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Bursa Malaysia Daily Market Report - 4 July

Mohd Noordin
By Mohd Noordin
6 years ago
Bursa Malaysia Daily Market Report - 4 July

Ard, Mal, Sukuk , Commenda, Receivables, Reserves, Sales

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  1. Tuesday , 04 July, 2017 For Internal Circulation Only TA RESEARCH’S ‘DAILY COMPILED REPORTS’ News 1. Daily Market Commentary 2. Daily Brief Fundamental Reports 1. Mah Sing Group Berhad: Stays On Acquisition Trail 2. SKP Resources Berhad: Ready to Take On New Projects 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 Tuesday, 04 July 2017 TA Research e-mail : taresearch@ta.com.my For Internal Circulation Only KLSE Market Statistics (03.07.2017) Volume (mil) +/-chg (RMmn) Main Market 1,303.2 171.3 1,646.6 Warrants 132.0 20.9 15.6 ACE Market 311.7 55.1 71.9 Bond 15.8 7.9 4.0 ETF 0.0 -0.02 0.0 Total 1,762.7 1,738.2 Off Market 67.4 33.7 41.9 Value +/-chg -589.4 -0.5 12.5 1.3 -0.02 36.5 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP July 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) 41.8 6.0 5.0 3.5 2.5 2.0 2.0 1.6 1.5 Up Down 309 311 58 85 48 46 4 5 0 1 419 448 % chg % YTD chg 1,768.67 12,630.09 17,488.91 1,768.50 5.00 31.15 44.95 1.00 0.28 0.25 0.26 0.06 7.73 10.15 18.85 8.13 21,479.27 6,110.06 7,377.09 20,055.80 2,394.48 25,784.17 3,223.46 1,579.41 5,910.24 3,195.91 1,905.20 5,684.49 129.64 -30.36 64.37 22.37 2.69 19.59 -3.02 4.67 80.53 3.48 7.52 -37.01 0.61 -0.49 0.88 0.11 0.11 0.08 -0.09 0.30 1.38 0.11 0.40 -0.65 8.69 13.50 3.28 4.93 18.16 17.20 11.90 2.36 11.58 2.97 -3.25 0.33 Top 10 KLCI Movers Based on Mkt Cap. Off Market HUBLINE MAGNA CARIMIN CIMB SEAL BJASSET SIME SGB-PA AEM Review & Outlook Value/ Volume 1.26 0.12 0.23 0.25 1.65 0.99 0.62 @ @ @ @ @ @ @ @ @ (RM) 0.07 1.50 0.32 0.65 0.42 1.30 9.50 0.15 0.16 Exchange Rate USD/MYR 4.3043 0.0125 USD/JPY 113.04 1.0300 EUR/USD 1.138 -0.0028 Counter Mkt Cap. (RM’mn) MAYBANK 101,513 SIME 64,676 CIMB 58,400 PCHEM 48,198 DIGI 39,031 PETGAS 37,200 GENTING 35,886 GENM 31,913 HLBANK 28,152 KLK 26,518 Chg (RM) 0.01 0.01 0.20 0.10 0.02 0.26 0.06 0.13 0.03 0.02 Bursa Malaysia shares rose Monday, with Petronas heavyweights leading gains as oil prices climbed on short-covering and as drilling in the US for new oil production fell for the first time since January. The KLCI was up 5 points to close at the day's high of 1,768.67, off an early low of 1,756.37, but losers edged gainers 448 to 419 on total turnover of 1.76bn shares worth RM1.73bn. Yesterday's mild rebound lifted the index to close above the lower Bollinger band (1,762) but it's still below the 50-day moving average (1,772), hence further rebound is needed to improve recovery momentum. Better support is from the 100-day moving average at 1,748, while immediate resistance will be at 1,772, then 1,782, followed by the recent peak of 1,796, and then the 1,800 psychological level. The daily stochastics buy signal on Sapura Energy implies good nearterm rebound potential towards the 50%FR (RM1.70), with a convincing breakout to aim for the 61.8%FR (RM1.79) ahead, while key chart supports are at the 38.2%FR (RM1.60) and 22 June low (RM1.53). Similarly, Wah Seong should rebound further before meeting profit-taking resistance from the upper Bollinger band (99sen), with next upside hurdle from the 50%FR (RM1.04). Key chart supports are from the 100-day (90sen) and 200-day (87sen) moving averages. News Bites • • • • Vol. (mn) 12.22 8.64 6.97 2.45 3.97 0.40 2.34 3.94 2.64 1.37 • Commodities Futures Palm Oil (RM/mt) 2,492.00 37.00 Crude Oil ($/Barrel) 47.05 0.72 Gold ($/tr.oz.) 1,219.50 -21.90 • Important Dates TDM - 1:10 Bonus Issue - BI of 150.5m shares. 1 bonus share for every 10 existing shares. Entitlement Date: 03/07/2017. LISTING ON: 04/07/2017. SCC - 1:10 Bonus Issue - BI of 4.3m shares. 1 bonus share for every 10 existing shares. Ex-Date: 06/07/2017. Entitlement Date: 10/07/2017. LISTING ON: 11/07/2017. • • • • • • Lotte Chemical Titan Holding Bhd has reduced the number of new shares offered to institutions to 580 million, or nearly a quarter, due to lack of strong response for the shares at RM8.00 each. Mah Sing Group Bhd has acquired two new pieces of prime lands in Batu 2.5 Cheras, Kuala Lumpur and Bukit Mertajam, Penang, for a total RM307.3mn. Yinson Holdings Bhd is planning to sell a 26% stake in its indirect wholly-owned unit Yinson Production (West Africa) Pte Ltd to a Japanese consortium for between USD104mn to USD117mn. Bina Puri Holdings Bhd has received the green light from the Indonesia Stock Exchange for the listing of its subsidiary PT Megapower Makmur Tbk and the issue price for the shares has been fixed at 200 rupiah. Mega First Corporation Berhad through its wholly-owned subsidiary had increased its shareholding in Premier Capacity Sdn Bhd to 50.25% through the purchase of 100,000 shares for the aggregate cash consideration of RM10.0mn. Cagamas Bhd's issuance of its five-year conventional medium term notes of RM1.0bn received strong demand and were competitively priced at 4.09%. Chin Hin Group Bhd is pushing ahead with its foray into the solar power investment business with the proposed purchase of 45% stakes in three companies for RM24.8mn. The board of directors of Felda Global Ventures Holdings Bhd has referred the cases of suspended group president and CEO Datuk Zakaria Arshad and group chief financial officer Ahmad Tifli Mohd Talha to a domestic inquiry panel. Tiger Synergy Bhd, together with landowner LJ Development (KL) Sdn Bhd, will undertake a residential or commercial development with an estimated GDV of RM80.0mn in Klang, Selangor. Top Glove Corp Bhd has disposed of its 36.84% indirect stake in Singapore-based Sonic Clean Pte Ltd, which provides cleanroom washing services and supplies to industries ranging from hard disk drive to medical industries. Malaysian Rating Corp Bhd has downgraded its rating on marine services provider Alam Maritim Resources Bhd's RM500 million Sukuk Ijarah Medium-Term Notes to BB+IS from BBB+IS. AirAsia Berhad, is set to fly to Nha Trang, Vietnam with daily direct flights from Kuala Lumpur, starting Sept 14 this year. 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 Tuesday , July 04, 2017 FBMKLCI: 1,768.67 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 Need Further Rebound to Improve Recovery Momentum Bursa Malaysia shares rose Monday, with Petronas heavyweights leading gains as oil prices climbed on short-covering and as drilling in the US for new oil production fell for the first time since January. The KLCI was up 5 points to close at the day’s high of 1,768.67, off an early low of 1,756.37, but losers edged gainers 448 to 419 on total turnover of 1.76bn shares worth RM1.73bn. Immediate Resistance at 1,772/1,782 Yesterday’s mild rebound lifted the index to close above the lower Bollinger band (1,762) but it’s still below the 50-day moving average (1,772), hence further rebound is needed to improve recovery momentum. Better support is from the 100-day moving average at 1,748, while immediate resistance will be at 1,772, then 1,782, followed by the recent peak of 1,796, and then the 1,800 psychological level. BUY Sapura Energy & Wah Seong for Rebound The daily stochastics buy signal on Sapura Energy implies good near-term rebound potential towards the 50%FR (RM1.70), with a convincing breakout to aim for the 61.8%FR (RM1.79) ahead, while key chart supports are at the 38.2%FR (RM1.60) and 22 June low (RM1.53). Similarly, Wah Seong should rebound further before meeting profit-taking resistance from the upper Bollinger band (99sen), with next upside hurdle from the 50%FR (RM1.04). Key chart supports are from the 100-day (90sen) and 