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

Monday, August 16, 2021 FBMKLCI: 1, 505 .11

THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* WWeeeekkllyy SSttrraatteeggyy

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

Market View Market Recovery Pending on the Outcome of PM’s Audience with the King The local blue -chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) staged mild rebound during last week’s Awal Muharram holiday shortened trading, as the relaxation of some restrictions for the fully vaccinated population helped improve economic recovery hopes. Keen bargain hunting interest in key rubber glove stocks lifted the healthcare sector up by 1.5 percent post Awal Muharram, but persistent uncertainties on the domestic politics front and the challenging local Covid situation continued to bog down sentiment.

Week-on-week, the FBM KLCI gained 15.31 points, or 1.03 percent to 1,505.11, with gains in Hartalega (+50sen), Press Metal Holdings (+12sen), KLK (+90sen) and Maybank (+7sen) offsetting falls in Sime Darby (-3sen) and Petronas Chemicals (-3sen). Average daily traded volume and value last week slowed to 3.82 billion shares and RM2.41 billion, respectively, compared to the 4.04 billion shares and RM2.51 billion average the previous week, as trading participation dwindled with increased uncertainties over the domestic political landscape and challenging Covid situation bogging down trading sentiment.

As far as domestic politics is concerned, the plot thickened further on news the Prime Minister (PM) will be meeting the Yang di-Pertuan Agong again today. Investors’ anxiety has increased ever since some members of parliament (MPs) withdrew support for the PM, which raised doubts about him having majority in the parliament. This meeting with the King came hot on the heels of his recent parliamentary reform proposals to all MPs and

widespread speculations that there is an increased pressure on him to call for a vote of confidence in the parliament as soon as possible. With a lot of speculations on what could transpire during this meeting and its implications on Malaysia’s political landscape, most investors, especially institutional, may prefer to continue sitting on the fence until more clarity emerges.

This may also heighten concerns about greater foreign selling but I believe most foreigners who wanted to exit because of uncertain domestic politics have already done so. Take note that the net outflow of foreign funds started in 2018, after 14 GE, and gained momentum because of the increasingly unstable domestic politics. The net outflow situation continued in 2021, amplified by rising Covid-19 cases and unwinding of US Dollar carry trades due to intense speculations about the timing of US monetary policy tightening. So, don't expect major outflow because of the most recent political development.

In fact, any positive outcome that ends the current political turmoil and leads to a stable government should be positive for the economy and the equity market. Any knee jerk selling should be a good buying opportunity with 1,450 acting as a good support level for the FBMKLCI. Long-term growth prospects for the domestic economy and equity market remain intact and investors’ appetite for equities is expected to pick up once the dust settles in the not-so-distant future. Expect better clarity in domestic politics in 2H22 as the PM has committed that the 15 th GE will be held by next July. Of course, what transpires after that Page 1 of 10

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depends on the election outcome, which is not easy to predict, but b elieve w hat happened since 2018 should provide a better understanding and basis for the rakyat to elect a stronger government in the upcoming polls.

By that time there should be a reversal in net foreign outflow as foreigners look for cheaper investments in recovering South East Asian equity markets post-Covid as they start to exit the pricy US equities. Thus, investors should view any price weakness in domestic equity market as an opportunity to go long. Banks look cheap in a monetary tightening environment, which could happen in 2H22. Same goes to property stocks that are mostly trading at an attractive CY22 P/Bk valuation of 0.2x to 0.6x for small caps and 0.3x to 0.9x for medium caps. Buy technology stocks that will continue to benefit from the new norm and chip shortages apart from recovery plays in the building materials, oil & gas and plantation sectors.

Meanwhile, the government’s decision to allow more economic activities and businesses to resume operations today in states under Phase One and Two of the National Recovery Plan should contribute positively to the economy, which contracted by a seasonally adjusted 2% quarter-on-quarter but surged 16.1% year-on-year (YoY) in the second quarter of 2021. In the absence of low base effect and strict Covid-19 containment measures biting into the current quarter’s performance, anticipate a 4.9% YoY contraction in 3Q GDP before it expands by 6.2% YoY in the final quarter due to resumption in almost all economic activities after Malaysia achieves herd immunity by end of October. This will add up to a full year growth of 3.7%.

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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 502 50 Kuala Lumpur Malaysia Tel: 603 – 2072 1277 Fax: 603 – 203 2 504 8 www.t a.com.my

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News In Brief Corporate

Maj uperak Holdings Bhd (Not Rated) has enter ed into a land swap deal to dispose of four plots of its land valued at RM100mn in Sungai Raya to the Perak State Economic Development Corporation (PKNP) in exchange for three pieces of land valued at RM140mn in Hulu Kinta. Majuperak said the difference of RM40mn will be deemed as an amount owed by the group to PKNP. Majuperak will issue a promissory note in favour of PKNP with a 12-month maturity from the completion of the agreement, it said. (Bursa Malaysia / The Edge)

Malaysia Airports Holdings Bhd (MAHB) saw further improvement in passenger volume at its airport in Turkey during July, with 3.02mn passengers versus 2.2mn in June. The improvement represents a return to pre-Covid-19 levels for the Istanbul Sabiha Gokcen International Airport, which averaged just under 3.0mn passengers each month in 2019. Meanwhile, the July passenger count in all of MAHB’s Malaysian airports rose to 261,000 from 187,000 in June. This is however 80.1% lower compared with the 1.3mn passengers registered in July last year. (Bursa Malaysia / The Edge)

NWP Holdings Bhd (Not Rated) is looking to diversify into proptech under the leadership of executive director Datuk Seri Nelson Kee, who comes with vast experience in real estate. It also plans to launch a yet-to-be-named app by the end of the year. NWP's proptech model will comprise a hybrid agency, fintech, smart homes and a one-stop solution. The hybrid agency will include lead generation from traditional and digital sources, as well as marketing and selling properties through various conventional and non- traditional methods. (Bursa Malaysia / The Edge)

Samaiden Group Bhd (Not Rated) has inked four contracts worth RM22.8mn with Malakoff Corp Bhd for the construction of rooftop solar photovoltaic systems. The construction will take place in Malakoff’s facilities in Melaka, Kedah, Shah Alam and Pahang. (Bursa Malaysia / The Edge)

