Bursa Malaysia Daily Market Report - 29 May

Transcription

1. Monday , 29 May, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED REPORTS’ News 1. 2. 3. Daily Market Commentary Weekly Strategy Weekly Technical Outlook Fundamental Reports 1. 2. 3. 4. 5. 6. Affin Holdings Berhad: 1QFY17 Results Within Expectations Ibraco Berhad: Stronger Quarters Ahead KPJ Healthcare Berhad: Encouraging QoQ Improvement in Inpatient Traffic Luster Industries Berhad: Diversifying into Property Development Mah Sing Group Berhad: Expanding Presence in Sentul White Horse Bhd: 1Q17 Sales Weakened Further Technical Reports 1. Weekly Technical Stock Picks 2. Daily Money Flow Technical Stock Picks FBMKLCI Stocks Under Coverage PLANTATION Sector CONSTRUCTION Sector PROPERTY Sector 3. Weekly Ace Market Stock Watch 4. Weekly Small Cap Stock Watch 5. Weekly Stock Screen Foreign Technical Reports 1. Foreign Stock Watch (AUS) 2. Foreign Stock Watch (HK) 3. Foreign Stock Watch (FSSTI) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research
2. Daily Note Daily Market Commentary (A Participating Organisation of Bursa Malaysia Securities Bhd) Menara TA One, 22 Jalan P Ramlee, 50250 Kuala Lumpur Tel : 603 - 2072 1277. Fax : 603 - 2032 5048 Monday, 29 May 2017 TA Research e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (26.05.2017) Volume (mil) +/-chg (RMmn) Main Market 1,845.1 -63.9 2,451.3 Warrants 291.4 -107.6 36.7 ACE Market 714.7 90.6 116.7 Bond 12.3 -0.7 1.4 ETF 0.0 0.00 0.0 Total 2,863.5 2,606.1 Off Market 89.3 56.1 182.4 Value +/-chg -534.6 -18.4 -15.8 -0.1 0.00 91.0 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP May 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 Value/ Volume 1.33 0.13 0.16 0.11 0.00 0.91 2.04 Review & Outlook Up Down 159 522 35 158 14 86 0 5 0 0 208 771 % chg % YTD chg 1,772.30 12,661.58 17,576.12 1,773.50 -1.66 -30.59 -180.92 -5.00 -0.09 -0.24 -1.02 -0.28 7.95 10.42 19.44 8.44 21,080.28 6,210.19 7,547.63 19,686.84 2,355.30 25,639.27 3,219.42 1,569.27 5,716.82 3,110.06 1,810.11 5,751.66 -2.67 4.94 29.92 -126.29 12.37 8.49 -14.95 -0.14 13.38 2.23 -1.79 -37.96 -0.01 0.08 0.40 -0.64 0.53 0.03 -0.46 -0.01 0.23 0.07 -0.10 -0.66 6.67 15.36 5.67 2.99 16.23 16.54 11.76 1.71 7.93 0.21 -8.07 1.52 More profit-taking consolidation is likely this week, as the previous week's bearish divergence signals on the daily slow stochastics, RSI and MACD indicators for the FBM KLCI have yet to be neutralized by a confirmed penetration of the recent two-year high of 1,787 to the upside. Meantime, support building at current levels or slightly lower will be crucial to instill confidence and encourage investors to bargain hunt for further recovery ahead. Immediate uptrend supports for the index stays at the rising 30 and 50day moving average levels, now at 1,763 and 1,756, with better support at 1,740, then 1,729. Immediate upside hurdle for the benchmark stays at the recent two-year high of 1,787, followed by the 1,800 psychological level and 18 May 2015 high of 1,823. Strategy-wise, investors should look to buy weakness construction and property related counters such as EcoWorld, MRCB and Sunway Construction, and oil & gas related stocks such as Sapura Energy and Wah Seong for recovery plays. News Bites • • • • • • Top 10 KLCI Movers Based on Mkt Cap. Off Market LUSTER EDUSPEC MAYBANK SUNREIT SEEHUP-LA EMETALL KENANGA CHINHIN BJASSET ATTA-LA GDEX PMETAL (mn) 15.8 15.0 14.0 12.0 9.3 6.0 5.0 3.5 3.0 1.2 1.0 1.0 @ @ @ @ @ @ @ @ @ @ @ @ (RM) 0.14 0.15 9.40 1.70 0.07 0.63 0.65 1.40 1.30 0.07 2.73 2.66 Counter TENAGA IHH PETGAS GENTING GENM MISC HLBANK PETDAG HLFG AMBANK Mkt Cap. (RM’mn) 78,094 46,288 37,517 37,294 34,124 33,925 28,555 24,002 19,103 15,644 Chg Vol. (RM) (mn) -0.02 6.82 -0.09 8.06 -0.20 0.52 -0.05 2.08 -0.18 12.10 -0.08 2.23 -0.02 1.11 -0.10 0.59 -0.02 0.09 -0.10 4.14 Important Dates MKH - 1:10 Rights Issue - RI of up to 45.4m shares together bonus issue of up to 90.8m shares. 1 rights share for every 10 existing shares held, at an issue price of RM1.89 per rights share, together with 2 bonus shares for every 1 rights share subscribed. LISTING ON: 01/06/2017. • • • • • • • Mah Sing Group Berhad announced the proposed acquisition of a 78% stake in Cosmowealth Housing Development Sdn Bhd for RM55.0mn. YTL Hospitality REIT announced the proposed acquisition of The Majestic Hotel Kuala Lumpur for RM380.0mn. Serba Dinamik Holdings Bhd, in a bid to become a one-stop service provider for the oil and gas sector, is in talks with a few entities in Europe, the United States and Middle East for merger and acquisition exercises. Aeon Co (M) Bhd has allocated a capital expenditure of RM500mn for FY17, compared with RM700mn in FY16, mainly for the opening of the Aeon Mall Kempas in Johor Baru by 3Q17 and the refurbishment of its Aeon Queensbay store in Penang. Felda Global Ventures Holdings Bhd has refuted claims of deforestation of natural forest at PT Temila Agro Abadi's land in West Kalimantan, Indonesia. Bioalpha Holdings Bhd aims to launch new products in its key markets, particularly in Malaysia, Indonesia and China, as part of it expansion strategy. Kronologi Asia Bhd plans to raise funds to meet the capital requirements of its regional expansion plans in the medium-term. Icon Offshore Berhad has been awarded a contract valued at RM5.4mn to provide one 60MT bollard pull anchor handling tag/supply, to Sarawak Shell Berhad/Sabah Shell Petroleum Company Limited. Affin Holdings Berhad announced its 1QFY17 results, with net profit growing 4.0% YoY to RM120.2mn. It was within expectations. KPJ Healthcare Berhad reported a 12.0% YoY increase in its 1QFY17 net profit to RM38.3mn. It was within expectations. Bank Negara says there is a growing shortage of affordable housing, which is expected to hit one million units by 2020, and increasing surplus in commercial property. China's structural reforms will slow the pace of its debt build-up but will not be enough to arrest it, and another credit rating cut for the country is possible unless it gets its ballooning credit in check, officials at Moody's said. The US 1Q17 GDP was revised upwards to1.2% annualized rate from 0.7% previously and consensus forecast of 0.9%. Exchange Rate USD/MYR 4.2668 -0.0122 USD/JPY 110.90 -0.9500 EUR/USD 1.122 0.0005 Commodities Futures Palm Oil (RM/mt) 2,554.00 -51.00 Crude Oil ($/Barrel) 49.87 1.16 Gold ($/tr.oz.) 1,266.70 11.40 DISCLAIMER The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD Kaladher Govindan, Head of Research
