Malaysia Daily, Maybank KE (2015-02-27)

Daily 27 February 2015 RESULTS REVIEW Malayan Banking: Not Rated 2014 targets met FY14 net profit above consensus, ROE and loan growth targets met. FY15 focus will be on improving productivity, capital efficiency and international market performance. FY15 ROE target of 13-14%, loan growth of 9-10%. Click here for full report » Genting Malaysia: Maintain Buy See the forest for the trees 4Q14 and 2014 results were within expectations. Gaming operations stable, defying bearish regional trends. Long runway for growth. Maintain BUY call and MYR4.60 TP. Click here for full report » Genting Bhd: Maintain Hold Dragged by poor GENS showing 4Q14 results disappointed due to GENS. Trim 2015 and 2016 earnings estimates by 3%. Maintain HOLD call but trim TP by 7% to MYR9.30. Click here for full report » Sime Darby: Maintain Buy Expect stronger 2HFY6/15  Shariah-compliant 2QFY6/15 results disappointed, hurt by lower-than-expected FFB output and weak Australasia industrial contributions. We cut our FY6/15-16E EPS forecasts by 12%/5% on lower FFB output and industrial contribution assumptions. Maintain BUY with a lower TP of MYR10.20 (-50sen). Catalysts are M&A and listing of key divisions. Click here for full report » AirAsia Bhd: Downgrade To Hold The competition strikes back FY14 core net profit of MYR407m (-27% YoY) was below ours and consensus estimates. Competition from MAS and Malindo is biting hard, forcing AirAsia to play defensive ― which is an unfamiliar territory. Downgrade to HOLD (from BUY) with new target price of MYR2.65 (from MYR2.94) on earnings revision. Click here for full report » Telekom Malaysia: Maintain Hold Margin boost  Shariah-compliant FY14 normalised net profit was above expectations as EBITDA margin surprised on the upside in 4Q14. Still tight-lipped over wireless strategy; P1 was fully consolidated in 4Q14, and was loss-making at the EBIT line. Maintain HOLD, with a marginally higher TP of MYR7.30. Click here for full report » UMW Holdings: Maintain Hold No surprises  Shariah-compliant FY14 earnings within our and consensus forecasts. No clear near-term re-rating catalyst. Valuation is fair supported by yield of 3+% (based on 50% DPR). Earnings forecasts, HOLD rating and SOP-based TP of MYR11.20 unchanged pending analyst briefing today. Click here for full report » Bumi Armada: Maintain Buy Cost rationalisation in progress 12M14 core earnings were in line with ours and consensus forecasts; declared DPS of 1.63 sen in 4Q14. Cut FY15-16 net profit forecasts by 4%-25% on lower OSV and T&I profits; strong chance of securing a long-term FSU job. Maintain BUY; TP cut to MYR1.60 from MYR2.05 (SOP-based). Click here for full report » Lafarge Malaysia: Maintain Hold Overshadowed by competition  Shariah-compliant Weak 4Q14 results below our and market�s expectations. Keen competition could persist into 2015-16 and cap growth. Maintain forecast, HOLD call and TP of MYR9.35 for now. Click here for full report » UEM Sunrise: Maintain Hold 4Q boosted by land sales  Shariah-compliant FY14 net profit of MYR480m (-17% YoY) was in line. 2014 property sales of MYR2.44b above internal target; sets a new property sales target of MYR2b (-18% YoY) for 2015. Lowering FY15/16 earnings forecasts by 3-4%, RNAV/shr est by 37 sen. New TP is MYR1.35 (-14sen) on unchanged 0.39x P/RNAV peg. HOLD. Click here for full report » QL Resources: Maintain Hold Just keep swimming  Shariah-compliant 3QFY3/15 results are within expectations. Expect 4Q to come in strong on positive revenue momentum. Maintain HOLD but with a higher DCF-TP of MYR3.45 (from MYR3.20) on tweaking LT growth from 1.5% to 2.0%. Click here for full report » AEON Co. (M): Maintain Hold FY14 in line  Shariah-compliant FY14 core net profit of MYR199m was within our expectation but below consensus�. Full-year earnings lifted by Property Management Services but offset by higher costs from new store openings. Maintain HOLD with an unchanged TP of MYR3.05; introduce FY17 forecast. Click here for full report » TIME dotCom: Maintain Hold Ahead of expectations  Shariah-compliant FY14 EBITDA and net profit were ahead of expectations, as EBITDA margin surpassed guidance. Near-term risk-reward remains uncompelling, given the stock�s 46% rally since Dec 2013. Maintain HOLD, TP raised to MYR5.50. Click here for full report » Media Chinese International: Maintain Hold Decent quarter but still challenging  Shariah-compliant 3QFY3/15 earnings were slightly above expectations. Expecting still challenging environment in 4QFY3/15. Maintain HOLD call and TP of MYR0.79. Click here for full report » Wah Seong: Maintain Hold Orderbook replenishment concerns  Shariah-compliant 12M14 results were above ours/consensus expectations, on stronger-than-expected 4Q14. Cut FY15-16 EPS forecasts by 3%-8%, on low replenishment visibility and margin pressure. Reiterate HOLD with a lower MYR1.25 TP (previously MYR1.40) on unchanged 10x 2016 PER. Click here for full report » Icon Offshore: Maintain Hold In line; PCSB�s umbrella contract 12M14 results met our forecast but were below consensus. Securing charters is key in 2015; DCR may see weakness. Maintain HOLD and MYR0.98 TP (10x 2016 PER). Click here for full report » Oldtown: Maintain Buy Pickup in FMCG  Shariah-compliant 3QFY3/15 results within expectations, driven by rebound in FMCG sales. Expect sustained momentum in 4QFY15 after setbacks in 1HFY15. Maintain BUY and TP of MYR2.00 (FY15 PER of 18x). Click here for full report » Ann Joo Resources: Downgrade To Hold Still susceptible to dumping Sequentially weaker 4Q14 results within expectations. Undeterred dumping activity will pressure AJR�s margins. Downgrade to HOLD with a lower TP of MYR1.05 (0.5x P/BV). Click here for full report » Eversendai Corp: Upgrade To Buy Recovery in 2015?  