Stock Name: TA
Company Name: TA ENTERPRISE BHD
Company Name: TA ENTERPRISE BHD
| Research House: NETRESEARCH | Price Call: HOLD | Target Price: 0.60 |
December 30, 2011
BERJAYA CORPORATION BERHAD - 2QFY12 RESULTS - BUMPY ROAD AHEAD
Stock Name: BJCORP
Company Name: BERJAYA CORPORATION BHD
Company Name: BERJAYA CORPORATION BHD
| Research House: CIMB | Price Call: HOLD | Target Price: 1.00 |
Affin Research lowers UMW fair value from RM7.90 to RM7.25
Stock Name: UMW
Company Name: UMW HOLDINGS BHD
KUALA LUMPUR (Dec 30): Affin Investment Research lowered its sum-of-parts based fair value from RM7.90 a share to RM7.25 after its earnings downgrade.
It said on Friday that at its fair value, the implied valuation of 11.8 times CY12 EPS is at parity to the stock's average five-year price-to-earnings ratio (PER).
'Whilst earnings forecasts were cut, we left our dividend forecasts unchanged. We opine our assumed dividend payout ratios of 65% for FY12 and 61% for FY13 are reasonable, predicated on dividend payouts of between 61%-66% over FY09-10,' it said.
Affin Research said at the current share price, investors can look forward to an attractive net dividend yield of 5.8% for 2012.
Company Name: UMW HOLDINGS BHD
| Research House: AFFIN | Price Call: HOLD | Target Price: 7.25 |
KUALA LUMPUR (Dec 30): Affin Investment Research lowered its sum-of-parts based fair value from RM7.90 a share to RM7.25 after its earnings downgrade.
It said on Friday that at its fair value, the implied valuation of 11.8 times CY12 EPS is at parity to the stock's average five-year price-to-earnings ratio (PER).
'Whilst earnings forecasts were cut, we left our dividend forecasts unchanged. We opine our assumed dividend payout ratios of 65% for FY12 and 61% for FY13 are reasonable, predicated on dividend payouts of between 61%-66% over FY09-10,' it said.
Affin Research said at the current share price, investors can look forward to an attractive net dividend yield of 5.8% for 2012.
December 29, 2011
Maybulk advances on rising volume despite cautious outlook
KUALA LUMPUR (Dec 29): MALAYSIAN BULK CARRIERS BHD [] (Maybulk) share price advanced in late afternoon trade on Thursday, climbing to a high of RM1.59, despite concerns about a tough 2012 environment for the dry bulk shipping industry.
At 3.57pm, Maybulk was up 13 sen to RM1.58. There were 5.09 million shares done at prices ranging from RM1.46 to RM1.59.
In a recent report, TA Securities Research said its Underweight stance on the dry bulk shipping industry remained intact as it believed the global shipping market was posed for a tough 2012.
'Indeed, Malaysian Bulk Carriers Berhad (Maybulk)'s management foresee a challenging operating environment going forward. Capacity glut and unstable operating costs, primarily due to volatile bunker costs will continue to threaten shipping line profit margins,' it said.
TA Research said the situation may be exacerbated by unusual weather conditions and natural disasters.
Due to the lacklustre industry outlook and the industry's chronically low profitability, it believed the share price appreciation potential is limited for Maybulk. It added the recurring problem in the shipping sector was still the oversized orderbook as there would be another wave of big ships coming to the industry next year.
'We reiterate our Sell recommendation on Maybulk with a target price of RM1.10 based on Sum-of-Parts valuation methodology. We believe Maybulk appears fully valued within the sector with the recent increase in share prices.
'Potential catalysts to upgrade our target price include: (i) a strong and sustained rebound in Baltic Dry Index, (ii) a faster-than-expected economic recovery; and (iii) better than expected earnings contribution from POSH (PACC Offshore Services Holdings Pte Ltd),' TA Research said.
Maybulk advances on rising volume despite cautious outlook
Stock Name: MAYBULK
Company Name: MALAYSIAN BULK CARRIERS BHD
Larger Smaller Reset KUALA LUMPUR (Dec 29): MALAYSIAN BULK CARRIERS BHD [] (Maybulk) share price advanced in late afternoon trade on Thursday, climbing to a high of RM1.59, despite concerns about a tough 2012 environment for the dry bulk shipping industry.
At 3.57pm, Maybulk was up 13 sen to RM1.58. There were 5.09 million shares done at prices ranging from RM1.46 to RM1.59.
In a recent report, TA Securities Research said its Underweight stance on the dry bulk shipping industry remained intact as it believed the global shipping market was posed for a tough 2012.
'Indeed, Malaysian Bulk Carriers Berhad (Maybulk)'s management foresee a challenging operating environment going forward. Capacity glut and unstable operating costs, primarily due to volatile bunker costs will continue to threaten shipping line profit margins,' it said.
TA Research said the situation may be exacerbated by unusual weather conditions and natural disasters.
Due to the lacklustre industry outlook and the industry's chronically low profitability, it believed the share price appreciation potential is limited for Maybulk. It added the recurring problem in the shipping sector was still the oversized orderbook as there would be another wave of big ships coming to the industry next year.
'We reiterate our Sell recommendation on Maybulk with a target price of RM1.10 based on Sum-of-Parts valuation methodology. We believe Maybulk appears fully valued within the sector with the recent increase in share prices.
'Potential catalysts to upgrade our target price include: (i) a strong and sustained rebound in Baltic Dry Index, (ii) a faster-than-expected economic recovery; and (iii) better than expected earnings contribution from POSH (PACC Offshore Services Holdings Pte Ltd),' TA Research said.
Company Name: MALAYSIAN BULK CARRIERS BHD
| Research House: TA | Price Call: SELL | Target Price: 1.10 |
Larger Smaller Reset KUALA LUMPUR (Dec 29): MALAYSIAN BULK CARRIERS BHD [] (Maybulk) share price advanced in late afternoon trade on Thursday, climbing to a high of RM1.59, despite concerns about a tough 2012 environment for the dry bulk shipping industry.
