PP16795/03/2013(031743)

Transcription

1 Wednesday, 29 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: IJM Plantation 2Q18 (Below); Disappointing results; TP: RM 2.95 (Hold) Results Review: Hibiscus Petroleum 1Q18 (In-line) ; Buying opportunity; TP: RM 0.85 (Buy) Results Review: Dutch Lady 3Q17 (In-line) ; Slightly better quarter; TP: RM (Hold) Results Review: MCT 1Q18 (Mids Cap); Rest awaiting new launches; TP: RM 0.81 (Hold) Corporate News Economic News IJM Corp's 2Q net profit falls 32.4%, declares 3 sen dividend Higher expenses, finance costs weigh on UEM Edgenta's 3Q earnings Mitrajaya 3Q net profit falls 21% on lower construction revenue Compugates in JV for RM775m mixed development in Dengkil Advancecon bags RM75.5m contract to undertake infrastructure works on SKVE Kumpulan Powernet signs MoU with Angkatan Koperasi to develop affordable housing project US goods trade deficit widens in October, inventories fall China to set up system to monitor its firms overseas India's govt wants RBI rate cut before March OECD sees growth peaking as investment lags and debt builds Indonesia CB plans new rules to improve loan, liquidity Egypt CB scraps FX restrictions for importers Tough OPEC meeting looms amid spectre of oil deficit 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) 1, 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 3.64 Foreign yr MGS 3.95 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 % Prestariang % Supermax % Ikhmas Jaya % IJM Plantations % Digi % IJM Corp % Kawan Food % Malakoff % Hartalega % PetGas % 2

3 CORPORATE NEWS IJM Corp's 2Q net profit falls 32.4%, declares 3 sen dividend IJM Corporation s 2Q net profit fell 32.4% to RM110.9m or 3.06 sen per share, from RM163.9m or 4.55 sen a share a year ago, on a lower contribution from the manufacturing and quarrying, and plantation divisions. The decline was also due to the non-recurrence of a one-off gain of RM27.9m that was contributed by an associate previously. Earnings for the quarter ended Sept 30, 2017 were further compounded by a net unrealised foreign exchange loss of RM400,000, as compared to a gain of RM16.7m previously. Revenue for the quarter rose 7.2% to RM1.59bn from RM1.49bn previously. Its construction division saw a 19.2% increase in revenue to RM664.3m as the progress of construction works at certain major infrastructure projects continued its uptrend. This was further supplemented by the progress achieved by projects that were secured in the previous financial year. (Source: The Edge) Higher expenses, finance costs weigh on UEM Edgenta's 3Q earnings UEM Edgenta s net profit for its 3QFY17 fell 24% yoy to RM38.72m from RM51.11m, as it incurred higher expenses and finance costs. The expenses grew 34% yoy to RM57.55m from RM42.96m, while finance costs jumped near 5 times yoy to RM13.41m from RM2.74m. Earnings were also impacted by lower share of results of associates, which slipped 22% yoy to RM3.28m from RM4.22m. Quarterly revenue climbed 40% yoy to RM523.11m from RM373.44m, though this was mostly offset by a 50% rise in cost of sales to RM437.83m from RM291.24m. For the first (9MFY17, net profit jumped 47% yoy to RM93.38m from RM63.57m, as revenue grew 36% to RM1.45bn from RM1.07bn. (Source: The Edge) Mitrajaya 3Q net profit falls 21% on lower construction revenue Mitrajaya Holding Bhd s net profit fell 21.04% to RM21.24m or 3.11sen per share for the 3QFY17, from RM26.9m or 4.17 sen per share a year earlier, on lower contribution from its construction division. Pre-tax profit for the construction segment fell 64.4% to RM9.84m from RM27.64m. The group s revenue for the quarter grew to RM299.01m, up 18.93% compared with RM251.41m a year ago. For the cumulative nine-month period, net profit fell 15.73% to RM63.19m or 9.37sen per share, from RM74.98m or sen per share a year ago. Revenue rose 29.24% to RM894.91m from RM692.46m. (Source: The Edge) Compugates in JV for RM775m mixed development in Dengkil Compugates s wholly-owned unit Compugates Development and Mining SB (CDMSB) will jointly develop a 25.09ha agriculture land in Dengkil, Selangor, with Jade Classic SB. CDMSB has entered into a conditional joint venture agreement with Jade Classic to undertake a potential mixed development on the land. The land is proposed to be developed into a mixed development, subject to the approval of the authorities, comprising 500 houses, 1,100 Rumah Selangorku homes and 4 blocks of 600 units of high rise mixed residential and commercial units. The estimated GDV of the project is RM775m. The project cost is estimated at RM592m and the development profit at RM183m, adding that the development cost for the project is expected to be funded via combination of internally generated funds, bank borrowings and sales of units. (Source: The Edge) Advancecon bags RM75.5m contract to undertake infrastructure works on SKVE Advancecon has won a RM75.5m contract to carry out earthworks and infrastructure works on the South Klang Valley Expressway (SKVE). The contract was awarded by SKVE Holdings SB to its subsidiary Advancecon Infra SB. As the main contractor, Advancecon Infra would undertake site clearance, soil treatment works, drainage works, and general infrastructure works for SKVE. The 2 year contract is expected to contribute positively to the group's FY17 to FY19. The contract brings the group s total new wins YTD to RM170.8m, and boosts Advancecon s current order book to RM603.4m, to be fulfilled over the next 2 to 3 years. They appointment as the main contractor for the earthworks portion recognises their expertise in their field, and reinforces their aim to move up the value chain in the construction-related sector. (Source: The Edge) Kumpulan Powernet signs MoU with Angkatan Koperasi to develop affordable housing project Kumpulan Powernet is teaming up with Angkatan Koperasi Kebangsaan Malaysia to jointly develop an affordable housing project at a location yet to be identified. Kumpulan Powernet believes that the collaboration will give the group an advantageous platform for further benefit and better prospect in the future. Kumpulan Powernet said its wholly-owned subsidiary Powernet Properties has entered into a MoU with Angkatan Koperasi's unit MyAngkasa Bina for the purpose. The affordable home project will comprise 30,000 units including landed housing and apartments. The development of the project will be divided into three phases, with the proposed selling price per unit being up to RM300,000. (Source: The Edge) 3

