Bursa Malaysia Daily Market Report - 27 October

Transcription

1. Friday , 27 October, 2017 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only N ew s 1. D ai l y M arke t C om men t a ry 2. D ai l y B ri ef Fu nd a me n tal Rep o r ts 1. 2. 3. 4. 5. L o t t e C h e m ic a l T it a n H o l d in g B h d : S te rl in g 3 Q 1 7 R e b o u n d O ve rs e a s - C h i n e s e Ba n k in g C o r p . : R e s i li e n t G ro w th M o m e n tu m P u b l ic Ba n k B e r h a d : R e s u l t s W i th in E x p e c ta t io n s S ig n a t u re In t e rn a t io n a l Be rh a d : M a rg in s Wo u ld S ta y W e a k in F Y 1 8 T e n a g a N a s io n a l B e r h a d : Div i de n d Bo n a n z a Su rp r i se Te ch n ic al R ep o rt s 1. D ai l y Te ch n ic a l St o ck Pi cks 2. D ai l y St o ck S cr een 3. Fore i gn Te ch n i ca l St o c k W at ch ( A US , H K & F SS TI) 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 – 2031 6608 www.ta.com.my
2. Daily Market Commentary Friday , 27 October 2017 For Internal Circulation Only TA Research, e-mail : taresearch@ta.com.my KLSE Market Statistics (26.10.2017) (mil) Main Market 1,498.7 Warrants 138.0 ACE Market 862.2 Bond 26.3 ETF 0.0 LEAP 0.1 Total 2,525.4 Off Market 143.4 Volume +/-chg (RMmn) -190.8 1,953.5 17.1 13.4 219.1 157.5 16.8 3.9 -0.07 0.0 -0.23 0.0 2,128.4 74.7 625.9 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP October 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 1,736.80 12,469.70 17,232.41 1,736.50 23,400.86 6,556.77 7,486.50 21,739.78 2,480.63 28,202.38 3,356.25 1,708.84 5,995.85 3,407.57 2,030.35 5,916.30 Off Market (mn) IHH BIMB PUC SKPRES MAYBANK SIME SERBADK BHS VOIR SUNWAY OCR ATLAN AIRPORT HIBISCS TOMYPAK 60.0 30.8 11.1 10.0 5.0 5.0 5.0 3.1 3.0 2.0 1.9 1.5 1.0 1.0 1.0 (RM) @ @ @ @ @ @ @ @ @ @ @ @ @ @ @ 5.65 4.36 0.18 1.75 9.25 9.07 2.60 0.35 1.14 1.70 0.56 4.30 8.32 0.69 0.97 Exchange Rate USD/MYR 4.2320 -0.0036 USD/JPY 113.63 -0.5100 EUR/USD 1.181 0.0036 Review & Outlook Value Value/ +/-chg Volume Up Down 191.5 1.30 307 254 1.9 0.10 52 94 45.3 0.18 56 28 2.4 0.15 4 4 -0.07 1.73 1 2 -0.05 0.19 0 1 0.84 420 383 553.9 4.36 -2.25 -21.03 -1.33 -4.50 % chg % YTD chg -0.13 -0.17 -0.01 -0.26 5.79 8.75 17.10 6.18 CIMB IHH PCHEM GENTING MISC TM RHBBANK HLFG YTLCORP AMBANK Mkt Cap. Chg (RM’mn) (RM) 59,200 54,765 46,551 35,691 31,559 22,923 20,211 19,750 13,970 12,991 -0.05 -0.05 -0.14 -0.02 -0.05 -0.02 -0.03 -0.02 -0.02 -0.05 Positive anticipation for potential goodies in Budget 2018 to be announced this evening should keep stocks afloat with speculation over which sectors likely to benefit to promote rotational buying. On the index, better support below the recent low of 1,733 will be the April low of 1,729, and subsequently 1,700. Immediate overhead resistance will be from the 2 Oct pivot low of 1,750, then at 1,768, the 100-day moving average, followed by the 8 Aug peak of 1,782. Bumi Armada remains in base building mode above the 61.8%FR (70sen) support, pending recovery to the 76.4%FR (75sen), with a confirmed breakout to aim for 79sen and the 5/4/17 peak (82.5sen) ahead. Hook-up momentum indicators on Wah Seong support rebound towards the upper Bollinger band (98sen), with tougher hurdle seen from the 28/8/17 high (RM1.03), while crucial supports are from the 200-day ma (91sen) and 61.8%FR (88sen). 71.40 0.31 18.41 -7.12 -0.11 21.80 39.29 0.53 4.81 32.16 0.15 13.74 -11.87 -0.48 22.41 -100.51 -0.36 28.19 12.37 0.37 16.51 0.00 0.00 10.75 -29.59 -0.49 13.20 10.67 0.31 9.79 5.03 0.25 3.11 10.70 0.18 4.42 Top 10 KLCI Movers Based on Mkt Cap. Counter The local market slipped back into sideways consolidation as investors largely stayed sidelined and cautious ahead of this Friday's keenly anticipated Budget 2018 proposals. The KLCI slid 2.25 points to end at 1,736.80, off an opening high of 1,740.84 and low of 1,734.93, as gainers led losers 420 to 383 on cautious turnover of 2.52bn shares worth RM2.12bn. News Bites • • • • • • Vol. (mn) 6.72 10.87 4.70 7.38 1.67 5.83 0.25 0.40 3.57 1.94 • • • • • • Commodities Futures Palm Oil (RM/mt) 2,814.00 8.00 Crude Oil ($/Barrel) 52.82 0.65 Gold ($/tr.oz.) 1,267.60 -11.00 Important Dates • • Datuk Seri Najib Tun Razak says the fiscal deficit for 2018 will be below 3% and the government's forecast for Brent crude oil to average at USD52 per barrel next year. Public Bank Bhd reported a 13% rise in the 3Q17 net profit at RM1.4bn versus RM1.2bn a year earlier as interest, fee and commission-based income increased. It was within expectations. Tenaga Nasional Berhad's FY17 core net profit of RM7.4bn (-4% YoY) was within our expectations and consensus, accounting for 99%/97% of annualized FY17 forecasts respectively. Lotte Chemical Titan Holding Bhd's 9M17 core profit of RM717mn (29% YTD) was within our expectations, but below consensus accounting for 72% and 65% of full-year forecasts respectively. GD Express Carrier Bhd is buying three properties, located in Ipoh, Perak and Mont Kiara and Q-Sentral here, from Abric Bhd for RM19.3mn to generate rental income for the group. Cocoaland Holdings Bhd has been told to pay an additional tax of RM4.1mn plus a 45% penalty of RM1.8mn, arising from a rejected reinvestment allowance it claimed for the years of assessment 2010 to 2014. Sumatec Resources Bhd is proceeding with its plan to take full control of the Rakushechnoye oil and gas field in Kazakhstan, four months after hinting it may drop the proposal. WZ Satu Bhd has proposed to undertake a bonus issue of up to 159.0mn new shares on the basis of one bonus share for every three existing shares held by qualifying shareholders on an entitlement date to be determined later. Dagang Net Technologies Sdn Bhd plans to expand its business operations to Indonesia next year. UMW Holdings Bhd's majority of outlets currently owned and operated by 51%-owned subsidiary would be transferred to existing Toyota dealers from January next year. TMC Life Sciences Bhd, which currently operates a 200-bed hospital, is aiming for a five-fold growth in the number of beds to 1,100 beds, expected to be ready in stages after 2020. PRG Holdings Bhd plans to include its new joint-venture partner, Chinabased Jiangsu Provincial Construction (M) Sdn Bhd, in potential affordable housing projects worth RM5.0bn with Syarikat Perumahan Negara Bhd. The Malaysia Airports Holding Berhad has recorded an 18.0% growth in its food and beverage sector as of September this year that contributed RM200.0mn in total sales at the KLI) and KLIA2 and it is expected to reach RM300.0mn by end of the year. China will not set a target to double GDP from 2021, a senior Communist Party official said, as top leaders look to high-quality growth in the long term. The European Central Bank announced that it will reduce the size of its asset purchases at the start of next year, while extended them for nine months. MTOUCHE - 6:2 Rights Issue - RI of up to 557.5m shares together • with up to 278.8m free detachable warrants. 6 rights shares together with 3 free warrants for every 2 existing shares held, at an issue price of RM0.20 per rights share. Application Closed: 26/10/2017. LISTING ON: 09/11/2017. 