Thai floods dent DRB-Hicom’s earnings, 3Q dn 27%

KUALA LUMPUR (Feb 24): DRB-HICOM BHD []’s net profit took a hit following the severe floods in Thailand, which saw its earnings falling 27.6% for the third quarter ended Dec 31, 2011, to RM79.57 million from RM110.10 million.

It said on Friday that its automotive division’s earnings were affected by the Thai floods which had caused supply constraints.

DRB-Hicom said revenue rose 5.6% to RM1.69 billion from RM1.60 billion a year ago.

Earnings per share were 4.12 sen compared to 5.69 sen. It declared an interim dividend of 2 sen per share for the quarter.

The group attributed supply constraints arising from the recent Thai floods for its lower revenue and profits.

“Nevertheless, DRB-Hicom with its diverse business background is ready to withstand the challenges thrown its way. Its services and property businesses will continue to provide the mitigating factors,” said its group managing director Datuk Seri Mohd Khamil Jamil.

For the nine months ended Dec 31, 2011, revenue dipped 1.01% to RM4.754 billion from RM4.806 billion, while net profits fell 31.3% to RM274.92 million from RM400.07 million.

On the outlook, DRB-Hicom said the group’s automotive sector was expected to be weaker, contributed by new stringent credit financing policies, stiff global and regional competition, volatility of foreign exchange rates and also supply disruptions of components caused primarily by Thailand flood. It expected normal production to resume in March 2012.



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Sarawak Oil Palms FY11 earnings up 60% to RM242m

KUALA LUMPUR (Feb 24): SARAWAK OIL PALMS BHD [] recorded a 60.35% increase in earnings to RM242.95 million in the financial year ended Dec 31, 2011 from RM151.51 million last year, boosted by higher sales and production of crude palm oil (CPO) and palm kernel.

It said on Friday revenue for FY11 increased by 60.7% to RM1.17 billion from RM728.16 million a year ago. Earnings per share were 9.98 sen compared to 10.43 sen.

Sarawak Oil Palms attributed the increase in both revenue and profit to higher production and sales of CPO and palm kernel as well as from trading activities.

For the fourth quarter ended Dec 31, 2011, net profit 11.1% to RM43.32 million from RM48.74 million, due to lower CPO and palm kernel prices compared to a year ago. This was despite a 47.5% increase in revenue to RM313.57 million from RM212.59 million.



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Malton’s 2Q earnings down 48% to RM7.18m as projects completed yr ago

KUALA LUMPUR (Feb 24): Property developer MALTON BHD []'s earnings fell 48.3% to RM7.18 million in the second quarter ended Dec 31, 2011 from RM13.90 million a year ago due to the completion of various projects.

It said on Friday, its revenue decreased 28.8% to RM77.74 million from RM109.29 million. Earnings per share were 1.72 sen compared to 3.99 sen a year ago.

Malton attributed the decline in profit and revenue to its Amaya Saujana and Mutiara Indah projects which were being completed.

However, other on-going projects such as Bukit Rimau, V Square, Amaya Maluri and Mutiara Residence contributed positively to its earnings.

For the first half ended Dec 31, 2011, revenue dipped 0.6% to RM177.02 million from RM178.07 million. Net profit fell marginally to 0.8% to RM19.29 million from RM19.45 million.



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Moody’s: TM’s ratings unaffected by RM1.073 bn capital repayment

KUALA LUMPUR (Feb 24): Moody's Investors Service said there was no impact for the A3 issuer and senior unsecured ratings of TELEKOM MALAYSIA BHD [] (TM) after it announced a RM1.073 billion capital repayment to shareholders via a share reduction.

The international ratings agency said on Friday the ratings outlook remains stable.

The proposed capital repayment of about RM1.073 billion would be implemented by reducing the par value of each TM share from RM1 to 70 sen per share. The capital repayment will be funded through TM's existing cash balances of RM4.213 billion as of Dec 31, 2011.

Nidhi Dhruv, a Moody's analyst, and lead analyst for TM said: "The capital repayment is consistent with TM's commitment to periodically return surplus cash to shareholders, in the absence of further capex needs or investment opportunities.

