At 9.15am, MBSB was up seven sen to RM1.75 with 3.71 million shares traded.
RHB Research maintained its Outperform call on the stock and lifted its fair value for MBSB to RM2.60 from RM2.06, based on unchanged 11x target 2012 PER.
'We have raised our FY11-13 EPS projections by 23.7%/25.1%/28.3% respectively, mainly after raising our net interest margin projections, partly offset by downward revisions to our non-interest income forecasts.
'Our FY11-13 net DPS projections have been raised by 25-30.8%, based on unchanged payout ratio of 30%,' RHB Research said.
MBSB announced on Tuesday its net profit for the second quarter ended June 30, 2011 jumped 58% to RM78.25 million from RM49.51 million a year earlier, due to higher income from Islamic banking operations and conventional business net interest income, lower other operating expenses and lower impairment allowances on loans.
Showing posts with label RHB Marketing Research. Show all posts
Showing posts with label RHB Marketing Research. Show all posts
Thursday, August 4, 2011
Thursday, December 30, 2010
QL - Consumer spending to remain resilient in 2011
Stock Name: QL
Company Name: QL RESOURCES BHD
Research House: RHB
Consumer sector
Maintain neutral: The government recently raised the prices of petrol and sugar by 2.7% and 2.8% respectively, and we expect a similar hike to follow in 1H2011, in line with its plan to reduce subsidies every six months. Due to the gradual and small nature of the subsidy reduction, we believe that it will have a minimal impact on consumer spending, which RHB Research Institute projects will grow by 5.4% in 2011 (against 5.6% estimated for 2010).
The stable consumer spending growth outlook of 5.4% will provide a growth platform for the retail stocks under our coverage that derive their revenues locally. We expect Aeon's ('market perform', fair value = RM6.47) same store sales (SSS) to grow at 3.5% in 2011 (2010: 2.5%). Parkson, on the other hand, will continue to ride on China's strong consumer spending growth in 2011 (2010: 10%), which is expected to grow by 9.4%, according to consensus estimates.
We believe domestic demand for F&B products such as those manufactured and distributed by CI Holdings ('outperform', FV = RM4.90), KFCH ('market perform', FV = RM3.85) and QL Resources ('outperform', FV = RM6.50) will continue to be resilient. However, in terms of growth, we expect F&B companies to be driven by expansion in either capacity (CI Holdings), geographical (KFCH), or both (QL Resources).
Dark days continue for the tobacco sub-sector and BAT ('underperform', FV=RM42.92), as the recent hike in excise duty of about 5% per stick effectively raised cigarette prices for both premium and value segments by 7.5% to 9%. We expect the higher cigarette prices, coupled with other government initiatives to reduce smoking, to cause legal total industry volume (TIV) to contract by 6% in 2011. Unlike tobacco, the brewery sub-sector was spared a hike in excise duty in Budget 2011, marking the fifth time in a row duty was not raised. However, Malaysia's excise duty on beer is the second highest in the world after Norway.
Risks include a further drop in consumer disposable income and rising costs of goods and services, reducing spending power.
We maintain our 'neutral' stance on the sector. Our top pick is CI Holdings as we are optimistic on its growth outlook. In our view, the stock is still inexpensive relative to its F&B peers. ' RHB Research Institute Sdn Bhd
Company Name: QL RESOURCES BHD
Research House: RHB
Consumer sector
Maintain neutral: The government recently raised the prices of petrol and sugar by 2.7% and 2.8% respectively, and we expect a similar hike to follow in 1H2011, in line with its plan to reduce subsidies every six months. Due to the gradual and small nature of the subsidy reduction, we believe that it will have a minimal impact on consumer spending, which RHB Research Institute projects will grow by 5.4% in 2011 (against 5.6% estimated for 2010).
The stable consumer spending growth outlook of 5.4% will provide a growth platform for the retail stocks under our coverage that derive their revenues locally. We expect Aeon's ('market perform', fair value = RM6.47) same store sales (SSS) to grow at 3.5% in 2011 (2010: 2.5%). Parkson, on the other hand, will continue to ride on China's strong consumer spending growth in 2011 (2010: 10%), which is expected to grow by 9.4%, according to consensus estimates.
We believe domestic demand for F&B products such as those manufactured and distributed by CI Holdings ('outperform', FV = RM4.90), KFCH ('market perform', FV = RM3.85) and QL Resources ('outperform', FV = RM6.50) will continue to be resilient. However, in terms of growth, we expect F&B companies to be driven by expansion in either capacity (CI Holdings), geographical (KFCH), or both (QL Resources).
