March 27, 2015
Company Name: CAHYA MATA SARAWAK BHD
|Research House: MAYBANK||Price Call: BUY||Target Price: 5.00|
KUALA LUMPUR: Cahya Mata Sarawak Bhd's (CMS) shares rose in the early session after its wholly-owned unit, Samalaju Industries Sdn Bhd (SISB), proposed to acquire an additional five per cent stake in OM Materials (S) Pte Ltd (OMS) from OM Holdings Ltd for US$18.45 million.
At 11 am, CMS's share price was up four sen to RM4.51 with 112,200 shares changing hands.
The acquisition, expected to complete by end-March this year, would increase SISB's stake in the ferrosilicon manganese alloy smelting plant in the Samalaju Industrial Park, Sarawak to 25 per cent with the remaining 75 per cent owned by OM Holdings.
Maybank Investment Bank views the deal as positive, saying it would enhance recurring income from CMS' investments in the Sarawak Corridor of Renewable Energy (SCORE).
"We estimate 3-5.5 per cent potential upside to CMS' financial years 2015-2017 earnings per share forecasts from the acquisition," it said in a research note today.
In addition, it said OM Holdings would redeploy the proceeds from this disposal for the development of OMS phase II to further enhance earnings.
Maybank Investment said despite the lacklustre ferrosilicon price, OMS would still be able to remain profitable due to its low cost structure as it leverages on the low energy cost in Sarawak.
The investment bank has reiterated its 'buy' call on CMS with a target price of RM5.00. - Bernama
March 26, 2015
March 25, 2015
March 24, 2015
Company Name: AIRASIA BHD
|Research House: ALLIANCE||Price Call: BUY||Target Price: 2.60|
KUALA LUMPUR: AirAsia Bhd shares were actively traded this morning on expectation of better earnings from higher fuel cost savings.
At 10.25 am, AirAsia shares were two sen better at RM2.20 with 5.46 million shares changed hands.
AllianceDBS Research said fuel cost savings were not apparent in the fourth quarter financial year 2014 due to previous fuel hedges made at a higher price of US$115 per barrel and the stronger greenback.
"We expect fuel cost savings to be more apparent starting in the first quarter financial year 2015, given the cheaper average hedged cost of US$98 per barrel.
"This is expected to further fall to US$88, US$84 and US$84 per barrel in the second, third and fourth quarter respectively," it said in a research note today.
The research house said other developments including the potential of the airline company selling a stake in its leasing arm to strategic investors following a successful divestment of a 25 per cent stake in AAE Travel Pte Ltd (AAE) to Expedia Inc for US$86.25 million.
It said the disposal was to realise the value from AirAsia fleet of aircraft and could fetch a valuation of US$300 million, assuming only 45 aircraft were injected into it.
AllianceDBS has upgrade AirAsia to a "Buy" from "Hold" but maintained the target price at RM2.60. - BERNAMA