“Although, this will weaken cash flow metrics, TM's overall credit profile remains adequate for its rating level given the cash flow generating capabilities of its core business, manageable capex, and relatively low leverage.”

TM's operational performance for 2011 was in line with expectations, and the company exceeded all its headline KPIs. TM achieved a growth of 12.3% on-year in broadband subscribers, supported by increasing High Speed Broadband (HSBB) take-up of over 20% with 230,000 customers.

In 2011, TM also set up a RM2.0 billion Islamic medium-term notes (IMTN) programme, issuances under which have increased reported total debt to RM6.4 billion as of December 2011, resulting in higher Debt/EBITDA of 1.8 times, compared with 1.6 times a year ago.

"However, the company has no material near-term maturities and benefits from a long-dated debt maturity profile. It can sustain a slightly higher leverage at the current rating level because of the relative stability of cash flow, its dominant market position, largely assured access to domestic capital markets, and expected support from the government of Malaysia,” added Dhruv.

TM is the largest fixed-line telecommunications operator in Malaysia. It holds about 98% of the fixed-line market and 93% of the broadband market (excluding hotspot customers) by subscribers.



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MPHB 4Q earnings double to RM260m, boosted by property sales

KUALA LUMPUR (Feb 24): MULTI-PURPOSE HOLDINGS BHD []’s (MPHB) earnings jumped 205% to RM260.14 million in the fourth quarter ended Dec 31, 2011 (4Q2011) from RM85.21 million a year ago, boosted by an exceptional gain derived from the sale of PROPERTIES [] within the group.

It said on Friday its revenue increased by 2.1% to RM913.91 million from RM894.45 million. Its earnings per share were 20.40 sen compared with 7.90 sen. It declared an interim dividend of 5.0 sen a share.

MPHB said its gaming division recorded a profit before tax of RM84.1 million in 4Q2011, down 6.5% from the profit before tax of RM90.0 million in 4Q10.

The division reported fair value gain on the valuation of derivative of RM1.8 million in 4Q10 compared to a loss of RM1.1 million in 4Q11. Higher operating expenses in 4Q11 had adversely affected the results.

Write back of doubtful debts of RM1.0 million in 4Q10 resulted in higher profit before tax of the stockbroking division at RM5.0 million compared to RM4.0 million recorded in 4Q11.

As for the financial services division, it reported a profit before tax of RM12.5 million which was 30.9% lower than RM18.1 million in 4Q10 due to lower fair value gain from the quoted investments.

For FY11, its earnings rose 60.6% to RM482.02 million from RM300.04 million mainly due to the gain from disposal of properties, higher dividend income from investments and better performances from all divisions. Its revenue dipped 1.6% to RM3.535 billion from RM3.594 billion.



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China Stationery in focus, KLCI closes higher

KUALA LUMPUR (Feb 24): China Stationery Ltd (CSL) was in focus on Friday when it made its debut on Bursa Malaysia on Friday, closing 15.8% higher amid some profit-taking activities in the broader market.

CSL closed up 15 sen to RM1.10 and it was the most active stock with 154 million shares traded.

The stationery manufacturer's initial public offering, priced at 95 sen per share, raised RM85.50 million from its public issue of 90 million new shares.

As for the FBM KLCI, it closed up 2.11 points or 0.14% at 1,558.77, led Axiata (up 6.0 sen to RM5.15), YTL Corp (up 7.0 sen to RM1.49) and IOI Corp (up 6.0 sen to RM5.39). Their gains pushed the index up 3.16 points.

Turnover was 1.70 billion shares valued at RM1.94 billion. Gainers led losers 425 to 373 while 343 counters traded unchanged.

Regional markets closed higher, with the Shanghai Composite Index up 1.25% to 2,439.63, Hong Kong's Hang Seng Index up 0.12% to 21,406.86, Japan's Nikkei 225 0.54% to 9,647.38, South Korea's Kospi rose 0.60% to 2,019.89, Singapore's Straits Index up 0.33% to 2,978.08 and Taiwan's Taiex, up 0.28% to 7,959.34.

