On Our Portfolio

23 November 2015

PP7004/02/2013(031762) Page 1 of 9

On Our Portfolio

Looking Down By the Kenanga Research Team l research@kenanga.com.my

As we enter the final week of the 3QCY15 reporting season, corp orate earnings report cards remain the main factor driving the FBMKLCI th is week. Barring any major negative earnings surprises, we expect the 30-stock index to continue its range bound mode this week. Technically-speaking, the FBMKLCI is still we ak, underpinned by the listless key momentum indicators. We continue to view that the l ocal bourse will trend with downside-bias to fill the gap at 1,647/52 this week before r ebounding towards the 1,674/80 level. Sell-on-Strength strategy is still in play if the index breaches the 1,700 level. Portfolio-performance-wise, THEMATIC portfolio was the only o utperformer (supported by HARTA) with its value outpacing the FBMKLCI by another 3,8 10bps WoW. Meanwhile, all portfolios still outperformed the barometer index by 664-3,404 bps based on YTD basis.

All eyes on c orporate report cards. We expect the FBMKLCI to continue its range bound mode this week barring any unforeseen circumstances. Having said that, being the final week of the 3QCY15 reporting season, the direction of the local bourse this week, to a huge extend, will be very much influenced by the corporate earnings. We are expecting more than 50 results to be released under our core coverage list. Thus far, 62 companies under our coverage have released their respective 3QCY15 report cards, of which 55% (or 34 companies) came in within, but 31% failed to deliver. Technically speaking, the FBMKLCI still weak, underpinned by the listless key momentum indicators. We continue to view that the local bourse will trend with downside-bias to fill the gap at 1,647/52 this week before rebounding

towards the 1,674/80 level. Sell-on-Strength strategy is still in play if the index breaches the 1,700 level. On the external front, the US is scheduled to release its 3Q GDP and November’s consumer confidence index on Tuesday where Bloomberg’s surveys are expecting the numbers to come in at 2.0% QoQ (vs. 1.5% QoQ in 2QCY15) and 99.2, respectively.

Countdown to December’s FOMC. Despite overhanging concerns arising from potential terrorist threats, the external picture somehow turned more encouraging last week as U.S. stocks rallied most of the time last week. This came about after the Federal Reserve bolstered confidence in the strength of the U.S. economy and reinforced speculation that the interest rate increases will be gradual. It signalled that “it may well be appropriate” to raise rates next month, according to minutes of the October 27-28 meeting. Economic data since then have also been encouraging, which lifted the probability for the benchmark rate hike this year to 66%, according to futures data compiled by Bloomberg. The improved external picture, however, did not lift the local market with the FBMKLCI continued to be trapped in a tight trading range last week. Foreign investors, meanwhile, remained in net selling position last week and recorded a total net outflow of RM228m (as of last Thursday). At last Friday’s closing bell, the barometer index inched up 0.18% or 2.98pts WoW to settle at 1,661.89, which was led by TNB (+0.61%), AXIATA (+0.98%) and PBK (+0.44%).

Generally listless weekly portfolios’ performance, with most of the invested stocks posting weekly losses except HARTA (+9.43%) which bucked the trend with a decent weekly gain of 9.43% (or RM1,650 for THEMATIC portfolio). Likewise, BJTOTO as well as DIGI also bucked the macro weakness with marginal weekly growth of 0.07% and 0.33%, respectively. Among all the portfolios, THEMATIC portfolio was the only outperformer (supported by HARTA), outpacing the FBMKLCI by another 3.81ppts weekly. While DIVIDEND YIELD portfolio dropped marginally by 0.76% WoW with marginal appreciation of BJTOTO and DIGI offsetting LUXCHEM’s feeble performance (-3.90%), GROWTH portfolio experienced the sharpest drop among all the portfolios, dragged by lacklustre performances of PESTECH (-3.71%) and LUXCHEM (-3.90%). On a YTD basis, GROWTH Portfolio remains the top performer with YTD total returns of 31.42%, as compared to FBMKLCI’s -2.62%, followed by THEMATIC (+24.87%) and DIVIDEND YIELD Portfolios (+4.02%).

