Bursa Malaysia Daily Market Report - 2 May

Transcription

1. Wednesday , 02 May, 2018 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only N ew s 1. D ai l y M arke t C om men t a ry 2. D ai l y B ri ef Fu nd a me n tal Rep o r ts 1. 2. 3. 4. 5. Ba n k i n g S e c t o r : M o de r a te L o a n G ro w th in M a rc h DB S Gr o u p H o ld in g s L t d : Su p e rb 1 Q F Y 1 8 R e su lt s In d o f o o d A g r i Re s o u rc e s L t d : 1 Q F Y 1 8 R e su lt s B ro a d ly I n - l in e L o t t e C h e m ic a l T it a n H o l d in g B h d : P ro du c t P ric in g L a g Da m p e n s H ig h e r V o lu m e s S e m ic o n d u c t o r S e c t o r : O n T ra c k f o r A n o th e r Y e a r o f G ro w th Te ch n ic al R ep o rt s 1. D ai l y Te ch n ic a l St o ck W at ch , D ai l y Mon e y F lo w , D a il y St oc k Sc reen ( Loc al ) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
2. Daily Market Commentary Wednesday , 02 May 2018 TA Research, e-mail : taresearch@ta.com.my For Internal Circulation Only Review & Outlook KLSE Market Statistics (30.04.2018) (mil) Volume +/-chg (RMmn) Main Market 973.9 Warrants 418.6 ACE Market 311.1 Bond 2.7 ETF 1.5 LEAP 0.0 Total 1,707.8 Off Market 43.3 207.4 -29.5 -100.7 0.2 1.1 (0.1) 1,692.9 91.3 48.7 0.8 1.7 0.0 1,835.3 -19.7 188.3 Value Value/ +/-chg Volume Up Down -7.2 -25.7 -8.1 0.1 1.3 0.0 75.2 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 MAYBANK SEM MMAG-PA ACCSOFT DIALOG XIANLNG FAJAR KARYON 15.0 11.0 7.1 2.0 2.0 1.9 1.8 1.5 245 126 37 1 2 0 411 % chg % YTD chg 6.90 44.96 34.49 3.50 0.37 0.35 0.24 0.19 4.09 0.70 -14.49 4.43 24,099.05 7,130.70 7,520.36 22,508.03 2,515.38 30,808.45 3,613.93 1,780.11 5,994.60 3,082.23 1,776.13 6,015.23 -64.10 64.44 11.06 40.16 22.98 527.78 36.72 2.09 75.36 0.00 0.00 32.50 -0.27 0.91 0.15 0.18 0.92 1.74 1.03 0.12 1.27 0.00 0.00 0.54 -2.51 3.29 -2.18 -1.13 1.94 2.97 6.20 1.51 -5.68 -6.80 -6.49 -0.82 10.76 1.51 0.08 0.15 3.09 0.63 0.68 0.17 Exchange Rate USD/MYR 3.9525 0.031 USD/JPY 109.65 0.380 EUR/USD 1.203 -0.0065 Counter Mkt Cap. Chg (RM’mn) (RM) MAYBANK PBBANK IHH MAXIS HLBANK SIMEPLT GENTING MISC GENM PETDAG 117,725 91,904 50,097 45,536 38,866 37,881 34,216 31,961 29,029 26,823 0.02 0.20 0.01 0.02 0.14 0.01 0.14 0.06 0.10 0.04 • • • • • Vol. (mn) 9.90 4.15 5.00 1.66 1.03 3.74 2.29 2.72 4.39 0.78 Commodities Futures Palm Oil (RM/mt) 2,359.00 -22.00 Crude Oil (Brent) 73.38 -1.78 Gold ($/tr.oz.) 1,304.60 -11.50 Important Dates VS - 1:4 Bonus Issue - BI of up to 397.5m shares. 1 bonus share for every 4 existing shares held. Ex-Date: 04/05/2018. Entitlement Date: 08/05/2018. LISTING ON: 10/05/2018. Stocks are likely to extend range bound trade in the near-term, with most investors staying sidelined and cautious ahead of the keenly awaited GE14 event next week. Immediate support for the index remains at 1,840, which represents the 23.6%FR of the Dec 2017 low (1,708) to the Feb 2018 peak (1,880), followed by the 100-day ma (1,830), lower Bollinger band (1,825) and subsequently the 4/4/18 pivot low of 1,811. Overhead resistance will be 1,880, and then the recent high of 1,896. Positive technical momentum on EcoWorld support a test of the RM1.20 support-turn-resistance level from the June 2016 low, with a convincing breakout to aim for the 76.4%FR (RM1.32) and 61.8%FR (RM1.40) going forward. Key retracement supports are from the 123.6%FP (RM1.08) and 138.2%FP (RM1.00). Low momentum readings on Ekovest implies further base building needed to rebuild support above the 23.6%FR (76sen), pending recovery the 38.2%FR (90sen), while a confirmed breakout should target the 50%FR (RM1.02) and 61.8%FR (RM1.14) ahead. News Bites Top 10 KLCI Movers Based on Mkt Cap. (RM) @ @ @ @ @ @ @ @ 248 109 38 2 4 0 401 1,870.37 13,033.69 14,579.95 1,864.00 Off Market (mn) 1.74 0.22 0.16 0.29 1.14 0.34 1.07 4.35 While the local benchmark index rose on Monday led by strength in banking stocks, the broader market ended mixed with most market players sidelined ahead of the Workers Day holiday. The KLCI gained 6.9 points to settle at 1,870.37, off an early low of 1,860.25 and high of 1,873.39, but losers edged gainers 411 to 401 on cautious turnover totaling 1.71bn shares worth RM1.83bn. • • • • • • • • • • • • • • • Westports Holdings Bhd has proposed to acquire a piece of leasehold land measuring 154.2 hectares for terminal expansion in Pulau Indah for RM116.2mn. Censof Holdings Bhd has bagged RM73.4mn contract from the Human Resource Development Fund. IHH Healthcare Bhd revised its offer by including immediate equity infusion at INR175 per share, 9.4% premium to an earlier proposal to invest in Fortis. Tomypak Holdings Bhd has reported a deviation of more than 10% between its audited and unaudited financial results for the year ended Dec 31, 2017. Eng Kah Corporation Bhd is disposing of its vacant freehold land measuring 11,774 sq m in Seremban, Negeri Sembilan to Kian Joo Canpack Sdn Bhd for RM9.4mn. UMW Holdings Bhd (UMW) is one step closer to taking a majority stake in Perusahaan Otomobil Kedua Sdn Bhd. Ipmuda Bhd has proposed to dispose a factory in Rawang, Selangor, for RM12mn. Yinson Holdings Bhd (YHB) has secured its first floating production, storage, and offloading charter contract in Malaysia, which will commence operations next year. Independent auditors have expressed concerns about the prospects of Konsortium Transnasional Bhd. Malaysia Airports Holdings Bhd is taking legal action against AirAsia X Bhd (AAX), claiming the airline owes it RM34.9mn in outstanding airport charges, rent and late payment charges. Tan Sri Quek Leng Chan has stepped down as chairman of Guocoland (Malaysia) Bhd effective immediately, due to internal rationalisation and streamlining of the board. Sumatec Resources Bhd has been admitted into the Practice Note 17 category. HB Global Ltd said its external auditor has issued a statement of material uncertainty related to a going concern. Ire-Tex Corp Bhd's external auditors have highlighted a material uncertainty in the group's financial statements that may cast significant doubt on its ability to continue as a going concern. Australia left its key interest rate unchanged at a record low Tuesday amid the slowing of a hiring boom. Japanese manufacturing activity expanded at a faster pace in April. China's official gauge of manufacturing growth ticked only slightly lower in April, despite broad expectations that the solid growth seen during the first quarter was likely to dissipate soon. U.S. allies breathed a sigh of relief after President Donald Trump's lastminute decision to postpone tariffs on imports of steel and aluminum from some of Washington's closest partners. A closely watched gauge of U.S. manufacturing activity signaled somewhat slower growth in April. Americans' spending regained momentum in March while their incomes continued to grow, a sign consumers could drive better economic growth this year. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan, Head of Research MENARA TA ONE, 22 JALAN for TA SECURITIES HOLDINGS BERHAD (14948-M) A PARTICIPATING ORGANISATION OF BURSA MALAYSIA SECURITIES BHD P RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL : 603 - 2072 1277. FAX : 603 - 2032 5048 www.ta.com.my
3. Wednesday , May 02, 2018 FBMKLCI: 1,870.37 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Brief Market View, News in Brief: Corporate, Economy, and Share Buybacks Chartist: Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my M a r k e t V i e w Range Bound Ahead of GE14 While the local benchmark index rose on Monday led by strength in banking stocks, the broader market ended mixed with most market players sidelined ahead of the Workers Day holiday. The KLCI gained 6.9 points to settle at 1,870.37, off an early low of 1,860.25 and high of 1,873.39, but losers edged gainers 411 to 401 on cautious turnover totaling 1.71bn shares worth RM1.83bn. Resistance at 1,880, Support at 1,840 Stocks are likely to extend range bound trade in the near-term, with most investors staying sidelined and cautious ahead of the keenly awaited GE14 event next week. Immediate support for the index remains at 1,840, which represents the 23.6%FR of the Dec 2017 low (1,708) to the Feb 2018 peak (1,880), followed by the 100-day ma (1,830), lower Bollinger band (1,825) and subsequently the 4/4/18 pivot low of 1,811. Overhead resistance will be 1,880, and then the recent high of 1,896. Bargain Eco World & Ekovest Positive technical momentum on EcoWorld support a test of the RM1.20 support-turnresistance level from the June 2016 low, with a convincing breakout to aim for the 76.4%FR (RM1.32) and 61.8%FR (RM1.40) going forward. Key retracement supports are from the 123.6%FP (RM1.08) and 138.2%FP (RM1.00). Low momentum readings on Ekovest implies further base building needed to rebuild support above the 23.6%FR (76sen), pending recovery the 38.2%FR (90sen), while a confirmed breakout should target the 50%FR (RM1.02) and 61.8%FR (RM1.14) ahead. Asian Markets Modestly Higher In Holiday-Thinned Trade Markets in Australia and Japan traded mostly higher on Tuesday while many Asian markets were shut for a public holiday. May Day holidays in many centers across Asia and Europe meant trading was sparser than usual, though there was more than enough news flow to keep those that were open occupied. The mood at the margins was upbeat after U.S. President Donald Trump extended steel and aluminum tariff exemptions for Europe, Canada and Mexico for another month. There were nerves too, as market participants were concerned about allegations made by Israeli Prime Minister Benjamin Netanyahu that Iran had a secret plan to develop nuclear weapons. Japan’s Nikkei eked out modest gains in holiday-thinned trade on Tuesday supported by buying in index-heavy stocks such as Fast Retailing and Fanuc, though Sony tumbled after the company issued a profit warning. The Nikkei ended 0.2 percent higher at 22,508.03 after moving in and out of the black earlier. However, the broader Topix dropped 0.2 percent to 1,774.18. Australia's ASX 200 also rose 32.5 points, or 0.54 percent, to 6,015.20, with the heavily weighted financial sector gaining 1.37 percent. Major banking names gained more than 1 percent each. Markets were closed in a host of countries including Germany, France, Italy, Spain, China, Hong Kong, Singapore and India. Page 1 of 9
4. 2-May-18 Wall Street End Mixed Ahead Of Fed Policy Meeting Conclusion U .S. stocks closed mostly higher on Tuesday, as a sharp rally in technology stocks helped the S&P 500 and the Nasdaq shake off an early decline. However, the Dow fell for a third straight session as caution remained high ahead of the conclusion of a Federal Reserve policy meeting and fresh developments in global trade. A big focus this week is likely to be central bank policy and economic data. Investors will watch the Federal Reserve meeting closely for any signals that policy makers will raise interest rates another three times this year. The central bank is expected to leave interest rates on hold and signal no change to a tightening path of two more rate increases in 2018. The U.S. tariffs on aluminum and steel imports were also in focus again. President Donald Trump late Monday gave top allies, the European Union, Canada and Mexico, an extension to the tariff exemption to allow more time negotiate a new pact to avoid the levies. The White House said broad tariffs of 25 percent on steel and 10 percent on aluminum, already in effect against China, Russia, Japan and others, won’t take effect for the EU on Tuesday as previously planned. Tech was by far the biggest outperformer of the day, with the sector ending up 1.5 percent. That was enough to offset broad weakness elsewhere, as six of the 11 primary S&P 500 sectors ended lower and other industries saw only modest gains on the day. The Dow Jones Industrial Average fell 64.10 points, or 0.27 percent, to 24,099.05, the S&P 500 gained 6.75 points, or 0.25 percent, to 2,654.80 and the Nasdaq Composite added 64.44 points, or 0.91 percent, to 7,130.70. Page 2 of 9
5. 2-May-18 News In Brief Corporate Westports Holdings Bhd has proposed to acquire a piece of leasehold land measuring 154 .2 hectares for terminal expansion in Pulau Indah from the Selangor State Development Corporation for RM116.2mn. The purchase consideration will be satisfied entirely in cash which will be funded by internally generated funds and bank borrowings. (New Strait Times/Bursa Malaysia) Censof Holdings Bhd has bagged RM73.4mn contract with the tenure of up to 5 years as the service provider to implement an integrated core and finance system for the Human Resource Development Fund. (The Sun/Bursa Malaysia) IHH Healthcare Bhd revised its offer by including immediate equity infusion at INR175 per share, 9.4% premium to an earlier proposal to invest in Fortis, and a subsequent equity infusion at a per share price not exceeding INR175. The group had earlier proposed to inject INR6.5bn immediately, and then INR33.5bn after due diligence. (The Edge/The Sun) Tomypak Holdings Bhd has reported a deviation of more than 10% between its audited and unaudited financial results for the year ended Dec 31, 2017. The group's net profit stood at RM13.6mn in the audited financial statement, about 43.2% higher than the RM9.5mn announced in the unaudited results. The variance was mainly due to additional tax benefits arising from an increase in reinvestment tax allowances at one of its subsidiary, which was underprovided during the release of the unaudited results. (The Edge/Bursa Malaysia) Eng Kah Corporation Bhd is disposing of its vacant freehold land measuring 11,774 sq m in Seremban, Negeri Sembilan to Kian Joo Canpack Sdn Bhd for RM9.4mn. The proceeds will be utilised as working capital and the disposal is expected to be completed by 3Q2018. (The Sun/Bursa Malaysia) UMW Holdings Bhd (UMW) is one step closer to taking a majority stake in Perusahaan Otomobil Kedua Sdn Bhd after the shareholders of Med-Bumikar Mara Sdn Bhd, who collectively hold 52.06% of the outstanding shares, voted to sell its 50.07% stake in MBM Resources Bhd to UMW. Meanwhile, dissenting minority shareholders of Med-Bumikar, who collectively hold 48% in the private company, had walked out of the extraordinary general meeting. (The Star) Ipmuda Bhd has proposed to dispose a factory in Rawang, Selangor, for RM12mn to unlock the value of the property, strengthen its financial position and reduce its bank borrowings. The disposal is expected to be completed within 90 days from the date of Sales and Purchase Agreement. (Bernama/Bursa Malaysia) Yinson Holdings Bhd (YHB) has secured its first floating production, storage, and offloading charter contract in Malaysia, which will commence operations next year. The charter contract has an aggregate value of USD860mn (RM3.4bn). The project was originally awarded to TH Heavy Engineering Bhd (THHE) by JX Nippon Oil & Gas Exploration (Malaysia) Ltd on Nov 27, 2014. THHE, however, was unable to complete the project due to financial distress. YHB will pay THHE a novation fee of RM374mn. (The Star/Bursa Malaysia) Independent auditors have expressed concerns about the prospects of Konsortium Transnasional Bhd as the current liabilities exceeded its current assets for its financial statement year ended 31 December 2017. (The Star/Bursa Malaysia) Page 3 of 9
