News Bits | 31 Oct 2012

Reports

§  Newz Bits [download report]

 

Malaysian news

§  IOI Corp: Xiamen project to start contributing in FY15

§  Aeon Malaysia: Not involved in Carrefour deal

§  IGB: Bags RM8bn job in Taipei

§  Tan Chong: Targets 50,000 cars for 2012

§  Latexx:  Gek Seng buys 9.8% of company

§  O&G: Petronas, Lundin Oil find new oilfields in Pahang

§  O&G: RM2.4bn boost for Labuan 

 

Global news

§  US: Home prices in 20 cities rise by most in two years

§  Europe: October economic sentiment falls to three-year low

§  Europe: German jobs machine falters for first time since 2009

§  Europe: Greek coalition allies balk as Samaras says austerity talks done

§  China: Repo rate falls most since January as PBOC injects cash

§  Japan: BOJ offers unlimited loans to banks to increase demand

§  Japan: Industrial output drop

§  South Korea: Output rises for first time in four months on car makers

 

 

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News Bits | 30 Oct 2012

Highlights of the day

§  Gadang Holdings Bhd (Company Update): Meeting with management reaffirms Trading Buy (Maintain TRADING BUY, TP: RM1.00) [download report]

Our meeting with Gadang’s management yesterday reaffirms our Trading Buy and target price of RM1.00.  Despite yesterday’s weak 1QFY13 results, earnings should pick up strongly from 2QFY13 onwards, and our initial estimate of at least 10 sen EPS in FY13 from construction division alone is on track. (refer to report for details)

 

Other reports

§  Newz Bits [download report]

 

Other Malaysian news

§  Petronas Chemical: Discontinues vinyl business

§  DRB-Hicom: Proton to collaborate with Honda

§  Maybank: Indonesia operations post record profit

§  CIMB: CIMB Niaga records 30% rise in net profit

§  Petronas Gas: Delay in operations of RGT in Malacca

§  IOI Corp: To start China project next year

§  Aeon Co: May announce Carrefour buy this week

§  Sarawak Oil Palms: Mulls plantations abroad

§  Mudajaya: Wins RM65m contract

§  Scomi Group: Abu Sahid strengthening control 

§  O&G: Lundin makes third gas discovery offshore Sabah

§  O&G: Petronas to renew bid for Progress

§  Construction: More MRT jobs awarded 

 

Global news

§  US: Consumer spending rises by most in seven months

§  US: Treasury lowers borrowing estimate by US$29bn

§  US: Labor Department will wait to decide on employment report status

§  Europe: Germany supports ECB Greek debt buyback plan, rejects write-off

§  Europe: Rajoy counters bailout split with Monti urging banking union

§  Europe: Juncker calls extra finance chief talks as Greece showdown looms

 

  

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Newz Bits 240212

Highlights of the day

§         Malaysia Market Strategy : Re-rating of FBMKLCI from PLUS is over [download report]

On 13 December 2011, we came out with a Malaysia Market Strategy report entitled “Delisting of PLUS to benefit others”.  Since then, the big cap stocks with dividend yield that we highlighted have appreciated in share price.  Given that their total increase in market cap of RM26.7bn is much higher compared to the RM9.1bn cash that was returned from the privatization of PLUS, this source of liquidity in pushing the FBMKLCI higher appears to have completed.  While there remains excess global liquidity which could continue to take the FBMKLCI higher, this lends credence to our view that at close to 1600, the FBMKLCI is toppish.

§         WCT (4QFY11 Results): Within expectations (Maintain BUY, TP: RM3.07) [download report]

WCT’s full year FY11 net profit was spot-on with respect to both house and consensus expectations. Although the group’s FY11 results were disappointing, we remain optimistic that WCT, backed by RM5bn tenderbook, will do much better in securing new construction jobs in FY12, having secured 2 contracts worth RM631m back-to-back this year in just one month. Maintain BUY, with sum-of-parts (SOP) target price raised slightly to RM3.07 from RM3.02 previously, to account for the group’s net debt position as at end-FY11 which was better than what we expected.

Other reports

§         Newz Bits [download report]

§         Malayan Banking (2HCY11 Results): stronger showing than expected (Maintain HOLD, TP: RM8.25) [download report]

§         Axiata (4QFY11 Results): Dividend surprise! (Maintain HOLD, TP: RM5.19) [download report]

§         IOI Corporation (2QFY12 Results): Strong plantations performance (Downgrade from Trading Buy to HOLD, TP: RM4.64) [download report]

§         Media Prima (4QFY11 Results): High dividend yield! (Maintain HOLD, TP: RM2.35) [download report]

Other Malaysian news

§         MMC: Dishing out RM5bn power-plant deal to a consortium

§         SP Setia: Eyes RM60bn in development value

§         Berjaya Corp: Vincent Tan retires from Berjaya Corp

§         Green Packet: To invest RM300m capex in 2012

§         Hibiscus Petroleum: Holds EGM on March 21

§         Construction: Mudajaya, Eversendai win RM 1.4bn Tanjung Bin expansion works

