Monday, April 23, 2018 FBMKLCI: 1, 887.75

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 Could Undergo Healthy Consolidation The FTSE Bursa Kuala Lumpur Composite Index (FBM KLCI) managed to push above 1,880 to challenge record highs last week, largely helped by a surge in heavyweight oil & gas counters as global oil markets firmed following top OPEC member Saudi Arabia’s outlook that prices may top USD100 a barrel, and fears the US may re-impose trade sanctions on Iran next month. However, profit-taking interest on small caps forced a pullback on Friday, given the absence of follow-through buying momentum ahead of the weekend.

For the week, the local benchmark advanced another 19.28 points, or 1.03 percent to 1,887.75, with Dagangan (+RM2.12), Petronas Gas (+58sen), PPB Group (+52sen), (+50sen) and HLFG (+38sen) dominating gains. Average daily traded volume and value retraced to 2.61 billion shares and RM2.33 billion last week, compared to the 3.32 billion shares and RM2.51 billion average respectively the previous week.

At 1,896.03, the FBMKLCI almost surpassed the all-time high of 1896.23 last week before retreating. Although momentum indicators are showing profit taking bias in the immediate term, the healthy consolidation is necessary for the benchmark index to trend higher, especially immediately succeeding the 14 th GE, presuming there is no change in the power base. A jubilant mood could easily cause the 1,900 barrier to be broken before testing 1,950 level. Continued up trend in crude oil prices could solidify the positive trend due to its contribution in reducing budget deficit and its high correlation with ringgit’s strength.

A decision by the US to repeal the waiver on Iran’s oil sanction when it expires on 12 May will be a strong catalyst for the crude oil to break pass the USD80 per barrel level as that will affect at least a quarter of the estimated 2.5 million barrels per day that is shipped in February 2018 versus average 2.1 million barrels per day in 2017. About 62% of the 777 million barrels of crude that it shipped in 2017 went to buyers in Asia (mainly and India) and the rest to Europe. It currently produces around 3.8 million barrels per day and is hoping to increase it to 4.7 million barrels per day by 2022.

Despite these short-term drivers, stretched valuation may emerge as potential setback post- 14 th GE rally. As it is, FBMKLCI is trading at a consensus calendar year 2019 price-to- earnings ratio of 15.7x versus regions’ 14.8x ( 14.7x, Indonesia 14.5x and Philippines 15.1x) and has outperformed all regional markets year-to-date. Thus, foreign funds could be tempted to sell and shift to undervalued regional markets post 14 th GE rally. Besides, a check on ringgit’s performance post last four general elections since 1990 (excluding 1999 and 2004 when the ringgit was pegged) generally showed weakness, which vindicates foreign liquidation pressure.

Besides that, concerns about trade war could return strongly post-election. The United States’ decision last week to impose a ban on American companies selling parts and software to ZTE for seven years caused a furore in China. China’s swift retaliation by requiring America’s Qualcomm Inc. to reapply for approval for its acquisition of Netherland’s NXP Semiconductors NV reassures investors that the trade war is here to stay. So far, Qualcomm has received approval from eight of nine required global regulators to finalise the acquisition. China’s clearance is the only one pending. Conditions can turn ugly in the not so distant future, potentially in June. This is after the expiry of 60 days public consultations period for the US to impose higher tariff on USD150 billion worth of imports from China. Hopefully, both economic superpowers start to engage on negotiations prior to that, which can delay the implementation time frame or mellow down the current hard stance.

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23-Apr-18

Economic data wise, the advance estimate of US first quarter GDP is due this Friday. Actual annual rate of growth could come in lower than consensus forecast of 2.1% and fourth quarter 2017’s 2.9% due to softer private consumption, private investment and exports. However, based on historical data, a weaker performance in the quarter is a norm before a much stronger growth in the following quarter. As such, a weaker data not necessarily points to dovish expectations about the future, especially from the Fed.

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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23-Apr-18

News In Brief Corporate

Malayan Banking Berhad obtained approval from Bank Negara Malaysia to acquire Permodalan Nasional Bhd’s fund management firms, namely Amanah Mutual Bhd and Singapore Unit Trusts Ltd, for RM51mn cash. (The Edge)

Yinson Holdings Bhd and Japan's Sumitomo Corp plan to jointly pursue and collaborate in the leasing and operation of floating production storage and offloading and floating storage and offloading projects worldwide. Both companies have entered into a 10-year, binding Memorandum of Understanding for the purpose. Separately, Yinson said Sumitomo has participated in 26% equity in Yinson Production (West Africa) Pte Ltd through a Japanese consortium which is nearing completion. (Bursa Malaysia)