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. Friday , October 27, 2017 FBMKLCI: 1,736.80 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Brief Market View, News In Brief: Corporate, Economy, and Share Buybacks Chartist: Stephen Soo Tel: +603-2167-9607 stsoo@ta.com.my www.taonline.com.my M a r k e t V i e w Rotational Buying on Budget Speculation The local market slipped back into sideways consolidation as investors largely stayed sidelined and cautious ahead of this Friday’s keenly anticipated Budget 2018 proposals. The KLCI slid 2.25 points to end at 1,736.80, off an opening high of 1,740.84 and low of 1,734.93, as gainers led losers 420 to 383 on cautious turnover of 2.52bn shares worth RM2.12bn. Better Support at 1,729, Resistance at 1,750 Positive anticipation for potential goodies in Budget 2018 to be announced this evening should keep stocks afloat with speculation over which sectors likely to benefit to promote rotational buying. On the index, better support below the recent low of 1,733 will be the April low of 1,729, and subsequently 1,700. Immediate overhead resistance will be from the 2 Oct pivot low of 1,750, then at 1,768, the 100-day moving average, followed by the 8 Aug peak of 1,782. Buy Bumi Armada & Wah Seong Bumi Armada remains in base building mode above the 61.8%FR (70sen) support, pending recovery to the 76.4%FR (75sen), with a confirmed breakout to aim for 79sen and the 5/4/17 peak (82.5sen) ahead. Hook-up momentum indicators on Wah Seong support rebound towards the upper Bollinger band (98sen), with tougher hurdle seen from the 28/8/17 high (RM1.03), while crucial supports are from the 200-day ma (91sen) and 61.8%FR (88sen). Asian Markets Fluctuate On Corporate Earnings Jitters Asian corporate results were patchy Thursday following the biggest declines in seven weeks on Wall Street as uneven corporate earnings kept traders on edge ahead of a European Central Bank meeting. In stateside overnight, stocks closed lower on disappointing earnings releases, with the Dow Jones industrial average recording its largest single-day fall since Sept. 5. Corporate earnings releases were also in the spotlight for markets in the region. Notable names on the earnings calendar included SK Hynix, OCBC, Hyundai Motors, NTT DoCoMo and China Vanke. Additionally, investors were displaying caution ahead of anticipated comments from the European Central Bank later Thursday on scaling down bond purchases. The Nikkei 225 edged up 0.15 percent, or 32.16 points to close at 21,739.78. Financials and most automakers rose, and shares of messaging service Line closed up 16.73 percent after it reported earnings. Across the Korean Strait, the Kospi declined 0.48 percent to close at 2,480.63 as investors digested quarterly earnings reports from blue-chip names, while the Australia’s S&P/ASX 200 reversed early losses to close up 0.18 percent at 5,916.3. The heavily weighted financials sub-index erased early losses to close higher by 0.08 percent. China’s bluechip index powered to a fresh 28-month high on Thursday, underpinned by stellar earnings reports from companies such as liquor maker Moutai and as investors expect Beijing to push forward “Belt and Road” projects. The blue-chip CSI300 index rose 0.4 percent, to 3,993.58, while the Shanghai Composite Index added 0.3 percent to 3,407.57 points. Dow Bounce Back On Upbeat Corporate Earnings The Dow and S&P 500 advanced on Thursday after several companies reported upbeat earnings and European Central Bank official’s unveiled their bond-buying program, but gains were curbed and the Nasdaq lost ground on a drop in the healthcare sector. DowDuPont Page 1 of 9
4. 27-Oct-17 was up 2 .8 percent as the biggest boost to the S&P 500. It forecast third-quarter profit well above Wall Street’s expectations ahead of the combined company’s first earnings report next week. Twitter's stock rose 18.5 percent after the social media company posted earnings per share and revenue that beat Wall Street expectations. However, the healthcare sector, off 1.03 percent, led lower by a 16.4 percent plunge in Celgene the biggest drag on the S&P 500 and the Nasdaq. News related to the two biggest central banks also dominated Wall Street. Earlier in the session, ECB President Mario Draghi provided details on the central bank’s plan to reduce stimulus, while promising to maintain near-zero rates for as long as necessary. The markets are also closely monitoring President Donald Trump’s coming pick to head the Federal Reserve after Chairwoman Janet Yellen’s term ends in February. Yellen is out of the race for the top spot, according to two reports on Thursday, leaving Fed Gov. Jerome Powell and Stanford University economist John Taylor as front-runners. The Dow Jones Industrial Average rose 71.40 points, or 0.31 percent, to 23,400.86, the S&P 500 gained 3.25 points, or 0.13 percent, to 2,560.40 and the Nasdaq Composite dropped 7.11 points, or 0.11 percent, to 6,556.77. 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 Friday, October 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 – 2031 6608 www.ta.com.my Page 2 of 9
5. 27-Oct-17 N e w s I n B r i e f Corporate GD Express Carrier Bhd (GDex) is buying three properties, located in Ipoh, Perak and Mont Kiara and Q-Sentral here, from Abric Bhd for RM19.3mn to generate rental income for the group, as well as for business expansion purposes. GDex's wholly-owned subsidiary GD Facilities & Assets Management Sdn Bhd has entered into a conditional share sale agreement with Abric to acquire the entire stake in Abric Properties Sdn Bhd that owns the three properties. (The Edge Markets / Bursa Malaysia) Cocoaland Holdings Bhd has been told to pay an additional tax of RM4.1mn plus a 45% penalty of RM1.8mn, arising from a rejected reinvestment allowance it claimed for the years of assessment 2010 to 2014. The snacks and candy maker said its wholly-owned subsidiary Cocoaland Industry Sdn Bhd has been served with a letter from the Inland Revenue Board of Malaysia dated Oct 19 this year on the said tax. (The Edge Markets) Sumatec Resources Bhd is proceeding with its plan to take full control of the Rakushechnoye oil and gas (O&G) field in Kazakhstan, four months after hinting it may drop the proposal. The group announced this in a filing with Bursa Malaysia, saying that it will pay RM1.6bn to assume full ownership of the O&G field. (The Edge Markets / Bursa Malaysia) WZ Satu Bhd has proposed to undertake a bonus issue of up to 159.0mn new shares on the basis of one bonus share for every three existing shares held by qualifying shareholders on an entitlement date to be determined later. The proposed bonus issue is intended to reward its shareholders, it added. In a filing with Bursa Malaysia, WZ Satu said the proposed bonus issue will be implemented after the completion of the proposed disposal by the company of its wholly-owned subsidiary Weng Zheng Trading Sdn Bhd (WZ Trading) to Tan Jing Xin for RM22.8mn cash. (The Edge Markets / Bursa Malaysia) GoHalal e-commerce platform operator, Dagang Net Technologies Sdn Bhd (Dagang Net), plans to expand its business operations to Indonesia next year. Executive director Datuk Samsul Husin said towards this end, the company also planned to introduce products specific to the country, with a focus on quality. Dagang Net is a subsidiary of Dagang Nexchange Bhd, a company listed on Bursa Malaysia and primarily engaged in the oil, gas and energy sector. (StarBiz) UMW Holdings Bhd’s subsidiary UMW Toyota Motor Sdn Bhd (UMWT) is embarking on a network reform programme to strengthen its retail operations. In a statement, UMW said a majority of outlets currently owned and operated by 51%-owned UMWT would be transferred to existing Toyota dealers from January next year. Ravindran Kurusamy, who became UMWT president on Jan 1 this year, said it was important for UMWT to continue achieving high customer satisfaction standards. (StarBiz) TMC Life Sciences Bhd (TMC) is now at a high growth stage with plans in place for capacity expansion to add more beds and medical suites, said group chief executive officer Roy Quek. He said the company, which currently operates a 200-bed hospital, was aiming for a five-fold growth in the number of beds to 1,100 beds, expected to be ready in stages after 2020. (StarBiz) Over 30 million AirAsia X Berhad guests have flown to over 25 destinations in different regions including the United States since the airline’s inception in November 2007, said AirAsia X group chief executive officer, Datuk Kamarudin Meranun. In a statement, he said AirAsia X’s 10th anniversary was a memorable milestone with a lot to celebrate as it was an airline that many thought would not succeed in the beginning. (StarBiz) Page 3 of 9
