Affin Daily Insight (LV) - 16 May 2014 - DIALOG / MBSB / AEON / GMB / MAS / INARI / SAKP / DMR

Top Calls

Results Note � Dialog (REDUCE, downgrade) - A mediocre set of results, below expectations Dialog�s 9MFY14 core net profit grew by 4.7% yoy to RM147.6m on a higher EBIT of RM171.6m (+25.1% yoy), partly offset by lower associates / JCE core earnings and higher minority interest. Overall, the results are below both market and our expectations - 9MFY14 core net profit only account for 66% of Affin�s full year profit forecast. Key variances from our forecast are lower-than-expected associate / JCE earnings and weaker-than-expected profit margins. We cut our FY14-16E EPS forecast by 6-10%, imputing a more conservative EBIT margin of 9-10% (from 11%), in tandem with the group�s prevailing margin trend. We rolled forward our valuation basis to 2015 and raised our RNAV-derived TP to RM3.48 (from RM3.30). While we like the group for its strong management and the prospects of its Pengerang project, we believe the market has largely priced-in the positives. Downgrade to REDUCE (from ADD).

Other Calls

Results Note � MBSB (REDUCE, maintain) - Robust quarter; caution still looms

Results Note � AEON Co. (ADD, downgrade) - Hit by higher utility costs

Results Note � Gas Malaysia (REDUCE, maintain) - Results inline: higher profit yoy on higher sales volume

Results Note � MAS (SELL, maintain) - Further deterioration in yields

Results Note � Inari Amertron (BUY, maintain) - Another set of solid earnings

Flash Note � Sapura Kencana (BUY, maintain) - Secured US$312m worth of contracts

Debt Market Research - Flattening with gusto, in line with lower global yields & firmer MYR

Morning News & Market Summary