Maybank IB Views

Monday, June 27, 2011

MARKET STRATEGY
2H 2011 Outlook
External headwinds, domestic strength (mid-year check)

External headwinds. We expect global equities to remain volatile in second half 2011 on renewed concerns over US' economic recovery, Eurozone's sovereign debt crisis and China's monetary tightening measures. Waning confidence on the resolution of Eurozone's debt problems will prompt broad-based risk aversion in equities. In addition, the unrest at MENA has persisted; it is likely to extend for awhile.

ECONOMICS
Malaysia: Development & Outlook, 2H 2011
Reality Check

We revised downward our 2011 real GDP growth forecast to 5.1% (previous 5.5%), taking cue from continued softness in 2Q 2011 after the lower-than-expected 1Q 2011 growth amid signs of elevated global economic risks that weighs on external demand on the back of factors such as worsening Eurozone soveriegn debt crisis, US economy that is losing momentum as QE2 ended, slowing China's economy and continued inflationary presures in the emerging and developing countries. In addition, rising inflation and interest rates dampen domestic consumer spending. Critical to upholding the growth momentum this year is therefore investment, with ETP implementation a crucial factor, which should be supportive of the domestic economy in 2H 2011.

CPI, May 2011
See you at "4" next...?

Consumer price index (CPI) increased by 3.3% YoY in May '11 (Apr '11: +3.0% YoY; MaybankIB: +3.3% YoY; Consensus: +3.3% YoY), accelerating for the sixth month in a row to the fastest pace in 26 months. MoM, it gained +0.3%. 2011 YTD inflation rate was +3% YoY. CPI excluding Food & Non-Alcoholic Beverages and Transport picked up for the fourth consecutive months to +2% YoY (Apr '11: + 1.8% YoY), the highest in almost two years. Factoring in the impact of the hikes in the subsidized prices of sugar, diesel, gas and power in May-June, we see monthly inflation rate surging to 4% in June-July, and had earlier revised our annual inflation rate to 3.4% (3% previously) for 2011 and 3.3% (2.9% previously) for 2012.

INITIATING COVERAGE
BIMB Holdings RM1.97: Buy
A blast from the past Shariah-compliant

Ready to stamp its mark again. Once the largest Islamic bank in the country, BIMB Holdings (BIMB) lost its luster when it plunged into the red in 2005/2006. New management has spent the last couple of years cleaning up legacy financing problems at the commercial bank, which also saw two rounds of capital injection over the past five years. With much of the clean-up completed alongside a corporate rebranding of Bank Islam and Syarikat Takaful Malaysia (Takaful Malaysia), BIMB is poised once again to stamp its mark as one of the country's leading Islamic financial institutions. We initiate coverage on BIMB with a Buy call and a RM2.40 target price on a sum-of-parts (SOP) basis.

COMPANY UPDATE
RHB Capital RM8.75: Hold
Back to the drawing board

Downgrade to Hold. Our call on RHB Capital is lowered to a Hold from Buy, after restoring our valuations to levels prior to recent corporate exercises. On the back of a re-based target price of RM9.40 from RM10.40, upside to current share price is 7%. While valuations remain decent, various non-tangible issues are likely to weigh on sentiment in the near term, in our view.

RESULTS REVIEW
Kencana Petroleum RM2.79: Buy
On track, with upside potential Shariah-compliant

We remain Buyers of Kencana. 9MFY11 results track expectations. We expect earnings momentum to strengthen into FY12 as Kencana secures higher orders and consolidates AME's earnings. We do not rule out a 2nd RSC and a strategic partner to develop deepwater fabrication capabilities; a positive, in our view. Our RM3.10 target price, based on 20x CY12 EPS, has not incorporated these potentials.

Technicals
The FBM KLCI gained only 1.23-points and closed at 1,564.66 last Friday. The local market remained quite steady despite the Greek debt worries and bad US economic news (like the increased number of people seeking unemployment benefits). The obvious support areas for the FBM KLCI are located in the 1,536 to 1,563-zone. The firm resistance zone of 1,564 and 1,576 will see very heavy liquidation activities.

Trading Idea is a Short-Term Buy call on PANAMY.

Other Local News
Proton: Nears deal with foreign carmaker. Proton Holdings Bhd will be finalising a collaboration with a foreign car maker next month, which is expected to bring up to RM800m of investment into the country. The tie-up involves using the partner's transmission for Proton's new engine. (Source: Business Times)

IJM: Shortlisted for India highway project. IJM Corp Bhd is one of the 11 companies shortlisted for a mega inter-state highway project estimated to cost about RM4b. The 555km highway stretches from Kishangarh, near Jaipur, in Rajasthan to Ahmedabad, in Gujarat, via Udaipur. (Source: The Star)

Sime Darby: New pay scheme to attract Malaysians too. Sime Darby Plantation Sdn Bhd expects its new pay scheme for estate and mill workers to attract not only foreigners but Malaysians as well. (Source: The Edge Financial Daily)

Muhibbah: Gets RM338m job. Muhibbah Engineering (M) Bhd has been awarded a RM338m contract by Northport (M) Bhd for the development of a multi-purpose wharf and other facilities at Container Terminal 4. (Source: Bursa Malaysia)

Plantation: Minister concerned over Aussie palm oil Bill. Plantation Industries and Commodities minister Tan Sri Bernard Dompok expressed grave concern on the passing of the Food Standards Amendment (Truth in Labelling - Palm Oil) Bill 2010 by the Australian Senate on Thursday. The Bill which is now under consideration by the Lower House, Australian Parliament, seeks to mandate the labeling of palm oil for the purpose of ensuring ‘that consumers are provided with clear, accurate information about the inclusion of palm oil in foods’. (Source: The Star)

Read more...

RHBInvest Research

Top Story: Tan Chong – The stars are aligned

Outperform (up from MP)

Results Preview
Nissan does not currently have a competitive offering in the segment to compete with Toyota’s Vios and Honda’s City. The new Vanette is also scheduled for launch by end-2011 that could make a significant contribution to volumes
Fair value for the stock is RM6.15 (from RM4.90) derived from applying a 10.5x PER (unchanged) to FY12 EPS (rolled over from FY11).

Corporate Highlights

Kencana : Earnings slightly below expectations

Outperform

Briefing Note
Net profit was up by 81.7% on a yoy basis from RM31.2m in 3QFY07/10 mainly due to the start-up of the company’s KM-1 drilling rig in Sep-10.
The company has been very busy of late, working on its Berantai field project and completing its large order book. Kencana’s RM400m acquisition of Allied
Marine & Equipment (AME) (via issue of new shares) is expected to be completed by 3QFY11.

Read more...

Maybank Flyer

1. Cuscapi Berhad (CUSCAPI, stock code: 0051)


Cuscapi Berhad, formerly known as Datascan Berhad, is a trusted and innovative industry specialist with more than 29 years of experience in offering world-class solutions to the F&B industry. Its product includes software, hardware, software inplementation and support service, hardware preventive maintenance and remedial services, network sales and services, and customized software interface development services.

Cuscapi is highlighted this week as it has a cheap PE of 9.25x with dividend yield of 3.02%. Recently, CUSCAPI announced 34-fold increase in net profit and 1-quarter growth in revenue in the last financial year. It also has a steady and rising revenue trends since June 2004.


2. Scientex Berhad (SCIENTX, stock code: 4731)

Scientex has a market capitalisation of more than RM230 million and a total combined assets of approximately RM600 million. Scientex's core businesses are manufacturing and property development.

Scientex Berhad is an investment holding company. The company, through its subsidiaries manufactures PVC, polyurethane leather sheetings, packaging materials, bricks, and automotive parts. It also operates in property investment, development and leasing as well as deals in securities.

Scientex is highlighted in this week's flyer as it has a cheap 7.94x PE with dividend yield of 3.3%. Scientex shows a very steady and rising revenue and EPS trends since July 2003 while its fiscal 3Q profit climbed 21% to RM20.4mil.

Read more...

Stocks to watch: Kencana, Muhibbah, Tambun Indah, Subur

Sunday, June 26, 2011

KUALA LUMPUR: Worries about the Greek debt issue and the slide on Wall Street will weigh on investors’ sentiment in the week ahead, starting Monday, June 27, and maybe investors may give up the hope of window dressing as the first half draws to an end.

On Wall Street, Reuters reported the Dow industrials and the S&P 500 fell for their seventh week in the last eight. The benchmark S&P 500 is down 7% from its 2011 closing high at the end of April.

Investors are fearful Greece's government may fail to pass an austerity plan next week, which could force a default on its debt repayments. The government faces an electorate vehemently opposed to the austerity measures.

The Dow Jones industrial average dropped 115.42 points, or 0.96%, to 11,934.58 at the close. The Standard & Poor's 500 Index fell 15.05 points, or 1.17%, to 1,268.45. The Nasdaq Composite Index lost 33.86 points, or 1.26%, to 2,652.89.

For the week, the Dow fell 0.58% and the S&P 500 shed 0.24%, while the Nasdaq gained 1.39%.

At Bursa Malaysia, stocks to watch include KENCANA PETROLEUM BHD [], MUHIBBAH ENGINEERING (M) BHD [], Tambun Indah Land Bhd and SUBUR TIASA HOLDINGS BHD [].

Kencana’s earnings rose 81% to RM56.42 million in the third quarter ended April 30, 2011 from RM31.17 million a year ago underpinned by the progress achieved for the contracts. Revenue rose 34.7% to RM377.83 million from RM280.37 million. Earnings per share were 3.08 sen versus 1.92 sen a year ago.

When compared with a year ago, where revenue and pre-tax profit came in at RM280.37 million and RM36.5 million, this was an improvement of 35% and 91% respectively in the current quarter.

Muhibbah was awarded a RM338 million contract from Northport (Malaysia) Bhd to build a multipurpose wharf and the associated facilities. Hopefully, this could inject some positive news into the stock which was battered by its exposure to the Asian petroleum hub debacle.

Muhibbah said the wharf would be an extension to the existing wharf eight and upgrading of wharf 16. The contract is scheduled to start in July and completed in March 2014.

Some upbeat news from Tambun Indah Land Bhd. The Penang-based developer, with projects totaling gross development value (GDV) of RM1.6 billion, expects to record strong revenue growth in the financial year ending Dec 31, underpinned by the sustained property boom in Penang.

Growth would be driven by strong interest in its ongoing projects due to the rapid industrial expansion in Seberang Perai. It would also benefit from the spillover effect from the strong demand for residential PROPERTIES [] on Penang island.

Tambun Indah has several ongoing projects on mainland Penang with total GDV of RM1.6 billion, which is enough to last until 2016.