Paramount Corp Bhd (Not Rated) has completed its first fintech investment by acquiring a 30% stake in Omegaxis Sdn Bhd, the holding company of Peoplender Sdn Bhd, the operator of peer-to-peer (P2P) financing platform Fundaztic. Paramount said its wholly- owned subsidiary Magna Intelligent Sdn Bhd signed an agreement with P2P Venture Sdn Bhd and Omegaxis, for the 30% stake in Omegaxis for RM13.7mn. (Bursa Malaysia / The Edge)

G Capital Bhd (GCAP) (Not Rated) has entered a memorandum of understanding with Smart Sabah Corporation Sdn Bhd to establish a framework for collaboration for business opportunities and potential business ventures. GCAP said the partnership entails the mutual intentions to explore collaboration on a green technology project reference "Projek Merancang, Merekabentuk, Membangun, Melaksana dan Menyelenggara Loji Pengeluar Tenaga Hijau Sabah (Tenaga Elektrik) 3500 MW di Pantai Timur Sabah" to be awarded by the state government of Sabah. (Bursa Malaysia / Bernama)

KIP Real Estate Investment Trust (Not Rated) plans to undertake a private placement to raise up to RM80.9mn for the group’s future acquisitions. The private placement involves an issuance of up to 101.1mn new units, representing up to 20% of the total number of 505.3mn units issued to the independent investors to be identified at a later date. (Bursa Malaysia / The Edge)

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Bursa Securities has reje cted Catcha Digital Bhd ’s (formerly known as Rev Asia Bhd) (Not Rated) proposed regularisation plan, as the regulator said the GN2 status company’s sponsor has not demonstrated the ability of the plan to comply with the ACE Market Listing Requirements. (Bursa Malaysia / The Edge)

Managepay Systems Bhd (MPay) (Not Rated) has entered into a partnership for the issuance of MPAY PanPay MasterCard Prepaid Card, MPAY Smartlink Wallet and MPAY Smartlink Online Wallet. The partners are app creator Smartlink Asia Bhd, fintech outfit Richwood Ventures Bhd, direct selling outfit Panpay Holdings Sdn Bhd, and e-commerce outfit QMIS Richwood Blacktech Sdn Bhd (collectively referred to as Smartlink). Under the agreement, Smartlink will promote the products, while MPay will provide expertise and interface to the system for management of the products. (Bursa Malaysia / The Edge)

MISC Bhd 's net profit jumped 79.9% in the second quarter ended June 30, 2021 (2QFY21) to RM538.8mn from RM299.5mn, thanks to lower impairment, and improvement in its petroleum shipping and non-shipping businesses. For the six-month period ended June 30, 2021 (6MFY21), MISC booked a cumulative net profit of RM968.6mn, against a net loss of RM857.3mn. Last year's loss was mainly due to litigation claims of RM1.1bn in 1QFY20 as well as the wider impairment. (Bursa Malaysia / The Edge)

Pentamaster Corp Bhd ’s (Not Rated) 2QFY21 net profit rose 5.5% to RM17.9mn from RM17.0mn in the same quarter last year, supported by sales growth across all segments. Leading Pentamaster’s better performance was growth in its automated test equipment division, which continued to be the major contributor to the group’s earnings. With better results in 2Q, Pentamaster saw a 0.7% growth in its 6MFY21 net profit to RM34.0mn from RM33.78mn in the previous Jan-June period. (Bursa Malaysia / The Edge)

Malaysian Bulk Carriers Bhd (Maybulk) (Not Rated) posted its second consecutive profitable quarter with a net profit of RM32.1mn in 2QFY21, supported by improved charter rates and redelivery of chartered-in vessels. On a YoY basis, Maybulk's net profit of RM32.1mn is a big swing from its net loss of RM12.7mn in 2QFY20. The latest results helped Maybulk post a 34.7% growth in its cumulative net profit for the half-year period ended June 30, 2021 to RM47.1mn from RM35.0mn a year earlier. (Bursa Malaysia / The Edge)

Careplus Group Bhd (Not Rated) posted a net profit of RM105.1mn for 2QFY21, down nearly 15% from RM123.5mn in the preceding quarter. The company attributed the drop in earnings in 2QFY21 to lower average selling prices of rubber gloves coupled with higher costs. Nonetheless, Careplus’ net profit jumped 190% YoY compared with RM36.2mn in the previous year’s corresponding quarter. For the six months ended June 30, 2021, the group’s net profit surged 512% to RM228.6mn from RM37.4mn a year earlier. (Bursa Malaysia / The Edge)

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News In Brief Economy

Malaysia Malaysia's GDP Grew 16.1% in 2Q21 The Malaysian economy grew by 16.1% year-on-year in the second quarter of 2021 (1Q21: -0.5%). Economic performance was supported mainly by the improvement in domestic demand and continued robust exports performance. The strong growth also reflected the low base from the significant decline in activity during the second quarter of 2020. Economic activity picked up at the start of the second quarter, but slowed down thereafter, following the re-imposition of stricter containment measures nationwide under Phase 1 of the Full Movement Control Order (FMCO). All economic sectors registered an improvement, particularly the manufacturing sector. On the expenditure side, growth was driven by higher private sector spending and strong trade activity. However, on a quarter-on-quarter seasonally-adjusted basis, the economy contracted by 2% (1Q21: 2.7%), due to tighter containment measures. (The Edge)

2Q GDP Growth Indicates ‘Continued Recovery’ — Finance Minister Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said the 16.1% Gross Domestic Product (GDP) growth in the second quarter of 2021 (2Q21) indicates a continued recovery trajectory after the declines recorded in the past two quarters. In a statement, he also highlighted the recovery in monthly GDP growth in April and May, at 40.1% and 19.8% respectively. “This is attributed to the low base effect during the same months in 2020. Growth was also supported by the implementation of stimulus and assistance packages throughout the period, namely PERMAI, PEMERKASA and PEMERKASA Plus valued at a total of RM75bn, and complemented by ongoing measures under Budget 2021 ,” said Tengku Zafrul.

