Shares of Multi-Purpose Holdings Bhd, a Malaysian betting and financial services group, are worth as much as RM3.24 each to reflect its plan to roll out property projects this year, CIMB Investment Bank Bhd said. -- Bloomberg
8 months ago
Wednesday, March 31, 2010
Supermax raises after-tax profit target
Supermax Corp, a Malaysian rubber glove maker, said it raised its internal after-tax profit target to RM168 million for 2010 from RM136 million, to reflect higher demand for its products.
The company expects sales to increase by about RM300 million this year, it said in a statement today. It had sales of RM814.8 million last year, Supermax said.
The company’s exports of medical examination gloves to the US will increase by an additional 5 to 7 per cent this year following US healthcare reforms, it said.
Group managing director Stanley Thai said Supermax's production capacity will rise to 21.7 billion pieces by the end of 2011 from an expected 17.6 billion at the end of this year.
Its output capacity was at 14.5 billion pieces at the end of 2009, he said. -- Bloomberg
The company expects sales to increase by about RM300 million this year, it said in a statement today. It had sales of RM814.8 million last year, Supermax said.
The company’s exports of medical examination gloves to the US will increase by an additional 5 to 7 per cent this year following US healthcare reforms, it said.
Group managing director Stanley Thai said Supermax's production capacity will rise to 21.7 billion pieces by the end of 2011 from an expected 17.6 billion at the end of this year.
Its output capacity was at 14.5 billion pieces at the end of 2009, he said. -- Bloomberg
Tuesday, March 30, 2010
Faber Group (1368.KU) at Buy, with target price of MYR3.55
Faber Group (1368.KU) at Buy, with target price of MYR3.55.
Faber, which is top facilities management services to hospitals in Malaysia, has expanded overseas, with MYR216 million/year worth of contracts in Middle East, MYR20 million/year contracts in India. House says Faber is a proxy to resilient healthcare industry, with its local concessions expected to be renewed in 2011 for another 15 years; calls stock "grossly undervalued" as it has solid earnings visibility and is trading at only 2011 PE of 7.5X, with a cash-rich balance sheet. Stock last +2.6% at MYR2.37.
Extracted from yy's blog
Faber, which is top facilities management services to hospitals in Malaysia, has expanded overseas, with MYR216 million/year worth of contracts in Middle East, MYR20 million/year contracts in India. House says Faber is a proxy to resilient healthcare industry, with its local concessions expected to be renewed in 2011 for another 15 years; calls stock "grossly undervalued" as it has solid earnings visibility and is trading at only 2011 PE of 7.5X, with a cash-rich balance sheet. Stock last +2.6% at MYR2.37.
Extracted from yy's blog
Between Proton and DRB
OSK: Affordable Luxury Cars If Discussions Between Proton And Volkswagen Materialises
KUALA LUMPUR, March 29 (Bernama) -- Skoda or even the luxury Audi at an affordable price range is possible, if discussions between Proton Holdings Bhd and Volkswagen to set up a completely knocked down (CKD) plant here materialises, says OSK Research.
Last week, Proton Chief Executive Officer, Datuk Syed Zainal Abidin Syed Mohamed Tahir confirmed that the company is in discussion with the German automaker.
"The feasibility of this potential tie-up is expected to be announced by the end of the first half of this year.
"If it materialises by 2011, the said plant will manufacture Volkswagen sedan vehicles catering to the domestic and export market, predominantly in the Asean region," the research house said in a statement, Monday.
It added that if Volkswagen does set up its hub here, the initial investment would be less than US$200 million.
"Last year, the company inked a partnership deal with IndoMobil to set up a CKD assembly plant in East Jakarta, Indonesia, to manufacture its MPV line-up at an initial investment of US$140 million.
"With its proposed CKD plant in Malaysia and noting the presence of an MPV manufacturing plant in Indonesia, we see the local facility catering to the production of the Sedan segment," the statement noted.
OSK also opined that Proton's Shah Alam plant is the most likely candidate for the CKD facility, as it is known for its established infrastructure.
Previously, Volkswagen had shown interest in Proton's manufacturing infrastructure, to establish a CKD hub catering for the Asian market.
In a related development, the up-trend in DRB-Hicom Bhd's share price has become more aggressive lately, on speculation of a strong possibility of the company securing a CKD deal with Volkswagen rather than Proton, says OSK Research.
"With both Proton and DRB in the picture, it remains to be seen which plant Volkswagen would eventually opt for," the statement added.
-- BERNAMA
KUALA LUMPUR, March 29 (Bernama) -- Skoda or even the luxury Audi at an affordable price range is possible, if discussions between Proton Holdings Bhd and Volkswagen to set up a completely knocked down (CKD) plant here materialises, says OSK Research.
Last week, Proton Chief Executive Officer, Datuk Syed Zainal Abidin Syed Mohamed Tahir confirmed that the company is in discussion with the German automaker.
"The feasibility of this potential tie-up is expected to be announced by the end of the first half of this year.
"If it materialises by 2011, the said plant will manufacture Volkswagen sedan vehicles catering to the domestic and export market, predominantly in the Asean region," the research house said in a statement, Monday.
It added that if Volkswagen does set up its hub here, the initial investment would be less than US$200 million.
"Last year, the company inked a partnership deal with IndoMobil to set up a CKD assembly plant in East Jakarta, Indonesia, to manufacture its MPV line-up at an initial investment of US$140 million.
"With its proposed CKD plant in Malaysia and noting the presence of an MPV manufacturing plant in Indonesia, we see the local facility catering to the production of the Sedan segment," the statement noted.
OSK also opined that Proton's Shah Alam plant is the most likely candidate for the CKD facility, as it is known for its established infrastructure.
Previously, Volkswagen had shown interest in Proton's manufacturing infrastructure, to establish a CKD hub catering for the Asian market.
In a related development, the up-trend in DRB-Hicom Bhd's share price has become more aggressive lately, on speculation of a strong possibility of the company securing a CKD deal with Volkswagen rather than Proton, says OSK Research.
"With both Proton and DRB in the picture, it remains to be seen which plant Volkswagen would eventually opt for," the statement added.
-- BERNAMA
Monday, March 29, 2010
FPI – RM1.10
Our daily, weekly and monthly charts indicate that FPI is in a very strong uptrend. We suggest buying FPI on dips to the support areas of RM0.93 and RM1.10. We expect FPI to rise towards its target areas of RM1.45, RM1.75 and RM2.15 in the medium-term. Stop-loss is at RM0.91.
On the fundamental side, we do not cover FPI. Other houses do not cover the stock too. It pays a consistent yearly dividend of at least 5% over the last few years. This makes FPI a very stable buy for the medium-term.Our daily, weekly and monthly charts indicate that FPI has further strong upside potential. The very strong chart buy signals reaffirmed our positive views on FPI. We believe this is a good opportunity to buy FPI at its keysupport areas of RM0.93 to RM1.10 on any price declines, with stop-loss at RM0.91.
From a technical point of view, FPI has been gaining interest as volume picked up recently. Its price trend is in a strong upward phase, with 19-day moving average trending way above its 50-day moving average line. As such, this points to a very strong upward momentum move for FPI. Directional movement indicators began reflecting the daily uptrend in end April 2009 and till today continues to point upward. Its weekly Parabolic also supports FPI’s rising price trend.
Contrarian indicators (such as RSI and Stochastic indicators) also indicate a firm upward momentum for FPI. FPI will potentially break above RM1.13 (a key resistance level) in a very bullish Ascending Triangle formation.
FPI is involved in producing and assembling a variety of audio systems, such as home theater systems, carspeakers, high-end audio systems, WiFi-internet radios, receptor radios and other audio speakers. The maincustomers of FPI are well known brands like Sony, Kenwood, Boston, Marantz, Onkyo, Denon and Koi. Its largest shareholder is PNB with a 24.78 stake%. FPI in turn, also owns the largest stake in ACOSTEC (another speaker maker) listed on Bursa Malaysia.
FPI’s latest 3Q10 recorded a group turnover and net profit growth of 5% and 9.5% respectively QoQ, while YoY turnover and rose 14% while net profit grew by 12 times. The YoY-improved performance was attributed to better product mix and higher sales. We feel that the improving economic condition in countries that FPIexports to, are gaining strength as consumer spending improves. A breakdown in revenue from a geographic point shows the following sales contribution for the 9-month period, Malaysia with RM197.8m (49.7%), Asia(46.8%), Europe (1.2%), other America (2.2%) and other countries (0.1%). FPI’s balance sheet shows that it is in a strong cash position. Other positives are that non-current liabilities have been on a down trend since 2002, while improving sales with declining account receivables QoQ probably explains its strengthening cash position.
On the fundamental side, neither Maybank IB nor Bloomberg has coverage on FPI. This is probably due to its mid-size capitalisation and lack of volatility. Nevertheless, its balance sheet and strong cash position warrants very keen investor interest as duly reflected in its recent steady price rise. We also note that FPI indicated dividend yield for the past 12 months is at 7.66%. Over the last few years, the consistent dividend yield that paid was about 5%.
Extracted from yy's blog
On the fundamental side, we do not cover FPI. Other houses do not cover the stock too. It pays a consistent yearly dividend of at least 5% over the last few years. This makes FPI a very stable buy for the medium-term.Our daily, weekly and monthly charts indicate that FPI has further strong upside potential. The very strong chart buy signals reaffirmed our positive views on FPI. We believe this is a good opportunity to buy FPI at its keysupport areas of RM0.93 to RM1.10 on any price declines, with stop-loss at RM0.91.
From a technical point of view, FPI has been gaining interest as volume picked up recently. Its price trend is in a strong upward phase, with 19-day moving average trending way above its 50-day moving average line. As such, this points to a very strong upward momentum move for FPI. Directional movement indicators began reflecting the daily uptrend in end April 2009 and till today continues to point upward. Its weekly Parabolic also supports FPI’s rising price trend.
Contrarian indicators (such as RSI and Stochastic indicators) also indicate a firm upward momentum for FPI. FPI will potentially break above RM1.13 (a key resistance level) in a very bullish Ascending Triangle formation.
FPI is involved in producing and assembling a variety of audio systems, such as home theater systems, carspeakers, high-end audio systems, WiFi-internet radios, receptor radios and other audio speakers. The maincustomers of FPI are well known brands like Sony, Kenwood, Boston, Marantz, Onkyo, Denon and Koi. Its largest shareholder is PNB with a 24.78 stake%. FPI in turn, also owns the largest stake in ACOSTEC (another speaker maker) listed on Bursa Malaysia.
FPI’s latest 3Q10 recorded a group turnover and net profit growth of 5% and 9.5% respectively QoQ, while YoY turnover and rose 14% while net profit grew by 12 times. The YoY-improved performance was attributed to better product mix and higher sales. We feel that the improving economic condition in countries that FPIexports to, are gaining strength as consumer spending improves. A breakdown in revenue from a geographic point shows the following sales contribution for the 9-month period, Malaysia with RM197.8m (49.7%), Asia(46.8%), Europe (1.2%), other America (2.2%) and other countries (0.1%). FPI’s balance sheet shows that it is in a strong cash position. Other positives are that non-current liabilities have been on a down trend since 2002, while improving sales with declining account receivables QoQ probably explains its strengthening cash position.
On the fundamental side, neither Maybank IB nor Bloomberg has coverage on FPI. This is probably due to its mid-size capitalisation and lack of volatility. Nevertheless, its balance sheet and strong cash position warrants very keen investor interest as duly reflected in its recent steady price rise. We also note that FPI indicated dividend yield for the past 12 months is at 7.66%. Over the last few years, the consistent dividend yield that paid was about 5%.
Extracted from yy's blog
Dow could hit 11,000 this week
NEW YORK: The Dow industrials could hit 11,000 this coming week, starting March 29 as investors bet the U.S. labor market had a significant turnaround in March, showing the economic recovery is in good shape, according to Reuters.
The Dow and the S&P 500 stock indexes are at their highest in nearly 18 months and the expected repositioning before Wednesday's end of the quarter could provide further support. With the Dow closing above 10,850 on Friday, it would need to rise 1.4 percent -- or a tad less than 150 points -- to reach 11,000 level.
But with benchmark U.S. Treasury yields approaching 4 percent, investors may prefer the relative safety of U.S. debt instead of continuing to throw money at a stock market that has risen steeply for more than a year.
Economists expect data on Friday to show the economy created about 190,000 jobs in March, but stock investors will have to be brave enough to bet on that confirmation ahead of the data, since the market will be closed for the Good Friday holiday.
Wednesday's private-sector jobs data and Thursday's jobless claims could support those willing to step out on a limb.
"Obviously, the jobs number is the most important thing" next week, said Phil Orlando, chief equity market strategist at Federated Investors, in New York.
