Bursa Malaysia Daily Market Report - 4 August

Transcription

1. Friday , 04 August, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED REPORTS’ News 1. Daily Market Commentary 2. Daily Brief Fundamental Reports 1. 2. 3. 4. Fraser & Neave Holdings Berhad: Significant Improvement at F&B Thailand Malaysia Marine & Heavy Engineering: Losses Escalate Sunway Berhad: Unlocking the Value of Sunway Clio Property Sunway Real Estate Investment Trust: Acquires Sunway Clio Property Technical Reports 1. Daily Technical Stock Picks 2. Daily Stock Screen 3. Foreign Technical Stock Watch (AUS, HK & 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 Friday, 04 August 2017 TA Research e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (03.08.2017) Volume (mil) +/-chg (RMmn) Main Market 1,123.8 237.4 1,543.3 Warrants 199.6 -110.1 52.7 ACE Market 427.7 -172.3 149.5 Bond 3.1 -3.4 0.7 ETF 0.0 0.01 0.0 Total 1,754.2 1,746.2 Off Market 82.2 49.2 97.2 Value +/-chg 9.9 3.1 -15.1 -0.3 0.01 -154.6 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP August 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 Review & Outlook Value/ Volume 1.37 0.26 0.35 0.22 1.05 1.00 1.18 Up Down 257 334 52 63 34 48 2 3 1 1 346 449 % chg % YTD chg 1,771.90 12,605.15 17,209.88 1,770.00 1.29 -1.51 -18.49 2.50 0.07 -0.01 -0.11 0.14 7.93 9.93 16.95 8.22 22,026.10 6,340.34 7,474.77 20,029.26 2,386.85 27,531.01 3,342.92 1,578.25 5,780.58 3,272.93 1,869.21 5,735.12 9.86 -22.30 63.34 -50.78 -40.78 -76.37 -5.88 -2.29 -43.67 -12.13 -0.11 -9.08 0.04 -0.35 0.85 -0.25 -1.68 -0.28 -0.18 -0.14 -0.75 -0.37 -0.01 -0.16 11.45 17.78 4.65 4.79 17.78 25.14 16.04 2.29 9.14 5.45 -5.07 1.22 The local benchmark index ended up Thursday, against the softer tone overseas as light bargain hunting interest on selected heavyweights lifted it higher. The KLCI added 1.29 points to close at 1,771.90 after being stuck in narrow range trade between 1772.59 and 1768.05, but market breadth stayed negative as 449 losers beat 346 gainers on moderate turnover of 1.75bn shares worth RM1.74bn. Stocks are likely to extend trending sideways ahead of the weekend, with the absence of positive domestic catalysts and weak investor participation dampening sentiment. Immediate support for the index remains at the 100-day moving average at 1,761, which must hold to prevent further correction to 1,729, a key support level in April. Immediate resistance is upgraded to the upper Bollinger band at 1,772, next 1,782, followed by the recent peak of 1,796. MRCB shares is ripe for oversold rebound after the recent sell-off to RM1.14 low, with stronger chart supports at RM1.08 and the 2/6/16 low (RM1.02), while profit-taking should see significant resistance from the 38.2%FR (RM1.32) capping upside potential. Similarly, UEM Sunrise should see an oversold rebound towards the 50%FR (RM1.18), with next hurdle from the 61.8%FR (RM1.22), while downside is cushioned by stronger supports from the 23.6%FR (RM1.08) and RM1.05. News Bites • Sunway Bhd is disposing of its Sunway Clio property to Sunway Real • • • • Top 10 KLCI Movers Based on Mkt Cap. Off Market SEM BJASSET DESTINI IRETEX SPSETIA FPGROUP MEXTER (mn) 36.4 15.2 10.1 9.3 4.0 3.0 2.0 @ @ @ @ @ @ @ (RM) 1.40 1.13 0.65 0.18 3.26 0.90 0.30 Counter Mkt Cap. (RM’mn) SIME 63,928 IHH 59,744 AXIATA 44,989 MAXIS 43,191 DIGI 37,476 GENM 34,577 HLBANK 28,026 KLK 26,432 PETDAG 23,863 HAPSENG 22,532 Chg (RM) 0.01 0.04 0.03 0.11 0.01 0.04 0.01 0.10 0.28 0.05 Vol. (mn) 4.68 11.29 1.94 3.69 3.19 5.33 1.85 0.16 0.36 0.36 • • • • • • Important Dates CAB - 1:4 Bonus Issue - BI of 138.6m subdivided shares. 1 bonus share for every 4 subdivided shares. Ex-Date: 02/08/2017. Entitlement Date: 04/08/2017. LISTING ON: 07/08/2017. Estate Investment Trust for RM340mn as it wants to eliminate any conflict of interest with regards to the property. AirAsia Bhd carried 14% more passengers in 2Q17, with seating capacity up 11% YoY. Handal Resources Bhd is signed three-year goods and services outline agreement with ExxonMobil Exploration and Production Malaysia Inc for provision of onshore overhaul, major repair and refurbishment services for offshore cranes. Spring Gallery Bhd is planning to acquire developer Klasik Ikhtiar Sdn Bhd for RM3.5mn cash to tap into a RM144.5mn GDV Perumahan Penjawat Awam 1 Malaysia project in Sentul. Fajarbaru Builder Group Bhd has launched its maiden residential project called Rica Residence @ Sentul, which has a gross development value of RM280mn. Versatile Creative Bhd is partnering Iris World Marketing Sdn Bhd to explore the possibility of developing concept stores throughout Malaysia for a mobile payment platform. EA Holdings Bhd has reported a deviation of more than 10% between the unaudited and audited net profit for FY17, primarily attributable to the adjustment for share of associate results amounting to RM354K. Fraser & Neave Holdings Bhd's net profit for 3QFY17 fell by 25.8% YoY to RM69.4mn, hurt by weak consumer sentiment and higher input costs in Malaysia. It was within expectations. Malaysia Marine and Heavy Engineering Holdings Bhd continues be in the red, posting a quarterly net loss of RM13.7mn 2QFY17 amid lower revenue and weaker segmental performance. It was below expectations. Annual inflation in the OECD area slowed to 1.9% in June 2017, compared with 2.1% in May 2017, reflecting a continued slowdown in energy price inflation. Initial jobless claims, a measure of layoffs across the U.S., dropped by 5,000 to a seasonally adjusted 240,000 in the week ended July 29. Exchange Rate USD/MYR 4.2805 -0.0035 USD/JPY 110.63 -0.1200 EUR/USD 1.184 0.0005 Commodities Futures Palm Oil (RM/mt) 2,613.00 -34.00 Crude Oil ($/Barrel) 48.93 -0.68 Gold ($/tr.oz.) 1,271.30 1.80 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 Friday , August 04, 2017 FBMKLCI: 1,771.90 A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Daily Brief Market View, News In Brief: Corporate, Economy, and Share Buybacks THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TA Research Team Coverage Market View Tel: +603-2072 1277 taresearch@ta.com.my www.taonline.com.my Still Range Bound on Weak Buying Momentum The local benchmark index ended up Thursday, against the softer tone overseas as light bargain hunting interest on selected heavyweights lifted it higher. The KLCI added 1.29 points to close at 1,771.90 after being stuck in narrow range trade between 1772.59 and 1768.05, but market breadth stayed negative as 449 losers beat 346 gainers on moderate turnover of 1.75bn shares worth RM1.74bn. Support