DBS Vickers May Monthly Strategy

Malaysia Market Focus
Malaysia Monthly Strategy

Refer to important disclosures at the end of this report\
DBS Group Research . Equity 5 May 2017
Dont count the chips yet

KLCI : 1,758.67
Foreign net equity inflow continued to boost the
equity market while selldown of government Analyst
Bernard CHING
bonds was well absorbed
+603 2604 3918
Fundamentals improving with stronger external bernard@alliancedbs.com
demand and rebound in earnings Malaysian Research Team
+603 2604 3333
Raise end-2017 KLCI target to 1,800; Buy on dips general@alliancedbs.com
Top picks: MAY, GENT, GAM, BIMB, SCGB, VSI,
SKP, GTB, OTB and YTB Market Key Data
(%) EPS Gth Div Yield
Strong net inflows continued to boost equities. Buying 2016 4.3 3.1
interest of foreign institutional investors remained strong with 2017F 7.8 3.3
net inflow of RM2.7bn in Apr, which represents the fourth 2018F 9.1 3.3
consecutive month of net inflow.
(x) PE PB
Bond outflows well absorbed. In contrast, foreign holdings 2016 17.8 1.8
of governments debt have been on a downtrend since the
2017F 16.5 1.7
central bank introduced measures to curb speculative activities
2018F 15.1 1.6
on the MYR via the non-deliverable forward (NDF) market in Source: Bloomberg Finance L.P.
Nov 2016. But this was well absorbed given ample domestic
liquidity. MGS yields have in fact compressed amid the STOCKS
selldown while MYR has gained 3.7% YTD. 12-mth
Price Mkt Cap Target Price Performance (%)
Fundamentals improving. Positive GDP growth momentum
RM US$m RM 3 mth 12 mth Rating
which started in 3Q16 may be sustained in the near term due
to strong external demand despite persistent weak consumer Maybank 9.20 21,641 10.00 13.2 4.8 BUY
sentiment and consumption. The rebound in GDP growth Genting Berhad 9.82 8,454 10.60 19.0 14.3 BUY
trajectory coincides with the bottoming of corporate earnings Gamuda 5.28 2,960 6.30 8.2 13.6 BUY
downcycle. With steadier commodity prices, firmer external BIMB Holdings 4.48 1,695 5.00 5.4 14.3 BUY
demand and low base effect from kitchen-sinking exercises in Berhad
Sunway 2.00 597 2.13 17.7 25.0 BUY
2016 for the banking and oil & gas sectors, we expect Construction Group
FBMKLCI earnings growth of 7.8% in FY17 vs 4.3% in FY16. VS Industry 1.99 545 2.35 32.7 64.5 BUY
SKP Resources Bhd 1.26 353 1.60 (4.6) (3.8) BUY
Buy on dips as market uptrend likely to be sustained. Globetronics 5.43 355 6.35 28.7 67.6 BUY
Despite richer market valuations, concerns over geopolitical Technology
OldTown Bhd
Berhad 2.66 279 3.05 39.3 83.5 BUY
Yong Tai Bhd 1.54 155 2.10 20.3 77.0 BUY
risks and impact of Chinas capital controls on Chinese-led
infrastructure projects in Malaysia, we believe the market Source: DBS Bank, AllianceDBS, Bloomberg Finance L.P.
uptrend will remain intact as long as the corporate earnings Closing price as of 4 May 2017
growth trajectory stays in positive territory. We raise our end-
2017 FBMKLCI target from 1,750 to 1,800 which is derived
using bottom-up valuation approach.
Top stock picks. We prefer cyclical to defensive stocks and
favour those with clear earnings growth catalysts. Our big-cap
picks are Maybank (MAY), Genting (GENT), and Gamuda
(GAM) while our small-mid cap picks are BIMB, Sunway
Construction (SCGB), VS Industry (VSI), SKP Resources (SKP),
Globetronics (GTB), Oldtown (OTB) and Yong Tai (YTB).
Top sells are BAT, FGV, DIGI and MAXIS given their stretched
valuations and poor earnings outlook.
ASIAN INSIGHTS VICKERS SECURITIES

ed: CK / sa:WMT, PY
Market Focus
Market Review
Monthly change in foreign holdings of government debt
The FBMKLCI continued its good run from 1Q17 with a 1.6%
RM bn GII Treasury bills BNM bills MGS
gain in April, its fifth consecutive monthly gain. While the YTD 15
gain of 7.7% for the benchmark index was decent, small-mid 10
cap stocks continued to steal the limelight as the FBM Small 5
Cap Index gained 3.4% in Apr which brings its YTD gain to a 0
staggering 21.2%. Buying interest of foreign institutional -5
investors remained strong with net inflow of RM2.7bn -10

-15
registered during the month.
-20
-25
Equity fund flow -30
Mar-16
Mar-15
May-15
May-16
Mar-17
Jan-15
Nov-15
Jan-16
Nov-16
Jan-17
Jul-15
Sep-15
Jul-16
Sep-16
Inflow/(Outflow) Foreign Institutional Local Institutional
RM bn
8.0
6.1
6.0
4.4 Source: Bank Negara
3.8 3.8
4.0 2.7
1.8 1.7
2.0 1.2 1.0 0.9 0.9 0.5 1.0
0.6
0.5 0.5 0.1 MGS yields
0.0
-0.4 -0.3 -0.4 % 10Y MGS 5Y MGS 3Y MGS
-2.0 -0.9 -0.6 -0.7 -1.0 -0.7
-1.6 -1.3 5.0
-1.8
-4.0 -3.4
-4.3 -3.9
-6.0
4.5
-5.5
-8.0 4.0
Nov-16
Apr-16
May-16
Dec-16
Jan-16
Mar-16
Jun-16
Aug-16
Oct-16
Apr-17
Jan-17
Mar-17
Feb-16
Jul-16
Sep-16
Feb-17
3.5
Source: Bursa Malaysia 3.0
In contrast, foreign holdings of governments debt, which 2.5
includes Malaysian Government Securities (MGS), have been 2.0

on a downtrend since the central bank introduced measures to
Dec-16
Apr-17
Jan-17
Oct-16
Mar-17
Nov-16
Feb-17
curb speculative activities on the MYR via the non-deliverable

forward (NDF) market in Nov 2016. Since then, foreign Source: Bloomberg Finance L.P
investors have cited lack of liquidity in the NDF market to
hedge their currency risk as reason for the unwinding of their On the currency front, the MYR has also stabilised somewhat
Malaysian bond holdings. In the central banks latest data with a YTD gain of 3.7% against the USD despite the heavy
release, foreign holdings of governments debt have decreased selldown of government bonds by foreign investors. The
by RM27.5bn in Mar 2017. Despite the unwinding activities, weakening of the USD, as evidenced by a YTD 3.3% drop in
MGS yields for 3, 5 and 10-year tenures have been steady with the dollar index, has given much reprieve to the MYR. The
-34bps, -14bps and -42bps change since end-Oct 2015. This improvement in the MYR outlook could also stem from the
suggests that the selldown of government bonds by foreign central banks foreign exchange rule introduced in Dec 2016
investors has been well absorbed given ample domestic which requires resident exporters to repatriate and convert at
liquidity. least 75% of foreign currency proceeds into MYR with a
licensed onshore bank.

Page 2
Market Focus
US Dollar index and USD/MYR exchange rate Malaysia exports growth

US Dollar Index (lhs) USDMYR (rhs) RM per USD E&E O&G Exports growth
% y-o-y % y-o-y
104 4.55 50 50
103 40 40
4.50
30 30
102 20 20
4.45
101 10 10
4.40 0 0
100 -10 -10
4.35
99 -20 -20
4.30 -30 -30
98
-40 -40
97 4.25 -50 -50
Jan-13
May-13
May-14
May-15
May-16
Sep-13
Jan-14
Jan-15
Jan-16
Jan-17
Sep-14
Sep-15
Sep-16
96 4.20
5-Feb
26-Feb
2-Apr
9-Apr
15-Jan
22-Jan
29-Jan
12-Feb
19-Feb
5-Mar
12-Mar
19-Mar
26-Mar
16-Apr
23-Apr
30-Apr
8-Jan
1-Jan
Source: Department of Statistics