3. TA Securities Monday , May 29, 2017 FBMKLCI: 1,772.30 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Weekly Strategy Market View, News In Brief: Corporate, Economy, and Share Buybacks THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Kaladher Govindan Market View Tel: +603-2167 9609 kaladher@ta.com.my www.taonline.com.my Profit Taking Consolidation Could Continue The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FMB KLCI) moved into sideways trade last week, as profit-taking restricted rebound attempts after the much stronger-than-expected 1Q GDP growth of 5.6% year-on-year (YoY) was overshadowed by geopolitical worries following a terrorist incident in the UK. Weaker oil prices after the US proposed to sell half of its huge crude oil inventory and investor concerns that extended output cuts by OPEC may not be large enough to offset the global glut added to the gloom. For the week, the FBM KLCI rose 4.02 points, or 0.2 percent to 1,772.30, as gains on CIMB (+39sen), Hap Seng Consolidated (+26sen) and Genting Malaysia (+22sen) offset losses on BAT (-74sen), Petronas Dagangan (-60sen) and IHH Healthcare (-38sen). Average daily traded volume was slightly lower at 3.24 billion shares, while value deteriorated to RM2.88 billion, compared with the 3.39 billion shares and RM3.12 billion average respectively the previous week, as buying momentum on the small cap and ACE Market sector fizzled off. A recovery in crude oil prices last Friday, after the initial plunge post OPEC meeting, upward revision in the US first quarter GDP and the still strong double-digit growth of 14% YoY in Chinese industrial profits could cushion downside pressure and contribute towards a positive start this week but market lacks strong catalysts for the benchmark index to break through the 1,800-psychological barrier. Significant upgrade in forward earnings could act as a catalyst, if companies outperform expectations strongly in the ongoing first quarter 2017 (1Q17) results reporting season but chances for that appear slim. Brent crude oil price fell USD2.50 per barrel to RM51.46 last Thursday despite the OPEC and its allies agreeing to extend the daily production cut of 1.8 million barrels until end-March next year. The main contention was the absence of deeper cuts to balance the increasing output from US shale players and some member countries like Nigeria and Libya that are exempted from the output cut. Oil price recovered by USD0.69 to USD52.15/bbl last Friday as disappointments were tempered by the Saudi Energy minister’s comment that oil inventories will drop faster in the third quarter and Russia’s statement that producers have more tools to support prices. If the output cut extension helps reduce global crude inventories to below 5-year average by March next year and these producers can agree on a long-term plan to maintain this new equilibrium, we probably can see Brent crude oil price breaching USD60/bbl in 2Q18. This could assist the recoupling of Ringgit with crude oil and probably by then the recent decoupling between these two variables, caused by fear of faster than expected monetary tightening in the US, could be mitigated by a stronger-than-expected recovery in the domestic economy. As it is the ringgit has already strengthened to RM4.27 against the USD and could receive further boost, if the Fed tone down its aggressive monetary tightening bias in the upcoming June 13 and 14 meetings. Page 1 of 7
4. TA Securities 29-May-17 A Member of the TA Group Although the 1Q17 US GDP was revised upward to 1 .2% annualized from the initial 0.7% and the forecast 0.9%, data showed economic growth has been tempered by weak business spending, a modest increase in retail sales, a widening of the goods trade deficit and decreases in inventory investment. Thus, the Fed may tone down it aggressive tightening bias even if it chooses to go along with market expectations for a 25-basis point hike in June meeting. The upcoming April core PCE data tomorrow and May non-farm payroll number this Friday could influence its decision. Consensus forecasts point to core PCE and non-farm payrolls expanding by 1.5% and 176,000 respectively. That aside, investors would be keenly watching the conclusion of 1Q17 results reporting season to gauge signs of further upgrades in consensus earnings forecast for 2017 and 2018 that averages around 6% for FBMKLCI component stocks. So far, as results from the index heavyweight sectors were largely within expectations, possibility of seeing a significant upward revision in consensus earnings forecast appears remote. Of the 88 companies within our coverage, 65 have released their results. 60% of them came within coverage, 17% above and 23% below. Sectors that reported largely in line was banking, power & utilities, plantation, transportation and healthcare. Sector that outperform was oil & gas, while underperformers were well spread across most sectors. Page 2 of 7
5. TA Securities 29-May-17 A Member of the TA Group News In Brief Corporate Mah Sing Group Berhad announced the proposed acquisition of a 78 % stake in Cosmowealth Housing Development Sdn Bhd (CHDSB) for RM55.0mn. CHDSB is in the midst of acquiring 8.5acres of freehold land in Sentul for RM95.1mn. Based on preliminary plans, the group will undertake a residential development named M-Centure on the land comprising serviced apartments, with an estimated GDV of RM1.3bn. (Bursa) YTL Hospitality REIT announced the proposed acquisition of The Majestic Hotel Kuala Lumpur for RM380.0mn. The Proposed Lease is expected to be accretive to YTL REIT’s future distributable income and DPU after taking into consideration the additional net property income received from the sub-lease arrangement and estimated borrowing costs. The sub-lease arrangement provides stable and secure cash flows with a step-up provision of 5% every five years. (Bursa) Serba Dinamik Holdings Bhd, in a bid to become a one-stop service provider for the oil and gas sector, is in talks with a few entities in Europe, the United States and Middle East for merger and acquisition exercises. Some of these talks are still ongoing and some of them are almost at the conclusion. A major M&A announcement is expected in a month. In a separate announcement, the group is also in the final stages of discussion to acquire Bangunan AFFIN Bank Shah Alam to house its head office and operational staff. (Bernama, Bursa) Aeon Co (M) Bhd has allocated a capital expenditure of RM500mn for FY17, compared with RM700mn in FY16, mainly for the opening of the Aeon Mall Kempas in Johor Baru by third quarter this year and the refurbishment of its Aeon Queensbay store in Penang. The group is also embarking on a revamp of its Aeon Taman Maluri Shopping Centre in Cheras. (The Sun Daily) Comment: This comes as no surprise as we have factored this in our financial model since our meeting with management last March 2017. Aeon has been spending between RM500mn – RM700mn in CAPEX since FY13 to fund its aggressive expansion plan by opening new malls and stores. This has converted Aeon’s net cash position of RM313.6mn in FY13 to net debt position of RM544.3mn in FY16 with a gearing ratio of 0.3x. Given the softer consumer sentiment as well as higher costs of living, we deem this as necessary to normalise CAPEX level in order to sustain future growth. We made no change in our earnings forecasts. We reiterate our Sell call on Aeon with unchanged target price of RM2.23/share based on DDM valuation. Felda Global Ventures Holdings Bhd (FGV) has refuted claims of deforestation of natural forest at PT Temila Agro Abadi (PT TAA)'s land in West Kalimantan, Indonesia. On the contrary, FGV said PT TAA's natural forest had been completely destroyed by massive forest fires in the 1980's and in 1997, by continuous logging operations by logging companies and by the local communities. (Bernama) ManagePay Systems Bhd has received a conditional approval from the government to operate as a money lender, giving the electronic payment solutions provider another platform to offer financing to customers. (The Edge) Bioalpha Holdings Bhd aims to launch new products in its key markets, particularly in Malaysia, Indonesia and China, as part of it expansion strategy. It would penetrate the Muslim-majority provinces in western China such as Xinjiang, Qinghai, Shaanxi and Gansu by engaging the local Muslim associations of the respective provinces to establish a distribution network. (The Star) Page 3 of 7
