Bursa Malaysia Daily Market Report - 16 May

Transcription

1. Thursday , 16 May, 2019 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 . C a h ya M a t a S a ra w a k B h d : D ra g g e d b y A s so c ia t e s 2 . K u a la L u m p u r K e p o n g Be r h a d : O u t lo o k R e m a i n s C h a l le n g in g 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 May 2019 TA Research, e-mail : taresearch@ta.com.my For Internal Circulation Only Review & Outlook KLSE Market Statistics (15.05.2019) Volume (mil) +/-chg (RMmn) Main Market 1,350.1 Warrants 371.3 ACE Market 829.9 Bond 0.4 ETF 0.0 LEAP 0.2 Total 2,552.0 Off Market 442.6 -460.0 -18.8 211.7 -0.6 -0.1 0.1 1,943.0 94.6 85.6 0.1 0.1 0.0 2,123.4 316.7 1,653.4 Value Value/ +/-chg Volume Up Down -361.4 -3.2 24.5 0.0 -0.5 0.0 1,525.5 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP May 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 376 158 55 4 5 1 599 % YTD chg 12.24 94.44 172.18 2.00 0.77 0.84 1.34 0.12 -4.68 -1.51 14.96 -5.05 25,648.02 7,822.15 7,296.95 21,188.56 2,092.78 28,268.71 3,218.77 1,621.27 5,980.89 2,938.68 1,577.92 6,284.20 115.97 87.65 55.35 121.33 10.94 146.69 -4.94 -12.57 -90.32 55.07 35.85 44.29 0.45 1.13 0.76 0.58 0.53 0.52 -0.15 -0.77 -1.49 1.91 2.32 0.71 9.95 17.89 8.45 5.86 2.53 9.37 4.89 3.67 -3.45 17.83 24.45 11.30 (mn) 3.75 5.80 0.30 4.54 0.38 Exchange Rate USD/MYR 4.1760 0.004 USD/JPY 109.36 -0.320 EUR/USD 1.120 -0.0033 Counter Mkt Cap. Chg (RM’mn) (RM) MAYBANK 99,558 0.05 PBBANK 87,270 0.02 PCHEM 70,800 0.04 IHH 48,421 0.05 MAXIS 41,585 0.01 AXIATA 40,126 0.12 HLBANK 39,685 0.02 DIGI 36,543 0.13 NESTLE 34,143 0.60 PETGAS 32,926 0.14 Despite yesterday's rebound, uncertainty over the ongoing trade war between the world's two leading economic superpowers will likely persist to cloud near-term sentiment, pending further clarity to pacify jittery investors. Overhead resistance for the index remains at 1,626, followed by 1,647, and next 1,657. Crucial supports stays at 1,579 and 1,550, the respective 123.6% and 138.2% Fibonacci Projection (FP) targets of the correction from last year's 28 August peak of 1,826 to the 18 December through of 1,626. Any price correction on IHH Healthcare shares below the lower Bollinger band (RM5.44) towards the 38.2%FR (RM5.28) would be good buying opportunity for rebound towards the 30-day ma (RM5.54), with further resistance coming from 50-day ma (RM5.65) and 61.8%FR (RM5.70). Crucial support is found at 23.6%FR (RM4.98). Tenaga shares should see key retracement support from 176.4%FP (RM11.40) and 200%FP (RM10.74) cushioning correction, while upside on rebound is seen capped by 50-day ma (RM12.45) and 123.6%FP (RM12.88). News Bites Top 10 KLCI Movers Based on Mkt Cap. (RM) @ @ @ @ @ 169 84 20 2 1 0 276 % chg 1,611.43 11,353.17 12,989.40 1,606.00 Off Market LAFMSIA 433.3 RHBBANK 3.0 ECOFIRS 3.0 BIMB 2.0 BAHVEST-WA 1.0 1.44 0.25 0.10 0.31 2.64 0.09 0.83 3.74 Blue chips rose and the FBM KLCI edged past the crucial 1,600 level on Wednesday, following the overnight rebound on Wall Street after China and the U.S. indicated talks are ongoing to find a solution to the trade dispute between both countries. The KLCI climbed 12.24 points to close at 1,611.43, off an intra-day high of 1,617.43 and low of 1,601.04, as gainers edged losers 599 to 276 on total turnover of 2.55bn shares worth RM2.12bn. Vol. (mn) 14.21 7.23 4.05 4.75 1.52 6.78 0.62 4.92 0.19 1.36 Commodities Futures Palm Oil (RM/mt) 2,044.00 11.00 Crude Oil (Brent) 71.97 1.02 Gold ($/tr.oz.) 1,297.20 -0.30 Important Dates PHB - 3:1 Rights Issue - RI of up to 5,990.9m shares together with up to 3,999.9m warrants. 3 rights shares together with 2 warrants for every 1 existing share held, at an issue price of RM0.01 per rights share. Ex-Date: 23/05/2019. Entitlement Date: 24/05/2019. Trading of Rights: 27-31/05/2019. Application Closed: 12/06/2019. LISTING ON: 25/06/2019. • Maxis Bhd said the cessation of the 3G radio access network lease arrangement by U Mobile Sdn Bhd will have minimal impact on its 2019's earnings before interest, taxes, depreciation and amortization. • Melaka Housing Board is collaborating with Scientex Bhd to develop a mixedresidential project valued at RM438.7mn in Durian Tunggal,Alor Gajah. • Dagang Nexchange Bhd has been awarded a RM7.5mn contract to supply 4 new units of marine loading arm integrated with relevant systems for Johor Port Bhd's facilities. • Hubline Bhd has branched out into the aviation industry with the completion of the acquisition of 51% stake in Layang Layang Aerospace Sdn Bhd for RM14.2mn. • UEM Edgenta Bhd is confident of achieving double-digit growth this year through continued focus on its healthcare and technology investment divisions. • Sapura Resources Bhd forming a joint-venture agreement with Rolls-Royce Power Systems AG's unit, MTU Asia Pte Ltd, to sell and service original equipment for the marine, rail, construction, mining, agriculture, oil and gas, and power generation sectors in Malaysia. • ATTA Global Group Bhd is acquiring the entire stake of MPSB Venture Sdn Bhd for RM28.0mn in order to diversify its business into property investment. • Zecon Bhd has proposed to raise up to RM3.3mn via a private placement exercise. • Lafarge Malaysia Bhd has settled a five-year-old tax dispute with the Inland Revenue Board of Singapore relating to the latter's tax repayment claim amounting to SGD9.6mn after executing a final settlement of SGD1.9mn. • Favelle Favco Bhd has secured a total of 6 contracts for the supply of tower cranes, worth a cumulative RM78.3mn. • Kuala Lumpur Kepong Berhad's 1HFY19 results came in below expectations as excluding the forex impact and other non-core items, core net profit declined by 38.6% YoY to RM288.0mn. • Batu Kawan Bhd's net profit in 2QFY19 jumped 41.7% YoY to RM79.3mn from RM56.0mn a year ago mainly due to lower operating expenses, finance cost and income tax expense. • Gas Malaysia Bhd's net profit rise 2.4% YoY to RM41.2mn in 1QFY19 on higher other operating income, share of profit of joint ventures and lower operating expenses. • Cahya Mata Sarawak Bhd's net profit for 1QFY19 came in at RM40.8mn, up 4.6% YoY from RM39.0mn a year ago, on the back of stronger performance across its core businesses. It was below our expectations. • Malaysia Building Society Bhd's net profit in 1QFY19 dropped 73.5% YoY to RM83.8mn from RM316.8mn a year ago, due to higher expected credit losses. • Pentamaster Corporation Bhd's net profit in 1QFY19 surged 170.7% YoY to RM19.6mn from RM7.2mn a year ago, due to greater operating efficiency that led to higher profit margins and net interest income. • Growth in China's industrial output slowed more than expected to 5.4% in April from a year earlier, pulling back from a surprising strong 4-1/2 year high of 8.5% in March. • President Donald Trump will give the EU and Japan 180 days to agree to a deal that would "limit or restrict" imports into the U.S. of automobiles and their parts, in return for delaying new auto tariffs, according to Bloomberg. 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 , May 16, 2019 FBMKLCI: 1,611.43 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 Trade Uncertainties to Persist Blue chips rose and the FBM KLCI edged past the crucial 1,600 level on Wednesday, following the overnight rebound on Wall Street after China and the U.S. indicated talks are ongoing to find a solution to the trade dispute between both countries. The KLCI climbed 12.24 points to close at 1,611.43, off an intra-day high of 1,617.43 and low of 1,601.04, as gainers edged losers 599 to 276 on total turnover of 2.55bn shares worth RM2.12bn. Crucial Supports at 1,579/1,550; Resistance at 1,626 Despite yesterday’s rebound, uncertainty over the ongoing trade war between the world’s two leading economic superpowers will likely persist to cloud near-term sentiment, pending further clarity to pacify jittery investors. Overhead resistance for the index remains at 1,626, followed by 1,647, and next 1,657. Crucial supports stays at 1,579 and 1,550, the respective 123.6% and 138.2% Fibonacci Projection (FP) targets of the correction from last year’s 28 August peak of 1,826 to the 18 December through of 1,626. Buy on Dip IHH Healthcare & Tenaga Any price correction on IHH Healthcare shares below the lower Bollinger band (RM5.44) towards the 38.2%FR (RM5.28) would be good buying opportunity for rebound towards the 30-day ma (RM5.54), with further resistance coming from 50-day ma (RM5.65) and 61.8%FR (RM5.70). Crucial support is found at 23.6%FR (RM4.98). Tenaga shares should see key retracement support from 176.4%FP (RM11.40) and 200%FP (RM10.74) cushioning correction, while upside on rebound is seen capped by 50-day ma (RM12.45) and 123.6%FP (RM12.88). Asian Markets Rebound as Trade Fears Soften Asian stock markets are mostly higher on Wednesday following the positive cues overnight from Wall Street, as a slight softening in rhetoric from U.S. President Donald Trump eased worries about the U.S.-China tariff war, and on expectations that Beijing could unveil more economic stimulus. President Donald Trump on Tuesday downplayed tensions, calling the situation a “little squabble” and stressing what a good relationship he has with China’s President Xi Jinping. On economic front, China reported surprisingly weaker growth in retail sales and industrial output for April, adding pressure on Beijing to roll out more stimulus as the trade war with the United States escalates. Mainland Chinese shares advanced on the day, with the Shanghai composite adding 1.91% to 2,938.68 and the Shenzhen component rising 1.45% to 9,169.15. Japan’s Nikkei 225 rose 0.58% to close at 21,188.56. In South Korea, the Kospi rose 0.53% to close at 2,092.78 as shares of LG Chem jumped 2.71%. Over in Australia, the ASX 200 gained 0.71% to finish its trading day at 6,284.20. Page 1 of 10
4. 16-May-19 Wall Street Ends Higher on Trade Optimism U .S. stocks rebounded for second day Wednesday amid developments in U.S. international trade relations that were being viewed as optimistic by investors who have become increasingly sensitive to tariff headlines. The Dow Jones Industrial Average rose 115.97 points, or 0.45%, to 25,648.02, the S&P 500 gained 16.55 points, or 0.58%, to 2,850.96 and the Nasdaq Composite added 87.65 points, or 1.13%, to 7,822.15. Stocks erased declines from earlier in the day after reports emerged that the Trump administration is putting off a final decision on whether to impose broad tariffs on automobile and auto-part imports, while Treasury Secretary Steven Mnuchin said U.S. negotiators are likely to travel to Beijing soon. The turnaround by stocks in reaction to the reports reflects the markets' intense sensitivity to trade-related news in light of the escalating trade dispute between the U.S. and China. Stocks initially came under pressure following the release of a report from the Commerce Department showing an unexpected pullback in U.S. retail sales in the month of April. The Commerce Department said retail sales edged down by 0.2% in April after spiking by an upwardly revised 1.7% in March. Of the 11 major sectors in the S&P 500, eight ended the session in positive territory, with communications services enjoying the largest percentage gain, led by Alphabet Inc and Facebook Inc. Page 2 of 10
