SECTOR FOCUS OF THE DAY
Automobile Sector: Ready to rumble NEUTRAL
April 2018 TIV was down 6% MoM but up 10% YoY. Sales in April were generally flat or down by a single digit on a MoM basis for most, with the exceptions of Honda and Nissan (which saw larger-than-average gains in the preceding month), and Toyota (which has regained ground after seeing exceptionally weak numbers in Jan-Feb).
We believe the competition will intensify in the 2-3 months from June while the GST awaits the substitution of the SST, which will reportedly be introduced at its old rate of 10% and necessitate a 2-3% price increase according to our channel checks. While the reduction of the GST to 0% will be implemented across the board from June 1, several companies took the additional measure of doling out incentives to entice buyers earlier: Honda had offered to absorb the GST charge on selected models up to end-May, Nissan and Perodua offered refunds or cash rebates, while Proton offered service vouchers equivalent to the GST charge.
Others :
Inari Amertron: New products to boost earnings BUY
MBM Resources: Gaining strength BUY
Star Media Group: Further restructuring in store BUY
Boilermech: To benefit from higher industry capex HOLD
C.I.Holdings: Back to earth HOLD
Econpile Holdings: 9MFY18 net profit grows 13% YoY HOLD
Gent Plantations: Boosted by sale of unsold downstream inventory HOLD
TSH Resources: Fall in margin exacerbated by high tax rate HOLD
WCT Holdings: Flattish 1QFY18 YoY HOLD
MSM Malaysia: Risk of lower selling price for retail market SELL
Padini Holdings: Valuations well ahead of prospects SELL
ECONOMIC HIGHLIGHT
Malaysia: Expect inflation to remain soft in near term
NEWS HIGHLIGHTS
Local bourse: Stocks tumble as debt looms
DRB-Hicom: Soars on govt decision not to buy Proton
Kenanga IB: Eyes remisier base expansion via Interpac Securities buy
DBE Gurney Resources: Sees ‘good turnaround’ in two years
DISCLAIMER:
The information and opinions in this report are 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.
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