AZRB: 1Q net profit up 45.7% on improved margin, higher property revenue. 1Q17 net profit rose 45.7% to MYR6.12m from MYR4.2m a year ago, on improved margin of construction projects, as well as the inclusion of contribution from the IIUM Medical Centre facilities management concession. Quarterly revenue, however, fell 19.1% to MYR250.19m from MYR309.37m, largely d

COMPANY RESEARCH Allianz Malaysia | 1Q17 results within expectations Desmond Ch'ng Padini | 3QFY17: Flattish bottomline Kevin Wong Wah Seong | 1Q17: In line Thong Jung Liaw Barakah Offshore Petroleum | 1Q17: Below expectations Thong Jung Liaw Alam Maritim | 1Q17: Within expectations Thong Jung Liaw

MACRO RESEARCH Malaysia | Construction Index: correction started Nik Ihsan Raja Abdullah

NEWS Outside Malaysia Other News

COMPANY RESEARCH

Malaysia Results Review Allianz Malaysia (ALLZ MK) by Desmond Ch'ng Share Price: MYR12.52 Target Price: MYR14.05 Recommendation: Buy 1Q17 results within expectations Allianz’s results were in line, with the life division making up 33% of group pretax profit in 1Q17 versus 22% in 1Q16. Allianz offers an exposure to the largest general insurer in Malaysia and one of the fastest growing life insurers. There is no change to our earnings forecasts. Maintain BUY and SOP-TP of MYR14.05. FYE Dec (MYR m) FY15A FY16A FY17E FY18E Net earned premiums 3,504.3 3,690.5 3,701.8 3,758.3 Core profit (MYR m) 308.9 312.1 320.1 334.4 BVPS (MYR) 7.6 8.3 9.3 10.4 P/B (x) 1.7 1.5 1.3 1.2 EVPS (MYR) na na na na PEV (x) na na na na VNB (MYR) na na na na VNB multiple (x) na na na na ROE (%) na na na na ROA (%) 2.3 2.1 1.9 1.8 Desmond Ch'ng    (603) 2297 8680    desmond.chng@maybank-ib.com

Malaysia Results Review Padini (PAD MK) by Kevin Wong Share Price: MYR3.29 Target Price: MYR3.10 Recommendation: Hold 3QFY17: Flattish bottomline 3QFY6/17 results and 4th interim net DPS of 2.5sen were in line. The flattish YoY core earnings were due to higher opex despite its higher revenue. Meanwhile, a special net DPS of 1.5sen was also declared, lifting total DPS for YTDFY17 to 11.5sen. We revise our FY17/18/19E EPS by -3%/+2%/+3% and nudge up TP to MYR3.10 (+10sen) which is pegged to an unchanged 12x FY18 PER (at forward PER mean). FYE Jun (MYR m) FY15A FY16A FY17E FY18E Revenue 977.9 1,301.2 1,507.2 1,685.9 EBITDA 145.3 221.7 234.7 272.9 Core net profit 80.2 136.4 145.9 168.3 Core EPS (sen) 12.2 20.7 22.2 25.6 Core EPS growth (%) (11.8) 70.0 6.9 15.4 Net DPS (sen) 10.0 11.5 11.5 10.0 Core P/E (x) 27.0 15.9 14.8 12.9 P/BV (x) 5.3 4.6 4.0 3.4 Net dividend yield (%) 3.0 3.5 3.5 3.0 ROAE (%) 20.2 31.4 28.9 28.5 ROAA (%) 13.7 19.5 17.1 17.2 EV/EBITDA (x) 4.6 5.8 7.9 6.6 Net debt/equity (%) net cash net cash net cash net cash Kevin Wong    (603) 2082 6824    kevin.wong@maybank-ib.com

