PP16795/03/2013(031743)

Transcription

1 Monday, 4 December, 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) Reports Published Results Review: Suria Capital 3Q17 (Below): Impacted by higher operating costs; TP: RM 2.00 (Hold) Corporate News Economic News DRB-Hicom expects better performance in FY18 after 2Q gains Hengyuan Refining posts 'outstanding' 3Q on improved margins; says Euro 4M Mogas plant delayed IWCity sees 2nd straight profitable quarter with Johor land sale BIMB's 3Q profit up 30.5%, declares 14 sen dividend Iris gains from associates' share of profits in 2Q Malaysia monthly trade surplus likely widened to RM8.9b in October Europe Set to Award China `Holy Grail' With Tariff-Rules Revamp U.S. tax bill, Russian probe whipsaw financial markets China's debt crackdown hits cash loan firms US consumer spending moderates in October, inflation firming U.S. oil steady after OPEC extension of production cut Bursa Malaysia KLCI Performance Close Chg +/- Chg % YTD Chg (%) 1820 FBMKLCI 1, FBMEMAS 12, FBM100 12, FBMEMAS Shariah 12, FBM Hijrah Shariah 14, Volume (m) 2, Value (MYR m) 6, , KLCI Year-End Target: 1,790 points Regional Indices Commodities (Last Close) Close Chg +/- Chg % YTD Chg (%) Close Chg +/- Chg % DJIA 24, 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 Close 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 3.60 Foreign , , yr MGS 3.89 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) Prestariang % Local Insti , , Eco World Development % Local Retail , , Ql Resources % Foreign , , My Eg Services % Total , , Nestle % Top Losers Close Chg +/- Chg % KPJ Healthcare % Hibiscus Petroleum % Kossan % GHL Systems % TH Plantations % Source: The Sun, BIMB Securities Research 2

3 CORPORATE NEWS DRB-Hicom expects better performance in FY18 after 2Q gains DRB-Hicom Bhd has returned to the black after two quarters of losses, posting a net profit of RM736.57m in the second financial quarter ended 2QFY18, compared with a net loss of RM309.63m a year ago.the improvement in its financial results to recognition of a research and development grant and better financial performance of its operating companies.however, the loss on disposal of Lotus Advance Technologies Sdn Bhd reduced the overall profits.it posted an earnings per share of 38.1sen in 2QFY18, compared with a loss per share of 16.02sen in 2QFY17. Quarterly revenue rose 26.4% to RM3.34bn, from RM2.64bn in 2QFY17, mainly contributed by higher revenue from the services sector, as well as its property, asset and construction sectors. (Source: The Edge) Hengyuan Refining posts 'outstanding' 3Q on improved margins; says Euro 4M Mogas plant delayed Hengyuan Refining Company Bhd turned around in its 3QFY17 ended with a net profit of RM361.78m, compared to a net loss of RM80.86m a year ago, as it enjoyed better refining margins. The gradual recovery of traded crude prices also resulted in a stockholding gain. With the ringgit strengthening against the US dollar, foreign currency exchange gains were recorded for ringgit-denominated revenues. Revenue grew 50% to RM2.96bn from RM1.96bn. Revenue exceeded market expectations for 3QFY17 against the same period last year due to an unforeseen spike in the average prices of market traded refined products, following unplanned production outages caused by hurricanes in the Gulf of Mexico and a fire incident reported in a world-scale European refinery. The company also achieved additional sales of 0.6m barrels in the current quarter, complemented by improve. Net profit in its first 9MFY17, jumped 5.6 times y-o-y to RM725.67m from RM127.46m, as average refining margin doubled to US$8 per barrel from US$4 per barrel (Source: The Edge) IWCity sees 2nd straight profitable quarter with Johor land sale IWCity announced a second consecutive profitable quarter with a net profit of RM89.61m booked in the three months ended 3QFY17, due to gain from a sale of land in Johor. Lot 1A is part of three pieces of land measuring some 128 acres in Mukim Plentong, Johor, held by its wholly-owned subsidiary, Tebrau Bay Sdn Bhd, to be disposed of to GTSB for RM2.37bn. As such, the sector returned to black with a profit before tax of RM143.8m as opposed to a loss of RM3.5m. In contrast, revenue at its construction sector slumped 75% on lower work done as certain projects reached completion. This led to a higher loss before tax of RM1.59m from RM778,000. (Source: The Edge) BIMB's 3Q profit up 30.5%, declares 14 sen dividend BIMB Holdings Bhd's net profit in the 3QFY17 rose 30.5% to RM183.43m from RM140.61m, mainly due to net write-back of allowances for impairment against a net allowance charged for impairment in the corresponding quarter in FY16. BIMB said profit before zakat and tax (PBZT) climbed 19.3% year-on-year to RM270.8m from 3QFY16's RM226.9m. Quarterly revenue came in at RM912.74m, climbing 4.4% y-o-y from RM874.54m. For 3QFY17, Bank Islam Malaysia Bhd achieved a PBZT of RM223.5m, rising by RM41.7m or 23% from RM181.8m in the same period a year earlier. The increase in PBZT was mainly contributed by a net allowance for impairment on financing and advances recovered of RM43.8m, as compared to a net allowance charged of RM22.2m 3QFY16. (Source: The Edge) Iris gains from associates' share of profits in 2Q Iris Corp Bhd s net loss in the quarter ended 2QFY18 narrowed by 31% to RM14.68m, from RM21.29m a year ago, as the group recorded a share of profits of associates, compared with a share of losses in 2QFY17. Iris recorded a share of profits totalling RM819,000. In comparison, it incurred a share of losses amounting to RM6.79m in 2QFY17. Quarterly revenue was 27.7% higher at RM112.27m for 2QFY18, as compared with RM87.93m a year earlier. Iris Trusted Identification division posted higher revenue of RM105.7m in 2QFY18, versus RM79.2m a year earlier, representing a growth of 33.5%. The increase was mainly attributed to higher delivery of Senegal eid cards and Nigeria epassports in 2QFY18. Meanwhile, revenue from the group s Sustainable Development segment was insignificant, due to completion of most of its Rimbunan Kaseh and Sentuhan Kasih projects. As per the Corporate Restructuring Plan (CRP), the group has started the divestments of its property development projects overseas. (Source: The Edge) 3

