马来西亚市场策略：该面对现实了

1、Equity ResearchAsia Pacific | MalaysiaMalaysia Market StrategyTime for a reality checkInvestment Strategy | Strategy Significant deterioration in macro outlook. We expect Malaysias economy to potentially shrink by 5% in 2020 and recover 6% next year, subject to review should there be further extensi

2、ons to the lockdown. Unemployment rate could rise to an all-time high of 4%, and poses significant risk to private consumption, which is a major GDP driver. More downside risk to streets earnings. CS corporate earnings forecasts for themarket have been reduced by 20% for 2020F and 14% for 2021F over

3、 the past month. CS is now forecasting a net profit contraction by 12.5% in 2020 followed by a recovery in 2021 by 23.5%. Despite cuts in streets net profit estimates for 2020 and 2021 by 12.5% and 9.8%, respectively, we still see room for downward revisions. Streets net profit forecast for 2020F is

4、 8.1% above CS forecast but are both in line for 2021F. Valuations not pricing in recession. The market (based on CS coverage) is trading ona forward P/E multiple of 15.8x, slightly higher than the long-term average of 15x. However, the market has historically traded more than 1 SD below historic av

5、erage P/E during previous economic recessions (8.7x during AFC and 11.4x during GFC). Stick to stocks with resilient earnings. We reset our 2020 KLCI target at 1,361 andour 2021 KLCI target has been set at 1,554. While we expect the KLCI to be relatively unchanged by end-2020, historical correlation

6、 between GDP and KLCI suggests there could be risk of a material market de-rating by as much as 20% in 2Q-3Q 2020 as economic conditions deteriorate. In our view, stocks/sectors that could fare comparatively better: rubber (TOPG, Karex), healthcare (IHH), power (TNB, MLK), telcos (Maxis, TimeDotCom)

7、, high-yield consumer stocks (BAT, Astro), contractors (Econpile, Gamuda, IJM), and MYEG.Figure 1: KLCI corrected 39-52% during the past two economic recessionsResearch AnalystsDanny Goh60 3 2723 2083 HYPERLINK mailto:danny.goh danny.goh2,0001,8001,6001,4001,2001,000800600400200-1,4451,238-39%877-1.

8、5%594-52%-7.4%19961997199819992000200120022003200420052006200720082009201020112012201320142015201620172018201912.0%10.0%8.0%6.0%4.0%2.0%0.0%-2.0%-4.0%-6.0%-8.0%-10.0%KLCIGDP (constant prices)Source: Department of Statistics (DOSM), The BLOOMBERG PROFESSIONAL serviceDISCLOSURE APPENDIX AT THE BACK OF

9、 THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a co

10、nflict of interest that couldFocus chartsFigure 2: Improving stats on COVID-19Figure 3: Unemployment rate expected to rise to all-time high Phase 1Phase 2 of MCO of MCOPhase 3 of MCO25-Jan1-Feb8-Feb15-Feb 22-Feb 29-Feb7-Mar14-Mar 21-Mar 28-Mar4-Apr11-Apr18-Apr25-AprNew CasesNew RecoveriesMalaysia Co

11、vid-19 New Cases & New Recoveries250200150100500Source: Ministry of Health (MoH)Source: DOSM, Credit Suisse estimatesFigure 4: Downside risk to streets earnings and GDP forecast Figure 5: P/E not reflecting recession scenario12.0%10.0%8.0%6.0%4.0%2.0%0.0%-2.0%6.1%5.5%6.0%4.5%5.1%4.9%3.6%3.5%4.1%3.0%

12、5.3%7.4%6.7%5.5%6.4%6.2%7.0%9.9%1.5%0.9%0.5%6.4%6.1%7.1%1.8%5.3%5.1%4.9%4.7%4.5%4.3%4.1%3.9%20.018.016.014.012.010.0P/E vs GDPAvg: 14.9x+1 std dev: 16.9x 15.8-1 std dev: 12.8x-1.5%11.4-7.4%-5.0%8.712.0%10.0%8.0%6.0%4.0%2.0%0.0%-2.0%-4.0%-6.0%-4.0%-6.0%CS 2020 growth est = -12.5%-4.8%3.7%3.5%8.01996

13、1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020F-8.0%-10.0%Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-202020 strt est growtGDP forecast RHSP/E Avg +1 std dev -1 std devGDP (constant prices)Source: IBES estimates, Credit Suisse estimatesSource:

14、 The BLOOMBERG PROFESSIONAL service, Credit Suisse estimatesFigure 6: Top picks summary valuation tableRating3M ADV (USD mn)Price (RM)YTD perfTarget Price (RM)P/E (2020E)P/B (2020E)Div Yld (2020E)TOPGO19.57.1747%7.2034.26.71.5%TNBO16.112.16-3%14.3013.81.04.3%MYEGO15.51.197%1.5016.14.11.9%IHHO6.85.11

