Stock Name: GAMUDA
Company Name: GAMUDA BHD
Company Name: GAMUDA BHD
| Research House: ECMLIBRA | Price Call: SELL | Target Price: 2.94 |
December 19, 2011
Industrial properties to sustain property sales
Stock Name: CRESNDO
Company Name: CRESCENDO CORPORATION BHD
Company Name: CRESCENDO CORPORATION BHD
| Research House: TA | Price Call: BUY | Target Price: 1.60 |
RHBInvest Research Highlights 17th December 2011
Stock Name: TOPGLOV
Company Name: TOP GLOVE CORPORATION BHD
Company Name: TOP GLOVE CORPORATION BHD
| Research House: RHB | Price Call: SELL | Target Price: 3.63 |
17th December 2011
| Malaysia Equities |
| Top Story |
| Market Outlook & Strategy 2012 ' Global headwinds & general election; another challenging year ahead Strategy Update (published 16 Dec 2011) - With slowing economic growth, general election and multiple headwinds from the external sector, we believe investors will be in for another challenging year ahead. Our end-2012 FBM KLCI target is set at a conservative level of 1,480, based on unchanged 13x 2013 EPS. We expect a volatile 1H with sentiment gradually improving in the 2H as clarity on the global economy improves and investors begin to look forward to an economic rebound in 2013. - As global headwinds remain strong and situations could get worse, we continue to advocate a defensive investment strategy, focusing on high dividend yielding stocks with reasonably good growth potential. Nevertheless, after a period of volatility, a recovery will undoubtedly follow and as such, we believe it pays for investors to accumulate fundamentally-robust stocks on weakness for tactical plays. Sector-wise, our key overweight calls are telecommunications, gaming, plantation, oil & gas and consumer. - Related story: Earnings Review ' Subdued Earnings; Market Volatile And Uncertain (2 Dec 2011) |
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| Corporate Highlights |
| Gamuda ' 1QFY07/12 net profit grows 49% yoy Market Perform Results/Briefing Note - We consider the results to be within our expectations but below consensus as we expect weaker quarters ahead on: 1) A depleting construction orderbook; and 2) Lower property profits. - Gamuda guided that by Apr 2012, cumulatively, 28 work packages (including the RM7-8bn tunnelling package) of the Sg Buloh ' Kajang (SBK) Line of the Klang Valley MRT project worth a total of RM9bn (45% of total estimated cost) will have been awarded. The market is likely to take this with a pinch of salt, in our view. - Given the very noticeable slowdown in the local property market of late, we feel that Gamuda's property sales target this year may not be achievable. - Maintain Market Perform. Fair value is RM3.02. - Related story: Gamuda Results Preview ' 1QFY07/12 Results To Trail Consensus (12 Dec 2011) Top Glove ' Below expectations Underperform (downgraded) Results Note - 1QFY08/12 results came in below expectations. Key variance was lower-than-expected 1Q EBITDA margin of 10.5% vs. our full-year FY12 EBIT margin assumption of 12.5%. - FY12-14 EPS forecasts cut by 12.4-17.2% as we had overestimated Top Glove's ability to retain savings from lower latex prices. Our target CY12 PER was raised to 14x (from 13x), to bring it in line with our target FBM KLCI PER. However, the earnings revision means our fair value has been lowered to RM3.63 (from RM3.92). Downgrade to Underperform (from market perform). - Related story: Rubber Gloves Sector Update ' Falling latex prices = Improving sentiment towards glove manufacturers (18 Nov 2011) |
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Gamuda advances on upbeat outlook
Stock Name: GAMUDA
Company Name: GAMUDA BHD
KUALA LUMPUR (Dec 19): GAMUDA BHD [] shares advanced on Monday after the company said it was ''upbeat about the outlook for its prospects for the remaining financial year after its earnings climbed 49.5% to RM132.32 million in the first quarter ended Oct 31, 2011, from RM88.53 million a year ago due to higher contributions from all divisions.
