[Maybank Kim Eng] Today's Research - Malaysia

03 Sep 2015, Thursday

g Company Research - RHB Capital: To rationalize headcount | Desmond Ch'ng - Carlsberg Brewery Malaysia: Locally produced Somersby? | Liew Wei Han - UMW Oil & Gas: Takes delivery of Naga 8 | Thong Jung Liaw g Sector Research - Malaysia Banking: Challenges have not abated in 2Q | NEUTRAL | Desmond Ch'ng g Macro Research - Malaysia: Technicals - Index may test 1,583 and lower | Lee Cheng Hooi - Malaysia: Other News - | Malaysia Research Team

MY: RHB Capital (RHBC MK) Share Price: MYR6.25 Target Price: MYR7.00 Recommendation: Hold Desmond Ch'ng (603) 2297 8680 desmond.chng@maybank-ib.com Company Update: To rationalize headcount FYE Dec (MYR m) FY13A FY14A FY15E FY16E Operating income 5,950.8 6,234.9 6,181.7 6,368.9 Pre-provision profit 2,898.6 2,823.7 2,677.2 2,726.7 Core net profit 1,831.2 2,038.0 1,897.2 1,857.0 Core EPS (MYR) 0.73 0.80 0.73 0.71 Core EPS growth (%) (7.7) 9.3 (8.3) (3.1) Net DPS (MYR) 0.16 0.06 0.06 0.06 Core P/E (x) 8.6 7.8 8.6 8.8 P/BV (x) 1.0 0.9 0.8 0.7 Net dividend yield (%) 2.6 1.0 1.0 1.0 Book value (MYR) 6.57 7.31 8.16 8.81 ROAE (%) 11.5 11.5 9.5 8.4 ROAA (%) 1.0 1.0 0.8 0.8 §  To reduce staff strength by 15% (~2,700 personnel) via a CTS. §  Using CIMB’s benchmarks, could result in MYR219m savings per annum and bolster FY16 earnings by 8%. §  HOLD maintained with unchanged TP of MYR7.00 – P/BV target of 1x on post-rights BVPS. MY: Carlsberg Brewery Malaysia (CAB MK) Share Price: MYR12.04 Target Price: MYR12.20 Recommendation: Hold Liew Wei Han (603) 2297 8676 weihan.l@maybank-ib.com Company Update: Locally produced Somersby? FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 1,555.1 1,635.1 1,685.2 1,746.9 EBITDA 259.6 293.6 289.2 304.0 Core net profit 183.9 211.6 206.4 215.9 Core EPS (sen) 60.2 69.2 67.5 70.6 Core EPS growth (%) (4.0) 15.0 (2.4) 4.6 Net DPS (sen) 60.1 69.3 67.0 70.0 Core P/E (x) 20.0 17.4 17.8 17.1 P/BV (x) 13.4 11.8 12.0 11.6 Net dividend yield (%) 5.0 5.8 5.6 5.8 ROAE (%) 64.2 72.2 66.7 69.2 ROAA (%) 31.5 33.6 31.0 31.6 EV/EBITDA (x) 14.4 12.2 12.7 12.1 Net debt/equity (%) net cash net cash net cash net cash §  Expect stronger Singapore sales to cushion weaker Malaysia sales in the near term. §  Possibly looking to manufacture Somersby locally, to support future growth for both its domestic and export markets. §  Maintain HOLD with an unchanged DCF-TP of MYR12.20. MY: UMW Oil & Gas (UMWOG MK) Share Price: MYR1.01 Target Price: MYR0.80 Recommendation: Sell Thong Jung Liaw (603) 2297 8688 tjliaw@maybank-ib.com Ivan Yap (603) 2297 8612 ivan.yap@maybank-ib.com Company Update: Takes delivery of Naga 8 FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 737.8 1,016.3 1,057.4 1,002.9 EBITDA 311.8 411.9 254.0 168.1 Core net profit 166.4 248.5 (9.2) (102.3) Core EPS (sen) 7.7 11.5 (0.4) (4.7) Core EPS growth (%) 182.5 49.4 nm nm Net DPS (sen) 0.0 100.0 0.0 0.0 Core P/E (x) 13.1 8.8 (238.4) (21.3) P/BV (x) 0.8 0.7 0.7 0.7 Net dividend yield (%) 0.0 99.0 0.0 0.0 ROAE (%) 10.9 8.2 (0.3) (3.3) ROAA (%) 5.7 5.2 (0.2) (1.6) EV/EBITDA (x) 26.6 15.0 17.9 26.6 Net debt/equity (%) net cash 33.6 74.0 73.7 §  A contract may be forthcoming despite soft market conditions. §  Overall, JU market remains challenging. Optimising utilisation over DCRs is critical over the next 2 years. §  Maintain SELL and MYR0.80 TP, based on 0.8x EV/replacement value (unchanged). MY: Malaysia Banking Recommendation: Neutral Desmond Ch'ng (603) 2297 8680 desmond.chng@maybank-ib.com Sector Note: Challenges have not abated in 2Q | NEUTRAL §  Decent 6% YoY operating profit growth in 2Q but negated by loan loss allowances – 1H15 core net profit flat YoY. §  Earnings forecasts cut – core net profit growth of 2.6% for 2015, 7.2% for 2016. ROE to slip to 11.8% in 2015 from 13.5% in 2014. §  Maintain NEUTRAL with BUYs on BIMB, HLBK and HLFG. MY: Technicals Lee Cheng Hooi (603) 2297 8694 chenghooi.lee@maybank-ib.com Technical Research: Index may test 1,583 and lower §  AFG - On a very strong downward Wave 3 and 5 move. §  FBMKLCI – May re-test 1,583 and lower soon. §  Supports of 1,503 and 1,583 will be weaker. §  Resistances of 1,590 and 1,660 will cap rebounds. MY: Other News Malaysia Research Team Economics Research: Outside Malaysia —    Brazil: Keeps key rate after seven increases as recession hits —    U.K: Manufacturing cools in August as export orders fall for fifth month —    China: Money rate drops first time in three days on injections —    Australia: Economy slows on exports slump as China woes bite Malaysia —    Oil & Gas: Petronas said to consider buying Statoil’s stake in TAP project —    Telekom Malaysia: Inks deal with Time dotcom for SKR1M cable —    Scomi Engineering: Scomi, Skoda in tie-up to bid for MYR8b rail jobs