Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD
Company Name: AXIATA GROUP BERHAD
| Research House: OSK | Price Call: BUY | Target Price: 5.60 |
December 15, 2011
In Great Shape
Stock Name: KENCANA
Company Name: KENCANA PETROLEUM BHD
Company Name: KENCANA PETROLEUM BHD
| Research House: OSK | Price Call: BUY | Target Price: 3.60 |
DRB-VW reconsidering capex?
Stock Name: PROTON
Company Name: PROTON HOLDINGS BHD
Company Name: PROTON HOLDINGS BHD
| Research House: AMMB | Price Call: BUY | Target Price: 5.60 |
Gamuda lacks fresh catalysts
Stock Name: GAMUDA
Company Name: GAMUDA BHD
Gamuda Bhd
(Dec 15, RM3.03)
Maintain neutral with unchanged target price of RM3.20: The 18.9% drop in Gamuda's share price year-to-date against a 3.1% decline in the FBM KLCI was due to:
(i) the recent selloff on the equity market amid rising concern over the external environment;
(ii) declining stock interest following its removal from KLCI; and (iii) slowdown in Vietnam property sales due to the weak economy.
Although the valuation looks attractive, the stock is trading at 14 times price-earnings ratio (PER) against its five-year average PER of 25 times, we believe the upside potential is limited due to lack of fresh catalysts apart from the possibility of winning the award for the tunnelling portion of the Klang Valley MRT project.
Gamuda will be removed from KLCI from Dec 19. This should erode interest in the stock especially from foreign investors.
Gamuda's foreign shareholding fell to about 26% as at Dec 14 from 31% at the beginning of 2011.
Gamuda will announce its 1QFY12 results today. We are expecting net profit to fall by 12% quarter-on-quarter (q-o-q) to RM111.5 million owing to lower contribution from its
construction and property divisions.
We believe this is due to:
(i) slower construction activities during the festive season (Ramadan and Hari Raya Aidilfitri (August and September); and
(ii) margin contraction for the construction division amid high building material costs during the quarter.
Looking at Gamuda's construction division, the only major ongoing project is the double-tracking (Ipoh-Padang Besar) project, with the balance gross development value (GDV) at RM2.1 billion.
As for its property division, we expect earnings to continue coming from the domestic markets like Bandar Botanic, Horizon Hills, and Jade Hills. Contribution from its Vietnam property operation will slow down in view of the economic slowdown.
We have decided to retain our forecasts for now pending the announcement of the results today.
On that note, we reiterate our target price at RM3.20 which we derive based on a PER of 14 times based on 0.75 standard deviation below its 10-year average PERs and earnings per share of 22.7sen using FY12. We maintain our 'neutral' recommendation. ' MIDF Research, Dec 15
Company Name: GAMUDA BHD
| Research House: MIDF | Price Call: HOLD | Target Price: 3.20 |
Gamuda Bhd
(Dec 15, RM3.03)
Maintain neutral with unchanged target price of RM3.20: The 18.9% drop in Gamuda's share price year-to-date against a 3.1% decline in the FBM KLCI was due to:
(i) the recent selloff on the equity market amid rising concern over the external environment;
(ii) declining stock interest following its removal from KLCI; and (iii) slowdown in Vietnam property sales due to the weak economy.
Although the valuation looks attractive, the stock is trading at 14 times price-earnings ratio (PER) against its five-year average PER of 25 times, we believe the upside potential is limited due to lack of fresh catalysts apart from the possibility of winning the award for the tunnelling portion of the Klang Valley MRT project.
Gamuda will be removed from KLCI from Dec 19. This should erode interest in the stock especially from foreign investors.
Gamuda's foreign shareholding fell to about 26% as at Dec 14 from 31% at the beginning of 2011.
Gamuda will announce its 1QFY12 results today. We are expecting net profit to fall by 12% quarter-on-quarter (q-o-q) to RM111.5 million owing to lower contribution from its
construction and property divisions.