"You are going to get this delayed reaction (the following) Monday, unless the claims numbers are just so terrific, that you get some pre-buying ahead of Friday."
Stocks closed higher for a fourth straight week, around levels not seen since September 2008, as recent uncertainty stemming from fiscal problems in some European countries and the healthcare overhaul receded.
A European Union agreement on a safety net for Greece restored investor confidence, but that net could prove small if fiscal burdens bog down other EU members like Portugal, whose debt rating was cut on Wednesday by Fitch.
"Clearly, there is the potential for there to be fiscal issues with other countries in Europe, but the Europeans have now set a precedent that they intend to backstop any negative fiscal situations," said Ken Farsalas, portfolio manager at Oberweis Asset Management in Lisle, Illinois.
Sentiment, nonetheless, remains downbeat. A stock market sell-off on Friday following news a South Korean naval ship had sunk suggests risk takers are ready to sell on any troublesome news -- and ask questions later.
Main indexes closed little changed on Friday.
For the week, the Dow Jones industrial average rose 1 percent, while the Standard & Poor's 500 Index gained 0.6 percent and the Nasdaq Composite Index advanced 0.9 percent.
THE CURIOUS THREAT OF THE RISING YIELD
The yield on the benchmark 10-year U.S. treasury bond brushed 4 percent in the past week, foreshadowing a possible roadblock for stock bulls.
Three government debt auctions last week had "mediocre, at best"results and rising yields "at some point, become an obstacle for equities," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
Yielding 4 percent and with the relative safety of U.S. government debt, Treasuries could entice investor money that would otherwise continue to pump into stocks.
And rising yields also lead to higher borrowing costs.
"It becomes worrisome with a fragile economy that's trying to gain traction and momentum," Krosby said.
Investors will have plenty of data points to gauge that momentum in the coming holiday-shortened week.
The state of the consumer will be measured by February income and spending data on Monday and March consumer confidence, on Tuesday.
Personal income is expected to rise 0.1 percent, mirroring the previous month's rise, while the Conference Board's consumer confidence index is seen rising to 50, from 46 in February, according to economists polled by Reuters.
The S&P/Case-Shiller home prices index for January, due on Tuesday, is expected to show house prices fell 0.7 percent year-over-year, a much slower pace than the 3.1 percent recorded in December.
CONSTRUCTION [] spending in February, due on Thursday, is seen dropping 1 percent.
On the labor market front, next Friday's widely followed non-farm payrolls report is expected to show 190,000 jobs were created in March. The U.S. unemployment rate is seen unchanged at 9.7 percent.
Payrolls data follows the ADP National Employment Report on Wednesday, where economists hope to see the private sector created 40,000 jobs in March, as well as Thursday's report on initial claims of unemployment insurance, which are predicted to dip to 440,000 in the latest week from 442,000 in the previous one..
Rounding out the economic data for the week, business activity in the Midwest will be measured on Wednesday by the Chicago PMI, seen ticking down to 61 in March from February's 62.6.
Thursday's report on U.S. manufacturing from the Institute for Supply Management is expected to show factory activity continued to expand, with the March reading edging up to 56.8 from 56.5 in February. Domestic car and truck sales for March are also expected on Thursday.
QUARTER'S END COULD SPUR MORE GAINS
Next week could also see a tick up in volume, the lack of which has dogged the market in the past few weeks.
With Wednesday marking the end of the quarter, some managers will reposition their portfolios by selling laggard stocks and switching to stronger names.
If stocks benefit further from this window dressing, backed by the expectations of strong data points, the three major U.S. stock indexes could be on track for a fifth straight week of gains. That would be a streak not seen since the six weeks that followed the bottoming of the market just over a year ago. - Reuters
Note: DOW hit 11,000 on April 9, 2010.
The Dow and the S&P 500 stock indexes are at their highest in nearly 18 months and the expected repositioning before Wednesday's end of the quarter could provide further support. With the Dow closing above 10,850 on Friday, it would need to rise 1.4 percent -- or a tad less than 150 points -- to reach 11,000 level.
But with benchmark U.S. Treasury yields approaching 4 percent, investors may prefer the relative safety of U.S. debt instead of continuing to throw money at a stock market that has risen steeply for more than a year.
Economists expect data on Friday to show the economy created about 190,000 jobs in March, but stock investors will have to be brave enough to bet on that confirmation ahead of the data, since the market will be closed for the Good Friday holiday.
Wednesday's private-sector jobs data and Thursday's jobless claims could support those willing to step out on a limb.
"Obviously, the jobs number is the most important thing" next week, said Phil Orlando, chief equity market strategist at Federated Investors, in New York.
"You are going to get this delayed reaction (the following) Monday, unless the claims numbers are just so terrific, that you get some pre-buying ahead of Friday."
Stocks closed higher for a fourth straight week, around levels not seen since September 2008, as recent uncertainty stemming from fiscal problems in some European countries and the healthcare overhaul receded.
A European Union agreement on a safety net for Greece restored investor confidence, but that net could prove small if fiscal burdens bog down other EU members like Portugal, whose debt rating was cut on Wednesday by Fitch.
"Clearly, there is the potential for there to be fiscal issues with other countries in Europe, but the Europeans have now set a precedent that they intend to backstop any negative fiscal situations," said Ken Farsalas, portfolio manager at Oberweis Asset Management in Lisle, Illinois.
Sentiment, nonetheless, remains downbeat. A stock market sell-off on Friday following news a South Korean naval ship had sunk suggests risk takers are ready to sell on any troublesome news -- and ask questions later.
Main indexes closed little changed on Friday.
For the week, the Dow Jones industrial average rose 1 percent, while the Standard & Poor's 500 Index gained 0.6 percent and the Nasdaq Composite Index advanced 0.9 percent.
THE CURIOUS THREAT OF THE RISING YIELD
The yield on the benchmark 10-year U.S. treasury bond brushed 4 percent in the past week, foreshadowing a possible roadblock for stock bulls.
Three government debt auctions last week had "mediocre, at best"results and rising yields "at some point, become an obstacle for equities," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
Yielding 4 percent and with the relative safety of U.S. government debt, Treasuries could entice investor money that would otherwise continue to pump into stocks.
And rising yields also lead to higher borrowing costs.
"It becomes worrisome with a fragile economy that's trying to gain traction and momentum," Krosby said.
Investors will have plenty of data points to gauge that momentum in the coming holiday-shortened week.
The state of the consumer will be measured by February income and spending data on Monday and March consumer confidence, on Tuesday.
Personal income is expected to rise 0.1 percent, mirroring the previous month's rise, while the Conference Board's consumer confidence index is seen rising to 50, from 46 in February, according to economists polled by Reuters.
The S&P/Case-Shiller home prices index for January, due on Tuesday, is expected to show house prices fell 0.7 percent year-over-year, a much slower pace than the 3.1 percent recorded in December.
CONSTRUCTION [] spending in February, due on Thursday, is seen dropping 1 percent.
On the labor market front, next Friday's widely followed non-farm payrolls report is expected to show 190,000 jobs were created in March. The U.S. unemployment rate is seen unchanged at 9.7 percent.
Payrolls data follows the ADP National Employment Report on Wednesday, where economists hope to see the private sector created 40,000 jobs in March, as well as Thursday's report on initial claims of unemployment insurance, which are predicted to dip to 440,000 in the latest week from 442,000 in the previous one..
Rounding out the economic data for the week, business activity in the Midwest will be measured on Wednesday by the Chicago PMI, seen ticking down to 61 in March from February's 62.6.
Thursday's report on U.S. manufacturing from the Institute for Supply Management is expected to show factory activity continued to expand, with the March reading edging up to 56.8 from 56.5 in February. Domestic car and truck sales for March are also expected on Thursday.
QUARTER'S END COULD SPUR MORE GAINS
Next week could also see a tick up in volume, the lack of which has dogged the market in the past few weeks.
With Wednesday marking the end of the quarter, some managers will reposition their portfolios by selling laggard stocks and switching to stronger names.
If stocks benefit further from this window dressing, backed by the expectations of strong data points, the three major U.S. stock indexes could be on track for a fifth straight week of gains. That would be a streak not seen since the six weeks that followed the bottoming of the market just over a year ago. - Reuters
Note: DOW hit 11,000 on April 9, 2010.
Sunday, March 28, 2010
Thursday, March 25, 2010
TM Targets UniFi To Be In 750,000 Premises By Year-End
KUALA LUMPUR, March 25 (Bernama) -- Telekom Malaysia Bhd (TM) aims to have UniFi, its newly-launched high-speed broadband (HSBB) services, in 750,000 premises by year-end and 1.3 million premises by end of 2012.
Group chief executive officer Datuk Zamzamzairani Mohd Isa said on Thursday that the service would be rolled out in phases with HSBB expected to cover 92 per cent of the Klang Valley by 2011.
Zamzamzairani also said that revenue from HSBB would start coming in the second half of this year, although it would not be significant.
"This type of gestation period is normal for a telco," he told reporters after a media briefing on the UniFi products here.
For residential commercial packages, the 5Mbps package is priced at RM149, the 10Mbps package at RM199 and the 20Mbps package at RM249.
The packages include a 22-channel IPTV service, free calls to TM numbers and free broadband equipment worth RM800.
"We will be improving the IPTV channels as we move along," Zamzamzairani said, adding that there were already two high-definition channels in the packages.
Comparing the prices between the 5Mbps package and the current Streamyx 4Mbps Combo Package, he said current that Streamyx subscribers would immediately be paying a lower fee at RM140 as compared to the usual RM160.
"We are undertaking a product rationalising exercise to relook our product and pricing options (for Streamyx) and will make the appropriate annoucements shortly," he added.
The business packages starts with the 5Mbps package priced at RM199, the 10Mbps package at RM599 and the 20Mbps package at RM899.
Although the packages do not include the IPTV service, they come with complimentary services like 10GB Web hosting with domain, 5GB E-Storage, and free broadband equipment worth RM800.
Zamzamzairani said there would be an initial promotion waiving charges for standard installations and activations worth RM300.
Another perk of the UniFi services was that subscribers could access all Streamyx hotzones, currently 2,500 of them, nationwide, he said.
-- BERNAMA
Group chief executive officer Datuk Zamzamzairani Mohd Isa said on Thursday that the service would be rolled out in phases with HSBB expected to cover 92 per cent of the Klang Valley by 2011.
Zamzamzairani also said that revenue from HSBB would start coming in the second half of this year, although it would not be significant.
"This type of gestation period is normal for a telco," he told reporters after a media briefing on the UniFi products here.
For residential commercial packages, the 5Mbps package is priced at RM149, the 10Mbps package at RM199 and the 20Mbps package at RM249.
The packages include a 22-channel IPTV service, free calls to TM numbers and free broadband equipment worth RM800.
"We will be improving the IPTV channels as we move along," Zamzamzairani said, adding that there were already two high-definition channels in the packages.
Comparing the prices between the 5Mbps package and the current Streamyx 4Mbps Combo Package, he said current that Streamyx subscribers would immediately be paying a lower fee at RM140 as compared to the usual RM160.
"We are undertaking a product rationalising exercise to relook our product and pricing options (for Streamyx) and will make the appropriate annoucements shortly," he added.
The business packages starts with the 5Mbps package priced at RM199, the 10Mbps package at RM599 and the 20Mbps package at RM899.
Although the packages do not include the IPTV service, they come with complimentary services like 10GB Web hosting with domain, 5GB E-Storage, and free broadband equipment worth RM800.
Zamzamzairani said there would be an initial promotion waiving charges for standard installations and activations worth RM300.
Another perk of the UniFi services was that subscribers could access all Streamyx hotzones, currently 2,500 of them, nationwide, he said.
-- BERNAMA
CIMB Equities keeps Outperform on SapuraCrest
KUALA LUMPUR: CIMB Equities Research retains its Outperform on SapuraCrest and its top oil & gas pick after it announced its earnings.
It said on Thursday, March 25 SapuraCrest's 4QFY1/10 net profit of RM39 million took full-year bottomline to an all-time high of RM170 million (+47% Year-on-Year), 2% above its forecast and consensus estimate.
However, the company surprised with a final DPS of 4 sen, which took FY10 DPS to 7 sen, above our forecast of 6 sen.
“We maintain our earnings forecasts and target price of RM3.02 as we continue to value the stock at our target market P/E of 15x.
“The potential share price triggers are 1) strong 4Q10 results, 2) active order book replenishment, 3) success in new markets, and 4) a growing fleet of strategic assets,” it said.
It said on Thursday, March 25 SapuraCrest's 4QFY1/10 net profit of RM39 million took full-year bottomline to an all-time high of RM170 million (+47% Year-on-Year), 2% above its forecast and consensus estimate.
However, the company surprised with a final DPS of 4 sen, which took FY10 DPS to 7 sen, above our forecast of 6 sen.
