MISC - CIMB Retail Research: MISC prices may pause soon

Stock Name: MISC
Company Name: MISC BHD
Research House: CIMB

KUALA LUMPUR: CIMB Retail Research said MISC has been trading in the RM9.15-RM7.80 band for the past few months.

In a technical outlook issued on Friday, Aug 6 it said if history repeats itself, there is a high possibility that prices may take a breather soon. In the past, the odds usually favour the bears when the candles are hovering near the upper band of this trading zone.

'Indicators are showing subdued pattern, suggesting that future rebound could be weak. Both MACD and RSI signal lines have flattened out,' it said.

CIMB Retail Research said traders should use any rebound towards RM9.15 to sell into strength. However, put a buy stop at RM9.30, just in case.

'If this level is taken out, this would likely be a renewed uptrend trend. Otherwise, next downside targets are RM8.46 (its 200-day SMA), RM8.04 and RM7.80,' it said.

QL - QL Resources rated 'buy' at Citigroup

Stock Name: QL
Company Name: QL RESOURCES BHD
Research House: CITI GROUP



QL Resources Bhd was given a "buy" rating in new coverage by Citigroup Inc analyst Alyson Shin, who said the company had strong earnings growth prospects.

The brokerage set its share-price estimate at RM5.50. -- Bloomberg

IVORY - AmResearch has Buy on Ivory Properties

Stock Name: IVORY
Company Name: IVORY PROPERTIES GROUP BERHAD
Research House: AMMB

KUALA LUMPUR: AmResearch reaffirmed its'' BUY rating on Ivory PROPERTIES [] Bhd (Ivory) with unchanged fair value of RM1.75/share based on 35% discount to its NAV/share of RM2.70/share.

The research house said on Friday, Aug 6 that Ivory is buying prime seafront land (1.1 acres) at the Batu Ferringhi seafront area on Penang island for RM25 million - conditional on Ivory securing planning approval from the local council.

Project comprises 96 units of luxury condominiums with built up areas from 2,400sf to 8,000sf, housed in a 41-storey tower.

'With gross development value of RM159mil, market response is expected to be strong due to the project's scarcity premium and unique appeal,' it said.

AmResearch said potential enhancement to its earnings estimates and NAV is significant. Ivory will be stepping up presales from RM500mil in FY10F to RM750mil in FY11F.

'Current unbilled sales are RM385mil - and rising. Despite its share price outperformance, the stock is still at the early stages of a sustained re-rating cycle. At RM1.28/share currently, Ivory is trading at a steep 53% discount to our NAV of RM2.70/share.

'Forward PE multiples ' 3x-4x, are attractive with EPS CAGR of 63%. Taken together, Ivory remains an excellent transformational growth story,' it said.

MULPHA - CIMB Retail Research: Sell Mulpha Intl into strength

Stock Name: MULPHA
Company Name: MULPHA INTERNATIONAL BHD
Research House: CIMB

KUALA LUMPUR: CIMB Retail Research said Mulpha International is still trapped in a declining channel.

In its technical outlook issued on Friday, Aug 6, it said in the past three attempts, prices failed to inch above the resistance trend line and it thinks it will be indifferent this time around.

'Currently, the candles are just holding above its 30-day and 50-day SMAs but sustainability remains a concern,' it said.

MACD histogram bars are beginning to lose pace while its RSI has also hooked down from the overbought territory. These do not bode well for any recovery effort.

'Sell into strength looks like the best option here. Unless prices can inch above the April high of 52.5 sen, we would prefer to stick with the bears' camp. Next downside targets are 40 sen and 35 sen,' it said.

MUDAJYA - Mudajaya falls to lowest since December

Stock Name: MUDAJYA
Company Name: MUDAJAYA GROUP BHD
Research House: OSK

KUALA LUMPUR: Shares of MUDAJAYA GROUP BHD [] fell as much as 8.7% or 43 sen to RM4.50 in the morning session on Thursday, Aug 5 as worries resurfaced about impact of the Securities Commission's probe into company.

At 12.01pm, it was off its early low, and shed 32 sen to RM4.61 with 3.2 million shares done.

