Stock Name: YTLPOWR
Company Name: YTL POWER INTERNATIONAL BHD
Company Name: YTL POWER INTERNATIONAL BHD
| Research House: ECMLIBRA | Price Call: HOLD | Target Price: 1.70 |
November 18, 2011
CIMB Research ups Bumi Armada target price to RM4.61
Stock Name: ARMADA
Company Name: BUMI ARMADA BERHAD
KUALA LUMPUR (Nov 18): CIMB Equities Research is maintaining a Buy on Bumi Armada and raised its target price from RM4.55 to RM4.61.
It said on Friday the higher target price was after it applied a 40% premium to its 12.6 times CY13 target market price-to-earnings (previously 20% premium over 14.5 times CY12 P/E) to reflect Bumi's increasingly attractive investment proposition. This big cap has also joined the MSCI Malaysia Index.
CIMB Research said after a soft 1H, Bumi Armada is set to impress with a strong 2H performance, thanks to two FPSO contracts awarded by Apache and ONGC.
'Four more FPSO contracts are likely to be secured in FY12-13. A potential marginal field job in FY12 makes the outlook even more exciting,' it said.
Company Name: BUMI ARMADA BERHAD
| Research House: CIMB | Price Call: BUY | Target Price: 4.55 |
KUALA LUMPUR (Nov 18): CIMB Equities Research is maintaining a Buy on Bumi Armada and raised its target price from RM4.55 to RM4.61.
It said on Friday the higher target price was after it applied a 40% premium to its 12.6 times CY13 target market price-to-earnings (previously 20% premium over 14.5 times CY12 P/E) to reflect Bumi's increasingly attractive investment proposition. This big cap has also joined the MSCI Malaysia Index.
CIMB Research said after a soft 1H, Bumi Armada is set to impress with a strong 2H performance, thanks to two FPSO contracts awarded by Apache and ONGC.
'Four more FPSO contracts are likely to be secured in FY12-13. A potential marginal field job in FY12 makes the outlook even more exciting,' it said.
TSH Resources advances on solid 3Q earnings
Stock Name: TSH
Company Name: TSH RESOURCES BHD
KUALA LUMPUR (Nov 18): TSH RESOURCES BHD [] shares rose on Friday, Nov 18 after the company's third quarter net profit surged 89% to RM34.47 million from RM18.24 million a year ago, underpinned the performance of its palm and bio-integration segment.
At 9.10am, TSH rose 11 sen to RM3.71 with 98,900 shares done.
Its revenue for the quarter rose 27.5% to RM273.15 million from RM214.26 million in 2010. Earnings per share rose to 8.41 sen from 4.45 sen in 2010, while net assets per share was RM2.06.
For the nine months ended Sept 30, TSH's net profit jumped 131% to RM94.39 million from RM40.83 million in 2010 while revenue increased by 29.2% to RM855.69 million from RM662.22 million in 2010.
MIDF Research maintained its Buy rating on the stock and raised its target price by 27% to RM4.50 (from RM3.54 previously) and said the company's 9MFY11 earnings exceeded expectations, accounting for more than 80% of the full year forecasts.
'Owing to higher-than expected earnings in 3QFY11, we have revised upwards our FY11 and FY12 earnings forecast by 10.3% and 26.6% respectively on the back of better margin expectations as more tress coming into maturity.
'In-line with the upward earnings revision, we are revising our target price by 27% to RM4.50. The target price is based on a multiple of 11.6xEPS12, which is one standard deviation below its 5-year historical PER of 14times. We view TSH as currently undervalued as it is trading at only 9.3 times forward PER, which is at the lower bound of its five year average PER band of 7.3 times ' 14.9 times,' it said in a note Nov 18.
''
Company Name: TSH RESOURCES BHD
| Research House: MIDF | Price Call: BUY | Target Price: 4.50 |
KUALA LUMPUR (Nov 18): TSH RESOURCES BHD [] shares rose on Friday, Nov 18 after the company's third quarter net profit surged 89% to RM34.47 million from RM18.24 million a year ago, underpinned the performance of its palm and bio-integration segment.
At 9.10am, TSH rose 11 sen to RM3.71 with 98,900 shares done.
Its revenue for the quarter rose 27.5% to RM273.15 million from RM214.26 million in 2010. Earnings per share rose to 8.41 sen from 4.45 sen in 2010, while net assets per share was RM2.06.
For the nine months ended Sept 30, TSH's net profit jumped 131% to RM94.39 million from RM40.83 million in 2010 while revenue increased by 29.2% to RM855.69 million from RM662.22 million in 2010.
MIDF Research maintained its Buy rating on the stock and raised its target price by 27% to RM4.50 (from RM3.54 previously) and said the company's 9MFY11 earnings exceeded expectations, accounting for more than 80% of the full year forecasts.
'Owing to higher-than expected earnings in 3QFY11, we have revised upwards our FY11 and FY12 earnings forecast by 10.3% and 26.6% respectively on the back of better margin expectations as more tress coming into maturity.
'In-line with the upward earnings revision, we are revising our target price by 27% to RM4.50. The target price is based on a multiple of 11.6xEPS12, which is one standard deviation below its 5-year historical PER of 14times. We view TSH as currently undervalued as it is trading at only 9.3 times forward PER, which is at the lower bound of its five year average PER band of 7.3 times ' 14.9 times,' it said in a note Nov 18.
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AmResearch maintains Buy on MMHE unch FV7.40
Stock Name: MHB
Company Name: MALAYSIA MARINE AND HEAVY ENG
KUALA LUMPUR (Nov 18): AmResearch reiterates its Buy recommendation on Malaysia Marine & Heavy Engineering Holdings (MMHE) with an unchanged fair value of RM7.40 a share.
It said on Friday, the FV of RM7.40 was based on an FY12F PE of 22 times, which is at parity to Kencana Petroleum's peak of 22 times in 2007.
'We maintain MMHE's 9MFY11F net profit of RM236 million as 3QCY11 net profit of RM80 million is in line with our forecast.
'On an annualised basis, the 6MFY Dec 2011 net profit of RM159 million is 1% above our forecast,' it said.
AmResearch estimates that the group's order book rose to RM3.6 billion (from RM2.9 billion in the previous quarter) largely due to'' the recently awarded Tapis contract from ExxonMobil to build and install an integrated offshore platform deck called Tapis R and two inter-platform decks coupled with a RM236 million Telok fabrication job.
AmResearch said it understands that the Tapis contract value of RM1.5bil is 7% higher than the earlier announcement.
The research house remains sanguine about MMHE's re-rating prospects. The stock currently trades at an FY12F PE of 18 times, which is below the 22 times for Dialog Group and Bumi Armada.
Company Name: MALAYSIA MARINE AND HEAVY ENG
| Research House: AMMB | Price Call: BUY | Target Price: 7.40 |
KUALA LUMPUR (Nov 18): AmResearch reiterates its Buy recommendation on Malaysia Marine & Heavy Engineering Holdings (MMHE) with an unchanged fair value of RM7.40 a share.
It said on Friday, the FV of RM7.40 was based on an FY12F PE of 22 times, which is at parity to Kencana Petroleum's peak of 22 times in 2007.
'We maintain MMHE's 9MFY11F net profit of RM236 million as 3QCY11 net profit of RM80 million is in line with our forecast.
