Stock Name: GRANFLO
Company Name: GRAND-FLO SOLUTION BHD
Company Name: GRAND-FLO SOLUTION BHD
| Research House: NETRESEARCH | Price Call: BUY | Target Price: 0.49 |
August 24, 2011
2QFY11 Results Update
Stock Name: GWPLAST
Company Name: GW PLASTICS HLDG BHD
Company Name: GW PLASTICS HLDG BHD
| Research House: NETRESEARCH | Price Call: BUY | Target Price: 0.94 |
2QFY11 Results Update
Stock Name: TALIWRK
Company Name: TALIWORKS CORPORATION BHD
Company Name: TALIWORKS CORPORATION BHD
| Research House: NETRESEARCH | Price Call: BUY | Target Price: 1.30 |
Bina Puri Holdings Bhd RR 2Q FY11
Stock Name: BPURI
Company Name: BINA PURI HOLDINGS BHD
Company Name: BINA PURI HOLDINGS BHD
| Research House: WILSON & YORK | Price Call: BUY | Target Price: 1.60 |
HwangDBS: Buy MMC Corp shares
Stock Name: MMCCORP
Company Name: MMC CORPORATION BHD
HwangDBS Vickers Research has maintained its "buy" call on MMC Corporation Bhd with a target price of RM3.70 despite lowering its estimation for the company's 2011-2013 earnings by six to 16 per cent.
In its Company Focus, the research house said it had cut forecast earnings for MMC after imputing higher tax rates.
It said MMC's second quarter net profit of RM82 million was below its estimate "as the absence of deferred tax income related to the aeromall construction in Senai resulted in a higher effective tax rate for the first half of 2011.
"Pre-tax profit was in line."
It said MMC's core operations remained robust with first half pre-tax profit up 44 per cent to RM553 million. - Bernama
Company Name: MMC CORPORATION BHD
| Research House: HWANGDBS | Price Call: BUY | Target Price: 3.70 |
HwangDBS Vickers Research has maintained its "buy" call on MMC Corporation Bhd with a target price of RM3.70 despite lowering its estimation for the company's 2011-2013 earnings by six to 16 per cent.
In its Company Focus, the research house said it had cut forecast earnings for MMC after imputing higher tax rates.
It said MMC's second quarter net profit of RM82 million was below its estimate "as the absence of deferred tax income related to the aeromall construction in Senai resulted in a higher effective tax rate for the first half of 2011.
"Pre-tax profit was in line."
It said MMC's core operations remained robust with first half pre-tax profit up 44 per cent to RM553 million. - Bernama
AirAsia remains a 'buy' at HLIB, MIDF
Stock Name: AIRASIA
Company Name: AIRASIA BHD
Hong Leong Investment Bank expects AirAsia's passenger yield to increase in the second half of this year, citing a seasonally higher demand and the elimination of competition from Firefly and
Malaysia Airlines as reasons.
In a note today, it also said it expects AirAsia's ancillary income to improve further with the implementation of counter check-in charges effective September 1, the launching of loyalty programme, offer of duty free products and the joint venture with Expedia.
The research firm maintained a "Buy" call on AirAsia with an unchanged target price of RM4.50.
Meanwhile, MIDF research has also maintained a "Trading Buy" call on AirAsia with a lower target price of RM4.15, after rolling over the airline's valuation to financial year 2012.
AirAsia reported that its number of passengers carried in the second quarter this year rose by 14.9 per cent compared with the corresponding quarter of last year.
"We believe that the good operational performance will stir interest in the stock in the near term.
"While we expect the global economy to remain uncertain, we believe that AirAsia is well situated to weather the storm due to its position as a low cost carrier," it said. -- Bernama
Company Name: AIRASIA BHD
| Research House: HLG | Price Call: BUY | Target Price: 4.50 |
Hong Leong Investment Bank expects AirAsia's passenger yield to increase in the second half of this year, citing a seasonally higher demand and the elimination of competition from Firefly and
Malaysia Airlines as reasons.