Commenting on the performance of Bursa Malaysia, Dr Nazri Khan, vice president of retail research at Affin Investment Bank Research said:

"We see the last three profit taking days (Wednesday to Friday) as a healthy correction to neutralise its overbought momentum.

"We also note that the strong ringgit performance (1.1% weekly gain and 4.5% year to date gain) as positive signs of more inflow for the local equities.”

At Bursa Malaysia, top gainers included British American Tobacco up 44 sen to RM52.56, Panasonic Malaysia up 42 sen to RM21.00 and Dutch Lady up 28 sen to RM25.80.

Losers were led by PLANTATION [] stocks such as BLD Plantation down 39 sen to RM9.51 and United Plantation down 34 sen to RM23.84. Oriental Holdings fell 27 sen to RM6.07, MBM Resources also 27 sen lower at RM4.62 and Genting 26 sen to RM10.46.



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Market Commentary

The FBM KLCI index gained 2.11 points or 0.14% on Friday. The Finance Index fell 0.04% to 13861.51 points, the Properties Index up 0.30% to 1040.31 points and the Plantation Index rose 0.31% to 8630.99 points. The market traded within a range of 6.02 points between an intra-day high of 1559.64 and a low of 1553.62 during the session.

Actively traded stocks include CSL, NICORP, HIBISCS-WA, IFCAMSC, TMS, AXIATA, HARVEST-WA, TIGER, ENVAIR and YTL. Trading volume decreased to 1695.08 mil shares worth RM1941.07 mil as compared to Thursday’s 1951.41 mil shares worth RM2109.15 mil.

Leading Movers were IOICORP (+10 sen to RM5.43), MAYBANK (+7 sen to RM8.77), AXIATA (+6 sen to RM5.15), YTL (+8 sen to RM1.50) and TENAGA (+6 sen to RM6.25). Lagging Movers were GENTING (-26 sen to RM10.46), CIMB (-10 sen to RM7.06), SIME (-3 sen to RM9.60), AMMB (-4 sen to RM6.03) and PBBANK (-2 sen to RM13.66). Market breadth was positive with 425 gainers as compared to 373 losers. -- JF Apex Securities Bhd



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Flash: Maxis 4Q earnings up 47.5% to RM900m, 16c dividends

KUALA LUMPUR (Feb 24): Maxis Bhd’s earnings jumped 47.5% to RM900 million in the fourth quarter ended Dec 31, 2011 from RM610 million a year ago.

The company had on Friday also declared dividends totaling 16 sen per share. It declared a fourth interim single-tier tax exempt dividend of 8.0 sen per share for FY ending Dec 31, 2011 to be paid on March 30. It also proposed a final single-tier tax exempt dividend of 8.0 sen per share for FY11.

Maxis said its 4Q revenue inched up 1.9% to RM2.265 billion from RM2.31 billion. Earnings per share were 12 sen compared with 8.10 sen.

For FY11, it earnings rose 10.1% to RM2.527 billion from RM2.295 billion while revenue dipped 0.7% to RM8.80 billion from RM8.869 billion.



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Tenaga, Sime, 1Malaysia Devt, CI Holdings bid for Prai power project

KUALA LUMPUR (Feb 24): TENAGA NASIONAL BHD [], Sime Darby Energy Bhd, 1Malaysia Development Bhd and CI Holdings Bhd are among the 33 companies which had submitted their pre-qualification statement for the Prai combined cycle gas turbine power project.

According to the Energy Commission, it had on Feb 29 received pre-qualification statements from 33 out of 38 participants who purchased the RFQ document. The 33 participants comprised of the 18 consortia and sole bidders.

The EC said all submissions would have to go through an evaluation process and the short-listed bidders would be announced after March 19.