On a downbeat note, Subur Tiasa’s net profit in the third quarter ended April

30, 2011 fell 19.5% to RM8.40 million from RM10.44 million a year ago but it expects the outlook to be positive on firm demand overseas.

“The market outlook for timber and timber products in the coming quarter remain positive with the continued firm demand for timber in India and China,” it said.

The company’s financial performance was impacted by higher operational costs due to the increase in raw material, fuel and adhesive costs.

Revenue declined 11.8% to RM144.66m from RM164.12 million. Earnings per share were 4.62 sen compared with 5.55 sen.

Subur Tiasa said for the nine-month period, net profit was flat at RM23.838 million while revenue declined 4.8% to RM486.22 million from RM510.79 million.

Read more...

New ContiComfortContact CC5

Saturday, June 25, 2011


Conti ComfortContact CC5

Noise Breaker

Feature
Noise Breaker from Conti Silent Tread Pattern Groove Technology

Effect
Breaks air-waves in longitudinal grooves

Benefit
Reduces noise without compromising other performances

Comfortable tyre

Feature
V-Shaped Siped inner ribs

Effect
Smooth rolling throughout the tyre circumferential

Benefit
Optimum driving comfort coupled with optimum safety performance

Fuel Saving

Feature
Advanced Silica Compound Technology

Effect
Minimized rolling resistance forces for better fuel efficiency and also lower CO2 emissions

Benefit
Improve fuel economy

Read more...

RHBInvest Research

Top Glove – Easing latex prices to help drive recovery – Underperform call based on PER of 15x

  • Management expects latex prices to ease from RM9.30/kg to RM7.00/kg, in the next 3-4 months ahead due to seasonal factors
  • Given the current situation where latex prices are higher than nitrile prices, Top Glove intends to increase its nitrile glove production mix from 13% to 16-17% by end-CY11.

AirAsia: Places order for 200 new A320 Neo aircraft - Market Perform (up from UP)
  • AirAsia has placed an order with Airbus SAS for 200 A320 Neo aircraft with a list price of US$18.2bn (RM54.6bn), to be delivered in 2016-2026.
  • The new A320 Neo aircraft will result in 15% fuel savings.
  • We are raising AirAsia’s FY12/12-13 net profit forecasts by 12% each

Gamuda: 9MFY07/11 net profit grows 27% yoy - Market Perform
  • Gamuda expects the Government to officially call for the tender for the tunnelling works for MRT in 4Q2011 while the award of contract is expected in 1Q2012 with physical work only in full swing by mid-2013.
  • FY07/11 net profit forecast is raised by 6% largely to reflect higher property margins. Fair value is raised from RM4.03 to RM4.13.

Glomac: In a sweet spot - Market Perform
  • 4QFY11 net profit of RM15.0m, Full year FY11 revenue and net profit surged commendably by 90% and 54%, respectively. A 5 sen final dividend was declared. Together with the 4.5 sen interim dividend, full year dividend amounted to 9.5 sen, upped from 8.5 sen in FY10.
  • We raise our FY13 earnings forecast by 11% as management guided RM1bn GDV (vs. RM800m previously) for the Puchong project. We also introduce our FY14 estimate with a growth of 9%.

Jaya Tiasa: A strong finish to FY04/11 - Outperform
  • FY04/11 net profit jumped significantly, Key variance was higher FFB production volume for its plantation division.
  • We raised our FY04/12-13 net profit forecasts by 5.1-6.2%, after adjusting for higher FFB production volume on the back of higher yields. We introduce our FY04/14 forecast.

Read more...

RHBInvest Research

Wednesday, June 22, 2011

Top Story: SEGi

Visit Note

  • SEGi has entered into an agreement with a private developer, Oakfine Development S/B, to build a RM300m – RM500m campus in Perak, with SEGi leasing the campus from the developer upon completion. As SEGi will not be bearing any of the construction costs, there is no direct impact to SEGi’s financials in the immediate term. The campus is expected to be completed in late 2013 or early 2014.
  • We revise our fair value to RM4.60 (from RM5.05).Maintain Outperform.

Read more...

Maybank IB Views

SECTOR UPDATE
Media: Neutral
May 2011 adex: Growth momentum slows

Slowing down. While May 2011 total gross adex was up 10% YoY, it was below expectations as it was only up 4% MoM when we expected it to be 10% to 15% higher MoM. This was likely due to weakening consumer sentiment dealt by inflation which will only be aggravated going forward by the recent 7% electricity tariff hike. Furthermore, total gross adex growth YoY will decelerate in 2H11 due to the high base effect of 2H10. Only Media Prima remains a Buy.

COMPANY UPDATE
Petronas Chemicals Group RM7.08: Buy
Retracement, but largely expected Shariah-compliant

Beset by headwinds. PCHEM's product margin in May 2011 was USD1,222/ton (+42.1% YoY, -1.7% MoM), we estimate. The year-to-date product margin of USD1,157/ton is 25.8% higher YoY. Product prices are retracing from a super run over the past three months. This is largely expected, and we are unperturbed as our 2011 earnings forecast is based on a realistic USD1,027/ton. Maintain BUY with an unchanged target price of RM8.15/share.

Technicals
The FBM KLCI closed higher by 1.60 points at 1,560.79 yesterday. Its resistance areas of 1,562 and 1,576 will cap market gains, whilst the obvious support areas are located at 1,540 and 1,560. Due to the US markets’ rebound tone last night, we will see some initial low volume buying activities in the local bourse today.

Trading idea for today is a Take Profit call on TIMECOM.

Other Local News

MAHB: Secures Eurocopter as anchor tenant of Subang airport. Eurocopter Malaysia Sdn Bhd has signed the 30-year lease with an option for an additional 30years. Eurocopter is looking to build a maintenance, repair and overhaul (MRO) services facility on a 7,000 sq m plot of land in the MAHB helicopter centre in Subang. (Source: The Edge Daily)

MAS: Orders 10 more 737-800s. Malaysia Airlines (MAS) has exercised an option to buy 10 Boeing 737-800s valued at some USD800m (RM2.4b) at curret list prices. MAS still has purchase rights for an additional 10 737-800s remaining from its initial 2008 contract. (Source: The Sun)

Auto: Car sales impacted by amended Act. Stakeholders in the automotive sector say the recent amendments to the Hire-Purchase Act 1967 (HPA) will hurt the car retail trade. Some said the amended Act is confusing and overly protected consumers to the detriment of car retailers. (Source: The Star)

Mining: Vale turns focus to Malaysia. Vale SA has forgone plans to build a distribution centre in China and will focus on making Malaysia its main hub for Asian sales. Vale is investing USD1.37b (RM4.16b) to set up a maritime terminal in Malaysia with capacity to dock its Valemax vessels and handle up to 30m tonnes of iron ore a year starting in the first half of 2014. (Source: Business Times)

Read more...

RHBInvest Research

Tuesday, June 21, 2011

Top Story: Star
Visit Note

  • Still keeping a lookout for media assets
  • Recently, Star acquired Capital FM for a cash consideration of RM15m. In total, Star now owns four radio stations namely 988, Red FM, Suria FM and Capital FM. While this division remains in the red, its losses have been narrowing in recent years and management expects the division to break-even in a few years time.
  • Lowered our fair value to RM3.71 (from RM4.23). As the stock’s potential return is roughly in line with our expected return from the market, we downgrade the stock to Market Perform from Outperform previously.

Read more...

Maybank IB Views

COMPANY UPDATE
Gamuda RM3.74: Buy
Entering an exciting phase Shariah-compliant

Check points ahead. The earnings uptrend should continue with 3Q results expected to track towards expectations. Property sales has again, shot past the internal target, reaching RM1b in just 9 months. The next few months will be exciting as pre-qualification for the MRT underground works have started. Yenso will see its maiden launch in Sept with a stronger indication on the demand momentum by end-2011. We are still positive; Buy (RNAV based TP: RM4.45)

RESULTS REVIEW

Exciting year ahead. FY11 results were in line; net DPS of 21 sen was a marginal 1 sen above forecast. These results are now academic in light of the recently introduced 4D Toto Jackpot which will not only lift lotto but non-lotto revenue. BST remains a Buy; our DCF based TP implies a fair 15.6x 2012 PER for its defensive qualities. At the current share price, the stock still offers attractive net dividend yield of 5.3%.

Technicals
The FBM KLCI lost 4.24 points and ended at 1,559.19 yesterday. Its resistance areas of 1,560 and 1,576 will cap market gains, whilst the obvious support areas are located at 1,533 and 1,558.Due to the US markets’ rebound tone last night, we will see some initial low volume buying activities in the local bourse today.

Trading idea for today is a Short-Term Buy call on SCIENTX.

Other Local News
AirAsia: AirAsia X gests approval for new key routes. Long-haul low-cost carrier AirAsia X Sdn Bhd gets the green light from the Transport Ministry to fly to Istanbul, Beijing, Shanghai, Osaka and Jeddah, sources close to the ministry said. A number of these flights may start as early as August this year. (Source: The Edge Daily)

AirAsia: AirAsia, CAE International plan aviation academy. AirAsia Bhd is teaming up with CAE International Holdings Ltd to set up an aviation academy and has set its sights to be the largest of its kind in Asean. The academy would provide training services for pilots, cabin crew, engineers, ramp handlers, guest services and aviation management. (Source: Bursa Malaysia)

Energy: No subsidy to IPPs. Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui reiterated yesterday that the government has never allocated any form of subsidies for gas sold by Petronas to Independent Power Producers (IPPs). Instead, the lower price for gas sold to IPPs by Petronas is part of its foregone revenue, in line with the government's initiative to ensure that IPPs can maintain a low tariff rate. (Source: The Sun)

Tradewinds Crop: RM60m refurbishment. Tradewinds Corp Bhd is forking out about RM60m to refurbish its hotels to improve its branding and inject a fesh new look. It expects an increase in room rates after the refurbishment in three years time. (Source: The Star)

Transport: 60,000 daily traffic volume seen for new highway. LATAR Expressway (KL-Kuala Selangor Expressway), to be open to the public before the month ends, will see an initial average daily traffic volume of over 60,000 vehicles. The concessionaire of the highway is jointly owned by Bina Puri Holdings Bhd and Arena Irama Sdn Bhd. (Source: The Star)

UEMLand: Sets up Singapore subsidiary. The new subsidiary, Sunrise MS Pte Ltd is to provide consultancy, advisory and technical services relating to project development in Singapore. (Source: Bursa Malaysia)

Read more...

Stocks to watch: BToto, Time Engineering, TimeCom, AirAsia

UALA LUMPUR: Berjaya Sports Toto will be in focus on Tuesday, June 21 following the announcement of its full year financial year results, which were lower than the previous year.