Dark days continue for the tobacco sub-sector and BAT ('underperform', FV=RM42.92), as the recent hike in excise duty of about 5% per stick effectively raised cigarette prices for both premium and value segments by 7.5% to 9%. We expect the higher cigarette prices, coupled with other government initiatives to reduce smoking, to cause legal total industry volume (TIV) to contract by 6% in 2011. Unlike tobacco, the brewery sub-sector was spared a hike in excise duty in Budget 2011, marking the fifth time in a row duty was not raised. However, Malaysia's excise duty on beer is the second highest in the world after Norway.
Risks include a further drop in consumer disposable income and rising costs of goods and services, reducing spending power.
We maintain our 'neutral' stance on the sector. Our top pick is CI Holdings as we are optimistic on its growth outlook. In our view, the stock is still inexpensive relative to its F&B peers. ' RHB Research Institute Sdn Bhd
Wednesday, December 22, 2010
PLUS - PLUS raised to 'trading buy' at RM5.20
Stock Name: PLUS
Company Name: PLUS EXPRESSWAYS BHD
Research House: RHB
PLUS Expressways Bhd, Malaysia's biggest toll road operator, was upgraded to "trading buy" from "underperform" at RHB Research Institute Sdn Bhd after receiving a RM26 billion takeover offer from Jelas Ulung Sdn Bhd, topping a rival bid.
The fair value was raised to RM5.20 from RM4.60 to "match the latest offer," Lim Tee Yang, an analyst at RHB Research said in a report today.
Company Name: PLUS EXPRESSWAYS BHD
Research House: RHB
PLUS Expressways Bhd, Malaysia's biggest toll road operator, was upgraded to "trading buy" from "underperform" at RHB Research Institute Sdn Bhd after receiving a RM26 billion takeover offer from Jelas Ulung Sdn Bhd, topping a rival bid.
The fair value was raised to RM5.20 from RM4.60 to "match the latest offer," Lim Tee Yang, an analyst at RHB Research said in a report today.
Thursday, December 16, 2010
KFC - KFCH fast-tracking growth in India
Stock Name: KFC
Company Name: KFC HOLDINGS (M) BHD
Research House: RHB
KFC Holdings (M) Bhd
( RM3.81)
Upgrade to market perform at RM3.76 with fair value of RM3.85: KFCH announced that it is acquiring 100% of Kernel Foods Pte Ltd, via its subsidiary Pune Chicken Restaurants, by way of acquiring the total equity interest of the latter for RM84,000 and subscribing to an additional RM2.4 million worth of shares.
We understand that Kernel Foods has two KFC restaurants in Pune, India, where KFCH is currently running one of its stores in Deccan Mall. After the completion, KFCH will have three stores in Pune in total. Due to the higher number of stores in the city, KFCH will be able to enjoy more competitive rates from suppliers in terms of supply logistics, which would improve the overall profitability of its stores in India. While we consider this to be a positive move, we prefer to keep our profit margin forecasts for India unchanged for now, until we see some positive synergies coming through.
We believe the total purchase price of RM2.5 million is fair. Based on our previous discussions with management, it usually costs approximately RM1 million to RM1.2 million in set-up costs for KFCH to open a store in India. Furthermore, the direct purchase of the stores reduces the execution risk which is usually associated with opening a new 'greenfield' store. Recall that we previously highlighted that KFCH had some hiccups in opening new stores due to various construction and red-tape issues.
With the completion of the acquisition, KFCH will effectively have seven stores in total in the state of Maharashtra (currently five), which is the only state it is allowed to operate in currently. We consider this purchase as a new store opening, thus the total of seven store openings in FY10 is in line with our assumptions.
we make no change to our forecasts. Risks include: (i) bird/swine flu escalation; (ii) escalation of corn and soyabean prices, which would eat into margins; and (iii) deteriorating consumer spending power, resulting in lower same-store sales (SSS) growth.
We are maintaining our fair value for KFCH at RM3.85, based on unchanged 17 times target FY11 PER. We are, however, upgrading our call on the stock to 'market perform' (from 'underperform' previously) as we believe the downside risk from its current share price is minimal. ' RHB Research Institute
Company Name: KFC HOLDINGS (M) BHD
Research House: RHB
KFC Holdings (M) Bhd
( RM3.81)
Upgrade to market perform at RM3.76 with fair value of RM3.85: KFCH announced that it is acquiring 100% of Kernel Foods Pte Ltd, via its subsidiary Pune Chicken Restaurants, by way of acquiring the total equity interest of the latter for RM84,000 and subscribing to an additional RM2.4 million worth of shares.