6. 2-May-18 YKGI Holdings Bhd has inked a subscription cum shareholders agreement with Ajiya Bhd to form a joint venture company known as Asteel Ajiya Sdn Bhd in East Malaysia . The joint venture company is involved in manufacturing and sale of safety glass, supply and installation of Green Integrated Building System and trading of metal door frame, window frame, metal ceiling and sunshade products. It is expected to commence business in 2Q2018. (The Sun/Bursa Malaysia) Malaysia Airports Holdings Bhd is taking legal action against AirAsia X Bhd (AAX), claiming the airline owes it RM34.9mn in outstanding airport charges, rent and late payment charges. However, AAX’s chief executive officer Benyamin Ismail denied the claim by saying the group has been consistently made monthly payments to the airport operator. (The Edge/Bursa Malaysia) Tan Sri Quek Leng Chan has stepped down as chairman of Guocoland (Malaysia) Bhd effective immediately, due to internal rationalisation and streamlining of the board. (Bursa Malaysia) Sumatec Resources Bhd has been admitted into the Practice Note 17 category after its external auditors Grant Thornton Malaysia's disclaimer opinion on its financial statements ended December 31, 2017. (The Sun/Bursa Malaysia) HB Global Ltd said its external auditor has issued a statement of material uncertainty related to a going concern in respect of its audited financial statements for the financial year ended Dec 31, 2017. (Bursa Malaysia) Ire-Tex Corp Bhd's external auditors have highlighted a material uncertainty in the group's financial statements that may cast significant doubt on its ability to continue as a going concern. (The Edge/Bursa Malaysia) Chin Teck Plantations Bhd's net profit jumped by 2.8 times to RM22.7mn from RM8.1mn, mainly lifted by a net fair value gain of RM14.1mn as a result of the divestment of available-for-sale of investment securities. Meanwhile, quarterly revenue grew 12.3% YoY to RM42.2mn from RM37.6mn a year ago. For 1HFY18, net profit jumped by 52% YoY to RM36.2mn from RM23.8mn while revenue went up by 5.8% YoY to RM84.7mn from RM80.0mn in 1HFY17. (The Edge/Bursa Malaysia) Lotte Chemical Titan Holding Bhd's net profit for 1QFY18 fell 28.6% YoY to RM244.2mn from RM342.2mn, due to margin squeeze and foreign exchange loss. Meanwhile, quarterly revenue rose 15.7% to RM2.2bn from RM1.9bn a year earlier, on higher sales volume. (The Edge/Bursa Malaysia) Luxchem Corporation Bhd’s net profit for 1QFY18 dropped 29.2% YoY to RM9.6mn, compared with RM13.6mn a year earlier, on lower revenue contribution. Meanwhile, quarterly revenue fell 9.8% YoY to RM196.7mn from RM218.1mn due to lower exchange rate and lower quantity. (The Edge/Bursa Malaysia) Page 4 of 9
7. 2-May-18 N e w s I n B r i e f Economy Asia Malaysia Producer Prices Fall for Third Month Malaysia 's producer prices decreased for the third straight month in March, figures from the Department of Statistics Malaysia (DOSM) showed. Producer prices dropped 2.2% yearover-year in March, slower than February's 3.4% decline. Among sectors, the price index for agriculture, forestry & fishing fell the most by 11.0% annually in March and manufacturing prices slid by 2.3%. On a monthly basis, producer prices went down 0.4% from February, when it slipped by 1.5%. (DOSM) Australia Holds Key Rate as Employment Bonanza Winds Down Australia left its key interest rate unchanged at a record low Tuesday -- as expected -- amid the slowing of a hiring boom. Reserve Bank Governor Philip Lowe kept the cash rate at 1.5%, where it has stood since late 2016, as the central bank waits for inflation to strengthen. The nation’s jobs growth has declined to a three-month annualized pace of 1.2% in 2018 from a blockbuster 3.4% for the whole of last year. “The bank’s central forecast for the Australian economy remains for growth to pick up, to average a bit above 3% in 2018 and 2019.” Lowe said in a statement. “Employment has grown strongly over the past year, although growth has slowed over recent months.” The RBA has shifted to a supporting role in the nation’s economy, styling itself as a predictable player. Lowe has said the next rate move will likely be an increase at some point, reflecting forecasts for faster growth that are due to be updated. Traders are pricing in little chance of a tightening this year as inflation hovers near the bottom of the central bank’s 2% to 3% target, with 2019 seen as a more realistic prospect. Separately, the Australian Performance of Manufacturing Index fell 4.8 points to 58.3 points in April. However, results above 50 indicate expansion with higher results indicating a stronger growth. April marked a nineteenth month of expanding or stable conditions for the Australian PMI and the longest run of continuous expansion since 2005. (Bloomberg) Japan Factory PMI Points to Domestic Bounce, Export Weakness Japanese manufacturing activity expanded at a faster pace in April than the previous month, a revised survey showed, as new orders accelerated in a sign the economy is recovering from an expected rough patch in the first quarter. However, growth in new export orders slowed sharply due to a stronger yen, posing an additional risk for Japan’s export-intensive manufacturing sector even as global trade tensions heat up. The final Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) rose to 53.8 in April on a seasonally adjusted basis versus a flash reading of 53.3 and a final 53.1 in the previous month. The index remained above the 50 threshold that separates expansion from contraction for the 20th consecutive month and rose for the first time in three months. (Reuters) China Manufacturing Gauge Falls Less than Expected in April China’s official gauge of manufacturing growth ticked only slightly lower in April, despite broad expectations that the solid growth seen during the first quarter was likely to dissipate soon. The manufacturing purchasing managers’ index published by China’s National Bureau of Statistics edged down 0.1 points to 51.4 in April, marginally closer to the 50-point line separating growth from contraction and coming in above a median forecast of 51.3 from economists surveyed by Reuters. A sub-index tracking factory gate prices jumped 1.3 points to 50.2, returning to growth after two months of contraction, and that for output held steady at 53.1. But a reading on new orders dipped 0.4 points to 52.9 as that for new export orders fell 0.6 points to 50.7. Elsewhere in the economy, the official non-manufacturing PMI rose 0.2 points to 54.8 as a key sub-index tracking services sector growth edged up the same amount to 53.8. That for construction fell 0.1 points to 60.6. (Financial Times) Page 5 of 9
8. 2-May-18 Singapore PM Says Good Chance Economic Growth Will Top 2 .5% in 2018 Singapore Prime Minister Lee Hsien Loong said the country’s economic growth for the year should exceed 2.5% “if all goes well”, but brewing global trade tensions were clouding the outlook. The world’s major economies were expected to perform well this year, which is positive for Singapore’s growth as it depends largely on the external environment, Lee said in a Labour Day speech. “We expect growth for the whole year to be 1.5% to 3.5%, and if all goes well, we should do better than 2.5%,” Lee said. Singapore’s economy expanded 3.6% in 2017, the fastest pace in three years, thanks to an exports boom, “There are tensions brewing which are clouding the outlook,” Lee said, and cited simmering tariff standoff between the United States and China. Lee has previously warned that a trade war will have a major impact on the city-state - often seen as a bellwether for global growth - because international trade dwarfs its economy. (Reuters) United States U.S. Allies Relieved by Tariff Delay but Concerns Linger Over Trump’s Next Move U.S. allies breathed a sigh of relief after President Donald Trump’s last-minute decision to postpone tariffs on imports of steel and aluminum from some of Washington’s closest partners helped avoid a trade war, but left many questions about what comes next. The European Union “takes note of the decision” to delay a ruling by one month, said the European Commission, the EU’s executive arm, in an unenthusiastic statement. “The U.S. decision prolongs market uncertainty, which is already affecting business decisions,” the commission said. “The EU should be fully and permanently exempted from these measures, as they cannot be justified on the grounds of national security.” The White House said late Monday that broad tariffs of 25% on steel and 10% on aluminum—already in effect against China, Russia, Japan and others—wouldn’t go into force for the EU on Tuesday as previously planned. Instead, the bloc has another month to continue negotiating with the U.S. about a new pact to avoid the tariffs. As expected, Canada and Mexico were given an extension, also until June 1, while talks about rewriting the North American Free Trade Agreement proceed. The EU said Trade Commissioner Cecilia Malmstrom “has been in contact with U.S. Commerce Secretary Wilbur Ross and Trade Representative Robert Lighthizer over the past weeks, and these discussions will continue.” Other European governments endorsed the stance of the commission, which represents all 28 EU members in trade talks. (WSJ) U.S. Factory-Sector Activity Slowed in April A closely watched gauge of U.S. manufacturing activity signaled somewhat slower growth in April. The Institute for Supply Management on Tuesday said its manufacturing index fell to 57.3 in April from 59.3 in March. The index in February hit its highest level since 2004, then eased in March and April. Economists surveyed by The Wall Street Journal had expected an April reading of 58.5. Numbers above 50 indicate manufacturing activity is expanding, while numbers below 50 signal contraction. Manufacturing accounted for 11.6% of U.S. economic output in 2017, according to the Commerce Department. The sector is closely watched by forecasters for clues about the direction of the broader economy. It has picked up in recent quarters, aided by an export-boosting weaker dollar and healthier growth overseas. Factory production increased 3% in March compared with a year earlier, the strongest annual gain since mid-2012, according to Federal Reserve data. (WSJ) U.S. Inflation Hit Federal Reserve’s 2% Target in March Inflation hit an important milestone for Federal Reserve officials as they prepare for a policy meeting in Washington, fresh evidence that the long economic expansion is rousing dormant consumer prices. The Commerce Department’s price index for personal-consumption expenditures, the Fed’s preferred inflation gauge, was up 2% from a year earlier in March, the first time in more than a year it was on target. Inflation is now above the median of Fed officials’ projections from their March meeting, which put it at 1.9% by the end of this year. The PCE index was flat on the month from February, thanks in part to a decline in energy Page 6 of 9
9. 2-May-18 prices . But prices show some signs of rising outside that volatile sector. Excluding food and energy costs, prices rose 0.2% in March from February and were up 1.9% from a year earlier. Six months earlier, core year-over-year inflation stood at 1.4%. The gains have been driven in part by higher services inflation as firms compete to hire scarcer workers. Services inflation rose 2.8% in the year to March, while prices for long-lasting durable goods were down 2.4% from a year earlier. (WSJ) U.S. Consumer Spending Bounced Back in March Americans’ spending regained momentum in March while their incomes continued to grow, a sign consumers could drive better economic growth this year. Personal-consumption expenditures, a measure of household spending on everything from dishwashers to books, increased a seasonally adjusted 0.4% in March from the prior month, the Commerce Department said. The increase in spending reflects some renewed momentum after a slowdown earlier this year, when expenditures edged up 0.2% in January and were flat in February. This earlier pullback came after strong holiday spending coupled with hurricaneinduced purchases—such as replacements for ruined cars—in the fourth quarter. Consumer spending accounts for more than two-thirds of U.S. economic output, making it a key driver of the economy. In March, durable-goods spending rose 0.8%. Growing worker paychecks also likely helped propel March’s spending gains. Personal income, reflecting Americans’ pretax earnings from salaries and investments, rose 0.3% in March, broadly in line with increases clocked in recent months. Wages and salaries edged up 0.2%. A larger increase of 0.9% came from dividend income, which PNC chief economist Gus Faucher attributed to businesses boosting dividends in line with lower corporate tax rates. (WSJ) U.S. Pending Home Sales Increased Less than Forecast in March A gauge of signed contracts to purchase previously-owned U.S. homes rose less than forecast in March and the prior month’s reading was revised down, indicating a lack of inventory is restraining the market, according to data from the National Association of Realtors in Washington. The latest results show that interested buyers continue to face a persistent shortage of affordable inventory that is driving up property prices faster than wage growth. Nonetheless, a solid job market and lower taxes are helping underpin demand for housing even as mortgage rates climb to an almost five-year high. The NAR revised its annual sales forecast to 5.61 million existing homes this year, 1.8 percent more than in 2017. It previously projected sales would match last year’s 5.51 million. NAR data released earlier this month showed existing-home sales climbed to a four-month high in March. The Realtors group said half of the houses sold were on the market for less than a month. The NAR has said it expects the market will remain tight until more institutional investors list their properties and more homeowners agree to sell their houses. (Bloomberg) Chicago-area Business Activity Grows Slightly Faster in April Chicago-area business activity grew at a slightly faster rate in the month of April, according to a report released by MNI Indicators. MNI Indicators said its Chicago business barometer crept up to 57.6 in April from 57.4 in March, with a reading above 50 indicating growth. Economists had expected the barometer to inch up to 57.9. The uptick by the business barometer came as the production index rose for the first time in four months, reaching its highest level since February. On the other hand, the new orders index extended the downward momentum shown since the turn of the year, hitting a 15-month low in April. MNI Indicators said firms' hiring intentions also moderated in April, with the employment index falling to a six-month low. (RTT) Page 7 of 9
