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Bursa Malaysia Daily Market Report - 17 May

Mohd Noordin
By Mohd Noordin
5 years ago
Bursa Malaysia Daily Market Report - 17 May

Ard, Iman, Islam, Mal, Commenda, Sales


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  1. Wednesday , 17 May, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED REPORTS’ News 1. Daily Market Commentary 2. Daily Brief Fundamental Reports 1. 2. 3. 4. Eversendai Corporation Berhad: Adding RM558mn to Its Order Book Inari Amertron Berhad: Good Start to 2017 IOI Corporation Berhad: Upstream Helps Offset Downstream Hit Petronas Gas Berhad: More Details on Kimanis Arbitration Technical Reports 1. Daily Technical Stock Picks 2. Daily Stock Screen 3. Foreign Technical Stock Watch (AUS, HK & FSSTI) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research
  2. Daily Note Daily Market Commentary TA Research e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (16.05.2017) (mil) Main Market 2,440.0 Warrants 337.2 ACE Market 735.7 Bond 2.5 ETF 0.0 Total 3,515.4 Off Market 27.3 Volume +/-chg (RMmn) -198.2 3,677.4 77.3 42.8 -102.7 118.5 -2.9 1.6 -0.02 0.0 3,840.3 -15.6 67.5 Value +/-chg 878.1 5.5 -39.9 0.9 -0.03 -27.7 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 1,778.15 12,738.04 17,760.11 1,772.00 20,979.75 6,169.87 7,522.03 19,919.82 2,295.33 25,335.94 3,227.71 1,546.35 5,647.00 3,112.96 1,865.27 5,850.52 Off Market SPSETIA G3 BJASSET GPACKET UEMS (A Participating Organisation of Bursa Malaysia Securities Bhd) Menara TA One, 22 Jalan P Ramlee, 50250 Kuala Lumpur Tel : 603 - 2072 1277. Fax : 603 - 2032 5048 Wednesday, 17 May 2017 (mn) 10.2 6.2 3.0 2.1 2.0 @ @ @ @ @ (RM) 3.62 1.40 1.20 0.44 1.28 Exchange Rate USD/MYR 4.3222 -0.0028 USD/JPY 113.64 0.1800 EUR/USD 1.105 0.0083 -0.50 -9.15 18.87 -5.00 -2.19 20.20 67.66 49.97 4.68 -35.65 -36.50 8.93 -41.87 22.74 38.24 12.12 Value/ Volume 1.51 0.13 0.16 0.64 1.08 1.09 2.47 Up Down 296 350 77 84 35 59 3 3 1 1 412 497 % chg % YTD chg -0.03 -0.07 0.11 -0.28 8.31 11.09 20.69 8.35 -0.01 0.33 0.91 0.25 0.20 -0.14 -1.12 0.58 -0.74 0.74 2.09 0.21 6.16 14.62 5.31 4.21 13.27 15.16 12.04 0.22 6.61 0.30 -5.27 3.26 Review & Outlook The local benchmark slid from a fresh two-year high on profit-taking Tuesday, as trading interest focused on stocks expected to bid for the mammoth Bandar Malaysia project. The KLCI ended off half-a-point at 1,778.15, after falling from early high of 1,787.54 to low of 1,773.09, as losers edged gainers 497 to 412 on lower turnover of 3.51bn shares worth RM3.84bn. While blue chips should slip into profit-taking consolidation, robust trading momentum is likely to center on potential candidates keen on bidding for the Bandar Malaysia project. Immediate upside hurdle for the benchmark is revised to yesterday's new two-year high of 1,787, followed by the 1,800 psychological level and 18 May 2015 high of 1,823. Immediate uptrend supports stays at the rising 30 and 50-day moving average levels, now at 1,755 and 1,748. Any further selloff on IHH below the 38.2%FR (RM5.88) or 3/3/17 low (RM5.78) will aggravate oversold conditions and encourage rebound going forward, while key overhead resistance is from the 61.8%FR (RM6.23) and 200-day ma (RM6.32). Likewise, further weakness on Malakoff to re-visit the 27/2/17 low (RM1.14) may attract bargain hunters looking for oversold rebound towards the 76.4%FR (RM1.30), while stronger support cushion is found at the 123.6%FP (98sen). • • • • • • Top 10 KLCI Movers Based on Mkt Cap. • Counter • Mkt Cap. (RM’mn) MAYBANK 95,822 TENAGA 78,887 PCHEM 58,000 MAXIS 49,193 IHH 48,759 DIGI 38,953 GENTING 37,210 GENM 32,650 TM 24,239 HAPSENG 22,208 Chg Vol. (RM) (mn) -0.03 11.15 -0.06 9.61 -0.02 11.81 -0.02 4.86 -0.25 16.77 -0.10 9.75 -0.01 2.93 -0.04 7.03 -0.03 3.96 -0.01 0.33 Commodities Futures Palm Oil (RM/mt) 2,610.00 -1.00 Crude Oil ($/Barrel) 48.23 -0.59 Gold ($/tr.oz.) 1,236.80 6.30 Important Dates L&G - 8:5 Rights Issue - RI of up to 1,914.1m shares. 8 rights shares for every 5 existing share held, at an issue price of RM0.21 per rights share. LISTING ON: 18/05/2017. 3A - 1:4 Bonus Issue - BI of 98.4m shares. Ex-Date: 23/05/2017. Entitlement Date: 25/05/2017. LISTING ON: 26/05/2017. • • • • • • • • • • News Bites IOI Corporation Berhad's 9MFY17 core profit increased by 30.0% YoY to RM844.6mn. It is within expectations. Inari Amerton Bhd posted a 9MFY17 core net profit of RM152.6mn (-18.0% QoQ, +40.8% YoY). This was within ours and consensus estimates. Dialog Group Bhd's 3QFY17 net profit increased by 22.0% to RM97.8mn mainly attributable to higher contributions from its joint ventures. BIMB Holdings Bhd's 1QFY17's revenue and PBT respectively increased by 3.2% YoY to RM919.6mn and 15.8% YoY to RM246.2mn. IWH CREC Sdn Bhd is allowed to bid for the Bandar Malaysia real estate project again as long as the offer is right for the Malaysian Government. Petroliam Nasional Bhd, through subsidiary Petronas LNG Ltd and shipping affiliate MISC Bhd, plans to team up with Gas4Sea partners and identify business opportunities in the supply of liquefied natural gas as marine fuel. Minister in the Prime Minister's Department Datuk Seri Abdul Rahman Dahlan has called for the adoption of the industrialised building system to be made mandatory for all players in the construction industry. Sime Darby Bhd has received its bondholders' approval to restructure its US$800mn sukuk, which forms part of its plan to create three independent listed companies. Sime Darby Motors, the automotive arm of Sime Darby Bhd, is selling its Australia and New Zealand Sime Darby Automobiles distribution businesses. Turkey's TAV Havalimanlari Holding AS will bid for the Istanbul unit of Malaysia Airports Holdings Bhd if a stake in the operator of Turkey's second-biggest airport is put up for sale. AirAsia Bhd is reportedly planning to set up a subsidiary company in Cambodia to cater to the anticipated rise in the number of passengers travelling to Phnom Penh, Siem Reap and Sihanoukville from Malaysia. MyEG Services Bhd is close to sealing a deal to buy a controlling stake in popular food review website Eat Drink KL say sources. Perdana Petroleum Bhd has proposed to undertake a private placement of up to 10% of the total number of its issued shares. Eversendai Corporation Bhd announced that it has secured projects worth RM557.6mn to-date, bringing a total of RM1.3bn projects secured for the year 2017. CAB Cakaran Corporation Bhd's 51% owned subsidiary, Tong Huat Poultry Processing Factory Pte Ltd, has exercised the option to purchase a factory site in Singapore for SGD6.1mn. Tadmax Resources Bhd, which sees a turnaround this year, said it will go in alone and build a 1,000MW combined-cycle gas-fired power plant project in Pulau Indah, Selangor after Tenaga Nasional Bhd declined the offer to participate in the project. Grand-Flo Bhd is disposing 8.1% of its equity interest in Simat Technologies Public Company Ltd for a total cash consideration of THB106.6mn. The US residential starts fell 2.6% to 1.17mn annualized rate vs. forecast 1.26mn, lowest since November, while permits decreased 2.5% to 1.23mn million annualized pace vs. forecast 1.27mn. DISCLAIMER The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD Kaladher Govindan, Head of Research
