Tuesday, 31 July 2012

News Highlights - IHH Healthcare, TSH Resources, Property Sector

IHH Healthcare Bhd (RM3.15/share)
Gets green light to delist Turkey unit
IHH Healthcare Bhd’s plan to delist its unit Acibadem Saglik Hizmetleri ve Ticaret AS (ASH) on the Istanbul Stock Exchange, has been approved by the Capital Market Boards of Turkey. IHH, which bought a 60% stake in Acibadem, has a voluntary tender offer for the balance publicly traded shares of the latter on the stock exchange, the company said in a filing with Bursa Malaysia yesterday.

It has been decided that the offer price would be applied during the voluntary tender offer transaction to shareholders of Acibadem Saglik Yatirimlari Holdings A.S. Almond Holdings A.S. per B class Acibadem share, with a nominal value of 24.90 Turkish Lira. Transactions on the voluntary tender offer will be realised between Aug 3 and Aug 16. – StarBiz

TSH Resources Bhd (RM2.60/share)
Extends acquisition offer
TSH Resources Bhd’s proposed acquisition to integrate its business with Pontian United Plantations Bhd (PUPB) has been extended from 5pm on Aug 7 till 5pm on Aug 22.

TSH had proposed the acquisition of PUPB’s entire voting shares of RM1 each via its indirect wholly-owned subsidiary Bisa Jaya Sdn Bhd, together with Chin Leong Thye Sdn Bhd, Lee Chin Hwa, Lee Min Huat and Lee Sep Pian.- StarBiz

Property Sector
Bidding process for RRI land to start by year-end
The prequalification process for bids for the Rubber Research Institutes of Malaysia (RRI) land in Sungai Buloh, Selangor, will start by the end of this year, says a source close to the Employees Provident Fund (EPF). The source said EPF would call for the prequalification bids as soon as it gets the government’s nod for the proposed development of the land. Pre-qualification bids would be opened to developers who meet the requirements, he said.

EPF is the land owner and master developer of the project. It is buying 890ha of the available 1,215ha RRI agricultural land from the Federal Government for over RM2bil. The pension fund is expected to carve out the land in parcels of 20ha to 200ha each, depending on the use of it. The idea is to build low-end to luxury housing and commercial properties.

The balance of the RRI land is to house the Malaysian Rubber Board hub (217ha) and the My Rapid Transit (MRT) Sungai Buloh depot (72ha). The master planning for the land development is being carried out by EPF’s wholly-owned unit, Kwasa Land Sdn Bhd.
An official from the EPF said Malaysian Resources Corp Bhd (MRCB) was not involved in the master planning. – Business Times

Source: AmeSecurities 

Plantation Sector - Malaysia to boost tax-free CPO exports by 2mil tonnes OVERWEIGHT

- Reuters has reported that Malaysia will increase the export quota for tax-free CPO by up to two million tonnes this year to help planters cope with higher output in the coming few months.

- Reuters cited a government official as saying that the government is doing this on a caseby-case basis for local firms since production is starting to rise in the second half of the year and exports are slow. We reckon that some of these local firms would include IOI Corporation and Sime Darby.

- The hike in the tax-free CPO export quota will increase this year’s duty-free CPO export quota from 3.6mil tonnes to 5.6mil tonnes.

- We view this development positively as it would cushion any surge in palm oil inventory in Malaysia resulting from improvements in CPO production in 2H2012. In addition, it would also help support exports of palm oil in crude form to India, which recently revised its import tax structure. 

- There are concerns that palm oil inventory in Malaysia would rise due to the weak demand in July. According to independent cargo surveyors, palm oil exports from Malaysia eased 14% to 19% in the 25 days of July compared to the same period in June. 

- In spite of this, we reckon that demand will pick up, underpinned by the Mooncake Festival in September 2012. 

- The huge price discount of 20% or US$233/tonne between CPO and soybean oil should also encourage importers in China to switch from soybean to palm oil.

- Since early this year, palm oil inventory in Malaysia has declined 17% from 2.06mil tonnes as at end-February to 1.7mil tonnes as at end-June.

- The increase in the duty-free CPO export quota would also help boost exports to India. The recent revision in India’s tax structure has encouraged importers to buy more palm oil in crude form compared to refined form. India accounted for 13% of palm oil exports from Malaysia in the first six months of this year.

- We remain positive on the plantation sector. We believe that CPO prices would be supported by flat soybean ending inventory in the US in 2012F/2013F and the huge price disparity between CPO and soybean oil.

Source: AmeSecurities 

Bandar Raya Developments - Attractive offer for BRDB shares HOLD

- Bandar Raya Developments (BRDB) yesterday announced that its substantial shareholder, Ambang Sehati Sdn Bhd –  currently with an 18.5% stake - is proposing to take over the company with an offer price of RM2.90/share – a 15% premium to BRDB’s last closing price – and RM1.80 per warrant (15% premium to the last closing price of RM1.57)

- The acquisition of the remaining 81.5% shares in BRDB would involve a total consideration of circa RM1.2bil. 

- The offer price of RM2.90/share values the company at an attractive 22% discount to BRDB’s net asset per share of RM3.70/share as at end-March – vis-a-vis a 36% discount to other property stocks under our coverage. 

- The deal also values the company at 23x and 22x of its FY12F and FY13F fully diluted earnings, respectively. 

- The deal looks attractive as it provides a 21% upside to our fair value of RM2.40/share and some 22% discount to our estimated fully-diluted NAV of RM3.70/share.

- Secondly, BRDB has always been trading at a steep discount of 40%-50% to its NAV even in the recent property market boom. This is not surprising as the group has not been aggressive in new launches. Although the group has been active in landbanking over the past one year or so, it remains to be seen whether BRDB would time the market right in churning out its products.

- Thirdly the delay in disposal of its investment properties (Bangsar Shopping Centre, CapSquare Retail Centre, Menara BRDB and Permas Jusco Mall) may continue to be a drag to the stock’s performance. 

- On the flipside, BRDB is going ahead with the launch of Medang Serai (GDV: RM RM876mil) in Bangsar in 2HFY12 with 121 units on offer. The starting price for these units will be about RM4mil-RM5mil (or RM1,000psf-RM1,200psf) and we are quite positive there will be strong response given that this could be one of the last high-rise developments within Bangsar, if not the last. We are estimating an about 60% take-up within the first year.

