PP16795/03/2013(031743)

Transcription

1 Wednesday, 22 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: Dagang NeXChange 3Q17 (Below); Energy drag; TP: RM 0.52 (Buy) Results Review: Malakoff 3Q17 (Above) ; Compensating uplift; TP: RM 1.20 (Buy) Results Review: Kawan Food 3Q17 (Below) ; A disappointing quarter; TP: RM 2.90 (Hold) Results Review: Supermax 1Q18 (Above) ; A strong start; TP: RM 2.18 (Hold) Corporate News Economic News Gabungan AQRS gets LoI for RM189m construction job IJM Corp to build RM500m office tower at TRX Serba Dinamik 3Q earnings jump 51% Boustead Plantations 3Q earnings surge to RM562.42m on disposal gain, declares 10 sen dividend UOA Development 3Q net profit down 18% on higher expenses Hock Seng Lee bags RM57m job in Kuching US existing home sales increase more than expected Brexit-hit banks to start moving staff abroad in early 2018 Lack of German govt puts euro zone integration plans on hold China suspends approval of new internet micro loan firms China's debt surge may increase risk of financial crisis Japan eyes extra budget of more than US$18bn Singapore's Oct CPI seen edging up on transport, oil costs Bursa Malaysia Close Chg +/- Chg % YTD Chg (%) FBMKLCI 1, FBMEMAS 12, FBM100 12, FBMEMAS Shariah 12, FBM Hijrah Shariah 13, Volume (m) 2, Value (MYR m) 2, 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 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 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 3.73 Foreign yr MGS 3.96 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 % Prestariang % Kawan Food % Top Glove % IJM Plantations % Dagang Nexchange % Petronas Gas % Supermax Corp % Telekom Malaysia % GHL Systems % 2

3 CORPORATE NEWS Gabungan AQRS gets LoI for RM189m construction job Gabungan AQRS has received a letter of intent from KotaSAS SB to build 1,004 landed homes in Kota Sultan Ahmad Shah (KotaSAS), Kuantan, Pahang. The project's value is RM189.22m. With the addition of the project, Gabungan AQRS's outstanding order book amounts to RM2.77bn. Its wholly-owned subsidiary Gabungan Strategik SB has received the letter of intent from KotaSAS to appoint Gabungan Strategik as a turnkey contractor to undertake the construction works. The project will be divided into 4 phases, with Phase 1 to commence in 2018 and complete after 2 years. Phase 2, 3 and 4 will commence in 2019, 2020 and 2021 respectively and will also complete after 2 years at commencement. (Source: The Edge) IJM Corp to build RM500m office tower at TRX IJM Corp is developing a RM500m office tower at the Tun Razak Exchange (TRX) here. This follows a share sale and purchase agreement signed, which sees IJM acquiring Fairview Valley SB (FVSB), a subsidiary of TRX City SB that is building a 27-storey purpose-built commercial building at TRX. TRX City is the master developer of the upcoming international financial district. IJM's construction division, IJM Construction SB, is undertaking the construction of the office tower, which include the sub-structure and super-structure work. The Grade A, LEED Gold-certified office building, built over a land area of 1.18 acres with a gross floor area of about 560,000 sq ft, will be Prudential's new Malaysian headquarters. (Source: The Edge) Serba Dinamik 3Q earnings jump 51%; pays 1.5 sen dividend Serba Dinamik s net profit for the 3QFY17 rose 51% to RM68m, from RM45m, on strong activities from its operation and maintenance (O&M), and its engineering, procurement, construction and commissioning (EPCC) segments. Quarterly revenue grew 28% yoy to RM653.3m, from RM511.5m in 3QFY16. Its board of directors declared a 3 rd interim dividend of 1.5 sen per share in respect of the FY17, to be paid on Dec 20. O&M contributed 86.9% or RM567.9m to the group s revenue. The segment s quarterly operating profit came in at RM99.1m. As for EPCC, segment revenue grew RM43.8m to RM84.1m and contributed 12.9% of Serba Dinamik s quarterly revenue. The segment s operating profit was RM13.5m, yielding a gross margin of 15.9%. (Source: The Edge) Boustead Plantations 3Q earnings surge to RM562.42m on disposal gain, declares 10 sen dividend Boustead Plantations s net profit leaped by more than 15 times to RM562.42m in the 3QFY17 from RM37.36m a year ago, primarily due to gains realised on disposal of land amounting to RM554.87m. EPS grew to sen from 2.34 sen. Quarterly revenue, however, fell 8% to RM183.43m in 3QFY17 from RM199.33m in 3QFY16 on lower share of results from associate. The group also declared a 3 rd interim dividend of 3 sen per share and a special dividend of 7 sen per share for the financial year ending Dec 31, 2017, payable on Dec 19. For the cumulative 9MFY17, net profit jumped 3.5 times to RM628.8m from RM177.5m a year ago, while revenue rose 6% to RM541.93m from RM511.23m in 9MFY16. (Source: The Edge) UOA Development 3Q net profit down 18% on higher expenses UOA Development s net profit for its 3QFY17 dropped 18.19% to RM90.36m, from RM110.44m a year ago, dragged by higher expenses incurred in the period. Earnings per share fell to 5.26 sen from 6.85 sen. Quarterly revenue rose 13.96% to RM261.63m from RM229.57m last year, which UOA Development attributed to its ongoing projects and sale of completed residential and office units in Klang Valley. Cumulative net profit for the first 3Q fell 9.48% to RM299.38m or sen per share, from RM330.75m or sen per share in the previous corresponding period. Higher property development profit incurred in the period was offset by lower profit from its construction segment, further dragged by losses in its non-core operations. (Source: The Edge) Hock Seng Lee bags RM57m job in Kuching Hock Seng Lee (HSL) has bagged a RM56.6m contract from X-FAB Sarawak SB to undertake renovation and extension works to an existing 3-storey X-FAB administration building with associated external works at Sama Jaya Free Industrial Zone in Kuching, Sarawak. It has received the letter of acceptance from X-FAB Sarawak for the building construction project, following an open tender exercise. X-FAB Sarawak is 93.6%-owned by Belgium-based X-FAB Silicon Foundaries NV. Its success in the open tender exercise was mainly premised on its superior vibration control management, which is critical in this project, as the on going manufacturing activities involves high precision and has very low tolerance to any kind of environmental vibration. (Source: The Edge) 3

