Maybank IB Views

Monday, June 20, 2011

Top Glove Corporation RM5.26: Hold
The bottomed quarter? Shariah-compliant

Turning better but fair valuations. The results are in line, with 9MFY11 net profit of RM88m (-56% YoY) making up 68% of our full-year forecast and 58% of street’s. Although the earnings downcycle has bottomed for now, valuations are also fair at current levels, at 16.2x CY12 PER, within its +1 std of mean. Maintain Hold with an unchanged DCF-derived TP of RM5.10 which implies 15.7x CY12 PER.

The FBM KLCI gained 7.24-points and closed at 1,563.43 last Friday. The obvious support areas for the FBM KLCI are located in the 1,536 to 1,563-zone. The firm resistance zone of 1,648 and 1,576 will see very heavy liquidation activities.

Trading idea for today is a SHORT TERM BUY call on UTDPLT.

Other Local News
F&N Holdings: Aims for regional expansion. Fraser & Neave Holdings Bhd is keen to buy another food company to expand and become a regional food and beverage group. Last year, it spent some RM55m for 23% stake in Cocoaland Holdings Bhd. It also aims to double its dairy business in Thailand over the next five years. (Source: Business Times)

SPB: To expand planted land. Sarawak Plantation Bhd (SPB) is in advanced negotiations to acquire a 3,000ha matured oil palm plantation from a private company in northern Sarawak. Group MD Datuik Hamden Ahmad said SPB's target is to expand its plantation by at least 5,000ha a year while the group's capital expenditure is between RM30m and Rm40m a year. (Source: The Star)

TSH: Young plantations start ielding returns. TSH Resources is entering harvest time. So far, only 36% of its Indonesian palms are currently in the mature phase. TSH plans to acquire more land in Kalimantan and if all goes well, chairman Datuk Kelvin Tan Aik Pen expects two acquisitions in the current financial year. (Source: The Edge Daily)


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