Highlights of the day
§
Kossan
Rubber Industries (Results Review): A solid
3QFY12 results (Maintain BUY, TP: RM4.66) [download
report]
9MFY12 net profit of RM74.8m (+11% y-o-y) was 66% and
71% of our and consensus full-year forecasts respectively. We consider the results to be within
expectation as we expect earnings to ramp up further from 4Q 2012 onwards
driven by new capacity expansion and the lower-than-expected raw material latex
price. We like Kossan because of: (i) its undemanding valuations. Kossan is
trading at 9x FY12 EPS compared to Top Glove’s 20x; (ii) The company is moving
up the value chain by offering higher margin surgical and clean room gloves;
and (iii) its product mix of less natural rubber glove which is sensitive to
movements in latex price. Maintain Buy and a target price of RM4.66 based on
11x FY13 EPS.
We attended WCT’s analyst briefing yesterday and remain convicted on the
company’s growth story. All three segments, i.e. construction, property
development and investment & management are primed for growth going
forward. We make no changes to our FY12–14F EPS for now. Reiterate our BUY call
on WCT with sum-of-parts target price of RM3.20.
Other reports
§ Lafarge Malayan Cement
(Results Review): 3QFY12: Moderate growth already priced in (Maintain HOLD, TP: RM9.36) [download
report]
§ Media Prima (Results
Review): 3QFY12: Within expectations (Maintain HOLD, TP: RM2.52) [download
report]
Other Malaysian news
§ AMMB Holdings: Acquisition of MBF Cards
approved
§ AirAsia: May add only one more hub
§ Malaysia Airports: To develop upscale factory
outlet in KLIA
§ Dialog: Expects hike in costs for Bayan oilfield redevelopment
§ Guinness Anchor: May raise prices in next 12
months
§ Iris Corp: Clinches RM39.5m Felda contract
§ Zelan: RM771m project runs into trouble
§ Gadang Holdings: Eyes RM500m jobs
§ Oil & Gas: Johor Port
§
Oil & Gas: Petronas reveals successful gas production
from Berantai field
§ Economy: Malaysia
Global news
§ Europe : Services, manufacturing contract for 10th
month
§ Europe : EU Summit risks budget deadlock as Cameron
pushes for more cuts
§ Europe: Spain
§ China
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