January 20, 2012
In Hot Pursuit of D.B.E. Gurney?
Company Name: C.I. HOLDINGS BHD
| Research House: OSK | Price Call: SELL | Target Price: 0.99 |
CIMB Thai boosted by one-off gain in 4Q
Company Name: CIMB GROUP HOLDINGS BERHAD
| Research House: AMMB | Price Call: BUY | Target Price: 8.00 |
HLIB Research 20 Jan 2012 (Digi; Traders Brief)
Company Name: DIGI.COM BHD
| Research House: HLG | Price Call: SELL | Target Price: 3.17 |
DiGi.Com (SELL)
4Q11 Results
'''' FY11 reported revenue of RM5,964m and PBT of RM1,561m came within expectation, accounting for 100% and 101% of our full-year forecast respectively.
'''' The only deviation was net profit which registered RM1,255m exceeded our expectation, accounting for 110% of our full-year forecast but is much below consensus whereby it only account for 87%.
'''' This is mainly due to effective tax rates on approved tax incentives related to mobile broadband network facilities for FY09-FY11.
'''' Declared 4th interim tax exempt dividend of 6.5 sen, translating to a payout ratio of 128.2%. Total declared dividend for FY11 was 17.5 sen vs. 16.3 sen in 2010.
'''' Minor tweaks on earnings forecast imputing guided tax rate for FY12-13 with consideration of voice products' ARPU and MOU trends. As a result, FY12-FY13 EPS were adjusted by +16.1% and +14.9% respectively.
'''' DDM-derived TP is maintained at RM3.17 (based on WACC of 7.4% and TG of 0%).
''
KLCI: Sideways ahead of CNY holidays next week''
'''' Ahead of the CNY holidays next week, we expect more sideways movement as bigcaps continue its consolidation whilst lower liners and ACE counters to remain in the limelight. Immediate supports are 1512 (mid Bollinger band), 1502 and 1492 (lower Bollinger band).
''
Dow Jones: Still upside bias
'''' Following the triangle breakout, current uptrend remains intact as long as the Dow is able to maintain its posture above the mid Bollinger band or uptrend line supports near 12350. Further support is 12068 (50-d SMA) and 200-d SMA at 11962.
'''' Immediate resistance targets 12753 (Jul 2011 high) and 12876 (May 2011 high), followed by a more formidable resistance near 13000 psychological barrier.
DIGI.com (Hold): Helped by well-timed tax benefits
Company Name: DIGI.COM BHD
| Research House: MAYBANK | Price Call: HOLD | Target Price: 3.74 |
Within expectations. Digi ended FY11 strongly but only due to some well-timed tax benefits. Net of this, earnings were within expectations, down slightly from FY10. In 2012, competitive pressures are expected to rise and valuations are stretched but management was optimistic, guiding for mid to high single-digit topline growth and sustained EBITDA. Further, dividends should be sustained as Digi is likely to undertake more capital management measures. Maintain Hold with a raised EV-derived TP of RM3.74 (+8%) after incorporating forward guidance of lower effective tax rate.
Maybank research (20 January 2012)
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Pavilion REIT (Hold): Asset enhancement for the longer term
Company Name: PAVILION REAL ESTATE INV TRUST
| Research House: MAYBANK | Price Call: HOLD | Target Price: 1.10 |
Positive asset enhancement. We are positive on Pavilion REIT's (PREIT) latest asset enhancement initiatives in transforming the existing TANGS Fashion Lifestyle Store area (68,000 sqft NLA or 5% of Pavilion Mall's total NLA) into a new high street fashion precinct, which will enhance the rental yield. Significant contributions should come in from 2013 onwards. No change in our earnings forecasts for now. Our DCF-based TP is unchanged at RM1.10. Hold.