6. 27-Oct-17 PRG Holdings Bhd plans to include its new joint-venture partner , China-based Jiangsu Provincial Construction (M) Sdn Bhd (JPC), in potential affordable housing projects worth RM5.0bn with Syarikat Perumahan Negara Bhd (SPNB). PRG group managing director Datuk Lua Choon Hann said that most of the funding for the projects would come from JPC. He said after the signing of a collaboration agreement between PRG and JPC that the parties would be appointing the directors for the JV entity, Premier JPC Sdn Bhd. (StarBiz / Bursa Malaysia) The Malaysia Airports Holding Berhad (MAHB) has recorded an 18.0% growth in its food and beverage sector as of September this year. This contributed RM200.0mn in total sales at the Kuala Lumpur International Airport (KLIA) and KLIA2 and is expected to reach RM300.0mn by end of the year. MAHB senior general manager of commercial services, Mohammad Nazli Abdul Aziz, said the introduction of China's e-wallet system, Alipay in July this year has managed to boost the arrival of mainland Chinese tourists in Malaysia. (New Straits Times) Lotte Chemical Titan Holding Bhd (LCT) net profit for the third quarter ended Sept 30, 2017 fell to RM230.3mn from RM348.3mn a year earlier, due to lower sales volume and higher unit production cost. In a filing to Bursa Malaysia, LCT said revenue for the quarter increased RM200k YoY to RM2.0bn. Earnings per share fell to 10.42 sen from 20.16 sen in the previous year. Reviewing its performance, LCT said the overall market started off moderately in 3Q17 after the Hari Raya holidays. (The Edge Markets / Bursa Malaysia) Public Bank Bhd reported a 13% rise in third quarter net profit at RM1.4bn versus RM1.2bn a year earlier as interest, fee and commission-based income increased. In a statement to Bursa Malaysia, Public Bank said revenue rose to RM5.3bn in the third quarter ended Sept 30, 2017 (3QFY17) from RM5.0bn. Public Bank said 9MFY17 net profit rose to RM4.0bn from RM3.7bn a year earlier. Revenue was higher at RM15.5bn compared to RM15.0bn. (The Edge Markets / Bursa Malaysia) TRIplc Bhd net profit for the first quarter ended Aug 31, 2017 surged to RM6.2mn from RM1.6mn a year earlier, driven by two concessions' income of maintenance activities. In a filing to Bursa Malaysia, TRIplc said its revenue for the quarter jumped to RM22.4mn from RM10.9mn a year ago. Reviewing its performance, TRIplc said its concession revenue of RM11.7mn and RM10.6mn were mainly contributed by revenue recognition for UiTM Zone 1 Phase 3 (UiTM-ZIP3) and UiTM Phase 2 (UiTM-Z1P2), Puncak Alam campus project respectively. It said other revenue recorded was RM90,000 generated from rental of a factory. (The Edge Markets / Bursa Malaysia) Tenaga Nasional Bhd (TNB) reported a 2.4% YoY decline in net profit for its fourth financial quarter ended Aug 31, 2017 (4QFY17) to RM1.7bn, due to an increase in operating expenses. Earnings per share fell to 30.38 sen from 31.22 sen a year ago. uarterly revenue, however, grew 10.9% YoY to RM12.5bn 4QFY17 The national utility also proposed a final dividend of 44 sen per share amounting to RM2.5bn. The book closure and payment dates are to be announced later. This brings its total payout for the year to 61 sen per share or RM3.5bn — a record-high annual dividend payout. (The Edge Markets / Bursa Malaysia) Ancom Bhd’s net profit for the first financial quarter ended Aug 31, 2017 (1QFY17) surged 60.2% YoY to RM1.1mn, driven by its agriculture and industrial chemical businesses. Earnings per share rose to 0.52 sen from 0.32 sen a year ago. Quarterly revenue also increased 17.8% YoY to RM419.5mn in 1QFY17, primarily driven by the aforementioned businesses. (The Edge Markets / Bursa Malaysia) Pavilion Real Estate Investment Trust’s (Pavilion REIT) net property income dropped 3.2% YoY to RM78.2mn for the third quarter ended Sept 30, 2017, due to higher property operating expenses. Pavilion REIT declared a distribution per unit of 1.96 sen. Quarterly revenue grew 3.2% YoY to RM121.4mn, mainly contributed by the rental income from the Page 4 of 9
7. 27-Oct-17 Pavilion Kuala Lumpur Mall ’s tenants after the repositioning exercise. (The Edge Markets / Bursa Malaysia) Guocoland (M) Bhd’s net profit rose fourfold to RM1.1mn in the first financial quarter ended Sept 30, 2017 (1QFY18) from RM265k a year ago, mainly due to contribution from its residential project in Damansara City. Earnings per share increased to 0.16 sen from 0.04 sen in 1QFY17. Quarterly revenue nearly tripled to RM157.6mn in 1QFY18. (The Edge Markets / Bursa Malaysia) Page 5 of 9
8. 27-Oct-17 N e w s I n B r i e f Economy Asia PM Says Fiscal Deficit For 2018 Below 3 % Datuk Seri Najib Tun Razak says the fiscal deficit for 2018 will be below 3%. The Prime Minister, who will table the Budget 2017/2018 proposals in Parliament on Friday, also said the government's forecast for Brent crude oil to average at USD52 per barrel next year. For 2017, the average per barrel was USD50. Najib also said that Alibaba founder Jack Ma will be present at the opening of the Digital Free Trade Zone (DFTZ) on Nov 3. The DFTZ plan is part of the government's national eCommerce Strategic Roadmap where it targets to double the country's e-Commerce growth from 10.8% in 2016 to 20.8% by 2020. Essentially, the DFTZ will involve the setting up of physical and virtual to enable businesses to connect with each other, with emphasis on the small and medium enterprises (SMEs). (The Star) Chinese Party Official Says Beijing Will Not Set Target to Double GDP from 2021 China will not set a target to double gross domestic product (GDP) from 2021, a senior Communist Party official said, as top leaders look to high-quality growth in the long term. Yang Weimin, vice minister of the Office of the Central Leading Group on Financial and Economic Affairs, told a news conference the government will not solely pursue economic growth and will emphasize the quality of its growth. A shift away from the kinds of ambitious long-term growth targets Chinese policymakers have set around key leadership summits would be a departure from past practice and mark a new strategy for longer-term economic development. China aims to double GDP and per capita income by 2020 from 2010 levels, a target set in 2012, and growth is on track to hit those goals. The International