SPECIAL FEATURE
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Heng Huat Resources: Not Rated
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Turning
waste to gold
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- The
largest biomass material manufacturer in Malaysia with a lion
share of 47.4%.
- Recent
acceptance of biomass materials and eco-friendly policies,
mainly in China, to drive growth.
- Attaching
a 40% discount to the market�s PER
of 16.1x, we derive an indicative fair value of MYR0.49.
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COMPANY UPDATE
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AirAsia: Maintain Buy
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Trading
on the cheap, BUY
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- AirAsia's
share price is barely off its 3-year low despite recording a
respectable 1Q14 earnings.
- FY14
outlook is positive, with scope for market share gain and higher
yields, factors that will lead to earnings recovery.
- Maintain
BUY with an unchanged TP of MYR2.65 as valuation is attractive
relative to global peers.
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ACQUISITIONS / DISPOSAL
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TSH Resources: Maintain Hold
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Acquiring
greenfield land Shariah-compliant
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- We are positive
on TSH�s
proposed acquisition of 9,000ha greenfield land in Indonesia,
lifting its landbank by 10%.
- Previously
proposed acquisition of Sabah estate which has lapsed, is not a
concern due to sufficient plantable reserves.
- Our
earnings forecasts are unchanged. Maintain Hold.
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Technicals
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Index
inched up slightly
The FBMKLCI inched up by 1.72 points to 1,884.87 on Monday, while the
FBMEMAS and FBM100 rose 8.05 points and 5.82 points, respectively. We
recommend a �Nibble on
Dips� stance for
the index.
Trading idea is a Take Profit call on MEDIA with downside target
areas at MYR2.19 & MYR2.01.
Click here for full report »
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Other Local News
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MSM:
Plans global expansion. MSM Malaysia Holdings Bhd, the
country�s largest
refined sugar maker, aims to be one of the world�s top three
producers by 2016. MSM president and chief executive officer Datuk Dr
Sheikh Awab Sheikh Abod said the firm is on an expansion drive and
wants to do it fast via mergers and acquisitions. If it materialises,
MSM will produce some 13m tonnes of refined sugar per year, from 1.25
tonnes at present. MSM is the sugar arm of Felda Global Ventures
Holdings Bhd (FGV) and it has a war chest of some MYR650m. (Source:
Business Times)
Scomi: Powers Brazil monorail project. Scomi Engineering Bhd�s monorail
technology will power the S�o Paulo Line
18 project in Brazil, which is scheduled to begin early, next year,
says its chief executive officer Kanesan Veluppillai. He said it
would function as the technology provider to Consorcio ABC Integrado,
which was awarded the Public Private Partnership project for a
concession period of 25 years. Scomi Engineering would provide
services in design of rolling stock and track switches, supply of
vehicle management system and bogies as well as system integration.
The Line 18 project spans 14.35km. (Source: The Star)
Notion VTec: Close to securing deals. Precision parts maker
Notion Vtec Bhd is close to clinching two to three deals from
Japanese and South Korean firms to manufacture smartphone components,
which could bring in MYR40m to MYR50m in annual revenue, said its
executive chairman Thoo Chow Fah. While the deals would start contributing
to the group�s bottom
line late next year, Thoo declined to name the firms involved. However,
the results will be known in a few weeks� time and an
announcement is expected to be made soon. (Source: The Edge Financial
Daily)
Property: TREC expected to be completed by end-2015. TREC, a
MYR152m lifestyle and entertainment development at Jalan Tun Razak
here, is expected to be completed by the end of next year. The
project is developed by Avant City Sdn Bhd, a company 35%-owned by
Modern Falcon Sdn Bhd, which is led by Cher Ng, the founder and
managing director of TREC. The seven-acre lifestyle and entertainment
hub located across the Tun Razak will be similar to Hong Kong�s Lan Kwai
Fong, China�s Xin Tian
Di in Shanghai and Singapore�s Clark
Quay. It will be built on land owned by the Royal Selangor Golf Club
that has lease tenure of 34 years. According to Ng, a 70% tenant mix
had been secured so far and the company is still actively courting
other tenants. (Source: The Star)
Infrastructure: MYR400m KTM tender in the works. A tender to
help refurbish a Keretapi Tanah Melayu Bhd (KTMB) railway line for
about MYR400m may be called this year. It is understood that the
Economic Planning Unit under the Prime Minister�s Department
has approved a plan to refurbish 13 stations and 300km of tracks
between Gemas, Negri Sembilan, and Gua Musang, Kelantan. Transport
Ministry sources said around MYR30m will be allocated to fund
critical works during the refurbishment. The Land Public Transport
Commission (SPAD) has requested KTMB to stop operating the line,
effective June 27, to make way for the refurbishment. KTMB, however,
submitted a proposal to delay it to August 15, which is after the
Hari Raya celebrations. (Source: Business Times)
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Outside Malaysia
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U.S:
Broad-based sales gain in June points to stronger growth. The 0.2%
MoM gain in purchases followed a 0.5% MoM advance in May that was
larger than previously reported, Commerce Department figures showed.
