Mah Sing: To invest MYR5b in Bandar Baru Meridin East. The company will invest MYR5b to build the

COMPANY RESEARCH IOI Corporation | RSPO suspension lifted Chee Ting Ong Perisai Petroleum | Addressing short-term challenges Thong Jung Liaw Axis REIT | Enlarging the industrial portfolio Kevin Wong

MACRO RESEARCH Malaysia | Stable in 2H July 2016 Suhaimi Ilias Malaysia | Better than expected Suhaimi Ilias

NEWS Outside Malaysia Other News

COMPANY RESEARCH

Malaysia Company Update IOI Corporation (IOI MK) by Chee Ting Ong Share Price: MYR4.45 Target Price: MYR4.30 Recommendation: Hold RSPO suspension lifted RSPO lifted IOI’s certification suspension ahead of our expectation. It is a positive surprise but largely priced in after Friday’s share price jump. The lifting will help contain losses as IOI stands to lose more business if the suspension drags on. We have restored our FY17-18F core net profit forecasts by +7%/+4% and lifted our TP to MYR4.30 (+7%) on unchanged 25x FY17 PER, pegged at its 5-year historical mean. IOI remains a HOLD. FYE Jun (MYR m) FY14A FY15A FY16E FY17E Revenue 12,664.1 11,621.0 11,910.3 11,926.1 EBITDA 2,376.3 847.4 1,673.8 1,782.2 Core net profit 1,549.4 860.1 1,022.8 1,097.6 Core FDEPS (sen) 24.0 13.3 15.8 17.0 Core FDEPS growth(%) (6.9) (44.6) 18.9 7.3 Net DPS (sen) 20.0 9.0 7.9 8.5 Core FD P/E (x) 18.5 33.4 28.1 26.2 P/BV (x) 4.8 5.7 5.2 4.7 Net dividend yield (%) 4.5 2.0 1.8 1.9 ROAE (%) 15.7 15.5 19.2 18.8 ROAA (%) 7.9 6.0 7.5 7.9 EV/EBITDA (x) 15.8 36.9 20.0 18.6 Net debt/equity (%) 58.6 96.1 81.9 68.3 Chee Ting Ong    (603) 2297 8678    ct.ong@maybank-ib.com

Malaysia TP Revision Perisai Petroleum (PPT MK) by Thong Jung Liaw Share Price: MYR0.23 Target Price: MYR0.24 Recommendation: Hold Addressing short-term challenges Perisai’s key agenda is to ride through the cyclical downturn and its immediate plan is to restructure its MYR359m MTNs due in Oct 2016, a crucial exercise. It remains committed to cutting costs and divesting underperforming assets (E3 and MOPU). Executing these plans would ease its financials. Having said that, these are defensive moves, which reflect our HOLD call. The 11% cut in our TP to MYR0.24 inputs a 10% discount to its 1x EV/replacement valuations to reflect short-term risks. FYE Dec (MYR m) FY14A FY15A FY16E FY17E Revenue 122.1 214.8 191.6 182.8 EBITDA 50.2 118.4 76.7 67.9 Core net profit 11.8 3.2 2.5 (1.6) Core EPS (sen) 1.0 0.3 0.2 (0.1) Core EPS growth (%) (84.1) (73.2) (21.4) nm Net DPS (sen) 0.0 0.0 0.0 0.0 Core P/E (x) 22.4 83.5 106.2 nm P/BV (x) 0.2 0.4 0.4 0.4 Net dividend yield (%) 0.0 0.0 0.0 0.0 ROAE (%) 1.1 0.3 0.4 (0.2) ROAA (%) 0.6 0.1 0.1 (0.1) EV/EBITDA (x) 34.2 15.3 22.1 24.4 Net debt/equity (%) 90.9 192.4 173.4 160.5 Thong Jung Liaw    (603) 2297 8688    tjliaw@maybank-ib.com

Malaysia Company Update Axis REIT (AXRB MK) by Kevin Wong Share Price: MYR1.80 Target Price: MYR1.70 Recommendation: Hold Enlarging the industrial portfolio Post the 1H2016 results analyst briefing, we remain neutral on AXRB’s near-term earnings outlook but positive on its industrial buildings' long-term and stable prospects. Growth catalysts are future acquisitions of industrial assets and redevelopment of Axis PDI Centre. Maintain HOLD with an unchanged DCF-TP of MYR1.70 (WACC: 6.2%, terminal yield: 7%). FYE Dec (MYR m) FY14A FY15A FY16E FY17E Revenue 140.0 165.7 168.5 183.6 Net property income 118.5 141.9 142.6 156.5 Distributable income 81.3 91.5 92.3 104.4 DPU (sen) 8.9 7.6 7.6 8.5 DPU growth (%) 6.8 (14.9) (0.1) 13.1 Price/DPU(x) 20.3 23.8 23.8 21.1 P/BV (x) 1.5 1.5 1.5 1.5 DPU yield (%) 4.9 4.2 4.2 4.7 ROAE (%) 6.9 6.8 6.8 7.7 ROAA (%) 4.4 4.3 4.3 4.8 Debt/Assets (x) 0.3 0.3 0.3 0.3 Kevin Wong    (603) 2082 6824    kevin.wong@maybank-ib.com

