Looking at the weekly chart for Padini Holdings - Buy if it take out Rm2.75 or higher. Put your stop at rm2.43.
Sunday, August 30, 2009
Target Price From HWangDBS 2H2009 Summery
Target Price From HWangDBS 2H2009 Summery: "Sime Darby (RM8.24; Fully Valued; Price Target: RM7.45; SIME MK)
Stronger 4QFY09
2Q09 core profit in line
Limited upside
Expect stronger 2H09 earnings
Stronger earnings ahead
TRC Synergy (RM1.45; Buy; Price Target: RM2.05; TRC MK)
Still awaiting key catalyst
Malaysia Airports (RM3.34; Buy; Price Target: RM4.50; MAHB MK)
2Q09 result within expectation
Eastern & Oriental (RM1.33; Buy; Price Target: RM2.10 (Prev RM 1.50); EAST MK)
In line, stronger sales ahead
Lafarge (RM6.30; Fully Valued; Price Target: RM5.10; LMC MK)
2Q09 in line, supported by higher ASP
"
Stronger 4QFY09
- 4QFY09 earnings were better than expected due to lower taxation, slightly stronger property margins, and lower borrowing cost
- CPO price could range between RM2,000 and RM2,200 in FY10F
- Maintain Fully Valued call and RM7.45 TP.
2Q09 core profit in line
- Annualized core 2Q09 net profit is in line with our FY09F profit, but below consensus
- We raised FY10F-11F earnings in anticipation of a turn around in its overseas operations
- Sum-of-parts price target is raised to RM2.70. But downgrade to Fully Valued on rich valuation.
Limited upside
- 1QFY10 result was in line, with traffic volume growing 4% q-o-q
- Declared 10 sen interim DPS, double that for preceding year
- Downgrade to Hold, TP maintained at RM2.70.
Expect stronger 2H09 earnings
- Weak 2Q09 result was within expectation
- Expect stronger 2H09 following recent contract wins
- Poised for new contract wins given stronger oil price.
Stronger earnings ahead
- Strong 2Q09 result driven by higher construction contribution
- Expect earnings to improve following lower building material cost and improving property demand
- Maintain Buy and SOP-derived RM1.50 TP.
TRC Synergy (RM1.45; Buy; Price Target: RM2.05; TRC MK)
Still awaiting key catalyst
- 2Q09 result in line, margins improved
- Still missing key re-rating catalyst, Petro-Bru led Brunei refinery project
- Maintain Buy rating and RM2.05 TP.
Malaysia Airports (RM3.34; Buy; Price Target: RM4.50; MAHB MK)
2Q09 result within expectation
- 2Q09 core net profit was flat y-o-y at RM60.6m, in line with our expectation but below consensus’
- Positive impact from restructuring, strong passenger growth in LCCT, and improved rental contribution supported earnings
- Maintain Buy and SOP-based RM4.50 TP.
Eastern & Oriental (RM1.33; Buy; Price Target: RM2.10 (Prev RM 1.50); EAST MK)
In line, stronger sales ahead
- 1QFY10 result was in line, profit is expected to pick up with RM330m unbilled sales and RM2b upcoming launches
- Completion of rights issue by Oct09 will strengthen balance sheet and cashflows
- Maintain Buy, raised TP to RM2.10 based on 20% discount to RNAV of RM2.66 (fully diluted RM1.99)
Lafarge (RM6.30; Fully Valued; Price Target: RM5.10; LMC MK)
2Q09 in line, supported by higher ASP
- 2Q09 result was within our and consensus expectations
- Demand continues to fall 7% y-o-y, but should pick up in 2H09 along with a recovering economy
- As expected, LMC declared a single tier 15 sen DPS
- We retain our Fully Valued call as valuation remains expensive; RM5.10 TP is based on mid-cycle 9.8x PE.
LITRAK Holdings
LITRAK Holdings: "Litrak’s 1Q FY10 earnings of RM23.4m (-31.8% y-o-y) were below our expectations. The y-o-y decline was mainly attributed to higher interest income last year from its pre capital repayment cash pile and higher interest income incurred this year. Traffic volume probably grew 2%–3% y-o-y in Q1. An interim dividend of 10 sen was declared (FY10f=15sen). Our TP is raised to RM3.03 based on a 30% discount to FCFE valuation. We continue to view Litrak as a defensive play. Maintain BUY.
Lower than expected. Although Litrak reported its 1Q FY10 revenue of RM76.4m, up 2.7% y-o-y, earnings declined by 31.8% to RM23.4m. This was mainly due to (i) higher interest income (i.e. other income) in FY09 earned on its cash pile before capital repayment (~RM500m), and (ii) higher interest expense incurred this financial year. From a y-o-y perspective, margins were down at all levels for the same reasons. EBIT and net margins came in at 79.4% and 30.6% respectively (FY09 comparatives at 88.1% and 46%). To sum up, 1Q earnings only made up 22.5% of our full year estimates, which we deem to be below expectation.
Seasonally stronger quarterly. From a q-o-q perspective, revenue grew 4% while earnings jumped 19.8%. This was possibly attributed to seasonally weaker traffic along the LDP last quarter (i.e. Q4 FY09) due to the Chinese New Year festival. Reduced losses at 50%-owned SPRINT by 30.8% q-o-q also helped bump up earnings. We expect SPRINT to break even only in FY12.
Single concessionaire unlikely. Recently it was reported that privately held Asas Serbia SB would be taking private all the 22 toll concessionaries in Malaysia. We think this is unlikely given the enormous cost involved. The NPV of such a huge acquisition is unlikely to be positive should Asas actually reduce toll rates by 20%, as mentioned. The market cap of PLUS (Not Rated) and Litrak alone amount to RM18.2bn. We believe an NPV neutral solution via the government will be the likely outcome.
Defensive play, maintain BUY. Litrak declared a 10 sen interim dividend (single tier). We expect full year dividend to come in at 15 sen (5.6% yield). We have raised our longer term traffic volume assumptions for the LDP as we think our previous estimates may have been too conservative. We also update our Free Cash Flow to Equity (FCFE)-based valuation for Litrak’s latest cash balance. The TP is raised to RM3.03 (from RM2.80). Litrak’s share price should continue to be supported by continued speculation of a privatisation.
52 week H | L Price (RM) 3.18 1.56
Major Shareholders (%)
Gamuda 46.2
Employees Provident Fund 6.0
Prudential Unit Trust 2.5
LITRAK is the concessionaire for the LDP Highway. It also holds a 50% stake in the SPRINT Highway.
By OSK188
Analyst: Jeremy Goh
"
Lower than expected. Although Litrak reported its 1Q FY10 revenue of RM76.4m, up 2.7% y-o-y, earnings declined by 31.8% to RM23.4m. This was mainly due to (i) higher interest income (i.e. other income) in FY09 earned on its cash pile before capital repayment (~RM500m), and (ii) higher interest expense incurred this financial year. From a y-o-y perspective, margins were down at all levels for the same reasons. EBIT and net margins came in at 79.4% and 30.6% respectively (FY09 comparatives at 88.1% and 46%). To sum up, 1Q earnings only made up 22.5% of our full year estimates, which we deem to be below expectation.
Seasonally stronger quarterly. From a q-o-q perspective, revenue grew 4% while earnings jumped 19.8%. This was possibly attributed to seasonally weaker traffic along the LDP last quarter (i.e. Q4 FY09) due to the Chinese New Year festival. Reduced losses at 50%-owned SPRINT by 30.8% q-o-q also helped bump up earnings. We expect SPRINT to break even only in FY12.
Single concessionaire unlikely. Recently it was reported that privately held Asas Serbia SB would be taking private all the 22 toll concessionaries in Malaysia. We think this is unlikely given the enormous cost involved. The NPV of such a huge acquisition is unlikely to be positive should Asas actually reduce toll rates by 20%, as mentioned. The market cap of PLUS (Not Rated) and Litrak alone amount to RM18.2bn. We believe an NPV neutral solution via the government will be the likely outcome.
Defensive play, maintain BUY. Litrak declared a 10 sen interim dividend (single tier). We expect full year dividend to come in at 15 sen (5.6% yield). We have raised our longer term traffic volume assumptions for the LDP as we think our previous estimates may have been too conservative. We also update our Free Cash Flow to Equity (FCFE)-based valuation for Litrak’s latest cash balance. The TP is raised to RM3.03 (from RM2.80). Litrak’s share price should continue to be supported by continued speculation of a privatisation.
52 week H | L Price (RM) 3.18 1.56
Major Shareholders (%)
Gamuda 46.2
Employees Provident Fund 6.0
Prudential Unit Trust 2.5
LITRAK is the concessionaire for the LDP Highway. It also holds a 50% stake in the SPRINT Highway.
By OSK188
Analyst: Jeremy Goh
Genm & YTL
Genm & YTL: "I'm stalking the following two. Currently, I have no position in both or their warrants.
Genm Weekly Chart
YTL Weekly Chart
"
Genm Weekly Chart
YTL Weekly ChartWeekly Summary
Weekly Summary: "Another week has gone by. Volume continues to shrink. Weekly momentum getting weaker. Weekly KLCI chart indicates that the trend is still up but with less strength now. If you look at the monthly chart, then you will see a doji. Not a good sign. I think that there shall be a correction towards 1150.
