TDM

TDM - is it a good stock? Look at this chart. 

TDM in uptrend mode and has good in financial! 

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Maybank IB Views

Media: Overweight
Apr 2011 adex: Growth momentum continues

Overweight stance under review. Apr 2011 total gross adex grew 17% YoY, the strongest this year. May 2011 is likely to be 10% to 15% higher MoM as advertisers ramp up ad spend ahead of adex-friendly festivities in 3Q11. 4M11 total gross adex grew 14% YoY, ahead of our 8.3% forecast. Top picks MCIL and Media Prima performed well in the past month, possibly reflecting the still positive adex sentiment.

RESULTS REVIEW
KLCC Property Holdings RM3.28: Hold
Results in line; new contribution from Lot C Shariah-compliant

Maintain Hold. KLCCP's RM574m FY03/11 realised pretax profit was in line, but 12 sen total DPS for FY03/11 was above expectations. In our view, KLCCP's annualised 3.4% net dividend yield for 2012 is less attractive compared to large cap REITs (6-6.5%). We lower our 9M11-2013 estimates by 1.6-16% to factor in the change in FYE. Maintain Hold with a new RM3.50 TP (15% discount to RM4.10 RNAV (+50 sen)).

Tanjung Offshore RM1.11: Sell
Grey visibility still Shariah-compliant

Reiterate Sell. Losses extended into 1Q, within our forecasts but below consensus expectation. Forward earnings will remain a challenge. Cost management strategies and operating prospects remain the key concerns. An equity cash-call could ensue should the cash situation worsen. TOFF will suffer an RM8m penalty cost for early bonds redemption. Valuations are expensive and consensus forecasts are aggressive. Ekuinas’ next move remains a wild card.

COMPANY UPDATE
Star Publications (M) RM3.38: Hold
Fuzzy signals from this frequency Shariah-compliant

Maintain Hold call and DCF-based target price of RM3.71. We are mildly negative on Star's plan to acquire 80% of Capital FM for RM15m as it is loss-making and may cannibalise Star's three incumbent radio stations. Acquiring an outdoor company would have been wiser. We leave our earnings estimates unchanged pending further details.

CB Industrial Product Holding RM4.30: Buy
Variation to order book Shariah-compliant

Positive, but factored in. CBIP received a request from a customer to vary its order book, awarded back in Jan 2011. Consequently, the contract value was revised upwards by about RM31m and the expected incremental profit from the revision could be approximately RM4m. Although positive, we maintain our earnings forecasts as we have assumed RM180m of contract wins for FY2011. Maintain Buy with an unchanged TP of RM4.75 based on 7x 2011 PER.

Technicals
The FBM KLCI rose marginally by 2.75 points to close at 1,544.02 yesterday. Its resistance areas of 1,548 and 1,565 will cap market gains, whilst the obvious support areas are located at 1,523 and 1,544. Due to the DJIA’s firmer tone last night, we will see some bargain hunting activities today.

Daily trading idea is a Short-Term Buy for TDM.

Other Local News
RHB: Sumitomo, Carlyle eye RM4.8bb RHB stake. Japan's Sumitomo Mitsui Financial Group and US private equity firm Carlyle are among leading contenders to place first round bids for a stake in RHB, after bigger rival CIMB said it is not keen to buy a stake. (Source: The Edge Financial Daily)

PPB: Eyes Indonesia's flour market. PPB Group Bhd is eyeing at least 10% of Indonesia’s flour market that currently dominated by his former business partner, Salim Group’s Liem Sioe Liong. This sets the stage for a professional rivalry between the two powerhouses as both groups allocate more resources to capture a larger slice of the burgeoning consumer business at the populous islands. (Source: The Edge Financial Daily)

UOA: RM10b projects in the pipeline. UOA Development Berhad, which is scheduled to list on the Main Market of Bursa Malaysia on June 8, has property projects worth RM10b in total gross development value (GDV) over the next 10 years. Moving forward, the company plans to retain its focus in the Klang Valley, especially its Bangsar South development poject, before considering other geographical locations. (Source: The Edge Financial Daily)

TDM: To invest RM120m in Indonesia. TDM will inject RM120m into its Indonesian operations at Kalimantan within the next eight to 10 years to build four oil palm mills in the area. They expect to see contributions from the Kalimantan operations by 2013 after they had initially invested RM44m in Kalimantan. (Source: The Edge Financial Daily)