  3. TA Securities Wednesday , May 17, 2017 FBMKLCI: 1,778.15 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Daily Brief Market View, News In Brief: Corporate, Economy, and Share Buybacks THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TA Research Team Coverage Market View Tel: +603-2072 1277 taresearch@ta.com.my www.taonline.com.my Keen Speculation on Bandar Malaysia Bids The local benchmark slid from a fresh two-year high on profit-taking Tuesday, as trading interest focused on stocks expected to bid for the mammoth Bandar Malaysia project. The KLCI ended off half-a-point at 1,778.15, after falling from early high of 1,787.54 to low of 1,773.09, as losers edged gainers 497 to 412 on lower turnover of 3.51bn shares worth RM3.84bn. Resistance at 1,787, Then 1,800 While blue chips should slip into profit-taking consolidation, robust trading momentum is likely to center on potential candidates keen on bidding for the Bandar Malaysia project. Immediate upside hurdle for the benchmark is revised to yesterday’s new two-year high of 1,787, followed by the 1,800 psychological level and 18 May 2015 high of 1,823. Immediate uptrend supports stays at the rising 30 and 50-day moving average levels, now at 1,755 and 1,748. Bargain IHH & Malakoff for Rebound Any further selloff on IHH below the 38.2%FR (RM5.88) or 3/3/17 low (RM5.78) will aggravate oversold conditions and encourage rebound going forward, while key overhead resistance is from the 61.8%FR (RM6.23) and 200-day ma (RM6.32). Likewise, further weakness on Malakoff to re-visit the 27/2/17 low (RM1.14) may attract bargain hunters looking for oversold rebound towards the 76.4%FR (RM1.30), while stronger support cushion is found at the 123.6%FP (98sen). Asian Markets Mostly Higher as Oil Extends Gain Asian equities were mostly higher on Tuesday, following the bounce in oil prices after the energy ministers of Russia and Saudi Arabia announced output cuts should be extended till March 2018 and as investors largely shrugged off U.S. political news on President Donald Trump. U.S. West Texas Intermediate crude jumped more than 3 percent on Tuesday following the news. Saudi Arabia and Russia are the world's top two oil producers. In stateside, investors were also mulling the potential economic policy impact of a Washington Post report that Trump divulged highly classified information during his meeting with Russian officials last week. Japan's Nikkei share average edged up on Tuesday, drawing support from a sagging yen and a rise in U.S. shares to record highs. The Nikkei ended the day 0.25 percent higher at 19,919.82. In the down under, Australia's S&P/ASX 200 rose 0.21 percent or 12.198 points to finish at 5,850.6, driven by gains in its industrials and materials sub-indexes. On mainland, China stocks reversed earlier losses to end higher for the fourth straight day, as investors were relieved by central bank efforts to boost liquidity in the financial system even as regulators announced fresh curbs on shadow banking. The blue-chip CSI300 index rose 0.9 percent, to 3,428.65 points, while the Shanghai Composite Index gained 0.7 percent to 3,112.96 points, both posting their best day in five weeks. Page 1 of 8
  4. TA Securities 17-May-17 A Member of the TA Group Dow End Session Flat on Mixed Economic Data The S &P 500 and the Dow ended Tuesday's session flat after mixed economic data and retail earnings, while the Nasdaq had another record close with help from technology stocks. U.S. manufacturing production showed its biggest increase in more than three years in April, bolstering a view that economic growth picked up early in the second quarter despite a surprise decline in homebuilding. Investors were also cautious about potential delays to the government's tax and regulation reform agenda after reports late Monday that President Donald Trump disclosed highly classified information to Russia's foreign minister about a planned Islamic State operation. However, the Nasdaq composite managed record highs on an intraday and closing basis, with an outsized boost from Microsoft, which rose 2 percent. The index also posted a three-day winning streak and has closed higher in eight of the last 10 sessions. On earnings front, Home improvement chain Home Depot reported a better-thanexpected first-quarter performance, but TJX Cos Inc, owner of T.J. Maxx and Marshalls stores, posted slowing comparable-store sales growth and a disappointing current-quarter profit forecast. Only two of the 11 major S&P 500 sectors closed higher, with technology providing the biggest boost. The Dow Jones Industrial Average closed down 2.19 points, or 0.01 percent, to 20,979.75, and the S&P 500 lost 1.65 points, or 0.07 percent, to 2,400.67, easing from an intraday record high of 2,405.77. The Nasdaq Composite added 20.20 points, or 0.33 percent, to 6,169.87, a record close for the index. Page 2 of 8
  5. TA Securities 17-May-17 A Member of the TA Group News In Brief Corporate According to Minister in the Prime Minister 's Department Datuk Seri Abdul Rahman Dahlan, IWH CREC Sdn Bhd is allowed to bid for the Bandar Malaysia real estate project again as long as the offer is right for the Malaysian Government. (The Edge) Petroliam Nasional Bhd, through subsidiary Petronas LNG Ltd and shipping affiliate MISC Bhd, plans to team up with Gas4Sea partners and identify business opportunities in the supply of liquefied natural gas as marine fuel. (The Star) Minister in the Prime Minister's Department Datuk Seri Abdul Rahman Dahlan has called for the adoption of the industrialised building system to be made mandatory for all players in the construction industry. He plans to propose this to the Cabinet with the hope that it will be implemented in the next three years. (The Edge) Sime Darby Bhd has received its bondholders' approval to restructure its US$800mn sukuk, a milestone in the group's proposed debt reorganisation, which forms part of its plan to create three independent listed companies. (The Star) Sime Darby Motors, the automotive arm of Sime Darby Bhd, is selling its Australia and New Zealand Sime Darby Automobiles distribution businesses. These companies import and distribute the Peugeot, Citroen and DS brands in the two markets of Australia and New Zealand. The acquirers are Inchcape Australia for the Australian business and the Rick Armstrong Motor Group for the New Zealand business. (Bursa Malaysia) IOI Corporation Bhd’s 3QFY17 PBT declined by 53.1% YoY to RM392.0mn. Excluding the net foreign currency translation gain and fair value gain on derivative financial instruments from the resource-based manufacturing (RBM) segment, underlying PBT increased by 12.5% YoY to RM246.3mn mainly due to higher contribution from the plantation segment which was moderated by lower contribution from the RBM segment. Revenue increased by 21.2% YoY to RM3.5bn. (Bursa Malaysia) Turkey’s TAV Havalimanlari Holding AS will bid for the Istanbul unit of Malaysia Airports Holdings Bhd (MAHB) if