6. TA Securities 29-May-17 A Member of the TA Group Kronologi Asia Bhd plans to raise funds to meet the capital requirements of its regional expansion plans in the medium-term . The group would commence the fund raising exercise during the current quarter. Its regional expansion entails organic growth, merger and acquisition activities, emphasis on EDM services as well as widening its market penetration in India (The Star) Icon Offshore Berhad has been awarded a contract valued at RM5.4mn to provide one 60MT bollard pull anchor handling tag/supply, to Sarawak Shell Berhad/Sabah Shell Petroleum Company Limited. (Bursa) Affin Holdings Berhad announced its 1QFY17 results, with net profit growing 4.0% YoY to RM120.2mn. Operating income, Islamic banking income and net interest income improved by RM82.7mn. (Bursa) KPJ Healthcare Berhad reported a 12.0% YoY increase in its 1QFY17 net profit to RM38.3mn. Revenue grew 6.7% YoY to RM793.9mn. There was an increase in revenue generated by newly opened hospital, KPJ Pahang and existing hospitals that had turnaround during the last financial year. (Bursa) Tropicana Corporation Berhad doubled its net profit for the 1QFY17 to RM32.5mn. Revenue increased 33.1% YoY. This was attributed to strong sales achieved and advanced progress of construction works with many of its ongoing projects. It is confident of delivering earnings growth with a healthy unbilled sales of RM2.3bn as at 31 March 2017, and its developments in the central region continue to draw healthy interest. (Bursa) RCE Capital Berhad FY17 net profit nearly doubled to RM78.9mn. Revenue advanced 37.5% YoY due to higher interest and fee income arising from an enlarged consumer financing segment loan base. (Bursa) Mitrajaya Holdings Berhad saw its 1QFY17 net profit increase 55.7% YoY to RM28.7mn. Revenue grew 49.1% YoY. Better financial results were due to recognition of compensation sum received from compulsory land acquisition at Mukim Pengerang, Daerah Kota Tinggi, Johor. (Bursa) Titijaya Land Berhad’s 9MFY17 net profit increased 11.8% YoY to RM59.7mn. This was due to higher recognition from property development projects, namely H2O and 3Elements. (Bursa) Econpile Holdings Berhad recorded a 22.4% growth in its 9MFY17 profit to RM59.9mn. Revenue increased 27.1% YoY. Piling and foundation works from property development projects dominated its revenue at 92.3%. Margins, however, moderated on a gradual increase in steel and steel related materials. (Bursa) MCT Berhad reported a fall in its 9MFY17 net profit to RM45.6mn (-29.1% YoY). Revenue decreased 13.1% YoY. The decrease in revenues were due to lower movements in percentage of completion rates attributing to rationalised construction costs, completion and phasing as an initiative to streamline and improve operations. Projects with higher yields contributed more in the previous year. (Bursa) Kenanga Investment Bank Berhad recorded a 75.8% YoY decline in its net profit to RM1.9mn. The decrease was attributed to lower trading and investment income and share of losses from an associate and joint venture. (Bursa) P.I.E. Industrial Berhad’s 1QFY17 profit more than quadrupled to RM11.6mn. Revenue increased 35.2% YoY. Higher demand was seen from existing customers for electronics manufacturing activities and raw wire and cable products. There were also higher forex gains and reversal of slow moving inventory. (Bursa) Page 4 of 7
7. TA Securities 29-May-17 A Member of the TA Group News In Brief Economy Asia Bank Negara : Provide More Affordable Housing There is a growing shortage of affordable housing and increasing surplus in commercial property, according to Bank Negara. The shortage in affordable housing is expected to hit one million units by 2020. Governor Datuk Muhammad Ibrahim said the country required a bold and pragmatic solution towards providing more affordable housing. “We estimate a shortage of 960,000 units of affordable housing. This is projected to reach one million units by 2020. “A central authority and a national repository can significantly improve the ability to better distribute, monitor and manage the supply-demand imbalances. “Developing a thriving rental market should also be on the agenda to temper the nation’s fixation on home ownership,” he said. Another issue that banks should be concerned with is the sizable surplus in commercial property. “In contrast to affordable housing, the office and retail markets are in oversupply,” he said in his keynote speech “State of the industry” at ASLI’s 21st Malaysian banking summit. In 2016, the vacancy rate for prime office space in the Klang Valley stood at 21.8%, outstripping the regional average of 6.2%. Monthly rentals of prime office space in Kuala Lumpur are the lowest among regional cities. “Over the next few years, the significant incoming supply of large projects is likely to aggravate supply conditions in this segment,” he cautioned. Signs of oversupply are also emerging in the retail segment in major urban centres in Malaysia. This can be traced to the abundance of shopping malls, he said. “You may be surprised to learn that there are as many as 20 shopping malls just along the 40km stretch of the LDP highway. “It is equally astonishing that the prime retail space per capita in cities like Johor, Penang and Kuala Lumpur is actually higher than regional mega cities such as Shanghai and Beijing, and also higher income cities such as Singapore and Hong Kong,” he said. (The Star) Japan Consumer Inflation Rises for Fourth Month Core consumer inflation in Japan rose for a fourth consecutive month in April as fuel and utilities prices edged higher. The country’s core consumer price index, which excludes the cost of fresh food, rose 0.3% year on year in April, compared to a 0.2% rise in the previous month, according to the Ministry of Internal Affairs and Communications. This was just below a median forecast compiled by Bloomberg of 0.4%. Headline CPI rose 0.4% year on year in April against a 0.2% rise in March, while consumer prices excluding fresh food and energy was flat in April from a 0.1% dip in the previous month. The Bank of Japan said last month it forecasts the consumer price index (excluding fresh food) to rise 1.4% in the 12 months ending March 31, 2018. This target was adjusted from the 1.5% forecast made in January. (Financial Times) Singapore Factory Output Rises 6.7% in April Singapore's industrial production rose by 6.7% in April from a year earlier, a slower pace than March's 11% surge as pharmaceuticals slumped but with electronics, particularly semiconductors, continuing to shine. This makes for the ninth straight month that manufacturing output has grown year-on-year. April's performance was also slightly better than the 6% growth expected by analysts polled by Bloomberg. March's factory output growth was revised upwards from an earlier estimate of 10.2%. Leaving out biomedical production which was hit by the slump in pharmaceuticals, output grew 15.5% year-onyear. On a month-on-month, seasonally adjusted basis, factory output edged up 0.1% from March, better than the 1.3% decline tipped by analysts. Without biomedical production, it grew 5.4%. Electronics output surged 48% year-on-year in April, continuing their strong run, with semiconductors the star performer with robust growth of 69.1%. All other segments recorded higher output except for data storage. Cumulatively, electronics output expanded 37.3% from January to April this year, compared to the same period last year. In contrast, biomedical manufacturing output shrank 23.3% in April due to the 32.4% fall in the production of pharmaceuticals. The medical technology segment expanded 11.1%. Cumulatively, biomedical manufacturing production fell 11.7% in Jan to April year-on-year. (The Straits Times) Page 5 of 7
