Top Story : Tanjong – A weaker 4Q, but largely expected Outperform
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- Tanjong is expected to report its 4QFY01/10 results sometime next week. Our full-year net profit estimate implies that 4Q net profit could be down by around 20% yoy (ex-4QFY09 exceptionals) and 30% qoq.
- For the power division, lumpy items such as business development and bidding costs as well as scheduled maintenance expenses were relatively minimal in 9MFY10 but could skew 4Q’s numbers.
- As for the gaming segment, we expect weaker operating profit for the quarter largely on expectations of a higher prize payout for the NFO division as the ratio normalises. We also expect a qoq drop in contribution from Tropical Island largely due to seasonality.
- We expect Tanjong to declare an interim gross DPS of 17.5 sen (4QFY09: 17.5 sen) and a final gross DPS of 22 sen (FY09 final gross DPS: 20 sen). This will bring the total gross DPS for FY10 to 92 sen (FY09: 90 sen).
- No change to our earnings forecasts for now.
- SOP-derived fair value of RM19.10 and Outperform call maintained.
RHB Equity 360° (Tanjong, Telecommunications, Top Glove, BToto; Technical: Genting) - 16/03/2010
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