COMPANY UPDATE
Malaysia Airports Holdings RM5.86: Buy
Field Trip to Sabiha Gökçen
Leveraging on the East-West powerhouse. We visited MAHB's 20% investment in Turkey, Sabiha Gökçen Airport (SGA), and returned optimistic on its potential to become the premier low-cost carrier (LCC) hub of Istanbul and possibly Central Asia, leveraging on its unique location, tourist appeal and a population that has just begun to embrace air travel in a big way. We maintain our earnings forecasts as there is no P&L impact before 2014, but raise our TP to RM7.12. Maintain Buy.
RESULTS REVIEW
Amanah Raya REIT RM0.92: Buy
Boosted by new assets
An attractive yield play. AAREIT's 9M10 RM31.3m realised net profit (+38% YoY) was as we expected, but above consensus. We continue to like AAREIT for its attractive 8.9% 2011 yield (vs. 8.1% industry), earnings visibility and sustainability supported by long lease agreements with step-up features. We maintain our forecasts (+6% 3-year DPU CAGR) and RM1.19/sh DCF-derived TP.
Technicals
The FBM KLCI closed slightly higher by 2.17 points yesterday to end at 1,499.11 led by the finance and consumer sectors. Its resistance areas at 1,504 and 1,512 may cap market gains, whilst the support areas for the FBM KLCI are located at 1,483 and 1,499.
Trading idea for today is a SHORT TERM BUY call on CIHLDG.
Other Local News
Dialog: Exciting times ahead for Dialog. Dialog Group is gearing up for the independent deepwater petroleum terminal project at Pengerang, Johor which will turn into a regional oil storage and trading hub by 2017. The latest boost for the project was the Johor government’s decision to approve the site – 500 acres of reclaimed land – for a 60-year lease. The approval will enable Dialog, and its partners, Johor government and Vopak, world’s largest independent tank terminal operator, to own and develop an independent deepwater petroleum terminal with jetty and other marine facilities with water depth of up to 26m, capable of handling very large crude carriers. The combined investment in the terminal would be RM5b over a seven year period. (Source: The Edge Financial Daily)
SunCity: Mulls over new projects for REIT, JV for RM4.3b project in China. Sunway City Bhd (SunCity) is mulling over office and retail projects to be nurtured into yield-accretive assets which can later be injected into the Sunway real estate investment trust (REIT). The first project is The Pinnacle in Bandar Sunway, a 25-storey corporate office block with net lettable area of 560,000 sq ft that was scheduled for completion by 2013. Next would be the development of a parcel of land beside Sunway Pyramid Shopping Mall. Currently referred to as SP3, this would be a retail and service apartment development with vehicular and pedestrian links to the mall. Separately, Sunway City (S’pore) Pte Ltd (SCS), a wholly owned subsidiary of Sunway City Bhd (SunCity), has entered into a joint venture to develop a project with an estimated gross development value of RM4.3b in Sino-Singapore Tianjin Eco-City, China. (Source: The Star)
MK Land: Clinches RM4b project in Bangalore. MK Land Holdings Bhd sealed an agreement with Embassy Group of India to develop a RM4b "affordable homes" project in North Bangalore, India. The development will be carried out by MK Embassy Land Sdn Bhd, which is a joint venture between MK Land (47.5%), Star Dreams Pte Ltd (47.5%) – a subsidiary of Embassy Group, and MKN Embassy Development Sdn Bhd (5%) – a subsidiary of the Emkay Group. The development will be on land measuring approximately 185 acres in North Bangalore and will comprise 14,400 residential units with some two million sq ft of commercial space. (Source: The Edge Financial Daily)
Mutiara Goodyear: Plans RM1.6b projects. Property developer Mutiara Goodyear Development Bhd targets to launch several high-end property projects with a total gross development value (GDV) of about RM1.6b in the next 12 months. The property projects that would be launched were the Nadayu Melawati high-end property development comprising luxury bungalows, semi-detached homes, super links and commercial units (GDV: RM850m) that is slated for completion by 2012. Other projects to be launched next year are the Nadayu 92 Kajang (GDV: RM250m), Nadayu 28 Sunway (GDV: RM300m) and Nadayu Penang (GDV: RM450m). (Source: The Star)
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