The Performance Management and Delivery Unit (Pemandu), headed by Minister in the Prime Minister’s Department Datuk Idris Jala, organised the Subsidy Rationalisation Lab on 27 May to get feedbacks from the public on its proposals to cut subsidies that could save the nation up to RM103bn over five years (see Tables 1 & 2). According to Pemandu, the Government provided a total of RM74bn as subsidies in 2009. This includes RM42.9bn or 58% for social services covering education and healthcare, RM23.7bn or 32% for fuel and energy, RM4.4bn or 6% for infrastructure and RM3.0bn or 4% for food. Pemandu further said that 61% out of 191,592 respondents who took part in an sms poll supported the subsidy reduction and 66% said that the reduction should be done over 3-5 years.
Economic Highlights - Proposals By Pemandu To Cut Subsidies - 31/5/2010
Monday, May 31, 2010
CB Industrial Product Berhad : Picking Up Momentum - 31/5/2010
In line, should improve in next few quarters. CBIP’s 1QFY10 net profit was in line with our and consensus estimates, coming in at 19.8% of our and 18.6% of consensus FY10 forecasts, respectively. This is in line with CBIP’s traditionally stronger earnings in the 2H of the year. CBIP declared an interim dividend of 5 sen (tax exempt), which is in line with our expectations.
CB Industrial Product Berhad : Picking Up Momentum - 31/5/2010
CB Industrial Product Berhad : Picking Up Momentum - 31/5/2010
Market Technical Reading - “Sell Into Strength” On Possible Further Rebound... - 31/5/2010
Local Market Leads:
♦ In tandem with the strong bargain-hunting support in the regional markets, the FBM KLCI finally reversed its nine-day losing streaks with a powerful technical rebound on Thursday. It was closed on Friday.
♦ Despite a weak opening on the back of the late overnight selldown in the Wall Street last Wednesday, the local benchmark quickly regained its lost ground and marched into the positive territory.
Market Technical Reading - “Sell Into Strength” On Possible Further Rebound... - 31/5/2010
♦ In tandem with the strong bargain-hunting support in the regional markets, the FBM KLCI finally reversed its nine-day losing streaks with a powerful technical rebound on Thursday. It was closed on Friday.
♦ Despite a weak opening on the back of the late overnight selldown in the Wall Street last Wednesday, the local benchmark quickly regained its lost ground and marched into the positive territory.
Market Technical Reading - “Sell Into Strength” On Possible Further Rebound... - 31/5/2010
The World Economy... - 31/5/2010
Today’s Highlight: China’s Real Estate Bond Market Pointing To Rising Risk And A Slower Economic Growth In The 2H Of The Year
Bonds sold by China’s real estate companies this year are the worst performers among Asian non-financial corporate debt denominated in US dollar given concerns over an overheating property market in China. Yields on the US$3.9bn of bonds issued by Kaisa Group Holdings Ltd., Country Garden Holdings Co. and seven other developers since January widened by an average 2.26 percentage points relative to US Treasuries as of last week, according to data compiled by Bloomberg. Kaisa is developing 18 projects in Shenzhen, Dongguan and other cities in the Pearl River Delta, most of them high-rise residential complexes that combined recreational and commercial space. That was more than the 2.05 percentage points increase in spreads for the seven dollar-denominated bonds sold by other companies in Asia outside Japan, indicating that investors are demanding higher yields in view of rising risks of defaults. As a result, Glorious Property Holdings Ltd., which has 26 real estate projects in cities including Shanghai, Beijing, Harbin and Changchun, was forced to postpone its first sale of US dollar-denominated bonds in April. The amount of US dollar bonds sold by China developers represents 45% of all corporate dollar debt sales in Asia outside Japan this year, Bloomberg data show. China has introduced various measures to cool the property market, including raising banks’ reserve requirements three times since January, restricting pre-sales by developers and curbing loans for third-home purchases. It also raised minimum mortgage rates and tightened down-payment requirements for second homes.
The World Economy... - 31/5/2010
Bonds sold by China’s real estate companies this year are the worst performers among Asian non-financial corporate debt denominated in US dollar given concerns over an overheating property market in China. Yields on the US$3.9bn of bonds issued by Kaisa Group Holdings Ltd., Country Garden Holdings Co. and seven other developers since January widened by an average 2.26 percentage points relative to US Treasuries as of last week, according to data compiled by Bloomberg. Kaisa is developing 18 projects in Shenzhen, Dongguan and other cities in the Pearl River Delta, most of them high-rise residential complexes that combined recreational and commercial space. That was more than the 2.05 percentage points increase in spreads for the seven dollar-denominated bonds sold by other companies in Asia outside Japan, indicating that investors are demanding higher yields in view of rising risks of defaults. As a result, Glorious Property Holdings Ltd., which has 26 real estate projects in cities including Shanghai, Beijing, Harbin and Changchun, was forced to postpone its first sale of US dollar-denominated bonds in April. The amount of US dollar bonds sold by China developers represents 45% of all corporate dollar debt sales in Asia outside Japan this year, Bloomberg data show. China has introduced various measures to cool the property market, including raising banks’ reserve requirements three times since January, restricting pre-sales by developers and curbing loans for third-home purchases. It also raised minimum mortgage rates and tightened down-payment requirements for second homes.
The World Economy... - 31/5/2010
Emas Kiara Industries Berhad : 1QFY12/10 Net Profit Grows 23% YoY - 31/5/2010
In line. 1QFY12/10 net profit came at 22% of our full-year forecast. However, we consider the results within our expectation as we expect stronger quarters ahead as work on the RM50m contract for the supply and installation of geosynthetic products for the new permanent LCCT project gathers momentum.
Emas Kiara Industries Berhad : 1QFY12/10 Net Profit Grows 23% YoY - 31/5/2010
Emas Kiara Industries Berhad : 1QFY12/10 Net Profit Grows 23% YoY - 31/5/2010
Petra Perdana Berhad : No Surprises - 31/5/2010
1QFY12/10 results largely in line. 1QFY12/10 core net profit of RM3.6m (-11% qoq, -77% yoy), accounted for 15% and 7% of our fullyear forecast and market consensus. However, we consider the results to be largely in line as we expect stronger quarters ahead stemming from the delivery of seven vessels (four AHTS, three workbarge) for the Jun-Dec 2010 period. 1QFY12/10 marine revenue fell 16% yoy mainly due to:
1) declining charter rates (with average charter rates for the 10-12k HP AHTS having slipped 35% yoy to around US$1.70-1.80); and
2) lower utilisation rates (1Q utilisation rates of 60% vs. 75% in 1QFY12/09).