Ramunia, Coastal: Agree to abort MoU. Ramunia Holdings Bhd and Coastal Contracts Bhd have aborted a memorandum of understanding (MoU) for the proposed collaboration, bidding and fabrication in relation to structures for the oil and gas industry. The MoU was entered into between both companies in January 2010, but had lapsed on May 18 this year as both parties have mutually agreed not to proceed with it. (Source: The Edge Financial Daily)


AirAsia: AirAsia X inks USD600m deal to buy General Electric engines. AirAsia X has signed a contract worth RM1.8b with General Electric to purchase jet engines for its new aircraft. Under the agreement, the long-haul low fare affiliate of AirAsia Group will purchase CF6-80E1 engines to power its three new A330-200s (with the option of two additional aircraft). (Source: The Edge Financial Daily)

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Maybank IB Views

SECTOR UPDATE
Oil & Gas: Overweight
East Coast Spotlight; WSC raised to Buy

5 companies, 2 states, 1 objective. We visited 5 oil & gas and chemical companies based in Terengganu and Pahang last week to track their respective development and progress. We covered Petronas Gas, Petronas Chemicals and Eastern Pacific Industrial Corp (EPIC) in Kerteh and Kemaman (both in Terengganu) and visited Wah Seong and KNM's operations in Gebeng (in Pahang). Wah Seong is now a Buy on improving prospects for its pipe coating operations.

Technicals
The FBM KLCI fell 0.27 points yesterday to close at 1,495.35. Its resistance areas of 1,495 and 1,529 will cap market gains, whilst the obvious support areas are located at 1,474 and 1,493.

Trading idea for today is a Buy call on MEDIAC.

Other Local News
SP Setia: More medium-cost apartments in Setia Alam. SP Setia Bhd plans to launch at least another 300 units of medium cost apartments in its Setia Alam township in the near future to benefit from the government's "My First Home Scheme". (Source: The Edge Financial Daily)

TM: Unit gets a further 10-year concession deal on Menara KL. Telekom Malaysia Bhd's (TM) subsidiary Menara Kuala Lumpur Sdn Bhd (MKLSB) has signed a 10-year concession agreement worth RM50m with the Government. (Source: Bursa Malaysia)

TDM: To build private specialist hospital in Kuantan. Terengganu Development Management (TDM) Bhd will build a RM120m private specialist hospital in Kuantan. The construction is expected to be completed by next year. (Source: The Edge Financial Daily)

Cocoaland: Buys Rawang land. Cocoaland Holdings Bhd is acquiring two pieces of industrial land in Rawang for RM7.85m from Riviera Properties Sdn Bhd. The lands are acquired for the construction of a factory and warehouse. (Source: Bursa Malaysia)

George Kent: To invest up to RM100m to expand ops. George Kent (M) Bhd plans to invest up to RM100m in the next three to four years to expand its meter and original equipment manufacturing (OEM) businesses. (Source: The Star)

APFT: Public subscription over subscribed. APFT Bhd's 15m shares allocated for public subscription has been oversubscribed by 12x. The company will be listed on the Main Market of Bursa Malaysia on March 18. (Source: The Star)

Benalec: Gets Melaka reclamation works. Benalec Holdings Bhd has entered into an agreement with Yayasan DMDI (DMDI) to undertake reclamation works at the coast of Kawasan Kota Laksamana in Bandar Melaka. (Source: Bursa Malaysia)

Property: Axis Global REIT IPO priced at RM1-RM1.05. The IPO of Malaysia's Axis Global Industrial REIT has set an indicative price range of RM1-RM1.05 a unit. The share base of about 2b units prices the IPO between RM2b-2.1b, will make it the second largest REIT in Malaysia after Sunway REIT's RM2.4b IPO last year. (Source: The Edge Financial Daily)

Plantation: Only 10 biodiesel plants operating. The government has issued 60 biodiesel manufacturing licences as at end-February 2011 but only less than one fifth has started production. This is due to the lack of demand for biodiesel exports and high palm oil prices in the 2H10. (Source: Business Times)

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Maybank IB Views

Market Strategy
Riding the high waves

Positives dominate. We expect Malaysian equities to scale new highs in 2011 supported by: (i) liquidity flows as funds continue to move into emerging markets, courtesy of the US’ 2nd dose of quantitative easing (QE2), (ii) the growing possibility of an early general election (GE), (iii) domestic investment upcycle from direct investments and the Economic Transformation Programme (ETP) implementation, and (iv) corporate exercises – M&As, privatisations and GLIC divestments – helped by low interest rates and ample liquidity.