200-day (87sen) moving averages. Asian Markets Higher Following Caixin PMI Data Asian stock markets traded mostly higher on the first day of a new quarter as markets digested China Caixin PMI data and the Bank of Japan's quarterly Tankan survey. Caixin manufacturing PMI for the month of June came in at 50.4, above the 49.5 forecast from Reuters. Meanwhile, the Bank of Japan's quarterly tankan survey reflected that business confidence had improved. The big manufacturers' index registered a score of +17, compared with the forecast of +15. The Nikkei shares average rose 0.11 percent to 20,055.80, while Korean Kospi ended 0.11 percent higher to close at 2,394.48. In China, stock markets traded mixed as investors were cautious at the start of the mid-year earnings season amid lingering concerns of an economic slowdown in the second half and monetary tightening. The blue-chip CSI300 index fell 0.44 percent to 3,650.85 points, while the Shanghai Composite Index rose 0.07 percent to 3,194.79 points. In Australia, the Reserve Bank of Australia is expected to announce its decision on interest rates on Tuesday. The benchmark ASX200 ended lower by 0.65 percent to close at 5,684.49. Dow and S&P 500 Boosted by Energy and Bank Stocks The S&P 500 and Dow closed higher on Monday, with the Dow hitting an intraday record as energy and bank stocks gained, but continued weakness in the technology sector pulled the Nasdaq lower. Trading volume was light due to the abbreviated trading session ahead of the Independence Day holiday on Tuesday. Both Brent and U.S. crude climbed more than 1 Page 1 of 8
  4. TA Securities 4-Jul-17 A Member of the TA Group percent as oil prices rose for the eighth day in a row after data pointed to moderating U .S. output. The energy index rose 1.9 percent, led by gains in Exxon Mobil and Chevron. Meanwhile, financials closed 1.3 percent higher, as the sector notched its sixth advance in the seven sessions. U.S factory activity jumped in June to its highest level in almost three years suggesting economic growth in the second quarter gained some steam, while construction spending held steady in May. The ISM manufacturing rose to 57.8 from 54.9 in May. Later this week, the Federal Reserve will release the minutes from its June meeting and the Bureau of Labor Statistics is scheduled to release its monthly jobs report Friday. The Dow Jones Industrial Average rose 129.64 points, or 0.61 percent, to 21,479.27, the S&P 500 gained 5.60 points, or 0.23 percent, to 2,429.01 and the Nasdaq Composite fell 30.36 points, or 0.49 percent, to 6,110.06. Page 2 of 8
  5. TA Securities 4-Jul-17 A Member of the TA Group News In Brief Corporate Bina Puri Holdings Bhd has received the green light from the Indonesia Stock Exchange for the listing of its subsidiary PT Megapower Makmur Tbk . The issue price for the PT Megapower shares has been fixed at 200 rupiah. The proposed listing involves an offering of up to 245.1mn new shares for subscription. PT Megapower is expected to be listed on the IDX on 5 July 2017. (Bursa Malaysia/ The Edge) Comment: Post IPO, Bina Puri’s effective stake in PT Megapower will be diluted from 64% to 44.8%. 50% of the IPO proceeds shall be used for repayment of debt owning to Bina Puri Power Sdn Bhd, a 80% subsidiary of Bina Puri Holdings Bhd, while the 50% shall be used as additional working capital. The IPO shall raise up to 49.0bn Rupiah or RM15.9m of IPO proceeds. Factoring in earnings dilution and interest saving from the IPO exercise and assuming all the 245.1mn new shares are fully subscribed, we estimate that FY17 to FY19 earnings could be reduced by 1.1% to 3.5%. The power assets are relatively small compared to Bina Puri’s asset base of RM1670.6mn as of end-March 2017.Maintain our HOLD call on BPURI with an unchanged target price of RM0.455, pending finalisation on the number of new shares issued. Yinson Holdings Bhd is planning to sell a 26% stake in its indirect wholly-owned unit Yinson Production (West Africa) Pte Ltd to a Japanese consortium. In a bourse filing, Yinson said the price is expected to be in the range of USD104mn (RM447.2mn) to USD117mn. Yinson has inked a heads of agreement with the consortium to facilitate the disposal, with the understanding that the two sides will form a collaboration in relation to the contract for the chartering, operation and maintenance of a floating production, storage and offloading facility by Eni Ghana Exploration and Production Ltd in Ghana. (Financial Daily) Mega First Corporation Berhad announced that its wholly-owned subsidiary, Rock Chemical Industries (Malaysia) Sdn. Berhad (RCI) had increased its shareholding in Premier Capacity Sdn Bhd through the purchase of 100,000 shares from two unrelated third parties for the aggregate cash consideration of RM10.0mn. Consequently, RCI’s shareholding (direct and indirect) in Premier Capacity was increased on 30 June 2017 from 1,000 shares to 101,000 shares representing 50.25% equity interest in Premier Capacity. (Bursa Malaysia/Financial Daily) Cagamas Bhd's issuance of its five-year conventional medium term notes (CMTN) of RM1.0bn received strong demand and were competitively priced at 4.09%. The National Mortgage Corporation of Malaysia said the notes were issued under the company’s RM40.0bn MTN programme. (StarBiz) Chin Hin Group Bhd is pushing ahead with its foray into the solar power investment business with the proposed purchase of stakes in three companies for RM24.8mn. The building materials company said it had inked a MoU with the shareholders of Atlantic Blue Sdn Bhd; Powertrack Sdn Bhd and Solarvest Energy Sdn Bhd buy a 45% stake. Chin Hin said the move was to boost its involvement in solar power investment business and also to expand regionally to tropical countries. The corporate exercise would allow Chin Hin to enjoy the profits derived from the business of the companies. (StarBiz) The board of directors of Felda Global Ventures Holdings Bhd (FGV) has referred the cases of suspended group president and CEO Datuk Zakaria Arshad and group chief financial officer Ahmad Tifli Mohd Talha to a domestic inquiry panel. FGV said in a statement to Bursa Malaysia the board made the decision after evaluating and considering both of their replies to the show-cause letters and the process was expected to take about two months. (Bursa Malaysia/StarBiz) Mah Sing Group Bhd (Mah Sing) has acquired two new pieces of prime lands in Batu 2.5 Cheras, Kuala Lumpur and Bukit Mertajam, Penang, for a total RM307.3mn. It said the lands in Kuala Lumpur and Penang were for a proposed integrated development and a business Page 3 of 8