'On an annualised basis, the 6MFY Dec 2011 net profit of RM159 million is 1% above our forecast,' it said.
AmResearch estimates that the group's order book rose to RM3.6 billion (from RM2.9 billion in the previous quarter) largely due to'' the recently awarded Tapis contract from ExxonMobil to build and install an integrated offshore platform deck called Tapis R and two inter-platform decks coupled with a RM236 million Telok fabrication job.
AmResearch said it understands that the Tapis contract value of RM1.5bil is 7% higher than the earlier announcement.
The research house remains sanguine about MMHE's re-rating prospects. The stock currently trades at an FY12F PE of 18 times, which is below the 22 times for Dialog Group and Bumi Armada.
Malaysian Airline System RM1.41: Hold
Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
3Q11: More losses?
High fuel coupled with soft yields. MAS will release its 3Q11 resultsin late Nov. We expect 3Q11 to be loss-making due to the impact of45% higher fuel price YoY and the globally soft yield environment. Thechallenging global economy is undermining business activity, businessconfidence and the sentiment to travel. Against this backdrop, we havelowered our earnings forecasts and downgrade MAS to a Hold (fromBuy) with a new target price of RM1.55 (from RM2.70)
Maybank research (18 November 2011)
Click here for full report ''
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
| Research House: MAYBANK | Price Call: HOLD | Target Price: 1.41 |
3Q11: More losses?
High fuel coupled with soft yields. MAS will release its 3Q11 resultsin late Nov. We expect 3Q11 to be loss-making due to the impact of45% higher fuel price YoY and the globally soft yield environment. Thechallenging global economy is undermining business activity, businessconfidence and the sentiment to travel. Against this backdrop, we havelowered our earnings forecasts and downgrade MAS to a Hold (fromBuy) with a new target price of RM1.55 (from RM2.70)
Maybank research (18 November 2011)
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CB Industrial Product RM3.96: Hold
Stock Name: CBIP
Company Name: CB INDUSTRIAL PRODUCT HOLDING
Eyes unto the Cash Shariah-compliant
Within expectation. CBIP's 3Q11 core net profit RM27m (+37.5%YoY; 14% QoQ) brings 9M11 net profit to RM73m (+63% YoY), withinour expectation but ahead of consensus. Earnings growth post disposalof two of its estates (target for completion in Dec 2011) appears to belackluster, in our view. Maintain Hold with an unchanged TP of RM3.54based on 7x 2013 PER pending greater clarity on the utilization of itscash proceeds of RM268m; its potential next key catalyst.
Maybank research (18 November 2011)
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Company Name: CB INDUSTRIAL PRODUCT HOLDING
| Research House: MAYBANK | Price Call: HOLD | Target Price: 3.96 |
Eyes unto the Cash Shariah-compliant
Within expectation. CBIP's 3Q11 core net profit RM27m (+37.5%YoY; 14% QoQ) brings 9M11 net profit to RM73m (+63% YoY), withinour expectation but ahead of consensus. Earnings growth post disposalof two of its estates (target for completion in Dec 2011) appears to belackluster, in our view. Maintain Hold with an unchanged TP of RM3.54based on 7x 2013 PER pending greater clarity on the utilization of itscash proceeds of RM268m; its potential next key catalyst.
Maybank research (18 November 2011)
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TSH Resources RM3.60: Buy
Stock Name: TSH
Company Name: TSH RESOURCES BHD
Booms on fertile land Shariah-compliant
Beats expectation. TSH's 9M11 net profit of RM94.4m (+131% YoY)accounts for 87% and 84% of our and consensus full year forecasts.The stellar performance was due to its fertile Indonesian estates withhigher than expected FFB yields. Thus, we bump up our FFB forecastby assigning higher yields to its Indonesian estates and raise our 2011-13 net profit forecast by 11%-22%. Reiterate Buy with a higher TP ofRM4.38 (+18%, from RM3.70) based on unchanged 15x 2013 PER.
Maybank research (18 November 2011)
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Company Name: TSH RESOURCES BHD
| Research House: MAYBANK | Price Call: BUY | Target Price: 3.60 |
Booms on fertile land Shariah-compliant
Beats expectation. TSH's 9M11 net profit of RM94.4m (+131% YoY)accounts for 87% and 84% of our and consensus full year forecasts.The stellar performance was due to its fertile Indonesian estates withhigher than expected FFB yields. Thus, we bump up our FFB forecastby assigning higher yields to its Indonesian estates and raise our 2011-13 net profit forecast by 11%-22%. Reiterate Buy with a higher TP ofRM4.38 (+18%, from RM3.70) based on unchanged 15x 2013 PER.
Maybank research (18 November 2011)
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Kossan Rubber Industries RM3.07: Buy
Stock Name: KOSSAN
Company Name: KOSSAN RUBBER INDUSTRIES BHD
Staging an earnings recovery Shariah-compliant
Marked QoQ improvement. 9M11 net profit of RM68m (-24% YoY)was below expectations, at 67-68% of our and consensus full-yearestimates. Our 2011-13 EPS forecasts is cut by 8-12% on lower salesassumption. Nevertheless, 3Q11 earnings has outperformed the latexfocusedpeers with its net profit rising by 13% QoQ. We think the recentsharp drop in latex cost (-18% MoM) is a fresh catalyst to the stock and2013 PER valuation of 8.4x is undemanding. Maintain Buy, with amarginally lower DCF-derived TP of RM3.50 (from RM3.60).
Maybank research (18 November 2011)
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Company Name: KOSSAN RUBBER INDUSTRIES BHD
| Research House: MAYBANK | Price Call: BUY | Target Price: 3.07 |
Staging an earnings recovery Shariah-compliant
Marked QoQ improvement. 9M11 net profit of RM68m (-24% YoY)was below expectations, at 67-68% of our and consensus full-yearestimates. Our 2011-13 EPS forecasts is cut by 8-12% on lower salesassumption. Nevertheless, 3Q11 earnings has outperformed the latexfocusedpeers with its net profit rising by 13% QoQ. We think the recentsharp drop in latex cost (-18% MoM) is a fresh catalyst to the stock and2013 PER valuation of 8.4x is undemanding. Maintain Buy, with amarginally lower DCF-derived TP of RM3.50 (from RM3.60).
Maybank research (18 November 2011)
Click here for full report ''
WCT RM2.38: Buy
Stock Name: WCT
Company Name: WCT BHD
Shortfall again
Buy call maintained, but with a lower target price. 9M11 net profit ofRM114.5m (+15% YoY) made up just 68% of our earlier full-yearforecast and 70% of consensus. Construction works recognition wasslower than expected and 3Q results included another RM3m of forexloss lifting total forex loss to RM16m for 9M11. We lower our 2011 netprofit forecast by 8% and 2012-13 forecasts by 12-15%. This puts ourTP, which is largely earnings based, at a lower RM2.75 (-11%).
Maybank research (18 November 2011)
Click here for full report ''
Company Name: WCT BHD
| Research House: MAYBANK | Price Call: BUY | Target Price: 2.38 |
Shortfall again
Buy call maintained, but with a lower target price. 9M11 net profit ofRM114.5m (+15% YoY) made up just 68% of our earlier full-yearforecast and 70% of consensus. Construction works recognition wasslower than expected and 3Q results included another RM3m of forexloss lifting total forex loss to RM16m for 9M11. We lower our 2011 netprofit forecast by 8% and 2012-13 forecasts by 12-15%. This puts ourTP, which is largely earnings based, at a lower RM2.75 (-11%).
