PP16795/03/2013(031743) Nov-16

Transcription

1 Tuesday, 7 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 research@bimbsec.com.my PP16795/03/2013(031743) Corporate News DNeX group bags encryption job for RFID tags for foreign-registered vehicles IJM to construct HSBC office for RM392m UMWOG inks revolving credit facilities for USD550m Eversendai wins RM180m project, earns 9COM certification from Saudi Aramco CCB slips into the red in 3Q following losses in retail ops PIE 3Q earnings fall 59% on higher provision for doubtful debts, lower forex gain Bursa Malaysia Close Chg +/- Chg % YTD Chg (%) FBMKLCI 1, FBMEMAS 12, FBM100 12, FBMEMAS Shariah 13, FBM Hijrah Shariah 14, Volume (m) 3, Value (MYR m) 2, Economic News MITI: Malaysia invested RM225bn overseas between 2012 and 2016 e-commerce in 2015 dominated by local market - Department of Statistics Head of US government financial agency to resign Euro zone growth lost momentum in Oct but stayed strong: PMI Indonesia 3Q growth barely tops 5% as consumption stays sluggish 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 28, 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 Market Insight % 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 3.71 Foreign yr MGS 4.00 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 % MCT % GHL Systems % Padini % Petronas Dagangan % Top Glove % Petronas Gas % FGV % Ikhmas Jaya % IOI Corp % Hua Yang % 2

3 CORPORATE NEWS DNeX group bags encryption job for RFID tags for foreign-registered vehicles DNeX RFID has been awarded a total subcontract to supply radio frequency identification (RFID) vehicle entry permit (VEP) tag for foreign-registered vehicles. The latest subcontract, given by main contractor TCSens SB, involves DNeX RFID being responsible for hardware, software and systems related to encryption tools and encryption system for the issuance of the RFID VEP tag. DNeX s RFID solutions subsidiary would charge RM15 for each RFID VEP tag issued. However, it did not give any estimate on the subcontract s value. DNeX is currently operating and managing the VEP and road charges (RC) system project that involves foreign-registered vehicles entering Malaysia via Johor, namely Kompleks Sultan Abu Bakar in Tanjung Kupang and Bangunan Sultan Iskandar in Johor Baru. (Source: StarBiz) IJM to construct HSBC office for RM392m IJM is constructing an office building for HSBC Bank Malaysia in Kuala Lumpur city centre, at a contract sum of approximately RM392m. Its subsidiary IJM Construction was appointed by HSBC as the contractor for design, construction and completion works of the office building on Jalan Tun Razak. Under the agreement signed, the contract sum does not include lifts and façade works, which will be procured directly by HSBC. The completion of the project is 37.5 months, and is expected to be handed over to HSBC by December It is worth noting that deputy non-executive chairman of IJM, Tan Sri Krishnan Tan Boon Seng is the independent chairman at HSBC Bank Malaysia Bhd. (Source: The Edge) UMWOG inks revolving credit facilities for USD550m UMWOG has via its units Sumber Ribu SB and Sumber Wang (L) Ltd, entered into revolving credit facilities for the refinancing of existing working capital and similar debts and expenses related to the facilities. The agreement with Sumber Ribu was for a USD110m Commodity Murabahah Revolving Credit Facility-i and an RM110m Commodity Murabahah Revolving Credit Facility-i, with an option to upsize the latter facility by RM90m. UMWOG also inked an agreement with Sumber Ribu for a USD47m USD Islamic Trade Facility and a conventional USD facility of RM15m to be used for its working capital and hedging arrangements. The tenure of the revolving facilities is for a tenure of up to 10 years, comprising an initial firm period of 3 years and subject to annual renewal thereafter. (Source: The Edge) Eversendai wins RM180m project, earns 9COM certification from Saudi Aramco Eversendai has become the 1st Malaysian company to work on a Saudi Aramco offshore fabrication project with its new win of a RM180m project, while it also has recently been certified with the Saudi Aramco 9com certification that allows it to execute Saudi Aramco projects. The group s wholly-owned unit, Eversendai Offshore RMC FZE in the UAE, has been awarded the offshore fabrication project for Saudi Aramco, which is a mixed-used development projec, comprising commercial, retail cultural and entertainment areas in Doha, a bank headquarters building in Dubai, as well as jackets for Saipem in the Kingdom of Saudi Arabia. With the 9com certification, the group is able to execute Saudi Aramco projects which are open only to prequalified and approved companies that fulfill highly stringent requirements by Saudi Aramco. (Source: The Edge) CCB slips into the red in 3Q following losses in retail ops CCB slipped into the red in the 3QFY17, posting a net loss of RM3.26m, compared to a net profit of RM8.29m in the same period a year ago, due to losses in its retail operations. Quarterly revenue dropped 12.79% to RM331.61m from RM380.26m on difficult trading conditions that led to reduction in unit sales and earnings. For the 9MFY17, CCB s net profit plunged 83.94% to RM6.02m, from RM37.46m a year ago. Revenue fell 7% to RM1.04bn from RM1.12bn. Reviewing the YTD operations, the trading of Mercedes-Benz cars recorded a loss of RM5.2m, compared with a profit of RM26.3m in the previous year. Going forward, with little improvement in the trading environment expected, the last quarter of the year will remain very challenging. (Source: The Edge) PIE 3Q earnings fall 59% on higher provision for doubtful debts, lower forex gain PIE s net profit for the 3QFY17 fell by 59.4% to RM1.9m, from RM4.6m a year earlier, mainly due to higher provision for doubtful debts and lower gain from foreign currency exchange translation. The decrease was partly offset by higher achieved revenue, lower operating costs and higher income from scrap sales. One of its major customers of its electronic manufacturing activities (EMS) segment had changed its receiving system in March and this resulted in a technical glitch and the customer was unable to process its payments to the group. Moving forward, orders for EMS activities are expected to increase steadily from existing customers and potential customers, through its fully built-up vertical integrated manufacturing facilities, which have been in operation for the past 5 years. (Source: The Edge) 3

