Tuesday, May 12, 2020 FBMKLCI: 1, 382 .31

THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* WWeeeekkllyy SSttrraatteeggyy

Market View, News in Brief: Corporate, Economy, and Share Buybacks

Kaladher Govindan Tel: +603-2167 9609 [email protected] www.taonline.com.my

Market View FBMKLCI to Drift Lower on Sustained Selling Pressure The local blue -chip benchmark FT SE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) whipsawed between profit-taking and bargain hunting interest last week. Profit-taking post month-end window-dressing due to the US-China spat over the origin of the virus outbreak was offset by a strong rebound in global oil prices on hopes production cuts and reopening of major economies as virus lockdowns ease will boost demand recovery. Nonetheless, a late session selldown mid-week by foreign funds after oil prices fell on oversupply worries with US weekly crude stockpiles rising more than expected dampened market sentiment ahead of another extended three-day weekend break.

Week-on-week, the FBM KLCI slumped 25.47 points, or 1.81 percent to 1,382.31, with losses on Nestle (-RM1.90), Public Bank (-64sen), Petronas Gas (-54sen), Kuala Lumpur Kepong (-40sen) and Hong Leong Finance (-28sen) accounting for most of the losses. Average daily traded volume and value last week stayed strong at 5.45 billion shares and RM2.67 billion, compared to the 5.22 billion shares and RM2.64 billion average the previous week, with active retail participation in small caps and low-priced penny stocks continuing to dominate daily trading activities.

Selling pressure in Bursa Malaysia stocks is expected to sustain this week. Apart from Covid- 19 related issues, and Malaysia’s 1Q20 GDP data, the fast approaching one-day parliamentary session on 18 May could be another reason for investors to take profit, especially foreigners. The Covid-19 pandemic has worsened the rift between the US and China with both parties blaming each other for the ordeal and President Trump making statements that could throw the phase one trade agreement signed last January between both countries into a quandary. With the US making up about one third of the total 4.1 million cases, 280,000 deaths and about 90,000 daily Covid-19 cases worldwide, the reasons for the anger and the terrible agony are clear as the resulting economic lockdown has destroyed more than 30 million jobs in the country and is expected to contribute to an economic recession in 2020.

Definitely, this doesn’t augur well for President Trump who is going for a reelection later this year. If Trump continues a rhetorical strategy to place the blame for Covid-19 pandemic squarely on China to secure his election victory, the fear is that this blame game could evolve into irrational actions that may include punitive move against Beijing. This may include imposition of new tariffs, sanctions, shifting supply chains away from China, not honouring its debt obligations, etc. To usurp such actions via collaboration with its allies could make the situation worse if China retaliates and push for similar alliances. Thus, both countries should set aside their differences and work together to find a cure for this pandemic, the sooner the better for economic recovery and stability in the financial markets.

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Talking about economic r ecession, investors will be watching closely the release of Malaysia’s 1Q20 Gross Domestic Product (GDP) this Wednesday. With only two-weeks of impact from the Movement Control Order being reflected during the quarter, we may witness the actual data to be flat or just slightly above zero percent, beating consensus expectations for a contraction of -0.6% year-on-year (YoY). Even if the growth turns out to be better than expectations due to still strong global trade, it is nothing to shout about as the real test is what transpires over the next two quarters.

With one full month experiencing only about 45% of economic activities in the 2Q and activities in non-essential sectors still subject to greater restrictions than essential activities, the GDP for April to June quarter could contract at a double digit rate of around -13.2% YoY and remain in the negative territory in the third quarter (-2.9% YoY) before registering a growth of slightly more than 1% YoY in the fourth quarter. The better performance in the last quarter presumed all economic activities are back to normal and the positive impacts from the multi-billion stimulus measures and monetary loosening have started to trickle down in the economic value chain for a much stronger growth in 2021. Of course, this is based on a very important assumption that a cure for the Covid-19 disease is available by this October or no longer be a threat to economic activities.

Externally, the US and China April data on inflation (both for consumers and producers) and retail sales will be keenly watched to gauge deflationary pressures and the pulse of the economy via consumer spending respectively.

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Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein.

Kaladher Govindan – Head of Research

TA S ECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad

Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 203 2 5048 www.ta.com.my

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News In Brief Corporate

CIMB Group Holdings Bhd’s 92.5 %-owned subsidiary, PT Bank CIMB Niaga Tbk posted an 11.8% increase in net profit of Indonesian rupiah IDR1.1trn in 1Q20. Despite the challenging environment due to the COVID-19 pandemic, the bank managed to achieve a double-digit net profit growth for 1Q20, mainly driven by an 11.5% YoY growth in non- interest income and a 2.7% YoY reduction in operating expenses. (Bernama) Comment: CIMB Niaga reported encouraging 1QFY20 results. Coming in within our estimates at 23%, net profit stood at Rp944bn. Net profit increased 9.2% QoQ and 11.8% YoY, with the yearly improvement underpinned by higher operating income and decline in operating expenses. ROE broadened to 10.58% vs. 9.48% a year ago. CAR remained strong at 19.39% post IFRS/PSAK71 implementation. Overall asset quality appeared stable during the 1Q. However, management guided that the 2Q will be more challenging as headwinds start gathering pace. Additionally, initial KPI targets may be out of reach due to moderation of financial performance envisaged in the coming months. We maintain our forecast on CIMB Group for now pending upcoming 1QFY20 results announcement. TP is maintained at RM3.90. BUY.

