Bursa Malaysia Daily Market Report - 21 June

Transcription

1. Wednesday , 21 June, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED REPORTS’ News 1. Daily Market Commentary 2. Daily Brief Fundamental Reports 1. 2. 3. 4. Axiata Group Berhad: edotco Expands Presence in Pakistan Berjaya Sports Toto Berhad: Higher Prize Payout in FY17 Scientex Berhad: Performance on Track Top Glove Corporation Berhad: Anticipate a Stronger 4QFY17 Technical Reports 1. Daily Technical Stock Picks 2. Daily Stock Screen 3. Foreign Technical Stock Watch (AUS, HK & FSSTI) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research
2. Daily Note Daily Market Commentary (A Participating Organisation of Bursa Malaysia Securities Bhd) Menara TA One, 22 Jalan P Ramlee, 50250 Kuala Lumpur Tel : 603 - 2072 1277. Fax : 603 - 2032 5048 Wednesday, 21 June 2017 TA Research e-mail : taresearch@ta.com.my For Internal Circulation Only Review & Outlook KLSE Market Statistics (20.06.2017) Volume (mil) +/-chg (RMmn) Main Market 1,105.2 -3.3 2,080.9 Warrants 199.4 -28.3 20.9 ACE Market 486.0 -83.8 75.0 Bond 15.8 -4.1 5.1 ETF 0.1 -0.04 0.1 Total 1,806.4 2,182.0 Off Market 148.2 16.8 80.6 Value +/-chg 303.8 -3.6 -9.9 -2.6 -0.02 - Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP June 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 (mn) 80.4 40.0 11.0 10.5 2.9 1.0 Up Down 227 377 38 114 42 49 2 3 2 1 311 544 % chg % YTD chg 1,780.71 12,657.97 17,324.14 1,787.50 -8.19 -58.39 -23.75 -3.00 -0.46 -0.46 -0.14 -0.17 8.47 10.39 17.73 9.29 21,467.14 6,188.03 7,472.71 20,230.41 2,369.23 25,843.04 3,230.42 1,578.62 5,791.90 3,140.01 1,879.06 5,757.25 -61.85 -50.98 -51.10 162.66 -1.67 -81.51 -16.76 -2.52 50.00 -4.36 2.21 -47.92 -0.29 -0.82 -0.68 0.81 -0.07 -0.31 -0.52 -0.16 0.87 -0.14 0.12 -0.83 8.63 14.95 4.62 5.84 16.91 17.47 12.14 2.31 9.35 1.17 -4.57 1.61 Off Market CSL MQTECH KSENG BIMB WZSATU ORION Value/ Volume 1.88 0.10 0.15 0.32 1.49 1.21 0.54 @ @ @ @ @ @ (RM) 0.07 0.06 5.10 4.50 1.20 0.21 Blue chips closed lower Tuesday led by oil & gas heavyweights, as oil prices fell on global supply glut worries and investors profit-taking after recent gains. The KLCI ended at the day's low of 1,780.71, off the early high of 1,787.70, as losers beat gainers 544 to 311 on total trade of 1.8bn worth RM2.18bn. Weak technical momentum caused by the recent fall point to continuation of overbought correction until buying support resurface at lower levels. A breakdown below the 30-day moving average level at 1,777 may accelerate correction to next support from the 50-day moving average at 1,767, and better support from 1,759, the lower Bollinger band. Immediate upside hurdle stay at the 1,800 psychological level, followed by the 18 May 2015 high of 1,823. Topping out chart pattern and weak technical momentum on Genting Bhd implies downside risk towards the 23.6%FR (RM9.41), with better support from the 38.2%FR (RM9.04), while key overhead resistance is from the 26/4/17 peak (RM10.00). Bearish technical momentum on Tenaga point to overbought correction towards the 61.8%FR (RM14.00), with stronger support seen from the 50%FR (RM13.75), and immediate resistance at RM14.60 and the 26/8/16 high (RM14.90). • • • • • • Top 10 KLCI Movers Based on Mkt Cap. • Counter • TENAGA PBBANK IHH CIMB MAXIS AXIATA DIGI PETGAS GENTING MISC Mkt Cap. (RM’mn) 81,037 78,466 60,106 57,200 45,050 42,209 38,797 36,923 36,489 33,121 Chg Vol. (RM) (mn) -0.06 10.22 -0.02 3.28 -0.03 17.70 -0.05 5.71 -0.05 4.04 -0.26 17.58 -0.01 2.41 -0.22 0.83 -0.11 1.42 -0.07 0.54 • • • • News Bites Axiata Group Bhd, through wholly-owned subsidiary edotco Pakistan Pvt Ltd, is buying a Pakistani tower company for USD90mn. Top Glove Corporation Bhd is looking to venture into the condom manufacturing business by next year and the initial investment for the condom business will be around RM30mn. Sapura Resources Bhd has inked a joint venture and shareholders agreement with Destini Bhd's wholly-owned unit Destini Aviation Sdn Bhd, to take equal ownership in JV, Urban Fleet Sdn Bhd. Selangor Dredging Bhd is selling Wisma Selangor Dredging along with the land on Jalan Ampang for RM480mn cash. Astro Malaysia Holdings Bhd has launched its digital marketing arm, Blaze Digital, which will offer integrated digital solutions for marketers across Astro's 21 digital brands as well as 11 independent digital publications. Malakoff Corp Bhd has appointed its executive vice president of operations, Habib Husin, as its acting chief executive officer, with immediate effect, after resignation of its managing director. CCM Duopharma Biotech Bhd expects its gearing to increase to 0.87x from 0.25x following its uptake of RM280mn Islamic financing facilities with Ambank Islamic Bhd. PRG Holdings Bhd and landowner Sunsuria City Sdn Bhd have signed a memorandum of collaboration to promote the use of electric vehicles in Malaysia. Petroliam Nasional Bhd's consortium with Colombia's Ecopetrol came out on top of a four-way contest for Area 6 of Mexico's second bid round for shallow-water oil and gas acreage. Berjaya Sports Toto Bhd's FY17 net profit fell 22% to RM241.3mn, from RM308.6mn in FY16. It was below our expectations but within consensus. Scientex Bhd's net profit for 3QFY17 rose 8.6% YoY to RM66.5mn driven mainly by stronger exports in the group's manufacturing segment and higher progress billings for ongoing property development projects. It was within our expectations but below consensus. Federal Reserve Bank of Chicago President Charles Evans said Tuesday that the U.S. central bank can wait until the end of the year before making the decision to raise rates again, while adding it could start reducing the size of its balance sheet before that. Important Dates SEG - 5:7 Bonus Issue - BI of 516.8m shares. 5 bonus shares for every 7 existing shares. Ex-Date: 22/06/2017. Entitlement Date: 28/06/2017. LISTING ON: 29/06/2017. TDM - 1:10 Bonus Issue - BI of 150.5m shares. 1 bonus share for every 10 existing shares. Ex-Date: 29/06/2017. Entitlement Date: 03/07/2017. LISTING ON: 04/07/2017. Exchange Rate USD/MYR 4.2848 0.0063 USD/JPY 111.54 0.5700 EUR/USD 1.115 -0.0054 Commodities Futures Palm Oil (RM/mt) 2,460.00 -24.00 Crude Oil ($/Barrel) 43.34 -0.76 Gold ($/tr.oz.) 1,244.10 -1.10 DISCLAIMER The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD Kaladher Govindan, Head of Research
