Below expectations. Hai-O’s 1QFY04/11 net profit was below our and
consensus estimates, accounting for only 11.2% and 12.2% of our and
consensus full year net profit forecasts respectively. Earnings dropped
significantly by 57.7% yoy and 45.3% qoq respectively. The drop was
mainly attributed to its MLM division, which experienced a contraction in
revenues of 73% yoy, while accounting for only 8% of our full year revenue
estimate for the division.
Hai-O Enterprise Berhad : MLM Division Slowdown Worse Than Expected - 30/09/2010
Showing posts with label Hai-O Enterprise. Show all posts
Showing posts with label Hai-O Enterprise. Show all posts
Thursday, September 30, 2010
Thursday, July 29, 2010
Hai-O Enterprise Berhad : FY04/11 Membership To Contract - 29/07/2010
Membership to contract in FY11. We believe that due to the revised Direct Selling Act (DSA), Hai-O’s membership drive will be affected, as well as its retention of existing members. We have adjusted our forecast to include a net membership contraction of 1,200/mth, which consequently reduces our FY11-13 Core Distribution Force (CDF) assumption by 5.1-10%.
Hai-O Enterprise Berhad : FY04/11 Membership To Contract - 29/07/2010
Hai-O Enterprise Berhad : FY04/11 Membership To Contract - 29/07/2010
RHB Equity 360° - 29 July 2010 (Hai-O, APM, PLUS, WCT, Daibochi; Technical: E&O)
Top Story : Hai-O – FY04/11 membership to contract Underperform (down from MP)
Visit Note
- We believe that due to the revised Direct Selling Act (DSA), Hai-O’s membership drive as well as its retention of existing members will be affected.
RHB Equity 360° - 29 July 2010 (Hai-O, APM, PLUS, WCT, Daibochi; Technical: E&O)
Visit Note
- We believe that due to the revised Direct Selling Act (DSA), Hai-O’s membership drive as well as its retention of existing members will be affected.
RHB Equity 360° - 29 July 2010 (Hai-O, APM, PLUS, WCT, Daibochi; Technical: E&O)
Tuesday, June 29, 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
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
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
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) - ...
Monday, June 14, 2010
Mandarin Version - Hai-O Enterprise Berhad : Upside To Be Blocked By RM4.40 and The UTL…-14/06/2010
HaiO broke out from RM4.12 lately to spell more upside potential. HaiO reversed its uptrend after forming a “shooting star” candle in mid-Mar 2010. Selling pressure exaggerated further after it lost the RM4.40 key support level and the UTL in end-Apr. Coupled with a “dead cross” signal on the 10-day and 40-day SMAs, this sparked a steep sell off to RM3.26 low in end-May. Thereafter, a recovery leg kicked in, leading it back to above the 10-day and 40-day SMAs. Of late, it broke out from RM4.12 to spell more upside potential, before settling at RM4.21 on Friday with a
“doji” candle to mark uncertainties ahead.
Mandarin Version - Hai-O Enterprise Berhad : Upside To Be Blocked By RM4.40 and The UTL…-14/06/2010
“doji” candle to mark uncertainties ahead.
Mandarin Version - Hai-O Enterprise Berhad : Upside To Be Blocked By RM4.40 and The UTL…-14/06/2010
Corporate Highlights... - 14/06/2010
♦ Lafarge (M) Cement
Visit Note : Better Times Ahead
♦ Adventa
Results Preview : Delay In Expansion Plan
♦ Market Technical Reading
Daily Trading Strategy : Trading Interest To Stay Dull...
♦ Hai-O Enterprise
Weekly Trading Idea : Upside To Be Blocked By RM4.40 and The UTL…
♦ Commodities & Currencies
Weekly Technical Viewpoint : Further Weakness In The US Dollar Is Seen This Week…
Corporate Highlights...-14/06/2010
Visit Note : Better Times Ahead
♦ Adventa
Results Preview : Delay In Expansion Plan
♦ Market Technical Reading
Daily Trading Strategy : Trading Interest To Stay Dull...