In a note today, it also said it expects AirAsia's ancillary income to improve further with the implementation of counter check-in charges effective September 1, the launching of loyalty programme, offer of duty free products and the joint venture with Expedia.
The research firm maintained a "Buy" call on AirAsia with an unchanged target price of RM4.50.
Meanwhile, MIDF research has also maintained a "Trading Buy" call on AirAsia with a lower target price of RM4.15, after rolling over the airline's valuation to financial year 2012.
AirAsia reported that its number of passengers carried in the second quarter this year rose by 14.9 per cent compared with the corresponding quarter of last year.
"We believe that the good operational performance will stir interest in the stock in the near term.
"While we expect the global economy to remain uncertain, we believe that AirAsia is well situated to weather the storm due to its position as a low cost carrier," it said. -- Bernama
'Buy' calls on CIMB maintained
Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD
Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD
Hong Leong Investment Bank (HLIB) has cut its forecasts for CIMB Group Holdings Bhd's financial years 2011-2013 by 5.2-5.6 per cent to reflect the lower-than-expected loan growth, on-interest income and net interest margin.
In a note today, the bank said the second quarter FY11 net profit of RM970 million took first half FY11 net profit to RM1.886 billion, or only 44.1 per cent of HLIB's and 45.1 per cent of consensus forecasts.
It said non-interest income may fall short if the capital markets were to soften and this would result in unexpected jump in impaired loans, lower-than-expected loan growth and impact on non-interest income.
HLIB said it would maintain its "buy" call on CIMB, backed by the potential returns which were expected to stay above 10 per cent.
However, it has cut the target price to RM9 from RM9.58.
Meanwhile, MIDF Research said CIMB's loan growth decelerated in the first half FY11 as gross loans increased by only 11 per cent year-on-year at the end of June compared with 13.8 per cent at the end of first quarter FY11.
"CIMB's loan base has expanded to RM176 billion, driven by 25.9 per cent growth at CIMB Niaga, 13.7 per cent growth of Malaysian consumer loans, and 8.8 per cent growth in CIMB Thailand," it said in a note today.
It said corporate loans, however, declined by 5.3 per cent.
MIDF said it would maintain its "buy" call on CIMB with the target price cut to RM9 from RM9.60. -- Bernama
Company Name: CIMB GROUP HOLDINGS BERHAD
| Research House: MIDF | Price Call: BUY | Target Price: 9.00 |
Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD
| Research House: HLG | Price Call: BUY | Target Price: 9.00 |
Hong Leong Investment Bank (HLIB) has cut its forecasts for CIMB Group Holdings Bhd's financial years 2011-2013 by 5.2-5.6 per cent to reflect the lower-than-expected loan growth, on-interest income and net interest margin.
In a note today, the bank said the second quarter FY11 net profit of RM970 million took first half FY11 net profit to RM1.886 billion, or only 44.1 per cent of HLIB's and 45.1 per cent of consensus forecasts.
It said non-interest income may fall short if the capital markets were to soften and this would result in unexpected jump in impaired loans, lower-than-expected loan growth and impact on non-interest income.
HLIB said it would maintain its "buy" call on CIMB, backed by the potential returns which were expected to stay above 10 per cent.
However, it has cut the target price to RM9 from RM9.58.
Meanwhile, MIDF Research said CIMB's loan growth decelerated in the first half FY11 as gross loans increased by only 11 per cent year-on-year at the end of June compared with 13.8 per cent at the end of first quarter FY11.
"CIMB's loan base has expanded to RM176 billion, driven by 25.9 per cent growth at CIMB Niaga, 13.7 per cent growth of Malaysian consumer loans, and 8.8 per cent growth in CIMB Thailand," it said in a note today.
It said corporate loans, however, declined by 5.3 per cent.
