PP16795/03/2013(031743)

Transcription

1 Monday, 20 November, 2017 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Research Team PP16795/03/2013(031743) Reports Published Economics Malaysia Economy: GDP growth climbs to 3-year high Results Review: IOI Corp 1Q17 (Inline): Better margin from downstream; TP: RM 4.64 (Hold) Corporate News Economic News IOI Corp's 1Q profit up 3.4 times on currency translation gains, lower fair value loss PetDag's Euro 5-compliant diesel now available in Sabah, Sarawak TNB forms JV to develop mini hydropower stations in Malaysia Kejuruteraan Asastera targets RM250m order book by year end MRCB-Quill REIT 3Q net profit up 38% to RM21.38m OSK Ventures slips into loss in 3Q despite jump in revenue US tax plan could cause sugar high, then economic slump Germany's top banks step up efforts to offload toxic shipping debt Oil set for first weekly fall in six on oversupply Bankers shifting from London after Brexit may face lower pay Thailand could be joining Southeast Asia's economic boom Bursa Malaysia KLCI Performance Close Chg +/- Chg % YTD Chg (%) 1820 FBMKLCI 1, FBMEMAS 12, FBM100 12, FBMEMAS Shariah 12, FBM Hijrah Shariah 13, Volume (m) 2, Value (MYR m) 2, KLCI Year-End Target: 1,790 points Regional Indices Commodities (Last Close) Close Chg +/- Chg % YTD Chg (%) Close Chg +/- Chg % DJIA 23, Brent Crude (USD/bbl) NASDAQ 6, WTI Crude (USD/bbl) S&P 500 2, CPO (RM/MT) 2, FTSE 100 7, Gold (USD/ounce) 1, Nikkei , Latex (sen/kg) HSI 29, Soybean Oil SHCOMP 3, KOSPI 2, Forex TWSE 10, (per USD) BIMB (YE Forecast) Close Chg +/- Chg % STI 3, MYR JCI 6, JPY SET 1, EUR PSEi 8, SGD

2 Major Rates Daily Participation % Participation Bought Sold Net KLIBOR 3-mth 3.43 (%) (MYR m) (MYR m) (MYR m) KLIBOR 6-mth 3.56 Local Insti , , KLIBOR 12-mth 3.63 Local Retail yr MGS 3.76 Foreign yr MGS 3.98 Total , , Performance of BIMB Stock Coverage Source: Bank Negara Malaysia Source: The Sun, BIMB Securities Research Top Gainers Weekly Participation Close Chg +/- Chg % Participation (%) Bought (MYR m) Sold (MYR m) Net (MYR m) Supermax % Local Insti , , GHL Systems % Local Retail , , Westports % Foreign , , Kossan Rubber Industries % Total , , Hibiscus Petroleum % Top Losers Close Chg +/- Chg % Petronas Gas % MCT % KPJ Healthcare % Nestle % SP Setia % Source: The Sun, BIMB Securities Research 2

3 REPORTS PUBLISHED Malaysia Economy Economics GDP growth climbs to 3-year high Gross domestic product rose 6.2% yoy in 3Q17 Private sectors remain the main contributor Strong pick-up in services and manufacturing Current account surplus widens further to RM12.5bn in 3Q17 Strong expansion across most key demand and supply-side sectors underscores Malaysia s macro strength and resilience Full-year GDP growth estimate revised higher to 5.8% in 2017 while maintaining 5.1% for 2018 Malaysia s economy grew at the fastest pace in more than three years in 3Q17 as activity in the services and manufacturing sectors picked up and public spending exited contraction. Gross domestic product for the 3Q17 rose 6.2% yoy, accelerating from a 5.8% climb in the previous quarter and at the quickest clip since 2Q14. Strong GDP performance in 3Q17 led by robust domestic demand growth of 6.6% amid strength in private consumption (7.2%) and private investment (7.9%). Public sector spending ratchets up 4.1%. Exports expanded 11.8% alongside higher imports of 13.4%. On a net basis, added 0.2% to overall GDP growth. On the supply side, all the economic sectors, led by the services and manufacturing sectors, continued to expand. On a QoQ seasonally adjusted, GDP posted a growth of 1.8% against 1.3% in the prior quarter. Table 1: Quarterly GDP Growth (%YoY) 3Q16 4Q Q17 2Q17 3Q17 GDP (%YoY) Manufacturing Services Agriculture Mining Construction Domestic Demand Private Consumption Public Consumption Gross Fixed Capital Formation Private Investment Public Investment Exports of Goods & Services Imports of Goods & Services Source: Bank Negara Malaysia, Department of Statistics, BIMB Securities 3

