[Maybank IB] Today's Research - Malaysia

COMPANY RESEARCH Globetronics Technology | Lowering expectations Ivan Yap Malaysia Airports | The moment of truth Mohshin Aziz

SECTOR RESEARCH Malaysia Media | TV digitization in full swing Samuel Yin Shao Yang

MACRO RESEARCH Malaysia | Volatile within a small range Lee Cheng Hooi

NEWS Outside Malaysia Other News

COMPANY RESEARCH

Malaysia Company Update Globetronics Technology (GTB MK) by Ivan Yap Share Price: MYR5.35 Target Price: MYR7.35 Recommendation: Buy Lowering expectations Recent development in the next generation premium smartphone to be launched in Sep 2016 suggests that the new 3D-imaging capability would likely to be made available only for the larger screen (5.5”) variant. Conservatively, we cut our FY16/17 net profit forecasts by 21%/8% to account for lower sensor volume; our new TP is MYR7.35 (-8%) on unchanged 17x CY17 EPS peg. Maintain BUY. FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 321.4 355.0 399.7 436.3 EBITDA 98.1 108.6 114.9 131.0 Core net profit 52.6 64.4 72.5 92.8 Core EPS (sen) 19.0 22.9 25.8 33.0 Core EPS growth (%) 27.3 20.7 12.5 27.9 Net DPS (sen) 18.0 23.0 23.2 29.7 Core P/E (x) 28.1 23.3 20.7 16.2 P/BV (x) 5.4 5.3 5.1 5.0 Net dividend yield (%) 3.4 4.3 4.3 5.6 ROAE (%) 19.6 23.0 25.2 31.3 ROAA (%) 15.8 18.5 19.9 24.8 EV/EBITDA (x) 7.5 9.7 11.6 10.2 Net debt/equity (%) net cash net cash net cash net cash Ivan Yap    (603) 2297 8612    ivan.yap@maybank-ib.com

Malaysia Results Preview Malaysia Airports (MAHB MK) by Mohshin Aziz Share Price: MYR6.06 Target Price: MYR5.45 Recommendation: Hold The moment of truth Passenger traffic in Malaysia based airports grew by a paltry 0.5% YoY whilst the Turkish airport grew by 19.7% in 2015. Both are a let-down and our projections for 2016 are not much better at only 2.5% growth for Malaysia and high teens for the Turkish operations. We keep our earnings forecasts, target price and HOLD call for now pending the 4Q15 results, to be released tomorrow. We wait for clarity on the various accounting policy changes, impact of klia2 repairs and other lumpy cost items. FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 4,134.0 3,343.7 3,918.1 4,298.3 EBITDA 899.6 815.0 1,980.5 1,828.0 Core net profit 361.8 148.9 (11.3) 152.7 Core EPS (sen) 29.4 11.1 (0.7) 9.7 Core EPS growth (%) (20.2) (62.3) nm nm Net DPS (sen) 7.3 2.8 0.0 2.4 Core P/E (x) 20.6 54.8 (839.8) 62.2 P/BV (x) 1.2 1.1 1.1 1.0 Net dividend yield (%) 1.2 0.5 0.0 0.4 ROAE (%) 5.7 2.2 (0.1) 1.7 ROAA (%) 3.2 0.9 (0.1) 0.7 EV/EBITDA (x) 15.5 15.9 7.1 7.8 Net debt/equity (%) 55.7 57.7 51.1 51.8 Mohshin Aziz    (603) 2297 8692    mohshin.aziz@maybank-ib.com

SECTOR RESEARCH MY: Malaysia Media Sector Note by Samuel Yin Shao Yang TV digitization in full swing We organized a site visit to MYTV Broadcasting’s (MYTV) Digital Multimedia Broadcasting Hub. With 85% of the population currently covered by the digital terrestrial TV broadcasting (DTTB) platform, we opine that the TV digitization process is in full swing. More importantly, the rate of new FTA TV channels launched will now be gradual and the impasse over the annual rental fees that MYTV intends to charge FTA TV channels may be resolved soon. Maintain BUY on MPR, HOLD on ASTRO. Samuel Yin Shao Yang    (603) 2297 8916    samuel.y@maybank-ib.com Jade Tam    (603) 2297 8687    jade.tam@maybank-ib.com

