KUALA LUMPUR: The year that has come and gone has been described as nothing short of challenging, with local equities jostled by an all-round bumpy ride as uncertainties ruled.

Right from the very start, the benchmark index slumped 5.4% from the final day of 2015 to as low as 1,600.92 points on Jan 21, 2016, fuelled by the continued fall in oil prices, before peaking three months later at 1,727.99 points in mid-April — up about 8% — only to fall near 6% before May. It saw a gradual rebound after that, to eventually settle at 1,641.73 last Friday, still down 3% from a year ago, after an 11.31-point surge in the last hour.

As in every situation, there are gainers and losers. A brief look at the top 10 best- and worst-performing stocks of the year showed that consumer stocks with resilient earnings and yields were favoured, while those who fell out of favour were a mixed bag — though weaker earnings and outlook were among the notable similarities, with downscaling of operations and change of owners also key determinants.

Here’s a look at the top gainers and losers the year has seen on Bursa Malaysia — based on the biggest year-to-date changes in value — according to data culled from Bloomberg:

Top 5 Gainers

1) Dutch Lady Milk Industries Bhd

Shares in Dutch Lady Milk Industries Bhd outperformed the FBM KLCI by surging as much as RM9.69 or 21.1% year-to-date settle at RM55.56 apiece on the last trading day of 2016 last Friday.

The dairy products maker has been benefiting from the subdued commodity prices in recent years, with gross margin on an increasing trend for seven consecutive quarters, beginning from the fourth quarter ended Dec 31, 2014 (4QFY14) right up until 2QFY16.

The stock surged by as much as RM16.92 or near 36% to its multiple-year high of RM64 on Aug 15 last year from as low as RM47.08 on Jan 21.

However, the reversal of raw material prices that took place since 2QFY16 has eroded its gross profit margin, which caused the dairy product maker’s profit to shrink in the past two financial quarters. Consequently, its share price has slipped by some 13.2% since the August peak, to its current level.

Nevertheless, Dutch Lady remained the star performer on Bursa Malaysia, as investors viewed it as one of the best defensive stocks to stash their money amid the volatile economic background.

In its cumulative nine months ended Sept 30, 2016, Dutch Lady’s net profit dipped 3.9% to RM111.25 million from RM115.76 million a year ago, though revenue rose 6.2% to RM776.06 million from RM730.76 million.

At its current price, Dutch Lady is trading at a trailing 12-month price-earnings ratio of 25.98 times with a dividend yield of 3.97%.

2) Nestle (M) Bhd

Food manufacturer Nestle (M) Bhd’s share price, which has been on an upward trajectory since Jan 27 when it was trading at RM73.10, rose by as much as RM7.50 or 10.3% to a high of RM80.60 on Sept 7, before paring some gains to settle at RM78.20 last Friday.

On a year-to-date basis, the stock was up RM7.34 or 10.4%, making it the second-best performer on the local bourse.

Based on the latest closing price — which valued the group at RM18.34 billion — Nestle’s trailing 12-month dividend yield was at 3.47%. It was trading at 27.23 times to its price-to-book value.

In October, Nestle announced it had joined hands with online retailers Lazada and 11street to launch its wellness e-stores on both their online shopping platforms, and that it was targeting to reap RM500 million in sales from its maiden venture into the e-commerce business.

Nestle managing director Alois Hofbauer reportedly said the group was confident in the viability of the e-commerce venture, but declined to provide an exact timeline on when the group plans to achieve its sales target.

“It’s really hard to say as we established our e-commerce business early this year, and the contribution from this is still small — about 1% or less. But let me be clear: A major part of our business will still be [transacted] through retailers, convenience stores and hypermarkets, so this e-commerce service will be complementary,” Hofbauer was quoted as saying at the time.

3) Panasonic Manufacturing Malaysia Bhd

Investors tend to park their money in defensive stocks when uncertainties mount, which could partially explain why Panasonic Manufacturing Malaysia Bhd’s share price has remained resilient, despite weak consumer sentiments.