Maybank research (18 November 2011)
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Tan Chong Motor RM4.43: Sell
Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD
Results disappointed, challenges ahead Shariah-compliant
Sequentially stronger but overall still below expectation. 9M11earnings were below ours and consensus forecasts. We expect aweaker 4Q as the disruption to production output in Thailand kicks in.Accounting for global macroeconomic headwinds and strengthening ofthe USD, we broadly cut 2011 net profit forecast by 15%. Our 2012-13forecasts are under review pending an update with management.Maintain Sell with an unchanged target price at RM4.00 (8x 2012 EPS).
Maybank research (18 November 2011)
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Company Name: TAN CHONG MOTOR HOLDINGS BHD
| Research House: MAYBANK | Price Call: SELL | Target Price: 4.43 |
Results disappointed, challenges ahead Shariah-compliant
Sequentially stronger but overall still below expectation. 9M11earnings were below ours and consensus forecasts. We expect aweaker 4Q as the disruption to production output in Thailand kicks in.Accounting for global macroeconomic headwinds and strengthening ofthe USD, we broadly cut 2011 net profit forecast by 15%. Our 2012-13forecasts are under review pending an update with management.Maintain Sell with an unchanged target price at RM4.00 (8x 2012 EPS).
Maybank research (18 November 2011)
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Malaysia Marine and Heavy Engineering Holdings RM6.00: Buy
Stock Name: MHB
Company Name: MALAYSIA MARINE AND HEAVY ENG
On track Shariah-compliant
No surprises. 1HFY11 results broadly tracked expectation. Wecontinue to see MMHE as a direct proxy to PETRONAS' majordomestic capex programme. Orderbook momentum is poised to bestrong over the next 3 years as the high-impact deepwater, floatingsolutions and RAPID projects come into play. Maintain Buy with aRM8.00 target price, based on 20x 2013 EPS.
Maybank research (18 November 2011)
Click here for full report ''
Company Name: MALAYSIA MARINE AND HEAVY ENG
| Research House: MAYBANK | Price Call: BUY | Target Price: 6.00 |
On track Shariah-compliant
No surprises. 1HFY11 results broadly tracked expectation. Wecontinue to see MMHE as a direct proxy to PETRONAS' majordomestic capex programme. Orderbook momentum is poised to bestrong over the next 3 years as the high-impact deepwater, floatingsolutions and RAPID projects come into play. Maintain Buy with aRM8.00 target price, based on 20x 2013 EPS.
Maybank research (18 November 2011)
Click here for full report ''
YTL Power International RM1.80: Buy
Stock Name: YTLPOWR
Company Name: YTL POWER INTERNATIONAL BHD
Look to M&As for the next catalyst
Conserving cash for M&As? YTL Power International's (YTLP)1QFY12 results were within expectations. While we had hoped that1QFY12 DPS would revert to 3.75 sen tax exempt, it remainedsubdued at 1.875 sen tax exempt. That said, 1.875 sen tax exempt stilloffers a decent 4.2% net dividend yield on an annualized basis that willhelp limit downside risk. Maintain Buy and DCF based TP of RM2.02.We understand that YTLP may embark on a major M&A soon.
Maybank research (18 November 2011)
Click here for full report ''
Company Name: YTL POWER INTERNATIONAL BHD
| Research House: MAYBANK | Price Call: BUY | Target Price: 1.80 |
Look to M&As for the next catalyst
Conserving cash for M&As? YTL Power International's (YTLP)1QFY12 results were within expectations. While we had hoped that1QFY12 DPS would revert to 3.75 sen tax exempt, it remainedsubdued at 1.875 sen tax exempt. That said, 1.875 sen tax exempt stilloffers a decent 4.2% net dividend yield on an annualized basis that willhelp limit downside risk. Maintain Buy and DCF based TP of RM2.02.We understand that YTLP may embark on a major M&A soon.
Maybank research (18 November 2011)
Click here for full report ''
Maxis expects a stable line
Stock Name: MAXIS
Company Name: MAXIS BERHAD
Maxis Bhd
(Nov 16, RM5.34)
Maintain neutral at RM5.32 with target price of RM5.50: Maxis is expected to release its 3QFY11 results around Nov 30. We expect its 9MFY11 net profit to register circa 73% to 75% of our full-year estimate. This translates into a growth of between 2.4% and 5.2% y-o-y or RM1.7 billion to RM1.8 billion. We believe earnings growth will be supported by a rebound in overall revenue, higher non-voice revenue contribution and improvement in earnings before interest, tax, depreciation and amortisation (Ebitda).
We expect Maxis to register a 9MFY11 revenue of RM6.7 billion which translates into a rebound of 1.5% y-o-y from the 1.2% y-o-y decline in 1H11. We opine that the revenue rebound will be due to higher usage due to the festive season seen in 3QFY11.
From recent trends, we anticipate non-voice revenue will continue to increase its contribution to circa 44% of total revenue. In 9MFY10, non-voice revenue contribution to total revenue was 36.5% while it was 42.4% in 1H11. The growth in non-voice mobile revenue is expected to be due to advanced data service and wireless broadband. Wireless broadband subscribers are expected to increase by circa 5.0% quarter-on-quarter to register 656,000 subscribers.
We are expecting an Ebitda improvement of 3% y-o-y to RM3.3 billion in 9MFY11 on the back of lower direct expenses and lower operating expenses due to efficient cost control. This means Ebitda margin maintains at around the 50% level.
We like the fact that there was average revenue per user (ARPU) improvement across all of the segments in the last quarter, where postpaid, prepaid and wireless broadband ARPU improved by 2.9% q-o-q, 5.9% q-o-q and 3.3% q-o-q to RM108, RM36 and RM63 respectively. For 3QFY11, we are expecting ARPU to continue improving due possibly to higher minutes of use from the festivities.
With new entrants beginning to make a presence felt in an already saturated market, we expect Maxis will face challenges to maintain its position as market leader. Although it is expected to register a good performance in 3QFY11, this will be in line with the overall industry trend. Maxis has seen its market share among the top three (Maxis, Celcom Bhd and DiGi.Com Bhd) declining in recent quarters, excluding the market share of the others such as mobile virtual network operators. However, we believe that data revenue will increase in contribution, moderating any pressure.
With the 3QFY11 results pending, we are maintaining our FY11 forecast and our 'neutral' recommendation on Maxis. Judging by recent trends, we are not discounting another interim dividend of eight sen for 3QFY11, with total dividend for FY11 to yield 7.5%. Our target price of RM5.50 is based on dividend discount model, with a weighted average cost of capital of 8%. ' MIDF Research
This article appeared in The Edge Financial Daily, November 17, 2011.
Company Name: MAXIS BERHAD
| Research House: MIDF | Price Call: HOLD | Target Price: 5.50 |
Maxis Bhd
(Nov 16, RM5.34)
Maintain neutral at RM5.32 with target price of RM5.50: Maxis is expected to release its 3QFY11 results around Nov 30. We expect its 9MFY11 net profit to register circa 73% to 75% of our full-year estimate. This translates into a growth of between 2.4% and 5.2% y-o-y or RM1.7 billion to RM1.8 billion. We believe earnings growth will be supported by a rebound in overall revenue, higher non-voice revenue contribution and improvement in earnings before interest, tax, depreciation and amortisation (Ebitda).