1Malaysia Development Bhd and Hyundai Engineering & CONSTRUCTION [] Co Ltd
CI Holdings Berhad, Teknologi Tenaga Perlis Consortium and Daelim Industrial Co. Ltd
Drayclass (M) Sdn Bhd and Ssangyong Engineering & Construction Co Ltd
First Northeast Electric Power Engineering Co ( NEPC ), Ranhill Power Sdn Bhd, RAMUNIA HOLDINGS BHD [] and Maser (M) Sdn Bhd
International Company for Water and Power Projects (ACWA)
Jimah Energy Ventures Sdn Bhd
KNM Process System Sdn Bhd and Lanco Infratech Limited
Majulia Sdn Bhd and Country Earth Sdn Bhd
Malakoff Corporation Berhad, Petronas Power Sdn Bhd and Mitsubishi Corporation
Mastika Lagenda Sdn Bhd
Mitsui & Co. Limited and Amcorp Power Sdn Bhd
Mudajaya Corporation Berhad and Sinohydro Corporation Limited
N.U.R Power Sdn Bhd and Samsung C & T Corporation
Pendekar Power Sdn Bhd
Sime Darby Energy Sdn Bhd
SRC International Sdn Bhd
Tenaga Nasional Berhad
YTL Power International Berhad and Marubeni Corporation



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Telekom 4Q earnings jump 49% to RM598m, boost from deferred tax income

KUALA LUMPUR (Feb 24): TELEKOM MALAYSIA BHD []’s earnings jumped 49% to RM598.30 million in the fourth quarter ended Dec 31, 2011 from RM400.63 million a year ago, largely due to the recognition of deferred tax income on unutilised tax incentives in the current year quarter.

It said on Friday that its revenue rose 5.4% to RM2.447 billion from RM2.32 billion. Its earnings per share were 16.70 sen compared with 11.20 sen.

TM proposed a capital repayment to its shareholders of about RM1.073 billion or 30 sen per share. It also proposed a final single tier dividend of 9.8 sen per share.

Commenting on the revenue, TM said it was driven mainly by the Internet and multimedia and other telecommunications related services, which mitigated the impact of lower revenue from voice and non-telecommunications related services.

It said revenue from the Internet and multimedia services rose 24.0% to RM541.3 million due to increased broadband and UniFi customers to 1.69 million and 236,501 respectively in the current quarter from 1.68 million and 32,896 respectively in the corresponding quarter in 2010.

Other telecommunications related services registered 26.2% growth in revenue to RM424.1 million primarily due to higher revenue from customer projects.

TM said despite higher revenue, its operating profit before finance cost of RM265.7 million was 34.9% lower from RM408.3 million a year ago. The reason was due to lower other gains from the disposal of investments of RM5.5 million in the current quarter compared to RM215.4 million a year ago.

The higher gains recorded in fourth quarter last year was due to the disposal of Axiata shares.

As for net profit, it said the increase was largely due to the recognition of deferred tax income on unutilised tax incentives in the current year quarter.

For FY11, TM said its earnings slipped 1.28% to RM1.190 billion from RM1.206 billion though revenue had risen 4.1% to RM9.150 billion from RM8.791 billion.

It said the lower earnings were mainly due to lower other gains and unrealised foreign exchange loss on translation of foreign currency borrowings. This was mitigated by the recognition of deferred tax income on unutilised tax incentives.

“The group recorded an unrealised foreign exchange loss on borrowings of RM58.6 million in the current financial year as compared to a gain of RM303.7 million in the preceding financial year,” it said.

As for the higher revenue in FY11, it said this was mainly due to higher revenue from Internet and multimedia, data and other telecommunications related services, net of lower voice revenue.



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Telekom Malaysia proposes capital repayment of 30 sen per share

KUALA LUMPUR (Feb 24): TELEKOM MALAYSIA BHD [] has proposed a capital repayment to its shareholders of about RM1.073 billion or 30 sen for each ordinary share of RM1 each.

“Together with the final single tier dividend for the financial year ended Dec 31, 2011 of 9.8 sen per share which the board will recommend at TM’s forthcoming AGM, a total cash distribution of approximately RM1.423 billion or 39.8 sen per TM share will be made to shareholders,” it said on Friday.

TM said the proposed capital repayment will be implemented by reducing the issued and paid-up share capital of whereby the par value of each share will be reduced from RM1 to 70 sen per share.

The total number of ordinary shares of TM in issue will remain unchanged at 3.577 billion shares.

“The cash distribution to be made under the proposed capital repayment will be funded through the TM group’s existing cash balances, which stands at RM4.213 billion as at Dec 31, 2011,” it said.



