[Maybank Kim Eng] Today's Research - Malaysia

18 Nov 2015, Wednesday

g Company Research - Hong Leong Bank: 1QFY16 results below expectations | Desmond Ch'ng - Hong Leong Financial Group: Prefer HLFG for exposure to HLBK | Desmond Ch'ng - Dialog Group: 1QFY1/16 results in line | Thong Jung Liaw g Macro Research - Singapore: Singapore External Trade, October ‘15 - Different strokes… | Suhaimi Ilias - Malaysia: Technicals - Index staged a “Dead Cat Bounce” | Lee Cheng Hooi

MY: Hong Leong Bank (HLBK MK) Share Price: MYR13.70 Target Price: MYR15.10 Recommendation: Buy Desmond Ch'ng (603) 2297 8680 desmond.chng@maybank-ib.com Results Review: 1QFY16 results below expectations FYE Jun (MYR m) FY14A FY15A FY16E FY17E Operating income 4,039.1 4,066.9 4,287.6 4,544.0 Pre-provision profit 2,246.8 2,253.1 2,421.0 2,616.5 Core net profit 2,102.3 2,233.2 2,130.0 2,246.9 Core EPS (MYR) 1.19 1.26 1.18 1.25 Core EPS growth (%) 12.8 5.9 (6.3) 5.5 Net DPS (MYR) 0.41 0.41 0.39 0.41 Core P/E (x) 11.5 10.8 11.6 11.0 P/BV (x) 1.8 1.5 1.5 1.4 Net dividend yield (%) 3.0 3.0 2.9 3.0 Book value (MYR) 7.73 8.93 9.42 9.96 ROAE (%) 15.3 14.3 12.3 12.3 ROAA (%) 1.3 1.3 1.1 1.1 §  1QFY16 net profit fell short due mainly to lower contributions from 20%-owned Bank of Chengdu (BOC). §  Earnings lowered by 7%/5%/3% for FY16/17/18 on lower contributions from BOC. §  Maintain BUY with a slightly lower TP of MYR15.10 (-10sen), pegged to a lower 1.4x post-rights CY16 P/BV. MY: Hong Leong Financial Group (HLFG MK) Share Price: MYR13.70 Target Price: MYR16.20 Recommendation: Buy Desmond Ch'ng (603) 2297 8680 desmond.chng@maybank-ib.com Results Review: Prefer HLFG for exposure to HLBK FYE Jun (MYR m) FY14A FY15A FY16E FY17E Operating income 4,549.2 4,490.9 4,712.6 4,987.7 Pre-provision profit 2,583.1 2,490.7 2,631.6 2,813.6 Core net profit 1,706.9 1,620.7 1,594.2 1,654.4 Core FDEPS (MYR) 1.63 1.55 1.53 1.58 Core FDEPS growth(%) 14.7 (5.0) (1.6) 3.8 Net DPS (MYR) 0.38 0.38 0.32 0.33 Core FD P/E (x) 8.4 8.8 9.0 8.6 P/BV (x) 1.3 1.1 1.1 1.0 Net dividend yield (%) 2.8 2.8 2.3 2.4 Book value (MYR) 10.90 12.45 12.65 13.76 ROAE (%) 15.8 13.2 11.5 10.9 ROAA (%) 0.9 0.8 0.8 0.7 §  1QFY16 results below expectations mainly due to lower-than-expected results from HL Bank (due to Bk of Chengdu). §  FY16/17/18 earnings trimmed by 6%/4%/2% on cut in HL Bank’s earnings. §  Prefer HLFG for exposure to HL Bank - BUY maintained with a lower RNAV-TP of MYR16.20 (MYR16.90 before). MY: Dialog Group (DLG MK) Share Price: MYR1.64 Target Price: MYR1.90 Recommendation: Buy Thong Jung Liaw (603) 2297 8688 tjliaw@maybank-ib.com Results Review: 1QFY1/16 results in line FYE Jun (MYR m) FY14A FY15A FY16E FY17E Revenue 2,551.7 2,358.2 2,640.0 2,640.0 EBITDA 280.9 292.0 294.9 295.7 Core net profit 211.0 253.2 262.5 277.1 Core EPS (sen) 4.3 5.1 5.3 5.6 Core EPS growth (%) 6.5 18.3 3.7 5.5 Net DPS (sen) 2.1 2.2 2.1 2.2 Core P/E (x) 38.1 32.2 31.0 29.4 P/BV (x) 5.2 4.1 3.8 3.5 Net dividend yield (%) 1.3 1.4 1.3 1.4 ROAE (%) 14.5 14.3 12.8 12.5 ROAA (%) 6.9 7.4 7.6 8.2 EV/EBITDA (x) 34.7 27.3 29.4 29.7 Net debt/equity (%) 29.3 net cash 20.4 23.1 §  Associates, notably the tank terminal operations, were the key performance/earnings driver. §  Remains a long-term, sustainable growth stock, leveraging on its Pengerang operations (tank terminals and regas projects). §  Reiterate BUY with an unchanged MYR1.90 SOP-based TP. SG: Singapore External Trade, October ‘15 Suhaimi Ilias (603) 2297 8682 suhaimi_ilias@maybank-ib.com Zamros Dzulkafli (603) 2082 6818 zamros.d@maybank-ib.com Economics Research: Different strokes… §  Total exports down as NODX and oil exports fell to offset gains in NORX §  Total imports were also lower on continued drop in oil imports but non-oil imports rose for the third month in a row §  Widening trade surplus and rising non-oil imports over the past 2-3 months suggest improving contributions of net external demand and of domestic demand to GDP growth MY: Technicals Lee Cheng Hooi (603) 2297 8694 chenghooi.lee@maybank-ib.com Technical Research: Index staged a “Dead Cat Bounce” §  PPHB - On a very strong upward Wave 3 and 5 move. §  FBMKLCI – Index had a “Dead Cat Bounce” yesterday. §  Supports of 1,635 and 1,658 may be weaker. §  Resistances of 1,661 and 1,686 will cap any rebound.