話說有一個女人到了婚姻介紹所徵婚....
她跟介紹所的人說她理想對像的條件是：
「我理想的丈夫，白天要像紳士、晚上要如猛獸...」
介紹所的人：「那我介紹狼人給妳好了！」
女人：「那如果...不是月圓之日怎麼辦勒？」
Sunday, February 28, 2010
Saturday, February 27, 2010
久了就明白
法文課時，老師完全以法文講解，
學生不大聽得懂，要求他加一點中文補充。
老師站在訓練學生聽力的觀點上說：
「不要害怕聽不懂，學語言就是要多聽。
你們每天聽我說法文，久了自然就明白了。」
這時有個學生忽然說：
「可是我每天聽小狗叫，也不知道牠在說些什麼？」
學生不大聽得懂，要求他加一點中文補充。
老師站在訓練學生聽力的觀點上說：
「不要害怕聽不懂，學語言就是要多聽。
你們每天聽我說法文，久了自然就明白了。」
這時有個學生忽然說：
「可是我每天聽小狗叫，也不知道牠在說些什麼？」
Thursday, February 25, 2010
UNISEM ... Feb10
S&P Results Review & Earnings Outlook
- Unisem’s full year net profit of MYR61.8 mln (+211.6% YoY) was above our expectations, mainly due to a MYR2.4 mln tax credit for the year (vs. our MYR6.9 mln tax expense estimate). Excluding this, pretax earnings and EBITDA were in line with our estimates.
- On a QoQ basis, net profit soared 35.9% to MYR35.1 mln in 4Q09, driven by its Chengdu operations which now accounts for 24% of revenue and more than 50% of the group’s bottom line. Segment wise, all units except for Unisem-Advanpack Technologies (UAT) – which undertakes packaging and bumping of semiconductor devices, have returned to profitability. Nevertheless, management expects UAT to
turn around in 2010, backed by stronger demand in mobile phones.
- Despite the typically slower period in 1Q10, management expects 3%-5% sequential growth, and sees a more positive 2010 coupled with healthy EBITDA margins (above 25%), driven by improved demand visibility and stronger chip recovery. According to management, there is currently a shortage of capacity in the outsourced assembly and test market, with no signs of inventory build-up. Management is guiding for a 50%-100% increase in capex for 2010 and expects 2010 to be the best year ever for the group in terms of revenue and earnings.
- We maintain our revenue forecast for 2010-2011 but raise our EBITDA margin assumption to 24.5% from 23% previously. As a result, we are now increasing our net profit projections by 5%-13% for 2010-2011.
Recommendation & Investment Risks
- We maintain our Strong Buy recommendation but raise our 12-month target price to MYR2.70 (from MYR2.10 previously) given our earnings upgrade and higher valuation amid the improving outlook.
- Unisem is expected to benefit from the recovery in chip demand and rising outsourcing trend in the region. We also like Unisem for its hands-on-management, conservative balance sheet (0.35x net gearing as at Dec. 31, 2009) and clear growth strategy.
- Our target price continues to be based on P/BV valuation. We are raising our target 2011 P/BV multiple (previously 2010 P/BV) to 1.1x (from 1x previously), based on a 15% premium (previously no premium) to Unisem’s historical 5-year median P/BV. We attach a premium to reflect the sector’s improving outlook. At current price,
valuations are attractive, in our opinion, trading at 2010 and 2011 PERs of 8.6x and 8.0x, respectively. Additionally, our target price also includes a projected tax-exempt DPS of 2.5 sen (from 2.3 sen).
- Risks to our recommendation and target price include a slower-thanexpected recovery in the semiconductor sector and appreciation in the MYR.
- Unisem’s full year net profit of MYR61.8 mln (+211.6% YoY) was above our expectations, mainly due to a MYR2.4 mln tax credit for the year (vs. our MYR6.9 mln tax expense estimate). Excluding this, pretax earnings and EBITDA were in line with our estimates.
- On a QoQ basis, net profit soared 35.9% to MYR35.1 mln in 4Q09, driven by its Chengdu operations which now accounts for 24% of revenue and more than 50% of the group’s bottom line. Segment wise, all units except for Unisem-Advanpack Technologies (UAT) – which undertakes packaging and bumping of semiconductor devices, have returned to profitability. Nevertheless, management expects UAT to
turn around in 2010, backed by stronger demand in mobile phones.
- Despite the typically slower period in 1Q10, management expects 3%-5% sequential growth, and sees a more positive 2010 coupled with healthy EBITDA margins (above 25%), driven by improved demand visibility and stronger chip recovery. According to management, there is currently a shortage of capacity in the outsourced assembly and test market, with no signs of inventory build-up. Management is guiding for a 50%-100% increase in capex for 2010 and expects 2010 to be the best year ever for the group in terms of revenue and earnings.
- We maintain our revenue forecast for 2010-2011 but raise our EBITDA margin assumption to 24.5% from 23% previously. As a result, we are now increasing our net profit projections by 5%-13% for 2010-2011.
Recommendation & Investment Risks
- We maintain our Strong Buy recommendation but raise our 12-month target price to MYR2.70 (from MYR2.10 previously) given our earnings upgrade and higher valuation amid the improving outlook.
- Unisem is expected to benefit from the recovery in chip demand and rising outsourcing trend in the region. We also like Unisem for its hands-on-management, conservative balance sheet (0.35x net gearing as at Dec. 31, 2009) and clear growth strategy.
- Our target price continues to be based on P/BV valuation. We are raising our target 2011 P/BV multiple (previously 2010 P/BV) to 1.1x (from 1x previously), based on a 15% premium (previously no premium) to Unisem’s historical 5-year median P/BV. We attach a premium to reflect the sector’s improving outlook. At current price,
valuations are attractive, in our opinion, trading at 2010 and 2011 PERs of 8.6x and 8.0x, respectively. Additionally, our target price also includes a projected tax-exempt DPS of 2.5 sen (from 2.3 sen).
- Risks to our recommendation and target price include a slower-thanexpected recovery in the semiconductor sector and appreciation in the MYR.
BHIC ... Feb10
TA on BHIC Target Price : RM5.70
Weak 4Q09 Earnings
4Q09 results were generally below our expectations. Revenue actually rose 13.4% QoQ to RM163.6mn, thanks to higher progress billing. Pretax profit on the other hand
declined 21.5% QoQ to RM22.0mn as a result of 23.6% contraction in operating profit. We understand that operating margin was affected by some cost overrun in relation to the chemical tanker contract as well as RM6mn in LAD booked in the quarter. In addition, contribution from Boustead Naval Shipyard S/B (BNS) also declined by 14.2% due to lower progress billing. However, YoY, net profit rose 24.2%, indicating the pace of work continued to increase.
Full Year Earnings Below Expectations
Consequently, FY09 earnings fell short of our expectations. Bulk of the discrepancy was attributable to higher cost incurred. Revenue though was in line with our estimate. All in, revenue increased 9.6% to RM543.9mn on the back of higher progress billing. Operating profit however declined 17.9% YoY due to the cost overrun and LAD payment mentioned above. Associate contribution declined by over 50% YoY to RM22.1mn. The comparison was distorted by a reversal of notional tax charge amounting to RM21.2mn in FY08. Excluding the one-off item, associate contribution would have declined by only 7.1% YoY due to lower progress billing. As a consolation though, the group declared 6 sen single-tier dividends (5.5 sen in FY09), translating
into 1.3% yield at the current price.
Submarine Issue Being Resolved
We understand that the technical defect that caused KD Tunku Abdul Rahman unable to dive is close to being resolved currently. At this juncture, we do not expect any
material impact on BNS arising from this issue. As for the life extension contracts for the two military corvettes, we understand that the contract details are being
finalized and expected to start contributing to bottomline in 2H10.
Order Book Replenishment High On Agenda
Current order book amounted to c. RM850mn and management continues to be upbeat on securing new contracts in FY10 although they are tightlipped on thedetails. Out of the RM850mn, RM600mn is for construction of OPVs (under its 20.77% associate, BNS).
According to management, the fifth OPV is already close to being delivered to the navy and the work on the sixth OPV is expected to complete by mid-2010.
Recommendation
Earnings Forecast Revised Lower
We have made several changes to assumptions, 1) FY10 revenue estimate revised lower by 13.4% after imputing a more conservative outlook in the potential new order book.
We now assume RM500mn worth of new contracts in FY10, 2) updated balance order book for the Ops contract, and 3) margin assumption adjusted higher as we do not expect
further significant cost overrun or LAD payment in FY10. The net impact is a 12.9% downgrade in FY10 net profit estimate to RM118.6mn.
Lower TP But BHIC Remains A Buy
Target price revised lower to RM5.70 but BHIC remains a Buy as the 24% upside potential to the share price. The target price is based on 12x target PER, a slight premium compared with long term average PER of 11x. We think the modest premium is justified given the relatively conservative earnings assumptions and high likelihood of BNS securing fresh OPVs contract by the end of the year.
Weak 4Q09 Earnings
4Q09 results were generally below our expectations. Revenue actually rose 13.4% QoQ to RM163.6mn, thanks to higher progress billing. Pretax profit on the other hand
declined 21.5% QoQ to RM22.0mn as a result of 23.6% contraction in operating profit. We understand that operating margin was affected by some cost overrun in relation to the chemical tanker contract as well as RM6mn in LAD booked in the quarter. In addition, contribution from Boustead Naval Shipyard S/B (BNS) also declined by 14.2% due to lower progress billing. However, YoY, net profit rose 24.2%, indicating the pace of work continued to increase.
Full Year Earnings Below Expectations
Consequently, FY09 earnings fell short of our expectations. Bulk of the discrepancy was attributable to higher cost incurred. Revenue though was in line with our estimate. All in, revenue increased 9.6% to RM543.9mn on the back of higher progress billing. Operating profit however declined 17.9% YoY due to the cost overrun and LAD payment mentioned above. Associate contribution declined by over 50% YoY to RM22.1mn. The comparison was distorted by a reversal of notional tax charge amounting to RM21.2mn in FY08. Excluding the one-off item, associate contribution would have declined by only 7.1% YoY due to lower progress billing. As a consolation though, the group declared 6 sen single-tier dividends (5.5 sen in FY09), translating
into 1.3% yield at the current price.
Submarine Issue Being Resolved
We understand that the technical defect that caused KD Tunku Abdul Rahman unable to dive is close to being resolved currently. At this juncture, we do not expect any
material impact on BNS arising from this issue. As for the life extension contracts for the two military corvettes, we understand that the contract details are being
finalized and expected to start contributing to bottomline in 2H10.
Order Book Replenishment High On Agenda
Current order book amounted to c. RM850mn and management continues to be upbeat on securing new contracts in FY10 although they are tightlipped on thedetails. Out of the RM850mn, RM600mn is for construction of OPVs (under its 20.77% associate, BNS).
According to management, the fifth OPV is already close to being delivered to the navy and the work on the sixth OPV is expected to complete by mid-2010.
Recommendation
Earnings Forecast Revised Lower
We have made several changes to assumptions, 1) FY10 revenue estimate revised lower by 13.4% after imputing a more conservative outlook in the potential new order book.
We now assume RM500mn worth of new contracts in FY10, 2) updated balance order book for the Ops contract, and 3) margin assumption adjusted higher as we do not expect
further significant cost overrun or LAD payment in FY10. The net impact is a 12.9% downgrade in FY10 net profit estimate to RM118.6mn.
Lower TP But BHIC Remains A Buy
Target price revised lower to RM5.70 but BHIC remains a Buy as the 24% upside potential to the share price. The target price is based on 12x target PER, a slight premium compared with long term average PER of 11x. We think the modest premium is justified given the relatively conservative earnings assumptions and high likelihood of BNS securing fresh OPVs contract by the end of the year.
KSL ... Feb10
TA on KSL @ Target Price : RM1.59
1. Encouraging sales performance
4Q09 sales rose 44% yoy to RM55.7m (refer to Chart 1) underpinned by increasing demand for properties in Johor. On a cumulative basis, FY09 sales increased by 7.3% yoy to RM228m thanks to the overwhelming response to the promotional programme such as 100% loan facilities, free legal fee and stamp duty. This has boosted the group’s FY09 unbilled sales to RM115m (refer to Table 1) from RM63m a year ago. However, we are adjusting downward our FY09-10 sales forecasts to RM228m and RM260m respectively,
from RM250m and RM290 previously, to be in line with management guidance.
2.Results preview
Given the downgrade in our sales forecasts, we lower our FY09-10 earnings by 10%-14% respectively. As such, we are expecting KSL to report earnings in between RM13m to RM16m this Thursday, representing a significant growth in core net profit over year. The estimated stronger FY09 earnings can be attributed to higher progress billing.
3. Klang Valley project is ready to go
With regard to its first development project in the Klang Valley, we understand that the company has received 1st stage approval, pending on building plan permit before
the group can start launching the project. Based on management estimates, this project is now targeted to be launched in early 2Q10, a slight delay from 1Q10 as
guided previously. For a starter, the company would launch 300-400 units of terrace houses (32’x75’) with estimated GDV of approximately RM130m. We have assumed a sale of RM80m (take up rate of 62%) from this project for FY10.
4. Forecast
We downgrade our FY09-10 earnings by 10%-14% to reflect the change in our FY09-10 sales assumptions. We now assume KSL’s FY10-11 sales to reach RM260m (down from RM290m previously) and RM315m (unchanged) respectively.
5. Recommendation
Given the change in our earnings estimates, we downgrade KSL’s fair value to RM1.59/share from RM1.84/share previously, based on an unchanged PER of 8x CY10 EPS. We continue to like KSL given: 1) its ability to garner above-average development margins of >40% underpinned by its centralised procurement units that help in reducing development cost; and 2) strong financial standing with net cash position. Maintain Buy.
1. Encouraging sales performance
4Q09 sales rose 44% yoy to RM55.7m (refer to Chart 1) underpinned by increasing demand for properties in Johor. On a cumulative basis, FY09 sales increased by 7.3% yoy to RM228m thanks to the overwhelming response to the promotional programme such as 100% loan facilities, free legal fee and stamp duty. This has boosted the group’s FY09 unbilled sales to RM115m (refer to Table 1) from RM63m a year ago. However, we are adjusting downward our FY09-10 sales forecasts to RM228m and RM260m respectively,
from RM250m and RM290 previously, to be in line with management guidance.
2.Results preview
Given the downgrade in our sales forecasts, we lower our FY09-10 earnings by 10%-14% respectively. As such, we are expecting KSL to report earnings in between RM13m to RM16m this Thursday, representing a significant growth in core net profit over year. The estimated stronger FY09 earnings can be attributed to higher progress billing.
3. Klang Valley project is ready to go
With regard to its first development project in the Klang Valley, we understand that the company has received 1st stage approval, pending on building plan permit before
the group can start launching the project. Based on management estimates, this project is now targeted to be launched in early 2Q10, a slight delay from 1Q10 as
guided previously. For a starter, the company would launch 300-400 units of terrace houses (32’x75’) with estimated GDV of approximately RM130m. We have assumed a sale of RM80m (take up rate of 62%) from this project for FY10.
4. Forecast
We downgrade our FY09-10 earnings by 10%-14% to reflect the change in our FY09-10 sales assumptions. We now assume KSL’s FY10-11 sales to reach RM260m (down from RM290m previously) and RM315m (unchanged) respectively.
5. Recommendation
Given the change in our earnings estimates, we downgrade KSL’s fair value to RM1.59/share from RM1.84/share previously, based on an unchanged PER of 8x CY10 EPS. We continue to like KSL given: 1) its ability to garner above-average development margins of >40% underpinned by its centralised procurement units that help in reducing development cost; and 2) strong financial standing with net cash position. Maintain Buy.
Wednesday, February 24, 2010
Malton ... Feb10
S&P Results Review & Earnings Outlook
• Malton’s 1HFY10 (Jun) net profit of MYR12.9 mln (+270% YoY) was ahead of expectations as it reached 66% of our previous FY10 estimate. Although revenue fell 15% YoY to MYR196 mln, it was within expectations (52% of our FY10 estimate) after the completion of a sizeable construction project in FY09.
• The better-than-expected earnings were due to higher margins (1HFY10 EBIT margin of 11.2% vs. 3.4% in 1HFY09) that resulted from its cost containment measures and improved margins on its property development projects.
• Following the completion of the Pearl Villas and Bayu Villas developments as well as the Carrefour Hypermarket project in 2QFY10, earnings recognition will be slower in 2HFY10. However, Malton’s prospects remain firm in FY11, underpinned by unbilled sales of MYR350 mln from the Amaya Saujana, VSQ corporate suites and Mutiara Puchong projects, where recent take- up rates have improved. Its construction arm’s orderbook of MYR700 mln will also help to sustain earnings in FY11, with the construction of an MYR370-mln shopping mall in Petaling Jaya expected to commence in 4QFY10.
• We have fine-tuned our assumptions and after imputing maiden earnings from a newly acquired associate, we lift our FY10 net profit forecast to MYR21.5 mln (from MYR19.4 mln). For FY11, however, we trim our net profit estimate to MYR23.6 mln (from MYR24.1 mln), following the earlier completion of some of its projects.
Recommendation & Investment Risks
• We maintain our Strong Buy recommendation and 12-month target price of MYR0.50.
• Our target price is derived from applying an unchanged P/NTA multiple of 0.4x to Malton’s prospective FY10 (unchanged) NTA of MYR1.26 per share. We continue to ascribe a target P/NTA that remains within the valuation metrics of 0.4x-1.0x for small- and mid-cap property developers within our coverage. We also continue to leave out a dividend forecast from our target price, as it has not declared any
dividend in the past two years.
• Our Strong Buy call continues to reflect Malton’s improving earnings visibility over the next two years, which is backed by strong unbilled property sales and improving development margins. Furthermore, the start of some of its construction projects will also add resilience to its forward earnings. Trading at prospective FY10 and FY11 PERs of 5.8x and 5.1x respectively, Malton’s valuation remains attractive, as they are at the lower end of the 5x-11x PER range of small- to mediumsized construction and property developers within our coverage.