Monetary Fund (IMF) and many economists have urged Beijing to lower or do away with official growth targets altogether to reduce the country's reliance on debt-fueled stimulus and get higher quality growth. (Reuters) Australia Export Prices Decline 3.0% In Q3 Export prices in Australia skidded 3.0% on quarter in the third quarter of 2017, the Australian Bureau of Statistics said. That beat forecasts for a decline of 4.0% following the 5.7% drop in the three months prior. The fall was driven by lower prices received for coal, coke and briquettes (-7.4%), metalliferous ores and metal scrap (-1.5%) and gas, natural and manufactured (-4.0%). On a yearly basis, the export price index spiked 14.2%, driven by coal, coke and briquettes (62.1%). Import prices were down 1.6% on quarter, missing slightly forecasts for a decline of 1.5% following the 0.1% contraction in the second quarter. The fall was driven by lower prices paid for telecommunication and sound recording equipment (7.8%), petroleum, petroleum products and related materials (-2.0%) and office and automatic data processing machines (-4.7%). On a yearly basis, the import price index fell 0.4%, driven by telecommunications and sound recording equipment (-15.9%). (RTT News) Singapore Industrial Production Growth Slows Less than Forecast Singapore's industrial production growth eased at a slower-than-expected pace in September, data from the Economic Development Board showed. Manufacturing output expanded strongly by 14.6% year-over-year in September, but slower than the 19.5% surge in August. Economists had expected the growth to moderate to 10.0%. The measure has been rising since August last year. Excluding biomedical manufacturing, output advanced by 16.1%. All manufacturing clusters, except for transport engineering, recorded output growth in September. Month-on-month, manufacturing output dropped a seasonally adjusted 0.5 percent from August, when it rose by 0.6%. However, that was well below the 7.3% fall expected by economists. It was the first decline in four months. (RTT News) Page 6 of 9
9. 27-Oct-17 Japan Producer Prices Rise 0 .9% on Year in September Producer prices in Japan were up 0.9% on year in September, the Bank of Japan said. That exceeded expectations for 0.8%, which would have been unchanged from the August reading. On a monthly basis, producer prices gained 0.1% after sliding 0.2% in August. For the third quarter of 2017, producer prices were up 0.1% on quarter and 0.8% on year. (RTT News) United States U.S. Jobless Claims Rose Last Week The number of Americans filing applications for new unemployment benefits rose last week, after falling to the lowest level in 44 years in mid-October. Initial jobless claims, a proxy for layoffs across the U.S., increased by 10,000 to a seasonally adjusted 233,000 in the week ended Oct. 21, the Labor Department said. Economists surveyed by The Wall Street Journal expected 235,000 new claims last week. Puerto Rico and the U.S. Virgin Islands continue to experience power outages and infrastructure damage because of recent hurricanes, causing many applying for unemployment benefits to submit paper applications, a Labor Department economist said. This caused what usually would have been a large spike in claims after the storms to slow to a trickle, with unemployment benefit applications falling to their lowest level in 44 years in mid-October. Jobless claims data can be volatile. The four-week moving average, a steadier measure, dropped 9,000 to 239,500 last week. (The Wall Street Journal) U.S. Pending Home Sales Weaker than Forecast, Held Back by Irma A gauge of contract signings to purchase previously-owned U.S. homes was unchanged in September at the lowest level since the start of 2016 as Hurricane Irma depressed sales in the southeast and a limited number of listings restrained activity elsewhere, according to data released from the National Association of Realtors in Washington. Index held (est. 0.5% gain) at 106 after a 2.8% decline. Gauge dropped 5.4% from September 2016 on unadjusted basis, the biggest year-over-year decrease since April. Contract signings fell in the South and rose in the other three regions. The data reflect volatility in the wake of hurricanes Irma and Harvey. While activity in the Houston area has rebounded since Harvey in late August, sales last month were weighed down in the South by Irma, the Realtors group said. Outside of the storms’ effects, the housing market is being hindered by a lack of properties that has driven up prices. Sales of homes listed for less than $250,000 are down from last year, while those at the upper end of the bracket are “up solidly,” the NAR said. Nonetheless, steady hiring, easier credit availability and borrowing costs still near historically low levels remain sources of support for the housing recovery. Purchases rose 1.2% in the Northeast, 1.4% in the Midwest and 1.9% in the West. Contract signings dropped 2.3% in the South. (Bloomberg) Europe and Uni ted Kingdom ECB Unveils "Lower For Longer" Taper Plan The European Central Bank sprung no surprises as it announced that it will reduce the size of its asset purchases at the start of next year, while extended them for nine months, the "lower for longer" style of tapering that economists had expected a dovish Mario Draghi to deliver. Monthly asset purchases under the asset purchase programme, or APP, will continue at the current monthly pace of EUR 60 billion until the end of December 2017, the bank said in its statement. From January 2018, the net asset purchases will be reduced to a monthly pace of EUR 30 billion, which will continue until the end of September 2018, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim, the bank added. Without announcing an end-date for asset purchases, the ECB has retained the room for tweaking or extending them in future if the euro area economic outlook worsens. The ECB is scaling down the size of asset purchases for a second time as it had reduced the volume in March this year from EUR 80 billion. The bank also kept all its three interest rates unchanged for a thirteenth consecutive policy session. The main refi rate was held at a record low zero percent and the deposit rate at -0.40%. The marginal lending facility rate was kept at 0.25%. The ECB retained the guidance on both interest rates and asset purchases that may help to ease the upward pressure on the euro and bond yields. (RTT News) Page 7 of 9
