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MY Strategy NEUTRAL - I3investor2014/06/02 · MY Strategy NEUTRAL (unchanged) 1Q report card:...
Transcript of MY Strategy NEUTRAL - I3investor2014/06/02 · MY Strategy NEUTRAL (unchanged) 1Q report card:...
June 02, 2014
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SEE PAGE 17 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS PP16832/01/2013 (031128)
MY Strategy NEUTRAL (unchanged)
1Q report card: Relatively neutral 1Q14 core net profit of our research universe expanded 3.4%
YoY; 65% of the results were in line.
Our 2014/2015 KLCI core earnings estimates are shaved by
0.7%/1.1%; we now expect slightly slower 7.0%/8.0% growth.
Do not expect much of a re-rating; no change to our YE KLCI
target of 1,940.
What’s New
1Q14 core net profit of our research universe expanded 3.4% YoY
but was softer QoQ, at -3.2% (seasonal). Most of our stock coverage
reported results that were within our expectations (65%). Except
for the auto, telco and transport (in particular airlines) sectors
where their results disappointed, the other sectors were largely in
line. Power was the only sector that positively surprised.
Sectors that reported both YoY and QoQ growth in core earnings
were plantation and consumer. Sectors that saw both YoY and QoQ
weaker core earnings were transport (airlines), oil & gas, property
(developers), auto, media and the glove producers.
Among the big caps, stocks whose earnings surprised on the upside
were Malaysia Airports, KL Kepong, HLFG, YTLP and TNB. Stocks
that negatively surprised were Malaysian Airlines, AirAsia X, Bumi
Armada, Guinness, Felda Global, Axiata, Telekom and Dialog.
We observe that results disappointment at the airlines came from a
still challenging environment while dismal at the auto sector came
partly from lower volume sales and margins compression on higher
A&Ps as competition heats up. Pockets of disappointment at the
consumer related sector came from weaker consumer sentiment
(volume sales were down) and poorer adex sentiment (media).
Our 2014/2015 KLCI core earnings estimates are shaved by 0.7%/
1.1%, and we now expect slightly slower 7.0%/8.0% growth vs
8.1%/8.0% previously. The revised core earnings growth of our
research universe is now 7.9%/10.4% vs 12.3%/9.5% previously.
What’s Our View
There is no change to our 1,940 end-2014 KLCI target which implies
16.0x 12M forward earnings. At its 1,873 close on 30 May, the KLCI
trades at 16.7x/15.5x PERs for 2014/2015 and 16.1x on 12M
forward PER, +0.7SD of its long-term mean. The KLCI has neither
re-rated nor de-rated much in the last 5M, trading within the
15.8x-16.3x 12M forward PER range (2013: 15.3-16.6x). PEG is
about 2x now, above that of its regional peers.
There is no change to our sector weights; we remain OVERWEIGHT
on construction, oil & gas, power and gloves. We also remain
selective on stocks, with no major changes in our stock picks.
Analyst
Wong Chew Hann
(603) 2297 8686
Current KLCI: 1,873 (30 May)
YE KLCI target: 1,940 (unchanged)
M’sia equities growth & valuation
2013A 2014E 2015E
KLCI @ 1,873 PE (x) 18.0 16.7 15.5
Earnings Growth (%) 5.4% 7.0% 8.0%
Research Universe
PE (x) 18.7 17.4 15.7
Earnings Growth (%) 6.8% 7.9% 10.4%
Our sector weights
OW Auto, Construction, Oil & Gas, Power,
Gloves
N Aviation, Banking, Building materials, Consumer, Gaming, Media, Non-banking
finance, Plantation, Property, Petrochem, Telco, Ports
UW -
Our top BUY picks
Stock Name BB Ticker Shr Px @
30 May
TP
Tenaga TNB 12.06 14.00
Genting Malaysia GENM 4.07 4.74
Hong Leong Bank HLBK 13.88 16.20
AMMB Holdings AMM 7.34 8.50
Bumi Armada BAB 3.52 4.55
IJM Corp IJM 6.69 7.20
MPHB Capital MPHB 2.05 2.42
Source: Maybank KE
June 02, 2014 2
Strategy
1Q14 results roundup
Core earnings up 3.4% YoY
1Q14 core net profit of our research universe expanded 3.4% YoY but was
softer on a QoQ comparison, at -3.2%. The QoQ weakness is seasonal; we
observed that in 1Q11, 1Q12 and 1Q13. The recent quarter saw more of
our stock coverage reporting results that were within our expectations
(65%) compared to the previous quarters (average 56% in line, in 1Q13-
4Q13). Except for the auto, telco and transport (in particular airlines)
sectors where their results disappointed, the other sectors were largely in
line. Power was the only sector that positively surprised in earnings
delivery.
Quarterly recurring net profit of research universe, 1Q 2009 - 1Q 2014
Source: Maybank KE
Sector earnings analysis
Sectors that reported both YoY and QoQ growth in 1Q14 core earnings
were plantation and consumer.
Sectors that saw both YoY and QoQ weaker core earnings were
transport (essentially the airlines), oil & gas, property (developers),
auto, media and the glove producers.
Sectors that reported YoY core earnings growth but QoQ core earnings
contraction were banking, power, telco, construction and building
materials.
4000
6000
8000
10000
12000
14000
16000
18000
CY
1Q
09
CY
2Q
09
CY
3Q
09
CY
4Q09
CY
1Q
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CY
2Q
10
CY
3Q
10
CY
4Q
10
CY
1Q
11
CY
2Q
11
CY
3Q
11
CY
4Q
11
CY
1Q
12
CY
2Q
12
CY
3Q
12
CY
4Q
12
CY
1Q
13
CY
2Q
13
CY
3Q
13
CY
4Q
13
CY
1Q
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MYR m
1Q14: +3.4% YoY, -3.2% QoQ
June 02, 2014 3
Strategy
Quarterly recurring net profit of research universe, 3Q 2011 - 1Q 2014
CY
3Q11
CY
4Q11
CY
1Q12
CY
2Q12
CY
3Q12
CY
4Q12
CY
1Q13
CY
2Q13
CY
3Q13
CY
4Q13
CY
1Q14
QoQ
(%)
YoY
(%)
Financials (1) 4,674 4,808 5,167 5,142 5,429 5,370 5,144 5,454 5,949 5,748 5,691 (1.0%) 10.6%
Plantations 2,571 2,463 1,823 2,131 2,094 1,729 1,636 1,562 1,450 1,645 1,795 9.1% 9.7%
Energy utils (2) 1,053 533 556 1,463 1,141 1,265 1,102 1,704 1,057 1,550 1,395 (10.0%) 26.5%
Telcos 1,689 1,910 1,835 1,750 1,712 1,580 1,670 1,919 2,116 1,997 1,698 (15.0%) 1.6%
Transport (3) 275 167 (210) 319 485 1,259 323 291 994 377 211 (44.1%) (34.8%)
Construction 273 317 194 277 284 332 213 277 307 312 277 (11.4%) 29.9%
Building Mats 107 119 49 68 110 95 62 91 120 136 102 (24.9%) 64.4%
Oil & gas 601 529 643 675 645 620 701 1,286 706 727 661 (9.1%) (5.7%)
Property & REIT 370 497 447 507 515 709 694 636 684 739 681 (7.7%) (1.8%)
Consumer 842 660 803 761 786 767 908 871 881 891 927 4.1% 2.2%
Autos 250 107 273 337 339 282 347 341 315 324 277 (14.5%) (20.2%)
Gaming 1,093 961 921 1,152 1,073 1,137 917 985 953 910 911 0.1% (0.7%)
Media 142 183 101 146 133 153 97 131 147 153 82 (46.4%) (15.4%)
Manufacturing (5) 104 106 126 131 143 148 146 137 147 147 128 (13.1%) (12.5%)
Petrochems 1,203 790 1,019 855 742 1,046 1,105 958 635 450 749 66.4% (32.2%)
Total 15,248 14,150 13,746 15,713 15,631 16,492 15,064 16,643 16,461 16,105 15,583 (3.2%) 3.4%
Total-MAS, TNB 14,653 14,186 13,804 14,732 14,727 15,472 14,524 15,414 15,428 15,147 14,930 (1.4%) 2.8%
QoQ Chg (%) 9.1% (7.2%) (2.9%) 14.3% (0.5%) 5.5% (8.7%) 10.5% (1.1%) (2.2%) (3.2%)
YoY Chg (%) 21.5% 0.3% 0.8% 12.4% 2.5% 16.6% 9.6% 5.9% 5.3% (2.4%) 3.4%
Note: (1) Comprises the banks, Bursa Malaysia and MPHB Capital; (2) Comprises Tenaga, YTL Power; (3) Comprises MAS, AirAsia, AirAsia X, MAHB, MISC, NCB; (5) Comprises the glove producers
Source: Maybank KE
Largely in line
The results of 65% of our stock coverage were within our expectation,
which is an improvement over the previous quarters (average 56% in line,
in 1Q13-4Q13). The ratio of below-to-above expectation earnings however
saw an uptick again to 1.8x from 1.1x in 4Q13, but this was due to fewer
stocks that surprised on the upside, rather than more stocks that surprised
on the downside. In fact, the total number of stocks where their earnings
disappointed was down to 20 in 1Q14, compared to 22 in 4Q13.