Other counters which could see trading interest are TIME ENGINEERING BHD, TIME DOTCOM BHD, AIRASIA BHD and Muhibbah Engineering Bhd.

BERJAYA SPORTS TOTO BHD’s net profit rose 28.8% to RM104.18 million in the fourth quarter ended April 30, 2011 from RM80.89 million a year ago, boosted by strong record sales.

Revenue rose 5% to RM901.30 million from RM858.29 million while earnings per share were 7.79 sen versus 6.05 sen. It declared tax exempt dividend of three sen per share compared with eight sen a year ago.

For the financial year ended April 30, 2011, the net profit declined by 9.2% to 348,098 from the previous financial year’s RM383.50 million. Revenue inched up 1.28% to RM3.433 billion from RM3.392 billion. The total dividends were 21 sen compared with 57.5 sen a year ago.

Time Engineering fixed the renounceable offer for sale of up 626.18 million shares of Time dotCom Bhd at 53 sen.

Time Engineering said the offer price of 53 sen was 33.75% below the five-day volume weighted average market price up to June 17. Based on Monday’s closing price of 79 sen, this was a discount of 26 sen or 29%.

AirAsia Bhd is teaming up with CAE International Holdings Ltd to set up an aviation academy to provide training services for pilots, cabin crew, engineers, ramp handlers, guest services and aviation management.

The JV company to run the academy will have a paid-up capital of RM165.56 million of which AirAsia’s 50% share, being its capital and investment outlay in the JV shall be satisfied through its assets contribution.

RAM Rating Services Bhd says MUHIBBAH ENGINEERING (M) BHD’s RM130 million Islamic bonds are not affected on the recent news about the receivership status of the owner of the Tanjung Bin petroleum hub project.

It said the group’s stand-alone credit profile was affected by its weaker-than-expected profit performance, balance sheet and debt coverage ratios, as well as its tight liquidity profile.

RAM Ratings said Muhibbah’s outstanding order book of RM2.9 billion as at May19 will sustain the group over the next two years.

It added Muhibbah also derives earnings diversity, from its involvement in the CONSTRUCTION , cranes and shipyard segments. It also enjoys recurring dividend income from its associate stakes in the concessionaire for road-maintenance work in Malaysia and an operator and concession holder for three international airports in Cambodia.

SAAG CONSOLIDATED (M) BHD fixed the issue price for the sixth tranche of the placement of 15 million new shares of 10 sen each under the proposed private placement at an issue price of 10 sen each.

The placement price of 10 sen is 40.85% above the five-day weighted average market price of SAAG shares up to and including June 17 of 7.1 sen per share.

Meanwhile, at Tradewinds PLANTATION Bhd’s AGM, the Minority Shareholders Watchdog Group (MSWG) wants to raise a question about the proposed acquisition of Mardec Bhd which was reduced from RM150 million to RM140 million taking into account Ernst & Young appraisal of the fair value of Mardec group using the hybrid methodology.

MSWG will also query the company about the five-year financial performance of Mardec, including latest results.

At Ho Hup Construction Co Bhd’s AGM, the MSWG will ask the board to explain the implication of the auditors’ continued disclaimer of opinion.

The MSWG also wants to know how confident is the board that the proposed PN17 regularisation plan would eliminate the accumulated losses and turn around the group.UALA LUMPUR: Berjaya Sports Toto will be in focus on Tuesday, June 21 following the announcement of its full year financial year results, which were lower than the previous year.

Other counters which could see trading interest are TIME ENGINEERING BHD, TIME DOTCOM BHD , AIRASIA BHD and Muhibbah Engineering Bhd.

BERJAYA SPORTS TOTO BHD []’s net profit rose 28.8% to RM104.18 million in the fourth quarter ended April 30, 2011 from RM80.89 million a year ago, boosted by strong record sales.

Revenue rose 5% to RM901.30 million from RM858.29 million while earnings per share were 7.79 sen versus 6.05 sen. It declared tax exempt dividend of three sen per share compared with eight sen a year ago.

For the financial year ended April 30, 2011, the net profit declined by 9.2% to 348,098 from the previous financial year’s RM383.50 million. Revenue inched up 1.28% to RM3.433 billion from RM3.392 billion. The total dividends were 21 sen compared with 57.5 sen a year ago.

Time Engineering fixed the renounceable offer for sale of up 626.18 million shares of Time dotCom Bhd at 53 sen.

Time Engineering said the offer price of 53 sen was 33.75% below the five-day volume weighted average market price up to June 17. Based on Monday’s closing price of 79 sen, this was a discount of 26 sen or 29%.

AirAsia Bhd is teaming up with CAE International Holdings Ltd to set up an aviation academy to provide training services for pilots, cabin crew, engineers, ramp handlers, guest services and aviation management.

The JV company to run the academy will have a paid-up capital of RM165.56 million of which AirAsia’s 50% share, being its capital and investment outlay in the JV shall be satisfied through its assets contribution.

RAM Rating Services Bhd says MUHIBBAH ENGINEERING (M) BHD ’s RM130 million Islamic bonds are not affected on the recent news about the receivership status of the owner of the Tanjung Bin petroleum hub project.

It said the group’s stand-alone credit profile was affected by its weaker-than-expected profit performance, balance sheet and debt coverage ratios, as well as its tight liquidity profile.

RAM Ratings said Muhibbah’s outstanding order book of RM2.9 billion as at May19 will sustain the group over the next two years.

It added Muhibbah also derives earnings diversity, from its involvement in the CONSTRUCTION, cranes and shipyard segments. It also enjoys recurring dividend income from its associate stakes in the concessionaire for road-maintenance work in Malaysia and an operator and concession holder for three international airports in Cambodia.

SAAG CONSOLIDATED (M) BHD fixed the issue price for the sixth tranche of the placement of 15 million new shares of 10 sen each under the proposed private placement at an issue price of 10 sen each.

The placement price of 10 sen is 40.85% above the five-day weighted average market price of SAAG shares up to and including June 17 of 7.1 sen per share.

Meanwhile, at Tradewinds PLANTATION Bhd’s AGM, the Minority Shareholders Watchdog Group (MSWG) wants to raise a question about the proposed acquisition of Mardec Bhd which was reduced from RM150 million to RM140 million taking into account Ernst & Young appraisal of the fair value of Mardec group using the hybrid methodology.

MSWG will also query the company about the five-year financial performance of Mardec, including latest results.

At Ho Hup Construction Co Bhd’s AGM, the MSWG will ask the board to explain the implication of the auditors’ continued disclaimer of opinion.

The MSWG also wants to know how confident is the board that the proposed PN17 regularisation plan would eliminate the accumulated losses and turn around the group.

Read more...

Maybank IB Views

Monday, June 20, 2011

RESULTS REVIEW
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.

Technicals
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)

Read more...

Talam 1Q net loss RM25.97m vs net profit RM1.56m yr ago

Saturday, June 18, 2011


TALAM Weekly Chart

KUALA LUMPUR: Talam Corp Bhd posted net loss of RM25.97 million in the first quarter ended April 30, 2011 compared with net profit of RM1.56 million a year ago as it was impacted by the high administrative and finance costs totaling RM32.49 million.

It announced on Friday, June 17 that its revenue was RM13.18 million compared with RM23.26 million a year ago due to lower gross profit and other operating income, as well as higher administrative and finance costs.

Its loss per share was 0.72 sen versus earnings per share of 0.06 sen. Its net asset per share was 17 sen.

Talam said administrative and other expenses totalled RM14.94 million while finance costs were RM17.55 million.

When compared with the financial performance in the preceding quarter ended Jan 31, the revenue for the first quarter ended April 30 fell 77% from RM57.83 million. However, the loss before tax of RM26.31 million was lower than the RM70.92 million in the preceding quarter.

“The improved results for the current year quarter is mainly due to lower level of impairment losses allowed for development land of the group,” it said.

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New Myvi 2011 - Specifications and prices


New Myvi 2011 - Specifications and prices

1.3 SX STANDARD
On the road price RM 43,900
Monthly payment 9 years RM 480.95

1.3 EZ STANDARD
On the road price RM 46,900
Monthly payment 9 years RM 513.82

1.3 SXI PREMIUM
On the road price RM 46,900
Monthly payment 9 years RM 513.82

1.3 EZI PREMIUM
On the road price RM 49,900
Monthly payment 9 years RM 546.70

1.3 SXE ELEGANCE
On the road price RM 53,900
Monthly payment 9 years RM 590.53

1.3 EZE ELEGANCE
On the road price RM 56,900
Monthly payment 9 years RM 623.41

more details: perodua

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Maybank IB Views

Friday, June 17, 2011

Star Publications (Malaysia) RM3.39: Hold
Diversifying media assets Shariah-compliant

Near-term catalysts yet to emerge; maintain Hold. On the positive side, indications thus far are that the recent electricity tariff hike has had little impact on ad spend. Furthermore, circulation appears to be leveling off after five years of slippage. Nevertheless, current valuations are reflective of its near-term outlook on tapering single digit earnings growth after a strong rebound last year. We maintain our earnings estimates and RM3.69 SOP TP which implies 12.6x 2012 PER.

Technicals
The FBM KLCI lost 1.95 points and ended at 1,554.24 yesterday. Its resistance areas of 1,555 and 1,576 will cap market gains, whilst the obvious support areas are located at 1,533 and 1,553. Due to the US markets’ mixed tone last night, we will see some initial low volume buying activities in the local bourse today.

Trading idea is a Take Profit call on MUHIBAH.

Other Local News
Perodua: 10,000 orders for new Myvi so far, New Myvi to make Indonesian debut. Perodua has received about 10,000 orders for the new Myvi since booking was opened on June 4 and it expects between 8,000 and 8,500 units to be sold monthly. Separately, the new Perodua Myvi will soon make its debut in the Indonesian market, marking Perodua's first foray there. 500 units of the new Myvi will be shipped to Indonesia this month, while the official launch there will take place next month. (Source: Business Times)

MAS: May boost fleet to tap Oneworld network. Malaysia Airlines' entry into the Oneworld airline alliance may see it ordering more planes. MAS will be attending the Paris Air Show next week, and an announcement on new orders is largely expected. (Source: Business Times)

AirAsia: To announce aircraft orders at Paris Air Show. AirAsia is aiming to conclude negotiations soon so that it can make a landmark aircraft order to double its fleet at the Paris Air Show. (Source: The Star)

UEM Land: Targets RM5b GDV in 2011. UEM Land Holdings Bhd is planning to launch projects with a total gross development value (GDV) of RM5b this year, as it aspires to see its revenue grow by 50%. (Source: The Edge Financial Daily)

KPJ: To build specialist centre in Iskandar. KPJ Healthcare Bhd has received approval for zoning from the Health Ministry to set up a new specialist hospital at Bandar Dato Onn in a collaboration with Johor Land Bhd. (Source: The Star)

Plantation: Malaysia wins case against Aussie palm oil labeling Bill, Malaysia is largest producer of certified, sustainable palm oil. Malaysia has won its case against Australia's proposed Truth in Labelling - Palm Oil Bill. The Community Affairs Legislative Committee of the Australian Senate in Canberra has recommended that the Bill not be passed. Separately, Malaysia is now the world's largest producer of certified and sustainable palm oil, accounting for half of the 4.2m tonnes of globally certified and sustainable palm oil to date carried out by the Roundtable on Sustainable Palm Oil (RSPO). (Source: Business Times)

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RHBInvest Research - Brief Note

Briefing Note
Malton’s RM3bn worth of projects implies that earnings growth is likely to come in stronger going forward. Averaging the total GDV over five years, this suggests annual property development sales of RM500-600m, almost double the total FY10 turnover for the division. Key upcoming projects include Nova Saujana (GDV RM305m), Sungai Long (RM543m), and Sungai Buloh (RM516m).