Maybank research (20 January 2012)
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Bond with free warrants on Indonesia and Vietnam
Company Name: SAMCHEM HOLDINGS BERHAD
| Research House: ECMLIBRA | Price Call: BUY | Target Price: 1.10 |
CIMB Thai's 4QFY11 net profit boosted by exceptional gains
Company Name: CIMB GROUP HOLDINGS BERHAD
| Research House: MIDF | Price Call: HOLD | Target Price: 7.50 |
DiGi surges to record, fair value raised
Company Name: DIGI.COM BHD
| Research House: RHB | Price Call: BUY | Target Price: 4.40 |
DiGi.Com Bhd, Malaysia's third- largest mobile-phone operator by market value, jumped to a record in Kuala Lumpur trading after fourth-quarter net income grew 19 per cent to RM394.2 million.
The stock gained 1.3 per cent to RM3.93 at 9:03 a.m. local time.
DiGi's fair value raised to RM4.40 from RM4.10, analyst Lim Tee Yang writes in report. -- Bloomberg
January 19, 2012
RHBInvest Research Highlights 19th January 2012
Company Name: UNISEM (M) BHD
| Research House: RHB | Price Call: HOLD | Target Price: 1.22 |
Stock Name: MPI
Company Name: MALAYSIAN PACIFIC INDUSTRIES
| Research House: RHB | Price Call: HOLD | Target Price: 2.79 |
Stock Name: NOTION
Company Name: NOTION VTEC BHD
| Research House: RHB | Price Call: SELL | Target Price: 1.69 |
Stock Name: DAYANG
Company Name: DAYANG ENTERPRISE HOLDINGS BHD
| Research House: RHB | Price Call: BUY | Target Price: 2.07 |
Stock Name: QCAPITA
Company Name: QUILL CAPITA TRUST
| Research House: RHB | Price Call: HOLD | Target Price: 1.27 |
| Top Story |
| Semiconductor ' Seeing the first crack of dawn Neutral (Upgraded) Sector Update Unisem ' Fair value raised to RM1.22 Market Perform (Upgraded) MPI ' Fair value raised to RM2.79 Market Perform (Upgraded) Notion ' Fair value raised to RM1.69 Underperform - Yesterday, Linear Technology (US based IC design company) gave an upbeat outlook for the industry. This would be the third positive guidance after Broadcom and ChipMOS, and indicates a more positive tone for the industry after a parade of negative guidance last month. - We have already factored in a weak 1Q12 for local packaging players, as there is still lack of order visibility, but we believe the industry may be on track for some recovery in 2Q12, and stronger recovery in 2H12. - We believe the demand weakness for chips has already been priced in. Thus, we are raising our benchmark forward target P/BV from 0.6x to 0.8x for the semiconductor players. We upgrade Unisem and MPI to Market Perform (from underperform). |
| |
| Corporate Highlights |
| Dayang ' Delivery of Dayang Topaz and extension to Dayang Zamrud's contract Outperform News Update - Dayang announced that it had it had taken delivery of its new workboat, Dayang Topaz yesterday. On another note the company also received a letter of award from Brunei Shell Petroleum Co on 16 Jan, extending its contract for another workboat Dayang Zamrud from 1 Mar 2012 to Oct 2016. - We are positive on the new delivery as it bumps up the company's assets. The extension of the contract is also another positive, as it indicates that the company has performed well thus far. This will enhance its track record in Brunei and its chances for future contracts from the country. Maintain fair value of RM2.07/share and Outperform call on stock. - Related story: Oil & Gas Sector Update - Resilient Despite Macroeconomic Uncertainties (12 Dec 2011) Quill Capita ' Achieves a target DPU of 8.3 sen for FY11 Market Perform Results Note - Quill Capita's 4QFY12/11 realised net income (-14.6%, -0.6%) came in within expectations. Net property income declined mainly due to higher property repair costs incurred in 4QFY12/11. On a full-year basis, however, QC's net profit grew by 5.4% yoy. A final DPU of 4.3 sen was declared bringing total DPU for the year to 8.3 sen (FY10: 8.03 sen), in line with our estimate. - One of QC's tenants has already signed a letter for a two-year renewal on its lease contract in Jan 2012. As this tenant occupies about 37% of the total NLA due to expire in FY12, the total leases up for renewal in 2012 is now reduced to 24% of total NLA (from 39%). - Overall, we lift our FY12-13 EPU estimates by 0.5-2.2%. Fair value unchanged at RM1.27. - Related story: Property ' MREITs Sector Update: A Defensive Pick for Property Exposure (5 Jan 2012) |