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Kossan 4Q earnings dip to RM24.28m, FY11 RM92.9m

KUALA LUMPUR (Feb 24): KOSSAN RUBBER INDUSTRIES BHD []’s earnings fell 17.5% to Rm24.28 million in the fourth quarter ended Dec 31, 2011 from RM29.45 million a year ago as the gloves division was impacted by the high price of natural latex in 2011.

It said on Friday that its revenue was higher by 11.2% to RM281.53 million from RM252.97 million. Earnings per share were 7.46 sen compared with 9.15 sen.

For FY11, its earnings fell 18.3% to RM92.97 million from RM113.76 million in FY10. Its revenue increased 4.3% to RM1.092 billion from RM1.046 billion

On the prospects, Kossan said the technical rubber products division was growing steadily and the group was penetrating into projects for infrastructure products and more orders from overseas.

“In the gloves division, demand for gloves remains strong and vibrant. Management is positive the gloves division will continue to garner higher turnover and profit before taxation for financial year 2012,” it said.

Kossan added the ratio of turnover in this division is 60% natural latex and 40% nitrile latex gloves.

“An additional nine new single formers lines is expected to be ready by April 2012 with a capacity of 1.25 billion pieces per year. Turnover for total nitrile gloves is expected to move towards 48% and with higher profit margin; the group sees positive movement in profit before taxation,” it said.



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KLCI range bound, Genting weighs

KUALA LUMPUR (Feb 24): The broader market was cautious in the morning session on Friday, with investors taking profit on recent gains ahead of the weekend despite the positive key regional markets.

With the eurozone not yet out of the debt crisis, another issue was the high oil prices which would put the brake on the flagging economies. US light crude oil was up 58 cents to US$108.41 while Brent crude rose 45 cents to US$124.07

At 12.30pm, the FBM KLCI was down 1.99 points to 1,554.67. Turnover was 745.19 million shares valued at RM717.18 million. There were 289 gainers, 383 losers and 326 counters unchanged.

Among the regional markets, Japan’s Nikkei 225 rose 0.23% to 9,617.50, Shanghai’s Composite Index added 0.32% to 2,417.15, Taiwan’s Taiex 0.09% to 7,944,28, South Korea’s Kospi 0.35% to 2,014.83 and Singapore’s STI 0.08% to 2,970.65. However, Hong Kong’s Hang Seng Index fell 0.10% to 21,359.90.

At Bursa Malaysia, GENTING BHD [] was the biggest drag on the KLCI, falling 26 sen to RM10.46 and pushing the KLCI down 2.27 points.

CIMB fell 10 sen to RM7.06, pushing the index down 1.76 points. AMMB fell seven sen to RM6, Sime three sen to RM9.600 and YTL Power two sen to RM1.88.

MSC was the top loser, down 42 sen to RM4.16 while recent gainers Oriental fell 27 sen to Rm6.07 and Nestle 14 sen to RM55.66.

Tenaga rose five sen to RM6.24, PPB 20 sen to RM17.14, Maybank and Axiata two sen each to RM8.72 and RM5.11.

China Stationery, which was listed on Friday, rose 13 sen to RM1.08 and it was the most active with 103.23 million shares done.

Harvest rose 15.5 sen to 97 sen and the warrants 14.5 sen to 74 sen.



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YTL Cement seeks suspension of shares

YTL Cement Bhd has requested for suspension of trading in its shares from 9am on Feb 29, 2012 pursuant to Paragraph 16.02(3) of the Main Market Listing Requirements.

In a filing to Bursa Malaysia, YTL Cement said the suspension was related to its previous announcement on unconditional share exchange offer from YTL Industries Bhd.

It said YTL Industries has offered to acquire the entire equity interest and all outstanding irredeemable convertible unsecured loan stocks in YTL Cement.

At 11.40am, its share price stood at RM4.64, down by six sen, after opening eight sen lower at RM4.62. -- Bernama



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KL shares lower at mid-morning trade

Share prices on Bursa Malaysia were lower at mid-morning today, weighed down by losses in selective blue-chips like CIMB, Sime Darby, Genting and AirAsia, dealers said.

At 11.05am, the FBM KLCI was 1.29 points lower at 1,555.37, after opening 0.47 point higher at 1,557.13.

CIMB fell three sen to RM9.60, Sime Darby eased six sen to RM7.10, Genting lost two sen to RM10.52 and AirAsia declined one sen to RM3.57.

The Finance Index dropped 12.43 points to 13,855.24 and the Plantation Index fell 15.79 points to 8,588.12.

The Industrial Index, however, rose 0.57 point to 2,866.80.

The FBM Emas Index dropped 4.63 points to 10,774.0 and the FBM ACE Index decreased 2.18 points to 4,674.20.

The FBM Mid 70 Index was up 3.62 points to 12,199.38.

Losers led gainers by 317 to 284 while 280 counters were unchanged. Trading was mild with 495.231 million shares worth RM446.528 million traded.

Among active counters, IFCA MSC and Naim Indah added 1.5 sen each to 13 sen and 43.5 sen, respectively, SAAG Consolidated earned half sen to seven sen and Xidelang was unchanged at 40 sen.

Among heavyweights, Maybank rose two sen to RM8.72, Petronas Chemicals was unchanged at RM6.94 and Maxis was up one sen to RM6.00. -- Bernama



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AirAsia continues downtrend

Budget carrier, AirAsia Bhd, saw continued downtrend in its share trading today, after its net profit for the fourth quarter ended Dec 31, 2011, fell more than 50 per cent to RM135.6 million from RM311.0 million a year ago.

Its revenue stood at RM1.272 billion from RM1.164 billion while its pre-tax profit slid to RM337.859 million from RM388.120 billion. The frills-free airline said its earnings dwindled due to costlier fuel and higher deferred taxation.

For the 2011 full year performance, AirAsia’s net profit dipped to RM564.1 million from 2010 despite a 13 per cent revenue rise to RM4.47 billion from RM3.94 billion. Its pre-tax profit fell to RM794.26 million from RM1.098 billion a year ago.

At 10am today, its share price stood at RM3.55, down by three sen, after opening two sen lower at RM3.56.

OSK Research, however, said AirAsia's catalyst for this year was to crystalise valuations from the upcoming initial public offering of its Indonesian and Thailand associates and the promising joint venture it has in Japan and the Philippines.

"We maintain our "buy" call on AirAsia, with earnings unchanged and the fair value retained at RM4.57," it added in a research note. -- Bernama



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China Stationery jumps in listing debut

China Stationery Ltd, a China-based manufacturer of plastic stationery, jumped 7.4 percent to RM1.02 on its stock-exchange debut at 9.52am.

The company raised RM85.5 million (US$28.4 million) from selling 90 million shares at 95 sen each in its initial public offering. -- Bloomberg



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Green Packet rises as Q4 net loss shrinks

Green Packet Bhd, a wireless Internet services provider, added 1.6 per cent to 64.5 sen as of 9:52 a.m. in Kuala Lumpur.

Its fourth-quarter net loss narrowed to RM29.9 million from RM86.2 million a year earlier, according to an exchange filing. -- Bloomberg



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WCT gains 1.5pc to RM2.69

WCT Bhd gained 1.5 per cent to RM2.69 in Kuala Lumpur trading at 9.52am, set for its steepest increase since Feb. 9.

The builder’s fourth-quarter profit rose 8.5 per cent from a year earlier to RM47.9 million, it said in a statement. -- Bloomberg



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Mudajaya up on Malakoff contract

Mudajaya Group Bhd, a property and construction company, rose 2.4 percent to RM2.95, headed for its largest gain since Feb. 17.

Eversendai Corp, a structural steel contractor, added 1.2 percent to RM1.74, bound for its highest close since Aug. 16.

The companies won contracts from Malakoff Corp to help build a power plant in the southern state of Johor. -- Bloomberg



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YTL Corp rises on 45% Q2 income surge

YTL Corp, a power, property and construction group, rose 2.1 percent to RM1.45 in Kuala Lumpur trading at 9.52am, set for its first gain in four days.