4Q revenue was flat on a qoq basis given 4QFY12/09 utilisation rates of around 60%. Lower qoq for marine margin due to higher operating cost in 1QFY10 arising from mobilisation of newly-delivered Petra Sovereign.
Petra Perdana Berhad : No Surprises - 31/5/2010
1) declining charter rates (with average charter rates for the 10-12k HP AHTS having slipped 35% yoy to around US$1.70-1.80); and
2) lower utilisation rates (1Q utilisation rates of 60% vs. 75% in 1QFY12/09).
4Q revenue was flat on a qoq basis given 4QFY12/09 utilisation rates of around 60%. Lower qoq for marine margin due to higher operating cost in 1QFY10 arising from mobilisation of newly-delivered Petra Sovereign.
Petra Perdana Berhad : No Surprises - 31/5/2010
Ta Ann Holdings Berhad : Earnings Expected To Pick Up From 2QFY12/10 - 31/5/2010
In line. Ta Ann recorded 1QFY12/10 net profit of RM8m (-8.3% yoy). Although this only accounts for 8% of our and consensus expectations, we consider this to be in line as we expect sales volume and average selling prices of plywood, to pick up from 2Q onwards following a seasonally weak 1Q. Ta Ann has also declared an interim dividend of 3 sen (less 25% tax) during the quarter, in line with our full year expectations of 7 sen.
Ta Ann Holdings Berhad : Earnings Expected To Pick Up From 2QFY12/10 - 31/5/2010
Ta Ann Holdings Berhad : Earnings Expected To Pick Up From 2QFY12/10 - 31/5/2010
YTL Cement Berhad : 3QFY06/10 Performance Rises On One-Off Gains; Anticipating Better 4Q - 31/5/2010
In line. 9MFY06/10 core net profit of RM201.9m came in at 67.6% of our full-year forecast. However, we consider this within our expectation as we expect 4Q to come in stronger on the back of the 10% increase domestic cement price effective 1 May 10.
YTL Cement Berhad : 3QFY06/10 Performance Rises On One-Off Gains;Anticipating Better 4Q - 31/5/2010
YTL Cement Berhad : 3QFY06/10 Performance Rises On One-Off Gains;Anticipating Better 4Q - 31/5/2010
YTL Power Intl Berhad : 3Q Net Profit Up 20.5% YoY - 31/5/2010
Broadly within expectations. YTLP’s 3QFY10 results came in at the lower end of our and consensus expectations with 9M net profit of RM783m (+27% yoy) accounting for around 66-67% of our and consensus full-year estimates. While 4Q tends to be a seasonally stronger quarter for Wessex this time round, contribution would likely be hampered by a weaker GBP.
YTL Power Intl Berhad : 3Q Net Profit Up 20.5% YoY - 31/5/2010
YTL Power Intl Berhad : 3Q Net Profit Up 20.5% YoY - 31/5/2010
Carlsberg Brewery Berhad : Strong Contribution From Singapore - 31/5/2010
In line. Carlsberg reported 1QFY12/10 net profit of RM37.8m, which were within our and consensus expectations, accounting for 29% and 34% of our and consensus full year forecasts respectively. We consider the results to be in line due to the Chinese New Year seasonality factor. No dividend was declared during the quarter.
Carlsberg Brewery Berhad : Strong Contribution From Singapore - 31/5/2010
Carlsberg Brewery Berhad : Strong Contribution From Singapore - 31/5/2010
Allianz Malaysia Berhad : Strong Premium Growth For 1QFY12/10 - 31/5/2010
Strong premium growth for both general and life. For 1QFY12/10, Allianz posted strong yoy growth of 29.0% and 35.6% in gross premiums for its general and life businesses respectively. For its general business, gross premiums grew to RM361.7m from RM280.4m in 1QFY12/09. Its general insurance agency force contributed 53% of gross written premiums, while for its life business, premium growth was driven by increased agency manpower, which contributed 86.9% of annualised new premiums (ANP).
Allianz Malaysia Berhad : Strong Premium Growth For 1QFY12/10 - 31/5/2010
Allianz Malaysia Berhad : Strong Premium Growth For 1QFY12/10 - 31/5/2010
Genting Berhad : Boosted By Maiden Contribution From Singapore - 31/5/2010
In line with ours, but above consensus on PBT level. Genting’s 1QFY10 normalised pretax profit was in line with our expectations, coming in at 24% of our FY10 forecasts, but above consensus, comprising 30% of consensus forecasts. We compare our forecasts at the pretax profit level as Genting’s net profit has been skewed by a large RM266.9m positive minority interest caused by the losses recorded in Genting Singapore (GS) in 1Q10. No dividend was declared during the quarter.
Genting Berhad : Holding On To Market Share - 31/5/2010
Genting Berhad : Holding On To Market Share - 31/5/2010
Genting Malaysia Berhad : Holding On To Market Share - 31/5/2010
In line. Genting Malaysia’s (GM) 1QFY10 core net profit was in line with expectations, making up 29-32% of our and consensus forecasts. In 1QFY10, GM recorded an impairment loss of RM110.9m for its investment in Walker Digital, which, after assessment of the excess of the carrying value over the estimated recoverable amount. Although GM’s 1Q earnings would seem stronger versus the normal contribution of 20-25% of full year earnings in the 1Q, we note that the timing of the Chinese New Year festive period would have boosted earnings during the quarter. In addition, with the opening of both the IRs in Singapore, we do expect a certain level of cannibalisation of market share in the remaining quarters of FY10, albeit a small amount, to result in weaker visitor numbers for the rest of the year, until the novelty factor wears off. No dividend was declared during the quarter.
