MHB - Earnings forecast upgrade for MMHE

Stock Name: MHB
Company Name: MALAYSIA MARINE AND HEAVY ENG
Research House: OSK

OSK Research has upgraded Malaysia Marine and Heavy Engineering Holdings Bhd's(MMHE) financial year 2012 earnings forecast by 14 per cent.

This follows the company's announcement that it has entered into a memorandum of understanding (MoU) with Sime Darby Engineering for the acquisition of a fabrication yard in Pasir Gudang for RM399 million.

OSK Research said the acquisition enables MMHE to capitalise on the expanded yard capacity and hence, develop the flexibility to undertake a larger number of project bids, to enlarge its share of domestic and regional contracts.

"We view this acquisition positively as MMHE can now double its annual capacity to 129,700 tonnes," it said in a research note today.

The research house said the acquisition is timely as the company has strong orders but lacks sufficient yard space to perform its fabrication jobs due to an existing high utilisation rate of above 80 per cent.

Currently, MMHE possesses a RM3.1 billion orderbook and a tenderbook worth RM5 billion, a portion of which management expects to realise by the next quarter.

Following the earnings forecast upgrade, OSK has maintained a "buy" call on MMHE but upgraded the fair value of the company to RM8.23 from RM7.20 previously. --Bernama

PCHEM - Petronas Chem a 'buy' on product demand

Stock Name: PCHEM
Company Name: PETRONAS CHEMICALS GROUP BHD
Research House: OSK

Petronas Chemicals Group Bhd (PCG), the leading integrated petrochemicals producer in Malaysia, is expected to see continued demand for its products from China, India and the Asia Pacific.

PCG produces a diversified range of petrochemical products from its olefins and derivatives segment as well as fertilisers and methanol.

In a research note today, OSK Research said PCG's utilisation rate for both segments stood at 86 per cent and 82 per cent respectively, for the fourth quarter of financial year 2011.

Thus, it added, the PCG management is targeting for the utilisation rate of its plants to hit 90 per cent.

OSK said in addition, PCG also expects the feasibility study on its Refinery and Petrochemical Integrated Development Project to be completed by year-end.

The research house has maintained a "buy" call on PCG's stocks at RM9.28. -- Bernama

SIME - Sime Darby raised to 'hold' at UOB-Kay Hian

Stock Name: SIME
Company Name: SIME DARBY BHD
Research House: UOB

Sime Darby Bhd was raised to “hold” from “sell” at UOB Kay Hian Holdings Ltd after the world’s biggest listed palm oil producer reported better-than-expected earnings for the third quarter ended March 31.

The share price estimate for the Malaysian company was increased to RM9.40 from RM8, Vincent Khoo, a Kuala Lumpur-based analyst at UOB-Kay Hian, wrote in a report today. -- Bloomberg

ALAM - Alliance Research downgrades Alam Maritim to Sell, cuts TP to 89 sen

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

KUALA LUMPUR: Alliance Research Sdn Bhd has downgraded ALAM MARITIM RESOURCES BHD [] to a Sell and slashed its target price to 89 sen from 98 sen, and said the company's earning visibility remained uncertain.

The research house also downgraded Alam's FY11 and FY12 net profit projection by 15% to 20% due to its lower than expected 1QFY11 results.

It said Alam registered a smaller net loss of RM6.7 million in 1QFY11 compared to a net loss of RM49 million in 4QFY10.

The worst-than-expected results were hit by losses suffered at its associates division, higher'than-expected operating expenses (demobilisation of vessels for repairs and maintenance) and lower vessels utilisation rate, it said in a note May 30.

'Correspondingly our target price is downgraded from 98 sen to 89 sen based on 13x revised FY11 EPS.

'Since the current share price of RM1.05 represent a downside of 15.2%, we downgrade our call from Hold to Sell,' it said.

IJM - Inter-Pacific maintains Outperform rating, RM3.23 TP for IJM Land

Stock Name: IJM
Company Name: IJM CORPORATION BHD
Research House: INTER PACIFIC

KUALA LUMPUR: Inter-Pacific Research Sdn Bhd has maintained its Outperform call on IJM Land Bhd at RM2.80 with a target price of RM3.23.

The research house said in a note May 30 that it favoured IJM Land for its (i) diversified land banks with exposure to major urban growth areas; (ii) projects worth RM2 billion to be launched in FY12, and (iii) healthy balance sheet with 0.2 times net cash.

GENM - Genting Malaysia raised to 'buy' at OSK

Stock Name: GENM
Company Name: GENTING MALAYSIA BERHAD
Research House: OSK

Genting Malaysia Bhd was raised to “buy” from “neutral” at OSK Research Sdn Bhd to reflect higher earnings estimates from its UK business.

The fair value for the stock was increased to RM4.10 from RM4.05, OSK wrote in a report today. -- Bloomberg

KNM - Tenaga powers KLCI higher, KNM slumps

Stock Name: KNM
Company Name: KNM GROUP BHD
Research House: MAYBANK

KUALA LUMPUR: Tenaga Nasional helped power the FBM KLCI to a higher close at midday on Friday, May 27 on hopes of revised tariff by government during the National Economic Council meeting scheduled for Friday.

