Bursa Malaysia Daily Market Report - 18 July

Transcription

1. Tuesday , 18 July, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED REPORTS’ News 1. Daily Market Commentary 2. Daily Brief Fundamental Reports 1. Hartalega Holdings Berhad: Fundamentals Intact but Fairly Valued 2. Ibraco Berhad: Secured RM302.6mn Airport Job in Mukah Sarawak 3. IJM Corporation Berhad: Secures RM451mn Building Job from UOB Technical Reports 1. Daily Technical Stock Picks 2. Daily Stock Screen 3. Foreign Technical Stock Watch (AUS, HK & FSSTI) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research
2. Daily Note Daily Market Commentary (A Participating Organisation of Bursa Malaysia Securities Bhd) Menara TA One, 22 Jalan P Ramlee, 50250 Kuala Lumpur Tel : 603 - 2072 1277. Fax : 603 - 2032 5048 Tuesday, 18 July 2017 TA Research e-mail : taresearch@ta.com.my For Internal Circulation Only Review & Outlook KLSE Market Statistics (17.07.2017) Volume (mil) +/-chg (RMmn) Main Market 1,176.1 -92.2 1,535.8 Warrants 135.9 19.3 14.5 ACE Market 720.4 -258.6 163.8 Bond 10.6 -1.1 1.7 ETF 0.1 0.01 0.1 Total 2,043.0 1,715.9 Off Market 55.8 -30.2 199.0 Value +/-chg -160.1 3.1 -40.2 -0.4 0.02 119.4 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP July 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 1,755.19 12,502.84 17,195.98 1,760.00 21,629.72 6,314.43 7,404.13 20,118.86 2,425.10 26,470.58 3,298.24 1,574.09 5,841.28 3,176.47 1,800.54 5,755.47 Off Market BIMB SSTEEL SIME MEXTER CRESBLD BURSA OMESTI PANPAGE EDUSPEC SWSCAP TAWIN (mn) 18.2 8.2 7.0 5.0 3.0 2.5 2.0 1.9 1.6 1.1 1.0 (RM) @ 4.50 @ 1.57 @ 9.53 @ 0.26 @ 1.03 @ 10.20 @ 0.45 @ 0.30 @ 0.15 @ 1.00 @ 1.15 Exchange Rate USD/MYR 4.2851 -0.0080 USD/JPY 112.48 -0.7400 EUR/USD 1.146 0.0045 0.19 8.16 65.41 0.50 Value/ Volume 1.31 0.11 0.23 0.16 1.34 0.84 3.57 Up Down 280 329 72 72 58 37 5 3 2 0 417 441 % chg % YTD chg 0.01 0.07 0.38 0.03 6.91 9.04 16.86 7.61 -8.02 -0.04 1.97 0.03 25.74 0.35 0.00 0.00 10.47 0.43 81.35 0.31 10.81 0.33 -3.70 -0.23 9.48 0.16 -45.95 -1.43 -80.47 -4.28 -9.65 -0.17 Top 10 KLCI Movers Mkt Cap. Counter CIMB AXIATA MAXIS PETGAS DIGI MISC GENM IOICORP HLBANK KLK Mkt Cap. (RM’mn) 55,120 43,192 41,751 37,240 36,776 33,032 32,650 32,523 28,277 26,305 9.45 17.30 3.66 5.26 19.67 20.32 14.49 2.02 10.28 2.35 -8.56 1.58 Based on Chg (RM) 0.04 0.03 0.04 0.02 0.07 0.01 0.02 0.04 0.01 0.04 Vol. (mn) 3.55 4.23 5.30 1.20 8.35 0.78 1.79 0.26 1.37 0.32 Commodities Futures Palm Oil (RM/mt) 2,539.00 -14.00 Crude Oil ($/Barrel) 46.00 -0.68 Gold ($/tr.oz.) 1,233.20 5.20 Important Dates ORION - 7:2 Rights Issue - RI of up to 465.9m shares together with up to 232.9m free detachable warrants. 7 rights shares together every 2 existing shares held, at an issue price of RM0.17 per rights share, with 1 free warrant for every 2 rights shares subscribed. Application Closed: 19/07/2017. LISTING ON: 02/08/2017. Bursa Malaysia shares drifted lower Monday in line with the softer regional tone, in spite of China's stronger-than-expected 2Q GDP of 6.9% as investors were wary the Chinese government may further regulate the economy. The KLCI ended up 0.19 point at 1,755.19, off an early high of 1,759.52 and low of 1,752.78, as losers edged gainers 441 to 417 on moderate turnover of 2.04bn shares worth RM1.71bn. The local market may continue to consolidate with slight downward bias given the softer regional tone and lack of positive domestic catalysts to lift sentiment. The immediate support for the index from the 100-day moving average at 1,754 must hold to prevent slide to stronger support at 1,729, a key support level in April, while crucial uptrend support is from the 200-day moving average at 1,706. Immediate resistance stays at the 50day moving average now at 1,772, next 1,782, followed by the recent peak of 1,796. Any further selloff on Bina Puri shares towards the 25/5/16 low (36sen) will likely encourage buying to trigger rebound given the present oversold technical momentum, but upside appears restricted to the 23.6%FR (40sen) and 38.2%FR (42sen). Likewise, Hock Seng Lee may stage oversold rebound on a further selloff, with upside capped at RM1.65 and the 76.4%FR (RM1.70), while better support is anticipated near RM1.50. News Bites • • • • • • • • • • • • • • IJM Corporation Bhd secured a contract from UOB Properties (KL) Bhd worth RM451mn to build a new corporate office tower in Jalan Raja Laut. Ibraco Bhd has received a letter of acceptance from the Public Works Department, Kuching, Sarawak, to construct and complete a new airport in Mukah, Sarawak for RM302.6mn. Sunway Bhd's sub-subsidiary Sunway Treasury Sukuk Sdn Bhd has launched a RM10bn Islamic medium term note programme. Felda Global Venture Holdings Bhd has set up a domestic inquiry panel to facilitate a probe into 4 former board members. Trading in the shares of Prestariang Bhd will be suspended today at the company's request. Binasat Communications Bhd, which provides supporting services for satellite, mobile and fibre optic telecommunications networks, is seeking to list its shares on Bursa Malaysia's ACE Market. For the first half of the year, I-Bhd's net profit expanded 27.2% YoY to RM38.2mn on the back of a 38% YoY rise in revenue to RM230.7mn. DRB Hicom Bhd's unit has launched a high-technology automotive painting plant in an effort to strengthen its position as one of the region's top vehicle assembly centres. PRG Holdings Bhd has signed a strategic cooperation agreement with China's Jiangsu Provincial Construction Group Co, Ltd to jointly undertake infrastructure, property, and construction activities in Malaysia and internationally. Ikhmas Jaya Group Bhd plans to raise some RM33.8mn via private placement, to be used as general working capital, including payment to suppliers and sub-contractors. Stone Master Corp Bhd has withdrawn its lawsuit against its new board of directors and shareholders after the Kuala Lumpur High Court set aside an ex parte injunction to the group's extraordinary general meeting on June 14 this year. Pasdec Holdings Bhd has appointed Datuk Zuber Haji Shamsuri as its CEO effective today. Zuber was previously the group project director of Zenith Aim Group. China's economy grew 6.9% in the 2Q17, beating consensus forecast of 6.8%, as Beijing balances its growth objectives against the need to rein in excessive credit and an overheating property market. The New York Fed said its general business conditions index dropped to 9.8 in July from 19.8 in June, although a positive reading still indicates growth. 