10. 27-Oct-17 Eurozone M3 Growth Rises ; Private Sector Credit Expands Eurozone broad money supply rose at a faster pace and private sector credit logged a stable growth in September, data from the European Central Bank showed. The broad monetary aggregate M3 climbed 5.1% year-on-year, slightly faster than the 5% increase seen in August. M3 was forecast to grow again by 5% in September. The annual growth rate of credit to the private sector came in at 2.8% in September, the same as in August. At the same time, adjusted loans to the private sector grew 2.7% after rising 2.6%. In particular, loans to households rose at a steady pace of 2.7% in September, while the growth in loans to nonfinancial corporations improved to 2.5% from 2.4% in August. (RTT News) U.K. Retail Sales Plunge at Fastest Annual Pace in Eight Years U.K. retail sales are falling at the fastest pace since the depths of the recession in 2009 and worries about the housing market could exacerbate the weakness in consumer spending seen this year. The Confederation of British Industry said its measure of sales plunged to minus 36 in October -- the lowest since March 2009 -- from a positive 42 in September. Sales for the time of the year were slightly below the usual seasonal rates, it said. Faster inflation has put the squeeze on shoppers this year, and a separate report suggests a cooling housing market could further dampen consumers’ enthusiasm for spending. YouGov and the Centre for Economics and Business Research said while their headline sentiment measure rose this month, confidence in the housing market weakened. For Bank of England policy makers, all this may play into their thinking as they prepare for a crucial meeting next week. While they’ve signaled that an interest-rate increase may be needed soon, a rate hike -- even a small one -- could also have an impact on spending habits, particularly for those concerned about the cost of their mortgage. (Bloomberg) German GfK Consumer Sentiment to Fall in November German consumer confidence is set to fall in November, survey data from market research group GfK showed. The forward-looking consumer sentiment index fell unexpectedly to 10.7 in November from 10.8 in October. The score was forecast to remain unchanged at 10.8. The indicator dropped slightly for the second time in a row. However, GfK said consumer sentiment remains good. Both economic expectations and propensity to buy improved in October. In contrast, income expectations fell for the second time in a row. The economic expectations indicator rose notably by 10.1 points to 43.5 in October. Meanwhile, the income expectations dropped 4 points to 48.7. Nonetheless, the score rose by almost 4 points from the previous year. Despite slightly muted income prospects, consumer confidence continued to be high in fall of 2017. Willingness-to-buy gained 2.2 points to 59.2 points in October. The research group confirmed its forecast that real private consumption will grow by at least 1.5% this year. GfK sees certain risks to German consumption situation, mainly from the international environment. These are the faltering Brexit negotiations, tensions in North Korea and future US trade policy. (RTT News) Page 8 of 9
11. 27-Oct-17 Share Buy-Back : 26 October 2017 Company Bought Back Price (RM) Hi/Lo (RM) 2.28 1.53/1.49 1.06/1.04 2.30/2.28 1.53/1.48 1.06/1.04 DAIBOCI 2,400 E&O 641,700 UNIMECH 13,400 Source: Bursa Malaysia Total Treasury Shares 634,500 9,500,747 5,960,510 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 – 2031 6608 www.ta.com.my Page 9 of 9
12. 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 26-Oct-17 AUTOMOBILE BAUTO 2.04 2.50 0.94 10.2 14.3 20.0 14.2 5.7 5.6 2.31 -11.7 1.84 10.9 MBMR 2.05 2.09 0.94 20.7 23.2 9.9 8.8 2.0 2.3 2.64 -22.3 2.01 2.0 -4.2 -4.2 PECCA 1.41 1.69 na 7.8 11.1 18.1 12.7 3.5 3.9 1.94 -27.3 1.39 1.4 -11.3 UMW 5.43 5.04 1.39 19.7 30.6 27.5 17.7 2.4 3.7 6.08 -10.7 4.09 32.7 28.6 BANKS & FINANCIAL SERVICES ABMB 3.72 4.80 1.37 33.1 30.6 11.2 12.2 4.3 4.3 4.49 -17.1 3.60 3.3 0.0 AFFIN 2.57 3.00 0.87 27.6 27.9 9.3 9.2 3.1 3.1 3.00 -14.3 2.15 19.5 7.5 AMBANK 4.31 5.70 1.20 43.9 48.6 9.8 8.9 4.1 4.2 5.70 -24.4 3.90 10.5 0.0 CIMB 6.05 8.00 1.48 49.6 55.2 12.2 11.0 4.1 4.6 7.08 -14.5 4.49 34.7 34.1 HLBANK 16.12 17.50 0.59 104.9 114.2 15.4 14.1 2.8 2.8 16.30 -1.1 12.80 25.9 19.4 MAYBANK 9.24 10.20 0.97 69.6 75.9 13.3 12.2 5.4 5.4 9.86 -6.3 7.63 21.1 12.7 PBBANK 20.48 23.60 0.61 137.2 142.4 14.9 14.4 2.7 2.8 20.90 -2.0 19.40 5.6 3.9 RHBBANK 5.04 5.80 1.41 50.6 55.0 10.0 9.2 3.0 3.0 5.59 -9.8 4.58 10.0 7.0 BURSA 10.00 11.10 0.77 40.2 39.0 24.9 25.7 5.2 3.4 10.98 -8.9 8.08 23.7 14.7 CONSTRUCTION BPURI 0.38 0.38 0.54 4.7 4.6 8.1 8.3 0.0 0.0 0.50 -24.0 0.33 16.9 -12.6 GADANG 1.25 1.75 0.46 15.2 14.3 8.2 8.8 2.4 2.4 1.37 -8.8 0.89 41.2 19.0 GAMUDA 5.16 6.00 0.96 27.8 34.5 18.6 15.0 2.3 2.3 5.52 -6.5 4.65 11.0 7.9 IJM 3.30 3.50 0.89 15.3 20.2 21.6 16.3 2.3 2.9 3.61 -8.6 3.07 7.5 3.1 PESONA 0.53 0.64 0.67 4.6 6.9 11.6 7.7 4.7 4.7 0.74 -27.9 0.43 24.7 -12.4 60.0 SENDAI 0.92 0.58 1.31 8.2 9.6 11.2 9.6 1.1 1.1 1.39 -33.8 0.49 87.8 SUNCON 2.29 2.65 na 12.7 14.7 18.1 15.6 2.4 2.4 2.43 -5.8 1.56 46.8 34.7 WCT 1.52 1.61 0.97 11.5 12.5 13.2 12.2 2.0 2.0 2.48 -38.6 1.49 2.0 -11.6 LITRAK 5.87 6.26 0.31 41.9 45.7 14.0 12.9 4.3 4.3 6.15 -4.6 5.57 5.4 -0.2 ANNJOO 3.75 4.40 1.23 41.3 45.5 9.1 8.2 5.5 5.9 3.86 -2.8 1.96 91.3 72.8 CHINHIN 1.31 1.58 na 8.3 11.3 15.9 11.6 3.1 4.6 1.49 -12.1 0.85 55.0 50.6 WTHORSE 1.96 1.67 0.49 6.7 10.0 29.2 19.7 5.1 5.1 2.19 -10.5 1.92 2.1 -2.5 CARLSBG 15.50 18.06 0.61 79.3 86.2 19.6 18.0 5.1 5.5 15.68 -1.1 13.72 13.0 11.4 HEIM 18.88 19.14 0.46 79.6 84.0 23.7 22.5 3.8 4.0 19.58 -3.6 15.56 21.3 15.3 AEON 2.05 2.23 0.51 6.5 7.5 31.4 27.3 2.0 2.3 2.86 -28.3 1.95 5.1 -20.2 AMWAY 7.22 8.62 0.34 30.6 38.7 23.6 18.7 4.5 4.8 8.18 -11.7 7.05 2.4 -1.5 F&N 25.00 27.41 0.14 121.1 150.9 20.6 16.6 2.8 3.0 26.00 -3.8 22.44 11.4 6.5 HUPSENG 1.18 1.50 0.37 6.5 6.6 18.1 17.8 5.1 5.1 1.28 -7.8 1.13 4.3 2.5 NESTLE 86.60 92.76 0.42 292.7 325.4 29.6 26.6 3.2 3.2 86.80 -0.2 74.12 16.8 10.7 Building Materials CONSUMER Brewery Retail PADINI 4.48 4.67 0.57 23.5 28.0 19.1 16.0 2.6 2.8 4.80 -6.7 2.26 98.2 76.4 POHUAT 2.02 2.50 0.65 27.4 27.4 7.4 7.4 3.0 4.0 2.08 -2.9 1.53 32.0 16.8 QL 3.85 3.26 0.34 12.1 12.8 31.9 30.0 1.1 1.2 4.03 -4.5 3.26 18.3 15.6 SIGN 0.85 1.08 0.89 6.7 8.6 12.7 9.9 2.9 4.1 1.07 -20.6 0.78 9.0 6.9 40.78 52.08 1.26 198.6 187.4 20.5 21.8 4.9 4.9 51.04 -20.1 40.61 0.4 -7.7 GENTING 9.33 11.51 1.52 44.7 53.3 20.9 17.5 1.5 1.7 10.00 -6.7 7.50 24.4 17.4 GENM 5.13 6.53 1.53 22.0 28.4 23.3 18.1 1.6 1.8 6.38 -19.6 4.42 16.1 13.5 BJTOTO 2.37 3.34 0.81 18.4 21.6 12.9 11.0 5.9 6.8 3.22 -26.4 2.25 5.3 -19.9 LUSTER 0.13 0.15 2.11 0.4 0.3 35.6 35.9 0.0 0.0 0.16 -21.9 0.05 150.0 150.0 IHH 5.65 6.41 0.71 7.9 13.1 71.2 43.2 0.6 0.6 6.60 -14.4 5.54 2.0 -11.0 KPJ 1.04 1.17 0.39 3.3 4.1 31.4 25.6 1.5 1.8 1.14 -8.8 0.96 8.1 -0.5 HARTA 7.63 6.87 0.57 17.1 24.6 44.5 31.1 1.1 1.4 7.77 -1.8 4.53 68.4 58.0 KOSSAN 7.21 7.35 0.01 33.9 40.0 21.3 18.0 2.4 2.8 7.36 -2.0 5.62 28.3 9.4 SUPERMX 1.85 1.80 0.22 10.6 15.2 17.5 12.2 1.8 2.4 2.38 -22.3 1.69 9.5 -12.3 TOPGLOV 6.40 6.00 -0.35 26.4 29.4 24.3 21.7 2.3 2.3 6.80 -5.9 4.56 40.4 19.6 KAREX 1.62 1.60 0.25 2.8 4.6 58.1 34.9 1.2 0.7 2.62 -38.2 1.37 18.2 -31.4 SCIENTX 8.76 9.38 0.39 52.3 64.9 16.8 13.5 1.8 2.1 9.85 -11.1 6.50 34.8 30.7 SKPRES 1.74 1.75 0.47 8.3 10.4 21.1 16.8 2.4 3.0 1.85 -5.9 1.24 40.3 34.9 ASTRO 2.84 3.40 1.27 13.2 14.6 21.4 19.5 4.4 4.6 2.94 -3.4 2.47 15.0 9.2 MEDIA PRIMA 0.85 0.60 0.45 0.9 2.8 99.7 30.2 0.8 2.7 1.32 -35.6 0.66 29.8 -26.1 STAR 1.70 1.00 0.64 3.3 4.0 51.3 42.1 24.7 10.6 2.22 -23.3 1.63 4.3 -12.7 Tobacco BAT GAMING Casino NFO HEALTHCARE Hospitals Rubber Gloves INDUSTRIAL MEDIA
