Malaysia Market Insight - 28 April

Transcription

1. Market Insight Friday , 28 April, 2017 Research Team research@bimbsec.com.my 03-2613 1739 PP16795/03/2013(031743) www.bisonline.com Reports Published Results Review: Maxis 1QFY17 (Above): Consistent ARPU Results Review: Tenaga Nasional 2QFY17 (Inline): Moderating demand growth Results Review: Westport 1QFY17 (Inline): Lower earning registered Results Review: Dutch Lady 1QFY17 (Below): Higher cost impeding earnings Corporate News Economic News          Dutch Lady's profit hit by higher material costs CIMB Niaga’s 1Q net profit up 138% Malaysia Marine continues to be in the red in 1Q RHB Islamic Bank issues RM250m sukuk Engtex secures RM60m contracts in 1Q, tenders RM300m jobs Scientex plans to raise RM361.6m to expand manufacturing business, develop properties   KLCI Performance Close Change +/- Change % 1,767.92 -1.00 -0.06 FBMEMAS 12,613.49 3.12 0.02 FBM100 12,244.36 3.73 0.03 1720 FBMEMAS Shariah 12,970.19 20.59 0.16 1670 FBM Hijrah Shariah 14,213.41 26.81 0.19 Volume (m) 3,449.86 -104.47 -2.94 1620 Value (MYR m) 2,768.59 -362.74 -11.58 1570 Apr-17 Mar-17 Feb-17 Jan-17 Dec-16 Nov-16 Oct-16 Sep-16 Aug-16 7.69 Jul-16 1770 Jun-16 FBMKLCI YTD performance 1820 Apr-16 FBMKLCI May-16 Bursa Malaysia Malaysia's economy faces more headwinds to stay resilient Trump says ‘will renegotiate’ Nafta deal with Canada, Mexico Japan's core consumer prices up 0.2% in March, miss expected 0.3% gain Bank of Japan raises economic forecasts, while keeping policy steady New Zealand plans spending splurge to keep 'growing like Sydney'simulation on exit strategy from stimulus KLCI Year-End Target: 1,800 points Source: Bloomberg, BIMB Securities Research Source: Bloomberg, BIMB Securities Research Regional Indices Commodities (Last Close) Close DJIA Change +/- Change % YTD Change (%) Close Change +/- Change % -0.73 20,981.33 6.24 0.03 6.17 Brent Crude (USD/bbl) 51.44 -0.38 NASDAQ 6,048.94 23.71 0.39 12.37 WTI Crude (USD/bbl) 48.97 0.18 0.37 S&P 500 2,388.77 1.32 0.06 6.70 CPO (RM/MT) 2,506.00 -8.00 -0.32 FTSE 100 7,237.17 -51.55 -0.71 1.32 Gold (USD/ounce) 1,264.16 -0.16 -0.01 Nikkei 225 19,251.87 -37.56 -0.19 0.72 Latex (sen/kg) 599.00 -3.00 -0.50 HSI 24,698.48 120.05 0.49 12.26 31.96 -0.20 -0.62 SHCOMP 3,152.19 11.34 0.36 1.56 KOSPI 2,209.46 1.62 0.07 9.03 Forex TWSE 9,860.62 4.17 0.04 6.56 (per USD) BIMB (YE Forecast) Close Change +/- Change % STI 3,171.36 -2.40 -0.08 10.09 MYR 4.20 4.35 -0.0247 -0.57 JCI 5,707.03 -19.50 -0.34 7.75 JPY 110.0 111.26 0.2000 0.18 SET 1,566.77 -0.70 -0.04 1.54 EUR 0.93 0.92 0.0026 0.28 PSEi 7,661.01 -65.44 -0.85 11.99 SGD 1.45 1.40 0.0013 0.09 Source: Bloomberg, BIMB Securities Research www.bimbsec.com.my www.bimbsec.com.my Soybean Oil Source: Bloomberg, BIMB Securities Research Source: Bloomberg, BIMB Securities Research 1
2. Market Insight Major Rates Daily Participation % KLIBOR 3-mth KLIBOR 6-mth KLIBOR 12-mth 5-yr MGS 10-yr MGS 3.43 3.54 3.63 3.69 4.07 Local Insti Local Retail Foreign Total Source: Bank Negara Malaysia Participation (%) Bought (MYR m) Sold (MYR m) Net (MYR m) 59.5 20.0 20.5 100.0 1,527.1 540.5 701.1 2,768.7 1,770.1 565.2 433.4 2,768.7 -243.0 -24.7 267.7 0.0 Source: The Sun, BIMB Securities Research Performance of BIMB Stock Coverage Top Gainers GHL Systems Eversendai Xin Hwa FGV WCT Top Losers Close 1.54 0.94 1.26 2.14 2.13 Change +/0.11 0.06 0.07 0.10 0.06 Change % 7.7% 7.4% 5.9% 4.9% 2.9% Source: Bloomberg, BIMB Securities Research www.bimbsec.com.my Scomi Energy IJM Plantations Bintulu Port Uzma Top Glove Close 0.20 3.00 6.30 1.85 4.58 Change +/-0.01 -0.10 -0.20 -0.05 -0.11 Change % -4.9% -3.2% -3.1% -2.6% -2.3% Source: Bloomberg, BIMB Securities Research |2