  6. TA Securities 4-Jul-17 A Member of the TA Group park respectively with a combined gross development value (GDV) of RM2.4bn. The property developer said in a statement that it had signed an agreement to acquire Cordova Land Sdn Bhd, which has an offer accepted by DBKL to purchase the 11.233 acres of prime land along Batu 2.5 Jalan Cheras, Kuala Lumpur. It said the land is 1.8km from the Sunway Velocity Mall and will be developed into M Vertica, an integrated development with an estimated GDV of RM2.2bn. (StarBiz) Lotte Chemical Titan Holding Bhd (LCT), which is seeking to list on the Main Board of Bursa Malaysia, has reduced the number of new shares offered to institutions to 580.0mn, representing a reduction of 21.7%, due to lack of strong response for the shares at RM8.00 each. LCT’s entire enlarged issued share capital to be listed and quoted on the Main Market of Bursa Securities assuming no exercise of the Over-allotment Option will be RM6.7mn comprising 2.3mn shares instead. The size of the Over-allotment Option of up to 55.3mn shares remains unchanged, representing up to 9.6% of the New IPO Offering Size. (Bursa Malaysia) TA Investment Management Bhd has declared a gross income distribution of 3.5 sen per unit for TA Growth Fund unit holders as at June 30, 2017. In a statement, the fund manager said it aimed to achieve steady income and capital growth over the medium to long term, banking on the country's strong economic growth. It expects the equities market to chart growth for the year, despite some quiet or volatile months. The key driving forces for the market would be liquidity flows and market valuations, it said. (Bernama) Tiger Synergy Bhd, together with landowner LJ Development (KL) Sdn Bhd, will undertake a residential or commercial development with an estimated GDV of RM80.0mn in Klang, Selangor. Tiger Synergy's wholly-owned subsidiary Pembinaan Terasia Sdn Bhd had on Friday signed a memorandum of understanding with LJ Development for the proposed project. (The Edge Markets) Building materials distributor Chin Hin Group Bhd has proposed the acquisition of 45% stakes in three companies for RM24.8mn to boost its involvement in the solar power investment business. It said the proposed acquisitions would also grant the group opportunities to expand its solar power investment business regionally to tropical countries. (Bursa Malaysia/The Edge Markets) Top Glove Corp Bhd has disposed of its 36.84% indirect stake in Singapore-based Sonic Clean Pte Ltd, which provides cleanroom washing services and supplies to industries ranging from hard disk drive to medical industries. The remaining 63.16% stake in Sonic Clean is held by Unisteel Technology Ltd. It said the proposed disposal is part of the group's strategic business rationalisation plan to streamline its business. (Bursa Malaysia/The Edge Markets) Malaysian Rating Corp Bhd has downgraded its rating on marine services provider Alam Maritim Resources Bhd's RM500 million Sukuk Ijarah Medium-Term Notes to BB+IS from BBB+IS. It said the rating remains on MARCWatch Negative. MARC said Alam Maritim continues to remain under an informal standstill arrangement with its financiers, the continuation of which is conditional upon the company submitting a proposed debt restructuring scheme that is in compliance with the CDRC's restructuring principles by endJuly 2017. (The Edge Markets) Texchem Resources Bhd announced that Dim Sum Delight Sdn Bhd, the operator of two Michelin-star Tim Ho Wan restaurants in Malaysia, has ceased business operations due to challenging future prospects. Texchem owns 51% in Dim Sum Delight, while the remaining 49% reportedly belongs to a Malaysian company owned by Angel Chong and Kelvin Khoo. (Bursa Malaysia/The Edge Markets) Maxis Bhd gave away RM1.0mn in cash as part of its efforts to ensure customers enjoy the best network experience and to encourage them to swap from 3G to 4G SIM card. In a Page 4 of 8
  7. TA Securities 4-Jul-17 A Member of the TA Group statement , the telecommunications company said, a total of RM1.0mn in cash had been awarded to 30 Maxis and Hotlink customers who upgraded their 3G SIM card to a 4G SIM card since the campaign was launched in May. (Bernama) Credit card usage by Malaysian women increased 129% over the last five years, while for men, it grew 71% over the same period, said United Overseas Bank (Malaysia) Bhd. The bank said women had been using their credit card to pay for basic necessities such as insurance, groceries and utilities, as well as niceties such as travel and lifestyle shopping. (Bernama) ECS ICT Bhd unit, ECS Pericomp Sdn Bhd, has been appointed the authorised distributor for Palo Alto Networks in Malaysia and Brunei. ECS Chief Executive Officer Soong Jan Hsung said the appointment enabled Palo Alto Networks to leverage ECS' vast ecosystem of channel system integrators and strengthen market presence in Malaysia and Brunei. (Bernama) Keck Seng (M) Bhd announced that the recent shareholding changes among its substantial shareholders did not trigger any mandatory general offer (MGO). Keck Seng explained in the filing to the stock exchange that the MGO was not triggered simply because the takeover rules are different from substantial shareholding notification rules. (Bursa Malaysia/Financial Daily) Ajinomoto (Malaysia) Bhd announced the appointment of Naoko Yamamoto as Managing Director, effective July 1. In a filing to Bursa Malaysia, the company said Yamamoto joined Ajinomoto Co Inc Japan in 1991 and began her career with the Fukuoka branch before assuming various positions within the Ajinomoto group in Japan and overseas. (Bernama) AirAsia Berhad, is set to fly to Nha Trang, Vietnam with daily direct flights from here, starting Sept 14 this year. In a statement today, AirAsia said, the route, operated with a flight code AK, marked the airline's fourth route into Vietnam that would give guests a chance to discover the country's hidden gem. (Bernama) An AirAsia X Berhad’s flight which took off from Gold Coast bound for Kuala Lumpur made an emergency landing in Brisbane after a possible bird strike damaged the right engine. According to Sydney Morning Herald, passengers reported seeing sparks coming from the engine and heard loud banging sounds. Flight D7207 took from the Gold Coast bound for Malaysia at 10.50pm on Monday night. One passenger, Tim Joga, told Sydney Morning Herald that the plane started to vibrate soon after taking off. (The Edge Markets) Page 5 of 8
  8. TA Securities 4-Jul-17 A Member of the TA Group News In Brief Economy Asia Malaysia Manufacturing PMI Falls to Record Low – Nikkei The manufacturing sector in Malaysia continued to contract in June, and at a faster rate, the latest survey from Nikkei revealed on Monday with a series record low manufacturing PMI score of 46.9. That's down from 48.7 in May, and it falls further beneath the boom-or-bust line of 50 that separates expansion from contraction. Individually, output and new orders fell at steeper rates, while staffing levels stagnated. There were record downturns in buying activity and input stocks. (RTT News) Japan Business Sentiment Hits Abenomics Peak Business confidence in Japan has bounced back to its highest since early 2014 as growth accelerates. The Bank of Japan’s Tankan index for large manufacturers — a closely watched indicator of the economy — rose from +12 to +17 in the second quarter of 2017. That matches its peak in the years since Prime Minister Shinzo Abe’s stimulus began in 2013. A premature consumption tax rise in April 2014 hit economic growth. Acceleration in the Tankan suggests large companies are becoming more optimistic about the economy as exports rebound and a tight jobs market lifts consumption. The survey offers a muchneeded boost to Mr Abe after his party suffered a heavy defeat in elections to the Tokyo city assembly at the weekend. However, business confidence is still short of the +20 levels that prevailed from 2004 to 2007 — let alone the +40 it reached during Japan’s 1980s boom — suggesting the corporate sector will remain cautious about new investment for now. (Financial Times) Japan June Final Manufacturing PMI 52.4 vs Flash 52.0, Final 53.1 in May Japanese manufacturing activity expanded at a slightly slower pace in June due to some weakness in domestic orders but an upward revision to export orders suggests the factory sector remains on firm footing. The final June Markit/Nikkei Japan Manufacturing Purchasing Managers' Index (PMI) was 52.4, higher than a preliminary reading of 52.0 but still below a final 53.1 in May. The index remained above the 50 threshold that separates expansion from contraction for the 10th consecutive month. The final index for new orders, which includes both domestic and overseas orders, was 52.3. This compares to a