Genting Malaysia Berhad : Holding On To Market Share - 31/5/2010
Genting Malaysia Berhad : Holding On To Market Share - 31/5/2010
Axiata Group Berhad : Improvements Gaining Momentum - 31/5/2010
In line. 1QFY10 core net profit of RM594.5m accounted for 28.5% of our and 29.8% of consensus full-year estimates respectively. However, we consider the results to be within expectations as the group’s 1Q effective tax rate (ex-EI) stood at a low 21.4% (vs. our full-year assumption of 32%) and this tends to fluctuate, as witnessed in the previous quarters.
Axiata Group Berhad : Improvements Gaining Momentum - 31/5/2010
Axiata Group Berhad : Improvements Gaining Momentum - 31/5/2010
Telekom Malaysia Berhad : No Commitment On Capital Management Yet - 31/5/2010
1Q10 missed expectations. 1Q10’s core net profit of RM92.7m (-53.6% yoy; -5.0% qoq) came in below expectations, accounting for only 19.3% of our and 16% of consensus full-year estimates respectively. The key variances were:
1) lower-than-expected other operating income; and
2) Higher-than-expected effective tax rate (ex-EI) of 32.3% vs. our full-year assumption of 26%. However, 1Q10 revenue was in line with our estimate.
Telekom Malaysia Berhad : No Commitment On Capital Management Yet - 31/5/2010
1) lower-than-expected other operating income; and
2) Higher-than-expected effective tax rate (ex-EI) of 32.3% vs. our full-year assumption of 26%. However, 1Q10 revenue was in line with our estimate.
Telekom Malaysia Berhad : No Commitment On Capital Management Yet - 31/5/2010
Sime Darby Berhad : Confidence Still Shaky - 31/5/2010
In line with our forecasts, but above consensus. Sime Darby’s 9MFY06/10 core net profit came in within our expectations but above consensus, at 78% of our FY10 forecasts and 85% of consensus’ forecasts. In 3QFY10, Sime recorded a net EI loss of RM1.09bn, comprising provisions for:
(1) its Qatar project of RM200m;
(2) Maersk Oil project of RM159m;
(3) Marine project of RM155m;
(4) Bakun project (under its 35.7% associate) of RM450m; and
(5) RM3.4m in net unrealised exchange loss.
Sime Darby Berhad : Confidence Still Shaky - 31/5/2010
(1) its Qatar project of RM200m;
(2) Maersk Oil project of RM159m;
(3) Marine project of RM155m;
(4) Bakun project (under its 35.7% associate) of RM450m; and
(5) RM3.4m in net unrealised exchange loss.
Sime Darby Berhad : Confidence Still Shaky - 31/5/2010
Consumer Sector - Tobacco - Small Pack Ban Delayed To 1 Jan 2011 - 31/5/2010
Delay in less than 20s pack ban. According to media sources, the Ministry of Health (MOH) confirmed that it will delay the ban on sale of less than 20s pack to 1 Jan 11 (initially set to be implemented on 1 Jun 10), citing that it has yet to complete a comprehensive study on its impact on the sale of illicit cigarettes in the country. This is the third time the ban has been postponed.
Consumer Sector - Tobacco - Small Pack Ban Delayed To 1 Jan 2011 - 31/5/2010
Consumer Sector - Tobacco - Small Pack Ban Delayed To 1 Jan 2011 - 31/5/2010
Fajarbaru Builder Group Berhad : To Embark On A Greenfield Hotel Project In Melaka - 31/5/2010
RM15m for 3.5-acre land in Pulau Melaka. Fajarbaru has proposed to acquire from three individuals the entire equity interest in Temasek Perkasa Sdn Bhd (Temasek Perkasa) for RM15m. Temasek Perkasa owns 3.5 acres of land with sea frontage in Pulau Melaka, Melaka. We understand that Fajarbaru has plan to put in another RM55-65m to build a “high-end” hotel on the site.
Fajarbaru Builder Group Berhad : To Embark On A Greenfield Hotel Project In Melaka - 31/5/2010
Fajarbaru Builder Group Berhad : To Embark On A Greenfield Hotel Project In Melaka - 31/5/2010
Dialog Group Berhad : Secured E&C Contract Worth SG$21.3m
Bags SG$21.3m contract. Dialog announced last Thursday that it had received a letter of award from Chiyoda Singapore for the provision of shop fabrication and site erection of storage tanks for the Stolthaven Singapore Development Project. The contract is worth SG$21.3m and is expected to be delivered in Dec 2011.
Dialog Group Berhad : Secured E&C Contract Worth SG$21.3m
Dialog Group Berhad : Secured E&C Contract Worth SG$21.3m
PLUS Expressways Berhad : Potentially Higher Toll Rates And Fuel Price in 2H
Government proposed to stop subsidising toll rates. During the Performance Management and Delivery Unit (Pemandu) briefing, the Government proposed that it would no longer subsidise toll rates for highways that have alternative roads from mid-2010 as part of its plan to reduce the total subsidies. This means toll rates at most of PLUS’s highways if not all) will be raised should the proposal is accepted.
PLUS Expressways Berhad : Potentially Higher Toll Rates And Fuel Price in 2H
PLUS Expressways Berhad : Potentially Higher Toll Rates And Fuel Price in 2H
Tenaga Nasional Berhad : Cutting Subsidies For A Better Tomorrow
Measures for subsidy cuts unveiled... Minister in the Prime Minister’s Dpeartment, Datuk Seri Idris Jala, unveiled several measures last week that, if implemented, could help cut the subsidy bill by RM103bn over the next 5 years. Not surprisingly, reducing gas subsidies to both the power and manufacturing sectors was identified as one of the measures.
Tenaga Nasional Berhad : Cutting Subsidies For A Better Tomorrow
Tenaga Nasional Berhad : Cutting Subsidies For A Better Tomorrow
Media Chinese Int’l Berhad : Expecting Stronger Adex Ahead - 31/5/2010
♦ MCIL held an anaylst briefing last Thursday. We set out below the key highlights from the briefing.
♦ Expect stronger quarters ahead on stronger adex … Recall MCIL’s FY10 EBIT margin expanded by 5.6%-pts yoy. This was mainly due to the publishing and printing business resulting from:
1) recovery in ad revenue;
2) effective cost-control measures; and
3) lower newsprint costs.
In terms of adex, management expects stronger ad revenue ahead with bookings visibility having improved to around two months as opposed to only a month a year ago.