UMW Holdings Bhd’s RM2bn perpetual sukuk was rated A1 by RAM Ratings Services Bhd, thanks to an improvement in its operating performance and financial profile. The ratings agency also reaffirmed its AA2 rating on the group’s RM2bn Islamic MTN programme. (The Edge)

Top Glove Corp Bhd is proposing a 1-for-1 bonus issue involving up to 1.3bn new shares to reward shareholders. The group also plans to issue up to USD300mn worth of bonds to repay Top Glove's bank borrowings. (Bursa Malaysia)

Comment: We view the exercise positively as the bonus issue will further increase trading liquidity. Meanwhile, we see the bond sale as a replacement for the USD310mn loan it recently took. This gives Top Glove more time to repay the loans along with lower interest rate. Maintain buy on Top Glove with an unchanged TP of RM12.20/share.

AMMB Holdings Bhd confirmed that it settled its civil suit with Alliance Bank Malaysia Bhd for the alleged misappropriation of sensitive information via the latter's ex- employees. The suit was reported to have named key personnel within AmBank Group's business banking division, and brought into question the near-term direction of the up-and- coming unit that was slated to spearhead the bank's growth in the coming years. (The Edge)

Tek Seng Holdings Bhd is appealing against a March 22 court decision requiring its wholly-owned subsidiary Wangsaga Industries Sdn Bhd to pay Bhd RM5.1mn in arrears. (Bursa Malaysia)

Sinotop Holdings Bhd plans to purchase between 60% and up to the entire equity stake in Asianmax Corp Sdn Bhd, a construction unit controlled by its major shareholder Datuk Justin Soo, for as much as RM165mn. It inked a binding term sheet with Soo “to explore and negotiate further” with Soo for the stake buy. (Bursa Malaysia)

Daya Materials Bhd is in discussions with many parties, including Siem Offshore Rederi AS, to formulate a plan to regularise its financial condition. As at the date of this announcement, it has not entered into any agreement with any party in relation to the regularisation plan. The statement was issued in response to a local daily's report that Siem Offshore Rederi would emerge as Daya Material's largest shareholder with more than a 20% stake if the latter can undertake the successful implementation of a regularisation plan. (Bursa Malaysia)

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Sona Petroleum Bhd announced that it will be distributing the remaining monies held in its cash trust account on April 30, 2018. The amount to be distributed will be a cash equivalent of 1.15 sen for every share held in the company. Sona failed to convince shareholders of the viability of the USD25mn (RM100.8mn) Stag Oilfield acquisition in Australia. (Bursa Malaysia)

CIMB Thai Bank Public Co Ltd, a 94.11% subsidiary of CIMB Group Bhd , saw net profit for its 1QFY18 rise 39.3% YoY to THB168.9mn from THB121.2mn. CIMB Thai attributed its earnings to an 8.1% growth in operating income and a 4.5% drop in provisions, offset by 10.6% increase in operating expenses. (The Edge)

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23-Apr-18

News In Brief Economy

Asia Malaysia’s Forex Reserves Rise to US$110bil, Highest Since March 2015 Bank Negara foreign exchange reserves rose US$2.2 during the first two weeks of April to US$110bil, its highest level in three years. The reserves position was sufficient to finance 7.7 months of retained imports and was 1.1 times the short-term external debt. The main components of the international reserves were foreign currency reserves (US$103.2bil), International Monetary Fund reserves position (US$800mil), special drawing rights (US$1.2bil), gold (US$1.6bil) and other reserve assets (US$3.2bil). (The Star)

Japan's March Inflation Dip Doesn't Signal Reversal of Trend While Japan’s key price gauge ticked down in March, the inflation trend remains intact as Bank of Japan Governor Haruhiko Kuroda begins his second term. Consumer prices excluding fresh food rose 0.9% in March from a year earlier, versus a 1% rise in February. The result was expected by economists surveyed by Bloomberg. Japanese Inflation Slips as Kuroda Begins New Term at BOJ. The latest reading heralds a soft patch but not a reversal of the price trend. Although it’s far from the BOJ’s 2% target, inflation excluding fresh food will be anchored above 1% over the coming months. Some further softness is likely in the months ahead, as the yen’s recent appreciation starts taking hold from May or June, slowing the rise in food prices. Food and energy prices are supporting CPI right now, adding that the BOJ will have no choice but to keep delaying its projected timing for reaching 2%. In fact, stabilizing core inflation above 1 percent will be a challenge, he said. (Bloomberg)

Japan's Tertiary Activity Index Unchanged In February Japan's tertiary industry activity showed no variations in February, in line with expectations, data from the Ministry of Economy, Trade and Industry showed Friday. On a monthly basis, the tertiary industry activity index remained flat in February after a 0.4 percent decrease in January. Among the individual components of the survey, activity was up for transportation industry, postal service, finance industry, insurance industry, business related services, medical care, electricity, gas, heat supply, water supply industry, retail trade and item rental business. Meanwhile, activity was down for wholesale trade, information and communication industry, real estate business and lifestyle-related services. On a yearly basis, the tertiary activity index rose at a slower rate of 0.8 percent in February, following a 1.4 percent gain in January. (RTT)