“We maintain our earnings forecasts and target price of RM3.02 as we continue to value the stock at our target market P/E of 15x.
“The potential share price triggers are 1) strong 4Q10 results, 2) active order book replenishment, 3) success in new markets, and 4) a growing fleet of strategic assets,” it said.
Services Sector To Register Higher Growth This Year
KUALA LUMPUR, March 24 (Bernama) -- The services sector is expected to register a higher growth of 4.9 per cent this year and will remain the key contributor to overall gross domestic product growth.
Bank Negara Malaysia (BNM), in its its Financial Stability and Payment Systems Report 2009 released here today, said growth will be broad-based, with most sub-sectors recording better performance compared to last year.
The trade and manufacturing-related sub-sectors, which were adversely affected by the economic downturn last year, are expected to improve, in line with the anticipated recovery in the global economy, it said.
Meanwhile, the more domestic-oriented sub-sectors are expected to record higher growth, benefiting mainly from strengthening domestic demand.
Within the services sector, BNM said the finance and insurance sub-sector is expected to register higher growth, mainly supported by the finance segment, which will benefit from increased bank lending and higher fee income as the economic recovery gathers momentum.
In the insurance segment, the improvements in salaries and wages as well as enhanced financial literacy will contribute to increased demand for life insurance products while the anticipated increase in the sales of motor vehicles will benefit the general insurance business.
After being adversely affected by the economic downturn in 2009, the transport and storage sub-sector is projected to return to positive growth in 2010.
It said growth will emanate from higher demand for cargo-related transportation services, following the anticipated improvement in trade and manufacturing-related activities.
Growth will be further supported by improved demand in the passenger segment, in line with the expected higher tourist arrivals and improvement in domestic tourism activity.
Similarly, the utilities sub-sector, which weakened considerably in 2009, is expected to expand favourably this year.
The central bank said growth will be contributed by increased demand for electricity from the industrial users, in line with the improvement in manufacturing activity, as well as steady demand from the commercial and household sectors.
The manufacturing sector is poised for strong growth in 2010, based on the observed momentum of recovery since end-2009, it said, adding that broad-based expansion is expected across all clusters, reflecting improved external demand and strengthening domestic demand.
The central bank said the agriculture sector is forecast to register a higher growth of 3.1 per cent as demand from major export markets for industrial crops, especially palm oil and rubber, improves with better economic prospects this year.
The mining sector is projected to expand by 2.5 per cent, reflecting higher output of both crude oil and natural gas following the recovery in demand.
The construction sector is expected to maintain a growth of 3.7 per cent in 2010, it said.
-- BERNAMA
Bank Negara Malaysia (BNM), in its its Financial Stability and Payment Systems Report 2009 released here today, said growth will be broad-based, with most sub-sectors recording better performance compared to last year.
The trade and manufacturing-related sub-sectors, which were adversely affected by the economic downturn last year, are expected to improve, in line with the anticipated recovery in the global economy, it said.
Meanwhile, the more domestic-oriented sub-sectors are expected to record higher growth, benefiting mainly from strengthening domestic demand.
Within the services sector, BNM said the finance and insurance sub-sector is expected to register higher growth, mainly supported by the finance segment, which will benefit from increased bank lending and higher fee income as the economic recovery gathers momentum.
In the insurance segment, the improvements in salaries and wages as well as enhanced financial literacy will contribute to increased demand for life insurance products while the anticipated increase in the sales of motor vehicles will benefit the general insurance business.
After being adversely affected by the economic downturn in 2009, the transport and storage sub-sector is projected to return to positive growth in 2010.
It said growth will emanate from higher demand for cargo-related transportation services, following the anticipated improvement in trade and manufacturing-related activities.
Growth will be further supported by improved demand in the passenger segment, in line with the expected higher tourist arrivals and improvement in domestic tourism activity.
Similarly, the utilities sub-sector, which weakened considerably in 2009, is expected to expand favourably this year.
The central bank said growth will be contributed by increased demand for electricity from the industrial users, in line with the improvement in manufacturing activity, as well as steady demand from the commercial and household sectors.
The manufacturing sector is poised for strong growth in 2010, based on the observed momentum of recovery since end-2009, it said, adding that broad-based expansion is expected across all clusters, reflecting improved external demand and strengthening domestic demand.
The central bank said the agriculture sector is forecast to register a higher growth of 3.1 per cent as demand from major export markets for industrial crops, especially palm oil and rubber, improves with better economic prospects this year.
The mining sector is projected to expand by 2.5 per cent, reflecting higher output of both crude oil and natural gas following the recovery in demand.
The construction sector is expected to maintain a growth of 3.7 per cent in 2010, it said.
-- BERNAMA
NBI A Major Boost To Economy, Say ICT Industry Players
KUALA LUMPUR, March 24 (Bernama) -- The National Broadband Initiative (NBI) will be a key driver of growth in the new economy and the availability of information communication technology such as broadband will become major contributor to the economy, said Dr. Yeah Kim Leng, Group Chief Economist of RAM Holdings Bhd.
He pointed out that countries like United Kingdom and Australia have already invested in such initiatives.
Malaysia is an early adaptor of such an initiative to ensure its economic growth in terms of competitiveness and innovation in the knowledge-based economy, he told Bernama, here on Wednesday.
The NBI was launched by Prime Minister Datuk Seri Najib Tun Razak tonight.
Yeah said while the High Speed Broadband (HSBB) initiative under the NBI is being introduced in four areas namely Taman Tun Dr Ismail, Shah Alam, Subang Jaya and Bangsar due to their high population of industries and businesses, eventually, there is a need to roll it out nationwide.
"Once we have the basic infrastructure, there is a need for content in order to provide better services and good content," he added.
Yeah said the initiative will also provide vast business and job opportunities.
He also said content providers can leverage on the facility and upgrade their services while consumers will gain from the high bandwidth services such as Internet Protocol TV (IPTV).
Meanwhile, Symantec said with the launch of the HSBB service today by Telekom Malaysia through its partnership with the Government, broadband adoption in Malaysia is expected to accelerate.
This will potentially allow better collaboration among businesses locally and globally, as well as improve productivity and overall quality of service on the Internet, it said in a statement here.
Symantec also said that it was looking forward to the coming phases of Telekom Malaysia's HSBB deployment which will reach many communities in Malaysia as its coverage expands.
This will definitely increase the interest in ICT among Malaysians such as using technology in their daily life and at work, while providing greater access to the world wide web of knowledge, it added.
However, it said that while HSBB brought many benefits, the increasing broadband adoption globally has also raised malicious cyberspace activities, resulting in higher risks of cyber threats to users.
Malicious activities usually affect computers with broadband connectivity as they are equipped with large bandwidth capacities, more stable connections, fast transfer speeds, and are connected 24/7.
These are attractive to cyber attackers because of their increased ability and capacity to mount attacks, it said.
In view of this, it urged users to stay safe online and adopt best practices to ensure their personal information is secure, while enjoying the new experiences on HSBB.
NetApp Malaysia meanwhile has applauded the Malaysian government for the National Broadband Initiative.
It is a timely announcement that bodes well for the nation's aspiration towards an innovative and high-income economy, said Mano Govindaraju, Country Manager, NetApp Malaysia.
He said The NBI that comprises the rollout of HSBB and broadband to the general population (BBGP) will not only serve to bridge the digital divide and improve the lives of many, but also aid small medium enterprises (SMEs) and enterprises to be more competitive in an increasingly globalised marketplace.
The introduction of the NBI will open new doors and markets for SMEs who have yet to fully embrace ICT, he said.
The promise of an increase in bandwidth and greater broadband availability will propel cloud computing service providers to deliver a wide range of IT services via the cloud to SMEs and enterprises nationwide, he said.
Axis Communications also commended the launch of NBI in a statement released here.
"Axis looks forward to the roll-out of Telekom Malaysia's HSBB nationwide network as we believe this will result in more efficient monitoring through digital network video surveillance, especially with the government's efforts to address rising crime rates and public safety issues," said Nafis Jasmani, Country Manager, Axis Communications, Malaysia.
The implementation of HSBB will drive the continued technology shift from analogue to network surveillance video as more new standards and technologies like H.264 video compression, HDTV image quality and smart video surveillance features become in demand, he said.
The deployment of HSBB will provide platforms for advanced applications, mobile wireless broadband and network services, such as wide-area wireless video calls and broadband wireless data.
Data and mobile broadband services under the NBI will not only benefit Malaysia and its economy, but also give rise to efficient monitoring through digital network video surveillance, he said.
He said whether network cameras or analogue cameras connected to video encoders, or an installation that employs both camera types, IP surveillance is proving to be attractive in most vertical markets Axis is strong in such as banking, retail, education, healthcare, industrial, transportations and the public sector.
By Premalatha Jayaraman
-- BERNAMA
He pointed out that countries like United Kingdom and Australia have already invested in such initiatives.
Malaysia is an early adaptor of such an initiative to ensure its economic growth in terms of competitiveness and innovation in the knowledge-based economy, he told Bernama, here on Wednesday.
The NBI was launched by Prime Minister Datuk Seri Najib Tun Razak tonight.
Yeah said while the High Speed Broadband (HSBB) initiative under the NBI is being introduced in four areas namely Taman Tun Dr Ismail, Shah Alam, Subang Jaya and Bangsar due to their high population of industries and businesses, eventually, there is a need to roll it out nationwide.
"Once we have the basic infrastructure, there is a need for content in order to provide better services and good content," he added.
Yeah said the initiative will also provide vast business and job opportunities.
He also said content providers can leverage on the facility and upgrade their services while consumers will gain from the high bandwidth services such as Internet Protocol TV (IPTV).
Meanwhile, Symantec said with the launch of the HSBB service today by Telekom Malaysia through its partnership with the Government, broadband adoption in Malaysia is expected to accelerate.
This will potentially allow better collaboration among businesses locally and globally, as well as improve productivity and overall quality of service on the Internet, it said in a statement here.
Symantec also said that it was looking forward to the coming phases of Telekom Malaysia's HSBB deployment which will reach many communities in Malaysia as its coverage expands.
This will definitely increase the interest in ICT among Malaysians such as using technology in their daily life and at work, while providing greater access to the world wide web of knowledge, it added.
However, it said that while HSBB brought many benefits, the increasing broadband adoption globally has also raised malicious cyberspace activities, resulting in higher risks of cyber threats to users.
Malicious activities usually affect computers with broadband connectivity as they are equipped with large bandwidth capacities, more stable connections, fast transfer speeds, and are connected 24/7.
These are attractive to cyber attackers because of their increased ability and capacity to mount attacks, it said.
In view of this, it urged users to stay safe online and adopt best practices to ensure their personal information is secure, while enjoying the new experiences on HSBB.
NetApp Malaysia meanwhile has applauded the Malaysian government for the National Broadband Initiative.
It is a timely announcement that bodes well for the nation's aspiration towards an innovative and high-income economy, said Mano Govindaraju, Country Manager, NetApp Malaysia.
He said The NBI that comprises the rollout of HSBB and broadband to the general population (BBGP) will not only serve to bridge the digital divide and improve the lives of many, but also aid small medium enterprises (SMEs) and enterprises to be more competitive in an increasingly globalised marketplace.
The introduction of the NBI will open new doors and markets for SMEs who have yet to fully embrace ICT, he said.
The promise of an increase in bandwidth and greater broadband availability will propel cloud computing service providers to deliver a wide range of IT services via the cloud to SMEs and enterprises nationwide, he said.
Axis Communications also commended the launch of NBI in a statement released here.
"Axis looks forward to the roll-out of Telekom Malaysia's HSBB nationwide network as we believe this will result in more efficient monitoring through digital network video surveillance, especially with the government's efforts to address rising crime rates and public safety issues," said Nafis Jasmani, Country Manager, Axis Communications, Malaysia.
The implementation of HSBB will drive the continued technology shift from analogue to network surveillance video as more new standards and technologies like H.264 video compression, HDTV image quality and smart video surveillance features become in demand, he said.
The deployment of HSBB will provide platforms for advanced applications, mobile wireless broadband and network services, such as wide-area wireless video calls and broadband wireless data.
Data and mobile broadband services under the NBI will not only benefit Malaysia and its economy, but also give rise to efficient monitoring through digital network video surveillance, he said.
He said whether network cameras or analogue cameras connected to video encoders, or an installation that employs both camera types, IP surveillance is proving to be attractive in most vertical markets Axis is strong in such as banking, retail, education, healthcare, industrial, transportations and the public sector.
