Selected Stock Hot News: 2009

TA Securities has downgraded major Malaysian stocks to "sell" because of higher probability for more significant profit-taking correction ahead.

The downgraded stocks include CIMB, Gamuda, IOI Corp, Sime Darby, Tenaga and TM .

The research firm also has a “maintain sell or take profit" call on Kencana Petroleum, SapuraCrest and Kurnia Asia for further correction from recent gains.

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Tuesday, September 29, 2009

GCorp, Hai-O, Poh Kong, Gamuda, Johan, Berjata Corp, LB Alum

General Corp. 2Q Net MYR24.5M Vs MYR4.56M
Hai-O Enterprise 1Q Net MYR18.5M Vs MYR13.6M
Poh Kong 4Q Net MYR9.15M Vs MYR6.27M
Gamuda 4Q Net MYR43.3M Vs MYR70.2M
Johan 2Q Net MYR7.27M Vs MYR5.56M
Berjaya Corp. 1Q Net MYR40.9M Vs MYR33.0M
LB Aluminium 1Q Net MYR5.34M Vs MYR3.99M
Asia-Pacific Political, Economic, Corp Calendar
US Stocks Close Higher On M&A Boost; DJIA Up 124 Pts

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Monday, September 28, 2009

ECM, Berjaya Land, AZRB, Salcon, Public Bank, CBIP, Steel Sectors, Multi Sports

ECM Libra Financial Group Bhd posted net profit of RM15.41 million in the second quarter ended July 31, a contrast from the net loss of RM4.15 million a year ago.

Announcing its results on Sept 28, it said revenue rose 182% to RM34.17 million from RM12.1 million a year ago. Earning per share were 1.88 sen compared with loss per share of 0.5 sen.

"For the current quarter under review, the group recorded a profit before tax of RM15.6 million. This is largely contributed by increased level of broking activities resulting in net brokerage income of RM13.9 million. In addition, the group recorded RM6.4 million in investment and trading income," it said.

On the outlook, it said the group's fundamentals and balance sheet remained strong and it expected to show satisfactory performance in the current financial year.

For the first half, net profit increased 188% to RM20.35 million from RM7.06 million in the previous corresponding period. Revenue increased 52.5% to RM57.41 million from RM37.65 million.

BERJAYA LAND BHD []'s first quarter net profit surged 76% to RM78.11 million for the period ended July 31, 2009 from RM44.36 million a year ago, boosted by the writeback of impairment in value of investments in associated companies and its Toto betting operations.

However, it cautioned that its hotels and resorts business may continue to be affected by the current global outbreak of Influenza A(H1N1) but it expected its gaming business under Berjaya Sports Toto to remain resilient.

BLand said on Sept 28 that revenue slipped slightly to RM952.63 million from RM963.91 million a year ago. Pre-tax profit was RM119.9 million compared with RM83.76 million. Earnings per share were 2.34 sen versus 0.05 sen.

"The lower revenue was mainly due to the lower revenue reported by the hotels and resorts division that was adversely affected by the outbreak of Influenza A(HINI) as well as the prevailing global economic crisis," it said.

As for the higher pre-tax profit, this was mainly due to the higher profit contribution from the gaming business arising from lower prize payout and significant net investment related income in spite of the lower profit contribution from the hotels and resorts division.

Toto betting operations accounted for RM824.9 million of the revenue of RM952.63 million.

The 1Q revenue, when compared with the fourth quarter ended April 30, 2009, showed the revenue declined to RM952.63 million from RM971.7 million but pre-tax profit rose to RM119.9 million from RM83.76 million.

"The decrease in revenue was mainly due to the lower revenue contribution from the gaming business when compared to the preceding quarter which was partly mitigated by the higher revenue reported by the hotels and resorts division.

"The higher pre-tax profit in this current quarter under review was mainly attributed to the investment related income as well as higher profit contribution from the hotels and resorts division compared to the preceding quarter where the group incurred impairment loss on its quoted investments, certain of its property, plant and equipment and investments in associated companies and jointly controlled entities," it said.

On the prospects, BLand said given the prevailing global economic conditions, the property market continues to remain soft and the hotels and resorts business may continue to experience setback from the current global outbreak of Influenza A(H1N1). However, it expected the gaming business under BToto to remain resilient.

"With this backdrop and barring unforeseen circumstances, the directors are of the view that the group's operating performance for the remaining quarters of the financial year ending 30 April 2010 will remain satisfactory," it said.

KUALA LUMPUR (Dow Jones)--Malaysian construction firm Ahmad Zaki Resources Bhd (7078.KU) confirmed Monday it has bid for infrastructure work related to the Hulu Terengganu hydroelectric power plant project, but has not been awarded any contracts yet.

"At this stage, we can confirm that we have bid for the project but at present no letter of award has been secured with respect to the works," the company said in a stock exchange filing.