We expect Maxis to register a 9MFY11 revenue of RM6.7 billion which translates into a rebound of 1.5% y-o-y from the 1.2% y-o-y decline in 1H11. We opine that the revenue rebound will be due to higher usage due to the festive season seen in 3QFY11.
From recent trends, we anticipate non-voice revenue will continue to increase its contribution to circa 44% of total revenue. In 9MFY10, non-voice revenue contribution to total revenue was 36.5% while it was 42.4% in 1H11. The growth in non-voice mobile revenue is expected to be due to advanced data service and wireless broadband. Wireless broadband subscribers are expected to increase by circa 5.0% quarter-on-quarter to register 656,000 subscribers.
We are expecting an Ebitda improvement of 3% y-o-y to RM3.3 billion in 9MFY11 on the back of lower direct expenses and lower operating expenses due to efficient cost control. This means Ebitda margin maintains at around the 50% level.
We like the fact that there was average revenue per user (ARPU) improvement across all of the segments in the last quarter, where postpaid, prepaid and wireless broadband ARPU improved by 2.9% q-o-q, 5.9% q-o-q and 3.3% q-o-q to RM108, RM36 and RM63 respectively. For 3QFY11, we are expecting ARPU to continue improving due possibly to higher minutes of use from the festivities.
With new entrants beginning to make a presence felt in an already saturated market, we expect Maxis will face challenges to maintain its position as market leader. Although it is expected to register a good performance in 3QFY11, this will be in line with the overall industry trend. Maxis has seen its market share among the top three (Maxis, Celcom Bhd and DiGi.Com Bhd) declining in recent quarters, excluding the market share of the others such as mobile virtual network operators. However, we believe that data revenue will increase in contribution, moderating any pressure.
With the 3QFY11 results pending, we are maintaining our FY11 forecast and our 'neutral' recommendation on Maxis. Judging by recent trends, we are not discounting another interim dividend of eight sen for 3QFY11, with total dividend for FY11 to yield 7.5%. Our target price of RM5.50 is based on dividend discount model, with a weighted average cost of capital of 8%. ' MIDF Research
This article appeared in The Edge Financial Daily, November 17, 2011.
1QFY12: Within expectation
Stock Name: YTLCMT
Company Name: YTL CEMENT BHD
Company Name: YTL CEMENT BHD
| Research House: ECMLIBRA | Price Call: HOLD | Target Price: 4.70 |
2QFY11: Largely disappointing
Stock Name: MHB
Company Name: MALAYSIA MARINE AND HEAVY ENG
Company Name: MALAYSIA MARINE AND HEAVY ENG
| Research House: ECMLIBRA | Price Call: HOLD | Target Price: 6.08 |
OSK Research maintains Buy on TSH Resources, ups FV to RM4.03
Stock Name: TSH
Company Name: TSH RESOURCES BHD
KUALA LUMPUR (Nov 18): OSK Research is maintaining its Buy recommendation on TSH RESOURCES BHD [] with a higher revised fair value of RM4.03.
It said TSH's nine-month earnings were slightly above its and consensus estimates as the softer palm oil price was offset by lower costs and a better oil extraction rate (OER).
OSK Research said the fresh fruit bunches (FFB) production growth continued to be stellar on-year on both the Sabah and Indonesia fronts. 'While we expect Sabah production growth to taper off going forward, Indonesia will remain the company's key growth driver in achieving double digit production growth,' it said.
On Thursday, TSH announced that for the nine months ended Sept 30, TSH's net profit jumped 131% to RM94.39 million from RM40.83 million in 2010 while revenue increased by 29.2% to RM855.69 million from RM662.22 million in 2010.
For the third quarter, its net profit surged 89% to RM34.47 million from RM18.24 million a year ago, underpinned the strong performance of its palm and bio-integration segment. Its revenue for the quarter rose 27.5% to RM273.15 million from RM214.26 million in 2010.
OSK Research said TSH's core earnings of RM87.3 million for 9MFY11, accounted for 79.3% and 77.2% of its and consensus' full-year forecasts respectively.
Revenue for the quarter itself surged 29.2% on-year but fell 17.2% sequentially amid weaker palm oil prices. Cost of sales, however, plunged by a substantial 21.6% on-quarter as third party FFB purchases dropped 16.9%, tipping the on-quarter core earnings growth into positive territory.
FFB production rose a marginal 1.2% on-quarter but soared 45.6% on-year, driven by the 60.8% growth experienced in Indonesia.
On a year-to-date basis, FFB production was 48.0% higher as Indonesia and Sabah production rose 71.8% and 18.1% respectively.
'We are tweaking up our FFB production to reflect a full year growth of 36.3% and revising upwards our OER assumption slightly to 21.2% from 21.0% previously.
'The marginal 0.6% on-quarter dip in CPO production despite a 11.5% drop in FFB processed indicates that OER improved on-quarter,' it said.
OSK Research said TSH's unplanted landbank was 66,700 ha.
The termination of the share sale agreement between TSH and Portvest in relation to the acquisition of Mildura Investment on Oct 19 removed some 12,000 ha from TSH's total landbank.
'However, the acquisition of two new Indonesian subsidiaries added another 21,300 to its landbank, bringing the company's total planted and unplanted areas to 23,800 ha and 66,700 ha respectively,' it said.
Company Name: TSH RESOURCES BHD
| Research House: OSK | Price Call: BUY | Target Price: 4.03 |
KUALA LUMPUR (Nov 18): OSK Research is maintaining its Buy recommendation on TSH RESOURCES BHD [] with a higher revised fair value of RM4.03.
It said TSH's nine-month earnings were slightly above its and consensus estimates as the softer palm oil price was offset by lower costs and a better oil extraction rate (OER).
OSK Research said the fresh fruit bunches (FFB) production growth continued to be stellar on-year on both the Sabah and Indonesia fronts. 'While we expect Sabah production growth to taper off going forward, Indonesia will remain the company's key growth driver in achieving double digit production growth,' it said.
On Thursday, TSH announced that for the nine months ended Sept 30, TSH's net profit jumped 131% to RM94.39 million from RM40.83 million in 2010 while revenue increased by 29.2% to RM855.69 million from RM662.22 million in 2010.
For the third quarter, its net profit surged 89% to RM34.47 million from RM18.24 million a year ago, underpinned the strong performance of its palm and bio-integration segment. Its revenue for the quarter rose 27.5% to RM273.15 million from RM214.26 million in 2010.
OSK Research said TSH's core earnings of RM87.3 million for 9MFY11, accounted for 79.3% and 77.2% of its and consensus' full-year forecasts respectively.
Revenue for the quarter itself surged 29.2% on-year but fell 17.2% sequentially amid weaker palm oil prices. Cost of sales, however, plunged by a substantial 21.6% on-quarter as third party FFB purchases dropped 16.9%, tipping the on-quarter core earnings growth into positive territory.
FFB production rose a marginal 1.2% on-quarter but soared 45.6% on-year, driven by the 60.8% growth experienced in Indonesia.