4 CORPORATE NEWS IOI Corp's 1Q profit up 3.4 times on currency translation gains, lower fair value loss IOI Corp's net profit for its 1QFY18 jumped 3.4 times to RM360m from RM104.8m in the same quarter last year. The improvement is mainly due to net foreign currency translation gain on foreign currency denominated borrowings and lower fair value loss on derivative financial instruments from its resource-based manufacturing segment. This was despite a 5.3% yoy decline in quarterly revenue to RM2.21bn from RM2.33bn. Also partly offsetting the quarter's profit gains was lower fair value gain on biological assets in its plantation segment. (Source: The Edge) PetDag's Euro 5-compliant diesel now available in Sabah, Sarawak PetDag has added Sabah and Sarawak into the list of states that offer its Euro 5-compliant diesel, ahead of its full roll-out in The extended availability of the product now at 58 stations nationwide was announced in conjunction with the launch of its latest diesel product, the Petronas Dynamic Diesel Euro 5 with Pro-Drive, here in Bukit Jalil today. In 2018, it will be available in 115 stations and by 2020, all diesel will be Euro 5 compliant as gazetted by the government. The European emission standards regulate fuel sulphur content, as well as emissions of certain gases and particulate matters. The year 2020 gazetted deadline for fuel retailers to offer only Euro 5- compliant diesel was announced by the Malaysian government back in December Meanwhile, petrol products must be Euro-5 compliant by (Source: The Edge) TNB forms JV to develop mini hydropower stations in Malaysia TNB has formed a JV to jointly build a 4MW mini hydropower station in Sungai Tersat, Kuala Berang, Terengganu. The JV also plans to seek further potential sites for small hydropower development in Malaysia, subject to obtaining a favourable Feed-in Tariff scheme. Its wholly-owned unit TNB Energy Services S/B (TNBES) inked a shareholders' agreement with Metrosphere S/B to form the JV. TNBES will hold 49% stake in the JV company, Syarikat Metrosphere Hydro Tersat S/B, while Metrosphere will hold the remaining 51%. (Source: The Edge) Kejuruteraan Asastera targets RM250m order book by year end Kejuruteraan Asastera (KAB) targets an order book value of RM250m by year end. The company's current order book stands at RM210m and is expected to last till It is also tendering for projects worth RM250m. KAB made its debut on the ACE Market of Bursa Malaysia with an opening price of 33 sen, a premium of eight sen or 32% from its IPO price of 25 sen. The public offer of 16m issue shares was oversubscribed by times. KAB raised RM20m from its IPO, which will be allocated for working capital, including tender deposits, tender bonds and on-site expenses, listing expenses, and capital expenditure. It will also be used to establish a new office in Johor Baru and Kuala Lumpur. (Source: The Edge) MRCB-Quill REIT 3Q net profit up 38% to RM21.38m MRCB-Quill REIT (MQReit)'s net profit for 3QFY17 rose 38.1% to RM21.38m from RM15.23m a year earlier, on the back of higher realised revenue. MQReit s revenue for the quarter rose to RM44.88m from RM32.83m a year earlier. EPS dipped to 2 sen from 2.3 sen previously. For 9M17 ended Sept 30, MQReit's net profit rose to RM66.59m from RM45.85m on the back of revenue of RM135.06m versus RM97.77m a year earlier. Reviewing its performance as compared with 3QFY16, its realised revenue was higher by 37.9% due to additional revenue arising from the acquisition of Menara Shell on Dec 22, 2016 as well as higher rental income due to step-up rent adjustments from QB3, Wisman Technip, QB5 and QB2. (Source: The Edge) OSK Ventures slips into loss in 3Q despite jump in revenue OSK Ventures International (OSKVI) posted a net loss of RM15.06m for 3QFY17 compared with a net profit of RM5.52m recorded in the same quarter a year ago, mainly attributable to the decrease in income earned and net fair value loss on its financial instruments. There was a net fair value loss of RM15.26m on its financial instruments compared to a net fair value gain on financial instruments of RM4.18m in 3QFY16. However, quarterly revenue was at RM22.83m, which is more than double the revenue it recorded in the same quarter last year, at RM9.59m. For the cumulative 9MFY17, the group's net profit jumped more than nine times to RM29.23m, from RM3.07m it registered in the previous nine-months period. Revenue almost tripled to RM73.96m, from RM27.23m in 9MFY17. (Source: The Edge) 4

