Bursa Malaysia Daily Market Report - 21 February

Transcription

1. Wednesday , 21 February, 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 . N e s t le (M a l a ys i a ) Be r h a d : C o st s O p ti m i sa t io n E x p a n de d M a rg in s 2 . P e t ro n a s C h e m ic a ls G ro u p B h d : E n din g F Y 1 7 o n a Go o d N o te Te ch n ic al R ep o rt s 1. D ai l y Te ch n ic a l St o ck Pi cks ( L oc al ) 2. D ai l y St o ck S cr een Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
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Daily Market Commentary Wednesday , 21 February 2018 TA Research, e-mail : taresearch@ta.com.my For Internal Circulation Only Review & Outlook KLSE Market Statistics (20.02.2018) Main Market 1,302.9 Warrants 670.3 ACE Market 297.3 Bond 4.4 ETF 0.7 LEAP 0.0 Total 2,275.6 Off Market 78.9 Volume -68.6 151.9 -162.0 -1.7 -0.1 (0.0) 73.7 1,896.1 139.4 63.2 0.9 0.8 0.0 2,100.4 179.7 Value 207.1 54.8 -47.5 -0.7 -0.1 0.0 178.3 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP February 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 40.0 10.0 8.2 5.0 5.0 2.5 2.3 1.5 1.4 % YTD chg -1.33 -16.20 -24.03 -7.50 -0.07 -0.12 -0.14 -0.40 3.29 2.38 -1.63 3.64 24,964.75 7,234.31 7,246.77 21,925.10 2,415.12 30,873.63 3,476.53 1,801.02 6,662.88 3,199.16 1,739.15 5,940.85 -254.63 -5.16 -0.89 -224.11 -27.70 -241.80 -11.35 -8.65 -26.41 0.00 0.00 -0.73 -1.01 -0.07 -0.01 -1.01 -1.13 -0.78 -0.33 -0.48 -0.39 0.00 0.00 -0.01 0.99 4.79 -5.74 -3.69 -2.12 3.19 2.16 2.70 4.83 -3.27 -8.43 -2.05 (mn) 0.48 2.75 2.36 0.25 4.75 25.50 7.93 0.39 0.48 Exchange Rate USD/MYR 3.8927 0.001 USD/JPY 107.30 0.790 EUR/USD 1.234 -0.0086 Counter TENAGA IHH DIGI PETGAS GENTING MISC HAPSENG TM HLFG RHBBANK Mkt Cap. Chg (RM’mn) (RM) 89,069 50,509 38,020 35,221 34,981 31,738 22,781 22,548 21,645 20,973 -0.02 -0.06 -0.01 -0.86 -0.08 -0.05 -0.01 -0.12 -0.06 -0.07 News Bites Vol. (mn) 8.13 2.48 2.28 0.31 3.15 1.51 0.17 2.33 0.07 3.89 Commodities Futures Palm Oil (RM/mt) 2,485.00 -27.00 Crude Oil ($/Barrel) 61.77 -0.73 Gold ($/tr.oz.) 1,331.40 -17.50 Important Dates Further improvement in the external market environment, economic data and strong buying interest from local funds would be essential to support the index higher in the near-term. Immediate resistance for the index stays at 1,874, the upper Bollinger band, with the 2 Feb peak of 1,880 acting as a formidable upside hurdle. Immediate support remains at 1,830, while crucial resistance-turn-support level is at 1,796, the June 2017 peak matching the recent low, which must hold to prevent further correction potential towards next support from 1,778, the 38.2%FR of the 1,614 low of Nov 2016 to the recent 1,880 high. Bumi Armada needs a convincing breakout above the 123.6%FP (RM0.90) to boost upside momentum towards the 138.2%FP (RM0.94) and 150%FP (RM0.98), while a confirmed breakout would challenge the 161.8%FP (RM1.02). Immediate support is capped at 200-day ma (RM0.75). Similarly, Dialog needs sustained strength above the 150%FP (RM2.83) to extend higher towards medium-term upside targets of 161.8%FP (RM2.90) and 176.4%FP (RM3.00), while crucial support is spotted at 76.4%FR (RM2.34). Top 10 KLCI Movers Based on Mkt Cap. (RM) @ @ @ @ @ @ @ @ @ 346 137 68 4 1 0 556 % chg 1,855.99 13,250.80 16,772.72 1,850.00 Off Market UMWOG SIME SSTEEL SMTRACK IOICORP KLK KLCC MEDIAC OMESTI Value/ 1.46 240 0.21 133 0.21 29 0.19 3 1.16 4 0.00 0 0.92 409 2.28 The FBM KLCI paused for a breather on Tuesday, as some mild profittaking on selected blue-chip heavyweights halted its post-Chinese New Year ascend, in line with the weaker regional markets following the softer finish on European markets while U.S equities took a break from the President's Day holiday.The KLCI fell 1.33 points to settle at 1,855.99, off the high of 1,861.10 and low of 1,852.96, as losers beat gainers 556 to 409 on slower turnover of 2.27bn shares worth RM2.10bn. • Petronas Chemicals Group Bhd's FY17 earnings grew by 42.5% YoY to RM4.2bn on the back of higher production and sales volumes.A second interim dividend of 15.0sen/share was declared. • Bina Darulaman Bhd recorded losses of RM7.8mn in FY17 as compared to profits of RM34.0mn in the previous corresponding period. • Nestle (M) Bhd's 4QFY17 profit jumped 99.5% YoY to RM133.5mn mainly on sustainable cost management as well as a different phasing of marketing investments in 2017. • The Employees Provident Fund has emerged as a substantial shareholder in Eco World Development Group Bhd with a 5.012% stake. • Malaysia Airports Holdings Bhd is upgrading its baggage handling system at the Kuala Lumpur International Airport. • UEM Edgenta Bhd announced a special dividend of 18.0sen/share together with a second interim dividend of 5.0sen/share after its 4QFY17 net profit surged following the disposal of its entire stake in Opus International Consultants Ltd last year. • Ayala Land Inc, the biggest property group in the Philippines, increased its indirect stake in MCT Bhd (MCT) to 72.3% at the close of the mandatory general offer for shares in MCT. • Halex Holdings Bhd's losses narrowed to RM6.2mn in 4QFY17 from RM21.2mn a year ago as the group recorded a gain of disposal amounting to RM7.5mn. • Star Media Group Bhd called on bank guarantees amounting to RM50.0mn after a subsidiary of JAKS Resources Bhd failed to complete and deliver a building in a Section 13 Petaling Jaya development in accordance with the deadline. • Jacobs Douwe Egberts Holdings Asia has issued the offer document for its conditional voluntary takeover offer of OldTown Bhd at RM3.18/ share which will be open until March 13. • Malaysia Pacific Corporation Bhd, a Practice Note 17 company has been served with a winding-up petition by RHB Bank Bhd, demanding repayment of debt totaling RM118.2mn. • Moody's Investors Service sees robust growth for the Malaysian economy in 2018. • Australia's consumer confidence weakened for the second straight time during the week ended February 18. • Singapore's domestic wholesale trade rose a seasonally adjusted 4.7% sequentially in the three months ended December. • Growth in British factory orders cooled to a four-month low in February as exports slowed, although the overall picture of manufacturing remained healthy. • Eurozone consumer confidence fell by more than expected in February from a 17-year high in January, a flash estimate for the European Commission showed. HSSEB - 1:10 Rights Issue - RI of up to 31.9m shares together with BI of up to 15.9m shares and up to 47.9m free detachable warrants. 1 rights share for every 10 existing shares held, at an issue price of RM1.30 per rights share, together with 1 bonus share and 3 warrants for every 2 rights shares subscribed. Ex-Date: 19/02/2018. Entitlement Date: 21/02/2018. Trading of Rights: 22/02 - 28/02/2018. Application Closed: 08/03/2018. LISTING ON: 21/03/2018. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan, Head of Research MENARA TA ONE, 22 JALAN for TA SECURITIES HOLDINGS BERHAD (14948-M) A PARTICIPATING ORGANISATION OF BURSA MALAYSIA SECURITIES BHD P RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL : 603 - 2072 1277. FAX : 603 - 2032 5048 www.ta.com.my