8. TA Securities 29-May-17 A Member of the TA Group Moody 's: China's Reforms Not Enough to Arrest Mounting Debt China's structural reforms will slow the pace of its debt build-up but will not be enough to arrest it, and another credit rating cut for the country is possible down the road unless it gets its ballooning credit in check, officials at Moody's said. The comments came two days after Moody's downgraded China's sovereign ratings by one notch to A1, saying it expects the financial strength of the world's second-largest economy to erode in coming years as growth slows and debt continues to mount. In announcing the downgrade, Moody's Investors Service also changed its outlook on China from "negative" to "stable", suggesting no further ratings changes for some time. China has strongly criticised the downgrade, asserting it was based on "inappropriate methodology", exaggerating difficulties facing the economy and under-estimating the government's reform efforts. In response, senior Moody's official Marie Diron said on Friday that the ratings agency has been encouraged by the "vast reform agenda" undertaken by the Chinese authorities to contain risks from the rapid rise in debt. However, while Moody's believes the reforms may slow the pace at which debt is rising, they will not be enough to arrest the trend and levels will not drop dramatically, Diron said. Diron said China's economic recovery since late last year was mainly thanks to policy stimulus, and expects Beijing will continue to rely on pump-priming to meet its official economic growth targets, adding to the debt overhang. Moody's also is waiting to see how some of the announced measures, such as reining in local government finances, are actually implemented, Diron, associate managing director of Moody's Sovereign Risk Group, told reporters in a webcast. (The Star) United States U.S. GDP Growth Revised Up to 1.2% Rate in First Quarter U.S. economic growth in early 2017 was modest but stronger than initially thought, and the pace is picking up in the current quarter. Gross domestic product, a broad measure of the goods and services produced in the U.S. economy, expanded at an inflation- and seasonally adjusted annual rate of 1.2% in the first quarter, the Commerce Department said. The agency last month estimated GDP growth at a 0.7% annual rate during the first three months of the year. U.S. growth has averaged 2.1% a year since the recession ended in mid2009. Looking through quarterly fluctuations, 2017 appears on a similar trajectory, based on recent projections by private economists and Federal Reserve policy makers. “The recovery continues to be perhaps uninspiring, but it’s awfully durable,” said Michael Gapen, chief U.S. economist at Barclays. First-quarter growth has repeatedly disappointed in recent years before rebounding in the spring and summer. This year looks set to follow that pattern, which some economists attribute to seasonal-adjustment problems. Forecasting firm Macroeconomic Advisers on Friday predicted GDP would expand at a 3.3% annual pace in the second quarter. President Donald Trump wants to boost sustained economic growth above 3% through a combination of tax cuts and other policy changes. But many economists say that will be difficult given sluggish growth in the size of the labor force and slow gains in worker productivity. Friday’s report also offered the government’s first estimate of U.S. corporate profits during the first quarter. After-tax profits, without inventory valuation and capital consumption adjustments, fell 0.3% from the fourth quarter but were up 11.9% from a year earlier. (The Wall Street Journal) U.S. Durable-Goods Orders Down 0.7% in April Demand for long-lasting factory goods fell in April, hinting at potential speed bumps for the manufacturing sector and broader economic growth. Orders for durable goods—products designed to last at least three years, such as factory equipment and computers—decreased 0.7% from the prior month to a seasonally adjusted $231.17 billion in April, the U.S. Commerce Department said. Business capital spending rose sharply in the first quarter, supporting an otherwise lackluster period of economic growth, according to separate Commerce Department data. Steady job creation, a stable dollar, a resurgent energy sector and stronger demand from overseas have all lent support to the sector. Friday’s report suggests businesses won’t continue at that pace. A closely watched proxy for business spending on new equipment, orders for nondefense capital goods excluding aircraft, was flat in April, the second consecutive month with no change. “The bottom line is that investment in business equipment is unlikely to make another large contribution to growth Page 6 of 7
9. TA Securities 29-May-17 A Member of the TA Group in the second quarter ,” Michael Pearce, chief U.S. economist at Capital Economics, said in a note to clients. Elsewhere, the April durable goods report was mixed. New orders for civilian aircraft, a category that swings wildly from month to month, dragged down the headline figure. Other sectors also retrenched, including primary and fabricated metals, machinery and electrical equipment. (The Wall Street Journal) Consumers Remain Confident About Economy in Michigan Survey Consumers remain largely confident about the economy, even as a sharp political divide among respondents continues, according to a report Friday. The University of Michigan said its final reading of consumer sentiment was 97.1 in May, compared with April’s final reading of 97 and May’s initial reading of 97.7. It is up 2.5% from May 2016. Economists surveyed by The Wall Street Journal had expected a May final reading of 97.5. The index reflecting consumers’ sentiment on current economic conditions rose 1.6% to 111.7 from last May. The index of expectations rose 3.3% from a year ago to 87.7. The recent rise in optimism, which saw a boost after President Donald Trump’s election in November, reflects a turnaround from consumers’ attitudes in October, when sentiment had matched a twoyear low. The Federal Reserve in March voted to raise short-term interest rates, and it is expected to push for additional rate increases if economic conditions continue to improve. As in recent months, the survey also showed continued widespread disagreement about future U.S. economic prospects along political party lines, with Democrats expecting a recession and Republicans expecting robust economic growth. (The Wall Street Journal) Share Buy-Back: 26 May 2017 Company BREM CBIP CHEETAH FITTERS GRANFLO PECCA SYMLIFE TEXCHEM TEXCYCL Bought Back Price (RM) Hi/Lo (RM) 25,000 109,000 182,000 200,000 10,000 2,000 10,000 1,000 10,000 0.92/0.915 2.13/2.12 0.47/0.46 0.41 0.23 1.52 0.97 1.45 1.25 0.93/0.915 2.16/2.10 0.47/0.46 0.415/0.405 0.23/0.225 1.53/1.52 1.00/0.995 1.45/1.43 1.25/1.22 Total Treasury Shares 14,371,062 14,768,127 10,647,700 19,566,300 6,168,800 5,700 438,329 2,547,400 1,945,700 Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 7 of 7 We accept no
10. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR UMW Share Price (RM) 26-May-17 2.04 2.40 6.05 Target Price BETA (RM) EPS (sen) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 2.36 2.28 5.41 0.97 0.60 1.26 10.8 24.0 19.7 15.8 25.3 29.8 18.9 10.0 30.8 12.9 9.5 20.3 5.8 3.8 2.1 7.7 3.8 3.1 2.44 2.70 7.00 -16.4 -11.1 -13.6 1.95 1.95 4.43 4.6 23.1 36.6 -4.2 12.1 32.4 4.10 3.50 5.40 6.70 15.80 9.90 22.10 5.20 10.00 1.29 0.96 1.35 1.35 0.66 0.96 0.78 1.36 0.71 35.8 29.4 46.4 50.6 101.3 73.6 136.6 50.6 40.3 37.7 33.1 50.6 55.6 109.8 82.6 140.4 54.0 39.0 11.9 9.7 11.2 12.6 13.8 12.8 14.7 10.7 27.2 11.3 8.6 10.3 11.4 12.7 11.4 14.3 10.0 28.1 3.5 2.8 3.1 3.2 2.9 5.3 2.8 2.2 3.1 3.5 2.8 3.5 3.5 2.9 5.3 2.9 2.2 3.1 4.49 3.00 5.70 6.43 14.28 9.68 20.58 5.59 10.98 -5.3 -4.7 -8.9 -1.2 -2.2 -2.9 -2.4 -3.0 -0.2 3.60 2.08 3.90 4.11 12.70 7.50 18.72 4.53 8.20 18.1 37.5 33.1 54.4 9.9 25.3 7.3 19.6 33.7 14.2 19.7 20.4 40.8 3.4 14.6 1.8 15.1 23.8 0.42 1.27 5.37 3.50 0.97 2.10 2.11 5.90 0.49 1.62 5.49 3.50 0.58 2.26 1.50 5.58 0.80 0.63 1.06 1.11 1.24 na 1.08 0.10 5.7 14.6 31.6 15.3 8.3 12.6 11.9 44.3 5.7 13.5 36.4 20.3 9.6 12.5 11.8 45.8 7.3 8.7 17.0 22.8 11.6 16.6 17.8 13.3 7.3 9.4 14.8 17.2 10.0 16.7 17.9 12.9 0.0 2.2 2.2 2.1 1.0 2.6 1.4 4.2 2.4 2.2 2.2 2.7 1.0 2.6 1.4 4.2 0.51 1.35 5.48 3.61 1.05 2.15 2.49 6.13 -17.6 -6.1 -2.0 -3.0 -8.1 -2.3 -15.3 -3.8 0.36 0.80 4.65 3.07 0.41 1.49 1.45 5.32 16.7 59.5 15.5 14.0 138.3 40.9 45.5 10.9 -3.4 21.0 12.3 9.4 67.8 23.5 22.0 0.3 2.01 2.00 0.47 11.0 11.5 18.3 17.5 5.0 5.0 2.25 -10.7 1.93 4.1 0.0 14.74 18.74 17.84 21.08 0.51 0.58 74.8 93.1 81.3 19.7 101.9 20.1 18.1 18.4 5.1 4.5 5.5 4.9 15.30 18.84 -3.7 -0.5 12.90 14.60 14.3 28.4 5.9 14.4 2.36 7.81 25.00 81.54 3.42 1.82 4.95 1.01 2.23 8.62 27.41 88.66 3.76 2.74 4.17 1.10 0.51 0.36 0.34 0.36 0.51 0.67 0.44 0.56 6.7 26.4 120.5 293.6 22.3 25.1 12.7 9.3 7.9 30.5 148.1 326.2 24.7 25.3 15.8 12.8 35.1 29.6 20.7 27.8 15.3 7.3 39.0 10.9 30.0 25.6 16.9 25.0 13.8 7.2 31.4 7.9 1.7 3.8 2.8 3.3 4.4 4.4 0.9 5.0 2.0 4.5 3.0 3.4 5.0 4.4 1.0 5.0 3.00 9.29 27.00 83.68 3.63 2.04 5.00 1.07 -21.3 -15.9 -7.4 -2.6 -5.8 -10.8 -1.0 -5.6 2.11 7.30 22.44 74.12 2.13 1.43 4.14 0.78 11.8 7.0 11.4 10.0 60.6 27.3 19.5 29.5 -8.2 6.6 6.5 4.3 34.1 5.2 14.3 27.0 45.04 52.08 1.05 198.6 187.4 22.7 24.0 4.4 4.4 55.64 -19.1 40.61 10.9 2.0 9.94 6.02 11.53 6.58 1.35 1.29 49.4 25.7 55.6 27.9 20.1 23.4 17.9 21.6 0.5 1.3 0.6 1.5 10.00 6.38 -0.6 -5.6 7.50 4.19 32.6 43.6 25.1 33.2 2.62 0.14 3.81 0.13 0.74 1.28 22.1 0.4 24.6 0.4 11.9 33.9 10.6 33.9 6.1 0.0 7.3 0.0 3.42 0.16 -23.4 -15.6 2.61 0.05 0.4 170.0 -11.5 170.0 5.62 4.17 6.65 4.70 0.78 0.52 10.3 13.3 16.4 16.5 54.6 31.3 34.3 25.3 0.7 1.5 0.7 1.8 6.73 4.37 -16.5 -4.6 5.62 3.85 0.0 8.3 -11.5 -0.2 6.33 6.49 2.08 5.39 2.12 6.05 7.70 1.90 5.75 2.55 0.59 0.15 0.32 -0.26 0.27 19.5 35.8 16.2 26.6 4.3 24.4 40.5 18.3 30.2 7.1 32.5 18.1 12.8 20.3 49.4 25.9 16.0 11.3 17.8 30.0 1.2 2.8 2.3 2.5 0.5 1.7 3.1 2.6 2.8 0.8 6.45 7.07 2.53 5.59 2.64 -1.9 -8.2 -17.8 -3.6 -19.7 3.95 5.62 1.88 4.20 1.96 60.3 15.5 10.6 28.3 8.2 31.1 -1.5 -1.4 0.7 -10.2 INDUSTRIAL SCIENTX SKPRES 8.43 1.30 9.69 1.75 0.56 0.49 54.4 9.1 66.4 14.1 15.5 14.3 12.7 9.3 2.5 3.4 2.8 5.3 8.99 1.44 -6.2 -9.7 5.96 1.12 41.4 16.1 25.8 0.8 MEDIA ASTRO MEDIA PRIMA STAR 2.61 1.11 2.31 3.20 0.65 1.40 1.05 0.65 0.64 13.2 4.3 7.1 14.5 5.0 6.5 19.7 26.0 32.6 18.0 22.3 35.6 4.8 3.1 7.8 5.0 3.6 7.8 3.01 1.52 2.70 -13.3 -27.0 -14.4 2.56 1.00 2.20 2.0 11.0 5.0 0.4 -3.5 3.1 0.45 0.84 7.03 0.44 6.16 1.29 0.57 23.6 8.9 8.1 41.4 20.1 47.3 0.0 -11.3 0.0 3.4 38.2 6.0 17.3 -35.4 1.30 34.6 2.9 BANKS & FINANCIAL SERVICES AFG 4.25 AFFIN 2.86 AMBANK 5.19 CIMB 6.35 HLBANK 13.96 MAYBANK 9.40 PBBANK 20.08 5.42 RHBBANK BURSA 10.96 CONSTRUCTION BPURI GADANG GAMUDA IJM SENDAI SUNCON WCT LITRAK Building Materials WTHORSE CONSUMER Brewery CARLSBG HEIM Retail AEON AMWAY F&N NESTLE PADINI POHUAT QL SIGN Tobacco BAT GAMING Casino GENTING GENM NFO BJTOTO LUSTER HEALTHCARE Hospitals IHH KPJ Rubber Gloves HARTA KOSSAN SUPERMX TOPGLOV KAREX OIL & GAS EATECH 0.55 0.44 1.01 11.5 11.9 4.8 4.6 0.0 0.0 1.18 -53.4 MHB 0.92 0.95 1.84 -1.2 1.3 na 69.9 0.0 0.0 1.23 -25.6 MISC 7.60 7.65 0.83 56.8 54.7 13.4 13.9 3.9 3.9 7.90 -3.8 PANTECH 0.62 0.69 1.28 4.1 5.0 14.8 12.3 2.9 3.2 0.67 -7.5 PCHEM 7.40 7.91 1.08 39.2 41.6 18.9 17.8 2.8 3.0 7.80 -5.1 SENERGY 1.90 2.02 2.48 5.3 4.6 36.2 41.0 0.0 0.0 2.10 -9.5 UMWOG 0.57 0.80 2.03 -12.0 -3.6 na na 0.0 0.0 1.04 -45.7 Note: UMWOG proposed 14 for 5 rights issue shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.75 1.55 1.41 11.7 12.6 15.0 13.8 0.0 0.0 2.02 -13.4
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price (RM) PLANTATIONS FGV IJMPLNT IOICORP KLK SIME UMCCA Target Price BETA (RM) EPS (sen) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 1.84 3.18 4.58 24.78 9.33 6.20 1.53 3.88 4.15 26.19 8.24 7.52 1.80 0.47 1.09 0.88 1.23 0.48 6.3 12.3 18.7 111.8 30.8 32.7 11.1 15.7 21.1 119.1 35.3 34.5 29.0 25.9 24.4 22.2 30.3 18.9 16.6 20.2 21.7 20.8 26.4 18.0 2.7 2.2 2.2 2.2 2.4 2.6 2.7 2.5 2.6 2.4 3.0 2.7 2.52 3.70 4.81 25.50 9.55 6.51 -27.0 -14.1 -4.8 -2.8 -2.3 -4.8 1.32 3.00 4.10 22.72 7.30 5.53 39.4 6.0 11.7 9.1 27.8 12.1 18.7 -6.5 4.1 3.3 15.2 3.3 0.71 1.07 0.87 2.14 1.52 0.85 3.79 3.60 0.69 1.07 0.92 2.25 1.65 0.98 4.10 3.40 0.62 0.66 0.32 0.92 0.72 0.28 0.66 0.46 3.4 17.2 4.9 17.4 14.5 6.2 25.6 27.2 7.0 17.4 10.2 17.4 13.7 10.3 22.8 29.1 20.6 6.2 17.7 12.3 10.5 13.8 14.8 13.2 10.1 6.1 8.5 12.3 11.1 8.2 16.6 12.4 5.6 3.7 4.0 3.3 4.3 1.2 3.7 3.3 5.6 3.7 4.6 3.5 4.3 1.2 3.7 3.3 0.83 1.43 1.05 2.46 1.70 1.00 4.50 3.68 -13.9 -25.3 -17.6 -13.0 -10.6 -15.0 -15.8 -2.2 0.68 1.05 0.84 1.85 1.34 0.69 2.80 2.84 4.4 1.9 3.0 15.8 13.4 23.2 35.4 26.7 2.2 -5.3 -13.5 9.8 6.3 6.2 21.1 20.0 1.71 1.50 1.86 1.72 0.52 0.56 8.9 8.1 10.1 8.6 19.3 18.6 16.9 17.4 5.2 5.6 5.9 6.0 1.84 1.72 -7.1 -12.8 1.60 1.45 6.9 3.4 -0.6 -2.0 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.19 24.16 18.96 13.80 1.52 1.23 21.47 19.60 17.37 1.90 0.74 0.75 0.76 1.01 0.57 7.1 98.4 88.2 131.9 8.2 6.4 102.3 101.3 130.8 10.7 16.7 24.6 21.5 10.5 18.5 18.6 23.6 18.7 10.6 14.3 5.9 3.0 3.3 3.2 6.6 5.9 3.1 3.7 3.3 6.6 1.80 25.70 22.66 14.90 1.64 -33.9 -6.0 -16.3 -7.4 -7.3 1.14 22.92 18.10 13.00 1.38 4.4 5.4 4.8 6.2 10.1 -13.1 1.5 -11.0 -0.7 2.0 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 5.02 5.06 6.46 6.50 5.50 4.95 5.95 7.50 1.29 0.94 0.71 0.68 15.0 20.8 25.1 21.4 16.6 21.1 25.4 22.3 33.4 24.3 25.7 30.3 30.2 24.0 25.4 29.1 1.5 4.1 3.1 3.0 1.7 4.2 3.1 3.1 5.99 5.19 6.60 6.90 -16.2 -2.5 -2.1 -5.8 4.11 4.43 5.40 5.81 22.1 14.2 19.6 11.9 6.4 4.8 8.0 9.2 TECHNOLOGY Semiconductor & Electronics IRIS 0.19 INARI 2.11 MPI 13.18 UNISEM 3.50 0.28 2.40 13.15 3.55 1.38 0.82 0.50 0.81 -1.3 10.3 94.2 26.9 -0.3 na 12.6 20.5 115.7 14.0 29.1 13.0 na 16.7 11.4 12.0 0.0 3.8 2.0 3.4 0.0 2.3 2.0 3.4 0.24 2.23 13.50 3.70 -22.9 -5.4 -2.4 -5.4 0.10 1.41 7.02 2.27 85.0 50.0 87.7 54.2 68.2 27.1 77.9 48.3 3.05 8.50 3.23 8.10 1.18 1.47 37.6 17.2 35.9 17.5 8.1 49.3 8.5 48.6 1.3 1.2 1.6 1.2 3.59 8.97 -15.0 -5.2 2.16 5.76 41.2 47.6 33.2 40.3 1.75 3.71 1.88 4.51 0.76 0.67 15.4 19.3 21.5 17.4 11.3 19.2 8.1 21.3 3.1 3.9 4.0 3.5 1.87 4.59 -6.4 -19.2 1.25 3.62 40.0 2.5 10.1 -13.7 PROPERTY GLOMAC HUAYANG IBRACO IOIPG MAHSING SNTORIA SPSETIA SUNWAY REIT SUNREIT CMMT TRANSPORTATION Airlines AIRASIA AIRPORT Freight & Tankers TNLOGIS WPRTS SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price (S$) BANKS & FINANCIAL SERVICES DBS 20.80 OCBC 10.43 UOB 23.37 PLANTATIONS WILMAR IFAR 3.65 0.51 Target Price Beta (S$) EPS (cent) PER (X) FY17 FY18 FY17 FY18 Div Yield (%) 52week 52week FY17 FY18 High Price % Chg Low Price % Chg % Chg YTD 23.30 12.00 25.40 1.22 1.13 1.08 173.8 87.8 195.7 190.2 12.0 92.5 11.9 209.4 11.9 10.9 11.3 11.2 2.9 5.7 3.0 2.9 6.7 3.0 21.2 10.7 24.0 -1.8 -2.1 -2.7 14.72 8.84 17.41 41.3 26.9 34.2 20.0 16.9 14.6 3.72 0.53 0.92 1.12 28.9 3.9 31.1 4.3 11.7 11.9 2.2 1.9 2.5 2.1 4.0 0.6 -8.7 -15.1 2.96 0.44 23.3 14.8 1.7 -3.8 12.6 12.9 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
