September 28, 2012

Another record-breaking year

Stock Name: GAMUDA
Company Name: GAMUDA BHD
Research House: MIDFPrice Call: BUYTarget Price: 4.32

Resurgence in the Offing?

Stock Name: KWANTAS
Research House: TAPrice Call: SELLTarget Price: 2.03

Decent Quarter but Profit Margin Contracts

Stock Name: NEXTNAT
Research House: TAPrice Call: BUYTarget Price: 0.13

Public Inv starts MPHB with 'outperform'

Stock Name: MPHB
Research House: PUBLIC BANKPrice Call: BUYTarget Price: 3.79

Public Investment Bank started financial services-to-gaming conglomerate Multi-Purpose Holdings Bhd (MPHB) with an 'outperform' call and target price of RM3.79 per share, citing attractive value after the demerger of the firm's gaming and non-gaming businesses.

"Growth opportunities may be found in MPHB Capital, and shareholders of MPHB may well benefit from the value unlocked on both sides post demerger," Public Investment said on Friday.

The research house said growth plans for MPHB's insurance arm include a partnership with budget carrier AirAsia Bhd for travel insurance, customised policies for corporations and tie-ups with golf courses.

"While competition may be stiff we believe Multi-Purpose Insurans Bhd (MPIB) is able to benefit from niche markets," the research house added.

Shares in MPHB rose 0.6 per cent while the Malaysian benchmark stock index also rose 0.6 per cent. - Reuters

TA raises target price for Gamuda

Stock Name: GAMUDA
Company Name: GAMUDA BHD
Research House: TAPrice Call: BUYTarget Price: 4.27

TA Securities raised its target price for Gamuda Bhd to RM4.32, a 27 per cent premium to the stock's last closing price, from RM4.27 earlier, after the company reported record net profit.

Gamuda's net profit for the financial year ended July 31 rose nearly 30 per cent to RM547.3 million from RM432.9 million previously, due to higher contributions from its construction and property businesses.

Gamuda is hoping to get contracts worth 10 billion ringgit while work on the country's Mass Rapid Transit (MRT) project has been progressing according to schedule, the company told analysts in a briefing. It said 7 per cent of the project was complete, with RM19 billion worth of contracts awarded to date.

"Gamuda is one of our top picks for the sector, we believe it is a direct proxy to the robust construction outlook for this year given its status as one of the leading contractors in Malaysia," said TA in a report on Friday. TA maintained its 'buy' call for the stock.

Shares of Gamuda traded 1.47 per cent higher at RM3.45, recovering from its lowest point since January. - Reuters

OSK reiterates 'trading buy' call on P. Niaga

KUALA LUMPUR: OSK Research Sdn Bhd has reiterated a "trading buy" call on Puncak Niaga Holdings Bhd with a fair value of RM2.08 following its proposed free warrant and convertible sukuk.

"The free warrant is indeed a sentiment booster," it said in a note today.

As at lunch break, Puncak Niaga's stock price was two sen better at RM1.31, with 349,100 lots traded.

The research house said the proposed convertible sukuk issuance also suggested that the group may move to expand its footprint into the lucrative oil and gas field.

"The management may focus its acquisition target to players within this industry in a bid to further diversify its income flow from water to oil and gas," it said.

Puncak Niaga has proposed to issue up to 40.9 million free warrants on the basis of one warrant for every 10 existing ordinary shares.

The company also proposed a 5-year redeemable convertible secured sukuk of up to RM165 million in nominal value. -- BERNAMA

Masteel profits to remain volatile: OSK

KUALA LUMPUR: Malaysia Steel Works (KL) Bhd's (Masteel)
profits are expected to remain volatile, especially in view of the plunging steel prices, said OSK Research Sdn Bhd.

In a note today, OSK said despite despite the bullishness over the company's growing tonnage, there has been no firm guidance from its management on upcoming profits.

"This is understandable considering that steel prices are heading south again," it said.

OSK said progress on Masteel's proposed rail project in Iskandar Malaysia was also slow despite firm commitment from the management.

It said the rollout of mega projects under the Economic Transformation Programme (ETP) to be long-drawn, at least until the general election.

"We do not foresee any major surprises in the company's profits in the medium term, particularly the second half of financial year 2012 although the initial commencement of some ETP projects may be sufficient to keep local prices relatively strong than the international spot price.

"Masteel's stringent inventory policy may help reduce the time lag for it to enjoy lower material costs," it said.

OSK has maintained its 'neutral' call on the stock at fair value of 83 sen. -- BERNAMA

September 27, 2012

Hong Leong upgrades IJM to 'buy'

Hong Leong Investment Bank upgraded IJM Corp Bhd to "buy" from "trading buy" after shares of the construction firm plunged on its purchase of a 10 percent stake in its peer Scomi Group Bhd.

"We believe that the recent sell down is sentiment driven due to the negative perception on Scomi's political linkages," the research house said in a note on Thursday.