We understand that Kernel Foods has two KFC restaurants in Pune, India, where KFCH is currently running one of its stores in Deccan Mall. After the completion, KFCH will have three stores in Pune in total. Due to the higher number of stores in the city, KFCH will be able to enjoy more competitive rates from suppliers in terms of supply logistics, which would improve the overall profitability of its stores in India. While we consider this to be a positive move, we prefer to keep our profit margin forecasts for India unchanged for now, until we see some positive synergies coming through.
We believe the total purchase price of RM2.5 million is fair. Based on our previous discussions with management, it usually costs approximately RM1 million to RM1.2 million in set-up costs for KFCH to open a store in India. Furthermore, the direct purchase of the stores reduces the execution risk which is usually associated with opening a new 'greenfield' store. Recall that we previously highlighted that KFCH had some hiccups in opening new stores due to various construction and red-tape issues.
With the completion of the acquisition, KFCH will effectively have seven stores in total in the state of Maharashtra (currently five), which is the only state it is allowed to operate in currently. We consider this purchase as a new store opening, thus the total of seven store openings in FY10 is in line with our assumptions.
we make no change to our forecasts. Risks include: (i) bird/swine flu escalation; (ii) escalation of corn and soyabean prices, which would eat into margins; and (iii) deteriorating consumer spending power, resulting in lower same-store sales (SSS) growth.
We are maintaining our fair value for KFCH at RM3.85, based on unchanged 17 times target FY11 PER. We are, however, upgrading our call on the stock to 'market perform' (from 'underperform' previously) as we believe the downside risk from its current share price is minimal. ' RHB Research Institute
Friday, December 10, 2010
THPLANT - RHB Research initiates coverage on TH Plantations, FV RM2.30
Stock Name: THPLANT
Company Name: TH PLANTATIONS BHD
Research House: RHB
KUALA LUMPUR: RHB Research Institute is initiating an Outperform call on TH PLANTATION []s and assigned it a PE of 11 times FY11 and fair value of RM2.30.
The research house said on Friday, Dec 10 TH Plantations is the plantation arm of Lembaga Tabung Haji and it has plantation land bank of about 39,159 hectares and five palm oil mills with a total milling capacity of 702,000 tonnes per annum.
'We project TH Plantations THP to record a three-year earnings CAGR of 25% to FY12, on the back of a three-year revenue CAGR of 14%.
'The reason for the stronger profit growth is the higher CPO prices as well as an expectation of improved FFB yields, which translate to better margins. We project net dividend payouts at a consistent 55-60% p.a., which translate to attractive net yields of 5.6% for FY10, rising to 7-8% for FY11-12,' it said.
RHB Research said TH Plantations' earnings are very sensitive to CPO price movements and every RM100/tonne change in CPO price would impact earnings by 10%-12% per annum.
'Assigning it a PE of 11 times FY11, which is the mid-point of its historical average, we arrive at a fair value of RM2.30. Initiate with Outperform,' it said.
Company Name: TH PLANTATIONS BHD
Research House: RHB
KUALA LUMPUR: RHB Research Institute is initiating an Outperform call on TH PLANTATION []s and assigned it a PE of 11 times FY11 and fair value of RM2.30.
The research house said on Friday, Dec 10 TH Plantations is the plantation arm of Lembaga Tabung Haji and it has plantation land bank of about 39,159 hectares and five palm oil mills with a total milling capacity of 702,000 tonnes per annum.
'We project TH Plantations THP to record a three-year earnings CAGR of 25% to FY12, on the back of a three-year revenue CAGR of 14%.
'The reason for the stronger profit growth is the higher CPO prices as well as an expectation of improved FFB yields, which translate to better margins. We project net dividend payouts at a consistent 55-60% p.a., which translate to attractive net yields of 5.6% for FY10, rising to 7-8% for FY11-12,' it said.
RHB Research said TH Plantations' earnings are very sensitive to CPO price movements and every RM100/tonne change in CPO price would impact earnings by 10%-12% per annum.
'Assigning it a PE of 11 times FY11, which is the mid-point of its historical average, we arrive at a fair value of RM2.30. Initiate with Outperform,' it said.