MISC Bhd posted a net loss of RM1.16bn in 1QFY20, from a net profit of RM510.50mn a year ago, owing it having to make an RM1.05bn provision for litigation claims in its quarterly numbers. This is despite the group posting a higher revenue of RM2.51bn, from RM2.28bn previously, and a stronger operating profit of RM845.1mn, from RM591.9mn previously. (Bursa Malaysia/ The Edge)

FGV Holdings Bhd is forming a JV company with Hyderabad-based Pre-Unique India Pvt Ltd to directly participate in the food and agri-based products market in India, particularly in South India region. Under the agreement signed, the partners would conduct intelligence work; provide advisory work and services for agricultural, plantation, and downstream related activities; operate agriculture, plantation, food and non-food processing facilities; and trade and market food and non-food products. (Bursa Malaysia/ Bernama)

Datuk Seri Mahdzir Khalid has been appointed as the new chairman of Tenaga Nasional Bhd effective May 12. He will replace Tan Sri Ahmad Badri Mohd Zahir, who was appointed as the new chairman of the Employees' Provident Fund beginning May 1. (Bursa Malaysia/ Bernama)

Tan Sri Mohd Bakke Salleh has been appointed as chairman of Telekom Malaysia Bhd , effective May 11, 2020, succeeding Rosli Man. (Bursa Malaysia/ Bernama)

MSM Malaysia Holdings Bhd (Not Rated) has appointed 4 independent and non- executive directors last Friday. They are former Petronas Chemical Bhd president and CEO Datuk Dr Abd Hapiz Abdullah, ex-UMW Holdings Bhd president and group CEO Datuk Syed Hisham Syed Wazir, Datuk Muthanna Abdullah and Choy Khai Choon. (Bursa Malaysia/ The Edge)

Ireka Corp Bhd (Not Rated) has entered into a non-binding agreement with its London Stock Exchange-listed associate Aseana Properties Ltd to consider its participation in the latter’s de-merger exercise. The exercise would entail separating the interest of Ireka and its concert party, Legacy Essence Ltd along with other shareholders, who collectively owns and estimated 50% aggregate of the outstanding shares in Aseana, from those of Aseana. (Bursa Malaysia/ The Sun)

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Ageson Bhd ’s (Not Rated) unit Esa Pile Sdn Bhd, which has no sand mining operations, will leverage on long-established partners and experienced subcontractors in the sand business to fulfil the RM27.5bn contract from Guangzhou Kaishengda Industrial Co Ltd (GKI). The company said the partners had obtained approved permit for the export of sands. (Bursa Malaysia/ Bernama)

No applications have been received or Approved Permit approval given to Ageson Bhd (Not Rated) or its subsidiary, Esa Pile Sdn Bhd, said the Department of Mineral and Geoscience Malaysia director-general Datuk Shahar Effendi Abdullah Azizi. (The Star)

Pegasus Heights Bhd (Not Rated), which is involved in leasing out commercial properties, has postponed its plans to expand its new F&B business and revamp its Seremban shopping mall in light of the COVID-19 pandemic. It has part-varied RM13mn from its 2019 rights issue proceeds. The RM13mn will be varied for working capital (RM10.5mn) and repayment of borrowings (RM2.5mn). (Bursa Malaysia/ The Edge)

The Securities Commission (SC) has been given the green light to hold the assets of Asia Media Group Bhd (Not Rated) founder Wong Shee Kai, or Ricky Wong, who is currently wanted in connection with offences under anti-money laundering laws. The SC said the Kuala Lumpur High Court had on May 8 granted it an interim order to freeze the assets of Wong, who is currently still at-large, and two others. (The Star)

Orion IXL Bhd ’s (Not Rated) auditors Messrs STYL Associates have resigned due to manpower issues. The group is in the midst of finding a replacement. (Bursa Malaysia/ The Edge)

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News In Brief Economy

Malaysia Government Extends Conditional MCO until June 9 Prime Minister Tan Sri Muhyiddin Yassin has announced the fourth extension of the movement control order (MCO), currently with loosened restrictions under the conditional MCO (CMCO), for another four weeks from May 13 to June 9. The period will see several major Malaysian celebrations that usually involve the movement of people, namely Hari Raya Aidilfitri, Kaamatan Festival and Gawai Day. However, under the CMCO, Muhyiddin stressed that the restrictions on interstate travel still apply. The decision was made after being advised by the Ministry of Health (MoH) and the National Security Council (NSC), he said. During the extended period, Muhyiddin said, visitations among neighbours and family members living in the same state are allowed, with any gatherings to be capped at 20 people at a time.

On interstate travel, he said exceptions will be made for married couples living in different states due to work requirements. As such, they are allowed to cross states to meet their families. Those who want to apply for this extension can do so via the Gerak Malaysia app, or by directly applying for it at the nearest police station. Nevertheless, he reminded Malaysians to comply with the health standard operating procedures (SOPs) provided by the MoH, such as social distancing, wearing face masks and practising personal hygiene routines by using hand sanitiser during this festive season. (The Edge)

March Jobless Rate in Malaysia Spikes to 610,500 Malaysia reported a 17.1% increase in unemployed persons to 610,500 in March this year, the fallout from the Movement Control Order (MCO) as the government sought to minimise the impact of the Covid-19 pandemic. In a statement, Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said this increase when compared with 521,300 a year ago was due to the adverse impact of the MCO. “The unemployment rate in March 2020 increased to 3.9% ,” he said in a statement. “ The highest unemployment rate in the country was recorded at 7.4% ”. The labour force in March fell by 0.2% to 15.84mn persons from February 2020. During the same period, employed persons decreased by 0.7% to 15.23mn persons.

Out of the number, 2.81mn were own account workers such as small traders/ entrepreneurs (pasar tani/ night market/ catering/ freelancers etc.) who earn daily income/ wages. “They were exposed to the risk of unemployment and work loss that can affect income during the MCO because partly were unable to work or run their business .” Meanwhile, there was a significant increase in the number of employed persons who were working less than 30 hours per week to 1.12mn persons as compared to 366,300 persons recorded in February 2020. The labour force participation rate (LFPR) declined by 0.1 percentage point from 68.7% in February 2020 to 68.6% in March 2020 after recording the highest LFPR in January 2020 (68.9%). (The Star)

Wholesale & Retail Trade Decrease by 5.7 % in March 2020 A total of RM103.2bn was recorded by sales of Wholesale & Retail Trade in March 2020, a decrease of RM6.3bn or -5.7 % as compared to the same month a year ago. The decline was attributed to Retail Trade which decreased RM2.9bn. Similarly, Motor Vehicles and Wholesale Trade also declined of RM1.9bn and RM1.4bn respectively. Namely, sales of Motor Vehicles declined -15.3% in March 2020 as compared with the same period of the previous year. Retail Trade and Wholesale Trade also declined to register -6.6% and -2.7 %, respectively.

