News bits | 26 April 2012

Highlights of the day

§  Parkson Holdings (Company Update): Guardian of departmental stores (Downgrade to HOLD, TP: RM5.28) [download report]

Parkson Holdings is the guardian of departmental stores in the emerging markets via stakes in both Parkson Retail Asia and Parkson Retail Group.  In tandem with the lower-than-expected economic growth in China, Malaysia and Indonesia, we forecast lower y-o-y same-store-sales (SSS) growth.  Based on our earnings forecast, the stock is trading at 14.5x FY12 and 13.1x FY13 EPS which appears fully-valued compared to an average net profit growth of 12% pa over the next two years. Downgrade to Hold with TP RM5.28 based on sum-of-parts implying 14.6x FY12 PER.

§  Building Materials (Sector Update): Riding on the construction boom (Maintain OVERWEIGHT) [download report]

The local building materials sector, particularly steel and cement, is expected to undergo an upward re-rating due to the huge multiplier effect from the Malaysian construction industry, which is gaining traction on the back of the accelerated implementation of various infrastructure and property projects, both from the public and private sector. Maintain OVERWEIGHT.

Other reports

§  Newz Bits [download report]

Other Malaysian news

§  DiGi.Com: 1Q net profit dips 3.2% y-o-y to RM320.6m

§  SP Setia: Plans rail hub in KL Eco City

§  Mudajaya: Clarifies on coal worries

§  TH Plantation: Eyes 20,000ha land in Sarawak, East Kalimantan

§  SEG International: Navis makes cash offer for Segi with Hii

§  KUB: Has no plans to sell A&W

§  Ramunia: May bag fabrication contract

§  Scomi Engineering: Eyes RM2.5bn job in Brazil

§  Ingress: Honda’s RM27m contract for Ingress

§  IPO: Felda to go ahead with IPO without cooperative

§  Property: Iskandar Investment in tie-up

Global news

§  US: Bernanke says Fed may name officials making rate forecasts

§  US: Fed officials reduce 2012 unemployment forecast to 7.8-8.0%

§  US: Drop in durables orders masks investment gain

§  Europe: Draghi softens tone on inflation, calls for growth compact

§  Europe: UK succumbs to first double-dip recession since 1970s

§  India: Investment grade rating at risk as S&P cuts outlook

§  South Korea: 1Q GDP 0.9% q-o-q, 2.8% y-o-y

§  Global: Global food prices on the rise

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