at 1,761, Resistance at 1,772, Then 1,782 Stocks are likely to extend trending sideways ahead of the weekend, with the absence of positive domestic catalysts and weak investor participation dampening sentiment. Immediate support for the index remains at the 100-day moving average at 1,761, which must hold to prevent further correction to 1,729, a key support level in April. Immediate resistance is upgraded to the upper Bollinger band at 1,772, next 1,782, followed by the recent peak of 1,796. BUY MRCB & UEM Sunrise for Rebound MRCB shares is ripe for oversold rebound after the recent sell-off to RM1.14 low, with stronger chart supports at RM1.08 and the 2/6/16 low (RM1.02), while profit-taking should see significant resistance from the 38.2%FR (RM1.32) capping upside potential. Similarly, UEM Sunrise should see an oversold rebound towards the 50%FR (RM1.18), with next hurdle from the 61.8%FR (RM1.22), while downside is cushioned by stronger supports from the 23.6%FR (RM1.08) and RM1.05. Asian Markets Lower on Profit Taking Asian stock markets traded lower on Thursday as investors locked in profits after the Dow broke the 22,000 mark. Investors wasted little time in taking profits in tech shares which rose the previous day after Apple posted strong quarterly earnings. Investors were also cautious ahead of the Bank of England's monetary policy announcement due during European trading hours. The Nikkei shares average fell 50.78 points or 0.25 percent to 20,029.26. Korean Kospi fell 1.68 percent to 2,386.85 dragged by index heavyweight Samsung Electronics. In down under, the benchmark ASX200 ended lower by 0.16 percent to close at 5,735.10 driven by weakness in the materials and telecommunication services subindexes. China stocks were lower after a private survey showed the country's services sector cooled in July and as a net drain of funds by the central bank renewed concerns about liquidity conditions. The services PMI figure for July came in at 51.5, a tad below June's 51.6 reading. The blue-chip CSI300 index lost 0.88 percent to 3,727.83 points, while the Shanghai Composite Index fell 0.35 percent to 3,273.41 points. Page 1 of 7
4. TA Securities 4-Aug-17 A Member of the TA Group Wall Street Mixed Ahead of Jobs Data as Tech and Energy Slides The Dow edged up to a seventh straight record close , while Nasdaq and S&P 500 fell on Thursday. Stocks lost a little ground late in the session after the Wall Street Journal reported that Special Counsel Robert Mueller has impaneled a grand jury in Washington to investigate allegations of Russia's interference in the 2016 U.S presidential election. The S&P 500 technology index fell 0.35 percent. Apple lost 1 percent, while Amazon was down 0.90 percent. Meanwhile, energy sector slide 1.4 percent as oil prices edged lower with West Texas Intermediate backing off the USD50 a barrel level on continued concerns about excess supplies from OPEC producers. Investors are looking ahead to Friday's nonfarm jobs report. U.S jobless claims totaled 240,000 versus expectations of 242,000 accord to the Labor Department's Thursday report. The Dow Jones Industrial Average rose 9.86 points, or 0.04 percent, to 22,026.10, the S&P 500 fell 5.41 points to 2,472.16 and the Nasdaq Composite lost 22.30 points or 0.35 percent at 6,340.34. Page 2 of 7
5. TA Securities 4-Aug-17 A Member of the TA Group News In Brief Corporate Sunway Bhd is disposing of its Sunway Clio property to Sunway Real Estate Investment Trust as it wants to eliminate any conflict of interest with regards to the property . It will receive RM340mn for the property which comprises the Sunway Clio Hotel, a three-storey retail space and a multi-storey carpark. (Bursa Malaysia) AirAsia Bhd carried 14% more passengers in 2Q17, with seating capacity up 11% YoY.It flew 15.8mn passengers in 2Q17 over the 13.91mn passengers flown in 2Q16. The seat load factor improved accordingly, rising 3 ppts to 88%, compared with the period a year ago. The available seat kilometers, a measure of passenger capacity, were also up 9% YoY, while passenger traffic, measured by revenue passenger kilometres, rose 12% YoY. (The Edge) Handal Resources Bhd is servicing ExxonMobil Exploration and Production Malaysia Inc's (EMEPMI) offshore cranes under a three-year contract. It signed the goods and services outline agreement with EMEPMI. The contract involved provision of onshore overhaul, major repair and refurbishment services for offshore cranes to EMEPMI. The agreement is for the primary term of three years, until July 26 2020, with an option for a one-year extension. (Bursa Malaysia) Spring Gallery Bhd is planning to acquire developer Klasik Ikhtiar Sdn Bhd for RM3.5mn cash to tap into a RM144.5mn GDV Perumahan Penjawat Awam 1 Malaysia project in Sentul. It entered into a share sale agreement with Annathan A/L Sinivesan and Nurul Shahiza Binti Muhammad Adib to acquire 100K shares or a 100% stake in Klasik Ikhtiar. (Bursa Malaysia) Fajarbaru Builder Group Bhd has launched its maiden residential project called Rica Residence @ Sentul, which has a gross development value of RM280mn. Located in Sentul, the project features a 39-storey building housing 473 units. (The Edge) Versatile Creative Bhd is partnering Iris World Marketing Sdn Bhd (IWMSB) to explore the possibility of developing concept stores throughout Malaysia for a mobile payment platform. It signed a memorandum of agreement with IWMSB to look into the development of some 250 IRISPAY station E-Concept Stores. The development has an estimated gross development value of between RM62.5mn and RM70mn. (Bursa Malaysia) EA Holdings Bhd has reported a deviation of more than 10% between the unaudited and audited net profit for FY17. The deviation was primarily attributable to the adjustment for share of associate results amounting to RM354K, which was mainly due to additional provision for tax payable. (Bursa Malaysia) Tune Protect Group Bhd has appointed Khor Kee Eng as chief actuary and Khoo Ai Lin as chief executive officer of its subsidiary Tune Insurance Malaysia Bhd. Khor, a fellow of the Institute of Actuaries, joined the company as chief actuary on Aug 1. (Bernama) Fraser & Neave Holdings Bhd (F&N)’s net profit for 3QFY17 fell by 25.8% to RM69.4mn from RM93.6mn in the corresponding quarter a year ago, hurt by weak consumer sentiment and higher input costs in Malaysia. For 9MFY17, F&N’s net profit was lower by 9.5% to RM303.7mn from RM335.8mn in the same period a year ago. (Bursa Malaysia) Malaysia Marine and Heavy Engineering Holdings Bhd continues be in the red, posting a quarterly net loss of RM13.7mn 2QFY17 amid lower revenue and weaker segmental performance. This is the seventh consecutive quarter of losses for the fabrication yard operator, in which MISC Bhd holds a 66.5% stake. For 1HFY17, net loss stood at RM30.3mn, higher compared with a net loss of RM10.1mn a year earlier. (Bursa Malaysia) Page 3 of 7