3. Wednesday , February 21, 2018 FBMKLCI: 1,855.99 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 External Improvement Needed to Boost Upside Momentum The FBM KLCI paused for a breather on Tuesday, as some mild profit-taking on selected bluechip heavyweights halted its post-Chinese New Year ascend, in line with the weaker regional markets following the softer finish on European markets while U.S equities took a break from the President’s Day holiday. The KLCI fell 1.33 points to settle at 1,855.99, off the high of 1,861.10 and low of 1,852.96, as losers beat gainers 556 to 409 on slower turnover of 2.27bn shares worth RM2.10bn. Key Resistance Stays at 1,874, Support at 1,830 Further improvement in the external market environment, economic data and strong buying interest from local funds would be essential to support the index higher in the near-term. Immediate resistance for the index stays at 1,874, the upper Bollinger band, with the 2 Feb peak of 1,880 acting as a formidable upside hurdle. Immediate support remains at 1,830, while crucial resistance-turn-support level is at 1,796, the June 2017 peak matching the recent low, which must hold to prevent further correction potential towards next support from 1,778, the 38.2%FR of the 1,614 low of Nov 2016 to the recent 1,880 high. Buy Bumi Armada & Dialog Group Bumi Armada needs a convincing breakout above the 123.6%FP (RM0.90) to boost upside momentum towards the 138.2%FP (RM0.94) and 150%FP (RM0.98), while a confirmed breakout would challenge the 161.8%FP (RM1.02). Immediate support is capped at 200-day ma (RM0.75). Similarly, Dialog needs sustained strength above the 150%FP (RM2.83) to extend higher towards medium-term upside targets of 161.8%FP (RM2.90) and 176.4%FP (RM3.00), while crucial support is spotted at 76.4%FR (RM2.34). Asian Markets Pull Back After European Stocks Surge Fade Overnight Asian shares traded lower on Tuesday after a relatively quiet overnight session, after European equities broke a winning streak and the U.S. markets being closed for a holiday on Monday. U.S. markets were closed on Monday for a holiday, and the focus will be on whether Wall Street can maintain its recovery once trading resumes later in the day. Meanwhile, minutes from the Reserve Bank of Australia released on Tuesday indicated policymakers were sanguine about the uptick in the global economy. RBA members also noted that wage growth "was yet to pick up" despite the robust job market and highlighted that household debt remained "elevated." Japanese stocks dropped as a combination of a retreat in risk appetite and profit-taking dented the broader market, with financials and index-heavy shares underperforming. The Nikkei dropped 1.0 percent to 21,925.10, after rising 2 percent on Monday. Over in South Korea, the Kospi slid 1.13 percent to end at 2,415.12, with losses seen in heavyweight technology names. Samsung Electronics fell and SK Hynix fell more than 1 percent, respectively. In down Under, the S&P/ASX 200 finished the session off by 0.01 percent as the 1.93 percent gain in the information technology sector was offset by declines seen in other sectors. Markets in China, Taiwan and Vietnam remained closed on Tuesday for the Lunar New Year holiday. Page 1 of 5
4. 21-Feb-18 Wall Street Snap Winning Streak as Walmart Weighs on Market The Dow and S &P snapped a six-day winning streak Tuesday, with the Dow and S&P 500 weighed down by a steep loss for Walmart as investors also watched climbing bond yields, which could make equities less attractive at current levels. Walmart, the world’s biggest brickand-mortar retailer, reported a lower-than-expected profit and posted a sharp drop in online sales growth during the holiday period. Its shares slumped 10.2 percent, and suffered their biggest percentage fall since January 1988. Meanwhile, a rise in interest rates toward multiyear highs also pressured stocks. The benchmark 10-year U.S. note yield rose to 2.88 percent, after hitting its highest level since 2014 last week. The short-term two-year note yield, meanwhile, traded around a nine-year high. Telecommunications companies also contributed to Tuesday’s drop after a federal judge ruled AT&T isn’t entitled to details of the Trump administration's internal discussions on the proposed merger with Time Warner. Shares of AT&T fell 1 percent, while Verizon Communications shed 2.5 percent. Wednesday’s release of minutes from the Federal Reserve’s January policy meeting, the last chaired by Janet Yellen, will be combed for clues to the central bank’s thinking on interest rates. Looking ahead, Philadelphia Federal Reserve Bank President Patrick Harker and Minneapolis Federal Reserve Bank President Neel Kashkari are due to deliver speeches this week. The Dow Jones Industrial Average fell 254.63 points, or 1.01 percent, to 24,964.75, the S&P 500 lost 15.96 points, or 0.58 percent, to 2,716.26 and the Nasdaq Composite dropped 5.16 points, or 0.07 percent, to 7,234.31. 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, February 21, 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 5
5. 21-Feb-18 N e w s i n B r i e f Corporate Petronas Chemicals Group Bhd ’s 4QFY17 and FY17 earnings respectively grew by 1.8% YoY to RM1.0bn and 42.5% YoY to RM4.2bn. This was on the back of higher production and sales volumes following commencement of commercial operation at SAMUR in May 2017. A second interim dividend of 15.0sen/share was declared. (Bursa Malaysia) Bina Darulaman Bhd recorded losses of RM10.4mn in 4QFY17 and RM7.8mn in FY17 as compared to profits of RM23.3mn and RM34.0mn in the previous corresponding period. This was mainly due to lower contributions by the group’s property division and road building and quarry division. (Bursa Malaysia) Nestle (Malaysia) Bhd’s 4QFY17 profit jumped 99.5% YoY to RM133.5mn mainly on sustainable cost management as well as a different phasing of marketing investments in 2017 compared to 2016. For FY17, revenue and profit respectively grew by 3.9% YoY to RM5.3bn and 1.4% YoY to RM645.8mn. A final dividend of 135.0sen/share was proposed. (Bursa Malaysia) The Employees Provident Fund has emerged as a substantial shareholder in Eco World Development Group Bhd with a 5.012% stake. (The Star) Malaysia Airports Holdings Bhd is upgrading its baggage handling system at the Kuala Lumpur International Airport. According to its tender notice, the group is seeking the design, manufacture, deliver, installation, management, test and commission for the baggage screening and baggage handling system. (The Star) UEM Edgenta Bhd announced a special dividend of 18.0sen/share together with a second interim dividend of 5.0sen/share after its 4QFY17 net profit surged about 20 times following the disposal of its entire stake in Opus International Consultants Ltd last year. For FY17, net profit spiked 422.4% YoY to RM418.2mn from RM80.1mn, while revenue grew 34.3% YoY to RM2.1bn from RM1.6bn. (Bursa Malaysia) Ayala Land Inc, the biggest property group in the Philippines, increased its indirect stake in MCT Bhd (MCT) to 72.3% at the close of the mandatory general offer for shares in MCT. (The Edge) Halex Holdings Bhd’s losses narrowed to RM6.2mn in 4QFY17 from RM21.2mn a year ago as the group recorded a gain of disposal amounting to RM7.5mn in respect of the disposal of associate company, Kensington Development Sdn Bhd on 23 November 2017. For FY17, losses narrowed to RM12.4mn from RM22.0mn in FY16. (Bursa Malaysia) Star Media Group Bhd called on bank guarantees amounting to RM50.0mn after a subsidiary of JAKS Resources Bhd, Jaks Island Circle Sdn Bhd, failed to complete and deliver a building in a Section 13 Petaling Jaya development in accordance with the deadline. (The Star) Jacobs Douwe Egberts Holdings Asia has issued the offer document for its conditional voluntary takeover offer of OldTown Bhd at RM3.18/share which will be open until March 13. (The Edge) Malaysia Pacific Corporation Bhd, a Practice Note 17 company has been served with a winding-up petition by RHB Bank Bhd, demanding repayment of debt totaling RM118.2mn. (The Edge) Page 3 of 5
