OldTown, Freight Management Holdings,Tex Cycle Technology, KESM Industries

SECTOR FOCUS OF THE DAY

Gaming Sector : Earnings growth priced in            Underweight

Sell casinos due to stretched valuations. We are recommending SELLs on Genting Malaysia (GenM), Genting Bhd and Genting Singapore (GenS) as their share prices have caught up with valuations. We believe that the run-up in the share prices of the casino companies has already reflected the net profit growth of 3% to 13% of the casino companies under our coverage for FY18F. Casino companies in Macau are trading at a simple average FY18F PE of 20x (ex-SJM and Nagacorp) and average EV/EBITDA of 11.3x (ex-Nagacorp). In comparison, Genting Bhd is trading at an FY18F fully diluted PE of 20.3x while GenM's FY18F PE is 16.6x. GenS is trading 34.8x FY18F EPS.

NFO in the doldrums. We do not foresee a recovery in the NFO industry in Malaysia anytime soon. NFOs (number forecasting operators) have been hit hard by illegal operators. Also, we believe that the younger population are more attracted to online gaming. We forecast industry ticket sales to inch down by 1.3% in 2017F compared with an estimated decline of 2.2% in 2016. The silver lining is the decent dividend yields of the NFOs. For FY17F, we forecast Berjaya Sports Toto's dividend yield at 5.0% and Magnum's dividend yield at 5.7%. We have HOLD recommendations on both companies.

Others :

APM Automotive : Stronger earning YoY due to production drive in 2H16              Hold

Technology Sector : 3D IC adoption to spur capital investments  Neutral

MISC : No impact from East Malaysia cabotage exemption           Hold

QUICK TAKE

Plantation Sector : News flow for week 1 - 5 May              Neutral

STOCKS ON RADAR

OldTown, Freight Management Holdings,Tex Cycle Technology, KESM Industries

ECONOMIC HIGHLIGHT

Malaysia :  2017 a good year for exports

NEWS HIGHLIGHTS

Tenaga Nasional : TNB’s RM6bil Manjung 5 plant project on track for production

Construction Sector : A surprise from Weida

Property Sector : Inta Bina counts on affordable housing projects

DISCLAIMER:

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.