The Edge financial daily had reported, citing unnamed sources, that the company was close to getting a MYR50 million ($14.4 million) contract involving clearing works and building roads at the dam project.

The daily said a letter of award has yet to be given by Tenaga Nasional Bhd (5347.KU), which is building the 250-megawatt plant.

CIMB rates Salcon (8567.KU) at Buy based on daily charts; technical analyst notes stock edged above 30- and 50-day moving average at 52 sen, now testing channel resistance at 54.5 sen. "This may be an early sign of more upswings ahead," analyst says in report. Adds, technical landscape improving; notes MACD about to turn positive while RSI rising towards upper band of neutral zone. "Traders may start to nibble now to capitalize on this uptrend rally," analyst says. Expects resistance at 56.5 sen (September 25 peak), 57.5 sen (July 16 peak) and 61.0 sen (June 26 peak). Suggests tight stop if stock breaks below 52 sen. Shares last down 1.9% at 53 sen. (VGB)

Affin Investment keeps Buy rating on Public Bank (1295.KU) but cuts target price to MYR12.30 from MYR12.80 after marginal downward adjustment to FY10 net earnings. Fair value derived from from ROE of 26.5% FY10 (previously 26.9%), cost of equity of 9.4% and long-term growth rate of 3.3%. Analyst Rachel Huang says management process remains intact despite recent issues over health of Chairman and major shareholder Teh Hong Piow but remains concerned over long-term strategic direction of the group. "We expect the upgrade momentum in target price to be limited in the longer-term due to shareholder succession," she says. Key risks to recommendation are uncertainty over possible changes in strategic direction, higher than expected NPLs. Stock last 0.4% lower at MYR10.22. (VGB)

AmResearch keeps Buy call on CB Industrial Product Holdings (7076.KU) with unchanged fair value of MYR3.85 based on FY10 PE of 8X. "Valuations are undemanding and fundamentals remain sound. CBIP's seven-year average historical PE is 12X," says analyst Gan Huey Ling. Notes also associate performance which weighed on CBIP's bottomline in 1H09 expected to turn around in 2H09. CBIP also confident of securing MYR134 million in contracts for more Modipalm mills; will boost total contracts awarded this year to MYR269 million. Shares untraded at MYR3.21. (VGB)

AmResearch stays Overweight on Malaysian Steel sector; selects Ann Joo Resources (6556.KU) as top pick with Buy rating and MYR3.20 target price; this after online news portal steelmillsoftheworld.com says India's steel demand expected to rise 8%-10% in 2010 as Indian Government rolls-out series of infrastructure projects under its fiscal stimulus, says analyst Mak Hoy Ken. Also, notes "acceleration of infrastructure works in key markets such as Vietnam, Indonesia and Abu Dhabi" will lift regional steel prices moving into 4Q09. Channel checks revealed locked-in orders for billet exports by millers have surged to as high as $515/tonne in current quarter vs 3-year low of $343/tonne in March 2008, he adds. Selling prices have stabilized around MYR2000 to MYR2100/tonne; believes recovery in domestic steel demand pick up by end-2H09 ahead of pump-priming activities by Malaysian Government. Estimates domestic steel prices may reach MYR3,000/tonne by 2010. Ann Joo +1.3% at MYR2.40. (VGB)

Multi Sports Target RM1.03
On Sep 25, ‘09 Multi Sports entered into an agreement with Fujian Xueyu Property Co. Ltd for the acquisition of a 3.12-hectare parcel of land of in Xibin Town, Jinjiang Province, which has 2 completed factory buildings of six-storeys each with an aggregate built-up area of 17,631.6 sq m, for a total cash consideration of about RM15.0m.
OUR TAKE. Increasing production capacity. The acquisition shows the Group’s conviction in increasing its annual production capacity by an estimated 50m pairs of sports shoe soles to 74.6m pairs over the next 2 years. Purchasing the Xibin land with 2 newly-completed six-storey buildings would enable the Group to commence the purchase and installation of production machinery to ramp up production earlier than initially planned. Given its strong balance sheet in the form of net cash of RM33.7m (as at 2QFY09), funding is not a concern. Operating at maximum capacity. According to the management, its orderbook is 3 times its current capacity. As such, the Group has had to reject orders whenever it plans for its yearly production due to limited resources. We believe the acquisition of the 2 buildings would help Multi-Sports to fast-track its expansion plans and ramp up production capacity. Apart from the 2 buildings, Xibin Land has also been granted construction rights to 3 more factory buildings and 2 dormitories.
Strategic location. Management believes that the Xibin land, which has a strategic location, also has the potential to attract sports shoe manufacturers after the completion of the proposed road at the west border of the land in the near future. A recap of 1HFY09 results. In its 2QFY09 results released in August, the Group reported revenue of RM95.3m and net profit of RM24.7m, representing 50% of its 1HFY08 results and 47% of our full-year forecast of RM52.1m. We maintain our fair value of RM1.03 based on 5.4x FY10 EPS.