Sectors with clear misses were auto (MBM, Tan Chong), telco
(Telekom, Axiata, TIME dotCom), and transport (AirAsia X, MAS, NCB).
Sectors where their results were largely in line were banking,
construction, consumer, gaming, glove producers, media, gaming, oil
& gas, petrochemicals, and property (developers and REITs).
Sectors where their results were mixed were:
building materials (Lafarge was in line, but Ann Joo positively
surprised), and
plantation (KL Kepong, TSH and Ta Ann surprised on the upside; TH
Plantation and Felda Global surprised on the downside; Genting
Plantations, IOI, Sime Darby and Sarawak Oil Palms were in line).
Power (coming from TNB and YTLP) was the only sector with earnings
that were above our expectations – this is a positive development as
the preceding quarters saw no sectors that surprised in earnings
delivery.
June 02, 2014 4
Strategy
Within expectations (% of coverage) Below/Above expectations ratio
Source: Maybank KE Source: Maybank KE
Above expectations (% of coverage) Below expectations (% of coverage)
Source: Maybank KE Source: Maybank KE
Sectors’ out/under performance (vs. Maybank KE’s expectations)
CY
1Q12
CY
2Q12
CY
3Q12
CY
4Q12
CY
1Q13
CY
2Q13
CY
3Q13
CY
4Q13
CY
1Q14
Auto In line In line Below Mixed Mixed In line In line In line Below
Banking In line Above Above In line In line Mixed Mixed In line In line
Building materials In line Below Below Mixed Below In line Below Mixed Mixed
Construction / infra In line In line Mixed In line Mixed Mixed Below Mixed In line
Consumer Mixed In line Mixed In line In line In line Below In line In line
Gaming Below In line Mixed In line Mixed Mixed Mixed Mixed In line
Gloves In line In line In line In line In line In line In line In line In line
Media Below In line Below In line In line In line Above In line In line
Oil & Gas Mixed In line Mixed In line In line In line In line In line In line
Petrochemicals In line Below Below In line Above In line Below Below In line
Plantation Below Below Below In line Above Below Below Mixed Mixed
Power In line In line In line Mixed Mixed In line Mixed Mixed Above
Property (ex-REITs) In line In line Mixed Mixed In line In line In line In line In line
REITs In line In line In line In line In line In line In line In line In line
Telecommunications In line In line Mixed Below In line In line Mixed Mixed Below
Transport (shipping, aviation) In line Mixed Mixed Mixed Mixed Below Below Below Mixed
Source: Maybank KE
0.85 1.14
0.87 0.83
1.45
1.00
1.79
1.27
1.82
3.00
3.50
1.15 1.29
2.08
1.63
1.10
1.82
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
xBelow/Above ratio
17
22 2124
14
24
16 17
12
8
1114
18
13
1921
12
0
5
10
15
20
25
30
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
% Above
15
25
18 20 2124
29
21 22 23
39
16
2426
31
23 22
0
5
10
15
20
25
30
35
40
45
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
% Below
June 02, 2014 5
Strategy
Stock specific surprises
Among the big caps:
Stocks that surprised on the upside were Malaysia Airports, KL
Kepong, HLFG, YTLP and TNB.
Stocks that negatively surprised were Malaysian Airlines, AirAsia X,
Bumi Armada, Guinness, Felda Global, Axiata, Telekom and Dialog.
1Q 2014 results roundup: Outperformers and underachievers
Stock Core net profit
vs. MBB-KE’s forecasts
Comments (on current quarter results)
OUTPERFORMERS
Ann Joo 1Q14 at 67% of our full-year
Exceptionally strong sales volume at manufacturing (+70% YoY, +34% QoQ) on aggressive inventory run down in view of the attractive ASPs.
Ta Ann 1Q14 at 35% of our full year
Logs division outperformed on stronger logs export volume, while plywood division could have turned profitable – these offset weaker-than-expected plantation earnings.
Malaysia Airports 1Q14 at 31% of our full-year
Lower-than-expected taxes, while most revenue and cost indicators performed largely as expected.
Magnum 1Q14 at 30% of our full-year
Lower-than-expected price payout, but revenue fell YoY despite an equal number of draws.
KL Kepong 2QFY14 at 29% of our full-year
Strong downstream (mainly oleo-chemical) earnings, while YoY growth was also lifted by higher CPO ASP which offset lower FFB output.
TSH Resources 1Q14 at 28% of our full-year
Lower-than-expected cost of production which could be due to streamlining of operations at the estates, and manuring process which could be slightly behind schedule.
HLFG 3QFY14 at 27% of our full-year
Higher-than-expected contributions from the insurance division, which has benefited from lower reserving amid rising bond yields.
Sunway REIT 3QFY6/14 at 26% of our full-year
Stronger performance at Sunway Pyramid (positive rental reversions) and better-than-expected occupancy rates at its hotels due to aggressive marketing and promotion activities, and a pick-up in corporate bookings at the hotels.
YTL Power 3QFY14 at 26% of our full-year
Lower-than-expected taxes, while segmental results were mixed with other op-cos (except Power Seraya) performing well. Power Seraya was impacted by competitive pressures.
TNB 2QFY8/14 at
23% of our full year
Lower taxes, lower coal costs and lower IPP charges.
UNDERACHIEVERS
Malaysian Airlines System
Core loss of MYR470m
Challenging yield environment – yields contracted 9% YoY, much greater than regional peers‟ experience.
AirAsia X Core loss of MYR60m
Australian sectors continue to struggle, responsible for the losses.
NCB Holdings 1Q14 at 4% of our full-year
Softer throughput, provision of monthly port lease rental, higher repair/maintenance costs and higher depreciation with the start of operations at the new CT4; logistics remained in the red.
TH Plantations 1Q14 at 7% of our full-year
Higher-than-expected cost of production per tonne.
Source: Maybank KE
June 02, 2014 6
Strategy
1Q 2014 results roundup: Outperformers and underachievers (continued)
Stock Core net profit vs. MBB-KE’s forecasts
Comments (on current quarter results)
UNDERACHIEVERS
Tan Chong 1Q14 at 14% of our full-year
Weaker vehicle sales (-11% QoQ, -19% YoY) and depressed EBITDA margin (-2ppts QoQ to 8.1%), impacted by intense price wars in the B-segment (50% of TCM‟s total vehicle sales).
Bumi Armada 1Q14 at 14% of our full-year
OSV hit by low utilisation and scheduled dry-dock costs, T&I impacted by timing of the Lukoil operations.
MPHB Capital 1Q14 at 14% of our full-year
Higher-than-expected claims at the insurance business.
Eversendai 1Q14 at 15% of our full-year
Longer-than-expected contract execution for projects in Middle East and India given the intricate fabrication requirements, extra cost incurred for the development of its fabrication yard at UAE.
Guinness 3QFY14 at 16% of our full-year
Weak consumption with revenue down 16% YoY and 25% QoQ.
Hock Seng Lee 1Q14 at 16% of our full-year
Timing of projects, with major new jobs at their commencement phase resulting in 15% YoY and 20% QoQ decline in works recognition.
TIME dotCom 1Q14 at 16% of our full-year
Sequential contraction in revenue (which could be lumpy), tax rate was also higher than expected.
MSM Malaysia 1Q14 at 17% of our full-year
Lower domestic and export sales.
Star Publications 1Q14 at 17% of our full-year
Shortfall in print and new media segment, due to poor adex sentiment.
Felda Global Ventures
1Q14 at 17% of our full-year
Poor FFB output and losses at its North American downstream operations, hampered by logistical challenges following the extreme cold weather.
Axiata 1Q14 at 18% of our full-year
Higher-than-expected taxes (at XL in particular).
MBM Resources 1Q14 at 18% of our full-year
Weaker associates‟ contributions (start-up losses at new Perodua and Hino facilities, lower
Perodua vehicle sales), lower EBIT at auto parts manufacturing (higher utility costs, start-up losses at the alloy wheel plant), and weaker motor trading EBIT (higher A&Ps).
Telekom 1Q14 at 19% of our full-year
Higher depreciation (accelerated depreciation charge) and taxes.
Dialog 3QFY14 at 20% of our full-year
Lower contributions from associate due to higher pre-operating expenses at the Pengerang tank terminal operations, and lower EPCC works.
Source: Maybank KE
Some observations
Results surprises from Malaysia Airport, the two telco stocks (Axiata,
Telekom) and the two power stocks (TNB, YTLP) came partly or largely
from taxes, while their operational performances have been in line.
Results disappointment from the airlines came from a still challenging
environment (yield contraction for Malaysian Airlines, losses at the
Australian sectors for AirAsia X).
Results disappointment from the auto sector came partly from lower
volume sales (Tan Chong, Perodua for MBM) and margins compression
on higher A&Ps as competition heats up.
