April 24, 2013

Analysts neutral over Kimlun's contract

Stock Name: KIMLUN
Research House: KENANGAPrice Call: BUYTarget Price: 1.77

Analysts are neutral over Kimlun Corp's RM64.3 million contract to construct 268 units of houses in Kulaijaya, Johor.

Kenanga Research in a research note today said the contract should make up part of its order book replenishment assumption of RM500 million for financial year 2013.

It said the project is scheduled to be completed by July 2014 and expects the gross margin to hover at about 10 per cent.

"Assuming a net margin of seven per cent, the whole project will contribute about RM4.5 million in total to Kimlun's bottomline for financial year 2013 and 2014," it added.

Going forward, Kenanga Research believes that Kimlun would continue to eye more building projects in the Klang Valley and Johor, given its competitive edge in building projects, which require 70 per cent pre-cast components.

Kimlun has a strong track record of expertise in the pre-cast industry.

Meanwhile, Alliance Research in a separate note, remained positive on Kimlun as a direct proxy for increasing developments at Iskandar Malaysia.

It said Kimlun's forte in the industrialised building system has also an added advantage in bidding for building type jobs from developers.

Kenanga has maintained an "outperform" view on Kimlun with a target price of RM1.77, while Alliance has stuck to a "buy" call with an unchanged target price of RM2.07.

As at 11am, Kimlun's share price stood at RM1.54, improving three sen or 1.98 per cent, with 184,000 shares traded.-- Bernama

Censof's long-term outlook to remain intact

Stock Name: CENSOF
Research House: KENANGAPrice Call: BUYTarget Price: 0.56

Kenanga Research believes Censof Holdings Bhd's long-term outlook will remain intact underpinned by its active tendering of contracts in Indonesia and Malaysia for its financial management software solution segment.

The outlook was being fueled by its continued projects and contract flow from various government agencies, as well as, the possible implementation of good and services tax after the general election.

"In addition, the latest contract award of RM6.1 million by the Inland Revenue Board falls within our assumption as we had previously estimated the group to clinch RM16.9 million worth of contracts in the second quarter of this year," it said in a statement.

While Kenanga Research was positive on the project awarded, it has realigned the latest project flow by lowering Censof's financial year 2013 revenue assumption by 5.1 per cent to RM69.6 million.

"The lower revenue assumption has prompted us to reduce our financial year 2013 net profit by three per cent to RM16.4 million," it said while maintaining the outperform rating on the stock with a lower target price of RM0.56 from RM0.61 previously.-- Bernama

UMW's share rises on contract extension

Stock Name: UMW
Research House: KENANGAPrice Call: BUYTarget Price: 14.00

UMW Holdings Bhd's share price rose today on the back of a US$130 million (US$1=RM3.05) contract extension from Petronas Carigali Sdn Bhd for the provision of a drilling rig.

As at 11am today, UMW share perked eight sen or 0.59 per cent, to
RM13.48, with 249,300 shares traded.

Kenanga Research in a note today viewed the contract extension as positive, given the higher charter rates of US$180,000 per day, as compared to the current US$139,000.

"We have adjusted our earnings forecast accordingly, although the impact is immaterial," it added.

The research firm also expects UMW and its subsidiary, Perodua, to retain their leadership in the non-national and national passenger car segment respectively.

UMW announced yesterday that it has been awarded a contract extension for the NAGA 1 contract for a further period of two years, commencing August 20, 2016.

Kenanga has maintained a "market perform" view on UMW with a higher target price of RM14 from RM12.53 previously.-- Bernama

Public Bank cuts DiGi target price

Stock Name: DIGI
Company Name: DIGI.COM BHD
Research House: PUBLIC BANKPrice Call: BUYTarget Price: 5.40

Public Bank Investment Research cut its target price for DiGi.Com Bhd to RM5.40 from RM5.59, saying the telecommunications company's first-quarter results were below expectations.

"We consider the results to be slightly below expectations. We expect its net profit to pick up in the second half, after the completion of its network modernisation and lower sales in subsequent quarters," said Public Bank in a report on Wednesday.

The brokerage maintained an 'outperform' rating on the company.

Revenue for the quarter ended March 31 rose 4.9 per cent to RM1.65 billion on higher data earnings and handset sales, while net profit improved on lower tax expenses and higher depreciation charges.

Shares of DiGi were down 1.08 per cent at RM4.59 ringgit while the benchmark index had gained 0.2 per cent as at 9.39am.-- Reuters

RHB cuts Public Bank to 'neutral'

Stock Name: PBBANK
Research House: RHBPrice Call: HOLDTarget Price: 16.80

RHB Research downgraded Public Bank Bhd to 'neutral' from 'buy', citing limited upside expectations on the country's third-largest lender by assets.

"We think much of the positives have already been reflected at the current price level, thus limiting further upside potential," RHB said in a note to clients on Wednesday.

Public Bank's first-quarter results in its financial period ended March 31 held no major surprises and suggests that the group is on track to meet its 2013 targets, RHB added.

The research house kept its fair value on the stocks of the lender at RM16.80.

Shares of Public Bank were up 0.12 per cent against the benchmark index's 0.23 climb.-- Reuters

Naga-1 contract extended for another 2 years

Stock Name: UMW
Research House: MIDFPrice Call: HOLDTarget Price: 13.15

Sturdy domestic retail loans growth

Stock Name: PBBANK
Research House: MIDFPrice Call: BUYTarget Price: 17.10

Modest growth as expected

Stock Name: DIGI
Company Name: DIGI.COM BHD
Research House: MIDFPrice Call: HOLDTarget Price: 4.80

Market leadership position strengthened

Stock Name: BAT
Research House: MIDFPrice Call: HOLDTarget Price: 58.67

Growth Slowed Down

Stock Name: AMEDIA
Research House: TAPrice Call: SELLTarget Price: 0.105

April 23, 2013

April 22, 2013