| |
| Macro |
| Inflation ' Slowed To 3.0% YoY In December, As Price Pressure Eased Economic Highlights (published 19 Jan 2012) - The headline inflation rate slowed to 3.0% yoy in Dec, the lowest in eight months, after inching lower to +3.3% in Nov, mainly due to a moderation in the core inflation rate, on the back of easing price pressures, while food & non-alcoholic beverage prices held stable during the month. - Going forward, we believe inflation has peaked but will likely remain sticky downward in the immediate term. As a result, we expect inflation to moderate to an average of 2.8% in 2012, from +3.2% in 2011. - Although BNM has shifted its focus from inflation to growth, pressure for it to ease monetary policy has reduced significantly of late. However, we believe there is room for BNM to cut OPR by 25-50 basis points in 1H 2012, should global economic conditions take a turn for the worse. |
HLIB Research 19 Jan 2011 (Lafarge; Economics; Traders Brief)
Company Name: LAFARGE MALAYAN CEMENT BHD
| Research House: HLG | Price Call: HOLD | Target Price: 7.11 |
Lafarge (M) Cement (Hold; TP: RM7.11)
Largest Beneficiary from ETP
'''' Our investment highlights for Lafarge are:
1.'' Our favourable outlook on the construction sector, and cement sector is the major direct beneficiary from the construction sector;
2.'' As the largest player in Malaysia, Lafarge will be the largest beneficiary from ETP implementation; and
3.'' Strong balance sheet.
'''' We are projecting Lafarge's net profit in 2012-13 to rise by 32.7% and 10.8% to RM366.2m and RM405.7m from a projected net profit of RM276.0m in 2011.
'''' We are initiating coverage on Lafarge with a HOLD recommendation and TP of RM7.11 based on 16.5x 2012 EPS of 43.1 sen.
''
December Inflation Report
'''' CPI growth eased further to 3.0% yoy in Dec 2011 (Nov: +3.3% yoy), slightly below the consensus estimate of 3.1%, due mainly to lapse of fuel price hike effected a year ago. Accordingly, price increase of the transport category eased sharply to 1.9% yoy (Nov: +3.9% yoy).
'''' The lapse of fuel price hike contributed to a 0.3ppt reduction in the CPI growth. December inflation rate would have remained at 3.3% yoy if Pemandu had continued with its subsidy removal in Dec 2011.
'''' Stable mom CPI growth of 0.1% and easing of services inflation (3.1% yoy; Nov: 3.2% yoy) provided a relief that price pressure on the ground has begun to stabilise.
'''' We now lower our inflation forecast for 2012 to 2.7% from earlier forecast of 3.0% as Pemandu did not perform any subsidy removal for Dec 2011 as anticipated.
'''' We expect BNM to keep the OPR at 3.00% until end-2012 given the resilient economic growth with sticky inflation.
''
Holding well above the key 200-d SMA support''
'''' We reiterate that as long as KLCI continues to remain its posture above the crucial 200-d SMA (now at 1502), the benchmark index is still likely to gradually refill the huge gap of 1529-1546 resistance recorded on 5 Aug 11, probably as early as next week. Ahead of the CNY holidays next week, we expect more sideways consolidation above the 200-day SMA. Breaking the key 200-d SMA will drag index lower to 30-d SMA (1496) and 50-d SMA (1484) levels.
Medium to long term positive after recent consolidation
'''' Following the breakout above the downtrend line formed since 2002 coupled with improving technical readings on the monthly chart, BOXPAK is expected to rally further towards the 50% FR (at RM2.36) and 38.2% FR (RM2.65), which is also the 52-wk high. A breakout above RM2.65 will drive prices higher to a more formidable resistance near RM3.00.
'''' We believe BOXPAK could find its floor soon amid signs of bottoming up on its hourly chart and share prices also retraced back to below the 50% FR (daily chart). Immediate supports are RM2.06 (61.8% FR-daily chart) and RM2.00 (monthly mid Bollinger band). Cut loss below RM2.00.
