Bursa Malaysia Daily Market Report - 30 November

Transcription

1. Thursday , 30 November, 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. 6. 7. 8. Ai rA si a Be r ha d: 3 Q1 7 W as W a y Ab o ve E x p e c t at ion s Li n gk a ra n T r a n s K o t a H ol di ng s B er h a d: M in im a l I mp a ct f ro m MR T M a h Si ng Gr o u p B h d: Sa le s T ar get On Tr a ck Me di a P ri m a Be r ha d: Imp l emen t e d E ar l y Ret ir emen t S ch e me , b u t M or e H as t o B e Don e P adi ni H ol di n gs B er h ad: B r o a dl y In -L in e w it h E st im at e s R u b be r Sec t o r: N at u r a l G as T a rif f f or 1 H C Y1 8 t o In c re as e b y 2 2 .9 % Se r ba D i nam i k H ol di ng s B er h a d: Con t r a ct s K eep Ro l lin g In U zm a B h d: H i gh er J V Con t r ib u t i on s in 3 Q 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 . D ai l y Te ch n ic a l St o ck Pi cks ( A US) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
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Daily Market Commentary Thursday , 30 November 2017 For Internal Circulation Only TA Research, e-mail : taresearch@ta.com.my KLSE Market Statistics (29.11.2017) (mil) Main Market 1,380.4 Warrants 207.0 ACE Market 364.9 Bond 4.2 ETF 0.3 LEAP 0.0 Total 1,956.9 Off Market 193.7 Volume +/-chg (RMmn) 149.7 2,701.3 6.6 26.7 3.1 69.6 -3.6 0.8 0.21 0.4 0.00 0.0 2,798.7 141.1 189.8 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP November Futures Other Markets DOW JONES NASDAQ (US) FTSE (UK) NIKKEI (JAPAN) KOSPI (KOREA) HANG SENG (HK) FSSTI (S'PORE) SET (BANGKOK) JCI (JAKARTA) SHANGHAI SHENZHEN AUSTRALIA (mn) 50.2 35.8 21.9 21.4 13.6 11.3 10.4 10.0 7.0 3.3 3.0 1.3 1.0 1.0 % YTD chg 5.96 35.60 62.06 9.50 0.35 0.29 0.37 0.56 4.79 8.14 14.59 4.89 23,940.68 6,824.39 7,393.56 22,597.20 2,512.90 29,623.83 3,438.99 1,705.33 6,061.37 3,337.86 1,919.06 6,011.12 103.97 -87.96 -67.09 110.96 -1.29 -57.02 -3.36 -1.19 -9.34 4.21 0.75 26.86 0.44 -1.27 -0.90 0.49 -0.05 -0.19 -0.10 -0.07 -0.15 0.13 0.04 0.45 21.14 26.77 3.51 18.22 24.00 34.65 19.38 10.52 14.44 7.55 -2.54 6.09 0.41 0.18 0.36 0.27 0.55 1.00 2.42 1.63 9.19 3.30 0.40 2.44 3.08 0.74 Exchange Rate USD/MYR 4.0908 -0.0107 USD/JPY 111.91 0.4600 EUR/USD 1.185 0.0008 Counter TENAGA PCHEM CIMB AXIATA MAXIS DIGI MISC GENM IOICORP KLK Mkt Cap. Chg (RM’mn) (RM) 87,256 59,760 54,800 48,134 46,082 35,765 31,291 29,079 27,900 25,943 0.42 0.09 0.01 0.02 0.05 0.04 0.02 0.01 0.02 0.04 While blue chips should recover further given the ringgit's strength, caution over the OPEC meeting and key economic data ahead of the long threeday weekend break could keep gains in check. Overhead resistance for the index is revised to 1,727 (61.8%FR), followed by the 30-day and 50-day moving averages at 1,734 and 1,745 respectively, then 1,750, next will be 1,753, the 200-day ma. Key retracement support remains at 1,705 (50%FR) and 1,683 (38.2%FR), where the index may trough. News Bites Vol. (mn) 25.67 13.33 11.31 5.13 3.81 3.24 3.18 6.34 1.59 0.38 Commodities Futures Palm Oil (RM/mt) 2,563.00 -24.00 Crude Oil ($/Barrel) 57.39 -0.35 Gold ($/tr.oz.) 1,282.90 -10.40 Important Dates The local benchmark reversed the previous losses Wednesday, as blue chips recovered on fund buying encouraged by the firm ringgit, which rose to 4.082 to the USD, the strongest in 14 months. The KLCI rose 5.96 points to end near the day's high of 1,720.57, off an early low of 1,714.47, but losers beat gainers 477 to 400 on higher turnover of 1.95bn shares worth RM2.8bn. Gamuda shares should extend recovery backed by bullish momentum indicators towards the 76.4%FR (RM4.80), while a convincing breakout will aim for the 61.8%FR (RM4.94) and 50%FR (RM5.05) ahead. Crucial supports are from the 21/11/17 low (RM4.58) and lower Bollinger band (RM4.49). Likewise, MRCB should extend rebound towards the 38.2%FR (RM1.14), with a confirmed breakout to target the 200-day ma (RM1.18) and 50%FR (RM1.22), while key chart supports from recent low of 96sen and 5/10/17 low (87sen) cushions downside. Top 10 KLCI Movers Based on Mkt Cap. (RM) @ @ @ @ @ @ @ @ @ @ @ @ @ @ % chg 1,720.38 12,399.50 16,863.15 1,715.50 Off Market DNEX DNEX-WD BKOON JOHAN FIAMMA JMR DIALOG MLGLOBAL MAYBANK GKENT FITTERS UOADEV AIRASIA HIBISCS Review & Outlook Value Value/ +/-chg Volume Up Down 701.2 1.96 284 298 1.6 0.13 72 125 0.3 0.19 39 47 -0.4 0.18 2 6 0.22 1.15 3 1 0.00 0.40 0 0 1.43 400 477 28.5 0.98 • Gas Malaysia Bhd has obtained the approval from government to revise the natural gas tariff for the non-power sector in Peninsular Malaysia from 1 January 2018 to 30 June 2018 to RM30.90/MMBtu with a surcharge of RM1.62/MMBtu. • Serba Dinamik Holdings Bhd has bagged 4 engineering, procurement, construction and commissioning contracts and 4 operation and maintenance contracts from a few companies with total contract value of RM496mn. • UMW Holdings Bhd has delivered its first fan case produced for RollsRoyce's Trent 1000 engine to Roll-Royce engine assembly and test facility at Seletar Aerospace Park in Singapore. • Malaysia Airports Holdings Bhd is open to any offer to buy a stake in its Istanbul Sabiha Gokchen International Airport. • Barakah Offshore Petroleum Bhd has entered into a Consortium Agreement with state-owned Brooke Dockyard and Engineering Works Corporation and Samling Energy Sdn. Bhd. to jointly bid for oil and gas related projects in the state of Sarawak. • Titijaya Land Bhd said its wholly-owned Epoch Property Sdn Bhd has entered into a conditional share subscription agreement with Japanbased Tokyu Land Corp for a subscription consideration of RM47mn. • Yinson Holdings Bhd's associate company Yinson Energy Sdn Bhd is taking over the Layang floating production storage and offloading project from TH Heavy Engineering Bhd. • Vertice Bhd, formerly known as Voir Holdings Bhd, has clinched RM22mn sub-contract from Magjaya Resources (M) Sdn. Bhd. for the construction of one block of affordable apartments in Penang. • AirAsia Bhd's net profit rose 42.9% YoY to RM505.32mn for 3QFY17 from RM353.89mn, helped by lower deferred tax and strong demand for air travel. It was above expectations. • Mah Sing Group Bhd's net profit rose slightly to RM92.31mn for 3QFY17, from RM91.89mn a year ago, on higher other income and lower selling and marketing expenses. It was below expectations. • Padini Holdings Bhd recorded a 9.1% YoY growth in its net profit to RM31.2mn for 1QFY18, mainly due to higher other income contribution and improved profit margin. It was within expectations. • Media Prima Bhd's net loss narrowed by 7.6% YoY to RM101.09mn due to lower restructuring expenses and higher other operating income. • MyEG Services Bhd reported a 30% YoY rise in net profit for 1QFY18 to RM52.78mn, thanks to higher online foreign worker permit renewals. • The Federal Reserve in its Beige Book Wednesday said inflationary pressures have strengthened, paving the way for an interest rate hike in December. ASIABIO - 10:5 Rights Issue - RI of up to 1,163.2m ICPS together with up to 116.3m free detachable warrants. 10 ICPS together with 1 free warrant for every 5 existing shares held, at an issue price of RM0.08 per ICPS. LISTING ON: 11/12/2017. 