15、-5%6.0593.22.00.2%BATO5.911.68-23%14.6010.28.09.6%GamudaO5.03.20-18%3.6311.90.83.8%MaxisO3.05.311%6.4526.85.93.8%IJMO1.91.65-24%2.2514.20.52.8%TDCO1.99.788%11.3015.01.92.7%AstroO1.20.89-36%1.208.04.79.2%EconpileO0.90.53-30%0.7019.11.61.3%MalakoffO0.40.871%1.1016.80.86.0%KarexO0.40.47-0.230.6030.50.9

16、1.6%Source: Credit Suisse estimatesTime for a reality checkSignificant deterioration in macro outlookWe expect Malaysias economy to potentially shrink by 5% in 2020 and recover 6% next year. The GDP growth forecasts are subject to review should there be further extensions to MCO (Movement Control Or

17、der). While the central bank has issued an official forecast of -2% to+0.5%, we see downside risk to the estimates as: (1) the forecast has only factored in 4 weeks of MCO while the government has already since extended it to 8 weeks; (2) unemployment could rise to an all-time high of more than 4%;

18、(3) private consumption could fall short of BNMs 4.2% growth forecast; (4) disruptions caused by MCO could weigh on private investments.More downside risk for streets earningsIn light of the material deterioration in the economic outlook due to the prolonged restrictions on business activity as well

19、 as peoples movement, caused by the COVID-19 outbreak, CS corporate earnings forecasts for the market have been reduced by 20% for 2020F and 14% for 2021F over the past month. Following the cuts in net earnings projections, CS is now forecasting a net profit contraction by 12.5% in 2020 followed by

20、a recovery in 2021 by 23.5%. Despite cuts in streets net profit estimates for 2020 and 2021 by 12.5% and 9.8%, respectively, we still see room for downward revisions. Streets net profit forecast for 2020F is 8.1% above CS forecast but are both in line for 2021F.Valuations not pricing in recessionMal

21、aysia is the second-best-performing market in Asia YTD and is only lower by 13% YTD. We attribute the strength of the market to the favourable response of investors to the governments measures to contain the spread of COVID-19 and fiscal stimulus measures to cushion the economy from effects of the v

22、irus. The market (based on CS coverage) is trading on forward P/E multiple of 15.8x, slightly higher than the long term average of 15x. However, it is worth highlighting that the market has historically traded more than 1 SD below historic average P/E during previous economic recessions (8.7x during

23、 AFC and 11.4x during GFC). The P/E premium to other ASEAN peers is now at 16% (vs historic average of 3%). On P/BV, the market looks inexpensive at 1.3x (1 SD below historical mean of 1.9x) and close to an all-time low (lowest was during AFC at 1.2x). However, forecasted ROE of 8.5% for 2020 is bel

24、ow the historical mean of 13% and below GFC average of 12% during GFC.Stick to stocks with resilient earningsFollowing the slew of downgrades in earnings forecasts, we reset our 2020 KLCI target at 1,361 and in anticipation of an economic recovery next year our 2021 KLCI target has been set at 1,554

25、. While we expect the KLCI to be relatively unchanged by end 2020, historical correlation between GDP and KLCI suggests there could be risk of a material market de-rating by as much as 20% in 2Q-3Q 2020 as economic conditions deteriorate. Assuming a de-rating to at least 1 SD below historical averag

26、e (i.e., 12.8x P/E) implies a pullback by close to 20%. Past trading experience suggests that the market tends to track economic data. In our view, stocks/sectors that could fare comparatively better, given the concerns over COVID-19 and economic headwinds are: rubber (Top Glove, Karex), healthcare

27、(IHH), power (TNB, Malakoff), telcos (Maxis, TimeDotCom), high-yield consumer stocks (BAT, Astro), contractors (Econpile, Gamuda, IJM), and MYEG.Significant deterioration in macro outlookEconomic recession in 2020, looking for 2021 recoveryOfficial BNM forecast of -2% to +0.5% GDP growth in 2020Bank

28、 Negara recently issued a 2020 GDP growth forecast of -2% to +0.5%. The forecast is predicated on the following key assumptions: Domestic demand to mitigate export weakness - Domestic demand growth assumed to be +1.1% in 2020 (down from +4.3% in 2019) driven by private consumption growth of 4.2%, pu

29、blic consumption growth of 5.9%, private investment to weaken by 9.7% and public investments lower by 7.5%. Meanwhile, net exports are expected to contract by 27% (gross exports -13.6% and imports -11.9%). BNM assumed that: (1) commodity supply disruptions that adversely affected 2019 GDP are likely

