Company Name: TIME DOTCOM BHD
| Research House: HLG | Price Call: BUY | Target Price: 0.97 |
Stock Name: HSL
Company Name: HOCK SENG LEE BHD
| Research House: HLG | Price Call: BUY | Target Price: 2.44 |
Time DotCom (BUY)
Entering Margin Expansion Phase
'''' EBITDA margin expansion in 2Q11 due to the increased contribution from data segment and slower than expected capex spending. Management expects EBITDA margin to average above 30% for FY11.
'''' TDC to focus on strategies to expand data revenues (+6% yoy, +23% qoq) from wholesale, corporate and global bandwith sales
'''' Under Astro partnership, TDC to incur huge capex in FY11
'''' Management guided whole year capex of RM250m for FY11 and RM80-120m for FY12.
'''' The acquisition exercise of AIMS Group, GTC and GTL are expected to be completed in 4Q11.
'''' TDC is entering into a multi-year growth cycle with a high degree of operating leverage. By tapping into new growth areas the company is poised to become a regional growth telco.
'''' At the current price, Time DotCom is trading at an estimated PER of 12.8x, 11.4x and 10.0x for FY11, FY12 and FY13 respectively.
'''' Raised Target Price to RM0.97 (Previously RM0.95) based on SOP.
''
Hock Seng Lee (BUY)''''''
2Q11 continues to deliver
'''' 2Q PATAMI came in at RM20.9m (+18% QoQ), translating to 3.78 sen/share. As of 1H11, cumulative PATAMI was RM38.6m, translating to 6.97 sen/share, making up 43% of our forecast.
'''' On a YoY and QoQ basis, 2Q revenue grew by 34% and 20% respectively. On the other hand, YoY and QoQ PATAMI only grew by 16% and 18% respectively. Cumulatively, revenue and PATAMI grew by 34% and 22% respectively. We believe that the company is on track to deliver earnings growth of >20% for FY11.
'''' As of 2Q11, we estimate that HSL has ~RM880m worth of orderbook outstanding, which translates to ~1.9x FY10's revenue and ~1x order book-to-market cap ratio. YTD, HSL has secured RM153.7m worth of new orders.
'''' Maintain BUY as the company has a niche market for itself in land reclamation/dredging works and healthy balance sheet to take on bigger projects. Target Price of RM2.44 based on 14x average FY11 and FY12 earnings maintained.
''
TRC Synergy (BUY)
2Q11 weighed down by LRT delays
'''' 2Q PATAMI plunged by 57% QoQ to RM2.5m, translating to 0.55 sen/share. As of 1H11, cumulative PATAMI was 20% lower compared to a year ago at RM8.4m (1.83 sen/share after adjustment), making up only 32% of our estimates and 30% of street's estimates.
'''' The reason for the deviation is due to slower than anticipated progress for the LRT project and lower GP margins due to a mixture of projects which are at the tail end and while others are at the initial stages. Hence, lower value added works were recognised during the quarter. We see this weakness in 2Q as temporary and foresee construction activities to accelerate once the issue has been resolved.
'''' We estimate that TRC's current outstanding order book remains healthy at ~RM1.1bn, translating to ~2.9x FY10's revenue and ~4x order book-to-market cap ratio.
'''' Despite 2Q's setback, we believe that this is just a timing issue in profit recognition. We are maintaining our BUY call with a Target Price of RM0.83 based on 13x FY12 earnings.
''
FBM KLCI - Cautious ahead of long holidays and Bernanke speech
'''' In the wake of unresolved external woes, moderating global economic growth outlook and long holidays next week, we remain vigilant and would like to caution investors about potential kneejerk correction on Bursa Malaysia if Bernanke speech tonight fails to live up to market expectations.
'''' The bearish engulfing candle formation on 24 Aug, negative technical readings and the failure to defend supports at 1470 and 50% FR (at 1467 pts) yesterday could exert more downward pressure on the FBM KLCI. A breakdown below 61.8% FR (now at 1456) subsequently will pressure the index to retest 1443 (76.4% FR) and 9 Aug pivot low at 1423 pts.
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Dow Jones - All eyes on Bernanke speech
'''' Technically, a fall below the 10-d SMA yesterday and the failure to surpass the mid Bollinger bad at 11133 and 11530 (17 Aug high) could derail the current rebound, especially if Bernanke speech fails to live up to market expectations of more dramatic action rather than outline gradualist measures.
'''' Immediate resistance levels are 11530 and 11987 (200-d SMA) whilst supports are situated near 10801 (19 Aug low) and 11000.
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