tag:blogger.com,1999:blog-68561586293312811082024-03-09T08:11:02.029+08:00Journey to Wealth (Bursa-KLSE)KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.comBlogger4542125tag:blogger.com,1999:blog-6856158629331281108.post-46751239519383809592013-03-25T14:45:00.000+08:002013-03-25T14:45:02.044+08:00Insurance - Key Points In BNM, IMF Reports<br />
<div class="MsoNormal">
<b><span lang="EN-US">The insurance and takaful industry saw a boost
in profitability in 2012, spurred by improving premiums growth and healthier
combined ratios in the general insurance/takaful sectors. Despite notable
increases in equity exposure and concerns on interest rate risk, insurers’ risk
exposure remains reasonable. BNM intends to tighten scrutiny of the insurance/takaful
industry, as recommended by the IMF Country Report. We remain NEUTRAL on the
sector.<o:p></o:p></span></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Better 2012.</span></b><span lang="EN-US"> The life insurance and family takaful sector
reported a 38.2% increase in net income or excess income over outgo, backed by premiums/contributions
growth of 11.2%. Meanwhile, the general insurance and takaful segment’s
operating profits surged by 72.6% to RM2.9bn on the back of
premiums/contributions growth of 11.1%. The general insurance and takaful
industry also benefited from a low combined ratio of 96.9% (vs 104.7% in 2011).
<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Regulations tighten their grip.</span></b><span lang="EN-US"> The industry’s capital adequacy
ratios (CAR) leveled at 222.3% (vs 222.5% in 2011), well above Bank Negara
Malaysia (BNM)'s supervisory target capital level (STCL) requirement of 130%.
The IMF Country Report acknowledges the strength and comprehensiveness of the
local insurance regulatory measures versus the international framework.
Meanwhile, the country’s cross-border operations are still small relative to
the industry, which we believe may have prompted BNM to relax cross-border
financial activities for resident insurers and takaful operators. The central
bank intends to enhance the existing prudential requirements with the Financial
Services Act (FSA), as well as other measures which may include containment of
systemic risks and cross-border risks. This should boost the sustainability of
the industry, which being liberalised.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">NEUTRAL.</span></b><span lang="EN-US"> We retain NEUTRAL on the sector, with our Top
Picks being Syarikat Takaful for its exposure to the takaful industry, and LPI
Capital for its robust business model and solid underwriting strength.<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-US">Source: <a href="http://research.osk188.com/attachments/71/osk-report-my_financial-insurance-malaysia-sector-update_highlights-from-bnm-and-imf-reports_201303211451-XkMX1554883168514f9c37838de.pdf">RHB</a></span></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com3tag:blogger.com,1999:blog-6856158629331281108.post-66778334683960068892013-03-25T14:31:00.002+08:002013-03-25T14:31:19.040+08:00SapuraKencana Petroleum - Positive Outlook<br />
<div class="MsoNormal">
<b>We reiterate our Buy
call on SapuraKencana. Our fair value is upgraded to RM3.96 (from RM3.76
previously) based on 21x FY01/14 EPS. Similar sized peers such as Bumi Armada
are currently trading at 19-20x forward earnings. While it currently has the
orderbook to sustain revenues for the next 2.5 years, its enlarged asset base
and solid balance sheet allow it to bid for larger and more complex projects
moving forward. <o:p></o:p></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Seadrill acquisition
to be completed by end-April 2013.</b> Based on our discussions with management
during the analyst briefing, we understand that the Seadrill acquisition is on
track to be completed by end-April 2013. The EGM is slated to be on the 23rd of
April, after which the pricing of the market placement would be determined. We
thus expect Seadrill’s tender rig business to contribute to the remaining 9M of
FY01/14. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Orderbook of
RM18.2bn.</b> With an RM18.2bn orderbook, SapuraKencana’s earnings visibility
remains clear as the current orders are enough to sustain revenues for the next
2.5 years. Currently, the bulk of SapuraKencana’s orders are from Malaysia
which accounts for 36%, followed by Brazil (29%), SEA (15%) and Australia
(10%). <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Berantai first gas
achieved, targeting more RSCs.</b> SapuraKencana’s marginal field RSC,
Berantai, has produced first gas and started contribution in 4QFY13. We expect
full-year revenue and earnings contributions from the RSC in FY01/14 onwards.
When queried, management highlighted that they are interested to bid for more
RSCs in the future. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
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<b>Forecasts.</b> Our
FY01/14-15 net profit estimates have been raised by 53-56% as we have imputed
the contribution from Seadrill’s tender rig business. Investment case. We
maintain our Buy call on the stock with a new fair value of RM3.96 (from
RM3.76) based on unchanged 21x FY01/14 EPS.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Source: <a href="http://research.osk188.com/attachments/76/osk-report-sapurakencana_25032013_briefingnote-C1wZ215898212514fa6310f7ac.pdf">RHB</a></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-67456803861709572372013-03-25T14:28:00.001+08:002013-03-25T14:28:15.144+08:00Kenanga Research - On our Portfolio - Parliament dissolution around the corner?<br />
<div class="MsoNormal">
<b>The local market
traded in a range-bound mode last week while waiting for further developments
relating to the upcoming 13th General Election. All of our three model
portfolios performed in tandem with the overall broad market last week and
recorded a mild change of between -0.6% to +0.8% WoW. On a YTD total return
basis, all our three model portfolios have recorded positive returns as compared
to the -3.43% return of the FBMKLCI, beating the benchmark index by 474-627
bps. The THEMATIC portfolio continued to remain the top gainer (+2.84%)
followed by the GROWTH (+1.74%) and the DIVIDEND (+1.31%) yield portfolio. This
week, we expect the market to consolidate but with a downward bias. Based on
our technical reading, we believe that the market could otentially slide
further towards the 1,600 psychological level should it fail to hold the
immediate support level of 1,620. On top of that, there is a strong market rumour
that the parliament may likely be dissolved in this week. Should this news materialise,
the market could potentially trade lower by 1%-3% during the election campaign
period based on our study of the past three general elections. <o:p></o:p></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>A range-bound mode.</b>
Last week, the local market traded in a range-bound mode at between +0.4% to
-0.8% while waiting for further developments relating to the upcoming 13th
General Election. For the week under review, the FBMKLCI index was lower by
0.05% or 0.75 pts to settle at 1,626.89. The main index movers were SIME
(+RM0.19); MAYBANK (+RM0.14) and CIMB (+RM0.10). Buying interests in SIME
re-emerged after the previous week selldown by foreigners, which led the share
price to close by 2.1% WoW higher to RM9.19. The banking sector, meanwhile, was
cheered by the Bank Negara Malaysia statement that the authority was still
comfortable with the current bank lending to households, which suggested that
the possibility of the central bank introducing further tightening measures
would continue to remains low for now. On the US market, the DOW closed
relatively flat at 14,512.03 amid concerns on the Europe debt issue, which overshadowed
the better-than-estimated economic data that came out. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>THEMATIC Portfolio
remains the top gainer.</b> All of our three model portfolios were performed in
tandem with the overall broad market and recorded a mildly change in the overall
return last week. The THEMATIC Portfolio reported a -0.56% loss WoW but with an
unrealised profit of 2,366 or +2.84% on YTD basis. The lower WoW performance
was mainly led by PUNCAK (-2.6% to RM1.48) and MPHB (-2.9% to RM3.61). The
GROWTH Portfolio, meanwhile, has recorded a positive gain of +0.77% WoW,
bringing the YTD total return to RM1,149 or +1.74%. The DIVIDEND Portfolio’s
fund value rose by 0.1% or RM66 WoW, aiding the YTD total return advance to
1.31% or RM872. Note that, for a conservative purpose, we have yet to fully
investing the allocated amount of RM100k each in our model portfolios at this
juncture due to the uncertainly before the general election. Our current invested
ratios for the THEMATIC, GROWTH and DIVIDEND portfolios are 83.3%; 66.2%; and
66.4%, respectively. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Parliament likely to
be dissolved in this week?</b> We believe the market could become more volatile
should the Parliament be dissolved during the week as per market expectations. Based
on our study of the past three general elections, the FBMKLCI index tends to
fall by as much as an average of -2.3% during the election campaign period. Out
of which, the 12th GE experienced the worst performance of the three where the
benchmark index fell by as much as -2.9% during the election campaign period.
