Stock Name: TOPGLOV
Company Name: TOP GLOVE CORPORATION BHD
Company Name: TOP GLOVE CORPORATION BHD
| Research House: MIDF | Price Call: SELL | Target Price: 3.29 |
December 14, 2011
HLIB Research 14 Dec 2011 (Plantations; SP Setia; Mah Sing; Traders Brief) (Part 2/2)
Stock Name: SPSETIA
Company Name: SP SETIA BHD
Stock Name: MAHSING
Company Name: MAH SING GROUP BHD
Company Name: SP SETIA BHD
| Research House: HLG | Price Call: HOLD | Target Price: 3.90 |
Stock Name: MAHSING
Company Name: MAH SING GROUP BHD
| Research House: HLG | Price Call: BUY | Target Price: 2.37 |
Plantations (Neutral)
Palm oil inventory declines in Nov 11
'''' Palm oil inventory in Nov 11 declined by 1.5% mom to 2.07m tonnes, mainly on the back of a 14.8% mom decline in production that more than offset lower domestic consumption and exports.
'''' Production declined by 14.8% mom to 1.63m tonnes from a two-year high of 1.91m tonnes in Oct 11, mainly due to: (1) The end of peak production cycle; and (2) Adverse weather that affected harvesting of palm oil. Exports, on the other hand, declined by 9.9% mom to 1.66m tonnes, led by a 17.9%, 20.8%, and 14.1% mom decline from China, India, and Netherlands respectively.
'''' On a yoy basis, palm oil inventory rose by 26.5% mainly on: (1) Higher beginning inventory; and (2) A 15.5% increase in production (2010's production was hit by La Nina), which more than offset a 10.7% increase in exports.
'''' We are keeping our average CPO price assumption of RM3,000/tonne for 2012-13 as:
- We expect palm oil prices to come off in 2H12 as La Nina is expected to subside (by end-2Q12), which would bring palm oil production higher; and
- The European debt crisis, which is expected to remain long drawn over the medium term, which may affect demand for vegetable oils including palm oil.
'''' Given the rich valuation of the plantation stocks vis-''-vis the regional peers, we are maintaining our Neutral stance on the plantation.
''
SP Setia (HOLD)
Beranang land update
'''' SP Setia have hit a snag in their Beranang land acquisition, with the Vendor refusing to extend the deadline of the conditions precedent ("CP") for the deal. The original deadline was 1H FY12.
'''' SP Setia is currently seeking legal advice and will seek the appropriate relief from the court, if necessary.
'''' A worst-case scenario would see them missing on the opportunity to develop an RM3.5bn GDV mixed residential township and break into the affordable housing in a big way.'' Nonetheless, they still have their ongoing acquisition for 673 acres of land in nearby Semenyih.
'''' Even if that were to occur, it would not be sufficient to affect our earnings forecasts for SP Setia.
'''' Maintain HOLD and target price of RM3.90, which is the offer price.
''
Mah Sing (BUY)
Pekeliling Update
'''' Mah Sing has hit a snag in its 60/40 Joint Venture Agreement ("JVA") with Asie and Usaha Nusantara ("the Vendors") over the 4.08-acre land acquisition at Pekeliling.''
'''' Recall that under the JVA, Mah Sing was to developed an RM900m mixed development on the land.
'''' The Vendors are arguing that the JVA has lapsed, while Mah Sing is claiming that it has not.''
'''' Impact and timeline of this potential dispute are uncertain given lack of details.'' But even in the event of a worst-case scenario of the Pekeliling JV being called off, we believe that impact will be minimal given their strong project pipeline and land banking activities.
'''' No change to our earnings forecasts and positive outlook for Mah Sing. Maintain BUY and RNAV-based price target of RM2.37 (30% discount to RNAV).
''
KLCI: Critical support near 1450 pts''
'''' Volatility is here to stay for a while as near term market trend will continue to be dictated by headlines in Europe.
'''' Immediate crucial support is the 50-d SMA or uptrend line at 1450. A breakdown below 1450 would mean that the rally from 1311 low (Sep 26) is likely exhausted and will head toward lower Bollinger band (1426). Resistance levels are 10-d SMA (1476), 38.2% FR (1487) and 200-d SMA (1502).
''
RSAWIT: Anticipating a technical rebound''
'''' Currently, RSAWIT is trading at 0.75x P/BV against peers' average of 1.48x. The recent correction from RM1.04 to RM0.83 has nearly reached the 38.2% FR level and we think a temporary base has been formed. Based on hourly chart, technical indicators are rebounding from oversold positions and traders with higher risk appetite may start to accumulate before stronger rebound towards RM1.00-1.04. Immediate supports are RM0.855 (30-d SMA), RM0.83 and RM0.81 (lower Bollinger band). Cut loss below RM0.80
RHB Research maintains market perform on Faber, FV RM1.53
Stock Name: FABER
Company Name: FABER GROUP BHD
KUALA LUMPUR (Dec 14): RHB Research Institute is maintaining its market perform call on FABER GROUP BHD [] and leaving its sum-of-parts fair value estimate of RM1.53 unchanged pending the outcome of a lawsuit filed by a UAE contractor
It said on Wednesday that Faber reported that its UAE subsidiary, Faber LLC, and Project Penyelenggaraan Lebuhraya Bhd (Propel) received a summons and statement of claim from the UAE contractor Al Femah Contracting and Transporting Establishment (Al Femah) amounting to about RM13.1 million.