♦ Hai-O Enterprise
Weekly Trading Idea : Upside To Be Blocked By RM4.40 and The UTL…
♦ Commodities & Currencies
Weekly Technical Viewpoint : Further Weakness In The US Dollar Is Seen This Week…
Corporate Highlights...-14/06/2010
RHB Equity 360° (Lafarge, Adventa; Technical: Top Glove, Hai-O)-14/06/2010
Top Story : Lafarge M Cement – Better times ahead Market Perform
Visit Note:
- While demand growth in 1HFY12/10 is likely to be flattish on yoy basis, we sense that Lafarge is positive on domestic cement consumption from 2HFY12/10, on the back of the roll out/ resumption of several largescale projects.
- Rise in demand and selling prices is to be partly offset by higher energy prices, as thermal coal prices have risen to US$98.16/metric tonne, from US$68.6 a year ago. Should the government approve TNB’s proposal to increase electricity tariff, Lafarge’s production cost will be higher, hence further lowering margins.
- Lafarge’s initial plan to invest in a new RM100m grinding plant to resolve its production bottleneck is put on hold for the time being. We believe a decision will be made in a few months’ time when it starts to see a surge in demand.
- We believe Lafarge will declare a higher dividend for FY12/10 in view of its strong cash position. Based on our estimates, Lafarge can raise FY12/10 gross DPS from 38 sen to 60 sen, translating to a yield of 9.1%.
- We are raising our FY12/10 earnings forecast by 18.7% to RM361.1m, while indicative fair value remains unchanged at RM6.83 based on 14x FY12/11 EPS of 48.8 sen. Maintain Market Perform.
RHB Equity 360° (Lafarge, Adventa; Technical: Top Glove, Hai-O)-14/06/2010
Visit Note:
- While demand growth in 1HFY12/10 is likely to be flattish on yoy basis, we sense that Lafarge is positive on domestic cement consumption from 2HFY12/10, on the back of the roll out/ resumption of several largescale projects.
- Rise in demand and selling prices is to be partly offset by higher energy prices, as thermal coal prices have risen to US$98.16/metric tonne, from US$68.6 a year ago. Should the government approve TNB’s proposal to increase electricity tariff, Lafarge’s production cost will be higher, hence further lowering margins.
- Lafarge’s initial plan to invest in a new RM100m grinding plant to resolve its production bottleneck is put on hold for the time being. We believe a decision will be made in a few months’ time when it starts to see a surge in demand.
- We believe Lafarge will declare a higher dividend for FY12/10 in view of its strong cash position. Based on our estimates, Lafarge can raise FY12/10 gross DPS from 38 sen to 60 sen, translating to a yield of 9.1%.
- We are raising our FY12/10 earnings forecast by 18.7% to RM361.1m, while indicative fair value remains unchanged at RM6.83 based on 14x FY12/11 EPS of 48.8 sen. Maintain Market Perform.
RHB Equity 360° (Lafarge, Adventa; Technical: Top Glove, Hai-O)-14/06/2010
Hai-O Enterprise Berhad : Upside To Be Blocked By RM4.40 and The UTL…-14/06/2010
HaiO broke out from RM4.12 lately to spell more upside potential. HaiO reversed its uptrend after forming a “shooting star” candle in mid-Mar 2010. Selling pressure exaggerated further after it lost the RM4.40 key support level and the UTL in end-Apr. Coupled with a “dead cross” signal on the 10-day and 40-day SMAs, this sparked a steep sell off to RM3.26 low in end-May. Thereafter, a recovery leg kicked in, leading it back to above the 10-day and 40-day SMAs. Of late, it broke out from RM4.12 to spell more upside potential, before settling at RM4.21 on Friday with a
“doji” candle to mark uncertainties ahead.
Hai-O Enterprise Berhad : Upside To Be Blocked By RM4.40 and The UTL…-14/06/2010
“doji” candle to mark uncertainties ahead.
