Malaysia Daily, Maybank KE (2015-04-28)

Daily 28 April 2015 RESULTS REVIEW Tenaga Nasional: Maintain Buy Stronger than expected again  Shariah-compliant 2QFY15 net profit (ex-forex) of MYR2.4b was again ahead of our already bullish expectations, as system loss registered a new low. The total fuel cost over-recovery for 1HFY15 amounted to MYR1.5b; thus tariff rebates would likely continue beyond Jun 2015. Forecasts unchanged for now, with earnings risks skewed to the upside for FY15; reiterate BUY with a MYR16.00 TP. Click here for full report » Maxis Bhd: Maintain Buy Mixed results  Shariah-compliant 1Q15 net profit marginally miss expectations but this was due to accelerated depreciation; EBITDA was in line. Positive revenue trends with prepaid segment on firm path of recovery; management continues to maintain a �loose� DPS guidance for FY15. Our earnings forecasts are unchanged; BUY rating and MYR7.40 TP maintained on the premise of a turnaround. Click here for full report » DiGi.com: Maintain Hold Moving along  Shariah-compliant Both 1Q15 EBITDA and net profit were within expectations at 23% of our full-year forecasts. EBITDA margin down sequentially to 43.3% but management expects to maintain margins at 2014 levels for full year FY15 (c. 45%); no further updates on business trust. Earnings delivery has been exemplary, but appears to have been priced in; maintain HOLD with unchanged MYR6.10 TP. Click here for full report » Malaysia Marine & Heavy Engineering: Maintain Hold Inexpensive but challenging still  Shariah-compliant Weak 1Q15 results within our expectation. Limited share price downside but lacks catalyst to re-rate. Maintain earnings forecasts, HOLD call. TP cut to MYR1.32 (-18%) on lower 1.5x EV/order backlog peg (previously 2x). Click here for full report » COMPANY UPDATE CIMB Group Holdings: Maintain Sell Restructuring on track About 40% of MYR400m-600m cost reduction initiative realized thus far, bulk by year end. Domestic loan book stress tested, no additional provisions required; credit cost to remain elevated at CIMB Niaga in 2Q. SELL maintained with an unchanged TP of MYR5.70. Click here for full report » RHB Capital: Maintain Hold Khairussaleh is new MD Dato� Khairussaleh�s appointment as new MD not a surprise; is positive in ensuring the continuity of business. Restructuring/capital raising is however a near-term dampener. HOLD maintained; TP lowered to MYR8.60 from MYR9.00. Click here for full report » Technicals FBMKLCI consolidating before results We recommend a �Nibble on Dips� stance for the index. We expect some buying at the supports of 1,842 to 1,859, whilst profit-taking activities will cap rebounds at the resistances of 1,861 and 1,875. Trading idea is a Short-Term Buy on WPRTS with upside target areas at MYR4.58 & MYR5.36. Stop loss is at MYR3.98. Click here for full report » Other Local News Property: Amanah Harta Tanah PNB to buy Seremban mall for MYR240m. A conditional sale and purchase agreement with Mydin Mohamed Holdings had been signed to acquire a three-storey mall in Seremban. The acquisition would provide AHTP with additional stable and sustainable income stream, pursuant to the leaseback agreement with Mydin with a committed lease of 30 years. To part-finance the operation, AHTP has proposed to raise MYR129.60m via a renounceable rights issue on the basis of six rights units for every five existing units. About MYR115m of the proceeds from the rights issue would be used to finance the acquisition while the remaining MYR14.6m would be for the expenses of the rights exercise. The remaining MYR125m of the land cost would be financed through bank borrowings. (Source: The Star) IJM Land: Partners Singapore's Perennial Real Estate Holdings Ltd (PREH) for MYR3b Penang waterfront project. IJM Land and PREH will buy 32.76 acres of freehold waterfront site from IJM Land subsidiary, Jelutong Development Sdn Bhd, and develop it into a large-scale integrated mixed-use project in Gelugor on Penang Island. (Source: The Sun Daily) Borneo Oil: To raise up to MYR356.07m by proposing a one-for-six renounceable rights issue together with free warrants. The bulk of the proceeds will be used to expand and accelerate its gold mining activities and operations in Malaysia. The issuance of the rights issue and free warrants is expected to enlarge Borneo Oil�s issued capital to 3.956 billion shares from 372.319 million shares currently. (Source: The Edge Financial Daily) Outside Malaysia China: Local government debt surge boosts focus on PBOC help. A surge in China's local-government debt pile is drawing focus to the central bank's role in avoiding a credit crunch as policy makers seek to develop a municipal-bond market. Provincial authorities estimated they had some CNY 16t (USD 2.6t) in liabilities in a review earlier this year, the China News Service said, citing a Ministry of Finance official it didn't name. That's a 47% jump from CNY 10.9t in June 2013. (Source: Bloomberg) Japan: Sovereign-credit rating was lowered by Fitch Ratings, which cited a lack of steps by the government to offset effects from a delayed sales-tax increase. Fitch cut the nation's long-term default rating by one step to A, with a stable outlook, it said in a statement released. "The Japanese government did not include sufficient structural fiscal measures in its budget for the fiscal year" beginning this month to offset effects of the delay in the sales-tax increase, Fitch said in its statement. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,859.6 (0.4) (0.2) JCI 5,245.4 22.7 (3.5) STI 3,515.9 11.0 0.1 SET 1,548.8 19.3 (0.4) HSI 28,433.6 22.0 1.3 KOSPI 2,157.5 7.3 (0.1) TWSE 9,973.1 15.8 0.6 DJIA 18,038.0 8.8 (0.2) S&P 2,108.9 14.1 (0.4) FTSE 7,104.0 5.3 0.5 MYR/USD 3.563 8.8 (0.7) CPO (1mth) 2,121.0 (19.3) (2.1) Crude Oil (1mth) 57.0 (42.1) (0.3) Gold 1,185.0 (1.4) (0.5) TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.60 16.00 Sime Darby 9.25 10.20 Genting Malaysia 4.42 4.60 Gamuda 5.24 6.00 Westport 4.36 4.50 SP Setia 3.48 4.07 AFG 4.80 5.30 Hartalega 8.10 8.50 Inari 3.30 3.95 MBM Resources 3.37 4.20 Vitrox 3.76 4.05 Axiata 6.95 7.60