10. 2-May-18 Europe and Uni ted Kingdom UK Factory Sentiment Sinks to 17-Month Low Activity in the UK manufacturing sector slowed at the start of the second quarter of the year , according to the latest survey of purchasing managers working in the sector. The UK manufacturing purchasing managers’ index fell to a 17-month low of 53.9 in April, down from 54.9 in March. Anything above 50 indicates expansion. Analysts had expected a reading of 54.8, according to a poll conducted before the data were released by Thomson Reuters. Britain’s manufacturing sector has expanded in each of the past 21 months, the surveys have said. Partly because of strong global growth and a competitive boost from the slide in the value of Britain’s currency. The slowdown in the UK follows data from the eurozone, which has also pointed to an easing of the rate of growth in the manufacturing sector at the start of 2018. Flash PMI estimates, also published last week, indicated that the rate of growth in the currency bloc’s manufacturing sector fell to a 14-month low, as exporters suffered from a strong euro and trade tension between China and the US. (Financial Times) Eurozone M3 Growth Eases More than Forecast Eurozone supply growth eased at a faster-than-expected pace in March, figures from the European Central Bank showed. The broad monetary aggregate M3 climbed 3.7% year-onyear in March, weaker than the 4.2% rise seen in February. The expected growth was 4.0%. The narrow measure, M1, which includes currency in circulation and overnight deposits, rose 7.5% after rising 8.4% in the previous month. Data showed that annual growth in credit to the private sector slowed to 2.5% from 2.8% in February. The adjusted loans to the private sector gained 3.0%. Loans to household logged an increase of 3.0% and that to non-financial corporations climbed 3.3% versus 3.2% in February. (RTT) German Inflation Steady in April Germany's consumer price inflation remained unchanged in April, defying expectations for a modest slowing, while the harmonized figure eased. The consumer price index rose 1.6% year-on-year, same as in March, preliminary data from Destatis showed. Economists had expected the rate to drop to 1.5%. Energy price inflation more than doubled to 1.2% from 0.5% and food inflation accelerated to 3.4% from 2.9%. On a month-on-month basis, the CPI remained unchanged in April, while economists had expected the index to drop 0.1 percent. The harmonized index of consumer prices, or HICP, rose 1.4% from a year ago, after a 1.5% increase in March. Economists had expected the rate to remain unchanged. (RTT) Page 8 of 9
11. 2-May-18 Share Buy-Back 30-April 2018 Company AMPROP CHINWEL FIAMMA FIMACOR GBGAQRS GRANFLO HAIO JAYCORP KFIMA KOMARK LIENHOE N2N RCECAP SIGN SNTORIA SYSCORP YILAI Bought Back 30 ,200 12,800 14,000 3,000 60,400 10,000 18,500 150,000 3,100 27,500 22,500 787,900 50,000 140,000 40,000 478,000 6,100 Price (RM) Hi/ Lo (RM) 0.665/0.66 1.61 0.465/0.455 1.92 1.68/1.67 0.22 4.97/4.94 0.90 1.48 0.18 0.34 0.995/0.965 1.30/1.29 0.525/0.52 0.57 0.25/0.245 0.72 0.665/0.66 1.61 0.465/0.435 1.93/1.92 1.69/1.66 0.22 4.98/4.68 0.945/0.90 1.48/1.47 0.175/0.17 0.345/0.34 1.00/0.96 1.31/1.29 0.53/0.52 0.575/0.57 0.25/0.24 0.72 Total Treasury Shares 17,703,400 5,030,800 24,039,000 4,597,200 861,402 9,629,000 9,294,988 1,192,900 473,500 7,672,500 20,464,100 20,254,600 14,660,425 13,807,100 8,265,800 6,974,800 11,504,108 Source: Bursa Malaysia Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 9 of 9
12. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD 27-Apr-18 AUTOMOBILE BAUTO 2.22 2.33 5.0% Buy 2,573 0.60 12.1 19.0 18.3 11.7 4.9 5.2 2.47 -10.1 1.84 20.7 MBMR 2.39 2.68 12.1% Hold 934 0.74 24.7 26.9 9.7 8.9 2.5 2.9 2.60 -8.1 2.01 18.9 0.9 8.6 PECCA 1.15 1.62 40.9% Buy 212 0.68 9.7 10.9 11.9 10.5 4.3 4.3 1.70 -32.4 1.12 2.7 -25.8 SIME 2.67 2.55 -4.5% Sell 18,158 1.73 13.2 16.4 20.3 16.3 1.2 1.5 3.06 -12.7 2.03 31.8 20.8 UMW 6.11 5.52 -9.7% Sell 7,138 1.37 28.6 40.2 21.3 15.2 2.3 3.3 6.98 -12.5 4.70 30.0 17.5 BANKS & FINANCIAL SERVICES ABMB 4.35 4.60 5.7% Sell 6,734 1.18 32.6 35.8 13.3 12.1 3.7 3.7 4.49 -3.1 3.62 20.2 6.6 AFFIN 2.52 2.40 -4.8% Sell 4,896 0.93 22.2 23.9 11.3 10.5 3.2 3.2 2.98 -15.0 2.22 13.9 9.5 AMBANK 3.90 4.70 20.5% Buy 11,755 1.59 38.1 44.4 10.2 8.8 4.6 4.6 5.70 -31.6 3.61 8.0 -11.6 CIMB 7.20 8.60 19.4% Buy 66,424 1.58 58.2 59.9 12.4 12.0 4.0 4.2 7.39 -2.6 5.71 26.1 10.1 HLBANK 19.00 21.30 12.1% Buy 38,866 0.90 116.8 126.8 16.3 15.0 2.5 2.5 20.02 -5.1 13.74 38.3 11.8 MAYBANK 10.78 11.50 6.7% Buy 117,725 0.97 73.6 77.7 14.7 13.9 5.1 5.1 10.84 -0.6 9.10 18.5 10.0 PBBANK 23.80 27.30 14.7% Buy 91,904 0.73 153.3 166.5 15.5 14.3 2.4 2.5 24.50 -2.9 19.90 19.6 14.5 RHBBANK 5.30 6.10 15.1% Buy 21,253 1.52 54.3 59.0 9.8 9.0 2.8 2.8 5.61 -5.5 4.71 12.5 6.0 BURSA 7.22 8.07 11.8% Buy 5,821 0.93 29.2 30.0 24.7 24.1 3.3 3.3 7.65 -5.7 6.31 14.4 7.0 ANNJOO 2.96 4.34 46.6% Buy 1,585 1.23 42.2 45.0 7.0 6.6 7.3 8.4 3.98 -25.6 2.80 5.7 -23.3 CHINHIN 1.08 1.32 22.2% Buy 601 0.94 10.7 10.5 10.1 10.3 5.7 5.0 1.49 -27.5 1.00 8.5 -10.7 CSCSTEL 1.36 1.70 25.0% Buy 502 0.88 17.4 17.9 7.8 7.6 6.9 7.0 2.05 -33.5 1.27 7.1 -11.7 ENGTEX 0.98 1.38 41.5% Buy 425 0.92 13.8 15.7 7.0 6.2 4.2 5.6 1.52 -35.9 0.96 1.6 -11.4 GADANG 0.82 1.34 64.4% Buy 539 1.42 14.0 16.6 5.8 4.9 3.7 3.7 1.37 -40.5 0.80 1.9 -26.6 GAMUDA 5.14 5.84 13.6% Buy 12,655 0.84 34.4 36.4 14.9 14.1 2.3 2.3 5.52 -6.9 4.58 12.2 3.6 IJM 2.98 2.96 -0.7% Hold 10,811 1.42 13.7 18.2 21.7 16.4 3.2 3.2 3.60 -17.2 2.53 17.8 -2.3 BUILDING MATERIALS CONSTRUCTION KAB 0.23 0.38 66.7% Buy 7 na 31.4 37.3 0.7 0.6 4.4 5.3 0.33 -31.8 0.20 12.5 -25.0 PESONA 0.30 0.45 50.0% Buy 208 1.62 5.0 4.5 6.0 6.6 5.0 5.0 0.73 -58.6 0.30 1.7 -33.3 SENDAI 0.88 0.79 -10.2% Sell 687 1.63 9.9 8.7 8.9 10.1 1.1 1.1 1.39 -36.7 0.68 29.4 1.7 SUNCON 2.25 2.65 17.8% Hold 2,908 0.80 14.7 16.4 15.3 13.7 3.6 4.0 2.64 -14.8 1.92 17.2 -10.4 WCT 1.23 1.50 22.0% Sell 1,730 1.08 11.3 10.8 10.9 11.4 2.4 2.4 2.48 -50.3 1.13 8.8 -24.1 LITRAK 5.45 6.26 14.9% Hold 2,877 0.32 45.6 47.1 11.9 11.6 4.6 4.6 6.15 -11.4 5.37 1.5 -1.8 CARLSBG 19.78 18.09 -8.5% Buy 6,085 0.59 87.8 91.8 22.5 21.5 4.3 4.5 21.00 -5.8 14.36 37.7 29.3 HEIM 20.48 21.64 5.7% Hold 6,187 0.49 93.0 101.6 22.0 20.2 3.7 3.9 23.04 -11.1 17.30 18.4 8.4 AEON 2.02 1.97 -2.5% Buy 2,836 0.28 7.5 8.9 26.8 22.6 2.2 2.5 2.50 -19.2 1.45 39.3 14.8 AMWAY 7.62 8.59 12.7% Buy 1,253 0.55 48.3 49.9 15.8 15.3 5.2 5.4 8.10 -5.9 6.97 9.3 4.3 F&N 35.96 33.74 -6.2% Buy 13,181 0.48 122.7 145.8 29.3 24.7 2.2 2.6 36.50 -1.5 23.40 53.7 33.2 CONSUMER Brewery Retail HUPSENG 1.08 1.25 15.7% Buy 864 0.41 5.7 5.9 18.9 18.3 5.6 5.6 1.28 -15.6 1.02 5.9 -0.9 JOHOTIN 0.94 1.48 58.3% Buy 290 1.23 11.1 11.7 8.4 8.0 6.4 7.0 1.76 -46.9 0.90 3.9 -22.7 NESTLE 138.00 129.90 -5.9% Sell 32,361 0.66 322.2 360.2 42.8 38.3 2.2 2.4 163.00 -15.3 81.00 70.4 33.7 PADINI 4.25 4.67 9.9% Sell 2,796 0.94 28.0 30.4 15.2 14.0 2.9 3.1 5.50 -22.7 3.17 34.2 -19.5 -31.3 POHUAT 1.23 1.78 44.7% Buy 270 0.56 20.1 23.1 6.1 5.3 4.9 6.5 2.07 -40.5 1.15 7.0 QL 5.14 5.41 5.3% Hold 8,339 0.64 13.3 15.5 38.5 33.1 0.9 0.9 5.24 -1.9 3.65 41.0 18.2 SIGN 0.53 0.92 75.2% Buy 119 0.92 6.6 8.7 7.9 6.0 4.8 6.7 1.04 -49.5 0.48 9.4 -25.5 24.50 34.72 41.7% Buy 6,995 1.38 170.8 168.8 14.3 14.5 6.5 6.5 46.44 -47.2 22.62 8.3 -38.8 GENTING 8.93 11.58 29.7% Buy 34,216 1.33 54.1 60.6 16.5 14.7 1.8 1.8 9.92 -10.0 8.47 5.4 -2.2 GENM 5.13 6.68 30.2% Buy 29,029 1.50 27.6 32.0 18.6 16.0 2.3 2.5 6.28 -18.3 4.59 11.8 -7.4 2.10 3.22 53.3% Buy 2,829 0.58 19.9 26.0 10.6 8.1 7.6 8.6 2.83 -25.8 2.06 1.9 -6.3 CCMDBIO 2.90 3.40 17.2% Buy 809 0.82 16.2 17.7 17.9 16.4 1.6 1.7 3.05 -4.9 1.97 47.2 14.6 IHH 6.08 6.40 5.3% Sell 50,097 0.70 11.9 15.0 51.2 40.7 0.5 0.6 6.33 -3.9 5.42 12.2 3.8 KPJ 0.93 1.13 22.2% Buy 3,898 0.61 3.9 4.3 23.7 21.3 2.3 2.6 1.14 -18.9 0.84 10.1 -4.6 HARTA 5.87 7.80 32.9% Sell 19,441 0.95 12.6 14.4 46.7 40.7 1.3 1.5 6.64 -11.6 2.45 139.6 9.9 KOSSAN 6.69 9.73 45.4% Buy 4,278 0.66 37.4 42.1 17.9 15.9 2.8 3.1 8.79 -23.9 5.62 19.0 -17.5 Tobacco BAT GAMING Casino NFO BJTOTO HEALTHCARE Hospitals/ Pharmaceutical Rubber Gloves SUPERMX 2.90 2.70 -6.9% Buy 1,901 0.64 20.0 22.6 14.5 12.8 1.8 2.1 3.01 -3.7 1.69 71.6 45.0 TOPGLOV 9.51 12.20 28.3% Buy 12,147 0.60 35.3 42.7 26.9 22.3 1.5 1.8 10.44 -8.9 4.57 108.1 19.0 KAREX 0.77 0.93 21.6% Sell 767 0.76 1.8 3.0 43.2 25.3 0.6 1.0 2.26 -66.2 0.75 2.0 -41.2 SCIENTX 7.61 10.01 31.5% Buy 3,721 0.93 67.5 79.4 11.3 9.6 2.8 3.4 9.85 -22.7 7.45 2.1 -12.1 SKPRES 1.49 2.00 34.2% Buy 1,863 0.93 10.4 14.8 14.4 10.1 3.5 5.0 2.35 -36.6 1.25 19.2 -34.6 ASTRO 1.91 2.90 51.8% Buy 9,959 0.98 12.4 13.8 15.3 13.8 6.5 6.5 2.94 -35.0 1.75 9.1 -27.9 MEDIA PRIMA 0.32 0.45 40.6% Sell 355 1.39 -3.8 -1.7 na na 0.0 0.0 1.20 -73.3 0.29 10.3 -57.9 STAR 1.10 1.20 9.1% Sell 812 1.15 6.2 5.9 17.7 18.6 8.2 8.2 2.22 -50.4 1.04 5.8 -33.3 INDUSTRIAL MEDIA
13. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.40 0.69 72.5% Buy 703 2.00 4.0 4.3 10.1 9.3 2.5 2.5 0.69 -42.0 0.34 19.4 -17.5 LCTITAN 5.71 7.47 30.8% Buy 12,979 na 47.8 50.7 11.9 11.3 3.7 4.0 6.53 -12.6 4.14 37.9 21.5 MHB 0.79 0.81 2.5% Sell 1,264 1.44 0.5 1.7 164.5 47.4 0.0 0.0 1.02 -22.5 0.63 26.4 -4.2 MISC 7.16 7.00 -2.2% Sell 31,961 1.05 50.1 53.8 14.3 13.3 4.2 4.2 7.90 -9.4 6.73 6.4 -3.5 PANTECH 0.59 0.77 30.5% Buy 439 1.43 6.4 7.0 9.3 8.5 4.2 4.6 0.74 -20.3 0.51 15.7 -8.5 PCHEM 8.45 9.00 6.5% Hold 67,600 0.84 52.5 53.8 16.1 15.7 3.1 3.1 8.65 -2.3 6.80 24.3 9.7 SAPNRG 0.64 0.84 31.3% Buy 3,835 2.95 -5.0 -1.7 na na 0.0 0.0 2.02 -68.3 0.40 62.0 -9.9 SERBADK 3.33 4.15 24.6% Buy 4,890 na 27.7 31.5 12.0 10.6 2.7 3.0 3.68 -9.5 1.79 86.0 2.8 UMWOG 0.27 0.39 44.4% Buy 2,218 2.59 0.4 1.2 70.7 23.3 0.0 0.0 0.68 -60.2 0.22 25.6 -11.5 UZMA 1.35 1.57 16.3% Hold 432 1.25 12.9 13.9 10.5 9.7 0.0 0.0 1.87 -27.8 1.18 14.4 5.5 FGV 1.71 2.09 22.2% Buy 6,238 1.65 2.0 3.4 84.6 50.2 2.9 2.9 2.18 -21.6 1.51 13.2 1.2 IJMPLNT 2.34 2.23 -4.7% Sell 2,061 0.23 6.5 8.2 35.8 28.5 3.4 3.8 3.22 -27.3 2.19 6.8 -14.6 IOICORP 4.79 5.43 13.4% Buy 29,249 0.92 19.0 21.3 25.2 22.5 5.5 3.5 4.81 -0.4 4.21 13.9 8.1 KFIMA 1.48 1.89 27.7% Buy 417 0.70 13.7 13.8 10.8 10.7 6.1 6.1 1.96 -24.5 1.44 2.8 -5.7 KLK 25.48 27.76 8.9% Hold 27,135 0.60 107.6 116.0 23.7 22.0 2.1 2.2 25.98 -1.9 23.80 7.1 1.9 SIMEPLT 5.57 6.27 12.6% Hold 37,881 na 19.6 20.0 28.4 27.9 2.5 2.9 6.00 -7.2 4.58 21.6 -7.2 TSH 1.29 1.81 40.3% Buy 1,781 0.47 9.3 9.6 13.9 13.4 1.9 1.9 1.82 -29.1 1.26 2.4 -21.8 UMCCA 6.10 6.21 1.8% Sell 1,279 0.39 17.0 22.4 36.0 27.3 2.6 3.0 7.08 -13.8 5.97 2.1 -6.3 GLOMAC 0.49 0.40 -18.4% Sell 389 0.66 1.5 2.5 32.4 19.8 2.0 2.0 0.65 -24.1 0.45 8.9 -11.6 HUAYANG 0.48 0.58 22.1% Sell 167 0.93 0.7 3.4 71.6 14.0 1.1 1.1 1.12 -57.6 0.44 8.0 -22.1 IBRACO 0.73 0.80 9.6% Buy 362 na 7.2 10.7 10.1 6.8 4.1 5.5 0.92 -20.7 0.50 46.0 -10.4 IOIPG 1.56 1.92 23.1% Buy 8,590 0.94 14.9 14.7 10.5 10.6 3.8 3.8 2.22 -29.7 1.50 4.0 -15.7 MAHSING 1.02 1.59 55.9% Buy 2,476 0.93 11.8 11.3 8.6 9.1 6.4 6.4 1.64 -37.8 0.98 4.1 -29.7 SIMEPROP 1.50 1.51 0.7% Hold 10,201 na 7.5 7.5 20.0 20.0 2.7 2.0 1.78 -15.7 1.04 44.2 -15.7 SNTORIA 0.57 0.76 33.3% Buy 319 0.36 8.3 8.6 6.9 6.6 1.8 1.8 0.82 -30.3 0.56 1.8 -18.0 SPB 4.21 5.10 21.1% Hold 1,447 0.69 18.7 24.0 22.5 17.5 2.9 2.9 5.50 -23.5 4.14 1.7 -14.1 SPSETIA 3.19 3.73 16.9% Buy 12,409 1.10 19.8 19.4 16.1 16.4 3.8 3.8 4.38 -27.2 2.77 15.2 -20.3 SUNWAY 1.51 1.75 15.9% Hold 7,357 1.02 11.8 12.4 12.8 12.1 4.0 4.0 1.96 -22.9 1.46 3.4 -7.4 SUNREIT 1.61 1.87 16.1% Hold 4,742 1.01 10.0 10.7 16.1 15.1 6.2 6.6 1.90 -15.3 1.48 8.8 -15.3 CMMT 1.14 1.48 29.8% Buy 2,326 0.97 7.9 8.4 14.4 13.6 7.1 7.5 1.83 -37.7 0.98 16.3 -37.7 PLANTATIONS PROPERTY REIT POWER & UTILITIES MALAKOF 0.91 0.82 -9.4% Sell 4,470 1.04 6.7 7.3 13.6 12.5 7.7 7.7 1.27 -28.7 0.85 6.5 -7.7 PETDAG 27.00 24.08 -10.8% Sell 26,823 0.61 114.7 116.3 23.5 23.2 3.2 3.2 28.18 -4.2 20.81 29.7 12.3 PETGAS 17.82 19.46 9.2% Buy 35,261 0.90 99.3 100.0 18.0 17.8 3.9 3.9 19.80 -10.0 15.82 12.6 1.9 TENAGA 15.84 18.22 15.0% Buy 89,942 0.60 131.3 127.5 12.1 12.4 4.1 4.0 16.34 -3.1 13.72 15.5 3.8 YTLPOWR 0.92 1.16 26.1% Sell 7,295 0.90 8.5 8.7 10.9 10.5 5.4 5.4 1.50 -38.7 0.92 0.5 -28.7 TELECOMMUNICATIONS AXIATA 5.30 6.50 22.6% Buy 47,964 1.61 15.9 19.4 33.3 27.3 1.5 3.0 5.82 -8.9 4.54 16.7 -3.5 DIGI 4.63 5.15 11.2% Buy 35,998 0.91 19.6 20.2 23.6 22.9 4.2 4.4 5.13 -9.7 4.36 6.2 -9.2 MAXIS 5.83 5.95 2.1% Sell 45,536 1.05 24.9 24.8 23.4 23.5 3.4 3.4 6.60 -11.7 5.30 10.0 -3.0 TM 5.30 7.20 35.8% Buy 19,917 0.68 22.8 24.9 23.2 21.3 3.9 4.2 6.69 -20.8 4.90 8.2 -15.9 ELSOFT 2.48 3.30 33.1% Buy 683 0.91 13.1 14.9 18.9 16.6 3.7 4.2 2.95 -15.9 2.22 11.7 -8.1 IRIS 0.17 0.22 33.3% Buy 408 2.49 0.0 0.3 599.8 52.1 0.0 0.0 0.25 -32.7 0.14 22.2 -10.8 INARI 1.72 2.40 39.5% Buy 5,356 0.62 9.1 10.2 18.9 16.9 3.7 4.2 2.55 -32.5 1.32 30.6 -24.1 MPI 7.80 10.70 37.2% Buy 1,551 1.11 73.9 86.9 10.6 9.0 4.1 4.1 14.52 -46.3 7.60 2.6 -38.2 UNISEM 1.80 2.75 52.8% Buy 1,321 1.43 13.1 18.6 13.7 9.7 6.1 6.1 4.25 -57.6 1.78 1.1 -50.7 TECHNOLOGY Semiconductor & Electronics TRANSPORTATION Airlines AIRASIA 3.85 4.93 28.1% Hold 12,867 0.86 41.0 41.0 9.4 9.4 2.1 2.1 4.75 -18.9 2.89 33.2 14.9 AIRPORT 9.01 8.61 -4.4% Sell 14,949 1.06 18.0 18.8 50.1 47.9 1.4 1.1 9.45 -4.7 7.65 17.8 2.5 Freight & Tankers PTRANS 0.25 0.46 87.8% Buy 311 na 2.3 3.7 10.6 6.6 2.8 4.5 0.38 -35.8 0.23 8.9 -12.5 TNLOGIS 1.09 1.45 33.0% Buy 497 1.05 12.0 12.3 9.1 8.8 4.6 4.6 1.79 -39.2 0.99 10.1 -18.7 WPRTS 3.34 4.06 21.6% Buy 11,389 0.42 15.6 20.0 21.4 16.7 3.5 4.5 4.06 -17.7 3.12 7.1 -9.7 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) % upside Recom Market Cap. (S$m) Beta EPS (cent) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52week 52week % Chg High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 30.84 36.10 17.1% Buy 79,070 1.15 212.3 246.0 14.5 12.5 2.1 2.3 31.0 -0.5 19.45 58.6 24.1 OCBC 13.80 14.30 3.6% Buy 57,719 1.18 109.6 123.3 12.6 11.2 6.7 7.7 13.9 -1.0 9.88 39.7 11.4 UOB 30.14 27.80 -7.8% Hold 50,058 1.17 216.8 244.2 13.9 13.9 2.7 2.7 30.4 -0.8 21.89 37.7 14.7 PLANTATIONS WILMAR 3.26 3.50 7.4% Buy 20,859 0.84 25.4 27.7 12.8 11.8 3.1 3.4 3.9 -15.8 2.97 9.8 5.5 IFAR 0.32 0.37 15.6% Buy 459 1.02 3.1 3.9 10.5 8.3 1.3 1.7 0.5 -37.9 0.32 1.6 -17.9 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.