FBM KLCI Weekly Chart
Looking at the sectors, it seems that construction and property are holding up well:
I'm just sitting tight with my positions. Selling the weak ones, and holding the stronger ones. Currently, I have no trade ideas.
"
FBM KLCI Weekly ChartLooking at the sectors, it seems that construction and property are holding up well:
| Malaysia | Monthly | Weekly | Daily | Note |
| FBM KLCI | Up | Up | Up (+) | Weak up. Not at firm ground. |
| Finance | Up | Up | Neutral | Correction. Not at firm ground |
| Construction | Up | Up | Up (+) | Weak up. Not at firm ground. |
| Plantation | Up | Up | Neutral | Not at firm ground. |
| Property | Up | Up | Up (+) | Potential double top. |
| FBM ACE | Up | Up | Neutral | Potential H&S. |
I'm just sitting tight with my positions. Selling the weak ones, and holding the stronger ones. Currently, I have no trade ideas.
PBBANK Accumulation Under Low Volume
PBBANK Accumulation Under Low Volume: "
Base on the chart money is flowing out but the price is holed so this is accumulation under low volume. Something likely to happen in PBBANK, I think it accumulated volume to bounds up.
"
Base on the chart money is flowing out but the price is holed so this is accumulation under low volume. Something likely to happen in PBBANK, I think it accumulated volume to bounds up.
Maybank: After writedowns, time to log profits
Maybank: After writedowns, time to log profits: "After writedowns, time to log profits
By Adeline Paul Raj
Published: 2009/08/27
With the issue of impairment charges settled, Malayan Banking management's focus for the current fiscal year would be earnings deliverance, says an analyst with AmResearch
MALAYAN Banking Bhd (Maybank) (1155), the country's top lender, must focus on delivering earnings at its newly-acquired banks, particularly Bank Internasional Indonesia (BII), now that it has gotten the issue of impairment charges out of the way, analysts said.
The issue of how much impairment charges Maybank would have had to make, particularly for BII, had been one of the biggest things weighing the stock in recent months.
In the end, the charges - which is the difference between what it paid for the banks and their actual fair value - came in within, albeit at the higher end of, analysts' expectations.
Maybank had decided to 'bite the bullet' by taking a huge RM1.97 billion impairment charge for its investments in BII and MCB Bank in Pakistan.
This pushed the group into the red in its final quarter, and re-duced earnings for the full year ended June 30 2009 to just RM692 million, its lowest annual profit in a decade.
With that issue out of the way, AmResearch upgraded its call on Maybank's stock to a 'hold' from 'sell' previously, and raised the target price to RM7.10 from RM4.60.
'With the issue of impairment charges settled, management's focus for (the current fiscal year) would be earnings deliverance,' its banking analyst Fiona Leong said in a research note yesterday.
The stock's share price performance, however, is likely to track the FTSE Bursa Malaysia KLCI index until there is a firm uptrend in operating profits, she added.
She expects Maybank's net profit to rise 18 per cent to RM2.56 billion in the current year and RM2.83 billion in the next. This is after factoring in better-than-expected non-interest income from the treasury operations and capital market-related businesses.
Analysts, however, expect Maybank's return-on-equity (ROE), a measure of how well its re-invested earnings are used to generate additional earnings, to be 'sub-par' over the next two to three years following its expen-sive acquisitions.
They said the management had indicated that it would take a few years before ROE, which stood at just 10 per cent last year, could go back up to pre-acquisition levels of about 14 per cent.
The bank is targeting an ROE of 11 per cent for the current year.
Analysts are also concerned that the group may have to do more cleaning up of its loan books, particularly for BII, in the current year. It already set aside large loan loss provisions of about RM1.7 billion last year compared with RM810 million previously.
'In view of its sub-par ROEs and relatively long gestation period for expensive overseas acquisitions to start contributing meaningfully, we prefer Public Bank and Bumiputra-Commerce for cheaper valuations and comparatively higher ROEs among the larger banks,' OSK Research's analyst Keith Wee said.
OSK maintained its 'neutral' call on the stock, but raised the target price to RM6.20 from RM5.15.
Maybank closed at RM6.47 yesterday, five sen lower than the previous day.
"
By Adeline Paul Raj
Published: 2009/08/27
With the issue of impairment charges settled, Malayan Banking management's focus for the current fiscal year would be earnings deliverance, says an analyst with AmResearch
MALAYAN Banking Bhd (Maybank) (1155), the country's top lender, must focus on delivering earnings at its newly-acquired banks, particularly Bank Internasional Indonesia (BII), now that it has gotten the issue of impairment charges out of the way, analysts said.
The issue of how much impairment charges Maybank would have had to make, particularly for BII, had been one of the biggest things weighing the stock in recent months.
In the end, the charges - which is the difference between what it paid for the banks and their actual fair value - came in within, albeit at the higher end of, analysts' expectations.
Maybank had decided to 'bite the bullet' by taking a huge RM1.97 billion impairment charge for its investments in BII and MCB Bank in Pakistan.
This pushed the group into the red in its final quarter, and re-duced earnings for the full year ended June 30 2009 to just RM692 million, its lowest annual profit in a decade.
With that issue out of the way, AmResearch upgraded its call on Maybank's stock to a 'hold' from 'sell' previously, and raised the target price to RM7.10 from RM4.60.
'With the issue of impairment charges settled, management's focus for (the current fiscal year) would be earnings deliverance,' its banking analyst Fiona Leong said in a research note yesterday.
The stock's share price performance, however, is likely to track the FTSE Bursa Malaysia KLCI index until there is a firm uptrend in operating profits, she added.
She expects Maybank's net profit to rise 18 per cent to RM2.56 billion in the current year and RM2.83 billion in the next. This is after factoring in better-than-expected non-interest income from the treasury operations and capital market-related businesses.
Analysts, however, expect Maybank's return-on-equity (ROE), a measure of how well its re-invested earnings are used to generate additional earnings, to be 'sub-par' over the next two to three years following its expen-sive acquisitions.
They said the management had indicated that it would take a few years before ROE, which stood at just 10 per cent last year, could go back up to pre-acquisition levels of about 14 per cent.
The bank is targeting an ROE of 11 per cent for the current year.
Analysts are also concerned that the group may have to do more cleaning up of its loan books, particularly for BII, in the current year. It already set aside large loan loss provisions of about RM1.7 billion last year compared with RM810 million previously.
'In view of its sub-par ROEs and relatively long gestation period for expensive overseas acquisitions to start contributing meaningfully, we prefer Public Bank and Bumiputra-Commerce for cheaper valuations and comparatively higher ROEs among the larger banks,' OSK Research's analyst Keith Wee said.
OSK maintained its 'neutral' call on the stock, but raised the target price to RM6.20 from RM5.15.
Maybank closed at RM6.47 yesterday, five sen lower than the previous day.
Axiata Q2 profit jumps 44pc
Axiata Q2 profit jumps 44pc: "Axiata Group Bhd (6888), a mobile telecoms group, said second quarter net profit jumped 44 per cent from a year ago, driven by foreign exchange gains and a better showing by its units, especially Celcom.
The net profit of RM526.84 million is also its best quarterly performance since its listing a year ago.Axiata, which has more than 100 million customers spread over seven countries, also thinks it can almost meet its main financial targets for this year.It aims to grow revenue by 6-11 per cent and operating profit or Ebitda by 4-6 per cent, among others.Ebitda, or earnings before interest, tax, depreciation and amortisation, rose 2 per cent to RM1.24 billion from a year ago. Its revenue rose by 7.8 per cent to RM3.16 billion during the period, against RM2.93 billion last year
"
The net profit of RM526.84 million is also its best quarterly performance since its listing a year ago.Axiata, which has more than 100 million customers spread over seven countries, also thinks it can almost meet its main financial targets for this year.It aims to grow revenue by 6-11 per cent and operating profit or Ebitda by 4-6 per cent, among others.Ebitda, or earnings before interest, tax, depreciation and amortisation, rose 2 per cent to RM1.24 billion from a year ago. Its revenue rose by 7.8 per cent to RM3.16 billion during the period, against RM2.93 billion last year
Can The Dow Jones Industrial Average Touches 10,000 Points ?
Can The Dow Jones Industrial Average Touches 10,000 Points ?: "
Basically our share market performance always moves accordingly with the world equities market performance and what we can do right now is to examine the current movement of the Dow Jones Industrial Average.
"
As we can see until now most of the world equities market are following the movement of the Dow Jones Industrial Average. With our current market situation right now moving side ways, we have nothing to cherish about. They seem to be hanging around waiting for any new direction before any attempt to move higher or lower.
Basically our share market performance always moves accordingly with the world equities market performance and what we can do right now is to examine the current movement of the Dow Jones Industrial Average.Based on the chart the DJIA is facing a very strong resistance. The resistance level would be around 9,650 points level given a plus minus of around 50 points. Any attempt to break this Strong Resistance level will bring the Dow Jones Industrial Average back to 10,000 points level. So right now it is quite tricky to play around with the current sentiment as the Dow Jones Industrial Average is doing quite well with the volume traded improving.
Either the Dow Jones Industrial Average will go up or go down; we will have to monitor their current movement these few days. But if we check at the volume done, it seems that they have more opportunity to move higher. But sometimes when the Dow Jones perform quite well our share prices cannot perform and it is quite hard to trade with our current sentiment so dull. If the Strong Resistance cannot be break then it will pull down the world equities market performance.
This is just one of my opinion and we cannot take it that it will happen. It just that we need to share more opinion on the current sentiment.
Broker's Call - 28 August 2009
Broker's Call - 28 August 2009: ".
– Mudajaya (MDJ MK; RM3.39, BUY) – Consolidating in a bullish pennant.
– Time dotCom (TDC MK; RM0.415, BUY) – Bullish breakout.
– CBS Technology (CBS MK; RM0.525, BUY) – New 52-week high seen.
_______________________________________________________________________
Mudajaya (MDJ MK; RM3.39) – BUY
FY09P/E: 14.9x, P/BV: 4.1x
• The stock’s strong uptrend is likely still intact as it appears to be forming a bullish pennant. A pennant is a continuation pattern.
• The negative mode for its indicators shows that the stock is indeed in a consolidation phase. This consolidation phase would likely neutralise the overbought indicators. Once this consolidation is over, prices are expected to kick on higher from here. The next resistance is at RM3.74 and RM3.94-4.00.
• Buy now but put a stop below RM3.23, the lowest point for its pennant. The next support is at RM3.00.
Mudajaya Group Berhad is an investment holding company. The Company, through its subsidiaries, provides civil engineering and building construction, leases plant and machinery, and operates property management and development. Mudajaya also manufactures concrete products, precast concrete, and building materials.
____________________________________________________________________
Time dotCom (TDC MK; RM0.415) – BUY
FY09P/E: N/A, P/BV: 1.1x
• The stock broke out of its consolidation triangle yesterday on strong volume. Furthermore, it took out its moving averages as well. Expect prices to head higher towards RM0.45-0.46 next. RM0.42 is a minor resistance.
• The indicators are looking positive at the moment. The MACD has moved back into positive territory while its RSI has moved above its resistance trend line. Both are positive signals for the stock.
• Buy on weakness with a stop placed at below RM0.39 or RM0.375, depending on trader’s risk tolerance levels.
TIME dotCom Berhad is an investment holding company. The Company, through its subsidiaries, provides voice, data, video, image communication, and payphone services. TIME dotCom also provides and markets Internet services to consumers including World Wide Web, organization and aggregation of content, on-line call center, on-line services, on-net advertising, and virtual data storage.
_____________________________________________________________________
CBS Technology (CBS MK; RM0.525) – BUY
FY09P/E: N/A, P/BV: 2.2x
• The stock has breached its triangle resistance yesterday on strong volume and reached its new 52-week high at RM0.54 before easing off at the close. Nevertheless, prices should continue to make new highs in the coming days.
• Both indicators are supportive of the positive breakout. The MACD has confirmed its golden cross while its RSI has hooked upwards.
• Aggressive traders may want to buy now but place a stop just below the triangle support at RM0.455-0.465. The stock could soon test its resistance at RM0.59-0.615.
CBS Technology Berhad is an investment holding company. The Company, through its subsidiaries, provides specialized system integration solutions as well as sells, distributes, and develops software solutions.
"
– Mudajaya (MDJ MK; RM3.39, BUY) – Consolidating in a bullish pennant.
– Time dotCom (TDC MK; RM0.415, BUY) – Bullish breakout.
– CBS Technology (CBS MK; RM0.525, BUY) – New 52-week high seen.
_______________________________________________________________________
Mudajaya (MDJ MK; RM3.39) – BUY
FY09P/E: 14.9x, P/BV: 4.1x
• The stock’s strong uptrend is likely still intact as it appears to be forming a bullish pennant. A pennant is a continuation pattern.
• The negative mode for its indicators shows that the stock is indeed in a consolidation phase. This consolidation phase would likely neutralise the overbought indicators. Once this consolidation is over, prices are expected to kick on higher from here. The next resistance is at RM3.74 and RM3.94-4.00.
• Buy now but put a stop below RM3.23, the lowest point for its pennant. The next support is at RM3.00.
Mudajaya Group Berhad is an investment holding company. The Company, through its subsidiaries, provides civil engineering and building construction, leases plant and machinery, and operates property management and development. Mudajaya also manufactures concrete products, precast concrete, and building materials.
____________________________________________________________________
Time dotCom (TDC MK; RM0.415) – BUY
FY09P/E: N/A, P/BV: 1.1x
• The stock broke out of its consolidation triangle yesterday on strong volume. Furthermore, it took out its moving averages as well. Expect prices to head higher towards RM0.45-0.46 next. RM0.42 is a minor resistance.
• The indicators are looking positive at the moment. The MACD has moved back into positive territory while its RSI has moved above its resistance trend line. Both are positive signals for the stock.
• Buy on weakness with a stop placed at below RM0.39 or RM0.375, depending on trader’s risk tolerance levels.
TIME dotCom Berhad is an investment holding company. The Company, through its subsidiaries, provides voice, data, video, image communication, and payphone services. TIME dotCom also provides and markets Internet services to consumers including World Wide Web, organization and aggregation of content, on-line call center, on-line services, on-net advertising, and virtual data storage.
_____________________________________________________________________
CBS Technology (CBS MK; RM0.525) – BUY
FY09P/E: N/A, P/BV: 2.2x
• The stock has breached its triangle resistance yesterday on strong volume and reached its new 52-week high at RM0.54 before easing off at the close. Nevertheless, prices should continue to make new highs in the coming days.
• Both indicators are supportive of the positive breakout. The MACD has confirmed its golden cross while its RSI has hooked upwards.
• Aggressive traders may want to buy now but place a stop just below the triangle support at RM0.455-0.465. The stock could soon test its resistance at RM0.59-0.615.
CBS Technology Berhad is an investment holding company. The Company, through its subsidiaries, provides specialized system integration solutions as well as sells, distributes, and develops software solutions.
A weaker 2Q for KNM
A weaker 2Q for KNM: "
"
Written by Nadia S Hassan
Thursday, 27 August 2009 22:06
KUALA LUMPUR: Oil and gas player KNM GROUP BHD [] saw its net profit drop by 25.8% year-on-year for its second quarter ending June 30, 2009, to RM71.42 million from RM96.29 million.
Revenue for the period came in lower at RM439.26 million compared to RM599.4 million that was posted for the previous year’s corresponding quarter.
On a quarterly basis, the group saw revenue shrink 16.4% to RM439.26 million while profit before tax fell 47.74% to RM65.3 million. The company said this was due to the global economic slowdown.
On a half-year basis, KNM saw an increase for its net profit to RM169.87 million. This was 12.9% higher compared to 1HFY2008 where KNM reported a net profit of RM150.42 million. Revenue had likewise increased to RM964.71 million for 1HFY2009 from RM930.62 million.
However, the group saw its cash flow as at the end of June decline by 12% to RM476.05 million compared to the preceding year where the group’s cash and cash equivalents had come to RM541.05 million.
KNM is expecting the rest of the year to be profitable for the group. No dividend was declared for the quarter.
Tanjong Offshore
Tanjong Offshore: "
"
TANJUNG Offshore posted weak results for the second quarter of 2009 (2QFYDec2009), falling short of expectations due to an unexpected loss at its UK-based subsidiary, Citech Energy Recovery Systems UK Ltd.
Citech reported a loss of £1.4 million, or about RM8.02 million, due to cost overruns and late delivery charges incurred in the manufacturing of waste heat recovery units. Tanjung had acquired the company in August 2008.
Due to these steep losses, Tanjung's pre-tax profit for 2Q09 halved year-on-year (y-o-y) to RM4.2 million, and fell some 63% from RM11.4 million in 1Q09. Excluding Citech's losses, profits for the quarter would have been flat and in line with our earlier expectations.
Revenue for the quarter doubled y-o-y to RM171.7 million, while net profit fell 64% y-o-y to RM2.8 million. For the first half of 2009 (1H09), revenue doubled to RM358.5 million, pre-tax profit rose 9.4% to RM15.6 million while net profit declined 3.9% to RM12.7 million.
The significant increase in revenue was due largely to the expansion of its marine vessel fleet — from seven to 11 vessels, with the delivery of MV Tanjung Puteri 1, MV Tanjung Puteri 2, MV Tanjung Gaya and MV Tanjung Gelang. There was also an increase in the supply of engineering equipment contracts. However, they could not offset the impact of Citech's losses.
Over the last quarter, Tanjung's net debt increased from RM398.5 million to RM448.7 million in June 2009 due to funding for its five new vessels, which will be delivered ahead of schedule. While gearing is high at 137%, they are manageable as the bulk of borrowings is long term and used to fund its vessels, which have matching cash flows from long-term charters.
Positive industry outlook
Crude oil prices have doubled from 4Q08's lows to around US$74 (RM261.22) per barrel. We expect crude oil prices to stay relatively high due to fears over inflation and the weakening US dollar, although this may be tempered by US regulatory proposals to limit commodities trading to curb speculation.
With crude oil prices significantly above the 'breakeven' level of US$40 per barrel for viable oil and gas exploration activities — and expected to remain high — the outlook for oil and gas-related companies has also improved markedly.
Tanjung focuses on vessels and shallow water exploration-related services where breakeven levels are even lower and there is stronger demand. Its vessel charter rates have also remained stable at US$1.90-US$2 per bhp, despite the volatility in crude oil prices and other shipping rates.
But Citech will remain a drag
Unfortunately for Tanjung, losses at its UK arm Citech dragged earnings down sharply in 2Q09, and will likely continue to do so until 2Q10.
While Tanjung has beefed up vigilance and management efforts at Citech, whose plant is located in Hull, we understand the losses will continue for the next year due to variation orders, late delivery charges and cost overruns on existing orders, as well as other expenses.
We are factoring in losses of RM25 million from Citech for the full year (with approximately RM8.1 million already recorded in 2Q09) and a further RM15 million of losses in 2010.
Malaysian operations faring well
Notwithstanding the unexpected problems and losses at Citech, Tanjung's Malaysian operations continue to fare very well.
Tanjung currently has a fleet of 11 vessels, including MV Tanjung Gelang, which was delivered in May 2009. Its pipeline of five new vessels will be delivered well ahead of schedule.
The company is thus assured of locked-in earnings over the next few years, from the vessels as well as its maintenance order book, two oil rig contracts (SERF and THE 208) which are for a duration of 3.5 to five years, and a Mobile Offshore Production Unit (MOPU).
Out of the 11 existing vessels, 10 vessels are on long-term charters of typically three to four years (except for MV Tanjung Gelang which is for a year), while MV Tanjung Manis (leased to Exxon Mobil) remains on spot charter basis.
Tanjung has another five vessels on order, which will bring its fleet size to 16 by the end of this year. The five new vessels will be delivered well ahead of schedule — of up to a year.
Three of the new vessels — MV Tanjung Biru 1, MV Tanjung Dahan 1 and MV Tanjung Sari — will be delivered by end-October 2009. The remaining two — MV Tanjung Biru 2 and MV Tanjung Dahan 2 — will be delivered by end-November 2009, as compared with the earlier target of early 2011.
Earnings forecasts reduced
Despite the five vessels being commissioned well ahead of schedule, they will not be able to offset completely the losses at Citech. We expect net profit to decline to RM20.5 million in 2009, compared with RM32 million in 2008. For 2010, we expect net profit to improve to RM31 million.
We remain optimistic of Tanjung's longer-term growth prospects. However, continued losses at Citech could affect investor sentiment in the coming quarters until signs of a turnaround there are evident. At RM1.31, its shares are trading at price-to-earnings (P/E) of 15.8 and 10.4 times for 2009-10 and around its latest book value of RM1.34.
Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.
KNM GROUP BHD saw its net profit drop by 25.8%
KNM GROUP BHD saw its net profit drop by 25.8%: "
KNM GROUP BHD saw its net profit drop by 25.8% year-on-year for its second quarter ending June 30, 2009, to RM71.42 million from RM96.29 million and no dividend was declared for the quarter.
However this bad news is already reviewed on KNM share price by drop to RM0.77 and low volume. Now the bad news had roll out and soon I think likely the share price will gains on oil rebound in coming next week.
Related Post
"
KNM GROUP BHD saw its net profit drop by 25.8% year-on-year for its second quarter ending June 30, 2009, to RM71.42 million from RM96.29 million and no dividend was declared for the quarter.
However this bad news is already reviewed on KNM share price by drop to RM0.77 and low volume. Now the bad news had roll out and soon I think likely the share price will gains on oil rebound in coming next week.
Related Post
AXIATA Is About To Test RM3.40 Level
AXIATA Is About To Test RM3.40 Level: "
AXIATA is on the way moving up since drop to lowest at RM1.66 level. Till now the share price bounds up back to RM3.10 yesterday and about 86.7% incrence. With the news Axiata Group Bhd posted net profit of RM526.84 million in the second quarter ended June 30, up 43% from RM366.64 million a year ago will likely push Axiata share price to move up.
Base on the chart RSI and Wm Axiata is about to test RM3.40 level.
"
AXIATA is on the way moving up since drop to lowest at RM1.66 level. Till now the share price bounds up back to RM3.10 yesterday and about 86.7% incrence. With the news Axiata Group Bhd posted net profit of RM526.84 million in the second quarter ended June 30, up 43% from RM366.64 million a year ago will likely push Axiata share price to move up.
Base on the chart RSI and Wm Axiata is about to test RM3.40 level.
PMETAL Testing RM1.20 Level
PMETAL Testing RM1.20 Level: "
Press Metal (PMetal) just drop back to 1st support line at RM1.20, once this level broken next support line will be around RM1.05. Base on the chart if happen this kind of chart patten, the share price will bound up and likely to broken RM1.40 level. However how far and how fast it bound still depend on volume.
"
Press Metal (PMetal) just drop back to 1st support line at RM1.20, once this level broken next support line will be around RM1.05. Base on the chart if happen this kind of chart patten, the share price will bound up and likely to broken RM1.40 level. However how far and how fast it bound still depend on volume.
Lion Forest Industries
Lion Forest Industries: "♦ Below expectations. LFI FY06/09 core net profit of RM35.8m was 8% below our expectation of RM38.8m due to its share of losses from associates amounting to RM6.1m.
♦ EI from acquisition of SCB. Total net profit of RM183.3m was due to negative goodwill amounting to RM175.4m arising from its acquisition of 84.1% equity interest in Silverstone Corporation Bhd (SCB) that was completed end-08. The Group has benefited from gains from the acquisition of SCB’s debts, dividend income from associates and foreign exchange.
♦ Notable improvement. Albeit slightly lower than expectation, the company’s profitability had improved significantly from a loss position (- RM8.7m) in FY08 attributable to 1) 4Q09 revenue increase of 16% qoq and 68% yoy arising from better demand on the back of improving sentiment and economic recovery; and 2) positive operating margins of 8.4% for FY09 from operating loss in FY08. The loss in FY08 was dragged by its tyre division, which has turned around after the acquisition of SCB.
♦ Outlook. SCB’s acquisition had brought a more positive outlook to the company. SCB is involved in the manufacturing and sale of tyres, sale and distribution of Suzuki motorcycles and motor vehicles, manufacturing of motorcycle parts and accessories. We expect demand for the tyre division to improve further in FY10 as we are anticipating better sales for motor vehicles, in line with our TIV projection growth of 6.4%. We expect relatively stable movement for rubber price in 2010, and this, in our view, could help to cushion inflationary pressure on course amid economic recovery. We also expect its building material division to benefit from the stimulus packages that have been rolled out locally and globally.
♦ Risks. The risks include: 1) lower-than-expected demand for the tyre and building materials businesses; and 2) lower-than-expected margins from higher raw material costs.
♦ Forecasts. In line with the management’s expectation of better performance in FY10, we have raised our FY10-11 revenue by 6-7% and expect operating margins to improve to 8% vs. our earlier expectation of
4-5% and 8.4% in FY09 on the back of improved business operating environment. Accordingly, our FY10-11 earnings forecasts were raised by 26-69%. We have also introduced our new FY12 forecasts.
♦ Investment case. Consequently, our fair value has been revised up to RM1.23 (from RM0.80/share) based on unchanged 7x CY10 EPS. Hence, we are upgrading our recommendation on the stock from Underperform to Outperform.
52wk Price Range (RM) 0.285-0.94
Major Shareholders: (%)
Amsteel Mills Sdn Bhd 58.2
Lion Industries Corp. Bhd 21.4
By RHBinvest
Analyst: Low Yee Huap, CFA
"
♦ EI from acquisition of SCB. Total net profit of RM183.3m was due to negative goodwill amounting to RM175.4m arising from its acquisition of 84.1% equity interest in Silverstone Corporation Bhd (SCB) that was completed end-08. The Group has benefited from gains from the acquisition of SCB’s debts, dividend income from associates and foreign exchange.
♦ Notable improvement. Albeit slightly lower than expectation, the company’s profitability had improved significantly from a loss position (- RM8.7m) in FY08 attributable to 1) 4Q09 revenue increase of 16% qoq and 68% yoy arising from better demand on the back of improving sentiment and economic recovery; and 2) positive operating margins of 8.4% for FY09 from operating loss in FY08. The loss in FY08 was dragged by its tyre division, which has turned around after the acquisition of SCB.
♦ Outlook. SCB’s acquisition had brought a more positive outlook to the company. SCB is involved in the manufacturing and sale of tyres, sale and distribution of Suzuki motorcycles and motor vehicles, manufacturing of motorcycle parts and accessories. We expect demand for the tyre division to improve further in FY10 as we are anticipating better sales for motor vehicles, in line with our TIV projection growth of 6.4%. We expect relatively stable movement for rubber price in 2010, and this, in our view, could help to cushion inflationary pressure on course amid economic recovery. We also expect its building material division to benefit from the stimulus packages that have been rolled out locally and globally.
♦ Risks. The risks include: 1) lower-than-expected demand for the tyre and building materials businesses; and 2) lower-than-expected margins from higher raw material costs.
♦ Forecasts. In line with the management’s expectation of better performance in FY10, we have raised our FY10-11 revenue by 6-7% and expect operating margins to improve to 8% vs. our earlier expectation of
4-5% and 8.4% in FY09 on the back of improved business operating environment. Accordingly, our FY10-11 earnings forecasts were raised by 26-69%. We have also introduced our new FY12 forecasts.
