Stock Name: KENCANA
Company Name: KENCANA PETROLEUM BHD
Company Name: KENCANA PETROLEUM BHD
| Research House: OSK | Price Call: BUY | Target Price: 3.17 |
December 9, 2011
Secures new supply contract with Royal Navy
Stock Name: BSTEAD
Company Name: BOUSTEAD HOLDINGS BHD
Company Name: BOUSTEAD HOLDINGS BHD
| Research House: AMMB | Price Call: BUY | Target Price: 4.30 |
HLIB Research 9 Dec 2011 (Axiata, SP Setia; Economics; Traders Brief)
Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD
Stock Name: SPSETIA
Company Name: SP SETIA BHD
Company Name: AXIATA GROUP BERHAD
| Research House: HLG | Price Call: HOLD | Target Price: 4.92 |
Stock Name: SPSETIA
Company Name: SP SETIA BHD
| Research House: HLG | Price Call: HOLD | Target Price: 3.90 |
Axiata Berhad (HOLD)
Celcom Diversifying into Broadcasting
'''' StarBiz reported that Broadcast Australia will ink an exclusive deal on Monday to be Celcom Axiata Bhd's technical partner ahead of a bid for the much awaited RM2b digital terrestrial television broadcasting (DTTB) project.
'''' Broadcast Australia is an infrastructure network operator for broadcasters and telecommunications providers in Australia.
'''' Those that are keen include Maxis Bhd, whose technical partner is Astro; KUB Malaysia Bhd in partnership with Germany's Media Broadcast Systems; and YTL Communications SB with US-based Sezmi and American technical consultant Peter Douglas. Parties like Comintel SB, I-Media Broadcasting Solutions SB, Ikatan Maya SB and Apex Communications SB are also interested in the project but yet to announce who their technical partners are.
'''' Comments: We view this diversification positively as telcos are exploring new revenue stream to sustain growth as voice revenue is declining and data business does not reward lucrative margin as voice.
'''' By leveraging on its existing radio sites, Celcom would achieve greater economy of scale by deploying DTTB transceivers.
'''' We reiterate our HOLD call with unchanged target price of RM4.92.
''
SP Setia (HOLD)
FY11 results in-line
'''' FY11 net profit rose 30.2% yoy to RM322m, in-line with HLIB estimates but ahead of consensus by 10.9%.
'''' 9 sen gross dividend was declared for 4Q.
'''' FY11 sales came in at RM3.3bn, thanks to extremely strong sales of RM800m in Sep-Oct alone.'' This eclipses the previous record set in FY10 of RM2.3bn.'' Management has set an ambitious new sales target of RM4.0bn for FY12.
'''' Management revealed that they have reached a 3-year management agreement with PNB, pending SC approval and with details to be disclosed in the amended offer document.
'''' Going forward, SP Setia is planning more overseas projects, and we believe the next new overseas project is likely to be in London.
'''' Rolling over our numbers, we raise our FY12-13 earnings forecast by 11-12%, supported by RM2.8bn of unbilled sales (1.9x FY10 property revenue).
'''' Maintain HOLD and target price of RM3.90, which is the offer price.
''
Performance of IPI (Oct 2011)
'''' IPI grew by 2.8% yoy in Oct (Sep:'' +3.0% yoy), higher than the consensus estimate of +1.6%,on the back of softening of manufacturing and electricity output growth (+6.2% yoy and +1.9% respectively; Sep: +8.9% yoy and 6.4% yoy respectively).
'''' E&E output declined (-1.2% yoy; Sep: +3.4%) driven by weakness in all product segments. The pick-up of E&E output in September is now confirmed as a temporary spike rather than a change in trend.
'''' Mining output contraction was halved (-5.7% yoy; Sep:'''' -12.0% yoy), but latest Petronas guidance indicated recovery only from mid-2012 onwards.
'''' We maintain full year 2011 GDP forecast at 5.1% (4Qf: +5.0%). We expect GDP growth to remain stable at 4.5% in 2012 as bunching of construction projects cushioning softer manufacturing performance.
'''' We expect BNM to hold the OPR steady at 3.00% until end-2012 given resilient economic growth with sticky inflation.
''
KLCI: Wild swings ahead''
'''' With the overnight plunge in Dow and pending the outcome form the EU summit tonight, regional bourses and Bursa Malaysia are expected to experience another day of selldown today.''
'''' Technical indicators have weakened and if the crucial supports of mid Bollinger band (1465) and 50% FR (1454) are broken today, the KLCI is expected to fall further towards 50-d SMA (1445) and the Nov 23's low of 1423. Immediate resistance remains at 200-d SMA (1503).
KURASIA: Poised for a triangle breakout
'''' After hitting 52-wk high of RM0.58, KURASIA prices were consolidating within the RM0.42 (9 Aug) and RM0.535 (3 Nov) band before closing at RM0.495 yesterday.
'''' As long as prices stay above the RM0.46 level (uptrend line support and lower Bollinger band), we will continue to stick with the bull's camp. Once the immediate uptrend line resistance of RM0.52 is taken out, prices should re-rate towards RM0.59 (38.2% FR) and RM0.67 (23.6% FR). Strong supports are near RM0.42-0.46. Cut loss below RM0.42.
Malaysia Marine and Heavy Engineering Holdings (Hold): Post site visit note
Stock Name: MHB
Company Name: MALAYSIA MARINE AND HEAVY ENG
Positive but priced in. The yard is busy. Order flow is visibly strong. Replenishment is not an issue but constrained yard space is, in our view. The strategic purchase of Sime Darby's yard will not materially enhance 2012-13 earnings but should beef up MMHE's earnings from 2014. We reckon MMHE's prospects for 2012-13 are already priced in. As such, MMHE remains a Hold with a RM5.70 TP (20x 2013 EPS).