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. Thursday , November 30, 2017 FBMKLCI: 1,720.38 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 RM Strength to Aid Recovery The local benchmark reversed the previous losses Wednesday, as blue chips recovered on fund buying encouraged by the firm ringgit, which rose to 4.082 to the USD, the strongest in 14 months. The KLCI rose 5.96 points to end near the day’s high of 1,720.57, off an early low of 1,714.47, but losers beat gainers 477 to 400 on higher turnover of 1.95bn shares worth RM2.8bn. Resistance at 1,727, Key Support at 1,705 While blue chips should recover further given the ringgit’s strength, caution over the OPEC meeting and key economic data ahead of the long three-day weekend break could keep gains in check. Overhead resistance for the index is revised to 1,727 (61.8%FR), followed by the 30-day and 50-day moving averages at 1,734 and 1,745 respectively, then 1,750, next will be 1,753, the 200-day ma. Key retracement support remains at 1,705 (50%FR) and 1,683 (38.2%FR), where the index may trough. BUY Gamuda & MRCB Gamuda shares should extend recovery backed by bullish momentum indicators towards the 76.4%FR (RM4.80), while a convincing breakout will aim for the 61.8%FR (RM4.94) and 50%FR (RM5.05) ahead. Crucial supports are from the 21/11/17 low (RM4.58) and lower Bollinger band (RM4.49). Likewise, MRCB should extend rebound towards the 38.2%FR (RM1.14), with a confirmed breakout to target the 200-day ma (RM1.18) and 50%FR (RM1.22), while key chart supports from recent low of 96sen and 5/10/17 low (87sen) cushions downside. Geopolitical Concern Weigh on Asian Markets Asian markets were subdued on Wednesday, as a North Korean missile test overshadowed a surge in U.S. equities overnight. North Korea launched a likely intercontinental ballistic missile that landed in the Sea of Japan, according to the Pentagon. The launch, the North's first since Sept. 15, came after the U.S. classified North Korea as a country that supported terrorism on Nov. 20. Following the launch, President Donald Trump said the U.S. would "take care of" the situation. Japanese Prime Minister Shinzo Abe and Trump have also agreed to increase their cooperation on the North, Reuters said, citing Japanese media. In stateside, the prospects for a U.S. tax cut seemed to improve after Senate Republicans rammed forward their bill in a partisan committee vote that set up a full vote by the Senate as soon as Thursday, although details of the measure remained unsettled. Japanese stocks rose as banks and financial shares tracked their U.S. counterparts higher, shrugging off another North Korean missile launch. The Nikkei share average ended 0.5 percent higher at 22,597.20. Across the Korean Strait, the benchmark Kospi index eased 0.05 percent, as several blue-chip tech names declined, while Australia’s S&P/ASX 200 was 0.45 percent higher, with heavily-weighted financial stocks climbing 0.66 percent. Meanwhile, Shanghai stocks reversed early losses to end firmer on Wednesday, bolstered by a surge in property shares and resources firms. The Shanghai Composite index was up 4.35 points or 0.13 percent at 3,338.00. Page 1 of 9
4. 30-Nov-17 Dow Finishes at Record High as Financial Sector Rally The Dow Jones Industrial Average closed at a new high on Wednesday , as investors bet the U.S. economy's momentum would continue. In the latest batch of encouraging economic data, the U.S. economy grew faster than initially thought in the third quarter, notching its quickest pace of expansion in three years. Outgoing Federal Reserve Chair Janet Yellen told congressional leaders the U.S. economy has gathered steam this year and will warrant continued interest rate increases amid a strengthened global recovery. Strong economic data added to financial stocks’ momentum. Financials rose 1.8 percent, adding to Tuesday’s gains and resulting in their biggest two-day rise since just after the 2016 U.S. election of President Donald Trump. JP Morgan rose 2.3 percent and Wells Fargo climbed 2.0 percent. However, the Nasdaq posted its biggest one-day drop in more than three months as investors fled highflying technology stocks and shifted to banks and other pockets of the market that could benefit from improving economic conditions, lower regulations and taxes as well as higher interest rates. Shares of Amazon.com, Apple, Google parent Alphabet and Facebook fell between 2 percent and 4 percent. The Dow Jones Industrial Average rose 103.97 points, or 0.44 percent, to 23,940.68, the S&P 500 lost 0.97 point, or 0.04 percent, to 2,626.07 and the Nasdaq Composite dropped 87.97 points, or 1.27 percent, to 6,824.39. 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 Thursday, November 30, 2017, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 9
5. 30-Nov-17 N e w s I n B r i e f Corporate UMW Holdings Bhd has achieved a significant milestone after successfully delivering its first fan case produced for Rolls-Royce 's Trent 1000 engine to Roll-Royce engine assembly and test facility at Seletar Aerospace Park in Singapore. (Bernama) Serba Dinamik Holdings Bhd has bagged 4 engineering, procurement, construction and commissioning contracts and 4 operation and maintenance contracts from a few companies with total contract value of RM496mn. (Bursa Malaysia/The Edge) Gas Malaysia Bhd has obtained the approval from government to revise the natural gas tariff for the non-power sector in Peninsular Malaysia from 1 January 2018 to 30 June 2018. The average base tariff will increase to RM30.90/MMBtu with a surcharge of RM1.62/MMBtu under Gas Cost Pass Through mechanism, which translates to an average effective tariff of RM32.52/MMBtu. (Bursa Malaysia) Malaysia Airports Holdings Bhd is open to any offer to buy a stake in its Istanbul Sabiha Gokchen International Airport. The group owns a 100 per cent stake in the second largest airport in Istanbul, however said it was in no hurry to do a deal, although informal talks had been initiated. (New Straight Times) Barakah Offshore Petroleum Bhd has entered into a Consortium Agreement with stateowned Brooke Dockyard and Engineering Works Corporation and Samling Energy Sdn. Bhd. to jointly bid for oil and gas related projects in the state of Sarawak. (Bursa Malaysia) Titijaya Land Bhd said its wholly-owned Epoch Property Sdn Bhd has entered into a conditional share subscription agreement with Japan-based Tokyu Land Corp (TLC) for a subscription consideration of RM47mn. The proposed subscription is to enhance the development of an ongoing project known as Mizu Residence with joint effort and cooperation between the group and TLC. (Bursa Malaysia/The Edge) Yinson Holdings Bhd’s associate company Yinson Energy Sdn Bhd (YESB) is taking over the Layang floating production storage and offloading project, following TH Heavy Engineering Bhd’s application to the Kuala Lumpur High Court for leave to novate the project to YESB. (Bursa Malaysia/The Edge) Vertice Bhd, formerly known as Voir Holdings Bhd, has clinched RM22mn sub-contract from Magjaya Resources (M) Sdn. Bhd. for the construction of one block of affordable apartments in Penang. The 21 months contract will commence on Dec 1, 2017 until Aug 31, 2019. (The Sun Daily) IT solutions provider M3 Technologies (Asia) Bhd's main focus for FY18 is to ramp up promotion of 4 business solution software services, as it works towards returning to the black after being loss-making for five financial years. (The Edge) Media Prima Bhd's net loss narrowed by 7.6% YoY to RM101.09mn from RM109.36mn due to lower restructuring expenses and higher other operating income. Quarterly revenue, however, fell 8.9% to RM288.51mn from RM316.76mn, on lower advertising and newspaper sales as the shift to digital media significantly affected the group's traditional media business. For 9MFY17, the net loss quadrupled to RM272.46mn from RM64.19mn while revenue also dropped 8.3% to RM889.48mn from RM970.37mn. (Bursa Malaysia/The Edge) MyEG Services Bhd reported a 30% rise in net profit for 1QFY18 to RM52.78mn from RM40.51mn a year ago, thanks to higher online foreign worker permit renewals. Meanwhile, quarterly revenue grew 25% YoY to RM98.04mn from RM78.6mn. (Bursa Malaysia/The Edge) Page 3 of 9