At 3.57pm, Maybulk was up 13 sen to RM1.58. There were 5.09 million shares done at prices ranging from RM1.46 to RM1.59.
In a recent report, TA Securities Research said its Underweight stance on the dry bulk shipping industry remained intact as it believed the global shipping market was posed for a tough 2012.
'Indeed, Malaysian Bulk Carriers Berhad (Maybulk)'s management foresee a challenging operating environment going forward. Capacity glut and unstable operating costs, primarily due to volatile bunker costs will continue to threaten shipping line profit margins,' it said.
TA Research said the situation may be exacerbated by unusual weather conditions and natural disasters.
Due to the lacklustre industry outlook and the industry's chronically low profitability, it believed the share price appreciation potential is limited for Maybulk. It added the recurring problem in the shipping sector was still the oversized orderbook as there would be another wave of big ships coming to the industry next year.
'We reiterate our Sell recommendation on Maybulk with a target price of RM1.10 based on Sum-of-Parts valuation methodology. We believe Maybulk appears fully valued within the sector with the recent increase in share prices.
'Potential catalysts to upgrade our target price include: (i) a strong and sustained rebound in Baltic Dry Index, (ii) a faster-than-expected economic recovery; and (iii) better than expected earnings contribution from POSH (PACC Offshore Services Holdings Pte Ltd),' TA Research said.
Alam Maritim edges up on contract from S'wak Shell
Stock Name: ALAM
Company Name: ALAM MARITIM RESOURCES BHD
KUALA LUMPUR (Dec 29): ALAM MARITIM RESOURCES BHD [] shares edged up on Thursday after its unit Alam Maritim (M) Sdn Bhd received a letter of award from Sarawak Shell Bhd for the modules offshore transportation and installation contract valued at RM29.80 million.
At 9.15am, Alam added 1.5 sen to 75.5 sen with 142,100 shares done.
The nine-month contract started the current fourth quarter and the expected date of completion was May 2012.
Affin Investment Bank Bhd Research said in a note Dec 29 said it was positive on the contract win, which was inline with management's intention to move up the O&G value chain into the transportation and installation segment.
However, the research house maintained its FY11-13 net earnings forecasts as it had imputed RM50 million of transportation and installation contract win for FY11.
'Maintain ADD on Alam Maritim with an unchanged TP of RM0.87, based on 12x CY12 earnings.
'Key re-rating catalysts are winning of long-term OSV charter contracts, award of SOGT pipelaying work and/or other major offshore installation & CONSTRUCTION [] (OIC) contracts,' it said.
''
Company Name: ALAM MARITIM RESOURCES BHD
| Research House: AFFIN | Price Call: BUY | Target Price: 0.87 |
KUALA LUMPUR (Dec 29): ALAM MARITIM RESOURCES BHD [] shares edged up on Thursday after its unit Alam Maritim (M) Sdn Bhd received a letter of award from Sarawak Shell Bhd for the modules offshore transportation and installation contract valued at RM29.80 million.
At 9.15am, Alam added 1.5 sen to 75.5 sen with 142,100 shares done.
The nine-month contract started the current fourth quarter and the expected date of completion was May 2012.
Affin Investment Bank Bhd Research said in a note Dec 29 said it was positive on the contract win, which was inline with management's intention to move up the O&G value chain into the transportation and installation segment.
However, the research house maintained its FY11-13 net earnings forecasts as it had imputed RM50 million of transportation and installation contract win for FY11.
'Maintain ADD on Alam Maritim with an unchanged TP of RM0.87, based on 12x CY12 earnings.
'Key re-rating catalysts are winning of long-term OSV charter contracts, award of SOGT pipelaying work and/or other major offshore installation & CONSTRUCTION [] (OIC) contracts,' it said.
''
Faber gains on concession extension news
Stock Name: FABER
Company Name: FABER GROUP BHD
Faber Group Bhd, a Malaysian hospital support-services provider and property group, rose the most in more than two months after the Star newspaper reported that its unit may get extension for a support-services concession from the government.
The stock gained 5.4 percent to RM1.55 at 9:45 a.m. local time in Kuala Lumpur trading, set for its steepest increase since Oct. 21. -- Bloomberg
Company Name: FABER GROUP BHD
| Research House: OSK | Price Call: TRADING BUY | Target Price: 2.24 |
Faber Group Bhd, a Malaysian hospital support-services provider and property group, rose the most in more than two months after the Star newspaper reported that its unit may get extension for a support-services concession from the government.
The stock gained 5.4 percent to RM1.55 at 9:45 a.m. local time in Kuala Lumpur trading, set for its steepest increase since Oct. 21. -- Bloomberg
'Compelling regional growth' for Maybank
Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD
The acquisition of Singapore's banking franchise, Kim Eng Holdings, and the longer-term growth potential of Bank Internasional Indonesia (BII), will set the stage for a potentially compelling regional growth for Malayan Banking Bank Bhd (Maybank).
OSK Research said the bank's latest quarter net profit year-on-year (y-o-y) growth of 25.1 per cent and quarter-on-quarter growth of 11.4 per cent, respectively, far outpaced the industry's aggregate of 15.6 per cent and 8.2 per cent, respectively.
"Its earnings were propelled by an industry-beating loans growth of 17.6 per cent, y-o-y, the hefty 62.1 per cent drop in loans loss provision and maiden contribution from Kim Eng," OSK Research said in a note today.
It said BII was also aggressively expanding via new hiring and enlarging its branch network by 43 per cent over the next one-and-a-half years.
The research firm said BII's operating leverage would begin to flow through by financial year 2012 and financial year 2013 on a more stable cost base while generate new revenue from its enlarged presence.
"This would naturally help bring down the cost-to-income ratio closer to the industry average, driven largely by revenue growth from its enhanced infrastructure investments, as costs stabilises," it said.