United States White House Sets Aside Skepticism, Backs Funding Increase for World Bank The Trump administration is backing a $13 billion increase in funding for the World Bank, putting aside its skepticism of the big government-backed institutions that manage the global economy, in part because it wants the World Bank as a counterweight to China’s growing international influence. The change, which will allow the bank to increase lending to poor-country clients, comes after what European and other officials described as difficult negotiations over tough terms demanded by the U.S. One official described the agreement as “touch and go,” and many doubted it would happen. U.S. Treasury Secretary Steven Mnuchin said Saturday that the increase in funding would allow the World Bank to shift resources to poorer borrowers and away from countries better able to finance their own development objectives. “There are reforms that they’re making that we think are quite significant along with the increased funding request,” Mr. Mnuchin told a news conference. The capital boost could help make it a stronger counterweight to Chinese-lending, including from the Beijing-led Asian Infrastructure Investment Bank, which is growing rapidly. President Donald Trump has repeatedly signaled a suspicion of multilateral institutions and initiatives, including the World Trade Organization which attempts to settle disputes in global trade. (WSJ)

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Steel Tariffs Likely to Lead to U.S. Job Losses U.S. tariffs on steel imports are likely to cost the American economy jobs. Although it is difficult to say exactly how many jobs will be affected, given the history of protecting industries with import tariffs, it can be conclude that the 25% steel tariff is likely to cost more jobs than it saves. The new tariffs are likely to lead to a net loss in U.S. , at least in the short to medium run. The Trump administration in March launched global tariffs on steel and aluminum, although imports from some countries have been exempted. The administration has threatened other protectionist moves as well, including tariffs on $150 billion worth of Chinese imports. The New York Fed economists sought to take stock of how the new steel tariffs could affect hiring and firing in the U.S. Many economists have said the tariffs won’t have much of a positive impact for the U.S., and the Fed post bolsters that view. While U.S. steel output has been “fairly stable” over a long period, employment in the sector has been in a long-running decline as workers have become more productive. (WSJ)

Europe and United Germany PPI Inflation Accelerates Slightly In March Kingdom Germany's producer price inflation accelerated for the first time in six months in March, though marginally, figures from Destatis showed. Producer price inflation rose to 1.9% in March from February's 14-month low of 1.8%. The rate was forecast to increase to 2.0%. Excluding energy, producer prices were 1.7% higher than last year and they gained 0.1% from the previous month. Intermediate goods were 2.3% more expensive in March than a year ago. The price index for energy grew 2.4% and those of consumer goods climbed by 1.4%. On a monthly basis, producer prices edged up 0.1% from February, when it dropped by 0.1%. Prices were expected to rise by 0.2%. (RTT)

Commodity OPEC and Russia Back Continued Oil Cuts, Drawing Trump Ire A group of some of the world’s biggest crude producers said they would keep a tight grip on output for the rest of the year, and perhaps into next, capitalizing on the success so far of a risky bet they made 18 months ago to throttle back and lift oil prices. Senior officials from OPEC, Russia and other big producers gathered and said they were happy with a deal they put in place to 2016 to limit production and erase what was then a large glut of stored oil sloshing around the world. As the meeting ended, President Donald Trump weighed in via Twitter, appearing to respond to comments telegraphed from officials here in which they applauded the pact and pledged to stick with it for now. Mr. Trump in a tweet called oil prices “artificially Very High” and drew wider attention to the economic and geopolitical stakes stemming from recently climbing crude prices sparked in part by the deal. On Friday, Brent crude futures, the international benchmark, hit its highest price since November 2014, settling up 0.4% at $74.06 a barrel. The pact has largely worked: The members of the Organization of the Petroleum Exporting Countries and big non-OPEC producers, led by Russia, have stuck to eliminating 2% of the world’s production, as measured at the time. That has helped erase the glut. Amid rising demand from healthy economic growth in the U.S., Europe and Asia, the pact has also helped lift international oil prices to today’s relatively lofty levels above $70 a barrel.

