MRCB - CIMB Research has Buy on MRCB at RM2.19

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

KUALA LUMPUR: CIMB Equities Research has a Buy on MALAYSIAN RESOURCES CORP [] Bhd (MRCB) at RM2.19 at which it is trading at a FY12P/E of 30.3 times and P/BV of 2.3 times.

It said on Thursday, June 9 that MRCB remains trapped within its sideways consolidation triangle despite what it believes is the final leg lower that completed the pattern.

'Prices are also swirling around the moving averages, which supports the sideways view. Technical landscape is flat, which is in line with the sideways triangle view. However, both indicators are building a firm base above their respective support,' it said.

CIMB Research said MRCB could be poised for strong rally soon and breakout of this triangle pattern. Closing above the triangle support at RM2.30 would likely confirm that prices are headed towards RM2.41 and RM2.47 next, where the latter is its 78.6%FR of its 2007-2008 drop.

LATEXX - Latexx raised to 'trading buy' at CIMB

Stock Name: LATEXX
Company Name: LATEXX PARTNERS BHD
Research House: CIMB

Latexx Partners Bhd, a Malaysian rubber glove maker, was raised to “trading buy” from “neutral” at CIMB Investment Bank Bhd after the company agreed to a revised offer to merge with the YTY group.

The share estimate was increased to RM2.60 from RM2.28, Kuala Lumpur-based analyst Terence Wong wrote in a report today.

The stock rose to its highest level in almost three weeks in Kuala Lumpur trading, gaining 3.1 per cent to RM2.34 at 9:03 a.m. local time, set for its highest close since May 23. -- Bloomberg

MBMR - MBM Res untraded after stock upgrade

Stock Name: MBMR
Company Name: MBM RESOURCES BHD
Research House: RHB

MBM Resources Bhd, a Malaysian car distributor, was untraded at 9:16 a.m. in Kuala Lumpur after the stock was upgraded to “outperform” at RHB Research Institute Sdn Bhd with a higher fair value of RM3.75.

Its shares gained 1 per cent to close at RM3.13 yesterday, its highest close since March 3. -- Bloomberg

JOBST - 'Huge growth potential for JobStreet'

Stock Name: JOBST
Company Name: JOBSTREET CORPORATION BHD
Research House: HWANGDBS

KUALA LUMPUR: Hwang DBS Vickers Research sees a huge growth potential for JobStreet Corp, an online recruitment market, with job advertisement volume still registering double-digit growth rates.

In a note today, the research firm said the full growth potential for online recruitment services was yet to be realised.

"This could be unlocked through the increasing broadband/Internet
penetration in the Asia-Pacific region, migration from print to online advertising given its better value proposition, and growing demand for convenient and efficient services," it said.

Hwang said JobStreet was one of few online job recruitment providers with a stable profit track record and was leading in its operating territories.

"It will be a prime beneficiary of industry consolidation," it added.

The research firm maintained a "buy" call for JobStreet with a target price of RM3.60. - Bernama

KENCANA - UOB Kay Hian Research Overweight on Malaysian O&G fabrication yards

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

KUALA LUMPUR: UOB Kay Hian Research has initiated with an Overweight on Malaysia's oil & gas (O&G) fabrication yards as the industry is undergoing a strong cyclical recovery.

It said on Tuesday, June 7 that Petroliam Nasional Bhd (Petronas) had pledged to spend RM50 billion to RM55 billion per year for the next five years, a big increase of 35%-48% from 2010 capex of RM37 billion.

'The rate of increase in Petronas spending is a good gauge of the industry's prospective growth which could be in the region of 20%-30% this year,' it said.

UOB Kay Hian estimated Petronas' capex spending in 2011 would exceed the government's 2011 budgeted development expenditure of RM49 billion.

The three major O&G upstream players' (Marine and Heavy Engineering (MMHE), SAPURACREST PETROLEUM BHD [] and Kencana Petroleum'' Bhd) combined top-line of RM10 billion (which includes overseas contribution) is dwarfed by Petronas' spending plans.

The research house initiated coverage on MMHE with a BUY. It said MMHE wass the closest proxy to Petronas spending as Petronas still had a 40% indirect stake in MMHE after its IPO.

'We project MMHE to deliver net profit CAGR of 24% over the next few years and will be a leading consolidation play. Our target price of RM8.80 is based on 21 times FY12F PE. MMHE's monopoly over deepwater fabrication in Malaysia is its strong point.

As for Kencana, it has initiated coverage on Kencana Petroleum with a HOLD.

'Our target price is RM2.44, based on 18 times FY12F PE, a discount to MMHE's, due to its smaller size. We believe most of its recent contract wins have been factored in its current share price. Entry price is RM2.20,' it said.

UOB Kay Hian said under the Economic Transformation Programme (ETP), the government has proposed the O&G sector to consolidate so that Petronas can create a healthy and growing secondary O&G services industry.

It said Malaysia's fabrication yards give out a good portion of work to subcontractors, surrendering margins. Industry consolidation will reduce fabrication yards' reliance on subcontractors and eliminate execution risks associated with outsourcing.

'MMHE's proposed acquisition of Sime Darby's Ramunia yard would effectively double its Pasir Gudang yard's capacity to 130,000 million tonnes and also raise its share of domestic capacity to 50%.

'Equity partners such as Kencana are moving into a utility-based model where cash flows are more certain. Developing marginal fields with short lifespan also requires the mobilisation of floating production systems (FPS) and mobile operating and storage units (MOPU). Both MMHE and Kencana have the capability to fabricate and convert rigs into FPS and MOPU,' it said.

