Today’s Highlight - Japan’s Economy Showing Signs Of Weakness But Will Likely Continue To Expand
Japan’s industrial production fell by 0.1% mom in May, compared with +1.3% in April. This was the first decline in three months, a sign that the country’s economic recovery may slow, as industrial activities have turned weaker on the back of a m-o-m decline in exports during the month. As a result, companies accumulated stockpiles at the fastest pace in more than five years during the month, the Trade Ministry said. Still, companies indicated that they plan to increase production by 0.4% in June and +1.0% in July, indicating that industrial activities will likely remain resilient in the near term. The decline in May’s industrial production was due to a drop in the production of transport equipment and aslowdown in the production of fabricated metals and general machinery. Some blamed it on recall problems at Japanese auto makers and recent strikes at factories in China. These were, however, mitigated by a pick-up in the production of electrical machinery, information electronics and electronic parts & devices. Yoy, industrial production slowed down to 20.2% in May, from +25.9% in April and a high of +31.8% in March. This was the second straight month of easing, suggesting that industrial activities are losing momentum.
The World Economy...- 30/6/2010
Wednesday, June 30, 2010
Corporate Highlights - 30/6/2010
♦ Plantation
Sector Update : No Positive Catalysts Ahead, More Cautious Short-Term Outlook
♦ Dialog Group
Visit Note : Focus On Domestic Drivers
♦ Glomac
Results Note : FY04/10 Net Profit Grows 27%
Corporate Highlights - 30/6/2010
Sector Update : No Positive Catalysts Ahead, More Cautious Short-Term Outlook
♦ Dialog Group
Visit Note : Focus On Domestic Drivers
♦ Glomac
Results Note : FY04/10 Net Profit Grows 27%
Corporate Highlights - 30/6/2010
Market Technical Reading - Trading Sentiment To Stay Bearish... - 30/6/2010
Local Market Leads:
The local bourse, in line with the regional market slump, fell on afternoon selldown in China’s SHComp (-4.3%) and HSI (-2.3%) after the Confidence Board in China said its Leading Economic Indicator rose 0.3% in Apr, less than the initial 1.7% gain reported on 15 Jun earlier.
Market Technical Reading - Trading Sentiment To Stay Bearish... - 30/6/2010
The local bourse, in line with the regional market slump, fell on afternoon selldown in China’s SHComp (-4.3%) and HSI (-2.3%) after the Confidence Board in China said its Leading Economic Indicator rose 0.3% in Apr, less than the initial 1.7% gain reported on 15 Jun earlier.
Market Technical Reading - Trading Sentiment To Stay Bearish... - 30/6/2010
VS Industry Berhad : Improving Outlook - 30/6/2010
Within expectations. VSI’s 3QFY07/10 net profit of RM6.5m (vs. a net loss of RM4.2m in 3Q09) brought 9MFY10 net profit to RM15.0m (+127.4% yoy), accounting for 66% of our full-year estimate. We consider this to be in line with our numbers on expectations that 4Q would remain strong as demand continues to improve. As expected, no dividend was declared during the quarter.
VS Industry Berhad : Improving Outlook - 30/6/2010
VS Industry Berhad : Improving Outlook - 30/6/2010
Glomac Berhad : FY04/10 Net Profit Grows 27% - 30/6/2010
Above expectations. FY04/10 net profit beat our forecast and the market consensus by 10-11%. We believe the variance against our forecast came largely from better margins as input costs eased. There were a few exceptional items comprising RM9.2m fair value gains that were roughly offset by RM1.9m provision for losses from investment in CLO sub-bonds and RM7m provision for expected losses from provision of low-cost housing in FY04/11-12.
Glomac Berhad : FY04/10 Net Profit Grows 27% - 30/6/2010
Glomac Berhad : FY04/10 Net Profit Grows 27% - 30/6/2010
Dialog Group Berhad : Focus On Domestic Drivers - 30/6/2010
Focus on Malaysia. Petronas’ plan to focus on the local oil & gas supply and processing infrastructure is clearly positive for support services players
here, although we note that both upstream and downstream projects will likely occur over the next 3-5 years. In our view, Dialog is well-positioned to benefit from this capex.
Dialog Group Berhad : Focus On Domestic Drivers - 30/6/2010
here, although we note that both upstream and downstream projects will likely occur over the next 3-5 years. In our view, Dialog is well-positioned to benefit from this capex.
Dialog Group Berhad : Focus On Domestic Drivers - 30/6/2010
Plantation - No Positive Catalysts Ahead, More Cautious Short-Term Outlook - 30/6/2010
Downgrading sector, no short-term positive catalysts. We are downgrading our recommendation on the plantation sector to Neutral (from overweight) on the back of four main factors:
(1) onset of the peak palm oil production season which will dampen CPO prices in the near term;
(2) reduced possibility of an El Niño impact, although talk of La Niña has now started;
(3) potential impact of exchange rate movements and reduction in crude oil price forecasts; and
(4) valuations are no longer as attractive after rolling forward to CY11.
We believe there are not many positive catalysts which would move CPO prices up in the near term, and therefore expect plantation share prices to remain lacklustre until this changes.
Plantation - No Positive Catalysts Ahead, More Cautious Short-Term Outlook - 30/6/2010
(1) onset of the peak palm oil production season which will dampen CPO prices in the near term;
(2) reduced possibility of an El Niño impact, although talk of La Niña has now started;
(3) potential impact of exchange rate movements and reduction in crude oil price forecasts; and
(4) valuations are no longer as attractive after rolling forward to CY11.
We believe there are not many positive catalysts which would move CPO prices up in the near term, and therefore expect plantation share prices to remain lacklustre until this changes.
Plantation - No Positive Catalysts Ahead, More Cautious Short-Term Outlook - 30/6/2010
RHB Equity 360° - 30 June 2010 (Plantation, Dialog, Glomac, VS Industry; Technical: IRC)
Top Story : Plantations – No positive catalysts ahead Neutral (down from OW)
Sector Update
- We are downgrading our call on the plantation sector to Neutral (from overweight). We believe there are not many positive catalysts which would move CPO prices up in the near term, and therefore expect plantation share prices to remain lacklustre. Despite our now more cautious outlook for the sector for the short term, we maintain our CPO price forecasts of an average of RM2,500/tonne for 2010, RM2,700 for 2011 and RM2,500 for 2012.
- We are rolling forward our valuation targets to CY11 (from CY10). We believe earnings growth for the planters in the medium term are no longer exciting, while big premium valuations are no longer justified.