RHB Research said following an earlier lawsuit by Baynona Group, Faber'' now faces new claims made by Al Femah in relation to completed contract works for the infrastructure facilities at Madinat Zayed, UAE.
The contract works were first awarded to Faber LLC by the Department of Municipal Affairs, Western Region Municipality was subsequently contracted out to Propel which in turn, subcontracted out works to Al Femah.
'We understand from management that there was no direct award of subcontracting works to Al Femah. Propel had also informed Faber that it is currently disputing an additional claim of approximately RM7.3 million from Al Femah, on top of the approximately RM5.7 million outstanding amount owed to Al Femah,' ir said.
The research house said the lawsuit against Faber is currently at a preliminary stage as Al Femah is seeking Al Dhafra Court's approval to accept the case and serve summons to Faber and Propel in relation to the amounts claimed.
'Risks to our view are a failure to secure an extension to the concession agreement with the government; and delays in property launches and approvals, which could affect revenues from the property segment,' it said.
Company Name: FABER GROUP BHD
| Research House: RHB | Price Call: HOLD | Target Price: 1.53 |
KUALA LUMPUR (Dec 14): RHB Research Institute is maintaining its market perform call on FABER GROUP BHD [] and leaving its sum-of-parts fair value estimate of RM1.53 unchanged pending the outcome of a lawsuit filed by a UAE contractor
It said on Wednesday that Faber reported that its UAE subsidiary, Faber LLC, and Project Penyelenggaraan Lebuhraya Bhd (Propel) received a summons and statement of claim from the UAE contractor Al Femah Contracting and Transporting Establishment (Al Femah) amounting to about RM13.1 million.
RHB Research said following an earlier lawsuit by Baynona Group, Faber'' now faces new claims made by Al Femah in relation to completed contract works for the infrastructure facilities at Madinat Zayed, UAE.
The contract works were first awarded to Faber LLC by the Department of Municipal Affairs, Western Region Municipality was subsequently contracted out to Propel which in turn, subcontracted out works to Al Femah.
'We understand from management that there was no direct award of subcontracting works to Al Femah. Propel had also informed Faber that it is currently disputing an additional claim of approximately RM7.3 million from Al Femah, on top of the approximately RM5.7 million outstanding amount owed to Al Femah,' ir said.
The research house said the lawsuit against Faber is currently at a preliminary stage as Al Femah is seeking Al Dhafra Court's approval to accept the case and serve summons to Faber and Propel in relation to the amounts claimed.
'Risks to our view are a failure to secure an extension to the concession agreement with the government; and delays in property launches and approvals, which could affect revenues from the property segment,' it said.
December 13, 2011
Dividend reinvestment plan due on 15 Dec
Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD
Company Name: MALAYAN BANKING BHD
| Research House: AMMB | Price Call: BUY | Target Price: 9.20 |
Strong Earnings Growth Driven By Plantation
Stock Name: JTIASA
Company Name: JAYA TIASA HOLDINGS BHD
Company Name: JAYA TIASA HOLDINGS BHD
| Research House: RHB | Price Call: BUY | Target Price: 7.28 |
HLIB Research 13 December 2011 (BToto; Traders Brief)
Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD
Company Name: BERJAYA SPORTS TOTO BHD
| Research House: HLG | Price Call: BUY | Target Price: 4.92 |
BToto (BUY)
1HFY12 Results In-Line
'''' BToto's 1HFY12 net profit of RM197.8m came largely in-line, accounting for 50% of HLIB's and street's estimates.
'''' It declared second interim single tier dividend of 8 sen per share payable on 18 Jan 2012. 1HFY12's dividend totaled to 16 sen (1HFY11: 12 sen), representing dividend payout ratio and dividend yield of 109.3% and 3.6% respectively.
'''' The increase in net profit yoy was mainly due to the introduction of 4D Jackpot and lower prize payout ratio, partially offset by lesser draw days. On qoq basis, the increase is attributed to the lower prize payout ratio which also partially offset by lesser draw days in the quarter.
'''' Besides, BToto's total sales per draw increased 4.3% qoq and 4.4% yoy shows better performance in its 4D Jackpot game despite lesser draw days during the quarter.
'''' 4D Jackpot's sales remained stable during the quarter at RM1.7m/draw, reaching to 44.4% market share against Magnum's 55.6%.
'''' Forecasts remained unchanged with TP of RM4.92 based on DCF with WACC of 8.8%. Maintain BUY.