Pavilion REIT (Hold): A Malaysia retail icon
Company Name: PAVILION REAL ESTATE INV TRUST
| Research House: MAYBANK | Price Call: HOLD | Target Price: 1.10 |
A class of its own. Pavilion REIT's (PavREIT) key attraction lies in its asset portfolio and the jewel in its crown, Pavilion Kuala Lumpur (KL) Mall. Strategically located in the heart of Kuala Lumpur's prime tourist and shopping district, this mall caters predominantly to the upper middle to high income group, and is one of only 4 prime retail malls in the country. We initiate coverage on PavREIT with a Hold rating and RM1.10 DCF-based target price. It currently trades at a 5.5% yield.
Maybank research (19 January 2012)
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Quill Capita Trust (Hold): Growing organically
Company Name: QUILL CAPITA TRUST
| Research House: MAYBANK | Price Call: HOLD | Target Price: 1.10 |
Defensive but not exciting yet. QCT's 2011 recurring net profit of RM34.3m (+5.4% YoY) was within our expectations. FY12 dividend yield forecast of 7.8% is above the industry average of 6.8%, but we see limited upside due to concerns on oversupply in the office market. Hold maintained, with an unchanged DCF-based TP of RM1.10.
Maybank research (19 January 2012)
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Proposes 10% Private Placement
Company Name: ASIA MEDIA GROUP BERHAD
| Research House: TA | Price Call: BUY | Target Price: 0.41 |
4QFY11 net profit likely to be lower by 7% qoq
Company Name: BURSA MALAYSIA BHD
| Research House: MIDF | Price Call: HOLD | Target Price: 6.20 |
RM20m Investment on International School
Company Name: HELP INTERNATIONAL CORPORATION
| Research House: OSK | Price Call: HOLD | Target Price: 1.63 |
Spent RM3.1mil on NY lobbying in 2011
Company Name: GENTING MALAYSIA BERHAD
| Research House: AMMB | Price Call: BUY | Target Price: 4.30 |
January 18, 2012
Tenaga Nasional (Buy): 1QFY12: Above expectations
Company Name: TENAGA NASIONAL BHD
| Research House: MAYBANK | Price Call: BUY | Target Price: 6.90 |
Finally, some good luck. Tenaga received some well-deserved good luck which helped turn 1QFY12 operationally profitable. It has received higher natural gas supply, and generated more power from its hydroelectric dams due to higher water levels courtesy of the monsoon rains. It has also received RM1.0b of its cost-sharing payments and will likely receive the balance RM1.0b by the end of 2QFY12. Maintain Buy, with an unchanged target price of RM6.90 pegged to 13x FY12 PER.
Maybank research (18 January 2012)
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HLIB Research 18 January 2012 (Auto; IOI; TNB; Traders Brief)
Company Name: DRB-HICOM BHD
| Research House: HLG | Price Call: BUY | Target Price: 2.90 |
Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD
| Research House: HLG | Price Call: BUY | Target Price: 5.10 |
Stock Name: IOICORP
Company Name: IOI CORPORATION BHD
| Research House: HLG | Price Call: HOLD | Target Price: 4.85 |
Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD
| Research House: HLG | Price Call: HOLD | Target Price: 6.00 |
Automotive (Overweight)
Affected by Thailand Flood
'''' MAA released Dec 11 data showing TIV suffered from a significant drop of 12.9% yoy, leading to 2011 TIV dropping by 0.9% yoy vs. our forecast of 0.3% yoy decline.
'''' We expect 2012 TIV to grow 6% yoy, mainly due to sustainable GDP growth (underpinned by the 2012 Budget and ETP implementation) and supply chain recovery.
'''' For 2011, Perodua (UMW and MBM), Nissan (TCM) and Honda (DRB) sales was within our expectations, while Toyota (UMW) and Proton was below our expectations.
'''' Other marques (i.e. Hyundai, Kia, Peugeot, Chevrolet, VW etc) had been gaining market share, with records of double digit growth since beginning 2011, indicating growing competitive environments going forward.
'''' We expect continued strong demand for hybrid cars in 2012, due to lowered price (tax free) as well as its fuel economy advantage.