MACRO RESEARCH MY: External Reserves, 29 July 2016 Economics Research by Suhaimi Ilias Stable in 2H July 2016 External reserves as at end-July 2016 were the same as at mid-July 2016 i.e. USD97.3b, which is a tad higher than the USD97.2b as at end-June 2016. The latest count covers 8.1 months of retained imports and 1.2 times of short-term external debt. Suhaimi Ilias    (603) 2297 8682    suhaimi_ilias@maybank-ib.com Zamros Dzulkafli    (603) 2082 6818    zamros.d@maybank-ib.com MY: External Trade, June 2016 Economics Research by Suhaimi Ilias Better than expected Exports in June 2016 rebounded by +3.4% YoY (May 2016: -0.8% YoY) while import growth quickened to +8.3% YoY (May 2016: +3.1% YoY), resulting in wider trade surplus of +MYR5.52b (May 2016: +MYR3.3b). Faster import growth relative to export growth in 2Q 2016 resulted in narrower trade surplus in 2Q 2016, implying net external demand was a drag in 2Q 2016. We expect external trade condition to remain challenging in 2H 2016. Suhaimi Ilias    (603) 2297 8682    suhaimi_ilias@maybank-ib.com Zamros Dzulkafli    (603) 2082 6818    zamros.d@maybank-ib.com

NEWS Outside Malaysia: U.S: Payrolls surge as hiring gains broad-based for second month. Payrolls jumped in July for a second month and wages climbed, pointing to renewed vigor in the U.S. labor market that will sustain consumer spending into the second half of the year. Payrolls climbed by 255,000 last month, following a 292,000 gain in June that was a bit larger than previously estimated, a Labor Department report showed. The jobless rate held at 4.9% as many of the people streaming into the labor force found jobs. (Source: Bloomberg) U.K. July business confidence falls to three-year low, BDO says. Optimism index in July Business Trends Report fell to 97.9 from 98.9 in June, BDO LLP says e-mailed statement. “While there is a definite and continued decline in the confidence of U.K. business people, the latest drops are not yet as dramatic as may have been predicted” after the EU referendum on June 23. This suggests that the initial impact of the Brexit vote has been less severe than expected” (Source: Bloomberg) China: Foreign-currency stockpile stabilized at USD 3.2tr. China’s foreign-exchange reserves were little changed in July as the central bank burned less of the hoard to defend its currency and weakness in the dollar helped to boost valuations. The reserves edged down by USD 4.1b to USD 3.2tr, the People’s Bank of China said in a statement. The stabilization suggests capital-outflow pressures eased. The yen and the euro strengthened last month, aiding the dollar valuation of the stockpile, on haven demand amid Britain’s vote to leave the European Union. (Source: Bloomberg) Other News: Mah Sing: To invest MYR5b in Bandar Baru Meridin East. The company will invest MYR5b to build the 531.35ha Bandar Baru Meridin East in Kong Kong, Pasir Gudang. The five-phased development project which aims to meet the needs of the people is expected to be fully completed between 12 to 15 years. According to Johor Menteri Besar Datuk Seri Mohamed Khaled Nordin, the project which is being implemented in East Johor, will help improve the people’s lives. (Source: The Edge Financial Daily) Protasco: Wins MYR315.8m highway job. The company’s subsidiary HCM Engineering Sdn Bhd has received letter of acceptance from Turnpike Synergy Sdn Bhd for the construction of a stretch of the proposed Sungai Besi-Ulu Kelang Elevated Expressway (SUKE) for MYR315.8m. The contract is to be undertaken jointly by HCM and Hatimuda Sdn Bhd on a 40:60 basis. Work is expected to be completed in 30 months, by Feb 28, 2019. (Source: The Sun Daily) MMC Corp: Acquires 49% of Penang Port. The company is buying a 49% stake in Penang Port Sdn Bhd (Penang Port) for MYR200m in a related party deal. A conditional share sale and purchase agreement last Friday was entered with Seaport Terminal (Johore), which is a major shareholder of MMC for the stake. According to MMC, the acquisition is in line with the company’s initiative to make further strategic investments in one of its core business – ports and logistics. The deal will be financed with internally generated funds and/or bank borrowings. (Source: The Sun Daily) AirAsia: Denies (again) it plans to sell leasing arm. The company has again denied it plans to sell off its majority stake in its plane-leasing unit, Asia Aviation Capital Ltd. As filed with Bursa, the company said its board of directors had not been presented with any proposal or deliberated on the matter. "As part of our corporate disclosure policy, we will make the necessary disclosures to Bursa Malaysia as and when there are material developments on this matter in accordance with the Main Market Listing Requirements," it said. The company added that it is continuously assessing and evaluating any corporate proposal that may enhance its shareholders' value such as acquisitions, asset divestment and corporate restructuring. (Source: The Sun Daily)