6. 30-Nov-17 AirAsia Bhd ’s net profit rose 42.9% YoY to RM505.32mn for 3QFY17 from RM353.89mn, helped by lower deferred tax and strong demand for air travel. Quarterly revenue also increased 45.1% YoY to RM2.44bn from RM1.68bn, supported by a load factor of 87%. For 9MFY17, the group reported a 19.4% YoY declined in net profit to RM1.27bn from RM1.57bn, due to higher operating expenses from PT Indonesia AirAsia and Philippines AirAsia despite revenue increasing 41.1% YoY to RM7.05bn from RM5bn. (Bursa Malaysia/The Edge) Mah Sing Group Bhd's net profit rose slightly to RM92.31mn for 3QFY17, from RM91.89mn a year ago, on higher other income and lower selling and marketing expenses. Quarterly revenue slipped 3.8% YoY to RM704.26mn from RM732.37mn. For 9MFY17, the group posted a net profit of RM273.12mn, slightly down from RM275.75mn a year ago, mainly due to higher administrative and other expenses. Revenue also came in 2.73% YoY lower at RM2.15bn compared with RM2.22bn. The group said it is on track to meet RM1.8bn sales target for properties sales for 2017. (Bursa Malaysia/The Edge) Padini Holdings Bhd recorded a 9.1% growth in its net profit to RM31.2mn for 1QFY18 from RM28.6mn, mainly due to higher other income contribution and improved profit margin. Quarterly revenue rose by a marginal 1.7% YoY to RM315.2mn from RM310mn. The group declared a second interim dividend of 2.5sen per share. (Bursa Malaysia/) Muhibbah Engineering (M) Bhd’s net profit for 3QFY17 rose 23.93% YoY to RM27.95mn from RM22.56mn mainly from the construction division. Meanwhile, revenue for the quarter fell 3.25% YoY to RM372.45mn from RM384.96mn. For 9MFY17, net profit increased 30.06% YoY to RM95.10mn from RM73.12mn while revenue fell 15.02% YoY to RM1.08bn from RM1.27bn. (Bursa Malaysia/The Sun Daily) Cahya Mata Sarawak Bhd posted 5.7% YoY rise in net profit for 3QFY17 to RM62.04mn from RM58.72mn despite the quarterly revenue dropped 2.27% YoY to RM347.97mn from RM356.06mn. For 9MFY17, net profit increased 120.85% YoY to RM149.43mn from RM67.66mn while revenue fell slightly to RM1.02bn from RM1.10bn. The better net profit was largely attributable to increased efficiencies and productivity within the Cement Division and improved sales within the Property Development Division. (Bursa Malaysia) Ikhmas Jaya Group Bhd’s net profit for 3QFY17 swelled 50 times to a record RM11.27mn from RM226k, driven by a key major project which had an above average industry margin. Meanwhile, quarterly revenue rose 19.2% YoY to RM60.55mn from RM50.79mn, on increased overall construction activities. For 9MFY17, net profit up by 25.4% YoY to RM12.22mn from RM9.75mn with revenue grew 12.6% to RM185.05mn from RM164.37mn. (Bursa Malaysia/The Edge) Sarawak Oil Palms Bhd’s net profit grew by 45% to RM54.36mn for 3QFY17, from RM37.49mn due to improved Fresh Fruit Bunches production coupled with palm products transacted volume and price. Meanwhile, its quarterly revenue also saw a 7.06% YoY increased to RM1.21bn from RM1.13bn. For 9MFY17, the net profit almost doubled to RM189.96mn from RM96.08mn and the revenue increased 13.59% YoY to RM3.55bn against RM3.12bn. (Bursa Malaysia/The Edge) Wah Seong Corporation Bhd posted a net profit of RM30.65mn for 3QFY17, from a net loss of RM25.42mn due to higher contribution from the oil and gas segment. Meanwhile, its quarterly revenue more than doubled to RM750.06mn compared to RM278.07mn a year ago. For 9MFY17, the group recorded a net profit of RM47.06mn against a net loss of RM29.98mn and the revenue grew about 59.86% to RM1.51bn from RM946.37mn. (Bursa Malaysia/The Edge) Page 4 of 9
7. 30-Nov-17 Magnum Bhd 's net profit for 3QFY17 grew 15% YoY to RM63.28mn, from RM55.02 due to higher gaming revenue. Meanwhile, the quarterly revenue rose 1% YoY to RM656.45mn from RM647.19mn. For 9MFY17, the net profit grew 6% YoY to RM153.81mn from RM145.7mn due to lower prizes payout ratio. Revenue slid 3% YoY to RM1.97bn from RM2.03bn. The Board declared a second interim dividend of 4sen per share. (Bursa Malaysia/The Edge) OldTown Bhd’s net profit increased 20% to RM15.21mn for 2QFY18, from RM12.63mn thanks to higher revenue from its manufacturing of beverages segment. Revenue increased 15% YoY to RM114.2mn from RM99.55mn. For 1HFY18, the group’s net profit was up by 21% YoY to RM31.98mn from RM26.51mn while the revenue was up 10% YoY to RM223.5mn from RM202.43mn. The group announced an interim dividend of 3sen per share. (Bursa Malaysia/The Edge) Jaya Tiasa Holdings Bhd’s net profit jumped 45.5% YoY for 1QFY18 to RM28.8mn from RM19.8mn, mainly on the back of higher profit margin of its oil palm division, besides costsaving strategies. Revenue was up 3.8% YoY to RM255.74mn from RM246.34mn. (Bursa Malaysia/The Edge) Ahmad Zaki Resources Bhd’s net profit 3QFY17 grew 17.7% YoY to RM10.03mn from RM8.52mn, as the group was subjected to lower tax expense. Quarterly revenue grew 8.8% YoY to RM294.75mn from RM270.85mn, largely attributed to improved operations of the Plantation and Oil and Gas divisions. For 9MFY17, the group recorded a net profit of RM31.99mn, which was 68.9% higher than the RM18.93mn reported in 9MFY16, while revenue fell 7.3% YoY to RM782.42mn from RM844.28mn. (Bursa Malaysia/The Edge) Southern Acids (M) Bhd's net profit in 2QFY18 fell 33.5% YoY to RM5.74mn from RM8.62mn, mainly due to lower contribution from the oleo chemical division. Revenue for the quarter stood at RM189.05mn versus RM161.32mn from a year ago. For 1HFY18, the group posted a net profit of RM13.48mn, down 23.9% YoY from the RM17.72mn. Meanwhile, revenue was 12.1% YoY higher at RM367.71mn compared to RM328.08mn. (Bursa Malaysia/The Edge) Puncak Niaga Holdings Bhd announced a narrower net loss of RM25.38mn for 3QFY17 compared with RM102.38mn a year ago due to a reversal of provision for foreseeable losses in the previous year as well as cost recognition and fair value gain on investment properties. Meanwhile, quarterly revenue expanded 25% YoY to RM37.27mn from RM29.75mn. For 9MFY17, it reported a net loss of RM98.49mn, down 41% YoY against RM166.18mn despite revenue expanded 64% YoY to RM87.21mn from RM53.2mn. (Bursa Malaysia/The Edge) Page 5 of 9
