Bumi Armada: Maintain Buy - 10% block transacted

Maintain Buy and RM4.88 target price. Usaha Tegas did not pare down its stake in Bumi Armada last Friday. Instead, the secondary share sale, via a bookbuilding exercise, came from four other individual shareholders. We do not know the reason for the selldown by the respective parties but liquidity should improve from this transaction. We remain positive on Bumi Armada's operating prospects. Our target price is based on sum-of-parts valuations.

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Source: Maybank Research - 30 April 2012

Malaysia Airports Holdings: Maintain Buy - 1Q12: Solid results despite headwinds

Within expectation. 1Q12 core net profit of MYR116.6m (+3.4% YoY, +26.7% QoQ) underpins MAHB's resilience in the face of adversity. Despite Malaysian Airlines cutting capacity by over 10% in the quarter, MAHB managed to deliver 6.5% traffic growth YoY which is within its guidance for 6%-7% traffic growth in 2012. We look forward to a promising 2012 as air travel momentum remains healthy in the region and MAHB's high utilization rates will boost profit and profit margin expansion. Maintain Buy, with an unchanged target price of RM7.10/share DCF-based.

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Source: Maybank Research - 27 April 2012

Digi.Com: Downgrade to Sell - Pulling the Trigger on Sanguinity

Downgrade to Sell. We reckon the market may be too sanguine on DiGi. Its 1Q12 results came in as expected but we detect early signs of weakness that could become more serious threats in future quarters. Competition is expected to ratchet up several notches as Maxis turns up the heat in prepaid voice, a business that accounts for more than half of DiGi's revenue. With the switch of focus to small screen devices, data could also be vulnerable. 18 out of 30 analysts covering DiGi are sitting on the fence, but we take a more concrete stand and recommend to SELL the stock into strength as the market buys it up on the latest capital payout. Our EV-derived TP is lowered to MYR3.60.

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Source: Maybank Research - 27 April 2012

Perdana Petroleum: Maintain Hold - For sale: 27% stake in Petra Energy

Clean, restructure, merge? Perdana's proposal to sell its entire stake in Petra Energy (PE) is widely expected but it would require a reasonable price for it to exit. The deal would be instrumental to cleaning up its financials and operations, which would subsequently attract potential suitors for a leaner, more focused Perdana. Until then, Perdana remains a Hold, with a MYR0.83 target price (0.8x PBV).

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Source: Maybank Research - 27 April 2012

CIMB Group Holdings: Maintain Sell - CIMB Niaga: Boost from Treasury Gains

Sell maintained. CIMB Niaga's 1Q12 results were above our expectations, coming in at 27% of our full-year forecast. To a large extent, results were bolstered by strong treasury gains during the period and while partially offset by higher levels of provisioning, we do not expect these gains to be sustainable. Our forecasts for both the bank and CIMB Group are maintained, as is our Sell call and MYR6.80 TP on CIMBGroup (P/BV of 1.9x, 2012 ROE: 16.1%).

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Source: Maybank Research - 27 April 2012

Sunway REIT: Maintain Buy - No suprises

Reiterate BUY. SunREIT's 9MFY6/12 core net profit of MYR142.5m accounted for 75-77% of our and consensus full-year estimates. SunREIT's declared MYR0.019 DPU for 3Q (YTD: MYR0.056) was also in line. No change in our earnings forecasts and MYR1.40 TP. Potential surprises could come from new asset injections (e.g. colleges) which gear towards providing a stable income stream.

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Source: Maybank Research - 26 April 2012

Nestle (Malaysia): Maintain Sell - Not sufficient for a re-rating

Core net profit within expectations. Nestle's 1Q12 core earnings were in line, accounting for 31% and 32% of our and consensus full-year forecasts respectively. A stronger 1Q has been the norm in recent years and therefore we are maintaining our net profit forecasts of MYR509m (+11.5% YoY) for 2012. We maintain our SELL call and DCF-based target price of MYR52.40.

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Source: Maybank Research - 26 April 2012

TH Plantations: Maintain Hold - 1Q12: Off to a slow start

Results underperformed. THP's MYR13m 1Q12 core net profit (-40% YoY, -65% QoQ) accounted for just 10% and 12% of our and consensus FY12 forecasts respectively. The shortfall is due to higher-than-expected cost and taxes. We maintain our earnings estimates for now pending further clarification from management. However, the underperformance could trigger short-term weakness in its share price, but mitigated by its upcoming payment of 2011 final DPS of 12.5sen/sh. Maintain HOLD with an unchanged TP of MYR2.75 (11x 2013 PER).

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Source: Maybank Research - 25 April 2012

British American Tobacco: Maintain Hold - Dividends Still Looking Good

Maintain HOLD for dividends. MYR194.5m 1Q12 core net profit (+9% YoY, +14% QoQ) accounts for 25% and 26% of our and consensus forecasts respectively. Despite beaten-down ELPC market share and declining illicit cigarette consumption, the industry remains vulnerable to regulatory risks e.g. tax hikes and other legal sanctions. BAT's valuations have also overtaken its fundamentals; at 20x 2012 PER, it is trading at more than 1SD above its mean PER of 17x. We maintain our HOLD call with an unchanged DCF-based TP of RM50.40 for its decent dividend yield of 4.4% and defensive earnings.

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Source: Maybank Research - 24 April 2012

Top Glove: Upgrade to Buy - In top form again

Upgrade to Buy. We have turned positive on Top Glove: (i) its sales has picked up further and is almost back to its H1N1 peak; and (ii) latex cost (key input) has begun its seasonal downtrend and is likely to sustain at lower levels due to global rubber supply surplus this year. We raise our FY12-14 EPS forecasts by 8-12% on lower latex cost assumption. Post-revision, Top Glove trades at 13x CY13 PER, below its 5-year average of 16x. We upgrade the stock to Buy (from Sell), with a higher TP of MYR5.40 (+29%) on 16x PER target (previously 14x). Its share price has fallen by 15% from its peak in Jan ’12.

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Source: Maybank Research - 24 April 2012

CIMB Group Holdings: Maintain Sell - Little Change In Guidance

Sell maintained.CIMB hosted its pre-results briefing yesterday with Dato' SriNazirRazak in attendance. The discussion was big picture in nature and the general tone continues to be upbeat. There was, however, little change in guidance and as usual, our Sell call is premised on expectations of CIMB's premium valuations narrowing against its conventional peers' amid capital market volatility, coupled with the risk of foreign selling owing to its 33% foreign shareholding. Our RM6.80 TP pegs on a target P/BV of 1.9x (2012 ROE: 16.1%).

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Source: Maybank Research - 24 April 2012

Gamuda: Maintain Buy - MYR8.28b, the magical number

Enhanced visibility. MMC-Gamuda JV's MYR8.28b win for the KVMRT Sg Buloh-Kajang (SBK) tunnelling works has enhanced its earnings visibility into 2017, and should provide for earnings growth, at least, into FY13-14. We raise our earnings forecasts marginally which have earlier imputed MYR3b job win potential for FY12. Our MYR4.10 RNAV-based target price is unchanged. Trading at just 12.3x one-year forward earnings (16x mean), the stock is undervalued. Maintain Buy.

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Source: Maybank Research - 23 April 2012

UMW Holdings: Upgrade to Buy - Set To Accelerate

Upgrade to Buy with a higher TP of MYR8.35, ahead of recoveries at the automotive and O&G sectors, and on the back of a 10-11% rise in 2012-13 net profit forecasts. The disruption to the regional auto supply chain has abated while its O&G segment is at the cusp of a revival. With market already absorbing the anticipated weak 1Q12 earnings and its 2011 kitchen-sinking exercise, UMW now offers a recovery play angle with modest growth (3-year EPS CAGR of 20%) and undemanding valuations, supported by a decent dividend yield (6%).

