MORNING CALL 15 March 2012
FLOWS;
BUYS: Maybank, Maxis, BAB
SELLS: MISC, Djacor, Sime
Technical Stock Alert;
KEURO (RM1.22) – Share price remains depressed at around the RM1.24 levels on fears of a delay and changes to the concession agreement for the West Coast Highway. The recent announcement by IJM to acquire a 20% stake in West Coast Highway S/B with KEuro holding 80% has helped renew confidence in the implementation of this concession as the inclusion of IJM should help the consortium financial close. MACD has turned marginally negative with RSI at 44 levels. Buy for a bounce back target of RM1.40.
Stock of the Day –Visit Note
BOUSTEAD (RM5.45)
BOUSTEAD (RM5.45)
-Plantations; Completion of sale of Indonesian plantation venture totaling 17,000 ha in Sumatera to be completed in late April/ May. Proceeds of USD40m to be used for working capital. Existing 84,000 ha plantations in Malaysia with no plans to expand. Target higher yields (30 tn/ha) via higher crop density, better seedlings, more efficient harvesting. Sold forward 25% of crops at RM3200/tn and expect this price to be maintained for the year.
-Financial; Cleaner loan book with impaired loans ratio down to 2.8%. Healthy RWCR at 12.8% and will be able to comply with expected introduction of Basel 3 in 2013 without further capital raising. Plans to leverage on relationship with Affin’s substantial shareholder, Bank of East Asia who hold’s 23.5% through the sale of Islamic products through BEA’s vast network in China.
-Property; Mutiara Rini Johor where they have an existing land bank of 900 acres, achieved a new record for unit sale at RM300,000. Benefitting from the spillover effect of the Iskandar region whom they are adjacent to. Looking to acquire a further 300 acres in the area.
Mutiara Damansara; Remaining 12 acres of land with a book value of RM220/sq ft vs current market of RM600/sq ft. Curve continues to achive 100% tenancy, e@Curve 90% tenanted and new launch of Curve NX.
Expecting news on award of Jalan Cochrane 24 ha government land to LTAT soon. Plans are already in place for IKEA to anchor the property with indicative take up interest for 70% of the planned commercial lots
Group GDV looking at RM8-9bn.
-Pharmaceutical; Full year contribution from Pharmaniaga this FY. Currently meeting 60% of government needs of drugs to hospital but targets 80%. Expanding into herbal and halal segments and exploring overseas markets in Indonesia and Vietnam. Currently still hold 82-83% in Pharmaniaga and looking to place out balance within the next two months to meet KLSE shareholding spread of 25% in order to be relisted.
-Heavy Industry; Expect a recovery in earnings after a weak set of results last year brought about partially by cost escalation on first batch of patrol vessels and unhonoured orders of vessels which has resulted in the company owning 3 ships. New contract to build 6 2nd generation Patrol Vessels for RM9bn has bolstered order book to RM10.5bn. Looking at recovery in earnings this year with a margin of 15%. Ie PBT of around RM150m vs RM1.3m in FY2011.
-Looking to reduce current gearing of 1.14x but also to maintain dividend payout ratio of 70%.