♦ Investment case. Consequently, our fair value has been revised up to RM1.23 (from RM0.80/share) based on unchanged 7x CY10 EPS. Hence, we are upgrading our recommendation on the stock from Underperform to Outperform.
52wk Price Range (RM) 0.285-0.94
Major Shareholders: (%)
Amsteel Mills Sdn Bhd 58.2
Lion Industries Corp. Bhd 21.4
By RHBinvest
Analyst: Low Yee Huap, CFA
Quick Look At LCL's Earnings
Quick Look At LCL's Earnings: "Last blogged LCL Hit By Arabtec Claims!
LCL reported its earnings today.
"
LCL reported its earnings today.
What's more worrying is when we compare the balance sheet as posted in the earlier posting LCL Hit By Arabtec Claims!, LCL's balance got even weaker.
Cash balances is now only 16.4mil and receivables has increased to 270.501 million. (Given the massive issues in Dubai housing market, should one discount this issue? Perhaps a chunk of these receivables might be doubtful? ) (Compare the previous balance sheet table shown here: here )
And loans had increased too!
STEEL COUNTER- WHICH ONE IS VALUE BUY
STEEL COUNTER- WHICH ONE IS VALUE BUY: "
Which one offer the best Value, at the cheapest price !
Maybe the following statistic will tell you more:-
Steel Counter/Mkt price@27/8/09/ NTA / Price/NTA ratio / latest Qtr EPS
1) Ann Joo-- /----------2.27-------/ 1.69 /----- 1.34-------- / 0.44 sen
2) Masteel --/--------- 0.91------- / 2.02/ ------0.45------- / -1.01 sen
3) CSC----- /--------- 1.06------- / 1.88 /---- 0.56--------/ 2.53 sen
4) Kinstel ---/--------- 0.945------ / 0.81 /----- 1.17-------- / -0.86 sen
5) Choo Bee / --------1.60 -------/ 3.37 /---- 0.47-------- / 6.16 sen
6) LionCor / -----------0.41--------/ 0.28 / -----1.46 --------/ -21.39 sen
7) LionDiv / -----------0.555-------/1.83 / ------0.30-------/ -25.97 sen
8) LionInd /-----------1.59---------/3.83 /------0.42--------/ -11.07 sen
(Picture: Penang Street)
Which one offer the best Value, at the cheapest price !
Maybe the following statistic will tell you more:-
Steel Counter/Mkt price@27/8/09/ NTA / Price/NTA ratio / latest Qtr EPS
1) Ann Joo-- /----------2.27-------/ 1.69 /----- 1.34-------- / 0.44 sen
2) Masteel --/--------- 0.91------- / 2.02/ ------0.45------- / -1.01 sen
3) CSC----- /--------- 1.06------- / 1.88 /---- 0.56--------/ 2.53 sen
4) Kinstel ---/--------- 0.945------ / 0.81 /----- 1.17-------- / -0.86 sen
5) Choo Bee / --------1.60 -------/ 3.37 /---- 0.47-------- / 6.16 sen
6) LionCor / -----------0.41--------/ 0.28 / -----1.46 --------/ -21.39 sen
7) LionDiv / -----------0.555-------/1.83 / ------0.30-------/ -25.97 sen
8) LionInd /-----------1.59---------/3.83 /------0.42--------/ -11.07 sen
(Picture: Penang Street)
AdSense
"
KPJ may see further upside
KPJ may see further upside: "Background
KPJ Healthcare Bhd ('KPJ') is the largest private healthcare provider in Malaysia. It has 18 hospitals in Malaysia as well as 6 hospitals overseas.
Recent Financial Results
PJ has just announced its 2Q2009 results. Its net profit increased by 13.8% q-o-q or 23.2% y-o-y to RM24.9 million while turnover increased by 9.5% q-o-q or 19.5% y-o-y to RM371 million.
Table 1: KPJ's 8 quarterly results
From Chart 1, we can see that KPJ's top-line & bottom-line has been rising steadily over the past 10 quarters.
Chart 1: KPJ's 10 quarterly results
Valuation
KPJ (closed at RM3.43 yesterday) is trading at trailing PE of 8.6 times (based on last 4 quarters EPS of 40 sen) or at a Price to Book of 1.1 times (based on NTA per share of RM2.99). At these multiples, KPJ is still attractive.
Technical Outlook
KPJ appears to have just broken above its medium-term downtrend line at RM3.40. With this upside breakout, KPJ may test the resistance at RM3.75 & then RM4.00.
Chart 2: KPJ's weekly chart as at Aug 26, 2009 (Source: Quickcharts)
Conclusion
Based on attractive valuation, steady financial performance and bullish technical outlook, KPJ is a both a trading BUY or long-term BUY.
"
KPJ Healthcare Bhd ('KPJ') is the largest private healthcare provider in Malaysia. It has 18 hospitals in Malaysia as well as 6 hospitals overseas.
Recent Financial Results
PJ has just announced its 2Q2009 results. Its net profit increased by 13.8% q-o-q or 23.2% y-o-y to RM24.9 million while turnover increased by 9.5% q-o-q or 19.5% y-o-y to RM371 million.
Table 1: KPJ's 8 quarterly results
From Chart 1, we can see that KPJ's top-line & bottom-line has been rising steadily over the past 10 quarters.
Chart 1: KPJ's 10 quarterly results
Valuation
KPJ (closed at RM3.43 yesterday) is trading at trailing PE of 8.6 times (based on last 4 quarters EPS of 40 sen) or at a Price to Book of 1.1 times (based on NTA per share of RM2.99). At these multiples, KPJ is still attractive.
Technical Outlook
KPJ appears to have just broken above its medium-term downtrend line at RM3.40. With this upside breakout, KPJ may test the resistance at RM3.75 & then RM4.00.
Chart 2: KPJ's weekly chart as at Aug 26, 2009 (Source: Quickcharts)
Conclusion
Based on attractive valuation, steady financial performance and bullish technical outlook, KPJ is a both a trading BUY or long-term BUY.
AXIATA 44 % improve
AXIATA 44 % improve: "KUALA LUMPUR (Dow Jones)--Axiata Group Bhd. (6888.KU) posted Thursday a 44% improvement in its second-quarter earnings from a year earlier due to a MYR532 million foreign exchange gain and higher revenue from its key operating units.
The Malaysia-based mobile operator said in a filing that its net profit for the three months ended June 30 rose to MYR526.8 million from MYR366.6 million a year earlier.
Revenue increased to MYR3.16 billion from MYR2.93 billion previously due primarily to higher income from its Malaysian unit Celcom and Axiata Bangladesh.
The company said its Indonesian unit Excelcomindo also reported higher revenue, but showed a marginal 2% slip on consolidation due to the depreciation of the rupiah against ringgit.
Axiata said it expects the group's full-year revenue and earnings before interest, depreciation and amortization, or Ebitda, growth will be at the higher end of the key performance indicator range and its annualized return on equity will be moderately above earlier guidance.
The company earlier announced target revenue growth between 6% and 11% this year, and set target growth for earnings before interest, depreciation and amortization, or Ebitda, between 4% and 6%, aiming for a 4% average return on equity.
Axiata also said it will continue to focus on improving operational efficiencies at major subsidiaries and 'preserving the momentum of sequential improvements.'
For the first half of the year, Axiata said net profit was 23% lower at MYR590.7 million.
-By K.P. Lee, Dow Jones Newswires; (603) 2026 1233; kwan-por.lee@dowjones.com
"
The Malaysia-based mobile operator said in a filing that its net profit for the three months ended June 30 rose to MYR526.8 million from MYR366.6 million a year earlier.
Revenue increased to MYR3.16 billion from MYR2.93 billion previously due primarily to higher income from its Malaysian unit Celcom and Axiata Bangladesh.
The company said its Indonesian unit Excelcomindo also reported higher revenue, but showed a marginal 2% slip on consolidation due to the depreciation of the rupiah against ringgit.
Axiata said it expects the group's full-year revenue and earnings before interest, depreciation and amortization, or Ebitda, growth will be at the higher end of the key performance indicator range and its annualized return on equity will be moderately above earlier guidance.
The company earlier announced target revenue growth between 6% and 11% this year, and set target growth for earnings before interest, depreciation and amortization, or Ebitda, between 4% and 6%, aiming for a 4% average return on equity.
Axiata also said it will continue to focus on improving operational efficiencies at major subsidiaries and 'preserving the momentum of sequential improvements.'
For the first half of the year, Axiata said net profit was 23% lower at MYR590.7 million.
-By K.P. Lee, Dow Jones Newswires; (603) 2026 1233; kwan-por.lee@dowjones.com
Broker's Call - 27 August 2009
Broker's Call - 27 August 2009: ".
– Malaysian Resources Corp (MRC MK; RM1.29, SELL) – Still below its moving averages.
– Petra Perdana (PETR MK; RM2.49, SELL) – Potentially more downside to come.
– Oilcorp (OILC MK; RM0.415, BUY) – Triangle breakout.
