MIB Research Summary - 20 Nov 2014

AirAsia X Bhd: Maintain Sell Fighting for survival

3Q14 core net loss of MYR185m (vs. profit MYR16m in 3Q13) was greater than forecast on weak yields and higher cost. All sectors were loss making with the exception of Nepal. Maintain SELL with a lower TP of MYR0.57 (from MYR0.63). AirAsia Bhd: Maintain Hold Losing the low cost advantage 3Q14 core net income of MYR112.4m (-28% YoY, +342% QoQ) was within expectations. Credible signs that market has bottomed, but expect slow yield recovery. Earnings growth driven by lower fuel cost. Maintain HOLD, target price raised to MYR2.60 (from MYR2.30) due to positive earnings revision. AMMB Holdings: Maintain Hold Better, on lower provisions 2QFY15 core net profit rebounded 35% QoQ, but 1HFY15 core earnings still down 14% YoY. FY15 forecast maintained, trimming FY16-17 by 5% p.a. to factor in slower loans growth and lower NIMs. HOLD maintained, lowering TP to MYR6.90 from MYR7.70 on a lower CY15 P/BV peg of 1.5x (1.7x previously). Kuala Lumpur Kepong: Maintain Hold Set back by oleochemicals business  Shariah-compliant FY9/14 results hurt by weak downstream earnings. Muted earnings outlook in FY9/15 as oleo-chemical, refinery and property businesses remain challenging. Maintain HOLD on unchanged TP of MYR23.20 after rolling forward our valuation on unchanged 23x PER target. Boustead Plantations: Maintain Buy Rich land value caps downside  Shariah-compliant 3Q14 results disappointed due to low CPO ASP achieved and lower-than-expected FFB output. Share price downside limited, backed by strategic land that has development potential, offering a RNAV of e.MYR2.96/sh. Maintain BUY with a revised SOP-TP of MYR2.03 (previously MYR2.16). TH Plantations: Maintain Hold Hit by dry spell  Shariah-compliant Results below our and consensus forecasts. Cut FY14 net profit by 9% on lower production and CPO ASP. FY15-16 forecasts unchanged but have downside potential. Maintain HOLD and TP of MYR1.65 on 15x 2015 PER. Star Publications: Maintain Buy Dividend yields look enticing  Shariah-compliant 3Q14 results slightly below; trim estimates by 6-11%. 18sen p.a. DPS may still hold; yields very attractive at 7.8%. Trim TP from MYR2.89 to MYR2.65 but upgrade to BUY. MSM Malaysia: Maintain Buy Expect a pickup in 4Q14  Shariah-compliant 9M14 results were above expectations at 80%/77% of our and consensus full-year forecasts. Anticipating a better 4Q14 on higher margin assumption, FY14 net profit forecast raised 5%. Upgrade to BUY with a higher TP of MYR5.50 (14x FY15 PER). Inari Amertron: Maintain Buy 1QFY6/15: Expect a strong start Expect net profit of MYR32-35m (+4-13% QoQ), supported by strong growth in overall smartphone demand. Inari is a beneficiary of the stronger USD, providing upside to our earnings forecasts. Reiterate BUY with a Street-high cum-rights TP of MYR4.20 (on unchanged 17x CY15 PER peg). Plantations: Maintain Neutral El Nino Alert! The Australia Bureau of Meteorology (ABM) upgraded the threat of an upcoming El Nino; with at least 70% probability. The new El Nino threat may boost sentiment and drive CPO price higher, aided by seasonal price recovery in 1Q15. Investors should position for a short term trade. BUY First Resources, Bumitama Agri, Sime Darby, Sarawak Oil Palms, Ta Ann and TSH Resources for earnings recovery play. TECHNICAL: Low of 1,805 with rebound confirmation The FBMKLCI advanced 6.01 points to 1,824.39 yesterday, while the FBMEMAS and FBM100 also closed higher by 32.19 points and 34.44 points, respectively. We recommend a “Nibble on Dips” stance for the index. Trading idea is a Short-Term Buy on GAB with upside target areas at MYR13.94 & MYR14.17. Stop loss is at MYR12.48. NEWS MSM: MSM plans to expand through acquisitions. MSM Malaysia Holdings, the sugar refiner remains focused on growing through acquisitions, having set its sight on its only local competitor, Central Sugars Refinery Sdn Bhd, that is owned by Tradewinds (M). MSM is already in talks to acquire an Asian upstream company and is also in discussions with a foreign partner to buy over a sugar plantation company in the region. (Source: The Star) Bina Puri: Bina Puri eyes listing of Indonesian power assets. Bina Puri Holdings plans to list its Indonesian power assets, possible as early as next year, saide group executive director Matthew Tee Kai Woon. The group has seven micro diesel-generated power plants across Indonesia, with a total capacity of 25MW. (Source: The Edge Financial Daily) U.S: Housing starts fall on multifamily as permits climb. Residential-construction permits in the U.S. climbed in October to a six-year high, pointing to a pickup in homebuilding after a slowdown in multifamily projects led to a drop in activity. Groundbreakings for single-family homes, condominiums and apartments fell 2.8 %to a 1.01 million annualized rate following September's 1.04 million pace, which was stronger than previously reported, the Commerce Department reported. Permits for future projects rose to the highest level since June 2008. (Source: Bloomberg) U.S: Fed officials saw need to watch for price expectations drop. Many Federal Reserve policy makers last month said they should be on the lookout for signs of a decline in expectations for inflation, minutes of their meeting show. "Many participants observed the committee should remain attentive to evidence of a possible downward shift in longer- term inflation expectations," according to a record of the Oct. 28-29 Federal Open Market Committee meeting released in Washington. "Some of them noted that if such an outcome occurred, it would be even more worrisome if growth faltered." (Source: Bloomberg)