Total Return (%) Key economic events to watch Date Consensus WoW YTD

FBMKLCI 0.21 -2.62% Malaysia CPI YoY – Oct 20-Nov 2.5% Thematic 4.02 24.87% US GDP Annualized QoQ – 3Q S 24-Nov 2.0% Growth -3.80 31.42% University of Mich. Sentiment – Nov F 25-Nov 93.0 Dividend Yield -0.76 4.02% China Industrial Profits YoY – Oct 27-Nov N.A.

On Our Portfolio 23 November 2015

PP7004/02/2013(031762) Page 2 of 9

Figure 1: FBMKLCI Daily Charting

Source: Kenanga Research

Lacklustre trading expected to go on. Post the recent terrorist attack on Paris a week ago, investors’ sentiment turned tepid in tandem with the lack of catalyst on the market. The continued weakening of the Ringgit against the Greenback as well as uninspiring crude oil prices had also dampened market sentiment further. As a result, the FBMKLCI traded sideways throughout last week as it failed to fill the gap at 1,647/52. Overall, the technical picture for the FBMKLCI is still weak, underpinned by the listless key momentum indicators. Besides, we continue to expect a more subdued approach by investors in the near-term, as we approach the final FOMC meeting this year (16-17 December). In tandem with the lacklustre economic sentiment, we continue to view that the local bourse will trend downside-bias to fill the gap at 1,647/52 this week before rebounding towards the 1,674/80 level. Sell-on-Strength’ strategy is still in play if the index breaches the 1,700 level.

Technical Ratings

Resistance 2 1700 MACD Neutral

Resistance 1 1680 Stochastic Oversold Current Level 1660.06 RSI Neutral Support 1 1643

Support 2 1623 Outlook Downside -bias

Figure 2 : USDMYR Daily Chart ing

Source: Kenanga Research

On Our Portfolio 23 November 2015

PP7004/02/2013(031762) Page 3 of 9

Retail Model Portfolio – THEMATIC

No CATS Code Industry / Company

Last Buy/Sell

Date

No. of Shares

Average Cost

Avg Cost/ Share

Share Price

@ 20 Nov

15

Value Unrealised Profit / (Loss)

% Change YTD

Weighting (as % of

NAV)

Latest Dividend Ex-

Date

Gross Div

Consensus 12M Div

Yield

KNK’s/ Consensus’

TP

Potential Upside/

Downside

RM RM RM RM RM % % RM % RM % 1 5168 HARTALEGA HOLDINGS BHD 2-Jan-15 5,000 17,500 3.500 5.960 29,800 12,300 70.29% 17.5% 12/8/2015 0.02 1.09 4.75 -20.3%

2 5219 PESTECH INTERNATIONAL BHD 2-Jan-15 3,500 12,250 3.500 6.910 24,185 11,935 97.43% 12.3% 4/14/2015 0.04 0.58 6.11 -11.6%

29,750 53,985 24,235 81.46% 29.8% 0.26

Total Dividend Received YTD 600

Total Realised Return 30

Total Return (based on the total allocated amount ) 24,865 24.87%

KLCI FBMKLCI Index 1,752.77 1,661.89 (90.88) -5.18% 3.22

KLCI – TOTAL RETURN -2.62%

Total Realised Return No. CATS Code Industry / Company Last Buy/Sell Date No of Shares Cost @ Avg Cost/Share Share Price @ Value Realised % Change