6. TA Securities 4-Aug-17 A Member of the TA Group Ire-Tex Corp Bhd saw some 9 .3mn shares — representing a 6.73% stake in the company traded off-market. Bloomberg data showed that the shares were traded in two blocks at 18 sen which was at 9.1% premium to closing price of 16.5 sen on the open market. At press time, it was unclear who were involved in the transactions. (The Edge) Page 4 of 7
7. TA Securities 4-Aug-17 A Member of the TA Group News In Brief Economy Global OECD Annual Inflation Slows to 1 .9% in June 2017 Annual inflation in the OECD area slowed to 1.9% in June 2017, compared with 2.1% in May 2017, reflecting a continued slowdown in energy price inflation. Energy prices rose by 3.0% in the year to June compared with 5.5% in May. Food price inflation marginally increased to 1.6% in June, compared with 1.5% in May. Excluding food and energy, inflation in the OECD area was stable at 1.8% in June. Annual inflation in the Euro area, as measured by the HICP, slightly decreased to 1.3% in June, compared with 1.4% in May. Excluding food and energy, annual inflation increased to 1.1% in June, compared with 0.9% in May. Eurostat’s flash estimate for July 2017 points to stability in overall annual inflation (at 1.3%) but a marginal increase in inflation excluding food and energy (to 1.2%). Annual inflation in the G20 area2 slowed to 2.0%3 in June, compared with 2.2% in May. Among G20 emerging economies, annual inflation decreased in Brazil (to 3.0%, down from 3.6%) and South Africa (to 5.0%, down from 5.3%). On the other hand, it was stable in China (at 1.5%) and India (at 1.1%) and increased in the Russian Federation (to 4.4%, up from 4.1%), Indonesia (to 4.4%, up from 4.3%) and Saudi Arabia (to -0.4%, up from -0.7%). (OECD) Asia China's Private Sector Expands Most in 4 Months China's private sector expanded at the fastest pace in four months at the start of the third quarter driven by the upturn in manufacturing. The Caixin composite output index rose to a four-month high of 51.9 in July from 51.1 in June, survey data from IHS Markit showed. A score above 50 indicates expansion in the sector. Manufacturing output increased at the quickest pace in five months, while services activity expanded at the joint-weakest since May 2016. The services Purchasing Managers' Index fell to 51.5 in July from 51.6 in June. New business grew at a weaker pace in services in July. On the other hand, new work placed at manufacturers advanced at a faster pace. Consequently, composite new business increased at the quickest pace in four months. Employment trends continued to diverge across both monitored sectors in July. Services companies added to their payroll numbers for the eleventh month running, while manufacturing staffing levels continued to decline. (RTT News) Japan Hopes to Hold Economic Talks With U.S. in October: Finance Minister Japan hopes to hold economic talks with Washington in October, Finance Minister Taro Aso said. Aso said that he was hoping to conduct rough preparations with Vice President (Mike) Pence in September and hold a formal talk in October. Aso and Pence have led a U.S.-Japan economic dialogue, which kicked off in April to discuss trade and investment and economic policies of the both countries. The upcoming talks could also include the issue of safeguard tariffs Japan has imposed on frozen beef from the United States and some other countries. He also added that he must continue a dialogue aimed at helping economic development in the Asia-Pacific region to carry out economic and fiscal management. The Trump administration also could press for concessions on trade that could increase U.S. exports to Japan under his "America First" policy. (Reuters) Singapore Private Sector Growth Steadied in July But No Boost to Hiring: Nikkei PMI Growth in Singapore's private sector picked up in July although lower employment persisted, according to the latest Nikkei PMI survey released. The headline Nikkei Singapore Purchasing Managers' Index (PMI) rose to 51.3 in July from 50.7 in June. A reading above 50 points to growth, while one below 50 indicates contraction. Separately, young workers in Singapore are at risk of a shortfall in retirement income, despite widespread and high levels of private savings, according to findings by the International Longevity Centre - UK (ILC-UK). It revealed that young workers entering the workforce today in Singapore will have to save 12% of their annual earnings, in addition to what they are already saving through mandatory and personal contributions. (The Straits Times/ The Business Times) Page 5 of 7
8. TA Securities 4-Aug-17 A Member of the TA Group Australia Has A $856 Million Trade Surplus in June Australia had a seasonally adjusted merchandise trade surplus of A$856mn in June, the Australian Bureau of Statistics said. That was well shy of forecasts for a surplus of A$1.80bn and down sharply from the A$2.471bn surplus in May. Exports were down 1.0% on month to A$31.779bn, while imports gained 2.0% to A$30.923bn. (RTT News) United States U.S. Jobless Claims Fall by 5,000 to 240,000 The number of Americans filing for unemployment benefits fell last week, suggesting the labour market’s steady expansion has room to run. Initial jobless claims, a measure of layoffs across the U.S., dropped by 5,000 to a seasonally adjusted 240,000 in the week ended July 29, the Labor Department said. Economists surveyed by The Wall Street Journal expected 241,000 new claims. Claims have fallen three of the past four weeks and are hovering near four-decade lows. The four-week moving average of claims, which smooths out volatility, fell 2,500 to 241,750. The figures suggest companies are mostly expanding or holding payrolls steady rather than downsizing, helping extend a historically long labourmarket expansion. They also could boost hopes for a solid jobs report Friday on hiring in July. (The Wall Street Journal) Service Sector Grows Slower than Expected in July Non-manufacturing economic activity grew at a slower pace than expected in July, declining 3.5 points compared to the previous month. The Institute for Supply Management's index registered 53.9 in