Bursa Malaysia Daily Market Report - 7 December

Transcription

1. Thursday , 07 December, 2017 TA RESEARCH’S ‘DAILY COMPILED REPORTS’ For Internal Circulation Only N ew s 1. D ai l y M arke t C om men t a ry 2. D ai l y B ri ef Fu nd a me n tal Rep o r ts 1 . A s t ro M a la ys ia H o ld i n g s Be r h a d : C o n te n t C o s t N o rm a l i se s 2 . M a la ys i a n Ec o n o m y : G o o d T ra de R e su l t in O c t o b e r 2 0 1 7 3 . S c ie n t e x Be rh a d : Do u b le - Dig i t T o p a n d Bo t to m - lin e g ro w th Te ch n ic al R ep o rt s 1. D ai l y Te ch n ic a l St o ck Pi cks (L o ca l) 2. D ai l y St o ck S cr een 3. D ai l y For ei gn T ech n i c al St o ck P i cks ( AU S) Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my
2. Daily Market Commentary Thursday , 07 December 2017 For Internal Circulation Only TA Research, e-mail : taresearch@ta.com.my KLSE Market Statistics (06.12.2017) (mil) Main Market 1,135.7 Warrants 158.6 ACE Market 282.1 Bond 3.1 ETF 1.0 LEAP 0.0 Total 1,580.4 Off Market 210.9 Volume +/-chg (RMmn) -126.0 2,174.3 -37.8 29.3 -90.9 51.4 -1.1 0.4 0.97 1.7 0.00 0.0 2,257.2 118.4 804.9 Major Indices Index +/- chg Malaysia FBMKLCI FBMEMAS FBMSCAP December 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) % YTD chg -6.51 -48.66 -13.04 -6.00 -0.38 -0.39 -0.08 -0.35 4.67 7.68 12.11 4.59 24,140.91 6,776.39 7,348.03 22,177.04 2,474.37 28,224.80 3,397.21 1,694.39 6,035.51 3,293.97 1,879.65 5,945.71 -39.73 14.18 20.53 -445.34 -35.75 -618.00 -40.85 -3.22 35.04 -9.71 12.67 -26.11 -0.16 0.21 0.28 -1.97 -1.42 -2.14 -1.19 -0.19 0.58 -0.29 0.68 -0.44 22.15 25.88 2.87 16.02 22.10 28.29 17.93 9.82 13.95 6.13 -4.54 4.94 1.45 9.35 4.40 0.02 0.33 0.94 1.40 15.64 0.90 0.06 0.90 4.66 0.26 0.17 0.20 0.01 5.10 0.75 3.21 1.65 Exchange Rate USD/MYR 4.0755 0.0122 USD/JPY 112.28 -0.3200 EUR/USD 1.180 -0.0028 Counter MAYBANK TENAGA PCHEM IHH GENTING HLBANK IOICORP KLK PETDAG HAPSENG Mkt Cap. Chg (RM’mn) (RM) 99,682 88,503 59,040 46,139 33,664 33,098 28,026 26,006 24,340 23,552 -0.12 -0.02 -0.07 -0.04 -0.11 -0.82 -0.04 -0.02 -0.06 -0.19 The local benchmark dipped Wednesday following profit-taking interest on key banking heavyweights and in sympathy with regional weakness. The KLCI shed 6.51 points to settle at 1,718.33, off an early high of 1,722.95 and low of 1,715.10, as losers beat gainers 454 to 380 on muted trade totaling 1.58bn shares worth RM2.26bn. The cautious market undertone, negative breadth and weak regional sentiment should discourage investors to stay sidelined for the near-term. On the index, overhead resistance rests at 1,727 (61.8%FR), followed by the 30-day and 50-day moving averages at 1,731 and 1,740 respectively, then 1,750, next will be 1,754, the 200-day moving average. Crucial retracement supports remains at 1,705 (50%FR) and 1,683 (38.2%FR). Any share price pullbacks on Gamuda back to crucial support from the 21/11/17 low (RM4.58) will be attractive to bargain for oversold rebound towards the 76.4%FR (RM4.80), with next resistance coming from the 61.8%FR (RM4.94). Similarly, any share price retracement on Gadang to the 23.6%FR (RM1.00) should be cushioned by bargain hunters ahead of recovery towards the 50%FR (RM1.13), with tougher hurdle seen at the 61.8%FR (RM1.18) ahead. News Bites Top 10 KLCI Movers Based on Mkt Cap. (RM) @ @ @ @ @ @ @ @ @ @ @ @ @ @ @ @ @ @ @ @ % chg 1,718.33 12,346.73 16,497.41 1,710.50 Off Market SEM 63.1 MAYBANK 44.2 BIMB 37.1 MAXWELL 10.0 APPASIA 7.5 EKOVEST 7.0 GBH 5.0 TENAGA 5.0 G3 4.1 JIANKUN-WA 3.5 MALAKOF 3.1 MAGNI 3.1 JIANKUN 3.0 PASUKGB 2.6 STERPRO 2.5 COMPUGT 2.0 PMETAL 1.5 G3-WA 1.3 AIRASIA 1.0 FGV 1.0 Review & Outlook Value Value/ +/-chg Volume Up Down 31.0 1.91 256 319 3.0 0.19 73 87 -12.6 0.18 46 43 -0.4 0.15 2 3 1.65 1.67 2 2 0.00 0.40 1 0 1.43 380 454 566.2 3.82 Vol. (mn) 13.20 13.33 13.02 4.66 6.92 0.69 2.92 0.88 1.38 0.30 Commodities Futures Palm Oil (RM/mt) 2,562.00 -27.00 Crude Oil ($/Barrel) 55.97 -1.51 Gold ($/tr.oz.) 1,265.60 -2.80 • Malaysia's exports for October 2017 grew 18.9% YoY to RM82.4bn, surpassing the RM80bn mark for the third time in 2017 and beating consensus forecast of 17.3% YoY. • My E.G. Services Bhd has been granted a licence by the government to offer money lending services, which complements its existing business activities. • Ranhill Holdings Bhd's wholly-owned subsidiary SAJ Capital Sdn Bhd has applied to issue sukuk with up to RM650mn in nominal value, which the water supply services provider will be guaranteeing. • GuocoLand Malaysia Berhad invested RM10mn for the development of a new access road that will run through Emerald East and Emerald West in its Emerald Rawang township. • Acoustech Bhd is going to jointly develop shop offices worth an estimated RM71.4mn in gross development value with Yayasan Pelajaran Johor's unit. • HCK Capital Group Bhd is buying a plot of leasehold land in Mukim Sungai Buloh, Selangor for RM80mn from Perbadanan Kemajuan Negeri Selangor. • Halex Holdings Bhd plans to buy Hextar Chemicals Ltd at an indicative price of RM550mn in a bid to eliminate business competition. • After two failed attempts, Malaysia Pacific Corp Bhd will see one of its prime properties, Wisma MPL on Jalan Raja Chulan, Kuala Lumpur, go under the hammer again. • Nexgram Holdings Bhd aborted its plan to jointly develop the Angkasa Icon City mixed commercial project in Cyberjaya, Selangor with Seychelles company China Asian Capital Holding Ltd. • Ajinomoto (Malaysia) Bhd expects its revenue for the full financial year ending March 31, 2018 to be better than FY17's RM419.9mn. • GD Express Carrier Bhd is expecting to see revenue grow at least in the mid-teens for FY18 but margins may continue to face compression as the group plans to double its handling capacity. • Astro Malaysia Holdings Berhad's 9MFY18 core profit of RM566mn (45.6% QoQ, +13.0% YoY) was within ours and consensus expectations at 74.7% of full year forecast. • Scientex Bhd's net profit for 1QFY18 rose 39.1% to RM72.4mn, from RM52.1mn a year earlier, lifted by better sales from both its manufacturing and property development segments. It was within expectations. • Sapura Resources Bhd's 3QFY18 net profit plunged 99.6% to RM412K from RM98.3mn a year ago, in the absence of a one-off gain on disposal of a 49% stake in APIIT Education Group in August last year. • 7-Eleven Malaysia Holdings Bhd announced that Sultan of Johor, Sultan Ibrahim Sultan Iskandar, further increased his stake in the company to 15.52% from 8.44% held in August 2017. • Hiring at private U.S. employers rose by 190,000 in November, more than expected 75,000 jobs. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan, Head of Research MENARA TA ONE, 22 JALAN for TA SECURITIES HOLDINGS BERHAD (14948-M) A PARTICIPATING ORGANISATION OF BURSA MALAYSIA SECURITIES BHD P RAMLEE, 50250 KUALA LUMPUR, MALAYSIA TEL : 603 - 2072 1277. FAX : 603 - 2032 5048 www.ta.com.my
