Stocks to watch: Wing Tai, Dijaya, AMMB, Affin

KUALA LUMPUR: Stocks which could see trading interest on Tuesday, Aug 16 following fresh corporate developments include property players Wing Tai Malaysia Bhd, Dijaya Corp Bhd and banking stocks AMMB HOLDINGS BHD and AFFIN HOLDINGS BHD .

Another company which could see some mild positive interest include HOVID BHD as it tries to extricate itself from the Practice Note 17 status by proposing a dividend-in-specie of CAROTECH BHD shares .

On the downside, GREEN PACKET BHD continue to stay in the red.

Wing Tai Malaysia Bhd’s earnings nearly doubled to RM100.41 million in the financial year ended June 30 from RM53.24 million.

Its revenue rose 4.4% to RM369.81 million from RM354.25 million, mainly due to higher revenue from the trading and property development divisions.

For the fourth quarter, its net profit surged 185% to RM53.28 million in the fourth quarter ended June 30, 2011 from RM18.65 million a year ago.

The property developer expected its apparel and lifestyle divisions to boost its earnings in the new financial year.

Another niche property player, Dijaya Corp Bhd announced its joint venture Magical Heights Sdn Bhd (MHSB) plans to undertake property projects near Johor Baru with a gross development value (GDV) of RM2.8 billion.

The projects would be built on two pieces of land which MHSB was acquiring from Trident World Sdn Bhd for RM220 million.

Dijaya and Iskandar Waterfront Sdn Bhd each has a 50% stake in MHSB.

MHSB had entered into a conditional sale and purchase agreement with Trident World Sdn Bhd to acquire 125 acres of land for RM165 million and 15 acres from RM55 million.

AMMB Holdings Bhd net profit for the first quarter ended June 30, 2011 rose 19.9% to RM441.52 million from RM368.28 million a year earlier, underpinned by higher income growth as well as improved asset quality with lower charge offs and allowances.

Revenue for the quarter rose to RM1.95 billion from RM1.70 billion in 2010. Earnings per share was 14.75 sen, while net assets per share was RM3.54

Meanwhile, Affin Holdings Bhd’s net profit for the second quarter ended June 30, 2011 rose 20.1% to RM134.19 million, due mainly to increase in both net interest income and Islamic banking income.

Revenue for the quarter rose to RM642.77 million from RM534.61 million in 2010. Earnings per share was 8.98 sen while net assets per share was RM3.64.

For the six months ended June 30, Affin’s net profit slipped to RM240.25 million from RM247.04 million in 2010, on the back of a 20% increase in revenue to RM1.26 billion.

Hovid Bhd plans a distribute a portion of its shareholding interest in Carotech Bhd on the basis of one Carotech share for every four Hovid shares to rectify Hovid’s status as a PN17 company.

Hovid said the Carotech shares to be distributed under the minimum scenario was 190.52 million shares while the maximum scenario was 285.78 million shares.

As at July 31, Hovid held 38.45% of Carotech shares (which would be reduced by 20.88% following the dividend-in-specie to 17.57% under the minimum scenario. Under the maximum scenario, it would be reduced by 31.32% to 7.13%.

Green Packet Bhd posted net loss of RM15.24 million in the second quarter ended June 30, 2011 compared with losses of RM18.68 million a year ago, due to higher depreciation of plant and equipment. Revenue rose 42% to RM127.80 million from RM90.01 million while loss per share was 2,3 sen versus 2,8 sen a year ago.

“The 2Q11 loss after tax was higher than 2Q10 mainly attributed by higher depreciation of plant and equipment in accordance with the planned rollout of the broadband infrastructure even with higher revenue from software and broadband business,” it said.

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Green Packet subsidiary Packet One to raise RM151.24m, seeks new investor

KUALA LUMPUR: GREEN PACKET BHD’s 55% owned loss-making Packet One (P1) has proposed to raise up to RM151.12 million from the issuance of preference shares and with the injection of funds from a new investor to finance its nationwide fourth generation (4G) rollout.

Green Packet said on Monday, May 16 that substantial shareholder South Korean Telekom Co. Ltd was asked to subscribe for 153,276 class C Islamic irredeemable convertible preference shares (ICPS-i) for RM50.53 million.

Green Packet has also proposed that Intel Capital Corp -- which currently holds RM50 million nominal value of guaranteed redeemable convertible exchangeable bonds -- to subscribe for Class B Irredeemable Convertible Preference Shares (ICPS) valued at RM10.12 million.