Typically a dividend stock, Panasonic has been rewarding investors with fat payouts over the past three financial years: 69 sen in the financial year ended March 31, 2014 (FY14), RM1.42 in FY15 and RM1.39 in FY16. Based on the latest payout, the stock’s dividend yield stood at 4.56%.

For the second quarter ended Sept 30, 2016, Panasonic’s net profit fell near 24% to RM30.78 million from RM40.3 million a year earlier, due to higher operating expenses and lower share of profits from an associated company. Revenue was 4.2% higher at RM292.42 million versus RM280.67 million a year earlier, driven by stronger sales in domestic and export markets for fan products.

For the cumulative six months ended Sept 30, 2016, its net profit slipped 4.2% to RM69.09 million from RM72.09 million, while revenue gained 7.7% to RM590.21 million from RM547.87 million.

According to its Annual Report 2016, Panasonic said the international economic and financial landscape is likely to remain challenging and will likely influence the prospects of the Malaysian economy.

“Nevertheless, the company will continue to focus on developing new products for its strategic products whilst leveraging on its operational efficiency to reduce and minimise overall costs of production,” it said, adding it remains cautiously optimistic, in line with the gradual recovery of global economies.

4) Fraser & Neave Holdings Bhd

The phenomenon of “weakening consumer sentiment”, a term which has been repeated ad nauseam over the past two years, seems to have had little effect on Fraser & Neave Holdings Bhd’s (F&N Malaysia) earnings and the beverage maker continued to record strong profit growth for the financial year ended Sept 30, 2016 (FY16).

Its annual net profit grew 37.6% to RM385.37 million from RM280.07 million a year ago, while revenue inched up 1.5% to RM4.17 billion versus RM4.11 billion, underpinned by its Thailand operation.

During a media briefing in November, F&N Malaysia chief executive officer Lim Yew Hoe said that the group was in talks with McDonald’s Malaysia to supply its isotonic drink to the latter’s outlets here, confirming an August report by The Edge Financial Daily that the beverage maker was courting the fast-food chain with 100Plus.

Lim said McDonald’s has done a trial run by offering the drink at some of its outlets, but nothing has been finalised at the moment.

“What I can tell you is, for the time being, we are still [in talks] with McDonald’s. Once we have [a decision], we will make an announcement,” he told reporters at the time.

Earlier in July, in an interview with The Edge weekly, Lim said he did not want F&N Malaysia to be involved in just isotonic drinks and dairy products but also food and beverage (F&B).

“For Malaysia, I am talking about non-beverage and dairy, such as food [snacks]. We are an F&B company but food is not in our stable yet,” he said.

5) Ajinomoto (M) Bhd

Shares in Ajinomoto (M) Bhd gained RM5.25 or 60.8% to end the last trading day of 2016 at RM13.88, which gave it a market value of RM843.88 million.

In August, the monosodium glutamate manufacturer said it had accepted the offer from Japan’s Taisei Lamic Co Ltd to sell its entire stake of 5% in Malaysia Packaging Industry Bhd (Maypak) at RM1.37 million or 65 sen per share.

Following the disposal, it ceased to be a shareholder of Maypak.

In a media briefing in November, the group said it was targeting a double-digit operating profit growth for the financial year ending March 31, 2017, which it believed would be achievable with the support of more effective production and continued sales promotion activities.

According to its managing director and chief executive officer Keiji Kaneko, the group’s products such as Aji-no-moto flavour enhancer, “Tumix” flavour seasoning, “Seri-Aji” menu seasoning and “Pal Sweet” sweetener have garnered over 80% share of the local market.

The group, he said, is also looking to expand its export market to other regions such as Northern Africa in the next three years.

Apart from that, the group will embark on its “Open New Sky” strategy in 2017 to introduce products under four new categories, namely new food culture, health, nutrition and functional benefits.

“We expect total sales from these new categories to reach RM50 million by 2020,” he said.

