Stock Overview - WTK - 17 Apr 2012

Stock Name: WTK
Company Name: WTK HOLDINGS BHD

Research House: JUPITER

Price Call: BUY

Target Price: 1.75

WTK ( 4243 : 1.52 ) : Targeting 1.75-1.85/stop loss 1.45

Description
Timber

Resistance : 1.75 1.85
Support : 1.45

RSI of 63
RSI is recovering

STOCHASTIC
It remains firm

TREND INDICATOR

Comment
It is on a technical rebound to target the 61.8% of 1.75. Resistance is expected in the region of 1.85.

Trading Strategy
Buy. Stop loss is at 1.75

Source:Jupiter Securities Research 17 April 2012

WTK ' Nothing to be excited about yet

Stock Name: WTK
Company Name: WTK HOLDINGS BHD

Research House: RHB

Price Call: HOLD

Target Price: 1.47

WTK ' Nothing to be excited about yet                                  Market Perform

Visit Note

''       For the first two months of 2012, WTK only achieved log production volume of 52k m3, which was lower by 15% yoy. Log harvesting was hampered by seasonal wet weather in Sarawak , although it seems that the seasonal effect was stronger this year. Average log prices are about US$185/m3 now, up slightly from US$180/m3 in Dec 2011.

''       Fair value is revised to RM1.47 (from RM1.50) based on unchanged target PER of 9x FY12 EPS of 16.4 sen. Maintain Market Perform.

Source: RHB Research - 28 March 2012

CIMB Research has technical sell on WTK at RM1.17

Stock Name: WTK
Company Name: WTK HOLDINGS BHD

Research House: CIMB

Price Call: TRADING SELL

Target Price: 1.17

KUALA LUMPUR (Dec 9): CIMB Equities Research has a technical sell on WTK Holdings at RM1.17 at which it is trading at a price-to-book value of 0.5 times.

It said on Friday WTK Holdings is still trapped in a downtrend channel. Despite numerous attempts, prices fail to push above the downward slopping resistance trend line. The 30-day and 50-day SMAs at RM1.32-1.28 respectively will also put a lid on the bulls.

'Indicators are showing signs of exhaustion. MACD signal line has slipped into the red while RSI is below the 50pts mark.

'We will continue to stick with the bear's camp unless prices swing past the resistance trend line. Next supports are RM1.08 and RM1.03,' it said.

RHBInvest Research Highlights 09th August 2011

Stock Name: WTK
Company Name: WTK HOLDINGS BHD

Research House: RHB

Price Call: BUY

Target Price: 2.55

Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD

Research House: RHB

Price Call: BUY

Target Price: 9.80

Stock Name: SAPCRES
Company Name: SAPURACREST PETROLEUM BHD

Research House: RHB

Price Call: BUY

Target Price: 5.04

09^th August 2011

 

Top Story: WTK ' Lower plywood production to weigh on 1H11 results                     Outperform

''       WTK's log production volume in 2Q11 was higher by +33% qoq and +28% yoy respectively due to normalised weather conditions. WTK has guided that its current realised price is US$220/m3 for meranti SQ up, which is lower than our expectation of US$260/m3 for FY11.

''       We revised our fair value to RM2.55 based on unchanged target PER of 12x revised FY12 EPS of 21.2 sen. Maintain Outperform.

 

Corporate Highlights

 

Sunway Bhd: A single stock that gives all real estate exposure                      Outperform (Initiating coverage)

''       Upon listing, Sunway Bhd will potentially become the 3rd/4th largest property player in Malaysia . The company will offer investors full fledge offerings of the real estate sector, ranging from property development to various property assets as well as construction arm. The key strength of Sunway Bhd after merger will be the leaner organisation and operating structure that will ultimately yield cost savings.

''       We estimate an FY12-13 earnings growth of 7% and 11%, underpinned by RM1.6bn worth of unbilled sales, RM2bn worth of construction orderbook, as well as RM75-80m recurring income from property assets and Sunway REIT.

 

CIMB: CIMB Niaga 2Q11 results ' Coming along nicely                                                Outperform

''       CIMB Niaga reported 2Q11 net profit of IDR818.6bn (+35.4% yoy; +12.5% qoq), bringing 1H11 net profit to IDR1,546.1bn (+37% yoy).

''       Management guided for NIM to average around 5.4-5.5% for this year, roughly around current levels. Meanwhile, management now expects CIMB Niaga to post loan growth in excess of 20%, as compared to around 20% previously (1H1: 22.5% annualised). However, CASA growth ahead would be more challenging given that depositors are now seeking higher yields.

''       No change to forecasts. Fair value of RM9.80 (15x CY12 EPS) and Outperform call maintained.

 

Carlsberg: No surprises expected for 1HFY11                                                   Outperform (up from MP)

''       On 4 Aug, Guinness reported full-year FY06/11 earnings growth of 18.3% yoy on the back of revenue growth of 9.5%. We estimate that in terms of volume, 1HCY11 grew by only ~1% yoy, after taking into account the increase in Guinness' selling prices in April 2010 of ~3-4%.

''       No change to forecasts. We believe our assumption of a 5% TIV growth in FY11 is fair as we expect stronger growth in the 2HFY11, underpinned by Oktoberfest, year-end festive seasons and the trade-loading activities in the 4Q leading up to Chinese New Year celebrations.