6. 21-Feb-18 N e w s I n B r i e f Economy Asia Moody 's Sees Robust Growth for Malaysia but leverage a Concern Moody's Investors Service sees robust growth for the Malaysian economy in 2018, averaging growth of 5.2%, but it is concerned about the debt level and how the government can further reduce the fiscal deficit. The rating agency said Malaysia's (A3 stable) credit profile is supported by its large and diversified economy, ample natural resources and robust mediumterm growth prospects. “However, Malaysia's elevated system-wide leverage — including in the household sector — poses credit challenges,” it said. Moody's said it expected the robust growth in 2017 would likely continue into 2018 and over the medium term, supporting the sovereign's credit profile. It said growth would be underpinned by a pipeline of large infrastructure projects that will stimulate public and private investment. “Although the trend of fiscal deficit reduction has been maintained, the implementation of further fiscal consolidation remains a major credit challenge. “That said, a favourable debt structure and large domestic savings help to mitigate risks arising from a high government debt burden,” it said. Moody's also noted that despite current account surpluses, Malaysia continues to be exposed to potential volatility in capital inflows, in part due to an active foreign investor presence. Foreign reserve adequacy remains low when compared with A-rated peers. (The Star) Australia's Consumer Confidence Weakens Further Australia's consumer confidence weakened for the second straight time during the week ended February 18, a weekly survey compiled by the ANZ bank and Roy Morgan Research showed Tuesday. The consumer confidence index dropped to 115.3 from 119.5 in the preceding week. Views towards current economic conditions fell 5.5 percent last week, bringing the sub-index to an eight-week low of 107.0. Similarly, perceptions of future economic conditions declined to a 13-week low of 106.3. (RTT) Singapore Wholesale Trade Rises In Q4 Singapore's domestic wholesale trade increased in the three months ended December, figures from the Department of Statistics showed. At current prices, domestic wholesale sales rose a seasonally adjusted 4.7% sequentially in the fourth quarter, reversing a 2.7% drop in the previous quarter. After removing price effect, overall domestic wholesale trade declined 2.7% over the previous quarter. Excluding petroleum, domestic wholesale trade grew 0.9% from the third quarter, when it fell by 0.6%. On an annual basis, growth in domestic wholesale trade eased sharply to 5.9% from 12.0%. Foreign wholesale trade expanded 4.9% quarterly and by 8.1% yearly in the fourth quarter. (RTT) Europe and Uni ted Kingdom Growth in UK Factory Orders Cools to Four-Month Low in February – CBI Growth in British factory orders cooled to a four-month low in February as exports slowed, although the overall picture of manufacturing remained healthy, a survey showed. The Confederation of British Industry’s (CBI) monthly order book balance eased to +10 from +14 in January, as expected in a poll of economists. British exporters have benefited from a pickup in the global economy and a fall in the value of the pound after the 2016 Brexit vote. “Although order books weren’t quite as buoyant as they were last month, demand remains strong and output grew briskly,” CBI head of economic intelligence Anna Leach said. “With the Brexit negotiations reaching a critical juncture, many businesses are concerned about future barriers to trade and are looking for clarity over the future relationship with the EU.” Earlier on Tuesday, the EEF manufacturing association said many companies were confused about what Britain’s exit from the European Union would mean for them. The CBI’s expected factory prices balance fell to +25 in February after hitting a 34-year high of +40 last month. (Reuters) Page 4 of 5
7. 21-Feb-18 Eurozone Consumer Confidence Falls in Feb from 17-year High Eurozone consumer confidence fell by more than expected in February from a 17-year high in January , a flash estimate for the European Commission showed. The Commission said that consumer sentiment fell to 0.1 points from a revised 1.4 points in January. Economists polled by Reuters had on average expected a figure of 1.0. In the wider European Union, confidence also slipped - to -0.3 points from 0.4 points in January. Uncertainty about possible euro zone reforms and Italian elections and difficulties forming a German government have so far taken a backseat to improved economic factors with unemployment in the Eurozone at nine-year lows. (Reuters) German Economic Sentiment Falls Less Than Forecast Germany's economic confidence declined less-than-expected in January, survey results from the Mannheim-based think tank ZEW showed Tuesday. The ZEW Indicator of Economic Sentiment dropped to 17.8 points in February from 20.4 in January. Though the score was above the expected level of 16.0, it was below the long-term average of 23.7. The current conditions index fell to 92.3 from 95.2 in the previous month, but it was the second highest reading on record. The score was forecast to fall moderately to 94. February's small fall in German investor sentiment was unsurprising against a backdrop of falling equity prices and a strong euro, Jennifer McKeown, an economist at Capital Economics, noted. The fact that the majority of investors expect economic conditions to improve regardless is testament to the positive outlook for the broader economy, the economist said. (RTT) Germany's Producer Price Inflation Weakest in 1 Year Germany's producer price inflation eased to a 13-month low in January, figures from Destatis revealed. Producer price inflation slowed to 2.1% in January from 2.3% in December. This was the weakest since December 2016, when prices gained 1%. Nonetheless, the rate was bigger than the expected 1.8%. On a monthly basis, producer price growth rose to 0.5% from 0.2% a month ago. The rate came in line with expectations. Excluding energy, producer prices advanced 0.6% from December and climbed 2.1% from January 2017. (RTT) Share Buy-Back: 20 February 2018 Company E&O FITTERS KPJ MALAKOF SNTORIA UNIMECH Bought Back Price (RM) Hi/Lo (RM) 20,000 370,000 100,000 500,000 80,000 10,000 1.46 0.415/0.41 0.95/0.935 0.935/0.93 0.63/0.62 1.04/1.02 1.49/1.45 0.415/0.405 0.95/0.935 0.935/0.93 0.63/0.60 1.04/1.02 Total Treasury Shares 25,173,747 31,208,500 65,505,700 14,368,100 3,936,000 6,810,910 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 5 of 5
8. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) PER (X) Div Yield (%) FY18 FY19 FY18 FY19 FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD 20-Feb-18 AUTOMOBILE BAUTO 2.18 2.50 14.7% Buy 2,526 0.50 14.3 19.9 15.3 11.0 5.3 5.5 2.47 -11.7 1.84 18.5 MBMR 2.33 2.32 -0.4% Under Review 911 0.70 23.2 23.9 10.1 9.8 2.0 2.0 2.60 -10.4 2.01 15.9 -0.9 5.9 PECCA 1.30 1.86 43.1% Buy 240 0.36 11.1 12.5 11.7 10.4 4.2 4.7 1.70 -23.5 1.26 3.2 -16.1 SIME 2.72 1.97 -27.6% Hold 18,498 1.53 12.0 12.7 22.7 21.5 1.1 1.2 3.06 -11.1 2.03 34.2 23.1 UMW 6.62 4.37 -34.0% Sell 7,734 1.29 20.7 36.9 32.0 18.0 1.5 2.7 6.98 -5.2 4.70 40.9 27.3 BANKS & FINANCIAL SERVICES ABMB 4.10 4.60 12.2% Hold 6,347 1.29 30.6 35.6 13.4 11.5 3.9 3.9 4.49 -8.7 3.62 13.3 0.5 AFFIN 2.53 2.70 6.7% Hold 4,916 0.93 24.2 28.1 10.4 9.0 3.2 3.2 2.98 -15.0 2.22 13.9 9.5 AMBANK 4.64 5.50 18.5% Buy 13,986 1.39 48.6 52.0 9.6 8.9 3.9 3.9 5.70 -18.6 4.06 14.3 5.2 CIMB 7.12 7.50 5.3% Hold 65,686 1.68 50.8 56.0 14.0 12.7 4.1 3.9 7.36 -3.3 4.91 45.0 8.9 HLBANK 18.50 19.30 4.3% Hold 37,844 0.84 114.2 120.9 16.2 15.3 2.4 2.4 18.80 -1.6 13.28 39.3 8.8 MAYBANK 10.14 10.50 3.6% Hold 109,819 1.01 70.6 77.4 14.4 13.1 4.9 4.9 10.24 -1.0 8.38 21.0 3.5 PBBANK 22.08 25.10 13.7% Buy 85,262 0.69 142.4 149.8 15.5 14.7 2.6 2.7 22.62 -2.4 19.66 12.3 6.3 RHBBANK 5.23 5.70 9.0% Hold 20,973 1.56 52.2 53.8 10.0 9.7 2.9 2.9 5.61 -6.8 4.71 11.0 4.6 BURSA 10.80 11.80 9.3% Buy 5,805 0.94 43.9 45.0 24.6 24.0 3.3 3.3 11.30 -4.4 8.52 26.8 6.7 Note: BURSA proposed bonus issue of shares on the basis of 1 for 2. Ex-Target price RM7.04 BUILDING MATERIALS ANNJOO 3.67 4.40 19.9% Buy 1,898 1.31 45.1 48.9 8.1 7.5 6.0 7.1 3.98 -7.8 2.27 61.7 -4.9 CHINHIN 1.00 1.36 36.0% Buy 556 1.03 12.4 12.0 8.0 8.3 5.0 6.0 1.49 -32.9 0.97 3.6 -17.4 ENGTEX 1.06 1.38 30.2% Buy 451 0.83 14.2 16.1 7.5 6.6 3.9 5.2 1.52 -30.3 1.01 5.0 -3.6 GADANG 1.06 1.69 59.4% Buy 700 1.10 14.2 18.1 7.5 5.8 2.8 2.8 1.37 -22.6 1.01 5.0 -4.5 GAMUDA 5.05 6.00 18.8% Buy 12,408 0.89 34.5 35.7 14.6 14.2 2.4 2.4 5.52 -8.5 4.58 10.3 1.8 IJM 2.82 2.89 2.5% Sell 10,232 1.08 13.7 18.2 20.6 15.5 3.4 3.4 3.61 -21.9 2.66 6.0 -7.5 CONSTRUCTION KAB 0.28 0.38 33.9% Buy 9 na 31.4 37.3 0.9 0.8 3.6 4.3 0.33 -15.2 0.25 14.3 -6.7 PESONA 0.39 0.55 42.9% Buy 268 1.06 5.8 4.8 6.7 8.1 3.9 3.9 0.74 -47.6 0.39 0.0 -14.4 -8.1 SENDAI 0.80 0.55 -30.8% Sell 621 1.17 9.1 8.5 8.8 9.4 1.3 1.3 1.39 -42.8 0.51 57.4 SUNCON 2.44 2.65 8.6% Buy 3,153 0.60 14.7 16.4 16.6 14.8 2.3 2.5 2.64 -7.6 1.70 43.5 -2.8 WCT 1.56 1.64 5.1% Hold 2,195 0.86 12.6 11.2 12.3 14.0 1.9 1.9 2.48 -37.0 1.46 6.8 -3.7 LITRAK 5.85 6.26 7.0% Hold 3,087 0.35 45.6 47.1 12.8 12.4 4.3 