a stake in the operator of Turkey’s second-biggest airport is put up for sale. People familiar with the plan however shared that MAHB plans to retain control of the company. (The Edge) AirAsia Bhd is reportedly planning to set up a subsidiary company in Cambodia to cater to the anticipated rise in the number of passengers travelling to Phnom Penh, Siem Reap and Sihanoukville from Malaysia. (The Edge) Dialog Group Bhd’s 3QFY17 net profit increased by 22.0% to RM97.8mn mainly attributable to higher contributions from its joint ventures, particularly from the Pengerang Independent Terminals, and increased shared of joint ventures results by 90.7% YoY to RM28.6mn. Revenue increased by 42.4% YoY to RM913.6mn. An interim dividend of 1.2sen per share for FYE17 was declared. (Bursa Malaysia) A local daily understands that electronic government services provider MyEG Services Bhd is close to sealing a deal to buy a controlling stake in popular food review website Eat Drink KL. A MyEG spokesman said an official announcement will be made later. (The Edge) BIMB Holdings Bhd’s 1QFY17’s revenue and PBT respectively increased by 3.2% YoY to RM919.6mn and 15.8% YoY to RM246.2mn. The group’s improved performance was mainly due to its Islamic banking’s growth in business activities and Takaful’s higher net wakalah fee income. (Bursa Malaysia) Page 3 of 8
  6. TA Securities 17-May-17 A Member of the TA Group Inari Amerton Bhd ’s 3QFY17’s net profit surged by 129.4% YoY to RM52.2mn in tandem with revenue growth of 26.1% YoY to RM274.0mn on the back of the increase in demand of products as well as changed in product mixed. A third interim dividend of 2.2sen per share for FYE17 was proposed. (Bursa Malaysia) Bursa Malaysia Securities Bhd has issued an unusual market activity query for the unusual price movements of Iskandar Waterfront City Bhd’s (IWC) shares recently. In response, IWC confirmed that it is not aware any corporate development, rumour or report and any other possible explanation for the trading activity. (Bursa Malaysia) Matrix Concepts Holdings Bhd’s 4QFY17’s revenue and net profit respectively decreased by 23.6% to RM161.3mn and 18.7% YoY to RM39.0mn. The poor performance was mainly due to lower revenue recognition from the group’s property development segment, particularly from both commercial and industrial properties as a significant portion of the progress billings would only be recognized after the end of the quarter under review. A fourth interim dividend of 3.75sen per share for FYE17 was declared. Separately, the group proposed to undertake a bonus issue on the basis of 1 bonus share for every 4 existing shares. (Bursa Malaysia) Pharmaniaga Bhd’s 1QFY17 revenue and PBT respectively increased by 10.6% to RM618.3mn and 4.7% to RM27.8mn. The improved performance was primarily due to reduced finance costs, lower amortisation of the Pharmacy Information System, increased contributions from the private sector business and Indonesian operations, although mitigated by higher operating costs. A first interim dividend of 4.0sen per share for FYE17 was declared. (Bursa Malaysia) Perdana Petroleum Bhd (PPB) has proposed to undertake a private placement of up to 10% of the total number of its issued shares. The group intends to utilise 60% of the gross proceeds for repayment of the borrowings of PPB and its subsidiaries and the remaining 40% for working capital requirements and defraying the expenses relating to the proposal. (Bursa Malaysia) Eversendai Corporation Bhd announced that it has secured projects worth RM557.6mn to-date, bringing a total of RM1.3bn projects secured for the year 2017. (Bursa Malaysia) CAB Cakaran Corporation Bhd’s 51% owned subsidiary, Tong Huat Poultry Processing Factory Pte Ltd (THPPF), has exercised the option to purchase a factory site in Singapore for SGD6.1mn (RM18.7mn). The factory would be used by THPPF for processing and packaging of meat products in view of the increase of its production capacity. (Bursa Malaysia) Foundpac Group Bhd recorded 3QFY17 revenue of RM9.4mn and PBT of RM3.8mn. Revenue from sales to overseas customers remained the group’s main contributor and accounted for RM8.9mn or 94.7% of total revenue. (Bursa Malaysia) New Hoong Fatt Holdings Bhd’s 1QFY17 net profit increased by 34.6% YoY to RM7.4mn mainly attributed to higher demand in both local and overseas markets as well as favorable impact from foreign exchange rate, albeit partially offset by higher operating expenses. (Bursa Malaysia) Loss-making Tadmax Resources Bhd which sees a turnaround this year, said it will go in alone and build a 1,000MW combined-cycle gas-fired power plant project in Pulau Indah, Selangor after Tenaga Nasional Bhd declined the offer to participate in the project. (The Edge) Page 4 of 8
  7. TA Securities 17-May-17 A Member of the TA Group JAG Bhd returned to the black in 1QFY17 with a net profit of RM2 .5mn compared to a net loss of RM1.9mn in 1QFY16. The improvement was in tandem with higher average commodity prices for copper, tin, gold, iron and silver as well as the investment holding segment’s RM0.6mn gain on disposal of quoted investment compared to a loss of RM0.4mn in 1QFY16. (Bursa Malaysia) OSK Ventures International Bhd returned to the black in 1QFY17 with a net profit of RM14.8mn compared to the net loss RM4.8mn in 1QFY16. The bright performance was due to the net fair value gain on financial instruments of RM15.2mn recorded in 1QFY17 compared to the loss of RM4.5mn attributed to a net fair value loss on financial instruments in 1QFY16. (Bursa Malaysia) Grand-Flo Bhd (GF) is disposing 8.1% of its equity interest in Simat Technologies Public Company Ltd (Simat) for a total cash consideration of THB106.6mn (RM13.3mn). Simat is principally engaged in the provision of total solution of information technologies services and broadband internet services. The rationale for the disposal was the declining level of synergy between GF and Simat over the recent years as Simat is very much concentrating on growing its new broadband internet services business whilst GF is busy focusing on its property development and enterprise data collection and collation system businesses. (Bursa Malaysia) Page 5 of 8