• Risks to our recommendation and target price include: (i) slower-than expected take-up rates for its future launches, which include Phase three of the Amaya Saujana development and its projects in Puchong, (ii) profit margin compression due to higher building materials cost, and (iii) failure of its construction division to secure more external contracts.
• Malton’s 1HFY10 (Jun) net profit of MYR12.9 mln (+270% YoY) was ahead of expectations as it reached 66% of our previous FY10 estimate. Although revenue fell 15% YoY to MYR196 mln, it was within expectations (52% of our FY10 estimate) after the completion of a sizeable construction project in FY09.
• The better-than-expected earnings were due to higher margins (1HFY10 EBIT margin of 11.2% vs. 3.4% in 1HFY09) that resulted from its cost containment measures and improved margins on its property development projects.
• Following the completion of the Pearl Villas and Bayu Villas developments as well as the Carrefour Hypermarket project in 2QFY10, earnings recognition will be slower in 2HFY10. However, Malton’s prospects remain firm in FY11, underpinned by unbilled sales of MYR350 mln from the Amaya Saujana, VSQ corporate suites and Mutiara Puchong projects, where recent take- up rates have improved. Its construction arm’s orderbook of MYR700 mln will also help to sustain earnings in FY11, with the construction of an MYR370-mln shopping mall in Petaling Jaya expected to commence in 4QFY10.
• We have fine-tuned our assumptions and after imputing maiden earnings from a newly acquired associate, we lift our FY10 net profit forecast to MYR21.5 mln (from MYR19.4 mln). For FY11, however, we trim our net profit estimate to MYR23.6 mln (from MYR24.1 mln), following the earlier completion of some of its projects.
Recommendation & Investment Risks
• We maintain our Strong Buy recommendation and 12-month target price of MYR0.50.
• Our target price is derived from applying an unchanged P/NTA multiple of 0.4x to Malton’s prospective FY10 (unchanged) NTA of MYR1.26 per share. We continue to ascribe a target P/NTA that remains within the valuation metrics of 0.4x-1.0x for small- and mid-cap property developers within our coverage. We also continue to leave out a dividend forecast from our target price, as it has not declared any
dividend in the past two years.
• Our Strong Buy call continues to reflect Malton’s improving earnings visibility over the next two years, which is backed by strong unbilled property sales and improving development margins. Furthermore, the start of some of its construction projects will also add resilience to its forward earnings. Trading at prospective FY10 and FY11 PERs of 5.8x and 5.1x respectively, Malton’s valuation remains attractive, as they are at the lower end of the 5x-11x PER range of small- to mediumsized construction and property developers within our coverage.
• Risks to our recommendation and target price include: (i) slower-than expected take-up rates for its future launches, which include Phase three of the Amaya Saujana development and its projects in Puchong, (ii) profit margin compression due to higher building materials cost, and (iii) failure of its construction division to secure more external contracts.
MahSing ... Feb10
S&P Results Review & Earnings Outlook
• MS’s 2009 results were broadly within our expectations. Net profit rose a marginal 1.2% to MYR94.3 mln from MYR93.2 mln the year before. Other income jumped to MYR48.0 mln from MYR2.9 mln in 2008, due to a forfeited deposit of MYR42.7 mln from the abandoned sale of ICON@Tun Razak.
• MS managed to book in total sales of MYR727 mln in 2009 compared with its original sales target of MYR453 mln, and now aims to achieve total sales of MYR1 bln in 2010. Separately, MS announced the acquisition of 6.32 acres of commercial land adjacent to the 115.25-acre residential project in Cyberjaya for MYR21.7 mln or MYR79.0 psf
(including MYR1.80 psf for infrastructure). MS plans to develop MYR288 mln worth of commercial properties on the new landbank.
• MS has unbilled sales of MYR690.4 mln, a remaining gross development value of MYR1.1 bln for its existing projects, and MYR4.1 bln worth of new projects in hand. We adjust our 2010 forecast net profit slightly and introduce our 2011 net profit estimate of MYR113.5 mln.
• MS has proposed a first and final dividend of 6 sen based on its enlarged share capital (after its proposed 1-for-5 bonus issue of up to 151.3 mln shares), which is equivalent to 7.8 sen before the proposed bonus issue. The proposed bonus issue is pending the necessary approvals and has not gone ex yet.
Recommendation & Investment Risks
• We maintain our Buy recommendation and our 12-month target price of MYR2.20. MS is one of the leading developers in the country with a balance GDV of MYR5.3 bln (including new projects) for its undeveloped land bank of 720 acres, which will be developed over the next nine to ten years. Going forward, MS is looking to expand into high-growth regional countries such as Vietnam, India, China and Indonesia.
• Our target price is based on ascribing an 11x PER (unchanged) to our 2010 EPS estimate and includes a prospective net DPS. Our ascribed PER is within our usual PER valuation assigned to small- to mid-cap property companies with niche projects. Its target multiple reflects its consistent track record in achieving high take-up rates, track record in sourcing for reasonably prime landbank, and improved earnings
visibility.
• Risks to our recommendation and target price include an unexpected slowdown in property demand in Malaysia. Delays in launches and/or poor take-up rates will also jeopardize its premium valuation, in our view.
• MS’s 2009 results were broadly within our expectations. Net profit rose a marginal 1.2% to MYR94.3 mln from MYR93.2 mln the year before. Other income jumped to MYR48.0 mln from MYR2.9 mln in 2008, due to a forfeited deposit of MYR42.7 mln from the abandoned sale of ICON@Tun Razak.
• MS managed to book in total sales of MYR727 mln in 2009 compared with its original sales target of MYR453 mln, and now aims to achieve total sales of MYR1 bln in 2010. Separately, MS announced the acquisition of 6.32 acres of commercial land adjacent to the 115.25-acre residential project in Cyberjaya for MYR21.7 mln or MYR79.0 psf
(including MYR1.80 psf for infrastructure). MS plans to develop MYR288 mln worth of commercial properties on the new landbank.
• MS has unbilled sales of MYR690.4 mln, a remaining gross development value of MYR1.1 bln for its existing projects, and MYR4.1 bln worth of new projects in hand. We adjust our 2010 forecast net profit slightly and introduce our 2011 net profit estimate of MYR113.5 mln.
• MS has proposed a first and final dividend of 6 sen based on its enlarged share capital (after its proposed 1-for-5 bonus issue of up to 151.3 mln shares), which is equivalent to 7.8 sen before the proposed bonus issue. The proposed bonus issue is pending the necessary approvals and has not gone ex yet.
Recommendation & Investment Risks
• We maintain our Buy recommendation and our 12-month target price of MYR2.20. MS is one of the leading developers in the country with a balance GDV of MYR5.3 bln (including new projects) for its undeveloped land bank of 720 acres, which will be developed over the next nine to ten years. Going forward, MS is looking to expand into high-growth regional countries such as Vietnam, India, China and Indonesia.
• Our target price is based on ascribing an 11x PER (unchanged) to our 2010 EPS estimate and includes a prospective net DPS. Our ascribed PER is within our usual PER valuation assigned to small- to mid-cap property companies with niche projects. Its target multiple reflects its consistent track record in achieving high take-up rates, track record in sourcing for reasonably prime landbank, and improved earnings
visibility.
• Risks to our recommendation and target price include an unexpected slowdown in property demand in Malaysia. Delays in launches and/or poor take-up rates will also jeopardize its premium valuation, in our view.
Tuesday, February 23, 2010
DNP ... Feb10
Wing Tai, together with its regional network of listed companies, DNP (in Malaysia) and USI Holdings Ltd (in Hong Kong), form WingTai Asia which has a growing presence in property investment and development in key Asian cities.
WingTai Asia has to date completed about 70 projects comprising mid-range to high-end properties in Singapore, Hong Kong and Malaysia.
With the economy showing signs of recovery following the global financial crisis, the group foresees an exciting year ahead and has lined up several new launches.
The group is embarking on a few high-end property developments in Malaysia and is also looking to acquire some land within the Klang Valley. DNP’s latest high-end project in Malaysia is the Verticas Residensi in Bukit Ceylon, Kuala Lumpur. The group may embark on another high-end property project in Jalan U-Thant, Kuala Lumpur, in the third quarter 2010.
DNP has completed a number of high-end projects in the country which include the mixed development Sering Ukay in Hulu Kelang and The Meritz condominium in Kuala Lumpur. It also has projects in Penang and Johor Baru.
WingTai Asia also owns serviced residences in Malaysia – Lanson Place condominium at Ampang Hilir and Lanson Place Ambassador Row in Kuala Lumpur – which are operated under its hospitality brand Lanson Place. Lanson Place, which has its head-office in Hong Kong, also owns serviced residences in China and a hotel in Hong Kong.
WingTai Asia has to date completed about 70 projects comprising mid-range to high-end properties in Singapore, Hong Kong and Malaysia.
With the economy showing signs of recovery following the global financial crisis, the group foresees an exciting year ahead and has lined up several new launches.
The group is embarking on a few high-end property developments in Malaysia and is also looking to acquire some land within the Klang Valley. DNP’s latest high-end project in Malaysia is the Verticas Residensi in Bukit Ceylon, Kuala Lumpur. The group may embark on another high-end property project in Jalan U-Thant, Kuala Lumpur, in the third quarter 2010.
DNP has completed a number of high-end projects in the country which include the mixed development Sering Ukay in Hulu Kelang and The Meritz condominium in Kuala Lumpur. It also has projects in Penang and Johor Baru.
WingTai Asia also owns serviced residences in Malaysia – Lanson Place condominium at Ampang Hilir and Lanson Place Ambassador Row in Kuala Lumpur – which are operated under its hospitality brand Lanson Place. Lanson Place, which has its head-office in Hong Kong, also owns serviced residences in China and a hotel in Hong Kong.
Monday, February 22, 2010
Masteel ... Feb10
The company is expanding its bread-and-butter steel production capacity to capitalise on the anticipated higher demand and prices for the building material and taking firm steps to turn its new biotechnology venture into a regional business.
Masteel planned to more than double the annual output capacity for its downstream steel products from some 280,000 tonnes now to 580,000 tonnes by 2012. This is in line with the group’s intention to boost upstream operations involving the production of billets, by a third to 600,000 tonnes by then, and secure new foreign buyers for its steel products.
Masteel also plans to invest around RM300 million to expand its downstream operations to meet rising demand for steel products in the domestic and overseas markets. The expansion, involving an additional 300,000 tonnes of steel products, will be undertaken at a new plant on some eight hectares of company-owned land adjacent to its billet factory in Klang.
The initiative, to be completed by 2012 and financed via internally generated funds and bank borrowings, will see Masteel widening its product range to cater for more market segments.
The firm was eyeing new business opportunities in Sri Lanka in anticipation that reconstruction of the war-torn island nation would fuel demand for steel products. Masteel has been expanding its global reach to include South Pacific countries like Australia and New Zealand, apart from buyers in several Southeast Asian countries.
In October 2007, the company signed an off-take agreement with Stemcor Australia Pty Ltd, a steel products trading house based in Sydney. The two-year arrangement involved the export of some RM120 million worth of steel bars by Masteel to Australia via Stemcor.
Masteel’s biotechnology arm is a new source of income to cushion the firm’s financials againsts a cyclical steel industry, which is subject to the ups and downs of the construction sector.
In November 2007, Masteel surprised the investment fraternity when the steel producer announced its intention to collaborate with a European company to produce fluorodeoxyglucose (FDG), a chemical substance also known as radiopharmaceutical which is injected into the human body for cancer detection during Positron Emission Tomography scans.
Masteel had set up a wholly owned unit Bio Molecular Industries Sdn Bhd (BMI), which is intended as a joint-venture (JV) entity with Belgium firm IBA Molecular.
Masteel is also offering its expertise in complex- manufacturing processes, thanks to its years of experience in steel production. IBA, meanwhile, will provide cyclotrons, the equipment for producing a range of radiopharmaceuticals.
Masteel planned to more than double the annual output capacity for its downstream steel products from some 280,000 tonnes now to 580,000 tonnes by 2012. This is in line with the group’s intention to boost upstream operations involving the production of billets, by a third to 600,000 tonnes by then, and secure new foreign buyers for its steel products.
Masteel also plans to invest around RM300 million to expand its downstream operations to meet rising demand for steel products in the domestic and overseas markets. The expansion, involving an additional 300,000 tonnes of steel products, will be undertaken at a new plant on some eight hectares of company-owned land adjacent to its billet factory in Klang.
The initiative, to be completed by 2012 and financed via internally generated funds and bank borrowings, will see Masteel widening its product range to cater for more market segments.
The firm was eyeing new business opportunities in Sri Lanka in anticipation that reconstruction of the war-torn island nation would fuel demand for steel products. Masteel has been expanding its global reach to include South Pacific countries like Australia and New Zealand, apart from buyers in several Southeast Asian countries.
In October 2007, the company signed an off-take agreement with Stemcor Australia Pty Ltd, a steel products trading house based in Sydney. The two-year arrangement involved the export of some RM120 million worth of steel bars by Masteel to Australia via Stemcor.
Masteel’s biotechnology arm is a new source of income to cushion the firm’s financials againsts a cyclical steel industry, which is subject to the ups and downs of the construction sector.
In November 2007, Masteel surprised the investment fraternity when the steel producer announced its intention to collaborate with a European company to produce fluorodeoxyglucose (FDG), a chemical substance also known as radiopharmaceutical which is injected into the human body for cancer detection during Positron Emission Tomography scans.
Masteel had set up a wholly owned unit Bio Molecular Industries Sdn Bhd (BMI), which is intended as a joint-venture (JV) entity with Belgium firm IBA Molecular.
Masteel is also offering its expertise in complex- manufacturing processes, thanks to its years of experience in steel production. IBA, meanwhile, will provide cyclotrons, the equipment for producing a range of radiopharmaceuticals.
CCM ... Feb10
Industry observers say the recently-secured contract for generic Tamiflu is expected to boost CCM Duopharma Biotech Bhd earnings for financial year 2010.
The RM32 million contract awarded to CCMD in October 2009 represented 50 per cent of the total government contract for the supply of the generic Tamiflu. CCMD also believes there is upside potential for the current contract given that currently it only covers 10 per cent of the total population against the government's goal to achieve about 20 per cent stockpile of the nation's populace.
The group also expects its upcoming human vaccines fill and finish (F&F) to drive earnings momentum from FY11 onwards.
The RM32 million contract awarded to CCMD in October 2009 represented 50 per cent of the total government contract for the supply of the generic Tamiflu. CCMD also believes there is upside potential for the current contract given that currently it only covers 10 per cent of the total population against the government's goal to achieve about 20 per cent stockpile of the nation's populace.
The group also expects its upcoming human vaccines fill and finish (F&F) to drive earnings momentum from FY11 onwards.
Sunday, February 21, 2010
算數
課堂中，老師說：「如果我分別給你1 隻、2 隻、3 隻狗，那你共有幾隻狗？」
學生說：「7 隻！」
老師疑惑的又問了一遍：「如果我分別給你1 隻、2 隻、3 隻狗，那你共有幾隻狗？」
學生仍說：「7 隻！」
老師不肯放棄，決定用另一種方式問：「如果我分別給你1 瓶、2 瓶酒、3 瓶酒，那你共有幾瓶酒？」
學生說：「6 瓶！」
老師說：「太好了！同理可證。
我分別給你1隻、2隻、3隻，那你共有幾隻狗？」
學生說：「7 隻！」
老師實在受不了：
「你是豬啊！你怎麼算出 7 隻的！」
學生慢慢地回答說：「我家己經養了一隻狗，你給我6 隻，那不就共有7 隻了嗎？」
學生說：「7 隻！」
老師疑惑的又問了一遍：「如果我分別給你1 隻、2 隻、3 隻狗，那你共有幾隻狗？」
學生仍說：「7 隻！」
老師不肯放棄，決定用另一種方式問：「如果我分別給你1 瓶、2 瓶酒、3 瓶酒，那你共有幾瓶酒？」
學生說：「6 瓶！」
老師說：「太好了！同理可證。
我分別給你1隻、2隻、3隻，那你共有幾隻狗？」
學生說：「7 隻！」
老師實在受不了：
「你是豬啊！你怎麼算出 7 隻的！」
學生慢慢地回答說：「我家己經養了一隻狗，你給我6 隻，那不就共有7 隻了嗎？」
Saturday, February 20, 2010
Thursday, February 18, 2010
DAIBOCHI ... Feb10
DAIBOCHI PLASTIC AND PACKAGING INDUSTRY NET PROFIT FOR 4QE DEC 2009 ROSE 166.7% YOY
DAIBOCHI PLASTIC AND PACKAGING INDUSTRY's Net Profit increased by 166.7% to RM6m for 4QE Dec 2009 from RM2.2m same quarter a year ago. This was due to improved operational efficiency, increasedoverseas sales, enhanced customer & product mix and gain on foreign exchange.
Revenue however dipped 3.7% to RM54.5m from RM56.6m same quarter a year ago. Basic EPS increased to 8.04 sen from 2.99 sen.
INTERIM DIVIDEND DECLARED
A tax-exempt interim dividend of 6.5 sen per share was declared. The totaltax-exempt dividend to date is 15.5 sen per share for a total of RM11.6m, which is a payout of more than 51%.
FULL FYE DEC 2009 NET PROFIT SURGES 178%
Net Profit for FYE Dec 2009 surged 178% to RM22.7m from RM8.16m a year earlier, while Revenue increased 2.1% to RM221.7m from RM217.1m.
EPS almost tripled, increasing to 30.05 sen from 10.75 sen.
OUTLOOK
MD, THOMAS LIM said the Company has seen initial success in growing its premium customer base,both locally and regionally.
He said " .... We will undertake a two-pronged strategy going forward, whereby we will not only target new market segments for our flexible packaging in order to diversify our revenue base, but will also continue our research and development activities to create a pipeline of product innovations ...."
The Company will also tap into new market segments such as the healthcare sector.
" .... We believe this strategy will effectively broaden our revenue base, and will go a long way in adding sustenance to our business model ...." said MD, THOMAS LIM.
