Thursday, May 15, 2014

Malaysia Daily, Maybank KE (2014-05-15)



Daily
15 May 2014
COMPANY UPDATE
Axiata Group: Maintain Hold
The onset of Axis integration  Shariah-compliant
  • XL's EBITDA was in line at 25% of ours and consensus full year forecasts.
  • Axis was consolidated for just 12 days in 1Q; management's guidance of 3 years to EBITDA breakeven remains unchanged.
  • Maintain HOLD on Axiata, with an unchanged TP of MYR7.00.
RESULTS REVIEW
Cahya Mata Sarawak: Maintain Buy
Stronger growth ahead  Shariah-compliant
  • 1Q14 results met our expectation.
  • We expect earnings to be stronger in the coming quarters; we maintain our earnings forecasts.
  • Reiterate BUY at unchanged SOP-based TP of MYR10.50.
Tan Chong Motor: Downgrade to Hold
Significantly disappoints
  • 1Q14 MYR42m net profit made up just 14%/13% of our/ consensus initial full-year forecasts, hit by intense price discounting.
  • Cutting FY14/15/16 earnings forecasts by 34%/23%/13% on lower: (i) vehicle sales and (ii) EBITDA margins assumptions.
  • Downgrade to HOLD; TP lowered by 23% to MYR5.25 (unchanged 12x FY15 PER).
Technicals
Re-testing 1,882.20 very soon

The FBMKLCI advanced 13.12 points to 1,879.20 yesterday, while the FBMEMAS and FBM100 gained 82.63 points and 82.66 points, respectively. In terms of market breadth, the gainer-to-loser ratio was 521-to-283, while 319 counters were unchanged. A total of 1.83b shares were traded valued at MYR2.47b.
Click here for full report »
Other Local News
Latitude, Poh Huat: Halt operations in Vietnam due to riots. The Vietnam and China dispute has affected two listed companies on Bursa Malaysia - Latitude Tree Holdings Bhd and Poh Huat Furniture Industries Bhd. Latitude is unable to ascertain when production can be resumed. All its factory buildings, machinery and equipments are insured against the risk of rioting. (Source: Bursa Malaysia)

PDZ: Buys 20% equity interest in Efogen for MYR18m. PDZ Holdings Bhd intends to buy a 20% equity interest in offshore vessel operator Efogen Sdn Bhd for MYR18m cash. As part of the agreement, Johany, the MD and CEO of Efogen, has guaranteed that Efogen's consolidated net operating profit after tax and minority interest would not be less than MYR11.74m for FYE Apr 2015. (Source: Bursa Malaysia)

OCK: Seeks listing transfer to Main Market. ACE market-listed OCK Group Bhd has announced its plan to transfer the listing of and quotation of its shares to the Main Market of Bursa Malaysia. It has also proposed a 1-for-2 bonus issue to reward shareholders and to improve the trading liquidity of its shares. (Source: Bursa Malaysia)
Outside Malaysia
China: Central bank called on the nation's biggest lenders to accelerate the granting of mortgages, a sign that developers' prices cuts and incentives alone won't boost a slumping housing market and economy. The People's Bank of China told 15 banks to "improve efficiency of service, give timely approval and distribution of mortgages to qualified buyers," according to a statement posted on its website. It also urged lenders to give priority to families buying their first homes and strengthen their monitoring of credit risks. (Source: Bloomberg)

Japan: Economy accelerated in 1Q 2014 before tax increase. Gross domestic product grew at an annualized 5.9% from the previous quarter, the Cabinet Office said. Consumer spending increased 2.1% on quarter, while business investment rose 4.9%. (Source: Bloomberg)

Vietnam: Anti-China protesters damage Taiwan-owned companies. Anti-China rallies sparked by the placement of an oil rig in waters near Vietnam damaged factories owned by Taiwanese companies, with some plants closing as Vietnam detained hundreds of protesters. Vietnam's government has called for the removal of the Chinese exploration rig from waters near the contested Paracel Islands, with Prime Minister Nguyen Tan Dung describing China's move as "extremely dangerous." (Source: Bloomberg)

Australia: Prime Minister Tony Abbott will cut net debt sales 36% in the coming fiscal year, using cost curbs and extra levies that are eroding support for his government. Australia's debt will increase by AUD 40b (USD 37b) in the 12 months from July 1 as it runs a seventh budget deficit, Treasurer Joe Hockey said. The cut in issuance comes after sales ballooned in the wake of the 2008 global financial crisis. (Source: Bloomberg)
   
Key Indices
Value
YTD (%)
Daily (%)
KLCI
1,879.2
0.7
0.7
JCI
4,991.6
16.8
1.4
STI
3,259.1
2.9
1.1
SET
1,396.0
7.5
1.5
HSI
22,582.8
(3.1)
1.0
KOSPI
2,010.8
(0.0)
1.4
TWSE
8,875.2
3.1
0.6




DJIA
16,614.0
0.2
(0.6)
S&P
1,888.5
2.2
(0.5)
FTSE
6,878.5
1.9
0.1




MYR/USD
3.2
(1.7)
(0.5)
CPO (1mth)
2,672.0
1.7
0.8
Crude Oil (1mth)
102.4
4.0
0.7
Gold
1,306.0
8.7
1.0












TOP STOCK PICKS



Buy rated large caps

Price
Target
Tenaga

12.04
14.00
Genting Msia

4.21
4.74
HLBK

14.10
16.40
AMMB Holdings

7.21
8.50
Bumi Armada

3.90
5.00
IJM Corp

6.46
6.75
MPHB Capital

1.92
2.42










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