Bursa Malaysia Daily Market Report - 26 February

Transcription

1. Monday , 26 February, 2018 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only News 1. 2. 3. Daily Market Commentary Weekly Strategy Weekly Technical Outlook Fundamental Reports 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Ann Joo Resources Berhad: Looking Forward a Better Year Ahead Automotive Sector: A Slow Start_180226 Elsoft Research Berhad: Growing Smart Devices Segment Felda Global Ventures Berhad: Valuations Stretched Genting Berhad: Still Growing Strong in 4Q17 IOI Corporation Berhad: No Earnings Surprise IOI Properties Group Berhad: 2QFY18 Property Sales Declined QoQ and YoY MBM Resources Bhd: Headwinds Remain Scientex Berhad: On Track to Become Top Regional Player Sentoria Group Bhd: Launching RM400mn New Projects in 2HFY18 Sime Darby Bhd: Good Prospects but Pricey YTL Power International Berhad: Sluggish 1HFY18 Below Expectations Technical Reports 1. 2. 3. 4. 5. 6. Weekly Technical Stock Picks Daily Money Flow FBMKLCI Weekly Ace Market Stock Watch Weekly Small Cap Stock Watch Weekly Stock Screen Weekly Foreign Stock Watch (AUS, HK, FSSTI & US) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
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Daily Market Commentary Monday , 26 February 2018 TA Research, e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (23.02.2018) Volume Main Market 2,329.5 793.0 Warrants 631.2 166.9 ACE Market 576.9 239.6 Bond 7.8 5.0 ETF 2.2 0.5 LEAP 0.0 0.0 Total 3,547.6 Off Market 75.9 -54.1 2,481.1 96.8 95.3 2.3 2.6 0.0 2,678.1 242.2 Value 578.5 9.8 26.0 1.5 0.6 0.0 -719.5 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP February Futures Other Markets DOW JONES NASDAQ (US) FTSE (UK) NIKKEI (JAPAN) KOSPI (KOREA) HANG SENG (HK) FSSTI (S'PORE) SET (BANGKOK) JCI (JAKARTA) SHANGHAI SHENZHEN AUSTRALIA 30.0 13.0 10.7 5.5 5.5 4.3 3.9 1.2 % YTD chg 6.43 37.02 96.18 10.00 0.35 0.28 0.57 0.54 3.60 2.87 -0.13 4.20 25,309.99 7,337.39 7,244.41 21,892.78 2,451.52 31,267.17 3,533.22 1,808.06 6,619.80 3,289.02 1,775.17 5,999.79 347.51 127.31 -7.98 156.34 37.24 301.49 44.76 19.43 26.74 20.46 3.20 48.90 1.39 1.77 -0.11 0.72 1.54 0.97 1.28 1.09 0.41 0.63 0.18 0.82 2.39 6.29 -5.77 -3.83 -0.65 4.51 3.83 3.10 4.16 -0.55 -6.54 -1.08 (mn) 0.48 15.64 0.75 0.39 1.39 0.12 0.76 0.28 Exchange Rate USD/MYR 3.9185 -0.001 USD/JPY 107.05 -0.290 EUR/USD 1.229 0.0002 Counter MAYBANK PBBANK CIMB IHH DIGI SIMEPLT MISC IOICORP NESTLE PETDAG Mkt Cap. Chg (RM’mn) (RM) 111,133 88,042 66,332 49,932 38,098 37,541 31,336 30,100 28,844 25,373 0.06 0.52 0.06 0.07 0.01 0.02 0.02 0.01 1.50 0.04 Stock-wise, while recent gains on construction related stocks CMSB and Wah Seong should stall as profit-taking and selling increase due to overbought momentum, oil & gas related stocks such as Bumi Armada, Dialog, Sapura Energy and UMW Oil & Gas should attract bargain hunters on keen rotational interest as global oil prices stay buoyant. News Bites Vol. (mn) 16.71 8.47 17.16 4.77 3.60 7.49 3.52 7.11 0.16 0.97 Commodities Futures Palm Oil (RM/mt) 2,524.00 34.00 Crude Oil ($/Barrel) 63.57 0.86 Gold ($/tr.oz.) 1,330.50 -2.90 Important Dates LBS - 1:10 Bonus Issue - BI of up to 162.9m shares. 1 bonus share for every 10 subdivided shares held. Ex-Date: 22/02/2018. Entitlement Date: 26/02/2018. LISTING ON: 27/02/2018. With technical indicators for the FBM KLCI and buying momentum improving following last week's recovery, which mirror a bullish "flag" pattern breakout on the daily chart after last Friday's surge, the local market should attract more buyers this week as more market players return from the CNY holiday. Elsewhere, investors should pay close attention to new US Fed Chairman Jerome Powell as he speaks for the first time this week on the US central bank's likely policy stance on inflation and accelerating economic growth. Immediate resistance for the index will be at 1,878, the upper Bollinger band, followed by the 2 Feb peak of 1,880, while the record high at 1,896 of July 2014 may act as formidable upside hurdle. Immediate uptrend supports will be at 1,842 and 1,838, the respective 10 and 30-day moving averages, while crucial resistance-turn-support level is at 1,796, the June 2017 peak matching the recent low. Top 10 KLCI Movers Based on Mkt Cap. (RM) @ @ @ @ @ @ @ @ 252 140 35 3 0 0 430 % chg 1,861.50 13,313.78 17,028.34 1,860.00 Off Market UMWOG TENAGA KIPREIT MEDIAC YNHPROP TATGIAP G3 EURO Review & Outlook Value/ 1.07 345 0.15 148 0.17 60 0.30 5 1.15 2 0.00 0 0.75 560 3.19 • Axiata Group Bhd said its non-participation in Idea Cellular's qualified institutional placement of 424.24mn shares will dilute its shareholding in the Indian associate company and result in an additional estimated loss of RM240.7mn. • Scientex Bhd has set its eyes on becoming a regional powerhouse in flexible plastic packaging market with the acquisition of Klang Hock Plastic Industries Sdn. Bhd. for RM190mn. • UOA Development Bhd is acquiring a property development company that owns 9.4 acres of freehold land in Sri Petaling, for RM61.06mn. • Alliance Bank Malaysia Bhd (ABMB) has reached out to AMMB Holdings Bhd to resolve the suit it has filed against AmBank. • Felda Global Ventures Holdings Bhd plans to divest 2 or 3 non-core and non-performing assets or investments this year. • Scomi Engineering Bhd will be delisted from Bursa Malaysia from 9.00a.m., Wednesday, 28 February 2018 after the completion of its merger with parent company Scomi Group Bhd. • Reach Energy Bhd. is confident that it would return to profitability for FY18. • Despite a fire incident that burnt down its main manufacturing plant in Klang, Notion VTec Bhd remains optimistic that it will achieve about 20% growth on revenue for 2018 and 2019. • VSolar Group Bhd's plan to develop a 30 megawatts solar energy plant with Universiti Teknologi Malaysia has been aborted. • Kuantan Flour Mills Bhd, a Practice Note 17 company, has entered into MoU with MCM Petcare Sdn. Bhd. • WTK Holdings Bhd said the winding up of its wholly-owned unit Alanya Marine Ventures Sdn. Bhd. (AMV) will result in a loss of approximately RM51mn. • Tadmax Resources Bhd expects to be on a better footing this year with the bulk of the group's short-term financial commitments largely resolved. • A shortage of foreign workers is putting a drag on particleboard maker HeveaBoard Bhd's earnings, and no end is in sight. • Encorp Bhd announced the resignation of its group chief executive officer Datuk Zakaria Nordin, following the expiry of his contract. • Singapore reported no consumer inflation in January, for the first time since late 2016. Core inflation gauge in January, however, rose 1.4% from a year earlier. • Overall nationwide consumer prices in Japan climbed 1.4% on year in January. Meanwhile, producer prices were up 0.7% on year. • The U.S. labor market is near or beyond full employment, while some pockets of finance are showing signs of rising leverage and high valuations. • Germany's economy expanded at a solid pace in the fourth quarter largely driven by foreign demand. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan, Head of Research MENARA TA ONE, 22 JALAN for TA SECURITIES HOLDINGS BERHAD (14948-M) A PARTICIPATING ORGANISATION OF BURSA MALAYSIA SECURITIES BHD P RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL : 603 - 2072 1277. FAX : 603 - 2032 5048 www.ta.com.my