By Premalatha Jayaraman
-- BERNAMA
Wednesday, March 24, 2010
DJ MARKET TALK: Maybank Rates Faber At Accumulate; MYR2.48 Target
0509 GMT [Dow Jones] STOCK CALL: Maybank Investment rates Faber (1368.KU) at Accumulate based on charts with upside targets at MYR2.48, then MYR2.70. Technical analyst Lee Cheng Hooi says stock of hotel owner, property firm hit its Wave 4 low at MYR1.52 in February with grossly oversold signals. "With the positive indicators like CCI, DMI, MACD, Stochastic and Oscillator supporting our upward view, Faber has very good potential to trend higher," says Lee. Stock +0.9% at MYR2.26. Next resistance at MYR2.50. On downside, support eyed at MYR2.24, then MYR1.91; recommends stop loss at MYR1.89. (kwan-por.lee@dowjones.com)
OSK maintains Overweight on Malaysian rubber glove makers
OSK maintains Overweight on Malaysian rubber glove makers, following approval of healthcare overhaul bill by U.S. congress; analyst Jason Yap estimates incremental demand from U.S. arising from approval of bill at 768 million gloves annually; says while additional demand "not big," this will add to further supply constraints as glove makers already running at maximum utilization rate and may not have room to ramp up production to meet any surge in demand. "The strong demand will reaffirm their ability to sell the gloves at a premium and pass on 100% of the cost increase to customers," Yap says; names Top Glove (7113.KU), Supermax (7106.KU) and Kossan (7153.KU) as Top Picks. Top Glove last traded +1.2% at MYR13.08, Supermax +1.3% at MYR6.46, Kossan +3.1% at MYR7.64
LED by growing global demand
Globetronics will spend between RM60 million and RM70 million as part of plans to boost the group's presence in the global light-emitting diode (LED) market
GLOBETRONICS Technology Bhd (7022), an integrated circuit (IC) maker, will spend between RM60 million and RM70 million on technology investment, capacity expansion and research and development (R&D) this year.
The investment is part of plans to boost the group's presence in the global light-emitting diode (LED) market, its chief executive officer Heng Huck Lee said.
This is also in line with Malaysia's aim to replace all traditional light bulbs by 2014 to LED, compact fluorescent lamps and fluorescent tubes due to their energy-efficient and environment-friendly nature.
Globetronics sees LED as its main source of growth, as it already supplies to the world's top five multinational light bulb companies.
It ventured into LED in 2000 when it bought over ISO Technology Sdn Bhd.
Today, the LED business contributes about 20 per cent of the group's revenue, or about RM100 million a year, and it is slated to grow by 15 per cent each year.
By 2012, the global LED market is projected to reach a value of US$10 billion (RM33.2 billion) with an average annual growth of between 20 per cent and 25 per cent. Countries such as Australia and Japan are already putting a ban on incandescent light bulb beginning this year.
Heng said the group is also working with a Swedish company to manufacture specialised LED that will be used in a greenhouse.
"There is demand to replace the entire greenhouse lighting with LED. We are doing the R&D for this niche market with the Swedish group," he said during a visit to Globetronics' factory in Penang recently.
Besides its environment-friendly factor, demand for LED, which is a semiconductor light source, is growing due to its longer lifetime and cost effectiveness as compared to traditional lightbulbs.
For example, LED lightbulb's lifetime can exceed 100,000 hours as compared with 1,000 hours for an incandescent light bulb. It uses less energy, is non-toxic and material used in LED can also be recycled.
For the financial year ended 2009, Globetronics posted RM15.9 million in net profit on revenue of RM217.5 million. The company has cash in hand of about RM90 million.
GLOBETRONICS Technology Bhd (7022), an integrated circuit (IC) maker, will spend between RM60 million and RM70 million on technology investment, capacity expansion and research and development (R&D) this year.
The investment is part of plans to boost the group's presence in the global light-emitting diode (LED) market, its chief executive officer Heng Huck Lee said.
This is also in line with Malaysia's aim to replace all traditional light bulbs by 2014 to LED, compact fluorescent lamps and fluorescent tubes due to their energy-efficient and environment-friendly nature.
Globetronics sees LED as its main source of growth, as it already supplies to the world's top five multinational light bulb companies.
It ventured into LED in 2000 when it bought over ISO Technology Sdn Bhd.
Today, the LED business contributes about 20 per cent of the group's revenue, or about RM100 million a year, and it is slated to grow by 15 per cent each year.
By 2012, the global LED market is projected to reach a value of US$10 billion (RM33.2 billion) with an average annual growth of between 20 per cent and 25 per cent. Countries such as Australia and Japan are already putting a ban on incandescent light bulb beginning this year.
Heng said the group is also working with a Swedish company to manufacture specialised LED that will be used in a greenhouse.
"There is demand to replace the entire greenhouse lighting with LED. We are doing the R&D for this niche market with the Swedish group," he said during a visit to Globetronics' factory in Penang recently.
Besides its environment-friendly factor, demand for LED, which is a semiconductor light source, is growing due to its longer lifetime and cost effectiveness as compared to traditional lightbulbs.
For example, LED lightbulb's lifetime can exceed 100,000 hours as compared with 1,000 hours for an incandescent light bulb. It uses less energy, is non-toxic and material used in LED can also be recycled.
For the financial year ended 2009, Globetronics posted RM15.9 million in net profit on revenue of RM217.5 million. The company has cash in hand of about RM90 million.
By Zurinna Raja Adam
Malaysia stock mart raised to ‘overweight’
MALAYSIA'S stock market was upgraded at BNP Paribas SA, which said banks, plantation and construction companies will outperform in the next nine months.
The market was raised to “overweight” from “underweight,” BNP said in a report today.
“Heightened regional volatility has prompted portfolio money to flow into defensive sectors and markets such as Malaysia,” BNP said. - Bloomberg
The market was raised to “overweight” from “underweight,” BNP said in a report today.
“Heightened regional volatility has prompted portfolio money to flow into defensive sectors and markets such as Malaysia,” BNP said. - Bloomberg
Tuesday, March 23, 2010
DJ MARKET TALK: KLCI +0.7%; Break Of 1300 Positive Sign - Dealer
0453 GMT [Dow Jones] KLCI +0.7% at 1302.93 midday, after fluctuating within a narrow range of 1295-1303; dealers say benchmark index's ability to hold above 1300 at lunch break bodes well for market for rest of day. "Investors were nervous at the start of the day, unsure if the market could convincingly surpass 1300. Momentum started to build by mid-morning...this will probably continue when trading resume later," dealer says; gains on Wall Street, regional markets along with optimism Bank Negara annual report due out Wednesday likely to contain bullish view on economy lending support, though absence of strong buying cues may limit upside, dealers say; tip KLCI to remain in 1295-1305 range this afternoon. Among gainers, Telekom Malaysia (4863.KU) +3.7% at MYR3.40, IOI (1961.KU) +0.6% at MYR5.40; KNM (7164.KU) bucked broader uptrend to fall 2.6% to 75 sen as talks for the sale of its assets drag on. (benjamin.low@dowjones.com)
Note: Let's see what happen next... as a lesson!!
Note: Let's see what happen next... as a lesson!!
Monday, March 22, 2010
DJ Unisem Expects 2010 Revenue To Rise 44% From 2009-Report
KUALA LUMPUR (Dow Jones)--Unisem (M) Bhd (5005.KU) expects its revenue to grow 44% from a year earlier, bringing performance back to pre-crisis levels, as demand for semiconductor equipment improves, the New Straits Times reported Monday.
Citing Unisem's chairman and managing director John Chia, the daily said the company is targeting revenue of MYR1.5 billion ($451.8 million) this year compared with MYR1.23 billion in 2009.
"We intend to employ another 300 to 400 workers to sustain our production needs and meet maximum capacity," Chia was quoted saying.
He didn't give a forecast for 2010 earnings.
Sunday, March 21, 2010
A higher rating for branded glove firms?
Most gloves produced under OEMs sold to branded resellers. The rubber glove industry is one in which Malaysia is leading globally. However, on closer examination, it would appear the bulk of rubber glove companies like Top Glove Corp Bhd, Hartalega Holdings Bhd, Kossan Rubber Industries Bhd and Latexx Partners Bhd are original equipment manufacturers (OEMs) that produce rubber gloves sold under the reseller’s brand name. Most of the resellers like Kimberley-Clark, McKesson Corp, Cardinal Health, Medline and Ansell provide a wide range of healthcare and hospital products.Increasingly, these companies are manufacturing less and outsourcing production to OEMs. Instead, they are focusing on research and development (R&D), brand development and distribution. Although, OEM rubber glove manufacturers in Malaysia can make reasonable returns due to the limited number of large rubber glove makers, the scope to increase margins is limited as resellers control the brand and can shift their orders to other OEM rubber glove manufacturers offering lower prices.The margins of OEM manufacturers are thus determined by the type of gloves they produce and their operational efficiency.
Hartalega enjoys the highest margin among OEM manufacturers due to its operational efficiency and a higher percentage of nitrile glove production which currently enjoys better margins. Latexx also enjoys good margins as its production facilities are concentrated in just one location, thereby minimising overheads and ensuring better quality control.
Among the listed rubber glove companies, the only two involved in selling rubber gloves under their own brands are Supermax Corp Bhd and Adventa Bhd. Around 55% of rubber glove sales by Supermax consist of its own brand of gloves. In 2008, Supermax’s dental brands achieved a commendable 7.1% share of the dental glove market in the US. Nevertheless, the challenge faced by Supermax is that large US hospital chains would normally like to simplify logistics by buying from companies that can provide a full range of healthcare and hospital products. Hence, Supermax sells mainly through distributors and dealers who target smaller establishments like nursing homes, clinics, dentists, laboratories rather than large hospital chains. Supermax enjoys operating profit margins of around 30% for gloves sold under its own brand, although margins are currently much higher in Mexico and Brazil where there is a shortage of gloves.
Adventa is the only listed company in Malaysia that is producing surgical gloves which require a more complicated process. Around 60% of surgical gloves are sold under its own brand throughout the world. To develop cutting-edge surgical gloves, Adventa has a R&D centre with eight chemists and six assistant chemists. Its gloves are also tested by three surgeons who provide invaluable feedback. Adventa is in the process of patenting some of its inventions. Operating profit margins for its own brand of surgical gloves are as high as 40%. Recognising the need to provide a full range of hospital products, Adventa has set up a distribution arm to sell a range of hospital and disposable products utilising its global network of distributors. Due to strong demand for its surgical gloves, Adventa is planning to expand its surgical glove capacity from 250 million gloves per annum currently to 350 million per annum by year-end and 450 million per annum by the end of 2010.
The current valuations of Malaysian rubber glove companies do not seem to reward companies that sell gloves under their own brands. In fact, Supermax and Advanta have among the lowest price-earnings ratio (PERs) among rubber glove companies (see table). Perhaps this could be partly due to company-specific factors. In the case of Supermax, it is still recovering from the financial burden arising from its failed investment in APL Industries Bhd, though it would appear that the company is on the road to recovery. In the case of Adventa, it is not a very well covered rubber glove company and its strong operating profits may be masked by its one-off foreign exchange losses. Kimberly-Clarke, which markets a wide range of consumer and disposable products globally under its own brand, is trading on a prospective PER of 13.5 times while both Supermax and Adventa are trading on PERs significantly below 10 times despite faster earnings growth. Branding has ensured better margins for Supermax’s and Adventa’s gloves sold under their own brands. The challenge is to enhance their brands and boost sales in the face of competition from multinationals. If they are successful, the potential earnings growth could be tremendous as they are starting from a lower base compared with the near-stagnant sales of multinationals such as Kimberly-Clarke.
Extracted from http://yangyang-yyyynyanggmailcom.blogspot.com
Hartalega enjoys the highest margin among OEM manufacturers due to its operational efficiency and a higher percentage of nitrile glove production which currently enjoys better margins. Latexx also enjoys good margins as its production facilities are concentrated in just one location, thereby minimising overheads and ensuring better quality control.
Among the listed rubber glove companies, the only two involved in selling rubber gloves under their own brands are Supermax Corp Bhd and Adventa Bhd. Around 55% of rubber glove sales by Supermax consist of its own brand of gloves. In 2008, Supermax’s dental brands achieved a commendable 7.1% share of the dental glove market in the US. Nevertheless, the challenge faced by Supermax is that large US hospital chains would normally like to simplify logistics by buying from companies that can provide a full range of healthcare and hospital products. Hence, Supermax sells mainly through distributors and dealers who target smaller establishments like nursing homes, clinics, dentists, laboratories rather than large hospital chains. Supermax enjoys operating profit margins of around 30% for gloves sold under its own brand, although margins are currently much higher in Mexico and Brazil where there is a shortage of gloves.