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Source: Maybank Research - 23 April 2012

Kelington Group Berhad (BUY) - An undiscovered gem

Investment Highlights
An undiscovered gem with growth potential. We like Kelington because it is a leading provider of Ultra High Purity (UPH) gas and chemical delivery solutions in the region with its niche business model that is not well represented in any of the companies listed in Bursa Malaysia. Its impressive future earnings growth and aggressive overseas expansion also deserve investors’ attention.

UHP industry benefiting from shorter tech life cycles, which necessitate reinvestments in key sectors like wafer fabrication (planting circuit) and FPD fabrication (glass substrates). Rapid changes in manufacturing technologies and unabated demand for innovative consumer electronics, i.e. widespread use and continuous innovation of wireless and portable communication devices, and increased demand in LCD TV continue to render more projects for the Group.

Commendable earnings growth. Kelington has successfully achieved revenue and net earnings CAGR of 40.4% and 31.7% respectively over the past 7 years. Moving forward, we forecast the Group will chalk up RM11.1m net profit in 2012 (up 28% yoy) on the back of RM170m revenue (consisting of outstanding orderbook of RM54m, contributions from newly acquired Singaporean company named Puritec and new job secure worth RM100m p.a.) and continue its strong earnings momentum with net profit of RM13.3m (up 19% yoy) in 2013 on the back of RM195m revenue. The company is currently tendering for contracts worth RM400m including Infineon’s second fabrication facility in Kulim and a solar project in China. Historically, Kelington has a success rate of 25%.

Margin expected to stabilised. The Group’s historical gross margin shown a downtrend from the peak of 25% in 2009 to 14.9% in 2011 as a result of stiff competition in China and Taiwan whereby margin sacrificed to capture the market share. However, the Group believes that gross margin is able to sustain at current level of 15% in 2012-13.

Established firm foothold in Singapore. Kelington started a small office two years ago in Singapore to penetrate a range of clientele from high-tech industries such as solar cell to the wafer fabrication. Lat year, the Group successfully secured a RM23m project in bioscience segment to install a process mechanical system for International Flavours & Fragrances (IFF), a leading creator and manufacturer of flavours and fragrance. Going forward, we believe that Singapore market could land the Group for more projects as Singapore is currently having 16 wafer fabrication plants as compared to only 4 wafer fabrication plants in Malaysia.

Expansion into other scope of services in existing and new countries. The Group intends to broaden scope beyond UHP gas and chemical into other utilities such as water, exhaust and vacuum. Furthermore, it plans to penetrate deeper into new and existing sectors in Taiwan, China (particularly in northern and southern areas) as there is huge potential in emerging markets in areas such as solar energy, LED and bioscience. On new markets, the company has started its first project in Vietnam and is eyeing opportunities in India, Indonesia, the Philippines and Middle East

More M&A in the pipeline. We understand that the Group is also exploring M&A for synergistic opportunities to expand range of services and client base. To recap, the Group successfully acquired a Singaporean company named Puritec last year which started to contribute to its earnings this year.

Bonus issue to enhance stock’s liquidity? Kelington is a small cap stock that having RM73m market cap with relatively low public float of 27%. The management has hinted a possible bonus issue to improve the market liquidity in future with its healthy reserves position of RM42.5m as of Dec 2011.

Strategic shareholders. Among Kelington’s major shareholders are Lembaga Tabung Angkatan Tentera (LTAT) with 12.6% and Sky Walker Group Ltd (12.2%), which is a consortium of key global semiconductor players.

Dividend policy. The Group introduced a dividend policy of 25% payout or 2.75 sen in 2011, which is equivalent to dividend yield of 3%, to attract more institutional investors’ interests in future. We estimate that the Group will propose a decent dividend yield of 4-5% for 2012-13.

Recommendation
Attractive valuation with 34% potential upside. Kelington is currently trades at 6.3x 2012F PER and 5.2x 2013F PER, which is based on our 2012 EPS of 14.0. sen/share and 2013 EPS of 16.8 sen/share. Our target price for the stock is at RM1.18, pegged at 7x 2013F PE, in line with small cap valuation.