JTIASA - Jaya Tiasa a plantation company in the making
Stock Name: JTIASA
Company Name: JAYA TIASA HOLDINGS BHD
Research House: RHB
Jaya Tiasa Holdings Bhd
()
Maintain outperform at RM4.02 with revised target price of RM4.83 (from RM5.31): Owing to firm log prices and an improvement in log production of 8.6% quarter-on-quarter (q-o-q) in 2QFY2011 ending April, we expect Jaya Tiasa to report better earnings from its log division in its upcoming quarterly results. Going forward, we believe the tight log supply situation in Sarawak is likely to continue for another few months due to seasonal factors before log production starts to normalise.
Average selling prices for Jaya Tiasa's plywood division crept up by 3.1% q-o-q in 1QFY2011, while capacity utilisation rate improved to 60% (from 54% in 4QFY2010). Management agreed that demand volume is not that great but is sufficient for plywood prices to improve gradually. We note that South Korea's contribution to total plywood sales in 1QFY2011 has declined to a mere 6% (from 22% in 4QFY2010) due to the preliminary anti-dumping duties imposed on Malaysian plywood products by South Korea since early July.
Jaya Tiasa has revised downwards its fresh fruit bunch (FFB) production targets for future years, a result of lower assumptions of mature areas and average yield per hectare. We believe management is erring on the conservative side, as the revised FFB production forecast for FY2011 appears easily achieved based on current production levels and even after taking into account the potentially lower output in 2HFY2011 due to seasonal factors.
Risks include: i) timber and CPO prices falling; ii) a slower than expected recovery in the global economy; and iii) significant increase in crude oil-related glue and logistics costs.
We cut our FY2011/13 net profit by 6.1% to 9.7%, after adjusting for; i) lower FFB and CPO production projections; ii) a declining trend in cost of production per tonne; iii) higher interest expense going forward; and iv) lower depreciation expense.
We reduce our target price for Jaya Tiasa to RM4.83 (from RM5.31 previously) based on unchanged target PER of 12 times CY2011 earnings for the timber division and 13 times CY2011 earnings for the plantation division. Despite the cut in our target price, we maintain our outperform recommendation on Jaya Tiasa given the decent 20% potential upside as well as the significant upcoming change in its earnings profile, which will see the plantation division contributing about 70% to 75% of earnings from FY2011 onwards (from about 40% previously). ' RHB Research Institute Sdn Bhd
Company Name: JAYA TIASA HOLDINGS BHD
Research House: RHB
Jaya Tiasa Holdings Bhd
()
Maintain outperform at RM4.02 with revised target price of RM4.83 (from RM5.31): Owing to firm log prices and an improvement in log production of 8.6% quarter-on-quarter (q-o-q) in 2QFY2011 ending April, we expect Jaya Tiasa to report better earnings from its log division in its upcoming quarterly results. Going forward, we believe the tight log supply situation in Sarawak is likely to continue for another few months due to seasonal factors before log production starts to normalise.
Average selling prices for Jaya Tiasa's plywood division crept up by 3.1% q-o-q in 1QFY2011, while capacity utilisation rate improved to 60% (from 54% in 4QFY2010). Management agreed that demand volume is not that great but is sufficient for plywood prices to improve gradually. We note that South Korea's contribution to total plywood sales in 1QFY2011 has declined to a mere 6% (from 22% in 4QFY2010) due to the preliminary anti-dumping duties imposed on Malaysian plywood products by South Korea since early July.
Jaya Tiasa has revised downwards its fresh fruit bunch (FFB) production targets for future years, a result of lower assumptions of mature areas and average yield per hectare. We believe management is erring on the conservative side, as the revised FFB production forecast for FY2011 appears easily achieved based on current production levels and even after taking into account the potentially lower output in 2HFY2011 due to seasonal factors.
Risks include: i) timber and CPO prices falling; ii) a slower than expected recovery in the global economy; and iii) significant increase in crude oil-related glue and logistics costs.
We cut our FY2011/13 net profit by 6.1% to 9.7%, after adjusting for; i) lower FFB and CPO production projections; ii) a declining trend in cost of production per tonne; iii) higher interest expense going forward; and iv) lower depreciation expense.