30、 to be resolved by 2H20;(2) COVID-19 will continue to cause disruptions for rest of the year even after MCO (Movement Control Order) is lifted; (3) private consumption and key infrastructure projects pick up in 2H20; (4) global supply-side disruptions have been taken into consideration;(5) global ec

31、onomy to register negative growth, US economy to contract and low growth for China, (6) lower multiplier effect from the fiscal stimulus than past experience;(7) businesses operate at 45% utilisation rate on average during the MCO period (in their forecast they assume 4 weeks of MCO ending 14 April

32、2020). Sector breakdown - Breakdown by sector as follows: services (+2.3%), manufacturing (-8.6%), mining and quarrying (-4.2%), agriculture (-2.9%), construction (-1.9%). These forecasts assume oil at US$25-35/ barrel (vs US$64 last year), LNG price of RM1,150- 1,250/tonne (vs RM1,594 last year) an

33、d CPO at RM2,000-2,200/tonne (vs RM2,101 last year ). Infrastructure spending impact - The governments implementation of key mega public transportation projects such as MRT 2 (RM30.5 bn), LRT 3 (RM16.6 bn) and Pan Borneo Highway (RM32.5 bn) is expected to result in RM15bn spending in 2020 and contri

34、bute 1.0pp to GDP. Fiscal stimulus to add 2.8 pp to GDP - BNM estimates that the recently announced RM250 bn fiscal stimulus measures will enhance GDP by 2.8 pp. This is probably the part of the forecast that most in the investment community will likely be sceptical about given that the government o

35、nly projected a 1.5 pp impact when they unveiled the RM250 bn fiscal stimulus package. An integral part of the GDP forecast is the projected private consumption (accounts for close to 60% of GDP) growth of 4.2% in 2020. We understand that the projection assumes that fiscal stimulus measures (such as

36、 EPF withdrawals, cash handouts, loan moratorium, etc.) can potentially enhance private consumption by 4.5-5 pp from 2Q2020 onwards.Headwinds suggests GDP could contract by 5% in 2020In our view, there are some key areas of weakness that could lead to GDP falling below BNMs forecast and potentially

37、contracting by 5% in 2020. The 2000 GDP forecast is subject to review should there be further extensions to MCO (Movement Control Order). However, we take a view that the adverse effects of COVID-19 should start to wear off by 2021 and expect the economy to potentially rebound by 6%.Here are some of

38、 the key risks and driver for the economy that would have a major bearing on the future GDP growth trajectory. Containment of COVID-19 outbreak remains a major factor The period of disruption to business and social activity caused by COVID-19 is the biggest risk for the countrys economic outlook. We

39、 understand that BNMs GDP forecast takes into consideration 4 weeks of MCO (movement control order) ending 14 April, so the extension until 12 May already implies that there could be downside risk to BNMs GDP forecast. While the encouraging trend on new COVID-19 infections lead us to believe that th

40、e MCO could likely be lifted by end-May 2020, we do not expect business activity and peoples movement to resume to normalised levels for most part of the year. Although we believe domestic tourism could recover faster, we believe that international travel is unlikely to return to pre-COVID-19 levels

41、 until there is a cure for the infection.Figure 7: New COVID-19 cases vs recoveriesPhase 1 of MCOPhase 2 of MCOPhase 3 of MCO2011211101009084885450363825-Jan1-Feb8-Feb15-Feb22-Feb29-Feb7-Mar14-Mar21-Mar28-Mar4-Apr11-Apr18-Apr25-AprNew CasesNew RecoveriesMalaysia Covid-19 New Cases & New Recoveries25

42、0200150100500Source: MoH Unemployment rate set to rise to an all-time high Unemployment rate stood at 3.2% or 512k individuals in Jan20. BNM is forecasting a rise to 4% (633k) by end 2020. However, we understand that the forecast takes into consideration the possibility of higher unemployment rates

43、in 2-3Q 2020 followed by a recovery in the job market in 4Q 2020. Nevertheless, a 4% unemployment rate would in itself be an all-time high. A recent survey conducted by the Department of Statistics (DOSM) on 170k respondents suggests that unemployment rates could potentially turn out to be worse tha

44、n BNMs forecast. According to the survey, 46.6% of self-employed respondents lost their jobs due to COVID-19 and the MCO. Agriculture (21.9%) and services (15%) sectors recorded the highest percentages of job losses due to the COVID-19 outbreak. Within the agriculture sector, 33.0% of workers in the

45、 fisheries lost jobs while 21.1% of those in agriculture and plantation sub-segment lost jobs. Job losses in services sector: F+B: 35.4%, transport & storage: 18.7%.The vulnerable segments in the DOSM account for some 43% of total labour force. It appears that some 32% (tourism-related segments) of

46、the labour force could be directly impacted by COVID-19. The wage subsidy scheme worth RM13.8 bn could potentially help to cushion the effects of COVID-19 on the job market.Figure 8: Unemployment rateent rate (%)43.63.73.53.53.53.53.43.53.43.33.33.33.23.23.23.23.23.23.13.13.03.02.82.52.5Unemploym 4.