 

SapuraCrest: Buying Clough's marine construction division                                         Outperform

News Update

''       Sapuracrest announced a proposal to acquire Clough's "Marine Construction" business for AUD127m (RM400.5m) cash. Completion is expected by 4QCY11. 

''       The acquisition will: 1) Strengthen Sapuracrest's international foothold (especially Australia ); 2) Increase its asset base; and 3) Spearhead an entry to the subsea market.

''       Maintain Outperform and fair value of RM5.04/share (based on 21x FY13 EPS).

WTK edges higher in early trade

Stock Name: WTK
Company Name: WTK HOLDINGS BHD

Research House: HWANGDBS

Price Call: BUY

Target Price: 2.90

KUALA LUMPUR: Shares of WTK Holdings Bhd [] edged higher in early trade on Wednesday, June 22 after HwangDBS Vickers Research initiated coverage on the stock with a Buy call and target price of RM2.90.

At 9.10am, WTK added two sen to RM1.84 with 45,000 shares traded.

HwangDBS Vickers said Japan's post-quake reCONSTRUCTION [] should result in increased demand for plywood.

'WTK stands out as a pure timber play with biggest exposure to Japan. Set to record fastest CY10-12F earnings CAGR of 70%,' the research house said on June 22.

WTK - CIMB Research: Indicators improving for WTK

Stock Name: WTK
Company Name: WTK HOLDINGS BHD
Research House: CIMB

KUALA LUMPUR: CIMB Equities Research said since it featured WTK Holdings Bhd [] as a technical sell stock on April 12, prices fell to as low as RM1.72, almost hitting the 30-day SMA.

It said on Friday, April 22 that since then, a base is formed near this moving average. Yesterday, buying momentum started to set in, pushing prices above the flag resistance.

'Looking at the chart, prices could bounce back to test RM2.08 and possibly even the RM2.20 level. Hence, aggressive traders may start to accumulate now. Always put a stop at RM1.88.

'Indicators are improving. MACD is poised for a positive crossover while RSI has hooked upward,' it said.

WTK - WTK slides after RHB downgrade

Stock Name: WTK
Company Name: WTK HOLDINGS BHD
Research House: RHB

WTK Holdings Bhd, a Malaysian timber producer, fell in Kuala Lumpur trading as RHB Research Institute Sdn Bhd cut its rating on the stock because of its limited upside after rallying 65 per cent since the Japan earthquake on March 11.

The shares slid 1.9 per cent to RM2.04 at 9:22 a.m. local time, set for their steepest decline since March 31.

The stock rating was reduced to “market perform” from “outperform,” RHB said in a report today. -- Bloomberg

WTK - WTK Holdings off to a good start

Stock Name: WTK
Company Name: WTK HOLDINGS BHD
Research House: RHB

WTK Holdings Bhd
(Jan 24, RM1.27)
Maintain outperform at RM1.28 with revised fair value RM1.56 (from RM1.44): WTK is expected to report lower log-production volume of 4%to 5% quarter-on-quarter for 4QFY10 as a result of the seasonal wet weather. Nevertheless, the company is still expected to post a strong profit contribution from its log division for 4QFY10 as the selling price for its logs has been climbing up consistently, averaging about US$180 per cubic metre in 4QFY10 (compared with US$165 for 3QFY10).

WTK indicates that its plywood sales volume (mainly to Japan) has remained fairly stable since 3QFY10. Moreover, selling prices for its floorbase plywood (which constitutes 60% to 70% of WTK's production capacity) have been averaging close to US$615per cubic metre in 4QFY10, up by 7% from US$575 per cubic metre recorded in 3Q2010.

Capacity utilisation has also improved to 75% to 80% in 2HFY10, but cost of production has roughly remained at the same level of about RM1,650 per cubic metre due to higher log prices.

Currently, WTK has about 7,000ha to 8,000ha of planted area out of the 23,000ha of plantation land it owns. Planting has been slow in the past due to funding issues and also to the slump in its timber business. Hence, WTK's oil palm plantation is only expected to mature and start contributing meaningfully to its bottomline from 2012 onwards.

Management has guided that capex will be about RM75 million to RM80 million in 2011, mainly for maintenance of plant and machinery, oil palm plantation, and reforestation activity. We are forecasting a net dividend payout of 2.5 sen for FY10, which translates into a net yield of about 2%.
Risks include a decline in timber demand resulting in lower-than-expected timber prices; a slower-than-expected recovery in Japan's economy; and significant hike in glue and logistics costs.

We reduce our FY10 earnings forecast slightly by 3.8%, but raise our FY11/12 earnings forecasts to between 8% and 8.8% after adjusting for: 1) lower log prices in FY10; 2) higher log prices in FY11/12; 3) higher average selling prices for its plywood division in FY11/12; and 4) higher cost of production for its plywood division in FY11/12.

We are positive on WTK as we expect average selling prices for logs as well as plywood products to remain firm going forward on the back of steady demand from Japan (mainly plywood) and India (mainly logs).

Post-earnings adjustment, we revise our fair value to RM1.56 (from RM1.44 previously) based on unchanged target PER of 12 times revised FY11 EPS of 13 sen. Maintain 'outperform'. ' RHB Research Institute Sdn Bhd, Jan 24


This article appeared in The Edge Financial Daily, January 25, 2011.