RM RM RM RM RM % 1 1023 CIMB GROUP HOLDINGS BHD

13-Jan-15 2,000 11,840 5.920 5.50 11,000 (840) -7.09%

2 5115 ALAM MARITIM RESOURCES BHD 3-Mar-15 15,000 11,850 0.790 0.725 10,875 (975) -8.23% 3 5218 SAPURAKENCANA PETROLEUM BHD 13-Mar-15 3,000 7,050 2.350 2.340 7,020 (30) -0.43% 4 5347 TENAGA NASIONAL BHD 18-Jun-15 1,000 13,800 13.800 12.600 12,600 (1,200) -8.70% 5 5267 XIN HWA HOLDINGS BHD 16-Jul-15 5,000 13,425 0.895 1.190 17,850 4,425 32.96% 6 0032 REDTONE INTERNATIONAL BHD 30-Jan-15 30,000 22,200 0.740 0.720 21,600 (600) -2.70% 7 7174 CAB CAKARAN CORP BHD 2-Mar-15 5,000 4,650 0.930 0.985 4,925 275 5.91% 8 7117 CENTURY LOGISTICS HOLDINGS B 15-May-15 15,000 13,625 0.908 0.840 12,600 (1,025) -7.52% 30

Total Dividends Received No CATS Code Company No. of Shares Ex-Date Gross Div Div Rec 1 5218 SAPURAKENCANA PETROLEUM BHD 3,000 1/12/2015 0.02 60.00

2 5168 HARTALEGA HOLDINGS BHD 2,500 3-Mar-15 0.03 75.00

3 5219 PESTECH INTERNATIONAL BHD 3,500 14-Apr-15 0.04 140.00

4 5347 TENAGA NASIONAL BHD 1,000 18/5/2015 0.10 100.00

5 5168 HARTALEGA HOLDINGS BHD 2,500 19/5/2015 0.03 75.00

6 7117 CENTURY LOGISTICS HOLDINGS B 5,000 1-Jun-15 0.01 50.00

7 5168 HARTALEGA HOLDINGS BHD 2,500 11-Sep-15 0.04 100.00

TOTAL DIVIDEND RECEIVED 600.00

On Our Portfolio 23 November 2015

PP7004/02/2013(031762) Page 4 of 9

Retail Model Portfolio - GROWTH

No CATS Code Company

Last Buy/Sell

Date

No. of Shares

Average Cost

Avg Cost/ Share

Share Price

@ 20 Nov

15

Value Unrealised

Profit / (Loss)

% Change

YTD

Weighting (as % of

NAV)

Latest Dividend Ex-Date

Gross Div

Consensus 12M Div

Yield

KNK’s/ Consensus’

TP

Potential Upside/

Downside

RM RM RM RM RM % % RM % RM %

1 5219 PESTECH INTERNATIONAL BHD 2-Jan-15 5,000 17,500 3.500 6.910 34,550 17,050 97.43% 17.50% 4/14/2015 0.04 0.58 6.11 -11.6%

2 5143 LUXCHEM CORP BHD 7-Oct-15 10,000 15,400 1.540 1.730 17,300 1,900 12.34% 15.40% 9/11/2015 0.02 2.89 1.85 6.9%

32,900 51,850 18,950 57.60% 32.90% 0.55

Total Dividend Received YTD 830

Total Realised Return 11,640

Total Return (based on the total allocated amount ) 31,420 31.42%

KLCI FBMKLCI Index 1,752.77 1,661.89 (90.88) -5.18% 3.22

KLCI – TOTAL RETURN -2.62%

Total Realised Return No. CATS Code Industry / Company Last Buy/Sell Date No of Shares Cost @ Avg Cost/Share Share Price @ Value Realised % Change