Shariah-compliant Better 4Q14 results surpassed our and street�s expectations. Earnings could rebound in 2015 on higher job wins and margin recovery. Upgrade to BUY with a higher TP of MYR0.80 (12x FY15 PER). Click here for full report » Kimlun Bhd: Maintain Hold Margins under pressure  Shariah-compliant 4Q14 net profit disappointed . Shortfall was mainly due to weaker construction margins. Earnings forecasts, MYR1.30 TP, HOLD call unchanged. Click here for full report » COMPANY UPDATE ViTrox Corp: Maintain Buy Insatiable hunger for growth  Shariah-compliant Aims for greater heights in FY15 with key strategies in place. Bulky orders from new/existing Tier-1 customers, stronger replacement cycle to provide earnings growth in 1H15. Reiterate BUY with a higher TP of MYR4.05 (+14%), pegging it to 13.5x CY16 PER (from 12.6x). Click here for full report » ECONOMICS Singapore IPI, Jan 2015 Marginally positive IP rebounded marginally (Jan 2015: +0.9% YoY; Dec 2014: -1.9% YoY). Mixed trends across the major industries. Biomedical rebounded amid sustained growth in Precision Engineering and flat Electronics, while Transport Engineering, Chemicals and General Manufacturing declined further Click here for full report » Technicals Index finally breaks 1,820 The FBMKLCI advanced 5.01 points to 1,820.87 yesterday, while the FBMEMAS and FBM100 also closed higher by 40.93 points and 35.74 points, respectively. We recommend a �Buy on Dips� stance for the index. Trading idea is a Short-Term Buy on YEELEE with upside taret areas at MYR2.00 & MYR2.25. Stop loss is at MYR1.66. Click here for full report » Other Local News IJM Corp: Bag's MYR1.19b contract to upgrade Kuantan Port. IJM Corp's wholly-owned subsidiary, IJM Construction Sdn Bhd, has bagged a MYR1.19b contract from Kuantan Port Consortium Sdn Bhd (KPC) to construct a new deepwater terminal in Kuantan Port, Pahang. IJM said it will take 36 months to complete the project. (Source: The Edge Financial Daily) CIMB: Tengku Zafrul is CIMB Group chief. CIMB Group Holdings has received approval from Bank Negara Malaysia to appoint Tengku Datuk Zafrul Aziz as its group chief executive and executive director. The appointment is effective today. (Source: The News Straits Times) Outside Malaysia U.S: Consumer prices fall by most in six years on fuel slump. The cost of living in the U.S. fell in January by the most in six years, led by a plunge in energy prices that so far isn't spreading to services. The consumer-price index declined 0.7% after dropping 0.3% in December. Excluding volatile food and fuel, the so-called core measure rose 0.2%, more than projected. (Source: Bloomberg) Germany: Unemployment dropped twice as much as in February after the country returned to its position as Europe's economic powerhouse. The number of people out of work declined a seasonally adjusted 20,000 to 2.81 million, the Federal Labor Agency in Nuremberg said. The adjusted jobless rate remained at 6.5%, the lowest level in records going back more than two decades. (Source: Bloomberg) U.K: Riskiest rental home loans surge. The Bank of England is seeking to regulate the U.K.'s booming rental home market that's delivering annual returns of almost 12% and increasing risks for the economy. While regulators have tightened lending rules for home owners to curb runaway price growth and limit lenders' risks, the government has held off on giving the central bank greater authority to regulate mortgages to buy investment properties, as demand for rental homes is soaring, particularly in London. (Source: Bloomberg) Japan: Inflation rate slows more than forecast in January. Consumer prices excluding fresh food rose 2.2% YoY, the statistics bureau said. Stripped of the effect of sales-tax increase last April, core inflation - the Bank of Japan's key measure-was 0.2%. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,820.9 (2.5) 0.3 JCI 5,451.4 27.5 0.1 STI 3,426.2 8.2 (0.4) SET 1,593.6 22.7 0.3 HSI 24,902.1 6.8 0.5 KOSPI 1,993.1 (0.9) 0.1 TWSE 9,622.1 11.7 (0.8) DJIA 18,214.4 9.9 (0.1) S&P 2,110.7 14.2 (0.1) FTSE 6,949.7 3.0 0.2 MYR/USD 3.576 9.1 (0.8) CPO (1mth) 2,292.0 (12.8) 1.5 Crude Oil (1mth) 48.2 (51.1) (5.5) Gold 1,218.0 1.3 0.9 TOP STOCK PICKS Buy rated large caps Price Target Axiata 7.17 7.60 Tenaga Nasional 14.82 16.00 Sime Darby 9.53 10.70 Genting Malaysia 4.18 4.60 Gamuda 5.15 6.00 AirAsia 2.78 2.94 Westport 3.50 3.80 SP Setia 3.54 4.07 AFG 4.80 5.30 Hartalega 7.55 8.50