Bursa Malaysia Daily Market Report - 27 November

Transcription

1. Monday , 27 November, 2017 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. Ann Joo Resources Berhad: Steel Remains in the Limelight Chin Hin Berhad: Manufacturing segment remains the driving force Karex Berhad: Margins Weighted by Competitive Pricing Strategy Kumpulan Fima Berhad: Results Within Expectation Malaysia Airports Holdings Berhad: Strong Results But Not Good Enough to Support Valuation 6. Malaysian Economy: Prices Eases in October 2017 7. Pesona Metro Holdings Berhad: Slower Construction Activities in 3Q17 8. Sentoria Group Bhd: Results Driven by Property Development 9. SKP Resources Berhad: Tracking Within Guidance 10. Top Glove Corporation Berhad: Acquiring the World’s Second Largest Surgical Glove Player 11. UMW Oil & Gas Corporation Bhd: Core Net Profit Turns Black Technical Reports 1. 2. 3. 4. 5. Weekly Technical Stock Picks Daily Money Flow Technical Stock Picks FBMKLCI Weekly Ace Market Stock Watch Weekly Small Cap Stock Watch Weekly Stock Screen 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 , 27 November 2017 For Internal Circulation Only TA Research, e-mail : taresearch@ta.com.my KLSE Market Statistics (24.11.2017) (mil) Main Market 1,207.6 Warrants 244.4 ACE Market 629.5 Bond 8.2 ETF 0.2 LEAP 0.0 Total 2,089.8 Off Market 55.5 Volume +/-chg (RMmn) 0.0 1,714.2 0.0 34.6 0.0 118.2 0.0 1.4 0.0 0.3 0.0 0.0 1,868.7 -8.6 170.9 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP November 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 1,717.23 12,393.24 16,920.88 1,711.50 23,557.99 6,889.16 7,409.64 22,550.85 2,544.33 29,866.32 3,442.15 1,695.84 6,067.14 3,353.82 1,922.72 5,982.55 Off Market (mn) BIMB LAYHONG IWCITY GKENT GPACKET TIMECOM AMPROP 27.2 13.5 4.0 3.6 2.1 1.0 1.0 (RM) @ @ @ @ @ @ @ 4.40 0.95 1.26 3.19 0.45 9.15 6.35 Exchange Rate USD/MYR 4.1150 0.0052 USD/JPY 111.42 0.1600 EUR/USD 1.187 0.0019 Review & Outlook Value Value/ +/-chg Volume Up Down 0.0 1.42 235 355 0.0 0.14 70 113 0.0 0.19 35 46 0.0 0.17 3 4 0.00 1.27 1 2 0.00 0.00 0 1 0.89 344 521 7.2 3.08 -4.04 -39.23 5.28 -1.50 % chg % YTD chg -0.23 -0.32 0.03 -0.09 4.60 8.08 14.99 4.65 MAYBANK TENAGA IHH MAXIS DIGI HLBANK MISC IOICORP PPB HLFG Mkt Cap. Chg (RM’mn) (RM) 98,495 83,970 46,469 46,004 34,288 31,967 31,514 27,963 19,679 18,049 -0.06 -0.02 -0.01 -0.02 -0.26 -0.16 -0.13 -0.07 -0.16 -0.32 News Bites Vol. (mn) 25.73 20.42 4.59 0.82 28.24 0.38 0.59 2.56 0.12 0.06 Commodities Futures Palm Oil (RM/mt) 2,626.00 18.00 Crude Oil ($/Barrel) 58.97 0.41 Gold ($/tr.oz.) 1,288.00 -2.70 Important Dates ASIABIO - 10:5 Rights Issue - RI of up to 1,163.2m ICPS together with up to 116.3m free detachable warrants. 10 ICPS together with 1 free warrant for every 5 existing shares held, at an issue price of RM0.08 per ICPS. LISTING ON: 11/12/2017. ATTA - 8-1 Rights Issue - RI of up to 2,515.0m ICPS . 8 ICPS for every 1 existing share held, at an issue price of RM0.08 per ICPS. LISTING ON: 06/12/2017. Key retracement support for the index will be at 1,705 (50%FR) and 1,683 (38.2%FR), where the index may trough ahead of oversold rebound. Immediate overhead resistance for the index will be at the falling 10-day and 30-day moving averages now at 1,723 and 1,737 respectively, then 1,750, next will be 1,758, the 100-day ma. Stock-wise, banking counters such as Affin Holdings and AMMB may suffer further losses before buyers return to nibble at cheaper levels, but IHH Healthcare, IOI Corp., Malakoff, and Wesports may attract buyers looking for oversold rebound from the recent sell-off. On the other hand, oil & gas related counters like Bumi Armada and Dialog could rise further on the back of strong oil prices. 31.81 0.14 19.20 21.80 0.32 27.98 -7.60 -0.10 3.74 27.70 0.12 17.98 7.18 0.28 25.56 158.38 0.53 35.75 18.98 0.55 19.49 -11.54 -0.68 9.91 3.90 0.06 14.55 1.90 0.06 8.06 -1.73 -0.09 -2.36 -3.64 -0.06 5.59 Top 10 KLCI Movers Based on Mkt Cap. Counter Given the more negative technical indicators on the FBM KLCI, the near term outlook has turned decisively bearish. Nonetheless, we expect stocks to stage rebound this week, due to the still oversold technical momentum which could attract buyers to bargain oversold stocks. However, strong buying momentum is needed for the index to neutralize bearish momentum and encourage an oversold rebound ahead. • Malaysia's consumer price index measuring headline inflation rose lower than expected of 3.7% in October, compared with a Bloomberg survey of 4.1%. • The listing reference price for the ordinary shares of Sime Darby Plantation Bhd and Sime Darby Property Bhd has been fixed at RM5.59 and RM1.50 respectively. • Supermax Corp Bhd's group managing director Datuk Seri Stanley Thai Kim Sim has been convicted to a five-year jail term and fined RM5mn by Securities Commission for insider trading. • Eco World International Bhd is planning to buy a prime development land some 12km northwest of Sydney's central business district for an estimated AUD40mn. • Top Glove Corporation Bhd has entered into a term sheet with Adventa Capital Pte Ltd to acquire the entire equity interest in glove manufacturer Aspion Sdn Bhd, a wholly owned subsidiary of Adventa. • Digi.Com Bhd has been removed from Bursa Malaysia's Syariah List as the group's conventional debt-to-total assets have exceeded the 33% threshold as at Dec 31, 2016. • EITA Resources Bhd received a Letter of Award as a sub-contractor from Synergy Promenade Sdn. Bhd. to supply and install lift system for 68-storey office building with total contract value of RM14.5mn. • Damansara Realty Bhd has received the approval from Economic Planning Unit for the acquisition of a piece of 53.14 acre land in Johor for RM130.3mn. • Naim Holdings Bhd is suing the Education Ministry and Sebiro Holdings Sdn Bhd for over RM12.43mn in relation to the construction and renovation of boarding schools project in Sarawak. • Eversendai Corporation Bhd is looking to expand its operational presence in the UK and Australian markets and expecting positive results in 3QFY17, which is due to be released in this week. • PRG Holdings Bhd and China's Jiangsu Provincial Construction Sdn. Bhd. will jointly develop their first affordable housing project in Batu Gajah, Perak by 1Q18. • BHS Industries Bhd is building a pulp and paper mill factory with a production capacity of 10k tonnes of wood-free paper as well as 5k tonnes of tissue paper at Pekan, Pahang. It will be completed in 2H18. • Berjaya Food Bhd exits the loss-making Kenny Rogers restaurant business in Indonesia with the disposal of 99.9% stake in PT Boga Lestari Sentosa with a cash consideration of IDR1000 (RM0.32sen) • Chin Hin Bhd's net profit for 3QFY17 slipped 26.1% YoY to RM6.01mn, mainly dragged down by lower contribution from the distribution of building material, and ready-mixed concrete business as well as losses incurred by wire mesh segment. • Ann Joo