Maybank research (9 December 2011)
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Company Name: MALAYSIA MARINE AND HEAVY ENG
| Research House: MAYBANK | Price Call: HOLD | Target Price: 5.70 |
Positive but priced in. The yard is busy. Order flow is visibly strong. Replenishment is not an issue but constrained yard space is, in our view. The strategic purchase of Sime Darby's yard will not materially enhance 2012-13 earnings but should beef up MMHE's earnings from 2014. We reckon MMHE's prospects for 2012-13 are already priced in. As such, MMHE remains a Hold with a RM5.70 TP (20x 2013 EPS).
Maybank research (9 December 2011)
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Malaysia Airports Holdings (Buy): KLIA2 revisited
Stock Name: AIRPORT
Company Name: MALAYSIA AIRPORT HOLDINGS BHD
Project is viable. We conclude that the revised KLIA2 project is viable with IRR of 12.2%-13.1% based on MAHB's revised capex cost of RM3.6b-3.9b. The new IRR is slightly lower than our estimate of 14.1% at RM2.5b capex with more amenities and automation added into the terminal. But we believe this is an infrastructure that will serve the needs of the industry for decades to come. We maintain our BUY recommendation, with a lower DCF-based target price of RM7.00/share (from RM7.55) due to the initial cashflow burden impact.
Maybank research (9 December 2011)
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Company Name: MALAYSIA AIRPORT HOLDINGS BHD
| Research House: MAYBANK | Price Call: BUY | Target Price: 7.00 |
Project is viable. We conclude that the revised KLIA2 project is viable with IRR of 12.2%-13.1% based on MAHB's revised capex cost of RM3.6b-3.9b. The new IRR is slightly lower than our estimate of 14.1% at RM2.5b capex with more amenities and automation added into the terminal. But we believe this is an infrastructure that will serve the needs of the industry for decades to come. We maintain our BUY recommendation, with a lower DCF-based target price of RM7.00/share (from RM7.55) due to the initial cashflow burden impact.
Maybank research (9 December 2011)
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Update after company visit. Revise to Hold Call on improved expectations for FY12.
Stock Name: HANDAL
Company Name: HANDAL RESOURCES BERHAD
Company Name: HANDAL RESOURCES BERHAD
| Research House: MERCURY | Price Call: HOLD | Target Price: 0.43 |
4QFY11: It is time to ACCEPT
Stock Name: SPSETIA
Company Name: SP SETIA BHD
Company Name: SP SETIA BHD
| Research House: ECMLIBRA | Price Call: HOLD | Target Price: 3.90 |
RHB Research maintains market perform on S P Setia, FV RM3.90
Stock Name: SPSETIA
Company Name: SP SETIA BHD
KUALA LUMPUR (Dec 9): RHB Research Institute said S P Setia's FY11 results were within expectations.
It said on Friday the group's property sales exceeded target by almost 10% to RM3.29 billion for FY11.
'We believe SP Setia's sales target of RM4 billion for FY12 has already taken into account a 15%-25% decline in sales of existing projects (excluding Eco City).
RHB Research said however, given RM3 billion worth of new launches next year, S P Setia would still be able to achieve the target safely.
'Our fair value is kept at RM3.90 (that is Permodalan Nasional Bhd's takeover offer price). Maintain Market Perform,' it said.
Company Name: SP SETIA BHD
| Research House: RHB | Price Call: HOLD | Target Price: 3.90 |
KUALA LUMPUR (Dec 9): RHB Research Institute said S P Setia's FY11 results were within expectations.
It said on Friday the group's property sales exceeded target by almost 10% to RM3.29 billion for FY11.
'We believe SP Setia's sales target of RM4 billion for FY12 has already taken into account a 15%-25% decline in sales of existing projects (excluding Eco City).
RHB Research said however, given RM3 billion worth of new launches next year, S P Setia would still be able to achieve the target safely.
'Our fair value is kept at RM3.90 (that is Permodalan Nasional Bhd's takeover offer price). Maintain Market Perform,' it said.
CIMB Research has technical sell on WTK at RM1.17
Stock Name: WTK
Company Name: WTK HOLDINGS BHD
KUALA LUMPUR (Dec 9): CIMB Equities Research has a technical sell on WTK Holdings at RM1.17 at which it is trading at a price-to-book value of 0.5 times.
It said on Friday WTK Holdings is still trapped in a downtrend channel. Despite numerous attempts, prices fail to push above the downward slopping resistance trend line. The 30-day and 50-day SMAs at RM1.32-1.28 respectively will also put a lid on the bulls.
'Indicators are showing signs of exhaustion. MACD signal line has slipped into the red while RSI is below the 50pts mark.
'We will continue to stick with the bear's camp unless prices swing past the resistance trend line. Next supports are RM1.08 and RM1.03,' it said.
Company Name: WTK HOLDINGS BHD
| Research House: CIMB | Price Call: TRADING SELL | Target Price: 1.17 |
KUALA LUMPUR (Dec 9): CIMB Equities Research has a technical sell on WTK Holdings at RM1.17 at which it is trading at a price-to-book value of 0.5 times.
It said on Friday WTK Holdings is still trapped in a downtrend channel. Despite numerous attempts, prices fail to push above the downward slopping resistance trend line. The 30-day and 50-day SMAs at RM1.32-1.28 respectively will also put a lid on the bulls.
'Indicators are showing signs of exhaustion. MACD signal line has slipped into the red while RSI is below the 50pts mark.
'We will continue to stick with the bear's camp unless prices swing past the resistance trend line. Next supports are RM1.08 and RM1.03,' it said.
CIMB Research has technical sell on London Biscuits at 86.5 sen
Stock Name: LONBISC
Company Name: LONDON BISCUITS BHD
KUALA LUMPUR (Dec 9): CIMB Equities Research has a technical sell on London Biscuits at 86.5 sen at which it is trading at a price-to-book value of 0.4 times.