  8. TA Securities 17-May-17 A Member of the TA Group News In Brief Economy Asia Japan Tertiary Activity Index Falls Unexpectedly in March Japan 's tertiary activity index decreased unexpectedly in March, figures from the Ministry of Economy, Trade and Industry showed. The tertiary activity index dropped 0.2% monthover-month in March, after remaining flat in February. Meanwhile, economists had expected a 0.1% increase for the month. Among the individual components of the survey, activity was down for information and communications, living and amusement-related services, finance and insurance, business-related services. At the same time, activity was up for wholesale trade, electricity, gas, heat supply and water, transport and postal activities, medical health care and welfare, retail trade, goods rental and leasing. On a yearly basis, the tertiary activity index rose 0.3% in March, reversing a 1.4% decline in the preceding month. (RTT News) RBA Minutes: Economic Recovery Continues to be on Track Members of the Reserve Bank of Australia's Monetary Policy Board said that the country's economic recovery is proceeding at a moderate and acceptable pace, minutes from the bank's May 2 meeting revealed. The economy has been helped along by the depreciating exchange rate, the members said, and they cautioned that a reversal could hamper the recovery. They added that the outlook for the global economy as a whole continues to be positive. "Financial and geopolitical risks to the ongoing expansion in the global economy were still present. The improvement in global economic conditions had helped to support commodity prices, although recent commodity price movements had also been affected by commodity-specific supply factors," the minutes said. At the meeting, the RBA left its benchmark lending rate unchanged at the record low of 1.50% for the eighth straight month. The bank had reduced the rate by 25-basis points each in August and May last year. According to the RBA, economic growth will increase gradually over the next couple of years to a little above 3%. The improvement in the global economy contributed to higher commodity prices, which are providing a significant boost of Australia's national income, the RBA observed. (RTT News) China Central Bank Injects Net 170bil Yuan, the Most in Nearly 4 Months China's central bank injected a net 170 billion yuan (US$24.67 billion) into money market through open market operations to offset liquidity stress caused by corporate tax payment and maturing repos. The People's Bank of China's (PBoC) rare explanation for its injection the largest daily net injection since Jan 19 - comes as authorities continue to clamp down on financial risks while ensuring the economy is not being choked of funds. The PBoC injected 150 billion yuan through seven-day reverse bond repurchase agreements and 40 billion yuan through 14-day reverse repos to "offset impact from factors including tax payment and maturing open market operations", it said in a statement published on its website. Twenty billion yuan of reverse repos were due to mature. After the daily operation, the central bank's net injection for the day amounted to 170 billion yuan. The rates on the 7and 14-day reverse repos remained unchanged, according to the statement. The volumeweighted average rate of the benchmark seven-day repo traded in the interbank market, considered the best indicator of general liquidity in China jumped to more than two year highs at the beginning of this month on liquidity tightness. (The Star) United States Drops in U.S. Housing Starts, Permits Show Sector Weakness Unexpected declines in U.S. new-home construction and building permits in April indicate the market is off to a weak start this quarter, government data showed. Residential starts fell 2.6% to 1.17 million annualized rate (forecast was 1.26 million), lowest since November; following revised 1.2 million in the prior month. Permits decreased 2.5% to 1.23 million annualized pace (forecast was 1.27 million) from 1.26 million. A 9.2% drop drove the decline in starts in multifamily construction. The results indicate that residential construction is at risk of dragging down growth in the second quarter, lessening any economic rebound after weakness in the previous period. Other indicators of housing demand remain healthy suggesting that part of the decline in starts and permits could be Page 6 of 8
  9. TA Securities 17-May-17 A Member of the TA Group attributed to shortages of labor and ready-to-build lots , as well as unusually warm weather that may have moved up construction earlier in 2017. Steady hiring and healthier finances are likely to continue to drive home purchases in coming months, echoed by a rise in homebuilder confidence to the second-highest level since 2005. Single-family house construction rose 0.4% to an 835,000 rate from 832,000 the prior month. Work on multifamily homes, such as apartment buildings and condominiums, fell to an annual rate of 337,000; data on these projects can be volatile. Northeast and South regions posted declines in starts, while Midwest and West showed gains; Northeast starts were the lowest since February 2015. Report includes revisions going back to January 2015. Data released by the Census Bureau and Department of Housing and Urban Development in Washington. (Bloomberg) U.S. Industrial Production Rises Most in More than Three Years American factories flexed some muscle in April, boosting output by the most since February 2014 in broad fashion. Along with gains at mines and utilities, total industrial output was also the strongest in more than three years, Federal Reserve data showed. Factory production rose 1% (forecast called for a 0.4% gain) after a 0.4% drop in March. Total industrial production, which also includes mines and utilities, also increased 1% (forecast was for 0.4% gain) after a revised 0.4% gain. Capacity utilization, which measures the amount of a plant that is in use, climbed to 76.7%, the highest since August 2015, from 76.1% in the prior month (forecast was 76.3%). The jump in U.S. manufacturing was broadbased and included the largest surge motor vehicles and parts production since July 2015, according to the Fed. Output also picked up for consumer goods and business equipment, two sources of strength for the economy. With brighter global growth prospects, signs that businesses are more open to investment, and a firm labor market that’s underpinning consumer demand, output may stay strong in coming months. Utility output rose 0.7% after an 8.2% surge in March; the contiguous U.S. had the warmest April since 2012, according to National Oceanic and Atmospheric Administration data. Production of motor vehicles increased 5%; excluding autos and parts, industrial production rose 0.7% for a second month. Manufacturing output excluding vehicles and parts also rose 0.7% in April. Mining output advanced 1.2%, led by gains in coal production and drilling; Oil and gas well drilling, rose 9%. Production of consumer goods rose 1.5%, the most since November 2014; output of business equipment climbed 1.2%. Machinery production rose 0.9%. (Bloomberg) Europe and United Kingdom UK Inflation Climbs to Four-year High, Beating Forecasts Inflation hit the highest level in four years during April, beating forecasts and likely ending a two-year period of real wage growth, according to figures from the Office for National Statistics. Prices were 2.7% higher than in the same month a year ago, up from 2.3% during March. The labour market data showed that wages grew 2.3% in the three months to February. The jump in inflation was mainly driven by airfares — they increase during the Easter holidays, which this year fell in April rather than March. Analysts had expected inflation to increase to 2.6%. The news caused the pound to fall 0.54% against the dollar from a value of $1.295. UK government bond prices fell, pushing the yield on 10-year gilts up by 2 basis points to 1.16%. The retail price index, which is no longer used as an official measure of inflation