Thus, in view of the high uncertainty in the upcoming GE, we do not discount
that history may potentially repeat itself here. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Expecting the market
to consolidate but with a downward bias this week.</b> We believe the benchmark
index will likely to trade in a consolidation mode but with a downward bias
this week judging from the mixed technical indicators. The 1,620 level should
present some support for now. Should this level be taken out, the FBMKLCI could
potentially slide further towards the 1,600 psychological level. We believe
investors will be unwilling to take up major positions in the stock market this
week given the slew of speculations surrounding the parliament dissolution date
and general elections. Hence, gains could be capped and profit taking could be
potentially widespread, especially on the recent gainers such as Johor property
related companies like UEMLAND, TEBRAU, EKOVEST, etc.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Source: <a href="http://www.kenangaresearch.com/attachfile/252/252200On%20Our%20Portfolio%20-%20130325%20(Revised).pdf">Kenanga</a></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com1tag:blogger.com,1999:blog-6856158629331281108.post-90111319940372644792013-03-25T09:36:00.001+08:002013-03-25T09:36:32.810+08:00SapuraKencana Petroleum - 4Q13 Analyst Briefing Key Updates <br />
<div class="MsoNormal">
<b>We were at
SapuraKencana’s (“SKPETRO”) well-attended 4QFY13 analyst briefing last week.
The key takeaways were: 1) the main reasons for the lower margins in FY13 vs.
FY12; 2) details on its Berantai field contribution; 3) an update on the
Seadrill tender-rig acquisition; and 4) further details on its upcoming Brazil
Pipe-Lay Support Vessel (PLSV) prospect. Overall, management was satisfied by
its own progress post the merger between Sapuracrest and Kencana and is looking
forward to the potential benefits from the upcoming Seadrill tender rig
acquisition. We are maintaining our net profit forecast of RM744.2m for now
pending the completion of the acquisition, which will lead to higher earnings,
debts and the number of shares. We will also introduce our FY15 net profit after
the acquisition. We continue to like SKPETRO for its: 1) extensive service provisions,
which span from drilling to the EPCIC value chain; 2) domestic market dominance
and 3) increasing exposure to the international markets. We maintain our
OUTPERFORM call on the stock and our target price of RM3.82 based on a CY13 PER
of 26.5x. Recall, our target price of RM3.82 is based on 20x on implied CY13 of
19sen to accommodate the potential earnings accretion from the new rigs of
SKPETRO post its acquisition exercise with Seadrill. <o:p></o:p></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>SKPETRO's margin was
affected by the timing of recognition, one-off merger costs, Seadrill
acquisition ongoing costs and higher borrowings.</b> Management guided that the
lower YTD PBT margin (12.0% versus 12.4% in FY12), which fell despite the increase
in revenue, was mainly due to: (i) timing issues (where SKPETRO could only
recognise eight months of Kencana's earnings due to the merger accounting
method) and (ii) also due to other higher costs incurred i.e. the one-off
Sapuracrest and Kencana merger cost (RM54m recognised in 4QFY13), the Seadrill
acquisition cost of RM46m and a higher borrowings cost in the year given its aggressive
newbuilding scheme. The merger cost should not recur in FY14. However, there
will continue to be some Seadrill acquisition costs given that the exercise is
not completed as yet.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Berantai made maiden
contribution in 4QFY13.</b> We understand that the Berantai field made its
maiden contribution in 4QFY13 after having achieved its first-gas in Oct-12,
which also drove the higher EJV division’s revenue/profit in 4QFY13. Management
has guided for a full year contribution from FY14 onwards.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Updates on the
Seadrill tender-rig acquisition.</b> Management hopes to conclude the
acquisition by May-CY13, which would mean a nine-month contribution for FY14.
On the overall, management seemed excited about the acquisition as: 1) it
foresees that the business will expand SKPETRO’s global footprint (i.e. to
countries like Angola, Trinidad and Tobago) and 2) believes that the
applications for the tender-rigs could expand (i.e. beyond just the
shallow-water application), thus creating more opportunities for the group.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Source: <a href="http://www.kenangaresearch.com/attachfile/252/252204SKPETRO-130325-CU.pdf">Kenanga</a></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-62256355949984773992013-03-25T09:34:00.001+08:002013-03-25T09:34:53.526+08:00Plantation - Dorab Mistry turned less bearish on CPO Prices<br />
<div class="MsoNormal">
<b>According to Dorab
Mistry (director at Godrej International Ltd), CPO prices are expected to rise
to RM2,400 to RM2,700 ringgit ($770 to $865) per mt by the end of May due to
lower stocks level and output. He believes that Malaysia palm oil inventory
will fall below 2.0m mt in Jun-2013. We generally agree with Dorab Mistry’s
short term view as we are already bullish on near term CPO prices as we expect
exports to improve 14% MoM to 1.59m mt. In 2QCY13, we believe CPO prices could
improve up to RM2,800/mt. However, we do not think Malaysia palm oil inventory
will reach 2.0m mt as we believe it should reach the lowest level of 2.27m mt
by April 2013 before increasing slightly to 2.31m mt by June 2013. <o:p></o:p></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Despite our short
term bullishness on CPO prices, we reiterate an UNDERWEIGHT rating on the
plantation sector given that the consensus is still estimating an average 2013
CPO price of RM2880/mt (against ours at RM2500/mt). This should lead to another
earnings disappointment in the next earnings season in May-2013. Maintain
UNDERPERFORM calls on SIME (TP: RM8.82), IOICORP (TP: RM4.34), KLK (TP:
RM19.30), FGVH (TP: RM4.00), GENP (TP: RM7.60), IJMP (TP: RM2.75) and TAANN
(TP: RM2.84) due to the low CPO price outlook. Maintain MARKET PERFORM calls on
TSH (TP: RM2.00) and UMCCA (TP: RM6.70). Our only OUTPERFORM call is on PPB
(TP: RM15.00) as we expect it to benefit from Wilmar’s earnings recovery (resulting
from better margin in soybean crushing margin).<o:p></o:p></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Dorab Mistry turned
less bearish on CPO prices.</b> According to Dorab Mistry (director at Godrej
International Ltd), CPO prices are expected to rise to RM2,400 to RM2,700
ringgit ($770 to $865) per mt by the end of May due to lower stocks level and
output. He believes that Malaysia palm oil inventory will fall below 2.0m mt in
Jun-2013. We gather that his latest CPO prices projection has been less bearish
than his previous forecast made during 6-March-2013 in Kuala Lumpur (CPO prices
falling below RM2,200 from mid-April onwards). However, he maintained his
bearish view in 2H2013 and expects CPO prices to drop below RM2,000 after
August-2013 due to high production season, declining energy prices and strong
US Dollar. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>We are short term
bullish on CPO prices too.</b> We generally agree with Dorab Mistry’s short
term view as we are already bullish on near term CPO prices in March but do not
expect it to increase beyond RM2700/mt. Recall that in our last report on
12-March-2013, we already stated that Malaysia inventory could decline further
by 5% MoM to 2.31m mt in Mar-13. We reiterate our view that March exports
should increase by 14% MoM to 1.59m mt as palm oil demand should increase after
the winter season in the northern hemisphere ended last month in February. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
<b>However, we do not
think inventory will touch 2.0m mt</b>. We only expect inventory to fall to the
lowest level of 2.27m mt by April-2013 before increasing slightly to 2.31m mt
by Jun-2013. As inventory stays low in 2QCY13, we expect CPO prices to peak at
RM2800/mt. We think our more bullish CPO price outlook (against Dorab Mistry)
is due to our better outlook on crude oil prices. Despite our short term
bullishness on CPO, 2H13 outlook remains challenging when high production
season starts. However, we think that CPO prices should not fall below RM2,000
in 2H13. We believe that CPO prices bottom in 2H13 should be RM2,100/mt as US biodiesel
industry demand for palm oil biodiesel will be strong at such prices assuming
WTI Crude Oil stays above US$90/mt. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Reiterate
UNDERWEIGHT, looking ahead to another earnings disappointment in May-2013.</b>
As the consensus is still estimating 2013 average CPO price of RM2880/mt as compared
to the average CPO price of RM2310/mt in the first two months of 2013, we
believe that 1QCY13 earnings will likely to disappoint again.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Source: <a href="http://www.kenangaresearch.com/attachfile/252/252203Plantation-130325-SU.pdf">AmeSecurities</a></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-12489705175794157042013-03-25T09:29:00.002+08:002013-03-25T09:29:57.865+08:00Plantation Sector - Proposed accounting standard scrapped OVERWEIGHT<br />
<div class="MsoNormal">
- The Edge Financial Daily quoted KPMG as saying that two
accounting rules which would have an effect on Malaysian companies have been
scrapped. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- One of the accounting standards, which would have forced
Malaysian plantation companies to value living things such as oil palm trees,
will no longer be implemented. The accounting standard was supposed to be
implemented from 2014F onwards. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- This is positive for the plantation companies. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Implementing the accounting standard would have increased
the accounting cost and be a hassle for the plantation companies as they would
have to hire independent consultants to value the oil palm estates. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- The accounting standard would have also increased the
volatility of earnings in the profit and loss statement as fair value changes
in respect of biological assets would fluctuate according to the prices of
commodities. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Plantation companies listed in Singapore follow this
accounting standard. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Every year, the plantation companies would look at the
valuation of their oil palm estates and record the fair value changes
accordingly. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- The companies use discounted cash flow to value the oil
palm estates and some of the main assumptions used in the DCF method are CPO
prices, discount rate and FFB yield. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- During periods of high CPO prices, fair value changes in
biological assets would increase. When CPO prices are in the doldrums, fair
value changes in biological assets would fall. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- The fair value change in biological assets is a non-cash
flow item. It does not reflect the core profit of the plantation companies. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Last year, Muddy Waters LLC said that Olam International
was “aggressive” in reporting gains on biological assets. Subsequently, Carson
Block of Muddy Waters betted against the stock.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Source: <a href="http://www.amesecurities.com.my/gc/download/Plantation%20Sector%20130325.pdf">AmeSecurities</a></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-64653770270888589802013-03-25T09:28:00.002+08:002013-03-25T09:28:42.573+08:00Pavilion Reit - Limited upside, earnings upside have been priced in HOLD<br />
<div class="MsoNormal">
- We are downgrading Pavilion REIT (PREIT) to a HOLD, with
an unchanged fair value of RM1.65/unit, based on our DCF valuation, given
PREIT’s limited upside to its share price. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Following a company visit, we re-iterate our positive
stance on PREIT, underpinned by its asset quality and a growing middleclass.