- For the Malaysian planters, we note that the premium valuations over their Singapore and Indonesia peers are back to excessive levels of 35-45%, versus the traditional 20-30% premium. For the big-caps like Sime Darby, IOIC and KLK, we now assign a target CY11 PE of 16x (from 18x CY10) for plantation earnings.
- For the mid-caps like Genting Plantations and IJMP, we now assign a target PE of 14.5x CY11 (from 16.5xCY10) and for small-caps like CBIP, we now assign a target PE of 12x CY11 (from 14x CY10). We also reduce our target PE for First Resources to 10x CY11 (from 11.5x CY11), which is based on an unchanged 30% discount to our revised target PER for the Malaysian mid-cap planters.
- No change to our Outperform calls on IOIC, KLK, First Resources and CBIP and our Underperform calls on Sime Darby, Genting Plantations and IJMP.
RHB Equity 360° - 30 June 2010 (Plantation, Dialog, Glomac, VS Industry; Technical: IRC)
Sector Update
- We are downgrading our call on the plantation sector to Neutral (from overweight). We believe there are not many positive catalysts which would move CPO prices up in the near term, and therefore expect plantation share prices to remain lacklustre. Despite our now more cautious outlook for the sector for the short term, we maintain our CPO price forecasts of an average of RM2,500/tonne for 2010, RM2,700 for 2011 and RM2,500 for 2012.
- We are rolling forward our valuation targets to CY11 (from CY10). We believe earnings growth for the planters in the medium term are no longer exciting, while big premium valuations are no longer justified.
- For the Malaysian planters, we note that the premium valuations over their Singapore and Indonesia peers are back to excessive levels of 35-45%, versus the traditional 20-30% premium. For the big-caps like Sime Darby, IOIC and KLK, we now assign a target CY11 PE of 16x (from 18x CY10) for plantation earnings.
- For the mid-caps like Genting Plantations and IJMP, we now assign a target PE of 14.5x CY11 (from 16.5xCY10) and for small-caps like CBIP, we now assign a target PE of 12x CY11 (from 14x CY10). We also reduce our target PE for First Resources to 10x CY11 (from 11.5x CY11), which is based on an unchanged 30% discount to our revised target PER for the Malaysian mid-cap planters.
- No change to our Outperform calls on IOIC, KLK, First Resources and CBIP and our Underperform calls on Sime Darby, Genting Plantations and IJMP.
RHB Equity 360° - 30 June 2010 (Plantation, Dialog, Glomac, VS Industry; Technical: IRC)
Tuesday, June 29, 2010
Corporate Highlights - 29/6/2010
♦ Banking
Sector Update : Valuations Still Decent With Potential For Earnings To Surprise
♦ Sunway Holdings
News Update : Secures A RM129m Contract To Build A Dairy Factory In Klang
Corporate Highlights - 29/6/2010
Sector Update : Valuations Still Decent With Potential For Earnings To Surprise
♦ Sunway Holdings
News Update : Secures A RM129m Contract To Build A Dairy Factory In Klang
Corporate Highlights - 29/6/2010
Berjaya Sports Toto Bhd : Of Sports Betting And More - 29/6/2010
BCorp explains on sports betting... Berjaya Corp held an analyst briefing to explain in more detail the circumstances surrounding the abortion of the sports betting deal. Tan Sri Dato’ Seri Vincent Tan Chee Yioun (TSVT), who chaired the meeting, continued to stress that the Government had backtracked on its decision to issue the licence despite having granted its approval for the reissuance. This appeared to be backed up by a letter issued by the Ministry of Finance dated 13 Jan 2010. Besides this letter, the original letter from the MOF dated 5 June 1990 which stated that Ascot Sports would have the first right of refusal should the Government change its mind about legalising sports betting in the country again was also sighted.
Berjaya Sports Toto Bhd : Of Sports Betting And More - 29/6/2010
Berjaya Sports Toto Bhd : Of Sports Betting And More - 29/6/2010
Market Technical Reading - Negative-Biased View Remains... - 29/6/2010
Local Market Leads:
♦ Share prices in Bursa Malaysia traded almost flat on a quiet Monday, as the absence of trading leads forced investors to stay further at bay.
♦ The benchmark FBM KLCI lost a marginal 0.91 pt or 0.07% to 1,325.54 with razor thin trading volume. The index traded in the negative territory throughout the day.
Market Technical Reading - Negative-Biased View Remains... - 29/6/2010
♦ Share prices in Bursa Malaysia traded almost flat on a quiet Monday, as the absence of trading leads forced investors to stay further at bay.
♦ The benchmark FBM KLCI lost a marginal 0.91 pt or 0.07% to 1,325.54 with razor thin trading volume. The index traded in the negative territory throughout the day.
Market Technical Reading - Negative-Biased View Remains... - 29/6/2010
Kencana Petroleum Bhd : A Disappointing Quarter - 29/6/2010
Below expectations. 9MFY07/10 core net profit of RM94.3m (+7.2% yoy) was below our expectations, accounting for 55.8% and 67.3% of our and consensus full-year estimates respectively. We note that 3Q revenue was up 12.4% qoq and reflects the strong orders in hand, while gross margins were sustained at 20% vs. 2QFY10 of 22% also reflecting a relatively robust flow of jobs. However, pre-tax profits were dragged down by higher operating expenses. And while we still expect the 4Q to be stronger, we believe our revenue assumptions for FY10-12 are now overly optimistic.
Kencana Petroleum Bhd : A Disappointing Quarter - 29/6/2010
Kencana Petroleum Bhd : A Disappointing Quarter - 29/6/2010
Sunway Holdings Bhd : Secures A RM129m Contract To Build A Dairy Factory In Klang - 29/6/2010
Another contract. Sunway has secured a RM129m contract from private company PML Dairies Sdn Bhd for the construction of a dairy product factory in Klang, Selangor. The contract has boosted Sunway’s YTD new contracts secured to RM537m (see Table 2) and its outstanding construction orderbook by 6% to RM2.4bn (see Table 3). Assuming an EBIT margin of 5-7%, the contract will fetch a total EBIT of RM6.5-9.0m over the construction period of 12 months ending Jul 2011. We are positive on the development.
Sunway Holdings Bhd : Secures A RM129m Contract To Build A Dairy Factory In Klang - 29/6/2010
Sunway Holdings Bhd : Secures A RM129m Contract To Build A Dairy Factory In Klang - 29/6/2010
Hai-O Enterprise Bhd : Short-term Pain For A Longer-Term Sustainable Gain - 29/6/2010
Stringent ruling, affecting MLM division. Hai-O has recently complied with a more stringent Direct Selling Act (DSA), which took effect in Apr 10. Coupled with an increasing interest rate environment, management expects this to lead to a slowdown in its membership recruitment drive in the next 3-6 months. The amended DSA requires greater transparency from MLM members and involves additional protocols to comply with, which led to a temporary disruption in the operations of the existing MLM members. This is expected to resume to normal in 6 months. Management does not discount the possibility of members dropping out of the company as a result of the changes, and highlighted that total MLM members may even drop on a yoy basis. We currently project net membership to be 0/mth in FY11 (total FY10 members: 140,000) and net membership growth of 1,000/mth in FY12.