Pockets of results disappointment at the consumer sector came from
weaker consumer sentiment (volume sales were down at Guinness,
MSM) and poorer adex sentiment (Star Publications).
June 02, 2014 7
Strategy
Stock upgrades and downgrades
We have raised our call on just one stock and downgraded on seven stocks,
compared to seven upgrades and eight downgrades in the previous quarter.
Ann Joo is now a BUY due to limited downside to its profitability and
the stock is already trading at below trough P/B.
Of our seven downgrades, three stocks are now SELLs – Malaysian
Airlines, TH Plantations and NCB.
1Q 2014 results roundup: Stock upgrades and downgrades
Stock Old Call New Call Old TP New TP Reason for upgrades / downgrades
UPGRADES
Ann Joo Hold Buy 1.20 1.60 Limited downside to share price given improved profitability,
preliminary trade actions against dumping activities, and the stock is already trading at below trough P/BV of 0.7x.
DOWNGRADES
Tan Chong Buy Hold 6.80 5.25 Earnings forecasts slashed by up to 34%; current valuations (12.8x FY15 PER) fair.
Malaysian Airlines System
Hold Sell 0.22 0.175 We project a larger net loss of MYR1.2b in FY14, and expect MAS
to be loss making up till 2016. From a standalone basis, there is no investment case to own MAS.
AirAsia X Buy Hold 0.86 0.79 No near term catalyst – 2Q14 losses expected to be larger than 1Q14, being seasonally a weak quarter.
Star Publications Buy Hold 2.55 2.55 Significant share price outperformance (+17%) since our BUY call; current share price at our TP.
TH Plantations Hold Sell 1.65 1.65 Share price has significantly overshot our TP; valuations are pricey.
TSH Resources Buy Hold 3.40 3.40 Significant share price outperformance (+26%) since our BUY call; current share price at our TP.
NCB Hold Sell 3.60 2.75 Weak operating outlook; valuations are pricey after our earnings downgrade.
Source: Maybank KE
June 02, 2014 8
Strategy
Market earnings & valuations
Market earnings shaved
Our KLCI core earnings estimates are shaved by 0.7% for 2014 and 1.1% for
2015 post the 1Q14 results reporting season, after tweaking our forecasts
for a few of the banks, utility and oil & gas stocks. At the same time, our
research universe core earnings forecasts are lowered by a higher 1.8% for
2014 and 1.0% for 2015, after incorporating our major downgrade on
Malaysian Airlines‟ earnings – we now project a larger net loss of MYR1.2b
in FY14 vs MYR0.2b loss previously, and we expect Malaysian Airlines to be
loss making up to FY16 vs profitability in FY15 previously.
Growth estimates lowered
We now expect KLCI‟s core earnings to grow a slower 7.0%/8.0% in
2014/2015 vs 8.1%/8.0% previously. The revised core earnings growth of
our research universe, which makes up 75% of the market capitalisation of
the Malaysian bourse, is now 7.9%/10.4% for 2014/2015 vs 12.3%/9.5%
previously. With the exception of the auto and gaming (NFO) sectors where
we anticipate earnings to contract, and the aviation sector where we
expect the combined earnings to remain in the red, we expect all other
sectors to record earnings growth this year.
Malaysia market earnings growth & valuation as at 30 May 2014
2013A 2014E 2015E
KLCI 30 @ 1,873.4 PE (x) 18.0 16.7 15.5
Earnings Growth (%) – current 5.4% 7.0% 8.0%
Earnings Growth (%) – Mar‟ 14 est 5.1% 8.1% 8.4%
Earnings Growth (%) – Nov „13 est 5.3% 8.1% 8.0%
Maybank IB’s Research Universe PE (x) 18.7 17.4 15.7
Earnings Growth (%) – current 6.8% 7.9% 10.4%
Earnings Growth (%) – Mar‟ 14 est 4.5% 12.3% 9.5%
Earnings Growth (%) – Nov „13 est 5.0% 10.1% 9.2%
Source: Maybank KE
Research Universe: Earnings breakdown by sector – CY2014
KLCI 30: Earnings breakdown by sector – CY2014
Source: Maybank KE Source: Maybank KE
Banking & Finance
33%
Building materials
1%Consumer7%
Construction, Infra 3%
Gaming6%
Gloves1%
Oil & Gas8%
Media1%
Plantation10%
Property5%
Telcos11%
Transport3%
Utilities11%
Banking & Financials
40%Consumer
2%Gaming
6%
Oil & Gas10%
Plantations12%
Property1%
Telcos13%
Transport3%
Utilities12% Media
1%
June 02, 2014 9
Strategy
Maybank IB Research Universe earnings growth, PERs, P/B, ROE
Earnings Growth (%) PE (x) P/B (x) ROE (%)
Rec Sector CY 13A CY 14E CY 15E CY 13A CY 14E CY 15E CY 13A CY 14E CY 13A CY 14E
NT Banking & Finance 6.6 8.4 9.7 14.2 13.1 12.0 2.3 2.1 15.9 15.6
NT Non-banking Finance 9.6 3.7 6.4 23.4 22.5 21.2 2.9 2.9 12.3 13.0
NT Building materials 11.2 15.6 5.9 22.9 19.9 18.7 2.1 2.1 9.3 10.5
NT Consumer 14.2 11.2 11.0 27.3 24.6 22.1 3.8 3.6 14.0 14.7
OW Automotive 9.1 (2.7) 23.5 13.7 14.1 11.4 2.3 1.8 16.8 12.6
OW Construction, Infra 7.1 11.3 11.0 16.5 14.8 13.4 2.2 1.7 13.5 11.7
NT Gaming - NFO 9.0 (6.3) 3.3 13.6 14.5 14.1 2.4 3.1 17.8 21.3
NT Gaming - Casino (11.7) 6.1 9.7 17.1 16.1 14.7 1.7 1.6 10.0 10.0
OW Gloves 5.9 5.8 15.8 18.0 17.0 14.7 3.9 3.4 21.6 20.2
NT Media (0.4) 14.8 17.0 25.0 21.7 18.6 6.0 5.8 24.2 26.9
OW Oil & Gas 106.6 8.3 51.4 28.6 26.4 17.5 4.1 2.8 14.2 10.4
NT Petrochemicals (13.8) 15.9 1.4 17.1 14.7 14.5 2.8 2.6 16.2 17.5
NT Plantation (18.1) 12.8 4.5 22.9 20.3 19.4 2.4 2.5 10.7 12.3
NT Property - Developer 54.1 6.5 10.2 13.6 12.7 11.5 1.7 1.3 12.7 10.4
NT Property - REIT 33.0 9.2 1.3 19.0 17.4 17.2 1.3 1.1 7.0 6.4
NT Telcos 13.3 2.0 5.4 22.9 22.4 21.3 4.8 4.9 20.8 22.1
NT Transport - Aviation (128.5) 0.5 NM NM NM 38.1 1.8 1.5 (1.4) (1.2)
OW Transport - Shipping 33.2 3.4 7.8 18.0 17.5 16.2 1.3 1.1 7.3 6.4
NT Transport - Ports (8.0) 20.8 2.6 21.7 18.0 17.5 3.7 3.5 16.9 19.5
OW Utilities 30.3 5.5 4.2 17.0 16.1 15.4 2.4 2.3 13.9 14.1
Stocks under cvrg 6.8 7.9 10.4 18.7 17.4 15.7 2.5 2.3 13.6 13.4
OW = Overweight; UW = Underweight; NT = Neutral; Source: Maybank KE
Market valuations
YTD (30 May), the KLCI gained 0.3%, underperforming its regional peers:
JCI +14.5%, PSEi +12.9%, SET +9% and STI +4.1%. At 1,873, the KLCI trades
at 16.7x/15.5x PERs for 2014/2015 and 16.1x on 12M forward PER. The 12M
forward PER of 16.1x is at +0.7SD of its long-term mean (since 2001) of
15.1x. The KLCI has neither re-rated nor de-rated much in the last 5M,
trading within the 15.8x-16.3x 12M forward PER range (2013: 15.3-16.6x).
Based on projected earnings growth of 8%, PEG is about 2x, above that of
its regional peers. On a trailing P/BV basis, the KLCI is trading at 2.3x,
marginally above its 5-year mean (since 2009) of 2.25x. Market risk
premium meanwhile has been stable at 215 bps presently.