We believe this is due to:
(i) slower construction activities during the festive season (Ramadan and Hari Raya Aidilfitri (August and September); and
(ii) margin contraction for the construction division amid high building material costs during the quarter.
Looking at Gamuda's construction division, the only major ongoing project is the double-tracking (Ipoh-Padang Besar) project, with the balance gross development value (GDV) at RM2.1 billion.
As for its property division, we expect earnings to continue coming from the domestic markets like Bandar Botanic, Horizon Hills, and Jade Hills. Contribution from its Vietnam property operation will slow down in view of the economic slowdown.
We have decided to retain our forecasts for now pending the announcement of the results today.
On that note, we reiterate our target price at RM3.20 which we derive based on a PER of 14 times based on 0.75 standard deviation below its 10-year average PERs and earnings per share of 22.7sen using FY12. We maintain our 'neutral' recommendation. ' MIDF Research, Dec 15
Sime Darby (Hold) Bucyrus deal concluded
Stock Name: SIME
Company Name: SIME DARBY BHD
Price above our expectations; small earnings impact. Sime has completed the acquisition of former Bucyrus' distribution assets (in Australasia) and rights under Sime's dealership territories for USD360m (or RM1.1bn). While earnings impact is neutral in the short term, the inclusion of Bucyrus product offerings is positive on the longer term. Maintain Hold but raised our TP to RM8.50 (from RM8.36; based on unchanged 16x FY13 PER) on revised earnings.
Maybank research (15 December 2011)
Click here for full report
Company Name: SIME DARBY BHD
| Research House: MAYBANK | Price Call: HOLD | Target Price: 8.50 |
Price above our expectations; small earnings impact. Sime has completed the acquisition of former Bucyrus' distribution assets (in Australasia) and rights under Sime's dealership territories for USD360m (or RM1.1bn). While earnings impact is neutral in the short term, the inclusion of Bucyrus product offerings is positive on the longer term. Maintain Hold but raised our TP to RM8.50 (from RM8.36; based on unchanged 16x FY13 PER) on revised earnings.
Maybank research (15 December 2011)
Click here for full report
KFC Holdings (Malaysia) (Hold): A yummy offer
Stock Name: KFC
Company Name: KFC HOLDINGS (M) BHD
A RM3.2b offer. Massive Equity Sdn Bhd (MESB), jointly owned by Johor Corporation (51%) and CVC Capital Partners Asia III Limited (49%), has proposed to acquire the entire business, assets and liabilities of KFC at an aggregate cash consideration equivalent to RM4/share and RM1/warrant. Cumulatively, this values KFC's entire business at RM3.2b. We maintain our Hold call with a raised TP of RM4 to reflect the offer price, which we believe is attractive to shareholders.
Maybank research (15 December 2011)
Click here for full report
Company Name: KFC HOLDINGS (M) BHD
| Research House: MAYBANK | Price Call: HOLD | Target Price: 4.00 |
A RM3.2b offer. Massive Equity Sdn Bhd (MESB), jointly owned by Johor Corporation (51%) and CVC Capital Partners Asia III Limited (49%), has proposed to acquire the entire business, assets and liabilities of KFC at an aggregate cash consideration equivalent to RM4/share and RM1/warrant. Cumulatively, this values KFC's entire business at RM3.2b. We maintain our Hold call with a raised TP of RM4 to reflect the offer price, which we believe is attractive to shareholders.