ECONOMICS
2011 Outlook
Global Headwinds, Local Undercurrents

Volatile external environment amid “sustainability, solvency and stability” risks... Uncertainty remains over the strength and staying power of US recovery, hence the extension and expansion of monetary and fiscal stimulus. Eurozone sovereign debt turmoil persists amid concerns over the vulnerability of the peripheral economies and contagion to other countries, financial institutions’ exposure via intra-regional loans and holdings of government papers, as well as the public and banking sectors’ funding gaps. For emerging markets, namely Asia Pacific (ex-Japan) and BRIC, the issue is that of macroeconomic and financial stability as they grapple with “bubblenomy” risk arising from the combination of hot money inflows, excessive currency movements as well as general and asset price inflation.


SECTOR UPDATE
Banking: Overweight
Nov '10 statistics: Chugging along robustly

Remain Overweight. Bank Negara reported that loans to households continued to take the lead in Nov 2010, up +1.3% MoM and +13.9% YoY. Loans to businesses, which account for a smaller 44.5% of total system loans, was up +1.4% MoM but this translated into a comparatively slower +10.3% YoY. We remain Overweight on Banking as the over-riding theme in 2011 should be for project financing requirements under the ETP to spur loans growth further.


COMPANY UPDATE
IJM Corporation RM6.23: Buy
Property merger is off Shariah-compliant

Call under review. The aborted IJM Land-MRCB merger is a major disappointment as expectations have been built in for a much stronger outlook under an enlarged group. No change to our earnings forecasts which have yet to incorporate the merger potential. However, share price, which has been up 11% since the merger was proposed, is closing in to our RM6.40 RNAV. Our target price is under review pending an update with management to revisit its prospects.


Axis REIT RM2.37: Buy
Another yield accretive acquisition Shariah-compliant

Last acquisition for 2010. We are positive on the latest office purchase in Cyberjaya given its fair pricing as well as attractive 8% net property yield (vs. 6.9% funding cost). This yield-accretive acquisition is expected to enhance our 2011-12 EPS forecasts by 1.5-3.4%. We continue to like AXRB’s proven track record and hands-on management. Maintain Buy with a higher RM2.63 TP (+1.2%).


Dialog Group RM1.79: Buy
Bags ABF's EPCC job Shariah-compliant

We are bullish on fabricators. Dialog's ABF EPCC job win exhibits stronger orders and tender pipelines, and the momentum is set to sustain in 2011, especially for CTF-related EPCC works. We have raised Dialog's SOP target price to RM2.60, now incorporating part of its deepwater Pengerang centralized tankage facilities (CTF) project, which will feature prominently over the next few years. Buy.


Technicals
The FBM KLCI gained 7.33-points and closed at 1,518.91 last week, as some profit taking activities on stocks trimmed the market's initial advance. The obvious support areas for the FBM KLCI are located in the 1,474 to 1,518-zone. The key resistance areas of 1,520 and 1,531 may cap any rebound activity. we favour marginal chances of an upside break towards 1,531.99 in the medium-term.

Our weekly trading idea is a SHORT-TERM BUY call on TDM.


Other Local News
RHB, Pos Malaysia: To launch new banking service. RHB Banking Group, in a collaborative effort with Pos Malaysia Bhd, is launching the Pos Malaysia-RHB Shared Banking Services to enable banking services for its customers at selected Pos Malaysia outlets nationwide. The first phase would involve 21 selected Pos Malaysia outlets in the Klang Valley and Negri Sembilan. (Source: The Star)

Construction: RM144m allocated for infrastructure facilities in Kelantan. The Rural and Regional Development Ministry has allocated RM144m to provide infrastructure facilities in Kelantan during 2011. The projects include the provision of water and electricity supply, construction of roads, and building of houses for the poor. (Source: The Star)