3. TA Securities Wednesday , June 21, 2017 FBMKLCI: 1,780.71 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Daily Brief Market View, News In Brief: Corporate, Economy, and Share Buybacks THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TA Research Team Coverage Market View Tel: +603-2072 1277 taresearch@ta.com.my www.taonline.com.my Overbought Correction to Persist Blue chips closed lower Tuesday led by oil & gas heavyweights, as oil prices fell on global supply glut worries and investors profit-taking after recent gains. The KLCI ended at the day’s low of 1,780.71, off the early high of 1,787.70, as losers beat gainers 544 to 311 on total trade of 1.8bn worth RM2.18bn. Break Below 1,777 to Test 1,767/1,759 Weak technical momentum caused by the recent fall point to continuation of overbought correction until buying support resurface at lower levels. A breakdown below the 30-day moving average level at 1,777 may accelerate correction to next support from the 50-day moving average at 1,767, and better support from 1,759, the lower Bollinger band. Immediate upside hurdle stay at the 1,800 psychological level, followed by the 18 May 2015 high of 1,823. Take Profit on Genting Bhd & Tenaga Topping out chart pattern and weak technical momentum on Genting Bhd implies downside risk towards the 23.6%FR (RM9.41), with better support from the 38.2%FR (RM9.04), while key overhead resistance is from the 26/4/17 peak (RM10.00). Bearish technical momentum on Tenaga point to overbought correction towards the 61.8%FR (RM14.00), with stronger support seen from the 50%FR (RM13.75), and immediate resistance at RM14.60 and the 26/8/16 high (RM14.90). Asian Markets Mixed as Investors Await MSCI Decision Asian stock markets traded mixed on Tuesday as investors awaited news from index provider MSCI on whether Chinese shares will be included in its Emerging Markets Index. This will be China's fourth attempt after being passed over the first three times. Speculation has been growing that MSCI might include Chinese shares to its benchmark. The blue-chip CSI300 index fell 0.2 percent to 3,546.49 points, while the Shanghai Composite Index lost 0.14 percent to 3,140.01 points amid lingering concerns over liquidity conditions. In down under, the benchmark ASX200 reversed earlier gains to trade lower by 0.82 percent to close at 5,757.30 after Moody’s downgraded Australia's big four banks credit rating. Meanwhile, Korean Kospi ended 0.07 percent lower to close at 2,369.23. Japanese stocks rose as investors saw relief in Federal Reserve Bank of New York President William Dudley’s comments and a global technology sector rebound continued amid depreciation in the yen. The Nikkei shares average rose 0.81 percent to 20,230.41. Wall Street Falls on Energy and Retail Stocks U.S stock markets retreated from their record heights on Tuesday as a sharp drop in oil prices hurt energy stocks. Oil prices fell about 2 percent after increased supply from several key producers overshadowed high compliance by OPEC and non-OPEC oil producers with a deal to cut global output. U.S. crude settled down 2.2 percent at $43.23 per barrel and Brent settled 1.9 percent lower at $46.02. Meanwhile, retail stocks were pulled down by concerns about Amazon plan to boost its apparel business. It revealed a new program called Prime Page 1 of 7
4. TA Securities 21-Jun-17 A Member of the TA Group Wardrobe that allows people to order clothing from three to 15 items at a time , without actually buying it. Amazon will charge them only for the items they keep. The S&P consumer discretionary index showed a 1.25 percent drop in line with the energy index. Investors also kept an eye on Washington as they digested remarks from House Speaker Paul Ryan on tax reform. He said the government is cutting back on regulatory red tape and that changes to the tax code must be permanent. Comments by Dallas Federal Reserve President Robert Kaplan appeared to add to investor unease about the Fed's projected pace of monetary policy tightening. The Dow Jones Industrial Average fell 61.85 points, or 0.29 percent, to 21,467.14, the S&P 500 lost 16.43 points, or 0.67 percent, to 2,437.03 and the Nasdaq Composite fell 50.98 points, or 0.82 percent, to 6,188.03. Page 2 of 7
5. TA Securities 21-Jun-17 A Member of the TA Group News In Brief Corporate Petroliam Nasional Bhd 's consortium with Colombia's Ecopetrol came out on top of a four-way contest for Area 6 of Mexico's second bid round for shallow-water oil and gas acreage. Mexico awarded 10 of 15 shallow-water areas on offer during its second bid round for shallow water acreage, with both global giants and local players participating and Pemex inking two more partnerships. (The Edge) Axiata Group Bhd, through wholly-owned subsidiary edotco Pakistan Pvt Ltd, is buying a Pakistani tower company for USD90mn (RM385.4mn). edotco Pakistan, which is held under edoctco Group Sdn Bhd, signed an agreement today with Tower Share Pvt Ltd to wholly acquire its subsidiary Tanzanite Tower Pvt Ltd. The acquisition is expected to expand edotco’s presence in Pakistan with a sizeable portfolio of about 700 towers. (Bursa Malaysia) Astro Malaysia Holdings Bhd has launched its digital marketing arm, Blaze Digital, which will offer integrated digital solutions for marketers across Astro's 21 digital brands as well as 11 independent digital publications. Blaze Digital has a cumulative average of 20mn users and a reach of over 100mn people on Facebook monthly citing data from Google Analytics. (The Edge) Malakoff Corp Bhd has appointed its executive vice president of operations, Habib Husin, as its acting chief executive officer, with immediate effect. Separately, the group announced the resignation of its managing director, Azhar, citing personal and professional reasons. (Bursa Malaysia) Top Glove Corporation Bhd is looking to venture into the condom manufacturing business by next year. While the expansion plan is still in the initial stages, the initial investment for the condom business will be around RM30mn for the machinery to set up around 10 to 20 lines. For the first year, the group targets to produce 1bn pieces per annum and the condoms will be mainly produced for OEM business overseas. (The Edge) Puncak Niaga Holdings Bhd's 98.65%-owned subsidiary in China, Sino Water Pte Ltd, is disposing of its loss-making unit for RMB350k or RM220.5k. Sino Water is selling Xinnuo Water (Binzhou) Co Ltd to Binzhou Haifu Water Co Ltd. The disposal would limit Puncak Niaga's losses from the investment as the group plans to exit its businesses in China. (Bursa Malaysia) Sapura Resources Bhd has inked a joint venture and shareholders agreement with Destini Bhd's wholly-owned unit Destini Aviation Sdn Bhd, to take equal ownership in JV, Urban Fleet Sdn Bhd. The JV which will draw on the skills, expertise and capabilities of both parties and will take part in the sale of rotary wing and fixed wing aircraft, supply and provisioning of maintenance, repair and overhaul services, and the provision of programmes like wet leasing and dry leasing of aircraft. (Bursa Malaysia) Selangor Dredging Bhd is selling Wisma Selangor Dredging along with the land on Jalan Ampang for RM480mn cash. Assuming that the proposed disposal had taken place on March 31, 2016, it is expected to give rise to a gain of RM146.8mn at the group level. (Bursa Malaysia) CCM Duopharma Biotech Bhd expects its gearing to increase to 0.87x from 0.25x following its uptake of RM280mn Islamic financing facilities with Ambank Islamic Bhd. It entered and executed the facilities to be used as capital expenditure for its new plants and machinery, and support its project and business operations. (Bursa Malaysia) Page 3 of 7