Resources Bhd's net profit for 3QFY17 increased 106.1% YoY to RM47.2mn thanks to higher steel prices and tonnage sold. • UMW Oil & Gas Corporation Bhd has returned to the black in 3QFY17 with a net profit of RM3.4mn, after it had been in the red for 7 consecutive quarters. • Malaysia Airports Holdings Bhd posted an over seven-fold jump in its net profit year-on-year for 3QFY17 to RM79.69mn from RM10.67mn due to growth from both its airport and non-airport operations. • SKP Resources Bhd's net profit for 2QFY18 surged 54.4% to RM35.07mn. • Pesona Metro Holdings Bhd posted 28.7% YoY increase of net profit to RM4.98mn for 3QFY17 due to higher construction progress recognized from the on-going projects. • Karex Bhd posted 48.2% YoY declined in net profit to RM4.21mn from RM8.14mn for 1QFY18 due to pressure on tender prices and rising production costs coupled with higher distribution and administrative expenses. • The Markit/Nikkei Japan Manufacturing flash Purchasing Managers Index rose to 53.8 in November on a seasonally adjusted basis from a final reading of 52.8 in October. 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 , November 27, 2017 FBMKLCI: 1,717.23 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 Favourable OPEC Decision Could Lift the Oversold Market Despite the grossly oversold technical condition, strengthening ringgit and oil prices, the blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) struggled to recover from the previous week’s sell-off to a fresh eight-month low, as selling pressure sustained on key blue-chip heavyweights, ignoring the firmer regional markets’ tone as strong world economic growth and rising corporate profits lured hordes of investors into equities. For the week, the blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) shed 4.43 points, or 0.26 percent to 1,717.23, with falls on BAT (RM1.52) and Hong Leong Bank (-46sen) accounting for most of the losses. Average daily traded volume and value dwindled to 2.08 billion shares worth RM2.30 billion, compared to the 2.57 billion shares and RM2.36 billion respectively the previous week, as investors increasingly moved to the sidelines given the weaker buying momentum. The FBMKLCI need a strong push to recover from the selling streak and the upcoming OPEC meeting this Thursday could provide it if the cartel and Russia agree to raise the production cuts to more than 1.8 million barrels a day or beyond the nine months extension that is widely predicted. The existing expiry date for production cuts is end-March 2018. The recent rally in crude oil prices has already took into account for a possible extension of this deadline to December 2018 and any disappointment in extending the deadline will lead to a correction in crude oil prices and vice versa, if this deadline is extended beyond nine months and/or the production cut quota is increased. Brent crude oil price closed 0.5% higher to USD63.86/barrel last Friday while West Texas Intermediate closed at USD58.95/barrel (+1.6%). As Saudi Arabia calls the shots within OPEC and it is in its best interest to engineer a much higher and stable crude oil price before the listing of Saudi Aramco, its national oil company, in second half of next year, we should see greater collaboration with non-OPEC players, especially Russia. Saudi plans to list its shares on the domestic stock market, the Tadawul, and one or more foreign exchanges. While New York or Hong Kong may emerge as the “lucky exchange”, Saudi can get the ball rolling by promising greater participation of Russian companies in the initial public offering. Closer cooperation between both parties could push crude oil prices higher, amid production cuts, improving demand and depleting inventories. Increasing US shale output is the main “party spoiler” as it is expected to increase by 35% YoY to 6.1 million barrels per day this month, according to US Energy Information Administration. Recovery in oil rig counts and the huge number of drilled-uncompleted wells may dampen sentiment as well. Nonetheless, the increasing gap between the completed and uncompleted wells should drill home a point that shortage of fracking crews and equipment is stifling efforts to boost supply significantly within the next twelve months. Thus, possibilities are not remote for Brent to surpass USD70/barrel level in early 2018, if OPEC and Russia get their acts together. This could act as a further driver for ringgit that has seen strengthening in recent weeks, despite the lacklustre capital market, which could be attributed to repatriation of exports earnings by exporters. Foreigners have turned net buyers again last week after a larger net influx of RM212mn last Wednesday. Backed by stronger-than expected economic growth, recovering corporate earnings and relatively undervalued position compared to its peers, the local bourse should wake up from its slumber soon. 14th General Election could be a major stumbling block for foreigners currently, but it shouldn’t be as the northeast monsoon Page 1 of 8
4. 27-Nov-17 rainy season may delay it until late March or April next year although technically we have until August 2018 before it is due . That aside, we have November Nikkei Malaysia PMI number released this Friday that should provide some indication on future exports and trade surplus, which have a direct link to ringgit’s strength. The US and China will release their PMI data this week as well. Investors will be zooming in on the US beige book, core PCE, PMI and ISM data as well. If persistently low inflation and latest economic data derail the widely expected 25 basis points hike in the Fed fund target rate this December, it will be an added boost for our local equity market. 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, November 27, 2017, 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. 27-Nov-17 N e w s I n B r i e f Corporate Supermax Corp Bhd ’s group managing director Datuk Seri Stanley Thai Kim Sim has been convicted to a five-year jail term and fined RM5mn by Securities Commission for insider trading. The company said the Court has granted a stay of execution and an appeal has been filed against the conviction and sentence. (Bursa Malaysia) Comments: Dato’ Seri Stanley who is also the group’s founder and major shareholder (21.2%) has been instrumental in driving the group’s rubber glove business since its early days and lately, its venture into contact lens manufacturing. In any case of his absence at the helm of the group, we do not discount the possibility that Datin Seri Cheryl Tan Bee Geok, who is also the group’s founder, second largest shareholder (15.7%) and spouse of Dato’ Seri Stanley may act in his position. In her capacity as Group Executive Director since 2000, she heads the group’s finance, operations and administration. In all, despite comfort from the group that it is business as usual, we would like to caution