§         Oil & Gas: Gas Malaysia inks new gas supply agreement with Petronas

§         Oil & Gas: Petronas awards contract for LNG Train 9

§         Power: Ananda Krishnan mulls disposal of power portfolio

Global news

§         US: Jobless claims point to improving labor market

§         US: Home prices declined 2.4% in 4Q2011

§         Europe: IMF said to limit exposure to Greece at EUR30bn after second loan

§         Europe: Greece sets stage for Friday bond swap

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Market Roundup 230212

FBM30 1556.66, -3.86 points (-0.25%), Volume 1,951mil, Value 2,109mil

1) KLCI was weaker inline with the region as investors turned cautious after oil prices reached nine months high and European services and manufacturing output shrank in February stoking fears of a global economic slowdown. Index was only marginally lower supported by AXIATA+1.6% (strong 4Q and higher dividends) and Tenaga+1.3% but broader market saw heavy selling with losers thumping advancers 689:217. Futures closed 1557.5 (1 point premium).

2) Heavyweights: CIMB-1.1% RM7.16, GENTING-1.11% RM10.72, AIRASIA-1.92% RM3.58, YTL-2.07% RM1.42, AXIATA+1.6% RM5.09, TENAGA+1.31% RM6.19, TM+0.8% RM5.07

3) DBT: MTOUCHE 20m @ RM0.35 (8.8% PUC, 14.6% discount), JCY 12mil @ RM1.20

4) Situationals:

SNTORIA-9.77% RM0.785: Sentoria Group Bhd, a property developer, fell on its first day of trading in the main market as share price fell to RM0.785 with 34million shares traded. SNTORIA's IPO price was RM0.87 and is the first company to list on Bursa in 2012.

5) IOICORP

1H Dec 2011  Tover +11% RM8.3bn   Net -19% RM864.8m  EPS 13sen

5.2% above cons(f)  RM2.1bn  * excl forex trans loss

Results were once again driven by the plantation sector which achieved operating profits of RM1.06bn, +36.8% on the back of higher realized CPO, RM3094/MT and higher FFB pdn of 1.876m MT. Yield improved 10% to 13.45 tns per mature hec.

Property development saw op profits fall 11% to RM249m on lower launches. Resource based manufacturing operating profits gained marginally by 5% despite increase in sales but was moderated by lower margins achieved for the specialty fats and refinery sub segments.

Trading at above sector and market PE valuations, we prefer Sime as IOIC immediate FFB pdn is likely to be restricted by the high mature hec of its planted areas which totals 88%.

6) Market - Current bout of profit taking not unexpected after markets in general having posted significant gains YTD. Stock to accum on weakness incl uemland, pos, mrcb, keuro

Morning Commentary 170112

Good Morning,

1)ARMADA: Bumi Armada's subsidiary, Bumi Armada Navigation Sdn Bhd, had signed a contract with Petróleo Brasileiro S.A. (Petrobras) for the provision of one anchor handling towing support (AHTS) vessel valued at RM155mil. The AHTS vessel will be supporting research activities as well as hydrocarbon and mining activities developed by Petrobras in the Brazilian continental shelf. The Contract is for a period of four years with an extension option of another four years. The Contract is expected to be effective by the first quarter of 2012, when Petrobras is anticipated to formally accept delivery of the vessel, +ve.

2)IOICORP: IOICORP is said to have won the bidding for a prime piece of land in Singapore near the Clementi MRT station to build high-rise public housing with development valued at RM1.7-1.9bil. According to Singapore's Housing and Development Board InfoWEB, IOICORP's wholly owned subsidiary MultiWealth (S) Pte Ltd's bid of S$408mil (RM988.39mil) or S$554 per sq ft was the highest for the project in Jalan Lempeng with the second highest bid coming in at S$360.97mil. Based on an average selling price of S$1,000-1100 per sq ft, IOICORP should enjoy pretax margins of 10-18% assuming construction cost of S$350 per sq ft plus its land cost of S$554 per sq ft.

3)KIMLUN: KIMLUN's wholly-owned subsidiary, Kimlun Sdn Bhd (KLSB) had accepted the letter of award from Ikatan Flora Sdn Bhd, a sub-subsidiary of IJM Land Berhad for the construction of 2 blocks of service apartment and ancillary buildings in Mukim Plentong, Johor Bahru. The contract sum for the Project is RM82.1mil and is expected to be completed by May 2014, +ve.

4)KULIM: Kulim has rejected the offer from Dewan Perniagaan Melayu Malaysia (DPMM) which made an offer to acquire all the shares of QSR Brands Bhd (QSR) held by Kulim at RM6.90 per share. Kulim noted that its holding company, Johor Corporation, said that it would not support any proposal to dispose off the QSR Shares, expected.

5)Mkt: consolidation within a narrow trading range ahead of long CNY weekend.