Malaysia Daily, Maybank KE (2014-04-21)

Daily 21 April 2014 SECTOR UPDATE Automotive Sector: Upgrade to Overweight Values have emerged Share prices of UMWH and MBM have retraced 28% and 21% in the last 12 months relative to the KLCI. We upgrade UMWH and MBM to BUY on undemanding valuations and as we turn upbeat on Perodua. Upgrade sector to OVERWEIGHT with BUYs on UMWH, TCM, MBM and BAuto. TCM is our favourite. Click here for full report » MY Automotive Sector: Upgrade to Overweight �Mar�velous TIV Sales March TIV sales surged to 59k units from strong delivery of new launches in the mass B, C and D-segments. Our 2014 TIV forecast of 675k units (+3% YoY) is unchanged. On a bottom-up approach, we are now OVERWEIGHT on the sector with BUYs on UMWH, TCM, MBM and BAuto. Click here for full report » COMPANY UPDATE Tan Chong Motor: Maintain Buy Deeply undervalued Cut FY14/15/16 earnings forecasts by 17%/9%/6% and TP by 9% to MYR6.80 (unchanged 12x FY15 PER) due to: (i) lower vehicle sales assumption and (ii) higher component costs. Despite the downward revisions, most the negatives are priced in following a 15% fall in share price since Nov 2013. TCM could be Shariah compliant come May, a major positive. Click here for full report » Nestle Malaysia: Maintain Hold 1Q14 key briefing takeaways  Shariah-compliant Export sales down 13% YoY to MYR266m in 1Q14. Confectionery is the smallest but fastest growing product segment, sales surged 34% YoY in 1Q14 to MYR94m. Maintain HOLD with an unchanged DCF-based TP of MYR64. Click here for full report » Technicals FBMKLCI muted, firm USA comeback The FBM KLCI inched up 0.03 points WoW in sluggish trading last week. The index closed at 1,852.69 last Friday, as volume turned up from 2.02b to 2.59b shares traded. With the local buying that emerged recently at 1,802, we advise clients to nibble at the support areas of 1,802 to 1,845. The resistance levels of 1,852 and 1,882 will see heavy profit taking activities. Trading idea is a Short-Term Buy on ORNA with upside target areas at MYR1.29 & MYR1.64. Stop loss is at MYR1.02. Click here for full report » Other Local News Aviation: klia2 obtains Certificate of Completion and Compliance. Klia2 has obtained the Certificate of Completion and Compliance (CCC) from UEMC-Bina Puri JV, the main terminal building contractors. The issuance of the CCC not only certifies the safety of the project but is also a go-ahead for all relevant authorities to occupy the terminal building including airlines that can start operating from the new hybrid airport. (Source: Business Times) Petronas: Target BRICS. Petronas to focus on energy and O&G sectors with massive potential. Petronas which is spending close to MYR200b in capex over the next five to six years, is targeting the fast-growing Brazil, Russia, India, China and South Africa (BRICS) economies for expansion, sources said. (Source: Business Times) MISC: Looks to hive off 7 tankers. Disposals worth USD200m (MYR646m) may be due to "challenging" outlook in chemical shipping. MISC is said to be looking to sell as many as seven chemical tankers. (Source: The Edge Financial Daily) Dialog: Pengerang terminal Phase 2 plan likely to come out in July. Co-founder and executive chairman Dr Ngau Boon Keat expects the development plan for Phase 2 of the MYR5b Pengerang Independent Deepwater Petroleum Terminal (PIDPT) in Johor to be finalized by July, 2014. (Source: The Edge Financial Daily). UEM Sunrise: Eyes luxury condo project in Indonesia. Siti Mariam, chief marketing officer said the property developer may look to develop high-end condominium projects in Indonesia. (Source: The Edge Financial Daily) Outside Malaysia U.S: Payrolls rose in most states in March. Florida led the nation with a 22,900 increase in payrolls, followed by North Carolina with 19,400 more jobs, figures from the Labor Department showed. Ohio registered among the biggest declines in joblessness. Gains in hiring will probably help lift consumer confidence and spur household spending, which accounts for almost 70% of the economy. The Federal Reserve, in its latest Beige Book review of regional conditions, said the labor market was "generally positive." (Source: Bloomberg) China: March new home price increases ease on tighter credit. Home prices from the first-tier cities to those less affluent all weakened in March, according to the National Bureau of Statistics. Prices in the capital city of Beijing rose 10% YoY, the slowest since April last year, while those in Shanghai added 13% YoY, the smallest since June. The eastern city of Wenzhou fell 3.9% YoY from a year ago. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,852.7 (0.8) 0.1 JCI 4,897.1 14.6 0.0 STI 3,253.8 2.7 0.0 SET 1,409.2 8.5 0.0 HSI 22,760.2 (2.3) 0.0 KOSPI 2,004.3 (0.4) 0.6 TWSE 8,966.7 4.1 0.3 DJIA 16,408.5 (1.0) 0.0 S&P 1,864.9 0.9 0.0 FTSE 6,625.3 (1.8) 0.0 MYR/USD 3.2 (1.1) 0.1 CPO (1mth) 2,694.0 2.5 (0.7) Crude Oil (1mth) 104.3 6.0 0.0 Gold 1,294.3 7.7 (0.1) TOP STOCK PICKS Buy rated large caps Price Target Tenaga 11.90 14.00 Genting Msia 4.25 4.74 HLBK 14.00 16.40 AMMB Holdings 7.16 8.50 Bumi Armada 3.99 5.00 IJM Corp 6.37 6.75 MPHB Capital 1.97 2.42