3. Market Insight CORPORATE NEWS Dutch Lady 's profit hit by higher material costs Dutch Lady’s pre-tax profit slipped to RM42.1m in the 1Q2017, from RM45.79m in the same period last year. The 8% lower pre-tax profit was due to higher material prices as well as investments in advertisement and promotion. The dairy products manufacturer’s revenue, however, rose to RM250.1m from RM249.79m previously. Moving forward, the company foresees the market remaining challenging amid higher material prices and a weak ringgit. Nonetheless, the company will remain focused and committed to leveraging on the strength of the Dutch Lady brand and quality offerings to the Malaysian consumer. (Source: Bernama) CIMB Niaga’s 1Q net profit up 138% CIMB Niaga reported an unaudited consolidated net profit of 640bn rupiah (RM208.9m) in the 1Q2017, which represented a 137.9% yoy growth. The growth also translated into EPS of 25.45 rupiah. The operating income grew 7.3% yoy, while cost was controlled and only rose by 2.8% yoy, considering the soft economic and operating environment. They anticipate a stronger financial performance for 2017 on the back of a gradual economic recovery and improved asset quality. With total assets of 236.86trn rupiah (RM77.3bn) as at March th 31, 2017, representing a 2.2% yoy increase, the company maintained its position as Indonesia’s 5 largest bank by assets. Total gross loans increased 2.9% yoy to 175.98trn rupiah. (Source: Bernama) Malaysia Marine continues to be in the red in 1Q MMHE, which got a major boost this month when Petronas Carigali awarded it a contract valued almost as high as its entire 2016 revenue, continued to struggle in the 1Q2017 with a loss of RM16.61m. The loss was more than double that incurred in the corresponding period of last year (RM7.58m). Revenue, meanwhile, slipped 8% to RM235.84m. MMHE’s bottom line figure has been on a declining trend in the last 4 years, finally sinking into a net loss in the FY16. The MISC Bhd subsidiary, whose ultimate shareholder is Petronas, has struggled over the past 2 years due to the scarcity of new major offshore projects arising from the weak oil and gas sector. It posted a net loss of RM134m in FY16 on the back of a 52% lower revenue of RM1.19bn. In Q1 FY17, MMHE’s operating loss widened to RM15.6m from RM3.5m a year earlier. (Source: StarBiz) RHB Islamic Bank issues RM250m sukuk RHB Islamic Bank Bhd, which is eyeing the top 3 spot in the local Islamic banking industry, has issued RM250m subordinated sukuk st murabahah, its 1 bond issuance in about 3 years. RHB Islamic’s sukuk, rated AA3 by RAM Rating Services Bhd, would mature in 10 years th and could only be redeemed from the 6 year onwards. The sukuk has a fixed profit rate of 4.88% per annum, payable semi-annually in th arrears throughout the entire tenure. RHB Islamic, the 5 largest Islamic bank in the country in terms of assets, last issued sukuk murabahah in May 2014. The RM500m tranche also has a tenure of 10 non-callable 5 years, while the profit rate is 4.95% per annum. The proceeds raised from the sukuk issuance would be used for RHB Islamic’s syariah compliant working capital and general banking purposes. (Source: StarBiz) Engtex secures RM60m contracts in 1Q, tenders RM300m jobs Engtex Group has secured 5 pipe supply contracts worth RM60m in the 1Q2017 and it is