It said that it would also seek a new investor to provide a loan of at least RM50 million to P1, which may be converted into equity in P1 with rights.

As for Green Packet, it said that it had already invested RM91 million in P1 to fund the latter’s operating expenses including subscribers acquisition costs including purchases of customer premise equipment, marketing and promotional expenses, and administrative.

“If either the new investor and/or the bondholder does not invest at least RM50 million and approximately RM10.12 million respectively in P1, Green Packet undertakes to make up for any shortfall in the investment amounts by investing an amount equal to such part of those amounts that was not invested by the new investor and/or the bondholder respectively,” it said.

The gross proceeds of at least RM110.65 million would be utilised by P1 for its deployment of WiMAX network and services in Malaysia.

Of the RM110.65 million, Green Packet said RM50 million would be used as capital expenditure for wireless internet broadband equipment and deployment costs while RM60.44 million would be for operating expenses and working capital.

“The proposed issuance will help expedite P1’s nationwide fourth generation (4G) rollout to reach 65% population coverage by 2012 and also contribute to P1’s key priorities of optimising its network and customer satisfaction, further enabling it to deliver high quality broadband to everyone in Malaysia,” it said.

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Maybank IB Views

RESULTS REVIEW
Malaysia Airports Holdings RM6.20: Buy
Accountants and Taxman Spoilt an Otherwise Fantastic Year!

Below estimate. RM378m (+0.4%YoY) 2010 recurring net income was 12% below our forecast and 2% above of consensus. There was a host of accounting treatment items and a substantially higher than statutory tax rate which masks the true performance of an otherwise a fantastic year. Nonetheless, we look forward to a promising 2011 as we enter the fourth year of the aviation up-cycle underpinned by strong GDP growth, global trade and tourism boom. Maintain Buy, no change to our RM7.12/share DCF-based target price.


IOI Corporation RM5.71: Hold
Largely priced in Shariah-compliant

In line. RM920m 1HFY11 recurring net profit (+14% YoY) is 45% of our full-year forecast. Reported RM1.02b net profit (+8% YoY) is also within street's expectations at 46% of consensus full-year estimate. We raise our FY11 net profit forecast by 9% after imputing for stronger average CPO price of RM3,500/t in 2H (1H: RM2,800/t). Our sum-of-parts based target price is marginally lifted to RM6.35 (+5sen).


Dialog Group RM2.13: Buy
On track Shariah-compliant

Pengerang CTF & marginal field projects are catalysts. Dialog's 2QFY11 net profit of RM36m (+9% QoQ) took 1H earnings to RM69m (+24% YoY), on track to meet our forecasts. We remain optimistic about Dialog's long-term growth prospects, driven by its CTF projects in Pengerang. Dialog is also touted to be in the running to co-develop PETRONAS' marginal field projects, a major positive in our view. Maintain Buy with an unchanged RM2.60 SOP target price.


Technicals
The FBM KLCI traded mixed to finally close higher by 0.97 points to 1,506.30 yesterday. Its resistance areas of 1,506 and 1,541 will cap market gains, whilst the weaker support areas are located at 1,480 and 1,504.

Trading idea for today is a TAKE PROFIT call on MEGB.


Other Local News
Sime Darby: To challenge suit by Abu Dhabi firm. Sime Darby Engineering Sdn Bhd (SDE), a wholly-owned subsidiary of Sime Darby has confirmed that Emirates International Energy Services (EMAS) has indeed filed the suit against the company and vowed to challenge the suit. EMAS has written a letter to SDE claiming compensation in the amount of USD20m for not accepting several projects EMAS had identified for SDE. However, SDE stressed that it was under no obligation to accept EMAS's recommendations and had no time bound requirements to decline EMAS's recommendations. (Source: Bursa Malaysia)

QL Resources: Boilermech gets nod to float on Ace Market. Boilermech Holdings Bhd (BHB), an indirect associate company of QL Resources, has obtained approval to list on the Ace Market of Bursa Securities. (Source: Bursa Malaysia)

Green Packet: Defers Ebitda-breakeven target to end-2011. Green Packet Bhd has deferred its target of breaking even at the Ebitda level to the end of this year as opposed to the first quarter of 2011. The deferment was due to the more competitive environment and lower price point in the nomadic (portable) broadband segment. (Source: The Edge Financial Daily)