5. 16-May-19 N e w s I n B r i e f Corporate Hubline Bhd (Not Rated) has branched out into the aviation industry with the completion of the acquisition of 51% stake in Layang Layang Aerospace Sdn Bhd for RM14.2mn. (Bursa Malaysia/New Straits Times) Maxis Bhd said the cessation of the 3G radio access network lease arrangement by U Mobile Sdn Bhd will have minimal impact on its 2019's earnings before interest, taxes, depreciation and amortization (Ebitda). According to its chief executive officer Gokhan Ogut, the group's Ebitda would see a single digit decline, but the performance overall, to remain solid. (The Star) Dagang Nexchange Bhd (Not Rated) has been awarded a RM7.5mn contract to supply 4 new units of marine loading arm integrated with relevant systems for Johor Port Bhd’s facilities. The project duration is 310 days, commencing from 16 May 2019 to 11 March 2020. (Bursa Malaysia/The Edge) Melaka Housing Board is collaborating with Scientex Bhd to develop a mixed-residential project valued at RM438.7mn in Durian Tunggal, Alor Gajah. The project will see the construction of 2,520 units of terrace houses under the Rumah Harapan programme, as part of efforts to help people in the state own houses. (The Edge) Comment: This comes as no surprise because Scientex has on-going projects at the Durian Tunggal 1, with total project GDV of c.RM440mn and it has been working closely with the housing board in support of various affordable housing schemes. Note that, Scientex has previously launched 116 units of homes under the Rumah Mampu Milik Melaka (RMM) programme in July-2018 which saw 100% take up. Moving forward, we project Scientex to achieve GDV launches of RM1.1b in FY19. Management guided that the group will continue to focus on the affordable housing segment as it has been achieving high take-up rate in the past projects and seeing continuous demands for this housing category. Maintain our Buy call on Scientex with unchanged target price of RM9.80/share. UEM Edgenta Bhd (Not Rated) is confident of achieving double-digit growth this year through continued focus on its healthcare and technology investment divisions, according to its managing director and CEO Datuk Azmir Merican. (The Sun) Sapura Resources Bhd (Not Rated) is forming a joint-venture agreement with RollsRoyce Power Systems AG's (RRPS) unit, MTU Asia Pte Ltd, to sell and service original equipment for the marine, rail, construction, mining, agriculture, oil and gas, and power generation sectors in Malaysia. (The Edge) Steel products maker ATTA Global Group Bhd (Not Rated) is acquiring the entire stake of MPSB Venture Sdn Bhd for RM28.0mn in order to diversify its business into property investment. The proposed acquisition is estimated to be completed within 3 months from the agreement date. (Bursa Malaysia/The Edge) Eonmetall Group Bhd (Not Rated) is exiting Africa via disposal of its entire 93.3% stake in Eonmetall Investments Zambia Limited for a cash consideration of RM2. The group said the disposal was in line with the company’s strategy to revisit investments on the African continent in order to realign the focus and concentration of time and effort for better investment return. (Bursa Malaysia) Zecon Bhd (Not Rated) has proposed to raise up to RM3.3mn via a private placement exercise. The proposed exercise entails the issuance of up to 13.1mn new shares, representing not more than 10% of its total issued shares. 97.2% of the proceeds will be used Page 3 of 10
6. 16-May-19 for working capital and the remaining 2 .8% for expenses in relation to the proposed exercise. The proposed exercise is expected to be completed by 3Q2019. (Bursa Malaysia/The Edge) Lafarge Malaysia Bhd (Not Rated) has settled a five-year-old tax dispute with the Inland Revenue Board of Singapore relating to the latter's tax repayment claim amounting to SGD9.6mn. The group said it has, together with its subsidiary LMCB Holding Pte Ltd, finalised and executed a final settlement of SGD1.9mn. (Bursa Malaysia/The Edge) Noor Ilias Mohd Idris has been appointed as non-independent non-executive director of Petronas Chemicals Group Bhd, replacing Zakaria Kasah as the representative of holding company Petroliam Nasional Bhd (Petronas) on the board. Ilias, 54, is currently the vice president of group project delivery & technology of Petronas. (Bursa Malaysia/The Edge) Favelle Favco Bhd (Not Rated) has secured a total of 6 contracts for the supply of tower cranes, worth a cumulative RM78.3mn. The contracts are expected to be delivered between the 2Q2019 and 1Q2020. (Bursa Malaysia/The Edge) Batu Kawan Bhd’s (Not Rated) net profit in 2QFY19 jumped 41.7% YoY to RM79.3mn from RM56.0mn a year ago mainly due to lower operating expenses, finance cost and income tax expense. Its quarterly revenue, however, fell 15.6% YoY to RM4.1bn against RM4.8bn a year ago. For 1HFY19, the group’s net profit rose 18.8% YoY to RM216.0mn from RM181.8mn a year earlier, despite 18.3% YoY lower revenue of RM8.3bn versus RM10.2bn in 1HFY18. The group declared an interim dividend of 15sen/share. (Bursa Malaysia/The Edge) Kuala Lumpur Kepong Bhd’s net profit in 2QFY19 surged 34.7% YoY to RM143.0mn from RM106.2mn a year ago, on the back of lower taxes. Meanwhile, quarterly revenue dropped 15.9% YoY to RM3.9bn from RM4.7bn a year ago. For 1HFY19, the group posted a 15.3% YoY increase in net profit to RM393.9mn from RM341.5mn a year ago while revenue declined 18.6% YoY to RM8.0bn from RM9.9bn. The group declared an interim dividend of 15sen/share. (Bursa Malaysia/The Edge) Gas Malaysia Bhd (Not Rated) saw its net profit rise 2.4% YoY to RM41.2mn in 1QFY19 from RM40.2mn a year ago, on higher other operating income, share of profit of joint ventures and lower operating expenses. Meanwhile, quarterly revenue also grew 19.5% YoY to RM1.7bn from RM1.4bn in 1QFY18. (Bursa Malaysia/The Edge) Cahya Mata Sarawak Bhd’s net profit for 1QFY19 came in at RM40.8mn, up 4.6% YoY from RM39.0mn a year ago, on the back of stronger performance across its core businesses. Meanwhile, quarterly revenue grew 17.8% YoY to RM418.2mn, from RM355.0mn previously. (Bursa Malaysia/The Edge) Malaysia Building Society Bhd’s (Not Rated) net profit in 1QFY19 dropped 73.5% YoY to RM83.8mn from RM316.8mn a year ago, due to higher expected credit losses. Meanwhile, quarterly revenue declined 3.8% YoY to RM784.0mn from RM815.0mn a year earlier. (Bursa Malaysia/The Edge) Pentamaster Corporation Bhd's (Not Rated) net profit in 1QFY19 surged 170.7% YoY to RM19.6mn from RM7.2mn a year ago, due to greater operating efficiency that led to higher profit margins and net interest income. Meanwhile, quarterly revenue also increased 19.5% YoY to RM118.8mn from RM99.4mn previously, due to higher sales from its automated equipment operating segment. (Bursa Malaysia/The Edge) Page 4 of 10
7. 16-May-19 N e w s I n B r i e f Economy Malaysi a Malaysia 's Population Increased to 32.66 Million in 1Q19 Malaysia's total population for the first quarter of 2019 rose by 1.1% to 32.66mn from 32.29mn while males outnumbered females by 107 to 100. The 32.66mn comprised of 29.31mn citizens and 3.35mn non-citizens. Of the total population, there were 16.86mn males compared with 15.80mn females. Selangor was the most populous state with 6.54mn population and Putrajaya the lowest with 92,640. The total population, there was a decrease in those aged below 14 years old, which fell from 7.71mn in 1Q18 to 7.69mn. As for the working age population aged between 15 and 64 years old, there was an increase from 22.51mn a year ago to 22.80mn. The data also showed the number of elderly, those 65 years and over, increased from 2.07mn to 2.17mn over the same period. This trend is in line with other developed countries that are heading to aging population. The number of live births recorded had declined by 0.2% to 16,850 in 1Q19 from 117,032 a year ago. There were more boys born in 1Q19 at 60,299 births as compared to female (56,551). Selangor recorded the highest live births with 23,116 births (19.8%) while Labuan recorded the lowest with 380 births (0.3%) in the first quarter 2019. A total of 42,647 deaths was recorded in the first quarter 2019, decreased by 1.0% as compared to first quarter 2018 (43,081). The number of deaths recorded for male was 24,477 while the female was 18,170. In the same period, Selangor recorded the highest number of deaths with 6,673 deaths while Putrajaya recorded the lowest with 59 deaths. (The Star) Government Sets Up Debt Management Office to Strengthen Fiscal Position The government has set up a Debt Management Office (DMO) to overcome and resolve the problem of hidden government debt and liabilities which grew more than RM1tn in 2017. Finance Minister Lim Guan Eng said the DMO would oversee the issuance and propose the structure of debt belonging to the Federal Government, all statutory bodies and the Government’s special purpose vehicles (SPV) in a holistic manner. “The Pakatan Harapan administration intends to cut the incidence of having expensive and irresponsible debt servicing payments arising from weaknesses in debt issuance coordination,” he said in a statement. The DMO is among the institutional reforms carried out to strengthen the government’s fiscal position that is closely monitored by international credit rating agencies, he said. Lim said the DMO was designed to keep government debt and liabilities in check by preventing it from growing out of control, while ensuring that reckless borrowing made without valid reasons will no longer occur. He added Prime Minister Tun Dr Mahathir Mohamad had agreed to the setting up of the DMO. (The Star) Asia China Central Bank Skips OMO as First Phase of RRR Cuts Come Into Effect China's central bank said it will skip open market operations on Wednesday as liquidity levels in the banking system were "reasonable and ample". The People's Bank of China (PBOC) said the first phase of reserve requirement ratio (RRRs) cuts came into effect on Wednesday, and the move released about CNY100bn (USD14.55bn) worth of long-term funds. The central bank said last Monday that it would implement its cut in RRRs for some small- and medium-sized banks in three phases, as part of wider efforts to help companies weather a slowdown in the world's second largest economy. On a net basis, the PBOC will drain CNY10bn from the market for the day via open market operations as the same amount in reverse repos is due to mature on Wednesday. (The Star) Page 5 of 10
