QL - OSK raises QL Resources forecast

Stock Name: QL
Company Name: QL RESOURCES BHD
Research House: OSK

OSK Research has raised QL Resources Bhd's net profit forecasts for financial years 2012 and 2013 by 1.6 per cent to 3.8 per cent to RM158.5 million and RM190.8 million respectively.

In a research note today, OSK said the increase was to factor in a higher crude palm oil (CPO) price.

It said QL's three divisions reported robust sales growth, with sales of marine products rising 28.6 per cent to RM338.3 million on higher volume and selling prices of the products.

"Turnover at the integrated livestock division rose to RM706.7 million on higher raw material sales and higher selling prices.
"The palm oil division fared better, with sales rising to RM229.2 million on higher average CPO price," it said.

For the third quarter ended Dec 31, 2010, QL's pre-tax profit rose to RM44.39 million from RM40.01 million in the same period in 2009. Its revenue increased to RM450.94 million from RM370.13 million previously.

OSK said it would maintain its 'buy' call on the stock at RM3.51. -- Bernama

QL - OSK raises QL Resources forecast

Stock Name: QL
Company Name: QL RESOURCES BHD
Research House: OSK

OSK Research has raised QL Resources Bhd's net profit forecasts for financial years 2012 and 2013 by 1.6 per cent to 3.8 per cent to RM158.5 million and RM190.8 million respectively.

In a research note today, OSK said the increase was to factor in a higher crude palm oil (CPO) price.

It said QL's three divisions reported robust sales growth, with sales of marine products rising 28.6 per cent to RM338.3 million on higher volume and selling prices of the products.

"Turnover at the integrated livestock division rose to RM706.7 million on higher raw material sales and higher selling prices.
"The palm oil division fared better, with sales rising to RM229.2 million on higher average CPO price," it said.

For the third quarter ended Dec 31, 2010, QL's pre-tax profit rose to RM44.39 million from RM40.01 million in the same period in 2009. Its revenue increased to RM450.94 million from RM370.13 million previously.

OSK said it would maintain its 'buy' call on the stock at RM3.51. -- Bernama

TCHONG - Positive vibes from sales volume for Tan Chong

Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD
Research House: MIDF

Tan Chong Motor Holdings Bhd
(Feb 24, RM4.90)
Upgrade to buy at RM4.90 with revised target price RM5.60 (from RM4.60): Tan Chong's FY10 net profit of RM229.7 million came within ours but was slightly below consensus expectations, making up 94.6% and 88.4% of the full-year forecasts'' respectively. Tan Chong declared a final gross dividend of six sen per share, bringing total gross dividends of 12 sen per share and yield of 2.2% for FY10.

For FY10, net profit surged by 49.8% on the back of a 22.7% increase in revenue to RM3.51 billion. The positive performance was due to: (i) stronger total industry volume (TIV) sales contribution especially in 1HFY10; (ii) transition from higher commercial vehicle sales mix to stronger passenger models which accounted 76% of total sales in FY10 from 73.8% in FY09; (iii) lower imported costs due to stronger ringgit; and (iv) low base factor of FY09.'' ''

The TIV of new vehicles in Malaysia for FY10 breached the all-time high of 605,156 units or a 12.7% gain from 536,905 units in FY09. Nissan sales command a 5.5% market share of TIV.

Nissan's FY10 sales volume swelled by 10.6% to 34,701 units backed by increased growth from its Grand Livina (+15%'' year-on-year), Sylphy (+60%'' y-o-y)'' Navara (+158% y-o-y) and Urvan (+100% y-o-y). In addition, three new models were introduced ' the 2WD Navarra pick-up, X-Trail and the CKD Teana.

To recap, Teana was launched on Nov 23 with an introductory price of RM138,000 on the 2.0L version. Teana triggered high interest in the D-segment market, competing with the Toyota Camry and Honda Accord. From the launch until January, a total of 2,647 Teana units had been booked, with confirmed sales of 1,612 units (Nov 2010-Jan 2011). However, we note that bulk of the sales contribution of Teana will only be realised in FY11.

Tan Chong's capex for FY11F/13F is budgeted at about RM500 million ' RM700 million and caters for: (i)refurbishment of the Shah Alam plant for export; (ii) construction and operation of the Danang plant in Vietnam; (iii) expansion of its branch'' network, especially in Johor; and (iv)'' investments in manufacturing capabilities to increase local content. We have embedded our FY11F/12F capex forecast of about RM100 million to RM200 million respectively.

Management is optimistic about'' its FY11 prospects and expects earnings to be driven by the successful launch of the Teana, the upcoming seven new models (including facelifts and completely built-up [CBU] as well as the continued'' strengthening of the ringgit. We assume that every 1% increase in the ringgit will lift earnings estimates by 2% to 3%. In addition, Tan Chong's long-run expansion via regional initiatives ' Indochina strategy and its intention to capture the mass market volume, could offer huge upside to earnings and achieve economies of scale. Currently, Tan Chong expects a'' total sales volume of its Indochina strategy for FY11F of 2,425'' units, or a 340.1% gain from 551 units in FY10. ''

The main risk factor is a slump in sales due to the threat of rising interest rates that would dampen'' the overall sales target.

We have increased our net profit forecast for FY11F by 21.5% in view of the 6% to 8% sales volume upgrade and 1% to 1.5% increase in operating margins. This is on the back of a stronger ringgit,'' better product mix and improving economies of scale.

Based on the revision of our earnings forecast, we upgrade our recommendation to 'buy''' from 'sell' as the stock offers more than 15% upside potential. Our target price is now RM5.60 (an increase from RM4.60 previously) based on a FY11F PER of 12 times. The multiple is about 30% higher than the sector's average 2011 PER of nine times. We believe the premium is justified due to its more aggressive expansion plans, including a change in strategy that now involves regional markets. ' MIDF Research, Feb 24


This article appeared in The Edge Financial Daily, February 25, 2011.

PUNCAK - Puncak unlikely to receive compensation

Stock Name: PUNCAK
Company Name: PUNCAK NIAGA HOLDINGS BHD
Research House: OSK

It is highly unlikely that the Selangor government will pay RM853 million in water tariff compensation to Puncak Niaga Holdings anytime soon, says OSK Research.

Due to the delay in receiving the water tariff compensation from the state government since 2009, the sum amounted to RM418.7 million in 2010.

Added to the sum payable of RM434.2 million in 2009, the company expected to receive RM853 million in cash from the Selangor govenment, OSK said.

"However, with regards to the strained relationship between Puncak and the Selangor government, we believe it is very unlikely," it said in a research note today.

The company commenced legal proceedings against the Selangor government for compensation amounting to RM471.6 million for the financial year 2010.

The company's pre-tax profit in the financial year ended Dec 31, 2010 fell to RM268.396 millionm from RM312.606 million chalked up in the same period a year ago, due to higher operating and finance costs incurred.

Revenue, however, rose to RM1.914 billion from RM1.887 billion previously due to higher water consumption.

OSK also revised downwards Puncak's target price to RM3.65 from RM3.85 previously and downgraded the stock to a "trading buy" from "buy" previously given the urgency and recent commitment by the Federal Government.

"We reckon a timeline for completion is still uncertain," it added.

Meanwhile, ECMLibra Investment Research maintained a "hold" call for Puncak but revised the earning estimates downwards to 11.6 per cent to account for higher interest expense.

"We roll forward our valuation to financial year 2011, thereby decreasing our target price from RM2.57 previously to RM2.16," ECMLibra said. -- Bernama

UMW - OSK upgrades UMW share price

Stock Name: UMW
Company Name: UMW HOLDINGS BHD
Research House: OSK

OSK says UMW Holdings Bhd ended the year on a positive note, with core net income surging 72.3 per cent year-of-year.

OSK remains bullish on UMW’s oil and gas division, which is returning to profitability as all its Naga drilling rigs become fully operational.

OSK maintains earnings on UMW, with an upgraded target price of RM8.92 (from RM8.38) on a higher multiple as the company’s outlook is firmly positive. UMW is our top automotive sector pick. - Reuters

MASTEEL - OSK Research keeps Neutral call on Masteel

Stock Name: MASTEEL
Company Name: MALAYSIA STEEL WORKS (KL)BHD
Research House: OSK

KUALA LUMPUR: OSK Research is keeping its Neutral call on Malaysia Steel Works (KL) with a fair value of RM1.34, derived from 6x PER and 0.59x P/NTA on FY11 figures.

It said on Friday, Feb 25 it was happy to see Masteel's bread and butter steelmaking business continue to beat its bigger peers, posting a core net profit of RM42.2m in FY10, which was well within its estimates but above consensus.

'While we are upbeat on earnings for 1HFY11, we remain cautious of its outlook beyond six months and the investment risk from its newly proposed rail transit project in the south of Peninsular Malaysia,' OSK Research said.

AIRASIA - OSK Research maintains Buy on AirAsia, unch TP RM3.86

Stock Name: AIRASIA
Company Name: AIRASIA BHD
Research House: OSK

KUALA LUMPUR: OSK Research said'' AirAsia ended the financial year Dec 31, 2010 with a core net profit (including associates contribution) of RM874 million, in line with its forecast of RM904 million but above consensus.

It said on Friday, Feb 25 that the low cost carrier's core earnings (excluding associates) soared 173% on-year on the back higher yields from ancillary income amid an improving load factor, which enhanced its fleet mileage.

'While jet fuel price is a prevalent risk, we believe the situation is temporary. Furthermore, AirAsia has lined up several initiatives to counter rising jet fuel price should the Middle East turmoil prolong. We maintain our BUY call on AirAsia at an unchanged TP of RM3.86,' OSK Research said

MISC - Maybank IB Research downgrades MISC to Hold, TP RM8.10

Stock Name: MISC
Company Name: MISC BHD
Research House: MAYBANK

KUALA LUMPUR: Maybank Investment Bank Research (Maybank IB) downgraded MISC to Hold with a lower target price of RM8.10.