Petra Perdana: Fleet consolidation

Outperform

News Update
The company announced yesterday that it had terminated the bareboat charter and option arrangements with Mount Tahan LLC for the 12,000 bhp vessel, Petra Majestic. The company entered into the arrangement in Mar 2010 and we understand it is one of two 12k bhp vessels under bareboat charter with Mount Tahan LLC.

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Maybank IB Views

Thursday, June 16, 2011

COMPANY UPDATE
IOI Corporation RM5.30: Hold
"Planting" investment properties Shariah-compliant

On accelerated property capex. The recent foray into South Beach and IOI Resort City's development plans are set to accelerate IOI Corp's property capex spending by ~RM2.3b over the next 3 years, with 78% of these channeled to build its property investment portfolio. Investors looking for greater exposure to plantation have been slowly shying away from IOI. IOI lacks immediate re-rating catalyst, especially with limited earnings upside from its matured plantation while the new property ventures do not bring in immediate earnings; they are largely for investments. Our revised TP of RM5.50 on 16x FY12 EPS is based on 1-SD below its 5-year historical mean PER. Maintain Hold.

Top Glove Corporation RM5.26: Hold
Needs more visibility on latex glove demand Shariah-compliant

Valuations not cheap. The upcoming 3QFY11 results (expect to be flat QoQ) could mark the long-awaited inflexion point for the company's earnings, as contributions from new capacity kick in, and as distributors start to replenish stockpiles. We nevertheless feel that valuations do not justify a buy on the stock at current levels, with Top Glove trading at a CY12 PER of 16x versus its peer average of 7x. We cut our FY11 earnings by 14% and 3-4% for FY12-13. Maintain Hold and DCF-derived TP of RM5.10.

Technicals
The FBM KLCI gained 7.68 points and ended at 1,556.19 yesterday. Its resistance areas of 1,558 and 1,576 will cap market gains, whilst the obvious support areas are located at 1,533 and 1,556.Due to the US markets’ weaker tone last night; we will see some initial low volume selling activities in the local bourse today.

Traiding idea is a Short-Term Buy call on AEONCR.

Other Local News
RHBCap: Aabar to buy ADCB's stake. Aabar Investments, the investment arm of Abu Dhabi government, intends to buy a 25% equity stake in RHB Capital Bhd from Abu Dhabi Commercial Bank at RM10.80 per share. (Source: The Edge Financial Daily)

Sunway-Suncity: Merger gets nod. Shareholders of Sunway Holdings Bhd and Sunway City Bhd have approved the proposed disposal of the two companies' assets and liabilities to Sunway Bhd at their EGMs. A new Sunway entity is expected to be listed on the Main Market of Bursa Malaysia in the third quarter of this year. (Source: The Edge Financial Daily)

TNB: Buys big supply of fuel oil. Tenaga Nasional Bhd (TNB) has bought more than 200,000 tonnes of fuel oil, for delivery between April and August, in addition to buying electricity from Singapore utility PowerSeraya. The fuel oil volumes were the largest TNB has purchased in at least five years. (Source: The Star)

Alam Maritim: Bids for RM400m to RM500m jobs. Alam Maritim Resources Bhd is bidding for RM400m to RM500m worth of contracts in offshore installation and construction (OIC) as well as offshore support vessel (OSV) services sector. (Source: The Star)

Construction: Eversendai to bid for RM1b-RM1.5b projects. Soon-to-be-listed structural steel construction and engineering company Eversendai Corp Bhd aims to bid for an additional RM1b to RM1.5b worth of projects for the rest of the year, after having secured almost RM350m so far this year. (Source: The Edge Financial Daily)

Property: 1MDB inks deal to kickstart Bandar Malaysia. 1MDB Bhd has signed several agreements that will pave way for the development of Bandar Malaysia, a mixed property project, on the site of the old Sungai Besi airport land. (Source: The Edge Financial Daily)

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RHBInvest Research

Top Story: Gamuda

Results Preview
9MFY07/11 results to meet expectations
Fair value is RM4.03. Maintain Market Perform.

Corporate Highlights


CMMT:

Briefing Note
Big development potential for East Coast Mall
We maintain our fair value of RM1.23. Maintain Market Perform.

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Maybank IB Views

Wednesday, June 15, 2011

COMMENTS ON NEWS
CapitaMalls Malaysia Trust RM1.17: Buy
Buys shopping mall in Kuantan Shariah-compliant

A yield-enhancing acquisition. We are positive on CMMT's latest RM310m East Coast Mall acquisition given that it is yield accretive and attractive in pricing. More importantly, it would enhance our 2012-13 earnings forecasts by 10-11%. The purchase will be funded by a placement of up to 299m new units (est. RM332m proceeds assuming RM1.11 issue price). We maintain our forecasts and RM1.27 TP. Buy.

Technicals
The FBM KLCI gained 2.63 points and ended at 1,548.51 yesterday. Its resistance areas of 1,551 and 1,567 will cap market gains, whilst the obvious support areas are located at 1,530 and 1,548.Due to the US markets’ firm tone last night; we will see some initial low volume buying activities in the local bourse today. The market could possibly gap-up, with slim chances of follow-through buying.

Daily trading idea is a Short-Term Buy call on FAVCO.

Other Local News
TNB: Unit wins job in Pakistan. Tenaga Nasional Bhd's (TNB) unit TNB Repair and Maintenance Sdn Bhd (TNB Remaco) has secured an operation and maintenance agreement worth USD14.1m (RM43m) from Pakistan's Laraib Energy Ltd. Under the contract, TNB Remaco will provide services for an initial period of five years with an option of extending for another seven years. (Source: The Star)

MBM: To conclude talks in 12 mths. MBM Resources Bhd, which has allocated RM250m for capital expenditure, is expecting to conclude talks with an international firm in the next 12 months to set up an assembly plant locally. (Source: The Edge Financial Daily)

PetDag: Plans 50 new stations. Petronas Dagangan Bhd will invest up to RM400m to set up between 30 and 50 petrol stations, annually, over the next five years. (Source: The Star)

MRCB: Poised to clinch RM800m LRT contract. Malaysian Resources Corp Bhd (MRCB) is poised to secure soon a contract worth as much as RM800m from Syarikat Prasarana Negara Bhd. The contract is for civil works for phase two of the Ampang light rail transit (LRT) extension line linking Putra Heights to Shah Alam, Selangor. (Source: Business Times)

Plantation: MSM prices IPO shares at RM3.50 each. MSM Malaysia Holdings Bhd has priced its initial public offering (IPO) at RM3.50 per share for institutional investors. (Source: The Star)

Economics: Government seeks extra operating expenditure. The Government tabled a bill seeking a supplementary allocation of RM13b for operating expenditure, raising the spending budget for this year by 8% to RM176b. RM6b will be allocated to the Finance Ministry which includes RM5.6b subsidy for petroluem products. RM1.5b will be for Education Ministry and RM1b to Health Ministry. (Source: The Star)

Economics: Exports to hit RM700b in 2011, FDI to at least match RM29b recorded in 2010. Exports is expected to rise 9.5% to RM700b in 2011 from RM639.4b recorded last year, while FDI into Malaysia could at least matched if not surpassed last year's figure of RM29b, according to MITI. (Source: The Star)

Economics: Government expands the ban on subsidised RON95 sales to now include foreign-registered vehicles (except motorcycles) driven by Malaysians effective immediately. Previously, Malaysians driving foreign-registered vehicles need to show their MyKads. The ban also includes sales of subsidised NGV. (Source: The Star)

Economics: Minimum wage by year-end?Minimum wage policy could be implemented by year-end, according to PM. The National Wage Consultation Council Bill 2011 will be presented to Cabinet by the Human Resource Ministry before its tabling in the current Parliament's session. (Source: NST)

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RHBInvest Research

Healthcare:

Sector Update

  • Sime Darby Healthcare Group is set to establish two new specialist hospitals in Ara Damansara and ParkCity respectively.
  • We believe the opening of two new hospitals will not have a significant impact on KPJ. KPJ’s Damansara Specialist is well established and currently operating at full capacity.
  • We reiterate our Outperform call on KPJ (FV=RM4.94) given its stable growth profile and relatively inexpensive valuations compared to regional peers. We remain positive on Malaysia’s healthcare industry as healthcare remains an integral part of the Government’s initiative to develop Malaysia as a high income nation by 2020. However, given our more cautious view on the rubber glove players, we maintain our Neutral call for the sector.

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Maybank IB Views

Tuesday, June 14, 2011

COMPANY UPDATE
KNM Group RM1.90: Hold
Brace for further headwinds Shariah-compliant

Cut forecasts, downgrade to Hold. Our initial forecasts are too optimistic and management is guiding for lower profits as earnings could remain weak over the next few quarters. This is disappointing for we had expected earnings to rebound on the new orders secured in the past 12 months. The financing for the Peterborough project is still unresolved. We lower our target price to RM2.00 based on reduced PE multiple target of 10x (previously 14x) as we also cut earnings forecasts.

Petronas Chemicals RM7.06: Buy
Missed the first party, but there is another one coming Shariah-compliant

Power tariff hike impact negligible. We have imputed the impact of the electricity tariff hike by Tenaga Nasional which is rather negligible at only ±RM20m p.a. This does not change the Company fundamentals at all and we remain bullish with the high product prices and strong demand. Our concern lies with the uncertainty of gas supply due to the on-going maintenance work from its supplier. We rollover valuations to 2012 earnings and maintain BUY with a higher TP of RM8.15 (+2%), based on 13.5x PER - in line with industry's historical average PER.

