Versatile Creative: To explore MYR62.5m e-concept stores for IRISPAY station. Versatile Creative has entered into a memorandum of agreement (MOA) with Iris World Marketing S/B for both parties to explore the development of 250 IRISP

COMPANY RESEARCH Sunway | Disposing Sunway Clio properties Wei Sum Wong Sunway REIT | Acquires Sunway Clio Kevin Wong Malaysia Marine & Heavy Engineering | Upgrade to HOLD Thong Jung Liaw

MACRO RESEARCH Malaysia | Public Bank Mixed Technical Signals Nik Ihsan Raja Abdullah

NEWS Outside Malaysia Other News

COMPANY RESEARCH

Malaysia Company Update Sunway (SWB MK) by Wei Sum Wong Share Price: MYR4.32 Target Price: MYR4.04 Recommendation: Hold Disposing Sunway Clio properties We are positive on the disposal of Sunway Clio properties. The disposal will help to lower Sunway’s net gearing to 0.53x (from 0.58x in end 2017) and recycle the capital for other businesses such as healthcare and property development. We fine-tune our earnings forecasts by -0.9% to +1.3% to factor in the disposal. Our TP is largely unchanged at MYR4.04 (+1sen), pegged to 0.7x RNAV. Maintain HOLD. FYE Dec (MYR m) FY15A FY16A FY17E FY18E Revenue 4,448.4 4,725.9 5,579.1 6,630.5 EBITDA 427.2 531.1 811.0 1,023.3 Core net profit 590.7 547.4 538.8 614.3 Core EPS (sen) 33.7 29.5 26.1 29.8 Core EPS growth (%) (1.6) (12.5) (11.4) 14.0 Net DPS (sen) 37.0 12.1 7.8 8.9 Core P/E (x) 12.8 14.7 16.5 14.5 P/BV (x) 1.2 1.2 1.1 1.1 Net dividend yield (%) 8.6 2.8 1.8 2.1 ROAE (%) na na na na ROAA (%) 4.1 3.1 2.9 3.2 EV/EBITDA (x) 21.7 18.3 17.1 14.5 Net debt/equity (%) 45.2 40.9 48.6 57.2 Wei Sum Wong    (603) 2297 8679    weisum@maybank-ib.com

Malaysia TP Revision Sunway REIT (SREIT MK) by Kevin Wong Share Price: MYR1.71 Target Price: MYR1.90 Recommendation: Buy Acquires Sunway Clio We are positive on the purchase of Sunway Clio Property as it is EPU and DPU accretive and complements its existing properties. We raise our FY18-19E earnings estimates by 0.6-1.4% after imputing the asset injection and consequently nudge up our TP to MYR1.90 (+5sen). FYE Jun (MYR m) FY15A FY16A FY17E FY18E Revenue 453.5 507.0 522.6 579.4 Net property income 340.8 373.9 395.8 443.1 Distributable income 256.6 270.6 268.6 300.9 DPU (sen) 7.8 8.3 8.2 9.1 DPU growth (%) 4.3 5.2 (1.0) 11.6 Price/DPU(x) 21.8 20.7 20.9 18.7 P/BV (x) 1.3 1.2 1.3 1.3 DPU yield (%) 4.6 4.8 4.8 5.3 ROAE (%) 14.1 8.1 6.7 7.5 ROAA (%) 4.0 4.0 4.1 4.4 Debt/Assets (x) 0.3 0.3 0.3 0.4 Kevin Wong    (603) 2082 6824    kevin.wong@maybank-ib.com

Malaysia Rating Change Malaysia Marine & Heavy Engineering (MMHE MK) by Thong Jung Liaw Share Price: MYR0.71 Target Price: MYR0.75 Recommendation: Hold Upgrade to HOLD 1H17 results are in line but we cut FY18-19 earnings to reflect further operating challenges ahead. Nonetheless, we posit that its share price, having fallen 31% YTD, already reflects most of the negatives. With limited downside, we see values emerging. For that, we upgrade MMHE to a HOLD with a revised TP of MYR0.75 (-17%), based on 0.5x NTA (vs. 1x EV/ order backlog previously). FYE Dec (MYR m) FY15A FY16A FY17E FY18E Revenue 2,459.0 1,191.3 1,003.1 992.7 EBITDA 157.9 84.3 66.4 63.9 Core net profit 93.3 (1.3) (24.5) (25.4) Core EPS (sen) 5.8 (0.1) (1.5) (1.6) Core EPS growth (%) (46.1) nm nm nm Net DPS (sen) 0.0 0.0 0.0 0.0 Core P/E (x) 12.2 nm nm nm P/BV (x) 0.4 0.4 0.5 0.5 Net dividend yield (%) 0.0 0.0 0.0 0.0 ROAE (%) 1.7 (5.2) (1.9) (1.1) ROAA (%) 2.1 (0.0) (0.7) (0.7) EV/EBITDA (x) 4.8 9.7 2.6 3.8 Net debt/equity (%) net cash net cash net cash net cash Thong Jung Liaw    (603) 2297 8688    tjliaw@maybank-ib.com