flash reading of 51.3 and a final 53.4 in May. The index for new export orders was revised up in June to a final 53.4 from a preliminary 52.5. In May, that index was 53.0. The PMI survey comes after government data showed industrial production in May fell by the most since the March 2011 earthquake and inventories rose to the highest in almost a year, causing some economists to turn pessimistic on the outlook. (Reuters) Japan's Consumer Sentiment Weakens Unexpectedly in June Japan's consumer sentiment weakened unexpectedly in June, survey data from the Cabinet Office showed Monday. The consumer confidence index fell to seasonally adjusted 43.3 in June from 43.6 in May. The score was forecast to improve to 43.9. The overall likelihood index slid to 41.1 from 42.2 a month ago. Likewise, the indicator for income growth dropped to 41.6 from 42.0. On the other hand, the index measuring employment rose 0.3 to 48.1 in June and the willingness to buy durable goods indicator held steady at 42.2. The survey was conducted on June 15. (RTT News) Caixin PMI for June Comes in at Three-Month High, Beating Forecast The Caixin China manufacturing purchasing manufacturers' index (PMI) for June beat expectations, offering another signal that the world's second-largest economy continues to defy expectations for a slowdown. The private survey came in at 50.4, marking a threemonth high. It was up from May's 49.6, which was an 11-month low, and beat a Reuters poll forecast for 49.5. Levels above 50 signal an expansion, while levels below 50 indicate contraction. The Caixin PMI tends to focus on smaller, private companies, while the official data tends to focus on larger, often state-owned companies. The rise was spurred by stronger increases in production and new orders, prompting companies to increase purchasing activity by a tad, even as muted client demand pushed manufacturers to cut Page 6 of 8
  9. TA Securities 4-Jul-17 A Member of the TA Group inventories and reduce their workforce numbers . China is a key destination for Australia's exports of commodities. The June Caixin PMI wasn't all positive, with the release saying the optimism toward the business outlook touched its lowest level so far this year. (CNBC) Singapore House Prices Continue to Fall Singapore's house prices continued to decline in the second quarter, the flash estimate from the Urban Redevelopment Authority showed Monday. House prices dropped 0.3 percent sequentially, following a 0.4 percent fall in the previous quarter. Prices have fallen for 15 straight quarters. Prices of non-landed private residential properties fell by 0.9 percent in Core Central Region, while it increased 0.5 percent in the Rest of Central Region. Prices in Outside Central Region slid 0.4 percent. Prices of landed residential properties also dropped by 0.4 percent. (RTT News) Australia Building Approvals Fall 5.6% in May The total number of building permits issued in Australia slipped a seasonally adjusted 5.6 percent on month in May, the Australian Bureau of Statistics said on Monday - coming in at 16,448. That missed forecasts for a decline of 1.3 percent on month following the 4.4 percent increase in April. On a yearly basis, building approvals tumbled 19.7 percent - again missing expectations for a fall of 14.1 percent after skidding 17.2 percent in the previous month. Individually, approvals for private sector houses added 0.6 percent on month and fell 6.8 percent on year to 9,252. Approvals for private sector dwellings excluding houses tumbled 12.1 percent on month and 31.3 percent on year to 7,027. Dwelling approvals decreased in the Australian Capital Territory (8.2 percent), Victoria (3.9 percent), Western Australia (3.7 percent) and New South Wales (2.6 percent). They were up in Queensland (2.2 percent), Northern Territory (2.1 percent), South Australia (1.6 percent) and Tasmania (1.5 percent). The seasonally adjusted estimate of the value of total building approved was flat in May. (RTT News) United States U.S. Manufacturing-Sector Activity Accelerated in June The strongest reading on U.S. factory activity in nearly three years signaled underlying health in the economy headed into the second half of 2017. The Institute for Supply Management on Monday said its index of U.S. manufacturing activity rose to 57.8 in June, its highest level since August 2014. A number above 50 indicates expansion; economists had expected a more modest rise from May’s 54.9. The closely watched gauge is now just above its level early this year, when it and other survey-based economic indicators had jumped following the 2016 presidential election. This time, the solid reading is accompanied by evidence of a pickup in actual economic growth during the second quarter. The index has signaled expansion in the manufacturing sector for 10 consecutive months, and the details of the latest report were broadly upbeat. The new-orders index rose to 63.5 in June and the production index was up to 62.4. The employment index increased to 57.2. The index tracking new export orders rose to 59.5. The prices index declined to 55.0, signaling slower growth in costs for raw materials. U.S. inflation has softened in recent months, though some top Federal Reserve officials have blamed one-time factors and said they expect low unemployment will push up wages and prices going forward. Among 18 industries tracked in Monday’s report, 15 reported growth during June while three reported contraction. Separately, Meanwhile, U.S. construction spending unexpectedly remained flat in May but federal government outlays on construction projects were the highest in more than four years. The Commerce Department said on Monday that construction spending in May remained unchanged at $1.23 trillion. Spending in April was revised to show it declining 0.7 percent after a previously reported 1.4 percent fall. Economists polled by Reuters had forecast construction spending rising 0.3 percent in May. Construction spending increased 4.5 percent from a year ago. (The Wall Street Journal) Europe and United Kingdom UK Factories Lose Pace as Exports Slow Despite Weaker Pound British factories grew more slowly than expected in June as export orders rose at the weakest pace in five months, according to a survey on Monday that might disappoint Bank of England officials who favour raising interest rates. Page 7 of 8
  10. TA Securities 4-Jul-17 A Member of the TA Group Sterling , which jumped last week on expectations of a BoE shift towards higher borrowing costs, fell after the Markit/CIPS UK Manufacturing Purchasing Managers' Index(PMI) slipped to 54.3 from a downwardly revised 56.3 in May, a three-month low. The reading was below all forecasts in a Reuters poll of economists that had pointed to a reading of 56.5. It also contrasted with a sharp pick-up in growth for factories in the euro zone. Britain's economy barely grew in the first three months of the year, with consumers facing the double hit of accelerating inflation, caused in large part by the fall in the pound since the Brexit vote, and slowing wage growth. Some BoE officials say the consumer drag on the economy is likely to be offset by higher exports and investment and two of the sitting eight monetary policymakers voted last month for a rate hike. A third supporter of a hike has since left the BoE. (Reuters) Eurozone Jobless Rate Lowest Since 2009; Manufacturing Sector Expands The Eurozone unemployment rate held steady at the lowest level in more than eight years in May, official data showed Monday. Purchasing Managers' survey data revealed that the euro area expanded at the fastest pace in over six years in June and exceeded the initial estimate, reflecting improved performances across