13. 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 0.47 0.75 1.14 3.6 4.5 12.9 10.3 2.2 2.2 0.69 -32.6 0.23 106.7 82.4 LCTITAN 5.18 6.66 na 42.8 63.4 12.1 8.2 4.4 4.8 6.53 -20.7 4.14 25.1 -20.3 -20.8 MHB 0.73 0.78 1.70 -2.0 -0.5 na na 0.0 0.0 1.16 -37.5 0.63 16.0 MISC 7.07 6.56 1.07 56.3 46.9 12.6 15.1 4.2 4.2 7.90 -10.5 7.03 0.6 -3.8 PANTECH 0.72 0.69 1.10 4.0 6.1 18.0 11.7 2.5 3.8 0.74 -3.4 0.44 64.4 60.7 PCHEM 7.40 7.62 1.00 44.3 44.7 16.7 16.6 2.6 2.7 7.80 -5.1 6.54 13.1 6.0 SENERGY 1.43 1.66 2.82 6.6 -0.4 21.6 na 0.7 0.0 2.10 -31.9 1.33 7.5 -11.7 SERBADK 2.60 2.77 na 22.1 25.2 11.8 10.3 2.5 2.9 2.76 -5.8 1.51 72.2 73.3 UMWOG 0.28 0.48 1.70 -12.0 -3.5 na na 0.0 0.0 0.92 -69.6 0.27 3.7 -67.2 -18.8 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.38 1.55 1.28 FGV 1.82 1.52 1.94 IJMPLNT 2.85 3.58 0.35 IOICORP 4.48 4.14 1.31 KFIMA 1.69 1.89 0.47 KLK 24.52 26.18 SIME 9.08 9.80 UMCCA 6.65 GLOMAC HUAYANG 11.3 12.3 12.2 11.2 0.0 0.0 1.98 -30.3 1.28 7.8 1.0 2.5 184.1 71.5 2.7 2.7 2.28 -20.2 1.42 28.2 17.4 12.3 14.1 23.2 20.3 2.5 2.8 3.70 -23.0 2.83 0.7 -16.2 17.3 21.0 25.8 21.3 2.1 3.6 4.81 -6.9 4.30 4.2 1.8 19.9 13.3 8.5 12.7 5.3 5.3 1.96 -13.8 1.65 2.4 -0.6 0.79 103.4 120.4 23.7 20.4 2.1 2.4 25.50 -3.8 23.00 6.6 2.2 1.50 34.2 37.3 26.5 24.3 2.5 2.5 9.70 -6.4 7.85 15.7 12.1 7.52 0.42 37.5 31.8 17.7 20.9 3.5 2.6 6.83 -2.6 5.50 20.8 11.4 0.67 0.60 0.51 1.4 5.0 46.3 13.3 4.1 4.0 0.78 -14.1 0.61 9.8 -3.6 0.83 0.96 0.62 17.3 10.2 4.8 8.1 4.8 2.4 1.24 -33.1 0.80 3.7 -26.5 IBRACO 0.87 0.94 na 3.3 10.5 26.7 8.3 2.3 4.6 1.05 -17.1 0.76 15.2 -13.0 IOIPG 1.97 2.23 0.86 18.9 16.9 10.4 11.7 3.0 3.0 2.30 -14.4 1.85 6.6 1.0 MAHSING 1.56 1.76 0.98 14.3 13.5 10.9 11.5 4.2 4.2 1.64 -4.9 1.34 16.4 9.1 SNTORIA 0.75 0.98 0.32 6.2 10.3 12.1 7.2 1.3 1.3 1.00 -25.5 0.69 8.0 -6.9 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 0.67 25.6 22.8 12.9 14.4 2.5 2.5 5.19 -8.3 4.32 10.1 7.7 SPSETIA 3.29 4.10 0.93 11.6 12.7 14.6 13.3 4.3 4.3 4.50 -26.9 3.10 6.1 5.1 SUNWAY 1.69 1.83 0.71 15.8 15.3 12.4 12.8 3.0 3.0 1.96 -13.7 1.24 36.4 31.4 SUNREIT 1.73 1.86 0.72 9.2 10.0 18.7 17.2 5.3 5.8 1.84 -6.0 1.63 6.1 0.6 CMMT 1.45 1.72 0.42 8.1 8.6 17.9 16.8 5.8 6.2 1.72 -15.7 1.40 3.6 -5.2 -27.0 REIT POWER & UTILITIES MALAKOF 1.00 1.22 0.65 6.8 6.9 14.6 14.6 7.0 7.0 1.58 -36.7 1.00 0.5 PETDAG 24.10 21.47 0.67 98.2 102.3 24.5 23.6 3.0 3.2 25.70 -6.2 23.00 4.8 1.3 PETGAS 18.14 19.37 0.87 87.6 100.1 20.7 18.1 3.5 3.9 22.18 -18.2 17.80 1.9 -14.8 TENAGA 14.34 17.38 0.78 175.7 130.0 8.2 11.0 3.1 3.1 14.80 -3.1 13.00 10.3 3.2 YTLPOWR 1.31 1.40 0.73 8.4 11.4 15.6 11.5 3.8 3.8 1.50 -12.7 1.31 0.0 -10.3 11.7 TELECOMMUNICATIONS AXIATA 5.27 5.40 1.31 15.7 16.9 33.7 31.2 1.5 1.6 5.40 -2.4 4.11 28.2 DIGI 4.88 5.20 0.75 19.5 20.0 25.0 24.4 4.0 4.1 5.19 -6.0 4.63 5.4 1.0 MAXIS 5.82 6.10 0.72 26.0 26.2 22.4 22.2 3.4 3.4 6.60 -11.8 5.48 6.2 -2.7 TM 6.10 7.20 0.62 22.6 23.2 27.0 26.3 3.3 3.4 6.69 -8.8 5.81 5.0 2.5 TECHNOLOGY Semiconductor & Electronics ELSOFT 2.59 3.00 0.53 11.3 14.1 22.9 18.4 3.1 3.8 2.95 -12.2 1.27 104.7 84.5 IRIS 0.17 0.25 1.82 -1.3 0.6 na 29.8 0.0 0.0 0.22 -25.0 0.10 65.0 50.0 INARI 2.71 2.75 0.78 11.3 13.0 24.0 20.8 3.6 3.4 2.87 -5.6 1.59 70.1 63.6 MPI 13.96 15.40 0.08 89.5 110.2 15.6 12.7 1.9 1.9 14.52 -3.9 7.20 93.9 88.4 UNISEM 3.98 4.30 0.74 26.9 32.1 14.8 12.4 3.0 3.0 4.25 -6.4 2.27 75.3 68.6 TRANSPORTATION Airlines AIRASIA 3.25 3.76 0.94 44.0 37.6 7.4 8.6 1.2 1.5 3.59 -9.5 2.16 50.5 41.9 AIRPORT 8.38 8.10 1.23 17.3 17.7 48.3 47.3 1.2 1.2 9.45 -11.3 5.91 41.8 38.3 116.6 Freight & Tankers PTRANS 0.32 0.44 na 2.1 2.3 15.3 13.8 2.0 2.2 0.38 -17.5 0.14 123.5 TNLOGIS 1.51 1.80 1.15 12.0 13.6 12.5 11.1 2.8 3.3 1.83 -17.6 1.48 2.0 -3.1 WPRTS 3.73 4.05 0.83 17.1 15.1 21.8 24.7 3.4 3.0 4.45 -16.2 3.58 4.2 -13.3 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 22.35 23.30 1.23 172.9 189.2 12.9 11.8 2.7 2.7 22.4 0.0 14.80 51.0 28.9 OCBC 11.57 12.00 1.19 87.7 92.4 13.2 12.5 5.7 6.7 11.6 -0.3 8.84 38.9 29.7 UOB 24.80 25.40 1.06 192.9 206.5 12.9 12.0 2.8 2.8 24.8 0.0 17.98 37.9 21.6 PLANTATIONS WILMAR 3.34 3.72 0.86 28.9 31.1 11.5 10.7 2.4 2.7 4.0 -16.5 3.08 8.4 -7.0 IFAR 0.47 0.53 1.02 4.9 5.2 9.6 9.0 2.6 2.7 0.6 -21.8 0.44 6.9 -11.4 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
14. RESULTS UPDATE Friday , October 27, 2017 FBMKLCI: 1,736.80 Sector: Oil & Gas THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM6.66 (+28.6%) Lotte Chemical Titan Holding Bhd Last Traded: RM5.18 Sterling 3Q17 Rebound Kylie Chan Sze Zan BUY Tel: +603-2167 9601 kyliechan@ta.com.my Review Lotte Chemical Titan Holding Bhd (TTNP)’s 9M17 core profit of RM717mn (-29% YTD) was within our expectations, but below consensus – accounting for 72% and 65% of full-year forecasts respectively. www.taonline.com.my Share Information Bloomberg Code TTNP MK Stock Code 5284 Listing Main Market Share Cap (mn) TTNP staged a remarkable sequential rebound, where core profit surged 35% QoQ, as plant utilisation recovered to 77% (2Q17: 71%). On top of this, recall that 2Q17 was impacted by water supply interruption for 11 days. Additionally, higher interest income from IPO proceeds, amounting to RM26mn, boosted profits. To a lesser extent, bottomline was also propped up by lower taxes. The stellar comeback was in spite of a dip in 3Q17 volumes from Indonesia. Recall that ethylene feedstock for TTNP’s polyethylene (PE) plants in Indonesia is mainly sourced externally. US capacity shutdowns due to Hurricane Harvey had led to a surge in ethylene pricing. Therefore, TTNP scaled down Polyethylene (PE) production in Indonesia following the dip in PE spreads. To recap, Indonesian PE accounts for 22% of FY16 revenue. Exceptional items excluded from 9M17 core profit include:- 1) PPE writeoffs: RM39mn, 2) Reversal of administration expenses for LC USA: RM15mn, 3) IPO expenses: RM14mn, 4) FX gains: RM28mn, and 5) Fair value gains: RM9mn. YTD bottomline contraction was mainly attributed to:- 1) lower volumes, and 2) higher unit production costs due to the water incident in Apr-17. Recall that in 9M17, there was statutory turnaround (TA) at both of TTNP’s naphtha crackers for a total of 86 days. Additionally, volumes were also affected by the water incident, and reduced output from Indonesia. The above more than offset higher product ASPs (+20% YTD), lower taxes, and increased interest income. 2,273 Market Cap (RMmn) 11,774 52-wk Hi/Lo (RM) 6.53/4.14 12-mth Avg Daily Vol ('000 shrs) 6,279.0 Estimated Free Float (%) 26.0 Beta Major Shareholders (%) n.a. Lotte Group - 75% Forecast Revision (%) FY17 Forecast Revision (%) Core Net Profit (RM mn) Consensus TA/Consensus (%) Previous Rating FY18 (3) (3) 972.6 1,440.2 1,102.6 1,393.8 88.2 103.3 Buy (Maintained) Scorecard % of FY vs TA 72 Within vs Consensus 65 Below Financial Indicators Net Debt/Equity (x) FY17 FY18 Net Cash Net Cash ROA (%) 7.3 10.1 ROE (%) 8.1 11.2 NTA/Share (RM) 5.3 5.7 P/NTA (x) 1.0 0.9 Share Performance Price Change (%) Key Takeaways from Conference Call Management is optimistic to achieve strong utilisation of 90% for its Malaysian plants in 4Q17. This is underpinned by completion of all statutory TA, with no shutdowns scheduled for 4Q17. On a dim note, PE output from Indonesia is expected to be lower due to weak PE margins. TTNP FBMKLCI 1 mth (1.3) (1.6) 3 mth (16.6) (1.7) 6 mth n.a. (1.8) 12 mth n.a. 3.8 (12-Mth) Share Price relative to the FBMKLCI Also, management expects 4Q17 demand to be resilient, underpinned by higher demand from Latin America until the supply from the US market recovers. Recall that US ethylene crackers were shut down in end-3Q17 due to hurricanes. Development of TE3 and PP3 projects are on track with 100% and 42% mechanical completion respectively (Figure 1). TE3’s targeted commercial launch date of 4Q17 remains intact despite a fire incident (refer to report dated 25th Sept 2017). Source: Bloomberg Page 1 of 3