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 Tuesday , July 18, 2017 FBMKLCI: 1,755.19 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 Consolidate With Slight Downward Bias Bursa Malaysia shares drifted lower Monday in line with the softer regional tone, in spite of China’s stronger-than-expected 2Q GDP of 6.9% as investors were wary the Chinese government may further regulate the economy. The KLCI ended up 0.19 point at 1,755.19, off an early high of 1,759.52 and low of 1,752.78, as losers edged gainers 441 to 417 on moderate turnover of 2.04bn shares worth RM1.71bn. Break Below 1,754 to See Better Support at 1,729 The local market may continue to consolidate with slight downward bias given the softer regional tone and lack of positive domestic catalysts to lift sentiment. The immediate support for the index from the 100-day moving average at 1,754 must hold to prevent slide to stronger support at 1,729, a key support level in April, while crucial uptrend support is from the 200-day moving average at 1,706. Immediate resistance stays at the 50-day moving average now at 1,772, next 1,782, followed by the recent peak of 1,796. Bargain Bina Puri & Hock Seng Lee for Rebound Any further selloff on Bina Puri shares towards the 25/5/16 low (36sen) will likely encourage buying to trigger rebound given the present oversold technical momentum, but upside appears restricted to the 23.6%FR (40sen) and 38.2%FR (42sen). Likewise, Hock Seng Lee may stage oversold rebound on a further selloff, with upside capped at RM1.65 and the 76.4%FR (RM1.70), while better support is anticipated near RM1.50. Asian Markets Mixed Despite Stronger China Growth Asian stock markets traded mixed on Monday despite the release of better-than-expected China second-quarter GDP. China second-quarter GDP rose 6.9 percent on year, better than the 6.8 percent forecast by a Reuters poll. South Korea’s Kospi index rose 0.43 percent to 2,425.10 points, boosted by a gain for index heavyweight Samsung. In down under, the benchmark ASX200 ended lower by 0.17 percent to close at 5,755.47 after a session of sideways trade. Chinese stocks were hit by a plunge in small-cap stocks following a signal from a high-profile financial conference that Beijing is focused on tighter control of the economy. The blue-chip CSI300 index lost 1.07 percent to 3,663.56 points, while the Shanghai Composite Index fell 1.42 percent to 3,176.50 points. Japan markets were closed for Marine Day. Wall Street Flat as Investors Await Earnings Deluge U.S stocks closed little changed in low volume on Monday as investors geared up for a slew of earnings reports later this week. Goldman Sachs, Bank of America, Microsoft, Qualcomm and eBay are just a few of the companies scheduled to release quarterly results this week. Consumer-discretionary shares posted some of the biggest moves in an otherwise listless market, as investors snapped up beaten-down shares in brick-and-mortar retailers. Macy’s rose 3.1% and Kohl’s added 2.7%. Shares of Netflix soared more than 8% after the bell, following better than expected subscriber growth. Meanwhile, BlackRock shares fell 3.1 percent after the world's biggest asset manager's quarterly profit came in below expectations. Page 1 of 7
4. TA Securities 18-Jul-17 A Member of the TA Group The S &P health sector fell 0.3 percent while utilities gained 0.4 percent. Health stocks was partly weighed down by a delay in the U.S Senate's consideration of healthcare legislation after news over the weekend that Arizona Republican Senator John McCain would remain in his home state next week following a medical procedure. The Dow Jones Industrial Average fell 8.02 points, or 0.04 percent, to 21,629.72, the S&P 500 lost 0.13 points to 2,459.14 and the Nasdaq Composite gained 1.97 points, or 0.03 percent, to 6,314.43. Page 2 of 7
5. TA Securities 18-Jul-17 A Member of the TA Group News In Brief Corporate IJM Corporation Bhd secured a contract from UOB Properties (KL) Bhd worth RM451mn to build a new corporate office tower in Jalan Raja Laut. The construction will commence in August 2017 and it is expected to be completed in 40 months. (Bursa Malaysia/ Bernama) Ibraco Bhd has received a letter of acceptance from the Public Works Department, Kuching, Sarawak, to construct and complete a new airport in Mukah, Sarawak for RM302.6mn.The project would commence upon site possession and be completed within 36 months from the date of commencement. (Bursa Malaysia/ Bernama) Sunway Bhd’s sub-subsidiary Sunway Treasury Sukuk Sdn Bhd has launched a RM10bn Islamic medium term note (IMTN) programme. The programme will have a tenure of up to 100 years, which allows Sunway Treasury Sukuk to issue different tranches of IMTNs from time to time that may be unsecured or secured with different pools of assets/securities during the tenure. (Bursa Malaysia/ The Star) Felda Global Venture Holdings (FGV) Bhd has set up a domestic inquiry panel to facilitate a probe into 4 former board members. The internal investigation would be conducted on suspended FGV President and Group Chief Executive Officer Datuk Zakaria Arshad, Group Chief Financial Officer Ahmad Tifli Mohd Talha and 2 other senior management members. (Bernama) Trading in the shares of Prestariang Bhd will be suspended tomorrow at the company's request. It made the request pending the release of a material announcement. (Bursa Malaysia/ The Edge) LBS Bina Group's unit, ML Global Bhd (MGB), has formed a JV entity through a partnership with Sany Construction Industry Development (M) Sdn Bhd (Sany (M), a subsidiary of Sany Group Co. Ltd. The JV entity allows MGB and Sany (M) to have a 51% and 49% stake respectively, in the entity which will set up a precast concrete panel manufacturing plant in the central region of Malaysia within the next 6 months. (Bursa Malaysia/ New Straits Times) For the first half of the year, I-Bhd's net profit expanded 27.2% from RM30.0mn to RM38.2mn on the back of a 38% rise in revenue from RM167.1mn to RM230.7mn. I-Bhd 's unbilled sales stood at RM334.7mn as at 30 June 2017 against RM447.9mn as at March 31, 2017. (Bursa Malaysia/ The Sun) DRB Hicom Bhd's unit, Hicom Automotive Manufacturers (Malaysia) Sdn Bhd (HA), has launched a high-technology automotive painting plant in an effort to strengthen its position as one of the region's top vehicle assembly centres. Equipped with the latest robotic painting technology from Germany, construction of the RM230mn plant on a 3 ha site began in January 2016 and completed in June this year. (Bernama) PRG Holdings Bhd has signed a strategic cooperation agreement with China's Jiangsu Provincial Construction Group Co, Ltd (JPC) to jointly undertake infrastructure, property, and construction activities in Malaysia and internationally. PRG will source for infrastructure, construction, project financing, and property development projects while JPC will invest, finance and is responsible to perform, build, complete, and comply with the terms and conditions of the projects/contracts procured by the former. (Bursa Malaysia/ Bernama) Page 3 of 7
6. TA Securities 18-Jul-17 A Member of the TA Group Ikhmas Jaya Group Bhd plans to raise some RM33 .8mn via private placement, to be used as general working capital, including payment to suppliers and sub-contractors. The private placement will involve the issuance of up to 52mn new shares — equivalent to 10% of its share capital — to identified investors at an issue price to be fixed later. (Bursa Malaysia/ The Edge) Stone Master Corp Bhd has withdrawn its lawsuit against its new board of directors and shareholders after the Kuala Lumpur High Court set aside an ex parte injunction to the group’s extraordinary general meeting on June 14 this year. It filed a notice of discontinuance last Thursday for the withdrawal of the legal suit with no order as to costs. (Bursa Malaysia/ The Edge) Pasdec Holdings Bhd has appointed Datuk Zuber Haji Shamsuri as its CEO effective today. Zuber was previously the group project director of Zenith Aim Group, an investment holding company involved in earthworks, property development, and construction. (Bursa Malaysia/ The Edge) Binasat Communications Bhd, which provides supporting services for satellite, mobile and fibre optic telecommunications networks, is seeking to list its shares on Bursa Malaysia's ACE Market. The proceeds from the IPO would be used to set up a teleport, enhancing its operations and maintenance services capability, improving its fibre optic network installation and commissioning service capability. (The Edge) Page 4 of 7