major economies. The jobless rate came in at seasonally adjusted 9.3 percent in May, the same rate as in April, which was the lowest rate seen since March 2009, Eurostat reported. In the corresponding month last year, the unemployment rate was 10.2 percent. The number of unemployed decreased by 5,000 from April to 15.034 million in May. Compared to previous year, unemployment fell by 1.428 million. The unemployment rate among youth aged below 25 also remained unchanged at 18.9 percent in May. The EU jobless rate was 7.8 percent in May, unchanged from April and down from 8.7 percent in May 2016. Thus, it remained at the lowest rate recorded in the EU28 since December 2008. Among the member states, the lowest unemployment rates in May were registered in the Czech Republic, Germany and Malta. While the Eurozone unemployment rate was unchanged in May, survey indicators point to strong employment gains ahead, Stephen Brown, an economist at Capital Economics, said. Nevertheless, the high degree of slack in some countries suggests that it will be some time before wage growth and inflation pick up across the Eurozone, the economist noted. According to final data from IHS Markit, the Eurozone final manufacturing Purchasing Managers' Index rose to 57.4 in June from 57.0 in May. The score was above the flash 57.3. The PMI has now remained above the neutral 50.0 mark throughout the past four years. (RTT News) Share Buy-Back: 03 July 2017 Company Bought Back Price (RM) Hi/Lo (RM) 33,200 55,000 25,000 1,000 18.92/18.90 0.615/0.61 0.23/0.225 1.41 18.92/18.90 0.62/0.605 0.23/0.225 1.42/1.38 BKAWAN GLBHD GRANFLO TEXCHEM Total Treasury Shares 32,629,431 7,164,800 6,363,800 2,582,500 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 8 of 8 We accept no We, our associates, directors, employees may have an interest in
  11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company AUTOMOBILE BAUTO MBMR UMW Share Price (RM) 03-Jul-17 2.01 2.24 5.84 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 5.51 0.95 0.62 1.26 10.3 24.1 19.7 15.8 25.3 30.7 19.4 9.3 29.7 12.7 8.9 19.0 5.8 4.0 2.2 7.9 4.0 3.4 2.44 2.70 6.47 -17.6 -17.0 -9.7 1.88 1.96 4.09 6.9 14.3 42.7 -5.6 4.7 38.3 4.80 3.70 5.70 8.00 17.50 11.00 23.60 5.80 10.00 1.28 0.96 1.34 1.38 0.66 0.96 0.79 1.32 0.69 33.6 29.4 43.9 49.6 105.2 73.4 137.2 50.7 40.3 30.5 33.6 48.4 55.2 115.5 82.9 142.4 54.5 39.0 11.6 9.1 11.4 13.1 14.9 13.1 14.8 10.0 26.2 12.8 8.0 10.4 11.8 13.6 11.6 14.3 9.3 27.0 4.1 3.0 3.5 3.1 2.6 5.2 2.8 2.4 3.2 4.1 3.0 3.6 3.5 2.6 5.2 2.9 2.4 3.2 4.49 3.00 5.70 6.87 16.30 9.68 20.66 5.59 11.14 -12.9 -11.0 -11.9 -5.1 -3.9 -0.4 -1.6 -9.1 -5.4 3.60 2.08 3.90 4.11 12.70 7.50 19.26 4.53 8.20 8.6 28.4 28.7 58.5 23.3 28.5 5.5 12.1 28.5 5.1 11.7 16.5 44.6 16.0 17.6 3.0 7.9 19.1 0.41 1.35 5.47 3.48 0.65 1.29 2.02 2.05 5.91 0.46 1.62 6.00 3.50 0.78 0.58 2.26 1.49 6.26 0.79 0.63 1.04 1.10 1.00 1.27 na 1.08 0.10 5.7 14.6 28.1 15.3 4.9 8.3 12.6 11.9 42.0 5.7 13.5 34.8 20.3 5.7 9.6 12.5 12.0 45.8 7.2 9.2 19.5 22.7 13.1 15.5 16.0 17.2 14.1 7.2 10.0 15.7 17.1 11.4 13.4 16.1 17.1 12.9 0.0 2.1 2.2 2.2 3.8 0.8 2.7 1.5 4.2 0.0 2.1 2.2 2.7 3.8 0.8 2.7 1.5 4.2 0.51 1.37 5.52 3.61 0.74 1.39 2.15 2.48 6.15 -19.6 -1.5 -0.9 -3.6 -11.6 -7.2 -6.0 -17.2 -3.9 0.37 0.82 4.65 3.07 0.35 0.41 1.56 1.46 5.57 12.3 64.6 17.6 13.4 85.7 218.5 29.5 40.3 6.1 -5.7 28.6 14.4 8.7 7.4 124.3 18.8 19.2 0.5 1.99 2.00 0.49 11.0 11.5 18.1 17.3 5.0 5.0 2.19 -9.1 1.93 3.1 -1.0 15.08 18.40 17.84 21.08 0.50 0.58 74.8 93.1 81.3 20.2 101.9 19.8 18.5 18.1 4.9 4.6 5.4 5.0 15.30 19.10 -1.4 -3.7 13.26 15.24 13.7 20.7 8.3 12.3 2.24 7.55 25.30 1.21 84.00 3.49 1.95 4.90 0.91 2.23 8.62 27.41 1.39 88.66 4.10 2.46 4.41 1.23 0.49 0.35 0.32 0.48 0.36 0.47 0.66 0.43 0.57 6.7 26.4 120.5 6.1 290.1 22.3 27.5 15.7 8.1 7.9 40.6 150.0 6.3 327.7 24.7 27.0 16.6 11.6 33.3 28.6 21.0 19.9 29.0 15.7 7.1 31.2 11.2 28.4 18.6 16.9 19.3 25.6 14.1 7.2 29.4 7.8 1.8 4.0 2.8 5.0 3.3 4.3 3.1 0.9 2.8 2.1 4.6 3.0 5.0 3.3 4.9 4.1 1.0 3.9 3.00 8.89 27.00 1.33 85.00 3.66 2.04 5.00 1.07 -25.3 -15.1 -6.3 -8.9 -1.2 -4.5 -4.4 -2.0 -15.4 2.11 7.30 22.44 1.13 74.12 2.26 1.46 4.14 0.78 6.2 3.4 12.7 7.0 13.3 54.4 33.6 18.3 16.0 -12.8 3.0 7.8 5.1 7.4 37.4 12.7 13.1 13.8 43.48 52.08 1.03 198.6 187.4 21.9 23.2 4.6 4.6 55.64 -21.9 40.61 7.1 -1.6 9.47 5.63 11.51 6.54 1.35 1.29 49.3 25.7 54.7 27.7 19.2 21.9 17.3 20.3 0.5 1.4 0.6 1.6 10.00 6.38 -5.3 -11.8 7.50 4.19 26.3 34.3 19.2 24.6 2.51 0.13 3.34 0.13 0.74 1.24 19.3 0.4 23.2 0.4 13.0 35.8 10.8 36.1 5.6 0.0 6.4 0.0 3.42 0.16 -26.6 -18.8 2.48 0.05 1.2 160.0 -15.2 160.0 5.85 4.21 6.39 4.70 0.78 0.51 9.5 13.3 15.0 16.5 61.3 31.6 39.1 25.6 0.6 1.5 0.6 1.8 6.73 4.37 -13.1 -3.7 5.54 3.85 5.6 9.4 -7.9 0.7 7.38 6.55 1.99 5.72 1.68 6.80 7.60 1.80 6.05 2.20 0.56 0.16 0.34 -0.18 0.29 17.2 35.8 12.3 26.4 3.7 24.4 40.0 15.1 29.8 5.5 42.9 18.3 16.1 21.6 45.0 30.2 16.4 13.2 19.2 30.6 1.1 2.7 1.9 2.3 0.6 1.5 3.1 2.3 2.6 0.8 7.40 7.07 2.38 5.94 2.64 -0.3 -7.4 -16.4 -3.7 -36.4 4.06 5.62 1.88 4.20 1.65 81.8 16.5 5.9 36.2 1.8 52.8 -0.6 -5.7 6.9 -28.8 INDUSTRIAL SCIENTX SKPRES 8.78 1.30 9.69 1.80 0.52 0.53 54.4 8.6 66.4 10.6 16.1 15.1 13.2 12.2 2.1 3.2 2.3 4.0 8.99 1.44 -2.3 -9.7 6.01 1.15 46.1 13.0 31.0 0.8 MEDIA ASTRO MEDIA PRIMA STAR 2.59 0.94 2.35 3.45 0.60 1.40 1.06 0.65 0.64 13.2 1.7 7.1 14.5 2.8 6.5 19.6 55.1 33.1 17.9 33.3 36.2 4.8 1.5 7.7 5.0 2.4 7.7 3.01 1.52 2.70 -14.0 -38.2 -13.0 2.51 0.94 2.19 3.2 0.5 7.3 -0.4 -18.3 4.9 -13.8 -31.0 -6.2 -11.3 -6.4 -20.5 -59.6 0.19 0.80 7.03 0.44 6.43 1.33 0.40 213.2 0.0 5.4 35.6 13.5 25.6 6.3 133.3 -12.6 0.8 32.6 4.6 3.1 -52.0 -21.7 1.30 19.2 -8.8 BANKS & FINANCIAL SERVICES AFG 3.91 AFFIN 2.67 AMBANK 5.02 CIMB 6.52 HLBANK 15.66 MAYBANK 9.64 PBBANK 20.32 5.08 RHBBANK BURSA 10.54 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 0.60 0.73 1.03 3.6 4.3 16.5 13.7 1.7 1.7 0.69 MHB 0.80 0.87 1.82 -1.2 1.3 na 61.1 0.0 0.0 1.16 MISC 7.41 6.85 0.79 56.4 48.9 13.1 15.1 4.0 4.0 7.90 PANTECH 0.59 0.69 1.29 4.1 4.9 14.2 12.0 3.1 3.3 0.67 PCHEM 7.30 7.74 1.07 39.2 40.5 18.6 18.0 2.9 3.0 7.80 SENERGY 1.67 1.71 2.49 6.6 4.0 25.3 42.1 0.6 0.6 2.10 UMWOG 0.42 0.80 2.05 -11.7 -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 1.55 1.55 1.49 12.0 12.6 13.0 12.3 0.0 0.0 1.98
  12. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price (RM) PLANTATIONS FGV IJMPLNT IOICORP KLK SIME UMCCA 1.72 3.03 4.48 24.90 9.51 6.54 Target Price BETA (RM) 1.55 3.88 4.15 26.19 10.02 7.52 1.78 0.47 1.07 0.86 1.23 0.43 EPS (sen) PER (X) FY17 FY18 FY17 FY18 4.2 12.3 18.7 111.8 34.0 37.6 8.5 15.7 21.0 119.1 37.5 34.5 40.8 24.6 23.9 22.3 28.0 17.4 20.2 19.2 21.3 20.9 25.3 19.0 Div Yield (%) 52weeks 52weeks FY17 FY18 High Price % Chg Low Price % Chg 2.9 2.3 2.2 2.2 2.6 3.5 2.9 2.6 2.7 2.4 3.3 2.6 2.52 3.70 4.81 25.50 9.70 6.58 -31.7 -18.1 -6.9 -2.4 -2.0 -0.6 1.42 3.00 4.21 22.92 7.41 5.53 PROPERTY GLOMAC 0.65 0.70 0.59 1.6 6.3 40.5 10.2 4.7 4.7 0.83 -21.8 0.65 HUAYANG 1.04 1.07 0.66 17.3 17.4 6.0 6.0 3.8 3.4 1.43 -27.4 1.04 IBRACO 0.81 0.92 0.37 4.9 10.2 16.6 7.9 4.3 4.9 1.05 -22.9 0.79 IOIPG 2.20 2.25 0.87 17.4 17.4 12.6 12.6 3.2 3.4 2.46 -10.6 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 0.87 0.98 0.28 6.2 10.3 14.1 8.4 1.1 1.1 1.00 -13.0 0.69 SPB 4.86 5.98 0.59 25.6 22.8 13.3 15.0 4.1 4.1 5.19 -6.4 4.32 SPSETIA 3.41 4.10 0.67 11.7 12.6 33.4 30.9 1.3 1.3 4.50 -24.2 2.80 SUNWAY 3.90 3.95 0.47 15.5 15.7 17.1 16.9 6.8 6.9 4.05 -3.7 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 1.75 1.86 0.51 8.9 10.1 19.7 17.3 5.1 5.8 1.84 -4.9 1.63 CMMT 1.55 1.72 0.59 8.1 8.6 19.2 18.0 5.4 5.8 1.72 -9.9 1.45 % Chg YTD 21.1 1.0 6.4 8.6 28.3 18.3 11.0 -10.9 1.8 3.8 17.4 9.0 0.0 0.0 3.2 19.1 17.2 26.1 12.4 21.8 37.2 -7.2 -8.0 -19.0 12.8 9.8 8.7 9.9 8.9 30.0 7.4 6.9 1.7 1.3 POWER & UTILITIES MALAKOF PETDAG PETGAS TENAGA