May 17, 2012

1Q/FY12 results - revenue within expectations but NPATMI below. Maintain Buy Call with revised TP.

Stock Name: TOMEI
Research House: MERCURYPrice Call: BUYTarget Price: 0.93

Affin upgrades MISC to 'trading buy'

Stock Name: MISC
Company Name: MISC BHD
Research House: AFFINPrice Call: TRADING BUYTarget Price: 4.70

Affin Investment Bank upgraded MISC Bhd to "trading buy" from "reduce" with a target price of RM4.70 per share, citing undemanding valuations for the shipping firm.

"MISC's share price has plunged by more than 40 percent (over the last one year) falling to a low of RM3.94 a share yesterday, which implied an attractive valuation...," the broker said in a research note on Thursday.

Affin said it believed the recent strong selling is excessive and could be propelled by foreign investors.

MISC reported a net loss of RM465.08 million for its first quarter ended March 31, 2012 dragged down by losses from the liner, petroleum and chemical segments. -- Reuters

Maybank IB: SapuraKencana a 'buy'

Stock Name: SKPETRO
Research House: MAYBANKPrice Call: BUYTarget Price: 2.68

Maybank IB Research started Malaysia's SapuraKencana Petroleum with a "buy" call and a target price of RM2.68 (US$0.86) per share, citing a strong earnings outlook.

"The valuation target is decent, in our view, considering the strong earnings growth outlook over the next 3 years and its balance sheet strength," said the broker in a research note on Thursday.

Maybank expects the oil and gas service provider to deliver net profits between RM615 million and RM823 million in FY1/13-15, anchored by its installation of pipelines and facilities (IPF), engineering, procurement, construction (EPC) and drilling divisions.

SapuraKencana was created by a merger of oil and gas services firms SapuraCrest and Kencana.

"We think SapuraKencana has an even chance to be featured in the FBM KLCI 30 Index in the coming June review should its market capitalization hits above RM13 billion," it added.

SapuraKencana shares opened 2.67 percent above its reference price of RM2.24 a share on its debut on the Malaysia bourse on Thursday.

Shares slipped below the reference price by 9.37am, underperforming the Malaysian benchmark stock index which rose 0.56 percent. -- Reuters

May 16, 2012

MIDF upgrades Kinsteel to 'buy'

Stock Name: KINSTEL
Company Name: KINSTEEL BHD
Research House: OSKPrice Call: HOLDTarget Price: 0.49

Stock Name: KINSTEL
Company Name: KINSTEEL BHD
Research House: MIDFPrice Call: BUYTarget Price: 0.51

OSK Research is maintaining a "neutral" call on steel manufacturer, Kinsteel Bhd, saying that it was not pinning too much hope on its business since the implementation of mega projects under the Economic Transformation Programme may encounter delay.

"However, we expect the better iron-making margin from cheaper iron ore pellets to more than compensate for the negative impact arising from the potential delay in the commissioning of the concentration and pelletization plant at Perwaya, Kinsteel's subsidiary," OSK Research said in its research notes.

OSK is maintaining its "neutral" call on Kinsteel with unchanged fair value of 49 sen.

MIDF Research, however, has upgraded its call to "buy" from a "neutral" recommendation on Kinsteel with a target price of 51 sen.

"Domestically, we expect orders for steel bars to be sustained at least in the next five to 10 years as there are plenty of sizeable construction projects currently ongoing, with more to be awarded," MIDF Research said.

MIDF Research said Kinsteel's stock price has declined by 15.7 per cent year to date.

"We believe that investors may have over-imputed the external risks for this stock. Hence, given the ample upside of 20 per cent, we are upgrading Kinsteel to 'buy'," MIDF Research said.

Kinsteel swung to profit after six quarters of net losses. It delivered a net profit of RM10.3 million for first quarter financial year 2012.

As at 4.34 pm, Kinsteel rose one sen to 43.5 sen. -- BERNAMA

May 15, 2012

Maybank IB upgrades Media Prima

Stock Name: MEDIA
Research House: MAYBANKPrice Call: HOLDTarget Price: 2.34

Maybank IB Research upgraded Media Prima Bhd to "hold" from "sell" previously with an unchanged target price of RM2.34 per share as it expected the worst was likely over for the media conglomerate.

"We expect first quarter ended March 31, 2012 results to be weak (for Media Prima) but following quarters to be stronger on recovering advertising expenditure (adex) sentiment," the broker said in a research note on Tuesday.

