Bursa Malaysia Daily Market Report - 16 August

Transcription

1. Thursday , 16 August, 2018 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only N ew s 1. D ai l y M arke t C om men t a ry 2. D ai l y B ri ef Fu nd a me n tal Rep o r ts 1. 2. 3. 4. 5. 6. H u p S e n g In d u s t r ie s B e rh a d : E x p e c t s Ba c k E n d L o a d e d R e su l t s N e s t le (M a l a ys i a ) Be r h a d : C o n su m e r Se n ti m e n t Su p p o r t s Do m e s tic Gro w th P e t ro n a s C h e m ic a ls G ro u p B h d : T a x Bo o st in 2 Q 1 8 P e t ro n a s Ga s Be r h a d : Po t e n t ia l o f N BV A s se t V a lu a tio n f o r T PA T a r if f s P u b l ic Ba n k B e r h a d : R e su lt s W i th in E x p e c ta t io n s S c ie n t e x Be rh a d : E x p a n ds I ts F o o tp rin t s in M e l a k a Te ch n ic al R ep o rt s 1. D ai l y Te ch n ic a l St o ck W at ch , D ai l y Mon e y F lo w , D a il y St oc k Sc reen ( Loc al ) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
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Daily Market Commentary Thursday , 16 August 2018 TA Research, e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (15.08.2018) Volume (mil) +/-chg (RMmn) Main Market 1,673.4 Warrants 350.5 ACE Market 378.8 Bond 1.5 ETF 0.5 LEAP 0.0 Total 2,404.7 Off Market 321.8 58.5 -19.6 51.4 -0.3 -0.5 (0.0) 1,843.6 81.1 105.5 0.4 0.6 0.00 2,031.2 260.8 914.5 -460.7 -5.6 21.4 -0.3 -0.5 0.0 874.4 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP August 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) 1.10 0.23 0.28 0.31 1.19 0.00 0.84 2.84 282 102 46 4 0 0 434 282 130 41 4 4 0 461 % chg % YTD chg 1,785.94 12,642.46 15,114.99 1,778.50 2.16 13.69 46.94 1.00 0.12 0.11 0.31 0.06 -0.60 -2.32 -11.35 -0.36 25,162.41 7,774.12 7,497.87 22,204.22 2,258.91 27,323.59 3,234.12 1,676.29 5,816.59 2,723.26 1,481.82 6,329.02 -137.51 -96.78 -113.77 -151.86 0.00 -429.34 -8.75 -19.06 46.72 -57.71 -32.07 29.38 -0.54 -1.23 -1.49 -0.68 0.00 -1.55 -0.27 -1.12 0.81 -2.08 -2.12 0.47 1.79 12.61 -2.47 -2.46 -8.45 -8.68 -4.96 -4.41 -8.48 -17.66 -21.98 4.35 Bursa Malaysia shares extended sideway trading Wednesday, outpacing weaker regional markets as concerns over Turkey's financial crisis continued to weigh on investor appetite, despite the lira's move away from an all-time low. The KLCI inched higher by 2.16 points to settle at 1,785.94, off a low of 1,783.58 and high of 1,789.09, as losers beat gainers 461 to 434 on steady turnover of 2.40bn shares worth RM2.03bn. Until we see a resolution to the financial crisis in Turkey, stocks are likely to extend sideways trading with downward bias as investors are expected to continue to reduce exposure. The index's immediate support stays at 1,777, the mid Bollinger band, with stronger supports at 1,750 and 1,739, the respective 30 and 50-day moving averages. Immediate resistance remains at 1,809, the upper Bollinger band, with stronger hurdles from 1,824 and 1,851, the respective 38.2%FR and 23.6%FR levels. Bearish technical momentum could force Affin share price lower towards the 61.8%FR (RM2.41), with better retracement support at 76.4%FR (RM2.27), before buyers return to cushion downside. Tough resistance is seen at 38.2%FR (RM2.62). AMBank could also slide on bearish momentum towards the 100-day ma (RM3.83), with stronger support at 123.6%FP (RM3.47). Immediate resistance is found at the 200-day ma (RM4.10). News Bites Top 10 KLCI Movers Based on Mkt Cap. Off Market RHBBANK 120.3 @ BORNOIL-WC 80.0@ SIME 30.0 @ ARMADA 25.0 @ YNHPROP 21.3 @ PASUKGB 19.0 @ PCHEM 13.0 @ MAYBANK 5.0 @ XDL 4.0 @ PHB 1.8 @ LITRAK 1.5 @ Review & Outlook Value Value/ +/-chg Volume Up Down (RM) Counter 5.07 0.03 2.59 0.72 1.19 0.16 9.20 9.80 0.14 0.02 4.72 PBBANK TENAGA PCHEM CIMB IHH HLBANK IOICORP MISC PETDAG PPB Exchange Rate USD/MYR 4.1035 0.005 USD/JPY 110.66 -0.550 EUR/USD 1.135 -0.0004 Mkt Cap. Chg (RM’mn) (RM) 95,035 89,829 74,400 55,071 45,016 39,235 28,029 27,095 26,525 24,042 0.08 0.16 0.20 0.03 0.05 0.14 0.04 0.08 0.48 0.02 Vol. (mn) 5.15 10.44 12.17 6.52 8.15 0.25 0.57 1.02 0.05 0.33 Commodities Futures Palm Oil (RM/mt) 2,213.00 -25.00 Crude Oil (Brent) 70.81 -1.35 Gold ($/tr.oz.) 1,178.20 -18.70 Important Dates • Public Bank Bhd's net profit for the second quarter ended June 30, 2018 rose 4.9% YoY to RM1.4bn. It was within expectations. • Petronas Chemicals Group Bhd's net profit rose 42% YoY to RM1.4bn in the 2Q18, in tandem with higher EBITDA, supported by higher interest income and lower tax expenses. It was within expectations. • Petronas Gas Bhd's net profit for the 2Q18 rose 20% YoY to RM509.3mn on the back of higher revenue and lower tax expenses. It was within expectations. • Press Metal Aluminium Holdings Bhd's 2Q18 net profit rose 7% to RM160.6mn mainly due to higher aluminium price and the strengthening of the US dollar against the ringgit. • CIMB Group Holdings Bhd's 92.5%-owned Indonesian arm, PT CIMB Niaga Tbk, reported a 28.1% YoY rise in its consolidated net profit to IDR1.8trn for the 1H18, on the back of higher non-interest income and lower provision expenses. • Mudajaya Group Bhd said the RM118.6mn contract it was offered to build a 16-storey office complex called Hevea Tower in Sungai Buloh, Selangor, has been terminated by KLIA Consortium on Aug 13. • MK Land Holdings Bhd is teaming up with Menteri Besar Inc (Perak) to jointly develop a piece of land totaling 226 acres in Kampar and Kinta, belonging to the Perak State government, into a mixed development consisting of affordable housing and commercial units. • Scientex Bhd is buying two contiguous pieces of freehold agriculture land measuring a combined 208.9 acres in Alor Gajah, Melaka for RM68.3mn or RM7.50 per sq ft. • Oriental Interest Bhd's unit OIB Properties (K) Sdn Bhd is buying a parcel of agricultural land measuring 61.75 hectares in Bandar Kulim, Kedah, from MBAS Jaya Sdn Bhd for RM36.5mn or RM5.50 per sq ft, • Pelaburan Hartanah Bhd is developing four property projects with an estimated gross development value of RM1.5bn. • Berjaya Food Bhd will further cement its presence in the Indian market with the opening of 30 Kenny Rogers Roasters restaurants and 75 Jollibean kiosks through its development agent, World Iconic Brand Hospitality Pvt Ltd India. • Wegmans Holdings Bhd has obtained necessary regulatory approvals to commence construction of its new factory in Mukim Parit Jawa, Muar, Johor. • Prime Minister Tun Dr Mahathir Mohamad has an approval rating of 71% among Malaysians as at August this year, according to a postelection survey by the Merdeka Center for Opinion Research. • The Malaysian government is committed to returning the Goods and Services Tax refunds that were improperly or even "illegally" withheld by the previous government, beginning next year. • The government has yet to finalise the direction for the East Coast Railway Line project in respect of whether to continue with it or otherwise, and is dependent on discussions currently underway. • The Board of Governors lifted the 7-day reverse repo rate to 5.50% from 5.25%, Bank Indonesia said Wednesday. SMCAP - 5:2 Rights Issue - RI of up to 152.7m shares together with up to 38.2m free detachable warrants. 5 rights shares for every 2 existing shares held, at an issue price of RM0.20 per rights share, together with 1 warrant for every 4 rights shares subscribed. Trading of Rights: 09/08 - 15/08/2018. Application Closed: 24/08/2018. LISTING ON: 12/09/2018. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan, Head of Research MENARA TA ONE, 22 JALAN for TA SECURITIES HOLDINGS BERHAD (14948-M) A PARTICIPATING ORGANISATION OF BURSA MALAYSIA SECURITIES BHD P RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL : 603 - 2072 1277. FAX : 603 - 2032 5048 www.ta.com.my
3. Thursday , August 16, 2018 FBMKLCI: 1,785.94 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Brief Market View, News in Brief: Corporate, Economy, and Share Buybacks Chartist: Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my M a r k e t V i e w Lower on External Uncertainty Bursa Malaysia shares extended sideway trading Wednesday, outpacing weaker regional markets as concerns over Turkey’s financial crisis continued to weigh on investor appetite, despite the lira’s move away from an all-time low. The KLCI inched higher by 2.16 points to settle at 1,785.94, off a low of 1,783.58 and high of 1,789.09, as losers beat gainers 461 to 434 on steady turnover of 2.40bn shares worth RM2.03bn. Better Supports at 1,750/1,739; Resistance at 1,809 Until we see a resolution to the financial crisis in Turkey, stocks are likely to extend sideways trading with downward bias as investors are expected to continue to reduce exposure. The index’s immediate support stays at 1,777, the mid Bollinger band, with stronger supports at 1,750 and 1,739, the respective 30 and 50-day moving averages. Immediate resistance remains at 1,809, the upper Bollinger band, with stronger hurdles from 1,824 and 1,851, the respective 38.2%FR and 23.6%FR levels. Sell AFFIN & AMBank Bearish technical momentum could force Affin share price lower towards the 61.8%FR (RM2.41), with better retracement support at 76.4%FR (RM2.27), before buyers return to cushion downside. Tough resistance is seen at 38.2%FR (RM2.62). AMBank could also slide on bearish momentum towards the 100-day ma (RM3.83), with stronger support at 123.6%FP (RM3.47). Immediate resistance is found at the 200-day ma (RM4.10). Lira Crisis Continued to Haunt Asian Markets Asian shares closed mostly lower in Wednesday trade, shrugging off the positive tone on Wall Street, as investors continued to weigh the impact of Turkey’s currency crisis. Turkey’s currency crisis has led more broadly to fears of contagion in other emerging markets, especially as a strengthening dollar makes paying or refinancing dollar-denominated debt more expensive. Turkey has more foreign-currency debt as a share of gross domestic product than many of its peers. There are also concerns about China’s slowing economy, reinforced by this week’s data on investment and industrial output, and the yuan’s weakening to 15-month lows against the dollar is also pressuring other Asian markets. China stocks extended losses on Wednesday to a third straight day of declines as worries over the country’s cooling economy knocked investor confidence. The Shanghai Composite Index closed down 2.1 percent at 2,723.26 points. In Japan, the Nikkei 225 declined 0.68 percent, or 151.86 points, to close at 22,204.22, with most sectors finishing the day lower. Conversely, Australian stocks firmed throughout the session, with the S&P/ASX 200 reversing early declines to end higher by 0.47 percent at 6,329.00. Markets in South Korea and India were closed for local holidays. Page 1 of 9
4. 16-Aug-18 Trade Tensions and Downbeat Earnings Drag Wall Street Lower Wall Street fell in a day of heavy trading on Wednesday with the S &P 500 posting its biggest percentage drop since late June as investors turned risk-averse on disappointing earnings and escalating global tariff worries. On Wednesday, Turkey’ President Recep Tayyip Erdogan took another step in the U.S.-Turkey spat, raising tariffs on some U.S. imports in retaliation against U.S. sanctions. The tariffs cover U.S. products including alcoholic beverages, passenger cars, tobacco, cosmetics, rice and coal. Meanwhile, China also lodged a complaint with the World Trade Organization against American trade policies. On earning front, Macy’s Inc stock tumbled 15.9 percent after margin fears spooked investors, overshadowing its stronger-than-expected sales and earnings. Second-quarter U.S. earnings have mostly been stronger than expected, with 79.1 percent beating analyst expectations, according to Thomson Reuters. Technology stocks were the biggest drag on the S&P 500 and the Nasdaq, with the S&P 500 technology index down 1.1 percent. Shares of U.S. tech giants Facebook, Apple and Alphabet all dropped. The Dow Jones Industrial Average fell 137.51 points, or 0.54 percent, to 25,162.41, the S&P 500 lost 21.59 points, or 0.76 percent, to 2,818.37 and the Nasdaq Composite dropped 96.78 points, or 1.23 percent, to 7,774.12. Page 2 of 9
5. 16-Aug-18 N e w s I n B r i e f Corporate Mudajaya Group Bhd (MCB) said the RM118.6mn contract it was offered to build a 16storey office complex called Hevea Tower in Sungai Buloh, Selangor, has been terminated by KLIA Consortium on Aug 13. The job was part of a proposed development spanning over 2,330 acres of land owned by the Malaysian Rubber Board– which was supposed to be completed by September 2019. (Bursa Malaysia / The Edge) MK Land Holdings Bhd is teaming up with Menteri Besar Inc (Perak) (MB Inc) to jointly develop a piece of land totaling 226 acres in Kampar and Kinta, belonging to the Perak State government, into a mixed development consisting of affordable housing and commercial units. For this, its wholly-owned Ritma Mantap Sdn Bhd has entered into a Memorandum of Understanding with MB Inc to participate in the joint venture, whereby MB Inc is to hold a 15% stake in the proposed development. The proposed development is expected to be carried out and completed in phases over a period of 10 years with an extension of five years. (Bursa Malaysia / The Edge) Scientex Bhd is buying two contiguous pieces of freehold agriculture land measuring a combined 208.9 acres in Alor Gajah, Melaka for RM68.3mn or RM7.50 per sq ft. It plans to develop the land into a mixed property development. Scientex said it is currently too preliminary to ascertain costs and values, but believes the proposed acquisition will provide it with adequate landbank to sustain its property development over the medium and longer term. (Bursa Malaysia / The Edge) Oriental Interest Bhd’s unit OIB Properties (K) Sdn Bhd is buying a parcel of agricultural land measuring 61.75 hectares in Bandar Kulim, Kedah, from MBAS Jaya Sdn Bhd for RM36.5mn or RM5.50 per sq ft, to increase its land bank. The group said the acquisition is in line with its strategy to focus on development in the northern region of Peninsular Malaysia and to continuously replenish and expand its existing land bank in strategic locations. (Bursa Malaysia / The Edge) Pelaburan Hartanah Bhd, a property investment company and fund manager of Amanah Hartanah Bumiputera, is developing four property projects with an estimated gross development value of RM1.5bn. Its group managing director and chief executive officer Datuk Kamalul Arifin Othman said there were two projects each at Jalan Bangsar and Jalan Conlay and a private hospital development in Penchala, all here and shopping centres in Terengganu. (New Straits Times) Berjaya Food Bhd will further cement its presence in the Indian market with the opening of 30 Kenny Rogers Roasters restaurants and 75 Jollibean kiosks through its development agent, World Iconic Brand (WIB) Hospitality Pvt Ltd India. Following the memorandum of understanding signed between the two companies, WIB would be allocating USD50mn to open branches in Hyderabad, Kerala, Goa and Tamil Nadu. (Bernama) Wegmans Holdings Bhd has obtained necessary regulatory approvals to commence construction of its new factory in Mukim Parit Jawa, Muar, Johor. Managing Director Keh Wee Kiet said the factory was expected to commence production earlier than its original time frame, which was by the second quarter of 2020. Keh said the new factory would be able to double the company’s current annual production capacity and enable the company to meet the rising demand for its home furniture products. (Bernama) Page 3 of 9