- We do not believe the size and the price would deter buyers given the exclusive location and lack of new supply of condos within the area. Other launches for the year include: (i) 93 units at BluWater, Mines comprising semiDs, superlink and bungalows; (ii) Permas Jaya – about 100 units of Semi-Ds and 62 units of shophouses.   

Source: AmeSecurities

Gabungan AQR - RM141m JKR roadworks award

News    AQRS announced that it had secured an award from JKR worth RM141m for the upgrading of roads in Negeri Sembilan.

Comments   Management guided that the company had already started work on the project, which is expected to be completed by end-2014.

 The contract worth of RM141m was within our FY12E order book assumption of RM300m.

Outlook   The outstanding order book currently stands at c. RM900m, which will provide earnings visibility for the group for the next two years.

 We expect more contract flows to come in as the group is bidding for the sub-contracts the KVMRT project worth about RM300m to RM500m in the near term. 

 The earnings catalysts will be AQRS securing more contracts worth more than RM300m in FY12. 

Forecast   No changes to our FY12E and FY13E earnings forecasts.

   We have a NOT RATED rating on the stock as we have yet initiate coverage.  However, there is an attractive upside of 18% to our Target Price of RM1.39.

Valuation    We value AQRS at RM1.39 based on an unchanged 7.0x PER on its FY13 EPS of 19.9 sen.

Risks   Delays in construction projects.  
Price escalation in raw materials and labour costs.

Source: Kenanga 

SEG International (“SEG”) - 1H12 results in line

Period    1H12

Actual vs.  Expectations
 1H12 net profit of RM42.0m was deemed in line with expectations and accounted for 40.1% and 43.2% of ours and the street’s full year earnings estimates respectively. This is because SEG usuallyrecords stronger 2H results as opposed to the 1H due to its higher students enrolment in its third quarter intake. 

Dividends   No dividend was announced for the quarter.

Key Result Highlights
 YoY, the 1H12 revenue of RM158.0m increased by 15% YoY mainly driven by 1) an increase in the number of local and overseas student enrolments, 2) more new courses launched by its overseas partner universities and 3) an increase in SEG’s home-grown programmes. The group’s net profit was up by 16% YoY to RM42.0m thanks to additional higher margin home-grown programmes being launched coupled with a lower effective tax rate (18.8% vs. 19.7%). 

 QoQ, the revenue increased marginally by 3%, nonetheless, net profit dipped by 8% due mainly to higher distribution cost (10.8% vs. 9.4%) incurred from advertising in bid to attract school leavers during the quarter, which caused the EBIT margin to be squeezed by 1.2%. 

Outlook   Remains bright underpinned by more new programmes to be introduced within this year, particularly from an increasing number of its own home-grown programmes.

 Recently, SEG has acquired Bumi Intuisi S/B, which is primary engaged in the provision of total online training solutions. We view this positively as this could further expand its classroom learning model to distant learning, which allows SEG to operate its training programmes in a greater geographical reach.

Forecasts   Post result, we retain our FY12 revenue forecast but have fine-tuned our net profit estimate slightly by -2.7% to RM102.0m after lowering our GP margin assumption to 76.9% from 77.8% previously. 

 No dividend has been declared in 1H12, however, we expect the group to declare a DPS of 7.7 sen and 9.1 sen in FY12 and FY13 respectively, translating into 3.8% and 4.5% of dividend yields.

Rating  Maintain OUTPERFORM

Valuation    Maintaining TP of RM2.45 based on an unchanged targeted FY13 PER of 13.4x (+1SD above 2-year PER band)

Risks   A reduction in its student enrolments.

Source: Kenanga 

Kian Joo Can Factory - A favourable disposal

News   Kian Joo announced that it had signed an agreement in Vietnam last Friday to dispose its 60% stake in Kian Joo Canpack (Vietnam) Co. Ltd. (“KJCV”) to Nihon Canpack Co. Ltd. of Japan (“NCJ”) for a total cash consideration of USD9.3m or RM29.3m.

 KJCV is involved in the contract packaging of coffee, tea and fruits juices in Vietnam Binh Duong Province while NCJ is its joint-venture partner for the remaining 40% stake in KJCV.

 The disposal will be completed within one month andKian Joo will continue to supply cans to KJCV.

 KJCV will soon be renamed as Nihon Canpack Vietnam Co. Ltd. and will maintain its existing cooperation with Kian Joo.
Comments   We are not aware of any material impact to the company as the revenue contribution from contract packaging (6.1%) has been relatively small to Kian Joo in the past years as compared to the cans (71.3%) and corrugated carton (22.5%) divisions.

This is because the division has always been used merely as an added-value client servicing division  to introduce integrated business solutions to customers.

 We are overall positive on the disposal and reckon that the deal is favourable to Kian Joo. 

This is because Kian Joo has been able to sell at a premium price, with the sale price estimated to be at a historical PER of 62x. This estimate is based on the assumption that the whole FY11 contract packaging division’s PBT of RM0.6m was fully contributed by KJCV. Note that besides KJCV, Kian Joo also owns another two contract packaging companies that are based in Malaysia, although we assumed here that there are no significant profit contributions from these companies.

 Furthermore, the RM29.3m cash received will help trim Kian Joo’s net gearing ratio immediately from 0.11x to 0.07x upon the completion of the disposal.   

Outlook  The company has the ability to further improve its production operational efficiency to continue delivering organic growth as well as getting a potential boost from its expansion to the regional markets, which include its existing operations in Vietnam as well as the potential expansion of its aluminium can segment to Indonesia and Vietnam.
Forecast  There are no changes to our forecast.
Rating Maintain OUTPERFORM
Valuation   We are maintaining our TP of RM3.00 based on 9.5x PER (the 1 standard deviation above the average 5-year PER band) over FY13 EPS of 31.2 sen.
Risks  A price upswing in commodities will hit earnings.  