3. Thursday , December 07, 2017 FBMKLCI: 1,718.33 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Daily Brief Market View, News In Brief: Corporate, Economy, and Share Buybacks Chartist: Stephen Soo Tel: +603-2167-9607 stsoo@ta.com.my www.taonline.com.my M a r k e t V i e w Sidelined by Weak Market Undertone The local benchmark dipped Wednesday following profit-taking interest on key banking heavyweights and in sympathy with regional weakness. The KLCI shed 6.51 points to settle at 1,718.33, off an early high of 1,722.95 and low of 1,715.10, as losers beat gainers 454 to 380 on muted trade totaling 1.58bn shares worth RM2.26bn. Resistance Stays at 1,727/1,731 The cautious market undertone, negative breadth and weak regional sentiment should discourage investors to stay sidelined for the near-term. On the index, overhead resistance rests at 1,727 (61.8%FR), followed by the 30-day and 50-day moving averages at 1,731 and 1,740 respectively, then 1,750, next will be 1,754, the 200-day moving average. Crucial retracement supports remains at 1,705 (50%FR) and 1,683 (38.2%FR). Buy on Weakness Gamuda & Gadang Any share price pullbacks on Gamuda back to crucial support from the 21/11/17 low (RM4.58) will be attractive to bargain for oversold rebound towards the 76.4%FR (RM4.80), with next resistance coming from the 61.8%FR (RM4.94). Similarly, any share price retracement on Gadang to the 23.6%FR (RM1.00) should be cushioned by bargain hunters ahead of recovery towards the 50%FR (RM1.13), with tougher hurdle seen at the 61.8%FR (RM1.18) ahead. Mining and Tech Sector Drag Asian Markets Down Asian markets fell sharply across the board on Wednesday as the technology, mining, consumer and industrial sectors led declines. The index took early cues from overnight losses on Wall Street, where the stuttering technology sector had taken a further toll. Base metals were also hit by a combination of the dollar’s rise earlier in the week on U.S. tax reform hopes, jitters over demand in major consumer China and a technical sell-off stemming from a rise in inventories. Markets are also closely tracking the progress made by U.S. lawmakers to pass a bill that will overhaul the American tax system. House and Senate lawmakers are poised to begin working on compromise tax-overhaul legislation, a key step in their drive to send a bill with tax cuts for corporations and individuals to President Donald Trump by the end of the year. Japan’s Nikkei share average fell 2 percent, its biggest percentage drop since late March, with materials and other cyclical shares leading the losses following a tumble in copper prices. The Nikkei 225 dropped 445.34 points, or 1.97 percent, to 22,177.04. Australia's ASX 200 closed down 26.12 points, or 0.44 percent, at 5,945.7 as the materials and energy sectors fell 1.66 percent and 1.57 percent, respectively. Across the Korean Strait, the Kospi slipped 1.42 percent. Meanwhile, China stocks also fell on Wednesday amid rising expectations that central banks will tighten liquidity, pushing interest rates higher. The Shanghai Composite index fell 9.55 points or 0.29 percent at 3,294.13. Dow Little Changed as Energy Weakness Offsets Tech Recovery The S&P 500 fell a tiny bit on Wednesday, as weakness in the energy sector spurred some minor selling that offset a recovery in the technology sector. Energy shares were among the biggest decliners of the day, with the sector falling 1.3 percent after a surprise rise in U.S. Page 1 of 7
4. 7-Dec-17 inventories of refined products suggested demand may be flagging . West Texas Intermediate crude fell 2.9 percent to USD55.93 a barrel. On the upside, shares of Microsoft, Facebook and Google-parent Alphabet rose more than 1 percent as the technology sector recovered from a recent selloff. The group has been struggling recently, and is down 1.8 percent thus far in December. Meanwhile, investors scrutinized Washington as they awaited new details on Congress negotiations to overhaul the U.S. tax code. The GOP-led Congress passed a bill on Saturday that increased the chances of the overhaul. But the Senate's bill is different than another one passed by the House. Now both chambers have to work on and pass a new bill before sending it to the White House. Investors also looked ahead to a potential government shutdown. If Congress fails to craft a deal on government spending by the end of the week, the federal government could close until a deal is struck. The Dow Jones Industrial Average fell 39.73 points, or 0.16 percent, to 24,140.91 the S&P 500 eased 0.30 point, or 0.01 percent, to 2,629.27 and the Nasdaq Composite gained 14.16 points, or 0.21 percent, to 6,776.38. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, December 07, 2017, the chartist, Stephen Soo, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 2 of 7
5. 7-Dec-17 N e w s I n B r i e f Corporate After two failed attempts , Malaysia Pacific Corp Bhd will see one of its prime properties, Wisma MPL on Jalan Raja Chulan here, go under the hammer again. It said the second auction obtained by creditors RHB Bank Bhd on July 10 was called off as there was no bidder. (Source: Bursa Malaysia) My E.G. Services Bhd has been granted a licence by the government to offer money lending services, which complements its existing business activities. Its sub-subsidiary MY E.G. Credit Sdn Bhd received a letter from the Ministry of Urban Wellbeing, Housing and Local Government, granting it a moneylender’s licence valid for two years. (Source: Bursa Malaysia) Ranhill Holdings Bhd’s wholly-owned subsidiary SAJ Capital Sdn Bhd has applied to issue sukuk with up to RM650mn in nominal value, which the water supply services provider will be guaranteeing. The proceeds from the sukuk will be used by the issuer, partly to finance the redemption of RM800mn Islamic medium-term notes by Ranhill Captial Sdn Bhd, another Ranhill wholly-owned subsidiary. (Source: Bursa Malaysia) GuocoLand Malaysia Berhad invested RM10mn for the development of a new access road that will run through Emerald East and Emerald West in its Emerald Rawang township. The road comprises of a dual carriageway made up of two lanes in each direction and a roundabout which will reduce the travelling time from Emerald Rawang to the main Jalan Batu Arang and Rawang toll plaza. (Source: The Edge) Acoustech Bhd is going to jointly develop shop offices worth an estimated RM71.4mn in gross development value with Yayasan Pelajaran Johor’s unit. YPJ is a statutory body established under the Johore Education Foundation Enactment 1982. (Source: Bursa Malaysia) HCK Capital Group Bhd