July, below estimates of 57 by economists surveyed by Thomson Reuters. "The non-manufacturing sector did not sustain the previous rate of growth and cooled-off in July," Anthony Nieves, chair of the ISM survey committee, said in a statement. A reading above 50 for the index indicates expansion in the service sector, and a reading below 50 indicates contraction. Fifteen of the 17 non-manufacturing industries surveyed reported growth in July. Two industries—"management of companies & support services" and "agriculture, forestry, fishing and hunting," reported contraction. The business activity index decreased 4.9 percentage points in July from June, while still reflecting growth for a 96th consecutive month. The new orders index also registered lower at 55.1 in July, 5.4 percentage points lower than the reading of 60.5 in June. The employment index decreased 2.2 percentage points in July to 53.6 percent, continuing month-over-month declines seen in June. Separately, US factory goods orders jumped 3.0%. That was the largest gain since October 2016 and followed two straight monthly declines. May's data was revised to show orders falling 0.3% instead of the previously reported 0.8% drop. (CNBC) Europe and United Kingdom Brexit-Wary Bank of England Leaves Rates on Hold, Cuts Growth Forecast The Bank of England kept interest rates at a record low again and, seeing Brexit weighing on the economy, cut its forecasts for growth and wages. The gloomier outlook for the next two years further reduced speculation in financial markets that the BoE might be nearing its first rate hike in a decade. Governor Mark Carney nonetheless sought to keep alive the possibility of one next year. He said uncertainty about Brexit -- in particular lower investment by companies -- meant the economy could not grow as fast as before without pushing up inflation. So, just a small improvement in growth could bring forward a rate hike. But investors saw no sign that the BoE was in a hurry to raise rates, a stark contrast to the outcome of its last meeting in June when markets thought a hike might be imminent. Central banks around the world have struggled to wean their economies off the stimulus of rock-bottom interest rates, largely because of weak wage growth for workers. The BoE faces the extra challenge of Britain's leaving the European Union, and its uncertain impact on Britain's economy. The Bank said it now expects the economy to grow by 1.7% this year, down from its May forecast of 1.9%. It also shaved its growth forecast for next year to 1.6% from 1.7%, but kept 2019 at 1.8%. The BoE's rate-setters voted 6-2 to keep Bank Rate at 0.25%, in line with forecasts in a poll of economists. That was more clear cut than an unexpectedly close 5-3 vote at the Monetary Policy Committee's meeting in June. (Reuters) Page 6 of 7
9. TA Securities 4-Aug-17 A Member of the TA Group German Overall Debt Shrinks in 2016 , Heads Towards EU limit A strong economy and higher tax take drove Germany's overall debt down by 0.7% in 2016 keeping Europe's biggest economy on track to bring debt below 60% of economic output by 2020. The Statistics Office said total debt, which includes liabilities from the federal government, states, local governments and social security, stood at 2.006 trillion euros at the end of last year. All areas contributed to the 15.1 billion euro reduction which resulted in per-capita debt of 24,407 euros, but liabilities of Germany's 16 federal states accounted for more than half the decline. The Finance Ministry has said the debt-to gross domestic product (GDP) ratio had shrunk to 68.3% last year from 71.2% in 2015. The European Union says countries should keep the debt-GDP ratio at no more than 60% or at least be heading in that direction. The rules have been broken for years by Germany and other countries. Separately, IHS Markit’s German composite Purchasing Managers Index for July dropped to 54.7, down from 56.4 in June and missing the 55.1 flash reading. That’s a 10-month low and the first time in more than 12 years that the survey for Germany has lagged France, Italy and Spain. The figures nevertheless indicate a solid quarterly growth of between 0.4 % and 0.5% for the bloc’s largest economy. In the euro area overall, the composite PMI fell to 55.7 in July, though the economy remains on track to sustain the speed of its expansion this quarter. (Reuters/Bloomberg) Share Buy-Back: 03 August 2017 Company AMPROP DAIBOCI PWF SALCON UNIMECH Bought Back Price (RM) Hi/Lo (RM) 25,300 23,000 198,000 100,000 1,900 0.85 2.20 1.06/1.04 0.50/0.495 1.05 0.85/0.84 2.20/2.17 1.06/1.02 0.505/0.49 1.06/1.05 Total Treasury Shares 14,402,800 171,400 4,795,118 2,247,762 5,361,010 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. 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 We, our associates, directors, employees may have an interest in
10. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR UMW Share Price (RM) 03-Aug-17 1.94 2.22 5.64 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 2.37 2.28 5.04 0.94 0.64 1.28 10.3 24.1 19.7 15.8 25.3 30.6 18.8 9.2 28.6 12.3 8.8 18.4 6.0 4.1 2.3 8.1 4.1 3.5 2.44 2.70 6.47 -20.5 -17.8 -12.8 1.88 2.08 4.09 3.2 6.7 37.8 -8.9 3.7 33.6 4.80 3.70 5.70 8.00 17.50 11.00 23.60 5.80 11.10 1.26 0.97 1.34 1.41 0.66 0.96 0.81 1.33 0.72 33.6 29.4 43.9 49.6 105.2 71.4 137.2 50.7 40.2 30.5 33.6 48.4 55.2 115.5 80.7 142.4 54.5 39.0 11.6 8.7 11.3 13.3 14.9 13.5 15.0 9.9 26.3 12.8 7.6 10.3 11.9 13.6 11.9 14.5 9.2 27.1 4.1 3.1 3.5 3.1 2.6 5.2 2.7 2.4 3.2 4.1 3.1 3.6 3.4 2.6 5.2 2.8 2.4 3.2 4.49 3.00 5.70 6.87 16.30 9.68 20.74 5.59 11.14 -13.1 -14.7 -12.6 -3.9 -3.9 -0.4 -0.7 -10.7 -5.0 3.60 2.08 3.90 4.30 12.70 7.50 19.38 4.53 8.20 8.3 23.1 27.7 53.5 23.3 28.5 6.3 10.2 29.0 4.8 7.1 15.5 46.3 16.0 17.6 4.5 5.9 19.5 0.36 1.22 5.38 3.43 0.64 1.13 2.12 1.95 5.85 0.45 1.57 6.00 3.50 0.78 0.58 2.26 1.49 6.26 0.77 0.61 1.00 1.07 0.85 1.25 na 1.07 0.15 5.5 15.3 27.9 15.3 4.9 8.3 12.7 11.5 42.0 5.5 13.4 34.6 20.2 5.7 9.6 12.5 11.6 45.7 6.5 8.0 19.3 22.5 12.8 13.6 16.8 16.9 13.9 6.6 9.1 15.6 16.9 11.1 11.7 16.9 16.8 12.8 0.0 2.5 2.2 2.2 3.9 0.9 2.6 1.5 4.3 0.0 2.5 2.2 2.8 3.9 0.9 2.6 1.5 4.3 0.51 1.37 5.52 3.61 0.74 1.39 2.18 2.48 6.15 -29.4 -10.9 -2.5 -5.0 -13.6 -18.7 -2.8 -21.2 -4.9 0.36 0.89 4.65 3.07 0.37 0.41 1.56 1.50 5.57 1.4 37.9 15.7 11.7 71.6 179.0 35.9 29.9 5.0 -17.2 16.2 12.6 7.2 5.0 96.5 24.7 13.4 -0.5 1.97 2.00 0.48 11.0 11.5 17.9 17.1 5.1 5.1 2.19 -10.0 1.93 2.1 -2.0 15.00 18.12 17.84 19.14 0.51 0.58 74.8 79.6 81.3 84.0 20.1 22.8 18.4 21.6 5.0 4.0 5.4 4.2 