Hai-O Enterprise Berhad : Upside To Be Blocked By RM4.40 and The UTL…-14/06/2010
Monday, May 24, 2010
RHB Equity 360° (First Resources, QL, IJM, EON Cap, PLUS, WCT, Furniweb; Technical: Hai-O, CIMB) - 24/05/2010
Top Story : First Resources – Exponential earnings growth at inexpensive valuations - Outperform
New Coverage
♦ First Resources (FR) is a small (by Indonesian standards) but efficient pure plantation company listed in Singapore. FR has 113,010ha of landbank in Indonesia and currently operates 8 palm oil mills. It has also ventured downstream via a 250k tonne capacity refinery and a 250k tonne capacity biodiesel plant. It is currently constructing a 300k tonne fractionation plant which will be completed by 1HFY12/011.
♦ We believe there are five major reasons for investing in FR:
1) Its strong growth profile, given its young plantation age profile;
2) Aggressive planting targets, given its unplanted landbank;
3) Efficient planter, with below average cost of production;
4) Downstream expansion to boost bottomline; and
5) Valuations at unjustifiable significant discount to peers.
We project FR to post a core net earnings (ex-EI and biological gains/losses) CAGR of 59.8% over the next three years to FY12.
♦ FR is currently trading at 8.7x CY10 EPS and 7.2x CY11 EPS, which is a significant discount to the Malaysian plantation sector’s average PE of 19.2x for FY10 and 15.4x for FY11 and even to the regional plantation sector average of 12.6x for FY10 and 10.6x for FY11. Given FR’s efficiently-run estates, clean operating structure and sustainable earnings growth for the medium to long term, we believe FR does not deserve to trade at such a large discount to industry peers. We assign a target PE of 11.5x to FR’s FY11 EPS, which is a 30% discount to our Malaysian target PER for the mid-cap plantation stocks, to obtain our target price of S$1.55/share. We initiate coverage with an Outperform recommendation.
RHB Equity 360° (First Resources, QL, IJM, EON Cap, PLUS, WCT, Furniweb; Technical: Hai-O, CIMB) - 24/05/2010
New Coverage
♦ First Resources (FR) is a small (by Indonesian standards) but efficient pure plantation company listed in Singapore. FR has 113,010ha of landbank in Indonesia and currently operates 8 palm oil mills. It has also ventured downstream via a 250k tonne capacity refinery and a 250k tonne capacity biodiesel plant. It is currently constructing a 300k tonne fractionation plant which will be completed by 1HFY12/011.
♦ We believe there are five major reasons for investing in FR:
1) Its strong growth profile, given its young plantation age profile;
2) Aggressive planting targets, given its unplanted landbank;
3) Efficient planter, with below average cost of production;
4) Downstream expansion to boost bottomline; and
5) Valuations at unjustifiable significant discount to peers.
We project FR to post a core net earnings (ex-EI and biological gains/losses) CAGR of 59.8% over the next three years to FY12.
♦ FR is currently trading at 8.7x CY10 EPS and 7.2x CY11 EPS, which is a significant discount to the Malaysian plantation sector’s average PE of 19.2x for FY10 and 15.4x for FY11 and even to the regional plantation sector average of 12.6x for FY10 and 10.6x for FY11. Given FR’s efficiently-run estates, clean operating structure and sustainable earnings growth for the medium to long term, we believe FR does not deserve to trade at such a large discount to industry peers. We assign a target PE of 11.5x to FR’s FY11 EPS, which is a 30% discount to our Malaysian target PER for the mid-cap plantation stocks, to obtain our target price of S$1.55/share. We initiate coverage with an Outperform recommendation.
