PP16795/03/2013(031743)

Transcription

1 Tuesday, 28 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 Results Review: QL Resources 2Q18 (In-line); Within expectations; TP: RM 3.98 (Hold) Results Review: IHH Healthcare 3Q17 (In-line) ; On recovery mode; TP: RM 5.65 (Hold) Results Review: GHL System 3Q17 (Below) ; Strong growth from Thailand & Philippines; TP: RM 1.50 (Hold) Corporate News MNRB's 2Q net profit rises sharply on improved reinsurance, takaful businesses Sunway 3Q net profit up 5% on higher revenue as tax expense retreats EG Industries plans RM30m Sungai Petani plant expansion Glomac 2Q net profit down 92% on absence of government grant Tiong Nam eyes regional logistics opportunities to maintain lead position Manulife 3Q net profit down 41% on worsened claims, higher distribution expenses Bursa Malaysia Close Chg +/- Chg % YTD Chg (%) FBMKLCI 1, FBMEMAS 12, FBM100 12, FBMEMAS Shariah 12, FBM Hijrah Shariah 14, Volume (m) 1, Value (MYR m) 1, Economic News US new home sales hit 10-year high in October China's industrial profits surge in Oct, take sting off gov't debt crackdown How China's Going to Try to Control Its Massive Housing Bubble Japan plans extra budget of USD24bn-USD26bn for fiscal 2017 Hong Kong s house prices could soar another 10% next year OPEC sees market rebalancing after June as it mulls oil cut extension KLCI Performance 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 3.64 Foreign yr MGS 3.91 Total , , Performance of BIMB Stock Coverage Top Gainers Source: Bank Negara Malaysia Top Losers Source: The Sun, BIMB Securities Research Close Chg +/- Chg % Close Chg +/- Chg % Hartalega % Kawan Food % Ikhmas Jaya % Petronas Gas % Dagang Nexchange % TM % Westports % IJM Plantations % Hibiscus Petroleum % TH Plantations % 2

3 CORPORATE NEWS MNRB's 2Q net profit rises sharply on improved reinsurance, takaful businesses Improved revenue in MNRB's reinsurance and takaful businesses helped lift the group's 2Q net profit by % to RM20.72m from RM7.5m a year ago. Revenue for the quarter ended Sept 30, 2017 rose 5.43% to RM651.42m from RM617.84m. Cumulative 6 month net profit surged by 85.09% to RM71.16m from RM38.45m a year ago, also on the back of improvements in its reinsurance and takaful businesses. Revenue for the 6 months increased 2.73% to RM1.26bn from RM1.22bn previously. Contribution from the group's reinsurance segment had grown on higher reinstatement premiums from international business, with 2Q net profit up % to RM55.4m as a result of higher underwriting surplus and improved net investment income. (Source: The Edge) Sunway 3Q net profit up 5% on higher revenue as tax expense retreats Sunway's net profit climbed 5% yoy to RM150.85m in its 3QFY17 from RM143.61m, as revenue rose and income tax expense declined. Quarterly revenue grew 16% yoy to RM1.32bn from RM1.14bn, on improved contribution from most of its business segments. Income tax expense retreated 23% yoy to RM28.96m from RM37.71m. Its property investment segment reported a 19% rise in revenue to RM225.4m, on additional contribution from the new Sunway Velocity Mall and improved results from Sunway Pyramid Hotel, which had been re-opened progressively this year following a refurbishment in Meanwhile, its construction segment recorded a 45% revenue rise to RM416.6m on higher progress billings from local construction projects, and lower intra-group eliminations. (Source: The Edge) EG Industries plans RM30m Sungai Petani plant expansion EG Industries plans to spend RM30m in its FY18 to expand its Sungai Petani plant from 215,307 sq ft to about 260,000 sq ft. The capital expenditure will be funded through bank borrowings and internal funds. The expansion is in view of the group's strong growth in box build over the years. Revenue from its box-build segment grew from RM63.6m in FY15 to RM161.3m in FY17, indicating a compounded annual growth rate of 59.3%. Currently, their utilisation rate of the Sungai Petani plant is at 65%. The expanded space is to cater to strong enquiries from customers for box-build contracts, reiterating their stronger proposition in that segment. (Source: The Edge) Glomac 2Q net profit down 92% on absence of government grant Glomac saw a 92.3% drop in 2Q net profit mainly due to the recognition of a one-off government grant received amounting to RM26.3m in the previous year. The property developer's net profit for the 2QFY18 fell to RM1.41m from RM18.25m a year ago. Earnings per share also declined to 0.19 sen from 2.53 sen in 2QFY17. Quarterly revenue, however, rose 30.9% to RM109.93m from RM83.99m in 2QFY17, mainly contributed by its projects such as Lakeside Residences in Puchong, Saujana KLIA in Dengkil and Saujana Perdana in Sg Buloh. The weak quarterly performance dragged down its net profit for the 6MFY18 by 96.6% to RM3.51m from RM103.79m, while revenue was 38.2% lower to RM207.42m versus RM335.41m in 6MFY17. (Source: The Edge) Tiong Nam eyes regional logistics opportunities to maintain lead position Tiong Nam is eyeing growth opportunities in the regional logistics and warehousing services sector as it seeks to maintain its lead position. With trade and e-commerce activity across Southeast Asia expected to demonstrate strong growth, they look forward to greater demand for logistics and warehousing solutions. The opportunities are abound for integrated providers that can bring greater efficiency and value to businesses amid competitive environments. Recognising this, they are investing in the expansion of their infrastructure in Malaysia and across the region, involving the setup of new delivery routes, as well as new warehousing facilities and sales offices. Tiong Nam's net profit fell marginally by 0.07% to RM13.04m in the 2QFY18 from RM13.05m a year earlier. (Source: The Edge) Manulife 3Q net profit down 41% on worsened claims, higher distribution expenses Manulife s net profit for its 3QFY17 fell 41.14% to RM7.45 m, from RM12.64m a year ago, as its life insurance business recorded worsened claims and higher distribution channel expenses, due to business expansion. However, quarterly revenue climbed 14.91% to RM305.97m in 3QFY17, from RM266.74m yoy, largely on the back of a 77.3% increase in operating revenue from its asset management services. Its life insurance business posted higher revenue due to higher premium income, although investment holding contribution fell due to lower investment income. Manulife s investment holding segment reported a lower pre-tax loss due to higher disposal gains, while its asset management services also reported lower losses, on the back of higher unit trust sales and higher management fees earned. (Source: The Edge) 3

