Bursa Malaysia Daily Market Report - 24 August

Transcription

1. Thursday , 24 August, 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. 5. 6. 7. Amway (Malaysia) Holdings Berhad: Lower Than Expected Expenses IHH Healthcare Berhad: Bottom Line Weighted Down by Newer Hospitals IJM Corporation Berhad: Strong Rebound in Cargo Throughput IJM Plantation Berhad: 1QFY18 Results Below Expectations Inari Amertron Berhad: RF and Iris Scanning to Drive FY18 Growth Malaysian Economy: Inflation Eases Further in July 2017 MBM Resources Berhad: 1H17 Earnings Hit by Lower Margin Technical Reports 1. Daily Technical Stock Picks 2. Daily Stock Screen 3. Foreign Technical Stock Watch (AUS & 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 Thursday , 24 August 2017 (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 TA Research e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (23.08.2017) Volume (mil) +/-chg (RMmn) Main Market 1,414.9 390.0 1,830.1 Warrants 222.6 -96.6 25.6 ACE Market 358.0 -62.8 110.2 Bond 0.0 -7.4 1.7 ETF 0.1 0.09 0.2 Total 1,995.6 1,967.8 Off Market 170.9 113.6 229.0 Value Value/ +/-chg Volume 103.4 1.29 -16.4 0.12 -6.0 0.31 0.21663545.00 0.15 1.62 0.99 81.3 1.34 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP August 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) Up Down 283 319 78 86 48 41 5 7 1 1 415 454 % chg % YTD chg 1,772.94 12,620.55 17,058.63 1,767.50 -1.28 0.99 22.25 -6.50 -0.07 0.01 0.13 -0.37 7.99 10.06 15.92 8.07 21,812.09 6,278.41 7,382.65 19,434.64 2,366.40 27,401.67 3,260.05 1,573.38 5,914.02 3,287.71 1,902.00 5,737.16 -87.80 -19.07 0.91 50.80 1.07 0.00 -3.74 0.19 33.73 -2.52 -6.33 -12.97 -0.40 -0.30 0.01 0.26 0.05 0.00 -0.11 0.01 0.57 -0.08 -0.33 -0.23 10.37 16.63 3.36 1.68 16.78 24.55 13.17 1.97 11.65 5.93 -3.41 1.26 Top 10 KLCI Movers Based on Mkt Cap. Off Market EDUSPEC-WA 51.6 @ BIMB 30.2 @ PTRANS 30.0 @ EDUSPEC 22.1 @ KERJAYA 15.0 @ G3 5.8 @ YNHPROP 2.5 @ JAKS 2.5 @ MEXTER 2.1 @ WZSATU 1.3 @ SOLID 1.0 @ TOMYPAK 1.0 @ PMETAL-WC 1.0 @ Review & Outlook (RM) 0.03 4.40 0.18 0.13 3.48 2.00 1.52 1.30 0.32 1.00 1.00 0.90 3.05 Counter Mkt Cap. (RM’mn) MAYBANK 101,131 PBBANK 79,392 SIME 63,248 IHH 61,011 CIMB 57,280 PCHEM 49,434 GENM 34,011 IOICORP 31,623 PPB 19,309 YTLCORP 14,644 Chg Vol. (RM) (mn) -0.03 7.19 -0.02 4.53 -0.01 4.45 -0.01 15.18 -0.04 3.38 -0.03 0.51 -0.12 4.41 -0.10 1.94 -0.14 0.06 -0.01 7.06 Important Dates AMEDIA - 3:1 Rights Issue - RI of up to 965.6m shares together with up to 321.9m free detachable warrants. 3 rights shares together every 1 existing share held, at an issue price of RM0.05 per rights share, together with 1 warrant for every 3 rights shares subscribed. LISTING ON: 29/08/2017. HEK TAR - 7:46 Rights Issue - RI of 60.9m new units. HEKT 7 units for every 46 existing sunits held, at an issue price of RM1.11 per rights units. LISTING ON: 29/08/2017. Stocks extended sideways trade Wednesday as disappointment over the failed AmBank-RHB banking merger deal and caution over the annual global central bankers meeting in Jackson Hole overshadowed early gains due to overnight US strength. The KLCI eased 1.28 points to close at 1,772.94, off an early high of 1,777.18 and low of 1,770.95, as losers edged gainers 454 to 415 on higher turnover of 2bn shares worth RM1.96bn. The persistent weak buying momentum and investor caution over global geopolitical issues should continue to dampen near-term sentiment. Immediate resistance for the index stays at 1,782, the upper Bollinger band, followed by the 16 June peak of 1,796. On the downside, a confirmed breakdown below the 100-day moving average level at 1,765 would accelerate correction to next major support at 1,729, matching a key support in April. Multiple buy signals on momentum indicators support further upside for Gadang to re-test the 3/7/17 high (RM1.37), with a confirmed breakout to aim for the 123.6%FP (RM1.48) and 138.2%FP (RM1.56) ahead. Key retracement support from the 76.4%FR (RM1.18) matches the 200-day ma level. Any dips on Kimlun towards the 61.8%FR (RM2.15) is attractive to bargain for rebound upside towards the 6/3/17 peak (RM2.42), while a convincing breakout will target the 123.6%FR (RM2.59) going forward. News Bites • Malaysia's consumer price index growth eased to 3.2% in July versus consensus expectation of 3.4% YoY and 3.6% in June 2017. • Australia and New Zealand Banking Group Ltd's plans to sell its stake in AMMB Holdings Bhd have fallen through, after a proposed acquisition of the Malaysian lender by a domestic rival was scrapped, sources familiar with the matter said. • After a six-year wait, DRB-Hicom Bhd's application to change the status of 333 acres of land in Pulau Rebak Besar, Langkawi from Malay reserve to non-Malay reserve has been rejected by the Kedah government. • Freight Management Holdings Bhd said it has obtained a licence from the Ministry of Communications and Multimedia Malaysia to operate a courier service to serve both the domestic and international markets. • D&O Green Technologies Bhd's securities will be suspended today pending the release of a material announcement from the group. • Excluding the exceptional items, IHH Healthcare Bhd's 2Q17 core net profit dropped 54% to RM86.2mn due to higher depreciation, amortisation and finance costs. It was below expectations. • IJM Corp Bhd's 1QFY18 net profit grew be 9% YoY to RM126.4mn due to profit contribution growth from its construction, property development and infrastructure segments. It was within expectations. • IJM Plantations Bhd's net profit for its 1QFY18 shrank 33.0% YoY to RM16.9mn on a net unrealised foreign exchange loss on dollardenominated borrowings. It was below expectations. • Amway (Malaysia) Holdings Bhd's 2Q17 net profit increased 139% YoY to RM14.8mn, led by lower incentive provisions and operating expenses. It was above ours but within consensus expectations. • Purchases of newly built single-family homes, a narrow slice of all U.S. home sales, decreased 9.4% to a seasonally adjusted annual rate of 571,000 in July, • President Mario Draghi gave little indication about the next steps for monetary policy in the Eurozone during a speech ahead of a key meeting between central bankers. Exchange Rate USD/MYR 4.2798 -0.0007 USD/JPY 109.41 0.1200 EUR/USD 1.178 0.0029 Commodities Futures Palm Oil (RM/mt) 2,739.00 4.00 Crude Oil ($/Barrel) 48.37 0.72 Gold ($/tr.oz.) 1,292.80 6.00 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 Thursday , August 24, 2017 FBMKLCI: 1,772.94 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 Cautious on Weak Buying Momentum and Geopolitics Stocks extended sideways trade Wednesday as disappointment over the failed AmBank-RHB banking merger deal and caution over the annual global central bankers meeting in Jackson Hole overshadowed early gains due to overnight US strength. The KLCI eased 1.28 points to close at 1,772.94, off an early high of 1,777.18 and low of 1,770.95, as losers edged gainers 454 to 415 on higher turnover of 2bn shares worth RM1.96bn. Resistance at 1,782, Support at 1,765 The persistent weak buying momentum and investor caution over global geopolitical issues should continue to dampen near-term sentiment. Immediate resistance for the index stays at 1,782, the upper Bollinger band, followed by the 16 June peak of 1,796. On the downside, a confirmed breakdown below the 100-day moving average level at 1,765 would accelerate correction to next major support at 1,729, matching a key support