Maybank IB Views
Monday, December 13, 2010
SECTOR UPDATE
Plantations: Neutral
MPOB data: Tightening supply
Bullish for prices. Stock levels fell below trend as demand stayed strong while production began its seasonal decline. In our view, Malaysian production is likely to decline in 2010. While spot prices have surpassed our CPO ASP forecast of RM3,000/t for 2011, we believe prices could trend down as weather concerns dissipate post the passing of the year-end monsoon season.
RESULTS REVIEW
Sapura Crest Petroleum RM2.85: Buy
Eyes strategic assets; target price lifted Shariah-compliant
Target price raised to RM3.30. 3Q results yielded no surprises but we are turning even more positive on SapCrest. It has a strengthened balance sheet to expand its core businesses (i.e. IPF, marine services, drilling ops) through M&As. Maintain Buy with a higher RM3.30 target price (+8%) as we lift target PER multiple from 16x to 17x FY13 on new asset injection prospects.
Technicals
The FBM KLCI rose 6.30-points and closed at 1,507.28 last week. The obvious support areas for the FBM KLCI are located in the 1,474 to 1,507-zone. The key resistance areas of 1,510 and 1,531 may cap any rebound activity.
Trading idea for today is an Accumulate call on KFIMA.
Other Local News
GreenPacket: P1 plans to improve and upgrade its 4G WiMAX coverage to 45% of Malaysian households by year-end, with the goal of hitting 65% by 2012. P1 also planning to roll out an array of rich media services, including Voice-over-Internet Protocol and mobile video. (Source: The Star)
KrisAssets: Could buy The Gardens from IGB. KrisAssets Holdings Bhd's plan to issue RM300m in redeemable convertible bonds may be a precursor to acquire The Gardens from parent IGB Corp Bhd (IGB). The acquisition could be via cash and shares. (Source: The Edge Weekly)
Landmarks: May start Bintan development in 1Q11. Landmarks Bhd, a 30.3% associate of Genting Bhd, is expected to start its Bintan development called Treasure Bay Bintan (TBB) by the first quarter of 2011. The development has been planned since 2007. This will be Landmark's second resort development after the Andaman Resort in Langkawi. (Source: The Edge Financial Daily)
Port: Ancom's Siew submits proposal for Penang Port. Oriental Pearl Harbour (led by Datuk Siew Ka Wei of the Ancom group), in partnership with China Shipping (Group) Co Ltd (the parent of China Cosco and Cosco Corp), has submitted a competing bid for Penang port. This rivals an earlier proposition by businessman Tan Sri Syed Mokhtar Al-Bukhary. Oriental's proposition would involve an outright purchase for RM500m (with the government holding a golden share) and the absorption of future capex totaling RM2b to RM2.5b. (Source: The Edge Weekly)
UEM-EPF: Seeks tax waiver on PLUS takeover. The special purpose vehicle (SPV) controlled by UEM Group and the Employees Provident Fund (EPF) which has made an offer of RM4.60 per share for PLUS Expressways Bhd is seeking a tax waiver for PLUS's toll operations until the end of its tenure in 2030. UEM-EPF is also seeking an exemption or relief from all stamp duty, real property gains tax and other taxes and levy that may arise during the acquisition. However, the acquisition of PLUS will still proceed if UEM-EPF is unable to secure any exemptions. (Source: The Edge Weekly)
Plantations: Neutral
MPOB data: Tightening supply
Bullish for prices. Stock levels fell below trend as demand stayed strong while production began its seasonal decline. In our view, Malaysian production is likely to decline in 2010. While spot prices have surpassed our CPO ASP forecast of RM3,000/t for 2011, we believe prices could trend down as weather concerns dissipate post the passing of the year-end monsoon season.
RESULTS REVIEW
Sapura Crest Petroleum RM2.85: Buy
Eyes strategic assets; target price lifted Shariah-compliant
Target price raised to RM3.30. 3Q results yielded no surprises but we are turning even more positive on SapCrest. It has a strengthened balance sheet to expand its core businesses (i.e. IPF, marine services, drilling ops) through M&As. Maintain Buy with a higher RM3.30 target price (+8%) as we lift target PER multiple from 16x to 17x FY13 on new asset injection prospects.
Technicals
The FBM KLCI rose 6.30-points and closed at 1,507.28 last week. The obvious support areas for the FBM KLCI are located in the 1,474 to 1,507-zone. The key resistance areas of 1,510 and 1,531 may cap any rebound activity.
Trading idea for today is an Accumulate call on KFIMA.
Other Local News
GreenPacket: P1 plans to improve and upgrade its 4G WiMAX coverage to 45% of Malaysian households by year-end, with the goal of hitting 65% by 2012. P1 also planning to roll out an array of rich media services, including Voice-over-Internet Protocol and mobile video. (Source: The Star)
KrisAssets: Could buy The Gardens from IGB. KrisAssets Holdings Bhd's plan to issue RM300m in redeemable convertible bonds may be a precursor to acquire The Gardens from parent IGB Corp Bhd (IGB). The acquisition could be via cash and shares. (Source: The Edge Weekly)
Landmarks: May start Bintan development in 1Q11. Landmarks Bhd, a 30.3% associate of Genting Bhd, is expected to start its Bintan development called Treasure Bay Bintan (TBB) by the first quarter of 2011. The development has been planned since 2007. This will be Landmark's second resort development after the Andaman Resort in Langkawi. (Source: The Edge Financial Daily)
Port: Ancom's Siew submits proposal for Penang Port. Oriental Pearl Harbour (led by Datuk Siew Ka Wei of the Ancom group), in partnership with China Shipping (Group) Co Ltd (the parent of China Cosco and Cosco Corp), has submitted a competing bid for Penang port. This rivals an earlier proposition by businessman Tan Sri Syed Mokhtar Al-Bukhary. Oriental's proposition would involve an outright purchase for RM500m (with the government holding a golden share) and the absorption of future capex totaling RM2b to RM2.5b. (Source: The Edge Weekly)
UEM-EPF: Seeks tax waiver on PLUS takeover. The special purpose vehicle (SPV) controlled by UEM Group and the Employees Provident Fund (EPF) which has made an offer of RM4.60 per share for PLUS Expressways Bhd is seeking a tax waiver for PLUS's toll operations until the end of its tenure in 2030. UEM-EPF is also seeking an exemption or relief from all stamp duty, real property gains tax and other taxes and levy that may arise during the acquisition. However, the acquisition of PLUS will still proceed if UEM-EPF is unable to secure any exemptions. (Source: The Edge Weekly)
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