FW: RHB | Singapore | Loans Growth The Strongest In Three Years

 

 

 

 

 

Economic Research			28 February 2018
Singapore
Economic Update
Loans Growth The Strongest In Three Years   Singapore’s M3, including Asian currency units, picked up to 4.5% YoY in January. This was mainly on the back of a stronger growth in net foreign positions during the month, while government deposits declined at a slower pace. These were, however, partly offset by slower increases in both public and private credit growth. Going forward, we maintain our expectations for M3 to accelerate to +6.2% in 2018 from 4.1% in 2017. This is premised on a strong SGD, rising economic prospects, and a pick-up in property transactions.   Economists: Vincent Loo Yeong Hong  | +603 9280 2172 Aris Nazman Maslan  | +603 9280 2184
To access our recent reports please click on the links below: 26 February : IPI Picks Up In Early 2018 26 February : Inflation Stagnated in January 19 February: 2017 GDP Beat Forecasts, Growth To Slow But Broaden 19 February: January NODX Growth Shows Broadening Signs 15 February: Budget 2018: GST Hike, E-Commerce Tax Expected
Economics Team
Arup Raha	Group Chief Economist	arup.raha@rhbgroup.com		+65 6232 3896
Peck Boon Soon	Chief ASEAN Economist	bspeck@rhbgroup.com		+603 9280 2163
Vincent Loo Yeong Hong	Malaysia, Vietnam	vincent.loo@rhgroup.com		+603 9280 2172
Rizki Fajar	Indonesia, Philippines	rizki.fajar@rhbgroup.com		+6221 2970 7065
Aris Nazman Maslan	Malaysia, Vietnam	mohd.aris.nazman@rhbgroup.com		+603 9280 2184

 

 

 

 

FW: RHB FIC Credit Markets Update - 28/2/18

 

 

28 February 2018

Credit Markets Update

           

USTs Fall After Fed Powell Testimony; Malaysia CPI Jan 18 Print Today.

MYR Credit Market:

¨      MGS ended mixed; USD strengthens. The reopening of 10y MGS 11/27 garnered a decent BTC of 2.07x with an average yield of 4.055%, a healthier demand compared to similar auctions in Jul 17 and Dec 17. The yields on longer end of the curve fell further which saw the 10y and 30y MGS supported at 4.03% (-1.9bps) and 4.82% (-1.3bps) ahead of Malaysia’s inflation reading Jan 18 scheduled later today. The 3y MGS yields ended lower to 3.38% (-0.4bps) while the 5y MGS weakened to 3.62% (+2.1bps). The MYR seen paring gains as it traded -0.13% lower against the greenback, closing at 3.9080/USD, on the back of USD rebound.

¨      Govvies trading activities picked up strongly with transactions recorded at MYR4.5bn. Trade volume for govvies tripled from the previous day with concentration largely skewed towards the reopened 10y MGS 11/27, top traded security for the day which amounted to MYR1.1bn. The 10y benchmark MGS last traded stronger at 4.03% (-1.9bps). We opine 10-year benchmark MGS above 4.00% seen attracting some real money interest.  The benchmarks MGS 3y 02/21 and 5y 03/22 saw MYR130m and MYR161m change hands each where yields ended mixed at 3.38% (-0.4bps) and 3.62% (+2.1bps) respectively. The benchmarks 5y, 7y and 15y GIIs were also actively traded with MYR111m for the 04/22, MYR130m for the 08/25 and MYR220m for the 06/33 transacted respectively, dealt at 3.89% (-0.1bp), 4.11% (-0.2bps) and 4.59% (-0.7bps). The off-benchmarks MGS 11/26 and 08/23 also drew strong trade interest with total trades of MYR425m and MYR414m with the respective yields edged up to 4.11% (+0.7bps) for the longer-dated security and the former at 3.83% (+2bps).

¨      Secondary flows remained robust as trade volume recorded for corporate bonds/sukuks just under MYR520m. The most actively traded security was TENAGA 8/37 with MYR135m recorded, rallying to 5.10% (-0.8bps). This was followed by DANAINFRA 5/32 and 4/45 with combined transactions of MYR70m where yields climbed to 4.85% (+4.5bps) and 5.27% (+6.8bps) respectively while TMSB 22s, 25s, 26s, 33s and 35s saw combined trades of MYR60m which saw yields ending mixed between 4.60% and 5.50% (ranging -7.1bps and +1.8bps). Other notable trades were DANGA 1/33 and CIMB THAI 7/24 with MYR50m changed hands each, rallying to 4.93% (-1.1bps) and 4.79% (-4.3bps) respectively.  

¨      Over in primaries, Inverfin Sdn Bhd has issued MYR160m 6y-note under its AAA rated MYR185m Tranche A MTN programme with coupon rate of 4.98%.

APAC USD Credit Market:

¨      US Treasuries yields on the rise after Fed Chair Powell testimony. The USTs yields were seen rising across the tenure, led by the belly of the curve, pressuring the 2y, 5y and 10y USTs upward to 2.26% (+3.81bps), 2.66% (+5.04bps) and 2.89% (+3.11%) respectively following the recent remarks made by new Fed Chair Powell at his testimony debut before the House Financial Services Committee. He expressed confidence on the strengthening economic conditions in the US and inflation to accelerate on a “sustained basis” while supporting the need for gradual rate hikes going forward. He will appear before the Senate Banking Committee on Thursday. The USD regained traction which saw the DXY move up to 90.4 (+0.56%). Meanwhile, economic data revealed mixed results. Advance goods trade balance deficit Jan 18 unexpectedly deteriorated to –USD74.4bn (consensus: -USD72.3bn) from revised figure of –USD72.3bn. Wholesale inventories beat estimates as it rose 0.7% (consensus: 0.4%) from 0.6% previously. Durable goods orders, however, declined more than initially projected by 3.7% (consensus: -2%) from an increase of 2.6% during the same period. The Conference Board’s consumer confidence soared to new highs with a reading of 130.8 from revised 124.3. 

¨      The iTraxx AxJ IG credit spreads rallied further to 67.7bps (-0.5bps). Over in CDS space, leading the rally was CapitaLand Ltd. which saw CDs levels fall approximately -2.5bps. Seeing a similar decline rate was PCCW-HKT Telephone Ltd. and Swire Pacific Ltd. with spreads reduction about -1.3bps, trailed by Chinese Fis China Development Bank and Export-Import Bank of China with drop rate close to -1.1bps. Other notable players include Kookmin Bank and Korea Electric Power Corp. with identical tightening around -1bp. Leading the widening, on the other hand, was State Bank of India/London which saw CDS levels deteriorate nearly +2.3bps.