On a year-to-date basis, FFB production was 48.0% higher as Indonesia and Sabah production rose 71.8% and 18.1% respectively.
'We are tweaking up our FFB production to reflect a full year growth of 36.3% and revising upwards our OER assumption slightly to 21.2% from 21.0% previously.
'The marginal 0.6% on-quarter dip in CPO production despite a 11.5% drop in FFB processed indicates that OER improved on-quarter,' it said.
OSK Research said TSH's unplanted landbank was 66,700 ha.
The termination of the share sale agreement between TSH and Portvest in relation to the acquisition of Mildura Investment on Oct 19 removed some 12,000 ha from TSH's total landbank.
'However, the acquisition of two new Indonesian subsidiaries added another 21,300 to its landbank, bringing the company's total planted and unplanted areas to 23,800 ha and 66,700 ha respectively,' it said.
November 17, 2011
MMC ready for Gas Malaysia IPO
Stock Name: MMCCORP
Company Name: MMC CORPORATION BHD
MMC Corp Bhd
(Nov 17, RM2.51)
Maintain trading buy at RM2.52 with revised fair value of RM3.65 (from RM3.47): Following our meeting with management and our Invest Malaysia Hong Kong 2011 event, we note that the Port of Tanjung Pelepas (PTP) has been growing at a stronger-than-expected 15.5% year-to-date in terms of volume, while Johor Port has secured a tariff hike after a 20-year wait and the double-tracking project remains on track.
With numerous large IPO such as Pavilion REIT and Felda Global hogging investor attention, MMC should not be left out in the cold in view of the upcoming Gas Malaysia Bhd IPO. The proposed IPO has secured approvals from Bursa Malaysia, MMC shareholders and the Economic Planning Unit.
All that is holding it back now is the condition requiring Gas Malaysia to sign a new gas supply agreement with Petronas. We understand demand from investors at the indicative IPO price of RM2.20 per share has been strong.
We build into our assumptions: (i) that MMC raises RM307 million from the sale of its 10.9% stake in Gas Malaysia and uses it to pare down its borrowings; (ii) Gas Malaysia's share price settles at RM2, which we build into our sum-of-parts valuation for MMC. This will lift our earnings forecasts by 3% for 2012 and 4% for 2013 as the finance cost savings offset minority interest leakage.
Our sum-of-parts fair value is lifted to RM3.65 and we maintain our 'trading buy' call, noting that much depends on the listing of Gas Malaysia. ' OSK Research, Nov 17
This article appeared in The Edge Financial Daily, November 18, 2011.
Company Name: MMC CORPORATION BHD
| Research House: OSK | Price Call: TRADING BUY | Target Price: 3.65 |
MMC Corp Bhd
(Nov 17, RM2.51)
Maintain trading buy at RM2.52 with revised fair value of RM3.65 (from RM3.47): Following our meeting with management and our Invest Malaysia Hong Kong 2011 event, we note that the Port of Tanjung Pelepas (PTP) has been growing at a stronger-than-expected 15.5% year-to-date in terms of volume, while Johor Port has secured a tariff hike after a 20-year wait and the double-tracking project remains on track.
With numerous large IPO such as Pavilion REIT and Felda Global hogging investor attention, MMC should not be left out in the cold in view of the upcoming Gas Malaysia Bhd IPO. The proposed IPO has secured approvals from Bursa Malaysia, MMC shareholders and the Economic Planning Unit.
All that is holding it back now is the condition requiring Gas Malaysia to sign a new gas supply agreement with Petronas. We understand demand from investors at the indicative IPO price of RM2.20 per share has been strong.
We build into our assumptions: (i) that MMC raises RM307 million from the sale of its 10.9% stake in Gas Malaysia and uses it to pare down its borrowings; (ii) Gas Malaysia's share price settles at RM2, which we build into our sum-of-parts valuation for MMC. This will lift our earnings forecasts by 3% for 2012 and 4% for 2013 as the finance cost savings offset minority interest leakage.
Our sum-of-parts fair value is lifted to RM3.65 and we maintain our 'trading buy' call, noting that much depends on the listing of Gas Malaysia. ' OSK Research, Nov 17
This article appeared in The Edge Financial Daily, November 18, 2011.
Dialog in line for 1QFY12
Stock Name: DIALOG
Company Name: DIALOG GROUP BHD
Dialog Group Bhd
(Nov 17, RM2.46)
Maintain outperform at RM2.40 with fair value of RM3.51: Net profit for 3MFY12 of RM44.5 million was largely within expectations, accounting for 21.5% of our (RM206.8 million) and 22.6% of consensus (RM197.1 million) estimates.
There was a quarter-on-quarter deterioration in revenue (-5%) and earnings before interest and tax (-22.4%), likely caused by: (i) the reduction in major engineering and construction work as the Pengerang tank terminal project is still in the early stages; and (ii) incremental costs to kick-start the Pengerang tank terminal project has led to a slight margin squeeze. However, the company's strong associate earnings (+36.3%) mitigated the impact to bottom line earnings (-0.7%). We believe the higher associate earnings was likely due to the start-up of Phase 3 of Tanjung Langsat 1 which we understand was completed in August. Tanjung Langsat 2 is expected to be completed in December.
The company has its hands full with upcoming projects: (i) Phase 1 of the Pengerang deepwater tank terminal project; and (ii) Balai cluster marginal field development. It is also looking to complete its fundraising exercise (rights issue on the basis of two rights shares plus one free warrant for every existing 10 shares held) by 1QCY12 and hopes to secure another marginal field project when tenders are opened in CY12.
We maintain our earnings estimates. Risks include: (i) fall in crude oil prices that could result in oil and gas majors delaying/cancelling projects which will affect growth in Dialog's core operations; (ii) delays to start-up timelines of projects in hand; and (iii) heightened competition as other companies emulate Dialog's business model.
Dialog remains one of our favourites in the oil and gas sector given the: (i) long-term project visibility; (ii) resilience of the tank terminal business during a downturn; (iii) conservative risk management which underpins the success of its ongoing and upcoming projects; and (iv) apparent strong linkage to Petroliam Nasional Bhd. As such, we maintain our 'outperform' call on the stock and our sum-of-parts-based fair value of RM3.51 per share. ' RHB Research, Nov 17
This article appeared in The Edge Financial Daily, November 18, 2011.
Company Name: DIALOG GROUP BHD
| Research House: RHB | Price Call: BUY | Target Price: 3.51 |
Dialog Group Bhd
(Nov 17, RM2.46)
Maintain outperform at RM2.40 with fair value of RM3.51: Net profit for 3MFY12 of RM44.5 million was largely within expectations, accounting for 21.5% of our (RM206.8 million) and 22.6% of consensus (RM197.1 million) estimates.
There was a quarter-on-quarter deterioration in revenue (-5%) and earnings before interest and tax (-22.4%), likely caused by: (i) the reduction in major engineering and construction work as the Pengerang tank terminal project is still in the early stages; and (ii) incremental costs to kick-start the Pengerang tank terminal project has led to a slight margin squeeze. However, the company's strong associate earnings (+36.3%) mitigated the impact to bottom line earnings (-0.7%). We believe the higher associate earnings was likely due to the start-up of Phase 3 of Tanjung Langsat 1 which we understand was completed in August. Tanjung Langsat 2 is expected to be completed in December.