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On Friday, Officials from Saudi Arabia and Russia signaled that they were happy with the results, but weren’t finished yet. Saudi Arabian Oil Minister Khalid al-Falih said “it’s not mission accomplished.” His Russian counterpart Alexander Novak said Moscow was committed to “100%” compliance related to its part of the cutbacks. He said the producers in the pact “need to extend [the] partnership” through next year. Mr. Novak had previously signaled Russia was content with today’s higher prices, leading some observers to speculate he might push to exit from the pact when it expires at the end of the year. Russian producers have pressured the Kremlin to let them open their taps. Mr. Falih signaled moderation in continuing cutbacks. He said producers that were part of the pact won’t keep cutting output “indefinitely.” And he said any new production regime next year shouldn’t “shock the market.” Mr. Falih also took aim at Mr. Trump, telling reporters at the meeting “there is no such thing as an artificial price.” (WSJ)

Share Buy-Back: 20 April 2018 Total Treasury Company Bought Back Price (RM) Hi/Lo (RM) Shares AMPROP 15,000 0.67 0.675/0.665 17,673,200 FIMACOR 30,000 1.98/1.97 1.98/1.97 4,524,900 GRANFLO 50,000 0.215/0.21 0.215/0.20 9,423,900 HAIO 10,000 4.98/4.93 5.02/4.92 9,191,588 INCKEN 15,100 0.685/0.675 0.685/0.675 17,767,600 JCBNEXT 10,000 1.65 1.65 287,100 KOMARK 68,300 0.18 0.18/0.175 7,528,000 MALAKOF 45,600 0.89 0.90/0.89 60,178,600 PRESTAR 30,000 0.88 0.88/0.86 7,807,200 RCECAP 25,000 1.38/1.36 1.40/1.36 14,315,625 SIGN 240,000 0.53/0.52 0.53/0.52 13,407,100 SNTORIA 50,000 0.625/0.615 0.625/0.615 8,000,800 SUNWAY 750,000 1.57/1.55 1.58/1.55 47,226,462 SYSCORP 173,000 0.25/0.245 0.25/0.24 5,051,800 TEXCYCL 30,000 0.67 0.67/0.65 1,920,950 Source: Bursa Malaysia

TA RESEARCH – Remisiers’ Briefing Topic: Weekly Market Outlook Speaker: Mr.Kaladher/ Mr.Stephen Soo Venue: Level 8, Ex-Food Court, Menara TA One Date: 23 April 2018 (Monday) Time: 12.40pm

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) FY18 FY19 FY18 FY19 FY18 FY19 High Price % Chg Low Price % Chg YTD 20-Apr-18 AUTOMOBILE BAUTO 2.24 2.33 4.0% Buy 2,597 0.55 12.1 19.0 18.5 11.8 4.9 5.1 2.47 -9.3 1.84 21.7 1.8 MBMR 2.45 2.68 9.4% Hold 958 0.70 24.7 26.9 9.9 9.1 2.4 2.9 2.60 -5.8 2.01 21.9 11.4 PECCA 1.15 1.62 40.9% Buy 212 0.64 9.7 10.9 11.9 10.5 4.3 4.3 1.70 -32.4 1.13 1.8 -25.8 SIME 2.80 2.55 -8.9% Sell 19,042 1.64 13.2 16.4 21.2 17.1 1.2 1.5 3.06 -8.5 2.03 38.2 26.7 UMW 6.15 5.52 -10.2% Sell 7,185 1.42 28.6 40.2 21.5 15.3 2.3 3.3 6.98 -11.9 4.70 30.9 18.3

BANKS & FINANCIAL SERVICES ABMB 4.48 4.60 2.7% Sell 6,936 1.11 32.6 35.8 13.7 12.5 3.6 3.6 4.49 -0.2 3.62 23.8 9.8 AFFIN 2.52 2.40 -4.8% Sell 4,896 0.93 22.2 23.9 11.3 10.5 3.2 3.2 2.98 -15.0 2.22 13.9 9.5 AMBANK 3.88 4.70 21.1% Buy 11,695 1.56 38.1 44.4 10.2 8.7 4.6 4.6 5.70 -31.9 3.61 7.5 -12.0 CIMB 7.30 8.60 17.8% Buy 67,346 1.57 58.2 59.9 12.5 12.2 4.0 4.1 7.39 -1.2 5.65 29.2 11.6 HLBANK 19.40 21.30 9.8% Buy 39,685 0.87 116.8 126.8 16.6 15.3 2.5 2.5 20.02 -3.1 13.72 41.4 14.1 10.72 11.50 7.3% Buy 116,978 1.01 73.8 77.9 14.5 13.8 5.1 5.1 10.72 0.0 9.10 17.8 9.4 PBBANK 24.20 27.30 12.8% Buy 93,448 0.68 153.3 166.5 15.8 14.5 2.4 2.5 24.30 -0.4 19.90 21.6 16.5 RHBBANK 5.38 6.10 13.4% Buy 21,574 1.56 54.3 59.0 9.9 9.1 2.8 2.8 5.61 -4.1 4.71 14.2 7.6 BURSA 7.50 7.04 -6.1% Buy 6,047 0.89 29.2 30.0 25.7 25.0 4.8 4.8 7.65 -2.0 6.31 18.8 11.2