4.3 6.15 -4.9 5.40 8.3 5.4 CARLSBG 18.00 18.09 0.5% Buy 5,537 0.80 87.8 91.8 20.5 19.6 4.9 5.1 18.00 0.0 14.12 27.5 17.6 HEIM 20.40 21.64 6.1% Hold 6,163 0.38 93.0 101.3 21.9 20.1 4.1 4.5 20.54 -0.7 16.70 22.2 7.9 AEON 1.55 1.97 27.1% Sell 2,176 0.43 6.7 7.7 23.2 20.1 2.6 2.9 2.70 -42.6 1.55 0.0 -11.9 AMWAY 7.69 8.18 6.4% Buy 1,264 0.48 43.9 45.2 17.5 17.0 4.9 5.2 8.18 -6.0 7.04 9.2 4.2 F&N 30.00 33.74 12.5% Buy 10,996 0.21 122.7 145.8 24.5 20.6 2.7 3.2 31.00 -3.2 22.74 31.9 11.1 CONSUMER Brewery Retail HUPSENG 1.10 1.25 13.6% Buy 880 0.40 5.7 5.9 19.3 18.6 5.5 5.5 1.28 -14.1 1.05 4.8 0.9 JOHOTIN 1.22 1.75 43.4% Buy 379 0.69 12.8 13.5 9.5 9.1 4.1 4.4 1.76 -30.7 1.16 5.2 0.8 NESTLE 121.50 120.50 -0.8% Under Review 28,492 0.50 330.1 373.8 36.8 32.5 2.4 2.8 121.50 0.0 75.40 61.1 17.7 PADINI 5.06 4.67 -7.7% Sell 3,329 0.79 28.0 30.4 18.1 16.6 2.5 2.6 5.50 -8.0 2.70 87.5 -4.2 POHUAT 1.52 2.01 32.2% Buy 334 0.45 22.9 25.4 6.6 6.0 5.3 5.3 2.07 -26.5 1.43 6.3 -15.1 QL 4.90 3.26 -33.5% Sell 7,950 0.55 12.8 14.7 38.2 33.3 0.9 1.0 4.98 -1.6 3.26 50.5 12.6 SIGN 0.61 0.92 50.8% Buy 140 0.75 6.9 9.2 8.8 6.7 4.1 5.7 1.07 -43.0 0.57 7.0 -13.5 29.90 34.72 16.1% Hold 8,537 1.37 170.8 168.8 17.5 17.7 5.4 5.4 50.59 -40.9 29.30 2.0 -25.3 GENTING 9.13 11.53 26.3% Buy 34,981 1.51 54.4 59.8 16.8 15.3 1.8 1.8 10.00 -8.7 8.70 4.9 -0.8 GENM 5.50 6.51 18.4% Buy 31,124 1.48 27.0 30.6 20.4 18.0 1.6 1.8 6.38 -13.8 4.87 12.9 -2.3 2.25 3.34 48.4% Buy 3,031 0.66 21.5 26.0 10.5 8.6 7.1 8.0 2.98 -24.5 2.20 2.3 0.4 CCMDBIO 2.80 2.70 -3.6% Buy 781 0.89 15.0 16.1 18.6 17.4 3.5 3.7 3.03 -7.6 1.97 42.1 10.7 IHH 6.13 6.40 4.4% Buy 50,509 0.76 11.9 15.0 51.6 41.0 0.5 0.6 6.33 -3.2 5.42 13.1 4.6 KPJ 0.95 1.12 17.9% Buy 4,005 0.51 3.7 4.2 25.4 22.8 2.2 2.4 1.14 -16.7 0.87 9.2 -2.1 HARTA 11.82 7.80 -34.0% Sell 19,557 1.16 25.2 28.9 46.9 40.9 1.3 1.5 12.18 -3.0 4.68 152.6 10.7 KOSSAN 8.68 8.80 1.4% Buy 5,551 0.50 38.3 43.0 22.7 20.2 2.2 2.5 8.79 -1.3 5.62 54.4 7.0 SUPERMX 2.46 2.70 9.8% Buy 1,613 0.41 20.0 22.6 12.3 10.9 2.8 3.1 2.55 -3.5 1.69 45.6 23.0 TOPGLOV 9.63 9.35 -2.9% Sell 12,092 0.57 41.6 50.8 23.2 19.0 1.5 1.8 10.00 -3.7 4.56 111.2 20.5 KAREX 1.06 1.00 -5.7% Sell 1,063 0.64 2.8 5.2 38.4 20.4 0.7 1.2 2.39 -55.6 1.03 2.9 -18.5 SCIENTX 8.40 9.84 17.1% Buy 4,107 0.85 67.5 74.1 12.5 11.3 2.1 2.3 9.85 -14.7 7.00 20.0 -3.0 SKPRES 1.86 2.20 18.3% Buy 2,325 0.83 10.4 14.8 17.9 12.6 2.8 4.0 2.35 -20.9 1.24 50.0 -18.4 ASTRO 2.60 3.10 19.2% Buy 13,556 0.92 14.0 13.7 18.6 19.0 5.0 5.2 2.94 -11.6 2.40 8.3 -1.9 MEDIA PRIMA 0.61 0.45 -26.2% Sell 677 1.36 -3.8 -1.7 na na 0.0 0.0 1.28 -52.3 0.58 5.2 -19.7 STAR 1.36 1.25 -8.1% Sell 1,004 1.10 6.7 6.7 20.2 20.2 8.8 8.8 2.22 -38.7 1.31 3.8 -17.6 Tobacco BAT GAMING Casino NFO BJTOTO HEALTHCARE Hospitals/ Pharmaceutical Rubber Gloves INDUSTRIAL MEDIA
9. 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 PER (X) Div Yield (%) FY19 FY18 FY19 FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.47 0.72 54.8% Buy 816 1.47 4.2 4.5 11.1 10.3 2.2 2.2 0.69 -32.6 0.38 24.0 -4.1 LCTITAN 5.18 6.10 17.8% Buy 11,774 na 56.3 60.9 9.2 8.5 4.8 5.2 6.53 -20.7 4.14 25.1 10.2 MHB 0.86 0.81 -5.3% Sell 1,368 1.37 0.5 1.7 177.7 51.2 0.0 0.0 1.16 -26.3 0.63 36.8 3.6 MISC 7.11 7.00 -1.5% Sell 31,738 1.14 50.1 53.8 14.2 13.2 4.2 4.2 7.90 -10.0 6.89 3.2 -4.2 PANTECH 0.63 0.69 10.4% Buy 466 1.25 6.1 6.8 10.3 9.2 4.4 4.9 0.74 -15.5 0.47 34.4 -3.1 PCHEM 8.10 8.84 9.1% Hold 64,800 0.89 52.5 53.8 15.4 15.1 3.2 3.2 8.28 -2.2 6.80 19.1 5.2 SAPNRG 0.70 1.25 79.9% Buy 4,165 2.01 -6.5 -5.0 na na 0.0 0.0 2.10 -66.9 0.66 5.3 -2.1 SERBADK 3.49 4.16 19.2% Buy 5,125 na 27.7 32.7 12.6 10.7 2.3 2.9 3.66 -4.6 1.63 114.1 7.7 UMWOG 0.33 0.51 54.5% Buy 2,711 1.75 0.4 1.2 81.7 26.6 0.0 0.0 0.69 -52.4 0.27 22.2 8.2 UZMA 1.35 1.56 15.6% Sell 432 0.88 13.1 14.2 10.3 9.5 0.0 0.0 1.98 -31.8 1.26 7.1 5.5 FGV 2.03 2.01 -1.0% Sell 7,406 1.48 3.7 4.5 54.8 44.7 2.5 2.5 2.18 -6.9 1.51 34.4 20.1 IJMPLNT 2.30 2.69 17.0% Sell 2,025 0.18 9.1 12.5 25.2 18.3 3.5 3.9 3.40 -32.4 2.28 0.9 -16.1 IOICORP 4.75 4.12 -13.3% Sell 29,848 0.90 21.0 21.7 22.6 21.9 3.4 6.3 4.81 -1.2 4.31 10.2 4.6 KFIMA 1.55 1.89 21.9% Buy 437 0.69 13.3 14.5 11.7 10.7 5.8 5.8 1.96 -20.9 1.45 6.9 -1.3 KLK 25.50 27.07 6.2% Hold 27,157 0.62 120.7 125.7 21.1 20.3 2.4 2.4 25.78 -1.1 23.66 7.8 2.0 SIMEPLT 5.55 6.25 12.6% Buy 37,745 na 21.0 22.1 26.4 25.2 2.5 2.7 6.00 -7.5 4.58 21.2 -7.5 TSH 1.59 2.10 32.1% Buy 2,195 0.54 9.3 9.6 17.1 16.6 1.5 1.5 1.91 -16.8 1.56 1.9 -3.6 UMCCA 6.31 6.73 6.7% Sell 1,323 0.40 22.7 34.8 27.8 18.1 2.7 2.9 7.08 -10.9 5.76 9.5 -3.1 GLOMAC 0.54 0.46 -14.8% Sell 429 0.71 3.0 4.4 18.3 12.2 3.7 3.7 0.67 -19.7 0.50 9.1 -2.6 HUAYANG 0.60 0.58 -2.5% Sell 209 0.90 0.7 3.4 91.1 17.5 0.8 0.8 1.19 -50.0 0.58 3.5 -2.5 IBRACO 0.73 0.92 26.0% Hold 362 na 9.1 12.4 8.0 5.9 5.5 6.8 0.98 -25.1 0.50 46.0 -10.4 IOIPG 2.01 2.02 0.5% Hold 11,067 0.84 16.5 16.3 12.2 12.3 3.0 3.0 2.22 -9.5 1.79 12.3 8.6 MAHSING 1.22 1.69 38.5% Buy 2,962 0.93 13.0 12.6 9.3 9.7 5.3 5.3 1.64 -25.6 1.21 0.8 -15.9 PLANTATIONS PROPERTY SIMEPROP 1.45 1.61 11.0% Sell 9,861 na 9.2 9.1 15.8 15.9 1.4 1.4 1.78 -18.5 1.04 39.4 -18.5 SNTORIA 0.63 0.76 20.6% Buy 355 0.11 8.3 8.6 7.6 7.3 1.6 1.6 0.91 -30.7 0.56 12.5 -9.4 SPB 4.90 5.28 7.8% Hold 1,684 0.68 21.2 26.1 23.2 18.7 2.4 2.4 5.50 -10.9 4.39 11.6 0.0 SPSETIA 3.25 3.77 16.0% Buy 12,198 0.95 21.3 21.9 15.2 14.9 3.7 3.7 4.38 -25.9 3.07 5.9 -18.8 SUNWAY 1.69 1.74 3.0% Hold 8,274 0.92 11.9 12.6 14.2 13.4 3.0 3.6 1.96 -13.7 1.31 28.9 3.7 SUNREIT 1.74 1.87 7.5% Hold 5,124 0.86 10.0 10.7 17.3 16.3 5.8 6.1 1.90 -8.4 1.64 6.1 -8.4 CMMT 1.14 1.64 43.9% Buy 2,323 0.69 7.9 8.6 14.4 13.2 7.2 7.8 1.83 -37.7 1.14 0.0 -37.7 REIT POWER & UTILITIES MALAKOF 0.94 1.16 24.1% Buy 4,656 0.89 6.0 6.8 15.6 13.7 7.5 7.5 1.30 -28.1 0.86 8.7 -4.6 PETDAG 25.30 22.08 -12.7% Sell 25,134 0.39 105.1 105.7 24.1 23.9 3.1 3.1 26.20 -3.4 21.00 20.5 4.3 PETGAS 17.80 19.10 7.3% Buy 35,221 0.87 98.8 99.5 18.0 17.9 3.9 3.9 21.04 -15.4 15.82 12.5 1.8 TENAGA 15.72 18.33 16.6% Buy 89,069 0.56 131.3 127.5 12.0 12.3 4.3 4.1 16.12 -2.5 13.44 17.0 3.0 YTLPOWR 1.21 1.17 -3.3% Sell 9,406 0.90 9.8 10.3 12.3 11.8 4.1 4.1 1.50 -19.3 1.11 9.0 -6.2 TELECOMMUNICATIONS AXIATA 5.67 6.50 14.6% Buy 51,304 1.55 15.9 19.5 35.6 29.1 1.4 2.8 5.82 -2.6 4.24 33.7 3.3 DIGI 4.89 5.15 5.3% Hold 38,020 0.94 19.7 20.4 24.8 24.0 4.0 4.2 5.19 -5.8 4.36 12.2 -4.1 MAXIS 6.11 6.05 -1.0% Sell 47,723 1.09 25.2 25.0 24.2 24.4 3.1 3.1 6.60 -7.4 5.48 11.5 1.7 TM 6.00 7.20 20.0% Buy 22,548 0.64 23.2 24.9 25.9 24.1 3.5 3.7 6.69 -10.3 5.85 2.6 -4.8 ELSOFT 2.60 2.70 3.8% Hold 715 0.73 13.4 15.3 19.4 17.0 3.6 4.1 2.95 -11.9 1.58 64.4 -3.7 IRIS 0.20 0.25 28.2% Buy 482 2.40 0.6 0.7 35.2 29.2 0.0 0.0 0.25 -20.4 0.12 69.6 5.4 INARI 3.49 3.35 -4.0% Under Review 7,207 0.71 14.0 15.7 24.9 22.2 2.9 3.2 3.82 -8.6 1.85 89.0 2.6 TECHNOLOGY Semiconductor & Electronics Note: INARI proposed bonus issue shares on the basis of 1 for 2. For more detail please refer to 30.01.18 report. MPI 9.53 10.70 12.3% Hold 1,895 0.70 73.9 86.9 12.9 11.0 3.4 3.4 14.52 -34.4 8.62 10.6 -24.5 UNISEM 2.84 3.25 14.4% Under Review 2,084 1.11 19.0 20.3 15.0 14.0 4.2 4.2 4.25 -33.2 2.52 12.7 -22.2 TRANSPORTATION Airlines AIRASIA 4.30 3.83 -10.9% Buy 14,370 1.34 38.3 39.8 11.2 10.8 1.2 1.4 4.38 -1.8 2.58 66.7 28.4 AIRPORT 8.62 8.64 0.2% Sell 14,302 1.31 19.7 20.1 43.7 42.8 2.1 1.4 9.45 -8.8 6.35 35.7 -1.9 Freight & Tankers PTRANS 0.30 0.46 55.9% Buy 372 na 2.4 3.8 12.4 7.8 2.4 3.6 0.38 -22.7 0.15 96.7 5.4 TNLOGIS 1.16 1.80 55.2% Buy 530 1.09 13.6 14.0 8.5 8.3 4.3 4.3 1.83 -36.7 1.11 4.5 -13.4 WPRTS 3.68 4.06 10.3% Buy 12,549 0.49 15.6 20.0 23.6 18.4 1.0 1.3 4.19 -12.2 3.12 17.9 -0.5 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 28.66 30.50 6.4% Buy 73,481 1.19 212.8 246.6 13.5 11.6 2.3 2.4 28.8 -0.5 18.35 56.2 15.3 OCBC 12.83 14.50 13.0% Buy 53,703 1.22 109.5 123.2 11.7 10.4 6.7 7.7 13.3 -3.7 9.41 36.3 3.6 UOB 27.22 27.80 2.1% Hold 45,256 1.16 216.6 243.9 12.6 12.6 2.9 2.9 28.5 -4.4 21.01 29.6 2.9 PLANTATIONS WILMAR 3.05 3.63 19.0% Hold 19,516 0.81 29.9 31.8 10.2 9.6 2.6 3.0 4.0 -22.8 2.97 2.7 -1.3 IFAR 0.37 0.53 45.2% Hold 524 0.99 5.2 5.7 7.0 6.4 3.5 3.8 0.6 -34.8 0.35 4.3 -6.4 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.