Source: JF Apex Research - 20 April 2012

BURSA - Still cautious

Bursa Malaysia; Fully Valued; RM7.03
Price Target: RM6.00; BURSA MK

1Q12 result was within our and consensus’ estimates. No dividend declared in the quarter. Maintain Fully Valued and RM6.00 TP.

Source: HwangDBS Research - 20 April 2012

AEONCR - Positive momentum

AEON Credit Service; Hold; RM8.74
Price Target: RM9.20 (Prev: RM7.00); ACSM MK
FY12 profit better than expected; declared 16.8 sen net DPS; FY12 total DPS is 30 sen. Robust loan growth driven by personal financing and credit cards. Maintain Hold, TP raised to RM9.20 (pegged to 8x CY13  EPS), offering 9% total return (including 4% net dividend yield).

Source: HwangDBS Research - 20 April 2012

FITTERS - Buy for quantum leap ahead

Fitters Diversified; Buy; RM0.76
Price Target: RM1.25; FIT MK

Proxy to renewable energy with promising growth prospects. Riding on booming theme parks in Asia; Shanghai Disneyland is the wild card. Initiate with BUY and RM1.25 TP (66% upside).

Source: HwangDBS Research - 20 April 2012

Ta Ann Holdings: Maintain Buy - Bonus issue to improve liquidity

Positive for sentiment. Ta Ann's proposed 1-for-5 bonus issue not only helps to improve liquidity but it will “recapitalize” its share base as its seeks to achieve sustainable growth in the long run. The stock continues to trade at an attractive 10.9x 2013 PER, with low EV/planted ha of ~MYR42,600 (43% discount to industry average). It is also poised to deliver a 15% 3-year net profit CAGR. Maintain Buy and MYR9.00 TP on 15x 2013 PER. Ta Ann is our top pick among the plantation stocks.

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Source: Maybank Research - 20 April 2012

Bursa Malaysia: Maintain Hold - Tracking to expectation

No surprises; maintain Hold. 1Q12 net profit of MYR40.8m made up 25% of our full-year forecast. We maintain our forecasts for an 11% growth in 2012 core net profit. Our target price is also unchanged as we continue to peg Bursa at a 20% discount to our target 25x for SGX i.e. at 20x current year earnings plus excess cash of MYR1.00/sh (31 Mar 2012). Within the Maybank-Kim Eng coverage, our Buy call is on SGX SP (TP: SGD8.00) for its structural growth potential.

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Source: Maybank Research - 20 April 2012

Public Bank (Hold) - In Line, Despite Full Adoption Of FRS139

Public Bank (Hold)

In Line, Despite Full Adoption Of FRS139

• 1QFY12 results in line with HLIB and consensus.
• Full adoption of FRS139 resulted in write-back of excess CA which boosted book by RM859m and Tier-1 capital.
• Loans growth of 12.6% yoy in line with its target of 12-13% but slightly ahead of our 11% assumption. 
• Earnings growth driven by its retail business while Public Mutual NAV continued to expand. 
• Asset quality improved while LLC remained above the 100% mark, despite negative impact from FRS139 adjustment.
• Capital ratios stable.
• FY12-14 forecasts fine-tuned by circa +1%.
• Target price raised to RM14.09 following forecasts revision and higher book value due. 

Source: Hong Leong Investment Bank Research - 19 April 2012

Eversendai (BUY) - 2nd deal for Qatar National Museum

Eversendai (BUY)

2nd deal for Qatar National Museum

• Awarded QAR160m (~RM134m) structural steel project from Hyundai Engineering & Construction for Package 2 of the Qatar National Museum. The project is anticipated to be completed in 2013.
• The latest order brings Eversendai’s outstanding order book to ~RM2.1bn, translating to ~2.1x FY11’s revenue and ~1.6x order book-to-market cap ratio. Assuming a PAT margin of 10%, the latest order translates to ~1.2 sen/share for the company (after adjusting for its 70% stake).
• Maintain BUY with TP of RM2.00 based on 12x average FY12-13 earnings.

