 16.0 % pts 6.0 4.7 (4.6) 6MFY16 6MFY17 YoY (%) 257.5 291.1 13.0 (208.1) (228.3) 9.7 49.4 62.8 27.1 22.7 34.5 52.4 (1.0) (0.8) (17.5) 21.7 33.7 55.5 (3.9) (5.7) 47.4 (0.2) (0.3) 29.0 18.0 28.3 57.0 18.0 28.3 57.0 8.4 8.4 4.0 8.4 6.9 17.9 13.3 13.3 2.0 57.0 57.0 (50.0) 11.6 9.6 16.9 % pts 3.2 2.7 (0.9) 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 COMPANY UPDATE Thursday , 15 June 2017 FBMKLCI: 1,792.35 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 Sunway Berhad TP: RM3.95, ex-bonus: RM1.69 (+5.9%) Aiming Big in Other Business Segments Last Traded: RM3.73, ex-bonus: RM1.60 Hold THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Thiam Chiann Wen Tel: +603-2167 9615 cwthiam@ta.com.my Yesterday, Sunway hosted a briefing to provide an update on the group’s sector reclassification and its strategic direction moving forward. We are upbeat on the group’s ambition to grow its non-property related business particularly healthcare services. We like the group’s on-going efforts to add value to its township development. The group also announced a 4-for-3 bonus issue and 3-for-10 bonus warrants, which we think will help improve trading liquidity. Assigning a higher P/E to the group’s healthcare earnings and removing the 10% holding company discount, our SOP-derived target price is now revised to RM1.69/share (ex-bonus). Maintain Hold as we believe the recent run up in share price has already factored in the positives. i n www.taonline.com.my Share Information Bloomberg Code SWB MK Stock Name Sunway Stock Code 5211 Listing Main Market Share Cap (mn) 2037.4 Market Cap (RMmn) 7599.6 Par Value 1.00 52-wk Hi/Lo (RM) 3.73/2.84 12-mth Avg Daily Vol ('000 shrs) 1484.40 Estimated Free Float (%) 29.0 Beta 0.5 Major Shareholders (%) Sungei Way Corp (56.6) A Trading and Services Counter Now Sunway Bhd has been re-classified to Trading/services sector from Properties sector recently. Management believe it is timely and appropriate for Sunway to be re-classified under the Trading / Services sector to better reflect the group’s strategic business direction and ambitions. Going forward, the group intends to grow its non-property related businesses such as Healthcare, Trading & Manufacturing, Leisure, Quarry and Building Materials to become market leaders in their respective sectors. Specifically, the healthcare division is the key division as Sunway is targeting to spend about RM1bn to set up 5 new hospitals in the Klang Valley, Penang and Ipoh – see Figure 1. This could potentially increase the group’s total beds from 618 beds (includes 245 beds in Sunway Medical Centre to be completed by end this year) to >1,700 beds by 2020. We gather that the 2017 projected net profit from the healthcare division to range between RM45 and RM50mn. Potential listing of its healthcare division is a re-rating catalyst. Focusing on creating value to its township development Citing the outlook of the property market, particularly in the Iskandar region, management acknowledged that the market environment remains challenging at this juncture. Sentiment is affected by oversupply fears with huge influx of high-end high rise developments being undertaken by Mainland Chinese Developers. However, Sunway is committed to turn its 1,800 acres Sunway Iskandar township into a world-class city in harmony with nature, making it “Nature’s Capital City”. Replicating the success of Bandar Sunway, the RM30bn Sunway Iskandar will see full integration of a healthy and versatile environment, world-class education, excellent infrastructure and progressive healthcare services within the township development. 4-for-3 bonus issue and 3-for-10 bonus warrants Rewarding shareholders, the group has proposed a bonus issue of: i) up to 2.8bn new ordinary shares on the basis of 4 bonus share for every 3 existing Sunway shares, and ii) 631mn free warrants on the basis of 3 warrants for every 10 Sunway shares held on the same entitlement date. The warrant will be issued at no cost to the entitled shareholders of Sunway and the exercise price of the warrant will be determined at a later date. The proposals are expected to be completed by the 2HCY17. Page 1 of 4 EPF (4.61) Forecast Revision FY17 FY18 0.1 1.3 Net profit (RMm) 562.3 607.2 Consensus (RMm) 561.6 599.3 TA's / Consensus (%) 100.1 101.3 Forecast Revision (%) Previous Rating Hold (Maintained) Financial Indicators FY17 FY18 Net Debt / Equity (%) 36.2 34.9 FCPS (sen) 25.8 13.8 Price / CFPS (x) 6.2 11.6 ROA (%) 3.0 3.3 NTA/Share (RM) 1.5 1.5 Price/NTA (x) 1.1 1.1 Share Performance (%) Sunway FBM KLCI 1 mth 6.9 0.8 3 mth 19.6 4.4 6 mth 25.6 9.5 12 mth 25.6 10.1 Price Change (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg