August 31, 2012

August 27, 2012

APM Automotive Holdings Bhd RR 2Q FY2012

Stock Name: APM
Research House: WILSON & YORKPrice Call: BUYTarget Price: 6.00

New outlets gaining traction

Stock Name: AEON
Company Name: AEON CO. (M) BHD
Research House: TAPrice Call: SELLTarget Price: 10.05

ICT is next growth driver beyond Unifi

Stock Name: TM
Research House: TAPrice Call: HOLDTarget Price: 6.17

Kenanga maintains 'outperform' call on DiGi

Stock Name: DIGI
Company Name: DIGI.COM BHD
Research House: KENANGAPrice Call: BUYTarget Price: 5.20

Kenanga Research is maintaining an "outperform" rating on with a 31.3 per cent total return year-to-date
against an average 28.5 per cent for the telecommunications sector and 10 per cent in the FBMKLCI.

Kenanga in its research note today said despite the hefty year-to-date performance, the stock is still able to provide a 6.6 per cent capital upside, judging by its minimum annual dividend commitment and higher than historical average and FBMKLCI dividend yield.

"While we are keeping our financial year 2012 to 2014 earnings forecast unchanged, we have raised our targeted financial year 2013 Enterprise Value/Earnings Before Interest, Taxes, Depreciation and Amortisation (EV/EBITDA) to 12.9 times (+3SD) from 10.8 times (+2SD) previously.

"Hence our DiGi target price has been raised from RM4.68 to RM5.20 implying a dividend yield of 4.3 per cent for financial year 2013," it said.

It said the stock could have some yield compression going forward given that investors are still chasing for safe haven and defensive shelters in the current volatile market.

"The company's outlook remains intact in our view with potential for more strategic collaborations with Celcom in the future," it said.

It said the recent 4G network collaboration between Maxis and Redtone could also prompt both DiGi and Celcom to restrategise their 4G network plans.

However, the research house said the inflection point of DiGi's strong share price performance could be peaked should there be fewer concerns on the external risks and when its historical volatility trend lines start to converge.

"Based on our observation, the company share price has yet to reach its climax given that the historical volatilities of DiGi have yet to swing to the extreme end as it is still below the historical mean at this juncture.

"We believe the turning point for DiGi's share price could potentially emerge if the historical volatility trend lines of 13 days, 21 days, 34 days and 55 days start to converge and follow with a pike in volatility," it said. -- Bernama

AmResearch maintains 'buy' call on Press Metal

AmResearch Sdn Bhd has maintained its 'Buy' call on Press Metal Bhd with a lowered fair value of RM2.42, to account for a
softer first half of 2012 for the global aluminium market as macro cycles remained fluid.

Against this backdrop, the research house said it expected Press Metal's upcoming second quarter 2012 results, scheduled for release this week, to be relatively weak.

"Benchmark aluminium prices fell nine per cent quarter-on-quarter to US$1,978 per tonne in the second quarter as buying sentiment turned cautious on account of weaker macro data points," it said in a statement.

Hence, AmResearch has trimmed Press Metal's forecast core net profits for the 2012-2014 financial years by seven to 14 per cent on more conservative pricing assumptions and some initial start-up cost for its new aluminium smelter at Samalaju.

However, it said the company's prospects should be lifted by additional capacity kickers moving into the second half of this year. With construction completed and pre-testing works ongoing, commercial operations are pencilled in for launch in the fourth quarter of 2012 financial year.

"Abroad, our channel checks reveal that aluminium prices may rebound in the coming months on renewed hopes of policy easing – notably in China," it added.

Therefore, AmResearch continues to like Press Metal for its transformational growth prospects as one of only two aluminium smelters operating within a growing Asean market. -- Bernama

Kenanga raises Aeon target price

Stock Name: AEON
Company Name: AEON CO. (M) BHD
Research House: KENANGAPrice Call: BUYTarget Price: 10.70

Kenanga Research raised its target price of retail store operator Aeon Co (M) Bhd to RM10.70 per share from RM9.54,
citing a stronger growth outlook in the second half of the year.

The move comes despite the company's first-half earnings coming in lower than expected, with net profit almost flat, growing only 0.6 per cent year-on-year.

"Sales in the second half of the year should be better due to the festive season," Kenanga said in a research note on Monday.

Maintaining its 'market perform' call on the counter, the research house retained its earnings estimates for the financial years 2012 and 2013.

As of 10.35 am, Aeon's shares gained 1.79 per cent against the Malaysian benchmark stock index's 0.04 per cent rise. - Bernama

HwangDBS cuts MBM Res to 'hold'

Stock Name: MBMR
Research House: HWANGDBSPrice Call: HOLDTarget Price: 4.30

HwangDBS Vickers Research downgraded motor manufacturer MBM Resources Bhd to 'hold' from 'buy', saying that the stock's valuations have peaked despite its stable fundamentals.

"We downgrade MBM to hold because the earnings upside have been largely priced in," HwangDBS said in a note today.

The research house added that the stock is currently trading near its peak with a limited 14 per cent upside.

HwangDBS however raised MBM's target price to RM4.30 per share from RM3.80, adding that catalysts include a planned vehicle assembly plant and stronger demand for its alloy wheel business. - Reuters

Rimbunan Kaseh to come in next quarter

Stock Name: IRIS
Research House: TAPrice Call: BUYTarget Price: 0.31