is buying a plot of leasehold land in Mukim Sungai Buloh, Selangor, which has been earmarked for a mixed commercial development, for RM80mn from Perbadanan Kemajuan Negeri Selangor. (Source: Bursa Malaysia) Halex Holdings Bhd plans to buy Hextar Chemicals Ltd (HCL) at an indicative price of RM550mn in a bid to eliminate business competition. The acquisition will also allow the company and its subsidiaries to expand its agrochemical business by tapping into HCL’s customer and supplier network in more than 30 countries worldwide. (Source: Bursa Malaysia) Nexgram Holdings Bhd aborted its plan to jointly develop the Angkasa Icon City mixed commercial project in Cyberjaya, Selangor with Seychelles company China Asian Capital Holding Ltd. It agreed to discontinue the joint development agreement signed on May 19 after a few subsequent discussions. (Source: Bursa Malaysia) Ajinomoto (Malaysia) Bhd expects its revenue for the full financial year ending March 31, 2018 to be better than FY17. It is confident of continuing to do well in the second half of FY18, beating full-year FY17's revenue of RM419.9mn. (Source: The Edge) GD Express Carrier Bhd is expecting to see revenue grow at least in the mid-teens for FY18. However, margins may continue to face compression as the group plans to invest in doubling its handling capacity to about 200,000 parcels a day, within the next two to three years. (Source: The Edge) Astro Malaysia Holdings Bhd’s 3QFY18 net profit dipped 2.86% to RM146.7mn, from RM151mn a year earlier, due to lower margin on earnings before interest, tax, depreciation and amortisation. Meanwhile, 9MFY18 net profit rose 23.0% to RM588.8mn, from RM478.6mn. (Source: Bursa Malaysia) Page 3 of 7
6. 7-Dec-17 Sapura Resources Bhd 's 3QFY18 net profit plunged 99.6% to RM412K from RM98.3mn a year ago, in the absence of a one-off gain on disposal of a 49% stake in APIIT Education Group in August last year. For 9MFY18, the group slipped into a net loss of RM1.4mn compared with a net profit of RM102.7mn (Source: Bursa Malaysia) Scientex Bhd’s net profit for 1QFY18 rose 39.1% to RM72.4mn, from RM52.1mn a year earlier, lifted by better sales from both its manufacturing and property development segments. It declared a final dividend of 10 sen to be paid on January 26 next year. (Source: Bursa Malaysia) 7-Eleven Malaysia Holdings Bhd announced that Sultan of Johor, Sultan Ibrahim Sultan Iskandar, further increased his stake in the company to 15.52% representing a total of 172.37mn shares from 8.44% held in August 2017. (Source: Bernama) Page 4 of 7
7. 7-Dec-17 N e w s I n B r i e f Economy Asia October Exports Up Nearly 19 % to RM82.41bn, Exceed Forecast Malaysian exports in October rose 18.9% to RM82.41bil, exceeding a Bloomberg forecast of a 17% increase, underpinned by a higher exports of electrical and electronic (E&E) products and petroleum products. Exports had exceeded the RM80bil mark for the third time in 2017. Imports rose by 20.9% to RM71.85bil, exceeding the forecast of a 20% increase. Trade surplus widened to RM10.56bil, the highest value since April 2016, making it the 240th consecutive month of trade surplus since November 1997. On a month-on-month basis, total trade, exports and imports expanded by 4.3%, 5.3% and 3.2%, respectively. Total trade for the first 10 months of 2017 amounted to RM1.465 trillion, expanding by 21.5% from the previous corresponding period. Exports totalled RM772.66bil, an increase of 21.1% while imports stood at RM692.51bil, rose by 21.9%. Malaysia recorded a trade surplus of RM80.15bil, up 14.4% from a year ago. Manufactured goods recorded a 19.5% in October 2017 or RM11.11bil to RM68.07bil, accounting for 82.6% of Malaysia’s total exports. (The Star) Bank Negara Cautions About Fake Money Lending Licences Bank Negara Malaysia has cautioned the public about a scam using fake money lending licences to carry out their illegal activities. Bank Negara said these persons or companies were carrying out illegal money lending activities using licences purportedly issued by the central bank. “These fraudsters aim to deceive the public to believe that they are licensed money lenders and to lure the public to make initial payments for various purposes related to the loan such as administrative expenses, stamp duty and legal fees. “These fraudulent activities are promoted through the website, social media, telephone calls, SMS, emails or other forms of communication,” it said. Bank Negara does not issue money lending licences. Money lending business is governed under the Moneylenders Act 1951 and administered by the Ministry of Urban Wellbeing, Housing and Local Government. (The Star) Australia GDP Climbs 0.6% on Quarter in Q3 Australia's gross domestic product expanded a seasonally adjusted 0.6% on quarter in the third quarter of 2017, the Australian Bureau of Statistics said. That missed expectations for an increase of 0.7% following the 0.8% gain in the three months prior. On a yearly basis, GDP jumped 2.8% - again missing forecasts for 3.0% but up from 1.8% in the previous three months. Compensation of employees increased 1.2%, while positive growth was noted in 17 of 20 industries. New engineering construction increased 6.3%, while household final consumption expenditure gained 0.1% for the quarter. Increased activity in both private business investment and public infrastructure underpinned broad growth across the industries. Compensation of employees increased in all states and territories, resulting in a national quarterly growth of 1.2% and yearly growth of 3.0%. Despite higher household income, household consumption was weak at 0.1%, in line with the retail trade estimates. This weak household spending combined with growth in household income resulted in an increase in the household saving ratio for the first time in five quarters. (RTT News) Moody's Affirms Japan's Sovereign Ratings Moody's Investors Service retained the sovereign ratings of Japan. The credit rating was kept unchanged at 'A1' with 'stable' outlook. The affirmation reflects the strengthened prospects of a broadly stable debt burden over the next few years and further improvements in debt affordability, helped by somewhat higher GDP growth at present, Moody's said. The agency expects the debt burden to remain broadly stable in the next few years, albeit at very high levels. Although stimulus package announced in 2016 is set to widen the deficit in fiscal 2016 and fiscal 2017, the general government debt burden is likely to stabilize in the next few years at around 220% of GDP. Moody's forecasts real GDP growth at 1.5% in 2017 and 1.1% in 2018. That is above Japan's long-term potential and Moody's expects growth to fall thereafter to under 1%. Over the long term, Moody's said the ability of the government to Page 5 of 7