8. 16-May-19 China Industrial Output Cools , Retail Sales Growth Falls to 16-Year Low as Trade Risks Rise China reported surprisingly weaker growth in industrial output and retail sales for April, reinforcing expectations that Beijing needs to roll out more stimulus measures as the trade war with the United States escalates. Investment also stumbled unexpectedly, suggesting China’s economy is still struggling for better footing even as a sharp hike in U.S. tariffs on Friday ratcheted up pressure on its exporters. Growth in industrial output slowed more than expected to 5.4% in April from a year earlier, pulling back from a surprising strong 41/2 year high of 8.5% in March, which some analysts had suspected was boosted by seasonal and temporary factors. Analysts polled by Reuters had forecast output would grow 6.5% for the month. China’s exports unexpectedly shrank in April in the face of U.S. tariffs and weaker global demand, while factory surveys suggest new export orders remain sluggish. Retail sales were also worse than expected, with the headline number rising 7.2%, the slowest pace since May 2003, data from the National Bureau of Statistics (NBS) showed. That compared with March’s 8.7% and forecasts of 8.6%, highlighting concerns that consumers are growing less confident as the economic slows and the trade war drags on. Earlier this week, industry data showed automobile sales in China fell 14.6% in April on-year, marking the 10th consecutive month of decline. Fixed-asset investment growth slowed to 6.1% in the first four months of this year. Analyst polled by Reuters had expected it to rise 6.4%, picking up from 6.3% in the first quarter of this year. Private sector fixed-asset investment grew 5.5% in the same period, easing sharply from an increase of 6.4% in the Jan-March period. Private investment accounts for about 60% of overall investment in China. Growth in infrastructure spending, a powerful economic driver, held steady at 4.4% on-year in Jan-April from the first quarter of this year. China is trying to engineer a construction boom to rekindle demand, even as it steps up support measures to keep cash-starved smaller companies afloat, ranging from tax cuts to financial incentives for firms which do not lay off staff. (Reuters) Australia Business Conditions Weaken in April Australia business conditions weakened in April and confidence edged up slightly from March but remained well below average, survey data from the National Australia Bank showed. The business conditions index dropped to +3 from +7 in March. Meanwhile, the confidence index rose 1 point to zero in April. As the confidence indicator remained below average, it suggested little improvement in business conditions in coming months, NAB observed. The bounce in conditions in March was short-lived, as we expected given the weakness in forward looking indicators. The employment index logged a sharp decrease, falling to -1, while trading and profitability each declined by 4 points each. The forward looking indicators of the survey continue to suggest that the weakening in conditions over the second part of 2018 is unlikely to be reversed any time soon, Oster added. (RTT) Australia's Wages Grow at Less-than-Expected Australia's wages grew less-than-expected in the March quarter, figures from the Australian Bureau of Statistics showed. The wages price index climbed 0.5% sequentially in the first quarter. That was just below the 0.6% rise economists had forecast. On a yearly basis, wages increased at a steady pace of 2.3% in the March quarter, for the third quarter in a row, and in line with expectations. Wages in private sector rose by 0.5% and that in the public sector grew 0.4% over the previous quarter. The main contributors to growth over the quarter were regularly scheduled wage rises in the health care and social assistance, and education and training industries, as was the case in the previous March quarter. (RTT) Page 6 of 10
9. 16-May-19 Indonesia Posts Biggest Trade Deficit Ever in April Indonesia posted its widest monthly trade deficit in history in April as exports slumped , while the pace of fall in imports was slower than expected, data from the statistics bureau showed on Wednesday. The resource-rich country booked its first trade deficit in three months at USD2.5bn in April, and it was the widest ever. This compared with a median forecast of USD500mn deficit in a Reuters poll and a USD671mn surplus a month before. The data makes the central bank even less likely to ease monetary policy in the near term. Bank Indonesia (BI) has been pressured to cut interest rates after the U.S. Federal Reserve turned dovish and Indonesian data, including benign inflation and weakening gross domestic product (GDP) growth, augur well for such a move. But officials have been saying they want to see significant reduction in Indonesia's current account deficit - which shows trade in goods and services - before making any cut. BI targets to shrink the current account deficit to 2.5% of GDP this year, from 3% in 2018. All 20 analysts in a separate poll forecast BI to keep its main interest rate unchanged for a sixth straight policy meeting on Thursday, as rising U.S.-China trade tensions renew pressure on the rupiah. There was little reaction in the rupiah spot market after the larger-than-expected April trade data, but the main stock index extended its losses. (The Star) United States Retail Sales Declined in April An important measure of consumer spending fell in April, signaling retail spending was sluggish as the second quarter began. Retail sales, a measure of purchases at stores, restaurants and online, declined a seasonally adjusted 0.2% in April from a month earlier, the Commerce Department said Wednesday. The drop fell short of the 0.2% increase economists had forecast. Excluding the volatile categories of autos and gas, retail sales declined 0.2% in April. Retail sales have been volatile in recent months, and the April report suggested that consumer spending remains uneven despite consumer-sentiment readings that broadly remain at high levels. After declining in February, retail sales bounced back strongly in March, rising a revised 1.7% on the month. The April decline was led by a drop in spending in key categories including electronics, home improvement and vehicles. Wednesday’s report showed sales at motor vehicle and parts dealers fell 1.1% last month. (WSJ) New York Manufacturing Growth Unexpectedly Accelerates in May New York manufacturing activity has picked up significantly in the month of May, according to a report released by the Federal Reserve Bank of New York on Wednesday. The New York Fed said its general business conditions index jumped to 17.8 in May from 10.1 in April, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to drop to 8.5. With the unexpected increase, the New York Fed's general business conditions index reached its highest level since November of 2018. The unexpected increase by the headline index was partly due to a notable acceleration in the pace of shipment growth, with the shipments index surging up to 16.3 in May from 8.6 in April. The new orders index also rose to 9.7 in May from 7.5 in April, indicating a modest acceleration in the pace of new orders growth. (RTT) Page 7 of 10
10. 16-May-19 U .S. Industrial Production Dropped in April The U.S. manufacturing sector faltered again in April, fresh evidence that a slowing global economy and trade frictions are squeezing part of the U.S. economy. Manufacturing output, the biggest component of industrial production, fell 0.5% in April from a month earlier, the Federal Reserve said Wednesday. That helped tug down broader output across factories, mines and utilities last month. So-called industrial production was down 0.5% in April, well below expectations among economists surveyed by The Wall Street Journal for a flat reading. In April, production of long-lasting goods, such as machinery, electrical appliances and motor vehicles, decreased sharply. The longer-term trend in manufacturing production shows the sector is pulling back after a strong 2018. In the first three months of 2019, manufacturing output declined by about 0.4% a month, on average. From a year earlier, manufacturing production fell 0.2% in April. Though manufacturing accounts for a small share of gross domestic product, the sector is highly sensitive to shifts in global demand, making it a bellwether for the broader U.S. economy. Manufacturing appears to be losing its footing domestically as goods-producing segments overseas flash signs of weakness. (WSJ) Trump Weighs Six-Month Window for EU, Japan to Curb Auto Sales President Donald Trump will give the EU and Japan 180 days to agree to a deal that would “limit or restrict” imports into the U.S. of automobiles and their parts, in return for delaying new auto tariffs, according to a draft executive order seen by Bloomberg. According to the order, which people familiar with the matter say Trump is expected to sign this week, the administration has determined that imports of cars into the U.S. present a threat to national security because they have hurt domestic producers and their ability to invest in new technologies. A report by the Commerce Department had found that America’s innovation capacity “is now at serious risk as imports continue to displace American-owned production.” Trump was facing a May 18 deadline to make a decision on auto tariffs. Japanese and European officials have made clear a quota arrangement like the one that Mexico and Canada agreed to in the new Nafta is a red line for them. The U.S. is in talks with both trading partners but autos are not currently part of discussions with the EU. The proclamation will exempt South Korea from any future tariffs because it has renegotiated the U.S.-Korea Free Trade Agreement, or KORUS, last year. Korean officials for months have lobbied the White House for an exemption of the potential tariffs but USTR wouldn’t commit to agreeing on one. Canada and Mexico agreed to limit exports of cars and parts to the U.S. as part of a renegotiated Nafta, although the limits are far above current exports. The U.S. imported US$191.7bn in passenger vehicles and light trucks in 2018 with more than US$90bn of those imports coming from Canada and Mexico, which are duty-free under Nafta. Passenger cars are now subject to a 2.5% U.S. tariff but Trump has threatened to raise that to 25%, arguing that the EU and other countries have higher barriers to U.S. auto exports. (Bloomberg) Eurozone Eurozone GDP Growth Doubles in Q1, Flash Confirmed Eurozone's quarterly economic growth rate doubled in the first three months of the year, latest figures from Eurostat showed on Wednesday, confirming the initial estimate released late April. Gross domestic product grew 0.4% from the fourth quarter of 2018, when the euro area economy expanded 0.2%. The pace of growth was the strongest since the second quarter of 2018, when the economy expanded at the same rate. On a year-on-year basis, GDP rose 1.2% in the first quarter, same as in the previous three months. Both quarterly and annual growth rates were in line with the preliminary estimates released on April 30. In the EU28, the quarterly pace of GDP growth improved to 0.5% from 0.3%. The year-on-year growth rate was steady at 1.5%. (RTT) Page 8 of 10
11. 16-May-19 Germany ’s Economy Rebounds Despite Darkening Trade Outlook Germany’s economy rebounded in the first quarter after narrowly avoiding recession late last year, easing the immediate pressure on policy makers in Europe as the outlook continues to darken for global trade. The better-than-expected figures did little to assuage concerns among economists about the rest of the year. Downbeat business sentiment shows the world’s fourth-largest economy still faces a cocktail of risks that range from a slowdown in key markets to the U.K.’s messy departure from the European Union. The German economy expanded by 0.4% in the three months to March from the previous quarter, driven by vibrant private consumption and a booming construction sector, according to a first estimate published Wednesday by national statistics agency Destatis. The data will come as a relief to policy makers at the European Central Bank, who in March unleashed a fresh round of monetary stimulus to shore up the region’s stumbling economy. (WSJ) Page 9 of 10