6. 16-Aug-18 Public Bank Bhd 's net profit for the second quarter ended June 30, 2018 rose 4.9% to RM1.4bn from RM1.3bn a year earlier, due to higher net interest income, higher income from Islamic banking business, lower loan impairment allowance, and higher net fee and commission income, which were partially offset by lower investment and other operating income. For the cumulative six months, Public Bank's net profit rose to RM2.8bn from RM2.6bn a year ago. (Bursa Malaysia / The Edge) Petronas Chemicals Group Bhd's net profit rose 42% to RM1.4bn in the second quarter ended June 30, 2018 from RM964mn a year ago, in tandem with higher earnings before interest, tax, depreciation and amortisation, supported by higher interest income and lower tax expenses. For the cumulative six months, net profit grew to RM2.4bn from RM2.3bn a year ago. (Bursa Malaysia / The Edge) Petronas Gas Bhd's (PetGas) net profit for the second quarter ended June 30, 2018 rose 20% to RM509.3mn from RM425.3mn a year earlier, on the back of higher revenue and lower tax expenses negated by higher finance cost. For the six months ended June 30, PetGas' net profit rose to RM992.6mn from RM888.6mn a year ago. On prospects, PetGas said it is in continuous discussion with the Energy Commission to finalise the tariff guidelines for gas transportation and regasification services beyond 2018. (Bursa Malaysia / The Edge) KLCCP Stapled Group, comprising KLCC Property Holdings Bhd (and KLCC Real Estate Investment Trust, saw its net profit rise a marginal 0.7% to RM179.2mn in the second quarter ended June 30, 2018 from RM178.0mn a year ago, reflecting the 100% occupancy in Menara ExxonMobil since April 2017, as well as higher rental rates and occupancy rates. For the cumulative six months, the group's net profit grew 1.4% to RM359.8mn from RM354.7mn a year ago. (Bursa Malaysia / The Edge) Press Metal Aluminium Holdings Bhd’s second quarter ended June 30, 2018 net profit rose 7% to RM160.6mn from RM150.2mn a year ago, mainly due to higher aluminium price and the strengthening of the US dollar against the ringgit. Cumulative net profit for the first two quarters came in at RM311.1mn, up 4.3% from RM298.2mn in the same period last year. (Bursa Malaysia / The Edge) CIMB Group Holdings Bhd’s 92.5%-owned Indonesian arm, PT CIMB Niaga Tbk, reported a 28.1% YoY rise in its consolidated net profit to IDR1.8trn for the first half of 2018, on the back of higher non-interest income and lower provision expenses. It said its strategy to focus on the mortgage and Small Medium Enterprise segments is gaining traction, with each segment growing by 8.9% and 6.2% YoY respectively, while corporate loans grew by 8.8% YoY. (Bursa Malaysia / The Edge) Sam Engineering & Equipment (M) Bhd's net profit for the first quarter ended June 30, 2018 rose 87% to RM17.6mn from RM9.4mn a year earlier, thanks to better performance of both its aerospace and equipment segments, which recorded improved revenues. (Bursa Malaysia / The Edge) Damansara Realty Bhd slipped into the red in the second quarter ended June 30, 2018 despite higher revenue, mainly due to higher cost of sales and operating expenses. It recorded a net loss of RM0.3mn in 2QFY18, compared to a net profit of RM4.5mn a year earlier while revenue rose 11% to RM74.2mn from RM66.7mn. For the first half of its financial year, Damansara Realty’s net profit fell 56% to RM1.4mn compared with a net profit of RM3.2mn in 1HFY17, mainly due to lower contribution from its property and land development segment. (Bursa Malaysia / The Edge) Page 4 of 9
7. 16-Aug-18 N e w s I n B r i e f Economy Malaysi a Guan Eng : GST Refund Next Year The Pakatan Harapan government is committed to returning the Goods and Services Tax (GST) refunds that were improperly or even “illegally” withheld by the previous government, beginning next year, said Finance Minister Lim Guan Eng today. He said the commitment was being made despite the huge amount of refunds involved. Apart from the 1MalaysiaDevelopment Bhd (1MDB) and related financial scandals, Lim, in a shocking revelation recently disclosed that as at May 31, 2018, the previous government withheld GST refund payments amounting to RM19.4 billion. He said some of these refunds, stretched as far back as 2015 and deserved answers from former Prime Minister Datuk Seri NajibTun Razak. “The government faces a shortfall of RM19.25 billion because there is only RM148.6 million in the GST Refunds Trust account, when it should be RM19.4 billion,” he said in a statement. Lim added that the shortfall was confirmed by Customs Director-General Datuk Seri T Subromaniam. The Customs Department had requested from the monthly Trust Fund committee meetings, that RM82.9 billion be transferred to the GST Refunds Trust Account but only RM63.5 billion was effected giving rise to the shortfall of RM19.25 billion. This also resulted in 121,429 companies and individuals not getting their GST refunds since 2015. (The Star) Government Yet to Finalise ECRL Project's Direction The government has yet to finalise the direction for the East Coast Railway Line (ECRL) project in respect of whether to continue with it or otherwise, and is dependent on discussions currently underway. Finance Minister Lim Guan Eng said the Selangor state government had opposed the project as the rail network from Gombak to Port Klang would impact the application for the 16 km-long Klang Gates Quartz Ridge, which is the longest of its kind in the world, as a UNESCO World Heritage site. “If the government intends to continue with the project, comprehensive research has to be undertaken from the aspect of getting the agreement of the Selangor state government, the scope, specifications and implementation method, so that the overall cost can be reduced and also lighten the federal government’s financial burden. “If the government decides not to go ahead with the project, there is a strong possibility of its being subject to a legal process to determine the amount in compensation to be paid,” he told the Dewan Rakyat. He said this in answering a question from Datuk Seri Dr Ismail Abd Muttalib (BN-Maran) who wanted to know the latest status of the ECRL’s construction and justification for the cost rising from RM55 billion to RM70 billion. (The Edge) 71% approve of Dr. Mahathir as PH Government Reaches 100th Day in Power Prime Minister Tun Dr Mahathir Mohamad has an approval rating of 71% among Malaysians as at August this year, according to a post-election survey by the Merdeka Center for Opinion Research. Compared with the election month in May when he scored a rating of 83%, Dr. Mahathir’s current approval rating is at its lowest. However, the figure still beats the highest rating of 62% achieved by Dr. Mahathir’s predecessor Datuk Seri Najib Razak during his tenure as Prime Minister between 2013 and May 2018. A similar trend can be seen in public perception towards the Pakatan Harapan Federal Government in the August survey. At 67%, Pakatan’s rating has declined from 87% in May — but is still on par with Barisan Nasional’s five-year high achieved in August 2013 during Najib’s tenure. In the bigger picture, 56% of voters were satisfied with the overall performance of the PH Government in fulfilling their election promises to date. Page 5 of 9
8. 16-Aug-18 On another measure , the percentage of people who feel the country is heading towards the “right” direction has declined to 55% in August, from a high of 64% in May. This compares with 38% in April 2018, the month before GE14. Interestingly, more civil servants (64%) believe the country is heading towards the right direction compared with 60% of respondents in the private sector. (The Edge) Asia Indonesia Hikes Key Rate by 25 Bps Indonesia's central bank raised its key rate by a quarter point to stabilize the rupiah amid worsening current account deficit and turmoil in Turkey. The Board of Governors lifted the 7-day reverse repo rate to 5.50% from 5.25%, Bank Indonesia said Wednesday. In a statement, the bank said the decision was in consistent with efforts to maintain the attractiveness of the domestic financial market and control the current account deficit within a safe limit. The central bank has raised the rate by a cumulative 125 basis points since May. The current account deficit surged to $8 billion in the second quarter. The trade data, released Wednesday, showed that the deficit widened to $2 billion on higher imports in July. The rupiah came under intense pressure amid worsening current account deficit and the crisis in Turkey. Even if the crisis in Turkey starts to fades, a combination of rising US Treasury yields and the escalating trade war between the US and China, will keep the rupiah under downward pressure. (RTT) Australia Wage Prices Rise 0.6% in Q2 Wage prices in Australia were up a seasonally adjusted 0.6% on quarter in the second three months of 2018, the Australian Bureau of Statistics said. That was in line with expectations and up from 0.5% in the three months prior. On a yearly basis, wage prices advanced 2.1% matching forecasts and unchanged from the previous three months. Western Australia and the Northern Territory both had the lowest annual wage growth of 1.5%, while Victoria and Tasmania were the highest at 2.5%. Separately, Consumer confidence in Australia ebbed in August, the latest survey from Westpac Bank revealed - sinking 2.3% to a score of 103.6. That follows the 3.9% jump in July to a reading of 106.1. The index score remains above 100 points, meaning the optimists outnumber pessimists. (RTT) United States Consumers Start Third Quarter With Strong July Retail Sales Americans’ spending started the third quarter on a strong footing amid a tight labor market and robust consumer confidence. Retail sales—a measure of spending at U.S. stores, websites and restaurants—rose 0.5% in July from the prior month, the Commerce Department said Wednesday. That was well ahead of economists’ forecasts for a 0.1% increase. The growth was driven by stronger spending at grocery stores, restaurants, department stores and clothing stores. “Restaurants are a highly discretionary category, and continued strength suggests that households are not too worried about higher gas prices and that tax cuts are providing a cushion,” Morgan Stanley economists said in a note to clients. Excluding motor vehicles, sales were up 0.6% in July, and excluding gasoline, sales were up 0.5%. Excluding both categories, sales were up 0.6% last month. Sales at food and beverage stores increased 0.6% in July, the strongest rate of growth since December last year. Spending in June was revised lower, to a 0.2% advance from an initially reported 0.5% rise. Compared with a year earlier, sales grew 6.4% in July. That’s more than double the pace of inflation, which increased 2.9% in the year to July as measured by the Labor Department’s consumer-price index. (WSJ) Page 6 of 9
9. 16-Aug-18 U .S. Homebuilder Confidence Edges Lower in August Partly reflecting growing affordability concerns, the National Association of Home Builders released a report showing a modest deterioration in U.S. homebuilder confidence in the month of August. The report said the NAHB/Wells Fargo Housing Market Index edged down to 67 in August from 68 in June, matching economist estimates. The good news is that builders continue to report strong demand for new housing, fueled by steady job and income growth along with rising household formations. However, they are increasingly focused on growing affordability concerns, stemming from rising construction costs, shortages of skilled labor and a dearth of buildable lots. The slight drop by the housing market index reflected modest decreases by all three of the components of the index. The metric charting buyer traffic dropped two points to 49, while the index measuring current sales conditions and the component gauging expectations in the next six months both slipped by one point to 73 and 72, respectively. (RTT) U.S. Worker Productivity Improved in Spring U.S. worker productivity accelerated this spring, a sign better efficiency helped support the second quarter’s stronger economic growth. The productivity of nonfarm workers, measured as the output of goods and services for each hour on the job, increased at a 2.9% seasonally adjusted annual rate in the second quarter, the Labor Department said Wednesday. But from a year earlier, productivity advanced at a still modest 1.3% rate. A gauge of compensation costs, unit-labor costs, decreased at a 0.9% annual rate in the April through June period from the first three months of the year. Economists surveyed by The Wall Street Journal had expected productivity to advance at a 2.4% annual rate in the second quarter from the first, and projected labor costs to increase at a 0.1% pace. Last quarter’s improvement in productivity could be a sign that better business investment in recent months is giving workers the tools necessary to increase output. Some firms have turned to automation and other technology to ramp up output to meet demand. (WSJ) U.S. Industrial Production Edged Up in July U.S. industry output rose slowly in July, held down by weakness in the mining and utilities sectors. Industrial production—a measure of output at factories, mines and utilities—inched up a seasonally adjusted 0.1% in July from the prior month, the Federal Reserve said Wednesday. Economists surveyed by The Wall Street Journal had expected the index to rise 0.3%. Output in the volatile mining sector, which includes oil and natural gas extraction, declined 0.3% in July. Utility output also dropped from the prior month. Over a broader period, the picture for industrial output appears stronger. June industrial production growth was revised to up 1.0% from an originally reported 0.6% rise. From a year earlier, industrial production was up 4.2% in July. Further, despite the month-on-month decline in mining, output from that sector was up nearly 13% from July 2017. Manufacturing output, the biggest component of industrial production, rose 0.3% last month from June and was up 2.8% from a year earlier. The segment showed particular robustness among autos and computers, considered long-lasting, or durable, goods. Manufacturing production has been rising since mid-2016, when rising oil prices stimulated growth in the energy sector. Capacity use, a measure of slack in the industrial economy, was unchanged from June’s upwardly revised level of 78.1%, matching economist expectations. (WSJ) Page 7 of 9
