FBMKLCI
1842.78 +3.23pts (+0.18%)
Volume 1.876b Value 2.152b
1) The KLCI
shrugged off the mixed US market overnight closing in the green for the 6th day despite the U.S Fed's decision to
discontinue the QE stimulus. In the regional market, bourses were generally
stronger following the SHCOMP +0.76% that hit the highest level in a year after
the Chinese's regulator revealed intentions to promote & support
consumption in 6 sectors (e-commerce, new energy, housing, tourism, education &
sports), NIKKEI+0.67% and ASX +0.52% also gained amidst the better broad
sentiments, HSI lagged behind closing -0.49% below. In the local market, most
of the sectors closed in the green as the TECHNOLOGY +2.05% index led the pack
boosted by DNEX +29.82%, MPI+3.43%, GTRONIC +2.83% . Market breadth was
positive today as gainers outpaced losers by 509 : 339. Futures closed at 1843
(parity).
2) Heavyweights : CIMB +1.08% RM6.50, TM +2.12% RM7.20, GENTING +1.15%
MR9.66, DIGI +1.00% RM6.02, PPB +2.09% RM15.62, SIME +0.63% RM9.56, FGV +2.80%
RM3.67, KLK -1.96% RM22.98.
3) DBT : XINGHE 24mil @ RM0.115 (1.02% PUC), NIHSIN 22mil
@ RM0.52 (9.29% PUC), GRANFLO 3.4mil @ RM0.295, EKOVEST 3mil @ 1.10
4) Situational:-
GKENT +0.67%
RM1.49 - George Kent Bhd has received a letter of award from Ministry of Health
(MOH) to design and build the second phase of Kuala Lipis Hospital for RM57.0m.
The project is to be completed over 30 months and is due for completion in
April 2017. George Kent said that this is in line with the group’s long-term
strategy to actively bid for current and upcoming infrastructure and
engineering related project. Lipis II is the second MOH project that is awarded
to George Kent and is an extension of
the first phase that was successfully completed in 2012, a project worth
RM97.8m.
5) PRESS METAL
3Q’14
Turnover+29.5% RM1,028.7m Net RM82.6m vs Net Loss RM1.6m LY EPS 15.68
sen
9 Mths Turnover+26.4% RM2,926.0m Net +291% RM170.7m EPS 32.53 sen
In line with cons(f) RM252.7m
The Group registered higher revenue of RM1,028.7 million
in Q3 2014 as compared to RM794.5 million in Q3 2013. Revenue increased by
RM234.2 million or 29.5% mainly due to the following:-
(i) Higher metal selling price, both aluminium price
quoted in the London Metal Exchange (LME) as well as the premium which has been
trending upwards;
(ii) Higher production output by the Bintulu Smelting
Plant which has achieved full production capacity in Q4 2013 and the Mukah
Smelting Plant which was shut down in July 2013 due to power outage but resumed
full operations in April 2014.
The Group recorded a net profit of RM82.6 million in Q3
2014 as opposed to a net loss of RM1.6 million in Q3 2013. Major contributing
factors to the significant increase in profit were:-
(i) Improved metal selling price and higher production
output by both Bintulu and Mukah Smelting Plants as explained above;
(ii) Non-recurrence of a loss on disposal of Hubei Press
Metal Huasheng Aluminium & Electric Co. Ltd.’s assets amounting to RM51.6
million incurred in Q3 2013.
Q3 2014 vs Q2 2014
PBT of RM116.3 million for Q3 2014 was also higher than
the preceding quarter of RM83.6 million. Increase in PBT was mainly due to
higher metal selling price as mentioned in above.
With expectations of continued favourable aluminium
prices due to the increase usage in the auto industry & expectations of
improvement in global growth, coupled with an attractive forward PER of 11.6x,
we maintain our outperform call on the stock.
6) Market: is expected to be steadier to higher tomorrow
supported by month-end closing activities. KLCI index’s immediate resistance
will come in around the 1847/50 levels.