Volume index of Wholesale & Retail Trade registered 120.1 points, contracted to -6.1% as compared to the same month of the previous year. The negative growth was recorded in all subsectors, namely Wholesale Trade -2.5%, Retail Trade -7.5% and Motor Vehicles -14.4 %. As for seasonally adjusted volume index, it recorded -11.6% as against a month ago. In Page 5 of 10

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the first quarter 2020, volume index of Wholesa le & Retail Trade increased 1.5% to 127.5 points as compared to the same period in 2019. Wholesale Trade was the key performer by registering 2.5%. (DOSM)

Services Producer Price Index increased 0.4% in 1Q20 The Services Producer Price Index (SPPI) for the first quarter of 2020 increased 0.4% to 109.8 as compared to 109.4 in the same quarter of the preceding year. The main sub- sectors that contributed to the increase were Accommodation; Food & Beverage Service Activities (1.3%), Education (0.6%), Real Estate Activities (0.2%), Health (0.2%), Transport (0.1%) and Information & Communication (0.1%). The index for Arts, Entertainment & Recreation decreased 0.7% while the Professional sub-sector was unchanged. For quarterly comparisons, the index for the first quarter 2020 increased 0.2%.

The increase was driven by sub-sectors Accommodation; Food & Beverage Service Activities (0.4%), Transportation (0.3%), Education (0.3%), Real Estate Activities (0.1%) and Health (0.1%). Meanwhile, the index for Information & Communication, Professional and Arts, Entertainment & Recreation indices was unchanged. The SPPI for Transportation sub- sector increased 0.1% for the first quarter of 2020 as compared to the same quarter of the previous year. Sub-sectors that showed increase in the index contributed by Postal Activities (7.7%), Courier Activities (0.5%) and Sea & Coastal Water Transport (0.3%). The Passenger Air Transport recorded a decline of 0.7%. (DOSM)

Parliament Speaker Accepts Dr. M's Motion of no Confidence Against Muhyiddin A motion to hold a vote of no confidence against Prime Minister Tan Sri Muhyiddin Yassin has been accepted by the Dewan Rakyat. Speaker Tan Sri Mohamad Ariff Md Yusof, said the motion, filed by former prime minister Tun Dr Mahathir Mohamad, would be brought forward to the upcoming one-day meeting on May 18. Mohamad Ariff said he received two motions on May 4 from Dr Mahathir. The first was under Standing Order 4 to make a ruling that the Speaker remains until Parliament is dissolved. The second was under Standing Order 27(3) that Muhyiddin does not command support of the majority of the House. “After scrutinising the explanations provided, I have decided that the motion under Standing Order 4 is rejected as it does not fulfil the criteria in the Standing Order. However, the motion under Standing Order 27(3) is accepted to be brought to the coming Dewan Rakyat meeting ,” Ariff said in a statement on May 8.

In a letter dated May 4, Dr Mahathir wrote a letter to the Speaker to seek permission for the motion and resolution on the matter to be allowed when Parliament sits for one day on May 18. In the same statement, Ariff rejected a motion brought by Sabah Chief Minister Datuk Seri Shafie Apdal, who is also the Semporna lawmaker. Shafie had filed a motion under Standing Order 27(3) dated May 1 which read that Dr Mahathir had the confidence of the House. Ariff said Shafie's motion was rejected as it was not in line with Article 43 of the Federal Constitution. He also rejected a motion by Datuk Liew Vui Keong who filed it under Standing Order 18. The motion by Liew contained four proposals, among them are that Muhyiddin does not command the majority of the House and that it was Dr Mahathir who had the support of the majority in the House. The other proposals were that lawmakers are not bound by the regulations under the movement control order (MCO) as Parliament is responsible for its own affairs; and lastly, a suggestion for Parliament to sit for eight days instead of just one. (The Star)

Asia China's Bank Lending Declines Less Than Expected In April China's bank lending declined less than expected in April as the central bank ramped up its monetary policy measures to support the economy that was hit by coronavirus pandemic. Bank lending decreased to CNY1.7tn from CNY2.85tn in March, data from the People's Bank of China showed. Nonetheless, this was above economists' forecast of CNY1.3tn.

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The broad measure of money supply, M 2 grew at a faster pace of 11.1% on a yearly basis, following a 10.1% rise in March. This was the fastest expansion in more than three years. M2 was expected to climb 10.3% in April. Aggregate financing grew CNY3.09tn in April after rising CNY5.15tn a month ago. (RTT)

PBOC Vows Stronger Pro-Growth Policy but Leaves Details Vague The People’s Bank of China said it’ll resort to “more powerful” policies to counter unprecedented economic challenges from the coronavirus pandemic, without giving further details on what measures it will use. The central bank will “ work to offset the virus impact with more powerful policies ,” paying more attention to economic growth and jobs while it balances multiple policy targets, the PBOC said in its quarterly monetary policy report, released Sunday. It reiterated that prudent monetary policy will be more flexible and appropriate and it’ll keep liquidity at a reasonable level. The remarks reflect the PBOC’s growing concern over the unprecedented economic downturn and the risk of a second quarter of contraction, given sluggish domestic demand and the collapsing global economy. While the central bank has increased liquidity supply to banks and eased rules on banks’ buffers to allow them to extend more credit, the scale of the stimulus is limited compared to other major economies globally.

