♦ Better-than-expected housing starts improvement. Latest July 2010 Japan housing starts saw a better-than-expected improvement (+4.3% yoy and +0.1% mom to 68,785 units), which brings it to two consecutive months of growth (Jun 10 +0.6% yoy) and signifies that Japan’s housing recovery may start gaining pace soon (refer to Chart 1). This is supported by the number of building permits issued, which has been increasing for the eight months up to the latest May 2010 data (+8.7% yoy).
Timber Sector Update : Positive Signs of Recovery-07/09/2010
Showing posts with label Timber. Show all posts
Showing posts with label Timber. Show all posts
Tuesday, September 7, 2010
RHB Equity 360° (Timber; Technical: Kulim) - 07/09/2010
Top Story : Timber – Positive Signs of Recovery Overweight (up from N)
Sector Update
- Latest July 2010 Japan housing starts saw a better-than-expected improvement (+4.3% yoy and +0.1% mom to 68,785 units), which brings it to two consecutive months of growth (Jun 10 +0.6% yoy) This is supported by the number of building permits issued, which has been increasing for the eight months up to the latest May 2010 data (+8.7% yoy).
- According to Japan Lumber Report, tropical log inventories in Japan are dropping due to limited log production in Sabah and Sarawak as a result of poor weather condition. The shortage in tropical log supply could also be partly attributable to the strong demand from India and China. As a result, tropical log export prices are now at US$210/m3 for meranti regular FOB (up about 17% from the YTD low of about
US$180/m3).
- Average selling prices for tropical plywood have increased gradually since early this year, up by 7-17% YTD in June 2010. This was achieved on the back of steady import demand from Japan, where specifically, imports of tropical plywood from Malaysia has increased by 8.3% yoy in 1H10.
- In line with RHBRI’s economic team’s forecast, we are now revising our RM/US$ exchange rate assumption for Jaya Tiasa and Evergreen. Exchange rate assumption for WTK and Ta Ann had been adjusted in our recent reports.
- Upgrade our view on the timber sector to Overweight. Top pick is Evergreen (OP, FV = RM2.57).
RHB Equity 360°(Timber; Technical: Kulim) - 07/09/2010
Sector Update
- Latest July 2010 Japan housing starts saw a better-than-expected improvement (+4.3% yoy and +0.1% mom to 68,785 units), which brings it to two consecutive months of growth (Jun 10 +0.6% yoy) This is supported by the number of building permits issued, which has been increasing for the eight months up to the latest May 2010 data (+8.7% yoy).
- According to Japan Lumber Report, tropical log inventories in Japan are dropping due to limited log production in Sabah and Sarawak as a result of poor weather condition. The shortage in tropical log supply could also be partly attributable to the strong demand from India and China. As a result, tropical log export prices are now at US$210/m3 for meranti regular FOB (up about 17% from the YTD low of about
US$180/m3).
- Average selling prices for tropical plywood have increased gradually since early this year, up by 7-17% YTD in June 2010. This was achieved on the back of steady import demand from Japan, where specifically, imports of tropical plywood from Malaysia has increased by 8.3% yoy in 1H10.
- In line with RHBRI’s economic team’s forecast, we are now revising our RM/US$ exchange rate assumption for Jaya Tiasa and Evergreen. Exchange rate assumption for WTK and Ta Ann had been adjusted in our recent reports.
- Upgrade our view on the timber sector to Overweight. Top pick is Evergreen (OP, FV = RM2.57).
RHB Equity 360°(Timber; Technical: Kulim) - 07/09/2010
Monday, June 21, 2010
Timber Sector - Japan Housing Starts Improved Due To Low Base Effect - 21/6/2010
April 10 housing starts marginally improved, (+0.6% yoy to 66,568 units), the first in 17 months, which signifies that Japan’s housing recovery may start gaining pace soon. This is supported by the number of building permits issued, which has been increasing for the past six months.