The company has its hands full with upcoming projects: (i) Phase 1 of the Pengerang deepwater tank terminal project; and (ii) Balai cluster marginal field development. It is also looking to complete its fundraising exercise (rights issue on the basis of two rights shares plus one free warrant for every existing 10 shares held) by 1QCY12 and hopes to secure another marginal field project when tenders are opened in CY12.
We maintain our earnings estimates. Risks include: (i) fall in crude oil prices that could result in oil and gas majors delaying/cancelling projects which will affect growth in Dialog's core operations; (ii) delays to start-up timelines of projects in hand; and (iii) heightened competition as other companies emulate Dialog's business model.
Dialog remains one of our favourites in the oil and gas sector given the: (i) long-term project visibility; (ii) resilience of the tank terminal business during a downturn; (iii) conservative risk management which underpins the success of its ongoing and upcoming projects; and (iv) apparent strong linkage to Petroliam Nasional Bhd. As such, we maintain our 'outperform' call on the stock and our sum-of-parts-based fair value of RM3.51 per share. ' RHB Research, Nov 17
This article appeared in The Edge Financial Daily, November 18, 2011.
Margin expansion at Three-A Resources to accelerate
Stock Name: 3A
Company Name: THREE-A RESOURCES BHD
Three-A Resources Bhd
(Nov 17, RM1.17)
Maintain buy at RM1.18 with revised fair value of RM1.83 (from RM2.13): Three-A Resources (3A) posted a higher net profit of RM14 million (year-on-year [y-o-y]: 4%) for 9MFY11. Earnings for the nine months came in at the low end of our full-year forecast and consensus estimate at 65%, with the variance mainly due to softer than expected top line growth. We have trimmed our FY11F to FY13F earnings by 10% to 12%. Despite our revisions, our earnings model indicates a strong three-year compounded annual growth rate of 35%. We are now projecting FY11F net profit of RM18 million to grow 63% to RM30 million for FY12F, and a further 43% to RM42 million the year after.
On a sequential basis, 3Q performance was impacted by lower revenue which contracted 11% due to softer demand, and partially offset by a margin expansion of 2.9 percentage points. While net profit declined 34% to RM3 million, we remain encouraged by the group's continued margin recovery on the back of cheaper raw materials. We expect margin revival to gain further traction as cheaper costs filter through in the quarters ahead.
As it is, key input cost of tapioca starch (Thai) is trading at US$460 (RM1,454) per tonne, 19% off its year-to-date peak in June. Tapioca starch constitutes 40% to 50% of total raw materials.
We remain positive about 3A's prospects. Its capacity driven earnings growth is well underpinned by stable demand and margin recovery.
More importantly, 3A's long-term growth and transformational earnings are on track, with its maiden China joint venture plant with Wilmar International on schedule for operational commencement by end-FY11F.
We maintain 'buy' on 3A with a revised fair value of RM1.83 per share (previously RM2.13), based on a fair price-earnings ratio (PER) of 24 times FY12F earnings. Valuation is cheap at the present level, with forward PER of 15 times at a steep discount to its three-year historical average of 26 times. ' AmResearch, Nov 17
This article appeared in The Edge Financial Daily, November 18, 2011.
Company Name: THREE-A RESOURCES BHD
| Research House: AMMB | Price Call: BUY | Target Price: 1.83 |
Three-A Resources Bhd
(Nov 17, RM1.17)
Maintain buy at RM1.18 with revised fair value of RM1.83 (from RM2.13): Three-A Resources (3A) posted a higher net profit of RM14 million (year-on-year [y-o-y]: 4%) for 9MFY11. Earnings for the nine months came in at the low end of our full-year forecast and consensus estimate at 65%, with the variance mainly due to softer than expected top line growth. We have trimmed our FY11F to FY13F earnings by 10% to 12%. Despite our revisions, our earnings model indicates a strong three-year compounded annual growth rate of 35%. We are now projecting FY11F net profit of RM18 million to grow 63% to RM30 million for FY12F, and a further 43% to RM42 million the year after.
On a sequential basis, 3Q performance was impacted by lower revenue which contracted 11% due to softer demand, and partially offset by a margin expansion of 2.9 percentage points. While net profit declined 34% to RM3 million, we remain encouraged by the group's continued margin recovery on the back of cheaper raw materials. We expect margin revival to gain further traction as cheaper costs filter through in the quarters ahead.
As it is, key input cost of tapioca starch (Thai) is trading at US$460 (RM1,454) per tonne, 19% off its year-to-date peak in June. Tapioca starch constitutes 40% to 50% of total raw materials.
We remain positive about 3A's prospects. Its capacity driven earnings growth is well underpinned by stable demand and margin recovery.
More importantly, 3A's long-term growth and transformational earnings are on track, with its maiden China joint venture plant with Wilmar International on schedule for operational commencement by end-FY11F.
We maintain 'buy' on 3A with a revised fair value of RM1.83 per share (previously RM2.13), based on a fair price-earnings ratio (PER) of 24 times FY12F earnings. Valuation is cheap at the present level, with forward PER of 15 times at a steep discount to its three-year historical average of 26 times. ' AmResearch, Nov 17
This article appeared in The Edge Financial Daily, November 18, 2011.
Dialog Group RM2.40: Buy
Stock Name: DIALOG
Company Name: DIALOG GROUP BHD
No surprises, on track for growth
Maintain Buy. 1QFY12 results yielded no surprises with Dialogregistering a solid 35% YoY growth in net profit. We are keeping ourconservative forecasts unchanged with further upside potential. Wecontinue to like its business model, its focused management anddefensive qualities that offer steady and progressive dividends. Dialogremains among our preferred Buys in O&G with an unchanged RM3.35target price (sum-of-part valuations).
Maybank research (17 November 2011)
Click here for full report ''
Company Name: DIALOG GROUP BHD
| Research House: MAYBANK | Price Call: BUY | Target Price: 3.35 |
No surprises, on track for growth
Maintain Buy. 1QFY12 results yielded no surprises with Dialogregistering a solid 35% YoY growth in net profit. We are keeping ourconservative forecasts unchanged with further upside potential. Wecontinue to like its business model, its focused management anddefensive qualities that offer steady and progressive dividends. Dialogremains among our preferred Buys in O&G with an unchanged RM3.35target price (sum-of-part valuations).
Maybank research (17 November 2011)
Click here for full report ''
HLIB Research 17 Nov 2011 (AFG
Stock Name: AFG
Company Name: ALLIANCE FINANCIAL GROUP BHD
Company Name: ALLIANCE FINANCIAL GROUP BHD
| Research House: HLG | Price Call: BUY | Target Price: 3.65 |
AFG (BUY)
Delivering The Goods
'' 2QFY12 results above HLIB and consensus expectations due to continuednon-interest income growth and subdued credit charge.
'' Results show management gradually delivering its strategy withbroad-based non-interest income growth, acceleration in loans growth andimprovement in NIM.
'' Deposit franchise also continued to be strong (growth ahead of industryaverage) which will ensure healthy NIM.
'' Guiding for sustainable low credit charge.
'' Asset quality improvement unabated with ratios now better than industryand LLC above 100%, both for the first time.
'' Capital also robust and in top quartile.
'' Dividend quantum and payout ratio expected to increase.