Ramunia: Azizul pares down stake in Ramunia. Ramunia Holdings Bhd's major shareholder Datuk Azizul Rahman Abdul Samad has pared down his stake significantly recently, raising speculations that he may exit the group soon. Azizul indirect shareholding in Ramunia fell to 73.3m shares, representing 11.06% stake, from 14.3% or 94.7m shares as at Dec 30, 2010. (Source: The Edge Financial Daily)

Supermax: Counts on new income stream. Glove maker Supermax Corp Bhd is banking on a new income stream derived from global sales and marketing network to mitigate any effects of higher production cost. The company would aggressively globalise its operations via its network of about 700 distributors worldwide. The new income stream is expected to contribute 5% of its 2011 net profit. (Source: The Star)

Metro Kajang: To buy plantation land in Kalimantan. Metro Kajang Holdings Bhd is in negotiations to acquire 20,000ha of plantation land in East Kalimantan. The acquisition could double the size of its plantation land bank which measures about 16,000ha at present. Metro Kajang expects to see contributions from its oil palm venture in 2012, when it will contribute 20% to group revenue. (Source: The Edge Financial Daily)

Utilities: Govt no to coal power plants in Sabah. The government has agreed not to build coal-fired power plants in Sabah. The proposed construction of the plant in Felda Sahabat, Lahad Datu, to meet electricity supply needs in Sabah's east coast had previously received objections not only from local non-governmental organizations but also international activists. (Source: The Edge Financial Daily)

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Maybank IB Views

RESULTS PREVIEW
Notion VTEC RM2.01: Buy
Jumping for joy Shariah-compliant

A strong headstart. NVB's 1QFY11 core results are expected to be robust, likely ahead of consensus forecasts, but within ours. Our current FY11 net profit forecast is 14% above consensus. The camera segment (from new sub-assembly orders) will drive FY11 growth while the HDD section will take a back seat. We maintain our 2-year net profit CAGR forecast of 38% and introduce FY13 forecast. Clinching MSC tax status could further lift EPS by 6 sen. NVB stays a Buy with a RM2.40 TP, on improving business conditions and earnings prospects.


Technicals
The FBM KLCI closed lower by 3.48 points at 1,536.07 yesterday. Its resistance areas of 1,536 and 1,558 will cap market gains, whilst the obvious support areas are located at 1,515 and 1,533. The FBM KLCI has temporarily stalled at its new all-time high of 1,576.95 on 6 January 2011. A short-term trading low was then seen at 1,558.64 on 11 January 2011.

Trading Idea for today is an Accumulate call on CBSTECH.


Other Local News
MPHB: Signs MoU to buy balance 49% of Magnum. MPHB has proposed to acquire the remaining 49% stake in Magnum Holdings Sdn Bhd and other securities in Magnum. The total purchase consideration for the acquisitions is RM1.64b and shall be satisfied by way of issuance of new MPHB shares at an issue price of RM2.30 per MPHB share and RM809m in cash. (Source: Bursa Malaysia)

Axis REIT: Proposes income reinvestment plan. Axis Real Estate Investment Trust (Axis REIT) has proposed a plan that enables unit holders to reinvest their cash distribution received into new units. Also, the property manager to issue up to 75.18m new units, representing up to 20% of the existing approved fund size. (Source: Bursa Malaysia)

DRB-HICOM: To assemble Passat in November. DRB-HICOM and Volkswagen AG will start production in November with the assembly of Volkswagen Passat sedan 1.8 litre at the automotive complex in Pekan. The Pekan plant is expected to manufacture between 40,000 to 50,000 Volkswagen cars annually. (Source: The Star)

UMW: Consolidation under way. UMW Holdings Bhd plans to consolidate and rationalise some of its core businesses to become leaner and meaner. Consolidation is under way for its manufacturing and engineering and equipment divisions as UMW looks to leverage on its vast range of products and services. The oil and gas (O&G) division may also be restructured, while UMW Oil & Gas Bhd's listing plan remains on the cards once it returns to profitability. (Source: Business Times)

GPacket: Signs pact with Time Warner. Green Packet Bhd has signed an agreement with Time Warner Cable, the second largest cable operator in the United States, to provide its next generation connection management solutions. Time Warner Cable will use customised versions of Green Packet's Intouch connection manager, Intouch reporting server and Intouch update server for its Windows and Mac platforms. (Source: The Star)