Adventa is the only listed company in Malaysia that is producing surgical gloves which require a more complicated process. Around 60% of surgical gloves are sold under its own brand throughout the world. To develop cutting-edge surgical gloves, Adventa has a R&D centre with eight chemists and six assistant chemists. Its gloves are also tested by three surgeons who provide invaluable feedback. Adventa is in the process of patenting some of its inventions. Operating profit margins for its own brand of surgical gloves are as high as 40%. Recognising the need to provide a full range of hospital products, Adventa has set up a distribution arm to sell a range of hospital and disposable products utilising its global network of distributors. Due to strong demand for its surgical gloves, Adventa is planning to expand its surgical glove capacity from 250 million gloves per annum currently to 350 million per annum by year-end and 450 million per annum by the end of 2010.
The current valuations of Malaysian rubber glove companies do not seem to reward companies that sell gloves under their own brands. In fact, Supermax and Advanta have among the lowest price-earnings ratio (PERs) among rubber glove companies (see table). Perhaps this could be partly due to company-specific factors. In the case of Supermax, it is still recovering from the financial burden arising from its failed investment in APL Industries Bhd, though it would appear that the company is on the road to recovery. In the case of Adventa, it is not a very well covered rubber glove company and its strong operating profits may be masked by its one-off foreign exchange losses. Kimberly-Clarke, which markets a wide range of consumer and disposable products globally under its own brand, is trading on a prospective PER of 13.5 times while both Supermax and Adventa are trading on PERs significantly below 10 times despite faster earnings growth. Branding has ensured better margins for Supermax’s and Adventa’s gloves sold under their own brands. The challenge is to enhance their brands and boost sales in the face of competition from multinationals. If they are successful, the potential earnings growth could be tremendous as they are starting from a lower base compared with the near-stagnant sales of multinationals such as Kimberly-Clarke.
Extracted from http://yangyang-yyyynyanggmailcom.blogspot.com
Stocks to watch: Hai-O, Sunway Holdings, IJM, semicon
KUALA LUMPUR: Stocks on Bursa Malaysia are expected to start off on a cautious note on Monday, March 22 after the FBM KLCI was unable to hold on to the key 1,300 level over the past week while trading volume has shrunk.
Concerns among investors would be the rising inflationary trend after the consumer price index for February showed a 1.2% increase on-year while it was unchanged from January.
However, over the longer term, Nomura Securities Research is positive about the outlook for Malaysia, as it sees the economy rebounding and still sees upside to the current earnings upgrade cycle.
On Wall Street, stocks slipped, weighed down by energy shares as crude oil prices tumbled under pressure from a rising U.S. dollar.
Renewed worries about Greece's debt problems sent the euro to a more than two-week low against the greenback and pressured oil and other commodity prices, according to Reuters.
The Dow Jones industrial average dropped 26.60 points, or 0.25 percent, to 10,752.57. The Standard & Poor's 500 Index fell 4.78 points, or 0.41 percent, to 1,161.05. The Nasdaq Composite Index lost 15.13 points, or 0.63 percent, to 2,376.15.
Meanwhile, Nomura Securities Research, in a recent report, said after contracting 2.1% in 2009, Malaysia’s real GDP growth is expected to rebound to 5.5% in 2010 and level off to 5.2% in 2011.
A strong 4Q recovery of up 4.5% year-on-year saw Bank Negara Malaysia raising its rates by 25bps on March in its Monetary Policy Committee meeting.
“The latest move by the central bank supports our view that the recovery is firmly on track,” it said.
In its research note, it said the most common feedback about Malaysia is that the market is not cheap. Owing to the huge accumulated current account surpluses and the large pool of liquidity that’s largely trapped in the system, the market will remain expensive, in its view.
“We remain positive on the market supported by a favourable earnings revision cycle. Consensus started to turn positive in May 2009. After the 1997-98 crisis, the earnings upgrade cycle lasted about 18 months. The earnings upgrades post the 2001 tech-led recession went on for 13 months. Judging from the previous upgrade cycles, we still see upside to the current earnings upgrade cycle.
“This is it! From a positive macro-economic recovery story to earnings upgrade cycles at the company level, all factors are pointing to a favourable outlook for the Malaysian stock market. Additional catalysts could come from positive surprises in the soon-to-be announced New Economic Model. We are overweighting the banks, contractors, media and the healthcare sectors. However, we continue to underweight the planters,” it said.
Stocks to watch are IJM Corp Bhd, HAI-O ENTERPRISE BHD [], SUNWAY HOLDINGS BHD [] and semiconductor-related counters including MPI and Unisem.
IJM Corp Bhd's unit Road Builder (M) Sdn Bhd has secured an RM600 million project to expand the Sungai Besi highway. It accepted the letter of award from Besraya (M) Sdn Bhd for the project on a fixed price lump sum of RM600 million. The CONSTRUCTION [] period is 36 months. Besraya is also a unit of IJM Corp.
Hai-O’s net profit rose 46% to RM18 million for the third quarter ended Jan 31, 2010 from RM12 million a year ago as it earnings were boosted by its multilevel marketing (MLM) division and higher group rental income. Hai-O plans more advertising and promotion activities such as incentive trip sales campaign and to recruit new members. The thrust for the company will be the wholesale and retail divisions, which will focus on health awareness campaign to a wider range of consumers. On the cards are the plan for its retail division to open more outlets across Malaysia especially in Sabah and Sarawak while it also focuses on developing more of its house brand products. Sunway Holdings expects record profits in fiscal 2010 as it plans to tender for jobs worth up to 16 billion ringgit (US$4.84 billion) globally. It expects its construction orderbook to grow by one-third to RM4 billion this year, partly boosted by the government's roll-out of public sector contracts.
North America-based manufacturers of semiconductor equipment recorded orders totalling US$1.23 billion in February 2010, based on a three-month average basis. The Semiconductor Equipment Industry reported on Friday, March 19 the book-to-bill ratio was 1.22, based on its February 2010 Book-to-Bill Report. A book-to-bill of 1.22 means that US$122 worth of orders was received for every US$100 of product billed for the month.
Text written by Joseph Chin
Saturday, 20 March 2010 11:42
Friday, March 19, 2010
IJM Land: Buy, target price RM2.79
KENANGA Research has initiated coverage on IJM Land Bhd (3336) with a "buy" call due to its promising growth prospects, geographically diversified strategic landbank with large gross development value (GDV) and positive news flow from headline projects among other reasons.
Its target price for IJM Land's share price is RM2.79, a 22 per cent upside from its current share price, the report by Kenanga said.
"IJM Land owns one of the largest landbanks with an estimated RM25 billion GDV in Malaysia. A promising future lies ahead for the company given two large pipeline projects - 'The Light' and 'Sebana Cove'," it said.
The report also indicated that the company's current net gearing of 0.25 times is healthy compared with the sector range of 0.2-0.4 times.
Its target price for IJM Land's share price is RM2.79, a 22 per cent upside from its current share price, the report by Kenanga said.
"IJM Land owns one of the largest landbanks with an estimated RM25 billion GDV in Malaysia. A promising future lies ahead for the company given two large pipeline projects - 'The Light' and 'Sebana Cove'," it said.
The report also indicated that the company's current net gearing of 0.25 times is healthy compared with the sector range of 0.2-0.4 times.
Thursday, March 18, 2010
OSK Research raises Eng Teknologi (8826.KU) target to MYR3.25
0659 GMT [Dow Jones] STOCK CALL: OSK Research raises Eng Teknologi (8826.KU) target to MYR3.25 from MYR2.40 by pegging 7.5X FY10 PER which is its historical 11-year average PER. "If the optimism on the broader equity market continues to remain high, that would allow enough time for Engtek to appreciate towards its historical 11-year average PER of 7.5X and narrow the valuation gap to peers JCY (valued at 11X FY10 PE) and Notion (9X FY10 PE)," says analyst Shin Kao Jack; keeps Buy call, FY10 earnings forecast at MYR54.9 million. Stock last down 1.1% at MYR2.69. (elffie.chew@dowjones.com)
Wednesday, March 17, 2010
Fed holds rates at record lows to foster recovery
WASHINGTON (AP) -- The Federal Reserve on Tuesday repeated its pledge to hold interest rates at record lows to foster the U.S. economic recovery and ease high unemployment.
But the Fed's assessment of the economy was a bit more upbeat. It said the job market is stabilizing. That was an improvement from its January statement, when it said the deterioration in the labor market was abating.
It also said business spending on equipment and software has risen significantly, also an upgrade from its last assessment. Still, the Fed cautioned that spending by consumers could be dampened by high unemployment, sluggish income growth, lower wealth and tight credit.
Read more ...
But the Fed's assessment of the economy was a bit more upbeat. It said the job market is stabilizing. That was an improvement from its January statement, when it said the deterioration in the labor market was abating.
It also said business spending on equipment and software has risen significantly, also an upgrade from its last assessment. Still, the Fed cautioned that spending by consumers could be dampened by high unemployment, sluggish income growth, lower wealth and tight credit.
Read more ...
Monday, March 15, 2010
Notion Vtec – Moving Up the Value Chain, Outperform
New Coverage- Notion Vtec (Notion) is an integrated precision engineering specialist and tools maker.
- Notion is expected to extensively produce for Samsung 2.5’’ baseplates components with initial production of 100K units per/month rising sharply to 1m units per/month (by June) and 2m pieces per/month by end-2010 respectively. We expect this to grow significantly in FY11-12 as Notion steps-up its capability to produce higher-value components.
- Recall that Nikon acquired a 8.98% via a private placement exercise raised about RM33.8m. The proceeds will be used for its plant in Thailand with plans for further expansion. We expect Notion Nikon to further develop its expertise and technical know-how in order to service Nikon which will further improve production efficiently.
- We estimate revenue growth in FY10, FY11, and FY12 to driven mainly by: 1) stronger demand in the 2.5’’ HDD segment particularly the robust orders from Samsung; and 2) stronger contribution from its camera division given volume loading from Nikon.
- We estimate a fair value of RM 4.59 based on 10x FY11 EPS. Initiate coverage with an Outperform recommendation.
- Notion is expected to extensively produce for Samsung 2.5’’ baseplates components with initial production of 100K units per/month rising sharply to 1m units per/month (by June) and 2m pieces per/month by end-2010 respectively. We expect this to grow significantly in FY11-12 as Notion steps-up its capability to produce higher-value components.
- Recall that Nikon acquired a 8.98% via a private placement exercise raised about RM33.8m. The proceeds will be used for its plant in Thailand with plans for further expansion. We expect Notion Nikon to further develop its expertise and technical know-how in order to service Nikon which will further improve production efficiently.
- We estimate revenue growth in FY10, FY11, and FY12 to driven mainly by: 1) stronger demand in the 2.5’’ HDD segment particularly the robust orders from Samsung; and 2) stronger contribution from its camera division given volume loading from Nikon.
- We estimate a fair value of RM 4.59 based on 10x FY11 EPS. Initiate coverage with an Outperform recommendation.
Century sees soaring business
CENTURY Logistics Holdings Bhd (7117) , a supply chain management and logistics provider, expects revenue to grow at least 30 per cent this year, as trade volumes pick up and more corporations outsource their warehousing and supply chain needs.
"This is a conservative target. We are actually expecting much more ... we are excited about this year," its managing director Steven Teow Choo Hing told Business Times in an interview.
The group made a record net profit of RM20.9 million last year on revenue of RM210.9 million, amid declines in trade growth caused by the global economic slowdown.
While the group only managed to record RM5 million in net profit for the first half of 2009, it made a roaring comeback in the second half, by bagging new customers and taking proactive measures to minimise losses.
Teow said besides plans to increase its fleet of trucks, the group is also looking to acquire a company with air and freight operations in the region as part of its growth plan.
He said it is now studying the profiles of a few local and foreign companies, but declined to name them.
"We are not into buying people out, we like to retain a successful business model," Teow added.
The group plans to add 30 trucks in the next two months to its existing fleet, bringing the total number of company-owned trucks to 180.
About 60 per cent of the group's revenue comes from the total logistics and supply chain management division, 30 per cent from oil and gas logistics and the rest from procurement and assembly services.
Century Logistics is aspiring to be a RM100 million net cash company in one to two years.
It currently has RM33 million of cash in its coffers.
Teow said a medium-term plan of the group is to relocate its headquarters to Shah Alam, Selangor, while maintaining an operations unit in its existing premise in Port Klang.
He said the move would help in improving the group's visibility and branding.
By Presenna Nambiar
"This is a conservative target. We are actually expecting much more ... we are excited about this year," its managing director Steven Teow Choo Hing told Business Times in an interview.
The group made a record net profit of RM20.9 million last year on revenue of RM210.9 million, amid declines in trade growth caused by the global economic slowdown.
While the group only managed to record RM5 million in net profit for the first half of 2009, it made a roaring comeback in the second half, by bagging new customers and taking proactive measures to minimise losses.
Teow said besides plans to increase its fleet of trucks, the group is also looking to acquire a company with air and freight operations in the region as part of its growth plan.