10. 16-Aug-18 U .S. Business Inventories Inch Up in Line With Estimates A report released by the Commerce Department showed a modest uptick in U.S. business inventories in the month of June. The Commerce Department said business inventories crept up by 0.1% in June after rising by a downwardly revised 0.3% in May. Economists had expected inventories to inch up by 0.1% compared to the 0.4% increase originally reported for the previous month. The uptick in business inventories in June came as manufacturing, retail, and wholesale inventories all edged up by 0.1% during the month. The Commerce Department also said business sales rose by 0.3% in June after surging up by 1.3% in May. Manufacturing sales led the way higher, jumping by 1.0%, while retail sales were unchanged and wholesale sales dipped by 0.1%. With sales rising by more than inventories, the total business inventories/sales ratio dipped to 1.33 in June from 1.34 in May. (RTT) Europe and Uni ted Kingdom UK Consumer Inflation Rises for First Time Since November Higher petrol prices helped drive the rate of inflation in the UK up for the first time since last November during July, according to official figures released on Wednesday. The consumer price index was 2.5% higher than the same month a year ago up from a 2.4% annual rise in June. Economists had predicted the index would increase to 2.5%, according to a poll by Thomson Reuters conducted before the data were released. Britain’s rate of inflation rose following the vote to leave the EU as a cheaper pound led to higher import costs. These higher costs have now been passed on and global commodity prices are now playing a greater role in driving price growth. Transport costs have risen by 5.7% over the past year, according to the index. Higher global oil prices have led to a rise in prices at the pump following years of cheaper-than-usual oil. So-called core inflation, which strips out the effects of volatile energy and food prices is often seen as a measure of underlying inflationary pressure, was 1.9%. The Bank of England, which raised interest rates earlier this month, is mandated by the government to target a 2% rate of inflation. Inflation as measured by the retail price index fell to 3.2% from 3.4% in June. July’s RPI figure will be used to set the annual fare increase for rail operators. (Financial Times) UK House Price Growth Near 5-year Low, London Logs Worst Fall Since 2009 UK house price inflation was the lowest in nearly five years as London witnessed its worst decline in house prices since 2009, data from the Office for National Statistics showed. House prices rose 3% year-on-year after a 3.5% gain in May. The latest increase was the smallest since August 2013, when prices grew 3%. This slowdown in UK house price growth over the past two years is driven mainly by a slowdown in the south and east of England, the ONS said. The lowest annual growth was in London, where prices decreased by 0.7% yearon-year after a 0.2% fall in the previous month. The latest decline was the worst since September 2009, when prices dropped 3.2%. On a month-on-month basis, house prices were flat. The average UK house price was GBP 228,000 in June, which was GBP 6,000 higher than in a year ago and GBP 1,000 higher than last month. (RTT) Page 8 of 9
11. 16-Aug-18 Share Buy-Back : 15 August 2018 Company HAIO INCKEN KENANGA MKH P&O PANSAR PANTECH SYSCORP WCT YTLPOWR Bought Back Price (RM) Hi/Lo (RM) 3,400 90,000 50,000 10,100 5,000 30,000 229,800 20,000 250,000 5,000,000 4.44/4.39 0.67 0.775/0.77 1.38/1.37 1.04 0.83 0.50 0.37 0.975/0.965 1.21/1.20 4.46/4.38 0.67 0.775/0.77 1.39/1.37 1.05/1.03 0.845/0.83 0.51/0.495 0.375/0.365 0.985/0.96 1.21/1.18 Total Treasury Shares 9,544,188 18,971,600 13,033,800 2,463,400 11,995,793 200,000 3,939,724 21,798,600 32,902,036 468,105,712 Source: Bursa Malaysia Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 9 of 9
12. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD 15-Aug-18 AUTOMOBILE BAUTO 2.12 2.64 24.5% Buy 2,464 0.52 12.1 17.5 17.6 12.1 4.9 5.8 2.44 -13.1 1.82 16.6 MBMR 2.39 3.19 33.5% Buy 934 0.56 31.4 31.9 7.6 7.5 3.3 3.3 2.68 -10.8 2.01 18.9 -2.5 8.6 PECCA 0.94 1.30 38.3% Buy 173 1.01 6.4 7.7 14.8 12.2 6.4 6.4 1.65 -43.0 0.78 20.5 -39.4 SIME 2.59 2.97 14.7% Buy 17,614 1.50 13.2 16.4 19.6 15.8 1.3 1.6 3.06 -15.4 2.03 27.8 17.2 UMW 5.94 5.45 -8.2% Sell 6,940 0.83 28.4 39.3 20.9 15.1 2.4 3.4 6.98 -14.9 4.70 26.4 14.2 BANKS & FINANCIAL SERVICES ABMB 4.11 4.30 4.6% Hold 6,363 0.92 31.9 34.9 12.9 11.8 3.7 3.9 4.49 -8.5 3.62 13.5 0.7 AFFIN 2.50 2.50 0.0% Sell 4,857 0.79 25.5 26.8 9.8 9.3 3.2 3.2 2.70 -7.4 2.22 12.5 8.2 AMBANK 3.93 3.80 -3.3% Sell 11,846 1.28 37.6 41.5 10.5 9.5 3.8 4.6 4.90 -19.8 3.40 15.6 -10.9 CIMB 5.88 6.30 7.1% Hold 55,071 1.56 52.2 55.5 11.3 10.6 4.4 4.7 7.39 -20.4 5.21 12.9 -10.1 HLBANK 19.18 21.80 13.7% Buy 39,235 0.87 129.2 146.1 14.8 13.1 2.5 2.5 20.02 -4.2 14.90 28.7 12.8 MAYBANK 9.79 9.60 -1.9% Buy 107,012 1.07 71.4 75.7 13.7 12.9 5.6 5.6 11.08 -11.6 8.68 12.8 -0.1 PBBANK 24.48 25.80 5.4% Hold 95,035 0.83 152.5 165.6 16.1 14.8 2.7 2.7 25.78 -5.0 19.90 23.0 17.8 RHBBANK 5.13 5.30 3.3% Sell 20,572 1.32 54.3 59.0 9.4 8.7 2.9 2.9 5.88 -12.8 4.71 8.9 2.6 BURSA 7.69 8.07 4.9% Sell 6,209 0.86 29.2 30.0 26.4 25.7 3.1 3.1 8.12 -5.2 6.25 23.1 15.2 ANNJOO 2.21 2.47 11.8% Buy 1,186 1.74 32.2 35.1 6.9 6.3 7.0 8.2 3.98 -44.5 1.63 35.6 -42.7 CHINHIN 0.78 0.82 5.1% Hold 429 1.29 6.9 9.2 11.3 8.5 3.8 5.1 1.36 -42.6 0.73 6.8 -35.5 CMSB 3.50 3.80 8.6% Buy 3,750 1.61 21.3 22.6 16.4 15.5 2.4 2.6 4.42 -20.8 1.74 101.1 -10.3 CSCSTEL 1.32 1.41 6.8% Hold 487 0.88 15.8 17.0 8.4 7.7 6.4 6.9 1.84 -28.3 1.27 3.9 -14.3 ENGTEX 1.10 1.29 17.3% Buy 479 0.91 12.9 15.3 8.5 7.2 1.8 2.8 1.27 -13.4 0.95 15.8 0.0 GADANG 0.75 0.97 30.2% Buy 493 1.45 16.0 14.5 4.7 5.1 4.0 4.0 1.32 -43.6 0.64 16.4 -32.9 GAMUDA 3.63 3.92 8.0% Hold 8,959 1.02 34.3 35.5 10.6 10.2 3.3 3.3 5.45 -33.4 3.00 21.0 -26.8 GDB 0.40 0.52 31.6% Buy 247 na 4.6 5.2 8.5 7.6 3.0 3.8 0.45 -12.2 0.28 43.6 33.9 IJM 1.96 1.73 -11.7% Sell 7,117 1.24 9.6 15.7 20.3 12.5 3.1 3.1 3.46 -43.4 1.60 22.5 -35.7 BUILDING MATERIALS CONSTRUCTION KAB 0.27 0.37 39.6% Buy 85 na 3.1 3.7 8.6 7.2 3.8 4.5 0.33 -19.7 0.20 32.5 -11.7 PESONA 0.30 0.29 -1.7% Sell 205 1.10 3.0 3.9 9.7 7.6 5.1 5.1 0.61 -51.2 0.26 15.7 -34.4 SENDAI 0.88 0.70 -20.5% Sell 687 1.24 9.9 8.7 8.9 10.1 1.1 1.1 1.16 -24.1 0.68 29.4 1.7 SUNCON 2.02 1.71 -15.3% Sell 2,610 1.01 12.7 14.2 15.9 14.2 4.0 4.5 2.64 -23.5 1.72 17.4 -19.5 WCT 0.98 1.02 4.6% Buy 1,349 0.88 10.6 10.9 9.2 9.0 3.1 3.1 1.88 -48.1 0.70 40.3 -39.8 LITRAK 4.74 5.01 5.7% Buy 2,502 0.22 43.3 47.1 10.9 10.1 5.3 5.3 6.00 -21.0 3.63 30.6 -14.6 CARLSBG 19.06 20.65 8.3% Buy 5,863 0.52 89.3 93.2 21.3 20.5 4.7 4.9 20.88 -8.7 14.52 31.3 25.3 HEIM 22.44 23.11 3.0% Hold 6,779 0.51 95.2 103.5 23.6 21.7 4.1 4.5 24.02 -6.6 17.30 29.7 18.7 AEON 2.22 2.53 14.0% Hold 3,117 0.39 7.9 9.2 28.2 24.1 2.0 2.3 2.65 -16.2 1.45 53.1 26.1 AMWAY 7.42 8.47 14.2% Buy 1,220 0.61 35.6 37.5 20.8 19.8 4.7 5.0 8.52 -12.9 6.97 6.5 1.6 F&N 37.68 30.69 -18.6% Sell 13,811 0.56 96.0 114.0 39.3 33.0 1.9 2.0 39.98 -5.8 23.40 61.0 39.6 CONSUMER Brewery Retail HUPSENG 1.10 1.25 13.6% Buy 880 0.53 5.8 6.2 18.9 17.8 5.5 5.5 1.21 -9.1 1.02 7.8 0.9 JOHOTIN 1.05 1.02 -2.9% Hold 326 1.07 8.1 8.5 12.9 12.4 5.7 6.2 1.62 -35.2 0.89 18.0 -13.2 NESTLE 146.10 129.90 -11.1% Sell 34,260 0.53 322.2 360.2 45.3 40.6 2.1 2.2 163.00 -10.4 84.00 73.9 41.6 PADINI 6.00 5.77 -3.8% Sell 3,947 0.69 25.6 29.1 23.5 20.6 2.1 2.2 6.20 -3.2 3.78 58.7 13.9 POHUAT 1.53 1.83 19.6% Buy 336 0.60 20.1 23.1 7.6 6.6 3.9 5.2 2.07 -26.0 1.15 33.0 -14.5 QL 5.96 5.42 -9.1% Sell 9,670 0.69 12.7 14.0 46.9 42.6 0.8 0.8 6.10 -2.3 3.71 60.7 37.0 SIGN 0.63 0.92 46.0% Buy 142 0.89 6.6 8.7 9.5 7.2 4.0 5.6 0.97 -34.7 0.48 31.3 -10.6 36.00 28.29 -21.4% Sell 10,279 1.14 152.7 148.0 23.6 24.3 3.9 3.9 44.70 -19.5 22.46 60.3 -10.0 GENTING 8.61 11.23 30.4% Buy 33,046 0.95 58.9 66.7 14.6 12.9 1.9 1.9 9.90 -13.1 8.30 3.7 -5.7 GENM 5.10 6.01 17.8% Buy 28,849 1.23 29.7 36.7 17.2 13.9 2.4 2.5 6.08 -16.2 4.59 11.1 -8.0 2.27 3.15 38.8% Buy 3,058 0.64 19.6 37.4 11.6 6.1 7.0 11.5 2.62 -13.4 2.06 10.2 1.3 CCMDBIO 1.29 1.52 17.8% Buy 854 0.41 6.8 7.5 18.9 17.3 3.6 3.8 1.49 -13.4 0.84 52.8 19.0 IHH 5.46 6.60 20.9% Hold 45,017 0.60 11.9 12.3 46.0 44.5 0.5 0.6 6.42 -15.0 5.27 3.6 -6.8 KPJ 1.14 1.14 0.0% Buy 4,796 0.62 4.0 4.4 28.7 25.9 1.9 2.1 1.17 -2.6 0.84 35.7 17.5 HARTA 6.80 4.90 -27.9% Sell 22,580 1.00 11.8 14.6 57.5 46.5 1.4 1.4 6.84 -0.6 3.19 113.2 27.3 KOSSAN 4.44 4.88 9.9% Buy 5,678 0.57 15.9 18.1 28.0 24.6 1.4 1.6 4.72 -5.9 3.19 39.2 9.5 SUPERMX 4.27 4.75 11.2% Under Review 2,800 0.46 20.0 22.6 21.4 18.9 1.8 2.1 4.61 -7.4 1.69 152.7 113.5 TOPGLOV 10.50 12.91 23.0% Buy 13,421 0.13 35.6 41.8 29.5 25.1 1.4 1.7 12.48 -15.9 5.33 97.0 31.4 KAREX 0.80 0.54 -32.1% Sell 797 0.65 1.3 1.8 59.2 44.2 0.4 0.6 1.67 -52.4 0.50 59.0 -38.8 SCIENTX 8.40 7.00 -16.7% Sell 4,107 0.82 54.8 57.5 15.3 14.6 2.1 2.3 9.85 -14.7 6.51 29.0 -3.0 SKPRES 1.42 2.20 54.9% Buy 1,775 1.01 10.2 11.7 14.0 12.1 3.6 4.2 2.35 -39.6 1.33 6.8 -37.7 ASTRO 1.81 1.65 -8.8% Hold 9,437 1.14 12.4 13.8 14.5 13.1 6.9 6.9 2.94 -38.4 1.31 38.2 -31.7 MEDIA PRIMA 0.51 0.38 -24.8% Sell 560 0.86 -6.0 -4.2 na na 0.0 0.0 0.90 -43.9 0.25 102.0 -33.6 STAR 1.22 1.20 -1.6% Hold 900 0.99 6.3 5.9 19.5 20.6 7.4 7.4 2.22 -45.0 1.00 22.0 -26.1 Tobacco BAT GAMING Casino NFO BJTOTO HEALTHCARE Hospitals/ Pharmaceutical Rubber Gloves INDUSTRIAL MEDIA
13. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.41 0.63 55.6% Buy 712 1.59 4.4 4.6 9.2 8.7 2.5 2.5 0.57 -28.9 0.31 32.8 LCTITAN 5.12 6.59 28.7% Buy 11,638 na 44.5 51.6 11.5 9.9 3.3 3.9 6.46 -20.7 4.57 12.0 -16.5 8.9 MHB 0.69 0.78 13.9% Sell 1,096 1.43 -5.6 0.4 na 158.8 0.0 0.0 0.98 -30.1 0.63 9.6 -17.0 MISC 6.07 5.65 -6.9% Sell 27,095 0.87 29.3 40.3 20.7 15.0 4.9 4.9 7.90 -23.2 5.03 20.7 -18.2 PANTECH 0.50 0.64 28.0% Hold 372 0.97 6.3 6.9 7.9 7.3 5.0 5.4 0.74 -32.4 0.50 1.0 -22.5 PCHEM 9.30 9.68 4.1% Hold 74,400 0.75 57.0 57.8 16.3 16.1 3.0 3.3 9.51 -2.2 7.08 31.4 20.8 SAPNRG 0.59 0.85 45.3% Buy 3,505 2.20 -5.0 -2.2 na na 0.0 0.0 1.75 -66.6 0.40 48.1 -17.6 SERBADK 3.88 4.72 21.6% Buy 5,698 na 27.5 31.4 14.1 12.3 2.3 2.6 4.00 -3.0 1.99 95.0 19.8 VELESTO 0.29 0.35 22.8% Buy 2,341 1.93 0.3 1.0 87.6 28.9 0.0 0.0 0.48 -40.6 0.22 32.6 -6.6 UZMA 1.30 1.47 13.1% Buy 416 1.32 19.8 12.9 6.6 10.1 0.0 0.0 1.67 -22.2 0.93 40.5 1.6 FGV 1.66 1.76 6.0% Buy 6,056 1.68 1.8 1.5 94.1 110.6 3.0 3.0 2.18 -23.9 1.45 14.5 -1.8 IJMPLNT 2.41 1.84 -23.7% Sell 2,122 0.43 7.9 7.1 30.6 33.8 2.1 2.1 3.10 -22.3 2.08 15.9 -12.0 IOICORP 4.59 5.06 10.2% Buy 28,029 0.83 19.0 19.6 24.1 23.4 5.7 3.3 4.81 -4.6 4.21 9.1 3.6 KFIMA 1.71 1.98 15.8% Buy 482 0.67 14.5 12.9 11.8 13.3 5.3 5.3 1.89 -9.5 1.44 18.8 8.9 KLK 24.80 22.37 -9.8% Sell 26,411 0.58 83.3 90.6 29.8 27.4 1.8 1.8 25.98 -4.5 23.26 6.6 -0.8 PLANTATIONS SIMEPLT 5.18 5.84 12.7% Buy 35,228 na 19.6 18.5 26.4 28.0 2.7 2.9 6.00 -13.7 4.58 13.1 -13.7 TSH 1.24 1.09 -12.1% Sell 1,712 0.44 9.3 9.6 13.3 12.9 1.9 2.0 1.73 -28.3 1.12 10.7 -24.8 UMCCA 6.25 5.59 -10.6% Sell 1,311 0.43 18.2 19.8 34.3 31.5 1.9 2.4 7.08 -11.7 5.85 6.8 -4.0 GLOMAC 0.45 0.50 12.4% Hold 353 0.53 1.5 2.5 30.7 17.7 3.4 3.4 0.63 -29.1 0.43 3.5 -19.8 HUAYANG 0.48 0.50 4.2% Hold 169 0.72 1.3 2.2 38.4 21.7 0.0 0.0 0.86 -43.9 0.44 9.1 -21.3 IBRACO 0.56 0.58 3.6% Hold 278 na 4.6 7.7 12.3 7.3 3.6 3.6 0.92 -38.8 0.26 115.4 -31.3 IOIPG 1.81 1.87 3.3% Buy 9,966 0.86 14.9 14.7 12.2 12.3 3.3 3.3 2.14 -15.4 1.47 23.1 -2.2 MAHSING 1.22 1.22 0.0% Buy 2,962 1.02 9.4 9.6 12.9 12.7 4.1 4.1 1.59 -23.3 0.98 24.5 -15.9 PROPERTY SIMEPROP 1.29 1.28 -0.8% Hold 8,773 na 6.1 5.3 21.0 24.3 3.1 2.3 1.78 -27.5 1.04 24.0 -27.5 SNTORIA 0.52 0.73 41.7% Buy 287 0.67 8.3 8.7 6.2 5.9 1.9 1.9 0.77 -33.4 0.49 5.1 -25.9 SPB 4.08 4.11 0.7% Sell 1,402 0.60 18.7 23.4 21.8 17.5 2.9 2.9 5.50 -25.8 4.05 0.7 -16.7 SPSETIA 2.95 3.23 9.5% Hold 11,508 1.11 16.1 18.1 18.3 16.3 4.1 4.1 4.00 -26.3 2.77 6.5 -26.3 SUNWAY 1.56 1.65 5.8% Hold 7,588 0.82 11.8 12.5 13.2 12.5 3.8 3.8 1.96 -20.4 1.44 8.3 -4.3 SUNREIT 1.74 1.87 7.5% Hold 5,124 0.78 9.6 10.3 18.2 16.8 5.5 5.9 1.90 -8.4 1.48 17.6 -8.4 CMMT 1.19 1.48 24.4% Buy 2,428 0.54 7.9 8.4 15.0 14.2 6.8 7.2 1.83 -35.0 0.98 21.4 -35.0 REIT POWER & UTILITIES MALAKOF 0.98 0.85 -12.8% Sell 4,793 1.07 5.8 6.7 16.7 14.5 7.2 7.2 1.17 -16.7 0.83 18.2 -0.5 PETDAG 26.70 24.13 -9.6% Sell 26,525 0.75 114.1 114.9 23.4 23.2 3.2 3.2 28.18 -5.3 20.81 28.3 11.1 PETGAS 18.66 20.23 8.4% Hold 36,923 0.88 99.1 99.9 18.8 18.7 3.6 3.6 19.50 -4.3 15.82 18.0 6.8 TENAGA 15.82 16.10 1.8% Buy 89,829 0.83 128.8 128.0 12.3 12.4 4.1 4.1 16.34 -3.2 13.54 16.8 3.7 YTLPOWR 1.20 0.78 -35.0% Sell 9,234 0.78 7.6 8.0 15.8 15.1 4.2 4.2 1.40 -14.4 0.73 64.4 -7.0 TELECOMMUNICATIONS AXIATA 4.38 6.05 38.1% Buy 39,725 1.81 11.9 15.7 36.7 28.0 2.3 3.0 5.82 -24.7 3.76 16.5 -20.2 DIGI 4.57 5.15 12.7% Buy 35,532 0.96 19.6 20.2 23.3 22.6 4.3 4.4 5.10 -10.4 3.93 16.3 -10.4 MAXIS 5.74 5.90 2.8% Hold 44,867 0.99 24.4 24.1 23.5 23.8 3.5 3.5 6.14 -6.5 5.21 10.2 -4.5 TM 3.59 3.30 -8.1% Sell 13,491 1.43 16.8 14.8 21.3 24.3 5.3 5.3 6.50 -44.8 3.00 19.7 -43.0 ELSOFT 2.96 3.30 11.5% Buy 818 0.57 13.1 14.9 22.7 19.9 3.1 3.6 2.97 -0.3 2.22 33.3 9.6 INARI 2.46 2.45 -0.4% Under Review 7,753 0.47 8.2 10.3 29.9 23.8 2.4 3.0 2.56 -3.9 1.54 59.7 8.5 MPI 11.34 11.50 1.4% Under Review 2,255 0.73 69.5 79.8 16.3 14.2 2.8 2.8 14.52 -21.9 7.57 49.8 -10.1 UNISEM 2.84 2.75 -3.2% Buy 2,065 1.00 13.2 18.7 21.5 15.1 3.9 3.9 4.15 -31.6 1.60 77.5 -22.2 TECHNOLOGY Semiconductor & Electronics TRANSPORTATION Airlines AIRASIA 3.37 3.15 -6.5% Buy 11,262 0.85 28.3 28.3 11.9 11.9 23.7 2.4 4.75 -29.1 2.92 15.4 0.6 AIRPORT 9.14 8.79 -3.8% Sell 15,165 0.88 33.8 35.7 27.1 25.6 1.6 1.1 9.98 -8.4 7.98 14.5 4.0 Freight & Tankers PTRANS 0.29 0.42 47.4% Buy 394 na 2.2 3.4 12.9 8.4 3.5 3.6 0.38 -25.4 0.23 26.7 1.8 TNLOGIS 1.01 1.10 8.9% Sell 461 0.91 10.0 9.7 10.1 10.4 0.0 4.0 1.79 -43.7 0.93 8.6 -24.6 WPRTS 3.65 3.78 3.6% Sell 12,447 0.56 15.6 20.0 23.4 18.2 3.2 4.1 3.95 -7.6 3.10 17.7 -1.4 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) % upside Recom Market Cap. (S$m) Beta EPS (cent) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52week 52week % Chg High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 25.23 32.80 30.0% Buy 64,623 1.23 212.4 246.0 11.9 10.3 3.6 3.6 30.8 -18.0 19.68 28.2 3.2 OCBC 11.36 14.50 27.6% Buy 47,609 1.19 109.4 123.1 10.4 9.2 6.7 7.7 14.0 -19.1 10.83 4.9 -8.3 UOB 27.06 33.70 24.5% Buy 45,140 1.18 229.5 255.2 11.8 11.8 3.0 3.0 30.4 -10.9 22.79 18.7 3.0 PLANTATIONS WILMAR 3.27 3.27 0.0% Hold 20,923 0.80 22.5 25.1 14.6 13.0 2.8 3.1 3.4 -4.4 2.97 10.1 5.8 IFAR 0.21 0.20 -4.8% Sell 301 1.15 3.0 3.0 6.9 7.0 2.0 2.0 0.5 -55.8 0.21 0.0 -46.2 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