Hai-O Enterprise Bhd : Short-term Pain For A Longer-Term Sustainable Gain - 29/6/2010
Hai-O Enterprise Bhd : Short-term Pain For A Longer-Term Sustainable Gain - 29/6/2010
AEON Co Bhd: Acquisition Of Land in Kinta, Perak For RM27.1m - 29/6/2010
5 pieces of land acquired for RM27.1m. AEON has entered into S&P agreements with Seroja Mulia SB, Antero Harapan SB and Kemboja Iringan SB for the purchase of approximately 17.3 acres of land, consisting of 3 pieces of leasehold lands and 2 pieces of state lands, located in Kinta, Perak (RM36psf) for cash consideration of RM27.1m. Following the completion of the acquisitions, AEON will be required to surrender the lands to the relevant authorities for the amalgamation / surrender and realienation of the lands into one piece of land, for the issuance of a separate document of title for AEON to construct a shopping mall. The purchase consideration will be financed through the group’s internally-generated funds.
AEON Co Bhd: Acquisition Of Land in Kinta, Perak For RM27.1m - 29/6/2010
AEON Co Bhd: Acquisition Of Land in Kinta, Perak For RM27.1m - 29/6/2010
Banking - Valuations Still Decent With Potential For Earnings To Surprise - 29/6/2010
Banking sector the best proxy to the economic recovery. In our view, the banking sector represents the best proxy to the economic recovery and we continue to believe that the sector can help take the lead in lifting the market to higher grounds. We expect this to be underpinned by factors such as: 1) earnings growth gaining momentum; 2) valuations remain decent relative to the market and historical levels; and 3) relatively low foreign shareholding levels.
Banking - Valuations Still Decent With Potential For Earnings To Surprise - 29/6/2010
Banking - Valuations Still Decent With Potential For Earnings To Surprise - 29/6/2010
RHB Equity 360° - 29 June 2010 (Banks, B-Toto, Hai-O, AEON, Sunway, Kencana; Technical: Time Eng)
Top Story : Banks – Valuations still decent with potential for earnings to surprise - Overweight
Sector Update
- In our view, the banking sector represents the best proxy to the economic recovery. We believe the sector can help lift the market to higher grounds, underpinned by factors such as: 1) earnings growth gaining momentum; 2) valuations remain decent relative to the market and historical levels; and 3) relatively low
foreign shareholding levels.
- Looking ahead to 2H2010, we expect the sector’s earnings growth momentum to pick up steam. We also do not discount the possibility of earnings surprises ahead and believe the areas that could surprise on the upside include: 1) interest income; 2) non-interest income; and 3) impairment allowances.
- Valuation-wise, we find that the sector is still compelling with the sector weighted average FY11 PER of 12.3x as compared to the FBM KLCI’s 2011 PER of 13.8x. More importantly, the historical trading bands of the banks suggest that there is still room for valuations to expand.
- Finally, although foreign shareholding of most banks are now off their lows, the levels are still well below peaks as well as below levels at the time of the entry of strategic partners.
- Competition, we think, will remain intense. In addition, BNM had also recently announced that five new commercial banking licences will be issued. While we believe that increasing competition would put pressure on margins and overheads (e.g. staff cost), domestic banks would still be able to hold their ground and maintain their market share at around the current level.
- We maintain our Overweight rating on the sector. Maybank remains as our top pick for the sector.
RHB Equity 360° - 29 June 2010 (Banks, B-Toto, Hai-O, AEON, Sunway, Kencana; Technical: Time Eng)
Sector Update
- In our view, the banking sector represents the best proxy to the economic recovery. We believe the sector can help lift the market to higher grounds, underpinned by factors such as: 1) earnings growth gaining momentum; 2) valuations remain decent relative to the market and historical levels; and 3) relatively low
foreign shareholding levels.
- Looking ahead to 2H2010, we expect the sector’s earnings growth momentum to pick up steam. We also do not discount the possibility of earnings surprises ahead and believe the areas that could surprise on the upside include: 1) interest income; 2) non-interest income; and 3) impairment allowances.
- Valuation-wise, we find that the sector is still compelling with the sector weighted average FY11 PER of 12.3x as compared to the FBM KLCI’s 2011 PER of 13.8x. More importantly, the historical trading bands of the banks suggest that there is still room for valuations to expand.
- Finally, although foreign shareholding of most banks are now off their lows, the levels are still well below peaks as well as below levels at the time of the entry of strategic partners.
- Competition, we think, will remain intense. In addition, BNM had also recently announced that five new commercial banking licences will be issued. While we believe that increasing competition would put pressure on margins and overheads (e.g. staff cost), domestic banks would still be able to hold their ground and maintain their market share at around the current level.
- We maintain our Overweight rating on the sector. Maybank remains as our top pick for the sector.
RHB Equity 360° - 29 June 2010 (Banks, B-Toto, Hai-O, AEON, Sunway, Kencana; Technical: Time Eng)
Monday, June 28, 2010
Genting Malaysia Berhad : Further Upside Will Confirm The Upswing... 28/06/2010
GenM traded sideways at between RM2.68 and RM2.96 since last May. The share price of GenM surpassed the tough resistance level of RM2.68 in May 2009, but lost the level in a quick profit-taking dip in Jun. The stock recovered to above RM2.68 in Jul 2009, and headed to a high of RM3.02, before a swift pullback occurred. Since then, it has been trending sideways at between RM2.68 and RM2.96. In May 2010, the stock breached to below RM2.68 to a low of RM2.51, but once again, it rebounded to above the level in Jun 2010. It closed last Friday at RM2.78 with a positive candle.