Timber Sector - Japan Housing Starts Improved Due To Low Base Effect - 21/6/2010
Timber Sector - Japan Housing Starts Improved Due To Low Base Effect - 21/6/2010
RHB Equity 360 - 21 June 2010 (Sino Hua An, Timber, B-Toto; Technical: KKB Eng, AFG) - 21/6/2010
Company Update
- We now believe that Sino Hua-An’s hope of returning to the black in FY12/10 is becoming frail, as: 1) The spread between the prices of metallurgical coal (input) and metallurgical coke (output) is likely narrow in the near term; and; 2) Prices of by-products, in particular, crude benzene and tar oil, are likely to remain soft on
the back of the lacklustre crude oil price movement.
RHB Equity 360 - 21 June 2010 (Sino Hua An, Timber, B-Toto; Technical: KKB Eng, AFG) - 21/6/2010
- We now believe that Sino Hua-An’s hope of returning to the black in FY12/10 is becoming frail, as: 1) The spread between the prices of metallurgical coal (input) and metallurgical coke (output) is likely narrow in the near term; and; 2) Prices of by-products, in particular, crude benzene and tar oil, are likely to remain soft on
the back of the lacklustre crude oil price movement.
RHB Equity 360 - 21 June 2010 (Sino Hua An, Timber, B-Toto; Technical: KKB Eng, AFG) - 21/6/2010
Friday, May 7, 2010
Corporate Highlights - 7/5/2010
♦ Timber
Sector Update : Highlights From Timber Conference
♦ Unisem
Briefing Note : High On Growth
Corporate Highlights - 7/5/2010
Sector Update : Highlights From Timber Conference
♦ Unisem
Briefing Note : High On Growth
Corporate Highlights - 7/5/2010
Timber - Highlights From Timber Conference - 7/5/2010
We hosted a Timber and Furniture Day last week, where we invited management from Samling Global /Lingui Development and WTK Holdings to speak on the outlook of the sector and their company’s prospects.
Timber - Highlights From Timber Conference - 7/5/2010
Timber - Highlights From Timber Conference - 7/5/2010
RHB Equity 360° - 7 May 2010 (Timber, Unisem, Sime Darby, Muda, MISC; Technical: Faber)
Top Story : Timber – Highlights from timber conference
Sector Update
♦ We recently hosted a Timber and Furniture Day with management from Samling Global/Lingui and WTK.
♦ Low inventory in Japan is shoring up selling prices in near term. There is a risk that the Japan market could remain weak in the near term, unless construction activities start picking up more aggressively.
♦ In the medium to longer term, given that Japan’s housing starts are at such a low level, downside risk in sales volumes would be relatively limited.
♦ Cost of production is on a rising trend, mainly due to higher logging costs, caused by higher fuel, labour and machinery costs but would be offset by rising economies of scale, given the high fixed costs involved.
♦ We reiterate our Outperform call on WTK based on unchanged fair value of RM1.55 (14x CY10 EPS).
♦ We also derive Lingui’s fair value of RM0.80 based on 14x CY10 consensus EPS. However, we note that consensus numbers may not have factored in the potential upside from the rising plywood prices. There is also a possibility of privatisation by Samling Global which could generate further interest in the stock.
♦ Maintain Neutral call on timber sector.
RHB Equity 360° - 7 May 2010 (Timber, Unisem, Sime Darby, Muda, MISC; Technical: Faber)
Sector Update
♦ We recently hosted a Timber and Furniture Day with management from Samling Global/Lingui and WTK.
♦ Low inventory in Japan is shoring up selling prices in near term. There is a risk that the Japan market could remain weak in the near term, unless construction activities start picking up more aggressively.
♦ In the medium to longer term, given that Japan’s housing starts are at such a low level, downside risk in sales volumes would be relatively limited.
♦ Cost of production is on a rising trend, mainly due to higher logging costs, caused by higher fuel, labour and machinery costs but would be offset by rising economies of scale, given the high fixed costs involved.
♦ We reiterate our Outperform call on WTK based on unchanged fair value of RM1.55 (14x CY10 EPS).
♦ We also derive Lingui’s fair value of RM0.80 based on 14x CY10 consensus EPS. However, we note that consensus numbers may not have factored in the potential upside from the rising plywood prices. There is also a possibility of privatisation by Samling Global which could generate further interest in the stock.
♦ Maintain Neutral call on timber sector.