14. RESULTS UPDATE www .bursamids.com Thursday, August 16, 2018 Sector: Consumer THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM1.25 (+13.8%) Hup Seng Industries Berhad Last Traded: RM1.10 Expects Back End Loaded Results Damia Othman Tel: +603-2167-9602 Buy damia@ta.com.my Review Hup Seng Industries Berhad’s (Hup Seng) 1H18 adjusted net profit came in at 44% and 42% of ours and consensus full-year forecasts. However, we deem this as within estimates as results are expected to be back-end loaded due to decreasing crude palm oil price and weakening of Ringgit, which bode well for 2H18 earnings. 1H18 revenue increased by 2.6% YoY to RM146.9mn on the back of i) increase domestic sales (+7.0%) from wholesale and modern channels; ii) which partly offset by decline in export sales (-8.0%) due to strong Ringgit in 1H18. PBT declined by 3.4% YoY to RM26.8mn on the back of i) lower export sales from strong Ringgit; and ii) higher operating costs. QoQ, revenue declined by 9.6% to RM69.7mn mainly dragged by decline in export sales from Indonesia, Mauritius and Myanmar due to slowdown in sales from these countries. PBT declined by 20.5% QoQ to RM11.9mn due to increase in operating costs which we believe is due to higher energy costs for oven operations and logistics. The group declared a first-tier interim dividend of 2.0sen/share during the quarter under review. Impact No change to our earnings forecasts. www.taonline.com.my Stock Return Information FBM KLCI Expected Share Price Return (%) Expected Dividend Return (%) Expected Total Return (%) Share Information Bloomberg Code Stock Code Listing Issued Share (mn) Market Cap (RMmn) Par Value (RM) 52-wk Hi/Lo (RM) Estimated Free Float (%) Beta (x) 3-Month Average Volume ('000) We maintain our FY18 refined palm oil assumption at average RM3,000/tonne (RM3,300/tonne in FY17) and this will provide earnings support for the year. Note that crude palm oil price is in a downtrend and the decline is expected to reduce the costs of palm olein for Hup Seng. HSI MK 5024 Main Market 800.0 880.0 0.1 1.21/1.02 29.3 0.5 41.8 Top 3 Shareholders (%) HSB Group Sdn Bhd Norges Bank Cekap Kapital Sdn Bhd 51.0 2.8 2.5 Share Performance (%) Price Change Hup Seng 1 mth 3.8 3 mth (6.8) 12 mth (8.3) FBM KLCI 3.4 (3.9) 0.6 Financial Info Debt to equity ratio Outlook Topline growth for Hup Seng is expected to come from improved export sales to the Middle East and China markets on the back of i) higher sales incentives; ii) promotional sponsorship initiatives for the distributors; iii) and weakening of Ringgit to US Dollar in 2H18. While domestic sales are expected to grow organically by 2.8% YoY for FY18. 1,784.94 13.8 5.5 13.8 ROA (%) ROE (%) NTA/Share (RM) Price/ NTA (x) FY18 Net Cash 19.1 28.8 0.2 6.2 FY19 Net cash 19.9 30.2 0.2 6.1 Financial Info vs TA vs Consensus % of FY18 44 Within 42 Within (12-Mth) Share Price relative to the FBMKLCI We believe that implementation of tax-break period in Malaysia as well as implementation of Sales and Services Tax (SST) in September would have immaterial impact on Hup Seng’s earnings as the group sells stapled goods, which demand is inelastic to change in price of the goods. However, the increase in minimum wage may pressurise the staff costs to rise further. Source: Bloomberg Page 1 of 2
15. 16-Aug-18 Valuation Maintain our Buy call on Hup Seng with unchanged target price of RM1 .25/share based on DDM valuation (k: 7.6%; g: 2.5%). Table 1: Earnings Summary (RMmn) FYE 31 Dec (RMmn) Revenue EBITDA EBIT Exceptional Item Reported PBT Reported Net Profit Adj Net profit Adj EPS (sen) EPS Growth (%) PER (x) Net Dividend (sen) Dividend Yield (%) FY16 285.6 69.5 62.9 68.9 66.3 49.4 48.8 6.1 (9.6) 20.3 6.0 5.5 FY17 299.7 62.5 56.0 61.8 59.4 44.4 43.8 5.5 (10.0) 22.5 6.0 5.5 FY18E 312.4 65.8 59.6 65.8 62.6 46.6 46.6 5.8 4.9 21.5 6.0 5.5 FY19F 325.7 69.2 63.1 69.2 66.2 49.3 49.3 6.2 5.8 20.3 6.0 5.5 FY20F 339.4 70.8 64.9 70.8 68.1 50.8 50.8 6.3 2.9 19.7 6.0 5.5 QoQ (%) (9.6) (8.6) (11.3) (18.7) 0.5 (44.9) (20.5) (18.9) (21.0) (21.7) (20.9) nm %-points (2.1) (2.3) (1.8) 0.5 YoY (%) 0.7 2.2 (1.9) 8.7 (1.9) nm (2.8) (3.0) (2.7) 1.6 (2.7) nm %-points 1.4 (0.6) (0.4) (0.1) Table 2: 2QFY18 Results Analysis (RMmn) FYE 31 Dec (RMmn) Revenue Cost of sales Gross profit EBITDA Depreciation Extraordinary Items Profit Before Tax Taxation Net Profit Adj. Net Profit EPS (sen) DPS (sen) 2QFY17 69.3 (43.7) 25.6 12.2 1.4 (0.2) 12.2 (3.2) 9.0 8.8 1.1 2.0 1QFY18 77.1 (48.8) 28.3 16.3 1.4 0.4 14.9 (3.8) 11.1 11.5 1.4 - 2QFY18 69.7 (44.6) 25.1 13.3 1.4 0.2 11.9 (3.1) 8.8 9.0 1.1 2.0 17.6 17.6 13.0 26.1 21.1 19.3 14.4 25.5 19.0 17.0 12.6 26.1 EBIT Margin (%) PBT Margin (%) Net Margin (%) Tax Rate (%) 1HFY17 143.1 (88.8) 54.3 27.7 2.9 (0.3) 27.7 (7.1) 20.6 20.3 2.6 2.0 1HFY18 146.9 (93.5) 53.4 29.6 2.8 0.5 26.8 (6.9) 19.9 20.4 2.5 2.0 19.4 19.4 14.4 25.7 20.1 18.2 13.5 25.8 YoY (%) 2.6 5.2 (1.6) 6.7 (2.5) nm (3.4) (3.1) (3.5) 0.5 (3.5) nm %-points 0.8 (1.1) (0.9) 0.1 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 and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, August 16, 2018, the analyst, Damia Othman, who prepared this report, has interest in the following securities covered in this report: (a) nil This report has been prepared by TA SECURITIES HOLDINGS BERHAD for purposes of Mid and Small Cap Research Scheme ("MidS") administered by Bursa Malaysia Berhad and will be compensated to undertake the scheme. TA SECURITIES HOLDINGS BERHAD has produced this report independent of any influence from the MidS or the subject company. For more information about MidS and other research reports, please visit Bursa Malaysia’s website at: www.bursamids.com Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 2
16. COMPANY UPDATE Thursday , August 16, 2018 FBMKLCI: 1,785.94 Sector: Consumer THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Nestle (Malaysia) Berhad TP: RM129.90 (-11.8%) Last Traded: RM146.50 Consumer Sentiment Supports Domestic Growth Damia Othman Tel: +603-2167-9602 damia@ta.com.my Key takeaways from Nestle’s analyst briefing are: i) improved consumer sentiment would lead to strong domestic demands; ii) stable gross margin from favourable raw material prices; as well as iii) SST expectations. We make no change to our earnings forecast. Maintain our Sell call on the stock with unchanged target price of RM129.90/share based on DDM valuation. Improved Consumer Sentiment The Malaysian Consumer Sentiment Index has jumped to 132.9-pts in 2Q18 versus 80.7-pts in 2Q17 after the 14th General Election. We believe that this phenomenon is expected to indirectly lead to better sales volume for Nestle moving forward. Furthermore, the increase in minimum wage is expected to indirectly benefit the group as well. Hence, management guided that topline growth is expected to be in the range between 3.0% and 4.5% for FY18. Note that Nestle’s average revenue growth for the past three years was 3.1%. Management also shared that the number of workers earning minimum wage at the group is negligible hence there would be no significant earnings impact. Stable Gross Profit Margin We find that skimmed-milk powder has been in an uptrend recently and according to industry experts, skimmed-milk powder price is expected to increase in the next few months due to declining supply from severe draught in Australia. However, management has assured that the group has locked-in skimmed-milk powder price in the beginning of the year at a favourable rate until the end of FY18. The YoY decline in skimmed-milk powder costs to the group is expected to be offset by weakening of Ringgit to US Dollar. Given that 1H18 gross profit margin was 38.5%, we project the level to be sustained until the end of the year and reach 38.9% by end of FY18. Expectation of SST Looking back in the previous format of Sales and Services Tax (SST), Nestle was taxed with a 10% sales tax on Ready-to-Drink products and 5.0% of service tax on unfinished products, which are used as ingredients for other products. Despite that, 75% of Nestle’s finished goods are exempted from sales tax and services tax, which only applicable to a handful of unfinished goods e.g. MILO range. While in the case of Goods and Services Tax (GST), 95% of Nestle’s products were GST rated. Moving forward, management is awaiting further guidance from government on how the new SST will be implemented. We are neutral on this as we believe that impact is immaterial due to Nestle selling stapled goods therefore consumers demand is inelastic to change in prices. Impact We make no change to our earnings forecasts. Sell www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (RMmn) Par Value (RM) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) Nestle SA EPF NESZ MK 4707 Main Market 234.5 34,354.3 1.0 163.00/84.00 229.3 15.9 0.5 72.6 6.8 Forecast Revision (%) Forecast Revision (%) Net Profit (RM mn) Consensus TA/Consensus (%) Previous Rating FY18 FY19 0.0 0.0 755.6 844.6 721.3 778.9 104.8 108.4 Sell (Maintained) Financial Indicators Net debt/equity (%) ROE (%) ROA (%) NTA/Share (RM) Price/ NTA (x) FY18 70.8 109.2 27.4 2.7 54.5 FY19 50.3 109.1 30.1 3.0 48.2 Share Performance Price Change (%) 1 mth 3 mth 6 mth 12 mth Nestle (1.1) 3.5 22.7 74.2 FBMKLCI 3.4 (3.9) (2.8) 0.7 (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 3
17. 16-Aug-18 Valuation Maintain Sell call on the stock with unchanged target price of RM129 .90/share based on DDM valuation (k: 6.0%, g: 3.0%). Earnings Summary PROFIT & LOSS FYE Dec 31 (RMmn) Revenue EBITDA EBIT Reported PBT Reported Net Profit Adj. Net Profit EPS (sen) Adj. EPS (sen) PER (x) DPS (%) Div. Yield (%) FY16 5,063.5 931.6 798.8 766.5 637.1 599.3 271.7 255.6 57.2 270.0 1.8 FY17 5,260.5 978.8 847.9 814.1 645.8 644.3 274.8 274.8 53.2 275.0 1.9 FY18E 5,440.8 1,115.8 982.9 944.5 755.6 755.6 322.2 322.2 45.3 300.0 2.1 FY19F 5,712.8 1,219.7 1,085.2 1,055.7 844.6 844.6 360.2 360.2 40.6 325.0 2.2 FY20F 5,998.5 1,327.7 1,186.8 1,152.9 922.3 922.3 393.3 393.3 37.1 350.0 2.4 FY16 766.5 FY17 814.1 FY18E 944.5 FY19F 1,055.7 FY20F 1,152.9 132.8 26.7 (145.0) 141.9 922.8 131.3 22.4 (117.6) (144.5) 705.7 132.9 23.4 (188.9) 21.3 933.1 134.5 24.4 (211.1) (9.7) 993.8 140.9 25.4 (230.6) (10.0) 1,078.6 Acquisition & capex Others CFI (123.1) 4.1 (119.0) (164.5) 3.7 (160.7) (150.0) (150.0) (200.0) (200.0) (200.0) (200.0) Net borrowing Dividend paid to owners Others CFF (204.3) (633.2) (37.6) (875.1) 262.6 (633.2) (36.0) (406.5) 100.0 (703.5) (603.5) (100.0) (762.1) (862.1) 50.0 (820.8) (770.8) (71.3) 138.4 179.6 (68.3) 107.8 CASH FLOW FYE Dec 31 (RMmn) PBT Adjustments for: Depreciation & amortisation Change in WC: Tax (paid) / refunded Others CFO Net change in cash BALANCE SHEET FYE Dec 31 (RMmn) PPE Goodwill Inv (Asso. + subsidiary) Deferred tax asset Others Non Current Assets FY16 1,353.1 62.4 4.2 20.2 24.7 1,464.6 FY17 1,373.7 62.0 4.7 19.2 24.3 1,483.9 FY18E 1,390.8 62.0 4.7 19.2 24.3 1,501.0 FY19F 1,456.2 62.0 4.7 19.2 24.3 1,566.5 FY20F 1,515.4 62.0 4.7 19.2 24.3 1,625.6 Inventories Receivables Cash Others Current Assets 455.3 544.3 24.0 6.4 1,030.0 467.3 580.8 12.6 12.3 1,073.1 447.2 600.8 192.2 12.3 1,252.5 469.5 630.8 123.9 12.3 1,236.6 493.0 662.3 231.7 12.3 1,399.4 Total Assets 2,494.6 2,557.0 2,753.5 2,803.0 3,025.0 93.1 86.1 91.3 270.5 84.3 89.7 121.0 295.0 114.3 89.7 121.0 325.0 84.3 89.7 121.0 295.0 99.3 89.7 121.0 310.0 Borrowings Payables Taxation Current liabilities 184.0 1,392.8 0.1 1,576.8 305.6 1,296.6 19.8 1,622.1 375.6 1,341.1 19.8 1,736.5 305.6 1,408.1 19.8 1,733.6 340.6 1,478.5 19.8 1,839.0 Total liabilities 1,847.4 1,917.1 2,061.5 2,028.6 2,149.0 234.5 412.7 647.2 267.5 372.4 639.9 267.5 424.5 692.0 267.5 507.0 774.5 267.5 608.5 876.0 2,494.6 2,557.0 2,753.5 2,803.0 3,025.0 FY16 58.6 92.6 24.0 0.4 15.8 11.8 4.7 5.1 1.6 FY17 59.3 100.7 25.2 0.6 16.1 12.2 3.9 6.1 7.5 FY18E 54.4 109.2 27.4 0.7 18.1 13.9 3.4 15.9 17.3 FY19F 48.1 109.1 30.1 0.5 19.0 14.8 5.0 10.4 11.8 FY20F 42.1 105.3 30.5 0.5 19.8 15.4 5.0 9.4 9.2 Borrowings Employee benefits DTL Non Current Liabilities Financed by Equity Share capital Reserves Total Equities Liabilities and Equities FINANCIAL RATIOS FYE Dec 31 (RMmn) P/NTA (x) ROE (%) ROA (%) Net Gearing (x) EBIT Margin (%) Net Margin (%) Revenue Growth (%) EBIT Growth (%) Net Profit Growth (%) Page 2 of 3
18. 16-Aug-18 (TH I S P A GE IS IN TE N TI ON AL L Y L E F T B L AN K ) Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, August 16, 2018, the analyst, Damia Othman, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