3. Monday , February 26, 2018 FBMKLCI: 1,861.50 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Weekly Strategy Market View, News in Brief: Corporate, Economy, and Share Buybacks Kaladher Govindan Tel: +603-2167 9609 kaladher@ta.com.my www.taonline.com.my M a r k e t V i e w Positive Technicals and Momentum Could Lift Market Higher After starting last week on a strong note following the extended weekend Lunar New Year holiday, the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) traded sideways with mild rotational plays on lower liners highlighting trade. While most investors were sidelined amid fears the US Fed meeting minutes signaled multiple interest rate increases, the rise extended on Friday, led by top consumer and banking stocks on firmer regional markets despite the overhanging worries over rising US inflation. For the week, the FBM KLCI climbed 23.22 points, or 1.26 percent to 1,861.5, with gains on Nestle (+RM3.60), Public Bank (+96sen), KLK (+59sen), HLFG (+44sen) and Petronas Dagangan (+42sen) accounting for most of the index’s rise. Average daily traded volume and value improved to 3.2 billion shares and RM2.81 billion last week, compared to the 1.61 billion shares and RM1.94 billion average respectively the previous week, as trading momentum recovered after the Chinese New Year festival break. On the US front, Federal Reserve officials are seeing an economy that may be past full employment, financial markets are frothy and overall economic growth continues to gather strength. These conditions are right for further interest rate increases, though inflation pressures remain sanguine for now, according to a key report to Congress the central bank released last Friday. The monetary policy report will be presented by new Fed Chairman Jerome Powell, along with his comments during a congressional testimony in the middle of this week. On the US bonds front, the benchmark 10-year U.S. note yield hit a four-year high after minutes from the Fed's January meeting showed the central bank sees increased economic growth and an uptick in inflation as justification to continue to raise interest rates gradually. On Friday, the yield traded below that four-year high, near 2.875 percent. Investors are worried that combination of a 2.9 percent annualized wage increase for January and a post-recession high for the consumer price index could be early warning signs of accelerating inflation. The Fed's preferred measure of inflation, the personal consumption expenditures index, still shows inflation running considerably below the committee's 2 percent target. The report mentioned low productivity growth could be holding back wage gains, with a valid reason being technological advances that didn't have disruptive impacts of earlier innovations. On the domestic front, given that technical indicators for the local benchmark index and buying momentum are improving following last week’s recovery, the local stock market should see firmer investor participation this week as more market players return from the CNY holiday. Page 1 of 8
4. 26-Feb-18 (TH I S P A GE IS IN TE N TI ON AL L Y L E F T B L AN K ) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Monday, February 26, 2018, the HOD, Kaladher Govindan, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 8
5. 26-Feb-18 N e w s i n B r i e f Corporate Axiata Group Bhd said its non-participation in Idea Cellular ’s qualified institutional placement of 424.24mn shares will dilute its shareholding in the Indian associate company to 16.34% from 18.1%. This in turn will result in an additional estimated loss of RM240.7mn for the group in FY18. (Bursa Malaysia/The Edge) Scientex Bhd has set its eyes on becoming a regional powerhouse in flexible plastic packaging market with the acquisition of Klang Hock Plastic Industries Sdn. Bhd. for RM190mn. The acquisition would boost the group's total annual output capacity by 30% to 455k tonnes from 356k tonnes currently. The deal is estimated to be completed in the 2Q2018. (Bursa Malaysia/New Straight Times) UOA Development Bhd is acquiring a property development company that owns 9.4 acres of freehold land in Sri Petaling, for RM61.06mn. The land is expected to be used for mixed development with a residential focus complemented by some commercial elements. The total GDV is estimated to be RM1bn. The acquisition shall be satisfied by cash from internally generated funds. (Bursa Malaysia/The Edge) Alliance Bank Malaysia Bhd (ABMB) has reached out to AMMB Holdings Bhd to resolve the suit it has filed against AmBank. The suit alleges misappropriation of sensitive information from ABMB by current AmBank employees. These individuals were said to be ex-employees of ABMB. (The Edge) Felda Global Ventures Holdings Bhd plans to divest 2 or 3 non-core and nonperforming assets or investments this year, which are valued at “a few hundred million ringgit” and add income to the group this year, according to Group president and CEO Datuk Zakaria Arshad. Meanwhile, the group also reported its 4QFY17 results. Net profit declined 31.9% YoY to RM76.57mn from RM112.46mn, as the group's non-controlling interests were entitled to the higher share of profit after tax for the quarter under review. Quarterly revenue stood at RM4.28bn, which was 17% YoY lower than RM5.15bn. For FY17, the group’s net profit jumped more than 4 times to RM143.73mn from RM31.47mn, despite revenue declining 1.5% to RM16.97bn, from RM17.24bn. (Bursa Malaysia/The Sun/The Edge) Scomi Engineering Bhd will be delisted from Bursa Malaysia from 9.00a.m., Wednesday, 28 February 2018 after the completion of its merger with parent company Scomi Group Bhd. (Bursa Malaysia/The Sun) Reach Energy Bhd, whose losses have been narrowing by the quarter thanks to recent cost rationalisation efforts, is confident that it would return to profitability for FY18. (The Edge) Despite a fire incident that burnt down its main manufacturing plant in Klang, Notion VTec Bhd remains optimistic that it will achieve about 20% growth on revenue for 2018 and 2019, driven by its automotive segment. (The Edge) VSolar Group Bhd's plan to develop a 30 megawatts solar energy plant with Universiti Teknologi Malaysia has been aborted. No reason was given for the termination. (Bursa Malaysia/The Sun) Kuantan Flour Mills Bhd, a Practice Note 17 company, has entered into MoU with MCM Petcare Sdn. Bhd. for a proposed business collaboration to facilitate its expansion into trading and retailing of pet food products. (Bursa Malaysia/The Sun) Page 3 of 8
