[Maybank Kim Eng] Today's Research - Malaysia

28 Sep 2015, Monday

g Company Research - Malayan Banking: DRP price fixed at MYR7.50 | Desmond Ch'ng g Sector Research - Malaysia Media: The future is in High Definition | Samuel Yin Shao Yang g Macro Research - Malaysia: Malaysia CPI, August 2015 - Lower, on lower pump prices | Suhaimi Ilias - Malaysia: Leading Indicator, July 2015 - Challenges ahead | Suhaimi Ilias - Malaysia: Labour Statistics, Jul 2015 - Inching up | Suhaimi Ilias - Singapore: Industrial Production, Aug ‘15 - Weakness unabated | Suhaimi Ilias - Malaysia: Technicals - Autumn volatility may persist | Lee Cheng Hooi - Malaysia: Other News - | Malaysia Research Team

MY: Malayan Banking (MAY MK) Share Price: MYR8.41 Desmond Ch'ng (603) 2297 8680 desmond.chng@maybank-ib.com Company Update: DRP price fixed at MYR7.50 FYE Dec (MYR m) FY11A FY12A FY13A FY14A Operating income 21,247.1 16,773.3 18,538.4 18,530.6 Pre-provision profit 10,653.1 8,540.9 9,610.4 9,419.3 Core net profit 7,033.3 5,745.9 6,552.4 6,716.5 Core EPS (MYR) 0.92 0.73 0.76 0.74 Core EPS growth (%) 70.7 (21.0) 4.3 (2.2) Net DPS (MYR) 0.72 0.53 0.54 0.57 Core P/E (x) 9.1 11.6 11.1 11.3 P/BV (x) 1.9 1.7 1.6 1.5 Net dividend yield (%) 8.6 6.2 6.4 6.8 Book value (MYR) 4.38 4.99 5.19 5.68 ROAE (%) 22.9 15.2 14.9 13.6 ROAA (%) 1.8 1.2 1.2 1.1 §  DRP price fixed at MYR7.50/share, a 9.5% discount to its 5-day ex-dividend VWAMP. §  DRP discount is larger than the average of 5.3% over past 5 DRPs. §  Fully loaded CET1 about 10.96% at the group level assuming 85% reinvestment rate. MY: Malaysia Media Recommendation: Neutral Samuel Yin Shao Yang (603) 2297 8916 samuel.y@maybank-ib.com Jade Tam (603) 2297 8687 jade.tam@maybank-ib.com Sector Note: The future is in High Definition §  TV digitalisation has kicked off and Malaysia must be ASO ready by 2018 at latest. Viewers can expect HD channels, more TV channels, interactive services and mobile TV. §  Beneficiaries are telcos and related industries, IT companies specialising in TV, payment and courier service providers, game developers and new FTA TV channel operators. §  MPR may be negatively impacted but we believe this is already reflected in its share price. Maintain BUY on MPR. Astro may be negatively impacted too but not as severely. MY: Malaysia CPI, August 2015 Suhaimi Ilias (603) 2297 8682 suhaimi_ilias@maybank-ib.com Zamros Dzulkafli (603) 2082 6818 zamros.d@maybank-ib.com Economics Research: Lower, on lower pump prices §  Headline inflation in Aug 2015 moderated to +3.1% YoY from +3.3% YoY a month earlier. §  The lower inflation was helped by the downward adjustment in domestic fuel pump prices. §  Maintain our 2015 inflation forecast of 2.0%-2.5%. MY: Leading Indicator, July 2015 Suhaimi Ilias (603) 2297 8682 suhaimi_ilias@maybank-ib.com Zamros Dzulkafli (603) 2082 6818 zamros.d@maybank-ib.com Economics Research: Challenges ahead §  Index of leading indicators increased by +0.9% MoM in July 2015. §  However on a YoY basis, growth continued to point towards softer economic momentum. §  Subdued by domestic issues and global uncertainties. MY: Labour Statistics, Jul 2015 Suhaimi Ilias (603) 2297 8682 suhaimi_ilias@maybank-ib.com Zamros Dzulkafli (603) 2082 6818 zamros.d@maybank-ib.com Economics Research: Inching up §  Unemployment rate rose to 3.2% in July 2015 from 3.1% in Jun 2015. §  No change in our full-year average jobless rate forecast of 3.1% (2015 YTD: 3.1%; 2014: 2.9%). §  Labour market trends and developments to watch are retrenchments and decision on minimum wage review. SG: Industrial Production, Aug ‘15 Suhaimi Ilias (603) 2297 8682 suhaimi_ilias@maybank-ib.com Zamros Dzulkafli (603) 2082 6818 zamros.d@maybank-ib.com Economics Research: Weakness unabated §  IP fell for a seventh straight month in Aug 2015 as it contracted by -7.0% YoY (revised Jul 2015: -6.4% YoY). §  Electronics and Transport Engineering were the main drags. §  The manufacturing sector continues to be a negative on the economy in 3Q 2015. MY: Technicals Lee Cheng Hooi (603) 2297 8694 chenghooi.lee@maybank-ib.com Technical Research: Autumn volatility may persist §  FBM KLCI – A downward bias from the 1,691.93 high. §  CPO Futures – A firm rise from the MYR2,088 low. §  DJIA – Continued autumn volatility into October? §  UMW – A very strong triple time frame downtrend stock. MY: Other News Malaysia Research Team Economics Research: Outside Malaysia —   U.S: Consumer sentiment fell less than forecast in September —   China: Capital outflows hit record in August on Yuan weakness Malaysia —   Felda Global Ventures: No Bank Negara green light yet for FGV purchase of PT Eagle stake —   Hock Seng Lee: To bid selectively —   Pestech: Bags MYR134m job