KLCI‘s forward PER: 16.2x 1Y fwd, 16.7x/15.5x 2014/15 Market risk premium (above 10Y MGS yields)
Source: Maybank KE, Bloomberg Source: Maybank KE, Bloomberg
8
10
12
14
16
18
20
22
01 02 03 04 05 06 07 08 09 10 11 12 13 14
(x)1-Yr forward PER Mean +1 std -1 std
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
0
200
400
600
800
1000
1200
1400
1600
1800
2000
06 07 08 09 10 11 12 13 14
KLCI (LHS) Market risk premium (RHS)
June 02, 2014 10
Strategy
KLCI‘s trailing P/B: 2.31x end-May 2014 (5Y mean: 2.25x) KLCI’s net dividend yield: 3.1% end-May 2014
Source: Bloomberg, Maybank KE (chart) Source: Bloomberg, Maybank KE (chart)
Regional performance YTD (30 May), local currency Regional performance YTD (30 May), USD
Source: Bloomberg, Maybank KE (chart) Source: Bloomberg, Maybank KE (chart)
Regional valuations: PER vs growth Regional valuations: P/B vs ROE
Source: Bloomberg, Maybank KE (chart) Source: Bloomberg, Maybank KE (chart)
1.0
1.4
1.8
2.2
2.6
01 02 03 04 05 06 07 08 09 10 11 12 13 14
(x)KLCI P/B Mean
+1 SD -1 SD
0.0
2.0
4.0
6.0
8.0
01 02 03 04 05 06 07 08 09 10 11 12 13 14
(%)
(10.2)
(3.6)
(1.0)
(0.8)
0.3
3.5
4.1
5.4
9.0
11.4
12.9
14.4
14.5
-20 -10 0 10 20
Japan
China
Hong Kong
Korea
Malaysia
MSCI Asia ex Jap
Singapore
Taiwan
Thailand
Vietnam
Philippines
India
Indonesia
(7.2)
(6.6)
(1.0)
2.3
2.4
4.8
4.9
8.7
11.1
14.3
19.4
19.7
-10 -5 0 5 10 15 20 25 30
Japan
China
Hong Kong
Korea
Malaysia
Taiwan
Singapore
Thailand
Vietnam
Philippines
Indonesia
India
Malaysia
Singapore
Thailand Indonesia
Philippines
Vietnam
China
India
5
10
15
20
5% 10% 15% 20%
2014 PER (x)
2015 earnings gwth (%)
Malaysia
Singapore
Indonesia Philippines
Vietnam
China
India
0
1
2
3
0% 5% 10% 15% 20%
2014 P/B (x)
2014 ROE (%)
June 02, 2014 11
Strategy
Appendix 1
Dividend stocks (Maybank KE’s coverage: Stocks with more than 4% net yield)
Stocks Rec Shr px at
30-May-14
Market Cap
(MYR m) TP (RM) 2014 Net
Yld (%)
Upside to
TP (%)
Potential total
returns (%)
Quill Capita Hold 1.14 444.7 1.16 6.2 1.8 8.0
Maxis Hold 6.57 49,312.2 7.10 6.1 8.1 14.2
Berjaya Sports Toto Hold 3.82 5,149.9 3.95 6.1 3.4 9.5
Padini Holdings Buy 1.93 1,269.8 2.35 5.8 21.8 27.6
CMMT Buy 1.50 2,664.1 1.74 5.8 16.0 21.8
Star Hold 2.65 1,955.6 2.55 5.7 (3.8) 1.9
AEON Co Hold 3.88 5,447.5 3.43 5.6 (11.6) (6.0)
Media Prima Hold 2.58 2,852.0 2.52 5.5 (2.3) 3.1
Maybank NR 9.88 87,736.9 NR 5.4 NA NA
KLCC Prop Hold 6.27 11,319.4 6.25 5.3 (0.3) 5.0
Sunway REIT Hold 1.39 4,070.9 1.24 5.3 (10.8) (5.5)
MCIL Hold 0.96 1,619.7 1.01 5.3 5.2 10.5
Axis REIT Hold 3.37 1,554.4 2.71 5.2 (19.6) (14.4)
Magnum Hold 3.09 4,410.4 3.04 5.2 (1.6) 3.6
IGB REIT Hold 1.20 4,122.3 1.24 5.2 3.3 8.5
Pavilion REIT Buy 1.38 4,156.3 1.53 5.2 10.9 16.0
Carlsberg Brewery Hold 12.34 3,796.0 12.40 4.9 0.5 5.4
Guinness Hold 13.40 4,048.1 13.20 4.9 (1.5) 3.4
BAT (M) Sell 62.90 17,959.8 57.00 4.7 (9.4) (4.7)
Bursa Malaysia Hold 7.68 4,092.4 8.00 4.6 4.2 8.7
Mah Sing Hold 2.25 3,213.3 2.44 4.5 8.4 12.9
DiGi.Com Hold 5.42 42,140.5 5.00 4.4 (7.7) (3.3)
Glomac Hold 1.08 785.0 1.20 4.3 11.1 15.4
Lafarge Buy 9.88 8,395.0 9.90 4.3 0.2 4.5
SP Setia Hold 2.92 7,350.9 3.36 4.2 15.1 19.3
MSM Malaysia Holdings Hold 5.13 3,606.3 5.00 4.2 (2.5) 1.7
Telekom Hold 6.18 22,108.3 5.90 4.0 (4.5) (0.6)
Westports Buy 2.68 9,138.8 2.70 4.0 0.7 4.7
Source: Maybank KE
June 02, 2014 12
Strategy
Appendix 2
Foreign shareholding of selected stocks under coverage
Foreign shareholding Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Latest As at (month, year)
Malayan Banking 10.9 14.0 13.5 19.6 21.4 21.2 4-Apr-14
CIMB Group * 42.4 42.6 38.1 40.4 33.8 34.3 14-Mar-14
Public Bank 26.5 26.5 26.1 31.2 30.7 30.7 31-Mar-14
Axiata Group 6.7 12.2 28.0 28.0 23.0 22.0 31-Mar-14
Sime Darby 14.2 15.3 17.3 19.5 17.4 14.9 30-Apr-14
Petronas Chemicals NA NA 9.0 9.0 12.0 11.2 31-Mar-14
Maxis * 8.6 8.3 7.3 7.5 7.5 6.8 31-Mar-14
Tenaga Nasional 9.4 10.5 10.8 15.0 27.8 27.3 31-Mar-14
Petronas Gas 2.4 2.0 3.0 3.0 3.0 3.0 31-Dec-13
Genting Berhad 36.0 42.0 42.0 45.0 45.0 45.0 12-May-14
Digi.com 6.8 9.0 12.9 12.6 12.5 14.0 31-Mar-14
IOI Corporation 22.0 19.0 17.0 17.6 18.0 17.1 31-Mar-14
Hong Leong Bank NA NA 7.7 8.1 8.1 8.0 31-Mar-14
SapuraKencana * NA NA NA 22.0 32.0 29.0 31-Mar-14
KL Kepong 16.4 19.3 18.5 15.0 12.7 13.0 30-Apr-14
Genting Malaysia 31.0 35.0 37.0 38.0 39.0 39.0 12-May-14
RHB Capital 5.6 12.4 11.6 8.9 8.3 8.4 31-Mar-14
AMMB Holdings 29.6 30.0 26.2 29.0 32.0 31.0 31-Mar-14
MISC Bhd 4.3 4.9 3.9 5.5 5.9 7.2 31-Mar-14
Telekom Malaysia 9.1 11.0 19.9 16.2 13.0 18.0 31-Mar-14
British American Tobacco 22.0 25.3 26.8 28.4 28.0 29.9 30-Apr-14
YTL Corporation 22.0 23.0 23.0 27.0 28.0 28.0 31-Mar-14
UMW Holdings 5.9 11.7 13.5 25.8 16.9 16.2 30-Apr-14
UEM Sunrise NA NA 14.6 17.3 14.9 14.7 30-Apr-14
Bumi Armada NA NA NA 18.0 12.3 13.3 30-Apr-14
Gamuda 35.0 36.0 33.0 37.0 40.0 38.0 28-Feb-14
YTL Power Int'l 5.0 5.0 9.0 8.0 9.0 9.0 31-Mar-14
S P Setia 24.0 24.0 17.6 1.7 8.8 8.3 25-Apr-14
AirAsia NA 51.4 51.0 48.3 50.2 49.4 30-Apr-14
IJM Corp NA NA 41.3 36.6 40.5 43.2 30-Apr-14
MAHB NA NA 9.5 11.3 15.0 13.2 31-Mar-14
Dialog Group NA NA NA 16.0 16.0 16.0 31-Dec-13
Genting Plantations NA NA 9.8 9.0 8.0 7.0 31-Mar-14
Malaysia Airline System NA NA 4.0 4.5 2.0 2.0 31-Mar-14
Sunway Berhad * NA NA 21.8 20.5 14.2 14.7 30-Apr-14
MMHE NA 14.1 5.4 4.6 2.0 2.0 31-Mar-14
Mah Sing 17.7 16.7 20.9 24.8 23.7 19.4 5-May-14
WCT 9.0 14.0 14.0 10.0 13.0 9.9 15-May-14
KNM 16.0 26.0 16.0 16.0 20.0 20.0 30-Sep-13
Glomac NA NA NA NA 8.4 6.2 30-Apr-14
Oldtown * NA NA NA NA 35.7 36.0 31-Mar-14
Market 20.4 21.9 22.7 23.9 23.2 23.1 30-Apr-13
* CIMB: Inclusive of BTMU’s 5.0%;
* Maxis: Excludes Saudi Telco’s 17.5% effective stake;
* Sunway Berhad: Includes GIC’s 8.7%;
* SapuraKencana: Includes Seadrill’s 12%;
* OldTown: 4% at Feb 2012, 37% at Feb 2013
Note: Highlighted/shaded are stocks which have foreign shareholding close to, or above 20% (based on latest data available)
Sources: Companies, compiled by Maybank KE
June 02, 2014 13
Strategy Maybank KE Equity Research Stock Universe
Ticker
Company FYE Price Market TP Reco
m
Core Net Profit EPS CAGR
CAGR
PER PER PER ROE Div
Yld
PBV Price
chg 30-May Cap CY13A CY14F CY15F CY13AAA
CY14F CY14F 13-15 CY13A CY14F CY15F CY14A
CY14F CY13A
YTD MYR m MYR MYR m MYR sen (%) (x) (%) (%) (x) (%)
Autos