8. 7-Dec-17 continue to refinance its extraordinarily high debt burden at affordable costs will determine Japan 's credit profile. (RTT News) United States ADP: U.S. Private Sector Adds 190,000 Jobs in November Hiring at private U.S. employers rose more than expected, according to a recent report, showing that the economy continues to grow. Firms across the country added 190,000 workers to their ranks in November, according to payroll processor Automatic Data Processing Inc. and forecasting firm Moody’s Analytics. Economists surveyed by The Wall Street Journal had expected the addition of 175,000 jobs. The ADP report is based on private-payroll data in addition to government data. The job market is red hot, with broadbased job gains across industries and company sizes. The only soft spots are in industries being disrupted by technology. Growth was driven by midsize companies, but small and large companies also showed growth. The October total wasn’t revised. The ADP report comes ahead of the monthly jobs report from the U.S. Bureau of Labor Statistics on Friday. The BLS report is expected to show gains in employment. Economists expect nonfarm jobs to rise by 195,000 for November. In the meantime, U.S. worker productivity rebounded in the third quarter while hourly wages rose moderately, further signs the economy is strengthening. Productivity—a measure of goods and services produced in the U.S. per hour worked—rose at a 3% annual rate in July through September, the Labor Department, the biggest jump in three years. The estimate, the agency’s second, reaffirmed its initial take on third-quarter productivity, released last month. Hourly compensation for workers climbed at a 2.7% rate in the third quarter, up from a meager 0.3% increase in the second. (Reuters) Europe and Uni ted Kingdom German Factory Orders Log Unexpected Growth Germany's factory orders increased unexpectedly in October helped by demand from domestic market and non-euro area economies. New orders in manufacturing climbed 0.5% month-on-month in October, but slower than the revised 1.2% rise in September, figures from Destatis revealed. Orders were forecast to fall 0.2%. For the third time in a row, order activity exceeded its high level reached in November 2007 before the onset of the economic and financial crisis, Destatis said. However, excluding large orders, new orders dropped 1% in October from the previous month. Manufacturing turnover dropped 2.1% month-onmonth in October, bigger than September's 1.2% fall. Domestic and foreign orders rose 0.4% and 0.5%, respectively. Incoming orders from the Eurozone declined 1.2%, while new orders from the rest of the world increased 1.6%. On a yearly basis, factory order growth eased to 6.9% in October from 9.7% in September. Economists had forecast 7% expansion. Separately, Germany's construction activity expanded at the weakest pace in ten months in November, survey data from IHS Markit showed. The headline Purchasing Managers' Index dropped to 53.1 in November from 53.3 in October. However, any reading above 50 indicates expansion in the sector. Among sectors, both housing and commercial construction activity registered solid increases in November. At the same time, civil engineering activity declined for the first time in a year, dropping at the sharpest rate since August 2015 and weighing on overall industry performance. New orders received by constructors dropped for the first time in 12 months, though slightly. (RTT News) Page 6 of 7
9. 7-Dec-17 Share Buy-Back : 06 December 2017 Company APEX FFHB GLOMAC GRANFLO HEVEA JCBNEXT KSENG LEESK LIENHOE LSTEEL MALAKOF NYLEX PECCA SUNWAY UNIMECH Bought Back Price (RM) Hi/Lo (RM) 1,000 11,700 74,700 10,000 50,000 9,000 10,000 150,000 375,500 200,000 100,000 297,100 20,000 1,502,000 203,000 1.49 0.605/0.585 0.60/0.59 0.23 1.17 1.74/1.73 4.59 0.32 0.35/0.345 0.49/0.475 0.90 0.80/0.79 1.49/1.47 1.61/1.60 1.02/1.00 1.50/1.45 0.605/0.56 0.60/0.59 0.23 1.22/1.16 1.74/1.72 4.62/4.59 0.32 0.35/0.345 0.495/0.465 0.915/0.89 0.80/0.79 1.51/1.47 1.62/1.59 1.02/0.995 Total Treasury Shares 10,923,118 1,348,600 4,983,000 7,697,000 882,000 271,300 2,133,500 812,400 17,311,200 2,652,800 210,000 4,661,824 3,043,600 20,408,362 5,838,510 Source: Bursa Malaysia Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 7 of 7
10. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) BETA EPS (sen) PER (X) Div Yield (%) FY17 FY18 FY17 FY18 FY17 52weeks 52weeks % Chg FY18 High Price % Chg Low Price % Chg YTD 06-Dec-17 AUTOMOBILE BAUTO 2.07 2.50 0.76 10.2 14.3 20.3 14.5 5.6 5.6 2.20 -5.9 1.84 12.5 MBMR 2.20 2.32 0.92 20.7 23.2 10.6 9.5 1.9 2.1 2.60 -15.4 2.01 9.5 -2.8 2.8 PECCA 1.48 1.68 na 7.7 11.1 19.1 13.4 3.4 3.7 1.70 -12.9 1.28 15.6 -6.9 SIME 2.20 1.98 1.45 11.8 12.0 18.7 18.4 10.5 1.4 2.55 -13.7 1.83 20.1 19.0 UMW 5.02 4.20 1.36 -0.4 19.2 na 26.1 0.0 2.0 6.08 -17.4 4.09 22.6 18.9 BANKS & FINANCIAL SERVICES ABMB 3.83 4.20 1.41 33.1 30.6 11.6 12.5 4.2 4.2 4.49 -14.7 3.62 5.8 3.0 AFFIN 2.34 2.50 0.92 23.5 24.2 10.0 9.7 3.4 3.4 3.00 -22.0 2.24 4.5 -2.1 AMBANK 4.11 5.10 1.18 43.9 48.6 9.4 8.5 4.3 4.4 5.70 -27.9 4.06 1.2 -4.6 CIMB 5.97 7.00 1.52 48.7 50.9 12.3 11.7 4.2 4.3 7.08 -15.7 4.49 33.0 32.4 HLBANK 16.18 17.50 0.62 104.9 114.2 15.4 14.2 2.8 2.8 17.00 -4.8 13.02 24.3 19.9 MAYBANK 9.26 9.70 0.97 68.4 70.9 13.5 13.1 5.4 5.4 9.86 -6.1 7.68 20.6 12.9 PBBANK 20.02 23.60 0.60 137.2 142.4 14.6 14.1 2.8 2.9 20.90 -4.2 19.50 2.7 1.5 RHBBANK 4.80 5.20 1.56 50.6 52.2 9.5 9.2 3.1 3.1 5.59 -14.1 4.62 3.9 1.9 BURSA 9.57 11.10 0.78 40.2 39.0 23.8 24.6 3.6 3.6 10.98 -12.8 8.08 18.4 9.7 GADANG 1.09 1.75 0.61 15.2 14.3 7.2 7.6 2.8 2.8 1.37 -20.4 0.89 23.2 3.8 GAMUDA 4.70 6.00 0.94 27.8 34.5 16.9 13.6 2.6 2.6 5.52 -14.9 4.58 2.6 -1.7 CONSTRUCTION IJM 2.95 2.89 0.84 15.3 13.7 19.3 21.5 2.5 3.2 3.61 -18.3 2.85 3.5 -7.8 PESONA 0.45 0.55 0.95 3.5 5.8 12.9 7.8 3.3 3.3 0.74 -38.8 0.45 1.1 -25.6 51.3 SENDAI 0.87 0.58 1.28 8.2 9.6 10.6 9.1 1.1 1.1 1.39 -37.4 0.51 72.3 SUNCON 2.34 2.65 na 11.3 14.7 20.7 15.9 2.4 2.4 2.44 -4.1 1.61 45.3 37.6 WCT 1.51 1.61 1.03 11.5 12.5 13.1 12.1 2.0 2.0 2.48 -39.0 1.49 1.3 -12.2 LITRAK 5.68 6.26 0.31 41.9 45.6 13.6 12.4 4.4 4.4 6.15 -7.6 5.61 1.2 -3.4 ANNJOO 3.66 4.40 1.31 41.2 45.3 8.9 8.1 4.4 6.0 3.98 -8.0 1.99 83.9 68.7 CHINHIN 1.17 1.36 na 5.7 9.7 20.5 12.0 2.6 4.3 1.49 -21.5 0.85 37.6 34.5 CARLSBG 15.06 18.06 0.73 79.3 86.2 19.0 17.5 5.2 5.7 16.00 -5.9 13.72 9.8 8.2 HEIM 18.10 19.14 0.44 79.6 84.0 22.7 21.6 4.0 4.2 19.58 -7.6 15.78 14.7 10.5 AEON 1.85 1.97 0.47 4.7 6.7 39.2 27.7 1.9 2.2 2.70 -31.5 1.77 4.5 -28.0 AMWAY 7.17 8.18 0.36 35.7 43.9 20.1 16.3 4.2 5.3 8.18 -12.3 7.04 1.8 -2.2 F&N 25.72 27.41 0.18 102.6 155.7 25.1 16.5 2.2 2.3 26.00 -1.1 22.50 