7. TA Securities 18-Jul-17 A Member of the TA Group News In Brief Economy Asia China Maintains 6 .9% Economic Growth, Beating Expectations China’s economy steamed along in the second quarter, beating forecasts and matching the 6.9% expansion in the first, as Beijing balances its growth objectives against the need to rein in excessive credit and an overheating property market. That there was no deceleration in growth is a powerful signal that Beijing will be able to maintain stability in the world’s second-largest economy ahead of a leadership shuffle this year. However, economists said rising financing costs and some cooling in the property market are expected to weigh down growth in the year’s second half. China’s growth data released by the National Bureau of Statistics came in above a forecast for 6.8% growth by economists polled by The Wall Street Journal. On a quarter-over-quarter, seasonally adjusted basis, gross domestic product expanded 1.7%, the bureau said, compared with growth of 1.3% in the first quarter, suggesting that momentum in the economy may be even stronger than the year-over-year figure indicates. At a high-level financial conference this past weekend, President Xi Jinping made clear that the regulatory tightening would continue apace. Robust overseas shipments, reflecting renewed strength in the global economy, and solid consumption at home helped offset a slowdown in investment. The latest result leaves little doubt that China will meet its annual growth target of “about 6.5%,” though economists said they expect some deceleration during the rest of the year. The latest monthly industrial production and retail sales figures, also released, largely tallied with the GDP data. Industrial output rose 7.6% in June from a year earlier, coming in above both May’s 6.5% gain and market expectations. Retail sales grew by 11.0% in June from a year earlier, accelerating from the previous month’s 10.7% and also beating forecasts. Fixed-asset investment in non-rural areas of China climbed 8.6% year over year in the first six months of 2017, matching the increase in the January-May period but exceeding economists’ expectations. (The Wall Street Journal) Singapore Non-Oil Exports Rebound in June, Beating Forecasts with 8.2% Rise Non-oil domestic exports (NODX) bounced back in June, topping expectations with an 8.2% increase from the year earlier, with a strong rise in non-electronic shipments offsetting a smaller increase in electronic sales. Analysts polled by Bloomberg had expected NODX to rise 5.1% in June from the same month a year ago. Exports in May edged up just 0.4% in May, revised up from an earlier estimate of a 1.2% decline, and dipped 0.3% in April, after expanding for six straight months. On a month-on-month seasonally adjusted basis, NODX declined by 2.7% in June, after the previous month's 9.4% increase, as the decline in electronic shipments outweighed the increase in non-electronic sales, data from trade agency International Enterprise (IE) Singapore showed. Some S$14.5 billion exports were recorded in June, lower than the S$14.9 billion in May. Exports of electronics cooled in June, expanding by 5.4% year-on-year compared to the 28.9% surge in May. Last week data showed that Singapore narrowly avoided a technical recession, growing at 0.4% in the second quarter from the quarter before, saved by solid global demand for its tech products. (The Straits Times) Indonesia Exports, Imports Contract in June Indonesia's exports and imports contracted in June on a yearly basis for the first time in nine months and officials from the statistics bureau blamed seasonal factors. Eid al-Fitr holidays and restrictions for trucks on toll roads were the reasons for the contraction, said Suhariyanto, the head of the statistics bureau. Indonesia's exports in June fell 11.82% to US$11.64 billion on an annual basis, the first contraction since September 2016, data from the bureau showed. Meanwhile, June imports declined 17.21% from last year to US$10.01 billion, compared with the 8.87% expansion rate. Despite the contraction, Indonesia still posted a trade surplus in June. In the first six months of 2017, trade surplus was US$7.63 billion, the biggest first semester trade surplus since 2012. (The Edge Market) Page 5 of 7
8. TA Securities 18-Jul-17 A Member of the TA Group United States New York Manufacturing Index Falls More than Expected Activity in the New York manufacturing sector grew at a notably slower pace in the month of July , according to a report released by the Federal Reserve Bank of New York on Monday. The New York Fed said its general business conditions index dropped to 9.8 in July from 19.8 in June, although a positive reading still indicates growth. Economists had expected the index to fall to 15.0 (RTT News) Europe and United Kingdom Eurozone Inflation Softens to 1.3% ahead of July ECB Meeting Inflation in the Eurozone slipped back in June, official data confirmed today, as investors get ready to scrutinize comments from ECB president Mario Draghi on the central bank’s stimulus measures later this week. Annual consumer prices in the Eurozone rose 1.3% in June, according to a second reading from Eurostat which came in line with an initial estimate. Inflation fell back from 1.4% in May having spiked at a three-year high of 1.9% in April. Core inflation, which strips out volatile components and is seen as a more reliable gauge of inflationary pressures, rose from 0.9% to 1.1% in June. Policymakers at the European Central Bank are due to make their latest decision on interest rates and QE on Thursday. It will be the first time Mr Draghi will be addressing journalists following bullish remarks on the state of the Eurozone’s recovery last month, which drove the euro to a seven-month high and sparked a “mini taper tantrum” in the bond market. (Financial Times) UK House Prices Stabilize, but Buyers Still Wary: Rightmove Asking prices for houses and apartments in England and Wales stabilized after a drop in June, but home-buyers remain cautious as wage growth falls behind inflation, a survey by property website Rightmove showed. The figures were based on property advertised between June 11 and July 8, covering the weeks after Prime Minister Theresa May unexpectedly lost her majority in parliament, creating uncertainty for investors who were already on edge about Britain's exit from the European Union. Rightmove said average asking prices for property sold on its website increased by a monthly 0.1% in July, a month that usually sees slight falls in prices. In annual terms, prices were up 2.8% compared with a 1.8% rise in June. Other house price measures have shown a slowdown in growth this year, mirroring a weakening of the economy as consumers feel the pinch of rising inflation. (Reuters) Germany Manufacturing Employment Rises in May Germany's manufacturing employment increased in May from a year ago, data from Destatis showed. The number of people worked in local manufacturing units rose by around 78,000 or 1.4% from prior year in May. At the end of May, there were 5.5 million employed persons in local manufacturing units. The number of hours worked in May climbed 10.7% from a year earlier, reaching 721 million. The earnings totaled EUR 24.7 billion, which was 3.1% more than in May 2016. (RTT News) Page 6 of 7