15.30 19.10 -2.0 -5.1 13.72 15.56 9.3 16.5 7.8 10.6 2.12 7.21 24.82 1.21 84.00 3.74 1.95 4.98 0.89 2.23 8.62 27.41 1.50 88.66 4.10 2.46 4.41 1.23 0.53 0.36 0.33 0.43 0.36 0.47 0.69 0.40 0.53 6.7 26.4 121.1 6.5 290.1 22.3 27.4 15.7 8.1 7.9 40.6 151.0 6.6 327.7 24.7 27.0 16.6 11.6 31.6 27.3 20.5 18.6 29.0 16.8 7.1 31.7 11.0 26.9 17.7 16.4 18.4 25.6 15.1 7.2 29.9 7.7 1.9 1.4 2.8 5.0 3.3 4.0 3.1 0.9 2.8 2.2 2.1 3.0 5.0 3.3 4.5 4.1 1.0 3.9 3.00 8.85 26.30 1.31 85.20 3.91 2.04 5.00 1.07 -29.3 -18.5 -5.6 -7.5 -1.4 -4.3 -4.4 -0.4 -16.8 2.11 7.21 22.44 1.13 74.12 2.26 1.50 4.14 0.78 0.5 0.0 10.6 7.0 13.3 65.4 30.0 20.2 14.1 -17.5 -1.6 5.7 5.1 7.4 47.3 12.7 15.0 11.9 44.88 52.08 0.99 198.6 187.4 22.6 23.9 4.5 4.5 51.50 -12.9 40.61 10.5 1.6 9.75 6.10 11.51 6.54 1.36 1.28 49.3 25.7 54.7 27.7 19.8 23.7 17.8 22.0 0.5 1.3 0.6 1.5 10.00 6.38 -2.5 -4.4 7.50 4.22 30.0 44.5 22.7 35.0 2.35 0.12 3.34 0.13 0.73 1.18 19.3 0.4 23.2 0.4 12.2 33.1 10.1 33.3 6.0 0.0 6.8 0.0 3.42 0.16 -31.3 -25.0 2.28 0.05 3.1 140.0 -20.6 140.0 5.96 4.22 6.39 4.70 0.78 0.52 9.5 13.3 14.9 16.4 62.5 31.8 39.9 25.7 0.6 1.5 0.6 1.8 6.73 4.37 -11.4 -3.4 5.54 3.85 7.6 9.6 -6.1 1.0 6.97 7.28 1.92 5.72 1.58 6.85 7.60 1.80 6.05 2.20 0.57 0.13 0.27 -0.20 0.30 17.2 35.8 12.4 26.4 3.7 24.5 40.0 15.1 29.8 5.5 40.5 20.3 15.5 21.6 42.4 28.4 18.2 12.7 19.2 28.8 1.1 2.5 1.9 2.3 0.6 1.6 2.7 2.3 2.6 0.9 7.40 7.36 2.38 5.94 2.64 -5.8 -1.1 -19.3 -3.7 -40.2 4.10 5.62 1.88 4.20 1.51 70.0 29.5 2.1 36.2 4.6 44.3 10.5 -9.0 6.9 -33.1 INDUSTRIAL SCIENTX SKPRES 8.60 1.44 9.71 1.75 0.56 0.43 54.5 8.6 66.3 10.6 15.8 16.8 13.0 13.5 2.1 2.9 2.3 3.6 8.99 1.45 -4.3 -0.7 6.01 1.15 43.1 25.2 28.4 11.6 MEDIA ASTRO MEDIA PRIMA STAR 2.62 0.82 2.27 3.50 0.60 1.40 1.06 0.58 0.63 13.2 1.7 7.1 14.5 2.8 6.5 19.8 48.0 32.0 18.1 29.0 35.0 4.8 1.7 7.9 5.0 2.8 7.9 3.01 1.47 2.65 -13.0 -44.2 -14.3 2.47 0.82 2.19 6.1 0.6 3.7 0.8 -28.7 1.3 -18.8 -32.6 -38.8 -6.7 -1.5 -10.6 -27.1 -71.6 0.21 4.14 0.71 7.03 0.44 6.48 1.33 0.29 173.2 6.3 0.0 4.8 54.0 7.6 15.0 3.5 119.6 -32.3 -22.4 0.3 50.6 -0.1 -5.6 -66.3 -28.3 1.30 9.2 -16.5 BANKS & FINANCIAL SERVICES AFG 3.90 AFFIN 2.56 AMBANK 4.98 CIMB 6.60 HLBANK 15.66 MAYBANK 9.64 PBBANK 20.60 4.99 RHBBANK BURSA 10.58 CONSTRUCTION BPURI GADANG GAMUDA IJM PESONA SENDAI SUNCON WCT LITRAK Building Materials WTHORSE CONSUMER Brewery CARLSBG HEIM Retail AEON AMWAY F&N HUPSENG 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 DNEX 0.56 0.76 1.00 3.7 4.6 15.3 12.3 1.8 1.8 0.69 LCTITAN 4.40 6.88 na 43.1 64.9 10.2 6.8 3.9 7.0 6.53 MHB 0.71 0.78 1.81 -2.0 -0.5 na na 0.0 0.0 1.16 MISC 7.37 6.85 0.85 56.4 48.9 13.1 15.1 4.1 4.1 7.90 PANTECH 0.67 0.69 1.29 4.0 6.1 16.8 10.9 2.7 4.1 0.68 PCHEM 6.97 7.74 1.07 39.2 40.5 17.8 17.2 3.0 3.2 7.80 SENERGY 1.53 1.71 2.52 6.6 4.0 23.2 38.6 0.7 0.7 2.10 UMWOG 0.30 0.80 2.09 -12.0 -3.5 na na 0.0 0.0 1.04 Note: UMWOG proposed rights issue of shares. Ex-Target price RM0.43. For more details please refer to 08.05.17 report. UZMA 1.42 1.55 1.45 10.9 11.5 13.1 12.4 0.0 0.0 1.98
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price (RM) PLANTATIONS FGV IJMPLNT IOICORP KLK SIME UMCCA 1.58 3.00 4.46 24.82 9.40 6.39 Target Price BETA (RM) 1.55 3.88 4.15 26.19 10.02 7.52 1.79 0.47 1.05 0.86 1.23 0.41 EPS (sen) PER (X) FY17 FY18 FY17 FY18 4.2 12.3 18.8 111.7 34.0 37.5 8.5 15.7 21.1 119.1 37.5 34.5 37.5 24.4 23.8 22.2 27.6 17.0 18.6 19.1 21.2 20.8 25.1 18.5 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg 3.2 2.3 2.2 2.2 2.7 3.6 3.2 2.7 2.7 2.4 3.3 2.7 2.52 3.70 4.81 25.50 9.70 6.55 -37.3 -18.9 -7.3 -2.7 -3.1 -2.4 1.42 2.95 4.23 22.98 7.50 5.50 PROPERTY GLOMAC 0.67 0.70 0.54 1.6 6.3 42.0 10.6 4.0 4.0 0.83 -18.8 0.61 HUAYANG 0.84 0.96 0.65 17.3 10.2 4.9 8.2 4.8 2.4 1.43 -41.4 0.82 IBRACO 0.90 1.00 0.46 5.2 11.1 17.1 8.0 3.9 4.5 1.05 -14.8 0.76 IOIPG 2.13 2.25 0.86 17.4 17.4 12.2 12.2 3.3 3.5 2.46 -13.4 1.85 MAHSING 1.57 1.76 0.73 14.3 13.5 11.0 11.6 4.1 4.1 1.70 -7.6 1.34 SNTORIA 0.82 0.98 0.22 6.2 10.3 13.3 7.9 1.2 1.2 1.00 -18.0 0.69 SPB 4.88 5.98 0.60 25.6 22.8 12.7 14.3 2.5 2.5 5.19 -6.0 4.32 SPSETIA 3.26 4.10 0.73 11.6 12.5 37.2 34.7 4.3 4.3 4.50 -27.6 3.00 SUNWAY 4.32 4.16 0.48 15.5 15.6 17.6 17.4 1.2 1.2 4.40 -1.8 2.84 Note: SUNWAY proposed bonus issue of shares and warrants. Ex-Target price RM1.69. For more details please refer to 15.06.17 report. REIT SUNREIT 1.71 1.88 0.51 8.9 10.2 19.3 16.8 5.2 6.0 1.84 -7.1 1.63 CMMT 1.47 1.72 0.58 8.1 8.6 18.2 17.0 5.7 6.1 1.72 -14.5 1.45 % Chg YTD 11.3 1.7 5.4 8.0 25.3 16.1 1.9 -11.8 1.4 3.4 16.0 7.0 9.8 3.1 18.5 15.3 17.2 18.8 12.9 8.7 52.0 -3.6 -25.7 -10.5 9.3 9.8 2.5 10.4 4.2 44.0 4.9 1.4 -0.6 -3.9 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.02 24.02 18.62 14.18 1.41 1.13 21.47 19.60 17.38 1.45 0.70 0.78 0.77 0.98 0.52 7.1 98.5 88.2 131.9 8.2 6.4 102.4 101.3 130.6 10.6 14.3 24.4 21.1 10.7 17.1 15.9 23.5 18.4 10.9 13.3 6.9 3.0 3.3 3.1 5.0 6.9 3.2 3.8 3.2 3.5 1.80 25.70 22.50 14.90 1.64 -43.3 -6.5 -17.2 -4.8 -14.0 1.01 22.96 18.10 13.00 1.38 1.0 4.6 2.9 9.1 2.2 -25.5 0.9 -12.6 2.0 -5.4 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 4.80 4.82 5.76 6.39 5.20 4.90 5.85 7.50 1.29 0.90 0.70 0.68 14.5 20.0 24.5 21.4 15.9 20.4 24.7 22.3 33.0 24.1 23.5 29.8 30.1 23.6 23.3 28.7 1.5 4.2 3.5 3.0 1.7 4.2 3.5 3.1 5.99 5.19 6.60 6.90 -19.9 -7.1 -12.7 -7.4 4.11 4.63 5.48 5.81 16.8 4.1 5.1 10.0 1.7 -0.2 -3.7 7.4 TECHNOLOGY Semiconductor & Electronics IRIS 0.17 INARI 2.55 MPI 13.80 UNISEM 3.81 0.28 2.30 15.60 3.95 1.37 0.74 0.48 0.73 -2.3 10.2 94.2 26.9 -0.3 na 12.3 25.0 112.9 14.7 27.1 14.1 na 20.8 12.2 14.1 0.0 3.1 2.0 3.1 0.0 1.9 2.0 3.1 0.24 2.58 14.28 3.84 -31.3 -1.2 -3.4 -0.8 0.10 1.50 7.20 2.27 65.0 70.4 91.7 67.8 50.0 53.6 86.2 61.4 3.26 8.75 3.34 8.10 1.12 1.35 37.6 17.2 37.1 17.5 8.7 50.8 8.8 50.0 1.2 1.1 1.5 1.1 3.59 9.45 -9.2 -7.4 2.16 5.91 50.9 48.1 42.4 44.4 1.69 3.64 2.05 4.05 0.72 0.70 12.4 17.1 19.7 15.1 13.7 21.2 8.6 24.1 2.5 3.5 4.1 3.1 1.87 4.59 -9.6 -20.7 1.47 3.61 15.0 0.8 6.3 -15.3 TRANSPORTATION Airlines AIRASIA AIRPORT Freight & Tankers TNLOGIS WPRTS SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price (S$) BANKS & FINANCIAL SERVICES DBS 22.08 OCBC 11.32 UOB 24.31 PLANTATIONS WILMAR IFAR 3.42 0.49 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 1.23 1.17 1.08 172.9 87.7 192.9 189.2 12.8 92.4 12.9 206.5 12.6 11.7 12.3 11.8 2.7 5.7 2.9 2.7 6.7 2.9 22.3 11.5 24.6 -0.8 -1.5 -1.2 14.72 8.84 17.51 50.0 36.9 38.8 27.3 26.9 19.2 3.72 0.53 0.93 1.10 28.9 4.9 31.1 5.2 11.0 9.4 2.3 2.4 2.6 2.6 4.0 0.6 -14.5 -17.6 2.97 0.44 15.2 11.4 -4.7 -6.7 11.8 10.1 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.