¨      Moody’s has changed the outlook on IDBI Bank Ltd. upward from B1/Sta to B1/Pos. This is driven by possible improvement to its capital position on the back of capital infusion from the Indian government. IDBI is expected to receive INR78.81bn in new capital by Mar 18 as part of the INR1.53trn recapitilisation plan. Moody’s forecasts IDBI’s CET-1 ratio increasing to approximately 9.8% based on the risk weighted assets as of Dec 17, though likely to incur losses over the next few quarters due to high provisioning costs. Moody’s, however, opines IDBI’s CET-1 ratio to meet minimum Basel III capital requirements by Mar 19. IDBI recorded slightly lower NPA ratio in the recent quarter ending Dec 17 at 24.7% compared to 25% in the quarter ending Sep 17. NPA also stabilised at 14.3% during the same period. Moody’s has also revised the outlook on John Deere Ltd/Australia (Deere) upward from A2/Neg to A2/Sta. This reflects Moody’s expectation that Deere will strengthen its position in the industry while financial performance likely to be buttressed by the improving agriculture markets conditions. This is further supported by its Shareholder Value Added (SVA) model that is intended to moderate impacts from cyclical downturns on financial performance. Deere’s liquidity as of Jan 18 remained healthy with combined liquidity sources of around USD15.4bn, which includes USD4.4bn in cash and marketable securities, USD7.5bn in committed credit facilities as well as USD3.5bn 3-yr securitization conduit. Nonetheless, Moody’s does not see any upgrade at this juncture given the inherent cyclicality in core markets.

FW: [Maybank IB] Today's Research - Malaysia

 

 