6. TA Securities 21-Jun-17 A Member of the TA Group PRG Holdings Bhd and landowner Sunsuria City Sdn Bhd have signed a memorandum of collaboration to promote the use of electric vehicles (EV) in Malaysia. The proposed collaboration is in-line with PRG’s corporate social responsibilities project of promoting EV and expanding its EV charging infrastructure to gradually reduce car emissions in Malaysia. (Bursa Malaysia) Berjaya Sports Toto Bhd reported a 30% drop in its net profit to RM72.5mn in 4QFY17, from RM104.7mn a year earlier, dragged mainly by its gaming operations in both Malaysia and the Philippines. It declared a fourth interim dividend payment of 3 sen per share for FY17. For FY17, net profit fell 22% to RM241.3mn, from RM308.6mn in FY16. (Bursa Malaysia) Scientex Bhd's net profit for 3QFY17 rose 8.6% to RM66.5mn from RM61.3mn from a year ago, driven mainly by stronger exports in the group's manufacturing segment and higher progress billings for ongoing property development projects. For 9MFY17, the group's net profit dipped to RM184.0mn from RM186.7mn. It declared interim dividend of 6 sen per share. (Bursa Malaysia) Page 4 of 7
7. TA Securities 21-Jun-17 A Member of the TA Group News In Brief Economy Asia Australia House Prices Increase 2 .2% in 1Q House prices in Australia advanced 2.2% on quarter in the first three months of 2017, which was in line with expectations and down from 4.1% in the previous three months. The capital city residential property price indexes rose in Sydney (+3.0%), Melbourne (+3.1%), Adelaide (+1.5%), Canberra (+2.8%) and Hobart (+3.4%) and fell in Perth (-1.0%) and Darwin (-0.9%). Brisbane was flat (0.0%). On a yearly basis, house prices jumped 10.2% beating forecasts for 8.9% and up from 7.7% in the three months prior. Annually, residential property prices rose in Sydney (+14.4%), Melbourne (+13.4%), Hobart (+11.3%), Canberra (+8.9%), Adelaide (+5.0%) and Brisbane (+3.5%) and fell in Darwin (5.9%) and Perth (-3.5%). The total value of residential dwellings in Australia was A$6.602 trillion at the end of the first quarter, rising A$163.122 billion over the quarter. The mean price of residential dwellings rose A$13,900 to A$669,700 and the number of residential dwellings rose by 39,800 to 9,858,400 in the quarter. (RTT News) Australia Consumer Confidence Weakens Australia's consumer confidence decreased during the week ended June 18, after remaining steady in the previous week, a weekly survey compiled by the ANZ bank and Roy Morgan Research showed. The consumer confidence index dropped to 112.4 from 112.9 in the preceding week. Households' expectations of current economic conditions increased 0.6% and their confidence in future economic conditions improved by 2.8%. The sub index measuring 'time to buy a major household item' rose by 2.0% last week. This sub-index has risen quite sharply since early May and is close to its peak at the start of the year. Consumers seemingly agree with the RBA's assessment that the weakness in GDP is temporary and have chosen to focus on the recent string of solid employment reports, including last week's data, which showed a sharp drop in the unemployment rate to 5.5% in May, the lowest since March 2013. (RTT News) United States U.S. Current Account Deficit Widens to 2.5% of GDP The U.S. current account deficit widened slightly in the first quarter, as the country imported more crude oil, car parts and supplies for its factories. The Commerce Department said the current account deficit, which measures the flow of goods, services and investments into and out of the country, expanded by 2.4% to $116.8 billion. The current account deficit for the fourth quarter was revised up to $114.0 billion from the previously reported $112.4 billion. Economists had forecast the deficit rising to $123.8 billion in the first quarter. The first-quarter current account deficit represented 2.5% of gross domestic product, up from 2.4% in the fourth quarter. The current account deficit has dropped from a record high of 6.3% of GDP in the fourth quarter of 2005 as rising domestic oil production and lower global oil prices curbed the import bill. The deficit on goods widened by $5.3 billion to $200.3 billion in the first quarter. Imports of goods rose 3.3%. The surplus on primary income - which includes investment income such as dividends, and employee compensation - fell by $3.6 billion. Primary income receipts increased $3.5 billion to $216.5 billion. The deficit on secondary income, U.S. government grants, pensions, fines and penalties, and worker remittances fell to $25.5 billion from $31.3 billion in the fourth quarter. (The Wall Street Journal) Fed’s Evans Says Rate Rise Could Wait Until December Federal Reserve Bank of Chicago President Charles Evans said Tuesday that the U.S. central bank can wait until the end of the year before making the decision to raise rates again, while adding it could start reducing the size of its balance sheet before that. “We are now at a point where we can afford, having raised the rates twice [in 2017], we can wait a little bit” to see if unexpectedly weak inflation over recent months starts to perk back up, Mr. Evans told a gathering of Wall Street Journal reporters. He said it is possible “we could wait until the end of the year” and next move interest rates higher at the December meeting, if that is what the economy’s performance calls for. “We’ve had too many experiences” of forecasting higher inflation only to see it fall short of expectations, Mr. Evans said as part of his Page 5 of 7