Source: Bloomberg Finance L.P
MIER Consumer Sentiment Index and private consumption
growth
Market Outlook Private consumption growth (lhs)
sa % q-o-q
Consumer sentiments index (rhs)
An improving exports outlook continues to be a bright spot for 3.5 130
the Malaysian economy. Nikkei Malaysia Manufacturing 3.0 120
Purchasing Managers Index (PMI) has turned positive in Apr 2.5 110
2.0
2017 with a reading of 50.7, the highest since Feb 2015. This 100
1.5
is also reflected by the 26.5% y-o-y surge in gross exports in 90
1.0
Feb 2017 amid broad base improvement in external demand. 0.5
80
While E&E continues to be bedrock of a resilient Malaysian 0.0 70
export performance, recent improvement in crude oil and -0.5 60
crude palm oil prices have also lent a much needed helping -1.0 50
1Q11
3Q11
1Q12
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
1Q16
3Q16
1Q17
hand in boosting overall exports. Against such a backdrop, the
positive GDP growth momentum which started in 3Q16 may
Source: Department of Statistics, MIER
be sustained in the near term despite persistent weak
consumer sentiment and consumption. Investors would be
The rebound in GDP growth trajectory coincides with the
keenly monitoring the release of the 1Q17 GDP data on 19
bottoming of corporate earnings downcycle. With steadier
May whereby consensus estimate of 4.0% growth looks
commodity prices, firmer external demand and low base effect
conservative when compared to 4.5% growth in 4Q16.
from kitchen-sinking exercises in 2016 for the banking and oil
& gas sectors, we expect FBMKLCI earnings growth of 7.8% in
Malaysia PMI FY17 vs 4.3% in FY16.
55
54
KLCI earnings growth trend
53 60%
52 50%
40%
51 30%
20%
50 7.8% 9.1%
10%
49 0%
-10% 4.3%
48
-20%
47 -30%
-40%
46 -50%
Feb-15
Feb-16
Feb-17
Oct-14
Oct-15
Oct-16
Aug-14
Aug-15
Aug-16
Jun-14
Jun-15
Jun-16
Apr-14
Apr-15
Apr-16
Apr-17
Dec-14
Dec-15
Dec-16
Source: AllianceDBS
Source: Markit

Page 3
Market Focus
Amid a risk-on global investment climate, the recent rally in

Malaysian equities has raised FBMKLCI CY17 PE valuation to DJIA forward EPS estimate
16.5x which is at +1SD of its historical mean. Investors would EPS (cent)
be wondering whether it is time to take some chips off the 1250
table with the volatility index at a 10-year low, indicating a 1200
high level of complacency. Newsflow on geopolitical risks
1150
emanating from North Korea, France and the US could trigger
market pullbacks. Domestically, recent news flow on the 1100
setback in developing the iconic Bandar Malaysia project will 1050

dampen sentiment on the prospect of China-led infrastructure
1000
projects in Malaysia which may also spill over to the broader
market. Nevertheless, we believe the market uptrend will 950
2012 2013 2014 2015 2016 2017
remain intact as long as the corporate earnings growth
trajectory stays in positive territory.
Source: Bloomberg Finance L.P
FBMKLCI PE trend
VIX index
P/E
90
19
80
18
17 70
16.6x
16 60
15.8x
15 15.0x 50
14 40
13 30
12 20
Apr-10
Apr-11
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Jan-14
Jan-10
Oct-10
Jan-11
Jul-11
Oct-11
Jan-12
Oct-12
Jan-13
Oct-13
Oct-14
Jan-15
Oct-15
Jan-16
Jul-16
Oct-16
Jan-17
Jul-10
Jul-12
Jul-13
Jul-14
Jul-15
10
0
Source: Bloomberg Finance L.P, AllianceDBS 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Bloomberg Finance L.P,

FBMKLCI forward EPS estimate
EPS(sen)
120 We raise our end-2017 FBMKLCI target from 1,750 to 1,800
which is derived using bottom-up valuation approach. This
115 implies CY17 PE target of 16.9x. We continue to overweight
construction, gaming and utilities sectors while keeping
110 automotive, building materials and telecommunication sectors
at underweight.
105
100 For stock selection, we prefer cyclical to defensive stocks and

favour those with clear earnings growth catalysts. Our big-cap
95 picks are Maybank (replacing Public Bank which is more suited
2012 2013 2014 2015 2016 2017 for a risk-off trade), Genting, and Gamuda. We drop AMMB as
our target price has been achieved. For our small-mid cap
Source: Bloomberg Finance L.P picks, we like BIMB, Sunway Construction, VS Industry, SKP
Resources, Oldtown, Globetronics (new) and Yong Tai (new).
Top sells are BAT, FGV, DIGI and MAXIS given their stretched
valuations and poor earnings outlook.

Page 4
Market Focus
Top Stock Picks Sunway Construction (TP: RM2.13) represents the best pure
construction proxy to the sector and also has a strong
Maybank (TP: RM10.00) Gradual earnings improvement to be execution track record. Its current outstanding orderbook
expected this financial year. Apart from lower provisions, the stands at RM4.9bn (including precast). The company is guiding
positive momentum in capital markets should aid earnings for RM2bn worth of new orders in FY17F which should come
growth. Its continued resilience for its consumer and SME from LRT 3, internal jobs and some other building jobs. It has
business should underpin growth. Spin-offs of its insurance started 2017 strongly with YTD wins of RM0.9bn. Its strong
and Islamic banking units could unlock shareholder value if balance sheet will give it flexibility to raise its dividend payout
these materialise. To top it off, although share price has risen, policy, take on PFI and bullet payment projects or even explore
Maybank remains a sweet dividend pick. Its dividend overseas projects.
reinvestment plan looks to be here to stay but the cash/share
options could be tweaked. Maybank currently carries the VS Industrys (TP: RM2.35) growth is expected to be driven by
higher capital ratios among peers. Maybank is also a key proxy its largest client (with 30% of total revenue in FY16) Client
to ride this sentiment-driven rally among Malaysian large-cap D. We forecast strong growth from Client D due to
stocks. contributions from two box-build assembly orders for cordless
vacuum cleaners worth c.RM400m per job p.a. and another
Genting Bhd (TP: RM10.60) is expected to enjoy ongoing re- two box-build assembly orders for corded vacuum cleaners
rating in 2017, supported by progressive launches of key worth c.RM150m per job p.a. We have now included another
developments in Genting Integrated Tourism Plan (GITP) and two prospective jobs for box-build assembly orders for a new
expected earnings recovery in Genting Singapore (GENS), product worth c.RM400m per job p.a., which are expected to
which we believe will improve the growth prospects for the progressively start operation from Oct 2017. Taking these
group. Its valuation remains attractive when compared to contracts into account, we forecast Client Ds revenue
GENS and Genting Malaysia (GENM) after the recent price contribution to grow at a CAGR of 58% in FY16-FY19F.
appreciation of these subsidiaries. Being the parent company Beyond these contracts, we believe there is high potential for
of GENS and GENM, we believe that GENT offers a cheaper further contract wins from Client D as it launches more
exposure to both these subsidiaries. products.
Gamuda (TP: RM6.30) is the best transportation infrastructure SKP Resources (TP: RM1.60) has clinched a four-year contract
proxy play. Its current outstanding orderbook stands at from Client D totalling RM2bn, or RM500m p.a. for the
RM8.3bn, coming from MRT Line 2 tunnelling works and the manufacturing of hairdryers. However, SKPRES would be
Pan Borneo Sarawak project. This does not include the 6% foregoing the previous RM400m p.a. contract, for the
PDP fees it will earn for the aboveground works for MRT Line manufacturing of the V6 cordless vacuum cleaners. The move
2. The company is confident of clinching another RM3-4bn is to optimise and shift the existing limited labour resources to
worth of new orders in the next one year, coming from largely work on the higher-value product, following the governments
three projects, namely LRT 3, Pan Borneo Highway, and decision to freeze the hiring of foreign labour in February
Southern Double Tracking. The medium-term pipeline also 2016. Given its longstanding relationship with Client D, we are
looks solid with MRT Line 3, HSR, ECRL and PTMP. While the positive about SKPRES long-term prospects as it has been able
potential delay of Splash may be a near-term dampener, the to continuously secure manufacturing contracts for Client Ds
delay will ensure there will also be stronger earnings growth latest flagship products.
this year.
Globetronics (TP: RM6.35). We believe the earnings visibility of
BIMB (TP: RM5.00) has an arsenal of tools to lean on to GTB is improving with clearer signs supporting strong earnings
weather the current soft operating environment. The bank has recovery in FY17 from new sensor products (particularly
a niche in Islamic banking (which supports financing growth gesture sensors and light sensors). This is also underpinned by
momentum), high CASA ratio and liquid balance sheet (to the recent acquisition by its new Swiss-listed customer, where
stave off NIM compression) as well as high financing loss acquisition details revealed are pointing towards substantial
coverage (to buffer against potential deterioration in asset revenue growth from new product programmes starting in
quality). We believe the market is not assigning sufficient mid-2017.
premium to a franchise delivering ROEs of c.15% and better-
than-industry metrics.