This bodes well for PREIT’s growth. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Nearly 70% of NLA is due for renewal this year. Given that
this represents Pavilion Mall’s second rental cycle (first cycle in 2010) and
at early stages, we have factored in a 12% rental reversion. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- However, feedback from some retailers has indicated that
mall owners are requesting for sky-high rental reversions that are unjustified.
This may in turn suggest a possible softening in rentals in the near term. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Yet, as KLCC’s average rental is at c.RM25psf, we see room
for PREIT (average rental: RM18.80psf) to play catch-up. This is underpinned by
Pavilion Mall’s relatively young status and a long waiting-list of interested
retailers wanting a presence in the mall. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Footfall inched up 4% in FY12 contributed by Fashion
Avenue and a strong F&B and fashion mix, in our view. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Should Fahrenheit 88 be deemed fit as a yield-accretive acquisition
during an evaluation exercise in 4Q13, it will likely be funded via debt and
equity. Any injection will only materialise in FY14F. PREIT is not playing any
part in the repositioning of Fahrenheit 88’s tenant mix in an upcoming renewal
in 3Q. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Given the rather weak footfall at Fahrenheit 88 due to the
tenant mix, we believe in a turnaround under management hands, should the
acquisition materialises. This is underpinned by PREIT’s strong management
capability and experience in managing Pavilion Mall. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Based on our channel checks, retail REITs in town,
including PREIT, have acknowledged the lack of quality assets that are yield-accretive
for acquisitions. This somewhat limits the REITs’ growth, apart from
organically. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- As such, management is of the view that the sponsor would eventually
have to venture into greenfield shopping malls. PREIT is eyeing day-to-day
consumer malls in the Northern and Southern regions of Malaysia but not
Iskandar, Johor. This is largely because PREIT is targeting locals and prefers
malls located within city centres. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- We continue to like PREIT for its longer term growth
potential, underpinned by quality assets and a sizeable pipeline of potential assets
for injection. Dividend yields are decent at 4.3% and 4.7% for FY13F and FY14,
respectively, based on a 100% payout ratio.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Source: <a href="http://www.amesecurities.com.my/gc/download/Pavilion%20Reit%20130325.pdf">AmeSecurities</a></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-75446982707886211212013-03-25T09:22:00.002+08:002013-03-25T09:22:41.918+08:00Trading Stocks - 25 March 2013 - IJM | Genting | Glomac | Time Engineering | Tebrau Teguh | Sunway REIT | Censof | MK Land | <br />
<div style="background-color: white; font-family: sans-serif; font-size: 13px; line-height: 18px; margin-bottom: 1em; margin-top: 1em;">
<img alt="" height="640" src="https://research.osk188.com/images/19/DopU1603404246514fa1d31f15c.jpg" style="border: 0px; max-width: 100%; vertical-align: middle;" width="388" /></div>
<div style="background-color: white; font-family: sans-serif; font-size: 13px; line-height: 18px; margin-bottom: 1em; margin-top: 1em;">
<br />IJM may rise further after closing at a 6-month high. A position can be initiated if the stock closes above RM5.25, with a close below RM5.10 as stop-loss. The price target is RM5.65, with selling anticipated at RM5.50. Failure to get above RM5.250 will likely see the stock trade sideways. Supports lie at RM5.00 and a stronger one at RM4.80.</div>
<div style="background-color: white; font-family: sans-serif; font-size: 13px; line-height: 18px; margin-bottom: 1em; margin-top: 1em;">
<img alt="" height="640" src="https://research.osk188.com/images/20/eBBf230018299514fa1d349fae.jpg" style="border: 0px; max-width: 100%; vertical-align: middle;" width="384" /></div>
<div style="background-color: white; font-family: sans-serif; font-size: 13px; line-height: 18px; margin-bottom: 1em; margin-top: 1em;">
Genting’s downside risk rose after the stock closed below RM9.50 for 2 consecutive days. A trader may liquidate if the stock stays below RM9.50, with supports seen at RM9.30 and the round figure of RM9.00. However, buying could quickly return if the stock closes above RM9.63. the resistance levels are the prior highs of RM9.80 and RM10.10.</div>
<div style="background-color: white; font-family: sans-serif; font-size: 13px; line-height: 18px; margin-bottom: 1em; margin-top: 1em;">
Source: <a href="http://research.osk188.com/attachments/74/osk-report-trading-stocks_20130325_rhb-retail-research-JUgs1009160269514fa10a78ddf.pdf">RHB</a></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-63834864151927321982013-03-22T14:46:00.002+08:002013-03-22T14:46:30.629+08:00Banking Sector - Clearing the air over individual shareholding limit<br />
<div class="MsoNormal">
- The press recently
reported Bank Negara Malaysia (BNM) governor Tan Seri Zeti Akhtar Aziz as
confirming that the Financial Services Act (FSA) will not affect the
shareholdings of Public Bank (PBB), Hong Leong Bank (HLBB) and AMMB Group
Holdings (AMMB). <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- The FSA, which will
be enforced from mid-2013, has reiterated that the limit on individual shareholding
is 10%, which is the same limit under the Banking and Financial Institutions Act
(BAFIA). <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- To recap, Tan Sri
Teh Hong Piow’s stake in PBB is 24.1%. Tan Sri Quek Leng Chan’s effective stake
in Hong Leong Financial Group (HLFG) is 78.3%. HLFG in turns holds 63.5% in
HLBB. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- The governor said
that the FSA will not affect the shareholding in banks like PBB, HLBB and AMMB
as the stakes were held even before the BAFIA was implemented in 1989. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- The governor added
that the shareholding limit will affect those who acquired more than 10% after
the implementation of BAFIA. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- The FSA will
provide the central bank with more legal and enforcement powers in its actions
to enhance governance and regulation. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- We believe the
share prices of both HLBB and PBB are already reflecting expectations on the
existing shareholding structure to remain. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Thus, the
confirmation that the individual shareholders of PBB and HLBB are not required to
reduce their shareholding to a maximum of 10% under the FSA is likely in-line
with our and market expectations. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- However, the
confirmation is positive as it removes any further speculation over the possibility
of the individual shareholders of both banks being required to pare down their stakes,
post implementation of the FSA. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- We remain
overweight on the sector.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Source: <a href="http://www.amesecurities.com.my/gc/download/Banking%20Sector%20130322.pdf">AmeSecurities</a></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-2236571308793411752013-03-22T14:45:00.000+08:002013-03-22T14:45:09.164+08:00Public Bank - A slow 1Q<br />
<div class="MsoNormal">
- At our recent
company visit, PBB alluded to a slow loans growth in 1QFY12, but this is in-line
with the historical trend whereby loan demand tends to be softer due to the Chinese
New Year holiday season as well as a shorter working quarter. Nevertheless, PBB
remains confident of achieving its overall loans growth target of 11% to 12%.
