United Malayan Land - Update - Unconditional offer at RM2.50

Stock Name: UMLAND
Company Name: UNITED MALAYAN LAND BHD

Research House: CIMB

Price Call: HOLD

Target Price: 2.50

Bursa Malaysia Stock Watch

Stock Name: UMLAND
Company Name: UNITED MALAYAN LAND BHD

Research House: HLG

Price Call: BUY

Target Price: 2.06

UMLand (BUY)

Time for Puteri Harbour to contribute

• FY11: net profit rose11% yoy to RM57.2m, which was 10% ahead of HLIB and consensus estimates. 
• This was due to srongmargins from Suasana Bukit Ceylon.
• However, 4Q:net profit declined 28.7% yoy, indicative of a soft patch of earnings ahead dueto lower contribution from the high-rise segment.
• UMLand needs tolaunch Sommerset @ Puteri Harbour, to sustain earnings growth. We believe itwill finally happen in 2012.
• FY12-14 earningsraised by 16-17% to reflect Puteri Harbour. We raise our TPfrom RM1.61 to RM2.06 (reduce discount to RNAV from 65% to 55%). BUY

 Source: HLIB Research 1 March 2012

United Malayan Land - 4QFY11 RESULTS - EPS and DPS surprises

Stock Name: UMLAND
Company Name: UNITED MALAYAN LAND BHD

Research House: CIMB

Price Call: BUY

Target Price: 2.05

United Malayan Land 3QFY11 Results - Robust Sales And Landbanking Efforts

Stock Name: UMLAND
Company Name: UNITED MALAYAN LAND BHD

Research House: CIMB

Price Call: BUY

Target Price: 2.02

HLIB Research 24 November 2011 (KLK; GenP; POS; UM Land; Notion Vtec; Economics; Traders Brief)

Stock Name: NOTION
Company Name: NOTION VTEC BHD

Research House: HLG

Price Call: HOLD

Target Price: 2.58

Stock Name: KLK
Company Name: KUALA LUMPUR KEPONG BHD

Research House: HLG

Price Call: SELL

Target Price: 18.79

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: HLG

Price Call: HOLD

Target Price: 7.61

Stock Name: POS
Company Name: POS MALAYSIA BHD

Research House: HLG

Price Call: BUY

Target Price: 3.80

Stock Name: UMLAND
Company Name: UNITED MALAYAN LAND BHD

Research House: HLG

Price Call: BUY

Target Price: 1.61

Kuala Lumpur Kepong (SELL)

FY11: Slightly below our expectation

'''' FY09/11 core net profit of RM1,371.3m came in slightly below our expectation, at 94.1% of our full-year forecast. Against the market consensus, the results came in within expectations at 95.4% of the consensus estimates.

'''' Deviations were lower-than-expected EBIT margin at both the manufacturing and retailing divisions that more than offset lower-than-expected effective tax rate.''

'''' Declared a final NDPS of 70sen.

'''' FY09/12-13 net profit forecasts cut by 0.3% to RM1,429.3m and RM1,443.1m largely to reflect lower EBIT margin at the manufacturing division.''''

'''' TP was also lowered by 0.3% from RM18.85 to RM18.79 based on revised 14x CY2012 EPS of 134.2 sen. Downgraded from Hold to Sell as share price has run ahead of fundamentals.'' ''

''

Genting Plantations (HOLD)

9M11: Beats our expectation

'''' FY09/11 core net profit of RM1,371.3m came in slightly below our expectation, at 94.1% of our full-year forecast. Against the market consensus, the results came in within expectations at 95.4% of the consensus estimates.

'''' Genp has yet to lock in any forward sales, as it feels that supply constraint will sustain the current high CPO prices 595.7over the near term.

'''' FFB output growth guidance for 2011 is raised to 12%. For 2012, management guided for an output growth of 8%, underpinned by higher output from its Indonesian oil palm.

'''' Management is guiding for a 12% increase in 2012's production cost to RM1,150/tonne, on higher fertilizer and labour costs.

'''' Genp planted 1,015ha in 3Q11 (or 2,800ha in 9M11), and management is targeting to plant another 1,500-1,700ha in 4Q. Beyond 2011, planting target would normalize back to 10,000-15,000ha per annum.

'''' Premium Outlets is scheduled to open to the public on 2 Dec 2011.

'''' Management is targeting to launch 530 units of properties in 2012 with a total GDV of RM230m.

'''' For the full-year, management is guiding for a capex of slightly below RM300m.

'''' 2011-13 net profit forecasts raised by 7-13%to reflect: (1) Higher FFB output assumption; and (2) Earnings contribution from Premium Outlets from 2012 onwards.

'''' TP raised by 13.1% to RM7.61 (based on 13x 2012 revised EPS of 58.5 sen), to reflect higher net profit forecast.'' ''

''

Pos Malaysia (BUY)

9M11: Below our expectation

'''' 9M11 core net profit of RM97.9m (+49.4) came in below our expectation, accounted for only 68.3% of our full-year forecast. Against consensus, the results came in within expectations, at 73.2% of the consensus estimates.''

'''' ''Key deviations were: (1) Lower-than-expected other operating income; and (2) Higher-than-expected effective tax rate.''

'''' ''Earnings forecasts and TP (RM3.80 based on unchanged 13x 2012 EPS of 29.3 sen) are maintained for now, pending further update with management in the coming results briefing. ''

''

UMLand (BUY)

Making good progress

'''' 9M net profit rose 51% yoy to RM52m, in-line with our full-year estimate, due to improved performance from both the niche and township divisions.'' A 2.5 sen gross dividend was declared.''

'''' We are pleased to see them making good progress with the projects.'' Puteri Harbour's GDV has been bumped up from RM188m to RM209m, whilst their efforts to remodel Bandar Seri Alam is progressing well.''

'''' Launches have been slow this year ' only 30% of their initial RM522m target, but management have been diligently executing their game plan and we expect them to launch more aggressively next year.''

'''' FY12-13 earnings raised by 1-2% to reflect Puteri Harbour's increased GDV.'' Our TP remains at RM1.61 (65% discount to RNAV). BUY

''

Notion VTec (HOLD)

FY11 Results, Thai Flood Assessment

'''' FY11 reported net profit of RM40.1m came in below our expectation, accounting for 90% of our full-year forecast and 87% of consensus.

'''' 4QFY11: Revenue RM62m (+16.9% yoy, +1.8% qoq), EBITDA RM21.8m (+41.7% yoy, -13.0% qoq) and PATAMI RM12.5m (+54.8% yoy, +23.4% qoq).

'''' FY11: Revenue RM236.8m (+4.4% yoy), EBITDA RM92.3m (+16.7% yoy) with EBITDA margin of 39% and PATAMI RM46.8m (+24.8% yoy).

'''' HDD revenue declined 9% yoy and is offset by camera revenue which increased 19% yoy, while industrial/automotive revenue remained stagnant.

'''' Along with 4QFY11 results, the company also shared the expected financial impact of Thailand flood:

'''' To reflect lower earnings forecast, our target price is revised downward by 42.2% to RM1.49 from RM2.58 previously based on NPV of FCF based on WACC of 12.7% and terminal growth of 10%.

''

October Inflation Report

'''' The CPI growth remained stable at 3.4% yoy in October 2011, slightly higher than the consensus estimate of 3.3%, as surge in food prices (+5.7% yoy; Sep: +5.0% yoy) offset moderation in non-food prices (+2.4% yoy; Sep: +2.7% yoy).''

'''' The moderation in prices of non-food category was caused by the lapse of cigarette excise duty hike (22 sen per stick from 19 sen per stick) effected a year ago.

'''' The uptick in services inflation (+3.1% yoy; Sep: +3.0% yoy) suggests that there is still risk of subsequent rounds of inflationary pressure.

'''' We maintain our inflation forecast of 3.2% for 2011 and 3.0% for 2012. However, there is now more upside risk to our projection given the uncertainty on food supply chain and its impact on prices.

'''' The stronger-than-expected 3Q GDP growth further reinforced our view that BNM will hold the OPR steady until end-2012.

'''' Real return to savings has been running negative since April 2011, representing another constraint for BNM to switch unreservedly to growth promotion mode.

''

KLCI: The odds favour the bears

'''' Given the failure to defend the 30-d SMA (1357) and lower Bollinger band (1435) as well as bearish technical readings, KLCI is slated to head south towards the next support at 1420 (38,2% FR) and the 1400 psychological barrier. Immediate resistance levels are 1357, 1468 (mid Bollinger band) and 1480 (100-d SMA).