RM RM RM RM RM % 1 5218 SAPURAKENCANA PETROLEUM BHD 13-Mar-15 3,000 7,050 2.350 2.340 7,020 (30) -0.43%

2 7081 PHARMANIAGA BERHAD 22-Apr-15 3,500 16,030 4.580 7.300 25,550 9,520 59.39%

3 5347 TENAGA NASIONAL BHD 18-Jun-15 1,000 13,800 13.800 12.600 12,600 (1,200) -8.70%

4 5267 XIN HWA HOLDINGS BHD 16-Jul-15 5,000 13,425 0.895 1.190 17,850 4,425 32.96%

5 0032 REDTONE INTERNATIONAL BHD 30-Jan-15 30,000 22,200 0.740 0.720 21,600 (600) -2.70%

6 7174 CAB CAKARAN CORP BHD 2-Mar-15 10,000 9,300 0.930 0.985 9,850 550 5.91%

7 7117 CENTURY LOGISTICS HOLDINGS B 15-May-15 15,000 13,625 0.908 0.840 12,600 (1,025) -7.52%

11,640

Total Dividends Received No CATS Code Company No. of Shares Ex-Date Gross Div Div Rec 1 5218 SAPURAKENCANA PETROLEUM BHD 3,000 12-Jan-15 0.02 60.00

2 7081 PHARMANIAGA BERHAD 3,500 9-Mar-15 0.12 420.00

3 5219 PESTECH INTERNATIONAL BHD 5,000 14-Apr-15 0.04 200.00

4 5347 TENAGA NASIONAL BHD 1,000 18-May-15 0.10 100.00

5 7117 CENTURY LOGISTICS HOLDINGS B 5,000 1-Jun-15 0.01 50.00

TOTAL DIVIDEND RECEIVED 830.00

On Our Portfolio 23 November 2015

PP7004/02/2013(031762) Page 5 of 9

Retail Model Portfolio – DIVIDEND YIELD

No CATS Code Industry / Company

Last Buy/Sell

Date

No. of Shares

Average Cost

Avg Cost/ Share

Share Price

@ 20 Nov

15

Value Unrealised Profit / (Loss)

% Change

YTD

Weighting (as % of

NAV)

Latest Dividend Ex-Date

Gross Div

Consensus 12M Div

Yield

KNK’s/ Consensus’

TP

Potential Upside/

Downside

RM RM RM RM RM % % RM % RM % 1 1562 BERJAYA SPORTS TOTO BHD 2-Jan-15 10,071 34,200 3.396 3.12 31,423 (2,777) -8.12% 34.2% 10/8/2015 0.02 5.89 4.25 36.2%

2 6947 DIGI.COM BHD 11-May-15 3,000 18,090 6.030 5.100 15,300 (2,790) -15.42% 18.1% 11/6/2015 0.05 4.76 6.87 34.7%

3 5143 LUXCHEM CORP BHD 7-Oct-15 10,000 15,400 1.540 1.730 17,300 1,900 12.34% 15.4% 9/11/2015 0.02 2.89 1.85 6.9%

67,690 64,023 (3,667) -5.42% 67.7% 3.32

Total Dividend Received YTD 2,383

Total Realised Return 5,305

Total Return (based on the total allocated amount ) 4,021 4.02%

KLCI FBMKLCI Index 1,752.77 1,661.89 (90.88) -5.18% 3.22

KLCI – TOTAL RETURN -2.62%

Total Realised Return No. CATS Code Industry / Company Last Buy/Sell Date No of Shares Cost @ Avg Cost/Share Share Price @ Value Realised % Change

RM RM RM RM RM % 1 5218 SAPURAKENCANA PETROLEUM BHD 13-Mar-15 3,000 7,050 2.35 2.34 7,020 (30) -0.43% 2 7081 PHARMANIAGA BERHAD 22-Apr-15 3,000 13,740 4.58 7.300 21,900 8,160 59.39% 3 5347 TENAGA NASIONAL BHD 18-Jun-15 1,000 13,800 13.80 12.600 12,600 (1,200) -8.70% 4 0032 REDTONE INTERNATIONAL BHD 30-Jan-15 30,000 22,200 0.74 0.720 21,600 (600) -2.70% 5 7117 CENTURY LOGISTICS HOLDINGS B 15-May-15 15,000 13,625 0.91 0.840 12,600 (1,025) -7.52% 5,305

Total Dividends Received No CATS Code Company No. of Shares Ex-Date Gross Div Div Rec 1 5218 SAPURAKENCANA PETROLEUM BHD 3,000 1/12/2015 0.02 60.00