Maybank research (15 December 2011)
Click here for full report
RHBInvest Research Highlights 15th December 2011
Stock Name: KENCANA
Company Name: KENCANA PETROLEUM BHD
Stock Name: KFC
Company Name: KFC HOLDINGS (M) BHD
Company Name: KENCANA PETROLEUM BHD
| Research House: RHB | Price Call: BUY | Target Price: 2.94 |
Stock Name: KFC
Company Name: KFC HOLDINGS (M) BHD
| Research House: RHB | Price Call: TRADING BUY | Target Price: 4.00 |
15th December 2011
| Top Story |
| Market Review ' The agony and the ecstasy Market Update - In 2011, the financial markets were temperamental, with contrasting performance in the FBM EMAS between 1H (+4.5%) and 2H (-7.4%), and between the 3Q (-13.3%) and 4Q (+6.8%). - In the last 37 years, there have been more good years (25 with positive annual returns) than bad (12 giving negative returns). While this does not guarantee another positive year for 2012, liquidity remains the key change agent in the current financial markets. |
| |
| Corporate Highlights |
| Axiata ' Upbeat on revenue growth but margins a concern Market Perform Briefing Note - For 2012, management believes Axiata may be able to sustain around the same level of revenue growth seen in 2011 (7% KPI target after adjusting for stronger RM). However, management acknowledges there may be pressure on EBITDA margins, mainly attributable to XL. VS Industry ' New revenue boost but risks remain Underperform (downgraded) Visit Note - We attended the opening ceremony of a new factory for the production of Keurig Coffee Brewers. - Keurig is a pioneer and leading manufacturer of gourmet single-cup brewing systems that mainly caters to the US and Canada markets. - VSI is optimistic on the prospects of this new venture as it could potentially drive earnings in the longer-term. KFC Holdings ' JCorp offers to buy the assets and liabilities of KFCH and QSR Trading Buy News Update - Both KFCH and QSR received an offer by Massive Equity (MESB) for the acquisition of their assets and liabilities for an effective RM4/share and RM6.80/share respectively. MESB is a SPV owned by JCorp (51%) and CVC Capital (49%). The offer would remain open for acceptance until 21 Dec, after which the offer would be withdrawn. - Takeover valuations for both companies seem fair. Given that the buyers include JCorp (KFCH and QSR's ultimate owners), we believe the deal will most likely go through. We thus revise our call on KFCH to Trading Buy (from outperform) with a new fair value of RM4/share, which represents the offer price of KFCH's assets and liabilities. - Related stories: KFCH Company Update ' Offer Price of RM5.60 For QSR's Business (23 Nov 2010); KFCH Company Update ' Another Offer To Buy QSR; KFCH Could Be Privatised (26 Nov 2010) Kencana ' Kicking off favourably Outperform Results Note - 1QFY7/12 net profit came in within our expectations (27.6%) but above consensus (31%). Numbers were mainly bumped by start-up of AME earnings and better margins from one of its divisions. We understand that the company will seek shareholders' approval for the merger with Sapuracrest at its EGM today. - Outperform call and fair value of RM2.94/share maintained. Investors should look to the stock for access to IKB's potential CY13 earnings growth which is estimated to be around 20.1%. |
HLIB Research 15 December 2011 (Construction; Traders Brief)
Stock Name: MRCB
Company Name: MALAYSIAN RESOURCES CORP
Stock Name: SUNWAY
Company Name: SUNWAY BERHAD
Stock Name: MUDAJYA
Company Name: MUDAJAYA GROUP BHD
Stock Name: GAMUDA
Company Name: GAMUDA BHD
Company Name: MALAYSIAN RESOURCES CORP
| Research House: HLG | Price Call: BUY | Target Price: 2.22 |
Stock Name: SUNWAY
Company Name: SUNWAY BERHAD
| Research House: HLG | Price Call: BUY | Target Price: 3.12 |
Stock Name: MUDAJYA
Company Name: MUDAJAYA GROUP BHD
| Research House: HLG | Price Call: BUY | Target Price: 4.61 |
Stock Name: GAMUDA
Company Name: GAMUDA BHD
| Research House: HLG | Price Call: BUY | Target Price: 3.81 |
Construction (OVERWEIGHT)
9M11 results review
'''' There were more disappointments than upside surprises in what was a relatively slow quarter due to summer holidays in the Middle East and Raya festive break. The notable disappointments came from MRCB and TRC Synergy.
'''' Although the ETP projects have yet to materialise, construction counters on average have >1x order book to revenue ratio. Hence, this will be able to last them for at least another year through 2012.
