Company Name: AMMB HOLDINGS BHD
| Research House: HLG | Price Call: BUY | Target Price: 7.71 |
Stock Name: AFFIN
Company Name: AFFIN HOLDINGS BHD
| Research House: HLG | Price Call: HOLD | Target Price: 3.54 |
Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
| Research House: HLG | Price Call: SELL | Target Price: 1.65 |
Stock Name: CSCSTEL
Company Name: CSC STEEL HOLDINGS BERHAD
| Research House: HLG | Price Call: HOLD | Target Price: 1.62 |
AMMB Holdings (BUY '')
Boosted By Trading gains & Lower Provision
'''' 1QFY12 net profit was 30% of HLIB and consensus forecasts mainly due to higher-than-expected gains from sale of securities and lower-than-expected provision.
'''' Management indicated unlikely repeat of the gains and higher credit charge for full year as well as expect ROE to normalize within its KPI range.
'''' Hence, we are maintaining our forecasts.
'''' The high gains and lower provision more than offset significantly lower NIM and higher overheads.''''
'''' In line with its focus on non-retail loans (to avoid irrational pricing), loans growth was decent but lower than industry average.'' However, deposits growth is higher than loans growth as well as industry average.
'''' Asset quality continued to improved and capital ratios well positioned for Basel III and dividend policy of 40%.
'''' Maintain Buy and target price of RM7.71 based on Gordon Growth (ROE of 14.2% and WACC of 9.5%).
''
Affin Holdings (HOLD '')
Provision Boon
'''' 1HFY11 results (excluding RM40m provision for mitigation loss reported in 1QFY11) were in line with HLIB and consensus forecasts.
'''' Strong loans and deposits growth as both were ahead of industry averages.
'''' NIM recovered qoq post OPR hike.
'''' Asset quality continued to improve for the second consecutive quarter post the temporary blip in 4QFY10.
'''' Capital ratios remained robust.
'''' Factor in the mitigation loss, FY11 cut by 5.7%.
'''' Consequently, target price cut from RM3.73 to RM3.54 based on Gordon Growth.
'''' Maintain Hold.
''
MAS (Sell '')
MAS Conference
'''' Focus on inventory and capacity management to improve overall yield (Revenue/ASK).
'''' Annual synergies of RM1.2bn identified, with MAS-AirAsia enjoying 50-50% basis.
'''' MAS existing ancillary services will be strengthened to generate higher profits and potentially being monetised through JVs.
'''' MAS and AirAsia to meet MAHB on potential deferment of higher aircraft landing and parking charges, as well as higher passenger tariff.
'''' More positive with MAS potential restructuring.
'''' Remained concern on MAS capability to compete with renowned regional FSC i.e. SIA and Cathay and emerging Emirates.
'''' Execution and end result remained as huge risks given MAS 'ill-fated' history.
'''' TP increase to RM1.65 on better optimism of its new management. However, as share price has ran ahead of our TP, downgrade to Sell.
''
CSC Steel (Neutral '')
Buys properties in Melaka
'''' CSC Steel acquired Constant Mode Sdn Bhd for RM750k. Constant Mode has 10 parcels of 3-bedroom apartments in Pangsapuri Taman Pelangi Ayer Keroh, Melaka, of which the apartments are currently rented to CSC Steel as living quarters for its foreign workers.
'''' CSC Steel is currently renting these apartments for RM5.5k per month.''
'''' While the latest transaction will result in cost savings for CSC Steel, we are keeping our net profit forecasts unchanged, as the latest transaction is immaterial (with <0.1% of our forecast 2011 net profit). TP maintained at RM1.62 based on unchanged 8x 2012 EPS of 20.3 sen.
''
FBM KLCI - 200-day SMA (1531) Next Major Hurdle
'''' Overall, we remain cautious and will only turn bullish if the KLCI is able to penetrate the 200-d SMA (1531 pts now) level on high volume. Relief rally targets are 1510 (50% FR), 1531 and 1535 (strong downtrend line resistance). Support levels are 1470, 1464 (76.4% FR) and 1450 pts. ''
''
Stock to watch - COASTAL: Relief rally targets at RM2.24-2.38
'''' Although there could be further consolidation ahead as share prices are still below RM2.17 (200-d SMA) and RM2.24 (50% FR), the risk-reward matrix favours the bulls, as indicators are showing signs of bottoming up. Target resistance levels are RM2.24-2.38. Cut loss below RM1.92.
''
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