KUALA LUMPUR: CIMB Equities Research has initiated coverage of MSM Holdings Bhd'' with a NEUTRAL call and a target price of RM5.50, which is based on 13 times forward P/E or a 10% discount to its target market P/E of 14.5 times.
It said on Thursday, Aug 4 the dividend yield of 5.5% will provide share price support.
MSM Holdings is currently in a sweet spot, thanks to its 57% share of Malaysia's refined sugar market. Current-year earnings growth prospects are also favourable, aided by a strong ringgit and higher selling prices.
'But these pluses are offset by uncertain raw sugar costs in 2012, slower demand growth as well as rising competition and fuel costs,' it said.
Showing posts with label CIMB Marleting Research. Show all posts
Showing posts with label CIMB Marleting Research. Show all posts
Thursday, August 4, 2011
Tuesday, May 10, 2011
Dialog rises on possible marginal oilfield jobs
KUALA LUMPUR: DIALOG GROUP BHD [] shares advanced on Tuesday, May 10 after The Edge FinancialDaily reported that the company and its Australian partner Roc Oil were on the verge of bagging the marginal oilfield projects from Petroliam Nasional Bhd (Petronas) for Balai and Bentara fields, located off the coast of Sarawak.
At 9.30am, Dialog was up three sen to RM2.55 with 330.600 shares traded.
CIMB Equities Research has maintained its sum-of-parts target price of RM2.67 for Dialog and also its earnings per share (EPS) forecasts.
It was commenting on the article that suggested that the JV between Dialog and Australia's Roc Oil was set to secure the risk sharing contract (RSC) for the development of the Balai and Bentara marginal fields.
'The RSC would mark new milestones for both companies ' upstream diversification for Dialog and a Malaysian debut for Roc,' it said.
CIMB Research said assuming that 1) Dialog has the minimum 30% stake in the JV, and 2) other terms are similar to those for the Berantai marginal field, Dialog's FY6/12-13 EPS could be boosted by 8-9%.
'The fees from oil production will be realised beyond our forecast period. Dialog remains an OUTPERFORM, with the potential re-rating triggers being 1) announcement of the marginal field development, and 2) new markets, i.e. Saudi Arabia,' it said
At 9.30am, Dialog was up three sen to RM2.55 with 330.600 shares traded.
CIMB Equities Research has maintained its sum-of-parts target price of RM2.67 for Dialog and also its earnings per share (EPS) forecasts.
It was commenting on the article that suggested that the JV between Dialog and Australia's Roc Oil was set to secure the risk sharing contract (RSC) for the development of the Balai and Bentara marginal fields.
'The RSC would mark new milestones for both companies ' upstream diversification for Dialog and a Malaysian debut for Roc,' it said.
CIMB Research said assuming that 1) Dialog has the minimum 30% stake in the JV, and 2) other terms are similar to those for the Berantai marginal field, Dialog's FY6/12-13 EPS could be boosted by 8-9%.
'The fees from oil production will be realised beyond our forecast period. Dialog remains an OUTPERFORM, with the potential re-rating triggers being 1) announcement of the marginal field development, and 2) new markets, i.e. Saudi Arabia,' it said
Wednesday, December 22, 2010
DIALOG - Dialog price estimate lifted to RM2.20
Stock Name: DIALOG
Company Name: DIALOG GROUP BHD
Research House: CIMB
Dialog Group Bhd was raised to "outperform" from "underperform" at CIMB Investment Bank Bhd to reflect the Malaysian oil and gas services provider's earnings growth prospects.
The share price estimate was increased to RM2.20 from RM1.10, Norziana Mohd Inon, an analyst at CIMB said in a report today.
Company Name: DIALOG GROUP BHD
Research House: CIMB
Dialog Group Bhd was raised to "outperform" from "underperform" at CIMB Investment Bank Bhd to reflect the Malaysian oil and gas services provider's earnings growth prospects.
The share price estimate was increased to RM2.20 from RM1.10, Norziana Mohd Inon, an analyst at CIMB said in a report today.
Wednesday, December 15, 2010
BJTOTO - BToto out of luck in 2Q
Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD
Research House: CIMB
Berjaya Sports Toto Bhd
(, RM4.23)
Maintain neutral at RM4.13 with target price of RM4.67: A higher-than-expected prize payout led to a subpar interim showing by BToto, with 1HFY4/11 core earnings coming in at only 39% of our projection and 34% of consensus.