It said on Friday the previous day's sharp fall formed a bearish marubozu pattern and we are worried about its near term outlook.
'If the candles continue to stay below its 200-day SMA, there is a high possibility that prices may plunge towards 82 sen and 77.5 sen.
'As the fall was accompanied by high volume, we doubt prices can bounce back strongly any time soon. Hence, selling into strength looks like a good option here, especially near the 87.5 sen and 90.5 sen resistance levels,' it said.
CIMB Research said the technical landscape is deteriorating, pointing out that the MACD histogram bars are falling at a fast pace while RSI has also hooked downward.
Company Name: LONDON BISCUITS BHD
| Research House: CIMB | Price Call: TRADING SELL | Target Price: 86.50 |
KUALA LUMPUR (Dec 9): CIMB Equities Research has a technical sell on London Biscuits at 86.5 sen at which it is trading at a price-to-book value of 0.4 times.
It said on Friday the previous day's sharp fall formed a bearish marubozu pattern and we are worried about its near term outlook.
'If the candles continue to stay below its 200-day SMA, there is a high possibility that prices may plunge towards 82 sen and 77.5 sen.
'As the fall was accompanied by high volume, we doubt prices can bounce back strongly any time soon. Hence, selling into strength looks like a good option here, especially near the 87.5 sen and 90.5 sen resistance levels,' it said.
CIMB Research said the technical landscape is deteriorating, pointing out that the MACD histogram bars are falling at a fast pace while RSI has also hooked downward.
CIMB Research has technical sell on RHB Cap at RM6.92
Stock Name: RHBCAP
Company Name: RHB CAPITAL BHD
KUALA LUMPUR (Dec 9): CIMB Equities Research has a technical sell on RHB Capital at RM6.92 at which it is trading at a FY13 price-to-earnings of 7.5 times and price-to-book value of 1.4 times.
It said on Friday that respite numerous attempts, RHB Capital failed to swing above its resistance trend line.
'This shows that the bears are firmly in command. If we are right, prices would likely ease towards RM6.53 and RM6.25 over the next few days, if not weeks,' it said.
CIMB Research said as prices stay below its key moving averages, it doubted any rebound would be strong.
'MACD has staged a negative crossover while RSI is also dwindling towards the oversold territory. Near term outlook favours the bear.
'Use any rebound towards its 50-day and 30-day SMAs (now at RM7.25 and RM7.39 respectively) to unload on strength. Put a buy stop at RM7.12-RM7.40, just in case,' it said.
''
Company Name: RHB CAPITAL BHD
| Research House: CIMB | Price Call: TRADING SELL | Target Price: 6.92 |
KUALA LUMPUR (Dec 9): CIMB Equities Research has a technical sell on RHB Capital at RM6.92 at which it is trading at a FY13 price-to-earnings of 7.5 times and price-to-book value of 1.4 times.
It said on Friday that respite numerous attempts, RHB Capital failed to swing above its resistance trend line.
'This shows that the bears are firmly in command. If we are right, prices would likely ease towards RM6.53 and RM6.25 over the next few days, if not weeks,' it said.
CIMB Research said as prices stay below its key moving averages, it doubted any rebound would be strong.
'MACD has staged a negative crossover while RSI is also dwindling towards the oversold territory. Near term outlook favours the bear.
'Use any rebound towards its 50-day and 30-day SMAs (now at RM7.25 and RM7.39 respectively) to unload on strength. Put a buy stop at RM7.12-RM7.40, just in case,' it said.
''
December 8, 2011
HLIB Research 8 December 2011 (IJMP; GenM; MAS; Traders Brief) Part 2
Stock Name: IJMPLNT
Company Name: IJM PLANTATIONS BHD
Stock Name: GENM
Company Name: GENTING MALAYSIA BERHAD
Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
Company Name: IJM PLANTATIONS BHD
| Research House: HLG | Price Call: HOLD | Target Price: 2.67 |
Stock Name: GENM
Company Name: GENTING MALAYSIA BERHAD
| Research House: HLG | Price Call: HOLD | Target Price: 4.07 |
Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
| Research House: HLG | Price Call: SELL | Target Price: 1.19 |
IJM Plantations (Hold; TP: RM2.67)
A pure upstream player
'''' IJMP currently has a total landbank of 78,116ha and a total planted landbank of 38,805ha with an average age of 9.4 years as at 31 Mar 2011.
'''' The bases of our investment case for TSH include:
1.'''' Being one of the pure upstream oil palm plantation players in Malaysia, IJMP stands to be one of the major beneficiaries from higher palm oil prices;
2.'''' Strong balance sheet, with net cash and net cash per share of RM117.3m and 14.6 sen respectively;
3.'''' IJMP's oil palm estates in Indonesia will start contributing significantly from FY03/14 onwards; and
4.'''' Our positive longer-term outlook on the sector.
'''' We are projecting a net profit of RM186.3m, RM173.3m, and RM178.8m in FY03/12, FY03/13, and FY03/14 respectively.
'''' We are initiating coverage on IJMP with a HOLD recommendation and a TP of RM2.67/share based on 13x CY 2012 FD EPS of 20.6 sen.''
''
Genting Malaysia (HOLD)
RWNY To Fully Operate By 16 Dec
'''' According to NY Daily News, Resorts World New York (RWNY) has announced that the Phase 2 will open on 16 Dec (next Friday), two weeks ahead from our assumption. Phase 2 will include the remaining 2,514 VLTs and ETGs, two 250-seat restaurants and a large event space.
'''' RWNY's net win declined marginally to an average of US$562 vs. US$618 during the opening week. However, its net win is still strong against Empire City Casino's (ECC) average net win of US$268. We opined that this is normal in view of novelty effect.