14.3 9.5 HUPSENG 1.13 1.25 0.43 5.2 5.4 21.9 20.8 4.0 4.0 1.28 -11.7 1.08 4.6 -1.8 Building Materials CONSUMER Brewery Retail JOHOTIN 1.19 1.48 0.64 9.7 12.5 12.2 9.5 3.8 4.2 1.76 -32.4 1.15 3.5 -4.0 NESTLE 97.70 120.50 0.39 292.7 325.4 33.4 30.0 2.8 3.0 99.78 -2.1 74.12 31.8 24.9 101.2 PADINI 5.11 4.67 0.63 23.5 27.0 21.8 19.0 2.3 2.4 5.49 -6.9 2.26 126.1 POHUAT 1.75 2.50 0.77 26.8 26.8 6.5 6.5 3.4 4.6 2.08 -15.9 1.58 10.8 1.2 QL 4.31 3.26 0.28 12.1 12.8 35.7 33.6 1.0 1.0 4.31 0.0 3.26 32.4 29.4 SIGN 0.77 0.92 1.07 6.7 6.9 11.4 11.1 3.2 3.2 1.07 -28.0 0.77 0.7 -3.1 37.92 52.08 1.31 198.6 187.4 19.1 20.2 5.3 5.3 51.04 -25.7 35.78 6.0 -14.2 GENTING 8.80 11.53 1.51 48.7 54.4 18.1 16.2 1.6 1.8 10.00 -12.0 7.67 14.8 10.8 GENM 5.16 6.51 1.53 18.7 27.0 27.5 19.1 1.6 1.7 6.38 -19.1 4.47 15.5 14.2 BJTOTO 2.25 3.34 0.80 18.3 21.5 12.3 10.5 6.2 7.1 3.12 -27.9 2.25 0.0 -24.0 LUSTER 0.11 0.15 2.06 0.4 0.4 30.3 30.5 0.0 0.0 0.16 -31.3 0.05 120.0 120.0 Tobacco BAT GAMING Casino NFO HEALTHCARE Hospitals/ Pharmaceutical CCMDBIO 2.41 2.70 0.61 14.0 15.0 17.2 16.0 3.9 4.1 2.43 -0.8 1.90 26.8 21.7 IHH 5.60 6.40 0.73 6.7 11.9 83.2 47.1 0.5 0.5 6.45 -13.2 5.42 3.3 -11.8 KPJ 0.91 1.09 0.39 3.2 3.6 28.3 25.6 2.0 2.2 1.14 -20.2 0.91 0.6 -12.9 HARTA 9.08 6.87 0.77 19.4 24.5 46.8 37.0 0.9 1.2 9.80 -7.3 4.53 100.4 88.0 KOSSAN 7.45 8.80 0.13 29.1 38.3 25.6 19.5 1.9 2.6 8.31 -10.3 5.62 32.6 13.1 SUPERMX 1.82 1.80 0.30 10.2 15.3 17.8 11.9 1.7 2.9 2.18 -16.5 1.69 7.7 -13.7 TOPGLOV 6.46 6.30 -0.11 26.4 29.4 24.5 22.0 2.2 2.3 7.05 -8.4 4.56 41.7 20.7 KAREX 1.30 1.00 0.35 2.8 2.8 46.6 47.0 1.5 0.5 2.52 -48.4 1.30 0.0 -44.9 SCIENTX 8.58 9.38 0.44 52.3 64.9 16.4 13.2 1.9 2.1 9.85 -12.9 6.67 28.6 28.1 SKPRES 2.07 2.20 0.39 8.3 10.4 25.0 19.9 2.0 2.5 2.15 -3.7 1.24 66.9 60.5 ASTRO 2.80 3.10 1.29 13.2 14.0 21.2 20.1 4.5 4.6 2.94 -4.8 2.47 13.4 7.7 MEDIA PRIMA 0.63 0.45 0.55 -7.6 -3.8 na na 0.0 0.0 1.28 -50.8 0.62 1.6 -45.2 STAR 1.34 1.25 0.80 5.6 6.7 23.8 19.9 31.3 9.0 2.22 -39.6 1.31 2.3 -31.2 Rubber Gloves INDUSTRIAL MEDIA
11. For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE Company Share Price Target Price (RM) (RM) BETA EPS (sen) FY17 PER (X) Div Yield (%) FY18 FY17 FY18 FY17 52weeks 52weeks % Chg FY18 High Price % Chg Low Price % Chg YTD OIL & GAS DNEX 0.42 0.75 1.19 3.6 4.5 11.5 9.2 2.4 2.4 0.69 -39.9 0.23 84.4 62.7 LCTITAN 4.76 6.66 na 42.8 63.4 11.1 7.5 4.8 5.3 6.53 -27.1 4.14 15.0 -26.8 MHB 0.85 0.78 1.73 -2.0 -0.5 na na 0.0 0.0 1.16 -26.7 0.63 36.0 -7.1 MISC 7.08 6.56 1.07 57.2 46.8 12.4 15.1 4.2 4.2 7.90 -10.4 6.89 2.8 -3.7 PANTECH 0.63 0.69 1.16 4.0 6.1 15.9 10.3 2.9 4.4 0.74 -14.9 0.44 44.8 41.6 PCHEM 7.38 8.05 1.01 52.7 49.8 14.0 14.8 3.1 3.0 7.81 -5.5 6.69 10.3 5.7 SAPNRG 1.21 1.66 2.77 6.6 -0.4 18.3 na 0.8 0.0 2.10 -42.4 1.21 0.0 -25.3 SERBADK 3.11 3.40 na 22.9 25.7 13.6 12.1 2.2 2.5 3.25 -4.3 1.51 106.0 107.3 UMWOG 0.31 0.51 1.67 -1.7 0.4 na 76.7 0.0 0.0 0.92 -66.4 0.27 14.8 -63.7 UZMA 1.44 1.56 1.16 11.6 13.2 12.4 10.9 0.0 0.0 1.98 -27.3 1.28 12.5 -15.3 FGV 1.79 2.01 1.80 2.1 3.7 85.6 48.3 2.8 2.8 2.18 -17.9 1.47 21.8 15.5 IJMPLNT 2.82 2.69 0.29 12.3 9.1 22.9 30.9 2.5 2.8 3.60 -21.7 2.81 0.4 -17.1 IOICORP 4.46 4.14 1.25 17.3 21.0 25.7 21.2 2.1 3.6 4.81 -7.3 4.31 3.5 1.4 KFIMA 1.59 1.89 0.53 19.9 13.3 8.0 12.0 5.7 5.7 1.96 -18.9 1.59 0.0 -6.5 KLK 24.42 26.18 0.77 100.5 120.7 24.3 20.2 2.0 2.5 25.50 -4.2 23.00 6.2 1.8 SIMEPLT 4.87 6.25 na 17.6 21.0 27.7 23.1 2.9 2.9 5.65 -13.8 4.58 6.3 -12.9 UMCCA 6.88 7.52 0.40 37.5 31.8 18.3 21.6 3.3 2.5 7.08 -2.8 5.61 22.6 15.2 GLOMAC 0.60 0.50 0.56 1.4 3.4 41.5 17.7 4.5 4.5 0.75 -19.5 0.59 1.7 -13.7 HUAYANG 0.61 0.69 0.69 17.3 1.8 3.5 33.1 6.6 0.8 1.21 -50.0 0.60 1.7 -46.5 IBRACO 0.88 0.94 na 3.3 10.5 27.0 8.4 2.3 4.5 1.05 -16.2 0.76 16.6 -12.0 IOIPG 1.90 2.13 0.75 18.9 16.5 10.1 11.5 3.2 3.2 2.22 -14.4 1.85 2.8 -2.5 MAHSING 1.48 1.70 1.01 13.8 13.0 10.7 11.3 4.4 4.4 1.64 -9.8 1.38 7.2 3.5 SIMEPROP 1.16 1.65 na 7.0 9.2 16.5 12.6 0.0 1.7 1.32 -12.1 1.04 11.5 -22.7 SNTORIA 0.69 0.86 0.29 6.8 8.3 10.1 8.3 0.0 1.5 1.00 -31.5 0.66 3.8 -14.4 PLANTATIONS PROPERTY Note: SNTORIA proposed bonus issue of warrants & right issue of shares. For more details please refer to 25.09.17 report. SPB 4.80 5.97 0.70 25.6 22.8 13.3 14.9 2.5 2.5 5.19 -7.5 4.32 11.0 8.6 SPSETIA 3.40 4.10 0.84 11.5 12.1 14.0 13.3 4.1 4.1 4.38 -22.4 3.03 12.2 11.5 SUNWAY 1.61 1.75 0.75 13.3 13.2 12.8 12.9 3.1 3.1 1.96 -17.8 1.24 29.5 25.2 SUNREIT 1.65 1.87 0.71 9.2 10.0 17.8 16.5 5.6 6.1 1.81 -8.8 1.64 0.6 -4.1 CMMT 1.42 1.72 0.41 8.1 8.6 17.6 16.5 5.9 6.3 1.72 -17.4 1.40 1.4 -7.2 -35.0 REIT POWER & UTILITIES MALAKOF 0.89 1.16 0.65 6.3 6.0 14.2 14.9 7.9 7.9 1.43 -37.8 0.89 0.0 PETDAG 24.50 22.08 0.55 102.8 105.1 23.8 23.3 3.1 3.2 25.70 -4.7 21.00 16.7 2.9 PETGAS 16.16 19.10 0.94 89.1 98.8 18.1 16.4 4.1 4.3 21.98 -26.5 15.82 2.1 -24.1 TENAGA 15.62 17.38 0.72 131.6 129.9 11.9 12.0 2.9 2.9 15.66 -0.3 13.00 20.2 12.4 YTLPOWR 1.14 1.17 0.74 8.2 9.7 13.9 11.8 4.4 4.4 1.50 -24.0 1.11 2.7 -22.0 TELECOMMUNICATIONS AXIATA 5.37 5.75 1.39 14.3 16.0 37.5 33.6 1.3 1.5 5.47 -1.8 4.24 26.7 13.8 DIGI 4.71 5.20 0.80 19.5 20.0 24.1 23.6 4.1 4.2 5.19 -9.2 4.36 8.0 -2.5 MAXIS 5.91 6.10 0.77 26.0 26.2 22.8 22.5 3.4 3.4 6.60 -10.5 5.48 7.8 -1.2 TM 6.22 7.20 0.63 22.6 23.2 27.5 26.8 3.3 3.4 6.69 -7.0 5.81 7.1 4.5 TECHNOLOGY Semiconductor & Electronics ELSOFT 2.59 2.70 0.56 11.3 15.0 22.9 17.3 3.1 4.1 2.95 -12.2 1.29 101.5 84.5 IRIS 0.15 0.25 1.84 -1.3 0.6 na 26.2 0.0 0.0 0.22 -34.1 0.10 45.0 31.8 INARI 3.06 3.05 0.94 11.2 14.2 27.4 21.6 3.2 3.3 3.37 -9.2 1.61 90.5 84.7 MPI 11.54 15.40 0.41 89.5 105.5 12.9 10.9 2.3 2.8 14.52 -20.5 7.31 57.9 55.7 UNISEM 3.19 3.85 0.96 23.5 27.1 13.6 11.8 3.8 3.8 4.25 -24.9 2.29 39.3 35.2 TRANSPORTATION Airlines AIRASIA 3.17 3.83 1.01 53.1 38.3 6.0 8.3 1.3 1.6 3.59 -11.7 2.16 46.8 38.4 AIRPORT 8.30 8.47 1.28 19.6 19.7 42.4 42.0 1.2 1.2 9.45 -12.2 5.91 40.4 37.0 Freight & Tankers PTRANS 0.28 0.44 na 2.1 2.3 13.6 12.3 2.1 2.5 0.38 -26.7 0.14 98.7 92.5 TNLOGIS 1.32 1.80 1.14 12.0 13.6 11.0 9.7 3.2 3.8 1.83 -28.0 1.29 2.3 -15.3 WPRTS 3.39 4.06 0.89 17.1 16.8 19.8 20.2 3.8 3.7 4.39 -22.8 3.34 1.5 -21.2 SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE Company Share Price Target Price (S$) (S$) Beta EPS (cent) FY17 FY18 PER (X) FY17 FY18 Div Yield (%) FY17 52week 52week % Chg FY18 High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 24.24 23.30 1.26 172.7 189.1 14.0 12.8 2.5 2.5 -3.0 17.2 41.34 39.8 0.0 OCBC 12.13 13.50 1.20 95.5 104.0 12.7 11.7 5.7 6.7 -3.5 8.9 8.84 36.0 0.0 UOB 25.80 26.90 1.07 200.8 215.4 12.8 12.0 2.7 2.7 -3.0 20.1 28.68 26.5 0.0 PLANTATIONS WILMAR 3.08 3.63 0.85 25.6 29.9 12.0 10.3 2.3 2.6 -23.0 3.1 0.65 -14.2 0.0 IFAR 0.38 0.53 0.97 4.9 5.2 7.7 7.2 3.2 3.4 -37.0 0.4 2.74 -28.6 0.0 BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.