Key regional markets were also higher in the morning session, with Reuters reporting that investors were on a bargain hunting after the recent falls while the euro advanced.

At 12.30pm, the FBM KLCI was up 7.49 points to 1,548.43. Turnover was 447.13 million shares valued at RM692.33 million. There broader market was weaker with losers beating gainers 395 to 246 while 279 stocks were unchanged.

Tenaga up 22c to RM6.52 midday, on hopes of revised tariff by government.'' Among PLANTATION []s, KLK rose 30 sen to RM22.18, PPB 18 sen to RM17.70 and Batu Kawan 18 sen also to RM16.44.

Genting's strong set of earnings saw the shares climb 12 sen to RM11.22 while among the banks, HLFG rose 20 sen to RM11.70 and HL Bank 18 sen to RM12.08.

Among the losers, KNM fell 30 sen to RM2.23, the biggest one day loss in recent months after a poor set of first quarter earnings as investors ignored news of its RM217 million Uzbek contract.

MIDF Research maintained a Buy on KNM with a target price of RM3.20 while Maybank Investment Bank Research was more optimistic, keeping NMN as Buy with an unchanged target price of RM3.20.

Perstima was the top loser, down 47 sen to RM4.70 after its fourth quarter net profit fell sharply to RM6.49 million from RM26.62 million a year ago.

Other decliners were F&N, down 22 sen to RM19.28 in thin trade, Cypark shed 14 sen to RM2.06 and MSC 10 sen to RM5.39.

KNM - Tenaga powers KLCI higher, KNM slumps

Stock Name: KNM
Company Name: KNM GROUP BHD
Research House: MIDF

KUALA LUMPUR: Tenaga Nasional helped power the FBM KLCI to a higher close at midday on Friday, May 27 on hopes of revised tariff by government during the National Economic Council meeting scheduled for Friday.

Key regional markets were also higher in the morning session, with Reuters reporting that investors were on a bargain hunting after the recent falls while the euro advanced.

At 12.30pm, the FBM KLCI was up 7.49 points to 1,548.43. Turnover was 447.13 million shares valued at RM692.33 million. There broader market was weaker with losers beating gainers 395 to 246 while 279 stocks were unchanged.

Tenaga up 22c to RM6.52 midday, on hopes of revised tariff by government.'' Among PLANTATION []s, KLK rose 30 sen to RM22.18, PPB 18 sen to RM17.70 and Batu Kawan 18 sen also to RM16.44.

Genting's strong set of earnings saw the shares climb 12 sen to RM11.22 while among the banks, HLFG rose 20 sen to RM11.70 and HL Bank 18 sen to RM12.08.

Among the losers, KNM fell 30 sen to RM2.23, the biggest one day loss in recent months after a poor set of first quarter earnings as investors ignored news of its RM217 million Uzbek contract.

MIDF Research maintained a Buy on KNM with a target price of RM3.20 while Maybank Investment Bank Research was more optimistic, keeping NMN as Buy with an unchanged target price of RM3.20.

Perstima was the top loser, down 47 sen to RM4.70 after its fourth quarter net profit fell sharply to RM6.49 million from RM26.62 million a year ago.

Other decliners were F&N, down 22 sen to RM19.28 in thin trade, Cypark shed 14 sen to RM2.06 and MSC 10 sen to RM5.39.

GENM - OSK maintains 'neutral' call on Genting

Stock Name: GENM
Company Name: GENTING MALAYSIA BERHAD
Research House: OSK

OSK Research is maintaining a "neutral" stance on Genting Malaysia (GENM) despite the group reporting improved results in the first quarter of the year.

"The group's first quarter earnings represented 27.7 per cent and 28.8 per cent of consensus and our full year forecasts.

"We deem the results to be in line with estimates as the first quarter is seasonally the strongest quarter, with the UK gaming operation benefitting from an above average luck factor, but still remains volatile and could normalise in the ensuing quarters," OSK Research said in a research note today.

It still preferred parent company, Genting Bhd, which is trading at a similar price to earnings ratio, but had a better growth rate on top of its exposure to the entire group's global casino operations, and value unlocking potential of its non-core gaming assets.

Meanwhile, MIMB Investment Bank is recommending a "Buy" with a new target price of RM4.26 for GENM, following continued resilient local earnings coupled with impressive numbers contributed by its UK casino operation.

"On the back of New York new site to be operational coupled with improving UK operations, we are now turning bullish on GENM," it added. -- Bernama

MRCB - MRCB could get RRIM land job: OSK

Stock Name: MRCB
Company Name: MALAYSIAN RESOURCES CORP
Research House: OSK

Malaysian Resources Corporation Bhd (MRCB) could be selected to undertake the development of the Rubber Research Institute
(RRIM) land in Sungai Buloh, Selangor.

"We believe this will be an upside catalyst for MRCB," OSK Research Sdn Bhd said in a research note today.

It maintained a trading "buy" recommendation on MRCB at an unchanged fair value of RM2.58. -- Bernama