10. RESULTS UPDATE Wednesday , February 21, 2018 FBMKLCI: 1,855.99 Sector: Consumer THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Nestle (Malaysia) Berhad TP: RM120.50 (-0.8%) Last Traded: RM121.50 Costs Optimisation Expanded Margins Damia Othman Tel: +603-2167-9602 Under Review damia@ta.com.my Review Nestle’s (Malaysia) Berhad’s FY17 adjusted net earnings came in slightly below our full-year forecast but within consensus’ estimates of 94% and 98% respectively. This was after excluding exceptional items of RM4.1mn. FY17 adjusted net profit improved by 7.7% YoY to RM641 due to: i) increase in revenue by 3.9% YoY to RM5.3bn and; ii) operating profit margin expanded by 1.1%-pts to 16% in FY17. The revenue increase was attributable to: i) stronger domestic and export sales of 4.1% and 3.0% respectively; ii) commendable contributions from new products i.e. NESCAFE Black Ice, MAGGI Hot Mealz and Nestum Mango Tango; as well as iii) continued investment in marketing-trade initiatives. Operating profit increased by 6.1% YoY to RM847.9mn on the back of i) effective costs management; and ii) efficient marketing-trade investments. 4QFY17 adjusted net profit increased by 12.9% QoQ to RM142.4mn despite revenue declining by 3.1% QoQ to RM1.3bn. This was due to less marketing expenses as compared to 4QFY16 due to the early Chinese New Year last year, coupled with continued efforts in costs optimisation. Net profit margin improved by 1.6%-pts QoQ to 11.1%. The board declared a final single-tier dividend of 135.0sen/share, bringing the YTD FY17 total dividend to 275.0sen/share. Impact No change to our earnings forecast pending analyst briefing this Thursday. Outlook We expect Nestle to continue benefitting from declining soft-commodity prices like skimmed-milk powder, cocoa and coffee. Also, the strengthening of the Ringgit will provide earnings support and lift to FY18 margins. Nestle focus on “Fuel The Growth” strategy has resulted in higher operational efficiency, which can be evidenced by the increase in margins. Essentially, the company will re-invest the cost savings into the group’s product portfolio to solidify its trade and consumer promotions for a sustainable growth. www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (RMmn) Par Value (RM) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) Nestle SA EPF NESZ MK 4707 Main Market 234.5 28,491.8 1.00 121.50/75.40 35.7 14.6 0.5 72.61 6.98 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 0.0 0.0 774.1 876.5 714.3 772.1 108 114 Buy (Under Review) Financial Indicators Net debt/equity (%) ROE (%) ROA (%) NTA/Share (x) Price/ NTA (x) FY18 45.4 106.1 28.2 2.8 43.3 FY19 28.5 108.2 31.2 3.1 38.7 % of FY17 94 98 Below Within Nestle 14.7 34.8 43.7 59.9 FBM KLCI 1.5 7.9 4.8 8.8 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 In 2Q18, Nestle is expected to commission a second National Distribution Centre (NDC), where the capacity is 20% higher than the current NDC to support future demand growth. Valuation We put our call Under Review with an unchanged target price of RM120.50/share based on DDM valuation (g: 3.0%, k: 6.6%), pending updates from an analyst briefing. Source: Bloomberg Page 1 of 2
11. 21-Feb-18 Earnings Summary (RMmn) FYE Dec 31 (RM mn) Revenue EBIT EBITDA EBITDA Margin Reported PBT Reported Net Profit Adj. Net Profit EPS Adj. EPS PER DPS Div. Yield FY16 5,063.5 798.8 931.6 18.4 766.5 637.1 590.2 271.7 251.7 48.3 270.0 2.2 (%) (sen) (sen) (x) (sen) (%) FY17 5,260.5 847.9 978.8 18.6 814.1 645.8 641.7 273.6 273.6 44.4 275.0 2.3 FY18E 5,700.2 963.3 1,105.0 19.4 932.7 774.1 774.1 330.1 330.1 34.2 295.0 2.6 FY19F 6,012.0 1,077.8 1,220.4 20.3 1,056.1 876.5 876.5 373.8 373.8 30.2 335.0 3.0 FY20F 6,341.5 1,246.6 1,391.3 21.9 1,229.3 975.2 975.2 415.8 415.8 29.2 375.0 3.1 FY17 Results Analysis (RMmn) FYE Dec 31 (RM'mn) Revenue Costs of sales Gross Profit Operating expenses EBIT Adj. EBIT Net interest Exceptional Item Associates Profit Before Tax Taxation Reported Net profit Adj. Net Profit Adj. EPS (sen) DPS (sen) EBIT Margin PBT Margin Net Margin Tax rate (%) (%) (%) (%) 4QFY16 1,249.9 (792.3) 457.6 (367.2) 90.4 72.8 (8.5) 17.6 (0.4) 81.5 (14.6) 66.9 49.4 21.0 130.0 3QFY17 1,323.3 (872.4) 450.8 (297.1) 153.7 160.0 (8.9) (6.3) 0.3 145.1 (25.3) 119.7 126.1 53.8 70.0 4QFY17 1,281.7 (819.3) 462.4 (287.5) 175.0 183.8 (9.1) (8.8) (0.1) 165.8 (32.2) 133.5 142.4 60.7 135.0 QoQ (%) (3.1) (6.1) 2.6 (3.3) 13.8 14.8 2.1 39.6 nm 14.3 27.2 11.5 12.9 12.9 92.9 YoY (%) 2.5 3.4 1.1 (21.7) 93.6 >+100 6.9 nm nm >+100 >+100 99.5 >+100 >+100 3.8 FY16 5,063.5 (3,066.1) 1,997.5 (1,198.7) 798.8 757.3 (32.7) 47.0 0.4 766.5 (129.4) 637.1 590.2 251.7 270.0 FY17 5,260.5 (3,330.1) 1,930.3 (1,082.4) 847.9 843.8 (34.6) 4.1 0.8 814.1 (168.3) 645.8 641.7 273.6 275.0 YoY (%) 3.9 8.6 (3.4) (9.7) 6.1 11.4 5.7 (91.2) 91.5 6.2 30.1 1.4 8.7 7.7 1.9 5.8 6.5 3.9 17.9 12.1 11.0 9.5 17.5 14.3 12.9 11.1 19.4 %-points 2.2 2.0 1.6 2.0 %-points 8.5 6.4 7.2 1.6 15.0 15.1 11.7 16.9 16.0 15.5 12.2 20.7 %-points 1.1 0.3 0.5 3.8 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, February 21, 2018, the analyst, Damia Othman, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 2
12. RESULTS UPDATE Wednesday , February 21, 2018 FBMKLCI: 1,855.99 Sector: Oil & Gas THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Petronas Chemicals Group Bhd TP: RM8.84 (+9.2%) Last Traded: RM8.10 Ending FY17 on a Good Note Kylie Chan Sze Zan Tel: +603-2167 9601 HOLD kyliechan @ta.com.my Review Petronas Chemicals Group’s (Pet Chem) FY17 core profit of RM4.2bn (+35% YTD) was within our expectations but surpassed consensus estimates by 7%. www.taonline.com.my Share Information Bloomberg Code Share Cap (mn) FY17 production and sales volumes surged despite lower plant utilization (PU) of 93% (FY16: 96%) (Figure 1). This was attributed to SAMUR’s startup in May-17, which contributed a chunky 46% of total group’s urea production. Evidently, urea volumes spiked 62% YTD. Estimated Free Float (%) Lower taxes were attributed to GIFT tax incentives at Labuan, coupled with one-off tax allowance for SAMUR in 3Q17. This more than offset recognition of deferred tax liabilities for SAMUR in 4Q17. 