Source: Kenanga

FKLI & FCPO : 31 July 2012

FKLI: Testing Minor Resistance

Buying returned yesterday as the index closed higher, but it remains to be seen if it is good enough to set aside selling pressure arising from the failed test of the 1,650-pt resistance level two weeks ago. Yesterday’s buying failed to push the index above the 1,630-pt resistance level and the latest “Doji” suggests a lack of buying conviction, keeping the hint of buying seen from the “Upper Shadow Line” of last Friday’s candle unconfirmed. Nonetheless, the weakness was within the backdrop of a two-month rally. The index is now comfortably above both the 50-day MAV line and the rising 200-day MAV line, supported by the longer-term positive “Golden Cross” that emerged in February.
Thus, selling pressure could return today but has to close below 12 July’s low of 1,623 pts, which it failed to break last Thursday and Friday, to keep the downside bias intact. Further support is at 1,614 pts and followed by 5 July’s low of 1,610 pts. Stronger support remains just above the 1,600-pt psychological level, at the three-week low of 1,602.50 pts. However, a sustained trade above 1,630 pts today should confirm the buying in the past two days but again, a break of the psychological 1,650 pts (tested twice last week) is required to cancel the current negative bias. Resistance is also expected at last Friday’s high of 1,631.50 pts and 23 July’s high of 1,645 pts.

FCPO: Buying Returns

The selling pressure that has been acting on the commodity since 6 July is likely on the back seat now as the buying seen last Friday was confirmed yesterday. Strength was marked by the gap up above the RM2,950 resistance level (which put a lid on the price in the prior four days) and the close above RM3,000 psychological level on a “Long White Day”. Nonetheless, the commodity is still below the declining 50-day MAV line and the 200-day MAV lines, reinforced by the longer-term negative indication of the “Death Cross” that emerged in early July. The downtrend since late March, with the latest lower highs at RM3,193 and RM3,182, remains intact.
Thus, the commodity should rise today and a firm buying should not see it closing back below the RM3,000 psychological level. The next resistance is, then, at the broken supports of RM3,050 and RM3,100 – the 76% retracement of the late May-early June decline and 38% of the Apr-June decline. Minor resistance is also expected at RM3,030 and RM3,070. However, a failure to stay above RM3,000 should see a return of selling. The broken resistance of RM2,970 and RM2,950 has now turned into support and a break of both would strengthen selling further, as that cancels Monday’s positive “Long White Day”. Strong support is at RM2,900, where a false breakout occurred last week.
Source: OSK

Media - 2QCY12 Adex - A Kick From Euro 2012

2QCY12 advertising expenditure (adex) grew 20% q-o-q and by a marginal 2% y-o-y to RM2.1bn. We deem the increase within forecast, thanks to the adex-friendly Euro 2012 in June and the fact that advertisers had started to spend compared with 1QCY12, during which they were skeptical and preferred to watch how economic conditions unfold. We maintain OVERWEIGHT in anticipation of a strong rebound in 2HCY12, which coincides with the adex-friendly Hari Raya Aidil Fitri, the 2012 Olympics and the impending General Election (GE13). We maintain our growth forecast at 2x our FY12 house GDP growth estimate of 5.2%. Media Prima (BUY, FV RM2.98) and Media Chinese (BUY, FV RM1.86) are our top sector picks.
Adex growth within expectations. According toNielsen Research, adex came in at RM2.1bn for 2QCY12, rebounding by 19.9% q-o-q and 1.7% y-o-y, partly attributed to the Euro 2012. We also gather that advertisers also finalized their advertising and promotions (A&P) budgets during this period. The three core media platforms, namely newspapers, free-to-air (FTA) TV and radio saw y-o-y adex growth of 0.1%, 1.9% and 4.6% to RM1094.5m, RM782.8m and RM114.2m respectively. Cinema and outdoor media adex, meanwhile, surged 22.7% and 25.3% y-o-y respectively. (Note that we did not include the Internet segment’s adex, as internet operators had not provided data to Nielsen, which would only publish the numbers in 3QCY12.)
We maintain our growth forecast. On a quarterly basis, adex across the media platforms rebounded strongly with the FTA TV, newspaper, magazines and radio segments climbing 34.1%, 12.3%, 27.4% and 20.9% respectively in 2QCY12.  In June, adex grew 7% m-o-m due to the Euro 2012, with FTA TV recording 18% m-o-m growth. In view of June’s strong adex pick-up, the on-going 2012 Olympics and Muslim festive season around the corner as well as the highly-anticipated GE13 - which is expected to be held in 2HCY12 - we are maintaining our 2012 adex growth forecast at close to 2x our house forecast of 5.2% GDP growth for 2012.
Maintain OVERWEIGHT. We remain positive on domestic consumer spending momentum, given the rollout of the Government’s Economic Transformation Programme (ETP). We like Media Prima (BUY, RM2.98), being Malaysia’s largest integrated media player and a FTA TV leader with strong print media businesses led by Harian Metro and Berita Harian in its stable. The stock is currently trading at an attractive FY12 PER of 11.7x, with a 4.2% dividend yield. We also favour Media Chinese (BUY, FV RM1.86) for its prudent cost controls and the huge underlying potential of its publications in view of the growing Chinese-literate population as well as the increasing importance of the language in the global arena. We also see a good Buy in Internet-based media company Catcha Media (BUY, FV RM1.03), which registered growth of 19.8% y-o-y for 2011 and 9.8% y-o-y for 1QCY12. We are less keen on STAR (NEUTRAL, FV RM3.46), which is facing a circulation decline. Nevertheless, we believe the group will continue to pay out generous dividends in view of its net cash per share of RM0.63. We are maintaining our DPS forecast of 19.2 sen for STAR, based on a 75% payout ratio, which translates into a 6% dividend yield.
Print loses ground to FTA TV. The newspaper segment remained the nation’s most popular advertising medium, with the lion’s share of 51.7% of total adex. However, it lost some ground to FTA TV, recording a slight decline in adex share of 47.4bps y-o-y in 2QCY12 to RM1094.5m. In contrast, the adex share of FTA TV channels expanded by 33.9bps y-o-y to 37%, thanks to Euro 2012 and the fact that advertisers had kicked off A&P activities in the FTA TV segment, with telco, banking, insurance and fast-moving consumer goods companies opting for TV over print to place advertisements in. Meanwhile, radio remained the nation’s third core platform, gaining 18.4bps in market share and bringing its share of the adex pie to 5.4%.
Non-English publications add market share. Bahasa Melayu (BM) and Chinese newspapers continued to register decent adspend growth and adex share. The adspend of BM publications increased by 5.8% y-o-y while their share of adex inched up 180bps. The Chinese newspapers also saw their adex and market share grow by 1.7% y-o-y, and 40bps respectively at the expense of English papers, whose shares on both counts slipped 220bps and 5.4% y-o-y respectively. This is in line with our view that English-literate readers are increasingly leaning towards accessing the news via the Internet.
Star loses its shine? Media Prima and Media Chinese’s aggregate market share and ad-spend continued to grow healthily, reinforcing our upbeat view on both companies. Media Prima registered a y-o-y adspend growth of 3.7% in 1HCY12, 3.9% in 2QCY12 and a market share growth of 3.9ppts – led by its flagship products Harian Metro, which saw its 2QCY12 adex rise 13.9% y-o-y and 29.9% q-o-q. Although Media Chinese’s adex income ticked up by a marginal 0.2% y-o-y in 2QCY12 and garnered the smallest portion of total adex, it managed to maintain its 20.5% market share. We are positive on the group’s future performance as the Chinese-literate population continues to grow, putting greater emphasis on the language globally. On the other hand, Star Publications continued to lose its shine, registering a drop in both adex (-8.4% y-o-y) and adex share (-210bps), primarily due to dwindling readership and the saturation of advertising space.

