Company Name: MALAYSIAN AIRLINE SYSTEM BHD
| Research House: HLG | Price Call: SELL | Target Price: 1.19 |
Pos Malaysia (BUY '')
More synergistic benefits in the pipeline
'''' Pos Malaysia's recent share price underperformance was led mainly by the absence of positive new developments as well as the absence of clarity on Pos Malaysia's strategic plan following the emergence of DRB-Hicom as the major shareholder. Nevertheless, we believe it is now worth re-looking into Pos Malaysia given:
1.'''' Pos Malaysia is currently trading at 2012 P/E of 8.8x, at 1 standard deviation below its historical forward average P/E of 12.0x (see Figure 2), and also worth noting that it is now trading at a lower P/E than (28.8% discount) its closest peer's (Singapore Post) forward P/E of 12.5x; and
2.'''' Recent development suggests that Pos Malaysia is on track to leverage on parent company's diverse business operations on a gradual basis.
'''' TP remains unchanged at RM3.80 based on 13x 2012 EPS of 29.3 sen. We continue to like Pos Malaysia for: (1) The synergistic effect arising from more tie-ups between DRB-Hicom and Pos Malaysia; and (2) Limited downside to share price, given its undemanding valuation (currently trading at 28.8% discount to its closest peer Singapore Post) and relatively generous payout ratio.
''
Boustead Holdings (BUY '')
Heavy Ind Division Still A Drag
'''' 3QFY11 results below HLIB and consensus due to continued weak Heavy Industry (HI) division (cost escalation) and higher interest charges.
'''' Third interim single-tier dividend of 12 sen (same of FY10).''
'''' Although the HI division recorded qoq improvement, it was still impacted by cost escalation and delay in finalizing value of the patrol vessels contract.'' We view this as a timing issue and earnings are expected to make a comeback once the contract has been finalized.
'''' FY11-13 forecasts cut by 14-20% to reflect lower contribution from the HI division and our recent cut in Affin forecasts.
'''' Target price cut to RM6.50 (10% discount to SOP of RM7.23) to reflect the earnings cut, lower BHIC share price and lower Affin target price.''
'''' Despite the cut, it still provides more than 20% potential appreciation on top of the high dividend yield.'' Maintain BUY.
''
Mah Sing: (BUY '')
3Q results
'''' 9MFY11 net profit rose 47% yoy to RM127.5m and was in-line with our estimates.''
'''' However, 9MFY11 revenue of RM1,148.6m made up 88% of our estimates as our forecast of Mah Sing's progress billings proved to be overly conservative.''
'''' We have accordingly raised our revenue estimate by 12% for FY11 to RM1,539.9m. Consequently, net profit has been raised by 4% to RM179.6m.
'''' We raise our RNAV estimate from RM3.09 to RM3.38.'' We maintain 30% discount to RNAV and our target price is now raised from RM2.16 to RM2.37.'' Maintain BUY.
''
MAS (SELL '')
9M11 Results In Line
'''' In Line ' Reported 3Q11 core loss of RM212.3m despite seasonally stronger quarter. 9M11 core net loss was RM1.03bn vs HLIB FY11 estimates loss of RM1.28bn and consensus of RM0.92bn loss.
'''' Higher revenue yoy due to strong international passenger travel.
'''' Incurred large unrealized foreign exchange and derivatives losses of RM195m and RM70.2m in 3Q11.
'''' MAS cautioned worse 4Q11 operational result due to adverse situation. October statistics indicated lower demand for air travel (-4.7% yoy) and cargo demand (-22.6% yoy), as well as lower load factor.
'''' Cash level dropped to RM1bn, while net gearing increased to 2.01x. Thus, there is high possibly of cash call exercise due to huge operating losses, potentially high restructuring cost and new delivery of aircrafts.
'''' Maintain SELL with unchanged TP of RM1.19.
''
KLCI: Downside risks intensify
'''' Given the breakdown of mid Bollinger band (now at 1468 ' which is also the 20-d SMA), Nov's low of 1452 pts, the 50-d SMA as well as bearish technical readings, KLCI is expected to head south towards next support at 1420 (38,2% FR) and the 1400 psychological barrier. Immediate resistance levels are 1468 and 1483 (100-d SMA).
''
DJIA: Trying to form a base near 11112-11344 levels
'''' Following the breakdown of major supports of mid Bollinger band (11937 ' which is also the 20-d SMA) and 100-d SMA (11660), the Dow may retest lower supports at 11344 (50% FR) and 11122 (61.8%) to form a temporary bottom. Further supports are the 11000 psychological level and 10847. Immediate resistance levels are 11970-12284 levels.
No comments:
Post a Comment