but is used for some inflation-linked bonds, increased to 3.5% in April from 3.1% the previous month. Input prices — a measure of the costs faced by businesses — grew 16.6% during the month. This is the third consecutive month of slowing growth since the cost inflation peaked at 19.9% in January. Increases have been mainly driven by crude oil as the effect of a fall in the price drops out of the figures, but sterling’s weakness since the EU referendum has also helped drive up import prices. (Financial Times) German Economic Confidence Strongest Since 2015 German economic confidence strengthened to the highest since 2015 as financial market experts expect economic growth to improve in months ahead. The ZEW Indicator of Economic Sentiment rose to 20.6 in May from 19.5 in April, survey data from the Mannheim-based Centre for European Economic Research/ZEW showed. This was the highest score since August 2015 but slightly below the expected level of 22.0. The current conditions index climbed 3.8 points to 83.9 points in May, which was above the expected Page 7 of 8
  10. TA Securities 17-May-17 A Member of the TA Group level of 82 .0 and the highest since July 2011. Taken together, the assessment of the current situation and the economic sentiment show a positive outlook for the German economic growth in the coming six months, ZEW said. (RTT News) Eurozone Trade Surplus Grows in March The euro area trade surplus increased in March from a month ago, as exports rose and imports fell, preliminary data from Eurostat showed Monday. The seasonally adjusted trade surplus rose to a 3-month high of EUR 23.1 billion in March from EUR 18.8 billion in February. Economists had expected a surplus of EUR 18.7 billion for the month. Exports rose 1.4% month-over-month in March, while imports dropped by 1.1%. On a nonseasonally adjusted basis, the euro area trade surplus climbed to EUR 30.9 billion from EUR 28.2 billion in the corresponding month last year. Both exports and imports surged by 13.0% and 14.0%, respectively. The EU28 trade surplus was EUR 10.5 billion in March versus EUR 5.9 billion a year ago. Separately, the euro area economy grew at a steady pace in the first quarter as initially estimated, flash data from Eurostat showed. Gross domestic product climbed 0.5% sequentially, the same pace of growth as seen in the fourth quarter. The rate came in line with preliminary flash estimate published on May 3. On a yearly basis, GDP growth slowed slightly to 1.7% from 1.8% in the fourth quarter. The annual rate also matched initial estimate. The EU28 expanded 0.5% sequentially and by 2% from the prior year in the first quarter. The sequential growth was revised from 0.4% and the annual rate from 1.9%. (RTT News) Share Buy-Back: 16 May 2017 Company APEX FIAMMA FITTERS GRANFLO Bought Back Price (RM) Hi/Lo (RM) 2,000 450,000 100,000 10,000 1.82 0.58 0.41 0.23 1.83/1.79 0.58/0.57 0.415/0.405 0.23/0.225 Total Treasury Shares 10,922,118 15,410,000 18,701,400 6,133,800 Source: Bursa Malaysia Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. liability for any direct or indirect loss arising from the use of this document. the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 8 of 8 We accept no We, our associates, directors, employees may have an interest in
  11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR UMW Share Price (RM) 16-May-17 2.09 2.45 5.80 Target Price BETA (RM) EPS (sen) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 2.36 2.04 5.12 0.96 0.59 1.22 10.8 22.7 17.7 15.8 23.8 27.6 19.4 10.8 32.8 13.3 10.3 21.0 5.7 3.7 1.9 7.5 3.7 3.1 2.44 2.70 7.00 -14.3 -9.3 -17.1 1.95 1.95 4.43 7.2 25.6 30.9 -1.9 14.5 26.9 4.10 3.40 5.40 6.10 15.80 9.20 22.10 4.70 10.00 1.30 0.95 1.33 1.34 0.67 0.96 0.80 1.31 0.71 35.8 29.4 46.4 50.6 101.3 73.6 136.6 49.0 40.3 37.7 33.1 50.6 55.6 109.8 82.6 140.4 51.7 39.0 12.3 9.8 11.7 11.8 13.9 12.7 14.8 11.2 25.0 11.7 8.7 10.8 10.7 12.8 11.3 14.4 10.6 25.8 3.4 2.8 2.9 3.4 2.9 5.3 2.8 2.2 3.4 3.4 2.8 3.3 3.7 2.9 5.3 2.9 2.2 3.4 4.49 3.00 5.70 5.99 14.28 9.68 20.58 5.59 10.38 -2.0 -4.3 -4.6 -0.3 -1.7 -3.4 -2.0 -2.0 -2.9 3.60 2.08 3.90 4.11 12.70 7.50 18.72 4.46 8.20 22.2 38.0 39.5 45.2 10.6 24.7 7.7 22.8 22.9 18.3 20.1 26.2 32.4 4.0 14.0 2.2 16.3 13.9 0.44 1.29 5.46 3.53 0.89 2.06 2.32 5.86 0.49 1.62 5.49 3.27 0.68 1.90 1.50 5.58 0.80 0.67 1.06 1.09 1.20 na 1.11 0.13 5.7 14.6 31.6 16.8 10.4 12.6 11.9 44.3 5.7 13.5 36.4 20.9 11.4 12.5 11.8 45.8 7.7 8.8 17.3 21.0 8.6 16.3 19.5 13.2 7.7 9.6 15.0 16.9 7.8 16.4 19.7 12.8 0.0 2.2 2.2 2.7 1.1 2.7 1.3 4.3 2.3 2.2 2.2 2.7 1.1 2.7 1.3 4.3 0.51 1.35 5.48 3.61 1.05 2.13 2.49 6.13 -13.7 -4.6 -0.4 -2.2 -15.2 -3.3 -6.8 -4.4 0.36 0.80 4.65 3.07 0.41 1.42 1.41 5.15 22.2 62.1 17.4 15.0 119.8 45.1 64.5 13.8 1.1 22.9 14.2 10.3 54.8 21.2 34.1 -0.3 1.99 2.00 0.47 15.4 15.6 12.9 12.7 5.0 5.0 2.40 -17.1 1.93 3.1 -1.0 14.80 18.52 15.41 21.08 0.55 0.57 69.6 93.1 77.5 21.3 101.9 19.9 19.1 18.2 4.7 4.5 5.2 5.0 15.30 18.74 -3.3 -1.2 12.84 14.58 15.3 27.0 6.3 13.1 2.35 7.70 25.30 82.10 3.49 1.85 4.90 1.00 2.23 9.59 27.41 88.66 3.76 2.74 4.17 1.10 0.49 0.35 0.35 0.37 0.50 0.68 0.46 0.58 6.5 35.9 120.5 293.6 22.3 25.1 12.7 9.3 7.5 40.5 148.1 326.2 24.7 25.3 15.8 12.8 36.2 21.4 21.0 28.0 15.7 7.4 38.6 10.8 31.2 19.0 17.1 25.2 14.1 7.3 31.1 7.8 0.8 3.9 2.8 3.3 4.3 4.3 0.9 5.0 1.0 4.9 3.0 3.4 4.9 4.3 1.0 5.0 3.00 9.29 27.00 83.68 3.63 2.04 5.00 1.07 -21.7 -17.1 -6.3 -1.9 -3.9 -9.3 -2.0 -6.5 2.11 7.30 22.44 74.12 2.13 1.43 4.14 0.78 11.4 5.5 12.7 10.8 63.8 29.4 18.3 28.2 -8.6 5.1 7.8 5.0 36.9 6.9 13.1 25.8 44.90 52.08 1.06 198.6 187.4 22.6 24.0 4.5 4.5 55.64 -19.3 40.61 10.6 1.7 9.95 5.76 11.53 6.58 1.35 1.28 49.4 25.7 55.6 27.9 20.1 22.4 17.9 20.7 0.5 1.4 0.6 1.6 10.00 6.07 -0.5 -5.1 7.50 4.17 32.7 38.0 25.2 27.5 2.73 0.14 3.81 0.10 0.73 1.31 22.1 0.2 24.6 0.3 12.3 70.9 11.1 46.4 5.9 0.0 7.0 0.0 3.42 0.15 -20.2 -3.4 2.73 0.05 0.0 180.0 -7.8 180.0 5.92 4.18 6.40 4.61 0.78 0.52 13.9 13.3 17.9 16.5 42.6 31.4 33.0 25.4 0.7 1.5 0.8 1.8 6.73 4.37 -12.0 -4.3 5.78 3.85 2.4 8.6 -6.8 0.0 5.59 6.35 2.08 5.22 2.17 6.05 6.80 1.90 5.05 2.55 0.61 0.16 0.31 -0.22 0.28 19.5 35.8 16.2 26.6 4.3 24.4 40.5 18.3 30.2 7.1 28.7 17.7 12.8 19.6 50.6 22.9 15.7 11.3 17.3 30.7 1.4 2.8 2.3 2.6 0.5 1.9 3.2 2.6 2.9 0.8 5.85 7.07 2.69 5.45 2.64 -4.4 -10.2 -22.7 -4.2 -17.8 3.91 5.62 1.88 4.20 1.96 43.0 13.0 10.6 24.3 10.7 15.7 -3.6 -1.4 -2.4 -8.1 INDUSTRIAL SCIENTX SKPRES 8.55 1.37 8.50 1.75 0.59 0.49 67.9 9.1 78.0 14.1 12.6 15.1 11.0 9.7 2.5 3.2 2.8 5.0 8.99 1.44 -4.9 -4.9 5.96 1.12 43.5 22.3 27.6 6.2 MEDIA ASTRO MEDIA PRIMA STAR 2.75 1.09 2.45 3.20 0.95 1.75 1.04 0.67 0.68 13.2 7.8 10.6 14.5 8.1 9.1 20.8 14.0 23.2 19.0 13.5 27.1 4.5 5.7 7.3 4.7 6.0 7.3 3.01 1.52 2.70 -8.6 -28.3 -9.3 2.56 1.00 2.20 7.4 9.0 11.4 5.8 -5.2 9.4 0.45 0.84 7.03 0.44 6.16 1.29 0.61 33.7 13.7 8.4 46.0 17.7 48.8 2.5 -4.0 4.4 3.7 42.7 3.9 18.5 -29.1 1.30 37.7 5.3 BANKS & FINANCIAL SERVICES AFG 4.40 AFFIN 2.87 AMBANK 5.44 CIMB 5.97 HLBANK 14.04 MAYBANK 9.35 PBBANK 20.16 5.48 RHBBANK BURSA 10.08 CONSTRUCTION BPURI GADANG GAMUDA IJM SENDAI SUNCON WCT LITRAK Building Materials WTHORSE CONSUMER Brewery CARLSBG HEIM Retail AEON AMWAY F&N NESTLE PADINI POHUAT QL SIGN Tobacco BAT GAMING Casino GENTING GENM NFO BJTOTO LUSTER HEALTHCARE Hospitals IHH KPJ Rubber Gloves HARTA KOSSAN SUPERMX TOPGLOV KAREX OIL & GAS EATECH 0.60 0.44 1.05 11.5 11.9 5.2 5.0 0.0 0.0 1.18 -49.6 MHB 0.96 0.95 1.85 -1.2 1.3 na 72.9 0.0 0.0 1.23 -22.4 MISC 7.62 7.65 0.83 56.8 54.7 13.4 13.9 3.9 3.9 7.90 -3.5 PANTECH 0.64 0.69 1.28 4.1 5.0 15.3 12.7 2.8 3.1 0.67 -4.5 PCHEM 7.25 7.91 1.06 39.2 41.6 18.5 17.4 2.9 3.0 7.80 -7.1 SENERGY 1.92 2.02 2.43 5.3 4.6 36.6 41.4 0.0 0.0 2.10 -8.6 UMWOG 0.62 0.80 2.03 -12.0 -3.6 na na 0.0 0.0 1.04 -40.4 Note: UMWOG proposed 14 for 5 rights issue shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.79 1.40 1.40 11.3 12.2 15.9 14.6 0.0 0.0 2.02 -11.4