The central bank warned of greater challenges in both the domestic and global economy, saying the virus has brought “unprecedented blows ” to China and pushed the world onto “ a recession path .” While stronger policies are pledged to deal with these challenges, the bank did not state explicitly what measures will come next. In the policy outlook section, the PBOC gives greater play to its targeted relending tool that had committed CNY1.8tln (US$254bn) of credit to virus-hit sectors such as exporters and small businesses. It didn’t commit to broader easing measures such as further cuts to banks’ reserve ratios or interest rates on its funding tools. (Bloomberg)

BoJ Policymakers Discussed Decisive Steps to Avoid Great Depression Some Bank of Japan policymakers called for close coordination with government for policy formulation so as to avoid a Great Depression amid coronavirus pandemic, the Summary of Opinions at the Monetary Policy Meeting, held on April 27, showed Monday. "Policy authorities must act decisively in order to avoid a second Great Depression ," the summary said. "Close cooperation between fiscal and monetary authorities in terms of their policies is essential at the time of a significant economic crisis ." Given the current situation where there is concern about deflation, fiscal and monetary authorities can further cooperate with each other regarding their policies, members noted. Some policymakers said it is desirable to conduct further active purchases of JGBs and T-Bills, with a view to stabilizing the yield curve at a low level. At the April meeting, the bank had expanded its monetary stimulus as it removed the limit for government bond purchases. The bank raised the maximum amount of additional purchases of commercial papers and corporate bonds and lifted the upper limit of outstanding holdings to about JPY20tn. (RTT)

United States April Unemployment Rate Rose to a Record 14.7% The April unemployment rate surged to a record 14.7% and payrolls dropped by a historic 20.5mn workers as the coronavirus pandemic hit the economy, wiping out a decade of job gains in a single month. Employment fell sharply in all broad business sectors last month and across all groups of workers, with particularly large increases in unemployment among women, college dropouts and Hispanics. The U.S. jobless rate eclipsed the previous record rate of 10.8% for data tracing back to 1948, though it was well below the 25% rate economists estimate was reached during the Great Depression. The job losses due to business closures triggered by the pandemic produced by far the steepest monthly decline on records back to 1939.

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By comparison, nearly 2mn jobs were lost in one month in 194 5, at the end of World War II. The Labor Department survey of households showed a large number of workers who said they were “employed but absent from work.” Many of those should have been counted as a temporary layoff, which would have caused the unemployment rate to be almost 5 percentage points higher, the department said. Average hourly earnings increased by 7.9% in April from a year earlier, likely reflecting that many low-wage workers lost their jobs, while more white-collar employees worked from home. (WSJ)

Fed Officials Push Back On Market View Rates May Go Negative The Federal Reserve, which cut its primary interest rate to near zero March 15 in the face of the economic crisis prompted by the coronavirus, isn’t anticipating the use of negative rates that have been tried in Europe and Japan, two Fed presidents said Monday. “At best, we’d have to study it more, but I don’t anticipate that being a tool we would be using in the U.S. ,” Federal Reserve Bank of Chicago President Charles Evans said from Chicago. “I am not a big fan of going into the negative rate territory ,” Atlanta Fed President Raphael Bostic said in Atlanta.

Traders in fed funds futures markets last week were pricing in the possibility that the central bank will cut its policy rate below zero, which dragged the two-year Treasury yield to a record low. Fed Chairman Jerome Powell has consistently pushed back against the idea of taking interest rates negative, and that message has been echoed by a wide range of U.S. central bankers in recent years. Speaking to the Rotary Club of Atlanta, Bostic said the idea of negative rates was “ further than what I am ready to contemplate right now .” Bostic added that the Fed officials have said all tools would be considered in a crisis, and the central bank would not take any potential remedy off the table. (Bloomberg)

Budget Deficit Hit US$737bn in April as Taxes Slow, Spending Rises, CBO Says Federal spending and budget deficits soared in April as the government raced to counter the impact of the coronavirus pandemic, according to the Congressional Budget Office (CBO). The government spent US$976bn and recorded a budget deficit of US$737bn, according to a CBO estimate. The deficit stemmed from the deteriorating economy, delays in tax deadlines and the government’s efforts to fill the holes in household and corporate budgets. Tax revenue in April was US$239bn, a 55% drop from last year, as individuals and companies deferred payments. CBO expects that most of those payments will come later, but some won’t as businesses become insolvent. Federal spending in April was more than double what it was a year earlier. CBO recorded the one-time stimulus payments to individuals as spending, not tax refunds. Those one-time payments now total more than US$218bn, according to Treasury Department data. In addition, spending on Medicare, unemployment compensation and aid to states all rose. (WSJ)

Eurozone German Exports Log Record Fall Amid Covid -19 Pandemic German exports declined at a record pace in March as widespread lockdown to contain the spread of coronavirus, or Covid-19, across major economies hurt the demand, official data showed. Exports fell by seasonally adjusted 11.8% month-on-month, in contrast to February's 1.2% rise, Destatis reported. This was the strongest decline since the beginning of the time series in August 1990. Economists had forecast a monthly decrease of 5% in March. Likewise, imports dropped 5.1% on month, the largest fall since January 2009. Economists had forecast imports to drop 4% after easing 1.5% in February. Consequently, the trade surplus declined to a seasonally adjusted EUR12.8bn from EUR21.4bn a month ago. On a yearly basis, exports and imports decreased 7.9% and 4.5% respectively.