that the stock could succumb to selling pressure if the news cast doubts on the group’s future leadership and direction. Maintain Sell with a TP of RM1.80/share, pegged to an unchanged PE multiple of 11.0x against CY18 EPS. The listing reference price for the ordinary shares of Sime Darby Plantation Bhd and Sime Darby Property Bhd has been fixed at RM5.59 and RM1.50 respectively. The shares in both companies will be credited into the Central Depository System accounts of the entitled shareholders on Nov 29 and will be listed on the Main Market of Bursa Securities on Nov 30. Meanwhile, the trading of Sime Darby Bhd shares will be suspended on Nov 27 to facilitate the distribution. (Bursa Malaysia/The Edge) Berjaya Food Bhd (BJFOOD) exits the loss-making Kenny Rogers restaurant business in Indonesia with the disposal of 99.9% stake in PT Boga Lestari Sentosa with a cash consideration of IDR1000 (RM0.32sen). Meanwhile, BJFOOD managed to recover a portion of the inter-company debt amounting to IDR9.6bn (RM3.1mn) from PT Boga. (Bursa Malaysia/The Edge) Eco World International Bhd (EWI) is planning to buy a prime development land some 12km northwest of Sydney's central business district for an estimated AUD40mn (RM125.28mn), on which it intends to develop a project worth an estimated GDV of AUD139mn (RM435.35mn). The project is targeted to be launched in the 1H2019 and completed over 3 to 4 years. The proposed acquisition will be funded by combination of the proceeds of EWI's recent initial public offering, bank borrowings and/or other debt instruments. (Bursa Malaysia/The Edge) Top Glove Corporation Bhd has entered into a term sheet with Adventa Capital Pte Ltd to acquire the entire equity interest in glove manufacturer Aspion Sdn Bhd, a wholly owned subsidiary of Adventa, which manufactures surgical, medical, medical examination and protection gloves. The purpose of the term sheet is to set out the indicative terms for further negotiation. (The Edge) Digi.Com Bhd has been removed from Bursa Malaysia’s Syariah List. The exclusion of the Digi counter came after the November 2017 syariah assessment, which found the group’s conventional debt-to-total assets have exceeded the 33% threshold as at Dec 31, 2016. (The Star) EITA Resources Bhd received a Letter of Award as a sub-contractor from Synergy Promenade Sdn. Bhd. to supply and install lift system for 68-storey office building with total contract value of RM14.5mn. The project is expected to be completed by September 2019. (Bursa Malaysia) Page 3 of 8
6. 27-Nov-17 Damansara Realty Bhd has received the approval from Economic Planning Unit for the acquisition of a piece of 53 .14 acre land in Johor for RM130.3mn. The group said the acquisition forms part of its proposed RM141.5mn settlement agreement with Johor state investment arm Johor Corp, allowing it to reduce its net current liabilities and return its balance sheet to health. (The Edge) Naim Holdings Bhd is suing the Education Ministry and Sebiro Holdings Sdn Bhd for over RM12.43mn in relation to the construction and renovation of boarding schools project in Sarawak. The group said the claims were related to the payment for work done including variation and the release of retention sum. (The Sun) Eversendai Corporation Bhd is looking to expand its operational presence in the UK and Australian markets and expecting positive results in 3QFY17 which is due to be released in this week, according to its executive chairman and group managing director Tan Sri AK Nathan. (The Edge) PRG Holdings Bhd and China's Jiangsu Provincial Construction Sdn. Bhd. will jointly develop their first affordable housing project in Batu Gajah, Perak by 1Q18. The project is targeting to build 213 affordable single-storey houses that price at RM190k on 18-acre land. (Bernama) BHS Industries Bhd is building a pulp and paper mill factory with a production capacity of 10k tonnes of wood-free paper as well as 5k tonnes of tissue paper at Pekan, Pahang. The completion of the paper mill in 2H18 is expected to lift the group out of red according to its managing director Datuk Lim Thiam Huat. (The Edge) Chin Hin Bhd's net profit for 3QFY17 slipped 26.1% YoY to RM6.01mn from RM8.14mn despite posted 7.90% YoY increase of revenue amounting to RM260.90mn from RM241.81mn. The net profit was mainly dragged down by lower contribution from the distribution of building material, and ready-mixed concrete business as well as losses incurred by wire mesh segment. (Bursa Malaysia) Ann Joo Resources Bhd’s net profit for 3QFY17 increased 106.1% YoY to RM47.2mn from RM22.9mn thanks to higher steel prices and tonnage sold. The quarterly revenue grew 83.8% YoY to RM595.2mn from RM323.73mn. For 9MFY17, the cumulative net profit stood at RM149.9mn, 24% higher than RM120.84mn posted in the same period a year ago. (Bursa Malaysia) UMW Oil & Gas Corporation Bhd has returned to the black in 3QFY17, after it had been in the red for 7 consecutive quarters. Net profit came in at RM3.4mn in 3QFY17, compared with a net loss of RM135.4mn in the year ago. Quarterly revenue surged 263.5% YoY to RM180.5mn from RM49.7mn due to stronger demand for drilling services. For 9MFY17, UMW narrowed its net loss to RM151.7mn from RM267.8mn while revenue grew by 47.6% YoY to RM394.7mn from RM267.3mn. (Bursa Malaysia/The Edge) Malaysia Airports Holdings Bhd posted an over seven-fold jump in its net profit yearon-year for 3QFY17 to RM79.69mn from RM10.67mn and the quarterly revenue also grew 12.7% YoY to RM1.21bn from RM1.08bn due to growth from both its airport and nonairport operations. Besides, significantly lower taxation and zakat booked during the quarter also contributed to the bottom line. For 9MFY17, the net profit jumped 462.9% YoY to RM208.63mn from RM37.07mn, with revenue rising 10.1% to RM3.4bn from RM3.09bn. (Bursa Malaysia/The Edge) KNM Bhd’s net profit increased 17.4% YoY to RM1.31mn from RM1.12mn for 3QFY17 despite the quarterly revenue declined 15.4% YoY to RM347.52mn from RM410.65mn thanks to higher gross profit. For 9MFY17, the net profit dropped 79.8% YoY to RM3.78mn Page 4 of 8
