Views & News, Maybank IB (2010-11-09)
Tuesday, November 9, 2010
RESULTS REVIEW
Fraser & Neave Holdings RM14.62: Hold
Great FY10 but challenges remain
At our price target. F&N's share price has hovered around our price target of RM14.60 since we downgraded it to Hold on 6 August 10. 4QFY10 results, which were ahead of market, but in line with our ests, takes FY10’s net profit to a record high. A total 4Q dividend of RM1.48/sh was declared, of which RM1.10/sh was 'special'. Maintain Hold and RM14.60 TP.
COMMENTS ON NEWS
Aviation: Overweight
Firefly graduates to jet engines
Firefly to expand horizons. Firefly (MAS' LCC) announced its plans to launch services to East Malaysia on Jan 2011, and later to the ASEAN region. All systems are ready; regulatory approvals are granted, two leased Boeing 737-800 are in final stages of handover, staff are trained and ready to serve, and a promotional spearhead has been launched. Based on our analyses, the true winner is MAHB. The development is moderately negative on AirAsia and neutral on MAS.
Eastern Pacific Industrial Corp RM2.09: Buy
AZRB exits, state's holding enhanced Shariah-compliant
General Offer in the works? Lembaga Tabung Amanah Warisan Negeri Terengganu (LTAWNT) is now the 2nd largest shareholder after purchasing AZRB's 21.3% stake for RM112m (RM3.10/shr). The hefty 47% premium to Monday's closing price will create a positive buzz and further lift speculation that EPIC could be a privatization candidate. The acquisition may trigger a General Offer. Our RM2.40 target price is unchanged for now, based on 8x 2011 EPS. Buy.
Technicals
The FBM KLCI rose climbed 8.10 points to 1,519.84 yesterday. Due to the mixed tone in the USA last night, we may see the FBM KLCI in a steady mode today. Its resistance areas at 1,522 and 1,524 may cap market gains, whilst its support areas are located at 1,500 and 1,519.
Trading idea for today is a SHORT TERM BUY call on QSR.
Other Local News
AirAsia: Introduces Phuket-Bali Route. Budget airline AirAsia introduced the Phuket-Bali route four times a week, dubbing it as "from paradise to paradise". The new route aims to make travel more convenient for everyone and to stimulate tourism revenue and the local economy in Phuket. (Source: Bernama)
TA: Launches first wholesale funds. TA Investment Management Bhd has launched its first wholesale funds- TA Australia Income Fund 1 and/or II - which seek to provide investors with a regular income distribution in Australian dollar over an investment horizon of three and/or five years as well as to receive capital repayment in Australian dollar upon maturity. The fund will be invested in Australian dollar-denominated fixed rate note issued by foreign financial institution. (Source: The Star)
Masterskill: Plunges on PTPTN woes. Masterskill Education Group Bhd's shares have fallen steadily since late July. The selling pressure accelerated sharply over the past week, possibly due to concerns that National Higher Education Loan Fund (PTPTN) could be facing a deficit of RM46b as highlighted in the 2009 Auditor General's (AG) Report. Masterskill is said to rely on PTPTN to provide financing for 95% of its students. There are also fears that Masterskill's stock could see overhang pressures once the six month moratorium on selling by its pre-IPO investors expire at Nov 18. (Source: The Edge Financial Daily)
Accounting: Full IFRS compliance by 2012. Malaysia is on track to achieve full compliance to the International Financial Reporting Standards (IFRS) by 1 January 2012, Prime Minister Datuk Seri Najib Razak said. (Source: Business Times)
Economics: Malaysia to benefit from QE2, says Templeton. Emerging market such as Malaysia are set to benefit from monetary inflows as the US looks to investing in developing countries as a result of the second round of quantitative easing (QE2), said a global asset manager. Franklin Templeton Investments international chief investment officer Stephen Dover said a big portion of the money from QE2 would go into emerging markets, but these markets are at risk of overheating if not managed well. (Source: The Edge Financial Daily)
Fraser & Neave Holdings RM14.62: Hold
Great FY10 but challenges remain
At our price target. F&N's share price has hovered around our price target of RM14.60 since we downgraded it to Hold on 6 August 10. 4QFY10 results, which were ahead of market, but in line with our ests, takes FY10’s net profit to a record high. A total 4Q dividend of RM1.48/sh was declared, of which RM1.10/sh was 'special'. Maintain Hold and RM14.60 TP.
