Friday, August 11, 2017

Sector Update � Plantation (NEUTRAL, maintain)

Top Calls

Results Note Petronas Chemical (BUY, upgrade)

- Weak 2H already priced in

PCHEM saw a weaker 2Q17 whereby revenue of RM3.9bn and core net profit of RM964m declined 15.7% and 25.6% qoq respectively. EBITDA margin also contracted by 2.7ppt. Results was nevertheless within expectations as product prices weakened and coupled with lower plant utilisation. While we expect further earnings weakness in 2H17, we think that this is already reflected in the stock price. Despite the softer 2H17, we expect PCHEM to register 14% tot EPS growth in 2017. Hence, we upgrade the stock to a BUY and a higher TP of RM8.00.

Other Calls

Sector Update Plantation (NEUTRAL, maintain)

- Rebound in production, exports and inventory

Economic Update Malaysia IPI

- IPI slowed to 4.0% yoy, but exceeded expectations

Economic Update ASEAN Weekly Wrap

- Indonesias GDP likely fall short of 5.2% target for 2017

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