Ajinomoto is currently trading at 1.11 times its price-to-book value and 19.76 times its price-earnings ratio.

Top 5 Losers

1) British American Tobacco (M) Bhd

British American Tobacco (M) Bhd’s (BAT) share price declined RM9 or 16.8% in 2016 to RM44.60, making it the year’s top loser on the local bourse.

The local tobacco industry had to contend with three rounds of excise duty hikes between 2013 and 2016. Tobacco tax rose 14% in September 2013, 12% in November 2014 and 36% in November 2015. The excise duty hikes are believed to have led to a steep decline in sales of legal cigarettes.

In March 2016, BAT — the only listed tobacco company in Malaysia — decided to shut down its plant in Malaysia, citing the high excise environment, which ultimately led to a sharp rise in sales of illegal cigarettes and significantly lower legal sales volumes, and also resulted in rising cigarette production costs.

BAT posted a 17% drop in net profit for the third quarter ended Sept 30, 2016 to RM212.62 million from RM256.1 million a year ago. Revenue declined 19.6% to RM932.19 million from RM1.16 billion.

For the nine months ended Sept 30, 2016 (9MFY16), net profit fell 39.6% to RM432.95 million from RM717.18 million in 9MFY15 due to overall volume reduction and escalating cost pressures. Revenue fell 17% to RM2.92 billion from RM3.52 billion.

Moving into 2017, analysts are still cautious about the outlook on the tobacco industry. The sector landscape is getting increasingly difficult due to the declining cigarette consumption per capita as the population becomes more health conscious, continued high illicit trades and regulatory risks.

The stock currently trades at a trailing 12-month price-earnings ratio of 19.6 times and has a trailing 12-month dividend yield of 5.42%.

2)UMW Holdings Bhd

It was definitely not a good year for UMW Holdings Bhd as it was hard hit by a double whammy — soft auto sales and the downturn in the oil & gas (O&G) sector. Over 2016, its share price came down by RM3.18 or 41.1% to RM4.57, giving it a market capitalisation of RM5.34 billion.

The fall in share price was in line with the group’s weak financial performance. It reported a net loss of RM128.83 million for the third quarter ended Sept 30,2016, compared to a net profit of RM13.52 million a year ago, mainly dragged by its O&G division, which was facing a challenging economic environment and a weaker ringgit. Revenue fell 19% to RM2.86 billion from RM3.53 billion.

The group is expecting added pressure for asset impairment in the final quarter that may adversely impact its performance for the year.

For the nine months ended Sept 30, 2016 (9MFY16), the group made a net loss of RM124.38 million, versus a net profit of RM247.12 million for 9MFY15. Revenue shrank 23% to RM7.9 billion from RM10.26 billion.

AffinHwang Capital Research has maintained its “sell” rating on UMW with a target price of RM4.23 and said it does not see any positive catalyst to upgrade the stock, given the intensified competition within the automotive segment, the poor consumer spending and impact of weaker ringgit. The O&G business is expected to face delays in recovery, said the research house.

While business outlook could remain challenging in the near term, AffinHwang said if the plan to develop the group’s Serendah land proceeds, it could potentially be “a good growth story” and unlock value for investors.

3)Shell Refining Co (Federation of Malaya) Bhd

Shell Refining Co (Federation of Malaya) Bhd’s (SRC) share price dropped by over 59% or RM2.94 to RM2.03 in 2016, giving it a market capitalisation of RM609 million.

SRC is mainly involved in refining and manufacturing petroleum products such as liquefied petroleum gas, propylene, petrol, jet fuel, diesel and sulphur.

The company recently saw changes in its board of directors and top management, following the completion of the sale of Shell Overseas Holdings Ltd’s 51% stake in SRC to Malaysia Hengyuan International Ltd (MHIL).

Chinese national Wang Youde was named non-independent and non-executive chairman of SRC. Wang, 53, is the chairman and general manager of Shandong Hengyuan Petrochemical, which owns MHIL.