8. TA Securities 21-Jun-17 A Member of the TA Group argument that the Fed has time to decide on its next interest rate action . And even if the Fed holds steady for a while, he observed the central bank’s official forecasts “don’t say when [increases] are going to take place.” A year-end move would still conform to what is the current Fed outlook, he said. The official was interviewed in the wake of last week’s pivotal Federal Open Market Committee meeting. At that gathering, officials boosted their shortterm interest rate target range for the second time this year, to 1% and 1.25%, and laid out a plan for reducing their $4.5 trillion balance sheet, most likely later this year. Mr. Evans is currently an FOMC voting member. (The Wall Street Journal) Europe and United Kingdom Eurozone Current Account Surplus Dips in April The Eurozone’s current account surplus dipped in April as imports into the 19-member currency bloc increased and the services surplus eased, European Central Bank data showed. The working-day and seasonally adjusted surplus narrowed to 22.2 billion euros ($24.8 billion) from 35.7 billion euros a month earlier. The rolling 12-month surplus eased to 3.2% of the bloc's GDP from 3.4% a year earlier. The unadjusted surplus dropped to 21.5 billion euros from 46.4 billion. The ECB earlier said it expected the current account surplus to decline somewhat this year, partly on higher commodity - especially oil - prices. The bank expects a drop to 2.8% of GDP from 3.4%, and for the reading to hover around the lower level for some years. (Reuters) CBI Upgrades Growth Forecasts but Warns Government has Lost Focus on Economy Britain’s economy is in for a period of “tepid” growth as households hold back spending in the face of higher inflation, the Confederation of British Industry (CBI) believes. The leading business group fears that the Government has taken its eye off the economy, losing its focus on growth, productivity and jobs at a vital moment for the country, The CBI has upgraded its growth forecasts but still thinks the U.K. faces a modest slowdown, with GDP growth easing back from 1.8% in 2016 to 1.6% in 2017 and 1.4% next year. It said that the U.K. has proved to be “resilient” and unemployment should stay at or around its current very low levels in the years ahead. The business economists also anticipate a pickup in exports, thanks to the weak pound and strong global growth, as well as modest but sustained investment from companies. The “steady and unspectacular” forecast is an improvement on the sharper slowdown which it feared could take place following the Brexit vote, but still leaves the U.K. growing less rapidly than last year. Carolyn Fairbairn, the CBI’s director general, said that the Conservatives have lost their focus on the economy, and praised some of Labour’s plans for spending on infrastructure and skills. (Telegraph U.K.) Germany's Producer Price Inflation Eases in May Germany's producer price inflation eased to a four-month low in May, figures from Destatis revealed. Producer prices advanced 2.8% year-on-year in May, slower than the 3.4% growth seen in April and the 2.9% increase economists had forecast. The 2.8% was the weakest growth since January. Month-on-month, producer prices fell 0.2%, reversing a 0.4% rise in April. This was the first fall in eight months. Economists had forecast a marginal 0.1% fall. Excluding energy, producer prices advanced 2.7% from previous year and edged up 0.1% from April. Energy prices rose 3% though the development of prices of the different energy carriers diverged. Prices of intermediate goods climbed 3.7% and that of non-durable consumer goods by 3.5%. Prices of durable consumer goods and prices of capital goods increased each by 1.1%. (RTT News) Page 6 of 7
9. TA Securities 21-Jun-17 A Member of the TA Group Share Buy-Back : 20 June 2017 Company AMPROP CCK FIAMMA GLBHD MAGNUM N2N PRESBHD PWF SUNCON UNIMECH Bought Back Price (RM) Hi/Lo (RM) 20,000 320,000 1,200,000 30,000 10,000 65,200 40,000 21,000 280,000 5,000 0.80/0.795 0.855/0.84 0.56/0.55 0.62 1.71 0.755/0.75 2.04 1.02/1.00 1.98/1.97 1.13 0.80/0.79 0.855/0.84 0.56/0.55 0.62 1.73/1.71 0.76/0.75 2.12/2.04 1.05/1.00 2.00/1.92 1.15/1.11 Total Treasury Shares 13,769,100 2,474,400 18,310,000 7,021,400 14,793,331 7,339,900 1,456,700 4,578,618 280,000 5,120,410 Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. liability for any direct or indirect loss arising from the use of this document. the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 7 of 7 We accept no We, our associates, directors, employees may have an interest in
10. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR UMW Share Price (RM) 20-Jun-17 1.96 2.25 6.05 Target Price BETA (RM) EPS (sen) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 2.37 2.28 5.41 0.99 0.60 1.26 10.3 24.1 19.7 15.8 25.3 29.8 19.0 9.4 30.8 12.4 8.9 20.3 6.0 4.0 2.1 8.1 4.0 3.1 2.44 2.70 7.00 -19.7 -16.7 -13.6 1.95 1.95 4.43 0.5 15.4 36.6 -8.0 5.1 32.4 4.60 3.50 5.30 7.00 15.90 9.90 22.10 5.20 10.00 1.28 0.95 1.34 1.37 0.67 0.96 0.79 1.35 0.70 33.6 29.4 43.9 49.6 101.6 73.3 136.6 50.6 40.3 30.4 33.1 48.3 54.8 110.2 82.3 140.4 54.0 39.0 11.8 9.1 11.5 13.4 15.2 13.2 14.9 10.0 25.7 13.1 8.1 10.5 12.1 14.0 11.7 14.5 9.4 26.5 4.0 3.0 3.5 3.0 2.7 5.2 2.8 2.4 3.3 4.0 3.0 3.6 3.4 2.7 5.2 2.9 2.4 3.3 4.49 3.00 5.70 6.87 15.74 9.68 20.58 5.59 11.14 -11.6 -11.0 -11.1 -3.3 -1.8 -0.4 -1.3 -9.1 -7.0 3.60 2.08 3.90 4.11 12.70 7.50 19.02 4.53 8.20 10.3 28.4 30.0 61.5 21.7 28.5 6.8 12.1 26.3 6.7 11.7 17.6 47.2 14.5 17.6 3.0 7.9 17.1 0.43 1.28 5.41 3.46 0.65 1.30 1.98 2.07 5.90 0.46 1.62 5.49 3.50 0.78 0.58 2.26 1.49 6.26 0.80 0.62 1.05 1.10 1.03 1.31 na 1.04 0.09 5.7 14.6 31.6 15.3 4.9 8.3 12.6 11.9 42.0 5.7 13.5 36.4 20.3 5.7 9.6 12.5 12.0 45.8 7.4 8.8 17.1 22.6 13.0 15.7 15.7 17.4 14.1 7.4 9.5 14.9 17.0 11.3 13.5 15.8 17.3 12.9 0.0 2.2 2.2 2.2 3.9 0.8 2.8 1.4 4.2 0.0 2.2 2.2 2.7 3.9 0.8 2.8 1.4 4.2 0.51 1.35 5.48 3.61 0.74 1.31 2.15 2.48 6.15 -16.7 -5.3 -1.3 -4.2 -12.2 -0.8 -7.9 -16.4 -4.1 0.36 0.80 4.65 3.07 0.33 0.41 1.50 1.46 5.55 18.1 60.8 16.3 12.7 95.5 221.0 32.0 41.7 6.3 -2.3 21.9 13.2 8.1 6.6 126.1 16.5 20.4 0.3 2.05 2.00 0.49 11.0 11.5 18.7 17.8 4.9 4.9 2.19 -6.4 1.93 6.2 2.0 14.74 18.54 17.84 21.08 0.51 0.57 74.8 93.1 81.3 19.7 101.9 19.9 18.1 18.2 5.1 4.5 5.5 4.9 15.30 19.10 -3.7 -2.9 12.90 14.90 14.3 24.4 5.9 13.2 2.21 7.50 24.98 1.22 83.10 3.41 1.91 4.84 0.92 2.23 8.62 27.41 1.39 88.66 4.10 2.50 4.41 1.36 0.50 0.36 0.33 0.49 0.36 0.50 0.67 0.44 0.56 6.7 26.4 120.5 6.1 293.5 22.3 27.5 15.7 9.3 7.9 30.5 148.1 6.2 326.2 24.7 27.5 16.6 12.7 32.9 28.4 20.7 20.1 28.3 15.3 7.0 30.8 9.9 28.1 24.6 16.9 19.6 25.5 13.8 7.0 29.1 7.2 1.8 4.0 2.8 4.9 3.3 4.4 3.1 0.9 5.4 2.1 4.7 3.0 4.9 3.4 5.0 4.2 1.0 5.4 3.00 8.89 27.00 1.35 83.68 3.66 2.04 5.00 1.07 -26.3 -15.6 -7.5 -9.5 -0.7 -6.7 -6.4 -3.2 -14.0 2.11 7.30 22.44 1.13 74.12 2.12 1.43 4.14 0.78 4.7 2.7 11.3 7.9 12.1 60.8 33.6 16.8 17.9 -14.0 2.3 6.4 6.0 6.3 34.3 10.4 11.7 15.7 44.98 52.08 1.05 198.6 187.4 22.7 24.0 4.4 4.4 55.64 -19.2 40.61 10.8 1.8 9.64 5.59 11.53 6.58 1.35 1.28 49.3 25.7 55.5 27.9 19.5 21.8 17.4 20.1 0.5 1.4 0.6 1.6 10.00 6.38 -3.6 -12.4 7.50 4.19 28.6 33.3 21.3 23.7 2.57 0.13 3.34 0.13 0.74 1.26 19.3 0.4 23.3 0.4 13.3 34.4 11.0 34.6 5.4 0.0 6.2 0.0 3.42 0.16 -24.9 -21.9 2.48 0.05 3.6 150.0 -13.2 150.0 5.99 4.18 6.65 4.70 0.78 0.52 10.3 13.3 16.4 16.5 58.1 31.4 36.5 25.4 0.7 1.5 0.7 1.8 6.73 4.37 -11.0 -4.3 5.54 3.85 8.1 8.6 -5.7 0.0 6.85 6.50 1.98 5.51 1.77 6.05 7.70 1.80 5.80 2.40 0.61 0.16 0.33 -0.20 0.28 20.0 35.8 12.3 26.5 3.7 24.2 40.5 15.3 30.2 6.1 34.2 18.1 16.0 20.8 47.5 28.3 16.1 12.9 18.2 29.2 1.3 2.8 1.9 