6. 26-Feb-18 WTK Holdings Bhd said the winding up of its wholly-owned unit Alanya Marine Ventures Sdn . Bhd. (AMV) will result in a loss of approximately RM51mn as the figure was arrived at after taking into account an impairment loss of approximately RM136mn as well as a gain on deconsolidation of AMV of RM85mn. (Bursa Malaysia/The Edge) Tadmax Resources Bhd expects to be on a better footing this year with the bulk of the group’s short-term financial commitments largely resolved. The group is banking on its property segment to return to the black in FY18. (The Edge) A shortage of foreign workers is putting a drag on particleboard maker HeveaBoard Bhd’s earnings, and no end is in sight, according to its Managing Director Yoong Hau Chun. (The Edge) Lafarge Malaysia Bhd recorded net losses of RM80.12mn for 4QFY17, compared to a net profit of RM33.94mn a year ago, due to higher costs amid weaker demand for its cement products. Quarterly revenue shrank 9.4% YoY to RM576.36mn compared with RM636.37mn. For FY17, the group made a net loss of RM215.16mn compared to a net profit of RM76.67mn a year ago. Revenue, meanwhile, fell 11.9% YoY to RM2.25bn from RM2.55bn. (Bursa Malaysia/The Edge) Ann Joo Resources Bhd saw its net profit rise 20.9% YoY to RM55.52mn in 4QFY17 from RM45.94mn on improved margin. Quarterly revenue also increased 29.2% YoY to RM610.15mn in 4QFY17 from RM472.14mn, mainly contributed by higher selling prices, in line with the up-trend of international steel prices. For FY17, its net profit jumped 23.1% YoY to RM205.38mn from RM166.78mn, while revenue grew 17.4% YoY to RM2.2bn from RM1.87bn in FY16. The group also declared an interim dividend of 13sen/share. (Bursa Malaysia/The Edge) Cahya Mata Sarawak Bhd's net profit fell 35.2% YoY to RM65.8mn in 4QFY17 from RM101.51mn a year ago, mainly due to the higher production cost of cement, provision for soil erosion remedial works and the lower share of results of joint ventures. Quarterly revenue, however, grew 30.8% YoY to RM588.19mn from RM449.54mn. For FY17, the group posted a 27.2% YoY increase in net profit to RM215.24mn from RM169.18mn while revenue grew 3.6% YoY to RM1.61bn from RM1.55bn in FY16. The group declared the first and final dividend of 8sen/share. (Bursa Malaysia/The Edge) IOI Corp Bhd's net profit in 2QFY18 skyrocketed over 37 times to RM595.9mn from RM15.6mn previously, thanks to fair value gain on derivative financial instruments and foreign exchange gains on foreign currency-denominated borrowings. Quarterly revenue fell 4.26% YoY to RM2.4bn from RM2.51bn. For 1HFY18, the group's net profit jumped more than 7 times to RM955.9mn from RM120.4mn, despite revenue falling 4.78% YoY to RM4.61bn from RM4.84bn. The group declared an interim dividend of 4.5sen/ share. (Bursa Malaysia/The Edge) YTL Corp Bhd’s net profit fell 14% YoY to RM126.09mn for 2QFY18 from RM147.69mn despite revenue for the quarter increased 7% YoY to RM3.89bn from RM3.62bn. The decline in performance was due to lower profit contribution from the construction, cement manufacturing, hotels and utilities segments. For 1HFY18, net profit fell 10% YoY to RM268.99mn from RM298.02mn, while revenue climbed 10% YoY to RM7.83bn from RM7.11bn. (Bursa Malaysia/The Edge) Page 4 of 8
7. 26-Feb-18 IOI Properties Group Bhd 's net profit plunged 60% YoY to RM109.14mn in 2QFY18 from RM273.53mn a year ago, due to lower contribution from overseas projects in the property development segment and share of impairment loss in joint venture. Quarterly revenue also fell 40.8% YoY to RM707.44mn from RM1.19bn. For 1HFY18, the group's net profit fell 24% YoY to RM351.99mn from RM463.1mn a year ago, while revenue dropped 24.7% YoY to RM1.58bn from RM2.09bn. (Bursa Malaysia/The Edge) Sarawak Plantation Bhd fell into the red with a net loss of RM38.29mn for 4QFY17 due to impairment losses, driving the group into its first annual net loss, as compared net profit of RM6.58mn a year ago. Meanwhile, revenue fell 10% YoY to RM100.12mn from RM110.95mn. For FY17, the group posted net loss of RM10.25mn, versus a net profit of RM22.21mn in FY16, despite a 4% YoY increase in revenue to RM399.18mn, from RM383.97mn. (Bursa Malaysia/The Edge) Mega First Corp Bhd's net profit fell 37.8% YoY to RM21.5mn in 4QFY17 from RM34.59mn a year ago, dampened by RM2.9mn foreign exchange loss resulting from the group’s US dollar cash holdings on a strengthening ringgit. Quarterly revenue, however, rose 26.9% YoY to RM236.36mn from RM186.3mn. For FY17, net profit grew 14.6% YoY to RM138.34mn from RM120.74mn, while revenue increased 51.6% YoY to RM910.86mn from RM600.74mn in FY16. The group also proposed a final dividend of 2sen/share. (Bursa Malaysia/The Edge) Dayang Enterprise Holdings Bhd slipped back into the red with a record quarterly net loss of RM54.25mn for 4QFY17, compared to a net profit of RM46.71mn, as its profit margin declined on lower charter rates. Quarterly revenue fell 12.8% YoY to RM173.76mn from RM199.2mn a year ago due to lower work orders received and performed. For FY17, the group sank into net loss of RM143.93mn compared with a net profit of RM54.54mn. Revenue was down by 2% YoY to RM695.5mn from RM708.2mn as work orders received and performed were lower in value. (Bursa Malaysia/The Edge) Encorp Bhd announced the resignation of its group chief executive officer Datuk Zakaria Nordin, following the expiry of his contract. Meanwhile, the group reported a net loss of RM28.22mn for 4QFY17, compared with a net profit of RM16.64mn a year ago, mainly due to lower on-going projects, reduced sales of properties from the current project and no improvement to the number of tenancies for its Encorp Strand Mall in Petaling Jaya, Selangor. Quarterly revenue fell 26.5% YoY to RM106.34mn from RM144.77mn a year earlier. For FY17, the group posted a net loss of RM30.42mn compared with a net profit of RM28.41mn while revenue declined 12.9% YoY to RM312.94mn from RM359.25mn. (Bursa Malaysia/The Edge) Page 5 of 8