BUILDING MATERIALS ANNJOO 3.00 4.34 44.7% Buy 1,605 1.25 43.5 46.3 6.9 6.5 7.2 8.3 3.98 -24.6 2.80 7.1 -22.3 CHINHIN 1.11 1.39 25.2% Buy 618 0.93 11.4 11.1 9.7 10.0 5.7 5.1 1.49 -25.5 1.00 11.6 -8.3 CSCSTEL 1.35 1.70 25.9% Buy 499 0.87 17.4 17.9 7.7 7.5 6.9 7.1 2.05 -34.0 1.27 6.3 -12.3 ENGTEX 1.01 1.38 36.6% Buy 440 0.89 13.8 15.7 7.3 6.4 4.1 5.4 1.52 -33.6 0.96 5.2 -8.2

CONSTRUCTION GADANG 0.85 1.69 100.0% Buy 559 1.35 14.2 18.1 6.0 4.7 3.6 3.6 1.37 -38.3 0.80 5.6 -23.9 GAMUDA 5.11 5.84 14.3% Buy 12,572 0.84 34.4 36.4 14.8 14.0 2.3 2.3 5.52 -7.4 4.58 11.6 3.0 IJM 2.75 2.96 7.6% Hold 9,976 1.40 13.7 18.6 20.0 14.8 3.5 3.5 3.60 -23.6 2.53 8.7 -9.8 KAB 0.24 0.38 59.6% Buy 8 na 31.4 37.3 0.7 0.6 4.3 5.1 0.33 -28.8 0.20 17.5 -21.7 PESONA 0.32 0.45 42.9% Buy 219 1.52 4.8 4.6 6.5 6.8 4.8 4.8 0.73 -56.8 0.30 5.0 -30.0 SENDAI 0.94 0.79 -16.0% Sell 734 1.49 9.9 8.7 9.5 10.7 1.1 1.1 1.39 -32.4 0.68 38.2 8.7 SUNCON 2.19 2.65 21.0% Hold 2,830 0.80 14.7 16.4 14.9 13.3 3.7 4.1 2.64 -17.0 1.86 17.7 -12.7 WCT 1.16 1.50 29.3% Sell 1,632 1.15 11.3 10.8 10.3 10.7 2.6 2.6 2.48 -53.1 1.13 2.7 -28.4 LITRAK 5.69 6.26 10.0% Hold 3,004 0.38 45.6 47.1 12.5 12.1 4.4 4.4 6.15 -7.5 5.40 5.4 2.5

CONSUMER Brewery CARLSBG 19.20 18.09 -5.8% Buy 5,906 0.71 87.8 91.8 21.9 20.9 4.5 4.6 21.00 -8.6 14.36 33.7 25.5 HEIM 20.90 21.64 3.5% Hold 6,314 0.47 93.0 101.6 22.5 20.6 3.6 3.8 23.04 -9.3 17.24 21.2 10.6 Retail AEON 2.00 1.97 -1.5% Buy 2,808 0.33 7.5 8.9 26.6 22.4 2.3 2.5 2.52 -20.6 1.45 37.9 13.6 AMWAY 7.60 8.59 13.0% Buy 1,249 0.54 48.3 49.9 15.7 15.2 5.3 5.4 8.10 -6.2 6.97 9.0 4.0 F&N 34.90 33.74 -3.3% Buy 12,792 0.54 122.7 145.8 28.4 23.9 2.3 2.7 35.80 -2.5 23.40 49.1 29.3 HUPSENG 1.09 1.25 14.7% Buy 872 0.41 5.7 5.9 19.1 18.4 5.5 5.5 1.28 -14.8 1.02 6.9 0.0 JOHOTIN 0.96 1.48 54.2% Buy 298 1.18 11.1 11.7 8.6 8.2 6.3 6.8 1.76 -45.5 0.90 6.7 -20.7 NESTLE 148.00 129.90 -12.2% Sell 34,706 0.58 322.2 360.2 45.9 41.1 2.0 2.2 163.00 -9.2 81.00 82.7 43.4 PADINI 4.64 4.67 0.6% Sell 3,053 0.83 28.0 30.4 16.6 15.3 2.7 2.8 5.50 -15.6 3.10 49.8 -12.1 POHUAT 1.24 1.78 43.5% Buy 273 0.54 20.1 23.1 6.2 5.4 4.8 6.5 2.07 -40.1 1.15 7.8 -30.7 QL 5.14 5.41 5.3% Hold 8,339 0.67 13.3 15.5 38.5 33.1 0.9 0.9 5.24 -1.9 3.54 45.3 18.2 SIGN 0.53 0.92 73.6% Buy 120 0.88 6.6 8.7 8.0 6.1 4.7 6.6 1.07 -50.5 0.48 10.4 -24.8 Tobacco BAT 24.86 34.72 39.7% Buy 7,098 1.31 170.8 168.8 14.6 14.7 6.4 6.4 46.48 -46.5 22.62 9.9 -37.9