2.4 0.5 1.6 3.1 2.3 2.8 0.9 7.12 7.07 2.38 5.94 2.64 -3.8 -8.1 -16.8 -7.2 -33.0 4.06 5.62 1.88 4.20 1.65 68.7 15.7 5.3 31.2 7.3 41.8 -1.4 -6.2 3.0 -25.0 INDUSTRIAL SCIENTX SKPRES 8.34 1.28 9.69 1.90 0.55 0.52 54.4 8.6 66.4 11.4 15.3 14.9 12.6 11.2 2.2 3.3 2.4 4.3 8.99 1.44 -7.2 -11.1 5.97 1.12 39.7 14.3 24.5 -0.8 MEDIA ASTRO MEDIA PRIMA STAR 2.69 0.95 2.25 3.45 0.60 1.40 1.04 0.65 0.64 13.2 1.7 7.1 14.5 2.8 6.5 20.3 55.6 31.7 18.6 33.6 34.7 4.6 1.4 8.0 4.8 2.4 8.0 3.01 1.52 2.70 -10.6 -37.5 -16.7 2.51 0.94 2.19 7.2 1.6 2.7 3.5 -17.4 0.4 -15.2 -27.6 -6.1 -9.0 -8.3 -20.5 -52.9 0.19 0.84 7.03 0.44 6.36 1.29 0.49 207.9 0.0 5.5 39.1 12.4 29.5 0.0 129.4 -8.2 1.0 36.0 2.4 3.1 -44.0 -16.0 1.30 29.2 -1.2 BANKS & FINANCIAL SERVICES AFG 3.97 AFFIN 2.67 AMBANK 5.07 CIMB 6.64 HLBANK 15.46 MAYBANK 9.64 PBBANK 20.32 5.08 RHBBANK BURSA 10.36 CONSTRUCTION BPURI GADANG GAMUDA IJM PESONA SENDAI SUNCON WCT LITRAK Building Materials WTHORSE CONSUMER Brewery CARLSBG HEIM Retail AEON AMWAY F&N HUPSENG NESTLE PADINI POHUAT QL SIGN Tobacco BAT GAMING Casino GENTING GENM NFO BJTOTO LUSTER HEALTHCARE Hospitals IHH KPJ Rubber Gloves HARTA KOSSAN SUPERMX TOPGLOV KAREX OIL & GAS DNEX 0.59 0.74 1.03 3.5 4.3 16.8 13.7 1.7 1.7 0.69 MHB 0.84 0.95 1.84 -1.2 1.3 na 64.1 0.0 0.0 1.16 MISC 7.42 7.65 0.81 61.4 54.7 12.1 13.6 4.0 4.0 7.90 PANTECH 0.61 0.69 1.28 4.1 5.0 14.6 12.1 3.0 3.3 0.67 PCHEM 7.15 7.91 1.08 39.2 41.6 18.3 17.2 2.9 3.1 7.80 SENERGY 1.67 2.01 2.47 6.6 4.0 25.3 42.1 0.0 0.0 2.10 UMWOG 0.49 0.80 2.02 -12.0 -3.6 na na 0.0 0.0 1.04 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.68 1.55 1.42 12.0 12.9 14.0 13.0 0.0 0.0 2.00
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price (RM) PLANTATIONS FGV IJMPLNT IOICORP KLK SIME UMCCA 1.77 3.10 4.50 24.90 9.61 6.02 Target Price BETA (RM) 1.55 3.88 4.15 26.19 10.02 7.52 1.75 0.46 1.09 0.87 1.23 0.47 EPS (sen) PER (X) FY17 FY18 FY17 FY18 4.2 12.3 18.7 111.8 34.0 32.7 8.5 15.7 21.0 119.1 37.5 34.5 42.0 25.2 24.1 22.3 28.2 18.4 20.8 19.7 21.4 20.9 25.6 17.5 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg 2.8 2.3 2.2 2.2 2.6 2.8 2.8 2.6 2.7 2.4 3.2 2.8 2.52 3.70 4.81 25.50 9.67 6.51 -29.8 -16.2 -6.4 -2.4 -0.6 -7.5 1.42 3.00 4.21 22.72 7.30 5.53 PROPERTY GLOMAC 0.66 0.69 0.60 3.4 7.0 19.1 9.4 6.1 6.1 0.83 -20.0 0.66 HUAYANG 1.05 1.07 0.65 17.3 17.4 6.1 6.0 3.8 3.3 1.43 -26.7 1.05 IBRACO 0.84 0.92 0.35 4.9 10.2 17.2 8.2 4.2 4.8 1.05 -20.0 0.79 IOIPG 2.12 2.25 0.90 17.4 17.4 12.2 12.2 3.3 3.5 2.46 -13.8 1.85 MAHSING 1.55 1.70 0.72 14.4 14.2 10.7 10.9 4.2 4.2 1.70 -8.8 1.34 SNTORIA 0.85 0.98 0.29 6.2 10.3 13.7 8.2 1.2 1.2 1.00 -15.5 0.69 SPB 4.84 5.98 0.59 25.6 22.8 14.2 16.0 3.8 3.8 5.19 -6.7 4.32 SPSETIA 3.64 4.10 0.65 11.7 12.6 33.4 30.9 1.3 1.3 4.50 -19.1 2.80 SUNWAY 3.90 3.95 0.46 15.6 15.9 17.1 16.8 6.8 6.9 4.05 -3.7 2.84 Note: SUNWAY proposed bonus issue of shares and warrants. Ex-Target price RM1.69. For more details please refer to 15.06.17 report. REIT SUNREIT 1.73 1.86 0.51 8.9 10.1 19.5 17.1 5.1 5.8 1.84 -6.0 1.60 CMMT 1.53 1.72 0.56 8.1 8.6 18.9 17.7 5.5 5.8 1.72 -11.0 1.45 % Chg YTD 24.6 3.3 6.9 9.6 31.6 8.9 14.2 -8.8 2.3 3.8 18.6 0.3 0.0 0.0 7.0 14.8 15.7 22.5 12.0 30.0 37.2 -5.0 -7.1 -16.0 8.7 8.4 5.6 9.5 16.3 30.0 8.1 5.5 0.6 0.0 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.09 24.22 18.66 14.32 1.46 1.23 21.47 19.60 17.37 1.90 0.73 0.77 0.77 1.01 0.56 7.1 98.4 88.2 131.9 8.2 6.4 102.3 101.3 130.8 10.7 15.3 24.6 21.1 10.9 17.8 17.0 23.7 18.4 10.9 13.7 6.4 3.0 3.3 3.0 6.8 6.4 3.1 3.8 3.2 6.8 1.80 25.70 22.66 14.90 1.64 -39.4 -5.8 -17.7 -3.9 -11.0 1.08 22.92 18.10 13.00 1.38 0.9 5.7 3.1 10.2 5.8 -20.4 1.8 -12.4 3.0 -2.0 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 5.02 4.99 5.62 6.61 5.50 4.95 6.05 7.50 1.30 0.93 0.69 0.67 15.0 20.8 25.4 21.4 16.7 21.1 26.1 22.3 33.4 23.9 22.1 30.8 30.1 23.7 21.5 29.6 1.5 4.2 3.6 2.9 1.7 4.2 3.6 3.0 5.99 5.19 6.60 6.90 -16.2 -3.9 -14.8 -4.2 4.11 4.64 5.50 5.81 22.1 7.5 2.2 13.8 6.4 3.3 -6.0 11.1 TECHNOLOGY Semiconductor & Electronics IRIS 0.15 INARI 2.03 MPI 13.24 UNISEM 3.45 0.28 2.40 15.90 4.10 1.35 0.80 0.50 0.80 -2.6 10.3 94.2 26.9 -0.3 na 12.6 19.7 115.7 14.1 29.1 12.8 na 16.1 11.4 11.9 0.0 3.9 2.0 3.5 0.0 2.5 2.0 3.5 0.24 2.23 13.50 3.70 -39.6 -9.0 -1.9 -6.8 0.10 1.41 7.02 2.27 45.0 44.3 88.6 52.0 31.8 22.3 78.7 46.2 3.17 8.60 3.23 8.10 1.11 1.48 37.6 17.2 35.9 17.5 8.4 49.9 8.8 49.2 1.3 1.2 1.6 1.2 3.59 9.45 -11.7 -9.0 2.16 5.76 46.8 49.3 38.4 41.9 1.77 3.71 2.05 4.05 0.74 0.66 14.3 17.1 22.7 15.1 12.4 21.6 7.8 24.5 2.4 3.5 4.0 3.0 1.87 4.59 -5.3 -19.2 1.33 3.62 33.1 2.5 11.3 -13.7 TRANSPORTATION Airlines AIRASIA AIRPORT Freight & Tankers TNLOGIS WPRTS SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price (S$) BANKS & FINANCIAL SERVICES DBS 20.45 OCBC 10.64 UOB 23.05 PLANTATIONS WILMAR IFAR 3.53 0.48 Target Price Beta (S$) EPS (cent) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52week 52week FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 23.30 12.00 25.40 1.23 1.13 1.09 173.8 87.7 195.6 190.2 11.8 92.4 12.1 209.3 11.8 10.8 11.5 11.0 2.9 5.7 3.0 2.9 6.7 3.0 21.2 10.8 24.0 -3.4 -1.1 -4.0 14.72 8.84 17.41 38.9 29.4 32.4 17.9 19.3 13.0 3.72 0.53 0.92 1.13 28.9 4.9 31.1 5.2 11.3 9.2 2.3 2.5 2.5 2.7 4.0 0.6 -11.8 -19.3 2.96 0.44 19.3 9.1 -1.7 -8.6 12.2 9.9 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
12. COMPANY UPDATE TA Securities Wednesday , June 21, 2017 FBMKLCI: 1,780.71 Sector: Telco A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Axiata Group Berhad TP: RM5.50 (+9.6%) Last Traded: RM5.02 edotco Expands Presence in Pakistan HOLD THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Paul Yap, CFA Tel: +603-2167 9603 paulyap@ta.com.my edotco is expanding its presence in Pakistan through an acquisition of 700 towers for US$90mn (RM385.4mn) or US$129k/tower. While this appears to be on the high side, we believe this may be due to the portfolio’s concentration in urban areas (97%) and above industry tenancy ratio of 1.4x. Post-acquisition, edotco will be the largest independent towerco in Pakistan. Tower sharing activities are expected to be driven by a surging demand for connectivity and competitive mobile landscape. Market risks, however, are an unstable grid, regulatory and security issues. While edotco represents an exciting growth angle for Axiata, we maintain our HOLD call with a TP of RM5.50/share. We believe it is too early to turn positive on the stock, with risks of heightened competition and regulatory uncertainties within its key markets. Share Information Acquiring TTPL edotco entered into a deal with Tower Share (Private) Limited (TSPK) to acquire a 100% stake in its subsidiary, Tanzanite Tower Private Limited (TTPL) for US$90.0mn (RM385.4mn). This marks edotco’s first foray into Pakistan with a portfolio of 700 towers. The deal translates into an EV/tower of US$129k/tower. This