Company Name: MUDAJAYA GROUP BHD
| Research House: HLG | Price Call: BUY | Target Price: 5.06 |
Stock Name: UMLAND
Company Name: UNITED MALAYAN LAND BHD
| Research House: HLG | Price Call: BUY | Target Price: 2.87 |
Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD
| Research House: HLG | Price Call: BUY | Target Price: 10.46 |
Stock Name: JCY
Company Name: JCY INTERNATIONAL BERHAD
| Research House: HLG | Price Call: SELL | Target Price: 0.38 |
Mudajaya Group (BUY)
Janamanjung becomes official
'''' Mudajaya has signed a subcontract agreement with CMC Machipex for the design and construction of all civil works associated with the Manjung Power Plant extension project for a total contract value of RM720m. The project is expected to be substantially completed by Nov'13.
'''' The announcement indicates that the management has finally concluded the "nuts-and-bolts" of the project and is all set to commence "actual" works. This will give investors the assurance that the project would not be revoked in the last minute as it took them quite some time for the LOI to be formalised.
'''' Maintain BUY with TP of RM5.06 based on SOP valuation in view of the lucrative Indian IPP project which the market has been too pessimistic on it. The company is also trading below our ascribed construction valuation which works to RM3.70/share.
''
UMLand (BUY)
Small land acquisition in Pasir Gudang
'''' UMLand is acquiring 8.89 acres of freehold land from TCB Realty Sdn Bhd for RM18.4m.'' This works out to be RM50 psf, compared to RM48 psf for Sunway City's land in Plentong last year.''
'''' The land is located within the commercial centre of their flagship Bandar Seri Alam township in Pasir Gudang, and UMLand plans to develop a commercial retail complex with gross development cost of RM90m,
'''' We view this as a positive move to add value and stimulate sales in Bandar Seri Alam, which has more than 1,000 acres of balance landbank and close to RM3bn of balance GDV.
'''' Negligible impact for FY11-13, assuming a 2-year construction period.'' Moreover, key details such as NLA and tenant mix have yet to be determined.
'''' No change to our earnings forecasts and BUY call on UMLand; maintain target price of RM2.87 (based on 50% discount to RNAV).
''
Maybank (BUY)
Higher FY12/11 ROE KPI
'''' FY11 results in line with HLIB and consensus expectations.
'''' Final dividend of 32 sen (of which 28 sen is DRP), taking total to 60 sen (52 sen), ahead of HLIB's 45 sen forecast.
'''' Strong growth across most LOB and boosted by stronger non-interest income growth and lower provision.
'''' Loans growth accelerated with domestic now above industry.'' Deposits growth also strong but behind loans.
'''' Asset quality improved while capital ratios remained strong.''
'''' FY12/11 ROE KPI of 16% underpin by healthy economic and higher fee based income growth to more than offset NIM erosion and credit charge normalization.
'''' No change in status of BII and still no clarity on Indonesia's foreign shareholding limit.
'''' If M'sia Basel III similar to S'pore, cash call only in 2013.
'''' Target price fine-tuned to RM10.46 based on Gordon Growth. Maintain Buy.
''
JCY (SELL)
9MFY11 Wiped Out By 3Q Losses
'''' 9MFY11 losses mainly due to 3Q losses that more than offset 1HFY11 profits vs. HLIB and consensus forecasts of profits.
'''' Almost all that could go wrong went against it.'' Lower ASP, volume and US$ (vs. RM) as well as higher raw material prices, inventory provision and shortage in labour.''
'''' FY11-13 forecasts cut by 70-88% to reflect lower volume as well as higher costs.
'''' Thus, target price from RM0.70 to RM0.38 based on 20% discount to 2-year P/E average of US HDD brands.
''
EngTek (Cease Coverage)
Weaker Than Expected Results
'''' 1H11 normalised net profit of RM10.3m came in below expectations, at 23.6-24.1% of our and consensus full-year estimates of RM42.8-43.6m.
'''' Despite the weak results, we are keeping our earnings forecasts unchanged. Given the TYK Capital's offer to privatise Eng Tek at RM2.50/share (on 22 Jul 2011) is higher than our TP, earnings outlook is no longer material.
'''' TP raised from RM1.86 to RM2.50 (in line with the GO price), and we continue to advocate investors to take up the proposed GO.
'''' We are also taking this opportunity to cease coverage on the stock, given the company's bleak outlook as well as the proposed GO made by the major shareholders of Eng Tek that is likely to succeed given the attractive offer price.
''
FBM KLCI - No catalysts to trigger sustainable rebounds
'''' Given the wobbly external backdrops, the inclination to unload stocks would gather pace as Bursa Malaysia approached the holiday-shortened trading period next week coupled with weak technical indicators. Immediate resistance zones are 1500-1510.
'''' Key support levels are 1470 (the neckline support before 9 Aug's rout) and 1466 (50% FR). A breakdown below 1466 will trigger more downside risks towards 1423-1443 zones.
''
Stock to watch ' MAYBANK: Potential rebound targets at RM8.90-9.00''
'''' Based on its hourly and daily charts, technical indicators are on the mend. In the wake of improving technical landscape, as 4QFY11 results that are within expectations and a handsome RM0.32 dividend (of which 28 sen is for DRP), it is likely to charge forward in the immediate term, probably retesting RM8.90 (upper Bollinger band) and the RM9.00 territory.
'''' Supports are RM8.52 (38.2% FR) and RM8.40 (23.6% FR). Cut loss below RM8.40
''
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