MIDF said it would maintain its "buy" call on CIMB with the target price cut to RM9 from RM9.60. -- Bernama
Faber: HSS concession renewal factor
Stock Name: FABER
Company Name: FABER GROUP BHD
Faber Group Bhd
(Aug 24, RM1.80)
Maintain buy at RM1.79 with target price of RM3: Faber's 2QFY11 net profit grew commendably by +16.6% quarter-on-quarter (q-o-q) to RM16.5 million. The negative year-on-year number (-49.1% y-o-y) was not comparable as a result of the non-renewal of infrastructure and low-cost houses maintenance contracts in UAE. Net earnings for 1HFY11 were RM30.7 million, accounting for 40.4% of our full-year figure. We consider this within our estimate as we expect higher property division contribution, continued growth in government hospital support services (HSS) and sustained profit margins in 2HFY11. As such, we are keeping our FY11 profit forecast.
Faber's 2QFY11 revenue declined 5.9% q-o-q to RM186.4 million, weighed down by lower contribution from the integrated facilities management (IFM) non-concession division. However, pre-tax earnings were higher (+12.3% q-o-q to RM28.8 million), lifted by higher property and IFM concession businesses contribution, and overall better margin (+2.5 percentage points to 15.4%). The property division's revenue surged 70.5% y-o-y or 64.5% q-o-q to RM35 million in 2QFY11 due to higher progress billings for the projects in Kepong, Taman Desa and Kota Kinabalu. We believe that new launches of Villa Prima Phase 1A (gross development value [GDV] of RM148 million) in February 2011 also contributed positively to the company's top line. In addition, the IFM concession segment recorded higher revenue at RM137.2 million (+4.9% y-o-y or +0.8% q-o-q).
This was attributed to higher orders and additional facilities at the government hospitals within Faber's concession area.
Faber is likely to secure the HSS concession renewal, supported by the company's proven track record, technical expertise, sound management and government-linked status. Most importantly, following the clinical waste mishandling by an HSS provider (refer to our report dated Aug 2, 2011), Faber's operational integrity offers the company a strong competitive edge against its competitors. Factoring in all aspects, we reaffirm our view that Faber's government HSS concession expiring October 2011, will be extended. Hence earnings visibility for another 15 years. The management indicated that the concession agreement is still pending a decision by the Health Ministry. We expect the property segment to perform well, driven by: (i) Laman Rimbunan Phase 4 and 5 package 3 (estimated GDV of RM100 million and expected launch date in 3Q11); and (ii) mid to high-end condominium located on a 1ha plot of land in Jalan Gurney, Kuala Lumpur (estimated GDV of RM197 million and expected launch date in September). We gather that current GDV and unbilled sales as at March 2011 were still healthy at about RM566 million and RM420 million.
We reiterate our 'buy' recommendation on Faber supported by our firm view that Faber's government HSS concession will be renewed. Our target price for Faber is unchanged at RM3 based on sum-of-parts valuation, implying 14 times 2011 price-earnings ratio (PER). Faber is currently trading at 8.6 times FY11 earnings per share with estimated 3.5% dividend yield. We like Faber's cash rich position with a war chest of RM158 million or 43.5 sen net cash per share (1QFY11: 39 sen). Ex-net cash, the company is currently trading at an undemanding 6.5 times 2011 PER. ' MIDF Research, Aug 24
This article appeared in The Edge Financial Daily, August 25, 2011.
Company Name: FABER GROUP BHD
| Research House: MIDF | Price Call: BUY | Target Price: 3.00 |
Faber Group Bhd
(Aug 24, RM1.80)
Maintain buy at RM1.79 with target price of RM3: Faber's 2QFY11 net profit grew commendably by +16.6% quarter-on-quarter (q-o-q) to RM16.5 million. The negative year-on-year number (-49.1% y-o-y) was not comparable as a result of the non-renewal of infrastructure and low-cost houses maintenance contracts in UAE. Net earnings for 1HFY11 were RM30.7 million, accounting for 40.4% of our full-year figure. We consider this within our estimate as we expect higher property division contribution, continued growth in government hospital support services (HSS) and sustained profit margins in 2HFY11. As such, we are keeping our FY11 profit forecast.
