Newz Bits 130212

Highlights of the day

§         Gamuda (Company Update): PDP done deal, what next? (SELL; TP: RM3.51) [download report]

Gamuda-MMC JV has formalised its PDP agreement for the Klang Valley MRT - Sungai Buloh – Kajang line project with the Government of Malaysia via MRT Co, entitling it to a 6% fee of the aggregate value of all 90 works contracts to be awarded, provided that the PDP delivers the project as a fully functional railway system within the stipulated target cost and completion deadline. However, our analysis shows that factoring in all the positive newsflow on Gamuda-MMC being the frontrunner for the c.RM8bn tunneling portion and Gamuda possibly clinching a JV role in the c.RM7-8bn Southern double tracking project raises our sum-of-parts RNAV of RM2.94 previously  to only RM3.51, which poses 8.8% downside from the current price. Maintain SELL.

§         Axiata (Company Update): Data to drive earnings (Downgrade from BUY to HOLD TP: RM5.20) [download report]

We came away from a visit to Axiata feeling optimistic about the group’s long term prospects in view of the robust data growth, particularly in its subsidiaries Celcom and XL Axiata (XL). We view the revocation of Idea’s 13 licences to marginally impact Axiata at this juncture. However, we are reducing our EPS forecasts by 14% and our target price from RM5.76 to RM5.20, due to lower EBITDA margin assumptions in both Celcom and XL and applying a higher WACC on XL. Downgrade from BUY to HOLD.

Other reports

§         Plantation (Sector Update): Stocks levels continue to disappoint (Maintain NEUTRAL) [download report]

§         Newz Bits [download report]

Other Malaysian news

§         IOI: Mulls re-listing of property arm

§         SP Setia: SC decision of joint offerors’ revised offer still pending

§         MAS: Appoints AirAsia’s Rozman Omas as CFO

§         Alam Maritim: Hopeful to return to black

§         London Biscuits: To raise RM29.3m from new share placement

§         Banking: Bank Islam eyes stake in Indonesian bank

§         Construction: Prasarana to pick Dang Wangi project partner

§         Construction: MRT Corp says still over 80 job packages up for tender

§         Property: Slower high-end property sector

§         Technology: Sluggish demand for PCB seen in Q1

Global news

§         US: Budget gap narrowed to US$27.4bn in January 2012

§         US: Consumer sentiment falls more than forecast

§         Europe: Greek parliament passes austerity bill as rioters burn buildings

§         China: Exports, imports slump more than forecast, new loans slows

§         China: January lending grew less than estimated amid holiday

§         India: Factory output misses estimate amid economic slowdown

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