ECONOMICS
Economic Transformation Programme (ETP)
Update #6…

PM announced additional 15 projects, initiatives and enablers in the sixth ETP update, involving RM63.38b investments under 11 Entry Point Projects (EPPs) in seven National Key Economic Areas (NKEAs) that will generate RM66.31b in gross national income (GNI) and create 63,531 new jobs. The biggest project is the RM60b Refinery And Petrochemical Integrated Development (RAPID) in Pengerang, Johor. So far, execution of ETP has seen confirmation of 65 EPPs (49.6% of the targeted 131) under 11 NKEAs with investment value of RM169.78b (21.4% of the targeted RM794.5b EPP investments) that are expected to raise RM220.15b in GNI (49.6% of the targeted RM1.1tr) and create 362,396 jobs (11% of the targeted 3.3m). ETP rollout is having visible positive impact on actual investment as per the data on business loans growth, PDS issuance and FDI int he first three to four months of 2011.

Technicals
The FBM KLCI fell 10.31 points and ended at 1,545.88 yesterday. Its resistance areas of 1,545 and 1,565 will cap market gains, whilst the weaker support areas are located at 1,527 and 1,540. Due to the world markets' quiet tone last night, we will see some boring and low volume-trading activities in the local bourse today. We expect the FBM KLCI to remain benign today, as the local market could remain lacklustre.

Trading Idea for today is a Take Profit call on MPHB

Other Local News
Banking: Maybank's proposal for RHB stake soon. Malayan Banking Bhd (Maybank) will be making a proposal to acquire RHB Capital Bhd before the end of this month, according to Maybank's chairman Tan Sri Megat Zaharuddin Megat Mohd Nor. (Source: The Star)

RHBCap: ADCB in need of cash. Abu Dhabi Commercial Bank's (ADCB) plans to hive off its 25% stake in RHBCap to Aabar Investments could be due to need of cash to settle some of its debts that will be due soon. (Source: The Star)

Alam Maritim: Wins RM52m job. Alam Maritim Resources Bhd (AMRB) has been awarded a contract valued at RM52m from Samsung Engineering Malaysia Sdn Bhd to supply engineering work, supply of materials, fabrication, load-out and commissioning of two units of single point mooring buoy for Sabah Oil and Gas Terminal project. (Source: Bursa Malaysia)

KFC: RM23m for 25 new outlets in the country. KFC Holdings (Malaysia) Bhd will spend around RM23m to open 25 new outlets in Malaysia by year-end. Around 10 outlets will be in the form of "drive-thru", and the balance will be normal outlets. (Source: Business Times)

Sime: To invest RM280m in two new hospitals. Sime Darby Bhd's healthcare unit will invest RM280m in two new hospitals in the Klang Valley under the government's Economic Transformation Programme (ETP). The segment is expected to contribute about 20% of the company's revenue in next three to five years. (Source: Business Times)

MMC: Malakoff Clinches 1,000MW tender. Malakoff Corp Bhd which is 51% owned by MMC has won the tender to build a 1,000MW coal-fired facility at its existing site in Tanjung Bin, Johor. (Source: Bursa Malaysia)

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Mutiara Goodyear to launch projects with GDV of RM1.3bil

Monday, June 13, 2011

Saturday June 11, 2011
Mutiara Goodyear to launch projects with GDV of RM1.3bil

KUALA LUMPUR: Property developer, Mutiara Goodyear Development Bhd expects to launch several mixed development projects amounting to RM1.3bil in gross development value (GDV) this year, said its executive chairman Hamidon Abdullah.

Among the upcoming launches are Nadayu 28 Sunway, Nadayu 290 Penang and Nadayu Cyberjaya, Hamidon told reporters after the company's annual general meeting here yesterday.

“We have successfully launched Nadayu 92 in Kajang with overwhelming response. We launched 286 units of link houses, four units of bungalows and 24 units of semi-detached homes,” he said.

According to Hamidon, the Nadayu 28 Sunway project meanwhile will comprise 10 units of shoplots and 411 condominium units while Nadayu 290 will have 142 units of condominiums and seven units of villas.

The company which has vast experience in commercial and residential developments currently has a land bank of 876 acres.

Asked on the proposed change in the company name to Nadayu Properties Bhd, Hamidon said it was part of its branding strategy to establish the Nadayu brand for all its property development projects.

It would be in line with the group's objective to maintain strength and value in product quality, project execution and timely delivery while it pursues its vision of becoming an innovative property developer in the local and global market, he added. Bernama

source: thestar

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Samsung Galaxy Tab - All The Great Features (Official Promo Video) [HD]

Sunday, June 12, 2011



Samsung Galaxy Tab is loaded with superb cool features, and is going to give the iPad a real tough fight. The widgets interface is specifically neat!
The video shows other features, all titled under the "It's Go Time" slogan.
For more check out http://galaxytab.samsungmobile.com

Features presented:
- Widgets (probably the highlight feature of Android so far)
- Google maps navigation
- Music & Videos portal
- Emails
- 4 e-books apps (very cool)
- 32GB SD memory slot (yes! finally a freedom from storage tyranny)
- Stream to any monitor (yet another neat capability)
- 7 Hours battery life
- Front webcam for video chat
- Adobe Flash support for games and apps (well, surely that you won't have on the iPad).

http://youtu.be/tHOZZJ_2Wjg?hd=1


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Stocks to watch: United U-Li, Top Glove, oil and gas, Mutiara

Saturday, June 11, 2011

KUALA LUMPUR: Investors could stay cautious in the week ahead, as reflected in the lacklustre volume over the past week while on Wall Street, the Dow and S&P 500 closed out their sixth week of losses on Friday, June 10.

Further signs of a global economic slowdown set the stage for more losses ahead, Reuters reported.

The deepening gloom raised the prospect for the S&P, which suffered its worst week since August 2010, to break below the year's low of 1,250 next week.

The Nasdaq wiped out its yearly gains on Friday and also posted its biggest weekly decline since August 2010, as the latest deterioration in sentiment came on fear of flagging Chinese growth and fresh worries about Greece's debt crisis.

The Dow closed below 12,000 for the first time since mid-March.

Analysts said the end of June would demarcate the end of the US Federal Reserve’s second round of quantitative easing, known as QE2.

The US central bank bought US$600 billion in government bonds since November. That has pumped liquidity into financial markets, helping to drive up stock prices and, some argue, commodity prices as well, according to Reuters.

China is also due to announce its producer price index and inflation report for May. Also in the pipeline would be be the industrial production in May. In April, production rose 13.4% on-year.

The director of OSK Research, Chris Eng said the Malaysian market this week was largely within expectations in that the broader market suffered from lower volume although financial stocks such as Hong Leong Bank, ALLIANCE FINANCIAL GROUP BHD [] and Aeon Credit Bhd saw a bit of interest.

“Out of the two IPOs, UOA Development Bhd was a bit of a disappointment as we had expected more premium given the size of the company as top property company in Malaysia,” he said.

However, Eng said for the week ahead, he expected the market to creep upwards although the 1,565 resistance was still formidable.

“We continue to promote our Top 10 2H2011 Buys over the longer term as their fundamentals remain intact and newsflow should be positive in a somewhat volatile market. Thus far, out of the Top 10, KPJ HEALTHCARE BHD [], KENCANA PETROLEUM BHD [] and AIRASIA BHD [] have already started to outperform,” he said.

Goldman Sachs Research’s move to raise Malaysia to overweight due to its improving top-down policy and defensive character could shore up sentiment.

The four factors were a favourable macro back group, market composition, clear development policies and earnings growth of 15%.

Goldman Sachs was also positive on the government’s clear and specific policies to spur Malaysia’s development into a high income nation by 2020 through its Economic Transformation Programme (ETP) and Government Transformation Programme (GTP).

“We believe investors are not fully aware of these efforts and that this ‘investible gap’ constitutes an attractive investment opportunity,” it said.

Prime Minister Datuk Seri Najib Razak is scheduled to provide a progress update on the ETP on Monday.

On the home front, CIMB Equities Research said transformation remains the watchword and re-rating catalyst for Malaysia, which is reinventing itself through reforms that kicked off in 2004 with the GLC transformation and widened to the government and economic spheres in 2009.

“This set in motion a re-rating of the market over the past one to two years and will remain the key catalyst for the market in the near term. The monthly announcements of entry point projects have had a positive impact on tourism, CONSTRUCTION [], property, oil & gas and TECHNOLOGY [] companies.

“We should continue to see newsflow on this front for the next six months. Meanwhile, another transformation is quietly taking place in the political arena, which is timely as the general elections must be held by 2Q2013. We continue to overweight Malaysia and maintain our end-2011 FBM KLCI target of 1,700, based on 14.5 times calendar year

2012 price-to-earnings,” said CIMB Research.

Oil and gas and the supporting industries will continue to see trading interest, especially after Petroliam Nasional Bhd revised its five-year capital expenditure from RM250 billion to RM300 billion. The larger capex will benefit the broader sector, with drillers and fabricators being the big winners, CIMB Research said.

“Local companies with drilling rigs are SAPURACREST PETROLEUM BHD, Kencana and UMW HOLDINGS BHD. SapuraCrest’s and Kencana’s collective six tender rigs are typically used in production drilling while UMW’s jack-up rigs Naga 2 and Naga 3 are more suitable for exploration drilling. Kencana is in a unique position because it is also a drilling rig fabricator.

Another stock which could see trading interest on Monday include UNITED U-LI CORPORATION BHD which will resume trading after announcing it was selling its three wholly-owned subsidiaries for RM200 million to Legrand France, SA.

U-Li Corp would sell its entire stakes in United U-LI (M) Sdn Bhd, United U-LI Steel Service Centre Sdn Bhd and Cable-Tray Industries (M) Sdn Bhd. U-Li Corp manufactures cable support systems and light fittings and it reported it posted net profit of RM3.28 million on the back of RM34.44 million in revenue.

Analysts said their break out value for U-Li XCorp indicated it would be worth RM2.12 per share. The RM200 million cash consideration alone works out to RM1.52 per share. Based on 30% discount, they expected U-Li Corp to trade around RM1.50 upon listing. The price will eventually improve when news of cash distribution is firmed up.

Top Glove Corp Bhd will also in focus ahead of the release of its third quarter results for the period ended May 31 on Friday, June 17.

AmResearch is maintaining its Sell rating on the glove maker and cut its fair value from RM4.30 share to RM3.90, based on a price-to-earnings of 15 times CY12F earnings – at parity to the stock’s 10-year mean.

“We understand lacklustre demand for natural rubber (NR) gloves and persistently strong headwinds remained as the main culprits, the same reasons which dragged down earnings in the previous quarters. 9MFY11F net profit would be flattish on a sequential basis, at best,” it said.

