Views & News, Maybank IB (2010-11-04)
Thursday, November 4, 2010
COMPANY UPDATE
Mah Sing Group RM1.88: Buy
Continues aggressive landbanking Shariah-compliant
Two new land parcels in Klang Valley. Mah Sing (MSGB) bought two pieces of freehold residential and commercial land located in Cyberjaya and Jln Ampang for RM166.5m cash. We are positive on the deals given their fair pricing and strategic locations. The land with e. RM1.2b total GDV are expected to boost our FY12 forecast by 3% and RNAV by 8%. Maintain Buy with higher RM2.48 RNAV-based TP.
QL Resources RM5.61: Buy
Raising capital to accelerate growth Shariah-compliant
The good news and the better news. QL yesterday announced proposals to raise funds and trading liquidity as its fast-growing operations continue to outpace free cash generation. We are simultaneously raising our forecasts by 5% p.a. in FY12-13 taking into account the faster-than-expected progress at its Integrated Livestock (IL) farms in Cianjur, Indonesia. Our TP is raised to an SOP-derived RM5.91 (ex-price: RM2.92) after adding the value of its stakes in Lay Hong and Boilermech to our DCF-derived RM5.77 (ex price: RM2.85).
RESULTS REVIEW
Sunrise RM2.52: Buy
Potential tie-up with a GLC? Shariah-compliant
On track. Sunrise's 1QFY11 RM36.7m net profit was within expectations. We see potential for acceleration of the new Quintet developments in Canada given the recent strong take-up registered. However, we believe that the short-term focus on Sunrise would be on the potential tie-up with a GLC. We lower our FY11-12 forecasts by 1-5% but raise FY13 by 6%. Maintain Buy with a higher RM2.83 TP (30% discount to new RM4.05 RNAV/sh).
Click here for full report »
Guinness Anchor RM8.83: Buy
Anchored to a tidal wave
At 10-year highs. GAB's 1QFY11 results brought its 12-month moving average (MA) revenue and pretax profit to record highs. Whilst 8-11% p.a. net profit growth in FY11-13 is not spectacular, this already assumes an annual excise duty hike of 5% p.a. from 2QFY12. Maintain Buy with an unchanged RM9.60 DCF-based TP on unchanged forecasts for resilient earnings and reasonable dividend yields of 5-6% net p.a.
Click here for full report »
ECONOMICS
External Trade September 2010
Slip in growth
Export growth slowed sharply to 6.9% YoY in Sep '10 (Aug '10: +10.6% YoY; Maybank IB: +16.5% YoY, Consensus: +10.1% YoY). Import growth also moderated to +14.6% YoY (Aug '10: +16.5% YoY; Maybank IB: +14.7% YoY, Consensus: +16.3% YoY) resulting in a RM7b trade surplus (Aug '10: +RM8.3). YTD, exports and imports increased by 20.4% and 26.4% respectively to give RM84.7b trade surplus. With the nine month figures in, we have adjusted 2010 export growth, import growth and trade surplus forecast to 15%, 19.5% and RM116.6bn from 17.5%, 18.4% and RM135.2b previously. Our current 2011 export and import growth forecast of 8.1% and 8.7% are under review, but in general we still expect another year of import growth outpacing export growth.
Click here for full report »
Technicals
The FBM KLCI rose slightly by 1.03 points to 1,507.60 yesterday. Its resistance areas at 1,509 and 1,524 may cap market gains, whilst its support areas are located at 1,491 and 1,507.
Trading idea for today is a SHORT TERM BUY call on HIRO.
Other Local News
MAS: Domestic Firefly flights from KLIA by early 2011. Firefly, which now operates turboprops from Subang, will begin flying jets on several domestic routes from the KL International Airport (KLIA) as early as January or February. The idea is to beat competition with a low-cost model rather than a full service one and Firefly will take over some of the B737-400 aircraft from parent Malaysia Airlines (MAS) to ply the domestic routes. It will have four to six B737-400 aircraft to begin with and more will be added to the system over time. Firefly is likely to do more of the cross-over flights to Sabah and Sarawak. (Source: The Star)
Tanjung Offshore: Secures USD3.3m contract from Egypt. Tanjung Offshore Bhd subsidiary Citech Energy Recovery Systems UK Ltd (CERS), has received a purchase order from Egyptian Maintenance Company (EMC) for the supply of four units of waste heat recovery for the Egypt Liquefied Natural Gas retrofit project. The waste heat recovery package is valued at around USD 3.3m. The transaction is expected to contribute positively to the earnings of Tanjung for the financial years ending Dec 31, 2010, and 2011. (Source: Bernama)
Futures trading: Brokers get direct access to US customers. Nine Malaysian futures brokers received recognition by the National Futures Association to solicit and accept orders and customer funds directly from US customers as permitted by the United States Commodity Futures Trading Commission. The nine futures brokers were: AmFutures Sdn Bhd, CIMB Futures Sdn Bhd, JF Apex Securities Bhd, Kenanga Deutsche Futures Sdn Bhd, LT International Futures (M) Sdn Bhd, Okachi Malaysia Sdn Bhd, Oriental Pacific Futures Sdn Bhd, OSK Investment Bank Bhd and TA Futures Sdn Bhd. (Source: The Star)
Crude Oil: RON 97 price up 5 sen. The price of RON 97 is up 5 sen to RM2.15 per litre from Tuesday and reflects the price of petrol in the global market. Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said petroleum companies monitored the price of petrol for the first 28 days of the month and then would decide on whether to increase or reduce the price of RON97 for the following month. Meanwhile, government will not increase the price of RON95 at least until end of the year. More than 95% of private cars run on RON95. (Source: Business Times)
Mah Sing Group RM1.88: Buy
Continues aggressive landbanking Shariah-compliant
Two new land parcels in Klang Valley. Mah Sing (MSGB) bought two pieces of freehold residential and commercial land located in Cyberjaya and Jln Ampang for RM166.5m cash. We are positive on the deals given their fair pricing and strategic locations. The land with e. RM1.2b total GDV are expected to boost our FY12 forecast by 3% and RNAV by 8%. Maintain Buy with higher RM2.48 RNAV-based TP.