7. 27-Nov-17 from RM18 .7mn and revenue fell 15.9% YoY to RM1.04bn from RM1.24bn due to low contribution from Asia & Oceania and Americas segments as well as lower completion percentage in project progress. (Bursa Malaysia/The Sun) SKP Resources Bhd's net profit for 2QFY18 surged 54.4% to RM35.07mn while the quarterly revenue grew 30.2% YoY to RM594.16mn from RM456.45mn. For 1HFY18, the net profit jumped 67% YoY to RM68.43mn from RM40.97mn, with revenue rising 44% to RM1.12bn from RM777.01mn thanks to higher revenue recorded from existing key customers. (Bursa Malaysia/The Edge) Datasonic Group Bhd's net profit for 2QFY18 increased 25.7% YoY to RM20.06mn from RM15.95mn despite its quarterly revenue fell 3.7% YoY to RM73.56mn from RM76.44mn. For 1HFY18, the net profit dropped 4.2% YoY to RM35.18mn from RM36.74mn and revenue fell 12.4% YoY to RM133.66mn from RM152.53mn due to decline in the smart card business. The group declared a second interim dividend of 1sen per share. (Bursa Malaysia/The Star) Time Dotcom Bhd’s net profit for 3QFY17 dropped 49% YoY to RM28.23mn from RM55.38mn due to one-off revenues in the previous corresponding quarter. It had also recorded lower interest income, higher interest expenses as well as a net loss on foreign currency exchange. Meanwhile, the quarterly revenue grew 4.3% to RM202.99mn from RM194.73mn a year ago, which the group attributed to solid growth in data centre product segments. (Bursa Malaysia/The Edge) Pesona Metro Holdings Bhd posted 28.7% YoY increase of net profit to RM4.98mn from RM3.87mn for 3QFY17 and quarterly revenue moved up 14.1% YoY to RM117.14mn from RM102.64mn due to higher construction progress recognized from the on-going projects. For 9MFY17, the net profit increased 9.0% YoY to RM17.06mn from RM15.65mn, with revenue rising 59.7% to RM458.61mn from RM287.23mn. (Bursa Malaysia) Karex Bhd posted 48.2% YoY declined in net profit to RM4.21mn from RM8.14mn for 1QFY18 due to pressure on tender prices and rising production costs coupled with higher distribution and administrative expenses. Meanwhile, quarterly revenue increased 34.4% YoY to RM107.59mn from RM80.04mn resulting from additional sales contribution from the sexual wellness segment. (Bursa Malaysia) Panasonic Manufacturing Malaysia Bhd’s net profit slipped 23.2% YoY to RM23.64mn from RM30.78mn for 2QFY18 with the quarterly revenue declined 5.1% YoY to RM277.53mn from RM292.42mn due to lower demand for the fans and other products. For 1HFY18, net profit dropped 8.5% YoY to RM63.22mn from RM69.09mn whereas revenue increased 2.57% YoY to RM605.38mn from RM590.21mn. The group declared an interim dividend of 15sen per share. (Bursa Malaysia) Chemical Company of Malaysia Bhd returned to the black in 3QFY17 with a net profit of RM8.2mn versus a net loss of RM20.65mn in 3QFY16, mainly due to the absence of its disposed loss-making fertilizers division. Quarterly revenue stood at RM88.12mn, up 17% YoY compared with RM75.51mn, mainly due to improved revenue from its chemical business. For 9MFY17, the net profit jumped more than seven-fold YoY to RM22.84mn from RM3.06mn while revenue came in at RM261.48mn, up 17.4% YoY from RM222.64mn. (Bursa Malaysia/The Edge) Page 5 of 8
8. 27-Nov-17 N e w s I n B r i e f Economy Asia Malaysian Inflation Rate in October Climbs at Slower Pace Malaysia ’s consumer price index (CPI) measuring headline inflation rose lower than expected of 3.7% in October, compared with a Bloomberg survey of 4.1%. Core inflation, which excludes food and fuel, rose 2.3% in October 2017 compared with the same month of the previous year. Among the major groups which recorded increases were the indices for transport (+12.1%), food & non-alcoholic beverages (+4.4%), restaurants and hotels (+2.7%), furnishings, household equipment & routine household maintenance (+2.6%), health (+2.4%) and housing, water, electricity, gas & other fuels (+2.4%). CPI for the period January to October 2017 registered an increase of 4.0% compared with the same period last year. The index for food & non-alcoholic beverages was the main contributor to the rise in CPI for the period January to October 2017, registering an increase of 4.3%. Separately, the leading index for Malaysia, which measures the future economic activity, declined for the first time in three months in September, survey figures from the Department of Statistics showed. The leading index dropped to 119.9 in September from 120.2 in the previous month. On an annual basis, the leading index increased at a stable pace of 2.6% in September. The coincident index that reflects the current economic activity decreased to 130.6 in September from 131.3 in the preceding month. (The Star/RTT News) Japan November Manufacturing Activity Grows at Fastest Pace in Over Three Years: Flash PMI Japanese manufacturing activity expanded at the fastest pace in more than three years in November as output, new orders, and new export orders all accelerated in a sign the economy will continue its growth streak, a preliminary survey showed. The Markit/Nikkei Japan Manufacturing flash Purchasing Managers Index (PMI) rose to 53.8 in November on a seasonally adjusted basis from a final reading of 52.8 in October. The reading remained above the 50 threshold that separates expansion from contraction for the 15th consecutive month and marked the fastest expansion since March 2014. New orders increased strongly, underpinned by business from abroad amid recent yen weakness. New export orders expanded at the fastest pace in almost four years. The flash index for new export orders rose to 54.5 from a final 52.3 in the previous month to reach the highest since December 2013, helped by recent weakness in the yen. The index for total new domestic and export orders jumped to the highest since March 2014. The output component of the PMI index also rose to the highest since March 2014. Input prices rose at a much faster pace than October, fueled by higher material prices and the cheaper yen, but the survey suggested manufacturers were only able to pass on a small portion of the hefty cost rises to their customers. Japan’s economy grew in the third quarter to post the longest streak of uninterrupted growth in more than a decade. Most of the growth in the third quarter came from exports as consumer spending fell and capital expenditure slowed. However, economists say consumption and business investment will start to accelerate soon and expect domestic demand to drive growth in the future. (Reuters) Singapore Industrial Production Increases in October Singapore's industrial production logged a double-digit growth in October, data from the Economic Development Board showed. Industrial output advanced 14.6% year-on-year in October, faster than the 14.4% increase seen in September. Nonetheless, the pace was slightly weaker than the expected 16 percent. Excluding biomedical manufacturing, output surged 25.8% in October. Data showed that the electronics, chemicals, precision engineering and general manufacturing clusters logged growth, while the biomedical manufacturing and transport engineering clusters contracted in October. On a monthly Page 6 of 8