OSK Research is maintaining a "Buy" call and fair value of RM9.60 on Maybank given the qualities provided by the bank and its alluring 7.6 per cent dividend yield which is the highest among domestic banking stocks. -- Bernama
Company Name: MALAYAN BANKING BHD
| Research House: OSK | Price Call: BUY | Target Price: 9.60 |
The acquisition of Singapore's banking franchise, Kim Eng Holdings, and the longer-term growth potential of Bank Internasional Indonesia (BII), will set the stage for a potentially compelling regional growth for Malayan Banking Bank Bhd (Maybank).
OSK Research said the bank's latest quarter net profit year-on-year (y-o-y) growth of 25.1 per cent and quarter-on-quarter growth of 11.4 per cent, respectively, far outpaced the industry's aggregate of 15.6 per cent and 8.2 per cent, respectively.
"Its earnings were propelled by an industry-beating loans growth of 17.6 per cent, y-o-y, the hefty 62.1 per cent drop in loans loss provision and maiden contribution from Kim Eng," OSK Research said in a note today.
It said BII was also aggressively expanding via new hiring and enlarging its branch network by 43 per cent over the next one-and-a-half years.
The research firm said BII's operating leverage would begin to flow through by financial year 2012 and financial year 2013 on a more stable cost base while generate new revenue from its enlarged presence.
"This would naturally help bring down the cost-to-income ratio closer to the industry average, driven largely by revenue growth from its enhanced infrastructure investments, as costs stabilises," it said.
OSK Research is maintaining a "Buy" call and fair value of RM9.60 on Maybank given the qualities provided by the bank and its alluring 7.6 per cent dividend yield which is the highest among domestic banking stocks. -- Bernama
'Buy' calls on Axiata, Telekom Malaysia
Stock Name: TM
Company Name: TELEKOM MALAYSIA BHD
OSK Research Sdn Bhd has maintained a "buy" call on Axiata Group Bhd with a target price of RM5.60.
In a research statement today, OSK said in the face of global economic uncertainties, the Axiata management has undertaken good strategic initiatives to keep operating cost lean.
"Axiata is also promoting sharing of infrastructure on the back of accelerating data usage, and it remains as an inexpensive regional mobile exposure," it said.
OSK said a major re-rating catalyst would come from a higher dividend payout.
Meanwhile, the research firm has rated Telekom Malaysia Bhd (TM) a "buy" with target price of RM5.15.
It said TM's core earnings were expected to pick up in financial year 2012 as Unifi's footprint expanded to 1.3 million premises.
"We also gather from TM that Unifi's base rose above 200,000 at end-November 2011, beating the management's own expectations and our estimate," it said.
OSK said TM would also benefit from the ramp-up in wholesale contribution following the inking of High-Speed Broadband wholesale agreements with Maxis and P1 this year.
It said the stock remained one of its top picks for exposure to the telecommunications sector.
"Its foreign shareholding level rose 19 per cent at end-October, a level last seen in 2008, reflecting renewed optimism on the stock," it said. -- Bernama
Company Name: TELEKOM MALAYSIA BHD
| Research House: OSK | Price Call: BUY | Target Price: 5.15 |
OSK Research Sdn Bhd has maintained a "buy" call on Axiata Group Bhd with a target price of RM5.60.
In a research statement today, OSK said in the face of global economic uncertainties, the Axiata management has undertaken good strategic initiatives to keep operating cost lean.
"Axiata is also promoting sharing of infrastructure on the back of accelerating data usage, and it remains as an inexpensive regional mobile exposure," it said.
OSK said a major re-rating catalyst would come from a higher dividend payout.
Meanwhile, the research firm has rated Telekom Malaysia Bhd (TM) a "buy" with target price of RM5.15.
It said TM's core earnings were expected to pick up in financial year 2012 as Unifi's footprint expanded to 1.3 million premises.
"We also gather from TM that Unifi's base rose above 200,000 at end-November 2011, beating the management's own expectations and our estimate," it said.
OSK said TM would also benefit from the ramp-up in wholesale contribution following the inking of High-Speed Broadband wholesale agreements with Maxis and P1 this year.
It said the stock remained one of its top picks for exposure to the telecommunications sector.
"Its foreign shareholding level rose 19 per cent at end-October, a level last seen in 2008, reflecting renewed optimism on the stock," it said. -- Bernama
OSK upbeat on AirAsia's outlook
Stock Name: AIRASIA
Company Name: AIRASIA BHD
OSK Research Sdn Bhd is optimistic on AirAsia Bhd's outlook for 2012 on anticipation that earnings will climb 21 per cent on the back of lower fuel prices amid resilient growth in low-cost travel.
OSK said as low-cost air travel dominated Asean skies with 32 per cent penetration, AirAsia was the best proxy to this resilient segment during times of economic uncertainty.
"AirAsia, which stands to benefit from its two new hubs in Manila and Tokyo,will also get an earnings boost from its fruitful AirAsia Expedia joint venture and its ability to monetise its training academy," it said in an investment note
today.
It said it expected more yields upside for AirAsia going forward as the competitive barriers between it and Malaysian Airlines (MAS) came down after the two agreed to collaborate.
"Under the tie-up, MAS and AirAsia will serve their own target markets and steer clear of head-on competition via heavy airfare discounts.
"AirAsia would be able to reap more benefits from the collaboration following the cessation of Firefly's jet services," it said.
OSK has maintained its "buy" call on AirAsia with a fair value of RM4.57. -- BERNAMA
Company Name: AIRASIA BHD
| Research House: OSK | Price Call: BUY | Target Price: 4.57 |
OSK Research Sdn Bhd is optimistic on AirAsia Bhd's outlook for 2012 on anticipation that earnings will climb 21 per cent on the back of lower fuel prices amid resilient growth in low-cost travel.
OSK said as low-cost air travel dominated Asean skies with 32 per cent penetration, AirAsia was the best proxy to this resilient segment during times of economic uncertainty.