14. SECTOR UPDATE Wednesday , May 02, 2018 FBMKLCI: 1,870.37 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Banking Sector Overweight (Maintained) Moderate Loan Growth in March Li Hsia Wong Tel: +603-2167 9610 liwong@ta.com.my www.taonline.com.my Loans and Advances Up 4.4% YoY Total loans and advances expanded at a softer pace of 4.4% in March, little changed compared with the 4.5% YoY increase registered in February. Loan growth was mostly underpinned by the consumer segment, which accelerated by 5.9% (Feb 2018: +6.0% YoY). Accounting for some 55% of total loans in the system, the increase in consumer loans was largely supported by residential mortgages, which climbed 8.9% YoY (+0.6% MoM) and personal loans (+5.4% YoY, +0.9% MoM). Loans for the purchase of passenger cars remained lacklustre, contracting by another 1.1% YoY (-0.3% MoM). Advances for credit cards was encouraging, widening at a healthier pace of 3.9% YoY (-1.2% MoM) vs. an increase on 3.8% in February. Easier Business Loans Business loans broadened at a softer pace of 2.6% YoY (+0.4% MoM) vs. 2.8% in February. We estimate that SME loans widened by some 0.9% YoY while other business loans led the segment with 3.4% YoY and 0.5% MoM increase. By sub-segment, we note yearly demand for working capital decelerating further to 0.3% YoY (vs. +0.7% YoY in February). By sector, sustained contractions in mining and quarrying (-11.4% YoY) as well as softer loans drawn down in the manufacturing (-0.4% YoY), transport, storage and communications (-10.4% YoY), education and health (-5.0% YoY), finance, insurance and business activities (-1.6% YoY) muted stronger yearly increases in wholesale and retail trade (+2.0% YoY), electricity, gas and water supply (+18.9% YoY), construction (+15.2% YoY) and real estate (+5.8% YoY). Meanwhile, we note that larger corporates continue to turn to the capital market for funds as net funds raised by the private sector via issue of new shares and new issue of debt securities (excluding redemptions) ballooned to RM59.8bn YTD vs. RM61.2bn a year ago. Applications and Approvals Surged MoM YoY loan applications stood little changed in March but surged 33% MoM - after slipping 5.8% YoY and 22.9% MoM in February due to the holiday shortened month. Coming from a decline in February, business loans climbed 10.3% YoY and 36.3% MoM. Applications in the consumer segment however, slipped 7.5% YoY but remained robust sequentially (+30.2% MoM). Compared to a year ago, applications to buy residential mortgages (-11.4% YoY, +43.7% MoM), for credit cards (-26.1% YoY, +24.5% MoM) and loan to buy passenger cars (-10.2% YoY, +26.5% MoM) widened on a MoM basis. Meanwhile, applications for personal loans strengthened, widening 20.0% YoY (+34.0% MoM). Total loans approved sank 7.6% YoY (+33.2% MoM). Softer YoY loan approvals were premised on decreases in both the business (-9.5% YoY, +56.2% MoM) and consumer (-5.9% YoY, +18.6% MoM) segments. Consumer approvals slipped on a YoY basis after rising for 5 consecutive months till February. The overall approval rate stood unchanged at 43.3% as better business approval rate (Mar 2018: 42.1%, Feb 2018: 36.7%) was muted by a decrease in the consumer segment (Mar 2018: 44.4%, Feb 2018: 48.7%). By major sub-segments, approval for the purchase of residential properties and non-residential properties stood at 41.2% and 30.8% vs. 46.0% and 31.3% in February 2018. Page 1 of 3
15. 2-May-18 Loan Repayments Improved Yearly repayments strengthened , rising 0.3% YoY (+16.9% MoM) in March. The ratio of net impaired loan to net total loan for the system stood at 0.99%. During the month, the gross impaired loans (GIL) ratios for non-residential properties deteriorated by 10 bps to 1.3% while residential properties stood unchanged at 1.1%. Meanwhile, the GIL ratio for the purchase of passenger cars, personal loans and credit cards improved by some 10 bps to 0.8%, 2.1% and 1.1%. Deposits Strengthened on Higher CASA, Average Lending Rates Widened Total deposits (excl. Repo) advanced by 4.9% YoY (+1.8% MoM). CASA balances in commercial banks maintained its yearly upward momentum for the 17th month, increasing 6.4% YoY. The CASA ratio climbed to 27.2% from 26.8% a year ago. The liquidity coverage ratio (LCR) ratio strengthened to 141% (Feb 2018: 134%) while the loan to fund ratio stood at 82.4%. The average lending rate improved 2 bp MoM to 5.43% - we believe partly attributed to the OPR increase. Elsewhere, the banking system’s capital buffers remained ample with CET1 and Total Capital Ratio of 13.2% and 17.5%. Maintain 2018 Loan Growth at 4.8% We maintain our 2018 loan growth forecast at 4.8%, underpinned by a 5.3% increase in consumer loans and 4.2% increase in business loans. We foresee business related drawdowns to improve as many adopt the wait-and-see attitude before investing due to the upcoming general election. We reiterate our OVERWEIGHT stance on the sector. Warranting potential upwards earnings revisions: 1) business loans could accelerate post GE on the back of improvement in optimism, 2) recent OPR hike to help ease competitive pressures on NIM, and 3) continued resilience in asset quality as many Malaysian banks do not expect the MFRS 9 to have material impact to the bottomline and capital positions. Muting growth prospects, we foresee more easing in consumer loans as car sales and the property market are expected to remain dull. Peers Comparison Price TP Capital upside Mkt Cap FY17 Profit growth FY18 FY19 FY17 PER FY18 (RM) (RM) (%) RM mil (%) (%) FY19 (%) (x) (x) (x) Maybank CIMB 10.78 7.20 11.50 8.60 6.7% 19.4% BUY BUY 116,847 66,424 11.5 25.6 6.8 20.0 5.6 2.9 15.5 14.8 14.5 12.4 13.8 12.0 Public Bank 23.80 27.30 14.7% BUY 91,904 Hong Leong AMMB 19.00 3.90 21.30 4.70 12.1% 20.5% BUY BUY 38,865 11,755 5.1 8.2 8.6 16.8 15.5 14.3 12.7 1.7 11.4 (13.3) 8.6 16.4 18.1 8.9 16.3 10.2 15.0 8.8 RHB Bank 5.30 6.10 15.1% BUY 21,253 16.0 11.7 8.6 10.9 9.8 9.0 Alliance 4.35 4.60 5.7% SELL 6,734 (1.9) (1.3) 9.8 13.1 13.3 12.1 Affin 2.52 2.40 -4.8% SELL 4,896 (10.0) 3.4 7.6 11.7 11.3 10.5 44,835 11.4 9.1 6.8 13.7 12.9 11.9 Simple average FY17 P/BV FY18 FY19 FY17 ROE FY18 FY19 FY17 ROA FY18 FY19 FY17 Div yield FY18 (x) (x) (x) (%) (%) (%) (%) (%) (%) (%) (%) (%) Maybank CIMB 1.5 1.4 1.5 1.3 1.4 1.2 10.6 9.6 10.7 10.8 10.6 10.4 1.0 0.9 1.0 1.0 1.0 1.0 5.1% 3.5% 5.1% 4.0% 5.1% 4.2% Public Bank 2.5 2.3 2.1 15.3 15.2 15.1 1.4 1.5 1.5 2.6% 2.6% 2.7% Hong Leong AMMB 1.7 0.7 1.6 0.7 1.5 0.7 9.8 8.5 10.2 7.0 10.4 7.8 1.1 1.0 1.2 1.1 1.3 0.9 2.4% 4.5% 2.4% 4.6% 2.4% 4.6% FY19 RHB Cap 0.9 0.9 0.8 8.7 9.1 9.1 0.8 0.9 1.0 2.8% 2.8% 2.8% Alliance 1.3 1.3 1.2 10.8 10.1 10.6 0.9 0.9 0.9 3.7% 3.7% 3.7% Affin 0.6 0.6 0.6 5.9 5.8 6.3 0.6 0.6 0.6 3.2% 3.2% 3.2% Simple average 1.3 1.3 1.2 Source: TA Research, Bursa Malaysia, Bloomberg 9.9 9.9 10.0 1.0 1.0 1.0 3.5% 3.6% 3.6% Page 2 of 3
16. 2-May-18 (TH I S P A GE IS IN TE N TI ON AL L Y L E F T B L AN K ) (THIS PAGE IS INTENTIONALLY LEFT BLANK) Sector Recommendation Guideline OVERWEIGHT: The industry, as per our coverage universe, is expected to outperform the FBMKLCI over the next 12 months. NEUTRAL: The industry, as per our coverage universe, is expected to perform in line with the FBMKLCI over the next 12 months. UNDERWEIGHT: The industry, as per our coverage universe, is expected to underperform the FBMKLCI over the next 12 months. Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Wednesday, May 02, 2018, the analyst, Wong Li Hsia, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
17. RESULTS UPDATE Wednesday , May 02, 2018 STI: 3,613.93 Sector: Finance THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: S$36.10 (+17.1%) DBS Group Holdings Ltd Last Traded: S$30.84 Superb 1QFY18 Results Li Hsia Wong BUY Tel: +603-2167 9610 liwong@ta.com.my Review Representing 28% of our full year net profit, 1QFY18 results came within expectations. Coming out of a challenging year in terms of asset quality in 2017, DBS reported net profit of S$1,521mn, a steep 21% increase from a year ago. This translated to healthier ROE of 13.1% from 11.1% a year ago. Also improving sequentially, net profit advanced 27% QoQ, anchored by a combination of higher income (+10% QoQ) and allowances for credit and other losses falling to S$164mn from S$225mn in 4QFY17. Net interest income (NII) led growth with an increase of S$297mn. Accounting for 25% of our full year forecast, 1QFY18 NII climbed 16% YoY on the back of a 7.4% YoY increase in loan growth along with steady improvement in net interest margin (NIM). QoQ, NIM broadened by another 5 bps on repricing of loan and interbank asset yields, although part of the expansion was muted by an increase in deposit cost. Loans and advances expanded by some 10% YoY and 2% QoQ, underpinned by non-trade corporate and consumer loans. Housing loans and other consumer loans strengthened by around 14% and 22% YoY. Loans were also boosted by some S$1bn QoQ and S$9bn YoY from consolidation of ANZ’s retail and wealth business in Asia. Management noted that it commands a share of some 31% of Singapore housing loan market and 52% of SGD savings account. Rising 12% YoY, fee income was driven by the increase in wealth management fees from higher banca and other investment products. Asset under management (AUM) expanded to new quarterly high of S$208bn from S$170bn a year ago. As a result, income grew 28% YoY to S$663mn from S$516mn a year ago. Card fees also improved 12.4% YoY. By segment, investment banking income accelerated by 5% YoY on the back of higher cash management income, rise in new customer mandates, deeper customer relationships especially in the SME segment and higher NIM. Elsewhere, other non-NII rose 25% YoY and 52% QoQ due to higher trading income and to a gain of S$86mn from the divestment of a Hong Kong property. Overhead expenses climbed 12% YoY and 3% QoQ. Staff headcount jumped 15% YoY due to consolidation of ANZ. As a result, staff cost expanded by some 10% YoY. Excluding ANZ, underlying cost grew 6% and in line with business volume growth. The group’s cost-to-income (CTI) ratio stood little changed at 42%. Management attribute ongoing improvement due to productivity gains as efforts to digitize the bank and cost management initiatives takes effect. www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (S$mn) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta DBS SP D05 STI 2563.9 79,070.7 30.66/19.45 4,801.5 70.6 1.2 Major Shareholders (%) Temasek Holdings - 29.3 Capital Group - 3.4 Vanguard Group - 2.2 Forecast Revision Forecast Revision (%) Net profit (S$mn) Consensus (S$mn) TA's / Consensus (%) Previous Rating FY18 FY19 5443.8 6306.1 5677.0 6423.0 95.9 98.9 Hold (Downgraded) Financial Indicators ROE (%) Cost/Income (%) NPL ratio (%) Loan loss coverage (%) BV/ Share (S$) Price/ BV (x) FY18 11.1 42.6 1.4 88.4 20.4 1.5 FY19 11.1 42.6 1.4 90.1 22.3 1.4 % of FY 28.0 27.0 Within Within DBS 0.7 7.5 26.2 50.7 STI 0.4 2.7 5.3 12.6 Scorecard vs. TA vs. Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FSSTI Source: Bloomberg Total allowances for credit and other losses rose improved sequentially and yearly to S$164mn. Allowances for impaired loans and other credit Page 1 of 3
18. 2-May-18 exposures softened to S $162mn. The majority of the charges were for existing non-performing loans. Formation of new non-performing assets (NPAs) declined QoQ and YoY. We note an uptick in upgrades, recoveries and translation. Reflecting healthier asset quality, credit cost declined to 20 bps from 25 bps in 4QFY17 and 26bps a year ago. Headline NPL improved to 1.6%. Meanwhile, allowance coverage climbed to 90% from 85% in Dec 2017. Fully phased-in CET1 ratio remained well above regulatory requirements at 14.0% (FY17: 13.9%). DBS also reported ample liquidity with LCR and NSFR at 125% and 110% respectively. Impact No change to our earnings estimates Outlook Better prospects is envisaged for 2018, underpinned by broad based growth in loans and fee income. NIM are expected to widen going forward, on the back of a rising interest rates environment. We also foresee earnings to be driven by normalising credit costs and rising levels of productivity as digitalisation structurally improves returns. Management expects benign asset quality with new NPA formation at 4-year low. Valuation Rolling valuations forward to FY19, we raise TP to S$36.10 from S$30.50, valuing the stock at an implied FY18e PBV of 1.55x. BUY maintained on DBS. Table 1: Earnings Summary (S$mn) FYE Dec Net interest income Non-interest income Total operating income Operating expenses Operating profit Net profit EPS (cent) EPS growth (%) Gross div (cent) Dividend yield (%) FY16 FY17 FY18F FY19F FY20F 7305.0 4184.0 11489.0 4972.0 6517.0 4238.0 165.3 (4.8) 60.0 1.9 7791.0 4483.0 12274.0 5205.0 7069.0 4371.0 170.5 3.1 143.0 4.6 8358.6 5057.2 13415.8 5717.2 7698.6 5443.8 212.3 24.5 65.0 2.1 9142.7 5685.1 14827.9 6260.1 8567.7 6306.1 246.0 15.8 70.0 2.3 9624.2 6258.2 15882.4 6835.6 9046.8 6764.5 263.8 7.3 75.0 2.4 Page 2 of 3