8. 26-Feb-18 N e w s I n B r i e f Economy Asia China Cuts Banking Red Tape to Rally Foreign Investment China 's banking regulator has introduced steps to cut the red tape for foreign banks, state media agency Xinhua said on Saturday, as part of the government's ongoing effort to promote investment in the country's fast-growing financial sector. The China Banking Regulatory Commission (CBRC) has revised its rules for foreign banks, scrapping approval procedures in four areas including overseas wealth management products and portfolio investment funds, the report said. The new policies became effective on Feb. 13, it said. The changes mean foreign banks will now only need to report their services to authorities rather than obtaining approval in advance, while steps have been simplified for setting up new branches, appointing executives and issuing bonds. In November, Vice Finance Minister Zhu Guangyao said the country would raise the foreign ownership limit in some joint-venture firms in the futures, securities and fund markets to 51% from the current 49%. (The Star) Singapore consumer prices stay flat in January Singapore reported no consumer inflation in January, for the first time since late 2016, due to lower accommodation and private road transportation costs, data showed on Friday. The city-state's all-items consumer price index did not rise in January from a year earlier. Economists polled by Reuters had expected it would increase 0.4%, the same pace as in December. Accommodation costs in January fell 5.3% from the year earlier, after declining 3.8% in December. Singapore's core inflation gauge in January, however, rose 1.4% from a year earlier, as expected by the Reuters poll. In December, it rose 1.3%. The central bank's core inflation measure excludes changes in the price of cars and accommodation, which are influenced more by government policies. (Reuters) Japan Overall Nationwide Inflation Advances 1.4% In January Overall nationwide consumer prices in Japan climbed 1.4% on year in January, the Ministry of Internal Affairs and Communications said on Friday. That exceeded forecasts for 1.3% and was up from 1.0% in December. Core CPI, which excludes food prices, advanced an annual 0.9% - above expectations for 0.8% and unchanged from the previous month. Among the individual components, prices were higher annually for fuel, medical care, food, transportation and education, while they were down for furniture and housing. On a monthly basis, overall inflation added 0.4% and core CPI gained 0.2%. Among the individual components, prices were higher monthly for food, fuel and furniture, while they were down for clothing, recreation and medical care. (RTT) Japan Producer Prices Advance 0.7% On Year In January Producer prices in Japan were up 0.7% on year in January, the Bank of Japan said on Friday. That was shy of expectations for a gain of 0.8%, which would have been unchanged from the previous month. On a monthly basis, producer prices were down 0.6% after adding 0.2% in December. Prices were down for leasing, transportation and financial services, while they were higher for advertising services. (RTT) United States Global Trade Flows Rise at Quickest Rate Since 2011 International trade flows rebounded in 2017 to grow at their fastest pace since 2011, but economists see little prospect of a sustained return to the rapid rates of increase that were common before the global financial crisis. The CPB Netherlands Bureau for Economic Policy Analysis said on Friday that the volume of exports and imports of goods was 4.5% higher than in 2016, marking a pickup from the 1.5% rate of expansion in the preceding year, which was the lowest since the global financial crisis. The rise in trade flows reflects a Page 6 of 8
9. 26-Feb-18 broader rebound in economic activity around the world during 2017 , which economists expect to be sustained in 2018. A revival in Euro-zone demand and investment spending were particularly favorable, economists said. The World Trade Organization this month said new data suggests trade flows will grow by more than the 3.2% it had forecast for this year. Economists believe that high rates of trade growth are good for the global economy, since they reflect a more efficient distribution of production around the world and facilitate more intense competition. The weakness of trade flows over recent years had led some economists to worry that the financial crisis had done lasting damage to one of the drivers of global economic growth over recent decades. The 2017 pickup will ease some of those concerns. (The Wall Street Journal) Fed Says U.S. Labor Market Near or Beyond Full Employment The U.S. labor market is near or beyond full employment, while some pockets of finance are showing signs of rising leverage and high valuations, according to a Federal Reserve report. “The labor market in early 2018 appears to be near or a little beyond full employment,” the Fed said in the February 2018 Monetary Policy Report published in Washington on Friday. “The unemployment rate is now somewhat below most estimates of its natural rate.” The 55-page report, released days before Chairman Jerome Powell delivers his first semiannual testimony before House and Senate committees, reprised recent economic data and the Fed’s policy actions. Powell will preside over his first meeting of the Federal Open Market Committee as chairman on March 20-21. The report also included a number of sidebars on separate topics, including inflation, financial stability and monetary policy rules. Meanwhile, overall financial vulnerabilities “remain moderate on balance,” according to the report. “Valuation pressures continue to be elevated across a range of asset classes.” There are signs that “nonbank financial leverage has been increasing in some areas,” the report said, such as credit to stock investors such as hedge funds. (Bloomberg) Europe and Uni ted Kingdom Germany's Q4 GDP Expands On Exports Germany's economy expanded at a solid pace, as initially estimated, in the fourth quarter largely driven by foreign demand, detailed data from Destatis showed Friday. Another official data showed that the largest euro area economy logged its biggest budget surplus in 2017 since the reunification in 1990. Gross domestic product climbed 0.6% sequentially, but slightly slower than the 0.7% expansion seen in the third quarter. The rate came in line with the estimate published on February 14. On a yearly basis, the calendar-adjusted GDP advanced at a faster pace of 2.9% annually, after rising 2.7%. Similarly, price-adjusted GDP grew 2.3% versus 2.2% a quarter ago. Both annual growth rates matched flash estimate. (RTT) Eurozone Inflation Slows As Estimated In January Eurozone inflation eased as estimated in January, final data from Eurostat showed Friday. Inflation slowed slightly to 1.3% in January from 1.4% in December. The rate came in line with the estimate released on January 31. A similar slower increase in prices was last seen in July 2017. The inflation figure continues to stay below the European Central Bank's target of 'below, but close to 2.0%. On a monthly basis, the harmonized index of consumer prices dropped 0.9% in January. Excluding energy, food, alcohol and tobacco, core inflation rose marginally to 1% from 0.9% in December. The core rate also matched flash estimate. (RTT) Page 7 of 8