Page 5
Market Focus
Oldtown (TP: RM3.05) could be a multi-year growth stock in offerings. It is set to deliver exponential EPS CAGR of 57%
view of the potentially lucrative opportunities offered by its over FY16-19F. We envisage long-term earnings visibility for
regional expansion story, particularly in the China market. We Yong Tai as its value-adding 138-acre Impression City and
maintain our positive stance on Oldtown given that (1) the Impression Melaka ride on booming Chinese tourism,
strong 3QFY17 results has reaffirmed our investment thesis reflecting the unprecedented close Malaysia-China ties. We
that the group is firmly on a growth trajectory, (2) its valuation believe the vast potential of Yong Tai is under-appreciated by
remains attractive despite the recent run-up, and (3) its investors, and the official opening of Impression Melaka in Feb
expansion to regional markets can bring about multi-year 2018 will be a key re-rating catalyst.
growth potential.
Please refer to pages 14-16 for detailed key investment merits
Yong Tai (TP: RM2.10) is our top pick for the Malaysia property of these stock picks.
sector given its unrivalled competitive advantages arising from
its unique tourism appeal and synergistic property product
Earnings estimates for AllianceDBS's coverage sectors (CY17 and CY18)

ADBS Universe vs KLCI (CY)
Market Cap Target Mkt Cap Upside Weightage P/E EPS Growth (YoY) Dividend Yield Price/ BVPS ROAE
Sector Call RM m RM m % % CY2017 CY2018 CY2017 CY2018 CY2017 CY2018 CY2017 CY2018 CY2017 CY2018
Automotive Underweight 8,209.0 7,071.5 (13.9) 0.6 28.1x 19.2x 140% 44% 1.3% 1.7% 1.4x 1.3x 5% 7%
Aviation Neutral 26,327.4 24,508.0 (6.9) 2.0 32.4x 22.8x 310% 30% 1.3% 1.7% 1.5x 1.4x 9% 9%
Banking Neutral 316,160.2 327,285.9 3.5 24.3 13.0x 12.0x 7% 9% 3.9% 4.2% 1.4x 1.3x 11% 11%
Building Materials Underweight 10,512.1 9,203.3 (12.5) 0.8 32.9x 31.2x 51% 7% 1.8% 1.9% 2.0x 1.9x 7% 7%
Chemicals Underweight 57,040.0 44,000.0 (22.9) 4.4 22.4x 0.0x 4% 0% 2.3% 0.0% 2.1x 0.0x 10% 0%
Conglomerate Neutral 7,764.9 10,657.7 37.3 0.6 15.0x 13.7x (6%) 9% 1.8% 1.8% 0.8x 0.8x 5% 6%
Construction Overweight 33,132.2 35,155.5 6.1 2.5 19.3x 18.0x 24% 7% 2.3% 2.4% 1.8x 1.7x 10% 10%
Consumer Neutral 53,848.5 54,246.7 0.7 4.1 22.6x 21.1x 5% 8% 3.2% 3.4% 9.9x 9.3x 42% 48%
Financial non-bank Neutral 7,813.2 8,512.1 8.9 0.6 30.0x 28.1x 21% 13% 6.7% 7.2% 6.5x 6.2x 40% 40%
Gaming Overweight 76,009.2 76,594.5 0.8 5.8 17.5x 14.5x 13% 21% 1.4% 1.6% 1.4x 1.3x 9% 10%
Glove Neutral 18,770.4 20,187.0 7.5 1.4 19.7x 17.4x 14% 12% 2.5% 2.8% 3.5x 3.1x 18% 19%
Healthcare Neutral 55,340.2 63,812.1 15.3 4.3 47.7x 40.9x 41% 17% 0.6% 0.7% 2.3x 2.2x 5% 6%
Media Neutral 18,091.7 19,828.0 9.6 1.4 17.8x 15.8x 32% 13% 5.7% 6.3% 17.4x 16.8x 98% 110%
Oil & Gas Neutral 32,232.9 33,684.0 4.5 2.5 27.6x 20.1x 59% 38% 0.8% 1.1% 1.7x 1.6x 6% 7%
Plantation Neutral 157,626.2 149,354.2 (5.2) 12.1 22.6x 20.0x 27% 13% 2.3% 2.6% 2.0x 1.9x 9% 10%
Port Neutral 13,230.8 14,663.0 10.8 1.0 10.4x 9.8x 2% 6% 3.4% 3.6% 0.6x 0.6x 6% 6%
Property Neutral 32,241.7 31,186.1 (3.3) 2.5 19.7x 17.9x 30% 17% 2.7% 2.6% 1.0x 1.0x 7% 7%
REIT Neutral 36,718.9 38,595.6 5.1 2.8 18.2x 7.7x 7% 1% 5.1% 5.4% 1.3x 1.3x 10% 11%
Shipping Neutral 33,121.3 35,933.5 8.5 2.5 10.0x 9.2x 14% 6% 3.4% 3.4% 0.6x 0.6x 4% 5%
Technology Neutral 10,433.0 10,909.5 4.6 0.8 16.3x 14.0x 40% 16% 3.2% 3.7% 3.5x 3.1x 21% 23%
Telecommunication Underweight 163,021.1 141,977.0 (12.9) 12.5 26.5x 24.7x 2% 7% 3.0% 3.6% 21.9x 21.7x 88% 89%
Utilities Overweight 131,940.2 145,834.0 10.5 10.2 14.6x 13.6x (2%) 6% 3.2% 3.4% 1.8x 1.7x 13% 13%
ADBS Universe 1,299,585.3 1,303,199.1 0.3 100.0 20.4x 17.0x 20% 11% 3.0% 3.1% 4.8x 4.6x 23% 23%
FBMKLCI 1,758.67 1,800.00 2.4 16.5x 15.1x 8% 9% 3.3% 3.3% 1.7x 1.6x
Top stock picks
P/E EPS Growth (YoY) Dividend Yield Price/ BVPS ROAE
Recommen Target Current Market

CY2017 CY2018 CY2017 CY2018 CY2017 CY2018 CY2017 CY2018 CY2017 CY2018
dation Price Price Cap
Maybank BUY 10.00 9.20 93,682.5 13.1x 12.3x 4% 7% 5.8% 6.2% 1.3x 1.2x 10% 10%
Genting BUY 10.60 9.82 36,596.5 16.9x 13.2x 18% 29% 0.4% 0.5% 1.0x 0.9x 6% 7%
Gamuda BUY 6.30 5.28 12,814.9 20.8x 19.6x 9% 7% 1.7% 1.7% 2.0x 1.8x 10% 10%
BIMB Holdings BUY 5.00 4.48 7,337.1 11.6x 10.9x 8% 7% 2.9% 3.1% 1.7x 1.6x 15% 15%
Sunway Construction BUY 2.13 2.00 2,585.8 16.7x 14.5x 26% 15% 2.7% 3.1% 4.5x 3.8x 29% 28%
VS Industry BUY 2.35 1.99 2,360.9 13.1x 10.6x 22% 23% 3.0% 3.8% 2.4x 2.1x 19% 21%
SKP Resources BUY 1.60 1.26 1,529.1 11.9x 9.6x 28% 24% 4.2% 5.2% 3.5x 3.0x 32% 34%
Globetronics BUY 6.35 5.43 1,535.0 22.9x 14.5x 157% 58% 3.7% 5.0% 5.5x 5.0x 25% 36%
Oldtown BUY 3.05 2.66 1,209.0 17.5x 16.9x 10% 4% 2.5% 2.6% 2.9x 2.6x 17% 16%
Yong Tai BUY 2.10 1.54 670.4 18.3x 7.7x 1076% 139% 0.9% 3.0% 1.4x 1.4x 10% 22%
Source: AllianceDBS Price date: 4 May 2017

Page 6
Market Focus
Sector Outlook
Sector Outlook Top Stock Picks
Automotive We expect minimal growth to be the norm for auto players in FY17, as there are no None
major catalysts to help lift numbers. The continued weak consumer sentiment and
Underweight
tighter hire purchase controls will weigh on growth.
While exciting launches and promotions may be able to support volume, margins will
remain pressured by higher costs. Promotions and road shows to spur excitement in
the market will incur costs and eat into margins.
Aviation Malaysian air passenger traffic seems to be turning around, with 10-10.5% growth in None
1Q17 and 2H16 after around 24 months or two years of growth averaging <1%.
Neutral
This suggests recovery in travel demand following the after-effects of airline
incidences in 2014 plus scaling down by Malaysia Airlines (MAB). We expect Malaysia
Airports' (MAHB) 2017 passenger growth to be decent in 2017 at 7.5% (6% in
2016).
Yields (fares/RPK) will see pressure from larger industry capacity, given recovered
growth ambitions by Malaysia Airlines (MAB), while AirAsia and Malindo are ramping
up capacity after a slower 2016. Airlines may leverage on routes on which they have
a larger market share, or seek out unique routes to maintain average yields.
2017 jet fuel spot prices of around USD60-65/bbl are higher y-o-y than the 2016
average of USD52.9/bbl, in line with crude oil prices. Airlines unit costs will be
pushed slightly upwards as fuel makes up 20-40% of operating costs, though this is
partially mitigated by hedges where most have covered more than half of
requirements. The persistence of a strong USD is also a cost risk as the majority of
costs are USD-denominated. Overall, we expect thinner margins for airlines.
AIRA remains in a strong position to defend and grow market share though re-rating
catalysts may hinge on divestments or substantial associate improvements. AAX is
more exposed to fuel and currency factors and faces the risk of losses in the event of
severe yield deterioration. Despite its better domestic growth, MAHB will see
headwinds from its Turkish operations.
Banks Earnings recovery in 2017 is largely driven by lower credit cost (decline from a high Maybank, Public Bank
base in 2016). Top-line growth is limited as loan growth is expected to remain
Neutral
modest. Upside surprises could arise from better-than-expected NIM trends. Capital
markets are expected to pick up.
Most banks are looking to grow loans at mid-single digits, which is broadly in line
with the expectation for system loan growth.
Uncertainties on asset quality issues have waned and we are tilting to a more positive
bias. Near term, while banks have indicated that they have prudently impaired loans
and provided for them, vulnerable segments (such as oil & gas, commodities, steel
and commercial property) may still cause more incidences of restructured and
rescheduled (R&R) loans. Meanwhile, on the retail front, asset quality has been largely
held up by mortgages. That said, if the operating environment improves, asset quality
could also surprise on the upside from a reclassification of R&R loans to non-impaired
(allowed upon observance of continuous repayment for at least six months)..
The Malaysian banks are clearly turning the corner and escaped the wrath of NPL
woes unlike regional peers, although selected banks did suffer in 2016. We prefer
Maybank to CIMB as Maybank has more holistic business engines it can ramp up in
an improved operating environment; CIMB relies mainly on one engine corporate
banking. Public Bank and Hong Leong Bank remain our fundamental picks, as both
banks continue to demonstrate resilience; Hong Leong Banks associate, Bank of
Chengdu could spring a positive surprise. We also like AMMB and BIMB for a
compelling turnaround story and superior growth, respectively.