Source: Hong Leong Investment Bank Research - 19 April 2012

Mudajaya (BUY) - Over reaction on coal issue?

Mudajaya (BUY)

Over reaction on coal issue?

• News report that Coal India (CIL) has agreed to sign a revised Fuel Supply Agreement (FSA) with power producers. This is positive for Mudajaya’s (MDJ) Letter of Assurance (LoA) for coal supply which will now be converted into FSA, indicating assured supply.
• We believe that the India Government will prioritise distribution of coal supply for power producers as electricity is a basic necessity after water, food and shelter and also for the country’s development.
• We feel that the kneejerk reaction on MDJ’s share price has overshot on the downside. Our base case valuation for the company works out to RM2.87.
• With the company’s local operations still fundamentally sound, we maintain our BUY call on MDJ but with a lower revised TP of RM4.27.

Source: Hong Leong Investment Bank Research - 19 April 2012

RHB Research - Automotive Sector Update (19 April 2012)

Sector Update

Motor – A Gradual Recovery                                                                                               Neutral

Sector Update

MBM Resources – Fair value RM5.05                                                                           Outperform

Tan Chong – Fair value RM4.60                                                                             Market Perform

DRB-HICOM – Fair value RM3.45                                                                                  Outperform

• Auto sales for Mar of 53,583 units were 21.7% higher mom (-15.3% yoy) that marks the second consecutive mom gain. TIV for 1Q12 reached 138,544 units, down 12.5% yoy and 7.6% qoq.
• The MAA attributed the improved sales to positive consumer sentiment, the introduction of new models and a longer working month and expects the sales trend for Apr to be similar.
• Combined with the lingering effects of the stricter financing guidelines, nearly all marques continue to show yoy sales contraction with the exception of Toyota .

PBBANK - Accounting changes lift profit

Public Bank; Buy; RM13.80
Price Target: RM15.00 (Prev: RM14.90); PBKF MK

1Q12 result was within our and consensus’ expectations despite accounting changes (MFRS 139). Raised FY12-14F earnings by 4-5% after reducing collective allowance. No dividends declared in the quarter. Maintain Buy; TP raised to RM15.00.

Source: HwangDBS Research - 19 April 2012

Automotive Sector - Perodua’s March sales down by 11% y-o-y

Automotive Sector
Perodua’s March sales down by 11% y-o-y

According to a local media report, Perodua has recorded vehicle sales of 15,962 units in March (up 5.7% mo-m from February 2012’s 15,097 units but down by 11.1% y-o-y versus March 2011’s 17,948 units) based on the Malaysian Automotive Association’s (MAA) latest statistics. Perodua’s managing director Datuk Aminar Riashid Salleh has also commented that the Viva model was the worst hit with a 19% drop in sales to 12,812 units in 1Q12 (-19.1% y-o-y from 1Q11’s 15,846 units).

The slower Perodua sales in March was in tandem with weaker total industry volume (TIV of 53,583 units in March, down 15.3% y-o-y), partly due to the newly implemented responsible lending guidelines by Bank Negara Malaysia. With Perodua’s 1Q12 total sales volume of 44,743 units accounting for 24.7% of our  fullyear forecast, we are maintaining our CY12 sales volume projection for Perodua at 180.9k units (and TIV at 606.5k units).

No change to our FY12F net earnings projections of RM156.4m for MBM Resources (Buy, RM6.10 TP) and RM620.1m for UMW (Hold, RM7.30 TP), which owns effective equity stakes of 23.6% and 38.0% in Perodua, respectively.

Source: HwangDBS Research - 19 April 2012

Eversendai Corporation: Maintain Buy - Bags RM134m Qatar museum job

New jobs keep flowing in. Eversendai has clinched the structural steel work for the National Museum of Qatar (Package 2), worth RM134m. This job came just 5 days after the award of the RM158m Saudi airport work, proving the vibrancy of the construction landscape in the Middle East. We expect more job wins both locally and abroad (i.e. Abu Dhabi airport, local power plants). The stock however remains undervalued at 9.5x 2012 PER despite its consistent job wins and earnings growth. Maintain Buy and TP of RM2.17 (12x 2012 PER).