12. RESULTS UPDATE Thursday , December 07, 2017 FBMKLCI: 1,718.33 Sector: Media THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Astro Malaysia Holdings Berhad TP: RM3.10 (+10.7%) Last Traded: RM2.80 Content Cost Normalises Paul Yap, CFA BUY Tel: +603-2167 9603 paulyap@ta.com.my Review Astro’s 9MFY18 core profit of RM566mn (-45.6% QoQ, +13.0% YoY) was within ours and consensus expectations at 74.7% of full year forecasts. A third interim dividend of 3.0sen/share (YTD: 9.0sen/share) was declared during the quarter. A fall in profits during the quarter was in line with a normalisation of content costs (+26.6% QoQ). Showing signs of the weak consumer sentiment, Pay TV subscription revenues (-1.9% QoQ) moderated for the third consecutive quarter. Pay TV subscription revenues are expected to be flattish for the coming year, with ARPU likely to settle at existing levels. Despite existing challenges, this should be supported by a higher take up of sports plans for the upcoming 2018 FIFA World Cup. Due to strong Hari Raya spending in the last quarter, adex declined 15.9% QoQ. However, on an YTD basis, it defied market trends owing to market share gains. Home shopping revenues are estimated to come in slightly below RM300mn, of which we have adjusted for in the previous quarter. Separately, it announced that it is entering into a JV with Grup Majalah Karangkraf Sdn Bhd, (GMK) by investing in Karangkraf Digital 360 Sdn Bhd (KK360). Paid in tranches, it will invest RM100mn for a 51% stake in KK360. Meanwhile, GMK will own the remaining 49%, by transferring its 38 IPs to KK360. GMK is a Malay language media publisher, whose titles include Mingguan Wanita, Keluarga, Rasa, Impiana and Pa&Ma. The collaboration is part of the group’s aspiration to become ASEAN’s leading content creator, aggregator and distributor. Impact We now forecast flattish Pay TV subscription revenues for FY18. We also increase our tax rate assumption to 27.0%. We lower our FY18/FY19 earnings by 4.0%/6.0% to RM727.5mn/RM713.3mn. But, we raise our FY20 estimates by 1.4% to RM844.9mn. This is on the back of lower content cost, on assumption of a strengthening ringgit – as it hedges 12 months forward. Outlook We expect 2018 revenue growth (+2.2% YoY) for Astro will be driven by its home shopping business. However, earnings are likely to decline slightly (-2.0% YoY) as we forecast higher content cost from the 2018 FIFA World Cup. We expect content cost to rise to 36% of TV revenues (vs. our forecast of 34% for FY18) next year. The Pay TV market will likely be challenging, due to existing macroeconomic challenges. That said, TV household penetration targets of 90% within the next five years will be supported by growth in NJOI subscribers. There is potential to grow NJOI ARPU, which remains low at RM2, with targets to nurture it to RM8-10 within the next five years. Improving margins, this would largely flow to the bottom line as infrastructure costs are largely fixed. www.taonline.com.my Share Information Bloomberg Code ASTRO MK Stock Code 6399 Listing Main Market 5,213.9 Share Cap (mn) 14,598.9 Market Cap (RMmn) 2.94/2.47 52-wk Hi/Lo (RM) 1,999.1 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) 42.1 1.29 Beta Major Shareholders (%) Pantai Cahaya Bulan Ventures - 20.7 All Asia Media Equities Limited - 19.4 E Asia Broadcast Network Systems - 8.1 EPF - 6.1 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 (4.0) (6.0) 727.5 713.3 757.0 784.0 96.1 91.0 Buy (Maintained) Financial Indicators FY18 5.6 39.2 7.1 10.8 109.5 (0.3) (10.3) FY19 5.2 38.1 7.3 9.9 99.5 (0.3) (10.1) vs. TA vs. Consensus % of FY 74.7 74.7 Within Within Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth ASTRO 0.0 3.7 8.5 5.7 FBM KLCI (1.9) (3.6) (3.8) 5.3 Net gearing (x) CFPS (sen) P/CFPS (x) ROAA (%) ROAE (%) NTA/Share (RM) Price/ NTA (x) Scorecard (12-Mth) Share Price relative to the FBMKLCI Source: Bloomberg Page 1 of 3
13. 7-Dec-17 Valuation We value Astro at a lower TP of RM3 .10/share (from RM3.40/share previously) – based on a DCF valuation with WACC at 7.0% and long term growth rate of 1.0%. We continue to like the group for its good mix of growth and dividends. Stable cash flows from its Pay TV subscription business should support existing dividend yields of 4.6-5.0%. Meanwhile, we continue to see growth outlets from its home shopping business, adex and digital ventures. BUY. Table 1: Earnings Summary (RMmn) FYE Jan Revenue EBITDA Depreciation and amortisation* EBIT Net finance costs JV/Associates EI PBT Taxes MI Net profit Core net profit EPS (sen) EPS Growth (%) PER (x) EV/EBITDA (x) DPS (sen) Div Yield (sen) FY16 5,475.4 1,940.7 (825.8) 1,114.9 (293.8) 8.3 0.0 829.4 (221.4) 7.4 615.3 656.1 12.6 15.7 22.2 9.1 12.0 4.3 FY17 5,612.6 1,816.7 (721.5) 1,095.2 (236.3) 1.8 (15.1) 845.5 (228.5) 6.7 623.7 689.9 13.3 5.1 21.1 9.8 12.5 4.5 FY18F 5,648.8 1,918.3 (680.8) 1,237.4 (234.8) 1.9 0.0 1,004.5 (271.2) (5.7) 727.5 727.5 14.0 5.5 20.0 9.2 13.0 4.6 FY19F 5,774.1 1,847.3 (626.0) 1,221.3 (230.8) 2.0 0.0 992.5 (268.0) (11.2) 713.3 713.3 13.7 (2.0) 20.4 9.6 13.5 4.8 FY20F 5,933.9 1,997.5 (591.8) 1,405.7 (223.7) 2.0 0.0 1,184.0 (319.7) (19.4) 844.9 844.9 16.2 18.5 17.2 8.9 14.0 5.0 *excludes amortisation of film library and programme rights Figure 1 : Forward PE Figure 2 : Forward EV/EBITDA x x 32.0 11.5 30.0 11.0 +1sd: 28.3x 28.0 +1sd: 10.3x 10.5 26.0 Mean: 24.3x 10.0 24.0 Mean: 9.7x 9.5 22.0 -1sd: 20.3x -1sd: 9.1x 9.0 20.0 8.5 18.0 Dec-17 Jun-17 Sep-17 Mar-17 Dec-16 Jun-16 Sep-16 Mar-16 Dec-15 Jun-15 Sep-15 Mar-15 Dec-14 Jun-14 Sep-14 Mar-14 Dec-13 Jun-13 Sep-13 Mar-13 Dec-17 Jun-17 Sep-17 Mar-17 Dec-16 Jun-16 Sep-16 Mar-16 Dec-15 Jun-15 Sep-15 Mar-15 Dec-14 Jun-14 Sep-14 Mar-14 Dec-13 Jun-13 Sep-13 Mar-13 Dec-12 Source: Bloomberg, TA Securities Dec-12 8.0 16.0 Source: Bloomberg, TA Securities Page 2 of 3
14. 7-Dec-17 Table 2 : 9MFY18 Results Analysis (RMmn) FYE Jan Revenue Subscription Others Adex Go Shop EBITDA Depreciation and amortisation EBIT Finance income Finance costs Associates and JV 3QFY17 1,424 1,090 84 188 62 469 2QFY18 1,420 1,063 77 208 70 551 3QFY18 1,397 1,043 106 175 73 418 QoQ (%) (1.6) (1.9) 39.0 (15.9) 4.3 (24.2) YoY (%) (1.9) (4.3) 26.1 (6.9) 17.7 (11.0) 9MFY17 4,215 3,261 229 524 200 1,372 9MFY18 4,143 3,171 239 526 205 1,429 YoY (%) (1.7) (2.7) 4.5 0.4 2.5 4.1 (177) 292 9 (77) (0) (15) 209 (60) 2 151 176 2.9 3.0 59 46 (169) 382 13 (55) (0) 0 339 (94) 1 246 246 4.7 3.0 52 49 (170) 247 24 (65) (0) 0 206 (60) 1 147 134 2.8 3.0 47 60 0.7 (35.2) 86.3 18.3 0.0 n/a (39.3) (36.1) (41.7) (40.5) (45.6) (40.2) 0.0 (9.6) 22.4 (3.9) (15.3) 162.4 (15.4) 300.0 (100.0) (1.3) 0.0 (69.6) (2.9) (23.9) (3.1) 0.0 (20.3) 30.4 (551) 822 76 (227) 3 (15) 658 (184) 5 479 501 9.2 9.0 130 108 (499) 929 58 (171) (1) 0 815 (231) 5 589 566 11.3 9.0 123 163 (9.3) 13.1 (23.9) (24.5) (125.9) (100.0) 23.9 25.9 20.0 23.0 13.0 22.6 0.0 (5.4) 50.9 Profitability ratio EBITDA margin (%) PBT margin (%) Net profit margin (%) Tax rate (%) 32.9 14.7 12.4 28.8 38.8 23.9 17.3 27.7 29.9 14.7 9.6 29.2 (8.9) (9.1) (7.7) 1.4 (3.0) 0.1 (2.8) 0.4 32.6 15.6 11.9 27.9 34.5 19.7 13.7 28.4 1.9 4.1 1.8 0.5 Operating expenditure Content costs Others 471 665 353 690 447 706 26.6 2.3 (5.1) 6.2 1,377 2,028 1,205 2,020 (12.5) (0.4) 5,021 100 469 5,262 101 639 5,334 101 702 72 (0.1) 9.9 313 0.8 49.7 EI PBT Tax MI Net profit Core net profit EPS (sen) DPS (sen) Cash capex Capitalised capex Operational info TV Customer Base ('000) ARPU (RM) Connected boxes ('000) Stock Recommendation Guideline BUY : HOLD : SELL : Not Rated: Total return within the next 12 months exceeds required rate of return by 5%-point. Total return within the next 12 months exceeds required rate of return by between 0-5%-point. Total return is lower than the required rate of return. The company is not under coverage. The report is for information only. Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium. Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. As of Thursday, December 07, 2017, the analyst, Paul Yap Ee Xing, who prepared this report, has interest in the following securities covered in this report: (a) nil Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 3 of 3