8. 30-Nov-17 N e w s I n B r i e f Economy Asia Gas Tariff Revision for Non-Power Sector Effective Jan 1 Gas Malaysia Bhd today announced that the revision of the natural gas tariff for the nonpower sector in Peninsular Malaysia will be effective from Jan 1 , 2018 to June 30, 2018. In a filing to Bursa Malaysia, Gas Malaysia said it had received the approval from the government in a letter from the Energy Commission dated Nov 28, 2017. “The government has prescribed the incentive-based regulation (IBR) framework which sets the base tariff (BT) for a regulatory period of three years from January 2017 and allows changes in the gas costs to be passed through the gas cost pass through (GCPT) mechanism every six months,” it said. The average natural gas BT is set at RM30.90 per one million British Thermal Units (MMBtu) for the period beginning January to June 2018 in line with Gas Malaysia’s announcement on Dec 28, 2016. In addition, under the GCPT mechanism, a surcharge of RM1.62 per MMBtu will apply to all tariff categories due to the increased liquefied natural gas (LNG) price against the reference price in the BT in this period. This translates to an average effective tariff of RM32.52 per MMBtu. (FMT News) Petrol Price Remains Unchanged, Diesel Up By 2 Sen The price of petrol remain unchanged for the next one week. However the price of diesel increased by 2 sen. RON95 unchanged at RM2.30 per litre, while RON97 retailed at RM2.58 per litre. The price of diesel increased to RM2.25 per litre, up from RM2.23 for the week ending midnight. The Domestic Trade, Co-operatives and Consumerism Ministry (KPDNKK) said the new prices will take effect between Nov 30 and Dec 6. The weekly fuel pricing mechanism came into effect in April this year. Petrol and diesel price had been had been managed via monthly float system since Dec 1, 2014. (New Straits Times) Japan Retail Sales Unchanged in October Retail sales in Japan were roughly flat on a seasonally adjusted basis in October, the Ministry of Economy, Trade and Industry said. That missed forecasts for an increase of 0.2% and was down from 0.8% in September. On a yearly basis, retail sales sank 0.2% - again missing expectations for a flat reading following the upwardly revised 2.3% jump in the previous month (originally 2.2%). Sales from large retailers were down 0.7% on year, beating expectations for a fall of 0.8% following the 1.9% gain a month earlier. (RTT News) Singapore PPI Inflation Eases for Second Month Singapore's producer price inflation eased for the second straight month in October, figures from the Department of Statistics showed. The manufactured product price index climbed 2.1% year-over-year in October, following a 2.3% rise in September. The measure has been rising since December last year. The oil and non-oil indices grew 12.9% and 0.2%, respectively in October from a year ago. The domestic supply price index rose 3.5% annually in October and climbed 1.1% from a month ago. On a monthly basis, producer prices edged up 0.1% from September, when it increased by 1.5%. Data also revealed that import price inflation moderated to 3.2% in October from 4.9% in the preceding month. Export prices also increased at a slower rate of 1.1% yearly after a 2.4% rise in September. (RTT News) United States Second Estimate of US Q3 GDP Up 3.3%, vs. 3.2% Expected The U.S. economy grew faster than initially thought in the third quarter, notching its quickest pace in three years, as increases in business investment in inventories and equipment offset a moderation in consumer spending. Gross domestic product expanded at a 3.3% annual rate in the third quarter also boosted by a rebound in government spending, the Commerce Department said in its second estimate. That was the fastest pace since the third quarter of 2014 and a pickup from the second quarter's 3.1% rate. The economy was previously reported to have grown at a 3.0% pace in the July-September period. It was the first time since 2014 that the economy experienced growth of 3.0% or more for two straight quarters. The growth pace, however, likely exaggerates the health of the economy as inventories, Page 6 of 9
9. 30-Nov-17 goods yet to be sold , contributed 0.8 percentage point to third-quarter GDP growth - up from the previously reported 0.73 percentage point. Excluding inventory investment, the economy grew at a 2.5% rate. When measured from the income side, output also expanded at a 2.5% rate. The government said after-tax corporate profits surged at a 5.8% rate last quarter after rising at only a 0.1% pace in the second quarter. (CNBC) Yellen: Recovery 'Increasingly Broad Based' in Both U.S. and Worldwide The U.S. economy has gathered steam this year and will warrant continued interest rate increases amid a strengthened global recovery, outgoing Federal Reserve Chair Janet Yellen told Congressional leaders in her final scheduled testimony on Capitol Hill. Her valedictory session before the Joint Economic Committee described an economy where the jobs market remains strong and economic growth has hit three percent for two quarters running, above the Fed’s estimate of U.S. potential and likely enough for an expected December rate increase. It also became a forum for a subtle challenge by Yellen to some of the ideas underlying the Republican tax plan, particularly the idea that a corporate tax cut would increase workers’ wages. The connection is tenuous, Yellen said in response to lawmakers’ questions, requiring that businesses use the extra money to invest, raise productivity, and then pass some of the benefits along to workers. But those impacts “are very hard to detect in economic data. It is not strong enough or pronounced enough to come across in a clear way,” she said in testimony that consistently steered lawmakers toward reforms she feels could boost the economy’s capacity to grow -- including improved education and policies targeted to raise investment and innovation. She did not comment on the timing of the next rate increase, which markets now expect and which Fed officials have telegraphed will come during the upcoming Dec. 12-13 policy meeting. (Reuters) U.S. Pending Home Sales Jump 3.5% in October Contracts to buy previously owned homes rebounded in October as the market recovered from hurricane-related effects in the South of the country but activity continued lag year ago levels. The National Association of Realtors said on Wednesday its pending home sales index rose to a reading of 109.3. September’s index was downwardly revised to 105.6. Economists polled by Reuters had forecast pending home sales rising 1.0% last month. Pending home contracts are seen as a forward-looking indicator of the health of the housing market because they become sales one to two months later. The housing sector has regained some momentum recently after treading water for much of the year because of a lack of inventory which has driven up prices, and both labor and land shortages. Compared to one year ago, pending sales were still down 0.6%. Contracts surged 7.4% in the South as it snapped back after the effects of Hurricanes Harvey and Irma in August and September. Sales also increased in the Northeast and Midwest while they fell 0.7% in the West. The NAR said that the number of homes for sale in October was the lowest for the month since 1999. (Reuters) Fed's Beige Book: Inflationary Pressures Picking Up The Federal Reserve in its Beige Book Wednesday said inflationary pressures have strengthened, paving the way for an interest rate hike in December. The U.S. economy continued to grow at a "modest to moderate pace" through mid-November as the labour market tightened, the survey also noted. "Most districts reported employers were having difficulties finding qualified workers across skill levels," the report said. Still, "wage growth was modest or moderate in most districts. "Hours before, the Commerce Department reported that U.S. gross domestic product surged up by an upwardly revised 3.3% in the third quarter compared to the originally reported 3.0% jump. Economists had expected the increase in GDP to be upwardly revised to 3.2%. Also today, Federal Reserve Chair Janet Yellen cemented expectations for a U.S. interest rate hike in December with a rosy assessment of the domestic economy. The outgoing Fed leader also said that inflation will move toward the Fed's 2% annual target. "The economic expansion is increasingly broadbased across sectors as well as across much of the global economy," Yellen said in her remarks. (RTT News) Page 7 of 9