'' Maintain Buy and target price of RM3.65.
Tanjung Offshore RM0.85: Buy
Stock Name: TGOFFS
Company Name: TANJUNG OFFSHORE BHD
Validated; results getting closer in line
Maintain Buy-awaiting catalyst. TOFF's 3Q11 results validate ourRM1.4m net loss forecast for 2011. Cost management remains aproblem with earnings derived mainly from vessels supporting its otherloss-making segments, which caps earnings potential. Still, we look forcatalyst from its new PSVs and a resolution to losses at Citech. At thisjuncture, TOFF trades at historical trough P/BV valuations, unwarrantedby its improving outlook over a 24-month period. Reiterate Buy call withan unchanged target price of RM0.98, based on 0.8x book.
Maybank research (17 November 2011)
Click here for full report ''
Company Name: TANJUNG OFFSHORE BHD
| Research House: MAYBANK | Price Call: BUY | Target Price: 0.98 |
Validated; results getting closer in line
Maintain Buy-awaiting catalyst. TOFF's 3Q11 results validate ourRM1.4m net loss forecast for 2011. Cost management remains aproblem with earnings derived mainly from vessels supporting its otherloss-making segments, which caps earnings potential. Still, we look forcatalyst from its new PSVs and a resolution to losses at Citech. At thisjuncture, TOFF trades at historical trough P/BV valuations, unwarrantedby its improving outlook over a 24-month period. Reiterate Buy call withan unchanged target price of RM0.98, based on 0.8x book.
Maybank research (17 November 2011)
Click here for full report ''
AMMB Holdings RM5.65: Hold
Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD
In a preservation mode
Within expectations. On expectations of more moderate earningsgrowth in 2H, AMMB's 1HFY12 net profit of RM811m (+15.7% YoY)was within estimates at 55% and 53% of our full-year forecast andconsensus respectively. Our forecasts and Hold call are maintained asis our target price of RM6.30 (1.6x CY12 P/BV, ROAE: 13.5%).
Maybank research (17 November 2011)
Click here for full report ''
Company Name: AMMB HOLDINGS BHD
| Research House: MAYBANK | Price Call: HOLD | Target Price: 6.30 |
In a preservation mode
Within expectations. On expectations of more moderate earningsgrowth in 2H, AMMB's 1HFY12 net profit of RM811m (+15.7% YoY)was within estimates at 55% and 53% of our full-year forecast andconsensus respectively. Our forecasts and Hold call are maintained asis our target price of RM6.30 (1.6x CY12 P/BV, ROAE: 13.5%).
Maybank research (17 November 2011)
Click here for full report ''
HLIB Research 17 Nov 2011 (AMMB)
Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD
Company Name: AMMB HOLDINGS BHD
| Research House: HLG | Price Call: BUY | Target Price: 6.02 |
AMMB (HOLD)
Lower FY12 KPIs
'' 2QFY12 results in line with HLIB and consensus asmanagement guiding for lower 2H.
'' Interim dividend of 6.6 sen (+10% yoy).
'' Results typified by absence of extra AFS profit, NIM at expense ofloans, preemptive provision for one corporate loan and swings in MTM of HFTsecurities and derivatives.
'' FY12 KPIs cut to 13.6-14% ROE and 10-12% profit growthvs. 14-16%. HLIB's forecast in line and at lower ranges.
'' Loans and deposits contraction due to addressing NIMerosion and focus on profitable growth. However, CASA grew strongly at 5.3% qoqand 20.5% yoy.
'' Credit cost guidance of 50-55bps lower than HLIB's60bps.
'' Asset quality improved despite the preemptive classification andprovisioning of one corporate loan.
'' Capital ratios remained strong, BASEL III core equityratio improved to 8.3% from 7.6%, no change to dividend policy.
'' Maintain HOLD with unchanged target price of RM6.02.
IOI Corp dn, Maybank Research cuts stock to Hold
Stock Name: IOICORP
Company Name: IOI CORPORATION BHD
KUALA LUMPUR (Nov 17): IOI Corp Bhd share fell to a low of RM5.16 in thin trade on mild profit taking on Thursday while Maybank Investment Bank Research downgraded it to a Hold after the share price exceeded its target price.
At 11.14am, it was down four sen to RM5.19. There were 305,400 shares done at prices ranging from RM5.16 to RM5.21.
Maybank Research said IOI Corp's share price had surpassed its target price, up 12% since it last upgraded the stock on Aug 25 and up 20% from its recent bottom.
The research house said the first quarter earnings for the period ended Sept 30 were expected to be weaker on-quarter.
'Sentiment may be dampened by huge forex translation loss of c.RM230m in 1QFY12 following a weaker ringgit.
'We maintain our earnings forecasts pending the release of 1Q results on Nov 18. TP is unchanged at RM5.14 based on 16 times FY13 price-to-earnings ratio,' it said.
Company Name: IOI CORPORATION BHD
| Research House: MAYBANK | Price Call: HOLD | Target Price: 5.14 |
KUALA LUMPUR (Nov 17): IOI Corp Bhd share fell to a low of RM5.16 in thin trade on mild profit taking on Thursday while Maybank Investment Bank Research downgraded it to a Hold after the share price exceeded its target price.
At 11.14am, it was down four sen to RM5.19. There were 305,400 shares done at prices ranging from RM5.16 to RM5.21.
Maybank Research said IOI Corp's share price had surpassed its target price, up 12% since it last upgraded the stock on Aug 25 and up 20% from its recent bottom.
The research house said the first quarter earnings for the period ended Sept 30 were expected to be weaker on-quarter.
'Sentiment may be dampened by huge forex translation loss of c.RM230m in 1QFY12 following a weaker ringgit.
'We maintain our earnings forecasts pending the release of 1Q results on Nov 18. TP is unchanged at RM5.14 based on 16 times FY13 price-to-earnings ratio,' it said.
MIDF Research maintains Buy on TH Plantations, TP RM2.51
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
KUALA LUMPUR (Nov 17): MIDF Research is maintaining its Buy call on TH PLANTATION []s Bhd at a higher revised price of RM2.51 from RM2.26.
It said on Thursday in line with the upwards earnings revision, it was revising our target price by 11% to RM2.51.
'The target price is derived from 9.5 times EPS12, which is 0.5-standard deviation below its three-year historical PER of 10.3 times,' it said.
'The higher targeted PER (we previously discount the valuation by one standard deviation) is to reflect TH Plant's maturity and stable business operation,' it added.
Company Name: TH PLANTATIONS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 2.51 |
KUALA LUMPUR (Nov 17): MIDF Research is maintaining its Buy call on TH PLANTATION []s Bhd at a higher revised price of RM2.51 from RM2.26.
It said on Thursday in line with the upwards earnings revision, it was revising our target price by 11% to RM2.51.
'The target price is derived from 9.5 times EPS12, which is 0.5-standard deviation below its three-year historical PER of 10.3 times,' it said.
'The higher targeted PER (we previously discount the valuation by one standard deviation) is to reflect TH Plant's maturity and stable business operation,' it added.
HDBSVR maintains Hold on AMMB, target price RM6.70
Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD
KUALA LUMPUR (Nov 17): Hwang DBS Vickers Research (HDBSVR) is retaining its Hold rating and RM6.70 target price for AMMB HOLDINGS BHD [] based on 15.5% returns on equity, 6% growth and 11.5% cost of equity.