Page 7
Market Focus
Sector Outlook (contd)

Building materials We believe competition among cement players is unlikely to improve in 2017, given None
the slow construction activities (MRT Line 1 mostly completed) amid further capacity
Underweight
expansion by industry players.
Not helping either are the rising thermal coal prices (~30% of costs) and the weaker
ringgit.
CMS is on a better footing as the Sarawak-based company will not be impacted by
price competition, unlike its Peninsular peers. The company is also expected to benefit
from the increased infrastructure spending such as the Pan Borneo Highway.
Construction The higher development expenditure for the 11MP (RM260bn over the next five years) Gamuda, Sunway
gives some assurance that project flows will continue to be forthcoming. Construction, Kimlun
Overweight
Transportation-related projects which are government backed have very little risk of
being shelved.
We expect continuity of project awards to follow in 2017 but the quantum will likely
be lower compared to 2016. The focus will be on three key projects LRT 3, Southern
Double Tracking and Pan Borneo Sabah. The medium-term pipeline also looks
promising with the East Coast Railway Link, High Speed Rail and MRT Circle Line.
Our top picks are Gamuda and Sunway Construction. We continue to like Gamuda for
its position as the best infrastructure transportation proxy where its strong reputation
for MRT Line 1 will enable it to capitalise on more projects such as the High Speed Rail
and East Coast Railway Link. We also like Sunway Construction as our mid-cap proxy
where we expect it deliver stronger earnings over the next few years given its strong
orderbook. Our small-cap pick is Kimlun which continues to surprise the market with
its strong earnings delivery and execution track record.

Page 8
Market Focus

Consumer Private consumption (55% of GDP) remained expansionary, growing by 2.2% in q-o-q Oldtown
terms in 4Q16, up from 0.2% sequential expansion in 3Q16. Nonetheless, we remain
Neutral
cautious as the q-o-q expansion could be driven by (1) heavy sales promotions and
discounting activities towards the end of the year, (2) shopping for Chinese New Year
which fell in Jan 2017, and (3) the sharp weakening of the ringgit since November
2016 that may have encouraged local travelling among Malaysians, which supported
end-of-year sales.
In fact, our cautious stance is supported by consumer leading indicators such as MIER
Consumer Sentiment Index (CSI), job vacancies data and household loan approval rate.
CSI statistics released by the Malaysian Institute of Economic Research (MIER) increased
q-o-q to 76.6 points in 1Q17 (4Q16: 69.8), significantly below the 100 points
threshold and pointing towards a sluggish recovery in consumer spending. Besides
that, data on recent job vacancies and household loan approval rates remain below the
historical average, which could continue to drag consumption.
4Q16 corporate results were above expectations partly due to already low market
expectations. We maintain our cautious stance on the sector whose earnings prospects
going forward are expected to remain weak, dragged by (1) continued slow recovery
in consumer spending, (2) weakening ringgit inflating the cost of imported materials,
(3) higher minimum wage effective from July 2016 adding on to the cost pressure, and
(4) an increasingly competitive operating environment and weak consumer market may
restrict companies ability to pass on the rising costs.
While potential election goodies could help to temporarily create a feel good
sentiment, we do not expect it to be a significant re-rating catalyst for the sector. With
no significant catalysts on the horizon, bottom-up stock picking remains our strategy
for investors to generate alpha returns.
Given the concerns outlined above, we favour stocks with (1) resilient business models,
(2) established brand names in their respective sectors to withstand the continued
challenging operating environment, (3) strong balance sheets to undertake earnings-
accretive M&A activities to drive growth and/or engage in capital management
exercises to reward shareholders, (4) regional exposure to mitigate (potential) domestic
earnings risks, and (5) attractive value propositions. Oldtown (BUY, TP: RM3.05)
remains our preferred pick in the sector.

Page 9
Market Focus

Gaming We maintain our Overweight recommendation for the gaming sector as we foresee Genting
ongoing re-rating for the Genting Group. While we have downgraded Genting
Overweight
Malaysia (GENM) to HOLD in view of its recent strong share price performance, we
maintain our BUY recommendation on Genting Bhd (GENT) given that it offers a lower
entry point for exposure to GENM and Genting Singapore (GENS).
With the progressive launch of its major GITP developments, we expect the number of
visitors to Resort World Genting to grow by about 8% per annum from an expected
21m in 2016 to 25m by 2018, on track to meet the groups target of 30m by 2020.
The increased visitations, coupled with the potential availability of 300 new gaming
tables, are expected to drive its earnings.
While GENS share price has rallied since we upgraded GENS to BUY in August 2016,
we believe the re-rating will continue on the back of a sustained earnings recovery in
2017. Its improved profitability in 2017 (17% jump in adjusted EBITDA) will be driven
by (i) a recovery in VIP volumes (we have pencilled in a 3% uplift) as management is
now focusing on growing its top line, (ii) VIP win rate normalising to the 2.85%
theoretical rate from c.2.67% in 2016, and (iii) lower bad debts given GENSs more
selective and conservative credit policy over the past year.
On the other hand, we are less optimistic on the prospects of number forecasting
operators (NFOs) as the weak domestic consumer sentiment could slow down
discretionary spending, which may in turn hamper ticket sales of NFOs.
Gloves We expect the supply-demand mismatch to narrow in FY17, backed by glove players None
expanding capacity at a more gradual pace to better track demand growth. We
Neutral
forecast glove output for glove players at 10%/11% for FY17/18F in contrast to their
FY16 volume growth of 14%, which is significantly above demand growth of c.10%.
With demand catching up to supply and pressures on ASPs expected to ease, we see
margins stabilising moving forward as continuous efforts in increasing efficiency and
automation can contribute to steady operating margins due to improving economies
of scale. Margins would get a boost from the downtrend in raw material prices but
this is unlikely to be sustained as savings will be passed on to customers.
Valuation is at a fair level in the absence of catalysts to re-rate the sector. We have
HOLD calls on glove companies under our coverage.
Healthcare We remain optimistic about the growth prospects of private hospital operators due to IHH Healthcare
increasing demand for quality healthcare amid rising disposable income. Capacity
Neutral constraints at government healthcare facilities are also expected to drive affluent
patients to private hospitals. The constraints are expected to worsen with the cut in
public hospital development expenditure from RM3.7bn in fiscal year 2010 to
RM536m in fiscal year 2017.
Generic pharmaceutical players are expected to enter a new growth phase as they
approach the patent cliff, providing an opportunity for them to launch new generic
products and improve sales.
Our top pick for the sector is IHH Healthcare for its robust revenue growth across most
of its business units, boosted by contributions from new hospitals including Gleneagles
Kota Kinabalu, Gleneagles Medini Hospital, Acibadem Taksim Hospital, and newly
acquired hospitals such as Global Hospitals and Tokuda Group and City Clinic Group.