9. TA Securities 18-Jul-17 A Member of the TA Group Share Buy-Back : 17 July 2017 Company Bought Back Price (RM) Hi/Lo (RM) 30,000 15,000 50,000 10,000 150,000 0.45 2.21/2.20 0.60 0.23 0.525/0.52 0.46/0.435 2.21/2.20 0.605/0.595 0.23/0.225 0.525/0.515 BSLCORP DAIBOCI GLBHD GRANFLO SALCON Total Treasury Shares 1,359,113 15,000 7,639,800 6,487,600 1,917,762 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 7 of 7 We accept no We, our associates, directors, employees may have an interest in
10. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR UMW Share Price (RM) 17-Jul-17 1.94 2.20 5.68 Target Price BETA (RM) EPS (sen) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 2.37 2.28 5.04 0.94 0.61 1.26 10.3 24.1 19.8 15.8 25.3 30.6 18.8 9.1 28.7 12.3 8.7 18.5 6.0 4.1 2.3 8.1 4.1 3.5 2.44 2.70 6.47 -20.5 -18.5 -12.2 1.88 2.08 4.09 3.2 5.8 38.8 -8.9 2.8 34.5 4.80 3.70 5.70 8.00 17.50 11.00 23.60 5.80 10.00 1.28 0.96 1.32 1.38 0.67 0.96 0.79 1.32 0.70 33.6 29.4 43.9 49.6 105.2 73.4 137.2 50.7 40.3 30.5 33.6 48.4 55.2 115.5 82.9 142.4 54.5 39.0 11.5 8.9 11.6 12.6 15.1 13.1 14.8 10.0 25.3 12.7 7.8 10.5 11.4 13.8 11.6 14.3 9.3 26.1 4.1 3.1 3.5 3.2 2.6 5.2 2.8 2.4 3.3 4.1 3.1 3.5 3.6 2.6 5.2 2.8 2.4 3.3 4.49 3.00 5.70 6.87 16.30 9.68 20.66 5.59 11.14 -13.8 -12.7 -10.5 -8.6 -2.5 -0.7 -1.5 -9.5 -8.6 3.60 2.08 3.90 4.11 12.70 7.50 19.26 4.53 8.20 7.5 26.0 30.8 52.7 25.2 28.1 5.7 11.7 24.1 4.0 9.6 18.3 39.2 17.8 17.2 3.2 7.4 15.0 0.39 1.30 5.38 3.47 0.65 1.11 2.01 1.87 5.89 0.45 1.57 6.00 3.50 0.78 0.58 2.26 1.49 6.26 0.80 0.64 1.05 1.08 1.01 1.28 na 1.10 0.10 5.6 14.6 28.1 15.3 4.9 8.3 12.6 11.9 42.0 5.6 13.5 34.8 20.3 5.7 9.6 12.5 12.0 45.8 6.8 8.9 19.2 22.6 13.1 13.4 15.9 15.7 14.0 6.9 9.6 15.4 17.1 11.4 11.5 16.0 15.6 12.9 0.0 2.2 2.2 2.2 3.8 0.9 2.7 1.6 4.2 0.0 2.2 2.2 2.7 3.8 0.9 2.7 1.6 4.2 0.51 1.37 5.52 3.61 0.74 1.39 2.15 2.48 6.15 -24.5 -5.1 -2.5 -3.9 -11.6 -20.1 -6.5 -24.4 -4.2 0.38 0.89 4.65 3.07 0.37 0.41 1.56 1.49 5.57 2.7 46.9 15.7 13.0 78.1 174.1 28.8 25.4 5.7 -11.5 23.8 12.6 8.4 7.4 93.0 18.2 8.7 0.2 1.97 2.00 0.49 11.0 11.5 17.9 17.1 5.1 5.1 2.19 -10.0 1.93 2.1 -2.0 15.08 17.94 17.84 21.08 0.50 0.59 74.8 93.1 81.3 20.2 101.9 19.3 18.5 17.6 4.9 4.7 5.4 5.1 15.30 19.10 -1.4 -6.1 13.72 15.56 9.9 15.3 8.3 9.5 2.22 7.32 25.24 1.21 84.00 3.62 1.93 4.91 0.90 2.23 8.62 27.41 1.50 88.66 4.10 2.46 4.41 1.23 0.49 0.35 0.32 0.47 0.36 0.48 0.65 0.43 0.57 6.7 26.4 121.1 6.5 290.1 22.3 27.5 15.7 8.1 7.9 40.6 151.0 6.6 327.7 24.7 27.0 16.6 11.6 33.0 27.7 20.8 18.6 29.0 16.2 7.0 31.3 11.0 28.2 18.0 16.7 18.3 25.6 14.7 7.1 29.5 7.7 1.8 1.4 2.8 5.0 3.3 4.1 3.1 0.9 2.8 2.1 2.0 3.0 5.0 3.3 4.7 4.1 1.0 3.9 3.00 8.89 26.52 1.33 85.20 3.66 2.04 5.00 1.07 -26.0 -17.7 -4.8 -8.9 -1.4 -1.1 -5.4 -1.8 -16.4 2.11 7.30 22.44 1.13 74.12 2.26 1.47 4.14 0.78 5.2 0.3 12.5 7.0 13.3 60.1 31.3 18.5 14.7 -13.6 -0.1 7.5 5.1 7.4 42.6 11.6 13.4 12.6 43.58 52.08 1.01 198.6 187.4 21.9 23.2 4.6 4.6 55.46 -21.4 40.61 7.3 -1.3 9.54 5.76 11.51 6.54 1.35 1.29 49.3 25.7 54.7 27.7 19.3 22.4 17.4 20.8 0.5 1.4 0.6 1.6 10.00 6.38 -4.6 -9.7 7.50 4.22 27.2 36.4 20.1 27.5 2.41 0.12 3.34 0.13 0.75 1.26 19.3 0.4 23.2 0.4 12.5 33.1 10.4 33.3 5.8 0.0 6.6 0.0 3.42 0.16 -29.5 -25.0 2.38 0.05 1.3 140.0 -18.6 140.0 5.92 4.23 6.39 4.70 0.77 0.51 9.5 13.3 15.0 16.5 62.0 31.7 39.6 25.7 0.6 1.5 0.6 1.8 6.73 4.37 -12.0 -3.2 5.54 3.85 6.9 9.9 -6.8 1.2 6.87 7.05 1.92 5.67 1.55 6.85 7.60 1.80 6.05 2.20 0.57 0.16 0.34 -0.19 0.30 19.5 35.8 12.3 26.4 3.7 24.6 40.0 15.1 29.8 5.5 35.3 19.7 15.6 21.4 41.6 28.0 17.6 12.7 19.0 28.2 1.2 2.5 1.9 2.3 0.6 1.6 2.8 2.3 2.6 0.9 7.40 7.15 2.38 5.94 2.64 -7.2 -1.4 -19.3 -4.5 -41.3 4.06 5.62 1.88 4.20 1.51 69.2 25.4 2.1 35.0 2.6 42.2 7.0 -9.0 6.0 -34.3 INDUSTRIAL SCIENTX SKPRES 8.65 1.31 9.71 1.80 0.52 0.50 54.5 8.6 66.3 10.6 15.9 15.3 13.0 12.3 2.1 3.2 2.3 4.0 8.99 1.44 -3.8 -9.0 6.01 1.15 43.9 13.9 29.1 1.6 MEDIA ASTRO MEDIA PRIMA STAR 2.53 0.90 2.36 3.45 0.60 1.40 1.05 0.65 0.64 13.2 1.7 7.1 14.5 2.8 6.5 19.1 52.4 33.3 17.5 31.7 36.4 4.9 1.5 7.6 5.1 2.5 7.6 3.01 1.52 2.67 -15.9 -41.1 -11.6 2.51 0.87 2.19 0.8 3.5 7.8 -2.7 -22.2 5.4 -15.2 -2.0 -32.8 -6.3 -9.8 -11.7 -24.3 -64.4 0.20 6.33 0.77 7.03 0.44 6.43 1.33 0.29 200.0 1.1 1.3 5.3 37.9 7.2 19.5 29.8 129.4 -1.5 -14.8 0.7 34.8 -1.3 -1.9 -57.7 -24.2 1.30 15.4 -11.8 BANKS & FINANCIAL SERVICES AFG 3.87 AFFIN 2.62 AMBANK 5.10 CIMB 6.28 HLBANK 15.90 MAYBANK 9.61 PBBANK 20.36 5.06 RHBBANK BURSA 10.18 CONSTRUCTION BPURI GADANG GAMUDA IJM PESONA SENDAI SUNCON WCT LITRAK Building Materials WTHORSE CONSUMER Brewery CARLSBG HEIM Retail AEON AMWAY F&N HUPSENG NESTLE PADINI POHUAT QL SIGN Tobacco BAT GAMING Casino GENTING GENM NFO BJTOTO LUSTER HEALTHCARE Hospitals IHH KPJ Rubber Gloves HARTA KOSSAN SUPERMX TOPGLOV KAREX OIL & GAS DNEX 0.59 0.76 1.03 3.7 4.6 16.0 12.8 1.7 1.7 0.69 LCTITAN 6.40 7.41 na 60.3 71.5 10.6 9.0 4.1 5.5 6.53 MHB 0.78 0.87 1.83 -1.2 1.3 na 59.5 0.0 0.0 1.16 MISC 7.40 6.85 0.79 56.4 48.9 13.1 15.1 4.1 4.1 7.90 PANTECH 0.60 0.69 1.27 4.1 4.9 14.5 12.2 3.0 3.2 0.67 PCHEM 6.89 7.74 1.06 39.2 40.5 17.6 17.0 3.0 3.2 7.80 SENERGY 1.59 1.71 2.49 6.6 4.0 24.1 40.1 0.6 0.6 2.10 UMWOG 0.37 0.80 2.09 -11.7 -3.5 na na 0.0 0.0 1.04 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.50 1.55 1.48 12.0 12.6 12.5 11.9 0.0 0.0 1.98
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price (RM) PLANTATIONS FGV IJMPLNT IOICORP KLK SIME UMCCA 1.58 2.97 4.50 24.70 9.53 6.53 Target Price BETA (RM) 1.55 3.88 4.15 26.19 10.02 7.52 1.78 0.47 1.07 0.86 1.23 0.43 EPS (sen) PER (X) FY17 FY18 FY17 FY18 4.2 12.3 18.7 111.8 34.0 37.6 8.5 15.7 21.0 119.1 37.5 34.5 37.5 24.2 24.1 22.1 28.0 17.4 18.6 18.9 21.4 20.7 25.4 19.0 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg 3.2 2.4 2.2 2.2 2.6 3.5 3.2 2.7 2.7 2.4 3.3 2.6 2.52 3.70 4.81 25.50 9.70 6.58 -37.3 -19.7 -6.4 -3.1 -1.8 -0.8 1.42 2.96 4.21 22.92 7.42 5.53 PROPERTY GLOMAC 0.63 0.70 0.56 1.6 6.3 39.5 10.0 4.8 4.8 0.83 -23.6 0.63 HUAYANG 0.92 0.96 0.67 17.3 10.2 5.3 9.0 4.3 2.2 1.43 -35.8 0.92 IBRACO 0.88 1.00 0.37 5.2 11.1 16.8 7.9 4.0 4.5 1.05 -16.2 0.76 IOIPG 2.17 2.25 0.86 17.4 17.4 12.5 12.4 3.2 3.5 2.46 -11.8 1.85 MAHSING 1.58 1.76 0.73 14.3 13.5 11.0 11.7 4.1 4.1 1.70 -7.1 1.34 SNTORIA 0.85 0.98 0.27 6.2 10.3 13.8 8.2 1.2 1.2 1.00 -15.0 0.69 SPB 4.90 5.98 0.59 25.6 22.8 12.7 14.3 2.4 2.4 5.19 -5.6 4.32 SPSETIA 3.26 4.10 0.68 27.1 29.5 15.0 13.8 4.3 4.3 4.50 -27.6 2.90 