On an unadjusted basis, the trade surplus fell to EUR17.4bn from EUR22.3bn in the same period last year. The current account showed a surplus of EUR24.4bn versus EUR30.9bn last year. Data showed that exports to the EU countries fell 11.0% and imports from these countries decreased 8.0%. Shipments to euro area countries were down 14% and imports

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from these economies fell 7.8% . A survey conducted by the German Chamber of Commerce and Industry, or DIHK, showed that 60% of companies suffer from lower demand and 43% from canceled orders. (The Edge)

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News In Brief Share Buy-Back

Share Buy-Back: 08 May 2020

Total Treasury Company Bought Back Price (RM) Hi/Lo (RM) Shares EPMB 10,000 0.27/ 0.26 0.27/ 0.26 7,919,600

FIMACOR 5,000 1.41 1.41/ 1.39 6,172,100 GKENT 30,000 0.69/ 0.685 0.70/ 0.68 33,707,800

GLOMAC 50,000 0.30 0.30 26,258,000 IGBB 120,000 2.47/ 2.45 2.47/ 2.43 12,830,354 KFIMA 15,000 1.31/ 1.28 1.32/ 1.27 2,162,200

STAR 3,000,000 0.37/ 0.355 0.375/ 0.355 13,798,700

TROP 210,000 0.80/ 0.795 0.80/ 0.795 38,281,041 Source: Bursa Malaysia

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Disclaimer The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein.

Kaladher Govindan – Head of Research

TA S ECURITIES HOLDINGS BERHAD (14948-M) A Participating Organisation of Bursa Malaysia Securities Berhad

Menara TA One 22 Jalan P. Ramlee 50250 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 203 2 5048 www.ta.com.my

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For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE

Company Share Price Target Price Market Cap. EPS (sen) PER (X) Div Yield (%) 52weeks 52weeks % Chg % upside Recom Beta (RM) (RM) (RMm) FY20 FY21 FY20 FY21 FY20 FY21 High Price % Chg Low Price % Chg YTD 08-May-20 AUTOMOBILE BAUTO 1.36 1.80 32.4% Buy 1,581 1.20 11.1 15.4 12.3 8.8 6.3 8.8 2.78 -51.1 0.94 45.5 -35.2 MBMR 2.93 3.67 25.3% Buy 1,145 1.06 42.0 45.9 7.0 6.4 7.2 7.8 4.47 -34.5 2.50 17.2 -24.1 PECCA 0.88 0.88 0.6% Buy 155 1.16 7.2 8.1 12.1 10.8 5.7 5.7 1.30 -32.7 0.68 29.6 -19.7 SIME 1.97 1.71 -13.2% Sell 13,399 1.11 12.4 13.1 15.8 15.0 2.5 4.1 2.38 -17.2 1.56 26.3 -11.3 UMW 2.16 2.63 21.8% Buy 2,524 1.52 24.2 30.6 8.9 7.1 2.8 2.3 5.58 -61.3 1.65 30.9 -51.9

BANKS & FINANCIAL SERVICES ABMB 2.07 1.70 -17.9% Sell 3,205 1.06 28.4 28.7 7.3 7.2 5.8 5.8 3.90 -46.9 1.48 39.9 -21.3 AFFIN 1.54 1.30 -15.6% Sell 3,058 0.88 22.9 24.6 6.7 6.3 4.5 4.5 2.18 -29.4 1.25 23.2 -18.9 AMBANK 2.91 2.80 -3.8% Sell 8,756 1.13 46.9 42.2 6.2 6.9 7.6 7.6 4.55 -36.0 2.82 3.2 -25.6 CIMB 3.44 3.90 13.4% Buy 34,135 1.09 45.5 49.3 7.6 7.0 7.6 7.6 5.45 -36.9 3.09 11.3 -33.2 HLBANK 13.40 11.90 -11.2% Sell 29,047 1.03 112.2 119.4 11.9 11.2 3.7 3.7 19.62 -31.7 11.70 14.5 -22.5 MAYBANK 7.41 6.40 -13.6% Sell 83,298 0.83 67.5 71.4 11.0 10.4 8.1 8.1 9.10 -18.6 7.00 5.9 -14.2 PBBANK 15.74 12.90 -18.0% Sell 61,105 1.12 131.3 139.5 12.0 11.3 4.6 4.6 23.90 -34.1 12.58 25.1 -19.0 RHBBANK 4.66 4.30 -7.7% Sell 18,687 0.91 57.0 62.7 8.2 7.4 6.0 6.0 5.98 -22.1 4.23 10.2 -19.4 BURSA 5.98 5.10 -14.7% Sell 4,835 0.96 23.7 24.9 25.3 24.0 3.5 3.5 7.13 -16.1 4.32 38.4 -1.8

BUILDING MATERIALS ANNJOO 0.72 0.42 -41.3% Sell 386 2.08 -11.3 2.1 na 34.0 0.0 1.4 1.65 -56.7 0.42 72.3 -41.4 CHINHIN 0.57 0.50 -11.5% Sell 309 1.08 2.6 5.0 21.6 11.2 1.3 2.3 0.92 -38.6 0.40 41.3 -21.5 CHINWEL 1.00 0.90 -9.5% Sell 289 1.30 8.4 13.8 11.8 7.2 3.4 5.5 1.90 -47.6 0.68 46.3 -27.9 CMSB 1.37 2.51 83.2% Buy 1,469 1.72 13.4 16.5 10.2 8.3 2.9 4.8 3.37 -59.3 0.83 65.1 -39.6 CSCSTEL 0.77 0.67 -12.4% Sell 283 1.30 6.2 9.1 12.3 8.4 4.0 5.8 1.19 -35.7 0.54 41.7 -27.8 ENGTEX 0.62 0.48 -22.6% Sell 272 0.66 1.3 2.5 46.6 25.3 0.4 0.8 0.87 -28.3 0.46 34.8 -17.3

