News Bits | 13 Dec 2012

Highlights of the day

§  S P Setia (Results Review): 4QFY12: Sales exceeded target (Maintain HOLD, TP: RM3.70) [download report]

SP Setia’s FY2012 results met our expectations but was below market’s as net profit of RM394m made up 99% and 82% of house (adjusted) and consensus full-year estimates, respectively. 4QFY12 saw net profit growth 54% y-o-y backed by higher revenue recognition mainly from its property development projects and better margins. The Group managed to surpass its FY2012 sales target by securing total property sales of RM4.23bn (+29% y-o-y). For FY2013, the Group is targeting sales of RM5.5bn to be driven by the Group’s existing projects and new launches. A gross final dividend of 9 sen was recommended for the quarter.

 

Other reports

§  Newz Bits [download report]

 

Other Malaysian news

§  AirAsia: To unveil order for 100 Airbus jets

§  MBSB: Buying tower in PJ Sentral

§  Berjaya Toto: May give special dividend

§  Media Prima: Forms digital arm to expand revenue

§  UOA Development: To sell building to UEM for RM173.25m

§  REDtone: Eyes RM80m revenue from data business in FY13

§  Construction: Rail decisions by 1Q

§  Media: ABN targets 80% of TV households in five years

§  Media: Rolling out digital TV may cost RM1bn

§  Telco: U Mobile works with Macro Kiosk on EMS

 

Global news

§  US: Fed links rates to joblessness, prices as bond buying expanded

§  US: Fed officials forecast main rate to stay near zero until 2015

§  Europe: EU finance ministers move toward agreement on ECB bank oversight

§  Europe: Greece plans to retire EUR31.9bn of debt in buyback

Morning Commentary 160112

Good morning,

1) Proton: DRB Hicom is understood to have secured Khazanah's 42.7% equity interest in Proton, according to sources close to the deal. It's said that the price range may be higher than market expectation of about RM5.50 per share. The announcement of the sale may be made anytime now. However it is not clear if DRB has obtained an exemption from making a general offer, or will go ahead and privatize Proton. At RM5.50, DRB would end up paying RM1.28b for the Khazanah block & RM3.02b for the entire 549.2m shares in Proton -  Disappointing, the price of RM5.50 lower than the initial speculated price of between RM6-7 per Proton share.

2) Takaso/GPharos: Takaso Resources is said to be diversifying into the mining sector with Trengganu state owned Golden Pharos Bhd as it's partner, sources said. Golden Pharos, which is 61% owned by Trengganu Inc SB, was likely to form a collaboration with Takaso and together, both parties obtain a state-related iron mining project. The parties have had serious discussions, but it is unclear at this stage how a collaboration will pan out. Takaso is a condom maker but is looking to diversify it's business. It recently said it would acquire Kayu Mas(PNG)     Ltd which holds the rights to a net loggable area of 40,000 ha of timber, possibly worth up to RM500m, in Papua New Guinea. It said this was to  diversify it's core business due to increasing competition in the condom industry.

3) Redtone: Redtone International Bhd has entered into a 4G/LTE network collaboration & partnership agreement with members of 2 local telecommunication consortiums, according to it's MD. He said Co has entered into an arrangement with the individual companies rather than the consortium & will make the announcement on the matter once the Multimedia Commission finalises the positioning of each spectrum block. The 2 consortiums are the partnership of Maxis Bhd/U-Mobil and Digi/Celcom. Although MD did not reveal who exactly it will be tying up with, he said that it will be with more than 1 telco; Partly expected, given Redtone's relatively small size & that funding may eventually prove to be an issue. Market talk has been rife over the past 2 weeks about Redtone entering into a tie-up in order to rent out portions of it's bandwidth. Sources have named Digi & Celcom as being Redtone's possible partners.

4) Mkt: consolidate in view of S&P's downgrade of EU nations' credit ratings and as players wind down this week ahead of the CNY.