4 ECONOMIC NEWS Malaysia monthly trade surplus likely widened to RM8.9b in October Malaysia's monthly trade surplus likely widened to RM8.9bn in October, from an RM8.6bn surplus in September, according to Moody s Analytics Asia Pacific Economic Preview for the week of Dec 4 Dec 9. Moody s Analytics said exports continue performing well, with tech products the main bright spot on account of the economy's large integrated circuit sector. It said palm oil shipments have likely started to come under pressure from La Niña, which formed in October and usually lasts until March. It typically brings heavier than usual rainfall which could hurt cultivation and shipments. After slumping in the first half of 2017, palm oil futures have rebounded on disappointing production growth and could be under further pressure as La Niña kicks in. (Source: The Edge) Europe Set to Award China `Holy Grail' With Tariff-Rules Revamp European industries from steel to solar are bracing for a new set of tariff rules that may make it harder to fend off low-cost imports from China and other foreign countries. European Union governments are due on Monday to rubber-stamp the biggest revamp of the bloc s method for calculating duties aimed at countering below-cost -- or dumped -- imports. The move is a response to longstanding Chinese government demands for more favorable treatment while stopping short of saying those shipments are fairly priced. The overhaul will end an EU presumption that Chinese exporters and those in nine other members of the World Trade Organization operate in non-market conditions. That approach, which has allowed for higher European anti-dumping duties, is being replaced by a more opaque procedure for determining whether imports unfairly undercut domestic producers. (Source: Bloomberg) U.S. tax bill, Russian probe whipsaw financial markets U.S. stocks, the dollar and Treasury yields fell on Friday in a volatile session tied to developments in a probe into Russia's involvement in the U.S. election as well as by progress with a tax bill in Congress. Stocks and the greenback tanked mid-session after an ABC report that former national security adviser Michael Flynn was prepared to testify that Donald Trump instructed him to make contact with Russians during the presidential campaign.the sharp moves partially reversed after U.S. Senate Republicans said they had enough support to pass a tax overhaul bill later in the day. The S&P 500 closed at a record high on Thursday partly on hopes of passage of the bill, expected to cut corporate taxes. The Dow and the S&P both ended up for the week. (Source: Reuters) China's debt crackdown hits cash loan firms Executives from Chinese companies specialising in offering consumers small, easy-to-get loans became something of a fixture on Wall Street this year. Led by companies like Qudian Inc and PPDAI Group Inc, the Chinese micro-lenders raised $1.2bn with splashy U.S. listings, cashing in on a boom in borrowing by consumers in China with little access to traditional banks. However, the fortunes and share prices of the micro-lenders have slumped in the past week as Beijing clamped down on risks in the financial system, zeroing in on the fast-growing and loosely-regulated market for unsecured "cash loans". A notice last week announcing the suspension of approvals for new micro-lenders and restrictions on business across regions highlighted the growing risks Beijing sees in the industry, estimated to be worth 1tr yuan ($151.5bn), according to state media. (Source: Reuters) US consumer spending moderates in October, inflation firming US consumer spending slowed in October as the hurricane-related boost to motor vehicle purchases faded, but a sustained increase in underlying price pressures suggested that a recent disinflationary trend had probably run its course. Other data on Thursday showed a second straight weekly drop in first-time applications for unemployment benefits, pointing to a further tightening in labor market conditions that could soon generate faster wage growth and drive inflation higher. The reports strengthened expectations that the Federal Reserve will raise interest rates next month. The US central bank has increased borrowing costs twice this year. (Source:Reuters) U.S. oil steady after OPEC extension of production cut U.S. oil held steady on Friday after OPEC and other major producers agreed to extend production curbs in a widely expected move aimed at ending a persistent glut in global supplies. The OPEC and non-opec producers led by Russia on Thursday agreed to maintain the output cut until the end of 2018, while also signalling a possible early exit from the deal if the market overheats. U.S. crude futures were down 2 cents at $57.38 by 0057 GMT. On Thursday they rose 10 cents or 0.2% to $57.40 a barrel. The contract gained about 5.6% in November, the third month of gains. Brent crude futures were yet to trade. In the previous session, they settled up 46cents or 0.7% to $63.57 a barrel. Brent rose for a third consecutive month in November, gaining about 3.6 percent. Analysts said the nine-month extension was already priced in. The current deal cuts 1.8m barrels from the market in an attempt to tackle the oversupply and bolster prices. (Source: Reuters) 4