The second interim tax-exempt dividend per share (DPS) of four sen was marginally below forecast and took year-to-date (YTD) DPS to 12 sen or 42% of our full-year estimate. Factoring in the higher payout for 2Q, we cut our FY11 EPS forecast by 11% and trim FY11 DPS by one sen. Our FY12-13 numbers are unchanged. Our discount dividend model-based end-CY11 target price also stays at RM4.67 due to the minimal reduction in dividends assumed.
We remain neutral on BToto given the competitive threat from Magnum's 4D Jackpot game and concerns over softer sales following the recent cut in prize payout for the Big 4D game. We prefer Genting for exposure to the sector.
2QFY11 topline fell 1.3% year-on-year (y-o-y) due to a lower number of draw days compared to the previous year. On a quarter-on-quarter (q-o-q) basis, 2Q sales advanced 1.3%, lifted mainly by stronger lotto sales despite the lower number of draw days. Like the previous quarter, Supreme Toto 6/58 was the main growth driver, propelling 2Q11 lotto revenue higher by a staggering 55% y-o-y and 26% up q-o-q, thanks to its attractive jackpot which snowballed to RM47.8 million during the quarter. On a year-to-date basis, revenue dipped 0.1% y-o-y as the gaming business was affected by the lower number of draw days and rising competition.
2Q11 earnings before interest and tax (Ebit) fell 33% y-o-y due to the two percentage points (ppts) hike in pool betting duty on June 1 and the less favourable prize payout ratio of 70% versus 2Q10's 63%. Ebit margin continued to narrow q-o-q due to the higher payout ratio. We expect BToto's gaming margin to improve in 4Q as the government recently approved a reduction in the special prize payout, which we estimate will lower the payout ratio for the Big 4D game by two ppts effective Dec 15.
Although we expect BToto to retain its market leadership in CY11 due to decent punting interest in its flagship 4D game and the boost from its three lotto variants, we expect its lead to be crimped by strong interest in Magnum's 4D Jackpot game. Because of this and the maturity of the NFO market in general, we see some downside risk to our flat to +3% annual topline growth projections for BToto for FY11-13. ' CIMB Research
Company Name: BERJAYA SPORTS TOTO BHD
Research House: CIMB
Berjaya Sports Toto Bhd
(, RM4.23)
Maintain neutral at RM4.13 with target price of RM4.67: A higher-than-expected prize payout led to a subpar interim showing by BToto, with 1HFY4/11 core earnings coming in at only 39% of our projection and 34% of consensus.
The second interim tax-exempt dividend per share (DPS) of four sen was marginally below forecast and took year-to-date (YTD) DPS to 12 sen or 42% of our full-year estimate. Factoring in the higher payout for 2Q, we cut our FY11 EPS forecast by 11% and trim FY11 DPS by one sen. Our FY12-13 numbers are unchanged. Our discount dividend model-based end-CY11 target price also stays at RM4.67 due to the minimal reduction in dividends assumed.
We remain neutral on BToto given the competitive threat from Magnum's 4D Jackpot game and concerns over softer sales following the recent cut in prize payout for the Big 4D game. We prefer Genting for exposure to the sector.
2QFY11 topline fell 1.3% year-on-year (y-o-y) due to a lower number of draw days compared to the previous year. On a quarter-on-quarter (q-o-q) basis, 2Q sales advanced 1.3%, lifted mainly by stronger lotto sales despite the lower number of draw days. Like the previous quarter, Supreme Toto 6/58 was the main growth driver, propelling 2Q11 lotto revenue higher by a staggering 55% y-o-y and 26% up q-o-q, thanks to its attractive jackpot which snowballed to RM47.8 million during the quarter. On a year-to-date basis, revenue dipped 0.1% y-o-y as the gaming business was affected by the lower number of draw days and rising competition.
2Q11 earnings before interest and tax (Ebit) fell 33% y-o-y due to the two percentage points (ppts) hike in pool betting duty on June 1 and the less favourable prize payout ratio of 70% versus 2Q10's 63%. Ebit margin continued to narrow q-o-q due to the higher payout ratio. We expect BToto's gaming margin to improve in 4Q as the government recently approved a reduction in the special prize payout, which we estimate will lower the payout ratio for the Big 4D game by two ppts effective Dec 15.