TV catches football fever. Thanks to Euro 2012, FTA TV’s surged 18% y-o-y to RM50m in June, breaking the past eight consecutive months’ downtrend, with a 2% y-o-y and 34% m-o-m adex growth in 2QCY12. We attribute this mainly to the spending by advertising agencies, which favoured TV over newspapers and other media platforms. 
Media Prima still in the lead. Media Prima’s four FTA TV channels continued to dominate the air waves, defending its 87.6% market share. We remain optimistic on the group’s ability to keep its lead given its focus on content creation and the implementation of a segmented approach to address viewers’ needs based on demographics. We are also positive on the new MCMC ruling on sharing of sports content, which gives the group strong upside potential.
On 19 April, MCMC announced that from 1 May FTA TV operators could from now broadcast content obtained from rights holders like ASTRO, based on reasonable commercial terms. ASTRO has already collaborated with Media Prima to broadcast selected sports events on a small scale. While there is still no indication on the charges that FTA TV operators will impose, this will benefit Media Prima one way or another. Should negotiations between the Pay TV and FTA TV operators bear fruit, Media Prima’s adex growth will be robust. However, we are maintaining our FTA adex growth of 5% for 2012 at this juncture, pending the release of more details on content charges for sports events.

Valuations/recommendations on Media companies under our coverage

Media Prima’s adex encouraging. We like Media Prima (BUY, FV RM2.98) for its: (i) status as the nation’s sole integrated media player with exposure across all media platforms, (ii) strong print media business, with a dominant position in the BM daily space, thanks to BM sub-segment adex market share leaders Harian Metro (47.9%) and Berita Harian (24.1%), and (iii) its leading FTA TV position with the lion’s share of 87.2% in adex. With such encouraging adex growth, we are bullish on the group’s potential to lure more adex monies from the other media platforms in 2HCY12. Based on its 34% q-o-q TV adex growth as well as Harian Metro’s 13.9% y-o-y and 29.9% q-o-q adex growth, we believe that the group will register healthy mid single digit q-o-q and y-o-y growth in its upcoming 2QFY12 results, which are expected to be announced on14 Aug 2012. Should negotiations on content sharing rates between the Pay and FTA TV operators bear fruit, Media Prima is likely to record strong adex growth moving forward. Nonetheless, we are maintaining our 4% adex growth forecast, pending the release of more concrete details on content sharing charges between TV operators.
Media Chinese still a BUY. Media Chinese (BUY, cum-FV RM1.86) has high potential, considering the country’s growing Chinese-literate population and the increasing emphasis on the language in the global arena. The company’s advertising space is still largely untapped, as its existing publications are skewed towards editorial content as opposed to advertising, at a ratio of 60:40. MCIL’s recent proposed capital repayment of 41 sen bumped up its ROE to 20%, turning it into the highest-ROE media company in Malaysia. While it was surprising that the company paid huge dividends amounting to RM700m. or RM0.41 per share funded through RM500m in borrowings, MCIL will no longer be a cash cow after the payout; it will have to service interest on the loan amounting to RM30m p.a. going forward, based on a 6% p.a. interest rate. We maintain our BUY call for now, considering the group’s ability to pay the debt interest as well as dish out dividends based on a 60% payout ratio, assuming that it does not take on any major capex in the next three to four years. Note that MCIL has a strong free cash flow of approximately RM60m per quarter. Our cum-capital repayment FV is MYR1.86 based on an unchanged 13x FY13 PER. With marginal growth of adex recorded in 2QCY12, and the appreciation of the USD (which poses a threat), we still expect the group’s 1QFY13 results to be in line with our projection of healthy growth in the mid-single digit, boosted by prudent cost controls and its healthy Malaysia and Hong Kong operations.
Riding on robust Internet growth. Within the small- to mid-cap space, we like Catcha Media (BUY, FV RM1.03) for its potential to reap benefits from the Internet media segment, which continued to record a healthy y-o-y adex growth of 9.8% in 1QCY12. Note that adex for this segment was not available in 2QCY12. As Internet advertising grows in tandem with the expansion of broadband services, Catcha Media will benefit from telco companies’ aggressive rollout of broadband services and Government initiatives to boost household Internet penetration. We also expect its e-commerce arm, Haute Avenue, to blossom going forward, capitalizing on its healthy membership growth and the growing trend in internet shopping among Malaysians, especially young working adults. We maintain our BUY call, at an unchanged FV of RM1.03, based on a 12x FY12 PER. An upward re-rating is imminent when iCar Asia is eventually listed on the ASX. iCar Asia is a new online car classifieds company comprising Catcha’s 50%-owned Auto Discount, Mobil 123 (Indonesia’s most notable used-car trading website) and Autospinn (Thailand’s leading online auto news website for car enthusiasts). Post-listing, Catcha will hold a 40.4% stake in iCar Asia)
Not a shining Star. We are less keen on STAR (NEUTRAL, FV RM3.46), which is facing a declining readership, dwindling adex share and a saturation in advertising space. While the group is strengthening its position as a complete media group via the purchase of CNM Events SB, which owns Perfect Living and Perfect Lifestyle for RM45m and which translates into a forward PER of 6x, we are keeping NEUTRAL on the stock due to its limited upside. Still, we believe the group will continue to pay out lucrative dividends in FY12, judging from its huge net cash pile of RM513.4m, or net cash per share of RM0.63. We are maintaining our DPS forecast of 19.2 sen based on a 75% payout ratio, translating into a dividend yield of 6%.
Source: OSK

Daily Trading Stocks: Malaysia Resources Corp Bhd

MRCB’s rebound is likely to continue after the firmer close on high volume yesterday. A position can be initiated above RM1.80, with a close below the recent low of RM1.70 as a stop-loss. The price target is RM2.11, provided that the recent high of RM1.90 is violated. The upward bias is likely nullified should the stop-loss be triggered. Supports are at RM1.66 and RM1.55.

Source: OSK

Daily Trading Stocks: Asia Media Group Bhd

Asia  Media  should  continue  higher  after  printing  another  all-time high close yesterday. A position can be initiated at the current price with  a  close  below  the  two-day  low  of  RM0.58  as  a  stop-loss.  The price target is the psychological RM0.75 and selling is also expected at  the  round  figure  of  RM0.70.  The  stock  could  be  at  the  mercy  of the  seller  if  the  stop-loss  is  triggered  and  supports  are  at  RM0.545 and RM0.50. 

Source: OSK

Daily Trading Stocks: N2N Connect Bhd

N2N’s five-month  sideways  consolidation  could  be  over  if  it  stays above  RM0.50  today.  A  purchase  can  be  made  if  it  happens,  with  a close  below  RM0.50  as  a  stop-loss.  Price  target  is  at  RM0.70,  with selling  also  anticipated  at  RM0.63.  Failure  to  hold  above  RM0.50 should  see  the  return  of  selling  and  the  stock  may  even  correct  if RM0.44 is violated. Further supports are at RM0.375 and RM0.34.

Source: OSK

Daily Trading Stocks: MyEG Services Bhd

MyEG’s rebound is likely to continue after the firm close yesterday. A purchase can be made on a close above RM0.645 and a close below RM0.62 can be employed as a stop-loss. The price target is RM0.71, with selling also expected at RM0.685. The upward bias is likely cancelled should the stop-loss be triggered and expect strong support at RM0.58.

Source: OSK

Daily Trading Stocks: Masterskill Education Group Bhd

MEGB may fall further after printing an all-time low yesterday. A position can be liquidated below RM0.87 and supports are expected at RM0.83 and RM0.78. The downside bias is only eased if the stock can stay above the recent high of RM0.91. Further resistance are at RM0.94 and then the psychological RM1.00.

Source: OSK

Daily Trading Stocks: GW Plastic Holding Bhd

GW Plastic may scale higher if it can break above the one-year resistance level of RM0.75. A purchase can be made if it closes above the level and a close below the recent low of RM0.715 can be employed as a stop-loss. The price target is RM0.83, with selling also expected at RM0.80. Failure to break higher may embolden sellers and further support is at RM0.63.

Source: OSK

Daily Trading Stocks: Eden Inc Bhd

Eden could rebound after the strong move on high volume yesterday. A position can be initiated above RM0.33 with a close below the psychological RM0.30 as a stop-loss. The price target is RM0.41, with resistance also expected at RM0.37. Failure to break higher could see it lower and further supports are at RM0.28 and RM0.25.

Source: OSK

SEG International - Margins Down a TickPost title

SEG International’s (SEGi) 1HFY12 core earnings of RM36.3m were in line our expectations but below consensus estimates at 46.1% and 37.3% of the full-year projections respectively. We continue to like SEGi as the group looks to venture into pre-school, primary as well as secondary private education to propel earnings growth going forward. Maintain BUY, at a revised FV of RM2.52, as we roll forward our valuation to FY13, based on an unchanged 18x PER.
Within expectations. SEGi’s 1HFY12 revenue came in 15.8% higher y-o-y at RM158.0m due to higher student enrolment, which we estimate at 29k as of June 2012. EBIT margin, however, dipped 60bps to 32.9% owing to higher distribution expenses, which jumped 17.5% y-o-y to RM16.0m during the period under review. All in, the group’s 1HFY12 core earnings improved 15.9% y-o-y to RM42.0m.
Flattish q-o-q on seasonality. On a quarterly basis, 2QFY12 revenue inched up by 3.0% q-o-q to RM80.2m. However, the marginal sequential growth went on reverse gear as EBIT fell 8.2% q-o-q to RM24.9m, with the corresponding margin shrinking by 200bps to 31.0% as cost of services climbed 14.1% q-o-q, primarily due to higher distribution expenses. All in, the 2QFY11 core net profit dropped 8.1% q-o-q at RM20.1m.
Retaining forecasts. No changes to our forecasts at this juncture in anticipation of a seasonally stronger 2HFY12. We continue to forecast core earnings of RM91.1m for FY12 and RM104.9m for FY13. We are also introducing our FY14 projected net profit of RM114.2m, which implies a decent growth of 8.9% y-o-y over our FY13 estimate, as well as a dividend yield of 3.8% p.a.
New earnings stream by 2015. Over the medium term, the group’s venture into international schools following the proposed acquisition of a 12-acre land in Bandar Setia Alam from SP Setia for RM52.3m would help the group to penetrate into the fast-growing and better-yielding private pre-school, primary and secondary education segment. We understand that the tuition fee at the proposed international school would range from RM40k-RM50k p.a, and is likely to welcome its first intake of students sometime early 2015. The capex allocated has yet to be determined, but we believe it would likely be to the tune of RM50m-RM70m, to accommodate 4k-5k students. 
BUY. Rolling forward our valuation to FY13, our FV is now RM2.52, based on an unchanged 18x PER. SEGi continues to be our top education pick for its large enrolment base, diversified course offerings and asset-light model. Maintain BUY. 
Source: OSK

Kenanga Today : 31 July 2012

- BII Net Profit For First Semester 2012 Up 61.0%
- Bank Rakyat's Half Year Profit Soars To RM1.1b
- RedTone returns to the black in 4Q
- Maybank signs five-year partnership with Legoland for retailbanking services
- SP Setia Says 90.0% Of Its Sky PeakResidences Apartments Already Taken

- HSBC takes USD2.0b hit for U.S., UK scandals
- GM signs Man United deal day after marketing executive exit
- Peet’s Seen Tempting Starbucks to Top Richest Java Bid:Real M&A

- Japanese Industrial Output In Unexpected Fall
- South Korea Manufacturer Confidence Drops To 3-YearLow
- RBI Says IndiaInflation Risks Significant Even As Growth Slows

- Spain Recession Deepens, New Austerity To TakeEffect
- Euro Crisis: Geithner And Schaeuble Call For Co-Operation
- Euro-Area Economic Confidence Drops More Than Forecast
- Italy's 10-Year Yields Ease Below 6 % AtAuction
- U.K. Mortgage Approvals Decline To Lowest LevelIn 18 Months
- Swedish GDP Growth Unexpectedly Accelerates On Spending

