Highlights of the day
§
WCT
(Company Update): Yet
another mixed development in the pipeline (Maintain Buy, TP: RM3.20) [download
report]
WCT’s indirect wholly-owned subsidiary, WCT Hartanah
Jaya Sdn Bhd, has acquired a 12.38-acre parcel of freehold commercial land
situated along Jalan Skudai, Johor Bahru from Idaman Usahamas Sdn Bhd, a
wholly-owned subsidiary of Malaysia Building Society Bhd, for RM180m (RM334
psf). WCT intends to undertake a mixed development with estimated c.RM900m GDV
on the land, carrying its in-house Paradigm and Premiere brands. As no details
on the exact residential/commercial GDV breakdown, timeline for future launches
of service apartments and rental charges for the retail mall have been
disclosed yet, we do not factor any contribution from this project to our
sum-of-parts (SOP) equity valuation. We also leave our FY12 – FY14 EPS
estimates unchanged as the development is expected to impact WCT’s bottomline
from FY15 onwards, when the shopping mall is operational. Reiterate our BUY
call on WCT with SOP target price of RM3.20. (refer to
report for details)
§
Kossan
Rubber Industries (Results Review): 2H
expected to be better than 1H (Maintain Buy, TP: RM4.66) [download
report]
1HFY12 net profit of RM45.6m (+4% y-o-y) was 40-43% of
our and consensus full-year forecasts. We consider the results to be within
expectation as we expect 2H results to be better than 1H driven by new capacity
expansion and a product mix which focuses more on nitrile. We like Kossan
because of: (i) its undemanding valuations. Kossan is trading at 9x FY12 EPS
compared to Top Glove’s 20x; (ii) The company is moving up the value chain by
offering higher margin surgical and clean room gloves; and (iii) its product
mix of less natural rubber glove which is sensitive to movements in latex
price. Maintain Buy but raised TP by 16% from RM4.02 to RM4.66 as we roll
forward our 12-month TP valuation from 11x FY12 EPS to 11x FY13 EPS. (refer to report for details)
Other reports
Other Malaysian news
§ Oil
& Gas: Bumi Armada, M3Nergy
shortlisted
§ FGVH: To buy
150,000ha estate land over 5 years
§ AFG:
Still in the game
§ MAHB: Pan Pacific KLIA undergoes
RM56m upgrade
§ Scomi
Group: Unit wins 130m job
§ Banking: Abu Dhabi bank eyes Malaysian and Arab businesses
§ Consumer:
Status quo hope for sin taxes
§ Property:
Actual sale of residential properties
declining
Global news
§
US: Jobless
claims in climb while confidence sours
§
US
§
Europe : Euro-area
services, manufacturing contract for seventh month
§
China
§
Taiwan
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