19. RESULTS UPDATE Thursday , August 16, 2018 FBMKLCI: 1,785.94 Sector: Oil & Gas THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Petronas Chemicals Group Bhd TP: RM9.68 (+4.1%) Last Traded: RM9.30 Tax Boost in 2Q18 Kylie Chan Sze Zan HOLD Tel: +603-2167 9601 kyliechan @ta.com.my Review Petronas Chemicals Group’s (Pet Chem) 1H18 core profit of RM2.8bn (+21% YTD) was within expectations, accounting for 63%/66% of our fullyear forecasts and consensus’ estimates. We expect a softer 2H18 due to heavy statutory plant turnaround activities (TA). Better YTD results were primarily attributed to lower taxes, as 2Q18 effective tax rate dipped to 8% (2Q17: 12%). Correspondingly, management revised its FY18 tax rate guidance to 12%-15% (previous: 13%-16%). www.taonline.com.my Share Information Bloomberg Code PCHEM MK Stock Code 5218 Listing Main Market Share Cap (mn) 8,000 Market Cap (RMmn) 74,400 Par Value (RM) 0.10 52-wk Hi/Lo (RM) 7.08/9.51 12-mth Avg Daily Vol ('000 shrs) 7,696.0 Estimated Free Float (%) 20.0 Beta Nevertheless, to a lesser extent, profits were also boosted by: 1) stronger product spreads, and 2) increased sales volume (+9% YTD) from improved plant utilisation (PU) of 98% (1H17: 94%), and chunky capacity addition from PCFSSB urea plant (previously known as SAMUR). However, profits were partially negated by a stronger Ringgit versus USD. 2Q18 PU was sequentially lower at 95% (1Q18: 100%) due to: 1) maintenance works at PC Olefin, and 2) plant TA at the MTBE plant at Gebeng in Apr-18. Nevertheless, in spite of lower olefins and ethylene production in 2Q18, YTD sales volume was higher due to inventory product drawdown. Pet Chem declared higher 1st interim DPS of 14 sen in 2Q18 (2Q17: 12 sen). Key Takeaways from Conference Call Pet Chem’s smaller ethylene cracker (capacity: 400k tpa) has completed its statutory plant TA (start: 1 Jul-18) on 14 Aug 2018. Meanwhile, Mega Methanol Plant 2 (capacity: 1.67mn tpa) is currently in the process of shutting down for TA. This is in-line with management’s guidance of heavy statutory plant TA in 2H18. Meanwhile, management’s FY18-19 PU target is maintained at above 90%. For FY19, management provided tax rate guidance of 12%-15%, similar to FY18 levels. This is after taking to account RAPID tax incentives. Management does not expect RAPID projects to lower the group’s effective tax rates substantially, given that naphtha-based crackers have lower margins. Major Shareholders (%) 0.6 Petronas - 64.3 EPF - 6.9 Forecast Revision (%) FY18 Forecast Revision (%) FY19 4.9 6.4 Core Net Profit (RM mn) 4,560.4 4,624.1 Consensus 4,198.2 4,378.3 108.6 105.6 TA/Consensus (%) Previous Rating Hold (Maintained) Scorecard % of FY vs TA 63 Within vs Consensus 66 Within Financial Indicators Net Debt/Equity (x) FY18 FY19 Net Cash Net Cash ROA (%) 12.2 12.0 ROE (%) 15.1 14.3 NTA/Share (RM) 3.8 4.0 P/NTA (x) 2.5 2.3 Share Performance Price Change (%) PCHEM FBMKLCI 1 mth 4.8 3.4 3 mth 7.9 (3.9) 6 mth 14.8 (2.8) 12 mth 29.9 0.7 (12-Mth) Share Price relative to the FBMKLCI Pet Chem’s RAPID projects have reached 85% completion, on-track for its expected mechanical completion by end-18. Commercial start-up for the refinery and cracker is expected by 1H19, whilst the petrochemical plants are targeted for 2H19. Impact We lower our tax rate and capex assumptions in-line with management’s refreshed guidance. The latter is following management’s expectations that FY19 capex will amount to 50%-60% of FY18 spending. This, coupled with Source: Bloomberg Page 1 of 3
20. 16-Aug-18 other minor tweaks on account of 1H18 performance , results in an increase of 1%-6% to our FY18-20 estimates. Valuation Following the change in forecasts, our target price (TP) for Pet Chem is raised to RM9.68 (previous: RM9.05). Our TP is based on unchanged 9.5x FY19 EV/EBITDA. Maintain Hold. We believe that Pet Chem is fairly valued at this juncture. It is currently trading at 9.1x FY19 EV/EBITDA, which is above its historical average (8.0x) and implies a premium over regional peers’ average (8.4x). Furthermore, 2H18 would likely be dragged by heavy statutory plant TA. To recap, plants scheduled for TA include both ethane crackers, Asean Bintulu Fertilizer, and Mega Methanol Plant 2. In particular, we are concerned of margin compression due to closure of plants that produce high margin ethane chain products. Table 1: Earnings Summary FYE Dec (RM mn) 2016 Revenue E B ITDA E B ITDA ma rg in (% ) P reta x P rofit Reported Net P rofit Core Net P rofit EPS (s en) E P S g rowth (% ) PER (x) DP S (s en) Dividend Yield (% ) 2017 2018E 2019F 2020F 13,860.0 5,299.0 17,407.0 6,625.0 18,368.7 6,739.4 19,015.0 7,150.6 19,058.0 7,217.9 38.2 4,110.0 2,932.0 3,109.0 38.9 12.9 23.9 19.0 2.0 38.1 5,236.0 4,177.0 4,184.0 52.3 34.6 17.8 27.0 2.9 36.7 5,329.4 4,560.4 4,560.4 57.0 9.0 16.3 28.0 3.0 37.6 5,599.2 4,624.1 4,624.1 57.8 1.4 16.1 31.0 3.3 37.9 5,671.2 4,683.6 4,683.6 58.5 1.3 15.9 31.0 3.3 Table 2: 2Q18 Results Analysis Cumulative YE 31 Dec (RM mn) Revenue 2Q18 4,733.0 1Q18 4,951.0 QoQ (4.4) 2Q17 3,959.0 YoY 19.6 1H18 9,684.0 1H17 8,654.0 YoY 11.9 Core EBITDA 1,798.0 1,973.0 (8.9) 1,525.5 17.9 3,771.0 3,472.5 8.6 Deprecia tion (400.0) (411.0) (2.7) (403.0) (0.7) (811.0) (752.0) F ina nce Cos ts As s ocia tes 77.0 8.0 42.0 17.0 83.3 (52.9) 44.0 4.5 75.0 76.7 119.0 25.0 86.0 7.5 EI 12.0 (285.0) >-100 (9.0) >-100 (273.0) (16.0) Pretax Profit Ta xa tion Minority Interes t 1,495.0 (115.0) (8.0) 1,336.0 (229.0) (0.0) 11.9 1,162.0 28.7 (49.8) >100 (139.0) (59.0) (17.3) (86.4) 2,831.0 (344.0) (8.0) 2,798.0 (394.0) (145.0) 7.8 38.4 232.1 >100 1.2 (12.7) (94.5) Reported Net P rofit 1,372.0 1,107.0 23.9 964.0 42.3 2,479.0 2,259.0 9.7 Core Net Profit 1,360.0 1,392.0 (2.3) 973.0 39.8 2,752.0 2,275.0 21.0 Core E P S (s en) DP S (s en) 16.9 14.0 16.3 - 3.1 12.1 12.0 39.1 33.2 14.0 26.5 12.0 25.5 E B ITDA Ma rg in 38% 40% 39% 39% 40% Core Net Ma rg in 29% 28% 25% 28% 26% Page 2 of 3
21. 16-Aug-18 Table 3 : 2Q18 Segmental Analysis YE 31 Dec (RM mn) 2Q18 1Q18 2Q17 QoQ% YoY% 1H18 1H17 YoY% Olefins & Derivatives 2,754.0 3,151.0 2,539.0 (12.6) 8.5 5,905.0 5,761.0 2.5 Fertilisers & Methanol 2,002.0 1,787.0 1,445.0 12.0 38.5 3,789.0 2,952.0 >-100 (8.0) Revenue Others (23.0) Group 13.0 (25.0) 19.6 (10.0) 9,684.0 (59.0) 8,654.0 28.4 (83.1) 4,733.0 4,951.0 3,959.0 (4.4) 11.9 Olefins & Derivatives 945.0 1,106.0 949.0 (14.6) (0.4) 2,051.0 1,882.0 9.0 Fertilisers & Methanol 878.0 779.0 577.0 12.7 52.2 1,657.0 1,028.0 61.2 1,811.0 1,840.0 1,521.0 (1.6) 19.1 3,651.0 2,902.0 25.8 EBITDA Group EBITDA margin Olefins & Derivatives 34% 35% 37% 35% 33% Fertilisers & Methanol 44% 44% 40% 44% 35% Group 38% 37% 38% 38% 34% Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, August 16, 2018, the analyst, Kylie Chan Sze Zan, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
22. RESULTS UPDATE Thursday , August 16, 2018 FBMKLCI: 1,785.94 Sector: Power & Utilities THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Petronas Gas Berhad TP: RM20.23 (+8.4%) Last Traded: RM18.66 Potential of NBV Asset Valuation for TPA Tariffs Kylie Chan Sze Zan Tel: +603-2167 9601 HOLD kyliechan@ta.com.my Review Petronas Gas Berhad’s (Pet Gas) 1H18 core profit of RM994mn (+13% YTD) was within our expectations and consensus’, accounting for 51%/53% of full year estimates. Stronger results were underpinned by: 1) boost from Pengerang Regasification Terminal (PRGT) - which started operations in Nov-17, 2) lower taxes due to revision of deferred tax estimation to reflect tax incentives granted to PRGT, 3) operations and maintenance (O&M) revenue from Sabah Sarawak Gas Pipeline, and 4) lower repair and maintenance (R&M) costs for the Gas Transportation segment. The above more than offset drag from: 1) higher finance costs as capitalized interest costs for PRGT is now recognized following its completion, and 2) increased depreciation attributed to completion of capital projects at the Gas Processing and Utilities segments. Pet Gas declared a 2nd interim DPS of 16 sen in 2Q18 (2Q17: 16 sen), which brings YTD cumulative DPS to 32 sen (1H17: 31 sen). Key Takeaways from Conference Call Whilst Third Party Access (TPA) tariff negotiations are still in progress, management highlighted the possibility that the Energy Commission (EC) may transition to Net Book Value (NBV) methodology in valuing Pet Gas’ assets. The switch to NBV from Depreciated Replacement Value (DRC) methodology is in-line with current convention used for other regulated assets under the Incentive Based Regime (IBR). Nevertheless, discussions are fluid, and various alternatives are being negotiated at this juncture. This includes the possibility of a gradual or staggered transition to NBV, instead of an immediate switch to soften the impact of a lower asset base. This is given that circa 70% of Pet Gas’ pipelines exceed 20 years in age, and hence substantial capex is needed for replacement and upgrade. www.taonline.com.my Share Information Bloomberg Code PTG MK Stock Code 6033 Listing Main Market Share Cap (mn) 1,978.7 Market Cap (RMmn) 36,923.1 Par Value 1.00 52-wk Hi/Lo (RM) 19.50/15.82 12-mth Avg Daily Vol ('000 shrs) 831.0 Estimated Free Float (%) 21.0 Beta 0.8 Major Shareholders (%) Petronas - 60.7 EPF - 9.6 KWAP - 4.5 Forecast Revision FY18 Forecast Revision (%) FY19 0.0 0.0 Net Profit (RM mn) 1,961.2 1,976.0 Consensus 1,880.3 1,899.7 104.3 104.0 TA's / Consensus (%) Previous Rating Buy (Downgraded) Scorecard % of FY vs TA 51 Within vs Consensus 53 Within Financial Indicators Net Debt/Equity (x) FY18 FY19 0.03 Net Cash FCFPS (RM) 0.8 0.9 P/CFPS (x) 24.2 19.9 ROE (%) 14.6 14.0 ROA (%) 10.6 10.3 NTA/Share (RM) 6.6 7.0 Price/NTA (x) 2.8 2.7 Share Performance (%) Price Change PTG FBM KLCI Nevertheless, Pet Gas is optimistic that EC will implement reasonable and favourable tariffs to ensure the group’s sustainability and future growth in capital markets. To recap, EC targets to unveil final TPA tariffs by end-2018. 1 mth 1.6 3.4 3 mth 6.6 (3.9) 6 mth 6.6 (2.8) 12 mth (1.2) 0.7 Meanwhile, the group will likely finalize negotiations with offtaker Petronas, on the 2014-22 Gas Processing Agreement by Dec-18. Recall that this agreement is subject to a periodical review every 5 years. (12-Mth) Share Price relative to the FBMKLCI Impact Maintain forecasts as we expect 2H18 results to be slightly weaker due to lower contribution from PRGT. This is given the full capacity ramp-up since Apr-18, which leads to normalized facility costs, including opex and depreciation charges. Recall that PRGT’s 1Q18 margins were artificially inflated because Petronas paid for full capacity charge although costs were not fully ramped up. Source: Bloomberg Page 1 of 3
23. 16-Aug-18 Valuation We downgrade Pet Gas to Hold (previous: Buy) based on unchanged Sumof-Parts target price of RM20.23. We believe the stock is fairly valued at this juncture, and furthermore, regulatory risks are an overhang. It is a negative surprise that NBV asset valuation may potentially be applied for determination of TPA tariffs. This presents substantial downside risk as DRC translates to approximately 3x NBV. Table 1: Earnings Summary FYE Dec 31 (RM'mn) FY16 Revenue E B ITDA E B ITDA Ma rg in P reta x P rofit (% ) Net P rofit Core Net P rofit E P S - a dj E P S g rowth PER DP S Div yield (s en) (% ) (x) FY17 FY18E FY19F FY20F 4,561.3 4,809.6 5,276.0 5,312.0 5,349.5 2,954.5 64.8 3,167.4 65.9 3,461.5 65.6 3,488.6 65.7 3,502.9 65.5 2,106.8 2,252.7 2,463.6 2,503.8 2,539.4 1,733.6 1,792.7 1,961.2 1,976.0 2,004.1 1,728.1 87.3 1,776.5 89.8 1,961.2 99.1 1,976.0 99.9 2,004.1 101.3 2.9 20.8 10.4 18.8 0.8 18.7 1.4 18.4 (21.4) 21.3 (s en) 62 66 67 68 69 (% ) 3.3 3.5 3.6 3.6 3.7 Table 2: 2Q18 Results Analysis YE 31 Dec 2Q18 1Q18 1,358.3 920.4 (278.6) 1,350.8 904.6 (273.4) Net F ina nce Cos ts As s ocia tes EI (17.5) 16.5 (8.0) (18.0) 17.0 6.8 Pretax Profit Ta xa tion 632.8 (95.8) Minority Interes t Reported Net P rofit Core Net Profit Revenue EBITDA Deprecia tion QoQ 0.6 1.7 1.9 2Q17 YoY Cumulative 1H18 1H17 YoY 1,173.5 785.7 (250.6) 15.7 17.1 11.2 2,709.0 1,825.0 (552.0) 2,342.7 1,568.8 (478.9) (3.0) (2.8) >-100 (8.4) 4.5 6.0 >100 >100 >-100 (35.5) 33.6 (1.2) (19.5) 35.0 8.8 637.0 (131.6) (0.7) (27.3) 537.1 (111.2) 17.8 (13.9) 1,269.8 (227.4) 1,114.2 (225.1) 14.0 1.0 (27.8) 509.3 517.3 (22.1) 483.2 476.5 25.4 5.4 8.6 (0.6) 425.3 419.4 >100 19.7 23.3 (49.9) 992.5 993.8 (0.7) 888.4 879.6 >100 11.7 13.0 Core E P S (s en) 26.1 24.1 8.6 21.2 23.4 50.2 44.5 13.0 DP S (s en) 16.0 16.0 32.0 31.0 16.0 E B ITDA Ma rg in 68% 67% 67% 67% 67% Core Net Ma rg in 38% 35% 36% 37% 38% 15.6 16.3 15.3 82.4 (4.1) >-100 Page 2 of 3
24. 16-Aug-18 Table 3 : 2Q18 Segmental Analysis RM mn 2Q18 1Q18 % QoQ 2Q17 % YoY 1H18 1H17 %YTD Sales: - Gas processing - Gas transportation Throughput services sales - Utilities - Regasification Total 395.2 344.2 739.4 308.3 310.6 1,358.3 393.8 333.7 727.5 323.7 299.6 1,350.8 0.4 3.1 1.6 (4.8) 3.7 0.6 387.5 327.4 714.9 293.5 165.2 1,173.5 171.2 265.6 436.8 40.4 177.0 654.2 161.3 260.0 421.4 45.9 174.1 641.3 6.1 2.1 3.7 (11.9) 1.7 2.0 161.1 249.9 411.0 42.7 73.4 527.2 43.3% 77.2% 59.1% 13.1% 57.0% 48.2% 41.0% 77.9% 57.9% 14.2% 58.1% 47.5% 2.0 5.1 3.4 5.0 88.1 15.7 789.0 677.9 1,466.9 631.9 610.2 2,709.0 777.2 651.1 1,428.3 584.9 329.4 2,342.7 1.5 4.1 2.7 8.0 85.2 15.6 6.2 6.3 6.3 (5.3) 141.1 24.1 332.5 525.6 858.1 86.3 351.0 1,295.5 337.8 503.2 841.0 86.2 151.0 1,078.3 (1.6) 4.5 2.0 0.1 132.4 20.1 Gross Profit: - Gas processing - Gas transportation Throughput services sales - Utilities - Regasification Total Gross Margin: - Gas processing - Gas transportation Throughput services sales - Utilities - Regasification Blended average 41.6% 76.3% 57.5% 14.6% 44.4% 44.9% 42.1% 77.5% 58.5% 13.7% 57.5% 47.8% 43.5% 77.3% 58.9% 14.7% 45.8% 46.0% Table 3: SOP Valuation SOP Valuation Equity Value (RM mn) EV/Share % of Total SOTP (RM) Core Operations* 39,057.9 P engerang AS U 368.2 Gas Malaysia (14.8% S take) 594.8 Net Cash/ (Debt) 14.5 Total 40,035.4 *exc luding c ontribution from A S U 19.74 0.19 0.30 0.01 20.23 98% 1% 1% 0% Basis NP V ba sed on DCF (WACC: 7.8% , Termina l Growth: 3% ) P roject NP V (25 yea rs, S ta rt 2019, P roject IRR: 15% ) Consensus market va lue As a t end-2018E Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, August 16, 2018, the analyst, Kylie Chan Sze Zan, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