MACRO RESEARCH MY: Technicals Technical Research by Lee Cheng Hooi Volatile within a small range The FBMKLCI gained 6.22 points to close at 1,649.96 yesterday, while the FBMEMAS and FBM100 rose 38.39 points and 35.85 points, respectively. In terms of market breadth, the gainer-to-loser ratio was 497-to-297, while 339 counters were unchanged. A total of 1.52b shares were traded valued at MYR1.54b. Lee Cheng Hooi    (603) 2297 8694    chenghooi.lee@maybank-ib.com

NEWS Outside Malaysia: E.U: Draghi says ECB will act if market turmoil threatens outlook. The European Central Bank will take measures to ensure its monetary policy reaches the real economy if that appears threatened by financial-market turbulence, President Mario Draghi said. “In the light of the recent financial turmoil, we will analyze the state of transmission of our monetary impulses by the financial system and in particular by banks,” Draghi told European Parliament lawmakers in Brussels. In addition, the ECB will examine the impact of renewed declines in energy prices and “if either of these two factors entail downward risks to price stability, we will not hesitate to act,” he said. (Source: Bloomberg) China: Exports in January was eclipsed by an even bigger tumble in imports, leaving a record trade surplus for the world’s biggest trading nation. Overseas shipments declined 11.2% YoY in January in U.S. dollar, the customs administration said, compared with a 1.4% YoY drop in December. Imports extended a stretch of declines to 15 months, tumbling 18.8% YoY, leaving a record trade surplus of USD 63.3b. The slide in exports suggests the yuan’s depreciation since August has yet to result in a sustained boost to the competitiveness of China’s factories. (Source: Bloomberg) Singapore: New home sales posted their worst start to the year since 2009, as tighter mortgage curbs cooled demand in Asia’s second-most expensive housing market. Developers sold 322 units in January, down 16% QoQ from the 384 units in December, according to data released by the Urban Redevelopment Authority. While annual sales rose just under 2% to 7,440 units in 2015, it’s still half the clip recorded in 2013. Singapore home prices dropped for a ninth quarter, posting the longest losing streak in 17 years, as tighter mortgage curbs cooled demand. (Source: Bloomberg) Thailand: Economy grew more than estimated in 4Q 2015 as the military government’s series of stimulus measures started to bear fruit, countering a slowdown in exports. GDP expanded 2.8% YoY in the three months through December, the National Economic and Social Development Board said. (Source: Bloomberg) Other News: Water: New water tariffs expected from Air Selangor. The management of Pengurusan Air Selangor Sdn Bhd (Air Selangor) will submit its three-year business plan, which is expected to include water tariffs in Selangor, Kuala Lumpur and Putrajaya, to the National Water Services Commission (Span) next month. The business plan takes into consideration the operational costs as well as water management capital costs in the three areas. (Source: The Edge Financial Daily) Mah Sing: To repurchase bonds for MYR337.1m. Mah Sing Group is repurchasing MYR315m nominal value of its redeemable convertible secured bonds (CBs) at a purchase consideration of MYR337.1m. The property developer had on June 10, 2011 issued MYR325m nominal value of CBs and on June 25, 2015 it announced the conversion of MYR10m nominal value of the CBs to 8.77 million 50 sen shares at MYR1.14 conversion price. The CBs are currently in-the-money given the conversion price of the CBs of RM1.14. The CBs repurchase allowed the company to avoid the issuance of approximately 276.3 million Mah Sing shares representing approximately 11.5% of the existing issued and paid-up share capital of Mah Sing as at Feb 12, 2016. (Source: The Sun Daily) TSR Capital: Bags MYR240m condo job. TSR Capital has bagged a MYR240m contract from Putrajaya Homes Sdn Bhd to build two blocks of 19-storey and 18-storey condominiums and two blocks of multilevel car park in Putrajaya. The project involves the construction of common facilities, drainage and retention pond, piling works, associated infrastructure and landscape works. The project is for a duration of 36 months and is expected to be completed by February 2019. (Source: The Edge Financial Daily) Farm Best: Proposed asset disposals will pare down Farms Best’s debt. Farm Best proposed asset sales to CAB Cakaran Corp would help to pare down part of its MYR250m debt, plus save it from an annual interest expense of MYR20m. If the sales of the certain assets were to materialise, the poultry farmer’s financials will improve and part of the MYR242m proceeds could be used to reduce its bank borrowings. (Source: The Edge Financial Daily)