He said it is now studying the profiles of a few local and foreign companies, but declined to name them.
"We are not into buying people out, we like to retain a successful business model," Teow added.
The group plans to add 30 trucks in the next two months to its existing fleet, bringing the total number of company-owned trucks to 180.
About 60 per cent of the group's revenue comes from the total logistics and supply chain management division, 30 per cent from oil and gas logistics and the rest from procurement and assembly services.
Century Logistics is aspiring to be a RM100 million net cash company in one to two years.
It currently has RM33 million of cash in its coffers.
Teow said a medium-term plan of the group is to relocate its headquarters to Shah Alam, Selangor, while maintaining an operations unit in its existing premise in Port Klang.
He said the move would help in improving the group's visibility and branding.
By Presenna Nambiar
Sunday, March 14, 2010
KPJ wants to be world number one
KPJ Healthcare Bhd (5878), which currently ranks as Asia's number one healthcare service provider and the world's third, is going all out to reach pole position.
KPJ Healthcare has been named by US-based Nu Wire Investor research company recently as the world's number three healthcare company.
KPJ Healthcare managing director Datin Paduka Siti Sa'diah Sheikh Bakir (picture) said the company is expanding aggressively, albeit cautiously opening two hospitals a year in Malaysia, the Middle East and Indo China.
"We have to work hard to position Malaysia as the number one medical hub in the world as other countries such as India are fast catching up," she said.
Siti Sa'diah made history yesterday when she was named Malaysia's CEO of the Year 2009, the first woman to clinch the title in the award's 14-year history.
The award was presented to her by Prime Minister Datuk Seri Najib Tun Razak.
Siti Sa'diah beat 118 other nominees from 16 different indusries. She took home a trophy, an American Express platinum card with one million membership rewards points and a first-class return air ticket to Europe.
Describing the win, Siti Sa'diah said she is honoured to stand among world-class leaders and pays tribute to her peers in the industry. women as well as Johor Corp Group of Companies which is Johor state's investment and commercial arm.
"Since its establishment 28 years ago, I am proud that KPJ made its first RM1 billion revenue after 27 years and its first RM100 million pre-tax profit after 28 years.
"We are growing still and aim for RM2 billion revenue in the future from RM1.4 billion currently," Siti Sa'diah told reporters in Kuala Lumpur yesterday.
A member of JCorp group of companies and its medical arm, KPJ has over RM1.1 billion in assets with a shareholders fund of over RM508.9 million.
Siti Sa'diah, 57, became KPJ managing director since March 1993.
At the same event, Malaysia Airports Holdings Bhd won the inaugural Corporate Nationhood Initiative Award in recognition of its outstanding corporate initiative for its effort in promoting national harmony under the One Malaysia spirit.
The award was received by its managing director Tan Sri Bashir Ahmad Abdul Majid.
Malaysia's CEO of the Year 2009 is organised jointly by Business Times and Maybank, the issuer of American Express credit and charge cards.
KPJ Healthcare has been named by US-based Nu Wire Investor research company recently as the world's number three healthcare company.
KPJ Healthcare managing director Datin Paduka Siti Sa'diah Sheikh Bakir (picture) said the company is expanding aggressively, albeit cautiously opening two hospitals a year in Malaysia, the Middle East and Indo China.
"We have to work hard to position Malaysia as the number one medical hub in the world as other countries such as India are fast catching up," she said.
Siti Sa'diah made history yesterday when she was named Malaysia's CEO of the Year 2009, the first woman to clinch the title in the award's 14-year history.
The award was presented to her by Prime Minister Datuk Seri Najib Tun Razak.
Siti Sa'diah beat 118 other nominees from 16 different indusries. She took home a trophy, an American Express platinum card with one million membership rewards points and a first-class return air ticket to Europe.
Describing the win, Siti Sa'diah said she is honoured to stand among world-class leaders and pays tribute to her peers in the industry. women as well as Johor Corp Group of Companies which is Johor state's investment and commercial arm.
"Since its establishment 28 years ago, I am proud that KPJ made its first RM1 billion revenue after 27 years and its first RM100 million pre-tax profit after 28 years.
"We are growing still and aim for RM2 billion revenue in the future from RM1.4 billion currently," Siti Sa'diah told reporters in Kuala Lumpur yesterday.
A member of JCorp group of companies and its medical arm, KPJ has over RM1.1 billion in assets with a shareholders fund of over RM508.9 million.
Siti Sa'diah, 57, became KPJ managing director since March 1993.
At the same event, Malaysia Airports Holdings Bhd won the inaugural Corporate Nationhood Initiative Award in recognition of its outstanding corporate initiative for its effort in promoting national harmony under the One Malaysia spirit.
The award was received by its managing director Tan Sri Bashir Ahmad Abdul Majid.
Malaysia's CEO of the Year 2009 is organised jointly by Business Times and Maybank, the issuer of American Express credit and charge cards.
Saturday, March 13, 2010
What the Markets Are Saying
Even though the S&P 500 is within a fraction of a new high, neither the Dow Industrials nor the NYSE Composite is within immediate striking distance of a new high. And instead of the market attracting heavy volume in preparation for a breakout, the NYSE again traded at the lowest average range of volume in 18 months. Breadth, which was strongly positive last week, has deteriorated to barely on the plus side.
Trading a market like this can be a testy affair, so it's probably best to stay out until the market itself telegraphs its next move. And, at this heady price level, that message should be coming soon.
A breakout should be accompanied by higher-than-average volume, which would confirm that there is considerable optimism that the markets are heading higher.
In the absence of heavy volume, the Dow could double-top and head back down to the initial support line represented by the 20- and 50-day moving averages at 10,380 to 10,390. And if that zone fails to hold, the next support is at the Feb. 5 reversal day low of 9,823.
The market is finally at a point where it must reveal its next move. We have to watch and wait, and not try to anticipate the move, since what could initially appear to be a buy or sell signal could quickly reverse to the opposite side of the ledger.
It is almost as though the market is trying to mislead the vast majority of investors and only reward those with the most patience.
Read more...
Trading a market like this can be a testy affair, so it's probably best to stay out until the market itself telegraphs its next move. And, at this heady price level, that message should be coming soon.
A breakout should be accompanied by higher-than-average volume, which would confirm that there is considerable optimism that the markets are heading higher.
In the absence of heavy volume, the Dow could double-top and head back down to the initial support line represented by the 20- and 50-day moving averages at 10,380 to 10,390. And if that zone fails to hold, the next support is at the Feb. 5 reversal day low of 9,823.
The market is finally at a point where it must reveal its next move. We have to watch and wait, and not try to anticipate the move, since what could initially appear to be a buy or sell signal could quickly reverse to the opposite side of the ledger.
It is almost as though the market is trying to mislead the vast majority of investors and only reward those with the most patience.
Read more...
Friday, March 12, 2010
AmResearch keeps Buy call on Tan Chong with unchanged MYR4.70 target
Tan Chong Motor (4405.KU) last +1.5% at MYR3.36 after announcing awarded exclusive distribution rights of Nissan Motors' CBU (completely built-up) vehicles in Cambodia, says dealer with local brokerage. "The stock is higher because the exclusive distribution rights will widen its earnings base and boost its bottomline"; tips stock to retest morning high of MYR3.41 later. "We foresee Tan Chong's coming Vietnam operations turning into Nissan's regional production hub - especially for supply to less developed auto markets in the region - including Cambodia and Laos given proximity and more efficient cost base," says AmResearch; keeps Buy call with unchanged MYR4.70 target.
Note: Distribution agreement with Nissan
Tan Chong’s wholly-owned subsidiary, ETCM (C) Pty Ltd (“ETCM (C)”) and Nissan Motor Co Ltd (“Nissan”) has signed a new Distribution Agreement yesterday. With the signing of the new agreement Tan Chong will be the sole and exclusive distributor of Nissan’s CBU vehicles in Cambodia for a period of two years with the option of renewal every year thereafter. This agreement is expected to take effect in the second quarter of 2010 with an initial sales volume of 200 units.
Note: Distribution agreement with Nissan
Tan Chong’s wholly-owned subsidiary, ETCM (C) Pty Ltd (“ETCM (C)”) and Nissan Motor Co Ltd (“Nissan”) has signed a new Distribution Agreement yesterday. With the signing of the new agreement Tan Chong will be the sole and exclusive distributor of Nissan’s CBU vehicles in Cambodia for a period of two years with the option of renewal every year thereafter. This agreement is expected to take effect in the second quarter of 2010 with an initial sales volume of 200 units.
Gamuda Land in RM6bil Vietnam venture
PETALING JAYA: Gamuda Bhd’s wholly-owned unit, Gamuda Land (HCMC) Sdn Bhd, has entered into a joint venture with its Vietnamese partner, Sai Gon Thuong Tin Real Estate Joint Stock Co (Sacomreal) to undertake a RM6bil project in Tan Phu District, about 9km from the central business district of Ho Chi Minh City.
The company yesterday signed a shares-sale agreement with Sacomreal for the proposed acquisition of a 60% equity interest in Saigon Thuong Tin Tan Thang Investment Real Estate Joint Stock Co (Tan Thang Co) for a cash consideration of US$82.8mil.
Tan Thang has the rights for the investment and construction of a parcel of 825,216.5 sq m land into a residential, sports and educational complex with an estimated gross development value of RM6bil.
The project will comprise 7,000 units of medium-end and premium apartments with built-up from 700 to 1,500 sq ft, and 37,000 sq m of commercial space.
The apartments will initially be priced from US$900 to US$1,100 per sq m while the commercial space will have an average price of US$2,650 per sq m.
According to Gamuda Land managing director Chow Chee Wah, some 80% of the project would comprise residences that would be undertaken in seven parcels.
“The 82ha for the project is one of the last sizeable land parcels available in Ho Chi Minh City. Our goal is to meet the needs of Vietnamese who want good value-for-money products and prefer innovative lifestyle projects,” he told StarBiz.
The master plan for the development has been approved and the project is expected to commence in the third quarter of this year and will take seven to eight years.
Chow said besides a good concept, facilities and layout, the project’s unique selling proposition would be a 20ha integrated park.
“We are confident the project will do well as it caters to the growing demand for quality residences in line with the rapid urbanisation and rising per capita income among the Vietnamese.
“Our target markets include young executives, professionals and mid-level management executives,” he added.
Close to 65% of Vietnam’s 87 million population are aged 35 years and below. Ho Chi Minh City has a population of more than nine million and 60,000 expatriates.
There are also the Viet Kieus - Vietnamese who are residing abroad - who are also buying property for their own use and for investment.
Chow said the dong’s devaluation had contributed to more Vietnamese resorting to property investment as a reliable savings instrument instead of saving their money in the bank.
With the upcoming closure of all gold trading floors in Vietnam at the end of this month, there will also be a re-channelling of capital flows into the property market.
Sacomreal was previously involved in providing real estate services but has since expanded to developing and marketing of high-quality apartments.
The company yesterday signed a shares-sale agreement with Sacomreal for the proposed acquisition of a 60% equity interest in Saigon Thuong Tin Tan Thang Investment Real Estate Joint Stock Co (Tan Thang Co) for a cash consideration of US$82.8mil.
Tan Thang has the rights for the investment and construction of a parcel of 825,216.5 sq m land into a residential, sports and educational complex with an estimated gross development value of RM6bil.
The project will comprise 7,000 units of medium-end and premium apartments with built-up from 700 to 1,500 sq ft, and 37,000 sq m of commercial space.
The apartments will initially be priced from US$900 to US$1,100 per sq m while the commercial space will have an average price of US$2,650 per sq m.
According to Gamuda Land managing director Chow Chee Wah, some 80% of the project would comprise residences that would be undertaken in seven parcels.
“The 82ha for the project is one of the last sizeable land parcels available in Ho Chi Minh City. Our goal is to meet the needs of Vietnamese who want good value-for-money products and prefer innovative lifestyle projects,” he told StarBiz.
The master plan for the development has been approved and the project is expected to commence in the third quarter of this year and will take seven to eight years.
Chow said besides a good concept, facilities and layout, the project’s unique selling proposition would be a 20ha integrated park.
“We are confident the project will do well as it caters to the growing demand for quality residences in line with the rapid urbanisation and rising per capita income among the Vietnamese.
“Our target markets include young executives, professionals and mid-level management executives,” he added.
Close to 65% of Vietnam’s 87 million population are aged 35 years and below. Ho Chi Minh City has a population of more than nine million and 60,000 expatriates.
There are also the Viet Kieus - Vietnamese who are residing abroad - who are also buying property for their own use and for investment.
Chow said the dong’s devaluation had contributed to more Vietnamese resorting to property investment as a reliable savings instrument instead of saving their money in the bank.
With the upcoming closure of all gold trading floors in Vietnam at the end of this month, there will also be a re-channelling of capital flows into the property market.