2 1562 BERJAYA SPORTS TOTO BHD 5,000 28-Jan-15 0.06 300.00

3 7081 PHARMANIAGA BERHAD 3,000 9-Mar-15 0.12 360.00

4 1562 BERJAYA SPORTS TOTO BHD 5,000 6-Apr-15 0.05 250.00

5 6947 DIGI.COM BHD 3,000 13-May-15 0.06 183.00

6 5347 TENAGA NASIONAL BHD 1,000 18-May-15 0.10 100.00

7 7117 CENTURY LOGISTICS HOLDINGS B 5,000 1-Jun-15 0.01 50.00

8 1562 BERJAYA SPORTS TOTO BHD 10,000 15-Jul-15 0.05 500.00

9 6947 DIGI.COM BHD 3,000 5-Aug-15 0.06 177.00

10 1562 BERJAYA SPORTS TOTO BHD 10,071 8-Oct-15 0.02 250.00

TOTAL DIVIDEND RECEIVED 2,230.00

On Our Portfolio 23 November 2015

PP7004/02/2013(031762) Page 6 of 9

Portfolios Total Return 2013 (based on the total al located amount) vs FBMKLCI Performance

Source: Bloomberg, Kenanga Research Portfolios Total Return 2014 (based on the total al located amount) vs FBMKLCI Performance

Source: Bloomberg, Kenanga Research Portfolios Total Return 2015 (based on the total al located amount) vs FBMKLCI Performance

Source: Bloomberg, Kenanga Research

On Our Portfolio 23 November 2015

PP7004/02/2013(031762) Page 7 of 9

TASCO 2QFY16 Result Highlight (12-Nov-15) Current Rating: Trading Buy Current TP: RM5.41

2Q 1Q QoQ 2Q YoY 3M 3M YoY

Y/E : Aug (RM'm) FY16 FY16 Chg FY15 Chg FY16 FY16 Chg

Turnover 127.9 118.8 7.6% 122.6 4.3% 246.7 257.4 -4.2%

PBT 9.6 8.3 16.0% 10.9 -11.9% 17.9 24.2 -26.2%

Net Profit (NP) 7.1 6.1 16.6% 8.1 -12.2% 13.2 18.1 -27.0%

FD EPS (sen) 7.1 6.1 16.6% 8.1 -12.2% 13.2 18.1 -27.0%

Revenue Growth 8% 4% -4%

PBT Margin 8% 7% 9% 7% 9%

Net Profit Margin 6% 5% 7% 5% 7%

Brief result commentary: Tasco’s 1H16 net profit of RM13.2m was below our expectation and merely accounted for c.38.6% (vs. 59.2% in 1H15) of the full-year earnings estimate. The lower than expected 1H16 result were mainly due to its poor 1Q16 numbers (as a result of the slowdown in the global trade cycle, which led the group’s International Business Solutions and domestics Business Solutions segments to record a lower earnings), albeit the 2Q16 has showed some signs of recovery. We are likely to lower our earnings forecast and target price in the upcoming company update report.

JAKS 3QFY15 Result Highlight (17-Nov-15) Current Rating: Trading Buy Current TP: 1.53

3Q 2Q QoQ 3Q YoY 9M 9M YoY

Y/E : Jul (RM'm) FY15 FY15 Chg FY14 Chg FY15 FY14 Chg

Turnover 114.2 66.7 71.1% 93.8 21.7% 314.2 301.8 4.1%

PBT 10.2 4.1 149.3% 8.6 17.9% 26.8 31.1 -13.8%

Net Profit (NP) 5.9 2.1 181.9% 2.8 112.7% 12.2 7.1 73.4%

FD EPS (sen) 1.4 0.7 82.4% 0.6 114.3% 2.8 1.6 73.3%

Revenue Growth 71% 22% 4%

PBT Margin 9% 6% 9% 9% 10%

Net Profit Margin 5% 3% 3% 4% 2%

Brief result commentary: Below expectation. JAKS’s 9M15 net profit of RM12.2m was merely accounted for c.63.5% of our full-year earnings estimate. The key negative culprit was mainly due to the higher than expected finance cost and effective tax rate. Moving forward, the group’s construction division existing order book is expected continue to be its main earnings driver. Nevertheless, the sales of commercial and residential units of the property development division’s performance has been affected by the tighter lending from banks and weak buyer sentiment post GST. Post result review, we are likely to revise our earnings forecast and target price lower.