DAIBOCHI PLASTIC AND PACKAGING INDUSTRY's Net Profit increased by 166.7% to RM6m for 4QE Dec 2009 from RM2.2m same quarter a year ago. This was due to improved operational efficiency, increasedoverseas sales, enhanced customer & product mix and gain on foreign exchange.
Revenue however dipped 3.7% to RM54.5m from RM56.6m same quarter a year ago. Basic EPS increased to 8.04 sen from 2.99 sen.
INTERIM DIVIDEND DECLARED
A tax-exempt interim dividend of 6.5 sen per share was declared. The totaltax-exempt dividend to date is 15.5 sen per share for a total of RM11.6m, which is a payout of more than 51%.
FULL FYE DEC 2009 NET PROFIT SURGES 178%
Net Profit for FYE Dec 2009 surged 178% to RM22.7m from RM8.16m a year earlier, while Revenue increased 2.1% to RM221.7m from RM217.1m.
EPS almost tripled, increasing to 30.05 sen from 10.75 sen.
OUTLOOK
MD, THOMAS LIM said the Company has seen initial success in growing its premium customer base,both locally and regionally.
He said " .... We will undertake a two-pronged strategy going forward, whereby we will not only target new market segments for our flexible packaging in order to diversify our revenue base, but will also continue our research and development activities to create a pipeline of product innovations ...."
The Company will also tap into new market segments such as the healthcare sector.
" .... We believe this strategy will effectively broaden our revenue base, and will go a long way in adding sustenance to our business model ...." said MD, THOMAS LIM.
Kossan ... Feb10
S & P Kossan Rubber Industries
Recent Developments
• Kossan is benefiting from strong glove demand with confirmed glove orders up to mid-2010. The group is embarking on an expansion plan, starting with 1.7 bln glove pieces in mid-2010. A second expansion targets to bring in a further 1.7 bln glove pieces in capacity by 3Q10. At end-2010, we believe Kossan’s production capacity will rise to 14.5 bln pieces from 11 bln currently. The expansion plans require
additional capex of MYR50 mln, which will be funded internally.
• The new capacity will cater for the production of nitrile gloves (for larger customers), which carry higher margins for Kossan. As such, 2010-2011 product mix will see nitrile glove contribution rise to 40% from 25%. The new lines will not only generate higher margins but due to its focus on larger clients, will reduce downtime, thereby pushing up production yield and reducing wastage.
• The group is also seeing strong order pick-up from its technical rubber production (TRP) division, as customers start replacing or stocking up on parts. The division is currently working on two shifts, a vast improvement from less than one shift nine months ago.
• The present high latex cost does not concern Kossan, as it is able to easily pass on rising costs to customers. Furthermore, it expects latex prices to decline after the wintering period and we project latex price at MYR5.00/kg for 2010 overall, from the current spot price of MYR6.90/kg. We look for Kossan to post strong 2010 earnings growth, helped by robust sales volume and expanding margins from increasing
contribution from nitrile gloves.
Recommendation & Investment Risks
• We maintain our Strong Buy recommendation with a higher 12-month target price of MYR7.50 (from MYR6.00).
• We raise our target PER to 11x (from 8.5x) against our projected 2010 EPS for Kossan and add our estimated 12-month net DPS of 7.9 sen. The target multiple is in line with peer average and its historical PER trading average. The higher target multiple reflects higher peer valuations and positive demand-supply industry dynamics.
• We remain positive on Kossan’s business going into 2010. We expect: (i) the group’s core profitability and margin to expand, led by its new high-grade nitrile gloves, (ii) higher demand for gloves in reaction to the spread of the A(H1N1) flu pandemic and (iii) a stable cost structure. We believe these positive factors would support the outperformance of Kossan’s share price over the mid to long term.
• Risks to our recommendation and target price include potential delays in the commissioning of new production lines and a stronger-thanexpected appreciation of MYR as over 90% of its revenue (gloves and TRP) are derived from exports, while about 70% of its costs are in USD.
Recent Developments
• Kossan is benefiting from strong glove demand with confirmed glove orders up to mid-2010. The group is embarking on an expansion plan, starting with 1.7 bln glove pieces in mid-2010. A second expansion targets to bring in a further 1.7 bln glove pieces in capacity by 3Q10. At end-2010, we believe Kossan’s production capacity will rise to 14.5 bln pieces from 11 bln currently. The expansion plans require
additional capex of MYR50 mln, which will be funded internally.
• The new capacity will cater for the production of nitrile gloves (for larger customers), which carry higher margins for Kossan. As such, 2010-2011 product mix will see nitrile glove contribution rise to 40% from 25%. The new lines will not only generate higher margins but due to its focus on larger clients, will reduce downtime, thereby pushing up production yield and reducing wastage.
• The group is also seeing strong order pick-up from its technical rubber production (TRP) division, as customers start replacing or stocking up on parts. The division is currently working on two shifts, a vast improvement from less than one shift nine months ago.
• The present high latex cost does not concern Kossan, as it is able to easily pass on rising costs to customers. Furthermore, it expects latex prices to decline after the wintering period and we project latex price at MYR5.00/kg for 2010 overall, from the current spot price of MYR6.90/kg. We look for Kossan to post strong 2010 earnings growth, helped by robust sales volume and expanding margins from increasing
contribution from nitrile gloves.
Recommendation & Investment Risks
• We maintain our Strong Buy recommendation with a higher 12-month target price of MYR7.50 (from MYR6.00).
• We raise our target PER to 11x (from 8.5x) against our projected 2010 EPS for Kossan and add our estimated 12-month net DPS of 7.9 sen. The target multiple is in line with peer average and its historical PER trading average. The higher target multiple reflects higher peer valuations and positive demand-supply industry dynamics.
• We remain positive on Kossan’s business going into 2010. We expect: (i) the group’s core profitability and margin to expand, led by its new high-grade nitrile gloves, (ii) higher demand for gloves in reaction to the spread of the A(H1N1) flu pandemic and (iii) a stable cost structure. We believe these positive factors would support the outperformance of Kossan’s share price over the mid to long term.
• Risks to our recommendation and target price include potential delays in the commissioning of new production lines and a stronger-thanexpected appreciation of MYR as over 90% of its revenue (gloves and TRP) are derived from exports, while about 70% of its costs are in USD.
Wednesday, February 17, 2010
Leader ... Feb10
S & P on Leader Universal Holdings
Recent Developments
• Leader recently announced that it has entered into a 25-year power transmission agreement with Electricite Du Cambodge (EDC), the state-owned electricity utility in Cambodia, to develop a 230 kV power transmission system from Phnom Penh to Kampong Cham on a Build-Operate-Transfer basis. The project is part of a master plan to develop the power generation and transmission infrastructure in Cambodia that is expected to see installed capacity quadrupling in the next five years. In addition, load demand will more than triple between 2010 and 2024, an 8.5% average annual growth rate.
• The project is expected to cost USD107 mln with the completion and commissioning scheduled by Dec. 31, 2013. Following this, Leader will make available to EDC the transmission of electric power for the duration of the agreement, in return for a power transmission charge. Leader is expected to finance the project on a 70:30 debt to equity basis that will require it to fund approximately MYR36 mln p.a. over the
next three years. With Leader’s net gearing at just 15.8% at end-3Q09, it will be able to comfortably fund the equity portion of the project.
• Leader is also concurrently developing a 100MW coal-fired power plant in Cambodia in which it has an 80% stake. The power purchase agreement was signed in September 2009 with construction targeted to begin in 1Q10 with commercial operations scheduled in 2013.
Recommendation & Investment Risks
• We reiterate our Buy recommendation but lift our 12-month target price to MYR1.00 (from MYR0.92). We continue to use a sum-of-parts valuation methodology. The target price is calculated by: (i) ascribing a 2010 PER of 9.5x (from 8.5x) to the cable and wire division’s projected earnings, (ii) estimating the present value of earnings from its existing 60%-owned power plant and (iii) adding the 2009 net dividend of 2.2 sen. The key DCF assumptions used are WACC of 9% and terminal
value of 3% (all unchanged).
• No separate valuation has been attributed to its Cambodian power projects under development. The higher target multiple for its cable and wire business is to reflect the likelihood of additional cable supplies to Cambodia. Leader now trades at an undemanding 2010 PER of 6.7x, given the improved earnings visibility ahead. We also expect Leader’s share price to gradually build in valuations for its Cambodian projects as 2013 approaches.
• Risks to our recommendation and target price include a sharper-thanexpected slowdown in orders for cables and a higher interest rate environment.
Recent Developments
• Leader recently announced that it has entered into a 25-year power transmission agreement with Electricite Du Cambodge (EDC), the state-owned electricity utility in Cambodia, to develop a 230 kV power transmission system from Phnom Penh to Kampong Cham on a Build-Operate-Transfer basis. The project is part of a master plan to develop the power generation and transmission infrastructure in Cambodia that is expected to see installed capacity quadrupling in the next five years. In addition, load demand will more than triple between 2010 and 2024, an 8.5% average annual growth rate.
• The project is expected to cost USD107 mln with the completion and commissioning scheduled by Dec. 31, 2013. Following this, Leader will make available to EDC the transmission of electric power for the duration of the agreement, in return for a power transmission charge. Leader is expected to finance the project on a 70:30 debt to equity basis that will require it to fund approximately MYR36 mln p.a. over the
next three years. With Leader’s net gearing at just 15.8% at end-3Q09, it will be able to comfortably fund the equity portion of the project.
• Leader is also concurrently developing a 100MW coal-fired power plant in Cambodia in which it has an 80% stake. The power purchase agreement was signed in September 2009 with construction targeted to begin in 1Q10 with commercial operations scheduled in 2013.
Recommendation & Investment Risks
• We reiterate our Buy recommendation but lift our 12-month target price to MYR1.00 (from MYR0.92). We continue to use a sum-of-parts valuation methodology. The target price is calculated by: (i) ascribing a 2010 PER of 9.5x (from 8.5x) to the cable and wire division’s projected earnings, (ii) estimating the present value of earnings from its existing 60%-owned power plant and (iii) adding the 2009 net dividend of 2.2 sen. The key DCF assumptions used are WACC of 9% and terminal
value of 3% (all unchanged).
• No separate valuation has been attributed to its Cambodian power projects under development. The higher target multiple for its cable and wire business is to reflect the likelihood of additional cable supplies to Cambodia. Leader now trades at an undemanding 2010 PER of 6.7x, given the improved earnings visibility ahead. We also expect Leader’s share price to gradually build in valuations for its Cambodian projects as 2013 approaches.
• Risks to our recommendation and target price include a sharper-thanexpected slowdown in orders for cables and a higher interest rate environment.
MBMR ... Feb10
S & P Results Review & Earnings Outlook
• MBMR reported 2009 results that were ahead of expectations. Net profit for 4Q09 of MYR22.5 mln (+36.6% YoY and flat QoQ) brought 2009 net profit to MYR68.3 mln (-41.7% YoY), which exceeded our estimate by 8.4%.
• MBMR's better-than-expected earnings were attributed to stronger associate contributions, lower effective tax rates and higher operating margins after the JPY exchange rate moderated during the final quarter. Operating margin improved to 3.2% for 2009 from just 2.9% in 1H09, helped by the recovery in the domestic auto industry. 4Q09 total industry volume (TIV) gained 17.6% YoY but eased 5.4% QoQ.
Overall, TIV for 2009 registered a 2% decline. Sales of Daihatsu commercial vehicles fell 22.9% in 2009, although its Perodua retail sales operation registered a 2.8% gain in unit sales. MBMR’s motor vehicle division recorded a 30.8% decline in 2009 operating profit from a decline in unit sales and tighter profit margins.
• 2009 associate contributions of MYR54.1 mln (mainly from Perodua) were ahead of our estimates but still showed a 31.8% YoY contraction, due to higher average JPY exchange rates.
• Prospects in 2010 remain firm on the back of improving consumer sentiment. Earnings should also be helped by higher associate contributions from Perodua, given the strong reception to their newly launched Alza MPV. We lift our 2010 earnings estimate by 8.4% and introduce our 2011 forecasts. MBMR declared a second tax-exempt
interim DPS of 3 sen, taking the total DPS for 2009 to 6 sen.
Recommendation & Investment Risks
• We reiterate our Buy call and lift our 12-month target price to MYR3.10 (from MYR2.80).
• We continue to ascribe a target PER multiple of 8x to 2010 earnings and include a forecast net DPS to arrive at our target price. The target PER is benchmarked to peer PER multiples and is in line with the stock’s five-year trading average. Prospective PER of 6.7x is undemanding when compared against forecast 2010 earnings growth of 34.8% on offer.
• We expect to see a gradual improvement in demand for passenger and commercial vehicles going into 2010 as the domestic economy continues its recovery. Businesses are likely to consider expanding or replacing their commercial vehicle fleet as the economy improves – this bodes well for MBMR’s Daihatsu and Hino vehicle range.
• Risks to our recommendation and target price include an unexpected downturn in consumer and business spending, which could result in lower-than-expected vehicle sales. A sustained appreciation of the JPY and USD against the MYR would also be negative for margins. The thinly traded volumes also make the share price vulnerable to volatility, in our opinion.
• MBMR reported 2009 results that were ahead of expectations. Net profit for 4Q09 of MYR22.5 mln (+36.6% YoY and flat QoQ) brought 2009 net profit to MYR68.3 mln (-41.7% YoY), which exceeded our estimate by 8.4%.
• MBMR's better-than-expected earnings were attributed to stronger associate contributions, lower effective tax rates and higher operating margins after the JPY exchange rate moderated during the final quarter. Operating margin improved to 3.2% for 2009 from just 2.9% in 1H09, helped by the recovery in the domestic auto industry. 4Q09 total industry volume (TIV) gained 17.6% YoY but eased 5.4% QoQ.
Overall, TIV for 2009 registered a 2% decline. Sales of Daihatsu commercial vehicles fell 22.9% in 2009, although its Perodua retail sales operation registered a 2.8% gain in unit sales. MBMR’s motor vehicle division recorded a 30.8% decline in 2009 operating profit from a decline in unit sales and tighter profit margins.
• 2009 associate contributions of MYR54.1 mln (mainly from Perodua) were ahead of our estimates but still showed a 31.8% YoY contraction, due to higher average JPY exchange rates.
• Prospects in 2010 remain firm on the back of improving consumer sentiment. Earnings should also be helped by higher associate contributions from Perodua, given the strong reception to their newly launched Alza MPV. We lift our 2010 earnings estimate by 8.4% and introduce our 2011 forecasts. MBMR declared a second tax-exempt
interim DPS of 3 sen, taking the total DPS for 2009 to 6 sen.
Recommendation & Investment Risks
• We reiterate our Buy call and lift our 12-month target price to MYR3.10 (from MYR2.80).
• We continue to ascribe a target PER multiple of 8x to 2010 earnings and include a forecast net DPS to arrive at our target price. The target PER is benchmarked to peer PER multiples and is in line with the stock’s five-year trading average. Prospective PER of 6.7x is undemanding when compared against forecast 2010 earnings growth of 34.8% on offer.
• We expect to see a gradual improvement in demand for passenger and commercial vehicles going into 2010 as the domestic economy continues its recovery. Businesses are likely to consider expanding or replacing their commercial vehicle fleet as the economy improves – this bodes well for MBMR’s Daihatsu and Hino vehicle range.
• Risks to our recommendation and target price include an unexpected downturn in consumer and business spending, which could result in lower-than-expected vehicle sales. A sustained appreciation of the JPY and USD against the MYR would also be negative for margins. The thinly traded volumes also make the share price vulnerable to volatility, in our opinion.
Tuesday, February 16, 2010
2010 CLSA Feng Shui Index report
Does this report translate to:-
04 Feb 2010 Buy
16 Mar 2010 Sell
12 Jun 2010 Buy
09 Aug 2010 Sell
08 Sep 2010 Buy
Extract from CLSA.com
16th CLSA Feng Shui Index - Expect the Year of the Golden Tiger to roar
Hong Kong - Wednesday, 3 February, 2010 - CLSA Asia-Pacific Markets (“CLSA”), Asia’s leading independent brokerage and investment group, launches the 16th CLSA Feng Shui Index (‘CLSA FSI’) report with a tongue-in-cheek look at what 2010 holds for equities, commodities, property, celebrities, and the zodiac signs in the months ahead.
The previous year of the Golden Tiger was 1950, a year that saw the Dow Jones Index gain significantly and end the year on a high. However, Tiger-years are typically marked by dramatic changes and even upheaval and 2010, much like the tiger itself, sees an energetic and powerful, but impulsive and risky, year ahead.
Those trading equities should get set to ride the wild tiger. The markets will be volatile with a surge in the first month followed by a decline that turns upwards in June, dips, and then swings up again in September to see the Golden Tiger roar by January 2011.
With this Tiger year’s heavenly stem being metal, gold is set to have a great run and we predict that it could break US$2,000/oz. In fact, commodities of all stripes will fair well including silver, copper, zinc and aluminum. Those regarded as ‘wood’ will also do very well: pulp and paper, clothing and pharmaceuticals. ‘Fire’ and ‘earth’ elements, thus technology, power, telecoms and property will have a good year but ‘water’ related sectors will be challenged, translating to a bumpy time for shipping, airlines, logistics, autos and transport.
For the first time, the CLSA FSI features a Hong Kong property snapshot, highlighting the best and worst areas across the Special Administrative Region. We see a year of consolidation; prices will continue to climb early in the year, with some weakness toward year-end.
Looking ahead month-by-month, February will bring fantastic opportunities for those sharp enough to recognise them and fast enough to grab them.
March signals the start of three bumpy months, but there’ll be no shortage of good trades for those brave enough.
In April, the influence of the stars of misfortune is especially disruptive, while the first few weeks of May will be feisty.
June heralds a great month but maybe not the best for betting, although the 21 June summer solstice is especially auspicious and gold may surge.
July is a more relaxed with time to enact long-cherished plans and projects.
August sees the return of volatility and precious metals look set to break upwards, especially gold, silver and copper.
In September, the trend is upwards and a mixture of considered and idle speculations offers the possibility of eye-popping returns.