  12. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price (RM) PLANTATIONS FGV IJMPLNT IOICORP KLK SIME UMCCA Target Price BETA (RM) EPS (sen) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 2.00 3.12 4.64 24.90 9.33 6.25 1.53 3.88 4.15 22.75 8.24 7.52 1.81 0.46 1.08 0.93 1.25 0.50 6.3 13.7 18.7 111.8 30.8 32.7 11.1 15.7 21.1 119.1 35.3 34.5 31.5 22.8 24.8 22.3 30.3 19.1 18.0 19.8 22.0 20.9 26.4 18.1 2.5 2.2 2.2 2.2 2.4 2.6 2.5 2.6 2.6 2.4 3.0 2.7 2.52 3.70 4.81 25.50 9.55 6.51 -20.6 -15.7 -3.5 -2.4 -2.3 -4.0 1.31 3.00 4.10 22.72 7.20 5.53 52.7 4.0 13.2 9.6 29.6 13.0 29.0 -8.2 5.5 3.8 15.2 4.2 0.69 1.07 0.84 2.08 1.54 0.80 3.63 3.53 0.69 1.07 1.00 2.26 1.60 0.80 4.10 3.40 0.66 0.66 0.30 0.93 0.70 0.31 0.67 0.49 3.4 20.0 7.3 14.7 14.5 6.4 25.6 27.2 7.0 17.4 11.2 15.3 12.5 9.7 22.8 29.1 20.0 5.3 11.6 14.1 10.6 12.5 14.2 13.0 9.8 6.1 7.5 13.6 12.3 8.2 15.9 12.2 5.8 3.7 4.2 3.4 3.9 1.3 3.9 3.4 5.8 3.3 4.8 3.6 3.6 1.3 3.9 3.4 0.83 1.43 1.05 2.46 1.70 1.00 3.77 3.66 -16.4 -25.3 -20.0 -15.5 -9.4 -20.5 -3.7 -3.6 0.68 1.05 0.84 1.85 1.34 0.69 2.80 2.84 1.5 1.9 0.0 12.6 14.9 15.2 29.6 24.2 -0.7 -5.3 -16.0 6.7 7.7 -0.6 16.0 17.7 1.70 1.50 1.86 1.72 0.54 0.59 8.9 8.1 10.1 8.6 19.2 18.6 16.8 17.4 5.2 5.6 5.9 6.0 1.84 1.72 -7.6 -12.8 1.60 1.44 6.3 4.2 -1.2 -2.0 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.18 24.40 19.70 13.94 1.52 1.45 20.19 19.60 17.37 1.81 0.70 0.75 0.77 1.01 0.60 6.6 98.4 88.2 131.9 8.8 6.1 102.3 101.3 130.8 10.6 17.9 24.8 22.3 10.6 17.4 19.3 23.9 19.5 10.7 14.4 5.9 3.0 3.1 3.2 6.6 5.9 3.1 3.6 3.3 6.6 1.80 25.70 22.66 14.90 1.64 -34.4 -5.1 -13.1 -6.4 -7.3 1.14 22.68 18.10 13.00 1.38 3.5 7.6 8.8 7.2 10.1 -13.9 2.5 -7.5 0.3 2.0 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 5.36 5.01 6.55 6.45 5.25 4.95 5.95 6.95 1.26 0.95 0.71 0.68 16.7 20.8 25.1 21.4 17.6 21.1 25.4 22.3 32.1 24.0 26.1 30.1 30.4 23.8 25.7 28.9 1.6 4.2 3.1 3.0 1.7 4.2 3.1 3.1 5.99 5.19 6.60 6.90 -10.5 -3.5 -0.8 -6.5 4.11 4.38 5.36 5.81 30.4 14.4 22.2 11.0 13.6 3.7 9.5 8.4 TECHNOLOGY Semiconductor & Electronics IRIS 0.20 INARI 2.18 MPI 13.20 UNISEM 3.44 0.14 2.35 13.15 3.55 1.43 0.80 0.54 0.83 -1.2 10.5 94.2 26.9 0.9 na 12.6 20.7 115.7 14.0 29.1 12.8 22.1 17.4 11.4 11.8 0.0 1.9 2.0 3.5 0.0 2.3 2.0 3.5 0.24 2.23 13.22 3.70 -16.7 -2.2 -0.2 -7.0 0.10 1.28 7.02 2.20 100.0 70.0 88.0 56.4 81.8 31.3 78.1 45.8 3.53 8.16 3.02 8.10 1.13 1.47 33.5 17.2 34.9 17.5 10.5 47.3 10.1 46.7 1.1 1.2 1.4 1.2 3.59 8.34 -1.7 -2.2 2.12 5.76 66.5 41.7 54.1 34.7 1.69 3.90 1.88 4.51 0.81 0.68 15.4 19.3 21.5 17.4 10.9 20.2 7.9 22.4 3.3 3.7 4.1 3.3 1.87 4.59 -9.6 -15.0 1.23 3.74 37.4 4.3 6.3 -9.3 PROPERTY GLOMAC HUAYANG IBRACO IOIPG MAHSING SNTORIA SPSETIA SUNWAY REIT SUNREIT CMMT TRANSPORTATION Airlines AIRASIA AIRPORT Freight & Tankers TNLOGIS WPRTS SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price (S$) BANKS & FINANCIAL SERVICES DBS 20.65 OCBC 10.54 UOB 23.25 PLANTATIONS WILMAR IFAR 3.76 0.49 Target Price Beta (S$) EPS (cent) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52week 52week FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 23.30 12.00 25.40 1.23 1.13 1.09 173.8 87.8 195.7 190.2 11.9 92.5 12.0 209.4 11.9 10.9 11.4 11.1 2.9 5.7 3.0 2.9 6.7 3.0 21.0 10.7 24.0 -1.7 -1.0 -3.2 14.72 8.84 17.41 40.3 28.2 33.5 19.1 18.2 14.0 3.72 0.53 0.91 1.12 28.9 3.9 31.1 4.3 12.1 11.5 2.1 2.0 2.4 2.1 4.0 0.6 -6.0 -17.6 2.96 0.44 27.0 11.4 4.7 -6.7 13.0 12.5 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. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
  13. TA Securities A Member of the TA Group MENARA TA ONE , 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Eversendai Corporation Berhad C O M P A N Y U P D A T E Wednesday, 17 May 2017 FBMKLCI: 1,778.15 Sector: Construction TP: RM0.68(-23.6%) Last traded: RM0.89 Adding RM558mn to Its Order Book UNDER REVIEW THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Ooi Beng Hooi Tel: +603-2167 9612 benghooi@ta.com.my Eversendai announced that it has recently secured projects worth RM557.6mn. These projects include Piramal Revanta project in Mumbai, India, which is projected to be the next referral icon in Mumbai Skyline. Other projects Eversendai secured in India include a residential development, a start-up incubator complex for entrepreneurs and an office building project. This brings the accumulative total of jobs secured YTD in India to RM356.9mn. The remaining RM200.7mn of new job win comes from Middle East. Some of the key projects include a museum project, an office tower and a metro station. With this, the total amount of new jobs secured YTD by Eversendai improves to RM1.3bn. Its outstanding order book is estimated at RM3.3bn. Exhibit 1: Historical Order Book Replenishment www.taonline.com.my Share Information Bloomberg Code Bursa Stock Code Listing Share Cap (mn) Market Cap (RMmn) Par Value 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta (x) Major Shareholders (%) EVSD MK SENDAI 5205 Main Market 774.0 688.8 0.50 1.05/0.405 3,229.0 13.2 1.2 Vahana - 71.76 Koon Yew Yin - 6.81 Lembaga Tabung Haji - 5.21 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus (RM'mn) TA's / Consensus (%) Previous Rating FY17 FY18 15.2 11.1 80.1 87.9 61.6 66.0 130.0 133.1 Hold (Under Review) Financial Indicators Net Debt / Equity (%) CFPS (sen) Price / CFPS (x) ROA (%) NTA/Share (RM) Price/NTA (x) Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth Source: Company, TA Research Impact With the strong order book secured YTD, we revise our FY17 order book replenishment assumption from RM1.5bn to RM2.0bn. As a result, we raise FY17/FY18/FY19 earnings forecasts by 7.5%/15.2%/11.1% respectively. Source: Bloomberg Page 1 of 2 FY18 60.9 (9.9) (9.0) 3.1 1.3 0.7 SENDAI 27.1 23.6 42.4 32.8 FBM KLCI 2.6 4.1 9.3 8.9 (12-Mth) Share Price relative to the FBM KLCI Outlook The sizeable outstanding order book will provide earnings visibility to the group for the next 2 years. We opine that implementation of mega projects in Dubai and Qatar to host Expo 2020 and FIFA World Cup 2022 could present opportunities to contractors, including steel structure specialist Eversendai. Valuation We roll forward our valuation base year to CY18. Following the earnings forecasts upgrade, we raise the target price from RM0.58 to RM0.68, based on 6x CY18 EPS. This is after applying a 2x PE multiple discount to our target PE multiple of 8x. We put our call UNDER REVIEW pending the release of 1QFY17 FY17 79.2 (21.0) (4.2) 2.7 1.2 0.7