15. ECONOMIC UPDATE Thursday , December 07, 2017 FBMKLCI: 1,718.33 THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* Malaysian Economy Good Trade Result in October 2017 Shazma Juliana Abu Bakar Farid Burhanuddin Tel: +603-2167 9608 Tel: +603-2167 9220 shazma@ta.com.my farid@ta.com.my www.taonline.com.my Review Malaysia’s exports for October 2017 saw stronger year-on-year growth of 18.9% to RM82.4bn, surpassing the RM80bn mark for the third time in 2017. This was underpinned by higher demand across products and major trading partners. Total imports were also strong at 20.9% YoY to RM71.9bn during the month, leaving the trade surplus at RM10.6bn (consensus forecast: RM8.6bn), the highest since March 2016. With that total trade in October 2017 valued at RM154.3bn, a 19.8% YoY increase. Comparatively, both exports and imports figures were above consensus estimation of 17.3% YoY and 20.0% YoY, respectively. On a monthly basis, both exports and imports grew by 5.3% and 3.2% respectively. The better-than-expected exports number was mainly due to the strong demand for manufactured goods as well as resource-based commodities. - - - Namely, export for manufacturing goods (82.6% of total exports in October 2017) posted a better growth of 19.6% YoY to RM68.1bn during the month (September 2017: +17.1% YoY). The increase was mainly due to the higher demand for electrical and electronic (E&E) products, which increased by 16.9% YoY to RM31.1bn, albeit slower than 17.7% YoY gain previously. Note that, E&E products contributes about 37.7% of our exports. Apart from E&E products, the gain in exports was also seen in manufacturing of metal, petroleum products, and chemicals & chemical products. (Please refer Figure 2). In the meantime, exports of mining goods (8.1% of total exports) jumped sharply from 8.9% YoY growth in September 2017 to 21.0% YoY gain (RM6.7bn) in October 2017. Moreover, exports growth were also boosted by the rebound in the agriculture sector (8.5% of total exports). Shipments of this goods grew by 6.5% YoY to RM7.0bn. In particularly crude petroleum with 62.9% YoY gain, as compared with 4.8% YoY contraction previously. Increases in these commodity were spurred by improved export volume as well as average selling prices by 40.2% YoY and 16.2% YoY, respectively. This was also supported by higher demand from Singapore, China and Japan. Meanwhile, exports of palm oil rebounded to 9.2% YoY (November 2017: -0.9% YoY), supported by resilient demand from the US. Liquefied natural gas (LNG) registered an export value of RM2.9bn during the month, as compared to October 2016’s trade value of RM2.7bn. Hereby, the exports of LNG rose by 8.9% YoY, following September’s 13.4% YoY gain. This was mainly due to the average unit value which dropped by 1.3% YoY. By destinations, almost all key markets registered double digit export growth in October 2017, including ASEAN, which grew by 19.5% YoY to RM23.9bn. Shipments to Singapore gained by 16.1% YoY to RM11.3bn, as compared to 8.1% YoY previously. This was contributed largely by higher exports of E&E products. In the meantime, exports to China remained resilient as it increased by 20.5% YoY to RM11.5bn during the month. Singapore remained as Malaysia’s number one export market accounting for about 14.6% of total YTD exports (China: 13.4% YTD) (Please refer to figure 3 for the last 6-month performance of other Malaysia top major market). Page 1 of 4
16. 7-Dec-17 As for imports , the growth was also seen across board. - Imports of intermediate goods gained +14.8% YoY to RM38.9bn (September 2017: +13.7% YoY). Note that, these goods constituted 54.1% of total imports and the growth was mainly attributed industrial supplies (+14.8% YoY), parts & accessories of capital goods (except transport equipment) (+10.2% YoY), fuel & lubricants (+92.0% YoY), and industrial supplies (+77.5% YoY). - Imports growth of consumption goods, totalled RM5.9bn, increased by double digit growth of 11.1% YoY as compared with 5.9% YoY growth in September 2017. It also increased by 4.0% on a monthly basis attributed to higher imports food & beverages (+18.5% YoY), non-durables (+10.8% YoY) and semi durables (+9.0% YoY) in view of Deepavali festival in October. - Meanwhile, growth of capital goods, amounted to RM9.2bn edged down to 5.1% YoY in October 2017 (September 2017: +10.4% YoY). By products, the highest imports was the E&E, which valued at RM21.8bn (or 30.3% of total imports). Petroleum, Chemicals and chemical products, Machinery, equipment & parts, Iron and Steel products and Manufactures of metal are among the other major imports. We gathered that China is the top import sources with a total import value of RM13.6bn. Total imports from the ASEAN region increased by 26.1% to RM19.4bn (which is 27% of Malaysia’s total imports for October). Particularly, imports from Singapore rose by 36.5% YoY to RM9.1bn in October 2017. Year-to-date (10M17), total exports had advanced by 21.1% YoY to RM772.6bn vs. the imports growth of 22.9% YoY (RM692.5bn). However, we believe that Malaysia’s trade performance to moderate in the coming months mainly due to the high base impact, as well as stronger Ringgit, which would translate into higher competition for Malaysian products (Average Ringgit in November 2017 was 4.1673 vs 4.3388 in November 2016). As such, we maintain our trade numbers whereby export growth for 2017 is 17.4% YoY and imports 18.0% YoY. As such, balance of trade will continue to register a trade surplus of RM98.6bn for this year. A moderate growth performance of exports and exports is expected in 2018 (our forecast is less than 1.0% YoY), mainly due to base effects. But, it will continue to be led by electrical and electronic (E&E) products and commodities such as crude petroleum and palm oil. With the expected moderation, we would need to do more in our export promotion. Figure 1: Statistical Summary of Malaysia’s Trade Performance Trade Performance 2016 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 10M17 Exports (RMbn) 785.9 79.4 73.1 78.6 82.2 78.3 82.4 772.7 1.1% 32.4% 7.5% 9.9% -8.0% 30.9% 7.6% 21.6% 4.7% 14.8% -4.9% 18.9% 5.3% 21.1% 698.7 73.9 63.2 70.6 72.4 69.7 71.9 692.5 1.9% 30.2% 13.3% 3.7% -14.5% 21.8% 11.7% 22.4% 2.4% 15.2% -3.7% 20.9% 3.2% 21.9% 1,484.6 153.3 136.3 149.2 154.6 147.9 154.3 1,465.2 1.5% 31.3% 10.2% 6.9% -11.1% 26.4% 9.5% 22.0% 3.6% 15.0% -4.3% 19.8% 4.3% 21.5% 87.3 5.5 9.9 8.0 9.9 8.6 10.6 80.2 -4.7% 71.5% -36.3% 77.2% 79.3% 282.8% -18.8% 16.1% 24.5% 11.5% -14.0% 6.9% 22.7% 14.4% YoY % MoM % Imports (RMbn) YoY % MoM % Total Trade (RMbn) YoY % MoM % Trade Balance (RMbn) YoY % MoM % Source: Department of Statistics, TA Securities Page 2 of 4
