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| | | | | | | | | | | | | | Share Price: | MYR17.90 | Target Price: | MYR19.90 | Recommendation: | Buy | | |
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| | | Insurance units for free | | We roll forward our valuations for HL Bank (HLBK MK, HOLD) to CY19 from FY19 and raise our TP to MYR17.70 from MYR15.90. Correspondingly, our RNAV-derived TP for HLFG is raised to MYR19.90 from MYR18.40. We maintain that HLFG is a cheaper proxy to HL Bank and at its current price, investors would be getting its insurance business for free – BUY. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Operating income | 4,543.3 | 5,034.6 | 5,337.5 | 5,612.0 | Pre-provision profit | 2,258.9 | 2,812.3 | 3,038.1 | 3,224.7 | Core net profit | 1,489.5 | 1,608.8 | 1,742.2 | 1,839.8 | Core EPS (MYR) | 1.35 | 1.41 | 1.52 | 1.61 | Core EPS growth (%) | (9.0) | 4.2 | 8.3 | 5.6 | Net DPS (MYR) | 0.38 | 0.38 | 0.44 | 0.46 | Core P/E (x) | 13.3 | 12.7 | 11.7 | 11.1 | P/BV (x) | 1.3 | 1.2 | 1.2 | 1.2 | Net dividend yield (%) | 2.1 | 2.1 | 2.5 | 2.6 | Book value (MYR) | 13.37 | 14.47 | 14.34 | 15.48 | ROAE (%) | 10.5 | 10.1 | 10.5 | 10.8 | ROAA (%) | 0.7 | 0.7 | 0.8 | 0.8 |
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| | MACRO RESEARCH | | | | | | Research Guide
by Chew Hann Wong |
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| | | | | | Invest Malaysia Kuala Lumpur 2018 Conference will feature 61 Malaysian PLCs with a combined market capitalisation of MYR768b (USD195b), comprising an almost equal mix of 31 large caps and 30 mid-small caps (<MYR4b market cap). The Conference will be held on 23-24 January 2018. | |
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| | | | | | Rising steadily…
by Suhaimi Ilias |
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| | | | | | External reserves rose by USD0.6b to USD103.0b at mid-Jan 2018 (end-Dec 2017: USD102.4b), supported by positive portfolio capital and trade flows. The external reserves' retained import cover remains at just over 7 months (mid-Jan 2018: 7.1 months; end-Dec 2017: 7.2 months) while its ratio to short-term external debt is stable at 1.1x. | |
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| | | | | | FBMKLCI – Consolidation at its tail-end
by Nik Ihsan Raja Abdullah |
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| | | | | | Bargain hunting in the afternoon session lifted FBMKLCI 4.32pts higher yesterday. At day's end, the benchmark index rose 0.2% to 1,833.15. Gainers were led by HLBK, ASTRO and GENM. Market breadth turned bullish with gainers outpacing losers by 520 to 502. A total of 4.62b shares worth MYR2.86b changed hands. | |
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| NEWS | | | Outside Malaysia:
Global: IMF warned policymakers to be on guard for the next recession even as it predicted global growth will accelerate to the fastest pace in seven years as U.S. tax cuts spur businesses to invest. The fund raised its forecast for world expansion to 3.9% this year and next, up 0.2 percentage point both years from its projection in October. That would be the fastest rate since 2011, when the world was bouncing back from the financial crisis. The strengthening recovery offers a "perfect opportunity now for world leaders to repair their roof," IMF Managing Director Christine Lagarde told reporters. "Growth in our view needs to be more inclusive." About half of the IMF's global upgrade stems from the Republican tax cuts passed in December and enacted this year. Cuts to the corporate tax rate will give the world's biggest economy a shot in the arm, lifting U.S. growth to 2.7% this year, 0.4 point higher than the fund expected in October, the IMF said in an update to its World Economic Outlook. (Source: Bloomberg)
U.S: Trump makes first big trade move with tariffs aimed at Asia. President Donald Trump slapped tariffs on imported solar panels and washing machines, his first major trade move after repeated threats to crack down on what he sees as unfair foreign competition. The U.S. will impose new duties of as much as 30% on foreign-made solar equipment, the U.S. Trade Representative's office said. The president, who took office a year ago, also approved tariffs starting as high as 50% on imported washing machines, according to USTR. The moves come as Trump prepares to travel to Davos for the World Economic Forum, where the world's business and political elite are meeting to discuss topics including the backlash against globalization. (Source: Bloomberg)
Vietnam: Dramatically accelerating sales of stakes in state-owned companies to boost revenue and ease a strained budget, while seeking to exceed its economic growth target this year. The government plans to sell 6.5 times more shares than it offered last year, Deputy Prime Minister Vuong Dinh Hue said in an interview with Bloomberg Television. The state raised VND135.6t (USD6b) from these sales in 2017. "We need more foreign investment but also want to lure good investors who can help our companies improve corporate governance," Hue said in his office in Hanoi. The assets the government plans to sell "will include leading companies in energy, power and petroleum," he said. (Source: Bloomberg) | |
| | | | | Other News:
Seacera: Unit bags MYR202.8m housing development contract in Terengganu. Its wholly-owned subsidiary Seacera Builders S/B has bagged a mixed development housing contract worth MYR202.8m from Fire Global Development S/B. It said the 60-month contract is planned for 989 units of landed houses with expected gross development value (GDV) of MYR242m, and is targeted for government staff. (Source: The Sun Daily)
Pasukhas: Sells steam coal cargo to Taiwanese firm for USD6.35m. The group has sold a steam coal shipment to a Taiwanese company for USD6.35m on a free-on-board (FOB) basis at anchorage point of South Kalimantan, Indonesia. Pasukhas said its wholly-owned subsidiary Pasukhas Products S/B had on Jan 19 entered into a sale and purchase contract with the Taiwanese company for the sale of coal. (Source: The Edge Financial Daily)
Sumatec: Partner CaspiOilGas inks gas deal with Kazakhstan firm. Its business partner CaspiOilGas LLP (COG) has entered into a pre-sale gas agreement with Kazakhstan's NIPIneftegas (NIPI) consortium for the sale of 6.2b m3 of gas (36.5 million barrels of oil equivalent) over a 15-year period, at the market price. Sumatec, and COG's parent company Markmore Energy (Labuan) Ltd have a gas development & production agreement for the development of gas resources at the Rakushechnoye oil and gas field in the Karakiyan District of the Mangistau Oblast, Kazakhstan. COG is the concession holder Rakushechnoye oil and gas field. (Source: The Edge Financial Daily)
ManagePay: Aims to launch money-lending business in April. Its wholly owned subsidiary ManagePay Resources S/B received a letter of approval dated Jan 17 from the Moneylenders and Pawnbrokers Division of the Ministry of Urban Wellbeing, Housing and Local Government. MPay said with the receipt of the LoA and after six months of preparation for fulfilling the requirements as specified in the conditional approval letter issued by the ministry, the group is now able to start the money-lending business targeting both individuals and businesses, over and above MPay's Quickash Peer-to-Peer (P2P) financing platform, which was launched in September 2017. (Source: The Sun Daily) | |
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