''

DJIA: Downside bias despite oversold slow Stochastics

'''' Following the breakdown of major supports near mid Bollinger band (11896), 100-d SMA (11636) and 11344 (50% FR), the next supports are 11222 (61.8% FR), 11k psychological level and 10847 (76.4% FR). Overall, downside risk to violate the 11k support has increased despite an oversold slow Stochastics reading. Immediate resistance levels are 11636-11896 levels.

HLIB Research 11 Nov 2011 (Plantations; AirAsia; UM Land; Economics; Traders Brief)

Stock Name: AIRASIA
Company Name: AIRASIA BHD

Research House: HLG

Price Call: BUY

Target Price: 4.50

Stock Name: UMLAND
Company Name: UNITED MALAYAN LAND BHD

Research House: HLG

Price Call: BUY

Target Price: 1.61

Plantations (Neutral)

Palm oil inventory declines on exports jump

'''' Palm oil inventory in Oct 11 declined by 1.6% mom to 2.1m tonnes, mainly on the back of a 19.0% mom jump in exports that more than offset: (1) A 2.1% mom increase in production; and (2) A 3.1% mom decline in domestic consumption.

'''' Production in Oct 11 rose by 2.1% mom to 1.91m tonnes from 1.87m tonnes in the previous month, as previous month's output was dragged by Ramadhan season.

'''' Despite the recent uptrend in CPO prices, we are keeping our average price assumptions of RM3,200/tonne and RM3,000/tonne in 2011 and 2012-13 respectively and we believe further upside to CPO prices will likely be capped, as:

1.'''' La Nina event (if it does form), will likely be weaker relative to the previous La Nina event (2010-11);

2.'''' CPO price's discount against soybean oil has narrowed and this may result in demand rationing by certain price sensitive consuming countries. This, coupled with potentially slower exports to China, India and Pakistan in the coming months will offset lower palm oil supply; and

3.'''' The current global economic headwinds will likely remain a long-drawn issue, in our view, and this may curb demand for palm oil, and hence palm oil prices

'''' We also note that valuations of Malaysian planters (in particular, the larger planters) remain at a premium to the Indonesian planters, despite Malaysian planters' weaker earnings outlook at the downstream segment.

'''' Maintain Neutral on the plantation sector. Top picks are TSH Resources and Tradewinds Plantation.''

''

AirAsia (BUY)

AirAsia "Ancillary Day"

'''' AirAsia organized "Ancillary Day", to assist investors in understanding its ancillary income stream and its potential moving forward, leveraging on its expanding passenger base, efficient IT system and strong brand name.

'''' YTD, ancillary income contributed 20.6% of total revenue, translating into RM50/passenger. Management aims to achieve RM60-65/passenger or 23-25% of total revenue in the medium term. Aside from boosting ancillary income, it also aims to further reduce its average cost/passenger.

'''' Ancillary income is expected to contribute significantly to its bottomline and provide strong protection against increase in jet fuel price.

'''' Continuous expansion plan with new hubs and destinations are expected to maintain strong customer base for AirAsia's ancillary income.

'''' Maintain BUY and TP of RM4.50 based on SOP.

''

UM Land (BUY)

Acquires land in Johor Eastern Corridor

'''' UMLand is acquiring 332.7 acres of freehold land in the Eastern Corridor of Iskandar Malaysia for RM62.7m, or RM4.33 psf.'' We regard this as reasonable given Mah Sing paid RM6.10 psf for their land near Tanjung Pelepas Port in Apr 2011.''

'''' UMLand intends to develop a mixed township with affordable/mid-end housing, to be launched in 2H 2012 and developed over a period of 5 years.

'''' Details such as GDV, product prices to be finalised later.

'''' We maintain our forecast numbers and RNAV for the time being, pending more concrete details regarding the project.'' Maintain BUY with PT of RM1.61 (65% discount to RNAV).

''

Performance of IPI (Sep 2011)

'''' IPI grew by 2.5% yoy in Sep (Aug:'' +0.5% yoy), broadly in line with the consensus estimate of 2.6%, and was driven by stronger manufacturing and electricity performance offsetting a contraction in mining output.''

'''' Similar to the export trend, E&E output growth turned around to +3.4% yoy (Aug: -3.6% yoy), buoyed by stronger expansion of semiconductors and AV products.