5 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 12/04/ :30 UK Markit/CIPS UK Construction PMI Nov /04/ :00 DE Foreign Reserves Nov /04/ :00 DE Change in Currency Reserves Nov 0.0b b -- 12/05/ :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 3.60% % -- 12/05/ :00 SP Industrial Production MoM Oct 0.40% % -- 12/05/ :30 SW Industrial Orders MoM Oct % -- 12/05/ :30 SW Industrial Orders NSA YoY Oct % -- 12/05/ :30 UK Markit/CIPS UK Services PMI Nov /05/ :30 UK Markit/CIPS UK Composite PMI Nov /05/ :30 UK Official Reserves Changes Nov $30m -- 12/05/ :00 IR Industrial Production MoM Oct % -- 12/05/ :00 IR Industrial Production YoY Oct % -- 12/05/ :30 US Trade Balance Oct -$47.4b -- -$43.5b -- 12/05/ :45 US Markit US Services PMI Nov F /05/ :45 US Markit US Composite PMI Nov F /05/ :00 US ISM Non-Manf. Composite Nov /05/2017 PD Poland Base Rate Announcement Dec % % -- 12/06/ :00 GE Factory Orders MoM Oct -0.20% % -- 12/06/ :00 GE Factory Orders WDA YoY Oct 7.00% % -- 12/07/ :50 JN Official Reserve Assets Nov $1260.9b -- 12/07/ :00 DE Industrial Production MoM Oct % -- 12/07/ :00 GE Industrial Production SA MoM Oct 1.00% % -- 12/07/ :00 GE Industrial Production WDA YoY Oct 4.30% % -- 12/07/ :45 FR Trade Balance Oct -4675m m -- 12/07/ :45 FR Current Account Balance Oct b -- 12/07/ :00 CZ Construction Output YoY Oct % -- 12/07/ :00 CZ Industrial Output YoY Oct 10.50% % -- 12/07/ :00 CZ Trade Balance National Concept Oct 15.3b b -- 12/07/ :00 LN International Reserves Nov m -- 12/07/ :00 PD Official Reserves Nov /07/2017 CH Foreign Reserves Nov $3122.0b -- $3109.2b -- 12/08/ :50 JN BoP Current Account Balance Oct b b -- 12/08/ :50 JN BoP Current Account Adjusted Oct b b -- 12/08/ :50 JN Trade Balance BoP Basis Oct 418.1b b -- 12/08/ :50 JN GDP SA QoQ 3Q F 0.40% % -- 12/08/ :50 JN GDP Annualized SA QoQ 3Q F 1.50% % -- 12/08/ :50 JN GDP Nominal SA QoQ 3Q F 0.70% % -- 12/08/ :50 JN GDP Deflator YoY 3Q F 0.10% 0.10% 0.10% -- 12/08/ :50 JN GDP Private Consumption QoQ 3Q F -0.50% % -- 12/08/ :50 JN GDP Business Spending QoQ 3Q F 0.40% % -- 12/08/ :30 NE Manufacturing Production MoM Oct % -- 12/08/ :30 NE Manufacturing Production YoY Oct % -- 12/08/ :30 NE Industrial Sales YoY Oct % -- 12/08/ :00 FI Trade Balance Oct P m -- 12/08/ :00 FI Industrial Production MoM 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 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 6