The company’s second-quarter net income expanded 45 percent from a year earlier to RM237.4 million, it said in an exchange filing. -- Bloomberg



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CIMB Research retains trading buy on UOA Development, TP RM1.84

KUALA LUMPUR (Feb 24): CIMB Equities Research said it was retaining its Trading Buy call for UOA Developments Bhd and target basis at RM1.84, which was a 30% discount to its RM2.62 RNAV.

“We are tweaking EPS while hiking up DPS due to the generous payout. Net dividend yield of 7-8% is the highest while P/E is the lowest in our property coverage,” it said on Friday.

CIMB Research said although full-year core net profit missed its forecast by 13%, however, 2011 can still be considered one of UOA Development’s best ever as it achieved record core earnings and new sales.

“The 2011’s RM848 million new sales figure is the group’s highest ever and 2012 should be even better,” it said.

The research house said it was tweaking EPS while hiking up DPS due to the generous payout.

“Net dividend yield of 7%-8% is the highest while P/E is the lowest in our property coverage,” it said.



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Axiata climbs on improved earnings, dividend plan

KUALA LUMPUR (Feb 24): Shares of Axiata Group Bhd climbed on Friday after it reported a stronger set of earnings for FY11 and its dividend of 15 sen per share.

At 9.51am, it was up six sen to RM5.15. There were 3.73 million shares done.

The FBM KLCI rose 1.51 points to 1,558.17. Turnover was 287.81 million shares valued at RM224.33 million. There were 265 gainers, 178 losers and 225 counters unchanged.

Axiata posted net profit of RM544.58 million in the fourth quarter ended Dec 31, 2011 compared with net loss of RM367.04 when it was affected by impairment charge on investment in India.

For FY11, its net profit rose 32.5% to RM2.345 billion from RM1.770 billion. Its revenue increased by 5.29% to RM16.447 billion from RM15.620 billion.

HwangDBS Vickers Research lifted its sum-of-parts based target price to RM5.15.

The research house said it expected medium-to-long term growth should see upside from cost savings in infrastructure sharing and outsourcing, falling capex and reaching a critical mass in data users, resulting in recovering EBITDA margins.



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CSL higher on first trading day on Bursa

KUALA LUMPUR (Feb 24): China Stationery Ltd made a firm debut on Bursa Malaysia on Friday amid a more upbeat outlook for the markets.

At 9.44am, CSL was up six sen to RM1.01. There were 52.85 million shares done.

The FBM KLCI rose 1.76 points to 1,558.42. Turnover was 267.33 million shares valued at RM204.16 million. There were 252 gainers, 163 losers and 220 stocks unchanged.

The Edge Financial Daily said CSL’s debut would mark the return of Chinese companies listing on the local bourse after a long dry spell since January last year.

Analysts said the share price performance of China Stationery may play a role in sustaining the positive sentiment on China-based counters on the local bourse.

However, the stationery manufacturer’s IPO, priced at 95 sen per share, was undersubscribed for the public portion. Only half the public portion of 60 million shares was subscribed by retail investors.



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Malaysia Smelting drops most in 6 months

Shares fall as much as 8.3 per cent, the biggest intraday loss since Aug. 9. Fourth quarter net loss widens to RM45.9m from RM22m a year earlier. -- Bloomberg



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HDBSVR maintains Buy on Maybank, TP RM10.60

KUALA LUMPUR (Feb 23): HwangDBS Vickers Research is maintaining a Buy on MALAYAN BANKING BHD [] and target price of RM10.60 TP (2.3x FY12 BV).

It said on Friday the TP was based on the Gordon Growth Model and assuming 16% ROE, 7% growth, and 10.8% cost of equity. Dividend yield remains attractive at 6%.

HDBSVR said the net profit of RM1.297 billion was driven by higher revenues, albeit the impact was reduced by higher expenses and provisions.

“Excluding one-off adjustments for Takaful operations (under Bank Negara Malaysia’s new framework) and interest income (reversal from FRS139), earnings were in line. Excluding the adjustment, NIM fell over the six month period, indicating continued competitive pressures.

“There was also an adjustment for actuarial transfer from insurance surplus (RM151 million) under non-interest income that is typically recognised at the end of the financial period,” it said.