9. 27-Nov-17 basis , industrial production rose 0.7%, reversing a 1% fall in the previous month. Production was expected to climb 1.6%. (RTT News) United States U.S. Private-Sector Growth Slows in November - IHS Markit The U.S. private sector grew at the slowest pace since July, according to a report released, as companies faced stronger cost pressures from hurricane-related supply-chain disruptions. The Flash U.S. Composite PMI Output Index, a survey from IHS Markit that takes the temperature of the private sector, dropped to 54.6 in November from 55.2 in October. Results above 50 separate expansion from contraction. November showed the "second-fastest rise in manufacturing input price inflation since December 2012," IHS Markit said in the report. "A number of firms cited higher prices for chemicals and energy following supply chain disruption linked to hurricanes Harvey and Irma." New business growth was above average compared with the first half of the year, the report said, and employment in the private sector also rose from a month earlier. The Flash U.S. Manufacturing PMI Index dropped to 53.8 in November, a decrease from 54.6 last month. Economists polled by The Wall Street Journal were predicting 54.2. The Flash U.S. Services PMI Business Activity Index was 54.7 in November, a drop from 55.3 last month. Economists polled by The Wall Street Journal were predicting 55.5. The final November reports will be released Dec. 1 for manufacturing and Dec. 5 for services and composite indicators. (Fox Business) Europe and Uni ted Kingdom UK Consumer Confidence at Lowest Point Since Brexit Result UK households are their least confident since immediately after last year’s Brexit vote, partly because of this month’s interest rate hike and further signs of a slowdown in the housing market, a survey showed. A consumer confidence index produced by polling firm YouGov and the Centre for Economics and Business Research, a consultancy, sank to 106.6 in November, down sharply from 109.3 in October. It was the first fall since June although it remained above the 100 level above which consumers are considered to be feeling confident. All eight of the index’s underlying measures weakened and a score for household finances over the past 30 days sank to its lowest level since January 2014. (The Independent) Cash Remains Preferred Payment Option in Eurozone: ECB Study Eurozone consumers still prefer cash to other options for paying for their purchases, though numerous survey have suggested that a cashless society is imminent, results of a study by the European Central Bank showed. Nearly 79% of all transactions at the point-ofsale terminals in the euro area were carried out using cash, which amounts to 54% of the total value of all payments, the ECB study conducted in 2016 revealed. Almost 19% of the transactions were made with cards and 2% with other payment instruments. That said, there were substantial differences between euro area countries. The southern euro area countries, as well as, Germany, Austria and Slovenia, led the group where cash remained the predominant payment option and 80% or more of POS transactions conducted with cash in these regions. The Netherlands, Estonia and Finland were the leaders in using payment options other than cash. The share of cash payments in the number of transactions ranged between 45% and 54%. In value terms, the share of cash was highest in Greece, Cyprus and Malta, above 70%, while it was lowest in the Benelux countries, Estonia, France and Finland, at or less than 33%. The study also showed that men tend to use cash more often than women and that consumers aged 40 and over use more cash than younger groups. Cash usage appeared to be relatively homogeneous across different levels of education. (RTT News) German Business Confidence Rises Amid Optimism About Future A closely watched survey shows German business confidence hit another record high in November, as firms' optimism about the future offset their slightly more pessimistic feelings about their current situation. The Munich-based Ifo Institute said its business climate indicator climbed to 117.5 points in November from 116.8 the previous month. Page 7 of 8
10. 27-Nov-17 Businesses assessed their current situation as slightly worse , at 124.4 points from 124.8 the previous month, but their expectations for the next six months rose to 111.0 points from 109.2 in October. The index is based upon about 7,000 survey responses from firms in manufacturing, construction, wholesaling and retailing. Germany's economy is expected to grow by as much as 2% this year amid record-high employment and rising real wages. (ABC News) Share Buy-Back: 24 November 2017 Company Bought Back ASTINO 66,000 DAIBOCI 40,000 E&O 240,000 ENGTEX 100,000 FFHB 31,100 FITTERS 520,000 GRANFLO 35,000 HEVEA 200,000 HSPLANT 2,000 LIENHOE 32,900 NYLEX 100,000 PECCA 86,000 Source: Bursa Malaysia Price (RM) Hi/Lo (RM) 0.89 2.20 1.45/1.43 1.13 0.66/0.645 0.405/0.395 0.245/0.24 1.35/1.33 2.58 0.35 0.80 1.33/1.32 0.90/0.885 2.20 1.45/1.42 1.13/1.10 0.66/0.64 0.405/0.39 0.245/0.235 1.37/1.30 2.58/2.56 0.36/0.35 0.82/0.80 1.34/1.32 Total Treasury Shares 854,837 291,700 16,523,747 3,336,100 1,002,300 26,260,000 7,654,000 782,000 308,800 15,781,200 3,205,724 2,580,700 TA RESEARCH – Remisiers’ Briefing Topic: Weekly Market Outlook Speake: Kaladher Govindan/ Stephen Soo Venue: Auditorium, 8th Floor Menara TA One Date: 27 November, 2017 (Monday) Time: 12.45pm ** Please be informed that the Auditorium (Level 10) is relocated to Level 8, ex-food court. 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) BETA EPS (sen) PER (X) Div Yield (%) FY17 FY18 FY17 FY18 FY17 52weeks 52weeks % Chg FY18 High Price % Chg Low Price % Chg YTD 24-Nov-17 AUTOMOBILE BAUTO 2.10 2.50 0.80 10.2 14.3 20.6 14.7 5.5 5.5 2.20 -4.5 1.84 14.1 MBMR 2.10 2.32 0.98 20.7 23.2 10.2 9.1 2.0 2.2 2.60 -19.2 2.01 4.5 -1.4 -1.9 PECCA 1.34 1.69 na 7.8 11.1 17.1 12.1 3.7 4.1 1.74 -23.0 1.28 4.7 -15.7 UMW 5.30 5.04 1.38 19.7 30.6 26.9 17.3 2.5 3.8 6.08 -12.8 4.09 29.5 25.5 BANKS & FINANCIAL SERVICES ABMB 3.69 4.80 1.38 33.1 30.6 11.2 12.1 4.3 4.3 4.49 -17.8 3.63 1.7 -0.8 AFFIN 2.38 3.00 0.92 29.4 33.6 8.1 7.1 3.4 3.4 3.00 -20.7 2.22 7.2 -0.4 AMBANK 4.26 5.70 1.20 43.9 48.6 9.7 8.8 4.1 4.2 5.70 -25.3 4.08 4.4 -1.2 CIMB 5.98 8.00 1.50 49.6 55.2 12.0 10.8 4.2 4.6 7.08 -15.5 4.49 33.2 32.6 HLBANK 15.32 17.50 0.60 104.9 114.2 14.6 13.4 2.9 2.9 16.48 -7.0 13.02 17.7 13.5 MAYBANK 9.15 10.20 0.96 69.6 75.9 13.2 12.1 5.5 5.5 9.86 -7.2 7.68 19.1 11.6 PBBANK 20.32 23.60 0.59 137.2 142.4 14.8 14.3 2.8 2.9 20.90 -2.8 19.46 4.4 3.0 RHBBANK 4.91 5.80 1.47 50.6 55.0 9.7 8.9 3.1 3.1 5.59 -12.2 4.62 6.3 4.2 BURSA 9.58 11.10 0.79 40.2 39.0 23.8 24.6 3.5 3.5 10.98 -12.7 8.08 18.5 9.8 -19.5 CONSTRUCTION BPURI 0.35 0.38 0.61 4.7 4.6 7.5 7.6 0.0 0.0 0.49 -27.8 0.33 7.7 GADANG 1.07 1.75 0.46 15.2 14.3 7.0 7.5 2.8 2.8 1.37 -21.9 0.89 20.9 1.9 GAMUDA 4.68 6.00 0.96 27.8 34.5 16.8 13.6 2.6 2.6 5.52 -15.2 4.58 2.2 -2.1 IJM 3.16 3.50 0.85 15.3 20.2 20.7 15.6 2.4 3.0 3.61 -12.5 2.97 6.4 -1.3 PESONA 0.50 0.55 0.88 3.5 5.8 14.3 8.6 3.0 3.0 0.74 -32.0 0.48 5.3 -17.4 SENDAI 0.90 0.58 1.31 8.2 9.6 10.9 9.4 1.1 1.1 1.39 -35.3 0.51 78.2 56.5 SUNCON 2.40 2.65 na 11.3 14.7 21.2 16.3 2.3 2.3 2.44 -1.6 1.61 49.1 41.2 WCT 1.66 1.61 1.01 11.5 12.5 14.4 13.3 1.8 1.8 2.48 -32.9 1.49 11.4 -3.5 LITRAK 5.85 6.26 0.32 41.9 45.7 14.0 12.8 4.3 4.3 6.15 -4.9 5.57 5.0 -0.5 ANNJOO 3.88 4.40 1.33 41.3 45.4 9.4 8.5 4.1 5.7 