Company Name: GENTING PLANTATIONS BERHAD
| Research House: HLG | Price Call: HOLD | Target Price: 7.61 |
Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD
| Research House: HLG | Price Call: HOLD | Target Price: 4.92 |
Stock Name: AFFIN
Company Name: AFFIN HOLDINGS BHD
| Research House: HLG | Price Call: HOLD | Target Price: 2.62 |
Genting Plantations (Hold; TP: RM7.61)
Site visit: Johor Premium Outlets
'''' We visited Johor Premium Outlets (JPO, a 50:50 JV project between Genting Plant and Simon Group) and we walked away feeling positive on Genting Plant's latest venture.
'''' We believe JPO will likely attract shoppers consistently, particularly from residents within the Johor state as well as visitors from Singapore, given its location that already has a captive shoppers of 8.3m and ample car park space (3,000 car park spaces and 30 bus bays for tour groups).
'''' Potential revenue and earnings contribution from JPO aside, we believe the opening of JPO, coupled with the new highway interchange will also boost property demand and prices in that area.
'''' We are maintaining our 2011-2013 net profit forecasts, as this has already been reflected in our forecasts (we have already expected JPO to contribute ~RM11m net profit to Genting Plantations from 2012 onwards, based on ROE of 15%).
'''' Maintain TP at RM7.61 (based on unchanged 13x 2012 EPS of 58.5 sen) and our Hold recommendation on the stock, as the recent share price run-up has capped potential upside on the stock.
''
Axiata (HOLD)
3Q11 Results Briefing
'' Axiata recorded a strong subscriber growth of 26% yoy reaching 186.9m customers despite softening key markets. Revenue growth continues to be driven by significant increase in data particularly at XL and Celcom with YTD growth of 50% and 29% respectively.
'' Celcom subscriber base declined to 11.4m (2.7m postpaid and 8.7m prepaid) due to rationalization of multi-SIM user and we think this is the reason that ARPUs are elevated (postpaid +RM3 to RM95 while prepaid +RM1 to RM37). Meanwhile, MoU broke its down trend and came in higher +6% qoq at 210mins thanks to the festive season in 3Q. Wireless broadband contributed RM197m with +6% qoq on the back of 924k subscribers. Smartphone penetration is 15%.
'' XL successfully gained momentum and acquisition through new offerings with 12% subscribers increase qoq reaching 43.4m. Prepaid ARPU stagnated at IDR31k while postpaid plunged to IDR171k or declined -17% qoq even though 3Q should have the benefit of festive season. XL explained that lower outgoing MoU is due to shifting in subscribers' behavior from voice to SMS and data usage. Smartphone penetration is 11%.
'''' Updated with latest guidance on higher CAPEX and depreciation along with tweaking lower our assumptions of subscriber base and ARPU. Our FY11-FY13 EPS are revised lower by -9.0% to -10.7%.
'''' We keep our HOLD call as we cut out target price by 9% to RM4.92 from RM5.44. We opine that the robust growth story may have come to an end especially for Celcom and XL who are the main contributors as market matures and competition intensifies.
''
Affin Holdings (HOLD)
Not In The "Market" For M&A
'''' Management target 2012 loans growth of 9-10% due to risk pricing, conserving capital and protecting asset quality ahead of Basel III and to protect NIM.'' This is slightly ahead of our more conservative assumption of 7%.
'''' Strong capital position (Tier-1 capital are purely equity) and can comfortably meet Basel III requirements.
'''' Although it is the second smallest bank management believes that there is no urgency to undertake M&A or additional strategic partner given that collaboration with BEA is progressing well albeit at slow pace.''
'''' However, we believe it will still attract M&A interest as its asset size is less than half of the next biggest bank.
'''' Maintain Hold with unchanged target price of RM2.62 based on Gordon Growth with both ROE of 9.2% and WACC of 11.4%.
''
KLCI: More sideways trading after surging 54 pts in 3 days
'''' On the backdrop of a 3-day 54 pts jump and a gravestone Doji formation yesterday, KLCI is likely to encounter more profit taking activities ahead but any selling pressures are likely to be well-absorbed as technical indicators remain positive. Short term resistance remains at 200-d SMA or 1504 pts whilst supports are situated at 100-d SMA (1474) pts) and 1463 (mid Bollinger band).
MASTEL: Poised for triangle breakout
'''' Signs of bottoming up in the trend and momentum coupled with the ADX readings bode well for more rebound towards RM1.16-RM1.24 levels. Major supports are RM1.04 (lower Bollinger band) and RM1.00 psychological level. Cut loss below RM0.98.'' For cheaper exposure, investors can consider MASTEL-WA.
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