  14. TA Securities 17-May-17 A Member of the TA Group results expected next week . The upcoming quarterly results may offer some hints on the project margins after a kitchen sinking exercise was carried out in FY16. Financial Statements Profit & Loss (RMm) YE Dec 31 Balance Sheet (RMm) 2015 Revenue 1788.8 EBITDA 143.2 Dep. & amortisation (31.9) Net finance cost 2016 1582.4 (200.4) 2017F 2018F 2019F 2119.6 1914.6 1740.1 YE Dec 31 2015 Fixed assets 649.2 2016 719.5 2017F 2018F 2019F 686.1 656.6 630.5 240.4 233.7 198.6 Others 107.6 15.5 15.5 15.5 15.5 (42.1) (82.7) (78.9) (75.5) NCA 756.7 735.0 701.7 672.2 646.1 (32.6) (24.7) (64.2) (52.2) (23.1) Cash 134.8 386.7 224.4 147.6 112.6 PBT 68.2 (267.2) 93.5 102.6 100.0 Others 1,789.7 1,859.9 1,964.5 1,879.5 1,708.3 Taxation (6.0) (6.9) (9.3) (10.3) (10.0) CA 1,924.6 2,246.6 2,188.8 2,027.1 1,820.9 6.3 4.8 4.0 4.4 4.3 Total assets 2,681.3 2,981.6 2,890.5 2,699.3 2,467.0 280.9 MI Net profit 55.9 (278.9) 80.1 87.9 85.7 Core net profit 47.4 (160.4) 80.1 87.9 85.7 GDPS (sen) 0.5 0.0 1.0 1.0 1.0 ST borrowings 500.8 930.9 730.9 530.9 Div Yield (%) 0.6 0.0 1.1 1.1 1.1 Other liabilities 687.5 846.5 879.1 803.3 738.7 1,188.3 1,777.4 1,610.0 1,334.2 1,019.6 Shareholders' funds1,122.3 1,099.8 CL Cash Flow (RMm) YE Dec 31 2015 PBT 68.2 Non cash expenses 66.7 2017F 2018F 2019F MI (267.2) 93.5 102.6 100.0 LT borrowings 292.1 2016 147.0 131.1 (8.2) (73.6) (62.5) (387.3) (69.3) (72.0) 294.2 (52.6) 94.8 Capex (126.4) (71.7) Others 96.4 (0.3) Investment cash flow (30.0) (72.0) Debt raised/(repaid) 259.3 346.6 Non Operating expenses (41.9) Changes in WC Operational cash flow Dividend Others Financial cash flow Net cash flow 98.6 Other LT liabilities 869.4 941.7 1,021.9 7.8 14.2 18.3 22.7 27.0 299.7 239.4 239.4 239.4 239.4 63.2 81.1 81.1 81.1 81.1 2,681.3 2,981.6 2,890.5 2,699.3 2,467.0 (33.1) 9.1 106.6 180.4 272.1 (50.0) (50.0) (50.0) 0.6 0.6 0.6 (49.4) (49.4) (49.4) (200.0) (200.0) (250.0) Total capital Ratio YE Dec 31 2015 2016 2017F 2018F 2019F EBITDA Margins (%) 8.0 (12.7) 11.3 12.2 11.4 Core EPS (sen) 8.1 (20.7) 10.3 11.4 11.1 162.8 (357.2) (149.9) 9.8 11.0 (4.3) 8.6 7.8 8.0 GDPS (sen) 0.5 0.0 1.0 1.0 1.0 Div Yield (%) 0.6 0.0 1.1 1.1 1.1 (9.7) (3.9) (7.7) (7.7) (7.7) EPS Growth (%) 0.8 (18.3) (0.0) (0.0) (0.0) PER (x) 250.4 324.4 (207.7) (207.7) (257.7) (106.4) 199.9 (162.3) (76.8) (35.0) (2.5) (657.1) (783.6) (745.9) (622.7) (407.7) 59.3 90.1 79.2 60.9 37.1 ROE (%) 4.7 (16.1) 8.8 9.0 8.1 ROA (%) 2.0 (5.7) 2.7 3.1 3.3 Net cash (RMmn) Net gearing (%) NTA (RM) 1.44 1.12 1.22 1.32 1.42 P/NTA(x) 0.6 0.8 0.7 0.7 0.6 Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 2 of 2
  15. RESULTS UPDATE TA Securities Wednesday , May 17, 2017 FBMKLCI: 1,778.15 Sector: Technology A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Inari Amertron Berhad TP: RM2.35 (+7.8%) Last Traded: RM2.18 Good Start to 2017 UNDER REVIEW THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Paul Yap, CFA Tel: +603-2167 9603 paulyap@ta.com.my Review Inari posted a 9MFY17 core net profit of RM152.6mn (-18.0% QoQ, +40.8% YoY). This was within ours and consensus estimates at 73.2% and 79.4%. A third interim dividend of 2.2sen/share was announced (YTD: 7.0sen/share). Despite typical seasonal weakness, flattish revenues were achieved sequentially. A fall in RF utilisation rates to 70% (2QFY17: 75%), were offset by a weaker ringgit and iris scanning & fiber chip contributions. Although profits fell, we note this was attributed to forex losses of RM6.1mn in the current quarter (vs. total forex gains of RM23.1mn in 2QFY17). Revenues increased 5.7% YoY. We believe this was partly attributed to a higher average USD/MYR rate of RM4.27 (+2.3% YoY). The group also suffered from a pull back in orders from a leading smartphone manufacturer in 3QFY16, as it seeked to trim inventories. Impact Leave our earnings forecasts unchanged. Outlook RF revenues are anticipated to be flattish in FY17, due to a shift from 6inch to 8-inch wafers – which are able to store 1.7x more dies. Because of a dissimilar increase in ASPs required to process them, wafer processing revenues were impacted. Its current capacity stands at 700 testers. Space has been freed up at P13 to cater for an additional 80 testers. A potential upside for the group is Inari Optical Technology (IOT) – a new business involved in the packaging and testing of infrared LED. This will be implemented into smartphones for iris scanning capabilities. Its initial capacity of 5mn units/month will eventually be doubled as another line is transferred from its customer’s facilities. Assuming successful adoption, we see volumes possibly picking up to 50-60mn units/month. Valuation We value Inari at an unchanged TP of RM2.35/share – based on a PE of 18x and CY18 EPS. We revise our call for the stock to Under Review, pending further information from an analyst briefing to be held later today. Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (RMmn) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) INRI MK 0166 Main Market 1,985.7 1,157.8 2.23/1.282 5,583.5 58.3 0.8 Insas Berhad - 19.7 Kumpulan Wang Persaraan - 6.9 Norges - 5.9 EPF - 5.4 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 208.5 249.1 196.2 247.7 106.3 100.5 Buy (Under Review) Financial Indicators Net Debt/Equity (%) CFPS (sen) Price/CFPS (x) ROA (%) ROE (%) NTA/Share (RM) Price/NTA (x) FY17 Net cash 11.3 19.3 20.7 26.6 0.4 5.0 FY18 Net cash 14.2 15.4 20.3 26.0 0.5 4.3 % of FY 73.2 79.4 Within Within INRI 9.5 17.8 28.9 60.6 FBM KLCI 2.6 4.1 9.3 8.9 Scorecard vs TA vs Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg Page 1 of 3 www.taonline.com.my
  16. TA Securities 17-May-17 A Member of the TA Group Figure 1 : Forward PE Figure 2 : Forward PB x x 20.0 5.0 18.0 4.5 +1sd: 16.0x 16.0 4.0 14.0 3.5 12.0 3.0 Mean: 10.1x 10.0 +1sd: 3.9x Mean: 2.5x 2.5 2.0 1.5 Source: Bloomberg, TA Securities Jan-17 Apr-17 Jul-16 Oct-16 Jan-16 Jul-15 Oct-15 Jan-15 Apr-15 Jul-14 Oct-14 Jan-14 Apr-14 Jul-13 Oct-13 Jan-13 Apr-13 Jul-12 Oct-12 Jan-12 -1sd: 1.2x Jul-11 Oct-16 Jan-17 Apr-17 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 0.0 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 0.5 0.0 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 2.0 Jan-12 Apr-12 Jul-12 Oct-12 1.0 Jul-11 Oct-11 4.0 Apr-12 -1sd: 4.2x Oct-11 6.0 Apr-16 8.0 Source: Bloomberg, TA Securities Table 1: Earnings Summary (RMmn) YE Jun 30 Revenue EBITDA Depreciation & amortisation Net finance cost EI PBT Taxation MI Net profit Core net profit Diluted EPS (sen) EPS growth (%) PER (x) DPS (sen) Dividend yield (%) FY15 933.1 187.4 (33.1) (2.3) 0.0 152.0 (1.7) 2.3 152.5 152.5 7.6 53.7 28.7 8.9 4.1 FY16 1,040.9 203.1 (49.4) (0.5) 0.0 153.1 (6.0) 1.2 148.3 148.3 7.4 (2.8) 29.6 8.4 3.9 FY17F 1,378.3 283.8 (60.7) 0.6 0.0 223.7 (13.4) (1.7) 208.5 208.5 10.4 40.7 21.0 4.1 1.9 FY18F 1,542.8 334.4 (69.7) 2.1 0.0 266.8 (16.0) (1.8) 249.1 249.1 12.4 19.4 17.6 5.0 2.3 FY19F 1,682.2 370.9 (75.2) 3.8 1.0 300.5 (18.0) (1.9) 280.6 280.6 13.9 12.3 15.7 5.6 2.6 3QFY16 217.3 32.7 (10.8) (0.2) 21.7 3.1 (1.8) 0.0 23.0 (0.3) (1.3) 21.4 21.4 1.1 1.0 2QFY17 275.1 72.9 (14.6) (0.2) 58.0 1.2 (0.4) 5.6 64.4 (2.0) 0.7 63.0 57.5 3.1 1.8 3QFY17 274.0 65.4 (16.1) (0.2) 49.0 1.5 (0.3) 4.1 54.3 (2.1) (1.0) 51.2 47.1 2.5 2.2 QoQ (0.4) (10.3) 10.2 1.4 (15.5) 29.5 (22.8) (27.3) (15.7) 5.3 (242.0) (18.8) (18.0) (18.8) 22.2 YoY 26.1 99.9 49.4 1.4 126.0 (52.0) (82.6) n/a 135.7 634.4 (26.6) 139.1 120.1 139.1 120.0 9MFY16 785.9 146.3 (34.1) (0.7) 111.5 4.9 (4.6) 0.0 111.8 (3.7) 0.3 108.3 108.3 5.4 6.2 9MFY17 830.7 201.4 (44.3) (0.7) 156.4 3.6 (1.1) 9.7 168.6 (5.9) (0.4) 162.2 152.6 8.1 7.0 YoY 5.7 37.7 30.0 0.3 40.2 (25.4) (76.4) n/a 50.8 59.3 (269.5) 49.7 40.8 49.7 12.9 15.1 10.0 10.6 1.3 9.8 26.5 21.1 23.4 3.1 22.9 23.9 17.9 19.8 3.9 18.7 pp (2.6) (3.2) (3.6) 0.8 (4.2) pp 8.8 7.9 9.2 2.6 8.8 18.6 14.2 14.2 3.3 13.8 24.2 18.8 20.3 3.5 19.5 pp 5.6 4.6 6.1 0.2 5.7 Table 2: 9MY17 Results Analysis (RMmn) FYE Jun Revenue EBITDA Depreciation Amortisation EBIT Finance income Finance costs EI PBT Taxation MI Net profit Core net profit EPS (sen) DPS (sen) Profitability ratios (%) EBITDA margin EBIT margin PBT margin Tax rate Net profit margin Page 2 of 3
