TENAGA - MIDF keeps Q4 Tenaga earnings forecast

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD
Research House: MIDF



MIDF Research has retained its fourth quarter earnings forecast for Tenaga Nasional Bhd (TNB) as rising coal prices could weigh down the company's result.

"We are maintaining our financial year 2010 number for time being. We are wary of the impact from the rising cost of coal with potential margin compression in the fourth quarter 2010," it said in its research note today.

It added that expectation on this year's average coal price has increased to US$95 for 2010. The cost of coal has risen since December 2009, pushing Tenaga's average coal price to US$92 per tonne, as compared to US$82 per tonne in the first half this year.

As such, gross margin suffered, declining to 23.3 percent in the third quarter 2010 from 32.1 percent in the second quarter.
MIDF has also maintained a "buy" call on Tenaga Nasional Bhd with its target price remaining unchanged at RM10.35. -- Bernama

NCB - NCB maintained a 'neutral' at MIDF

Stock Name: NCB
Company Name: NCB HOLDINGS BHD
Research House: MIDF



MIDF Research has maintained a "neutral" call on NCB Holdings Bhd with a revised target of RM3.66 from RM4.00 due to cautious prospects in financal year 2011.

"We are revising our expectations on a dividend payout to 65 per cent for financial year 2010," it said in its research note today.

The transport and logistics services provider's revenue was below the expectations of the research house, coming at 66.7 per cent of full year estimates.

This was due to the continuing decline of haulage/logistics revenue which fell by 9.9 per cent year-on-year.

Pre-tax profit for its third quarter ended Sept 30, 2010, fell to RM54.3 million from RM56.1 million in the same quarter last year.

However, for the nine-month period, the group's pre-tax profit increased to RM149.8 million from RM129.5 million in the same period last year while revenue rose to RM658.8 million from RM606.8 million previously. -- Bernama

KENCANA - OSK Research maintains Buy on Kencana

Stock Name: KENCANA
Company Name: KENCANA PETROLEUM BHD
Research House: OSK

KUALA LUMPUR: OSK Research is maintaining its Buy call on Kencana Petroleum and its target price remains unchanged at RM2.06, based on a calendarised PER of 16 times FY11 EPS.

'The stock remains our top pick for the oil and gas (O&G) sector due to its strong delivery track record and reputation in the industry,' said the research house on Tuesday, Oct 26.

To recap, despite the slowdown in new O&G contract awards this year, Kencana's cumulative awards to-date since April 2010 has reached about RM700 million, which represents half of OSK Research's forecast revenue for the company.

OSK Research said Kenanca's order book also has increased to RM1.8 billion (from RM1.6 billion earlier) while its tender book stands at about RM2 billion.

KOSSAN - OSK Research maintains Buy on Kossan

Stock Name: KOSSAN
Company Name: KOSSAN RUBBER INDUSTRIES BHD
Research House: OSK

KUALA LUMPUR: OSK Research is maintaining its Buy on Kossan and its target price for Kossan is RM5.25, based on PER of 13x FY11 EPS.

'We like the company's equal emphasis on natural rubber and nitrile gloves, which we believe is important in weathering the current period of normalizing demand for examination gloves,' it said on Tuesday, Oct 26.

OSK Research said it also liked the company's strong emphasis on higher margin examination gloves.

Kossan also differentiated itself from its peers with a product mix comprising 60% natural rubber and 40% nitrile gloves.

OSK Research said having this balanced mix ensures earnings sustainability for the company as this gives it more flexibility in shifting its glove mix whenever demand shifts as it would have the production lines and distribution arms ready and markets to sell to.

SUNWAY - ECM keeps 'buy' call on Sunway

Stock Name: SUNWAY
Company Name: SUNWAY HOLDINGS BHD
Research House: ECMLIBRA



ECM Libra Investment Research has maintained a "buy" call on Sunway Holdings Bhd with its target price remaining unchanged at RM2.61.

This is premised on strong earnings growth of 67.6 per cent in the financial year 2010, more landbank acquisitions in the pipeline, and its strength in securing overseas construction contracts, ECM Libra Investment said in a research note today.

Last Friday, Sunway announced that it had entered into a Memorandum of Understanding (MoU) with Shanghai Zhushengyuan Real Estate Co. Ltd (SZRE). - Bernama

IJM - IJM Corp up after AmResearch raises TP to RM6.30

Stock Name: IJM
Company Name: IJM CORPORATION BHD
Research House: AMMB

KUALA LUMPUR: IJM Corp Bhd shares advanced in the afternoon session on Monday, Oct 25 after AmResearch maintained its buy call on the stock at RM5.48 and raised its target price RM6.30 based on the sum-of-parts methodology.

It said the upcoming months would likely be momentous for IJM ' with news flow momentum focusing on an expected re-acceleration of contract flows, exciting presales pipeline and exposure to rising crude palm oil (CPO) prices via IJM PLANTATION []S BHD [] (IJMP).

"We recommend a switch from GAMUDA BHD [] to IJM as our top large-cap pick for the CONSTRUCTION [] sector, given the latter's cheaper valuation (11%-20% discount on FY11F-12F earnings).

