Highlights of the day
§
Top
Glove Corp (Results Review): Solid
result but strong headwinds ahead (Maintain SELL, TP: RM4.62) [download
report]
12M FY Aug 12 reported net profit of RM202m (+78%
y-o-y) came in within consensus expectation but above ours. The variance from
our forecast was due to higher-than-expected sales volume and
lower-than-expected raw material cost. We maintain our FY13 and FY14 earnings
forecasts as we assume a slower-than-expected volume sales and headwinds
emanating from higher production costs. The shift in demand to nitrile gloves
over the last two years has also led to a glut and potential price war in the
latex glove segment. Furthermore, Top
Glove is facing higher production costs from the minimum wage policy to be
effective Jan 1, 2013 and higher natural gas prices. The stock is trading at 20x FY13 EPS compared
to historical average of 18x. Maintain
SELL with a target price of RM4.62 based on CY13 EPS of 25.7 sen. (refer to report for
details)
§
Economics
(Industrial Production Index): August
2012: Production slips as manufacturing and exports decline [download
report]
August industrial production index slipped by 0.7% y-o-y as
manufacturing declined. The fall coincided with 4.5% Malaysian export decline
in the same month as well as the wider drop in Asian exports and production.
The good news is data from South Korea
and Taiwan Malaysia
Other reports
Other Malaysian news
§
MISC: No gain or losses from stake sale
§ AMMB:
To run Kurnia and AmG under single licence
§
Astro: Grants
near 22 million share options
§
AirAsia: Exercises
options to buy into Tune Insurance’s parent
§ AirAsia:
May revisit London , Paris
§
KFCH, QSR: EGM dates set on disposal
§ OSK:
Unit gets Indonesia
§
Alam Maritim: Bags
RM69m contract
§
O&G: Petronas
warns of high oil royalty
§
Insurance: AIA to ride on ING’s strength in bancassurance
Global news
§ US: Jobless
claims fall on revision difficulty
§ US: Trade
deficit widened in August as exports dropped
§ Europe : EU said to weigh delaying Basel bank rules
for up to a year
§ Europe: Spain
§ China
§ Japan
§ South
Korea: Bank of Korea
matches Brazil
Our on-line
trading portal at www.ecmmoney.com