While the increase was less than projected, due to an unexpected
decline in auto sales, demand climbed in nine of 13 major retail
categories. (Source: Bloomberg)
Germany: ZEW investor confidence in July declines for seventh
month as slower growth and geopolitical risks weighed on the
outlook for Europe's largest economy. The ZEW Center for European
Economic Research in Mannheim said its index of investor and analyst
expectations, which aims to predict economic developments six months
in advance, dropped to 27.1 from 29.8 in June. The gauge has dropped
every month since reaching a seven-year high in December. (Source:
Bloomberg)
U.K: Inflation accelerates more than forecast in June; fueling
speculation the Bank of England could raise interest rates within
months. Consumer prices rose 1.9% YoY, up from 1.5% YoY in May, the
Office for National Statistics said. Upward pressure came mainly from
clothing, food and air travel. (Source: Bloomberg)
India: CPI lowest in 2-1/2 years as monsoon poses price risk.
Consumer prices rose 7.31% YoY in June, compared with 8.28% YoY in
May, the Statistics Ministry in New Delhi said. That's the slowest
pace since the index was created. The wholesale-price index moderated
to 5.43 % YoY after a 6.01% YoY gain in May, the Commerce Ministry
separately reported. (Source: Bloomberg)
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Key Indices
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Value
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YTD
(%)
|
Daily
(%)
|
KLCI
|
1,884.9
|
1.0
|
0.0
|
JCI
|
5,070.8
|
18.6
|
1.0
|
STI
|
3,291.4
|
3.9
|
0.0
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SET
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1,524.5
|
17.4
|
(0.3)
|
HSI
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23,460.0
|
0.7
|
0.5
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KOSPI
|
2,012.7
|
0.1
|
0.9
|
TWSE
|
9,569.2
|
11.1
|
0.5
|
|
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DJIA
|
17,060.7
|
2.9
|
0.0
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S&P
|
1,973.3
|
6.8
|
(0.2)
|
FTSE
|
6,710.5
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(0.6)
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(0.5)
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MYR/USD
|
3.2
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(2.6)
|
0.2
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CPO (1mth)
|
2,375.0
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(9.6)
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0.0
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Crude Oil (1mth)
|
100.0
|
1.6
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(0.9)
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Gold
|
1,294.1
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7.7
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(1.0)
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TOP STOCK PICKS
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|
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Buy rated large caps
|
|
Price
|
Target
|
Tenaga
|
|
12.50
|
14.00
|
Axiata
|
|
6.91
|
7.60
|
Sime Darby
|
|
9.63
|
10.30
|
Genting Msia
|
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4.24
|
4.70
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Gamuda
|
|
4.24
|
5.30
|
UMW O&G
|
|
4.18
|
5.15
|
AFG
|
|
5.10
|
5.50
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MPHB Capital
|
|
2.23
|
2.42
|
Perdana Petroleum
|
|
1.85
|
2.55
|
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