12. TA Securities RESULTS UPDATE Friday , August 04, 2017 FBMKLCI: 1,771.90 Sector: Consumer A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Fraser & Neave Holdings Berhad TP: RM27.41 (+10.4%) Last Traded: RM24.82 Significant Improvement at F&B Thailand Hold THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Damia Othman Tel: +603-2167-9602 damia@ta.com.my Review • Fraser and Neave Holdings Berhad’s (F&N) 9MFY17 adjusted net profit came in within ours and consensus full-year earnings estimates at 72% and 79% respectively. • • • • Excluding exceptional items of RM16.3mn, the 9MFY17 adjusted net profit dropped by 19.7% YoY to RM320.0mn due to poor performance from F&B Malaysia operations. 9MFY17 group’s EBIT declined by 27.1% YoY to RM325.8mn. F&B Malaysia EBIT declined by 36.6% YoY to RM132.2mn attributable to i) decline in F&B Malaysia revenue by 9.0% YoY, ii) higher input costs i.e. sugar and restructuring costs which was partly offset by iii) lower trade spending and iv) better profit from export sales. Note that net margin declined by 0.8p.pts YoY to 9.7% for 9MFY17. On the flipside, F&B Thailand 9MFY17 EBIT improved by 22.3% to RM196.4mn as revenue improved by 9.0% YoY. Factors which contributed to higher revenue were i) weak MYR against THB and ii) expansion of brand visibility in Indochina markets which lead to growth in Thailand’s exports by double digit percentile. While F&B Thailand EBIT increase was due to i) low inputs costs e.g. milk based products and ii) recovery of withholding tax from royalties paid. 3QFY17 adjusted net profit declined by 14.8% YoY to RM82.5mn given the poor performance from the F&B Malaysia division. F&B Malaysia revenue declined by 14.1% YoY due to i) weak consumer sentiment during Aidilfitri season, and ii) competitive market environment. Even that, growth in Malaysia exports mitigated the reduction in local sales. Net margin declined by 1.8p.pts YoY for 3QFY17. No dividend was declared for the quarter under review. Impact • No change to our earnings forecast. www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (m) Market Cap (RMm) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000) Estimated Free Float (%) Beta Major Shareholders (%) Fraser & Neave Ltd Employees Provident Fund Skim Amanah Saham Bumiputera Forecast Revision (%) Forecast Revision Core net profit (RMm) Consensus TA/Consensus Previous Rating FNH MK 3689 Main Board 366.5 9096.5 26.30/22.44 325.9 11.2 0.33 55.5 11.8 9.5 FY17 FY18 0.0 0.0 443.8 553.3 403.8 450.6 109.9 122.8 Hold (Maintained) Financial Indicators Net debt/equity (%) ROE (%) ROA (%) NTA/Share Price/NTA FY17 FY18 Net cash Net cash 20.4 22.5 13.2 15.4 5.6 6.4 4.4 3.9 Scorecard vs TA vs Consensus Share Performance Price chg (%) 1 mth 3 mth 6 mth 12 mth % of FY16 72 79 Within Within FNH FBMKLCI (1.9) 0.6 4.5 0.8 (1.7) 5.2 (3.0) 7.0 (12-Mth) Share Price relative to the FBM KLCI Outlook • To recap, F&N has entered into a partnership with McDonalds Malaysia to supply 100Plus drinks to all 262 McDonald’s outlets nationwide. We are positive on this as the partnership can provide i) a sustainable revenue stream, ii) costs savings from economies of scale and iii) create more brand awareness across a bigger market base. Note that both F&N and McDonalds are also official sponsors to the upcoming SEA Games 2017. • We also believe that the stellar performance from the F&B Thailand division will continue to offset declining contributions from F&B Malaysia. Furthermore, its bigger presence in Indochina market will lead to higher Page 1 of 3 Source: Bloomberg
13. TA Securities 4-Aug-17 A Member of the TA Group export sales . Note that the current EBIT mix between F&B Malaysia and F&B Thailand is 40:60. Valuation • Maintain Hold on F&N with an unchanged target price of RM27.41/share based on DDM valuation (k: 6.3%, g: 2.2%). Factors affecting our call are i) continuous support from F&B Thailand, ii) competitive market environment for F&B Malaysia and iii) growing exports sales in both F&B Malaysia and F&B Thailand operations. 3QFY17 Results Analysis (RMmn) FYE September (RM'mn) Revenue F&B Malaysia F&B Thailand Property Others EBIT F&B Malaysia F&B Thailand Property Others Adj. EBIT Net Interest Extra-Ordinary Items Associates & joint venture Pretax Profit Taxation Minority Interests Reported Net Profit Adj. Net Profit Basic EPS Dividend (sen) (sen) EBIT Margin PBT Margin Net Margin Effective Tax Rate (%) (%) (%) (%) 3QFY16 1,108.6 688.7 419.7 0.1 0.1 110.2 62.6 52.8 (0.8) (4.5) 113.4 0.2 (3.2) 1.4 111.8 (18.2) 0.0 93.6 96.8 26.4 - 2QFY17 992.7 543.9 448.5 0.2 0.1 112.5 47.6 66.8 0.3 (2.1) 118.5 (0.1) (5.9) 4.4 116.8 (9.7) 0.0 107.1 113.0 29.2 27.0 3QFY17 1,041.3 592.5 448.6 0.2 0.1 71.3 24.2 51.5 0.2 (4.7) 84.4 (0.2) (13.1) 2.4 73.5 (4.2) 0.0 69.4 82.5 18.9 - 9.9 10.1 8.4 16.3 11.3 11.8 10.8 8.3 6.8 7.1 6.7 5.7 QoQ (%) 4.9 8.9 0.0 (1.7) (17.6) (36.6) (49.1) (22.8) (14.1) > 100 (28.8) 35.5 > 100 (45.5) (37.0) (57.1) nm (35.2) (27.0) (35.3) nm %-points (4.5) (4.7) (4.1) (2.7) YoY (%) (6.1) (14.0) 6.9 > 100 (16.9) (35.3) (61.3) (2.4) nm 5.3 (25.6) nm > 100 67.7 (34.2) (77.2) nm (25.9) (14.8) (28.4) nm %-points (3.1) (3.0) (1.8) (10.6) 9MFY16 3,191.1 1,960.5 1,229.7 0.5 0.4 447.0 208.5 160.6 (0.5) 15.7 447.0 1.3 (62.7) 5.6 391.2 (55.4) 0.0 335.8 398.5 108.7 27.0 9MFY17 3,125.1 1,783.5 1,340.8 0.5 0.3 325.8 132.2 196.4 0.8 (3.6) 342.1 (0.4) (16.3) 9.0 334.3 (30.6) 0.0 303.7 320.0 82.9 27.0 6.5 12.3 10.5 14.2 4.2 10.7 9.7 9.2 Earnings Summary (RMmn) FYE 30 Sept (RMmn) Revenue Core EBITDA Reported PBT MI Net profit Core net profit EPS Core EPS EPS Growth PER Net Dividend Div Yield (sen) (sen) (%) (x) (sen) (%) 2015 4,107.6 372.0 287.2 0.0 233.4 334.9 76.5 91.4 26.9 27.7 57.5 2.3 2016 4,167.6 523.7 442.9 0.0 385.4 343.3 105.3 93.7 2.5 27.0 57.5 2.3 2017E 4,243.5 586.7 493.1 0.0 443.8 443.8 121.1 121.1 29.3 20.9 70.0 2.8 Page 2 of 3 2018F 4,328.7 705.2 614.7 0.0 553.3 553.3 151.0 151.0 24.7 16.8 75.0 3.0 2019F 4,367.8 843.6 759.7 0.0 645.7 645.7 176.2 176.2 16.7 14.4 95.0 3.8 YoY (%) (2.1) (9.0) 9.0 2.5 (5.1) (27.1) (36.6) 22.3 nm nm (23.5) nm (74.0) 59.2 (14.5) (44.8) nm (9.6) (19.7) (23.8) nm %-points (2.3) (1.6) (0.8) (5.0)
14. TA Securities 4-Aug-17 A Member of the TA Group (THIS SECTION IS INTENTIONALLY LEFT BLANK) 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