Genting Malaysia Berhad : Further Upside Will Confirm The Upswing... 28/06/2010
Genting Malaysia Berhad : Further Upside Will Confirm The Upswing... 28/06/2010
Corporate Highlights...-28/06/2010
Telecommunications
Sector Update : Non-Voice Revenue The Key Driver;
Upside Potential To Dividends Too
Insurance
Sector Update : Strong Growth Drivers For The Life Insurance Business
Gamuda
Company Update : A “Tactical” Construction Play In A News
Flow Driven Market
MISC
News Update : Buying Four Suezmax Petroleum Tankers For RM880m
Berjaya Sports Toto : BCorp Aborts Sports Betting Deal
Hai-O Enterprise
Results Note : MLM Division Slows Down
Corporate Highlights...-28/06/2010
Sector Update : Non-Voice Revenue The Key Driver;
Upside Potential To Dividends Too
Insurance
Sector Update : Strong Growth Drivers For The Life Insurance Business
Gamuda
Company Update : A “Tactical” Construction Play In A News
Flow Driven Market
MISC
News Update : Buying Four Suezmax Petroleum Tankers For RM880m
Berjaya Sports Toto : BCorp Aborts Sports Betting Deal
Hai-O Enterprise
Results Note : MLM Division Slows Down
Corporate Highlights...-28/06/2010
Hai-O Enterprise Berhad : MLM Division Slows Down - 28/06/2010
In line. Hai-O’s FY04/10 core net profit of RM70.3m (+34.4% yoy) was in line with our but below consensus expectations, accounting for 96% and 92% of our and consensus full year forecasts respectively. In 4Q10, Hai-O proposed a final dividend of 10 sen (less 25% tax) and a single tier dividend of 4.5 sen, bringing FY10 gross dividend to 21.7 sen, which was below our expectations of 24.2 sen. This translates to a net payout of only 46.6%, below the company’s guidance of 50%.
Hai-O Enterprise Berhad : MLM Division Slows Down - 28/06/2010
Hai-O Enterprise Berhad : MLM Division Slows Down - 28/06/2010
Gamuda Berhad : A “Tactical” Construction Play In A News Flow Driven Market - 28/06/2010
Upgrade to Trading Buy. We are upgrading Gamuda to Trading Buy from Underperform as we foresee strong performance in its share price in 2H2010, buoyed by news flow, primarily, from the RM3.6bn KL mass rapid transit (MRT) project.
Gamuda Berhad : A “Tactical” Construction Play In A News Flow Driven Market - 28/06/2010
Gamuda Berhad : A “Tactical” Construction Play In A News Flow Driven Market - 28/06/2010
Commodities & Currencies : Potential Weakness On Commodities This Week… - 28/06/2010
The US Light Sweet Crude Oil futures continued its winning streak last week, registered its third weekly gain in a row to close at US$78.62 on Friday.
Commodities & Currencies : Potential Weakness On Commodities This Week… - 28/06/2010
Commodities & Currencies : Potential Weakness On Commodities This Week… - 28/06/2010
Berjaya Sports Toto Berhad : BCorp Aborts Sports Betting Deal - 28/06/2010
Berjaya Corp aborts sports betting deal. In a press statement, Berjaya Corp has aborted its plan to acquire a 70% equity stake in Ascot Sports S/B (Ascot) for RM525m from Tan Sri Dato’ Seri Vincent Tan Chee Yioun (TSVT). In the statement, BCorp. stressed that the Government had backtracked on its decision to issue the licence despite having granted its approval for the reissuance. This statement comes after confirmation from the Government that it will not issue any sports betting licence to Ascot Sports.
Berjaya Sports Toto Berhad : BCorp Aborts Sports Betting Deal - 28/06/2010
Berjaya Sports Toto Berhad : BCorp Aborts Sports Betting Deal - 28/06/2010
Market Technical Reading : Lukewarm Trading Sentiment To Prevail... - 28/06/2010
Local Market Leads:
♦ Share prices in Bursa Malaysia closed marginally positive despite poor regional market performance on Friday following an overnight fall in Wall Street.
♦ The benchmark FBM KLCI inched up 0.58 pts or 0.04% to 1,326.45 on Friday. However, discounting the last minute push-up on selective core heavyweights, the index was wondering aimlessly throughout the day in the negative territory.
♦ With the absence of interesting trading leads, investors preferred to stay sideline ahead of the weekend.
♦ On the regional markets, Nikkei 225 fell 1.92% and HSI lost 0.21%, while neighbouring FTSTI ended similarly with Bursa Malaysia, with a marginal gain of 0.04%.
♦ Overall turnover tumbled again to 568m shares from Thursday's 749m shares. Market breadth stayed negative with 370 losers against 251 gainers.
Market Technical Reading : Lukewarm Trading Sentiment To Prevail... - 28/06/2010
♦ Share prices in Bursa Malaysia closed marginally positive despite poor regional market performance on Friday following an overnight fall in Wall Street.
♦ The benchmark FBM KLCI inched up 0.58 pts or 0.04% to 1,326.45 on Friday. However, discounting the last minute push-up on selective core heavyweights, the index was wondering aimlessly throughout the day in the negative territory.
♦ With the absence of interesting trading leads, investors preferred to stay sideline ahead of the weekend.
♦ On the regional markets, Nikkei 225 fell 1.92% and HSI lost 0.21%, while neighbouring FTSTI ended similarly with Bursa Malaysia, with a marginal gain of 0.04%.
♦ Overall turnover tumbled again to 568m shares from Thursday's 749m shares. Market breadth stayed negative with 370 losers against 251 gainers.
Market Technical Reading : Lukewarm Trading Sentiment To Prevail... - 28/06/2010
MISC Berhad : Buying Four Suezmax Petroleum Tankers For RM880m -28/06/2010
Four new Suezmax. MISC has placed an order for four new 158,500-dwt Suezmax petroleum tankers with Samsung Heavy Industries Co Ltd for US$271.2m (RM880m) or US$67.8m (RM220m) each, to be delivered in Apr-Oct 2012. These will be the first Suezmax-class petroleum tankers owned by MISC, complementing its existing fleet comprising Aframax tankers and Very Large Crude Carriers (VLCC). MISC said that the new Suezmax petroleum tankers will enable it “to deliver a more comprehensive global oil transportation services to its customers”.
MISC Berhad : Buying Four Suezmax Petroleum Tankers For RM880m -28/06/2010
MISC Berhad : Buying Four Suezmax Petroleum Tankers For RM880m -28/06/2010
Insurance : Strong Growth Drivers For The Life Insurance Business - 28/06/2010
Life insurance industry in Malaysia at a glance. As of FY09, there are 16 life insurance companies operating in Malaysia, including the composite insurers, with a total 11.9m policies and annual premiums of RM17.4bn. The major players in Malaysia for life insurance based on total assets are Great Eastern Life, AIA, ING and Prudential.
