PP16795/03/2013(031743) Oct-16

Transcription

1 Tuesday, 31 October, 2017 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Research Team PP16795/03/2013(031743) Corporate News HSR public inspection to start off without Forest City stop Boustead Plantations signs SPA with Dutaland for Sabah lands Homeritz 2Q profit lifted by higher sales and stronger greenback, proposes 2.2 sen dividend EcoFirst 1Q18 earnings more than doubles on higher Ipoh property sales Perstima 2Q net profit down 73.48% on lower margins and sales volume Pestech acquires railway contractor at RM10.38m Bursa Malaysia Close Chg +/- Chg % YTD Chg (%) FBMKLCI 1, FBMEMAS 12, FBM100 12, FBMEMAS Shariah 13, FBM Hijrah Shariah 14, Volume (m) 2, Value (MYR m) 2, Economic News US consumer spending grows at fastest pace since 2009 Trump likely to pick Fed's Powell to lead CB China investors are more confident than the real economy China to publish unified GDP data in fraud crackdown BoE set for step into unknown with 1st rate hike since 2007 Indonesia's 3Q FDI rises 12% yoy 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 5, 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 3.72 Foreign yr MGS 4.02 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 % My Eg Hua Yang Hibiscus Petroleum MCT GHLSystems Supermax Padini Tambun Indah FGV TNB

3 CORPORATE NEWS HSR public inspection to start off without Forest City stop Public inspection on the Kuala Lumpur-Singapore HSR project starting Nov 1 will focus on the existing alignment featuring 7 local stations, without the proposed station at the Forest City property development in Johor. Public Land Transport Commission (SPAD) is still reviewing the application made by the multi-bn Forest City project s developers, namely Hong Kong-listed Country Garden, the Johor state government and the Sultan of Johor. However, if the Forest City station review is approved, MyHSR would convene a 2 nd public inspection for the changes in that area to show the plots of land that would be affected by the new alignment. (Source: The Edge) Boustead Plantations signs SPA with Dutaland for Sabah lands Boustead Plantations has signed a sales and purchase agreement (SPA) with Dutaland for the acquisition of 42 parcels of leasehold plantation lands in the Labuk and Sugut districts in Sabah for RM750m. The land plots currently cultivated with oil palm have a combined size of 11, hectares (ha), and houses all the buildings, agricultural equipment, machineries, vehicles and other amenities located on the properties. Its wholly-owned subsidiary Boustead Rimba Nilai entered into the SPA with Pertama Land & Development, which is wholly-owned by Dutaland, for the proposed acquisition. (Source: The Edge) Homeritz 2Q profit lifted by higher sales and stronger greenback, proposes 2.2 sen dividend Homeritz s 4Q net profit jumped 52.74% to RM7.01m, from RM4.59m a year ago, thanks to higher revenue and a stronger USD against the RM. Earnings per share (EPS) in the quarter ended Aug 31, 2017 rose to 2.34 sen from 1.53 sen. The furniture maker has proposed a final dividend of 2.2 sen per share, bringing total payout for the FY to 4.2 sen per share. This represents more than 40% of the consolidated net profit attribute to the owners of the company for FY17. Homeritz revenue in the quarter rose 16.91% to RM39.66m, from RM33.92m previously, amid a stronger USD in which its products are sold, added with higher sales volume. (Source: The Edge) EcoFirst 1Q18 earnings more than doubles on higher Ipoh property sales EcoFirst 1QFY18 saw net profit risen % to RM3.6m, from RM1.33m a year ago, thanks to higher sales in its development project Upper East in Ipoh. The gains, however, were mitigated by initial development and marketing costs incurred by another property project in Ampang. Earnings per share (EPS) rose to 0.45 sen in the quarter, from 0.17sen in 1QFY17. In tandem with higher sales, EcoFirst s quarterly revenue rose % to RM44.79m, from RM17.54m in the same quarter last year. Despite the encouraging 1Q, EcoFirst expects moderating sales, moving forward. With the Upper East project in Ipoh, Perak which had delivered its vacant possession in the current quarter, contribution is expected to be moderate in the ensuing period, as billings continue from the sales of remaining units to be sold.. (Source: The Edge) Perstima 2Q net profit down 73.48% on lower margins and sales volume Perstima 2Q net profit shrank 73.48% to RM3.51 m, from RM13.25 m a year ago, on lower sales volume and margin. Earnings per share (EPS) for the quarter ended Sept 30, 2017 fell to 3.54 sen, from sen. The lower profit margin was due to higher production cost not fully passed to customers, in order to maintain price competitiveness in the period under review. Revenue, meanwhile, rose 17.55% to RM234.34m, from RM199.36m, driven by higher selling price, despite the lower volume sold. Cumulate half-year net profit plunged 74.64% to RM6.35m, from RM25.04m in the same period of the previous year. Revenue however increased 25.6% to RM471.84m, from RM375.65m. (Source: The Edge) Pestech acquires railway contractor at RM10.38m Pestech International s subsidiary is acquiring a railway contractor, Colas Rail System Engineering (CRSE), at some RM10.38m to stimulate growth in its utility and railway business, moving forward. Its wholly-owned subsidiary Pestech Technology (PTech) had entered into sale and purchase agreements with Colas Rail Asia/Colas Rail and Vital Bid to acquire 100% of CRSE s issued share capital. Incorporated in 1965, CRSE is principally engaged in the provision of project management, engineering design, procurement, construction and related support services in relation to railway electrical and mechanical projects. (Source: The Edge) 3