  17. TA Securities 17-May-17 A Member of the TA Group ( T HI S P AGE I S I NT E N T I ON AL L Y L E FT B L ANK) Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 3 of 3
  18. RESULTS UPDATE TA Securities Wednesday , May 17, 2017 FBM KLCI: 1,778.15 Sector: Plantation A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 IOI Corporation Berhad TP: RM4.15 (-11%) Upstream Helps Offset Downstream Hit Last Traded: RM4.64 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Sell Angeline Chin Tel: +603-2167 9611 angelinechin@ta.com.my Review IOI’s 9MFY17 results came in within expectations. Excluding disposal gains and other non-core items, core profit increased by 30.0% YoY to RM844.6mn, accounting for 72% and 71% of ours and consensus’ full year estimate. The higher earnings from the plantation helped to offset lower contribution from the downstream business. Plantation: Despite lower FFB production (-3% YoY), 9MFY17 operating profit increased sharply by 45.1% YoY to RM873.6mn. The commendable results were mainly due to higher CPO and PK prices. Note that the average selling price of CPO for 9MFY17 has increased by 26.7% YoY to RM2,753/tonne. Meanwhile, PK price has surged www.taonline.com.my Share Information Bloomberg Code IOI MK Stock Code 1961 Listing Main Market Share Cap (mn) 6,301 Market Cap (RMmn) 29,237 Par Value 0.10 52-wk Hi/Lo (RM) 4.81/4.10 12-mth Avg Daily Vol ('000 shrs) 5,529 Estimated Free Float (%) 33.4 Beta 1.08 Major Shareholders (%) Vertical Capacity S/B - 47.16 EPF - 9.39 Forecast Revision tremendously by 81.5% YoY to RM2,875/tonne. Manufacturing: As expected, the downstream segment has suffered markedly in 3QFY17 as a result of lower sales volume and lower margin from the oleochemical and refining sub-segment. Operating profit decreased substantially to merely RM13.4mn (-91.9% QoQ, -88.8% YoY) in 3QFY17. YTD, this segment reported a lower operating profit of RM286.5mn (-29.1% YoY). No dividend was declared for the quarter under review. Impact No change to our earnings forecasts. Outlook Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 1,179 1,325 1,193 1,268 99 104 Sell (Maintained) Financial Indicators Net debt/equity (%) CFPS (sen) P/CFPS (x) ROA (%) NTA/Share (RM) Price/ NTA (x) 5-year EPS CAGR (%) FY17 66.2 (1.2) nm 6.7 1.14 4.1 (10.8) FY18 58.2 0.4 >100 7.3 1.23 3.8 0.7 % of FY 72 71 Within Witihn IOI CORP 5.0 0.2 5.9 11.0 FBM KLCI 2.6 4.1 9.3 8.9 Scorecard Management expects higher FFB production growth in the coming quarter. Subsequently, CPO and PK prices are expected to be lower in vs TA vs Consensus 4QFY17 (July-Sep) due to increase in production. With that, the downstream is expected to perform better owing to increase in margin. Recently, global environmental activist group Greenpeace has suspended its campaign against IOI Group as a result of its progress on sustainability across its supply chain. Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth While we believe the market may look kindly on this news, the lifting of RSPO suspension may take some time to reflect in the earnings as some (12-Mth) Share Price relative to the FBM KLCI of IOI’s customers had already switched to more reliable RSPO-certified suppliers and may only go back to IOI when they see tangible improvement on the ground. Valuation Target price for IOI has been revised upward to RM4.15/share from RM3.93 previously as we roll forward our SOP valuation to CY18. The target price implies a CY18 PER of 19.8x. The stock remains as Sell on Source: Bloomberg valuation ground. Page 1 of 3
  19. TA Securities 17-May-17 A Member of the TA Group Figure 1 : Segmental profit breakdown* Plantation Resource Based Mfg Others Total 3QFY16 2QFY17 3QFY17 % QoQ % YoY 9MFY16 9MFY17 % YoY 122.2 119.7 1.5 243.4 339.6 165.3 3.6 508.5 199.8 13.4 1.9 215.1 (41.2) (91.9) (47.2) (57.7) 63.5 (88.8) 26.7 (11.6) 602.2 404.1 5.6 1,011.9 873.6 286.5 6.8 1,166.9 45.1 (29.1) 21.4 15.3 3QFY16 2QFY17 3QFY17 % QoQ % YoY 525,281 16.49 21.82 827,579 11.73 21.76 655,274 16.22 21.38 (20.8) - 24.7 - 2,173 1,584 2,614 2,745 2,753 2,875 5.3 4.7 26.7 81.5 * Before translation gain, associates & EI Source: Bursa announcement, TA Research Figure 2: Plantation statistics Quarterly FFB production (tonnes) Yield per ha * OER (%) * Average YTD selling price (RM):- * CPO Palm kernel *YTD figures Source: Bursa announcement, TA Research Figure 3: FFB Production Source: Bursa announcements, TA Research Earnings Summary FYE June 30 Revenue EBITDA EBITDA margin Pretax profit Net profit Core net profit EPS Core EPS Core EPS growth PER GDPS Div yield Core ROE (RM mn) (%) (sen) (sen) (%) (x) (sen) (%) (%) FY15 11,541.5 1,733.4 15.0 316.4 51.9 896.8 0.8 14.1 (27.9) 32.9 9.0 1.9 13.4 FY16 11,739.3 1,812.9 15.4 965.8 629.7 827.6 9.8 12.8 (9.0) 36.2 8.0 1.7 11.2 Page 2 of 3 FY17E 13,054.0 2,050.6 15.7 1,536.0 1,178.6 1,178.6 18.3 18.3 42.4 25.4 10.0 2.2 15.4 FY18F 14,200.3 2,175.9 15.3 1,717.6 1,324.9 1,324.9 20.5 20.5 12.4 22.6 12.0 2.6 16.2 FY19F 14,488.4 2,206.9 15.2 1,780.6 1,377.1 1,377.1 21.3 21.3 3.9 21.8 12.0 2.6 15.8
  20. TA Securities 17-May-17 A Member of the TA Group 3QFY17 Results Analysis FYE 30 June Turnover EBIT Net Int Inc / (exp) Forex EI Associates + JV Pretax Taxation MI Reported net profit Core net profit Core EPS GDPS (sen) (sen) EBIT Margin Pretax Margin Tax Rate (%) (%) (%) 3QFY16 2,866.0 246.9 (40.0) 432.8 175.4 2QFY17 3,665.7 517.2 (45.8) (330.0) (47.6) 3QFY17 3,472.7 242.2 (47.0) 91.2 50.2 QOQ% (5.3) (53.2) (2.6) nm nm YoY % 21.2 (1.9) (17.5) (78.9) (71.4) 9MFY16 8,921.2 1,004.7 (126.3) (193.8) 232.9 9MFY17 10,429.7 1,159.4 (137.1) (410.8) (8.1) YOY% 16.9 15.4 (8.6) >-100 nm 21.6 836.7 (104.7) (2.6) 729.4 121.2 35.0 128.8 (102.2) (11.0) 15.6 393.2 55.4 392.0 (86.6) (0.1) 305.3 163.9 58.3 >100 15.3 99.1 >100 (58.3) >100 (53.1) 17.3 96.2 (58.1) 35.2 72.8 990.3 (284.4) (17.2) 688.7 649.6 106.6 710.0 (276.4) (18.3) 425.7 844.6 46.4 (28.3) 2.8 (6.4) (38.2) 30.0 1.9 0.0 6.2 4.5 2.6 0.0 10.3 3.5 13.4 4.5 8.6 29.2 12.5 14.1 3.5 79.3 7.0 11.3 22.1 11.3 11.1 28.7 11.1 6.8 38.9 Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 3 of 3