Stock Name: DELLOYD
Company Name: DELLOYD VENTURES BHD
Company Name: DELLOYD VENTURES BHD
| Research House: ZJ | Price Call: HOLD | Target Price: 5.13 |
Showing posts with label DELLOYD. Show all posts
Showing posts with label DELLOYD. Show all posts
March 16, 2015
June 18, 2014
DELLOYD - Privatization offer from the major shareholder
Stock Name: DELLOYD
Company Name: DELLOYD VENTURES BHD
Company Name: DELLOYD VENTURES BHD
| Research House: ZJ | Price Call: HOLD | Target Price: 4.80 |
March 5, 2014
3QFY14 results below expectations
Stock Name: DELLOYD
Company Name: DELLOYD VENTURES BHD
Company Name: DELLOYD VENTURES BHD
| Research House: ZJ | Price Call: HOLD | Target Price: 3.25 |
February 23, 2012
AUTOMOTIVE (UNDERWEIGHT) Sector Update: Weak Loan Approvals Cause Hard Landing
Stock Name: EPMB
Company Name: EP MANUFACTURING BHD
Stock Name: UMW
Company Name: UMW HOLDINGS BHD
Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD
Stock Name: MBMR
Company Name: MBM RESOURCES BHD
Stock Name: DELLOYD
Company Name: DELLOYD VENTURES BHD
Company Name: EP MANUFACTURING BHD
| Research House: OSK | Price Call: BUY | Target Price: 1.38 |
Stock Name: UMW
Company Name: UMW HOLDINGS BHD
| Research House: OSK | Price Call: SELL | Target Price: 6.18 |
Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD
| Research House: OSK | Price Call: SELL | Target Price: 4.00 |
Stock Name: MBMR
Company Name: MBM RESOURCES BHD
| Research House: OSK | Price Call: SELL | Target Price: 3.69 |
Stock Name: DELLOYD
Company Name: DELLOYD VENTURES BHD
| Research House: OSK | Price Call: HOLD | Target Price: 3.88 |
TIV for the first month of 2012 was a shocker, sinking 25.3%y-o-y and 14.2% m-om due to weak loan approvals and the long public holidays inJan, and to some extent, the impact ofthe Thai floods. The banks' new lending guidelines effective 1 Jan 2012 led tothe rejection of many loan applications for vehicle purchases. As approvalsrates in 2HFY11 were already at a low of48%, we expect this to have gone even lower to an estimated 30%-40% for Jan, but retain our TIV growth forecast of 1.1% for2012 as it may be premature to make drastic changes in estimates for the first month of a year. We keep our bearish view on autosand continue to advocate taking positions in fundamentally undervaluedautopartsstocks with earnings upside potential that may win new contracts asautomakers aim for higher localization. EPMB is our only BUY among our autostocks.
Sharpest contractionsince Japan's tsunami. TIV for the first month of 2012 was a stinker,plunging 25.3% y-o-y and 14.2% m-o-m due to weak loan approvals and the longholidays during the month, and to some extent, the aftermath of Thailand's destructivefloods. The passenger segment shrank sharply by 26% y-o-y, led by passenger cars and 4WDs, which fell 30% and 48%y-o-y respectively. The commercial segment was also not spared, posting a 21%y-o-y decline.
New lendingguidelines keep buyers away. Bank Negara's new lending guidelines effective1 Jan 2012 and implemented by banks subjecting loan approvals to purchasers'debt service ratio (capped at circa 60% notably for most civil servants) to totalnet income as opposed to the previous debt service ratio averaging at 70% ofgross income (a higher denominator) resulted in a lot of rejected loanapplications from potential vehicle buyers. The new guidelines do not onlyapply to the hire purchase segment but across the board, including housingloans, credit cards and personal loans. According to Proton dealers, approvals rates back in 2HFY11were already at a low of 48%, which we estimate may have trended even lower to30-40% in Jan.
Policy U-turn? The central bank's aim of promoting financialprudence via the new lending policy is not welcome news in boosting sales ofbig ticket items, notably housing and vehicle purchases. While the degree ofleniency on the denominator (ie gross income) is unlikely to be reversed, banksare still flexible when it comes to the cap on the debt service ratio.
How top 5 marquesfared. The month of January did notgo too well for most auto players. WhilePerodua continued to retain pole position, sales were down 11% y-o-y, although stillfar better than Proton, Toyota, Nissan and Honda, which saw sales plunging by28% / 23% / 28% / 89% y-o-y respectively. That said, Perodua numbers may besomewhat misleading since January 2011 came off from a low base given that mostpotential Myvi buyers held back on their purchases in anticipation of the newMyvi,which was unfortunately delayed when the tsunami hit Japan.