Malaysia Results Review Wah Seong (WSC MK) by Thong Jung Liaw Share Price: MYR0.89 Target Price: MYR1.30 Recommendation: Buy 1Q17: In line WSC returning to the black and successfully addressing its debt covenant issue were two key positives in 1Q17. Our earnings forecasts are unchanged, expecting stronger quarters ahead as the Nord Stream 2 (NS2) operations progressively kick in up to 2019. Valuations are inexpensive vis-à-vis growth prospects. Our MYR1.30 TP is pegged to 12x 2018 PER (unchanged). FYE Dec (MYR m) FY15A FY16A FY17E FY18E Revenue 1,839.5 1,276.6 2,150.0 2,198.4 EBITDA 143.3 53.6 233.8 241.3 Core net profit 22.7 (23.3) 77.2 83.5 Core EPS (sen) 2.9 (3.0) 10.0 10.8 Core EPS growth (%) (84.4) nm nm 8.1 Net DPS (sen) 3.0 0.5 0.0 0.0 Core P/E (x) 30.3 nm 8.9 8.2 P/BV (x) 0.6 0.9 0.8 0.7 Net dividend yield (%) 3.4 0.6 0.0 0.0 ROAE (%) 0.9 (23.2) 9.4 9.3 ROAA (%) 0.8 (0.8) 2.7 2.6 EV/EBITDA (x) 12.2 30.4 7.2 6.5 Net debt/equity (%) 73.6 104.7 91.7 72.6 Thong Jung Liaw    (603) 2297 8688    tjliaw@maybank-ib.com

Malaysia Rating Change Barakah Offshore Petroleum (BARAKAH MK) by Thong Jung Liaw Share Price: MYR0.63 Target Price: MYR0.13 Recommendation: Sell 1Q17: Below expectations Barakah reported a core loss of MYR4m in 1Q17. The operating environment will be tough in 2017, owing to low replenishment visibility and the absence of Pan Malaysia T&I works, prompting a substantial cut in our FY17-19 earnings forecasts. We do not rule out an impairment exercise for its KL101 pipelay barge by end-2017. We cut our TP by 79% as we now value Barakah based on 1x EV/replacement value (vs. 12x FY18 PER previously). FYE Dec (MYR m) FY15A FY16A FY17E FY18E Revenue 592.6 622.6 340.0 399.0 EBITDA 38.6 58.9 31.4 74.4 Core net profit 12.8 10.0 (30.7) 3.3 Core EPS (sen) 1.5 1.2 (3.6) 0.4 Core EPS growth (%) (82.8) (21.8) nm nm Net DPS (sen) 0.0 0.0 0.0 0.0 Core P/E (x) 42.5 54.4 nm 165.3 P/BV (x) 1.2 1.1 1.2 1.2 Net dividend yield (%) 0.0 0.0 0.0 0.0 ROAE (%) 5.0 3.5 (7.5) 0.8 ROAA (%) 1.7 1.3 (4.0) 0.5 EV/EBITDA (x) 21.8 12.4 19.1 7.4 Net debt/equity (%) 18.6 35.9 31.6 18.1 Thong Jung Liaw    (603) 2297 8688    tjliaw@maybank-ib.com

Malaysia Results Review Alam Maritim (AMRB MK) by Thong Jung Liaw Share Price: MYR0.22 Target Price: MYR0.13 Recommendation: Sell 1Q17: Within expectations As expected, Alam remained in the red in 1Q17, on low overall OSV utilization. Our earnings forecasts are unchanged. The OSV market will remain tough over the next 12 months. Optimising costs and OSV utilisation, and preserving cash flows remain key in 2017. Addressing its MYR75m MTN due in 2017/18 is also a priority. Valuations are expensive vis-à-vis its peers. Our TP is pegged to 12x 2018 PER (unchanged). FYE Dec (MYR m) FY15A FY16A FY17E FY18E Revenue 350.2 247.5 246.0 282.1 EBITDA 71.9 22.2 44.2 54.9 Core net profit 63.1 (90.4) 0.5 9.8 Core EPS (sen) 6.8 (9.8) 0.1 1.1 Core EPS growth (%) 5.9 nm nm 1,824.1 Net DPS (sen) 0.0 0.0 0.0 0.0 Core P/E (x) 3.2 nm 390.2 20.3 P/BV (x) 0.2 0.3 0.3 0.3 Net dividend yield (%) 0.0 0.0 0.0 0.0 ROAE (%) 5.2 (17.0) 0.1 1.3 ROAA (%) 4.9 (8.3) 0.1 1.0 EV/EBITDA (x) 6.5 15.6 6.2 4.5 Net debt/equity (%) 8.2 13.8 10.0 6.0 Thong Jung Liaw    (603) 2297 8688    tjliaw@maybank-ib.com