It said on Friday, Feb 25 that MISC reported a RM1.3 billion gain in 3QFY11 mainly from the disposal of MMHE but operations were below expectations 'as we had underestimated the severity of the petroleum shipping market problem'.

Losses continue to widen. Pending an analyst briefing later Friday, Maybank IB Research said it had 'tentatively downgrade MISC to a Hold and cut FY11-13 earnings by 12%-36% as we expect the petroleum market to only recover in FY13.

'Our new target price of RM8.10 is based on a 10% discount to our revised SOP valuations,' it said.

UMW - HDBSVR sees exciting year ahead for UMW, maintains Buy at SOP of RM8.90

Stock Name: UMW
Company Name: UMW HOLDINGS BHD
Research House: HWANGDBS

KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) sees an exciting year ahead for UMW HOLDINGS BHD [] and maintains a Buy call with a sum-of-parts based target price of RM8.90.

HDBSVR said UMW 4Q10's reported net profit of RM18.5 million was mainly dragged by a one-off impairment losses of RM146m, which it believed was largely linked to its Oil & Gas division (that is Naga 2 and Naga 3).

In its research note issued on Friday, Feb 25 it said that excluding the impairment losses, UMW's net profit in 4Q10 would be RM164.5 million (+45% on-year), taking FY10 net profit to RM658.4 million which was within expectations.

HDBSVR said UMW's topline in 4Q10 grew 15.8% y-o-y to RM3.4bn mainly driven by a 6.3% increase in Toyota vehicle sales to 13.5k units (76% of Group revenue), followed by Heavy & Industrial Equipment (+43% to RM423m) and Oil & Gas (+46% to RM224m).

However, its EBIT margin fell to 6.5% (vs 4Q09: 8.0%; 3Q10: 9.6%) partly dragged by impairment losses.

'Maintain Buy. We expect UMW to turn net cash this year with RM387 million (35 sen a share). Share price catalyst from potential listing of O&G division to unlock value given the improved earnings outlook and valuation for O&G sector. Maintain BUY with SOP-based TP of RM8.90,' it said.

SYSCORP - Shin Yang lowered to 'hold'

Stock Name: SYSCORP
Company Name: SHIN YANG SHIPPING CORP BHD
Research House: AMMB

Shin Yang Shipping Corp, a Malaysian shipping services provider, was cut to “hold” from “buy” at AmResearch Sdn Bhd to reflect weak shipping rates and a slow recovery in the Middle East.

The fair value for the stock was reduced to 95 sen, Alex Goh, a Kuala Lumpur-based analyst at AmResearch, said in a report today. -- Bloomberg

QL - Buy QL Resources: OSK

Stock Name: QL
Company Name: QL RESOURCES BHD
Research House: OSK

QL Resources Bhd’s nine month FY2011 results were within OSK's consensus estimates as revenue and net profit surged 19.8 per cent to RM1274.2m and 16.5 per cent to RM92.9m respectively.

While OSK maintains QL's FY2011 earnings forecast at RM128.2m, it is raising FY2012 and FY2013 net profit forecast by 1.6 per cent to 3.8 per cent to RM128.2 miliion and RM158.5 million respectively, to factor in a higher CPO price. OSK sees QL as a 'buy' and ups target price to RM3.51. - Reuters

ANNJOO - Ann Joo fairly valued at RM2.89: OSK

Stock Name: ANNJOO
Company Name: ANN JOO RESOURCES BHD
Research House: OSK

OSK says that Ann Joo Resources Bhd's FY2010 net profit of RM120m was below its and street estimates as it slipped into the red in Q4.

While OSK expects the company to benefit from huge inventory bought at lower cost and a potential pick-up in steel demand moving into H1 FY2011, it thinks the market may have priced in the potentially upbeat performance.

OSK also suspect that some quarters may be disappointed with the
prolonged delay in its mini Blast Furnace (BF) project.

These factors, together with poor earnings visibility beyond six months, prompt OSK to keep its 'neutral' recommendation on the company and its fair value of RM2.89. - Reuters

RHBCAP - Credit Suisse bullish on RHB Capital

Stock Name: RHBCAP
Company Name: RHB CAPITAL BHD
Research House: CREDIT SUISSE

RHB Capital Bhd was given an “outperform” rating in new coverage by Credit Suisse Group AG, which said there is “huge potential upside” for the company’s market share and profitability.

Credit Suisse is “bullish” because RHB Capital retail banking strategy may lead to “positive” earnings surprises; the company is “well positioned” to be among those benefiting most from Malaysia’s Economic Transformation Programme; its stock is the cheapest among large-cap banks while it is also “under-owned” by foreign investors, analyst Danny Goh wrote in a report today. -- Bloomberg

The stock was given a 12-month target price of 11.80 ringgit, implying 46 percent upside, the note said.

SIME - OSK Research maintains Sell on Sime Darby

Stock Name: SIME
Company Name: SIME DARBY BHD
Research House: OSK

KUALA LUMPUR: OSK Research is maintaining its Sell call on Sime Darby after its six-months earnings for the period ended Dec 31, 2010 suggest that its RM2.5 billion key performance indicator (KPI) net profit was a lowball number.

The research house said on Friday, Feb 25 it had raised its forecast to factor in stronger motor division performance.

'Its operational improvement notwithstanding, we are maintaining our Sell call given that the PLANTATION [] sector is weakening and Sime is among the most expensive at 17.8x FY11 and 16.5x FY12 earnings, after our upward revision in earnings forecast.

'We suspect that much of the optimism relating to the new management has been factored in given the sharply higher consensus forecast against management's KPI net profit,' OSK Research said.

GENM - Genting Malaysia still king of the hill

Stock Name: GENM
Company Name: GENTING MALAYSIA BERHAD
Research House: MAYBANK

Genting Malaysia Bhd
(Feb 24, RM3.22)
Upgrade to buy at RM3.31 with revised target price RM3.67 (from RM2.90): We are impressed by Genting Malaysia's resilient operations despite competition from Singapore. We raise our earnings forecasts by 30% to 37% to account for higher net gaming revenue and maiden Aqueduct contributions. We raise our ex-net cash discounted cash flow-based (DCF) target price to RM3.67 and revise our 'sell' call to 'buy'.

Core net profit in 4Q10 of RM362.9 million (+2% year-on-year, +1% quarter-on-quarter) brought 2010 core net profit to RM1.4 billion (+4% y-o-y) or 124% of our earnings estimate and 110% of consensus estimate. The outperformance was due to q-o-q growth at Resorts World Genting (RWG) despite competition from Singapore, which developed a S$6.7 billion (RM16 billion) industry of its own. The total eight sen less tax (FY09: 7.3 sen less tax) dividend per share (DPS) declared was marginally above expectations.

Core net profit in 4Q10 reflected higher VIP volume and luck factor at RWG y-o-y and q-o-q. Revenue in 2010 would have been 2% lower y-o-y under the normal luck factor, but that is admirable given the new competition. Visitor arrivals at RWG in 2010 rose 2% y-o-y to 19.9 million. Note that 3'' months of Genting UK's operations ' RM18.3 million earnings before interest, tax, depreciation and amortisation (Ebitda) ' were reflected in 2010. The year's Ebitda margin eased 160bps due to higher payroll and promotional expenses.

Our 30% to 37% higher net profit estimates reflect a higher net gaming revenue on RWG's resilient operations and maiden Aqueduct contributions (assumes June opening). We estimate the Aqueduct will contribute some US$50 million or RM150 million to core net profit per year and expect RWG operations to remain resilient.

With our estimates upgrade, we raise our ex-net cash DCF-based target price from RM2.90 to RM3.67. At its last price, the market is discounting not only Genting Malaysia's net cash but the Aqueduct as well. One-year forward PER is undemanding in light of its pipeline of catalysts (introduction of table games at Aqueduct and greenfield casinos in Newham, London and Hoi An, Vietnam). ' Maybank IB, Feb 24


This article appeared in The Edge Financial Daily, February 25, 2011.

AXIATA - Axiata-Celcom dials down a notch

Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD
Research House: CIMB

Axiata Group Bhd
(Feb 24, RM4.85)
Maintain outperform at RM4.95 with target price RM5.90: Axiata's FY10 core net profit was 5% and 4% below CIMB and market expectations due to weak net profit for Celcom and Robi. It also wrote RM1.08 billion off its carrying value of Idea. On a positive note, Axiata proposed a 10 sen maiden single-tier dividend per share (DPS) or 32% payout, in line with our expectations but above the market's three sen estimate.

Axiata expects 10% growth of both its FY11 revenue and earnings before interest, tax, depreciation and amortisation (Ebitda), driven mainly by XL and Robi. We lower FY11/12 core net profit by 3% to 4% to factor in Celcom's slower growth, but double our DPS estimate as we expect a higher payout.

However, our sum-of-parts-based target price is unchanged at RM5.90. While Celcom's growth is slowing, Axiata remains an 'outperform' and our top Malaysian telco pick as Robi is emerging as a key growth driver coupled with dividend upside. A likely re-rating catalyst is dividend surprises.

Celcom's revenue and core net profit were little changed quarter-on-quarter (q-o-q) due to weaker voice revenues while data revenues came from a high base in the festivity-driven 3Q. Its revenue lagged behind DiGi.Com Bhd's 2% q-o-q rise in service revenue. We are still concerned about deflating voice revenues, which are being cannibalised by data revenues. Robi's core net profit fell 51% q-o-q due to the write-off of obsolete SIM cards and higher bad debt provisions.