Meanwhile, property developer MUTIARA GOODYEAR DEVELOPMENT Bhd plans to undertake a commercial and residential project with gross development value of RM1.2 billion on the prime land it is acquiring from UDA Holdings Bhd.

The 1.4ha (3.6 acre) freehold site near the Sheraton Imperial Hotel along Jalan Sultan Ismail in Kuala Lumpur has been valued at RM215.5 million.

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Motorola Xoom - Android 3.0 Tablet

Motorola Zoom - Android 3.0 Tablet

Motorola Xoom Spec

OS Android 3.0 (Honeycomb)
Dimensions 249.1mm (h) x 167.8mm (w) x 12.9mm (d)
Display 10.1 inches 1280×800 resolution
Resolution 1280×800
Weight 730g
Processor 1GHz Dual-core processor NVIDIA Tegra 2
Battery Up to 10 hour video playback
Connectivity 3.5mm, micro USB 2.0 HS, Corporate Sync, Wi-Fi 2.4GHz & 5GHz 802.11b/g/n, Bluetooth 2.1 + EDR + HID
Network 3G, 4G LTE upgradeable, 802.11n w/Personal Hotspot
Messaging/Web/Apps Email (Corporate Sync, Google Mail, POP3/IMAP embedded, Push Email, Yahoo Mail) , WebKit w/ Flash
Audio AAC, AAC+, AMR NB, AMR WB, MP3, XMF
Video 720p capture/1080p playback/streaming, H.263, H.264, MPEG4
Camera 5 MP rear-facing camera with dual LED flash and 2MP front-facing camera
Memory 32GB on board user memory, SD card support after software update, 1GB DDR2 RAM
RAM 1GB DDR2
Input Touch Screen with pinch-to-zoom navigation

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RHBInvest Research

Friday, June 10, 2011

Top Story: Insurance – Malaysian Takaful Industry Neutral

Sector Update
Since 2003, general Takaful and family Takaful new contributions have grown at a CAGR of 18.8% and 26.1% respectively. Comparatively, the general insurance and life insurance new business premiums only grew by a CAGR of 6.3% and 8% respectively during the same period but from a larger base.

Corporate Highlights

SP Setia: Expect a stronger 2HFY11 Outperform

Results Note
SP Setia’s 2QFY11 core net profit came in marginally below our expectation and market consensus. Headline net profit of RM92.2m was skewed by a one-off gain from the disposal/transfer of Tenby School complex from Setia Alam to Eco Park amounting to about RM30m.

UEM Land: First foray into retail development Market Perform

News update
A 55:45 JV between ULHB and Iskandar Harta Holdings (IHH) will undertake a mixed development project known as “Lifestyle Retail Mall and Residences @ Medini North” on 2 parcels of land measuring 35 acres in Pulai, Johor. Concurrently, NLSB had also entered into a Lease Agreement with IHH, being the registered owner of the 2 parcels of Medini land, for 99-year lease. Based on a total GFA of 2m sqf and lease consideration of RM100m, this translates into a land cost of RM50 psf.

Parkson – Indonesia Deal Completed Market Perform

Company Update
Parkson announced that it has completed the acquisition of PT Tozy Sentosa (TS) at a total consideration of RM38.7m. As previously highlighted in our report dated 14 Apr, PHB would pay Mitra Samaya (MS), the vendor, RM38.7m for TS, and MS would in turn subscribe to 9.9% of Parkson Asia’s shares for the same consideration of RM38.7m.

RCE: Kowaja issue finally resolved, but with conditions Outperform

News update
RCE announced yesterday that Koperasi Wawasan Pekerja-Pekerja Berhad (Kowaja) has received approval from Suruhanjaya Koperasi Malaysia (SKM) to obtain funding from RCE.

Read more...

Maybank IB Views

COMPANY UPDATE
Malaysia Airports Holdings RM6.53: Buy

Thriving under adversity. MAHB's April 2011 traffic statistics reveal a strong 16.3% YoY passenger growth (4M 2011: +13.0% YoY). This is above industry average and makes MAHB's 2011 guidance of 8% traffic growth look like a pushover target. Cargo volumes shrunk by 6.2% YoY, consistent with the global collapse of the freight market. Maintain Buy; no change to our earnings forecasts and RM7.12/share DCF-based target price.

ECONOMICS
Industrial Production Index (IPI), Apr '11
Unexpected decline to be short-lived…

April's industrial production (IP) growth unexpectedly fall 2.2% YoY (revised Mar '11: +2.9% YoY; Maybank IB: +2.2% YoY; Consensus: +2.5% YoY) as the MoM drop of 7.6% MoM was more than our estimate of a 3% MoM decline. Malaysia joined Singapore and Thailand in posting lower IP in Apr on Japan's supply chain effect, with E&E and auto industries being the drag. However, indicators like Japan's PMI, imports of intermediate goods and manufacturing loans statistics point to a "short-lived" dip.

RESULTS REVIEW
S P Setia RM4.10: Buy
Earnings uptrend continues Shariah-compliant

Reiterate Buy. SPSB's RM121m 1HFY11 core net profit (+35% YoY) track expectations. YTD sales at RM1.7b has also met 55% of its RM3b target for FY11. Including e.RM1.5b sales/bookings from KL Eco City (KLEC), YTD sales would be c.RM3.1b (beats full-year target by 5%). We are bullish on SPSB's 2H performance, driven by strong sales at KLEC and potential RM8-10b GDV worth of new landbank. We maintain earnings forecasts and RM4.75 RNAV-based TP.

Technicals
The FBM KLCI closed marginally lower by 0.90 points and ended at 1,550.89 yesterday. Its resistance areas of 1,554 and 1,568 will cap market gains, whilst the obvious support areas are located at 1,537 and 1,551. We expect the FBM KLCI to remain quiet today, as the initial gains (following the American markets’ rise last night) could be curtailed by the pre-weekend profit-taking activities in the latter part of the day.

Daily trading idea is a Short-Term Buy call on MWE.

Other Local News
MAS: Final assembly of MAS A380 planes begins. The first Malaysia Airlines' (MAS) A380 has entered the Airbus final assembly line in Toulouse, France, for the final production phase. MAS has six A380s on order with deliveries due to begin in 2012. (Source: The Star)

UEM: In RM850m Nusajaya development project with Iskandar. UEM Land Holdings Bhd is collaborating with Iskandar Investment Bhd to develop retail and residential units in Nusajaya, Johor with a gross development value of RM850m. UEM Land owns 55% equity interest in that company while the remaining is under Iskandar. (Source: The Star)

Benalec: Unit target Mid-east investment with OIC Today. Benalec Bhd subsidiary has formed a strategic alliance with OIC Today magazine to attract investment from the Middle East for a proposed mixed commercial and tourism project in Klebang, Melaka. (Source: Business Times)

O&G: Perak approves RM5.8b investment in LNG project. The Perak government has approved a 60-ha site in Tanjung Hantu, Manjung for a liquefied natural gas (LNG) project involving an investment of RM5.8b that would be undertaken by Atigas Technology Sdn Bhd. The government is expected to save RM2b in subsidy a year because Atigas will sell the gas at the same subsidized price. (Source: The Edge Financial Daily)

Banking: Bank Mualamat still in merger mood. Bank Muamalat Malaysia Bhd is still keen to merge with a rival to build a mega Islamic bank, despite its failed attempt at courting Bank Islam Malaysia Bhd. The bank's pursuit of Bank Islam was driven by its largest shareholders' need to pare its stake in the bank and the desire by both its shareholders to create a bigger entity that is more relevant in the market. (Source: Business Times)

Market: MMHE to replace MAS in index. Malaysia Marine and Heavy Engineering will replace Malaysia Airlines in the FTSE Bursa Malaysia KLCI following the semi-annual review of the FTSE Bursa Malaysia Index Series. (Source: The Star)

Read more...

XOX, SP Setia, Favelle Favco, Berjaya Food

KUALA LUMPUR: Stocks which could see trading interest on Friday, June 10 include XOX Group Bhd, which will make its debut on the ACE Market.

Other companies which could see trading interest are SP SETIA BHD, FAVELLE FAVCO BHD, Berjaya Food Bhd and MAA HOLDINGS BHD.

Meanwhile, investors are expected to be cautious also because of the weaker than expected industrial data announced on Thursday. Malaysia’s industrial production index contracted 2.2% on-year in April, the first time in 17 months and CIMB Economics Research said this suggesting a soft patch going into 2Q.

“The contraction was a surprise as we expected an increase of 1.6% while consensus projected 2.5%. In January-April, factory output rose 1.5%,” it said.

CIMB Research said the soft patch in the manufacturing sector, which accounted for 27.6% of total GDP, would weigh on 2Q GDP growth, which it estimated to expand 4% to 4.5%.

“Even though the manufacturing sector has pulled back sharply from its rapid pace, domestic non-tradable sectors, namely the services and CONSTRUCTION sectors, should continue to keep the economy rolling along decently.

“Domestic demand should still call the shots, supported by the stepping up of private investment growth under the Economic Transformation Programme (ETP). As such, we maintain our GDP growth estimate of 5.5% for this year and 6.0% for 2012,” it said.

As for XOX, the mobile virtual network operator reported net loss of RM1.66 million in the quarter ended March 31 mainly due to the selling and distribution expenses which were necessary in creating brand awareness for XOX’s services.

It recorded revenue of RM12.68 million on the back of about 391,000 subscribers. It recorded an average revenue from sales of recharge of approximately RM30 per user per month.

The offer price of the shares is 80 sen. It received 6,652 applications for 106.5 million shares with a total value of RM85.2 million, for the public tranche of 7.5 million shares.

Meanwhile, SP Setia said it was confident that its 2011 sales target of RM3 billion would be met after the company recorded sales of RM1.66 billion in the first seven months of the year.

Net profit for the second quarter ended April 30, 2011 surged 80% to RM92.22 million from RM51.21 million a year earlier, due including to gain from the disposal of an investment property.

Revenue for the quarter rose to RM496.75 million from RM409.07 million a year earlier. Earnings per share were 5.55 sen while net assets per share was RM1.78. It declared a gross interim dividend of five sen per share.

Favelle Favco received four contracts to supply cranes and spare parts totaling more than RM70.3 million. Three of the orders were to supply cranes and the fourth was to supply the spare parts.

Berjaya Food’s net profit slipped 14.2% to RM2.505 million in the fourth quarter ended April 30, 2011 compared with RM2.92 million a year ago due to higher advertising and promotional expenses.

Revenue rose 9% to RM17.75 million from RM16.28 million. Earnings per share were 1.77 sen versus 2.07 sen a year ago. It proposed dividend of three sen a share.

For the financial year ended April 30, 2011, its net profit rose 22% to RM10.59 million from RM8.68 million while its revenue increased by 19% to RM71.94 million from RM60.41 million.