also tendering for more than RM300m jobs nationwide. The contracts were to supply mild steel cement-lined (MS) and ductile iron (DI) pipes to various government water and infrastructure projects in Johor, Pahang, Kedah and Selangor. These contracts are estimated to be delivered within 6 to 8 months. The new contracts placed the company on a strong footing for 2017 and raised its orderbook to RM170m as at March 31, 2017. Most of these are set to be recognised in the FY2017. Engtex was also tendering for more than RM300m worth of projects nationwide. These include new pipe supply contracts for residential and infrastructure projects. (Source: StarBiz) Scientex plans to raise RM361.6m to expand manufacturing business, develop properties rd Scientex is planning a private placement of up to 10% of its issued shares to 3 party investors to raise as much as RM361.58m for property development, landbank expansion and as working capital for its manufacturing business. The expected proceeds from the placement, which could involve up to 46.36m shares, is based on an indicative issue price of RM7.80 per placement share. The indicative price represents a discount of approximately 6.81% to the 5-day volume weighted average market price (VWAMP) of Scientex shares up to and including the LPD of RM8.37 per share. Of the proceeds, RM180m will go to existing and future development projects as well as landbank expansion, and RM100m will be for the intended working capital, mainly to buy raw materials, fund business development expenses, and repay trade creditors. (Source: The Edge) www.bimbsec.com.my |3
4. Market Insight ECONOMIC NEWS Malaysia 's economy faces more headwinds to stay resilient “Malaysia’s economy is resilient” is a refrain heard countless times since growth started to slow down from 2015. But that resilience may not hold out as the economy’s competitiveness slide and others in the same neighbourhood produce the same goods at lower cost. The government expects the economy to grow by between 4% and 5% this year. The economy grew 4.2% for the whole of last year, the nd 2 year of slower growth and despite the green shoots seen from better exports, the market expects flat growth at best this year. The less competitive economy will have negative repercussions for government revenue, which has come under pressure in recent years as commodity prices fell and demand for the goods and raw material produced by Malaysian factories, plantations and rigs, slowed down. Should government revenue not grow faster, there could be more pressure on the budget and the ability to service the deficit. (Source: StarBiz) Trump says ‘will renegotiate’ Nafta deal with Canada, Mexico President Donald Trump expressed optimism the US, Canada and Mexico can successfully renegotiate a trade accord he deems unfair to American interests but vowed to scrap the 23-year-old pact if a “fair deal for all” cannot be reached. Trump had planned to terminate Nafta, but decided to hold off after speaking to the leaders of Mexico and Canada to see if deal can be made. Rather than terminating Nafta, which would be a pretty big shock to the system, they will renegotiate. Instead of pursuing a termination order considered by some advisers, Trump told Mexican President and Canadian Prime Minister that the US would seek to quickly begin renegotiating the pact. (Source: Reuters) Japan's core consumer prices up 0.2% in March, miss expected 0.3% gain Japan's core consumer prices rose 0.2% in March from a year earlier. The