MACRO RESEARCH MY: TRADERS’ ALMANAC Public Bank Mixed Technical Signals by Nik Ihsan Raja Abdullah Technical Research FBMKLCI bucked the regional downtrend to end the day 1.29pts higher yesterday. At day’s end, the benchmark rose 0.07% to 1,771.90. Broader market, however, remained weak with losers outpacing gainers by 449 to 346. A total of 1.75b shares worth MYR1.75b changed hands. Lackluster performance in overnight US markets could attract selling pressure while investors may turn risk-off ahead of the weekend break. Nik Ihsan Raja Abdullah    (603) 2297 8694    nikmohdihsan.ra@maybank-ib.com Tee Sze Chiah    (603) 2082 6858    szechiah.t@maybank-ib.com

NEWS Outside Malaysia: U.S: Summer swoon in U.S. services puts growth between gloom and boom. While the abrupt slowdown in America’s service industries may be no more than a brief summer swoon, it doesn’t help the U.S. economy break out of its growth rut. The Institute for Supply Management’s non-manufacturing index, representing industries that account for almost 90% of the economy, fell to 53.9 in July, the weakest level since August and below the lowest estimate in a Bloomberg survey. The decline, seen in data, is at odds with an ISM manufacturing gauge earlier this week, which showed factory managers were more upbeat than their service-industry counterparts. (Source: Bloomberg) U.S: Consumer comfort reached seven-week high. Americans last week started feeling much more confident about the economy, pushing the Bloomberg Consumer Comfort Index to a seven-week high and partly reversing an early-summer slump, figures released showed. Weekly consumer comfort measure rose to 49.6 from prior week’s 48.6. Gauge of current views of economy jumped to 48.6 from 45, the largest one-week gain since October. Index of personal finances little changed at 58 after 58.1. Measure of buying climate eased to 42.2 from 42.6. (Source: Bloomberg) U.S: The decline in filings for unemployment benefits last week underscores steady demand for workers in a tightening job market, Labor Department figures showed. Jobless claims decreased by 5k to 240k. Continuing claims crept up by 3k to 1.968m in week ended June 22 (data reported with one-week lag). Four-week average of initial claims, a less-volatile measure than the weekly figure, declined to 241,750 from 244,250 in prior week. The latest figure is little changed from the average so far this year. A shortage of qualified workers is making employers reluctant to let go of the people they already have, keeping the underlying trend in jobless claims near the lowest level in more than four decades. (Source: Bloomberg) Other News: Globaltec Formation: NuEnergy gets nodfor Indonesia coal bed methane plan. Its Australia-listed 44%-owned subsidiary NuEnergy Gas Ltd has received approval to prepare a plan of development for its Tanjung Enim production sharing contract (PSC) in South Sumatra, Indonesia. The approval marks a significant milestone for Globaltec as it works towards delivering the group’s first coal bed methane supply. NuEnergy will now work with Indonesian regulator SKK Migas, which granted the approval for preparing the plan for development. The clean energy company is aiming to submit its plan of development proposal to Indonesia’s ministry of energy and mineral resources through SKK Migas before the end of the year. (Source: The Edge Financial Daily) Versatile Creative: To explore MYR62.5m e-concept stores for IRISPAY station. Versatile Creative has entered into a memorandum of agreement (MOA) with Iris World Marketing S/B for both parties to explore the development of 250 IRISPAY station E-Concept Stores throughout Malaysia with an estimated GDV of about MYR62.5m. Upon entering into the MOA, Versatile will conduct an evaluation of the viability and feasibility of the project and a due-diligence exercise on Iris World. The definitive agreement is to be drawn up within a period of three months. (Source: The Sun Daily) Handal Resources: Wins onshore crane overhaul, repair services contract. Handal Resources has bagged a contract to provide onshore overhaul, major repair and refurbishment services for offshore cranes for ExxonMobil Exploration and Production Malaysia Inc at an undisclosed sum. The contract works already commenced on July 27 2017, effective for three years ending July 26, 2020, with an option to extend for a year. (Source: The Sun Daily) Tune Protect: Appoints two top executives. Tune Protect Group has appointed Khoo Ai Lin as CEO of the group’s 83.3%-owned subsidiary Tune Insurance Malaysia. Tune Protect also announced the appointment of Khor Kee Eng as the group’s chief actuary to lead its actuarial function. (Source: The Edge Financial Daily)