(MAG MK/HOLD/RM2.10/Target: RM2.00)

Magnum underperformed in 1Q17 with a high prize payout ratio and weaker sales. RB served Magnum a shocking notice of assessment for a RM476m (RM0.33/share) enalty on income tax issues, with a majority related to tax shields used in 2008-12 pursuant to its then privatisation exercise. While Magnum is rigorously contesting IRB’s claim, it had to suspend quarterly dividend for the first time in four years. Maintain HOLD, but expect nearterm pressure on share price. Target price: RM2.00. Entry price: RM1.80.

Source: UOB Kay Hian Research - 22 May 2017