Page 10
Market Focus

Media With the challenging market environment and rising cost of living, there is generally a Astro Malaysia
lack of feel-good factors to spur a recovery in consumer sentiment and for advertisers
Neutral to lift adex spending in 2017.
Low newsprint cost is a blessing for newspaper publishers, though this will be offset by
the weaker ringgit.
Nevertheless, we believe downside risks are limited given the low valuation and decent
dividend yields for the sector. Our top pick for the sector is Astro for its resilient
earnings which are predominantly driven by Pay-TV subscriptions rather than adex.
Oil & Gas OPEC reached a landmark consensus on 30 November to reduce output by about Sapura Energy, Pantech
1.2mmbpd, effective 1 January 2017. The duration of the agreement is six months. An
Neutral
understanding has also been reached with various non-OPEC countries including
Russia that they would be contributing towards a reduction of 600,000bpd which
brings the total supply curtailment to 1.8mmbpd. This will likely bring forward
demand-supply equilibrium to 1H17 and we adjust Brent crude oil price average to
US$50-60 per barrel accordingly from US$50-55bbl.
According to Rystad Energy Dcube (March 2017), total global offshore capex has
bottomed out and will progressively improve from CY2018-2020. Upstream players
will be boosted by the prospect of higher oil prices while service providers will be
uplifted by improvement in capex spending by oil majors.
Sapura Energy (SAPE) is a BUY as it benefits from an oil price recovery given its direct
exposure to the exploration and production segments. For every USD5/barrel increase
in crude oil price, we estimate c.17% earnings growth for SAPE in FY18F (FYE Jan
2018). Furthermore, its position as a global integrated upstream company with
operations spanning the entire O&G service provider value chain allows it to benefit
from an eventual recovery in O&G capex cycle.
We believe Pantech is one of the key beneficiaries of RAPID contract flows. Following
its strong 4QFY17 results, we believe the earnings rebound momentum to be
sustained in FY18, underpinned by more orders from RAPID. Valuations are attractive
at 9x 2018F FD EPS. Pantech also offers one of the highest dividend yields at c.5% in
our oil & gas universe. Together with its dividend yield, the stock offers a total upside
potential of c.27%. Pantech remains our top small-cap pick for the sector.
Plantation The adverse El Nino impact reduced global palm oil output by 7% in 2016. This caused TSH Resources
an inventory drawdown of 2.6m MT (-20% y-o-y) as Indonesias B20 mandate kicked
Neutral
in.
Following 15% and 14% drops last year, we expect this years FFB yields to rebound
6% in Indonesia and 8% in Malaysia. Even as global supply rebounds 10% this year;
we expect palm oil stockpile to stay flat on continued y-o-y demand growth.
We expect Indonesias CPO Fund to collect US$865m of export levies this year; based
on a 9% rebound in export volumes. Hence, coupled with non-subsidised volume, we
expect Indonesias biodiesel output to expand 0.5m MT y-o-y to 3.3m MT (5% of
global palm oil demand).
Our current CPO average price forecast is US$659 or RM3,040 per MT for 2017
higher than the US$640/RM2,652 average in 2016.
TSH is a BUY for its better-than-peer internal FFB growth pipeline due to its favourable
tree age profiles, allowing it to capitalise on CPO price upside from currency
movements.

Page 11
Market Focus

Property We expect slower property sales volumes in 2017, although prices should hold up due Yong Tai
to cost-push factors. Sentiment should remain poor given the tightening measures and
Neutral
inflationary pressures, but mass-market products at strategic locations will continue to
enjoy healthy sales as affordability remains an important factor among purchasers.
Developers' margins could be affected by rising development costs, as selling price
hikes would be capped by relatively more subdued demand. However, there is no
property bubble for now but we fear an oversupply of KL office space, hybrid high-rise
units and Iskandar Malaysia high-end condos.
Our top sector pick is Yong Tai which enjoys unrivalled competitive advantages arising
from its unique tourism appeal and synergistic property product offerings which are
set to deliver exponential EPS CAGR of 57% over FY16-19F. We envisage long-term
earnings visibility for Yong Tai as its value-adding Impression City and Impression
Melaka ride on booming Chinese tourism, reflecting the unprecedented close
Malaysia-China ties.
REIT Rental reversion growth is expected to be moderate-to-low for all subsectors. Retail Sunway REIT
rents and occupancy should remain resilient at prime locations, but weak consumer
Neutral
sentiment and spending will cap rental reversion. Office assets will focus on
maintaining occupancy as oversupply conditions persist, while softer business
conditions (weaker general economy, a depreciated ringgit, minimum wage hikes) will
pressure rents for both office and industrial spaces.
Inorganic growth via acquisitions will be a running theme in the face of weak organic
growth. However, the key point remains whether the REITs can inject assets at a price
that will be DPU-accretive to unitholders.
Sunway REIT remains our top pick, predicated on its strong DPU growth as income
contributions resume following the completion of Sunway Putra refurbishments, plus
its visible pipeline of potential asset injections from sponsor Sunway Bhd.
Shipping LNG spot rates are expected to remain low in 2017 continuing the weakness in 2016, None
as newbuild deliveries are expected to be strong at 57 (up from 33 in 2016), thus
Neutral
exacerbating the vessel oversupply.
Crude tanker rates had on average performed worse last year with the Baltic Dirty
Tanker Index (BDTI) averaging 11% lower in 2016. In line with seasonality, rates
typically pick up towards 4Q-1Q, before softening in 2Q-3Q. For full-year 2017, the
BDTI is expected to chart another y-o-y decline as newbuild deliveries are also likely to
outstrip demand.
We have a HOLD call on MISC. The groups organic earnings outlook is mild-to-weak
in the near term due to the soft charter rates outlook. However, the group intends to
pursue inorganic growth especially within the offshore space, which may have the
potential to transform its outlook.

Page 12
Market Focus

Technology The iPhone 7 is generally well received, and this is sufficient to serve as a re-rating Globetronics
catalyst for the supply chain because prior expectations were very low. With a decent Unisem
Neutral iPhone 7 cycle till 2Q17, followed by a 2H17 supercycle where a major design overhaul
and new features are expected, we believe the outlook for Apple's supply chain looks
favourable over the next 12 months.
We have a BUY call on Globetronics (TP: RM6.35) as we believe the risk-reward is
compelling, with clearer signs emerging to underpin growth recovery in FY17 from
new sensor products (i.e. light sensor and gesture sensor).
The whole Malaysian tech sector has re-rated significantly since early 2017 amid
positive industry data and positive sentiment on the equity market. These have helped
to narrow the valuation gap of laggards such as Unisem and MPI which were trading
at undemanding valuations. In particular, we like Unisem (BUY, RM3.65 TP) for its
wafer bumping and WLCSP segment, which is seeing higher demand and is a key
differentiator compared to its Malaysian peers.
Telecommunication The intense price competition in the market is not showing any signs of abating soon, Telekom Malaysia
as mobile players are still offering attractive promotions in a bid to gain market share
Underweight
amid the weak consumer environment. We believe a persistent fall in data pricing is a
key threat to mobile operators data monetisation strategy to offset declines in voice
and SMS.
Spectrum pricing for 900MHz and 1800MHz has been announced, and the RM6.3bn
total fee is manageable and within market expectations. However, with the move
towards new spectrum regime as well as a stronger U Mobile (which has gained more
spectrum), we believe questions will eventually be raised on competition risk and
margin sustainability, as well as the premium valuations of Malaysian mobile operators.
We are optimistic about the eventual rollouts of HSBB2, SUBB, and wireless services
that would drive further growth for TM, as it expands the coverage of its high-speed
broadband network to more areas.
Utilities Energy demand is expected to grow in tandem with the relatively healthy economic Tenaga Nasional
outlook in Malaysia, which will continue to underpin the growing recurring income for
Overweight
utility players.
The government remains committed to the power sector reform with the
implementation of the incentive-based regulation (IBR) framework that will provide
strong earnings clarity for utility players as well.
Our top pick is Tenaga Nasional (TNB) for its more attractive valuation and improving
earnings visibility from the implementation of the IBR framework.

Page 13
Market Focus
Top Stock Picks

Stocks Key Investment Merits
Maybank Gradual improvement in core earnings expected; positive capital markets momentum an added boost; Maybank
Indonesia chugging along.
Etiqa (insurance business) and Maybank Islamic banking are hidden jewels of Maybank Group; market could be mis-
pricing Maybank's ability to unlock shareholder value
Dividend remains appealing with 5-6% yield; dividend reinvestment plan to persist; strong capital ratios is Maybank's key
advantage over peers.
BUY with RM10.00 TP; spinoffs could add RM0.40 to TP
Genting Lets enjoy the game! We maintain our BUY recommendation on Genting Bhd (GENT). We believe that progressive
launches of key developments in Genting Integrated Tourism Plan (GITP) and expected earnings recovery in Genting
Singapore (GENS) will improve the growth prospects for the group.
Expect gaming tables to increase by >45% by 2018. GITP launches to boost outlook. We are positive on GITP launches
as we foresee improving earnings prospects for the group: (1) additional gaming capacity arising from GITPs launch, and
(2) weak ringgit to attract more foreign tourist visitations and encourage more local visits from Malaysians, which could
benefit Genting Malaysia (GENM).
Ride on sustained GENS earnings recovery in 2017. While GENS share price has rallied over 25% since we upgraded
GENS to a BUY in August 2016, we believe the re-rating will continue on the back of sustained earnings recovery in
2017. Its improved profitability in 2017 (17% jump in adjusted EBITDA) will be driven by (i) a recovery in VIP volumes (we
have pencilled in 3% uplift) as management is now focusing on growing its top line, (ii) VIP win rate normalising to the
2.85% theoretical rate from c.2.67% in 2016, and (iii) lower bad debts given GENSs more selective and conservative
credit policy over the past year.
BUY, TP of RM10.60. We keep our BUY recommendation for GENT with a target price of RM10.60, based on SOP
valuation. We believe that GENT offers a lower entry point for exposure to both these subsidiaries.
Gamuda Best transportation proxy. Gamuda has solidified its position for MRT Line 2 with the award of the tunnelling package
worth RM15.47bn to MMC-Gamuda JV or RM7.7bn per contractor. We expect margins to be at least in the 12-15%
range (similar to MRT Line 2) given the Swiss Challenge was not used, coupled with the cost savings from the
depreciated tunnelling boring machines. Additionally, on a cost-per-km basis, it is 30% higher than MRT Line 1. It is also
confident of clinching another RM3-4bn of new orders coming from LRT 3, Southern Double Tracking and Pan Borneo
Sabah.
Earnings to resume growth in FY17F. We expect FY17F earnings to grow by 10% in FY17F, anchored by its RM8.3bn
orderbook which comprises MRT Line 2 tunnelling and Pan Borneo Sarawak. However, this has yet to take into account
the sale of Splash, where there may be delays in finalising the sale.
BUY, TP of RM6.30. Gamuda remains the best large-cap infrastructure proxy in Malaysia. We expect the company to be
present in most of the large-scale transportation-led infrastructure projects in Malaysia, given its strong execution track
record and reputation.
BIMB Earnings risk overplayed. BIMB has an arsenal of tools to lean on to weather the current soft operating environment. The
bank has a niche in Islamic banking (which supports financing growth momentum), high CASA ratio and liquid balance
sheet (to stave off NIM compression) as well as high financing loss coverage (to buffer against potential deterioration in
asset quality). We believe the market is not assigning sufficient premium to a franchise delivering ROEs of c.15% and
better-than-industry metrics.
Growing cautiously in FY17. BIMB is keeping defences up in 2017, with a financing growth target of 8%. This remains
higher than the banking systems loan growth, which we expect to reach 5%, at best. Deposit (including investment
accounts) is also expected to grow at a similar pace, i.e. 7-8%. BIMB hopes to contain NIM compression at less than 5bps
and increase in charge-off by a few bps in the coming year. We believe the selective growth strategy by the bank will
bode well for safeguarding asset quality. Nonetheless, we would not discount the possibility of financing growth
exceeding management guidance, as we understand that BIMB continues to see healthy demand for financing.
BUY, undervalued franchise. Our RM5.00 TP is derived from the Gordon Growth Model (assuming 15% ROE, 4% long-
term growth and 10% cost of equity) and implies 1.9x FY17F BV. We believe its current valuation presents a good
opportunity to gain an inexpensive entry into a solid Islamic banking franchise.