10. 30-Nov-17 Europe and Uni ted Kingdom Rapid UK Consumer Borrowing Growth Cools Again Britons took on credit at the slowest rate in 18 months in October , easing some of the Bank of England’s concerns about a rapid build-up of household debt, but other figures pointed to a murky outlook for the economy ahead of Brexit. Squeezed by a sharp rise in inflation following last year’s vote to leave the European Union, until recently British consumers had shown little sign of curbing their propensity to borrow. But the BoE said annual growth in consumer lending cooled for the fourth time in the last five months, easing to 9.6% in October from September’s 9.8%. It was the weakest increase since April 2016. BoE Deputy Governor Jon Cunliffe said he did not think British households were in a “debt-fueled binge” but added that fast rates of credit growth needed to be watched. A recent peak of consumer lending growth of 10.9% remains a few percentage points lower than the rates seen in the early 2000s. But the BoE has put pressure on banks to make sure they are not taking too much risk with their lending to consumers. (Reuters) UK Shop Prices Slip 0.1% in November for Third Month Running: BRC British shop prices edged down by an annual 0.1% for the third month in a row during November, according to a survey that chimed with the Bank of England’s thinking that inflation may have peaked around now. Although prices for non-food goods declined at the slowest rate since May 2013, food price inflation cooled this month, Retail Consortium (BRC) and market research firm Nielsen said. Still, the 0.1% drop in overall shop prices matched the shallowest rate of shop price deflation for the last four years. After raising interest rates for the first time in 10 years earlier this month, the Bank of England said it thought consumer price inflation - pushed up by the pound’s fall after last year’s Brexit vote - had probably peaked around now. Although inflation looks set to run above the BoE’s 2% target for the next few years, most economists say they do not expect the BoE to raise rates again until 2019. Price pressures among non-food retailers had been higher than for food vendors, the BRC said, reflecting the expiration of currency hedging contracts that had allowed them to protect customers from the inflationary effect of sterling’s plunge last year. The official measure of consumer price inflation unexpectedly held steady at 3.0% in October. (Reuters) Eurozone Sentiment Booms, Inflation Expectations Grow Eurozone economic sentiment rose in November for the sixth consecutive month to its highest level in more than 17 years, data from the European Commission showed on Wednesday, while inflation expectations grew. The new rise confirmed the solid economic recovery of the 19-country currency bloc despite the strong euro and political crisis in two of its largest members, Germany and Spain. The buoyant sentiment was also compounded by expectations of higher prices among manufacturers and consumers, a positive signal for the European Central Bank’s efforts to raise inflation closer to target. The European Commission’s monthly survey showed that sentiment in the euro zone rose to 114.6 in November from 114.1 in October, in line with the average forecast of economists polled by Reuters. It was the highest reading since October 2000, and well above the long-term average of 100.0. The Commission’s overall business climate index, a separate indicator which points to the phase of the business cycle, also rose to 1.49 in November from 1.44 in October, the highest level in 10 years, albeit below market expectations of a rise to 1.53. (Reuters) German Inflation Accelerates More Than Expected Germany's inflation accelerated for the first time in three months in November and exceeded economists' expectations, preliminary data from Destatis showed. The consumer price index rose 1.8% year-on-year following 1.6% increase in October. Economists had forecast 1.7% inflation. On a month-on-month basis, the CPI climbed 0.3% in November, which was in line with economists' expectations. The harmonized index of consumer prices, or HICP, rose 1.8% year-on-year after a 1.5% climb in October. Economists were looking for 1.7% inflation. Compared to the previous month, the EU measure of inflation edged up 0.3%, which was slightly faster than economists' forecast for 0.2% gain. Destatis is set to release final figures for November inflation on December 13. (RTT News) Page 8 of 9
11. 30-Nov-17 Share Buy-Back : 29 November 2017 Company CBIP DAIBOCI FFHB FIAMMA LIENHOE LSTEEL NYLEX PBA PECCA Bought Back Price (RM) Hi/Lo (RM) 305,900 87,000 27,500 30,000 398,500 190,000 216,000 1,000 74,000 1.84/1.74 2.23/2.20 0.66/0.645 0.51 0.35 0.525/0.51 0.815/0.80 1.22/1.21 1.33/1.28 1.85/1.73 2.23/2.20 0.66/0.64 0.51/0.50 0.35 0.57/0.50 0.815/0.80 1.22/1.21 1.35/1.28 Total Treasury Shares 15,374,027 409,600 1,051,000 21,360,000 16,312,600 1,952,800 3,852,724 269,900 3,018,600 Source: Bursa Malaysia Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 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 29-Nov-17 AUTOMOBILE BAUTO 2.08 2.50 0.78 10.2 14.3 20.4 14.5 5.6 5.5 2.20 -5.5 1.84 13.0 MBMR 2.12 2.32 0.94 20.7 23.2 10.3 9.1 1.9 2.2 2.60 -18.5 2.01 5.5 -2.3 -0.9 PECCA 1.35 1.68 na 7.7 11.0 17.6 12.3 3.7 4.1 1.70 -20.6 1.28 5.5 -15.1 UMW 5.23 4.20 1.38 -0.4 19.2 na 27.2 0.0 1.9 6.08 -14.0 4.09 27.8 23.9 -2.7 BANKS & FINANCIAL SERVICES ABMB 3.62 4.80 1.40 33.1 30.6 10.9 11.8 4.4 4.4 4.49 -19.4 3.62 0.0 AFFIN 2.41 3.00 0.90 29.4 33.6 8.2 7.2 3.3 3.3 3.00 -19.7 2.22 8.6 0.8 AMBANK 4.15 5.10 1.21 43.9 48.6 9.4 8.5 4.2 4.3 5.70 -27.2 4.08 1.7 -3.7 CIMB 5.94 7.00 1.50 49.6 51.9 12.0 11.4 4.2 4.3 7.08 -16.1 4.49 32.3 31.7 HLBANK 15.32 17.50 0.57 104.9 114.2 14.6 13.4 2.9 2.9 16.48 -7.0 13.02 17.7 13.5 MAYBANK 9.20 10.20 0.96 69.6 75.9 13.2 12.1 5.4 5.4 9.86 -6.7 7.68 19.8 12.2 PBBANK 20.26 23.60 0.60 137.2 142.4 14.8 14.2 2.8 2.9 20.90 -3.1 19.50 3.9 2.7 RHBBANK 4.87 5.20 1.54 50.6 52.2 9.6 9.3 3.1 3.1 5.59 -12.9 4.62 5.4 3.4 BURSA 9.68 11.10 0.78 40.2 39.0 24.1 24.8 3.5 3.5 10.98 -11.8 8.08 19.8 11.0 -20.7 CONSTRUCTION BPURI 0.35 0.38 0.58 4.7 4.6 7.4 7.5 0.0 0.0 0.49 -28.9 0.33 6.2 GADANG 1.08 1.75 0.47 15.2 14.3 7.1 7.6 2.8 2.8 1.37 -21.2 0.89 22.0 2.9 GAMUDA 4.74 6.00 0.97 27.8 34.5 17.0 13.7 2.5 2.5 5.52 -14.1 4.58 3.5 -0.8 IJM 3.06 2.89 0.84 15.3 13.7 20.0 22.3 2.5 3.1 3.61 -15.2 2.97 3.0 -4.4 PESONA 0.48 0.55 0.85 3.5 5.8 13.6 8.2 3.2 3.2 0.74 -35.4 0.48 0.0 -21.5 60.9 SENDAI 0.93 0.58 1.32 8.2 9.6 11.2 9.7 1.1 1.1 1.39 -33.5 0.51 83.2 SUNCON 2.40 2.65 na 11.3 14.7 21.2 16.3 2.3 2.3 2.44 -1.6 1.61 49.1 41.2 WCT 1.51 1.61 1.00 11.5 12.5 13.1 12.1 2.0 2.0 2.48 -39.0 1.49 1.3 -12.2 LITRAK 5.85 6.26 0.32 41.9 45.7 14.0 12.8 4.3 4.3 6.15 -4.9 5.57 5.0 -0.5 ANNJOO 3.70 4.40 1.33 41.3 45.4 9.0 8.1 4.3 5.9 3.98 -7.0 1.97 87.8 70.5 CHINHIN 1.18 1.36 na 5.7 9.7 20.6 12.1 2.5 4.2 1.49 -20.8 0.85 38.8 35.6 CARLSBG 14.80 18.06 0.73 79.3 86.2 18.7 17.2 5.3 5.8 16.00 -7.5 13.72 7.9 6.3 HEIM 17.58 19.14 0.51 79.6 84.0 22.1 20.9 4.1 4.3 19.58 -10.2 15.60 12.7 7.3 AEON 1.81 1.97 0.45 4.7 6.7 38.3 27.1 1.9 2.2 2.70 -33.0 1.77 2.3 -29.6 AMWAY 7.05 8.18 0.35 35.7 43.9 19.7 16.1 4.3 5.4 8.18 -13.8 7.05 