in April. Buy Gadang & Kimlun Multiple buy signals on momentum indicators support further upside for Gadang to re-test the 3/7/17 high (RM1.37), with a confirmed breakout to aim for the 123.6%FP (RM1.48) and 138.2%FP (RM1.56) ahead. Key retracement support from the 76.4%FR (RM1.18) matches the 200-day ma level. Any dips on Kimlun towards the 61.8%FR (RM2.15) is attractive to bargain for rebound upside towards the 6/3/17 peak (RM2.42), while a convincing breakout will target the 123.6%FR (RM2.59) going forward. Asian Markets Lose Steam on Trump Comments Asian stocks gave up some of their early gains and close mixed on Wednesday following comments from U.S. President Donald Trump on the NAFTA trade treaty and his plan to build a border wall. Trump also said he might terminate the NAFTA trade treaty with Mexico and Canada after three-way talks failed to bridge deep differences. That added to jitters ahead of an expected second round of economic and trade talks between Japanese and U.S. officials in coming months. China's main stock indexes ended little changed, with profit taking in steel firms offsetting a rise in banks ahead of earnings reports that could set the tone for financials for the rest of the year. The CSI300 index rose 0.1 percent to 3,756.09 points, while the Shanghai Composite Index fell 0.1 percent to 3,287.70. Down Under, the S&P/ASX 200 gave up gains made earlier in the session. The index slid 0.22 percent, as a rise in the energy sub-index was offset by losses in the utilities and information technology sub-indexes. Across the Korean strait, the Kospi was mostly flat, trading higher by 0.05 percent. Meanwhile, Japan's Nikkei share average posted modest gains on Wednesday, snapping five straight days of losses that marked its longest losing streak since April 2016. The Nikkei ended 0.3 percent higher at 19,434.64 points. Trading in Hong Kong was suspended as Typhoon Hato lashed southern China. Page 1 of 8
4. TA Securities 24-Aug-17 A Member of the TA Group Wall Street Falls after Donald Trump Threatens Government Shutdown U .S. stocks closed lower on Wednesday as investors grappled with a threat from President Donald Trump to shut down the government if Congress fails to fund a Mexico border wall. Stocks managed to briefly pare losses after comments from U.S. House Speaker Paul Ryan calling a government shutdown unnecessary. Yet that was not enough to calm nerves as the deadline to approve spending measures draws near and a fight looms over raising the cap on government borrowing. Congress will have about 12 working days when it returns from its summer recess on Sept. 5 to raise the debt ceiling before the U.S. Treasury exhausts the last of its options to remain current on all of the federal government's obligations. Meanwhile, investors also looked towards a speech by Federal Reserve Chair Janet Yellen at a meeting of central bankers in Jackson Hole, Wyoming, which will be scrutinized for clues on the U.S. central bank's monetary policy. The Dow Jones Industrial Average fell 87.80 points, or 0.4 percent, to 21,812.09, the S&P 500 lost 8.47 points, or 0.35 percent, to 2,444.07 and the Nasdaq Composite dropped 19.07 points, or 0.3 percent, to 6,278.41. Page 2 of 8
5. TA Securities 24-Aug-17 A Member of the TA Group News In Brief Corporate Australia and New Zealand Banking Group Ltd 's plans to sell its stake in AMMB Holdings Bhd have fallen through, after a proposed acquisition of the Malaysian lender by a domestic rival was scrapped, sources familiar with the matter said. (The Edge) After a six-year wait, DRB-Hicom Bhd’s application to change the status of 333 acres of land in Pulau Rebak Besar, Langkawi from Malay reserve to non-Malay reserve has been rejected by the Kedah government. The rejection has affected DRB-Hicom’s plan to develop a boutique mixed luxury development on the island to replicate the success of Thailand’s Phuket and Koh Samui and Indonesia’s Bali to cater for high net-worth individuals’ tourism appetite. (Bursa Malaysia/ The Edge) Freight Management Holdings Bhd said it has obtained a licence from the Ministry of Communications and Multimedia Malaysia to operate a courier service to serve both the domestic and international markets. The licence is valid for the next three years until July 31, 2020. Separately, Freight Management’s net profit for its fourth quarter ended June 30, 2017 came in 5% higher at RM5.8mn from RM5.5mn a year ago. The higher quarterly earnings was due to improved results across its business division — except for land freight and the tug and barge divisions. For its full FY17, net profit was up 6% to RM21.0mn from RM19.9mn a year ago, as revenue grew 11% to RM461.3mn from RM413.8mn. (Bursa Malaysia/ The Edge) D&O Green Technologies Bhd's securities will be suspended today pending the release of a material announcement from the group. (Bursa Malaysia/ The Edge) IHH Healthcare Bhd saw its net profit increase 29% to RM316.6mn for the second quarter ended June 30, 2017, from RM246.1mn for the previous year's corresponding quarter, helped by a one-off gain. Excluding the exceptional items, the group said its core net profit dropped 54% to RM86.2mn due to higher depreciation, amortisation and finance costs following the opening of two new hospitals in Hong Kong and Istanbul in March. For the first half of its financial year, net profit jumped 63% to RM786.6mn from RM481.6mn in 1HFY16. (Bursa Malaysia/ The Edge) IJM Corp Bhd's net profit grew 9% to RM126.4mn for the first quarter ended June 30, 2017 from RM115.5mn in the previous year's corresponding quarter. The group said it saw profit contribution growth from its construction, property development and infrastructure segments. (Bursa Malaysia/ The Edge) UEM Sunrise Bhd's net profit for the second quarter ended June 30, 2017 increased 73% to RM94.6mn from RM54.7mn a year earlier on the back of a jump in its revenue. The group attributed its improved revenue to the sale of Alderbridge lands in Canada, amounting to C$113mn (RM371mn). Cumulative net profit for the first six months of the year climbed 170% to RM155.8mn, from RM57.7mn in the first half of the previous year. The group attributed this to higher revenue and gains from completed projects' revised cost estimates recognised in the immediate preceding quarter and share of lower profit from joint ventures and associates. (Bursa Malaysia/ The Edge) UOA Development Bhd's earnings for the second quarter ended June 30, 2017, rose 33.3% to RM165.7mn, attributed mainly to progressive recognition of the company's development projects and driven by contribution from South View Serviced Apartments, which were completed during the current quarter. However, year to date, UOA has posted a 5% decline in net profit to RM209.0mn compared to the first six months of last year, mainly due to higher cost of sales. (Bursa Malaysia/ StarBiz) Page 3 of 8