Page 14
Market Focus
Top Stock Picks (contd)

Sunway Malaysias leading pure construction player. Sunway Construction Group (SCG) is the largest listed pure play construction
Construction player in Malaysia. Given its strong track record with MRT, LRT and BRT jobs previously, we are of the view that SCG is
on a strong footing to bag several key infrastructure packages such as LRT 3 and BRT as well as other major highway
projects. SCG has also established itself as the only construction specialist to be involved in all three Rapid Line infra
projects (MRT, LRT and BRT). This makes the group one of the strongest contenders to win the pipeline of 11MP projects.
Riding on Singapores public housing development. Its precast division is a strong proxy to the growing demand for HDB
residences in Singapore where the government is targeting to build an additional 88,000 units of public housing in FY16-
FY19. With premium EBIT margins recorded over the past few years, the business is ROE-enhancing and also synergistic
to its construction business. The completion of its 3rd precast plant in Iskandar should give it ample capacity to cater for
more orders while also compensating for the eventual return of the Tampines plant.
Guiding for RM2bn of new contracts in 2017. SCG has exceeded its RM2.5bn revised order forecast for 2016 with wins
of RM2.6bn. For FY17, it has set a more conservative target of RM2bn and this is expected to come from some internal
jobs, LRT 3, building job and its usual precast projects in Singapore. YTD wins already amount to RM0.9bn.
VS Industry High-growth company with potential for significant contract wins. We expect VSIs growth to be driven by its largest
client (with 30% of total revenue in FY16) Client D. We initially forecast contributions from two box-build assembly
orders for cordless vacuum cleaners worth c.RM400m per job p.a. and another two box-build assembly orders for corded
vacuum cleaners worth c.RM150m per job p.a. We have now included another two prospective jobs for box-build
assembly orders for a new product worth c.RM400m per job p.a., which are expected to progressively start operation
from Oct 2017.Taking these contracts into account, we forecast Client Ds revenue contribution to grow at a CAGR of
58% in FY16-FY19F. Beyond these contracts, we believe there is high potential for further contract wins from Client D as
it launches more products.
More orders from Keurig. The group has clinched a full-assembly contract for Keurigs upcoming new coffee machine
model. We believe production has been ramped up due to positive market feedback on the new product.
Additional plant for box-build assembly. VSI is constructing a specialised factory-cum-warehouse in preparation for
potential orders from its existing clientele. The built-up area of the factory is 130k sq ft, while the warehouse provides
another 130k sq ft. Based on the built-up size, we believe the new facility can house an additional six production lines.
The warehouse is expected to be completed soon and the factory is slated for completion by early-2018.
BUY, TP of RM2.35. Our fair value of RM2.35 is based on 13x fully diluted CY18F EPS, which is the industrys average. In
the mid-term, we conservatively forecast VSIs revenue/core EPS to grow at a 3-year CAGR of 29%/28% over FY16-
FY19F. A +/- 0.1% shift in net margin will affect earnings by +/-2%, causing our fair value to increase/decrease by 3%.
SKP Resources Earnings visibility intact despite near-term headwinds. SKPRES has clinched a four-year contract from Client D totalling
RM2bn, or RM500m p.a. for the manufacturing of hairdryers. However, SKPRES would be foregoing the previous
RM400m p.a. contract, for the manufacturing of the V6 cordless vacuum cleaners. The move is to optimise and shift the
existing limited labour resources to work on the higher-value product, following the governments decision to freeze the
hiring of foreign labour in February 2016. Taking these into account, we see improved visibility for the groups earnings
from 3QFY17 onwards, arising from; 1) the earnings accretion of the recent hairdryer contract from Client D, 2)
improved operating margins from the high-value contract, and 3) resolution of the labour issues in September 2016.
New celebrated product. The cordless vacuum cleaner is Client Ds most popular product which contributed more than
half of its revenue in 2015. Consequently, the recent launch of the Supersonic (V9) hairdryer has the potential to be the
next best-selling product with glowing reviews from the Japan and UK launches. The recent US launch in September has
also received encouraging response. As such, we are positive of the developments as SKPRES is currently the sole
manufacturer for this product.
BUY, TP of RM 1.60. Our TP is pegged to FY18 PE of 13.5x, which is +1SD of its 5-year average forward PE. We believe
that it deserves a premium valuation given its much stronger earnings growth compared to peers, especially post
resolution of its recent labour woes.

Page 15
Market Focus
Top Stock Picks (contd)

Globetronics BUY, RM6.35 TP. The earnings visibility of Globetronics (GTB) is improving with clearer signs supporting a strong earnings
recovery in FY17-18 from new sensor products (particularly light sensors and gesture sensors). Amid the positive
newsflows and strong interest in 3D sensors suppliers, we believe GTBs valuation could re-rate up to 17-18x PE, based on
historical trends as well as local and global peers comparison.
Production ramping up starting 3Q17. For light sensors, GTB already started initial production of 4m units in April, with
target to ramp up to 15m units by June and ultimately more than 25m units by 3Q17 when equipment are progressively
delivered and installed over the months. Meanwhile, production of gesture sensors are also currently at 4m units, with
visibility to ramp up to 8m units by early 3Q17, while plans for additional capacity are still being discussed with the
customer.
Positive outlook from Swiss-listed customer. GTBs Swiss-listed customer has reaffirmed that preparation for ramp-ups in
2H17 are fully on-track. Furthermore, it is also seeing significantly increased customer forecasts and higher revenue
pipeline for 2017 and particularly 2018 from new projects and additional design wins. As a result, the Swiss-listed
customer is increasing its capex spending in 2017, which we believe is positive for GTB as this could possibly translate into
higher volume and/or new sensor products from the Swiss-listed customer.
Oldtown Craving for a nice cup of coffee. We maintain our positive stance on OldTown Berhad (Oldtown) given that (1) the strong
3QFY17 results has reaffirmed our investment thesis that the group is firmly on a growth trajectory, (2) its valuation
remains attractive despite the recent run-up, (3) its expansion to regional markets can bring about multi-year growth
potential, and (4) we maintain that there is now higher chance of paying out dividends amounting to 9 sen/share for
FY17, giving a decent yield of about 4%.
3Q strong earnings, multi-year sustained growth path ahead. To recap, Oldtown has delivered a set of impressive
quarterly figures. The group reported strong core earnings of RM24.4m for 3QFY17 (+119% y-o-y, +92% q-o-q), mainly
boosted by 26% y-o-y growth for FMCG revenue. We understand that the strong FMCG sales were mainly driven by > 1-
fold revenue growth to the China market. Given that China sales still accounts for <15% of its total FMCG sales, we
believe that its regional expansion story, particularly to the China market, offers Oldtown multi-year growth potential.
BUY, TP of RM3.05. We maintain our BUY recommendation with a TP of RM3.05 pegged to an unchanged forward PE of
19x, which is below its regional peers forward PE of >20x.
Yong Tai Best proxy to booming Chinese tourism. As the first Impression Series outside China, the Melaka Straits-fronting
Impression Melaka is poised to be a resounding success by tapping into the booming Chinese tourism in Malaysia which
has seen an impressive 11% tourist arrivals CAGR over 2000-2016 (vs 1% for Malaysias overall tourist arrivals), making it
the third-largest tourist source market.
Emerging cash cow. Impression Melaka offers compelling value proposition given its estimated ~20% IRR over the 30-year
concession, thus transforming Yong Tai into an emerging cash cow with strong recurring income.
Under-appreciated Melaka property market. There is immense potential in the Melaka property market which is targeting
not just its 0.9m local population but also >16m tourists that visit the World Heritage City annually. Yong Tais impressive
unbilled sales of RM990m anchored by en-bloc sales of 262 retail lot units in Impression City for RM873m will
underpin strong earnings visibility over the next two years. We believe Impression Citys attractive investment merit is
under-appreciated by investors, and the official opening of Impression Melaka in Feb 2018 will be a major catalyst.
BUY, TP of RM2.10. Given Yong Tais unrivalled competitive advantages arising from its unique tourism appeal and
synergistic property product offerings, it is expected to deliver exponential EPS CAGR of 57% over FY16-19F. We reiterate
our BUY rating and SOP-derived TP of RM2.10, which implies an FY18 PE of 13x.