SUNWAY 4.06 4.15 0.48 18.3 18.4 13.2 13.1 3.0 3.0 4.08 -0.5 2.84 Note: SUNWAY proposed bonus issue of shares and warrants. Ex-Target price RM1.69. For more details please refer to 15.06.17 report. REIT SUNREIT 1.70 1.86 0.51 8.9 10.1 19.2 16.8 5.2 5.9 1.84 -7.6 1.63 CMMT 1.56 1.72 0.59 8.1 8.6 19.3 18.1 5.4 5.7 1.72 -9.3 1.45 % Chg YTD 11.3 0.3 6.9 7.8 28.4 18.1 1.9 -12.6 2.3 2.9 17.7 8.8 0.8 0.0 16.6 17.5 17.9 23.2 13.4 12.4 42.9 -9.4 -18.6 -12.0 11.3 10.5 6.2 10.8 4.2 35.3 4.3 7.6 -1.2 2.0 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.07 23.68 18.82 14.18 1.41 1.13 21.47 19.60 17.37 1.90 0.76 0.76 0.77 1.02 0.53 7.1 98.4 88.2 131.9 8.2 6.4 102.3 101.3 130.8 10.7 15.0 24.1 21.3 10.7 17.1 16.7 23.2 18.6 10.8 13.2 6.5 3.1 3.3 3.1 7.1 6.5 3.2 3.8 3.2 7.1 1.80 25.70 22.50 14.90 1.64 -40.6 -7.9 -16.4 -4.8 -14.0 1.01 22.92 18.10 13.00 1.39 5.9 3.3 4.0 9.1 1.4 -21.9 -0.5 -11.6 2.0 -5.4 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 4.64 4.73 5.53 6.41 5.25 4.90 5.70 7.50 1.31 0.93 0.71 0.66 14.6 20.0 24.8 21.4 16.0 20.4 25.0 22.3 31.8 23.6 22.3 29.9 29.0 23.2 22.1 28.7 1.6 4.2 3.6 3.0 1.7 4.3 3.6 3.1 5.99 5.19 6.60 6.90 -22.5 -8.9 -16.2 -7.1 4.11 4.63 5.48 5.81 12.9 2.2 0.9 10.3 -1.7 -2.1 -7.5 7.7 TECHNOLOGY Semiconductor & Electronics IRIS 0.17 INARI 2.39 MPI 13.54 UNISEM 3.58 0.28 2.30 15.60 3.95 1.34 0.79 0.51 0.82 -2.6 10.3 94.2 26.9 -0.3 na 12.4 23.2 112.9 14.4 27.1 13.3 na 19.3 12.0 13.2 0.0 3.3 2.0 3.4 0.0 2.0 2.0 3.4 0.24 2.43 13.58 3.70 -29.2 -1.6 -0.3 -3.2 0.10 1.47 7.20 2.27 70.0 62.4 88.1 57.7 54.5 44.0 82.7 51.7 3.15 8.79 3.34 8.10 1.12 1.44 37.6 17.2 37.1 17.5 8.4 51.0 8.5 50.3 1.3 1.1 1.6 1.1 3.59 9.45 -12.3 -7.0 2.16 5.76 45.8 52.6 37.6 45.0 1.73 3.71 2.05 4.05 0.75 0.67 14.3 17.1 22.7 15.1 12.1 21.6 7.6 24.5 2.5 3.5 4.0 3.1 1.87 4.59 -7.5 -19.2 1.47 3.61 17.7 2.8 8.8 -13.7 TRANSPORTATION Airlines AIRASIA AIRPORT Freight & Tankers TNLOGIS WPRTS SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price (S$) BANKS & FINANCIAL SERVICES DBS 21.44 OCBC 11.09 UOB 24.00 PLANTATIONS WILMAR IFAR 3.31 0.48 Target Price Beta (S$) EPS (cent) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52week 52week FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 23.30 12.00 25.40 1.22 1.14 1.09 173.8 87.7 195.6 190.2 12.3 92.4 12.6 209.3 12.3 11.3 12.0 11.5 2.8 5.7 2.9 2.8 6.7 2.9 21.5 11.1 24.0 -0.2 0.0 -0.2 14.72 8.84 17.51 45.7 34.1 37.1 23.6 24.3 17.6 3.72 0.53 0.91 1.12 28.9 4.9 31.1 5.2 10.6 9.2 2.4 2.5 2.7 2.7 4.0 0.6 -17.3 -19.3 2.96 0.44 11.8 9.1 -7.8 -8.6 11.4 9.9 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
12. COMPANY UPDATE TA Securities Tuesday , July 18, 2017 FBM KLCI: 1,755.19 Sector: Healthcare A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 l Hartalega Holdings Berhad TP: RM6.85 (-0.2%) Fundamentals Intact but Fairly Valued Last traded: RM6.87 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* SELL Wilson Loo Tel: 603-2167 9606 wilsonloo@ta.com.my We recently visited Hartalega’s management at the group’s maiden plant in Bestari Jaya. Key takeaways include: 1) expectation for robust capacitydriven growth intact with healthy growth in demand for the group’s rubber gloves, 2) capacity expansion projects sailing smoothly with slight expedition to latest plants, 3) moderated price competition which we believe should enable the group to sustain the recent recovery of its PBT margins in the 20-25% range for the foreseeable term, and 4) there is still room for efficiency improvements at Bestari Jaya’s earlier plants. Upon performing housekeeping to our ASP and capacity assumptions, our FY17/FY18 earnings estimates are revised by +0.5%/+1.1% to RM403.6mn/RM470.3mn and we arrive at a slightly higher TP of RM6.85/share (previously RM6.80/share) based on an unchanged PE multiple of 25.0x against CY18 EPS. Notwithstanding the group’s sound fundamentals and our expectations for solid earnings growth in the nearto-medium term (FY18/FY19/FY20: +26.0%/+16.5%/+15.7%.), we are reiterating our recent downgrade on the stock to Sell as we opine that the stock is fairly valued at current levels having priced in near term drivers. Expectation for Robust Capacity-Driven Growth Intact Our expectation for Hartalega to deliver robust capacity-driven growth is intact with management alluding that the group continues to experience healthy growth in demand for its rubber gloves. In fact, to meet the growing demand, we note that commissioning of tail-end production lines at the group’s latest plant, Plant 3, at the Next Generation Integrated Glove Manufacturing Complex (NGC) in Sepang was expedited. During 1QFY18, the remaining four production lines at Plant 3 were commissioned, enlarging total installed capacity by 6.7% to 25.2bn gloves per annum. And indicative of near-term earnings visibility, we understand that the group’s capacity is sold out until October 2017 and plant utilisation rates are hovering close to 90%. Management attributes the robust growth in demand not just to its existing markets and opportunities from untapped markets but also to the group’s quality products, competitive pricing, and ability to deliver. Expansion at the NGC Sailing Smoothly With Plant 3 at the NGC just fully commissioned, the group is now ready to proceed with the commissioning of Plant 4. Commissioning of Plant 4 is targeted to commence shortly in August 2017, earlier than was previously guided (October 2017), due to the shortfall in the group’s current capacity to meet growing orders. Plant 4’s pace of commissioning remains unchanged at 1 production line per month but management does not discount the possibility for commissioning to be expedited or prolonged in the event of an imbalance in the sector’s supply and demand dynamics. Meanwhile, looking further ahead, we note that management is currently deliberating the commencement of groundworks for Plant 5 which is targeted for commissioning during 20192020. All in, we project the group’s capacity to grow at a CAGR of 17.3% over FY18-FY20 and estimate FY18/FY19/FY20’s core net profit growing by 26.0%/16.5%/15.7%. Page 1 of 5 s www.taonline.com.my Share Information Bloomberg Code HART MK Stock Code 5168 Listing Main Market Share Cap (mn) 1,645.1 Market Cap (RMmn) 11,301.8 Par Value 0.50 52-wk Hi/Lo (RM) 7.40/4.06 12-mth Avg Daily Vol ('000 shrs) 1,039.4 Estimated Free Float (%) 30.2 Beta 0.6 Major Shareholders (%) Hartalega Industries Sdn Bhd - 49.2 EPF - 7.3 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 0.5 1.1 403.6 470.3 375.6 418.3 107.4 112.4 Sell (Maintained) Financial Indicators Net gearing (x) CFPS (sen) P/CFPS (x) ROAA (%) ROAE (%) NTA/Share (RM) Price/ NTA (x) FY18 0.2 23.3 29.4 16.5 22.5 1.1 6.0 FY19 0.1 30.4 22.6 16.9 23.1 1.3 5.3 Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth HART 0.9 38.8 50.3 59.8 FBM KLCI (2.0) 0.8 5.4 5.0 (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg
13. TA Securities 18-Jul-17 A Member of the TA Group Table 1 : Expansion Progress at the NGC, Sepang Phase Plant Phase 1 Plant 1 Plant 2 Plant 3 Plant 4 Plant 5 Plant 6 6 Plants Phase 2 Phase 3 Total Capacity (gloves p.a.) 4.75bn 4.75bn 4.75bn 4.75bn 4.75bn 4.75bn 28.5bn No. of Lines 12 12 12 12 12 12 72 No. of Lines Commissioned 12 12 12 36 Commissioning Timeline Jan. 2015 – Mar. 2016 Jan. 2015 – Mar. 2016 Oct. 2016 – Jun. 2017 Aug. 2017 – Jul. 2018 2019-2020 2019-2020 2015-2020 Source: Companies, TA Securities More Sustainable Margins with Moderated Price Competition Supportive for the group’s rosy growth outlook, we understand from management that price competition of late has somewhat moderated. Coupled with monthly reviews of selling prices, the group has been better able to pass through fluctuations in costs and savings to customers. In view of this, we believe that the group should be able to sustain the recent recovery of its PBT margins in the 20-25% range for the foreseeable term (see Figure 1). Management guided that average selling prices (ASPs) in 1QFY18 were relatively stable with the offsetting of the weakening of the USD against the Ringgit and descend in raw material prices (natural latex & synthetic latex). However, lately with the steady USD/Ringgit and continued descend in raw material prices coupled with the entry into new price-sensitive emerging markets, we note that ASPs are expected to soften. Natural Latex (LHS) Core PBT margins (RHS) 5.00 5% 4.00 0 0% USD/Ringgit (RHS) 8.00 Source: Bloomberg, Companies, TA Securities Room for Improvements at Maiden Plants in Bestari Jaya To date, the group’s maiden plants in Bestari Jaya are still a key contributor to the group. Management guided that the contribution split between Bestari Jaya and NGC is ~50:50. And highlighting the latest key differences between both plants, we note that the NGC is ~40% more productive with average production line speed of 45k pieces of gloves/hour versus Bestari Jaya’s of 32k pieces of gloves/hour and in terms of manual labour dependency, the NGC requires ~40% less labour due to the higher level of automation. Nonetheless, as reflected in the group’s above sector average margins (1QCY17 core PBT margin – Hartalega: 22.0% versus peer average: 10.5%) even prior to the commissioning of the NGC in 2015, we believe that the productivity and efficiency of Bestari Jaya plants are still a leap above that of most peers. Besides, positively for the medium-to-longer term, we understand from management that there is still room for efficiency improvements at some of Bestari Jaya’s plants especially in the area of packaging, which is rather labour dependent. For instance, at Bestari Jaya’s Plant 2, which is one of the group’s very first plants, glove stripping is still done manually and packaging is done offline. Page 2 of 5 Jun-17 Apr-17 1QFY18 May-17 Mar-17 Jan-17 4QFY17 Feb-17 Dec-16 Oct-16 3QFY17 Nov-16 Sep-16 2QFY17 Jul-16 Jun-16 Apr-16 1QFY17 May-16 4QFY16 3.00 Jan-16 4QFY17 10% 100 3QFY17 200 2QFY17 6.00 1QFY17 15% 4QFY16 300 3QFY16 7.00 2QFY16 20% 1QFY16 400 4QFY15 25% 3QFY15 500 2QFY15 30% 1QFY15 RM mn' 600 Source: Companies, TA Securities Synthetic Latex (LHS) RM/kg 9.00 Mar-16 Core PBT (LHS) Feb-16 Revenue (LHS) Figure 2: USD/Ringgit & Raw Material Prices Aug-16 Figure 1: Hartalega’s Quarterly Financial Performance 4.50 4.40 4.30 4.20 4.10 4.00 3.90 3.80 3.70 3.60 3.50
14. TA Securities 18-Jul-17 A Member of the TA Group Figure 3 : Labour Productivity – Hartalega vs. Sector Figure 4: Core PBT Margins – Hartalega vs Sector Hartalega No. of Workers Used per Million Pieces Gloves per Month 7.5 3.9 Hartalega NGC Hartalega Bestari Jaya Hartalega Existing Set-up 1QCY12 2QCY12 3QCY12 4QCY12 1QCY13 2QCY13 3QCY13 2.6 Sector Source: Companies, TA Securities Source: Companies, TA Securities Impact Upon performing housekeeping to our ASPs as well as capacity assumptions to account for: 1) the expedition in commissioning of tail-end production lines at Plant 3, and 2) the carry forward of commissioning of Plant 4 from October 2017 to August 2017, our FY17/FY18 earnings estimates are revised marginally by +0.5%/+1.1% to RM403.6mn/RM470.3mn. Valuation & Recommendation Upon the revision to our earnings, we arrive at a slightly higher TP of RM6.85/share (previously RM6.80/share) based on an unchanged PE multiple of 25.0x against CY18 EPS. Notwithstanding the group’s sound fundamentals and our expectations for solid earnings growth in the near-to-medium term, we are reiterating our recent downgrade on the stock to Sell as we opine that the stock is fairly valued at current levels having priced in near-term drivers. Our ascribed PE multiple of 25.0x is ~0.5SD above the stock’s 5-year average PE multiple of 23.1x. Downside risks include the ability for the group to sustain high utilisation rates and volatile fluctuations in foreign exchange and raw material prices. Figure 5: Forward PER x 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 +1SD: 27.9x Average: 23.1x Source: Company, TA Securities Page 3 of 5 Feb-17 Nov-16 Aug-16 May-16 Feb-16 Aug-15 Nov-15 May-15 Aug-14 Nov-14 Feb-15 May-14 Aug-13 Nov-13 Feb-14 May-13 Aug-12 Nov-12 Feb-13 May-12 -1SD: 18.4x 1QCY17 4.5 Sector (Top Glove, Kossan, Supermax) 35% 30% 25% 20% 15% 10% 5% 0% 4QCY13 1QCY14 2QCY14 3QCY14 4QCY14 1QCY15 2QCY15 3QCY15 4QCY15 1QCY16 2QCY16 3QCY16 4QCY16 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0
15. TA Securities 18-Jul-17 A Member of the TA Group P &L YE Mar 31 (RMmn) Revenue EBITDA Depreciation & amortisation Net finance cost EI PBT Taxation MI Net profit (-MI) Core net profit EPS (sen) DPS (sen) FY16 FY17 FY18F FY19F FY20F 1,498.3 1,822.1 2,347.3 2,657.5 3,001.5 385.3 456.5 563.9 655.4 753.5 (70.6) (70.6) (83.9) (95.7) (106.8) 0.9 (0.0) 0.5 0.3 1.1 1.3 (37.2) 316.9 348.7 480.5 560.0 647.8 (59.1) (65.3) (76.9) (89.6) (103.7) (0.3) (0.4) (0.1) (0.1) (0.1) 257.4 283.0 403.6 470.3 544.1 256.1 320.2 403.6 470.3 544.1 15.6 17.1 24.4 28.4 32.9 7.4 7.9 11.0 12.8 14.8 Ratios YE Mar 31 (RMmn) Valuations PER Dividend yield PBV FY16 FY17 FY18F FY19F FY20F 44.2 1.1 7.6 40.2 1.2 6.8 28.2 1.6 6.0 24.2 1.9 5.3 20.9 2.2 4.6 Profitability ratios ROAE ROAA EBITDA margin PBT margin PAT margin 18.6 15.1 25.7 21.1 17.2 17.8 13.3 25.1 19.1 15.5 22.5 16.5 24.0 20.5 17.2 23.1 16.9 24.7 21.1 17.7 23.5 17.3 25.1 21.6 18.1 2.8 1.8 1.9 1.2 2.1 1.2 2.2 1.3 2.3 1.4 Liquidity ratios Current ratio Quick ratio Leverage ratios Total liabilities/equity Net debt/equity Int. coverage ratio Growth ratios Sales PBT PAT Core PAT Total assets 0.3 0.1 840.5 0.4 0.1 342.6 0.4 0.2 449.9 0.4 0.1 466.4 0.4 0.1 489.9 30.7 14.4 22.7 22.3 34.6 21.6 10.0 10.0 25.1 16.4 28.8 37.8 42.6 26.0 14.6 13.2 16.5 16.5 16.5 12.9 12.9 15.7 15.7 15.7 12.8 Balance Sheet YE Mar 31 (RMmn) Fixed assets Intangible assets Others LT assets Inventories Trade receivables Cash Others Current assets FY16 FY17 FY18F FY19F FY20F 1,401.5 1,570.3 1,786.4 1,990.7 2,183.9 19.5 19.8 19.8 19.8 19.8 1.0 1.3 1.3 1.3 1.3 1,422.0 1,591.4 1,807.5 2,011.8 2,205.0 201.5 239.0 84.4 14.1 539.1 271.0 300.0 120.3 0.2 691.4 349.1 386.4 73.9 0.2 809.6 395.2 437.5 109.4 0.2 942.2 446.4 494.1 185.2 0.2 1,125.9 1,961.1 2,282.8 2,617.1 2,954.0 3,330.9 Trade payables ST borrowings Others Current liabilities 147.4 42.4 0.8 190.7 206.8 147.5 8.4 362.7 269.1 108.0 8.4 385.5 302.3 121.5 8.4 432.2 339.3 133.7 8.4 481.4 LT borrowings Others LT liabilities 205.6 60.8 266.4 162.6 72.6 235.2 252.0 72.6 324.6 283.5 72.6 356.1 311.9 72.6 384.5 Share