4 ECONOMIC NEWS MITI: Malaysia invested RM225bn overseas between 2012 and 2016 Malaysian direct investment overseas reached RM225.22bn between 2012 and Malaysian investment in the US reached RM67bn as at end-2016 in sectors like equity, innovation and technology, sales and marketing, manufacturing, hospitality and entertainment. Malaysian investments into 7 main EU countries UK, Germany, France, Netherlands, Belgium, Italy and Spain totaled RM127.9bn in the same period, mainly in sectors like utility, property, oil and gas, and palm oil and rubber. Meanwhile, Malaysian investment in China amounted to USD7.5bn (RM33bn), and were in industries like desalination of sea water, sea port operation, hospitality, manufacturing, retailing, property, water treatment plant, education, finance and insurance. (Source: The Edge) E-Commerce in 2015 dominated by local market - Department of Statistics The income of e-commerce in Malaysia in 2015 was dominated by the local market with RM356.9bn or 89.6% of the total income from e-commerce, compared with the international market with RM41.3bn. The highest e-commerce income by type of customers was obtained through Business to Business (B2B) which was RM315.2bn with share amounting to 79.2%. This was followed by Business to Consumer (B2C) amounting to RM73.8bn (18.5%) and Business to Government (B2G) of RM9.2bn (2.3%). The economic census that was undertaken in 2016 for reference year 2015 further revealed that a total of RM195.1bn was spent on e-commerce with 89.2% in the local market and 10.8% in the international market. (Source: The Edge) Head of US government financial agency to resign Richard Berner, director of the Office of Financial Research (OFR), will be leaving that agency on Dec. 31, the Treasury Department announced on Monday. Berner helped create the agency as a Treasury official under President Barack Obama, and has led it since its creation in The Treasury did not say who would replace Berner, but his exit gives President Donald Trump another opportunity to shift government watchdogs in a more industry-friendly direction. Berner helped establish the agency as a Treasury Department official before becoming its first and only director. He is leaving roughly one year before his current term expires in January A full-time replacement would need to be nominated by Trump and confirmed by the Senate. (Source: Reuters) Euro zone growth lost momentum in Oct but stayed strong: PMI The euro zone s economy lost some energy last month but growth remained strong and firms were able to pass on more of their costs to consumers as pricing power increased. IHS Markit s final composite PMI for the euro zone fell to 56.0 last month from September s 56.7, pipping an earlier flash estimate of 55.9 and comfortably above the 50 mark that separates growth from contraction. The euro zone growth spurt retained strong momentum at the start of the 4Q. With new business growth ticking higher, November should also prove a good month for business activity. The PMIs point to euro zone economic growth of 0.6%-0.7% in the closing quarter of New orders growth accelerated despite firms increasing their prices at the joint fastest rate since the middle of The output price index rose to a 7-month high of 53.1, from (Source: Reuters) Indonesia 3Q growth barely tops 5% as consumption stays sluggish Indonesia's economy grew slightly slower than expected in the 3Q, as private consumption continued to flatline, confounding efforts by policymakers to push the growth rate much above 5%. Southeast Asia's largest economy expanded 5.06% in July-September from a year earlier, compared with 5.01% in both the 1Q and 2Q. Indonesia's growth has stagnated at around 5% since the 4Q14 as private consumption, which accounts for about half of gross domestic product, has remained sluggish. Private consumption grew 4.93% in the 3Q from a year earlier, a fraction below the 2Q's 4.95% pace. On a positive note, government spending grew 3.46% in the 3Q, picking up pace after a near 2% annual contraction in April-June. (Source: Reuters) 4