'''' NY Lottery said that most of the cash came from out of state, which underpins our view that RWNY has enlarged the overall market size instead of cannibalizing ECC's performance.
'''' Assuming RWNY were to experience the same historical net win trend as ECC, RWNY could possibly record an average net win of US$531 for 2011 and US$408 for 2012. RWNY may hit its bottom at US$321 when its novelty effect wears off.
'''' By factoring in such net win to RWNY vs. our assumption of US$300, our FY11-13 forecasts and target price would be raised by 1.2-4.9% and 3.2% respectively.
'''' EPS for FY11 increased 2% to account for earlier opening of Phase 2 but FY12-13 remained unchanged as we kept out conservative net win assumption of US$300.
'''' Target price remain unchanged at RM4.07. Maintain HOLD.
''
MAS (SELL)
Remain Skeptical on Outlook
'''' MAS unveiled its Business Recovery Plan to position MAS as the Preferred Premium Carrier, by focusing on 5 steps:
1.'' Cut network capacities and focus on profitable routes;
2.'' Improve customer experience to win back market share;
3.'' Manage unit costs down to improve margin;
4.'' Focus on core airline business, while ancillary activities likely to be "spin off"; and
5.'' Ensure the delivery of new aircrafts (23 units in 2012).
'''' MAS targets to improve profits by RM1.2-1.5bn at airline level and RM1.1-1.5bn at group level. Eventually MAS's 2012 group profit is expected to range between 'RM165m to +RM238m.
'''' The funding of RM6bn new aircraft deliveries had almost been fully secured. MAS will be using combinations of new debts and leasing arrangements.
'''' We remain skeptical on MAS overall turnaround plan, which aimed to achieve breakevens in 2012 for:
1.'' Sketchy guidelines and timelines provided on the turnaround plan;
2.'' Ability of MAS to increase ticket prices without sacrificing passenger demand.
3.'' Relatively long timeline needed to change passenger perception and preference;
4.'' The readiness of staffs to accept the new structures.
5.'' Economy slow down, affecting premium travel demand.
'''' Target price remain unchanged at RM1.19.
''
KLCI: Cautious as the EU summit begins today''
'''' Technically, the KLCI is consolidating well above the crucial supports of mid Bollinger band (1465) and 100-day SMA (1470) levels.'' A breakdown below 1465 support will accelerate more selling pressures towards 50-d SMA (1442) with the current rebound from Nov 23's low of 1423 facing exhaustion. Immediate resistance remains at 200-d SMA (1503).
''
DIGISTAR: Poised for a triangle breakout
'''' Listed in 2003, Digistar is poised to breakout from its huge triangle pattern and is ripe for a stronger rebound. As technical indicators are on the mend, prices should take out the RM0.50 psychological level soon. Once this level is taken out, the next resistance targets are RM0.535 (52-wk high), RM0.57 (123.6% FR) and RM0.60 (138.2% FR). Cut loss below RM0.40 (200-d SMA).
'''' For cheaper exposure, investors can consider Digistar-WA.
Malaysia Airlines (Hold): Business Turnaround Plan Part 3.0
Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
New plan, same story. Malaysia Airlines (MAS), at an analyst briefing yesterday, revealed its third edition of business turnaround plan. In a nutshell, the Company will cull severe loss making routes which are no hopers, extract cost benefits of new aircraft, streamline business operations and focus to enhance service levels. In our view, these plans are not new. Maintain Hold with a target price of RM1.55/share - based on 5.6x 2012 adjusted EV/EBITDAR.
Maybank research (8 December 2011)
Click here for full report
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
| Research House: MAYBANK | Price Call: HOLD | Target Price: 1.55 |
New plan, same story. Malaysia Airlines (MAS), at an analyst briefing yesterday, revealed its third edition of business turnaround plan. In a nutshell, the Company will cull severe loss making routes which are no hopers, extract cost benefits of new aircraft, streamline business operations and focus to enhance service levels. In our view, these plans are not new. Maintain Hold with a target price of RM1.55/share - based on 5.6x 2012 adjusted EV/EBITDAR.
Maybank research (8 December 2011)
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Petronas Chemicals Group (Buy): The easing has started, but...
Stock Name: PCHEM
Company Name: PETRONAS CHEMICALS GROUP BHD
Easing prices, maintain forecast. PCHEM's product margin in Nov 2011 was USD1,086/ton (+16.9% YoY, -7.4% MoM), we estimate. The year-to-date product margin of USD1,160/ton is still 36.8% higher YoY. Product prices are easing in line with slower global demand and destocking exercise. Nonetheless, we believe this should stabilize soon as supply has waned from lower operating rates and factory shutdowns. Maintain BUY with an unchanged target price of RM7.50/share based on 13.5x 2012 PER.
Maybank research (8 December 2011)
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Company Name: PETRONAS CHEMICALS GROUP BHD
| Research House: MAYBANK | Price Call: BUY | Target Price: 7.50 |
Easing prices, maintain forecast. PCHEM's product margin in Nov 2011 was USD1,086/ton (+16.9% YoY, -7.4% MoM), we estimate. The year-to-date product margin of USD1,160/ton is still 36.8% higher YoY. Product prices are easing in line with slower global demand and destocking exercise. Nonetheless, we believe this should stabilize soon as supply has waned from lower operating rates and factory shutdowns. Maintain BUY with an unchanged target price of RM7.50/share based on 13.5x 2012 PER.