Construction: RM1.46b island project revived. The RM1.46b Pulau Melaka twin reclaimed island project has been revived after a decade of financial and legal woes. The project, that involves the construction of some 400 commercial shop lots comprising a total of 1,534 units, would resume by September 2011. Most of the development work on the island has been completed with 521 units finished. (Source: The Star)

Mining: Advance SCT restarts Malaysian aluminium smelting plant. Advance SCT Ltd, one of Singapore's largest traders of aluminium, copper and stainless steel scraps, has restarted its aluminium smelting plant in Malaysia last month. The smelter would produce 200 to 400 tonnes of aluminium ingots monthly. It has also secured an exclusive contract to supply at least 1,000 tonnes a month of first grade copper scraps to China-based Qingyuan Shengli Copper Material Co Ltd. (Source: The Star)

Plantation: Oil palm dealers concerned about MPOB's new rule. The Malaysia Oil Palm Dealers Association (MOPDA) has expressed concern over Malaysian Palm Oil Board’s (MPOB) move to bar dealers from buying and selling oil palm fresh fruit bunches (FFB). The MPOB ruling, effective since 1st January 2011, allows estates, smallholders and dealers to sell directly to millers, preventing small dealers from being monopolised by big dealers, and enhancing the quality of oil palm fruits so that the oil extraction rate would exceed 25%. (Source: The Star)

Insurance: AXA Affin, BH Insurance to merge. AXA Affin General Insurance Bhd will merge with BH Insurance (M) Bhd and operate as single entity starting Jan 1. The combined turnover of the two entities puts them among the top five insurers in the country. (Source: The Star)

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Maybank IB Research

ECONOMICS
3Q10 Real GDP
Further slowdown in growth...

3Q10 real GDP growth slowed to a lower than expected +5.3% YoY (Maybank IB estimate: +6.1% YoY; consensus estimate: +5.9% YoY). Growth was supported by continued growth in consumer and business spending as fiscal stimulus faded and external demand softened. We are placing our current full-year forecasts of 7.5% for 2010 and 6.1% for 2011 under review. Indications are that this year's growth will come in in between our and official forecast (+7%) and next year's growth to likely be in the 5.5% to 6% range.


SECTOR UPDATE
Plantation Sector: Neutral
A re-look at small caps

Hidden gems. Contrary to market expectations, plantation small caps (RM5b) by 14% YTD but underperformed mid caps (RM1b–RM5b) by 11% YTD. While the overall valuation discount of small caps to mid and big caps have narrowed, there are still attractively valued stocks. We identify four names, MHC Plantations, Kurnia Setia, NPC Resources and TDM.


Automotive: Overweight
Sales rebound in Oct

Oct vehicle sales were stronger than expected with preference for smaller vehicles. We expect 2010's TIV to reach 580,000 units, which implies soft Nov-Dec periods. Nonetheless, new launches will dominate headlines as distributors will build orders for 2011's delivery. Stock-wise, all the companies have performed well this year, up 8.3 - 80.1% YTD, driven by recovery in spending and stronger RM. We are placing our strategy and calls on hold for now pending the Nov results season.


RESULTS PREVIEW
AirAsia RM2.48: Buy
3Q to surprise on strong yields Shariah-compliant

Looking great. AirAsia will release its 3Q10 results on 25th November. 3Q10 is expected to be highly profitable, buoyed by strong passenger growth, high load factors, and positive outlook on yields. We raise our earnings forecasts to account for higher yields, off-setting higher fuel costs. Maintain Buy, with a raised target price of RM2.94 (+23% from previous) based on 10.1x 2011 PER - 10% discount to peers.


RESULTS REVIEW
CIMB Group Holdings RM8.41: Buy
Regional aspirations on track; upgrade to Buy

RM1b special dividend surprise. An unexpected 13.45sen/sh single-tier dividend totaling RM986m will be paid by 31 Dec 2010 (ex-date: 3 Dec). This suggests that future regulatory capital requirements may be well within CIMB's existing capacity. 9M10 net profit is in line, but we upgrade our 2011-12 earnings forecasts by 7% p.a. after raising our expectations for investment banking and Niaga. 2011 will continue to be a strong year. Upgrade to Buy with a new RM9.50 (+12%) TP.