At 9.30am, Gamuda rose six sen to RM3.06 with 479,200 shares done.
Gamuda expected a stronger performance this year supported by its ongoing CONSTRUCTION [] projects, continued strong property sales and steady earnings from the water and expressway divisions.
MIDF Research in a note Dec 19 said despite the potential erosion in Gamuda's stock interest after its removal from FBM KLCI Index today, Gamuda's fundamentals still remain intact.
The research house said should Gamuda-MMC secure the KVMRT tunnelling portion, its ''construction order book will reach up to RM RM6 billion-RM7 billion.
Also, the management mentioned that they are now eyeing several projects such as Selangor Langat 2 Water Treatment Plant and Gemas-Johor double tracking project (in participation with the existing contractor), it said.
'We upgrade our recommendation to BUY from Neutral previously with a new target price of RM3.62 (previously RM3.20).
'We derive our target price based on a PER of 14x (FY12 EPS of 22.7sen), which is 0.75 standard deviation below its 10-year average PER,' it said.
Company Name: GAMUDA BHD
| Research House: MIDF | Price Call: BUY | Target Price: 3.62 |
KUALA LUMPUR (Dec 19): GAMUDA BHD [] shares advanced on Monday after the company said it was ''upbeat about the outlook for its prospects for the remaining financial year after its earnings climbed 49.5% to RM132.32 million in the first quarter ended Oct 31, 2011, from RM88.53 million a year ago due to higher contributions from all divisions.
At 9.30am, Gamuda rose six sen to RM3.06 with 479,200 shares done.
Gamuda expected a stronger performance this year supported by its ongoing CONSTRUCTION [] projects, continued strong property sales and steady earnings from the water and expressway divisions.
MIDF Research in a note Dec 19 said despite the potential erosion in Gamuda's stock interest after its removal from FBM KLCI Index today, Gamuda's fundamentals still remain intact.
The research house said should Gamuda-MMC secure the KVMRT tunnelling portion, its ''construction order book will reach up to RM RM6 billion-RM7 billion.
Also, the management mentioned that they are now eyeing several projects such as Selangor Langat 2 Water Treatment Plant and Gemas-Johor double tracking project (in participation with the existing contractor), it said.
'We upgrade our recommendation to BUY from Neutral previously with a new target price of RM3.62 (previously RM3.20).
'We derive our target price based on a PER of 14x (FY12 EPS of 22.7sen), which is 0.75 standard deviation below its 10-year average PER,' it said.
OSK Research maintains Neutral on Top Glove, FV RM4.52
Stock Name: TOPGLOV
Company Name: TOP GLOVE CORPORATION BHD
KUALA LUMPUR (Dec 19): OSK Research is maintaining its Neutral outlook on Top Glove Corp Bhd.
The research house said on Monday that despite a number of near-term setbacks, it had increased its Fair Value for Top Glove to RM4.52 (from RM4.00 previously), based on the existing price-to-earnings ratio of 17 times as it rolled forward to FY13 earnings.
OSK Research said Top Glove's 1QFY12 results met its expectations, but fell short of those of consensus.
'Its 1QFY12 net profit was higher q-o-q, owing to the time lag in passing that quarter's lower latex costs to its customers. However, on a y-o-y comparison, its 1Q net profit was still lower in view of the weaker demand and hence, only about 70% of costs were being passed onto customers.
'Nevertheless, we believe the worst is over for Top Glove as it is expected to benefit from the decline in the price of natural rubber latex, which is used in about 80% of its product mix. Maintain NEUTRAL,' it said.
Company Name: TOP GLOVE CORPORATION BHD
| Research House: OSK | Price Call: HOLD | Target Price: 4.52 |
KUALA LUMPUR (Dec 19): OSK Research is maintaining its Neutral outlook on Top Glove Corp Bhd.