Net interest margin is expected to compress by 10bps YoY in FY13F, in-line with
the earlier guidance of around 10bps to 12bps decline YoY for FY13F. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- For its residential
mortgage loans, about 70% of these are still considered to be within the mass
market segment, with loan values ranging between RM100k and RM500k. Loans less
than RM100k make up about 10% to 15% of its mortgages. Loans exceeding RM1mil
remain at a small proportion of its total loans, at less than 5%. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Its SME loans had
done well in the past one year, with small-and-medium sized enterprises (SMEs)
expanding 22.2% YoY in FY12. This was attributed mainly to its strong network
within the community, and fast and efficient service, rather than pricing, which
is positive for NIM. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Fee income ratio is
targeted to be slightly higher than the recent range of 20% to 21%. The company
is building up its trade finance business, targeted mostly at its SME customers
which are traditionally mainly in the shophouse financing segment. The company
also reiterated that asset quality remains stable, with a targeted credit cost
of 20bps for FY13F. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- With group common
equity ratio at 8.5%, and the bank entity level’s common equity ratio at 7.5%
as at end-FY12 (assuming no phase-in arrangements which is allowed under Bank
Negara’ final guidelines), the company expects capital to be sufficient in the medium
term. The company may consider a rights issue, by 2015 or possibly 2014, if a counter-cyclical
buffer is implemented in 2016. However, PBB reiterated that it will not be
considering any dividend reinvestment plan. Dividend payout is expected to be slightly
lower than the 45.3% in FY12, although the company targets to still increase overall
quantum of dividend for FY13F. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- From the meeting,
we now expect the 1QFY13 to be slightly lower than consensus’ net earnings of
RM4,189mil on an annualised basis, but this is in-line with a historically slow
1Q. A possible rights issue may materialise earlier, in 2014 rather than 2015. Maintain
HOLD.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Source: <a href="http://www.amesecurities.com.my/gc/download/Public%20Bank%20130322.pdf">AmeSecurities</a></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-6895745789277413802013-03-22T14:43:00.003+08:002013-03-22T14:43:35.285+08:00Bursa Malaysia - ASEAN Trading Link yet to see active participation<br />
<div class="MsoNormal">
- We re-iterate our
BUY recommendation on Bursa Malaysia Bhd (Bursa), with an unchanged fair value
of RM8.20/share, based on a PE of 26x FY13F earnings. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- The Wall Street
Journal (Asia Edition) yesterday reported that the ASEAN Trading Link, which went
live six months ago, has gained little traction among cross-border traders. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- We gather that
Bursa’s foreign retail trading volume has remained at lackadaisical ~400mil shares/month,
while average participation in the past 5 months was ~1% of total traded
volume. The Singapore Stock Exchange and Stock Exchange of Thailand do not
provide monthly figures. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- The link, which
provides a platform for retail investors to ride on the region’s growth opportunities,
currently connects the Malaysia, Singapore and Thailand bourses. These three markets
alone make up 70% of the ASEAN market capitalisation (USD1.6tril). We
understand that the Philippines and both of Vietnam’s bourses could be joining
the fray soon. No timeline has been set for the linkage of all 6 bourses in the
region. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Despite incentives
like capital-gains tax exemption for shares bought using the link and lower transaction
costs, retail investors are still not keen, citing reasons which include:- (1) unfamiliarity
with the foreign capital markets and its companies; (2) additional forex risk;
and (3) lack of integration in the rules and regulations front. Interest to
diversify is also low on their list as some investors believe the domestic
market provides amply investment opportunities. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Our previous talks
with management revealed that the alliance’s aim of improving the liquidity of the
region’s capital markets by positioning ASEAN “as an investable asset class” is
a mid- to long-term one. Its immediate goal is educating the investors through
roadshows. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- As stated in our
previous reports, we are neutral on this tie-up as:- (1) any positive
contribution from it will only be seen at the earliest in FY14/15, and (2) the
impact will only be felt by retail investors, which account for a small portion
of trading participation on Bursa (FY12: 23% vs. FY11: 26%). <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Having said that,
we are encouraged by Bursa’s bid to elevate its velocity (FY12: 28% vs. FY11: 33%)
by increasing retail participation, which has been dwindling YoY since its peak
in 2007 of 53%.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Source: <a href="http://www.amesecurities.com.my/gc/download/Bursa%20Malaysia%20130322.pdf">AmeSecurities</a></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-2411473971338883642013-03-22T14:41:00.003+08:002013-03-22T14:41:49.655+08:00SapuraKencana Petroleum - Core earnings on track to greater heights<br />
<div class="MsoNormal">
- We maintain our BUY
recommendation on SapuraKencana Petroleum (SapuraKencana), with an unchanged
fair value of RM3.70/share, pegged to an FY14F PE of 22x – on par with Kencana
Petroleum’s 2007 peak. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- The group’s FY13
core net profit of RM558mil (excluding 9MFY13 exceptional items of RM34mil)
came in within our earlier FY13 forecast of RM565mil and consensus estimate of RM568mil.
