PP16795/03/2013(031743)

Transcription

1 Thursday, 25 May, 2017 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Research Team PP16795/03/2013(031743) Reports Published Results Review TSH Resources 1QFY17 (Inline): Earnings improved on higher ASP Results Review Hap Seng Plantations 1QFY17 (Inline): Banking on higher palm product prices Results Review TH Plantations 1QFY17 (Inline): Higher ASP boosted earnings Corporate News Economic News PetDag to sell its LPG business in the Philippines Hovid s results hit hard by production downtime DNeX's 1Q profit jumps 180% on improved earnings in core businesses Freight Management declares 1.5 sen dividend DRB-Hicom selling 49.9% stake in Proton to Geely Sarawak Cable unit secures RM81mil job US crude inventories slump amid near record refining US existing home sales fall as tight supply lifts prices Chinese demand for palm oil set to drop as buyers snap up alternative cargoes Bank of Canada holds rates, sees no cooling in housing yet Japan govt keeps its views of the economy unchanged in Mayrate again to aid recovery Bursa Malaysia KLCI Performance Close Change +/- Change % 1820 FBMKLCI 1, FBMEMAS 12, FBM100 12, FBMEMAS Shariah 12, FBM Hijrah Shariah 14, Volume (m) 3, Value (MYR m) 2, FBMKLCI YTD performance KLCI Year-End Target: 1,800 points Regional Indices Commodities (Last Close) Close Change +/- Change % YTD Change (%) Close Change +/- Change % DJIA 21, 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 25, Soybean Oil SHCOMP 3, KOSPI 2, Forex TWSE 10, (per USD) BIMB (YE Forecast) Close Change +/- Change % STI 3, MYR JCI 5, JPY SET 1, EUR PSEi 7, 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 3.54 Local Insti , KLIBOR 12-mth 3.63 Local Retail yr MGS 3.57 Foreign yr MGS 3.88 Total , , Performance of BIMB Stock Coverage Top Gainers Source: Bank Negara Malaysia Top Losers Source: The Sun, BIMB Securities Research Close Change +/- Change % Close Change +/- Change % Hartalega % WCT % Wah Seong % Westports % Eversendai % Benalec % MCT % Dayang Enterprise % Freight Management % UMW Oil & Gas % 2

3 CORPORATE NEWS PetDag to sell its LPG business in the Philippines PetDag is seeking to exit the liquefied petroleum gas (LPG) business in the Philippines. It was divesting its 100% interest in Petronas Philippines Energy Inc (PEPI) and 40% interest in Duta Inc to Phoenix Petroleum Philippines Inc. Duta Inc leases properties to PEPI, which in turn distributes and markets LPG and other petroleum products. PDB (Netherlands) BV, a wholly-owned subsidiary of PetDag, entered into a MoU with Phoenix Petroleum. The divestment to the Philippines largest independent oil company is, however, subject to approval by the Philippine Competition Commission. PetDag expected the transaction to be completed by the 4 th quarter of this year. (Source: StarBiz) Hovid s results hit hard by production downtime Hovid s bottom line appears to be hit much harder than the company had anticipated in January following the disruption in its manufacturing operations. The pharmaceutical and herbal product maker, whose manufacturing licences were revoked by the Health Ministry on Jan 9 due to non-compliance with the Current Good Manufacturing Practice, reported its 1 st quarterly loss in about 6 years in the January-March 2017 quarter. In January, Hovid had estimated about a RM2.7m drop in earnings (-0.33 sen per share) if manufacturing activities resumed only after March. However, according to its latest unaudited financial report, Hovid swung to a net loss of RM4.14m from earnings of RM1.48m in the same period of (Source: StarBiz) DNeX's 1Q profit jumps 180% on improved earnings in core businesses DNeX s net profit jumped 180% to RM15.08m in its 1QFY17, from RM5.37m in the previous year, mainly due to the group s transformation to strengthen its information technology, as well as oil and gas businesses. Earnings per share increased to 0.87 sen, from 0.69 sen in 1QFY16. The company improved earnings were mainly driven by OGPC Sdn Bhd's post-acquisition revenue, recurring income from operating and managing the Vehicle Entry Permit (VEP) and Road Charges (RC) System Project, as well as continued growth in its business-to-business (B2B) and business-to-government (B2G) business. (Source: The Edge) Freight Management declares 1.5 sen dividend Freight Management s net profit for the 3QFY17 grew by 4.6% to RM4.88m from RM4.66m a year ago on higher revenue achieved. The group reported a 13.2% increase in revenue to RM116.97m from RM103.32m a year ago, primarily from the growth in sea freight revenue, which rose 10%, and airfreight revenue, which climbed 47%. Freight Management declared a dividend of 1.5 sen per share, to be paid on July 28 to shareholders whose names are in the record of depositors by June 30. For the 9MFY17 ended March 31, Freight Management reported a 5.9% increase in net profit to RM15.2m, from RM14.35m a year ago. Accumulative revenue for 9MFY17 came in 9.2% higher at RM337.14m from RM308.63m in 9MFY16. (Source: The Edge) DRB-Hicom selling 49.9% stake in Proton to Geely DRB-Hicom is selling a 49.9% stake in wholly-owned Proton Holdings Bhd to China-based Zhejiang Geely Holding Group Co Ltd to rejuvenate Malaysia's national car manufacturer Proton. DRB-Hicom and Zhejiang Geely signed a heads of agreement in Putrajaya for the stake sale. DRB-Hicom expects to sign a definitive agreement with Zhejiang Geely this July. Under the deal, Proton would also sell a 51% stake in wholly-owned British car maker Lotus to Zhejiang Geely. The deal will enable Proton to tap into (Zhejiang) Geely Holding's vast range of platforms and powertrains, and will also enable Proton to have access to existing markets of the Chinese carmaker, as well as right-hand drive markets in south-east Asia (Source: The Edge) Sarawak Cable unit secures RM81mil job Sarawak Cable s wholly-owned subsidiary, Trenergy Infrastructure SB, has received a letter of acceptance from Tenaga Nasional Bhd for the installation of the double circuit 500kV overhead transmission line from Alor Gajah to Bahau South (Melaka). The project was valued at RM81.368m. The project is expected to contribute positively to the earnings and net assets of the Sarawak Cable group for the financial years ending Dec 31, 2017 to For its 1QFY17, the company s net profit increased 8.35% to RM3.87m on the back of a 30.9% drop in revenue to RM251.85m. The higher net profit was due to better demand for the power and communications cable. (Source: StarBiz) 3