'''' We remain our OVERWEIGHT stance on the sector as we foresee that the ETP projects should materialise in 2012. Notable projects are the ~RM20bn MRT project and various infrastructure projects namely the ~RM5bn West Coast Expressway.
'''' Top picks in order of preference:
MRCB (BUY, TP: RM2.22);
Sunway (BUY, TP: RM3.12);
Mudajaya (BUY, TP: RM4.61);
Gamuda (BUY, TP: RM3.81)
''
More downward correction if 1450 support falters''
'''' Ongoing doubt over the euro-zone debt crisis and prospect of mass euro zone sovereign rating downgrades should continue to dampen investors' sentiment and encourage wild swings in the financial markets. A breakdown of 1450 support would mean that the rally from 1311 low (Sep 26) is likely exhausted and will head toward lower Bollinger band (1426) and 61.8% FR (1420) supports. Resistance levels are 1476-1488.
''
DJIA: Downside bias amid weakening technicals''
'''' After rebounding from 25 Nov low of 11232 pts, the Dow surged to as high as 12266 on 7 Dec before retreating lower to close at 11823 yesterday, below the 200-d SMA of 11942 pts. Following the breakdown of 200-d SMA and mid Bollinger band (11829) as well as the weakening technical outlook, downside risks of Dow has increased. Further supports are 11600-11774. Immediate resistance levels are 11942-12266 levels.
''
VIX: Anticipating a technical rebound''
'''' In view of the grossly oversold indicators and the breakout above the 200-d SMA, we may witness possible technical rebound in the coming days amid rising external woes. A breakout above the downtrend channel near 30 will likely to prompt more upside towards 35.0-36.0 territory, triggering an alarm bell to Dow and global equity markets.
'''' Immediate supports are 23.3 and 20.0.
CIMB Research maintains Outperform on Dialog, target RM3.64
Stock Name: DIALOG
Company Name: DIALOG GROUP BHD
KUALA LUMPUR (Dec 15): CIMB Equities Research is maintaining its Outperform call on DIALOG GROUP BHD [] and continue to value the stock at its sum-of-parts, which does not factor in the new marginal fields.
The research house has a long-term Outperform on Dialog and an unchanged target price of RM3.64.
CIMB Research said it was upbeat on Dialog's ambitious plan to bid for two to three more marginal field developments in CY12 after securing the 15-year Balai contract in Aug 11 together with Petronas Carigali and Australia-based Roc.
'The development cost for a marginal field is around US$500 million to RM1 billion and we understand that Dialog is vying for at least a 30% equity stake,' it said.
CIMB Research said the management assured that it will not make any more cash calls to finance its marginal field venture other than the ongoing rights issue.
'Slated for completion in February 12, the right issue is expected to raise around RM500 million. As at end-Sept 2011, Dialog had RM92 million (4.6 sen/share) net cash,' it said.
Company Name: DIALOG GROUP BHD
| Research House: CIMB | Price Call: BUY | Target Price: 3.64 |
KUALA LUMPUR (Dec 15): CIMB Equities Research is maintaining its Outperform call on DIALOG GROUP BHD [] and continue to value the stock at its sum-of-parts, which does not factor in the new marginal fields.
The research house has a long-term Outperform on Dialog and an unchanged target price of RM3.64.
CIMB Research said it was upbeat on Dialog's ambitious plan to bid for two to three more marginal field developments in CY12 after securing the 15-year Balai contract in Aug 11 together with Petronas Carigali and Australia-based Roc.
'The development cost for a marginal field is around US$500 million to RM1 billion and we understand that Dialog is vying for at least a 30% equity stake,' it said.
CIMB Research said the management assured that it will not make any more cash calls to finance its marginal field venture other than the ongoing rights issue.
'Slated for completion in February 12, the right issue is expected to raise around RM500 million. As at end-Sept 2011, Dialog had RM92 million (4.6 sen/share) net cash,' it said.
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