Sacomreal was previously involved in providing real estate services but has since expanded to developing and marketing of high-quality apartments.
YTL Power's RM2.5b WiMAX network plan unexpected
KUALA LUMPUR: RAM Ratings says YTL POWER INTERNATIONAL BHD []'s (YTLPI) move to roll out its RM2.5 billion worldwide interoperability for microwave access (WiMAX) network is quite unexpected.
The rating agency said on Thursday, March 11 this was not in line with its track record of investing in long-term concession assets with stable and sustainable cashflow.
"Although RAM Ratings is less sanguine about the group venturing into a non-concession-based business, we note that YTLPI’s power and water concession assets will remain its major cashflow contributors," it said.
YTLPI's subsidiaries are in power generation, water and sewerage services, electricity transmission and telecommunications.
The ratings agency said while the group will be viewed to have a more aggressive risk appetite if it deviates further from its strategy of only investing in concession-based utility and infrastructure assets, "we note that the management has been circumspect in its investment decisions and has demonstrated good acumen in business execution thus far".
RAM Ratings, meanwhile, reaffirmed the AA1 ratings of YTLPI’s RM2 billion commercial papers/medium-term notes programme (2007/2014) (CP/MTN) and RM2.2 billion serial redeemable bonds (2008/2013); long-term ratings have a stable outlook.
It also reaffirmed the P1 rating of the YTLPI’s CP/MTN. The ratings remain supported by the group’s robust business profile stemming from its regulated asset base, particularly its investments in power and water-sewerage services via its unit YTL Power Generation Sdn Bhd (YTLPG) in Malaysia, PowerSeraya Ltd (PowerSeraya) in Singapore and Wessex Water Ltd (WWL) in the United Kingdom (UK).
In this regard, WWL has maintained its position as one of the most efficient water and sewerage-services companies in the UK. At the power-generation end, YTLPG has been able to achieve an availability level of around 90% for the past six years; PowerSeraya exhibits a strong operating performance, underscored by its availability of about 88% as at end-March 2009.
"Nonetheless, the group’s capital structure remained constrained by its hefty debt burden of RM22.92 billion as at end-December 2009, with a corresponding net gearing ratio of 2.02 times. However, most of these debts are parked under core subsidiaries that generate stable cashflow," it said.
RAM Ratings said YTLPI had healthy debt-protection measures; its company-level adjusted operating cashflow debt coverage (OCFDC) ratio was 0.28 times as at end-June 2009.
Based on RAM Ratings’ cashflow analysis, YTLPI’s OCFDC ratio is projected to range around 0.17–0.25 times throughout the tenures of YTLPI’s debt issues.
The rating agency said on Thursday, March 11 this was not in line with its track record of investing in long-term concession assets with stable and sustainable cashflow.
"Although RAM Ratings is less sanguine about the group venturing into a non-concession-based business, we note that YTLPI’s power and water concession assets will remain its major cashflow contributors," it said.
YTLPI's subsidiaries are in power generation, water and sewerage services, electricity transmission and telecommunications.
The ratings agency said while the group will be viewed to have a more aggressive risk appetite if it deviates further from its strategy of only investing in concession-based utility and infrastructure assets, "we note that the management has been circumspect in its investment decisions and has demonstrated good acumen in business execution thus far".
RAM Ratings, meanwhile, reaffirmed the AA1 ratings of YTLPI’s RM2 billion commercial papers/medium-term notes programme (2007/2014) (CP/MTN) and RM2.2 billion serial redeemable bonds (2008/2013); long-term ratings have a stable outlook.
It also reaffirmed the P1 rating of the YTLPI’s CP/MTN. The ratings remain supported by the group’s robust business profile stemming from its regulated asset base, particularly its investments in power and water-sewerage services via its unit YTL Power Generation Sdn Bhd (YTLPG) in Malaysia, PowerSeraya Ltd (PowerSeraya) in Singapore and Wessex Water Ltd (WWL) in the United Kingdom (UK).
In this regard, WWL has maintained its position as one of the most efficient water and sewerage-services companies in the UK. At the power-generation end, YTLPG has been able to achieve an availability level of around 90% for the past six years; PowerSeraya exhibits a strong operating performance, underscored by its availability of about 88% as at end-March 2009.
"Nonetheless, the group’s capital structure remained constrained by its hefty debt burden of RM22.92 billion as at end-December 2009, with a corresponding net gearing ratio of 2.02 times. However, most of these debts are parked under core subsidiaries that generate stable cashflow," it said.
RAM Ratings said YTLPI had healthy debt-protection measures; its company-level adjusted operating cashflow debt coverage (OCFDC) ratio was 0.28 times as at end-June 2009.
Based on RAM Ratings’ cashflow analysis, YTLPI’s OCFDC ratio is projected to range around 0.17–0.25 times throughout the tenures of YTLPI’s debt issues.
Faber to build on its presence in India, UAE
KUALA LUMPUR: FABER GROUP BHD [] aims to expand its presence in India and the United Arab Emirates (UAE — Abu Dhabi) this year as part of its strategy to grow its overseas business segment, the company said.
"These (India and Abu Dhabi) are the countries we are targeting to grow our hospital support services business. With the experience that we have, we should be able to secure more contracts," its managing director Adnan Mohammad said.
"The hospitals will look at our performance, and over the years we have a proven track record. We have been in the UAE since 2006 and the projects were issued on a year-to-year basis. They were renewed every year," he told reporters at Faber's vendor recognition ceremony on Thursday, March 11.
The company said that India and the UAE contributed 17% (RM140 million) to its total turnover in the financial year ended Dec 31, 2009.
The company earlier announced that it aimed to grow revenue by 12%-15% in its property and integrated facilities management (IFM) segments, focusing growth mostly in the IFM business for FY2010.
Faber's IFM business comprises its bio-medical engineering maintenance, cleansing, clinical waste management, facility engineering maintenance, linen and laundry and its maintenance management information system. This segment of the business accounted for 85% of Faber's revenue in FY2009.
Faber, which is also involved in developing PROPERTIES [], said that it was scouting to buy more land in the Klang Valley.
"The decision to buy will be dependent on location and pricing. We are continuously looking for opportunities for landbank, and it also depends on what sort of products (properties) we want to launch in the future."
The company had said it would launch three more high-end residential projects in the Klang Valley this year with a total gross development value of about RM426 million.
The property division contributed 15% to its revenue in FY09.
Written by Daniel Khoo
"These (India and Abu Dhabi) are the countries we are targeting to grow our hospital support services business. With the experience that we have, we should be able to secure more contracts," its managing director Adnan Mohammad said.
"The hospitals will look at our performance, and over the years we have a proven track record. We have been in the UAE since 2006 and the projects were issued on a year-to-year basis. They were renewed every year," he told reporters at Faber's vendor recognition ceremony on Thursday, March 11.
The company said that India and the UAE contributed 17% (RM140 million) to its total turnover in the financial year ended Dec 31, 2009.
The company earlier announced that it aimed to grow revenue by 12%-15% in its property and integrated facilities management (IFM) segments, focusing growth mostly in the IFM business for FY2010.
Faber's IFM business comprises its bio-medical engineering maintenance, cleansing, clinical waste management, facility engineering maintenance, linen and laundry and its maintenance management information system. This segment of the business accounted for 85% of Faber's revenue in FY2009.
Faber, which is also involved in developing PROPERTIES [], said that it was scouting to buy more land in the Klang Valley.
"The decision to buy will be dependent on location and pricing. We are continuously looking for opportunities for landbank, and it also depends on what sort of products (properties) we want to launch in the future."
The company had said it would launch three more high-end residential projects in the Klang Valley this year with a total gross development value of about RM426 million.
The property division contributed 15% to its revenue in FY09.
Written by Daniel Khoo
Thursday, March 11, 2010
SapuraCrest Petroleum (8575.KU) likely to post record net profit of MYR166 million
SapuraCrest Petroleum (8575.KU) likely to post record net profit of MYR166 million in FY10, +43% on-year, says CIMB Research analyst Norziana Mohd Inon; cites higher drilling charter rates, turnaround of SapuraAcergy JV as reasons for improved earnings. "The company's 4Q results are expected to meet expectations, with a net profit of at around MYR34 million (+29% on-year and down 36% on-quarter)," says Norziana. adds 1Q, 4Q typically weaker quarters for SapuraCrest due to the monsoon season. Company expected to announce 4Q results after 0900 GMT March 25. Stock last down 0.8% at MYR2.43. Keeps Outperform call with unchanged MYR3.02 target
Gamuda eyes RM6b project in Vietnam via US$82.8m acquisition
KUALA LUMPUR: GAMUDA BHD [] is buying a 60% stake in Vietnam's Tan Thang Company for US$82.8 million which has rights to undertake a property project in Ho Chi Minh City with an estimated gross development value (GDV) of RM6 billion.
It said on Wednesday, March 10 its unit, Gamuda Land (HCMC) Sdn Bhd was buying the stake from Sai Gon Thuong Tin Real Estate Joint Stock Company (Sacomreal).
Gamuda said Tan Thang Co. has the rights to undertake a project on a 825,216.5 sq metre site in Son Ky Ward, Tan Phu District, Ho Chi Minh City.
"Tan Thang Company will undertake the Project comprising medium-end and premium residential apartments, a sports complex and an educational complex on the land. The project is expected to generate a GDV of RM6 billion," it said.
Gamuda said the first sales launch is expected to commence in the second half of this year and over a seven-year period.
Under the agreement, would loan US$66.24 million to Tan Thang Co. at 13% per annum. The loan shall be repaid to Sacomreal once Tan Thang Co. has secured and drawndown from the project’s lender.
Gamuda HCMC will fund its share of equity participation in Tan Thang Co. via shareholder’s advance from Gamuda using internally generated funds and/or bank borrowings.
"The project will enable Gamuda to strengthen its position in the property development industry in Vietnam," it said.
Written by Joseph Chin
It said on Wednesday, March 10 its unit, Gamuda Land (HCMC) Sdn Bhd was buying the stake from Sai Gon Thuong Tin Real Estate Joint Stock Company (Sacomreal).
Gamuda said Tan Thang Co. has the rights to undertake a project on a 825,216.5 sq metre site in Son Ky Ward, Tan Phu District, Ho Chi Minh City.
"Tan Thang Company will undertake the Project comprising medium-end and premium residential apartments, a sports complex and an educational complex on the land. The project is expected to generate a GDV of RM6 billion," it said.
Gamuda said the first sales launch is expected to commence in the second half of this year and over a seven-year period.
Under the agreement, would loan US$66.24 million to Tan Thang Co. at 13% per annum. The loan shall be repaid to Sacomreal once Tan Thang Co. has secured and drawndown from the project’s lender.
Gamuda HCMC will fund its share of equity participation in Tan Thang Co. via shareholder’s advance from Gamuda using internally generated funds and/or bank borrowings.
"The project will enable Gamuda to strengthen its position in the property development industry in Vietnam," it said.
Written by Joseph Chin
Tuesday, March 9, 2010
CIMB Research keeps Daibochi (8125.KU) as Outperform with unchanged MYR4.60 Target
CIMB Research keeps Daibochi (8125.KU) as Outperform with unchanged MYR4.60 target based on 12X CY11 P/E target, which factors in a 20% discount to our 15x target PE for the market. "Factors that could catalyse the stock include further margin expansion over the next few quarters, contracts from major non-F&B companies and, investors' increasing awareness of its attractive dividend yield of 7%, says analyst Nigel Foo. "Daibochi has the potential to pay higher dividends if the non-food and beverage business takes off in a major way over the next few quarters," says Foo; adds company's balance sheet strong, at only 0.1X net gearing as at end-2009. Stock last +2.3% at MYR3.54
Adventa Charts
CIMB Research keeps Adventa (7191.KU) with unchanged MYR5.44 target, pegged to 13.2X PE or a 20% discount to peer Top Glove's (7113.KU) target PE of 16.5X. "We like Adventa for its niche in surgical glove and aggressive long term plans to grow its other business segments and become a significant healthcare products supplier in the region," says CIMB; adds company expects sales to increase progressively this year as new capacity from the new high output factory in Kluang and new lines from Kota Bharu plant will allow it to handle more orders. Also expects Uruguay plant to contribute to earnings from 3Q FY10 as utilisation rate has rocketed from 20% to 60%. Stock last +1.7% at MYR3.66. (elffie.chew@dowjones.com)
Maintain Buy, with our target price maintained at RM5.37 based on a PER of 15x FY11 EPS - OSK.
Note: Final Dividend of 4 sen per share tax exempt for the financial year ended 31 October 2009 Xdate 23 March 2010. Seventh Annual General Meeting of ADVENTA is scheduled to be held on Thursday, 25 March 2010
Maintain Buy, with our target price maintained at RM5.37 based on a PER of 15x FY11 EPS - OSK.