"AirAsia, which stands to benefit from its two new hubs in Manila and Tokyo,will also get an earnings boost from its fruitful AirAsia Expedia joint venture and its ability to monetise its training academy," it said in an investment note
today.
It said it expected more yields upside for AirAsia going forward as the competitive barriers between it and Malaysian Airlines (MAS) came down after the two agreed to collaborate.
"Under the tie-up, MAS and AirAsia will serve their own target markets and steer clear of head-on competition via heavy airfare discounts.
"AirAsia would be able to reap more benefits from the collaboration following the cessation of Firefly's jet services," it said.
OSK has maintained its "buy" call on AirAsia with a fair value of RM4.57. -- BERNAMA
'Neutral' call on Alam Maritim stays
Stock Name: ALAM
Company Name: ALAM MARITIM RESOURCES BHD
OSK Research Sdn Bhd has maintained a 'neutral' call on investment holding company, Alam Maritim Resources Bhd, at an
unchanged price of 85 sen.
In a research note today, OSK said in comparison with other listed vessel operators like Perdana Petroleum, Petra Energy and Tanjung Offshore, Alam Maritim has outperformed its peers in terms of new contracts and quarterly earnings performance.
"The results of its peers were mostly flat or were in red ink quarter after quarter as a result of poor vessels utilisation and dearth of new contracts.
"Although we think Alam Maritim is out-performing its peers, this
development has been partly factored into its share price valuation," it said.
OSK said it was positive on the company but maintained its forecast for financial year 2011-12 results.
It said Alam Maritim was expected to clinch more long-term vessel charters in the future.
"About 50 per cent of its vessels are now on long-term charters averaging about a year while the balance 50 per cent are on spot charter.
"Hence, although its utilisation rate fluctuates monthly, we understand that on average it is still hovering at 60 to 80 per cent," it said.
OSK said judging from the industry's current operating environment, the rate was reasonable in view of the fact that Petroliam Nasional Bhd and its production-sharing contractors were still handing out minimal new vessel contracts. -- BERNAMA
Company Name: ALAM MARITIM RESOURCES BHD
| Research House: OSK | Price Call: HOLD | Target Price: 0.85 |
OSK Research Sdn Bhd has maintained a 'neutral' call on investment holding company, Alam Maritim Resources Bhd, at an
unchanged price of 85 sen.
In a research note today, OSK said in comparison with other listed vessel operators like Perdana Petroleum, Petra Energy and Tanjung Offshore, Alam Maritim has outperformed its peers in terms of new contracts and quarterly earnings performance.
"The results of its peers were mostly flat or were in red ink quarter after quarter as a result of poor vessels utilisation and dearth of new contracts.
"Although we think Alam Maritim is out-performing its peers, this
development has been partly factored into its share price valuation," it said.
OSK said it was positive on the company but maintained its forecast for financial year 2011-12 results.
It said Alam Maritim was expected to clinch more long-term vessel charters in the future.
"About 50 per cent of its vessels are now on long-term charters averaging about a year while the balance 50 per cent are on spot charter.
"Hence, although its utilisation rate fluctuates monthly, we understand that on average it is still hovering at 60 to 80 per cent," it said.
OSK said judging from the industry's current operating environment, the rate was reasonable in view of the fact that Petroliam Nasional Bhd and its production-sharing contractors were still handing out minimal new vessel contracts. -- BERNAMA
A niche luxury lifestyle developer
Stock Name: E&O
Company Name: EASTERN & ORIENTAL BHD
Company Name: EASTERN & ORIENTAL BHD
| Research House: ZJ | Price Call: BUY | Target Price: 1.60 |
December 28, 2011
RHBInvest Research Highlights 28th December 2011
Stock Name: WCT
Company Name: WCT BHD
Company Name: WCT BHD
| Research House: RHB | Price Call: BUY | Target Price: 2.08 |
28th December 2011
| Top Story Motor Sector ' An Uphill Climb Underweight Sector Update '' The more cautious outlook and slowing economy in 2012 will likely see households and businesses alike reassess spending on big-ticket items. '' We expect total industry volumes (TIV) to remain relatively flat at 607,000 units in 2012 (2011E: 604,000). '' We see some selective supply constraints of certain models continuing into 1Q12 arising from the flooding in Thailand , with Honda the most severely affected.
|
JCY climbs to 13-month at midday on strong HDD demand
Stock Name: JCY
Company Name: JCY INTERNATIONAL BERHAD
KUALA LUMPUR (Dec 28): Shares of JCY International Bhd rose to a 13'' month high at midday on Wednesday on sustained buying interest as the hard disk drive (HDD) manufacturer was not affected by the recent severe Thai floods and due to strong demand.
At midday, it was up 3.5 sen to RM1. There were 17.19 million shares transacted at prices ranging from 97 sen to RM1.01.
OSK Research had on Dec 23 upgraded the TECHNOLOGY [] sector a Neutral as the worst impact from the Thai floods should be over while restoration of production in Thailand was going on at full steam.
The research house had said it came to understand that Western Digital and Seagate had used this opportunity to push for higher prices of their HDD products (50%-100%) whilst cutting down warranty periods
' We are keeping our earnings forecasts unchanged for Engtek and Notion but revising our valuation from 0.7 times to 0.9 times price-to-book value. They are both upgraded to Neutral from Sell. Engtek at RM1.52 and Notion at RM1.69.
' As for JCY, we are raising our earnings forecast by more than 100% as their equipment was unscathed. Valuation switched from 0.9 times PBV to 8 times FY12 PER. Call upgraded to Trading Buy with FV of RM1.30. We understand that there are rumours of a strong price push over the next one month,' it said.
''
Company Name: JCY INTERNATIONAL BERHAD
| Research House: OSK | Price Call: BUY | Target Price: 1.30 |
KUALA LUMPUR (Dec 28): Shares of JCY International Bhd rose to a 13'' month high at midday on Wednesday on sustained buying interest as the hard disk drive (HDD) manufacturer was not affected by the recent severe Thai floods and due to strong demand.