October is possibly one of the best months of the year, with life returning to the markets. It marks the return of a sustained drive upwards that continues into November, December and January. Each of the last three months features an auspicious date; 17 November, 8 December, 16 January.
In terms of the Zodiac, a great year lies ahead for those born in the years of the Dragon, Sheep and particularly, the Horse. A relatively good year is in store for Rats, Cows, Rabbits, Roosters, Dogs and Pigs, while it will be a bumpy ride for Tigers, Snakes and Monkeys.
The Golden Tiger year will favour China’s wealthiest woman, Nine Paper’s Zhang Yin, a Rooster in the Chinese zodiac. She will take on some of the toughest competition of her career and come out on top. For China’s wealthiest man, BYD CEO Wang Chuanfu, a Horse, the sun will continue to shine as it has since Warren Buffet invested into his company and set the price soaring. And for Buffet, also a horse, the future looks just as bright. He is about to enter the most financially lucky period of his life. Expect some significant and unusual developments in Berkshire Hathaway’s already substantial interest in China.
And so as the Chinese saying goes: “Once on a tiger’s back, it is hard to get off”. But if you can hang on, it is certainly the safest place to be. Enjoy the ride and Happy New Year.
Sunday, February 14, 2010
2010虎年十二生肖的财运预测
生肖鼠 2010年的财运预测
在2010年生肖鼠的财运可能会不太好，可能会有收入很多，但支出的也多，或收入很少，支出却多的现象发生，常会无缘无故花费，建议大家不要做太大的投资，应该多注意理财。
幸运色：黄色
生肖牛 2010年的财运预测
生肖牛在2010年的财运会有好转，多因为朋友贵人帮助，比较顺利，有如顺水行舟，适宜跟他人做生意，以求财，因为事业发展不错，而推动了财运也会非常好，也会有意外之财，但大家要注意，要防止小人是非，而使自己破财，尽量不要得罪别人，以免到时手足无措。
幸运色：是蓝色和绿色
生肖虎 2010年的财运预测
生肖虎在2010年中可能要非常辛苦的求财，要明白付出才有回报，防止不必要的支出，如必须进行投资，一定要谨慎，小心破财，生肖虎在这年应该事事多留心。
幸运色：红色和绿色
生肖兔 2010年的财运预测
在2010年中生肖兔的财运一般，可能因为工作事业的发展，会有一定的收入，要注意，不要借钱给别人，否则可能难以收回，到时可能会给自己引起不必要的烦恼，须防小人，或因人或事而失财，更要小心桃色事件，不宜进行投资。
幸运色：绿色
生肖龙 2010年的财运预测
生肖龙在2010年中财运可能不是很好，虽有贵人相助，可获名利，但有破财的迹象，花耗会很大，宜静宜守，动则破财损利。不宜与人合资或随便听信别人的意见，不要进行有风险的投资。
幸运色：黄色
生肖蛇 2010年的财运预测
生肖蛇在2010年中财运不是很理想，并不使说没有财，而是有财不聚财，容易财来财去，不要做有风险的计划，一切要等待，如有新发展机会也可尝试，这年生肖蛇比较辛苦得财，无论好与坏都应该乐观面对。
幸运色：紫色、天蓝色
生肖马 2010年的财运预测
生肖马在2010年中财运还可以，但要注意理财，最好不要改变现有的状态，否则可能会给自己带来经济上的压力，也要放在小心小人作怪，使自己的财运受到损失，而影响心情和健康。人生无常，只要勇敢的去面对，就一定可以战胜一切。
幸运色：天蓝色、银灰色
生肖羊 2010年的财运预测
在2010年中生肖羊的财运可能会很不错，财源广进，凡谋必利，事事如意，但不适合与他人合作，要慎防小人的捣乱使自己破财，因生肖羊这年的事业运很好，所以财运也会很不错，只要小心行事，相信经过一番努力后，会使自己有一个精彩人生旅程。
幸运色：蓝绿色
生肖猴 2010年的财运预测
生肖猴在2010年的财运稍差，最好不要借钱给别人，也不要投资，偏财运差，有时可能因为判断错误，而使自己失财，但生肖猴做事还是干劲十足，可能还是有机会的，不要放弃，只要把握住，坚持住，就有希望。
幸运色：灰色和紫色
生肖鸡 2010年的财运预测
生肖鸡在2010年中财运可能会比较不错，大家一定要多留意身边的每个人，可能这些人都是你的贵人，会给你带来很好的财运，但要小心因口舌是非会破财，可以适当的进行投资，不宜与他人合作，生肖鸡这年是忙忙碌碌赚钱，开开心心生活。
幸运色：蓝色、白色
生肖狗 2010年的财运预测
生肖狗在2010年中财运可能会容易反复，财会进的多，支出的也多，要理好财，不过幸好，这年生肖狗会因得贵人扶持而转换局面，化险为夷，因而多了一笔财富，可以在这年适当的做些投资，可能会对日后有帮助。
幸运色：白色和黑色
生肖猪 2010年的财运预测
生肖猪在2010年的财运会非常不错，因为付出的多，所以得到的也多，但要注意理财，平时应该低调一些，不要太过展示自己，不可花钱大手大脚，这也是破财，尤其下半年要格外注意，多听取贵人的意见，会对自己有很大的帮助，投资方面可适当进行，但要适可而止。把握好每一天，成功就会更近一步。
幸运色：咖啡色
在2010年生肖鼠的财运可能会不太好，可能会有收入很多，但支出的也多，或收入很少，支出却多的现象发生，常会无缘无故花费，建议大家不要做太大的投资，应该多注意理财。
幸运色：黄色
生肖牛 2010年的财运预测
生肖牛在2010年的财运会有好转，多因为朋友贵人帮助，比较顺利，有如顺水行舟，适宜跟他人做生意，以求财，因为事业发展不错，而推动了财运也会非常好，也会有意外之财，但大家要注意，要防止小人是非，而使自己破财，尽量不要得罪别人，以免到时手足无措。
幸运色：是蓝色和绿色
生肖虎 2010年的财运预测
生肖虎在2010年中可能要非常辛苦的求财，要明白付出才有回报，防止不必要的支出，如必须进行投资，一定要谨慎，小心破财，生肖虎在这年应该事事多留心。
幸运色：红色和绿色
生肖兔 2010年的财运预测
在2010年中生肖兔的财运一般，可能因为工作事业的发展，会有一定的收入，要注意，不要借钱给别人，否则可能难以收回，到时可能会给自己引起不必要的烦恼，须防小人，或因人或事而失财，更要小心桃色事件，不宜进行投资。
幸运色：绿色
生肖龙 2010年的财运预测
生肖龙在2010年中财运可能不是很好，虽有贵人相助，可获名利，但有破财的迹象，花耗会很大，宜静宜守，动则破财损利。不宜与人合资或随便听信别人的意见，不要进行有风险的投资。
幸运色：黄色
生肖蛇 2010年的财运预测
生肖蛇在2010年中财运不是很理想，并不使说没有财，而是有财不聚财，容易财来财去，不要做有风险的计划，一切要等待，如有新发展机会也可尝试，这年生肖蛇比较辛苦得财，无论好与坏都应该乐观面对。
幸运色：紫色、天蓝色
生肖马 2010年的财运预测
生肖马在2010年中财运还可以，但要注意理财，最好不要改变现有的状态，否则可能会给自己带来经济上的压力，也要放在小心小人作怪，使自己的财运受到损失，而影响心情和健康。人生无常，只要勇敢的去面对，就一定可以战胜一切。
幸运色：天蓝色、银灰色
生肖羊 2010年的财运预测
在2010年中生肖羊的财运可能会很不错，财源广进，凡谋必利，事事如意，但不适合与他人合作，要慎防小人的捣乱使自己破财，因生肖羊这年的事业运很好，所以财运也会很不错，只要小心行事，相信经过一番努力后，会使自己有一个精彩人生旅程。
幸运色：蓝绿色
生肖猴 2010年的财运预测
生肖猴在2010年的财运稍差，最好不要借钱给别人，也不要投资，偏财运差，有时可能因为判断错误，而使自己失财，但生肖猴做事还是干劲十足，可能还是有机会的，不要放弃，只要把握住，坚持住，就有希望。
幸运色：灰色和紫色
生肖鸡 2010年的财运预测
生肖鸡在2010年中财运可能会比较不错，大家一定要多留意身边的每个人，可能这些人都是你的贵人，会给你带来很好的财运，但要小心因口舌是非会破财，可以适当的进行投资，不宜与他人合作，生肖鸡这年是忙忙碌碌赚钱，开开心心生活。
幸运色：蓝色、白色
生肖狗 2010年的财运预测
生肖狗在2010年中财运可能会容易反复，财会进的多，支出的也多，要理好财，不过幸好，这年生肖狗会因得贵人扶持而转换局面，化险为夷，因而多了一笔财富，可以在这年适当的做些投资，可能会对日后有帮助。
幸运色：白色和黑色
生肖猪 2010年的财运预测
生肖猪在2010年的财运会非常不错，因为付出的多，所以得到的也多，但要注意理财，平时应该低调一些，不要太过展示自己，不可花钱大手大脚，这也是破财，尤其下半年要格外注意，多听取贵人的意见，会对自己有很大的帮助，投资方面可适当进行，但要适可而止。把握好每一天，成功就会更近一步。
幸运色：咖啡色
Saturday, February 13, 2010
烤焦的土司
小明在12歲時，他的下體還是跟以前小時候一樣大小，
他媽媽粉擔心，於是便去找醫生。
醫生跟他說吃烤焦的吐司，可以增加長度！
於是隔天早上，小明看到桌上有一大條烤焦的吐司，
小明就跟媽媽說：「媽媽！我不要吃那麼多啦！」
媽媽溫柔地答說：
你只要吃一片就好了！其它是給你爸爸吃的！
他媽媽粉擔心，於是便去找醫生。
醫生跟他說吃烤焦的吐司，可以增加長度！
於是隔天早上，小明看到桌上有一大條烤焦的吐司，
小明就跟媽媽說：「媽媽！我不要吃那麼多啦！」
媽媽溫柔地答說：
你只要吃一片就好了！其它是給你爸爸吃的！
Friday, February 12, 2010
Wish All Happy Chinese New Year
Wish all have a healthy and prosperous New Year, may the Tiger Year bring us more profitable trading.
Drive safely!
Fajar ... Feb10
Results Review & Earnings Outlook
FBB reported a net profit of MYR6.1 mln (+48.2% YoY) for 2QFY10 (Jun.). Cumulative 1HFY10 results were at the lower end of our expectations and accounted for about 45% of our original full-year net profit forecast. The variance was due to slower-than-expected construction revenue recognition and higher-than-expected effective
tax rate of 22.4% (vs. FY10E:20%). This was partially offset by stronger EBIT margin of 16.1% (vs. FY10E:12%). A second single tier interim dividend of 2 sen was declared (FY10 YTD: 6 sen).
1HFY10 group revenue declined by 18.1% YoY to MYR77.8 mln derived mainly from construction projects such as the Seremban-Gemas Electrified Double Track, Tampin hospital and LCCT expansion works. Meanwhile, the group’s EBIT margin showed
significant improvement (+8.5%-pts YoY to 16.1%). This was offset by higher effective tax rate of 22.4% (+8.5%-pts YoY). The overall net effect was a decline in 1HFY10 pre-tax and net profit by 73% and 56% respectively.
We have reduced our FY10 and FY11 net profit forecasts by 9% and 5%, respectively as we have: (i) pushed back recognition of construction revenue; (ii) increased our effective tax rate to 22% (vs. 20% previously); offset by (iii) higher construction margins. We expect, however revenue to pick up in the subsequent quarters as projects such as the MYR138.4 mln Tampin Hospital gain momentum.
Recommendation & Investment Risks
We upgrade our recommendation to Buy (from Hold) with a lower 12-month target price of MYR1.30 (previously MYR1.40) following the recent share price weakness. With the recent decline in share price, the stock is presently trading on projected PERs of 8.2x and 6.7x for FY10 and FY11, respectively, which in our view is undemanding. In addition, we believe FBB’s decent dividend yield of 5.6% in FY10
should provide support to its share price.
We continue to value FBB based on blended PER target of 9x (unchanged) and P/B target of 1.6x (unchanged) based on our FY10 estimates. We expect FBB’s bid for parts of the new LCCT project including the terminal building (third package) and on-going tenders for about MYR300 mln worth of local jobs to provide potential earnings upside. FBB is a strong contender for the new LCCT given the group’s
involvement in the upgrade and extension works for the existing LCCT.
The group is in a comfortable position as its outstanding orderbook which stands at MYR370 mln will last until 2012. The group has a healthy balance sheet (net cash of MYR134.7 mln at end-Dec 2009 or 83 sen per share) which will place it in a good position to secure larger projects and diversify into property development.
Risks to our recommendation and target price include fewer-thanexpected new contracts secured, higher-than-expected material costs and slower-than-expected profit margins for construction projects.
FBB reported a net profit of MYR6.1 mln (+48.2% YoY) for 2QFY10 (Jun.). Cumulative 1HFY10 results were at the lower end of our expectations and accounted for about 45% of our original full-year net profit forecast. The variance was due to slower-than-expected construction revenue recognition and higher-than-expected effective
tax rate of 22.4% (vs. FY10E:20%). This was partially offset by stronger EBIT margin of 16.1% (vs. FY10E:12%). A second single tier interim dividend of 2 sen was declared (FY10 YTD: 6 sen).
1HFY10 group revenue declined by 18.1% YoY to MYR77.8 mln derived mainly from construction projects such as the Seremban-Gemas Electrified Double Track, Tampin hospital and LCCT expansion works. Meanwhile, the group’s EBIT margin showed
significant improvement (+8.5%-pts YoY to 16.1%). This was offset by higher effective tax rate of 22.4% (+8.5%-pts YoY). The overall net effect was a decline in 1HFY10 pre-tax and net profit by 73% and 56% respectively.
We have reduced our FY10 and FY11 net profit forecasts by 9% and 5%, respectively as we have: (i) pushed back recognition of construction revenue; (ii) increased our effective tax rate to 22% (vs. 20% previously); offset by (iii) higher construction margins. We expect, however revenue to pick up in the subsequent quarters as projects such as the MYR138.4 mln Tampin Hospital gain momentum.
Recommendation & Investment Risks
We upgrade our recommendation to Buy (from Hold) with a lower 12-month target price of MYR1.30 (previously MYR1.40) following the recent share price weakness. With the recent decline in share price, the stock is presently trading on projected PERs of 8.2x and 6.7x for FY10 and FY11, respectively, which in our view is undemanding. In addition, we believe FBB’s decent dividend yield of 5.6% in FY10
should provide support to its share price.
We continue to value FBB based on blended PER target of 9x (unchanged) and P/B target of 1.6x (unchanged) based on our FY10 estimates. We expect FBB’s bid for parts of the new LCCT project including the terminal building (third package) and on-going tenders for about MYR300 mln worth of local jobs to provide potential earnings upside. FBB is a strong contender for the new LCCT given the group’s
involvement in the upgrade and extension works for the existing LCCT.
The group is in a comfortable position as its outstanding orderbook which stands at MYR370 mln will last until 2012. The group has a healthy balance sheet (net cash of MYR134.7 mln at end-Dec 2009 or 83 sen per share) which will place it in a good position to secure larger projects and diversify into property development.
Risks to our recommendation and target price include fewer-thanexpected new contracts secured, higher-than-expected material costs and slower-than-expected profit margins for construction projects.
LONBISC ... Feb10
It has proposed to acquire a 32% stake in poultry-based TPC for about RM7.68 million as it seek to ensure regular supply for its expanding cake confectionery business.
It was acquiring the stake, comprising of 25.6 million shares, from TPC executive chairman Yee Tiam Teck and managing director Jimmy E. Pian.
The price tag works to be 30 sen per share. LonBisc said the acquisition would be financed from its own funds.
Yee holds directly 14.35 million shares or 17.94% and indirectly, 15.87 million shares (19.84%) in TPC while Pian owns a direct stake of 13 million shares (16.25%) and indirectly, 14.4 million shares (18%) in TPC.
With a new expansion plan in its cakes products in 2010, LonBisc will require additional supplies of eggs a day. Therefore, TPC’s current capacity and its present customer base will dovetail with LonBisc’s present and future requirements. This proposed investment would result in annual substantial saving and it expected to recoup the investment within a reasonable number of years.
This investment would enable LonBisc to ensure an adequate, regular and continuous supply of eggs at “controlled price” to meet its ongoing expansion plans.
It would work with TPC to cross distribute its own range of products, which would be available in more outlets and reduce its distribution expenses.
It was acquiring the stake, comprising of 25.6 million shares, from TPC executive chairman Yee Tiam Teck and managing director Jimmy E. Pian.
The price tag works to be 30 sen per share. LonBisc said the acquisition would be financed from its own funds.
Yee holds directly 14.35 million shares or 17.94% and indirectly, 15.87 million shares (19.84%) in TPC while Pian owns a direct stake of 13 million shares (16.25%) and indirectly, 14.4 million shares (18%) in TPC.
With a new expansion plan in its cakes products in 2010, LonBisc will require additional supplies of eggs a day. Therefore, TPC’s current capacity and its present customer base will dovetail with LonBisc’s present and future requirements. This proposed investment would result in annual substantial saving and it expected to recoup the investment within a reasonable number of years.
This investment would enable LonBisc to ensure an adequate, regular and continuous supply of eggs at “controlled price” to meet its ongoing expansion plans.
It would work with TPC to cross distribute its own range of products, which would be available in more outlets and reduce its distribution expenses.
Thursday, February 11, 2010
SIGN ... Feb10
Condo launches resume
Order-book of RM80m to sustain near term earnings
Bidding for RM130m projects
Low 6x P/Es, with decent yield – but flattish earnings
Recent Developments – resumption of condo launches
The recent resumption of condominium launches augers well for Signature International (RM1.50), the country’s leading player for branded kitchens and
wardrobes.
In particular, it will benefit the company’s project sales, which account for around two-thirds of total revenue. Signature is the market leader in project sales given its size, economies of scale, execution and excellent track record.