6. TA Securities 24-Aug-17 A Member of the TA Group Genting Plantations Bhd 's net profit for the second quarter ended June 30, 2017 (2QFY17) more than doubled to RM71.0mn from RM33.9mn a year ago, on higher revenue. For the cumulative six months of FY17, net profit surged 162% YoY to RM143.5mn from RM54.8mn, as revenue climbed 49% to RM846.5mn from RM567.0mn. (Bursa Malaysia/ The Edge) IJM Plantations Bhd's net profit for its first quarter ended June 30, 2017 shrank 33.0% to RM16.9mn from RM25.2mn a year earlier on a net unrealised foreign exchange (forex) loss on dollar-denominated borrowings. The group recorded an unrealised forex loss of RM800,000 compared to a gain of RM5.4mn in the previous year's corresponding quarter. (Bursa Malaysia/ The Edge) Magnum Bhd’s net profit shot up 175% to RM60.0mn in the second quarter ended June 30, 2017 compared with RM21.8mn a year ago on higher gaming profit but reduced by loss from investment holdings and other divisions. For the cumulative six months period, Magnum’s net profit fell marginally to RM90.5mn from RM90.7mn a year ago while revenue dipped 4.4% to RM1.3bn from RM1.4bn previously on lower game revenue. (Bursa Malaysia/ The Edge) Kinsteel Bhd posted a record net loss for the financial year ended June 30, 2017 as it sank deeper in the red in the final quarter of the year, no thanks to a huge RM170.9mn impairment on its convertible securities and receivables in loss-making subsidiary Perwaja Holding Bhd. Consequently, it net less grew near eight times to RM287.4mn from RM37.7mn a year ago. (Bursa Malaysia / The Edge) Dayang Enterprise Holdings Bhd's net loss widened to RM48.1mn in the second quarter ended June 30, 2017 from RM2.0mn a year earlier due to lower charter rates, impairment losses and foreign exchange losses. As for the cumulative six months of FY17, Dayang sank deeper in the red with a net loss of RM90.8mn, versus the RM28.3mn recorded in 1HFY16, mainly due to an impairment loss on property, plant and equipment of RM50.4mn and net realised/unrealised foreign exchange loss of RM24.5mn. (Bursa Malaysia/ The Edge) Panasonic Manufacturing Malaysia Bhd posted a 3.3% higher net profit for its first quarter ended June 30, 2017 to RM39.6mn from RM38.3mn a year earlier, on higher revenue in the home appliance products segment. (Bursa Malaysia/ The Edge) Manulife Holdings Bhd reported a 66.36% increase in second quarter net profit to RM9.3mn, from RM5.6mn a year earlier, on higher contribution from its life insurance business and asset management services segments. For the six months ended June 30, 2017, Manulife's net profit more than doubled to RM13.9mon, from RM5.7mn in the same corresponding period a year ago, on higher profits from its life insurance business and lower losses from its asset management services segment. (Bursa Malaysia/ The Edge) Prestar Resources Bhd's net profit more than tripled in its second quarter ended June 30, 2017 to RM18.0mn from the RM5.2mn seen in the same period last year due to recognition from a land and factory disposal. Net profit for its cumulative six-month period also grew by more than three times to RM27.3mn versus RM8.3mn mainly due to strong demand and higher sales margins. (Bursa Malaysia/ The Edge) MBM Resources Bhd's net profit for the second quarter ended June 30, 2017 fell 14.1% to RM16.2mn, from RM18.8mn a year earlier, amid a decline in the revenue of both its motor trading and auto parts manufacturing segments. The group's net profit for the first half of FY17 fell to RM35.6mn from RM37.2mn a year ago. (Bursa Malaysia/ The Edge) Page 4 of 8
7. TA Securities 24-Aug-17 A Member of the TA Group Tambun Indah Land Bhd ’s second quarter net profit dropped 29.7% to RM20.1mn from RM28.6mn a year earlier, dragged by its property development division. For the cumulative six months, Tambun Indah’s net profit dropped 15.5% to RM44.1mn, from RM52.2mn in the same period a year ago, while revenue declined 22.2% to RM150.6mn, from RM193.7mn. (Bursa Malaysia/ The Edge) Engtex Group Bhd's net profit for the second quarter ended June 30, 2017 fell 34.5% to RM13.6mn, from RM20.8mn a year earlier, on softer demand for its products. For the six months ended June 30, 2017, the group recorded an 11.1% decline in net profit to RM31.5mn from RM35.4mn. (Bursa Malaysia/ The Edge) Econpile Holdings Bhd's net profit for the fourth quarter ended June 30, 2017 was 12.2% higher at RM20.9mn compared with RM18.6mn in the same corresponding quarter last year. This brings its full-year net profit for FY17 to RM80.8mn, representing a 19.6% increase from RM67.5mn last year, despite a slight erosion in its gross profit margin from 23.9% to 22.4%. Econpile said that the company's piling and foundation services business segment was the main revenue contributor in the year. (Bursa Malaysia/ The Edge) Amway (Malaysia) Holdings Bhd's net profit for its second quarter ended June 30, 2017 increased 139%, from RM6.2mn to RM14.8mn, led by lower incentive provisions and operating expenses. Net profit for Amway's first half of financial year 2017 stood at RM24.22mn, a marginal decrease of 0.02% from RM24.23million in the preceding year. (Bursa Malaysia/ The Edge) Plenitude Bhd's net profit in the fourth quarter ended June 30, 2017 rose 25.5% to RM20.4mn from RM16.3mn a year ago, on contribution from its property development segment, which remains as the group's key contributor at 70%. For the full financial year ended June 30, 2017, Plenitude's net profit came in at RM50.7mn, 0.6% higher from the RM50.4mn recorded in FY16. (Bursa Malaysia/ The Edge) TH Heavy Engineering Bhd’s net loss widened 145% to RM16.8mn for the second quarter ended June 30, 2017, from RM6.9mn a year earlier, largely on unrealised foreign exchange losses. For the six months ended June 30, net loss shrank 6% to RM38.0mn, from RM40.3mn, while cumulative revenue plunged 79% to RM4.6mn, from RM22.2mn. (Bursa Malaysia/ The Edge) Hap Seng Plantations Holdings Bhd reported a 46% increase in its net profit to RM28.9mn for the second quarter ended June 30, 2017, from RM19.8mn in 2QFY16. Hap Seng said it benefitted from higher average selling prices and sales volume of crude palm oil. For the first half of the year, net profit almost doubled to RM63.0mn from RM36.4mn in the previous corresponding period. (Bursa Malaysia/ The Edge) Page 5 of 8
8. TA Securities 24-Aug-17 A Member of the TA Group News In Brief Economy Asia Malaysia 's CPI Eases to 3.2% in July Malaysia's consumer price index (CPI) growth eased to 3.2% in July compared with 3.6% in June 2017. The Statistics Department said the transport index contributed the most increase at 7.7%, followed by food and non-alcoholic beverages (4.2%), health (2.9%) and recreation services and culture (2.6%). The transport index’s significant increase follows the previous month’s 10.5% increase. The average price of RON95 petrol was RM1.96 a litre in July 2017 compared to RM1.75 in July 2016. As for RON97, the average price increased to RM2.21 in July 2017 compared to RM2.10 in July 2016. In the case of the food and non-alcoholic beverages which accounted 30.2% in the CPI weights, the increase in July was driven by the food sub-group especially oils and fats which rose by 39.5%. Cooking oil recorded the one of the most notable increases in July with the 48.9% increase followed by spinach (11.4%), tomatoes (10.4%), Indian mackerel (10.1%) and choy sam vegetable (8.8%). The CPI for the period January to July 2017 registered an increase of 4.0% compared with the same period last year. Separately, the annual change of Leading Index (LI) which monitors the economic performance in advance increased 0.6% in June 2017. The Coincident Index (CI) which measures the current economic activity, rose 0.4% in June 2017. This was driven by the increase in Volume Index of Retail Trade (0.7%) and Industrial Production Index (0.2%). At the same time, both Diffusion Indexes sustained above 50.0% since January 2017. (New Straits Times/ Department of Statistics) Singapore Inflation Rises Less