appears to be on the high side, when compared to the rumoured implied value of Mobilink and Warid’s tower portfolio of US$7376.9k/tower. We believe this may be due to the portfolio’s concentration in urban areas (97%) and higher tenancy ratio of 1.4x (vs. 1.25x for MobilinkWarid). Fresh off its record equity private placement exercise of US$700mn, we foresee no difficulties in funding the acquisition. Forecast Revision (%) Info About Towershare TSPK is a wholly-owned subsidiary of Towershare Inc., a regional independent owner and operator of wireless communication infrastructure. Its focus is primarily in the Middle East, North Africa and South Asia. Towershare is one of the active towercos in Pakistan. Prior to the deal, it is reported to have at least 800 independently owned towers in Pakistan. Within Strategy The acquisition is within the group’s strategy of focusing on South and Southeast Asia markets, with high growth potential. This also helps with aspirations to become among the top five global towercos, expanding its estimated tower count to 18.1k towers. Pakistan Tower Market Pakistan is the sixth largest country in the world with a population of 192.8mn people. It has an emerging mobile industry, with unique penetration rates at 47%, one of the lowest in South Asia. There are four main mobile operators in the country, Jazz, Telenor, Zong and Ufone. It is suggested that there were 40,704 cell sites in Pakistan in 2015. The vast majority of towers in Pakistan remains operator captive. There are ten tower licensees in Pakistan, with only edotco, Towershare and AWAL Telecom having substantial activity on the ground. As of 2015, the average tenancy ratio in the country is still relatively low at 1.3x. With a surging demand for connectivity and low ARPUs, MNOs in Page 1 of 3 www.taonline.com.my Bloomberg Code AXIATA MK Stock Code 6888 Listing Main Market Share Cap (mn) 8,974.0 Market Cap (RMmn) 45,049.6 52-wk Hi/Lo (RM) 5.99/4.11 12-mth Avg Daily Vol ('000 shrs) 6,203.3 Estimated Free Float (%) 24.1 Beta 1.30 Major Shareholders (%) Khazanah Nasional Bhd - 37.6 EPF - 15.6 Skim Amanah Saham - 11.7 FY17 FY18 Forecast Revision (%) - - Core Net Profit (RMm) 1,349 1,494 Consensus 1,419 1,657 TA/Consensus Previous Rating 95.0 90.2 Hold (Maintained) Financial Indicators FY17 FY18 Net debt/EBITDA (x) 1.7 1.6 CFPS (sen) 74.0 84.6 P/CFPS (x) 6.8 5.9 ROE (%) 5.7 6.1 ROA (%) 1.9 2.0 NTA/Share (RM) 1.1 1.2 P/NTA (x) 4.7 4.2 Share Performance Price Change (%) Axiata FBMKLCI 1 mth (4.2) 0.7 3 mth (1.0) 1.5 6 mth 11.1 9.3 12 mth (8.4) 8.7 (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg
13. TA Securities 21-Jun-17 A Member of the TA Group the market are under pressure to optimise networks . Market risks, however, are an unstable grid, regulatory and security issues. Largest Independent Towerco in Pakistan Post-acquisition of the 700 towers, edotco will become the largest independent towerco in Pakistan. This places it in a strong position to accelerate its tower build out and take advantage of further acquisition and consolidation opportunities. Negotiations are reportedly underway by an unnamed towerco to acquire Mobilink-Warid tower portfolios of around 13k sites. It was reported that Ufone is also seeking to monetise its assets of 8,318 towers. Valuation We leave our earnings estimates unchanged at this juncture. We value Axiata at an unchanged TP of RM5.50/share – based on a SOP valuation. While edotco represents an exciting growth angle for the group, we maintain our HOLD call on the stock. This is premised on heightened competition and regulatory uncertainties within its key markets. Table 1: SOP Valuation Celcom (Malaysia) XL Axiata (Indonesia) Idea Cellular (India) Dialog Axiata (Sri Lanka) Robi (Bangladesh) M1 (Singapore) Smart (Cambodia) Ncell (Nepal) Holding Co Net Cash Total Equity Value (RM mn) 24,502.1 16,772.7 23,025.7 2,907.3 3,358.5 5,760.8 2,266.5 9,666.9 Stake 100.0% 66.4% 19.8% 83.3% 68.7% 28.5% 82.5% 80.0% Effective Equity Value (RM mn) 24,502.1 11,130.3 4,547.6 2,422.4 2,307.0 1,644.1 1,869.9 7,733.5 Value /Share (RM) 2.78 1.26 0.52 0.27 0.26 0.19 0.21 0.88 -7,621.3 48,535.6 -0.86 5.50 Page 2 of 3 % of SOP 50.5% 22.9% 9.4% 5.0% 4.8% 3.4% 3.9% 15.9% -15.7% Valuation Method DCF: WACC 7.0%, TG: 1.0% DCF: WACC 9.0%, TG: 3.0% Consensus TP Consensus TP DCF: WACC 13.8%, TG: 3.0% Consensus TP 10x CY17 EPS 10x CY17 EPS
14. TA Securities 21-Jun-17 A Member of the TA Group P &L FYE Dec (RMmn) Revenue EBITDA Depreciation & amortisation Net finance cost JV/Associates EI PBT Taxation MI Net profit Core net profit EPS (sen) DPS (sen) FY15 19,883 7,284 (4,170) (658) 434 441 3,331 (695) (82) 2,554 2,071 23.5 20.0 FY16 21,565 8,013 (5,595) (1,018) 30 (290) 1,140 (482) (153) 504 1,418 16.1 8.0 FY17F 23,226 8,646 (5,608) (1,080) 50 0 2,007 (509) (150) 1,349 1,349 15.3 7.6 FY18F 24,102 9,228 (5,717) (1,042) (75) 0 2,394 (642) (257) 1,494 1,494 16.9 8.5 FY19F 24,814 9,767 (5,742) (1,023) (40) 0 2,961 (780) (360) 1,821 1,821 20.7 16.5 Ratios FYE Dec (RMmn) Valuations PER (x) EV/EBITDA (x) Dividend yield (%) PBV (x) FY15 FY16 FY17F FY18F FY19F 21.4 8.9 4.0 1.7 31.2 8.1 1.6 1.5 32.8 7.5 1.6 1.4 29.6 7.0 1.7 1.3 24.3 6.6 3.3 1.3 Profitability ratios (%) ROAE ROAA EBITDA margin PBT margin 9.4 3.9 36.6 16.8 6.0 2.2 37.2 5.3 5.7 1.9 37.2 8.6 6.1 2.0 38.3 9.9 7.2 2.4 39.4 11.9 0.8 0.8 0.5 0.5 0.8 0.8 0.8 0.8 0.9 0.9 Liquidity ratios (x) Current ratio Quick ratio Leverage ratios (x) Total liabilities/equity Gross debt/EBITDA Net debt/EBITDA Net debt/equity Int. coverage ratio Growth ratios (%) Sales Pretax Earnings Total assets 1.2 2.3 1.5 0.4 4.7 1.5 2.8 2.1 0.6 2.4 1.3 2.6 1.7 0.5 2.8 1.2 2.4 1.6 0.4 3.4 1.2 2.3 1.4 0.4 3.9 6.3 5.9 (8.2) 14.3 8.5 (65.8) (31.5) 25.6 7.7 76.1 (4.9) 4.8 3.8 19.3 10.8 2.0 3.0 23.7 21.9 1.9 Balance Sheet FYE Dec (RMmn) Fixed assets Associates + Subsidiaries Goodwill Others LT assets FY15 23,134 8,311 14,206 610 46,261 FY16 27,466 8,509 23,153 872 60,000 FY17F 28,277 8,559 23,943 899 61,677 FY18F 29,049 8,484 23,888 904 62,325 FY19F 29,758 8,444 23,834 908 62,944 155 3,955 5,511 236 9,857 175 4,780 5,332 202 10,489 178 4,677 7,158 202 12,215 184 4,853 7,818 202 13,057 190 4,997 8,468 202 13,856 Total assets 56,118 70,489 73,892 75,383 76,800 Trade payables ST borrowings Others Current liabilities 9,643 2,348 499 12,490 12,168 7,124 653 19,945 11,628 3,312 653 15,593 11,885 3,325 653 15,862 12,063 3,336 653 16,052 LT borrowings Others LT liabilities 14,045 3,860 17,904 15,135 6,788 21,924 18,766 6,938 25,704 18,841 7,042 25,884 18,905 7,128 26,033 Share capital Reserves Shareholders' funds MI 8,817 14,708 23,525 2,199 8,971 14,609 23,581 5,040 8,971 15,053 24,025 8,571 8,971 15,837 24,808 8,828 8,971 16,556 25,528 9,188 Total liabilities and equity 56,118 70,489 73,892 75,383 76,800 FY15 3,331 4,170 354 (138) (92) (810) (525) 6,291 FY16 1,140 5,595 967 (1,917) 2,891 (747) (1,154) 6,775 FY17F 2,007 5,608 1,080 (50) (317) (509) (1,299) 6,521 FY18F 2,394 5,717 1,042 75 173 (642) (1,304) 7,455 FY19F 2,961 5,742 1,023 40 111 (780) (1,308) 7,789 Capex Interest received Others Investing cash flow (4,861) 171 (1,650) (6,340) (5,564) 187 (5,458) (10,835) (6,392) 219 354 (5,819) (6,435) 262 0 (6,173) (6,397) 285 0 (6,112) Net share issue Dividend paid Net change in debts Others Financial cash flow 43 (734) 207 929 444 10 (903) 4,063 711 3,882 0 (904) (182) 2,211 1,125 0 (711) 88 0 (622) 0 (1,102) 75 (0) (1,027) 395 5,116 0 0 5,511 (178) 5,511 0 0 5,332 1,826 5,332 0 0 7,158 660 7,158 0 0 7,818 650 7,818 0 0 8,468 Inventories Trade receivables Cash Others Current assets Cash Flow FYE Dec (RMmn) PBT Depreciation and amortisation Net interest Other non-cash Changes in WC Tax paid Finance cost Operational cash flow Net cash flow Opening cash flow Forex Others Closing cash flow Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 3 of 3
15. R E S U L T S UPDATE TA Securities Wednesday , 21 June 2017 FBM KLCI: 1,780.71 Sector: Gaming A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Berjaya Sports Toto Berhad TP: RM3.34 (+30.0%) Last traded: RM2.57 Higher Prize Payout in FY17 BUY THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Tan Kam Meng, CFA Tel: +603-2167 9605 kmtan@ta.com.my Review Stripping off exceptional items totalling RM19.8mn, BJToto’s FY17 core profit came in below our expectation but within consensus estimates. The variance was largely due to higher-than-expected prize payout. For this quarter, the company declared a fourth interim dividend of 3sen/share, bringing the YTD dividend payments to 14sen/share, which was 2sen below our forecast. FY17 core profit declined by 18.1% YoY to RM261.1mn. This was despite a marginal growth in revenue, which increased 3.1% YoY to RM5.7bn. The drop in earnings was mainly due to higher prize payout, resulting in a larger decline in EBIT of 17.6% versus a marginal drop in revenue of 1.6% for the NFO segment. The drop in earnings was partially mitigated by increased contribution from its UK motor franchise business (H.R. Owen Plc), which EBIT increased 28.2% YoY to RM27.0mn. QoQ, 4QFY17 revenue and core profit increased by 8.0% and 53.4% respectively due to: 1) higher contribution from H.R. Owen; and 2) increased earnings of associate companies. Impact We downgrade our FY18-19 earnings projections by 5.5%-6.7% respectively after incorporating FY17 earnings into our forecasts. We also cut FY18-19 dividend to 16-18en/share (from 19-20sen previously) after revising our dividend payout assumption to 69% from 72%. www.taonline.com.my 7 Share Information 3. Bloomberg Code 9. Stock Code BST MK 1562 Main Board 1,348.0 RM3,464.4 0.10 3.42/2.48 1,487 54.5 0.74 Listing Share Cap (mn) Market Cap (RMmn) Par Value 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) Berjaya Corp (45.5%) Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 (5.5) (6.7) 314.6 353.1 305.7 316.3 102.9 111.6 Buy (Maintained) Financial Indicators FY18 26.0 10.5 24.5 12.6 7.0 36.9 FY19 12.0 11.5 22.3 13.7 15.1 17.0 vs TA vs Consensus % of FY 87.4 96.6 Below Within Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth BJTOTO (6.2) (11.1) (14.0) (11.4) FBM KLCI 0.7 1.5 9.3 8.7 Net Debt / Equity (%) FCPS (sen) Price / CFPS (x) ROA (%) NTA/Share (RM) Price/NTA (x) Scorecard Outlook Recently, BJToto initiated a MTN programme, which involved the issuance of up to RM800mn MTN with a tenure of up to 15 years. The purpose of this MTN is to refinance its existing borrowings. A credit rating of AA- has been assigned to the debt facility, same as the group’s existing MTN programme. Note that under the old MTN programme, there will be scheduled redemptions of RM255mn MTN in June-17. We are mildly positive on the MTN programme, which indicates that the group would likely maintain its debt-equity capital structure and would continue paying hefty dividend and share buy-back in the near term. This is important to dividend-seeking investors, especially in the current low-yielding environment. Assuming a dividend payout of 69%, FY18-19 dividend yield works out to 6.2-7.2%. Operational wise, we expect FY18 sales to be resilient with minimal risk of gaming tax hike ahead of the general election in Malaysia. In addition, the attractive jackpot amounts of RM47.0mn for Grand 6/63 and RM23.4mn for 4D games would help to lure customers wagering on the games. Page 1 of 3 (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg
16. TA Securities 21-Jun-17 A Member of the TA Group Valuations Given the lower dividend assumptions , we reduce our DDM to RM3.34 (from RM3.81/share previously) based on revised CAPM rate of 10.20%. Maintain Buy on BJToto in pursuing of yield. Earnings Summary FYE 30 April (RMmn) Revenue EBITDA EBITDA margin Pretax profit Net profit Core net profit EPS Core EPS Core EPS growth PER Net DPS Net div yield Core ROE 2015 5,288.4 558.6 10.6 534.0 361.6 372.2 26.9 27.6 14.0 9.3 21.5 8.4 53.6 (%) (sen) (sen) (%) (x) (sen) (%) (%) 2016 5,563.2 496.4 8.9 446.3 306.2 318.6 22.7 23.7 (14.3) 10.8 19.0 7.4 44.0 2017 5,734.5 453.2 7.9 380.2 241.3 261.1 17.9 19.4 (18.1) 13.2 14.0 5.4 30.9 2018F 5,680.4 523.7 9.2 458.5 314.6 314.6 23.3 23.3 20.0 11.0 16.0 6.2 37.8 2019F 5,744.9 573.2 10.0 514.7 353.1 353.1 26.1 26.1 12.3 9.8 18.0 7.0 37.7 4QFY17 Results Analysis FYE 30 April (RMm) Revenue EBIT Finance costs Associates & JV EI Pretax profit Tax MI Reported net profit Core net profit EPS Net DPS EBIT margin Pretax margin Tax rate Other information NFO revenue Number of draws - Nor mal draws - Special draws Revenue/draw NFO EBIT NFO EBIT margin 4Q16 1,484.1 152.4 (12.7) (1.6) (9.4) 139.7 (32.7) (2.3) 104.7 114.1 3Q17 1,367.1 93.6 (12.3) (0.4) 2.0 86.3 (36.7) (1.6) 47.9 45.9 4Q17 1,477.1 101.4 (13.3) 7.0 2.1 102.2 (26.3) (3.4) 72.5 70.4 QoQ (%) 8.0 8.4 7.8 (2,001.4) 2.7 18.4 (28.4) 112.9 51.2 53.4 YoY (%) (0.5) (33.5) 4.5 (526.9) (122.2) (26.9) (19.5) 47.7 (30.8) (38.3) YTD16 5,563.2 476.7 (47.8) 4.8 (12.4) 446.3 (130.8) (9.2) 306.2 318.6 YTD17 5,734.5 409.3 (51.0) 6.5 (19.8) 380.2 (129.4) (9.5) 241.3 261.1 YoY (%) 3.1 (14.1) 6.5 35.1 59.3 (14.8) (1.1) 2.8 (21.2) (18.1) (sen) (sen) 8.5 5.0 3.4 3.0 5.2 3.0 53.3 0.0 (38.3) (40.0) 23.7 19.0 19.4 14.0 (18.2) (26.3) (%) (%) (%) 10.3 9.4 23.4 6.8 6.3 42.6 6.9 6.9 25.8 %pts 0.0 0.6 (16.8) %pts (3.4) (2.5) 2.4 8.6 8.0 29.3 7.1 6.6 34.0 %pts (1.4) (1.4) 4.7 842.8 45.0 38.0 7.0 18.7 154.3 18.3 852.6 47.0 39.0 8.0 18.1 97.7 11.5 815.8 44.0 39.0 5.0 18.5 95.0 11.6 (4.3) (3.0) 0.0 (3.0) 2.2 (2.8) 0.2 (3.2) (1.0) 1.0 (2.0) (1.0) (38.5) (6.7) 3,313.9 178.0 157.0 21.0 18.6 490.1 14.8 3,261.2 179.0 157.0 22.0 18.2 403.6 12.4 (1.6) 1.0 0.0 1.0 (2.1) (17.6) (2.4) (day) (day) (day) (%) * Including distribution of treasury share on the basis of 1:140 Page 2 of 3