Given its strong FY11/13 free cash flow forecast, which is 1.2 to 1.3 times core net profit, and lack of acquisition targets, we expect Axiata to double its payout ratio to 60% in FY11 and FY12. The telco says there are no acquisitions on the table and it intends to increase its payouts as its balance sheet is 'lazy'. It may increase the payout frequency from the current annual payout. Even at 60% payout, we expect the telco to be in a net cash position by FY12.

Axiata expects FY11 revenue and Ebitda to rise 10%, fuelled by growth in the high-teens to low 20s for Robi and high single-digit to low teens growth for XL. Revenue growth for Celcom and Dialog is expected to be in the mid-single-digit range. For Celcom, it will entirely be driven by data as it expects voice revenue to stagnate. ' CIMB Research, Feb 24


This article appeared in The Edge Financial Daily, February 25, 2011.

KNM - KNM dragged down by Asia, Oceania

Stock Name: KNM
Company Name: KNM GROUP BHD
Research House: HWANGDBS

KNM Group Bhd
(Feb 24, RM2.43)
Maintain buy at RM2.83 with target price RM3.50: Headline 4Q10 net profit fell 63% quarter-on-quarter to RM20.6 million as KNM posted marginal losses in Asia and Oceania operations. Europe and America operating margin also moderated to 8.2% (from 13.8% in 3Q10) as the company completed the last batch of low margin jobs secured in 2009. Group operating margin stood at 5.3% against 12.8% in 3Q10. As expected, no dividend was declared for the quarter.

Net profit in FY10 of RM131.2 million was below expectations, making up only 77% of our full-year earnings estimates. However, the company's turnaround story is intact as earnings are set to rebound this year, supported by its high order book of RM4 billion. KNM is also set to benefit from increasing oil and gas activities on the local front. In the near term, we understand that the company is targeting RM500 million worth of jobs, from projects ranging from the Sabah Oil and Gas Terminal (SOGT), Petronas regasification plant and Kimanis Power Plant.

We maintain our 'buy' call on KNM with target price of RM3.50'' based on 15.5 times CY11F earnings. KNM is also poised to benefit from growing domestic and global opportunities. Valuation is undemanding at a FY11 PER of 12.5 times against local and regional peers' average of 15.7 times and 16.6 times, respectively. ' HwangDBS Vickers Research, Feb 24


This article appeared in The Edge Financial Daily, February 25, 2011.

PARKSON - Parkson right on target

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD
Research House: OSK

Parkson Holdings Bhd
(Feb 23, RM5.43)
Maintain buy at RM5.46 with revised target price RM6.31 (from RM6.67): Parkson Holdings' (PHB) 1HFY11 results were in line with our forecast and consensus estimates of RM373.9 million and RM371.6 million respectively. Revenue and net profit in 1HFY11 rose 4.6% to RM1412.9 million and 17.2% to RM170 million year-on-year (y-o-y) respectively, attributed to the stronger growth in commissions from concessionaires of 7% to RM792.5 million while direct sales grew 2.5% y-o-y to RM558.0 million.

Apart from new openings, the stronger results were attributed to the impressive same-store sales (SSS) growth in China (+11.4%), Malaysia (+10%) and Vietnam (+23%), which were at least in line with management's same store SSS growth guidance of 11% to 12% for China, 5% to 6% for Malaysia and 15% to 20% for Vietnam. If not for the stronger ringgit, net profit would have surged by 25.4% to RM181.9 million. On a quarter-on-quarter (q-o-q) basis, its top and bottom line improved by 16.9% and 23.1% respectively, driven by the year-end festive seasons.

Despite the lower merchandise margin for its new stores in China and higher operating cost, earnings before interest, tax, depreciation and amortisation (Ebitda) margin improved one percentage point to 33.8% on higher other operating income and a better overall merchandise gross margin of 19.7% against 19.5% in 1HFY10. Commission rate was flat at 20.1% against 20.5% in 1HFY10 while direct sales margins expanded slightly to 16.2% from 15.9%.

Parkson has identified eight new locations in China for new stores in 2011. These outlets have a total floor space of 300,000 sq m, representing a 30% increase in total floor space in China. In Malaysia and Vietnam, Parkson will open KL Festival City in June 2011 and Landmark Tower Hanoi in 3Q11.

Despite the numbers being in line, our FY11/12 earnings forecasts have been trimmed by 1.6% to 3.3% to RM361.4 million and RM439.7 million respectively, as we have updated the total floor space for newer outlets and included higher operating costs. Our target price is cut to RM6.31 from RM6.67, based on a realisable net asset value of 24 times PER for its China operation, 14 times PER (12 times previously given the positive retail outlook and in line with the higher PER of Aeon) for its Malaysia operation, and 10 times PER for both Vietnam and the excluded stores. ' OSK Investment Research, Feb 23


This article appeared in The Edge Financial Daily, February 24, 2011.

KLK - KL Kepong downgraded to 'hold' at ECM

Stock Name: KLK
Company Name: KUALA LUMPUR KEPONG BHD
Research House: ECMLIBRA

ECM Libra Investment Research has downgraded plantation company KL Kepong Bhd, from a trading "buy" to "hold", with a lowered target price of RM19.80 from RM21.70 previously. This follows the recent downgrade of the sector to neutral.

ECM Libra said there was potential for crude palm oil (CPO) prices to correct further due an expected turnaround in Malaysian production and recovery soybean supplies.

Reviewing KL Kepong's first quarter result, the research house said its net profit made up 37 per cent of its estimates, while the manufacturing sector of the company has outperformed expectation.

"Adding back the RM50.2 million fair value losses, the manufacturing segment turned in an operating profit due to lower feedstock cost, coupled with higher selling prices of refined product," it said in a statement here, today.

KL Kepong posted a net profit of RM304.19 million for the first quarter ended Dec 31, 2010, against RM241.82 million of the same quarter in 2009. Revenue jumped to RM2.42 billion from RM1.75 billion, previously. -- Bernama

GENM - ECM maintains 'hold' call on Genting

Stock Name: GENM
Company Name: GENTING MALAYSIA BERHAD
Research House: ECMLIBRA

Genting Malaysia Bhd is still on a "Hold" call by ECMLibra Investment Research as its fourth quarter results are within
expectations.

"The fourth quarter core net profit reflected higher VIP volume and luck factor at Resorts World Genting year-on-year as well as quarter-on-quarter," said the research house.

It said revenue for fiscal year 2010 would have been two per cent lower year-on-year under normal win rate but it was admirable given the new competition from Singapore.

ECMLibra also maintained RM3.52 target price per share for the group. "Our catalyst to re-rate Genting Malaysia would be from the introduction of table games at Aqueduct and greenfield casinos in Newham, London and Hoi An, Vietnam," it added. -- Bernama

GENM - OSK Research maintains Buy on Genting Bhd, TP RM14.16

Stock Name: GENM
Company Name: GENTING MALAYSIA BERHAD
Research House: OSK

KUALA LUMPUR: OSK Research said GENTING BHD []'s FY10 results were in line with its'' estimates after adjusting for various exceptional items for 4QFY10.

It said on Thursday, Feb 24 that all of Genting's divisions apart from the power and oil & gas division reported sequential growth, which drove the group's core EBITDA 11% higher on-quarter.

'The maiden contribution from Genting Singapore in FY10 was the key driver of Genting's spectacular 89% on-year full year FY10 EBITDA growth.

'Maintain BUY and TP of RM14.16. The group's current valuation of 13.2x FY11 PER is attractive against a 3-year EPS CAGR of 18%,' OSK Research said.

KLK - OSK Research: KL Kepong's results commendable, maintains Neutral call

Stock Name: KLK
Company Name: KUALA LUMPUR KEPONG BHD
Research House: OSK

KUALA LUMPUR: OSK Research said'' KL Kepong (KLK)'s 1QFY11 numbers were commendable despite its comparatively low realised CPO price.

'We view KLK as the best managed big cap PLANTATION [] company in Malaysia, which boasts of a tree age profile that is among the better ones in the industry, which will spur double-digit growth in the next five years.

'Strong production growth plus its rubber exposure and downstream business should help to cushion earnings should crude palm oil price turn south. Hence, despite its fair valuation, we are maintaining our Neutral call,' it said.

HLBANK - 'Hold' call for Hong Leong Bank kept

Stock Name: HLBANK
Company Name: HONG LEONG BANK BHD
Research House: ECMLIBRA

ECM Libra has maintained its "hold" call for Hong Leong Bank Bhd and increased the target price to RM10.12 per share from RM9.43.

In a research note today, ECM Libra said the bank was above industry loans growth as its loan portfolio had grown very aggressively over the past four quarters.

"Annualised year to date gross loans growth stood at 17 per cent with almost 70 per cent of credit expansion year to date, going to residential property loans which made up 41 per cent of the loan portfolio," it said.

It also said, for the first half financial year 2011, Hong Leong Bank's net profit was 19.6 per cent higher year-on-year on the back of strong gross loan growth of 15.5 per cent year-on-year.

Its non-interest income also increased by 17.6 per cent and higher associate contribution from the Bank of Chengdu rose by 41.2 per cent.

Meanwhile, OSK Research Sdn Bhd has maintained a "trading buy" call for Hong Leong Bank, with a target price of RM9.86 per share.

It said loan growth momentum remained promising as it increased by 4.1 per cent quarter-on-quarter, similar to the first quarter financial year 2011's quarterly growth.

The bank's first half financial year 2011 annualised growth of 16.5 per cent was also the fastest recorded by the bank over the past five years.