Project sales are undertaken for fitting out entire projects with property developers, where fully-fitted kitchens are usually provided by the developer.
This is typically the case for condominiums, especially high-end ones, where fully fitted kitchens are part of the standard fixture and fittings. Wardrobes are also increasingly being included in many high-end condominiums.
In contrast, kitchen fit-outs are usually not provided by developers of landed houses, except for very high-end homes. Signature’s retail sales, which account for the remaining one-third of revenue, thus cater more towards landed homes.
It will benefit from the even stronger sales of landed property homes in recent months. However, there is much stronger competition in the retail segment due to the far larger number of smaller competitors.
Property launches resuming
Sentiment for properties has improved markedly since mid-2009, boosted by the global economic recovery, record low interest rates, the long running stock market boom, innovative financing schemes and strong mortgage approvals from banks.
There was a slight dampener from the government’s decision to re-impose the 5% real property gains tax (RPGT) starting this year, but this has subsequently been relaxed to apply only for properties sold within five years.
The RPGT impact, fortunately, has not been as severe as feared. SP Setia, for instance, chalked up RM300 million in sales for Nov 2009, after the announcement of the tax. Sunrise has also chalked up near 50% sales of its 28 Mont’Kiara despite being soft-launched in Dec 2009.
Much of the improved sentiment for properties has come from the landed segment. SP Setia has been the clear leader here, chalking up sales of RM1.65 billion for its October 2009 financial year, mostly from its Setia Alam and Setia Eco Park townships in the Klang Valley.
The high-end condominium sector had earlier lagged the landed segment. But it is starting to see a recovery with a number of new launches over the last few months – and several more in the pipeline.
Some of the recently launched condominium projects include E&O’s St Mary’s Residences, DNP’s Verticas Residensi and SP Setia’s Setia Sky Residences (Phase 2), all in Kuala Lumpur; 28 Mont’Kiara by Sunrise in Mont’Kiara; Dijaya’s Tropicana Grande in Tropicana Golf & Country Resort and SDP Properties’ Five Stones in SS2, both in Petaling Jaya.
The best received of these new launches is Sunrise’s 28 Mont’Kiara. Since its soft launch just in Dec 2009 – and without the benefit of even a show unit yet, some 200 units of the 460-unit luxury condominiums have been effectively sold. The well-designed units are sized from 2,500-3,000 sq ft and are priced at around RM785 psf, with an attractive 5-year zero payment plan.
Positive for Signature’s order-book
As kitchens and wardrobes are the final fittings in a property, Signature will continue to see good demand over the next year from earlier projects that
are under construction.
The recent resumption of condominium launches will create a new pool of demand for Signature’s products 2-3 years later – and fill the void when the current order-book ends.
For instance, we also note that Signature has traditionally been supplying kitchen fittings for Sunrise’s projects, including 10 Mont’Kiara and 11 Mont’Kiara, among others. It is also supplying to most of the major high-end projects in downtown Kuala Lumpur, including The Troika, Suria Stonor and Pavilion Residences.
Signature’s current project order-book stands at RM80 million, as at 1 Jan 2010. This was higher than the RM73 million in Sept 2009, and in line with its average sum per quarter.
The order-book sustainability shows a high replenishment and bidding success rate, since Signature recognizes about RM25 million of project revenue each quarter.
The company is presently bidding for RM130 million worth of projects. In Dec 2009, it won RM24.7 million contracts to supply to five projects, including The Pearl on Jalan Stonor and 11 Mont' Kiara.
The current order-book will sustain income for another year, and will largely assure earnings until 1H FY June 2011. However, there may be a lull in FY2012 until the newly launched condominium projects near completion. This is due to the limited number of new launches from mid-2008 to mid-2009, due to the financial crisis.
Toward this end, it is diversifying its geographical risks through overseas expansion. The overseas expansion and showrooms are largely funded through distributorship arrangements with external agents, Thus, they pose relatively low financial risks to Signature.
To its credit, Signature has not been affected by Dubai’s property bust, unlike many other Malaysian companies there. Signature’s exposure there was small, solely in the Palm Jumeira project, whose contract was valued at RM14 million. We understand the project is now completed with final touchups being undertaken, and the outstanding amount is just RM1.2 million.
Earnings Outlook & Recommendation
Signature’s valuations are reasonable, with near-term earnings supported by its order-book. We like its strong branding and scalable production business model.
After a period of very strong growth from FY2005 to FY2009, where net profit surged from RM5.5 million to RM19.9 million, we expect relatively flattish net profit of RM20.4 million in FY2010, before rising 5.6% to RM21.5 million in FY2011. This translates to EPS of 25.5 sen and 26.9 sen, respectively.
Note however, that our earnings forecast for FY2010-2011 have been revised down by 13% due to more conservative order-book replenishment assumptions. The longer term-outlook should improve as property launches resume.
At RM1.50, Signature’s shares are trading at low P/Es of 5.9 and 5.6 times FY2010-11 earnings, albeit with relatively low near-term growth, but largely assured earnings.
The stock also offers relatively high dividend yields due to a cash-rich balance sheet (net cash of RM20.9 million in Sept 2009).
Net dividends per share increased from 5 sen in FY2008 to 8 sen for FY2009, or a net yield of 5.3%. We are conservatively assuming a return to the 5 sen payout in FY2010-2011, with a still generous 3.3% net yield and about 20% payout ratio.
Order-book of RM80m to sustain near term earnings
Bidding for RM130m projects
Low 6x P/Es, with decent yield – but flattish earnings
Recent Developments – resumption of condo launches
The recent resumption of condominium launches augers well for Signature International (RM1.50), the country’s leading player for branded kitchens and
wardrobes.
In particular, it will benefit the company’s project sales, which account for around two-thirds of total revenue. Signature is the market leader in project sales given its size, economies of scale, execution and excellent track record.
Project sales are undertaken for fitting out entire projects with property developers, where fully-fitted kitchens are usually provided by the developer.
This is typically the case for condominiums, especially high-end ones, where fully fitted kitchens are part of the standard fixture and fittings. Wardrobes are also increasingly being included in many high-end condominiums.
In contrast, kitchen fit-outs are usually not provided by developers of landed houses, except for very high-end homes. Signature’s retail sales, which account for the remaining one-third of revenue, thus cater more towards landed homes.
It will benefit from the even stronger sales of landed property homes in recent months. However, there is much stronger competition in the retail segment due to the far larger number of smaller competitors.
Property launches resuming
Sentiment for properties has improved markedly since mid-2009, boosted by the global economic recovery, record low interest rates, the long running stock market boom, innovative financing schemes and strong mortgage approvals from banks.
There was a slight dampener from the government’s decision to re-impose the 5% real property gains tax (RPGT) starting this year, but this has subsequently been relaxed to apply only for properties sold within five years.
The RPGT impact, fortunately, has not been as severe as feared. SP Setia, for instance, chalked up RM300 million in sales for Nov 2009, after the announcement of the tax. Sunrise has also chalked up near 50% sales of its 28 Mont’Kiara despite being soft-launched in Dec 2009.
Much of the improved sentiment for properties has come from the landed segment. SP Setia has been the clear leader here, chalking up sales of RM1.65 billion for its October 2009 financial year, mostly from its Setia Alam and Setia Eco Park townships in the Klang Valley.
The high-end condominium sector had earlier lagged the landed segment. But it is starting to see a recovery with a number of new launches over the last few months – and several more in the pipeline.
Some of the recently launched condominium projects include E&O’s St Mary’s Residences, DNP’s Verticas Residensi and SP Setia’s Setia Sky Residences (Phase 2), all in Kuala Lumpur; 28 Mont’Kiara by Sunrise in Mont’Kiara; Dijaya’s Tropicana Grande in Tropicana Golf & Country Resort and SDP Properties’ Five Stones in SS2, both in Petaling Jaya.
The best received of these new launches is Sunrise’s 28 Mont’Kiara. Since its soft launch just in Dec 2009 – and without the benefit of even a show unit yet, some 200 units of the 460-unit luxury condominiums have been effectively sold. The well-designed units are sized from 2,500-3,000 sq ft and are priced at around RM785 psf, with an attractive 5-year zero payment plan.
Positive for Signature’s order-book
As kitchens and wardrobes are the final fittings in a property, Signature will continue to see good demand over the next year from earlier projects that
are under construction.
The recent resumption of condominium launches will create a new pool of demand for Signature’s products 2-3 years later – and fill the void when the current order-book ends.
For instance, we also note that Signature has traditionally been supplying kitchen fittings for Sunrise’s projects, including 10 Mont’Kiara and 11 Mont’Kiara, among others. It is also supplying to most of the major high-end projects in downtown Kuala Lumpur, including The Troika, Suria Stonor and Pavilion Residences.
Signature’s current project order-book stands at RM80 million, as at 1 Jan 2010. This was higher than the RM73 million in Sept 2009, and in line with its average sum per quarter.
The order-book sustainability shows a high replenishment and bidding success rate, since Signature recognizes about RM25 million of project revenue each quarter.
The company is presently bidding for RM130 million worth of projects. In Dec 2009, it won RM24.7 million contracts to supply to five projects, including The Pearl on Jalan Stonor and 11 Mont' Kiara.
The current order-book will sustain income for another year, and will largely assure earnings until 1H FY June 2011. However, there may be a lull in FY2012 until the newly launched condominium projects near completion. This is due to the limited number of new launches from mid-2008 to mid-2009, due to the financial crisis.
Toward this end, it is diversifying its geographical risks through overseas expansion. The overseas expansion and showrooms are largely funded through distributorship arrangements with external agents, Thus, they pose relatively low financial risks to Signature.
To its credit, Signature has not been affected by Dubai’s property bust, unlike many other Malaysian companies there. Signature’s exposure there was small, solely in the Palm Jumeira project, whose contract was valued at RM14 million. We understand the project is now completed with final touchups being undertaken, and the outstanding amount is just RM1.2 million.
Earnings Outlook & Recommendation
Signature’s valuations are reasonable, with near-term earnings supported by its order-book. We like its strong branding and scalable production business model.
After a period of very strong growth from FY2005 to FY2009, where net profit surged from RM5.5 million to RM19.9 million, we expect relatively flattish net profit of RM20.4 million in FY2010, before rising 5.6% to RM21.5 million in FY2011. This translates to EPS of 25.5 sen and 26.9 sen, respectively.
Note however, that our earnings forecast for FY2010-2011 have been revised down by 13% due to more conservative order-book replenishment assumptions. The longer term-outlook should improve as property launches resume.
At RM1.50, Signature’s shares are trading at low P/Es of 5.9 and 5.6 times FY2010-11 earnings, albeit with relatively low near-term growth, but largely assured earnings.
The stock also offers relatively high dividend yields due to a cash-rich balance sheet (net cash of RM20.9 million in Sept 2009).
Net dividends per share increased from 5 sen in FY2008 to 8 sen for FY2009, or a net yield of 5.3%. We are conservatively assuming a return to the 5 sen payout in FY2010-2011, with a still generous 3.3% net yield and about 20% payout ratio.
YOKO ... Feb10
Singapore-based HSG Investments Pte Ltd has launched a conditional mandatory takeover offer for all the shares it does not already own in automotive battery manufacturer Tai Kwong Yokohama Bhd, at RM1.09 cash per share.
HSG had on Jan 31 2010 acquired 9.5 million shares, representing 10.29% stake, in Tai Kwong, for RM1.09 per share or about RM4.887mil. The acquisition brought its stakeholding in Tai Kwong to 40.75% from 30.46% previously, triggering the mandatory takeover requirement threshold of 33%.
HSG, an investment holding company incorporated in October 2007, is a wholly owned subsidiary of Hup Soon Global Corp Ltd, which has interests primarily in the marketing and distribution of automotive-related products and industrial supplies.
The offer shall be conditional upon the offeror having received valid acceptances from the holders of the offer shares, which would result in the offeror holding more than 50% of the voting shares of Tai Kwong.
HSG does not intend to maintain the listing status of Tai Kwong in the event Tai Kwong does not comply with the (25%) shareholding spread requirement of Bursa as a result of the acceptances received pursuant to the offer.
For the third quarter ended Sept 30, the company reported net profit of RM6.49mil on revenue of RM52.76mil compared with net loss of RM1.52mil and revenue of RM46.78mil in the previous corresponding period.
HSG had on Jan 31 2010 acquired 9.5 million shares, representing 10.29% stake, in Tai Kwong, for RM1.09 per share or about RM4.887mil. The acquisition brought its stakeholding in Tai Kwong to 40.75% from 30.46% previously, triggering the mandatory takeover requirement threshold of 33%.
HSG, an investment holding company incorporated in October 2007, is a wholly owned subsidiary of Hup Soon Global Corp Ltd, which has interests primarily in the marketing and distribution of automotive-related products and industrial supplies.
The offer shall be conditional upon the offeror having received valid acceptances from the holders of the offer shares, which would result in the offeror holding more than 50% of the voting shares of Tai Kwong.
HSG does not intend to maintain the listing status of Tai Kwong in the event Tai Kwong does not comply with the (25%) shareholding spread requirement of Bursa as a result of the acceptances received pursuant to the offer.
For the third quarter ended Sept 30, the company reported net profit of RM6.49mil on revenue of RM52.76mil compared with net loss of RM1.52mil and revenue of RM46.78mil in the previous corresponding period.
Wednesday, February 10, 2010
Weida ... Feb10
S&P Results Review & Earnings Outlook
• Weida’s 3QFY10 (Mar) results were operationally below expectations, due largely to lower-than-expected margins from its traditional manufacturing business. Nevertheless, overall net profit for the quarter was bolstered by a lower-than-expected tax rate, as well as an exceptional gain of MYR3.2 mln from the disposal of the group’s investment in Mutiara Goodyear (MGD MK, MYR0.78, Not Ranked).
• Revenue in 3QFY10 was down 38% QoQ, as revenue in 2QFY10 was bolstered by higher parts supply contributions from the group’s Syrian water/wastewater project. We estimate revenue of about MYR25 mln from the project in 3QFY10 vs. MYR50 mln in 2QFY10.
• Group EBIT margin declined to 7.7% in 3QFY10 from 8.7% in 2QFY10. Operating margin from the works division picked up to about 12% from 7%, with improved yields on the Syrian project. Manufacturing margin, however, dropped to 3% from 14% in 2QFY10
due to a higher mix of pipes vs. water tanks (which carry better margins), as well as timing differences in terms of booking in costs incurred in the previous quarter.
• We raise our FY10 net profit forecast by 13% to factor in the exceptional gain. Our FY11 earnings forecast is largely unchanged.
Recommendation & Investment Risks
• On the back of improving prospects, undemanding valuations and decent yields, we upgrade our call on Weida to Buy from Hold, with a raised 12-month target price of MYR0.83 from MYR0.71.
• We continue to peg Weida’s valuations to that of its peers in the water sector. Our target price is raised in accordance with higher peer valuations and reflects a sector average PER of 6.8x (6.0x previously) and includes our projected DPS. Valuations are undemanding, with the stock presently trading at a prospective FY11 PER of 5.9x. Meanwhile, the prospective dividend yield of 5.9% is also decent.
• What is positive is the Government’s emphasis on rural development in East Malaysia, particularly with regard to the water sector, and we are beginning to see the Government allocations flow through in terms of awarded contracts. We expect Weida to be a prime beneficiary of pipe replacement/installation works as well as rural water infrastructure projects. Separately, we estimate a further MYR100 mln worth of unbilled works on the group’s Syrian project, which should be progressively booked in over the next financial year.
• Risks to our recommendation and target price include the fluctuation in raw material prices, which would have an impact on manufacturing margins. Meanwhile, further delays in the take-off of water/sewerage infrastructure works would hurt earnings.
• Weida’s 3QFY10 (Mar) results were operationally below expectations, due largely to lower-than-expected margins from its traditional manufacturing business. Nevertheless, overall net profit for the quarter was bolstered by a lower-than-expected tax rate, as well as an exceptional gain of MYR3.2 mln from the disposal of the group’s investment in Mutiara Goodyear (MGD MK, MYR0.78, Not Ranked).
• Revenue in 3QFY10 was down 38% QoQ, as revenue in 2QFY10 was bolstered by higher parts supply contributions from the group’s Syrian water/wastewater project. We estimate revenue of about MYR25 mln from the project in 3QFY10 vs. MYR50 mln in 2QFY10.
• Group EBIT margin declined to 7.7% in 3QFY10 from 8.7% in 2QFY10. Operating margin from the works division picked up to about 12% from 7%, with improved yields on the Syrian project. Manufacturing margin, however, dropped to 3% from 14% in 2QFY10
due to a higher mix of pipes vs. water tanks (which carry better margins), as well as timing differences in terms of booking in costs incurred in the previous quarter.
• We raise our FY10 net profit forecast by 13% to factor in the exceptional gain. Our FY11 earnings forecast is largely unchanged.
Recommendation & Investment Risks
• On the back of improving prospects, undemanding valuations and decent yields, we upgrade our call on Weida to Buy from Hold, with a raised 12-month target price of MYR0.83 from MYR0.71.
• We continue to peg Weida’s valuations to that of its peers in the water sector. Our target price is raised in accordance with higher peer valuations and reflects a sector average PER of 6.8x (6.0x previously) and includes our projected DPS. Valuations are undemanding, with the stock presently trading at a prospective FY11 PER of 5.9x. Meanwhile, the prospective dividend yield of 5.9% is also decent.
• What is positive is the Government’s emphasis on rural development in East Malaysia, particularly with regard to the water sector, and we are beginning to see the Government allocations flow through in terms of awarded contracts. We expect Weida to be a prime beneficiary of pipe replacement/installation works as well as rural water infrastructure projects. Separately, we estimate a further MYR100 mln worth of unbilled works on the group’s Syrian project, which should be progressively booked in over the next financial year.
• Risks to our recommendation and target price include the fluctuation in raw material prices, which would have an impact on manufacturing margins. Meanwhile, further delays in the take-off of water/sewerage infrastructure works would hurt earnings.