Research Summary: 21 August 2014

Research Summary: 21 August 2014

Research House	Type	Company/Sector	Report Title	Rating/Call	Target
RHB	Results review	Bumi Armada	Calmer seas ahead	Buy	RM4.52
RHB	Results review	Kossan	Better outlook for 2H	Buy	RM5.12
RHB	Results review	AirAsia	2Q dips into losses but look beyond this quarter	Buy	RM2.73
RHB	Results review	MSM	Not-so-sweet prospects	Neutral	RM5.23
RHB	Results review	IOI	Manufacturing division weakens	Neutral	RM5.42
RHB	Results review	KLK	FY14 may not be affected by lower CPO prices	Neutral	RM25.20
CIMB	Results note	Eksons	Cash rich after land sale	Hold	RM1.54
CIMB	Results note	AirAsia	The dawn of industry rationality?	Add	RM2.88
CIMB	Results note	IOI	Lower 4Q downstream earnings	Reduce	RM4.49
CIMB	Eco focus	Economic	Malaysia’s inflation outlook amid fuel subsidy review & GST
CIMB	Eco update	Economic	Inflation ebbs to 3.2% in July
CIMB	Flash note	Star	Growing the non-print segment	Hold	RM2.70
CIMB	Results note	MSM	New APs remove sugar coating	Hold	RM5.22
CIMB	Results note	Kossan	2Q impacted by water rationing	Add	RM4.71
CIMB	Results note	KLK	Production recovers but…	Reduce	RM22.50
CIMB	Result note	Gas Malaysia	Fired up by gas price revisions	Add	RM3.96
CIMB	Sector	Autos	July driven by Raya promotions	Neutral
Maybank	Sector	Banking	Deposit competition still intense	Neutral
Maybank	Results review	AirAsia	It was a mirage, 2014 will be tough	Hold	RM2.55
Maybank	Results review	Bumi Armada	Results on track	Buy	RM4.55
Maybank	Results review	KLK	A traditionally weak 3Q	Hold	RM23.20
Maybank	Results review	IOI	Pricey on forward earnings	Sell	RM3.97
Maybank	Results review	Boustead Plantations	Downside capped by its land value	Buy	RM2.16
Maybank	Results review	Gas Malaysia	Potential dividend bummer?	Hold	RM3.80
Maybank	Results review	Kossan	Stronger growth ahead	Buy	RM5.00
Maybank	Results review	MSM	2A14: Within expectations	Hold	RM5.00
Maybank	Company update	MBM Resources	Excitement from Perodua	Buy	RM3.42
Maybank	Company visit	Star	Already in the price	Hold	RM2.89
Maybank	Eco update	Economic	CPI July 2014 – eased but still above 3.0%
Maybank	Technical	PJDev		Short-term buy
Kenanga	Results note	AirAsia	Better prospects over the horizon	Market perform	RM2.47
Kenanga	Results note	Gas Malaysia	2Q14 in line; upgrade to MP	Market perform	RM3.54
Kenanga	Results note	IOI	FY14 below consensus	Market perform	RM5.30
Kenanga	Results note	Kossan	Expect a better 2H14	Outperform	RM4.86
Kenanga	On radar	KSL	Back in our “sights”	Trading buy	RM6.63
Kenanga	Company update	MBM Resources	Look further down the road	Market perform	RM3.06
Kenanga	Eco viewpoint	Economic	CPI: Tapered off slightly to 3.2% in July
Kenanga	Results note	KLK	9M14 in line	Market perform	RM25.00
Kenanga	Company update	Matrix	Banking on GDV replenishment	Outperform	RM3.20
Kenanga	Company update	Star	Challenging 2H14	Underperform	RM2.44
Kenanga	Initiate coverage	Thong Guan	Value unwrapping!	Outperform	RM3.70
HL	Results review	Kossan	2Q14 results – below expectations	Hold	RM3.70
HL	Results review	AirAsia	Further yield pressure in 2Q14	Hold	RM2.20
HL	Results review	Bumi Armada	Signing block 15.06 Angola…	Buy	RM4.27
HL	Results review	KLK	Below expectations	Sell	RM20.41
HL	Results review	IOI	Below expectation	Hold	RM4.39
HL	Results review	MBM Resources	Watch out for 2015 fruits bunches	Buy	RM4.00
HL	Company update	Matrix	Making the right moves	Buy	RM3.74
HL	Briefing	Star	1HFY14 analyst briefing	Hold	RM2.55
HL	Eco update	Economic	July inflation report