Insurance : Strong Growth Drivers For The Life Insurance Business - 28/06/2010
Insurance : Strong Growth Drivers For The Life Insurance Business - 28/06/2010
Telecommunications : Non-Voice Revenue The Key Driver; Upside Potential To Dividends Too - 28/06/2010
Voice revenue growth slowing, but data revenue growing. Looking forward, we expect voice revenue growth to continue to decline, as voice minutes are increasingly becoming commoditised and tariffs would continue to be under pressure. However, we see strong growth ahead for the nonvoice services.
Telecommunications : Non-Voice Revenue The Key Driver; Upside Potential To Dividends Too - 28/06/2010
Telecommunications : Non-Voice Revenue The Key Driver; Upside Potential To Dividends Too - 28/06/2010
RHB Equity 360° (Telecom, Insurance, Gamuda, B-Toto, MISC, Hai-O; Technical: Berjaya Corp, Genting Msia) - 28/06/2010
Top Story : Telecom – Non-voice revenue the key driver; upside potential to dividends too Overweight
Sector Update:
- Looking forward, we expect voice revenue growth to continue to decline, as voice minutes are increasingly becoming commoditised and tariffs would continue to be under pressure. However, we see strong growth ahead for the non-voice services.
- We expect EBITDA margins to remain stable mainly due to: 1) mid-to-high single digit revenue growth; 2) greater economies of scale; 3) players’ ongoing cost management initiatives; and 4) the shift in players’ focus towards the provision of non-voice services, in particular, the wireless broadband and data valueadded
services, which would help mitigate pricing pressures and higher subscriber/retention costs.
- We are keeping our view that with the exception of Axiata, the telcos will continue to offer generous dividend yields to investors on the back of: 1) stable EBITDA margins; 2) capex spending likely to trend down further; and 3) clean balance sheets. On top of regular dividends, we believe there is a strong chance that the telcos would supplement these further with specials.
- The current Mandatory Standard on Access Pricing is expiring on 30 Jun 2010 and we believe the review may see the gap between mobile and fixed termination rates narrow further.
RHB Equity 360°( Telecom, Insurance, Gamuda, B-Toto, MISC, Hai-O; Technical: Berjaya Corp, Genting Msia) - ...
Sector Update:
- Looking forward, we expect voice revenue growth to continue to decline, as voice minutes are increasingly becoming commoditised and tariffs would continue to be under pressure. However, we see strong growth ahead for the non-voice services.
- We expect EBITDA margins to remain stable mainly due to: 1) mid-to-high single digit revenue growth; 2) greater economies of scale; 3) players’ ongoing cost management initiatives; and 4) the shift in players’ focus towards the provision of non-voice services, in particular, the wireless broadband and data valueadded
services, which would help mitigate pricing pressures and higher subscriber/retention costs.
- We are keeping our view that with the exception of Axiata, the telcos will continue to offer generous dividend yields to investors on the back of: 1) stable EBITDA margins; 2) capex spending likely to trend down further; and 3) clean balance sheets. On top of regular dividends, we believe there is a strong chance that the telcos would supplement these further with specials.
- The current Mandatory Standard on Access Pricing is expiring on 30 Jun 2010 and we believe the review may see the gap between mobile and fixed termination rates narrow further.
RHB Equity 360°( Telecom, Insurance, Gamuda, B-Toto, MISC, Hai-O; Technical: Berjaya Corp, Genting Msia) - ...
Friday, June 25, 2010
Kimlun Corp Berhad : Public Issue of 64m New Shares & Offer For Sale Of 11.3m Existing Shares - 25/6/2010
Kimlun Corp Bhd (Kimlun) is primarily engaged in:
(1)Construction (largely building jobs and minor infrastructure jobssuch as roads and flyovers); and
(2) Manufacturing of pre-cast concrete products such as tunnel lining segments.
For FY12/09, construction and manufacturing contributed 78.6% and 21.4% to total gross profit respectively. In terms of geographical breakdown, in FY12/09, Kimlun derived 91% of its revenues from Malaysia with the balance 9% from Singapore.
Kimlun Corp Berhad : Public Issue of 64m New Shares & Offer For Sale Of 11.3m Existing Shares - 25/6/2010
(1)Construction (largely building jobs and minor infrastructure jobssuch as roads and flyovers); and
(2) Manufacturing of pre-cast concrete products such as tunnel lining segments.
For FY12/09, construction and manufacturing contributed 78.6% and 21.4% to total gross profit respectively. In terms of geographical breakdown, in FY12/09, Kimlun derived 91% of its revenues from Malaysia with the balance 9% from Singapore.
Kimlun Corp Berhad : Public Issue of 64m New Shares & Offer For Sale Of 11.3m Existing Shares - 25/6/2010
The World Economy... - 25/6/2010
Fiscal Austerity Versus Stimulus In The G-20 Summit
UK’s fiscal austerity will probably dominate the Group of 20 (G-20) summit’s discussion in Canada this week. UK’s sixweek old government this week proposed the country’s biggest round of budget cuts since World War II in a move to reduce its budget deficit of as high as 11% of GDP, the largest in the G-20. Chancellor of the Exchequer, George Osborne, on 22 June proposed an emergency budget that imposed a levy on banks, raised the sales tax and slashed spending.
The plan, alongside measures proposed by the prior government, will generate £113bn (US$168bn) of deficit cuts, 15% of the £737bn budget foreseen for 2015. UK joined its counterparts in Europe to reduce its budget deficit, six weeks after the Euroland’s governments united to save Greece from default. As it stands, German on 8 June proposed to cut its budget worth more than €80bn (US$98bn) through 2014. Countries including Greece, Spain, Portugal and Italy are already introducing austerity plans as well. European policymakers were concerned that failure to address public finances now risks reviving a bond market selloff that required a bailout for Greece in May. The UK’s proposals presents a test case for G-20 policymakers, as they argue how quickly to act.
The World Economy... - 25/6/2010
UK’s fiscal austerity will probably dominate the Group of 20 (G-20) summit’s discussion in Canada this week. UK’s sixweek old government this week proposed the country’s biggest round of budget cuts since World War II in a move to reduce its budget deficit of as high as 11% of GDP, the largest in the G-20. Chancellor of the Exchequer, George Osborne, on 22 June proposed an emergency budget that imposed a levy on banks, raised the sales tax and slashed spending.
The plan, alongside measures proposed by the prior government, will generate £113bn (US$168bn) of deficit cuts, 15% of the £737bn budget foreseen for 2015. UK joined its counterparts in Europe to reduce its budget deficit, six weeks after the Euroland’s governments united to save Greece from default. As it stands, German on 8 June proposed to cut its budget worth more than €80bn (US$98bn) through 2014. Countries including Greece, Spain, Portugal and Italy are already introducing austerity plans as well. European policymakers were concerned that failure to address public finances now risks reviving a bond market selloff that required a bailout for Greece in May. The UK’s proposals presents a test case for G-20 policymakers, as they argue how quickly to act.