At midday, it was up 3.5 sen to RM1. There were 17.19 million shares transacted at prices ranging from 97 sen to RM1.01.
OSK Research had on Dec 23 upgraded the TECHNOLOGY [] sector a Neutral as the worst impact from the Thai floods should be over while restoration of production in Thailand was going on at full steam.
The research house had said it came to understand that Western Digital and Seagate had used this opportunity to push for higher prices of their HDD products (50%-100%) whilst cutting down warranty periods
' We are keeping our earnings forecasts unchanged for Engtek and Notion but revising our valuation from 0.7 times to 0.9 times price-to-book value. They are both upgraded to Neutral from Sell. Engtek at RM1.52 and Notion at RM1.69.
' As for JCY, we are raising our earnings forecast by more than 100% as their equipment was unscathed. Valuation switched from 0.9 times PBV to 8 times FY12 PER. Call upgraded to Trading Buy with FV of RM1.30. We understand that there are rumours of a strong price push over the next one month,' it said.
''
Fifth Biggest in the World
Stock Name: SCIENTX
Company Name: SCIENTEX INCORPORATED BHD
Company Name: SCIENTEX INCORPORATED BHD
| Research House: TA | Price Call: BUY | Target Price: 2.90 |
Affin Research maintains Buy on WCT, RM3.56 target price
Stock Name: WCT
Company Name: WCT BHD
KUALA LUMPUR (Dec 28): Affin Equities Research is maintaining its Buy call on WCT BHD [] at RM2.30 with a price target of RM3.56.
WCT had announced on Tuesday its unit was awarded an investment certificate to undertake a residential and commercial mixed development on a 46,577 sq m (11.5 acre) site in Ho Chi Minh City, Vietnam.
Affin Research said on Wednesday since the land area was only 11.5 acres, it did not believe the project would take 50 years to develop.
'We continue to believe in the long term potential of the property development business in Vietnam but with the eurozone debt crisis still unfolding and global economy expected to slow in 2012, short-term uncertainties remain,' it said.
The research house said that on the upside, there was recent good response to Gamuda's Celadon City (Ho Chi Minh City) and Gamuda City (Hanoi) projects.
'Pending guidance on project launch date and gross development value, we maintain our FY11-13 forecasts, target price (at 15 times CY12 EPS) and BUY call for WCT.
'Recent tender failures and likely inability to secure RM2 billion of new projects this year are key concern,' Affin Research pointed out.
Company Name: WCT BHD
| Research House: AFFIN | Price Call: BUY | Target Price: 3.56 |
KUALA LUMPUR (Dec 28): Affin Equities Research is maintaining its Buy call on WCT BHD [] at RM2.30 with a price target of RM3.56.
WCT had announced on Tuesday its unit was awarded an investment certificate to undertake a residential and commercial mixed development on a 46,577 sq m (11.5 acre) site in Ho Chi Minh City, Vietnam.
Affin Research said on Wednesday since the land area was only 11.5 acres, it did not believe the project would take 50 years to develop.
'We continue to believe in the long term potential of the property development business in Vietnam but with the eurozone debt crisis still unfolding and global economy expected to slow in 2012, short-term uncertainties remain,' it said.
The research house said that on the upside, there was recent good response to Gamuda's Celadon City (Ho Chi Minh City) and Gamuda City (Hanoi) projects.
'Pending guidance on project launch date and gross development value, we maintain our FY11-13 forecasts, target price (at 15 times CY12 EPS) and BUY call for WCT.
'Recent tender failures and likely inability to secure RM2 billion of new projects this year are key concern,' Affin Research pointed out.
December 27, 2011
Sunway secures RM28m construction contract
Stock Name: SUNWAY
Company Name: SUNWAY BERHAD
Larger Smaller Reset Sunway Bhd
(Dec 27, RM2.50)
Maintain buy at RM2.46 with target price of RM2.79: Sunway announced that its wholly-owned subsidiary, Sunway Geotechnics (M) Sdn Bhd had on Dec 22, 2011 accepted a letter of award from Hap Seng Land Development Sdn Bhd for the construction and completion of earthworks, piling, basement and ground floor reinforced concrete structures for one block of 43-storey serviced apartments at Jalan Tun Razak, Kuala Lumpur. The contract value is RM27.6 million and the project is targeted to be completed by Dec 12, 2012, with a construction period of 12 months.
We make no changes to our FY11 to FY13 net earnings forecasts as the contract value is small (compared with Sunway's RM2.9 billion construction order book) and we have imputed over RM1 billion of yearly new contract wins for FY11/FY12. Maintain 'buy' on Sunway with an unchanged target price of RM2.79, based on a 30% discount to realisable net asset value. Notwithstanding our cautious stance on the domestic medium- to high-end property market in view of the rising global economic uncertainties and potential tightening of bank mortgages, we continue to like Sunway for its: (i) integrated real estate business model; (ii) strategic landbank; (iii) extensive experience in the construction sector with a proven track record; and (iv) established international footprint in Singapore and China (property development) and Middle East (construction). Besides, we believe Sunway's short-to medium-term earnings will be cushioned from any unexpected short-term market downturn given their high property unbilled sales of RM2 billion, construction order book of RM2.9 billion and recurring income from the Sunway REIT and its theme park operations. ' Affin IB Research, Dec 27
''
This article appeared in The Edge Financial Daily, December 28, 2011.
Company Name: SUNWAY BERHAD
| Research House: AFFIN | Price Call: BUY | Target Price: 2.79 |
Larger Smaller Reset Sunway Bhd
(Dec 27, RM2.50)
Maintain buy at RM2.46 with target price of RM2.79: Sunway announced that its wholly-owned subsidiary, Sunway Geotechnics (M) Sdn Bhd had on Dec 22, 2011 accepted a letter of award from Hap Seng Land Development Sdn Bhd for the construction and completion of earthworks, piling, basement and ground floor reinforced concrete structures for one block of 43-storey serviced apartments at Jalan Tun Razak, Kuala Lumpur. The contract value is RM27.6 million and the project is targeted to be completed by Dec 12, 2012, with a construction period of 12 months.
