Company Name: KSL HOLDINGS BHD
| Research House: HLG | Price Call: BUY | Target Price: 2.16 |
Stock Name: KLCCP
Company Name: KLCC PROPERTY HOLDINGS BHD
| Research House: HLG | Price Call: HOLD | Target Price: 3.46 |
Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
| Research House: HLG | Price Call: SELL | Target Price: 1.19 |
KSL (BUY)
Strong billings ahead
'''' 2Q net profit rose 126% qoq and 72% yoy to RM29.1m.'' 1H net profit was RM42m, significantly ahead of our estimates (72% of our full year estimate), but lower than consensus (only 45%).
'''' Management has started ramping up earnings recognition for KSL City apartments.'' We understand that they have recognised another 10% in Q2, with work progress at 50% and takeup rate of 70%, so future progress billing in 2H should continue to be stronger.
'''' The Klang flagship project, which was initially targeted to launch in 4Q10, is now expected to be finally launched in Nov once the show unit is ready.'' We believe Phase 1 could comprise up to 380 units with asking price of RM700k/unit.
'''' We raise our net profit forecast for FY11-12 by 60-62% to factor in their lumpy earnings recognition from KSL City.
'''' FY12 is a "transition year" as KSL will need to rely on the Klang project to sustain earnings once KSL City is completed in 1Q 2012.
'''' No change to our price target of RM2.16 (based on 30% discount to RNAV), implying 56% upside.'' Maintain BUY.
''
KLCC Property (HOLD)
Results in-line
'''' 1QFY11 results was in-line with HLIB and consensus estimates.'' Reported earnings for the latest quarter rose 5.8% yoy and 5.0% qoq to RM240.3m, making up 22.3% of our estimate and 24.7% of consensus (both annualised).
'''' Earnings growth was driven by maiden earnings contribution from retail element of Lot C, positive rental reversions from Suria KLCC and Kompleks Dayabumi, and better yields from Mandarin Oriental.
'''' KLCC Property's parent company, PETRONAS has also been officially confirmed to be the tenant for Menara 3 PETRONAS.'' We expect the office portion to make its maiden earnings contribution in 2012.
'''' The RCULS issue needs to be resolved before KLCC Property can enjoy significant re-rating.
'''' In the absence of major catalysts, we maintain our HOLD rating and maintain our target price of RM3.46 (15% discount to RNAV).''
''
MAS (SELL)
Unstoppable Bleeding
'''' 2QFY11 results were below our expectations and consensus.
'''' Expect 2H11 to continue report losses due to sluggish forward bookings especially on US, Europe, Japan and Middle East.
'''' Active management on capacity and routes, in order to improve yields and minimize losses.
'''' Delivery of A380s on schedule. Initial deployment to Kangaroo routes i.e. Australia and Europe.
'''' High possibility of cash call exercise due to huge losses and high restructuring cost.
'''' Maintain SELL with lowered TP of 1.19.
''
FBM KLCI - Relief rally targets at 1510-1530
'''' The robust 3% rally on Dow overnight will drive regional markets and Bursa Malaysia higher today. However, we would like to caution investors that current rebound could be disappointed if Bernanke speech this Friday fails to live up to market expectations for stimulus measures.'' Coupled with long holiday week ahead, we advocate investors to capitalize any rallies to trim their position. Alternatively, for risk-takers, adopt a short term trading oriented approach to take profit into any rebound
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