CIMB Research Summary - 23 Oct 2014

Healthcare - overall - CIMB Healthcare Corporate Day

Nearly 100 investors and 10 companies participated in our inaugural Healthcare Corporate Day yesterday. The consensus was that Malaysia has huge demand potential for healthcare products and services. Strong healthcare demand will benefit the companies that are involved in the healthcare value chain, from hospital operators and pharmaceutical players to rubber product manufacturers. We maintain Overweight on the Hospital and Pharmaceutical sectors as they are the direct beneficiaries of stronger healthcare demand. We retain our Neutral call on the rubber glove sector due to intensifying competition as rubber glove players rush to grab a share in the growing nitrile segment. We prefer IHH, Pharmaniaga, and Kossan.


CapitaMalls Malaysia Trust - Sg. Wang affected by MRT construction

CMMT's 3Q14 core net profit was RM35.7m, bringing its 9M14 core net profit to RM110.6m. This is broadly in line with our expectations as it accounted for 70% of our full-year forecast. We trim our FY14-16 earnings by 1.4-1.5% for housekeeping purposes. Our DDM-based target price is thus lowered slightly to RM1.46. We maintain our Hold call on the stock as we see little in terms of catalysts while we think that investor interest for REITs in general has slumped due to the recent interest rate hike, which reduces the attractiveness of the asset class.


Daibochi Plastic & Packaging - F&B gets a bad wrap

Daibochi’s 9M14 net profit, at 78% of our full-year forecast, was 17% below our and market expectations, mainly due to a slowdown in the F&B sector during 3Q. However, demand recovered from early 4Q onwards. We cut our FY14 EPS to reflect slower sales and higher operating costs but maintain FY15-16 numbers. With the year-end approaching, we roll forward our P/E target of 13x (based on sector) to CY16, which raises our target price to RM4.75. We upgrade the stock from hold to Add. Potential catalysts include more major export orders and a further decline in raw material prices.


Axis REIT - A decent quarter

Axis REIT's (Axis) 3QFY14 core net profit of RM19.2m brings its 9MFY14 core net profit to RM61.9m, which makes up 62% and 64% of our and consensus full-year estimates, respectively. We consider this as in line as we anticipate stronger earnings in the 4Q as Axis completes its acquisition of a few properties, which will contribute to earnings. We finetune our earnings forecasts for housekeeping purposes while our DDM-based target price is raised slightly to RM3.86 (from RM3.82 previously) after we roll forward our valuation base year. We maintain our Add call on the stoc

CIMB Research Summary - 21 Oct 2014

Oil & Gas - overall - Contractually committed
In light of the oil price weakness, we checked with the companies in our oil & gas portfolio on the stability of their order books. The feedback is all-around positive, with the managements assuring us that their companies' contractual terms and rates are intact, and that they are not tied to the oil price. The sector remains an Overweight given its importance in the government's Economic Transformation Programme (ETP) and the contract pipeline arising from Petronas’s capex. Our top picks are SapuraKencana among the big caps and TH Heavy among the small caps.

DiGi.com - Executing well in a tough market
9M14’s core net profit was largely in-line at 73.3% of CIMB’s and 75.5% of the consensus full-year estimates. Service revenue growth slowed further in 3Q14 due to the more competitive market, but the strong prepaid subscriber growth suggests a healthier growth trajectory in 4Q14. A 6.2sen DPS was declared, or a 99% payout, bringing YTD DPS to 18.8sen, in-line with our estimates. We maintain our earnings forecast and DCF-based target price, which is based on the fair valuation of its potential business trust and return of excess cash. DiGi remains an Add and our top Malaysian telco pick, with likely rerating catalysts being stronger-than-peers earnings growth over the next three years, and potential set-up of a business trust structure.

