R e t a i l M a r k e t M o n i t o r Thursday, 24 November 2016

Transcription

1 MARKET NEWS FBMKLCI CHART The FBMKLCI increased 1.06pt (+0.07%) to close at 1,630.38pt yesterday. Meanwhile, the rally in global stocks extended into a third day amid optimism economic growth is strong enough to withstand higher US interest rates. The MSCI Asia Pacific excluding Japan Index advanced 0.7%, building on last session s 1.1% increase.the FBMKLCI s top gainers were Sime Darby (+1.4%), KLCC Property Holdings (+1.2%) and Astro Malaysia Holdings (+1.1%) while the top losers were CIMB Group Holdings (-1.3%), British American Tobacco (-1.1%) and Westports Holdings (-0.9%). In the broader market, losers outpaced gainers 547 to 238 with 321 counters unchanged. Turnover was 1.56b shares valued at RM1.83b. From a technical perspective, the daily candlestick of the FBMKLCI has formed a hammer as the index rebounded from the immediate support of 1,611 last week. Despite a weaker momentum and a negative short-term connotation, the index is still holding above the 21-day EMA, reflecting the long-term positive outlook. A follow-through from the last few days technical rebound would likely change the immediate outlook from bearish to neutral. Nevertheless, we maintain our optimism, given the lack of external and domestic catalysts that could cause a meltdown in the stock market. However, investors are advised to tread the market cautiously. Support and resistance levels are as follow: Support: 1,612,1,600 Resistance: 1,665, 1,680 US stocks ended mostly higher on Wednesday, with the DJIA and the S&P 500 again setting new all-time closing highs after strong results from farm equipment maker Deere. However, tech stocks slipped after HP released a weak profit forecast. The DJIA gained 59.13pt, or 0.31%, to close at 19, while the S&P500 edged higher by 1.78pt, or 0.08%, to 2, Trading volume was lower than usual ahead of the Thanksgiving Holiday in the US. Falling stocks outnumbered advancing ones on the NYSE by 1,595 to 1,551 and 98 ended unchanged. WHAT S IN THE PACK Bumi Armada (BAB MK/BUY/RM0.63/Target: RM0.92) 3Q16: Sequentially weaker profits, no risk on debt covenants. PPB Group (PEP MK/SELL/RM15.76/Target: RM14.30) 3Q16: Within expectations. Expect better 4Q16 results from grains & agribusiness and cinema operations; trim our 2016 net profit forecast to reflect lower earnings for Wilmar. RHB Bank (RHBBANK MK/HOLD/RM4.75/Target: RM4.90) 3Q16: Results were largely in line with expectations. Despite fairly solid PPOP growth, we remain wary of future asset quality outlook. Maintain HOLD. Inari Amertron (INRI MK/BUY/RM3.38/Target: RM3.85) On track to deliver strong yoy earnings growth of 21-23% in FY17-18; potential earnings upside from new job and favourable forex. GHL System (GHLS MK) Technical BUY on breakout with +21.6% RM1.04 and stop-loss at RM Having sustained at above the BBI line over the past few days, GHLS surged on renewed buying interest to retest the breakout level of RM0.855 yesterday. Insas (INS MK) Technical BUY on breakout with +15.9% RM0.875 and stop-loss at RM Yesterday, the stock closed above the BBI line, indicating upward potential in the near term. Leon Fuat (LEFU MK) Technical BUY on breakout with 16.2% RM0.61 and stop-loss at RM Yesterday s price spike sees LEFU breaking out to stage a convincing move above the 7- and 21-day EMA. Source: Bursa Station KEY INDICES Prev Close Chg (%) YTD (%) DJIA 19, S&P 500 2, FTSE 100 6, (0.03) 9.22 CSI 300 3, (6.87) FSSTI 2, (1.49) HSCEI 9, HSI 22, (0.01) 3.48 JCI 5, KLCI 1, (3.67) KOSPI 1, (0.12) 1.23 Nikkei , (4.57) SET 1, TWSE 9, BDI 1, (0.65) CPO (RM/mt) 2, Nymex Crude (US$/bbl) TOP VOLUME Stock Price (RM) Chg (%) Vol ( 000) Felda Global 1.55 (8.28) 86,510 Rgb International Bhd 0.24 (5.88) 45,149 Airasia X Bhd 0.39 (2.50) 43,474 Vivocom International ,793 Bumi Armada Bhd 0.60 (4.76) 26,636 TOP GAINERS Stock Price (RM) Chg (%) Vol ( 000) Fsbm Holdings Bhd At Systematization ,473 Nexgram Holdings ,909 Talam Transform Bhd G Neptune Bhd ,330 TOP LOSERS Stock Price (RM) Chg (%) Vol ( 000) Perisai Petroleum 0.05 (23.08) 19,816. Pdz Holdings Bhd 0.06 (14.29) 1,374.5 Dksh Holdings 5.28 (14.15) Sc Estate Builder Bhd 0.04 (12.50) 50.0 Eka Noodles Bhd 0.04 (12.50) 3.7 Source: Bloomberg w w w. u t r a d e. c o m. m y 1