RHB Equity 360° (First Resources, QL, IJM, EON Cap, PLUS, WCT, Furniweb; Technical: Hai-O, CIMB) - 24/05/2010
Friday, May 21, 2010
Corporate Highlights - 21/5/2010
♦ Market Momentum
Market Update : Pick And Choose
♦ Oil & Gas
Sector Update : Fabricators To Ride On Stronger Contract Flows In 2H10
♦ Axiata
Results Preview : Likely To Report Strong 1Q10 Performance
♦ CIMB Group
Results / Briefing Note : Off To A Good Start
♦ UMW Holdings
Results Note : Sustaining Strong Hold in 1Q10
♦ Kossan Rubber Industries
Results Note : No Surprises
Corporate Highlights - 21/5/2010
Market Update : Pick And Choose
♦ Oil & Gas
Sector Update : Fabricators To Ride On Stronger Contract Flows In 2H10
♦ Axiata
Results Preview : Likely To Report Strong 1Q10 Performance
♦ CIMB Group
Results / Briefing Note : Off To A Good Start
♦ UMW Holdings
Results Note : Sustaining Strong Hold in 1Q10
♦ Kossan Rubber Industries
Results Note : No Surprises
Corporate Highlights - 21/5/2010
RHB Equity 360° - 21 May 2010 (Market, O&G, Axiata, Hai-O, CIMB, UMW, Kossan; Technical: AirAsia)
Market Update
- We do not see much good news in the near term and Malaysia appears caught in a downdraft of fear sparked off by global macroeconomic concerns. The risk of more downside is thus likely to be greater than the potential for upside.
- Clearly, losers from the strong ringgit have been among the hardest hit, including resources (plantations, oil & gas and timber), semiconductor, rubber gloves and steel. The GLCs and M&A plays could also slip further if confidence continues to falter.
- If the FBM KLCI falls as expected by RHBRI’s technical research to the next support level of 1,229, i.e. 6% lower than current levels, last seen in Oct 2009, 2010-2011 PERs would fall to 14.0x and 12.2x respectively, from 15.1x and 13.1x currently. We thus see value re-emerging.
- We believe the long-term picture is still intact with sustained economic and corporate earnings growth. We expect the Government to push forward with liberalisation policies and reduction of subsidies later. M&A activities are likely to continue in the industrial space, as well as banks and insurance. In addition, we
expect Malaysian corporates to look overseas for new growth opportunities, and especially given their pricing power have improved with the stronger ringgit.
- Under current volatile market conditions, we highlight that this is an opportunity to pick and choose stocks, especially those that have fallen hard in the last month such as Notion, Daibochi, Evergreen and Unisem.
RHB Equity 360° - 21 May 2010 (Market, O&G, Axiata, Hai-O, CIMB, UMW, Kossan; Technical: AirAsia)
- We do not see much good news in the near term and Malaysia appears caught in a downdraft of fear sparked off by global macroeconomic concerns. The risk of more downside is thus likely to be greater than the potential for upside.
- Clearly, losers from the strong ringgit have been among the hardest hit, including resources (plantations, oil & gas and timber), semiconductor, rubber gloves and steel. The GLCs and M&A plays could also slip further if confidence continues to falter.
- If the FBM KLCI falls as expected by RHBRI’s technical research to the next support level of 1,229, i.e. 6% lower than current levels, last seen in Oct 2009, 2010-2011 PERs would fall to 14.0x and 12.2x respectively, from 15.1x and 13.1x currently. We thus see value re-emerging.
- We believe the long-term picture is still intact with sustained economic and corporate earnings growth. We expect the Government to push forward with liberalisation policies and reduction of subsidies later. M&A activities are likely to continue in the industrial space, as well as banks and insurance. In addition, we
expect Malaysian corporates to look overseas for new growth opportunities, and especially given their pricing power have improved with the stronger ringgit.
- Under current volatile market conditions, we highlight that this is an opportunity to pick and choose stocks, especially those that have fallen hard in the last month such as Notion, Daibochi, Evergreen and Unisem.
RHB Equity 360° - 21 May 2010 (Market, O&G, Axiata, Hai-O, CIMB, UMW, Kossan; Technical: AirAsia)
Monday, March 22, 2010
Corporate Highlights...-22/03/2010
♦ Infrastructure
Sector Update : IFRIC 12 To Hit NTA And Earnings Of Concessionaires
♦ IJM Corporation
News Update : Award Of Besraya Elevated Expressway Contract Formalised
♦ Hai-O Enterprise
Results Note : Indonesia Coming On Stream
♦ Market Technical Reading
Daily Trading Strategy : Foresee Lukewarm Sentiment And Poor Volume Participation...