Coastal: Sells vessels for RM268m. Coastal Contracts Bhd's wholly-owned subsidiaries have collectively secured contracts for the sale of seven offshore support vessels, three tugboats and two oil barges for an aggregate value of about RM268m. Including the new contracts, Coastal Group has about RM760m worth of vessel sales orders awaiting delivery to customers up to 2012. (Source: The Star)

Property: BTS expected to be mandatory by 2015. The Build-Then-Sell (BTS) 10:90 mode of house ownership is expected to be made mandatory by 2015. The drafting of the amendments to the Housing Developers Act will include a clause calling for the gradual implementation of the BTS system. (Source: The Sun)

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Maybank IB Views

INITIATING COVERAGE
Petronas Chemicals RM6.02: Buy
The new Big Show

Golden opportunity not to be missed. PCG is an opportunity to participate in: (i) the world's most consistently profitable petrochemical company; just after its earnings trough, with (ii) huge earnings growth prospects, (iii) low indebtedness profile and (iv) generates significant free cash flow. PCG is the world's 22nd largest chemical company by market value, and it will inevitably be included into major chemical indices - a strong pull factor to international investors. Valuations are attractive compared to global peers' forward PERs and EV/EBITDAs.


Technicals
The FBM KLCI rose 3.55 points to 1,566.49 yesterday. Its resistance areas of 1,569 and 1,576 may cap market gains, whilst its firmer support areas are located at 1,552 and 1,566.

Trading Idea for today is a Firm Buy call for BERNAS and a Short-Term Buy call for DELEUM.


Other Local News
TNB: Awards RM2.15b jobs for Ulu Jelai project. Tenaga Nasional Berhad (TNB) has awarded the Ulu Jelai Hydroelectric Project construction jobs worth RM2.15b to two consortiums. The Project will involve the construction of one dam and the installation of two hydro turbines and generators in an underground power station with a total installed capacity of 372MW. The Project is expected to be completed and operational by July 2016. (Source: Bursa Malaysia)

SP Setia: Leads race for PICC deal. SP Setia Bhd has emerged as the leading contender to build the Penang International Convention Centre (PICC) on the grounds of the Penang International Sports Arena (Pisa) that is likely to cost over RM200m. SP Setia is likely to get a 30-year concession to build and operate the convention centre, which will include other components like a hotel and retail outlets. (Source: Business Times)

CIMB: Not in talks with Affin. CIMB Group has clarified that it is not involved in any discussions relating to a possible acquisition or merger with Affin Bank or any of its related companies. (Source: Business Times)

Mah Sing: Sets 2011 sales target of over RM2b, PNB ceases to be major shareholder. Mah Sing Group Bhd has set an ambitious sales target of RM2b to RM2.5b for the current financial year ending Dec 31 (FY11), which will be a 70% increase over the RM1.5b recorded in FY10. Separately, Permodalan Nasional Bhd (PNB) has ceased to be a substantial shareholder after it disposed 1.5m shares in the company, reducing its interest to less than 5%. (Source: The Star)

Perodua: Allocates RM614m capex. Perodua has set aside RM614.2m for capital expenditure (capex) this year. An amount between RM250m and RM300m of the capex will be utilised for the development of a new model, which is expected to further boost overall sales. (Source: The Star)

Green Packet: Capex at RM250m this year. Green Packet Bhd expects to spend up to RM250m in capital expenditure (capex) this year to expand the number of sites to 1,600 from 1,000 at present. Consequently, coverage would be increased to 52% (from 45%) of Peninsular Malaysia's population by end of 2011. P1 will focus on expansion this year by providing wider coverage, enhancing capacity and quality. (Source: The Edge Financial Daily)

Plantation: Suppliers expect 4%-20% increase in fertiliser prices. Fertiliser, which represents about 40% of production cost for local oil palm planters, are likely to trend higher by 4 to 20% this year. For murate of potash (MOP), the most popular fertiliser among local planters, fertiliser companies are expecting a price increase of about 5.8% to RM1,500 per tonne this year from RM1,417 per tonne last year. (Source: The Star)

Market: 15-20 foreign will be listing on Bursa this year. 15-20 foreign companies are expected to be listed on Bursa Malaysia this year from three last year as an initiative to develop an international board to list foreign securities by Bursa Malaysia. The guidelines to facilitate the implementation of the separate board for listing international companies would be finalized soon. (Source: The Edge Financial Daily)

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Maybank IB Views

SECTOR UPDATE
Plantations: Neutral
MPOB data: Tightening supply

Bullish for prices. Stock levels fell below trend as demand stayed strong while production began its seasonal decline. In our view, Malaysian production is likely to decline in 2010. While spot prices have surpassed our CPO ASP forecast of RM3,000/t for 2011, we believe prices could trend down as weather concerns dissipate post the passing of the year-end monsoon season.