BAUTO MK Berjaya Auto * 4 2.03 1,633 2.38 Buy 87.1 131 162 11.1 16.3 20.1 34.8 18.3 12.4 10.1 36.5 2.4 6.5 23.0
MBM MK MBM Resources * 12 3.14 1,227 3.60 Buy 137.7 108 157 35.2 27.7 40.1 6.7 8.9 11.3 7.8 7.1 2.2 0.9 (2.2)
TCM MK Tan Chong * 12 5.40 3,525 5.25 Hold 292.6 191 286 44.8 29.3 43.8 -1.1 12.1 18.4 12.3 6.8 2.2 1.3 (12.8)
UMWH MK UMW Hldgs * 12 10.80 12,618 12.44 Buy 867.9 917 1,060 74.3 78.5 90.7 10.5 14.5 13.8 11.9 13.6 3.6 2.0 (10.4)
Banking
MAY MK Maybank 12 9.88 87,737 NR NR 6,552 6,938 7,562 75.8 76.7 80.3 2.9 13.0 12.9 12.3 13.2 5.4 1.9 (0.6)
AMM MK AMMB Holdings 3 7.34 22,124 8.50 Buy 1,742 1,894 2,050 58.0 62.9 68.0 8.3 12.7 11.7 10.8 13.5 3.5 1.7 1.4
BIMB MK BIMB Holdings * 12 3.94 5,884 4.40 Hold 279 509 563 25.8 34.1 37.7 20.8 15.2 11.6 10.5 15.7 2.1 2.1 (13.2)
CIMB MK CIMB 12 7.34 61,190 8.00 Hold 4,178 4,551 5,091 55.2 55.3 61.9 5.9 13.3 13.3 11.9 12.5 3.0 1.9 (3.7)
HLBK MK Hong Leong Bk 6 13.88 24,967 16.20 Buy 1,964 2,171 2,372 110.5 120.7 131.9 9.3 12.6 11.5 10.5 14.4 2.8 1.8 (3.6)
HLFG MK HL Financial 6 15.40 16,213 17.30 Buy 1,506 1,593 1,728 144.8 153.2 166.2 7.1 10.6 10.1 9.3 13.5 2.5 1.5 (0.5)
PBK MK Public Bank 12 21.60 75,646 18.00 Sell 4,065 4,319 4,705 116.1 123.3 134.3 7.6 18.6 17.5 16.1 18.7 2.5 3.7 11.3
RHBC MK RHB Capital 12 8.40 21,394 8.70 Hold 1,831 2,003 2,242 72.9 78.7 88.0 9.9 11.5 10.7 9.5 10.7 2.2 1.3 6.3
Building Materials
AJR MK Ann Joo - 12 1.10 551 1.60 Buy 23.2 62 78 4.4 11.9 14.8 83.4 25.0 9.2 7.4 5.6 - 0.5 4.8
LMC MK Lafarge * 12 9.88 8,395 9.90 Buy 366.6 389 400 43.1 45.7 47.0 4.4 22.9 21.6 21.0 11.9 4.3 2.6 15.3
Construction / Infra
EVSD MK Eversendai * 12 1.00 774 0.98 Hold 31.0 76 83 4.0 9.8 10.7 63.6 25.0 10.2 9.3 8.4 2.4 0.4 (3.8)
GAM MK Gamuda * 7 4.40 10,163 4.45 Hold 644.4 687 742 27.7 31.8 34.4 11.6 15.9 13.8 12.8 13.5 3.0 2.0 (8.3)
HSL MK HSL * 12 1.99 1,094 2.25 Buy 85.2 84 98 15.3 15.2 17.9 8.2 13.0 13.1 11.1 13.9 1.6 2.0 6.4
IJM MK IJM Corp * 3 6.69 9,679 7.20 Buy 511.5 579 643 36.1 40.6 45.1 11.8 18.5 16.5 14.8 8.2 2.4 1.5 13.8
LTK MK Litrak * 3 3.86 1,988 4.45 Buy 133.1 142 163 26.1 27.8 31.8 10.5 14.8 13.9 12.1 26.8 4.4 4.1 (11.7)
WCT MK WCT * 12 2.16 2,342 2.55 Buy 200.5 193 202 18.7 17.7 18.4 -0.8 11.6 12.2 11.7 8.3 3.1 1.1 5.4
CMS MK CMS * 12 10.00 3,453 10.50 Buy 175.4 208 252 51.6 61.3 74.2 19.9 19.4 16.3 13.5 11.6 1.8 2.1 45.6
KICB MK Kimlun Corp * 12 1.64 493 1.90 Buy 36.4 55 62 12.1 18.2 20.6 30.5 13.6 9.0 8.0 16.1 3.0 1.6 (2.1)
Consumer
AEON MK AEON Co * 12 3.88 5,448 3.43 Hold 231.0 254 278 65.8 72.3 79.1 9.6 5.9 5.4 4.9 13.9 5.6 0.8 10.9
ROTH MK BAT (M) - 12 62.90 17,960 57.00 Sell 823.4 893 949 288.4 312.9 332.4 7.4 21.8 20.1 18.9 161.6 4.7 35.3 (1.9)
CAB MK Carlsberg 12 12.34 3,796 12.40 Hold 184 201 205 60.2 65.6 67.0 5.5 20.5 18.8 18.4 67.4 4.9 13.7 1.3
GUIN MK Guinness 6 13.40 4,048 13.20 Hold 207 199 203 68.7 65.8 67.1 -1.2 19.5 20.4 20.0 55.3 4.9 5.6 (16.3)
RJR MK JTI 12 8.18 2,139 8.20 Hold 122 128 135 46.5 49.0 51.6 5.3 17.6 16.7 15.9 29.9 2.7 5.0 26.2
PAD MK Padini Holdings # 6 1.93 1,270 2.35 Buy 92 105 115 14.0 15.9 17.5 11.8 13.8 12.1 11.1 25.3 5.8 3.3 6.6
NESZ MK Nestle * 12 67.26 15,772 64.00 Hold 562 610 703 239.5 260.3 299.9 11.9 28.1 25.8 22.4 72.1 3.7 19.3 (1.1)
QLG MK QL Resources * 3 3.27 4,081 3.15 Hold 153 178 203 12.3 14.3 16.2 14.7 26.5 22.8 20.2 12.9 1.5 3.4 15.1
MSM MK MSM Malaysia
Holdings
* 12 5.13 3,606 5.00 Hold 253 228 277 36.0 32.4 39.3 4.5 14.3 15.8 13.1 11.8 4.2 1.9 2.6
OTB MK Oldtown * 3 2.08 942 2.67 Buy 56 65 74 12.3 14.4 16.3 14.9 16.9 14.5 12.8 17.3 3.8 2.7 0.0
IHH MK IHH * 12 4.11 33,538 3.80 Hold 649 825 963 8.0 10.2 11.8 21.4 51.4 40.3 34.8 4.4 0.6 1.8 6.5
* Shariah compliant (under Securities Commission’s new Shariah compliant list) # No longer Shariah compliant; Source: Maybank KE
June 02, 2014 14
Strategy Maybank KE Equity Research Stock Universe (continued)
Ticker
Company FYE Price Market TP Reco
m
Core Net Profit EPS CAGR
CAGR
PER PER PER ROE Div
Yld
PBV Price
chg 30-May Cap CY13A CY14F CY15F CY13A
CY14F CY15F 13-15 CY13A CY14F CY15F CY14A
CY14F CY13A
YTD MYR m MYR MYR m MYR sen (%) (x) (%) (%) (x) (%)
Gaming
BST MK BToto 4 3.82 5,150 3.95 Hold 372 378 391 27.8 28.0 28.9 2.0 13.7 13.6 13.2 56.0 6.1 8.5 (3.5)
MAG MK Magnum 12 3.09 4,410 3.04 Hold 329 279 287 23.1 19.5 20.1 -6.7 13.4 15.8 15.4 11.0 5.2 1.8 (2.2)
GENT MK Genting Bhd 12 9.73 36,165 10.22 Hold 1,758 2,066 2,314 47.6 55.9 62.6 14.7 20.4 17.4 15.5 8.6 0.6 1.4 (5.2)
GENM MK Genting Msia 12 4.07 23,085 4.74 Buy 1,714 1,619 1,727 30.2 28.5 30.4 0.3 13.5 14.3 13.4 10.3 1.6 1.5 (7.1)
Manufacturin
g
HART MK Hartalega Hldgs * 3 6.15 4,596 6.70 Hold 234 234 285 31.6 29.6 35.3 5.7 19.5 20.8 17.4 20.5 2.2 5.1 (14.9)
KRI MK Kossan Rubber * 12 4.01 2,564 5.00 Buy 141 169 191 22.0 26.4 29.8 16.4 18.2 15.2 13.5 21.1 3.0 3.7 (7.2)
TOPG MK Top Glove * 8 4.84 3,004 6.00 Buy 191 196 218 30.9 31.6 35.1 6.6 15.7 15.3 13.8 13.5 3.3 2.2 (14.0)
Media
ASTRO MK Astro Malaysia 1 3.40 17,674 3.37 Hold 446 564 725 8.6 10.8 13.9 27.7 39.8 31.5 24.4 75.6 3.2 28.7 13.3
MCIL MK MCIL - 3 0.96 1,620 1.01 Hold 161 169 178 9.9 10.1 10.6 3.4 9.7 9.5 9.1 21.4 5.3 2.3 (1.5)
MPR MK Media Prima 12 2.58 2,852 2.52 Hold 214 224 230 19.2 19.3 19.9 1.8 13.4 13.4 13.0 13.0 5.5 1.7 (1.5)
STAR MK Star * 12 2.65 1,956 2.55 Hold 145 152 163 19.6 20.5 22.0 5.9 13.5 12.9 12.0 12.7 5.7 1.7 18.8
Oil & Gas
AMRB MK Alam Maritim * 12 1.53 1,226 1.90 Buy 80 98 99 10.2 12.2 12.3 9.8 15.0 12.5 12.4 13.8 0.2 2.0 (2.5)
DLG MK Dialog * 6 3.66 8,902 3.90 Buy 209 248 286 8.8 10.4 12.0 16.9 41.8 35.4 30.6 15.6 1.1 6.3 2.2
PETR MK Perdana Petro * 12 1.78 1,314 2.55 Buy 61 100 122 8.5 13.7 16.8 40.6 20.9 13.0 10.6 13.5 - 2.8 11.9
WSC MK Wah Seong * 12 1.91 1,479 1.50 Hold 42 83 91 5.5 10.8 11.8 46.5 34.7 17.7 16.2 7.9 3.9 1.2 16.5
MMHE MK MMHE * 12 3.80 6,080 4.20 Buy 237 175 331 14.8 10.9 20.7 18.3 25.7 34.9 18.4 6.5 1.3 2.4 8.6
BAB MK Bumi Armada - 12 3.52 10,323 4.55 Buy 449 41 444 15.3 14.3 15.2 -0.3 23.0 24.6 23.2 0.9 - 2.4 (12.7)
YNS MK Yinson - 1 5.18 2,675 6.15 Buy 63 109 147 24.5 42.1 57.1 52.6 21.1 12.3 9.1 17.6 0.4 2.6 20.5
BARAKAH MK Barakah * 12 1.61 1,009 1.90 Buy 49 73 118 4.8 8.4 13.6 68.3 33.5 19.2 11.8 29.5 - 5.8 5.2
PPT MK Perisal * 12 1.61 1,920 1.76 Buy 62 70 151 6.3 6.0 12.6 41.4 25.6 26.8 12.8 7.0 - 1.8 1.3