Bursa Malaysia - Decent 3Q14 earnings
Although Bursa’s 9M14 net profit accounted for 76% of our and consensus full-year forecasts, we regard the results as being in line since 4Q revenue is seasonally the weakest. We retain our EPS forecasts. Though we roll forward our target price to end-2015, it is reduced because we lower our target FY16 P/E from 26.5x to 21.5x, on par with the 3-year average given the sliding P/E multiple in the past 2-3 years. However, Bursa remains an Add given (1) its above-market dividend yield of 4-5%, and (2) the positive outlook for the derivative business.

Axis REIT - A decent quarter
Axis REIT's (Axis) 3QFY14 core net profit of RM19.2m brings its 9MFY14 core net profit to RM61.9m, which makes up 62% and 64% of our and consensus full-year estimates, respectively. We consider this as in line as we anticipate stronger earnings in the 4Q as Axis completes its acquisition of a few properties, which will contribute to earnings. We finetune our earnings forecasts for housekeeping purposes while our DDM-based target price is raised slightly to RM3.86 (from RM3.82 previously) after we roll forward our valuation base year. We maintain our Add call on the stock. We think more newsflow on new acquisitions will catalyse the stock.

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.

Research Summary: 6 August 2014

Research Summary: 6 August 2014

Research House	Type	Company/Sector	Report Title	Rating/Call	Target
RHB	Company update	Axis REIT	Brighter growth prospects	Neutral	RM3.34
RHB	Results review	Hartalega	Consolidation mode	Neutral	RM6.95
RHB	Results review	MHB	Still disappointing	Sell	RM3.10
RHB	Sector update	Telco	Staying connected – Aug 2014	Neutral
CIMB	Flash note	Axis REIT	More excitement ahead	Add	RM3.82
CIMB	Results note	MHB	Better yardstick elsewhere	Reduce	RM3.25
CIMB	Results note	Tasek	Dividend surprise in 2Q	Hold	RM15.30
CIMB	Results note	Hartalega	More challenges ahead	Hold	RM6.46
Maybank	Initiate coverage	Boustead Plantations	Plantation estates for free, anyone?	Buy	RM2.16
Maybank	Results review	MHB	In line; changes in methods	Buy	RM4.60
Maybank	Results review	Hartalega	High take-up for new capacity	Buy	RM7.30
Maybank	Technical	MFlour		Short-term buy
Kenanga	Company update	Axis REIT	Focusing on industrial assets	Market perform	RM3.53
Kenanga	Results note	Hartalega	Looking forward to a better 2H15	Outperform	RM7.48
Kenanga	Results note	MHB	Lower results, trimming forecasts	Underperform	RM3.24

Research Summary: 5 August 2014 + Maybank Market Strategy Top Buys

Research Summary: 5 August 2014

Research House	Type	Company/Sector	Report Title	Rating/Call	Target
RHB	Company update	Inari	Looking good ahead	Buy	RM3.82
RHB	Results review	Axis REIT	Results on track with potential new acquisitions	Neutral	RM3.29
RHB	News flash	Gamuda	Acquiring 1,529 acre land South of KL for MYR784m	Buy	RM5.61
CIMB	Results note	Axis REIT	New acquisitions by Axis	Add	RM3.73
CIMB	Sector update	Rubber gloves	No demand breakout from Ebola	Neutral
Maybank	Special feature	MFlour	Flourishing ASEAN consumer play	Not rated	RM2.70
Maybank	Company update	Gamuda	Landbanking continues	Buy	RM5.30
Maybank	Results review	Axis REIT	Results in line; buying new assets	Hold	RM3.14
Maybank	Technical	IJACOBS		Short-term buy
Kenanga	Results note	Axis REIT	Asset acquisition at last	Market perform	RM3.37
Kenanga	Quick bites	Gamuda	Land banking in Southern Klang Valley	Outperform	RM5.52
Kenanga	Initiate coverage	NCB	Northern Port in Klang	Market perform	RM3.10

Maybank - Market Strategy (Top Buys)