"The bulk of growth was from residential properties, working capital, and non-residential properties while higher purchase loans were up by a subdued 3.2 per cent year-on-year," OSK said. -- Bernama

AXIATA - OSK Research ups Axiata TP to RM5.83 from RM5.80

Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD
Research House: OSK

KUALA LUMPUR: OSK Research said as expected, Axiata booked the earlier flagged impairment charge on Idea which contributed to the headline loss in 4QFY10.

It said on Thursday, Feb 24 that core earnings were nonetheless in line with its and consensus expectations. A first dividend per share of 10sen (32% payout) was'' proposed payable after its AGM in 2Q11.

'We view its 2011 KPIs as being low-balled with management aiming to outperform these targets. Our FY11 forecast is largely retained but we cut FY12 forecast by 8% post the conference call.

'We roll over our valuation metric to FY12 and now impute a 20% discount on Idea's valuation to factor in regulatory risks in India. Overall, our TP is raised slightly to RM5.83 from RM5.80. Axiata is trading at compelling 12.2x FY12 EPS for a 2 year EPS CAGR of 39.2%,' it said.

TCHONG - Tan Chong raised to 'buy' at Maybank

Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD
Research House: MAYBANK

Tan Chong Motor Holdings Bhd., a Malaysian automotive assembler, was upgraded to “buy” from “hold” at Maybank Investment Bank Bhd. to reflect its growth prospects.

The share price estimate was increased to 5.75 ringgit from 5 ringgit, Wong Chew Hann, an analyst at Maybank, wrote in a report today. - Bloomberg

KLK - KL Kepong downgraded to 'hold' at ECM

Stock Name: KLK
Company Name: KUALA LUMPUR KEPONG BHD
Research House: ECMLIBRA

Kuala Lumpur Kepong Bhd., a Malaysian palm oil producer, was downgraded to “hold” from “trading buy” at ECM Libra Capital Sdn. on expectations that prices for the edible oil will fall.

Its share estimate was cut to 19.80 ringgit from 21.70 ringgit, analyst Bernard Ching said in a report today. - Bloomberg

IJM - IJM Corp lowered to 'hold' at Maybank

Stock Name: IJM
Company Name: IJM CORPORATION BHD
Research House: MAYBANK

IJM Corp, a Malaysian construction, property and plantation group, was cut to “hold” from “buy” at Maybank Investment Bank Bhd., after reporting third-quarter earnings that were “below expectations.”

The share price estimate was increased to 6.50 ringgit from 6.40 ringgit, Wong Chew Hann, an analyst at Maybank, said in a report today.

IJMPLNT - IJM Plantations cut to 'hold' at ECM

Stock Name: IJMPLNT
Company Name: IJM PLANTATIONS BHD
Research House: ECMLIBRA

IJM Plantations Bhd., a Malaysian palm oil producer, was downgraded to “hold” from “trading buy” at ECM Libra Capital Sdn. on expectations that prices for the edible oil will fall.

Its share estimate was cut to 2.80 ringgit from 3.99 ringgit, analyst Bernard Ching said in a report today. - Bloomberg

GENM - Genting M'sia raised to 'buy' at Maybank

Stock Name: GENM
Company Name: GENTING MALAYSIA BERHAD
Research House: MAYBANK

Genting Malaysia Bhd., a casino and hotel operator, was raised to “buy” from “sell” at Maybank Investment Bank Bhd. to reflect its resilient operations and growth prospects.

The share price estimate was increased to 3.67 ringgit from 2.90 ringgit, Wong Chew Hann, an analyst at Maybank, wrote in a report today. - Bloomberg

PLUS - ECM maintains 'hold' call on PLUS

Stock Name: PLUS
Company Name: PLUS EXPRESSWAYS BHD
Research House: ECMLIBRA

ECMLibra Investment Research has maintained its 'hold' call on PLUS Expressways Bhd with a target price of RM4.60, reflecting the takeover offer price by UEM Group-Employees Provident
Fund (EPF).

In its research note today, ECM Libra said capital repayment of RM4.60 a share would be carried out in early September 2011.

Meanwhile, OSK Research Sdn Bhd said upon the disposal of its business to UEM-EPF, PLUS would return the proceeds to shareholders via a special dividend and capital reduction.

It said in its research note that at the current share price of RM4.44, there appeared to be a minimal upside of 3.6 per cent to the RM4.60 offer price.

The research house expected PLUS earnings, which were scheduled to be released today, to be in line with expectations.

The toll operator is forecast to post a net profit of RM1.254 billion on the back of RM3.366 billion in revenue for financial year ended 2010. -- Bernama

DAYANG - ECM maintains 'hold' call on Dayang

Stock Name: DAYANG
Company Name: DAYANG ENTERPRISE HOLDINGS BHD
Research House: ECMLIBRA

Dayang Enterprise Holdings Bhd's recent fund raising exercise of RM245 million indicates that it is on merger and acquisition mode, says a research house.

ECM Libra, which maintained a 'hold' recommendation on Dayang at a target price of RM2.04, said the funds came after the company disposed a 40 per cent stake in Borcos Shipping Sdn Bhd for RM135 million and RM110 million from the rights issue.

"Whether they would buy new assets or buy out competitors remain to be seen," it said in a research note here. As at 4.45pm on Bursa Malaysia, the company's share price stood at RM2.04.

ECM Libra also does not expect Dayang to announce any major jobs in the near term as its recent topside maintenance services contract worth RM802 million from Petronas Carigali will only come through in the second half of the year. -- Bernama

PARKSON - OSK maintains 'buy' call Parkson

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD
Research House: OSK

OSK Research Sdn Bhd maintained its 'buy' call on Parkson Holdings Bhd at a lower target price of RM6.31 from RM6.67 previously.

In a research note today, OSK said Parkson's first-half 2011 financial result was in line with its forecast and consensus estimates of RM373.9 million and RM371.6 million respectively.

"Apart from new openings, the stronger results were attributed to the impressive growth in China (+11.4 per cent), Malaysia (+10 per cent) and Vietnam (+23 per cent).

Meanwhile, HwangDBS Vickers Research Sdn Bhd has trimmed Parkson's financial years 2011-2013 forecast earnings by five to 10 per cent following a three-year expansion plan by its Hong Kong-listed unit, Parkson Retail Group.

However, despite the earnings downgraded, the research house still liked Parkson for its attractive valuations compared to its peers.

HwangDBS has maintained 'buy' call on Parkson at a lower target price of RM6.00 from RM6.90 previously. -- Bernama

GENP - CIMB Research: Genting Plantations met expectations, stock remains a Neutral

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD
Research House: CIMB

KUALA LUMPUR: CIMB Equities Research said Genting PLANTATION []s' financial results met its expectations.

It said on Wednesday, Feb 23 that net profit was just 0.5% below its forecast though it missed consensus by 4%.

The research house said the small variance relative to its numbers was due mainly to higher losses from its Indonesian estates.

Genting Plantations declared a special dividend of three sen and final dividend of 5.5 sen, leading to a full-year dividend of 12.5 sen, a shade below CIMB Research's 13 sen forecast.

On Tuesday, Genting Plantations, benefiting from the surge in crude palm oil (CPO) prices, reported its fourth quarter earnings rose 31.1% to RM102.76 million from RM78.35 million a year ago.

Revenue increased by 23.3% to RM296.70 million in the quarter ended Dec 31, 2010 from RM240.56 million while earnings per share were 13.54 sen compared with 10.34 sen.

'We are keeping our earnings forecasts and target price of RM9.06, based on a 10% discount to SOP. The stock remains a NEUTRAL as we feel its premium P/E ratings already reflects the group's major expansion plan for Indonesia and the strong earnings prospects in the current year.

'For exposure to the Malaysian plantation sector, we continue to prefer Sime Darby,' it said.

BAT - OSK keeps 'sell' call on BAT

Stock Name: BAT
Company Name: BRITISH AMERICAN TOBACCO (M)
Research House: OSK

OSK Research has raised the revenue and net earning estimates of British American Tobacco (M) Bhd (BAT) by three per cent and five per cent respectively, upon updating the forecasts and tobacco industry volume.

Nevertheless, it said, BAT would continue to see its sales volume decline but this would be partially offset by higher selling prices.

"High excise duties will continue to cut into profits as we see net earnings falling 8.9 per cent year-on-year.

"Upon revising our earnings estimates on updating our forecasts, we raise our target price for BAT to RM41.00," OSK said in a note today.

It, however, maintained its 'sell' call on the company.

In a filing to Bursa Malaysia, BAT reported a lower pre-tax profit of RM959.181 million for financial year ended Dec 31, 2010 from RM1.005 billion previously.

Revenue, however, was higher at RM3.965 billion from RM3.923 billion previously.

Meanwhile, MIDF Research, in a note, has trimmed BAT's net profit forecast for this year after fine-tuning the expenses to incorporate an additional five per cent to cost from the Dunhill Reloc and also the premium lost with the ban of small packs as BAT has about 40 per cent exposure in this segment amid an increase in export volumes.

MIDF said this year was expected to be challenging with concern over the expected increase in excise duty in the upcoming budget and worsening situation with regards to illicit trading.

"The Asean Free Trade Area is expected to see a flood of foreign cigarettes that will increase competition in the market," it said.

ECMLibra Investment Research has revised the target price of BAT upwards to RM43.80 with the rolling-over to financial year 2011 earnings.

"However, we are cautious in our upgrade to 'hold' due to the negative headwinds from BAT''s steeper-than-industry-average loss of market share, expected spike in illicit trade following the steep duty increase last year," it said in a note. -- Bernama

MHB - ECM maintains 'hold' call on MMHE

Stock Name: MHB
Company Name: MALAYSIA MARINE AND HEAVY ENG
Research House: ECMLIBRA

ECM Libra is maintaining its "hold" call on Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE), with a target price of RM5.80 per share.