We reduce our target price for Jaya Tiasa to RM4.83 (from RM5.31 previously) based on unchanged target PER of 12 times CY2011 earnings for the timber division and 13 times CY2011 earnings for the plantation division. Despite the cut in our target price, we maintain our outperform recommendation on Jaya Tiasa given the decent 20% potential upside as well as the significant upcoming change in its earnings profile, which will see the plantation division contributing about 70% to 75% of earnings from FY2011 onwards (from about 40% previously). ' RHB Research Institute Sdn Bhd
Friday, November 12, 2010
SUNREIT - RHB Research maintains Outperform on Sunway REIT, unch FV RM1.05
Stock Name: SUNREIT
Company Name: SUNWAY REAL ESTATE INVT TRUST
Research House: RHB
KUALA LUMPUR: RHB Research Institute is maintaining its Outperform call on Sunway REIT, with an unchanged fair value (FV) of RM1.05.
In a research , it said the FV was based on a 7% target yield on its FY12 dividend per unit (DPU) forecast of 7.3 sen.
RHB Research said Sunway REIT's 1QFY11 realised net profit of RM38.4 million was in line with its and market expectations.
'Note that, 1QFY11 earnings contribution only started since 8th July 2010. A 1.51 sen DPU was declared during the quarter, on track to meet our DPU forecast of 6.7 sen for FY11,' it said
The research house expected earnings from the remaining nine months of FY11 to come in stronger.
Company Name: SUNWAY REAL ESTATE INVT TRUST
Research House: RHB
KUALA LUMPUR: RHB Research Institute is maintaining its Outperform call on Sunway REIT, with an unchanged fair value (FV) of RM1.05.
In a research , it said the FV was based on a 7% target yield on its FY12 dividend per unit (DPU) forecast of 7.3 sen.
RHB Research said Sunway REIT's 1QFY11 realised net profit of RM38.4 million was in line with its and market expectations.
'Note that, 1QFY11 earnings contribution only started since 8th July 2010. A 1.51 sen DPU was declared during the quarter, on track to meet our DPU forecast of 6.7 sen for FY11,' it said
The research house expected earnings from the remaining nine months of FY11 to come in stronger.
Wednesday, November 10, 2010
DAYANG - Dayang falls, despite positive earnings outlook
Stock Name: DAYANG
Company Name: DAYANG ENTERPRISE HOLDINGS BHD
Research House: RHB
KUALA LUMPUR: Shares of Dayang Enterprise Bhd fell in the afternoon session on Tuesday, Nov 9 despite the stronger earnings and upbeat outlook for the company but some investors might not have favoured its rights issue plan,
At 3.04pm, it was down 11 sen to RM2.93 with 2.28 million shares done. The FBM KLCI rose 3.15 points to 1,522.99. Turnover was 1.0 billion shares valued at RM1.18 billion.
Dayang's third quarter earnings doubled to RM22.63 million from RM11.03 million a year ago due to higher value of work orders received and performed.
It also proposed a one-for-four bonus issue of 88 million new shares and also a renounceable rights issue of 110 million new shares on the basis of one rights shares for every four shares held.
RHB Research said the near-term outlook for Dayang was positive on sustained news flow.
'After our earnings revision, our fair value has been raised to RM3.86/share (from RM3.01 previously), based on FY11 EPS of 25.7 sen on unchanged 15 times PER. This implies an upside of 26.9%. Maintain Outperform,' it said.
Company Name: DAYANG ENTERPRISE HOLDINGS BHD
Research House: RHB
KUALA LUMPUR: Shares of Dayang Enterprise Bhd fell in the afternoon session on Tuesday, Nov 9 despite the stronger earnings and upbeat outlook for the company but some investors might not have favoured its rights issue plan,
At 3.04pm, it was down 11 sen to RM2.93 with 2.28 million shares done. The FBM KLCI rose 3.15 points to 1,522.99. Turnover was 1.0 billion shares valued at RM1.18 billion.
Dayang's third quarter earnings doubled to RM22.63 million from RM11.03 million a year ago due to higher value of work orders received and performed.
It also proposed a one-for-four bonus issue of 88 million new shares and also a renounceable rights issue of 110 million new shares on the basis of one rights shares for every four shares held.
RHB Research said the near-term outlook for Dayang was positive on sustained news flow.
'After our earnings revision, our fair value has been raised to RM3.86/share (from RM3.01 previously), based on FY11 EPS of 25.7 sen on unchanged 15 times PER. This implies an upside of 26.9%. Maintain Outperform,' it said.
Tuesday, November 9, 2010
RHBCap sees record 2010/11 earnings
RHB Capital Bhd, the best performer on Malaysia's benchmark equity index this year, expects record earnings for 2010 and 2011 as lending accelerates and the company expands in overseas markets.