Maybank IB said adex sentiment was on the mend as consumer sentiment had recovered strongly.

It added such trend boded well for adex growth in the second quarter, especially in time for the Euro Cup, London Olympics and possibly the 13th General Elections in Malaysia.

By 10.24am, Media Prima's shares rose 5.38 percent to RM2.35 per share, outperforming the Malaysia's benchmark stock index that shed 0.85 percent. -- Reuters

PublicInvest starts KPJ with 'outperform'

Stock Name: KPJ
Research House: PUBLIC BANKPrice Call: BUYTarget Price: 7.14

PublicInvest Research started KPJ Healthcare Bhd with an "outperform" call and target price of RM7.14 per share, citing plenty of room for growth for the Malaysia's largest healthcare provider going forward.

"We like KPJ for its proven track record of growing its revenue and earnings consistently for the past ten years, the recession-proof nature of its business and promising long-term growth prospects," the broker said in a research note on Tuesday.

PublicInvest said KPJ enjoyed the benefits of a captive market as patients do not have other choices for private healthcare unless they travel to other places.

"As the main private hospital in Malaysia, KPJ also stands to benefit from the spillover effect of overcrowded public hospitals," it added.

By 9.32am, KPJ's shares was unchanged at RM5.78 per share, as compared with the Malaysia's benchmark stock index that dropped 1 percent. -- Reuters

May 14, 2012

Kenanga raises MBSB's target price

Stock Name: MBSB
Research House: KENANGAPrice Call: BUYTarget Price: 2.70

Kenanga Research lifted Malaysia Building Society Bhd's (MBSB) target price to RM2.70 per share despite the lender's first quarter earnings result came in marginally below expectations.

"The stock's valuation still looks undemanding at 5.9 times price-to-earnings ratio post adjustment, against its banking peers of 13.0 times," the broker said in a research note on Monday.

Maintaining "outperform" on the stock, Kenanga said MBSB offered potential capital upside of 21 percent, with an additional dividend yield of 2.5 percent, bringing the potential total return to 23 percent over the next 12 months.

"Its return on equity of 28.1 percent remains one of the highest for financial stocks," it added.

By 10.25am, MBSB's shares dropped 1.33 percent to RM2.23 per share, underperforming the Malaysia's benchmark stock index that shed 0.19 percent. -- Reuters

Kimlun's target price lifted to RM2.07

Stock Name: KIMLUN
Research House: KENANGAPrice Call: BUYTarget Price: 2.07

Kenanga Research raised its target price on Kimlun Corp Bhd to RM2.07 per share after the builder won a RM148.5 million construction project to build apartments last Friday.

"We tweaked our fiscal year ending Dec 31, 2012 (FY2012) and FY2013 earning forecast higher by seven and 23 percent, respectively, we have factored in additional contract replenishment in FY2012 and maintain our 500 rth of new contract assumption in FY2013," the broker said in a research note on Monday.

Maintaining "outperform" on the counter, Kenanga said it was satisfied with Kimlun's contract flow in FY2012 thus far and it believed Kimlun could be able to secure more contracts in the period of six to 12 months.

By 10.00am, Kimlun's shares rose 0.64 percent to RM1.57 per share, outperforming the Malaysian benchmark stock index that dropped 0.16 percent. -- Reuters

Maybank IB upgrades Kinsteel to 'buy'

Stock Name: KINSTEL
Company Name: KINSTEEL BHD
Research House: MAYBANKPrice Call: BUYTarget Price: 0.49

Maybank IB Research upgraded Kinsteel Bhd to "buy" as it expected the steel manufacturer to turn around in its upcoming earnings result on lower iron ore cost and better local sales.

"After posting losses in the past six quarters and the inventory write-down of RM94 million in the fourth quarter of last year, we expect the company to turn profitable in the first quarter of this year," the broker said in a research note on Monday.

Maintaining a target price of 49 sen on the counter, Maybank IB said Kinsteel's margins should recover given that iron ore pellet cost had fallen by 15 percent quarter on quarter while steel average selling price had risen by 10 percent.

"Additionally, the sales volume at its downstream division (steel bars and rods) has also seen some improvement," it added.

By 9.33am, Kisteel shares dropped 1.19 percent, underperforming the Malaysian benchmark stock index that dropped 0.20 percent. -- Reuters

Continue fading on gloomy outlook

Stock Name: JADI
Research House: TAPrice Call: HOLDTarget Price: 0.16