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- We understand that
there was some one-off cost in 4QFY13 arising from the acquisition of
Seadrill’s tender rigs, but the quantum is uncertain at this juncture pending
an analyst briefing later today. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Hence, we have
fine-tuned FY14F-FY15F net profits and introduce FY16F earnings with a growth
of 18% driven by fullyear contributions of 5 additional tender rigs currently under
construction. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Excluding the
RM42mil reversal of minority charge from the acquisition of the remaining 74%
stake in construction vessel QP2000 in 3QFY13, we estimate that the group’s
core 4QFY13 net profit fell 12% QoQ to RM124mil as the seasonal decline in
progress work from the offshore construction & installation activities was
partly offset by contributions from the group’s 50%-owned Berantai marginal
field project and fabrication activities. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Offshore
construction and subsea services accounted for half of the group’s FY13 pre-tax
profit, and fabrication, hookup & commission/offshore support vessels and
energy/joint ventures at 27% and 23%, respectively. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- We estimate that
SapuraKencana’s order book slid 15% QoQ to RM11bil currently from the quarterly
depletion, but this will surge to RM16bil (see Chart 3-4 for breakdowns) with
the inclusion of the RM4.8bil built-in charter contracts for the 16 new tender
rigs which will be acquired from Seadrill. The group still expects to secure
RM5bil-RM6bil annually, with potential tenders of over RM30bil. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
- Over the next few
months, we still expect a higher magnitude of newsflow for hook-up,
construction and commissioning (HUCC) works vs. pure fabrication jobs. The
tenders which the group is bidding for include the RM8bil-RM10bil PanMalaysian
umbrella HUCC contract and 6 new flexible pipelay construction vessel charters
from Petrobras.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
</div>
<div class="MsoNormal">
- SapuraKencana’s
valuations are currently attractive at an FY14F PE of 18x, which is at an 18%
discount to Kencana PP 12247/06/2013 (032380) Petroleum’s peak in 2007.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Source: <a href="http://www.amesecurities.com.my/gc/download/SapuraKencana%20Petroleum%20130322.pdf">AmeSecurities</a></div>
<br />
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-67571023788672343772013-03-22T14:29:00.004+08:002013-03-22T14:29:51.345+08:00Trading Stocks - 22 March 2013 - Sunway | Poh Huat Resources | Ahmad Zaki | Favelle Favco | KUB Malaysia | Ekovest | FACB Industries | Lein Hoe Corp <br />
<div style="background-color: white; font-family: sans-serif; font-size: 13px; line-height: 18px; margin-bottom: 1em; margin-top: 1em;">
<img alt="" height="640" src="https://research.osk188.com/images/11/wUdi1844858676514ba9d818bbc.jpg" style="border: 0px; max-width: 100%; vertical-align: middle;" width="389" /></div>
<div style="background-color: white; font-family: sans-serif; font-size: 13px; line-height: 18px; margin-bottom: 1em; margin-top: 1em;">
Sunway should continue scaling higher after holding on to the gains of Wednesday. A purchase can be made if the stock stays above RM2.80, with a close below RM2.72 as a stop-loss. The price target is RM3.30, if the psychological RM3.00 is broken. Failure to stay above RM2.80 should see the stock move sideways, with support seen at RM2.60 and RM2.50. </div>
<div style="background-color: white; font-family: sans-serif; font-size: 13px; line-height: 18px; margin-bottom: 1em; margin-top: 1em;">
<img alt="" height="640" src="https://research.osk188.com/images/12/G7iV485515958514ba9d845a8a.jpg" style="border: 0px; max-width: 100%; vertical-align: middle;" width="388" /></div>
<div style="background-color: white; font-family: sans-serif; font-size: 13px; line-height: 18px; margin-bottom: 1em; margin-top: 1em;">
Poh Huat may rise further after closing the highest in more than a year. A position can be initiated if the stock stays above RM0.47, with a close below RM0.46 as a stop-loss. The price target is at RM0.585, with resistance also expected at RM0.525. A close below RM0.46 will likely see the stock trade sideways, with strong support at RM0.40.</div>
<div style="background-color: white; font-family: sans-serif; font-size: 13px; line-height: 18px; margin-bottom: 1em; margin-top: 1em;">
Source: ;<a href="http://research.osk188.com/attachments/59/osk-report-trading-stocks_20130322_rhb-retail-research-RdqI1621153887514bb170a1343.pdf">RHB</a></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-63908414351564979382013-03-22T09:48:00.003+08:002013-03-22T09:48:58.099+08:00SapuraKencana Petroleum - No Surprises<br />
<div class="MsoNormal">
<b>We maintain our Buy
call on SapuraKencana with an unchanged fair value of RM3.76. We remain
positive on SapuraKencana’s earnings outlook, underpinned by its extensive
oilfield service capabilities, which allows it to undertake major oilfield
services contract, overseas and locally. Completion of its tender rig business
would provide further earnings upside of approximately 18-20% in FY01/14. The
deal is expected to be completed by 2Q CY2013. SapuraKencana is our top pick
for big cap O&G service providers. <o:p></o:p></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Within expectations.</b>
SapuraKencana’s 4QFY01/13 core net profit of RM123.9m brought full-year FY01/13
core profit to RM482.7m. This is in line with our and consensus estimates,
accounting for 97% and 98% of our and consensus estimates respectively. Revenue
grew by 44.1%, driven mainly by its offshore construction and subsea division
(OCSS).<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Margins were weaker.</b>
PBT margins contracted by 7.4%-pts yoy, although this is was mainly due to: 1)
one-off merger costs of approximately RM130-140m; and 2) higher interest
expense due to the debt undertaken to finance the merger. We expect margins to
recover in FY01/14, as the synergies of the merger are realised as
SapuraKencana continues to execute more contracts. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Expect more Malaysian
contracts in FY01/14.</b> We believe SapuraKencana is one of the main
beneficiaries of Petronas’ 5-year RM300bn capex commitment due to its scale and
capabilities. Furthermore, given that it has achieved first gas for Berantai,
we expect it to bid for more marginal field RSC’s. Petronas is expected to award
more RSC’s this year as it only awarded one (KBM cluster) in 2012. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Forecasts.</b> No
change to our earnings forecasts pending its analyst briefing later today. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Investment case.</b>
Our fair value is unchanged at RM3.76, based on 21x pro-forma FY01/14.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Source: <a href="http://research.osk188.com/attachments/64/osk-report-sapurakencana_22march2013-SSkS1968875557514bb7709bcff.pdf">RHB</a></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-38260252954737183212013-03-22T09:29:00.001+08:002013-03-22T09:29:34.577+08:00Muhibbah Engineering - Three awards alone in March<br />
<div class="MsoNormal">
<b><span lang="EN-US">News</span></b><span lang="EN-US"> Muhibbah announced yesterday that it had
received a ship building contract award worth RM216m from Jasa Merin (Malaysia)
Sdn Bhd, a 70%-owned subsidiary of Silk Holdings Berhad. At the same time, its
62%-owned subsidiary Favelle Favco also announced four crane orders totalling
up to RM78.8m. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Comments</span></b><span lang="EN-US"> The
contract awards and caught us by surprised on their timings as the contract
awards all came within a month. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> We are pleased with the contract flows from
Muhibbah as the above will be Muhibbah’s second and third contract awards for
the month of March itself, bringing its total wins alone for the month to
RM496.8m, which made up 25% of our RM2.0b total order book replenishment
assumption for FY13. To recap, MRT Co. had announced earlier in the month that
it had also secured a contract worth RM202m for the design, supply,
installation, testing and commissioning of noise barriers and enclosures
(Package V1-V8) to Muhibbah-SV-Samjung Joint Venture (JV). <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> Based on its historical track record, we
expect the operating margin for its ship building award to hover at about 18%-20%
with an estimated order book burn rate of 24-30 months. To recap, Muhibbah was
awarded a similar contract sum of works by Jasa Merin back in Dec-08 and the
delivery of the vessels took place in 2012. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> Favelle’s cranes’ order of RM78.8m is likely
to have a shorter burn rate of 12 months with an operating margin of 10%-12%.
We expect 75% of the purchase orders to contribute positively to its FY13
earnings with the balance in FY14. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> On the other hand, there will not be any
earnings contribution from on the RM202m MRT Co contract award in the near term
as we understand that works on noise barriers and enclosures on package V1-V8
can only be executed once the elevated portion from V1-V8 is completed.
However, we are waiting for more details from Muhibbah as there has been no
formal announcement by the company on the project award yet. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Outlook </span></b><span lang="EN-US"> We
believe that given that it had already made full provision for its potential
liabilities in Asian Petroleum Hub (“APH”) in FY12, Muhibbah is now set to put
the dampening issue behind and ride on new positive contract flows after GE13. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Forecast </span></b><span lang="EN-US"> There
are no changes in our earnings estimates as the abovementioned contract awards
fall within our order book replenishment assumption of RM2.0b. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Rating</span></b><span lang="EN-US"> Upgrade to OUTPERFORM<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> We are upgrading our recommendation on
Muhibbah from a MARKET PERFORM to an OUTPERFORM given the positive sentiment
likely for the stock as it moves forward from the APH issue. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Valuation </span></b><span lang="EN-US"> We have
increased our Target Price on Muhibbah to RM1.46 from RM0.86 as we removed the
APH provision discount, which was amounted to RM0.60/share, from our SOP
valuation given that Muhibbah books are now clean after APH was fully provided
for. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Risks </span></b><span lang="EN-US"> Delays
in project execution and a spike in building material prices.<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-US">Source: <a href="http://www.kenangaresearch.com/attachfile/252/252188MUHIBAH-130322-QB.pdf">Kenanga</a></span></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-64041100600374728632013-03-22T09:27:00.003+08:002013-03-22T09:27:30.539+08:00Highlights / Stock Picks of the Day - Plenitude Berhad ("PLENITU") – Not Rated<br />
Earlier this month (2nd March), wire news reported that PLENITU had entered into a sale and purchase agreement with Arabayu Sepakat Sdn Bhd in a proposal to dispose of 15 parcels of freehold land for RM49.2m cash. The news was well received by the market, and the share price had over the past three weeks gained 22 sen or 13% to yesterday's closing price of RM1.95. Chart-wise, PLENITU formed a "Bullish Marubozu" candlestick yesterday, following a week-long pause in the recent rally. In fact, the channel resistance has also been breached, and we believe that the bullish move effectively signals a continuation of the uptrend. Should the follow-through buying contunue, we reckon that the share price could<br />
potentially rally towards the RM2.10 projected target. Meanwhile, the RM1.90 resistance has now turned support.<br />
<br />
Source: <a href="http://www.kenangaresearch.com/attachfile/252/252187Technical-PLENITU-130322.pdf">Kenanga</a><br />
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-37562637431446916862013-03-22T09:26:00.001+08:002013-03-22T09:26:46.613+08:00SapuraKencana Petroleum - 4Q13 within expectations<br />
<div class="MsoNormal">
<b><span lang="EN-US">Period</span></b><span lang="EN-US"> 4Q13/12M13 <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Actual vs. Expectations</span></b><span lang="EN-US"> The 4Q13 core net profit of RM123.9m brought
the core FY13 net profit to RM482.9m. This was within our expectations at 97.3%
of our full year net profit estimate of RM496.3m. However, it was below (at
85%) the consensus expectation of RM568.2m. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> The core net profit excludes the RM42m one-off
gain adjustment (recognised in 3Q13) arising from the additional investment in
Quippo-Prakash. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> Note that we have included Kencana Petroleum’s
estimated 12MFY12 earnings to arrive at our SKPETRO’s 4QFY12 and 12MFY12
figures for a more meaningful YoY comparison and analysis. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Dividends</span></b><span lang="EN-US"> No
dividend was declared as expected. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Key Results Highlights</span></b><span lang="EN-US"> QoQ, the revenue fell (-11.6%) mainly due to
lower offshore construction and subsea services (OCSS) works in the quarter.