'''' TOP Picks: BUY on DRB (TP: RM2.90) and TCM (TP: RM5.10).
''
IOI Corporation (Hold; TP: RM4.85)
More details on Singapore land deal
'''' IOI's 99.8% subsidiary Multi Wealth (Singapore) Pte Ltd won its bid for a parcel of 99-year leasehold land in Jalan Lempeng, off Clementi Avenue 6, Singapore for S$408m.
'''' Assuming land cost to account for 40% of the total GDV and EBIT margin of 20%, IOI will incur a total development cost of S$647.6m or RM1,567.2m, which would in turn raise IOI's net debt and net gearing from RM2.3bn and 0.2x (as at 30 Sep 2011) to RM3.98bn and 0.3x respectively.
'''' Based on our estimates, the project will enhance IOI's earnings by RM79.7m p.a. from FY13 onwards (or 3.4% of our projected FY13 net profit), assuming: (1) Land cost to account for 40% of the total GDV; (2) 20% setback; (3) EBIT margin of 20%; (4) Earnings from this project to contribute equally over 3 years starting from FY06/13; (5) Borrowing cost of 6% p.a.; and (6) Tax rate of 17%.''
'''' We are neutral on the latest development, as the Singapore government's measures will cool demand for property market there, hence IOI's returns on its investments.
'''' Net profit forecasts, SOP-derived TP of RM4.85 as well as Hold recommendation maintained for now.
''
Tenaga (Hold)
1Q12 Earnings Return to Black
'''' Within estimates - Reported 1Q12 core earnings of RM184m, as compared to HLIB's core earnings RM1.9bn (have included RM1.0bn compensation for FY08/12 higher fuel cost), but lower than consensus.
'''' 1Q12 earnings return to black on the back of lower power demand QoQ, higher hydropower generation and improved supply of gas.
'''' TNB is expected to continue incur high fuel cost expenses (estimated ~RM2.5bn), and submit claims for compensation for the period of Nov 11 - Sep 12.
'''' Gas supply issue will only be resolved with the commencement of Melaka regassification plant in Sep 2012. However, the issue of pricing the gas to TNB is another concern as TNB may need to absorb the higher gas prices and unable to pass through to consumers.
'''' Maintain HOLD on TNB with unchanged TP of RM6.00.
''
KLCI: To consolidate above the crucial 200-d SMA
'''' Ahead of the CNY holidays next week, investors should keep an eye on the 200-day SMA. A significant close below 1502 on rising volume would likely signal the resumption of the longer term bear market. Breaking the key 200-d SMA will drag index lower to 30-d SMA (1495), 50-d SMA (1482) and lower Bollinger band (1476) levels. Resistance zones are 1529-1546.
HLIB Research 18 January 2012 (Axiata)
Company Name: AXIATA GROUP BERHAD
| Research House: HLG | Price Call: HOLD | Target Price: 4.92 |
Axiata (HOLD)
Bigger Footprint in India
'''' Bloomberg reported that Axiata is in talks to buy a stake in India's Tikona Digital Networks Ltd.
'' A deal may involve Tikona selling new shares to Axiata.
'' Tikona hold licenses to offer wireless broadband Internet services in regions including Gujarat, Himachal Pradesh and Rajasthan.
'''' Tikona spent more than RM610.54m for 4G spectrum.
'' Comments: We are taking a neutral stand on this news.'' Positively, this acquisition will allow Axiata to expand its market share and sustain growth riding on the data boom in India. On the downside, Tikona will be competing head-to-head with Idea Cellular (which Axiata also owns a stake) as there are overlaps of their 4G and 3G service areas.
'' Currently, Tikona has about 1m subscribers across the country.
'' Analysys Mason predicts that 3G and 4G technologies will account for a respective 57.1% and 10.75% of the nation's mobile subscribers by 2020.
'' Axiata may adopt network sharing strategy in India to rollout broadband coverage at a faster pace and cost effectively. It was reported that Reliance Industries, who has acquired pan-India spectrum to operate Broadband Wireless Access (BWA) across India, is seeking for partnerships for high-speed data services it plans to start this year.