RHB Equity 360° - 7 May 2010 (Timber, Unisem, Sime Darby, Muda, MISC; Technical: Faber)
Monday, April 5, 2010
Corporate Highlights - 05/04/2010
♦ Timber
Sector Update : Japan Housing Starts Fell In February
♦ Banking Sector Update : EON Cap's Shareholders To Decide On HL Bank's Offer
♦ Market Technical Reading
Daily Trading Strategy : Medium-term Bullish Despite Shortterm Volatilities...
♦ Petra Perdana
Weekly Trading Idea : The Smooth Recovery May Lead To A Retest Of RM1.78 Soon…
♦ Commodities & Currencies
Weekly Technical Viewpoint : More Strengthening Of Ringgit Likely This Week…
Corporate Highlights -05/04/2010
Sector Update : Japan Housing Starts Fell In February
♦ Banking Sector Update : EON Cap's Shareholders To Decide On HL Bank's Offer
♦ Market Technical Reading
Daily Trading Strategy : Medium-term Bullish Despite Shortterm Volatilities...
♦ Petra Perdana
Weekly Trading Idea : The Smooth Recovery May Lead To A Retest Of RM1.78 Soon…
♦ Commodities & Currencies
Weekly Technical Viewpoint : More Strengthening Of Ringgit Likely This Week…
Corporate Highlights -05/04/2010
Timber : Japan Housing Starts Fell In February - 05/04/2010
Japan housing starts fell in February. Contrary to expectations, Japan housing starts have recorded a 15th straight month of decline, with the latest Feb 10 figure
standing at 56,527 units, a drop of 9.3% yoy and 13.0% mom from Jan 10, which was below economists’ expectations of a 1% drop yoy.
Timber : Japan Housing Starts Fell In February - 05/04/2010
standing at 56,527 units, a drop of 9.3% yoy and 13.0% mom from Jan 10, which was below economists’ expectations of a 1% drop yoy.
Timber : Japan Housing Starts Fell In February - 05/04/2010
RHB Equity 360° (Timber, Banks; Technical: Ramunia, Petra Perdana) - 05/04/2010
Top Story : Timber – Japan housing starts fell in February Neutral
Sector Update
♦ Contrary to expectations, Japan housing starts recorded a 15th straight month of decline (-9.3% yoy and 13.0% mom), which was also below economists expectations of a 1% drop yoy.
♦ Japan government is encouraging its people to renovate their homes to create a stronger resale market. While we identify potential beneficiaries from this programme to be WTK and Ta Ann, this positive effect would be offset by decrease in construction of new housing, which would reduce the demand for basic plywood products.
♦ Upward price trend confirmed by JL and a further price appreciation is expected in 2Q10 due to supply shortages. We expect prices to increase by 10-15% in CY10. As for plywood volumes, we expect an increase in production volumes by 17-30%.
♦ Sarawak’s tropical log exports have fallen following the current dry spell. Two timber players who would be most affected by this are Jaya Tiasa and WTK. However, we expect this impact to be temporary as seasonally, the dry period should recover by Mar / Apr 10. This is to be offset by recovery in selling prices. We currently forecast log volumes to rise by 5-10% in CY10 and prices to increase by 10% yoy in CY10.
♦ No changes to our forecasts. Maintain Neutral on timber sector. Top picks are Ta Ann (OP; FV = RM7.60)and Evergreen (OP; FV = RM2.35). WTK (OP; FV = RM1.55) and Jaya Tiasa (UP; FV = RM3.05).
RHB Equity 360° (Timber, Banks; Technical: Ramunia, Petra Perdana) - 05/04/2010
Sector Update
♦ Contrary to expectations, Japan housing starts recorded a 15th straight month of decline (-9.3% yoy and 13.0% mom), which was also below economists expectations of a 1% drop yoy.
♦ Japan government is encouraging its people to renovate their homes to create a stronger resale market. While we identify potential beneficiaries from this programme to be WTK and Ta Ann, this positive effect would be offset by decrease in construction of new housing, which would reduce the demand for basic plywood products.
♦ Upward price trend confirmed by JL and a further price appreciation is expected in 2Q10 due to supply shortages. We expect prices to increase by 10-15% in CY10. As for plywood volumes, we expect an increase in production volumes by 17-30%.