'''' We fine-tune our estimate for 3Q GDP growth to 4.7% (previously 4.5%) due to the stronger-than-expected manufacturing growth. Meanwhile, we retain our 2011 GDP forecast at 4.6%.

'''' For 2012, we expect GDP growth to remain stable at 4.5% as softer manufacturing performance is cushioned by the bunching of construction projects.

'''' We see BNM holding the OPR steady at 3.00% until end-2012 as the policymaker focuses on growth agenda given the recent external developments while inflation is on moderation trend.

''

KLCI: Weakening technical readings

'''' Technical outlook has weakened as KLCI was unable to break the stiff resistance zones at 100-d (now 1490) and 200-d (1509) SMAs, as well as falling below the immediate support of 10-d SMA (1477). Further breakdowm below mid Bollinger band (1461) means that the current rally is likely to be disrupted, spurring more selldown towards 30-d SMA (1436) pts.

''

DJIA: Crucial neckline support near 11600

'''' Dow's technical outlook also deteriorated lately following the massive plunge of 389-pt on 9 Nov. Immediate resistance levels are 200-d SMA (now at 11975) and upper Bollinger band (12308). For supports, a breakdown below this neckline support level will trigger more selldown towards 50-d SMA (11439) and lower Bollinger band (11371).

Utd Malayan climbs on on 'buy' call

Stock Name: UMLAND
Company Name: UNITED MALAYAN LAND BHD

Research House: HLG

Price Call: BUY

Target Price: 2.30

United Malayan Land Bhd, a Malaysian developer, has "strong" earnings upside as profits from some projects haven't been factored into its share price, Hong Leong Financial Group Bhd analyst Sean Lim said in a report today.

Hong Leong has a "buy" call on the stock with a RM2.30 share estimate, the report said.

United Malayan was unchanged at RM1.30 at 9:42 a.m. in Kuala Lumpur trading. -- Bloomberg

HLIB Research 25 August 2011 (RHB Cap; IJM Corp; Genting Plantations; TimeDotCom; UM Land; TM; IOI; Traders Brief) Part 1/2

Stock Name: IJM
Company Name: IJM CORPORATION BHD

Research House: HLG

Price Call: BUY

Target Price: 6.61

Stock Name: RHBCAP
Company Name: RHB CAPITAL BHD

Research House: HLG

Price Call: BUY

Target Price: 10.20

Stock Name: TIMECOM
Company Name: TIME DOTCOM BHD

Research House: HLG

Price Call: BUY

Target Price: 0.95

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: HLG

Price Call: BUY

Target Price: 8.80

Stock Name: UMLAND
Company Name: UNITED MALAYAN LAND BHD

Research House: HLG

Price Call: BUY

Target Price: 2.30

RHB Cap (BUY)

ROE KPI Intact But Face NIM Pressure

'''' 2QFY11 results slightly below HLIB (due to lower NIM) and consensus expectations.

'''' Interim dividend of 8 sen (17% payout), all under DRP.

'''' Encouraging results except continued NIM erosion (higher funding cost ' though unlikely to decline significantly, still pressurize by intense competition for deposits) and jump in provision for several SMEs (unlikely to recur).

'''' Loans and deposits growth continued to be ahead of industry average while credit charge to stay within 50-60bps.

'''' Although ROE slightly behind, FY11 KPI of 15.2-15.8% unchanged amidst downward pressure from NIM.

'''' Liquidity position is healthy and has no US$ funding issue while IB pipeline remains decent.'' However, near term pressure on MTM and potential risk to big ticket items and IB deal delay towards 4Q.''

'''' EASY now contributes 2.3% of pre-provision profit with low gross impaired loan ratio of 0.8%.

'''' Acquisition of Mestika unlikely this year, pending clear rule on Indonesia foreign shareholding limit.

'''' Asset quality improved despite higher net impaired loans formation while capital ratio also improved.

'''' FY11-13 forecasts cut by 4.7-5% to account for lower NIM, consequently, target price cut to RM10.20 from RM10.96 based on Gordon Growth.

''

IJM Corp (BUY)

Improved 1Q results

'''' 1Q12 PATAMI came in at RM115m, translating to an EPS of 8.51 sen/share. Earnings made up ~24% and ~23% of ours and streets' estimates respectively.

