Malaysia Daily, Maybank KE (2015-04-30)

Daily 30 April 2015 RESULTS PREVIEW Inari Amertron: Maintain Buy Small speed bump  Shariah-compliant Expect marginally weaker 3Q net profit of MYR37m-40m (-2% to -9% QoQ), mainly from start-up costs of new plant, P13. Catalysts: Stronger orders for RF related products and new product outsourcing, both from Avago group of companies. Tweak our FY15/16/17 forecasts by �5%/+1%/+3%. Upping our TP to MYR4.05 (+3%) on unchanged 16x CY16 PER. BUY. Click here for full report » COMPANY UPDATE Berjaya Auto: Maintain Buy Proposes 2-for-5 bonus issue  Shariah-compliant Bonus issue will lift share base by up to 40%, to c.1.14m shares. Expect this corporate exercise to improve liquidity. Remains our preferred pick on suppressed JPY/MYR forex and exposure to high growth Philippines car market. Reiterate BUY with a higher TP of MYR5.00 (+19%) having rolled forward valuation to 12.5x CY16 (from 13x CY15). Click here for full report » RESULTS REVIEW NCB Holdings: Maintain Buy Bottoms up  Shariah-compliant Strong 1Q15 net profit (+2.4x YoY, +28% QoQ) ahead of our expectation, driven by its port operation. Earnings recovery thesis intact and potential container handling tariff hike is a catalyst. Maintain BUY. Earnings forecasts and TP are under review. Click here for full report » Sunway REIT: Maintain Hold No surprises 9MFY6/15 realised net profit of MYR185m (+5% YoY) and net DPU of 6.0sen were in line. Sunway Putra Mall, Wisma Sunway and Sunway Hotel Georgetown�s full-year contribution to enhance FY16 profit. We raise TP to MYR1.60 (+10sen) as we roll forward DCF-valuation base year to FY16. Maintain HOLD. Click here for full report » Technicals Profit taking ahead of holiday weekend The FBMKLCI tumbled 12.13 points to 1,842.93 yesterday, while the FBMEMAS and FBM100 also closed lower by 64.16 points and 69.10 points, respectively. We recommend a �Nibble on Dips� stance for the index. Trading idea is a Take Profit call for MYEG with downside target areas at MYR2.18 & MYR2.00. Click here for full report » Other Local News Infrastructure: MRT Corp aims to cut private land buy cost for the MYR23b Sungai Buloh-Serdang-Putrajaya MRT project (Line 2). MRT Corp hopes to repeat its cost-saving feat which managed to save MYR1.6b from the MYR3b that was initially set aside for the acquisition of 23 properties along the MRT Sungai Buloh-Kajang (Line 1) project. (Source: The Edge Financial Daily) Infrastructure: Najib may announce details of HSR next week. Project is still in govt-to-govt discussion stage with Singapore. Announcement could be made after the annual Malaysia-Singapore Leaders' Retreat next week, said Land Public Transport Commission (SPAD). (Source: The Edge Financial Daily) Banking: Maybank Ageas to expand to Indonesia and the Philippines as early as 2016 via acquisitions. Chief executive officer Kamaludin Ahmad said the group was looking at acquiring small and inexpensive insurance players in both markets and was in talks with several parties for the expansion exercise. Maybank Ageas was targeting companies with lower valuation of between three to five times book value but with strong business operations and distribution channels. (Source: The Star) VSolar: Queried over unusual share price movement by Bursa Malaysia, volume rise. VSolar, formerly known as Fast Track Solution Holdings, was required to disclose whether there is any corporate development, rumor or any possible explanation that have contributed to the unusual trading. It shares started to drop then on the back if heightened selling pressure. It incurred a widened net loss of MYR3.5m for the financial year ended December 31, 2014 compared with MYR2.04m a year ago. (Source: The Sun Daily) Westports Holdings: Sets to pay higher tax. The group is looking at paying 24% in tax this year after the government declined to renew the port operator's investment tax allowance (ITA). The statutory tax rate is 25% but the group only paid 11.5% last year because it had made a lot of investments. (Source: The Edge Financial Daily) Willowglen MSC: Eyes TNB as client. The company hopes to ramp up its provision of Scada services to the power sector locally, and is eyeing on the biggest Scada user in Malaysia. Currently, Scada accounts for 88% of group revenue and the remainder is from its integrated monitoring systems segment. (Source: The Edge Financial Daily) Outside Malaysia U.S: Fed sees economy accelerating after slump in 1Q 2015. Federal Reserve policy makers said they expect the economy to pick up after growth ground to a virtual halt in the first quarter, suggesting they are still open to an interest-rate increase later in the year. The Federal Open Market Committee "continues to expect that, with appropriate policy accommodation, economic activity will expand at a moderate pace," the panel said in a statement in Washington. The slowdown partly reflected �transitory factors," it said. By repeating its view that growth will rebound up to a "moderate pace," the committee put financial markets on notice that the first rate increase since 2006 is still in play. (Source: Bloomberg) U.S: Economy choked by sputtering business spending, exports in 1Q 2015. Gross domestic product rose at a 0.2% annualized rate after advancing 2.2% the prior quarter, Commerce Department data showed. After their meeting, Federal Reserve policy makers said some of the headwinds holding back the U.S. will probably fade and give way to �moderate� growth. While the economy is likely to bounce back from the temporary restraints of harsh winter weather and delays at West Coast ports, the harm caused by the plunge in fuel prices and stronger dollar may be longer-lasting. (Source: Bloomberg) Brazil: Raises key rate for fifth time as inflation quickens. The bank's board, led by its President Alexandre Tombini, in a unanimous vote raised the key rate by a half-point to 13.25%, the highest since January 2009. The statement accompanying the decision uses the same language as the prior communiqu�. (Source: Bloomberg) Thailand: Unexpectedly cuts rate after growth forecast cut. The Bank of Thailand lowered its one-day bond repurchase rate by a quarter of a percentage point to 1.5%, a move predicted by only two of 20 economists in a Bloomberg survey. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,842.9 (1.3) (0.7) JCI 5,105.6 19.5 (2.6) STI 3,487.2 10.1 (0.2) SET 1,522.5 17.2 (0.6) HSI 28,400.3 21.9 (0.1) KOSPI 2,142.6 6.5 (0.2) TWSE 9,853.8 14.4 (1.0) DJIA 18,035.5 8.8 (0.4) S&P 2,106.9 14.0 (0.4) FTSE 6,946.3 2.9 (1.2) MYR/USD 3.560 8.7 0.5 CPO (1mth) 2,078.0 (20.9) (1.0) Crude Oil (1mth) 58.6 (40.5) 2.7 Gold 1,207.5 0.5 0.4 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 14.46 16.00 Sime Darby 9.12 10.20 Genting Malaysia 4.38 4.60 Gamuda 5.24 6.00 Westport 4.30 4.50 SP Setia 3.47 4.07 AFG 4.79 5.30 Hartalega 8.18 8.50 Inari 3.15 3.95 MBM Resources 3.39 4.20 Vitrox 3.52 4.05 Axiata 6.83 7.60