STOCK FOCUS OF THE DAY
Malayan Banking : Pressure remains on Singapore asset quality Hold
We maintain our HOLD call on Malayan Banking (Maybank) with a revised fair value of RM9.10/share (previously RM9.20/share) after lowering our net profit estimates. We have fine-tuned our FY17/18/19 net profit slightly by -2.4%/-0.7%/-0.1% after imputing higher credit cost and OPEX as well as adjusting our total income estimates. Our ROE expectation for FY18 of 10.7% remain unchanged and we continue peg the stock to a P/BV of 1.3x.
We remain concerned on the group's GIL ratio which continued to trend upwards as well as the high percentage of oil & gas loans classified as watch list at 43.0%. Pressure remained on its asset quality of oil & gas loans in Singapore of which further deterioration could occur if oil prices fall lower than industry-wide expectation.
Others :
Axiata : Mildly positive on Pakistan tower expansion Buy
Bonia Corporation : Caps year with a turn Buy
Ikhmas Jaya : A soft patch in 1HFY17 Buy
Titijaya Land : Positive growth sustained Buy
Bison Consolidated : Proposal for multiple corporate exercises Hold
Felda Global : Dragged by MSM Sell
QUICK TAKES
UMW Holdings : JV with Komatsu Hold
Plantation Sector : News flow for week 28 – 31 August Neutral
STOCK ON RADAR
Sunway Construction Group, TRC Synergy, Malaysia Steel Works, Systech
NEWS HIGHLIGHTS
Fajarbaru : Wants a slice of action in current construction boom
HeveaBoard : Faces challenges to sustain growth
Oil & Gas Sector: Sarawak oil play
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