Friday, August 26, 2011

HLIB Research 26 August 2011 (SIME; DRB-Hicom; YTL-P; Maxis; TimeDotCom; HSL; TRC; Traders Brief) Part1

Sime Darby (Buy)

FY06/11 result: above our expectation

§  FY06/11 core net profit of RM3,808.5m beat our expectation, accounted for 110.5% of our full-year forecast.

§  Main deviations are higher-than-expected contribution from the plantation, industrial, and motor divisions. 

§  FY06/12-13 net profit forecasts raised by 0.1-3.1%, largely to reflect higher margin assumptions at both the industrial ad motor divisions, and slightly higher FFB output growth assumption in Malaysia.

§  SOP-derived TP cut by 3.7% from RM10.99 to RM10.60 to reflect higher holding company discount that more than offset an upward revision in our forecasts.

 

DRB-HICOM (BUY çè)

Forward with Strong Earnings Recovery

§  1QFY3/12 core profit of RM90.8m in line with our expectation (18.6%), but below consensus (16.8%).

§  Impact of Japanese crisis on DRB automotive division was substantial in 1QFY3/12.

§  Supply constraint has gradually eased off since July, in line to meet its FY3/12 target

§  Expect strong earnings from 2QFY3/12 onwards due to recovery of automotive division, maiden contribution from POS, and effective implementation of Hire Purchase Act amendment and Waste Management Act amendment.

§  Maintain BUY with unchanged TP of RM2.97.

 

YTL Power (BUY çè)

4Q11 Results in Line

§  Reported 4QFY6/11 core earnings of RM379m bringing FY11 to RM1,216m, inline with our expectation (96.1%) and  consensus (102.1%).

§  Strong contribution from Power Seraya in Singapore on the back of strong GDP growth, which offsets the lower contribution from Wessex (due to depreciation of UK£) and losses from YTLC (due to high initial capex outlay).

§  YTLP will recognize RM210m gain on disposal in 1QFY6/12 from the sale of 15% Java Power. However, the contribution from Java Power will be reduced to RM150m in FY6/12 and RM130m in FY6/13 onwards, from original RM225m pa.

§  Proposed 1.875 sen net dividend, taking FY6/12 dividend to 9.375 sen, below our expectation.

§  Reduced FY6/12-13 earnings by 6-7%.

§  Maintain BUY with lower TP of RM2.33 after accounting for lower earnings and imputing 10% holding discount.

 

Maxis (Hold)

1H11 results: In line wirh our expectation

§  1H11 reported core net profit of RM1,090m (-3.7%) came in within our expectation, at 48.2% of our full-year forecast. Against consensus, the results came in below, accounted for only 45.4% of the full-year estimates.

§  2011-13 net profit forecasts and our DDM-derived TP of RM5.51 maintained.

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