The research house said on Monday that despite a number of near-term setbacks, it had increased its Fair Value for Top Glove to RM4.52 (from RM4.00 previously), based on the existing price-to-earnings ratio of 17 times as it rolled forward to FY13 earnings.
OSK Research said Top Glove's 1QFY12 results met its expectations, but fell short of those of consensus.
'Its 1QFY12 net profit was higher q-o-q, owing to the time lag in passing that quarter's lower latex costs to its customers. However, on a y-o-y comparison, its 1Q net profit was still lower in view of the weaker demand and hence, only about 70% of costs were being passed onto customers.
'Nevertheless, we believe the worst is over for Top Glove as it is expected to benefit from the decline in the price of natural rubber latex, which is used in about 80% of its product mix. Maintain NEUTRAL,' it said.
HDBSVR has Buy on Boustead Holdings, TP RM6.80
Stock Name: BSTEAD
Company Name: BOUSTEAD HOLDINGS BHD
Stock Name: BHIC
Company Name: BOUSTEAD HEAVY INDUSTRIES CORP
KUALA LUMPUR (Dec 19): Hwang DBS Vickers Research has a Buy call on Boustead Holdings with a target price of RM6.80.
It said on Monday that BOUSTEAD HOLDINGS BHD []'s 69% owned Boustead Naval Shipyard Sdn. Bhd had secured a major win after securing a Ministry of Defence (Mindef) contract to supply six patrol vessels with a contract ceiling of RM9 billion.
Boustead Holdings Bhd said its subsidiary Boustead Naval Shipyard had received the letter on Friday to design, construct and deliver six second generation patrol vessels.
The contract carries a ceiling of RM9.0 billion, to be implemented over three Malaysia Plans, 10, 11 and 12. The delivery of the first of class ship is estimated in 2017 with follow-on ships every six months thereafter.
HDBSVR said this was a major win for Boustead as well as for its listed subsidiary BOUSTEAD HEAVY INDUSTRIES CORP [] HIC (BUY, TP RM4).
'We may look to raise our FY12-FY13F EPS pending clarification with management as we had only expected a contract sum of RM7 billion,' it said.
Company Name: BOUSTEAD HOLDINGS BHD
| Research House: HWANGDBS | Price Call: BUY | Target Price: 6.80 |
Stock Name: BHIC
Company Name: BOUSTEAD HEAVY INDUSTRIES CORP
| Research House: HWANGDBS | Price Call: BUY | Target Price: 4.00 |
KUALA LUMPUR (Dec 19): Hwang DBS Vickers Research has a Buy call on Boustead Holdings with a target price of RM6.80.
It said on Monday that BOUSTEAD HOLDINGS BHD []'s 69% owned Boustead Naval Shipyard Sdn. Bhd had secured a major win after securing a Ministry of Defence (Mindef) contract to supply six patrol vessels with a contract ceiling of RM9 billion.
Boustead Holdings Bhd said its subsidiary Boustead Naval Shipyard had received the letter on Friday to design, construct and deliver six second generation patrol vessels.
The contract carries a ceiling of RM9.0 billion, to be implemented over three Malaysia Plans, 10, 11 and 12. The delivery of the first of class ship is estimated in 2017 with follow-on ships every six months thereafter.
HDBSVR said this was a major win for Boustead as well as for its listed subsidiary BOUSTEAD HEAVY INDUSTRIES CORP [] HIC (BUY, TP RM4).
'We may look to raise our FY12-FY13F EPS pending clarification with management as we had only expected a contract sum of RM7 billion,' it said.
Boustead, BHIC top gainers in early trade
Stock Name: BSTEAD
Company Name: BOUSTEAD HOLDINGS BHD
KUAL A LUMPUR (Dec 19): BOUSTEAD HOLDINGS BHD [] and BOUSTEAD HEAVY INDUSTRIES CORP []oration Bhd shares rose in early trade after Boustead Naval Shipyard Sdn. Bhd received the letter of award from the Ministry of Defence to supply six patrol vessels with a contract ceiling of RM9 billion.