4 ECONOMIC NEWS US new home sales hit 10-year high in October Sales of new US single-family homes unexpectedly rose in October, scaling their highest level in 10 years amid robust demand across the country, offering a boost to the housing market. The new home sales increased 6.2% to a seasonally adjusted annual rate of 685,000 units last month. That was the highest level since October September's sales pace was revised down to 645,000 units from the previously reported 667,000 units. Economists polled by Reuters had forecast new home sales, which account for 11% of overall home sales, falling 6.0% to a pace of 625,000 units last month. New home sales surged 18.7% on a yoy basis in October. They have now increased for 3 straight months. Housing has been constrained by shortages of homes for sale, skilled labor and suitable building land. (Source: The Edge) China's industrial profits surge in Oct, take sting off gov't debt crackdown China's industrial firms weathered a broad government crackdown on financial risks, as profits continued to surge last month in a stabilising force for the world's 2 nd biggest economy, which has started to cool slightly in recent months. The vast industrial sector has been boosted by a year-long, government-led construction spree, helping lift demand and prices for building materials and taking the edge off higher borrowing costs. Indeed, mining and heavy industry contributed the biggest gains in October, propelling overall industrial profits by 25.1% yoy to 745.4bn yuan (USD112.94bn), compared with a 27.7% jump in September. Despite the modest slowdown, October's growth rate was still the 2 nd highest for a single month this year, and overall profits are on pace to easily top 2016's record 6.88trn yuan. (Source: Reuters) How China's Going to Try to Control Its Massive Housing Bubble China s efforts to cool the property market may lead to the 1 st decline in home sales since 2014 next year, highlighting the risks as officials try to battle bubbles without tanking the economy. As a government campaign tackling excessive leverage and financial risks chokes off some sources of buyer funding, such as consumer loans, developers could also find that credit is tighter next year. As dozens of cities maintain their curbs on property sales, new mortgages have dipped and funds for building have slowed. JPMorgan Chase & Co. sees a 6% decline in home sales in An overheated real-estate sector is 1 of the eminent dangers to the world s 2 nd largest economy as policy makers step up efforts to tackle financial risks. (Source: Bloomberg) Japan plans extra budget of USD24bn -USD26bn for fiscal 2017 Japan's government is set to compile an extra budget worth around USD24-USD26bn for the fiscal year to March 2018, with additional bond issuance of around 1trn yen to help fund the spending. In addition to construction bond issuance worth around 1trn yen, the government will scrape together cash reserves from the previous fiscal year's budget and money left unused from debt servicing, due to lower-than-estimated borrowing costs. No deficit-covering bond issuance was planned on condition of anonymity, because the plan has not yet been finalised. Following October's big election win, Prime Minister Shinzo Abe's cabinet has made plans to beef up childcare support, boost productivity at small and medium-sized companies, and strengthen competitiveness of the farm, fishery and forestry industries. (Source: Reuters) Hong Kong s house prices could soar another 10% next year Hong Kong s red-hot housing market shows no signs of cooling anytime soon. Prices in the city have climbed 11% this year, defying skeptics waiting for the bubble to burst and government attempts to rein in the world s most expensive housing market through a raft of taxes and mortgage curbs. If anything, the frenzy has intensified in recent months as investors have poured money into property. Buyers have set new records for everything from luxury homes in the exclusive Peak neighborhood to undeveloped residential land. There have also been blockbuster deals for commercial property in the heart of Hong Kong s central district. Now it is very hot, because of the hot money rushing in. (Source: Bloomberg) OPEC sees market rebalancing after June as it mulls oil cut extension Oil markets will rebalance after June 2018 at the earliest, signalling the need to extend existing production cuts well into next year. The conclusion from OPEC's national representatives and the group's secretariat came after a meeting on Thursday and Friday. It also came as non-opec Russia would support extending cuts in tandem with OPEC but gave conflicting signals on the duration of the extension after oil price rallied about USD60 per barrel, raising fears that the market could over-tighten and spur another spike in US shale output. OPEC's leader Saudi Arabia has signalled it wanted oil to trade at about USD60 per barrel as the kingdom is preparing to list its national oil champion Aramco and is still fighting a large fiscal deficit. (Source: Reuters) 4