4 ECONOMIC NEWS US existing home sales increase more than expected US home sales increased more than expected in October as hurricane-related disruptions dissipated, but a chronic shortage of houses which is pushing prices beyond the reach of some first-time buyers remains an obstacle. Existing home sales rose 2.0% to a seasonally adjusted annual rate of 5.48m units last month. September's sales pace was revised down to 5.37m units from the previously reported 5.39m units. Economists polled by Reuters had forecast home sales rising 0.7% to a 5.42m unit rate in October. The sales in Houston and Jacksonville, regions which bore the brunt of Hurricanes Harvey and Irma, had rebounded. (Source: Reuters) Brexit-hit banks to start moving staff abroad in early 2018 UK politicians are fighting to get a deal early next year that will ease businesses panic about Brexit. For some industries, it s probably too late. Barring some major breakthrough, global banks will implement their relocation plans early next year to guarantee they re able to have new offices inside the European Union running by the time the UK exits. There s little Prime Minister Theresa May can do to stop lenders from executing their contingency plans, if they haven t already. If there is no precise direction at the beginning of next year, the banking industry players would have to take decisions. (Source: Reuters) Lack of German govt puts euro zone integration plans on hold The collapse of talks on a new German government means that the euro zone's ambitious plans for deeper economic integration could be put on hold. German government coalition talks collapsed on Sunday night as the liberal FDP party pulled out after weeks of exploratory talks, plunging the euro zone's most important economy into political uncertainty and raising the prospect of new elections. Euro zone leaders are to set a direction for deeper euro zone economic integration at a summit in the middle of December, at which Germany's input is crucial. As long as Germany does not have a clear position, it will by default not agree to anything. Therefore, delay is the most likely option. (Source: The Edge) China suspends approval of new internet micro loan firms A top-level Chinese government body on Tuesday issued an urgent notice to provincial governments urging them to suspend regulatory approval for new internet micro loan companies. The body, tasked by the central government in Beijing to rein in risks in the growing online finance sector, also told local regulators to restrict granting of new approvals for micro loan companies to conduct lending across regions, according to the sources. The information office of the State Council, or Cabinet, and the People's Bank of China could not be immediately reached for comment. Companies providing small loans, especially on the internet, have expanded rapidly in the past year. (Source: Reuters) China's debt surge may increase risk of financial crisis China s debt is poised to soar over the next 5 years, severely reducing the chances the nation can avoid a financial crisis. Bloomberg Economics economists Fielding Chen and Tom Orlik estimate China s total debt will reach 327% of GDP by 2022, double the level in That will put China among the most indebted countries in the world. The rapid growth and high level of China s debt have already placed them in the danger zone for a financial crisis. Adding debt equivalent to almost 70% of GDP in the next 5 years wouldn t mean a crisis is inevitable, but it would severely reduce the chances of avoiding one. (Source: Reuters) Japan eyes extra budget of more than US$18bn Japan's government and ruling coalition are putting the final touches to an extra budget of 2trn to 2.5trn (US$18bn to US$22bn) for the current fiscal year to March The government and the coalition of the Liberal Democratic Party and the Komeito Party are considering issuing 700bn in construction bonds to help finance the budget. Following October's big election win, Prime Minister Shinzo Abe's cabinet has made plans to beef up childcare support, boost productivity at small and medium-sized companies, and strengthen competitiveness of the farm, fishery and forestry industries. (Source: Reuters) Singapore's Oct CPI seen edging up on transport, oil costs Singapore's CPI probably edged up slightly in October from a year earlier due to higher private road transport costs, picking up from September's pace, a Reuters poll showed. The all-items CPI in October was forecast to have risen 0.5%, up from 0.4% in September, according to the median forecast of 10 economists in the poll. Private road transport costs is expected to rise due to higher Certificate of Entitlement (COE) prices and an increase in petrol prices during the month. A COE is a quota licence won in an auction that allows the permit holders to own vehicles in the city-state. Land-scarce Singapore, one of the world's most expensive places to own a vehicle, has said it will not allow any growth in its car population from February. (Source: Reuters) 4