At RM4.61, this was the lowest since Dec 28, according to stock market data.

Market speculation had it that the SC probe followed a complaint about the company's independent power producing project in India, with some analysts noting the company had exceptionally high margins compared with its bigger peers.

However, OSK Research had on Wednesday, maintained a buy on Mudajaya at RM5.08 with a target price of RM7.33.

"Based on our estimates, Phase 1 (RM762 million) hit 41.9% completion as of June versus 23.2% in January. We understand that deliveries for the key plant components are slightly delayed to August from June as scheduled earlier due to minor specification changes," it said.

OSK Research said nonetheless, the management reaffirmed that the entire project is on track for completion by end-2012.

"We expect the bulk of the revenue recognition for Phase 1 to take effect this year. There are also plans to expand capacity by another 2x360MW when the existing four plants near completion.

"This means Mudajaya could land another EP contract estimated to be worth RM1.7 billion," it said.

GAB - AmResearch downgrades Guinness Anchor to Hold

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD
Research House: AMMB

KUALA LUMPUR: AmResearch is downgrading GUINNESS ANCHOR BHD [] (GAB) to HOLD.

It said on Thursday, Aug 5 that despite the group's still positive earnings prospects, its higher fair value of RM8.62/share (at parity to DCF-estimates) offered limited upside potential (<15%)'' and valuation is no longer attractive.

GAB's earnings for the 12 months ended 30 June was up a decent 8% YoY to RM153mil, meeting AmResearch's full-year forecast as well as consensus estimates.

Year-to-date, GAB maintained its leadership position with 57% market share, and circa 70% of industry profit pool.

'In view of GAB's proven track record in maintaining its leadership position with 57% market share in the duopoly industry, we have removed the 10% discount to our DCF-based valuation model.

'Consequently, we arrive at our higher fair value of RM8.62/share (previously RM7.50/share) based at parity to our DCF-estimates,' it said.

AIRASIA - AirAsia a 'buy', says Citigroup

Stock Name: AIRASIA
Company Name: AIRASIA BHD
Research House: CITI GROUP



AirAsia Bhd was raised to "buy" from "sell" at Citigroup Inc after Southeast Asia's biggest discount carrier slowed plane deliveries, a move which will reduce capital expenditure requirements and net gearing.

The share price estimate for the company was increased to RM2.10 from RM1.10, it said in a report dated August 4. -- Bloomberg

DAIBOCI - CIMB Research sees more downside for Daibochi share price

Stock Name: DAIBOCI
Company Name: DAIBOCHI PLASTIC & PACKAGING
Research House: CIMB

KUALA LUMPUR: CIMB Retail Research has a Sell on Daibochi Plastics and Packaging Bhd after the share price broke below its bearish flag pattern few days ago.

The research house said on Thursday, Aug 5 there was still room to the downside. At RM3.14, it is trading at FY11 P/E of 8.1 times and P/BV: 1.9 times.

CIMB Research said its bearish stance is also supported by the fact that prices have also violated its 50-day SMA.

The research house also said the MACD was about to turn negative while its RSI is also below the 50pts mark. These do not bode well for a strong recovery. Near term gains are likely capped at RM3.18-RM3.24.

'A deeper correction would likely take place if prices breach the 200-day SMA at RM2.93. Next downside supports are RM2.93 and RM2.69. Put a buy stop at RM3.30, just in case,' it said.

PLUS - RHB sees strong 2Q performance in PLUS

Stock Name: PLUS
Company Name: PLUS EXPRESSWAYS BHD
Research House: RHB

PLUS Expressways Bhd
(Aug 3, RM3.80)
Maintain outperform at RM3.80 with a fair value of RM4.33: We believe PLUS' 2QFY2012/10 results (due out by end-August) will likely to come in stronger (both year-on-year and quarter-on-quarter), thanks to the encouraging growth registered at its core expressways (consisting of the North-South Expressway, New Klang Valley Expressway, Federal Highway Route 2 and Seremban-Port Dickson Highway) in 2QFY2012/10 (+10.5% y-o-y and 5.8% q-o-q).