Profit at Malaysia's fourth-largest banking group may climb to RM1.4 billion (US$453 million) this year from RM1.2 billion in 2009, managing director Tajuddin Atan said in an interview yesterday in Kuala Lumpur. Profit is expected to keep rising in 2011, he said.
RHB's loan growth may exceed 15 per cent this year, almost double the industry pace, Tajuddin said. The Kuala Lumpur-based bank plans to generate about a fifth of its profit from abroad in five years, up from 4 per cent now, as it expands in Southeast Asia, he said.
'The profits are coming in and we know it's sustainable,' Tajuddin said. 'Malaysia's economy is doing quite well, with the impetus that has been put forward by the government.'
Malaysia's gross domestic product may grow as much as 6 per cent next year after expanding 7 per cent in 2010, according to an Oct. 15 Ministry of Finance report. Prime Minister Datuk Seri Najib Razak's government has identified US$444 billion in projects led by non-state companies to spur investment.
Shares of RHB, controlled by Malaysia's biggest pension fund, fell 0.1 per cent to RM8.08 at the 5 pm close of trading in Kuala Lumpur yesterday. The stock's 52 per cent advance this year makes it the best performer on the nation's FTSE Bursa Malaysia KLCI Index, which has climbed 19 per cent.
bIndonesia Takeover
Malayan Banking Bhd, the country's biggest lender by assets, posted a record profit for the 12 months ended June 30, helped by earnings at PT Bank Internasional Indonesia, which it bought in 2008.
RHB, whose net income almost tripled from 2006 to the end of last year, aims to complete the acquisition and listing of Indonesian lender PT Bank Mestika Dharma by the first quarter of 2011, pending regulatory approval, Tajuddin said. The company plans to list the bank on the Jakarta Stock Exchange before completing the purchase.
That acquisition may double RHB's share of earnings coming from abroad to 8 per cent of the total, Tajuddin said. Apart from Indonesia, both Thailand and Vietnam look 'promising,' he said. The company has an office in Vietnam and branches in Singapore, Thailand and Brunei. -- Bloomberg
Profit at Malaysia's fourth-largest banking group may climb to RM1.4 billion (US$453 million) this year from RM1.2 billion in 2009, managing director Tajuddin Atan said in an interview yesterday in Kuala Lumpur. Profit is expected to keep rising in 2011, he said.
RHB's loan growth may exceed 15 per cent this year, almost double the industry pace, Tajuddin said. The Kuala Lumpur-based bank plans to generate about a fifth of its profit from abroad in five years, up from 4 per cent now, as it expands in Southeast Asia, he said.
'The profits are coming in and we know it's sustainable,' Tajuddin said. 'Malaysia's economy is doing quite well, with the impetus that has been put forward by the government.'
Malaysia's gross domestic product may grow as much as 6 per cent next year after expanding 7 per cent in 2010, according to an Oct. 15 Ministry of Finance report. Prime Minister Datuk Seri Najib Razak's government has identified US$444 billion in projects led by non-state companies to spur investment.
Shares of RHB, controlled by Malaysia's biggest pension fund, fell 0.1 per cent to RM8.08 at the 5 pm close of trading in Kuala Lumpur yesterday. The stock's 52 per cent advance this year makes it the best performer on the nation's FTSE Bursa Malaysia KLCI Index, which has climbed 19 per cent.
bIndonesia Takeover
Malayan Banking Bhd, the country's biggest lender by assets, posted a record profit for the 12 months ended June 30, helped by earnings at PT Bank Internasional Indonesia, which it bought in 2008.
RHB, whose net income almost tripled from 2006 to the end of last year, aims to complete the acquisition and listing of Indonesian lender PT Bank Mestika Dharma by the first quarter of 2011, pending regulatory approval, Tajuddin said. The company plans to list the bank on the Jakarta Stock Exchange before completing the purchase.
That acquisition may double RHB's share of earnings coming from abroad to 8 per cent of the total, Tajuddin said. Apart from Indonesia, both Thailand and Vietnam look 'promising,' he said. The company has an office in Vietnam and branches in Singapore, Thailand and Brunei. -- Bloomberg
SUNRISE - Sunrise surges on takeover offer
Stock Name: SUNRISE
Company Name: SUNRISE BHD
Research House: RHB
KUALA LUMPUR: RHB Research is maintaining its Outperform on SUNRISE BHD [] with a revised fair value of RM3 (cum dividend basis of the offer price) following a notice of conditional takeover offer from UEM LAND HOLDINGS BHD [].