Magna ... Feb10
It is planning a RM1.3 billion twin tower development on 1.06ha of prime land – now occupied by the Lai Meng Gril’s School – that is owns in Jln Ampang. It hopes to kick off the project by 2013 and envisions two 52 story towers that will incorporate offices and residences and a hotel.
The Lee family, via Fantastic Realty Sdn Bhd owns 15.42% of Magna.
The Jln Ampang development is going to be its flagship project.
*** In March 2009, Magna announced a proposal to buy the land from the Lai Meng Board of trustees for RM148 million. As part of the deal, Magna needs to facilitate the transfer of 2.2ha of land in Bkt Jalil, which is owned by Santari Sdn Bhd, to Lai Meng. Santari had bought the tract from Bkt Jalil Development Sdn Bhd (BJD) in 2009 ***
Magna’s cost of acquisition is much lower than that of Sunrise Bhd. It is true that its low cost gives Magna an advantage over other developers in the area but given the size of the project, can the company acquire the necessary financial muscle?
As of Sept 2009, Magna’s books showed that it had some RM15.9 million in its coffers. It registered a net profit of RM6.33 million on the back of RM179 million in revenue for the nine month period.
Magna now (Feb 2010) has no money to do it on its own. But in 2013, it said it will be different due to its undertaking the Jln Ampang project given six project launches planned from April 2010. These projects are expected to generate at least Rm200 million in net profit for the group.
On top of all, Magna has very little borrowings, which means ample room to gear up.
At present, Magna only has three ongoing projects. The company will need to go on an acquisition trail after it depletes its land by 2013.
On top of the tract in Jln Ampang, Magna plans to buy a piece of land in Bkt Jalil, south of KL. However, the purchase of the 4.4ha parcel will be stuck in limbo until the owner of the land – BJD – calls for an EGM to seek shareholders approval for the proposal.
BJD, which is a subsidiary of Ho Hup Construction Bhd, has been ordered by the courts to hold and EGM by March 29, 2010. This follows an injunction to stop and/or restrain BJD from disposing of the property to any other party and compel BJD to meet its obligation as stipulated in the sale and purchase agreement signed with Magna.
The injunction brought by Magna came five months after Ho Hup withdrew the proposed sale of the 4.4ha at its EGM in July 2009 due to the disapproval of an opposing faction.
Give the prolonged board tussle at Ho Hup, it remains unclear whether Magna’s purchase of the BJD land will become a reality any time soon.
Nonetheless, Magna does not foresee any problems in the transfer of the 2.2ha in Bkt Jalil from Santari for the relocation of the Lai Meng Girl’s School from Jln Ampang. The relocation is integral to Magna’s proposed acquisition of the Lai Meng land, where its twin towers will be erected.
Be that as it may, the jewel in Magna’s crown is undoubtedly its piece of prime land in the city.
The Lee family, via Fantastic Realty Sdn Bhd owns 15.42% of Magna.
The Jln Ampang development is going to be its flagship project.
*** In March 2009, Magna announced a proposal to buy the land from the Lai Meng Board of trustees for RM148 million. As part of the deal, Magna needs to facilitate the transfer of 2.2ha of land in Bkt Jalil, which is owned by Santari Sdn Bhd, to Lai Meng. Santari had bought the tract from Bkt Jalil Development Sdn Bhd (BJD) in 2009 ***
Magna’s cost of acquisition is much lower than that of Sunrise Bhd. It is true that its low cost gives Magna an advantage over other developers in the area but given the size of the project, can the company acquire the necessary financial muscle?
As of Sept 2009, Magna’s books showed that it had some RM15.9 million in its coffers. It registered a net profit of RM6.33 million on the back of RM179 million in revenue for the nine month period.
Magna now (Feb 2010) has no money to do it on its own. But in 2013, it said it will be different due to its undertaking the Jln Ampang project given six project launches planned from April 2010. These projects are expected to generate at least Rm200 million in net profit for the group.
On top of all, Magna has very little borrowings, which means ample room to gear up.
At present, Magna only has three ongoing projects. The company will need to go on an acquisition trail after it depletes its land by 2013.
On top of the tract in Jln Ampang, Magna plans to buy a piece of land in Bkt Jalil, south of KL. However, the purchase of the 4.4ha parcel will be stuck in limbo until the owner of the land – BJD – calls for an EGM to seek shareholders approval for the proposal.
BJD, which is a subsidiary of Ho Hup Construction Bhd, has been ordered by the courts to hold and EGM by March 29, 2010. This follows an injunction to stop and/or restrain BJD from disposing of the property to any other party and compel BJD to meet its obligation as stipulated in the sale and purchase agreement signed with Magna.
The injunction brought by Magna came five months after Ho Hup withdrew the proposed sale of the 4.4ha at its EGM in July 2009 due to the disapproval of an opposing faction.
Give the prolonged board tussle at Ho Hup, it remains unclear whether Magna’s purchase of the BJD land will become a reality any time soon.
Nonetheless, Magna does not foresee any problems in the transfer of the 2.2ha in Bkt Jalil from Santari for the relocation of the Lai Meng Girl’s School from Jln Ampang. The relocation is integral to Magna’s proposed acquisition of the Lai Meng land, where its twin towers will be erected.
Be that as it may, the jewel in Magna’s crown is undoubtedly its piece of prime land in the city.
Tuesday, February 9, 2010
DNP ... Feb10
DNP HOLDINGS recorded Net Profit of RM10.5m for 2QE Dec 2009, up 320% from RM2.5m same quarter a year ago due to its Property Development and Trading Divisions.
In an EXCHANGE filing Jan 27, 2010, the Company said that Revenue rose 58% to RM87.2m from RM55.2m while EPS was 3.38 sen versus 0.81 sen same quarter a year ago.
1HE DEC 2009 NET PROFIT DOUBLES
For 1HE Dec 2009, Net Profit doubled to RM20.3m from RM10.5m while Revenue rose 17% to RM151.9m compared with RM129.4m same period a year ago.
OUTLOOK
" .... With improving domestic economic conditions, the Group expects an improvement in the property development and apparel and lifestyle divisions ...." it said.
CASH & BANK BALANCES/BORROWINGS
The Company had Cash & Bank Balances of RM93.8m as at Dec 31, 2009 compared with June 30, 2009 balances of RM30.3m.
Borrowings increased to RM63.9m as at Dec 31, 2009 from RM48.7m as at Jun 30, 2009 while Trade and Other Payables were at RM133.6m compared with RM84.9m.
In an EXCHANGE filing Jan 27, 2010, the Company said that Revenue rose 58% to RM87.2m from RM55.2m while EPS was 3.38 sen versus 0.81 sen same quarter a year ago.
1HE DEC 2009 NET PROFIT DOUBLES
For 1HE Dec 2009, Net Profit doubled to RM20.3m from RM10.5m while Revenue rose 17% to RM151.9m compared with RM129.4m same period a year ago.
OUTLOOK
" .... With improving domestic economic conditions, the Group expects an improvement in the property development and apparel and lifestyle divisions ...." it said.
CASH & BANK BALANCES/BORROWINGS
The Company had Cash & Bank Balances of RM93.8m as at Dec 31, 2009 compared with June 30, 2009 balances of RM30.3m.
Borrowings increased to RM63.9m as at Dec 31, 2009 from RM48.7m as at Jun 30, 2009 while Trade and Other Payables were at RM133.6m compared with RM84.9m.
KNM ... Feb10
KNM Group Bhd’s founder and group managing director Lee Swee Eng has proposed to acquire the entire business and undertakings of KNM in a deal worth RM3.6bil.
BlueFire Capital Group Ltd, an entity controlled by Lee, had proposed an equivalent price of 90 sen for each issued ordinary share of KNM.
Lee is currently the major shareholder of KNM with 23.74% direct and indirect shareholding in the company as at June 8, 2009.
The proposal is subject to the satisfactory completion of due diligence, receipt of firm financing commitments, and negotiation and execution of definitive documentation relating to the proposed transaction.
BlueFire was acting in collaboration with GS Capital Partners VI Fund L.P and Mettiz Capital Ltd in the acquisition and that its international adviser was Goldman Sachs (Singapore) Pte.
Pursuant to the above, the board has granted BlueFire a limited exclusivity period up to March 22, 2010 in which to complete due diligence and satisfy the other conditions of the proposal, subject to confidentiality undertakings.
KNM will also promptly engage its legal and financial advisors to assist KNM and its board in evaluating and negotiating the definitive terms of any transaction.
The funding structure and the reason of acquisition were not stated in the statement to Bursa. Lee was quoted on March 2009 as saying that a management buyout would be considered for KNM Group but it would be very difficult to raise funds in the current environment.
The offer price was about 13 times the company’s price earnings and it was a fair value for the offer.
Lee’s intention to acquire the company might be due to the improvement in the oil and gas (O&G) industry and the lower entry price for the acquisition.
For the third quarter ended Sept 30, 2009, KNM registered a net profit of RM31.9mil with revenue of RM458.3mil. Its net profit for the first nine months was RM201.8mil with revenue of RM1.4bil.
KNM, which was established in 1990, is involved in the manufacture of process equipment and processing units for O&G, petrochemicals, minerals processing, desalination, renewable energy, chemicals, steam generation, power and environment industries.
The group currently operates 19 manufacturing facilities and engineering centres in 12 countries, offering a diversified range of products and services to its clients in more than 60 countries.
Over 90% of its revenues are realised from the export markets and international business.
BlueFire Capital Group Ltd, an entity controlled by Lee, had proposed an equivalent price of 90 sen for each issued ordinary share of KNM.
Lee is currently the major shareholder of KNM with 23.74% direct and indirect shareholding in the company as at June 8, 2009.
The proposal is subject to the satisfactory completion of due diligence, receipt of firm financing commitments, and negotiation and execution of definitive documentation relating to the proposed transaction.
BlueFire was acting in collaboration with GS Capital Partners VI Fund L.P and Mettiz Capital Ltd in the acquisition and that its international adviser was Goldman Sachs (Singapore) Pte.
Pursuant to the above, the board has granted BlueFire a limited exclusivity period up to March 22, 2010 in which to complete due diligence and satisfy the other conditions of the proposal, subject to confidentiality undertakings.
KNM will also promptly engage its legal and financial advisors to assist KNM and its board in evaluating and negotiating the definitive terms of any transaction.
The funding structure and the reason of acquisition were not stated in the statement to Bursa. Lee was quoted on March 2009 as saying that a management buyout would be considered for KNM Group but it would be very difficult to raise funds in the current environment.
The offer price was about 13 times the company’s price earnings and it was a fair value for the offer.
Lee’s intention to acquire the company might be due to the improvement in the oil and gas (O&G) industry and the lower entry price for the acquisition.
For the third quarter ended Sept 30, 2009, KNM registered a net profit of RM31.9mil with revenue of RM458.3mil. Its net profit for the first nine months was RM201.8mil with revenue of RM1.4bil.
KNM, which was established in 1990, is involved in the manufacture of process equipment and processing units for O&G, petrochemicals, minerals processing, desalination, renewable energy, chemicals, steam generation, power and environment industries.
The group currently operates 19 manufacturing facilities and engineering centres in 12 countries, offering a diversified range of products and services to its clients in more than 60 countries.
Over 90% of its revenues are realised from the export markets and international business.
Monday, February 8, 2010
ETITech ... Feb10
It has raised the ante in the green revolution with its lithium-based battery, replacing the conventional lead acid-based battery, for use in the solar home system.
It had collaborated with compugates's 51% owned Compugates Sabah Sdn Bhd to instal the mini solar home system for 41 homes in Kampung Sumambu, Tenom, Sabah.
ETI Tech, which focused on providing renewable energy storage solutions, is offering solar home system to the government at RM36/watt for solar system below 10KWHr and RM50/watt for solar system above 10KWHr. The cost included installation cost and has a warranty period of five years for the ETI Tech green battery and 15 years for the solar panel.
A battery was crucial for a remote solar system. Since solar power of photovoltaic is not consistent, ETI Tech’s green battery enables evenness in power distribution whenever the use of energy is needed.
Related:
ETITech ... Jan10
It had collaborated with compugates's 51% owned Compugates Sabah Sdn Bhd to instal the mini solar home system for 41 homes in Kampung Sumambu, Tenom, Sabah.
ETI Tech, which focused on providing renewable energy storage solutions, is offering solar home system to the government at RM36/watt for solar system below 10KWHr and RM50/watt for solar system above 10KWHr. The cost included installation cost and has a warranty period of five years for the ETI Tech green battery and 15 years for the solar panel.
A battery was crucial for a remote solar system. Since solar power of photovoltaic is not consistent, ETI Tech’s green battery enables evenness in power distribution whenever the use of energy is needed.
Related:
ETITech ... Jan10
BJCorp/BJtoto ... Feb10
News on BJCorp’s unit in Vietnam is close to receiving a gaming licence in the country – probably the first such permit to be given out there.
The licence will be awarded to BJCorp’s 80% owned subsidiary Berjaya Lottery Vietnam Ltd, in which the group’s gaming arm Berjaya Sports Toto Bhd holds the remaining 20% stake.
At present, it is not clear if the licence is for lottery or for a number forecast operator offering 4D and lotto games. The lottery in Vietnam is now under state governance, with earnings channeled into public amentities.
If all goes well, the licence bodes well for BJCorp. It would mean the emergence of another cash cow in the group besides BJToTO, in which it holds a 48.26% stake.
Going by BJtoto’s earnings track record, Vietnam could prove to be profitable market for the company. Its population of over 80 million would offer BJCorp a much larger market than Malaysia, which is about one third its size. Additionally, Vietnam is a non Muslim country, which means it has a bigger target group to reach out to.
Additionally, competition is heating up in Malaysia. BJtoto’s 20% stake in BLVL will therefore enable it to tap a new market to boost future earnings. If the licence is for 4D and jackpot games – which are new to Vietnam – Berjaya group could have the whole pie to itself.
Be that as it may, there is no record of NFOs, including BJtoto, having done well overseas.
BJcorp’s venture in Vietnam will remind investors of Magnum’s fruitless effort to expand in Indonesia market years ago. But it may not be a fair comparison because Vietnam is not a Muslim nation. It could be a whole different ball games.
Still uncertain about BJcorp’s Vietnam foray as there are still a lot of unresolved issues. The gaming industry there remains a fragmented one. The lottery, in particular, is carried out by the provincial governments, with no centralized regulations.
Given that the lottery provides part of the government’s earnings, things may not be easy for BJCorp. The provincial authorities would be protective about their own business. It would be better to work in a joint venture basis.
The lottery in Vietnam is under the state governance and management, meaning that no private companies are allowed to operate the lottery in Vietnam.
In regards to electronic gaming, like jackpots, only three or four star hotels that are licensed by the government are allowed to operate electronic games on their premises. However, only foreigners are allowed to play electronic games provided by licensed operators.
There are also restrictions on the locals with regard to gaming activities.
The licence will be awarded to BJCorp’s 80% owned subsidiary Berjaya Lottery Vietnam Ltd, in which the group’s gaming arm Berjaya Sports Toto Bhd holds the remaining 20% stake.
At present, it is not clear if the licence is for lottery or for a number forecast operator offering 4D and lotto games. The lottery in Vietnam is now under state governance, with earnings channeled into public amentities.
If all goes well, the licence bodes well for BJCorp. It would mean the emergence of another cash cow in the group besides BJToTO, in which it holds a 48.26% stake.
Going by BJtoto’s earnings track record, Vietnam could prove to be profitable market for the company. Its population of over 80 million would offer BJCorp a much larger market than Malaysia, which is about one third its size. Additionally, Vietnam is a non Muslim country, which means it has a bigger target group to reach out to.
Additionally, competition is heating up in Malaysia. BJtoto’s 20% stake in BLVL will therefore enable it to tap a new market to boost future earnings. If the licence is for 4D and jackpot games – which are new to Vietnam – Berjaya group could have the whole pie to itself.
Be that as it may, there is no record of NFOs, including BJtoto, having done well overseas.
BJcorp’s venture in Vietnam will remind investors of Magnum’s fruitless effort to expand in Indonesia market years ago. But it may not be a fair comparison because Vietnam is not a Muslim nation. It could be a whole different ball games.
Still uncertain about BJcorp’s Vietnam foray as there are still a lot of unresolved issues. The gaming industry there remains a fragmented one. The lottery, in particular, is carried out by the provincial governments, with no centralized regulations.
Given that the lottery provides part of the government’s earnings, things may not be easy for BJCorp. The provincial authorities would be protective about their own business. It would be better to work in a joint venture basis.
The lottery in Vietnam is under the state governance and management, meaning that no private companies are allowed to operate the lottery in Vietnam.
In regards to electronic gaming, like jackpots, only three or four star hotels that are licensed by the government are allowed to operate electronic games on their premises. However, only foreigners are allowed to play electronic games provided by licensed operators.
There are also restrictions on the locals with regard to gaming activities.
Sunday, February 7, 2010
你了解对方吗?
其实很多男孩子都不知道，女孩子在对他们发火后自己转过身却在不断啜泣。
其实很多男孩子都不知道，女孩子从来不会真正去生他们的气，因为她是真的喜欢他在乎他。
其实很多男孩子都不知道，女孩子只会对自己喜欢的男生唠唠叨叨，
也只会对自己喜欢的人耍性子。
你要知道，假若她不喜欢你，她根本不会去在乎你关心你，怕你做错事情。
你要知道，假若她不喜欢你，她根本不会对你发火不会冲你撒娇让你哄她，
在别人面前她都是淑女。
你要知道，假若她不喜欢你，你根本就没有本事让她哭泣，让她即使生气也不会超过2天。
而这一切都只是因为她喜欢你，而这一切都因为你还不够在意她不够懂她。
于是，你们时常争吵，你认为她脾气不好，她认为你不够迁就她。
于是，你们总是冷战，你以为她不喜欢你，她以为你不在乎她。
于是，你们总是莫名其妙的彼此错过，也许擦身而过，本身就是一种悲伤着的无奈与幸福。
要知道，凄美依然是美的一种，并且美的绚丽悲凉而沧桑，那是更加的美。
因为她喜欢你，所以她偶尔冲你发火，时常对你撒娇。
因为她喜欢你，所以她才会生你的气；
而又因为喜欢你，她才不会去生气很久。
你可知道，每个女孩子的心都是水晶做的，晶莹剔透，但是很容易就碰伤摔碎。
你可知道，每个女孩子都是不设防的，你那么轻易就闯进她的心，走的时候却只留下伤害。
她从来都不知道，这个世界上根本没有可以让她哭的人，
因为真正值得她哭的那个根本舍不得让她哭。
她会很矜持，
她会很骄傲，
她会很冷淡，
她总是嘴里说着你走开，心里却一直叫你留下。
你了解女孩吗?