4 ECONOMIC NEWS US consumer spending grows at fastest pace since 2009 US consumer spending recorded its biggest increase in more than 8 years in September, likely as households in Texas and Florida replaced flood-damaged motor vehicles, but underlying inflation remained muted. The consumer spending, which accounts for more than 2/3 of US economic activity, jumped 1.0% last month. The increase, which also included a boost from higher household spending on utilities, was the largest since August Consumer spending rose by an unrevised 0.1% in August. Economists polled by Reuters had forecast consumer spending increasing 0.8% in September. Consumer spending growth slowing to a 2.4% annualized rate, after a robust 3.3% pace in the 2Q. (Source: Reuters) Trump likely to pick Fed's Powell to lead CB Donald Trump is likely to pick Federal Reserve Governor Jerome Powell to replace Janet Yellen as head of the US CB. Powell, Yellen and Stanford University economist John Taylor are among those on the Republican president's short list. By picking Powell, a Fed governor since 2012, Trump would get a combination of a change in leadership with the continuity offered by somebody who has been a part of the Yellen-run Fed that has kept the economy and markets steady in recent years. Powell, 64, has supported Yellen's general direction in setting monetary policy, and in recent years has shared her concerns that weak inflation justified a continued cautious approach to raising rates. (Source: Reuters) China investors are more confident than the real economy The earliest gauges of China s economic pulse for October suggest that sentiment among financial-market participants is more positive than that in the real economy. Confidence at smaller companies and manufacturing activity tracked by satellites both slipped from the level in previous month, and the mood among steel producers and traders slumped on production curbs. International financial market experts, meanwhile, are increasingly optimistic about the nation s outlook, and sales managers expectations were little changed. China concluded a twice-a-decade Communist Party Congress in October, with President Xi Jinping outlining a roadmap to make the country a global leading power by 2050 and put more emphasis on quality over pace of economic expansion. (Source: Bloomberg) China to publish unified GDP data in fraud crackdown China s National Bureau of Statistics will take over data collection at the regional level from 2019, replacing the current system in which the combined economic output of China's provinces has long exceeded national output measured by the NBS. There had been significant improvement in the long-standing discrepancy between national and regional GDP data. The government had stepped up inspections of potentially fraudulent data and was working towards unifying the accounting systems used by national and local authorities. The problem of discrepancy between regional and national GDP data has significantly improved, but (the gap) is still large. This situation is not conducive to accurately understanding regional economic trends, scientifically implementing macroeconomic controls, and impacts the credibility of government statistics. (Source: Reuters) BoE set for step into unknown with 1 st rate hike since 2007 The BoE looks set to step into the unknown when it is expected to raise interest rates for the 1 st time since 2007 at a time when growth appears weaker than before any other rate rise of the past 20 years. Having cut rates to a record low 0.25% in August 2016 after Britons voted to leave the EU, the BoE is now correcting course and falling in line with the US Fed and the ECB, which are either raising rates or scaling back stimulus. Whereas the US and the euro zone are enjoying robust growth, however, Britain's economy has grown at its slowest pace in more than 4 years over the past 12 months. Quarterly growth of 0.4% offers the weakest backdrop to any rate rise since the BoE became independent in Inflation is at a 5-year high of 3%, a full percentage point above the BoE's target. (Source: Reuters) Indonesia's 3Q FDI rises 12% yoy FDI into Indonesia in July-September increased at a higher rate than in the previous quarter. In rupiah terms, FDI rose 12% in the 3Q from the same period last year. It grew 10.6% in the 2Q. FDI, excluding that in banking and the oil and gas sector, amounted to trn rupiah or USD8.3bn. The board uses 13,400 rupiah exchange rate to the dollar, as assumed by the state budget. The rupiah was traded between 13,135 and 13,550 in the 3Q. In the 2Q, Indonesia attracted 109.9trn rupiah or USD8.3bn when using the 13,300 rupiah exchange rate that the board used for the 2Q. (Source: Reuters) 4