25. RESULTS UPDATE Thursday , August 16, 2018 FBMKLCI: 1,785.94 Sector: Finance THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM25.80 (+5.4%) Public Bank Berhad Last Traded: RM24.48 Results Within Expectations Li Hsia Wong Tel: +603-2167 9610 HOLD liwong@ta.com.my Review PBB’s 1HFY18 results came within expectations. Although results were weaker QoQ, 1H net profit improved YoY, albeit at a softer pace of 8.6% YoY to RM2,801.6mn. The YoY increase, was underpinned by stronger income growth, positive JAWS and decrease in loan allowances. PBB’s 1HFY18 bottomline accounted for 47% and 48% of ours and consensus full year estimates respectively. ROE stood at 15.0%, within management’s FY18 KPI target. PBB declared its first interim single tier dividend of 32 sen per share – an increase from 27 sen per share in 1HFY17. Based on YTD earnings, this translates to a payout ratio of around 44.3% (1HFY17: 40.4% payout). www.taonline.com.my Share Information Bloomberg Code PBK MK Stock Code 1295 Listing Main Market 3882.1 Share Cap (mn) 95,033.8 Market Cap (RMmn) 25.78/19.90 52-wk Hi/Lo (RM) 5304.5 12-mth Avg Daily Vol ('000 shrs) 63.0 Estimated Free Float (%) 0.83 Beta Major Shareholders (%) Consolidated Teh Holdings - 22.9 KWSP - 12.8 Forecast Revision Accounting for 48% of our full year forecast, total operating income broadened 3.8% YoY. Net interest income (NII) expanded at a modest pace of 3.1% YoY to RM3,777.1mn. Annualised domestic loans led growth in advances with a 4.3% YoY increase. Annualised loan growth for the entire group rose by 4.1%. Falling slightly behind industry’s 5.3% YoY increase, PBB’s domestic loans market share slipped 10 bps YTD to 17.7% (2017: 17.8%). Sequentially, net interest margin (NIM) declined by 9 bps, partly attributed to competition which drove asset yields lower and raised funding costs. Yearly, NIM slipped to 2.24% from 2.26%, eroding the positive impact from the increase in the OPR in 1Q2018. Exceeding loan growth, PBB’s annualised total and domestic deposits accelerated by 6.7% and 7.4% respectively. PBB’s market share in the customer deposit space climbed to 16.9% from 16.8% in 2017. Liquidity buffers remained healthy with gross loan to fund ratio of around 89% (FY17: 90.0%). Non-interest income (non-NII) contracted for the second straight quarter, falling 10.2% QoQ in 2QFY18. Yearly, 1H non-NII widened by 4.9% YoY to RM1,128.6mn, mostly attributed to gains in fee and commission income (+6.7% YoY) as management fees and fees on sale of unit trust improved. Having launched 4 new funds in 1H, Net Asset Value of Funds (NAV) under management stood at RM80.2bn (FY17: RM81.4bn). Over the in bancassurance business, annualized new premium (ANP) stood at RM137.8mn (1HFY17: RM133.7mn). By segment, PBT contribution from overseas operations declined by 13.0% YoY due to less favourable FX movements. Overseas operations accounted for some 8% of the group’s PBT. Meanwhile, Treasury operations and Investment banking saw stronger PBT of +9.5% YoY and +8.9% YoY. Growths were also observed in the Fund management (+9.0% YoY) and Corporate lending (+5.0% YoY) segments. The HP segment remained weak as PBT slipped 11.6% YoY on the back of Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating Financial Indicators ROE (%) ROA (%) CTI Ratio (%) Gross NPL Ratio (%) BV/ Share (RM) Price/ BV (x) FY18 FY19 5918.4 6429.5 5823.0 6227.0 101.6 103.3 Hold (Downgraded) FY18 FY19 15.2 1.5 31.9 0.6 10.49 2.3 15.1 1.5 31.3 0.5 11.44 2.1 % of FY 47.0 48.0 Within Within PBK 1.7 2.6 6.4 18.8 FBM KLCI 0.1 2.6 (3.8) 0.7 Scorecard vs. TA vs. Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 3
26. 16-Aug-18 contraction in HP yields . Elsewhere, Retail operations (comprising individuals and SMEs), which accounts for 51% of total segment profits increased by 2.6%. Upholding healthy asset quality, total allowances for loans and other assets decreased by 8.2% YoY to RM86.0mn in 1HFY18 (1HFY17: RM93.6mn). This translates to a total credit cost ratio of 6 bps (2017: 7 bps). The gross impaired loans ratio (GIL) stayed pat at 0.5% (Dec 2017: 0.5%) while loan loss coverage jumped to 117.3% (Dec 2017: 95.5%). The GIL for key segments namely residential financing (0.5%) and transport vehicle financing (0.6%) were stable. There was however, a slight 10 bps uptick in the GIL for commercial properties. PBB remains backed by solid capital position with Common Equity Tier 1 (CET1) Capital Ratio, Tier 1 Capital Ratio and Total Capital Ratio of 12.7%, 13.4% and 16.3% respectively. Impact No change to our earnings estimates. Outlook Management maintained modest FY18 targets where loan growth is guided to moderately increase by around 5% (vs. 3.6% in FY17). All other KPI targets include to maintain GIL ratio <1% and ROE of between 14% and 15%. Nevertheless, management noted that the operating environment remains challenging and the modest topline growth momentum could continue to wane. Adding to pressures, competition in key loan segments such as residential mortgages remain robust. Stable NIM recorded in 1HFY18 would also likely see some compression due to competition in the deposit space. On a positive note, asset quality is expected to stay resilient. Valuation TP is maintained at RM25.80, valuing the stock at an implied FY19e PBV of 2.3x. We reiterate our HOLD recommendation on PBB. Key upside/downside risks to PBB’s TP include: 1) stronger-than-expected contributions from operations overseas, 2) healthier demand for bancassurance and wealth management products, 3) unexpected increase in unemployment rate resulting in high default rates among retail borrowers, and 4) potential outflow of foreign funds resulting in a sharp decline in the foreign shareholding level. Table 1: Earnings Summary (RMmn) FYE Dec Net interest income Non-interest income Islamic Banking Total operating income Pre-provisioning profit Pretax profit Net profit EPS (sen) EPS growth (%) Gross div (sen) Div yield (%) FY16 6920.4 2094.4 941.6 9956.5 6745.0 6554.0 5206.9 123.0 2.9 58.0 2.4 FY17 7417.1 2331.0 998.7 10746.8 7318.6 7117.7 5470.0 129.2 5.1 61.0 2.5 FY18F 7824.2 2526.5 1058.6 11409.3 7767.4 7494.2 5918.4 139.8 8.2 65.0 2.7 FY19F 8325.4 2838.2 1143.3 12307.0 8459.1 8133.1 6429.5 151.9 8.6 65.0 2.7 FY20F 8973.7 3129.7 1234.8 13338.2 9221.4 8860.6 7011.6 165.7 9.1 65.0 2.7 Page 2 of 3
27. 16-Aug-18 Table 2 : 2QFY18 Results Analysis (RMmn) YE 31 Dec 2QFY17 1QFY18 Net interest income 2QFY18 QoQ YoY YTD FY17 YTD FY18 YoY 1,841.0 1,897.4 1,879.7 (0.9) 2.1 3,665.2 3,777.1 3.1 247.4 265.7 262.6 (1.2) 6.1 495.1 528.3 6.7 Income from Islamic Banking business Non interest income 561.7 594.7 533.9 (10.2) (5.0) 1,076.1 1,128.6 4.9 Total income 2,650.1 2,757.9 2,676.2 (3.0) 1.0 5,236.5 5,434.0 3.8 Operating expenses (881.8) (899.3) (898.3) (0.1) 1.9 (1,768.7) (1,797.6) 1.6 Operating profit 1,768.3 1,858.6 1,777.8 (4.3) 0.5 3,467.8 3,636.4 4.9 Loan impairment allowances (26.5) (69.3) (17.5) (74.7) (34.0) (93.6) (86.0) (8.2) (2.1) 4.7 (1.1) n.m. n.m. (2.6) (2.0) n.m. PBT 1,739.6 1,794.0 1,759.2 (1.9) 1.1 3,371.6 3,548.5 5.2 Net profit 1,331.8 1,405.4 1,396.2 (0.7) 4.8 2,579.8 2,801.6 8.6 EPS (sen) 34.3 36.2 36.0 (0.7) 4.8 66.5 72.2 8.6 Profit from associates Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, August 16, 2018, the analyst, Wong Li Hsia, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
28. COMPANY UPDATE Thursday , August 16, 2018 FBMKLCI: 1,785.94 Sector: Consumer THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM7.00 (-16.6%) Scientex Berhad Last Traded: RM8.40 Expands Its Footprints in Melaka Damia Othman Tel: +603-2167 9602 Sell damia@ta.com.my Yesterday, Scientex Berhad announced a propose acquisition of two pieces of freehold agriculture lands in Durian Tunggal, Melaka with a total area of 200 acres for a total cash consideration of RM68.2mn (RM7.50/sq.ft.). We are positive long term as this is expected to strengthen its existing market presence as a property developer in Melaka. We make no change to earnings forecasts. Maintain Sell on Scientex with unchanged target price of RM7.00/share based on SOP valuation. Projects in Durian Tunggal To recap, Scientex has an existing property development project in Durian Tunggal with total area of 8.6mn sq.ft. in Durian Tunggal. Since its maiden township launch in end-2017, Scientex has launched 660 units of affordable landed homes and recently in mid-2018, the group has launched additional 116 units of affordable landed homes under the Malacca Affordable Housing (RMM) programme. We believe the estimated Gross Development Value in the existing Durian Tunggal township is RM400mn with RM200mn available for future developments. The proposed lands in Durian Tunggal are located opposite of existing Scientex Durian Tunggal township. Furthermore, the lands are in close proximity to major highways in the area and various famous tourists’ spots. The land is also 9KM away from Ayer Keroh Toll. Plans for Mixed Development Management guided that Scientex plans to build mixed development projects in the new Durian Tunggal lands. For the time being, there is no GDV guided by management as the acquisition is still at a preliminary stage. However, we believe that the GDV will be similar to its existing Durian Tunggal developments. Hence, the acquisition is expected to increase Scientex’s Durian Tunggal development projects to a total of RM800mn in GDV. www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (RMmn) Par value (RM) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) Scientex Holdings Sdn Bhd Scientex Leasing Sdn Bhd Lim Teck Meng Sdn Bhd TM Lim Sdn Bhd SCI MK 4731 Main Market 488.9 4,107.0 0.5 9.85/6.51 239.1 31.6 0.82 21.4 9.7 8.4 7.9 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 0.0 0.0 267.8 281.1 273.5 318.3 97.9 88.3 Sell (Maintained) Financial Indicators Net debt/ equity (%) ROE (%) ROA (%) NTA/Share (RM) Price/ NTA (x) Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth FY18 41.2 14.9 8.8 3.6 2.3 FY19 41.6 14.5 8.5 3.9 2.1 SCIENTEX 9.5 7.7 0.8 (2.1) FBM KLCI 3.4 (3.9) (2.9) 0.6 (12-Mth) Share Price relative to the FBMKLCI Price is Fairly Valued According to various online resources, current market price of freehold agricultural lands in Durian Tunggal are priced at RM9.00/sq.ft. Hence, we find that Scientex acquisition price of RM7.50/sq.ft. which is a 16.8% discount to retail market value is fair given the huge landbank size. Impact We make no change to earnings forecasts. We believe the acquisition will be financed by internally generated funds and 80% from borrowings. With an estimated gearing of 0.4x for FY18, we believe that Scientex will be able to bear the costs to finance the land. Source: Bloomberg Page 1 of 3
29. 16-Aug-18 Recommendation Maintain our Sell call on Scientex with unchanged target price of RM7 .00/share based on SOP valuation. Table 1 : Valuation Method Sum-of-Parts FY19 140.6 140.6 Manufacturing Property PAT (RMmn) FY20 151.2 151.2 Target PER (x) 17 6 CY19 145.0 145.0 Segment Value (RMmn) 2,502.0 922.2 Equity value (RMmn) Share cap (mn) Target Price (RM) 3,424.2 488.9 7.00 Earnings Summary PROFIT & LOSS BALANCE SHEET FYE July (RMmn) FY16 Revenue FY17 FY18E FY19F FY20F FYE July (RMmn) 2,201.0 2,403.2 2,525.1 2,680.6 2,953.6 Gross Profit 440.2 493.2 538.7 567.4 586.5 Deferred tax assets EBITDA 367.1 388.3 446.0 481.0 508.0 Goodwill EBIT 312.6 325.1 375.1 396.9 408.8 Others Reported PBT 306.3 318.0 327.6 343.9 370.0 Non-current assets Reported net profit 240.9 255.9 267.8 281.1 302.5 Adj. net profit FY16 PPE FY18E FY19F FY20F 952.5 1,012.6 FY17 1,201.7 1,417.6 1,618.3 18.9 2.7 18.9 18.9 18.9 12.1 12.1 12.1 12.1 12.1 520.7 581.1 581.1 581.1 581.1 1,488.0 1,624.7 1,813.8 2,029.7 2,230.5 240.9 255.9 267.8 281.1 302.5 Property dev. costs 174.7 165.1 165.1 165.1 165.1 Basic EPS (sen) 106.0 54.8 54.8 57.5 61.9 Inventories 137.0 168.8 177.3 188.3 207.4 Adj. EPS (sen) 49.3 52.3 54.8 57.5 61.9 Trade & Other receivables 349.1 426.4 448.1 475.7 524.1 GDPS (sen) 16.0 17.0 18.0 19.0 20.0 Tax recoverable 1.7 0.9 0.9 0.9 0.9 100.6 191.9 451.4 443.3 183.2 763.1 953.1 1,242.8 1,273.2 1,080.7 2,251.1 2,577.8 3,056.6 3,302.9 3,311.2 Cash and equivalents CASH FLOW FYE July (RMmn) Current Assets FY16 FY17 FY18E FY19F FY20F 306.3 318.0 327.6 343.9 370.0 Depreciation of PPE 54.5 63.2 70.9 84.1 99.2 Borrowings 238.9 166.5 436.5 606.5 406.5 Finance costs 13.7 14.0 53.9 59.1 44.4 Retirement benefits 23.8 27.8 27.8 27.8 27.8 Others 16.7 2.2 - - - Deffered tax liabilities 35.0 35.9 35.9 35.9 35.9 391.3 397.4 452.4 487.0 513.6 297.7 230.2 500.2 670.2 470.2 Borrowings 232.7 301.2 301.2 201.2 201.2 Trade & other payables 431.4 419.4 440.7 467.9 515.5 47.6 23.0 23.0 23.0 23.0 711.8 743.7 764.9 692.1 739.7 PBT Assets Adjustments for: Op profit before WC (+)/- in inventories (6.7) (31.5) (8.6) (10.9) (19.2) (+)/- in receivables (34.9) (68.9) (21.6) (27.6) (48.4) 68.0 16.5 21.3 27.1 47.7 (65.4) (69.6) (59.8) (62.8) (67.5) +/(-) in payables Income Tax Paid Non Current Liabilities Others CFO 380.3 322.8 425.7 412.9 426.1 Current liabilities Purchase of PPE (281.4) (127.2) (260.0) (300.0) (300.0) Share capital Others (279.1) (126.2) - - - (560.6) (253.4) (260.0) (300.0) (300.0) CFI 115.0 411.8 453.8 453.8 453.8 Reserves 1,060.2 1,123.6 1,269.2 1,418.3 1,579.0 Shareholders' Funds 1,175.2 1,535.5 1,723.0 1,872.1 2,032.8 66.5 68.4 68.4 68.4 68.4 Equity 1,241.7 1,603.9 1,791.5 1,940.6 2,101.2 Equity & Liabilities 2,251.1 2,577.8 3,056.6 3,302.9 3,311.2 MI Net term loans 117.6 (7.8) 270.0 70.0 (200.0) Dividend paid (49.8) (103.0) (122.2) (132.0) (141.8) Finance costs paid (17.4) (18.6) (53.9) (59.1) (44.4) Others 139.7 151.2 - - - 190.2 21.8 93.8 (121.1) (386.2) CFF FINANCIAL RATIOS FYE July (RMmn) Net Cash Flow 10.0 91.3 259.5 (8.2) (260.1) FY16 FY17 FY18E P/E (x) 17.1 16.1 15.3 FY19F 14.6 FY20F P/BV (x) 3.3 2.6 2.3 2.1 2.0 Dividend yield (%) 1.9 2.0 2.1 2.3 2.4 ROE (%) 19.4 16.0 14.9 14.5 14.4 ROA (%) 10.7 9.9 8.8 8.5 9.1 EBIT margin (%) 14.2 13.5 14.9 14.8 13.8 Net margin (%) 10.9 10.6 10.6 10.5 10.2 Gearing (x) 0.4 0.3 0.4 0.4 0.3 13.6 Page 2 of 3
30. 16-Aug-18 (TH I S P A GE IS IN TE N TI ON AL L Y L E F T B L AN K ) Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, August 16, 2018, the analyst, Damia Othman, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