5 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 11/07/ :00 DE Industrial Production MoM Sep % -- 11/07/ :00 GE Industrial Production SA MoM Sep -0.90% % -- 11/07/ :00 GE Industrial Production WDA YoY Sep 4.50% % -- 11/07/ :00 FI Trade Balance Sep P m -- 11/07/ :00 LN International Reserves Oct m -- 11/07/ :00 PD Official Reserves Oct /07/ :30 SW Riksbank's Skingsley Gives Speech 11/07/2017 CH Foreign Reserves Oct $3110.0b -- $3108.5b -- 11/07/2017 RO Interest Rate Announcement Nov % % -- 11/08/ :50 JN Official Reserve Assets Oct $1266.3b -- 11/08/ :45 FR Trade Balance Sep -4680m m -- 11/08/ :45 FR Current Account Balance Sep b -- 11/08/ :00 SP Industrial Output NSA YoY Sep % -- 11/08/ :00 SP Industrial Output SA YoY Sep 3.10% % -- 11/08/ :00 SP Industrial Production MoM Sep -0.20% % -- 11/08/ :00 HU Trade Balance Sep P 838m m -- 11/08/2017 PD Poland Base Rate Announcement Nov % % -- 11/08/2017 CH Imports YoY Oct 17.00% % 18.60% 11/08/2017 CH Exports YoY Oct 7.20% % -- 11/08/2017 CH Trade Balance Oct $39.10b -- $28.50b $28.61b 11/08/2017 CH Exports YoY CNY Oct 7.00% % -- 11/08/2017 CH Imports YoY CNY Oct 17.50% % -- 11/08/2017 CH Trade Balance CNY Oct b b -- 11/09/ :50 JN Core Machine Orders MoM Sep -2.00% % -- 11/09/ :50 JN Core Machine Orders YoY Sep 2.00% % -- 11/09/ :50 JN BoP Current Account Balance Sep b b -- 11/09/ :50 JN BoP Current Account Adjusted Sep b b b 11/09/ :50 JN Trade Balance BoP Basis Sep 832.5b b -- 11/09/ :30 NE Manufacturing Production MoM Sep % -- 11/09/ :30 NE Manufacturing Production YoY Sep % -- 11/09/ :30 NE Industrial Sales YoY Sep % -- 11/09/ :00 DE Current Account (Seasonally Adjusted) Sep b -- 11/09/ :00 GE Trade Balance Sep 22.3b b 20.1b 11/09/ :00 GE Current Account Balance Sep 23.5b b -- 11/09/ :00 GE Exports SA MoM Sep -1.30% % 2.90% 11/09/ :00 GE Imports SA MoM Sep 0.30% % 1.10% 11/09/ :00 SO Trade Balance Sep m -- 11/09/ :00 LN Trade Balance Sep b -- 11/09/ :00 GR Industrial Production YoY Sep % -- 11/09/ :00 PO Trade Balance Sep m -- 11/10/ :50 JN Money Stock M2 YoY Oct 4.10% % -- 11/10/ :50 JN Money Stock M3 YoY Oct 3.40% % -- 11/10/ :00 FI Industrial Production MoM Sep % -- 11/10/ :00 FI Industrial Production WDA YoY Sep % -- 11/10/ :45 FR Industrial Production MoM Sep 0.50% % -- 11/10/ :45 FR Industrial Production YoY Sep 3.00% % -- 11/10/ :45 FR Manufacturing Production MoM Sep 0.80% % -- 11/10/ :45 FR Manufacturing Production YoY Sep 3.40% % -- 11/10/ :00 SO Construction Constant YoY Sep % -- 11/10/ :00 IT Industrial Production NSA YoY Sep %

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