0.0 -3.8 F&N 25.60 27.41 0.18 102.6 150.9 24.9 17.0 2.2 2.3 26.00 -1.5 22.44 14.1 9.0 HUPSENG 1.11 1.25 0.43 5.2 5.4 21.6 20.4 4.1 4.1 1.28 -13.3 1.08 2.8 -3.5 Building Materials CONSUMER Brewery Retail JOHOTIN 1.28 1.48 0.69 10.4 13.3 12.3 9.6 3.5 3.9 1.76 -27.3 1.11 15.3 3.2 NESTLE 94.50 120.50 0.40 292.7 325.4 32.3 29.0 2.9 3.1 97.00 -2.6 74.12 27.5 20.8 100.4 PADINI 5.09 4.67 0.64 23.9 28.0 21.3 18.2 2.3 2.5 5.49 -7.3 2.26 125.2 POHUAT 1.79 2.50 0.68 27.3 27.3 6.6 6.6 4.5 4.5 2.08 -13.9 1.55 15.5 3.5 QL 4.00 3.26 0.30 12.1 12.8 33.1 31.2 1.1 1.1 4.03 -0.7 3.26 22.9 20.1 SIGN 0.81 0.92 1.06 6.7 6.9 12.0 11.6 3.1 4.3 1.07 -24.8 0.79 1.9 1.3 35.92 52.08 1.30 198.6 187.4 18.1 19.2 5.6 5.6 51.04 -29.6 35.78 0.4 -18.7 GENTING 8.93 11.53 1.49 48.7 54.4 18.3 16.4 1.6 1.8 10.00 -10.7 7.65 16.8 12.4 GENM 5.13 6.51 1.52 18.7 27.0 27.4 19.0 1.6 1.8 6.38 -19.6 4.44 15.6 13.5 BJTOTO 2.26 3.34 0.82 18.3 21.5 12.3 10.5 6.2 7.1 3.13 -27.8 2.25 0.4 -23.6 LUSTER 0.11 0.15 2.09 0.4 0.4 30.3 30.5 0.0 0.0 0.16 -31.3 0.05 120.0 120.0 Tobacco BAT GAMING Casino NFO HEALTHCARE Hospitals/ Pharmaceutical CCMDBIO 2.38 2.70 0.59 14.0 15.0 17.0 15.8 3.9 4.2 2.43 -2.1 1.90 25.3 20.2 IHH 5.64 6.40 0.74 6.7 11.9 83.8 47.5 0.5 0.5 6.60 -14.5 5.42 4.1 -11.2 KPJ 1.00 1.09 0.40 3.2 3.6 31.0 28.0 1.8 2.0 1.14 -12.7 0.96 3.4 -4.8 HARTA 9.50 6.87 0.75 19.4 24.6 49.0 38.7 0.9 1.2 9.80 -3.1 4.53 109.7 96.7 KOSSAN 7.85 8.80 0.08 29.1 38.3 27.0 20.5 1.8 2.4 8.31 -5.5 5.62 39.7 19.1 SUPERMX 1.90 1.80 0.17 10.1 15.2 18.7 12.5 2.9 2.7 2.21 -14.0 1.69 12.4 -10.0 TOPGLOV 6.78 6.30 -0.21 26.4 29.4 25.7 23.0 2.1 2.1 7.05 -3.8 4.56 48.7 26.7 KAREX 1.45 1.00 0.29 2.8 2.8 52.0 52.5 1.4 0.5 2.52 -42.5 1.37 5.8 -38.6 SCIENTX 8.60 9.38 0.42 52.3 64.9 16.5 13.3 1.9 2.1 9.85 -12.7 6.67 28.9 28.4 SKPRES 1.97 2.20 0.41 8.3 10.4 23.8 19.0 2.1 2.6 2.15 -8.4 1.24 58.9 52.7 ASTRO 2.84 3.40 1.33 13.2 14.5 21.5 19.5 4.4 4.6 2.94 -3.4 2.47 15.0 9.2 MEDIA PRIMA 0.70 0.50 0.59 -7.6 -3.8 na na 0.0 0.0 1.28 -45.7 0.66 6.1 -39.6 STAR 1.32 1.00 0.76 3.3 4.0 39.8 32.7 31.8 13.6 2.22 -40.5 1.32 0.0 -32.2 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 0.41 0.75 1.17 3.6 4.5 11.3 9.1 2.4 2.4 0.69 -40.6 0.23 82.2 60.8 LCTITAN 4.79 6.66 na 42.8 63.4 11.2 7.6 4.8 5.2 6.53 -26.6 4.14 15.7 -26.3 MHB 0.85 0.78 1.79 -2.0 -0.5 na na 0.0 0.0 1.16 -27.2 0.63 35.2 -7.7 MISC 7.01 6.56 1.08 57.2 46.8 12.3 15.0 4.3 4.3 7.90 -11.3 6.89 1.7 -4.6 PANTECH 0.64 0.69 1.18 4.0 6.1 16.1 10.4 2.8 4.3 0.74 -13.5 0.44 47.1 43.8 PCHEM 7.47 8.05 1.00 52.7 49.8 14.2 15.0 3.1 2.9 7.80 -4.2 6.54 14.2 7.0 SENERGY 1.24 1.66 2.81 6.6 -0.4 18.8 na 0.8 0.0 2.10 -41.0 1.24 0.0 -23.5 SERBADK 3.12 3.40 na 22.9 25.7 13.7 12.1 2.2 2.5 3.12 0.0 1.51 106.6 108.0 UMWOG 0.33 0.51 1.72 -1.7 0.4 na 80.4 0.0 0.0 0.92 -64.8 0.27 20.4 -62.0 UZMA 1.54 1.55 1.18 11.3 12.3 13.6 12.5 0.0 0.0 1.98 -22.2 1.28 20.3 -9.4 FGV 1.80 2.01 1.83 2.1 3.7 86.1 48.6 2.8 2.8 2.18 -17.4 1.44 25.0 16.1 IJMPLNT 2.82 2.69 0.30 12.3 9.1 22.9 30.9 2.5 2.8 3.60 -21.7 2.81 0.4 -17.1 IOICORP 4.44 4.14 1.23 17.3 21.0 25.6 21.1 2.1 3.6 4.81 -7.7 4.31 3.0 0.9 KFIMA 1.66 1.89 0.51 19.9 13.3 8.3 12.5 5.4 5.4 1.96 -15.3 1.60 3.7 -2.4 KLK 24.36 26.18 0.77 100.5 120.7 24.2 20.2 2.1 2.5 25.50 -4.5 23.00 5.9 1.5 SIME 8.94 9.80 1.50 34.2 37.3 26.1 23.9 2.6 2.6 9.70 -7.8 7.96 12.3 10.4 UMCCA 6.65 7.52 0.41 37.5 31.8 17.7 20.9 3.5 2.6 7.08 -6.1 5.59 18.9 11.4 GLOMAC 0.61 0.50 0.56 1.4 3.4 41.8 17.8 4.5 4.5 0.75 -18.8 0.59 2.5 -12.9 HUAYANG 0.61 0.69 0.67 17.3 1.8 3.5 33.1 6.6 0.8 1.21 -50.0 0.61 0.0 -46.5 IBRACO 0.88 0.94 na 3.3 10.5 27.0 8.4 2.3 4.5 1.05 -16.2 0.76 16.6 -12.0 IOIPG 1.89 2.13 0.83 18.9 16.5 10.0 11.4 3.2 3.2 2.22 -14.9 1.85 2.3 -3.1 MAHSING 1.52 1.70 1.04 13.8 13.0 11.0 11.6 4.3 4.3 1.64 -7.3 1.34 13.4 6.3 SNTORIA 0.70 0.86 0.34 7.0 9.7 10.0 7.2 0.0 1.4 1.00 -30.0 0.66 6.1 -12.5 PLANTATIONS PROPERTY Note: SNTORIA proposed bonus issue of warrants & right issue of shares. For more details please refer to 25.09.17 report. SPB 4.65 5.97 0.67 25.6 22.8 13.4 15.0 2.6 2.6 5.19 -10.4 4.32 7.6 5.2 SPSETIA 3.42 4.10 0.87 11.5 12.1 14.4 13.6 4.1 4.1 4.38 -22.0 3.03 12.9 12.2 SUNWAY 1.65 1.75 0.75 15.7 14.8 12.3 13.1 3.0 3.0 1.96 -15.8 1.24 33.2 28.3 SUNREIT 1.68 1.87 0.74 9.2 10.0 18.2 16.7 5.5 6.0 1.81 -7.2 1.65 1.8 -2.3 CMMT 1.46 1.72 0.44 8.1 8.6 18.1 16.9 5.8 6.1 1.72 -15.1 1.40 4.3 -4.6 -32.1 REIT POWER & UTILITIES MALAKOF 0.93 1.16 0.64 6.3 6.0 14.8 15.5 7.5 7.5 1.43 -35.0 0.93 0.5 PETDAG 23.88 22.08 0.57 102.8 105.1 23.2 22.7 3.2 3.3 25.70 -7.1 21.00 13.7 0.3 PETGAS 16.16 19.10 0.95 89.1 98.8 18.1 16.4 4.1 4.3 21.98 -26.5 16.02 0.9 -24.1 TENAGA 15.40 17.38 0.74 131.8 130.0 11.7 11.8 2.9 2.9 15.48 -0.5 13.00 18.5 10.8 YTLPOWR 1.13 1.17 0.73 8.2 9.7 13.7 11.7 4.4 4.4 1.50 -24.7 1.13 0.0 -22.6 TELECOMMUNICATIONS AXIATA 5.32 5.75 1.36 14.4 16.1 37.0 33.1 1.4 1.5 5.47 -2.7 4.18 27.3 12.7 DIGI 4.60 5.20 0.79 19.5 20.0 23.6 23.0 4.2 4.3 5.19 -11.4 4.36 5.5 -4.8 MAXIS 5.90 6.10 0.77 26.0 26.2 22.7 22.5 3.4 3.4 6.60 -10.6 5.48 7.7 -1.3 TM 5.98 7.20 0.65 22.6 23.2 26.5 25.8 3.4 3.5 6.69 -10.6 5.81 2.9 0.5 TECHNOLOGY Semiconductor & Electronics ELSOFT 2.75 2.70 0.58 11.3 13.4 24.4 20.5 2.9 3.4 2.95 -6.8 1.29 114.0 95.9 IRIS 0.16 0.25 1.87 -1.3 0.6 na 28.0 0.0 0.0 0.22 -29.5 0.10 55.0 40.9 INARI 3.31 3.05 0.88 9.8 14.3 33.9 23.2 3.0 3.1 3.37 -1.8 1.61 106.0 99.8 MPI 13.00 15.00 0.24 89.5 105.5 14.5 12.3 2.1 2.5 14.52 -10.5 7.23 79.8 75.4 UNISEM 3.51 3.85 0.88 23.5 27.1 14.9 12.9 3.4 3.4 4.25 -17.4 2.29 53.3 48.7 TRANSPORTATION Airlines AIRASIA 3.17 3.83 1.02 53.1 38.3 6.0 8.3 1.3 1.6 3.59 -11.7 2.16 46.8 38.4 AIRPORT 8.15 8.47 1.28 19.6 19.7 41.6 41.3 1.2 1.2 9.45 -13.8 5.91 37.9 34.5 Freight & Tankers PTRANS 0.29 0.44 na 2.1 2.3 13.9 12.5 2.2 2.4 0.38 -25.4 0.14 102.3 95.9 TNLOGIS 1.31 1.80 1.10 12.0 13.6 10.9 9.6 3.3 3.8 1.83 -28.5 1.29 1.6 -16.0 WPRTS 3.45 4.06 0.89 17.1 16.8 20.1 20.5 3.7 3.7 4.39 -21.4 3.45 0.0 -19.8 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 24.66 23.30 1.25 172.7 189.1 14.3 13.0 2.4 2.4 -1.4 17.2 43.79 42.2 0.0 OCBC 12.30 13.50 1.20 95.5 104.0 12.9 11.8 5.7 6.7 -0.2 8.9 8.84 37.9 0.0 UOB 26.02 26.90 1.07 200.8 215.5 13.0 12.1 2.7 2.7 -0.2 20.1 29.78 27.5 0.0 PLANTATIONS WILMAR 3.16 3.63 0.85 28.9 31.1 10.9 10.2 2.5 2.8 -21.0 3.1 2.60 -12.0 0.0 IFAR 0.40 0.53 0.97 4.9 5.2 8.1 7.6 3.0 3.2 -33.6 0.4 1.28 -24.8 0.0 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
14. RESULTS UPDATE Thursday , November 30, 2017 FBMKLCI: 1,720.38 Sector: Transportation THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM3.83 (+20.7%) AirAsia Berhad Last Traded: RM3.17 3Q17 Was Way Above Expectations Tan Kam Meng, CFA Tel: +603-2167 9605 BUY kmtan@ta.com.my Review AirAsia’s (AAB) 9M17 consolidated earnings of RM1.27bn contained forex gain of RM221.5mn, fair value loss on derivative of RM300.2mn, remeasurement gain of RM214.4mn and negative goodwill of RM127.3mn. Excluding these and adding back unrecognised loss from AirAsia India, AirAsia’s 9M17 core profit of RM1.34bn beat expectations, accounting for 91% of our full-year forecast and 103% of consensus estimates. The variance was mainly due to higher-than-expected RPK of AAB and TAA operations. Malaysia AirAsia (MAA), Indonesia AirAsia (IAA) and Philippines AirAsia (PAA) (AAB) – gaining market share (see Figure 1 & 2). 3Q17 demand (RPK) increased by 11% YoY on the back of stable load of 86.4%. The yield was slightly weaker by 1.5% while cost increased by 4.5%. Overall, AAB’s 3Q17 earnings growth was underpinned mainly by capacity expansion and increase in market share. According to management, MAA and PAA’s domestic market share increased to 54% (from 46%) and 16% (from 14%) respectively in 3Q17. Thailand (TAA) - competition still intense (see Figure 3 & 4). 