Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
RHB Equity 360°( MPI, Ta Ann, KLK, RCE, Gent Plant, IJM Land, IJM Plant, IJM Corp, Proton, Tan Chong,Mah Sing, Allianz, MCIL; Technical: UEM Land)

RHB Equity 360°( MPI, Ta Ann, KLK, RCE, Gent Plant, IJM Land, IJM Plant, IJM Corp, Proton, Tan Chong,Mah Sing, Allianz, MCIL; Technical: UEM Land)

Ratings: (0)|Views: 108|Likes:
Published by Rhb Invest
Top Story : MPI – Stronger Growth Ahead Outperform
Briefing Note
- MPI expects 4QFY06/10 revenue to register stronger qoq growth, given that 3QFY06/10 qoq growth of +2.0% which bucks the trend of a seasonally weaker quarter.
- Also, MPI expects 4QFY06/10 net profit to grow sequentially on the back of: 1) higher utilisation rate; 2) stronger contribution from MLP and high-density packages; and 3) margin expansion stemming from higher contribution of high-density packages and cost-cutting measures.
- We understand that overall utilisation rates have increased to 95% from 85% in 2QFY06/10. Note that utilisation rates for Ipoh, Suzhou, and Dynacraft plants currently stands at 95%, 100%, and 90% respectively (vs. 90%, 100%, and 85% in 3QFY06/10).
- Separately, with Ipoh and Suzhou plants currently running at full-capacity, we understand that MPI expects to raise capacity for these plants by 25% and 30% by Sep-10. Note that MPI is targeting to increase its higher-margin MLP capacity to 12m/day by end-FY10 (vs. 8m/day currently). In addition, management had stated that it will be using the spare capacity from the Advance Packages (AP) line to expand its MLP
packages as well as high-density packages. Furthermore, given the capex of around RM3m for its new etch and strip plating capacity, MPI expects capacity for Dynacraft’ to increase by 20%.
- Maintain Outperform with a fair value of RM8.46/share.
Top Story : MPI – Stronger Growth Ahead Outperform
Briefing Note
- MPI expects 4QFY06/10 revenue to register stronger qoq growth, given that 3QFY06/10 qoq growth of +2.0% which bucks the trend of a seasonally weaker quarter.
- Also, MPI expects 4QFY06/10 net profit to grow sequentially on the back of: 1) higher utilisation rate; 2) stronger contribution from MLP and high-density packages; and 3) margin expansion stemming from higher contribution of high-density packages and cost-cutting measures.
- We understand that overall utilisation rates have increased to 95% from 85% in 2QFY06/10. Note that utilisation rates for Ipoh, Suzhou, and Dynacraft plants currently stands at 95%, 100%, and 90% respectively (vs. 90%, 100%, and 85% in 3QFY06/10).
- Separately, with Ipoh and Suzhou plants currently running at full-capacity, we understand that MPI expects to raise capacity for these plants by 25% and 30% by Sep-10. Note that MPI is targeting to increase its higher-margin MLP capacity to 12m/day by end-FY10 (vs. 8m/day currently). In addition, management had stated that it will be using the spare capacity from the Advance Packages (AP) line to expand its MLP
packages as well as high-density packages. Furthermore, given the capex of around RM3m for its new etch and strip plating capacity, MPI expects capacity for Dynacraft’ to increase by 20%.
- Maintain Outperform with a fair value of RM8.46/share.

More info:

Published by: Rhb Invest on May 27, 2010
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF or read online from Scribd
See more
See less

05/12/2014

 
 