While GDP growth in June declined by 4.4% due to the commencement of Movement Control Order (MCO) 3.0 in mid-May as well as Phase 1 of the National Recovery Plan (NRP) in early June, he said that the decline was smaller compared with April 2020. Despite the headwinds posed by the resurgence of Covid-19 cases towards the end of 2Q21, he said various key economic indicators reflected encouraging signs of recovery. These include the 1.4% increase in the Industrial Production Index in June, the 6.5% rise in the sales value of the manufacturing sector, as well as the 20.5% increase in the revenue of the services sector in 2Q21. (The Edge)

BNM Revises Down Malaysia GDP Forecast Range to Between 3% and 4% For 2021 Bank Negara Malaysia (BNM) has revised its full-year gross domestic product (GDP) growth forecast for Malaysia to between 3% and 4%, from the previous forecast of between 6% and 7.5% for 2021. BNM governor Datuk Nor Shamsiah Yunus said the revision in the annual growth forecast was made after taking into account the reimposition of nationwide containment measures. She said that several developments have emerged throughout the course of the Covid-19 pandemic since BNM announced its previous growth forecast in March, noting that the government then decided to adopt targeted and localised containment measures in dealing with resurgences. However, a nationwide Full Movement Control Order (FMCO) was undertaken in June amid the high transmission rate of the virus. The central bank expects growth to accelerate in 2022, supported by the reopening of most economic sectors, as well as positive spillovers from continued improvement in external demand. (The Edge, BNM)

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Malaysia’s Current Account Surplus Up 17 % to RM14.4b n in Q2 Malaysia’s Current Account Balance) posted a surplus of RM14.4bn in the second quarter of 2021, rising by 17.2% from RM12.3bn in 1Q21, said the Department of Statistics Malaysia (DOSM). Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the widening current account surplus was primarily driven by the favourable performance in Goods, even though the Services deficit continued to grow since 2Q20 amidst the Covid-19 outbreak. “In 2Q21, the Goods account increased by 11.1% to record a higher surplus of RM40.7bn compared to RM36.6bn in 1Q21. “The substantial performance was driven by the higher exports of goods at RM244.0bn — an increase of RM18.5bn from the previous quarter ,” he noted. Main exports were electrical and electronics (E&E), as well as petroleum and rubber-based products, principally to China, Singapore and the United States (US), he said. (Malay Mail, DOSM)

More Economic Activities Allowed in States under Phases 1 and 2 of NRP Prime Minister Tan Sri Muhyiddin Yassin announced the government has agreed to allow 11 more economic activities to be reopened in states and federal territories under the Phase 1 of the National Recovery Plan (NRP), provided that 50% of the adult population have been fully vaccinated. In a statement today, Muhyiddin said that the consumers looking to take part in the economic activities must have received full vaccination and that owners of the businesses must ensure that the customers entering their premises show the Covid-19 Vaccination Digital Certificate to prove that the individuals have indeed received full vaccination. Currently, the states and federal territories in Phase 1 of NPR include Selangor, Kuala Lumpur, Putrajaya, Johor, Negeri Sembilan and Kedah. As at Aug 14, the percentages of fully vaccinated adults in the Klang Valley (Putrajaya, Kuala Lumpur and Selangor) and Negeri Sembilan had exceeded 50% at 64.7% and 61.3% respectively. Meanwhile, Johor and Kedah were at 26.5% and 30%, according to the Covid-19 Immunisation Task Force. (The Edge)

PM Expected to Make Special Announcement, Says Bersatu Supreme Council Member Prime Minister Tan Sri Muhyiddin Yassin is expected to make a special announcement, according to Parti Pribumi Bersatu Malaysia supreme council member Datuk Seri Mohd Redzuan Md Yusof after attending a special Bersatu meeting. The meeting, chaired by Bersatu president Muhyiddin, was also attended by several other senior leaders of the party. Among those seen turning up for the two-hour meeting were deputy president Datuk Seri Ahmad Faizal Azumu and supreme council members Datuk Seri Mustapa Mohamed, Datuk Saifuddin Abdullah, Datuk Zuraida Kamaruddin, Datuk Kamarudin Jaafar, Datuk Mansor Othman, and Datuk Dr Noor Azmi Ghazali.

Apart from Bersatu leaders, Kuala Langat member of parliament (independent) Datuk Dr Xavier Jayakumar was also seen entering the meeting venue. However, efforts to get comments from the prime minister were not successful as it was discovered that he had left via a different route. Other supreme council members also refused to comment on the meeting. On Friday, Muhyiddin, in a special address, offered the opposition a framework on cross-party cooperation with the Perikatan Nasional government but it was rejected by a majority of the opposition parties. (The Edge, Bernama)

Muhyiddin Reaches Out to Rival MPs with Promise to Limit PM to Two Term Prime Minister Tan Sri Muhyiddin Yassin is seeking bipartisan support from rival members of parliament (MPs) with promises of significant reforms, including limiting the prime minister's tenure to two terms, to solve the ongoing Malaysian political

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crisis. In a nationally televised, Muhyiddin sa id he will be negotiating with leaders from parties outside the Perikatan Nasional coalition to garner their support for the motion of confidence vote on the prime minister in the upcoming parliament session. "This will enable the current government to continue to manage the pandemic until it is time for elections to be held to restore the mandate to the people. This motion of confidence vote can only be passed with bipartisan support in the Dewan Rakyat ," he said, adding that he promises to hold the next general election no later than July 2022. (The Edge, Bernama)

Asia Hong Kong GDP to Grow More Than Initially Estimated in 2021 The Hong Kong economy is forecast to grow more than previously projected this year, according to the latest Half-yearly Economic Report 2021. Considering the robust real growth outturn in the first half of the year and the support from the Consumption Voucher Scheme, the economy is forecast to grow in the range of 5.5- 6.5% this year, up from the previous outlook of 3.5-5.5%. Even if economic growth attains the upper bound of the latest range forecast, real GDP for 2021 as a whole would still be about 2% below the level in 2018, government said. In the second quarter, real GDP grew notably by revised 7.6% against a low base of comparison a year earlier, following an 8% expansion in the first quarter, the Census and Statistics Department said. The growth rate for the second quarter was revised up from 7.5%.

On a seasonally adjusted quarter-to-quarter comparison, real GDP fell moderately by 0.9% in the second quarter, mainly reflecting the high base created by the exceptionally strong performance of exports of goods in the first quarter. (RTT)

Taiwan Raises 2021 Growth Outlook Taiwan's economic growth outlook for this year was raised citing higher investment and exports, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said in its preliminary estimate published. The real economy is forecast to grow 5.88% in 2021 instead of 5.46% estimated on June 4. In 2022, the economy is expected to expand 3.69%. According to DGBAS, manufacturing activities were almost unaffected by the temporary suspension of factories amid the pandemic. Exports of goods and services are forecast to grow 17.93% in 2021. Real private consumption is seen rising 1.36%, mainly owing to the impact of local pandemic on spending. Private fixed capital formation is expected to rise 11.89% this year. In the second quarter of 2021, real gross domestic product increased 7.43% year-on-year, following a revised to 9.27% rise in the first quarter. (RTT)

United States Consumer Sentiment in U.S. Plunges to Lowest Since 2011 U.S. consumer sentiment fell in early August to the lowest level in nearly a decade as Americans grew more concerned about the economy’s prospects, inflation and the recent surge in coronavirus cases. The University of Michigan’s preliminary sentiment index fell by 11 points to 70.2, the lowest since December 2011, data released Friday showed. The figure fell well short of all estimates in a Bloomberg survey of economists. The slump in confidence risks a more pronounced slowing in economic growth in coming months should consumers rein in spending. The recent deterioration in sentiment highlights how rising prices and concerns about the delta variant’s potential impact on the economy are weighing on Americans. “Consumers have correctly reasoned that the economy’s performance will be diminished over the next several months, but the extraordinary surge in negative economic assessments also reflects an emotional response, mainly from dashed hopes that the pandemic would soon end ,” Richard Curtin, director of the survey, said in the report. The expectations gauge plummeted almost 14 points to 65.2, the lowest since October 2013. A measure of consumers’ outlook for the

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16-Aug-21 economy over the coming year soured, falling the most since the onset of the pandemic in March 2020.

Only 36% of respondents expect a decline in the jobless rate, down from 52% the prior month, despite record job openings. Consumers also became decidedly downbeat about their income prospects. The gauge of expected personal finances fell to a seven-year low. The Michigan sentiment index has largely underperformed the Conference Board’s gauge of consumer sentiment in recent months. While in general the Conference Board’s measure places a greater emphasis on views of the labor market, the Michigan survey tends to reflect respondents’ views about their personal financial situations. (Bloomberg)

U.S. Import Price Increases Slow in July U.S. import prices increased less than expected in July, a sign that inflation pressures may have peaked as supply chain bottlenecks that have impacted the U.S. economy start to wane. Import prices rose 0.3% last month after jumping 1.1% in June, the Labor Department said on Friday. The ninth straight monthly gain left the year-on-year increase at 10.2% compared to 11.3% the prior month but it was the lowest monthly increase since November last year. Economists polled by Reuters had forecast import prices, which exclude tariffs, increasing 0.6%. The government reported earlier this week that consumer prices moderated in July even as they remained at a 13-year high on an annual basis, while producer prices posted their largest annual increase in more than a decade.

Rising COVID-19 vaccinations, low interest rates and nearly $6 trillion in government aid since the beginning of the pandemic are fueling demand at the same time as higher commodity costs, low inventories and a global shipping container crisis are straining the supply chain. Imported fuel prices advanced 2.9% last month after rising 5.5% in June. Petroleum prices gained 2.1%, while the cost of imported food increased 0.3%. Excluding fuel and food, import prices edged down 0.1%. These so-called core import prices rose 0.6% in June. (Reuters)

Biden to Unveil Biggest-Ever Increase in Food-Stamp Benefits The Biden administration plans to announce the biggest long-term increase in food stamp benefits in the program’s history, giving Americans more money to buy groceries and adding billions of dollars in costs to the government. Average benefits in October will go up by more than 25% from pre-pandemic levels for the 42mn people in the program, a U.S. official said, speaking on condition of anonymity before an announcement planned for Monday. The increase means that average monthly benefits will rise $36 per person from $121, according to the official. The New York Times earlier reported the planned change.

President Joe Biden has been seeking to increase government assistance to low- and middle-income Americans amid a pandemic in which many lost their jobs. Republicans have said Biden’s economic plan is fueling inflation and serves as a disincentive for people to work. The move on food stamps is a reversal from the Trump administration, which tried to limit eligibility for food aid, though the proposed restrictions were overturned by courts. Food stamps, formally known as the Supplemental Nutritional Assistance Program, once enjoyed broad bipartisan support. They’ve evolved into a partisan flashpoint in recent years, as conservatives fought to shrink the program. House Republicans tried to impose cuts in 2013 and 2018, the last two times the program was reauthorized as part of the five-year Farm Bill. (Bloomberg)

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Eurozone & United EU Exports to Britain Rise in June as They Fall to Rest of the World Kingdom European Union (EU) exports to Britain rose in June after a volatile start to the country's first year outside the single market, while the bloc's exports to the rest of the world dropped slightly in the same month. The EU statistics office Eurostat said seasonally adjusted exports to Britain increased by 4.7% in June on the month, whereas imports from the UK were " nearly unchanged " and the bloc's exports to other countries dropped 0.6%. The month-on-month rise in exports to Britain followed a plunge, surge and second drop earlier this year, which were also recorded in imports, as firms adapted to new trade requirements after Brexit. The EU's trade with the rest of the world has remained largely stable in the first half of the year. Seasonally-adjusted exports to Britain remained below the levels of the last months of 2020 in June but were higher than June 2020 when COVID restrictions were stricter, Eurostat figures showed.

On the year, non-adjusted figures showed that the 27-country bloc recorded a 22.3% increase in exports in June for a total volume of EUR188.3bn ($221.1bn), and a 29.6% rise in imports resulting in a trade surplus of EUR14.8bn, down from EUR20bn in June 2020. The smaller Eurozone, which comprises 19 of the 27 EU members, recorded a nearly 22% increase of exports and a rise of almost 17% in imports on the month which resulted in a EUR18.1bn surplus in June from EUR7.5bn in May. In June 2020, the Eurozone surplus was EUR20bn. (Reuters)

Germany Wholesale Price Inflation Highest Since 1974 Germany's wholesale prices increased at the fastest pace since 1974, largely due the low base effect, data published by Destatis showed. Wholesale prices grew 11.3% on a yearly basis in July, following a 10.7% rise in June. Prices have been rising since February 2021. The latest rise was the biggest annual rate since October 1974, when prices were up 13.2% amid the first oil crisis. Month-on-month, wholesale price inflation eased to 1.1% in July from 1.5% in June. There were sharp annual increases in the wholesale prices of ores, metals and semi-finished products and wholesale prices of used and residual materials in July. (RTT)

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News In Brief Share Buy-Back

Share Buy-Back: 13 August 2021 Total Treasury Company Bought Back Price (RM) Hi/Lo (RM) Shares BKAWAN 10,800 20.00/19.50 20.10/19.50 4,478,200 COASTAL 11,000 0.73 0.73 12,463,500 COCOLND 15,700 1.84/1.83 1.85/1.83 3,609,000 DSONIC 280,000 0.45 0.455/0.445 83,255,000 FIMACOR 10,000 2.02/2.01 2.03/2.01 7,578,800 IGBB 95,400 1.91 1.93/1.91 7,707,617 IOICORP 343,100 3.70/3.67 3.74/3.65 52,321,400 KFIMA 9,500 2.07/2.06 2.09/2.06 5,112,100 KLK 27,700 19.30/19.28 20.18/19.28 3,080,784 KLUANG 9,300 3.70 3.78/3.70 549,100 KPPROP 95,000 0.79/0.98 0.79/0.97 1,981,900 MYEG 1,000,000 1.65 1.68/1.64 88,001,500 RANHILL 522,000 0.655/0.605 0.655/0.595 5,939,763 Source: Bursa Malaysia

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Disclaimer

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 Mal ays ia Tel: 603 – 2072 1277 Fa x: 6 03 – 203 2 504 8 www.ta.com.my

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For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE

No. Company Share Price Target Price Market Cap. EPS (sen) PER (X) Div Yield (%) 52weeks 52weeks % Chg % upside Recom Beta (RM) (RM) (RMm) FY21 FY22 FY21 FY22 FY21 FY22 High Price % Chg Low Price % Chg YTD 13-Aug-21 AUTOMOTIVE 1 BAUTO 1.51 1.70 12.6% Buy 1,754 1.18 11.5 12.0 13.1 12.6 4.3 4.8 1.62 -6.9 1.11 36.4 5.4 2 MBMR 3.06 4.43 44.8% Buy 1,196 1.20 48.4 49.2 6.3 6.2 7.2 7.2 3.73 -18.0 2.58 18.6 -9.7 3 PECCA 3.20 2.50 -21.9% Sell 587 0.97 14.2 15.7 22.5 20.4 3.1 3.1 4.73 -32.3 0.96 233.3 106.1 4 SIME 2.11 2.92 38.4% Buy 14,353 0.78 17.5 17.9 12.1 11.8 5.8 5.9 2.54 -16.8 2.09 1.2 -7.1 5 UMW 2.91 4.02 38.1% Buy 3,400 1.86 37.0 41.7 7.9 7.0 1.7 2.1 3.64 -20.1 2.19 32.9 -14.4

BANKS & FINANCIAL SERVICES 6 ABMB 2.33 3.10 33.0% Buy 3,607 1.14 23.2 28.5 10.1 8.2 2.5 3.4 3.06 -23.9 2.11 10.4 -19.9 7 AFFIN 1.66 2.00 20.5% Buy 3,526 1.12 15.4 18.9 10.7 8.8 3.0 4.2 2.04 -18.6 1.35 23.0 -9.8 8 AMBANK 2.86 3.40 18.9% Buy 9,478 1.08 29.1 33.1 9.8 8.6 0.0 0.0 3.79 -24.5 2.63 8.7 -21.6 9 CIMB 4.60 4.90 6.5% Buy 46,065 1.17 28.1 37.2 16.4 12.4 3.3 3.9 4.75 -3.2 2.90 58.6 7.0 10 HLBANK 18.22 23.00 26.2% Buy 39,496 1.17 127.1 144.4 14.3 12.6 2.2 2.5 19.68 -7.4 14.00 30.1 0.1 11 MAYBANK 8.05 10.80 34.2% Buy 94,131 0.93 71.1 79.6 11.3 10.1 6.8 7.5 9.01 -10.7 6.96 15.7 -4.8 12 PBBANK 3.94 5.00 26.9% Buy 76,478 1.38 29.0 32.4 13.6 12.2 3.8 4.1 4.97 -20.7 2.97 32.7 -4.4 13 RHBBANK 5.26 7.00 33.1% Buy 21,400 1.12 61.1 70.9 8.6 7.4 4.2 4.8 5.98 -12.0 4.17 26.1 -3.5 14 BURSA 7.64 9.40 23.0% Buy 6,183 1.09 42.1 38.6 18.1 19.8 4.7 3.9 10.21 -25.2 7.50 1.9 -7.1

BUILDING MATERIALS 15 ANNJOO 2.28 2.63 15.4% Buy 1,236 1.61 35.1 33.3 6.5 6.8 6.8 6.3 3.18 -28.3 0.56 307.1 45.2 16 CHINWEL 1.21 1.63 34.7% Buy 347 1.15 8.9 11.9 13.7 10.2 2.9 3.8 1.58 -23.4 0.94 29.4 8.0 17 CMSB 1.05 1.91 81.9% Buy 1,128 1.64 14.4 17.0 7.3 6.2 1.9 4.2 2.52 -58.3 1.03 1.9 -50.5 18 CSCSTEL 1.33 2.00 50.4% Buy 491 1.33 20.3 19.4 6.5 6.8 8.9 8.5 2.00 -33.5 0.81 65.2 -1.5

CONSTRUCTION 19 GADANG 0.36 0.31 -13.9% Sell 262 1.59 2.7 3.5 13.2 10.3 0.8 1.4 0.50 -27.3 0.36 1.4 -19.1 20 GAMUDA 2.62 3.07 17.2% Sell 6,585 1.14 19.6 24.1 13.4 10.9 0.0 4.6 4.00 -34.5 2.62 0.0 -32.6 21 GDB 0.36 0.67 86.1% Buy 338 1.24 4.0 5.5 9.0 6.6 8.3 9.7 0.72 -50.0 0.35 2.9 -42.2 22 IJM 1.81 2.28 26.0% Buy 6,503 1.10 9.6 10.6 18.9 17.1 3.3 3.3 2.06 -12.1 1.20 50.8 4.6 23 INTA 0.27 0.53 96.3% Buy 145 1.14 4.8 5.8 5.6 4.6 2.8 3.7 0.40 -32.5 0.23 17.4 -11.5 24 KERJAYA 1.14 1.61 41.2% Buy 1,411 1.02 10.8 13.3 10.6 8.5 3.1 3.5 1.53 -25.5 0.89 28.1 7.5 25 SUNCON 1.56 1.84 17.9% Buy 2,011 0.80 8.3 10.2 18.7 15.2 4.5 4.5 2.00 -22.0 1.50 4.0 -17.0 26 WCT 0.51 0.63 22.5% Buy 723 1.61 4.8 7.8 10.7 6.5 0.0 0.0 0.63 -18.9 0.35 45.1 -2.8

CONSUMER Brewery 27 CARLSBG 21.28 25.00 17.5% Buy 6,506 1.26 68.6 83.5 31.0 25.5 2.6 3.9 24.96 -14.7 18.22 16.8 -8.4 28 HEIM 22.08 26.20 18.7% Hold 6,670 0.99 82.6 95.8 26.7 23.0 3.6 4.2 27.34 -19.2 17.86 23.6 -4.1 Retail 29 AEON 1.44 1.45 0.7% Buy 2,022 1.10 7.0 9.4 20.7 15.4 2.1 2.8 1.49 -3.4 0.67 114.9 34.6 30 AMWAY 5.55 7.05 27.0% Buy 912 0.64 40.7 42.0 13.6 13.2 5.9 5.9 5.94 -6.6 4.72 17.6 -2.7 31 F&N 26.28 40.00 52.2% Buy 9,639 0.55 117.5 129.3 22.4 20.3 2.5 2.7 33.38 -21.3 24.22 8.5 -18.1 32 FOCUSP 0.71 1.03 45.1% Buy 234 0.78 3.4 4.5 20.8 15.9 2.2 2.8 0.98 -27.6 0.26 173.1 10.9 33 HUPSENG 0.94 0.98 4.3% Sell 752 0.58 4.0 5.2 23.4 18.0 4.8 5.3 1.03 -8.7 0.91 3.9 -1.1 34 ABLEGLOB 1.44 2.30 59.7% Buy 443 1.23 13.9 17.4 10.4 8.3 4.3 5.2 2.08 -30.8 1.29 11.6 -28.4 35 LHI 0.68 1.05 55.6% Buy 2,464 1.07 5.1 5.8 13.2 11.6 2.3 2.6 0.85 -20.6 0.64 6.3 -1.5 36 NESTLE 133.30 143.00 7.3% Sell 31,259 0.46 278.9 304.6 47.8 43.8 2.0 2.2 145.70 -8.5 131.10 1.7 -4.0 37 PADINI 3.01 3.05 1.3% Hold 1,980 1.03 10.3 18.2 29.1 16.6 1.7 3.0 3.37 -10.7 2.00 50.5 4.5 38 POHUAT 1.37 1.84 34.3% Buy 363 1.12 20.0 21.3 6.9 6.4 6.6 6.6 2.06 -33.5 1.31 4.6 -21.3 39 QL 5.63 6.70 19.0% Buy 13,701 0.58 9.5 11.0 59.0 51.3 0.6 0.6 7.20 -21.8 5.48 2.7 -2.9 40 SCIENTX 4.20 5.05 20.2% Buy 6,513 0.73 27.1 30.1 15.5 14.0 2.0 2.1 4.45 -5.6 2.97 41.6 -0.6 41 SIGN 0.93 1.17 26.5% Buy 255 1.61 1.8 5.3 50.6 17.5 1.1 2.3 1.15 -19.6 0.29 220.7 71.3 Tobacco 42 BAT 13.86 15.70 13.3% Buy 3,957 0.95 101.1 103.5 13.7 13.4 6.9 7.1 16.20 -14.4 9.80 41.4 -1.6

GAMING Casino 43 GENTING 4.71 5.63 19.5% Buy 18,136 1.42 13.0 29.8 36.2 15.8 3.4 4.0 5.53 -14.8 2.90 62.3 7.4 44 GENM 2.77 3.18 14.8% Buy 15,659 1.09 -5.9 22.4 na 12.4 2.2 5.1 3.31 -16.3 1.93 43.8 5.8 NFO 45 BJTOTO 1.94 2.36 21.6% Buy 2,603 0.71 11.9 19.0 16.3 10.2 5.7 8.8 2.27 -14.5 1.88 3.2 -11.4

HEALTHCARE Hospitals/ Pharmaceutical 46 DPHARMA 2.52 2.82 11.9% Sell 1,780 0.57 10.1 10.8 24.9 23.3 2.9 3.0 4.38 -42.5 2.35 7.2 -25.4 Note: DPHARMA proposed 1 for 3 bonus issue of shares. For more detail please refer to 04.05.21 report. 47 IHH 5.80 6.38 10.0% Buy 50,919 0.80 13.1 15.4 44.3 37.7 0.8 0.9 5.86 -1.0 4.85 19.6 5.5 48 KPJ 1.08 1.06 -1.9% Hold 4,629 0.75 2.7 3.9 40.0 27.8 1.2 1.7 1.17 -7.7 0.80 35.8 8.0 Rubber Gloves 49 HARTA 7.13 10.30 44.5% Buy 24,367 1.09 84.4 123.5 8.4 5.8 7.2 10.4 19.24 -62.9 6.62 7.7 -41.3 50 KOSSAN 3.15 3.92 24.4% Buy 8,038 0.85 127.8 50.6 2.5 6.2 16.0 6.3 8.30 -62.0 2.93 7.5 -28.5 51 SUPERMX 3.13 2.71 -13.4% Sell 8,193 1.67 139.9 77.4 2.2 4.0 17.7 10.1 11.11 -71.8 3.04 3.0 -46.5 52 TOPGLOV 3.75 4.00 6.7% Hold 30,017 1.14 104.2 49.4 3.6 7.6 19.0 7.2 9.61 -61.0 3.64 3.0 -38.0

INSURANCE 53 ALLIANZ 12.62 17.52 38.8% Buy 2,240 0.87 275.5 311.1 4.6 4.1 4.6 5.4 15.38 -17.9 12.48 1.1 -14.6 54 TUNEPRO 0.43 0.49 14.0% Buy 323 1.29 2.9 6.0 14.7 7.2 1.4 5.6 0.52 -16.5 0.30 45.8 -1.1

MEDIA 55 ASTRO 1.09 1.35 23.9% Buy 5,684 0.98 10.2 10.1 10.6 10.7 7.3 7.3 1.26 -13.5 0.71 53.5 20.4 56 MEDIA PRIMA 0.47 0.46 -2.1% Sell 521 1.17 3.8 4.7 12.4 10.0 2.4 3.0 0.75 -37.3 0.15 224.1 64.9 57 STAR 0.36 0.35 -1.4% Sell 257 1.20 -3.6 -1.1 na na 0.0 0.0 0.48 -26.0 0.30 20.3 1.4

For Internal Circulation Only SNAPSHOT OF STOCKS UNDER COVERAGE

OIL & GAS 58 LCTITAN 2.47 3.08 24.7% Hold 5,626 1.38 42.8 24.8 5.8 10.0 4.9 1.6 3.54 -30.2 1.66 48.8 -10.8 59 MHB 0.40 0.46 16.5% Sell 632 1.74 -8.2 1.4 na 28.9 0.0 0.0 0.75 -47.0 0.30 31.7 -12.2 60 MISC 6.71 7.30 8.8% Buy 29,952 0.67 30.6 40.2 21.9 16.7 4.8 4.8 8.00 -16.1 5.96 12.6 -2.3 61 PANTECH 0.56 0.64 14.3% Buy 423 1.13 3.6 5.7 15.7 9.8 4.1 3.1 0.58 -3.4 0.34 64.7 24.4 62 PCHEM 7.96 9.90 24.4% Buy 63,680 1.64 45.5 43.8 17.5 18.2 3.4 3.0 8.58 -7.2 5.16 54.3 7.1 63 SERBADK 0.44 0.28 -35.6% Sell 1,614 1.57 18.1 18.9 2.4 2.3 13.8 13.8 2.09 -79.2 0.31 42.6 -75.3 64 UZMA 0.61 0.81 33.9% Buy 194 1.58 5.1 9.7 11.8 6.2 0.0 0.0 0.90 -32.4 0.36 70.4 7.1 65 VELESTO 0.14 0.19 35.7% Buy 1,150 1.74 -0.4 0.3 na 41.4 0.0 0.0 0.20 -28.2 0.11 33.3 0.0

PLANTATIONS 66 FGV 1.31 1.30 -0.8% Sell 4,779 1.14 3.4 2.8 38.4 46.0 1.5 1.5 1.67 -21.6 1.01 29.7 2.3 67 IJMPLNT 3.05 3.10 1.6% Buy 2,686 1.24 15.3 14.1 19.9 21.7 3.3 3.3 3.10 -1.6 1.52 100.7 67.6 68 IOICORP 3.74 5.06 35.3% Buy 23,311 0.89 19.3 20.6 19.4 18.1 3.1 3.3 4.64 -19.4 3.54 5.6 -14.4 69 KLK 20.18 30.26 50.0% Buy 21,753 0.97 112.9 114.1 17.9 17.7 2.7 2.8 25.22 -20.0 18.52 9.0 -14.8 70 SIMEPLT 3.51 6.07 72.9% Buy 24,274 0.88 23.7 21.6 14.8 16.3 4.6 4.3 5.23 -32.9 3.27 7.3 -29.3 71 TSH 1.04 1.92 84.6% Buy 1,435 1.54 7.8 8.0 13.3 13.0 1.9 2.9 1.29 -19.4 0.91 14.9 -9.6 72 UMCCA 5.06 6.07 20.0% Buy 1,061 0.70 10.9 24.5 46.5 20.7 2.0 2.0 5.30 -4.5 4.43 14.2 -0.8

PROPERTY 73 GLOMAC 0.32 0.45 40.6% Buy 246 0.67 4.9 4.5 6.5 7.1 3.1 3.1 0.47 -31.9 0.28 16.4 -1.5 74 HUAYANG 0.27 0.32 18.5% Buy 95 1.10 -14.5 0.5 na 51.1 0.0 0.0 0.39 -30.8 0.21 28.6 -3.6 75 IBRACO 0.52 0.67 30.1% Buy 256 0.70 7.4 8.8 6.9 5.8 2.9 2.9 0.70 -26.4 0.40 28.7 -1.0 76 IOIPG 1.13 1.82 61.1% Buy 6,222 0.91 11.6 12.0 9.8 9.4 1.3 2.7 1.77 -36.2 0.85 32.9 -27.1 77 MAHSING 0.81 1.02 25.9% Buy 1,966 1.39 6.4 9.7 12.7 8.3 3.5 4.9 1.47 -44.9 0.61 33.9 -6.9 78 SIMEPROP 0.59 0.76 28.8% Buy 4,012 1.14 3.7 4.1 16.1 14.4 2.5 2.5 0.76 -21.9 0.54 10.3 -11.3 79 SPSETIA 1.08 1.35 25.0% Buy 4,393 1.35 7.3 12.4 14.8 8.7 1.4 2.3 1.23 -12.2 0.66 63.6 9.1 80 SUNWAY 1.75 2.23 27.4% Buy 8,556 0.76 7.6 10.4 22.9 16.9 1.1 1.7 1.81 -3.3 1.22 43.4 8.7 REIT 81 CMMT 0.62 0.68 9.7% Hold 1,309 0.57 2.4 4.1 25.7 15.1 4.2 6.6 0.74 -16.2 0.59 6.0 -0.8 82 SUNREIT 1.40 1.37 -2.1% Sell 4,795 0.61 6.6 7.4 21.1 18.9 4.4 4.9 1.72 -18.6 1.34 4.5 -6.7

POWER & UTILITIES 83 MALAKOF 0.83 0.97 16.9% Buy 4,056 0.71 6.2 6.7 13.4 12.3 6.5 7.1 1.02 -18.6 0.80 3.7 -7.3 84 PETDAG 18.70 20.70 10.7% Hold 18,578 0.75 71.2 79.8 26.3 23.4 3.8 4.2 22.10 -15.4 17.08 9.5 -12.6 85 PETGAS 15.90 18.70 17.6% Buy 31,462 0.67 97.1 97.2 16.4 16.4 4.9 4.9 18.10 -12.2 15.24 4.3 -7.2 86 TENAGA 9.66 11.50 19.0% Buy 55,314 0.81 86.9 87.0 11.1 11.1 5.0 5.0 11.07 -12.8 9.15 5.6 -3.7 87 YTLPOWR 0.69 0.85 24.1% Buy 5,550 0.98 4.8 5.4 14.4 12.6 0.0 7.3 0.79 -13.3 0.61 12.8 -8.1

TELECOMMUNICATIONS 88 AXIATA 3.80 4.60 21.1% Buy 34,856 1.05 11.1 16.8 34.3 22.6 2.5 3.8 4.23 -10.2 2.66 42.9 1.6 89 DIGI 4.25 4.50 5.9% Hold 33,044 0.84 14.7 17.0 28.9 24.9 3.3 3.8 4.50 -5.6 3.43 23.9 2.7 90 MAXIS 4.36 5.05 15.8% Buy 34,123 0.75 18.8 22.0 23.2 19.9 4.6 4.6 5.29 -17.6 4.23 3.1 -13.5 91 TM 5.80 7.00 20.7% Buy 21,887 0.59 30.3 32.9 19.1 17.6 2.9 3.1 6.82 -15.0 3.66 58.5 7.2

TECHNOLOGY Semiconductor & Electronics 92 ELSOFT 0.90 1.25 39.7% Buy 602 1.15 1.5 3.6 61.4 25.2 0.8 2.0 1.04 -13.9 0.59 53.0 12.6 93 INARI 3.50 4.25 21.4% Buy 12,880 0.82 9.7 11.3 36.1 30.9 3.1 2.7 3.75 -6.7 1.97 77.8 27.5 94 MPI 43.98 51.20 16.4% Buy 8,747 0.51 136.8 149.1 32.1 29.5 0.7 0.8 46.00 -4.4 14.10 211.9 69.4 95 N2N 0.78 1.30 67.7% Buy 463 1.39 4.6 5.0 16.7 15.6 3.9 3.9 0.92 -15.6 0.64 20.3 10.2 96 SKPRES 1.83 2.30 25.7% Buy 2,859 1.01 8.1 10.6 22.7 17.3 2.7 3.5 2.06 -11.0 1.10 65.8 6.4 97 UNISEM 8.72 11.80 35.3% Buy 7,033 0.61 28.4 33.8 30.7 25.8 1.0 1.1 9.43 -7.5 3.05 185.9 41.1

TRANSPORTATION Airlines 98 AIRASIA 0.82 1.18 43.9% Buy 3,196 1.66 -42.2 14.8 na 5.5 0.0 0.0 1.27 -35.4 0.51 60.8 -7.3 Note: AIRASIA proposed 7-year redeemable convertible unsecured Islamic debt securities (RCUIDS) with 1 free warrant for every 6 shares held. For more detail please refer to 13.07.21 report. 99 AIRPORT 5.93 7.49 26.3% Buy 9,839 1.08 -44.8 26.3 na 22.5 0.0 1.9 6.83 -13.2 4.05 46.4 0.2 Freight & Tankers 100 PTRANS 0.58 1.04 80.9% Buy 365 1.13 7.9 8.8 7.3 6.5 5.5 6.8 0.93 -37.8 0.55 4.5 -26.3 101 TNLOGIS 0.85 1.22 43.5% Buy 437 0.97 -0.1 4.6 na 18.7 1.2 2.4 1.10 -22.7 0.39 120.8 -4.0 102 WPRTS 4.19 5.28 26.0% Buy 14,288 0.51 20.4 22.8 20.6 18.4 3.6 4.0 4.69 -10.7 3.65 14.8 -2.6

SNAPSHOT OF FOREIGN STOCKS UNDER COVERAGE

No. Company Share Price Target Price Market Cap. EPS (cent) PER (X) Div Yield (%) 52week 52week % Chg % upside Recom Beta (S$) (S$) (S$m) FY21 FY22 FY21 FY22 FY21 FY22 High Price % Chg Low Price % Chg YTD BANKS & FINANCIAL SERVICES 1 DBS 30.98 37.30 20.4% Buy 79,562 1.15 246.7 265.0 12.6 11.7 3.2 3.9 31.74 -2.4 19.62 57.9 23.7 2 OCBC 11.97 15.70 31.2% Buy 53,982 1.03 103.1 117.3 11.6 10.2 3.2 3.6 12.77 -6.3 8.36 43.2 19.0 3 UOB 26.90 32.50 20.8% Buy 45,108 1.06 215.3 248.5 12.5 10.8 3.7 4.5 27.01 -0.4 18.85 42.7 19.1

PLANTATIONS 4 WILMAR 4.44 6.56 47.7% Buy 28,409 0.85 33.5 37.7 13.3 11.8 3.4 3.6 5.57 -20.3 3.95 12.4 -3.3

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.