BENALEC
RM0.59 - The share price has fallen c30% over the last 2 months. This
translates to attractive multiples of 8.9x & 7.7x for FY6/15 & 16 ( vs
mid cap construction industry PER average of 10-13x). The group recently
disposed off 9 pieces of land in Malacca amounting to 58.6 acres for cash
consideration of RM107m. The sale will help provide earnings visibility for at
least the next 2 years. Group still has about 341 acres of land in Malacca and
Pulau Indah which are held for sale, which could be worth cRM595m. Benalec’s
near term earnings visibility has improved, but key re-rating catalyst remains
it’s Johor project and the signing of the SPA with 1MY Strategic Terminal Oil
for 1000 acres of land in Tanjung Piai. A detailed EIA has been submitted to the
Dept of Environment. MACD has just cut up with RSI @ 35 - Trading Buy ( TP
RM0.78 based on 10x FY16). (AK)
MAYBULK RM1.14 - Following the
poor Q3 results, the share price has eased c20% . Group is now trading at P/Bk
of 0.63x ( vs 4 year historical average of 1.3x), translating to a PER of 16x
for FY12/15. At current levels, we reckon most of the negatives have been
reflected in the price. Earnings risks such as lower anticipated dry bulk charter
rates and lower contribution from its 20% SGX-listed associate, POSH Group,
have been more than reflected in price. Ahead, the weaker Ringgit against the
US Dollar and lower bunker fuel prices could lend support to Maybulk’s
earnings. The Seaborne Chinese iron ore imports are projected to rise, mainly
driven by strong expansion of Australian iron ore production capacity, will
also auger well for demand of Maybulk’s vessels. POSH’s headwind in it’s
Mexican JV due to non payment by clients, is also being managed. Technically,
MACD has just cut upwards with RSI @ 38 - Opportunity
to accumulate. (AK)
