Analyst calls for June 25
KUALA LUMPUR, June 25 — This is a selection of morning calls by local research houses for the day.
From RHB Research
Paramount
The expected weak results this year have largely been priced in, and earnings are set to recover. The market could potentially price the education sector at higher valuations, also possibly with a premium, in view of the 66.5 per cent acceptance of Navis’ takeover offer for SEGi. HELP is currently trading at 16x PE. Given Paramount’s typical earnings breakdown of 70:30 for its property development and education divisions, and assuming a PE of 8.5x and 12x for the respective division, the weighted average PE is about 9.6x. From our recent site visit, we came away with a positive feeling that Paramount’s upcoming and strategically-located projects in Glenmarie, Klang and Shah Alam will do well. Going into 2H12, timing of the upcoming launch of Sejati Residences at Cyberjaya will be ahead of SP Setia’s Eco Glades. Hence, first batch of buyers will be captured before more competition kicks in. Fair value raised to RM2.08. Upgrade to Outperform.
From HwangDBSVickers
Rising on four of the five days, the FBM KLCI accumulated a weekly gain of 23.8-point or 1.5 per cent to finish at 1,603.07 on Friday. From a technical perspective, as the bellwether closes in on its all-time peak, our Malaysian bourse may temporarily overshoot on the upside. This could open a window of opportunity for investors to sell into strength. Essentially, we believe a market rally that is driven by hopes and little else will not likely sustain in the long run.
US markets were up 0.5 - 1.2 per cent at the closing bell on Friday night despite surveys of economists indicating slowing consumer spending and decelerating employment figures.
In spite of that, we think the local bourse will see some selling pressures today following strong gains over the past week and may trend downwards towards its 1,580 support level.
Stocks that could be of interesttoday include: (i) CIMB, amid plans to retain 331 out of about 600 RBS AsiaPacific staff; (ii) Country Heights Holdings, following news that it is planning to set up a hub in KL or Sarawak to house a hospital for traditional Chinese medicine, a university and a college; and (iii) Prestariang, after reports of a foray into the higher education segment via the setting up of a University of Computing.
Dialog
Dialog announced that it has entered into a MoU with Halliburton Energy Services (M) Sdn Bhd to jointly cooperate to pursue projects and opportunities in the re-development of mature oil fields in Malaysia. The strategic partnership will enable Dialog to develop its upstream capabilities in the rejuvenation and redevelopment of mature oil fields as well as development of marginal fields. Halliburton is one of the world’s largest oilfield services companies with operations in more than 70 countries. Dialog can ride on Halliburton’s strength to bid for Petronas’ enhanced oil recovery and marginal field projects to expand its technical services offerings. Potentially, Dialog could leverage on the oilfield services for its Balai cluster of marginal fields which are currently undergoing pre-development phase.
We are optimistic of Dialog’s long-term prospects, as its tank terminal capacity will almost triple to 2.8 million m3 from 1million m3 within three years. The RM5 billion Pengerang project – stretched over seven years – is a major transformation for Dialog, and will drive earnings going forward. Reiterate our Buy call with RM2.95 TP based on SOP methodology.
* These recommendations are solely the opinion of the respective research firms and not endorsed by The Malaysian Insider. The Malaysian Insider shall not be liable for any loss arising from any investment based on any recommendation, forecast or other information contained here.