Market Dateline
   
PP 7767/09/2010(025354)RHB Research Institute
RHB Equity 360
°
27 May 2010 (MPI, Ta Ann, KLK, RCE, Gent Plant, IJM Land, IJM Plant, IJM Corp, Proton, Tan Chong,Mah Sing, Allianz, MCIL; Technical: UEM Land)Top Story: MPI
Stronger Growth Ahead
Outperform
Briefing Note- MPI expects 4QFY06/10 revenue to register stronger qoq growth, given that 3QFY06/10 qoq growth of +2.0% which bucks the trend of a seasonally weaker quarter.- Also, MPI expects 4QFY06/10 net profit to grow sequentially on the back of: 1) higher utilisation rate; 2)stronger contribution from MLP and high-density packages; and 3) margin expansion stemming from higher contribution of high-density packages and cost-cutting measures.- We understand that overall utilisation rates have increased to 95% from 85% in 2QFY06/10. Note thatutilisation rates for Ipoh, Suzhou, and Dynacraft plants currently stands at 95%, 100%, and 90%respectively (vs. 90%, 100%, and 85% in 3QFY06/10).- Separately, with Ipoh and Suzhou plants currently running at full-capacity, we understand that MPI expectsto raise capacity for these plants by 25% and 30% by Sep-10. Note that MPI is targeting to increase itshigher-margin MLP capacity to 12m/day by end-FY10 (vs. 8m/day currently). In addition, management hadstated that it will be using the spare capacity from the Advance Packages (AP) line to expand its MLPpackages as well as high-density packages. Furthermore, given the capex of around RM3m for its newetch and strip plating capacity, MPI expects capacity for Dynacraft’ to increase by 20%.- Maintain
Outperform
with a fair value of RM8.46/share.
Corporate HighlightsTa Ann:
1QFY10 results likely to be impacted by higher FFB cost
Outperform
 Results Preview- 1Q10 results (due out today) are likely to come in below our expectations. This is mainly due to the sharpincrease in FFB cost of >20% in 1Q10 vs. FY09 (from our initial assumption of a flattish FFB cost yoy). Theincrease in FFB cost was mainly due to higher fertilizer cost following higher fertilizer application on itsplants during the quarter.- Despite the more encouraging sales volume of Tasmanian plywood, the higher cash cost vs. averageselling prices continue to lead the entire plywood division into losses in 1Q10. Nevertheless, we note thataverage selling prices transacted in 2Q10 so far for Tasmania plywood is up (+10-15% qoq), which couldmean that Ta Ann’s plywood division could start to break even during the quarter.- We reduced our earnings forecasts by 11-15% for FY10-12 p.a.- Our SOP-based fair value is reduced to RM6.45 (from RM7.20) based on unchanged 14x FY10 timber division earnings and 14x FY10 plantation division earnings. Maintain Outperform.
IJM :
FY03/10 EBIT Only Grows 3%
Market Perform
1QFY10 Results/Briefing Note- Normalised FY03/10 net profit of RM263.6m came in within our forecast but missed the market consensusby a whopping 15%.- IJM
s outstanding construction orderbook currently stands at about RM3.6bn and it is confident aboutsecuring RM2bn new contracts per annum.- While we gathered from our sources that IJM had won the two Murum access road work packages on
brutally competitive
prices, IJM assured that it
knows the Sarawak market very well
and the job is not
tactical
but profit-driven.
 
- Maintain Market Perform. Fair value is RM4.88.
 
 
Media Chinese Int’l :
FY10 Core Net Profit Surged 95.6% YoY
Outperform
4QFY10 Results/Briefing Note- MCIL’s 4QFY03/10 net profit beat our and consensus expectations. We believe the key variances were: 1)stronger-than-expected margins and a lower-than-expected 4Q effective tax rate.- QoQ, revenue fell 11.6% due to weaker contribution from the print and publishing as 4Q is typically aslower quarter. 4Q10 EBIT plunged 40.5% qoq on the back of the weaker revenue and 7%-pts drop inmargin, which we believe reflects the operating leverage effects while 4Q10 net profit fell by a slower paceof 34% qoq thanks to a lower effective tax rate of 17.7% (vs. 23.5% in 3Q10).- We have lowered our FY11 and FY12 effective tax rate assumptions slightly to around 25% p.a. (fromaround 27.5% p.a.). As a result our FY11 and FY12 earnings forecasts have been raised slightly by 3.3%and 3.2% respectively.- Our fair value is raised to RM1.14 (from RM1.09), based on unchanged target CY10 PER of 13x. Maintain
Outperform
.
Genting Plantation :
Improving Earnings
Underperform
 1QFY10 Results/Briefing Note- Genting Plantation’s (GP) core 1QFY10 net profit was in line with our and consensus expectations, comingin at 21-23% of our and consensus FY10 forecasts. No dividend was declared for the quarter. In 1QFY10,GP’s core net profit rose 88% on the back of a 59% increase in turnover. The increase due to a rise in FFBproduction (+10.4% yoy) and higher CPO prices achieved (+38% yoy); offset slightly by a 10% yoyincrease in cost of production to RM1,076/tonne.- Four key briefing takeaways: : (1) No change in price outlook, still not selling forward; (2) Its all about theweather; (3) Increasing fertiliser application; and (4) tree planting targets on track to be met.- We tweaked our forecasts slightly by between -0.1-0.6% for FY10-12, post- results. No change to our fair value of RM6.65 based on 16.5x CY10 target PE multiple. Although GP’s share price has fallen to our fair value, we maintain our 
Underperform
recommendation for now. We would only look to picking up thisstock, if it falls below our current target price.
Other Corporate Results
Company Quarter Result Results Comment And Changes To Forecasts Recom
Mah Sing 1Q10 In line No change to forecasts. OP, FV =RM2.09IJM Land 4Q10 In line FY03/11-12 net profit forecasts downgraded by 0.7-20.7%. Theremoval of contribution from the RM5bn mixed Canal City project (dueto the delay in land acquisition) more than offsets contribution from thenew project in Vietnam.OP, FV =RM3.06PuncakNiaga1Q10 In line No change to forecasts. UP, FV =RM2.55 IJMP 4QFY03/10 In line After adjusting for FY03/10 earnings, we tweak our forecasts by -2.0%to -4.6% for FY11-12 and introduce our FY13 forecasts. Fair valuereduced slightly to RM2.30, based on unchanged target PER of 16.5xCY10 earnings.UP, FV =RM2.30KLK 2QFY09/10 In line No change to forecasts but revise our SOP-based fair value for KLKdown slightly to RM18.25 (from RM18.40), after taking into account thelatest net debt figure.OP, FV =RM18.25RCE 4QFY03/10 In line We fine-tuned and raised our FY11-12 earnings forecasts by 0.3-1.6%after updating for the full-year results. We also raised our FY11-12 netDPS projections to 1.53 sen p.a. from 0.75 sen p.a. given the higher-than-expected final net DPS of 1.53 sen (vs. expected 0.75 sen). Fair value raised to RM1.18 from RM1.15 based on 11x CY10 EPS.OP, FV =RM1.18Allianz 1Q10 In line No change to forecasts. OP, FV =RM6.68Tan Chong 1Q10 In line No change to forecasts. Maintain fair value of RM 5.26 based on 14x OP, FV =
 