10. 26-Feb-18 Share Buy-Back : 23 February 2018 Company E&O GLOMAC KPJ MALAKOF SCGM UNIMECH YILAI Bought Back Price (RM) Hi/Lo (RM) 30,000 5,000 100,000 500,000 12,500 2,000 157,800 1.45 0.54/0.535 0.95/0.935 0.935/0.93 2.33/2.30 1.02 0.75 1.45/1.44 0.54/0.535 0.95/0.935 0.94/0.92 2.36/2.30 1.04/1.02 0.76/0.75 Total Treasury Shares 25,363,747 5,655,400 65,670,600 17,118,100 797,600 6,839,710 8,957,008 Source: Bursa Malaysia TA RESEARCH – Remisiers’ Briefing Topic: Weekly Market Outlook Speaker: Mr.Kaladher / Mr.Stephen Soo Venue: Auditorium, 10th Floor Menara TA One Date: 26 February 2018 (Today) Time: 12.40pm Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 8 of 8
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) PER (X) Div Yield (%) FY18 FY19 FY18 FY19 FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD 23-Feb-18 AUTOMOBILE BAUTO 2.15 2.50 16.3% Buy 2,492 0.48 14.3 19.9 15.1 10.8 5.3 5.6 2.47 -13.0 1.84 16.8 MBMR 2.27 2.47 8.8% Hold 887 0.70 24.7 26.9 9.2 8.5 2.6 3.1 2.60 -12.7 2.01 12.9 -2.3 3.2 PECCA 1.38 1.86 34.8% Buy 255 0.45 11.1 12.5 12.4 11.0 4.0 4.4 1.70 -18.8 1.26 9.5 -11.0 SIME 2.80 2.13 -23.9% Sell 19,042 1.55 13.2 16.4 21.2 17.1 1.2 1.5 3.06 -8.5 2.03 38.2 26.7 UMW 6.61 4.37 -33.9% Sell 7,722 1.28 20.7 36.9 32.0 17.9 1.5 2.7 6.98 -5.3 4.70 40.6 27.1 BANKS & FINANCIAL SERVICES ABMB 4.11 4.60 11.9% Hold 6,363 1.28 30.6 35.6 13.4 11.5 3.9 3.9 4.49 -8.5 3.62 13.5 0.7 AFFIN 2.53 2.70 6.7% Hold 4,916 0.93 24.2 28.1 10.4 9.0 3.2 3.2 2.98 -15.0 2.22 13.9 9.5 AMBANK 4.51 5.50 22.0% Buy 13,594 1.38 48.6 52.0 9.3 8.7 4.0 4.0 5.70 -20.9 4.06 11.1 2.3 CIMB 7.19 7.50 4.3% Hold 66,332 1.68 50.8 56.0 14.1 12.8 4.1 3.9 7.36 -2.3 4.91 46.4 9.9 HLBANK 18.22 19.30 5.9% Hold 37,271 0.83 114.2 120.9 16.0 15.1 2.5 2.5 18.80 -3.1 13.28 37.2 7.2 MAYBANK 10.26 10.50 2.3% Hold 111,133 1.01 70.6 77.4 14.5 13.3 4.9 4.9 10.30 -0.4 8.59 19.4 4.7 PBBANK 22.80 27.30 19.7% Buy 88,042 0.73 153.3 166.5 14.9 13.7 2.8 2.9 22.90 -0.4 19.66 16.0 9.7 RHBBANK 5.44 5.70 4.8% Hold 21,815 1.58 52.2 53.8 10.4 10.1 2.8 2.8 5.61 -3.0 4.71 15.5 8.8 BURSA 11.00 11.80 7.3% Buy 5,913 0.92 43.9 45.0 25.1 24.4 3.3 3.3 11.30 -2.7 8.57 28.3 8.7 Note: BURSA proposed bonus issue of shares on the basis of 1 for 2. Ex-Target price RM7.04 BUILDING MATERIALS ANNJOO 3.70 4.34 17.3% Buy 1,913 1.29 43.8 46.7 8.4 7.9 5.9 6.7 3.98 -7.0 2.27 63.0 -4.1 CHINHIN 1.00 1.36 36.0% Buy 556 1.01 12.4 12.0 8.0 8.3 5.0 6.0 1.49 -32.9 1.00 0.5 -17.4 ENGTEX 1.10 1.38 25.5% Buy 468 0.84 14.2 16.1 7.8 6.8 3.8 5.0 1.52 -27.6 1.01 8.9 0.0 GADANG 1.07 1.69 57.9% Buy 706 1.10 14.2 18.1 7.5 5.9 2.8 2.8 1.37 -21.9 1.01 5.9 -3.6 GAMUDA 5.06 6.00 18.6% Buy 12,433 0.90 34.5 35.7 14.7 14.2 2.4 2.4 5.52 -8.3 4.58 10.5 2.0 IJM 2.93 2.89 -1.4% Sell 10,631 1.13 13.7 18.2 21.4 16.1 3.2 3.2 3.61 -18.8 2.66 10.2 -3.9 CONSTRUCTION KAB 0.29 0.38 31.6% Buy 9 na 31.4 37.3 0.9 0.8 3.5 4.2 0.33 -13.6 0.25 16.3 -5.0 PESONA 0.41 0.55 35.8% Buy 281 1.08 5.8 4.8 7.0 8.5 3.7 3.7 0.74 -44.9 0.39 5.2 -10.0 SENDAI 0.81 0.55 -31.7% Sell 629 1.17 9.1 8.5 8.9 9.5 1.2 1.2 1.39 -42.1 0.51 59.4 -6.9 SUNCON 2.40 2.65 10.4% Buy 3,101 0.56 14.7 16.4 16.3 14.6 2.3 2.5 2.64 -9.1 1.70 41.2 -4.4 WCT 1.62 1.64 1.2% Hold 2,279 0.90 12.6 11.2 12.8 14.5 1.9 1.9 2.48 -34.5 1.46 11.0 0.0 LITRAK 5.85 6.26 7.0% Hold 3,088 0.35 45.6 47.1 12.8 12.4 4.3 4.3 6.15 -4.9 5.40 8.3 5.4 CARLSBG 18.08 18.09 0.1% Buy 5,562 0.84 87.8 91.8 20.6 19.7 4.8 5.1 18.08 0.0 14.12 28.0 18.2 HEIM 21.20 21.64 2.1% Hold 6,404 0.41 93.0 101.3 22.8 20.9 3.9 4.3 21.52 -1.5 16.98 24.9 12.2 AEON 1.54 1.97 27.9% Sell 2,162 0.42 6.7 7.7 23.0 20.0 2.6 2.9 2.57 -40.1 1.53 0.7 -12.5 AMWAY 7.51 8.18 8.9% Buy 1,235 0.47 43.9 45.2 17.1 16.6 5.1 5.3 8.18 -8.2 7.04 6.7 1.8 F&N 30.50 33.74 10.6% Buy 11,180 0.22 122.7 145.8 24.9 20.9 2.6 3.1 31.00 -1.6 22.80 33.8 13.0 CONSUMER Brewery Retail HUPSENG 1.10 1.25 13.6% Buy 880 0.41 5.7 5.9 19.3 18.6 5.5 5.5 1.28 -14.1 1.05 4.8 0.9 JOHOTIN 1.25 1.75 40.0% Buy 388 0.72 12.8 13.5 9.8 9.3 4.0 4.3 1.76 -29.0 1.16 7.8 3.3 NESTLE 123.00 129.90 5.6% Hold 28,844 0.52 322.2 360.2 38.2 34.2 2.4 2.6 123.30 -0.2 75.40 63.1 19.2 PADINI 5.15 4.67 -9.3% Sell 3,388 0.75 28.0 30.4 18.4 16.9 2.4 2.5 5.50 -6.4 2.77 86.0 -2.5 POHUAT 1.57 2.01 28.0% Buy 345 0.51 22.9 25.4 6.8 6.2 5.1 5.1 2.07 -24.1 1.43 9.8 -12.3 QL 4.94 3.26 -34.0% Sell 8,015 0.55 12.8 14.7 38.5 33.5 0.9 1.0 4.98 -0.8 3.26 51.7 13.6 SIGN 0.60 0.92 53.3% Buy 137 0.76 6.9 9.2 8.6 6.5 4.2 5.8 1.07 -43.9 0.57 5.3 -14.9 30.50 34.72 13.8% Hold 8,709 1.37 170.8 168.8 17.9 18.1 5.2 5.2 49.40 -38.3 29.30 4.1 -23.8 GENTING 9.10 11.53 26.7% Buy 34,866 1.50 54.4 59.8 16.7 15.2 1.8 1.8 10.00 -9.0 8.70 4.6 -1.1 GENM 5.28 6.51 23.3% Buy 29,879 1.45 27.0 30.6 19.5 17.2 1.7 1.9 6.38 -17.2 4.87 8.4 -6.2 2.26 3.34 47.8% Buy 3,044 0.68 21.5 26.0 10.5 8.7 7.1 8.0 2.98 -24.2 2.20 2.7 0.9 CCMDBIO 2.91 2.70 -7.2% Buy 812 0.87 15.0 16.1 19.4 18.1 3.4 3.6 3.03 -4.0 1.97 47.7 15.0 IHH 6.06 6.40 5.6% Buy 49,932 0.76 11.9 15.0 51.0 40.5 0.5 0.6 6.33 -4.3 5.42 11.8 3.4 KPJ 0.94 1.12 19.8% Buy 3,942 0.53 3.7 4.2 25.0 22.4 2.2 2.5 1.14 -18.0 0.87 7.5 -3.6 HARTA 11.70 7.80 -33.3% Sell 19,369 1.13 25.2 28.9 46.4 40.5 1.3 1.5 12.18 -3.9 4.68 150.0 9.6 KOSSAN 8.70 9.73 11.8% Buy 5,563 0.51 37.4 42.1 23.2 20.7 2.1 2.4 8.79 -1.0 5.62 54.8 7.3 SUPERMX 2.68 2.70 0.7% Buy 1,757 0.55 20.0 22.6 13.4 11.9 2.5 2.9 2.70 -0.7 1.69 58.6 34.0 TOPGLOV 9.92 9.35 -5.7% Sell 12,460 0.60 41.6 50.8 23.9 19.5 1.4 1.7 10.00 -0.8 4.56 117.5 24.2 KAREX 1.12 1.00 -10.7% Sell 1,123 0.70 2.8 5.2 40.5 21.5 0.6 1.2 2.31 -51.5 1.03 8.7 -13.8 SCIENTX 8.67 10.01 15.5% Buy 4,239 0.87 67.5 79.4 12.9 10.9 2.4 3.0 9.85 -12.0 7.20 20.4 0.1 SKPRES 1.87 2.20 17.6% Buy 2,338 0.82 10.4 14.8 18.0 12.6 2.8 3.9 2.35 -20.4 1.24 50.8 -18.0 ASTRO 2.51 3.10 23.5% Buy 13,087 0.87 14.0 13.7 18.0 18.3 5.2 5.4 2.94 -14.6 2.40 4.6 -5.3 MEDIA PRIMA 0.55 0.45 -18.2% Sell 610 1.26 -3.8 -1.7 na na 0.0 0.0 1.28 -57.0 0.53 4.8 -27.6 STAR 1.34 1.25 -6.7% Sell 989 1.06 6.7 6.7 19.9 19.9 9.0 9.0 2.22 -39.6 1.31 2.3 -18.8 Tobacco BAT GAMING Casino NFO BJTOTO HEALTHCARE Hospitals/ Pharmaceutical Rubber Gloves INDUSTRIAL MEDIA
12. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) % upside Recom Market Cap. (RMm) BETA EPS (sen) FY18 PER (X) Div Yield (%) FY19 FY18 FY19 FY18 FY19 52weeks 52weeks % Chg High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.48 0.72 51.6% Buy 834 1.47 4.2 4.5 11.3 10.5 2.1 2.1 0.69 -31.2 0.38 26.7 -2.1 LCTITAN 5.23 6.10 16.6% Buy 11,888 na 56.3 60.9 9.3 8.6 4.8 5.2 6.53 -19.9 4.14 26.3 11.3 MHB 0.83 0.81 -1.8% Sell 1,320 1.33 0.5 1.7 171.4 49.4 0.0 0.0 1.16 -28.9 0.63 32.0 0.0 MISC 7.02 7.00 -0.3% Sell 31,336 1.13 50.1 53.8 14.0 13.1 4.3 4.3 7.90 -11.1 6.89 1.9 -5.4 PANTECH 0.62 0.69 12.2% Buy 458 1.24 6.1 6.8 10.1 9.0 4.5 5.0 0.74 -16.9 0.47 32.3 -4.7 PCHEM 8.11 8.84 9.0% Hold 64,880 0.88 52.5 53.8 15.4 15.1 3.2 3.2 8.28 -2.1 6.80 19.3 5.3 SAPNRG 0.71 1.25 77.3% Buy 4,224 2.02 -6.5 -5.0 na na 0.0 0.0 2.10 -66.4 0.66 6.8 -0.7 SERBADK 3.44 4.16 20.9% Buy 5,052 na 27.7 32.7 12.4 10.5 2.3 2.9 3.66 -6.0 1.63 111.0 6.2 UMWOG 0.33 0.51 54.5% Buy 2,711 1.76 0.4 1.2 81.7 26.6 0.0 0.0 0.68 -51.7 0.27 22.2 8.2 UZMA 1.43 1.56 9.1% Sell 458 0.93 13.1 14.2 10.9 10.1 