15. RESULTS UPDATE TA Securities Friday , August 04, 2017 FBM KLCI: 1,771.90 Sector: Oil & Gas A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Malaysia Marine & Heavy Engineering TP: RM0.78 (+10.0%) Last traded: RM0.71 Losses Escalate Hold THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Kylie Chan Sze Zan Tel: +603-2167 9601 kyliechan@ta.com.my Review MMHE reported 1H17 core net loss of RM15.3mn (1H16: RM33mn profit), which was below our expectations and consensus. To recap, we forecasted full-year core net loss of RM19mn (consensus: RM22mn profit). The disappointment largely stemmed from higher-than-expected JV losses and depreciation costs. Additionally, lower-than-expected interest income exacerbated the losses. The weak performance was due to prevailing trends since 1H15, namely, a depleted orderbook and high fixed overheads. Sequential losses expanded to RM10mn (1Q17:RM5.5mn), partially due to higher staff costs. This was attributed to hiring of manpower for the new RM1bn Bokor project, 7 3. 9. www.taonline.com.my SHARE INFORMATION Listing Code Stock Code Listing Share Cap (m) Market Cap (RM 'mn) Par Value (RM) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000) Estimated Free Float (%) Beta Major Shareholders (%) MISC Bhd Technip S.A MMHE MK 5186 Main Market 1,600 1,136 0.50 1.16/0.71 559 10.5 2.2 66.5 8.5 FORECAST REVISION Major projects that left MMHE’s yard in 1H17 include F12 Kumang, BesarA, and Baronia. With the exception of Besar-A (completion: Feb-18), the rest of MMHE’s major projects will be completed in 2017, including FLNG2, Dangote Calm Buoy, and Benchamas 2 Turret. Fortunately, MMHE’s Bokor CPP will commence its first steel cut in 2H18, and thus, partially cushion FY18 earnings. Currently, this project is at the preliminary engineering stage, which implies limited earnings recognition until progress picks up in end-18 to 2019. Recall that this is due to MMHE’s conservative accounting policy, where profit recognition is backloaded for major EPCIC projects. Therefore, both Bokor and Sepat Phase 2A have yet to recognize profits. On a brighter note, the marine division is bustling with activity, as evident from completion of repair and maintenance jobs for 47 vessels. Besides that, this segment also secured 48 vessel jobs in 1H17. Key Takeaways from Analyst Briefing MMHE’s outstanding orderbook inched up higher to RM1.6bn (Dec-16: 560mn) after having secured the chunky RM1bn Bokor CPP contract in Apr-17. Additionally, the group secured RM120mn worth of call out contracts YTD (FY16: RM420mn). Besides Bokor, the other significant jobs include 4 packages from RAPID’s refinery and cracker. On a related note, moving forward, the group is now aiming to secure jobs for petrochemical plants at RAPID. FY17 Forecast Revision (%) Revised net profit (RMmn) Consensus (RMmn) TA/Consensus (%) Previous Rating SCORECARD vs TA vs Consensus MMHE’s 30:70 JV with EPIC, comprising a floating dock for offshore vessel repairs at Kemaman, Terengganu, commenced operations in Dec-16. Todate this facility has received 3 vessel maintenance jobs. To recap, this JV Page 1 of 3 % of FY >-100 >-100 Below Below FY17 Net Cash (0.9) (1.3) 1.6 0.5 FY18 Net Cash (0.3) (0.3) 1.6 0.5 MMHE (12.9) (28.6) (31.1) (30.4) FBM KLCI 0.6 0.8 5.2 7.0 FINANCIAL INDICATORS Net Debt/Equity (x) ROA (%) ROE (%) NTA/Share (RM) P/NTA (x) SHARE PERFORMANCE Price Change (%) 1 mth 3 mth 6 mth 12 mth (12-Mth) Share Price relative to the FBM KLCI The group’s heavy engineering tenderbook of RM1.8bn comprises mainly (67%) regional contracts (outside Malaysia: RM600mn-700mn). The balance consists of international contracts. MMHE is mainly tendering for wellhead platform projects as well as offshore maintenance contracts. The group will now kick start the final project for its Yard Optimization (YO) program, namely Drydock 3 at West Yard. This facility is expected to cost RM400mn-500mn, with a targeted completion date of 2020. Accordingly, capex spend is expected to peak in mid-18. FY18 (140.5) (8.5) 22.1 49.3 (143.6) 47.9 Sell (Upgraded) 66.5 (31.7) Source: Bloomberg
16. TA Securities 4-Aug-17 A Member of the TA Group caters for smallish jobs to reduce congestion at MMHE ’s West Yard. Impact We raise our assumptions for depreciation costs and JV losses. Additionally, we lower our interest income estimate. As a result, our FY17/18/19 earnings estimates are revised to RM32mn loss/22mn loss/5mn profit (previous: RM19mn loss/21mn profit/43mn profit). Valuation We lower our target CY18 P/B multiple to 0.5x (previous: 0.6x) in light of weaker-than-expected earnings and orderbook trajectory. This is to account for the strong likelihood of further yard impairments in end-FY17. Furthermore, a largely empty yard, dismal orderbook prospects, and slow recognition of Bokor CPP imply prolonged earnings headwinds. Nevertheless, we believe the negatives are largely priced in. This is given the significant share price dip of 30% since 1Q17 results release in endApr-17. Therefore, we upgrade the stock to a Hold (previous: Sell) with lower TP of RM0.78 (previous: RM0.87). Figure 1: 2Q17 Results Analysis (RM mn) Cumulative YE 31 Dec 2Q17 Revenue Core EBITDA EBITDA Margin Depreciation Net finance costs JCEs EI Core Pretax Profit Taxation MI Core Net Profit Reported Net Profit 1Q17 QoQ% 2Q16 YoY% 9M17 9M16 YoY% 257.3 235.8 9.1 297.4 (13.5) 493.1 554.2 (11.0) 16.5 22.8 (27.7) 37.0 (55.4) 39.3 111.1 (64.6) 6% 10% 8% 6% (22.9) (18.4) 24.2 (17.9) 28.2 (41.4) (38.6) 2.8 2.2 29.4 5.6 (49.5) 5.0 9.9 (49.0) (2.9) (1.8) 61.9 (0.3) >100 (4.7) (2.2) >100 (65.7) 12% 7.2 (3.9) (11.2) (65.2) (13.5) (71.1) (15.1) (44.0) (10.4) (6.4) 61.6 11.0 >-100 (16.8) 36.2 >-100 (0.8) 1.0 (185.3) (1.7) (51.0) 0.1 (4.3) >-100 0.6 (0.0) >-100 0.0 >100 0.5 (0.3) >-100 (9.8) (5.5) 78.7 11.0 >-100 (15.3) 33.2 >-100 (13.7) (16.7) (17.9) (2.5) >100 (30.4) (10.8) >100 78.7 0.7 >-100 (1.0) 1.4 >-100 0.0 nm Core EPS (sen) (0.6) (0.3) DPS (sen) 0.0 0.0 nm 0.0 0.0 Core EBITDA margin 6% 10% 12% 8% 6% Core Pretax margin -6% -7% -1% -3% 1% Core Net Margin -4% -2% 4% -3% 2% Page 2 of 3