17. 7-Dec-17 Figure 2 : Malaysia’s Major Exports Products Major Exports Products 2016 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 10M17 Electrical and Electronic (E&E) 3.5% 31.3% 15.1% Palm Oil 5.9% 25.0% 16.5% 28.3% 20.1% 17.7% 16.9% 20.4% 15.0% -12.1% -0.9% 9.2% 13.7% -28.2% 3.8% 97.3% 50.8% 101.8% 8.2% 6.3% 28.6% Chemicals and chemical products 7.0% Optical and scientific equipment 10.2% 21.0% 4.5% 18.0% 15.7% 2.9% 17.5% 15.7% 14.7% -7.0% 23.2% 28.7% 14.5% 20.3% 13.3% Petroleum products -0.1% 88.2% -9.5% 76.0% 33.6% 22.4% 21.4% 28.6% Manufactures of metal -4.3% 12.8% -13.3% 35.1% 24.7% 25.4% 38.0% 12.8% Crude petroleum -14.6% 56.8% -1.0% -2.1% 0.0% -4.9% 62.9% 32.2% Rubber Products 0.3% 50.8% 22.4% 39.9% 28.2% 19.4% 30.6% 33.4% Liquefied natural gas (LNG) Source: Department of Statistics, TA Securities Figure 3: Malaysia’s Major Exports Market Major Exports Market 2016 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 10M17 China Singapore U.S. -2.9% 5.6% 8.9% 51.5% 45.0% 16.3% 27.3% 9.1% 1.8% 28.8% 32.3% 14.4% 21.2% 20.5% 14.5% 27.1% 8.1% 10.7% 20.5% 16.1% 13.8% 33.5% 21.2% 11.7% Japan -12.9% 12.4% 24.3% 25.5% 18.0% 6.9% 20.4% 20.1% EU ASEAN Hong Kong 1.2% 5.4% 2.1% 29.7% 33.9% 32.0% 10.0% 1.9% 10.3% 34.1% 34.0% 28.4% 21.6% 16.5% 22.2% 16.2% 13.0% 41.0% 9.3% 19.6% 54.9% 21.1% 20.2% 21.7% India 1.1% 4.8% 21.3% 33.5% 4.9% -7.0% -5.7% 10.8% Source: Department of Statistics, TA Securities RMbn 90 RMbn Malaysia: International Trade Figure 5: Malaysia’s Exports by Sector YoY % Change 80 YoY % 30% 40.0% 25% 20.0% 20% 70 15% 60 10% 5% 50 60.0% 35% YoY % Figure 4: Malaysia’s Exports Growth 0.0% -20.0% -40.0% 0% -10% -15% Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 30 Source: Department of Statistics, TA Securities -60.0% Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 -5% 40 Manufacturing Agriculture Mining Source: Department of Statistics, TA Securities Page 3 of 4
18. 7-Dec-17 Figure 6 : Malaysia’s Total Imports RMbn RMbn 80 Figure 7: Total Trade Balance YoY % YoY % Change 50% RMbn 14 45% 70 40% 65 35% 60 30% 55 25% 50 20% 6 45 15% 4 40 10% 35 5% 2 30 0% 0 12 10 8 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 75 Source: Department of Statistics, TA Securities Source: Department of Statistics, TA Securities Figure 8: % Share of Exports by Countries (10M17) Figure 9: % Share of Imports by Countries (10M17) 10M17 Vietnam Australia Indonesia India Hong Kong Thailand Japan US EU China Singapore 0.0% 10M17 2.9% 3.4% 3.7% 3.8% 4.9% 5.4% Germany 3.1% India 3.2% ROK 4.5% Indonesia 4.6% Thailand 8.0% 6.0% 8.0% 10.0% 12.0% Source: Department of Statistics, TA Securities 7.6% USA 13.4% 14.6% 4.0% 6.5% Japan 9.6% 10.2% 2.0% 5.8% Taiwan 14.0% 8.5% Singapore 11.0% China 0.0% 16.0% 19.4% 5.0% 10.0% 15.0% 20.0% 25.0% Source: Department of Statistics, TA Securities Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein. Kaladher Govindan – Head of Research TA SECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 2032 5048 www.ta.com.my Page 4 of 4
19. RESULTS UPDATE Thursday , December 07, 2017 FBMKLCI: 1,718.33 Sector: Consumer THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* TP: RM9.38 (+9.4%) Scientex Berhad Last Traded: RM8.58 Double-Digit Top and Bottom-line growth Damia Othman Tel: +603-2167 9602 HOLD damia@ta.com.my Review Scientex Berhad’s (Scientex) 1QFY18 financial results came in within ours and consensus’ full-year estimates at 22% and 21% respectively. Adjusted net earnings increased by 35.5% YoY to RM69.4mn. Manufacturing. 1QFY18 operating profit increased by 46.0% YoY to RM34.7mn in line with revenue increase of 23.6% YoY to RM469.1mn. This was attributable to i) increase in export sales by about 31%, ii) demand increase for various range of packaging products post substantial completion of capacity expansion. QoQ, the operating profit increased by 83.9% due to increase in operating profit margin by 3.1p.pts QoQ to 7.4% as well as resilient revenue growth of 7.8%, which we attribute to higher demand for packaging products after capacity expansion. Property. 1QFY18 operating profit increased by 29.9% YoY to RM58.6mn due to increase in revenue of 22.3% YoY to RM189.6mn, attributable to i) stronger progress billing from all development projects especially Taman Pulai Mutiara and ii) good take up rates for Taman Pulai Mutiara and Taman Mutiara Mas projects. The operating profit declined by 12.2% QoQ as revenue reduced by 10.1% QoQ. We believe this is due to less project launched in the current quarter (Taman Pulai Mutiara and Taman Mutiara Mas) as compared to six projects (Ipoh and Johor area) in the previous quarter. www.taonline.com.my Share Information Bloomberg Code Stock Code Listing Share Cap (mn) Market Cap (RMmn) Par value (RM) 52-wk Hi/Lo (RM) 12-mth Avg Daily Vol ('000 shrs) Estimated Free Float (%) Beta Major Shareholders (%) Scientex Holdings Sdn Bhd Scientex Leasing Sdn Bhd Lim Teck Meng Sdn Bhd TM Lim Sdn Bhd SCI MK 4731 Main Market 483.7 4,150.1 0.5 9.85/6.67 270.0 39.3632417 0.44 20.82 9.63 7.8 5.04 Forecast Revision Forecast Revision (%) Net profit (RMmn) Consensus TA's / Consensus (%) Previous Rating FY18 FY19 4.1 2.0 321.7 335.9 328.3 353.7 98.0 95.0 Hold (Maintained) Financial Indicators FY18 29.2 17.5 10.9 3.8 2.3 FY19 25.8 16.1 10.4 4.3 2.0 vs. TA vs. Consensus % of FY18 22 21 Within Within Share Performance (%) Price Change 1 mth 3 mth 6 mth 12 mth SCIENTEX (4.1) (5.2) 3.4 28.3 FBM KLCI (1.9) (3.6) (3.8) 5.3 Net debt/ equity (%) ROE (%) ROA (%) NTA/Share (RM) Price/ NTA (x) No dividend was declared during the quarter under review. Scorecard Impact We increase our earnings forecast slightly by 4.1% and 2.0% for FY18 and FY19 respectively after imputing audited FY17 financial results in our model. Outlook To recap, Scientex’s polyethylene (PE) film plants are expected to reach a total capacity of 84,000 tonnes/annum by end of 2017. Scientex is also expected to commission a new stretch film manufacturing facility in Arizona, USA by 1Q18 with total capacity of 24,000 tonnes/annum capacity. The plant will be able to support the American market due to it close proximity to customers and raw materials. (12-Mth) Share Price relative to the FBMKLCI On the property end, Scientex will continue to focus on affordable housing development with upcoming projects from the Melaka Durian Tunggal (194.7 acres) land and the newly-acquired land in Rawang (65.3 acres) with total estimated GDV of close to RM1.0bn. Source: Bloomberg Page 1 of 3
20. 7-Dec-17 Valuation We maintain our HOLD call on Scientex with unchanged target price of RM9 .38/share based on SOP valuation. Table 1: Sum-of-part valuation Sum-of-Parts Manufacturing Property PAT (RMmn) FY18 FY19 160.8 168.0 160.8 168.0 CY18 163.8 163.8 Target PER (x) 20 8 Segment Value (RMmn) 3,333.2 1,310.4 Equity value (RMmn) Share cap (mn) Target Price (RM) Comment 20% premium to peer's PE average In-line with small-cap property players 4,537.5 483.7 9.38 Table 2: Quarterly Results Analysis FYE July (RM'mn) Revenue ~ Manufacturing ~ Property Operating Profit ~ Manufacturing* ~ Property* Interest Expense Interest Income Extra-ordinary Items Reported PBT Adj. PBT Taxation MI Reported Profit Adj. Net Profit EPS (sen) Adj EPS (sen) DPS (sen) EBIT Margin (%) ~ Manufacturing ~ Property PBT Margin (%) Net Margin (%) Tax rate (%) 1QFY17 534.7 379.7 155.0 68.8 23.8 45.1 (3.5) 1.0 (0.1) 66.4 66.5 (13.4) (0.9) 52.1 51.3 11.3 11.1 0.0 4QFY17 646.1 435.3 210.8 85.5 18.8 66.7 (3.2) 1.9 3.4 84.3 80.9 (11.1) (1.1) 72.1 67.6 15.0 14.1 10.0 1QFY18 658.7 469.1 189.6 93.2 34.7 58.6 (2.3) 1.7 3.0 92.6 89.6 (19.2) (1.0) 73.4 69.4 15.0 14.2 0.0 12.9 6.3 29.1 12.4 9.6 20.2 13.2 4.3 31.6 12.5 10.5 13.1 14.2 7.4 30.9 13.6 10.5 20.7 QoQ (%) 2.0 7.8 (10.1) 9.0 83.9 (12.2) (25.9) (13.9) (13.7) 9.8 10.8 73.2 (8.6) 1.8 2.7 (0.3) 0.6 nm %-pts 0.9 3.1 (0.7) 1.1 0.1 7.6 YoY (%) 23.2 23.6 22.3 35.5 46.0 29.9 (32.7) 59.0 nm 39.4 34.7 42.8 6.8 41.0 35.5 32.2 27.1 nm %-pts 1.3 1.1 1.8 1.2 1.0 0.5 Earnings Summary FYE 31 July (RMmn) Revenue Gross Profit EBITDA EBIT Reported PBT Adj. PBT Reported Net Profit Adj. Net profit Basic/Diluted EPS Adj. EPS PER Net Dividend Dividend Yield (sen) (sen) (x) (sen) (%) 2016 2,201.0 440.2 367.1 312.6 306.3 322.3 240.9 230.6 106.0 47.7 8.1 16.1 1.9 2017 2,403.2 493.2 388.3 325.1 318.0 325.2 255.9 252.8 54.8 52.3 15.7 16.0 1.9 2018F 2,791.9 589.9 510.8 426.3 393.5 393.5 321.7 321.7 66.5 66.5 12.9 18.0 2.1 2019F 3,030.1 614.7 531.8 444.2 410.9 410.9 335.9 335.9 69.5 69.5 12.4 19.0 2.2 2020F 3,342.8 714.7 627.6 537.1 503.3 503.3 411.5 411.5 85.1 85.1 10.1 20.0 2.3 Page 2 of 3