MHB - UOB Kay Hian Research Overweight on Malaysian O&G fabrication yards

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

KUALA LUMPUR: UOB Kay Hian Research has initiated with an Overweight on Malaysia's oil & gas (O&G) fabrication yards as the industry is undergoing a strong cyclical recovery.

It said on Tuesday, June 7 that Petroliam Nasional Bhd (Petronas) had pledged to spend RM50 billion to RM55 billion per year for the next five years, a big increase of 35%-48% from 2010 capex of RM37 billion.

'The rate of increase in Petronas spending is a good gauge of the industry's prospective growth which could be in the region of 20%-30% this year,' it said.

UOB Kay Hian estimated Petronas' capex spending in 2011 would exceed the government's 2011 budgeted development expenditure of RM49 billion.

The three major O&G upstream players' (Marine and Heavy Engineering (MMHE), SAPURACREST PETROLEUM BHD [] and Kencana Petroleum'' Bhd) combined top-line of RM10 billion (which includes overseas contribution) is dwarfed by Petronas' spending plans.

The research house initiated coverage on MMHE with a BUY. It said MMHE wass the closest proxy to Petronas spending as Petronas still had a 40% indirect stake in MMHE after its IPO.

'We project MMHE to deliver net profit CAGR of 24% over the next few years and will be a leading consolidation play. Our target price of RM8.80 is based on 21 times FY12F PE. MMHE's monopoly over deepwater fabrication in Malaysia is its strong point.

As for Kencana, it has initiated coverage on Kencana Petroleum with a HOLD.

'Our target price is RM2.44, based on 18 times FY12F PE, a discount to MMHE's, due to its smaller size. We believe most of its recent contract wins have been factored in its current share price. Entry price is RM2.20,' it said.

UOB Kay Hian said under the Economic Transformation Programme (ETP), the government has proposed the O&G sector to consolidate so that Petronas can create a healthy and growing secondary O&G services industry.

It said Malaysia's fabrication yards give out a good portion of work to subcontractors, surrendering margins. Industry consolidation will reduce fabrication yards' reliance on subcontractors and eliminate execution risks associated with outsourcing.

'MMHE's proposed acquisition of Sime Darby's Ramunia yard would effectively double its Pasir Gudang yard's capacity to 130,000 million tonnes and also raise its share of domestic capacity to 50%.

'Equity partners such as Kencana are moving into a utility-based model where cash flows are more certain. Developing marginal fields with short lifespan also requires the mobilisation of floating production systems (FPS) and mobile operating and storage units (MOPU). Both MMHE and Kencana have the capability to fabricate and convert rigs into FPS and MOPU,' it said.

MAS - MIDF Research retains sell call on MAS

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
Research House: MIDF

KUALA LUMPUR: MIDF Research has retained its sell call on Malaysia Airlines (MAS) and said that while the national carrier's membership of the oneworld alliance would help boost its revenue and lessen costs, any favourable results will only be noticed in 2013 onwards.

The research house said it was making no changes to its earnings forecast for now till 2012.

'Due'' to'' limited'' implied ''upside potential as well as headwinds'' from escalating'' fuel prices and ''some'' impact'' from'' the'' MENA'' civil'' unrest'' and'' Japanese'' natural ''disasters, we are expecting the coming 2Q11 numbers to be impinged.

'Therefore we reaffirm Sell with a target price of RM1.24, derived by pegging ''its EPS11 to 13.6x PER, which is the average PER of its peers,' said MIDF Research in a note June 7.

''

CENSOF - Century's fair value lifted at OSK

Stock Name: CENSOF
Company Name: CENTURY SOFTWARE HOLDINGS BHD
Research House: OSK

Century Software Holdings Bhd, a Malaysian software company, rose to a record in Kuala Lumpur trading after OSK Research Sdn Bhd said it increased its fair value to 98 sen.

The stock gained 4 per cent to 78.5 sen at 9:16 a.m. local time. -- Bloomberg

MBMR - MBM Resources upgraded to 'buy'

Stock Name: MBMR
Company Name: MBM RESOURCES BHD
Research House: OSK

MBM Resources Bhd, which owns a stake in Malaysian automaker Perusahaan Otomobil Kedua Sdn Bhd, rose to a three-month high in Kuala Lumpur trading after OSK Research Sdn Bhd upgraded the stock to “buy” with a higher fair value of 3.80 ringgit.

Its shares increased 1.3 per cent to RM3.14 at 11:40 a.m. local time, set for their highest close since March 2. -- Bloomberg

PENERGY - Affin Research maintains Buy on Petra Energy

Stock Name: PENERGY
Company Name: PETRA ENERGY BHD
Research House: AFFIN

KUALA LUMPUR: Affin Investment Bank Bhd Research has maintained its Buy call on PETRA ENERGY BHD [] after the company signed a MOU with Labuan Shipyard & Engineering Sdn Bhd to utilize Labuan Shipyard's facilities at Victoria Harbour, Labuan for its fabrication activities.

Under the MOU, the two parties may also explore areas for cooperation to collaborate on projects pertaining to leasing of fabrication yards, fabrication works and storage facilities.

Affin Research said in a note Friday, June 3 that it was neutral on the signing of the MOU as it was an ordinary business arrangement that allows Petra Energy to lease the required yard space to support its RM400m Petronas Carigali HUC work at a stable, pre-agreed rental rate.

'We maintain our Buy rating on Petra Energy with an unchanged TP of RM1.89, based on 12x CY12 PE.

'We continue to like Petra Energy given: (i) our expectation for more HUC, topside maintenance jobs to be awarded in FY11-12; (ii) Petra Energy's established track record in integrated brown field services give them a competitive advantage in contract bidding; and (iii) its RM900m unbilled sales provide visible contract billings for the next 2 years.