Affin Daily Insight (LV) - 26 August 2014 - UMWOG / FGV / IOIPG / BENALEC / AMMB / EVSD

Top Calls

Results Note � UMW -OG (REDUCE, maintain) - Solid results but largely priced-in UWM-OG�s 2Q14 net profit grew by 12.3% qoq to RM60.3m driven by additional revenue from new jack-up rig, NAGA-5 that commenced operation in May-2014, higher utilisation of hydraulic workover unit, GAIT 3, and higher commission income from agency sales of specialised drilling equipment and services. For the 1H14, UMW-OG achieved RM114m of net profit, broadly within consensus and our expectations. No change to our earnings forecast, REDUCE rating and TP of RM3.65 based on 21x CY15 EPS. While we are like UMW-OG for its strong management and the positive prospects of the regional jack-up rigs market, we believe that these positives are largely priced-in. At its current valuation of 23.1x CY15 PER, UMW-OG is valued at 154% premium to global rigs operator (9.1x CY15 PER) and 17% premium to domestic O&G big caps average CY15 PER of 19.7x.

Other Calls

Results Note � Felda Global Ventures (ADD, maintain) - CPO price weakened further, below expectations

Results Note � IOI Properties (ADD, upgrade) - Results are within expectations, upgrade to ADD on share price weakness

Results Note � Benalec Hldgs (TR BUY, maintain) - Below expectations as some profits shift to FY15

Flash Note � AMMB (SELL, maintain) - Disposal of AmFraser Securities

Flash Note � Eversendai (BUY, maintain) - Secured RM113m stadium contract in Qatar

Morning N9ews & Market Summary