Affin Daily Insight (LV) - 22 May 2014 - JTIASA / KLK / HLBK / MSM / STAR / AQRS / JTI / ECONOMY - CPI / DMR

Top Calls

Results Note � Jaya Tiasa (REDUCE, maintain) - Revenue declined on lower timber sales volume Jaya Tiasa�s 9MFY14 revenue declined by 4.3% yoy to RM762.9m, mainly due to lower contribution from its timber division. Despite posting a lower revenue in 9MFY14, Jaya Tiasa�s core net profit increased substantially to RM54.4m (+450.3% yoy) after taking into account the impairment of financial assets coupled with fair value loss on derivative assets. 9MFY14 core net profit is nevertheless below expectations, accounting for 51% and 48% of our and consensus full year FY14 estimates respectively. In view of Jaya Tiasa�s unsatisfactory performance to-date, we have lowered our projected log and plywood production and raised cost assumptions. At the same time, we adjust on 2015-2016 CPO average selling price assumption to RM2,850/MT (previously RM2,700/MT), inline with our recent upgrade in the plantation sector. As a result, our earnings forecasts has been cut by 8-25% for FY14-16E. Rolling forward our valuation horizon to CY15, our SOP-derived target price is raised to RM2.59 (previously RM2.26). Rating for Jaya Tiasa is maintained at REDUCE.

Other Calls

Results Note � KL Kepong (ADD, maintain) - Within expectations

Results Note � Hong Leong Bank (BUY, maintain) - No negative surprises, results in line

Results Note � MSM (REDUCE, maintain) - Domestic sales continue to disappoint

Results Note � Star Publ. (SELL, maintain) - Disappointment from print segment continues

Results Note - Gabungan AQRS (ADD, maintain) - Earnings improved, within expectations

Flash Note � JT International (BUY, maintain) - Good news! Minorities to get higher price!

Economy � CPI - Headline inflation moderated slightly to 3.4% yoy in April

Debt Market Research - Barging hunting on decent volumes, �new neutral� beckons

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