4 ECONOMIC NEWS US crude inventories slump amid near record refining US crude oil inventories fell for the seventh straight week as refiners processed a near record amount of crude last week, even as gasoline and distillate stockpiles also dipped. Crude inventories fell 4.4m barrels in the week ended May 19, more than analysts' forecasts of a 2.4m-barrels decline. At 516.3m barrels, US crude inventories were the smallest since mid-february, a sign that OPEC's efforts to reduce world supply are starting to have an effect in the US, the world's largest oil consumer. The data comes one day before the OPEC, along with non-member nations, are scheduled to decide whether to extend its agreement to cut world supply, an effort that has only recently started to bear fruit in global inventory figures. Refinery crude runs rose 159,000 barrels/day to m bpd last week, the 2 nd highest volume of crude processed since the EIA began collecting the data in The record volume was m bpd in late April. (Source: Reuters) US existing home sales fall as tight supply lifts prices US home resales fell more than expected in April, weighed down by a chronic shortage of houses on the market that is keeping prices elevated and sidelining prospective buyers. The existing home sales declined 2.3% to a seasonally-adjusted annual rate of 5.57m units last month. Despite the decline, April's sales pace was the fourth highest over the past 12 months. March's sales pace was revised down to 5.70m units, which was still the highest level since February 2007, from the previously reported 5.71m units. Economists had forecast sales falling 1.1% to a 5.65m-unit rate. Sales were up 1.6% from April 2016, also underscoring the housing market's underlying strength. While the number of homes on the market rose 7.2% to 1.93m units last month, supply was down 9.0% from a year ago. Housing inventory has dropped for 23 straight months on a yoy basis.. (Source: Reuters) Chinese demand for palm oil set to drop as buyers snap up alternative cargoes Palm oil demand from China, the world's No.2 importer of the commodity, is set to drop in coming months as supplies of alternative edible oils flood local markets, industry sources said. Sluggish Chinese appetite for palm oil, used in everything from preparing food to churning out biofuel, could pile further pressure on benchmark prices that have shed 15% since the start of the year due to expectations for rising output. The number of cargoes to China for June to August is very low... badly below normal, maybe less than 100,000 tonnes a month. The country imported over 200,000 tonnes of palm last June, with shipments typically sent from top producers Indonesia and Malaysia. The drop comes as alternative edible oils pour into Chinese markets, with the country selling rapeseed oil from national stockpiles and soybean crushing volumes shooting up. (Source: Reuters) Bank of Canada holds rates, sees no cooling in housing yet The Bank of Canada held interest rates steady on Wednesday, as expected, saying that while economic growth was likely to moderate in the 2Q, government measures to rein in the housing market have not yet had a substantial effect. The excess capacity remains in the economy and wage growth is subdued, but noted strong spending by Canadians along with a housing boom and job growth. Consumer spending and the housing sector continue to be robust on the back of an improving labor market, and these are becoming more broadly based across regions. While it kept the benchmark interest rate at 0.50% as expected, the statement's tone suggested a slight shift in stance towards eventual interest rate increases, which most market-watchers do not expect until (Source: Reuters) Japan govt keeps its views of the economy unchanged in May Japan's government has kept unchanged for May its overall assessment of the economy that it is recovering gradually, though pockets of weakness remain. On all topics evaluated, which include household spending, capital expenditure and exports, the government repeated the views it expressed for April. The economy is in moderate recovery, but delays in improvement can be seen in some parts, using the same expression for the 6 th consecutive month. apan's economy has shown signs of life in recent months, with exports and factory output benefiting from a recovery in global demand. Business sentiment is improving, consumer spending is continuing to recover on the whole, capital expenditure is showing signs of picking up and exports are recovering, the Cabinet Office said in its report (Source: Reuters) 4