At 9.05am, Boustead was up 19 sen to RM5.55 while BHIC added 18 sen to RM3.33.
Hong Leong Investment Bank Bhd Research in a note Monday maintained its Buy call on Boustead with a target price of RM6.50 based on 10% holding company discount to estimated SOP of RM7.23.
The research house said the letter of award was a positive surprise versus its RM7 billion assumption, and kept its forecasts, pending further details from management.
'Our envisaged catalyst has materialized and vindicated our positive view on the stock. The contract would keep its heavy industry division busy over the next 9 years.
'It will also help BHIC to mitigate losses suffered from the vacuum in jobs and cost escalation,' it said.
Company Name: BOUSTEAD HOLDINGS BHD
| Research House: HLG | Price Call: BUY | Target Price: 6.50 |
KUAL A LUMPUR (Dec 19): BOUSTEAD HOLDINGS BHD [] and BOUSTEAD HEAVY INDUSTRIES CORP []oration Bhd shares rose in early trade after Boustead Naval Shipyard Sdn. Bhd received the letter of award from the Ministry of Defence to supply six patrol vessels with a contract ceiling of RM9 billion.
At 9.05am, Boustead was up 19 sen to RM5.55 while BHIC added 18 sen to RM3.33.
Hong Leong Investment Bank Bhd Research in a note Monday maintained its Buy call on Boustead with a target price of RM6.50 based on 10% holding company discount to estimated SOP of RM7.23.
The research house said the letter of award was a positive surprise versus its RM7 billion assumption, and kept its forecasts, pending further details from management.
'Our envisaged catalyst has materialized and vindicated our positive view on the stock. The contract would keep its heavy industry division busy over the next 9 years.
'It will also help BHIC to mitigate losses suffered from the vacuum in jobs and cost escalation,' it said.
RHB Research: Gamuda results within expectations, FV RM3.02
Stock Name: GAMUDA
Company Name: GAMUDA BHD
KUALA LUMPUR (Dec 19): RHB Research Institute considered GAMUDA BHD []'s first quarter results to be within its expectations but below consensus as it expects weaker quarters ahead.
The research house said on Monday that Gamuda could face a depleting CONSTRUCTION [] orderbook and lower property profits.
RHB Research said Gamuda guided that by April 2012, cumulatively, 28 work packages (including the RM7 billion to RM8 billion tunnelling package) of the Sg Buloh ' Kajang (SBK) Line of the Klang Valley MRT project worth a total of RM9 billion (45% of total estimated cost) wouldl have been awarded.
'The market is likely to take this with a pinch of salt, in our view. Given the very noticeable slowdown in the local property market of late, we feel that Gamuda's property sales target this year may not be achievable,' it said.
RHB Research maintained its Market Perform on Gamuda with fair value of RM3.02.
Company Name: GAMUDA BHD
| Research House: RHB | Price Call: HOLD | Target Price: 3.02 |
KUALA LUMPUR (Dec 19): RHB Research Institute considered GAMUDA BHD []'s first quarter results to be within its expectations but below consensus as it expects weaker quarters ahead.
The research house said on Monday that Gamuda could face a depleting CONSTRUCTION [] orderbook and lower property profits.
RHB Research said Gamuda guided that by April 2012, cumulatively, 28 work packages (including the RM7 billion to RM8 billion tunnelling package) of the Sg Buloh ' Kajang (SBK) Line of the Klang Valley MRT project worth a total of RM9 billion (45% of total estimated cost) wouldl have been awarded.
'The market is likely to take this with a pinch of salt, in our view. Given the very noticeable slowdown in the local property market of late, we feel that Gamuda's property sales target this year may not be achievable,' it said.
RHB Research maintained its Market Perform on Gamuda with fair value of RM3.02.