The net profit was also down (-12.1%) mainly due to weaker margins from all its
divisions, mainly from OCSS. The sluggish showing within the quarter is
expected as the company’s offshore operations are seasonally weaker during the
monsoon season.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> YoY, while the revenue was up (77%), net
profit was down (7.8%) mainly due to: 1) a higher interest cost and 2) lower
margins at the Energy and Joint Ventures (EJV) division due to more manpower
hiring. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Outlook </span></b><span lang="EN-US"> SKPETRO’s strong presence and scale in the
domestic EPCIC market both domestically and globally makes it a prime candidate
for securing further contract wins.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> The impending Seadrill asset injection is
expected to increase the group’s net profits further. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Change to Forecasts </span></b><span lang="EN-US"> We are maintaining our earnings estimates for
now pending the company’s analyst briefing tomorrow. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Rating</span></b><span lang="EN-US"> MAINTAIN
OUTPERFORM <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Valuation </span></b><span lang="EN-US"> Maintaining our fair value of RM3.82 based on
an implied targeted CY13 PER of 26.5x. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> Recall that we had tactically raised our
target price earlier to accommodate the potential earnings accretion from the new
rigs of SKPETRO post its acquisition exercise with Seadrill. The premium
valuation accorded to the stock (versus 15.0x for the sector average and 18.0x
for MMHE) is due to its significant domestic market dominance and service scale
range. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Risks </span></b><span lang="EN-US"> 1) High
capex plans for the company could strain its growth prospect and 2) delay in
contract executions could result in lower than expected earnings.<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-US">Source: <a href="http://www.kenangaresearch.com/attachfile/252/252186SKPETRO-130322-4Q13RN.pdf">Kenanga</a></span></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-29073797409202303682013-03-22T09:24:00.002+08:002013-03-22T09:24:34.289+08:00UMW Holdings - Secures contract from PetroVietnam<br />
<div class="MsoNormal">
<b><span lang="EN-US">News </span></b><span lang="EN-US"> UMW
Standard Drilling Sdn Bhd (UMWSD), a wholly owned unit of UMW Holdings has
secured a contract from PetroVietnam Drilling & Well Services Corporation
(PV Drilling). <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> UMW would provide the Naga 2 rig and related drilling
services to PetroVietnam Drilling to drill wells for the end client, Hoang Long
Joint Operating Company. The UMWSD-PV Drilling contract is for a duration of
six months with an option for another six months. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> NAGA 2 is a premium independent-leg cantilever
jack-up rig that has a drilling depth capability of 30,000 feet and has a rated
operating water depth of 350 feet. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Comments</span></b><span lang="EN-US"> At the
moment, NAGA 2 is operating in Indonesia, serving its contract with HESS
(Indonesia-Pangkah) Limited, which is expected to end in April 2013. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> Based on UMW's press release, NAGA 2 will be moved
to the Vietnam waters in May 2013 after completing its contract in Indonesia. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Outlook </span></b><span lang="EN-US"> We
expect UMW Toyota and Perodua to retain their leadership in the non-national
and national passenger car segments respectively. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-US"> Re-rating catalysts would include: (i)
stronger-than expected vehicle sales and (ii) the listing of its Oil & Gas
unit. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Forecast</span></b><span lang="EN-US"> There
were no financial details revealed in the press release. As such, we are
leaving our FY13-14 forecasts unchanged for now pending further guidance from
management. However, based on NAGA 3’s charter rate of USD145k/day (which was obtained
in 2012) and the short duration of 6 months, we expect the profit contribution
to be small. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Rating</span></b><span lang="EN-US"> Maintain
MARKET PERFORM<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US"> We are maintaining our MARKET PERFORM rating
on the stock at this juncture even though the share price has already rallied
above our target price. However, our target price is currently under review for
a possible upgrade on valuation grounds. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Valuation</span></b><span lang="EN-US"> Our
target price of RM12.37 which is based on 14.0x FY13 EPS is currently under
review. At the moment, the PE multiple of 14.0x applied on UMW is lower than
the auto sector’s peers’ average range of 15.5x-16.0x. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Risks</span></b><span lang="EN-US"> Uncertainty from the upcoming General Election
may weaken consumer sentiments.<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-US">Source: <a href="http://www.kenangaresearch.com/attachfile/252/252185UMW-130322-QB.pdf">Kenanga</a></span></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-25725305824134261652013-03-21T09:51:00.002+08:002013-03-21T09:51:42.376+08:00Banking - 2012 Financial Stability And Payment Systems Report Highlights<br />
<div class="MsoNormal">
<b><span lang="EN-US">We are keeping our Overweight stance on the
sector. Despite the further rise in household indebtedness, BNM appears
comfortable with bank lending to households and is unlikely to introduce
further tightening measures for now, in our view. The new Financial Services
Act will further expand BNM’s reach to entities that it does not currently
regulate and is potentially a game changer ahead, we believe. <o:p></o:p></span></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Household indebtedness rose further to 80.5% of
GDP in 2012</span></b><span lang="EN-US">, as
compared to 75.8% in 2011. Nevertheless, BNM appeared comfortable with bank
lending to households, as the bulk of the loans were for the purchase of
assets. However, the non-bank financial institutions (NBFI) continued to enjoy
rapid credit expansion, driven by the growth in personal loans. We believe the
Financial Services Act could be a game changer ahead for the NBFIs that are
currently outside the purview of BNM. The new legislation will come into effect
mid-2013 and empowers BNM to impose regulations on entities that it currently
does not regulate. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Residential property prices continue to rise
but further measures unlikely for now.</span></b><span lang="EN-US"> BNM believes the upward trend in residential
property prices is mainly a reflection of supply-demand dynamics, rather than
financial factors. Other contributing factors include demographic changes and
rate of urbanisation. Measures to address the rising house prices include the
Government’s efforts to increase the supply of affordable houses while
pre-emptive measures introduced in 2010 appear to have helped moderate
investment activities. For now, we do not expect BNM to introduce further
measures on this front. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Maintain Overweight stance on sector</span></b><span lang="EN-US">. Our Overweight stance is
unchanged. Our top picks for the sector are Maybank and Public Bank, while we
advocate a “buy on weakness” strategy for CIMB, pending the general election.<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-US">Source: <a href="http://research.osk188.com/attachments/50/osk-report-banks-20130321-b69B881630367514a6445eab40.pdf">RHB</a></span></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-46602919784376229602013-03-21T09:40:00.001+08:002013-03-21T09:40:13.034+08:00Kuala Lumpur Kepong - Expanding Downstream Aggressively<br />
<div class="MsoNormal">
<b><span lang="EN-US">KLK remains a solid, well-focused plantation
company that we like, but valuations are too rich, in our opinion. Although it
would suffer as a result of lower CPO prices, we believe this would be somewhat
offset by improved margins at its downstream operations due to its integrated business
model. KLK’s new and expanded downstream facilities coming on stream sometime
in CY13 would also help mitigate the effect of lower CPO prices on its upstream
business</span></b><span lang="EN-US">. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Key visit highlights</span></b><span lang="EN-US"> from our recent meeting with Roy
Lim, KLK’s group plantations director: (1) Impressive FFB production growth so
far, but expected to moderate; (2) Some forward sales done for 1QFY09/13, but
not much left to be unwound; (3) Bearish view on prices proven right so far;
(4) Leveraging on price gap between spot and futures prices on MDEX; (5)
Production costs expected to fall slightly yoy; (6) New planting on track in
Indonesia, no detailed plans for PNG land yet; (7) CPO feedstock supply important
factor for KLK’s new Indonesian refineries; and (8) Oleochemical expansions in
Indonesia. Germany, Malaysia and China. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Expanding downstream capacities aggressively.</span></b><span lang="EN-US"> With CPO prices on a downtrend, KLK
is seemingly focusing more on its downstream operations at this juncture. It is
on track to complete its three refineries and one oleochemical plant in Indonesia
by end-CY13, while it would also complete expansions at its existing oleochemical
facilities in Malaysia, Germany and China within this CY13. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Forecasts and Investment case.</span></b><span lang="EN-US"> We have revised our forecasts up by
1-6% for FY09/13-15. Post-earnings revision, we have raised our SOP-based fair
value for KLK to RM22.00 (from RM21.80). No change to our Neutral rating.