5 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 10/31/ :50 JN Industrial Production MoM Sep P -1.60% % -- 10/31/ :50 JN Industrial Production YoY Sep P 2.00% % -- 10/31/ :00 CH Manufacturing PMI Oct /31/ :00 CH Non-manufacturing PMI Oct /31/ :00 JN Construction Orders YoY Sep % -- 10/31/ :00 FI Trade Balance Aug F m -- 10/31/ :00 SP Current Account Balance Aug b -- 10/31/ :00 CZ Money Supply M2 YoY Sep % -- 10/31/ :45 US Chicago Purchasing Manager Oct /31/2017 BP Base Interest Rate Nov % -- 11/01/ :30 JN Nikkei Japan PMI Mfg Oct F /01/ :45 CH Caixin China PMI Mfg Oct /01/ :30 UK Markit UK PMI Manufacturing SA Oct /01/ :45 US Markit US Manufacturing PMI Oct F /01/ :00 US ISM Manufacturing Oct /01/ :00 US ISM Prices Paid Oct /01/ :00 US ISM New Orders Oct /01/ :00 US ISM Employment Oct /01/ /08 JN Official Reserve Assets Oct $1266.3b -- 11/02/ :00 US FOMC Rate Decision (Upper Bound) Nov % % -- 11/02/ :00 US FOMC Rate Decision (Lower Bound) Nov % % -- 11/02/ :00 HU Trade Balance Aug F m -- 11/02/ :30 UK Markit/CIPS UK Construction PMI Oct /02/ :00 UK Bank of England Bank Rate Nov % % -- 11/02/ :00 UK BOE Asset Purchase Target Nov 435b b -- 11/02/ :00 UK BOE Corporate Bond Target Nov 10b -- 10b -- 11/02/ :00 CZ Repurchase Rate Nov % % -- 11/02/ :00 DE Foreign Reserves Oct /02/ :00 DE Change in Currency Reserves Oct b -- 11/03/ :45 CH Caixin China PMI Composite Oct /03/ :45 CH Caixin China PMI Services Oct /03/ :00 CZ Trade Balance National Concept Sep 18.5b b -- 11/03/ :30 UK Markit/CIPS UK Services PMI Oct /03/ :30 UK Markit/CIPS UK Composite PMI Oct /03/ :30 UK Official Reserves Changes Oct $554m -- 11/03/ :30 US Trade Balance Sep -$43.2b -- -$42.4b -- 11/03/ :00 US ISM Non-Manf. Composite Oct /03/ :45 US Markit US Services PMI Oct F /03/ :45 US Markit US Composite PMI Oct F /06/ :30 JN Nikkei Japan PMI Services Oct /06/ :30 JN Nikkei Japan PMI Composite Oct /06/ :00 GE Factory Orders MoM Sep % -- 11/06/ :00 GE Factory Orders WDA YoY Sep % -- 11/06/ :00 CZ Construction Output YoY Sep % -- 11/06/ :00 CZ Industrial Output YoY Sep 3.50% % -- 11/06/ :30 SW Industrial Production MoM Sep % -- 11/06/ :30 SW Industrial Production NSA YoY Sep % -- 11/06/ :30 SW Industrial Orders MoM Sep % -- 11/06/ :30 SW Industrial Orders NSA YoY Sep % -- 11/06/ :00 IR Industrial Production MoM 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