IJM - HwangDBS raises target price for IJM

Stock Name: IJM
Company Name: IJM CORPORATION BHD
Research House: HWANGDBS

HwangDBS Vickers Research has raised its target price for IJM Corporation Bhd to RM8.70 from RM7.30 previously.

This follows its upgrading of the company's earnings per share forecast for the 2012 and 2013 financial years by nine to fourteen per cent.

On the construction side, it said there were two jobs in IJM's pipeline that could see its RM4 billion orderbook to at least double. They were the New Pantai Expressway extension and West Coast Expressway which were worth a combined RM5 billion.

Other potential jobs were the LRT extensions Phase 2 (RM2.2 billion), MRT tunneling works for the Blue Line (RM11 billion) and government building jobs such as the KL Financial District, RRIM land and Jalan Cochrane.

"We believe IJM is a strong contender for all these projects given its track record, strong balance sheet and niche in building jobs with experiences in Grade A office, luxury condominiums and other commercial and residential projects," the research house said in its Company Focus today.

In property, it highlighted Canal City and Sebana Cove which would be launched in 2012 with a total gross development value of RM7.4 billion.

"The success of Canal City is important because it would give IJM a much needed flagship Klang Valley township development to leverage on for further expansion, possibly including the RRIM land," it said. -- Bernama

F&N - F&N holds on to gains, AmResearch ups FV to RM22.70

Stock Name: F&N
Company Name: FRASER & NEAVE HOLDINGS BHD
Research House: AMMB

KUALA LUMPUR: Fraser & Neave Holdings Bhd (F&N) continued to be among the top gainers on Friday, May 6, underpinned by its strong earnings and dividends.
At 3.39pm, F&N was up 30 sen to RM18.70 with 60,800 shares done, bucking the weaker market.
The FBM KLCI was down 7.36 points to 1,513.82. Turnover was 602.43 million shares valued at RM908.24 million. Losers beat gainers 473 to 203 while 266 counters were unchanged.
The company posted net profit of RM131.98 million in the second quarter ended March 31, 2011 versus RM85.23 million a year ago, boosted by the sale of a college building.
Revenue was RM1 billion compared with RM872.09 million. Earnings per share were 36.80 sen versus 23.90 sen. It declared 35 sen in dividends.
AmResearch reiterate its BUY recommendation on F&N and lifted its fair value from RM17.40/share to RM22.70/share, based on a PE of 18 times CY11F earnings.
'We believe a small premium is justified given F&N's strong earnings profile within the non-discretionary food industry against a backdrop of rising material costs, as underpinned by its market share leadership position and brand equity strength,' it said.
The research house said though its valuation is at the higher-end of the stock's three-year PE band, it is still at a discount to peer Nestle Malaysia Bhd's current PE of 25 times, at parity to the five-year average historical discount.''

TENAGA - ECM keeps 'hold' call on Tenaga

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD
Research House: ECMLIBRA

With the expected announcement on the operations and maintenance of an 84MW hydro-power plant in Pakistan, Tenaga Nasional Bhd (TNB) is on track to achieve its Key Performance Indicator of RM1.8 to RM1.9 billion worth of revenue from non-regulated businesses.

"We are also pleased to hear that any political unrest in the Middle East is not holding back TNB from expanding its business into the region," said ECM Libra Capital Sdn Bhd in a research note today.

It was reported that TNB Repair and Maintenance Sdn Bhd (TNB Remaco) is aggressively expanding overseas to boost revenue. Its targeted revenue in 2015 is between RM600 million and RM700 million, up from RM500 million aimed for this year and RM335 million last year.

Of the RM600 million to RM700 million revenue, 30 per cent is expected to come from overseas, compared to the current 10 per cent.

TNB said it was in the process of selecting the right partner and would sign the agreement soon to operate and maintain an 84MW hydro-power plant in Laraib in Kashmir, Pakistan, which is a five plus five year contract.

ECM Libra has maintained a "hold" call on TNB. - Bernama

WASEONG - Wah Seong a 'buy' on better prospects

Stock Name: WASEONG
Company Name: WAH SEONG CORPORATION BHD
Research House: OSK

Wah Seong Corp was raised to “buy” from “neutral” at OSK Research Sdn Bhd, which cited improving earnings growth prospects at the Malaysian pipe-coating company.

The stock’s fair value was increased to RM2.60 from RM2.29, analyst Jason Yap wrote in a report today. -- Bloomberg

NHFATT - OSK Research maintains Buy on New Hoong Fatt, FV RM2.85

Stock Name: NHFATT
Company Name: NEW HOONG FATT HOLDINGS BHD
Research House: OSK

KUALA LUMPUR: OSK Research said New Hoong Fatt's'' 1QFY11 earnings were slightly weak, accounting for 20% of its full year forecast due to seasonality given the shorter number of working days.

It said on Friday, May 6 that margins were crimped by higher raw material cost but was somewhat cushioned by the higher income contribution from the sale of steel scrap at higher prices.

'While the gradual ban of imported used parts will commence with key critical items which New Hoong Fatt (NHF) does not have exposure to, we remain positive over the longer term as eventually the ban would also include body parts.

'We maintain our earnings forecast as we expect stronger quarters ahead. Our BUY call is maintained as with our FV of RM2.85, premised on 6x FY11 EPS. No dividend was announced,' it said.