Based on an actual traffic volume of 4,069.9 million passenger cars unit per-km registered at PLUS' core expressways in 2QFY12/10, we believe PLUS will likely register a net profit of RM321.7 million in 2QFY2012/10.

This means PLUS' 1HFY2012/10 net profit is likely to come in at RM620.8 million, which is 50.6% to 50.7% of our full-year forecast and the full-year market consensus.

While the increase in petrol price will hurt PLUS's traffic volume, we believe the impact will likely be temporary.

Recall, traffic volume at PLUS' core expressways contracted by 0.1% y-o-y in 2QFY2012/06 (down from a 1.4% y-o-y growth in registered in 1QFY2012/06), following the 30 sen/litre hike in RON97 petrol price at the end of February 2006.

However, PLUS had already started to shrug off the impact, recording a 0.8% y-o-y growth in traffic volume in 3QFY2012/06 (the second full quarter after the petrol price hike) and the traffic volume subsequently normalised in 4QFY2012/06 (+4.2% y-o-y).

This time around, we believe the impact is also likely to be contained given that the price rise is small compared with the previous petrol price hikes in February 2006 and June 2008.

We maintain our earnings forecasts. Risks to our view include: (i) FY1202/10-12 traffic volume growth rate of PLUS' core expressways coming in below our assumption of 5% for FY2012/10, and 3% per annum for FY2012/11 and FY2012/12; (ii) higher-than-expected maintenance costs; and (iii) operating risks in overseas ventures (in particular, Indonesia and India).

Although PLUS' share price has risen by 12.7% since July 5 due to strong traffic volume growth, we are maintaining our outperform recommendation and discounted cash flow-derived fair value of RM4.33 (based on WACC of 7.7%).

We continue to like PLUS for its defensive earnings quality and decent dividend yield of 5% to 6% per annum. ' RHB Research Institute, Aug 3


This article appeared in The Edge Financial Daily, August 4, 2010.

AMMB - OSK Research downgrades AMMB to neutral

Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD
Research House: OSK

AMMB Holdings Bhd
(Aug 3, RM5.15)'' ''
Downgrade to neutral at RM5.40 with a target price of RM5.60: The group has proposed to undertake a dividend re-investment plan as part of its capital management exercise, whereby shareholders of AMMB have the option of reinvesting their dividend entitlements in new AMMB shares. This will give AMMB greater flexibility to meet capital adequacy requirements.

This is similar to Maybank's proposed dividend re-investment scheme, which provided the group with flexibility to boost its core equity ratios, on which Basel 3 is expected to put greater emphasis. The group's core equity ratios were already at a comfortable 8.2% as at March 31, 2010. As such, the proposed scheme is a conservative step taken by the management to gradually raise AMMB's core equity buffers progressively over the next few years without the group resorting to aggressive equity fund raising.

The degree of dilution will depend on: (i) the issue price of the new shares; (ii) quantum of dividends paid; (iii) level of shareholder participation; and (iv) the board's decision on the portion of the cash dividend that shareholders can elect to re-invest as new shares.

Based on our assumptions of a 22% dividend payout ratio for FY2011 and FY2012, and assuming that the entire dividend payout can be converted into new shares, our estimate of the full-equity dilution impact would be slightly less than 2% for FY2011/12.

Given the limited upside to our unchanged target price, we are downgrading our recommendation on the stock to neutral. A longer-term expansion in less volatile transaction fee income and a solidifying forex and derivative platform could be the group's key catalysts for its medium-to-longer term return on equity (ROE) targets of 15% to 18%. The group's immediate-term margins are likely to be pressured by the rising interest rate environment given its high fixed rate loan portfolio and relatively low current account saving account (CASA) deposit base.

We are maintaining our target price at RM5.60 (1.6 times FY2011 PBV, underpinned by 12% FY2011 ROE). We prefer RHB Capital within the mid-size domestic banking space for its superior ROEs of 14% and undemanding 1.2 times to 1.3 times FY2010/11 PBV. ' OSK Research, Aug 3


This article appeared in The Edge Financial Daily, August 4, 2010.