The World Economy... - 25/6/2010
Corporate Highlights - 25/6/2010
♦ Top Glove
Briefing Note : Demand For Gloves Still Positive
♦ JCY International Berhad
New Coverage : Riding The Technology Wave
♦ QSR Brands
Visit Note : Value In Quick Service Restaurant Business
Corporate Highlights - 25/6/2010
Briefing Note : Demand For Gloves Still Positive
♦ JCY International Berhad
New Coverage : Riding The Technology Wave
♦ QSR Brands
Visit Note : Value In Quick Service Restaurant Business
Corporate Highlights - 25/6/2010
Market Technical Reading - Expect Another Sideway Trading Today... - 25/6/2010
Local Market Leads:
♦ Share price in Bursa Malaysia traded lower on Thursday, on steady selling pressure throughout the day, partly on account of the T+3 selling activities from Monday’s high volume delivery.
♦ The benchmark FBM KLCI, however, rallied sharply to an intraday high of 1,333.49 in mid-day, but the momentum failed to sustain.
Market Technical Reading - Expect Another Sideway Trading Today... - 25/6/2010
♦ Share price in Bursa Malaysia traded lower on Thursday, on steady selling pressure throughout the day, partly on account of the T+3 selling activities from Monday’s high volume delivery.
♦ The benchmark FBM KLCI, however, rallied sharply to an intraday high of 1,333.49 in mid-day, but the momentum failed to sustain.
Market Technical Reading - Expect Another Sideway Trading Today... - 25/6/2010
IJM Land Berhad : Disposes Of Aeon Bandaraya Melaka - 25/6/2010
RM64m disposal gains. IJM Land is disposing of its retail property Aeon Bandaraya Melaka to ADF Tiger III Ltd, a Bermuda-incorporated foreign fund, for RM66.3m cash (plus debt of Aeon Bandaraya Melaka, we believe, taking the cue from the property’s net book value of RM319.4m as at 31 Mar 2010). IJM Land expects to record RM64m gains from the disposal, translating to 5.8sen/share.
IJM Land Berhad : Disposes Of Aeon Bandaraya Melaka - 25/6/2010
IJM Land Berhad : Disposes Of Aeon Bandaraya Melaka - 25/6/2010
SapuraCrest Petroleum Berhad : Lower Marine Division Losses Boosted Earnings - 25/6/2010
In line. 1QFY01/11 core net profit of RM50.7m accounted for 22% and 24% of our and consensus full-year estimates respectively, comfortably within expectations. 1Q IPF revenue was significantly better both on a yoy and qoq basis, but this was offset by lower revenue from the drilling and marine divisions as charter rates and utilisation rates remained soft. We note that 1Q EBIT was boosted by lower losses from the marine division, but if we strip this out, EBIT for the IPF, drilling and O&M divisions would have been flat despite higher revenue. In our view, 1QFY01/11 EBIT margins are more normal in the absence of higher-margin deepwater jobs that were completed in FY01/10.
SapuraCrest Petroleum Berhad : Lower Marine Division Losses Boosted Earnings - 25/6/2010
SapuraCrest Petroleum Berhad : Lower Marine Division Losses Boosted Earnings - 25/6/2010
Gamuda Berhad : - 9MFY07/10 Net Profit Grows 36% YoY, Lobbying Hard For KL MRT - 25/6/2010
♦ Missed consensus. 9MFY07/10 net profit came in within our expectation at 74% of our full-year forecast but missed market expectation at only 68% of the full-year market consensus.
♦ Lobbying hard for KL MRT. Gamuda was open about, it via its 50:50 JV with MMC Corp, lobbying hard for the much-talked-about RM36bn KL mass rapid transit (MRT) project. It did acknowledge that at this point of time, it “will not call it a project, but just a proposal pending the Cabinet’s approval”.
Gamuda Berhad : - 9MFY07/10 Net Profit Grows 36% YoY, Lobbying Hard For KL MRT - 25/6/2010
♦ Lobbying hard for KL MRT. Gamuda was open about, it via its 50:50 JV with MMC Corp, lobbying hard for the much-talked-about RM36bn KL mass rapid transit (MRT) project. It did acknowledge that at this point of time, it “will not call it a project, but just a proposal pending the Cabinet’s approval”.
Gamuda Berhad : - 9MFY07/10 Net Profit Grows 36% YoY, Lobbying Hard For KL MRT - 25/6/2010
QSR Brands Berhad : Value In Quick Service Restaurant Business - 25/6/2010
Strong trend in demand likely to continue in 2010. In 1QFY12/10, recorded SSS growth of 7% for its Pizza Hut business (PH) and 8% for KFC business in Malaysia. We anticipate strong SSS growth trend to continue for the rest of 2010 following:
1) FY09’s low base factor;
2) continuous effort by PH and KFC in initiating new product innovations to cater for consumer preference;
3) aggressive advertising campaigns; and improving consumer sentiment.
QSR Brands Berhad : Value In Quick Service Restaurant Business - 25/6/2010
1) FY09’s low base factor;
2) continuous effort by PH and KFC in initiating new product innovations to cater for consumer preference;
3) aggressive advertising campaigns; and improving consumer sentiment.
QSR Brands Berhad : Value In Quick Service Restaurant Business - 25/6/2010
JCY International Berhad - Riding The Technology Wave - 25/6/2010
One of the largest HDD component manufacturers. JCY International (JCY) is principally involved in precision engineering for hard disk drive (HDD) mechanical components, with plants in Malaysia, Thailand and China. The company is one of the largest HDD component manufacturers in the world with an estimated monthly capacity of 32m pieces.
JCY International Berhad - Riding The Technology Wave - 25/6/2010
JCY International Berhad - Riding The Technology Wave - 25/6/2010
Top Glove Corporation - Demand For Gloves Still Positive - 25/6/2010
We attended Top Glove’s briefing yesterday and set out below the key takeaways that we gathered.
♦ Outlook still positive... Top Glove is still positive on the demand for rubber gloves as gloves remain as a necessity in the healthcare industry as a form of protection. Coupled with organic growth, rising healthcare awareness, especially from developing countries, and restocking activities, these should help support demand for rubber gloves moving forward.
Top Glove Corporation - Demand For Gloves Still Positive - 25/6/2010
♦ Outlook still positive... Top Glove is still positive on the demand for rubber gloves as gloves remain as a necessity in the healthcare industry as a form of protection. Coupled with organic growth, rising healthcare awareness, especially from developing countries, and restocking activities, these should help support demand for rubber gloves moving forward.