CONSTRUCTION GADANG 0.40 0.30 -24.1% Sell 288 2.13 5.2 4.8 7.6 8.3 2.5 2.5 0.94 -58.0 0.23 75.6 -43.2 GAMUDA 3.35 2.53 -24.5% Sell 8,420 1.55 26.8 27.7 12.5 12.1 3.6 3.6 4.30 -22.1 2.36 41.9 -14.1 GDB 0.62 0.55 -12.1% Buy 388 1.42 4.3 6.0 14.6 10.3 3.2 3.2 0.80 -22.0 0.26 138.5 0.8 IJM 1.68 1.38 -17.9% Sell 6,097 1.47 5.8 7.2 29.2 23.3 2.4 2.4 2.51 -33.1 1.15 46.1 -22.6 INTA 0.21 0.23 7.1% Buy 112 1.43 1.3 2.8 16.2 7.5 1.2 3.6 0.31 -32.3 0.15 40.0 -22.2 KAB 0.80 0.190 -76.3% Sell 740 1.00 0.9 1.2 86.9 67.5 0.5 0.5 1.05 -23.6 0.08 903.0 107.9 PESONA 0.22 0.25 16.3% Buy 149 1.16 2.8 2.9 7.7 7.4 4.7 7.0 0.26 -15.7 0.13 65.4 -2.3 SUNCON 1.81 1.16 -35.9% Sell 2,334 1.27 10.0 9.7 18.1 18.7 3.9 3.9 2.20 -17.7 1.25 44.8 -5.2 WCT 0.50 0.34 -32.3% Sell 691 2.05 -1.4 1.7 na 29.5 0.0 0.0 1.22 -59.4 0.25 102.0 -43.1 LITRAK 3.92 4.35 11.0% Buy 2,083 0.77 45.1 45.8 8.7 8.6 6.4 7.7 5.00 -21.6 3.30 18.8 -14.6

CONSUMER Brewery CARLSBG 27.66 28.60 3.4% Sell 8,457 1.35 83.1 100.5 33.3 27.5 3.0 3.6 39.26 -29.5 17.38 59.1 -5.9 HEIM 24.00 27.40 14.2% Buy 7,250 1.09 95.8 109.1 25.1 22.0 3.9 4.4 31.74 -24.4 17.30 38.7 -11.5 Retail AEON 1.19 1.65 38.7% Buy 1,671 1.12 8.8 10.4 13.5 11.4 3.4 3.8 1.83 -35.0 0.91 30.8 -16.2 AMWAY 4.97 6.00 20.7% Buy 817 0.67 28.3 31.7 17.6 15.7 5.5 5.5 6.16 -19.3 4.50 10.4 -11.7 F&N 31.54 42.00 33.2% Buy 11,568 0.67 120.8 132.4 26.1 23.8 2.1 2.2 36.00 -12.4 24.12 30.8 -9.5 FOCUSP 0.46 0.67 47.3% Buy 100 na 4.0 5.2 11.3 8.8 4.0 5.1 0.77 -40.9 0.29 56.9 23.0 HUPSENG 0.96 1.00 4.2% Buy 768 0.61 5.5 5.7 17.3 16.7 6.3 6.3 1.00 -3.5 0.75 28.9 6.7 JOHOTIN 1.42 1.90 33.8% Buy 441 1.31 15.8 18.3 9.0 7.8 4.9 5.3 1.90 -25.3 0.98 44.9 -17.9 LHI 0.63 0.65 3.2% Sell 2,300 na 3.5 4.7 18.0 13.5 1.7 2.2 1.19 -47.1 0.43 46.5 -28.4 NESTLE 138.20 143.00 3.5% Sell 32,408 0.51 247.0 290.3 56.0 47.6 1.8 2.0 149.90 -7.8 120.00 15.2 -6.0 PADINI 2.67 3.70 38.6% Buy 1,757 1.09 15.0 23.2 17.8 11.5 4.3 4.3 3.97 -32.8 1.78 50.0 -17.6 POHUAT 0.96 1.11 15.6% Buy 222 1.19 15.8 19.0 6.1 5.1 5.2 6.3 1.59 -39.6 0.69 39.1 -36.8 QL 8.10 7.00 -13.6% Sell 13,142 0.75 14.8 17.0 54.7 47.6 0.6 0.7 8.65 -6.4 6.50 24.6 -0.4 SCIENTX 8.46 11.80 39.5% Buy 4,364 0.87 77.0 88.8 11.0 9.5 2.7 3.2 9.87 -14.3 5.96 41.9 -10.5 SIGN 0.35 0.60 71.4% Buy 86 1.83 -0.9 3.7 na 9.3 5.1 5.1 0.54 -35.2 0.16 125.8 -22.2 Tobacco BAT 13.26 12.70 -4.2% Buy 3,786 0.94 105.5 101.9 12.6 13.0 7.9 7.4 34.78 -61.9 9.26 43.2 -12.1

GAMING Casino GENTING 4.15 5.35 28.9% Buy 15,980 1.33 22.6 46.5 18.4 8.9 3.9 4.3 6.92 -40.1 2.91 42.6 -29.9 GENM 2.38 2.03 -14.7% Sell 13,455 1.21 7.9 23.6 30.2 10.1 1.7 5.0 3.86 -38.4 1.83 30.1 -25.1 NFO BJTOTO 2.36 2.32 -1.7% Sell 3,157 0.81 13.8 20.0 17.1 11.8 5.1 7.6 2.82 -16.3 1.94 21.6 -8.5

HEALTHCARE Hospitals/ Pharmaceutical DPHARMA 1.55 1.71 10.3% Buy 1,061 0.92 9.0 10.0 17.3 15.4 3.8 4.2 1.78 -12.9 1.05 47.6 9.2 IHH 5.16 5.97 15.7% Buy 45,274 0.73 10.7 12.6 48.1 41.1 0.6 0.7 5.95 -13.3 4.55 13.4 -5.7 KPJ 0.87 1.04 19.5% Buy 3,723 0.92 4.8 5.0 18.3 17.3 2.2 2.3 1.04 -16.3 0.72 20.8 -7.9 Rubber Gloves HARTA 7.37 7.20 -2.3% Sell 24,948 0.70 13.3 15.9 55.2 46.4 1.1 1.3 7.80 -5.5 4.73 55.8 34.5 KOSSAN 5.85 5.92 1.2% Buy 7,482 0.41 21.4 21.9 27.3 26.7 1.4 1.5 5.98 -2.2 3.57 63.9 40.6 SUPERMX 2.98 1.94 -34.9% Buy 3,848 0.69 10.3 11.7 28.9 25.5 1.1 1.2 3.02 -1.3 1.29 131.0 114.4 TOPGLOV 7.31 6.26 -14.4% Sell 18,741 0.19 19.9 19.4 36.7 37.6 1.4 1.3 7.39 -1.1 4.21 73.6 55.5

