Malaysia Daily, Maybank KE (2015-02-06)

Daily 06 February 2015 RESULTS REVIEW Public Bank: Maintain Hold As reliable as ever FY14 net profit of MYR4.52b marginally above expectations. Key guidance is for loan growth of 9-10% and 8-10bp NIM compression in FY15. Earnings forecasts broadly maintained, TP of MYR19.20 unchanged (FY15 P/BV of 2.4x). Click here for full report » Malaysia Marine & Heavy Engineering: Maintain Hold In line; challenging 2015  Shariah-compliant 12M14 results met our expectation but above consensus; no dividend for FY14. Challenging outlook on replenishment risk; expect weaker YoY earnings. Reiterate HOLD and MYR1.60 TP, based on 2x EV/order backlog multiple, which also equates to 1x P/BV. Click here for full report » Guinness Anchor: Upgrade to Buy Tiger leading the way 1HFY15 results are above expectations at 66%/64% of our and consensus original full-year forecasts. Strong 13% YoY 1HFY15 pretax profit growth on (i) recovery of MLM volumes, (ii) crackdown against contrabands, (iii) favourable pricing and brand mix, (iv) cost efficiencies. Upgrade to BUY with DCF-based TP of MYR13.80 (MYR13.20 previously). Dividend yield of ~5% provides support. Click here for full report » COMPANY UPDATE Inari Amertron: Maintain Buy All systems go!  Shariah-compliant New installed capacity to provide better scale, growth prospects and potentially new business proposition. Raise FY15/16/17 profit forecasts by 9%/3%/6% on (i) faster capacity expansion in RF division, (ii) stronger MYR/USD. Reiterate BUY with a higher TP of MYR3.95 (+7%) as we roll forward valuations to 16x CY16 PER (from 17x CY15 PER). Click here for full report » SECTOR UPDATE Malaysia Property: Maintain Neutral More than just GST Weak buying sentiment and higher operating costs post-GST are the key issues for developers. Property stocks currently trade at 23-66% below our RNAV estimates, fairly reflecting their near-term subdued outlook. Maintain NEUTRAL on the sector, only BUY is SP Setia. Click here for full report » REGIONAL SECTOR UPDATE Regional Plantations: Maintain Neutral IDR4,000/liter biodiesel subsidy? Indonesia parliament�s energy commission and government have approved a hike in biodiesel subsidy to IDR4,000/liter; but final approval needed from budget commission. If approved, the B10 initiative will be viable in Indonesia; positive for demand and CPO price. Wilmar (BUY) and First Resources (BUY) are direct beneficiaries of higher biodiesel subsidies in Indonesia. Click here for full report » Technicals Quiet yesterday, firmer today The FBMKLCI inched up by 0.19 points to 1,803.21 yesterday, while the FBMEMAS and FBM100 also closed higher by 1.47 points and 1.50 points, respectively. We expect some nibbling at the supports of 1,780 to 1,803, whilst obvious profit taking would be at the resistances of 1,806 and 1,831. Trading idea is a Short-Term Buy on ORNA with upside target areas at MYR1.48 & MYR1.63.Stop loss is at MYR1.16. Click here for full report » Outside Malaysia U.S: Trade gap jumps as Americans buy imported cars, oil. The trade deficit in the U.S. swelled in December to the biggest in two years as a strengthening dollar propelled a surge in imports. The gap jumped 17.1% to USD 46.6b, the widest since November 2012, from a revised USD 39.8b in November, according to Commerce Department data issued. (Source: Bloomberg) E.U: The European Commission raised its euro-area growth forecasts and cut its inflation outlook as cheaper energy proves both a blessing and a curse for the currency bloc's economy. GDP in the euro area will rise by 1.3% in 2015 and 1.9% next year, up from November projections of 1.1% and 1.7%, the European Union's executive arm in Brussels said. It predicts consumer prices will drop 0.1% this year, marking the first annual decline since the introduction of the euro in 1999, before increasing 1.3% in 2016. The European Central Bank aims to keep inflation just below 2%. (Source: Bloomberg) Germany: Factory orders rebounded in December amid signs that momentum in Europe's largest economy is accelerating. Orders, adjusted for seasonal swings and inflation, rose 4.2% MoM after a decline of 2.4% MoM in November, data from the Economy Ministry in Berlin showed. Orders climbed 3.4% YoY. (Source: Bloomberg) U.K: Home prices rise to seven-year high in volatile January, after changes to a tax on home purchases and a decline in mortgage interest rates. Values jumped 2% after a 1.1% gain in December, mortgage lender Halifax said. Prices rose 9.9% YoY to an average of GBP 193,130 (USD 293,500), the highest since February 2008. (Source: Bloomberg) Greece: Leaders return home for rethink after rebuff from Germany. Prime Minister Alexis Tsipras is preparing to set out the most detailed account yet of his plans to revive the Greek economy after a diplomatic push ended with a rebuff from Germany and a warning shot from the European Central Bank. Tsipras, 40, was greeted by the rare sight of a pro-government demonstration in downtown Athens after he vowed to stick to his anti-bailout campaign pledges, despite their rejection by German Finance Minister Wolfgang Schaeuble. The prime minister will lay out his policy plans on Sunday, in the opening speech of the three-day-long parliamentary debate leading up to a confidence vote to confirm his government. (Source: Bloomberg) Indonesia: Economic growth moderated in 2014, capping the weakest year since at least the global financial crisis, on falling commodity prices and cooling investment. Southeast Asia's biggest economy saw gross domestic product rise by 5.01% YoY in 4Q 2014, compared with a revised 4.92% YoY in the previous quarter. It grew 5.02% for the full year 2014, from a revised 5.58% pace the previous year. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,803.2 (3.4) 0.0 JCI 5,279.9 23.5 (0.7) STI 3,406.6 7.6 (0.3) SET 1,607.9 23.8 0.5 HSI 24,765.5 6.3 0.3 KOSPI 1,952.8 (2.9) (0.5) TWSE 9,512.1 10.5 (0.0) DJIA 17,884.9 7.9 1.2 S&P 2,062.5 11.6 1.0 FTSE 6,865.9 1.7 0.1 MYR/USD 3.565 8.8 0.0 CPO (1mth) 2,300.0 (12.5) 4.9 Crude Oil (1mth) 50.5 (48.7) 4.2 Gold 1,260.7 4.9 (0.7) TOP STOCK PICKS Buy rated large caps Price Target Axiata 7.17 7.60 Tenaga Nasional 14.54 16.00 Sime Darby 9.54 10.20 Genting Malaysia 4.16 4.60 Gamuda 5.14 6.00 AirAsia 2.78 3.00 Westport 3.50 3.60 SP Setia 3.60 3.98 AFG 4.78 5.50 Hartalega 7.51 8.50