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 Source: Maybank Research - 19 April 2012

Media Prima: Maintain Sell - Not quite a free ride

Much ado about nothing? We do not believe that the determination to share sports content will benefit Media Prima greatly. If it wants prime sporting content, it will likely have to pay dear prices for them. We maintain our estimates and MYR2.34 TP on 13.5x 2012 PER. Although its current price poses only 9% downside risk, we maintain our SELL call for now pending a meeting with management. Note that 1Q12 gross TV adex plunged 11% YoY vs our estimate of +7% YoY.

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 Source: Maybank Research - 19 April 2012

Malaysia Airports Holdings: Maintain Buy - MAS capacity cuts makes its mark

Traffic growth within expectation. MAHB's February 2012 passenger traffic growth of 2.3% YoY, which brought YTD growth to 6.7%, is within the guidance of 6%-7% growth in 2012. This February slowdown is expected as CNY is in January this year versus February back in 2011. Secondly, MAS has cut its system capacity by 10% in February as part of its business turnaround plan. We retain our forecast for 6.7% passenger traffic growth in 2012 as it has already taken into account these factors. Maintain BUY with an unchanged MYR7.10/share DCF-based target price.

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Source: Maybank Research - 19 April 2012

Public Bank: Maintain Buy - MFRS139 benefits feature in 1Q12

Buy; upgrading target price. As expected, FRS139 benefits have been accrued to reserves and surprised on the upside, while earnings were above expectations on lower-than-expected provisions. Our 2012-14 net profit forecasts are raised by 7-8% p.a. while our target price is upped to MYR15.40 (+5%) on a higher price-to-book target of 3x (2.8x previously), premised on a revised 2012 ROE of 23.6% from 21.6%.

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Source: Maybank Research - 19 April 2012

Automotive Sector - March’s vehicle sales down 15% y-o-y

Automotive Sector - March’s vehicle sales down 15% y-o-y
According to the Malaysian Automotive Association (MAA), March 2012’s motor vehicles sales was recorded at 53,583 units (-15.3% y-o-y from March 2011’s 63,264 units). On a month-to-month basis, March’s sales came in higher compared with the previous two months (January: 40,948 units and February: 44,013 units), which is within our expectations as sales picked up after the holiday season in January and February.

This brings total sales volume for 1Q12 to 138,544 units (-12.6% y-o-y from 1Q11’s 158,432 units). We maintain our 2012 TIV forecast of 606,507 units (+1.1% y-o-y). Our top sector picks are MBM 

Resources
(Buy; TP RM6.10) and APM Automotive (Buy; TP RM5.60).
APM Automotive; Buy; RM4.68
Price Target: RM5.60; APM MK

Setting foot in IndonesiaAPM has announced to Bursa yesterday that it has received government approval from Indonesia for the establishment of 100%-owned PT APM Auto Components Indonesia (PT APMACI) with a paid-up and issued share capital of US$8m. To be located on an industrial lot with land area measuring approximately 38,077 sq meters at Suryacipta Industrial City in Karawang, West Java, the new subsidiary will manufacture and sell automotive heat exchange products, namely, air-conditioning cooling system, evaporators, condensers, cooling modules and radiators for the Indonesian market.

Total investment outlay for the project is estimated at approximately US$10.9m (RM33.5m), to be financed by internal funds with the facility due for completion by end-2012 and operations commencing by 2Q13. APM’s venture into the Indonesian market is in-line with our expectations under the group’s long-term strategic growth plan. However, given the stated timeline, meaningful contributions from Indonesia is expected to be felt only after FY13. We are maintaining our revenue forecasts for the Group at RM1.25bn (+5.5% y-o-y) in FY12 and RM1.33bn (+6.5% y-o-y) in FY13, with APM’s operations outside Malaysia contributing RM125m (+11.0% y-o-y) this year and RM130m (+15.0% y-o-y) next year.