- Dollar Gains Ground As ECB Doubts Creep In

- Brent Slips To $106, Economic Worries Trump Lower OPEC Output
- Gold Flat As Investors Focus On Cenbank Meetings

Source: Kenanga

Monday, 30 July 2012

News Highlights - Malaysia Resources Corporation, Banking Sector

Malaysia Resources Corp Bhd (RM1.73/share)
In line for RM1b MRT job
Malaysia Resources Corp Bhd (MRCB) is expected to win a contract worth about RM1bil this week for the Sungai Buloh-Kajang (SBK) MY Rapid Transit (MRT) line. If awarded, this will be the first railway-related job for MRCB this year. MRCB, which is 42% owned by the Employees Provident Fund, also won a RM1.3bil contract for the Ampang light rail transit (LRT) extension project in August 2011. Business Times learnt that the latest contract is to build viaduct guideways and other associated works between the Taman Mesra and Kajang stations. Sources close to MRT Corp said it was also expected to award several contracts to build stations and a depot over the next few weeks. This includes a contract worth RM1.6bil to supply trains for the SBK line. MRT Corp has received bids from Changchun Railways Vehicle Co Ltd, Siemens SMH Rail Consortium and CSR Zhuzhou Electric Locomotive Co Ltd to supply the trains. So far, MRT Corp has awarded 33 contracts valued at RM15.5bil for the SBK line. There are 21 contracts in the process of evaluation. The remaining 31 contracts will be awarded by the end of this year.  – Business Times

Banking Sector
Developments in S’pore may impact M’sia banking scene
A recent issuance of banking licences in Singapore may have some implications on the Malaysian banking system, according to industry sources. Recently, the Monetary Authority of Singapore (MAS) said it would be granting two full-fledged licences in the city state to two Chinese banks which MAS had not named just yet. The full banking licences, called Qualifying Full Bank (QFB) licences in Singapore, will be issued to two Chinese banks already operating in Singapore. However, what is noteworthy is that this has taken place amidst a long-standing application for a full-fledged banking licence in Singapore by Malaysia’s CIMB Group Holdings Bhd. The only Malaysian bank with this type of privileged licence in Singapore today is Malayan Banking Bhd. Reports have indicated that Singapore’s DBS Bank Ltd is seeking to penetrate the Malaysian market after Bank Negara had in April given the go-ahead for DBS to begin negotiations with Duxton Investments Pte Ltd, a unit of Temasek, for an effective 14.2% equity in Alliance Financial Group Bhd (AFG). However, it is left to be seen if DBS will get the necessary approvals to do all this, especially in light of Singapore’s recent decision to award the QFB licences to two Chinese banks while a Malaysian bank has been waiting for the same. - StarBiz

Source: AmeSecurities 

Banking Sector - Singapore QFB licences awarded to China banks OVERWEIGHT

- The press reported that the Monetary Authority of Singapore (MAS) had announced it will be granting two full-fledged Qualifying Full Bank (QFB) licences in the city state to two Chinese banks which MAS had not yet named.    

- The three Chinese banks operating in Singapore are  Bank of China, China Construction Bank and industrial and Commercial Bank of China. 

- Earlier on 28 June 2012, MAS announced changes to its QFB programme. MAS said then it would continue to consider awarding new QFBs only under FTA negotiations. 

- New QFBs that are granted under future FTA offers will have to first locally incorporate before they may establish up to 25 places of business.

- Thus, the two new QFB licences to be issued to China banks are considered to be awarded under the China-Singapore Free Trade Agreement pact. 

- As for Malaysian banks, so far, only Malayan Banking (Maybank) has a full QFB licence in Singapore. CIMB Group Bhd (CIMB) has a limited bank licence which allows it to operate two branches in Singapore. 

- Given the new changes announced on 28 June 2012, the implication for CIMB is that it will now be considered for a full QFB licence under FTA negotiations. 

- We expect neutral impact on CIMB, given that expectations of a full QFB licence had been muted. We maintain BUY on CIMB with an unchanged fair value of RM8.70/share. 

- The new ruling by MAS on 28 June 2012 was announced after Alliance Financial Group (AFG)’s announcement of DBS’s proposed entry as new strategic shareholder on 2 April 2012. In the announcement, AFG said it had received notice from Duxton Investments Pte Ltd (Duxton Investments), that DBS Bank Ltd (DBS) has obtained the approval of Bank Negara Malaysia (BNM) to commence discussions to acquire Duxton Investments’ 49% stake in Vertical Theme Sdn Bhd (Vertical Theme).

- With changes to the QFG programme and given that DBS’ proposed acquisition has yet to  be approved, we believe this may give rise to concerns about possible delays in DBS’ proposed acquisition of an effective 14% stake in AFG.     

- We believe AFG’s share price has rerated ahead of confirmation of the entry of DBS as a major shareholder. We maintain HOLD on AFG with an  unchanged fair value of RM4.40/share.  

Source: AmeSecurities

MRCB - To be awarded the final MRT viaduct package? HOLD

- It was reported in the media today that Malaysian Resources Corporation (MRCB) could be awarded the final KV MRT viaduct package which has a value of RM1bil, sometime this week. 

- The contract entails the construction of viaduct gateways and other associated works between the Taman Mesra and Kajang Stations.

- MRCB’s order book is expected to grow to about RM3.5bil (effectively about RM2.5bil) should this goes through. We would not be making any changes as we have already assumed RM1bil order book renewal for this year. Nonetheless, margins are expected to be thin given the intense bidding. 

- Including this award, we estimate that some 38 work packages worth a combined RM17bil would have been dished out. We believe there are another 16 packages currently being evaluated while the remaining 31 have yet to be called.

- On the flipside, tenders for the beautification portion of the ROL project worth up to RM1bil could be called in 2H2012. MRCB’s JV with Ekovest has the upper-hand, we believe, given their expertise. Nonetheless, any potential involvement in the development of selected pockets of land along the river will not be in the immediate term.

- Its property development unit’s focus should remain at KL Sentral with more than five ongoing projects. The group nonetheless is looking at starting work on other landbank, for e.g. in Setapak, although redevelopment of Brickfields’ government squatters will be pushed to next year. 