Although KLK would suffer as a result of lower CPO prices, we believe this
would be somewhat offset by improved margins at its downstream operations due
to its integrated business model. KLK’s new and expanded downstream facilities
coming on stream sometime in CY13 would also help mitigate the effect of lower
CPO prices on its upstream business.<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US"><br /></span></div>
<div class="MsoNormal">
Source: <a href="http://research.osk188.com/attachments/46/osk-report-klk-0313-zjwA870183533514a61c8dfc33.pdf">RHB</a></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-75972458043181759252013-03-21T09:38:00.002+08:002013-03-21T09:38:20.470+08:00Glomac - Earnings Growth Sustaining Dividend<br />
<div class="MsoNormal">
<b><span lang="EN-US">We maintain our Neutral rating with a fair
value of RM0.93. 3QFY13 results came in within expectations. Glomac secured
RM136m sales in 3QFY13, mainly contributed by the township projects. This has
boosted unbilled sales to RM827m and YTD property sales to RM519m, well within
our expectation. A 3 sen dividend was declared, and we expect a 3.5 sen final dividend.
Our forecast DPS of 6.5 sen translates into a gross yield of 6.6%. <o:p></o:p></span></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Within expectations.</span></b><span lang="EN-US"> Glomac’s 3QFY13’s results came in
within expectations. Earnings were mainly from the progress billings of Glomac
Damansara, Reflection Residences, Bandar Saujana Utama and Saujana Rawang.
Compared to 10% sequential growth, 9MFY13 PBT contracted 5%, as FY12 earnings
were lifted by the one-off RM9m gain from the disposal of a warehouse in
Thailand, as well as the cost savings arising from the completion of Glomac
Tower last year. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">9M RM519m sales.</span></b><span lang="EN-US"> Glomac achieved RM136m sales in 3QFY13,
compared to RM171m sales in 2QFY13. The township projects such as Saujana Utama
and Saujana Rawang are the key contributors, making up more than half of the
total. We expect Glomac to end the year with RM750-800m sales. The recent
booking for the launch of Lakeside Residences will be converted into sales in
4QFY13. Response for this new township project in Puchong has been encouraging.
The first two phases were fully sold within a day through balloting process.
The next phase comprising 75 units terraces will be launched in the next
weekend. Selling prices have seen a gradual step-up of about 5-10% by phases.
The terraces in the coming launch will be priced at about RM800k. Meanwhile,
sales at Glomac Centro, comprising 54 units shop offices and 344 units serviced
apartments, were improving gradually with the latest take-up rate at 51%, after
the connectivity is enhanced. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Forecasts.</span></b><span lang="EN-US"> Unchanged. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Investment case.</span></b><span lang="EN-US"> As the general election is getting nearer, we
maintain our Neutral rating on the stock and fair value of RM0.93 unchanged,
based on 35% discount to RNAV.<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-US">Source: <a href="http://research.osk188.com/attachments/47/osk-report-glomac-3qfy13-21032013-t6qM118378010514a626f63ba9.pdf">RHB</a></span></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-89887835126565021602013-03-21T09:36:00.001+08:002013-03-21T09:36:48.976+08:00E&O Berhad - Mitsui Entering The Mews<br />
<div class="MsoNormal">
<b><span lang="EN-US">E&O and Mitsui, Japan’s largest property
company, are entering into a 51:49 JV to develop The Mews in the KL city
centre. The equity contribution of RM41.3m from Mitsui valued the 5,221 sqm
land at RM1,500 psf, which is deemed reasonable. We are positive on the JV, as
the closer collaboration with Mitsui will make the marketing of the project
easy. E&O will be able to tap on Mitsui’s strong high net worth clientele. <o:p></o:p></span></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">The JV.</span></b><span lang="EN-US"> Both E&O and Mitsui will now jointly
develop The Mews, which is a RM400m GDV project located at Jalan Yap Kwan Seng.
The equity contribution of RM41.3m from Mitsui valued the land at RM1,500 psf,
which is reasonable and not far from valuer’s valuation of RM1,513 psf. The
Mews comprises 256 units of serviced apartments with unit size ranging 922 sqf
to 2,623 sqf, and it is expected to be launched in 2Q. Indicative pricing is
about RM1,500 psf, which is comparable to some of the ongoing projects within
the KLCC enclave. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Mitsui to make marketing easy.</span></b><span lang="EN-US"> We are positive on the JV, as
Mitsui will make marketing easier and help accelerate the take-up of The Mews.
The JV signifies the potential long-term partnership that E&O could
establish with Mitsui as this marks a step forward from the earlier marketing
collaboration that was signed in 2011. Since the first collaboration, Japanese
buyers have now become the second largest segment in E&O’s foreign buyers’
profile. E&O has been conducting marketing roadshow together with Mitsui in
overseas. Tapping on Mitsui’s current clientele of 170k, E&O at the same
time is able to cross sell its other projects such as Quayside Andaman as well
as the upcoming Integrated Wellness Capital. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Forecasts.</span></b><span lang="EN-US"> No change in our FY13 core net profit
forecast. E&O is expected to realise a one-off gain of RM3.45m arising from
the JV. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-US">Maintain Trading Buy.</span></b><span lang="EN-US"> Valuations are largely unchanged
after we adjust our RNAV estimate to reflect the JV and the disposal gain. The
key catalyst for the stock is still the crystalisation of STP 2, which is
expected to happen after the general election. We keep our fair value at
RM2.08, based on 40% discount to RNAV.<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-US"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-US">Source: <a href="http://research.osk188.com/attachments/48/osk-report-e-o-mews-mitsui-21032013-pdf-a-jQUa721485124514a6332f0753.pdf">RHB</a></span></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-58030031637242973202013-03-21T09:34:00.002+08:002013-03-21T09:34:21.646+08:00Multi-Purpose Holdings - Most of previous conditions are the same HOLD<br />
<div class="MsoNormal">
<span lang="EN-US">- Multi-Purpose
Holdings Bhd (MPHB) announced that Bank Negara has approved its demerger
exercise with revised conditions. For example, prior approval from Bank Negara
is required before MPHB Capital provides any form of assistance to the
non-financial services units in the group. <o:p></o:p></span></div>
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<span lang="EN-US">- Other
conditions stipulated in Bank Negara’s approval letter dated 21 December 2012
remain unchanged. <o:p></o:p></span></div>
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<span lang="EN-US">- We are
neutral on this development as Bank Negara’s previous conditions are still the
same. <o:p></o:p></span></div>
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<span lang="EN-US">- The
previous conditions include requiring MPHB Capital to rationalise its
non-financial services businesses within three years from the date of the
completion of the demerger exercise and requiring MPHB Capital to obtain
approval of Bank Negara before paying dividends. <o:p></o:p></span></div>
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<span lang="EN-US">- Also,
MPHB Capital has to comply with the individual shareholding limit of not more
than 10% within five years from the date of the completion of the demerger
exercise or by the effective date of the Financial Services Act 2012, whichever
is earlier. <o:p></o:p></span></div>
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<span lang="EN-US">- This
means that there is a possibility that MPHB Capital would have to carry out a restructuring
exercise in respect of its property assets. <o:p></o:p></span></div>
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<span lang="EN-US">- We reckon
that the new entity might have to divest or spin-off its property assets to rationalise
the division within three years as per Bank Negara’s conditions. <o:p></o:p></span></div>
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<span lang="EN-US">- In
addition, Tan Sri Dato’ Surin would have to reduce his stake in MPHB Capital to
below 10% within five years from the date of the completion of the demerger
exercise. We believe that this is because Tan Sri Dato’ Surin’s stake in MPHB
was acquired after the implementation of the Banking and Financial Institution
Act in 1989. <o:p></o:p></span></div>
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<span lang="EN-US">- According
to MPHB’s circular dated 9 November 2012, Tan Sri Dato’ Surin would have an estimated
indirect stake of 32.94% or 235.5mil shares in MPHB Capital after the demerger exercise.