5218 Listing Overall FY17 was a good year for Pet Chem, underpinned by: 1) stronger product prices, 2) higher sales volumes (+11%), 3) higher production (+10%), 4) stronger USD, and 5) lower taxes, with effective tax rate of 16% (FY16: 22%). FY17 PU was dragged by statutory plant turnarounds (TA) at the ammonia, MTBE and derivatives plants. In 4Q17, there was also a mini TA for PC Methanol (PCM) Plant 1, and corrective maintenance at PCM Plant 2. PCHEM MK Stock Code Main Market 8,000 Market Cap (RMmn) 64,800 Par Value (RM) 0.10 52-wk Hi/Lo (RM) 6.80/8.28 12-mth Avg Daily Vol ('000 shrs) 7,898.0 23.0 Beta Major Shareholders (%) 0.8 Petronas - 64 EPF - 7.3 Forecast Revision (%) FY18 Forecast Revision (%) FY19 5.5 2.4 Core Net Profit (RM mn) 4,200.5 4,305.2 Consensus 3,982.0 4,121.0 105.5 104.5 TA/Consensus (%) Previous Rating Hold (Maintained) Scorecard 4Q17 associate contribution slipped to losses (3Q17: RM56mn profit) due to gestational loss at the new HR-PIB plant (commissioned: Dec-17). The group recognised depreciation costs for the plant although production has yet to fully ramp-up. We expect FY18 results to be stronger, due to full-year contribution from SAMUR (start: May-17), coupled with higher product prices. However, this would be partially offset by lower PU arising from heavy statutory TA, particularly at PChem’s ethylene cracker. Pet Chem declared 2nd interim DPS of 15 sen (4Q16: 12 sen), thus bringing FY17 DPS to 27 sen (FY16: 19 sen). This implies a 52% payout, similar to FY16. Key Takeaways from Conference Call Operations at the 60:40 BASF-Pet Chem Citral plant are stabilising, whilst the Citronellol and L-menthol plants are on-track for phased commissioning in FY18. % of FY vs TA vs Consensus 99 Within 107 Above Financial Indicators Net Debt/Equity (x) FY18 FY19 Net Cash Net Cash ROA (%) 12.0 11.5 ROE (%) 13.5 12.8 NTA/Share (RM) 3.9 4.2 P/NTA (x) 2.1 1.9 Share Performance Price Change (%) PCHEM FBMKLCI 1 mth 0.0 1.5 3 mth 11.3 8.0 6 mth 12.8 4.5 12 mth 8.3 8.4 (12-Mth) Share Price relative to the FBMKLCI In 1H18, the MTBE plant (capacity: 300k tpa) at Gebeng IPC will undergo plant TA. Meanwhile, plants that will undergo major statutory TA in 2H18 include: 1) Ethylene Cracker 1, 2) Asean Bintulu Fertilizer, and 3) Methanol plant. In spite of this, management maintains its FY18 guidance of PU exceeding 90%. Source: Bloomberg Page 1 of 4
13. 21-Feb-18 Impact We incorporate FY17 earnings and management ’s fresh guidance into our forecasts. This has resulted in: 1) increase in dividend payout to 50% (previous: 40%), 2) lower tax rate of 16% (previous: 18%), and 3) tweak in PU levels. Also, we change our FY18-19 ringgit assumption to USD/MYR assumption to 4.00 (previous: 4.15). As a result, our FY18/19 forecasts are raised by 6%/2%. Valuation Following the revision to our forecasts, our TP for Pet Chem is raised to RM8.84 (previous: RM8.05) based on unchanged 11.5x FY18 EV/EBITDA. Maintain Hold. We believe that Pet Chem is unable to fully leverage on stronger product prices, due to heavy statutory TA in FY18, particularly at the group’s upstream ethylene cracker. The latter will cause associated downstream plants to be shut down in tandem. Additionally, margins will also be squeezed given that spreads are higher for ethane-based products. Furthermore, FY17’s robust earnings growth would unlikely be replicated in FY18, as the prior year was boosted by: 1) one-off SAMUR tax allowances, 2) surprise dip in taxes due to GIFT tax incentives, and 3) exceptionally high plant utilisation in FY17. On top of that, we believe sentiment on the stock is largely influenced by operational performance, particularly PU levels. Table 1: Earnings Summary FYE Dec (RM mn) 2016 2017 2018E 2019F 2020F Revenue 13,860.0 17,407.0 18,022.5 18,179.6 19,446.3 EBITDA 5,299.0 6,625.0 6,764.1 7,013.9 7,535.0 38.2 38.1 37.5 38.6 38.7 Pretax Profit 4,110.0 5,236.0 5,284.3 5,416.1 5,816.7 Reported Net Profit 2,932.0 4,177.0 4,200.5 4,305.2 4,623.7 Core Net Profit 3,109.0 4,184.0 4,200.5 4,305.2 4,623.7 (sen) 38.9 52.3 52.5 53.8 57.8 EPS growth (%) 12.9 34.6 0.4 2.5 7.4 PER (x) 20.8 15.5 15.4 15.1 14.0 DPS (sen) 19.0 27.0 26.0 26.0 28.0 (%) 2.3 3.3 3.2 3.2 3.5 EBITDA margin EPS Dividend Yield (%) Page 2 of 4
14. 21-Feb-18 Table 2 : FY17 Results Analysis Cumulative YE 31 Dec (RM mn) 4Q17 3Q17 QoQ 4Q16 YoY FY17 FY16 YoY Revenue 4,740.0 4,013.0 18.1 3,947.0 20.1 17,407.0 13,860.0 25.6 Core EBITDA 1,779.0 1,482.0 20.0 1,579.0 12.7 6,625.0 5,299.0 25.0 21.2 (1,589.0) (1,337.0) 18.8 Depreciation Finance Costs Associates EI Pretax Profit Taxation Minority Interest (423.0) (414.0) 2.2 (349.0) (5.0) (5.0) 0.0 (9.0) (44.4) 191.0 308.0 (43.0) 56.0 >-100 (21.0) >100 16.0 17.0 (5.9) 14.0 (3.0) >-100 (27.0) >-100 (7.0) (177.0) (96.0) 1,322.0 1,116.0 18.5 1,173.0 12.7 5,236.0 4,110.0 (38.0) 27.4 (273.0) (155.0) 76.1 (140.0) 95.0 (822.0) (888.0) (7.4) (0.0) (48.0) (99.9) (46.0) (99.9) (237.0) (290.0) (18.3) Reported Net Profit 1,049.0 913.0 14.9 987.0 6.3 4,177.0 2,932.0 42.5 Core Net Profit 1,035.0 916.0 13.0 1,014.0 2.1 4,184.0 3,109.0 34.6 Core EPS (sen) 12.9 11.5 13.0 12.7 2.1 52.3 38.9 34.6 DPS (sen) 15.0 27.0 19.0 - 12.0 EBITDA Margin 38% 37% 40% 38% 38% Core Net Margin 22% 23% 26% 24% 21% YoY% FY17 FY16 YoY% Table 3: FY17 Segmental Analysis YE 31 Dec (RM mn) 4Q17 3Q17 4Q16 QoQ% Olefins & Derivatives 2,969.0 2,633.0 2,831.0 12.8 4.9 11,362.0 9,757.0 16.4 Fertilisers & Methanol 1,813.0 1,403.0 1,147.0 29.2 58.1 6,168.0 4,228.0 45.9 Revenue Others 82.6 35.5 4,740.0 4,013.0 3,947.0 18.1 20.1 Olefins & Derivatives 963.0 852.0 1,068.0 13.0 Fertilisers & Methanol 774.0 600.0 425.0 29.0 1,727.0 1,431.0 1,484.0 20.7 16.4 Group (42.0) (23.0) (31.0) (123.0) (125.0) (1.6) 17,407.0 13,860.0 25.6 (9.8) 4,098.0 3,805.0 7.7 82.1 2,572.0 1,530.0 68.1 6,618.0 5,291.0 25.1 EBITDA Group EBITDA margin Olefins & Derivatives 32% 32% 38% 36% 39% Fertilisers & Methanol 43% 43% 37% 42% 36% Group 36% 36% 38% 38% 38% Page 3 of 4
15. 21-Feb-18 Figure 1 : Plant Utilization 100% 96% 95% 90% 85% 79% 80% 93% 85% 82% 78% 80% 75% 70% 65% 60% 55% 50% FY11 FY12 FY13 FY14 FY15 FY16 FY17 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, February 21, 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 – 2032P 5048 www.ta.com.my Page 4 of 4
16. Wednesday , 21 February, 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 P ic ks 2. 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