Maintain Buy at RM5.60 TP pegged to 9x FY12F EPS of 62 sen.

AEON Co. (M): Downgrade to Hold - Journey to the East

Downgrade to Hold. AEON's share price is up an impressive 33% YTD and has breached our TP of RM8.70 (pegged at 14x 2013 PER). With little upside catalyst at this stage and low dividend yield as support, we downgrade our recommendation from Buy to Hold. We forecast revenue growth of 6.8% for the group in 2012, in line with the 6% industry growth expected by the Retail Association of Malaysia.

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Source: Maybank Research - 18 April 2012

Gamuda (BUY) - Tunnel sharing

Gamuda (BUY)

Tunnel sharing

• Financial Daily reported that MMC-Gamuda JV is looking to subcontract 4km of the total 9.5km MRT tunnelling works to foreign parties and would also lease the boring machines to them. This will allow MMC-Gamuda JV to focus on the more challenging karstic limestone formation.
• Although no value was given, the Financial Daily estimate that the Kenny Hill formation stretch is expected to cost around RM3bn. We are surprised by this news as it would indicate lower earnings margins for MMC-Gamuda as opposed to the estimated 10-12%. However, this would also translate to better risk-adjusted compensation.
• We maintain our BUY call with a TP of RM4.41 based on SOP valuation.

Source: HLIB Research - 17 April 2012

AXREIT - Stronger rental income

Axis REIT; Buy; RM2.73
Price Target: RM3.05 (Prev: RM2.75); AXRB MK

1Q12 net profit in line; declares 4.3 sen DPU. Nudged up FY13-14F earnings by 2-4%. Maintain BUY rating; raised TP to RM3.05.

Source: HwangDBS Research - 17 April 2012

ARMADA - Secures US$200m contract

Bumi Armada; Buy; RM4.45
Price Target: RM5.20 (Prev: RM5.00); BAB MK

Secures US$200m pipe-laying contract in Caspian Sea from Lukoil; raised FY12-14F profit by 5-7%. RM7.5bn order book gives clear earnings visibility. Maintain BUY rating; TP nudged up to RM5.20.

Source: HwangDBS Research - 17 April 2012

Bumi Armada: Maintain Buy - Bags Lukoil's USD200m EPIC job

Maintain Buy and RM4.88 SOP-based target price. Bumi's USD200m EPIC contract win from Lukoil is its 2nd project in the Caspian Sea and should contribute positively to 2013-15 earnings (est. 3% p.a.). We maintain our earnings estimates for now. We foresee further opportunities in this region should it execute this job to Lukoil's requirements, for Lukoil alone targets to spend USD18b in 2012-21.

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Source: Maybank Research - 17 April 2012

Genting Malaysia: Maintain Hold - Save this ace for year end

2013 to be more exciting than 2012. Genting Malaysia's (GENM) existing operations remain resilient. Although its potential expansions into the USA are exciting to the tune of billions of USD in terms of gross gaming revenue (GGR) (please see pages 2 and 3), they are unlikely to materialise until 2013 at earliest. Its potential expansion into Vietnam is more likely to materialise sooner but is unlikely to significantly boost its earnings. Maintain Hold call and ex-cash DCF-based TP of RM4.00.

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Source: Maybank Research - 17 April 2012

Berjaya Sports Toto – Eyeing stake in Philippine NFO?

Berjaya Sports Toto – Eyeing stake in Philippine NFO?                                                  Market Perform

News Update

-          BToto is reportedly looking to expand its Philippines operations by potentially acquiring a stake in the Philippine Charity Sweepstakes Office (PCSO) in Luzon . Currently, BToto supplies and maintains a computerised online lottery system and provides software support to PCSO and in return, gets a cut from PCSO’s ticket sales.

-          Forecasts and DCF-based fair value of RM4.85 maintained. Maintain Market Perform.