GAMING Casino GENTING 8.86 11.58 30.7% Buy 33,948 1.37 55.1 61.8 16.1 14.3 1.8 1.8 9.92 -10.7 8.47 4.6 -2.9 GENM 5.17 6.68 29.2% Buy 29,255 1.49 27.6 32.0 18.8 16.2 2.3 2.5 6.28 -17.7 4.59 12.6 -6.7 NFO BJTOTO 2.10 3.22 53.3% Buy 2,829 0.56 19.9 26.0 10.6 8.1 7.6 8.6 2.84 -26.1 2.06 1.9 -6.3

HEALTHCARE Hospitals/ Pharmaceutical CCMDBIO 2.86 3.40 18.9% Buy 798 0.85 16.2 17.7 17.6 16.1 1.6 1.7 3.05 -6.2 1.97 45.2 13.0 IHH 6.12 6.40 4.6% Sell 50,426 0.69 11.9 15.0 51.5 40.9 0.5 0.6 6.33 -3.3 5.42 12.9 4.4 KPJ 0.88 1.13 29.1% Buy 3,687 0.68 3.9 4.3 22.4 20.1 2.5 2.8 1.14 -23.2 0.84 4.2 -9.8 Rubber Gloves HARTA 6.30 7.80 23.8% Sell 20,865 0.97 12.6 14.4 50.1 43.7 1.2 1.4 6.64 -5.1 2.45 157.7 18.0 KOSSAN 7.13 9.73 36.5% Buy 4,559 0.48 37.4 42.1 19.1 17.0 2.6 2.9 8.79 -18.9 5.62 26.9 -12.1 SUPERMX 2.92 2.70 -7.5% Buy 1,915 0.57 20.0 22.6 14.6 12.9 1.8 2.1 3.01 -3.0 1.69 72.8 46.0 TOPGLOV 10.00 12.20 22.0% Buy 12,768 0.52 35.3 42.7 28.3 23.4 1.4 1.7 10.44 -4.2 4.56 119.3 25.2 KAREX 0.79 0.93 18.5% Sell 787 0.81 1.8 3.0 44.3 25.9 0.6 1.0 2.26 -65.3 0.75 4.7 -39.6

INDUSTRIAL SCIENTX 7.70 10.01 30.0% Buy 3,765 0.95 67.5 79.4 11.4 9.7 2.7 3.4 9.85 -21.8 7.45 3.4 -11.1 SKPRES 1.43 2.00 39.9% Buy 1,788 0.93 10.4 13.1 13.8 10.9 3.6 4.5 2.35 -39.1 1.25 14.4 -37.3

MEDIA ASTRO 1.94 2.90 49.5% Buy 10,115 0.96 12.4 13.8 15.6 14.0 6.4 6.4 2.94 -34.0 1.75 10.9 -26.8 MEDIA PRIMA 0.32 0.45 40.6% Sell 355 1.38 -3.8 -1.7 na na 0.0 0.0 1.20 -73.3 0.32 1.6 -57.9 STAR 1.08 1.20 11.1% Sell 797 1.16 6.2 5.9 17.4 18.2 8.3 8.3 2.22 -51.3 1.06 1.9 -34.5

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) FY18 FY19 FY18 FY19 FY18 FY19 High Price % Chg Low Price % Chg YTD

OIL & GAS DNEX 0.40 0.69 74.7% Buy 694 1.93 4.0 4.3 9.9 9.2 2.5 2.5 0.69 -42.8 0.34 17.9 -18.6 LCTITAN 6.33 7.60 20.1% Buy 14,388 na 56.3 60.9 11.2 10.4 3.9 4.3 6.53 -3.1 4.14 52.9 34.7 MHB 0.80 0.81 1.3% Sell 1,280 1.42 0.5 1.7 166.6 48.0 0.0 0.0 1.03 -22.3 0.63 28.0 -3.0 MISC 7.20 7.00 -2.8% Sell 32,139 1.05 50.1 53.8 14.4 13.4 4.2 4.2 7.90 -8.9 6.73 7.0 -3.0 PANTECH 0.58 0.78 35.7% Buy 428 1.43 6.2 6.9 9.3 8.3 4.9 5.3 0.74 -22.3 0.51 12.7 -10.9 PCHEM 8.48 9.00 6.1% Hold 67,840 0.89 52.5 54.0 16.2 15.7 3.1 3.3 8.61 -1.5 6.80 24.7 10.1 SAPNRG 0.76 0.84 11.3% Buy 4,524 2.84 -5.0 -1.7 na na 0.0 0.0 2.02 -62.6 0.40 91.1 6.3 SERBADK 3.38 4.15 22.8% Buy 4,964 na 27.7 31.6 12.2 10.7 2.7 3.0 3.68 -8.2 1.79 88.8 4.3 UMWOG 0.29 0.39 34.5% Buy 2,383 2.54 0.4 1.2 75.9 25.0 0.0 0.0 0.68 -57.3 0.22 34.9 -4.9 UZMA 1.42 1.57 10.6% Hold 454 1.26 12.9 13.9 11.0 10.2 0.0 0.0 1.90 -25.3 1.18 20.3 10.9