Note: Final Dividend of 4 sen per share tax exempt for the financial year ended 31 October 2009 Xdate 23 March 2010. Seventh Annual General Meeting of ADVENTA is scheduled to be held on Thursday, 25 March 2010
Bursa sees 2nd year of profit growth
Bursa Malaysia Bhd, the country’s stock exchange manager, expects profit to increase for a second year as the economy recovers and the government accelerates efforts to open the market to foreign investors.
“We expect positive growth in earnings this year,” chief executive officer Yusli Mohamed Yusoff said in an interview today in Singapore. “Expect the market to be volatile but the conditions are quite good for earnings to grow.”
Bursa had a 70 per cent gain in net income to RM177.6 million (US$53.1 million) last year on higher trading volume and listing fees. Yusli’s comments contrast with a forecast that profit will fall to RM141 million in 2010, according to the mean estimate among 16 analysts surveyed by Bloomberg.
The daily average volume in the stock market has more than doubled to 1.02 billion shares so far this year, compared with 408 million shares in the same period in 2009. The value of trades jumped to RM1.36 billion a day from RM602.7 million as the global economy revived and the government boosted spending to help resuscitate growth.
“Against the backdrop of a global recession, Malaysia’s economy has performed well,” Yusoff said. “It’s low and stable interest rate has been conducive for businesses to grow.”
Bursa’s profit decreased 57 per cent to RM104.4 million in 2008, when investors shunned emerging markets amid a global financial crisis.
The government may announce more “liberalization and reform measures” this month when the stock exchange holds its 6th annual Invest Malaysia conference, Yusuf said. He declined to give details. His “wish list” includes widening market access for retail investors and allowing foreign brokers to service the Malaysian market, he said.
The government has announced stimulus plans totaling RM67 billion over the past two years to help pull Southeast Asia’s third-largest economy from its recession. Prime Minister Datuk Seri Najib Razak also eased investment rules in June governing initial public offerings and takeovers to attract more overseas investors. -- Bloomberg
“We expect positive growth in earnings this year,” chief executive officer Yusli Mohamed Yusoff said in an interview today in Singapore. “Expect the market to be volatile but the conditions are quite good for earnings to grow.”
Bursa had a 70 per cent gain in net income to RM177.6 million (US$53.1 million) last year on higher trading volume and listing fees. Yusli’s comments contrast with a forecast that profit will fall to RM141 million in 2010, according to the mean estimate among 16 analysts surveyed by Bloomberg.
The daily average volume in the stock market has more than doubled to 1.02 billion shares so far this year, compared with 408 million shares in the same period in 2009. The value of trades jumped to RM1.36 billion a day from RM602.7 million as the global economy revived and the government boosted spending to help resuscitate growth.
“Against the backdrop of a global recession, Malaysia’s economy has performed well,” Yusoff said. “It’s low and stable interest rate has been conducive for businesses to grow.”
Bursa’s profit decreased 57 per cent to RM104.4 million in 2008, when investors shunned emerging markets amid a global financial crisis.
The government may announce more “liberalization and reform measures” this month when the stock exchange holds its 6th annual Invest Malaysia conference, Yusuf said. He declined to give details. His “wish list” includes widening market access for retail investors and allowing foreign brokers to service the Malaysian market, he said.
The government has announced stimulus plans totaling RM67 billion over the past two years to help pull Southeast Asia’s third-largest economy from its recession. Prime Minister Datuk Seri Najib Razak also eased investment rules in June governing initial public offerings and takeovers to attract more overseas investors. -- Bloomberg
Monday, March 8, 2010
CIMB Bank to issue 50m CWs each on JCY, MAS, Supermax, MPHB
KUALA LUMPUR: CIMB Bank Bhd has issued 50 million European-style call warrants (CWs) each over the shares of JCY International Bhd, MALAYSIAN AIRLINE SYSTEM BHD [] (MAS), Supermax Corp Bhd and MULTI-PURPOSE HOLDINGS BHD [] (MPHB).
According to several announcements made by CIMB Bank Bhd on Monday, the tentative listing date is Tuesday, March 9 and the expiry date is March 10, 2011.
The exercise ratio is two JCY CWs for every one shares while the exercise price is RM1.35, which is 92.47% of the closing price of the shares on the price-fixing date on Feb 25 of RM1.46. The issue price for the JCY-CW is 15 sen.
As for the MAS-CW, the exercise ratio is two CWs to one MAS share and the exercise price is RM2, being 96.15% of the closing price on the price-fixing date of Feb 25 of RM2.08. The issue price for the MAS-CW is 18 sen.
On the Supermax-CW, the exercise ratio is eight CWs to one Supermax share and the exercise price is RM5.60, which is 95.08% of the closing price on Feb 25. The issue price for the Supermax-CW is 17.5 sen.
It said the MPHB-CW's exercise ratio is two CWs to one share and the exercise price is RM1.80, which is 93.26% of the closing price on Feb 25. The issue price is 17.5 sen.
Folliwing the issuance of the four CWs, the number of CWs issued by CIMB Bank is 79.
According to several announcements made by CIMB Bank Bhd on Monday, the tentative listing date is Tuesday, March 9 and the expiry date is March 10, 2011.
The exercise ratio is two JCY CWs for every one shares while the exercise price is RM1.35, which is 92.47% of the closing price of the shares on the price-fixing date on Feb 25 of RM1.46. The issue price for the JCY-CW is 15 sen.
As for the MAS-CW, the exercise ratio is two CWs to one MAS share and the exercise price is RM2, being 96.15% of the closing price on the price-fixing date of Feb 25 of RM2.08. The issue price for the MAS-CW is 18 sen.
On the Supermax-CW, the exercise ratio is eight CWs to one Supermax share and the exercise price is RM5.60, which is 95.08% of the closing price on Feb 25. The issue price for the Supermax-CW is 17.5 sen.
It said the MPHB-CW's exercise ratio is two CWs to one share and the exercise price is RM1.80, which is 93.26% of the closing price on Feb 25. The issue price is 17.5 sen.
Folliwing the issuance of the four CWs, the number of CWs issued by CIMB Bank is 79.
Thursday, March 4, 2010
Malaysia economic recovery is firmly established
KUALA LUMPUR: Bank Negara Malaysia (BNM) has raised the Overnight Policy Rate (OPR) by 25 basis points to 2.25% at its monetary policy committee (MPC) meeting on Thursday, March 4 as the economic recovery is firmly established.
However, Indonesia's central bank kept its key interest rate on hold at a record low of 6.5% on Thursday and said it will keep it there if inflation is on target.
BNM said the domestic economy has since improved significantly and is now on a path of recovery. Given this improved economic outlook, the MPC decided to adjust the OPR towards normalising monetary conditions and preventing the risk of financial imbalances that could undermine the economic recovery process.
"At the new level of the OPR, the stance of monetary policy continues to remain accommodative and supportive of economic growth," BNM said.
BNM said in the domestic economy, the stronger growth performance in the fourth quarter of 2009 affirms that the economic recovery is firmly established.
"Going forward, growth is expected to strengthen further, supported by domestic demand and continued improvement in external demand, particularly from the regional economies," it said.
BNM said the OPR was reduced to historic lows in early 2009 as a key measure to avert a severe and fundamental economic downturn but "these conditions no longer prevail".
On inflation, the central bank expected prices would gradually increase during the year, reflecting the prevailing economic conditions and taking into account possible adjustments in administered prices.
While external factors, including rising global commodity and food prices, may exert some additional upward pressure on domestic prices, it expected inflation to remain moderate in 2010.
As for the floor and ceiling rates of the corridor for the OPR, BNM said they were correspondingly raised to 2% and 2.50% respectively.
Meanwhile, Reuters reported that Indonesia's central bank kept its key interest rate on hold at a record low of 6.5 percent on Thursday and said it will keep it there if inflation is on target.
But the comments, which Bank Indonesia (BI) has repeated over the past three months, failed to alter expectations that rates will rise by the end of the third quarter.
"The main objective for keeping rates anchored is largely to support credit growth for the economy which is beginning to turn around," said Prakriti Sofat, regional economist at Barclays Capital in Singapore.
"Going forward we think the two factors that will be dominant would be the inflation outlook itself and the development of the credit growth."
However, Indonesia's central bank kept its key interest rate on hold at a record low of 6.5% on Thursday and said it will keep it there if inflation is on target.
BNM said the domestic economy has since improved significantly and is now on a path of recovery. Given this improved economic outlook, the MPC decided to adjust the OPR towards normalising monetary conditions and preventing the risk of financial imbalances that could undermine the economic recovery process.
"At the new level of the OPR, the stance of monetary policy continues to remain accommodative and supportive of economic growth," BNM said.
BNM said in the domestic economy, the stronger growth performance in the fourth quarter of 2009 affirms that the economic recovery is firmly established.
"Going forward, growth is expected to strengthen further, supported by domestic demand and continued improvement in external demand, particularly from the regional economies," it said.
BNM said the OPR was reduced to historic lows in early 2009 as a key measure to avert a severe and fundamental economic downturn but "these conditions no longer prevail".
On inflation, the central bank expected prices would gradually increase during the year, reflecting the prevailing economic conditions and taking into account possible adjustments in administered prices.
While external factors, including rising global commodity and food prices, may exert some additional upward pressure on domestic prices, it expected inflation to remain moderate in 2010.
As for the floor and ceiling rates of the corridor for the OPR, BNM said they were correspondingly raised to 2% and 2.50% respectively.
Meanwhile, Reuters reported that Indonesia's central bank kept its key interest rate on hold at a record low of 6.5 percent on Thursday and said it will keep it there if inflation is on target.
But the comments, which Bank Indonesia (BI) has repeated over the past three months, failed to alter expectations that rates will rise by the end of the third quarter.
"The main objective for keeping rates anchored is largely to support credit growth for the economy which is beginning to turn around," said Prakriti Sofat, regional economist at Barclays Capital in Singapore.
"Going forward we think the two factors that will be dominant would be the inflation outlook itself and the development of the credit growth."
Adventa 1QFY10 Results Review: Forex Losses No More
ADVENTA (TP RM5.37– BUY)
The 1QFY10 results were within expectations, mainly contributed by continuously strong demand for examination gloves, which enabled the company to not only fully pass on the cost increase to customers in a timely manner but also allowed it to command premium selling prices. Going forward, we expect demand for its examination gloves to remain firm given Adventa’s niche in surgical and dental gloves. Maintain Buy, with our target price maintained at RM5.37 based on a PER of 15x FY11 EPS - OSK.
2359 GMT [Dow Jones] Adventa (7191.KU) may rise to MYR3.46 (yesterday's intraday high) vs yesterday's close at MYR3.38 (+0.3%) says trader; this after company posts fiscal 1Q net profit to January 31 of MYR9.35 million vs MYR3.23 million year earlier; revenue rises to MYR76.8 million vs MYR68.2 million previously. Surgical gloves maker says demand for both surgical, non-sterile examination gloves "strong in all markets", increase in price of natural rubber latex not cause for concern, successfully passed on to consumer in previous quarters, "we do not see any difficulties this year in this respect as the commodity prices are well publicised," but adds, may see small change in margins in 2Q due to time lag in price increments. Trader says better results will boost shares; latex glove makers are benefiting from high demand coupled with tight supply situation; "it's not likely to change this year," trader says. (KPL)
CIMB Research maintains Outperform on Adventa - tp=RM5.44
The 1QFY10 results were within expectations, mainly contributed by continuously strong demand for examination gloves, which enabled the company to not only fully pass on the cost increase to customers in a timely manner but also allowed it to command premium selling prices. Going forward, we expect demand for its examination gloves to remain firm given Adventa’s niche in surgical and dental gloves. Maintain Buy, with our target price maintained at RM5.37 based on a PER of 15x FY11 EPS - OSK.
2359 GMT [Dow Jones] Adventa (7191.KU) may rise to MYR3.46 (yesterday's intraday high) vs yesterday's close at MYR3.38 (+0.3%) says trader; this after company posts fiscal 1Q net profit to January 31 of MYR9.35 million vs MYR3.23 million year earlier; revenue rises to MYR76.8 million vs MYR68.2 million previously. Surgical gloves maker says demand for both surgical, non-sterile examination gloves "strong in all markets", increase in price of natural rubber latex not cause for concern, successfully passed on to consumer in previous quarters, "we do not see any difficulties this year in this respect as the commodity prices are well publicised," but adds, may see small change in margins in 2Q due to time lag in price increments. Trader says better results will boost shares; latex glove makers are benefiting from high demand coupled with tight supply situation; "it's not likely to change this year," trader says. (KPL)
CIMB Research maintains Outperform on Adventa - tp=RM5.44
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