The research house said that provisions rose due to larger individual allowances (domestic corporate accounts) and lower recoveries. Gross NPL ratio improved to 2.9%.



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RHB Research upgrades Media Prima from Underperform to market perform, FV RM2.75

KUALA LUMPUR (Feb 24): RHB Research Institute said Media Prima’s 4QFY11 core net profit of RM75 million (up 13.5% on-year; +40.8% on-quarter) was above expectations.

It said on Friday the variance was improved margins due to an unexpected surge in adex demand during November and December, while content costs were contained.

“Given the improving adex outlook amid receding risk of a double-dip global recession, we upgrade Media Prima from underperform to Market Perform.

Fair value raised from RM2.10 to RM2.75 based on 14x (previously 12x) FY12 EPS of 19.7 sen,” said RHB Research.



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RHB Research maintains Outperform on Eversendai, FV RM1.95

KUALA LUMPUR (Feb 24): RHB Research Institute is maintaining its forecasts for Eversendai as it had already assumed RM1.5 billion new jobs in FY12.

“Maintain Outperform. Fair value is RM1.95,” it said on Friday.

RHB Research said Eversendai had secured mechanical equipment and structure erection works worth a total of RM367.4 million for the 1,000MW Tanjung Bin power plant extension project.

“This boosts YTD new jobs secured to RM552 million and outstanding CONSTRUCTION [] orderbook by 20% to RM2.2 billion,” it said.

The research house said the EBIT margin of 12%-15% implied RM44.1 million to RM55.1 million EBIT over the 36-month contract period.



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HDBSVR maintains Hold call on Axiata, but ups TP to RM5.15

KUALA LUMPUR (Feb 24): HwangDBS Vickers Research said Axiata Group Bhd’s 4QFY11 core net profit fell 14% on-quarter to RM585 million, bringing FY11 core earnings to RM2.539 billion (up 2% on-yeary), in line with its and street estimates.

It said on Friday that XL’s core EBITDA was 4% lower on-quarter despite 3% revenue growth (supported by data revenues) mainly due to higher network costs.

“Core EBITDA margin narrowed to 48% from 50%. Celcom recorded 4% higher revenues QoQ, driven by higher subscriptions across the board (+6% prepaid subs, +2% postpaid subs), greater Minutes of Use (postpaid: 366; prepaid: 194) and relatively stable ARPUs,” it said.

HDBSVR said Axiata’s 4QFY11 group tax rate declined to 10% due to RM140m tax incentive for Celcom. The group is proposing a 15 sen final tax exempt DPS, which if approved, would amount to 19 sen FY11 DPS, a substantial 60% payout from its current 30% policy.

“We expect near term EBITDA margins to likely see some compression arising from a growing portion of data-based revenue (which fetch lower margins). Capex is expected to be RM4.4 billion, with XL taking the lion’s share (RM2.5 billion).

“We cut FY12-13F earnings by 7% each due to: (i) larger-than-expected decline in Celcom prepaid and WBB ARPUs from intense competition; and (ii) lower EBITDA margins from increasing data contributions. Earnings impact will be mitigated as the effective tax rate on Celcom is expected to be 23% (vs normal corporate tax of 25%) from last-mile broadband investment incentives,” it said.

HDBSVR said it expected medium-to-long term growth should see upside from cost savings in infrastructure sharing and outsourcing, falling capex and reaching a critical mass in data users, resulting in recovering EBITDA margins.

As a result, it lifted its sum-of-parts based target price to RM5.15.



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CIMB Research ups IOI Corp’s earnings but keep underperform call

KUALA LUMPUR (Feb 24): CIMB Equities Research said IOI Corp’s 1HFY6/12 results were in line with expectations, at 51% of its and consensus full-year forecasts.

It said on Friday that also in line was the 7.0 sen interim dividend.

“We raise our FY12 earnings by 2.5% for higher FFB output, which more than cover our cut in manufacturing earnings.

“IOI Corp remains an Underperform as its valuations are rich relative to the market and its manufacturing margin may be hurt by rising competition,” said CIMB Research.



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