Maybank research (8 December 2011)
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3QFY11 - another robust set of results
Stock Name: SMRTECH
Company Name: SMR TECHNOLOGIES BHD
Company Name: SMR TECHNOLOGIES BHD
| Research House: ZJ | Price Call: BUY | Target Price: 0.31 |
Dayang Takes Up the Private Placement
Stock Name: PERDANA
Company Name: PERDANA PETROLEUM BERHAD
Company Name: PERDANA PETROLEUM BERHAD
| Research House: TA | Price Call: SELL | Target Price: 0.41 |
Cleaning Up Its Back Yard
Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
| Research House: TA | Price Call: SELL | Target Price: 1.33 |
More Thai Spice
Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD
Company Name: CIMB GROUP HOLDINGS BERHAD
| Research House: OSK | Price Call: HOLD | Target Price: 7.62 |
December 7, 2011
RHBInvest Research Highlights 07th December 2011
Stock Name: APM
Company Name: APM AUTOMOTIVE HOLDINGS BHD
Company Name: APM AUTOMOTIVE HOLDINGS BHD
| Research House: RHB | Price Call: HOLD | Target Price: 4.30 |
07th December 2011
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| MALAYSIA EQUITIES |
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| APM VISIT NOTE Dividend potential to support share price We see APM facing a challenging year in 2012 with pressure on both costs and pricing, with the recent strength of the JPY and US$ raising pressure on margins. APM also faces renewed pressure on pricing from OEM customers continually looking to cost down. While we see multiple growth opportunities for APM, some of these can only be realised in the medium term from 2013 and beyond. Investor interest in APM could be sustained by the possibility of a higher dividend payout considering its consolidated net cash position of RM361.6m at end-Sep. We reiterate our Market Perform call and revise our fair value estimate to RM4.30 (from RM4.50). Our conservative dividend estimates already imply a 5% annual gross yield that should help support the share price. Related story: APM Results Note ' 3Q11 Earnings Disappoint (18 Nov 2011) MRCB NEWS UPDATE Formally appointed PDP of River Of Life project Related story: MRCB News Update ' Lands RM40.3m Perai River Estuary Rehabilitation Project (1 Dec 2011) | ||||||||||||||||||||||||||||
Malaysia Marine and Heavy Engineering Holdings (Hold): 'Four'-feit
Stock Name: MHB
Company Name: MALAYSIA MARINE AND HEAVY ENG
Tactical downgrade to Hold. The delay in projects roll-out, a likely setback at Sime Darby's yard, grey visibility at Turkmenistan and higher tax rates are the 4 key reasons that compel us to cut 2011-13 earnings forecasts by 9-29%. The slower execution will constrain available yard space and could see MMHE missing out some projects in 2012. Against this backdrop, we cut our TP to RM5.70 (20x 2013 PER; -29%). We also downgrade our call on the stock due to fair valuations at this juncture although we remain positive over its longer term prospects.
Maybank research (7 December 2011)
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Company Name: MALAYSIA MARINE AND HEAVY ENG
| Research House: MAYBANK | Price Call: HOLD | Target Price: 5.70 |
Tactical downgrade to Hold. The delay in projects roll-out, a likely setback at Sime Darby's yard, grey visibility at Turkmenistan and higher tax rates are the 4 key reasons that compel us to cut 2011-13 earnings forecasts by 9-29%. The slower execution will constrain available yard space and could see MMHE missing out some projects in 2012. Against this backdrop, we cut our TP to RM5.70 (20x 2013 PER; -29%). We also downgrade our call on the stock due to fair valuations at this juncture although we remain positive over its longer term prospects.
Maybank research (7 December 2011)
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Secures RM17.9mil conversion contract
Stock Name: CBIP
Company Name: CB INDUSTRIAL PRODUCT HOLDING
Company Name: CB INDUSTRIAL PRODUCT HOLDING
| Research House: AMMB | Price Call: BUY | Target Price: 5.00 |
MRCB JV with Ekovest confirmed as River of Life PDP
Stock Name: MRCB
Company Name: MALAYSIAN RESOURCES CORP
Company Name: MALAYSIAN RESOURCES CORP
| Research House: AMMB | Price Call: HOLD | Target Price: 2.13 |
CIMB Research has technical sell on Tebrau Teguh at 71.5 sen
Stock Name: TEBRAU
Company Name: TEBRAU TEGUH BHD
KUALA LUMPUR (Dec 7): CIMB Equities Research has a technical sell on Tebrau Teguh at 71.5 sen at which it is trading at a price-to-book value of 1.0 times.
It said on Wednesday the rebound from its August's low may have hit a snag near the 61.8% FR level. Prices are now struggling to stay above its key moving averages.
'If the 50-day SMA gives way, there is a high possibility that prices may fall towards 67 sen and 63 sen. The 38.2% FR level is also a magnet for prices,' it said.
CIMB Research said the technical landscape is deteriorating. MACD signal line has staged a negative crossover while RSI has hooked downward.
'Unless prices swing back above the 75 sen level, we would rather stick with the bear's camp. Put a buy stop at 77.5 sen, just in case. Unload on strength,' it said.
Company Name: TEBRAU TEGUH BHD
| Research House: CIMB | Price Call: SELL | Target Price: 0.715 |
KUALA LUMPUR (Dec 7): CIMB Equities Research has a technical sell on Tebrau Teguh at 71.5 sen at which it is trading at a price-to-book value of 1.0 times.
It said on Wednesday the rebound from its August's low may have hit a snag near the 61.8% FR level. Prices are now struggling to stay above its key moving averages.
'If the 50-day SMA gives way, there is a high possibility that prices may fall towards 67 sen and 63 sen. The 38.2% FR level is also a magnet for prices,' it said.
CIMB Research said the technical landscape is deteriorating. MACD signal line has staged a negative crossover while RSI has hooked downward.
'Unless prices swing back above the 75 sen level, we would rather stick with the bear's camp. Put a buy stop at 77.5 sen, just in case. Unload on strength,' it said.