31. Thursday , 16 August, 2018 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only L oc al Te ch n ic al R ep o r ts 1. D ai l y Te ch n ic a l St o ck s W at ch 2. D ai l y Mon e y F low of T e ch n i c a l St o ck W at ch 3. D ai l y Mon e y F low of FB MK L CI 4. D ai l y S t o c k S c r e e n Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
32. Technical View Thursday , August 16, 2018 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Technical Stock Watch Malaysia FBM KLCI: 1,785.94 (+2.16, +0.12%) Chartist: Stephen Soo Close Name 15/Aug FBMKLCI 1785.94 Tel: +603-2167 9607 Change High Low 2.16 1,789.05 1,783.58 Bollinger Bands RSI stsoo@ta.com.my Moving Averages www.taonline.com.my DMI MACD DMI MACD DMI MACD Lower Mid Upper 14d 10d 30d 50d DI + DI - ADX Diff Line Signal Diff Recent Signal Signal Change 1,744.81 1,777.07 1,809.34 58.47 1,789.99 1,750.75 1,739.64 33.66 23.42 34.94 10.25 16.31 16.11 0.21 BUY BUY - - AFFIN 2.50 -0.01 2.51 2.50 2.52 2.55 2.59 38.62 2.54 2.55 2.56 8.12 24.31 30.80 (16.19) -0.01 0.00 (0.01) SELL SELL - - ABMB 4.11 -0.09 4.18 4.10 3.95 4.09 4.23 59.42 4.14 4.08 4.13 19.94 6.26 29.62 13.68 0.03 0.01 0.02 BUY BUY - - AMBANK 3.93 -0.01 3.95 3.93 3.95 4.02 4.08 47.29 4.00 3.96 3.89 19.95 17.72 28.73 2.23 0.03 0.05 (0.02) BUY SELL - - AXIATA 4.38 -0.10 4.49 4.31 4.25 4.40 4.55 55.37 4.43 4.31 4.33 21.42 23.08 15.12 (1.66) 0.05 0.03 0.01 SELL BUY SELL - CIMB 5.88 0.03 5.90 5.84 5.78 5.86 5.94 52.01 5.86 5.74 5.78 24.44 17.57 20.35 6.88 0.03 0.03 0.01 BUY BUY - - DIGI 4.57 -0.02 4.64 4.55 4.47 4.62 4.76 52.20 4.65 4.49 4.43 22.08 20.35 19.76 1.73 0.07 0.08 (0.01) BUY SELL - - GAMUDA 3.63 0.04 3.63 3.58 3.53 3.78 4.03 43.68 3.76 3.64 3.54 19.49 25.94 24.06 (6.45) 0.03 0.06 (0.03) SELL SELL - - GENTING 8.61 -0.10 8.71 8.59 8.62 8.73 8.84 52.07 8.71 8.66 8.62 19.84 13.44 22.98 6.40 0.03 0.03 (0.01) BUY SELL - - GENM 5.10 -0.01 5.15 5.10 5.00 5.14 5.27 50.54 5.16 5.06 5.04 23.99 19.24 24.55 4.76 0.05 0.05 (0.00) BUY SELL - SELL IHH 5.46 0.05 5.52 5.41 5.53 5.90 6.26 27.14 5.79 5.92 5.96 8.82 37.85 34.10 (29.02) -0.11 -0.05 (0.06) SELL SELL - - IOICORP 4.59 0.04 4.60 4.55 4.46 4.58 4.69 47.26 4.60 4.54 4.57 12.75 18.64 26.13 (5.90) 0.02 0.02 0.00 SELL BUY - - MALAKOFF 0.98 0.00 0.98 0.97 0.95 0.98 1.01 55.85 0.98 0.95 0.91 24.94 14.60 35.34 10.34 0.00 0.00 0.00 BUY BUY - - MAXIS 5.74 -0.05 5.79 5.63 5.51 5.67 5.83 59.39 5.72 5.57 5.59 23.94 15.90 14.65 8.04 0.06 0.05 0.01 BUY BUY - - MAYBANK 9.79 -0.01 9.82 9.76 9.70 9.83 9.97 54.87 9.87 9.64 9.51 22.24 19.49 24.31 2.75 0.09 0.10 (0.01) BUY SELL - - MBSB 1.08 0.00 1.10 1.08 1.07 1.12 1.16 37.85 1.10 1.12 1.14 15.57 17.68 13.03 (2.11) -0.02 -0.01 (0.00) SELL SELL - - RHBBANK 5.13 -0.21 5.32 5.10 5.30 5.42 5.53 43.34 5.45 5.38 5.45 15.89 16.50 16.72 (0.61) 0.00 0.01 (0.01) SELL SELL SELL SELL SIME 2.59 0.00 2.62 2.56 2.38 2.52 2.65 61.39 2.57 2.47 2.47 22.52 14.70 25.36 7.82 0.04 0.03 0.01 BUY BUY - - 15.82 0.16 15.96 15.66 14.59 15.27 15.95 64.61 15.53 15.01 14.71 29.40 11.32 51.35 18.08 0.28 0.25 0.03 BUY BUY - - TM 3.59 -0.04 3.66 3.57 3.61 3.82 4.02 43.07 3.74 3.72 3.63 20.75 31.28 22.03 (10.53) 0.00 0.03 (0.03) SELL SELL - - WPRTS 3.65 0.00 3.66 3.53 3.35 3.64 3.93 52.12 3.74 3.57 3.51 21.05 14.81 48.07 6.24 0.07 0.08 (0.01) BUY SELL - SELL TENAGA AEMULUS 0.42 0.01 0.43 0.41 0.38 0.41 0.44 49.82 0.40 0.41 0.40 24.69 18.77 23.22 5.93 0.00 0.00 (0.00) BUY SELL - - ARMADA 0.71 -0.01 0.72 0.71 0.70 0.73 0.75 48.07 0.72 0.72 0.72 19.71 22.17 14.30 (2.47) 0.00 0.00 0.00 SELL BUY - - DIALOG 3.35 0.03 3.36 3.32 3.16 3.31 3.46 52.00 3.36 3.27 3.25 23.41 20.52 16.11 2.88 0.04 0.04 0.00 BUY BUY - - DNEX 0.41 -0.01 0.42 0.41 0.39 0.41 0.42 54.09 0.41 0.40 0.41 23.99 17.23 13.46 6.76 0.00 0.00 0.00 BUY BUY - - FGV 1.66 -0.03 1.70 1.64 1.56 1.66 1.75 59.49 1.69 1.61 1.58 27.36 18.01 33.84 9.35 0.03 0.04 (0.00) BUY SELL - - GADANG 0.75 0.01 0.77 0.74 0.72 0.76 0.80 49.26 0.75 0.73 0.73 28.08 26.08 17.53 1.99 0.01 0.01 (0.00) BUY SELL - - GLOBETRONICS 2.75 0.04 2.80 2.73 2.41 2.58 2.75 70.66 2.65 2.48 2.38 29.72 10.84 39.44 18.87 0.10 0.09 0.00 BUY BUY - - HIAP TECK 0.44 0.01 0.45 0.44 0.32 0.40 0.47 69.40 0.43 0.37 0.37 35.20 13.48 45.89 21.72 0.03 0.02 0.00 BUY BUY - - HIBISCUS 0.96 -0.01 0.97 0.95 0.92 0.96 1.00 60.12 0.97 0.94 0.92 23.17 10.67 39.50 12.50 0.01 0.02 (0.00) BUY SELL - - INARI 2.46 0.01 2.48 2.44 2.38 2.44 2.50 56.07 2.45 2.39 2.35 22.74 17.88 18.01 4.87 0.04 0.04 (0.00) BUY SELL - - 11.34 0.22 11.34 11.12 10.71 11.20 11.70 53.97 11.15 10.87 10.67 22.46 20.24 22.61 2.22 0.18 0.21 (0.03) BUY SELL - - MRCB 0.86 0.01 0.88 0.85 0.68 0.78 0.88 66.42 0.81 0.73 0.70 34.68 8.72 48.75 25.96 0.04 0.04 0.01 BUY BUY - - SAPURA ENERGY 0.59 -0.01 0.60 0.59 0.57 0.60 0.62 46.00 0.59 0.60 0.61 20.88 18.72 8.21 2.17 -0.01 -0.01 0.00 BUY BUY - BUY - MPI SKP RESOURCES 1.42 -0.01 1.45 1.42 1.44 1.49 1.54 39.73 1.48 1.47 1.47 19.63 23.93 10.53 (4.30) 0.00 0.00 (0.01) SELL SELL - SUNCON 2.02 -0.01 2.08 2.02 1.85 1.94 2.04 66.69 1.96 1.90 1.88 28.49 9.68 29.94 18.80 0.03 0.02 0.01 BUY BUY - - UEM SUNRISE 0.95 -0.01 0.96 0.95 0.83 0.92 1.01 69.95 0.94 0.85 0.80 34.48 12.71 50.81 21.77 0.05 0.05 (0.00) BUY SELL - SELL VELESTO 0.29 0.00 0.29 0.28 0.28 0.29 0.31 45.06 0.29 0.29 0.29 19.71 15.76 19.85 3.95 0.00 0.00 (0.00) BUY SELL - - UNISEM 2.84 0.09 2.87 2.76 2.54 2.66 2.78 61.90 2.63 2.64 2.57 25.76 17.04 15.33 8.72 0.03 0.03 0.00 BUY BUY - BUY VS INDS 1.62 0.00 1.63 1.61 1.61 1.67 1.73 42.53 1.66 1.67 1.66 18.26 24.05 23.80 (5.79) -0.01 0.00 (0.01) SELL SELL - - WASEONG 1.27 0.01 1.27 1.25 1.23 1.30 1.38 43.01 1.31 1.28 1.30 19.88 21.00 18.46 (1.12) 0.00 0.00 (0.00) SELL SELL SELL - The table above is a compilation of actively traded stocks with some popular technical indicators. The technical BUY/SELL signals on the last four columns are auto generated; the first two being existing or recent signals while the last two represent a signal change from BUY to SELL or the reverse, otherwise no change is indicated by a dash. INTERPRETATION OF TECHNICAL INDICATORS: Bollinger Bands: Variable width bands that narrow during less volatile periods and widen during more volatile periods. As a general rule, in a bearish trend, traders should buy when share price touches the lower band and exit when price touches the middle band. The reverse is true in a bullish trend, ie. Buy when price touches the middle band and sell when price touches the upper band. Momentum traders tend to buy on price breakouts above the upper band, and sell when price breaks down below the lower band. 14-day Relative Strength Index (RSI): A reading below 30 is considered oversold, above 70 is overbought. A rise above 50 with a corresponding share price surge above the 30-day moving average should be taken as a bullish move with good short-term upside potential. A fall below 50 and a simultaneous dip below the 30-day average is bearish and imply further near-term downside risk. Moving Averages: A stock’s short-term trend is bullish if share price stays above the 10-day moving average, and bearish if it stays below. The medium-term trend is positive if share price stays above the 30-day average, and negative if it remains below. A longer-term uptrend is intact if share price sustain above the 50-day average, and is deemed broken if it breaches below this level. Directional Movement Indicator (DMI): The DMI is an indicator of trend strength. A positive DMI difference (DMI diff) value is bullish and indicate a higher DI+ vs. DI-, while a negative DMI diff is bearish due to a lower DI+ vs. DI- (DMI diff = DI+ minus DI-). A crossover of DI+ above DI- triggers a BUY signal, while a SELL signal is flashed when the DI+ crosses below the DI-. The Average Directional Movement Index (ADX) indicates the strength of a trend, whether it is up or down. The higher the value of ADX, the stronger the trend. An ADX value above 25 suggests a trending market or stock, while a value below 20 signal congestion or absence of trend. Daily Moving Average Convergence Divergence (MACD): The MACD diff value is derived from the difference between the MACD line (the 12-day EMA minus the 26-day EMA) and the MACD signal line (the 9-day EMA of the MACD). A positive MACD diff value is bullish, while a negative MACD diff is bearish. A BUY signal is generated when the MACD diff rises above zero, and SELL signal sparked when the MACD diff value falls below zero. Page 1 of 4
33. 16-Aug-18 Technical Comments : Sell AFFIN & AMMB Bank Bearish technical momentum could force Affin share price lower towards the 61.8%FR (RM2.41), with better retracement support at 76.4%FR (RM2.27), before buyers return to cushion downside. Tough resistance is seen at 38.2%FR (RM2.62). AMBank could also slide on bearish momentum towards the 100-day ma (RM3.83), with stronger support at 123.6%FP (RM3.47). Immediate resistance is found at the 200-day ma (RM4.10). AFFIN BANK RM2.50 (-0.01) Z BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 2.59 2.54 2.50 10-day 30-day 50-day RM RM RM DAILY MACD DMI Recent Signal SELL Signal Change Recent Signal RM3.93 (-0.01) BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 4.08 4.01 3.93 10-day 30-day 50-day BUY Recent Signal DMI Signal Change SELL Signal Change AMMB Recent Signal 2.53 2.55 2.56 RM RM RM DAILY MACD 3.99 3.96 3.88 SELL Signal Change Page 2 of 4
34. 16-Aug-18 Daily Money Flow of Technical Stock Watch Malaysia Chartist : Stephen Soo No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 37 38 39 39 40 Name Tel: +603-2167 9607 Total Money Flow (RM'mn) stsoo@ta.com.my (A) Total 5D MF Prv. Chg www.taonline.com.my (B) Cur. Chg CLOSING PRICE 8-Aug 9-Aug 10-Aug 13-Aug 14-Aug Chg (A+B) DMF 8-Aug 9-Aug 10-Aug 13-Aug 14-Aug FBMKLCI (42.1) (18.3) (26.0) (5.1) (2.0) (93.5) 20.9 3.1 1,805 1,805 1,806 1,783 1,784 0.44 IN AFFIN ABMB AMBANK AXIATA CIMB DIGI GAMUDA GENTING GENM IHH IOICORP MALAKOFF MAXIS MAYBANK MBSB RHBBANK SIME TENAGA TM WPRTS AEMULUS ARMADA DIALOG DNEX FGV GADANG GTRONIC HIAP TECK HIBISCUS INARI MPI MRCB SAPURA ENERGY SKP RESOURCES SUNCON UEMS VELESTO UNISEM VS IND WASEONG (0.0) (0.3) (0.1) (0.6) 6.1 (0.7) (1.2) (12.6) (2.9) (0.3) 0.4 (0.1) 0.5 2.0 0.7 (0.3) 0.2 1.1 (1.1) (0.3) (0.1) (0.3) (2.4) 0.1 (1.2) (0.1) (0.2) (0.0) 0.4 (1.0) 0.0 0.1 (0.3) (0.3) 0.1 (0.0) 0.0 (0.1) (0.2) (0.0) 0.0 (0.0) (0.1) 0.7 5.5 0.5 (0.4) 5.1 (0.5) (2.7) (0.3) (0.0) 0.1 (10.4) 0.5 (0.1) (1.7) (2.9) (1.0) 0.0 (0.1) 0.0 1.0 (0.3) (1.6) 0.0 (0.0) 0.0 1.5 0.5 (0.0) 0.2 (0.2) 0.0 (0.1) 0.3 0.0 0.3 0.2 (0.0) (0.0) (0.0) (0.4) (0.2) 6.2 (0.3) (1.7) (0.4) 0.1 (1.0) 0.1 0.0 0.3 (5.8) 0.1 (0.5) (0.3) (14.3) (1.6) (0.1) 0.0 (0.2) 1.8 (0.1) (0.5) (0.0) 0.1 (0.1) (0.2) 0.1 0.1 0.7 (0.1) 0.0 0.0 0.1 0.0 0.1 0.0 0.0 (0.0) 0.1 0.1 (0.8) (1.7) (0.2) 1.4 (5.9) 0.1 (2.6) (0.5) (0.1) (0.3) (3.6) (0.5) 0.1 0.3 6.7 (0.5) (0.3) (0.0) (0.1) 3.4 (0.0) (0.3) (0.1) (0.1) (0.1) (0.3) (0.2) (0.1) 0.3 (0.1) (0.1) (0.1) (0.2) 0.0 0.0 0.1 0.0 (0.0) (0.0) (0.1) (0.4) 0.8 (0.4) 0.1 (1.4) (0.2) (0.4) (0.7) (0.2) 0.0 (5.6) 0.3 (0.0) (2.1) (2.9) 0.2 0.0 0.0 (0.2) 0.6 0.0 0.4 (0.1) 2.7 (0.1) 0.1 1.9 0.0 0.6 0.3 (0.0) 0.0 0.0 0.0 (0.0) 0.1 0.0 (0.0) (0.2) (0.6) (1.2) 16.7 (1.2) (1.9) (15.2) (3.6) (7.0) (1.0) (0.5) 0.6 (23.3) 1.1 (0.7) (3.6) (12.4) (3.9) (0.7) (0.2) (0.9) 4.5 (0.3) (3.3) (0.3) 2.5 (0.3) 1.6 1.3 (0.1) 1.9 (0.4) (0.3) (0.1) 0.2 0.0 0.3 0.2 (0.0) (0.0) 0.2 0.4 (0.6) (7.9) 0.1 3.1 (5.5) (0.0) (1.6) (0.6) (0.2) (0.6) 2.2 (0.7) 0.6 0.6 21.0 1.1 (0.3) (0.0) 0.1 1.6 0.1 0.3 (0.1) (0.2) 0.0 (0.1) (0.2) (0.2) (0.4) 0.0 (0.1) (0.1) (0.2) 0.0 (0.1) 0.1 (0.0) 0.0 (0.2) (0.1) 0.4 2.5 (0.2) (1.2) 4.5 (0.3) 2.2 (0.2) (0.1) 0.3 (2.0) 0.8 (0.1) (2.4) (9.7) 0.7 0.4 0.0 (0.1) (2.8) 0.0 0.6 0.1 2.8 0.0 0.4 2.1 0.2 0.3 0.5 0.0 0.1 0.2 0.0 (0.0) (0.1) 0.0 2.55 4.19 4.05 4.55 5.92 4.79 3.85 8.70 5.30 5.96 4.69 0.98 5.75 9.90 1.11 5.45 2.61 15.58 3.74 3.86 0.41 0.73 3.46 0.41 1.71 0.76 2.68 0.44 0.98 2.46 11.22 0.84 0.60 1.48 1.98 0.95 0.00 2.60 1.66 1.31 2.53 4.19 3.97 4.52 5.93 4.71 3.71 8.80 5.29 5.70 4.65 0.97 5.76 9.90 1.09 5.45 2.60 15.78 3.72 3.80 0.42 0.73 3.42 0.41 1.69 0.77 2.68 0.45 0.98 2.53 11.26 0.83 0.59 1.48 1.99 0.98 0.00 2.58 1.65 1.30 2.53 4.21 4.01 4.50 5.93 4.70 3.69 8.75 5.25 5.75 4.64 0.98 5.79 9.89 1.08 5.48 2.63 15.78 3.73 3.80 0.42 0.73 3.39 0.41 1.68 0.75 2.72 0.45 0.97 2.48 11.40 0.87 0.59 1.48 2.00 0.96 0.00 2.68 1.63 1.30 2.52 4.20 3.95 4.43 5.89 4.56 3.65 8.66 5.12 5.45 4.56 0.98 5.66 9.88 1.07 5.36 2.56 15.56 3.65 3.62 0.41 0.72 3.35 0.41 1.67 0.74 2.69 0.44 0.97 2.45 11.28 0.85 0.58 1.46 2.00 0.96 0.00 2.70 1.60 1.28 2.51 4.20 3.94 4.48 5.85 4.59 3.59 8.71 5.11 5.41 4.55 0.98 5.79 9.80 1.08 5.34 2.59 15.66 3.63 3.65 0.41 0.72 3.32 0.41 1.69 0.74 2.71 0.44 0.97 2.45 11.12 0.86 0.59 1.43 2.03 0.96 0.00 2.75 1.62 1.26 (0.01) 0.00 (0.01) 0.05 (0.04) 0.03 (0.06) 0.05 (0.01) (0.04) (0.01) 0.00 0.13 (0.08) 0.01 (0.02) 0.03 0.10 (0.02) 0.03 0.00 0.01 (0.03) 0.00 0.02 0.01 0.02 (0.01) 0.00 0.00 (0.16) 0.01 0.01 (0.03) 0.03 0.00 0.00 0.05 0.02 (0.02) OUT IN IN OUT OUT OUT IN OUT OUT IN OUT OUT OUT IN IN IN OUT IN IN IN IN OUT OUT IN IN OUT IN IN IN IN OUT OUT IN OUT IN OUT OUT OUT IN OUT Sources: Bloomberg, TA Securities Daily Money Flow (DMF) Formulation If previous change (A) + current change (B) > 0, then DMF = “IN”; AND if (A) + (B) < 0, then DMF = “OUT”. Money Flow (MF) Calculation The value of money flow is set to zero at the start of the trading day. When a trade is performed, its price is compared to the price of the previous trade (the first trade of the day is compared to the previous day's close). If the prices differ, the money associated with the trade (price times number of shares) is added to or subtracted from the money flow. Additions (inflows, buys) are done on upticks; subtractions (outflows, sells) are done on downticks. Daily Money Flow (DMF) Interpretation In general, money flow trends confirm price trends. As prices rise, money flows are usually positive. As prices fall, money flows are usually negative. A divergence, however, between money flow and price trend can be a signal of a future price trend change. For example, a falling stock price with a positive money flow (IN) can indicate a future rally in the price of the stock. Conversely, a rising stock price with a negative money flow (OUT) implies potential correction in the stock price. Page 3 of 4