15. 27-Oct-17 TTNP is seeking Bank Negara ’s approval to convert part of its IPO proceeds (circa RM3.5bn) to USD. This is to match capex requirements, which are denominated in USD. According to management, IPO expenses recognized YTD amounts to circa RM83mn, of which RM14mn was charged to Income Statement, and the remainder to balance sheet. TTNP expects a negligible amount to be recognized in 4Q17. This implies that actual expenses will be lower than TTNP’s initial estimate of RM115mn Impact We tweak our dividend assumptions higher following management’s latest guidance of 50% payout in FY17, after deduction of TA expenses. The latter is estimated to total RM300mn. Major changes to our earnings forecasts:- 1) decrease in utilisation of Indonesian plants for FY17-18, and 2) increase in feedstock cost assumptions for FY17-19, in-line with latest price trends. As a result, our FY17-19 forecasts are reduced by 3%-10%. Valuation Following the revision to our forecasts, our TP on TTNP is lowered to RM6.66 (previous: RM6.88) based on unchanged 7x FY18 EV/EBITDA. We maintain Buy on TTNP as we believe sentiment on the stock has now rerated following sustainable and stable operations in 3Q17. TTNP’s multi-year earnings growth story remains intact, with significant new capacity coming on-stream in 2018 (cracker and polypropylene expansion), 2019 (US shale cracker) and 2023 (integrated facility at Indonesia). Furthermore, subdued oil prices in the near-to-medium term provides support to TTNP’s robust margins. Table 1: Earnings Summary FYE Dec (RM mn) 2015 2016 2017E 2018F 2019F Revenue 8,147.8 8,136.6 7,766.1 9,865.8 10,858.2 EBITDA 1,563.4 2,196.8 1,539.1 2,406.5 2,727.4 19.2 27.0 19.8 24.4 25.1 1,050.2 1,710.2 931.8 1,801.2 1,937.6 Reported Net Profit 613.2 1,315.4 819.6 1,440.2 1,549.2 Core Net Profit 681.9 1,391.1 972.6 1,440.2 1,549.2 29.5 60.3 42.8 63.4 68.2 104.0 (29.0) 48.1 7.6 EBITDA margin (%) Pretax Profit Core EPS (sen) Core EPS growth (%) >100 PER (x) 17.5 8.6 12.1 8.2 7.6 DPS (sen) 0.0 0.0 23.0 25.0 27.0 (%) 0.0 0.0 4.4 4.8 5.2 Dividend Yield Page 2 of 3
16. 27-Oct-17 Table 2 : 9M17 Results Analysis Cumulative YE 31 Dec 3Q17 2Q17 QoQ 3Q16 YoY 9M17 9M16 YoY Revenue 2,016.2 1,776.3 13.5 2,005.1 0.6 5,707.0 5,990.3 (4.7) EBITDA 359.1 322.7 11.3 540.8 (33.6) 1,128.9 1,587.9 (28.9) Depreciation (109.8) (112.5) (2.4) (96.4) 14.0 (322.8) (441.4) 23.5 (3.7) >-100 (1.9) >-100 (11.9) (11.5) 3.1 (18.6) (16.0) 15.8 (1.1) >100 (37.1) (4.4) 738.1 11.7 >-100 1,287.0 (41.1) Finance Costs Associates (64.4) (85.6) 75.0 (30.8) Pretax Profit 244.9 (9.3) 127.4 92.2 436.0 (43.8) 758.7 Taxation (14.8) (13.7) 8.0 (87.4) (83.1) (71.9) (262.0) 0.2 (0.1) >-100 (0.3) >-100 (0.7) (0.4) EI Minority Interest Reported Net Profit (72.6) 50.8 230.3 113.6 348.3 (33.9) 686.1 1,024.5 (33.0) 239.6 178.0 34.6 353.6 (32.2) 716.8 1,012.9 (29.2) 10.8 10.3 5.2 20.5 (47.0) 38.5 38.2 0.8 DPS (sen) - - - - - EBITDA Margin 18% 18% 27% 20% 27% Core Net Margin 12% 10% 18% 13% 17% Core Net Profit Core EPS (sen) >100 (5.3) (26.9) Table 3: Projects Update 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 Friday, October 27, 2017, the analyst Kylie Chan Sze Zan who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2031 6608 www.ta.com.my Page 3 of 3
17. RESULTS UPDATE Friday , October 27, 2017 STI: 3,356.25 Sector: Finance THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: S$13.50 Overseas-Chinese Banking Corp. (+16.7%) Last Traded:S$11.57 Resilient Growth Momentum Kaladher Govindan Tel: +603-2167 9609 BUY kaladher@ta.com.my Review OCBC posted a strong set of 9M17 result, spurred by broad-based income growth across geographies and businesses. Although net profit slipped sequentially, YoY growth remained robust as the group’s YTD net profit accelerated to S$3,113mn – exceeding our expectations. Annualised ROE widened to 11.4% in 9M17 from 10.5% a year ago. Net interest income (NII) increased for the second straight quarter in 3Q17. YTD, NII climbed 5.2% YoY to S$3,999mn. The QoQ increase of 2.8% was driven by asset growth and 1 bp rise in the net interest margin (NIM). According to management, NIM broadened by 4 bps YoY owing to an increase in the average loans-to-deposits ratio (LDR) and higher yields from money market placements. Advances in loans were broad-based across most industry segments and key markets. Rising 11% YoY (+1.3% QoQ), loan growth was underpinned by increases in Greater China (+16% YoY, +3% QoQ), Indonesia (+14% YoY, -1% QoQ) and Singapore (+8% YoY, +2% QoQ). By industry, the expansion in loans were spurred by higher housing loans, other consumer-related loans, general commerce, transport, storage and communications as well as loans to the financial sector. Meanwhile, loans and advances in Malaysia softened, contracting 1% YoY (flat QoQ). Non-interest income (non-NII) maintained a healthy upward yearly momentum, unaffected by the sequential contraction of 7.1% QoQ. Compared to 2Q17, fee income slipped 1%. Non-NII also decreased QoQ due to lower dividend income, lower profit from life assurance along with softer net trading income and a loss of S$10mn arising from disposal of subsidiaries and associate. 9M17 non-NII ballooned by close to 20% to S$3,008mn underpinned by improvement in fee income arising from wealth management income, which rose 48% YoY. This was partly attributable to the acquisition of the former wealth and investment management business of Barclays PLC in Singapore and Hong Kong in November 2016. Fee income was also driven by higher fees from Investment Banking and Fund Management. Also boosting non-NII in 9M17 were stronger trading income and income from life and general insurance grew due to improvements in the underlying business and favourable market conditions contributing positively to its investment portfolio. 1H17 total allowances widened to S$493mn from S$421mn a year ago. Sequentially, net allowances improved 7.7%. Nevertheless, net specific allowances (SA) widened by 31% QoQ and 41% YoY as OCBC prudently set aside more SA due to an increase in the number of restructured accounts. Management noted that while these accounts continued to service their repayment obligations, operations remained weak and www.taonline.com.my Share Information Bloomberg Code 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 (%) OCBC SP O39 STI 4,189.2 48,469.0 11.60/8.33 5,366.8 79.8 1.19 Selat Pte Ltd - 11.0 Lee Foundation Singapore - 4.3 Singapore Investments - 3.8 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating Financial Indicators ROE (%) Cost/Income (%) NPL ratio (%) Loan loss coverage (%) BV/ Share (S%) Price/ BV (x) FY17 FY18 8.9 12.6 4001.3 4357.4 3923.0 4271.0 102.0 102.0 Hold (Downgraded) FY17 10.6 42.9 1.0 94.6 9.4 1.2 FY18 10.9 42.9 0.9 124.7 10.1 1.1 % of FY 83.0 79.0 Above Within OCBC 3.7 1.8 18.1 36.4 STI 4.2 0.8 5.7 19.3 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 Source: Bloomberg Page 1 of 3
