Axiata Berhad (HOLD)
Celcom Diversifying into Broadcasting
'''' StarBiz reported that Broadcast Australia will ink an exclusive deal on Monday to be Celcom Axiata Bhd's technical partner ahead of a bid for the much awaited RM2b digital terrestrial television broadcasting (DTTB) project.
'''' Broadcast Australia is an infrastructure network operator for broadcasters and telecommunications providers in Australia.
'''' Those that are keen include Maxis Bhd, whose technical partner is Astro; KUB Malaysia Bhd in partnership with Germany's Media Broadcast Systems; and YTL Communications SB with US-based Sezmi and American technical consultant Peter Douglas. Parties like Comintel SB, I-Media Broadcasting Solutions SB, Ikatan Maya SB and Apex Communications SB are also interested in the project but yet to announce who their technical partners are.
'''' Comments: We view this diversification positively as telcos are exploring new revenue stream to sustain growth as voice revenue is declining and data business does not reward lucrative margin as voice.
'''' By leveraging on its existing radio sites, Celcom would achieve greater economy of scale by deploying DTTB transceivers.
'''' We reiterate our HOLD call with unchanged target price of RM4.92.
''
SP Setia (HOLD)
FY11 results in-line
'''' FY11 net profit rose 30.2% yoy to RM322m, in-line with HLIB estimates but ahead of consensus by 10.9%.
'''' 9 sen gross dividend was declared for 4Q.
'''' FY11 sales came in at RM3.3bn, thanks to extremely strong sales of RM800m in Sep-Oct alone.'' This eclipses the previous record set in FY10 of RM2.3bn.'' Management has set an ambitious new sales target of RM4.0bn for FY12.
'''' Management revealed that they have reached a 3-year management agreement with PNB, pending SC approval and with details to be disclosed in the amended offer document.
'''' Going forward, SP Setia is planning more overseas projects, and we believe the next new overseas project is likely to be in London.
'''' Rolling over our numbers, we raise our FY12-13 earnings forecast by 11-12%, supported by RM2.8bn of unbilled sales (1.9x FY10 property revenue).
'''' Maintain HOLD and target price of RM3.90, which is the offer price.
''
Performance of IPI (Oct 2011)
'''' IPI grew by 2.8% yoy in Oct (Sep:'' +3.0% yoy), higher than the consensus estimate of +1.6%,on the back of softening of manufacturing and electricity output growth (+6.2% yoy and +1.9% respectively; Sep: +8.9% yoy and 6.4% yoy respectively).
'''' E&E output declined (-1.2% yoy; Sep: +3.4%) driven by weakness in all product segments. The pick-up of E&E output in September is now confirmed as a temporary spike rather than a change in trend.
'''' Mining output contraction was halved (-5.7% yoy; Sep:'''' -12.0% yoy), but latest Petronas guidance indicated recovery only from mid-2012 onwards.
'''' We maintain full year 2011 GDP forecast at 5.1% (4Qf: +5.0%). We expect GDP growth to remain stable at 4.5% in 2012 as bunching of construction projects cushioning softer manufacturing performance.
'''' We expect BNM to hold the OPR steady at 3.00% until end-2012 given resilient economic growth with sticky inflation.
''
KLCI: Wild swings ahead''
'''' With the overnight plunge in Dow and pending the outcome form the EU summit tonight, regional bourses and Bursa Malaysia are expected to experience another day of selldown today.''
'''' Technical indicators have weakened and if the crucial supports of mid Bollinger band (1465) and 50% FR (1454) are broken today, the KLCI is expected to fall further towards 50-d SMA (1445) and the Nov 23's low of 1423. Immediate resistance remains at 200-d SMA (1503).
KURASIA: Poised for a triangle breakout
'''' After hitting 52-wk high of RM0.58, KURASIA prices were consolidating within the RM0.42 (9 Aug) and RM0.535 (3 Nov) band before closing at RM0.495 yesterday.
'''' As long as prices stay above the RM0.46 level (uptrend line support and lower Bollinger band), we will continue to stick with the bull's camp. Once the immediate uptrend line resistance of RM0.52 is taken out, prices should re-rate towards RM0.59 (38.2% FR) and RM0.67 (23.6% FR). Strong supports are near RM0.42-0.46. Cut loss below RM0.42.