SAKP MK SapuraKencana * 1 4.17 24,987 5.30 Buy 983 1,310 1,655 17.4 22.0 27.6 25.9 23.9 19.0 15.1 11.5 - 2.5 (14.9)
UMWOG MK UMW O&G - 12 4.02 8,691 5.15 Buy 161 288 485 7.5 13.3 22.4 72.8 53.6 30.2 17.9 9.2 - 3.1 0.2
Plantation
GENP MK Genting Plant * 12 11.24 8,571 11.20 Hold 305 419 474 40.2 55.2 62.4 24.6 28.0 20.4 18.0 11.2 1.0 2.5 1.8
IOI MK IOI Corp * 6 4.93 31,322 3.95 Sell 1,601 1,395 1,270 24.9 21.7 19.8 -10.9 19.8 22.7 25.0 21.2 2.0 3.4 4.7
KLK MK KL Kepong * 9 23.92 25,474 24.00 Hold 954 1,134 1,121 89.4 106.2 105.0 8.4 26.8 22.5 22.8 14.0 2.7 3.5 (3.9)
SIME MK Sime Darby * 6 9.55 57,912 10.30 Buy 3,225 3,251 3,445 53.7 54.1 57.4 3.4 17.8 17.7 16.7 11.1 3.1 2.1 0.3
FGV MK Felda Global * 12 4.24 15,468 4.48 Hold 90 691 788 2.5 18.9 21.6 193.9 169.6 22.4 19.6 10.0 1.8 2.4 (5.6)
SOP MK SOP * 12 7.02 3,079 6.90 Buy 97 153 201 22.3 35.0 46.0 43.6 31.5 20.1 15.3 11.2 0.8 2.5 7.8
TSH MK TSH Resources * 12 4.00 3,588 3.40 Hold 112 145 164 13.0 16.0 18.2 18.3 30.8 25.0 22.0 12.4 1.2 3.3 32.9
THP MK TH Plantations * 12 2.10 1,853 1.65 Sell 63 75 97 7.2 8.6 11.0 23.6 29.2 24.4 19.1 6.1 2.0 1.6 11.7
TAH MK Ta Ann * 12 4.29 1,590 4.75 Buy 61 82 117 16.3 22.0 31.7 39.5 26.3 19.5 13.5 7.6 2.2 1.7 2.9
* Shariah compliant (under Securities Commission’s new Shariah compliant list) # No longer Shariah compliant; Source: Maybank KE
June 02, 2014 15
Strategy Maybank KE Equity Research Stock Universe (continued)
Ticker
Company FYE Price Market TP Reco
m
Core Net Profit EPS CAGR
CAGR
PER PER PER ROE Div
Yld
PBV Price
chg 30-May Cap CY13A CY14F CY15F CY13
A
CY14F CY15F 13-15 CY13A CY14F CY15F CY14
A
CY14F CY13
A
YTD MYR m MYR MYR m MYR sen (%) (x) (%) (%) (x) (%)
Non-Banking Finance
BURSA MK Bursa Malaysia 12 7.68 4,092 8.00 Hold 173 187 200 32.5 35.2 37.5 7.4 23.6 21.8 20.5 23.1 4.6 5.1 (6.7)
MPHB MK MPHB Capital 12 2.05 1,466 2.42 Buy 65 59 63 12.4 6.8 8.3 -18.2 16.5 30.1 24.7 5.2 - 1.4 22.0
Petrochemicals
PCHEM MK Petronas Chem * 12 6.74 53,920 6.85 Hold 3,156 3,659 3,712 39.5 45.7 46.4 8.4 17.1 14.7 14.5 15.8 3.4 2.3 (2.6)
Property
AXRB MK Axis REIT * 12 3.37 1,554 2.71 Hold 89 91 94 19.4 19.8 20.6 3.0 17.4 17.0 16.4 9.1 5.8 1.6 15.0
KLCC MK KLCC Prop * 12 6.27 11,319 6.25 Hold 626 652 675 34.7 36.1 37.4 3.8 18.1 17.4 16.8 6.0 5.3 0.8 7.2
MSGB MK Mah Sing * 12 2.25 3,213 2.54 Hold 281 349 428 17.3 25.2 30.8 33.4 13.0 8.9 7.3 16.2 4.5 1.7 (0.4)
QUIL MK Quill Capita 12 1.14 445 1.16 Hold 35 36 38 8.9 9.3 9.7 4.4 12.8 12.3 11.8 6.8 6.9 0.8 (3.4)
SPSB MK SP Setia * 10 2.92 7,351 3.36 Hold 428 503 626 18.1 20.5 25.4 18.5 16.1 14.3 11.5 8.7 4.2 1.2 (3.0)
ULHB MK UEM Sunrise * 12 2.05 9,302 2.12 Hold 579 579 544 13.0 13.0 12.2 -3.1 15.8 15.8 16.8 9.0 2.0 1.7 (13.1)
SWB MK Sunway Berhad * 12 3.11 5,361 2.79 Hold 483 501 516 30.6 29.0 30.0 -1.0 10.2 10.7 10.4 8.7 1.9 0.9 14.3
ECW MK Ecoworld - 10 5.00 1,267 6.40 Buy 22 18 76 3.7 2.3 3.9 2.0 134.5 214.3 129.3 0.7 - 7.9 31.6
GLMC MK Glomac * 4 1.08 785 1.20 Hold 149 112 139 13.5 15.4 19.1 18.9 8.0 7.0 5.7 12.2 4.3 0.9 (3.6)
CMMT MK CMMT 12 1.50 2,664 1.74 Buy 149 230 165 8.4 8.5 9.1 4.1 17.9 17.6 16.5 7.1 6.4 1.3 7.1
SREIT MK Sunway REIT 6 1.39 4,071 1.24 Hold 219 230 222 7.5 7.9 9.1 10.2 18.5 17.7 15.3 6.4 5.9 1.1 12.1
IGBREIT MK IGB REIT 12 1.20 4,122 1.24 Hold 207 217 222 6.1 6.3 6.5 3.2 19.7 19.0 18.5 6.0 5.2 1.1 0.8
PREIT MK Pavilion REIT 12 1.38 4,156 1.50 Buy 210 227 230 7.0 7.5 7.6 4.2 19.7 18.4 18.2 6.8 5.7 1.3 7.8
Telecommunications
DIGI MK DiGi.Com * 12 5.42 42,141 5.00 Hold 1,706 1,860 1,908 21.9 23.9 24.5 5.8 24.7 22.7 22.1 281.3 4.4 60.2 9.3
T MK Telekom * 12 6.18 22,108 5.90 Hold 1,039 979 1,055 29.0 27.4 29.5 0.9 21.3 22.6 20.9 13.5 4.0 3.1 11.4
AXIATA MK Axiata * 12 6.93 59,330 7.00 Hold 2,900 2,809 3,028 34.0 32.9 35.4 2.0 20.4 21.1 19.6 13.8 3.6 3.0 0.4
MAXIS MK Maxis * 12 6.57 49,312 7.10 Hold 1,765 2,054 2,121 23.5 27.4 28.3 9.7 28.0 24.0 23.2 40.6 6.1 8.2 (9.6)
TDC MK Time dotCom * 12 4.35 2,493 4.60 Hold 260 120 132 45.4 21.0 23.0 -28.8 9.6 20.7 18.9 5.7 1.5 1.2 22.5
Transport
AIRA MK AirAsia - 12 2.50 6,954 2.65 Buy 418 705 710 15.0 25.3 25.5 30.4 16.7 9.9 9.8 12.6 2.0 1.4 13.6
AAX MK AirAsia X * 12 0.75 1,778 0.79 Hold (22) -67 169 -0.9 -2.8 7.1 n.a. n.a. n.a. 10.6 (4.6) - 1.4 (24.6)
MAHB MK MAHB 12 7.56 10,389 7.03 Sell 362 391 461 29.4 28.8 34.0 7.5 25.7 26.3 22.2 6.7 2.1 2.0 (16.0)
MAS MK MAS * 12 0.18 3,008 0.18 Sell (935) -1,207 -759 -6.0 -7.0 -5.0 n.a. n.a. n.a. n.a. (42.4) - 0.7 (41.9)
WPRTS MK Westports * 12 2.68 9,139 2.70 Buy 435 484 484 12.8 14.2 14.2 5.3 20.9 18.9 18.9 28.0 4.0 5.7 5.9
NCB MK NCB Holdings * 12 3.02 1,420 2.75 Sell 52 105 119 11.0 22.3 25.3 51.7 27.5 13.5 11.9 7.1 3.0 1.0 (13.7)
MISC MK MISC * 12 6.18 27,586 7.20 Buy 1,529 1,581 1,705 34.2 35.4 38.2 5.7 18.1 17.5 16.2 5.9 - 1.2 8.4
Utilities
TNB MK Tenaga * 8 12.06 68,062 14.0
0
Buy 4,409 5,251 5,515 78.7 93.0 97.7 11.4 15.3 13.0 12.3 13.2 2.4 1.9 6.0
PTG MK Petronas Gas * 12 24.50 48,479 23.5
0
Hold 2,141 1,668 1,729 108.2 84.3 87.4 -10.1 22.6 29.1 28.0 15.5 2.4 4.7 0.9
GMB MK Gas Msia * 12 3.61 4,635 3.80 Hold 171 182 192 13.4 14.2 14.9 5.4 26.9 25.4 24.2 18.1 3.9 4.6 (6.7)
YTLP MK YTL Power - 6 1.51 10,257 1.66 Hold 1,028 1,074 1,080 14.4 15.1 15.2 2.7 10.5 10.0 9.9 9.3 0.6 1.0 (16.1)
* Shariah compliant (under Securities Commission’s new Shariah compliant list) # No longer Shariah compliant; Source: Maybank KE
June 02, 2014 16
Strategy
Research Offices
REGIONAL
WONG Chew Hann, CA
Regional Head of Institutional Research
(603) 2297 8686 [email protected]
ONG Seng Yeow
Regional Head of Retail Research
(65) 6432 1453 [email protected]
Alexander GARTHOFF
Institutional Product Manager
(852) 2268 0638 [email protected]
ECONOMICS
Suhaimi ILIAS
Chief Economist
Singapore | Malaysia
(603) 2297 8682 [email protected]
Luz LORENZO
Philippines
(63) 2 849 8836 [email protected]
Tim LEELAHAPHAN
Thailand (662) 658 1420 [email protected]
JUNIMAN
Chief Economist, BII
Indonesia
(62) 21 29228888 ext 29682 [email protected]
Josua PARDEDE
Economist / Industry Analyst, BII
Indonesia
(62) 21 29228888 ext 29695 [email protected]
MALAYSIA
WONG Chew Hann, CA Head of Research (603) 2297 8686 [email protected] • Strategy • Construction & Infrastructure
Desmond CH’NG, ACA (603) 2297 8680 [email protected] • Banking & Finance