The research housed based its assessment on the shipbuilder''s near-term tender book which currently stood at RM7 billion coupled with the fact that phase one of its project in Turkmenistan was nearing completion.

Expectations are rife that MMHE would have a smooth transition into Phase Two of the project.

"We view that an announcement on this will be made by end-March but in the event that is not, it should be expecting a blip in first-quarter financial year 2012 results," it said in a research note today.

ECM Libra also earmarked MMHE to take the lead in government's move to consolidate the fabrication industry and the prospect of them adding yards space was no doubt a positive one, it added. -- Bernama

GENP - OSK keeps 'sell' call on Genting Plant

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD
Research House: OSK

OSK Research has maintained its 'sell' call on Genting Plantations Bhd (GPB) as the current price was still not attractive enough on a risk-reward basis.

The research firm said in the event of downcycle, GPB could weaken further and its production growth was not strong enough to counter the effects of weaker crude palm oil price on its earnings.

"The company continues to make good planting progress in Indonesia but will only see meaningful contribution to its earnings in calendar year 2013," it said in a research note today. - Bernama

RHBCAP - RHB Capital raising the bar

Stock Name: RHBCAP
Company Name: RHB CAPITAL BHD
Research House: AMMB

RHB Capital Bhd
(Feb 23, RM8.10)
Maintain buy at RM8.17 with fair value RM9.70: We maintain our 'buy' rating on RHB Capital Bhd (RHB Cap) with an unchanged fair value of RM9.70. This is based on a return on equity (ROE) of 15.4% FY11F leading to a fair price-to-book value of 1.8 times FY11F.

RHB Cap recorded an 8.2% quarter-on-quarter (q-o-q) and 13% year-on-year (y-o-y) increase in 4QFY10 net earnings to RM380.2 million. The full-year net earnings came in at RM1.42 billion, 4.2% above our forecast and 2.3% above consensus estimate of RM1.39 billion. The upside surprise is mainly in a much lower than expected loan loss provision, but we view this as being backed by a significantly better asset quality.

The company declared a higher final gross dividend per share (GDPS) of 21.38 sen (Net DPS: 16.04 sen). The total GDPS for FY10 would be 26.38 sen, above our estimated 25 sen and consensus' 21.8 sen. Net dividend payout ratio for FY10 is 30%, in line with the company's guidance in the early part of 2010.

Gross loans grew 4.6% q-o-q in 4QFY10 and 23.5% in FY10, above the company's earlier guidance of 15%. Overall, gross impaired loans balance has vastly improved, coming off by a significant 18.6% q-o-q.

This was derived from both write-offs as well as much better recoveries. Gross impaired loans ratio has now been brought down to 4.4% as at end-December 2010, which is 1.2 percentage point lower than end-September 2010's 5.6%.

RHB Cap's latest set of results is highly convincing in our view, in terms of strong top line growth, significantly better asset quality and its commitment to enhance shareholders return in the form of better dividends.

The company unveiled its main KPI targets for FY11F: (i) ROE target in excess of 15.2%; (ii) Gross impaired loans ratio of 4% FY11F (FY10: 4.4%); (iii) Loans growth of at least 15%; and (iv) Deposit growth of at least 15%. With the latest KPI targets, we have now modelled in an ROE of 15.4% for FY11F, on net earnings of RM1.73 billion. We expect upgrades to consensus' net earnings of RM1.6 billion.

We maintain 'buy' on RHB Cap. Key re-rating catalysts are: (i) Ability to achieve its new key KPI targets for FY11F; (ii) Successful execution of its Indonesia expansion; and (iii) Improved asset quality data in terms of better gross impaired loans ratio as well as a higher loan loss cover. ' AmResearch, Feb 23


This article appeared in The Edge Financial Daily, February 24, 2011.

MMCCORP - MMC Corp building on a recovery year

Stock Name: MMCCORP
Company Name: MMC CORPORATION BHD
Research House: HWANGDBS

MMC Corporation Bhd
(Feb 23, RM2.77)
Maintain buy at RM2.81 with target price RM4.05: Headline net profit in 4Q10 of RM105 million (-11% quarter-on-quarter; -3% year-on-year) takes FY10 net profit to RM345 million. Profit was partly lifted by a lower effective tax rate from recognition of deferred tax income largely from Pelabuhan Tanjung Pelepas (PTP), but in line with our RM334 million forecast.

At the pretax line, the numbers were below expectations from largely lower transport and logisitics (T&L)earnings begore interest and tax (Ebit), possibly dragged down by Senai Airport and SMART. For FY10, T&L Ebit grew 12% y-o-y driven by port business ' throughput at PTP rose 8.6% to 6.5 million TEU, while Johor Port's conventional cargo and container volumes rose 9.2% and 3.7% respectively. In energy and utilities, Malakoff's higher despatch factor (54%) in FY10 (against 50.4% in FY09) and higher volume for Gas Malaysia (+9.6% y-o-y) drove FY10 Ebit up 7% y-o-y.

Meanwhile, associate losses halved to RM52 million in FY10, but Zelan losses continued to drag at MMC's bottom line.

Trimming FY11/12F earnings by 1% to 5% to reflect continued losses at Zelan after it disclosed there may be liquidated ascertained damages (maximum of RM125 million) and risk of its RM132 million performance bond for its coal-fired power plant project in Indonesia being called upon. However, the impact is offset by a lower effective tax rate.

The immediate catalyst for MMC is the RM36 billion MRT project, which could add RM1.56 per share to its sum-of-parts value (we factored in 50%). Tunnelling for the blue line is expected to be worth RM3 billion to RM4 billion, and some awards should materialize in 2H11.

The other catalysts are: (i) the bid for expansion of its 2,100MW Tanjung Bin coal-fired plant by 1000MW will close in April 2011; (ii) Gas Malaysia listing; (iii) more infrastructure-related projects; and (iv) realisation of higher values for its Tanjung Bin and Senai land, where MMC is supposedly in serious negotiations to bring in oil tank farm operators. ' HwangDBS Vickers Research, Feb 23


This article appeared in The Edge Financial Daily, February 24, 2011.

GENP - Cautious outlook for Genting Plantations

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD
Research House: MAYBANK

Genting Plantations Bhd
(Feb 23, RM7.88)
Maintain hold at RM7.97 with revised target price RM8.60 (from RM9.10): Net profit in 2010 of RM320 million was stronger (+36% year-on-year) on higher crude palm oil (CPO) average selling prices (ASPs) despite weaker production. The results were in line with our forecast. Going forward, we see minimal upside to Genting Plantations' share price as we expect CPO spot to normalise during 2H11. Among the large cap plantation stocks, Genting Plantations is most leveraged to CPO prices. Our revised earning and valuation estimates resulted in a lower RM8.60 target price (-5%). Maintain 'hold'.

Genting Plantations' 4Q10 recurring net profit of RM109 million (+35% quarter-on-quarter, +39% y-o-y) brings 2010 net profit to RM320 million (+36% y-o-y), 104% of our forecast. Plantation revenue in 4Q10 increased by 21% q-o-q on higher CPO ASPs of RM3,188 per tonne (+24% q-o-q, +43% y-o-y) on the back of marginally lower production (-4% q-o-q, -13% y-o-y). Overall, 2010 was a fruitful year for Genting Plantations, with 31% higher revenue y-o-y attributable to stronger CPO ASPs (+22% to RM2,717 per tonne) and marginally higher fresh fruit bunch (FFB) production (+3.4%).

Management indicated that 1Q11 production would be weaker as January 2011 FFB production of 76,295 tonnes (-17% month-on-month) was the lowest since February 2009, followed by flat production expected in February 2011. Nevertheless, management expects production to pick up after 2Q11 as the tree-stress problem dissipates and guided that 2011 FFB production could increase by 5% to 6%.

We now impute a higher 2011 CPO ASP of RM3,200 per tonne (previously RM3,000 per tonne). We believe the CPO spot will normalise from current high levels (RM3,726 per tonne) during 2H11 as palm production recovers. We retain our RM3,000 per tonne ASP forecast for 2012. Consequently, we raise 2011 net profit forecast by 11% and marginally for 2012. We also introduce our 2013 forecast.

Genting Plantations' share price has consolidated by 9% year-to-date (YTD), in line with the trend in spot prices (-9% YTD). We value Genting Plantations on a sum-of-parts basis, with the plantations on discounted cash flow (DCF), property on realisable net asset value and biotechnology at 0.5 times book cost.

Plantation accounts for RM7.73 of our new target price, which we have lowered in terms of DCF parameters. Our new target price of RM8.60 implies 15.9 times 2011 PER and 17.2 times 2012 PER. ' Maybank IB Research, Feb 23


This article appeared in The Edge Financial Daily, February 24, 2011.

PETGAS - Buy Petronas Gas: OSK

Stock Name: PETGAS
Company Name: PETRONAS GAS BHD
Research House: OSK

OSK says that Petronas Gas nine month financial year (FY) 2011 annualised results were above its consensus forecast, despite management’s continued conservative guidance.

With propane and butane prices set to make a rebound with higher oil prices, OSK tweaked up its forecastand fair value slightly.

OSK believes Petronas Gas provides a defensive investment option in these volatile times with a yield of 4.9 per cent and further catalyst in the form of a new revenue stream when its LNG regas plant is completed.

OSK sees the company a 'buy' and has increased the target price to RM13.56. -- Reuters

MMCCORP - OSK Research: MMC Corp's results below expectations

Stock Name: MMCCORP
Company Name: MMC CORPORATION BHD
Research House: OSK

KUALA LUMPUR: OSK Research said MMC Corp's results were again below expectations although in making its Trading Buy call it had anticipated the poor results but strong news flow.

