Highlights of the day
§
Lafarge
Malayan Cement (Company Update): HOLD your
excitement! (Downgrade to HOLD, TP: RM9.36) [download
report]
We see limited upside for the stock considering its
rich valuation. In view of the possible increase in dividends, we have, for
illustration purposes, developed an alternate valuation model based on the
dividend discount model (DDM) to supplement our PE-derived valuation model.
Even in the event of a hike in DPR, the stock’s current valuation is still
high. We maintain our FY12-13F EPS of 44.3 sen and 52.0 sen respectively.
Pegging against a FY13F PE of 18x, we are keeping our target price unchanged at
RM9.36. Downgrade to HOLD as the stock price has exceeded our target price of
RM9.36 and our DDM- (+special dividend) derived fair value of RM8.95.
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Plantation
October MPOB statistics continued to show an inventory build-up. It went
above the 2.5m MT level despite some letdown in production from a month ago.
Production continued to recover on y-o-y basis. Export figures were down by 3%
y-o-y on YTD basis. Judging from the production recovery by sluggish demand in
terms of exports, inventory is likely to increase further in the near future.
SOI readings appeared neutral. Maintain NEUTRAL..
Other reports
Other Malaysian news
§ MMC: Unit wins RM918m project
§ SP Setia: Keen to expand in Australia
§ TH Plantations: To allocate RM725m for capex
§ KNM: Raises RM195.5m from its rights issue
§ Latexx Partners: Semperit gets greenlight
from Austrian and German authorities
§
REDtone International: Wins RM82.5m jobs in Sabah
§
Ireka Corp: Gets letter for RM65m MRT subcontract
§
O&G: Petronas may add more independent directors on
Progress board
Global news
§ US
§ Europe: Europe spurs Greek financing doubt after
budget-target delay
§ Europe : Basel bank-law accord moves closer as EU
drafts compromises
§ China
§ Japan
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