4 ECONOMIC NEWS US goods trade deficit widens in October, inventories fall The US goods trade deficit increased sharply in October and inventories declined broadly, which could temper expectations of strong economic growth in the 4Q. The goods trade gap jumped 6.5% to USD68.3bn last month amid an increase in imports of industrial supplies, consumer and other goods. Exports fell 1.0%, weighed down by decreasing shipments of food, motor vehicles, capital and consumer goods. The government will publish its comprehensive trade report, which includes services. The wholesale inventories fell 0.4% in October after edging up 0.1% in September. Retail inventories slipped 0.1% after declining 0.9% in September. (Source: Reuters) China to set up system to monitor its firms overseas China's state planner issued guidelines for monitoring the overseas activities of Chinese firms and individuals to prevent tax fraud, money laundering, illegal financing, and activities damaging to the country's reputation. The National Development and Reform Commission (NDRC) warned that the government will record and tally instances of laws and regulations being broken in China or abroad, and offenders would be punished. The plan is part of efforts to regulate firms' overseas investments and business activities as China's influence in the global economy grows, especially through its Belt and Road initiative. In addition to illegal activities, the guidelines highlights that violation of the international conventions and UN resolutions, or disruption of foreign economic cooperation that adversely impact the OBOR initiative, or harm China's reputation will be recorded. (Source: Reuters) India's govt wants RBI rate cut before March Impatient for faster economic growth, India's government is lobbying for a reduction in official interest rates in coming months as it expects inflation to stay close to a 4% target. The Monetary Policy Committee (MPC) left the repo rate at 6.0%, near a 7 year low, economists expected the rate to stay there through to the 2Q of next year. The finance ministry wants a rate cut sooner than that. We expect the RBI to cut policy rates, if not in December then in its next policy review. (Source: Reuters) OECD sees growth peaking as investment lags and debt builds Global economic growth is set to peak at an 8 year high next year as uninspiring investment and increasingly dangerous debt levels limit room for further improvement. The global economy is on course to grow 3.6% this year before reaching 3.7% next year then ease back to 3.6% in The Paris-based policy forum nudged up its estimate for this year from 3.5% in its last forecasts dating from September, and left its 2018 projection unchanged. (Source: Reuters) Indonesia CB plans new rules to improve loan, liquidity Indonesia's CB is seeking to improve credit distributions by banks and improve their liquidity management. Bank Indonesia (BI) plans to expand the implementation of reserve requirement for Islamic banks, as well as reserve requirements for foreign currency denominated deposits. It will be expanded from currently conventional banks and rupiah denominated deposits. BI plans to implement a new measure called macroprudential intermediation ratio to gauge wider liquidity. It could include wider distribution of financing, such as corporate bonds bought by banks. The governor did not share details on when the rules will be issued. (Source: Reuters) Egypt CB scraps FX restrictions for importers Egypt's central bank removed caps on deposits and withdrawals of foreign currency for importers, lifting one of the last currency controls in place since a 2011 uprising. The move is another sign bank liquidity is improving as a result of Egypt's USD12bn 3 year IMF programme and a currency flotation that halved the pound's value and helped crush the black market for dollars. Egypt imposed strict controls on the movement of hard currency as the 2011 uprising drove away tourists and foreign investors, key sources of foreign currency, forcing importers to rely on a more expensive black market for dollars. In 2012, it limited deposits to USD10,000 per day and USD50,000 per month and set a USD30,000 per day withdrawal limit for importers of non-essential goods. (Source: Reuters) Tough OPEC meeting looms amid spectre of oil deficit OPEC is heading for tougher-than-expected policy talks amid concern that its efforts to rebalance the oil market might overshoot by creating a global deficit and spurring a further price rally. OPEC, Russia and 9 other producers are cutting oil output by about 1.8m bpd until March The market had largely expected OPEC to prolong cuts until the end of 2018 but doubts have emerged in the last few days. OPEC's leader Saudi Arabia has signalled that it wants oil to trade at about USD60 per barrel as the kingdom prepares to list shares in 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% 0.60% 0.90% -- 11/28/ :00 GE Import Price Index YoY Oct 2.50% 2.60% 3.00% -- 11/28/ :30 SW Trade Balance Oct b 2.6b 3.2b 11/28/ :00 EC M3 Money Supply YoY Oct 5.10% 5.00% 5.10% 5.20% 11/28/ :21 BP Gross External Debt Sep b 33.1b 32.9b 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 SW Industrial Production NSA YoY Oct %

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