We make no changes to our FY11 to FY13 net earnings forecasts as the contract value is small (compared with Sunway's RM2.9 billion construction order book) and we have imputed over RM1 billion of yearly new contract wins for FY11/FY12. Maintain 'buy' on Sunway with an unchanged target price of RM2.79, based on a 30% discount to realisable net asset value. Notwithstanding our cautious stance on the domestic medium- to high-end property market in view of the rising global economic uncertainties and potential tightening of bank mortgages, we continue to like Sunway for its: (i) integrated real estate business model; (ii) strategic landbank; (iii) extensive experience in the construction sector with a proven track record; and (iv) established international footprint in Singapore and China (property development) and Middle East (construction). Besides, we believe Sunway's short-to medium-term earnings will be cushioned from any unexpected short-term market downturn given their high property unbilled sales of RM2 billion, construction order book of RM2.9 billion and recurring income from the Sunway REIT and its theme park operations. ' Affin IB Research, Dec 27
''
This article appeared in The Edge Financial Daily, December 28, 2011.
Earnings volatility and dividend risk at Star
Stock Name: STAR
Company Name: STAR PUBLICATIONS (M) BHD
Larger Smaller Reset Star Publications (Malaysia) Bhd
(Dec 27, RM3.24)
Maintain reduce at RM3.18 with target price of RM3.04: For 9M11, Star Publications' non-core businesses (excluding its publication and radio business) contributed to a revenue loss of RM114.5 million and a pre-tax loss of RM6.2 million. The main contributor to its non-core business is its event management and exhibition operations ' via 59%-owned Cityneon Holdings. This division is going through a rough patch having contributed positively in the year before (9M10: revenue RM146.6 million and RM8.6 million profit). The sharp swing in earnings highlights the increased volatility of Star's earnings, as opposed to its relatively more stable revenue and earnings from its publication and radio business. Moreover, we see heightened risk to Star's earnings after successive investments in other non-core assets. Recall that since May 2011, Star has made four additional investments amounting for RM56 million, which includes a radio station, a TV channel, an online media business and most recently a Chinese weekly publication. Note that as at 9M11, Star accounted for maiden pre-tax losses of RM2.5 million from its TV channel, Li TV.
But we believe that Star's acquisition trail could persist into 2012, judging from its unutilised proceeds of its medium-term notes (MTN) raised earlier this year. Approximately RM48 million of the RM200 million raised remains unutilised. Star had nevertheless sought to raised up to a total of RM750 million in commercial paper and MTN for working capital, capital expenditure and corporate purposes earlier, leading us to believe that Star may continue to step up its diversification programme. This, in our view, increases the vulnerability of its free cash flow and leaves greater downside implications for its dividend outlook. Disappointingly, Star trimmed its 1H11 dividend per share to 9 sen (1H10: 10.5 sen).
Back to its core operations, Star's circulation has improved from 279,000 for the July-December 2010 period to 288,000 for January-June 2011. Star's circulation could have further improved in recent months with its promotional efforts to spur circulation, although any spike is likely to be one-off. The declining circulation trend is likely to persist, not merely for the Star newspaper, but for English mainstream papers as a whole. This is coming at the expense of other media platforms, in particular online media, especially with improved broadband. Longer term, this negative trend will continue to hamper advertising expenditure revenue to the print segment and particularly the English newspaper sub segment. Note that adex to the Malay and Chinese print segments has turned increasingly important as an advertising channel (English accounted for 53% of print adex in 2000, declining to 44% as at end-2010). ' Affin IB Research, Dec 27
''
This article appeared in The Edge Financial Daily, December 28, 2011.
Company Name: STAR PUBLICATIONS (M) BHD
| Research House: AFFIN | Price Call: SELL | Target Price: 3.04 |
Larger Smaller Reset Star Publications (Malaysia) Bhd
(Dec 27, RM3.24)
Maintain reduce at RM3.18 with target price of RM3.04: For 9M11, Star Publications' non-core businesses (excluding its publication and radio business) contributed to a revenue loss of RM114.5 million and a pre-tax loss of RM6.2 million. The main contributor to its non-core business is its event management and exhibition operations ' via 59%-owned Cityneon Holdings. This division is going through a rough patch having contributed positively in the year before (9M10: revenue RM146.6 million and RM8.6 million profit). The sharp swing in earnings highlights the increased volatility of Star's earnings, as opposed to its relatively more stable revenue and earnings from its publication and radio business. Moreover, we see heightened risk to Star's earnings after successive investments in other non-core assets. Recall that since May 2011, Star has made four additional investments amounting for RM56 million, which includes a radio station, a TV channel, an online media business and most recently a Chinese weekly publication. Note that as at 9M11, Star accounted for maiden pre-tax losses of RM2.5 million from its TV channel, Li TV.
But we believe that Star's acquisition trail could persist into 2012, judging from its unutilised proceeds of its medium-term notes (MTN) raised earlier this year. Approximately RM48 million of the RM200 million raised remains unutilised. Star had nevertheless sought to raised up to a total of RM750 million in commercial paper and MTN for working capital, capital expenditure and corporate purposes earlier, leading us to believe that Star may continue to step up its diversification programme. This, in our view, increases the vulnerability of its free cash flow and leaves greater downside implications for its dividend outlook. Disappointingly, Star trimmed its 1H11 dividend per share to 9 sen (1H10: 10.5 sen).
Back to its core operations, Star's circulation has improved from 279,000 for the July-December 2010 period to 288,000 for January-June 2011. Star's circulation could have further improved in recent months with its promotional efforts to spur circulation, although any spike is likely to be one-off. The declining circulation trend is likely to persist, not merely for the Star newspaper, but for English mainstream papers as a whole. This is coming at the expense of other media platforms, in particular online media, especially with improved broadband. Longer term, this negative trend will continue to hamper advertising expenditure revenue to the print segment and particularly the English newspaper sub segment. Note that adex to the Malay and Chinese print segments has turned increasingly important as an advertising channel (English accounted for 53% of print adex in 2000, declining to 44% as at end-2010). ' Affin IB Research, Dec 27
''
This article appeared in The Edge Financial Daily, December 28, 2011.