FY10 EPS . RM 5.26Proton 4Q10 In line No change to forecasts. New fair value of RM5.51 based on strippeddown book value.OP, FV=RM5.51
Technical HighlightsDaily Trading Strategy :
 
More To Stay Sidelined Ahead Of The Long Weekend Holiday…
 - Due to the last-minute sell down in selective heavyweights, the FBM KLCI failed to stage a technicalrecovery leg.- With a record of the ninth negative candles in a row, plus a breach to below the immediate support of 1,250yesterday, the index is poised to see a return of selling momentum in the near term.- Though the index may still see a possible jump today based on the “8 to 10 candles” pattern formation, theweaker momentum readings suggest that chances are dwindling lower now.- Instead, the index could head towards the first correction target near the 23.6% FR level at 1,229 and the1,200 pyschological threshold soon, if the selling resumes fast and the index is kept at below 1,250 today.- Therefore, we continue to stay bearish, and expect investors to stay further sidelined ahead of the longweekend holiday. The financial market in Malaysia will be closed for Wesak day on Friday.
Daily Technical Watch: UEM Land Holdings –
Stuck within RM1.15 – RM1.24 to RM1.46 trading region…- 10-day SMA: RM1.297- 40-day SMA: RM1.392- Support: IS = RM1.24 S1 = RM1.15 S2 = RM0.85- Resistance: IR = RM1.46 R1 = RM1.65
Bulletin Board
Co/Sector News Impact Recom
GentingMalaysiaGenting Malaysia has announced that it did notexercise the option to acquire Karridale Limitedfrom KH Digital Ltd at an exercise price of US$27m (approximately RM90.8m) and that thecall option has lapsed. (
Bursa Malaysia 
)Positive, as this will assuage investors’ concernson corporate governance given that this calloption, if exercised, would have been another related party transaction for a company with noguaranteed earnings stream. Recall when GMfirst bought Bromet Ltd and Digital Tree Inc fromKH Digital for US$69m back in Nov 08, investorsreacted negatively and GM’s shares were solddown substantially.MP, FV =2.90Consumer –TobaccoGovernment has deferred the ban on 14 stickcigarettes which was supposed to take effect on1 Jun 10 according to sources. However, it is notknown if a new deadline has been set yet. (
The Edge 
)Neutral. Tobacco players have already startedphasing out their small packs inventory over thepast 5 months and decommissioned / exportedtheir 14s manufacturing equipment. While thismay seem positive in the long term, we believethe uncertainty as to when the deadline will beset will result in industry players not knowingwhether to recommission their 14s productionline or to stick with the current strategy. To re-commission their 14s production would takesome time and we may potentially see further cost increase and revenue loss for the tobaccoplayers if this is done in the short-term. We areunable to assess the impact to BAT’s bottomlineat this juncture, pending further information frommanagement.N (BAT;UP: FV =RM38.95)
Important Dates

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->