Preview of NAP. Afew days ago, the media reported that the Government is considering reopeningthe 1.8-liter vehicle segment. To put things in perspective, the restrictionson foreigners with 100% ownership setting up manufacturing plants was lifted inthe last NAP in 2009, but this was confined to production of vehicles pricedabove RM150,000. We do not rule out the possibility of the Government relaxing the price criteria, whichmay pave the way for the entry of VW in a bigger way and tap into the massmarket, as well as other automakers. We understand that currently the Government,together with consultants and industry players, is reviewing key aspectspertaining to the sector in its efforts to drive investment in the manufactureof hybrids and electric vehicles and gradually phase out Approved Permits(AP). The revised NAP is due to be announcedin the next two months.
Maintain UNDERWEIGHT.We retain our TIV growth forecast of 1.1% for 2012 as it would be too prematureto make any drastic changes in estimatesin the first month of the year. Wemaintain our bearish view on autos and continue to advocate taking positions infundamentally undervalued autoparts stocks with potential earnings upside whichmay win new contracts as car makers aimfor higher localization. For autoparts,we have a BUY call on EPMB (FV: RM1.38), which we feel will benefit from the rationalization of Proton's vendors after thetakeover by DRB-HICOM (NOT RATED) given the latter's status as reliable tier-1suppliers. However, no automakers warrant our BUY call, with UMW (AF:RM6.18) and Tan Chong (FV: RM4.00) remaining as SELLs. We have a NEUTRAL onProton following its proposed takeover by DRB-HICOM.
Downgrade MBM and Delloyd.The share prices of most of the autoparts makers under our coverage have ralliedstrongly since the proposal to take over Proton on speculation that moretakeovers will emerge. We are downgrading MBM to a SELL, with our FV unchangedat RM3.69, despite two contrasting rumors that the company may be the subject ofa takeover by either Proton or UMW, and also a potential rights issue to fund its acquisition of Hirotako. We are alsodowngrading Delloyd Ventures to NEUTRAL, with our FV unchanged at RM3.88, giventhe limited upside to its share price. EPMB is our only BUY among stocks in our auto coverage.
Source: OSK188
Source: OSK188
October 13, 2011
Automotive not in the fast lane yet
Stock Name: DELLOYD
Company Name: DELLOYD VENTURES BHD
Automotive sector
Maintain neutral: We expect next year's total industry volume (TIV) to grow by 1.1% on the back of forecast GDP growth of 5.2%. Although the linear correlation between TIV and GDP growth is strong, we think the former's growth upside will be marginal because: (i) the replacement cycle for new vehicles that may give sales a boost has peaked; (ii) the upcoming models may not create enough excitement to sufficiently spur TIV growth; and (iii) consumer sentiment is deteriorating and buyers have become more frugal, which inevitably curtails spending on big ticket items.
We understand the government, together with consultants and industry players, is reviewing key aspects and policies pertaining to the sector in its efforts to drive investment in the manufacture of hybrids and electric vehicles and gradually phase out Approved Permits (AP).
The extension of the deadline for full exemption of excise duties and tax on hybrids and various incentives relating to the replacement of taxis are positive to the sector. However, Budget 2012's proposals could also potentially cap the upside on vehicle sales. The move to raise the price ceiling under the My First Home Scheme may lead to potential vehicle buyers putting a priority on owning a property over replacing their vehicles out of fear of rising property prices .
We still think there is more downside on some counters as their valuations have yet to see any significant price multiple compression. We also highlight the high risk of 2H earnings falling short of consensus expectations given the weakening ringgit, as well as high promotion expenses jacking up costs. The reversal in the ringgit (against the US dollar notably) has taken auto manufacturers by surprise as many had expected the ringgit to sustain its strong momentum.
With TIV remaining lacklustre, we think the sector will lack spark for a while. We are still firmly bearish on the larger caps, on which we have 'sell' calls, although we favour the small-cap autoparts makers in view of their beaten down valuations. Our top pick is EP Manufacturing Bhd (fair value: RM1.38) and Delloyd Ventures Bhd (FV: RM3.88). We maintain our 'neutral' stance on the sector. ' OSK Research, Oct 13
This article appeared in The Edge Financial Daily, Ocotber 14, 2011.
Company Name: DELLOYD VENTURES BHD
| Research House: OSK | Price Call: BUY | Target Price: 3.88 |
Automotive sector
Maintain neutral: We expect next year's total industry volume (TIV) to grow by 1.1% on the back of forecast GDP growth of 5.2%. Although the linear correlation between TIV and GDP growth is strong, we think the former's growth upside will be marginal because: (i) the replacement cycle for new vehicles that may give sales a boost has peaked; (ii) the upcoming models may not create enough excitement to sufficiently spur TIV growth; and (iii) consumer sentiment is deteriorating and buyers have become more frugal, which inevitably curtails spending on big ticket items.