YTLPOWR 1.05 24.32 18.80 14.12 1.45 1.13 21.47 19.60 17.37 1.90 0.76 0.76 0.77 1.01 0.53 7.1 98.4 88.2 131.9 8.2 6.4 102.3 101.3 130.8 10.7 14.8 24.7 21.3 10.7 17.6 16.4 23.8 18.6 10.8 13.6 6.7 3.0 3.3 3.1 6.9 6.7 3.1 3.8 3.2 6.9 1.80 25.70 22.66 14.90 1.64 -41.7 -5.4 -17.0 -5.2 -11.6 1.04 22.92 18.10 13.00 1.39 1.0 6.1 3.9 8.6 4.3 -23.4 2.2 -11.7 1.6 -2.7 TELECOMMUNICATIONS AXIATA DIGI MAXIS TM 4.80 5.02 5.51 6.61 5.25 4.95 5.70 7.50 1.30 0.92 0.71 0.66 14.6 20.8 24.8 21.4 16.0 21.1 25.0 22.3 32.9 24.1 22.2 30.8 30.0 23.8 22.0 29.6 1.5 4.2 3.6 2.9 1.7 4.2 3.6 3.0 5.99 5.19 6.60 6.90 -19.9 -3.3 -16.5 -4.2 4.11 4.64 5.49 5.81 16.8 8.2 0.4 13.8 1.7 3.9 -7.9 11.1 TECHNOLOGY Semiconductor & Electronics IRIS 0.18 INARI 2.11 MPI 13.30 UNISEM 3.59 0.28 2.30 15.60 3.95 1.32 0.80 0.51 0.82 -2.6 10.3 94.2 26.9 -0.3 na 12.4 20.5 112.9 14.1 27.1 13.3 na 17.1 11.8 13.3 0.0 3.8 2.0 3.3 0.0 2.3 2.0 3.3 0.24 2.23 13.50 3.70 -25.0 -5.4 -1.5 -3.0 0.10 1.44 7.20 2.27 80.0 46.8 84.7 58.1 63.6 27.1 79.5 52.1 3.26 8.39 3.34 8.10 1.09 1.44 37.6 17.2 37.1 17.5 8.7 48.7 8.8 48.0 1.2 1.2 1.5 1.2 3.59 9.45 -9.2 -11.2 2.16 5.76 50.9 45.7 42.4 38.4 1.77 3.69 2.05 4.05 0.75 0.67 14.3 17.1 22.7 15.1 12.4 21.5 7.8 24.4 2.4 3.5 4.0 3.1 1.87 4.59 -5.3 -19.6 1.44 3.61 22.9 2.2 11.3 -14.2 TRANSPORTATION Airlines AIRASIA AIRPORT Freight & Tankers TNLOGIS WPRTS SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price (S$) BANKS & FINANCIAL SERVICES DBS 20.65 OCBC 10.72 UOB 23.05 PLANTATIONS WILMAR IFAR 3.30 0.48 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 1.14 1.08 173.8 87.7 195.6 190.2 11.9 92.4 12.2 209.3 11.8 10.9 11.6 11.0 2.9 5.7 3.0 2.9 6.7 3.0 21.2 11.0 24.0 -2.5 -2.1 -4.0 14.72 8.84 17.51 40.3 29.6 31.6 19.1 20.2 13.0 3.72 0.53 0.91 1.12 28.9 4.9 31.1 5.2 10.6 9.1 2.4 2.5 2.7 2.7 4.0 0.6 -17.5 -20.2 2.96 0.44 11.5 8.0 -8.1 -9.5 11.4 9.8 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
  13. COMPANY UPDATE TA Securities Tuesday , 04 July, 2017 FBMKLCI: 1,768.67 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 TP: RM1.76 (+12.0%) Mah Sing Group Berhad Last Traded: RM1.57 Stays On Acquisition Trail Buy THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Thiam Chiann Wen Tel: +603-2167 9615 cwthiam@ta.com.my In a move to streamline its property portfolio and refocus on building affordably priced products particularly in the Klang Valley, Mah Sing announced the followings: 1) Acquisition of 11.2 acres of leasehold land in Cheras for a total consideration of up to RM263.5mn (or RM538psf) Mah Sing signed an agreement to acquire Cordova Land Sdn Bhd (Cordova), which has an offer accepted by DBKL to purchase 11.2 acres of prime land opposite Courts Mammoth along Batu 2.5 Jalan Cheras, Kuala Lumpur – see Appendix 1. The land is 1.8km from the Sunway Velocity Mall and currently houses a surau, Kompleks Belia Bandaraya and Stadium Badminton Kuala Lumpur. The total consideration of up to RM263.5mn was derived after taking into account the acquisition of Cordova’s shares of RM156.3mn, land cost of RM82.1mn and estimated reconstruction and upgrading costs estimated at RM25mn allocated for Stadium Badminton Kuala Lumpur. Under the share sales agreement, the payment for the shares in Cordova will be spread over a maximum period of 21.5 months. 2) Acquisition of 10.9 acres of freehold vacant development land in Bukit Mertajam for RM43.8mn (or RM92psf). Separately, the company has entered into a sale and purchase agreement with Waz Lian Properties S/B for the proposed acquisition of a piece of freehold land in Bukit Mertajam, Pulau Pinang, measuring approximately 10.9 acres, located along the south-western side of Jalan Permatang Tinggi – see Appendix 3. It is zoned for commercial / industrial use and a development order (DO) has been issued on 13 March 2016 for the land, for the development of shop offices and factories. According to the announcement, the total purchase consideration, which amounts to approximately RM43.8mn, includes the costs for conversion premium, land clearance, earthworks and development planning for the land which have already been paid by the vendor. Currently, the land has been cleared with earthworks completed. www.taonline.com.my Share Information Bloomberg Code MSGB MK Stock Code 8583 Listing Main Market 2409.4 Share Cap (mn) 3782.8 Market Cap (RMmn) 0.5 Par Value 1.70/1.34 52-wk Hi/Lo (RM) 2.0 12-mth Avg Daily Vol ('000 shrs) 29.4 Estimated Free Float (%) 0.73 Beta Major Shareholders (%) Mayang Teratai Sdn Bhd - 34.6 EPF - 8.9 Lembaga Tabung Haji -5.8 Kumpulan Wang Persaraan -5.1 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY17 FY18 (0.8) (4.6) 344.9 326.0 351.9 354.1 98.0 92.1 Buy (Maintained) Financial Indicators Net Debt/Equity (%) CFPS (sen) Price/CFPS (x) ROE (%) NTA/Share (RM) Price/NTA (x) Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth FY17 14.6 10.7 14.6 10.1 1.5 1.1 FY18 15.8 3.3 47.7 9.0 1.5 1.0 Mah Sing 1.3 6.1 9.0 6.8 FBM KLCI (0.5) 1.2 7.4 6.9 (12-Mth) Share Price relative to the FBM KLCI 3) Termination of Sultan Salahuddin Abdul Aziz Shah golf course in Shah Alam Mah Sing also announced that the group and the vendor of the 85.4 acres of land in Sultan Salahuddin Abdul Aziz Shah Golf Course in Shah Alam, Selangor has mutually agreed to terminate the sales and purchase agreement as the land conversion approval and consent to transfer were not fulfilled. Recall, the group had announced its plan to buy the portion of land for RM327.5mn (or RM88 psf) in Mar 2014. It had intended to turn the land into a residential development with a GDV of RM2.5bn. Source: Bloomberg 4) Disposal of 51% equity interest in Convention City Development S/B Mah Sing also sold its 51% equity interest in Convention City Development S/B (Convention City) to Diverse Capital S/B (DCSB) for a Page 1 of 5
  14. TA Securities 4-Jul-17 A Member of the TA Group total of RM6 .6mn. Note that DCSB previously held 49% stake in Convention City. According to the announcement, the stake was acquired back in 27 May 2013 for RM1.6mn as Convention City has the development agreement to develop 8.3 acres of land next to Sabah International Convention Centre, in Kota Kinabalu. However since the execution of the development agreement in 2013, the landowners’ obligations, which include registration of land title with condition for commercial development, settlement of conversion premiums and delivery of vacant possessions have yet to be completely fulfilled. Mah Sing is expected to realise a gain of RM4.9mn from this sale. Purchases could generate a combined potential GDV of RM2.35bn Based on the preliminary plan, Mah Sing will undertake a residential development named M Vertica on the land in Cheras. According to management, the development, which would be affordably priced, will feature service apartments with indicative built-ups of 850 sq ft to 1,000 sq ft priced from RM450k/unit (or RM529psf). Spanning over a period of 4-5 years, the development is expected to yield a GDV of RM2.2bn. Meanwhile, the group intends to develop the land in Permatang, Penang into an industrial business park comprising light industrial factories and shop offices. This industrial business park is expected to generate potential GDV of RM150mn and to be developed over a period of 3 to 4 years. Although the land has obtained a DO earlier, we understand that the group will submit revised development plans to the relevant authorities for approval to change certain components of the DO to maximize the development potential of the land. In terms of launching schedule, management indicates that the preview of both projects are targeted by end 3Q17. Official launch will likely in 1Q2018, management guided. Reasonable Land Costs The acquisition