RHBInvest Research
Thursday, April 14, 2011
Top Story: IJM Land
- Company Update
- IJMLD shares’ performance was flattish (YTD -2%) vs. Mah Sing’s 41% and SP Setia’s 11%.
- We believe the current valuations on IJMLD are decent, given the unchanged solid fundamentals, strategic landbank exposure and >50% FY12 net earnings growth.
- The value of the 2000-acre Canal City land will be unlocked next year. The project will be a bread-and-butter township development.
- IJMLD is our top pick besides Mah Sing. Maintain Outperform with a higher FV of RM3.28 (from RM3.18).
Corporate Highlights
UEM Land:
- News Update
- Secured maintenance contract
- Minimal impact on net profit. We expect the contract to yield a gross margin of 20%.
- No change to forecasts, Market Perform call and fair value of RM2.80.
Parkson: Market Perform
- News Update
- Clarity on the Centro deal
- For the time being, given that there is no cash involved in the deal, the cost to Parkson is a 9.9% earnings dilution in its Malaysian and Vietnamese operations earnings, which is to be transferred into Parkson Asia.
- As highlighted, the deal also involves Parkson granting MS a put option which, if exercised by June 2014, would require Parkson to purchase MS’ 9.9% stake in Parkson Asia at a total value of RM112.6m.
- Our SOP-derived fair value is maintained at RM5.90. Maintain Market Perform for the stock.
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