0.0 0.0 1.98 -27.8 1.26 13.5 11.7 FGV 1.99 1.98 -0.5% Sell 7,260 1.53 3.5 4.4 57.7 45.6 2.5 2.5 2.18 -8.7 1.51 31.8 17.8 IJMPLNT 2.30 2.69 17.0% Sell 2,025 0.20 9.1 12.5 25.2 18.3 3.5 3.9 3.38 -32.0 2.28 0.9 -16.1 IOICORP 4.79 5.08 6.1% Sell 30,100 0.90 20.9 21.6 22.9 22.2 6.1 3.6 4.81 -0.4 4.31 11.1 5.5 KFIMA 1.53 1.89 23.5% Buy 432 0.70 14.1 14.7 10.8 10.4 5.9 5.9 1.96 -21.9 1.45 5.5 -2.5 KLK 25.50 27.07 6.2% Hold 27,157 0.62 120.7 125.7 21.1 20.3 2.4 2.4 25.78 -1.1 23.66 7.8 2.0 SIMEPLT 5.52 6.25 13.2% Buy 37,541 na 21.0 22.1 26.2 25.0 2.5 2.7 6.00 -8.0 4.58 20.5 -8.0 TSH 1.59 2.10 32.1% Buy 2,195 0.54 9.3 9.6 17.1 16.6 1.5 1.5 1.90 -16.3 1.56 1.9 -3.6 UMCCA 6.29 6.73 7.0% Sell 1,319 0.39 22.7 34.8 27.7 18.1 2.7 2.9 7.08 -11.2 5.76 9.2 -3.4 GLOMAC 0.54 0.46 -14.0% Sell 425 0.70 3.0 4.4 18.1 12.1 3.7 3.7 0.67 -20.5 0.50 8.1 -3.5 HUAYANG 0.59 0.58 -1.7% Sell 208 0.91 0.7 3.4 90.3 17.4 0.8 0.8 1.16 -49.1 0.58 2.6 -3.3 IBRACO 0.77 0.92 19.5% Hold 382 na 9.1 12.4 8.4 6.2 5.2 6.5 0.98 -21.0 0.50 54.0 -5.5 IOIPG 1.98 2.00 1.0% Sell 10,902 0.84 16.3 15.6 12.1 12.7 3.0 3.0 2.22 -10.8 1.79 10.6 7.0 MAHSING 1.27 1.69 33.1% Buy 3,083 0.95 13.0 12.6 9.7 10.1 5.1 5.1 1.64 -22.6 1.21 5.0 -12.4 PLANTATIONS PROPERTY SIMEPROP 1.37 1.61 17.5% Sell 9,317 na 9.2 9.1 14.9 15.0 1.5 1.5 1.78 -23.0 1.04 31.7 -23.0 SNTORIA 0.62 0.76 22.6% Buy 349 0.15 8.3 8.6 7.5 7.2 1.6 1.6 0.91 -31.8 0.56 10.7 -10.8 SPB 4.80 5.28 10.0% Hold 1,649 0.66 21.2 26.1 22.7 18.4 2.5 2.5 5.50 -12.7 4.39 9.3 -2.0 SPSETIA 3.29 3.77 14.6% Buy 12,348 0.96 21.3 21.9 15.4 15.0 3.6 3.6 4.38 -24.9 3.07 7.2 -17.8 SUNWAY 1.63 1.74 6.7% Hold 7,980 0.90 11.9 12.6 13.7 12.9 3.1 3.7 1.96 -16.8 1.31 24.3 0.0 SUNREIT 1.71 1.87 9.4% Hold 5,036 0.84 10.0 10.7 17.0 16.0 5.9 6.2 1.90 -10.0 1.64 4.3 -10.0 CMMT 1.14 1.64 43.9% Buy 2,323 0.65 7.9 8.6 14.4 13.2 7.2 7.8 1.83 -37.7 1.09 4.6 -37.7 REIT POWER & UTILITIES MALAKOF 0.94 0.82 -12.3% Sell 4,654 0.89 6.6 7.2 14.2 13.0 7.5 7.5 1.30 -28.1 0.86 8.7 -4.6 PETDAG 25.54 22.08 -13.5% Sell 25,373 0.41 105.1 105.7 24.3 24.2 3.1 3.1 26.20 -2.5 21.00 21.6 5.3 PETGAS 17.68 19.10 8.0% Buy 34,984 0.87 98.8 99.5 17.9 17.8 3.9 4.0 20.62 -14.3 15.82 11.8 1.1 TENAGA 15.64 18.33 17.2% Buy 88,616 0.55 131.3 127.5 11.9 12.3 4.4 4.2 16.12 -3.0 13.44 16.4 2.5 YTLPOWR 1.20 1.16 -3.3% Sell 9,329 0.89 8.6 8.9 13.9 13.5 4.2 4.2 1.50 -20.0 1.11 8.1 -7.0 TELECOMMUNICATIONS AXIATA 5.65 6.50 15.0% Buy 51,123 1.53 15.9 19.5 35.5 29.0 1.4 2.8 5.82 -2.9 4.32 30.8 2.9 DIGI 4.90 5.15 5.1% Hold 38,098 0.94 19.7 20.4 24.9 24.1 4.0 4.2 5.19 -5.6 4.36 12.4 -3.9 MAXIS 6.01 6.05 0.7% Sell 46,941 1.07 25.2 25.0 23.9 24.0 3.2 3.2 6.60 -8.9 5.48 9.7 0.0 TM 6.00 7.20 20.0% Buy 22,548 0.62 23.2 24.9 25.9 24.1 3.5 3.7 6.69 -10.3 5.85 2.6 -4.8 ELSOFT 2.62 3.30 26.0% Buy 721 0.76 13.1 15.0 20.0 17.5 3.5 4.0 2.95 -11.2 1.58 65.6 -3.0 IRIS 0.19 0.25 35.1% Buy 457 2.36 0.6 0.7 33.4 27.7 0.0 0.0 0.25 -24.5 0.12 60.9 0.0 INARI 3.45 3.35 -2.9% Under Review 7,127 0.71 14.0 15.7 24.6 22.0 2.9 3.3 3.82 -9.7 1.88 83.9 1.5 TECHNOLOGY Semiconductor & Electronics Note: INARI proposed bonus issue shares on the basis of 1 for 2. For more detail please refer to 30.01.18 report. MPI 9.69 10.70 10.4% Hold 1,927 0.81 73.9 86.9 13.1 11.2 3.3 3.3 14.52 -33.3 8.62 12.4 -23.2 UNISEM 2.78 2.70 -2.9% Sell 2,040 1.15 17.1 18.4 16.2 15.1 4.3 4.3 4.25 -34.6 2.52 10.3 -23.8 TRANSPORTATION Airlines AIRASIA 4.43 3.83 -13.5% Buy 14,805 1.33 38.3 39.8 11.6 11.1 1.1 1.4 4.44 -0.2 2.58 71.7 32.2 AIRPORT 8.80 8.61 -2.2% Sell 14,601 1.31 17.9 18.7 49.3 47.1 1.5 1.1 9.45 -6.9 6.36 38.4 0.1 Freight & Tankers PTRANS 0.31 0.46 48.4% Buy 390 na 2.3 3.8 13.3 8.2 2.3 3.5 0.38 -18.8 0.16 100.6 10.7 TNLOGIS 1.15 1.80 56.5% Buy 525 1.09 13.6 14.0 8.4 8.2 4.3 4.3 1.83 -37.3 1.10 4.5 -14.2 WPRTS 3.70 4.06 9.7% Buy 12,617 0.49 15.6 20.0 23.7 18.5 1.0 1.3 4.19 -11.7 3.12 18.6 0.0 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) % upside Recom Market Cap. (S$m) Beta EPS (cent) FY18 FY19 PER (X) FY18 FY19 Div Yield (%) FY18 FY19 52week 52week % Chg High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 29.59 30.50 3.1% Buy 75,865 1.20 212.3 246.0 13.9 12.0 2.2 2.4 29.7 -0.4 18.47 60.2 OCBC 13.37 14.30 7.0% Buy 55,958 1.22 109.5 123.2 12.2 10.9 6.7 7.7 13.4 -0.1 9.42 41.9 19.1 7.9 UOB 28.07 27.80 -1.0% Hold 46,666 1.17 216.6 243.9 13.0 13.0 2.9 2.9 28.5 -1.4 21.30 31.8 6.1 PLANTATIONS WILMAR 3.13 3.31 5.8% Hold 20,027 0.82 29.9 31.8 10.5 9.8 2.6 2.9 3.9 -19.1 2.97 5.4 1.3 IFAR 0.36 0.53 47.2% Hold 516 0.98 5.2 5.7 6.9 6.3 3.5 3.9 0.5 -33.9 0.35 2.9 -7.7 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. Technical View Monday , February 26, 2018 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Weekly Technical Outlook FBM KLCI: 1,861.50 (+23.22, +1.26%) Chartist : Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my Bullish “Flag” Pattern on KLCI Positive for This Week After starting the week on a strong note following the extended weekend Lunar New Year holiday, the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) traded sideways with mild rotational plays on lower liners highlighting trade. While most investors were sidelined amid fears the US Fed meeting minutes signaled multiple interest rate increases, the rise extended on Friday, led by top consumer and banking stocks on firmer regional markets despite the overhanging worries over rising US inflation. For the week, the FBM KLCI climbed 23.22 points, or 1.26 percent to 1,861.5, with gains on Nestle (+RM3.60), Public Bank (+96sen), KLK (+59sen), HLFG (+44sen) and Petronas Dagangan (+42sen) accounting for most of the index’s rise. Average daily traded volume and value improved to 3.2 billion shares and RM2.81 billion last week, compared to the 1.61 billion shares and RM1.94 billion average respectively the previous week, as trading momentum recovered after the Chinese New Year festival break. Bursa Malaysia started the week on a strong note, lifted by selected blue chips heavyweights on resuming trade after the extended weekend Lunar New Year holiday and in tandem with the extended recovery at most regional markets after U.S. equities capped their best week in five years. The KLCI surged 19.04 points to settle at 1,857.32, off the high of 1,858.23 and low of 1,841.78, as gainers swarmed losers 824 to 193 on moderate turnover of 2.35bn shares worth RM1.88bn. The FBM KLCI paused for a breather the next day, as some mild profit-taking on selected blue-chip heavyweights halted its post-Chinese New Year ascend, in line with weaker regional markets following the softer finish on European markets as U.S equities took a break from President’s Day holiday. The KLCI fell 1.33 points to settle at 1,855.99, off the high of 1,861.10 and low of 1,852.96, as losers beat gainers 556 to 409 on slower turnover of 2.27bn shares worth RM2.10bn. While the local benchmark was shored up Wednesday by big-name consumer, banking and oil & gas