An early look into the 2018 Budget which would be tabled end of October.
Take a look at the whole summary of bank’s report card for 2nd quarter of 2017.
We think that banks had rallied and recovered the losses trading fair to what it is now but we still think that you should hold if you have already seen capital gains holding from last year plus dividend payout that were made.
From now on, the movement is likely broad market related and we do not think that the major banking blue chip would outperform the KLCI. But we are still holding it rather than returning to cash as most stock seem fairly valued too.
What’s your take?
Our high conviction stock post results for Q 2018 and in our view its not that satisfactory coming below our expectation. But the feel good factor comes knowing that there isn’t any deep selling done after a not so well quarter.
Institutions are buying recently with the names of Amanah Saham Bumiputera grabbing the stocks in bulk and this proves in fact showed that price to earnings would remain high with these institutional bodies on board.
If you have bought at a lower price to earnings premium then it is safe to say the asset you are holding on had been re-evaluated in terms of quality.
As attached, Maybank and CIMB reported and recommended a HOLD/Reduce rating for the stock. Since it falls on our high conviction target we are aggressive and holding on tight in return leveraging on this company’s growth.
Meanwhile the chart is showing us chances of a break over RM 5.00 with an ascending triangle in the making. A rough drawn triangle following the upward sloping line marks somewhere just before Nov to determine where it would head.
Coincidentally, it would be near to next quarter’s earnings release. We recommend buying on dips for this stock.
Click for Report
The outlook is still positive but we aren’t that optimistic towards this sector for 2H 2017. From the lack of new models and only the arrival of face-listed ones, we see that this segment still lacks catalyst for the time being.
Unlike Q4 of 2014 where most preferred brands such as Honda, Toyota and Perodua released multiple new models and big cuts to push out old models. It is hard for that period to come back which makes us ponder when should we buy undervalued automotive counters.
Maybank came out with a report today on Malaysian aviation sector. The report emphasizes on passenger traffic which at 10.4% YoY in 4Q 2016 and went overweight on stocks under its coverage.
Air Asia, Air Asia X and Malaysian Airports were included with only AAX being rated a HOLD. The respective earnings announcement dates are listed below.
AirAsia: 23 Feb, analyst briefing at 6pm
AirAsia X: 22 Feb, analyst briefing at 6pm
MAHB: 28 Feb (tentative)
What We Think?
We believe that AIRPORT is the biggest winner with the increase in passenger traffic for 4Q 2016. We believe that with those data, it is good to put a bet on AIRPORT at current price. We believe that the recent rise for AIRPORT have yet to factor in the results for 4Q 2016 as most of the movement was caused by the extension of concession extension.
Unlike airlines, airport gets a maximum exposure to any change in passenger traffic since there’s only one operator in Malaysia.
We are targeting revenue to come out slightly above RM 1,100 million which isn’t much growth in terms of QoQ comparison but stable rather than a drop which would likely hit stock prices.