_______________________________________________________________________
Malaysian Resources Corp (MRC MK; RM1.29) – SELL
FY10P/E: 27.5x, P/BV: 1.8x
• The stock’s uptrend since January is still intact, barely. Prices are currently sitting just above its channel support at RM1.27-1.28. A firm break below this support would signal the end of its uptrend.
• Furthermore, it is trading below its moving averages. Both of its indicators show negative divergences. There is also a small chance that a double top could be forming. Investors would have to be really careful here.
• Continue to take profit on rallies as upside is likely to be capped in the near term by it moving averages at RM1.32 and RM1.38 while its middle band resistance is at RM1.50.
Malaysian Resources Corporation Berhad is an investment holding company. Through its subsidiaries, it provides construction and engineering services, multimedia, property development and management, information technology services, and independent power producer. Malaysian Resources also manufactures and sells ceramic tiles and pre-stressed spun concrete piles.
_________________________________________________________________________
Petra Perdana (PETR MK; RM2.49) – SELL
FY10P/E: 6.8x, P/BV: 1.4x
• The long black candles since the breakdown from its bearish flag pattern suggest that sellers are going into overdrive. A break below the RM2.40 support levels could push the stock back down towards the RM2.17 and RM2.00 support levels next.
• The indicators would be undoubtedly bearish given the two days of selling. However, its RSI has now fallen into oversold territory.
• Despite it being oversold, we still expect prices to fall further. There may be a few minor rebounds along the way. Sell on any rebound as the resistance at RM2.70 and RM2.81 is likely to cap the gains.
Petra Perdana Berhad provides engineering and maintenance services, packaging, fabrication and supplies engineered equipments. The company also has operation in information technology services for oil and gas, power generation and other heavy industries.
______________________________________________________________________
Oilcorp (OILC MK; RM0.415) – BUY
FY09P/E: N/A, P/BV: 0.4x
• The stock has breached its triangle resistance yesterday on strong volume. It needs to take out the moving averages, currently at RM0.42 before the bulls can take control again. If successful, the stock could climb to retest RM0.50 again next.
• Both indicators are supportive of the positive breakout. The MACD is about to confirm its golden cross while its RSI has just moved above its resistance trend line.
• For now, aggressive traders may want to buy now but place a stop just below the triangle support at RM0.38-0.39. Get out quick if this support breaks down.
Oilcorp Berhad is an investment holding company. The company, through its subsidiaries, provides engineering services to oil and gas, petrochemical, power generation, and semiconductor industries. Oilcorp also provides property development and investment as well as operates resort.
"
– Malaysian Resources Corp (MRC MK; RM1.29, SELL) – Still below its moving averages.
– Petra Perdana (PETR MK; RM2.49, SELL) – Potentially more downside to come.
– Oilcorp (OILC MK; RM0.415, BUY) – Triangle breakout.
_______________________________________________________________________
Malaysian Resources Corp (MRC MK; RM1.29) – SELL
FY10P/E: 27.5x, P/BV: 1.8x
• The stock’s uptrend since January is still intact, barely. Prices are currently sitting just above its channel support at RM1.27-1.28. A firm break below this support would signal the end of its uptrend.
• Furthermore, it is trading below its moving averages. Both of its indicators show negative divergences. There is also a small chance that a double top could be forming. Investors would have to be really careful here.
• Continue to take profit on rallies as upside is likely to be capped in the near term by it moving averages at RM1.32 and RM1.38 while its middle band resistance is at RM1.50.
Malaysian Resources Corporation Berhad is an investment holding company. Through its subsidiaries, it provides construction and engineering services, multimedia, property development and management, information technology services, and independent power producer. Malaysian Resources also manufactures and sells ceramic tiles and pre-stressed spun concrete piles.
_________________________________________________________________________
Petra Perdana (PETR MK; RM2.49) – SELL
FY10P/E: 6.8x, P/BV: 1.4x
• The long black candles since the breakdown from its bearish flag pattern suggest that sellers are going into overdrive. A break below the RM2.40 support levels could push the stock back down towards the RM2.17 and RM2.00 support levels next.
• The indicators would be undoubtedly bearish given the two days of selling. However, its RSI has now fallen into oversold territory.
• Despite it being oversold, we still expect prices to fall further. There may be a few minor rebounds along the way. Sell on any rebound as the resistance at RM2.70 and RM2.81 is likely to cap the gains.
Petra Perdana Berhad provides engineering and maintenance services, packaging, fabrication and supplies engineered equipments. The company also has operation in information technology services for oil and gas, power generation and other heavy industries.
______________________________________________________________________
Oilcorp (OILC MK; RM0.415) – BUY
FY09P/E: N/A, P/BV: 0.4x
• The stock has breached its triangle resistance yesterday on strong volume. It needs to take out the moving averages, currently at RM0.42 before the bulls can take control again. If successful, the stock could climb to retest RM0.50 again next.
• Both indicators are supportive of the positive breakout. The MACD is about to confirm its golden cross while its RSI has just moved above its resistance trend line.
• For now, aggressive traders may want to buy now but place a stop just below the triangle support at RM0.38-0.39. Get out quick if this support breaks down.
Oilcorp Berhad is an investment holding company. The company, through its subsidiaries, provides engineering services to oil and gas, petrochemical, power generation, and semiconductor industries. Oilcorp also provides property development and investment as well as operates resort.
Maybank sees much better FY10
Maybank sees much better FY10: "Maybank sees much better FY10
Tags: An Binh Bank Bank Internasional Indonesia BII commercial banking Corporate banking Datuk Seri Abdul Wahid Omar FY10 Impairment charge LEAP30 Maybank MCB Bank Ltd NPLs Overseas acquisitions SME
Written by Ellina Badri
Wednesday, 26 August 2009 11:01
KUALA LUMPUR: MALAYAN BANKING BHD [] (Maybank) is looking forward to a better performance in the financial year ending June 30, 2010 (FY10), driven by its domestic commercial banking business and its international operations, especially in its 97.5%-owned Bank Internasional Indonesia (BII).
This follows a 76% year-on-year decline in net profit to RM691.88 million in FY09, mainly due to impairment charges stemming from its overseas acquisitions.
Revenue grew 8.92% to RM17.59 billion in FY09, while earnings per share fell to 12 sen from 53.32 sen. It declared a final dividend of eight sen per share less tax.
Maybank president and CEO Datuk Seri Abdul Wahid Omar said the group’s management was confident of a significantly improved performance in FY10, driven by the economic recovery and broad-based growth.
“FY09 was a challenging year for Maybank for three reasons. Firstly, we had to deal with the global financial crisis, which ultimately affected the global economy and to that extent, Malaysia has not been spared from an economic perspective.
“Secondly, we had to deal with various issues surrounding our three major acquisitions, in BII, MCB Bank Ltd and An Binh Bank.
Abdul Wahid (left) and CFO Khairussaleh Ramli at the press conference to announce Maybank’s financial results yesterday. Photo by Mohd Izwan Mohd Nazam
“Thirdly, we had to raise significant long-term capital, both in the form of debt and equity, totalling some RM15.1 billion, in a very challenging environment,” Maybank president and CEO Datuk Seri Abdul Wahid Omar told reporters here yesterday.
In 4QFY09, the bank posted a RM1.12 billion net loss, against a RM703.21 million net profit in 4QFY08. Revenue rose 8.24% to RM4.86 billion.
The bank had acquired BII, a 20% stake in Pakistan’s MCB Bank and 15% in Vietnam’s An Binh Bank last year. Wahid said Maybank was awaiting approval from Vietnam’s prime minister for it to raise its stake in An Binh Bank to 20%, which could be forthcoming in the next two weeks.
The group’s FY09 performance was hit by an impairment charge of RM1.62 billion on goodwill of the group from BII’s operations and an impairment loss of RM353 million in MCB.
However, Wahid said based on its purchase price allocation exercise undertaken in accordance with Financial Reporting Standard 3 (FRS3, for business combination), and FRS 138 (intangible assets guidelines), in relation to its BII and MCB acquisitions, Maybank did not expect to make any further impairments on the acquisitions.
On why the banking group’s core net profit for FY09 was lower than FY08’s RM2.93 billion, even after stripping out the impairment charges, Wahid said this was due to a RM445 million interest charge on its issuance of RM9.1 billion in capital securities and subordinated debt, higher loan loss provisions, slower capital market activities and lower income from its insurance arm.
Its loan loss provisions were 109.7% higher, at RM1.7 billion, due to higher provisions of RM401.4 million at Maybank, RM121.2 million at its subsidiaries, and from the consolidation of BII’s loan loss provisions for the first time in FY09, by RM366.2 million.
Despite the higher provisions, the group achieved higher loan loss coverage in FY09, which stood at 112.9% as at June 30, compared with 101.1% in FY08.
Also, notwithstanding its various setbacks, the banking group posted a 9% higher net interest income of RM5.92 billion in FY09, driven by higher loans growth and improved lending margins in BII. Its net interest margins, meanwhile, remained relatively stable at 2.72%.
Non-interest income grew to RM3.38 billion in FY09 from RM3.17 billion in FY08. Overhead costs, however, grew to RM5.56 billion from RM4.25 billion, which also included RM584 million overhead costs from BII.
