STOCK FOCUS OF THE DAY
CB Industrial Product Holdings : Receives RM41.1mil Modipalm
contract
BUY
CB Industrial Product Holding Bhd (CBIP) announced that it
has received a US$12.9mil (RM41.1mil) contract from PT Jas Mulia to build a
Modipalm mill, which will have a capacity of 60 tonnes per hour. PT Jas Mulia
is a plantation company with operations in South Sulawesi. We view this
positively as the new contract would replenish CBIP’s order book and help
sustain its profitability. We reckon that the contract would take 12 to 15
months to be completed. Its earnings would be reflected in CBIP’s FY15F
numbers. Including PT Jas Mulia, we estimate that CBIP has secured RM161mil
mill construction contracts year-to-date.
We have assumed that CBIP would receive RM350mil contracts
in FY14F compared with RM320mil in FY13. As at end-March 2014, the group’s
unbilled mill construction sales stood at RM488mil. This is about 1.4x of
CBIP’s annual mill construction revenue. We believe that CBIP is poised to
secure more overseas contracts. About 25% to 30% of the group’s mill
construction contracts are expected to come from South America, Africa and
Papua New Guinea. The balance 70% to 75% of the contracts is anticipated to be
awarded by Malaysian and Indonesian companies. Maintain BUY on CBIP. The group
is currently trading at an undemanding FY14F PE of 12.9x
Others :
Alliance Financial : A balanced growth
HOLD
Fraser & Neave : EBITDA margin improvement of
0.1ppt YoY HOLD
MISC : Uncertainties remain for the LNG segment
HOLD
Economic Update : Export slows to 7.9% YoY in June; lowest
monthly trade balance in 1H14
QUICK TAKE
Plantation Sector : B5 in East Malaysia delayed to December
2014
NEUTRAL
NEWS HIGHLIGHTS
Axiata Group : China Mobile eyes 20% stake
Malaysian Airline System : Fate to be known soon
MBM Resources : Unit to be Iveco distributor
Sime Darby : Put on S&P’s CreditWatch negative on
proposed acquisition
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