♦ Sarawak’s tropical log exports have fallen following the current dry spell. Two timber players who would be most affected by this are Jaya Tiasa and WTK. However, we expect this impact to be temporary as seasonally, the dry period should recover by Mar / Apr 10. This is to be offset by recovery in selling prices. We currently forecast log volumes to rise by 5-10% in CY10 and prices to increase by 10% yoy in CY10.
♦ No changes to our forecasts. Maintain Neutral on timber sector. Top picks are Ta Ann (OP; FV = RM7.60)and Evergreen (OP; FV = RM2.35). WTK (OP; FV = RM1.55) and Jaya Tiasa (UP; FV = RM3.05).
RHB Equity 360° (Timber, Banks; Technical: Ramunia, Petra Perdana) - 05/04/2010
Thursday, March 18, 2010
RHB Equity 360° (Timber, Top Glove; Technical: CIMB) - 17/03/2010
Top Story : Timber – Prospects are looking better Neutral Sector Update
- Japan housing starts may recover from Feb 09 onwards (the first yoy growth in 15 months), given the low base in Feb 09. We may also see a yoy recovery in yearly housing starts in 2010, albeit a weak and gradual one.
- Selling prices for plywood are firming up. While official figures have yet to confirm this trend, we understand from industry players that average selling prices for plywood products have been inching up by 3-5% qoq in 1Q10 from 4Q09, the strongest increase being for floor base products. We believe that the increase in average selling prices was driven mainly by shortages in supply, which led to some panic buying from Japan trading houses. However, the risk is if the supply return to the market and if demand is not enough to offset supply, the downward price pressure could come back again.
- We increased Jaya Tiasa’s FY11-12 earnings forecasts by 30-57% after increasing our plantation FFB yield assumptions by 20-44%.
- Maintaining our sector call of Neutral. Our top picks are Ta Ann (OP; FV = RM5.95) and Evergreen (OP; FV = RM2.35).
RHB Equity 360° : 17 March 2010 (Timber, Top Glove; Technical: CIMB) -17/03/2010
- Japan housing starts may recover from Feb 09 onwards (the first yoy growth in 15 months), given the low base in Feb 09. We may also see a yoy recovery in yearly housing starts in 2010, albeit a weak and gradual one.
- Selling prices for plywood are firming up. While official figures have yet to confirm this trend, we understand from industry players that average selling prices for plywood products have been inching up by 3-5% qoq in 1Q10 from 4Q09, the strongest increase being for floor base products. We believe that the increase in average selling prices was driven mainly by shortages in supply, which led to some panic buying from Japan trading houses. However, the risk is if the supply return to the market and if demand is not enough to offset supply, the downward price pressure could come back again.
- We increased Jaya Tiasa’s FY11-12 earnings forecasts by 30-57% after increasing our plantation FFB yield assumptions by 20-44%.
- Maintaining our sector call of Neutral. Our top picks are Ta Ann (OP; FV = RM5.95) and Evergreen (OP; FV = RM2.35).
RHB Equity 360° : 17 March 2010 (Timber, Top Glove; Technical: CIMB) -17/03/2010
Wednesday, March 17, 2010
Corporate Highlights - 17/03/2010
♦ Timber
Sector Update : Prospects Are Looking Better
♦ Top Glove
Company Update : Medi-Flex Back In The Black
♦ Market Technical Reading
Daily Trading Strategy : A Potential Technical Rebound Ahead!
Corporate Highlights -17/03/2010
Sector Update : Prospects Are Looking Better
♦ Top Glove
Company Update : Medi-Flex Back In The Black
♦ Market Technical Reading
Daily Trading Strategy : A Potential Technical Rebound Ahead!
Corporate Highlights -17/03/2010
Timber : Prospects Are Looking Better-17/03/2010
Japan housing starts may recover from February onwards. Japan housing starts have recorded a 14th straight month of decline, with the latest Jan 10 figure standing at 64,951 units, a drop of 8.1% yoy. Nevertheless, the rate of decline has been narrowing since Sep 09 and accordingly, there have been some signs of economic recovery. Given the low base in Feb 09, we could potentially see a first yoy growth (in 15 months) for Japan housing starts in Feb 10.
Timber : Prospects Are Looking Better
Timber : Prospects Are Looking Better