RHBInvest Research

Friday, February 17, 2012

Malaysia Equities

Top Story

Taking Stock – Fundamentals Playing Catch-Up

Market Update

- Our expectations for the Dec 2011 quarter results are fairly neutral as we believe any bad news would have already been factored into earnings forecasts. However, we believe there is a possibility that some companies may use the market’s low expectations to delay booking in revenue (or provide for higher costs) in the 4QCY11 to boost the current year’s earnings.




Corporate Highlights




Digi – Looking Forward To LTE Outperform

Visit Note

- We remain positive on DiGi for potential to sustain future growth by monetising its 5.2m mobile Internet subscriber base through LTE.

- We understand that competition has been stable so far in 2012. While DiGi noted that U Mobile’s presence in the market has increased, since U Mobile is only a quasi-MVNO we do not expect competition to turn irrational anytime soon.

TH Plantation – Joining the ranks of the mid-cap plantation stocks Outperform

Visit Note

- Four key points: 1) Strong FFB production growth for FY11 achieved; 2) Production costs to rise in FY12, on higher labour and fertiliser costs; and 3) Work has started on THP’s new land acquisitions already; and 4) More acquisitions in 2012?

TRC Synergy – Defect liabilities weigh down on 4QFY12/11 performance Outperform

Results Preview

- We expect TRC’s FY11 net profit to miss expectations by 12-18% largely due to the recognition of additional defect liabilities in 4Q from certain recently completed projects.

BAT – BAT’s Market Share Grew In FY11 Market Perform (Upgraded)

Results/Briefing Note

- FY11 net profit (-1.6% yoy) was within expectations. BAT declared a fourth interim dividend of 66 sen, which brought its YTD dividend payout to 276 sen (including 30 sen special dividend paid in the 2QFY11).




Malaysia Equities




Top Story




Taking Stock – Fundamentals Playing Catch-Up

Market Update

- Our expectations for the Dec 2011 quarter results are fairly neutral as we believe any bad news would have already been factored into earnings forecasts. However, we believe there is a possibility that some companies may use the market’s low expectations to delay booking in revenue (or provide for higher costs) in the 4QCY11 to boost the current year’s earnings.




Corporate Highlights




Digi – Looking Forward To LTE Outperform

Visit Note

- We remain positive on DiGi for potential to sustain future growth by monetising its 5.2m mobile Internet subscriber base through LTE.

- We understand that competition has been stable so far in 2012. While DiGi noted that U Mobile’s presence in the market has increased, since U Mobile is only a quasi-MVNO we do not expect competition to turn irrational anytime soon.

TH Plantation – Joining the ranks of the mid-cap plantation stocks Outperform

Visit Note

- Four key points: 1) Strong FFB production growth for FY11 achieved; 2) Production costs to rise in FY12, on higher labour and fertiliser costs; and 3) Work has started on THP’s new land acquisitions already; and 4) More acquisitions in 2012?

TRC Synergy – Defect liabilities weigh down on 4QFY12/11 performance Outperform

Results Preview

- We expect TRC’s FY11 net profit to miss expectations by 12-18% largely due to the recognition of additional defect liabilities in 4Q from certain recently completed projects.

BAT – BAT’s Market Share Grew In FY11 Market Perform (Upgraded)

Results/Briefing Note

- FY11 net profit (-1.6% yoy) was within expectations. BAT declared a fourth interim dividend of 66 sen, which brought its YTD dividend payout to 276 sen (including 30 sen special dividend paid in the 2QFY11).

Read more...

RHBInvest Research

Friday, February 10, 2012

Malaysia Equities

Top Story

KNM – Still gloomy skies ahead? Underperform

Visit Note

- We came away from our visit remaining quite cautious on the company’s outlook. Management guided that 2012 will be a year of cost, operation and plant rationalisation.

- Besides that we are concerned that a couple of its’ large contracts will continue to be deferred despite management’s best efforts. The company is tentatively looking to release its 4QFY11 results on 28 Feb, but we are not too optimistic on it reporting better numbers.



Corporate Highlights

MRCB – EDL Losses To Weigh Down On FY12/12 Performance Market Perform (Downgraded)

Briefing Note

- MRCB guided RM30-40m start-up losses in FY12/12 from the newly completed 100%-owned toll road Eastern Dispersal Link (EDL) in Johor. MRCB guided very thin margins of 1-4% from the RM1.4bn LRT line extension project secured in Aug 2011.



Sunway REIT – Sunway Pyramid Still Spurring Growth Market Perform

Results/Briefing Note

- Sunway REIT’s (SunREIT) 2QFY12 realised net profit of RM50.7m (+13.6% yoy; +14.7% qoq) came in slightly above ours and consensus estimates. The strong earnings growth was driven by: 1) the flow through of rental reversion from Sunway Pyramid (SP); and 2) the incremental contribution from Sunway Putra Place. A 1.99 sen DPU was declared during the quarter, up 13.7% yoy and qoq.



Macro

IPI – Despite a rebound in industrial prod. in Dec, real GDP growth is likely to have moderated in 4Q

Economic Highlights (published 8 Feb 2012)

- Industrial production unexpectedly rebounded to 3.0% yoy in Dec, the first bounce back in four months, after easing to a revised +2.4% in Nov, from +2.9% in Oct.

Read more...
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