heavyweights, the broader market stayed range bound, with mild rotational plays on lower liners highlighting trade. The KLCI gained 2.18 points to close at 1,858.17, after ranging between early low of 1,852.14 and high of 1,860.43, as gainers led losers 605 to 330 on moderate turnover of 2.28bn shares worth RM2.53bn. Blue chips eased on profit-taking the following day, mirroring weakness in key regional markets after overnight US stocks fell as investors fear the Fed meeting minutes may signal multiple interest rate increases. The KLCI dipped 3.1 points to end at 1,855.07, after trading between opening low of 1,854.03 and high of 1,860.01, as losers narrowly edged gainers 453 to 442 on total turnover of 2.34bn shares worth RM2.06bn. However, the benchmark extended gains on Friday, with top consumer and banking stocks leading the rise ahead of the weekend on firmer regional markets despite worries over rising US inflation. The index rose 6.43 points to close the week at 1,861.5, off an opening low of 1,853.66 and high of 1,864.95, as gainers led losers 560 to 430 on active turnover totaling 3.54bn shares worth RM2.67bn. Page 1 of 3
14. 26-Feb-18 Trading range for the blue-chip benchmark index was 23 .17 points, compared to the 17.84point range the previous week. For the week, the FBM-EMAS Index added 196.29 points or 1.5 percent to 13,313.78, while the FBM-Small Cap Index surged 527.57 points, or 3.2 percent to 17,028.34 as robust buying momentum in the small cap sector encouraged retail participation. After last Friday’s strong session, the daily slow stochastic momentum indicator for the FBM KLCI pushed back up again to approach the overbought zone (Chart 1), while the weekly indicator trigger line also turned back up into overbought territory. The 14-day Relative Strength Index (RSI) recovered to a bullish reading at 61.65, while the 14-week RSI rose to a more positive reading of 66.96. Chart 1 As for trend indicators, the daily Moving Average Convergence Divergence (MACD) signal line is set to trigger a buy on further strength, while the weekly MACD indicator turned upwards to improve on its uptrend trajectory (Chart 2). The +DI and –DI lines on the 14day Directional Movement Index (DMI) expanded positively from each other, but the ADX line turned lower, signaling lacking trending mode. Chart 2 Page 2 of 3
15. 26-Feb-18 Conclusion With technical indicators for the FBM KLCI and buying momentum improving following last week ’s recovery, which mirror a bullish “flag” pattern breakout on the daily chart after last Friday’s surge, the local market should attract more buyers this week as more market players return from the CNY holiday. Elsewhere, investors should pay close attention to new US Fed Chairman Jerome Powell as he speaks for the first time this week on the US central bank’s likely policy stance on inflation and accelerating economic growth. Immediate resistance for the index will be at 1,878, the upper Bollinger band, followed by the 2 Feb peak of 1,880, while the record high at 1,896 of July 2014 may act as formidable upside hurdle. Immediate uptrend supports will be at 1,842 and 1,838, the respective 10 and 30-day moving averages, while crucial resistance-turn-support level is at 1,796, the June 2017 peak matching the recent low. Stock-wise, while recent gains on construction related stocks CMSB and Wah Seong should stall as profit-taking and selling increase due to overbought momentum, oil & gas related stocks such as Bumi Armada, Dialog, Sapura Energy and UMW Oil & Gas should attract bargain hunters on keen rotational interest as global oil prices stay buoyant. Chart 3 Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Monday, February 26, 2018, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
16. RESULTS UPDATE Monday , February 26, 2018 FBMKLCI: 1,861.50 Sector: Building Materials THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Ann Joo Resources Berhad TP: RM4.34 (+17.3%) Last Traded: RM3.70 Looking Forward a Better Year Ahead Chan Mun Chun Tel: +603-2167 1264 BUY mcchan@ta.com.my Results Review Excluding forex gain of RM11.5mn, ANNJOO’s FY17 core profit of RM193.9mn came in below both ours and consensus’ expectations. Accounting for 91.7% and 94.5% of ours and consensus’ full-year forecast respectively, the variance was mainly due to time lag effect of higher raw material cost and unexpected overhead cost for scheduled maintenance and upgrading of de-dusting system. YoY, FY17 core profit increased 17.9% to RM193.9mn backed by 17.4% jump in the revenue to RM2,195.2mn. The higher revenue and profitability were mainly attributed to higher selling prices of steel products, which resulted in a slight margin improvement despite higher raw material cost. QoQ, 4Q17’s core profit was 9.1% higher at RM49.9mn, thanks to higher revenue and lower tax expense as a result of tax incentive claimed for export sales. The revenue increased by 2.5% to RM610.1mn due to b domestic selling prices and moderate improvement in sales volume, backed by the gradual pick-up of demand from domestic infrastructure projects. An interim dividend of 13sen/share was declared, bringing YTD dividend to 19sen/share (FY16: 15sen/share) The group’s net gearing position eased slightly to 0.64x from 0.65x a quarter ago. www.taonline.com.my Share Information Bloomberg Code AJR MK Bursa ANNJOO Stock Code 6556 Listing Main Market 573.2 Share Cap (mn) 1999.3 Market Cap (RMmn) 3.98/2.27 52-wk Hi/Lo (RM) 1107.5 12-mth Avg Daily Vol ('000 shrs) 30.1 Estimated Free Float (%) 1.29 Beta Major Shareholders (%) AnnJoo Corp Sdn Bhd - 35.49 Lim Seng Chee & Sons Sdn- 13.42 LSQ & Sons Sdn Bhd - 11.13 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 (2.8) (4.6) 226.0 240.9 234.2 261.4 96.5 92.1 Buy (Maintained) Financial Indicators FY18 51.8 (1.8) (210.5) 9.2 2.6 1.4 FY19 41.0 (1.3) (274.5) 9.7 2.8 1.3 vs. TA vs. Consensus % of FY17 91.7 94.5 Below Below Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth ANNJOO 6.0 (4.6) 10.1 41.2 FBM KLCI 0.4 8.4 5.2 9.6 Net Debt / Equity (%) CFPS (sen) Price / CFPS (x) ROA (%) NTA/Share (RM) Price/NTA (x) Scorecard Briefing Highlights: China still continues with its supply side reform by imposing stringent capacity replacement requirements. Currently, China is encouraging the domestic steel mills to shift to Electric Arc Furnace for environmental reason. In our view, this may further push up the electrode price. The potential implementation of measures under Section 232 by US Government on steel imports may impact the global steel market. The final decision is expected to be made on 11 April 2018. Management does not expect any direct impact to the group as they do not export to US market. (12-Mth) Share Price relative to the FBMKLCI The management is planning to change its sales mix to focus on finished products especially on the steel bar in order to cater for the gradual increasing demand from domestic infrastructure projects. Besides, management is looking to push up the trading division especially on the non-construction steels. The group has some plans to upgrade its rolling mills in order to increase the plant’s efficiency and productivity. However, the expected timeline has yet to be finalized. Source: Bloomberg Page 1 of 4
