CY1Q15 results disappoint for 16th consecutive quarter, says HLIB Research

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KUALA LUMPUR (June 2): CY1Q15 results disappointed again for 16th consecutive quarters, according to Hong Leong IB Research (HLIB Research).

In a note today, the research house said 2015 EPS growth was cut to 4% (versus 6.2%), but due to lower base 2016 was higher at 7.5% (versus 6.9%).

“Among HLIB universe, 31% below while 14 above, similarly, versus street, 38% and 13%, respectively.  HLIB earnings revision ratio deteriorated to 2.2x from 2.5x. 

“With sentiment subdued amid domestic issues, market is likely to remain lacklustre in short-term,” said the research house.  

However, HLIB Research said correction to grossly oversold position provides opportunities given mid-year window dressing ahead, opportunity from volatile May, 11MP, ample liquidity and lower foreign ownership.    

“With KLCI P/E now 0.5SD below mean, opportune time to seize 1-in-5-year MP opportunity to positon our year end unchanged KLCI target of 1,880.

“Same stock picks strategy: 1) sector upturn (especially 11MP); 2) resilient and visible growth; 3) yield; 4) US$ / raw-mat beneficiaries; and 5) battered stocks.  

“Our top picks are Astro Malaysia Bhd, Axiata Group Bhd, Evergreen Fibreboard Bhd, UEM Edgenta Bhd, IJM Corporation Bhd, KNM Group Bhd, Malayan Banking Bhd, Mitrajaya Holdings Bhd, Malaysian Resources Corporation Bhd-Quill REIT, Sasbadi Holdings Bhd, Time Dotcom Bhd and Tenaga Nasional Bhd,” it said.