5 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 11/28/ :00 GE Import Price Index MoM Oct 0.40% % -- 11/28/ :00 GE Import Price Index YoY Oct 2.50% % -- 11/28/ :30 SW Trade Balance Oct b -- 11/28/ :00 EC M3 Money Supply YoY Oct 5.10% % -- 11/28/ :00 BP Gross External Debt Sep b -- 11/28/ :30 US Advance Goods Trade Balance Oct -$64.9b -- -$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 3.20% % -- 11/29/ :30 US Personal Consumption 3Q S 2.50% % -- 11/29/ :30 US GDP Price Index 3Q S 2.20% % -- 11/30/ :50 JN Industrial Production MoM Oct P 1.80% % -- 11/30/ :50 JN Industrial Production YoY Oct P 7.10% % -- 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 CZ Money Supply M2 YoY Oct % -- 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% % -- 11/30/ :30 US PCE Deflator YoY Oct 1.50% % -- 11/30/ :30 US PCE Core MoM Oct 0.20% % -- 11/30/ :30 US PCE Core YoY Oct 1.40% % -- 11/30/ :45 US Chicago Purchasing Manager Nov /30/2017 BP Base Interest Rate Dec % -- 12/01/ :30 JN Nikkei Japan PMI Mfg Nov F /01/ :45 CH Caixin China PMI Mfg Nov /01/ :00 HU Trade Balance Sep F 928m m -- 12/01/ :30 SW Current Account Balance 3Q b -- 12/01/ :30 UK Markit UK PMI Manufacturing SA Nov /01/ :45 US Markit US Manufacturing PMI Nov F /01/ :00 US ISM Manufacturing Nov /01/ :00 US ISM Prices Paid Nov /01/ :00 US ISM New Orders Nov /01/ :00 US ISM Employment Nov /01/ /07 JN Official Reserve Assets Nov $1260.9b -- 12/04/ :30 UK Markit/CIPS UK Construction PMI Nov /04/ :00 DE Foreign Reserves Nov /04/ :00 DE Change in Currency Reserves Nov /05/ :30 JN Nikkei Japan PMI Services Nov /05/ :30 JN Nikkei Japan PMI Composite Nov /05/ :45 CH Caixin China PMI Composite Nov /05/ :45 CH Caixin China PMI Services Nov /05/ :00 SP Industrial Output NSA YoY Oct % -- 12/05/ :00 SP Industrial Output SA YoY Oct % -- 12/05/ :00 SP Industrial Production MoM Oct % -- 12/05/ :30 SW Industrial Production MoM Oct % -- 12/05/ :30 UK Markit/CIPS UK Services PMI Nov

6 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 ( 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 6