"IJM's foreign shareholding has nudged up to ~33% currently, but still below its peak of 65% in mid-2007," it said in a note on Monday.

SPSETIA - SP Setia upgraded to 'buy' at Kenanga

Stock Name: SPSETIA
Company Name: SP SETIA BHD
Research House: KENANGA



SP Setia Bhd, Malaysia's largest property developer, had its stock rating upgraded at Kenanga Investment Bank Bhd to reflect the company's earnings growth prospects.

The company was raised to "buy" from "trading buy" and its fair value increased to RM5.50 from RM4.78, Yeow Yeonzon, an analyst, said in a report today. -- Bloomberg

ALAM - Maybank IB positive on Alam Maritim's partnership with Yayasan Sabah

Stock Name: ALAM
Company Name: ALAM MARITIM RESOURCES BHD
Research House: MAYBANK

MAYBANK Investment Bank Bhd Research (Maybank IB) maintained its hold call on ALAM MARITIM RESOURCES BHD [] at RM1.07 and target price RM1.15 and said it was positive on the company's partnership with Yayasan Sabah Group.

It said the partnership creates a Sabah-based O&G company and sends out a strong signal of intent to capitalise on O&G opportunities in the state.

"The SOGT [Sabah Oil and Gas Terminal] and pipe-laying projects would be among the jobs that it could target.

"Maintain Hold with a RM1.15 target price, based on 10 times 2011 EPS," it said in a note on Monday, Oct 25.

QL - QL up after RHB Research raises TP to RM5.50

Stock Name: QL
Company Name: QL RESOURCES BHD
Research House: RHB

KUALA LUMPUR: QL RESOURCES BHD [] share price rose on Monday, Oct 25 after RHB Research Institute Sdn Bhd maintained its outperform call on the stock and raised its target price to RM5.50 from RM5.41 previously.

At 9.50am, QL was up four sen to RM5.12 with 2,000 shares traded.

In a note on Monday, RHB Research said QL was in the midst of constructing its 13ha Breeder and 17 hectare Layer plant in Cianjur district, located approximately two hours from Jakarta.

The plant is expected to contribute 12 million day old chicks per year by end FY11, and one million eggs per day by end FY12.

Similarly in Tay Ninh, Vietnam, QL started CONSTRUCTION [] on its egg plant in May of this year. The plant is expected to produce 500,000/eggs per day by end FY12, with similar margins as Malaysia, ie 24 sen-25 sen/egg selling price and about 7%-8% in PBT margins.

For its MPM division, QL is expecting to complete Phase 1 of its new plant in Surabaya, Indonesia by March 2011.

The Surimi and Fishmeal plant is situated on a 10 hectare land, and the overall cost would be around RM30 million-RM35 million. With capacity of 5,000 tonnes of Surimi and 5,000 tonnes of fishmeal, the plant will increase QL's current capacity by 20%.

QL has finished planted 8,500 hectares of land in Eastern Kalimantan around the middle of this year. By FY13, the group aims to finish planting 15,000 hectares.

The 8,500ha that was planted is expected to mature in FY13, thus doubling its production from FY12.

"After tweaking our ILF assumptions, our FY12-13 earnings are thus lifted by 2-6%. Our fair value is raised slightly to RM5.50 (RM5.41 previously) based on unchanged target 16x CY11 EPS. Maintain Outperform," it said.

KLK - KL Kepong buys land at reasonable price

Stock Name: KLK
Company Name: KUALA LUMPUR KEPONG BHD
Research House: ECMLIBRA



The acquisition of 7,177 hectares will add to the 133,114-hectare oil palm landbank of Kuala Lumpur Kepong Bhd (KLK) in Indonesia, according to ECM Libra Investment Research.

KLK announced yesterday its subsidiary KL-Kepong Plantation Holdings Sdn Bhd was buying 95 per cent of PT Bumi Makmur Sejahtera Jaya (PTBMS) from Tjong Hasan Agus Salim and Tjhang Ardy Fadrinata.

PTBMS holds two certificates of Izin Lokasi for land measuring 2,336.62 hectares in Desa Mentawak and Desa Air Kelik, Kecamatan Kepala Kampit, Belitung Timur, and another 4,840 hectares in Desa Lilangan, Desa Limbongan, Desa Jangkar Asam, and Desa Gantung, Kecamatan Gantung, Belitung Timur.

"In terms of purchase price for the Izin Lokasi (location permit) land, the purchase price comes up to roughly RM12,300 per hectare," ECM Libra Investment said in an equity note today.

"Generally, RM12,000 per hectare for green-field land is a reasonable price to pay, whether in Malaysia or in Indonesia," it said.

ECM Libra Investment said that KLK has a planting target of 15,000 hectares per annum.

"With its current unplanted landbank in Indonesia (including the acquisition) and assuming no new acquisitions, the group will take 4.2 more years to complete planting. Major maturities in Indonesia will kick in two to three years' time," it said.

ECM Libra Investment said it continued to have a "buy" on KLK with a target price of RM21.70. -- Bernama