The research house said on Wednesday, Feb 23 this time, provisions at Kapar and exceptionally high Minority Interest (MI) charges dragged its 4Q into core net losses, which were offset by an exceptional RM134 million gain from the sale of Sime Darby shares.

'As MMC's operations excluding associates and exceptional items continued to improve, we are actually tweaking up our profit forecast going forward and our Sum of Parts fair value slightly.

'MMC remains a Trading Buy (at RM2.81, revised TP RM3.62 from previous TP RM3.52) with potential news in the form of a new 1000MW power plant extension, Gas Malaysia's listing and an MRT contract award,' it said.

ALAM - Alam Maritim looking forward to 2011

Stock Name: ALAM
Company Name: ALAM MARITIM RESOURCES BHD
Research House: OSK

Alam Maritim Resources Bhd
(Feb 21, RM1.05)
Maintain buy at RM1.07 with target price RM1.50: As we highlighted in our December 2010 company update, there may be a provision for doubtful debts arising from Vastalux Energy Bhd amounting to RM30 million. Also, we note that the meeting of Vastalux creditors in the same month was inconclusive because creditors, including Alam Maritim did not agree to Vastalux's proposals. The proposals include the issuance of 117.5 million new Vastalux shares, 50% to be settled through the issuance of 293.6 million redeemable cumulative unsecured loan stocks (RCULS) and the remaining 30% to be waived. Hence, we do not discount the possibility of Alam Maritim's management making a provision for the sum owing to it, and if it does, the company's 4QFY10 results are likely to fall into the red.

This is because we noted that there had been no change in the company's operating environment in 4QFY10, as it did not announce any major vessel contracts or the revision of charter rates. With Alam Maritim's 9MFY10 and 3QFY10 net profit coming in at RM47.4 million and RM8.9 million respectively, we expect a consistent quarter if no provisions for Vastalux are made.

Given that Petronas has been aggressively awarding new oil and gas contracts, especially those relating to existing and marginal oilfield developments, we believe Alam Maritim stands a good chance of securing some of these jobs since its fleet utilisation is at about 70%, which indicates that there is still room to grow its earnings. Also, the company has the right asset mix (comprising mainly 5,000 bhp vessels), which fits into the current O&G development theme.

Our target price for Alam Maritim remains unchanged at RM1.50 based on a PER of 15 times FY11earnings. Although investors may be uncomfortable with the negative news flow on Vastalux, we believe that this unfortunate event would probably have been built into its current share price, and that investors should turn to the company's longer-term outlook instead. ' OSK Investment Research, Feb 21


This article appeared in The Edge Financial Daily, February 22, 2011.

KFC - OSK Research: KFCH revenue, core net profit within expectations

Stock Name: KFC
Company Name: KFC HOLDINGS (M) BHD
Research House: OSK

KUALA LUMPUR: OSK Research said KFC Holdings' FY10 revenue and core net profit of RM2522.4 million (up 9.8% on-year) and RM150.2 million (+15.2% on-year) respectively were within its and consensus estimates.

It said on Tuesday, Feb 22 that buoyed by higher average same-store-sales growth, new openings and the introduction of new products, its restaurant segment posted 9.6% growth to RM1496.9 million while the integrated poultry division saw a 10.2% jump in revenue on-year to RM533.4 million.

OSK Research said the FY10 core EBIT margin was 0.2 percentage point better on-year, mainly bolstered by the local KFC operation and integrated poultry division.

'Our FY11 and FY12 net profit forecast is raised by 1.3% - 1.8% to RM164.6 million and RM181.5 million respectively after factoring in a stronger US$/ringgit exchange rate and higher raw material cost. Maintain NEUTRAL,' it said.

EVERGRN - HwangDBS maintains 'buy' call on Evergreen

Stock Name: EVERGRN
Company Name: EVERGREEN FIBREBOARD BHD
Research House: HWANGDBS

HwangDBS Vickers Research is maintaining its "buy" recommendation on Evergreen Fibreboard Bhd with a target price of RM2 despite the company recording lower profits in the fourth-quarter of last year.

The research firm said the company was well positioned to benefit from the economic recovery, as it was the fifth largest medium-density fibreboard (MDF) producer in the world.

It expects MDF prices to rise, going forward, in line with expected stronger demand. "Looking ahead, we expect earnings to improve as glue price should normalise," it said in a research note today.

For the financial year ended Dec 31, 2010, Evergreen posted a higher pre-tax profit of RM115.151 million compared with RM80.752 million chalked up previously.

Revenue increased to RM951.186 million, for the period under review, from RM771.514 million previously.

Meanwhile, OSK Research raised Evergreen's revenue forecast on the back of higher sales and average selling prices.

The research firm said sales would be backed by both local and offshore demand, which would drive up the average utilisation rate to 85 per cent.

"We also see selling prices tick up by five per cent in financial year 2011 as management increases selling prices to pass on the higher cost to customers and to match market demand," it added. -- Bernama

NOTION - Notion VTEC gains on RHB upgrade

Stock Name: NOTION
Company Name: NOTION VTEC BHD
Research House: RHB

Notion VTEC Bhd, a Malaysian metal processor and tools maker, rose in Kuala Lumpur trading after RHB Research Institute Sdn Bhd upgraded the stock to “market perform” with a higher fair value of RM2.17.

Its shares gained 1.5 per cent to RM2.09 at 9:21 a.m. local time, the most since Feb. 14. -- Bloomberg

IJMPLNT - IJM Plant downgraded to 'hold'

Stock Name: IJMPLNT
Company Name: IJM PLANTATIONS BHD
Research House: HWANGDBS

IJM Plantations Bhd, a Malaysian plantations company, had its stock rating downgraded to “hold” from “buy” at HwangDBS Vickers Research Sdn Bhd on an expected low dividend yield and forecast negative earnings growth over the next two years.

The share price estimate was cut to RM3.30 from RM3.80 on higher capital expenditure requirements and lower growth, HwangDBS said in a report today. -- Bloomberg

AIRASIA - OSK sees AirAsia Q4 earnings up 27.5pc

Stock Name: AIRASIA
Company Name: AIRASIA BHD
Research House: OSK

OSK Research expects AirAsia's fourth quarter earnings to jump 27.5 per cent quarter-on-quarter on a higher-than expected load factor.

In anticipation of the better-than-expected results, the research firm has increased its earnings forecast for the low-cost carrier by six per cent for financial year 2010 and two per cent for financial year 2011.

However, OSK Research has forecast a 3.7 per cent drop for financial year 2012, after factoring in a higher jet fuel price assumption.

"AirAsia's financial year 2010 core bottom-line is expected to end on a strong note with a whopping 80.6 per cent increase year-on-year," it said in a research note today.

The research firm has raised its target price to RM3.86 from RM3.78 previously. -- Bernama

MAYBANK - Maybank still a 'buy': HwangDBS

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD
Research House: HWANGDBS

HWANGDBS Vickers Research Sdn Bhd maintained a "Buy" call on Malayan Banking Bhd (Maybank) with a target price of RM10.80 as it saw a good momentum for the bank's second-quarter performance.

Maybank's net profit of RM1.12 billion, chalked up in the second-quarter financial year 2011, was driven by higher net interest income and Islamic banking income coupled with lower provisions, the research house said in a note today.

"Our target price is equivalent to 2.5 times calendar year 2011 book value, still below its ten-year historical high of 2.7 times.

"We tweaked our financial year 2011 to financial year 2013 estimates after accounting for the new mix of non-interest income and operating expenses," it said.

Another research firm, ECM Libra Investment Research, downgraded its target price for Maybank from RM10.26 to RM9.96.

It said the adjustment made to Maybank's share base and reserve was based on the fact that its dividend reinvestment plan participation rate of almost 90 per cent had surpassed expectation.

"Key risk include lower-than-expected loans growth, net interest margin compression and deterioration in asset quality," ECM Libra said.

However, the research firm maintained a "Buy" call on Maybank as the bank continued to trade its historical price per book valuation. - BERNAMA

PARKSON - Retailers to deliver good earnings: OSK

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD
Research House: OSK

THE retail industry will continue to deliver good earnings this year driven by strong consumer spending and expansion plans of companies, says OSK Research.

In a note today, OSK said the removal of the import duty on 300 items which are targeted at attracting tourists, would also substantially benefit retail companies.

Apart from organic growth which will be supported by strong consumer spending, the continuous expansion into new markets or adoption of different strategies to capture different market segments will also boost earnings, it said.

Generally, it said retail companies also offer slightly higher average dividend yields and more stable earnings growth, versus food companies.

OSK maintain the "overweight" call on the retail industry as it expects stronger consumer spending and aggressive plans of companies to boost earnings.

Given the positive outlook, the research firm is raising the target price of AEON Co (M) Bhd, Bonia Corporation Bhd and Padini Holdings Bhd to RM7.98, RM2.52 and RM1.01 respectively.

The target price of Parkson Holdings Bhd was raised to RM6.67 with a "buy" call, it said.

"Parkson, which has exposure in high growth countries such as China, Vietnam and soon in Cambodia, is our top pick within our retail universe," it added.

While a gradual cut in subsidy would trigger a knee-jerk reaction in consumer spending, OSK said the impact could be short-lived, as consumers adapt to the higher cost of living.

It said retail companies have fared well despite the hike in petrol price and recession in 2009.

"We believe that while consumers would normally be affected psychologically, they would still buy as their buying power remains intact," it said. -- BERNAMA

ANNJOO - Ann Joo's FY10 results to come in below expectations

Stock Name: ANNJOO
Company Name: ANN JOO RESOURCES BHD
Research House: RHB

Ann Joo Resources Bhd
(Feb 22, RM2.92)
Downgrade to underperform at RM3 with revised fair value RM3.02 (from RM3.14): We believe Ann Joo's FY10 ended December results (due out on Feb 24) are likely to come in below our as well as the market's expectations due to lower than expected sales volume, particularly in the export segment. This is despite some slight improvement in average selling prices and margins. Export sales to Vietnam, its main export market, will have declined significantly owing to the surging inflation and currency devaluation in the nation.