Faber's 2QFY11 revenue declined 5.9% q-o-q to RM186.4 million, weighed down by lower contribution from the integrated facilities management (IFM) non-concession division. However, pre-tax earnings were higher (+12.3% q-o-q to RM28.8 million), lifted by higher property and IFM concession businesses contribution, and overall better margin (+2.5 percentage points to 15.4%). The property division's revenue surged 70.5% y-o-y or 64.5% q-o-q to RM35 million in 2QFY11 due to higher progress billings for the projects in Kepong, Taman Desa and Kota Kinabalu. We believe that new launches of Villa Prima Phase 1A (gross development value [GDV] of RM148 million) in February 2011 also contributed positively to the company's top line. In addition, the IFM concession segment recorded higher revenue at RM137.2 million (+4.9% y-o-y or +0.8% q-o-q).
This was attributed to higher orders and additional facilities at the government hospitals within Faber's concession area.
Faber is likely to secure the HSS concession renewal, supported by the company's proven track record, technical expertise, sound management and government-linked status. Most importantly, following the clinical waste mishandling by an HSS provider (refer to our report dated Aug 2, 2011), Faber's operational integrity offers the company a strong competitive edge against its competitors. Factoring in all aspects, we reaffirm our view that Faber's government HSS concession expiring October 2011, will be extended. Hence earnings visibility for another 15 years. The management indicated that the concession agreement is still pending a decision by the Health Ministry. We expect the property segment to perform well, driven by: (i) Laman Rimbunan Phase 4 and 5 package 3 (estimated GDV of RM100 million and expected launch date in 3Q11); and (ii) mid to high-end condominium located on a 1ha plot of land in Jalan Gurney, Kuala Lumpur (estimated GDV of RM197 million and expected launch date in September). We gather that current GDV and unbilled sales as at March 2011 were still healthy at about RM566 million and RM420 million.
We reiterate our 'buy' recommendation on Faber supported by our firm view that Faber's government HSS concession will be renewed. Our target price for Faber is unchanged at RM3 based on sum-of-parts valuation, implying 14 times 2011 price-earnings ratio (PER). Faber is currently trading at 8.6 times FY11 earnings per share with estimated 3.5% dividend yield. We like Faber's cash rich position with a war chest of RM158 million or 43.5 sen net cash per share (1QFY11: 39 sen). Ex-net cash, the company is currently trading at an undemanding 6.5 times 2011 PER. ' MIDF Research, Aug 24
This article appeared in The Edge Financial Daily, August 25, 2011.
Parkson charging forward with Indonesia unit
Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD
Parkson Holdings Bhd
(Aug 24, RM5.60)
Maintain buy at RM5.60 with revised fair value of RM6.79 (from RM6.60): We reiterate our 'buy' recommendation on Parkson Holdings Bhd (PHB), with a raised sum-of-parts fair value of RM6.79 (RM6.60 previously) upon rolling forward our valuation base year to CY12F and fine-tuning our earnings forecast by -4% to -5% post full-year results.
PHB posted a higher net profit of RM346 million (year-on-year [y-o-y]: +21%) for FY11. Results met consensus estimates, but came in 8% below our 12-month forecast due to a larger than expected variance owing to currency translation from unfavourable foreign exchange movements (strengthening ringgit against the yuan and the Vietnamese dong). Hence, we deem results to be broadly in line with our expectations.
The improved performance in FY11 was mainly due to: (i) Healthy same-store sales growth (China: +12%, Malaysia: +10%, Vietnam: +21%); (ii) Enlarged network of outlets (China: +4 to 47, Malaysia: +1 to 36, Vietnam: +1 to 7) and; (iii) Earnings before interest and tax (Ebit) margin improvement of one percentage point y-o-y to 29% on better cost control and merchandise mix.
On a sequential basis, revenue and net profit in 4QFY11 declined 11% and 33% owing to seasonally lower consumer spending from the absence of Chinese New Year.