♦ Proton Holdings
Weekly Trading Idea : Accumulate Near RM4.26 Firm Support Level...
♦ Commodities & Currencies
Weekly Technical Viewpoint : Renewed Selling Pressure Seen On The EUR…
Corporate Highlights...-22/03/2010
Sector Update : IFRIC 12 To Hit NTA And Earnings Of Concessionaires
♦ IJM Corporation
News Update : Award Of Besraya Elevated Expressway Contract Formalised
♦ Hai-O Enterprise
Results Note : Indonesia Coming On Stream
♦ Market Technical Reading
Daily Trading Strategy : Foresee Lukewarm Sentiment And Poor Volume Participation...
♦ Proton Holdings
Weekly Trading Idea : Accumulate Near RM4.26 Firm Support Level...
♦ Commodities & Currencies
Weekly Technical Viewpoint : Renewed Selling Pressure Seen On The EUR…
Corporate Highlights...-22/03/2010
Hai-O Enterprise Berhad : Indonesia Coming On Stream-22/03/2010
In line. Hai-O’s 9MFY04/10 core net profit of RM56.0m (+52.7% yoy) was in line with our and consensus expectations, accounting for 71% of full year net profit forecasts respectively. We believe this to be in line as 4Q is generally the strongest quarter for the group, accounting for 30-36% of historical full year forecasts.
Hai-O Enterprise Berhad : Indonesia Coming On Stream-22/03/2010
Hai-O Enterprise Berhad : Indonesia Coming On Stream-22/03/2010
RHB Equity 360° (Infrastructure, IJM, Hai-O; Technical: Evergreen, Proton) - 22/03/2010
Top Story : Infrastructure – IFRIC 12 to hit NTA and earnings of concessionaires Neutral
Sector Update:
♦ IFRIC 12 - Service Concession Agreements, which covers the accounting treatment of service concession agreements in the financial statements of the operator, is targeted to take effect in Malaysia from 1 Jul 2010.
♦ We reckon that the implementation of IFRIC 12 will impact concessionaires under RHBRI’s infrastructure sector (i.e. PLUS Expressways and Puncak Niaga) in two major aspects, i.e.: (1) Concessionaires can no longer recognise concession assets as tangible assets; and (2) Concessionaires that are currently amortising concession assets using revenue method will have to switch to either straight line or use of volume method.
♦ In any case, this is nonetheless accounting entry and it will not affect our DCF-derived indicative fair value on these companies.
♦ IFRIC 12 aside, we continue to like PLUS (OP, FV = RM4.13) for its defensive earnings growth and decent dividend yield of 5-6% per annum. As for Puncak (MP, FV = RM2.95), we continue to believe that the water sector restructuring in Selangor by the Federal Government is unlikely to materialise any time soon.
RHB Equity 360° (Infrastructure, IJM, Hai-O; Technical: Evergreen, Proton) - 22/03/2010
Sector Update:
♦ IFRIC 12 - Service Concession Agreements, which covers the accounting treatment of service concession agreements in the financial statements of the operator, is targeted to take effect in Malaysia from 1 Jul 2010.
♦ We reckon that the implementation of IFRIC 12 will impact concessionaires under RHBRI’s infrastructure sector (i.e. PLUS Expressways and Puncak Niaga) in two major aspects, i.e.: (1) Concessionaires can no longer recognise concession assets as tangible assets; and (2) Concessionaires that are currently amortising concession assets using revenue method will have to switch to either straight line or use of volume method.
♦ In any case, this is nonetheless accounting entry and it will not affect our DCF-derived indicative fair value on these companies.
♦ IFRIC 12 aside, we continue to like PLUS (OP, FV = RM4.13) for its defensive earnings growth and decent dividend yield of 5-6% per annum. As for Puncak (MP, FV = RM2.95), we continue to believe that the water sector restructuring in Selangor by the Federal Government is unlikely to materialise any time soon.
RHB Equity 360° (Infrastructure, IJM, Hai-O; Technical: Evergreen, Proton) - 22/03/2010