12. 16-May-19 N e w s I n B r i e f Share Buy-Back Share Buy-Back : 15 May 2019 Company ANCOM BKAWAN FIMACOR HHHCORP INCKEN KERJAYA MI NYLEX P&O SUPERMX SYF SYSCORP TECFAST TITIJYA TROP Bought Back Price (RM) Hi/Lo (RM) 27,600 9,100 5,000 200,000 1,900 30,000 220,000 18,900 7,000 4,000,000 2,010,000 55,000 36,700 70,000 40,100 0.455/0.44 16.800 1.90 0.09 0.61 1.27/1.25 1.90/1.85 0.645/0.635 1.00/0.99 1.61/1.56 0.205/0.20 0.32 0.28 0.30 0.865/0.855 0.455/0.44 16.800 1.90/1.89 0.09 0.61 1.27/1.25 1.91/1.85 0.645/0.635 1.00/0.985 1.62/1.51 0.205/0.20 0.315/0.305 0.28/0.27 0.295/0.29 0.865/0.855 Total Treasury Shares 9,250,459 39,842,131 5,248,100 2,320,000 42,072,000 8,479,200 635,000 13,268,824 14,969,293 53,002,200 21,265,800 28,002,400 210,000 61,200,200 37,705,442 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 10 of 10
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) PER (X) Div Yield (%) FY19 FY20 FY19 FY20 FY19 FY20 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD 15-May-19 AUTOMOBILE BAUTO 2.30 2.93 27.4% Buy 2,667 0.60 21.8 23.1 10.6 9.9 7.1 7.5 2.48 -7.3 1.80 27.8 7.0 MBMR 2.88 3.19 10.8% Hold 1,126 0.61 31.9 33.3 9.0 8.7 2.8 2.8 3.08 -6.5 1.86 54.8 30.9 PECCA 1.07 1.15 7.5% Buy 196 0.78 6.8 7.9 15.7 13.5 4.7 5.6 1.24 -13.7 0.69 56.2 45.6 SIME 2.20 2.78 26.4% Buy 14,962 1.65 16.3 15.3 13.5 14.4 4.5 4.2 2.91 -24.3 2.04 7.8 -8.3 UMW 5.46 6.55 20.0% Buy 6,379 0.65 47.8 51.4 11.4 10.6 4.4 4.8 6.95 -21.4 4.20 30.0 -0.2 BANKS & FINANCIAL SERVICES ABMB 3.71 4.30 15.9% Buy 5,743 0.77 36.1 39.6 10.3 9.4 4.3 4.3 4.49 -17.4 3.57 3.9 -7.7 AFFIN 2.06 2.50 21.4% Buy 4,091 0.88 26.7 28.7 7.7 7.2 4.9 4.9 2.63 -21.7 2.06 0.0 -7.6 AMBANK 4.36 4.70 7.8% Hold 13,142 1.21 45.3 48.3 9.6 9.0 4.1 4.1 4.64 -6.0 3.50 24.6 0.5 CIMB 5.13 5.80 13.1% Buy 49,902 1.46 50.9 55.0 10.1 9.3 5.1 5.5 6.86 -25.2 5.00 2.6 -10.2 HLBANK 19.40 21.90 12.9% Buy 39,685 0.92 136.5 147.2 14.2 13.2 2.5 2.5 21.66 -10.4 17.56 10.5 -4.9 MAYBANK 9.01 9.30 3.2% Hold 99,558 0.92 77.3 82.5 11.7 10.9 6.4 6.4 10.96 -17.8 8.68 3.8 -5.2 PBBANK 22.48 22.90 1.9% Sell 87,270 0.83 147.6 157.5 15.2 14.3 3.1 3.1 26.16 -14.1 22.02 2.1 -9.2 RHBBANK 5.76 6.30 9.4% Hold 23,098 1.09 60.0 64.0 9.6 9.0 3.8 3.8 6.07 -5.1 5.05 14.1 8.9 BURSA 6.13 6.30 2.8% Sell 4,950 0.84 26.4 27.7 23.2 22.1 3.9 3.9 8.06 -23.9 6.09 0.7 -10.4 ANNJOO 1.56 1.37 -12.2% Sell 840 1.75 19.4 20.6 8.0 7.6 5.3 5.4 2.76 -43.5 1.15 35.7 24.8 CHINHIN 0.77 0.82 6.5% Buy 424 1.05 8.1 9.2 9.5 8.4 3.8 6.1 1.08 -28.7 0.63 22.2 6.2 CHINWEL 1.83 2.08 13.7% Buy 537 0.86 20.2 21.8 9.1 8.4 4.4 4.6 2.00 -8.5 1.49 22.8 13.0 BUILDING MATERIALS CMSB 3.30 4.26 29.1% Buy 3,540 1.67 25.2 25.6 13.1 12.9 3.0 3.0 3.92 -15.8 1.74 89.7 22.7 CSCSTEL 1.09 0.68 -37.6% Sell 403 1.08 8.0 9.7 13.6 11.3 4.0 4.9 1.40 -22.1 0.98 11.8 6.9 ENGTEX 0.83 0.62 -25.3% Sell 362 1.03 5.3 7.8 15.5 10.7 0.6 1.4 1.23 -32.5 0.77 7.8 0.6 GADANG 0.80 0.98 23.3% Buy 526 1.68 9.6 11.9 8.3 6.7 2.5 2.5 0.96 -17.2 0.48 67.4 55.9 GAMUDA 3.30 3.22 -2.4% Hold 8,147 1.46 25.4 27.8 13.0 11.9 3.6 3.6 4.54 -27.3 2.00 65.0 41.0 CONSTRUCTION Note: GAMUDA proposed 1 for 4 rights issue warrants. For more details please refer to 17.12.18 report. GDB 0.29 0.33 15.8% Hold 178 na 4.1 3.4 6.9 8.5 5.3 5.3 0.45 -36.7 0.22 29.5 23.9 IJM 2.11 2.16 2.4% Sell 7,651 1.49 8.5 9.9 24.9 21.4 1.9 2.4 2.37 -11.0 1.39 51.8 30.2 KAB 0.21 0.26 24.4% Buy 69 na 3.2 3.2 6.4 6.4 4.9 4.9 0.31 -33.9 0.19 10.8 5.1 PESONA 0.23 0.27 17.4% Buy 160 1.41 3.8 3.4 6.1 6.7 6.5 6.5 0.37 -37.0 0.17 35.3 21.1 -35.8 SENDAI 0.43 0.52 20.9% Hold 336 1.42 8.7 8.6 5.0 5.0 2.3 2.3 1.09 -60.6 0.41 4.9 SUNCON 1.90 1.54 -18.9% Sell 2,455 1.30 11.0 11.5 17.3 16.6 4.2 4.2 2.23 -14.8 1.30 46.2 42.9 WCT 0.95 0.91 -4.2% Sell 1,312 1.32 4.7 5.8 20.4 16.3 3.2 3.2 1.16 -18.1 0.66 43.9 40.7 LITRAK 4.30 5.11 18.9% Buy 2,270 0.61 42.8 41.5 10.1 10.4 5.8 5.8 5.90 -27.1 3.63 18.5 3.6 CARLSBG 25.12 25.90 3.1% Sell 7,727 0.58 95.9 100.5 26.2 25.0 3.8 4.0 27.38 -8.3 17.08 47.1 27.6 HEIM 23.74 27.00 13.7% Buy 7,172 0.61 105.1 109.3 22.6 21.7 4.3 4.5 25.10 -5.4 17.42 36.3 16.0 AEON 1.43 1.75 22.4% Hold 2,008 0.66 10.0 10.6 14.2 13.4 3.5 3.8 2.63 -45.6 1.39 2.9 -2.7 AMWAY 6.07 7.76 27.8% Buy 998 0.72 37.5 40.5 16.2 15.0 4.9 5.4 8.42 -27.9 5.53 9.7 2.4 F&N 33.88 28.77 -15.1% Sell 12,426 0.84 121.6 126.1 27.9 26.9 2.0 2.2 40.00 -15.3 29.20 16.0 1.1 CONSUMER Brewery Retail HUPSENG 0.99 1.24 25.3% Buy 792 0.46 5.3 6.0 18.5 16.6 6.1 6.1 1.20 -17.5 0.94 5.3 4.2 JOHOTIN 1.42 1.57 10.6% Buy 441 1.16 12.1 14.3 11.7 9.9 3.5 4.2 1.60 -11.3 0.84 70.1 47.9 NESTLE 145.60 159.60 9.6% Hold 34,143 0.61 310.0 332.9 47.0 43.7 2.2 2.3 150.60 -3.3 139.60 4.3 -1.2 PADINI 3.75 4.28 14.1% Buy 2,467 0.67 22.8 25.6 16.5 14.6 3.1 3.2 6.20 -39.5 3.15 19.0 6.8 POHUAT 1.51 1.88 24.5% Buy 334 0.64 22.6 23.7 6.7 6.4 5.3 5.3 1.64 -7.9 1.23 22.8 0.7 QL 6.70 6.58 -1.8% Sell 10,870 0.74 13.5 15.5 49.8 43.2 0.7 0.7 7.63 -12.2 5.17 29.6 -1.6 SCIENTX 8.55 9.80 14.6% Buy 4,369 0.82 62.5 75.6 13.7 11.3 2.5 2.7 9.48 -9.8 6.51 31.3 -3.4 SIGN 0.51 0.40 -20.8% Buy 114 0.75 2.1 4.6 24.0 10.9 3.0 3.6 0.68 -25.2 0.32 60.3 50.7 33.62 35.22 4.8% Sell 9,600 0.87 138.5 143.7 24.3 23.4 3.9 4.0 38.68 -13.1 28.94 16.2 -6.8 GENTING 6.52 8.75 34.2% Buy 25,106 1.09 48.2 55.6 13.5 11.7 2.1 2.5 8.91 -26.8 5.85 11.4 8.0 GENM 3.12 3.66 17.3% Buy 17,639 1.39 15.8 22.2 19.7 14.1 2.6 3.2 5.29 -41.1 2.70 15.7 5.8 2.58 2.21 -14.3% Sell 3,475 0.73 22.0 20.0 11.7 12.9 5.8 5.4 2.65 -2.6 2.01 28.4 22.3 36.8 Tobacco BAT GAMING Casino NFO BJTOTO HEALTHCARE Hospitals/ Pharmaceutical DPHARMA 1.30 1.61 23.8% Buy 860 0.63 7.9 8.4 16.5 15.5 4.3 4.6 1.49 -12.8 0.93 40.5 IHH 5.52 5.52 0.0% Sell 48,421 0.60 11.0 12.5 50.3 44.3 0.5 0.6 6.42 -14.0 4.54 21.6 2.4 KPJ 0.95 1.17 23.2% Hold 4,106 0.66 4.4 4.8 21.6 19.7 2.2 2.4 1.17 -18.8 0.88 8.0 -8.7 HARTA 5.26 4.31 -18.1% Sell 17,598 0.98 13.6 14.9 38.6 35.2 1.6 1.7 7.45 -29.4 4.52 16.4 -14.3 KOSSAN 3.75 5.07 35.2% Buy 4,796 0.61 19.2 21.1 19.6 17.7 2.0 2.2 4.72 -20.6 3.44 9.0 -13.6 SUPERMX 1.59 1.77 11.3% Buy 2,085 0.95 9.9 10.6 16.1 15.0 2.8 3.1 2.31 -31.0 1.30 22.3 -8.6 TOPGLOV 4.97 4.71 -5.2% Hold 12,706 0.42 17.6 19.2 28.3 25.9 1.8 1.9 6.36 -21.9 4.24 17.4 -11.3 ASTRO 1.32 1.60 21.2% Hold 6,883 1.22 10.8 12.3 12.2 10.8 6.8 8.0 1.97 -33.0 1.05 25.7 1.5 MEDIA PRIMA 0.44 0.35 -19.5% Sell 483 0.93 -4.2 -2.4 na na 0.0 0.0 0.60 -27.5 0.28 55.4 26.1 STAR 0.69 0.66 -4.3% Sell 509 1.00 1.0 1.1 70.7 61.0 0.4 0.4 1.28 -46.1 0.62 11.3 0.7 Rubber Gloves MEDIA
14. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) LCTITAN 3.28 MHB 0.69 MISC PANTECH Market Cap. % upside Recom 3.40 3.7% Sell 7,455 0.74 8.0% Sell 1,096 6.55 5.90 -9.9% Sell 0.53 0.73 37.7% PCHEM 8.85 10.80 SERBADK 4.00 4.65 UZMA 0.83 1.35 VELESTO 0.28 FGV IJMPLNT IOICORP (RMm) Beta EPS (sen) PER (X) Div Yield (%) 52weeks 52weeks % Chg FY19 FY20 FY19 FY20 FY19 FY20 High Price % Chg Low Price % Chg YTD 0.99 22.8 30.0 14.4 10.9 3.4 4.3 5.45 -39.8 3.26 0.6 -29.0 1.59 -2.7 1.2 na 57.4 0.0 0.0 0.87 -20.8 0.50 38.4 25.7 29,238 0.92 34.6 37.1 18.9 17.6 4.6 4.6 7.22 -9.3 5.03 30.2 -2.2 Buy 397 0.98 6.4 7.0 8.3 7.6 3.8 4.0 0.64 -17.6 0.41 29.0 23.1 22.0% Buy 70,800 0.79 67.1 67.7 13.2 13.1 3.8 3.8 10.20 -13.2 7.93 11.6 -4.7 16.3% Buy 5,874 1.13 31.0 33.5 12.9 11.9 2.3 2.5 4.28 -6.5 3.06 30.7 5.8 -18.2% Buy 13,556 1.64 11.3 13.2 7.3 6.3 0.0 0.0 1.51 -45.0 0.55 50.9 44.3 0.40 45.5% Buy 2,259 1.80 0.2 0.4 141.0 72.2 0.0 0.0 0.33 -15.4 0.17 66.7 52.8 1.19 1.01 -15.1% Under Review 4,341 1.56 -1.8 -1.5 na na 0.0 0.0 1.90 -37.4 0.63 88.9 66.4 1.48 1.04 -29.7% Sell 1,303 0.88 2.2 5.0 66.7 29.4 2.0 2.0 2.61 -43.3 1.30 13.8 5.7 4.27 4.25 -0.5% Sell 26,076 0.79 15.9 17.9 26.9 23.9 2.2 2.4 4.81 -11.2 4.10 4.1 -4.0 OIL & GAS PLANTATIONS KFIMA 1.66 1.89 13.9% Buy 467 0.69 12.1 13.3 13.8 12.5 5.4 5.4 1.76 -5.7 1.41 17.7 9.2 KLK 24.40 19.35 -20.7% Sell 25,985 0.52 68.3 79.6 35.7 30.7 1.4 1.6 25.78 -5.4 23.26 4.9 -1.3 SIMEPLT 4.69 5.28 12.6% Hold 32,289 na 18.0 21.8 26.1 21.5 3.2 3.2 5.58 -16.0 3.95 18.7 -1.5 TSH 1.00 1.01 1.0% Sell 1,381 0.45 4.2 4.5 23.6 22.1 1.4 1.4 1.28 -21.9 0.96 4.2 1.0 UMCCA 5.22 5.88 12.6% Hold 1,095 0.53 -6.1 13.8 na 37.7 1.5 1.5 6.53 -20.1 5.12 2.0 0.2 GLOMAC 0.36 0.38 5.6% Sell 281 0.62 0.7 2.2 52.8 16.7 1.4 2.8 0.51 -28.7 0.35 2.9 -7.7 HUAYANG 0.36 0.47 32.4% Buy 125 0.82 -3.5 3.9 na 9.2 0.0 0.0 0.50 -29.0 0.30 18.3 2.9 IBRACO 0.68 0.64 -5.2% Sell 335 0.45 7.4 9.1 9.1 7.4 4.1 4.1 0.75 -10.0 0.15 350.0 13.4 IOIPG 1.25 1.84 47.2% Buy 6,883 1.16 14.7 15.4 8.5 8.1 4.0 4.0 1.92 -34.9 1.16 7.8 -18.8 MAHSING 0.93 1.07 15.7% Buy 2,246 0.95 8.8 9.0 10.5 10.3 5.4 5.4 1.32 -29.9 0.89 3.9 1.1 SIMEPROP 0.98 1.12 14.3% Hold 6,665 na 5.5 7.7 17.8 12.8 2.0 3.1 1.51 -35.1 0.91 8.3 -1.5 SNTORIA 0.32 0.40 27.0% Sell 176 0.70 4.8 6.0 6.5 5.3 0.0 3.2 0.62 -49.2 0.31 3.3 -21.3 SPSETIA 2.09 2.24 7.2% Hold 8,428 1.22 10.8 15.0 19.3 13.9 3.6 4.3 3.30 -36.7 1.87 11.8 -10.3 SUNWAY 1.65 1.65 0.0% Sell 8,062 0.91 12.5 13.7 13.2 12.1 4.5 4.5 1.72 -4.1 1.34 23.4 13.4 PROPERTY REIT CMMT 1.12 1.26 12.5% Buy 2,289 0.56 6.9 7.4 16.3 15.2 6.6 7.0 1.29 -13.2 0.99 13.1 10.9 SUNREIT 1.92 2.07 7.8% Hold 5,655 0.64 10.0 10.9 19.3 17.5 5.2 5.7 1.97 -2.5 1.61 19.3 11.0 POWER & UTILITIES MALAKOF 0.81 0.95 18.0% Buy 3,935 1.16 4.8 5.5 16.7 14.6 7.0 7.0 1.04 -22.6 0.75 8.1 0.6 PETDAG 24.40 27.60 13.1% Hold 24,240 0.75 105.7 108.2 23.1 22.6 3.6 3.7 28.48 -14.3 23.00 6.1 -7.9 PETGAS 16.64 17.90 7.6% Sell 32,926 0.92 97.3 98.3 17.1 16.9 4.4 4.4 20.00 -16.8 16.22 2.6 -13.3 TENAGA 11.78 13.20 12.1% Sell 66,992 1.07 97.7 98.5 12.1 12.0 4.6 4.7 16.00 -26.4 11.30 4.2 -13.4 YTLPOWR 0.84 0.75 -10.7% Sell 6,447 1.01 7.1 8.0 11.8 10.5 6.0 6.0 1.27 -33.9 0.73 15.1 1.2 12.5 TELECOMMUNICATIONS AXIATA 4.42 4.75 7.5% Buy 40,126 1.63 14.6 17.2 30.4 25.6 2.8 3.3 5.29 -16.4 3.20 38.1 DIGI 4.70 4.25 -9.6% Sell 36,543 1.07 19.7 20.6 23.8 22.8 4.0 4.2 5.04 -6.7 3.93 19.6 4.4 MAXIS 5.32 4.75 -10.7% Sell 41,585 0.88 20.9 21.1 25.4 25.2 3.8 3.8 5.89 -9.7 5.13 3.7 -0.6 TM 2.74 2.15 -21.5% Sell 10,297 1.73 16.7 19.0 16.4 14.4 3.1 3.5 5.01 -45.3 2.11 29.9 3.0 ELSOFT 0.85 0.81 -4.7% Sell 566 0.89 4.4 5.4 19.1 15.9 3.7 4.5 1.50 -43.3 0.81 4.9 -22.0 INARI 1.57 1.90 21.0% Buy 4,986 0.80 7.0 9.6 22.4 16.3 3.6 4.9 2.56 -38.6 1.22 28.7 4.7 MPI 9.66 10.80 11.8% Hold 1,921 0.92 64.0 89.1 15.1 10.8 3.0 3.0 13.20 -26.8 8.12 19.0 -2.9 -28.6 TECHNOLOGY Semiconductor & Electronics N2N 0.75 1.14 52.0% Buy 419 0.81 4.1 4.7 18.3 15.8 4.0 4.0 1.37 -45.3 0.71 5.6 SKPRES 1.25 1.65 32.0% Buy 1,688 1.27 8.1 10.7 15.5 11.7 3.3 4.4 1.63 -23.3 0.95 32.3 19.0 UNISEM 2.69 2.15 -20.1% Sell 1,956 0.66 11.2 15.3 24.1 17.6 2.8 2.8 3.30 -18.5 2.00 34.5 -18.0 TRANSPORTATION Airlines AIRASIA 2.57 3.42 33.1% Buy 8,589 1.41 20.3 28.5 12.7 9.0 27.2 4.7 3.29 -21.9 2.00 28.7 -13.5 AIRPORT 7.38 8.47 14.8% Buy 12,245 1.04 35.0 39.9 21.1 18.5 2.0 2.3 9.98 -26.1 6.60 11.8 -11.9 Freight & Tankers PTRANS 0.22 0.44 104.7% Buy 306 0.94 2.9 3.5 7.4 6.1 4.7 5.8 0.32 -31.7 0.21 4.9 -8.5 TNLOGIS 0.54 0.68 25.9% Hold 243 0.83 1.4 6.2 38.3 8.6 0.0 0.0 1.16 -53.4 0.54 0.0 -26.5 WPRTS 3.57 3.95 10.6% Hold 12,174 0.78 20.6 24.0 17.3 14.8 4.3 5.0 4.00 -10.8 3.27 9.2 -1.4 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) % upside Recom Market Cap. (S$m) Beta EPS (cent) FY19 PER (X) FY20 FY19 FY20 Div Yield (%) FY19 FY20 52week 52week % Chg High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 26.29 29.50 12.2% Hold 67,244 1.25 232.8 256.5 11.3 10.2 4.6 4.6 29.5 -11.0 22.65 16.1 11.0 OCBC 11.19 13.20 18.0% Buy 47,588 1.22 115.2 125.6 9.7 8.9 3.8 3.8 13.3 -15.8 10.36 8.0 -0.6 UOB 25.10 31.70 26.3% Buy 41,872 1.25 255.8 279.1 9.8 9.0 4.8 4.8 29.7 -15.6 23.63 6.2 2.9 3.50 3.80 8.6% Hold 22,395 0.70 28.1 31.1 12.5 11.3 3.1 3.4 3.7 -5.1 2.97 17.8 12.2 PLANTATIONS WILMAR 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.