Top Glove Corporation - Demand For Gloves Still Positive - 25/6/2010
RHB Equity 360° - 25 June 2010 (JCY, Top Glove, IJM Land, QSR, Gamuda, SapuraCrest; Technical: HL Bank)
New Coverage
- JCY International is principally involved in precision engineering for hard disk drive mechanical components, with plants in Malaysia, Thailand and China. The company is one of the largest HDD component manufacturers in the world with an estimated monthly capacity of 32m pieces.
- JCY’s main customers are the world’s top HDD vendors i.e. Western Digital and Seagate. Together, they combine a market share of 59%. JCY is estimated to command a global market share of 25% for the base plate, 16% of the top cover, and 12% of the APFA.
- We like JCY given: 1) its proven track record of manufacturing capability; 2) it is a leading HDD component manufacturer; and 3) its ability to diversify into various HDD components.
- We estimate FY09-12 EPS CAGR of 28.4% on good earnings visibility given the strong demand outlook for hard disk drives. We have assumed a target PER of 12x for JCY after imputing a discount to the peers’ weighted average FY11 PER of 13.6x to reflect its mid-range market cap.
- We initiate coverage on JCY with an Outperform call and a fair value of RM2.16 based on 12x FY11 PER.
RHB Equity 360° - 25 June 2010 (JCY, Top Glove, IJM Land, QSR, Gamuda, SapuraCrest; Technical: HL Bank)
- JCY International is principally involved in precision engineering for hard disk drive mechanical components, with plants in Malaysia, Thailand and China. The company is one of the largest HDD component manufacturers in the world with an estimated monthly capacity of 32m pieces.
- JCY’s main customers are the world’s top HDD vendors i.e. Western Digital and Seagate. Together, they combine a market share of 59%. JCY is estimated to command a global market share of 25% for the base plate, 16% of the top cover, and 12% of the APFA.
- We like JCY given: 1) its proven track record of manufacturing capability; 2) it is a leading HDD component manufacturer; and 3) its ability to diversify into various HDD components.
- We estimate FY09-12 EPS CAGR of 28.4% on good earnings visibility given the strong demand outlook for hard disk drives. We have assumed a target PER of 12x for JCY after imputing a discount to the peers’ weighted average FY11 PER of 13.6x to reflect its mid-range market cap.
- We initiate coverage on JCY with an Outperform call and a fair value of RM2.16 based on 12x FY11 PER.
RHB Equity 360° - 25 June 2010 (JCY, Top Glove, IJM Land, QSR, Gamuda, SapuraCrest; Technical: HL Bank)
Thursday, June 24, 2010
Corporate Highlights - 24/6/2010
♦ Media
Sector Update : YoY Adex Growth Momentum Continues
♦ Freight Management
News Update : Disposes of Leasehold Land in Klang
Corporate Highlights - 24/6/2010
Sector Update : YoY Adex Growth Momentum Continues
♦ Freight Management
News Update : Disposes of Leasehold Land in Klang
Corporate Highlights - 24/6/2010
Market Technical Reading - Investors To Apply “Wait-and-see” Strategy... - 24/6/2010
Local Market Leads:
♦ Despite an overnight slump on the US DJIA, and the poor performance in the regional markets, the local bourse bucked the general downtrend and closed higher on afternoon bargain-hunting activities on Wednesday.
♦ Th FBM KLCI opened softly in the early trading and struggled sideways for most of the day, before the afternoon recovery and the last-minute push up. It rose 6.26 pts or 0.47% to end the day at 1,329.70.
Market Technical Reading - Investors To Apply “Wait-and-see” Strategy... - 24/6/2010
♦ Despite an overnight slump on the US DJIA, and the poor performance in the regional markets, the local bourse bucked the general downtrend and closed higher on afternoon bargain-hunting activities on Wednesday.
♦ Th FBM KLCI opened softly in the early trading and struggled sideways for most of the day, before the afternoon recovery and the last-minute push up. It rose 6.26 pts or 0.47% to end the day at 1,329.70.
Market Technical Reading - Investors To Apply “Wait-and-see” Strategy... - 24/6/2010
Jaya Tiasa Berhad : Within Expectations - 24/6/2010
In line. FY04/10 net profit of RM26.6m, came in within our and consensus expectations, coming in at 96% and 95% of forecasts, respectively. During the quarter, Jaya Tiasa proposed a first and final dividend of 2 sen (less 25% tax) or a net payout of 16%, which is above our expectations of no dividend payment in FY10.
Jaya Tiasa Berhad : Within Expectations - 24/6/2010
Jaya Tiasa Berhad : Within Expectations - 24/6/2010
Freight Management : Disposes of Leasehold Land in Klang - 24/6/2010
FM disposes of leasehold land in Klang. FM has on 23 Jun 10 disposed of a piece of leasehold land in Bandar Sultan Sulaiman, Klang for RM5.1m cash.
Freight Management : Disposes of Leasehold Land in Klang - 24/6/2010
Freight Management : Disposes of Leasehold Land in Klang - 24/6/2010
Media - YoY Adex Growth Momentum Continues - 24/6/2010
May’s adex for TV and print media rose 21.1% yoy. According to Nielsen Media Research (NMR), May’s gross ad spend for print and TV media rose 21.1% yoy with both TV and print media reporting yoy growth of 22.5% and 19.9% respectively.
Media - YoY Adex Growth Momentum Continues - 24/6/2010
Media - YoY Adex Growth Momentum Continues - 24/6/2010
RHB Equity 360° - 24 June 2010 (Media, Freight Mgt, Jaya Tiasa; Technical: MPHB)
Sector Update
Media Prima : Fair value revised to RM2.80, from RM 2.55 Outperform
MCIL : Fair value raised to RM1.16 from RM1.14 Outperform
Star : Fair value raised to RM3.86 from RM3.60 Market Perform
- According to Nielsen Media Research, May’s gross adex for print and TV media rose 21.1% yoy and grew 10.7% mom, led by TV (+22.5% yoy; +20.3% mom) while print reported commendable growth of 19.9% yoy (+3.8% mom). Once again, we believe this strong yoy growth was mainly due to the low base effect coupled with improving economic conditions. YTD (Jan-May), adex growth stood at 29.9% yoy.