PLANTATIONS FGV 1.72 2.09 21.5% Buy 6,275 1.67 2.0 3.4 85.1 50.5 2.9 2.9 2.18 -21.1 1.51 13.9 1.8 IJMPLNT 2.37 2.23 -5.9% Sell 2,087 0.21 6.5 8.2 36.2 28.9 3.4 3.8 3.22 -26.4 2.19 8.2 -13.5 IOICORP 4.78 5.43 13.6% Buy 29,188 0.95 19.0 21.3 25.1 22.5 5.5 3.5 4.81 -0.6 4.21 13.7 7.9 KFIMA 1.46 1.89 29.5% Buy 411 0.73 13.7 13.8 10.7 10.6 6.2 6.2 1.96 -25.5 1.44 1.4 -7.0 KLK 25.50 27.76 8.9% Hold 27,157 0.65 107.6 116.0 23.7 22.0 2.1 2.2 25.98 -1.8 23.80 7.1 2.0 SIMEPLT 5.52 6.27 13.6% Hold 37,541 na 19.6 20.0 28.2 27.7 2.5 2.9 6.00 -8.0 4.58 20.5 -8.0 TSH 1.35 1.81 34.1% Buy 1,864 0.46 9.3 9.6 14.5 14.1 1.8 1.8 1.82 -25.8 1.35 0.0 -18.2 UMCCA 6.10 6.21 1.8% Sell 1,279 0.39 17.0 22.4 36.0 27.3 2.6 3.0 7.08 -13.8 5.97 2.1 -6.3

PROPERTY GLOMAC 0.50 0.40 -20.0% Sell 397 0.66 1.5 2.5 33.1 20.2 2.0 2.0 0.66 -23.6 0.45 11.1 -9.8 HUAYANG 0.47 0.58 24.7% Sell 164 0.94 0.7 3.4 70.1 13.7 1.1 1.1 1.14 -59.2 0.44 5.7 -23.8 IBRACO 0.62 0.80 29.0% Buy 308 na 7.2 10.7 8.6 5.8 4.8 6.5 0.93 -33.0 0.50 24.0 -23.9 IOIPG 1.58 1.92 21.5% Buy 8,700 0.97 14.9 14.7 10.6 10.8 3.8 3.8 2.22 -28.8 1.50 5.3 -14.6 MAHSING 1.06 1.59 50.0% Buy 2,573 0.88 11.8 11.3 9.0 9.4 6.1 6.1 1.64 -35.4 0.98 8.2 -26.9 SIMEPROP 1.40 1.51 7.9% Hold 9,521 na 7.5 7.5 18.6 18.7 2.9 2.1 1.78 -21.3 1.04 34.6 -21.3 SNTORIA 0.62 0.76 23.6% Buy 344 0.31 8.3 8.6 7.4 7.2 1.6 1.6 0.82 -24.8 0.56 9.8 -11.5 SPB 4.30 5.10 18.6% Hold 1,478 0.68 18.7 24.0 22.9 17.9 2.8 2.8 5.50 -21.8 4.14 3.9 -12.2 SPSETIA 3.10 3.73 20.3% Buy 11,641 1.07 19.8 19.4 15.7 16.0 3.9 3.9 4.38 -29.3 2.77 11.9 -22.5 SUNWAY 1.57 1.75 11.5% Hold 7,651 0.98 11.8 12.4 13.3 12.6 3.8 3.8 1.96 -19.8 1.46 7.7 -3.7 REIT SUNREIT 1.60 1.87 16.9% Hold 4,712 1.05 10.0 10.7 16.0 15.0 6.3 6.7 1.90 -15.8 1.48 8.1 -15.8 CMMT 1.18 1.48 25.4% Buy 2,408 0.90 7.9 8.4 14.9 14.1 6.9 7.3 1.83 -35.5 0.98 20.4 -35.5