Media Chinese Int’l Berhad : Expecting Stronger Adex Ahead - 31/5/2010
♦ Expect stronger quarters ahead on stronger adex … Recall MCIL’s FY10 EBIT margin expanded by 5.6%-pts yoy. This was mainly due to the publishing and printing business resulting from:
1) recovery in ad revenue;
2) effective cost-control measures; and
3) lower newsprint costs.
In terms of adex, management expects stronger ad revenue ahead with bookings visibility having improved to around two months as opposed to only a month a year ago.
Media Chinese Int’l Berhad : Expecting Stronger Adex Ahead - 31/5/2010
RHB Equity 360° (MCIL, Consumer, Allianz, TNB, PLUS, Dialog, Fajarbaru, Axiata, TM, Gent Msia, Genting, Sime, CBIP, Ta Ann, ...) - 31/05/2010
Top Story : MCIL – Expecting stronger adex ahead - Outperform
Briefing Note
- Management expects stronger ad revenue ahead with bookings visibility having improved to around two months as opposed to only a month a year ago. We believe ad spending in the months ahead should see further improvement, in tandem with a recovering economy and sporting events ahead.
- Currently, the Hong Kong and Malaysian operations are carrying around 3 and 8 months worth of newsprint stock respectively at an average cost of US$550-580. This lower cost should bode well for the group ahead but a dampener is that the current newsprint price is around US$700/tonne. MCIL’s strategy would be to wait for the newsprint price to drop in order to stock-up more.
- MCIL has also been expanding its presence in the digital media platform by entering into mobile reading market in China through ByRead and introducing an entertainment website called Hihoku in Nov 2009. Total capex spent on expanding its digital media platform was said to be minimal (approximately HK$2m) and management expects to spent another HK$2m p.a. moving forward.
- Our fair value is maintained at RM1.14, based on unchanged target CY10 PER of 13x.
RHB Equity 360° (MCIL, Consumer, Allianz, TNB, PLUS, Dialog, Fajarbaru, Axiata, TM, Gent,Sime, CBIP, Ta Ann...
Briefing Note
- Management expects stronger ad revenue ahead with bookings visibility having improved to around two months as opposed to only a month a year ago. We believe ad spending in the months ahead should see further improvement, in tandem with a recovering economy and sporting events ahead.
- Currently, the Hong Kong and Malaysian operations are carrying around 3 and 8 months worth of newsprint stock respectively at an average cost of US$550-580. This lower cost should bode well for the group ahead but a dampener is that the current newsprint price is around US$700/tonne. MCIL’s strategy would be to wait for the newsprint price to drop in order to stock-up more.
- MCIL has also been expanding its presence in the digital media platform by entering into mobile reading market in China through ByRead and introducing an entertainment website called Hihoku in Nov 2009. Total capex spent on expanding its digital media platform was said to be minimal (approximately HK$2m) and management expects to spent another HK$2m p.a. moving forward.
- Our fair value is maintained at RM1.14, based on unchanged target CY10 PER of 13x.
RHB Equity 360° (MCIL, Consumer, Allianz, TNB, PLUS, Dialog, Fajarbaru, Axiata, TM, Gent,Sime, CBIP, Ta Ann...
Thursday, May 27, 2010
Malaysian Pacific Industries Berhad : Stronger Growth Ahead - 27/05/2010
Stronger growth expected. Management expects 4QFY06/10 revenue to register stronger qoq growth, given 3QFY06/10 qoq growth of +2.0% which bucks the trend of a seasonally weaker quarter. In addition, management expects 4QFY06/10 net profit to grow sequentially on the back of: 1) higher utilisation rate; 2) stronger contribution from MLP and high-density packages; and 3) margin expansion stemming from higher contribution of high-density packages and cost-cutting measures. We understand that overall utilisation rates increased to 95% from 85% in 2QFY06/10. Note that utilisation rates for Ipoh, Suzhou, and Dynacraft plants currently stand
at 95%, 100%, and 90% respectively (vs. 90%, 100%, and 85% in 3QFY06/10).
Malaysian Pacific Industries Berhad : Stronger Growth Ahead-27/05/2010
at 95%, 100%, and 90% respectively (vs. 90%, 100%, and 85% in 3QFY06/10).
Malaysian Pacific Industries Berhad : Stronger Growth Ahead-27/05/2010
Mandarin Version - Market Technical Reading : More To Stay Sideline Ahead Of The Long Weekend... - 27/05/2010
Local Market Leads:
♦ Dragged by the last minute selloff on the heavyweights stocks, the FBM KLCI reversed its early gains and turned lower for the ninth straight day on Wednesday.
♦ Although the local benchmark index traded in the positive territory for most of the day amid strong rebound in the overseas markets, it ended negatively after investors dumped stocks like GenM (-15sen), Sime (-14sen) and Maybank (-8sen) in late trading hour yesterday.
♦ This caused the FBM KLCI to fall another 1.19 pts or 0.10% to 1,248.94, below the key 1,250 support level.
♦ Turnover was flat at 930m shares and the market breadth turned positive for the first time in six trading days with 426 advancers outpacing 320 decliners.
♦ Elsewhere, regional investors turned positive on the late recovery in the US markets, which have successfully shrugged off a nearly 3% slide in the early session.
♦ Leading the regional markets was Jakarta Composite index that has rallied 7.27% yesterday.
Mandarin Version - Market Technical Reading : More To Stay Sideline Ahead Of The Long Weekend...-27/05/2010
♦ Dragged by the last minute selloff on the heavyweights stocks, the FBM KLCI reversed its early gains and turned lower for the ninth straight day on Wednesday.
♦ Although the local benchmark index traded in the positive territory for most of the day amid strong rebound in the overseas markets, it ended negatively after investors dumped stocks like GenM (-15sen), Sime (-14sen) and Maybank (-8sen) in late trading hour yesterday.
♦ This caused the FBM KLCI to fall another 1.19 pts or 0.10% to 1,248.94, below the key 1,250 support level.
♦ Turnover was flat at 930m shares and the market breadth turned positive for the first time in six trading days with 426 advancers outpacing 320 decliners.
♦ Elsewhere, regional investors turned positive on the late recovery in the US markets, which have successfully shrugged off a nearly 3% slide in the early session.
♦ Leading the regional markets was Jakarta Composite index that has rallied 7.27% yesterday.