'''' On a QoQ and YoY basis, 1Q12 core earnings jumped by 11% and 34% respectively against the back of improved performances in nearly all division, especially the plantation division which was lifted by bumper harvest and improved earnings margin. ~65% of IJM's PBT during the quarter came from the property and plantation division.

'''' The construction PBT margins remained uninspiring at 2.8% during the quarter after improving to ~3.5% last financial year. However, it was the second consecutive quarter of construction revenue growth, indicating that construction activities may have recovered and margins may improve further going forward. Outstanding order book stands at

RM3.7bn, translating to ~2.8x FY11's construction revenue.

'''' Upgraded to BUY in view of slightly >10% upside from our target price of RM6.61 based on SOP valuation.

''

Genting Plantations (BUY)

1H11: Beat expectations

'''' 1H11 net profit of RM234.2m beat expectations, accounted for 53.6-56.8% of our and consensus full-year estimates.

'''' The RM200/month increment for plantation workers will raise Genp's production cost by RM5m per annum.

'''' Given the strong FFB output growth recorded, management raised FFB growth guidance for 2011 from 5-7% to 8-9%.

'''' Genp has planted only 1,537ha of oil palm in Indonesia in 1H11, due mainly to social and land issues. Management is confident that it would be able to accelerate its planting programme to 3,000-4,000ha in 2H, making up to ~5,000ha in 2011.

'''' Management guided a lower capex of RM300m in 2011 (vs. RM360m that it previously guided).

'''' 2011-13 net profit forecasts raised by 2.7-3.8%, largely to reflect: (1) Higher FFB output growth assumption; and (2) Higher production costs.

'''' TP raised by 2.9% to RM8.80 based on 17x revised 2012 EPS of 51.8 sen. Upgrade from Hold to Buy.

''

Time DotCom (BUY)

1H11: Beats our expectation

'''' 1H11 net profit beat our expectation, accounted for 67.9% of our full-year forecast.

'''' Earnings forecasts and TP of R0.95 (based on SOP) maintained for now, pending further details on today's conference call.

''

UMLand (BUY)

Earnings in-line

'''' Net profit rose 18% yoy, while 1H net profit rose 89% yoy to RM24m, or 46% of our estimate.''

'''' We regard this as in-line with our expectation, due to seasonality.''

'''' The RM189m Puteri Harbour condo was slated for 3Q launch, but has been pushed back to 4Q as building approval is still pending.''

'''' We continue to like UMLand for their undemanding valuations and earnings growth story.'' UMLand continues to trade at 70% discount to RNAV and single-digit P/E, providing investors with an opportunity to accumulate before earnings re-rating takes place in 2012, which we estimate to be circa 30%.

'''' The bonus issue shares from the 1 for 4 bonus issue will be listed today, and we adjust our price target from RM2.87 to RM2.30 accordingly. Maintain BUY.

''

TM (Hold)

'''' 1H11 core net profit of RM344.6m (+32%) came in within expectations, accounted for 48% of our forecast. Against consensus, the results came in above expectations, at 62.6% of full-year estimates.''

'''' TP remains unchanged at RM4.20 (based on DDM, WACC of 6.3%, TG 0%). Downgrade from Buy to Hold as the recent share price run-up has capped potential capital upside on the stock.

''

IOI Corporation (Hold)

FY11: Below expectations

'''' FY06/11 core net profit of RM1,996.7m came in below expectations, at 90-92.4% of our and consensus full-year estimates.

'''' FY06/12-13 net profit forecasts cut by 2.8-2.9% to reflect lower EBIT margin assumptions at both the property development and manufacturing divisions.''

'''' SOP-derived TP cut by 3.7% to RM5.27 following the downward adjustments to our earnings forecasts.'' ''

''

FBM KLCI - Unresolved uncertainties and long holidays to cap rebound

'''' We remain vigilant and would like to caution investors about potential downward correction if Bernanke speech this Friday fails to live up to market expectations as well as long holidays ahead next week. Immediate resistance levels remain near 1,500-1,530 whilst supports are around 1456-1466 pts.

''

Stock to watch - MASTEEL: Limited downside amid strong 1H11 results and oversold positions''

'''' Signs of bottoming up in weekly & daily slow Stochastics indicators coupled with its strong 1H11 results bode well for a possible technical rebound towards RM1.14 (30-d SMA) and 1.22 (200-d SMA) in the medium term. Supports are RM0.92-1.00. Cut loss below RM0.92.