Highlights of the day
§ Lafarge Malayan Cement (4QFY11 Results): Beat expectations (Upgrade to BUY, TP: RM7.97) [download report]
Lafarge’s FY11 result was commendable, beating both house and consensus full year estimates, mainly due to increased orders for cement, aggregate and concrete products coupled with better plant efficiency. A 10 sen interim single-tier dividend was declared for 4QFY11. We upgrade our FY12-FY13 EPS estimates to factor in potential margin expansion from cement demand pick-up as execution of domestic infrastructure construction projects gathers momentum, especially the Sungai Buloh – Kajang MRT civil works to be implemented from 2QFY12 onwards. After YTL Cement is delisted by end-Feb 2012, we expect investors to switch to Lafarge, as an indirect play on domestic construction.
§ MISC (4QFY11 Results): A watershed year, but longer term catalyst is in LNG (Maintain HOLD, TP: RM5.73) [download report]
MISC recorded a net loss of RM1.8bn for 12MFY11 largely due to vessels impairment provisions and a one-off disengagement costs to exit the liner business. Excluding (i) impairment provisions of RM750m; (ii) disengagement costs of liner (RM1,452.7m); (iii) gains from vessels divestment (RM114m); and (iv) gain from disposal of MMHE Engineering (RM36.4m), 12MFY11 net profit came in below expectations at RM335.5m (-73% y-o-y)--81% of our full-year forecast. Market consensus forecasted a net loss of RM466m in FY11. The variance from our results was mainly due to higher-than-expected bunker cost. However, we maintain our FY12F earnings backed by LNG, oil & gas, and offshore and narrower losses at both chemical and liner divisions. We maintain HOLD with a RM5.73 target price based on 1.2x P/BV (multiple is below its historical average).
Other reports
§ Newz Bits [download report]
§ Kuala Lumpur Kepong (1QFY12 Results): Within expectations (Maintain HOLD, TP: RM24.59) [download report]
§ IJM Corporation (3QFY12 Results): On track for a strong finish (Maintain BUY, TP: RM7.02) [download report]
§ Economics (CPI): January 2012: The slowest inflation since a year ago [download report]
Other Malaysian news
§ WCT: Unit secures RM331m construction deal
§ CIMB Group: Bank CIMB Niaga 2011 profit jumps 25%
§ HeiTech Padu: Wins 20m project in UAE
§ Felda Global Ventures: To list without KPF, says Isa
§ Power: Ananda Krishnan mulls disposal of power portfolio
§ Power: Renewal of power pacts on
§ Property: Building on foreign interest in properties
Global news
§ US: Distressed properties help boost home sales
§ US: Construction jobs rebound amid home remodeling pick-up
§ US: MBA Mortgage Applications Index decreased 4.5% last week
§ Europe : BOE splits as Posen, Miles push for larger stimulus increase
§ Europe : Manufacturing, services unexpectedly contract
§ China
§ Taiwan
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