than Expected in July Singapore's consumer price inflation accelerated at a slower-than-expected pace in July, though marginally, figures from the Ministry of Trade and Industry showed. The consumer price index rose 0.6% YoY in July, just above the 0.5% climb in June. Economists had expected the inflation to accelerate to 0.7%. The measure has been rising since December last year. In July, the slight rise in inflation was mainly due to higher retail and water prices. Private road transport inflation quickened to 3.5% in July from 3.0% in June. Services inflation increased slightly from 1.3% to 1.4%. At the same time, food inflation remained stable at 1.4% in July, as the rise in non-cooked food inflation was offset by lower price increases for prepared meals. MAS core inflation that excludes the costs of accommodation and private road transport, climbed to 1.6% in July from 1.5% in June. On a monthly basis, consumer prices dropped 0.2% from June, when it fell by 0.1%. For 2017, MAS Core inflation is expected to average 1-2%, compared with 0.9% in 2016, while CPI-All items inflation is projected to rise to 0.5-1.5% from -0.5% last year. The projected pickup in inflation can be attributed to the positive contribution of energy-related components and the impact of administrative price increases, rather than generalized demand-induced price pressures. (RTT News) Thailand Exports up 10.5% YoY in July, Below Forecast Thailand's customs-cleared annual exports rose for a fifth straight month in July, but fell short of expectations, as demand from major markets increased. Exports, a key driver of Thailand's growth, rose 10.5% in July from a year earlier after June's 11.7% rise, commerce ministry data showed. A Reuters poll expected an annual rise of 11.6% in July. In JanuaryJuly, exports grew 8.2% from a year earlier. Exports have just recovered this year, but are under pressure from a strong baht, which has appreciated 7.7% against the US dollar this year, the biggest gain in Asia. (The Business Times) Japan Manufacturing PMI Climbs to 52.8 in August – Nikkei The manufacturing sector in Japan continued to expand in August, and at a faster pace, the latest survey from Nikkei revealed with a Manufacturing PMI score of 52.8. That's up from 52.1 in July, and it moves farther above the boom-or-bust line of 50 that separates expansion from contraction. Individually, output, new orders, new export orders, employment, input prices and stocks of purchase all expanded at an accelerated rate. Page 6 of 8
9. TA Securities 24-Aug-17 A Member of the TA Group Future expectations remained positive , although the optimism was weaker. (RTT News) United States New-Home Sales Plunged in July as Supply Shrivels U.S. new-home sales fell sharply in July, providing fresh evidence that a shortage of housing inventory is depleting activity across all segments of the market. Purchases of newly built single-family homes, a narrow slice of all U.S. home sales, decreased 9.4% to a seasonally adjusted annual rate of 571,000 in July, the Commerce Department said. It has been surprising the extent to which new home sales have not picked up more. It does seem to reflect a bit of a market breakdown. Part of the problem is that high land and construction costs are making it difficult to build homes at lower price points, limiting the pool of buyers. Overall, the housing market has settled into a pattern of rising prices and flattening sales throughout much of the peak home buying season. A lack of new-home construction is dampening both new and existing home sales activity, despite a strong economy. A typical new home spent just 2.9 months on the market in July, down from 3.6 months a year ago, suggesting demand remains strong and buyers are snapping up homes nearly as soon as they are finished. Monthly new-home sales figures tend to be tumultuous, and so far this year the market for new homes has been gradually trending upward. Sales have risen 9.2% so far this year compared with the same period a year earlier. (The Wall Street Journal) Europe and United Kingdom Eurozone Business Growth Maintains Solid Pace in August Eurozone manufacturing businesses clocked their best month of growth in six-and-a-half years in August, offsetting the weakest services growth in seven months and keeping overall activity on steady path, a survey of private companies showed. IHS Markit's Flash Eurozone Composite Purchasing Managers' Index, considered a good guide to economic growth, edged up in August to 55.8 from 55.7 in July, slightly above the poll median estimate of 55.5. Anything above 50 is expansionary. Manufacturing activity grew at the fastest pace since April 2011, based on the strongest new export orders performance since February of that year. The eurozone manufacturing PMI rose to 57.4 from 56.6, beating the poll median forecast of 56.3, driven in by performance in Germany. But the PMI measuring Eurozone services activity dipped to 54.9 from 55.4, the weakest in seven months, along with a slowdown in new orders growth. The services business expectations index fell to 63.5 from 65.3, also its lowest since the start of the year The latest PMI readings for the Eurozone signal a continuation of the recent strong performance of the currency bloc's economy. This stabilization in the rate of expansion is pleasing, following signs of growth easing in recent months. (Reuters) ECB Head Mario Draghi Gives Nothing Away on Policy Path Ahead of Jackson Hole President Mario Draghi gave little indication about the next steps for monetary policy in the Eurozone during a speech ahead of a key meeting between central bankers. The European Central Bank chief seemed to have learned from his own mistakes by avoiding commenting on how and when he might bring monetary stimulus to an end. Speaking at a conference in Lindau, Germany, Draghi praised economists' research and said that adjustments to monetary policy are "never easy." However, he made no reference to how the bank might adjust its own policy to the improving economic data across the Eurozone, a highly debated issue among market participants. At a meeting in June, the ECB recognized the improved economic outlook in the 19-member area and the lower deflationary pressure. As a result, the bank decided to update its forward guidance to remove the reference to further rate cuts. (CNBC) Page 7 of 8
10. TA Securities 24-Aug-17 A Member of the TA Group Share Buy-Back : 23 August 2017 Company BKAWAN DAIBOCI GRANFLO PECCA TROP Bought Back Price (RM) Hi/Lo (RM) 13,000 10,000 10,000 5,700 50,500 18.82/18.80 2.18 0.26 1.48 0.96/0.95 18.82/18.80 2.18/2.15 0.26/0.245 1.50/1.48 0.96/0.945 Total Treasury Shares 33,012,331 364,400 6,769,800 477,700 4,226,542 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 Page 8 of 8