19. 2-May-18 Table 2 : 1QFY18 Results Analysis (S$mn) 1Q 4Q FYE Dec FY17 FY17 Net interest income 1,831.0 2,097.0 Net fee and commission 665.0 636.0 income Other non-interest income 390.0 322.0 Total income 2,886.0 3,055.0 Operating expenses (1,248.0) (1,357.0) Profit before allowances 1,638.0 1,698.0 Allowances (200.0) (225.0) Profit before tax 1,438.0 1,473.0 Core net profit 1,210.0 1,218.0 One-time items 35.0 (24.0) Net profit 1,245.0 1,194.0 EPS (cent) 48.6 46.6 1Q FY18 QoQ YoY 2,128.0 744.0 1.5 17.0 16.2 11.9 YTD FY17 1,831.0 665.0 488.0 3,360.0 (1,398.0) 1,962.0 (164.0) 1,798.0 1,521.0 (10.0) 1,511.0 58.9 51.6 10.0 3.0 15.5 (27.1) 22.1 24.9 (58.3) 26.5 26.5 25.1 16.4 12.0 19.8 (18.0) 25.0 25.7 n.m. 21.4 21.4 390.0 2,886.0 (1,248.0) 1,638.0 (200.0) 1,438.0 1,210.0 35.0 1,245.0 48.6 YTD FY18 2,128.0 744.0 488.0 3,360.0 (1,398.0) 1,962.0 (164.0) 1,798.0 1,521.0 (10.0) 1,511.0 58.9 YoY 16.2 11.9 25.1 16.4 12.0 19.8 (18.0) 25.0 25.7 n.m. 21.4 21.4 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. As of Wednesday, May 02, 2018, the analyst, Wong Li Hsia, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
20. RESULTS UPDATE Wednesday , May 02, 2018 FSSTI: 3,613.93 Sector: Plantation THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: SGD0.37 (+15.6%) Indofood Agri Resources Ltd Last Traded: SGD0.32 1QFY18 Results Broadly In-line Angeline Chin Tel: +603-2167 9611 BUY angelinechin@ta.com.my Review Indofood Agri Resources' (IFAR) 1QFY18 results came in within our but below consensus expectations. Stripping out the impact of foreign exchange, fair value gains on biological assets and other exceptional items of Rp41.2bn, 1QFY18 core net profit decreased by 63.5% YoY to Rp91.0bn. This only accounted for 20.1% and 18.6% of ours and consensus’ full-year estimate, respectively. Plantation: 1QFY18 revenue decreased by 34.2% YoY to Rp1.8tn, dragged by lower average selling prices and sales volume of palm products and rubber. CPO production declined by 24.7% to 171k tonnes as a result of lower production and different timing of sales. To recap, in 1QFY17, there were 19,000 tonnes of sales realisation from year-end CPO stock. The average selling price of CPO and PK in 1QFY18 decreased by 11.3% and 20.5% to Rp7,823/kg and Rp6,992/kg, respectively. EBITDA stood at Rp492bn, down 49.2% YoY. Edible Oils & Fats (EOF): 1QFY18 EBITDA decreased by 35.8% YoY to Rp52bn on the back of lower revenue (-6.4% YoY). The lower revenue was mainly due to lower edible oil selling price arising from lower CPO costs. Associated companies registered a higher loss of Rp6bn (vs 1QFY17: Rp249mn) in 1QFY18, mainly came from AAM (engages in property operation) and FPNRL (operates mainly sugar business in the Philippines). Meanwhile, the 50%-owned JV, CMAA, reported lower losses of Rp3bn compared to Rp43bn thanks to higher ethanol and sugar sales. Impact No change to our earnings forecasts Outlook Management expects FFB productions to increase by 5% - 10% in FY18. Besides, the expansion of Surabaya refinery is now completed. It will increase the CPO refinery capacity by 300,000 tonnes/annum. Management expects commodity prices to remain volatile. However, the group’s operations will continue to be supported by a stable domestic consumption. www.taonline.com.my Share Information Bloomberg Code IFAR SP Stock Code 5JS Listing SGX Mainboard Share Cap (mn) 1,417 Market Cap (SGDm) 454 52-wk Hi/Lo (SGD) 0.515/0.315 12-mth Avg Daily Vol ('000 shrs) 485 Estimated Free Float (%) 25.2 Beta 1.02 Major Shareholders (%) Indofood Singapore Holdings (74.34) Forecast Revision Forecast Revision (%) Net profit (Rp bn) Consensus (Rp bn) TA's / Consensus (%) Previous Rating FY18 FY19 451.4 572.4 490.5 605.2 92.0 94.6 Buy (Maintained) Financial Indicators Net debt/equity (%) CFPS (SGD) P/CFPS (x) ROA (%) NTA/Share (SGD) Price/ NTA (x) FY18 57.9 5.8 5.5 1.2 0.7 0.5 FY19 52.2 (0.3) nm 1.5 0.7 0.5 % of FY 20 19 Within Below IFAR 0.0 (17.9) (28.9) (34.7) FSSTI 5.4 1.9 6.6 13.8 Scorecard vs TA vs Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBMKLCI Valuation Maintain IFAR as BUY with an unchanged TP of SGD0.37 based on SOP valuation. Key risks to our forecast include, 1) sharp correction in CPO price, 2) lower demand growth for edible oil due to the global economy crisis, and 3) margin compression in the downstream segment. Source: Bloomberg Page 1 of 3
21. 2-May-18 Figure 1 : IFAR’s Sum-of-Part valuation table Valuation PT SIMP CMAA Associate Net cash (holding co) SOP (SGDmn) Share cap (mn) SOP/share Holding co discount Target price (SGD) Effective shareholding (%) 73.5% 50.0% 15.3% Figure 2: Earnings Summary FYE Dec 31 (Rp bn) Revenue EBITDA EBITDA margin Pretax profit Net profit Core net profit EPS Core EPS EPS Core EPS Core EPS growth PER GDPS Div yield Core ROE (%) (Rp) (Rp) (SG¢) (SG¢) (%) (x) (SGD¢) (%) (%) Equity Value (SGDmn) Note 542 57 15 (34) 580 1,417 0.41 10% 0.37 Based on CY19 PER of 16x Investment cost Market Price FY16 FY17 FY18F FY19F FY20F 14,530.9 3,557.5 24.5 1,689.5 506.5 298.3 349.9 206.0 3.4 2.0 (2.7) 16.0 0.7 2.0 2.6 15,826.6 3,075.7 19.4 1,138.2 447.3 535.6 309.0 370.0 3.0 3.6 79.6 8.9 0.7 2.0 4.5 15,937.3 3,151.3 19.8 960.5 451.4 451.4 311.8 311.8 3.0 3.0 (15.7) 10.6 0.4 1.3 3.7 16,873.2 3,396.1 20.1 1,217.9 572.4 572.4 395.4 395.4 3.8 3.8 26.8 8.4 0.5 1.6 4.5 17,749.5 3,468.4 19.5 1,325.7 623.1 623.1 430.4 430.4 4.2 4.2 8.9 7.7 0.6 1.8 4.7 Figure 3: 1QFY18 Results Analysis FYE Dec 31 (Rp bn) Turnover EBIT Net interest Forex & EI Associates & JV Biological assets gain/loss Pretax Taxation MI Reported net profit Core net profit Core EPS DPS EBIT Margin Pretax Margin Tax Rate 1QFY17 4,374.7 740.017 (135.0) (31.4) (43.4) (47.5) 482.8 (153.8) (158.4) 170.6 249.4 4QFY17 3,593.4 347.8 (130.3) (66.9) 19.2 73.6 243.5 (112.5) (54.0) 76.9 70.2 1QFY18 3,189.7 310.8 (129.8) (29.6) (8.6) (11.6) 131.2 (78.6) (2.7) 49.8 91.0 (Rp) (SG¢) 176 0.0 50 0.0 64 0.0 (%) (%) (%) 16.9 11.0 31.9 9.7 6.8 46.2 9.7 4.1 59.9 QoQ% (11.2) (10.6) 0.4 55.7 nm nm (46.1) 30.1 94.9 (35.3) 29.7 % YoY (27.1) (58.0) 3.9 5.6 80.1 75.5 (72.8) 48.9 98.3 (70.8) (63.5) Page 2 of 3
22. 2-May-18 Figure 4 : CPO and PK Sales Volume Figure 5 : Average Selling Price of CPO and PK Source: Company, TA Research Source: Company, TA Research Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Wednesday, May 02, 2018, the analyst, Angeline Chin, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
23. RESULTS UPDATE Wednesday , May 02, 2018 FBMKLCI: 1,871.49 Sector: Oil & Gas THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM7.47 (+30.7%) Lotte Chemical Titan Holding Bhd Last Traded: RM5.71 Product Pricing Lag Dampens Higher Volumes Kylie Chan Sze Zan Tel: +603-2167 9601 BUY kyliechan@ta.com.my Review Lotte Chemical Titan Holding Bhd’s (TTNP) 1Q18 core net profit of RM254mn (-15% YoY) was within expectations – accounting for 20% of our full-year forecasts and consensus estimates. www.taonline.com.my Share Information Bloomberg Code YoY, bottomline was weaker as a result of:- 1) margin squeeze for polyethylene (PE), due to higher feedstock price, coupled with lag in product price increase, and 2) increased taxes. Major Shareholders (%) 1Q18’s effective tax rate of 19% (1Q17: 11%) was higher as TTNP had earlier recognized higher reinvestment allowance claims in 1Q17. The latter was for its new Fluidized Naphtha Cracker (FNC) that was previously known as TE3 project. In spite of stronger crude oil price, management anticipates that naphtha prices will remain stable or trend lower in the near-to-medium term. Additionally, management expects improved results in the near term, on the back of tighter supply arising from: 1) plant TA season in Asia, and 2) resilient demand, particularly during Ramadan season. Additionally, we believe full ramp up of FNC’s operations (commission: mid Dec-17) would also provide a boost to bottomline. 2,273 14,683 52-wk Hi/Lo (RM) 6.53/4.14 12-mth Avg Daily Vol ('000 shrs) 3,890.0 Estimated Free Float (%) 26.0 Beta n.a. Lotte Group - 74% Forecast Revision (%) FY18 Forecast Revision (%) Weaker PE margins in 1Q18 was driven by the increase in naphtha feedstock price since the end of Nov-17. However, PE product prices only started to pick-up from Feb-18. To recap, at the end of each month, the group locked in selling prices for the following month. This implies a 1-2 weeks timing lag in selling price versus spot price. Meanwhile, naphtha feedstock is procured one month in advance. Main Market Share Cap (mn) Market Cap (RMmn) PU would have been higher, if not for sustained load down for both Indonesian PE plants and Malaysian downstream plants. This is to capitalise on stronger ethylene prices, and to minimise exposure to correspondingly weaker PE spreads. Nevertheless, management maintained FY18 PU guidance of 90%, assuming that there is no sustained load down for Indonesian PE plants. 5284 Listing Core net profit excluded amongst others, net FX loss of RM9.6mn. The latter comprised operational gains (RM34.9mn), offset by FX revaluation loss (RM44.6mn) for IPO proceeds allocated to TTNP’s Indonesia project capital injection. The above more than offset the positive impact of a surge in production volumes (Figure 1) following recovery of group plant utilisation (PU) to 83% (1Q17: 53%). Recall that there was heavy statutory turnaround (TA) for Cracker 2 and its associated downstream plants in 1Q17. TTNP MK Stock Code FY19 (15) (17) Core Net Profit (RM mn) 1,087.0 1,151.8 Consensus 1,249.0 1,384.0 87.0 83.2 TA/Consensus (%) Previous Rating Buy (Maintained) Scorecard % of FY vs TA 20 Within vs Consensus 20 Within Financial Indicators Net Debt/Equity (x) FY18 FY19 Net Cash Net Cash ROA (%) 7.9 7.9 ROE (%) 8.9 8.9 NTA/Share (RM) 6.1 6.5 P/NTA (x) 0.9 0.9 Share Performance Price Change (%) TTNP FBMKLCI 1 mth (6.2) 0.4 3 mth 6.5 0.2 6 mth 8.1 7.1 12 mth n.a. 5.8 (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 4
24. 2-May-18 Impact We tweak our forecasts to reflect higher naphtha feedstock costs and higher associate contribution . Following this, our forecasts are lowered by 15%17%. Valuation We roll forward our valuation base year to FY19 and lower our valuation multiple to 7.5x forward EV/EBITDA (previous: 8.5x). This implies a 20% discount versus regional peers, which we believe is justified given a brief and spotty track record. As a result, our TP for TTNP is lowered to RM7.47 (previous: RM7.60). Maintain Buy on TTNP, underpinned by: 1) tight product supply due to environmental clean-up in China, leading to chemical plant closures, 2) multiyear capacity expansion (Figure 2), 3) robust prices for PE/PP which have finally picked up since Feb-18 due to strong demand, and 4) recovery in utilisation rates, after rectification of 1H17’s water supply interruption. Figure 1: Production Volume (‘000 MT) Figure 2: Capacity Expansion Project Updates Source: Company Source: Company Figure 3: Product and Naphtha Feedstock Prices (USD/mt) Source: ICIS & Platts Page 2 of 4