'' We reiterate our HOLD call with unchanged target price of RM4.92.
RHBInvest Research Highlights 18th January 2012
Company Name: IJM CORPORATION BHD
| Research House: RHB | Price Call: SELL | Target Price: 4.48 |
Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD
| Research House: RHB | Price Call: HOLD | Target Price: 6.50 |
Stock Name: AXREIT
Company Name: AXIS REITS
| Research House: RHB | Price Call: HOLD | Target Price: 2.72 |
Stock Name: FAJAR
Company Name: FAJARBARU BUILDER GRP BHD
| Research House: RHB | Price Call: HOLD | Target Price: 0.86 |
Stock Name: MBMR
Company Name: MBM RESOURCES BHD
| Research House: RHB | Price Call: BUY | Target Price: 3.90 |
Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD
| Research House: RHB | Price Call: HOLD | Target Price: 4.40 |
Stock Name: UMW
Company Name: UMW HOLDINGS BHD
| Research House: RHB | Price Call: SELL | Target Price: 6.20 |
Stock Name: APM
Company Name: APM AUTOMOTIVE HOLDINGS BHD
| Research House: RHB | Price Call: HOLD | Target Price: 4.30 |
Stock Name: PROTON
Company Name: PROTON HOLDINGS BHD
| Research House: RHB | Price Call: HOLD | Target Price: 5.50 |
Stock Name: DRBHCOM
Company Name: DRB-HICOM BHD
| Research House: RHB | Price Call: HOLD | Target Price: 2.20 |
| Top Story |
| IJM Corp ' Kajang- Seremban Highway not living up a cash cow Underperform Company Update - FY03/12-14 net profit forecasts are trimmed by 3% p.a., having imputed share of RM20m net loss p.a. from Lekas. Fair value reduced by 2% from RM4.59 to RM4.48. Maintain Underperform. - Related story : IJM Corp Results/Briefing Note ' 1HFY03/12 Core Net Profit Grows 11% YoY, Slight Delays In WCE and NPE Extension (29 Nov 2011) |
| |
| Sector Update |
| Motor ' A better 2012 Underweight Sector Update MBM Resources ' Fair value RM3.90 Outperform Tan Chong ' Fair value RM4.40 Market Perform UMW ' Fair value RM6.20 Underperform APM ' Fair value RM4.30 Market Perform Proton ' Fair value RM5.50 Market Perform DRB-HICOM ' Fair value RM2.20 Market Perform - MAA (Malaysian Automotive Association) guidance is for Jan 2012 vehicle sales to improve slightly given ongoing promotional campaigns and the seasonal rush to deliver new vehicles ahead of the Lunar New Year holidays. We are revising our 2012 TIV forecast to 612,000 units (+2% yoy) from 607,000 units on the back of RHBRI's 3.6% GDP growth forecast and 5.3% rise in consumption spending. - Related story: Motor Sector Update ' Seasonal Slump And Floods Hit Sales (20 Dec 2011) |
| |
| Corporate Highlights |
| TNB ' On recovery path Market Perform Results / Briefing Note - FY12 core earnings forecast raised by 22% after imputing an additional 50 mmscfd of gas to be received by TNB beginning Mar. Fair value revised to RM6.50 (from RM6.15) based on unchanged target CY12 PER of 15x. Maintain Market Perform. - Related story: TNB Results Preview ' Slight improvement in 1Q (16 Jan 2012) Axis REIT ' More asset acquisitions in the pipeline Market Perform Briefing Note - Axis REIT is currently looking at 11 potential assets totalling RM545m that could be injected into the REIT over the next 2 years, with half targeted to be acquired by end-2012. - Our EPS forecasts have been revised slightly by 0.8-1.1% for FY12-14 after we factor in lower interest expenses. We raise our fair value slightly to RM2.72 (from Rm2.70) after revising our FY12 DPU estimates. Maintain market Perform. - Related stories: Axis REIT 4Q11 Results Note ' Total DPU of 17.2 sen for FY11 (17 Jan 2011); Axis REIT News Update ' Acquisition in Bayan Lepas (27 Oct 2011); Axis REIT News Update ' New Acquisition in Penang (29 Sep 2011) Fajarbaru ' Completes private placement of 15m new shares at RM0.90/share Market Perform Company Update - Fajarbaru has completed a private placement of 15m new shares at RM0.90 per share. - The RM13.5m gross proceeds from the exercise will increase its net cash of RM24.2m as at 31 - Fair value is reduced by 5% from RM0.91 to RM0.86. Maintain Market Perform. - Related story: Fajarbaru News Update ' Lands RM62m Sewerage Treatment Plant Job In Selangor (22 Dec 2011) |
MIDF Equity Beat (Tenaga Nasional Berhad) 18 JANUARY 2012
Company Name: TENAGA NASIONAL BHD
| Research House: MIDF | Price Call: BUY | Target Price: 6.70 |
IOI advances, "hold" rating stays
Company Name: IOI CORPORATION BHD
| Research House: HWANGDBS | Price Call: HOLD | Target Price: 4.90 |
IOI Corporation Bhd rose one sen or 0.19 per cent to RM5.34 as at 11.20am today as market players are bullish on its property business.