17. 26-Feb-18 Impact We trim our earnings forecast by 2 .8% and 4.6% for FY18 and FY19 respectively after factoring in rising raw material cost especially on the coal, scrap, and electrode. We also introduce FY20 earnings forecast of RM221.1mn, representing an 8.2% decline from FY19, after taking into account of potential negative impact arising from expiry of safeguard duties on imported steel bars and wire rod in April 2020. Outlook We expect the group’s earnings growth to be driven by domestic demand instead of export sales, as various local infrastructure projects accelerate in 2018. The local steel price is expected to be well supported by the healthy demand from domestic infrastructure projects and the safeguard duties measure imposed in Malaysia. However, higher-than-expected rise in raw material costs could hurt the group’s profitability. Valuation Subsequent to the revision in earnings forecasts, we lower the target price slightly from RM4.40 to RM4.34, based on 10x CY18 earnings. Maintain BUY call on the stock. Exhibit 1: Steel Bar Price Source: MITI, Bloomberg, TA Securities Exhibit 2: Billet Price Source: MITI, Bloomberg, TA Securities Page 2 of 4
18. 26-Feb-18 Exhibit 3 : Price of Raw Material Source: Company, MITI, Bloomberg, TA Securities Table 1: Earnings Summary (RMmn) FYE Dec (RMmn) Revenue Gross profit EBITDA EBITDA margin EBIT PBT Core PBT PAT Core net profit Core EPS PER Gross dividend Dividend yield ROE (%) (sen) (x) (sen) (%) (%) 2016 2017 2018F 2019F 2020F 1,870.1 364.7 286.2 15.3 243.4 202.1 207.4 166.8 172.0 34.4 10.8 15.0 4.1 17.2 2,195.2 270.2 329.7 15.0 288.4 252.9 241.4 205.4 193.9 38.3 9.7 19.0 5.1 16.9 2,414.4 446.8 365.1 15.1 321.5 293.6 293.6 226.0 226.0 43.4 8.5 21.7 5.9 17.4 2,544.2 471.3 380.9 15.0 337.2 312.8 312.8 240.9 240.9 45.0 8.2 24.8 6.7 16.8 2,500.2 442.7 352.4 14.1 309.9 287.2 287.2 221.1 221.1 40.3 9.2 22.2 6.0 14.0 Table 2: 4QFY17 Results Analysis (RMmn) FYE Dec (RMmn) 4Q16 Revenue 472.1 Operating expenses (394.5) (8.4) Other income/ (expenses) Finance Costs (9.6) PBT 59.6 Core PBT 70.0 Income tax expense (13.7) Net profit 45.9 Core profit 56.3 Reported EPS (sen) Core EPS (sen) Dividend (sen) Margin (%): - Core PBT - Core PAT - Effective tax rate 9.2 11.2 9.0 14.8 11.9 22.9 3Q17 595.1 (528.5) 2.5 (9.8) 59.3 57.9 (12.1) 47.2 45.8 9.3 9.0 0.0 9.7 7.7 20.4 4Q17 QoQ (%) 610.1 2.5 (552.4) 4.5 11.1 345.0 (8.6) (12.3) 60.3 1.6 54.7 (5.5) (4.8) (60.6) 55.5 17.5 49.9 9.1 10.8 9.7 13.0 9.0 8.2 7.9 YoY (%) FY16 FY17 YoY (%) 29.2 1870.1 2195.2 17.4 40.0 (1623.8) (1925.1) 18.6 (231.5) (0.6) 21.5 <(100.0) (10.7) (43.5) (38.8) (10.8) 1.1 202.1 252.9 25.1 (21.8) 199.8 241.4 20.8 (65.1) (35.4) (47.5) 34.3 20.9 166.8 205.4 23.1 (11.3) 164.4 193.9 17.9 16.7 8.3 na 17.9 (13.5) 44 % pts (0.8) 0.5 (12.5) % pts (5.9) (3.7) (15.0) 33.3 32.9 15.0 10.7 8.8 17.5 40.5 38.3 19.0 11.0 8.8 18.8 21.7 16.5 26.7 % pts 0.3 0.0 1.3 Page 3 of 4
19. 26-Feb-18 (TH I S P A GE IS IN TE N TI ON AL L Y L E F T B L AN K ) Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Monday, February 26, 2018, the analyst, Chan Mun Chun, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 4 of 4
20. SECTOR UPDATE Monday , February 26, 2018 FBMKLCI: 1,861.50 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Underweight Automotive Sector (Maintained) A Slow Start Abel Goon Tel: +603-2072 1277 ext. 1641 abelgoon@ta.com.my www.taonline.com.my Aggressive Marketing Boosts TIV Total Industry Volume (TIV) in January came in within expectations at 44.6k units (MoM: 18.6%, YoY: -0.2%). The MoM drop is in-line with the historical trend as aggressive buying is observed in the month of December followed by a cooling-off period in January. We expect TIV in February to fall further given the shorter working month. Note that TIV normally troughs in the month of February as most dealerships close in conjunction with Chinese New Year festivities. TIV of 44.6k units (-0.2%) accounts for 7.6% of ours and MAA’s fullyear forecast. Nationals Thrashed Non-nationals National marques posted big market share gains for January TIV (+4.7 ppt) compared to December TIV. Although total national marque sales volume declined (MoM: -10.0%, YoY: +5.0%) in-line with the decline in TIV, the magnitude of decline was not as large as nonnational marques (MoM: -24.2%, YoY: -7.3%). We note that Perodua captured 2.8% additional market share whilst Proton did not disappoint with an additional 1.9% market share. However, we note that Nationals typically expand market share when monthly TIV is weak. That said, Perodua’s new Myvi boosted its sales registering impressive YoY growth of 24.6%. Mazda Bucks Trend, Toyota Disappoints The clear winner among non-national marques was Mazda registering 1.3k units (MoM: +82.8%, YoY: +61.7%) sold, which is its highest monthly sales volume since April 2016. Note that sales for Mazda in December were lacklustre given Bermaz Auto’s (Malaysia’s Mazda dealer) strategy to not offer promotions. However, the impressive sales volume in January implies that the all-new Mazda CX-5 has been well-received. On the other hand, Toyota was the clear loser registering only 3.6k units (MoM: -50.8%, YoY: -38.7%), which is the lowest monthly sales volume since February 2016. This was likely due to Toyota offering massive discounts in December which resulted in a cooling-off period in January. Total Industry Production Increases We note that total industry production (TIP) has spiked upwards in January by almost 50% YoY and almost doubled MoM. We note that the TIP posed a declining trend last year as companies tried to clear old inventories. Furthermore, we believe the new Perodua Myvi launch has boosted TIP as demand for the hatchback remains high. Additionally, the higher TIP implies that companies now foresee improving demand in the future. Main beneficiaries of the higher TIP are autoparts players i.e. Pecca and MBM. Maintain Underweight We maintain our Underweight stance on the industry and our TIV forecast of 589k units (+2.1%) in FY18. Our forecast reflects a slight recovery in TIV as we anticipate consumer sentiment to improve this year. Furthermore, the new Perodua Myvi should sustain market demand. On the other hand, TIV growth will be partially dampened by sustained stringent HP loan requirements. We maintain Buy on Pecca (TP: RM1.86) and BAuto (TP: RM2.50) due to handsome dividends and earnings growth whilst MBM (TP: RM2.47) is rated as Hold. Meanwhile, we maintain Sell on Sime Darby and UMW with TP of RM2.13 and RM4.37 respectively. Page 1 of 6