Highlights
of the day
§
Top Glove
Corporation (Results Review): 2H to be lower than 1H,
valuation rich (Maintain SELL, TP: RM4.00) [download report]
1HFY12 net profit of RM84.9m (+38% y-o-y) was above expectations at 55-63% of house and consensus full year estimates. The variance from our forecast was due to lower-than-expected natural latex price. However, we are keeping our earnings forecasts unchanged as we anticipate lower 2H earnings due to higher-than-expected input natural latex price which could potentially lead to lower-than-expected sales. YTD feedstock natural latex price has risen 22% to RM7.79/kg. Over the medium term, latex prices may remain high due to the Thai government’s intervention to support rubber prices, coupled with the wintering season (Feb-May 2012). Top Glove is trading at 23x FY12 EPS (28% above its historical average of 18x) vis-à-vis 13% average earnings growth in FY12-14 which implies a rich PE. Maintain Sell with TP of RM4.00 based on 18x CY12 EPS, in line with its historical average.
Other Malaysian news
§ Maxis: Terminates deal with Silver Bird
§
Sunway
REIT:
SC okays RM1.6bn debt
papers
§
Eversendai: Targets RM2bn by
2016
§
Kinsteel: Streamlines downstream
business
§
Selangor Dredging:
Buys Gombak land for RM35m
§
Zelan: Bags 25-year Gombak terminal concession
§
Deleum:
Proposes 1-for-2 bonus
issue
§
EPMB: Takes over Maju Expressway
Global news
§ US: Labor-market gains
§
US:
Philadelphia-area factory index
increases to an 11-month high
§
US:
Wholesale Prices increase by most
in five months
§
US:
International demand for US assets
rose in January
§
US,
South Korea: Free trade starts as Seoul
opponents vow repeal
§
Europe:
Payrolls shrank in 4Q on Spain,
Portugal
§
China:
Foreign direct investment falls
for fourth month
§
India:
Reserve Bank of India holds rate
for third meeting as inflation accelerates
§
Singapore:
Retail sales unexpectedly rise on
food purchases
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