3.98 -2.5 1.97 97.0 78.8 CHINHIN 1.23 1.36 na 5.7 9.7 21.5 12.6 2.4 4.1 1.49 -17.4 0.85 44.7 41.4 WTHORSE 1.95 1.67 0.53 4.0 6.5 48.5 30.0 5.1 5.1 2.19 -11.0 1.92 1.6 -3.0 CARLSBG 15.02 18.06 0.72 79.3 86.2 19.0 17.4 5.3 5.7 16.00 -6.1 13.72 9.5 7.9 HEIM 17.74 19.14 0.51 79.6 84.0 22.3 21.1 4.0 4.3 19.58 -9.4 15.60 13.7 8.3 AEON 1.88 1.97 0.48 4.7 6.7 39.8 28.1 1.9 2.1 2.70 -30.4 1.87 0.5 -26.8 AMWAY 7.25 8.18 0.35 35.7 43.9 20.3 16.5 4.1 5.2 8.18 -11.4 7.05 2.8 -1.1 F&N 25.58 27.41 0.18 102.6 150.9 24.9 17.0 2.2 2.3 26.00 -1.6 22.44 14.0 8.9 HUPSENG 1.11 1.25 0.43 5.2 5.4 21.6 20.4 4.1 4.1 1.28 -13.3 1.08 2.8 -3.5 Building Materials CONSUMER Brewery Retail JOHOTIN 1.31 1.80 0.67 13.5 15.1 9.7 8.7 3.3 3.8 1.76 -25.6 1.11 18.0 5.6 NESTLE 91.96 120.50 0.40 292.7 325.4 31.4 28.3 3.0 3.2 94.84 -3.0 74.12 24.1 17.6 99.7 PADINI 5.07 4.67 0.55 23.5 27.0 21.6 18.8 2.3 2.5 5.49 -7.7 2.26 124.3 POHUAT 1.83 2.50 0.67 27.3 27.3 6.7 6.7 4.4 4.4 2.08 -12.0 1.55 18.1 5.8 QL 3.95 3.26 0.30 12.1 12.8 32.7 30.8 1.1 1.1 4.03 -2.0 3.26 21.3 18.6 SIGN 0.82 0.92 1.07 6.7 6.9 12.2 11.8 3.0 4.3 1.07 -23.4 0.79 3.8 3.1 38.00 52.08 1.29 198.6 187.4 19.1 20.3 5.3 5.3 51.04 -25.6 37.00 2.7 -14.0 GENTING 9.20 11.53 1.48 48.7 54.4 18.9 16.9 1.5 1.7 10.00 -8.0 7.65 20.3 15.8 GENM 5.11 6.51 1.52 18.7 27.0 27.3 18.9 1.6 1.8 6.38 -19.9 4.44 15.1 13.1 BJTOTO 2.28 3.34 0.82 18.3 21.5 12.5 10.6 6.1 7.0 3.13 -27.2 2.25 1.3 -23.0 LUSTER 0.12 0.15 2.08 0.4 0.4 31.7 31.9 0.0 0.0 0.16 -28.1 0.05 130.0 130.0 Tobacco BAT GAMING Casino NFO HEALTHCARE Hospitals/ Pharmaceutical CCMDBIO 2.35 2.70 0.58 14.0 15.0 16.8 15.6 4.0 4.2 2.43 -3.3 1.90 23.7 18.7 IHH 5.64 6.41 0.73 7.9 13.1 71.1 43.1 0.6 0.6 6.60 -14.5 5.50 2.5 -11.2 KPJ 1.00 1.10 0.41 3.2 3.6 31.0 28.0 1.8 2.0 1.14 -12.3 0.96 3.9 -4.3 HARTA 9.35 6.87 0.72 19.4 24.6 48.2 38.1 0.9 1.2 9.80 -4.6 4.53 106.4 93.6 KOSSAN 7.95 8.80 0.04 29.1 38.3 27.4 20.8 1.8 2.4 8.31 -4.3 5.62 41.5 20.6 SUPERMX 2.09 1.80 0.16 10.1 15.2 20.6 13.8 2.6 2.5 2.24 -6.7 1.69 23.7 -0.9 TOPGLOV 6.75 6.30 -0.25 26.4 29.4 25.6 22.9 2.1 2.2 7.05 -4.3 4.56 48.0 26.2 KAREX 1.50 1.00 0.28 2.8 2.8 53.8 54.3 1.3 0.5 2.56 -41.4 1.37 9.5 -36.4 SCIENTX 8.59 9.38 0.40 52.3 64.9 16.4 13.2 1.9 2.1 9.85 -12.8 6.67 28.8 28.2 SKPRES 2.12 2.20 0.45 8.3 10.4 25.7 20.4 2.0 2.4 2.15 -1.4 1.24 71.0 64.3 ASTRO 2.74 3.40 1.33 13.2 14.5 20.7 18.8 4.6 4.7 2.94 -6.8 2.47 10.9 5.4 MEDIA PRIMA 0.71 0.60 0.56 0.9 2.8 83.3 25.2 1.0 3.2 1.28 -44.5 0.66 8.4 -38.3 STAR 1.35 1.00 0.76 3.3 4.0 40.7 33.4 31.1 13.3 2.22 -39.1 1.34 0.7 -30.7 Rubber Gloves INDUSTRIAL MEDIA
12. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) BETA EPS (sen) FY17 PER (X) Div Yield (%) FY18 FY17 FY18 FY17 52weeks 52weeks % Chg FY18 High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.42 0.75 1.21 3.6 4.5 11.5 9.2 2.4 2.4 0.69 -39.9 0.23 84.4 62.7 LCTITAN 4.99 6.66 na 42.8 63.4 11.7 7.9 4.6 5.0 6.53 -23.6 4.14 20.5 -23.2 MHB 0.87 0.78 1.79 -2.0 -0.5 na na 0.0 0.0 1.16 -25.4 0.63 38.4 -5.5 MISC 7.06 6.56 1.07 57.2 46.8 12.3 15.1 4.2 4.2 7.90 -10.6 6.91 2.2 -3.9 PANTECH 0.65 0.69 1.18 4.0 6.1 16.2 10.5 2.8 4.3 0.74 -12.8 0.44 48.3 44.9 PCHEM 7.35 8.05 1.00 52.7 49.8 14.0 14.8 3.1 3.0 7.80 -5.8 6.54 12.4 5.3 SENERGY 1.32 1.66 2.81 6.6 -0.4 20.0 na 0.8 0.0 2.10 -37.1 1.30 1.5 -18.5 SERBADK 2.92 3.40 na 22.9 25.7 12.8 11.3 2.4 2.6 3.02 -3.3 1.51 93.4 94.7 UMWOG 0.30 0.51 1.71 -1.7 0.4 na 74.2 0.0 0.0 0.92 -67.5 0.27 11.1 -64.9 -10.6 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.52 1.55 1.22 FGV 1.80 2.01 1.85 IJMPLNT 2.94 3.58 0.32 IOICORP 4.45 4.14 1.24 KFIMA 1.62 1.89 0.51 KLK 24.50 26.18 SIME 8.94 9.80 UMCCA 6.70 GLOMAC HUAYANG 11.3 12.3 13.5 12.4 0.0 0.0 1.98 -23.2 1.28 18.8 2.1 3.7 86.1 48.6 2.8 2.8 2.18 -17.4 1.42 26.8 16.1 12.3 14.1 23.9 20.9 2.4 2.7 3.60 -18.3 2.83 3.9 -13.5 17.3 21.0 25.7 21.1 2.1 3.6 4.81 -7.5 4.31 3.2 1.1 19.9 13.3 8.1 12.2 5.6 5.6 1.96 -17.3 1.60 1.2 -4.7 0.78 100.5 120.7 24.4 20.3 2.0 2.4 25.50 -3.9 23.00 6.5 2.1 1.52 34.2 37.3 26.1 23.9 2.6 2.6 9.70 -7.8 7.96 12.3 10.4 7.52 0.41 37.5 31.8 17.9 21.1 3.4 2.5 7.08 -5.4 5.59 19.8 12.2 0.63 0.60 0.55 1.4 5.0 43.2 12.4 4.4 4.3 0.75 -16.1 0.61 2.5 -10.1 0.64 0.69 0.66 17.3 1.8 3.7 34.7 6.3 0.8 1.21 -47.5 0.63 0.8 -43.8 IBRACO 0.88 0.94 na 3.3 10.5 27.0 8.4 2.3 4.5 1.05 -16.2 0.76 16.6 -12.0 IOIPG 1.95 2.13 0.79 18.9 16.5 10.3 11.8 3.1 3.1 2.22 -12.2 1.85 5.6 0.0 MAHSING 1.52 1.76 1.00 14.3 13.5 10.6 11.2 4.3 4.3 1.64 -7.3 1.34 13.4 6.3 SNTORIA 0.72 0.98 0.32 7.0 10.3 10.2 6.9 1.4 1.4 1.00 -28.5 0.66 8.3 -10.6 PLANTATIONS PROPERTY Note: SNTORIA proposed bonus issue of warrants & right issue of shares. For more details please refer to 25.09.17 report. SPB 4.76 5.97 0.68 25.6 22.8 13.1 14.7 2.5 2.5 5.19 -8.3 4.32 10.1 7.7 SPSETIA 3.36 4.10 0.87 11.6 12.7 13.9 12.7 4.2 4.2 4.50 -25.3 3.11 8.0 7.3 SUNWAY 1.61 1.83 0.75 15.8 15.1 12.2 12.8 3.1 3.1 1.96 -17.8 1.24 29.9 25.2 SUNREIT 1.68 1.87 0.75 9.2 10.0 18.2 16.7 5.5 6.0 1.81 -7.2 1.64 2.4 -2.3 CMMT 1.46 1.72 0.43 8.1 8.6 18.1 16.9 5.8 6.1 1.72 -15.1 1.40 4.3 -4.6 -28.1 REIT POWER & UTILITIES MALAKOF 0.99 1.16 0.63 6.3 6.0 15.7 16.4 7.1 7.1 1.43 -31.1 0.99 0.0 PETDAG 23.60 22.08 0.56 102.8 105.1 23.0 22.4 3.3 3.3 25.70 -8.2 21.00 12.4 -0.8 PETGAS 16.76 19.10 0.94 89.1 98.8 18.8 17.0 4.0 4.1 21.98 -23.7 16.30 2.8 -21.3 TENAGA 14.82 17.38 0.74 175.7 130.0 8.4 11.4 3.0 3.0 15.46 -4.1 13.00 14.0 6.6 YTLPOWR 1.23 1.17 0.73 8.2 9.7 14.9 12.7 4.1 4.1 1.50 -18.0 1.21 1.7 -15.8 TELECOMMUNICATIONS AXIATA 5.31 5.75 1.36 14.4 16.1 36.9 33.0 1.4 1.5 5.47 -2.9 4.11 29.2 12.5 DIGI 4.41 5.20 0.79 19.5 20.0 22.6 22.1 4.4 4.5 5.19 -15.0 4.36 1.1 -8.7 MAXIS 5.89 6.10 0.75 26.0 26.2 22.7 22.5 3.4 3.4 6.60 -10.8 5.48 7.5 -1.5 TM 6.00 7.20 0.64 22.6 23.2 26.6 25.9 3.4 3.5 6.69 -10.3 5.81 3.3 0.8 TECHNOLOGY Semiconductor & Electronics ELSOFT 2.65 2.70 0.59 11.3 13.4 23.5 19.8 3.0 3.5 2.95 -10.2 1.29 106.2 88.8 IRIS 0.16 0.25 1.86 -1.3 0.6 na 28.9 0.0 0.0 0.22 -27.3 0.10 60.0 45.5 INARI 3.02 3.05 0.84 9.8 14.3 30.9 21.2 3.2 3.3 3.08 -1.9 1.61 88.0 82.3 MPI 13.30 15.00 0.23 89.5 105.5 14.9 12.6 2.0 2.4 14.52 -8.4 7.20 84.7 79.5 UNISEM 3.70 3.85 0.86 23.5 27.1 15.7 13.6 3.2 3.2 4.25 -12.9 2.29 61.6 56.8 TRANSPORTATION Airlines AIRASIA 3.16 3.76 1.00 44.0 37.6 7.2 8.4 1.3 1.6 3.59 -12.0 2.16 46.3 38.0 AIRPORT 8.24 8.47 1.24 19.6 19.7 42.0 41.7 1.2 1.2 9.45 -12.8 5.91 39.4 36.0 Freight & Tankers PTRANS 0.30 0.44 na 2.1 2.3 14.4 12.9 2.1 2.3 0.38 -22.7 0.14 109.4 102.8 TNLOGIS 1.33 1.80 1.12 12.0 13.6 11.1 9.8 3.2 3.8 1.83 -27.5 1.30 2.3 -14.7 WPRTS 3.55 4.06 0.88 17.1 16.8 20.7 21.1 3.6 3.5 4.39 -19.1 3.52 0.9 -17.4 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) Beta EPS (cent) FY17 FY18 PER (X) FY17 FY18 Div Yield (%) FY17 52week 52week % Chg FY18 High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 25.00 23.30 1.25 172.7 189.1 14.5 13.2 2.4 2.4 0.0 17.1 46.63 44.2 0.0 OCBC 12.05 13.50 1.20 95.5 104.0 12.6 11.6 5.7 6.7 -0.4 8.9 8.84 35.1 0.0 UOB 26.00 26.90 1.07 200.8 215.5 