ECM Libra: KLCI to trade in a range of 1,520 and 1,300 in 1H2012
Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD
Stock Name: LIONIND
Company Name: LION INDUSTRIES CORPORATION
KUALA LUMPUR (Dec 7): ECM Libra Investment Research expects the FBMKLCI to trade in a range of 1,520 and 1,300 points in 1H2012 before moving up towards 1,600 in 2H2012.
It said on Wednesday that Malaysia had outperformed in 2011 and was not cheap relative to other markets.
The research house said that with the outlook for domestic interest rates flattish with downward bias, it made sense to hold high dividend yield stocks while waiting for better buying opportunities.
It also advised investors to avoid stocks with high exposure to Europe as it expects a sharp depreciation in the Euro.
'Stocks which have underperformed the FBM KLCI over the past year, and which are closer to their bottom due to negative news or developments, offer more potential upside if there is a turnaround in their situation.'
'We have identified two such stocks, Tenaga Nasional ( Strong Buy, TP: RM5.95-7.96) and Lion Industries (, Strong Buy, TP: RM2.16),' it said.
Company Name: TENAGA NASIONAL BHD
| Research House: ECMLIBRA | Price Call: BUY | Target Price: 7.96 |
Stock Name: LIONIND
Company Name: LION INDUSTRIES CORPORATION
| Research House: ECMLIBRA | Price Call: BUY | Target Price: 2.16 |
KUALA LUMPUR (Dec 7): ECM Libra Investment Research expects the FBMKLCI to trade in a range of 1,520 and 1,300 points in 1H2012 before moving up towards 1,600 in 2H2012.
It said on Wednesday that Malaysia had outperformed in 2011 and was not cheap relative to other markets.
The research house said that with the outlook for domestic interest rates flattish with downward bias, it made sense to hold high dividend yield stocks while waiting for better buying opportunities.
It also advised investors to avoid stocks with high exposure to Europe as it expects a sharp depreciation in the Euro.
'Stocks which have underperformed the FBM KLCI over the past year, and which are closer to their bottom due to negative news or developments, offer more potential upside if there is a turnaround in their situation.'
'We have identified two such stocks, Tenaga Nasional ( Strong Buy, TP: RM5.95-7.96) and Lion Industries (, Strong Buy, TP: RM2.16),' it said.
CIMB Research has technical sell on M-Mode at 43.5 sen
Stock Name: MMODE
Company Name: M-MODE BHD
KUALA LUMPUR (Dec 7): CIMB Equities Research has a technical sell on M-MODE BHD [] at 43.5 sen at which it is trading at a price-to-book value of 1.8 times.
It said on Wednesday that M-Mode is consolidating in a huge ascending wedge pattern.
'Therefore, we are worried about its follow through momentum. If prices fail to surpass the recent high of 44.5 sen soon, there is a high possibility that the candles may ease towards the support trend line,' it said.
CIMB Research said the bearish divergence on the MACD indicator suggests that the bulls are losing steam. RSI too has hooked downward.
The research house said aggressive traders may want to lock in some profits now while others should wait for a break below the wedge support (now at 40 sen) before joining the bear's camp. Next support levels are 37 sen and 35 sen.
Company Name: M-MODE BHD
| Research House: CIMB | Price Call: TRADING SELL | Target Price: 0.435 |
KUALA LUMPUR (Dec 7): CIMB Equities Research has a technical sell on M-MODE BHD [] at 43.5 sen at which it is trading at a price-to-book value of 1.8 times.
It said on Wednesday that M-Mode is consolidating in a huge ascending wedge pattern.
'Therefore, we are worried about its follow through momentum. If prices fail to surpass the recent high of 44.5 sen soon, there is a high possibility that the candles may ease towards the support trend line,' it said.
CIMB Research said the bearish divergence on the MACD indicator suggests that the bulls are losing steam. RSI too has hooked downward.
The research house said aggressive traders may want to lock in some profits now while others should wait for a break below the wedge support (now at 40 sen) before joining the bear's camp. Next support levels are 37 sen and 35 sen.
Wah Seong price target cut, stock falls
Stock Name: WASEONG
Company Name: WAH SEONG CORPORATION BHD
Wah Seong Corp, a Malaysian pipe-coating company, fell to a one-month low in Kuala Lumpur trading after HwangDBS Vickers Research Sdn Bhd cut its price target to RM2.50 after losing potential contracts in Australia.
The stock dropped 1.5 percent to RM1.96 at 9:15 a.m. local time, set for its lowest close since Oct. 3. -- Bloomberg
Company Name: WAH SEONG CORPORATION BHD
| Research House: HWANGDBS | Price Call: HOLD | Target Price: 2.50 |
Wah Seong Corp, a Malaysian pipe-coating company, fell to a one-month low in Kuala Lumpur trading after HwangDBS Vickers Research Sdn Bhd cut its price target to RM2.50 after losing potential contracts in Australia.
The stock dropped 1.5 percent to RM1.96 at 9:15 a.m. local time, set for its lowest close since Oct. 3. -- Bloomberg
CIMB Research has technical sell on UEM Land at RM2.16
Stock Name: UEMLAND
Company Name: UEM LAND HOLDINGS BHD
KUALA LUMPUR (Dec 7): CIMB Equities Research has a technical sell on UEM Land Holdings at RM2.16 at which it is trading at a FY13 price-to-earnings 23.5 times and price-to-book value of 2.0 times.
It said on Wednesday UEM Land has been gyrating in a diagonal triangle pattern for the past few weeks.
'Looking at the chart, it seems that the rebound from its September's low may have exhausted.
'Selling pressure should accelerate once the candles slip below its 30-day SMA, which is now at RM2.14. The next downleg will drag prices towards RM2.06 and RM1.91. Meanwhile, resistance is at RM2.22-RM2.30.Put a buy stop at RM2.38,' it said.
CIMB Research said the tndicators are showing signs of exhaustion. MACD histogram bars have slipped into the red while RSI has hooked downward.