25. 2-May-18 Table 1 : Earnings Summary FYE Dec (RM mn) 2016 2017 2018E 2019F 2020F Revenue 8,136.6 7,824.3 8,818.8 9,420.1 9,861.3 EBITDA 2,196.8 1,594.6 1,717.8 1,822.6 1,893.9 27.0 20.4 19.5 19.3 19.2 Pretax Profit 1,710.2 1,140.6 1,324.0 1,437.9 1,497.1 Reported Net Profit 1,315.4 1,064.9 1,087.0 1,151.8 1,199.2 Core Net Profit 1,391.1 1,093.7 1,087.0 1,151.8 1,199.2 (sen) 60.3 55.0 54.7 58.0 60.4 Core EPS growth (%) 104.0 (8.7) (0.6) 6.0 4.1 PER (x) 9.5 10.4 10.4 9.9 9.5 DPS (sen) 0.0 23.0 21.0 23.0 24.0 (%) 0.0 4.0 3.7 4.0 4.2 EBITDA margin Core EPS Dividend Yield (%) Table 2: 1Q18 Results Analysis YE 31 Dec (RM mn) Revenue EBITDA Deprecia tion F ina nce Cos ts As s ocia tes 1Q18 2,214.3 4Q17 2,117.3 QoQ 4.6 1Q17 1,914.5 YoY 15.7 387.8 (118.9) 21.1 19.1 463.3 (111.7) (3.3) 1.2 (16.3) 6.5 >-100 >100 447.1 (100.5) (0.6) (2.5) (13.3) 18.3 >-100 >-100 EI P reta x P rofit Ta xa tion Minority Interes t (9.3) 299.8 (55.6) (0.1) 4.4 381.9 (5.1) 1.3 >-100 (21.5) >100 >-100 42.9 386.4 (43.5) (0.7) >-100 (22.4) 27.7 (89.9) Reported Net P rofit Core Net Profit 244.2 253.5 378.2 373.8 (35.4) (32.2) 342.2 299.3 (28.6) (15.3) Core E P S (s en) DP S (s en) 11.2 - 16.4 23.0 (32.2) 17.3 - (35.6) E B ITDA Ma rg in Core Net Ma rg in 18% 11% 22% 18% 23% 16% Page 3 of 4
26. 2-May-18 Table 3 : 1Q18 Segmental Analysis YE 31 Dec (RM mn) 1Q18 4Q17 1Q17 QoQ% YoY% Revenue Olefins & Deriva tives P olyolefins Group 577.7 1,636.6 2,214.3 502.9 1,614.4 2,117.3 893.1 1,482.1 1,914.5 14.9 1.4 4.6 (35.3) 10.4 15.7 PBT Olefins & Deriva tives P olyolefins 98.9 205.6 99.7 281.9 78.9 263.0 (0.9) (27.1) 25.3 (21.8) E limina tions Group (4.6) 299.8 0.3 381.9 44.4 386.4 >-100 (21.5) >-100 (22.4) 17% 13% 14% 20% 17% 18% 9% 18% 20% PBT margin Olefins & Deriva tives P olyolefins Group [ TH E RE M A IN DE R OF T H IS P A GE IS IN TE N TI O NA L L Y L E F T BL AN K] Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Wednesday, May 02, 2018, the analyst Kylie Chan Sze Zan who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2031 6608 www.ta.com.my Page 4 of 4
27. SECTOR UPDATE Wednesday , May 02, 2018 FBMKLCI: 1,870.37 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Semiconductor Sector Overweight (Maintained) On Track for Another Year of Growth Wilson Loo, CFA Tel: +603-2167 9606 wilsonloo@ta.com.my www.taonline.com.my 20th Consecutive Month of YoY Growth Global semiconductor sales in 1Q2018 came in at US$111.1bn, down by 2.5% QoQ and up by 20.0% YoY. Meanwhile, marking the 20th consecutive month of YoY growth, March 2018’s numbers grew by 20.0% YoY (+0.7% MoM). Led by memory (DRAM and NAND flash), growth was observed across all major semiconductor product categories. Moving further into 2018, the YoY growth trajectory should sustain but continue to moderate owing to the high base in 2017. WSTS forecasts 2018’s growth at 9.5% (versus 2017’s of 21.6%), driven largely by memory, optoelectronics and logic. Figure 1: Global Chip Sales US$bn 40.0 Worldwide Sales (LHS) % 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 -10.0 -20.0 -30.0 -40.0 YoY Growth (RHS) 35.0 30.0 25.0 20.0 15.0 10.0 5.0 Jan-18 Mar-17 Jul-15 May-16 Sep-14 Jan-13 Nov-13 Mar-12 Jul-10 May-11 Sep-09 Jan-08 Nov-08 Mar-07 Jul-05 May-06 Sep-04 Jan-03 Nov-03 0.0 Source: SIA, TA Securities Double-Digit YoY Growth Across Regions For the 16th month in a row, all regions continued to record YoY growth. This continued to be led by the Americas (+35.7% YoY) and followed by Europe (+20.6% YoY), China (+18.8% YoY), Asia Pacific/All Others (+13.3% YoY) and Japan (+12.4% YoY). However, alongside expectations for YoY growth to moderate, growth across all regions except for China eased. Figure 2: Growth in Sales by Region (% YoY) Figure 3: Breakdown of Sales by Region (%) 100% % Americas 100.0 Europe Japan Asia Pacific Worldwide 90% 80% 80.0 70% 60.0 60% 40.0 50% 40% 20.0 30% 0.0 20% 10% -20.0 Jan-17 Sep-17 May-16 Sep-15 Sep-13 May-14 Jan-15 Jan-13 May-12 Jan-11 Sep-11 Sep-09 May-10 May-08 Jan-09 Jan-07 Americas Europe Japan Jan-17 Sep-17 May-16 Jan-15 Sep-15 May-14 Jan-13 Sep-13 May-12 Jan-11 Sep-11 May-10 Jan-09 Sep-09 May-08 Jan-07 Sep-07 May-06 Jan-05 Sep-05 May-04 Jan-03 Source: SIA, TA Securities Sep-07 May-06 Jan-05 Sep-05 May-04 Jan-03 Sep-03 -60.0 Sep-03 0% -40.0 Asia Pacific Source: SIA, TA Securities Page 1 of 3
28. 2-May-18 Billings Remained Robust Billings remained robust with March 2018 ’s improving further by 0.4% MoM and 16.7% YoY to US$2,427mn respectively for the 2nd and 18th consecutive month. Meanwhile, 1Q2018’s growth was 22.0% YoY and SEMI continues to expect another consecutive year of growth in 2018. Among others, this will be driven by new fabs in China that begin and continue to equip. Figure 4: Billings (US$mn) US$mn 3,000 Billings (LHS) % 300.0 YoY Growth (RHS) 250.0 2,500 200.0 2,000 150.0 1,500 100.0 50.0 1,000 0.0 500 -50.0 Jan-17 Oct-17 Jul-15 Apr-16 Jan-14 Oct-14 Jul-12 Apr-13 Jan-11 Oct-11 Jul-09 Apr-10 Jan-08 Oct-08 Jul-06 Apr-07 Jan-05 -100.0 Oct-05 0 Source: SEMI, TA Securities Maintain Overweight We maintain our Overweight stance on the semiconductor sector. While we expect 1Q2018 results to be impacted by the weakening of the USD against the Ringgit (-5.6% QoQ to RM3.93/USD), we view that the headwind could reverse in 2H2018 with expectations for a stronger USD based on our in-house forecast for 2018 at RM4.00/USD versus YTD of RM3.92/USD. Key risks include the strengthening of the Ringgit and trade tensions between the USA and China. Our top pick for the sector is Elsoft. We like the stock for its strong order book, rich margins and research and development capabilities. Peers Comparison EPS Company Price TP Recom. EPS Growth Mkt Cap CY18 CY19 CY18 CY19 PER CY18 CY19 (RM) (RM) RM mn (sen) (sen) (%) (%) (x) (x) Inari Amertron 1.72 2.40 BUY 3,529.0 9.7 10.9 24.6 11.8 17.7 15.8 Unisem 1.80 2.55 BUY 1,320.9 13.1 18.6 -39.6 41.6 13.7 9.7 MPI 7.80 10.70 BUY 1,551.4 76.2 89.5 -1.6 17.5 10.2 8.7 Elsoft 2.48 3.30 BUY 682.3 13.2 15.0 21.1 14.0 18.8 16.5 25.2 29.9 6.6 18.9 15.4 13.2 CY19 CY18 CY19 CY18 CY19 Weighted average NTA/Share Company P/NTA CY18 CY19 CY18 ROE CY19 CY18 DPS Div yield (RM) (RM) (x) (x) (%) (%) (sen) (sen) (%) (%) Inari Amertron 0.3 0.4 5.3 4.8 31.2 31.7 6.8 7.6 3.9 4.4 Unisem 1.9 2.0 0.9 6.7 9.6 9.5 11.0 11.0 6.1 6.1 MPI 6.0 6.5 1.3 1.2 13.3 14.3 32.0 32.0 4.1 4.1 Elsoft 0.4 0.5 17.8 16.0 31.8 32.4 9.2 10.5 3.7 4.2 Weighted average 1.9 2.0 4.8 5.5 23.3 23.8 13.3 13.9 4.4 4.6 Page 2 of 3
29. 2-May-18 (TH I S P A GE IS IN TE N TI ON AL L Y L E F T B L AN K ) Sector Recommendation Guideline OVERWEIGHT: The industry, as per our coverage universe, is expected to outperform the FBMKLCI over the next 12 months. NEUTRAL: The industry, as per our coverage universe, is expected to perform in line with the FBMKLCI over the next 12 months. UNDERWEIGHT: The industry, as per our coverage universe, is expected to underperform the FBMKLCI over the next 12 months. Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Wednesday, May 02, 2018, the analyst, Wilson Loo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
30. Wednesday , 02 May, 2018 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only L oc al Te ch n ic al R ep o r ts 1. D ai l y Te ch n ic a l St o ck s W at ch 2. D ai l y Mon e y F low of T e ch n i c a l St o ck W at ch 3. D ai l y Mon e y F low of FB MK L CI 4. D ai l y S t o c k S c r e e n Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
31. Technical View Wednesday , May 02, 2018 S REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Technical Stock Watch Malaysia FBM KLCI: 1,870.37 (+6.90, +0.37%) Chartist: Stephen Soo Close Name 30/Apr FBMKLCI 1870.37 Tel: +603-2167 9607 Change High Low 6.90 1,873.39 1,860.25 Bollinger Bands RSI stsoo@ta.com.my Moving Averages www.taonline.com.my DMI MACD DMI Lower Mid Upper 14d 10d 30d 50d DI + DI - ADX Diff Line Signal Diff 1,824.93 1,862.79 1,900.65 50.09 1,873.49 1,862.27 1,858.94 21.53 27.48 14.33 (5.95) 3.01 5.17 (2.15) MACD Recent Signal SELL DMI MACD Signal Change SELL - - AFFIN 2.52 0.02 2.53 2.50 2.20 2.39 2.57 65.38 2.47 2.37 2.39 31.25 16.64 28.85 14.61 0.04 0.02 0.02 BUY BUY - - ABMB 4.35 0.00 4.40 4.31 4.13 4.31 4.48 52.80 4.35 4.29 4.24 15.18 18.10 19.65 (2.91) 0.02 0.03 (0.01) SELL SELL - - AMBANK 3.90 0.12 3.95 3.79 3.64 3.86 4.07 40.12 3.86 3.92 4.05 11.76 28.66 30.33 (16.90) -0.07 -0.07 (0.00) SELL SELL - - AXIATA 5.30 0.00 5.35 5.21 5.18 5.35 5.51 45.03 5.37 5.38 5.42 8.95 25.59 24.91 (16.64) -0.03 -0.02 (0.01) SELL SELL - - CIMB 7.20 -0.05 7.23 7.17 6.96 7.18 7.40 54.66 7.25 7.19 7.19 18.73 26.64 25.87 (7.91) 0.02 0.02 0.00 SELL BUY - BUY DIGI 4.63 0.00 4.65 4.59 4.38 4.53 4.68 53.71 4.56 4.57 4.66 24.26 14.59 21.97 9.66 -0.03 -0.04 0.01 BUY BUY - - GAMUDA 5.14 0.01 5.20 5.09 4.95 5.10 5.25 53.45 5.11 5.10 5.07 20.66 17.71 11.19 2.95 0.01 0.01 (0.00) BUY SELL - - GENTING 8.93 0.14 8.95 8.75 8.62 8.87 9.12 45.83 8.87 8.88 8.90 10.49 24.24 29.56 (13.75) -0.04 -0.01 (0.02) SELL SELL - - GENM 5.13 0.10 5.18 4.97 4.70 5.00 5.29 49.28 5.08 5.02 5.09 19.67 21.94 19.08 (2.28) -0.02 -0.01 (0.00) SELL SELL - - IHH 6.08 0.01 6.10 5.96 5.97 6.07 6.16 50.51 6.09 6.06 6.06 9.68 18.67 13.61 (8.99) 0.01 0.01 (0.00) SELL SELL - - IOICORP 4.79 0.00 4.80 4.73 4.69 4.76 4.83 57.59 4.78 4.75 4.72 11.96 16.08 19.55 (4.12) 0.02 0.02 (0.00) SELL SELL - - MALAKOFF 0.91 0.01 0.91 0.90 0.86 0.89 0.92 53.60 0.90 0.89 0.89 14.83 12.52 14.91 2.31 0.01 -0.01 0.01 BUY BUY - - MAXIS 5.83 0.02 5.84 5.74 5.53 5.78 6.02 49.82 5.83 5.79 5.84 13.30 16.66 20.70 (3.36) 0.01 0.00 0.01 SELL BUY - - 10.78 0.02 10.80 10.72 10.38 10.57 10.77 64.50 10.65 10.54 10.47 28.36 16.86 18.60 11.50 0.07 0.06 0.01 BUY BUY - BUY MAYBANK MBSB 1.15 0.03 1.16 1.12 1.06 1.13 1.19 47.34 1.14 1.12 1.15 18.65 18.29 16.61 0.36 -0.01 0.00 (0.00) BUY SELL - - RHBBANK 5.30 -0.05 5.34 5.29 5.14 5.30 5.46 53.11 5.35 5.30 5.32 20.01 20.43 16.21 (0.42) 0.01 0.01 0.00 SELL BUY - BUY - SIME TENAGA TM 2.67 0.10 2.67 2.55 2.49 2.69 2.90 37.59 2.71 2.67 2.67 14.65 30.46 20.44 (15.81) -0.01 0.02 (0.02) SELL SELL - 15.84 -0.02 15.86 15.76 15.69 15.89 16.08 49.97 15.90 15.87 15.79 17.70 14.91 12.88 2.79 0.02 0.03 (0.02) BUY SELL BUY - 5.30 0.02 5.31 5.28 4.97 5.35 5.73 44.47 5.39 5.37 5.54 20.12 24.11 16.12 (4.00) -0.06 -0.05 (0.01) SELL SELL - - WPRTS 3.34 -0.06 3.43 3.31 3.29 3.42 3.55 46.40 3.39 3.46 3.52 23.18 16.07 23.49 7.11 -0.04 -0.04 0.00 BUY BUY - BUY AIRASIA 3.85 -0.12 4.05 3.82 3.67 3.91 4.15 52.02 3.82 3.97 4.10 21.54 27.48 33.79 (5.94) -0.08 -0.08 0.00 SELL BUY - BUY AIRASIA X 0.39 0.01 0.39 0.38 0.35 0.38 0.41 47.18 0.39 0.38 0.39 23.38 21.10 14.14 2.28 0.00 0.00 0.00 BUY BUY BUY - ARMADA 0.84 0.01 0.84 0.83 0.77 0.85 0.92 47.48 0.85 0.84 0.85 22.15 26.89 17.25 (4.75) 0.00 0.00 (0.01) SELL SELL - - DIALOG 3.08 -0.02 3.10 3.07 2.95 3.08 3.21 57.30 3.09 3.01 2.88 23.20 21.05 24.66 2.15 0.05 0.07 (0.02) BUY SELL BUY - DNEX 0.40 0.03 0.41 0.37 0.34 0.38 0.42 42.60 0.39 0.40 0.41 18.10 27.98 19.77 (9.89) -0.01 -0.01 (0.00) SELL SELL - - ECO WORLD 1.15 0.02 1.16 1.12 0.99 1.08 1.17 58.48 1.12 1.06 1.13 22.64 16.80 29.38 5.84 0.01 -0.01 0.01 BUY BUY - - EKOVEST 0.82 0.01 0.83 0.81 0.77 0.86 0.95 35.71 0.83 0.89 0.93 15.56 28.20 21.90 (12.64) -0.04 -0.03 (0.00) SELL SELL - - FGV 1.71 -0.02 1.75 1.71 1.61 1.76 1.91 45.15 1.76 1.75 1.81 18.04 17.08 21.98 0.96 -0.02 -0.01 (0.01) BUY SELL - - GADANG 0.82 0.01 0.82 0.81 0.79 0.86 0.93 30.35 0.84 0.88 0.94 13.64 31.00 32.21 (17.36) -0.03 -0.03 (0.00) SELL SELL - - HIAP TECK 0.38 0.01 0.38 0.38 0.36 0.40 0.43 37.58 0.39 0.41 0.44 15.41 29.71 27.53 (14.30) -0.02 -0.01 (0.00) SELL SELL - - HIBISCUS 0.76 -0.04 0.80 0.76 0.71 0.84 0.96 42.18 0.86 0.84 0.87 19.35 29.41 15.09 (10.07) -0.01 0.00 (0.01) SELL SELL - - KUB 0.40 -0.01 0.40 0.39 0.38 0.42 0.45 38.32 0.41 0.43 0.45 20.69 28.49 14.86 (7.80) -0.01 -0.01 (0.00) SELL SELL - - MALTON 0.81 -0.01 0.83 0.79 0.76 0.81 0.87 47.38 0.81 0.82 0.87 21.41 25.06 12.04 (3.65) -0.02 -0.02 0.00 SELL BUY - BUY MUDAJAYA 0.66 0.00 0.66 0.66 0.61 0.68 0.74 40.48 0.67 0.69 0.75 18.92 41.49 28.67 (22.57) -0.03 -0.03 0.00 SELL BUY - - MRCB 1.03 0.03 1.03 1.00 0.91 1.00 1.10 46.75 1.02 1.00 1.03 18.96 23.03 13.61 (4.07) 0.00 0.00 (0.00) SELL SELL - SELL SAPURA ENERGY 0.64 -0.04 0.68 0.63 0.45 0.65 0.85 53.67 0.73 0.61 0.60 25.43 22.62 22.34 2.81 0.04 0.04 (0.00) BUY SELL - SELL SUNCON 2.25 0.13 2.26 2.12 1.95 2.13 2.31 46.59 2.16 2.11 2.18 18.04 21.31 18.97 (3.27) 0.00 -0.01 0.00 SELL BUY - - UEMS 0.93 0.02 0.93 0.91 0.88 0.94 1.00 36.20 0.92 0.96 1.00 12.42 29.13 40.98 (16.71) -0.03 -0.03 (0.00) SELL SELL - - UMWOG 0.27 -0.01 0.28 0.26 0.24 0.28 0.33 44.05 0.29 0.29 0.30 18.43 25.93 15.17 (7.50) -0.01 -0.01 (0.00) SELL SELL - - WASEONG 1.42 0.03 1.42 1.37 1.28 1.41 1.54 44.39 1.42 1.45 1.50 19.39 25.55 20.53 (6.16) -0.02 -0.02 0.00 SELL BUY - - WCT 1.23 -0.03 1.27 1.18 1.13 1.19 1.25 52.08 1.19 1.24 1.34 24.16 18.74 28.57 5.42 -0.03 -0.05 0.02 BUY BUY - - The table above is a compilation of actively traded stocks with some popular technical indicators. The technical BUY/SELL signals on the last four columns are auto generated; the first two being existing or recent signals while the last two represent a signal change from BUY to SELL or the reverse, otherwise no change is indicated by a dash. INTERPRETATION OF TECHNICAL INDICATORS: Bollinger Bands: Variable width bands that narrow during less volatile periods and widen during more volatile periods. As a general rule, in a bearish trend, traders should buy when share price touches the lower band and exit when price touches the middle band. The reverse is true in a bullish trend, ie. Buy when price touches the middle band and sell when price touches the upper band. Momentum traders tend to buy on price breakouts above the upper band, and sell when price breaks down below the lower band. 14-day Relative Strength Index (RSI): A reading below 30 is considered oversold, above 70 is overbought. A rise above 50 with a corresponding share price surge above the 30-day moving average should be taken as a bullish move with good short-term upside potential. A fall below 50 and a simultaneous dip below the 30-day average is bearish and imply further near-term downside risk. Moving Averages: A stock’s short-term trend is bullish if share price stays above the 10-day moving average, and bearish if it stays below. The medium-term trend is positive if share price stays above the 30-day average, and negative if it remains below. A longer-term uptrend is intact if share price sustain above the 50-day average, and is deemed broken if it breaches below this level. Directional Movement Indicator (DMI): The DMI is an indicator of trend strength. A positive DMI difference (DMI diff) value is bullish and indicate a higher DI+ vs. DI-, while a negative DMI diff is bearish due to a lower DI+ vs. DI- (DMI diff = DI+ minus DI-). A crossover of DI+ above DI- triggers a BUY signal, while a SELL signal is flashed when the DI+ crosses below the DI-. The Average Directional Movement Index (ADX) indicates the strength of a trend, whether it is up or down. The higher the value of ADX, the stronger the trend. An ADX value above 25 suggests a trending market or stock, while a value below 20 signal congestion or absence of trend. Daily Moving Average Convergence Divergence (MACD): The MACD diff value is derived from the difference between the MACD line (the 12-day EMA minus the 26-day EMA) and the MACD signal line (the 9-day EMA of the MACD). A positive MACD diff value is bullish, while a negative MACD diff is bearish. A BUY signal is generated when the MACD diff rises above zero, and SELL signal sparked when the MACD diff value falls below zero. Page 1 of 4
32. 2-May-18 Technical Comments : Bargain Eco World & Ekovest Positive technical momentum on EcoWorld support a test of the RM1.20 support-turn-resistance level from the June 2016 low, with a convincing breakout to aim for the 76.4%FR (RM1.32) and 61.8%FR (RM1.40) going forward. Key retracement supports are from the 123.6%FP (RM1.08) and 138.2%FP (RM1.00). Low momentum readings on Ekovest implies further base building needed to rebuild support above the 23.6%FR (76sen), pending recovery the 38.2%FR (90sen), while a confirmed breakout should target the 50%FR (RM1.02) and 61.8%FR (RM1.14) ahead. ECO WORLD RM1.15 (+0.02) Z BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 1.18 1.08 1.00 10-day 30-day 50-day RM RM RM DAILY MACD BUY Recent Signal DMI Recent Signal Signal Change BUY Signal Change EKOVEST RM0.82 (+0.01) BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 0.92 0.85 0.77 10-day 30-day 50-day DMI Recent Signal Signal Change 1.12 1.06 1.13 SELL Recent Signal Signal Change RM RM RM DAILY MACD 0.83 0.89 0.93 SELL Page 2 of 4
33. 2-May-18 Daily Money Flow of Technical Stock Watch Malaysia Chartist : Stephen Soo No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 37 38 39 39 40 41 Name Tel: +603-2167 9607 Total Money Flow (RM'mn) stsoo@ta.com.my (A) Total 5D MF Prv. Chg www.taonline.com.my CLOSING PRICE (B) Cur. Chg 23-Apr 24-Apr 25-Apr 26-Apr 27-Apr Chg (A+B) DMF 23-Apr 24-Apr 25-Apr 26-Apr 27-Apr FBMKLCI 5.2 (17.1) (2.8) 29.7 9.4 24.3 32.5 (20.3) 1,880 1,865 1,852 1,852 1,863 11.20 IN AFFIN ABMB AMBANK AXIATA CIMB DIGI GAMUDA GENTING GENM IHH IOICORP MALAKOFF MAXIS MAYBANK MBSB RHBBANK SIME TENAGA TM WPRTS AIRASIA AIRASIA X ARMADA DIALOG DNEX ECO WORLD EKOVEST FGV GADANG HIAP TECK HIBISCUS KUB MALTON MUDAJAYA MRCB SAPURA ENERGY SUNCON UEMS UMWOG WASEONG WCT 0.1 0.1 (0.3) (0.5) 0.3 (1.4) (0.1) (0.5) (0.2) (1.1) 0.6 0.0 0.3 (0.9) 0.1 0.1 (0.6) 10.6 (0.1) (0.0) (1.5) 0.4 (0.2) (0.5) (0.1) 0.0 0.1 (0.3) (0.0) (0.0) (0.1) (0.0) (0.0) 0.0 (0.3) (0.9) (0.0) (0.0) (0.2) 0.0 (0.1) 0.2 0.1 (0.7) (0.0) (1.1) (0.8) 3.2 (5.2) 0.3 (1.3) (1.1) (0.1) (0.0) 4.3 (0.2) (1.3) 0.6 0.7 (0.5) 0.1 (0.4) 0.2 0.2 1.6 0.1 0.0 (0.2) (0.3) (0.1) (0.0) (1.0) (0.0) (0.0) 0.0 (0.2) (0.6) 0.3 (0.1) 0.1 0.0 (0.2) 0.0 (0.2) 0.1 (1.7) (1.5) (1.3) 0.1 0.2 0.1 0.1 0.5 (0.0) (0.1) 1.3 (0.1) (0.2) (1.2) 4.9 (0.3) (0.3) (1.6) 0.1 0.4 (1.8) (0.0) (0.0) (0.1) (0.2) (0.0) 0.0 (0.0) (0.0) (0.0) 0.0 (0.2) (1.0) (0.0) (0.1) 0.1 (0.0) (0.2) 0.0 0.1 (0.4) (0.2) (0.0) (0.3) (2.7) 5.1 (0.2) (1.4) 0.2 0.0 0.0 3.3 (0.1) (0.2) 0.4 1.2 0.0 0.2 0.1 (0.3) 0.4 2.1 (0.1) (0.0) (0.0) (0.1) 0.0 0.0 0.0 (0.0) (0.0) (0.0) (0.2) (0.4) 0.2 (0.0) 0.4 0.0 (0.2) 0.0 (0.1) (0.1) 1.1 (3.9) 0.0 0.2 1.6 0.0 (0.7) 2.3 0.0 (0.7) 6.1 (0.1) (0.1) (0.8) (2.4) (0.1) 0.3 0.5 0.1 0.1 (1.6) (0.0) 0.0 (0.1) (0.4) 0.0 (0.0) (0.4) 0.0 0.1 0.0 (0.2) (0.1) (0.0) (0.0) 0.1 0.0 (0.0) 0.4 (0.1) (1.4) (1.3) (6.2) (3.8) 0.8 1.2 0.0 (4.4) 2.4 (0.0) (0.5) 14.1 (0.3) (1.6) (1.6) 15.0 (1.0) 0.3 (2.8) 0.4 1.0 (0.3) (0.1) 0.1 (0.3) (1.3) (0.1) (0.0) (1.5) (0.0) (0.0) 0.0 (1.2) (3.1) 0.4 (0.2) 0.5 0.0 (0.7) 0.0 0.3 (0.5) 1.5 1.5 1.0 (2.8) 5.0 (0.2) (1.5) (0.3) 0.1 0.1 2.0 0.0 (0.0) 1.6 (3.7) 0.3 0.4 1.7 (0.4) 0.0 3.9 (0.0) 0.0 0.0 0.2 0.1 0.0 0.1 (0.0) 0.0 (0.0) 0.0 0.6 0.2 0.0 0.3 0.0 0.1 (0.0) (0.2) 0.3 1.4 (3.9) 0.3 2.9 (3.6) 0.2 0.7 2.1 0.0 (0.7) 2.8 0.0 0.1 (1.2) (3.6) (0.1) 0.2 0.4 0.4 (0.4) (3.7) 0.0 0.0 (0.1) (0.3) (0.0) (0.0) (0.5) 0.0 0.1 0.0 (0.0) 0.3 (0.2) 0.0 (0.4) (0.0) 0.2 2.53 4.36 3.86 5.45 7.24 4.49 5.05 8.86 5.08 6.10 4.78 0.89 5.89 10.62 1.13 5.36 2.78 15.88 5.37 3.40 3.77 0.38 0.83 3.10 0.38 1.11 0.81 1.71 0.83 0.38 0.86 0.40 0.80 0.66 1.01 0.72 2.15 0.91 0.28 1.46 1.17 2.55 4.25 3.80 5.33 7.22 4.45 5.04 8.75 5.02 6.09 4.78 0.90 5.82 10.62 1.12 5.30 2.68 15.88 5.24 3.36 3.77 0.38 0.83 3.05 0.38 1.12 0.82 1.70 0.82 0.38 0.83 0.40 0.79 0.66 1.00 0.71 2.11 0.91 0.28 1.44 1.24 2.56 4.19 3.78 5.30 7.17 4.49 5.08 8.75 4.88 6.05 4.75 0.89 5.82 10.58 1.10 5.27 2.57 15.84 5.23 3.33 3.69 0.38 0.81 3.00 0.37 1.13 0.80 1.70 0.81 0.38 0.80 0.40 0.78 0.65 1.00 0.67 2.16 0.89 0.27 1.42 1.17 2.52 4.32 3.73 5.16 7.20 4.57 5.12 8.66 4.93 6.06 4.77 0.90 5.80 10.68 1.10 5.31 2.55 15.84 5.20 3.39 3.74 0.38 0.83 2.99 0.37 1.13 0.81 1.71 0.81 0.38 0.80 0.40 0.79 0.64 1.00 0.68 2.12 0.91 0.28 1.40 1.22 2.50 4.35 3.78 5.30 7.25 4.63 5.13 8.79 5.03 6.07 4.79 0.90 5.81 10.76 1.12 5.35 2.57 15.86 5.28 3.40 3.97 0.38 0.84 3.10 0.38 1.13 0.81 1.73 0.81 0.38 0.80 0.40 0.82 0.66 1.00 0.68 2.12 0.91 0.28 1.39 1.26 (0.02) 0.03 0.05 0.14 0.05 0.06 0.01 0.13 0.10 0.01 0.02 0.01 0.01 0.08 0.02 0.04 0.02 0.02 0.08 0.01 0.23 0.00 0.01 0.11 0.01 0.00 0.00 0.02 0.00 (0.01) 0.00 0.00 0.02 0.02 0.00 0.00 0.00 0.00 0.00 (0.01) 0.04 OUT IN OUT IN OUT IN IN IN OUT OUT IN IN OUT IN IN IN IN OUT IN IN IN OUT OUT IN IN IN OUT OUT IN OUT OUT IN IN OUT OUT IN IN IN OUT IN IN Sources: Bloomberg, TA Securities Daily Money Flow (DMF) Formulation If previous change (A) + current change (B) > 0, then DMF = “IN”; AND if (A) + (B) < 0, then DMF = “OUT”. Money Flow (MF) Calculation The value of money flow is set to zero at the start of the trading day. When a trade is performed, its price is compared to the price of the previous trade (the first trade of the day is compared to the previous day's close). If the prices differ, the money associated with the trade (price times number of shares) is added to or subtracted from the money flow. Additions (inflows, buys) are done on upticks; subtractions (outflows, sells) are done on downticks. Daily Money Flow (DMF) Interpretation In general, money flow trends confirm price trends. As prices rise, money flows are usually positive. As prices fall, money flows are usually negative. A divergence, however, between money flow and price trend can be a signal of a future price trend change. For example, a falling stock price with a positive money flow (IN) can indicate a future rally in the price of the stock. Conversely, a rising stock price with a negative money flow (OUT) implies potential correction in the stock price. Page 3 of 4
34. 2-May-18 Daily Money Flow of FBMKLCI Malaysia Chartist : Stephen Soo No Name 23-Apr Tel: +603-2167 9607 Total Money Flow (RM'mn) 24-Apr 25-Apr 26-Apr Total stsoo@ta.com.my 27-Apr 5D MF (A) Prv. Chg (B) Cur. Chg 23-Apr 24-Apr www.taonline.com.my CLOSING PRICE 25-Apr 26-Apr (A+B) 27-Apr Chg DMF FBMKLCI 5.2 (17.1) (2.8) 29.7 9.4 24.3 32.5 (20.3) 1,880 1,865 1,852 1,852 1,863 11.20 1 MAYBANK (0.9) 4.3 1.3 3.3 6.1 14.1 2.0 2.8 10.62 10.62 10.58 10.68 10.76 0.08 IN 2 PBBANK 2.9 1.9 7.0 20.4 1.2 33.3 13.4 (19.2) 24.30 24.10 23.84 23.72 23.60 (0.12) OUT 3 TENAGA 10.6 0.7 4.9 1.2 (2.4) 15.0 (3.7) (3.6) 15.88 15.88 15.84 15.84 15.86 0.02 OUT 4 CIMB 0.3 (1.1) (1.5) (0.0) (3.9) (6.2) 1.5 (3.9) 7.24 7.22 7.17 7.20 7.25 0.05 OUT 5 PCHEM (4.0) (3.7) (7.5) (3.3) (1.3) (19.7) 4.3 2.0 8.46 8.49 8.39 8.41 8.47 0.06 IN 6 IHH (1.1) (1.3) 0.1 (1.4) (0.7) (4.4) (1.5) 0.7 6.10 6.09 6.05 6.06 6.07 0.01 OUT 7 AXIATA (0.5) (0.0) (1.7) (0.2) 1.1 (1.3) 1.5 1.4 5.45 5.33 5.30 5.16 5.30 0.14 IN 8 MAXIS 0.3 (0.0) (0.1) 0.0 (0.7) (0.5) 0.1 (0.7) 5.89 5.82 5.82 5.80 5.81 0.01 OUT 19.36 19.08 18.84 18.88 18.86 5.57 5.54 5.50 5.56 5.56 IN 9 HLBANK 0.0 0.2 (1.5) (0.2) (0.4) (2.0) 1.3 (0.2) 10 SIME PLT (0.3) (0.0) 0.3 (0.3) 0.2 (0.3) (0.6) 0.5 11 DIGI (1.4) (0.8) (1.3) (0.3) 0.0 (3.8) 1.0 0.3 4.49 4.45 4.49 4.57 12 NESTLE (0.9) 2.7 (0.8) (0.7) 8.1 8.4 0.2 8.8 148.00 147.50 139.10 136.50 13 PETGAS 0.4 0.0 (0.1) 5.0 0.2 5.5 5.1 (4.7) 18.22 17.96 17.94 18.00 17.98 14 GENTING (0.5) (5.2) 0.2 5.1 1.6 1.2 5.0 (3.6) 8.86 8.75 8.75 8.66 15 MISC (0.4) (1.0) 0.0 0.1 0.2 (1.0) 0.0 0.2 7.08 7.00 7.08 16 IOI CORP 0.6 (1.1) 0.5 0.2 2.3 2.4 (0.3) 2.1 4.78 4.78 17 GENM (0.2) 0.3 0.1 (0.2) 0.0 0.0 (0.2) 0.2 5.08 18 KLK 2.1 (12.6) (1.5) 0.4 (0.4) (12.0) 1.9 (0.7) 19 PETDAG 0.1 0.6 0.5 0.9 0.0 2.0 0.5 (0.9) 20 HAP SENG 0.0 (0.0) 0.0 0.1 (0.0) 0.0 0.1 (0.1) 9.73 9.70 9.71 9.73 21 HLFG (0.1) 0.4 0.0 0.1 (0.1) 0.4 0.1 (0.2) 19.64 19.46 19.30 19.36 22 PPB (0.2) 0.5 0.0 0.2 (0.4) 0.2 0.2 (0.6) 19.10 19.10 19.18 19.20 23 TM (0.1) (0.5) (0.3) 0.0 (0.1) (1.0) 0.3 (0.1) 5.37 5.24 5.23 24 RHBBANK 0.1 (1.3) (0.2) (0.2) (0.1) (1.6) (0.0) 0.1 5.36 5.30 25 PMETAL (0.8) 0.7 0.3 (0.2) (0.3) (0.4) (0.5) (0.1) 5.10 4.79 26 SIME (0.6) 0.6 (1.2) 0.4 (0.8) (1.6) 1.6 (1.2) 2.78 2.68 2.57 2.55 27 YTLCORP (0.3) (0.2) (0.1) (0.1) (0.0) (0.7) 0.1 0.0 1.45 1.42 1.39 1.40 28 KLCCS 0.2 0.0 (0.0) 0.1 0.0 0.3 0.1 (0.1) 7.20 7.20 7.02 7.21 7.39 0.18 IN 29 AMBANK (0.3) (0.7) 0.1 (0.4) (0.1) (1.4) (0.5) 0.3 3.86 3.80 3.78 3.73 3.78 0.05 OUT 30 ASTRO 0.1 (0.1) (0.2) (0.3) (0.1) (0.5) (0.1) 0.2 1.91 1.84 1.79 1.81 1.85 0.04 IN 17.6 (12.5) 5.1 12.7 (29.8) (17.1) 15.2 (18.0) (2.8) 37.3 (7.6) 29.7 21.0 (11.7) 9.4 103.9 (79.6) 24.2 13 (17) 13 (17) 15 (15) 16 (14) 12 (18) (0.02) IN 0.00 OUT 4.63 0.06 IN 138.40 1.90 IN (0.02) IN 8.79 0.13 IN 7.01 7.10 0.09 IN 4.75 4.77 4.79 0.02 IN 5.02 4.88 4.93 5.03 0.10 OUT 25.52 25.50 25.48 25.50 25.52 0.02 IN 27.50 27.00 27.00 26.96 26.96 0.00 OUT 9.78 0.05 OUT 19.36 0.00 OUT 19.24 0.04 OUT 5.20 5.28 0.08 IN 5.27 5.31 5.35 0.04 IN 4.74 4.71 4.80 0.09 OUT 2.57 0.02 IN 1.43 0.03 IN (RM'mn) INFLOW OUTFLOW NET FLOW Daily Trading Participation COMPANIES INFLOW OUTFLOW Date Retail Institution Foreign Total 23-Apr 24-Apr 25-Apr 26-Apr 27-Apr 20.9% 18.4% 18.7% 17.1% 16.0% 55.2% 56.8% 57.9% 55.4% 51.0% 23.9% 24.8% 23.4% 27.5% 33.0% 100% 100% 100% 100% 100% Sources: Bloomberg, TA Securities Daily Money Flow (DMF) Formulation If previous change (A) + current change (B) > 0, then DMF = “IN”; AND if (A) + (B) < 0, then DMF = “OUT”. Money Flow (MF) Calculation The value of money flow is set to zero at the start of the trading day. When a trade is performed, its price is compared to the price of the previous trade (the first trade of the day is compared to the previous day's close). If the prices differ, the money associated with the trade (price times number of shares) is added to or subtracted from the money flow. Additions (inflows, buys) are done on upticks; subtractions (outflows, sells) are done on downticks. Daily Money Flow (DMF) Interpretation In general, money flow trends confirm price trends. As prices rise, money flows are usually positive. As prices fall, money flows are usually negative. A divergence, however, between money flow and price trend can be a signal of a future price trend change. For example, a falling stock price with a positive money flow (IN) can indicate a future rally in the price of the stock. Conversely, a rising stock price with a negative money flow (OUT) implies potential correction in the stock price. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Wednesday, May 02, 2018, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 4 of 4