17. Technical View Wednesday , February 21, 2018 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Technical Stock Picks Malaysia FBM KLCI: 1,855.99 (-1.33, -0.07%) Chartist: Stephen Soo Close Name 20/Feb FBMKLCI 1855.99 Tel: +603-2167 9607 Change High Low -1.33 1,861.10 1,852.96 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 1,808.84 1,841.16 1,873.48 60.91 1,835.52 1,834.89 1,801.18 36.90 28.62 30.93 8.28 9.34 12.01 (2.670) BUY MACD Recent Signal SELL DMI MACD Signal Change - - AFFIN 2.44 -0.04 2.49 2.43 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 0.018 BUY BUY - - ABMB 4.10 -0.11 4.20 4.09 4.05 4.21 4.37 54.93 4.16 4.19 4.11 22.35 21.02 27.50 1.32 0.01 0.03 (0.020) BUY SELL BUY - AMBANK 4.64 0.00 4.66 4.55 4.29 4.62 4.94 54.97 4.47 4.63 4.50 27.38 26.60 25.75 0.78 -0.02 0.00 (0.018) BUY SELL BUY - AXIATA 5.67 0.03 5.67 5.59 5.39 5.57 5.75 57.43 5.53 5.58 5.49 39.07 15.23 37.53 23.84 0.02 0.02 0.002 BUY BUY - BUY - CIMB 7.12 0.03 7.15 7.09 6.74 7.00 7.26 59.99 6.99 6.91 6.67 29.17 18.27 40.36 10.90 0.09 0.11 (0.025) BUY SELL - DIGI 4.89 -0.01 4.92 4.89 4.76 4.89 5.02 53.75 4.85 4.86 4.84 23.78 18.27 13.08 5.51 0.00 0.01 (0.005) BUY SELL BUY - GAMUDA 5.05 -0.01 5.09 5.02 4.79 5.06 5.32 53.49 4.94 5.05 4.97 31.56 19.35 21.24 12.21 -0.01 0.00 (0.010) BUY SELL - - GENTING 9.13 -0.08 9.24 9.08 8.64 9.33 10.02 49.55 9.02 9.36 9.22 22.30 23.99 24.26 -1.70 -0.11 -0.07 (0.041) SELL SELL - - GENM 5.50 0.04 5.53 5.46 5.21 5.43 5.65 51.45 5.35 5.49 5.49 25.74 23.87 15.86 1.87 -0.04 -0.04 (0.005) BUY SELL BUY - IHH 6.13 -0.06 6.24 6.05 5.87 6.00 6.12 74.90 5.98 5.96 5.89 30.15 16.56 19.76 13.59 0.04 0.03 0.010 BUY BUY BUY BUY BUY IOICORP 4.75 0.02 4.77 4.70 4.63 4.68 4.73 64.25 4.68 4.67 4.59 18.80 21.64 18.41 -2.84 0.03 0.03 0.000 SELL BUY - MALAKOFF 0.94 0.00 0.94 0.93 0.89 0.93 0.98 50.15 0.92 0.95 0.93 21.03 22.36 17.77 -1.33 -0.02 -0.01 (0.003) SELL SELL - - MAXIS 6.11 0.03 6.11 6.00 5.91 6.04 6.16 54.93 6.01 6.03 6.00 24.71 22.03 20.69 2.69 0.01 0.01 0.001 BUY BUY BUY BUY 10.14 0.00 10.16 10.10 9.83 10.03 10.22 66.37 10.07 9.97 9.76 25.81 18.87 38.63 6.94 0.10 0.11 (0.009) BUY SELL - - MBSB MAYBANK 1.20 -0.01 1.21 1.19 1.12 1.19 1.25 56.45 1.18 1.19 1.13 21.78 18.55 15.13 3.23 0.01 0.01 (0.003) BUY SELL BUY - RHBBANK 5.23 -0.07 5.34 5.20 5.06 5.30 5.54 55.45 5.21 5.26 5.13 27.93 23.74 23.88 4.18 0.01 0.03 (0.021) BUY SELL BUY - SIME 2.72 0.01 2.78 2.70 2.59 2.82 3.06 49.63 2.74 2.79 2.54 27.59 21.89 33.96 5.70 0.03 0.07 (0.046) BUY SELL - - TENAGA 15.72 -0.02 15.78 15.70 15.62 15.77 15.93 52.41 15.74 15.76 15.58 19.00 20.29 20.33 -1.29 0.04 0.07 (0.029) SELL SELL - - TM 6.00 -0.12 6.09 5.98 5.90 6.05 6.20 53.77 6.04 6.05 6.09 27.17 17.04 16.17 10.12 0.00 -0.01 0.008 BUY BUY - - WPRTS 3.68 -0.01 3.70 3.66 3.31 3.54 3.77 57.94 3.54 3.53 3.55 21.31 18.98 14.97 2.33 0.03 0.00 0.029 BUY BUY - - AIRASIA 4.30 0.05 4.33 4.26 3.91 4.15 4.39 62.55 4.17 4.01 3.72 32.39 21.55 31.88 10.85 0.14 0.16 (0.013) BUY SELL - - AIRASIA X 0.40 0.01 0.42 0.39 0.37 0.39 0.42 53.94 0.39 0.39 0.37 26.88 20.00 30.13 6.88 0.00 0.01 (0.002) BUY SELL - - ARMADA 0.85 0.01 0.85 0.83 0.79 0.83 0.87 55.59 0.83 0.84 0.80 26.95 17.44 18.22 -23.74 0.01 0.01 (0.002) SELL SELL - - BINAPURI 0.33 0.01 0.33 0.32 0.31 0.33 0.35 38.90 0.32 0.34 0.34 11.10 34.83 26.98 6.46 -0.01 -0.01 (0.001) BUY SELL - - CMSB 4.34 0.00 4.35 4.32 3.94 4.18 4.41 64.55 4.17 4.13 3.98 28.54 22.08 21.72 2.67 0.08 0.07 0.004 BUY BUY BUY BUY DIALOG 2.68 -0.02 2.72 2.67 2.57 2.64 2.72 59.88 2.64 2.65 2.58 22.92 20.25 22.96 2.67 0.02 0.02 0.002 BUY BUY BUY BUY ECO WORLD 1.36 -0.01 1.37 1.34 1.35 1.40 1.45 36.50 1.38 1.41 1.42 9.10 25.04 26.95 -15.94 -0.02 -0.01 (0.003) SELL SELL - - EKOVEST 1.01 -0.02 1.03 1.00 0.93 1.01 1.09 53.59 0.99 1.04 1.00 27.95 18.48 20.96 9.47 0.00 -0.01 0.002 BUY BUY - BUY GADANG 1.06 0.00 1.08 1.06 1.01 1.11 1.20 40.35 1.07 1.12 1.10 16.19 23.90 29.60 -7.70 -0.02 -0.01 (0.008) SELL SELL - - HSL 1.63 0.02 1.64 1.60 1.46 1.57 1.68 61.09 1.58 1.54 1.50 32.24 22.49 15.64 9.75 0.03 0.03 (0.003) BUY SELL - - ISKANDAR 1.35 -0.01 1.36 1.35 1.32 1.36 1.39 50.21 1.35 1.38 1.36 15.64 20.91 26.13 -5.27 -0.01 -0.01 (0.001) SELL SELL - - KIMLUN 2.15 0.00 2.18 2.15 2.12 2.22 2.33 33.29 2.19 2.24 2.26 20.80 48.88 25.24 -28.08 -0.03 -0.02 (0.009) SELL SELL - - KKBE 0.93 -0.02 0.95 0.93 0.88 0.95 1.02 50.62 0.92 0.96 0.97 42.17 26.44 20.51 15.73 -0.01 -0.01 (0.000) BUY SELL - - MUDAJAYA 0.88 -0.02 0.89 0.88 0.83 0.90 0.97 49.56 0.88 0.90 0.91 30.60 23.31 15.96 7.29 -0.01 -0.01 (0.001) BUY SELL BUY - MRCB 1.14 -0.01 1.15 1.12 1.04 1.16 1.27 50.68 1.10 1.19 1.15 21.29 29.37 25.41 -8.08 -0.02 -0.01 (0.004) SELL SELL - - NAIM 1.01 -0.01 1.03 1.01 0.98 1.04 1.11 41.02 1.02 1.09 1.09 23.79 24.38 17.37 -0.59 -0.03 -0.03 (0.000) SELL SELL - - SAPURA ENERGY 0.70 -0.03 0.72 0.69 0.64 0.74 0.85 43.08 0.70 0.78 0.79 19.61 26.78 28.94 -7.17 -0.04 -0.05 0.002 SELL BUY - BUY SUNCON 2.44 -0.01 2.48 2.44 2.41 2.50 2.60 42.63 2.48 2.52 2.48 19.72 18.45 17.26 1.28 -0.01 0.00 (0.014) BUY SELL BUY - UEMS 1.12 0.00 1.13 1.11 1.05 1.14 1.22 49.93 1.10 1.15 1.11 17.60 15.08 14.95 2.52 -0.01 0.00 (0.005) BUY SELL BUY - UMWOG 0.33 -0.01 0.35 0.33 0.29 0.33 0.36 51.43 0.31 0.36 0.33 23.79 19.54 18.29 4.26 -0.01 -0.01 (0.000) BUY SELL - - WASEONG 1.46 0.00 1.47 1.44 1.34 1.42 1.51 62.07 1.40 1.38 1.29 20.96 31.43 35.25 -10.47 0.04 0.04 (0.004) SELL SELL - - WCT 1.56 -0.08 1.64 1.56 1.45 1.61 1.77 54.71 1.55 1.65 1.61 31.48 21.52 22.51 9.96 -0.03 -0.03 (0.001) BUY SELL 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 3
18. 21-Feb-18 Technical Comments : Buy Bumi Armada & Dialog Group Bumi Armada needs a convincing breakout above the 123.6%FP (RM0.90) to boost upside momentum towards the 138.2%FP (RM0.94) and 150%FP (RM0.98), while a confirmed breakout would challenge the 161.8%FP (RM1.02). Immediate support is capped at 200-day ma (RM0.75). Similarly, Dialog needs sustained strength above the 150%FP (RM2.83) to extend higher towards medium-term upside targets of 161.8%FP (RM2.90) and 176.4%FP (RM3.00), while crucial support is spotted at 76.4%FR (RM2.34). BUMI ARMADA RM0.85 (+0.005) BOLLINGER BANDS Upper Middle Lower RM RM RM SIMPLE MOVING AVERAGES 0.88 0.84 0.80 10-day 30-day 50-day RM RM RM DMI DAILY MACD Recent Signal Signal Change SELL Recent Signal Signal Change DIALOG GROUP RM RM RM SIMPLE MOVING AVERAGES 2.72 2.64 2.58 10-day 30-day 50-day BUY BUY Recent Signal Signal Change DMI Recent Signal Signal Change SELL RM2.68 (-0.02) BOLLINGER BANDS Upper Middle Lower 0.83 0.84 0.81 RM RM RM 2.65 2.65 2.58 DAILY MACD BUY BUY Page 2 of 3