18. 27-Oct-17 collateral valuations have decline . Annualised credit charge stood at 24 bps, Standing at S$2.98bn, the formation of new non-performing assets (NPA) were lower QoQ. To recap, new NPA accelerated in 2Q partly due to the housing portfolio. YoY, total NPAs were 15% higher mostly due to the downgrade of a few large corporate accounts associated with the oil and gas services sector which remained under stress. The number of O&G NPLs being serviced have reduced from 37% in 2Q to 33% currently. Pro-active steps are being taken to restructure loans based on stress-test results. Exposure to the oil and gas segment stood at around 6% of total customer loans. The NPL ratio for the sector deteriorated slightly to 0.63% from 0.59% in June 2017. Excluding the O&G portfolio, the NPL ratio for the rest of the group’s portfolio improved to 0.63% vs. 0.66% in June 2017. Sequentially, overall NPL ratio and allowance coverage was also stable at 1.3% (4QFY16: 1.3%) and 101% (4QFY16: 100%) respectively. By geography, we note QoQ improvements from Malaysia and Greater China, while Singapore and Indonesia saw NPAs increase to S$963mn (from S$884mn) and S$677mn (from S$628mn). Elsewhere, capital ratios remained relatively stable, with proforma common equity tier 1 (CET1) and total capital ratio at 12.0% and 16.2% respectively. Impact Despite the ongoing weakness in the O&G portfolio, overall asset quality was more robust than we had initially forecasted. As such, we reduce our overall credit charge assumption for FY17/18/19 to 34/28/25 bps from 43/42/33 bps. Additionally, we raise growth projections for non-NII as it exceeds our forecast due to stronger-than-expected fee income. As such, we raise FY17/18/19 net profit to S$4,001.3/4,357.5/4,631.6mn from S$3,673.1/3,869.7/4,208.6mn previously. Outlook OCBC continued to deliver another set of encouraging results, with strong performance driven by the group’s banking, wealth management and insurance operations. As predicted, the group continued to register new highs in wealth management fee income and AUMs, boosted by synergies from the acquisition of Barclay’s wealth business in Asia last year. We believe the group’s diversity of its geographical network and business franchise will continue to drive earnings forward. Amid the headwind of challenges envisaged for the remaining part of the year, asset quality remained resilient. Nevertheless, management remains cautious of a recovery in the oil and gas sector. Sufficient provisions have been set aside. Strong capital and liquidity position should also help the group weather though an increasingly demanding regulatory environment. Valuation We raise TP to S$13.50 from S$12.00 on the back of the increase to our earnings estimates. Valuing the stock at an implied FY18e PBV of 1.3x, we upgrade OCBC from hold to BUY. Page 2 of 3
19. 27-Oct-17 Table 1 : Earnings Summary (RMmn) FYE Dec Net interest income Non-interest income Total operating income Operating expenses Operating profit Net profit EPS (sen) EPS growth (%) Gross div (sen) Div yield (%) FY15 5189.0 3533.0 8722.0 3664.0 5058.0 3903.0 93.2 1.6 36.0 3.1 FY16 5052.0 3437.0 8489.0 3788.0 4701.0 3473.0 82.9 (11.0) 36.0 3.1 FY17F 5656.0 3712.0 9368.0 4015.3 5352.7 4001.3 95.5 15.2 36.0 3.1 FY18F 5994.2 3934.7 9928.9 4256.2 5672.7 4357.4 104.0 8.9 36.0 3.1 FY19F 6402.4 4159.6 10562.1 4596.7 5965.4 4631.6 110.6 6.3 36.0 3.1 Table 2: 9MFY17 Results Analysis (RMmn) YE 31 Dec 3Q FY16 2Q FY17 3Q FY17 QoQ YoY Net interest income 1,234.0 1,382.0 2.8 12.0 3,801.0 3,999.0 5.2 Non interest income 1,345.0 YTD FY16YTD FY17 YoY 970.0 1,053.0 978.0 (7.1) 0.8 2,511.0 3,008.0 19.8 Total income 2,204.0 2,398.0 2,360.0 (1.6) 7.1 6,312.0 7,007.0 11.0 Operating expenses (953.0) (992.0) (1,001.0) 0.9 5.0 (2,807.0) (2,967.0) 5.7 Operating profit 1,251.0 1,406.0 1,359.0 (3.3) 8.6 3,505.0 4,040.0 15.3 Amortisation of intangibles (23.0) (27.0) (26.0) (3.7) 13.0 (72.0) (78.0) 8.3 Allowances (166.0) (169.0) (156.0) (7.7) (6.0) (421.0) (493.0) 17.1 Associates & JVs 105.0 119.0 127.0 6.7 21.0 314.0 361.0 15.0 Tax & non-controlling items (224.0) (246.0) (247.0) 0.4 10.3 (642.0) (717.0) 11.7 Net profit 943.0 1,083.0 1,057.0 (2.4) 12.1 2,684.0 3,113.0 16.0 EPS (sen) 22.5 25.9 25.2 (2.4) 12.1 64.1 74.3 16.0 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 Friday, October 27, 2017, the analyst, 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 – 2031 6608 www.ta.com.my Page 3 of 3
20. RESULTS UPDATE Friday , October 27, 2017 FBMKLCI: 1,736.80 Sector: Finance THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM23.60 (+15.2%) Public Bank Berhad Last Traded: RM20.48 Results Within Expectations Kaladher Govindan Tel: +603-2167 9609 BUY kaladher@ta.com.my Review PBB’s 9MFY17 results came within expectations. YTD net profit resiliently climbed at a stronger pace of 7% YoY (and 5.5% QoQ) to RM3.98bn. PBB’s bottomline accounted for 75% and 76% of ours and consensus full year estimates respectively. ROE stood at 15.4%. Accounting for 77% of our full year forecast, total operating income broadened at a stronger sequential pace of 2.8% QoQ and 7.6% YoY. However, PBT widened at a softer pace of 3.3% QoQ due to the jump in total allowances. Noting that the change was underpinned by seasonal factors, management noted that overall asset quality remained intact as total allowances YTD contracted by 20.8% YoY. www.taonline.com.my Share Information Bloomberg Code PBK MK Stock Code 1295 Listing Main Market 3861.5 Share Cap (mn) Market Cap (RMmn) 79,083.5 20.90/19.40 52-wk Hi/Lo (RM) 4695.4 12-mth Avg Daily Vol ('000 shrs) 57.4 Estimated Free Float (%) 0.61 Beta Major Shareholders (%) Consolidated Teh Holdings - 22.9 EPF - 14.3 Forecast Revision Net interest income (NII) expanded at a decent pace of 1.3% QoQ and 8.0% YoY to RM5.53bn. Domestic loans led growth in advances, accelerating at an annualized rate of 4.6%. Loan growth for the entire group rose by 3.3%. PBB’s domestic loans market share stood unchanged at 17.7% (2016: 17.7%). Sequentially, net interest margin (NIM) slipped 2 bps. Yearly, NIM jumped to 2.24% from 2.17%, premised on concerted efforts in managing the group’s funding position more efficiently, i.e. balancing between growth and rising cost of deposits. PBB’s total and domestic deposits remained healthy with total and domestic deposit achieved an annualised growth of 5.7% and 5.4% respectively. PBB’s market share in the customer deposit space stood at 16.8%, slipping 10 bps from 16.9% in FY16. Amid stronger deposit growth, the group’s gross loan to fund ratio softened to 88.6% (FY16: 90.8%). Non-interest income (non-NII) advanced 8.4% QoQ and 7.6% YoY to RM1.68bn. PBB reported higher fee and commission income (+11.9% YoY). An increase in net gains on financial instruments amounting to RM79.3mn gave added boost to non-NII. Demand for unit trust and banca remained healthy. Total Net Asset Value of Funds (NAV) under management widened to RM78.5mn (FY16: RM70.3mn) while annualized new premium (ANP) in the banca business stood at RM202.6mn (FY16: RM239.2mn). By segment, PBB’s overseas operations registered 9MFY17 PBT growth of 13.0% YoY. Overseas operations accounted for some 10% of the group’s PBT. Treasury operations and Investment banking saw weaker PBT of 3.4% YoY and -7.5% YoY. Elsewhere, Retail operations (comprising individuals and SMEs), which accounts for 53% of total segment profits increased by 8.3% while HP climbed 15.0% YoY. Growths were also observed in the Fund management (+15.5% YoY) and Corporate lending (+12.4% YoY) segments. Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating Financial Indicators ROE (%) ROA (%) CTI Ratio (%) Gross NPL Ratio (%) Loan Loss Coverage (%) BV/ Share (RM) Price/ BV (x) FY17 FY18 0.0 0.0 5298.0 5498.5 5265.0 5529.0 100.6 99.4 Hold (Downgraded) FY17 FY18 14.8 1.4 33.2 0.6 97.8 9.61 2.1 14.1 1.3 33.9 0.5 110.6 10.44 2.0 % of FY 75.0 76.0 Within Within PBK 0.2 1.0 2.6 3.1 FBM KLCI (1.1) (1.3) (1.8) 3.8 Scorecard vs. TA vs. Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 3