35. Technical View Wednesday , May 02, 2018 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Stock Screen Malaysia End Day Census of 30.04.2018 Chartist: Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my Report Description: The Daily Stock Screen is a retail product which can be a very useful guide for momentum trading and trading ideas. The following list is derived from the screening of more than 1000 stocks currently listed on Bursa Malaysia to identify: the top 20 breakout, 20 breakdown, and 30 ‘potential’ breakout stocks which just climbed above the middle Bollinger band, with potential to appreciate toward the upper Bollinger band. [MIDDLE BOLLINGER RANGEBOUND] List of 30 Potential Breakout Stocks (Short-term BUY for upside toward Upper Bollinger Band or higher to TAKE PROFIT/ SELL) No Stock Name Price Bollinger Band Lower Middle RSI Upper 14-day Moving Average 5-day 10-day 30-day 50-day Vol 20-day avg vol 1 PETRONAS DAGANGAN BHD 27.00 24.02 26.15 28.28 69.00 27.08 27.04 25.62 25.39 780,400 690,690 2 BRITISH AMERICAN TOBACCO BHD 24.50 22.46 24.10 25.73 44.83 24.54 24.14 25.28 26.54 398,700 468,670 3 HONG LEONG BANK BERHAD 19.00 18.22 18.89 19.57 52.30 19.00 19.10 18.83 18.83 1,030,000 483,865 4 GLOBETRONICS TECHNOLOGY BHD 4.31 3.63 4.21 4.78 47.60 4.02 4.17 4.34 4.91 1,726,900 1,822,280 5 ALLIANZ MALAYSIA BHD 11.58 10.46 11.25 12.03 50.04 11.65 11.30 11.58 12.13 222,100 132,950 6 HONG LEONG FINANCIAL GROUP 19.48 18.55 19.22 19.89 57.04 19.42 19.41 19.16 19.07 210,600 121,815 4,035,375 7 SERBA DINAMIK HOLDINGS BHD 3.33 2.93 3.27 3.61 50.25 3.31 3.35 3.32 3.38 2,873,900 8 POS MALAYSIA BERHAD 3.69 3.19 3.56 3.93 51.68 3.54 3.62 3.60 3.81 501,800 482,280 9 FRASER & NEAVE HOLDINGS BHD 35.96 31.48 33.84 36.20 84.21 35.33 34.48 33.40 32.41 560,600 636,805 10 BATU KAWAN BHD 18.50 17.90 18.32 18.73 52.42 18.51 18.48 18.32 18.55 15,500 15,575 11 GENTING BHD 8.93 8.63 8.88 9.13 52.30 8.76 8.87 8.88 8.90 2,283,300 2,668,085 1,051,295 12 MAXIS BHD 5.83 5.54 5.78 6.02 51.42 5.83 5.83 5.79 5.84 1,662,400 13 PPB GROUP BERHAD 19.24 18.28 18.85 19.42 69.09 19.16 18.98 18.87 18.53 630,300 866,310 14 GENTING MALAYSIA BHD 5.13 4.71 5.01 5.31 53.65 4.99 5.08 5.02 5.09 4,392,800 6,159,140 2,133,730 15 AMMB HOLDINGS BHD 3.90 3.64 3.86 4.07 48.95 3.79 3.86 3.92 4.05 3,007,400 16 MALAYSIA SMELTING CORP BHD 3.36 2.45 2.99 3.52 68.08 3.39 3.12 2.96 3.07 76,900 62,955 17 MUDA HOLDINGS BERHAD 2.19 1.65 1.97 2.29 61.73 2.08 2.08 1.94 1.92 1,971,400 1,439,895 55,325 18 IMASPRO CORP BHD 2.10 1.74 1.97 2.20 86.59 2.10 2.07 1.91 1.87 402,000 19 MERCURY INDUSTRIES BHD 1.46 1.14 1.35 1.55 51.48 1.40 1.32 1.46 1.64 8,200 5,950 20 AFFIN BANK BHD 2.52 2.33 2.47 2.60 57.63 2.53 2.52 2.45 2.45 340,800 300,845 21 TRANSOCEAN HOLDINGS BHD 0.62 0.45 0.58 0.70 52.08 0.53 0.56 0.61 0.60 12,200 1,615 22 TONG HERR RESOURCES BERHAD 3.46 2.73 3.13 3.53 63.14 3.36 3.24 3.19 3.37 72,300 82,405 23 AMWAY MALAYSIA HOLDINGS BHD 7.62 7.43 7.56 7.69 54.81 7.60 7.59 7.57 7.55 15,000 7,890 24 CARLSBERG BREWERY MALAYSIA B 19.78 18.67 19.26 19.85 62.99 19.45 19.39 19.11 19.09 90,300 111,800 25 ORIENTAL HOLDINGS BERHAD 6.27 6.10 6.22 6.33 53.26 6.22 6.22 6.25 6.31 263,400 136,650 26 SP SETIA BHD 3.19 2.74 2.99 3.25 58.55 3.04 3.07 3.02 3.11 1,483,800 1,432,805 27 CCK CONSOLIDATED HOLDINGS BH 1.46 1.28 1.40 1.52 65.43 1.46 1.43 1.37 1.32 1,259,100 916,455 28 MISC BHD 7.16 6.95 7.08 7.21 54.50 7.05 7.06 7.09 7.04 2,721,700 1,359,630 29 YEE LEE CORPORATION 2.24 2.02 2.15 2.27 66.04 2.24 2.19 2.14 2.15 52,300 56,395 30 ASDION BHD 0.47 0.13 0.31 0.50 85.61 0.41 0.38 0.27 0.25 19,085,600 10,128,890 Raw data sourced from Bloomberg *Note: To qualify in this list above, the first sorting criteria is stock price must have just climbed or stayed ABOVE the middle Bollinger Band, followed by a second criteria that trading volume for the day must be significantly strong. This is a good watch list for momentum traders looking for short-term BUY ideas, as they are laggards with good upside potential towards the upper Bollinger band or higher to TAKE PROFIT/SELL. Caveat: Some stocks may continue to stay range bound and trade sideways, hence traders should refer to their respective charts to spot accumulation (volume growth) or breakout patterns. INTERPRETATION OF TECHNICAL INDICATORS: Moving Averages: A stock’s short-term trend is bullish if share price stays above the 10-day moving average, and bearish if it stays below. The medium-term trend is positive if share price stays above the 30-day, and negative if it remains below this average. 14-day RSI: A reading below 30 is considered oversold, above 70 is overbought. A rise above 50 with a corresponding share price surge above the 30-day SMA should be taken as a bullish move with good short-term upside potential. A fall below 50 and a simultaneous dip below the 30-day SMA is bearish and imply further near-term downside risk. Bollinger Bands: Variable width bands that narrow during less volatile periods and widen during more volatile periods. As a general rule, in a bearish trend, traders should buy when share price touches the lower band and exit when price touches the middle band. The reverse is true in a bullish trend, ie. Buy when price touches the middle band and sell when price touches the upper band. Momentum traders will buy on price breaks above the upper band, and sell when price breaks below the lower band. Alternatively, a sharp move that originates at one band tends to go all the way to the other band, a useful observation when projecting price targets. Page 1 of 2
36. *Note: To qualify in the breakout list below, the first sorting criteria is stock price must close ABOVE the upper Bollinger Band, followed by a second criteria that trading volume for the day must be significantly higher than the 20-day average volume, which signal a bullish breakout. Caveat: We would caution momentum traders that a highly overbought 14-day RSI reading (> 80) and share price pullback BELOW the upper Bollinger Band are early warning signals to exit buy breakout trades. [UPPER BOLLINGER BREAKOUT] Top 20 Breakout Stocks (Generally BULLISH, but can be short-term TAKE PROFIT/ SELL guide) No Stock Name Price Bollinger Band RSI Moving Average Lower Middle Upper 14-day 5-day 10-day 30-day 50-day Vol 20-day avg vol 1 MSM MALAYSIA HOLDINGS BHD 4.00 3.29 3.54 3.80 71.26 3.58 3.50 3.62 3.79 20,200 6,725 2 KLCCP STAPLED GROUP 7.78 6.85 7.22 7.58 66.37 7.20 7.26 7.14 7.41 992,300 361,695 3 BIMB HOLDINGS BHD 4.19 3.75 3.92 4.10 65.55 3.96 3.94 3.94 4.02 160,900 152,690 4 PMB TECHNOLOGY BHD 2.48 1.82 2.11 2.39 72.99 2.19 2.18 2.08 2.09 425,700 132,360 5 MENTIGA CORP BHD 0.71 0.52 0.59 0.66 71.09 0.60 0.58 0.59 0.61 1,300 6,730 6 SAM ENGINEERING & EQUIPMENT 6.90 5.90 6.38 6.86 69.48 6.53 6.50 6.40 6.62 52,700 22,100 7 IJM CORP BHD 2.98 2.50 2.72 2.94 61.89 2.68 2.72 2.70 2.72 4,773,900 3,096,410 8 SIME DARBY PROPERTY BHD 1.50 1.35 1.41 1.48 64.95 1.41 1.41 1.41 1.41 2,887,800 2,357,900 9 SCICOM (MSC) BHD 2.07 1.76 1.90 2.05 63.61 1.97 1.94 1.94 1.94 231,000 295,080 0.77 0.55 0.65 0.75 65.47 0.69 0.67 0.63 0.63 5,212,300 1,359,145 11 BERJAYA LAND BHD 0.32 0.24 0.27 0.31 67.33 0.28 0.27 0.28 0.29 3,436,000 1,541,870 12 HLT GLOBAL BHD 0.28 0.22 0.24 0.27 67.80 0.25 0.24 0.24 0.24 1,870,900 276,045 13 WIDETECH (MALAYSIA) BHD 0.63 0.52 0.57 0.62 61.50 0.58 0.57 0.55 0.51 19,200 960 14 PAOS HOLDINGS BHD 0.44 0.38 0.40 0.43 54.77 0.41 0.41 0.41 0.43 5,000 3,045 15 ENG KAH CORP BHD 1.39 0.98 1.18 1.39 66.43 1.24 1.15 1.23 1.29 200 600 16 BORNEO OIL BHD 0.09 0.07 0.08 0.09 68.59 0.08 0.08 0.08 0.08 175,105,600 56,092,880 17 THREE-A RESOURCES BHD 1.08 1.00 1.04 1.08 59.92 1.05 1.04 1.04 1.05 969,200 536,215 18 PENSONIC HOLDINGS BHD 0.61 0.55 0.58 0.61 58.34 0.57 0.58 0.58 0.59 418,000 43,375 19 SEALINK INTERNATIONAL BHD 0.15 0.13 0.14 0.15 57.31 0.14 0.14 0.14 0.14 10,100 52,695 20 AE MULTI HOLDINGS BHD 0.15 0.12 0.13 0.14 61.04 0.14 0.14 0.13 0.14 878,500 226,770 10 LEE SWEE KIAT GROUP BHD Raw data sourced from Bloomberg *Note: As for the top 20 breakdown list below, the sole sorting criteria is stock price must close significantly BELOW the lower Bollinger Band, with the largest distance from the lower band at the top of the table, signaling a severe sell-off which is bearish. Caveat: A stock should bottom out if share price moves ABOVE the falling lower Bollinger Band, which can be a good buy signal for technical rebound upside after the sharp sell-off. [LOWER BOLLINGER BREAKDOWN] Top 20 Breakdown Stocks (Generally BEARISH, but can be short-term BUY guide) No Stock Name Price Bollinger Band Lower Middle Upper RSI 14-day Moving Average 5-day 10-day 30-day 50-day Vol 20-day avg vol 1 PADINI HOLDINGS BERHAD 4.25 4.30 4.55 4.79 33.43 4.47 4.52 4.52 4.72 325,300 513,045 2 OSK VENTURES INTERNATIONAL 0.57 0.59 0.62 0.66 30.40 0.63 0.63 0.62 0.62 20,600 92,040 3 TAFI INDUSTRIES BHD 0.30 0.32 0.38 0.45 21.41 0.34 0.36 0.39 0.41 10,000 1,000 4 APB RESOURCES BHD 0.82 0.84 0.88 0.92 32.08 0.87 0.87 0.89 0.93 1,000 8,800 5 KOTRA INDUSTRIES BHD 1.62 1.63 1.74 1.85 31.75 1.69 1.71 1.77 1.74 13,000 5,760 6 TH PLANTATIONS BHD 0.73 0.74 0.80 0.86 28.05 0.78 0.78 0.84 0.89 540,300 154,175 7 FIMA CORP BHD 1.92 1.93 1.97 2.00 31.68 1.96 1.97 1.97 1.99 9,000 24,920 8 SEREMBAN ENGINEERING BHD 0.35 0.36 0.43 0.50 32.57 0.39 0.41 0.45 0.51 20,000 3,375 9 PELANGI PUBLISHING GROUP BHD 0.45 0.46 0.50 0.55 36.19 0.48 0.49 0.50 0.51 3,000 1,100 10 KIAN JOO CAN FACTORY BHD 2.55 2.56 2.65 2.75 29.02 2.61 2.63 2.69 2.75 19,000 13,015 2,060 11 SUIWAH CORP BHD 2.15 2.16 2.23 2.30 30.76 2.18 2.21 2.30 2.41 2,000 12 PLS PLANTATIONS BHD 0.78 0.79 0.85 0.91 18.33 0.81 0.83 0.89 1.00 100 3,005 13 WELLCALL HOLDINGS BHD 1.32 1.33 1.36 1.38 35.07 1.35 1.36 1.38 1.42 41,400 96,260 125,495 14 HOMERITZ CORP BHD 0.62 0.63 0.67 0.72 29.30 0.68 0.69 0.68 0.70 144,700 15 MALPAC HOLDINGS BERHAD 1.00 1.00 1.11 1.21 20.72 1.06 1.08 1.14 1.20 1,000 430 16 SELANGOR DREDGING BHD 0.76 0.76 0.80 0.84 29.10 0.78 0.80 0.81 0.83 50,000 64,575 17 OCR GROUP BERHAD 0.41 0.41 0.44 0.46 24.62 0.43 0.43 0.46 0.48 181,200 361,795 18 YGL CONVERGENCE BHD 0.13 0.13 0.15 0.16 36.50 0.14 0.15 0.15 0.16 150,000 94,670 19 PUBLIC PACKAGES HOLDINGS BHD 0.57 0.57 0.60 0.62 37.88 0.59 0.60 0.61 0.63 11,300 36,410 20 AJIYA BHD 0.50 0.50 0.52 0.55 38.57 0.52 0.53 0.52 0.54 163,200 146,275 Raw data sourced from Bloomberg S Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Wednesday, May 02, 2018, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 2