TA Enterprise's Sydney launch a success
Stock Name: TA
Company Name: TA ENTERPRISE BHD
Larger Smaller Reset TA Enterprise Holdings Bhd
(Dec 27, 58 sen)
Maintain buy at 59 sen with a target price of RM1.10: Net profit for 9MFY12 of RM72 million is 70% of our FY12 profit, led by higher hotel and broking income. Net profit for 3QFY12 fell 55% quarter-on-quarter (q-o-q) after a RM15 million foreign exchange translation loss on financing activities and higher effective tax rate (29%) due to underprovision in previous years. As expected, property contribution remained small at 3% of total earnings before interest and tax. Bursa Malaysia's trading volume in the August to October quarter rose 18% to RM1 billion and value was up 3% to RM1.6 billion. As a result, broking income grew 18%. No dividends were declared in the quarter.
TA Global (TAG) launched the first parcel of Little Bay Cove, Sydney, Australia, in December. Called 'The Solis', the 45 apartments were offered at prices starting from A$495,000 (RM1.6 million) each. Registrations in Sydney and Malaysia have been encouraging so far. This is TAG's maiden venture in the Australian property market.
Our RM1.10 sum-of-parts-based target price is based on 45% discount to realisable net asset value for property and 0.8 times price-to-book value (P/BV) for broking. TAG's future property launches in Malaysia and overseas could be earnings and rerating catalysts. Its current project in Malaysia is Damansara Avenue with about RM1.3 billion in gross development value, while its projects in Canada are expected to rake in RM400 million and Australia RM900 million.
Future developments, including the 0.9ha parcel in a prime KLCC area and 1.2ha in Bukit Bintang, will further unlock its land values. Its broking business may be valued higher, as Singapore's UOB recently offered to buy Innosabah Securities at 1.4 times P/BV. ' HwangDBS Vickers Research, Dec 27
''
This article appeared in The Edge Financial Daily, December 28, 2011.
Company Name: TA ENTERPRISE BHD
| Research House: HWANGDBS | Price Call: BUY | Target Price: 1.10 |
Larger Smaller Reset TA Enterprise Holdings Bhd
(Dec 27, 58 sen)
Maintain buy at 59 sen with a target price of RM1.10: Net profit for 9MFY12 of RM72 million is 70% of our FY12 profit, led by higher hotel and broking income. Net profit for 3QFY12 fell 55% quarter-on-quarter (q-o-q) after a RM15 million foreign exchange translation loss on financing activities and higher effective tax rate (29%) due to underprovision in previous years. As expected, property contribution remained small at 3% of total earnings before interest and tax. Bursa Malaysia's trading volume in the August to October quarter rose 18% to RM1 billion and value was up 3% to RM1.6 billion. As a result, broking income grew 18%. No dividends were declared in the quarter.
TA Global (TAG) launched the first parcel of Little Bay Cove, Sydney, Australia, in December. Called 'The Solis', the 45 apartments were offered at prices starting from A$495,000 (RM1.6 million) each. Registrations in Sydney and Malaysia have been encouraging so far. This is TAG's maiden venture in the Australian property market.
Our RM1.10 sum-of-parts-based target price is based on 45% discount to realisable net asset value for property and 0.8 times price-to-book value (P/BV) for broking. TAG's future property launches in Malaysia and overseas could be earnings and rerating catalysts. Its current project in Malaysia is Damansara Avenue with about RM1.3 billion in gross development value, while its projects in Canada are expected to rake in RM400 million and Australia RM900 million.
Future developments, including the 0.9ha parcel in a prime KLCC area and 1.2ha in Bukit Bintang, will further unlock its land values. Its broking business may be valued higher, as Singapore's UOB recently offered to buy Innosabah Securities at 1.4 times P/BV. ' HwangDBS Vickers Research, Dec 27
''
This article appeared in The Edge Financial Daily, December 28, 2011.
OSK keeps 'buy' call on Sunway
Stock Name: SUNWAY
Company Name: SUNWAY BERHAD
Sunway Bhd shares gained four sen to RM2.50 with 243,800 shares traded as at 10.20am today after its wholly-owned subsidiary, Sunway Geotechnics (M) Sdn Bhd, secured a RM27.57 million contract from Hap Seng Land Development (JTR) Sdn Bhd.
The contract is for the proposed construction and completion of earthworks and piling for basements one and two and ground floor reinforces concrete structures for a 43-storey service apartment at Jalan Tun Razak, Kuala Lumpur.
OSK Research viewed the contract positively although the size was small relative to the other contracts Sunway had secured earlier in the year.
"More importantly, it was in line with Sunway's intention to focus more on niche and specialised contracts for its construction division following the completion of its merger," it said in a research note today.
Sunway's construction orderbook valued at about RM2.8 billion will last it for at least another 1.5 years.
Nevertheless, it is continuously bidding for more contracts with an order book replenishment target of RM1.5 billion, annually.
"We believe it stands a good chance of securing more contracts from Iskandar Region for next year as well as potential contracts from the KL MRT project, further supported by its good track record," OSK Research said.
It maintained a buy recommendation on Sunway at an unchanged fair value of RM3.31 per share. -- Bernama
Company Name: SUNWAY BERHAD
| Research House: OSK | Price Call: BUY | Target Price: 3.31 |
Sunway Bhd shares gained four sen to RM2.50 with 243,800 shares traded as at 10.20am today after its wholly-owned subsidiary, Sunway Geotechnics (M) Sdn Bhd, secured a RM27.57 million contract from Hap Seng Land Development (JTR) Sdn Bhd.
