Period 2Q12/1H12
Actual vs. Expectations
Below ours and the
consensus expectations.
1H12 core net profit
of RM121m came in below ours and the consensus’ FY12 full year estimates of
RM343m and RM360m respectively. Our core net profit is derived after stripping
out the RM750m exceptional gain from the disposal and fair value of Gas Malaysia Bhd (GMB) while adding back the
provision for its Jazan project and group’s provision of c.RM90m.
Dividends No dividend was declared during the quarter.
Key Result Highlights
For 1H12, the revenue increased marginally by 1% but
core net profit rose by 48% due to better contribution from its associates and
the construction division especially Zelan, which had narrowed its losses.
QoQ, the core net
profit jumped by more than 216% due to the strong rebound in associate contribution,
which increased by 235%. This was also supported by the higher margin from its transport
division, especially PTP, which saw its container throughput increased by
4.6%.
Outlook We
believe that MMC will be in the front line to acquire more new assets i.e. KTMB
and to benefit from ETP-based project rollouts in the near term.
Change to Forecasts
We are keeping our
forecasts unchanged at this juncture, as we expect the earnings to be better in
2H12, due partially to seasonal factors.
Rating Maintain OUTPERFORM
Maintain OUTPERFORM
as we expect the share price to react to positive news on MMC i.e. the acquisition
of KTMB and other assets acquisition.
Valuation We
maintain our fair value at RM3.11 based on SoP valuation.
Risks Delays
in the construction of MRT works and late delivery of MRT’s TBM (Tunnel Boring
Machine).
Source: Kenanga
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