Although we expect BToto to retain its market leadership in CY11 due to decent punting interest in its flagship 4D game and the boost from its three lotto variants, we expect its lead to be crimped by strong interest in Magnum's 4D Jackpot game. Because of this and the maturity of the NFO market in general, we see some downside risk to our flat to +3% annual topline growth projections for BToto for FY11-13. ' CIMB Research
Thursday, December 2, 2010
KLK - Early Yuletide cheer for KLK
Stock Name: KLK
Company Name: KUALA LUMPUR KEPONG BHD
Research House: CIMB
Kuala Lumpur Kepong Bhd
(DEC 2, RM20.22)
Maintain trading buy at RM19.98 with revised target price RM22.84 (from RM20.20): KL Kepong's 9MFY10 net profit met expectations, squeaking 2% past our forecast and 5% past consensus forecasts. The better performance came from higher investment income and retail profit. A final single-tier dividend of 45 sen was declared, bringing the full-year net dividend to 60 sen, above our forecast of 50 sen.
We are raising our FY11/12 EPS forecasts by 2% to 6% for higher retail profit and rubber prices. Our sum-of-parts-based target price increases from RM20.20 to RM22.84 as we apply a higher price-to-book ratio to its property and retail divisions due to rising land values and Crabtree & Evelyn's improved performance.
KLK remains a 'trading buy' and our top pick among the Malaysian planters as we are positive on crude palm oil (CPO) price and fresh fruit bunch (FFB) output growth prospects for KLK. Potential catalysts include higher CPO prices and potential M&A.
In fourth quarter (4Q), the group recorded a higher write-back of RM76 million relating to its investment in Yule Catto. However, this was partially offset by the impairment of some manufacturing assets. The retail division, represented by Crabtree, posted lower losses due to successful restructuring aimed at reducing operating costs. The effective tax rate was also marginally lower than expected due to tax allowances.
In 4Q, net profit grew 28% year-on-year (y-o-y) due to higher contributions from all divisions except manufacturing. Plantation profit rose 19% y-o-y as a result of higher production (+5% y-o-y) and better selling prices for its palm products and rubber.
Losses from the retail division narrowed due to successful efforts to cut costs for its overseas operations. Manufacturing earnings slumped 52% y-o-y because of lower profit margins from its oloechemical division and impairment of assets in a non-oleochem ical subsidiary. For the full-year, the group posted a 65% jump in its net profit, thanks to better performances from all its divisions plus a higher write-back of the allowance for diminution in the value of investments.
We expect the group to record earnings growth of 13% in 2011, driven by: (i) increased FFB output due to higher yields from its young estates and new mature areas; (ii) stronger earnings from its manufacturing division due to increased capacity and improved demand for oleochemical products; and (iii) higher earnings contribution from its retail division following a successful restructuring. ' CIMB Research, DEC 2
Company Name: KUALA LUMPUR KEPONG BHD
Research House: CIMB
Kuala Lumpur Kepong Bhd
(DEC 2, RM20.22)
Maintain trading buy at RM19.98 with revised target price RM22.84 (from RM20.20): KL Kepong's 9MFY10 net profit met expectations, squeaking 2% past our forecast and 5% past consensus forecasts. The better performance came from higher investment income and retail profit. A final single-tier dividend of 45 sen was declared, bringing the full-year net dividend to 60 sen, above our forecast of 50 sen.
We are raising our FY11/12 EPS forecasts by 2% to 6% for higher retail profit and rubber prices. Our sum-of-parts-based target price increases from RM20.20 to RM22.84 as we apply a higher price-to-book ratio to its property and retail divisions due to rising land values and Crabtree & Evelyn's improved performance.
KLK remains a 'trading buy' and our top pick among the Malaysian planters as we are positive on crude palm oil (CPO) price and fresh fruit bunch (FFB) output growth prospects for KLK. Potential catalysts include higher CPO prices and potential M&A.