<o:p></o:p></span></div>
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<span lang="EN-US">- We
maintain a HOLD on MPHB. Due to Bank Negara’s conditions and the Securities Commission’s
requirement that the group updates the valuation of its properties, there are uncertainties
in respect of MPHB’s demerger exercise.<o:p></o:p></span></div>
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<span lang="EN-US"><br /></span></div>
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<span lang="EN-US">Source: <a href="http://www.amesecurities.com.my/gc/download/Multi-Purpose%20Holdings%20130321.pdf">AmeSecurities</a></span></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-68185762559558062532013-03-21T09:32:00.003+08:002013-03-21T09:32:55.736+08:00Malayan Banking - Clear market leadership in Islamic finance HOLD<br />
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<span lang="EN-US">- We are
maintaining our HOLD rating on Malayan Banking Bhd (Maybank), with an unchanged
fair value of RM10.20/share. This is based on an ROE of 14.0% FY13F, which
translates into a fair P/BV of 1.9x. <o:p></o:p></span></div>
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<span lang="EN-US">- Maybank
recently hosted an Investor Luncheon Talk on Maybank Islamic Bhd (Maybank
Islamic). <o:p></o:p></span></div>
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<span lang="EN-US">- Islamic
finance is one of Maybank’s key strategic pillars. Its vision is to be a
regional financial services leader by 2015. <o:p></o:p></span></div>
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<span lang="EN-US">- Maybank
Islamic has maintained its leadership position in both financing and deposit.
It has the highest market share in financing at 26.2%, while market share of deposit
is at 23.2% as at end-FY12 for the domesticmarket. Its market share of assets is
at 22% overall, while it estimates that the next largest competitor is at 16%. <o:p></o:p></span></div>
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<span lang="EN-US">- Maybank
Islamic now contributes about 30.6% of the total overall domestic financing for
the group. Thus, Maybank Islamic is on track to achieve its target of onethird
contribution to the group’s domestic loans by FY15F. <o:p></o:p></span></div>
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<span lang="EN-US">- At the
pre-tax level, Maybank Islamic’s profit had risen to RM1.19bil in FY12, from
RM953mil in FY11. <o:p></o:p></span></div>
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<span lang="EN-US">- Domestic
penetration for Islamic products is high. Maybank Islamic estimates that about
40% to 45% of its domestic Islamic loan customers and about 50% of its domestic
deposit customers are non-Muslims. <o:p></o:p></span></div>
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<span lang="EN-US">- In terms
of industry penetration, it estimates Islamic financing contributed 29% of
total financing in FY10. Maybank Islamic said Islamic financing is estimated to
account for 40% of total financing by 2020, according to Bank Negara Malaysia. <o:p></o:p></span></div>
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<span lang="EN-US">- There is
strong growth potential in Indonesia. The total Islamic loans now contribute
about 5% to 6% of total industry loans in Indonesia. Maybank’s Indonesian subsidiary
Bank Internasional Indonesia (BII)’s Islamic loans now comprise about 4% of
total loans. <o:p></o:p></span></div>
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<span lang="EN-US">- We reckon
that Maybank Islamic has done well given its dominant leadership position. This
is due to Maybank Islamic leveraging on its overall domestic branch network,
besides providing end-to-end solutions in its recent global wholesale banking
deals.<o:p></o:p></span></div>
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<span lang="EN-US">Source: <a href="http://www.amesecurities.com.my/gc/download/Malayan%20Banking%20130321.pdf">AmeSecurities</a></span></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0tag:blogger.com,1999:blog-6856158629331281108.post-87044824489879066342013-03-21T09:31:00.002+08:002013-03-21T09:31:19.117+08:00Parkson Holdings - China a dampener in the near term HOLD<br />
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<span lang="EN-US">- We are
re-initiating coverage on Parkson Holdings Bhd (PHB), with a HOLD at our fair
value of RM4.43/share, based on a sum-of-parts valuation for FY14F. <o:p></o:p></span></div>
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<span lang="EN-US">- Over the
past year, PHB has rapidly expanded into China and Southeast Asia via its
respective 52%-owned and 68%-owned listed-subsidiaries, Parkson Retail Group
(PRG) and Parkson Retail Asia (PRA). PRA has further expanded into Southeast
Asia’s least developed markets – Vietnam, Sri Lanka, Myanmar and Cambodia –
following its foray into Indonesia in 2011. <o:p></o:p></span></div>
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<span lang="EN-US">- On the
revenue front, PHB is driven by China (66%), followed by Malaysia (26%) and
Indonesia (4%). China and Vietnam have been adversely impacted by slower
economic growth, resulting in weak consumer spend. <o:p></o:p></span></div>
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<span lang="EN-US">- China’s
SSSG has hit historical lows, with contractions of 1% and 2% in 1QFY13 and
1HFY13, respectively. There, we believe, were largely attributed to
intensification of competition among China-based retailers (including Golden
Eagle and Intime). There appears to be a footfall shift towards more appealing
malls amid their proliferation in numbers. <o:p></o:p></span></div>
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<span lang="EN-US">- Despite
efforts to improve merchandising mix and establishment of an ecommerce portal
to circumvent the slowdown in SSSG, the impact of these efforts is too early to
gauge. Parkson undergoes facelifts once every 4-5 years in order to maintain
footfall momentum. <o:p></o:p></span></div>
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<span lang="EN-US">- All in,
we opine management’s guidance of a mid-single digit SSSG in FY13 may not be
achievable. We are mainly uncertain about China’s turnaround in SSSG, given
that the key issue stems from a more competitive landscape. We believe China’s
3Q SSSG growth would remain flat at best, and any recovery will be gradual.
Expansion will be at a slow pace, at 5 new stores per annum. <o:p></o:p></span></div>
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<span lang="EN-US">- PRA will
continue to expand its network in Indonesia based on a dualbranding strategy
(Parkson and Centro). The recent acquisition of Ordel is deemed as a strategic
platform for PRA to further expand into the larger Indian sub-continent.
Underpinned by stable recurring income, PHB aims at a higher ratio of
self-owned properties, moving forward. <o:p></o:p></span></div>
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<span lang="EN-US">- For
FY13F, we project a healthy SSSG at 5% for Malaysia and Indonesia, riding on
stable consumer spending. This should cushion a muted outlook in China and
Vietnam given the near-term cyclical SSSG that is in negative territory. <o:p></o:p></span></div>
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<span lang="EN-US">- FY13F-FY15F
growth will be driven by an enlarged network of outlets – China (FY13F: +8 and
FY14F: +5) and Southeast Asia (FY13F: +7 and FY14F: +8), coupled with the foray
into Myanmar and Cambodia. Our annual new store assumption is at two for each market.
<o:p></o:p></span></div>
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<span lang="EN-US">- On a more
positive note, the stock is a great play in the Asian consumer sector. Balance
sheet is healthy, with a strong cash pile of RM1.5bil as at end-1HFY13. <o:p></o:p></span></div>
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<span lang="EN-US">- It is
trading at 15x FY14F PE, on par with its 5-year historical mean and at a 33%
discount to local peer AEON Co (M) Bhd’s (AEON Mk Equity, Nonrated) 20x.</span></div>
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<span lang="EN-US"><br /></span></div>
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<span lang="EN-US">Source: <a href="http://www.amesecurities.com.my/gc/download/Parkson%20Holdings%20130321.pdf">AmeSecurities</a></span></div>
KiasuTraderhttp://www.blogger.com/profile/15948228387993110687noreply@blogger.com0