HOHUP 3QFY15 Result Highlight (18-Nov-15) Current Rating: Trading Buy C urrent TP: 1.55

3Q 2Q QoQ 3Q YoY 9M 9M YoY

Y/E : Dec (RM'm) FY15 FY15 Chg FY14 Chg FY15 FY14 Chg

Turnover 62.8 61.6 2.0% 95.0 -33.9% 212.4 266.0 -20.1%

PBT 17.9 15.7 14.4% 24.5 -26.7% 56.1 52.5 6.8%

Net Profit (NP) 17.3 14.2 22.0% 18.5 -6.4% 51.6 46.8 10.1%

FD EPS (sen) 4.5 3.3 34.4% 5.0 -10.2% 13.2 12.8 2.7%

Revenue Growth 2% -34% -20%

PBT Margin 29% 25% 26% 26% 20%

Net Profit Margin 28% 23% 19% 24% 18%

Brief result commentary: Below expectation. The group’s 9M15 net profit of RM51.6m was merely accounted for 40.9% of our full year estimate. The lower the expected result was mainly due to slower progress billing. We are likely to lower our earnings forecast and target price in the upcoming company update report.

On Our Portfolio 23 November 2015

PP7004/02/2013(031762) Page 8 of 9

Daily Charting: FBMKLCI Weekly Charting: FBMKLCI

Daily Charting: FBM70 Weekly Charting: FBM70

Daily Charting: FBMSC Weekly Charting: FBMSC

Daily Charting: DJIA Weekly Charting: DJIA

Source: Bloomberg

On Our Portfolio 23 November 2015

PP7004/02/2013(031762) Page 9 of 9

Stock Ratings are defined as follows: Stock Recommendations OUTPERFORM : A particular stock’s Expected Total Return is MORE than 10% (an approximation to the 5-year annualised Total Return of FBMKLCI of 10.2%). MARKET PERFORM : A particular stock’s Expected Total Return is WITHIN the range of 3% to 10%. UNDERPERFORM : A particular stock’s Expected Total Return is LESS than 3% (an approximation to the 12-month Fixed Deposit Rate of 3.15% as a proxy to Risk-Free Rate). Sector Recommendations*** OVERWEIGHT : A particular sector’s Expected Total Return is MORE than 10% (an approximation to the 5-year annualised Total Return of FBMKLCI of 10.2%). NEUTRAL : A particular sector’s Expected Total Return is WITHIN the range of 3% to 10%. UNDERWEIGHT : A particular sector’s Expected Total Return is LESS than 3% (an approximation to the

12-month Fixed Deposit Rate of 3.15% as a proxy to Risk-Free Rate). ***Sector recommendations are defined based on market capitalisation weighted average expected total return for stocks under our coverage.

This document has been prepared for general circulation based on information obtained from sources believed to be reliable but we do not make any representations as to its accuracy or completeness. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may read this document. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees. Kenanga Investment Bank Berhad accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or any solicitations of an offer to buy or sell any securities. Kenanga Investment Bank Berhad and its associates, their directors, and/or employees may have positions in, and may effect transactions in securities mentioned herein from time to time in the open market or otherwise, and may receive brokerage fees or act as principal or agent in dealings with respect to these companies.

Published and printed by: KENANGA INVESTMENT BANK BERHAD (15678-H) 8th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia Chan Ken Yew Telephone: (603) 2166 6822 Facsimile: (603) 2166 6823 Website: www.kenanga.com.my Head of Research