请你张开你的耳朵，也请你打开你的心，去听她心里真正的呼唤，而不是她嘴里的口是心非。
她会看着你转身，然后她跟着你转身，当侧身而过的时候，
你看不见她的泪，滂沱在脸上心里。
如果你喜欢她，请你多陪她；
如果你喜欢她，请你多宠她；
如果你喜欢她，请你多让她。
如果你喜欢她，请你去听听她内心的声音，那是呐喊－－请拥抱她。
在爱情里，总是彼此伤害，仿佛这样才能证明自己爱得激烈爱到轰轰烈烈。
可是，爱情里没有孰对孰错；爱情里更加没有你比我多我比你少。
你爱她，她爱你，如此就已经足够。
不要试图让彼此的伤害，让彼此更加脆弱悲伤。
你们彼此相爱，你们需要的是温暖是幸福是甜蜜是快乐，不是伤害。
不要用沉默宣战，不要互不相让，更不要什么话都不讲就冷漠离去。
要知道，你离去的时候，你的眼睛起了雾，她的眼角泛着泪光。
越是安静战火就越深，这是冷战也是彼此的伤害－－
无论是怎么的复合，那些伤口曾经存在，抹不去。
请跟她一个拥抱，用你的拥抱去化解她心里的悲伤与眼角的泪水。
她喜欢你，她绝对不会拒绝你的拥抱，她只会害怕你的冷漠转身无声安静。
请记住，相爱的人不要轻易宣战，因为冷战带来的伤害，超出你的预计。
也请记住，只要你喜欢她，没有什么是你接受不了的，只要你喜欢她，就喜欢她的一切一切。
那么她所有的小性子所有的坏脾气所有的臭毛病，在你眼里都是撒娇。
也请记住，她喜欢你，她需要的不是你真的转身，她嘴里说着的也不是她的真心话。
她只是想你宠她，想你抱她，哪怕，没有道谦。
其实很多男孩子都不知道，女孩子从来不会真正去生他们的气，因为她是真的喜欢他在乎他。
其实很多男孩子都不知道，女孩子只会对自己喜欢的男生唠唠叨叨，
也只会对自己喜欢的人耍性子。
你要知道，假若她不喜欢你，她根本不会去在乎你关心你，怕你做错事情。
你要知道，假若她不喜欢你，她根本不会对你发火不会冲你撒娇让你哄她，
在别人面前她都是淑女。
你要知道，假若她不喜欢你，你根本就没有本事让她哭泣，让她即使生气也不会超过2天。
而这一切都只是因为她喜欢你，而这一切都因为你还不够在意她不够懂她。
于是，你们时常争吵，你认为她脾气不好，她认为你不够迁就她。
于是，你们总是冷战，你以为她不喜欢你，她以为你不在乎她。
于是，你们总是莫名其妙的彼此错过，也许擦身而过，本身就是一种悲伤着的无奈与幸福。
要知道，凄美依然是美的一种，并且美的绚丽悲凉而沧桑，那是更加的美。
因为她喜欢你，所以她偶尔冲你发火，时常对你撒娇。
因为她喜欢你，所以她才会生你的气；
而又因为喜欢你，她才不会去生气很久。
你可知道，每个女孩子的心都是水晶做的，晶莹剔透，但是很容易就碰伤摔碎。
你可知道，每个女孩子都是不设防的，你那么轻易就闯进她的心，走的时候却只留下伤害。
她从来都不知道，这个世界上根本没有可以让她哭的人，
因为真正值得她哭的那个根本舍不得让她哭。
她会很矜持，
她会很骄傲，
她会很冷淡，
她总是嘴里说着你走开，心里却一直叫你留下。
你了解女孩吗?
请你张开你的耳朵，也请你打开你的心，去听她心里真正的呼唤，而不是她嘴里的口是心非。
她会看着你转身，然后她跟着你转身，当侧身而过的时候，
你看不见她的泪，滂沱在脸上心里。
如果你喜欢她，请你多陪她；
如果你喜欢她，请你多宠她；
如果你喜欢她，请你多让她。
如果你喜欢她，请你去听听她内心的声音，那是呐喊－－请拥抱她。
在爱情里，总是彼此伤害，仿佛这样才能证明自己爱得激烈爱到轰轰烈烈。
可是，爱情里没有孰对孰错；爱情里更加没有你比我多我比你少。
你爱她，她爱你，如此就已经足够。
不要试图让彼此的伤害，让彼此更加脆弱悲伤。
你们彼此相爱，你们需要的是温暖是幸福是甜蜜是快乐，不是伤害。
不要用沉默宣战，不要互不相让，更不要什么话都不讲就冷漠离去。
要知道，你离去的时候，你的眼睛起了雾，她的眼角泛着泪光。
越是安静战火就越深，这是冷战也是彼此的伤害－－
无论是怎么的复合，那些伤口曾经存在，抹不去。
请跟她一个拥抱，用你的拥抱去化解她心里的悲伤与眼角的泪水。
她喜欢你，她绝对不会拒绝你的拥抱，她只会害怕你的冷漠转身无声安静。
请记住，相爱的人不要轻易宣战，因为冷战带来的伤害，超出你的预计。
也请记住，只要你喜欢她，没有什么是你接受不了的，只要你喜欢她，就喜欢她的一切一切。
那么她所有的小性子所有的坏脾气所有的臭毛病，在你眼里都是撒娇。
也请记住，她喜欢你，她需要的不是你真的转身，她嘴里说着的也不是她的真心话。
她只是想你宠她，想你抱她，哪怕，没有道谦。
Saturday, February 6, 2010
人...辛苦是有原因的
知道人的一生為啥會那麼辛苦嗎？
有一天，神創造了一頭牛。衪對牛說：「你要整天在田裡替農夫耕田，供應牛奶給人類飲用。你要工作直至日
落，而你只能吃草。我給你50年的壽命。」
牛抗議：「我這麼辛苦，還只能吃草，我只要20年壽命，餘下的還給你。」
神答應了。
第二天，神創造了猴子。
神跟猴子說：「你要娛樂人類，令他們歡笑你要表演翻觔斗，而你只能吃香蕉。我給
你20年的壽命。」
猴子抗議：「要引人發笑，表演雜技，還要翻觔斗，這麼辛苦，我活10年好了。」
神答應。
第三天，神創造了狗。
神對狗說：「你要站在門口吠。你吃主人吃剩的東西。我給你25年的壽命。」
狗抗議：「整天坐在門口吠，我要15年好了，餘下的還給你。」
神答應。
第四天，神創造了人。
神對人說：「你只需要睡覺，吃東西和玩耍，不用做任何事情，只需要盡情享受生
命，我給你20年的壽命。」
人抗議：「這麼好的生活只有20年」
神沒說話。
人對神說「這樣吧。牛還了30年給你，猴子還了10年，狗也還了10年，這些都給我好
了，那我就能活到70歲。」
神答應了。
這就是為甚麼我們的頭20年，只需吃飯、睡覺和玩耍。
之後的30年，我們像一條牛整天工作養家。
接著的10年，我們退休了，我們得像隻猴子表演雜耍來娛樂自己的孫兒。
最後的10年，整天留在家裡，像一條狗坐在門口旁邊看門...............
有一天，神創造了一頭牛。衪對牛說：「你要整天在田裡替農夫耕田，供應牛奶給人類飲用。你要工作直至日
落，而你只能吃草。我給你50年的壽命。」
牛抗議：「我這麼辛苦，還只能吃草，我只要20年壽命，餘下的還給你。」
神答應了。
第二天，神創造了猴子。
神跟猴子說：「你要娛樂人類，令他們歡笑你要表演翻觔斗，而你只能吃香蕉。我給
你20年的壽命。」
猴子抗議：「要引人發笑，表演雜技，還要翻觔斗，這麼辛苦，我活10年好了。」
神答應。
第三天，神創造了狗。
神對狗說：「你要站在門口吠。你吃主人吃剩的東西。我給你25年的壽命。」
狗抗議：「整天坐在門口吠，我要15年好了，餘下的還給你。」
神答應。
第四天，神創造了人。
神對人說：「你只需要睡覺，吃東西和玩耍，不用做任何事情，只需要盡情享受生
命，我給你20年的壽命。」
人抗議：「這麼好的生活只有20年」
神沒說話。
人對神說「這樣吧。牛還了30年給你，猴子還了10年，狗也還了10年，這些都給我好
了，那我就能活到70歲。」
神答應了。
這就是為甚麼我們的頭20年，只需吃飯、睡覺和玩耍。
之後的30年，我們像一條牛整天工作養家。
接著的10年，我們退休了，我們得像隻猴子表演雜耍來娛樂自己的孫兒。
最後的10年，整天留在家裡，像一條狗坐在門口旁邊看門...............
Friday, February 5, 2010
Gadang ... Feb10
Gadang has interest in construction, property and plantation as well as being a water concessionaire.
Construction continues to be the main breadwinner for Gadang in terms of revenue, with the company bidding for some RM2 billion worth projects.
Among the notable projects Gadang is eyeing are the Pahang-Selangor Water Transfer project, worth estimated Rm300 million, and Petronas’ proposed US$300 million Kimanis power plant in Sabah.
It has also placed itself in the running for a portion of the work on the proposed Kelana Jaya and Ampang line LRT upgrades – expected to kick off in 2010.
Its balanced sheet as at end Nov 2009 shows the company holding RM78 million worth of short and long term debt of, while cash is RM17.8 million. The borrowings are mostly secured performance bonds, which is the norm when companies take on large projects. Its actual debts are only around 30% and 40% of that amount.
At the moment its order book stands at some Rm700 million.
While construction is its main focus in 2010, its water concessionaire business is to be a big revenue contributor over the next five years.
It holds controlling stakes in five Indonesian water supply companies and is looking to China as the next step.
Its property arm announced the acquisition of a parcel of land in Salak South for Rm33 million and has GDV of Rm250 million.
It has projects in Johor, Penang, Kedah and Selangor with a combined GDV of Rm509 million.
Its plantation unit has ventured into plantations, having signed two agreements with a landowner in Sabah to develop 5200 acres of land into a palm oil plantation. Its eventual goal is to own 25000 acres of plantation land over the next five years.
Financial Results …
Its net profit surged 88% to RM3.52 million in its second quarter ended Nov 30, 2009 from RM1.87 million a year earlier mainly due to lower cost.
Revenue fell 6.9% to RM62.37 million from RM66.98 million, while basic earnings per share (EPS) rose to 2.98 sen from 1.59 sen. No dividend was declared.
For six months to Nov 30, 2009, net profit rose 67% to RM7.37 million from RM4.42 million a year earlier mainly due to improved gross profit margins in the construction division and cost savings. Revenue growth was relatively flat at RM120.78 million versus RM119.94 million previously.
Construction continues to be the main breadwinner for Gadang in terms of revenue, with the company bidding for some RM2 billion worth projects.
Among the notable projects Gadang is eyeing are the Pahang-Selangor Water Transfer project, worth estimated Rm300 million, and Petronas’ proposed US$300 million Kimanis power plant in Sabah.
It has also placed itself in the running for a portion of the work on the proposed Kelana Jaya and Ampang line LRT upgrades – expected to kick off in 2010.
Its balanced sheet as at end Nov 2009 shows the company holding RM78 million worth of short and long term debt of, while cash is RM17.8 million. The borrowings are mostly secured performance bonds, which is the norm when companies take on large projects. Its actual debts are only around 30% and 40% of that amount.
At the moment its order book stands at some Rm700 million.
While construction is its main focus in 2010, its water concessionaire business is to be a big revenue contributor over the next five years.
It holds controlling stakes in five Indonesian water supply companies and is looking to China as the next step.
Its property arm announced the acquisition of a parcel of land in Salak South for Rm33 million and has GDV of Rm250 million.
It has projects in Johor, Penang, Kedah and Selangor with a combined GDV of Rm509 million.
Its plantation unit has ventured into plantations, having signed two agreements with a landowner in Sabah to develop 5200 acres of land into a palm oil plantation. Its eventual goal is to own 25000 acres of plantation land over the next five years.
Financial Results …
Its net profit surged 88% to RM3.52 million in its second quarter ended Nov 30, 2009 from RM1.87 million a year earlier mainly due to lower cost.
Revenue fell 6.9% to RM62.37 million from RM66.98 million, while basic earnings per share (EPS) rose to 2.98 sen from 1.59 sen. No dividend was declared.
For six months to Nov 30, 2009, net profit rose 67% to RM7.37 million from RM4.42 million a year earlier mainly due to improved gross profit margins in the construction division and cost savings. Revenue growth was relatively flat at RM120.78 million versus RM119.94 million previously.
Thursday, February 4, 2010
D&O ... Feb10
A semiconductor and light-emitting diode (LED) component manufacturer has set aside RM50 million for phase one of its two expansion projects planned this year.
The investment would be utilised for enhancing the equipment and facilities at the company's factory in Melaka as well as to complete its new factory in Laos. The second factory, expected to be completed by June 2010, would enable D&O Ventures to raise production capacity and expand export network.
They are eyeing to double up its production capacity through this phase one exercise and looking forward for more space in the LED global market, especially in terms of government projects in Malaysia.
D&O Ventures expected its new subsidiary in Japan, AE Opto, a television backlight module provider, to be a major contributor to the group's revenue this year. D&O Ventures owns 51 per cent shares of the company. It still export LED components for the company while AE Opto will produce the television backlight.
The company was very sure of AE Opto's contribution as global television manufacturers were eager on producing LED technology televisions rather than using mercury bulb.
Currently, the LED television production worldwide is five per cent annually. However, it is expected to increase to about 15-20 per cent of total production this year.
On D&O Ventures' foreign markets, presently, the company exported its products to six countries including Korea, China and India.
D&O Ventures owns two wholly-owned subsidiaries in Malaysia, namely Dominant Semiconductors Sdn Bhd and Omega Semiconductor Sdn Bhd. Currently, Dominant Semiconductors, the LED manufacturer, contributes more than 80 per cent to the group's annual revenue.
The investment would be utilised for enhancing the equipment and facilities at the company's factory in Melaka as well as to complete its new factory in Laos. The second factory, expected to be completed by June 2010, would enable D&O Ventures to raise production capacity and expand export network.
They are eyeing to double up its production capacity through this phase one exercise and looking forward for more space in the LED global market, especially in terms of government projects in Malaysia.
D&O Ventures expected its new subsidiary in Japan, AE Opto, a television backlight module provider, to be a major contributor to the group's revenue this year. D&O Ventures owns 51 per cent shares of the company. It still export LED components for the company while AE Opto will produce the television backlight.
The company was very sure of AE Opto's contribution as global television manufacturers were eager on producing LED technology televisions rather than using mercury bulb.
Currently, the LED television production worldwide is five per cent annually. However, it is expected to increase to about 15-20 per cent of total production this year.
On D&O Ventures' foreign markets, presently, the company exported its products to six countries including Korea, China and India.
D&O Ventures owns two wholly-owned subsidiaries in Malaysia, namely Dominant Semiconductors Sdn Bhd and Omega Semiconductor Sdn Bhd. Currently, Dominant Semiconductors, the LED manufacturer, contributes more than 80 per cent to the group's annual revenue.
Wednesday, February 3, 2010
SPRITZR ... Feb10
S & P Results Review & Earnings Outlook
• Spritzer reported 1HFY10 (May) net profit of MYR3.2 mln (+67.8% YoY), which accounted for 56.1% of our previous full-year forecast. The results were above our expectations, the variance lying in a higher-than-expected operating margin in 2QFY10 and lower-thanexpected tax charges.
• Revenue in 2QFY10 grew 23.7% YoY. This was mainly attributed to higher sales of various bottled water products. Sales declined 5.4% QoQ because of lower demand in the September fasting month. Despite marginally lower sales in 2QFY10, operating margin improved to 12.7% in 2QFY10 from 12.4% in 1QFY10.
• We expect sales in 2HFY10 to be stronger as the seasonally high demand for bottled water during the Chinese New Year period will be captured in 3QFY10. The group’s expansion project, which will increase its bottled water capacity by 20% initially, is underway. We are projecting higher interest expense in the 2HFY10, which would
compress profit margin.
• We lift our net profit earnings estimate for FY10 by 8.4% to MYR12.0 mln to factor in the higher-than-expected operating margin and a lower tax charge. We reduce our net profit forecast for FY11 to MYR13.0 mln (from MYR13.9 mln) on expectation of lower margins due to rising resin prices.
Recommendation & Investment Risks
• We raise our recommendation on Spritzer to Buy (from Hold) with a slightly higher target price of MYR0.77 (MYR0.75). The higher target price reflects our earnings upgrade, after reviewing 2QFY10 results. Demand for Spritzer’s bottled water products remains strong, growing at an annual rate of 10%-15% and in our opinion, the recent underperformance in share price has sufficiently reflected market
concern over higher resin prices.
• We continue to peg its FY10 beverage earnings at a 20% discount (unchanged) to the Malaysian food and beverage sector forward average PER of 11.1x (from 11.8x previously), in view of Spritzer’s smaller market capitalization. The target PER for its plastic packaging division is based on the sector’s 2010 average PER of 6.3x (from 6.5x).
• To finance its expansion plan, group borrowings increased to MYR58.7 mln as at November 2009 from MYR25.1 mln as at August 2009, raising net gearing to 40.0% from 14.1%.
• Risks to our recommendation and target price include: (i) weaker-thanexpected
demand for its products, (ii) higher-than-expected increases in raw material, packaging and energy costs, (iii) delay in its expansion program and (iv) a higher-than-expected tax charge.