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR UMW Share Price (RM) 23-Aug-17 1.87 2.18 5.70 Target Price BETA (RM) EPS (sen) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 2.37 2.28 5.04 0.80 0.49 1.33 10.3 24.1 19.7 15.8 25.3 30.6 18.1 9.1 28.9 11.8 8.6 18.6 6.2 4.1 2.3 8.5 4.1 3.5 2.33 2.70 5.98 -19.7 -19.3 -4.7 1.86 2.08 4.09 0.5 4.8 39.3 -12.2 1.9 35.0 4.80 3.70 5.70 8.00 17.50 11.00 23.60 5.80 11.10 1.27 0.87 1.33 1.48 0.60 0.93 0.77 1.31 0.67 33.6 29.4 43.9 49.6 105.2 71.4 137.2 50.7 40.2 30.5 33.6 48.4 55.2 115.5 80.7 142.4 54.5 39.0 11.5 8.7 10.4 13.6 14.7 13.4 15.0 10.0 25.4 12.6 7.6 9.5 12.2 13.4 11.9 14.4 9.3 26.2 4.2 3.1 3.8 3.0 2.7 5.2 2.7 2.4 3.3 4.2 3.1 3.9 3.3 2.7 5.2 2.8 2.4 3.3 4.49 3.00 5.70 6.87 16.30 9.84 20.76 5.59 10.98 -14.3 -15.0 -19.5 -1.9 -5.2 -2.6 -1.0 -9.3 -7.1 3.60 2.08 3.90 4.49 12.70 7.50 19.40 4.53 8.08 6.9 22.6 17.7 50.1 21.7 27.7 6.0 11.9 26.2 3.5 6.7 6.5 49.4 14.5 16.8 4.3 7.6 17.0 0.35 1.28 5.41 3.36 0.59 1.08 2.32 1.84 5.91 0.45 1.75 6.00 3.50 0.78 0.58 2.26 1.49 6.26 0.74 0.52 0.95 1.07 0.86 1.26 na 1.01 0.16 5.5 15.3 27.9 15.3 4.9 8.3 12.7 11.5 42.0 5.5 14.3 34.6 20.2 5.7 9.6 12.5 11.6 45.7 6.3 8.4 19.4 22.0 11.8 13.0 18.3 16.0 14.1 6.4 9.0 15.6 16.6 10.2 11.2 18.5 15.9 12.9 0.0 2.3 2.2 2.2 4.3 0.9 2.4 1.6 4.2 0.0 2.3 2.2 2.8 4.3 0.9 2.4 1.6 4.2 0.51 1.37 5.52 3.61 0.74 1.39 2.41 2.48 6.15 -31.4 -6.6 -2.0 -6.9 -20.4 -22.3 -3.7 -25.7 -3.9 0.33 0.89 4.65 3.07 0.39 0.41 1.56 1.53 5.57 7.7 44.6 16.3 9.4 50.0 166.7 48.7 20.2 6.1 -19.5 21.9 13.2 5.0 -3.3 87.8 36.5 7.0 0.5 1.34 1.97 1.58 2.00 na 0.41 8.6 11.0 11.8 11.5 15.5 17.9 11.4 17.1 3.0 5.1 4.5 5.1 1.49 2.19 -10.1 -10.0 0.85 1.92 58.6 2.6 54.0 -2.0 14.98 18.30 18.06 19.14 0.49 0.49 79.3 79.6 86.2 84.0 18.9 23.0 17.4 21.8 5.3 3.9 5.7 4.1 15.30 19.10 -2.1 -4.2 13.72 15.56 9.2 17.6 7.6 11.7 2.05 7.20 24.44 1.19 84.28 4.21 1.93 4.97 0.89 2.23 8.62 27.41 1.50 88.66 4.10 2.46 4.32 1.23 0.58 0.34 0.24 0.41 0.37 0.54 0.73 0.32 0.49 6.7 26.4 121.1 6.5 290.1 22.3 27.4 15.7 8.1 7.9 30.5 151.0 6.6 327.7 24.7 27.0 16.7 11.6 30.5 27.3 20.2 18.3 29.1 18.9 7.0 31.7 11.0 26.0 23.6 16.2 18.0 25.7 17.0 7.1 29.8 7.7 2.0 4.2 2.9 5.0 3.3 3.6 3.1 0.9 2.8 2.3 4.9 3.1 5.0 3.3 4.0 4.1 0.9 3.9 3.00 8.74 26.00 1.28 85.20 4.30 2.06 5.00 1.07 -31.7 -17.6 -6.0 -7.0 -1.1 -2.1 -6.3 -0.6 -16.8 1.98 7.05 22.44 1.13 74.12 2.26 1.50 4.14 0.78 3.5 2.1 8.9 5.2 13.7 86.2 28.7 20.0 14.1 -20.2 -1.8 4.1 3.4 7.8 65.8 11.6 14.7 11.9 44.04 52.08 0.98 198.6 187.4 22.2 23.5 4.5 4.5 51.04 -13.7 40.61 8.5 -0.3 9.78 6.00 11.51 6.54 1.44 1.39 49.3 25.7 54.7 27.7 19.8 23.3 17.9 21.6 0.5 1.3 0.6 1.5 10.00 6.38 -2.2 -6.0 7.50 4.22 30.4 42.1 23.1 32.8 2.27 0.13 3.34 0.13 0.79 1.35 19.3 0.4 23.2 0.4 11.7 34.4 9.8 34.7 6.2 0.0 7.0 0.0 3.42 0.16 -33.6 -21.9 2.27 0.05 0.0 150.0 -23.3 150.0 6.00 4.19 6.41 4.70 0.74 0.49 7.9 13.3 13.1 16.4 75.6 31.5 45.9 25.5 0.6 1.5 0.6 1.8 6.71 4.35 -10.6 -3.7 5.54 3.85 8.3 8.8 -5.5 0.2 6.90 7.15 1.84 5.61 1.47 6.87 7.60 1.80 6.05 2.20 0.55 0.08 0.31 -0.24 0.27 19.5 35.8 12.4 26.4 3.7 24.6 40.0 15.1 29.8 5.5 35.5 20.0 14.9 21.2 39.4 28.0 17.9 12.2 18.8 26.8 1.2 2.5 2.0 2.4 0.6 1.6 2.8 2.4 2.7 0.9 7.40 7.36 2.38 5.94 2.62 -6.8 -2.9 -22.7 -5.6 -43.9 4.27 5.62 1.82 4.20 1.38 61.6 27.2 1.1 33.6 6.5 42.9 8.5 -12.8 4.9 -37.7 INDUSTRIAL SCIENTX SKPRES 8.50 1.47 9.28 1.75 0.44 0.56 55.1 8.6 66.6 10.6 15.4 17.1 12.8 13.8 2.1 2.8 2.4 3.5 8.99 1.48 -5.5 -0.7 6.01 1.15 41.4 27.8 26.9 14.0 MEDIA ASTRO MEDIA PRIMA STAR 2.66 0.71 2.38 3.50 0.60 1.35 1.16 0.67 0.63 13.2 0.9 3.3 14.5 2.8 4.0 20.1 82.9 71.7 18.4 25.1 58.9 4.7 1.0 17.6 4.9 3.2 7.6 2.95 1.46 2.65 -9.8 -51.4 -10.2 2.47 0.66 2.19 7.7 8.4 8.7 2.3 -38.3 6.3 -26.8 -17.9 -39.2 -8.2 -3.7 -8.2 -28.6 -7.0 -67.5 0.23 4.14 0.68 7.03 0.44 6.48 1.33 1.51 0.28 124.4 29.5 3.7 3.1 50.6 10.5 12.8 41.7 10.7 98.0 -17.5 -23.0 -1.4 47.2 2.6 -7.4 42.7 -64.6 -30.3 1.30 6.2 -18.8 BANKS & FINANCIAL SERVICES AFG 3.85 AFFIN 2.55 AMBANK 4.59 CIMB 6.74 HLBANK 15.46 MAYBANK 9.58 PBBANK 20.56 5.07 RHBBANK BURSA 10.20 CONSTRUCTION BPURI GADANG GAMUDA IJM PESONA SENDAI SUNCON WCT LITRAK Building Materials CHINHIN 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 0.51 0.76 0.93 3.7 4.6 13.8 11.1 2.0 2.0 0.69 LCTITAN 5.36 6.88 na 43.1 64.9 12.4 8.3 3.2 5.8 6.53 MHB 0.71 0.78 1.97 -2.0 -0.5 na na 0.0 0.0 1.16 MISC 7.25 6.56 0.89 56.3 46.9 12.9 15.5 4.1 4.1 7.90 PANTECH 0.66 0.69 1.15 4.0 6.1 16.5 10.7 2.7 4.2 0.68 PCHEM 7.16 7.62 0.98 34.7 39.3 20.6 18.2 2.7 2.7 7.80 SENERGY 1.50 1.71 2.46 6.6 4.0 22.7 37.8 0.7 0.7 2.10 SERBADK 2.14 2.77 na 22.1 25.2 9.7 8.5 3.3 3.6 2.30 UMWOG 0.31 0.80 2.03 -12.0 -3.5 na na 0.0 0.0 0.96 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.38 1.55 1.57 10.9 11.5 12.7 12.0 0.0 0.0 1.98
12. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price (RM) PLANTATIONS FGV IJMPLNT IOICORP KLK SIME UMCCA 1.62 3.01 4.50 24.40 9.30 6.26 Target Price BETA (RM) 1.55 3.58 4.15 26.18 10.02 7.52 1.98 0.48 1.19 0.83 1.29 0.35 EPS (sen) PER (X) FY17 FY18 FY17 FY18 4.2 12.3 18.8 103.4 34.0 37.5 8.5 14.1 21.1 120.4 37.5 34.5 38.4 24.5 24.0 23.6 27.3 16.7 19.0 21.4 21.3 20.3 24.8 18.2 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg 3.1 2.3 2.2 2.1 2.7 3.7 3.1 2.7 2.7 2.5 3.3 2.7 2.52 3.70 4.81 25.50 9.70 6.55 -35.7 -18.6 -6.4 -4.3 -4.1 -4.4 1.42 2.95 4.30 23.00 7.56 5.50 PROPERTY GLOMAC 0.65 0.70 0.40 1.6 6.3 40.5 10.2 4.2 4.2 0.83 -21.8 0.61 HUAYANG 0.82 0.96 0.54 17.3 10.2 4.8 8.0 4.9 2.4 1.43 -42.8 0.80 IBRACO 0.89 1.00 0.45 5.2 11.1 17.0 8.0 3.9 4.5 1.05 -15.2 0.76 IOIPG 2.13 2.25 0.95 17.4 17.4 12.2 12.2 3.3 3.5 2.46 -13.4 1.85 MAHSING 1.54 1.76 0.85 14.3 13.5 10.8 11.4 4.2 4.2 1.70 -9.4 1.34 SNTORIA 0.81 0.98 0.22 6.2 10.3 13.0 7.8 1.2 1.2 1.00 -19.5 0.69 SPB 4.84 5.98 0.53 25.6 22.8 13.5 15.1 2.5 2.5 5.19 -6.7 4.32 SPSETIA 3.45 4.10 0.68 11.6 12.5 36.2 33.7 4.1 4.1 4.50 -23.3 3.10 SUNWAY 4.20 4.15 0.48 15.5 15.6 17.5 17.4 1.2 1.2 4.40 -4.5 2.89 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 1.74 1.87 0.49 9.2 10.0 18.8 17.4 5.3 5.7 1.84 -5.4 1.63 CMMT 1.48 1.72 0.46 8.1 8.6 18.3 17.2 5.7 6.0 1.72 -14.0 1.45 % Chg YTD 14.1 2.0 4.7 6.1 23.0 13.7 4.5 -11.5 2.3 1.7 14.8 4.8 5.7 2.5 17.9 15.3 14.9 16.7 12.0 11.3 45.3 -7.2 -27.4 -11.0 9.3 7.7 0.6 9.5 10.2 40.0 6.7 2.1 1.2 -3.3 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.09 24.10 19.00 14.26 1.41 1.22 21.47 19.37 17.38 1.45 0.66 0.71 0.77 0.88 0.52 6.8 98.2 87.6 131.9 8.2 6.9 102.3 100.1 130.6 10.6 15.9 24.5 21.7 10.8 17.1 15.9 23.6 19.0 10.9 13.3 6.4 3.0 3.3 3.1 5.0 6.4 3.2 3.7 3.2 3.5 1.70 25.70 22.50 14.90 1.64 -35.9 -6.2 -15.6 -4.3 -14.0 1.00 22.96 18.10 13.00 1.38 9.5 5.0 5.0 9.7 2.2 -20.4 1.3 -10.8 2.6 -5.4 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 4.87 4.88 5.78 6.40 5.20 4.90 5.85 7.50 1.39 0.99 0.77 0.62 14.5 20.0 24.5 21.4 15.9 20.4 24.7 22.3 33.5 24.4 23.6 29.8 30.5 23.9 23.4 28.7 1.5 4.1 3.5 3.0 1.6 4.2 3.5 3.1 5.77 5.19 6.60 6.90 -15.6 -6.0 -12.4 -7.2 4.11 4.63 5.48 5.81 18.5 5.4 5.5 10.2 3.2 1.0 -3.3 7.6 TECHNOLOGY Semiconductor & Electronics IRIS 0.17 INARI 2.55 MPI 13.90 UNISEM 4.01 0.28 2.75 15.40 4.30 1.25 0.72 0.21 0.57 -2.3 10.1 89.4 26.9 -0.3 na 13.1 25.3 110.2 15.5 32.1 14.9 na 19.4 12.6 12.5 0.0 3.8 1.9 3.0 0.0 3.6 1.9 3.0 0.22 2.65 14.30 4.25 -25.0 -3.8 -2.8 -5.6 0.10 1.52 7.20 2.27 65.0 68.1 93.1 76.7 50.0 53.6 87.6 69.9 3.30 8.49 3.34 8.10 0.99 1.48 37.6 17.2 37.1 17.5 8.8 49.3 8.9 48.5 1.2 1.2 1.5 1.2 3.59 9.45 -8.1 -10.2 2.16 5.91 52.8 43.7 44.1 40.1 1.79 3.64 2.05 4.05 0.70 0.79 12.4 17.1 19.7 15.1 14.5 21.2 9.1 24.1 2.4 3.5 3.9 3.1 1.87 4.50 -4.3 -19.1 1.47 3.58 21.8 1.7 12.6 -15.3 TRANSPORTATION Airlines AIRASIA AIRPORT Freight & Tankers TNLOGIS WPRTS SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price (S$) BANKS & FINANCIAL SERVICES DBS 20.57 OCBC 10.99 UOB 23.49 PLANTATIONS WILMAR IFAR 3.16 0.47 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 1.15 1.06 172.9 87.7 192.9 189.2 11.9 92.4 12.5 206.5 12.2 10.9 11.9 11.4 2.9 5.7 3.0 2.9 6.7 3.0 22.3 11.5 24.6 -7.6 -4.4 -4.5 14.80 8.84 17.71 39.0 31.9 32.6 18.6 23.2 15.1 3.72 0.53 0.95 1.06 28.9 4.9 31.1 5.2 10.2 9.0 2.5 2.6 2.8 2.7 4.0 0.6 -21.0 -21.8 3.03 0.44 4.3 5.7 -12.0 -11.4 10.9 9.6 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.