15. RESULTS UPDATE Thursday , May 16, 2019 FBMKLCI: 1,611.43 Sector: Building Materials THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM4.26 (+29.1%) Cahya Mata Sarawak Bhd Last Traded: RM3.30 Dragged by Associates Chan Mun Chun Buy Tel: +603-2167-9731 mcchan@ta.com.my Review Excluding an exceptional net gain of RM830k and a reversal of provision for soil erosion remedial works of RM9.0mn, Cahya Mata Sarawak Berhad’s 1QFY19 core profit of RM30.9mn came in below expectations, accounting for 11.5% and 11.1% of ours and consensus’ full-year forecast respectively. The variance was mainly due to lower-than-expected profit contribution from the associates, as well as a decline in PBT recorded by the construction and road maintenance division. YoY, 1QFY19 core profit declined 27.3% to RM30.9mn despite a 17.8% jump in revenue to RM418.2mn. The drop in earnings was mainly dragged by lower profit contribution from the associates. In addition, the construction and road maintenance division suffered from margin squeeze as a result of cost revisions in projects and higher road maintenance costs. Nevertheless, other core businesses remain robust as most of the core divisions recorded revenue and PBT growth. The performance of cement division was exceptional as it managed to achieve 67.4% YoY growth in PBT. Besides higher production volume, the expansion in margin was mainly due to economies of scale achieved in production of clinker, coupled with lower repair costs. QoQ, 1QFY19 core profit plunged 30.5% to RM39.9mn as revenue was 15.8% lower at RM418.2mn. The weaker performance was generally affected by wet and festive seasons. www.taonline.com.my Share Information Bl oomberg Code CMS MK Stock Code 2852 Li s ti ng Ma i n Ma rket Sha re Ca p (mn) 1074.4 Ma rket Ca p (RMmn) 3545.4 52-wk Hi /Lo (RM) 3.92/1.74 12-mth Avg Da i l y Vol ('000 s hrs ) 1,832.7 Es ti ma ted Free Fl oa t (%) 28.1 Beta 1.7 Major Shareholders (%) Ma jaha rta Sdn Bhd - 12.6 Empl oyee Provi dent Fund - 11.3 Ta i b Lejl a - 10.4 Forecast Revision Foreca s t Revi s i on (%) Net profi t (RMmn) Cons ens us TA's / Cons ens us (%) Previ ous Ra ti ng Previ ous Ra ti ng Financial Indicators Net gea ri ng (x) CFPS (s en) P/CFPS (x) ROA (%) ROE (%) NTA/Sha re (RM) Pri ce/ NTA (x) FY19 FY20 270.0 274.8 278.1 285.9 97.1 96.1 Buy (Ma i nta i ned) Hol d (Downgra ded) FY19 Net cas h (9.3) (35.4) 5.9 10.3 2.5 1.3 FY20 Net ca s h 10.5 31.6 5.6 9.8 2.6 1.3 % of FY19 11.5 11.1 Bel ow Bel ow CMS (8.3) 10.0 6.1 (3.5) FBM KLCI (1.2) (4.6) (4.9) (12.8) Scorecard Impact We keep our earnings forecasts unchanged for the time being, with downward bias, pending an analyst briefing later today. Outlook Being one of a dominant building materials player in Sarawak, we expect the performance of its cement and building materials divisions to remain strong, backed by continuous demand from Pan Borneo Highway in Sarawak as well as the potential demand from upcoming state-funded infrastructure projects. vs . TA vs . Cons ens us Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBMKLCI The road maintenance concession remains a near-term concern as the current state road concession will soon expire in June 2019. We believe the group should be able to secure an extension due to its core competency and experience in maintaining the state roads. Valuation We maintain the target price at RM4.26 for the time being, subject to the analyst briefing later today. Maintain Buy on the stock. Source: Bloomberg Page 1 of 3
16. 16-May-19 Sum-of-Parts Valuation Table 1 : Earnings Summary (RMmn) Page 2 of 3
17. 16-May-19 Table 2 : 1QFY19 Results Analysis FYE Dec (RMmn) Revenue Cement Construction material and trading Construction & road maintenance Property development Strategic investments Others Adjustments and elimination Cost of sales Gross profit Operating profit Finance costs Share of results of associates Share of results of joint ventures PBT Cement Construction material and trading Construction & road maintenance Property development Strategic investments Others Core PBT Income tax expense Net profit Profit attributable to owners Core profit Reported EPS (sen) Core EPS (sen) Dividend (sen) PBT Margin (%) Cement Construction material and trading Construction & road maintenance Property development Strategic investments Others Margin (%): - Core PBT - Core PAT - Effective tax rate 1QFY18 355.0 131.8 93.9 111.4 26.3 2.5 16.9 (27.8) (308.0) 47.0 27.1 (7.6) 36.1 1.4 57.0 6.6 9.2 18.1 2.0 (0.6) (3.6) 60.5 (13.4) 43.6 39.0 42.6 3.6 4.0 0.0 4QFY18 496.4 147.8 207.8 146.8 27.0 2.4 18.1 (53.5) (400.3) 96.1 94.3 (14.3) 8.9 (2.8) 86.1 19.8 23.9 23.9 4.8 (0.7) 6.6 73.5 (20.9) 65.2 57.1 44.5 5.3 4.2 7.4 5.0 9.8 16.3 7.6 (22.6) (21.0) 13.4 11.5 16.3 17.7 (31.1) 36.5 17.1 12.0 23.5 14.8 9.0 24.3 1QFY19 QoQ (%) 418.2 (15.8) 146.4 (1.0) 113.0 (45.6) 129.7 (11.6) 44.5 65.2 2.5 3.9 19.4 7.0 (37.4) (30.1) (349.7) (12.6) 68.5 (28.7) (38.8) 57.7 (8.8) (38.6) 13.3 49.7 0.2 <(100.0) 62.4 (27.5) 11.0 (44.4) 21.0 (12.2) 15.3 (35.8) 15.1 215.6 (2.3) 215.7 (1.7) <(100.0) 52.6 (28.4) (13.8) (34.3) 48.7 (25.3) (28.6) 40.8 30.9 (30.5) 3.8 (28.8) 2.9 (30.6) 0.0 (100.0) % pts 7.5 (5.9) 18.6 7.1 11.8 (4.4) 33.9 16.1 (94.7) (63.5) (8.9) (45.4) 12.6 7.4 22.0 (2.2) (1.6) (2.3) YoY (%) 17.8 11.1 20.3 16.5 69.5 (2.1) 14.8 34.3 13.5 45.7 112.5 14.6 (63.0) (88.8) 9.6 67.4 128.3 (15.4) 653.6 309.4 (51.4) (13.1) 2.7 11.8 4.6 (27.3) 4.8 (27.2) na % pts 2.5 8.8 (4.5) 26.2 (72.0) 12.1 3MFY18 355.0 131.8 93.9 111.4 26.3 2.5 16.9 (27.8) (308.0) 47.0 27.1 (7.6) 36.1 1.4 57.0 6.6 9.2 18.1 2.0 (0.6) (3.6) 60.5 (13.4) 43.6 39.0 42.6 3.6 4.0 0.0 % pts 5.0 9.8 16.3 7.6 (22.6) (21.0) (4.5) (4.6) (1.5) 17.1 12.0 23.5 3MFY19 418.2 146.4 113.0 129.7 44.5 2.5 19.4 (37.4) (349.7) 68.5 57.7 (8.8) 13.3 0.2 62.4 11.0 21.0 15.3 15.1 (2.3) (1.7) 52.6 (13.8) 48.7 40.8 30.9 3.8 2.9 0.0 % pts 7.5 18.6 11.8 33.9 (94.7) (8.9) 12.6 7.4 22.0 YoY (%) 17.8 11.1 20.3 16.5 69.5 (2.1) 14.8 34.3 13.5 45.7 112.5 14.6 (63.0) (88.8) 9.6 67.4 128.3 (15.4) 653.6 309.4 (51.4) (13.1) 2.7 11.8 4.6 (27.3) 4.8 (27.2) na % pts 2.5 8.8 (4.5) 26.2 (72.0) 12.1 (4.5) (4.6) (1.5) 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, May 16, 2019, the analyst, Chan Mun Chun, 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
18. RESULTS UPDATE Thursday , May 16, 2019 FBMKLCI: 1,611.43 Sector: Plantation THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* K u a l a L u m p u r K e p o n g B e r h a d TP: RM19.35 Last Traded: RM24.40 Outlook Remains Challenging Angeline Chin Tel: +603-2167 9611 (-20.7%) SELL angelinechin@ta.com.my Review KLK's 1HFY19 results came in below expectations. Excluding the forex impact and other non-core items, 1HFY19 core net profit declined by 38.6% YoY to RM288.0mn. This accounted for 33% and 31% of our and consensus’ full-year estimate. Both manufacturing and plantation divisions showed weaker earnings on YoY basis. Plantation: Despite higher FFB (+5.6% YoY) and CPO (+5.2% YoY) production, 1HFY19 operating profit decreased by 57.0% YoY to RM232.5mn, mainly due to weaker average selling prices of CPO (-23.4% YoY to RM1,904/tonne) and palm kernel (-41.2% YoY to RM1,340/tonne). Manufacturing: 1HFY19 operating profit decreased by 22.6% YoY to RM216.7mn on the back of lower revenue (-13.5% YoY). The poor results were mainly attributed to i) decrease in selling prices, ii) lower contribution from Europe operations, and iii) lower contribution from the oleochemical division. However, the other manufacturing units reported higher profit of RM5.8mn compared with a loss of RM0.4mn in the previous year. Property: This segment recorded an operating profit of RM16.9mn in 1HFY19 compared to RM6.8mn in 1HFY18. The group declared a single-tier dividend of 15 sen for the quarter under review, similar to the corresponding period last year. Impact FY19 - FY21 earnings forecasts are revised downward by 9%-17.3% as we lower our earnings contribution for both plantation and manufacturing