12.9 12.1 2.7 2.7 0.0 19.9 30.78 27.5 0.0 PLANTATIONS WILMAR 3.17 3.63 0.85 28.9 31.1 11.0 10.2 2.5 2.8 -20.8 3.1 2.92 -11.7 0.0 IFAR 0.40 0.53 0.97 4.9 5.2 8.2 7.7 3.0 3.2 -32.8 0.4 2.56 -23.8 0.0 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 , November 27, 2017 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Weekly Technical Outlook FBM KLCI: 1,717.23 (-4.43, -0.26%) Chartist : Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my Strong Buying Momentum Needed For Rebound Despite the grossly oversold technical condition, strengthening ringgit and oil prices, the blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) struggled to recover from the previous week’s sell-off to a fresh eight-month, as selling pressure sustained on key blue-chip heavyweights, ignoring the firmer regional markets tone as strong world growth and rising corporate profits lured hordes of investors into equities. For the week, the blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) shed 4.43 points, or 0.26 percent to 1,717.23, with falls on BAT (RM1.52) and Hong Leong Bank (-46sen) accounting for most of the losses. Average daily traded volume and value dwindled to 2.08 billion shares worth RM2.30 billion, compared to the 2.57 billion shares and RM2.36 billion respectively the previous week, as investors increasingly moved to the sidelines given the weaker buying momentum. Bursa Malaysia shares edged lower Monday, as investors mostly stayed sidelined amid uncertainties over US tax reforms and geopolitical tensions in the Middle East. The KLCI shed 3.3 points to settle at 1,718.36, off an early high of 1,725.35 and low of 1,717.45, as losers trashed gainers 663 to 256 on cautious turnover totaling 1.97bn shares worth RM2.14bn. While the local benchmark recovered the following day helped by rebound in oil & gas and plantation heavyweights, construction and property related stocks slumped on fears over the adverse impact of an indefinite freeze on high-end property development projects. The KLCI rose 2.32 points to close at 1,720.68, off an early high of 1,722.73 and low of 1,716.45, as losers swarmed gainers 684 to 240 on higher turnover totaling 2.27bn shares worth RM2.37bn. Shares rose Wednesday, as bargain hunting got under way on selected key index heavyweights, while regional markets extended their rally, taking overnight cues from Wall Street where stocks rose to record highs after a rally in tech names lifted the broader market. The KLCI gained 2.86 points to close at 1,723.54, off a high of 1,727.77 and low of 1,721.36, as gainers edged losers 589 to 318 on turnover totaling 2.24bn shares worth RM2.61bn. Stocks fell the next day, with blue chips leading falls in line with the subdued regional markets as investors parsed through minutes from the U.S. central bank. The KLCI shed 2.27 points to close at 1,721.27, off a high of 1,728.18 and low of 1,720.59, as losers edged gainers 445 to 433 on slow turnover of 2.09bn shares worth RM1.86bn. The local market extended losses on Friday, led by key blue chips heavyweights, as selling pressure sustained despite regional strength and oversold technical conditions. The KLCI lost another 4.04 points to close at 1,717.23, off a high of 1,720.38 and low of 1,713.25, as losers edged gainers 521 to 344 on turnover totaling 1.83bn shares worth RM2.52bn. Trading range for the local blue-chip benchmark index last week was 14.92 points, compared to the 26.25 points range the previous week, as blue chips stayed depressed near eight-month lows. For the week, the FBM-EMAS Index slipped 23.68 points, or 0.19 percent to 12,393.24, while the FBM-Small Cap Index fell another 160.71 points, or 0.94 percent to close the week at 16,920.88. Page 1 of 3
14. 27-Nov-17 Due to last week ’s failure to rebound, the daily slow stochastic momentum indicator for the FBM KLCI stayed oversold despite hooking up mildly (Chart 1), while the weekly indicator is inching deeper towards the oversold territory. The 14-day Relative Strength Index (RSI) indicator stayed mildly oversold with a low reading of 31.91, while the 14-week RSI declined further to read 36.14 as of last Friday. Chart 1 On trend indicators, the signal line on the daily Moving Average Convergence Divergence (MACD) increased its bearish stance, sinking deeper into negative territory, while the weekly MACD dipped lower to reinforce the bearish daily trend reading (Chart 2). Meantime, the +DI and –DI lines on the 14-day Directional Movement Index (DMI) trend indicator stayed apart bearishly to suggest a persistent down-trend. Chart 2 Conclusion Given the more negative technical indicators on the FBM KLCI, the near term outlook has turned decisively bearish. Nonetheless, we expect stocks to stage rebound this week, due to the still oversold technical momentum which could attract buyers to bargain oversold stocks. However, strong buying momentum is needed for the index to neutralize bearish momentum and encourage an oversold rebound ahead. Page 2 of 3
15. 27-Nov-17 Key retracement support for the index will be at 1 ,705 (50%FR) and 1,683 (38.2%FR), where the index may trough ahead of oversold rebound. Immediate overhead resistance for the index will be at the falling 10-day and 30-day moving averages now at 1,723 and 1,737 respectively, then 1,750, next will be 1,758, the 100-day ma. Stock-wise, banking counters such as Affin Holdings and AMMB may suffer further losses before buyers return to nibble at cheaper levels, but IHH Healthcare, IOI Corp., Malakoff, and Wesports may attract buyers looking for oversold rebound from the recent sell-off. On the other hand, oil & gas related counters like Bumi Armada and Dialog could rise further on the back of strong oil prices. 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, November 27, 2017, 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 , November 27, 2017 FBMKLCI: 1,717.23 Sector: Building Materials THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Ann Joo Resources Berhad TP: RM4.40 (+13.4%) Last Traded: RM3.88 Steel Remains in the Limelight Ooi Beng Hooi Tel: +603-2167 9612 BUY benghooi@ta.com.my Results Review Excluding the forex gain of RM1.46mn, ANNJOO’s 9MFY17 core profit of RM147.3mn came in within expectations, accounting for 70.0% and 73.4% of ours and consensus’ full-year forecast respectively. YoY, 9M17 core profit jumped 36.2% to RM147.3mn due to higher revenue contribution of 13.4% at RM1,585.1mn and margin expansion. Higher average selling price was more than sufficient to cover higher raw material costs of scrap iron and coke. QoQ, 3Q17 core profit was 77.1% higher at RM45.8mn with revenue increased by 21.3% to RM595.1mn. The higher revenue was mainly contributed by higher steel prices and tonnage sold, backed by increased domestic demand following the easing of foreign labour constraints and post festive season in 2Q17. The group’s net gearing position eased