2 TRADERS CORNER GHL System (GHLS MK) Technical BUY on breakout with +21.6% Last price : RM0.83 Target price : RM0.985, RM1.04 Support : RM0.78 Stop-loss : RM0.775 RM1.04 and stop-loss at RM Having sustained at above the BBI line over the past few days, GHLS surged on renewed buying interest to retest the breakout level of RM0.855 yesterday. Growing bullish divergence in the MACD suggests the bullish trend will continue in the near term while the steep upward movement of the RSI suggests buying momentum will continue to pick up going forward. We peg our targets at RM0.985 and RM1.04 once the stock penetrates above the breakout level of RM Expected time frame: 2 weeks to 2 months Insas (INS MK) Technical BUY on breakout with +15.9% Last price : RM0.72 Target price : RM0.82, RM0.875 Support : RM0.69 Stop-loss : RM0.685 RM0.875 and stop-loss at RM Yesterday, the stock closed above the BBI line, indicating upward potential in the near term. This is supported by the 7-day EMA which is currently crossing above the 21- day EMA, which indicates a bullish signal. An uptick in the RSI and a bullish crossover in the DMI suggest stronger buying momentum ahead. We peg our target prices at RM0.82 and RM0.875 in the near term. Expected time frame: 2 weeks to 2 months. w w w. u t r a d e. c o m. m y 2

3 TRADERS CORNER Leon Fuat (LEFU MK) Technical BUY on breakout with +16.2% Last price : RM0.515 Target price : RM0.59, RM0.61 Support : RM0.48 Stop-loss : RM0.475 RM0.61 and stop-loss at RM Yesterday s price spike saw LEFU breaking out to stage a convincing move above the 7- and 21-day EMA. Yesterday s gain was also on high trading volume while the rising MACD and RSI indicators imply positive momentum would strengthen further in the near term. Additionally, the DMI is on the verge of making golden cross to the positive signal. We expect the share price will continue the upward move towards our targets once it manages to penetrate above RM Expected Timeframe: 2 weeks to 2 months w w w. u t r a d e. c o m. m y 3

4 CORPORATE NEWS C.I. Holdings: 1Q net profit drops by half to RM5.06m. C.I. Holdings Bhd s net profit dropped by half to RM5.06m or RM3.12 a share for the first quarter ended Sept 30, 2016 (3QFY16), from RM10.07m or RM6.21 a year earlier, as shipments to several high margin markets decreased owing to shortage of US dollars. Revenue rose 38% to RM360.22m from RM260.09m, the edible oils manufacturer said in a filing to Bursa Malaysia today. The higher revenue, it said, was mainly due to higher prices for palm olein and increased shipping to low margin market. (Source: The Edge Financial Daily) Crest Builder: Sees 65% drop in 3Q net profit amid higher costs, lower property sales. Crest Builder Holdings Bhd saw its net profit plunge 65% to RM3.91m or 2.3 sen per share for the third quarter ended Sept 30, 2016 from RM11.23m or 6.5 sen per share a year earlier amid slower performance across all its business divisions. Revenue for the quarter was lower at RM74.17m, down 22% year-onyear from RM95.03m. (Source: The Edge Financial Daily)) Econpile: 1Q Net profit up 13.5%, pays 1.5 sen dividend. Piling and foundation specialist Econpile Holdings Bhd's net profit rose 13.5% to RM16.45m or 3.07 sen a share in the first quarter ended Sept 30, 2016 (1QFY17) from RM14.5m or 2.71 sen a share a year ago, mainly driven by contribution from piling and foundation works for property development projects. Gross profit margin and profit before tax margin stood at 23.7% and 19.3% respectively for the current quarter under review. (Source: The Edge Financial Daily) EITA Resources: 4Q profit down 80%, plans 2 sen dividend. Higher revenue notwithstanding, homegrown elevator and busduct maker EITA Resources Bhd's net profit plunged 80% year-on-year in the fourth quarter of the financial year 2016 (FY16), as it saw lower unrealised foreign exchange gain on the fair value of its forward exchange contracts. Its net profit came in at RM1.82m in the fourth quarter ended Sept 30, 2016 (4QFY16) from RM8.97m a year ago, its bourse filing today showed. (Source: The Edge Financial Daily) IGB Corp: Third-quarter pre-tax profit surges 149%. IGB Corporation Bhd's pre-tax profit surged 149% to RM252.64m in the third quarter ended Sept 30, 2016, from RM101.36m a year earlier. In a filing with Bursa Malaysia on Wednesday, the group said the higher profit was mainly attributed to contributions from the property development, property investment-retail and hotel divisions. In addition, it said the pre-tax profit for the quarter included a one-off gain of RM136.20m from the disposal of property, plant and equipment by a subsidiary. (Source: The Star) MBM Resources: 3Q profit grows 147% on Bezza launch, Hino sales. Favourable market response to Perodua's Bezza lifted MBM Resources Bhd's net profit for the third quarter ended Sept 30, 2016 (3QFY16), which grew 147% to RM21.3m or 5.45 sen a share from RM8.62m a year ago. In a filing with Bursa Malaysia today, it said the group's share of associates' results recorded a 120.1% rise to RM29.02m, as the Bezza, launched in July, was well received. It also registered improved sales volumes from Hino Motors Sales (M) Sdn Bhd. MBM holds a 20% stake in Perodua or Perusahaan Otomobil Kedua Sdn Bhd, and a 42% stake in Hino Motors. (Source: The Edge Financial Daily) w w w. u t r a d e. c o m. m y 4