The research house said on Monday, Nov 8 that given that the offer involves share swap, the share price performance of Sunrise will largely depend on the price performance of UEM Land shares. Some weakness in share price may be expected after ex-dividend date, as some shareholders may not want to own UEM Land shares but would like to benefit from the dividend.
'We maintain our Outperform rating on the stock with a revised fair value of RM3 (cum dividend basis of the offer price),' it said.
Last Thursday, Sunrise has received a notice of conditional takeover offer from UEM Land to acquire all Sunrise shares at an offer price of RM2.80 per share to be satisfied in either of the following manner, at the election of shareholders:
(i) through the issuance of new ULHB shares at an issue price of RM2.10 each and Sunrise shareholders will receive about 1.33 ULHB shares for every share surrendered; or
(ii) through the issuance of redeemable convertible preference shares (RCPS) at an issue price of RM1.00 each and Sunrise shareholders will receive 2.80 RCPS for every share surrendered.
Company Name: SUNRISE BHD
Research House: RHB
KUALA LUMPUR: RHB Research is maintaining its Outperform on SUNRISE BHD [] with a revised fair value of RM3 (cum dividend basis of the offer price) following a notice of conditional takeover offer from UEM LAND HOLDINGS BHD [].
The research house said on Monday, Nov 8 that given that the offer involves share swap, the share price performance of Sunrise will largely depend on the price performance of UEM Land shares. Some weakness in share price may be expected after ex-dividend date, as some shareholders may not want to own UEM Land shares but would like to benefit from the dividend.
'We maintain our Outperform rating on the stock with a revised fair value of RM3 (cum dividend basis of the offer price),' it said.
Last Thursday, Sunrise has received a notice of conditional takeover offer from UEM Land to acquire all Sunrise shares at an offer price of RM2.80 per share to be satisfied in either of the following manner, at the election of shareholders:
(i) through the issuance of new ULHB shares at an issue price of RM2.10 each and Sunrise shareholders will receive about 1.33 ULHB shares for every share surrendered; or
(ii) through the issuance of redeemable convertible preference shares (RCPS) at an issue price of RM1.00 each and Sunrise shareholders will receive 2.80 RCPS for every share surrendered.
Thursday, November 4, 2010
KLK - KL Kepong acquires another Indonesian company
Stock Name: KLK
Company Name: KUALA LUMPUR KEPONG BHD
Research House: RHB
Kuala Lumpur Kepong Bhd
(Nov 4, RM19.74)
Maintain outperform at RM19.78 with fair value at RM24.70: Kuala Lumpur Kepong (KLK) has entered into an agreement to acquire a 95% stake in PT Anugrah Surya Mandiri (PT ASM) for IDR13,585 million (RM4.72 million).
PT ASM holds a location permit (izin lokasi) for 3,700ha of land in Kampung Batu Putih, Kecamatan Batu Putih, Kabupaten Berau, Indonesia, which it intends to develop into oil palm plantations.
The purchase consideration will be financed by KLK's internally generated funds and the acquisition is expected to be completed in 1Q2012.The acquisition price of RM4.72 million'' for an effective 3,515ha of land works out to RM1,342 per ha, which is in line with other greenfield land transactions in Indonesia of RM1,200 to RM2,000 per ha.
We are positive on the acquisition as it would provide KLK with synergies, given that the land is adjacent to one of KLK's plantations in Kalimantan Timur. We estimate this acquisition will increase KLK's Indonesian landbank by about 2.6% to 136,630ha.
Main risks include: (i) a convincing reversal in crude oil price trends resulting in reversal of crude palm oil (CPO) and other vegetable oils price trends; (ii) weather abnormalities resulting in an over or under-supply of vegetable oils; (iii) revision in global biofuel mandates and trans-fat policies; and (iv) a slower than expected global economic recovery, resulting in lower than expected demand for vegetable oils.
We expect contributions from this acquisition to come through only in FY15/16, assuming KLK is able to start planting immediately once the acquisition is completed, while the acquisition cost of RM4.72 million would have already been included in our capital expenditure (capex) assumptions for FY11.
We maintain our sum-of-parts (SOP)-based fair value for KLK at RM24.70. We continue to like KLK for its inexpensive valuations (it remains the cheapest among the big-cap plantation stocks) and for its strong management with a good track record.
