Analyst call Feb 21
KUALA LUMPUR, Feb 21 — This is a selection of morning calls by local research houses for the day.HwangDBS Vickers
Market Preview
Our Malaysian bourse may continue to climb slowly and steadily amid positive foreign news flows. The benchmark FBM KLCI will probably advance towards the immediate resistance target of 1,580 ahead.
While Wall Street was on holiday yesterday, most European stock markets rose overnight. Essentially, investors remained confident that the eurozone finance ministers would be able to wrap up talks for Greece to meet certain conditions in exchange for international bailout funds.
Back home, hoping to ride on the improving market sentiment are stocks like: (a) Mitrajaya Holdings, which has secured the awards of 3 construction projects (to build LRT stations and apartments) worth RM182m; (b) Nilai Resources Group, in response to a selective capital reduction and repayment proposal made by its major shareholder at a cash offer price of RM1.50 per share (versus its current share price of RM1.30); and (c) Notion VTech, after proposing a 3-for-4 bonus issue and an issuance of free warrants on the basis of 1 warrant for every 4 existing shares held prior to the bonus issue.
OSK Research
COMEX Gold futures
The commodity is still locked within a consolidation range but positive candles have emerged. This will likely lead to a
higher price but a prudent investor should wait until a break out of the sideways range occurs.
HOT STOCK: Wijaya Baru Global Bhd - Resistance Level Broken
The stock upward movement was hampered by the strong resistance of RM0.80, despite making a higher high in Dec last year. Buying support was, nonetheless, present as it has traded sideways and the expected rally may have finally started following the break out from the sideways range last week.
RHB Equity Focus
Axiata – 4Q Likely To Be Muted (Market Perform)
We believe Axiata’s upcoming 4Q11 results on 23 Feb will be tepid, as we expect relatively core net profit to stay relatively flat.
While we expect mid single-digit yoy revenue growth, Axiata’s 4Q earnings growth will be somewhat affected by margin erosion at XL and RM appreciation (8-11per cent yoy) vs. Indian Rupee (INR) and Bangladeshi Taka (BDT).
Genting Plantations (Market Overperform)
GP’s Jan FFB production growth continues to be strong on a yoy basis, growing 30.2per cent yoy, although on a mom basis, it fell by 16.2per cent from Dec 11. Management has raised its production growth target for FY12 to double-digit (from 6per cent previously), coming from yield improvement in Sabah and new land coming into maturity in Indonesia (10,800ha by end-2012).
Our forecasts have been raised by 0.9-1.8per cent for FY12-13, while our fair value has been raised to RM10.90 (from RM10.70) based on unchanged 17x CY12 target PER. Maintain Outperform.
Lingui – Core Net Profit Declines By 17per cent QoQ (Trading Buy)
Lingui’s 2QFY06/12 core net profit of RM44.3m came in at 42per cent of our full-year forecast. We view this to be in line with our forecast as we expect a stronger 2HFY06/12 due to higher sales volume as reconstruction activities in Japan gain pace.
2QFY06/12 core net profit declined by 17per cent qoq to RM20.1m mainly dragged down by higher taxation, despite a slight improvement in margins due to an increase in sales volume.
Forecasts maintained. Fair value is RM1.63 per share, representing the indicative privatisation offer price proposed by SSC.
Affin – Loan impairment writeback sustains FY11 Net Profit Growth (Underperform)
4Q11 results were slightly ahead of our but in line with consensus expectations. The key variance was lower-than-expected loan impairment allowances.
FY12-13 net profit projections updated for the results. Fair value raised to RM3.16 from RM3.10 but Underperform recommendation maintained.
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.