3Q17 yield (RASK) was stabilised at THB1.53 but the rise in cost (CASK) to THB1.46 (+2.0%) caused the spread to narrow further. The impact was partially mitigated by increase in capacity and higher load factor. In local currency, TAA reported PAT of THB472mn for 3Q17, which down 35.3% YoY. Overall, the group’s 9H17 result performance was a positive surprise, especially on the stronger-than-expected load factor, which mitigated the impact of higher fuel and staff costs. 9M17 adjusted profit rose 31.1% to RM1.3bn with a stronger cash pile of RM2.2bn as at 3Q17 versus RM1.7bn as at 4Q16. Impact We raise our 17 earnings projections by 20.7% after revising the load factor higher: 1) for AAB group to 87.5% (from 84.2% previously), and 2) for TAA to 87% (from 84% previously). FY18-19 earnings are relatively unchanged. Outlook 2018 would see net addition of 36 aircraft to be deployed in Malaysia (9), Thailand (7), Indonesia (7), Philippines (5), India (7) and Japan (1). ASK is expected to grow 17% YoY for AAB (TA forecast: 14.5%). The capex is limited as the group has migrated to sale and leaseback approach from asset ownership. In other words, new aircraft will be owned by AAC and subsequently leased to AirAsia group. The long-awaited AAC disposal is expected to be announced in end-17. www.taonline.com.my Share Information Bloomberg Code AIRAMK Stock Code 5099 Listing Main Market 3341.9 Share Cap (mn) 10593.8 Market Cap (RMmn) 0.1 Par Value 3.59/2.16 52-wk Hi/Lo (RM) 12465.0 12-mth Avg Daily Vol ('000 shrs) 62.8 Estimated Free Float (%) Beta 1.0 Major Shareholders (%) Tune Live Sdn Bhd - 16.7% Tune Air Sdn Bhd - 15.5% JP Morgan - 5.0% Forecast Revision Forecast Revision (%) Net profit (RMm) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 20.7 1.7 1775.6 1278.7 1,311.0 1282.0 135.4 99.7 Buy (Maintained) Financial Indicators Net debt/equity (x) CFPS (sen) P/CFPS (x) ROE (%) ROA (%) NTA/Share (RM) Price/ NTA (x) FY17 0.8 4.7 nm 22.3 7.6 2.7 1.2 FY18 0.8 2.8 nm 13.0 5.1 3.1 1.0 % of FY 91.0 103.0 Above Above AIRASIA (5.1) (4.5) 6.4 14.9 FBM KLCI (1.6) (3.0) (2.6) 6.3 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 4
15. 30-Nov-17 Meanwhile , Indonesia AirAsia’s listing is also expected to be concluded in end-17 while Philippines AirAsia’s listing can be expected in 2H18. Management expects a stable jet fuel price in 2018 and is not in a hurry to take position to hedge its fuel requirement for 2H18. For 1Q18 and 2Q18, the group has hedged 16% and 17% respectively. India operation is expected to see its maiden profit in 2019 when the airline ramps up the capacity to 21 aircraft by 2H18 and start the international operations then. To drive the ancillary revenue higher to RM60/pax level, AirAsia will launch Red Cargo, Red Box, BigPay and Santan in 4Q17 to increase its menu list. Red Cargo is simply a cargo company to service AirAsia’s 6 operating airlines. Red Box is dealing with B2B and C2C e-commerce service, which means the company will partner a big logistics company soon in 1Q18. BigPay encompasses Alipay and FX eWallet to be launched in Dec-17. Santan’s is AirAsia in-house F&B brand. Valuation We raise AirAsia’s target price higher to RM3.83 (from RM3.76 previously) based on unchanged 10x CY18 EPS. We opine that the strong results and other on-going corporate exercises have proven the recent sell-down in share as irrational. We see this as a rare opportunity to accumulate. Key risks to our call are: 1) declaration of war on North Korea where airline operators will always have the first hits; and 2) spike in oil price due to geopolitical uncertainty. Table 1: Earnings Summary (RMmn) FYE Dec 31 R evenue E B ITDA E B ITDA ma rg in (% ) P reta x profit Adj P BT R eported net profit Adj core profit* R eported E P S (s en) Adjus ted E P S ** (s en) Adjus ted E P S g rowth (% ) P E R (x) GDP S (s en) Div yield (% ) Core R OE (% ) FY15 6297.7 2299.1 36.5 215.0 719.3 541.0 683.4 19.4 24.6 142.7 12.9 4.0 1.3 15.2 2016 6846.1 2822.1 41.2 2133.1 2273.5 2050.0 2270.2 73.7 81.6 232.2 3.9 12.0 3.8 41.0 FY17F# 8635.9 2825.4 32.7 1775.6 1783.1 1768.1 1775.6 52.9 53.1 (34.9) 6.0 4.0 1.3 22.3 FY18F# 9447.5 2729.7 28.9 1431.6 1439.1 1271.2 1278.7 38.0 38.3 (28.0) 8.3 5.0 1.6 13.0 FY19F# 11236.8 2805.7 25.0 1554.6 1563.1 1323.1 1331.6 39.6 39.8 4.1 8.0 6.0 1.9 12.2 * C o re ne t pro fit c o mpris e s s hare o f pro fits fro m J V and as s o c iate s , whic h hav e ne g ativ e bo o k v alue ** B as e d o n g ro up's c o re ne t pro fit # C o ns o lidating IA A and P A A 's e arning s Page 2 of 4
16. 30-Nov-17 Table 2 : 3Q17 Results Analysis (RMmn) (Proforma) YE 31 Dec (RM'mn) Revenue (Proforma) 3Q16 2Q17 3Q17 QoQ (% ) YoY (% ) 9M16 9M17 YoY (% ) 2131.7 2378.3 2447.8 2.9 14.8 6194.5 7052.7 13.9 E B ITDA 736.0 736.2 765.5 4.0 4.0 1967.9 2097.4 6.6 Deprecia tion (206.6) (219.6) (271.2) 23.5 31.2 (597.4) (695.6) 16.4 E B IT 529.3 516.5 494.3 (4.3) (6.6) 1370.5 1401.8 2.3 Net fina nce cos t (123.8) (121.1) (120.1) (0.8) (3.0) (378.9) (365.1) (3.6) J V & As s ocia tes (28.3) 4.7 25.1 430.1 (188.6) 88.7 68.9 (22.3) EI 160.9 (185.3) 114.6 (161.8) (28.8) 637.5 258.9 (59.4) Unrecorded los s es from AAI 0.0 (8.0) (6.0) (25.1) nm 0.0 (23.0) nm 456.3 386.8 486.0 564.2 71.1 365.4 (27.9) 6.5 23.7 1636.0 998.5 1514.2 1232.3 (7.4) 23.4 Current ta x 295.5 (2.5) 25.6 (35.2) >100 >100 (9.1) 3.2 >100 Deferred ta x (118.7) (318.1) (23.8) (92.5) (80.0) (240.5) (359.0) 49.3 P BT Adj PBT* (2.8) 6.6 71.0 >100 >100 35.9 109.2 >100 R eported net profit Adj. net profit* 332.4 290.2 146.5 641.9 505.3 408.5 >100 (36.4) 52.0 40.8 1422.4 1025.4 1267.7 1344.7 (10.9) 31.1 R eported E P S (s en) 11.9 2.8 15.1 439.3 26.6 55.5 36.3 (34.6) 17.2 39.3 33.3 (15.3) 0.0 0.0 nm MI* Adj E P S (s en) 10.4 12.3 12.2 (0.5) Dividend (s en) 0.0 0.0 0.0 nm nm ppt ppt ppt E B ITDA ma rg in (% ) 34.5 31.0 31.3 0.3 (3.3) 31.8 29.7 (2.0) E B IT ma rg in (% ) 24.8 21.7 20.2 (1.5) (4.6) 22.1 19.9 (2.2) Adj P B T ma rg in (% ) 13.9 23.7 14.9 (8.8) 1.1 16.1 17.5 1.4 Core net ma rg in (% ) 13.6 27.0 16.7 (10.3) 3.1 16.6 19.1 2.5 * E s timate s Figure 1: AAB: Additional capacity not dampening load significantly % mn ASK (LHS) RPK (LHS) Load factor (RHS) 16000 15000 100 84 86 88 86 88 88 Figure 2: AAB: Narrowing spread sen 18.0 Spread/ASK Revenue/ASK Cost/ASK 16.0 86 14.0 80 12.0 14000 10.0 13000 60 8.0 6.0 12000 40 11000 4.0 10000 20 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 2.7 2.5 1.4 2.0 2.4 1.3 2.1 2.0 0.0 1Q16 3Q16 1Q17 3Q17 Page 3 of 4
17. 30-Nov-17 Figure 3 : TAA: Strong load in 3Q17 Figure 4: TAA: Increased cost pressure THB mn 6,000 ASK (LHS) 87 RPK (LHS) Load factor (RHS) 84 83 2.0 100 89 5,000 % 86 86 81 Spread/ASK Revenue/ASK Cosk/ASK 1.8 1.6 80 4,000 1.4 1.2 60 3,000 1.0 0.8 40 2,000 20 1,000 0.6 0.4 0.4 0.1 0.2 - 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 0.1 0.2 0.2 0.0 0.1 0.0 1Q16 3Q17 3Q16 1Q17 3Q17 Source: AirAsia & TA Research 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 Thursday, November 30, 2017, the analyst, Tan Kam Meng, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 4 of 4