In fourth quarter (4Q), the group recorded a higher write-back of RM76 million relating to its investment in Yule Catto. However, this was partially offset by the impairment of some manufacturing assets. The retail division, represented by Crabtree, posted lower losses due to successful restructuring aimed at reducing operating costs. The effective tax rate was also marginally lower than expected due to tax allowances.
In 4Q, net profit grew 28% year-on-year (y-o-y) due to higher contributions from all divisions except manufacturing. Plantation profit rose 19% y-o-y as a result of higher production (+5% y-o-y) and better selling prices for its palm products and rubber.
Losses from the retail division narrowed due to successful efforts to cut costs for its overseas operations. Manufacturing earnings slumped 52% y-o-y because of lower profit margins from its oloechemical division and impairment of assets in a non-oleochem ical subsidiary. For the full-year, the group posted a 65% jump in its net profit, thanks to better performances from all its divisions plus a higher write-back of the allowance for diminution in the value of investments.
We expect the group to record earnings growth of 13% in 2011, driven by: (i) increased FFB output due to higher yields from its young estates and new mature areas; (ii) stronger earnings from its manufacturing division due to increased capacity and improved demand for oleochemical products; and (iii) higher earnings contribution from its retail division following a successful restructuring. ' CIMB Research, DEC 2
JCY - JCY at fresh low since listing as results disappoint, downgrade
Stock Name: JCY
Company Name: JCY INTERNATIONAL BERHAD
Research House: CIMB
KUALA LUMPUR: JCY International Bhd's shares fell to their lowest since listing after the hard-disk drive manufacturer posted fourth quarter losses and was downgraded by analysts.
At 4.06pm, it was down 5.5 sen to 84 sen with 15.6 million shares done on Wednesday, Dec 1.
CIMB Equities Research had downgraded JCY to Underperformwith a target price of 92 sen after it slipped into the red in 4QFY10 with a net loss of RM22 million (RM73.5m profit in 4QFY09), which took FY10 net profit to RM176 million (-15% yoy), 33% below consensus and our forecast.
The negative surprises were lower-than-expected sales and a more severe margin erosion arising from the weaker US$ and higher costs.
'We slash our FY11-12 EPS estimates by 20-28%. In view of the murky near-term outlook and P/E compression for HDD suppliers, we cut our target P/E from 12x CY11 to 8x CY12, in line with the industry average. This reduces our target price from RM1.88 to 92 sen.
'We downgrade the stock from Outperform to UNDERPERFORM as the stock could be de-rated by these poor results. Although we remain positive on its long-term prospects, we believe a better time to revisit the stock would be 2H11,' it said.
Company Name: JCY INTERNATIONAL BERHAD
Research House: CIMB
KUALA LUMPUR: JCY International Bhd's shares fell to their lowest since listing after the hard-disk drive manufacturer posted fourth quarter losses and was downgraded by analysts.
At 4.06pm, it was down 5.5 sen to 84 sen with 15.6 million shares done on Wednesday, Dec 1.
CIMB Equities Research had downgraded JCY to Underperformwith a target price of 92 sen after it slipped into the red in 4QFY10 with a net loss of RM22 million (RM73.5m profit in 4QFY09), which took FY10 net profit to RM176 million (-15% yoy), 33% below consensus and our forecast.
The negative surprises were lower-than-expected sales and a more severe margin erosion arising from the weaker US$ and higher costs.
'We slash our FY11-12 EPS estimates by 20-28%. In view of the murky near-term outlook and P/E compression for HDD suppliers, we cut our target P/E from 12x CY11 to 8x CY12, in line with the industry average. This reduces our target price from RM1.88 to 92 sen.
'We downgrade the stock from Outperform to UNDERPERFORM as the stock could be de-rated by these poor results. Although we remain positive on its long-term prospects, we believe a better time to revisit the stock would be 2H11,' it said.
Thursday, November 25, 2010
DIALOG - A good start for Dialog
Stock Name: DIALOG
Company Name: DIALOG GROUP BHD
Research House: CIMB
Dialog Group Bhd
(RM1.44)
Maintain underperform at RM1.44 with revised target price of RM1.10 (from 95 sen): Dialog's 1QFY11 net profit beat our expectations by coming in at 28% of our full-year forecast, though it was broadly in line with consensus estimates at 22%. We had underestimated contributions from the plant maintenance business. Assuming higher contributions from the plant maintenance business and operations at the Tanjung Langsat terminal (TLT), we raise our EPS forecasts by 4.8% for FY11, 19% for FY12 and 19.6% for FY13. The earnings upgrades and the rollover of our target price to end-CY11 increase our target price from 95 sen to RM1.10, pegged to our revised target market PER of 13.8 times (15 times previously). Dialog remains an 'underperform', with the potential downside triggers being: (i) a slowdown in engineering and construction order book replenishment; and (ii) delay in the Pengerang project. Our top oil and gas pick is SapuraCrest.