12. T e c h n i c a l TA Securities V i e w Monday , May 29, 2017 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Weekly Technical Outlook FBM KLCI: 1,772.30 (+4.02, +0.23%) THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Chartist : Stephen Soo Tel: +603-2167 9607 stsoo@ta.com.my www.taonline.com.my Support Building Crucial to Counter Bearish Divergence The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FMB KLCI) moved into sideways trade last week, as profit-taking restricted rebound attempts after the much stronger-than-expected 1Q GDP growth of 5.6% was overshadowed by geopolitical worries following a terrorist incident in the UK. Weaker oil prices after the US proposed to sell half of its huge crude oil inventory and investor concerns that extended output cuts by OPEC may not be large enough to offset the global glut added to the gloom. For the week, the FBM KLCI rose 4.02 points, or 0.2 percent to 1,772.30, as gains on CIMB (+39sen), Hap Seng Consolidated (+26sen) and Genting Malaysia (+22sen) offset losses on BAT (-74sen), Petronas Dagangan (-60sen) and IHH Healthcare (-38sen). Average daily traded volume was slightly lower at 3.24 billion shares, while value deteriorated to RM2.88 billion, compared with the 3.39 billion shares and RM3.12 billion average respectively the previous week, as buying momentum on the small cap and ACE Market sector fizzled off. The FBM KLCI ended firmer on Monday, led by gains in heavyweight Petronas stocks after the country registered a much stronger-than-expected 1Q GDP growth of 5.6%, and regional strength in line with recovery in US stocks. The index rose 6.67 points to close at the day’s high of 1,774.95, off a low of 1,768.98, as gainers led losers 542 to 420 on strong total turnover of 4.09bn shares worth RM2.95bn. Stocks slipped back into profit-taking correction mode the next day, dragged down by a terrorist incident in the UK and weaker oil prices after the US proposed to sell half of its huge crude oil inventory. The index fell 7.78 points to close at the day’s low of 1,767.17, off an early high of 1,777.08, as losers swarmed gainers 636 to 292 on slower turnover of 2.91bn shares worth RM2.8bn. The benchmark index salvaged some gains Wednesday, helped by bargain hunting interest in banking stocks on the back of strong record 1Q earnings enjoyed by CIMB, offsetting Moody’s downgrade of China’s ratings for the first time in nearly 30 years. The KLCI gained 3.84 points to close at 1,771.01, off an early low of 1,767.22 and high of 1,776.24, as losers beat gainers 546 to 419 on active trade totaling 3.37bn shares worth RM2.89bn. Blue chips ended slightly firmer the subsequent day, lifted by the stronger ringgit and regional peers, after the US Fed minutes indicated a possible delay in raising interest rates pending more evidence of sustained economic growth. The KLCI edged 2.95 points up to settle at 1,773.96, after oscillating between 1,782.54 and 1,773.22, but losers beat gainers 590 to 377 on reduced total turnover of 2.94bn shares worth RM3.17bn. Stocks slipped back into profit-taking consolidation mode on Friday, taking the cue from weaker regional markets and oil prices as investors were concerned extended output cuts by OPEC for another nine months may not be large enough to offset the global glut. The index eased 1.66 points to settle at 1,772.30, coming off an early high of 1,778.18 and low of 1,769.47, as losers trashed gainers 771 to 208 on slower turnover totaling 2.86bn shares worth RM2.6bn. Trading range for the blue-chip benchmark index last week shrank to 15.43 points, compared to the 25.5-point range the previous week, as most key index heavyweights stayed range bound. For the week, the FBM-EMAS Index eased 24.30 points or 0.19 percent to 12,661.58, Page 1 of 3
13. TA Securities 29-May-17 A Member of the TA Group while the FBM-Small Cap Index slumped 265 .98 points, or 1.49 percent to 17,576.12, as small cap stocks fell into profit-taking correction mode. The daily slow stochastic momentum indicator for the FBM KLCI stayed soft in the neutral region after flashing a bearish divergence signal against the index the previous week, while the weekly indicator continued hooking down in overbought territory. The 14-day Relative Strength Index (RSI) indicator retained the bearish divergence with a hook-down in neutral ground, but the 14-week RSI hooked up to a slightly higher reading of 68.36. Chart 1 The daily Moving Average Convergence Divergence (MACD) trend indicator remained bearish with a similar bearish divergence clouding the outlook, while the weekly MACD indicator’s signal line is leveling further, suggesting weak upside momentum (Chart 2). However, the 14day Directional Movement Index (DMI) trend indicator stayed unchanged, with the +DI and – DI lines at a comfortable distance on a leveling ADX line. Chart 2 Page 2 of 3
14. TA Securities 29-May-17 A Member of the TA Group Conclusion More profit-taking consolidation is likely this week , as the previous week’s bearish divergence signals on the daily slow stochastics, RSI and MACD indicators for the FBM KLCI have yet to be neutralized by a confirmed penetration of the recent two-year high of 1,787 to the upside. Meantime, support building at current levels or slightly lower will be crucial to instill confidence and encourage investors to bargain hunt for further recovery ahead. Immediate uptrend supports for the index stays at the rising 30 and 50-day moving average levels, now at 1,763 and 1,756, with better support at 1,740, then 1,729. Immediate upside hurdle for the benchmark stays at the recent two-year high of 1,787, followed by the 1,800 psychological level and 18 May 2015 high of 1,823. Strategy-wise, investors should look to buy weakness construction and property related counters such as EcoWorld, MRCB and Sunway Construction, and oil & gas related stocks such as Sapura Energy and Wah Seong for recovery plays. Chart 3 Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD (14948-M) MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 3 of 3