5 Mercury Industries: Exits auto refinish biz, netting RM11.29m from subsidiary disposal. Mercury Industries Bhd is exiting the auto refinish business, citing increasing challenges in the segment from the slowing domestic economy, uncertainties in the global economies and the weaker ringgit. "Pursuant to the proposed disposal, the construction business will be the sole business of the Mercury Group," it told Bursa Malaysia via a filing today. It said the construction segment will continue to be the key contributor to its earnings, given the remaining order book of around RM144m as at Sept 30, (Source: The Edge Financial Daily) ML Global: Terminates MoU with China's Zhejiang Zhongxia. ML Global Bhd has terminated a memorandum of understanding (MoU) that it had entered into with China's Zhejiang Zhongxia Investment Co Ltd. In a filing with Bursa Malaysia today, ML Global said it had served a written notice to Zhejiang for the termination, as there was no consensus on the formal agreement's terms and conditions by both parties. "Accordingly, the MoU shall be terminated 60 days from the termination notice, [which is] on Jan 22, 2017," read ML Global's announcement. (Source: The Edge Financial Daily) Parkson: Posts fourth straight quarter of losses amid weak consumer sentiment. Parkson Holdings Bhd posted its fourth straight quarterly losses in its first financial quarter ended Sept 30, 2016 (1QFY17) amid weak consumer sentiment, with a net loss of RM62.57m or 5.93 sen loss per share compared with a net profit of RM63.29m or 5.8 sen per share a year ago. Revenue fell 5.9% to RM878.24m in 1QFY17 from RM933.39m in 1QFY16. (Source: The Edge Financial Daily) Prestariang: 3Q net profit plunges 85%, pays 0.75 sen dividend. Prestariang Bhd's net profit plunged 85% to RM731,000 or 0.15 sen per share in the third quarter ended Sept 30, 2016 (3QFY16) from RM5.02m or 1.04 sen per share a year ago, mainly due to lower profit margin contribution from the software and services segment. The talent, technology and education provider's revenue, however, grew 11% to RM17.84m in 3QFY16 from RM16.13m in 3QFY15. Prestariang declared a dividend of 0.75 sen per share amounting to RM3.6m for 3QFY16, payable on Jan 6 next year. Since listing in July 2011, the group has declared a total dividend of sen per share amounting to RM114.4m to shareholders. (Source: The Edge Financial Daily) Petronas: Able to reduce costs with Blue Ocean Strategy. Petroliam Nasional Bhd (Petronas) has already been adopting the Blue Ocean Strategy (BOS) in its operations and has reaped the benefits in terms of cost savings, chairman Tan Sri Mohd Sidek Hassan said. He said Petronas believes the strategy is a great idea because it means doing things beyond the ordinary. Datuk Wan Zulkiflee (Petronas president and group chief executive Datuk Wan Zulkiflee Wan Ariffin), I believe deep in his heart, we didn t call it Blue Ocean then, but he has implemented the strategy already. (Source: The Star) SILK Holdings: 3Q net loss of RM16.6m. SILK Holdings Bhd reported a net loss of RM16.63m or 2.37 sen per share for the third quarter ended Sept 30, 2016, due to the subdued oil and gas (O&G) industry. Revenue for the quarter stood at RM35.84m. There is no comparable period as the group changed its financial year end to Dec 31 from July 31 previously. In a statement, the group said its O&G division headed by Jasa Merin (Malaysia) Sdn Bhd became the predominant contributor to its overall revenue for the quarter, as Sistem Lingkaran Lebuhraya Kajang Sdn Bhd (SILK Highway) was recorded as "assets classified as held for sale" following the proposed disposal of the highway to WZ Satu Bhd (WZSB). (Source: The Edge Financial Daily) w w w. u t r a d e. c o m. m y 5