INSURANCE TUNEPRO 0.35 0.24 -31.4% Sell 263 1.49 4.9 7.3 7.1 4.8 6.3 9.3 0.77 -54.2 0.20 75.0 -38.1

MEDIA ASTRO 1.03 1.20 16.5% Buy 5,371 1.35 12.6 11.5 8.2 9.0 7.3 5.8 1.61 -36.0 0.71 46.1 -18.9 MEDIA PRIMA 0.15 0.12 -20.0% Sell 166 1.07 -7.2 -8.2 na na 0.0 0.0 0.52 -71.2 0.11 36.4 -46.4 STAR 0.36 0.27 -23.9% Hold 257 1.34 -1.3 -1.2 na na 0.0 0.0 0.71 -49.6 0.23 57.8 -26.8

For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE

Company Share Price Target Price Market Cap. EPS (sen) PER (X) Div Yield (%) 52weeks 52weeks % Chg % upside Recom Beta (RM) (RM) (RMm) FY20 FY21 FY20 FY21 FY20 FY21 High Price % Chg Low Price % Chg YTD

OIL & GAS LCTITAN 1.81 1.64 -9.4% Sell 4,114 1.29 -2.1 10.0 na 18.1 0.0 0.6 3.52 -48.6 0.98 85.6 -24.9 MHB 0.46 0.45 -1.1% Sell 728 2.04 0.4 0.9 121.3 51.6 0.0 0.0 0.97 -53.1 0.26 78.4 -47.7 MISC 7.90 8.90 12.7% Buy 35,264 0.74 50.5 49.6 15.6 15.9 3.8 3.8 9.37 -15.7 6.35 24.3 -5.0 PANTECH 0.38 0.29 -22.7% Sell 279 1.26 4.6 5.1 8.2 7.3 3.6 4.1 0.59 -35.9 0.25 50.0 -24.2 PCHEM 5.48 4.70 -14.2% Sell 43,840 1.46 29.3 31.2 18.7 17.6 2.4 2.6 8.95 -38.8 4.00 37.0 -25.4 SERBADK 1.61 2.10 30.4% Buy 5,428 1.54 18.8 20.4 8.6 7.9 3.1 3.1 2.52 -36.1 1.02 57.8 -26.8 UZMA 0.59 0.52 -11.9% Sell 13,556 1.92 7.9 9.4 7.5 6.3 0.0 0.0 1.14 -48.2 0.31 90.3 -38.9 VELESTO 0.15 0.21 40.0% Buy 1,232 1.86 0.4 0.3 35.0 51.4 0.0 0.0 0.41 -63.4 0.09 66.7 -60.5

PLANTATIONS FGV 0.93 1.26 36.2% Buy 3,375 1.51 7.0 8.9 13.3 10.4 2.2 2.2 1.59 -41.8 0.72 29.4 -39.1 IJMPLNT 1.39 1.68 20.9% Buy 1,224 1.47 4.1 6.5 34.3 21.5 3.6 3.6 2.48 -44.0 1.01 37.6 -41.1 IOICORP 3.88 4.43 14.2% Buy 24,316 1.01 14.7 17.6 26.4 22.1 2.3 2.7 4.82 -19.5 3.41 13.8 -15.8 KLK 20.60 25.24 22.5% Buy 22,217 0.98 89.4 102.8 23.0 20.0 2.5 2.5 25.40 -18.9 17.40 18.4 -16.9 SIMEPLT 4.77 6.13 28.5% Buy 32,839 na 19.5 21.6 24.5 22.1 2.7 3.1 5.63 -15.3 3.82 24.9 -12.5 TSH 0.71 1.49 109.9% Buy 980 1.38 5.4 6.8 13.1 10.4 2.8 4.2 1.59 -55.3 0.56 26.8 -53.9 UMCCA 4.40 5.07 15.2% Buy 923 0.72 -12.0 11.1 na 39.7 1.8 1.4 5.45 -19.3 4.00 10.0 -17.8

PROPERTY GLOMAC 0.30 0.35 18.6% Sell 228 0.73 2.6 2.7 11.2 11.0 2.7 2.7 0.40 -25.3 0.24 22.9 -19.2 HUAYANG 0.27 0.28 5.7% Hold 93 1.03 1.9 1.4 14.3 18.4 0.0 0.0 0.47 -43.0 0.15 82.8 -26.4 IBRACO 0.54 0.54 0.0% Sell 268 0.95 6.2 10.6 8.8 5.1 2.8 4.6 0.72 -25.0 0.23 134.8 -22.3 IOIPG 1.03 0.93 -9.7% Sell 5,671 1.06 11.1 11.4 9.3 9.1 2.9 2.9 1.43 -28.0 0.83 24.8 -16.9 MAHSING 0.44 0.52 19.5% Buy 1,056 1.51 5.6 6.2 7.8 7.0 8.6 9.2 0.96 -54.5 0.31 42.6 -38.3 SIMEPROP 0.68 0.60 -11.8% Buy 4,625 1.65 5.7 8.0 12.0 8.6 4.4 5.1 1.12 -39.3 0.48 43.2 -25.7 SPSETIA 0.82 0.96 17.8% Buy 3,295 1.68 8.3 11.9 9.8 6.8 1.2 3.1 2.25 -63.8 0.55 48.2 -49.1 SUNWAY 1.58 1.71 8.2% Buy 7,744 0.98 14.3 15.0 11.1 10.6 6.0 6.0 1.87 -15.5 1.25 26.4 -12.2 REIT CMMT 0.83 1.08 30.1% Buy 1,706 0.54 5.1 6.1 16.2 13.7 6.7 7.8 1.13 -26.5 0.74 12.9 -17.0 SUNREIT 1.63 1.88 15.3% Buy 4,800 0.61 9.2 9.9 17.8 16.5 5.6 6.0 1.98 -17.7 1.50 8.7 -10.4

