Malaysia Daily, Maybank KE (2015-05-26)

Daily 26 May 2015 COMPANY UPDATE Star Media Group Bhd: Maintain Hold Bracing for a weak 2015  Shariah-compliant Adex sentiment weaker after GST implementation. In our view, difficult to maintain annual DPS at 18sen. Have cut EPS estimates by 7-9% and annual DPS estimates to 15-17sen in concurrent �Apr adex: Post-GST woes� report. We expect Star to remain Shariah compliant in May 2015 review. Maintain HOLD with lower SOP-based TP of MYR2.50. Click here for full report » RESULTS REVIEW Carlsberg Brewery Malaysia: Maintain Hold 1Q15 affected by trade destocking 1Q15 results within expectations. Volumes should pick up in 2Q post sales disruption in 1Q. Looking at MLM growth of 3% in 2015. Maintain earnings forecasts, and HOLD with an unchanged DCF-TP of MYR13.60. Click here for full report » WCT Holdings: Maintain Buy Uninspiring 1Q15; under review  Shariah-compliant 1Q15 results were below our and consensus estimates. The tepid results were mainly due to weak construction margins caused by timing of its projects. Our call and SOP-based TP of MYR2.10 are put under review. Click here for full report » MBM Resources: Maintain Buy Momentary blip due to GST  Shariah-compliant 1Q15 core earnings below our and consensus expectations. Headline net profit included one-off property sales gain. Blip in associate�s earnings due to low stock-up by Perodua/ Hino dealers prior to GST implementation in April. Forecasts unchanged, expect stronger quarters ahead. Maintain BUY with an unchanged MYR4.20 TP (9x FY15 PER). Click here for full report » Wah Seong: Maintain Hold Challenges ahead  Shariah-compliant 1Q15 core earnings within our/street�s expectations. Challenging outlook; orderbook replenishment and margin pressure will shape WSC�s 2015 outlook. Little catalyst ahead. Maintain HOLD and MYR1.25 TP (10x 2016 PER). Click here for full report » ECONOMICS Singapore CPI, Apr �15 Headline Deflation vs Core Inflation Headline deflation of -0.5% YoY in Apr 2015 (Mar 2015: -0.3% YoY). Core inflation (CPI ex-accommodation and private road transport) continued to rise but by a slower +0.4% YoY (Mar 2015: +1.0% YoY). No change in our 2015 headline CPI forecast of 0%-1.0% (2015 YTD: -0.4%), though full-year inflation looks likely to be at the lower end of the range. Click here for full report » Technicals Index will plunge further The FBMKLCI plunged 20.12 points to 1,767.38 yesterday and the FBMEMAS and FBM100 tumbled 141.64 points and 130.26 points, respectively. In terms of market breadth, the gainer-to-loser ratio was 132-to-805 while 224 counters were unchanged. A total of 1.86b shares were traded valued at MYR1.91b. Our Take-Profit pick for today is IJM with very weak supports of MYR6.13 and MYR6.91 as well as clear downside target areas of MYR6.62 and MYR6.28. Click here for full report » Other Local News Aviation: It will be a complete overhaul. Loss making Malaysia Airlines (MAS) is set to undergo a complete overhaul as it is restructured into a new company, with a rebranding that will be unveiled next week and changes planned to its fleet and network strategies. Christoph Mueller is hired to run the new company entirely on commercial terms and there's very little margin for error. (Source: New Straits Times) MMC Corp: Ready to put in competitive bid. MMC is confident of carrying out MRT 2 works based on its track record in the ongoing construction of the Sungai Buloh to Kajang line. With the experience in the underground construction, MMC is ready to put a very competitive bid to the government. (Source: New Straits Times) MMC Corp: Mulls port assets for listing. The company is considering listing its port assets after spinning off its power unit Malakoff Corp Bhd on Bursa Malaysia earlier this month. On the possible collaboration between MMC and NCB Holdings, in which MMC holds a 15.73% stake, MMC would be happy to assist NCB, and aims to add value to the latter. (Source: The Edge Financial Daily) MHB: Diversification strategy moves into higher gear. The company is diversifying into downstream and onshore segments to sustain its business and remain profitable amid the competitive oil and gas (O&G) industry and falling oil prices. The company has onshore projects in Canada, Qatar, Mozambique and Malaysia. (Source: New Straits Times) E&O: Seeks listing in London. E&O is seeking to list an indirect unit on the London Stock Exchange (LSE) to support its expansion in the UK. In a filing with Bursa Malaysia, it said it had proposed to admit the entire shares and warrants of Eastern & Oriental Property (UK) Ltd (E & O UK) to trading on AIM, the LSE�s international market for smaller growing companies. (Source: The Star) Uzma: Associate bags Petronas jobs worth MYR166m. Uzma, 40% owned Sazma Aviation Sdn Bhd has secured two contratcs worth MYR166.50m from Petroliam Nasional Bhd (Petronas) unit to provide aviation services. The first contract valued at MYR12.5m which was secured from Petronas Carigali Sdn Bhd was to provide helicopter services for the national oil company's well drilling operations on the east coast of Sabah. (Source: The Star) Outside Malaysia E.U: The ECB slowed purchases of public-sector bonds, even after saying it would accelerate buying before liquidity dries up during Europe's summer vacation period. Holdings of government and agency debt under its quantitative-easing program climbed by EUR 11.8b (USD 13b) to EUR 134.2b in the week ended May 22, data on the ECB showed. That's the smallest increase in three weeks. (Source: Bloomberg) Japan: Exports rose more than forecast in April, providing support for an economy that�s expanded for two straight quarters after a recession in 2014. The value of overseas shipments rose 8% YoY, the Ministry of Finance said. Imports slid 4.2% YoY, leaving a JPY 53.4b (USD 440m) trade deficit. Japan's exports exceeded imports in March for the first time in almost three years. (Source: Bloomberg)     Key Indices Value YTD (%) Daily (%) KLCI 1,767.4 0.3 (1.1) JCI 5,288.4 1.2 (0.5) STI 3,460.9 2.8 0.3 SET 1,508.2 0.7 (1.0) HSI 27,992.8 18.6 0.0 KOSPI 2,146.1 12.0 0.0 TWSE 9,645.2 3.6 0.1 DJIA 18,232.0 2.3 0.0 S&P 2,126.1 3.3 0.0 FTSE 7,031.7 7.1 0.0 MYR/USD 3.615 3.4 0.8 CPO (1mth) 2,137.0 (6.7) 0.2 Crude Oil (1mth) 59.7 12.1 0.0 Gold 1,206.6 1.9 0.0 TOP STOCK PICKS Buy rated large caps Price Target Tenaga Nasional 13.24 16.00 Genting Malaysia 4.29 4.60 Gamuda 5.00 6.00 SP Setia 3.37 4.07 AFG 4.73 5.30 Inari 3.37 4.05 MBM Resources 3.45 4.20 Vitrox 3.52 4.05