5 ECONOMIC NEWS US tax plan could cause sugar high, then economic slump Slashing taxes may give the US economy a temporary boost but the sugar rush may cause deeper problems ahead. US equities have rallied this year, partly on hopes that promises by President Donald Trump to cut taxes will come to fruition. But while investors at the summit thought a cut would continue to boost equities and help corporations, some questioned whether the timing was right and worried about the impact on the country's deficit. I worry about a sugar rush which you crash harder from. (Source: Reuters) Germany's top banks step up efforts to offload toxic shipping debt Top national lenders Deutsche Bank and Commerzbank are stepping up efforts to offload distressed shipping loans, as the German banking system grapples with US$100bn in toxic debt from the sector. While the shipping sector is showing signs of recovery after a near-decade long downturn, it is still struggling with an excess of ships and sluggish growth in global trade, which has led to some shipping companies going to the wall. German banks, once global leaders in ship financing, have written off billions of euros in loans to shipping companies, while other European lenders facing capital pressure from regulators have quit the business. (Source: Reuters) Oil set for first weekly fall in six on oversupply Oil prices rose on Friday but remained en route for their first week of losses in 6, as concerns grew over Russia's support for an extension of the crude output cuts that have bolstered prices in recent months. Benchmark Brent crude oil was up 50 US cents at US$61.86 a barrel by 1000 GMT. US light crude was at US$55.90 a barrel, up 76 US cents. Friday's slight uptick belied a downturn seen in recent days, with prices set to fall between 2% and 4% for the week as a whole. After 5 days of continuous losses, an upside correction is always on the cards. Such a jump, however will not mean a change of heart. An agreement by the Organization of the Petroleum Exporting Countries and other producers such as Russia to limit oil production has propped up prices in recent months, with the deal expected to be extended at the group's next meeting on Nov. 30. (Source: Reuters) Bankers shifting from London after Brexit may face lower pay Bankers relocating from London to other European financial hubs following Britain s exit from the European Union could face lower pay packages, according to an industry survey published on Friday by compensation consultant Emolument. The average managing director, one of the more senior ranks in investment banking, earns 478,000 pounds ($632,633.00) a year in London compared with 312,000 pounds in Paris, 298,000 pounds in Frankfurt and 333,000 pounds in Milan, the survey said. Those figures comprise the average annual salary and bonus combined of 4,475 front-office bankers pay packages analyzed for the study. Around 10,000 finance jobs will be shifted out of Britain or created overseas in the next few years if the UK is denied access to Europe s single market. (Source: Reuters) Thailand could be joining Southeast Asia's economic boom An economic boom that s reverberated across Southeast Asia has finally crossed over to Thailand. The economy, which has lagged its neighbors this decade, is projected to have grown at the fastest pace in more than four years last quarter even as the baht surged. There s reason to be optimistic as exports post double-digit percentage gains and the end of a yearlong mourning period for King Bhumibol Adulyadej bolsters the outlook for consumption. The country becoming more and more optimistic as the recovery in exports is more enduring than we expected. There s still a lot of challenges, particularly the inability of the government to crowd in private investment. That would really re-energize the economy.. (Source: Reuters) 5