IOI announced yesterday its 99.8 per cent-owned indirect subsidiary Multi Wealth (Singapore) Ltd has won a bid for a parcel of land in the island republic for S$408 million (RM995.5 million).
Measuring about 24,417.6 sq metres (2.4ha), the land, in Jalan Lempeng, Clementi Avenue 6, is intended for condominium development.
HwangDBS Vickers Research said it was neutral on the deal as the aggregate impact over five years would be less than 10 per cent of IOI's forecast pre-tax profits (approximately RM2.8 to RM3.4 billion per annum).
"We believe the estimated S$709 million (approximately RM1,730 million) total investment cost is better spent on its higher-margin plantation operations," it said in a research note today.
The research house maintains a "hold" rating on IOI. -- Bernama
HwangDBS keeps "buy" call on TNB
Company Name: TENAGA NASIONAL BHD
| Research House: HWANGDBS | Price Call: BUY | Target Price: 7.00 |
Tenaga Nasional Bhd (TNB) was among the top losers, losing 13 sen or 2.09 per cent to RM6.10 as at 10.30am today, as investors were concerned over the power utility giant's financial performance.
TNB reported yesterday RM224.7 million net loss for the first quarter ended November 2011 from RM716.5 million net profit in the same period in 2010 due to persistent higher use of oil and distillates.
However, the power company was confident to return to profitability in the second quarter ending February 2012 as it will receive RM2 billion in compensation from the government and Petronas.
HwangDBS Vickers Research said TNB could expect stronger earnings over the next few quarters with the recognition of gas compensation and gradual increase in gas supply to 1,150 million standard cubic feet per day (mmscfd).
The research house maintained "buy" call on TNB for strong earnings recovery.
"We expect TNB's earnings to recover strongly in the 2012 financial year following the RM2 billion gas compensation and increase in gas supply to 1,150 mmscfd," it said in a research note.
It said the gas shortage issue should be resolved following completion of Petronas Gas Bhd's new regas plant in July.
TNB received RM1 billion compensation from the government due to gas shortages and Petronas will pay the balance RM1 billion in the next few months.
Besides the RM2 billion claim, TNB will continue to ask for compensation as the current gas supply still falls below the agreed supply of 1,350 mmscfd.
HwangDBS Research said the gas compensation approval demonstrated TNB's ability to pass on costs increases through the "cost pass through" mechanism. -- BERNAMA
A Second Passage In India?
Company Name: AXIATA GROUP BERHAD
| Research House: OSK | Price Call: BUY | Target Price: 5.60 |
Uncertainty Remains
Company Name: TENAGA NASIONAL BHD
| Research House: OSK | Price Call: HOLD | Target Price: 6.36 |
Significantly higher loan growth target for FY12
Company Name: MALAYSIA BUILDING SOCIETY BHD
| Research House: AMMB | Price Call: BUY | Target Price: 2.70 |
Workboat Contract Extension
Company Name: DAYANG ENTERPRISE HOLDINGS BHD
| Research House: OSK | Price Call: BUY | Target Price: 2.70 |