The contract is for the proposed construction and completion of earthworks and piling for basements one and two and ground floor reinforces concrete structures for a 43-storey service apartment at Jalan Tun Razak, Kuala Lumpur.
OSK Research viewed the contract positively although the size was small relative to the other contracts Sunway had secured earlier in the year.
"More importantly, it was in line with Sunway's intention to focus more on niche and specialised contracts for its construction division following the completion of its merger," it said in a research note today.
Sunway's construction orderbook valued at about RM2.8 billion will last it for at least another 1.5 years.
Nevertheless, it is continuously bidding for more contracts with an order book replenishment target of RM1.5 billion, annually.
"We believe it stands a good chance of securing more contracts from Iskandar Region for next year as well as potential contracts from the KL MRT project, further supported by its good track record," OSK Research said.
It maintained a buy recommendation on Sunway at an unchanged fair value of RM3.31 per share. -- Bernama
OSK 'overweight' on media sector
Stock Name: MEDIA
Company Name: MEDIA PRIMA BHD
Stock Name: CATCHA
Company Name: CATCHA MEDIA BERHAD
OSK Research expects media advertisement expenditure (ADEX) growth to close 2011 at double the in-house gross domestic
product forecast of 5.2 per cent.
OSK Research in a research note today said the expectation is based on the strength in domestic consumption that can still be seen.
The research house said according to the AC Nielsen Media Research, the first nine months of 2011 saw ADEX grow by a robust 10.4 per cent year-on-year (y-o-y) shored up by resilient domestic consumer spending despite concerns of slowing recovery and weakening consumer confidence on the global economic front.
It said that advertisement spending on the three core divisions -- newspapers, television and radio channels -- made up a total of 94 per cent of the combined ADEX, rising by 10.7 per cent y-o-y to RM5.75 billion.
Meanwhile, the Internet segment remained the fastest growing, chalking up 34.4 per cent y-o-y growth but accounting for an insignificant 0.7 per cent share of total ADEX.
OSK Research maintains an "overweight" call on the sector as it believes that thematic factors such as an impending polls and the Euro 2012 football tournament would be the key catalysts in 2012.
OSK Research said that the top picks -- Media Chinese, Media Prima and Catcha Media -- are all pegged with a "buy" call and fair value at RM3.17, RM3.09 and RM1.21 respectively.
Meanwhile the research firm has rated a "neutral" call on Star with a fair value of RM3.34. -- Bernama
Company Name: MEDIA PRIMA BHD
| Research House: OSK | Price Call: BUY | Target Price: 3.09 |
Stock Name: CATCHA
Company Name: CATCHA MEDIA BERHAD
| Research House: OSK | Price Call: BUY | Target Price: 1.21 |
OSK Research expects media advertisement expenditure (ADEX) growth to close 2011 at double the in-house gross domestic
product forecast of 5.2 per cent.
OSK Research in a research note today said the expectation is based on the strength in domestic consumption that can still be seen.
The research house said according to the AC Nielsen Media Research, the first nine months of 2011 saw ADEX grow by a robust 10.4 per cent year-on-year (y-o-y) shored up by resilient domestic consumer spending despite concerns of slowing recovery and weakening consumer confidence on the global economic front.
It said that advertisement spending on the three core divisions -- newspapers, television and radio channels -- made up a total of 94 per cent of the combined ADEX, rising by 10.7 per cent y-o-y to RM5.75 billion.
Meanwhile, the Internet segment remained the fastest growing, chalking up 34.4 per cent y-o-y growth but accounting for an insignificant 0.7 per cent share of total ADEX.
OSK Research maintains an "overweight" call on the sector as it believes that thematic factors such as an impending polls and the Euro 2012 football tournament would be the key catalysts in 2012.
OSK Research said that the top picks -- Media Chinese, Media Prima and Catcha Media -- are all pegged with a "buy" call and fair value at RM3.17, RM3.09 and RM1.21 respectively.
Meanwhile the research firm has rated a "neutral" call on Star with a fair value of RM3.34. -- Bernama
MIDF retains 'buy' on Petronas Gas
Stock Name: PETGAS
Company Name: PETRONAS GAS BHD
MIDF Research Sdn Bhd has reiterated its "buy" recommendation on Petronas Gas (PGas) with a higher trading price of RM15.60 from RM14.40.
PGas ended trading today at RM14.40, up 26 sen from yesterday's closing of RM14.14.
"Taking into account its potential earnings upgrade and good dividend yield, we believe it is more justifiable to raise our valuation to its historical mean since 2007 of 18.4 times from a conservative 16.5 times PER (price earnings ratio) implied previously," MIDF said in its research note.
"We like PGas' sole ownership of Peninsular Malaysia's gas pipelines system and the up-coming regasification facility in Melaka, leveraging on the gas sector liberalisation initiatives," it said.
According to MIDF, the first import of LNG agreement, which had been signed between Petronas and GDF Suez was expected to kick off in the third quarter of next year.
MIDF also said the regasification business could generate RM100 million-RM240 million net profit to PGas from 2013-2015. -- BERNAMA
Company Name: PETRONAS GAS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 15.60 |
MIDF Research Sdn Bhd has reiterated its "buy" recommendation on Petronas Gas (PGas) with a higher trading price of RM15.60 from RM14.40.
PGas ended trading today at RM14.40, up 26 sen from yesterday's closing of RM14.14.
"Taking into account its potential earnings upgrade and good dividend yield, we believe it is more justifiable to raise our valuation to its historical mean since 2007 of 18.4 times from a conservative 16.5 times PER (price earnings ratio) implied previously," MIDF said in its research note.
"We like PGas' sole ownership of Peninsular Malaysia's gas pipelines system and the up-coming regasification facility in Melaka, leveraging on the gas sector liberalisation initiatives," it said.
According to MIDF, the first import of LNG agreement, which had been signed between Petronas and GDF Suez was expected to kick off in the third quarter of next year.
MIDF also said the regasification business could generate RM100 million-RM240 million net profit to PGas from 2013-2015. -- BERNAMA
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