35. 16-Aug-18 Daily Money Flow of FBMKLCI Malaysia Chartist : Stephen Soo No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Name FBMKLCI MAYBANK PBBANK TENAGA CIMB PCHEM IHH AXIATA MAXIS HLBANK SIME PLT DIGI NESTLE PETGAS GENTING MISC IOI CORP GENM KLK PETDAG HAP SENG HLFG PPB TM RHBBANK PMETAL SIME HARTALEGA KLCCS DIALOG MAHB (RM'mn) INF LOW OUTF LOW NET FLOW 8-Aug (42.1) 2.0 (7.5) 1.1 6.1 (2.6) (0.3) (0.6) 0.5 0.3 (1.4) (0.7) 0.1 (0.8) (12.6) (2.0) 0.4 (2.9) 0.9 (12.0) (0.1) (0.7) (0.5) (1.1) (0.3) (0.6) 0.2 (1.0) 0.0 (2.4) (3.8) Tel: +603-2167 9607 Total Money Flow (RM'mn) 9-Aug 10-Aug 13-Aug (18.3) (26.0) (5.1) (10.4) (5.8) (3.6) (0.4) 5.3 (2.1) (2.9) (14.3) 6.7 5.5 6.2 (1.7) (2.0) (1.4) 4.0 (2.7) 0.7 0.1 0.0 (0.2) 0.5 (0.1) (0.5) 5.1 (0.0) (0.3) (0.5) (0.1) (4.8) (0.1) (0.0) (0.8) (1.0) (0.1) (1.1) (1.7) (0.9) (0.0) 1.0 (0.4) (1.0) (0.2) 0.3 (0.0) (0.2) (0.3) 0.2 (0.1) (0.4) (0.3) 0.1 0.1 0.3 (0.1) 0.0 0.0 (1.5) (1.6) (0.5) (0.9) (0.3) (0.0) 0.0 1.8 (11.5) 14-Aug (2.0) (5.6) 1.9 (2.9) 0.8 (1.7) (0.4) (0.4) 0.0 (0.4) (0.1) (0.4) (1.2) (1.4) (1.4) (0.1) (0.7) (0.2) 1.0 14.6 (0.0) (0.1) (0.9) 0.2 (0.0) 0.3 (2.1) (0.2) (0.1) 0.6 (1.0) (2.6) (0.8) (0.3) 0.4 0.1 (0.2) 0.1 (0.2) (5.9) (0.1) (0.5) 0.1 0.0 (0.1) 0.0 0.1 (0.2) (0.5) 0.1 0.2 0.3 0.7 0.0 3.4 (2.6) Total 5D MF (93.5) (23.3) (2.9) (12.4) 16.7 (3.7) (7.0) (1.2) 0.6 0.2 (1.8) (1.2) (0.8) (3.0) (15.2) (2.5) (1.0) (3.6) 2.1 (2.4) (0.2) (0.7) (3.9) (3.9) (0.7) (2.2) (3.6) (1.4) (0.0) 4.5 (19.1) 11.5 12.9 14.3 16.3 19.4 74.3 (53.6) (42.1) (31.2) (18.3) (40.3) (26.0) (21.3) (5.1) (21.4) (2.0) (167.8) (93.4) stsoo@ta.com.my (A) (B) Prv. Chg Cur. Chg 20.9 3.1 2.2 (2.0) (7.5) 4.0 21.0 (9.7) (7.9) 2.5 5.3 (5.7) (1.6) 2.2 (0.6) 0.4 (0.6) 0.3 0.4 (0.7) 0.3 (0.2) 0.1 (0.2) (0.1) (1.3) (0.1) (1.3) (5.5) 4.5 0.2 0.1 (0.6) (0.2) (0.0) (0.3) (0.2) 1.0 0.0 14.7 (0.0) (0.0) 0.1 (0.3) 1.3 (0.7) 1.1 0.7 0.6 (0.1) 1.1 0.1 0.6 (2.4) 0.8 (0.9) 0.0 (0.1) 1.6 (2.8) 8.9 1.5 8-Aug 1,805 9.90 24.32 15.58 5.92 9.04 9-Aug 1,805 9.90 24.40 15.78 5.93 9.20 5.96 4.55 5.75 19.36 5.31 4.79 148.20 19.20 8.70 6.46 4.69 5.30 24.66 26.84 9.79 18.00 16.86 3.74 5.45 4.99 2.61 6.34 7.79 3.46 9.51 5.70 4.52 5.76 19.30 5.34 4.71 148.00 18.98 8.80 6.28 4.65 5.29 24.76 26.84 9.80 18.26 16.84 3.72 5.45 4.98 2.60 6.38 7.78 3.42 9.58 OUTFLOW 10 (20) 7 (23) 9 (21) 15 (15) CLOSING PRICE 10-Aug 13-Aug 1,806 1,783 9.89 9.88 24.40 24.38 15.78 15.56 5.93 5.89 9.21 9.09 5.75 4.50 5.79 19.24 5.37 4.70 147.80 19.00 8.75 6.18 4.64 5.25 24.70 26.80 9.76 18.20 16.78 3.73 5.48 5.00 2.63 6.60 7.76 3.39 9.86 5.45 4.43 5.66 19.10 5.21 4.56 147.80 18.76 8.66 6.14 4.56 5.12 24.68 26.64 9.73 18.10 16.84 3.65 5.36 4.99 2.56 6.53 7.71 3.35 9.33 14-Aug 1,784 9.80 24.40 15.66 5.85 9.10 5.41 4.48 5.79 19.04 5.25 4.59 147.20 18.66 8.71 5.99 4.55 5.11 24.86 26.22 9.75 18.14 16.88 3.63 5.34 4.90 2.59 6.63 7.60 3.32 9.35 (A+B) DMF Chg 0.44 IN (0.08) IN 0.02 OUT 0.10 IN (0.04) OUT 0.01 OUT (0.04) IN 0.05 OUT 0.13 OUT (0.06) OUT 0.04 IN 0.03 OUT (0.60) OUT (0.10) OUT 0.05 OUT (0.15) IN (0.01) OUT (0.01) OUT 0.18 IN (0.42) IN 0.02 OUT 0.04 OUT 0.04 IN (0.02) IN (0.02) IN (0.09) IN 0.03 OUT 0.10 OUT (0.11) OUT (0.03) OUT 0.02 IN Daily Trading Participation COMPANIES INFLOW www.taonline.com.my 8 (22) Date Retail Institution Foreign Total 8-Aug 25.4% 51.4% 23.2% 100% 9-Aug 10-Aug 13-Aug 14-Aug 26.3% 23.8% 21.6% 23.8% 53.1% 53.0% 51.7% 53.8% 20.6% 23.2% 26.7% 22.4% 100% 100% 100% 100% Sources: Bloomberg, TA Securities Daily Money Flow (DMF) Formulation If previous change (A) + current change (B) > 0, then DMF = “IN”; AND if (A) + (B) < 0, then DMF = “OUT”. Money Flow (MF) Calculation The value of money flow is set to zero at the start of the trading day. When a trade is performed, its price is compared to the price of the previous trade (the first trade of the day is compared to the previous day's close). If the prices differ, the money associated with the trade (price times number of shares) is added to or subtracted from the money flow. Additions (inflows, buys) are done on upticks; subtractions (outflows, sells) are done on downticks. Daily Money Flow (DMF) Interpretation In general, money flow trends confirm price trends. As prices rise, money flows are usually positive. As prices fall, money flows are usually negative. A divergence, however, between money flow and price trend can be a signal of a future price trend change. For example, a falling stock price with a positive money flow (IN) can indicate a future rally in the price of the stock. Conversely, a rising stock price with a negative money flow (OUT) implies potential correction in the stock price. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, August 16, 2018, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 4 of 4
36. Technical View Thursday , August 16, 2018 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Stock Screen Malaysia End Day Census of 15.08.2018 Chartist: Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my Report Description: The Daily Stock Screen is a retail product which can be a very useful guide for momentum trading and trading ideas. The following list is derived from the screening of more than 1000 stocks currently listed on Bursa Malaysia to identify: the top 20 breakout, 20 breakdown, and 20 ‘potential’ breakout stocks which just climbed above the middle Bollinger band, with potential to appreciate toward the upper Bollinger band. [MIDDLE BOLLINGER RANGEBOUND] List of 20 Potential Breakout Stocks (Short-term BUY for upside toward Upper Bollinger Band or higher to TAKE PROFIT/ SELL) No Stock Name Price Bollinger Band RSI Moving Average Lower Middle Upper 14-day 5-day 10-day 30-day 50-day Vol 20-day avg vol 1 FAR EAST HOLDINGS BHD 2 KOTRA INDUSTRIES BHD 3.40 2.22 2.92 3.62 71.76 3.34 3.17 2.77 2.63 115,600 66,154 1.80 1.52 1.73 1.93 56.08 1.84 1.81 1.70 1.74 19,500 2,385 3 CENTRAL INDUSTRIAL CORP BHD 1.30 0.96 1.19 1.42 74.69 1.30 1.30 1.13 1.08 2,000 100 4 MUAR BAN LEE GROUP BHD 5 RIVERVIEW RUBBER ESTATES BHD 1.15 3.83 0.94 3.54 1.07 3.71 1.20 3.87 70.54 56.23 1.13 3.76 1.12 3.75 1.04 3.68 1.02 3.64 139,700 11,300 63,240 4,275 6 ANCOM BHD 7 APEX HEALTHCARE BHD 0.74 0.50 0.63 0.77 77.32 0.68 0.68 0.57 0.54 3,632,400 893,680 7.20 6.94 7.08 7.23 63.93 7.13 7.12 6.98 6.79 34,300 21,020 8 GENETEC TECHNOLOGY BHD 1.37 1.20 1.30 1.40 63.19 1.35 1.33 1.25 1.24 93,100 49,465 9 SLP RESOURCES BHD 10 POH HUAT RESOURCES HLDGS BHD 1.32 0.89 1.12 1.35 79.73 1.23 1.18 1.01 0.97 553,400 224,515 1.53 1.37 1.46 1.56 67.57 1.50 1.48 1.40 1.36 1,264,600 436,650 11 AMVERTON BHD 12 TIEN WAH PRESS HLDGS BHD 1.08 0.88 0.99 1.10 58.12 1.05 1.02 1.00 1.06 10,000 4,815 1.60 1.35 1.48 1.61 68.18 1.58 1.53 1.43 1.41 15,700 9,585 13 ORNAPAPER BHD 1.39 1.19 1.30 1.40 68.73 1.36 1.32 1.27 1.27 498,600 226,800 14 KNUSFORD BHD 15 COMFORT GLOVE BHD 0.79 0.53 0.66 0.79 54.80 0.70 0.69 0.72 0.81 2,000 1,140 1.03 0.82 0.92 1.03 71.46 0.97 0.96 0.89 0.87 7,359,800 3,558,985 16 GRAND HOOVER BHD 17 PRESTARIANG BHD 0.66 0.50 0.58 0.65 58.11 0.60 0.60 0.59 0.62 205,900 73,325 1.20 0.99 1.09 1.20 63.50 1.12 1.09 1.06 1.09 8,410,200 3,746,620 18 EXCEL FORCE MSC BHD 0.75 0.43 0.59 0.74 77.89 0.67 0.63 0.52 0.49 20,969,100 12,637,380 19 NOTION VTEC BHD 20 HEVEABOARD BHD 0.74 0.95 0.49 0.81 0.62 0.88 0.74 0.94 75.62 72.70 0.69 0.91 0.65 0.89 0.58 0.84 0.57 0.82 13,926,900 9,088,600 5,442,190 5,811,510 Raw data sourced from Bloomberg *Note: To qualify in this list above, the first sorting criteria is stock price must have just climbed or stayed ABOVE the middle Bollinger Band, followed by a second criteria that trading volume for the day must be significantly strong. This is a good watch list for momentum traders looking for short-term BUY ideas, as they are laggards with good upside potential towards the upper Bollinger band or higher to TAKE PROFIT/SELL. Caveat: Some stocks may continue to stay range bound and trade sideways, hence traders should refer to their respective charts to spot accumulation (volume growth) or breakout patterns. INTERPRETATION OF TECHNICAL INDICATORS: Moving Averages: A stock’s short-term trend is bullish if share price stays above the 10-day moving average, and bearish if it stays below. The medium-term trend is positive if share price stays above the 30-day, and negative if it remains below this average. 14-day RSI: A reading below 30 is considered oversold, above 70 is overbought. A rise above 50 with a corresponding share price surge above the 30-day SMA should be taken as a bullish move with good short-term upside potential. A fall below 50 and a simultaneous dip below the 30-day SMA is bearish and imply further near-term downside risk. Bollinger Bands: Variable width bands that narrow during less volatile periods and widen during more volatile periods. As a general rule, in a bearish trend, traders should buy when share price touches the lower band and exit when price touches the middle band. The reverse is true in a bullish trend, ie. Buy when price touches the middle band and sell when price touches the upper band. Momentum traders will buy on price breaks above the upper band, and sell when price breaks below the lower band. Alternatively, a sharp move that originates at one band tends to go all the way to the other band, a useful observation when projecting price targets. Page 1 of 2
37. *Note: To qualify in the breakout list below, the first sorting criteria is stock price must close ABOVE the upper Bollinger Band, followed by a second criteria that trading volume for the day must be significantly higher than the 20-day average volume, which signal a bullish breakout. Caveat: We would caution momentum traders that a highly overbought 14-day RSI reading (> 80) and share price pullback BELOW the upper Bollinger Band are early warning signals to exit buy breakout trades. [UPPER BOLLINGER BREAKOUT] Top 20 Breakout Stocks (Generally BULLISH, but can be short-term TAKE PROFIT/ SELL guide) No Stock Name Price RSI Bollinger Band Moving Average Lower Middle Upper 14-day 5-day 10-day 30-day 50-day 36.00 33.06 34.31 35.55 67.59 34.76 34.41 34.00 34.51 2 ELSOFT RESEARCH BHD 2.96 2.62 2.73 2.84 83.33 2.73 2.72 2.70 3 HARTALEGA HOLDINGS BHD 6.80 5.80 6.24 6.68 79.24 6.50 6.33 4 MUDA HOLDINGS BERHAD 2.18 1.63 1.87 2.11 72.98 1.95 1.86 5 KOBAY TECHNOLOGY BHD 1.32 0.97 1.12 1.27 80.55 1.20 6 LION INDUSTRIES CORP BHD 1.17 0.68 0.90 1.12 80.30 7 GOODWAY INTEGRATED INDUS BHD 0.29 0.17 0.21 0.25 8 CHOO BEE METAL INDUS BHD 1.98 1.84 1.89 1.94 9 EDARAN BHD 0.74 0.17 0.44 0.70 1 BRITISH AMERICAN TOBACCO BHD Vol 20-day avg vol 207,200 283,155 2.65 2,449,600 177,015 6.13 6.08 5,240,000 2,754,000 1.80 1.82 2,821,000 1,339,065 1.14 1.07 1.05 549,900 77,060 1.03 0.94 0.81 0.83 13,606,400 8,616,155 81.34 0.20 0.20 0.20 0.21 59,253,100 587,155 65.79 1.87 1.88 1.86 1.87 774,300 55,175 83.09 0.57 0.46 0.40 0.41 7,032,600 6,972,990 10 RANHILL HOLDINGS BHD 0.80 0.63 0.69 0.76 77.66 0.71 0.69 0.69 0.69 5,654,300 895,245 11 PENTAMASTER CORP BHD 3.24 2.67 2.94 3.20 81.10 3.09 3.00 2.76 2.64 1,750,500 2,001,315 12 KIM HIN INDUSTRY BERHAD 1.38 1.24 1.29 1.34 59.18 1.32 1.30 1.33 1.38 5,100 3,720 13 THONG GUAN INDUSTRIES BHD 2.96 2.56 2.75 2.93 76.04 2.83 2.79 2.63 2.59 190,500 116,275 14 UEM EDGENTA BHD 2.38 2.01 2.18 2.35 79.78 2.26 2.22 2.07 2.05 203,900 66,860 15 UNISEM (M) BERHAD 2.84 2.52 2.67 2.81 67.28 2.66 2.63 2.64 2.57 2,456,100 1,414,055 8,357,670 16 KRONOLOGI ASIA BHD 0.77 0.64 0.69 0.74 69.57 0.69 0.69 0.66 0.64 41,485,200 17 PLS PLANTATIONS BHD 1.00 0.57 0.77 0.97 68.72 0.91 0.83 0.80 0.85 10,000 2,840 18 SCGM BHD 1.66 1.31 1.47 1.64 72.56 1.56 1.51 1.41 1.50 926,900 390,485 19 EURO HOLDINGS BHD 0.22 0.15 0.17 0.20 75.58 0.16 0.17 0.17 0.17 57,958,600 1,260,080 20 TEK SENG HOLDINGS BHD 0.32 0.26 0.28 0.30 67.83 0.27 0.27 0.28 0.29 15,796,600 548,360 Raw data sourced from Bloomberg *Note: As for the top 20 breakdown list below, the sole sorting criteria is stock price must close significantly BELOW the lower Bollinger Band, with the largest distance from the lower band at the top of the table, signaling a severe sell-off which is bearish. Caveat: A stock should bottom out if share price moves ABOVE the falling lower Bollinger Band, which can be a good buy signal for technical rebound upside after the sharp sell-off. [LOWER BOLLINGER BREAKDOWN] Top 20 Breakdown Stocks (Generally BEARISH, but can be short-term BUY guide) No Stock Name Price Bollinger Band RSI Moving Average Vol 20-day avg vol Lower Middle Upper 14-day 5-day 10-day 30-day 50-day 146.10 146.52 147.69 148.85 35.18 147.80 147.62 147.83 147.43 153,500 99,235 5.13 5.24 5.40 5.57 31.50 5.42 5.45 5.38 5.45 5,900,800 1,585,770 211,850 1 NESTLE (MALAYSIA) BERHAD 2 RHB BANK BHD 3 CHEMICAL CO OF MALAYSIA BHD 1.59 1.61 1.80 2.00 17.79 1.71 1.75 1.87 2.02 966,600 4 ASIA BRANDS BHD 0.69 0.71 0.83 0.95 32.85 0.74 0.78 0.86 0.90 2,000 455 5 SEE HUP CONSOLIDATED BHD 1.12 1.14 1.21 1.29 31.55 1.17 1.20 1.23 1.26 16,000 8,175 6 SKP RESOURCES BHD 790,200 2,294,385 7 ALLIANZ MALAYSIA BHD 8 KUMPULAN PERANGSANG SELANGOR 1.42 1.43 1.48 1.53 37.98 1.47 1.48 1.47 1.47 12.40 12.41 12.56 12.72 40.11 12.52 12.52 12.54 12.78 1.71 1.72 1.89 2.06 33.73 1.81 1.84 1.90 1,800 60,550 1.80 1,864,300 2,756,725 458,440 9 SAMCHEM HOLDINGS BHD 0.95 0.96 0.99 1.03 39.07 0.99 0.99 0.98 1.00 670,200 10 AFFIN BANK BHD 2.50 2.51 2.55 2.59 36.41 2.53 2.54 2.55 2.56 42,400 99,680 11 BERJAYA LAND BHD 0.25 0.25 0.26 0.27 20.42 0.26 0.26 0.27 0.28 6,509,100 478,925 12 AMMB HOLDINGS BHD 3.93 3.93 4.01 4.09 46.15 3.98 4.00 3.96 3.89 823,200 1,428,650 13 SCOMI GROUP BHD 0.08 0.08 0.10 0.12 24.09 0.10 0.10 0.11 0.11 14,341,600 5,779,725 14 IHH HEALTHCARE BHD 5.46 5.46 5.87 6.28 30.58 5.65 5.79 5.92 5.96 8,149,500 8,529,440 15 ENCORP BHD 0.50 0.50 0.53 0.56 37.96 0.53 0.53 0.56 0.61 46,300 34,225 16 PETALING TIN BHD 0.39 0.39 0.40 0.40 45.27 0.39 0.39 0.40 0.38 234,600 134,230 17 MAA GROUP BHD 0.61 0.61 0.63 0.65 35.16 0.62 0.62 0.63 0.64 188,200 137,325 18 BOUSTEAD HOLDINGS BHD 2.33 2.33 2.37 2.41 26.69 2.35 2.36 2.39 2.43 151,400 198,580 19 SAND NISKO CAPITAL BHD 0.25 0.25 0.27 0.30 34.04 0.26 0.27 0.28 0.29 4,000 300 20 KONSORTIUM TRANSNASIONAL BHD 0.09 0.09 0.10 0.10 39.91 0.10 0.10 0.10 0.10 150,200 460,700 Raw data sourced from Bloomberg Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, August 16, 2018, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 2