COMMENTS ON NEWS
Aviation: Overweight
Firefly graduates to jet engines
Firefly to expand horizons. Firefly (MAS' LCC) announced its plans to launch services to East Malaysia on Jan 2011, and later to the ASEAN region. All systems are ready; regulatory approvals are granted, two leased Boeing 737-800 are in final stages of handover, staff are trained and ready to serve, and a promotional spearhead has been launched. Based on our analyses, the true winner is MAHB. The development is moderately negative on AirAsia and neutral on MAS.
Eastern Pacific Industrial Corp RM2.09: Buy
AZRB exits, state's holding enhanced Shariah-compliant
General Offer in the works? Lembaga Tabung Amanah Warisan Negeri Terengganu (LTAWNT) is now the 2nd largest shareholder after purchasing AZRB's 21.3% stake for RM112m (RM3.10/shr). The hefty 47% premium to Monday's closing price will create a positive buzz and further lift speculation that EPIC could be a privatization candidate. The acquisition may trigger a General Offer. Our RM2.40 target price is unchanged for now, based on 8x 2011 EPS. Buy.
Technicals
The FBM KLCI rose climbed 8.10 points to 1,519.84 yesterday. Due to the mixed tone in the USA last night, we may see the FBM KLCI in a steady mode today. Its resistance areas at 1,522 and 1,524 may cap market gains, whilst its support areas are located at 1,500 and 1,519.
Trading idea for today is a SHORT TERM BUY call on QSR.
Other Local News
AirAsia: Introduces Phuket-Bali Route. Budget airline AirAsia introduced the Phuket-Bali route four times a week, dubbing it as "from paradise to paradise". The new route aims to make travel more convenient for everyone and to stimulate tourism revenue and the local economy in Phuket. (Source: Bernama)
TA: Launches first wholesale funds. TA Investment Management Bhd has launched its first wholesale funds- TA Australia Income Fund 1 and/or II - which seek to provide investors with a regular income distribution in Australian dollar over an investment horizon of three and/or five years as well as to receive capital repayment in Australian dollar upon maturity. The fund will be invested in Australian dollar-denominated fixed rate note issued by foreign financial institution. (Source: The Star)
Masterskill: Plunges on PTPTN woes. Masterskill Education Group Bhd's shares have fallen steadily since late July. The selling pressure accelerated sharply over the past week, possibly due to concerns that National Higher Education Loan Fund (PTPTN) could be facing a deficit of RM46b as highlighted in the 2009 Auditor General's (AG) Report. Masterskill is said to rely on PTPTN to provide financing for 95% of its students. There are also fears that Masterskill's stock could see overhang pressures once the six month moratorium on selling by its pre-IPO investors expire at Nov 18. (Source: The Edge Financial Daily)
Accounting: Full IFRS compliance by 2012. Malaysia is on track to achieve full compliance to the International Financial Reporting Standards (IFRS) by 1 January 2012, Prime Minister Datuk Seri Najib Razak said. (Source: Business Times)
Economics: Malaysia to benefit from QE2, says Templeton. Emerging market such as Malaysia are set to benefit from monetary inflows as the US looks to investing in developing countries as a result of the second round of quantitative easing (QE2), said a global asset manager. Franklin Templeton Investments international chief investment officer Stephen Dover said a big portion of the money from QE2 would go into emerging markets, but these markets are at risk of overheating if not managed well. (Source: The Edge Financial Daily)
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