Moving forward, our three-year compounded annual growth rate of 22% for FY12F/FY13F will be well underpinned by the management's accelerated expansion in gross floor area (GFA) by 51.5%-owned Parkson Retail Group. Certainly, a more aggressive strategy to add 20% to 25% GFA against 15% per year previously should lower its average store age and help lift same store sales growth of Parkson outlets in China.
Besides China, PHB's earnings growth would also be buoyed by contributions from additional outlets in Malaysia, Vietnam and Indonesia (under Kem Chicks and Centro brands). We maintain our annual new store forecasts of two each in Malaysia and Vietnam, and four in Indonesia. Total merchandise margin should remain flattish at circa 19.5% to 20%, while fashion and apparel as well as cosmetics and accessories are expected to dominate with 70% to 89% of group revenue.
Despite a moderating macroeconomic outlook in China, we remain positive about PHB's long-term earnings growth trajectory. Expect news flows from the proposed listing of 90.1%-owned Parkson Asia to provide some excitement in the medium term. ' AmResearch, Aug 24
This article appeared in The Edge Financial Daily, August 25, 2011.
Company Name: PARKSON HOLDINGS BHD
| Research House: AMMB | Price Call: BUY | Target Price: 6.79 |
Parkson Holdings Bhd
(Aug 24, RM5.60)
Maintain buy at RM5.60 with revised fair value of RM6.79 (from RM6.60): We reiterate our 'buy' recommendation on Parkson Holdings Bhd (PHB), with a raised sum-of-parts fair value of RM6.79 (RM6.60 previously) upon rolling forward our valuation base year to CY12F and fine-tuning our earnings forecast by -4% to -5% post full-year results.
PHB posted a higher net profit of RM346 million (year-on-year [y-o-y]: +21%) for FY11. Results met consensus estimates, but came in 8% below our 12-month forecast due to a larger than expected variance owing to currency translation from unfavourable foreign exchange movements (strengthening ringgit against the yuan and the Vietnamese dong). Hence, we deem results to be broadly in line with our expectations.
The improved performance in FY11 was mainly due to: (i) Healthy same-store sales growth (China: +12%, Malaysia: +10%, Vietnam: +21%); (ii) Enlarged network of outlets (China: +4 to 47, Malaysia: +1 to 36, Vietnam: +1 to 7) and; (iii) Earnings before interest and tax (Ebit) margin improvement of one percentage point y-o-y to 29% on better cost control and merchandise mix.
On a sequential basis, revenue and net profit in 4QFY11 declined 11% and 33% owing to seasonally lower consumer spending from the absence of Chinese New Year.
Moving forward, our three-year compounded annual growth rate of 22% for FY12F/FY13F will be well underpinned by the management's accelerated expansion in gross floor area (GFA) by 51.5%-owned Parkson Retail Group. Certainly, a more aggressive strategy to add 20% to 25% GFA against 15% per year previously should lower its average store age and help lift same store sales growth of Parkson outlets in China.
Besides China, PHB's earnings growth would also be buoyed by contributions from additional outlets in Malaysia, Vietnam and Indonesia (under Kem Chicks and Centro brands). We maintain our annual new store forecasts of two each in Malaysia and Vietnam, and four in Indonesia. Total merchandise margin should remain flattish at circa 19.5% to 20%, while fashion and apparel as well as cosmetics and accessories are expected to dominate with 70% to 89% of group revenue.
Despite a moderating macroeconomic outlook in China, we remain positive about PHB's long-term earnings growth trajectory. Expect news flows from the proposed listing of 90.1%-owned Parkson Asia to provide some excitement in the medium term. ' AmResearch, Aug 24
This article appeared in The Edge Financial Daily, August 25, 2011.
Pos Malaysia still delivers on time
Stock Name: POS
Company Name: POS MALAYSIA BHD
Pos Malaysia Bhd
(Aug 24, RM3)
Maintain buy at RM3 with fair value of RM4.12: POSM's 1HFY11 revenue and core net earnings of RM591 million and RM70.63 million were slightly above our and consensus estimates, representing 53% of our and consensus' FY11 forecasts. The strong earnings were bolstered by resilient mail revenue, the group's major revenue contributor (63% of total revenue in 2010).