Loans growth at its Malaysian operations rose 6.4%, while overseas loans grew 28.9%. Asset quality continued to improve, with its net non-performing loan (NPL) ratio declining to 1.64% as at June 30, from 1.92% in June 2008.
Wahid said while Maybank had braced for a deterioration in asset quality, it had also taken steps to ensure it did not occur or worsen. He added that while it remained cautious on any uptick in NPLs, it was expected to be manageable.
He also said it could see higher NPLs from small and medium-sized enterprises, but the ratio was not expected to go beyond 2%.
Its core capital ratio and risk-weighted capital ratio, after deducting dividend payable, stood at 10.81% and 14.81%, respectively.
Of its international portfolio, the Singapore operations accounted for 61.9% of total loans, followed by Indonesia with 19.6%.
Pre-tax profit at its Singapore arm grew 5.9% to S$247.7 million, driven by a 24.2% increase in fund-based income. Provisions there rose 42.7%, but the gross NPL ratio decreased to 1%.
MCB reported a pre-tax profit of RM92.4 million, as total income grew 34.5% while its gross NPL ratio stood at 7.6%.
BII has yet to announce its results for the period ended June 30, 2009, but Wahid said the Indonesian bank had made a small contribution to the group’s FY09 results.
On Maybank’s plans for BII, he said with its full management team and growth strategies now in place, it was expected to be profitable in the future.
Wahid said after the bank had turned around its motor financing business this year, it could focus on strengthening its consumer, SME and corporate banking segments.
Meanwhile, on the group’s LEAP30 transformation plan embarked upon last year, he said as at end-June, total financial benefits from the initiatives amounted to RM40 million in pre-tax profit contribution, in addition to RM143 million cost savings.
Wahid said Maybank would launch four more initiatives before year-end, following the 16 launched earlier.
The new measures were the upgrading of its commercial banking model, strengthening of its equity capital markets, brokerage and merger and acquisition capabilities, establishing governance and operating model for its international businesses, and capturing value from BII, he said.
He added that beyond its domestic operations, it would focus on driving performance at BII, with particular emphasis on loans growth in the fast-growing Indonesian economy. He noted that the banking industry there had traditionally grown at a faster rate than the gross domestic product.
http://www.theedgemalaysia.com/business-news/148087-maybank-sees-much-better-fy10.html
"
Tags: An Binh Bank Bank Internasional Indonesia BII commercial banking Corporate banking Datuk Seri Abdul Wahid Omar FY10 Impairment charge LEAP30 Maybank MCB Bank Ltd NPLs Overseas acquisitions SME
Written by Ellina Badri
Wednesday, 26 August 2009 11:01
KUALA LUMPUR: MALAYAN BANKING BHD [] (Maybank) is looking forward to a better performance in the financial year ending June 30, 2010 (FY10), driven by its domestic commercial banking business and its international operations, especially in its 97.5%-owned Bank Internasional Indonesia (BII).
This follows a 76% year-on-year decline in net profit to RM691.88 million in FY09, mainly due to impairment charges stemming from its overseas acquisitions.
Revenue grew 8.92% to RM17.59 billion in FY09, while earnings per share fell to 12 sen from 53.32 sen. It declared a final dividend of eight sen per share less tax.
Maybank president and CEO Datuk Seri Abdul Wahid Omar said the group’s management was confident of a significantly improved performance in FY10, driven by the economic recovery and broad-based growth.
“FY09 was a challenging year for Maybank for three reasons. Firstly, we had to deal with the global financial crisis, which ultimately affected the global economy and to that extent, Malaysia has not been spared from an economic perspective.
“Secondly, we had to deal with various issues surrounding our three major acquisitions, in BII, MCB Bank Ltd and An Binh Bank.
Abdul Wahid (left) and CFO Khairussaleh Ramli at the press conference to announce Maybank’s financial results yesterday. Photo by Mohd Izwan Mohd Nazam
“Thirdly, we had to raise significant long-term capital, both in the form of debt and equity, totalling some RM15.1 billion, in a very challenging environment,” Maybank president and CEO Datuk Seri Abdul Wahid Omar told reporters here yesterday.
In 4QFY09, the bank posted a RM1.12 billion net loss, against a RM703.21 million net profit in 4QFY08. Revenue rose 8.24% to RM4.86 billion.
The bank had acquired BII, a 20% stake in Pakistan’s MCB Bank and 15% in Vietnam’s An Binh Bank last year. Wahid said Maybank was awaiting approval from Vietnam’s prime minister for it to raise its stake in An Binh Bank to 20%, which could be forthcoming in the next two weeks.
The group’s FY09 performance was hit by an impairment charge of RM1.62 billion on goodwill of the group from BII’s operations and an impairment loss of RM353 million in MCB.
However, Wahid said based on its purchase price allocation exercise undertaken in accordance with Financial Reporting Standard 3 (FRS3, for business combination), and FRS 138 (intangible assets guidelines), in relation to its BII and MCB acquisitions, Maybank did not expect to make any further impairments on the acquisitions.
On why the banking group’s core net profit for FY09 was lower than FY08’s RM2.93 billion, even after stripping out the impairment charges, Wahid said this was due to a RM445 million interest charge on its issuance of RM9.1 billion in capital securities and subordinated debt, higher loan loss provisions, slower capital market activities and lower income from its insurance arm.
Its loan loss provisions were 109.7% higher, at RM1.7 billion, due to higher provisions of RM401.4 million at Maybank, RM121.2 million at its subsidiaries, and from the consolidation of BII’s loan loss provisions for the first time in FY09, by RM366.2 million.
Despite the higher provisions, the group achieved higher loan loss coverage in FY09, which stood at 112.9% as at June 30, compared with 101.1% in FY08.
Also, notwithstanding its various setbacks, the banking group posted a 9% higher net interest income of RM5.92 billion in FY09, driven by higher loans growth and improved lending margins in BII. Its net interest margins, meanwhile, remained relatively stable at 2.72%.
Non-interest income grew to RM3.38 billion in FY09 from RM3.17 billion in FY08. Overhead costs, however, grew to RM5.56 billion from RM4.25 billion, which also included RM584 million overhead costs from BII.
Loans growth at its Malaysian operations rose 6.4%, while overseas loans grew 28.9%. Asset quality continued to improve, with its net non-performing loan (NPL) ratio declining to 1.64% as at June 30, from 1.92% in June 2008.
Wahid said while Maybank had braced for a deterioration in asset quality, it had also taken steps to ensure it did not occur or worsen. He added that while it remained cautious on any uptick in NPLs, it was expected to be manageable.
He also said it could see higher NPLs from small and medium-sized enterprises, but the ratio was not expected to go beyond 2%.
Its core capital ratio and risk-weighted capital ratio, after deducting dividend payable, stood at 10.81% and 14.81%, respectively.
Of its international portfolio, the Singapore operations accounted for 61.9% of total loans, followed by Indonesia with 19.6%.
Pre-tax profit at its Singapore arm grew 5.9% to S$247.7 million, driven by a 24.2% increase in fund-based income. Provisions there rose 42.7%, but the gross NPL ratio decreased to 1%.
MCB reported a pre-tax profit of RM92.4 million, as total income grew 34.5% while its gross NPL ratio stood at 7.6%.
BII has yet to announce its results for the period ended June 30, 2009, but Wahid said the Indonesian bank had made a small contribution to the group’s FY09 results.
On Maybank’s plans for BII, he said with its full management team and growth strategies now in place, it was expected to be profitable in the future.
Wahid said after the bank had turned around its motor financing business this year, it could focus on strengthening its consumer, SME and corporate banking segments.
Meanwhile, on the group’s LEAP30 transformation plan embarked upon last year, he said as at end-June, total financial benefits from the initiatives amounted to RM40 million in pre-tax profit contribution, in addition to RM143 million cost savings.
Wahid said Maybank would launch four more initiatives before year-end, following the 16 launched earlier.
The new measures were the upgrading of its commercial banking model, strengthening of its equity capital markets, brokerage and merger and acquisition capabilities, establishing governance and operating model for its international businesses, and capturing value from BII, he said.
He added that beyond its domestic operations, it would focus on driving performance at BII, with particular emphasis on loans growth in the fast-growing Indonesian economy. He noted that the banking industry there had traditionally grown at a faster rate than the gross domestic product.
http://www.theedgemalaysia.com/business-news/148087-maybank-sees-much-better-fy10.html
What's on the table ?
What's on the table ?: "
Ann Joo Resources 2QFY09 in line – Back in the black
Ann Joo’s 1H09 results were largely within our expectations as the company managed to revive its earnings and return to the black in 2Q with a small net profit of RM2.2m compared to a RM38.9m loss in 1Q. We gathered that the significant improvement in earnings was largely supported by increased sales volumes, coupled with a better cost structure arising from improved production efficiency. We expect Ann Joo to ride on the resurgence in demand for building materials. We are upping our FY09-11 earnings by 19-33%, which takes our target price from RM2.10 to RM3.09, still pegged to a 20% discount to our revised target market P/E of 15x. We are upgrading our recommendation from Neutral to TRADING BUY on the basis of the potential re-rating catalysts of demand pick-up from pump-priming, higher exports and this quarter’s earnings turnaround.