divisions. Outlook We believe that the oleochemical segment will continuously face stiff competition, especially in Indonesia. Margins are expected to be volatile due to the uncertainties in the market. According to management, the group will replant approximately 10k ha land in FY19 compared with 5,800 ha in FY18. We understand that the 10k ha includes the balance carry forward from FY2018 replanting program. We expect FFB production to grow by merely 5.1% in FY19. www.taonline.com.my Share Information KLK MK Bloomberg Code Stock Code 2445 Listing Main Market Share Cap (m) 1,065 Market Cap (RMm) 25,985 52-wk Hi/Lo (RM) 25.78/23.26 12-mth Avg Daily Vol ('000 shrs) 1,099 Estimated Free Float (%) 27.5 Beta 0.52 Major Shareholders (%) Batu Kawan Bhd - 47.03 EPF - 11.77 Amanah Saham Bumiputera - 5.82 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY19 FY20 (17.3) (12.7) 727 848 918 1,038 79 82 Sell (Maintained) Financial Indicators Net debt/equity (%) CFPS (sen) P/CFPS (x) ROA (%) NTA/Share (RM) Price/ NTA (x) 3-year EPS CAGR (%) FY19 25.4 (7.9) nm 3.8 10.8 2.3 (12.6) FY20 25.8 (24.1) nm 4.3 11.1 2.2 (7.5) % of FY 33 31 Below Below KLK (2.1) (1.6) (1.9) (3.9) FBM KLCI (1.1) (4.6) (5.6) (13.3) 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 Valuation We downgrade KLK’s TP to RM19.35 (previously RM20.39) based on SOP valuation and roll forward our valuation to CY20. The TP translates into CY20 implied PER of 24x. Maintain SELL recommendation. Potential re-rating catalysts for the stock include: i) stronger-than-expected FFB growth, ii) improvement in downstream margin, and iii) higher CPO price. Source: Bloomberg Page 1 of 3
19. 16-May-19 Figure 1 : Plantation Statistics 2QFY17 1QFY19 2QFY19 % QoQ % YoY 1HFY18 1HFY19 % YoY FFB (tonnes) 957,826 1,105,467 987,904 (10.6) 3.1 1,982,792 2,093,371 5.6 CPO (tonnes) 209,753 238,146 217,394 (8.7) 3.6 432,997 455,540 5.2 2,693,263 2,921,723 2,768,349 (5.2) 2.8 5,849,701 5,690,072 (2.7) 1QFY19 1,840 1,375 2QFY19 1,969 1,301 % QoQ 7.0 (5.4) % YoY (17.9) (37.3) 1HFY18 2,487 2,280 1HFY19 1,906 1,340 % YoY (23.4) (41.2) 2QFY19 110.4 106.5 6.4 (8.4) 215.0 % QoQ (9.5) (3.3) (38.6) nm (28.7) % YoY (52.5) (17.8) 8.9 9.8 (40.1) 1HFY18 540.6 280.0 6.8 21.3 848.7 1HFY19 232.5 216.7 16.9 50.4 516.4 % YoY (57.0) (22.6) 146.5 136.9 (39.1) Rubber (kg) Source: Bursa announcement, TA Research Figure 2 : Average Selling Prices CPO (RM/tonne) Palm Kernel (RM/tonne) 2QFY18 2,398 2,075 Source: Bursa announcement, TA Research Figure 3 : Breakdown of Segmental Operating Profit RM mn Plantation Manufacturing Prop. dev. Inv. Holdings/Others Total 2QFY18 232.6 129.6 5.9 (9.3) 358.7 1QFY19 122.1 110.2 10.5 58.7 301.4 Source: Bursa announcement, TA Research Figure 4: Earnings Summary (RMmn) FYE Sept 30 Revenue EBITDA EBITDA margin Pretax profit Reported net profit Core net profit Reported EPS Core EPS Core EPS growth PER Gross DPS Gross Div Yield ROE (%) (sen) (sen) (%) (x) (sen) (%) (%) FY17 21,004.0 2,086.8 9.9 1,450.2 1,005.1 1,070.3 94.4 100.5 (1.7) 24.3 50.0 2.0 9.7 FY18 18,400.5 1,682.2 9.1 1,117.4 753.3 749.0 70.7 70.3 (30.0) 34.7 35.0 1.4 6.5 FY19F 17,592.1 1,652.2 9.4 1,068.4 727.3 727.3 68.3 68.3 (2.9) 35.7 33.0 1.4 6.3 FY20F 18,507.3 1,853.9 10.0 1,245.0 847.6 847.6 79.6 79.6 16.5 30.7 39.0 1.6 7.1 FY21F 19,256.6 1,948.5 10.1 1,315.2 895.4 893.4 84.1 83.9 5.4 29.1 41.0 1.7 7.2 Page 2 of 3
20. 16-May-19 Figure 5 : 2QFY19 Results Analysis (RM mn) FYE Sept 30 Turnover EBIT Forex and EI Net interest Associates & JV Pretax Taxation MI Net profit Core net profit Core EPS (sen) GDPS (sen) (sen) (sen) EBIT Margin Pretax Margin Tax Rate (%) (%) (%) 2QFY18 4,685.8 298.5 (62.3) (23.1) 0.5 213.6 (87.8) (19.7) 106.2 168.4 1QFY19 4,085.2 257.2 95.2 (25.9) 9.9 336.4 (64.8) (20.7) 250.9 155.7 2QFY19 3,941.9 215.7 10.6 (24.1) (6.1) 196.1 (42.6) (10.5) 143.0 132.4 15.8 15.0 14.6 0.0 6.4 4.6 41.1 6.3 8.2 19.3 QoQ% (3.5) (16.1) nm 7.1 nm (41.7) 34.2 49.2 (43.0) (15.0) YoY% (15.9) (27.7) nm (4.3) nm (8.2) 51.5 46.7 34.7 (21.4) 1HFY18 9,860.8 741.0 (127.8) (44.2) 0.9 569.9 (187.1) (41.3) 341.5 469.3 1HFY19 8,027.1 472.8 105.8 (50.0) 3.7 532.4 (107.4) (31.2) 393.9 288.0 12.4 15.0 44.1 15.0 27.0 15.0 5.5 5.0 21.7 7.5 5.8 32.8 5.9 6.6 20.2 YoY% (18.6) (36.2) nm (13.0) 315.3 (6.6) 42.6 24.5 15.3 (38.6) Figure 6 : KLK’s Sum-of-Parts Valuation Table Value (RMmn) Plantations Manufacturing Property KLK-UEML JV Others Total Net debt SOP value Share capital (mn) Target price (RM) 15,423 4,860 366 1,682 314 22,645 (2034) 20,611 1,065 19.35 Remarks 26x CY20 PAT 16x CY20 PAT 9x CY20 PAT Market value 1 x BV Implied CY20 PER of 24.0x Source: Company, TA Research 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, May 16, 2019, the analyst, Angeline Chin Swee Tyng, 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
21. Thursday , 16 May, 2019 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
22. Technical View Thursday , May 16, 2019 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Technical Stock Watch Malaysia FBM KLCI: 1,611.43 (+12.24, +0.77%) Chartist: Stephen Soo Close Name 15/May FBMKLCI 1611.43 Tel: +603-2167 9607 Change High Low 12.24 1,617.43 1,601.04 Bollinger Bands Lower Mid RSI Upper 14d stsoo@ta.com.my Moving Averages 10d 30d www.taonline.com.my DMI 50d 1,602.51 1,626.89 1,651.27 29.65 1,624.66 1,630.41 1,645.39 MACD DMI MACD Recent Signal DMI MACD DI + DI - ADX Diff Line Signal Diff Signal Change 12.27 42.39 24.63 (30.12) (9.44) (6.91) (2.53) SELL SELL - - AFFIN 2.06 -0.04 2.13 2.06 2.10 2.17 2.25 32.92 2.17 2.18 2.21 10.57 38.35 22.51 (27.78) -0.02 -0.01 (0.01) SELL SELL - - ABMB 3.71 0.09 3.83 3.64 3.66 3.93 4.20 21.48 3.85 3.98 4.05 7.90 42.56 31.02 (34.65) -0.10 -0.06 (0.04) SELL SELL - - AMBANK 4.36 0.05 4.38 4.30 4.35 4.45 4.55 37.20 4.43 4.45 4.48 13.33 24.53 18.54 (11.20) -0.02 -0.01 (0.01) SELL SELL - - AXIATA 4.42 0.12 4.48 4.30 3.69 4.14 4.59 55.61 4.26 4.15 4.16 31.51 26.95 22.44 4.56 0.07 0.04 0.04 BUY BUY - - CIMB 5.13 -0.03 5.21 5.10 5.03 5.16 5.30 46.96 5.19 5.14 5.22 12.23 23.16 22.23 (10.92) -0.01 -0.02 0.00 SELL BUY - - DIGI 4.70 0.13 4.74 4.60 4.39 4.61 4.83 46.99 4.62 4.63 4.61 27.60 29.05 18.68 (1.46) 0.00 0.00 0.00 SELL BUY SELL - GAMUDA 3.30 0.18 3.34 3.14 3.01 3.31 3.60 39.79 3.31 3.25 3.12 19.32 37.19 22.32 (17.87) 0.03 0.07 (0.04) SELL SELL - - GENTING 6.52 -0.02 6.62 6.52 6.56 6.84 7.12 31.35 6.82 6.82 6.85 12.90 30.70 19.50 (17.80) -0.04 0.00 (0.04) SELL SELL - - GENM 3.12 0.05 3.15 3.09 3.06 3.17 3.28 39.09 3.16 3.17 3.24 11.21 23.30 16.62 (12.08) -0.02 -0.02 (0.01) SELL SELL - - IHH 5.52 0.05 5.57 5.41 5.44 5.53 5.63 40.81 5.51 5.55 5.66 15.53 23.86 22.59 (8.33) -0.04 -0.04 (0.00) SELL SELL - - IOICORP 4.27 0.03 4.38 4.22 4.26 4.43 4.60 27.40 4.38 4.45 4.48 7.27 34.05 22.59 (26.77) -0.06 -0.03 (0.03) SELL SELL - - MALAKOFF 0.81 0.00 0.82 0.80 0.82 0.88 0.94 24.37 0.86 0.89 0.90 9.44 35.37 24.74 (25.92) -0.01 -0.01 (0.01) SELL SELL - - MAXIS 5.32 0.01 5.35 5.30 5.24 5.39 5.54 43.16 5.38 5.45 5.42 15.50 20.52 13.58 (5.02) -0.02 -0.02 (0.00) SELL SELL SELL - MAYBANK 9.01 0.05 9.04 8.95 8.88 9.10 9.33 32.78 9.09 9.16 9.26 16.95 32.88 28.47 (15.93) -0.08 -0.06 (0.02) SELL SELL - - MBSB 0.95 -0.02 0.98 0.95 0.96 0.98 1.00 44.71 0.98 0.98 0.97 16.52 25.56 14.03 (9.04) 0.00 0.00 (0.00) SELL SELL - - RHBBANK 5.76 0.00 5.81 5.76 5.66 5.81 5.97 48.50 5.82 5.78 5.74 23.55 16.78 30.24 6.77 0.01 0.03 (0.02) BUY SELL - - SIME 2.20 0.03 2.24 2.16 2.15 2.28 2.41 36.07 2.26 2.25 2.23 10.16 31.93 28.07 (21.77) -0.01 0.01 (0.02) SELL SELL - - 11.78 -0.02 11.84 11.64 11.77 12.12 12.47 31.65 12.05 12.24 12.45 8.11 38.67 38.35 (30.56) -0.18 -0.15 (0.03) SELL SELL - - TM 2.74 0.07 2.79 2.69 2.66 2.86 3.06 24.46 2.79 2.94 3.04 9.24 39.18 36.45 (29.93) -0.09 -0.07 (0.02) SELL SELL - - WPRTS 3.57 -0.06 3.69 3.57 3.60 3.74 3.89 40.07 3.71 3.74 3.75 11.95 24.22 16.28 (12.27) -0.03 -0.01 (0.02) SELL SELL - - AEMULUS 0.21 0.00 0.22 0.21 0.20 0.23 0.25 23.93 0.22 0.23 0.24 14.52 30.85 15.48 (16.33) -0.01 -0.01 (0.00) SELL