Company Name: UEM LAND HOLDINGS BHD
| Research House: CIMB | Price Call: TRADING SELL | Target Price: 2.16 |
KUALA LUMPUR (Dec 7): CIMB Equities Research has a technical sell on UEM Land Holdings at RM2.16 at which it is trading at a FY13 price-to-earnings 23.5 times and price-to-book value of 2.0 times.
It said on Wednesday UEM Land has been gyrating in a diagonal triangle pattern for the past few weeks.
'Looking at the chart, it seems that the rebound from its September's low may have exhausted.
'Selling pressure should accelerate once the candles slip below its 30-day SMA, which is now at RM2.14. The next downleg will drag prices towards RM2.06 and RM1.91. Meanwhile, resistance is at RM2.22-RM2.30.Put a buy stop at RM2.38,' it said.
CIMB Research said the tndicators are showing signs of exhaustion. MACD histogram bars have slipped into the red while RSI has hooked downward.
RHB Research positive on construction sector, MRCB FV RM2.55
Stock Name: MRCB
Company Name: MALAYSIAN RESOURCES CORP
KUALA LUMPUR (Dec 7): RHB Research Institute has turned positive on the CONSTRUCTION [] sector as there is now even more urgency for the Government to expedite the roll-out of various public projects.
The research house said on Wednesday this move by the government to pump prime the local economy to shield it against the increased risk of the global economy slipping into a double-dip recession.
'For MRCB, an additional trading angle also comes from the strong likelihood of it being offered a dual role, i.e. project manager and developer, by parent Employees Provident Fund (EPF) in the redevelopment of the 2,680-acre Rubber Research Institute (RRI) land in Sungai Buloh.
'Also, a 60:40 JV between Ekovest and MRCB is poised to bag the beautification portion worth RM1bn of the initial phase of the River of Life project. Indicative fair value for MRCB is RM2.55 based on 'sum of parts',' RHB Research said.
Company Name: MALAYSIAN RESOURCES CORP
| Research House: RHB | Price Call: BUY | Target Price: 2.55 |
KUALA LUMPUR (Dec 7): RHB Research Institute has turned positive on the CONSTRUCTION [] sector as there is now even more urgency for the Government to expedite the roll-out of various public projects.
The research house said on Wednesday this move by the government to pump prime the local economy to shield it against the increased risk of the global economy slipping into a double-dip recession.
'For MRCB, an additional trading angle also comes from the strong likelihood of it being offered a dual role, i.e. project manager and developer, by parent Employees Provident Fund (EPF) in the redevelopment of the 2,680-acre Rubber Research Institute (RRI) land in Sungai Buloh.
'Also, a 60:40 JV between Ekovest and MRCB is poised to bag the beautification portion worth RM1bn of the initial phase of the River of Life project. Indicative fair value for MRCB is RM2.55 based on 'sum of parts',' RHB Research said.
HLIB Research 7 December 2011 (Market View; MRCB; Traders Brief)
Stock Name: MRCB
Company Name: MALAYSIAN RESOURCES CORP
Company Name: MALAYSIAN RESOURCES CORP
| Research House: HLG | Price Call: BUY | Target Price: 2.22 |
Liquidity Injection, Bad Omen Or Good Karma?
'''' Similar move in Mar 08 resulted in a 1-1/2-mth rally but plunged thereafter, especially after Lehman collapse.
'''' Macro conditions are different, unlikely to see meltdown.''
'''' If history repeats, CI could hit 1600-1632 by CNY.
'''' Though history unlikely to follow scrip, potential for ST positive market exist given generally positive returns in Dec and CNY, local funds underinvested and pre-election rally.
'''' Announcement of GE may see selling ahead but also provide opportunity if GE results are better-than-expected.
'''' 6-mth later, though another collapse is unlikely, investors could turn jittery again given execution risk from EU, especially if the market had a good run.
'''' Technical readings suggest inflection point for a ST more positive market is 1503 with target projection of 1600.
'''' Maintain end 2011 and 2012 targets at 1440 and 1555 respectively and remain defensive but market could overshoot our 2012 target during 1H of next year.
'''' If trigger inflection point, stocks (from our ICPM - see our picks in the full report) with decent fundamentals, 3-mth avg daily vol of > 4m, Beta > 1.5 and potential return > 10% likely to outperform.
'''' Although index-linked heavyweights will lead, we also enlisted stocks (see full report) from our universe that are expected to outperform the general market.
''
MRCB (BUY)
Breathing life into KL river
'''' Ekovest-MRCB JV (60:40 stake) has entered into a PDP agreement with the Government for the River of Life (RoL) project. The appointment as the PDP is for a 3-year period and the JV will earn a maximum fee of 1% of the total estimated RoL project cost of RM2.2bn and will also enjoy monetary incentives with respect to the river rehabilitation and beautification works.
'''' The PDP fee is 1% and translates to an immaterial sum of RM22m. However, we can reasonably assume that the JV will not bear the risks of cost overrun or LAD penalty. We view this positively as we are not too bullish on the river cleaning stage as it involves too many government divisions (>20) and is faced with difficulties in educating the public on proper waste disposal.
'''' Our FY11-FY13 earnings were tweaked downwards by between -1% to -8% to reflect slower construction/ property progress. However, we maintain a BUY call on MRCB with a higher TP of RM2.22 based on SOP valuation. The higher TP is largely due to rolling over the assigned construction P/E to next 2-year's average earnings.
''
KLCI: Choppy ahead of EU summit
'''' Ahead of the EU summit and the S&P's downgrade warnings on euro zone countries en masse, the local bourse will waver for the rest of this week. Immediate resistance stays at 200-d SMA (1503 pts) whilst supports fall on mid Bollinger band (1465) and 100-day SMA (1471) levels.
