Company Name: SP SETIA BHD
| Research House: HLG | Price Call: HOLD | Target Price: 3.90 |
Stock Name: MAXIS
Company Name: MAXIS BERHAD
| Research House: HLG | Price Call: HOLD | Target Price: 5.39 |
Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD
| Research House: HLG | Price Call: HOLD | Target Price: 5.44 |
Banking (Overweight)
Oct Bank Stats ' Early Weakness In Cards?
'''''''''''''''''''''''''' Loans growth slowed to 13.1% after large business repayments while household sustained.''
'''''''''''''''''''''''''' Both leading indicators higher mom with single-digit yoy growth while approval rate above 50%.''''
'''''''''''''''''''''''''' This will sustain loans growth, albeit at slower rate.'' Maintain 2011 and 2012 loans growth at 12% and 9% respectively.''
'''''''''''''''''''''''''' LD ratio implies excess liquidity ample at RM262bn.
'''''''''''''''''''''''''' Lending rate slightly lower.'' Pressure on NIM to continue but expects loans growth to mitigate the impact.''
'''''''''''''''''''''''''' Asset quality improved mitigating major earnings risk.'' Deterioration in credit cards for three consecutive months but segment loans only 3.2% of total with better asset quality vs. industry average.
'''''''''''''''''''''''''' To continue monitor if trend in cards persist and spill over to other segments.
'''''''''''''''''''''''''' We reiterate that asset quality will hold up well given healthy household balance sheet and the 2012 Budget "goodies".
'''''''''''''''''''''''''' Capital ratios improved, will continue support growth, M&A and more active capital management.
'''''''''''''''''''''''''' Maintain Overweight.'' Top picks are Maybank and AFG.
''
SP Setia (Hold)
Stepping up their presence in Singapore
'''''''''''''''''''''''''' SP Setia has successfully tendered for 4.62 acres of leasehold land at Chestnut Avenue for ~S$900 psf.'' We view this as a good price; based on our survey, comparable land parcels in Singapore have been fetching as much as S$2,100 psf.
'''''''''''''''''''''''''' This is a brown field development; SP Setia to demolish existing buildings and develop eco-themed apartments with GDV of ~S$465m (RM1.1bn), over 3-5 years.''
'''''''''''''''''''''''''' Launch date TBA, but we think 2012 is unlikely as management will be focused on KL Eco City, Setia Alam / Eco Park, Setia Sky Residences and Fulton Lane in Melbourne.
'''''''''''''''''''''''''' Maintain earnings forecast, pending further details on the project. Maintain our TP of RM3.90 (which is the offer price).
''
Maxis (Hold)
3Q11 Results: In Line
'''''''''''''''''''''''''' Maxis' 9M11 core net profit of RM2,019m came within our expectations although it accounts for 81% of our full-year forecast but only accounted for 68% of consensus estimates.
'''''''''''''''''''''''''' Results are in line as we expect moderate 4Q given that festive seasons were spread between 3Q and 4Q, cost increase (Home fibre broadband rollout and marketing) and higher amortization of handset subsidy. Hence, pressure on EBITDA margin.
'''''''''''''''''''''''''' 3Q11: Maxis registered a revenue of RM2,244m (+4% qoq, +1.3% yoy), EBITDA of RM1,123m (+1.5% qoq, -1.3% yoy), PAT of RM538m (-2.5% qoq, -10.5% yoy).
'''''''''''''''''''''''''' 9M11: Maxis recorded a revenue of RM6,535m (-0.4% yoy), EBITDA of RM3,319m (+2.2% yoy), reported PAT of RM1,630m (-3.3% yoy).
'''''''''''''''''''''''''' Declared a third interim single tier tax exempt dividend of 8.0 sen per share. Maxis hopes to maintain dividends similar to FY10 level of 40 sen.
'''''''''''''''''''''''''' Our DDM-derived TP of RM5.39 remains unchanged.
''
Axiata (Hold)
3Q11 Results: Below Expectations
'''''''''''''''''''''''''' Although Axiata's revenue is within street's estimate, 9M11 core net profit of RM1,838m came in below expectations, accounting for 66% of our full-year forecast and 67% of consensus.
'''''''''''''''''''''''''' 3Q11: Axiata registered a revenue of RM4,194.5m (+7% yoy, +4% qoq), EBITDA of RM1,868.5m (+1% yoy, +7% qoq), PAT of RM679.1m (-9% yoy, -11% qoq).
'''''''''''''''''''''''''' 9M11: Axiata recorded a revenue of RM12,183.6m (+5% yoy), EBITDA of RM5,303.5m (-1% yoy), PAT of RM2,085.3m (-11% yoy).
'''''''''''''''''''''''''' Celcom revenue grew 6.8% yoy driven by 15.1% increase in broadband subscribers and 6.5% increase in revenue generating base customers.
'''''''''''''''''''''''''' XL revenue grew 7.6% yoy in tandem with the increase in subscriber base of 6.7% compared to 3Q10.
'''''''''''''''''''''''''' Robi revenue grew 13.3% yoy mainly from higher prepaid and postpaid revenue which increased by 21.2% and 12% respectively.
'''''''''''''''''''''''''' Dialog revenue grew 10.3% yoy mainly from higher prepaid and global revenue, which increased by 21.7% and 4.8% respectively.
'''''''''''''''''''''''''' We downgrade our call to HOLD despite higher revised SOP target price of RM5.44 from RM5.41 (to factor in high Idea share price).
''
Highlights of BNM Statistics (Oct 2011)
- M1 growth picked up to 16.6% yoy (Sep: +13.3% yoy). M3 growth eased marginally to 11.2% yoy (Sep: +12.2% yoy) despite increase in BNM reserves (Oct: +US$3.8bn).''
- The surge in M1 growth suggests that GDP growth could remain robust after the higher-than-expected 3Q growth.'' We expect GDP growth of 5.0% in 4Q on the back of resilient domestic demand. We maintain our GDP growth forecast of 5.1% for 2011 and 4.5% for 2012.
- We see BNM holding the OPR steady at 3.00% until end-2012. We expect BNM to focus on growth agenda given the recent external developments while inflation is on moderation trend, albeit at an elevated level.
- Indicators for liquidity eased in October after the spike in September arising from massive equity selldown.
''
KLCI: Turning more bullish if the 200-d SMA is violated
'''''''''''''''''''''''''' Amid the overnight surge on Dow and European markets, we have turned more positive on near term KLCI outlook. Today, FBM KLCI will likely to retest the Oct 31's high of 1493 and the long anticipated 200-d SMA barrier (now at 1503), in the wake of the breakout of mid Bollinger band (1462 pts) and more positive technical readings. Further resistance is 23.6% FR or 1530. However, the 200-day SMA barrier may be tough to crack.
''
CENBOND: Strong support near RM0.73-0.76
'''''''''''''''''''''''''' CENBOND is trading at historical 6.5 FY11 P/E. Excluding netcash/share of 23sen (equivalent to 29% share price), it is only trading at 4.5x P/E. The pullback from 52-wk high of RM0.85 (Oct 28) to yesterday's low of RM0.76 has reached the 38.2% FR level and we believe a temporary base has been formed.
'''''''''''''''''''''''''' Upside resistance levels are RM0.85-0.91 whilst supports are RM0.71-0.76. Cut loss'' below RM0.71.
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