December 16, 2011
KFC Holdings (Hold): Assurance of full distribution
Stock Name: KFC
Company Name: KFC HOLDINGS (M) BHD
Offer price is attractive. Following from our meeting with Massive Equity Sdn Bhd (MESB), the 51:49 joint venture between Johor Corp and CVC Capital Partners Asia III, management assures that there will be full distribution of proceeds up the chain to shareholders of Kulim from the acquisition of QSR's and KFC's assets/liabs and that the latter two companies will be delisted. We maintain that the proposed offer price of RM4/KFC share is attractive to shareholders, pricing the stock at a prospective 2012 PER of 19.4x, based on our forecasts.
Maybank research (16 December 2011)
Click here for full report
Company Name: KFC HOLDINGS (M) BHD
| Research House: MAYBANK | Price Call: HOLD | Target Price: 4.00 |
Offer price is attractive. Following from our meeting with Massive Equity Sdn Bhd (MESB), the 51:49 joint venture between Johor Corp and CVC Capital Partners Asia III, management assures that there will be full distribution of proceeds up the chain to shareholders of Kulim from the acquisition of QSR's and KFC's assets/liabs and that the latter two companies will be delisted. We maintain that the proposed offer price of RM4/KFC share is attractive to shareholders, pricing the stock at a prospective 2012 PER of 19.4x, based on our forecasts.
Maybank research (16 December 2011)
Click here for full report
RHBInvest Research Highlights 16th December 2011
Stock Name: HELP
Company Name: HELP INTERNATIONAL CORPORATION
Company Name: HELP INTERNATIONAL CORPORATION
| Research House: RHB | Price Call: HOLD | Target Price: 1.80 |
16th December 2011
| Top Story |
| Media Prima ' Keeping its chin up in 2012 Underperform Visit Note - Management believes the current environment looks challenging, given the prevailing debt issues in Europe that have led to advertisers tightening their ad spending. Maintaining margins will be one of the key challenges amid rising staff costs. - Maintain earnings forecasts and indicative fair value of RM2.10 based on 12x CY12 EPS of 17.5 sen. Media Prima is vulnerable in the event of an economic downturn from its high exposure to the more expensive broadcasting segment. Maintain Underperform. - Related story: Media Prima Results Note ' Festivities And Cost Efficiencies Boost Profits (21 Nov 2011); Media Sector Update ' Adex Recovers In Oct (22 Nov 2011) |
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| Corporate Highlights |
| HELP ' Expecting a better quarter Market Perform Results Preview - HELP is due to release 4QFY10/11 results on 22 Dec. We are expecting 4QFY11 net profit of RM2m that is a sequential improvement given: 1) historical trends; and 2) lower-than-expected 3Q11. Full-year dividend is anticipated to be minimal, as HELP is conserving its cash for the construction of its Subang 2 campus. - The key earnings driver for HELP in FY12 would be the contribution from its Frasers Business Park campus, where management is guiding for up to 1,000 new students for the campus in FY12, an almost 10% increase on HELP's current total student numbers. - No change to forecasts. Maintain Market Perform (after upgrading the stock from Underperform on 1 Dec), with an unchanged fair value of RM1.80. - Related story: HELP Results Note ' Below Expectations Again (29 Sep 2011); Education Sector Update ' Waning Optimism (29 Sep 2011) Dialog ' Rights and warrants priced Outperform News Update - Yesterday, Dialog announced that the rights issue has been priced at: 1) RM1.20/share for the new rights; and 2) RM2.40/warrant. The price of the new shares is a discount of 46.5% to the estimated theoretical ex-price of RM2.23/share (based on the five-day volume weighted average market price of Dialog up to 14 Dec). - We believe the additional discount is mainly to entice shareholders given the volatile market conditions, but the higher exercise price for the warrants suggests that the company is confident on delivering in the longer term. Maintain Outperform. - Related story: Dialog News Update ' Proposed Fund Raising For Long-Term Projects (19 Aug 2011) |
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