KUALA LUMPUR (March 3): Hong Leong IB Research (HLIB) said CY4Q14 disappointed for 16 consecutive quarters with only 21.3% above but 30.3% below.
In a 4Q14 corporate earnings report card Tuesday, the research house said 2014 EPS was cut to -3.9% (versus -1.1%).
“But largely unchanged for 2015 at 7.2% (versus 7.3%) and 2016 at 6.6% (versus 6.8%).
“However, more companies and sectors above, lesser sectors below and better revision ratio.
“Still expect positive EPS growth in 2015 on economic growth (albeit slower), lower cost pressure (electricity and oil) and corporate tax cut,” it said.
HLIB said it expects the market to remain volatile and subdued in 1H on earnings disappointments, low commodities prices, lack of catalysts and failure penetrate 1,820 (downtrend line) and 1,830 (200-day SMA).
“Thus, we continued to advocate buy on weakness with stock specific focus on sector upturn, resilient and visible growth, high yield with defendable earnings, M&A play and US$/material beneficiaries.
“Top picks are Air Asia Bhd, Astro Malaysia Holdings Bhd, Gamuda Bhd, IJM Corporation Bhd, Malayan Banking Bhd, RHB Capital Bhd and Tenaga Nasional Bhd for big caps as well as Inari Amertron Bhd, Mitrajaya Holdings Bhd, Pharmaniaga Holdings Bhd, Quill Capita Trust and Time DotCom Bhd,”it said.