- MRCB is currently trading at a steep 36% discount to our estimated SOP value. While valuation is demanding at 27x for FY13F earnings, newsflow on the award of MRT package would support the stock.  Maintain our HOLD rating.

Source: AmeSecurities 

Oil & Gas Sector - Delays for Belud FPSO award, Angsi CEOR rolls on OVERWEIGHT

- Upstream reported that the award to provide a floating, production, storage and offloading (FPSO) vessel for the Belud field in Block SB 302 off Sabah could be delayed as US-based Hess has called for M3nergy, Bumi Armada and MISC to resubmit their bids. Hess, which is still negotiating a gas sales contract with Petronas, is understood to have sought extension of bid validity from the three bidders. The Belud FPSO tender was revived in early July this year, but the status of the gas sales contract remains unclear.

- The scope of the FPSO contract has been expanded to include additional front-end engineering and design and detailed engineering studies. The production floater is now expected to be an Aframax-sized vessel that will be spread-moored closer to a new wellhead platform for the Belud field development. Additionally, the FPSO charter has been extended to 10 years from the previous seven-year firm charter plus an eight-year extension. 

- The Belud FPSO was originally intended to be equipped to process 7,500 barrels of oil per day, 15,000 bpd of liquids and 150 million cubic feet of gas per day from up to seven subsea risers. The floater, tied to a wellhead platform, will initially extract output from the Belud South discovery, followed by Belud East. First gas from Belud was first targeted for mid-2014, but this is facing delays given the-re-tender for key production facilities. 

- Meanwhile, Petronas has awarded the front-end engineering and design (FEED) contract for the country’s first vessel-based chemical enhanced oil recovery (CEOR) project in the matured Angsi field off Peninsular Malaysia to MMC Oil & Gas Engineering and Water Standard of the US. The contract, expected to last for about three months, is a roll-over from the basic engineering contract already awarded last year to the two players for the Angsi enhanced oil recovery project.

- The Angsi FEED studies will also involve a proposal for the mixing and transportation of the chemical mixture of alkali, surfactant and polymer (ASP). One possible solution involves the construction of a new plant at the Kemaman supply base to process and store the ASP inventory and to transport the required volume to the vessel location. However, Upstream reported that Petronas appears to be moving towards two other lower-cost options for the processing of chemicals offshore either on board the CEOR vessel or on a leased or purpose-built barge. Petronas is believed to have lined up its subsidiary MISC for the operations and maintenance of the CEOR vessel, with delivery expected in 2014.

- But the US$5.2bil (RM16bil) North Malay basin project, being undertaken by Petronas Carigali and Hess, is going ahead as planned with first gas from the Kamelia field expected by 1Q2013. Hence, we remain OVERWEIGHT on the sector given that Petronas remains committed to its RM300bil 2011-2015 capex programme, which is likely to accelerate next year onwards despite a slow start for the first two years.  Our top BUY is Petronas Gas, as its earnings growth will reach an inflection point with the commencement of the 530mmscfd Lekas regasification terminal (RGT) in September this year, further supported for future RGT projects in Lahad Datu, Pengerang and Lumut. Our other BUY calls are SapuraKencana Petroleum, Malaysia Marine & Heavy Engineering Holdings, Bumi Armada and Dialog Group.

Source: AmeSecurities 

Kenanga Today - 30 July 2012

- Crescendo to launch Johor township with GDV of RM3.0b
- KEN’s RM1.22b project dwarfs its market cap
- Petronas raises Progress Energy offer after rival bid
- Pestech signs MoU with Laos state firm
- MISIF hopes for more M&A among local iron and steelplayers, says president
- CMS Cement says will not raise price
- Players positive on CPO
- HoHup gets extension from Bursa

- Apple buys mobile security firm AuthenTec for USD356.0m
- Avivaapproached for sale of U.S.life unit

- Growth In U.S.Slows As Consumers Restrain Spending
- U.S. Consumer SentimentGauge FallsTo Lowest This Year

- China Factory Profit Drop Slows To 1.7% In June
- Japan CoreCPI Falls, Deflation Set To Persist

- Merkel, Monti Agree ‘Will Do Everything’ ToProtect Euro
- Spain Jobless Reaches Post-Franco Record AmidAusterity
- Spanish Bond Yields Drop Most In 7 Months On Bets ECB WillBuy
- Spain: Action Needed To Tackle Economy, SaysIMF

- Dollar Rebounds From 3-Week Low

- Oil Up Fourth Day As Stimulus Hopes Support
- Gold Holds Gains After GDP, Posts Weekly Rise

Source: Kenanga 

Malaysia Airport - 2Q12 within expectation

Period    2Q12

Actual vs. Expectations
 The 1H12 core net profit of RM239m came in within expectations and accounted for 56% and 50% of ours and the consensus’ full year FY12 forecasts respectively. 

Dividends   No dividend was declared for the period. 

Key Results Highlights
 For the YTD, MAHB recorded a 8% higher core net profit YoY to RM239m on the back of a 5% increase in passenger traffic. The higher growth in its core net profit as compared to the passenger traffic was mainly due to a higher PSC tariff.  

 1Q12 revenue of RM662m was 22% higher YoY due to a higher construction revenue recognised for the ongoing works for KLIA2 and Penang International Airport. The pre-tax profit was marginally lower by 1% due to a 27% increase in cost. The cost rise was however mitigated by the higher PSC tariff charge during the period.

 QoQ, the core net profit of RM117m was lower by 3% due to the higher depreciation, operational and staff costs.

Outlook   Sabiha Gokcen International Airport (“SGIA”) is still in a loss position and management expects it to only turn EBITDA-positive by 2016.

 MAHB is planning to inject an additional RM30m capital into SGIA but no decision has been finalised at this juncture.   

 The construction of KLIA2 is progressing within the time frame and is already 65% completed. 

 The response for the rental and commercial space in KLIA2 has been overwhelming since the first tender was issued out a few months back. The indicative rental rate is at RM40psf and MAHB is planning to increase the rate by 5% per annum.

Change to Forecasts
 No material changes in our forecast for FY12. However, we have toned down our SGIA forecast by extending its loss position from 2014 to 2016. There is no change to our earnings forecasts for the Malaysian-based business. 


Valuation    We have lowered down our Target Price slightly to RM6.45 (from RM6.50) as we had extended our loss assumption on SGIA from 2014 to 2016. 

Risks   (1) A longer-than-expected recovery time for MAS’ business turnaround and (2) a significant drop in AirAsia’s passenger numbers.      