In 1QFY11, revenue fell 15% year-on-year (y-o-y) following the completion of major engineering and construction projects in Malaysia and Asia-Pacific. However, net profit rose 23% mostly due to higher contributions from two divisions: (i) Plant maintenance: The division has about RM100 million orders on hand currently and has completed significant works in Malaysia and Singapore; (ii) Centralised tankage facilities: Terminal 1 of TLT started its Phase 1 operations in September 2009 with a capacity of 130,000m''. The 270,000m'' capacity at Phase 2 has been utilised since last April.
Dialog has started work on the RM80 million construction of Terminal 1's Phase 3 (capacity: 80,000m'') and RM180 million construction of Terminal 2 (capacity: 180,000m''). The construction is expected to be completed by end-CY11. Dutch trader Trafigura is both a partner and a client, ensuring long-term commitment and consistent utilisation.
In June 2009, Dialog and the Johor government signed a memorandum of understanding to set up an independent deepwater petroleum terminal in Pengerang. Last month, the state government awarded Dialog exclusive rights to develop the terminal for a 60-year period. We have yet to include its potential contribution in our forecasts. Using the Kertih facility as guidance, we estimate that pre-tax contribution from Pengerang may be no less than RM30 million per year. Dialog is now working on the environmental assessment, which is slated to finish by early CY11. 'CIMB Research
This article appeared in The Edge Financial Daily
Company Name: DIALOG GROUP BHD
Research House: CIMB
Dialog Group Bhd
(RM1.44)
Maintain underperform at RM1.44 with revised target price of RM1.10 (from 95 sen): Dialog's 1QFY11 net profit beat our expectations by coming in at 28% of our full-year forecast, though it was broadly in line with consensus estimates at 22%. We had underestimated contributions from the plant maintenance business. Assuming higher contributions from the plant maintenance business and operations at the Tanjung Langsat terminal (TLT), we raise our EPS forecasts by 4.8% for FY11, 19% for FY12 and 19.6% for FY13. The earnings upgrades and the rollover of our target price to end-CY11 increase our target price from 95 sen to RM1.10, pegged to our revised target market PER of 13.8 times (15 times previously). Dialog remains an 'underperform', with the potential downside triggers being: (i) a slowdown in engineering and construction order book replenishment; and (ii) delay in the Pengerang project. Our top oil and gas pick is SapuraCrest.
In 1QFY11, revenue fell 15% year-on-year (y-o-y) following the completion of major engineering and construction projects in Malaysia and Asia-Pacific. However, net profit rose 23% mostly due to higher contributions from two divisions: (i) Plant maintenance: The division has about RM100 million orders on hand currently and has completed significant works in Malaysia and Singapore; (ii) Centralised tankage facilities: Terminal 1 of TLT started its Phase 1 operations in September 2009 with a capacity of 130,000m''. The 270,000m'' capacity at Phase 2 has been utilised since last April.
Dialog has started work on the RM80 million construction of Terminal 1's Phase 3 (capacity: 80,000m'') and RM180 million construction of Terminal 2 (capacity: 180,000m''). The construction is expected to be completed by end-CY11. Dutch trader Trafigura is both a partner and a client, ensuring long-term commitment and consistent utilisation.
In June 2009, Dialog and the Johor government signed a memorandum of understanding to set up an independent deepwater petroleum terminal in Pengerang. Last month, the state government awarded Dialog exclusive rights to develop the terminal for a 60-year period. We have yet to include its potential contribution in our forecasts. Using the Kertih facility as guidance, we estimate that pre-tax contribution from Pengerang may be no less than RM30 million per year. Dialog is now working on the environmental assessment, which is slated to finish by early CY11. 'CIMB Research
This article appeared in The Edge Financial Daily
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