15. RESULTS UPDATE TA Securities Monday , May 29, 2017 FBM KLCI: 1,772.30 Sector: Finance A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Affin Holdings Berhad TP: RM3.50 (+22.0%) Last Traded: RM2.86 1QFY17 Results Within Expectations BUY THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Team Coverage Tel: +603-2167 9610 liwong@ta.com.my Review 1QFY17 results almost fell below our expectations. Accounting for only 21% of ours and consensus full year net profit, the variance was largely attributed to higher-than-expected operating expenses, which ballooned by 20.5% YoY and 11.5% QoQ On a positive note, strong growth in income helped support the rise in costs. Normalisation in credit costs saw the Affin report total allowances of RM6.5mn vs. net writeback amounting to RM1.6mn in 1QFY16. QoQ, net profit contracted by 32.1% due to a combination of lower operating income (-3.5% QoQ) and higher overhead expenses (+11.5% QoQ). The decline was also partly attributed to lower profit from associates. Yearly, total income widened at an encouraging pace of 19.4% YoY. Bulk of the increase was again, driven by higher contributions from Islamic banking operations and non-interest income (non-NII). 1QFY17 fee income surged 31.6% YoY to RM142.1mn from RM108.0mn a year ago, spurred by increases in brokerage fees, underwriting fees, portfolio management fees, commission, guarantee fees, services charges, and initial service charge fees. Stronger profit from disposal of financial assets and investments along with MTM gains helped boost income from financial instruments to RM34.3mn from RM7.2mn in 1QFY16. Net interest income (NII) widened 4.3% YoY. Gross loans broadened by 2% YoY, supported by the SME segment (+44% YoY). However, the increase in SME loans were muted by a steep 29% decline in the larger corporate loans. Consumer based loans advanced at a stronger pace of 7% YoY, led by increases for the purchase of securities (+53% YoY), residential mortgages (+12% YoY), credit cards (+11% YoY) and personal loans (+10% YoY). Total deposits was of little changed, widening at a marginal pace of 0.1% YoY to RM50.1bn. The loan to deposit ratio climbed to 90% from 88% a year ago, on the back of stronger loan growth. Operating expenses surged by 20.5% YoY, underpinned by jumps in personnel costs (+19.8% YoY), marketing expenses (+64.7% YoY), and admin & general expenses (+34.3% YoY). The cost-to-income (CTI) ratio accelerated to 64% from 59% in the previous quarter but stood pat compared to 1QFY16. Share Information Bloomberg Code AHB MK Stock Code 5185 Listing Main Market Share Cap (mn) 1,942.9 Market Cap (RMmn) 5,556.7 Par Value 1.00 52-wk Hi/Lo (RM) 3.00/2.08 12-mth Avg Daily Vol ('000 shrs) 429.6 Estimated Free Float (%) 12.9 Beta 1.0 Major Shareholders (%) Lembaga Tabung Angkatan Tentera - 35.4 Bank of East Asia Ltd - 23.5 Boustead Holdings Bhd - 20.7 EPF - 6.6 Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 570.9 644.1 561.3 591.3 101.7 108.9 Buy (maintained) Financial Indicators ROE (%) ROA (%) CTI Ratio (%) Gross Impaired Loans Ratio (%) BV/ Share (RM) Price/ BV (x) FY17 7.2 0.8 58.7 1.7 3.6 0.8 FY18 8.8 0.9 57.3 1.6 3.9 0.7 % of FY 21.0 21.0 Within Within AHB -2.4 14.9 27.1 29.4 FBM KLCI 0.2 4.6 9.5 9.0 Scorecard vs TA vs Consensus Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBM KLCI Compared to 4QFY16, total allowances improved. YoY, total allowances stood at RM6.5mn vs. net writeback of RM1.6mn in 1QFY16. The increase in allowances was attributed to higher individual impairments and decline in bad debts recovered. The formation of new NPLs advanced during the quarter, reversing improvements in 4QFY16. RM159.4mn of new NPLs were formed, resulting in gross impaired loans ratio of 1.99% vs. 1.67% in the previous quarter. The CET1 and Total Capital Ratio for Affin Bank stood at 11.7% and 17.8%. Source: Bloomberg Page 1 of 3 www.taonline.com.my
16. TA Securities 29-May-17 A Member of the TA Group Impact No change to our earnings estimates pending an analyst briefing to be held this week . Outlook Going forward, we remain positive on the Affin’s new transformation programme. Coined the “Affinity Program,” the bank will embark on a comprehensive transformation plan to address the challenges and opportunities it currently faces in the industry. In the nearer term, efforts undertaken in the past year to rebalance the bank’s loan and deposit portfolio by reducing pricier deposits and shifted assets towards better yielding loans in the consumer segments (such as mortgages, credit cards and ASB financing) as well as the SME segment are translating to better earnings for the group. Valuation Rolling valuations forward to FY18, we raise Affin’s TP to RM3.50 from RM3.40/share. This represents an implied FY18 PBV of around 0.9x. Affin is currently trading at FY17 PBV of 0.8x, still a steep discount compared to industry peers average of 1.2x. BUY reiterated for now. Earnings Summary (RMmn) FYE Dec Net interest income Non-interest income Islamic Banking Total operating income Pre-provisioning profit Pretax profit Net profit EPS (sen) EPS growth (%) Gross div (sen) Div yield (%) 1QFY17 Results Analysis (RMmn) YE 31 Dec Net interest income Income from Islamic Banking business Non interest income Total income Operating expenses Operating profit Total allowances Finance costs Profit from associates/ JVs PBT Net profit EPS (sen) 2015 947.8 615.7 238.9 1,802.5 716.8 519.3 369.3 16.1 (37.7) 8.0 2.8 1QFY16 229.7 58.9 138.3 426.9 (272.6) 154.3 1.6 (14.3) 11.4 152.9 115.6 5.9 4QFY16 246.9 79.5 201.4 527.8 (294.6) 233.2 (20.6) (14.2) 18.9 217.3 177.0 9.1 2016 970.5 692.5 272.8 1,935.9 793.0 741.8 564.0 24.6 52.7 8.0 2.8 1QFY17 239.5 77.0 193.1 509.6 (328.6) 181.0 (6.5) (14.1) 1.5 161.9 120.2 6.2 Page 2 of 3 QoQ (3.0) (3.2) (4.2) (3.5) 11.5 (22.4) (68.5) (0.6) (91.9) (25.5) (32.1) (32.1) 2017F 974.2 742.7 305.5 2,022.5 834.5 762.0 570.9 24.9 1.2 8.0 2.8 YoY 4.3 30.6 39.6 19.4 20.5 17.3 (511.9) (1.5) (86.6) 5.9 4.0 4.0 2018F 1,038.2 796.8 342.2 2,177.3 930.4 857.0 644.1 28.1 12.8 8.0 2.8 YTD FY16 229.7 58.9 138.3 426.9 (272.6) 154.3 1.6 (14.3) 11.4 152.9 115.6 5.9 YTD FY17 239.5 77.0 193.1 509.6 (328.6) 181.0 (6.5) (14.1) 1.5 161.9 120.2 6.2 2019F 1,094.3 855.1 383.3 2,332.7 1,017.6 925.8 697.1 30.4 8.2 8.0 2.8 YoY 4.3 30.6 39.6 19.4 20.5 17.3 (511.9) (1.5) (86.6) 5.9 4.0 4.0
17. TA Securities 29-May-17 A Member of the TA Group ( T HI S P AGE I S I NT E N T I ON AL L Y L E FT B L ANK) Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 3 of 3
18. RESULTS UPDATE TA Securities A Member of the TA Group Monday , 29 May 2017 Sector: Property MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Ibraco Berhad TP: RM0.92 (+6.4%) Last traded: RM0.87 Stronger Quarters Ahead Hold THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY Thiam Chiann Wen Tel: +603-2167 9615 cwthiam@ta.com.my Review Ibraco’s 1Q17 net profit of RM3.3mn came in below expectations, accounting for only 9% of our full-year earnings forecast. The variance was largely due to slower-than-expected progress billings. Ibraco posted net profit of RM3.3mn in 1Q17, a decline of 59% from RM8.1mn a year ago. The drop in earnings was largely due to slow progress billing as its previous key contributing projects are nearing completion or have completed during the quarter under review. QoQ, the group’s 1Q17 net profit grew 2.1% despite a 28.5% drop in revenue. This was largely due to higher corporate social responsibility expenses and provision for staff bonus incurred in the immediate preceding quarter. Impact Our FY17-19 earnings are revised lower by 7-33% to reflect the timing of revenue recognition of its high-rise projects. Our FY17/18/19 new property sales are largely unchanged at RM356mn/RM440mn/RM550mn respectively. Outlook We estimate that the group recorded new sales of RM120mn in 1Q17. This came in within our FY17 sales assumptions of RM356mn. Continew, which is situated strategically along Jalan Tun Razak and Jalan Yew, was the key contributor to 1Q17 sales. We understand that a total of 247 units of serviced apartments are sold-to-date, representing 48% take up rate since its official launch in Feb-17. The group’s unbilled sales as at Mar-17 is estimated at RM303mn, which provides the group with about 2 years’ earnings visibility (1.9x FY16 property revenue). Looking forward, we expect new sales to be driven by Ibraco’s next major integrated development “Northbank” in Kuching, which entails a business park as well as guarded residential and commercial buildings. Targeted for launch in 3Q17, the maiden phase is expected to have an estimated GDV of RM220mn. Stock Return Information KLCI 1,772.30 Expected Share Price Return (%) 6.4 Expected Dividend Return (%) 4.3 Expected Total Return (%) 10.7 Share Information Bloomberg Code IBRA MK Stock Code 5084 Listing Main Market Issued Share (mn) 496.4 Market Cap (RMmn) 461.7 Par Value (RM) 0.5 52-wk Hi/Lo (RM) 1.05/0.84 Estimated Free Float (%) 12.2 Beta (x) 0.3 3-Month Average Volume ('000) 46.9 Top 3 Shareholders (%) Chew Chiaw Han 26.3 Sharifah Deborah 20.0 Ng Cheng Chuan 17.5 Share Performance (%) Price Change IBRA FBM KLCI 1 mth (3.4) 0.2 3 mth (6.5) 4.6 12 mth (14.4) 8.3 Financial Info FY17 FY18 Debt to Equity Ratio 41.5 37.1 ROA (%) 4.5 8.8 ROE (%) 7.2 14.2 NTA/Share (RM) 0.7 0.8 Price/NTA (x) 1.4 1.2 Scorecard % of FY vs. TA 9.0 Below vs. Consensus N/A N/A (12-Mth) Share Price relative to the FBM KLCI Valuation Underpinned by the change in earnings, we revise our target price to RM0.92/share from RM1.00/share previously, based on unchanged 9x CY18 EPS. With a total return of 10.7% we maintain our Hold recommendation on Ibraco. Source: Bloomberg Page 1 of 2 www.taonline.com.my
19. TA Securities 29-May-17 A Member of the TA Group Earnings Summary (RM mn) FYE Dec Revenue EBITDA EBITDA margin (%) Adj PBT Reported net profit Core profit Core EPS (sen) Core EPS growth (%) PER (x) GDPS (sen) Div yield (%) Core ROE (%) 2015 254.0 76.2 30.0 70.3 46.0 46.0 9.3 6.6 10.0 3.5 3.8 16.5 2016 158.8 46.2 29.1 40.4 27.1 27.1 5.5 (41.1) 17.1 3.5 3.8 8.3 2017F 167.4 39.9 23.8 34.0 24.2 24.2 4.9 (10.5) 19.0 3.5 3.8 7.2 2018F 326.8 76.1 23.3 70.7 50.7 50.7 10.2 109.1 9.1 4.0 4.3 14.2 1Q17 Results Analysis (RMmn) YE 31 Dec Revenue Gross Profit 1Q16 39.0 16.2 4Q16 26.6 8.5 1Q17 19.1 7.3 QoQ (%) (28.5) (13.7) YoY (%) (51.1) (54.8) EBIT Net Int Inc/ (exp) Pretax Profit Taxation MI Reported Net Profit Core Net Profit Core EPS (sen) GDPS (sen) 13.3 (1.3) 12.0 (3.2) (0.8) 8.1 8.1 2.4 0.0 4.5 (0.6) 4.0 (1.0) 0.3 3.3 3.3 0.7 3.5 4.0 (0.6) 3.5 0.2 (0.4) 3.3 3.3 0.7 0.0 Gross margin EBIT Margin (%) Pretax Margin (%) Net Margin (%) Effective Tax Rate (%) 41.5 34.2 30.8 20.7 (26.3) 31.9 17.0 14.9 12.3 (25.1) 38.4 21.1 18.1 17.5 6.8 (11.3) 0.0 (12.9) >100 >-100 2.1 2.1 1.5 nm ppt 6.6 4.1 3.2 5.2 32.0 (69.8) (57.3) (71.2) >100 (53.1) (58.8) (58.8) (72.3) nm ppt (3.1) (13.1) (12.7) (3.2) 33.1 2019F 484.6 106.4 22.0 101.2 72.3 72.3 14.6 42.6 6.4 5.0 5.4 18.1 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. This report has been prepared by TA SECURITIES HOLDINGS BERHAD for purposes of Mid and Small Cap Research Scheme ("MidS") administered by Bursa Malaysia Berhad and will be compensated to undertake the scheme. TA SECURITIES HOLDINGS BERHAD has produced this report independent of any influence from the MidS or the subject company. For more information about MidS and other research reports, please visit Bursa Malaysia’s website at: www.bursamids.com for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 2 of 2
20. RESULTS UPDATE TA Securities Monday , May 29, 2017 FBM KLCI: 1,772.30 Sector: Healthcare A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 KPJ Healthcare Berhad TP: RM4.70 (+12.7%) Last Traded: RM4.17 Encouraging QoQ Improvement in Inpatient Traffic BUY THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Wilson Loo Tel: +603-2167 9606 wilsonloo@ta.com.my Review KPJ’s 1QFY17 net profit of RM38.3mn (-26.7% QoQ, +12.0% YoY) was within ours and consensus estimates at 27.4% and 25.2% respectively. An interim dividend of 1.80sen was declared, similar to 1QFY16. YoY, revenue grew by 6.7% to RM793.9mn, primarily on higher revenue per patient (outpatient +4.4%, inpatient +9.0%) albeit partially offset by lower patient admissions (outpatient -2.1%, inpatient -1.2%). Newer hospitals like KPJ Pahang, which recently opened in 2016 contributed positively to top line. At the bottom line however, EBITDA grew at a softer pace of 2.7% YoY to RM107.6mn due to higher operating expenses for the group’s Malaysia hospital operations. Increase in staff costs partly fuelled the rise in expenses. Meanwhile, tax rate at 26.7% was lower by 2.1%points YoY with the utilisation of benefits from tax losses and capital allowances resulting from improved performances of new hospitals. QoQ, net profit declined by 26.7% to RM38.3mn due to the gain of RM13.9mn from the disposal of a 6% stake in associate, Al-Aqar Healthcare REIT, in December 2016. Excluding this, core net profit only improved marginally by 0.1% QoQ. Notably, patient admissions improved with outpatients and inpatients respectively increasing by 2.7% QoQ and 7.6% QoQ. Alongside the commissioning of 68 new operating beds, occupancy rates improved by 2.1%-points QoQ to 68.3%. Overseas, Indonesia and Australia recorded mixed performances. Indonesia sustained its profitability, recording profit before zakat and taxes of RM1.0mn (-87.8% QoQ, +61.7% YoY) with support from the increasing economies of scale at Rumah Sakit Medika Bumi Serpong Damai. Whereas for the group’s aged care and retirement resort, Jeta Gardens, in Australia, it remained a drag on the group’s earnings with losses before zakat and taxes of RM3.1mn (vs. -RM3.4mn in 1QFY16 and -RM2.4mn in 4QFY16). This was despite revenue increasing by 35.2% YoY to RM14.7mn on the back of the increase in bed capacity. Impact We make no changes to our earnings estimates. Outlook 1QFY17’s QoQ improvements in patient traffic has been encouraging. For the rest of the year, we expect the group’s underlying performance to be driven organically by its existing and newer hospitals. 2QFY17 though, is prone to a slowdown in patient admissions due to the Ramadan season. Increased revenue potential is expected from the commissioning of new bed capacity at KPJ Seremban (+90 beds) in 2QFY17 and the targeted opening of KPJ Perlis (+60 beds), Perlis’s first private hospital, in 4QFY17. Notwithstanding the inelasticity in demand for healthcare services, we are cautious of challenges for private healthcare service providers arising from downside risks of lingering poor consumer sentiment suppressing patient flow to private hospitals and the weakening of the Ringgit against the USD inducing cost inflation for imported drugs and medical consumables. Page 1 of 4 www.taonline.com.my Share Info Bloomberg Code KPJ MK Bursa Name KPJ Stock Code 5878 Listing Main Market Share Cap (mn) 1,049.8 Market Cap (RM'mn) 4,377.5 Par Value (RM) 0.50 52-wk Hi/Lo (RM) 4.37/3.85 12-mth Avg Daily Vol (000' shrs) 630.8 Estimated Free Float (%) 18.2 Beta 0.5 Major Shareholders (%) Johor Corporation - 44.2 EPF - 12.9 Waqaf-An-Nur Corporation Bhd - 7.3 Forecast Revision Forecast Revision (%) Net profit (RM mn') Consensus TA/Consensus (%) Previous Rating FY17 FY18 139.8 172.7 151.9 168.5 92.1 102.5 Buy (Maintained) Financial Indicators Net gearing (x) CFPS (RM) Price/CFPS (x) ROA (%) ROE (%) NTA/Share (RM) Price/NTA (x) FY17 0.6 0.4 11.7 3.5 8.1 1.3 3.2 FY18 0.6 0.3 13.6 4.1 9.5 1.4 3.0 % of FY 16 27.4 25.2 Within Within KPJ (0.7) 1.7 (0.5) (0.7) FBMKLCI 0.2 4.6 8.9 8.3 Scorecard vs TA vs Consensus Share Performance Price chg (%) 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg