AmWatch

22 March 2016
Equity Research Team
(603-2070 2444)
www.amesecurities.com.my

STOCK FOCUS OF THE DAY

BURSA MALAYSIA
KLCI
52-Week Range
Mkt Cap (RMb)
Daily Volume (m shares)
Daily Value (RMmil)

1,669.24 (-2.76)
1,371.18 - 1,668.32
1,703.42
2,111.48
2,183.97

TOP 5 GAINERS
Closing
Price (RM)
NESTLE
PANAMY
AEONCR
UTDPLT
SCIENTX

75.30
28.90
12.38
26.88
12.30

Chg
(RM)
0.80
0.60
0.44
0.40
0.30

TOP 5 LOSERS
Closing
Price (RM)

Chg
(RM)

22.00
2.76
6.70
0.13
6.22

-0.46
-0.31
-0.27
-0.21
-0.17

PETGAS
POS
AIRPORT
MAYBANKC20
KOSSAN

REGIONAL MARKETS
Market

Index

1D

YTD

1,718.4
2,880.7
1,393.6
7,376.4
4,885.2
20,684.2
1,989.8
8,812.7
16,724.8
17,623.9
4,808.9

0.1%
-0.9%
0.8%
1.0%
0.0%
0.1%
-0.1%
0.0%
-1.2%
0.1%
0.3%

1.5%
-0.1%
8.2%
6.1%
6.4%
-5.6%
1.5%
5.7%
-12.1%
1.1%
-4.0%

Close

1D

YTD

RM/US$
4.0588
OPR (%)
3.25
BLR (% Maybank)
6.85
NYMEX Crude oil
US spot
(US$/barrel)
39.91
CPO spot price
(RM/tonne)
2,591

-0.1%
0.0%
0.0%

5.5%
0.0%
0.0%

1.2%

7.1%

1.8%

17.8%

KLCI
Singapore
Thailand
Philippines
Indonesia
Hong Kong
Korea
Taiwan
Japan
Dow Jones
Nasdaq

ECONOMIC STATISTICS

KL Kepong : FFB output growth still positive YoY in 5MFY16

Buy

Maintain BUY on Kuala Lumpur Kepong Bhd (KLK) with an unchanged fair value of
RM25.10/share, which implies a FY17F PE of 23.5x. In the past seven years, KLKs PE
ranged from a low of 14.0x to a high of 29.6x. Average PE was 21.7x. Although there
is a possibility that KLKs FFB output growth may exceed our assumption of 1.8% for
FY16F (FY15: 1.9%), we are keeping our forecast for now to be conservative. From
October 2015 to February 2016, KLKs FFB production grew by 7.2% YoY. In spite of
the effects of El Nino, it appears that KLKs FFB yields have fared better than its peers.
The groups FFB output edged up by 1% YoY in the first two months of 2016F compared
with declines of 23.9% YoY for IOI Corporation, 5.2% YoY for Genting Plantations and
3.8% YoY for IJM Plantations. We attribute this to KLKs smaller exposure to Sabah.
We estimate that about 16.3% of KLKs planted areas are in Sabah. Indonesia
accounts for a significant 53.0% of planted areas while Peninsular Malaysia accounts
for an additional 27.7%. The balance 3.0% of KLKs planted areas is in Liberia. Apart
from the recovery in CPO prices, KLKs plantation unit is also expected to receive a
boost from the turnaround in the refineries in Indonesia and higher palm kernel prices
in FY16F.
The swing into profitability is envisaged to be underpinned by a lower feedstock cost
resulting from the implementation of the export levy in July 2015. The refineries and
palm kernel crushing segment in Indonesia recorded a small loss of RM2.4mil in
FY15. We believe that KLKs manufacturing unit (mainly oleochemical operations)
would be able to sustain its profitability in FY16F due to the timing of its purchases of
raw materials. We have forecast manufacturing EBIT to inch up by 2% in FY16F. Most
of the oleochemical profits are expected to be driven by the Malaysia operations. KLKs
foreign shareholding has improved from a low of 11.06% as at end-September 2015
to 11.96% as at end-February 2016. In the past five years, the highest level of foreign
shareholding recorded was 19.2% at end-April 2012.

QUICK TAKES
Malakoff Corporation : T4 plant achieves COD
Construction Sector : CRC to set up regional HQ at Bandar Malaysia

Buy
Overweight

NEWS HIGHLIGHTS
Benalec Holdings : Benalec stands to gain RM4mil from land sale
Technology Sector : Apple announces iPhone SE: a smaller, cheaper
smartphone

AmWatch

22 March 2016

DIRECT BUSINESS TRANSACTIONS ON THE KLSE

Stock

Quantity
(000)

Price
(RM)

Turnover
(RM000)

AFG
ASTRO
CARIMIN
COMFORT
DIALOG-WA
DLADY
ELKDESA-LA
GLBHD
KPOWER
MEDAINC
MUIIND
MUIPROP
SILKHLD
SKPETRO
SUNWAY-WA
TSRCAP
WPRTS
WZSATU

1,000
85
22,222
150
390
1,000
2,360
50
2,700
600
27,750
8,000
1,060
130
22,805
3,000
8,000
120

3.890
2.910
0.450
0.845
0.350
50.000
1.040
1.600
0.670
0.545
0.180
0.300
0.400
2.150
0.885
0.500
4.000
1.000

3,890
247
10,000
127
136
50,000
2,454
80
1,809
327
4,995
2,400
424
280
20,183
1,500
32,000
120

Economic Calendar Release Date

Date Time
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016
03/22/2016

06:30
08:30
08:30
12:30
15:00
17:30
17:30
17:30
17:30
17:30
17:30
17:30
17:30
17:30
17:30
17:30
17:30
17:30
17:30
17:30
17:30
17:30
17:30
18:00
18:00
21:00
22:00
03/25
03/29

Country

Event

Australia
Australia
Australia
Japan
Japan
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
EURO
Malaysia
United States
United States
Japan
Japan

ANZ Roy Morgan Weekly Consumer Confidence Index

House Price Index QoQ
4Q
House Price Index YoY
4Q
All Industry Activity Index MoM
Jan
Convenience Store Sales YoY
Feb
CPI MoM
Feb
CPI YoY
Feb
CPI Core YoY
Feb
Retail Price Index
Feb
RPI MoM
Feb
RPI YoY
Feb
RPI Ex Mort Int.Payments (YoY)
Feb
PPI Input NSA MoM
Feb
PPI Input NSA YoY
Feb
PPI Output NSA MoM
Feb
PPI Output NSA YoY
Feb
PPI Output Core NSA MoM
Feb
PPI Output Core NSA YoY
Feb
ONS House Price YoY
Jan
Public Finances (PSNCR)
Feb
Central Government NCR
Feb
Public Sector Net Borrowing
Feb
PSNB ex Banking Groups
Feb
ZEW Survey Expectations
Mar
Foreign Reserves
Mar-15
FHFA House Price Index MoM
Jan
Richmond Fed Manufact. Index
Mar
Supermarket Sales YoY
Feb
Small Business Confidence
Mar

AmInvestment Bank Bhd

Months

Survey

Actual

Prior

Mar-20

2.00%
10.70%
-0.90%
1.00%
-0.80%
0.30%
1.20%
258.8
-0.70%
1.30%
1.40%
-0.70%
-7.60%
-0.10%
-1.00%
0.10%
0.00%
6.70%
-24.9b
-20.2b
-11.8b
-11.2b
13.6

2.30%

AmWatch

22 March 2016

News Highlights
Benalec Holdings Bhd (RM0.54/share)
Benalec stands to gain RM4mil from land sale
Benalec Holdings Bhd is expected to make a net gain of RM4.17mil from the
proposed disposal of its beneficial interest in 4.252 acres of commercial land in
Malacca. It said that the net gain would represent earnings per share of half a sen
and would improve the companys net asset per share from 74 sen to 75 sen
based on its total issued capital of 799.14 million shares as of June 30, 2015.
In a filing with Bursa, Benalac said it had entered into an agreement with Pembinaan
Kota Laksamana (Melaka) Sdn Bhd and Arah Menang Holdings Sdn Bhd for the
joint sale and disposal of a 41.67 acres in Melaka Tengah for a total sale
consideration of RM83.5mil. StarBiz

Technology Sector
Apple announces iPhone SE: a smaller, cheaper smartphone
Apple has bucked the bigger-is-better phone trend and released a revamped
version of its 4in iPhone 5S, the new iPhone SE. It will be the smallest smartphone
in Apples current lineup. Greg Joswiak, VP of product marketing for Apple, said:
Some people simply love smaller phones. And the 4in phone is often their first
iPhone. Some people asked and pleaded with us. So were calling it the iPahone
SE. Our most powerful 4in phone ever. .
It has a metal body, 4in screen, Touch ID fingerprint scanner and a flush camera
lens, unlike Apples most recent iPhones. The phone will be available in black,
white, gold and rose gold. The outside of the device resembles an iPhone 5S but
the inside will be similar to the iPhone 6S, using Apples A9 processor, an NFC chip
with support for Apple Pay and a better 12-megapixel camera, in line with Apples
2015 iPhones. The Guardian

Published by
AmInvestment Bank Bhd

(23742-V)

A member of the Ambank Group

15th Floor Bangunan AmBank Group

55 Jalan Raja Chulan
50200 Kuala Lumpur
Tel: (03)2070-2444 (research)
Fax: (03)2078-3162
Printed by
AmInvestment Bank Bhd

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or
recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only
and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd may
from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group and their affiliates
may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information
herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure
that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should
not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions
and estimates included in this report constitute our judgement as of this date and are subject to change without notice.

(23742-V)

A member of the Ambank Group

For AmInvestment Bank Bhd

15th Floor Bangunan AmBank Group

55 Jalan Raja Chulan
50200 Kuala Lumpur
Tel: (03)2070-2444 (research)
Fax: (03)2078-3162
Benny Chew
Senior Vice President
Equity Research

AmInvestment Bank Bhd