Maintaining a target price of RM5.48 per share on IJM, Hong Leong said it believed any price weakness is an opportunity to accumulate the stock, even though selling pressures may persist. -- Reuters

Auto Report - September

Stock Name: UMW
Research House: MIDFPrice Call: BUYTarget Price: 11.70

Berjaya Corporation Berhad - 1QFY13 RESULTS - Bumpy road ahead

Stock Name: BJCORP
Research House: CIMBPrice Call: HOLDTarget Price: 0.70

O&G as a new long-term growth catalyst

Stock Name: IJM
Research House: MIDFPrice Call: BUYTarget Price: 6.75

September 26, 2012

Tobacco - No excise hike expected in Budget 2013

Stock Name: BAT
Research House: MIDFPrice Call: HOLDTarget Price: 56.52

And the ball keeps on rolling

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

Getting Additional Contract from "D" Customer

Stock Name: SKPRES
Research House: TAPrice Call: BUYTarget Price: 0.58

Alliance Financial upgraded to 'buy'

Stock Name: AFG
Research House: HLGPrice Call: BUYTarget Price: 4.53

Hong Leong Investment Bank (HLIB) Research upgraded Alliance Financial Group Bhd to "buy" from "hold", after the company said it plans to dispose of a subsidiary.

Alliance Financial will sell its 70 percent stake in Alliance Investment Management Bhd (AIMB) for RM12.3 million, pending approval from the Securities Commission, the company said on Tuesday.

The stake in AIMB will be sold to Abu Talib Othman, who currently owns the remaining 30 percent.

Hong Leong said the sale would allow Alliance to focus on marketing other wealth management products and boost sales.

AIMB's revenue rose 11.1 percent to RM2.1 million last year, when it had RM2.3 billion in assets under management.

Alliance has also demonstrated strong asset quality and positive results from its new business strategies, the research house said. It said the stock has fallen 6.5 percent since Aug.
16, although the prospects have improved since then.

"Given that the potential upside is over 10 percent now, along with the expectation of a 4 percent dividend yield, we are compelled to upgrade our rating to 'buy'," Hong Leong said.

It maintained a fair value of RM4.53 for Alliance, which was trading at RM4.02. -- Reuters

Felda Global gets 'market perform' call

RHB Research initiated coverage of Felda Global Ventures Holdings Bhd with a "market perform" rating and target price of RM5, a small premium to the stock's last closing price of RM4.88.

"We initiate coverage on Felda with this recommendation due to its relatively sober earnings growth and our downward projections for crude palm oil (CPO) prices, and similarly unexciting valuations," RHB Research said on Wednesday.

RHB projects a three-year compound annual growth rate (CAGR) of 4.9 percent for Felda. It expects 1.3 percent growth for the current year and 6.4 percent to 7.1 percent for the next two years. It adds that Felda's disposal of non-core and non-performing assets, which are weighing earnings down, may be the catalyst for a rerating.

Felda has been on a downward trend since its debut on the local bourse late July, last closing 10 percent lower than its initial offer price. The company's US$3.1 billion initial public offering was the biggest in Asia this year.

Felda shares were trading 0.21 percent lower at RM4.83. -- REUTERS

New Contract Win in Thailand

Stock Name: SKPETRO
Research House: TAPrice Call: BUYTarget Price: 3.06

Small Step into Oil, Gas and Energy Businesses

Stock Name: IJM
Research House: TAPrice Call: HOLDTarget Price: 5.77

September 25, 2012

Still in a transition phase but promising days ahead

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

1HFY13 Earnings on Track

Stock Name: SKPETRO
Research House: TAPrice Call: BUYTarget Price: 3.06

Public Invt starts Parkson with 'outperform'

Public Investment Bank initiated coverage on department store group Parkson Holdings Bhd with an "outperform" call and a target price of RM5.73 per share, citing a strong growth outlook.

Public Investment expects Parkson to report a bullish 10 percent compounded annual growth in 2013 financial year despite negative global sentiments.

Parkson's growth will be underpinned by its strategic expansion plans and resilient concessionaire-based business model, the research house said in a note on Tuesday.

Parkson shares were up 1.29 percent, outperforming the Malaysian benchmark stock index's 0.45 percent drop. -- REUTERS

September 24, 2012

Public Invt starts Maxis with 'neutral'

Public Investment Bank initiated coverage of Maxis Bhd, the country's largest mobile phone operator, with a "neutral" rating and a target price of RM7.26 per share, citing dismal growth prospects due to narrowing profit margins.

"Though we acknowledge progressive growth from the non-voice segment, we think Maxis' strategy of offering more competitive voice packages for the sake of reclaiming its subscriber losses will eventually depress its margins," Public Investment said in a note.

However, the research house said Maxis' downside risks will be cushioned by its dividend yield of 40 sen per share.

Maxis shares slipped 1.02 percent against the Malaysian benchmark stock index's 0.86 percent fall. -- Reuters

Exploring new frontiers

Stock Name: MSM
Research House: MIDFPrice Call: HOLDTarget Price: 4.90

Promising long-term growth

Stock Name: FGV
Research House: MIDFPrice Call: HOLDTarget Price: 5.27