costs of the Cheras land and Bukit Mertajam land represents a 21% and 3.3% discount to the land market value of RM333.2mn and RM45.3mn - as appraised by independent market valuer. Based on the estimated GDV of RM2.2bn, the Cheras land cost makes up 12% of the total development value, which is below the general rule of thumb of 20%. With that, we believe this project could generate a decent PBT margin of around 20%. Separately, we think the acquisition cost for Bukit Mertajam land is reasonable despite it accounting for 29% of the total GDV, as it includes the costs for conversion premium, land clearance, earthworks and development planning. Positive on the land acquisitions for future growth We are positive on the land acquisitions as it is in line with the group’s focus to acquire prime land in strategic locations especially in the Klang Valley. We expect M Vertica in Cheras to replicate the group’s existing projects such as Lakeville in Taman Wahyu and D’saral Sentral in Sungai Buloh, which have been well-received by first time home buyers, working professionals, young families and home upgraders seeking to live close to the city centre. Meanwhile, the Bukit Mertajam land will provide the group with an opportunity to further strengthen its branding in the development of the group’s i-Parc series of industrial properties. Meanwhile, the termination of the Shah Alam land and disposal of 51% stake in Convention City will allow the group to redeploy resources to its other ongoing property development projects and / or for other land banking opportunities as the group is focusing to increase its presence in the Klang Page 2 of 5
  15. TA Securities 4-Jul-17 A Member of the TA Group Valley . In terms of funding, we believe Mah Sing’s strong balance sheet with 0.02x net gearing ratio and cash balance of RM838mn as at Mar-17, should provide financial flexibility for the land acquisitions. Impact We remove Shah Alam land and Kota Kinabalu Convention Centre contributions from our model. Meanwhile, we assume M Vertica and the business park will be launched in 1Q2018. Net impact to our FY17/18/19 earnings are -0.8%/-4.6% /-6.7%. Valuation Factoring in the change in earnings, we arrive at a new target price of RM1.76/share (from RM1.70/share previously), based on higher CY18 target P/E multiple of 13x (from 12x previously). The higher target P/E multiple is premised on brighter sales prospect following the recent land acquisitions. We continue to like Mah Sing’s healthy balance sheet, and focused strategy to provide mass-market housing in the urban regions. With a potential total return of 16.2%, we maintain Mah Sing as Buy. Table 1: Landbanking in 2017 Land size Purchase consideration Purchase consideration GDV Land cost/GDV (Acres) (RM'mil) RM/sf (RM'mil) (%) 3.6 60.0 386.9 650 9.2 Sentul 8.5 129.1 348.6 1300 9.9 3-Jul-17 Cheras 11.2 263.5 538.5 2200 12.0 3-Jul-17 Bukit Mertajam 10.9 43.8 92.3 150 29.2 Date of announcement Location 17-May-17 Titiwangsa 26-May-17 Source: Mah Sing, TA Research Appendix 1: Location of Cheras Land Source: Mah Sing Page 3 of 5
  16. TA Securities 4-Jul-17 A Member of the TA Group Appendix 2 : Artist Impression of M Vertica Source: Mah Sing Appendix 3: Location of Bukit Mertajam Land Source: Mah Sing Page 4 of 5
  17. TA Securities 4-Jul-17 A Member of the TA Group Profit & Loss (RMm) YE Dec 31 Revenue COGS Gross profit 2015 3108.5 (2314.1) 794.4 2016 2957.6 (2212.2) 745.5 2017F 3075.3 (2152.7) 922.6 2018F 2944.5 (2061.2) 883.4 2019F 2694.3 (1886.0) 808.3 EBITDA Depreciation Amortisation EBIT Finance cost PBT 516.4 (16.4) (0.0) 500.0 0.4 503.7 491.1 (13.5) (0.0) 477.6 (4.9) 482.9 538.0 (16.4) (0.0) 521.5 (5.4) 516.2 514.4 (13.5) (0.0) 500.8 (5.5) 495.3 518.8 (16.4) (0.0) 502.4 (5.7) 496.7 Tax MI Net profit Normalised net profit (119.1) 2.0 368.3 338.8 (122.6) 1.0 324.5 324.5 (134.2) (0.3) 344.9 344.9 (128.8) (3.8) 326.0 326.0 (129.1) (13.4) 317.5 317.5 14.3 6.5 13.5 6.5 13.2 6.5 EPS* (sen) 14.1 13.5 DPS* (sen) 6.5 6.5 * adjusted for 1:4 bonus issue completed in FY15 Cash Flow (RM'mn) YE Dec 31 PBT Depr & Amort Tax Others CFO 2015 503.7 18.0 (153.1) (566.9) (198.3) 2016 482.9 13.6 (139.0) 95.9 453.4 2017F 516.2 16.5 (134.2) 126.5 525.0 2018F 495.3 13.6 (128.8) (13.7) 366.3 2019F 496.7 16.4 (129.1) (103.8) 280.3 Capex Others CFI (95.8) (4.8) (100.6) (154.8) 0.5 (154.3) (266.6) 0.0 (266.6) (287.1) 0.0 (287.1) (25.6) 0.0 (25.6) Net Addition/Rpmt Dividend Paid Others CFF 1211.7 (156.6) (90.2) 964.9 (200.5) (117.5) (380.4) (698.4) 30.0 (117.5) 0.0 (87.5) 51.7 (117.5) 0.0 (65.8) 31.7 (117.5) 0.0 (85.8) Net Cash Flow 666.1 (399.3) 170.8 13.4 168.9 Assumptions YE Dec 31 Sales Prop Dev Margin 2015 2,302 16.3 2017F 1,878 17.2 2018F 2,459 17.5 2019F 2,654 19.0 2016 1,781 17.3 Balance Sheet RM'mn) YE Dec 31 PPE Leasehold land Investment Properties Others LT Assets 2015 109.5 1026.4 7.0 194.8 112.9 1450.7 2016 137.6 1111.8 6.8 199.8 123.8 1579.9 2017F 171.2 1328.4 6.8 199.8 123.8 1830.1 2018F 207.7 1565.5 6.8 199.8 123.8 2103.6 2019F 201.3 1581.1 6.7 199.8 123.8 2112.7 Property dev. Cost Inventories Trade & other receivables Cash & Cash equivalent Others ST Assets 2534.9 190.4 1062.4 1358.7 18.7 5165.0 2294.9 360.0 1039.7 923.8 21.9 4640.3 2378.3 177.1 1051.1 1094.6 21.9 4723.1 2463.7 169.4 1008.4 1108.1 21.9 4771.5 2551.0 155.0 922.7 1276.9 21.9 4927.6 Total Assets 6615.7 6220.2 6553.1 6875.1 7040.3 Trade and other payables ST Borrowings Others ST Liabilities 1364.7 102.4 40.5 1507.7 1311.7 142.4 42.3 1496.4 1350.2 142.4 42.3 1534.8 1371.4 142.4 42.3 1556.1 1254.9 142.4 42.3 1439.6 LT Borrowings Others LT Liabilities 1391.8 32.1 1423.9 859.1 28.6 887.7 889.1 28.6 917.7 940.8 28.6 969.3 972.4 28.6 1001.0 Share Cap Reserves Shareholder's Funds Holders of Perpetual Sukuk MI 1204.7 1930.9 3135.6 540.0 8.5 1204.7 2083.4 3288.1 540.0 8.0 1204.7 2310.9 3515.6 576.7 8.3 1204.7 2519.4 3724.1 613.4 12.1 1204.7 2719.4 3924.1 650.2 25.5 Liabilities + Equities 6615.7 6220.2 6553.1 6875.1 7040.3 2015 (31.6) 11.2 6.5 4.1 21.5 13.6 6.2 1.3 1.2 2016 (6.5) 11.7 6.5 4.1 18.8 10.1 5.1 1.4 1.2 2017F 5.6 11.0 6.5 4.1 14.6 10.1 5.4 1.5 1.1 2018F (5.0) 11.6 6.5 4.1 15.8 9.0 4.9 1.5 1.0 2019F (2.4) 11.9 6.5 4.1 12.4 8.3 4.6 1.6 1.0 Land held for dev Ratios YE Dec 31 EPS Growth (%) PER (x) GDPS (sen) Div Yield (%) Net gearing (x) ROE (%) ROA (%) NTA (RM) P/NTA (x) 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 5 of 5
  18. COMPANY UPDATE TA Securities A Member of the TA Group Tuesday , July 04, 2017 FBMKLCI: 1,768.67 Sector: Technology MENARA TA ONE, 22 JALAN P. RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL: +603-20721277 / FAX: +603-20325048 SKP Resources Berhad TP: RM1.75 (+34.6%) Last traded: RM1.30 Ready to Take On New Projects BUY THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Paul Yap, CFA Tel: +603-2167 9603 paulyap@ta.com.my We recently met the management of SKP Resources Berhad for its FY18 outlook. Growth is expected to be driven by the full year contribution of its ECP and cordless vacuum cleaner contract. Capped by a lack of resources previously, the group is now ready to take on new projects. We believe the group is well positioned to capitalise on the growth of Customer X, due to its close relationship and ample capacity still available at its factory. It is also expanding into PCBA. This will be a two pronged strategy, with capacity catering to both Customer X and new potential business opportunities. To be in line with guidance, we lower our FY18-20 earnings by 4.3-6.7%. We value SKP Resources at a lower TP of RM1.75/share. BUY. Similar to 4QFY17 SKP Resources Berhad has done tremendously well in the past three years. Showing explosive growth, its earnings more than tripled from FY14, with