capital Reserves Shareholders' funds MI 820.5 681.4 1,501.9 2.1 827.3 854.9 1,682.2 2.7 827.3 1,076.9 1,904.2 2.8 827.3 1,335.6 2,162.8 2.9 827.3 1,634.8 2,462.1 3.0 Total liabilities and equity 1,961.1 2,282.8 2,617.1 2,954.0 3,330.9 Total assets Cash Flow YE Mar 31 (RMmn) PBT Depreciation and amortisation Net interest Other non-cash Changes in WC Tax paid Interest received Others Operational cash flow FY16 316.9 70.6 (3.3) (79.8) (64.3) 1.3 1.3 242.6 FY17 348.7 70.6 46.6 (81.6) (47.8) 1.0 0.9 338.4 FY18F 480.5 83.9 (0.5) (102.3) (76.9) 1.6 386.3 FY19F 560.0 95.7 (0.3) (64.0) (89.6) 1.5 503.3 FY20F 647.8 106.8 (1.1) (70.8) (103.7) 2.4 581.5 Capex Others Investing cash flow (424.7) (1.3) (426.0) (238.7) 4.3 (234.4) (300.0) (300.0) (300.0) (300.0) (300.0) (300.0) Net share issue Dividend paid Net change in debts Interest paid Others Financial cash flow 78.8 (122.9) 242.6 (1.3) 0.1 197.3 7.5 (131.3) 62.0 (1.0) (5.3) (68.2) (181.6) 50.0 (1.1) (0.0) (132.7) (211.6) 45.0 (1.2) (0.0) (167.8) (244.8) 40.5 (1.3) (0.0) (205.6) Net cash flow Opening cash flow Forex Closing cash flow 13.9 70.5 84.4 35.9 84.4 120.3 (46.4) 120.3 73.9 35.5 73.9 109.4 75.9 109.4 185.2 Page 4 of 5
16. TA Securities 18-Jul-17 A Member of the TA Group (THIS PAGE IS INTENTIONALLY LEFT BLANK) Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 5 of 5
17. COMPANY UPDATE TA Securities A Member of the TA Group www .bursamids.com Tuesday, 18 July 2017 Sector: Property MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Ibraco Berhad TP: RM1.00 (+13.6%) Last traded: RM0.88 Secured RM302.6mn Airport Job in Mukah Sarawak Buy THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY Thiam Chiann Wen Tel: +603-2167 9615 cwthiam@ta.com.my Secured Contract to Build New Airport in Mukah Sarawak for RM302.6mn Ibraco announced that it has received a Letter of Acceptance from the Jabatan Kerja Raya, Kuching, Sarawak for the construction and completion of a new airport at Mukah, Sarawak (Package 2). The scope of work of this package involves the completion of final formation, airfield pavement access road, and landside infrastructures & building works. www.taonline.com.my Stock Return Information KLCI 1,755.19 Expected Share Price Return (%) 13.6 Expected Dividend Return (%) 4.3 Expected Total Return (%) 17.9 Share Information Bloomberg Code The contract value for this project is RM302.6mn. Construction work is anticipated to commence upon site possession, scheduled by mid-August. According to the announcement, the project is expected to be completed within thirty-six (36) months from the date of commencement. IBRA MK Stock Code 5084 Listing Main Market Issued Share (mn) 496.4 Market Cap (RMmn) 436.8 Par Value (RM) Our View Although this is the first airport job secured by Ibraco, we believe the group is capable of undertaking this project. The group’s construction division, which was established in 2002, has the ability to carry out earthwork, civil, building and structural works for residential, commercial and industrial projects. It is also able to provide project management services ranging from feasibility studies, master planning, conceptual and detailed design, project management including contract administration and supervision. 52-wk Hi/Lo (RM) Overall, we are positive on this contract win as it will diversify the group’s earnings. In addition, it is in line the group’s strategy to further grow its construction division, which has mainly been focusing on the group’s in house property development. Share Performance (%) Forecast Assuming an operating margin of 7.0%, we estimate the contract to enhance the group’s net earnings by RM13.8mn or 2.8sen/share throughout the construction period. We raise our FY17-19 earnings forecasts by 6-10% assuming the contract commences in Sep-17. Valuation Following the change in earnings, we revise our target price higher to RM1.00/share from RM0.92/share previously, based on unchanged 9x CY18 EPS. Supported by RM303mn unbilled property sales as at Mar-17, the group’s future earnings is now further anchored by RM302.6mn outstanding construction orderbook. Ibraco’s landbank of 627 acres across Kuching, Bintulu and Kuala Lumpur with a collective GDV of RM5.7bn will sustain the group’s earnings over the longer term. With a total return of 17.9%, we upgrade Ibraco to Buy from Hold previously. Estimated Free Float (%) 12.2 Beta (x) 0.4 3-Month Average Volume ('000) 53.4 Top 3 Shareholders (%) Chew Chiaw Han 26.3 Sharifah Deborah 20.0 Ng Cheng Chuan 17.5 Price Change IBRA FBM KLCI 1 mth 2.9 (2.0) 3 mth (4.9) 0.8 12 mth (10.2) 5.0 Financial Info FY17 FY18 Debt to Equity Ratio 43.3 40.4 ROA (%) 4.7 9.0 ROE (%) 7.7 15.3 NTA/Share (RM) 0.7 0.8 Price/NTA (x) 1.3 1.2 (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg Page 1 of 2 0.5 1.05/0.76
18. TA Securities 18-Jul-17 A Member of the TA Group Earnings Summary (RM mn) Profit & Loss (RMm) YE Dec 31 Revenue EBITDA Dep. & amortisation Net finance cost PBT Taxation MI Net profit Core net profit Reported EPS (diluted) Core EPS (diluted) PER GDPS Div Yield 2015 254.0 76.2 (1.3) (4.7) 70.3 (17.8) 6.5 46.0 46.0 9.3 9.3 9.5 3.5 4.0 2016 158.8 46.2 (1.3) (4.5) 40.4 (11.4) (2.0) 27.1 27.1 5.5 5.5 16.1 3.5 4.0 2017f 201.0 42.2 (1.2) (4.7) 36.4 (9.1) (1.3) 26.0 26.0 5.2 5.2 16.8 3.5 4.0 2018f 427.7 83.1 (1.3) (5.0) 76.8 (19.2) (2.3) 55.3 55.3 11.1 11.1 7.9 4.0 4.5 2019f 585.5 113.5 (1.3) (5.6) 106.6 (26.7) (3.6) 76.4 76.4 15.4 15.4 5.7 5.0 5.7 Cash Flow (RMm) YE Dec 31 PBT Adjustments Dep. & amortisation Changes in WC Operational cash flow 2015 70.3 (27.1) 1.3 (100.1) (55.7) 2016 40.4 (21.5) 1.3 (13.4) 6.9 2017f 36.4 (9.1) 1.2 (40.7) (12.2) 2018f 76.8 (19.2) 1.3 (39.6) 19.3 2019f 106.6 (26.7) 1.3 (51.2) 30.0 Capex Others Investment cash flow (0.4) (11.2) (11.6) (0.2) 8.4 8.2 (5.0) 0.0 (5.0) (5.0) 0.0 (5.0) (5.0) 0.0 (5.0) Debt raised/(repaid) Equity raised(repaid) Dividend Others Financial cash flow Net cash flow 54.7 49.9 (17.4) 49.7 87.0 19.8 (15.2) 0.0 (18.4) 0.0 (33.6) (18.5) 15.0 0.0 (17.4) 0.0 (2.4) (19.6) 10.0 0.0 (19.9) 0.0 (9.9) 4.5 20.0 0.0 (24.8) 0.0 (4.8) 20.2 Assumptions YE Dec 31 New Sales Prop Dev Margins (sen) (sen) (x) (sen) (%) (RM mn) (%) 2015 169.3 2016 160.0 2017f 356.0 2018f 440.0 2019f 550.0 20.6 15.9 22.3 22.4 21.4 Balance Sheet (RMm) YE Dec 31 PPE, Land &Inv Prop Others Total Fixed Asset Cash Others CA 2015 253.0 6.0 259.0 53.3 240.3 293.5 2016 195.5 7.9 203.3 27.0 311.8 338.8 2017f 199.3 7.9 207.1 7.4 342.0 349.4 2018f 203.0 7.9 210.8 11.9 455.4 467.3 2019f 206.7 7.9 214.5 32.1 522.1 554.2 Total assets 552.6 542.2 556.5 678.1 768.7 ST debt Other liabilities CL Total Equity LT borrowings LT liabilities Total LT Liabilities 71.7 75.4 147.1 321.8 83.7 0.0 83.7 82.6 69.1 151.6 332.5 58.1 0.0 58.1 72.6 58.5 131.1 342.4 83.1 0.0 83.1 57.6 132.3 189.9 380.1 108.1 0.0 108.1 52.6 147.8 200.4 435.3 133.1 0.0 133.1 Total Equity & Liabilities 552.6 542.2 556.5 678.1 768.7 2015 2016 2017f 2018f 2019f Ratio YE Dec 31 Profitability ratios ROE ROA EBITDA Margins PBT Margins (%) (%) (%) (%) 16.5 9.4 30.0 27.7 8.3 4.9 29.1 25.4 7.7 4.7 21.0 18.1 15.3 9.0 19.4 18.0 18.7 10.6 19.4 18.2 Liquidity ratios Current ratio Quick ratio (x) (x) 2.0 1.6 2.2 2.1 2.7 2.6 2.5 2.4 2.8 2.6 Leverage ratios Total liabilities / equity Net debt / Equity (x) (x) 0.7 0.3 0.6 0.3 0.6 0.4 0.8 0.4 0.8 0.4 Growth ratios Revenue Pretax Profit Core net earnings Total assets (%) (%) (%) (%) 10.9 33.0 45.0 31.3 (37.5) (42.5) (41.1) (1.9) 26.6 (10.0) (3.9) 2.6 112.8 111.4 112.7 21.9 36.9 38.7 38.0 13.4 Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy 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. This report has been prepared by TA SECURITIES HOLDINGS BERHAD for purposes of Mid and Small Cap Research Scheme ("MidS") administered by Bursa Malaysia Berhad and will be compensated to undertake the scheme. TA SECURITIES HOLDINGS BERHAD has produced this report independent of any influence from the MidS or the subject company. For more information about MidS and other research reports, please visit Bursa Malaysia’s website at: www.bursamids.com for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 2 of 2