We understand that there will be a further delay in the commissioning of Ann Joo's mini blast furnace project to end-April, from early January previously. However, the impact to our FY11 forecast is negligible as we have assumed minimum contribution from the project in 1H11.

While there have been encouraging signs of late in the form of rising steel prices globally since early 2011, we view these increases as cost push in nature and not demand push. Having said that, Ann Joo is still expected to achieve better margins compared with its peers in 1H11, as it with foresight stocked up scrap (that will last until end-February) when scrap prices were below US$400 (RM1,220)/tonne in 2H2010 (against US$490-500/tonne currently).

We cut our FY10 net profit forecast by 12.2% to RM137.9 million, largely to reflect the lower sales volume. We also cut our FY11/12 net profit forecasts by 3.8% and 1.3% respectively, after adjusting for:

(i) '' ''higher raw material costs that more than offset higher average selling prices; and
(ii) '' ''lower effective operating days for its mini blast furnace project (from 350 days to 230 days) in FY11.

The risks include:
(i) '' ''oversupply in China that results in dumping by Chinese steel producers in the international market;
(ii) '' ''a steep contraction in global steel consumption that will weigh down international steel prices; and
(iii) disruption in supplies of raw materials.

We believe volume and top line growth of steel producers are not likely to translate to significantly improved profitability, as margins will continue to come under pressure due to rising feedstock prices (iron ore, coking coal and scrap). Indicative fair value is reduced to RM3.02 (from RM3.14) based on 10 times revised FY11 fully-diluted earnings per share of 30.2 sen, in line with our one-year forward target PER for the steel sector. Downgrade to 'underperform'. ' RHB Research, Feb 22


This article appeared in The Edge Financial Daily, February 23, 2011.

KOSSAN - Kossan better than peers at riding out storm

Stock Name: KOSSAN
Company Name: KOSSAN RUBBER INDUSTRIES BHD
Research House: MAYBANK

Kossan Rubber Industries Bhd
(Feb 22, RM3.18)
Maintain buy at RM3.29 with target price RM3.60: Kossan's 4Q earnings are likely to have been stable quarter-on-quarter (+17% year-on-year) on sustained earnings before interest and tax (Ebit) margins. Such a performance would be highly commendable in our view, considering the fact that high latex prices have negatively impacted the margins and earnings of its latex peers in the recent quarter. Latex gloves presently account for 60% of Kossan's glove production with nitrile accounting for the remaining 40%. Kossan's share price has unjustifiably underperformed the bigger latex peers by 5% year-to-date and valuations are undemanding. We maintain our 'buy' call and discounted cash flow-derived target price of RM3.60.

The 4Q10 results are set to be released on Feb 23. We expect net profit to come in at RM28 million (flattish q-o-q, +17% y-o-y), slightly below our expectations but in line with consensus. We estimate sales volume in the quarter to have dipped 4% q-o-q to 2.2 billion pieces, due to the conversion of lines to nitrile production during the period ' production yield per line for nitrile is 20% lower than latex. Bottom line, nevertheless, has effectively been protected by higher margins for these gloves.

While most local glovemakers are rushing into producing more medical nitrile gloves, Kossan plans to produce more speciality nitrile gloves where the barriers to entry are higher. The 16 lines (1.6 billion pieces or +10% to previous total capacity), which have been up and running since January 2011, are dedicated to this speciality glove segment. This diversification would provide some buffer to volatile latex prices over the longer term. We expect nitrile to account for 50% of Kossan's product mix in 2011.

We maintain our forecasts, expecting 10% earnings per share growth in 2011 and 8% in 2012, underpinned by its speciality glove production and the completion of its eight new nitrile lines in 2Q12 (converting from six latex powdered glove lines). At our DCF-derived target price of RM3.60, Kossan would trade at eight times 2012 PER, against Top Glove's 14 times and Hartalega's 10 times. ' Maybank IB Research, Feb 22


This article appeared in The Edge Financial Daily, February 23, 2011.

KFC - Strong consumer spending favours KFCH

Stock Name: KFC
Company Name: KFC HOLDINGS (M) BHD
Research House: BIMB

KFC Holdings (M) Bhd
(Feb 22, RM3.80)
Maintain neutral at RM3.85 with target price RM4.30: KFCH revenue and net profit for the quarter rose by 9.6% and 37.6% year-on-year (y-o-y) to RM683.9 million and RM38.9 respectively, million thanks to:

(i)'' ''aggressive expansion of its restaurants;
(ii)'' ''strong marketing of products; and
(iii)'' ''improvement in sales throughout Malaysia and overseas.

On a sequential basis, KFCH's revenue and net profit increased by 8.3% and 24.2% quarter-on-quarter (q-o-q) respectively, thanks to an improvement in consumer spending driven by encouraging economic growth. GDP in 4Q10 grew by 4.8%.

Underpinned by strong consumer spending with aggressive restaurant expansion, KFCH's full-year revenue and net profit jumped by a sterling 10% and 20%. There is no adjustment on earnings estimates as the results were in line with our expectations.

We are bullish on KFCH's future outlook as consumer sentiment remains stable, supported by strong economic performance as Malaysia's 2011 GDP is poised to linger between 5% to 6% this year with our in-house projection of 5.7%

Moving forward, we foresee that KFCH's 1QFY11 performance will continue to be favourable, driven by strong consumer spending thanks to tame inflation and higher disposable income.

KFCH's FY11 net profit is forecast to grow by 15%, mainly driven by:

(i)'' ''strong expansion of KFC restaurants;
(ii)'' ''better economic outlook; and
(iii)'' ''the seasonal factor such as school holidays and Chinese New Year, Hari Raya, Deepavali and Christmas which are expected to boost consumer spending.

We maintain our 'neutral' call on KFCH with an unchanged target price of RM4.30. The target price is derived by pegging FY11 earnings per share of 21.7 sen to target PER of 20 times. Total return is at 13.7%, including 2% prospective dividend yield. ' BIMB Securities Research, Feb 22


This article appeared in The Edge Financial Daily, February 23, 2011.

THPLANT - TH Plantations a value buy

Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Research House: MIDF

TH Plantations Bhd
(Feb 22, RM1.97)
Maintain buy at RM1.90 with unchanged target price RM3.25: THP's earnings of RM89.5 million in FY10 were ahead of our expectations by 2.5%. Net profit'' in 4QFY10 surged 98% quarter-on-quarter and'' 89% year-on-year to RM42.6 million'' despite lower crude palm oil (CPO)output, which was more than made up for by higher CPO prices. ''

THP's full-year fresh fruit bunch (FFB) production of 463,949 tonnes was 4% lower than our projection due to heavy rainfall,'' especially in Peninsular Malaysia. FFB and CPO output in FY10 dropped 11% and 8% respectively. ''

Net profit margin increased significantly'' by 6.78 percentage points'' from 17.7% in FY09 to 24.5% in FY10. The higher margin'' was due to the higher CPO price realised and a drop in cost of sales by 1.2% y-o-y to RM200.6 million. ''

We remain positive on the future growth of THP on the back of: (i) the targeted replanting policy of 1,500ha annually; (ii)'' increase in mature hectarage; (iii) additional mill in Saribas that will increase CPO production; and (iv) future expansion to Indonesia. ''

TH Plantations is a value buy in our opinion, with the share price having retraced 14% from its'' recent high of RM2.22 (Jan 12). THP has strong growth potential given the expansion plan in Indonesia. Hence, we maintain our 'buy' recommendation at an unchanged target price of RM3.25. This is derived from a FY11 PER of 14.6 times, one standard deviation above its'' 5-year historical PER of 11.2 times. However, given the more sedate market sentiment towards plantation stocks, we are'' likely to adjust the basis of our valuation in due course. There is therefore a downward bias to our target price. ' MIDF Research, Feb 22


This article appeared in The Edge Financial Daily, February 23, 2011.

GAB - Tenth consecutive year of growth for GAB?

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD
Research House: MAYBANK

Guinness Anchor Bhd
(Feb 21, RM9.50)
Upgrade to Buy at RM9.35 with target price RM10.60: Post analyst briefing for 1HFY11 results, we have tweaked our FY11/13 net profit forecasts, but compound annual growth rate (CAGR) remains little changed at 11%. GAB continues to grow market share while domestic economic conditions remain conducive for industry demand growth. The recent correction in its share price provides an opportunity to accumulate. We retain our RM10.60 discounted cash flow-based target price, and investors could also expect decent gross dividend yields of 5% to 5.5%.

GAB's market share in Malaysia continued to grow, reaching 59% in 1HFY11 (FY10: 57%). We believe GAB will at least sustain its market share. We expect the domestic malt liquor market to grow 4% this year to surpass its peak of 1,513 hectoliters in 1998, based on our estimated GDP growth of 5.5% for 2011. GAB's management expect the malt liquor market to grow 4%-5% this year, mirroring the movement of GDP growth.

GAB went from organising four parties in 2006 to 700 in 2010. Despite millions of ringgit spent on brand building over the years, we positively view the earnings before interest and tax compound annual growth rate of 9.8% from FY06 to FY10 compared with its distribution, selling and marketing expenses CAGR of -10.4% over the same period. Advertising and promotion remains vital for GAB; we expect the company to retain its spending of RM146 million in FY10.

Details on the costs write-back of RM15 million, we estimate, based on normalised margins, which contributed to the strong 2QFY11 performance (net profit +48% year-on-year, +67% quarter-on-quarter) were not disclosed but would be one-off, according to management. The actual amount of cost write-back was also not disclosed. ' Maybank IB Research, Feb 21


This article appeared in The Edge Financial Daily, February 22, 2011.

