MIB Research Summary - 21 Oct 2014

MY Strategy: Maintain Neutral Values emerging

Malaysian equities not spared from foreign selling; KLCI down 2.3% MTD. KLCI is nearing the low of its PER range of the past two years; current weakness is an opportunity to accumulate. No change to our 2,040 end-2015 KLCI index target; we still Overweight construction, oil & gas. WCT Holdings Bhd: Maintain Hold Expanding existing landbank  Shariah-compliant Upbeat on its landbank expansion in Serendah that would enhance the development value of its existing land. Valuation is fair and would support LT property earnings. Earnings estimate unchanged. Maintain HOLD at MYR2.30 TP. Yinson Holdings: Maintain Buy FPSO Adoon’s contract extended This one-year extension up to Oct 2015, worth USD39m reflects a 9% improvement in dayrate. More positive newsflows in the pipeline - high probability of winning one new FPSO contract in 2014. MYR3.03 TP under review pending outcome of the Ghana tender, due soon. We are positive and maintain our BUY call. Axis REIT: Maintain Hold Earnings on track  Shariah-compliant 9M14 core net profit of MYR62m (-2% YoY) was within our expectation but below consensus. Placement of new units is underway to fund its MYR434m worth of new acquisitions in Shah Alam and Nusajaya Maintain earnings forecasts, DCF-based TP of MYR3.34 and HOLD rating. DiGi.com: Maintain Hold Slowing top-line growth  Shariah-compliant 9M14 EBITDA and net profit were in line with ours and consensus expectation. Revenue growth is slowing, but Digi’s revenue growth would likely still outperform cellular peers in 3Q14. Maintain HOLD, TP unchanged at MYR5.60. Bursa Malaysia: Maintain Hold Within expectations 9M14 results meet expectations. No change to our earnings forecasts and MYR8.00 TP. Maintain HOLD for its capital management potential. Technicals: A rebound to sell into The FBMKLCI rose 14.83 points to 1,803.14 yesterday, while the FBMEMAS and FBM100 also closed higher by 118.67 points and 112.19 points, respectively. We recommend a “Sell on Rallies” stance for the index. Trading idea is a Take Profit call on MRCB with downside target areas at MYR1.38 & MYR1.20.