''
TRC: Poised for a triangle breakout
'''' TRC is still consolidating in a huge triangle pattern but the stock is ripe for a stronger rebound, once the 50-day and mid Bollinger band (both at 0.62 now) are breached. Expect momentum to pick up strongly toward RM0.70 (38.2% FR) and RM0.75 (downtrend line from 2008) once the candles swing above the RM0.64 level. Supports are RM0.59 (uptrend line) and RM0.57 (61.8% FR). Cut loss below RM0.57.
December 6, 2011
Blasting Their Way Through
Stock Name: HIAPTEK
Company Name: HIAP TECK VENTURE BHD
Company Name: HIAP TECK VENTURE BHD
| Research House: OSK | Price Call: HOLD | Target Price: 0.80 |
3QFY12: Sailing Strong
Stock Name: SAPCRES
Company Name: SAPURACREST PETROLEUM BHD
Company Name: SAPURACREST PETROLEUM BHD
| Research House: ECMLIBRA | Price Call: TRADING BUY | Target Price: 4.60 |
HLIB Research 6 Dec 2011 (BToto; TRC; DRB; Traders Brief)
Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD
Stock Name: TRC
Company Name: TRC SYNERGY BHD
Company Name: BERJAYA SPORTS TOTO BHD
| Research House: HLG | Price Call: BUY | Target Price: 4.92 |
Stock Name: TRC
Company Name: TRC SYNERGY BHD
| Research House: HLG | Price Call: BUY | Target Price: 0.69 |
BToto (BUY)
Consistent On Jackpot, Falling on Lotto
'' BToto will be releasing its 2QFY12 results on 12th Dec (Mon). Its 4D Jackpot game has shown good performance with the ability to maintain at a range of RM1.5-2.1m sales per draw for the past 6 months since its launch. In average, 4D Jackpot sales per draw was RM1.7m.
'' To date, the market share for BToto's 4D Jackpot was 45.5% vs. Magnum's 54.5%. However, the impressive performance from 4D Jackpot has also resulted in higher-than-expected cannibalization on BToto's lotto games.
'' Our regression results showed that the impact has widened to circa RM500-600k per draw. Despite the larger-than-expected cannibalization, the 4D Jackpot would still have added RM1.1-1.2m per draw to overall non-4D sales.
'' Hence, we have lowered our assumption of RM1.3m net sales per draw under the 4D Jackpot previously to RM1.0m as the proxy to the larger-than-expected cannibalization on lotto games.
'' FY12-14 net profit forecast reduced 1-1.3% to reflect a more conservative view by factoring in the additional cannibalization on BToto's lotto games.
'' TP reduced to RM4.92 based on DCF. Maintain Buy given total potential return of 23%.
''
TRC Synergy (BUY)
2nd Putrajaya housing project
'' TRC has clinched a RM38.1m Putrajaya housing project from Putrajaya Holdings for the construction of 14 units 2-storey terrace house and 14 units 2-storey semi-D house at Precinct 14-3; and 72 units 2-storey terrace house at Precinct 14-6A.
'' The order is TRC's second housing project from Putrajaya Holdings in FY11 after bagging a similar job for semi-D homes in Precinct 8 during April, bringing its YTD order wins of >RM500m. Overall, total outstanding order book is estimated at ~RM1.47bn, translating to ~3.9x FY10's revenue and ~5.2x order book-to-market cap ratio.
'' We have cut FY11 earnings by another -7% to RM16.1m from RM17.4m previously while maintaining FY12-FY13 earnings.
'' The execution of the LRT project has been a steep learning curve for TRC. However, we maintain our BUY call with a TP of RM0.69 in view of its growing order book which is diversifying away from the LRT project and strong balance sheet with net cash of ~26 sen/share.
''
DRB Hicom (BUY)
DRB Hicom To Acquire Proton
'' According to Business Times, three parties have submitted a bid to Khazanah's stake in Proton. Among the bidders are DRB-Hicom and Naza. The price was believed to be in the range of RM6-7 per share.
'' Khazanah currently has 42.74% shares in Proton. Assuming Khazanah paring down its entire stake, the total cost is estimated to range RM1.41 -1.64bn.
'' Based on Proton's latest quarterly report, Proton's Book Value/share of RM9.81 and NTA/share of RM7.62.
'' We opined that DRB could harvest synergistic values by tying-up its existing business units with Proton. DRB already has existing close business relation with Proton (EON ' Proton Edar, Tanjung Malim land development).
'' DRB will be able to ride on Proton's existing automotive manufacturing license, effectively expanding its automotive value chain from the existing automotive assembly, distribution and sales.
'' However, we have upmost concern on the turnaround of Proton's 100% owned Lotus Group, which incurred huge losses and needed substantial capex for its turnaround plan.
'' We are unsure if there are covenants or conditions of the sales, which may impede DRB's flexibility in restructuring Proton.
'' Pricing and payment method could also become a concern given the potential of huge EPS dilution. However, it could be mitigated if Lotus is not part of the deal.
'' Forecasts remained unchanged. Maintain target price at RM2.90 (pending review) based on 20% discount to SOP.
''
KLCI: More sideways trading
'' The KLCI's powerful rebound of 4% last week has injected some optimism to our market. Nevertheless, with the sighting of three Doji stars and ahead of the EU summit, the KLCI is likely to trade sideways within the 100-d SMA (1473) and 200-d SMA range (1503).
UNIMECH: Upside targets at RM1.00-1.08
'' UNIMECH has been climbing steadily along the uptrend channel since its trough in mid Sep by overcoming resistance of 100-d SMA (RM0.81), 200-d SMA (RM0.83) and mid Bollinger band (RM0.85) levels. Resistance levels are RM0.94-1.00. Significant resistance is near RM1.05 (upper channel ' weekly chart). Supports are RM0.80-0.84. Cut loss below RM0.78. ''
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