an implied 3-year CAGR of 52.8% YoY. Partly due to its larger base, earnings growth is expected to taper down moving forward. FY18 will be a year of consolidation, with attention directed on strengthening its technical capabilities. Management is guiding for a 20% YoY growth in profits for FY18. Profits are anticipated to be similar to 4QFY17 levels. This will be driven by the full year contribution of its cordless vacuum cleaner and electronic consumer product (ECP) projects. Excluding Customer X, the group’s other businesses reported healthy growth of 6% YoY. Making a comeback, improved activity was seen from its electronic related Japanese customers. Ready to Take On New Projects It has been close to a year, since the group last secured the contract to produce ECP worth RM500mn/annum. At that time, due to the explosive demand for ECP coupled with a lack of resources, the group had to forego the production of a cordless vacuum cleaner model previously secured. Now, entering into the second year of its ECP contract and putting labour issues in the past, we are glad to hear the group is ready to take on new projects. We believe this is inevitable, given the bullish growth forecasts by its end customer. Customer X has previously declared targets to launch 100 new products over the next few years. We believe the group is well positioned to capitalise on this, given the close relationship between both parties and ample capacity still available at its factory. Moving into PCBA In April 2017, the group announced its intention to expand into Printed Circuit Board Assembly (PCBA) services. Currently undergoing construction, capex of RM5.0mn has been earmarked for the project. Facilities are expected to be completed by 4Q2017. Post completion, we estimate 62.5% of available floor space at its new factory will be utilised. Page 1 of 3 www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (RMmn) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) SKP MK 7155 Main Market 1,250.2 1,625.2 1.44/1.15 2,191.7 47.7 0.53 Gan Kim Huat - 43.4 EPF - 5.4 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 (6.7) (5.2) 129.6 168.3 140.3 162.0 92.3 103.9 Buy (Maintained) Financial Indicators Net Debt/Equity (%) CFPS (sen) Price/CFPS (x) ROA (%) ROE (%) NTA/Share (RM) Price/NTA (x) FY18 (15.8) 14.3 9.1 12.7 26.1 0.4 3.0 FY19 (21.8) 11.7 11.1 16.0 29.1 0.5 2.6 Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth SKP (2.3) 0.0 3.2 8.3 FBM KLCI (0.5) 1.2 7.4 6.9 (12-Mth) Share Price relative to the FBM KLCI Source: Bloomberg
  19. TA Securities 4-Jul-17 A Member of the TA Group Its entry into PCBA will be a two pronged approach . Capacity will not only be catered to Customer X, with the group open to new business opportunities. As part of its assembly process, PCBs are currently captured under cost of sales for Customer X. In this scenario, with no top line impact, its venture into PCB will likely lead to margin improvements. Nonetheless, there are also possibilities for revenue accretion if it is able to secure new customers for its PCB capacity. However, these discussions remain preliminary. Revising Estimates To be in line with management’s guidance, we lower our FY18/FY19/FY20 earnings by 6.7%/5.2%/4.3% to RM129.6mn/RM168.3mn/RM205.4mn. We assume no new contracts will be secured this year. Our new contract assumption for FY19 and FY20 is RM600mn. Valuation We value SKP Resources at a lower TP of RM1.75/share – based on a PE of 14x and CY18 EPS. We continue to favour the stock for its solid earnings growth outlook, with a 3-year CAGR of 25.3% YoY. Estimated dividend yields are also attractive at 4.0-6.3%. BUY. Key downside risks are: 1) Inability to secure new contracts; 2) Single customer risk and 3) Time lag before cost pass on is implemented. Page 2 of 3
  20. TA Securities 4-Jul-17 A Member of the TA Group P &L YE Mar 31 (RMmn) Revenue EBITDA Depreciation & amortisation Net finance cost EI PBT Taxation MI Net profit Core net profit EPS (sen) DPS (sen) Ratios YE Mar 31 (RMmn) Valuations PER (x) Dividend yield (%) PBV (x) Profitability ratios (%) ROAE ROAA EBITDA margin PBT margin FY16 FY17 FY18F FY19F FY20F 1,051.4 1,943.6 2,151.5 2,809.3 3,467.2 122.0 159.1 192.5 239.5 286.5 (19.1) (20.6) (21.5) (20.9) (20.3) (1.5) (0.1) (0.5) 2.8 4.1 0.0 0.0 0.0 0.0 0.0 101.4 138.5 170.5 221.4 270.2 (19.9) (34.0) (40.9) (53.1) (64.9) 0.0 0.0 0.0 0.0 0.0 81.5 104.5 129.6 168.3 205.4 81.5 104.5 129.6 168.3 205.4 6.5 8.3 10.3 13.4 16.4 3.5 4.2 5.2 6.7 8.2 FY16 FY17 FY18F FY19F FY20F 20.0 2.7 4.8 15.6 3.2 3.6 12.6 4.0 3.0 9.7 5.2 2.6 7.9 6.3 2.3 33.2 14.5 11.6 9.6 26.3 12.7 8.2 7.1 26.1 12.7 8.9 7.9 29.1 16.0 8.5 7.9 30.6 16.1 8.3 7.8 1.9 1.5 1.5 1.2 1.9 1.6 1.9 1.5 1.9 1.5 Leverage ratios (x) Total liabilities/equity Net debt/equity Int. coverage ratio 0.6 0.0 36.6 1.4 0.1 43.2 0.8 (0.2) 77.6 0.9 (0.2) nm 0.9 (0.3) nm Growth ratios (%) Sales Pretax Earnings Total assets 69.8 81.7 92.5 (1.6) 84.9 36.6 28.3 95.9 10.7 23.1 24.0 (13.3) 30.6 29.9 29.9 23.2 23.4 22.1 22.1 19.2 Liquidity ratios (x) Current ratio Quick ratio Balance Sheet YE Mar 31 (RMmn) Fixed assets Associates + Subsidiaries Goodwill Others LT assets FY16 193.1 0.0 0.0 1.8 195.0 FY17 197.1 0.0 0.0 1.8 198.9 FY18F 195.7 0.0 0.0 1.7 197.4 FY19F 189.9 0.0 0.0 1.7 191.5 Inventories Trade receivables Cash Others Current assets 89.8 191.1 45.6 34.1 360.6 160.7 589.9 48.1 90.9 889.6 138.7 432.3 84.9 90.9 746.8 181.1 564.5 135.3 90.9 971.7 223.4 696.7 189.3 90.9 1,200.3 Total assets 555.6 1,088.6 944.2 1,163.3 1,386.6 Trade payables ST borrowings Others Current liabilities 147.5 38.2 0.0 185.7 539.9 66.1 0.0 605.9 389.5 0.0 0.0 389.5 524.5 0.0 0.0 524.5 645.1 0.0 0.0 645.1 15.3 16.4 31.7 7.4 18.4 25.8 0.0 18.4 18.4 0.0 18.4 18.4 0.0 18.4 18.4 Share capital Reserves Shareholders' funds MI 112.0 226.3 338.2 0.0 271.3 185.5 456.8 0.0 286.0 250.3 536.3 0.0 286.0 334.4 620.4 0.0 286.0 437.1 723.1 0.0 Total liabilities and equity 555.6 1,088.6 944.2 1,163.3 1,386.6 LT borrowings Others LT liabilities Cash Flow YE Mar 31 (RMmn) PBT Depreciation and amortisation Net interest Other non-cash Changes in WC Interest paid Tax paid & others Operational cash flow FY20F 184.7 0.0 0.0 1.6 186.2 FY16 101.4 19.1 1.5 1.7 (231.3) 0.0 (22.4) (130.0) FY17 138.5 20.6 0.1 (3.5) (89.2) 0.0 (31.8) 34.6 FY18F 170.5 21.5 0.5 0.0 29.4 (2.2) (40.9) 178.8 FY19F 221.4 20.9 (2.8) 0.0 (39.6) 0.0 (53.1) 146.7 FY20F 270.2 20.3 (4.1) 0.0 (54.0) 0.0 (64.9) 167.7 Capex Interest received Others Investing cash flow (38.1) 1.3 (19.0) (55.8) (26.4) 3.1 (39.9) (63.2) (20.0) 1.7 (0.0) (18.3) (15.0) 2.8 (0.0) (12.2) (15.0) 4.1 (0.0) (10.9) Net share issue Dividend paid Net change in debts Others Financial cash flow 125.9 (21.2) 53.5 (2.8) 155.3 55.1 (41.0) 20.0 -3.2 30.9 14.7 (64.8) (73.5) 0.0 (123.6) 0.0 (84.1) 0.0 0.0 (84.1) 0.0 (102.7) 0.0 0.0 (102.7) Net cash flow Opening cash flow Forex Closing cash flow (30.5) 76.7 (0.7) 45.6 2.2 45.6 0.2 48.1 36.9 48.1 0.0 84.9 50.4 84.9 0.0 135.3 54.0 135.3 0.0 189.3 Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. This report has been prepared by TA SECURITIES HOLDINGS BERHAD for purposes of CMDF-Bursa Research Scheme ("CBRS") administered by Bursa Malaysia Berhad and will be compensated to undertake the scheme. TA SECURITIES HOLDINGS BERHAD has produced this report independent of any influence from the CBRS or the subject company. For more information about CBRS and other research reports, please visit Bursa Malaysia’s website at: http://www.bursamalaysia.com/market/listed-companies/research-repository/research-reports for TA SECURITIES HOLDINGS BERHAD(14948-M) (A Participating Organisation of Bursa Malaysia Securities Berhad) Kaladher Govindan – Head of Research Page 3 of 3