13. TA Securities RESULTS UPDATE Thursday , August 24, 2017 A Member of the TA Group FBMKLCI: 1,772.94 Sector: Consumer MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Amway (Malaysia) Holdings Berhad TP: RM8.62 (+19.7%) Last Traded: RM7.20 Lower Than Expected Expenses Under Review THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Damia Othman Tel: +603-2167-9602 damia@ta.com.my Review • Amway’s 1HFY17 adjusted net profit came in slightly above our full year forecasts at 58% but within consensus estimates at 48%. The variance was due to higher-than-expected profit margin on the back of lower operating expenses and provision for sales incentives. • After excluding exceptional items like write offs and forex gains/losses, the adjusted net profit increased by 3.4% YoY to RM25.1mn. Revenue declined by 14.9% YoY to RM489.2mn for 1HFY17 due to a high-base-effect resulted from a strong buy up in 2016 before the price increases in February and April 2016 in conjunction with the 40th anniversary sales. • QoQ, 2QFY17 adjusted net profit improved by 33.7% to RM14.4mn due to increase in revenue by 6.3% to RM252.1mn. The higher revenue was attributed positive results from the sales and marketing programmes. Also, a reduction in quarterly operating expenses contributed to strong net profit too. • The board declared a second single tier interim dividend of 5 sen/share, which is equivalent to the same period last year. Impact • We made no change to our FY17-19 earnings projections, pending updates from analyst briefing. Outlook • In order to mitigate the soft economic condition and Ringgit weaknesses, the group will strive to manage operating costs effectively. Having said that, the group will continue to spend on sales and marketing initiatives as well as continued support to ABO’s businesses to sustain future earnings and protect its market share. • We believe that top-line growth will be driven by sales and marketing initiatives through introduction of new products e.g. ARTISTRY™ EXACT FIT™ Cushion Foundation & Perfecting Concealer, IDEAL RADIANCE™ New and Advanced Collection, Spring Colour Cosmetics, and G&H Personal Care Collection Phase II on top of others which will be launched in the remainder of 2017. www.taonline.com.my 6 Share Information 3 Bloomberg Code % Stock Code Amw MK 6351 Main Market 164.4 1,183.7 6.0 8.74/7.05 19.5 10.6 0.3 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 (%) Amway Global Development Skim Amanah Saham Bumiputra Kumpulan Wang Persaraan Employees Provident Fund 51.7 13.1 9.7 6.1 Forecast Revision Forecast Revision (%) Adj. Net Profit (RM mn) Consensus TA's / Consensus (%) Previous Rating FY17 0.0 43.4 51.9 83.5 Hold (NA) FY18 0.0 50.1 59.3 84.5 Financial Indicators Net Gearing ROE (%) ROA (%) NTA/Share (RM) Price/NTA (x) FY17 Net cash 21.2 10.6 1.3 7.2 FY18 Net cash 31.2 15.2 1.4 6.9 Scorecard vs TA vs Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth % of FY17 58 Above 48 Within Amway (2.4) (6.1) (9.8) (16.2) FBM KLCI 0.6 0.1 4.4 5.4 (12-Mth) Share Price relative to the FBM KLCI Valuation • We maintain our target price of RM8.62/share based on DDM valuation and put our call Under Review pending an analyst briefing today. Source: Bloomberg Page 1 of 2
14. TA Securities 24-Aug-17 A Member of the TA Group 2QFY17 Results Analysis (RMmn) FYE December 31 (RM'mn) Revenue 2QFY16 268.9 1QFY17 237.2 2QFY17 252.1 QoQ (%) 6.3 YoY (%) (6.3) 1HFY16 574.8 1HFY17 489.2 YoY (%) (14.9) Adj. EBIT Extra-ordinary items (EI) Net finance (costs)/income 8.1 0.2 1.6 13.1 (1.3) 1.5 18.2 0.4 1.3 39.5 nm (17.3) >+100 nm (22.1) 31.5 (0.1) 3.4 31.3 (0.9) 2.8 (0.5) nm (17.8) Profit Before Tax (PBT) Adj. PBT 9.9 9.8 13.3 14.6 19.9 19.5 49.6 33.6 >+100 >+100 34.8 34.9 33.2 34.1 (4.5) (2.2) Taxation Reported Net Profit Adj. Net Profit (3.8) 6.2 6.0 (3.9) 9.5 10.7 (5.1) 14.8 14.4 33.3 56.3 33.7 36.7 >+100 >+100 (10.6) 24.2 24.3 (9.0) 24.2 25.1 (14.9) (0.0) 3.4 (sen) (sen) (sen) 3.8 3.6 5.0 5.7 6.5 5.0 9.0 8.7 5.0 56.2 33.7 nm >+100 >+100 nm 14.7 14.8 10.0 14.7 15.3 10.0 nm 3.4 nm (%) (%) (%) (%) 3.0 3.6 2.2 38.6 5.5 6.2 4.5 26.4 7.2 7.7 5.7 26.4 %-points 1.7 1.6 1.2 (0.1) %-points 4.2 4.1 3.5 (12.2) 5.5 6.1 4.2 30.3 6.4 7.0 5.1 26.4 %-points 0.9 0.9 0.9 (3.9) EPS Adj. EPS DPS Adj. EBIT Margin Adj. PBT Margin Adj. Net Margin Effective Tax Rate Earnings Summary (RMmn) FYE December 31 (RM mn) Revenue EBITDA EBIT Reported PBT Reported Net Profit Adj. Net Profit EPS (sen) Adj. EPS (sen) PER (x) Dividend/share (sen) Div. Yield (%) 2015A 1,019.9 89.4 82.1 89.3 63.9 64.0 38.9 39.0 22.7 45.0 4.4 2016A 1,087.5 72.5 66.0 73.0 54.6 52.6 33.2 32.0 29.2 30.0 3.4 2017E 1,153.4 57.3 50.9 57.8 43.4 43.4 26.4 26.4 29.2 30.0 3.4 2018F 1,221.6 65.7 59.5 66.8 50.1 50.1 30.5 30.5 25.1 35.0 4.0 2019F 1,304.7 85.4 79.3 86.8 65.1 65.1 39.6 39.6 21.9 40.0 4.6 Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 2 of 2
15. RESULTS UPDATE TA Securities Thursday , August 24, 2017 FBM KLCI: 1,772.94 Sector: Healthcare A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 TP: RM6.41 (+6.8%) IHH Healthcare Berhad Last Traded: RM6.00 Bottom Line Weighted Down by Newer Hospitals Hold THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Wilson Loo Tel: +603-2167 9606 wilsonloo@ta.com.my Review IHH’s 1HFY17 headline net profit increased by 63.6% YoY to RM786.6mn. However, stripping out exceptional items amounting to RM498.6mn, core net profit declined by 32.4% YoY to RM288.0mn. This was below ours and consensus estimates respectively at 36.7% and 29.5% mainly due to the heavier than expected depreciation, amortisation and finance costs associated with two new hospitals (Gleneagles Hong Kong and Acibadem Altunizade) recently opened in March 2017. The bulk of the exceptional items relates to the RM554.5mn gain on disposal from the group’s divestment of its entire 10.9% stake in Apollo Hospital Enterprise Limited. Overall, the group’s underlying performance was intact with 1HFY17 revenue growing by 10.3% YoY on the back of higher inpatient admissions (Singapore +2.7% YoY, Malaysia +3.9% YoY, Turkey +37.0% YoY, India +14.7% YoY) and revenue intensity (a function of case complexity and medical inflation) across the group’s home markets (Singapore +5.8% YoY, Malaysia +10.5% YoY, Turkey +4.0% YoY, India +1.3% YoY). Notably, Singapore continues to account for the bulk of the group’s revenue (35% vs. 36% in 1HFY16) and profitability (EBITDA: 47% vs. 40% in 1HFY16). At the bottom line though, profitability was weighted down by preoperating and start-up costs as well as increased depreciation, amortisation and finance costs associated with the opening of two new hospitals (Gleneagles Hong Kong and Acibadem Altunizade) in March 2017. QoQ, borrowings increased by 5.9% to RM8.0bn, mainly on increased Hong Kong dollar borrowings by 34.1% to RM1.9bn. Altogether, EBITDA margins declined by 3.5%-points YoY to 20.2%. Excluding the impact of new hospitals, the margin decline was 1.0%-point YoY to 23.6%. The group’s financial standing remained robust with net gearing easing to 0.14x as at 2QFY17 from 0.18x as at 1QFY17. Parkway Pantai: In 1HFY17, revenue increased by 11.1% YoY while EBITDA declined by 6.9% YoY. Underlying growth was driven by the continuous ramp up of Mount Elizabeth Novena Hospital (MENH) in Singapore (revenue +7.4% YoY, EBITDA +15.1% YoY) as well as Pantai Hospital Manjung, Gleneagles Kota Kinabalu Hospital and Gleneagles Medini Hospital in Malaysia which turned EBITDA positive. We expect increased contributions from MENH in the near term alongside its continued ramp up. According to management, it currently has 280 beds with an average occupancy of 65% and there is room for adding another 20-30 beds with a target to complete by 4QFY17/1QFY18. As for the newly opened Gleneagles Hong Kong, in its first full