5 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 05/25/ :00 US FOMC Meeting Minutes 3-May /25/ :00 CH Swift Global Payments CNY Apr % -- 05/25/ :00 IT Industrial Orders MoM Mar % -- 05/25/ :00 IT Industrial Orders NSA YoY Mar % -- 05/25/ :00 IT Industrial Sales MoM Mar % -- 05/25/ :00 IT Industrial Sales WDA YoY Mar % -- 05/25/ :30 UK GDP QoQ 1Q P 0.30% % -- 05/25/ :30 UK GDP YoY 1Q P 2.10% % -- 05/25/ :30 UK Private Consumption QoQ 1Q P 0.30% % -- 05/25/ :30 UK Government Spending QoQ 1Q P 0.40% % -- 05/25/ :30 US Advance Goods Trade Balance Apr -$64.5b -- -$64.8b -$64.2b 05/26/ :00 BP Gross External Debt Mar b -- 05/26/ :30 US GDP Annualized QoQ 1Q S 0.90% % -- 05/26/ :30 US Personal Consumption 1Q S 0.40% % -- 05/26/ :30 US GDP Price Index 1Q S 2.30% % -- 05/27/ :30 CH Industrial Profits YoY Apr % -- 05/29/ :30 SW Trade Balance Apr b -- 05/29/ :00 EC M3 Money Supply YoY Apr % -- 05/29/ /30 GE Import Price Index MoM Apr 0.10% % -- 05/29/ /30 GE Import Price Index YoY Apr 6.30% % -- 05/30/ :00 PO Industrial Production MoM Apr % -- 05/30/ :00 PO Industrial Production YoY Apr % -- 05/30/ :30 US PCE Deflator MoM Apr 0.20% % -- 05/30/ :30 US PCE Deflator YoY Apr 1.70% % -- 05/30/ :30 US PCE Core MoM Apr 0.10% % -- 05/30/ :30 US PCE Core YoY Apr 1.50% % -- 05/31/ :50 JN Industrial Production MoM Apr P % -- 05/31/ :50 JN Industrial Production YoY Apr P % -- 05/31/ :00 CH Manufacturing PMI May /31/ :00 CH Non-manufacturing PMI May /31/ :00 JN Construction Orders YoY Apr % -- 05/31/ :00 FI Trade Balance Mar F m -- 05/31/ :00 SP Current Account Balance Mar b -- 05/31/ :00 CZ Money Supply M2 YoY Apr % -- 05/31/ :30 UK Money Supply M4 MoM Apr % -- 05/31/ :30 UK M4 Money Supply YoY Apr % -- 05/31/ :45 US Chicago Purchasing Manager May /31/2017 BP Base Interest Rate Jun % -- 06/01/ :30 JN Nikkei Japan PMI Mfg May F /01/ :45 CH Caixin China PMI Mfg May /01/ :00 HU Trade Balance Mar F m -- 06/01/ :30 UK Markit UK PMI Manufacturing SA May /01/ :45 US Markit US Manufacturing PMI May F /01/ :00 US ISM Manufacturing May /01/ :00 US ISM Prices Paid May /01/ :00 US ISM New Orders May /01/ :00 US ISM Employment May /01/ /07 JN Official Reserve Assets May $1242.3b -- 06/02/ :30 SW Current Account Balance 1Q b -- 06/02/ :30 UK Markit/CIPS UK Construction PMI May /02/ :30 US Trade Balance Apr -$44.0b -- -$43.7b -- 06/02/ :00 DE Foreign Reserves May /02/ :00 DE Change in Currency Reserves May b -- 06/03/ /08 IR Industrial Production MoM Apr %

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