Mandarin Version - Market Technical Reading : More To Stay Sideline Ahead Of The Long Weekend...-27/05/2010
Market Technical Reading: More To Stay Sideline Ahead Of The Long Weekend... - 27/05/2010
Local Market Leads:
♦ Dragged by the last minute selloff on the heavyweights stocks, the FBM KLCI reversed its early gains and turned lower for the ninth straight day on Wednesday.
♦ Although the local benchmark index traded in the positive territory for most of the day amid strong rebound in the overseas markets, it ended negatively after investors dumped stocks like GenM (-15sen), Sime (-14sen) and Maybank (-8sen) in late trading hour yesterday.
♦ This caused the FBM KLCI to fall another 1.19 pts or 0.10% to 1,248.94, below the key 1,250 support level.
♦ Turnover was flat at 930m shares and the market breadth turned positive for the first time in six trading days with 426 advancers outpacing 320 decliners.
♦ Elsewhere, regional investors turned positive on the late recovery in the US markets, which have successfully shrugged off a nearly 3% slide in the early session.
♦ Leading the regional markets was Jakarta Composite index that has rallied 7.27% yesterday.
Market Technical Reading : More To Stay Sideline Ahead Of The Long Weekend... - 27/05/2010
♦ Dragged by the last minute selloff on the heavyweights stocks, the FBM KLCI reversed its early gains and turned lower for the ninth straight day on Wednesday.
♦ Although the local benchmark index traded in the positive territory for most of the day amid strong rebound in the overseas markets, it ended negatively after investors dumped stocks like GenM (-15sen), Sime (-14sen) and Maybank (-8sen) in late trading hour yesterday.
♦ This caused the FBM KLCI to fall another 1.19 pts or 0.10% to 1,248.94, below the key 1,250 support level.
♦ Turnover was flat at 930m shares and the market breadth turned positive for the first time in six trading days with 426 advancers outpacing 320 decliners.
♦ Elsewhere, regional investors turned positive on the late recovery in the US markets, which have successfully shrugged off a nearly 3% slide in the early session.
♦ Leading the regional markets was Jakarta Composite index that has rallied 7.27% yesterday.
Market Technical Reading : More To Stay Sideline Ahead Of The Long Weekend... - 27/05/2010
Tan Chong Motors Holdings Berhad : Steady Start To The Year - 27/05/2010
1QFY12/10 results in line. 1QFY12/10 results were largely in line with our and market expectations, accounting for 24.9% and 27.9% of our full-year forecast and market consensus respectively.
Tan Chong Motors Holdings Berhad : Steady Start To The Year
Tan Chong Motors Holdings Berhad : Steady Start To The Year
Ta Ann Holdings Berhad : 1QFY10 Results Likely To Be Impacted By Higher FFB Cost - 27/05/2010
1QFY12/10 results preview. Ta Ann’s 1Q10 results (due out today) are likely to come in below our expectations. This is mainly due to the sharp increase in FFB cost of >20% in 1Q10 vs. FY09 (from our initial assumption of a flattish FFB cost yoy). The increase in FFB cost was mainly due to higher fertilizer cost following higher fertilizer application on its plants during the quarter. As such, we have increased our FFB cost assumption to RM320/mt (from RM300/mt) in FY10-FY11 p.a. and maintained our FFB cost assumption at RM300/mt in FY12.
Ta Ann Holdings Berhad : 1QFY10 Results Likely To Be Impacted By Higher FFB Cost -27/05/2010
Ta Ann Holdings Berhad : 1QFY10 Results Likely To Be Impacted By Higher FFB Cost -27/05/2010
RCE Capital Berhad : Strong Finish To The Year And Dividends Surprises - 27/05/2010
4QFY03/10 results within expectations. RCE’s 4QFY03/10 net profit of RM22.8m (+23% yoy; +9% qoq) was within our and consensus expectations with FY10 net profit to RM81.1m (+21.8% yoy) accounting for 102.5-103.5% of our and consensus net profit forecasts. Note that 4QFY10 results include a RM6.6m charge for the group’s ESOS scheme, excluding which, FY10 net profit would have come in around 9-10% ahead of our and consensus estimates.
RCE Capital Berhad : Strong Finish To The Year And Dividends Surprises -27/05/2010
RCE Capital Berhad : Strong Finish To The Year And Dividends Surprises -27/05/2010
Proton Holdings Berhad : Standing Strong - 27/05/2010
In line. Excluding EI, normalised net profit of RM248.1m was largely in line with expectations. It accounted for 96% and 95% of our full-year and market consensus respectively. 4QFY03/10 revenue improved 12.4% qoq and 61.4% yoy as total unit sales increased 6.9% qoq and 29.5% yoy and market shares increased to 28% (vs. 26% FY09). The 4QFY03/10 EI of RM53m was mainly due to a combination of R&D grant (RM99m), R&D
expenditure written off (RM118m), inventory write-down (RM59m), allowance for doubtful debt (RM22m) and reversal of provision for impairment of PPE (RM47m).
Proton Holdings Berhad : Standing Strong-27/05/2010
expenditure written off (RM118m), inventory write-down (RM59m), allowance for doubtful debt (RM22m) and reversal of provision for impairment of PPE (RM47m).
Proton Holdings Berhad : Standing Strong-27/05/2010
Puncak Niaga Holdings Berhad :1QFY12/10 Net Profit Declines On Higher Expenses - 27/05/2010
In line with our forecast, but below market expectations. 1QFY12/10 reported net profit of RM38.3m, which accounted for 30% of our full-year forecast. However, we consider the results within our expectation as Puncak’s operating costs were traditionally lower in 1Q. As against the market expectations, the results came in below, at only 23% of the full-year market consensus.
