September 14, 2012

HwangDBS maintains 'buy' on SP Setia

HwangDBS Vickers Research is maintaining a 'buy'" rating on SP Setia Bhd with a target price of RM5.10 following the launch of the recent development project in London.

In a note today, the research house said the rating was based on 10 per cent Revalued Net Asset Value (RNVA).

As at 4.20pm, the stock fell eight sen to RM3.70 with 894,000 shares traded.

SP Setia's RM40 billion Battersea development will be a game-changer, potentially doubling its earning and boost RNVA by more than 15 per cent, HwangDBS said.

The research house viewed this project positively given the strategic location, low entry cost, ready approval and favourable interest rate as well as forex environment. Bernama

JF Apex downwards Old Town's forecast

Stock Name: OLDTOWN
Research House: JF APEXPrice Call: HOLDTarget Price: 2.23

JF Apex Securities Bhd has revised downwards its revenue forecast on Old Town Bhd by 1.56 per cent and 4.61 per cent to RM326.2 million and 363.9 million respectively for the 2012 and 2013
financial years, citing the delay in its Ipoh factory construction as a factor.

In its research note today, JF Apex said the delay would cause the group's Fast Moving Consumer Goods (FMCG) division to lose a potential revenue of RM5.1 million and RM17.6 million in the 2012 and 2013 financial years respectively.

"However, we have upgraded the group's target price to RM2.23 from RM1.69, with a "hold" rating."

Meanwhile, in a separate research note, OSK Research Sdn Bhd said it remained positive of Old Town's prospects, driven by its kiosk outlets and growing overseas business.

"The company intends to launch its first kiosk this month or next month in the high-traffic malls of Suria KLCC and MidValley Megamall.

"This can potentially fuel the company's earnings as the payback period is estimated to be as fast as 12-18 months," the research house said.

OSK Research also expects Old Town's third quarter earnings to be subdued since the period coincided with the Ramadhan month, with earnings expected to amount to between RM8 million and RM9 million.

The research house maintained its "buy" call on the group, with an unchanged fair value of RM2.31. Bernama

On track to meet RM4b sales target

Stock Name: SPSETIA
Company Name: SP SETIA BHD
Research House: MIDFPrice Call: HOLDTarget Price: 3.86

Gas Malaysia a 'growing cash cow'

Stock Name: GASMSIA
Research House: KENANGAPrice Call: BUYTarget Price: 2.94

Kenanga Investment Bank started coverage on Gas Malaysia Bhd with an "outperform", saying the company is a "growing cash cow" thanks to future earnings growth and generous dividend payout.

Kenanga set a target price of RM2.94 on Gas Malaysia shares. The stock rose 0.4 percent to RM2.62 on Friday.

Kenanga said an expected fall in Gas Malaysia's earning in FY 2012 is expected to be limited as the firm has signed additional gas supply deal with state oil firm Petronas , potentially boosting 2013-15 earnings.

Gas Malaysia is the only firm licensed to supply and sell natural gas in mainland Malaysia where demand has been steadily growing.

"The company has committed to a 100 percent payout of its FY12 earnings and 75 percent for each year for FY13-FY14," Kenanga said in a note to clients.

"We see little problem for Gas Malaysia not to pay such a generous dividend given its relatively low capex requirement and sustainable earnings quality." -- REUTERS

September 13, 2012

Update Report

Stock Name: SNTORIA
Research House: NETRESEARCHPrice Call: BUYTarget Price: 0.89

Venturing to non-regulated business

Stock Name: TENAGA
Research House: MIDFPrice Call: BUYTarget Price: 7.82

Acquisition to Compromise Bottom Line

Stock Name: SOP
Research House: MIDFPrice Call: SELLTarget Price: 5.90

Another hospital on deck

Stock Name: KPJ
Research House: MIDFPrice Call: BUYTarget Price: 6.98

Diversifying into new businesses

Stock Name: SENDAI
Research House: MIDFPrice Call: BUYTarget Price: 2.10

Brownfield Acquisition in Perak

Stock Name: KPJ
Research House: TAPrice Call: BUYTarget Price: 7.41

Interrelated Diversification in the Pipeline

Stock Name: SENDAI
Research House: TAPrice Call: BUYTarget Price: 2.26

PPB Group Bhd RR 2Q FY2012

Stock Name: PPB
Company Name: PPB GROUP BHD
Research House: WILSON & YORKPrice Call: HOLDTarget Price: 13.68

September 12, 2012

September 11, 2012

'BIMB's move could be rerating catalyst'

KUALA LUMPUR: BIMB Holdings Bhd's potential corporate move to unlock the value of the group could act as its re-rating catalyst, Kenanga Research said.

Kenanga Research said the unique positioning of BIMB Holdings in the Islamic banking and Takaful areas should enable the group to deliver a faster balance sheet growth than other commercial banks.

The research house said this is due to the growth opportunities arising from Malaysia's ongoing development of Islamic banking.

"On the operating side, we believe its 12 per cent return-on-equity target is highly achievable despite the current gloomy environment," it said in a research note today.

It also expects BIMB Holdings to achieve an asset quality similar to its peers in two to three years on better management of its assets, adding a progressive reduction in credit costs may also boost its profitability.

The research house has maintained an "outperform" valuation on the company with a target price of RM3.60. -- BERNAMA

Research firms: SapuraKencana a 'buy'

OSK Research and Hong Leong Investment Bank have maintained "buy" call on SapuraKencana Petroleum as there are ample
opportunities to beef up its orderbook in coming months.

Despite having a strong orderbook, the oil and gas service provider still has room for new orders, especially from Petronas, which should be ramping up local explorations and production capital expenditures, OSK Research said.

"This is to temporarily substitute the production loss at Petronas' Sudan operations," it said in a research note today.

Hong Leong Investment Bank said it was positive on SapuraKencana Petroleum, which was recently awarded a contract for the charter of vessels to undertake heavy lifts in the Gulf of Mexico region.

It said the contract was in line with its view that SapuraKencana Petroleum was a proxy to global growth in offshore oil and gas production expansion.

"It also reaffirmed our expectations that the company is in an excellent position to secure more contracts," it said in a separate research note.

Meanwhile, Kenanga Research said SapuraKencana Petroleum was one of the main beneficiaries for new fabrication tenders coming up for the Dulang in offshore Terengganu, Semarang (offshore Sabah) and Bokor (offshore Sarawak) oilfields.

"We do not rule out another marginal field participation given that SapuraKencana Petroleum is one of the domestic oil and gas companies that has a big market capitalisation and skill sets to cater to most of the development stages of the oil and gas value chain," it added.

OSK Research has maintained RM2.88 fair value on SapuraKencana Petroleum. Hong Leong Investment and Kenanga Research's target price on the company was unchanged at RM2.77 and RM2.79, respectively. -- Bernama

ECS ICT outlook to remain bright: Kenanga

Stock Name: ECS
Company Name: ECS ICT BERHAD
Research House: KENANGAPrice Call: BUYTarget Price: 1.70

KUALA LUMPUR: Kenanga Research expects ECS ICT Bhd's outlook to remain bright, underpinned by robust information technology spending and encouraging market trends.

The research house anticipated a better second half performance from the information and communications technology (ICT) product distributor underpinned by stronger sales from all its business segments due to more product launches and seasonality factors.

However, it said in a research note today it was maintainig ECS ICT's "outperform" valuation and pre-bonus target price at RM1.70.

Nomura upgrades Axiata, cuts Maxis

Stock Name: AXIATA
Research House: NOMURAPrice Call: BUYTarget Price: 7.10

Stock Name: MAXIS
Company Name: MAXIS BERHAD
Research House: NOMURAPrice Call: SELLTarget Price: 6.20

Nomura upgraded Malaysian telco Axiata Group Bhd to "buy" from "neutral" on improving operational profits, expectations of investments boosting revenue in the coming years and strong cash flows.

It also raised Axiata's target price to RM7.10 per share from RM5.50.

"Although Axiata's share price is up 20 percent year to date, we still believe the above reasons should yield operational upside for the stock," Nomura said in a note to clients.

Axiata shares were down 0.3 percent on Tuesday. The stock however, represents a bright spot in the Malaysian telco sector that faces greater competition in the second half of this year that could keep a lid on operational profits, Nomura said.

Nomura cut Maxis Bhd to "reduce" from "neutral" as the current strength in its share price signals an opportunity to lock in profits given that earnings could be weaker in the future.

But Nomura still raised Maxis target price to RM6.20 per share from RM5.95 citing its strong dividend payout. -- REUTERS

Palm Report - MPOB - August - Stats

Stock Name: SIME
Company Name: SIME DARBY BHD
Research House: MIDFPrice Call: BUYTarget Price: 11.80

Sapura Kencana Petroleum - CorpUpdate

Stock Name: SKPETRO
Research House: MIDFPrice Call: BUYTarget Price: 2.74

Global healthcare leader

Stock Name: IHH
Research House: MIDFPrice Call: HOLDTarget Price: 3.26

Orderbook replenishment on track

Stock Name: SKPETRO
Research House: TAPrice Call: BUYTarget Price: 2.90

September 10, 2012