RESULTS REVIEW
Sapura Crest Petroleum RM2.85: Buy
Eyes strategic assets; target price lifted Shariah-compliant

Target price raised to RM3.30. 3Q results yielded no surprises but we are turning even more positive on SapCrest. It has a strengthened balance sheet to expand its core businesses (i.e. IPF, marine services, drilling ops) through M&As. Maintain Buy with a higher RM3.30 target price (+8%) as we lift target PER multiple from 16x to 17x FY13 on new asset injection prospects.


Technicals
The FBM KLCI rose 6.30-points and closed at 1,507.28 last week. The obvious support areas for the FBM KLCI are located in the 1,474 to 1,507-zone. The key resistance areas of 1,510 and 1,531 may cap any rebound activity.

Trading idea for today is an Accumulate call on KFIMA.


Other Local News
GreenPacket: P1 plans to improve and upgrade its 4G WiMAX coverage to 45% of Malaysian households by year-end, with the goal of hitting 65% by 2012. P1 also planning to roll out an array of rich media services, including Voice-over-Internet Protocol and mobile video. (Source: The Star)

KrisAssets: Could buy The Gardens from IGB. KrisAssets Holdings Bhd's plan to issue RM300m in redeemable convertible bonds may be a precursor to acquire The Gardens from parent IGB Corp Bhd (IGB). The acquisition could be via cash and shares. (Source: The Edge Weekly)

Landmarks: May start Bintan development in 1Q11. Landmarks Bhd, a 30.3% associate of Genting Bhd, is expected to start its Bintan development called Treasure Bay Bintan (TBB) by the first quarter of 2011. The development has been planned since 2007. This will be Landmark's second resort development after the Andaman Resort in Langkawi. (Source: The Edge Financial Daily)

Port: Ancom's Siew submits proposal for Penang Port. Oriental Pearl Harbour (led by Datuk Siew Ka Wei of the Ancom group), in partnership with China Shipping (Group) Co Ltd (the parent of China Cosco and Cosco Corp), has submitted a competing bid for Penang port. This rivals an earlier proposition by businessman Tan Sri Syed Mokhtar Al-Bukhary. Oriental's proposition would involve an outright purchase for RM500m (with the government holding a golden share) and the absorption of future capex totaling RM2b to RM2.5b. (Source: The Edge Weekly)

UEM-EPF: Seeks tax waiver on PLUS takeover. The special purpose vehicle (SPV) controlled by UEM Group and the Employees Provident Fund (EPF) which has made an offer of RM4.60 per share for PLUS Expressways Bhd is seeking a tax waiver for PLUS's toll operations until the end of its tenure in 2030. UEM-EPF is also seeking an exemption or relief from all stamp duty, real property gains tax and other taxes and levy that may arise during the acquisition. However, the acquisition of PLUS will still proceed if UEM-EPF is unable to secure any exemptions. (Source: The Edge Weekly)

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Gpacket Slump Down For A Few Days

Gpacket Weekly Chart

Gpacket Daily Chart

After I posted on 10/3/2009 which Gpacket trading in trapped symmetrical triangle. Then a few days after, the downtrend continue rallied. Today it was closed at the RM0.805 which currently traded in high volume at its support. The best for me to trade is waiting for the confirmation candle to trade and the volume as well.

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Gpacket - Trapped in Symetrical Triangle

What's next?

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Gpacket Currently At The Price Target

If you remember my last post on the Gpacket, it's already achieved my target and as lower as Rm2.15.

Have you notice this? Happy trading!

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GPACKET

GPACKET Weekly Chart

Currently GPACKET in downtrend mode. Anyway if you see the chart, right now take a breath at the 261.8% fibo line. RSI showing in overbought area which normally showing the bottom condition. Trendline price projected for the downtrend is RM2.25. I just monitor this counter at this moment. Is there any reversal sign? Any comment?

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