Puncak Niaga Holdings Berhad :1QFY12/10 Net Profit Declines On Higher Expenses-27/05/2010
Puncak Niaga Holdings Berhad :1QFY12/10 Net Profit Declines On Higher Expenses-27/05/2010
Mah Sing Group Berhad : 1QFY12/10 Net Profit Grows 23% YoY - 27/05/2010
In line. 1QFY12/10 net profit came in within expectations at 25-26% of our full-year forecast and the full-year market consensus. 1QFY12/10 net profit grew +23.2% yoy driven by progress billings from Southgate (commercial project with GDV of RM458m) as well as landed property projects such as Hijauan Residence (GDV of RM315m), Kemuning Residence (RM136m) and Aman Perdana (RM858m) in Klang Valley,
Residence @ Southbay (RM234m) in Penang island as well as Sierra Perdana (RM526m) and Sri Pulai Perdana 2 (RM225m) in Johor Bahru. For 1QFY12/10, the company chalked up impressive sales of RM600.9m (vs. RM170.2m in 1Q09 and RM727m in FY09), already accounting for 59.6% of its FY10 sales target of RM1bn. Meanwhile, the company’s unbilled sales stood at RM1.1bn as at end-1QFY12/10, or 1.6x of our FY12/10 property
revenue forecast.
Mah Sing Group Berhad : 1QFY12/10 Net Profit Grows 23% YoY - 27/05/2010
Residence @ Southbay (RM234m) in Penang island as well as Sierra Perdana (RM526m) and Sri Pulai Perdana 2 (RM225m) in Johor Bahru. For 1QFY12/10, the company chalked up impressive sales of RM600.9m (vs. RM170.2m in 1Q09 and RM727m in FY09), already accounting for 59.6% of its FY10 sales target of RM1bn. Meanwhile, the company’s unbilled sales stood at RM1.1bn as at end-1QFY12/10, or 1.6x of our FY12/10 property
revenue forecast.
Mah Sing Group Berhad : 1QFY12/10 Net Profit Grows 23% YoY - 27/05/2010
Media Chinese Int’l Berhad : FY10 Core Net Profit Surged 95.6% YoY - 27/05/2010
Above expectations. MCIL’s 4QFY03/10 net profit of RM35.4m (-34.0% qoq) beat our and consensus expectations, with full-year net profit of RM134.5m (+95.6% yoy) accounting for 108.6% of our and 109.3% of consensus full-year estimates. Key variances were:
1) stronger-thanexpected margins, where MCIL achieved a full-year EBIT margin of 14.6% vs. our projection of 12.6%. We believe this could be due to ongoing costcontrol measures as well as lower-than-expected newsprint prices; and
2) a lower-than-expected 4Q effective tax rate of 17.7%, resulting in FY10 effective tax rate of 25% (vs. our assumption of 28%). We believe this reflects the turnaround by its operating subsidiaries.
Media Chinese Int’l Berhad : FY10 Core Net Profit Surged 95.6% YoY - 27/05/2010
1) stronger-thanexpected margins, where MCIL achieved a full-year EBIT margin of 14.6% vs. our projection of 12.6%. We believe this could be due to ongoing costcontrol measures as well as lower-than-expected newsprint prices; and
2) a lower-than-expected 4Q effective tax rate of 17.7%, resulting in FY10 effective tax rate of 25% (vs. our assumption of 28%). We believe this reflects the turnaround by its operating subsidiaries.
Media Chinese Int’l Berhad : FY10 Core Net Profit Surged 95.6% YoY - 27/05/2010
Lafarge (M) Cement Berhad : 1Q FY12/10 Performance Declines 47% On Weak - 27/05/2010
Below expectations. 1QFY12/10 reported core net profit of RM48.1m came in below expectations, which accounted for only 10.1-11.2% of our full-year forecast and the full-year market consensus. We believe the variance against our forecast came largely from:
(1) Lower-than-expected cement selling prices; and
(2) Higher-than-expected operating expenses.
Lafarge (M) Cement Berhad : 1Q FY12/10 Performance Declines 47% On Weak - 27/05/2010
(1) Lower-than-expected cement selling prices; and
(2) Higher-than-expected operating expenses.
Lafarge (M) Cement Berhad : 1Q FY12/10 Performance Declines 47% On Weak - 27/05/2010
Kuala Lumpur Kepong Berhad : Good Set Of Numbers - Our Favourite For Sector -27/05/2010
In line, good set of numbers. KLK’s 1HFY09/10 core net profit was within expectations, comprising between 44-46% of our and consensus full year FY10 core net profit forecasts. KLK recorded approximately RM32.5m in EI gains in 1HFY10 from writeback of provision in diminution in value for Yule Catto (2QFY10: RM13.2m). KLK declared a 15 sen interim single tier dividend.
Kuala Lumpur Kepong Berhad : Good Set Of Numbers - Our Favourite For Sector -27/05/2010
Kuala Lumpur Kepong Berhad : Good Set Of Numbers - Our Favourite For Sector -27/05/2010
Allianz Malaysia Berhad : 1QFY12/10 Results Within Expectations - 27/05/2010
Within expectations. Allianz recorded 1QFY12/10 net profit of RM23.2m, an increase of RM2.93m or 14.5% yoy. Revenue increased by 28.2% yoy, underpinned by growth in both life and general insurance gross premiums. 1Q net profit came in at 21% of our full year earnings estimate and 25.5% of consensus estimate, which we consider to be in line with expectations.
Allianz Malaysia Berhad : 1QFY12/10 Results Within Expectations-27/05/2010
Allianz Malaysia Berhad : 1QFY12/10 Results Within Expectations-27/05/2010
IJM Plantations Berhad : No Surprise, No Excitement - 27/05/2010
In line. IJMP’s FY03/10 core net profit was in line with our and consensus estimates, making up 99-102% of our and consensus FY03/10 projections. IJMP recorded an EI loss of RM7.7m in 4QFY03/10, relating to impairment losses for its JV investments. Although no details were disclosed, we believe this could be relating to IJMP’s 60% stake in its biodiesel plant, which is dormant at the moment. IJMP declared a 5 sen single tier dividend (FY09: 8 sen), which translates to net payout of 45%, or net yield of 2.1%, which was slightly higher than our projected 4 sen DPS.
IJM Plantations Berhad : No Surprise, No Excitement
IJM Plantations Berhad : No Surprise, No Excitement
IJM Land Berhad : FY03/10 Net Profit Almost Doubles From A Year Ago - 27/05/2010
Within expectations. Excluding RM10.3m disposal gains, normalised FY03/10 net profit of RM98.3m came in roughly in line with our forecast and the market consensus. Normalised FY03/10 net profit rose +92.4% underpinned by RM1.25bn sales registered in FY03/10 that exceeded its internal target of RM1bn by a whopping 25%. IJM Land has proposed an interim net dividend of 2 sen (ex-date n 28 Jul 2010) that is in line with our expectation.