Source: Kenanga

MRCB - Landbanking through Nusa Gapurna

News   It was reported that MRCB is considering to acquire a private company, Nusa Gapurna Development Sdn Bhd (“Gapurna”) to leverage on the company’s landbanks worth up to RM13b. Gapurna is managed by Datuk Mohamad Salim Fateh Din.    
Comments   We view this news as positive to MRCB as it will be able to leverage on Gapurna’s prime landbanks in around the Klang Valley. 

 Based on the news, the price tag to acquire Gapurna was reported at the range of RM11b to RM13b, which is mainly the total GDV of Gapurna’s landbanks located in PJ and other Klang Valley areas (approximately 60 acres). The acquisition is said to involve a share swap exercise between EPF and Gapurna, which will result in Gapurna holding below 20% of MRCB.

 However, the pricing is said to be still in discussion and not finalised yet. We however believe that MRCB and Gapurna will wrap up the possible acquisition in the next few months or before the year-end. We also understand that Gapurna’s proposal is not the only proposal on MRCB’s table as there could be another proposal involving a listed company.  

 Based on our back-of-the-envelope calculation, we expect EPF to dilute its shareholding in the enlarged MRCB (including direct and indirect interest) from 42.2% to 29.1%. At the same time, Gapurna will hold about a 22.0% interest in MRCB.

 This calculation is based on an assumed RM1.50 as the benchmark share price (based on the last GO exercise price in MRCB by EPF) to be issued for the acquisition and Gapurna’s FY11 shareholders’ fund of RM370m.  
Outlook  The exercise is important to MRCB to replenish its landbank in our view.  

 We understand that MRCB will finalise the acquisition by this year-end.
Forecast  No changes to our forecasts.
Rating Maintain OUTPERFORM
 We are maintaining our OUTPERFORM recommendation.
Valuation   No changes to our SOP Target Price of RM2.71. 
Risks  Delays in securing more landbanks and cost overruns at its ongoing projects due to construction delays.

Source: Kenanga 

Malaysian Building Society - Making good progress

Malaysian Building Society Berhad (“MBSB”) is continuing its process of restructuring its legacy NPLs.  We view this restructuring effort as a significant positive boost for the stock. We are reiterating our OUTPERFORM rating on MBSB with an unchanged target price RM2.70.  

Expecting another two legacy loans to be restructured by yearend. MBSB is in the process of negotiating its NPLs with more than a dozen interested parties. It targets to restructure about RM350m, representing one third of its net NPLs (1Q12 group NPLs were at RM1.29b), by end of the year. With the completion of this NPL restructuring, this will bring its NPL ratio down to 5% or below. Meanwhile, its net NPL ratio has improved from 8.5% in 4Q11 to 7.3% in 1Q12.                   
More one-off gains? Under the current market environment, restructuring legacy NPLs such as abandoned projects may be tough, and management has highlighted that will not sell or restructure if it incurred losses.  Most of the legacy assets are already valued on mark-to-market basis and hence the revival of these projects will not result in any substantial one-off gains.  

So far so good. YTD, the group has successfully written back two legacy accounts and divest one non-core subsidiary. The first project to be written back will be the Taman Kenanga project, which is expected to be relaunched in September 2012 while the other project  is a debt settlement agreement of RM120m to revive and complete the Pantai Plaza project in Bangsar. It has also disposed a 100%-owned subsidiary, Gadine S/B, for a cash of RM56.2m.

Prospect remains bright. We view the restructuring of its legacy NPL exposure as a significant positive boost for the stock given that this will materially reduce the risk of any further provisioning charges and free up more capital for its future lending capacity. However, in the short-term, there are still concerns over the Eurozone economy  and global market uncertainties. Nonetheless, we believe the group is well consolidated and we expect the local civil service to maintain its stable employment status. All in all, the prospect for MBSB remains bright.

OUTPERFORM maintained.  We are maintaining our target price of RM2.70 based on a targeted P/BV of 1.7x over FY13 BV of RM1.60. Our target price of RM2.70 also implies 7.1x and 6.0x to our FY12 and FY13 EPS estimates, respectively. At the current level, the  stock offers a potential capital upside of 10%. Together with an additional dividend yield of 3.8%, this brings the potential total return to approximately 14% over the next 12 months. Its ROE of 28.1% remains one of the highest among financial stocks. 

Source: Kenanga 

Multi-Purpose Holding - IPO pricing not firmed up yet

News   It was reported in  The Edge Weekly  over the weekend that both the management of MPHB and its bankers have yet to firm up the price for the listing of its non-gaming assets. 

 According to the report, MPHB was leaning towards the IPO being priced at a discount to reward its existing shareholder while the bankers thought it should be done at a premium. 

 MPHB will submit the draft prospectus for the NEWCO listing to SC by the end of next month.

Comments    To recap, we value the non-gaming assets at RM1.44b while for the decoupling exercise, the existing shareholders are expected to be rewarded with 56 sen one-off special dividend. 

 In our view, there is no issue on the pricing to the existing shareholders. If the non-gaming assets are priced at discount, the reward to the existing MPHB shareholders (via the special dividend) would be lower while the offer price for the IPO would be lower as well. 

 Likewise, if the non-gaming assets are priced at a premium, the existing shareholders would receive a higher special dividend and the IPO would be priced at a higher price. 

 However, we prefer the assets to be priced at not more than their fair values as any premium valuation for its IPO could possibly attract less subscribers/interests.

 Although the non-gaming assets may not be as attractive as compared to the gaming business, we still see great potential from the property assets. Hence, a fairly priced IPO will still attract investors to subscribe to the stock, in our view.

Outlook   The demerger is expected to unlock the group’s value while dividends are set to rise higher on the back of its 80% dividend payout policy. 

Forecast   No changes to our estimates. 


Valuation    We are upgrading our target price to RM3.88/share (from RM3.72/share), based on a 10% holding company discount to its RNAV. 

 This is based on an updated RNAV calculation of RM4.31/share (from RM4.13/share previously) to reflect the latest WACC of 8.9% for its gaming assets from 9.3% previously.

 Nonetheless, we expect a higher valuation for its gaming asset to as high as RM4.52/share upon the completion of the demerger exercise as MPHB will then become a dividend play, which will reduce its Beta. 

Risks   A rise in gaming tax by the government  Weaker than expected ticket sales and a higher than expected prize payout ratio.

Source: Kenanga