Page 16
Market Focus
Revisions to recommendations
Company Revision to Recommendation Revision Date Rationale
Current Previous
Upgrade
Maybank BUY HOLD 20-Apr We have reduced our credit cost assumption to 46/42/37bps over
FY17-19 (from 50/44/37bps) given the improving economic
outlook (firmer commodity prices and exchange rate). We have
also raised non-interest income growth as the positive
momentum from capital markets should give a boost to fee
income. These collectively led us to raise FY17-19F earnings by 4-
6%.
Unisem BUY HOLD 26-Apr We are upgrading our call on Unisem to BUY (from HOLD) with a
higher TP of RM3.65 after raising our earnings forecasts, target
P/B multiple, as well as rolling forward our valuation base to
FY18. We like Unisem for its wafer bumping and wafer-level
chip-scale packaging (WLCSP) segment which is seeing higher
demand and is a key differentiator for the company compared to
its Malaysian peers. Its valuation is also undemanding at 12.5x
FY18 PE with an attractive net dividend yield of 5%.
Source: AllianceDBS
Significant reports
Date Report
Strategy report
5-Apr Malaysia Strategy: Riding the wave cautiously
Sector report
11-Apr Malaysia Automotive: Excise duty up
27-Apr Malaysian Construction: China contractors: Friend or foe?
Initiating Coverage
6-Apr Yong Tai: Diamond in the rough
Source: AllianceDBS

Page 17
Market Focus
Best and worst-performing stocks in AllianceDBS coverage in April
Big Caps (>USD2bn) Small & Mid-Caps (<USD2bn)
Pantech Holdings
AirAsia VS Industry
Dialog Group Bhd Malaysian Pacific
MAHB
Dayang Enterprises
Genting Malaysia
WCT Holdings
CIMB Group
Globetronics
AMMB
UNISEM
AXIATA
Felda Global Ventures
Hong Leong Financial
Maybank Media Prima
Genting Muhibbah Engineering
Genting Plantation Berjaya Sports Toto
Public Bank TSH Resources
Westports Holdings MSM Malaysia
Petronas Chemical SKP Resources
MISC Supermax
IOI Corporation CapitaMall Malaysia
Petronas Dagangan Coastal Contracts
Astro Kossan
BAT Top Glove
Petronas Gas MKH
-10% 0% 10% 20% 30% -20% 0% 20% 40% 60%
Source: AllianceDBS, Bloomberg Finance L.P

Page 18
Market Focus
Macro Data
m-o-m / y-o-y Prev. / Consensus
Key Data Period
chg (y-o-y)
GDP 4Q16 +3.4%* / +4.3% / +4.4% During the quarter, domestic demand was led by private consumption
(4Q16: +6.2%), and private investment (4Q16: +4.9%), while public
+4.5%
consumption and public investments contracted 4.2% and 0.3%
respectively. Net exports growth remained steady at 5.8% (3Q16:
+5.9%). Looking ahead, we pay attention to signs of improvements in
labour market conditions and sustained expansion in household-related
consumption. If these fail to materialise by year-end, our subdued take
on growth prospects could persist into 2018.
CPI Mar 17 -0.1% / +5.1% +4.5% / +5.2% March inflation rate was the highest recorded since 2008. During the
month, price pressures were mainly driven by key items in the basket of
goods, namely Transport (+23.0%), Food and Non-alcoholic Beverages
(+4.1%) and Housing and Utilities (+2.1%) sectors. Looking ahead, we
continue to expect double-digit growth in the Transport sector this year
(Transport sector inflation YTD-avg: +16.4% vs 2016: -4.6%), in line
with rising global crude oil prices.
OPR Mar 17 3.00%^ 3.00% / 3.00% Although BNM anticipates brighter global macro prospects this year,
significant structural risks threats of trade protectionism and
geopolitical developments persist. A premature hike in OPR could
dampen the weak consumer sentiments; while a surprise cut in interest
rate could induce volatility in the ringgit exchange rate.
Exports Feb 17 +2.1% / +13.6% / +15.1% During the month, E&E exports continued to be the main driver of
+26.5% growth, contributing to 7.7% of total exports growth. Following the
gradual recovery in commodity prices, O&G exports also continued to
contribute positively to exports growth during the month. Looking
ahead, the recovery in manufacturing exports volume growth (YTD-
Feb17: 5.5% vs 2016: -5.1%) could indicate a sustainable uptick in
global demand and therefore expect stronger exports performance,
moving forward.
PMI Apr 17 50.7^ 49.5 / - Aprils reading was the highest since February 2015. Growth was
underpinned by solid gain in new export orders, as foreign demand for
Malaysian goods strengthened, which helped to offset subdued demand
domestic demand.
IPI Feb 17 -5.8% / +4.7% +3.5% / +6.1% Growth was supported by expansion across all sectors: Manufacturing
(+6.5%), Mining (+0.4%) and Electricity (+1.5%) during the month. On
a seasonally adjusted m-o-m basis, industrial production expanded 2.0%,
which was the highest since Oct 2016. The manufacturing sector output
continued to remain high at 6.5% (Jan: +4.6%), largely due to E&E
production, which expanded YTD-Feb: 7.6%.
CPO Output Mar 17 +16.3% / +20.7% / n.a. Production broke out of its seasonal successive declines as FFB yields
+20.1% achieved decent y-o-y and m-o-m growth. Expect further gradual
improvements m-o-m as the weather impact recedes.
CPO Inventory Mar 17 +6.5% / - -32.8% / n.a. Stock levels rebounded to 1.55m MT from its six-year low in Feb, as
17.6% production recovered. Exports also rebounded 14.3% m-o-m but did not
outpace output growth. Total demand (including local use) is still flattish
YTD, implying further inventory build-up as output grows, unless exports
rise strongly.
Source: AllianceDBS, Bloomberg Finance L.P
* q-o-q
^ latest reading

Page 19
Market Focus
Macro Graphs
Malaysia GDP and Consumer Price Index growth Malaysia exports growth
GDP growth CPI Others
%y-o-y %y-o-y % y-o-y E&E % y-o-y
7.0 7.0 50 O&G 50
6.0 6.0 40 40
30 30
5.0 5.0 20 20
10
4.0 4.0 10
0
0
3.0 3.0 -10
-10
-20
2.0 2.0 -20 -30
-30 -40
1.0 1.0 -40 -50
0.0 0.0 -50 -60
Oct-13
Oct-14
Oct-15
Oct-16
Apr-13
Apr-14
Apr-15
Apr-16
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jul-13
Jul-14
Jul-15
Jul-16
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Jul-12
Jul-13
Jul-14
Jul-15
Jul-16
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Source: Department of Statistics Source: Department of Statistics
Malaysia industrial production and PMI index Malaysia palm oil output
IPI growth (lhs) k MT Malaysian production ( L ) Y-o-y production change % ( R )
% y-o-y Mfg IPI growth (lhs) 2,000 40%
12.0 Mfg PMI (rhs) 55.0 1,800
30%
10.0 1,600
1,400 20%
8.0 50.0 1,200 10%
1,000
6.0
800 0%
4.0 45.0 600 -10%
400
2.0 -20%
200
0.0 40.0 0 -30%
Sep-14
Sep-15
Sep-16
Mar-14
Jul-14
Mar-15
Jul-15
Mar-16
Jul-16
Jan-14
Nov-14
Jan-15
Nov-15
Nov-16
Jan-16
Jan-17
May-14
May-15
May-16
Source: Department of Statistics, Markit Source: Department of Statistics
Malaysia palm oil inventory MGS 10-year and US Treasury 10-year yield spread
k MT Malaysian stock level ( L ) Y-o-y stock change % ( R ) bps
3,000 40% 300
2,500 30% 250
2,000 20% 200
1,500 10% 150 Trump

Crude election
100 oil price
1,000 0% slump,
Ringgit
50 decline
500 -10%
0
Apr-11
Apr-16
Sep-11
Feb-12
Sep-16
Feb-17
0 -20%
Jun-10
Jul-12
Jun-15
Mar-14
Dec-12
Oct-13
Aug-14
Jan-10
Jan-15
Nov-10
Nov-15
May-13
Source: Malaysian Palm Oil Board Source: Bloomberg Finance L.P