DAIBOCI - CIMB Research keeps Daibochi TP at RM3.92, Outperform

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

KUALA LUMPUR: CIMB Equities Research said despite that Daibochi's 1Q11 results coming in at only 75% of its forecast, when annualised, the earnings met its and market expectations as earnings in the remaining quarters should be stronger.

It said on Friday, May 6 that also within expectations was the interim tax-exempt DPS of 3.0 sen. We maintain our EPS and DPS forecasts.

'Our target price is also unchanged at RM3.92, based on 10.2x CY12 P/E, a 30% discount to our 14.5x target market P/E. We maintain our OUTPERFORM recommendation,' it said.

CIMB Research said factors that could spark a re-rating include i) further margin recovery over the next few quarters, ii) major contracts secured from major non-F&B companies and, iii) attractive gross dividend yield of 8-9%. Daibochi remains its top pick in the packaging sector.

TOMYPAK - CIMB Research maintains Outperform on Tomypak, lowers TP to RM1.53

Stock Name: TOMYPAK
Company Name: TOMYPAK HOLDINGS BHD
Research House: CIMB

KUALA LUMPUR: CIMB Equities Research said'' Tomypak's annualised 1Q11 net profit was only 48% of its forecast, clearly below expectations as the company absorbed some cost increases, probably to avoid a volume backlash.

It said on Friday, May 6 that however, the 1.4 sen interim DPS was within expectations.

'We are slashing our FY11 EPS by 23% to reflect the margin squeeze while cutting FY12-13 by 2-7% as margins should recover by then.

'Our FY11 DPS forecast is cut by only 13% as we revise our payout ratio from 25% to 30%.

'We now value Tomypak at 6x CY12 P/E, a 40% discount to our 10.1x CY12 target P/E for Daibochi instead of 30%. Although our target price drops from RM1.80 to RM1.53, the stock remains OUTPERFORM as it offers a CY12 P/E of only 4x and 7-10% dividend yields. The main potential catalyst is a sharp fall in raw material prices.'

AIRASIA - HDBSVR maintains AirAsia fully valued at RM2.94

Stock Name: AIRASIA
Company Name: AIRASIA BHD
Research House: HWANGDBS

KUALA LUMPUR: Hwang DBS Vickers Research is maintaining AirAsia Fully Valued at the current price of RM2.94 which is pegged at 11 times FY11 earnings per share.

'We remain concerned about the airline given the current high oil prices could dampen travel demand and earnings. The recently declared 2.8sen net DPS for FY10 is unlikely to recur,' it said on Thursday, May 5.

HDBSVR said Thai AirAsia has better growth prospects than PT Indonesia AirAsia (IAA), due to a less competitive and regulated domestic market

However, high jet fuel prices will remain a challenge for both, the research house said, adding its 12-month target price is RM2.

GUANCHG - Guan Chong hits 4-day low at RM2.85

Stock Name: GUANCHG
Company Name: GUAN CHONG BHD
Research House: HWANGDBS

KUALA LUMPUR: GUAN CHONG BHD [] shares fell to a four-day low of RM2.85 in late afternoon on Wednesday, May 4 as investors took profit after the recent strong run-up its share price in recent weeks.

At 4.04pm, it was down 15 sen to RM2.85 with 366,800 shares done. The warrants fell eight sen to RM1.31.

Hwang DBS Vickers Research had recently initiated coverage with Buy call and RM3.60 target price.

'Our fair value is pegged to 10x target PE, using fully diluted FY12F EPS. This is a steep discount to DBS Vickers' 15 times FY11/12 PE accorded to Singapore-listed Petra Food, its nearest peer,' it said.

HDBSVR said Guan Chong was an under-researched counter.

'We like it because its market cap (RM941 millio) is poised to expand along with strong profit growth. Potential risks to earnings are a global economic collapse (leading to customers deferring deliveries as demand falls) and disruptions to cocoa bean supply,' it said.

To recap, Guan Chong manufactures and sells cocoa ingredients: cocoa butter (54% of FY10 revenue), cocoa powder/cake (43%) and cocoa liquor (3%). Exports were 92% of sales last year as it counts global chocolate manufacturers like MARS, Hershey's and Lotte as customers.

Since 1990, its capacity has increased from 6,000 tonnes per annum to'' 140,000 tonnes now to rank among the top 10 cocoa processors in the world.

'It is set to grow bigger when another 60,000 tonnes per annum at its new plant in Indonesia ' which has the advantage of buying zero-tariff local beans ' is fully completed by 2Q12,' it said.

QL - OSK maintains 'buy' call on QL Resources

Stock Name: QL
Company Name: QL RESOURCES BHD
Research House: OSK

OSK Research has reduced its 2011/12 forecast earnings for QL Resources by one per cent to 5.3 per cent, saying that heavy rainfall in Indonesia and the stake dilution of 40.5 per cent to 35 per cent in Boilermech had delayed the company from achieving its target fresh fruit bunch production volume in Vietnam.

The research house however raised its Future Value (FV) from RM3.51 to RM4, pegging at a higher price earnings (PE) of 19 times earnings per share in 2012, taking into account the potential catalyst from its venture into renewable energy and higher share liquidity post share placement exercise.

QL Resources is a regional integrated livestock farming player
and has diversified into the fisheries sector through the development of a marine-based manufacturing chain.

Meanwhile, OSK also said there have been reaffirmation that radiation from Japan's nuclear plant disaster would not reach Malaysia due to the distance.

This means, QL Resources fish caught in South East Asian waters is safe for consumption. OSK Research has maintained a "Buy" recommendation on QL Resources. -- Bernama