slightly to 0.65x from 0.75x a quarter ago. www.taonline.com.my Share Information Bloomberg Code AJR MK Bursa ANNJOO Stock Code 6556 Listing Main Market 511.9 Share Cap (mn) 1986.2 Market Cap (RMmn) 3.98/1.97 52-wk Hi/Lo (RM) 1002.0 12-mth Avg Daily Vol ('000 shrs) 29.5 Estimated Free Float (%) 1.20 Beta Major Shareholders (%) AnnJoo Corp Sdn Bhd - 35.78 Lim Seng Chee & Sons Sdn- 13.53 LSQ & Sons Sdn Bhd - 11.22 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 211.4 232.6 200.7 223.8 105.4 103.9 Buy (Maintained) Financial Indicators Impact We maintain our FY17-FY19 earnings forecasts but we trim FY17 dividend payout ratio assumption from 50% to 40%. Outlook We expect the group’s earnings growth to be driven by the picking-up of the construction progress of local infrastructure projects and growing regional steel demand. The local steel price will be well supported due to on-going capacity elimination and expected lower steel production during the winter months in China. In addition, the safeguard duties in Malaysia will continue to play a role to deter any massive import from other countries. We expect the group to deliver a stronger 4Q17 results due to higher steel prices and potentially lower material prices especially on the iron ore and scrap iron in comparison with 3Q17 due to declining demand from Chinese steel mills during the winter period. Net Debt / Equity (%) CFPS (sen) Price / CFPS (x) ROA (%) NTA/Share (RM) Price/NTA (x) FY17 66.4 2.4 164.7 8.8 2.4 1.6 FY18 50.4 6.6 58.5 9.5 2.6 1.5 % of FY 70.0 73.4 Within Within ANNJOO 3.5 15.5 21.3 91.1 FBM KLCI (1.7) (2.7) (3.1) 5.5 Scorecard vs. TA vs. Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBMKLCI Valuation We maintain Buy recommendation on the stock with an unchanged target price of RM4.40, based on 10x CY18 earnings. Source: Bloomberg Page 1 of 3
17. 27-Nov-17 Exhibit 1 : Steel Bar Price Source: MITI, Bloomberg, TA Securities Exhibit 2: Billet Price Source: MITI, Bloomberg, TA Securities Exhibit 3: Price of Raw Material Source: MITI, Bloomberg, TA Securities Page 2 of 3
18. 27-Nov-17 Table 1 : Earnings Summary (RMmn) Table 2: 3QFY17 Results Analysis (RMmn) FYE Dec (RMmn) Revenue Operating expenses Other income/ (expenses) Finance Costs PBT Core PBT Income tax expense Net profit Core net profit 3Q16 323.7 (273.7) (1.0) (9.3) 39.7 41.8 (16.8) 22.9 25.1 2Q17 490.7 (450.3) 5.2 (11.0) 34.6 31.8 (6.0) 28.6 25.8 3Q17 QoQ (%) 595.1 21.3 (528.5) 17.4 2.5 (52.5) (9.8) (11.4) 59.3 71.4 57.9 81.8 (12.1) 101.8 47.2 65.1 45.8 77.1 Reported EPS (sen) Core EPS (sen) Dividend (sen) 4.6 5.0 0.0 5.7 5.1 6.0 9.3 9.0 0.0 Margin (%): - Core PBT - Core PAT - Effective tax rate 12.9 7.7 42.3 6.5 5.3 17.3 9.7 7.7 20.4 YoY (%) 9MFY16 9MFY17 YoY (%) 83.8 1397.9 1585.1 13.4 93.1 (1229.3) (1372.7) 11.7 (343.1) 7.8 10.4 33.2 5.3 (33.9) (30.3) (10.8) 49.4 142.5 192.6 35.1 38.3 129.8 190.0 46.3 (28.0) (21.7) (42.7) 96.9 106.1 120.8 149.9 24.0 82.7 108.1 147.3 36.2 63.4 75.3 (100.0) 102.6 79.6 na % pts 3.2 2.4 3.1 % pts (3.2) (0.0) (21.9) 24.1 21.6 6.0 9.3 7.7 15.2 29.7 29.2 6.0 12.0 9.3 22.2 23.2 35.3 0.0 % pts 2.7 1.6 7.0 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, November 27, 2017, the analyst, Ooi Beng Hooi, 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
19. RESULTS UPDATE Monday , November 27, 2017 FBMKLCI: 1,717.23 Sector: Building Materials THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Chin Hin Berhad TP: RM1.36 (+10.6%) Last Traded: RM1.23 Manufacturing segment remains the driving force Ooi Beng Hooi Tel: +603-2167 9612 Buy benghooi@ta.com.my Results Review CHINHIN’s 9MFY17 core profit of RM21.5mn, after excluding the listing expenses of RM82k, came in below expectations at 46.7% of our full-year forecast and 43.2% of consensus estimate. The variance was largely due to lower contribution from the distribution of building material, and ready-mixed concrete business as well as losses incurred by wire mesh segment. YoY, 9MFY17 core profit dropped 22.6% to RM21.5mn, resulting from the 4.4% decline of revenue to RM759.7mn and margin compression. The administration expenses increased 13.6% YoY to RM42.0mn after taking into account of the newly acquired companies’ operation cost. Nevertheless, the lacklustre results were cushioned by higher revenue and PBT growths in the manufacturing of Autoclaved Aerate Concrete (AAC) and precast products which grew 42.5% to RM133.2mn and 76.8% to RM17.2mn respectively. QoQ, 3QFY17 core profit was 16.7% lower at RM6.1mn despite the revenue increased 10.0% to RM260.9mn. The margin was generally compressed by higher raw material cost especially on the steel-related products. In addition, taxation was slightly higher due to under provision of corporation tax and deferred tax in the prior year. Impact Following the weaker-than-expected results, adjustments are made to reflect the higher production costs and slightly lower plant utilisation rate in manufacturing segment as well as lower contribution from distribution of building materials and ready-mixed concrete business as the outlook for property industry remains challenging. All in, earnings forecasts for FY17/FY18/FY19 were cut by 30.8%/13.5%/1.1% respectively. Outlook The manufacturing of AAC and precast products segment will remain the core driver to support the group’s earnings due to strong market demand of AAC products. Besides, the new AAC plant at Johor is expected to commerce in 1Q18 with additional capacity of 600,000m3 is poised to benefit from government’s initiative on promoting the use of Industrialised Building System. www.taonline.com.my Share Information Bloomberg Code Bursa Stock Code Listing Share Cap (mn) Market Cap (RMmn) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) CHIN MK CHINHIN 5273 Main Market 556.4 684.4 1.49/0.845 1366.2 29.1 1.20 Divine Inventions - 47.72 Chiau Beng Teik- 12.16 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 (30.8) (13.5) 31.8 54.2 49.7 64.0 64.0 84.8 Buy (Maintained) Financial Indicators Net Debt / Equity (%) CFPS (sen) Price / CFPS (x) ROA (%) NTA/Share (RM) Price/NTA (x) FY17 56.8 (1.3) (94.3) 3.9 0.7 1.8 FY18 41.4 (0.2) (573.7) 6.3 0.8 1.6 % of FY 46.7 43.2 Below Below CHINHIN (6.8) (7.5) (8.9) 41.4 FBM KLCI (1.7) (2.7) (3.1) 5.5 Scorecard vs. TA vs. Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBMKLCI We expect manufacturing of wire mesh and metal roofing to recover in 1QFY18 once all the outstanding order book that secured prior to the implementation of the safeguard measure duties is delivered. Valuation We lower the target price to RM1.36 (from RM1.58 previously) based on 14x CY18 earnings Nevertheless, we reiterate Buy recommendation on Source: Bloomberg Page 1 of 3
20. 27-Nov-17 the stock as we believe the profitability in FY18 will be lifted up by manufacturing of AAC and precast products segment due to its growing demand and decent margin . Table 1: Earnings Summary (RMmn) Page 2 of 3