Further catalysts could come from better than expected fresh fruit bunch (FFB) production growth as well as sustainable return to profitability of the retail division. We maintain our 'outperform' rating on the stock. ' RHB Research Institute
Company Name: KUALA LUMPUR KEPONG BHD
Research House: RHB
Kuala Lumpur Kepong Bhd
(Nov 4, RM19.74)
Maintain outperform at RM19.78 with fair value at RM24.70: Kuala Lumpur Kepong (KLK) has entered into an agreement to acquire a 95% stake in PT Anugrah Surya Mandiri (PT ASM) for IDR13,585 million (RM4.72 million).
PT ASM holds a location permit (izin lokasi) for 3,700ha of land in Kampung Batu Putih, Kecamatan Batu Putih, Kabupaten Berau, Indonesia, which it intends to develop into oil palm plantations.
The purchase consideration will be financed by KLK's internally generated funds and the acquisition is expected to be completed in 1Q2012.The acquisition price of RM4.72 million'' for an effective 3,515ha of land works out to RM1,342 per ha, which is in line with other greenfield land transactions in Indonesia of RM1,200 to RM2,000 per ha.
We are positive on the acquisition as it would provide KLK with synergies, given that the land is adjacent to one of KLK's plantations in Kalimantan Timur. We estimate this acquisition will increase KLK's Indonesian landbank by about 2.6% to 136,630ha.
Main risks include: (i) a convincing reversal in crude oil price trends resulting in reversal of crude palm oil (CPO) and other vegetable oils price trends; (ii) weather abnormalities resulting in an over or under-supply of vegetable oils; (iii) revision in global biofuel mandates and trans-fat policies; and (iv) a slower than expected global economic recovery, resulting in lower than expected demand for vegetable oils.
We expect contributions from this acquisition to come through only in FY15/16, assuming KLK is able to start planting immediately once the acquisition is completed, while the acquisition cost of RM4.72 million would have already been included in our capital expenditure (capex) assumptions for FY11.
We maintain our sum-of-parts (SOP)-based fair value for KLK at RM24.70. We continue to like KLK for its inexpensive valuations (it remains the cheapest among the big-cap plantation stocks) and for its strong management with a good track record.
Further catalysts could come from better than expected fresh fruit bunch (FFB) production growth as well as sustainable return to profitability of the retail division. We maintain our 'outperform' rating on the stock. ' RHB Research Institute
Tuesday, November 2, 2010
SEONG - RHB Research maintains FV for Wah Seong at RM2.21
WAStock Name: WASEONG
Company Name: WAH SEONG CORPORATION BHD
Research House: RHB
KUALA LUMPUR: RHB Research is maintaining its fair value of RM2.21 for Wah Seong Corp Bhd and is keeping its market perform recommendation.
The research house said on Tuesday, Nov 2 that it believes much of the negative sentiment surrounding the sector has been priced in by investors. Share prices did not experience any significant pull-back during the quarterly results reporting in Aug and in fact some stocks have performed strongly in recent months.
'Two main reasons for this: 1) Sustained crude oil prices above the US$70 per barrel mark; and the 2) Resolution of several global energy issues,' it said.
AmResearch said in the short-term, it believes several stocks to see ample trading interest on the back of positive newsflows.
They are stocks linked to the initiatives planned in the Economic Transformation plan (Dialog); provide brownfield services to the domestic energy market (Dayang/ Kencana); and; Are in the same value chain as the two Petronas listings (Kencana/Petronas Gas) could see ample trading interest on the back of positive newsflows.
Company Name: WAH SEONG CORPORATION BHD
Research House: RHB
KUALA LUMPUR: RHB Research is maintaining its fair value of RM2.21 for Wah Seong Corp Bhd and is keeping its market perform recommendation.
The research house said on Tuesday, Nov 2 that it believes much of the negative sentiment surrounding the sector has been priced in by investors. Share prices did not experience any significant pull-back during the quarterly results reporting in Aug and in fact some stocks have performed strongly in recent months.
'Two main reasons for this: 1) Sustained crude oil prices above the US$70 per barrel mark; and the 2) Resolution of several global energy issues,' it said.
AmResearch said in the short-term, it believes several stocks to see ample trading interest on the back of positive newsflows.
They are stocks linked to the initiatives planned in the Economic Transformation plan (Dialog); provide brownfield services to the domestic energy market (Dayang/ Kencana); and; Are in the same value chain as the two Petronas listings (Kencana/Petronas Gas) could see ample trading interest on the back of positive newsflows.
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