47、03.83.63.43.23.02.82.62.42.22.01995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020FSource: Bank Negara (BNM)0.7 0.7 0.7 0.62.6 2.2 1.7 1.4 1.05.1 4.8 4.7 3.76.58.811.09.517.316.920.018.016.014.012.010.08.06.04.02.0-Figure

48、9: Breakdown of labour force by sectorsSource: DOSM Private consumption could be weaker than expected We believe it could be challenging for private consumption to expand by 4.2% in 2020 (as assumed in BNMs forecast) given the prolonged effect of COVID-19 and at least 8 weeks of lockdown under the M

49、CO. During the past two major financial crises, private consumption was much weaker (-10.2% during AFC and +0.6% during GFC). Should private consumption turn out to be flat or lower YoY, we estimate that it could reduce GDP by 1 pp. We expect COVID-19 effects to only slowly wear off by 2021.Figure 1

50、0: Private consumption growth4.2%0.6%-10.2%15.0%10.0%5.0%0.0%-5.0%-10.0%-15.0%199619982000200220042006200820102012201420162018 2020F*Source: DOSM, BNM. *BNM estimate Private investments could face bigger contraction While private investment is already forecasted to contract by 9.7% in 2020 by BNM, w

51、e believe the decline could be greater than expected. Private investment suffered larger drops during AFC (-55%) and post-911 (-20%). Given the bleak global economic outlook and adverse impact of COVID- 19 as well as the MCO on businesses, we believe that the private sector would be inclined to hold

52、 back on any investment plans.Figure 11: Private investment growth-7.4%-9.7%-19.9%-55.2%40.0%30.0%20.0%10.0%0.0%-10.0%-20.0%-30.0%-40.0%-50.0%-60.0%199619982000200220042006200820102012201420162018 2020F*Source: DOSM, BNM. *BNM estimate More downside risk for manufacturing sector The manufacturing se

53、ctor accounts for20% of GDP and BNM has projected a decline of 8.6% in 2020, which is comparable to the decline of 9% during GFC (AFC: -13.4%). However, given that the MCO will result in at least 8 weeks of business disruption, we believe that the decline could be worse than BNMs forecast. A recent

54、survey by the FMM (Federation of Malaysian Manufacturers), that gathered feedback from 1,120 manufacturers, suggests over half of them could incur more than RM500k losses due to the MCO. 55% of the respondents expect to lose RM1-5 mn. With the recently-announced extension of the MCO by another 2 wee

55、ks, to 12 May 2020, the losses incurred could widen.Figure 12: Manufacturing sector GDP growth20.0%15.0%10.0%5.0%0.0%-5.0%-10.0%-15.0%-20.0%-13.4%-5.9%-9.0%-8.6%199619982000200220042006200820102012201420162018 2020F*Source: DOSM, BNM. *BNM estimate Tourism expected to be hit hardest In total, touris

56、t receipts from inbound travellers and domestic tourism amount to some RM170-180 bn pa or 11-12% of GDP. Due to COVID-19, we can expect a sharp drop in tourism revenue. Latest data released shows that Malaysia total passenger movements in Mar 2020 fell 64% YoY. Cumulative Jan-Mar 2020 passenger move

57、ment is down 28% YoY.Figure 13: Malaysia Airports passenger traffic9.99.48.68.98.89.09.2 9.28.98.28.48.58.68.38.48.48.6 8.67.77.87.88.17.96.23.2Pax (mn) 12108642-Mar-18May-18Jul-18Sep-18Nov-18Jan-19Mar-19May-19Jul-19Sep-19Nov-19Jan-20Mar-20Source: MAHB Scope for further monetary easing and fiscal st

58、imulus We believe there could be up to two further OPR cuts to provide support for private consumption. The government already announced RM260 bn of fiscal stimulus measures to help cushion the effects of COVID-19. Out of the total stimulus package announced, the on-budget spending for the governmen

59、t amounts to RM35 bn (2.3% of GDP). Should there be a need for further fiscal stimulus, we believe there is still some room for further stimulus through off-budget measures that draw from the reserves of the NDFIs (non-bank financial intermediaries) and banks. We believe there is still sufficient li

60、quidity within the banking system to further extend the loan moratorium beyond the 6 months (ends 1 Oct 2020), should there be a need for it. Stable political leadership It is imperative for the political environment to remain stable in order for economic plans to be executed without major disruptio