July 27, 2012

Maxis drops after billionaire sells 5pc stake

Stock Name: MAXIS
Company Name: MAXIS BERHAD
Research House: RHBPrice Call: HOLDTarget Price: 6.30

Maxis Bhd, Malaysia's biggest mobile phone operator, dropped the most in almost six months in Kuala Lumpur trading after billionaire Ananda Krishnan sold a RM2.34 billion stake in the company.

The company fell 2.3 per cent, its steepest drop since Jan. 30, to RM6.39 as of 10:44 a.m. local time, after slumping to RM6.35, the lowest since it was listed in November 2009. The stock was also the biggest loser on the benchmark FTSE Bursa Malaysia KLCI Index of stocks, which rose 0.2 per cent.

Maxis Communications Bhd, majority-controlled by billionaire Ananda Krishnan and Saudi Telecom Co, sold 375 million shares, a 5 per cent stake, yesterday, two people familiar with the matter said. At RM6.28 apiece, the stock was priced 4 per cent less than its closing price of RM6.54 yesterday, said the two people who declined to be named because the information is private.

"The placement exercise may create share overhang and may cause downward pressure on Maxis's share price," Lim Tee Yang, an analyst at Kuala Lumpur-based RHB Research, a unit of RHB Capital Bhd, said in an interview today. "Based on the book- building closing of RM6.28 a share, Maxis's net dividend yield, while still attractive at 6.3 per cent, is not cheap at 20.7 times FY13 price-earnings."

The brokerage has a market perform call on Maxis with a fair value of RM6.30 a share. Market perform means the stock's return is expected to be in line with the benchmark KLCI Index index over the next six to 12 months, according RHB Research.

Keith Pereira, Maxis's head of media, couldn't be immediately reached for comments via mobile phone. -- Bloomberg

SapuraKencana's target price raised

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

Hong Leong Investment Bank Research raised its target price on shares of SapuraKencana Petroleum Bhd to RM2.68 from RM2.60 after the oil and gas services firm won two OandG contracts worth up to RM300 million.

As of 10.04am, shares in SapuraKencana rose 0.43 percent to RM2.36 ringgit against the Malaysian benchmark stock index's 0.03 percent gain.

"We view the contract award positively and in line with our view that SapuraKencana is a proxy to global growth in offshore OandG production growth," Hong Leong said in a note on Friday.

Keeping its "buy" rating on the company, the research house said the award highlights SapuraKencana's specialised knowledge in gas-related fabrication and offshore field work. -- Reuters

July 26, 2012

July 25, 2012

HLIB maintains 'buy' call on Sunway

Stock Name: SUNWAY
Research House: HLGPrice Call: BUYTarget Price: 2.93

Hong Leong Investment Bank (HLIB) said today the lower revised target price was mainly due to the postponement of RM300
million gross development value (GDV) for Sunway Geo at South Quay and RM180 million GDV in Tianjin, China.

The investment bank said it was maintaining its "buy" call on Sunway Holdings Bhd's shares with a revised target price of RM2.93 from RM3.20.

"Although investors may perceive this negatively, we have to firstly understand that Sunway tends to launch its products at a premium of some 10 to 30 per cent compared to its neighbouring developments.

"Due to the premium pricing, the take-up rate for Sunway's launches have been slower compared to the rest of its peers," it said in a research note.

The research house welcomed Sunway's decision to rollback its new launches as it would avoid having unnecessary working capital tied-in and with a higher take-up rate target, it would translate to faster monetisation of Sunway's development projects.

"Hence, we believe we are beginning to see the positive changes arising from the merger in the form of prudent risk-adjusted development ventures to ensure shareholders' interests are protected," it added. -- Bernama

TH Plantations - Big acquisition in the pipeline

Stock Name: THPLANT
Research House: BIMBPrice Call: BUYTarget Price: 2.80

Evolving with Technology

Stock Name: NEXTNAT
Research House: TAPrice Call: SELLTarget Price: 0.10

July 24, 2012

Solid 2Q12 results despite intense competition

Stock Name: DIGI
Company Name: DIGI.COM BHD
Research House: TAPrice Call: HOLDTarget Price: 4.78

1H FY12 Results Within Expectations

Stock Name: PBBANK
Research House: TAPrice Call: BUYTarget Price: 16.40

Hua Yang Bhd RR 1Q FY 2013

Stock Name: HUAYANG
Company Name: HUA YANG BHD
Research House: WILSON & YORKPrice Call: BUYTarget Price: 2.28

HwangDBS keeps 'buy' call on Axis REIT

HwangDBS Vickers Research has maintained its "buy" call for Axis Real Estate Investment Trust, with RM3.05 target price, backed by its attractiveness for its on-going asset enhancement.

It said the "buy" recommendation relied on its active approach to in-organic growth and stable portfolio of long-term leases and resilient asset profile including primarily warehouse and industrial properties.

"The second quarter 2012 core earnings were 31 per cent higher year-on-year at RM21 million, underpinned by higher turnover and net profit interest margin," the research house said in a statement today.

HwangDBS said the revenue grew 19 per cent year-on-year, underpinned by full contributions from the Seberang Perai Warehouse 3 and Bayan Lepas Distribution Centre.

Meanwhile, the 85 per cent net profit interest margin was attributed to lower costs associated with maintaining the above mentioned properties.

"As a result, the first half of 2012's RM41 million core net profit was in line with expectations," it added.

The trust declared 4.4 sen per unit distribution amounting to 96 per cent payout. -- Bernama

MIDF raises Public Bank to 'buy'

Stock Name: PBBANK
Research House: MIDFPrice Call: BUYTarget Price: 16.10

MIDF Research raised Public Bank Bhd to "buy" from "neutral," citing a strong growth in retail loans after the country's third largest lender reported its second-quarter earnings on Monday.

"The group has a resilient customer base and its exposure to high-end properties lending which is experiencing a slowdown in demand is relatively small," the broker said in a research note.

Public Bank's net profit for the second quarter rose 1.3 percent quarter-on-quarter to RM952.7 million, while its first-half net profit increased 3 percent year-on-year to RM1.89 billion.

MIDF said Public Bank's prudence in credit underwriting has improved its overall gross impaired loan ratio for key loans sectors of small and medium enterprises, housing loans, and hire purchase financing.

The research house also increased its target price on the stock to RM16.10 from RM14.50.

As of 10.03am, Public Bank's shares dropped 0.28 percent on the Malaysian benchmark stock index which fell 0.31 percent. -- Reuters

RHB raises DiGi's fair value to RM4.80

Stock Name: DIGI
Company Name: DIGI.COM BHD
Research House: RHBPrice Call: BUYTarget Price: 4.80

RHB Research raised its fair value on the country's third-largest mobile phone operator DiGi.Com Bhd to RM4.80 from RM4.40 after the firm's first-half earnings came in within expectations despite stiff competition.

"Operationally, DiGi has largely sustained its revenue growth momentum while margins do not appear overly affected despite tougher competition from Maxis," RHB said in a note on Tuesday.

The research house raised its FY2012 payout ratio assumption from 100 percent to 120 percent, and expects DiGi to declare a dividend per share (DPS) of 20 sen in the same financial year.

Keeping its "outperform" call on the stock, RHB said tax credits and cost savings would help DiGi sustain its earnings growth outlook.

As of 9.16am, DiGi's shares gained 1.13 percent against the Malaysian benchmark stock index's 0.21 percent rise. -- Reuters

July 23, 2012

RHB ups CapitaMalls' fair value

Stock Name: CMMT
Research House: RHBPrice Call: HOLDTarget Price: 1.69

RHB Research raised CapitaMalls Malaysia Trust's fair value to RM1.69 per share from RM1.45, citing the real estate investment trust's (REIT) defensive nature.

"We continue to believe that defensive stocks with yields will still be in favour for investors in the near term, especially in times of economic uncertainties," the research house said in a note on Monday.

Maintaining "market perform' on the counter, RHB said CapitaMalls' manager believed that Malaysian REIT's yields were still sustainable, given that the country's larger REITs were still trading above the Malaysian government securities bonds.

By 9:38am , CapitaMalls shares rose 2.55 percent to RM1.61, outperforming the broader index's 0.14 percent drop. -- Reuters