MACRO RESEARCH MY: TRADERS’ ALMANAC Construction Index: correction started by Nik Ihsan Raja Abdullah Technical Research FBMKLCI ended the day 0.45pts higher at 1,765.34 amid a volatile trading session. Broader market, however, was bearish with losers outpacing gainers by 680 to 235. Market turnover was 2.61b shares valued at MYR2.16b. Technically, the short-term outlook for FBMKLCI remains weak. The benchmark index could continue to trend lower over the next few days as there is no reversal signal yet. Having said so, we expect the current downturn to be temporary. Nik Ihsan Raja Abdullah    (603) 2082 6819    nikmohdihsan.ra@maybank-ib.com Tee Sze Chiah    (603) 2082 6858    szechiah.t@maybank-ib.com

NEWS Outside Malaysia: U.S. Consumer spending signals second-quarter rebound on track. The consumer is on track for a second- quarter comeback after a weak stretch at the start of the year, as Americans kept up spending in line with income gains in April, Commerce Department figures showed. Purchases increased 0.4% MoM, most since December, after 0.3% MoM rise in March. Incomes rose 0.4% MoM after 0.2% MoM gain. Price gauge tied to consumption rose 0.2% MoM m/m and rose 1.7% YoY. Excluding food and energy, prices rose 0.2% MoM and 1.5% YoY. (Source: Bloomberg) U.S: Rise in home prices in 20 cities reflects lean inventory. A larger-than-forecast increase in home prices in 20 U.S. cities in March underscores both steady demand and lean inventory, figures from S&P CoreLogic Case-Shiller showed. The 20-city property values index rose 5.9% YoY from March 2016 (forecast 5.7% YoY), matching February as biggest since July 2014. National price gauge climbed 5.8% YoY in the 12 months through March. Seasonally adjusted 20-city index rose 0.9% from a month earlier. (Source: Bloomberg) E.U: Euro-area economic confidence fell for the first time this year and consumers’ outlook for inflation weakened, pointing to subdued price pressures. The European Commission’s index of executive and consumer sentiment fell to 109.2 in May from a revised 109.7 in April. While that fell short of economists’ expectations, the gauge remains close to the highest level in a decade. (Source: Bloomberg) S. Korea: June manufacturers’ confidence unchanged at 84. Manufacturers’ business confidence in May was at 84, according to Bank of Korea statement. Proportion of companies surveyed complaining about weak domestic demand rises to 23.8% from 23.4% in last survey. Confidence index for non-manufacturers for June rises to 80 from 78. Results based on survey conducted May 17-24, with responses from 1,747 manufacturers and 1,103 non-manufacturers. Readings below 100 indicate that pessimists outnumber optimists. (Source: Bloomberg) Other News: AZRB: 1Q net profit up 45.7% on improved margin, higher property revenue. 1Q17 net profit rose 45.7% to MYR6.12m from MYR4.2m a year ago, on improved margin of construction projects, as well as the inclusion of contribution from the IIUM Medical Centre facilities management concession. Quarterly revenue, however, fell 19.1% to MYR250.19m from MYR309.37m, largely due to a dip in revenue of the construction division which was mitigated by higher property revenue. As at March 31, 2017, AZRB's construction segment has an outstanding order book of MYR3.7b. (Source: The Edge Financial Daily) MY E.G. Services: 3Q net profit up 63% on higher transaction volumes. The group saw its 3QFY6/17 net profit rise 62.8% on higher transaction volumes from the online renewal of foreign workers’ permits, foreign workers rehiring programme services and foreign workers’ insurance from both FWP and FWR services. Net profit grew to MYR53.9m or 1.5 sen per share in 3QFY6/17 from MYR33.1m or 0.9 sen per share in 3QFY6/6. (Source: The Edge Financial Daily) Ekovest: 3Q net profit largely flat on one-off expense. 3QFY6/17 was largely flat at MYR11.06m from MYR11.08m a year ago, mainly due to a one-off expense of MYR22.62m on recognition of fair value adjustment pursuant to the granting of the Employees' Share Option Scheme. Quarterly revenue rose 57.9% to MYR291.75m in 3QFY6/17 from MYR184.77m in 3QFY6/16, mainly due to the commencement of preliminary and construction work for Setiawangsa-Pantai Expressway. (Source: The Edge Financial Daily)