COMPANY UPDATE
Public Bank RM13.30: Buy
To kick off the reporting season
Raising our TP. Factoring in a 3% increase to our BV/share for FRS139 adoption and a higher target P/BV of 2.8x (2.7x previously) on updating our historical parameters, we are raising our TP on Public Bank to RM14.60 from RM13.50 previously. We maintain our Buy call for exposure to Public Bank’s impeccable fundamentals while a net yield of 4% provides support to share price.
RESULTS REVIEW
CapitaMalls Malaysia Trust RM1.45: Hold
East Coast Mall starts contributing
On track. CMMT's 2011 realised net profit of RM110.9m came in as expected. 2011 DPU of 7.9sen was also in line. CMMT has grown its asset size by 31% to RM2.8b since its listing in July 2010 with the Gurney Plaza Extension and ECM acquisitions. Potential earnings catalysts could come from the reconfiguration of outdoor car park lots at ECM into retail spaces. Hold.
Technicals
The FBM KLCI lost 0.41 points and closed at 1,522.66 last Friday ahead of the CNY holidays. The local market remained quiet in range-bound trading despite high volumes of between 1.44b to 1.94b shares traded. Some position-squaring ahead of the weekend and the impending CNY holidays later in the week caused a mild downward drift in the local bourse.
Trading Idea is an ACCUMULATE call on UNISEM, with upside target prices of MYR1.49 & MYR1.63.
Other Local News
Genting Bhd: RM120m deal with AWE. AWE Ltd (AWE), an Australian-based oil and gas exploration and production company, has entered a sale and purchase agreement with a subsidiary of Genting Bhd, whereby a wholly-owned subsidiary of AWE will acquire a 100% interest and operatorship of two production-sharing contracts (PSCs) offshore Indonesia. It also included an undeveloped oil field with an estimated 76m barrels of recoverable oil. The consideration for the acquisition of the interest in the PSCs will be USD39m (RM121.1m). (Source: The Star)
Sp Setia: Liew joins PNB in improved bid for SP Setia. Permodalan Nasional Bhd has revised its takeover offer for SP Setia Bhd's shares to RM3.95 apiece from RM3.90 previously, in a new deal with joint bidder CEO Tan Sri Liew Kee Sin. As the joint offeror, Liew will keep his 8% share of SP Setia. Liew will remain as SP Setia's group president and CEO for three years. He will be given a put option to sell his stake in SP setia to PNB at RM3.95 after the three-year period. (Source: Bursa Malaysia)
Perodua: Says sales slowed in January. Perusahaan Otomobil Kedua Sdn Bhd (Perodua) has appealed to the government and the banking industry to loosen up the loan application process after new car sales slowed in January. New car sales had lost some momentum, because banks are taking a longer time to process loan applications. (Source: The Sun)
MPHB: To sell hotel to pare down debt. Multi-Purpose Holdings Bhd (MPHB) is in talks to sell a hotel in Kuala Lumpur for about RM50m as a part of its asset rationalization programme. Its wholly owned subsidiary, Syarikat Perniagaan Selangor Sdn Bhd, owns hotels in Penang, Pudu and Ampang, which are managed by Flamingo Managament Sdn Bhd. The other assets up for sale are its insurance business - Multi Purpose Insurans Bhd - as well as its stockbroking business. (Source: The Edge Financial Weekly)
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