quarter of operations, progress has been commendable with North Asia’s revenue increasing by 32.2% QoQ and EBITDA losses narrowing by 26.8% QoQ as higher operating leverage was achieved on the back of more complex cases undertaken and growing outpatient footfall. Its YTD revenue per inpatient of RM28,447 is comparable to that of Singapore’s of RM29,325 in 2QFY17. We believe that the hospital will continue to gain traction in 2HFY17 with management alluding of tie ups with major insurance companies kicking in. Page 1 of 4 www.taonline.com.my Share Information Bloomberg Code IHH MK Bursa Name IHH Stock Code 5225 Listing Main Market Share Cap (mn) 8,239.1 Market Cap (RM'mn) 49,434.4 Par Value (RM) 1.00 52-wk Hi/Lo (RM) 6.71/5.54 12-mth Avg Daily Vol (000' shrs) 5,811.6 Estimated Free Float (%) 18.6 Beta 0.7 Major Shareholders (%) Khazanah Nasional Bhd - 41.1 Mitsui & Co Ltd - 18.0 EPF - 9.6 Central Depository Pte Ltd - 5.1 Forecast Revision Forecast Revision (%) Net profit (RM'mn) Consensus TA/Consensus (%) Previous Rating FY17 FY18 (16.8) (12.4) 653.8 1,078.0 957.2 1,204.0 68.3 89.5 Hold (Maintained) Financial Indicators Net gearing (x) CFPS (RM) Price/CFPS (x) ROA (%) ROE (%) NTA/Share (RM) Price/NTA (x) FY17 0.1 0.3 18.4 1.7 2.9 1.4 4.3 FY18 0.1 0.4 18.1 2.8 4.6 1.5 4.0 % of FY17 36.7 29.5 Below Below IHH 0.5 4.7 1.5 (9.4) FBMKLCI 0.6 0.1 4.4 5.4 Scorecard vs TA vs Consensus Share Performance Price chg (%) 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg
16. TA Securities 24-Aug-17 A Member of the TA Group Acibadem Holdings : In 1HFY17, while revenue increased by 9.7% YoY, EBITDA declined by 8.2% YoY. However, on a constant currency basis, revenue and EBITDA respectively increased by 27% YoY and 7% YoY. The performance was on the back of the continuous ramp up of existing and newly opened hospitals as well as the acquisition of Tokuda Group and City Clinic Group which were acquired in June 2016. Note that apart from cost pressures and the weakening of the Turkish Lira against the USD and Euro, the decline in EBITDA was partly attributed to the restructuring of operations whereby patients from existing hospitals (Acibadem Kadikoy Hospital and Acibadem Kozyatagi) were channelled to the new Acibadem Altunizade Hospital thereby leading to lower overall operating leverage. We note that these efforts are for the newer hospital to focus on more complex cases and existing two hospitals to focus on general medicine and outpatient services. The three hospitals are situated close by. Impact Our FY17/FY18/FY19 earnings estimates are reduced by 16.8%/12.4%/9.8% to RM653.8mn/RM1,078.0mn/RM1,321.4mn upon accounting for higher depreciation, amortisation and finance costs as well as minor housekeeping to capacity expansion. Outlook We remain optimistic on the group’s prospects in its home markets of Singapore, Malaysia, India and Turkey as well as growth markets of Hong Kong and China. Poised for further growth, above the more than 10,000 beds the group has in its portfolio, circa 1,733 beds are in the pipeline via greenfield and brownfield projects targeted for completion across 2018 to 2020. These includes +420 beds in Malaysia, +443 beds in Turkey and +870 beds in China which management alluded to be on track. In nearer term, we expect greater overall operating leverage as the group continues to ramp up MENH, Gleneagles Hong Kong and India operations. Challenges for the group include managing costs pressures, geopolitical and foreign exchange risks. Generally, a stronger USD relative to the currencies of the group’s markets will lead to higher procurement costs. And notably for Acibadem which is vulnerable to foreign exchange movements due to its high proportion of borrowings in USD and Euro, management alluded that efforts to seek de-risking options are on-going. Valuation & Recommendation Our TP is revised slightly to RM6.41/share (from RM6.39/share) based on SOTP valuation. Against CY18, this translates into an implied EV/EBITDA of 19.7x and PE multiple of 48.9x. Faster than expected gestation of newer hospitals, especially that of Gleneagles Hong Kong which has thus far displayed revenue potential that is comparable to that of the group’s Singapore operations would be a re-rating catalyst for the stock. We reiterate Hold in view of the limited upside potential. Figure 1: Forward PER x 29 27 +1SD: 66.5x +1SD: 25.6x 25 Average: 22.4x 23 Average: 55.0x 21 19 -1SD: 19.2x 17 -1SD: 43.5x Source: Bloomberg, TA Securities Page 2 of 4 Jul-17 Jan-17 Apr-17 Jul-16 Oct-16 Jan-16 Apr-16 Jul-15 Oct-15 Jan-15 Apr-15 Jul-14 Source: Bloomberg, TA Securities Oct-14 Jan-14 Apr-14 Jul-13 Oct-13 Jan-13 Apr-13 Jul-17 Jan-17 Apr-17 Jul-16 Oct-16 Jan-16 Apr-16 Jul-15 Oct-15 Jan-15 Apr-15 Jul-14 Oct-14 Jan-14 Apr-14 Jul-13 Oct-13 Jan-13 15 Apr-13 x 85 80 75 70 65 60 55 50 45 40 35 Figure 2: Forward EV/EBITDA
17. TA Securities 24-Aug-17 A Member of the TA Group Table 1 : SOTP Valuation (RM mn’) Singapore Malaysia Turkey International Method EV/EBITDA EV/EBITDA EV/EBITDA EV/EBITDA Multiple 25 20 22 30 Consensus P/E 15 Value 28,428 9,891 17,433 988 56,740 1,242 6,973 1,415 49,939 1,889 916 52,744 Less: Net debt/(cash) Less: MI Add: MI Net debt PLife REIT IMU Health Total equity value Shares outstanding (mn') TP Stake 100% 100% 60% na 36% 100% 8,239 RM6.41 Table 2: Earnings Summary (RM mn’) FYE Dec Revenue EBITDA Depreciation & amortisation EBIT Net finance cost Associates & JV PBT Income tax expense MI Net profit (-MI) Core net profit (-MI) FY15 8455.5 2218.7 (689.4) 1529.3 (326.0) 14.3 1217.5 (165.4) (118.2) 933.9 899.2 FY16 10021.9 2188.9 (799.9) 1389.0 (528.1) 16.7 877.6 (269.6) 4.4 612.4 866.0 FY17F 11699.9 2348.3 (984.9) 1363.4 (290.4) 4.8 1635.5 (359.8) (186.9) 1088.8 653.8 FY18F 13172.6 2931.2 (1011.7) 1919.6 (267.4) 5.2 1657.3 (364.6) (214.7) 1078.0 1078.0 FY19F 14920.1 3378.8 (1040.9) 2337.9 (217.0) 5.6 2126.5 (467.8) (337.3) 1321.4 1321.4 11.3 23.8 15.0 3.0 0.5 54.9 7.4 (34.4) (3.7) 3.0 0.5 57.0 13.2 77.8 (24.5) 3.3 0.6 75.5 13.1 (1.0) 64.9 3.3 0.5 45.8 16.1 22.6 22.6 4.0 0.7 37.4 EPS (sen) EPS growth (%) Core EPS growth (%) DPS (sen) Dividend yield (%) Core PER (x) Table 3: Peer Comparison Company EV/EBITDA (x) CY17 CY18 ROE (%) Dividend Yield CY17 CY18 CY17 CY18 TP RM6.00 RM6.00 Hold Global 49,434 -24.5 64.9 75.5 45.8 23.4 18.8 2.9 4.6 0.6 0.5 Ramsay Healthcare Ltd Primary Healthcare Ltd AUD 74.08 AUD 3.54 74.08 3.54 N.R. N.R. Australia Australia 50,656 6,246 12.7 -3.2 10.7 8.3 26.6 19.4 24.1 17.9 12.9 8.4 11.9 8.1 23.9 -9.5 23.4 5.4 1.9 3.1 2.2 3.5 Phoenix Healthcare Group Co Ltd Harmonicare Medical Holdings Ltd HKD 9.51 HKD 2.97 9.51 2.97 N.R. N.R. Hong Kong Hong Kong 6,744 1,232 15.2 26.1 18.1 9.5 25.3 16.0 21.4 14.6 16.2 5.4 13.1 4.9 7.9 8.5 8.1 8.6 0.8 1.8 0.9 1.9 Apollo Hospitals Enterprise Ltd Fortis Healthcare Ltd INR 1,093 INR 153 1092.6 152.6 N.R. N.R. India India 10,158 5,288 5.4 -65.0 55.6 121.4 59.8 77.2 38.4 34.9 21.7 19.7 17.8 15.9 6.9 4.2 9.9 3.9 0.5 0.0 0.7 0.1 Mitra Keluarga Karyasehat Tbk PT IDR 2,410 Siloam International Hospitals Tbk PT IDR 11,000 2410 11000 N.R. N.R. Indonesia Indonesia 11,236 4,584 5.0 36.9 11.4 30.7 47.8 110.8 42.9 84.8 36.1 17.8 31.5 14.8 19.4 4.2 20.1 4.9 1.3 0.1 1.5 0.1 IHH Healthcare Bhd Recomm. Country Mkt Cap EPS Growth (%) PER (x) (MYR mn) CY17 CY18 CY17 CY18 Price KPJ Healthcare Bhd RM4.19 RM4.19 Buy Malaysia 4,410 -6.3 23.5 37.5 30.3 15.2 13.5 8.1 9.5 1.5 1.8 Ryman Healthcare Ltd NZD 9.31 9.31 N.R. New Zld. 14,397 -12.7 12.0 25.4 22.7 23.2 20.8 13.9 10.8 2.1 2.3 19.8 203 2.7 14.3 2.34 N.R. N.R. N.R. N.R. N.R. Thailand Thailand Thailand Thailand Thailand 39,369 18,987 4,562 4,577 3,304 32,162 5,058 37,876 -3.8 1.3 35.1 20.3 11.1 -2.4 4.9 -3.9 11.3 9.2 6.9 16.1 26.3 27.6 30.9 27.0 38.0 40.2 37.5 39.6 41.1 45.6 45.9 45.6 34.1 36.8 35.1 34.1 32.5 34.6 34.3 34.6 22.9 24.1 23.7 19.8 25.3 20.5 17.2 21.3 20.9 22.0 21.2 17.3 21.7 17.9 14.7 18.6 15.1 24.9 11.4 17.1 18.9 13.5 6.7 15.0 14.1 23.8 12.2 18.2 20.1 14.0 9.5 15.0 1.4 1.4 1.0 1.3 1.4 1.3 1.2 1.3 1.4 1.5 1.1 1.6 1.6 1.4 1.4 1.4 Bangkok Dusit Med Service THB 19.80 Bumrungrad Hospital Rub Co THB 203.00 Vibhavadi Medical Centre PCL THB 2.70 Bangkok Chain Hospital PCL THB 14.30 Chularat Hospital PCL THB 2.34 Weighted Average Weighted Average Small Mkt Cap (<RM10bn) Weighted Average Large Mkt Cap (>RM10bn) Page 3 of 4