FOCUS DYNAMICS TECHNOLOGIES [] Bhd’s new 144.58 million shares issued under the rights issue with warrants and 96.39 million warrants will be listed and quoted on Friday.

Read more...

RHBInvest Research Sector Call

Thursday, June 9, 2011

Sector Call

Oil & Gas : Petronas 4QFY11 Results- Overweight

Sector Update

  • Petronas’ 4QFY3/11 YTD net profit of RM54bn was up 36.1% yoy mainly on the back of: 1) Higher realised prices of its liquefied natural gas (LNG), petroleum products and crude oil; and 2) Higher sales volume of its petroleum products and petrochemicals. Cumulative tax exempt dividend for 31 March 2011 amounts to RM42bn.
Downstream segment does best on a YTD yoy basis primarily due to:

1) Improved refining margins; and

2) Higher margin recorded by the petrochemical business.

Read more...

RHBInvest Research

Top Story: Oils & Gas - Overweight

Sector Update

Highlights From 16th Asia Oil And Gas Conference (AOGC)


Petronas Chemicals Outperform (FV: RM8.92)

Dialog Outperform (FV: RM3.50)

P Gas Outperform (FV: RM13.95)


Energy demand fundamentals have recovered and global crude oil prices are set to remain in positive territory above US$75/bbl which will support our view that capex for conventional developments (both shallow and deepwater) will continue and drive contract awards. Only beyond US$125/bbl will there be potential demand destruction.

Read more...

Maybank IB Views

Oil & Gas: Overweight
PETRONAS FY11 report card: Quest and request

Balancing aspiration and obligation. We laud PETRONAS' request for a fairer dividend distribution in its quest for growth while keeping its financial discipline. O&G is a capital intensive business and much of the retained earnings is to be essentially set out for new hydrocarbon resources. Higher capex simply translates into higher growth opportunities for the local O&G players. We continue to Overweight the sector. Dialog, Kencana, PGas and SapCrest are our choiced picks.

Technicals
The FBM KLCI closed marginally lower by 0.10 points and ended at 1,551.79 yesterday. Its resistance areas of 1,554 and 1,568 will cap market gains, whilst the obvious support areas are located at 1,537 and 1,551. We expect the FBM KLCI to remain quiet today, as it there may be a spill over of the boring US and regional markets.

Daily trading idea is a Short-Term BUY call on YINSON

Other Local News
TNB: Buys power from Singapore to ensure supply security. Tenaga Nasional Bhd (TNB) is buying power from Singapore-based PowerSeraya Ltd, a unit of YTL Power International Bhd, due to a shutdown of Petroliam Nasional Bhd-owned gas production platforms for maintenance and dwindling gas supply. (Source: The Star)

BJTOTO: May roll out new game on this weekend. Berjaya Sports Toto Berhad is expected to introduce a new game which is believed to be something similar to the 4D Jackpot introduced by Magnum 4D in September 2009. It is likely to help the company to grow its sales and expand its market share. (Source: Business Times)

Latexx: Accepts revised offer from YTY. Rubber gloves maker Latexx Partners Bhd's board has accepted a revised offer of RM1.25b (initially RM1.35b) on its proposed merger with YTY Industry Sdn Bhd. (Source: Bursa Malaysia)

Dijaya: Buys land for RM385m. Dijaya Corp Bhd has acquired 88.5 acres of freehold land in Pekan Country Heights, Selangor, from Chunghwa Picture Tubes (Malaysia) Sdn Bhd for RM385.5m. The land would be transformed into a mixed development comprising residential and commercial elements with an expected gross development value (GDV) of RM2.5b. (Source: The Edge Financial Daily)

MYEG: Set for Kazakh e-services venture. MY E.G. Services Bhd (MYEG) is set to collaborate with Kazakhstan company National Information Technologies JSC (NIT) to introduce e-government services to the republic this year in its first overseas venture. (Source: The Star)

AmFirst: To buy 2 Cyberjaya buildings. AmFirst Real Estate Investment Trust is expected to sign a deal to buy two commercial buildings in Cyberjaya with a combined estimated value of over RM130m. It currently has 6 assets worth RM1.02b. The properties, which are a couple of years old, were identified as Prima 9 and Prima 10. They are both located within the Prima Avenue II development in Cyberjaya. (Source: Business Times)

Read more...

RHBInvest Research

Monday, June 6, 2011

Top Story: Timber

Sector Update
Demand and supply of tropical logs seem to be more well balanced now as a result of improving log supplies and slowdown in logs purchases by Indian buyers. However, log prices have remained firm at current levels.
Maintain Overweight. Top picks are Jaya Tiasa (RM8.33) and Ta Ann (RM8.44).

Sector Call

Auto: Investor Caution Caps Near Tem Sector Performance Neutral

Sector Update

DRB-HICOM: Fair value RM3.05 Outperform (Maintained)

MBM Resources: Fair value RM3.45 Market Perform (Maintained)

Tan Chong: Fair value RM4.90 Market Perform (Maintained)

UMW: Fair value RM7.60 Market Perform (Maintained)

APM: Fair value RM5.40 Market Perform (Maintained)

Proton: Fair value RM3.50 Underperform (Maintained)

Our top pick in the sector is DRB-HICOM while we also see compelling longer-term value in Tan Chong for accumulation on weakness.

Telecoms:

Sector Update
Celcom hops on to TM’s HSBB network
TM benefits from a higher utilisation rate of its HSBB network, as we gather there are minimum commitments involved. We do not expect TM to be a major player in the MVNO space.
Our top pick is Axiata for good growth prospects albeit moderating this year.

Corporate Highlights

AEON:

News Update
Purchasing Land In Sungai Petani
Fair value remains at RM5.83. Maintain Underperform.

Read more...

Maybank IB Views

ECONOMICS
External Trade, Apr 2011
A mixed bad of data

Exports growth in Apr '11 accelerated to +11.1% YoY (Mar '11: +4.1% YoY; Maybank IB: +14.8% YoY; Consensus: +11.3% YoY) while imports growth moderated to +9.4% YoY (Mar '11: +12.1% YoY; Maybank IB: +13.9% YoY; Consensus: +10.8% YoY) resulting in RM11b trade surplus. From the previous month, both exports and imports fell by 6.6% MoM and 7.4% MoM respectively.

SECTOR UPDATE
Construction: Overweight
Reasons to be patient

Maintain Overweight. The construction sector has yet to perform (KLCON: +0.2% YTD vs. KLCI: +2.7%) on slow award flows. Although frusfrating, we believe the critical issue is timing rather than project cancellations. The Klang Valley light rail transit (LRT) extension Package B is at the final stage of award which should provide some cheers soon. Also, last week's game changer in the signing of Bakun's electricity sale brings clarity in new infrastructure works in Sarawak. Our top pick is Gamuda, followed by WCT and Hock Seng Lee (HSL).

Technicals
The FBM KLCI closed higher by 1.81 points to close at 1,559.85 last Friday. Its resistance areas of 1,562 and 1,576 will cap market gains, whilst the support areas are located at 1,539 and 1,559. Due to the world markets’ poor tone last Friday; we will see some volatility in the local bourse today.

Daily trading idea is a SHORT-TERM BUY call on SOP.

Other Local News
MAS: Confident despite escalating fuel price. Malaysia Airlines (MAS) has recorded 18% higher international pre-loads this year compared with 2010. Overall, when combined with the domestic sector, its pre-load factor was up by 10% YoY. (Source: The Star)

SP Setia: Plans RM2.8b projects. SP Setia Bhd will redevelop the Sri Johor, Sri Pulau Pinang and Sri Melaka low-cost apartments and the Taman Ikan Emas low cost homes in Bandar Tun Razak, Cheras at a total development value of RM2.8b. (Source: The Star)

Nestle: Not ruling out expansion of coffee plant. Nestle (Malaysia) Bhd will not rule out the possibility of expanding its coffee manufacturing facility in Malaysia as it expects surging demand for coffee. (Source: Business Times)

Scomi: Bags RM2.6b Brazilian monorail deal with partners. Scomi Engineering Bhd and its consortium partners have clinched a RM2.6b contract to build a monorail line in Sao Paulo, Brazil. Its scope of work in the consortium involved the supply of rolling stock, the vehicle management system, design for switches, system integration, system assurance as well as testing and commissioning. (Source: Bursa Malaysia)

Mudajaya: Gets letter of intent for RM720m job. Mudajaya Group Bhd has received a letter of intent to undertake subcontract works worth RM720m for Manjung Power Plant. (Source: Bursa Malaysia)

Eversendai: RM270m from its IPO for CAPEX. The listing of Eversendai Corp Bhd on the Main Market of Bursa Malaysia on July 1 will raise RM270m for the company for capital expenditure. Its founder Datuk A.K. Nathan will realise a gain of RM130m for selling 30% of the company he pioneered 27 years ago. (Source: The Star)

Read more...

Stocks to watch Scomi, Mudajaya, Privasia, Inari, Century Software, banks

Sunday, June 5, 2011

KUALA LUMPUR: Investors are likely to tread cautiously in the week beginning Monday, June 6 following the less-than-encouraging close at Wall Street last Friday on the back of grim employment data.

Asian markets too have yet to fully find solid footing after volatile trading last week, weighed by worries of a prolonged global economic slowdown as well as the motion of no confidence that was brought against the Japanese Prime Minister.

Although the Prime Minister Natao Kan survived the vote of no confidence, squabbling quickly resurfaced after his comments suggested he wanted to stay on until damaged reactors at the disabled Fukushima nuclear plant achieved a stable "cold shutdown", a process expected to take at least until January and probably longer, according to Reuters.

Wall Street capped off a fifth straight week of losses on Friday and Treasuries rose as much slower-than-expected US job growth stoked fear that the world's largest economy was in a protracted slowdown, according to Reuters.

The jobless rate rose to 9.1% in May as high energy prices and the effects of Japan's earthquake bogged down the economy, it said.

The Dow Jones Industrial Average shed 0.79% to 12,151.26, the S&P 500 Index fell 0.97% to 1,300.16 while the Nasdaq Composite Index lost 1.46% to 2,732.78.

MIDF Research head Zulkifli Hamzah said the FBM KLCI ended May in the positive territory, adding that this was a good sign for the market in June.

“MIDF Research anticipates another gainful month for equity although historically June tends to be quieter, both from volume and price action perspective.

“From corporate angle, there is not much to expect from the market this week. We are still in school holiday and that tends to be associated with less local participation,” he said.

Among the stocks to watch on Monday are SCOMI ENGINEERING BHD, MUDAJAYA GROUP BHD, Privasia TECHNOLOGY Bhd. Inrai Bhd, Centuru Software Holdings Bhd and banking counters.