POWER & UTILITIES MALAKOF 0.88 0.92 5.1% Buy 4,276 1.12 6.0 6.8 14.6 12.9 6.8 7.8 0.93 -5.9 0.65 35.7 0.6 PETDAG 20.50 17.20 -16.1% Sell 20,366 0.82 64.5 74.9 31.8 27.4 2.5 2.9 26.41 -22.4 17.50 17.1 -10.6 PETGAS 14.86 16.70 12.4% Hold 29,404 0.81 98.0 98.7 15.2 15.1 4.3 4.3 18.39 -19.2 13.36 11.2 -10.0 TENAGA 12.34 12.60 2.1% Hold 70,176 1.10 86.3 85.6 14.3 14.4 3.8 3.8 13.70 -9.9 10.36 19.1 -3.0 YTLPOWR 0.68 0.62 -8.1% Sell 5,181 1.14 4.1 4.0 16.4 16.8 3.0 3.0 0.86 -21.5 0.48 40.6 -12.3

TELECOMMUNICATIONS AXIATA 3.89 5.00 28.5% Buy 35,667 1.38 11.6 15.1 33.5 25.7 2.6 3.3 5.27 -26.2 3.01 29.4 -5.9 DIGI 4.48 4.40 -1.8% Sell 34,832 0.95 16.9 19.4 26.6 23.2 3.6 4.1 5.10 -12.2 3.82 17.3 0.4 MAXIS 5.27 5.02 -4.7% Sell 41,214 0.88 18.9 21.4 27.9 24.6 3.4 3.8 5.81 -9.3 4.59 14.8 -0.9 TM 4.25 3.39 -20.2% Sell 16,005 1.48 22.6 24.4 18.8 17.4 2.7 2.9 4.68 -9.2 2.60 63.5 11.3

TECHNOLOGY Semiconductor & Electronics ELSOFT 0.70 0.63 -10.0% Buy 468 1.46 4.2 4.9 16.9 14.3 4.5 5.3 1.08 -35.2 0.39 81.8 -15.7 INARI 1.38 1.18 -14.5% Sell 4,472 1.15 5.3 7.6 26.1 18.1 3.1 4.5 2.09 -34.0 0.90 53.3 -18.8 MPI 10.60 9.77 -7.8% Hold 2,108 0.93 69.0 81.3 15.4 13.0 2.5 2.7 12.96 -18.2 7.39 43.4 -7.3 N2N 0.64 0.65 2.4% Buy 380 1.42 2.5 3.1 25.0 20.3 3.1 3.1 0.86 -26.4 0.34 85.0 -9.4 SKPRES 1.14 1.23 7.9% Buy 1,688 1.68 8.0 11.0 14.3 10.4 3.5 4.8 1.59 -28.3 0.66 72.7 -16.2 UNISEM 2.00 2.21 10.5% Buy 1,454 0.92 11.6 15.9 17.2 12.6 4.0 5.0 2.93 -31.7 1.53 30.7 -7.4

TRANSPORTATION Airlines AIRASIA 0.78 0.79 1.9% Sell 2,590 1.73 -38.5 9.9 na 7.9 0.0 0.0 2.15 -64.0 0.50 55.0 -54.4 AIRPORT 4.90 8.06 64.5% Buy 8,130 1.06 -13.9 25.3 na 19.3 0.0 2.0 8.88 -44.8 3.92 25.0 -35.5 Freight & Tankers PTRANS 0.19 0.27 42.1% Buy 270 1.29 1.3 3.3 14.2 5.8 4.2 5.2 0.27 -29.6 0.13 52.0 -19.1 TNLOGIS 0.40 0.57 42.5% Buy 179 0.84 2.3 1.4 17.5 28.1 0.0 0.0 0.60 -33.3 0.26 53.8 -20.8 WPRTS 3.66 3.55 -3.0% Sell 12,481 0.63 14.6 14.4 25.0 25.4 3.0 2.9 4.54 -19.4 2.97 23.2 -13.1

SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE

Company Share Price Target Price Market Cap. EPS (cent) PER (X) Div Yield (%) 52week 52week % Chg % upside Recom Beta (S$) (S$) (S$m) FY20 FY21 FY20 FY21 FY20 FY21 High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 20.00 21.10 5.5% Sell 50,781 1.14 188.0 194.1 10.6 10.3 5.0 5.0 27.04 -26.0 16.65 20.1 -22.7 OCBC 8.94 9.40 5.1% Hold 39,290 1.05 91.2 93.9 9.8 9.5 4.0 4.0 11.82 -24.4 7.80 14.6 -18.6 UOB 20.07 22.60 12.6% Buy 33,476 1.10 188.8 201.4 10.6 10.0 5.0 5.0 27.02 -25.7 17.28 16.1 -24.0

PLANTATIONS WILMAR 3.54 4.53 28.0% Buy 22,651 0.93 26.5 26.3 12.9 12.9 3.5 3.1 4.38 -19.2 2.83 25.1 -14.1

BUY : Total return within the next 12 months exceeds required rate of return by 5%-point. HOLD : Total return within the next 12 months exceeds required rate of return by between 0-5%-point. SELL : Total return is lower than the required rate of return.

Total Return is defined as expected share price appreciation plus gross dividend over the next 12 months. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting. Required Rate of Return of 7% is defined as the yield for one-year Malaysian government treasury plus assumed equity risk premium.