Page 20
Market Focus
DBS Bank, AllianceDBS recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)
Share price appreciation + dividends
Completed Date: 5 May 2017 08:27:05 (MYT)

Dissemination Date: 5 May 2017 08:51:49 (MYT)
Sources for all charts and tables are DBS Bank, AllianceDBS unless otherwise specified.
GENERAL DISCLOSURE/DISCLAIMER
This report is prepared by DBS Bank Ltd, AllianceDBS Research Sdn Bhd (''AllianceDBS''). This report is solely intended for the clients of DBS Bank
Ltd, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or
duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBS Bank Ltd, AllianceDBS Research Sdn Bhd
(''AllianceDBS'').
The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS
Bank Ltd, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively,
the DBS Group) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other
factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or
warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without
notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific
investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees
only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial
advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit)
arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not
to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons
associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group, may have
positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and
other banking services for these companies.
Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can
be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments.
The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed, it may
not contain all material information concerning the company (or companies) referred to in this report and the DBS Group is under no obligation to
update the information in this report.
This publication has not been reviewed or authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned
schedule or frequency for updating research publication relating to any issuer.
The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and
assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on
which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual
results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED
UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that:
(a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and
(b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk
assessments stated therein.
Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets.

Page 21
Market Focus
Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies)
mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the
commodity referred to in this report.
DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public
offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage
in market-making.
ANALYST CERTIFICATION
The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the
companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her
compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s)
primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer of the
issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real
estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the
management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or
2
his associate does not have financial interests in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has
procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of
research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment
banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment
banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the
DBS Group.
COMPANY-SPECIFIC / REGULATORY DISCLOSURES

1. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates have a proprietary position in
Genting Singapore recommended in this report as of 31 Mar 2017.
2. Neither DBS Bank Ltd, DBS HK nor DBSV HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research
Report.
Compensation for investment banking services:

3. DBS Bank Ltd, DBSVS, their subsidiaries and/or other affiliates of DBSVUSA, within the next 3 months, will receive or intend to seek
compensation for investment banking services from Maybank as of 31 Mar 2017.
4. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a
manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further
information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document
should contact DBSVUSA exclusively.
Disclosure of previous investment recommendation produced:

5. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates may have published other
investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12
months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by
DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates in the preceding 12 months.
1
An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of
which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person
accustomed or obliged to act in accordance with the directions or instructions of the analyst.
2
Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or
a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This
term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or
new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.

Page 22
Market Focus
RESTRICTIONS ON DISTRIBUTION
General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or
located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be
contrary to law or regulation.
Australia This report is being distributed in Australia by DBS Bank Ltd. (DBS) or DBS Vickers Securities (Singapore) Pte Ltd
(DBSVS), both of which are exempted from the requirement to hold an Australian Financial Services Licence under the
Corporation Act 2001 (CA) in respect of financial services provided to the recipients. Both DBS and DBSVS are regulated
by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws. Distribution of this
report is intended only for wholesale investors within the meaning of the CA.
Hong Kong This report has been prepared by a person(s) who is not licensed by the Hong Kong Securities and Futures Commission to
carry on the regulated activity of advising on securities in Hong Kong pursuant to the Securities and Futures Ordinance
(Chapter 571 of the Laws of Hong Kong). This report is being distributed in Hong Kong and is attributable to DBS Vickers
Hong Kong Limited, a licensed corporation licensed by the Hong Kong Securities and Futures Commission to carry on the
regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of
Hong Kong).
This report has been prepared by an entity(ies) which is not licensed by the Hong Kong Securities and Futures Commission
to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of
the Laws of Hong Kong). This report is being distributed in Hong Kong and is attributable to DBS Vickers Hong Kong
Limited, a licensed corporation licensed by the Hong Kong Securities and Futures Commission to carry on the regulated
activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).
For any query regarding the materials herein, please contact Paul Yong (CE. No. ASE988) at equityresearch@dbs.com.
Indonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia.
Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from
ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this
report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised
that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected
and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any
of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek
to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also
have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and
other services from the subject companies.
Wong Ming Tek, Executive Director, ADBSR
Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No.
198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the
Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign
entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial
Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert
Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons
only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from,
or in connection with the report.
Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. Research reports distributed are only
intended for institutional clients only and no other person may act upon it.

Page 23
Market Focus
United This report is produced by DBS Bank Ltd which is regulated by the Monetary Authority of Singapore.
Kingdom
This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised
and regulated by the Financial Conduct Authority in the United Kingdom.
In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and
associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any
form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at
persons having professional experience in matters relating to investments. Any investment activity following from this
communication will only be engaged in with such persons. Persons who do not have professional experience in matters
relating to investments should not rely on this communication.
Dubai This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3rd Floor,
Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank
Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for
professional clients (as defined in the DFSA rulebook) and no other person may act upon it.
United States This report was prepared by DBS Bank Ltd. DBSVUSA did not participate in its preparation. The research analyst(s) named
on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research
analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company,
public appearances and trading securities held by a research analyst. This report is being distributed in the United States by
DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional
Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may
authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should
contact DBSVUSA directly and not its affiliate.
Other In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified,
jurisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
AllianceDBS Research Sdn Bhd

(128540 U)
19th Floor, Menara Multi-Purpose, Capital Square,
8 Jalan Munshi Abdullah 50100
Kuala Lumpur, Malaysia.
Tel.: +603 2604 3333 Fax: +603 2604 3921 email : general@alliancedbs.com

Page 24

DBS Vickers May Monthly Strategy

Transféré par

Informations du document

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

DBS Vickers May Monthly Strategy

Transféré par

Droits d'auteur :

Formats disponibles

Malaysia Market Focus

Malaysia Monthly Strategy

DBS Group Research . Equity 5 May 2017

Dont count the chips yet

ASIAN INSIGHTS VICKERS SECURITIES

investors remained strong with net inflow of RM2.7bn -10

In contrast, foreign holdings of governments debt, which 2.5

includes Malaysian Government Securities (MGS), have been 2.0

curb speculative activities on the MYR via the non-deliverable

ASIAN INSIGHTS VICKERS SECURITIES

US Dollar index and USD/MYR exchange rate Malaysia exports growth

Source: Department of Statistics

ASIAN INSIGHTS VICKERS SECURITIES

Amid a risk-on global investment climate, the recent rally in

setback in developing the iconic Bandar Malaysia project will 1050

Source: Bloomberg Finance L.P,

100 For stock selection, we prefer cyclical to defensive stocks and

ASIAN INSIGHTS VICKERS SECURITIES

ASIAN INSIGHTS VICKERS SECURITIES

Earnings estimates for AllianceDBS's coverage sectors (CY17 and CY18)

Top stock picks

P/E EPS Growth (YoY) Dividend Yield Price/ BVPS ROAE

Recommen Target Current Market

Source: AllianceDBS Price date: 4 May 2017

ASIAN INSIGHTS VICKERS SECURITIES

ASIAN INSIGHTS VICKERS SECURITIES

Sector Outlook (contd)

ASIAN INSIGHTS VICKERS SECURITIES

Sector Outlook (contd)

ASIAN INSIGHTS VICKERS SECURITIES

Sector Outlook (contd)

ASIAN INSIGHTS VICKERS SECURITIES

Sector Outlook (contd)

ASIAN INSIGHTS VICKERS SECURITIES

Sector Outlook (contd)

ASIAN INSIGHTS VICKERS SECURITIES

Sector Outlook (contd)

ASIAN INSIGHTS VICKERS SECURITIES

Top Stock Picks

ASIAN INSIGHTS VICKERS SECURITIES

Top Stock Picks (contd)

ASIAN INSIGHTS VICKERS SECURITIES

Top Stock Picks (contd)

ASIAN INSIGHTS VICKERS SECURITIES

Company Revision to Recommendation Revision Date Rationale

ASIAN INSIGHTS VICKERS SECURITIES

Best and worst-performing stocks in AllianceDBS coverage in April

Big Caps (>USD2bn) Small & Mid-Caps (<USD2bn)

Source: AllianceDBS, Bloomberg Finance L.P

ASIAN INSIGHTS VICKERS SECURITIES

ASIAN INSIGHTS VICKERS SECURITIES

Source: Department of Statistics Source: Department of Statistics

Source: Department of Statistics, Markit Source: Department of Statistics

2,500 30% 250

2,000 20% 200

1,500 10% 150 Trump

Source: Malaysian Palm Oil Board Source: Bloomberg Finance L.P

ASIAN INSIGHTS VICKERS SECURITIES

Completed Date: 5 May 2017 08:27:05 (MYT)

ASIAN INSIGHTS VICKERS SECURITIES

COMPANY-SPECIFIC / REGULATORY DISCLOSURES

Compensation for investment banking services:

Disclosure of previous investment recommendation produced:

ASIAN INSIGHTS VICKERS SECURITIES