Scomi Engineering and its consortium partners have been awarded the RM2.6 billion Line 17 monorail project in Sao Paulo, Brazil.

The monorail project awarded to the consortium which consists of Scomi, Andrade Gutierrez S.A. (AG Group), CR Almeida S.A. Engenharia de Obras and Montagens e Projetos Especiais SA (MPE) will cover the design works, manufacture, supply and implementation of the monorail system for the 18-km monorail Line 17, or the Gold Metro of São Paulo.

Scomi said the project was expected start in July this year and be completed in 42 months.

Mudajaya’s unit Mudajaya Corporation Bhd been given a letter of intent to design and build a component of the Manjung power plant for a sub-contract valued at RM720 million.

Mudaya said Mudajaya Corp was the given the letter on June 2 by CMC Machipex Sdn Bhd to build the balance of plant component of Manjung No. 4 Power Plant Project.

ACE Market-listed Privasia is on the lookout for potential targets for acquisition as part of its expansion plan.

Its chief executive officer Puvanesan Subenthiran said the company was targeting companies that were able to offer synergistic benefits in helping Privasia fulfil its vision of becoming a total ICT outsourcing services provider in the region.

ACE Market-bound Inari plans to invest RM25 million over two years to acquire new machines, upgrade existing equipment and build a new facility to increase its production capacity.

Century Software’s unit Century Software (M) Sdn Bhd has been awarded a RM22.53 million contract by the Ministry of Finance to implement an online budget system.

Meanwhile, CIMB Research last Friday maintained its Overweight rating on the Malaysian banking sector and said that overall, it still sees a favourable operating environment that will allow banks to achieve its projected net profit growth of 15.5% for 2011.

Read more...

RHBInvest Research

Top Story : DRB-HICOM

Company Update
The Group is well positioned to post strong earnings growth across all three of its business divisions in the coming years.
The Group is making a significant effort to improve financial transparency and implementing investor outreach programmes that will help to improve the market’s understanding of DRB’s businesses.
We reiterate our Outperform call on DRB on the back of undemanding PER valuations and solid FY11-14 EPS CAGR of 21.1%. Our sum-of-parts derived fair value is RM3.05.

Sector Call

Building Materials:

Sector
The prospects of the cement sector will be good for the next two years. However, we are cautious about the sector’s prospects in 2013, as industry capacity will likely increase by as much as 25% due to the expansion by YTL Cement, CIMA and Hume Cement.
No changes to our forecasts. We believe Lafarge is fully-valued, and continue to like YTL Cement as a cheaper entry and proxy to the cement sub-sector. Given the rich valuation attached to Lafarge, it will be the most at risk when earnings subsequently decline in 2013 due to overcapacity in the industry.

Corporate Highlights

ILB:

News Update
Disposes Of Shanghai Warehouse Land For RM30m Cash
Fair value is raised from RM1.55 to RM1.70, having imputed the disposal proceeds that reduce ILB’s net debt. Maintain Outperform.

Read more...

Maybank IB Views

Thursday, June 2, 2011

1Q11 report card
Growth momentum tapering off

Fewer positive surprises. 1Q11 earnings reporting season saw fewer positive surprises (13:65:22 in earnings above:within:below expectations vs. 4Q10's 21:59:20). 1Q11 combined recurring net profit of our research universe contracted 5.3% QoQ but maintained its YoY climb (+8.4%). The YoY uptrend momentum is slowing down however, vis-a-vis double-digit growth in the past 5 consecutive quarters. This is not unexpected as we have forecasted slower corporate earnings growth in 2011, after a high base in 2010.

COMPANY UPDATE
Dialog Group RM2.82: Buy
Pengerang project takes off, target price raised Shariah-compliant

Two is better than one. Securing the EPCC job for the Pengerang CTF project denotes progress. We expect the Pengerang CTF project on a full-scale commercial operation by 2017 to be the main driver to Dialog's earnings with dividends to boot. Notwithstanding that, Dialog is also highly tipped to bag the next few marginal field projects (i.e. Balai and Bentara), a positive to sentiment and price performance. Buy.

CB Industrial Product Holding RM4.26: Buy
Unlocking value Shariah-compliant

A re-rating catalyst. CBIP's proposed plantation disposal is positive as it unlocks value of its below-average plantation yielding estates; raising RM1.95/sh (RM268m) in cash and making RM1.02/sh (RM141m) in disposal gain. Post disposal, with potential net cash at 95sen/sh, CBIP is looking for expansion opportunities, failing which it may return part of its cash as special dividends to shareholders. We maintain our earnings forecasts and TP of RM4.75 based on 7x 2011 EPS for now.

Technicals
The FBM KLCI closed lower by 1.87 points to close at 1,556.42 yesterday. Its resistance areas of 1,559 and 1,576 will cap market gains, whilst the support areas are located at 1,539 and 1,556. Due to the world markets’ very poor tone last night; we will see some great volatility in the local bourse today. We expect the FBM KLCI to remain volatile today, as it may be adversely affected by the US and regional markets.

Other Local News
EonCap: Primus to pay RM1.9m in court costs following dismissal. Following the dismissal of Primus (M) Sdn Bhd's petition against the sale of EON Capital Bhd (EON Cap) to Hong Leong Bank Bhd (HLB), Primus now has to pay RM1.9m in court costs. (Source: The Star)

SapCrest: Acquires shipyard stake. SapuraCrest Petroleum Bhd (SapCrest) has signed an agreement with Real Mild Sdn Bhd and Labuan Shipyard and Engineering Sdn Bhd (LSE) for the subscription of 25m new shares in LSE, representing 50% stake in LSE. (Source: Bursa Malaysia)

Benalec: Monetises reclaimed land in Melaka. Benalec Holdings Bhd entered into two separate deals, one on land disposal while another on a JV property development with Melaka based developer Vista Selesa Development Sdn Bhd. (Source: The Edge Financial Daily)

Paramount: Has ambitious RM4b projects in pipeline. Paramount Corp Bhd will embark on several projects with a total GDV of RM4b over the next 12 years and will invest RM250m to set up its new university campus in Glenmarie, Shah Alam. (Source: The Malaysian Reserve)

Energy: Sarawak to pay 6.25 sen per kWh for Bakun power. Sarawak will pay federal government 6.25 sen kWh for the purchase of electricity generated by the Bakun hydro power plant under a power purchase agreement (PPA). The basic tariff of 6.25 sen comes with an annual increase of 1.5%. (Source: The Edge Financial Daily)

Autos: Honda Malaysia to resume full production in August. Honda Malaysia Sdn Bhd’s Alor Gajah plant will resume full production on Aug 1, and will try to increase production by operating additional hours to catch up with shortage of supply from April through July. (Source: The Edge Financial Daily)

Read more...

RHBInvest Research

Top Story: Axiata - Celcom still holding firm Outperform

Briefing Note
Celcom managed to register healthy prepaid net adds of 177k (4QFY10: +52k) thanks to greater focus on the prepaid segment over postpaid.


Sector Call

Semiconductor – Apr chip sales weaken to 3.9% yoy Neutral

Sector Update

Unisem: Fair value at RM1.99 Market Perform

Notion: Fair value at RM2.25 Market Perform

Apr chip sales fell 2.2% mom after rebounding 2.3% in Mar 11. We reckon this was partly due to the abrupt decline in chip demand due to the Japan disaster that occurred in Mar. On the other hand, Apr chip sales appeared weak with yoy growth of 3.9% compared to Mar 11 growth of 8.4% yoy.

Corporate Highlights

Puncak Niaga: Cash flows intact despite IC 12 Trading Buy

Briefing Note Management clarified that there is essentially no impact to the underlying business and cash flows despite adopting IC 12.

Puncak however conceded that it will record losses in FY11, but will return profitable in FY12 with the scheduled 25% water tariff hike in Jan 2012.

IJM: Raising Stakes In Two Indian Units Underperform

News Update
IJM has proposed to raise its stakes in CIDB Inventures and Swarna Tollway by 16.9% and 17% to 95% and 98.5% for RM46.4m.



CBIP: Sells plantation subsidiaries, RM1.07/share gain on sale Outperform (upgraded)

News Update
CBIP entered into two share sale agreements to dispose of its 100%-owned subsidiaries, Sachiew and Empresa for RM108.12m and RM159.94m cash, respectively. Sachiew is the holder of a provisional 60-year lease for 3,720ha of land in Suai, Miri, which also has a 30t/hr CPO mill. Empresa is the holder of a provisional 99-year lease for 5,936ha of land in Bok, Miri, which also has a 45t/hr CPO mill.

Read more...

RHBInvest Research

Wednesday, June 1, 2011

Top Story: Earnings Review / Strategy – More earnings downgrades; rising risk aversion

Market Update
The 1Q report card continued to be below our expectation as there were more companies reporting results that were below our projections compared with those that exceeded forecasts. Of the 111 companies that we cover, 62 of the results (55.9% of the total) were within our expectations, 33 below projections (29.7% of the total) and 16 above forecasts (14.4% of the total).

Sector Call
Banking: Apr ‘11 system data – Leading indicators moderated but loan growth resilient Overweight

Sector Update
Apr ’11 system-wide loan growth gathered further pace, growing 13.5% yoy as compared to +13.2% yoy achieved in Mar ’11. Similar with the previous month, this was mainly due to stronger loan growth to businesses (+14% yoy) while household loans outstanding continued to grow at a rather steady pace of 13.2% yoy.

Corporate Highlights

Affin: Keeping faith Outperform

Briefing Note
While 1Q11 headline net profit appears weak, management was keen to stress that the results were not representative of the full-year as 1Q tends to be a seasonally slower quarter coupled with the one-off RM40m litigation loss. As such, there was no change to the full-year targets.

MNRB: FY03/11 Earnings Up On Better Claims Experience Outperform

Results/Briefing Note
MNRB’s full year net profit of RM124m (+172% yoy) was above our expectations, accounting for 118% of our forecast. The main variance was the lower-than-expected claims ratio of 59.4% for its Malaysian Reinsurance division, compared to our projected 63% for FY03/11.
MAHB – Net profit up 21% yoy; land development in the works Outperform

Results/Briefing Note
MAHB’s 1QFY11 net profit came in at 21.7% of our full-year forecast. We consider the results to be within expectations as we expect a stronger 2H on the back of the year-end peak period for air travel.

Maxis: A slow start Market Perform

Results / Briefing Note
Maxis’s 1Q core net profit of RM2.29bn (-0.9% yoy; -7.7% qoq) was within expectations.
Management’s new tighter subscriber definition resulted in to better reflect its actual revenue generating base resulted in its overall subscriber base “contracting” by 1.2m to 12.7m.

Read more...
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