LIAW Thong Jung (603) 2297 8688 [email protected] • Oil & Gas - Regional • Shipping
ONG Chee Ting, CA (603) 2297 8678 [email protected] • Plantations - Regional
Mohshin AZIZ
(603) 2297 8692 [email protected] • Aviation - Regional • Petrochem
YIN Shao Yang, CPA (603) 2297 8916 [email protected] • Gaming – Regional • Media
TAN Chi Wei, CFA (603) 2297 8690 [email protected] • Power • Telcos
WONG Wei Sum, CFA (603) 2297 8679 [email protected] • Property & REITs
LEE Yen Ling (603) 2297 8691 [email protected] • Building Materials • Glove Producers
CHAI Li Shin (603) 2297 8684 [email protected] • Plantation • Construction & Infrastructure
KANG Chun Ee (603) 2297 8675 [email protected] • Consumer
Ivan YAP (603) 2297 8612 [email protected] • Automotive
LEE Cheng Hooi Regional Chartist (603) 2297 8694 [email protected]
Tee Sze Chiah Head of Retail Research (603) 2297 6858 [email protected]
HONG KONG / CHINA
Howard WONG Head of Research (852) 2268 0648 [email protected] • Oil & Gas - Regional
Alexander LATZER (852) 2268 0647 [email protected] • Metals & Mining - Regional
Jacqueline KO, CFA (852) 2268 0633 [email protected] • Consumer
Karen KWAN (852) 2268 0640 [email protected] • Property & REITs
Osbert TANG, CFA (852) 21 5096 8370 [email protected] • Transport & Industrials
Philip TSE, CFA FRM (852) 2268 0643 [email protected] • Property & REITs
Ricky WK NG, CFA
(852) 2268 0689 [email protected] • Utilities & Renewable Energy
Simon QIAN, CFA (852) 2268 0634 [email protected] • Telecom & Internet
Steven ST CHAN (852) 2268 0645 [email protected] • Banking & Financials
Warren LAU (852) 2268 0644 [email protected] • Technology – Regional
William YANG (852) 2268 0675 [email protected] • Technology – Regional
INDIA
Jigar SHAH Head of Research
(91) 22 6623 2601
• Oil & Gas • Automobile • Cement
Anubhav GUPTA
(91) 22 6623 2605
• Metal & Mining • Capital Goods • Property
Urmil SHAH
(91) 22 6623 2606 [email protected]
• Technology • Media
SINGAPORE
NG Wee Siang Head of Research (65) 6432 1467 [email protected] • Banking & Finance
Gregory YAP (65) 6432 1450 [email protected] • SMID Caps – Regional • Technology & Manufacturing • Telcos
Wilson LIEW (65) 6432 1454 [email protected] • Property Developers
ONG Kian Lin (65) 6432 1470 [email protected] • S-REITs
James KOH (65) 6432 1431 [email protected] • Consumer - Regional
YEAK Chee Keong, CFA (65) 6432 1460 [email protected]
• Offshore & Marine
Derrick HENG (65) 6432 1446 [email protected] • Transport (Land, Shipping & Aviation)
WEI Bin (65) 6432 1455 [email protected] • Commodity • Logistics • S-chips
John CHEONG (65) 6432 1461 [email protected] • Small & Mid Caps • Healthcare
INDONESIA
Wilianto IE Head of Research (62) 21 2557 1125 [email protected] • Strategy
Rahmi MARINA (62) 21 2557 1128 [email protected] • Banking & Finance
Aurellia SETIABUDI (62) 21 2953 0785 [email protected] • Property
Anthony YUNUS (62) 21 2557 1136 [email protected] • Consumer • Poultry
Isnaputra ISKANDAR (62) 21 2557 1129 [email protected] • Metals & Mining • Cement
Pandu ANUGRAH (62) 21 2557 1137 [email protected] • Infrastructure • Construction • Transport
Janni ASMAN (62) 21 2953 0784 [email protected] • Cigarette • Healthcare • Retail
PHILIPPINES
Luz LORENZO Head of Research (63) 2 849 8836 [email protected] • Strategy
Laura DY-LIACCO (63) 2 849 8840 [email protected] • Utilities • Conglomerates • Telcos
Lovell SARREAL (63) 2 849 8841 [email protected] • Consumer • Media • Cement
Rommel RODRIGO (63) 2 849 8839 [email protected] • Conglomerates • Property • Gaming • Ports/ Logistics
Katherine TAN (63) 2 849 8843 [email protected] • Banks • Construction
Ramon ADVIENTO (63) 2 849 8845 [email protected] • Mining
THAILAND
Maria LAPIZ Head of Institutional Research Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 [email protected] • Consumer / Materials
Jesada TECHAHUSDIN, CFA (66) 2658 6300 ext 1394 [email protected] • Financial Services
Kittisorn PRUITIPAT, CFA, FRM (66) 2658 6300 ext 1395 [email protected] • Real Estate
Sittichai DUANGRATTANACHAYA (66) 2658 6300 ext 1393 [email protected] • Services Sector
Sukit UDOMSIRIKUL Head of Retail Research (66) 2658 6300 ext 5090
Mayuree CHOWVIKRAN (66) 2658 6300 ext 1440 [email protected] • Strategy
Padon VANNARAT (66) 2658 6300 ext 1450 [email protected] • Strategy
Surachai PRAMUALCHAROENKIT (66) 2658 6300 ext 1470 [email protected] • Auto • Conmat • Contractor • Steel
Suttatip PEERASUB (66) 2658 6300 ext 1430 [email protected] • Media • Commerce
Sutthichai KUMWORACHAI (66) 2658 6300 ext 1400 [email protected] • Energy • Petrochem
Termporn TANTIVIVAT (66) 2658 6300 ext 1520 [email protected] • Property
Woraphon WIROONSRI (66) 2658 6300 ext 1560 [email protected] • Banking & Finance
Jaroonpan WATTANAWONG (66) 2658 6300 ext 1404 [email protected]
• Transportation • Small cap
Chatchai JINDARAT (66) 2658 6300 ext 1401 [email protected] • Electronics
VIETNAM
LE Hong Lien, ACCA Head of Institutional Research (84) 844 55 58 88 x 8181 [email protected] • Strategy • Consumer • Diversified • Utilities
THAI Quang Trung, CFA, Deputy Manager, Institutional Research (84) 844 55 58 88 x 8180 [email protected] • Real Estate • Construction • Materials
TRUONG Thanh Hang (84) 844 55 58 88 x 8085 [email protected] • Consumer
Le Nguyen Nhat Chuyen (84) 844 55 58 88 x 8082 [email protected] • Oil & Gas NGUYEN Thi Ngan Tuyen, Head of Retail Research
(84) 8 44 555 888 x 8081 [email protected] • Food & Beverage • Oil&Gas • Banking
NGUYEN Trung Hoa, Dy Head of Retail Research (84) 8 44 555 888 x 8088
[email protected] • Macro • Steel • Real estate
TRINH Thi Ngoc Diep (84) 4 44 555 888 x 8208 [email protected] • Technology • Utilities • Construction
TRUONG Quang Binh (84) 4 44 555 888 x 8087 [email protected] • Rubber plantation • Tyres and Tubes • Oil&Gas
PHAM Nhat Bich (84) 8 44 555 888 x 8083 [email protected] • Consumer • Manufacturing • Fishery
NGUYEN Thi Sony Tra Mi (84) 8 44 555 888 x 8084 [email protected] • Port operation • Pharmaceutical
• Food & Beverage
June 02, 2014 17
Strategy
APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES
DISCLAIMERS
This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate
and that each security‟s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdiction‟s stock exchange in the equity analysis. Accordingly, investors‟ returns may be less than