''
KLCI: Volatility ahead''
'''' Amid continued volatility, we still advocate the strategy of buy on weakness and take profits in any rebound, in anticipation of year-end window dressing activities, potential Chinese New Year and pre-election rallies as well as sufficient domestic catalysts and fiscal stimuli that will support a modest economic growth in 2012. Immediate supports are 50-d SMA or uptrend line (1449), followed by lower Bollinger band (1426). Resistance levels are 10-d SMA (1474) and 200-d SMA (1503).
''
MRCB: Base building for an impending breakout''
'''' After rising to 52-wk high of RM2.60 (2 Aug), it tumbled to RM1.48 (26 Sep) before trending upwards to RM1.97 yesterday. MRCB is likely to consolidate for a short while with immediate support at RM1.87 (Nov 24 low).
'''' After a brief consolidation, the next upswing is expected to push prices towards its daily upper Bollinger band (RM2.06) and 200-d SMA (RM2.10). A breakout above RM2.10 will drive prices higher towards stronger resistance zones of RM2.18 (38.2% FR) and RM2.35 (23.6% FR). Cut loss below RM1.85.
Berjaya Sports Toto (Buy): All I want for Christmas is more dividends
Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD
Great results. 2QFY12 net profit of RM105.7m (+62% YoY, +15% QoQ) brought 1HFY12 net profit to RM197.8m (+53% YoY), within expectations at 49% of our FY12 estimate. 1HFY12 revenue of RM1.7b (+2% YoY) was also in line at 48% of our FY12 estimate. Although it surprised with another interim net DPS of 8 sen (16 sen YTD), representing a net DPR of 108% (assumption: 75%), we still hold out for a major capital management exercise. Maintain Buy, RM4.85 TP.
Maybank research (13 December 2011)
Click here for full report
Company Name: BERJAYA SPORTS TOTO BHD
| Research House: MAYBANK | Price Call: BUY | Target Price: 4.85 |
Great results. 2QFY12 net profit of RM105.7m (+62% YoY, +15% QoQ) brought 1HFY12 net profit to RM197.8m (+53% YoY), within expectations at 49% of our FY12 estimate. 1HFY12 revenue of RM1.7b (+2% YoY) was also in line at 48% of our FY12 estimate. Although it surprised with another interim net DPS of 8 sen (16 sen YTD), representing a net DPR of 108% (assumption: 75%), we still hold out for a major capital management exercise. Maintain Buy, RM4.85 TP.
Maybank research (13 December 2011)
Click here for full report
Axiata edges up after Celcom teams with Broadcast Australia
Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD
KUALA LUMPUR (Dec 13): Axiata Group Bhd shares advanced on Tuesday after Celcom signed a teaming agreement with Broadcast Australia, its technical partner in the bid to build infrastructure for the country's digital terrestrial television broadcasting (DTTB) network.
RHB Research in a note Tuesday said that it was positive if Celcom wins the tender, due to the potential for recurring income from renting out the infrastructure for the DTTB network to TV broadcasters.
At 11.45am, Axiata rose two sen to RM4.84 with 846,100 shares traded.
RHB Research Institute has maintained its market perform recommendation on Axiata Group and a fair value of RM5.15, and said capex demands on Celcom did not appear too significant.
'Assuming the cost of building the DTTB network infrastructure is split equally, Celcom only needs to spend an incremental capex of up to RM83 million per annum on top of its existing RM1 billion planned for 2012,' it said.
The Edge FinancialDaily on Tuesday said Celcom estimated the cost of building the infrastructure for the DTTB network would be RM500 million over three to five years, but the share of investment and stakeholding by Celcom and Broadcast Australia has yet to be determined.
Company Name: AXIATA GROUP BERHAD
| Research House: RHB | Price Call: HOLD | Target Price: 5.15 |
KUALA LUMPUR (Dec 13): Axiata Group Bhd shares advanced on Tuesday after Celcom signed a teaming agreement with Broadcast Australia, its technical partner in the bid to build infrastructure for the country's digital terrestrial television broadcasting (DTTB) network.
RHB Research in a note Tuesday said that it was positive if Celcom wins the tender, due to the potential for recurring income from renting out the infrastructure for the DTTB network to TV broadcasters.
At 11.45am, Axiata rose two sen to RM4.84 with 846,100 shares traded.
RHB Research Institute has maintained its market perform recommendation on Axiata Group and a fair value of RM5.15, and said capex demands on Celcom did not appear too significant.
'Assuming the cost of building the DTTB network infrastructure is split equally, Celcom only needs to spend an incremental capex of up to RM83 million per annum on top of its existing RM1 billion planned for 2012,' it said.
The Edge FinancialDaily on Tuesday said Celcom estimated the cost of building the infrastructure for the DTTB network would be RM500 million over three to five years, but the share of investment and stakeholding by Celcom and Broadcast Australia has yet to be determined.
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