19. TA Securities COMPANY UPDATE Tuesday , 18 July 2017 FBMKLCI: 1,755.19 Sector: Construction A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 IJM Corporation Berhad TP: RM3.50(+0.9%) Last traded: RM3.47 Secures RM451mn Building Job from UOB SELL THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Ooi Beng Hooi Tel: +603-2167 9612 benghooi@ta.com.my New Building Job Worth RM451mn IJM has accepted the Letter of Award from UOB Properties (KL) Bhd for the design, construction and completion of the Proposed Office Development UOB Tower 2, at Jalan Raja Laut, Kuala Lumpur. The project carries a contract sum of RM450.9mn and is to be completed within a period of 40 months. The project includes 5 levels of basement car park, 1 level of lower ground floor, 2 levels of podium for a banking hall and 27 levels of office space including a green lounge reception, a sky lounge and mechanical floors. Our View This is the second major construction contract secured by the group for FY18, after bagging MRT line 2 Station Package S203 worth RM342mn a month ago. To date, we estimate that IJM has secured RM793mn new jobs versus the management’s target of RM3.0bn. With this job win, we estimate the group’s total outstanding construction order book to amount to RM8.8bn. Assuming a PBT margin of 6.0%, we expect the project to enhance the group’s net earnings by RM20.6mn, or 0.6sen/share throughout the construction period. Impact No change to our FY18-20 earnings forecasts as the job win is within our FY18 order book replenishment assumptions of RM3.0bn. Valuation We maintain the target price at RM3.50, based on CY18 PE multiples of 20x for the construction division, 18.4x for the plantation division (20% holding company discount to IJMPLNT’s target PE multiple of 23x), 16x for the infrastructure divisions, 12x for the property division and 14x for the building material division. Maintain SELL call on IJM as we think the stock is fairly valued. www.taonline.com.my SHARE INFO Bloomberg Code IJM MK Bursa Name IJM Stock Code 3336 Listing Main Market Share Cap (m) 3626.9 Market Cap @ RM (RMm) 12585.5 52-wk Hi/Lo (RM) 3.61/3.07 12-mth Avg Daily Vol (000' shrs) 4690.1 Estimated Free Float (%) 65.6 Beta 1.08 Major Shareholders (%) Employees Provident Fund - 14.63 Skim Amanah Saham Bumiputera - 5.93 Lembaga Tabung Haji - 5.62 FORECAST REVISION Forecast Revision (%) Net profit (RMm) Consensus TA/Consensus (%) Previous Rating FY18 FY19 734.3 771.4 666.9 740.1 110.1 104.2 Sell (Maintained) FINANCIAL INDICATORS Net debt/equity (%) CFPS (sen) P/CFPS (x) ROA (%) NTA/Share (RM) Price/ NTA (x) FY18 36.2 5.6 62.3 4.0 2.7 1.3 FY19 31.6 10.4 33.2 4.1 2.8 1.2 SHARE PERFORMANCE Price chg (%) 1 mth 3 mth 6 mth 12 mth IJM (0.3) (0.3) 3.0 0.6 FBMKLCI (2.0) 0.8 5.4 5.0 (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg Page 1 of 2
20. TA Securities 18-Jul-17 A Member of the TA Group Profit & Loss (RM'mn) YE March 31 2016 2017 2018F 2019F 2020F Revenue 5128.2 6065.3 7288.1 6808.1 7975.4 COGS (3694.5) (4638.3) (5539.0) (5174.2) (6220.8) Gross profit 1433.7 1427.0 1749.2 1633.9 1754.6 EBITDA Dep + Amortisation EBIT Finance cost Associates JV EI PBT Adj PBT 1577.2 1382.1 (275.8) (300.5) 1301.5 1081.6 (169.2) (144.7) 13.7 56.4 9.8 16.7 302.0 100.0 1155.8 1010.0 853.8 910.0 1572.1 (278.7) 1293.4 (182.8) 14.6 3.0 0.0 1128.2 1128.2 1635.7 (288.8) 1346.9 (179.6) 15.0 3.0 0.0 1185.3 1185.3 1584.5 (298.5) 1286.0 (176.4) 15.4 3.0 0.0 1128.1 1128.1 Tax MI Net profit Adj net profit (274.3) (87.9) 793.6 491.6 (282.1) (111.8) 734.3 734.3 (296.3) (117.6) 771.4 771.4 (282.0) (127.9) 718.2 718.2 Cash Flow (RM'mn) YE March 31 PBT Depr & Amort Tax Associate and JV Change in Wkg Cap Other Operating CF CFO 2016 2017 2018F 2019F 2019F 1155.8 1010.0 1128.2 1185.3 1128.1 275.8 300.5 278.7 288.8 298.5 (349.3) (261.8) (282.1) (296.3) (282.0) (23.6) (73.1) (17.6) (18.0) (18.4) (706.2) 115.1 (239.0) 3.3 (155.6) 405.9 400.5 0.0 0.0 0.0 758.5 1491.2 868.4 1163.1 970.4 Capex Others CFI (223.3) 43.2 (180.1) (595.9) 237.4 (358.5) (550.0) 18.3 (531.7) (550.0) 19.5 (530.5) (550.0) 20.4 (529.6) Net Addition/Rpmt Dividend Paid Interest Others CFF (868.2) (303.7) (270.9) 638.6 (804.2) 87.2 (360.0) (250.0) 22.4 (500.3) (100.0) (344.2) (182.8) 201.7 (425.3) (100.0) (345.1) (179.6) 198.5 (426.2) (100.0) (382.5) (176.4) 195.3 (463.6) Net Cash Flow (225.8) 632.3 (88.6) 206.4 (22.7) (243.2) (113.0) 653.8 553.8 Balance Sheet (RM'mn) YE March 31 Fixed Assets Associates + JV Others LT Assets 2016 1812.6 1550.2 5252.4 8615.1 2017 1989.6 1656.2 5627.4 9273.2 2018F 2043.5 1673.7 5507.7 9224.9 2019F 2146.7 1691.7 5646.1 9484.5 2019F 2242.5 1710.2 5781.4 9734.1 Inventories 1092.5 1422.0 911.0 907.7 1063.4 Trade and other receivables 2256.4 2031.0 2915.3 2723.2 3190.2 ST investments 407.2 299.2 407.2 407.2 407.2 Deposits, cash and bank balances 1679.5 2147.8 2059.2 2265.6 2242.9 Others 5784.9 5719.6 5784.9 5784.9 5784.9 ST Assets 11220.5 11619.5 12077.6 12088.8 12688.6 Total Assets 19835.5 20892.7 21302.5 21573.3 22422.7 Trade and other payables ST Borrowings Others ST Liabilities 2258.3 1477.4 35.0 3770.7 2518.2 1742.9 23.7 4284.8 2915.3 1477.4 35.0 4427.6 2723.2 1477.4 35.0 4235.6 3190.2 1477.4 35.0 4702.5 LT Borrowings Others LT Liabilities 4333.8 1494.6 5828.5 4226.3 1564.9 5791.2 4133.8 1494.6 5628.5 4033.8 1494.6 5528.5 3933.8 1494.6 5428.5 Share Cap Others Reserves Shareholder's Funds MI 3584.8 2401.5 3042.1 9028.4 1208.0 6022.7 171.7 3302.9 9497.3 1319.4 6041.6 6060.5 6079.4 52.4 52.4 52.4 3728.8 4155.0 4490.7 9822.7 10267.9 10622.5 1423.7 1541.3 1669.2 Liabilities + Equities 19835.5 20892.7 21302.5 21573.3 22422.7 Ratio YE March 31 EBITDA margin (%) Core EPS (sen)* Diluted EPS (sen) EPS Growth (%) PER (x) GDPS (sen)* Div Yield (%) Net cash (RMm) Net gearing (x) ROE (%) ROA (%) NTA (RM)* P/NTA (x) 2016 30.8 12.5 12.3 (23.2) 27.8 10.0 2.9 2017 22.8 15.4 15.2 22.8 22.7 7.5 2.1 2018F 21.6 20.3 20.4 31.6 17.2 9.5 2.7 2019F 24.0 21.2 21.4 4.8 16.4 9.5 2.7 2019F 19.9 19.7 20.0 (7.1) 17.7 10.5 3.0 (4131.8) (3821.4) (3552.0) (3245.6) (3168.3) 0.5 0.4 0.4 0.3 0.3 5.6 6.0 7.6 7.7 6.9 2.9 2.7 4.0 4.1 3.8 2.5 2.6 2.7 2.8 2.9 1.4 1.3 1.3 1.2 1.2 Note: *Adjusted for 1-for-1 bonus issue in FY16 Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 2 of 2