UMW Holdings RM6.80: Hold
Auto drifts; O&G still drags Shariah-compliant

Auto's positive priced in; concern remains at O&G. Stronger 9M results, largely from auto and Ringgit, led us to lift 2010-12 forecasts by 15% p.a. Correspondingly, our target price is raised by 9% to RM7.20, based on unchanged 12x 2011 PER, in tandem with peers. Our Hold call remains. We are still unconvinced by its O&G's operations - impairment risk for Naga 3, continued losses at WSP. At the same time, we feel that its auto division growth prospect is already priced in.


QL Resources RM5.85: Buy
Scarcity premium now on the agenda? Shariah-compliant

Earnings delivered. As expected, QL chalked up another quarter of more than 20% YoY net profit growth as supply factors turned favourable for the Marine and Livestock divisions. Whilst we retain our earnings forecasts, we raise our TP to RM6.50 (+10%) as we normalise post-FY13 semi-explicit tax rates to FY13’s 15% instead of 20% as QL continues enjoying tax incentives from its expansion.


Dialog Group RM1.44: Buy
Strong visibility; target price raised Shariah-compliant

A fluid start. 1QFY11 earnings account for 26% of our full year forecast. We remain positive on Dialog's business model and direction as it seeks to grow its oil storage operations via the Tj. Langsat and Pengerang bases over the next 10 years. The CTF operations, backed by major oil traders (i.e. Vopak, Trafigura) and PETRONAS (i.e. MISC) should provide sustainable long term earnings, strong cashflows and consistent dividends. Buy with a higher RM1.75 SOP TP (+40%).


Technicals
The FBM KLCI fell 2.85 points to 1,503.20 yesterday.Due to the weaker tone in the USA last night, we may see the FBM KLCI in a "range trading" mode today. Its resistance areas at 1,503 and 1,520 will cap market gains, whilst its weaker support areas are located at 1,487 and 1,500.

Our trading idea for today is an ACCUMULATE call on HAPSENG.


Other Local News
IJM Land, MRCB: Shares suspended. Market talk of a potential merger involving IJM Land Bhd and Malaysian Resources Corp Bhd (MRCB) has intensified with the suspension of the shares of IJM Land, its parent IJM Corp Bhd and MRCB since 9am yesterday pending a material announcement on a potential corporate exercise. The companies are expected to announce details of the corporate exercise later today. (Source: The Star)

Salcon: Sells stake in unit for RM112m, aims to list unit in HKEx. Integrated water and wastewater engineering company Salcon Bhd has sold a 40% stake in Salcon Water (Asia) Ltd (SalconAsia) to Challenger Emerging Market Infrastructure Fund Pte Ltd (EMIF). SalconAsia holds the company’s water assets in China. Salcon also plans to list SalconAsia on the Hong Kong Stock Exchange (HKEx) in the next two to three years. (Source: The Edge Financial Daily)

Plantation: Introducing higher oil yielding seed. Agricultural Resources Sdn Bhd (AAR) introduced its' higher oil yielding semi-clonal hybrid called "AA Hybrida 1". Compared to Dolly Parton (Dura X Pisifera) which is the standard planting material, AA Hybrida I produces more, but smaller fruit bunches with 20% higher oil yields. (Source: Business Times)

Healthcare: Malaysia to review fees of doctors, private hospitals. The government will review the fees of doctors and private hospitals. The ministry will also set up six more ambulatory (out-patient) care centres under the Tenth Malaysian Plan, from 15 currently. (Source: Business Times)

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Weekly Equity Information Flyer - 18 October 2010

TDM Berhad , the company that operates 3 specialist hospitals namely the Kelana Jaya Medical Centre in Petaling Jaya, Kuantan Medical Centre in Kuantan and Kuala Terengganu Specialist Hospital in Kuala Terengganu.

Buy Price : RM2.31

Target Price : RM2.58

Bolton Berhad , one of the oldest and most established property developers in Malaysia.

Buy Price : RM1.16

Target Price : RM1.35

Eksons Corporation Berhad , one of the largest manufacturers of tropical thin plywood in the Asia Pacific region with over 90% of its products are earmarked for the export market.

Buy Price : RM1.11

Target Price : RM1.28

Handal Resources Berhad , a fully integrated offshore pedestal crane service and manufacturing provider specilising in the oil and gas industry.

Buy Price : RM1.15

Target Price : RM1.38

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