PARKSON - Parkson proxy to regional growth

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD
Research House: HWANGDBS

Parkson Holdings Bhd
(Feb 21, RM5.56)
Maintain buy at RM5.56 with revised target price RM6.90 (from RM6.60): We raised Parkson Holding Bhd's (PHB) target price (TP) to RM6.90 (from RM6.60) after imputing DBS Vickers' recent target price upgrade to HK$15.47 (from HK$14.71) for its Hong Kong-listed subsidiary, Parkson Retail Group (PRG). This implies 24% upside potential. We still like PHB for its attractive valuation (trading at 15.4 times CY11 PER against peers' 22 times) and strategic presence in the emerging markets of Malaysia, China, and Vietnam (and soon in Cambodia), as domestic consumption continues to rise in these growing economies.

Year-to-date same-store sales (SSS) growth is ahead of our full-year assumptions of 10% for China (75% of group revenue), 5% to 6% for Malaysia, and 20% for Vietnam. If the positive trend persists, we may upgrade our forecasts. A 1% increase in our SSS growth assumption would lift FY12F net profit by 1.4%.

Additional earnings kickers will be new store openings ' PHB has lined up seven stores (five in China, one each in Malaysia and Vietnam) in 2011, on top of two stores opened in January (Zigong-China and Paragon-HCMC). These could raise group retail space by 7.5% (from 1.6 million sq m now).

International investors seeking potential currency returns may see the advantage in investing in PHB (versus PRG), as DBS expects the ringgit to strengthen 13% against the Hong Kong dollar in CY11 and 5% in CY12.

Meanwhile, downside risk for PHB is also cushioned by a smaller foreign shareholding (24.8% at end-December) agaisnt PRG's circa 44% to 45%, in the event of a further reversal of foreign funds from Asia to developed markets. ' HwangDBS Vickers Research, Feb 21


This article appeared in The Edge Financial Daily, February 22, 2011.

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CIMB - CIMB's 4Q results may beat estimates

Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD
Research House: RHB

CIMB Group Holdings Bhd
(Feb 21, RM8.27)
Maintain outperform at RM8.38 with fair value RM9.80: CIMB is expected to release its 4QFY10 results later this week (tentatively tomorrow). Our full-year net profit forecast of RM3.55 billion implies that 4QFY10 net profit would be flattish quarter-on-quarter (q-o-q) and up by 12.5% year-on-year (y-o-y).

However, judging from CIMB Niaga's recent 4QFY10 results, net profit rose 13.1% q-o-q and 81.2% y-o-y (in rupiah terms), and taking into account that 4QFY10 was a strong quarter for the group in terms of initial public offerings (IPOs), we think there is a good chance the full-year results could beat our estimates.

We think an area that could surprise on the upside is non-interest income. CIMB was involved in both the largest domestic IPO as well as the largest IPO in Hong Kong in 4QFY10, and these could help provide a nice lift to non-interest income. Another area that we think could also surprise is in terms of loan impairment allowances. Credit cost has been rather benign thus far (36 basis points, annualised against our assumption of 43 bps) and could continue to remain lower than expected.

Last December, Bank Negara Malaysia updated the guidelines for the classification of rescheduled/restructured facilities, which effectively lengthens the period required before such loans can be reclassified as non-impaired. This could impact ratios such as impaired loans and loan loss coverage, but is unlikely to impact loan impairment allowances, we believe. We note a jump in impaired loans that were reclassified as not impaired in 3QFY10 (RM1.7 billion against 2QFY10: RM700 million). This may have been partly due to such restructured facilities, which could now be caught under the updated guidelines and thus, asset quality ratios may not improve as significantly as in 3QFY10.

We expect CIMB to declare a single-tier interim dividend per share of 4.6 sen (4QFY09: single-tier DPS of 9.25 sen, adjusted for one-for-one bonus issue). Together with the earlier declared interim and special dividends, full-year net DPS would amount to 22.7 sen (FY09: 9.25 sen, net) and this would translate to a net payout ratio of about 47%.

We look forward to the unveiling of management's 2011 targets (return on equity, for example) and dividend policy, both of which we expect to be a step up from current levels. We currently project 2011 ROE of 16.8%, but note that a 17% target could easily be achieved if, say, the dividend payout ratio is raised to 40% (against 19% projected for 2010, ex-specials). Apart from that, management had previously mentioned a target of low-teens loan growth this year while net interest margins are expected to be slightly lower (stable, at best) with pressure likely coming from Indonesia.

We make no change to our earnings forecasts for now. We reiterate our 'outperform' call. Fair value of RM9.80 is based on 17 times CY11 earnings per share. ' RHB Research, Feb 21


This article appeared in The Edge Financial Daily, February 22, 2011.

GAB - Buy Guinness Anchor: UOB Kay Hian

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD
Research House: UOB

Guinness Anchor Bhd., Malaysia’s biggest brewer by market value, was raised to “buy” from “hold” at UOB Kay Hian Holdings Ltd to reflect its sales and market-share prospects.

The share-price estimate was increased to RM10.30 from RM9.20, Vincent Khoo, an analyst at UOB Kay Hian, wrote in a report today. - Bloomberg

AMMB - AMMB cut to 'hold' at Maybank Invt

Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD
Research House: MAYBANK

AMMB Holdings Bhd, Malaysia’s fourth-biggest bank by market value, was cut to “hold” from “buy” at Maybank Investment Bank Bhd as the stock is unlikely to outperform its peers as interest rates rise.

The share price estimate was reduced to RM6.80 from RM7.10, Wong Chew Hann, a Kuala Lumpur-based analyst at Maybank, said in a report today. -- Bloomberg

ALAM - OSK maintains buy call on Alam Maritim

Stock Name: ALAM
Company Name: ALAM MARITIM RESOURCES BHD
Research House: OSK

Alam Maritim Resources Bhd's fourth quarter 2010 results, expected to be announced this week, are likely to be within or below expectations but OSK Research has maintained a "buy" recommendation on the stock with a RM1.50 target price.

The research house said there had been no change in the company's operating enviroment in the fourth quarter 2010 but there might be a provision for doubtful debts arising from Vastalux amounting to RM30 million.

If the management made a provision for the sum owing to it, the company's fourth quarter 2010 results were likely to fall into the red, it said in a equity research report today.

"Although investors may be uncomfortable with the negative news flow on Vastalux, we believe that this unfortunate event would probably have been built into its current share price, and that investors should turn to the company's longer term outlook instead," it said.

For the 2011 financial year, it said, the company had the right asset mix which would put it in a good position to ride on the current oil and gas (O&G) focus on existing and marginal oil field developments.

"Given that Petronas has been aggressively awarding new O&G contracts, especially those relating to existing and marginal oil field developments, we believe Alam Maritim stands a good chance of securing some of these jobs since its fleet utilisation is at about 70 percent which indicates that there is still room to grow its earnings," OSK Research said.
-- BERNAMA

UNISEM - Unisem slips ahead of 4Q financial results, expectations of decline in earnings growth

Stock Name: UNISEM
Company Name: UNISEM (M) BHD
Research House: OSK

KUALA LUMPUR: Shares of Unisem slipped in early trade on Monday, Feb 21 ahead of its financial results (4Q2010) due on Thursday, Feb 24 on expectations its earnings growth likely to be on a declining trend.

At 9.15am, Unisem was down seven sen to RM2.10 with 17,000 shares done.

The FBM KLCI was up 5.14 points to 1,522.70. Turnover was 148.66 million shares valued at RM89 million. There were 204 gainers, 99 losers and 141 stocks unchanged.

Last Friday, Feb 18 OSK Research said it expected Unisem's 4QFY10 results to mirror the performance of MPI, with earnings growth likely to be on a declining trend.

The research house said that during the company's previous analyst briefing on its 3QFY10 results, Unisem's management had guided for a 10% on-quarter drop in 4QFY10 revenue, mainly due to inventory adjustments.

'We maintain our Take Profit call on potential earnings disappointments for 4QFY10 and 1QFY11, and the foreseeable far slower earnings for FY11 as sentiment dampeners,' it said.

AMMB - RHB Research upgrades AMMB to Outperform, ups fair value to RM7.42

Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD
Research House: RHB

KUALA LUMPUR: RHB Research Institute has raised the fair value for AMMB HOLDINGS BHD [] to RM7.42 (target CY11 PER of 15x) from RM7.26.

'Given the steep underperformance in share price YTD, valuations have become attractive again. Upgrade to Outperform from market perform,' it said on Monday, Feb 21.

RHB Research said AMMB reported 3QFY03/11 net profit of RM325.3 million (+21.2% on-year; -2.3% on-quarter), in line with its and consensus expectations.

Quarter-on-quarter drop in net profit was mainly due to higher loan impairment allowances, +30.5% on-quarter on lower recoveries.

AXIATA - RHB Research maintains Axiata FV at RM5.75, downgrades to Market Perform after steep price rise

Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD
Research House: RHB

KUALA LUMPUR: RHB Research Institute is maintaining a sum-of-parts fair value of RM5.75 for Axiata.

'Given the recent steep rise in the share price, we downgrade Axiata from Outperform to Market Perform,' it said on Monday, Feb 21.

RHB Research believes Axiata's 4Q10 core net profit (due on Wednesday, Feb 23) should come in within expectations.

'We expect 4Q10 revenue growth to be high single digit on-year driven largely by: (1) strong revenue growth at XL and Dialog (+16% and +12% on-year respectively); and (2) steady high single digit revenue growth at Celcom, underpinned by larger mobile and broadband subscriber base,' it said.