the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report.
The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank
Investment Bank Berhad, its subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connec ted parties and/or employees (collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice.
This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking
statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events.
MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit
business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. MKE may, to the extent permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report.
This report is prepared for the use of MKE‟s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect.
This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only
under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report.
Malaysia
Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis.
Singapore
This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank KERPL”) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law.
Thailand
The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the
perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) does not confirm nor certify the accuracy of such survey result.
Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of MBKET. MBKET accepts no liability whatsoever for the actions of third parties in this respect.
US
This research report prepared by MKE is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the
Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You
should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevant legislation and regulations.
UK
This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regulated, by the Financial Services Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any
responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.
June 02, 2014 18
Strategy
Disclosure of Interest
Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies.
Singapore: As of June 02, 2014, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.
Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report.
Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph
16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.
As of June 02, 2014, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.
MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in
issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment and may receive compensation for the services provided from the companies covered in this report.
OTHERS
Analyst Certification of Independence
The views expressed in this research report accurately reflect the analyst‟s personal views about any and all of the subject securities or issuers; and no part of the research analyst‟s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.
Reminder
Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable
of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.
Definition of Ratings
Maybank Kim Eng Research uses the following rating system
BUY Return is expected to be above 10% in the next 12 months (excluding dividends)
HOLD Return is expected to be between - 10% to +10% in the next 12 months (excluding dividends)
SELL Return is expected to be below -10% in the next 12 months (excluding dividends)
Applicability of Ratings
The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.
DISCLOSURES
Legal Entities Disclosures
Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng
Securities (“PTKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Philippines: Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange
Commission. Vietnam: Maybank Kim Eng Securities JSC (License Number: 71/UBCK-GP) is licensed under the State Securities Commission of Vietnam.Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank
KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.
June 02, 2014 19
Strategy
Malaysia Maybank Investment Bank Berhad
(A Participating Organisation of
Bursa Malaysia Securities Berhad)
33rd Floor, Menara Maybank,
100 Jalan Tun Perak,
50050 Kuala Lumpur
Tel: (603) 2059 1888;
Fax: (603) 2078 4194
Singapore Maybank Kim Eng Securities Pte Ltd
Maybank Kim Eng Research Pte Ltd
9 Temasek Boulevard
#39-00 Suntec Tower 2
Singapore 038989
Tel: (65) 6336 9090
Fax: (65) 6339 6003
London Maybank Kim Eng Securities
(London) Ltd
6/F, 20 St. Dunstan‟s Hill
London EC3R 8HY, UK
Tel: (44) 20 7621 9298
Dealers‟ Tel: (44) 20 7626 2828
Fax: (44) 20 7283 6674
New York Maybank Kim Eng Securities USA
Inc
777 Third Avenue, 21st Floor
New York, NY 10017, U.S.A.
Tel: (212) 688 8886
Fax: (212) 688 3500
Stockbroking Business:
Level 8, Tower C, Dataran Maybank,
No.1, Jalan Maarof
59000 Kuala Lumpur
Tel: (603) 2297 8888
Fax: (603) 2282 5136
Hong Kong Kim Eng Securities (HK) Ltd
Level 30,
Three Pacific Place,
1 Queen‟s Road East,
Hong Kong
Tel: (852) 2268 0800
Fax: (852) 2877 0104
Indonesia PT Maybank Kim Eng Securities
Plaza Bapindo
Citibank Tower 17th Floor
Jl Jend. Sudirman Kav. 54-55
Jakarta 12190, Indonesia
Tel: (62) 21 2557 1188
Fax: (62) 21 2557 1189
India Kim Eng Securities India Pvt Ltd
2nd Floor, The International 16,
Maharishi Karve Road,
Churchgate Station,
Mumbai City - 400 020, India
Tel: (91).22.6623.2600
Fax: (91).22.6623.2604
Philippines Maybank ATR Kim Eng Securities Inc.
17/F, Tower One & Exchange Plaza
Ayala Triangle, Ayala Avenue
Makati City, Philippines 1200
Tel: (63) 2 849 8888
Fax: (63) 2 848 5738
Thailand Maybank Kim Eng Securities
(Thailand) Public Company Limited
999/9 The Offices at Central World,
20th
- 21st Floor,
Rama 1 Road Pathumwan,
Bangkok 10330, Thailand
Tel: (66) 2 658 6817 (sales)
Tel: (66) 2 658 6801 (research)
Vietnam In association with
Maybank Kim Eng Securities JSC
1st Floor, 255 Tran Hung Dao St.
District 1
Ho Chi Minh City, Vietnam
Tel : (84) 844 555 888
Fax : (84) 838 38 66 39
Saudi Arabia In association with
Anfaal Capital
Villa 47, Tujjar Jeddah
Prince Mohammed bin Abdulaziz
Street P.O. Box 126575
Jeddah 21352
Tel: (966) 2 6068686
Fax: (966) 26068787
South Asia Sales Trading Kevin FOY
Tel: (65) 6336-5157
US Toll Free: 1-866-406-7447
North Asia Sales Trading Alex TSUN
Tel: (852) 2268 0228
US Toll Free: 1 877 837 7635
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