18. RESULTS UPDATE Thursday , November 30, 2017 FBMKLCI: 1,720.38 Sector: Toll THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Lingkaran Trans Kota Holdings Berhad TP: RM6.26 (+10.4%) Last Traded: RM5.85 Minimal Impact from MRT Line 1 Ooi Beng Hooi Tel: +603-2167 9612 HOLD benghooi@ta.com.my Results Review Litrak’s 1HFY18 net earnings of RM115.2mn came in within expectations, accounting for 47.8% and 49.3% of ours and consensus’ full-year estimate respectively. YoY, 1HFY18 net profit eased 4.0% to RM115.2mn as the revenue dropped 1.7% to RM263.7mn. The lower revenue was a result of lower traffic volume. We observe the operation of MRT Line 1, which commenced full line service on 17 July 2017, has minimal impact on LITRAK’s revenue. YoY, revenue recorded in 2QFY18, during which MRT Line 1 started full line service with 1-month free ride, was 1.8% higher at RM134.8mn. www.taonline.com.my Share Information Bloomberg Code Bursa Stock Code Listing Share Cap (mn) Market Cap (RMmn) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) LTK MK LITRAK 6645 Main Market 527.7 3087.7 6.15/5.57 378.5 24.1 0.32 Gamuda - 43.60 Amanah Saham Bumiputera - 7.92 Skim Amanah Saham - 7.38 EPF - 6.31 Forecast Revision QoQ, 2QFY18 net profit was 1.9% higher at RM60.1mn, in tandem with the 1.8% growth in revenue to RM134.8mn. Its associate, SPRINT, continued to incur minor loss of RM0.7mn versus a loss of RM0.9mn in the immediate preceding quarter. Impact Maintain our FY18 to FY20 earnings forecast. Outlook We expect the traffic plying LDP and SPRINT to be stable in near to medium term, at least until the completion of MRT Line 3 targeted in 2025 and well integration of first mile-last mile connections of public transport. Valuation No change to our target price of RM6.26, based on discounted FCF valuation with required rate of return of 5.3%. Maintain our HOLD call on the stock. Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 240.9 248.6 233.7 249.0 103.1 99.8 Hold (Maintained) Financial Indicators FY18 59.2 72.6 8.1 10.5 (0.5) nm FY19 31.9 71.2 8.2 10.8 (0.3) nm vs. TA vs. Consensus % of FY 47.8 49.3 Within Within Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth LITRAK (0.7) (0.7) (4.1) 2.6 FBM KLCI (1.6) (3.0) (2.6) 6.3 Net Debt / Equity (%) CFPS (sen) Price / CFPS (x) ROA (%) NTA/Share (RM) Price/NTA (x) Scorecard (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 2
19. 30-Nov-17 Table 1 : Earnings Summary (RMmn) YE Mar31 R evenue E B ITDA E B ITDA ma rg in (% ) P reta x profit Net profit Core Net P rofit E P S (s en) Core E P S (s en) E P S g rowth (% ) P E R (x) GDP S (s en) Div. Yield (% ) R OE (% ) 2016 416.2 353.3 84.9 228.7 174.1 174.1 33.5 33.5 25.0 17.5 25.0 4.3 30.4 2017 534.2 460.6 86.2 292.4 221.0 221.0 42.1 42.1 25.9 13.9 25.0 4.3 33.4 2018F 549.5 475.4 86.5 317.0 240.9 240.9 45.7 45.7 8.6 12.8 25.0 4.3 31.1 2019F 549.7 471.9 85.9 327.1 248.6 248.6 47.0 47.0 2.8 12.4 25.0 4.3 27.7 2020F 549.9 468.2 85.1 333.3 253.3 253.3 47.9 47.9 1.9 12.2 25.0 4.3 24.7 Table 2: 2QFY18 Results Analysis (RMmn) YE 31 Mar Tu rn o v e r EBIT Ne t In t In c / (e xp ) Asso c ia t e s P re t a x Ta xa t io n Re p o rt e d Ne t P ro f it Co re Ne t P ro f it 2Q17 132.4 98.1 (20.3) 0.3 78.1 (19.2) 58.9 58.9 1Q18 129.0 92.9 (18.7) (0.9) 73.3 (18.2) 55.1 55.1 2Q18 134.8 99.6 (18.7) (0.7) 80.3 (20.2) 60.1 60.1 QOQ% 4.5 7.2 (0.3) (22.2) 9.5 11.1 8.9 8.9 YoY% 1.8 1.6 (7.8) (344.1) 2.8 5.5 1.9 1.9 6MFY17 268.4 199.0 (40.5) 0.6 159.1 (39.1) 120.0 120.0 6MFY18 263.7 192.5 (37.4) (1.5) 153.6 (38.4) 115.2 115.2 YoY% (1.7) (3.3) (7.6) (364.0) (3.5) (1.9) (4.0) (4.0) Co re EP S GDP S 11.2 0.0 10.5 15.0 11.4 0.0 8.9 (100.0) 1.6 na 22.9 10.0 21.9 15.0 (4.5) 50.0 EBIT Ma rg in (% ) P re t a x Ma rg in (% ) Ne t Ma rg in (% ) Ta x Ra t e (% ) 74.1 59.0 44.5 24.5 72.0 56.9 42.8 24.8 73.9 59.6 44.6 25.2 % p ts 1.9 2.7 1.8 0.4 % p ts (0.2) 0.6 0.1 0.6 74.1 59.3 44.7 24.6 73.0 58.2 43.7 25.0 % p ts (1.1) (1.0) (1.0) 0.4 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 Thursday, November 30, 2017, the analyst, Ooi Beng Hooi, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 2
20. RESULTS UPDATE Thursday , November 30, 2017 FBMKLCI: 1,720.38 Sector: Property THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM1.70 (+11.6%) Mah Sing Group Bhd Last Traded: RM1.52 Sales Target On Track Thiam Chiann Wen Buy Tel: +603-2167 9615 cwthiam@ta.com.my Review Excluding the distribution to perpetual sukuk holders amounted to RM36.6mn, Mah Sing reported normalised net profit of RM236.5mn in 9M17. Results came in below expectations at 69% and 67% of ours and consensus’ full-year estimates. Earnings miss was largely due to slowerthan-expected progress billing. 9M17 revenue and normalised net profit edged lower by 2.7% and 1.0% YoY to RM2.2bn and RM236.5mn respectively. EBIT margin contracted 0.2%-point on higher selling, marketing and administrative expenses (+4.9% YoY). Sequentially, Mah Sing’s 3Q17 normalised net profit plunged 18.1% to RM74.0mn on the back of 3.1% decline in revenue. Lower sequential profit was largely impacted by the distribution of profit to perpetual sukuk holders. Mah Sing recorded new property sales of RM435mn in 3Q17 (+6.4% QoQ, 31% YoY), bringing the 9M17 sales to RM1.26bn (-10.5% YoY). Bulk of the 9M17 sales were derived from Southville City in Bangi. Lakeville Residence in KL and Merini East in Johor, which recorded new sales of RM237mn, RM299mn and RM105mn (collectively accounted for 51% of total 9MFY17 sales). Unbilled sales eased to RM2.8bn (1.1x our projected FY17 property revenue) from RM3.0bn a quarter ago. Impact Our FY17/18/19 earnings are revised by -3.3%/-3.6%/-4.7% respectively after incorporating the followings: - Reduce FY17/18/19 property sales assumptions to RM1.8bn/RM2.0bn/RM2.2bn from RM1.9bn/RM2.5bn/RM2.7bn, - Adjust progress billing assumptions to reflect timing of new launches. Outlook With 9M17 new sales amounted to RM1.26bn, management has maintained its sales target of at least RM1.8bn for 2017. 4Q17 sales are expected to be anchored by new launches of RM1.0bn and on-going phases worth RM1.8bn. Response for its recent launches was encouraging, with M Centura in Sentul (residential suites, 646 sf, from RM328k), M Vista in Penang (residential suites 536 sf, from RM345.8k) and Fern in Meridin East, Johor (2-storey link homes, 1,595sf, from RM410.6k) recorded an average booking rate of 95% during the weekend previews. Meanwhile, its M Vertica in Cheras (residential suites, 850sf, from RM450.8k) also achieved a strong 85% take up rate within two days during its official preview last weekend. Considering the sales performance of its recent launches, we believe demand for projects, which are affordably priced and located near city centre and public infrastructure, to remain resilient. Going forward, www.taonline.com.my Share Information Bloomberg Code MSGB MK Stock Code 8583 Listing Main Market 2425.7 Share Cap (mn) Market Cap (RMmn) 3,687.0 1.64/1.34 52-wk Hi/Lo (RM) 1,251.3 12-mth Avg Daily Vol ('000 shrs) 29.6 Estimated Free Float (%) 1.04 Beta Major Shareholders (%) Tan Sri Dato' Sri Leong Hoy Kum - 35.0 PNB - 16.6 EPF - 8.9 Lembaga Tabung Haji - 5.8 KWAP - 5.2 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 (3.3) (3.6) 333.5 314.4 351.7 349.5 94.8 90.0 Buy (Maintained) Financial Indicators FY17 15.1 10.1 15.1 9.8 1.5 1.0 FY18 17.0 2.2 69.1 8.7 1.5 1.0 vs TA vs Consensus % of FY 69.0 67.0 Below Below Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth MSGB (1.3) 2.7 (2.6) 13.4 FBM KLCI (1.6) (3.0) (2.6) 6.3 Net gearing (x) CFPS (sen) P/CFPS (x) ROE (%) NTA/Share (RM) Price/ NTA (x) Scorecard (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 3