QL Resources RM5.61: Buy
Raising capital to accelerate growth Shariah-compliant
The good news and the better news. QL yesterday announced proposals to raise funds and trading liquidity as its fast-growing operations continue to outpace free cash generation. We are simultaneously raising our forecasts by 5% p.a. in FY12-13 taking into account the faster-than-expected progress at its Integrated Livestock (IL) farms in Cianjur, Indonesia. Our TP is raised to an SOP-derived RM5.91 (ex-price: RM2.92) after adding the value of its stakes in Lay Hong and Boilermech to our DCF-derived RM5.77 (ex price: RM2.85).
RESULTS REVIEW
Sunrise RM2.52: Buy
Potential tie-up with a GLC? Shariah-compliant
On track. Sunrise's 1QFY11 RM36.7m net profit was within expectations. We see potential for acceleration of the new Quintet developments in Canada given the recent strong take-up registered. However, we believe that the short-term focus on Sunrise would be on the potential tie-up with a GLC. We lower our FY11-12 forecasts by 1-5% but raise FY13 by 6%. Maintain Buy with a higher RM2.83 TP (30% discount to new RM4.05 RNAV/sh).
Click here for full report »
Guinness Anchor RM8.83: Buy
Anchored to a tidal wave
At 10-year highs. GAB's 1QFY11 results brought its 12-month moving average (MA) revenue and pretax profit to record highs. Whilst 8-11% p.a. net profit growth in FY11-13 is not spectacular, this already assumes an annual excise duty hike of 5% p.a. from 2QFY12. Maintain Buy with an unchanged RM9.60 DCF-based TP on unchanged forecasts for resilient earnings and reasonable dividend yields of 5-6% net p.a.
Click here for full report »
ECONOMICS
External Trade September 2010
Slip in growth
Export growth slowed sharply to 6.9% YoY in Sep '10 (Aug '10: +10.6% YoY; Maybank IB: +16.5% YoY, Consensus: +10.1% YoY). Import growth also moderated to +14.6% YoY (Aug '10: +16.5% YoY; Maybank IB: +14.7% YoY, Consensus: +16.3% YoY) resulting in a RM7b trade surplus (Aug '10: +RM8.3). YTD, exports and imports increased by 20.4% and 26.4% respectively to give RM84.7b trade surplus. With the nine month figures in, we have adjusted 2010 export growth, import growth and trade surplus forecast to 15%, 19.5% and RM116.6bn from 17.5%, 18.4% and RM135.2b previously. Our current 2011 export and import growth forecast of 8.1% and 8.7% are under review, but in general we still expect another year of import growth outpacing export growth.
Click here for full report »
Technicals
The FBM KLCI rose slightly by 1.03 points to 1,507.60 yesterday. Its resistance areas at 1,509 and 1,524 may cap market gains, whilst its support areas are located at 1,491 and 1,507.
Trading idea for today is a SHORT TERM BUY call on HIRO.
Other Local News
MAS: Domestic Firefly flights from KLIA by early 2011. Firefly, which now operates turboprops from Subang, will begin flying jets on several domestic routes from the KL International Airport (KLIA) as early as January or February. The idea is to beat competition with a low-cost model rather than a full service one and Firefly will take over some of the B737-400 aircraft from parent Malaysia Airlines (MAS) to ply the domestic routes. It will have four to six B737-400 aircraft to begin with and more will be added to the system over time. Firefly is likely to do more of the cross-over flights to Sabah and Sarawak. (Source: The Star)
Tanjung Offshore: Secures USD3.3m contract from Egypt. Tanjung Offshore Bhd subsidiary Citech Energy Recovery Systems UK Ltd (CERS), has received a purchase order from Egyptian Maintenance Company (EMC) for the supply of four units of waste heat recovery for the Egypt Liquefied Natural Gas retrofit project. The waste heat recovery package is valued at around USD 3.3m. The transaction is expected to contribute positively to the earnings of Tanjung for the financial years ending Dec 31, 2010, and 2011. (Source: Bernama)
Futures trading: Brokers get direct access to US customers. Nine Malaysian futures brokers received recognition by the National Futures Association to solicit and accept orders and customer funds directly from US customers as permitted by the United States Commodity Futures Trading Commission. The nine futures brokers were: AmFutures Sdn Bhd, CIMB Futures Sdn Bhd, JF Apex Securities Bhd, Kenanga Deutsche Futures Sdn Bhd, LT International Futures (M) Sdn Bhd, Okachi Malaysia Sdn Bhd, Oriental Pacific Futures Sdn Bhd, OSK Investment Bank Bhd and TA Futures Sdn Bhd. (Source: The Star)
Crude Oil: RON 97 price up 5 sen. The price of RON 97 is up 5 sen to RM2.15 per litre from Tuesday and reflects the price of petrol in the global market. Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said petroleum companies monitored the price of petrol for the first 28 days of the month and then would decide on whether to increase or reduce the price of RON97 for the following month. Meanwhile, government will not increase the price of RON95 at least until end of the year. More than 95% of private cars run on RON95. (Source: Business Times)
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