6 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 11/20/ :50 JN Trade Balance Oct 330.0b 285.4b 670.2b 667.7b 11/20/ :50 JN Trade Balance Adjusted Oct 206.7b 322.9b 240.3b 266.6b 11/20/ :50 JN Exports YoY Oct 15.70% 14.00% 14.10% -- 11/20/ :50 JN Imports YoY Oct 20.20% 18.90% 12.00% 12.10% 11/20/ :00 PD Sold Industrial Output MoM Oct 3.10% % -- 11/20/ :00 PD Sold Industrial Output YoY Oct 9.90% % -- 11/20/ :00 PD Construction Output YoY Oct 23.90% % -- 11/20/2017 GR Current Account Balance Sep m -- 11/21/ :00 LN Industrial Production YoY Oct % -- 11/21/ :00 SP Trade Balance Sep m -- 11/21/ :00 HU Central Bank Rate Decision Nov % % -- 11/23/ :00 US FOMC Meeting Minutes Nov /23/ :30 UK GDP QoQ 3Q P 0.40% % -- 11/23/ :30 UK GDP YoY 3Q P 1.50% % -- 11/23/ :30 UK Private Consumption QoQ 3Q P 0.40% % 0.20% 11/23/ :30 UK Government Spending QoQ 3Q P 0.30% % 0.10% 11/23/ :00 PD Money Supply M3 MoM Oct 0.70% % -- 11/23/ :00 PD Money Supply M3 YoY Oct 5.50% % -- 11/24/ :30 JN Nikkei Japan PMI Mfg Nov P /24/ :00 IT Industrial Orders MoM Sep % -- 11/24/ :00 IT Industrial Orders NSA YoY Sep % -- 11/24/ :00 IT Industrial Sales MoM Sep % -- 11/24/ :00 IT Industrial Sales WDA YoY Sep % -- 11/24/ :45 US Markit US Manufacturing PMI Nov P /24/ :45 US Markit US Services PMI Nov P /24/ :45 US Markit US Composite PMI Nov P /24/2017 RO Money Supply M3 YoY Oct % -- 11/24/ /28 GE Import Price Index MoM Oct 0.50% % -- 11/24/ /28 GE Import Price Index YoY Oct 2.60% % -- 11/27/ :30 CH Industrial Profits YoY Oct % -- 11/28/ :30 SW Trade Balance Oct b -- 11/28/ :00 EC M3 Money Supply YoY Oct % -- 11/28/ :00 BP Gross External Debt Sep b -- 11/28/ :30 US Advance Goods Trade Balance Oct -$65.5b -- -$64.1b -$64.1b 11/29/ :30 UK Money Supply M4 MoM Oct % -- 11/29/ :30 UK M4 Money Supply YoY Oct % -- 11/29/ :30 US GDP Annualized QoQ 3Q S 3.30% % -- 11/29/ :30 US Personal Consumption 3Q S % -- 11/29/ :30 US GDP Price Index 3Q S 2.20% % -- 11/30/ :50 JN Industrial Production MoM Oct P % -- 11/30/ :50 JN Industrial Production YoY Oct P % -- 11/30/ :00 CH Manufacturing PMI Nov /30/ :00 CH Non-manufacturing PMI Nov /30/ :00 CH Swift Global Payments CNY Oct /30/ :00 JN Construction Orders YoY Oct % -- 11/30/ :00 FI Trade Balance Sep F m -- 11/30/ :00 SP Current Account Balance Sep b -- 11/30/ :00 PO Industrial Production MoM Oct % -- 11/30/ :00 PO Industrial Production YoY Oct % -- 11/30/ :30 US PCE Deflator MoM Oct 0.10% %

7 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 chg 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 ( X) A Participating Organisation of Bursa Malaysia Securities Level 32, Menara Multi Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, Kuala Lumpur Tel: Fax: Azharuddin Nordin Head of Research 7