FEATURED CALLS Malaysia | Genting Bhd Steady earnings delivery Samuel Yin Shao Yang COMPANY RESEARCH IHH Healthcare | Healthier Progress in 2018; Maintain BUY John Cheong Genting Malaysia | Respectable end to 2017 Samuel Yin Shao Yang RHB Bank | FY17 results marginally below Desmond Ch'ng Telekom Malaysia | Routine finish Chi Wei Tan AirAsia Bhd | FY17 results below Mohshin Aziz IJM Corporation | 3QFY18: Earnings fell short Adrian Wong Inari Amertron | Beating expectations again Ivan Yap UEM Sunrise | A good year Wei Sum Wong Sunway REIT | Sunway Carnival expansion in progress Kevin Wong Lafarge Malaysia | Higher bag ASPs ahead Yen Ling Lee Sunway Construction Group | Secures MYR274m building job Adrian Wong Magnum Berhad | Strong end to an eventful year Samuel Yin Shao Yang Boustead Plantations | FY17 core results and dividend exceeded expectations Chee Ting Ong Globetronics Technology | All's well, ends well Ivan Yap Oldtown | 3QFY18: Higher expenses and raw material costs Liew Wei Han Star Media Group Bhd | Boosted by deferred tax Jade Tam Hock Seng Lee | Earnings recovery in motion Adrian Wong Kimlun Bhd | 4Q17: Beat expectations Adrian Wong Tambun Indah Land | Expects flattish sales growth Wei Sum Wong Icon Offshore | Recommence coverage Thong Jung Liaw PECCA Group | Expect a much stronger 2H Ivan Yap Barakah Offshore Petroleum | More challenges ahead Thong Jung Liaw TSH Resources | Results below expectations Chee Ting Ong SP Setia | Below expectations Wei Sum Wong Century Logistics Malaysia | 4Q17: Start-up costs… Liew Wei Han Tomypak Holdings | 4Q17: Below expectations Mohd Hafiz Hassan UMW Holdings | Awaiting next catalyst Ivan Yap MACRO RESEARCH Malaysia | Asia Equities: Long-Term Uptrend Still Intact Nik Ihsan Raja Abdullah NEWS Outside Malaysia Other News COMPANY RESEARCH Malaysia TP Revision IHH Healthcare (IHH MK) by John Cheong Share Price: MYR6.11 Target Price: MYR7.00 Recommendation: Buy Healthier Progress in 2018; Maintain BUY We raise FY18E EPS 8% and SOTP TP by 14% to MYR7.00 after lifting our EBITDA margin estimates. IHH has shown a consistent track record in driving case intensity, Singapore achieved another record year for its EBITDA margin and Malaysia improved. FY17 core earnings beat our estimate slightly, by 6%, but missed consensus by 10%. We expect FY18 to be a healthy rebound year as two major hospitals started in 1Q17 are ramping up nicely. Four home markets have also shown consistent healthy performance. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 10,021.9 11,142.7 12,995.4 15,179.6 EBITDA 2,188.9 2,783.0 2,641.2 3,058.2 Core net profit 866.0 595.4 913.3 1,127.0 Core FDEPS (sen) 10.5 7.2 11.1 13.6 Core FDEPS growth(%) (4.0) (31.3) 53.4 23.4 Net DPS (sen) 3.0 3.0 3.0 3.0 Core FD P/E (x) 58.2 84.8 55.3 44.8 P/BV (x) 2.3 2.3 2.2 2.1 Net dividend yield (%) 0.5 0.5 0.5 0.5 ROAE (%) 2.8 4.4 4.1 4.9 ROAA (%) 2.4 1.6 2.3 2.8 EV/EBITDA (x) 27.0 18.3 20.1 17.0 Net debt/equity (%) 21.1 2.8 3.4 net cash John Cheong    (65) 6231 5845    johncheong@maybank-ke.com.sg Malaysia Results Review Genting Bhd (GENT MK) by Samuel Yin Shao Yang Share Price: MYR8.99 Target Price: MYR12.75 Recommendation: Buy Steady earnings delivery 4Q17/FY17 results were in-line. We trim our FY18/FY19 core net profit estimates by 2% p.a. to account for only minor model adjustments. We expect improved earnings contribution from RWG in FY18 which will also translate into more highly profitable licensing and management fees. Our TP is tweaked up 2% on higher TP for GENP (MYR12.10 vs. MYR11.16 previously) and minor housekeeping changes. At 44% discount to SOP/sh, we continue to see value in GENT. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 18,365.8 20,019.6 21,697.7 23,904.9 EBITDA 6,046.2 7,518.9 8,455.5 9,544.5 Core net profit 1,500.7 2,128.6 2,505.8 3,051.2 Core FDEPS (sen) 40.1 55.4 56.2 68.5 Core FDEPS growth(%) 15.2 38.3 1.4 21.8 Net DPS (sen) 12.5 21.5 17.8 21.5 Core FD P/E (x) 22.4 16.2 16.0 13.1 P/BV (x) 1.0 1.0 0.9 0.9 Net dividend yield (%) 1.4 2.4 2.0 2.4 ROAE (%) 6.3 4.2 7.2 8.3 ROAA (%) 1.6 2.3 2.7 3.2 EV/EBITDA (x) 7.6 7.2 6.5 5.7 Net debt/equity (%) net cash net cash net cash net cash Samuel Yin Shao Yang    (603) 2297 8916    samuel.y@maybank-ib.com Malaysia Results Review Genting Malaysia (GENM MK) by Samuel Yin Shao Yang Share Price: MYR5.27 Target Price: MYR5.35 Recommendation: Hold Respectable end to 2017 After three consecutive quarters of poorer-than-expected earnings, GENM delivered 4Q17 core net profit that was a tad above our expectations. Operating parameters improved, reassuring us that our above-consensus earnings estimates will be met. Our core earnings estimates are trimmed 3% p.a. but EBITDA estimates are unchanged. A special DPS of 8sen pleasantly surprised and brought FY17 DPS to 17sen but FY17 dividend yield of 3.2% is still lukewarm, in our opinion. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 8,931.6 9,328.7 10,916.2 12,678.6 EBITDA 2,394.9 2,319.4 2,988.6 3,711.3 Core net profit 1,549.0 1,410.4 1,857.9 2,485.9 Core FDEPS (sen) 27.3 24.8 32.6 43.7 Core FDEPS growth(%) 34.2 (9.1) 31.4 33.8 Net DPS (sen) 16.5 17.0 11.8 15.8 Core FD P/E (x) 19.3 21.2 16.2 12.1 P/BV (x) 1.5 1.5 1.5 1.4 Net dividend yield (%) 3.1 3.2 2.2 3.0 ROAE (%) 14.8 5.9 9.3 11.7 ROAA (%) 5.6 4.9 6.1 7.8 EV/EBITDA (x) 10.5 14.0 10.2 7.9 Net debt/equity (%) net cash 4.3 4.6 net cash Samuel Yin Shao Yang    (603) 2297 8916    samuel.y@maybank-ib.com Malaysia TP Revision RHB Bank (RHBBANK MK) by Desmond Ch'ng Share Price: MYR5.47 Target Price: MYR5.90 Recommendation: Hold FY17 results marginally below What is positive is that RHB continues to gain market share in the SME segment and CASA accumulation has been strong. Against management's FY18 ROE target of 9-10%, we estimate 9.2%/9.3%% for FY18/19. We roll forward valuations to CY19 but continue to attach a P/BV of 0.9x. Our TP is raised to MYR5.90 from MYR5.40. We maintain our HOLD call on RHB. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Operating income 6,189.9 6,386.7 6,637.9 6,931.0 Pre-provision profit 3,094.5 3,200.2 3,338.7 3,514.0 Core net profit 1,681.6 1,950.1 2,188.0 2,359.0 Core EPS (MYR) 0.44 0.51 0.55 0.59 Core EPS growth (%) (36.9) 16.0 7.9 7.8 Net DPS (MYR) 0.12 0.15 0.17 0.18 Core P/E (x) 12.5 10.8 10.0 9.3 P/BV (x) 1.0 0.9 0.9 0.8 Net dividend yield (%) 2.2 2.7 3.1 3.3 Book value (MYR) 5.42 5.77 6.15 6.56 ROAE (%) 8.5 8.7 9.2 9.3 ROAA (%) 0.7 0.8 0.9 1.0 Desmond Ch'ng    (603) 2297 8680    desmond.chng@maybank-ib.com Malaysia Results Review Telekom Malaysia (T MK) by Chi Wei Tan Share Price: MYR6.03 Target Price: MYR6.00 Recommendation: Hold Routine finish While FY17 net profit was in line, the underlying operational performance of selected products underwhelmed slightly. TM's near-term earnings trajectory remains subdued with Webe possibly remaining EBITDA-negative in the coming years. Maintain HOLD with an unchanged MYR6.00 TP. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 12,060.9 12,085.1 12,561.3 12,952.1 EBITDA 3,820.0 3,671.1 3,768.4 3,924.5 Core net profit 847.9 863.3 827.5 860.3 Core EPS (sen) 22.6 23.0 22.0 22.9 Core EPS growth (%) (5.3) 1.8 (4.1) 4.0 Net DPS (sen) 21.5 21.5 19.8 20.6 Core P/E (x) 26.7 26.2 27.4 26.3 P/BV (x) 2.9 2.9 2.9 2.8 Net dividend yield (%) 3.6 3.6 3.3 3.4 ROAE (%) 10.0 12.0 10.5 10.8 ROAA (%) 3.4 3.5 3.3 3.4 EV/EBITDA (x) 7.1 8.1 7.8 7.7 Net debt/equity (%) 64.0 77.3 85.8 92.9 Chi Wei Tan    (603) 2297 8690    chiwei.t@maybank-ib.com Syairah Malek    (603) 2297 8641    syairah.am@maybank-ib.com Malaysia TP Revision AirAsia Bhd (AIRA MK) by Mohshin Aziz Share Price: MYR4.46 Target Price: MYR3.81 Recommendation: Hold FY17 results below 2017 core net profit of MYR1,416m (+30.2% YoY) was below expectations. Yields softened and cost spiked significantly in 4Q17. The yield outlook in 2018 is slightly more challenging than initially thought. As such, we lower FY18-19E earnings by 2.4% and 4.1% respectively and introduce FY20 forecast. Our new TP is MYR3.81, pegged to an unchanged 10x 2018 PER, mid-point of airline cycle. AirAsia is a HOLD after factoring a potential dividend yield of 7%, including specials. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 8,506.3 9,709.7 10,561.0 11,088.1 EBITDAR 3,303.5 3,651.9 3,503.6 3,682.9 Core net profit 1,087.1 1,415.9 1,271.3 1,331.0 Core EPS (sen) 32.5 42.4 38.0 39.8 Core EPS growth (%) 409.2 30.2 (10.2) 4.7 Net DPS (sen) 16.0 24.0 9.0 10.0 Core P/E (x) 13.7 10.5 11.7 11.2 P/BV (x) 2.2 2.3 2.0 1.8 Net dividend yield (%) 3.6 5.4 2.0 2.2 ROAE (%) 23.2 24.5 18.5 16.9 ROAA (%) 5.0 6.6 5.7 5.4 EV/EBITDAR (x) 5.0 5.1 6.8 6.8 Net debt/equity (%) 133.3 116.3 119.2 122.0 Mohshin Aziz    (603) 2297 8692    mohshin.aziz@maybank-ib.com Malaysia Results Review IJM Corporation (IJM MK) by Adrian Wong Share Price: MYR2.90 Target Price: MYR3.40 Recommendation: Buy 3QFY18: Earnings fell short 3QFY3/18 core earnings were below our/consensus estimates due to i) weaker-than-expected contributions from construction and industry, and ii) higher tax expense within the quarter. We lower our earnings for FY18E-FY20E by 3%-6% after adjusting for slower works recognition and a higher effective tax rate in FY18E. No change to our SOP-based TP of MYR3.40. We remain positive on IJM for its robust construction orderbook of MYR9.3b and long term investments in MCKIP and Kuantan Port. FYE Mar (MYR m) FY16A FY17A FY18E FY19E Revenue 5,128.2 6,065.3 6,957.7 7,591.5 EBITDA 1,166.7 1,125.8 1,019.4 1,196.8 Core net profit 509.3 505.1 494.4 611.5 Core EPS (sen) 14.3 14.0 13.7 16.9 Core EPS growth (%) (12.5) (2.0) (2.1) 23.7 Net DPS (sen) 10.0 7.5 7.0 7.0 Core P/E (x) 20.3 20.7 21.2 17.1 P/BV (x) 1.1 1.1 1.1 1.0 Net dividend yield (%) 3.4 2.6 2.4 2.4 ROAE (%) 9.1 7.1 5.1 6.1 ROAA (%) 2.6 2.5 2.3 2.9 EV/EBITDA (x) 15.4 15.5 15.6 13.2 Net debt/equity (%) 40.4 35.3 36.4 33.1 Adrian Wong    (603) 2297 8675    adrian.wkj@maybank-ib.com Malaysia TP Revision Inari Amertron (INRI MK) by Ivan Yap Share Price: MYR3.45 Target Price: MYR4.20 Recommendation: Buy Beating expectations again Inari's 1HFY6/17 core net profit of MYR169m (+50% YoY) trounced all expectations. The upside surprise came mainly from a commendable margin expansion, likely due to a favourable sales mix and better operating efficiencies. We raise FY18-20E earnings by 11%-15%, remaining positive on Inari's sustained double-digit growth prospects. We lift TP to MYR4.20 (+24%), pegging to 22x CY19 EPS (from 20x); this represents a 20% premium to our target PER for tech companies within our coverage. Reiterate BUY FYE Jun (MYR m) FY16A FY17A FY18E FY19E Revenue 1,043.1 1,176.7 1,537.6 1,782.1 EBITDA 203.7 303.7 432.3 516.5 Core net profit 155.8 206.4 324.5 386.7 Core EPS (sen) 7.8 9.9 15.5 18.5 Core EPS growth (%) 1.7 27.4 57.2 19.2 Net DPS (sen) 4.2 8.3 11.6 13.9 Core P/E (x) 44.5 34.9 22.2 18.6 P/BV (x) 10.1 8.2 7.4 6.6 Net dividend yield (%) 1.2 2.4 3.4 4.0 ROAE (%) 24.3 29.2 35.1 37.5 ROAA (%) 18.2 19.9 25.6 27.6 EV/EBITDA (x) 13.8 13.2 15.6 13.0 Net debt/equity (%) net cash net cash net cash net cash Ivan Yap    (603) 2297 8612    ivan.yap@maybank-ib.com Malaysia Rating Change UEM Sunrise (UEMS MK) by Wei Sum Wong Share Price: MYR1.13 Target Price: MYR1.25 Recommendation: Hold A good year UEMS' 2017 net profit of MYR280m was driven by asset/land sale and came in within our expectation but beat consensus estimates. 2017 sales of MYR1.5b were above expectations. Management remains cautious and has set a sales target of MYR1.2b for 2018 given the challenging local property market outlook and the lack of new property launches overseas. We adjust our FY18/19 earnings forecasts by +43%/ +1% and we introduce FY20. Our new RNAV-TP is MYR1.25. D/G HOLD on limited upside. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 1,841.5 2,903.4 1,811.4 2,034.0 EBITDA 221.9 507.4 502.1 504.3 Core net profit 144.8 278.2 222.2 277.9 Core FDEPS (sen) 2.8 5.4 4.3 5.4 Core FDEPS growth(%) (45.8) 92.1 (20.1) 25.1 Net DPS (sen) 0.0 1.0 1.0 1.1 Core FD P/E (x) 40.3 21.0 26.2 21.0 P/BV (x) 0.8 0.7 0.7 0.7 Net dividend yield (%) 0.0 0.9 0.9 1.0 ROAE (%) na na na na ROAA (%) 1.1 2.0 1.5 1.8 EV/EBITDA (x) 36.3 16.7 19.8 20.1 Net debt/equity (%) 40.7 45.9 58.5 59.1 Wei Sum Wong    (603) 2297 8679    weisum@maybank-ib.com Malaysia Company Update Sunway REIT (SREIT MK) by Kevin Wong Share Price: MYR1.70 Target Price: MYR1.85 Recommendation: Buy Sunway Carnival expansion in progress We are positive on the expansion works award to Sunway Construction and remain upbeat on SunREIT's Sunway Carnival expansion plan. Our earnings forecasts, DDM-TP of MYR1.85 (cost of equity: 7.9%) are intact. FYE Jun (MYR m) FY16A FY17A FY18E FY19E Revenue 507.0 522.9 579.4 607.0 Net property income 373.9 388.8 442.5 464.2 Distributable income 270.6 271.1 291.5 300.3 DPU (sen) 8.3 8.3 8.9 9.1 DPU growth (%) 5.2 0.2 7.2 2.5 Price/DPU(x) 20.6 20.6 19.2 18.7 P/BV (x) 1.2 1.2 1.2 1.2 DPU yield (%) 4.9 4.9 5.2 5.3 ROAE (%) 8.1 10.3 6.9 7.2 ROAA (%) 4.0 4.0 4.1 4.1 Debt/Assets (x) 0.3 0.3 0.4 0.4 Kevin Wong    (603) 2082 6824    kevin.wong@maybank-ib.com Malaysia Company Update Lafarge Malaysia (LMC MK) by Yen Ling Lee Share Price: MYR5.32 Target Price: MYR5.10 Recommendation: Hold Higher bag ASPs ahead All industry players will be raising their bag cement ASPs by >20% on 1st Mar 2018. Without any ASP hikes in the bulk cement segment, we estimate that LMC would remain loss-making but breakeven at operating level. We maintain our earnings forecasts, HOLD call and TP of MYR5.10 (1.5x P/B; -2SD to mean). We would only turn positive when industry players successfully push through higher bulk ASPs. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 2,552.2 2,248.8 2,518.5 2,928.2 EBITDA 302.1 (59.4) 125.4 368.8 Core net profit 84.9 (229.9) (83.8) 100.9 Core EPS (sen) 10.0 (27.1) (9.9) 11.9 Core EPS growth (%) (66.3) nm nm nm Net DPS (sen) 5.0 0.0 0.0 10.7 Core P/E (x) 53.2 nm nm 44.8 P/BV (x) 1.5 1.6 1.6 1.6 Net dividend yield (%) 0.9 0.0 0.0 2.0 ROAE (%) 2.5 (7.3) (3.0) 3.6 ROAA (%) 2.0 (5.3) (1.9) 2.3 EV/EBITDA (x) 20.7 nm 39.4 13.2 Net debt/equity (%) 4.6 13.5 14.9 12.4 Yen Ling Lee    (603) 2297 8691    lee.yl@maybank-ib.com Jade Tam    (603) 2297 8687    jade.tam@maybank-ib.com Malaysia Company Update Sunway Construction Group (SCGB MK) by Adrian Wong Share Price: MYR2.40 Target Price: MYR2.63 Recommendation: Hold Secures MYR274m building job SCG has secured an e.MYR730m of new job wins YTD FY18 with this latest building job win. No change to our earnings forecasts having imputed job win potentials. Maintain HOLD with an unchanged TP of MYR2.63 (16x FY18 PER/+1SD). FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 1,788.8 2,076.3 2,814.4 3,271.7 EBITDA 188.3 202.4 297.3 312.1 Core net profit 123.5 137.8 212.1 220.3 Core EPS (sen) 9.6 10.7 16.4 17.1 Core EPS growth (%) (2.9) 11.6 53.9 3.9 Net DPS (sen) 5.0 7.0 5.7 6.0 Core P/E (x) 25.1 22.5 14.6 14.1 P/BV (x) 6.3 5.6 4.5 3.7 Net dividend yield (%) 2.1 2.9 2.4 2.5 ROAE (%) 26.2 26.3 34.1 28.9 ROAA (%) 8.2 7.9 9.9 8.4 EV/EBITDA (x) 9.9 14.3 7.9 7.0 Net debt/equity (%) net cash net cash net cash net cash Adrian Wong    (603) 2297 8675    adrian.wkj@maybank-ib.com Malaysia Results Review Magnum Berhad (MAG MK) by Samuel Yin Shao Yang Share Price: MYR1.98 Target Price: MYR2.10 Recommendation: Buy Strong end to an eventful year Earnings were in-line but dividends outperformed again. 4Q17 gross NFO revenue/draw even grew 6% YoY which is a major positive reversal after years of pessimism. Our DPS estimates raised by 14%. Rolling forward our valuation base year to end-FY18E from FY17E, our DCF-based TP is tweaked by +5% to MYR2.10. Coupled with 16sen of DPS by end-FY18E, we foresee total upside of 14%. Catalysts are:- (i) sharp reduction in tax penalty of MYR476.5m (MYR0.33/shr) and (ii) reversion to >80% DPR. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 2,659.3 2,649.2 2,639.8 2,692.6 EBITDA 326.7 348.1 360.4 368.5 Core net profit 189.4 206.5 219.3 224.8 Core EPS (sen) 13.3 14.5 15.4 15.8 Core EPS growth (%) (16.3) 9.0 6.2 2.5 Net DPS (sen) 13.0 11.0 12.0 12.0 Core P/E (x) 14.9 13.6 12.8 12.5 P/BV (x) 1.2 1.1 1.1 1.1 Net dividend yield (%) 6.6 5.6 6.1 6.1 ROAE (%) 7.8 8.4 8.8 8.8 ROAA (%) 5.2 5.8 6.2 6.2 EV/EBITDA (x) 11.4 8.6 9.2 8.8 Net debt/equity (%) 24.1 19.3 17.1 14.6 Samuel Yin Shao Yang    (603) 2297 8916    samuel.y@maybank-ib.com Malaysia TP Revision Boustead Plantations (BPLANT MK) by Chee Ting Ong Share Price: MYR1.69 Target Price: MYR1.80 Recommendation: Hold FY17 core results and dividend exceeded expectations FY17 core earnings exceeded expectations on better-than-expected output recovery. For FY18, we expect some core earnings pressure mainly on expectation of lower CPO prices. Following the results, we tweak our RNAV-TP to MYR1.80 (+1%) but maintain our HOLD call given limited upside. A fourth interim DPS of 4sen (ex-date: 12 Mar) was announced to sustain interest, bringing FY17 total DPS to 19.5sen (2016: 14.5sen). Key catalyst for BPLANT: More land disposals to sustain yields. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 707.9 760.1 778.1 788.0 EBITDA 188.4 230.2 223.5 222.7 Core net profit 81.5 134.7 123.1 129.3 Core EPS (sen) 5.1 8.4 7.7 8.1 Core EPS growth (%) 157.7 65.3 (8.6) 5.0 Net DPS (sen) 14.5 19.5 6.2 6.2 Core P/E (x) 33.2 20.1 22.0 20.9 P/BV (x) 1.2 1.1 1.1 1.0 Net dividend yield (%) 8.6 11.5 3.7 3.7 ROAE (%) 10.4 28.1 4.8 5.0 ROAA (%) 2.5 4.4 4.3 4.4 EV/EBITDA (x) 17.0 12.3 11.7 11.6 Net debt/equity (%) 21.5 4.8 net cash net cash Chee Ting Ong    (603) 2297 8678    ct.ong@maybank-ib.com Malaysia Rating Change Globetronics Technology (GTB MK) by Ivan Yap Share Price: MYR6.22 Target Price: MYR6.30 Recommendation: Hold All's well, ends well GTB's FY17 core net profit was strong at MYR50m (+94% YoY), lifted by strong sensor demand – above ours but within consensus expectations at 108%/98%. We adjust FY18/19E earnings by -3%/+6%, having adjusted our volume, USD/MYR and margin assumptions. We also roll forward valuation to CY19, on an unchanged 18x PER peg (in-line with target multiples for tech stocks within our coverage) to derive a higher TP of MYR6.30 (+14%). We upgrade GTB to HOLD. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 215.3 304.6 386.1 437.7 EBITDA 51.2 82.8 132.3 150.3 Core net profit 25.7 50.0 83.8 98.7 Core FDEPS (sen) 9.0 17.4 29.2 34.4 Core FDEPS growth(%) (64.6) 94.4 67.5 17.8 Net DPS (sen) 16.0 13.0 20.8 24.5 Core FD P/E (x) 69.5 35.7 21.3 18.1 P/BV (x) 6.7 6.2 5.7 5.2 Net dividend yield (%) 2.6 2.1 3.3 3.9 ROAE (%) 9.1 18.8 28.5 30.7 ROAA (%) 7.7 14.1 20.3 22.3 EV/EBITDA (x) 16.0 21.7 12.8 11.1 Net debt/equity (%) net cash net cash net cash net cash Ivan Yap    (603) 2297 8612    ivan.yap@maybank-ib.com Malaysia Results Review Oldtown (OTB MK) by Liew Wei Han Share Price: MYR3.16 Target Price: MYR3.18 Recommendation: Buy 3QFY18: Higher expenses and raw material costs 3QFY3/18 results were below expectations. The shortfall was mainly due to higher-than-expected expenses and raw material costs. We cut earnings by 8-12% for FY18-20E assuming higher opex and raw material costs. The takeover offer by Jacobs Douwe Egberts Holdings Asia NL. B.V. (JDE) remains open until 5pm, 13 March 2018. Our TP reflects the offer price of MYR3.18. We recommend investors to accept the offer. FYE Mar (MYR m) FY16A FY17A FY18E FY19E Revenue 393.4 425.2 459.4 503.5 EBITDA 84.7 97.1 97.8 108.0 Core net profit 55.3 65.6 61.2 69.4 Core EPS (sen) 11.9 14.2 13.2 15.0 Core EPS growth (%) 6.1 18.6 (6.6) 13.3 Net DPS (sen) 9.0 10.0 7.3 8.2 Core P/E (x) 26.5 22.3 23.9 21.1 P/BV (x) 4.0 3.9 3.7 3.4 Net dividend yield (%) 2.8 3.2 2.3 2.6 ROAE (%) 15.0 16.6 15.9 16.8 ROAA (%) 12.5 14.5 13.0 13.8 EV/EBITDA (x) 6.4 11.5 13.2 11.7 Net debt/equity (%) net cash net cash net cash net cash Liew Wei Han    (603) 2297 8676    weihan.l@maybank-ib.com Malaysia Results Review Star Media Group Bhd (STAR MK) by Jade Tam Share Price: MYR1.32 Target Price: MYR1.47 Recommendation: Hold Boosted by deferred tax 4Q17 headline net loss of MYR155m included MYR177m negative one-offs from impairment in goodwill and PPE, write off in PPE and MSS costs. 