18. TA Securities 24-Aug-17 A Member of the TA Group Table 4 : Results Analysis (RM mn’) FYE Dec 2QFY16 1QFY17 2QFY17 QoQ (%) YoY (%) 1HFY16 1HFY17 YoY (%) Revenue - Parkway Pantai - Acibadem Holdings - IMU Health - Plife REIT - Others EBITDA - Parkway Pantai - Acibadem Holdings - IMU Health - Plife REIT Depreciation Amortisation Forex Finance income Finance costs Associates JV Others PBT Tax MI Net profit Core net profit 2,473.3 1,506.7 867.9 65.9 32.3 0.5 554.4 362.4 159.6 26.8 65.0 (191.1) (12.3) 2.1 22.4 (61.3) 0.4 4.4 54.8 373.8 (89.4) (38.3) 246.1 187.7 2,684.8 1,674.1 914.8 62.9 32.5 0.5 565.6 352.0 146.3 27.4 69.0 (202.0) (13.6) 1.4 43.3 (184.2) 0.1 2.0 313.4 526.1 (81.8) 25.8 470.0 201.8 2,771.8 1,714.7 953.6 68.4 34.6 0.6 535.8 353.8 145.0 24.6 69.8 (234.2) (16.6) (11.2) 24.3 (130.7) 0.7 (0.8) 240.3 407.5 (102.1) 11.1 316.6 86.2 3.2 2.4 4.2 8.7 6.3 5.3 (5.3) 0.5 (0.9) (10.3) 1.2 15.9 22.1 (890.9) (44.0) (29.0) 616.8 (140.9) (23.3) (22.5) 24.8 (56.7) (32.7) (57.3) 12.1 13.8 9.9 3.8 6.9 11.7 (3.4) (2.4) (9.1) (8.2) 7.4 22.6 34.3 (630.6) 8.3 113.2 79.2 (118.6) 338.5 9.0 14.2 (129.1) 28.6 (54.1) 4,948.6 3,050.7 1,703.9 124.1 63.2 6.8 1,171.4 757.7 317.4 50.0 130.1 (377.8) (25.8) (10.7) 40.2 (131.4) 0.7 7.6 54.8 729.1 (172.7) (74.9) 481.6 426.0 5,456.7 3,388.8 1,868.4 131.3 67.1 1.1 1,101.4 705.8 291.3 52.0 138.8 (436.3) (30.1) (9.8) 67.6 (314.9) 0.8 1.2 553.7 933.6 (183.9) 36.9 786.6 288.0 10.3 11.1 9.7 5.8 6.0 (84.2) (6.0) (6.9) (8.2) 4.1 6.7 15.5 16.8 (8.3) 68.0 139.6 10.9 (84.5) 910.4 28.0 6.5 (149.3) 63.3 (32.4) Profitability ratios (%) EBITDA margin - Parkway Pantai - Acibadem Holdings - IMU Health - Plife REIT PBT margin Tax rate Net profit Core net profit 22.4 24.1 18.4 40.7 201.2 15.1 23.9 10.0 7.6 21.1 21.0 16.0 43.6 212.2 19.6 15.5 17.5 7.5 19.3 20.6 15.2 36.0 202.0 14.7 25.1 11.4 3.1 %-points (1.7) (0.4) (0.8) (7.6) (10.1) (4.9) 9.5 (6.1) (4.4) %-points (3.1) (3.4) (3.2) (4.7) 0.8 (0.4) 1.1 1.5 (4.5) 23.7 24.8 18.6 40.3 205.7 14.7 23.7 9.7 8.6 20.2 20.8 15.6 39.6 207.0 17.1 19.7 14.4 5.3 %-points (3.5) (4.0) (3.0) (0.7) 1.3 2.4 (4.0) 4.7 (3.3) Operating statistics Inpatient traffic - Singapore - Malaysia - Turkey - India 18,698 47,067 37,750 14,919 18,842 50,541 52,581 16,008 18,936 49,347 52,995 17,194 % 0.5 (2.4) 0.8 7.4 % 1.3 4.8 40.4 15.2 36,792 96,093 77,046 28,952 37,778 99,888 105,576 33,202 % 2.7 3.9 37.0 14.7 Revenue per patient - Singapore (SGD) - Malaysia (RM) - Turkey (TL) - India (INR) 8,725 5,936 7,487 122,200 9,380 6,185 7,616 121,935 9,484 6,548 7,785 123,113 % 1.1 5.9 2.2 1.0 % 8.7 10.3 4.0 0.7 8,919 5,760 7,404 120,992 9,432 6,367 7,701 122,524 % 5.8 10.5 4.0 1.3 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 4 of 4
19. TA Securities RESULTS UPDATE Thursday , 24 August, 2017 FBMKLCI: 1,772.94 Sector: Construction A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 IJM Corporation Berhad TP: RM3.50(+4.2%) Last traded: RM3.36 Strong Rebound in Cargo Throughput SELL THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Ooi Beng Hooi Tel: +603-2167-9612 benghooi@ta.com.my Results Review IJM’s 1QFY18 net profit of RM126.4mn came in at 17.2% and 18.8% of our and street’s full-year estimates, respectively. We deem the results to be within expectations as we have expected a slower 1QFY18 due to Hari Raya Aidilfitri Holiday in June 2017. Furthermore, we expect the construction progress of major projects which include Kuantan Port, West Coast Expressway, MRT 2 Package V203 and Retail Mall at Bukit Bintang City Centre to accelerate in the remaining quarters of FY18. YoY, 1QFY17 net profit of RM126.4mn was 9.4% higher as all of its divisions recorded higher segmental revenues. The infrastructure division recorded a 211.3% surge in PBT to RM64.6mn mainly due to a significant jump in cargo throughput, from 2,949FWT a year ago to 5,114FWT in the reporting quarter. The stronger infrastructure earnings were also boosted by higher contribution from the associates. However, the quarterly profit was partially reduced by lower contributions from the industry and plantation divisions, which negatively affected by 1) higher raw material costs, 2) lower volume recorded in the ready-mixed concrete subsegment, and 3) higher production cost and depreciation recorded in the plantation unit. QoQ, IJM recorded 7.1% drop in core profit as revenue declined 12.0% to RM1,468.3mn. All divisions registered lower earnings except for the infrastructure division which saw PBT surged 82.0% for the reason stated above. Divisions that experienced significant drop in earnings include property (PBT -77.5%), Industries (PBT – 38.9%) and Plantation (PBT 32.9%). Impact We perform some house-keeping to our earnings model after the release of FY17 audited accounts and keep our FY18 to FY20 earnings forecasts largely unchanged. Outlook We expect to see a stronger performance in the construction division going forward, supported by strong outstanding construction order book of about RM8.7bn. SHARE INFO Bloomberg Code IJM MK Bursa Name IJM Stock Code 3336 Listing Main Market Share Cap (m) 3627.8 Market Cap @ RM (RMm) 12189.3 52-wk Hi/Lo (RM) 3.61/3.07 12-mth Avg Daily Vol (000' shrs) 4596 Estimated Free Float (%) 60.6 Beta 1.07 Major Shareholders (%) Employees Provident Fund - 14.91 Lembaga Tabung Haji - 5.83 Skim Amanah Saham Bumiputera - 5.57 Kumpulan Wang Persaraan - 5.06 FORECAST REVISION Forecast Revision (%) Net profit (RMm) Consensus TA/Consensus (%) Previous Rating Page 1 of 3 FY18 FY19 734.2 771.3 671.2 741.4 109.4 104.0 Sell (Maintained) SCORECARD % of FY 17.2 18.8 Within Within FINANCIAL INDICATORS Net debt/equity (%) CFPS (sen) P/CFPS (x) ROA (%) NTA/Share (RM) Price/ NTA (x) FY18 35.5 17.0 19.8 4.0 1.8 1.8 FY19 27.7 42.9 7.8 4.1 1.8 1.7 SHARE PERFORMANCE Price chg (%) 1 mth 3 mth 6 mth 12 mth IJM (4.00) (4.00) (1.75) (1.18) FBMKLCI 0.78 0.33 4.02 5.34 vs TA vs Consensus (12-Mth) Share Price relative to the FBM KLCI While we expect the outlook for the property market to remain challenging, we expect the group would be able to maintain its performance, supported by unbilled property sales of RM1.7bn, which was unchanged compared with the number a quarter ago. Valuation No change to our target price of RM3.50, based on unchanged CY18 PE multiples of 20x for the construction division, 18.4x for the plantation division (20% holding discount to IJMPLNT target PE multiple of 23x), 16x for the infrastructure divisions, 12x for the property division and 14x for www.taonline.com.my Source: Bloomberg
20. TA Securities 24-Aug-17 A Member of the TA Group the building material division . Maintain our SELL on IJM as we think the share price is trading close to its fair value. Earnings Summary FYE March (RMmn) Revenue EBITDA EBITDA margin Adj. PBT Net profit EPS* Diluted EPS* EPS Growth PER GDPS* Div Yield ROE P/NTA 2016 5128.2 1570.6 30.6 853.8 793.6 491.6 12.5 (23.2) 26.8 10.0 3.0 5.6 2.1 (%) (sen) (sen) (%) (x) (sen) (%) (%) (x) Note: * Adjusted for 1-1 bonus issue in Sep 15 Page 2 of 3 2017 6065.3 1390.8 22.9 910.0 653.8 553.8 15.4 22.7 21.8 7.5 2.2 6.0 2.0 2018F 7288.1 1606.8 22.0 1128.0 734.2 734.2 20.3 31.7 16.6 9.5 2.8 7.6 1.8 2019F 6808.1 1673.1 24.6 1185.2 771.3 771.3 21.2 4.8 15.8 9.5 2.8 7.6 1.7 2020F 7975.4 1623.5 20.4 1128.0 718.1 718.1 19.7 (7.1) 17.0 10.5 3.1 6.8 1.6