6 SECTOR Port: With US$3b port, Malacca eyes slice of shipping giant Singapore's pie. Once at the heart of the global spice trade, Malacca is pumping nearly $3b into an ambitious plan to put itself in demand in a different hot commodity - oil. The Malaysian state is reclaiming land along the Straits of Malacca to build a port that can handle the biggest tankers on the planet. The target: a slice of traffic sailing on to nearby Singapore, the top but congested trading hub in a region with $600b in annual oil trade - a third of global oil demand. (Source: The Star) ECONOMICS GDP: RAM sees Malaysia s 2017 GDP growth at 4.5%. RAM Rating Services Bhd expects Malaysia s gross domestic product (GDP) to grow by 4.5% in 2017 higher than its projection of 4.2% growth in In a statement today, the ratings agency said the marginal improvement remains supported by resilient domestic demand. That said, broad-based recovery in business and consumer sentiment is not widely envisaged next year, with sales of durable goods yet to show any sustained momentum and the lack of any impetus for businesses to expand their production capacity. (Source: The Edge Financial Daily) Interest Rate: Bank Negara keeps OPR unchanged at 3%. Bank Negara has maintained the overnight policy rate (OPR) at 3% at its Monetary Policy Committee (MPC) meeting held Wednesday, in line with market expectations. Bank Negara had lowered its benchmark rate by 25 basis points to 3% in July. At the current level of the OPR, the degree of monetary accommodativeness is consistent with the policy stance to ensure that the domestic economy continues on a steady growth path amid stable inflation, supported by continued healthy financial intermediation in the economy. (Source: The Star) POLITICS General: Hudud having two legal systems would tear Malaysia apart. Gerakan remains opposed to PAS president Datuk Seri Abdul Hadi Awang s Private Member s Bill, saying two legal systems will tear the country apart. We remain opposed to Hadi s Bill, party president Datuk Seri Mah Siew Keong said. In a statement issued earlier, Mah said if Malaysia wanted to move forward, it had to be done in an inclusive manner. (Source: The Star) w w w. u t r a d e. c o m. m y 6

7 FROM THE REGIONAL MORNING NOTES... Bumi Armada: 3Q16: Sequentially Weaker Profits, No Risk On Debt Covenants (BAB MK/BUY/RM0.63/Target: RM0.92) 9M16 core profits was below expectation due to higher taxation. There were no major negative surprises in 3Q16 operations sequentially. Although we cut our forecasts accordingly, the new floating projects will contribute significantly to cash flow/ profits by Despite weaker EBITDA levels, we have assessed that there is no cause for concern as BAB is still well within the allowable range for loan covenant on net debt/ebitda. Maintain BUY and SOTP target price of RM0.92. PPB Group: 3Q16: Satifactory Performances From Core Businesses (PEP MK/SELL/RM15.76/Target: RM14.30) PPB s 3Q16 results were within expectations. We see stable contribution from the grains & agribusiness in 4Q16, while the cinema segment is likely to report stronger qoq results on better movies released during the holiday season. However, consumer products, property, environmental engineering & utilities are likely to stay weak in the near term. We reduce our 2016 EPS forecast to reflect Wilmar s lower earnings and a weakening ringgit vs S$. Maintain SELL. Target price: RM RHB Bank: 3Q16: Asset Quality In The Spotlight (RHBBANK MK/HOLD/RM4.75/Target: RM4.90) 3Q16 results were largely in line with expectations. Despite a fairly solid PPOP growth, we remain wary of future asset quality outlook and the group s declining LLC. Loans growth was also sluggish. Rolling over to 2017, we raise our Gordon Growth-derived target price to RM4.90 (8.7% ROE, 0.87x 2017F P/B). Upside from our roll-over effect has been partially diluted by a 6% reduction in 2017 earnings to factor in weaker fee income growth outlook. Maintain HOLD. Entry level: RM4.45. Inari Amertron: On Track To Achieve Greater Earnings (INRI MK/BUY/RM3.38/Target: RM3.85) We remain optimistic of Inari s multi-pronged expansion and forecast strong net profit growth of 21-23% in FY17-18, after an analyst briefing yesterday. There could be upside to our earnings forecasts due to a potential bigger-than-expected new contract and favourable exchange rates. Inari announced a 1-for-1 bonus issue, which could increase the stock s liquidity. Maintain BUY. Target price: RM3.85. For more reports, please log in to or open an account now to gain access. Explore our trading tools designed to assist you in your trading ShareXplorer, ChartGenie, TechAnalyzer, Stock Alerts! Broaden your knowledge through our educational events. Contact us now at to find out more about our ongoing promotions (get FREE* live feed on foreign markets). *T&C apply. w w w. u t r a d e. c o m. m y 7

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