4Q17 core net profit was above expectations mainly due to a large positive deferred tax. That said, all segments underperformed YoY in terms of revenue. We maintain our earnings forecasts, SOP-TP and HOLD call for now pending an analyst briefing on 6 Mar. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 932.1 674.5 743.7 749.4 EBITDA 162.1 90.3 110.6 114.5 Core net profit 69.9 60.6 48.0 53.8 Core EPS (sen) 9.5 8.0 6.5 7.3 Core EPS growth (%) (47.0) (15.6) (18.8) 12.2 Net DPS (sen) 18.0 42.0 15.0 15.0 Core P/E (x) 13.9 16.5 20.3 18.1 P/BV (x) 0.9 1.1 1.0 1.1 Net dividend yield (%) 13.6 31.8 11.4 11.4 ROAE (%) 9.7 9.1 5.2 5.8 ROAA (%) 4.1 4.3 3.9 4.0 EV/EBITDA (x) 9.0 9.3 7.0 7.2 Net debt/equity (%) net cash net cash net cash net cash Jade Tam    (603) 2297 8687    jade.tam@maybank-ib.com Samuel Yin Shao Yang    (603) 2297 8916    samuel.y@maybank-ib.com Malaysia Rating Change Hock Seng Lee (HSL MK) by Adrian Wong Share Price: MYR1.64 Target Price: MYR2.00 Recommendation: Buy Earnings recovery in motion 4Q17 results were within ours/consensus expectations on the back of recovery in construction earnings within the quarter. We keep our FY18E/FY19E earnings unchanged with FY18E earnings implying a 59% YoY growth. Its outstanding orderbook of MYR2.7b as of end-Dec 2017 would support growth into FY18. HSL is now a BUY with a higher TP of MYR2.00 (rounded) pegged to a higher 15x FY18 PER (5-year mean). Valuations are undemanding with the stock trading at -1SD on a FY18 PER of 12x. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 498.5 505.9 635.2 838.3 EBITDA 83.0 73.3 109.1 141.0 Core net profit 56.5 46.6 73.9 96.9 Core EPS (sen) 10.3 8.5 13.5 17.6 Core EPS growth (%) (25.9) (17.4) 58.6 31.1 Net DPS (sen) 2.4 2.4 2.4 2.4 Core P/E (x) 16.0 19.3 12.2 9.3 P/BV (x) 1.3 1.2 1.1 1.0 Net dividend yield (%) 1.5 1.5 1.5 1.5 ROAE (%) na na na na ROAA (%) 6.7 5.0 7.3 8.6 EV/EBITDA (x) 9.6 9.9 7.2 5.3 Net debt/equity (%) net cash net cash net cash net cash Adrian Wong    (603) 2297 8675    adrian.wkj@maybank-ib.com Malaysia Results Review Kimlun Bhd (KICB MK) by Adrian Wong Share Price: MYR2.15 Target Price: MYR2.61 Recommendation: Buy 4Q17: Beat expectations FY17 core earnings were above ours/consensus expectations on stronger-than-expected contribution from the construction segment. No change to our earnings forecasts and TP of MYR2.61 pegged to 10x FY18 PER (+0.5 SD) pending an analyst briefing on 13th March. Reiterate BUY on Kimlun on the back of decent growth prospects and potential earnings upside to our forecasts. Valuation remains undemanding at 8.2x FY18 PER. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 940.7 985.2 1,215.8 1,162.8 EBITDA 130.9 121.8 131.6 134.8 Core net profit 80.7 80.1 79.9 81.9 Core EPS (sen) 26.4 26.2 26.1 26.7 Core EPS growth (%) 23.0 (0.7) (0.4) 2.5 Net DPS (sen) 6.5 5.5 7.0 7.2 Core P/E (x) 8.1 8.2 8.2 8.0 P/BV (x) 1.2 1.1 1.0 0.9 Net dividend yield (%) 3.0 2.6 3.3 3.4 ROAE (%) na na na na ROAA (%) 8.2 7.4 6.4 6.1 EV/EBITDA (x) 5.1 5.9 5.2 4.7 Net debt/equity (%) 6.7 7.1 3.3 net cash Adrian Wong    (603) 2297 8675    adrian.wkj@maybank-ib.com Malaysia TP Revision Tambun Indah Land (TILB MK) by Wei Sum Wong Share Price: MYR0.89 Target Price: MYR0.91 Recommendation: Hold Expects flattish sales growth Tambun Indah's (TI) 2017 net profit of MYR83m (-26% YoY) was below our expectation but 2017 sales of MYR146m (-36% YoY) was in line with our forecast. Management has set a sales target of MYR150m for 2018 (+2.7% YoY). Our FY18/19E net profit is adjusted by +31%/-18% post 2017 results and new sales assumption (-33%) and we introduce FY20 forecast. Maintain HOLD with a lower RNAV-TP of MYR0.91 (on a lower 0.3x P/RNAV peg). FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 360.8 282.1 252.9 253.7 EBITDA 145.8 113.4 70.7 71.7 Core net profit 107.0 83.4 54.1 55.2 Core FDEPS (sen) 24.9 19.2 12.5 12.7 Core FDEPS growth(%) 11.7 (22.6) (35.2) 2.1 Net DPS (sen) 9.0 7.7 5.0 5.1 Core FD P/E (x) 3.6 4.6 7.1 6.9 P/BV (x) 0.7 0.7 0.6 0.6 Net dividend yield (%) 10.2 8.7 5.7 5.8 ROAE (%) na na na na ROAA (%) 14.1 11.1 7.0 6.7 EV/EBITDA (x) 4.5 4.0 5.3 4.8 Net debt/equity (%) 10.2 2.0 net cash net cash Wei Sum Wong    (603) 2297 8679    weisum@maybank-ib.com Malaysia Rating Change Icon Offshore (ICON MK) by Thong Jung Liaw Share Price: MYR0.23 Target Price: MYR0.22 Recommendation: Hold Recommence coverage FY17 results show improved YoY performance albeit remaining in the red. Overall, Icon reported higher OSV utilisation, on lower DCRs. Clinching considerable contract wins from the much anticipated PETRONAS Integrated Logistics Control Tower (ILCT) OSV contracts is a catalyst. Until then, Icon is fairly valued. Our TP is based on 0.5x BV. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 226.9 204.6 237.9 252.1 EBITDA 88.3 83.0 96.8 111.0 Core net profit 0.7 (22.9) (2.6) 11.7 Core EPS (sen) 0.1 (1.9) (0.2) 1.0 Core EPS growth (%) (96.1) nm nm nm Net DPS (sen) 0.0 0.0 0.0 0.0 Core P/E (x) 376.4 nm nm 23.1 P/BV (x) 0.5 0.5 0.5 0.5 Net dividend yield (%) 0.0 0.0 0.0 0.0 ROAE (%) (22.7) (9.9) (0.5) 2.2 ROAA (%) 0.0 (1.7) (0.2) 0.9 EV/EBITDA (x) 12.3 10.9 8.0 6.5 Net debt/equity (%) 114.2 122.6 98.2 86.2 Thong Jung Liaw    (603) 2297 8688    tjliaw@maybank-ib.com Malaysia TP Revision PECCA Group (PECCA MK) by Ivan Yap Share Price: MYR1.35 Target Price: MYR1.60 Recommendation: Buy Expect a much stronger 2H Shortfall in 2QFY6/18 results came from a lower-than-expected volume at the OEM division as we had expected a strong inventory build-up in the period prior to the launch of the new Myvi in Nov 2017. We understand that Perodua had underestimated the demand for the 1.5L Advance variant which Pecca supplies to. We cut our FY18/19/20 net profit forecasts by 22%/9%/9% on lower volumes and ASPs. Our TP is lowered to MYR1.60 (-12%) on unchanged 14.5x CY19 PER. Maintain BUY for exposure to Perodua. FYE Jun (MYR m) FY16A FY17A FY18E FY19E Revenue 126.3 122.2 121.9 136.2 EBITDA 22.6 21.0 22.4 28.1 Core net profit 16.5 14.8 15.7 19.6 Core EPS (sen) 8.8 7.9 8.5 10.6 Core EPS growth (%) (8.0) (10.5) 7.6 24.9 Net DPS (sen) 4.0 5.0 6.0 6.0 Core P/E (x) 15.4 17.2 16.0 12.8 P/BV (x) 1.6 1.6 1.5 1.4 Net dividend yield (%) 3.0 3.7 4.4 4.4 ROAE (%) 12.7 9.2 9.4 11.3 ROAA (%) 11.3 8.0 8.4 10.1 EV/EBITDA (x) 9.4 10.0 7.0 5.4 Net debt/equity (%) net cash net cash net cash net cash Ivan Yap    (603) 2297 8612    ivan.yap@maybank-ib.com Malaysia TP Revision Barakah Offshore Petroleum (BARAKAH MK) by Thong Jung Liaw Share Price: MYR0.28 Target Price: MYR0.09 Recommendation: Sell More challenges ahead While the poor FY17 results were expected, Barakah faces another tough 2018. We estimate that it needs to do a cash call and find a strategic partner/buyer for its KL101 vessel. Order book is at its low with the crucial need to replenish. We cut FY18E earnings by another 51% and reduce our TP to MYR0.09 (-31%), based on 1x EV/replacement value (unchanged; rolled over net debt to FY17). SELL. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 622.6 310.9 305.0 471.8 EBITDA 58.9 (173.9) (97.4) 50.9 Core net profit 10.0 (161.9) (142.7) 2.8 Core EPS (sen) 1.2 (18.8) (16.5) 0.3 Core EPS growth (%) (21.8) nm nm nm Net DPS (sen) 0.0 0.0 0.0 0.0 Core P/E (x) 23.7 nm nm 86.2 P/BV (x) 0.5 1.0 3.4 3.3 Net dividend yield (%) 0.0 0.0 0.0 0.0 ROAE (%) 3.5 (69.1) (108.1) 4.4 ROAA (%) 1.3 (23.5) (27.2) 0.5 EV/EBITDA (x) 12.4 nm nm 11.4 Net debt/equity (%) 35.9 95.7 605.3 538.6 Thong Jung Liaw    (603) 2297 8688    tjliaw@maybank-ib.com Malaysia Results Review TSH Resources (TSH MK) by Chee Ting Ong Share Price: MYR1.57 Target Price: MYR1.65 Recommendation: Hold Results below expectations Following the lower-than-expected FY17 results, we cut our FY18-19E EPS by 15%/16% mainly on higher share of minority profits. Our TP is unchanged at MYR1.65 even as we roll forward our valuation base year to FY18 on unchanged 19x PER peg (about 1SD below 5-year mean). TSH remains a HOLD as its growth potential is reflected by its traded PER of 18x (FY18). A first and final DPS of 2sen was proposed. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 872.3 1,073.5 1,127.9 1,135.2 EBITDA 155.2 249.6 247.0 261.5 Core net profit 69.2 99.8 120.2 135.6 Core EPS (sen) 5.1 7.3 8.7 9.8 Core EPS growth (%) (8.3) 42.3 18.9 12.8 Net DPS (sen) 2.0 2.0 2.1 2.4 Core P/E (x) 30.5 21.5 18.0 16.0 P/BV (x) 1.4 1.5 1.4 1.3 Net dividend yield (%) 1.3 1.3 1.3 1.5 ROAE (%) 2.9 7.6 8.2 8.4 ROAA (%) 2.1 2.9 3.5 3.8 EV/EBITDA (x) 26.2 14.8 14.7 13.8 Net debt/equity (%) 84.1 81.2 76.4 68.8 Chee Ting Ong    (603) 2297 8678    ct.ong@maybank-ib.com Amirah Azmi    (603) 2297 8769    amirah.azmi@maybank-ib.com Malaysia TP Revision SP Setia (SPSB MK) by Wei Sum Wong Share Price: MYR3.29 Target Price: MYR3.79 Recommendation: Buy Below expectations SPSB's 2017 net profit of MYR890m (post I&P acquisition and RCPS interest payment) was below expectations. SPSB has locked in MYR4.9b (SPSB: MYR4b, I&P: MYR0.9b) in property sales in 2017 – in line. We adjust our earnings forecasts by -19% to +33% post-2017 actual results and introduce our 2020 forecast. Our FD RNAV-TP is lowered to MYR3.80 (on a lower 0.75x P/RNAV peg) post-private placement. Maintain BUY. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 5,711.4 4,520.1 5,047.6 5,824.3 EBITDA 1,759.0 1,513.7 1,110.5 1,281.3 Core net profit 955.8 890.1 601.2 1,073.7 Core FDEPS (sen) 27.7 22.3 13.9 24.8 Core FDEPS growth(%) (21.5) (19.4) (37.9) 78.6 Net DPS (sen) 20.0 15.5 7.4 13.9 Core FD P/E (x) 11.9 14.7 23.7 13.3 P/BV (x) 0.8 0.9 1.1 1.9 Net dividend yield (%) 6.1 4.7 2.2 4.2 ROAE (%) na na na na ROAA (%) 4.7 3.4 2.0 3.4 EV/EBITDA (x) 7.4 12.0 23.1 20.6 Net debt/equity (%) 10.9 10.1 49.2 53.2 Wei Sum Wong    (603) 2297 8679    weisum@maybank-ib.com Malaysia TP Revision Century Logistics Malaysia (CLH MK) by Liew Wei Han Share Price: MYR0.90 Target Price: MYR0.90 Recommendation: Hold 4Q17: Start-up costs… 4Q17 results were below expectations on higher-than-expected start-up related costs at its courier operations and higher opex at its procurement logistics segment. We expect the start-up costs at its courier operations to pick up into FY18/19 as CLH accelerates its network expansion and this should weigh down on numbers in the near term. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 300.3 294.6 337.6 394.8 EBITDA 37.9 31.5 31.5 40.5 Core net profit 22.5 15.3 15.6 16.2 Core EPS (sen) 5.8 3.9 4.0 4.2 Core EPS growth (%) 0.8 (32.2) 2.3 3.6 Net DPS (sen) 3.5 1.5 1.0 1.1 Core P/E (x) 15.4 22.8 22.3 21.5 P/BV (x) 1.2 1.1 1.1 1.0 Net dividend yield (%) 3.9 1.7 1.1 1.2 ROAE (%) 6.9 4.9 4.8 4.8 ROAA (%) 5.2 3.5 3.2 2.9 EV/EBITDA (x) 8.3 11.7 13.6 11.6 Net debt/equity (%) net cash net cash 24.7 35.8 Liew Wei Han    (603) 2297 8676    weihan.l@maybank-ib.com Malaysia Rating Change Tomypak Holdings (TOMY MK) by Mohd Hafiz Hassan Share Price: MYR0.89 Target Price: MYR0.81 Recommendation: Hold 4Q17: Below expectations FY17 results were below our expectation. We lower FY18/19 earnings to reflect higher production costs; we also introduce our FY20 forecast. We expect Tomypak's core earnings to be supported by new sales orders and cost rationalisation. We reduce our TP to MYR0.81 (-24sen) after rolling forward our valuation on an unchanged FY19 PER of 16.5x. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 210.9 204.3 240.0 288.4 EBITDA 36.2 14.4 30.1 42.8 Core net profit 19.4 8.6 11.6 20.3 Core FDEPS (sen) 5.6 2.1 2.8 4.9 Core FDEPS growth(%) (7.6) (62.9) 35.6 74.6 Net DPS (sen) 3.4 2.6 1.1 2.0 Core FD P/E (x) 15.9 42.8 31.6 18.1 P/BV (x) 1.9 2.0 1.9 1.8 Net dividend yield (%) 3.9 2.9 1.3 2.2 ROAE (%) 11.7 5.0 5.8 10.0 ROAA (%) 8.4 3.1 3.9 6.3 EV/EBITDA (x) 6.4 30.8 14.2 10.1 Net debt/equity (%) 1.7 21.1 29.2 30.7 Mohd Hafiz Hassan    (603) 2082 6819    mohdhafiz.ha@maybank-ib.com Malaysia Rating Change UMW Holdings (UMWH MK) by Ivan Yap Share Price: MYR6.49 Target Price: MYR6.65 Recommendation: Hold Awaiting next catalyst The reclassification of UMWH's non-listed O&G division as 'discontinued operations' hindered line comparison to our initial FY17 forecasts. We keep our FY18/FY19 earnings forecasts and introduce FY20. Following a strong share price rally in the last three months, we believe that most positives from (i) a stronger MYR against USD, and (ii) Perodua's growth, are priced in. With no other re-rating catalysts and limited upside to our unchanged SOP-based TP of MYR6.65, we downgrade UMWH to HOLD. FYE Dec (MYR m) FY16A FY17A FY18E FY19E Revenue 10,436.8 11,046.5 12,499.4 13,497.8 EBITDA 112.8 456.7 1,061.3 1,279.0 Core net profit 251.4 24.5 301.7 436.6 Core EPS (sen) 21.5 2.1 25.8 37.4 Core EPS growth (%) (39.0) (90.3) 1,132.1 44.7 Net DPS (sen) 0.0 0.0 12.9 18.7 Core P/E (x) 30.2 309.6 25.1 17.4 P/BV (x) 1.6 2.5 2.3 2.2 Net dividend yield (%) 0.0 0.0 2.0 2.9 ROAE (%) (8.8) 0.6 9.6 13.1 ROAA (%) 1.5 0.2 2.9 3.9 EV/EBITDA (x) 102.4 19.2 10.3 8.6 Net debt/equity (%) 65.2 38.1 44.5 35.9 Ivan Yap    (603) 2297 8612    ivan.yap@maybank-ib.com MACRO RESEARCH MY: Traders' Almanac Asia Equities: Long-Term Uptrend Still Intact by Nik Ihsan Raja Abdullah Technical Research FBMKLCI bucked the regional downtrend to end the day 11.38pts higher at 1,871.46 yesterday. Gainers were led by HLFG, HLBK and HAP. Market breadth still negative with losers outpacing gainers by 563 to 443. A total of 2.76b shares worth MYR2.89b changed hands. But as more corporates reported weaker-than-expected results overnight, coupled with the selloff in Wall Street, we believe market will take a breather today. Expect volatility to stay elevated. 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: Merchandise trade deficit expanded in January to the widest level in more than nine years, while inventories rose at wholesalers and retailers, according to preliminary figures released by the Commerce Department. Goods-trade gap increased to USD74.4b from USD72.3b the prior month, according to preliminary figures. Wholesale inventories rose 0.7% MoM while retail stockpiles climbed 0.8% MoM. The trade deficit was the widest since July 2008 as exports fell more than imports. (Source: Bloomberg) U.S: Imposes steep duties on China aluminum foil in dumping case. The U.S. Commerce Department slapped stiff duties on aluminum foil from China after concluding that the country's producers are receiving unfair subsidies and dumping the product in the U.S. The U.S. is imposing duties from 49% to 106% on Chinese aluminum foil for selling the product in the U.S. below fair market value, Commerce said. The Trump administration also set duties of 17% to 81% for the unfair subsidies that the U.S. has concluded Chinese producers receive. The issue now goes before the U.S. International Trade Commission, which is expected to have the final say on the injury claims in a vote scheduled for March 15, the Aluminum Association, which is based in Virginia, said in an emailed statement. (Source: Bloomberg) U.S: Consumer confidence rises to 17-year high on tax cuts, jobs. U.S. consumer confidence jumped as optimism about employment prospects grew and Americans began seeing additional money in their paychecks from recently enacted tax cuts, data from the New York-based Conference Board showed. Confidence index rose to 130.8, highest since Nov. 2000, from downwardly revised 124.3 in January. Present conditions measure climbed to 162.4, highest since 2001, from 154.7. Consumer expectations gauge increased to three-month high of 109.7 from 104. (Source: Bloomberg) China: A weighted average of flash PMIs for major trade partners edged down fractionally in February on declines in manufacturing gauges in Japan and the euro zone. The reading came in at 56.7, down from 57.0 in January and 57.1 in December -- which was the highest reading since April 2010. Even so, that suggests growth in external demand for Chinese goods remains elevated. The index is a composite of U.S., euro-area and Japan flash manufacturing PMIs, weighted by each economy's share of China's exports. It tracks well with Caixin's new export orders index, with a correlation of 0.7. (Source: Bloomberg) Japan: Industrial production falls more than expected in January as manufacturers eased back on production in anticipation of the Lunar New Year holiday in Asia in February. Industrial production fell 6.6% MoM in January from December, when it rose 2.9% MoM. Year-on-year output increased 2.7% YoY. (Source: Bloomberg) Other News: Tropicana: Buys land, plans to build resort. The group is acquiring Marivaux Holdings S/B which owns 112 acres of land near Genting Highlands, Pahang, for MYR78.25m. It will undertake a resort-type project on the land, which is situated at 3,000 feet above sea level. Separately, Tropicana announced that its fourth-quarter net profit ended Dec 31, 2017 more than doubled to MYR69.62m from MYR29.26m in the previous corresponding period, driven by increased efficiency and productivity as well as advanced progress made in many of its projects. (Source: The Sun Daily) CCM Duopharma Biotech: Proposes four-for-three bonus issue, dividend reinvestment plan. The group has proposed to issue up to 371.95m bonus shares on the basis of four bonus shares for every three CCM shares held. Concurrently, CCM proposed a dividend reinvestment plan to convert its dividend to new CCM shares, with the issue price to be determined later. Its 4QFY17 net profit was up 40% YoY to MYR11.87m from MYR8.43m, as revenue grew 52% YoY to MYR112.25m from MYR74.03m. (Source: The Edge Financial Daily) Ekovest: 2Q earnings rise on EkoCheras contribution. Ekovest saw its net profit for the second quarter ended Dec 31, 2017 rise by 33.85% to MYR54.92m from MYR41.03m a year ago on the back of higher sales recognition for the EkoCheras project which has seen advancement in work progress. Ekovest is proposing to take over Iskandar Waterfront City Bhd (IWCity) from minority shareholders for either cash of MYR1.50 or in exchange for one Ekovest share. (Source: The Sun Daily) Press Metal: 4Q net profit up 14%, pays 1.5sen dividend. Its net profit went up almost 14% to MYR150.19m in 4QFY17 from MYR131.78m last year thanks to higher metal price. Its quarterly revenue was 7.22% higher at MYR2.14b, compared with MYR2b a year ago. Press Metal declared a fourth interim single tier dividend of 1.5 sen for FY17. (Source: The Edge Financial Daily) Disclaimer This email and its attachment(s) are confidential and are intended solely for the use of the individual to whom it is addressed. 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