core consumer price index, which includes oil products but excludes fresh food prices, compared with economists' median estimate for a 0.3% annual gain. Stripping away the effect of fresh food and energy, consumer prices fell 0.1% in March from a year ago. Core consumer prices in Tokyo, available a month before the nationwide data, fell 0.1% in April from a year earlier, versus a 0.2% annual fall seen by analysts in a Reuters poll. (Source: Reuters) Bank of Japan raises economic forecasts, while keeping policy steady The Bank of Japan raised its economic forecasts at its policy meeting outcome, but it kept policy steady, as was widely expected. The BOJ raised its economic assessment. It increased its real GDP growth forecast for the 2017-18 fiscal year to 1.6% from the 1.5% projected in January. But it lowered its core CPI growth forecast to 1.4% from 1.5% in the same period. Marcel Thieliant, a senior Japan economist at Capital Economics note that despite the BOJ raising some growth forecasts, he didn't follow the consensus view that the yield target might be increased by the end of next year. (Source: Reuters) New Zealand plans spending splurge to keep 'growing like Sydney' New Zealand’s government announced plans to substantially increase infrastructure spending to help sustain economic growth and cope with a swelling population. In its May 25 Budget, the government will allocate NZ$11bn(US$7.6bn) in additional spending on infrastructure like schools, roads, hospitals and housing between 2017 and 2020. When added to already-planned investments, a total of around NZ$23bn would be spent over the 4-year period, representing the biggest addition to the government’s capital stock in decades. New Zealand’s economy is among the fastest-growing in the developed world, expanding at around 3% a year, and the government predicts rising budget surpluses. Growth is being driven in part by record immigration and fewer New Zealanders seeking work abroad, which is straining infrastructure. (Source: Bloomberg) www.bimbsec.com.my |4
5. Market Insight ECONOMIC CALENDAR Date Time Country Event Period Survey 04 /28/2017 07:50 04/28/2017 07:50 04/28/2017 13:00 04/28/2017 14:00 04/28/2017 14:00 04/28/2017 14:00 04/28/2017 16:00 04/28/2017 16:00 04/28/2017 16:00 04/28/2017 16:30 04/28/2017 16:30 04/28/2017 18:00 04/28/2017 18:00 04/28/2017 20:30 04/28/2017 20:30 04/28/2017 20:30 04/28/2017 21:45 04/28/2017 04/30/2017 09:00 04/30/2017 09:00 05/01/2017 08:30 05/01/2017 20:30 05/01/2017 20:30 05/01/2017 20:30 05/01/2017 20:30 05/01/2017 21:45 05/01/2017 22:00 05/01/2017 22:00 05/01/2017 22:00 05/01/2017 22:00 05/01/2017 05/10 05/02/2017 08:30 05/02/2017 08:30 05/02/2017 09:45 05/02/2017 16:30 05/02/2017 22:00 05/02/2017 22:00 05/03/2017 15:00 05/03/2017 16:30 05/03/2017 21:45 05/03/2017 21:45 05/03/2017 22:00 05/04/2017 02:00 05/04/2017 02:00 05/04/2017 09:45 05/04/2017 09:45 05/04/2017 16:30 05/04/2017 16:30 05/04/2017 16:30 05/04/2017 16:30 JN JN JN GE GE FI SP EC CZ UK UK PO PO US US US US BP CH CH JN US US US US US US US US US JN JN JN CH UK DE DE HU UK US US US US US CH CH UK UK UK UK Industrial Production MoM Industrial Production YoY Construction Orders YoY Import Price Index MoM Import Price Index YoY Trade Balance Current Account Balance M3 Money Supply YoY Money Supply M2 YoY GDP QoQ GDP YoY Industrial Production MoM Industrial Production YoY GDP Annualized QoQ Personal Consumption GDP Price Index Chicago Purchasing Manager Base Interest Rate Manufacturing PMI Non-manufacturing PMI