We understand the government, together with consultants and industry players, is reviewing key aspects and policies pertaining to the sector in its efforts to drive investment in the manufacture of hybrids and electric vehicles and gradually phase out Approved Permits (AP).
The extension of the deadline for full exemption of excise duties and tax on hybrids and various incentives relating to the replacement of taxis are positive to the sector. However, Budget 2012's proposals could also potentially cap the upside on vehicle sales. The move to raise the price ceiling under the My First Home Scheme may lead to potential vehicle buyers putting a priority on owning a property over replacing their vehicles out of fear of rising property prices .
We still think there is more downside on some counters as their valuations have yet to see any significant price multiple compression. We also highlight the high risk of 2H earnings falling short of consensus expectations given the weakening ringgit, as well as high promotion expenses jacking up costs. The reversal in the ringgit (against the US dollar notably) has taken auto manufacturers by surprise as many had expected the ringgit to sustain its strong momentum.
With TIV remaining lacklustre, we think the sector will lack spark for a while. We are still firmly bearish on the larger caps, on which we have 'sell' calls, although we favour the small-cap autoparts makers in view of their beaten down valuations. Our top pick is EP Manufacturing Bhd (fair value: RM1.38) and Delloyd Ventures Bhd (FV: RM3.88). We maintain our 'neutral' stance on the sector. ' OSK Research, Oct 13
This article appeared in The Edge Financial Daily, Ocotber 14, 2011.
October 12, 2011
OSK Research maintains Neutral on auto sector
Stock Name: UMW
Company Name: UMW HOLDINGS BHD
Stock Name: PROTON
Company Name: PROTON HOLDINGS BHD
Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD
Stock Name: EPMB
Company Name: EP MANUFACTURING BHD
Stock Name: DELLOYD
Company Name: DELLOYD VENTURES BHD
KUALA LUMPUR: OSK Research is maintaining its Neutral stance on the auto sector as sentiment on big ticket purchases in the upcoming months will remain weak.
It said on Wednesday, Oct 12 that adding to the current woes is the strengthening US dollar vs the ringgit, which will put a dent on earnings.
'UMW, Proton and Tan Chong remain Sells, with FVs of RM6.29, RM2.00 and RM4.27 respectively, with our Buys confined to auto parts makers such as EPMB and Delloyd Ventures, whose FVs are RM1.38 and RM3.88 respectively,' it said.
OSK Research said Thailand's auto exporters are being hit by supply chain disruptions following the worst floods in the country in nearly half a century.
Quoting a news report, it said Thailand is a major production and export hub for global auto makers like Toyota Motor Co, Ford Motor Co and Honda Motor Co. All three have shut their Thai plants after severe floods swept a cluster of component plants in Ayutthaya, 67 km north of Bangkok. On Tuesday, Isuzu Motors Ltd also halted production at its two Thai plants due to supply disruption.
As for Malaysia, OSK Research said it expects automakers in Malaysia - which rely heavily on completely-knocked-down (CKD) imports from Thailand (notably for UMW and DRB-Hicom) - to be impacted by the supply chain disruptions although we see the impact largely as being mild.
'Our channel checks indicate that the inventory of local auto players is at comfortable levels of at least a month. Assuming a one-month backlog, in a worst-case scenario, this would only affect total TIV volume of the Japanese marques for a month, at an estimated total of 15,000 vehicles. This will subsequently be made up for in the subsequent months, provided that the rainy season does not prolong,' it said.
Company Name: UMW HOLDINGS BHD
| Research House: OSK | Price Call: SELL | Target Price: 6.29 |
Stock Name: PROTON
Company Name: PROTON HOLDINGS BHD
| Research House: OSK | Price Call: SELL | Target Price: 2.00 |
Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD
| Research House: OSK | Price Call: SELL | Target Price: 4.27 |
Stock Name: EPMB
Company Name: EP MANUFACTURING BHD
| Research House: OSK | Price Call: BUY | Target Price: 1.38 |
Stock Name: DELLOYD
Company Name: DELLOYD VENTURES BHD
| Research House: OSK | Price Call: BUY | Target Price: 3.88 |
KUALA LUMPUR: OSK Research is maintaining its Neutral stance on the auto sector as sentiment on big ticket purchases in the upcoming months will remain weak.
It said on Wednesday, Oct 12 that adding to the current woes is the strengthening US dollar vs the ringgit, which will put a dent on earnings.
'UMW, Proton and Tan Chong remain Sells, with FVs of RM6.29, RM2.00 and RM4.27 respectively, with our Buys confined to auto parts makers such as EPMB and Delloyd Ventures, whose FVs are RM1.38 and RM3.88 respectively,' it said.
OSK Research said Thailand's auto exporters are being hit by supply chain disruptions following the worst floods in the country in nearly half a century.