• Spritzer reported 1HFY10 (May) net profit of MYR3.2 mln (+67.8% YoY), which accounted for 56.1% of our previous full-year forecast. The results were above our expectations, the variance lying in a higher-than-expected operating margin in 2QFY10 and lower-thanexpected tax charges.
• Revenue in 2QFY10 grew 23.7% YoY. This was mainly attributed to higher sales of various bottled water products. Sales declined 5.4% QoQ because of lower demand in the September fasting month. Despite marginally lower sales in 2QFY10, operating margin improved to 12.7% in 2QFY10 from 12.4% in 1QFY10.
• We expect sales in 2HFY10 to be stronger as the seasonally high demand for bottled water during the Chinese New Year period will be captured in 3QFY10. The group’s expansion project, which will increase its bottled water capacity by 20% initially, is underway. We are projecting higher interest expense in the 2HFY10, which would
compress profit margin.
• We lift our net profit earnings estimate for FY10 by 8.4% to MYR12.0 mln to factor in the higher-than-expected operating margin and a lower tax charge. We reduce our net profit forecast for FY11 to MYR13.0 mln (from MYR13.9 mln) on expectation of lower margins due to rising resin prices.
Recommendation & Investment Risks
• We raise our recommendation on Spritzer to Buy (from Hold) with a slightly higher target price of MYR0.77 (MYR0.75). The higher target price reflects our earnings upgrade, after reviewing 2QFY10 results. Demand for Spritzer’s bottled water products remains strong, growing at an annual rate of 10%-15% and in our opinion, the recent underperformance in share price has sufficiently reflected market
concern over higher resin prices.
• We continue to peg its FY10 beverage earnings at a 20% discount (unchanged) to the Malaysian food and beverage sector forward average PER of 11.1x (from 11.8x previously), in view of Spritzer’s smaller market capitalization. The target PER for its plastic packaging division is based on the sector’s 2010 average PER of 6.3x (from 6.5x).
• To finance its expansion plan, group borrowings increased to MYR58.7 mln as at November 2009 from MYR25.1 mln as at August 2009, raising net gearing to 40.0% from 14.1%.
• Risks to our recommendation and target price include: (i) weaker-thanexpected
demand for its products, (ii) higher-than-expected increases in raw material, packaging and energy costs, (iii) delay in its expansion program and (iv) a higher-than-expected tax charge.
Scientex ... Feb10
Scientex Quatari Sdn Bhd, the property division of industrial plastic products manufacturer Scientex Bhd, is planning to launch a high-end property project in Pulai, Johor to take advantage of the increasing demand for housing in the area.
Slated to be launched in the second half of 2010, the new project worth more than RM1 billion on 58ha of freehold land will be a departure from the group’s current property developments in Kulai and Pasir Gudang, which mainly cater to the lower middle-income group.
The land in Pulai was acquired in October 2009 when Scientex Quatari bought over Johline Realty Sdn Bhd, a Johor-based property developer, for RM65.31 million. The purchase was funded by internal funds and bank borrowings of RM25.31 million and RM40 million, respectively.
Johline has another piece of freehold land measuring 4.4ha in Plentong, also within the Johor Bahru enclave. The acquisition of the loss-making Johline was completed earlier this month and will serve as the springboard for Scientex’s property ambition in Johor.
Its flagship property project is Taman Scientex in Pasir Gudang, a township development on a 445.5ha land with a gross development value of RM1.2 billion.
In terms of revenue, the property division has managed to rake in sales of more than RM50 million in the first six months of the financial year ending July 31, 2010. The group is also planning to launch another 800 houses, including 200 in Taman Scientex and 400 in Kulai this year.
Moving forward, the property division would be one of the major revenue contributors to the group and Scientex was still looking at expanding its landbank to position itself for an eventual upturn in the property market.
Slated to be launched in the second half of 2010, the new project worth more than RM1 billion on 58ha of freehold land will be a departure from the group’s current property developments in Kulai and Pasir Gudang, which mainly cater to the lower middle-income group.
The land in Pulai was acquired in October 2009 when Scientex Quatari bought over Johline Realty Sdn Bhd, a Johor-based property developer, for RM65.31 million. The purchase was funded by internal funds and bank borrowings of RM25.31 million and RM40 million, respectively.
Johline has another piece of freehold land measuring 4.4ha in Plentong, also within the Johor Bahru enclave. The acquisition of the loss-making Johline was completed earlier this month and will serve as the springboard for Scientex’s property ambition in Johor.
Its flagship property project is Taman Scientex in Pasir Gudang, a township development on a 445.5ha land with a gross development value of RM1.2 billion.
In terms of revenue, the property division has managed to rake in sales of more than RM50 million in the first six months of the financial year ending July 31, 2010. The group is also planning to launch another 800 houses, including 200 in Taman Scientex and 400 in Kulai this year.
Moving forward, the property division would be one of the major revenue contributors to the group and Scientex was still looking at expanding its landbank to position itself for an eventual upturn in the property market.
Tuesday, February 2, 2010
TNB ... Feb10
1QFY10 Results Review
• Tenaga showed a marked improvement in its 1QFY10 results, with net profit at RM706.5m compared to a net loss of RM944.1m a year ago. After removing the effect of translation loss which amounted to RM45.4m, 1QFY10 net profit (before translation loss) of RM751.9m was in line with our expectation, accounting for 27% of our full-year projection.
• For the quarter under review, the Group registered electricity unit growth across all major sectors, namely industrial, commercial and domestic, which resulted in the overall demand growth of 2.7% yoy in Peninsular Malaysia. Revenue, however, fell slightly by 1% yoy to RM7.3b largely due to the tariff adjustment which took effect in March 2009.
• Despite the decline in revenue, operating profit grew an encouraging 39.3% yoy to RM1.2b, mainly helped by the 11.3% yoy reduction in generation costs. Average coal cost for Tenaga in 1QFY10 was USD80/mt vs. USD113/mt a year ago. Consequently, EBITDA margin rose to 29.5% in 1QFY10 from 22.2% in 1QFY09.
• Meanwhile, Tenaga’s balance sheet continues to strengthen with NTA/share rising to RM6.08 in 1QFY10 from RM6.00 in 4QFY09. Net gearing too, improved to 0.60x from 0.63x during the same period.
• No dividend was declared for the quarter under review.
• While the challenges of rising opex and fluctuation in fuel costs remain, we now turn positive on the Group’s outlook, underpinned by the expected expansion in electricity consumption. The 2.7% yoy electricity unit increase in 1QFY10 was the second sequential growth quarter in Peninsular Malaysia. To recap, electricity consumption contracted 7.6% yoy and 4.7% yoy in 2QFY09 and 3QFY09 respectively, before rebounding to a growth of 0.6% yoy in 4QFY09 and 2.7% yoy in 1QFY10. We understand from management that electricity usage in the month of December 2009 continued to rise 7.6% yoy. We view this development favourably. With the gradual pickup in the domestic economy, we expect the rising uptrend in demand growth to prevail into the remaining quarters of FY10. With no surprises in the 1QFY10 results, we maintain our FY10 net profit projection at RM2.7b.
Recommendation
Against the backdrop of improving electricity consumption and less volatile coal prices, we upgrade our recommendation to Buy but retain our fair value of RM8.86, which is derived from a DCF-based earnings model. Following the recent pullback in share price, which is broadly in line with the fall in the FBM KLCI index, we view Tenaga’s present valuation, at FY10 PER of 12.7x, as more palatable especially compared to its 5-year historical median PER of 20x.
• Tenaga showed a marked improvement in its 1QFY10 results, with net profit at RM706.5m compared to a net loss of RM944.1m a year ago. After removing the effect of translation loss which amounted to RM45.4m, 1QFY10 net profit (before translation loss) of RM751.9m was in line with our expectation, accounting for 27% of our full-year projection.
• For the quarter under review, the Group registered electricity unit growth across all major sectors, namely industrial, commercial and domestic, which resulted in the overall demand growth of 2.7% yoy in Peninsular Malaysia. Revenue, however, fell slightly by 1% yoy to RM7.3b largely due to the tariff adjustment which took effect in March 2009.
• Despite the decline in revenue, operating profit grew an encouraging 39.3% yoy to RM1.2b, mainly helped by the 11.3% yoy reduction in generation costs. Average coal cost for Tenaga in 1QFY10 was USD80/mt vs. USD113/mt a year ago. Consequently, EBITDA margin rose to 29.5% in 1QFY10 from 22.2% in 1QFY09.
• Meanwhile, Tenaga’s balance sheet continues to strengthen with NTA/share rising to RM6.08 in 1QFY10 from RM6.00 in 4QFY09. Net gearing too, improved to 0.60x from 0.63x during the same period.
• No dividend was declared for the quarter under review.
• While the challenges of rising opex and fluctuation in fuel costs remain, we now turn positive on the Group’s outlook, underpinned by the expected expansion in electricity consumption. The 2.7% yoy electricity unit increase in 1QFY10 was the second sequential growth quarter in Peninsular Malaysia. To recap, electricity consumption contracted 7.6% yoy and 4.7% yoy in 2QFY09 and 3QFY09 respectively, before rebounding to a growth of 0.6% yoy in 4QFY09 and 2.7% yoy in 1QFY10. We understand from management that electricity usage in the month of December 2009 continued to rise 7.6% yoy. We view this development favourably. With the gradual pickup in the domestic economy, we expect the rising uptrend in demand growth to prevail into the remaining quarters of FY10. With no surprises in the 1QFY10 results, we maintain our FY10 net profit projection at RM2.7b.
Recommendation
Against the backdrop of improving electricity consumption and less volatile coal prices, we upgrade our recommendation to Buy but retain our fair value of RM8.86, which is derived from a DCF-based earnings model. Following the recent pullback in share price, which is broadly in line with the fall in the FBM KLCI index, we view Tenaga’s present valuation, at FY10 PER of 12.7x, as more palatable especially compared to its 5-year historical median PER of 20x.
Tgoffs ... Feb10
Tanjung Offshore Bhd is bidding for up to RM1.5 billion worth of projects as it pursues an organic growth strategy towards sustaining earnings over the longer term.
The oil and gas (O&G) support services provider, which is anticipating its maiden overseas income in the current fiscal year, was also planning to raise funds to refinance existing loans and facilitate business expansion plans.
Based on Tanjung Offshore’s historical tender success rate of 20%-30% and its ongoing bids of between RM1 billion and RM1.5 billion, the firm has the potential to secure at least RM200 million worth of jobs. The company already has RM1.3 billion worth of outstanding projects across Malaysia, Indonesia and the UK which are expected to sustain earnings for the next five years.
It is also eyeing new businesses in the Middle East, India, Vietnam and Thailand.
For the current financial year ending Dec 31, 2010, the company expected revenue from its operations in Indonesia and the United Kingdom to contribute a tenth to the O&G support services provider’s top line.
Foreign income will be supported by global sales of Tanjung Offshore’s gas generators and waste-heat recovery units, which are manufactured in Indonesia and the UK respectively.
The company has secured deals worth a total of RM249 million, mainly from Petroliam Nasional Bhd’s (Petronas) upstream unit Petronas Carigali Sdn Bhd. These include a RM70 million job to provide wellhead maintenance services for Petronas Carigali’s operations across Malaysia.
Petronas Carigali, which has ordered about RM25 million worth of glycol dehydration packages from Tanjung Offshore, will also lease anchor handling tug and supply vessels under long-term contracts worth some RM150 million from the O&G support services company.
Besides Petronas, Tanjung Offshore has also clinched a RM4 million contract from Murphy Sarawak Oil Co Ltd to supply gas engine generator spare parts.
On fund-raising initiatives, Tanjung Offshore was considering bank loans and private placement of new shares. The private placement may be undertaken within the next 15 months depending on market conditions.
Apart from refinancing Tanjung Offshore’s long-term loans to take advantage of the existing low interest rate environment, proceeds from potential fund-raising exercises will be used to finance the construction of new marine vessels.
Between 2005 and 2009, Tanjung Offshore’s fleet expanded from two vessels to 16. Marine support services will be become a major contributor to Tanjung Offshore’s financials.
Going forward, expecting marine services to continue to be the company’s main revenue driver and its growth to be sustained by strong crude oil prices.
Tanjung Offshore did not specify geographical or business division segmental numbers in notes accompanying its latest quarterly financial results. However, marine services constitute the bulk of Tanjung Offshore’s revenue while maintenance services make up between 10% and 15%.
The oil and gas (O&G) support services provider, which is anticipating its maiden overseas income in the current fiscal year, was also planning to raise funds to refinance existing loans and facilitate business expansion plans.
Based on Tanjung Offshore’s historical tender success rate of 20%-30% and its ongoing bids of between RM1 billion and RM1.5 billion, the firm has the potential to secure at least RM200 million worth of jobs. The company already has RM1.3 billion worth of outstanding projects across Malaysia, Indonesia and the UK which are expected to sustain earnings for the next five years.
It is also eyeing new businesses in the Middle East, India, Vietnam and Thailand.
For the current financial year ending Dec 31, 2010, the company expected revenue from its operations in Indonesia and the United Kingdom to contribute a tenth to the O&G support services provider’s top line.
Foreign income will be supported by global sales of Tanjung Offshore’s gas generators and waste-heat recovery units, which are manufactured in Indonesia and the UK respectively.
The company has secured deals worth a total of RM249 million, mainly from Petroliam Nasional Bhd’s (Petronas) upstream unit Petronas Carigali Sdn Bhd. These include a RM70 million job to provide wellhead maintenance services for Petronas Carigali’s operations across Malaysia.
Petronas Carigali, which has ordered about RM25 million worth of glycol dehydration packages from Tanjung Offshore, will also lease anchor handling tug and supply vessels under long-term contracts worth some RM150 million from the O&G support services company.
Besides Petronas, Tanjung Offshore has also clinched a RM4 million contract from Murphy Sarawak Oil Co Ltd to supply gas engine generator spare parts.
On fund-raising initiatives, Tanjung Offshore was considering bank loans and private placement of new shares. The private placement may be undertaken within the next 15 months depending on market conditions.
Apart from refinancing Tanjung Offshore’s long-term loans to take advantage of the existing low interest rate environment, proceeds from potential fund-raising exercises will be used to finance the construction of new marine vessels.
Between 2005 and 2009, Tanjung Offshore’s fleet expanded from two vessels to 16. Marine support services will be become a major contributor to Tanjung Offshore’s financials.
Going forward, expecting marine services to continue to be the company’s main revenue driver and its growth to be sustained by strong crude oil prices.
Tanjung Offshore did not specify geographical or business division segmental numbers in notes accompanying its latest quarterly financial results. However, marine services constitute the bulk of Tanjung Offshore’s revenue while maintenance services make up between 10% and 15%.
Monday, February 1, 2010
環遊世界長知識
讓我們從美洲出發走一圈：
到了美國，才知道不管對方是誰，你都可以打個官司告一告。
到了夏威夷，才知道女人可以不必買胸罩。
到了加拿大，才知道面積比中國還大的地方；人比北京還少。
到了墨西哥，才知道要去美國，還可以走地下道。
到了巴拿馬，才知道一條河，也代表了主權的重要。
到了巴西，才知道衣服穿得很少也用不著害臊。
到了古巴，才知道雪茄有N種味道。
到了智利，才知道火車在境內拐個彎也很難辦到。
到了阿根廷，才知道不懂足球會讓人暈倒。
到歐洲了：
到了北歐，才知道太陽也會睡懶覺。
到了德國，才知道一板一眼，竟然是雙B的驕傲。
到了英國，才知道童話中的幸福與快樂都是偽造。
到了荷蘭，才知道海平面原來這麼高。
到了法國，才知道被人調戲，還會很有情調。
到了西班牙，才知道被牛拱到天上，還可以哈哈大笑。
到了南斯拉夫，才知道為什麼有人不願回到祖國的懷抱。
到了俄羅斯，才知道伏特加是一種飲料。
到了奧地利，才知道連個乞丐都能彈上一支小調。
到了瑞士，才知道開個銀行帳戶，沒有百萬美金是會被人恥笑。
到了丹麥，才知道編個童話其實可以不打草稿。
到了義大利，才知道GUCCI,PRADA比中國還少。
到了希臘，才知道迷人的地方其實都是破廟。
到了梵蒂岡，才知道在境內任何地方開槍，都可以打著羅馬的鳥。
過了地中海，來到非洲：
到了非洲，才知道人吃人有時候
到了美國，才知道不管對方是誰，你都可以打個官司告一告。
到了夏威夷，才知道女人可以不必買胸罩。
到了加拿大，才知道面積比中國還大的地方；人比北京還少。
到了墨西哥，才知道要去美國，還可以走地下道。
到了巴拿馬，才知道一條河，也代表了主權的重要。
到了巴西，才知道衣服穿得很少也用不著害臊。
到了古巴，才知道雪茄有N種味道。
到了智利，才知道火車在境內拐個彎也很難辦到。
到了阿根廷，才知道不懂足球會讓人暈倒。
到歐洲了：
到了北歐，才知道太陽也會睡懶覺。
到了德國，才知道一板一眼，竟然是雙B的驕傲。
到了英國，才知道童話中的幸福與快樂都是偽造。
到了荷蘭，才知道海平面原來這麼高。
到了法國，才知道被人調戲，還會很有情調。
到了西班牙，才知道被牛拱到天上，還可以哈哈大笑。
到了南斯拉夫，才知道為什麼有人不願回到祖國的懷抱。
到了俄羅斯，才知道伏特加是一種飲料。
到了奧地利，才知道連個乞丐都能彈上一支小調。
到了瑞士，才知道開個銀行帳戶，沒有百萬美金是會被人恥笑。
到了丹麥，才知道編個童話其實可以不打草稿。
到了義大利，才知道GUCCI,PRADA比中國還少。
到了希臘，才知道迷人的地方其實都是破廟。
到了梵蒂岡，才知道在境內任何地方開槍，都可以打著羅馬的鳥。
過了地中海，來到非洲：
到了非洲，才知道人吃人有時候