IJM Land Berhad : FY03/10 Net Profit Almost Doubles From A Year Ago -27/05/2010
IJM Land Berhad : FY03/10 Net Profit Almost Doubles From A Year Ago -27/05/2010
IJM Corporation Berhad : FY03/10 EBIT Only Grows 3% - 27/05/2010
Missed consensus. Excluding RM69m forex and disposal gains, adjusted FY03/10 net profit of RM263.6m came in within our forecast but missed the market consensus by a whopping 15%.
IJM Corporation Berhad : FY03/10 EBIT Only Grows 3% - 27/05/2010
IJM Corporation Berhad : FY03/10 EBIT Only Grows 3% - 27/05/2010
Freight Management Holdings Berhad : 9MFY06/10 Net Profit Grows 20.6% - 27/05/2010
In line with expectation. 9MFY06/10 net profit of RM11.5m came in line with our expectation, at 72.8% of our full-year forecast. 9MFY06/10 net profit grew 20.6% from RM9.5m to RM11.5m mainly due to:
(1) The introduction of three new services (i.e. land freight, haulage and project cargo) since 2QFY06/09;
(2) Higher contributions at the supporting services segment; and
(3) Lower finance costs.
Freight Management Holdings Berhad : 9MFY06/10 Net Profit Grows 20.6%-27/05/2010
(1) The introduction of three new services (i.e. land freight, haulage and project cargo) since 2QFY06/09;
(2) Higher contributions at the supporting services segment; and
(3) Lower finance costs.
Freight Management Holdings Berhad : 9MFY06/10 Net Profit Grows 20.6%-27/05/2010
Genting Plantations Berhad : Improving Earnings-27/05/2010
In line. Genting Plantation’s (GP) core 1QFY10 net profit was in line with our and consensus expectations, coming in at 21-23% of our and consensus FY10 forecasts. No dividend was declared for the quarter.
Genting Plantations Berhad : Improving Earnings-27/05/2010
Genting Plantations Berhad : Improving Earnings-27/05/2010
Corporate Highlights...-27052010
♦ Malaysian Pacific Industries
Briefing Note : Stronger Growth Ahead
♦ Ta Ann Holdings
Results Preview : 1QFY10 Results Likely To Be Impacted By Higher FFB Cost
♦ Kuala Lumpur Kepong
Results Note : Good Set Of Numbers - Our Favourite For Sector
♦ IJM Corporation
Results / Briefing Note : FY03/10 EBIT Only Grows 3%
♦ IJM Plantations
Results Note : No Surprise, No Excitement
♦ IJM Land
Results Note : FY03/10 Net Profit Almost Doubles From A Year Ago
Corporate Highlights...-27/05/2010
Briefing Note : Stronger Growth Ahead
♦ Ta Ann Holdings
Results Preview : 1QFY10 Results Likely To Be Impacted By Higher FFB Cost
♦ Kuala Lumpur Kepong
Results Note : Good Set Of Numbers - Our Favourite For Sector
♦ IJM Corporation
Results / Briefing Note : FY03/10 EBIT Only Grows 3%
♦ IJM Plantations
Results Note : No Surprise, No Excitement
♦ IJM Land
Results Note : FY03/10 Net Profit Almost Doubles From A Year Ago
Corporate Highlights...-27/05/2010
RHB Equity 360° (MPI, Ta Ann, KLK, RCE, Gent Plant, IJM Land, IJM Plant, IJM Corp, Proton, Tan Chong, Mah Sing, Allianz, MCIL; Technical: UEM Land)
Top Story : MPI – Stronger Growth Ahead Outperform
Briefing Note
♦ MPI expects 4QFY06/10 revenue to register stronger qoq growth, given that 3QFY06/10 qoq growth of +2.0% which bucks the trend of a seasonally weaker quarter.
- Also, MPI expects 4QFY06/10 net profit to grow sequentially on the back of:
1) higher utilisation rate;
2) stronger contribution from MLP and high-density packages; and
3) margin expansion stemming from higher contribution of high-density packages and cost-cutting measures.
♦ We understand that overall utilisation rates have increased to 95% from 85% in 2QFY06/10. Note that utilisation rates for Ipoh, Suzhou, and Dynacraft plants currently stands at 95%, 100%, and 90% respectively (vs. 90%, 100%, and 85% in 3QFY06/10).
♦ Separately, with Ipoh and Suzhou plants currently running at full-capacity, we understand that MPI expects to raise capacity for these plants by 25% and 30% by Sep-10. Note that MPI is targeting to increase its higher-margin MLP capacity to 12m/day by end-FY10 (vs. 8m/day currently). In addition, management had stated that it will be using the spare capacity from the Advance Packages (AP) line to expand its MLP packages as well as high-density packages. Furthermore, given the capex of around RM3m for its new etch and strip plating capacity, MPI expects capacity for Dynacraft’ to increase by 20%.
♦ Maintain Outperform with a fair value of RM8.46/share.
RHB Equity 360°( MPI, Ta Ann, KLK, RCE, Gent Plant, IJM Land, IJM Plant, IJM Corp, Proton, Tan Chong,Mah Si...
Briefing Note
♦ MPI expects 4QFY06/10 revenue to register stronger qoq growth, given that 3QFY06/10 qoq growth of +2.0% which bucks the trend of a seasonally weaker quarter.
- Also, MPI expects 4QFY06/10 net profit to grow sequentially on the back of:
1) higher utilisation rate;
2) stronger contribution from MLP and high-density packages; and
3) margin expansion stemming from higher contribution of high-density packages and cost-cutting measures.
♦ We understand that overall utilisation rates have increased to 95% from 85% in 2QFY06/10. Note that utilisation rates for Ipoh, Suzhou, and Dynacraft plants currently stands at 95%, 100%, and 90% respectively (vs. 90%, 100%, and 85% in 3QFY06/10).