Concurrently, Martinus Joseph Marinus Aloysius Stals, 50, replaced Amir Hamzah Abu Bakar as SRC’s managing director. Two other Chinese nationals, Sun Jianyun and Wang Zongquan, have also been appointed as non-independent and non-executive directors.

MHIL acquired the 51% stake in SRC on Dec 19 for US$66.3 million (RM293.76 million). It subsequently launched an unconditional mandatory offer to acquire the remaining 49% stake at the same price of RM1.92 a share.

SRC said it will remain a refinery and MHIL will invest in upgrades to meet the locally mandated Euro 4M and Euro 5 requirements.

SRC also said it will maintain supply to its retail and commercial customers and will honour all current commercial arrangements through existing comprehensive supply agreements in the country.

As at Dec 28, the Employees Provident Fund had a direct stake of 6.027% in SRC. The fund has been trimming its stake in the company since the end of 2012.

The stock currently trades at a trailing 12-month price-earnings ratio of 2.79 times and is at 0.76 times its book value.

4) Globetronics Technology Bhd

Semiconductor player Globetronics Technology Bhd’s share price fell RM2.67 or 43.4% to RM3.48 in 2016. This reduced its market capitalisation to RM980.99 million, leading to the company exiting the “billion ringgit club”.

Globetronics’ net profit dropped 55.3% to RM9.15 million for the third quarter ended Sept 30, 2016 (3QFY16) from RM20.49 million in 3QFY15, as it saw lower year-on-year (y-o-y) sales and recognised a foreign exchange loss.

Revenue fell 40.9% to RM52.46 million from RM88.71 million. The group said sales from both its Malaysia and Singapore segments were lower y-o-y.

For the cumulative nine months to Sept 30, 2016 (9MFY16), net profit plunged 65.18% to RM19.35 million from RM55.57 million in 9MFY15. Revenue fell 36.7% to RM168.61 million from RM266.43 million.

AffinHwang Capital, which has a “buy” call on Globetronics with a target price of RM4.88, has learned that the company’s new light sensor, which is still going through the qualification process, is on track and increasingly likely to be designed into the final product.

On the flip side, the research house said in a note dated Dec 22 that the volumes for the proximity sensors have continued to shrink to two to three million units in December (from eight to nine million per month). AffinHwang Capital remained optimistic that the new sensors will more than compensate for any slowdown in existing operations.

5) Kossan Rubber Industries Bhd

Glove maker Kossan Rubber Industries Bhd’s stellar share price performance in 2015, which saw the counter surge more than 100%, did not extend to 2016. Kossan’s share price started to decline since the beginning of the year. Over 2016, it fell RM2.55 or 27.9% to RM6.59.

Kossan’s net profit fell 38.3% to RM34.02 million for the third quarter ended Sept 30, 2016 from RM55.17 million a year earlier, as the glove industry faced selling price pressure and higher production costs.

Revenue was down 6.3% to RM414.04 million from RM441.74 million.

For the cumulative nine months ended Sept 30, 2016 (9MFY16), Kossan’s net profit slipped 14.7% to RM126.3 million from RM148.06 million in 9MFY15. Revenue grew 2.5% to RM1.23 billion from RM1.2 billion.

In its strategy note dated Dec 19, Maybank Investment Bank Research noted that the share prices of glove players have fallen by 20% to 30% in 2016, underperforming the FBM KLCI as the supernormal earnings dissipated on lower average selling prices, a result of the passing through of the stronger US dollar against the ringgit and intense nitrile competition.

The research house said while the high raw material prices may persist into 2017, earnings growth momentum could sustain in the first half of 2017 for the glove industry, due to the cost pass-through mechanism and the presently high US dollar against the ringgit.

However, it noted that the overexpansion and intense average selling price competition could recur in the second half of 2017, leading to compression of margins or earnings again.

The research house has upgraded the glove sector to “neutral” and has a “hold” call on Kossan with a target price of RM6.35.