[Maybank IB] Today's Research - Malaysia

COMPANY RESEARCH Genting Bhd | Windfall from potential TauRX listing? Samuel Yin Shao Yang

MACRO RESEARCH Malaysia | Some temporary selling respite Lee Cheng Hooi

NEWS Outside Malaysia Malaysia

COMPANY RESEARCH

Malaysia Company Update Genting Bhd (GENT MK) by Samuel Yin Shao Yang Share Price: MYR7.10 Target Price: MYR9.05 Recommendation: Buy Windfall from potential TauRX listing? The WSJ reported that 20.7%-owned TauRX may be listed at a valuation of ~USD15b in 2017. We estimate that at USD15b, TauRX’s listing will add MYR10.4b or 40% to our SOP for GENT. This implies a 40% upside from this one listing alone. Even without TauRX, our SOP-TP of MYR9.05 for GENT already implies 27% upside. TauRX supports our view that GENT remains deep in value. GENT is one of our top BUY pick for the market. FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 17,111.7 18,216.5 18,259.6 19,322.0 EBITDA 6,116.4 6,627.5 5,649.6 6,746.8 Core net profit 1,681.4 1,777.4 1,427.8 1,848.9 Core FDEPS (sen) 45.5 46.2 35.3 44.8 Core FDEPS growth(%) (27.2) 1.5 (23.5) 26.7 Net DPS (sen) 37.5 4.0 3.1 3.9 Core FD P/E (x) 15.6 15.4 20.1 15.9 P/BV (x) 1.0 1.0 0.9 0.9 Net dividend yield (%) 5.3 0.6 0.4 0.5 ROAE (%) 7.2 6.8 5.2 6.4 ROAA (%) 2.5 2.5 1.9 2.4 EV/EBITDA (x) 8.5 7.3 7.6 6.7 Net debt/equity (%) net cash net cash net cash net cash Samuel Yin Shao Yang    (603) 2297 8916    samuel.y@maybank-ib.com

MACRO RESEARCH MY: Technicals Technical Research by Lee Cheng Hooi Some temporary selling respite HEVEA - On a very strong upward Wave 3 and 5 move. FBMKLCI – Some temporary selling respite. Supports of 1,635 and 1,663 may be weaker. Resistances of 1,665 and 1,690 will cap any rebound. Lee Cheng Hooi    (603) 2297 8694    chenghooi.lee@maybank-ib.com

NEWS Outside Malaysia: E.U: Euro-area inflation was weaker than economists predicted in December, when the European Central Bank stepped up its stimulus program. Consumer prices rose an annual 0.2% YoY, the European Union’s statistics office said. (Source: Bloomberg) Germany: Joblessness fell more than anticipated in December in a sign that economic momentum will continue to be underpinned by household spending. The number of people out of work declined by a seasonally adjusted 14,000 to 2.757 million, the Federal Labor Agency in Nuremberg said. The unemployment rate remained unchanged at 6.3%, the lowest level since German reunification. (Source: Bloomberg) China: Central bank conducted the biggest reverse-repurchase operations since September, adding funds to the financial system after money-market rates surged and equities slumped. The People’s Bank of China offered CNY 130b (USD 19.9b) of seven-day reverse repos at an interest rate of 2.25%. The monetary authority suspended the operations in the last auction window on Dec. 31, ending a six- month run of cash injections that helped drive borrowing costs lower in an economy estimated to grow at the slowest pace in more than two decades. (Source: Bloomberg) Malaysia: IPO: Lotte said to explore MYR2.16b IPO for Malaysian unit. Lotte Chemicals Corp, a South Korean plastics manufacturer, is exploring an initial public offering (IPO) of its Malaysian petrochemicals arm that could raise more than USD500m (MYR2.16b), people with knowledge of the matter said. The unit, Lotte Chemical Titan Holding Sdn Bhd, could sell shares in Kuala Lumpur as soon as the second half of this year but a decision of whether to proceed with a listing of the Malaysian unit, and details such as the fundraising amount have not been set, the people said. Plastics produced by Lotte Chemical Titan include polyethylene, used in shopping bags and toys, as well as polypropylene, which can be found in battery casings and car parts. (Source: The Edge Financial Daily). LBS Bina: Sets MYR1.2b sales target for FY16. LBS Bina Group has set a sales target of MYR1.2b for the financial year ending Dec 31, 2016, which it expects will be driven by planned launches worth MYR2.5b in gross development value (GDV) for the year and its unbilled sales of MYR993m as at Dec 31, 2016. LBS managing director Tan Sri Lim Hock San announced that the company managed to meet its MYR1b sales target for FY15, when it registered total sales of MYR1.029b, a 60% improvement from its MYR644m sales in the previous year. For 2016, the company will be launching 15 projects with a total GDV of MYR2.5b; these are spread out in the Klang Valley, Pahang and Batu Pahat. (Source: The Edge Financial Daily) Petronas Dagangan: Braces for tough year. Petronas Dagangan, the marketing arm of Petroliam Nasional, said 2016 will be another tough year for the company and the industry per se, as it expects the turmoil in the oil market to continue. In a bid to counter the impact from the market turmoil, managing director and chief executive director, Ibrahimnuddin Yunus said the company will maintain its strategic initiatives last year, which include being prudent and managing inventory at an optimum level and continue optimal cost-cutting measures, as well as expenditures while looking at being very efficient in our supplying and distribution this year. (Source: The Sun Daily)