Though core earnings were down 47% quarter-on-quarter due to seasonal factors (mail volume tends to increase in 1Q owing to Employees Provident Fund statements and so on), it surged 37.5% year-on-year (y-o-y) and 86.1% year-to-date (YTD) in 1HFY11, thanks to the domestic tariff hike effective July 1, 2010 and its transformation initiatives.
POSM recorded commendable revenue growth of 25% y-o-y. Its core mail business was the most profitable division. Revenue and operating profit jumped 27% and 36.4% y-o-y'' on the back of the domestic tariff hike, which resulted in higher margins.
Its courier business, PosLaju ' with the largest market share domestically (25% of total market share) ' saw an 18% y-o-y rise in revenue and 17% jump in operating profit owing to better route optimisation and delivery beats.
Retail grew by 7% and we believe it will see steady growth via its tie-ups with banks. Overall operating profit soared 107% YTD, owing to the domestic tariff hike and the benefits reaped from the group's transformation programme.
We like POSM's strong management team and efforts to bring the company in line with international best practice. We are positive on its business, especially the retail business following the tie-ups with RHB Bank Bhd and Malayan Banking Bhd to offer shared banking services (SBS), and potentially Bank Muamalat and UniAsia Insurance. These will boost POSM's retail segment given that SBS should bring in high margins.
With earnings in line, we reiterate our 'buy' call on POSM with an unchanged fair value of RM4.12 based on sum-of-parts valuation. We are still waiting for POSM's new major shareholder to announce plans to revamp its business model. We believe it will redevelop the five pieces of land owned by the national postal services provider. ' OSK Research, Aug 24
This article appeared in The Edge Financial Daily, August 25, 2011.
Company Name: POS MALAYSIA BHD
| Research House: OSK | Price Call: BUY | Target Price: 4.12 |
Pos Malaysia Bhd
(Aug 24, RM3)
Maintain buy at RM3 with fair value of RM4.12: POSM's 1HFY11 revenue and core net earnings of RM591 million and RM70.63 million were slightly above our and consensus estimates, representing 53% of our and consensus' FY11 forecasts. The strong earnings were bolstered by resilient mail revenue, the group's major revenue contributor (63% of total revenue in 2010).
Though core earnings were down 47% quarter-on-quarter due to seasonal factors (mail volume tends to increase in 1Q owing to Employees Provident Fund statements and so on), it surged 37.5% year-on-year (y-o-y) and 86.1% year-to-date (YTD) in 1HFY11, thanks to the domestic tariff hike effective July 1, 2010 and its transformation initiatives.
POSM recorded commendable revenue growth of 25% y-o-y. Its core mail business was the most profitable division. Revenue and operating profit jumped 27% and 36.4% y-o-y'' on the back of the domestic tariff hike, which resulted in higher margins.
Its courier business, PosLaju ' with the largest market share domestically (25% of total market share) ' saw an 18% y-o-y rise in revenue and 17% jump in operating profit owing to better route optimisation and delivery beats.
Retail grew by 7% and we believe it will see steady growth via its tie-ups with banks. Overall operating profit soared 107% YTD, owing to the domestic tariff hike and the benefits reaped from the group's transformation programme.
We like POSM's strong management team and efforts to bring the company in line with international best practice. We are positive on its business, especially the retail business following the tie-ups with RHB Bank Bhd and Malayan Banking Bhd to offer shared banking services (SBS), and potentially Bank Muamalat and UniAsia Insurance. These will boost POSM's retail segment given that SBS should bring in high margins.
With earnings in line, we reiterate our 'buy' call on POSM with an unchanged fair value of RM4.12 based on sum-of-parts valuation. We are still waiting for POSM's new major shareholder to announce plans to revamp its business model. We believe it will redevelop the five pieces of land owned by the national postal services provider. ' OSK Research, Aug 24
This article appeared in The Edge Financial Daily, August 25, 2011.
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