It said on Thursday that AMMB's 1HFY12 profit was 51%/53% of its/consensus' estimates. Non-interest income was the main earnings driver, led by markets (treasury) segment as the bank lightened its fixed income portfolio to take advantage of the lower yield environment.
'These are expected to inch down in 2HFY12. NIM improved because loans grew ahead of deposits.
'We understand competition for deposits remains intense, and there could be further NIM pressure ahead. AMMB said that its balance sheet is still biased towards a rate hike,' it said.
HDBSVR said the variable rate loans are now 53% of total loans vs 47% a year ago.
'We trimmed loan and deposit growth to 8% each from 12% and 10%, respectively, so loan-to-deposit ratio remains at about 90%. 6MFY12 loan growth was only 2% while deposits growth was flat, but this could build up in 2HFY12 led by the corporate & investment banking business,' it said.
HDBSVR said its earnings estimates are little changed after this adjustment.
Company Name: AMMB HOLDINGS BHD
| Research House: HWANGDBS | Price Call: HOLD | Target Price: 6.70 |
KUALA LUMPUR (Nov 17): Hwang DBS Vickers Research (HDBSVR) is retaining its Hold rating and RM6.70 target price for AMMB HOLDINGS BHD [] based on 15.5% returns on equity, 6% growth and 11.5% cost of equity.
It said on Thursday that AMMB's 1HFY12 profit was 51%/53% of its/consensus' estimates. Non-interest income was the main earnings driver, led by markets (treasury) segment as the bank lightened its fixed income portfolio to take advantage of the lower yield environment.
'These are expected to inch down in 2HFY12. NIM improved because loans grew ahead of deposits.
'We understand competition for deposits remains intense, and there could be further NIM pressure ahead. AMMB said that its balance sheet is still biased towards a rate hike,' it said.
HDBSVR said the variable rate loans are now 53% of total loans vs 47% a year ago.
'We trimmed loan and deposit growth to 8% each from 12% and 10%, respectively, so loan-to-deposit ratio remains at about 90%. 6MFY12 loan growth was only 2% while deposits growth was flat, but this could build up in 2HFY12 led by the corporate & investment banking business,' it said.
HDBSVR said its earnings estimates are little changed after this adjustment.
MALAYSIAN GENOMICS RESOURCE CENTRE - 1QFY12 RESULTS - GENE THERAPY NEEDED?
Stock Name: MGRC
Company Name: MSIAN GENOMICS RES CENTRE BHD
Company Name: MSIAN GENOMICS RES CENTRE BHD
| Research House: CIMB | Price Call: SELL | Target Price: 0.34 |
IMASPRO CORPORATION - 1QFY12 RESULTS - PUT THIS STOCK OUT TO GRASS
Stock Name: IMASPRO
Company Name: IMASPRO CORPORATION BHD
Company Name: IMASPRO CORPORATION BHD
| Research House: CIMB | Price Call: SELL | Target Price: 0.78 |
In line, with 2H to be weaker
Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD
Company Name: AMMB HOLDINGS BHD
| Research House: ECMLIBRA | Price Call: HOLD | Target Price: 5.70 |
China-based sports shoe OEM offers earnings growth and 10% net dividend yield
Stock Name: MAXWELL
Company Name: MAXWELL INT HOLDINGS BERHAD
Company Name: MAXWELL INT HOLDINGS BERHAD
| Research House: ZJ | Price Call: BUY | Target Price: 0.58 |
Update Report
Stock Name: BPPLAS
Company Name: BP PLASTICS HOLDING BHD
Company Name: BP PLASTICS HOLDING BHD
| Research House: NETRESEARCH | Price Call: BUY | Target Price: 0.94 |
November 16, 2011
3Q11 results review
Stock Name: OSK
Company Name: OSK HOLDINGS BHD
Company Name: OSK HOLDINGS BHD
| Research House: NETRESEARCH | Price Call: BUY | Target Price: 2.00 |
HLIB Research 16 November 2011 (CIMB; TimeDotCom; Traders Brief)
Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD
Company Name: CIMB GROUP HOLDINGS BERHAD
| Research House: HLG | Price Call: HOLD | Target Price: 7.20 |
CIMB Group (HOLD)
Cautiously Optimistic
'''' 3QFY12/11 results in line with HLIB and consensus.
'''' Results boosted by strong rebound in treasury and investment division and lower tax.
'''' Difficult to meet 17% ROE KPI but consensus and HLIB numbers achievable.'' May fall short of loans and deposits KPIs but within HLIB conservative assumptions.
'''' Relatively positive about 2012 loans growth and expect CASA growth to partly mitigate NIM compression.'' See opportunity to expand NIM from further shrinkage of US$ funding in the region pending EU debt crisis outcome.
'''' 2012 equity pipeline good (delays from 2011) while M&A, bonds, Fx and rates markets to remain active.
'''' Asset quality ratios improved but absolute IL increased.'' However, do not expect the impact of rise in delinquencies to be significant.'' Expect CA/net loans to decline to industry pees level by 2H2012.
'''' Basel III bank level core equity ratio at 9.2%.
'''' No investments in EU, small derivatives cash collateralized.
'''' No change in dividend policy given ample capital.
'''' Maintain HOLD with unchanged target price of RM7.20.
''
TdC (BUY)
Financing the Wedding
'''' TdC has announced its acceptance of term loan facilities granted by CIMB Bank Bhd (Bursa Malaysia).
a.'' Term Loan Facility to TdC amounting to RM22.5m with the purpose to refinance the existing borrowing of AIMS Data Centre 2 SB, The AIMS Asia Group SB and its subsidiaries and AIMS Cyberjaya SB.
b.'' Term Loan Facility to TT dotCom SB, a wholly-owned subsidiary, amounting to RM88m with the purpose to advance funds to TdC to acquire GTL and AIMS Group.
'''' Comments: We take this announcement positively as TdC has achieved another important milestone towards its acquisitions.
'''' We foresee strong and solid synergies between TdC and its acquiring targets offering one-stop solution to customers' ICT requirements, from hosting services to connectivity which is globally expanded.
'''' Additionally, TdC would probably benefit from the recently announced digital cable TV initiative by Asian Broadcasting Network which is set to take off in 2Q12. TdC may enter into collaboration similar to the existing one with Astro.
'''' Maintain our Buy call with a higher SOP target price of RM0.82 from RM0.81 as we imputed our DiGi target price (instead of market price). Based on DiGi's latest price, it could add 4 sen to our SOP.
''
Crucial support near 1452-1467 pts
'''' Technically, daily trend and momentum indicators are weakening and are pointing to more consolidations. Immediate resistance levels remain at 100- d SMA (now at 1487) and 200-d SMA (1508), followed by 1530 (23.6% FR). Downside supports are mid Bollinger band (1467), 1452 pts (3 Nov intraday low) and 30-d SMA (1445 pts).
''
Range bound trading within the box
'''' On top of focusing Europe's debts issues, investors are likely to shift its attention towards a congressional committee decision on further deficit-reduction measures by 23 Nov and raise the debt ceiling into 2013. Hence, pending the outcome, we believe the Dow will continue in range bound consolidation. Immediate resistance levels are 12300-12500 levels while supports are near 11500-11700.
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