Market Strategy : Malaysia: 1Q 2017 Results Round-up – On Target

STOCK FOCUS OF THE DAY

Sasbadi Holdings : Big plans for the future            BUY

We maintain a BUY on Sasbadi Holdings (Sasbadi) with a FV of RM2.10/share based on a FY18F PE of 24x. We believe the PE of 24x — two notches above its two-year average historical forward PE of 22x — is justified given the strong prospects for its earnings. This is on par with the median PE of 24x for regional stocks with publishing and broadcasting activities. The salient points from our meeting with management yesterday are as follows:

(1) Launch of franchise for STEM-oriented learning centres in FY18. These centres will offer programmes focused on Science, Technology, Engineering and Mathematics (STEM) and be positioned as an alternative to pre-schools and kindergartens (for children aged 4-6 years). (2) i-Learn Ace plots a slow and steady growth towards finding critical mass. (3) Sasbadi sticks to its goal of seeing one M&A annually. We believe earnings in the next half year and beyond will be anchored to the delivery of delayed book titles from 3QFY17, the ramp-up in sales from i-LEARN Ace (for which its direct selling unit will complete its first year in June), and the steady stream of income from MOE contracts for school textbooks (existing contracts stretch up to end-2019).

Others :

Market Strategy : Malaysia: 1Q 2017 Results Round-up – On Target

Telecommunication Sector : Subscriber contraction persists in 1Q2017    NEUTRAL

QUICK TAKE

CB Industrial Product : Building RM39.4mil mill in Central Kalimantan        HOLD

STOCKS ON RADAR

OKA Corporation, WCE Holdings,Malaysia Building Society,Cuscapi

GLOBAL MARKETS

Euro : UK Election: Winds of Change

Malaysia : Healthy reserve position to remain intact

ECONOMIC HIGHLIGHTS

Thailand :  Inflation to remain tame

NEWS HIGHLIGHTS

Nationwide Express : Nationwide Express Q4 net loss widens to RM6.3mil

KESM Industries : KESM earnings for third quarter rise to RM10.6mil

New Hoong Fatt : NHF eyes 70% export revenue by 2021

7-Eleven Malaysia : 7-Eleven aborts rights issue plan