SELL - - ARMADA 0.20 0.01 0.20 0.19 0.17 0.21 0.26 42.01 0.21 0.21 0.20 27.21 19.16 36.47 8.05 0.00 0.00 (0.00) BUY SELL - - DIALOG 3.28 0.21 3.42 3.15 3.06 3.18 3.30 35.59 3.15 3.18 3.18 12.21 39.16 21.16 (26.95) -0.02 -0.01 (0.02) SELL SELL - - DNEX 0.26 0.01 0.27 0.26 0.25 0.28 0.30 32.48 0.27 0.28 0.29 13.27 32.24 19.27 (18.97) -0.01 -0.01 (0.00) SELL SELL - - FGV 1.19 0.00 1.23 1.19 1.15 1.23 1.31 45.53 1.22 1.23 1.20 23.90 23.57 18.34 0.33 0.00 0.01 (0.01) BUY SELL - - GADANG 0.80 0.01 0.81 0.79 0.67 0.81 0.96 50.46 0.82 0.78 0.73 24.76 22.77 31.07 1.99 0.03 0.04 (0.01) BUY SELL - - GLOBETRONICS 1.68 0.02 1.71 1.66 1.66 1.89 2.12 30.13 1.79 1.87 1.84 21.08 37.22 24.20 (16.15) -0.04 -0.01 (0.03) SELL SELL - - HIAP TECK 0.26 0.01 0.26 0.25 0.25 0.27 0.29 32.87 0.26 0.27 0.28 11.22 34.02 15.76 (22.80) -0.01 0.00 (0.00) SELL SELL - - HIBISCUS 1.08 0.04 1.08 1.05 1.00 1.11 1.22 40.61 1.06 1.12 1.10 16.71 27.05 26.47 (10.35) -0.02 -0.01 (0.01) SELL SELL - - INARI 1.57 0.07 1.57 1.52 1.49 1.71 1.92 34.34 1.62 1.69 1.65 10.34 36.46 30.32 (26.12) -0.04 0.00 (0.03) SELL SELL - - MPI 9.66 0.04 9.66 9.49 9.67 9.88 10.10 37.40 9.85 9.86 9.88 19.57 23.06 25.20 (3.50) -0.03 0.00 (0.03) SELL SELL SELL - MRCB 0.99 0.02 1.01 0.97 0.92 1.01 1.09 47.72 1.00 0.98 0.92 23.24 23.26 42.89 (0.01) 0.02 0.03 (0.01) SELL SELL SELL - SAPURA ENERGY 0.31 -0.01 0.32 0.31 0.31 0.33 0.34 42.26 0.32 0.33 0.33 12.90 20.74 16.74 (7.84) 0.00 0.00 (0.00) SELL SELL - - SKP RESOURCES 1.25 0.00 1.28 1.25 1.27 1.36 1.44 30.75 1.32 1.37 1.35 9.51 43.18 30.69 (33.68) -0.02 -0.01 (0.01) SELL SELL - - SUNCON 1.90 0.00 1.92 1.90 1.91 2.00 2.08 39.16 1.98 1.99 1.92 18.94 37.60 22.65 (18.67) 0.01 0.03 (0.02) SELL SELL - - UEM SUNRISE 0.88 0.02 0.88 0.86 0.83 0.90 0.98 43.52 0.89 0.89 0.87 19.87 22.16 27.32 (2.29) 0.00 0.01 (0.01) SELL SELL SELL - TENAGA VELESTO 0.28 0.00 0.29 0.28 0.27 0.29 0.32 41.63 0.29 0.30 0.29 14.36 24.74 24.19 (10.38) 0.00 0.00 (0.00) SELL SELL - - UNISEM 2.69 0.00 2.69 2.69 2.40 2.57 2.74 56.82 2.63 2.58 2.62 32.29 13.81 40.79 18.48 0.02 -0.01 BUY BUY - - VS INDS 1.04 0.02 1.05 1.02 1.00 1.09 1.18 40.50 1.07 1.09 1.06 15.75 28.83 27.40 (13.08) -0.01 0.01 (0.01) SELL SELL - - WASEONG 0.73 0.01 0.74 0.71 0.69 0.74 0.79 42.89 0.72 0.75 0.76 18.81 35.36 17.47 (16.55) -0.02 -0.01 (0.00) SELL SELL - - 0.02 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
23. 16-May-19 Technical Comments : Buy on Dip IHH Healthcare & Tenaga Any price correction on IHH Healthcare shares below the lower Bollinger band (RM5.44)/towards the 38.2%FR (RM5.28) would be good buying opportunity for rebound towards the 30-day ma (RM5.54), with further resistance coming from 50-day ma (RM5.65) and 61.8%FR (RM5.70). Crucial support is found at 23.6%FR (RM4.98). Tenaga shares should see key retracement support from 176.4%FP (RM11.40) and 200%FP (RM10.74) cushioning correction, while upside on rebound is seen capped by 50-day ma (RM12.45) and 123.6%FP (RM12.88). .01 IHH HEALTHCARE (5225) Z RM5.52 (+0.05) BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 5.63 5.53 5.44 10-day 30-day 50-day RM RM RM DAILY MACD DMI Recent Signal Signal Change SELL Recent Signal Signal Change TENAGA (5347) RM RM RM SIMPLE MOVING AVERAGES 12.47 12.12 11.77 10-day 30-day 50-day SELL Recent Signal Signal Change DMI Recent Signal Signal Change SELL RM11.78 (-0.02) BOLLINGER BANDS Upper Middle Lower 5.51 5.55 5.66 RM RM RM DAILY MACD 12.05 12.24 12.45 SELL Page 2 of 4
24. 16-May-19 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) 8-May 9-May 10-May 13-May 14-May stsoo@ta.com.my (A) Total 5D MF Prv. Chg www.taonline.com.my (B) Cur. Chg CLOSING PRICE 8-May 9-May 10-May 13-May 14-May Chg (A+B) DMF FBMKLCI 22.5 1.1 (4.1) (3.2) 3.8 20.2 0.9 6.9 1,634 1,619 1,610 1,601 1,599 (1.90) 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 0.5 (1.6) 3.3 16.5 2.3 (0.1) (0.1) 0.4 1.8 (0.2) (0.1) 0.2 (1.7) (0.1) 0.1 1.2 (3.1) 0.0 0.2 0.0 (0.6) (0.3) (0.1) (0.0) (0.3) (0.0) 0.0 (0.9) (0.1) 0.0 (0.1) (0.4) 0.2 0.0 (0.1) (0.2) 0.1 0.2 (0.0) 0.0 0.2 0.2 0.5 (1.2) 0.2 0.0 (0.3) 1.2 0.3 (0.5) 0.1 (1.1) 1.2 (0.1) 0.3 1.0 (1.4) (0.1) 0.0 (0.0) (0.5) 0.1 (0.1) (0.5) (0.1) (0.0) (0.0) (1.5) (0.3) (0.0) (0.1) (0.8) 0.1 (0.0) (0.1) (0.3) (0.0) (0.2) 0.0 0.0 0.2 0.0 (0.3) 1.8 (0.4) 1.2 (0.6) (0.1) (0.8) 0.2 (0.0) (0.2) 0.7 (0.1) 0.5 0.2 (0.2) (0.3) (0.1) 0.0 0.0 0.3 (0.1) 0.0 0.0 (0.1) (0.0) 0.0 (0.6) (0.0) (0.3) (0.3) 0.1 (0.0) 0.0 (0.1) (0.0) 0.0 0.0 0.0 0.0 (0.8) 0.9 (0.0) (1.0) (0.2) (0.1) 0.1 (0.7) (0.2) (0.2) (0.4) (0.6) (0.1) (0.2) 0.5 1.7 (0.2) (0.0) 0.0 0.2 (0.2) (0.0) (0.2) 0.1 (0.2) (0.1) (0.4) (0.1) 0.1 (0.0) 0.5 (0.0) 0.3 0.0 (0.1) 0.1 0.2 (0.0) 0.0 0.1 1.6 (2.0) 1.3 4.7 3.5 0.6 1.1 1.0 0.1 (0.1) (1.1) 2.7 (0.1) 2.9 (0.1) 0.3 0.8 0.2 (0.0) (0.0) 0.8 (0.0) 0.3 0.0 (0.0) 0.0 (0.4) (0.6) (0.1) (0.4) 0.3 0.1 0.4 (0.3) (0.0) 0.1 (0.9) 0.0 0.0 1.1 (0.6) 2.4 18.4 5.8 4.5 (0.6) 2.6 1.6 (0.6) (0.2) (2.7) 2.3 (0.4) 3.6 2.7 (2.7) 0.3 0.3 (0.0) (0.9) 0.8 (0.3) (0.3) (0.2) (0.3) (0.1) (3.2) (1.7) 0.0 (1.0) (0.7) 0.4 0.6 (0.4) (0.7) 0.2 (0.7) 0.1 0.0 (0.2) (0.9) 1.2 (1.9) (0.6) (1.4) 0.6 0.1 0.1 (0.4) (0.1) (0.2) (1.3) (0.0) (0.6) 0.3 1.9 0.1 0.1 0.0 0.2 (0.5) 0.1 (0.2) 0.1 (0.1) (0.1) (0.4) 0.6 0.1 0.2 0.7 (0.1) 0.3 (0.0) 0.1 0.1 0.2 (0.0) (0.0) 0.1 2.5 (2.9) 1.4 5.7 3.6 0.6 1.1 1.6 0.4 0.1 (0.8) 3.3 (0.1) 3.1 (0.5) (1.4) 1.0 0.2 (0.0) (0.2) 1.0 (0.0) 0.5 (0.1) 0.1 0.1 (0.0) (0.6) (0.2) (0.4) (0.2) 0.1 0.1 (0.3) 0.1 0.0 (1.1) 0.0 2.16 3.79 4.55 4.56 5.20 4.81 3.32 6.85 3.22 5.51 4.41 0.88 5.52 8.97 0.98 5.82 2.25 12.02 2.81 3.65 0.22 0.21 3.16 0.27 1.21 0.87 1.79 0.27 1.06 1.66 9.87 1.02 0.33 1.32 2.04 0.89 0.28 2.76 1.06 0.72 2.17 3.71 4.43 4.48 5.13 4.79 3.28 6.76 3.14 5.48 4.35 0.84 5.36 8.97 0.98 5.75 2.21 11.94 2.77 3.65 0.21 0.21 3.13 0.27 1.21 0.83 1.78 0.26 1.03 1.58 9.85 1.00 0.32 1.33 1.98 0.89 0.29 2.73 1.07 0.72 2.13 3.74 4.40 4.39 5.12 4.69 3.26 6.76 3.18 5.47 4.24 0.85 5.36 8.97 0.99 5.74 2.20 11.80 2.71 3.66 0.21 0.20 3.14 0.27 1.26 0.81 1.80 0.26 1.04 1.55 9.86 1.00 0.32 1.30 1.95 0.88 0.28 2.68 1.05 0.72 2.09 3.66 4.39 4.30 5.12 4.53 3.20 6.60 3.10 5.46 4.26 0.81 5.36 8.98 0.98 5.72 2.16 11.74 2.69 3.61 0.21 0.19 3.08 0.26 1.20 0.81 1.70 0.24 1.04 1.50 9.80 0.95 0.31 1.28 1.92 0.86 0.29 2.61 1.02 0.70 2.10 3.62 4.31 4.30 5.16 4.57 3.12 6.54 3.07 5.47 4.24 0.81 5.31 8.96 0.97 5.76 2.17 11.80 2.67 3.63 0.21 0.19 3.07 0.26 1.19 0.79 1.66 0.25 1.04 1.50 9.62 0.97 0.32 1.25 1.90 0.86 0.28 2.69 1.02 0.72 0.01 (0.04) (0.08) 0.00 0.04 0.04 (0.08) (0.06) (0.03) 0.01 (0.02) (0.01) (0.05) (0.02) (0.01) 0.04 0.01 0.06 (0.02) 0.02 0.00 0.00 (0.01) 0.00 (0.01) (0.02) (0.04) 0.01 0.00 0.00 (0.18) 0.02 0.01 (0.03) (0.02) 0.00 (0.01) 0.08 0.00 0.02 OUT OUT IN OUT OUT IN IN IN IN IN OUT OUT OUT IN OUT IN OUT IN IN IN OUT OUT IN IN IN IN IN IN OUT IN OUT OUT IN IN IN OUT IN IN OUT 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