17. TA Securities 4-Aug-17 A Member of the TA Group Figure 2 : Segmental Analysis Cumulative YE 31 Dec 2Q17 1Q17 QoQ% 2Q16 YoY% 9M17 9M16 YoY% 153.5 2.9 (27.5) 311.4 354.2 (12.1) 99.3 82.4 20.5 79.7 24.6 181.7 200.0 (9.2) 257.3 235.8 9.1 297.4 (13.5) 493.1 554.2 (11.0) (24.1) (6.8) (25.6) (12.4) (46.5) (51.7) (10.1) 53.6 4.2 >100 23.7 19.2 23.4 Segmental Revenue Heavy Engineering 158.0 Marine Group Revenue 217.8 Segmental EBIT (After Segment Elimination) Heavy Engineering (22.4) Marine 14.4 Others & Elimination 9.4 (2.3) (0.9) >100 20.9 >-100 -3.2 28.5 >-100 (10.3) (15.6) (33.9) (0.5) >100 (25.9) (4.0) >100 -14% -16% -15% -15% Marine 14% 11% 5% 8% 10% Group EBIT margin -4% -7% 0% -5% -1% Group EBIT Segmental EBIT margin Heavy Engineering -12% Figure 3: Earnings Summary (RM mn) YE 31 Dec Revenue EBITDA EBITDA margin Pretax profit Net profit Core Net Profit Core EPS Core EPS growth DPS Divd Yield (%) (sen) (%) (sen) (%) 2015 2,459.0 137.2 5.6 22.5 43.9 87.1 2016 1,191.2 64.3 5.4 (135.0) (134.3) (1.3) 2017E 1,009.1 33.4 3.3 (32.8) (31.7) (31.7) 2018F 1,299.9 42.7 3.3 (28.5) (8.5) (8.5) 2019F 1,655.9 61.2 3.7 (14.6) 5.4 5.4 5.4 (23.6) 0.0 0.0 (0.1) >-100 0.0 0.0 (2.0) >-100 0.0 0.0 (0.5) (73.2) 0.0 0.0 0.3 >-100 0.0 0.0 Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy 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. TA Securities COMPANY UPDATE Friday , 4 August 2017 FBMKLCI: 1,771.90 Sector: Property A Member of the TA Group MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 Sunway Berhad TP: RM4.16, ex-bonus: RM1.78 (-3.8%)) Unlocking the Value of Sunway Clio Property Last Traded: RM4.32, ex-bonus: RM1.85 Sell THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Thiam Chiann Wen Tel: +603-2167 9615 cwthiam@ta.com.my Injecting Sunway Clio Into Sunway REIT Sunway is injecting Sunway Clio Property to Sunway REIT for RM340mn. Sunway Clio Property comprises: 1) a 19-storey, four-star hotel with 401 rooms known as Sunway Clio Hotel, 2) a 3-storey retail space with net lettable area (NLA) of 88,384 sq ft known as Sunway Pyramid West, and 3) a multi-storey car park with 732 bays – see Appendix 1. Sunway Clio Property is connected to Sunway Pyramid Mall through a pedestrian sky bridge and underground car park. The proposed acquisition is expected to be completed by 4QCY17 (or 2QFY18). Signed Hotel Lease and Car Park Tenancy Agreement with Sponsor The Sunway Clio Property is an income-generating property with decent occupancy rates of 71.6% for hotel operations and 88.2% for the Retail Space. Post disposal, the hotel will be leased back by Sunway Bhd with an initial tenure of 10 years and a renewal option of further 10 years. Under the lease agreement, rental will be based on minimum rental of RM8mn (Year 1-2) and 11mn (Year 3- 10) or Variable Rent for that fiscal year – whichever higher. See Appendix 2 for total rental computation. Besides, Sunway Bhd has also entered into a car park tenancy agreement with Sunway REIT for a period of three years commencing from the date of completion of the acquisition, with the option of renewal of a further 3 years. Sunway Bhd will pay Sunway REIT rental on monthly basis, based on 20% of gross operating revenue + 95% of gross operating profit. See Appendix 3 for rental computation. According to the announcement, Sunway Bhd is providing Sunway REIT with a guaranteed property income of RM20.2mn per annum for a period of four years. Should there be any shortfall, Sunway Bhd will pay the amount equivalent to the difference between the actual total annual property income achieved and the guaranteed property income. i n www.taonline.com.my Share Information Bloomberg Code SWB MK Stock Name Sunway Stock Code 5211 Listing Main Market Share Cap (mn) 2046.6 Market Cap (RMmn) 8841.5 Par Value 1.00 52-wk Hi/Lo (RM) 4.40/2.84 12-mth Avg Daily Vol ('000 shrs) 1816.30 Estimated Free Float (%) 29.5 Beta 0.5 Major Shareholders (%) Sungei Way Corp (56.4) EPF (5.4) Forecast Revision FY17 FY18 0.0 (1.3) Net profit (RMm) 558.5 599.7 Consensus (RMm) 561.6 599.3 TA's / Consensus (%) 99.4 100.1 Forecast Revision (%) Previous Rating Sell (Maintained) Financial Indicators FY17 FY18 Net Debt / Equity (%) 39.8 36.6 FCPS (sen) 20.3 14.2 Price / CFPS (x) 9.1 13.1 ROA (%) 3.0 3.2 NTA/Share (RM) 1.5 1.6 Price/NTA (x) 1.3 1.2 Share Performance (%) Unlocking asset value and freeing up cash We view this as a positive move to unlock asset value and free up cash flow to finance the construction of new development projects and property investments in the pipeline. According to the announcement, proceeds from the asset disposal will be partly used for repayment of bank borrowings (81% of proceeds) and for working capital (19% of proceeds). Post disposal, the group’s net gearing is expected to reduce to 0.47x from 0.41x previously. Sunway FBM KLCI 1 mth 10.8 0.6 3 mth 25.2 0.8 6 mth 42.1 5.2 12 mth 47.9 7.0 Price Change (12-Mth) Share Price relative to the FBM KLCI Impact We consider this disposal consideration of RM340mn as fair to Sunway as it is at par with the market value derived by the independent valuer. The disposal will give rise to a disposal gain of RM29.4mn. Assuming the asset injection exercise to be completed in 2QFY18, we trimmed FY18-19 core earnings estimates (excluding disposal gain) by 1-2% to account for the RM20.2mn rental expenses (based on guaranteed rent), partly offset by lower interest expenses. Source: Bloomberg Page 1 of 4
19. TA Securities 4-Aug-17 A Member of the TA Group Valuation With change in earnings and the increase in target price of Sunway REIT (please refer to the Sunway REIT report), we adjust our SOP-derived target price slightly to RM4.16/share (from RM4.15/share previously). Our ex-bonus target price is largely unchanged at RM1.78/share. We believe the recent sharp rally in share price has largely factored in positive newflows such as new land acquisitions, proposed 4-for-3 bonus issue and 3-for-10 bonus warrants. Maintain Sell. SOP Valuation Table – (Ex- Bonus) Amount (RM mn) CY18 Property Earnings SunCon @ RM2.26 TP SunREIT @ RM1.88 TP CY18 Healthcare Earnings CY18 Other Business Earnings SOP Value 213.2 2922.2 5522.7 60.0 61.6 Multiple 14 1 1 20 12 Appendix 1: Sunway Clio Property Detail Source: Bursa Malaysia, Sunway REIT Appendix 2: Hotel Lease Agreement Source: Bursa Malaysia, Sunway REIT Page 2 of 4 Stake 100% 54% 37% 100% 100% Sunway's Per Share Share (RM (RM) mn) 2984.8 0.62 1589.7 0.33 2060.0 0.43 1200.0 0.25 739.2 0.15 8573.6 1.78
20. TA Securities 4-Aug-17 A Member of the TA Group Appendix 3 : Car Park Tenancy Agreement Source: Bursa Malaysia, Sunway REIT Page 3 of 4