Source: RHB Research - 16 April 2012

Genting Plantations – Expanding further into Indonesia

Genting Plantations – Expanding further into Indonesia                                                          Outperform

News Update

-          Genting Plantations’ subsidiary has entered into an S&P Agreement with Global Agrindo and Global Agripalm to establish a JV for the development of approximately 74,390 ha of oil palm plantation in Kalimantan Tengah, Indonesia for US$116m (RM356.3m). Upon completion of acquisition and subscription, GP’s stake in the JV Co will be 63.2%. 14,150ha of land has already been planted, while another 4,195ha has been planted under the plasma scheme.

-          We maintain our fair value of RM10.45, based on an unchanged 17x CY12 target PER. Maintain Outperform.

Source: RHB Research - 16 April 2012

Eversendai – Lands RM158m Saudi Job

Eversendai – Lands RM158m Saudi Job                                                                               Outperform

News Update

-          Eversendai has been awarded by Saudi Binladin Group structural steel works worth RM158m for the railway station of the King Abdul-Aziz International Airport project in Jeddah , Saudi Arabia . 

-          Forecasts are maintained as we have already assumed in our forecasts Eversendai to secure RM1.5bn worth of new jobs in FY12/12. Maintain Outperform.  Fair value is RM2.15.

Source: RHB Research - 16 April 2012

Hartalega – Hartalega NGC: Beating The Drums Of War

Hartalega – Hartalega NGC: Beating The Drums Of War                                                     Underperform

Briefing Note

-          Longer-term earnings growth would be driven by Hartalega’s NGC project, which would add an additional 24.5bn pieces to capacity upon completion in 2021.

-          CY12 target PER and fair value raised to 12x (from 10x) and RM7.37 (from RM7.12) respectively on expectations that the successful implementation of the NGC project would see the company shift towards a ‘high-volume’ nitrile glove manufacturer and thus provide it with larger economies of scale to compete with its larger peers.

Source: RHB Research - 16 April 2012

Tan Chong – A Better 2H12

Tan Chong – A Better 2H12                                                                                           Market Perform

Visit Note

-          Tan Chong will likely report relatively weak 1Q earnings after MAA data for the first two months of 2012 showed combined Nissan and Renault sales down 16.7% yoy, attributed to a combination of component supply constraints and the newly-introduced responsible lending guidelines.

-          We reiterate our Market Perform call on Tan Chong and lift our fair value to RM4.60 (from RM4.20), derived from applying a 13x (from 10x) target PER to revised 2012 earnings.

Source: RHB Research - 16 April 2012

AMMB – Staying focused

AMMB – Staying focused                                                                                                Market Perform

Visit Note

-          AMMB remains focused on growing loans in profitable and viable segments. We gather that the loan approval pipeline looks good thus far, thanks to the ETP. Nevertheless, management still expects the group to post sub-system loan growth, dragged by the retail segment. 

-          Fair value of RM6.75 and Market Perform call maintained.

Source: RHB Research - 16 April 2012

BToto (BUY) - Expanding into the Philippines

BToto (BUY)

Expanding into the Philippines

• According to The Edge Weekly, BToto is said to be looking to expand its operations in the Philippines by potentially acquiring a stake in the Philippines Charity Sweepstake Office (PCSO).
• BToto is currently supplying and maintaining a computerized online lottery system and provides software support to PCS via its subsidiary, Berjaya Philippines Inc. In return, it gets a cut from PCSO’s ticket sales.
• We believe that this is to expand its coverage, giving itself a growth catalyst in the coming years while the market for number forecast operators (NFO) in Malaysia has matured.
• This would help BToto to expand its penetration into the overseas gaming market. However, the benefit of venturing into the international market comes with its risks. Past records showed that local NFOs such as Tanjong and Magnum have attempted to venture into overseas market but ended up recording provisions.
• We remain our forecast with TP of RM4.92. Maintain Buy.

Source: HLIB Research - 16 April 2012