KUALA LUMPUR (March 5): Hong Leong IB Research said that fourth quarter 2017 (4Q17) results season, 58% of its coverage came in within expectations, 25% below and 17% above.
In a 4Q report card, the research house said the proportion of results that were within expectations (58%) at the highest in 4 years while those that disappointed (25%) were the lowest.
It said for the disappointments, 55% were due to cost factors, 30% revenue and 15% a combination of both.
HLIB Research said on earnings revision, 58% were unchanged, 22% upwards and 20% downwards; revision ratio of 0.92x improved for the 2nd consecutive quarter and was the 2nd highest recorded in 4 years.
“Estimate 2017 FBMKLCI earnings growth to have ended at 10%; 2018 growth forecast relatively unchanged at 7.8%.
“Foreigners turned net sellers (RM1.2 billion) in February after net buys in January (RM3.3 billion) and December (RM1 billion).
“Maintain FBM KLCI target of 1,880 based on 16.5x P/E tagged to 2018 earnings,” it said.
HLIB Research’s top picks: Tenaga Nasional Bhd, RHB Bank Bhd, Malaysia Airports Holdings Bhd, Genting Bhd, Gamuda Bhd, Sunway Bhd, DRB-Hicom Bhd, Mitrajaya Holdings Bhd, Lay Hong Bhd and MB World Group Bhd.