RHB Equity 360° - 24 June 2010 (Media, Freight Mgt, Jaya Tiasa; Technical: MPHB)
Media Prima : Fair value revised to RM2.80, from RM 2.55 Outperform
MCIL : Fair value raised to RM1.16 from RM1.14 Outperform
Star : Fair value raised to RM3.86 from RM3.60 Market Perform
- According to Nielsen Media Research, May’s gross adex for print and TV media rose 21.1% yoy and grew 10.7% mom, led by TV (+22.5% yoy; +20.3% mom) while print reported commendable growth of 19.9% yoy (+3.8% mom). Once again, we believe this strong yoy growth was mainly due to the low base effect coupled with improving economic conditions. YTD (Jan-May), adex growth stood at 29.9% yoy.
RHB Equity 360° - 24 June 2010 (Media, Freight Mgt, Jaya Tiasa; Technical: MPHB)
Wednesday, June 23, 2010
Corporate Highlights - 23/6/2010
♦ Sunway Holdings
Visit Note : Earnings Visibility Improves Further
♦ Motor
Sector Update : May TIV Rises 15.6% YoY, 4.2% MoM
♦ Oil & Gas
Sector Update : SOGT Back In The Spotlight
Corporate Highlights - 23/6/2010
Visit Note : Earnings Visibility Improves Further
♦ Motor
Sector Update : May TIV Rises 15.6% YoY, 4.2% MoM
♦ Oil & Gas
Sector Update : SOGT Back In The Spotlight
Corporate Highlights - 23/6/2010
The World Economy... - 23/6/2010
Japan Pledged To Balance Its Budget In 10 Years To Curtail the Country’s Debt
Japan’s government pledged to balance its budget in 10 years and reduce bond sales in a move to bolster investor confidence that it is working towards containing its debt, the world’s largest public debt. The plan calls for balancing the budget, excluding interest payments on bonds, by the year ending March 2021. Japan said that it planned to cap annual spending at ¥71 trn yen (US$781bn) over the next three years and tax changes will be unveiled soon. Under the proposed plan, ministries will follow a “pay-as-you-go” principle when compiling the budget, meaning policymakers must secure funds before seeking extra spending. The government last week also indicated that it is considering increasing the country’s 5% sales tax to enhance its revenue.
The World Economy... - 23/6/2010
Japan’s government pledged to balance its budget in 10 years and reduce bond sales in a move to bolster investor confidence that it is working towards containing its debt, the world’s largest public debt. The plan calls for balancing the budget, excluding interest payments on bonds, by the year ending March 2021. Japan said that it planned to cap annual spending at ¥71 trn yen (US$781bn) over the next three years and tax changes will be unveiled soon. Under the proposed plan, ministries will follow a “pay-as-you-go” principle when compiling the budget, meaning policymakers must secure funds before seeking extra spending. The government last week also indicated that it is considering increasing the country’s 5% sales tax to enhance its revenue.
The World Economy... - 23/6/2010
Market Technical Reading - Risk Appetite To Reduce In The Near Term... - 23/6/2010
Local Market Leads:
♦ As the previous day’s euphoric buying sentiment eased, the local market, in line with the regional indices fell on profit-taking pullback on Tuesday.
♦ Hang Seng Index (-0.4%), Nikkei 225 (-1.2%), FTSTI (-0.5%) and KOSPI (-0.5%) closed lower on profit-taking pullback amid uncertainties over the pace of the Yuan’s appreciation after China’s central bank announced that it would increase the currency’s flexibility.
Market Technical Reading - Risk Appetite To Reduce In The Near Term... - 23/6/2010
♦ As the previous day’s euphoric buying sentiment eased, the local market, in line with the regional indices fell on profit-taking pullback on Tuesday.
♦ Hang Seng Index (-0.4%), Nikkei 225 (-1.2%), FTSTI (-0.5%) and KOSPI (-0.5%) closed lower on profit-taking pullback amid uncertainties over the pace of the Yuan’s appreciation after China’s central bank announced that it would increase the currency’s flexibility.
Market Technical Reading - Risk Appetite To Reduce In The Near Term... - 23/6/2010
Proton Holdings Berhad : Proton And Lotus To Develop Small Hybrid Cars - 23/6/2010
Proton and Lotus to jointly develop small hybrid cars. Proton and its wholly-owned subsidiary Lotus, will jointly develop small cars with hybrid technology for the global market. The model is expected to be launched in the next 18-24 months as part of their strategy to enter into the global market that entails industry players to come out with small, fuel efficient and environmental friendly cars.
Proton Holdings Berhad : Proton And Lotus To Develop Small Hybrid Cars - 23/6/2010
Proton Holdings Berhad : Proton And Lotus To Develop Small Hybrid Cars - 23/6/2010
KFC Holding (M) Bhd : Share Split, Bonus And Free Warrants Issue - 23/6/2010
Share split, bonus and warrants issue. KFCH has proposed three exercises to be completed in sequence: firstly a 1-to-2 share split; secondly, a 1-for-2 bonus issue; and thirdly, a free warrants issue on a 1-for-25 basis. The entitlement dates are to be announced later. The rationale for these exercises is to improve the liquidity and marketability of KFCH shares and is targeted for completion by 3Q2010.
KFC Holding (M) Bhd : Share Split, Bonus And Free Warrants Issue -23/6/2010
KFC Holding (M) Bhd : Share Split, Bonus And Free Warrants Issue -23/6/2010
Kencana Petroleum Berhad : Follow Up - 23/6/2010
Follow up. We spoke with Kencana’s management yesterday. The tender-assist drilling rig owned by MKR1 (and currently being built by Kencana) will be delivered to Petronas Carigali by mid-Aug, and should commence operations in mid-Sep. The rig is in fact physically completed and only awaiting final testing. Kencana has already recruited the rig’s onshore manager and will go on to recruit the crew. Manpower and other operating costs are already covered under the 5-year US$235m service contract awarded by Petronas Carigali. The charter will still earn a pre-tax profit margin of 30-35% p.a. which is higher than our estimate yesterday of 20-30% EBIT margin based on SapuraCrest’s drilling division earnings.According to management, Kencana’s profit margin may be higher due to differences in engineering specifications, as well as the financing structure.
Kencana Petroleum Berhad : Follow Up - 23/6/2010
Kencana Petroleum Berhad : Follow Up - 23/6/2010
Oil And Gas - SOGT Back In The Spotlight - 23/6/2010
SOGT back in the spotlight. We highlight that the long-delayed Sabah Oil & Gas Terminal (SOGT) construction contract has reopened for submission of bids. The tender will close next week. Nine bidders have been shortlisted including Kencana and Dialog. The contract is expected to be awarded in Sep or Oct and will be for a period of two years, i.e. for completion in 2013.
Oil And Gas - SOGT Back In The Spotlight - 23/6/2010
Oil And Gas - SOGT Back In The Spotlight - 23/6/2010