Quoting a news report, it said Thailand is a major production and export hub for global auto makers like Toyota Motor Co, Ford Motor Co and Honda Motor Co. All three have shut their Thai plants after severe floods swept a cluster of component plants in Ayutthaya, 67 km north of Bangkok. On Tuesday, Isuzu Motors Ltd also halted production at its two Thai plants due to supply disruption.
As for Malaysia, OSK Research said it expects automakers in Malaysia - which rely heavily on completely-knocked-down (CKD) imports from Thailand (notably for UMW and DRB-Hicom) - to be impacted by the supply chain disruptions although we see the impact largely as being mild.
'Our channel checks indicate that the inventory of local auto players is at comfortable levels of at least a month. Assuming a one-month backlog, in a worst-case scenario, this would only affect total TIV volume of the Japanese marques for a month, at an estimated total of 15,000 vehicles. This will subsequently be made up for in the subsequent months, provided that the rainy season does not prolong,' it said.
June 2, 2011
DELLOYD - Delloyd plantation division exceeds expectations
Stock Name: DELLOYD
Company Name: DELLOYD VENTURES BHD
Research House: ALLIANCE
Delloyd Ventures Bhd
(June 1, RM3.50)
Maintain buy at RM3.40 with revised target price of RM5.13 (from RM3.97): Delloyd registered a 43% year-on-year (y-o-y) increase but 9.7% reduction in revenue in the absence of delivery of 25 bus chassis this quarter.
However, the plantation division emerged as the star performer with more than five times y-o-y and 17.9% quarter-on-quarter pre-tax earnings growth on better production yield and higher crude palm oil (CPO) prices.
The results were slightly below our expectation, achieving 93% of our annualised net profit of RM54.9 million with higher stock writeoffs and provisions. Delloyd also declared a final dividend of 10 sen, bringing the full-year dividend to 18 sen or a dividend yield of 5.3%.
The contribution from the plantation division will continue to grow as fresh fruit bunches (FFB) production is envisaged to increase by 23.9% and yield by 5.5% in FY12. Hence, it will overtake the automotive division as the major earnings contributor with an estimated pre-tax contribution of 51% in FY12 ending March from the current 47.5%.
Outlook for the automotive division appears promising as Delloyd has secured contracts to supply parts to the Myvi and Proton Persona replacement models. The company is in the process of tendering to supply 48 buses in FY12 and 50 in FY13, so revenue growth may accelerate further.
Based on new plantation/automotive pre-tax contribution of 49:51 in FY12 (from our earlier assumption of 75:25 for FY11), we raise our target price from RM3.97 to RM5.13 with plantation and automotive business valued at six times and nine times.
We reiterate our 'buy' call for Delloyed with an upside potential of 56.8%. The risks to our recommendation include failure to secure new bus contracts, a sudden drop in demand for motor vehicles and a plunge in CPO prices to below RM3,000 per tonne. ' Alliance Research, June 1
This article appeared in The Edge Financial Daily, June 2, 2011.
Company Name: DELLOYD VENTURES BHD
Research House: ALLIANCE
Delloyd Ventures Bhd
(June 1, RM3.50)
Maintain buy at RM3.40 with revised target price of RM5.13 (from RM3.97): Delloyd registered a 43% year-on-year (y-o-y) increase but 9.7% reduction in revenue in the absence of delivery of 25 bus chassis this quarter.
However, the plantation division emerged as the star performer with more than five times y-o-y and 17.9% quarter-on-quarter pre-tax earnings growth on better production yield and higher crude palm oil (CPO) prices.
The results were slightly below our expectation, achieving 93% of our annualised net profit of RM54.9 million with higher stock writeoffs and provisions. Delloyd also declared a final dividend of 10 sen, bringing the full-year dividend to 18 sen or a dividend yield of 5.3%.
The contribution from the plantation division will continue to grow as fresh fruit bunches (FFB) production is envisaged to increase by 23.9% and yield by 5.5% in FY12. Hence, it will overtake the automotive division as the major earnings contributor with an estimated pre-tax contribution of 51% in FY12 ending March from the current 47.5%.
Outlook for the automotive division appears promising as Delloyd has secured contracts to supply parts to the Myvi and Proton Persona replacement models. The company is in the process of tendering to supply 48 buses in FY12 and 50 in FY13, so revenue growth may accelerate further.
Based on new plantation/automotive pre-tax contribution of 49:51 in FY12 (from our earlier assumption of 75:25 for FY11), we raise our target price from RM3.97 to RM5.13 with plantation and automotive business valued at six times and nine times.
We reiterate our 'buy' call for Delloyed with an upside potential of 56.8%. The risks to our recommendation include failure to secure new bus contracts, a sudden drop in demand for motor vehicles and a plunge in CPO prices to below RM3,000 per tonne. ' Alliance Research, June 1
This article appeared in The Edge Financial Daily, June 2, 2011.
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