25. 16-May-19 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 TOP GLOVE RHBBANK PMETAL SIME HARTALEGA AMBANK DIALOG MAHB (RM'mn) INF LOW OUTF LOW NET FLOW 8-May 22.5 (1.7) (3.2) (3.1) 16.5 0.5 1.8 3.3 0.2 0.2 0.1 2.3 0.3 (0.4) (0.1) 0.0 (0.2) 0.4 0.0 0.1 (0.2) 0.0 (0.3) (0.1) 0.1 0.2 1.2 2.6 (1.6) (0.3) 3.9 Tel: +603-2167 9607 Total Money Flow (RM'mn) 9-May 10-May 13-May 1.1 (4.1) (3.2) 1.2 0.7 (0.6) (0.2) (0.8) (2.4) (1.4) (0.2) 1.7 (1.2) 1.8 (0.0) (1.2) (2.6) 1.4 0.3 0.5 (1.1) (0.1) (0.1) 0.2 0.6 0.4 (0.3) 0.2 (0.5) 1.2 1.8 (0.0) (0.1) 0.2 (1.4) (0.2) 0.3 (0.1) 1.0 0.8 0.2 0.1 0.2 (0.8) (0.3) (0.2) (0.3) (1.1) (0.4) (0.3) (0.0) (0.6) 0.2 0.2 (0.1) (0.5) 0.5 (0.2) (0.5) (0.2) 0.2 0.5 (0.2) 0.2 0.3 0.0 0.3 0.3 14-May 3.8 2.7 (13.4) 0.3 1.3 (0.1) 1.0 (2.0) (1.1) (0.6) 0.6 4.7 (0.1) 1.3 0.6 1.1 0.1 1.1 (0.0) 0.1 0.2 (0.6) (0.1) (0.0) 2.9 0.3 (0.1) 0.7 1.6 0.8 0.5 (0.7) 0.9 (0.4) (0.1) (0.5) (1.0) (0.3) (0.3) (0.1) 0.8 (0.2) 0.1 (0.4) (0.1) 0.1 0.5 (0.3) (0.4) (0.2) (0.5) 0.5 0.0 (0.8) (0.2) 0.3 Total 5D MF 20.2 2.3 (19.9) (2.7) 18.4 (1.9) 1.6 2.4 (2.7) (1.0) (0.9) 5.8 0.2 1.0 (0.6) 2.3 (0.6) 2.6 0.9 0.5 (0.3) (0.4) (2.2) (0.4) 3.6 (0.2) 2.7 4.4 (0.6) 0.8 5.2 33.7 9.0 5.2 6.3 21.9 76.1 (11.2) 22.5 (7.9) 1.1 (9.2) (4.1) (9.4) (3.1) (18.1) 3.8 (55.8) 20.3 19 (11) 16 (14) 12 (18) 9 (21) 19 (11) stsoo@ta.com.my (A) (B) Prv. Chg Cur. Chg 0.9 6.9 (1.3) 3.3 (1.6) (11.0) 1.9 (1.4) (1.9) 1.4 4.0 (1.5) 0.1 1.6 1.2 (2.9) (0.2) (0.8) 0.2 (0.5) 0.6 1.1 (0.6) 5.7 0.1 0.1 (0.3) 1.6 0.6 0.6 0.6 0.3 (0.4) 0.4 0.1 1.1 0.1 0.4 (0.6) 0.2 0.3 0.1 1.0 (1.1) (0.2) 0.3 (0.6) 0.4 (0.6) 3.1 (0.3) 0.8 0.3 (0.5) (0.3) 0.7 (0.9) 2.5 (0.5) 1.0 (0.0) 0.2 8-May 1,634 8.97 22.40 12.02 5.20 8.92 9-May 1,619 8.97 22.28 11.94 5.13 8.90 5.51 4.56 5.52 19.86 5.07 4.81 148.40 17.36 6.85 6.80 4.41 3.22 24.70 24.24 9.78 19.00 18.72 4.81 5.82 4.57 2.25 4.95 4.55 3.16 7.30 5.48 4.48 5.36 19.62 4.99 4.79 145.00 17.30 6.76 6.74 4.35 3.14 24.64 24.24 9.86 19.00 18.62 4.76 5.75 4.46 2.21 4.88 4.43 3.13 7.20 OUTFLOW CLOSING PRICE 10-May 13-May 1,610 1,601 8.97 8.98 22.26 22.32 11.80 11.74 5.12 5.12 8.89 8.84 5.47 4.39 5.36 19.50 4.95 4.69 144.00 17.00 6.76 6.71 4.24 3.18 24.50 24.24 9.80 18.94 18.60 4.75 5.74 4.44 2.20 4.89 4.40 3.14 7.15 5.46 4.30 5.36 19.36 4.91 4.53 143.70 16.88 6.60 6.68 4.26 3.10 24.44 24.30 9.78 18.76 18.62 4.67 5.72 4.30 2.16 4.83 4.39 3.08 7.37 14-May 1,599 8.96 22.46 11.80 5.16 8.81 5.47 4.30 5.31 19.38 4.68 4.57 145.00 16.50 6.54 6.56 4.24 3.07 24.38 24.38 9.75 18.82 18.52 4.78 5.76 4.22 2.17 4.99 4.31 3.07 7.40 Chg (1.90) (0.02) 0.14 0.06 0.04 (0.03) 0.01 0.00 (0.05) 0.02 (0.23) 0.04 1.30 (0.38) (0.06) (0.12) (0.02) (0.03) (0.06) 0.08 (0.03) 0.06 (0.10) 0.11 0.04 (0.08) 0.01 0.16 (0.08) (0.01) 0.03 (A+B) DMF IN IN OUT IN OUT IN IN OUT OUT OUT IN IN IN IN IN IN OUT IN IN OUT IN OUT IN OUT IN IN OUT IN IN IN IN Daily Trading Participation COMPANIES INFLOW www.taonline.com.my Date Retail Institution Foreign Total 8-Ma y 9-Ma y 10-Ma y 13-Ma y 14-Ma y 21.4% 18.6% 21.7% 22.0% 20.1% 46.0% 49.0% 46.2% 55.3% 46.2% 32.6% 32.3% 32.1% 22.8% 33.7% 100% 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, May 16, 2019, 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
26. Technical View Thursday , May 16, 2019 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Stock Screen Malaysia End Day Census of 15.05.2019 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 Lower 4.01 Middle 4.51 Moving Average RSI Upper 5.02 14-day 50.49 5-day 4.56 10-day 4.48 30-day 4.54 50-day 4.84 Vol 20-day avg vol 1 AYER HOLDINGS BHD 2 RIVERVIEW RUBBER ESTATES BHD 4.62 1,000 110 3.00 2.83 2.97 3.12 50.23 2.97 2.96 3.01 3.03 19,500 1,275 3 UOA DEVELOPMENT BHD 4 SPRITZER BHD 2.30 2.16 2.27 2.39 58.13 2.32 2.32 2.23 2.21 854,600 320,250 2.25 2.12 2.22 2.33 53.35 2.27 2.26 2.20 2.17 23,000 7,705 5 CONCRETE ENGINEERING PRODS 6 KEIN HING INTERNATIONAL BHD 0.85 0.60 0.75 0.91 61.62 0.73 0.70 0.78 0.82 1,000 150 0.57 0.47 0.55 0.63 56.05 0.51 0.52 0.53 0.53 10,000 3,775 7 CHIN TECK PLANTATIONS BHD 8 KOSSAN RUBBER INDUSTRIES 6.68 3.75 6.50 3.53 6.62 3.66 6.74 3.79 49.97 63.18 6.63 3.68 6.61 3.68 6.72 3.61 6.74 3.61 6,400 2,166,700 1,010 867,460 9 MULTI-USAGE HOLDINGS BHD 10 HENGYUAN REFINING CO BHD 11 METROD HOLDINGS BHD 0.49 0.41 0.47 0.53 53.16 0.47 0.47 0.46 0.46 7,000 3,955 6.14 5.77 5.98 6.18 57.84 6.02 5.98 5.97 6.00 697,500 383,085 1.76 1.53 1.67 1.80 60.74 1.74 1.72 1.67 1.69 2,000 735 12 CENTRAL INDUSTRIAL CORP BHD 0.60 0.42 0.53 0.63 55.21 0.58 0.56 0.54 0.61 1,200 10 13 KIA LIM BERHAD 14 DIALOG GROUP BHD 0.24 3.28 0.16 3.06 0.22 3.18 0.27 3.31 52.61 59.86 0.23 3.12 0.22 3.15 0.22 3.18 0.22 3.18 13,000 27,496,100 4,560 6,474,515 15 TOP GLOVE CORP BHD 4.97 4.50 4.75 5.00 66.37 4.75 4.79 4.68 4.61 17,679,200 4,030,975 16 GAS MALAYSIA BHD 2.89 2.81 2.87 2.92 56.97 2.85 2.86 2.85 2.85 1,046,000 205,495 17 SUNWAY REAL ESTATE INVESTMEN 1.92 1.81 1.88 1.94 62.10 1.91 1.90 1.86 1.83 3,920,800 2,228,085 18 TEO SENG CAPITAL BHD 19 WHITE HORSE BHD 1.38 1.18 1.04 1.12 1.22 1.16 1.40 1.20 67.82 51.45 1.33 1.18 1.26 1.17 1.20 1.14 1.21 1.21 15,155,900 28,400 2,327,035 8,325 20 OCR GROUP BERHAD 0.34 0.28 0.32 0.35 64.20 0.31 0.31 0.30 0.28 2,983,200 1,593,090 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
27. *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 Bollinger Band RSI Lower Middle Upper Moving Average 14-day 5-day 10-day 30-day 50-day Vol 20-day avg vol 1 PANASONIC MANUFACTURING MALA 38.28 37.41 37.78 38.14 61.26 37.80 37.73 37.73 37.84 700 8,180 2 VORTEX CONSOLIDATED BHD 0.28 0.15 0.19 0.24 84.90 0.20 0.19 0.18 0.17 58,738,800 7,557,365 3,060,790 3 HO HUP CONSTRUCTION CO BHD 0.65 0.40 0.51 0.62 75.41 0.56 0.53 0.49 0.46 15,086,900 4 MCLEAN TECHNOLOGIES BHD 0.15 0.07 0.09 0.12 76.16 0.10 0.10 0.10 0.11 101,200 28,655 5 KUMPULAN POWERNET BHD 0.47 0.24 0.34 0.44 64.85 0.38 0.34 0.35 0.38 134,500 37,100 6 IQ GROUP HOLDINGS BHD 1.21 1.09 1.14 1.19 62.18 1.16 1.15 1.15 1.17 2,100 8,330 7 LTKM BHD 1.30 1.07 1.18 1.28 71.61 1.23 1.19 1.17 1.20 251,400 64,105 8 HARTALEGA HOLDINGS BHD 5.26 4.67 4.96 5.24 65.91 4.91 4.95 4.86 4.81 11,416,900 5,461,605 9 KOBAY TECHNOLOGY BHD 1.43 1.36 1.39 1.42 59.19 1.38 1.39 1.40 1.42 500 17,330 10 TPC PLUS BHD 0.45 0.38 0.41 0.43 60.01 0.41 0.41 0.41 0.42 300 56,895 11 7-ELEVEN MALAYSIA HOLDINGS B 1.49 1.44 1.46 1.48 70.45 1.46 1.46 1.45 1.44 23,000 85,228 12 SMTRACK BHD 0.16 0.12 0.14 0.15 68.28 0.15 0.14 0.13 0.11 14,062,600 4,034,995 13 CAM RESOURCES BHD 0.29 0.23 0.26 0.29 60.58 0.27 0.26 0.25 0.25 250,000 10,850 14 BERJAYA MEDIA BHD 0.21 0.10 0.16 0.21 56.03 0.17 0.17 0.17 0.18 400 12,720 15 MYCRON STEEL BHD 0.33 0.28 0.30 0.32 59.73 0.31 0.30 0.30 0.30 16,000 109,210 16 CAB CAKARAN CORP BHD 0.61 0.55 0.58 0.60 61.09 0.58 0.57 0.58 0.59 2,882,000 535,275 17 LAY HONG BHD 0.48 0.44 0.46 0.47 58.81 0.46 0.46 0.46 0.45 10,792,000 5,654,870 18 FIAMMA HOLDINGS BERHAD 0.50 0.46 0.48 0.50 59.08 0.48 0.48 0.48 0.49 4,100 214,190 19 LEE SWEE KIAT GROUP BHD 0.92 0.84 0.88 0.91 57.02 0.88 0.87 0.88 0.90 106,600 92,920 20 PAN MALAYSIA HOLDINGS BHD 0.07 0.05 0.06 0.06 69.87 0.06 0.06 0.06 0.05 2,191,100 2,661,595 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 Lower Middle RSI Upper 14-day Moving Average 5-day 10-day 30-day 50-day Vol 20-day avg vol 1 SIME DARBY PLANTATION BHD 4.69 4.77 5.04 5.30 23.23 4.92 5.02 5.07 5.08 4,046,000 2,693,160 2 PETRONAS GAS BHD 16.64 16.70 17.41 18.13 23.47 17.01 17.29 17.51 17.59 1,361,400 609,280 3 MERGE ENERGY BHD 1.39 1.43 1.69 1.95 24.72 1.56 1.66 1.72 1.59 96,200 57,835 4 LPI CAPITAL BERHAD 14.96 15.00 15.42 15.84 8.50 15.18 15.31 15.55 15.76 51,800 38,010 5 TA ANN HOLDINGS BERHAD 2.25 2.27 2.34 2.42 37.23 2.32 2.33 2.36 2.36 148,000 125,390 6 AFFIN BANK BHD 2.06 2.08 2.17 2.26 28.00 2.13 2.17 2.18 2.21 222,100 158,060 7 SIME DARBY PROPERTY BHD 0.98 0.99 1.09 1.19 31.95 1.04 1.08 1.10 1.09 5,358,700 3,142,150 8 ABM FUJIYA BHD 0.47 0.48 0.54 0.60 39.95 0.51 0.54 0.54 0.53 40,000 51,380 9 ANALABS RESOURCES BHD 1.01 1.02 1.12 1.22 34.83 1.12 1.11 1.15 1.14 1,000 100 0.93 0.94 0.98 1.03 24.12 0.97 0.98 1.00 1.06 33,000 204,235 80,865 10 SCGM BHD 11 ORIENTAL HOLDINGS BERHAD 6.69 6.70 6.77 6.84 44.30 6.75 6.77 6.71 6.70 90,400 12 HAP SENG PLANTATIONS HLDGS 1.56 1.57 1.65 1.73 33.26 1.62 1.64 1.68 1.75 7,000 63,265 13 MALAYSIA BUILDING SOCIETY 0.95 0.96 0.98 1.00 36.47 0.98 0.98 0.98 0.97 3,978,300 1,849,900 14 KIAN JOO CAN FACTORY BHD 3.05 3.06 3.09 3.13 25.68 3.07 3.08 3.09 3.09 5,000 136,705 15 AJIYA BHD 0.51 0.52 0.54 0.56 31.56 0.53 0.54 0.54 0.54 98,900 117,800 202,040 16 ECO WORLD INTERNATIONAL BHD 0.69 0.69 0.71 0.73 21.16 0.71 0.71 0.72 0.73 678,300 17 TEX CYCLE TECHNOLOGY 0.46 0.47 0.50 0.53 27.82 0.48 0.49 0.51 0.53 20,000 9,330 18 MEGA FIRST CORP BHD 3.48 3.49 3.74 3.99 24.42 3.59 3.70 3.77 3.80 601,500 355,335 19 KWANTAS CORP BHD 0.76 0.77 0.81 0.85 35.08 0.79 0.81 0.82 0.84 112,500 26,000 20 CONNECTCOUNTY HOLDINGS BHD 0.08 0.08 0.10 0.11 20.92 0.09 0.10 0.10 0.11 321,800 74,000 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, May 16, 2019, 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