Quick takes – Rubber Gloves sector update – Feeling the g(love) during our roadshow
Quick takes – Sin sector update – One for the road
Results – Genting Plantations 2QFY09 below – Weaker output nips earnings in the bud
Results – IJM Corp 1QFY10 in line – In a temporary bind
Results – Malayan Banking 4QFY09 below – Getting the impairment over and done with
Results – Petronas Dagangan 1QFY10 above – The engine starts to roar
Results – Puncak Niaga 2QFY09 above – The last acquisition play
Results – Uchi 2QFY09 above – Brewing a stronger cuppa
CI Holdings update – Expect a juicy 4Q earnings surprise
Economic news – BNM maintains rate amid stabilising signs
"
Ann Joo Resources 2QFY09 in line – Back in the black
Ann Joo’s 1H09 results were largely within our expectations as the company managed to revive its earnings and return to the black in 2Q with a small net profit of RM2.2m compared to a RM38.9m loss in 1Q. We gathered that the significant improvement in earnings was largely supported by increased sales volumes, coupled with a better cost structure arising from improved production efficiency. We expect Ann Joo to ride on the resurgence in demand for building materials. We are upping our FY09-11 earnings by 19-33%, which takes our target price from RM2.10 to RM3.09, still pegged to a 20% discount to our revised target market P/E of 15x. We are upgrading our recommendation from Neutral to TRADING BUY on the basis of the potential re-rating catalysts of demand pick-up from pump-priming, higher exports and this quarter’s earnings turnaround.
Quick takes – Rubber Gloves sector update – Feeling the g(love) during our roadshow
Quick takes – Sin sector update – One for the road
Results – Genting Plantations 2QFY09 below – Weaker output nips earnings in the bud
Results – IJM Corp 1QFY10 in line – In a temporary bind
Results – Malayan Banking 4QFY09 below – Getting the impairment over and done with
Results – Petronas Dagangan 1QFY10 above – The engine starts to roar
Results – Puncak Niaga 2QFY09 above – The last acquisition play
Results – Uchi 2QFY09 above – Brewing a stronger cuppa
CI Holdings update – Expect a juicy 4Q earnings surprise
Economic news – BNM maintains rate amid stabilising signs
QL Resources ... Aug09
QL Resources ... Aug09: "It is back on the acquisition trail this time, it is aiming for businesses in the region. It is eyeing poultry farms in Indonesia and Vietnam, and plantation land and palm oil mills in Indonesia, among others.
It has seen its poultry and livestock division grow by more than 100% in the past four years. Between 2003 and 2007, it purchased a 75% stake in a plantation project with its Indonesian partners which enabled the company to diversify into oil palm.
QL typically allocates around RM150 million annually for capital expenditure.
While the livestock and marine divisions are expected to remain the main earnings drivers for the group, its aggressive expansion into the plantation sector could be by a decline in palm oil prices.
It also operates a fleet of more than 17 trawlers. It is Malaysia’s largest producer of surmi. It also produces fish meal mixture for livestock feed and fish feed, and distributes frozen fish.
Its revenue and profits are generated from two major segments. Its integrated livestock farming and marine products manufacturing division.
Some of the risks in QL’s growth strategy include increases in raw material prices, significant changes in the CPO prices trend, foreign exchange volatility risks due to its increasing overseas contribution and aggressive growth that may strain its balance sheet.
Its net gearing stands at 0.2 times. Its net interest cover stands at 7.0 times The bulk of its borrowings are short term of about 57% of its total borrowings.
Related:-
QL RESOURCES ... Jun 09
QL Resources Bhd ... Sept 2008
QL Resources Bhd ... May 2008
"
It has seen its poultry and livestock division grow by more than 100% in the past four years. Between 2003 and 2007, it purchased a 75% stake in a plantation project with its Indonesian partners which enabled the company to diversify into oil palm.
QL typically allocates around RM150 million annually for capital expenditure.
While the livestock and marine divisions are expected to remain the main earnings drivers for the group, its aggressive expansion into the plantation sector could be by a decline in palm oil prices.
It also operates a fleet of more than 17 trawlers. It is Malaysia’s largest producer of surmi. It also produces fish meal mixture for livestock feed and fish feed, and distributes frozen fish.
Its revenue and profits are generated from two major segments. Its integrated livestock farming and marine products manufacturing division.
Some of the risks in QL’s growth strategy include increases in raw material prices, significant changes in the CPO prices trend, foreign exchange volatility risks due to its increasing overseas contribution and aggressive growth that may strain its balance sheet.
Its net gearing stands at 0.2 times. Its net interest cover stands at 7.0 times The bulk of its borrowings are short term of about 57% of its total borrowings.
Related:-
QL RESOURCES ... Jun 09
QL Resources Bhd ... Sept 2008
QL Resources Bhd ... May 2008
Coastal Contracts
Coastal Contracts: "Coastal’s 2QFY09 results were above expectations, mainly due to the higher number of offshore support vessels (OSV) delivered in the current quarter. Its strong orderbook of RM1.55bn has kept the company busy although its orderbook replenishment stood at only RM17m in 1H09. Furthermore, we believe the recent RM70m contract award by a customer to build 2 offshore support vessels and 1 tugboat is a signal of jobs starting to flow into the shipbuilding O&G segment. Maintain Buy.
Above expectation. Coastal’s 2QFY09 results were within consensus but above our expectations, making up 55% and 57% of the FY09 forecasts respectively. The good results were mainly contributed by its strong orderbook, which had proven to keep the company busy although its orderbook replenishment only amounted to RM17m in 1H09, barely making up 1% of its total existing orders. Having said that, the 2QFY09 revenue surged 18.4% q-o-q to RM94.9m, mainly due to the higher number of offshore support vessels (OSV) delivered in the current quarter. This improvement haS filtered down to the bottom line, boosting its 2QFY09 net profit by 18.7% q-o-q to RM33.0m. Also, there was AN EBIT margin improvement of 1%-pts q-o-q and 9%-pts YTD on the building of higher margin vessels such as the OSVs compared to tug boats and barges. OSVs’ gross margin are between 20% and 30% while that for tug boats and barges range from 10%- 15%. With that, the 6MFY09 net profit of RM60.7m was also up 41.8% YTD.
Strong orderbook of RM1.55bn. This should keep the company busy over the next 3 years, assuming that its annual burn rate is between RM400m and RM500m. Furthermore, with the recovery in the O&G industry, the demand for AHTS should come back and should benefit Coastal as the contracts to build this type of vessel would yield higher margins of above 30%.
Maintain Buy. We are upgrading our FY09-10 earnings forecasts by 11%-14% in line with the improved prospects in the O&G industry. Hence, our target price is also upgraded to RM2.84 (previously RM2.50) based on a PER of 8x FY10 earnings. We believe Coastal’s strength lies in its strong orderbook, which is of course due to its capability in building good vessels. Also, the recent RM70m contract award by a customer to build 2 offshore support vessels and 1 tugboat may signal the start of a flow of jobs for the shipbuilding O&G segment.
52 week H | L Price (RM) 2.37 0.79
Major Shareholders (%)
Ivory Asia Sdn Bhd 31.49
Ng Chin Heng 26.92
Coastal Contracts’ principal activities are shipbuilding and vessel chartering.
By OSK188
Analyst: Jason Yap
"
Above expectation. Coastal’s 2QFY09 results were within consensus but above our expectations, making up 55% and 57% of the FY09 forecasts respectively. The good results were mainly contributed by its strong orderbook, which had proven to keep the company busy although its orderbook replenishment only amounted to RM17m in 1H09, barely making up 1% of its total existing orders. Having said that, the 2QFY09 revenue surged 18.4% q-o-q to RM94.9m, mainly due to the higher number of offshore support vessels (OSV) delivered in the current quarter. This improvement haS filtered down to the bottom line, boosting its 2QFY09 net profit by 18.7% q-o-q to RM33.0m. Also, there was AN EBIT margin improvement of 1%-pts q-o-q and 9%-pts YTD on the building of higher margin vessels such as the OSVs compared to tug boats and barges. OSVs’ gross margin are between 20% and 30% while that for tug boats and barges range from 10%- 15%. With that, the 6MFY09 net profit of RM60.7m was also up 41.8% YTD.
Strong orderbook of RM1.55bn. This should keep the company busy over the next 3 years, assuming that its annual burn rate is between RM400m and RM500m. Furthermore, with the recovery in the O&G industry, the demand for AHTS should come back and should benefit Coastal as the contracts to build this type of vessel would yield higher margins of above 30%.
Maintain Buy. We are upgrading our FY09-10 earnings forecasts by 11%-14% in line with the improved prospects in the O&G industry. Hence, our target price is also upgraded to RM2.84 (previously RM2.50) based on a PER of 8x FY10 earnings. We believe Coastal’s strength lies in its strong orderbook, which is of course due to its capability in building good vessels. Also, the recent RM70m contract award by a customer to build 2 offshore support vessels and 1 tugboat may signal the start of a flow of jobs for the shipbuilding O&G segment.
52 week H | L Price (RM) 2.37 0.79
Major Shareholders (%)
Ivory Asia Sdn Bhd 31.49
Ng Chin Heng 26.92
Coastal Contracts’ principal activities are shipbuilding and vessel chartering.
By OSK188
Analyst: Jason Yap
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