19. 21-Feb-18 Daily Money Flow of FBMKLCI Malaysia Chartist : Stephen Soo No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Name FBMKLCI AMBANK ASTRO AXIATA BAT CIMB DIGI WPRTS GENTING GENM HLBANK HLFG IHH IOICORP KLK MAYBANK MAXIS MISC PCHEM PETDAG PETGAS PPB PBBANK RHBBANK IJ M SIME TM TENAGA KLCC HAP YTLCORP (RM'mn) INF LOW OUTF LOW NET FLOW 12-Feb (22.7) 0.2 (0.4) (1.0) 0.2 4.3 (0.2) 0.1 4.1 2.0 0.4 (0.2) 1.3 (1.0) (12.8) (11.1) (1.2) 0.1 4.1 (2.4) 0.3 (1.7) (19.6) 0.2 0.5 1.0 0.4 11.1 0.4 0.1 (0.1) Tel: +603-2167-9607 Total Money Flow (RM'mn) 13-Feb 14-Feb 15-Feb (6.2) 4.3 (15.0) 0.3 0.2 (0.7) 0.0 0.0 (0.0) 0.8 (1.8) (0.2) (0.5) (2.7) 0.0 (1.0) 4.4 (1.4) (1.0) 0.6 0.6 0.2 0.4 (0.3) (0.1) 1.8 (15.9) 12.6 0.5 3.2 (0.4) 0.9 (0.6) (4.6) (11.9) (0.1) 0.3 1.2 0.2 6.2 0.8 0.1 (0.3) (0.4) 0.1 (0.1) (0.6) 1.4 0.1 0.1 (0.7) (11.0) (0.5) 0.3 0.4 (2.2) (4.3) 0.1 (0.3) (0.9) 0.1 1.0 3.6 (0.3) 17.8 (0.0) 0.1 0.1 19-Feb (26.2) (0.3) 0.1 (0.2) (0.1) (0.4) (0.3) 0.4 (15.2) 1.2 0.7 0.2 (0.5) (0.3) 0.6 (4.1) (0.0) 0.3 (0.8) 0.4 (0.2) (1.1) 0.8 (0.3) (0.3) 0.2 0.1 (9.5) (0.0) 0.7 0.5 (0.1) 0.0 (13.8) 0.0 0.4 0.1 0.1 2.5 0.2 (3.7) 0.2 0.0 3.2 (0.1) (0.1) (0.2) 7.1 0.5 (0.0) 0.3 0.1 (8.8) 0.0 0.0 0.0 Total 5D MF (65.8) (0.4) (0.3) (2.4) (3.1) 6.0 (2.1) 1.3 (24.4) 2.8 3.3 (0.1) 0.8 2.3 (38.8) (6.9) (0.3) 4.0 3.8 (5.6) (0.5) (7.8) (24.5) 0.4 1.6 6.3 0.4 16.8 1.1 0.9 0.2 30.7 30.4 29.7 14.8 6.0 9.4 (51.7) (21.0) (36.6) (6.2) (25.8) 3.9 (29.0) (14.2) (33.6) (27.6) (29.1) (19.8) 18 (12) 18 (12) 16 (14) 17 (13) 13 (17) 12 (18) stsoo@ta.com.my (A) Prv . Chg (19.3) (0.9) (0.0) 1.6 2.7 (5.8) 0.3 (0.1) (13.6) 0.6 (1.0) 0.0 0.0 3.3 11.2 (3.2) (0.1) (0.4) 5.3 4.2 (0.2) 0.1 8.0 0.5 (1.0) (3.4) 0.4 (26.6) 0.0 (0.0) (0.0) (B) Cur. Chg (11.2) 0.4 0.1 0.0 (0.1) 1.0 (0.2) 0.4 (1.5) 1.2 0.3 0.1 (0.6) (2.9) 0.4 (0.4) (0.2) 0.3 (4.0) 0.5 (0.1) (0.9) (6.3) (0.8) (0.3) (0.1) 0.0 (0.7) (0.0) 0.7 0.4 12-Feb 1,830 4.39 2.58 5.58 32.12 6.90 13-Feb 1,833 4.43 2.59 5.61 32.88 6.90 4.84 3.70 8.80 5.25 17.96 18.14 6.00 4.68 25.24 10.06 5.94 7.13 7.98 25.00 17.76 17.50 21.94 5.17 2.69 2.68 6.13 15.76 7.81 9.02 1.43 4.83 3.60 8.86 5.26 18.00 18.28 6.00 4.70 25.28 10.10 6.02 7.08 7.98 25.00 17.80 17.44 22.02 5.15 2.88 2.68 6.07 15.74 7.90 9.10 1.40 OUTFLOW CLOSING PRICE 14-Feb 15-Feb 1,835 1,838 4.48 4.51 2.57 2.60 5.60 5.60 29.60 30.20 6.96 7.01 4.83 3.58 8.92 5.34 18.20 18.32 6.00 4.71 25.22 10.12 6.04 7.08 8.08 25.02 17.50 17.50 22.04 5.20 2.80 2.65 6.06 15.70 7.90 9.13 1.42 4.88 3.70 9.01 5.38 18.22 18.26 6.04 4.71 25.26 10.10 6.04 7.04 8.10 25.12 17.50 17.50 21.84 5.21 2.76 2.67 6.06 15.70 7.90 9.14 1.42 19-Feb 1,857 4.64 2.62 5.64 30.24 7.09 4.90 3.69 9.21 5.46 18.48 18.96 6.19 4.73 25.44 10.14 6.08 7.16 8.10 25.24 18.66 17.58 21.98 5.30 2.81 2.71 6.12 15.74 7.90 9.16 1.47 Chg 19.04 0.13 0.02 0.04 0.04 0.08 0.02 (0.01) 0.20 0.08 0.26 0.70 0.15 0.02 0.18 0.04 0.04 0.12 0.00 0.12 1.16 0.08 0.14 0.09 0.05 0.04 0.06 0.04 0.00 0.02 0.05 (A+B) DMF OUT OUT IN IN IN OUT IN IN OUT IN OUT IN OUT IN IN OUT OUT OUT IN IN OUT OUT IN OUT OUT OUT IN OUT IN IN IN Daily Trading Participation COMPANIES INFLOW www.taonline.com.my Date Retail Ins titution Foreign Total 12-F eb 13-F eb 14-F eb 15-F eb 19-F eb 16.0% 13.7% 20.0% 21.8% 27.6% 57.7% 53.9% 57.4% 54.6% 49.7% 26.3% 32.4% 22.6% 23.6% 22.7% 100% 100% 100% 100% 100% Sources: Bloomberg, TA Securities Daily Money Flow (DMF) Formulation If previous change (A) + current change (B) > 0, then DMF = “IN”; AND if (A) + (B) < 0, then DMF = “OUT”. Money Flow (MF) Calculation The value of money flow is set to zero at the start of the trading day. When a trade is performed, its price is compared to the price of the previous trade (the first trade of the day is compared to the previous day's close). If the prices differ, the money associated with the trade (price times number of shares) is added to or subtracted from the money flow. Additions (inflows, buys) are done on upticks; subtractions (outflows, sells) are done on downticks. Daily Money Flow (DMF) Interpretation In general, money flow trends confirm price trends. As prices rise, money flows are usually positive. As prices fall, money flows are usually negative. A divergence, however, between money flow and price trend can be a signal of a future price trend change. For example, a falling stock price with a positive money flow (IN) can indicate a future rally in the price of the stock. Conversely, a rising stock price with a negative money flow (OUT) implies potential correction in the stock price. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Wednesday, February 21, 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 3 of 3
20. Technical View Wednesday , February 21, 2018 FBMKLCI: 1,855.99 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Stock Screen Malaysia End Day Census of 20.02.2018 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 RSI Lower Middle Upper 14-day 10-day 30-day 50-day Vol 20-day avg vol 1 HENGYUAN REFINING CO BHD 14.12 12.21 13.49 14.77 52.74 13.20 14.34 14.18 6,180,700 2 PUBLIC BANK BERHAD 22.08 20.81 21.66 22.52 66.29 21.90 21.35 21.01 4,419,000 4,419,415 5,946,435 3 TOP GLOVE CORP BHD 9.63 8.78 9.34 9.90 62.57 9.23 9.18 8.41 3,933,800 3,668,265 4 PENTAMASTER CORP BHD 2.60 2.15 2.50 2.86 53.60 2.35 2.66 2.62 3,012,700 4,003,200 5 HIBISCUS PETROLEUM BHD 0.98 0.74 0.95 1.15 54.28 0.87 0.98 0.92 47,558,300 53,623,540 6 GENTING MALAYSIA BHD 5.50 5.22 5.44 5.66 53.44 5.35 5.49 5.49 4,053,700 6,952,550 7 CIMB GROUP HOLDINGS BHD 7.12 6.77 7.01 7.26 61.21 6.99 6.91 6.67 12,147,700 19,166,950 8 KRONOLOGI ASIA BHD 0.76 0.62 0.75 0.87 47.32 0.70 0.79 0.87 2,501,200 3,863,300 9 PRESS METAL ALUMINIUM HOLDIN 5.75 5.52 5.68 5.84 58.93 5.66 5.64 5.42 2,184,100 5,454,025 10 AXIATA GROUP BERHAD 5.67 5.39 5.58 5.76 59.42 5.53 5.58 5.49 3,661,700 7,264,010 11 MALAYAN BANKING BHD 10.14 9.86 10.04 10.23 66.37 10.07 9.97 9.76 10,238,800 12,881,220 12 JAKS RESOURCES BHD 1.78 1.67 1.77 1.87 54.55 1.80 1.74 1.64 4,537,900 3,975,485 13 CAELY HOLDINGS BHD 1.08 0.92 1.04 1.16 56.21 1.00 1.09 0.94 2,139,600 2,533,555 14 INARI AMERTRON BHD 3.49 3.12 3.35 3.57 58.49 3.29 3.39 3.38 3,678,900 9,281,620 15 AIRASIA BHD 4.30 3.97 4.17 4.37 64.58 4.17 4.01 3.72 5,030,300 11,776,140 16 COMFORT GLOVE BHD 1.12 0.97 1.08 1.19 56.89 1.03 1.10 1.09 3,478,500 2,415,035 17 MALTON BHD 0.96 0.84 0.93 1.03 53.83 0.90 0.96 0.95 2,573,500 1,861,135 18 LION INDUSTRIES CORP BHD 1.34 1.19 1.30 1.41 54.17 1.27 1.33 1.34 1,789,000 2,147,920 19 PROLEXUS BHD 0.66 0.52 0.62 0.72 48.64 0.58 0.67 0.78 2,063,800 511,730 20 GABUNGAN AQRS BHD 1.95 1.76 1.89 2.01 54.67 1.84 1.95 1.94 1,992,600 2,083,740 21 MY EG SERVICES BHD 2.63 2.39 2.54 2.69 65.76 2.49 2.55 2.39 19,602,200 11,207,720 22 SINO HUA-AN INTERNATIONAL 0.57 0.46 0.54 0.62 58.98 0.51 0.54 0.44 98,791,500 73,262,700 23 T7 GLOBAL BHD 0.61 0.49 0.58 0.66 63.28 0.59 0.54 0.48 9,734,600 16,264,070 24 DIALOG GROUP BHD 2.68 2.57 2.65 2.72 56.84 2.64 2.65 2.58 6,787,300 12,107,750 25 FELDA GLOBAL VENTURES 2.03 1.80 1.94 2.07 60.78 1.87 1.96 1.87 13,149,300 10,626,420 26 KUB MALAYSIA BHD 0.47 0.40 0.46 0.51 56.34 0.43 0.47 0.44 4,622,400 1,973,785 27 SIME DARBY PLANTATION BHD 5.55 5.43 5.51 5.59 54.87 5.50 5.52 5.45 2,186,500 6,102,440 28 PANSAR BHD 0.81 0.30 0.57 0.84 89.32 0.64 0.51 0.47 5,662,100 3,020,360 29 PETRONAS CHEMICALS GROUP BHD 8.10 7.93 8.03 8.13 60.33 8.02 8.07 7.87 17,843,800 8,544,815 30 KRETAM HOLDINGS BHD 0.84 0.58 0.73 0.87 77.77 0.77 0.68 0.62 7,862,700 6,982,570 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