POWER & UTILITIES MALAKOF 0.90 0.82 -8.4% Sell 4,421 1.04 6.7 7.2 13.5 12.3 7.8 7.8 1.27 -29.5 0.85 5.3 -8.7 PETDAG 27.60 24.08 -12.8% Sell 27,419 0.61 114.7 116.3 24.1 23.7 3.1 3.2 28.08 -1.7 20.81 32.6 14.8 PETGAS 18.60 19.46 4.6% Buy 36,804 0.88 99.3 100.0 18.7 18.6 3.7 3.8 19.80 -6.1 15.82 17.6 6.4 TENAGA 15.92 18.22 14.4% Buy 90,202 0.62 131.3 127.5 12.1 12.5 4.1 4.0 16.34 -2.6 13.72 16.0 4.3 YTLPOWR 0.92 1.16 26.1% Sell 7,295 0.94 8.5 8.7 10.9 10.5 5.4 5.4 1.50 -38.7 0.92 0.5 -28.7

TELECOMMUNICATIONS 5.45 6.50 19.3% Buy 49,319 1.61 15.9 19.4 34.2 28.0 1.5 2.9 5.82 -6.4 4.54 20.0 -0.7 DIGI 4.53 5.15 13.7% Buy 35,221 0.93 19.6 20.2 23.1 22.4 4.3 4.5 5.19 -12.7 4.36 3.9 -11.2 MAXIS 5.87 5.95 1.4% Sell 45,848 1.05 24.9 24.8 23.6 23.7 3.3 3.3 6.60 -11.1 5.30 10.8 -2.3 TM 5.50 7.20 30.9% Buy 20,669 0.64 22.8 24.9 24.1 22.1 3.7 4.1 6.69 -17.8 4.90 12.2 -12.7

TECHNOLOGY Semiconductor & Electronics ELSOFT 2.47 3.30 33.6% Buy 680 0.95 13.1 15.0 18.8 16.5 3.7 4.3 2.95 -16.3 2.10 17.6 -8.5 IRIS 0.17 0.22 29.4% Buy 420 2.48 0.0 0.3 618.0 53.7 0.0 0.0 0.25 -30.6 0.14 25.9 -8.1 INARI 1.77 2.43 37.3% Buy 5,512 0.58 9.1 10.2 19.4 17.4 5.6 6.2 2.55 -30.5 1.32 34.4 -21.9 Note: INARI proposed bonus issue shares on the basis of 1 for 2. For more detail please refer to 30.01.18 report. MPI 8.26 10.70 29.5% Buy 1,643 1.06 73.9 86.9 11.2 9.5 3.9 3.9 14.52 -43.1 8.08 2.2 -34.5 UNISEM 2.29 2.55 11.4% Hold 1,680 1.16 19.0 20.3 12.1 11.3 5.2 5.2 4.25 -46.1 2.25 1.8 -37.3

TRANSPORTATION Airlines AIRASIA 3.80 4.93 29.7% Hold 12,700 0.83 41.1 41.1 9.3 9.3 2.1 2.1 4.75 -20.0 2.89 31.5 13.4 AIRPORT 9.00 8.61 -4.3% Sell 14,933 1.12 18.0 18.8 50.1 47.9 1.4 1.1 9.45 -4.8 7.25 24.1 2.4 Freight & Tankers PTRANS 0.26 0.46 80.4% Buy 323 na 2.3 3.7 11.1 6.9 2.7 4.4 0.38 -33.2 0.22 14.5 -8.9 TNLOGIS 1.10 1.45 31.8% Buy 501 0.99 10.3 10.5 10.7 10.5 4.5 4.5 1.79 -38.7 0.99 11.1 -17.9 WPRTS 3.40 4.06 19.4% Buy 11,594 0.40 15.6 20.0 21.8 17.0 1.1 1.4 4.06 -16.3 3.12 9.0 -8.1

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) FY18 FY19 FY18 FY19 FY18 FY19 High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES DBS 29.59 30.50 3.1% Buy 75,865 1.13 212.3 246.0 13.9 12.0 2.2 2.4 30.0 -1.2 18.89 56.6 19.1 OCBC 13.73 14.30 4.2% Buy 57,426 1.18 109.5 123.3 12.5 11.1 6.7 7.7 13.8 -0.4 9.61 42.9 10.8 UOB 29.69 27.80 -6.4% Hold 49,311 1.17 216.8 244.1 13.7 13.7 2.7 2.7 29.9 -0.7 21.41 38.7 12.2

PLANTATIONS WILMAR 3.21 3.50 9.0% Buy 20,539 0.89 25.4 27.7 12.6 11.6 3.1 3.4 3.9 -17.1 2.97 8.1 3.9 IFAR 0.32 0.37 15.6% Buy 459 1.06 3.1 3.9 10.5 8.3 1.3 1.7 0.5 -37.9 0.32 1.6 -17.9

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.