♦ Separately, with Ipoh and Suzhou plants currently running at full-capacity, we understand that MPI expects to raise capacity for these plants by 25% and 30% by Sep-10. Note that MPI is targeting to increase its higher-margin MLP capacity to 12m/day by end-FY10 (vs. 8m/day currently). In addition, management had stated that it will be using the spare capacity from the Advance Packages (AP) line to expand its MLP packages as well as high-density packages. Furthermore, given the capex of around RM3m for its new etch and strip plating capacity, MPI expects capacity for Dynacraft’ to increase by 20%.
♦ Maintain Outperform with a fair value of RM8.46/share.
RHB Equity 360°( MPI, Ta Ann, KLK, RCE, Gent Plant, IJM Land, IJM Plant, IJM Corp, Proton, Tan Chong,Mah Si...
Wednesday, May 26, 2010
Market Update - Shifting Trends : Seeking Shelter In Domestic Plays - 26/05/2010
Looking for the bottom. The FBM KLCI has erased all its gains and more during the first five months of 2010 since turning downwards on 13 May. We expect the market to remain volatile, with the risk on the downside towards the technical support levels of 1,229 and 1,154 as highlighted by RHBRI’s technical research. Assuming no downside to our current forecasts, we have compared against historical valuations and market data in order to find possible fundamental support levels for the benchmark FBM KLCI.
Market Update - Shifting Trends : Seeking Shelter In Domestic Plays - 26/05/2010
Market Update - Shifting Trends : Seeking Shelter In Domestic Plays - 26/05/2010
Perwaja Holdings Berhad : In Line, Expecting Weaker 2H - 26/05/2010
In line. 1QFY12/10 core net profit of RM22.7m accounted for 30.1% of our full-year forecast. However, we consider this within our expectation as we expect Perwaja’s performance to weaken in 2H on the back of weaker restocking activities in 2H arising from weaker price outlook.
Perwaja Holdings Berhad : In Line, Expecting Weaker 2H-26/05/2010
Perwaja Holdings Berhad : In Line, Expecting Weaker 2H-26/05/2010
Malaysian Pacific Industries Berhad : FY11 Earnings Growth To Be Driven By X3-MLP - 26/05/2010
In line. 9M06/10 results were in line with our but above market consensus, accounting for 74.6% and 82.7% of our full-year forecast and market consensus respectively. 3Q06/10 reported turnover of RM353.7m (+2.0% qoq, 75.7% yoy) was mainly due to higher MLP sales stemming from stronger-than-expected demand from the automotive segment and consumer electronics.
Malaysian Pacific Industries Berhad : FY11 Earnings Growth To Be Driven By X3-MLP-26/05/2010
Malaysian Pacific Industries Berhad : FY11 Earnings Growth To Be Driven By X3-MLP-26/05/2010
Sunway Holdings Berhad : 1QFY12/10 Net Profit More Than Doubles From A Year Ago - 26/05/2010
No issue. Excluding RM4.6m gains on derivatives, adjusted 1QFY12/10 net profit of RM35.3m came in within our expectation at 27% of our full-year forecast but beat the market at 29% of the full-year market consensus.
Sunway Holdings Berhad : 1QFY12/10 Net Profit More Than Doubles From A Year Ago -26/05/2010
Sunway Holdings Berhad : 1QFY12/10 Net Profit More Than Doubles From A Year Ago -26/05/2010
Corporate Highlights...-26/05/2010
♦ Shifting Trends
Market update : Seeking Shelter In Domestic Plays
♦ Consumer Sector - Tobacco
Sector Update : Industry Changes From AFTA-Cept
♦ Building Materials
Sector Update : Steel Sub-sector Running Out of Steam
♦ Perwaja Holdings
Results Note : In Line, Expecting Weaker 2H
♦ Kinsteel
Results Note : In Line; Anticipating Weaker 2H
♦ Malaysian Pacific Industries
Results Note : FY11 Earnings Growth To Be Driven By X3-MLP
Corporate Highlights...-25/05/2010
Market update : Seeking Shelter In Domestic Plays
♦ Consumer Sector - Tobacco
Sector Update : Industry Changes From AFTA-Cept
♦ Building Materials
Sector Update : Steel Sub-sector Running Out of Steam
♦ Perwaja Holdings
Results Note : In Line, Expecting Weaker 2H
♦ Kinsteel
Results Note : In Line; Anticipating Weaker 2H
♦ Malaysian Pacific Industries
Results Note : FY11 Earnings Growth To Be Driven By X3-MLP
Corporate Highlights...-25/05/2010
KFC Holding (M) Berhad :Resilience From Quick Service Restaurant Business - 26/05/2010
In line. KFCH’s 1QFY12/10 net profit of RM34.2m was in line with our and consensus forecasts, accounting for 22.9% and 24.1% of our and consensus full year estimates respectively. As expected, no dividend was declared during the quarter.
KFC Holding (M) Berhad :Resilience From Quick Service Restaurant Business - 26/05/2010
KFC Holding (M) Berhad :Resilience From Quick Service Restaurant Business - 26/05/2010
Hock Seng Lee Berhad : 1QFY12/10 Net Profit Grows By 30% YoY - 26/05/2010
No issue. 1QFY12/10 net profit came in at 18-19% of our full-year forecast and the full-year market consensus. However, we consider the results within expectations as we expect stronger quarters ahead as construction activities gather momentum.
Hock Seng Lee Berhad : 1QFY12/10 Net Profit Grows By 30% YoY- 26/05/2010
Hock Seng Lee Berhad : 1QFY12/10 Net Profit Grows By 30% YoY- 26/05/2010
KNM Group Berhad : Not Out Of The Woods Yet - 24/05/2010
Below expectations. Stripping out the tax incentive arising from the purchase of Borsig of around RM40m, 1QFY12/10 core net profit of RM0.3m came in below expectations. The variance was largely due to: 1) lower-than-expected demand from China, Europe and Middle East; and 2) lower utilisation rates. Note that 1QFY12/10 average utilisation rate declined to 45% (vs. 55% in 4QFY12/09 and 70% in 1QFY12/09). Nevertheless, the company reported 1QFY12/10 operating profit of RM11.3m (vs. operating loss of RM61.9m in 4QFY12/09) mainly due to lower operating expenses stemming from tight cost-control measures.
KNM Group Berhad : Not Out Of The Woods Yet- 24/05/2010
KNM Group Berhad : Not Out Of The Woods Yet- 24/05/2010