Newz Bits 230212

Highlights of the day

§         Lafarge Malayan Cement (4QFY11 Results): Beat expectations (Upgrade to BUY, TP: RM7.97) [download report]

Lafarge’s FY11 result was commendable, beating both house and consensus full year estimates, mainly due to increased orders for cement, aggregate and concrete products coupled with better plant efficiency. A 10 sen interim single-tier dividend was declared for 4QFY11. We upgrade our FY12-FY13 EPS estimates to factor in potential margin expansion from cement demand pick-up as execution of domestic infrastructure construction projects gathers momentum, especially the Sungai Buloh – Kajang MRT civil works to be implemented from 2QFY12 onwards. After YTL Cement is delisted by end-Feb 2012, we expect investors to switch to Lafarge, as an indirect play on domestic construction.

§         MISC (4QFY11 Results): A watershed year, but longer term catalyst is in LNG (Maintain HOLD, TP: RM5.73) [download report]

MISC recorded a net loss of RM1.8bn for 12MFY11 largely due to vessels impairment provisions and a one-off disengagement costs to exit the liner business. Excluding (i) impairment provisions of RM750m; (ii) disengagement costs of liner (RM1,452.7m); (iii) gains from vessels divestment (RM114m); and (iv) gain from disposal of MMHE Engineering (RM36.4m), 12MFY11 net profit came in below expectations at RM335.5m (-73% y-o-y)--81% of our full-year forecast. Market consensus forecasted a net loss of RM466m in FY11. The variance from our results was mainly due to higher-than-expected bunker cost.  However, we maintain our FY12F earnings backed by LNG, oil & gas, and offshore and narrower losses at both chemical and liner divisions. We maintain HOLD with a RM5.73 target price based on 1.2x P/BV (multiple is below its historical average).

Other reports

§         Newz Bits [download report]

§         Kuala Lumpur Kepong (1QFY12 Results): Within expectations (Maintain HOLD, TP: RM24.59) [download report]

§         IJM Corporation (3QFY12 Results): On track for a strong finish (Maintain BUY, TP: RM7.02) [download report]

§         Economics (CPI): January 2012: The slowest inflation since a year ago [download report]

Other Malaysian news

§         WCT:  Unit secures RM331m construction deal  

§         CIMB Group: Bank CIMB Niaga 2011 profit jumps 25%

§         HeiTech Padu: Wins 20m project in UAE

§         Felda Global Ventures: To list without KPF, says Isa

§         Power: Ananda Krishnan mulls disposal of power portfolio

§         Power: Renewal of power pacts on

§         Property: Building on foreign interest in properties

Global news

§         US: Distressed properties help boost home sales

§         US: Construction jobs rebound amid home remodeling pick-up

§         US: MBA Mortgage Applications Index decreased 4.5% last week

§         Europe: BOE splits as Posen, Miles push for larger stimulus increase

§         Europe: Manufacturing, services unexpectedly contract

§         China: Manufacturing data show risk of deeper slowdown

§         Taiwan: 2012 GDP forecast cut as growth slows on exports

Visit ECM Libra at https://www.ecmlibra.com/ecmlsmy

Our on-line trading portal at www.ecmmoney.com

Morning Commentary 300112

Good morning,

1) Lingui/Glenealy: Samling Strategic Corp SB (SSC) is proposing to privatize unit Samling Global Ltd (SGL) and in turn to privatize Lingui Developments Bhd and associate company Glenealy Plantations (M) Bhd. Lingui & Gleanealy, in separate statements to Bursa, said that the privatization exercise would be conditional, among other things, upon the approval of the independent shareholders of SGL. SSC has indicated that it expects to propose an offer price of RM1.63 per share in respect of the Lingui privatization and RM7.50 per share in respect of the Gleanealy privatization. It also said that the offer prices were indicative only, was non-binding and may be subject to variation. Lingui & Gleanealy are controlled by the diversified Miri-based Samling Group headed by TS Yaw Teck Seng. Trading in shares of Lingui & Gleanealy has been suspended since Jan 20 at the companies' request (at RM1.36 & RM6.55 respectively ); +ve if true, with offer at premiums of 20% & 14% over last traded prices.

2) IJM/AZRB: Both IJM & AZRB have said they are awaiting a formal LOA from MRT Corp for 2 elevated packages of the MRT Sungai Buloh-Kajang line. In a statement to Bursa, IJM said it's subsidiary IJM Construction SB had last December submitted a tender for the project & would make an announcement upon receipt of the LOA. AZRB made a similar disclosure to the exchange. The announcements were made in response to a statement from MRT Corp last Thursday that the 2 parties had been appointed the main contractors for package V5 & V6 respectively of the MRT construction works worth RM974m & RM764m; +ve. Packages V5 & V6 are among the 8 elevated packages to be awarded in 2012. The award should pave the way for more active newsflow on projects in the 1st half of the year.

3) Tebrau: Danga Bay SB (DBSB), the master developer of the Danga Bay waterfront projects in Johor, is to be injected into Tebrau Teguh Bhd, say sources. The exercise will transform Tebrau Teguh, which is majority owned by Johor State investment arm Kumpulan Prasarana Rakyat Johor (KPRJ), into the biggest owner & developer of the sea-fronting projects. It is said that the majority owner of DBSB, Datuk Lim Kang Hoo, will drive the development. The transaction is said to be satisfied via the issuance of new shares in Tebrau Teguh to Lim. KPRJ will still be the largest shareholder and Lim, the second largest; +ve if true. If the deal goes through, Tebrau will become a serious contender in the development of Iskandar Malaysia, competing with GLC, UEM Land. Counter suspended today.

4) Mkt: mixed trading with lower liners outperforming on privatization and M&A stories.

Newz Bits 270112

Highlights of the day

§         IJM Corp (Quick Bits): IJM's first win for CY12 (Maintain BUY, TP: RM7.02) [download report]

The Business Times reported that IJM Corp was appointed as the main contractor for the elevated V5 package from Taman Maluri to Plaza Phoenix station of Sungai Buloh – Kajang Mass Rapid Transit (MRT) project worth RM974.0m. This, together with the imminent award of the c.RM7.1bn West Coast Expressway (IJM’s effective share at c.RM4bn) in 2QCY12, is expected to double its outstanding orderbook to RM8.8bn. Maintain BUY.

Other reports

§         Newz Bits [download report]

Other Malaysian news

§         IJM Corp, Ahmad Zaki Resources: Win RM1.74bn MRT jobs

§         Kumpulan Europlus: To build RM7bn West Coast Highway

§         AirAsia: Acts on fare disclosure

§         AirAsia: Plans aircraft transfer to associates

§         MAHB: Eyes opportunities in China, Indonesia

§         Lafarge: Shares change hands in internal restructuring

§         MAS: Exploring JV with Qantas to set up a KL-based premium airline

§         QSR, KFC: Set to call for EGM

§         Alam Maritim: Bags RM115m engineering job

§         Automotive: Tighter financing

§         Consumer: Malaysia raises sugar subsidies as election draws near

§         Telecommunications: U Mobile inks deal with Ericsson

Global news

§         US: First-time jobless claims increase, displaying seasonal volatility

§         US: Durable goods data points to economic momentum

§         US: Sales of new homes unexpectedly decline in December

§         US: Index of leading economic indicators rises for third month

§         Singapore: Production rebounds on surge in pharmaceutical output

Visit ECM Libra at https://www.ecmlibra.com/ecmlsmy

Our on-line trading portal at www.ecmmoney.com