17. TA Securities 21-Jun-17 A Member of the TA Group ( T HI S P AGE I S I NT E N T I ON AL L Y L E FT B L ANK) Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 3 of 3
18. RESULTS UPDATE TA Securities A Member of the TA Group Wednesday , June 21, 2017 FBMKLCI: 1,780.71 Sector: Industrail MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Scientex Berhad TP: RM9.69 (+16.2%) Performance on Track Last Traded: RM8.34 Buy THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Damia Othman Tel: +603-2167-9602 damia@ta.com.my Review Scientex Berhad’s 9MFY17 earnings came in within ours (72%) but below consensus estimates (65%). The adjusted net profit was RM182.6mn (-5.4% YoY) after excluding exceptional items. For this quarter, the company declared a first interim dividend of 6sen/share. Manufacturing: 9MFY17 operating profit declined by 27.3% YoY to RM79.1mn despite revenue increased by 4.9% YoY to RM1.2bn. This was due to lower product margins, stemming from penetrative pricing in order to gain market share in the consumer and industrial segments. 3QFY17 revenue improved by 7.5% QoQ to RM442.8mn due to higher demands for consumer packaging products. However, 3QFY17 operating profit declined by 16.8% QoQ to RM25.2mn due to penetrative pricing. Property: 9MFY17 operating profit improved by 23.7% YoY to RM160.4mn in tandem with the increase in revenue of 12.9% YoY to RM522.7mn. We attribute this to higher progress billing from existing affordable housing projects in Johor, Melaka and Perak. Similarly, this can be seen with 3QFY17 operating profit, which increased by 20.4% QoQ to RM63.0mn. This was because of increase in revenue to RM193.4mn (+10.9% QoQ) due to strong progress billings recorded from Scientex six properties projects (i.e. Scientex Skudai, Scientex Pulai, Scientex Senai-Kulai, Scientex Pasir Gudang, Scientex Melaka and Scientex Ipoh). Impact No change to our earnings forecast. www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (RMmn) Par Value 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) Scientex Holdings Sdn Bhd Scientex Leasing Sdn Bhd Lim Teck Meng Sdn Bhd TM Lim Sdn Bhd Forecast Revision Forecast Revision (%) Core Net Profit (RMmn) Consensus TA's / Consensus (%) Previous Rating SCI MK 4731 Main Market 483.6 0.5 4,033.2 8.99/5.97 331.1 40.2 0.6 20.8 9.6 7.8 5.0 FY17 FY18 0.0 0.0 252.1 307.9 282.0 339.8 89.4 90.6 Hold (Upgraded) Financial Indicators FY17 24.8 16.2 10.1 2.1 4.0 FY18 29.3 17.5 10.6 2.6 3.3 vs TA vs Consensus % of FY17 72 65 Within Below Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth SCIENTEX FBM KLCI (3.9) 0.7 11.6 1.5 23.4 9.3 39.2 8.7 Net debt/ equity (%) ROE (%) ROA (%) NTA/Share (RM) Price/NTA (x) Scorecard Outlook We are positive on the prospects of the manufacturing division. The Ipoh Scientex polyethylene (PE) film plant is expected to complete in 2H17 where production output is expected to double to 24,000 metric tonnes/annum. Together with the Rawang plant, Scientex’s total PE film production capacity would increase to 84,000 metric tonne/annum in FY18. The property division is also showing signs of resiliency especially from those affordable homes projects. Moving forward, management guided that Sciente Pulai is expected to be the key driver for the group with estimated GDV of RM3.0bn for residential and commercial properties. Valuation We maintain our target price of RM9.69/share based on SOP valuation. We upgrade our call from Hold to Buy on the back of i) an increase in the stock’s upside potential to 18.1%, ii) pick-up in Malaysian and global economic outlook, as well as iii) growth potential in APAC consumer packaging business. Page 1 of 3 (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg
19. TA Securities 21-Jun-17 A Member of the TA Group 3QFY17 Results Analysis (RMmn) FYE July (RM'mn) Revenue ~ Manufacturing ~ Property Operating Profit ~ Manufacturing ~ Property Interest Expense Interest Income Extra-ordinary Items (EI) Reported PBT Adj. PBT Taxation MI Reported Profit Adj. Net Profit EPS (sen) Adj EPS (sen) DPS (sen) 3QFY16 543.9 382.8 161.1 77.8 32.1 45.7 (3.1) 1.0 0.0 75.8 75.8 (13.2) (1.4) 61.3 61.3 13.4 13.4 6.0 2QFY17 586.2 411.9 174.3 81.9 30.2 52.3 (3.6) 2.9 0.7 81.8 81.1 (15.5) (1.1) 65.2 63.8 14.1 13.8 0.0 3QFY17 636.2 442.8 193.4 88.7 25.2 63.0 (3.8) 1.0 0.0 85.4 85.4 (18.0) (0.9) 66.5 66.5 14.3 14.3 6.0 14.3 8.4 28.4 13.9 11.3 17.4 14.0 7.3 30.0 13.8 10.9 19.0 FY15 1,801.7 264.6 14.7 221.0 158.2 157.6 34.4 34.3 24.3 11.0 1.3 FY16 2,201.0 367.1 16.7 306.3 240.9 242.7 52.4 52.8 15.9 16.0 1.9 EBIT Margin (%) ~ Manufacturing ~ Property PBT Margin (%) Net Margin (%) Tax rate (%) 13.9 5.7 32.6 13.4 10.4 21.1 QoQ (%) 8.5 7.5 10.9 8.4 (16.8) 20.4 3.7 (64.2) nm 4.4 5.3 16.2 (18.0) 2.0 4.1 1.8 3.9 nm %-pts (0.0) (1.7) 2.6 (0.4) (0.4) 2.1 YoY (%) 17.0 15.7 20.0 14.0 (21.7) 37.8 22.6 2.0 nm 12.7 12.7 36.9 (32.8) 8.6 8.5 6.8 6.7 nm %-pts (0.4) (2.7) 4.2 (0.5) (0.8) 3.7 FY17E 2,530.1 401.3 15.9 317.6 252.1 252.1 54.8 54.8 15.2 18.0 1.9 FY18F 2,989.6 484.3 16.2 387.8 307.9 307.9 66.9 66.9 12.5 20.0 2.1 FY19F 3,175.2 513.9 16.2 403.9 320.6 320.6 69.7 69.7 12.0 22.0 2.3 9MFY16 1,639.9 1,176.8 463.1 238.5 108.8 129.7 (8.8) 6.7 (6.3) 236.4 242.7 (44.4) (5.3) 186.7 193.0 54.7 56.9 6.0 9MFY17 1,757.1 1,234.4 522.7 239.6 79.1 160.4 (10.9) 5.0 0.6 233.7 233.1 (47.0) (3.0) 183.7 182.6 39.8 39.5 6.0 14.5 9.2 28.0 14.8 11.8 18.8 13.6 6.4 30.7 13.3 10.4 20.1 YoY (%) 7.1 4.9 12.9 0.5 (27.3) 23.7 23.9 (25.8) nm (1.2) (4.0) 5.8 (43.8) (1.6) (5.4) (27.3) (30.5) nm %-pts (0.9) (2.8) 2.7 (1.5) (1.4) 1.3 Earnings Summary (RMmn) FYE July Revenue EBITDA EBITDA margin Reported pre-tax profit Reported net profit Core net profit EPS (sen) Core EPS (sen) PE (x) Adj. DPS (sen) Div. yield (%) Valuation Sum-of-Parts Manufacturing Property PATAMI CY18 138.4 174.8 Target PER (x) 22 8 Total Equity value (RMmn) Share cap (mn) Target Price (RM) Implied CY18 PER Page 2 of 3 Segment Value (RM mn) 3,058.1 1,398.4 4,456.5 460.0 9.69 16.0 Comment 30% premium to peer's average PER In-line with small-cap property players
20. TA Securities 21-Jun-17 A Member of the TA Group (THIS PAGE IS INTENTIONALLY LEFT BLANK) Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. This report has been prepared by TA SECURITIES HOLDINGS BERHAD for purposes of CMDF-Bursa Research Scheme ("CBRS") administered by Bursa Malaysia Berhad and will be compensated to undertake the scheme. TA SECURITIES HOLDINGS BERHAD has produced this report independent of any influence from the CBRS or the subject company. For more information about CBRS and other research reports, please visit Bursa Malaysia’s website at: http://www.bursamalaysia.com/market/listed-companies/research-repository/research-reports for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 3 of 3