Nikkei Japan PMI Mfg PCE Deflator MoM PCE Deflator YoY PCE Core MoM PCE Core YoY Markit US Manufacturing PMI ISM Manufacturing ISM Prices Paid ISM New Orders ISM Employment Official Reserve Assets Nikkei Japan PMI Services Nikkei Japan PMI Composite Caixin China PMI Mfg Markit UK PMI Manufacturing SA Foreign Reserves Change in Currency Reserves Trade Balance Markit/CIPS UK Construction PMI Markit US Services PMI Markit US Composite PMI ISM Non-Manf. Composite FOMC Rate Decision (Upper Bound) FOMC Rate Decision (Lower Bound) Caixin China PMI Composite Caixin China PMI Services Markit/CIPS UK Services PMI Markit/CIPS UK Composite PMI Official Reserves Changes Money Supply M4 MoM Mar P Mar P Mar Mar Mar Feb F Feb Mar Mar 1Q A 1Q A Mar Mar 1Q A 1Q A 1Q A Apr May Apr Apr Apr F Mar Mar Mar Mar Apr F Apr Apr Apr Apr Apr Apr Apr Apr Apr Apr Apr Feb F Apr Apr F Apr F Apr 3-May 3-May Apr Apr Apr Apr Apr Mar -0.80% 3.90% --0.10% 6.50% --4.70% -0.40% 2.20% --1.00% 0.90% 2.00% 56.2 -51.7 ---0.20% 1.90% -0.10% 1.60% -56.5 ------51.4 54 464.1 0.0b -52 --56 1.00% 0.75% --54.6 55 --- www.bimbsec.com.my Actual Prior Revised -3.20% --4.70% --5.70% --0.70% --7.40% ---280m --0.4b --4.70% --9.00% --0.70% --1.90% ---0.70% --2.10% --2.10% --3.50% --2.10% --57.7 --0.00% --51.8 --55.1 --52.8 --0.10% --2.10% --0.20% --1.80% --52.8 --57.2 --70.5 --64.5 --58.9 --$1230.3b --52.9 --52.9 --51.2 --54.2 --464.1 ---2.5b -2.4b -911m --52.2 --52.5 --52.7 --55.2 --1.00% --0.75% --52.1 --52.2 --55 --54.9 --$77m ---0.30% -Source: Bloomberg, BIMB Securities Research |5
6. Market Insight DEFINITION OF RATINGS BIMB Securities uses the following rating system : STOCK RECOMMENDATION BUY Total return (price appreciation plus dividend yield) is expected to exceed 10 in the next 12 months. TRADING BUY Share price may exceed 15 over the next 3 months, however longer-term outlook remains uncertain. HOLD Share price may fall within the range of +/- 10 over the next 12 months TAKE PROFIT Target price has been attained. Fundamentals remain intact. Look to accumulate at lower levels. TRADING SELL Share price may fall by more than 15 in the next 3 months. SELL Share price may fall by more than 10 over the next 12 months. NOT RATED Stock is not within regular research coverage. SECTOR RECOMMENDATION OVERWEIGHT The Industry as defined by the analyst’s coverage universe, is expected to outperform the relevant primary market index over the next 12 months NEUTRAL The Industry as defined by the analyst’s coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months UNDERWEIGHT The Industry as defined by the analyst’s coverage universe, is expected to underperform the relevant primary market index over the next 12 months Applicability of ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies. Disclaimer The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of BIMB Securities Sdn may from time to time have a position in or either the securities mentioned herein. Members of the BIMB and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgements as of this date and are subject to change without notice. BIMB Securities Sdn accepts no liability for any direct, indirect or consequential loss arising from use of this report. Printed and published by BIMB SECURITIES SB (290163-X) A Participating Organisation of Bursa Malaysia Securities Level 32, Menara Multi Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur Tel: 03-2613 1600 Fax: 03-2613 1799 http://www.bimbsec.com.my www.bimbsec.com.my Azharuddin Nordin Head of Research |6