5 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 11/22/2017 PO Current Account Balance Sep m -- 11/23/ :30 UK GDP QoQ 3Q P 0.40% % -- 11/23/ :30 UK GDP YoY 3Q P 1.50% % -- 11/23/ :30 UK Private Consumption QoQ 3Q P 0.40% % 0.20% 11/23/ :30 UK Government Spending QoQ 3Q P 0.30% % 0.10% 11/23/ :00 PD Money Supply M3 MoM Oct 0.70% % -- 11/23/ :00 PD Money Supply M3 YoY Oct 5.50% % -- 11/24/ :30 JN Nikkei Japan PMI Mfg Nov P /24/ :00 IT Industrial Orders MoM Sep % -- 11/24/ :00 IT Industrial Orders NSA YoY Sep % -- 11/24/ :00 IT Industrial Sales MoM Sep % -- 11/24/ :00 IT Industrial Sales WDA YoY Sep % -- 11/24/ :45 US Markit US Manufacturing PMI Nov P /24/ :45 US Markit US Services PMI Nov P /24/ :45 US Markit US Composite PMI Nov P /24/2017 RO Money Supply M3 YoY Oct % -- 11/27/ :30 CH Industrial Profits YoY Oct % -- 11/27/ /28 GE Import Price Index MoM Oct 0.40% % -- 11/27/ /28 GE Import Price Index YoY Oct 2.60% % -- 11/28/ :30 SW Trade Balance Oct b -- 11/28/ :00 EC M3 Money Supply YoY Oct % -- 11/28/ :00 BP Gross External Debt Sep b -- 11/28/ :30 US Advance Goods Trade Balance Oct -$65.5b -- -$64.1b -$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 % -- 11/29/ :30 US GDP Price Index 3Q S 2.20% % -- 11/30/ :50 JN Industrial Production MoM Oct P % -- 11/30/ :50 JN Industrial Production YoY Oct P % -- 11/30/ :00 CH Manufacturing PMI Nov /30/ :00 CH Non-manufacturing PMI Nov /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 1.60% % -- 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/ :45 CH Caixin China PMI Mfg Nov /01/ :00 HU Trade Balance Sep F m -- 12/01/ :30 SW Current Account Balance 3Q b -- 12/01/ :30 UK Markit UK PMI Manufacturing SA Nov /01/ :00 US ISM Manufacturing Nov /01/ :00 US ISM Prices Paid Nov

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