Tuesday, 16 December 2014

Petronas Gas becomes controlling shareholder of Dialog's PLNG-2 unit

KUALA LUMPUR (Dec 16): Petronas Gas Bhd (PetGas) is now the controlling shareholder in Pengerang LNG (Two) Sdn Bhd (PLNG-2), a special vehicle which used to be wholly owned by Dialog LNG Sdn Bhd, which is in turn a wholly owned unit of Dialog Group Bhd. 

In a Bursa Malaysia filing this afternoon, Dialog said PLNG-2 has ceased to be a subsidiary of Dialog Group following PetGas' subscription of 780,000 ordinary shares - representing a 72.22% stake in PLNG-2 - for RM780,000, cash. This means that Dialog LNG now only holds 27.78% in PLNG-2.

"The intended equity shareholding of PetGas of 65% and Dialog LNG of 25% in PLNG-2, as earlier announced, will be achieved upon subscription by State Secretary, Johor (Incorporated) (SSI) of its 10% shareholding, which is expected in 2015," said Dialog in its filing. 

According to the shareholders' agreement signed on Nov 14 this year, PLNG-2 will be restructured whereby PetGas will acquire 65%, Dialog LNG to hold 25% and the SSI to hold the remaining 10%.

PLNG-2 will develop the liquefied natural gas (LNG) regasification facilities comprising of a regasification unit and two units of 200,000 m3 LNG storage tanks with an initial send out capacity of 3.5 million tonnes per annum of natural gas at Pengerang, Southern Johor, for about RM2.7 billion. 

As at 3pm, Dialog shares were four sen lower at RM1.28 with a market capitalisation of RM6.34 billion. PetGas was four sen down at RM21.20, giving it a market capitalisation of RM42.07 billion. 

SP Setia Q4 earnings slightly higher at RM131.3m

KUALA LUMPUR: SP Setia Bhd’s earnings rose nearly 1.3% to RM131.31mil in the fourth quarter ended Oct 31, 2014 from RM129.64mil a year ago underpinned by the strong sales for its international projects.

“The group achieved RM922mil sales in Q4 of FY2014, bringing total sales for the group for the full financial year to RM4.62bil and total unbilled sales to RM11.10bil,” it said on Tuesday.

The property developer reported revenue rose 27.7% to RM1.233bil from RM965.68mil a year ago. Its earnings per share was 5.19 sen compared with 5.27 sen.

It rewarded shareholders with a dividend of 5.7 sen a share.

SP Setia said the international projects contributed RM1.80bil (39%) towards the group’s total sales for the current financial year. 

Sales contribution from the group’s international projects continue to be strong and further underscores the management’s deep conviction to venture into international projects in established global cities like London and Melbourne. 

On the Malaysian projects, it said despite the period of softness following the implementation of the property cooling measures implemented by Bank Negara Malaysia at the beginning of the financial year, the group posted a satisfactory result of RM2.82bil sales. 

SP Setia said there was strong support for its launches during the financial year focusing on land banks with ready infrastructure and amenities like Setia Alam and Setia Eco Park. 

“Projects such as Setia EcoHill and Setia Eco Glades will benefit from new infrastructure projects including the Klang Valley Mass Rapid Transit (KVMRT) project,” it said.

For the financial year ended Oct 31, 2014, its earnings were RM405.67mil, which was 3% lower when compared with RM418.35mil in the previous financial year. However, its revenue rose 16.8% to RM3.810bil from RM3.261bil a year ago.

SP Setia’s acting president and CEO Datuk Voon Tin Yow said its sales performed well due to the strong and loyal customers who continue to believe in our brand. 

“On the international front, S P Setia continues to obtain high brand acceptance among the locals in London, Melbourne and Singapore. 

“As for Malaysia, we are confident that once the market stabilises, aggressive demands for properties will return as Malaysia is a young nation with a growing population,” he said.

Top Glove 1Q net profit falls 3% on year to RM49m, revenue lower at RM568m

KUALA LUMPUR (Dec 16): Top Glove Corp Bhd reported a 3% drop in first quarter net profit from a year earlier as cheaper raw materials led to lower average selling prices (ASP) for its products.

Higher finance cost, and associate losses also curbed profit growth, Top Glove told the bourse today.
Top Glove said net profit fell to RM48.68 million in the first quarter ended November 30, 2014 (1QFY15) from RM50.28 million.

Revenue was lower at RM567.63 million compared to RM573.99 million, "largely owing to a lower ASP from decreasing raw material prices," Top Glove said.

"Intense competition in the nitrile glove segment also hampered cost past-through and resulted in weaker margins," Top Glove said.

Natural rubber, and synthetic rubber or nitrile are crucial raw materials for rubber glove production. Nitrile is derived from crude oil, prices of which, have fallen substantially.

Top Glove is expanding its nitrile glove production. The firm said the expansion included higher capacity at its factory in Lukut, Negeri Sembilan and another in Klang, Selangor.

According to Top Glove, the expansion will grow its total annual capacity to 44.6 billion pieces of gloves a year from 42.6 billion.

"The group expects the glove business environment to remain competitive and challenging.

"However, with better cost-discipline and cost-optimisation practices via continuous automation in place, coupled with an unwavering focus on quality across all aspects of its operations, the group is confident of navigating its way through this challenging time, to deliver an improved performance in the quarters ahead," Top Glove said.

Danajamin, OCBC guarantee Berjaya Land’s RM650m debt notes

KUALA LUMPUR: Danajamin Nasional Bhd and OCBC Bank (Malaysia) Bhd (OCBC) will guarantee Berjaya Land Bhd’s (BLand) RM650mil 10-year medium term notes (MTN) programme.

Danajamin, which is the country’s financial guarantee insurer, said on Tuesday it guaranteed the RM500mil tranche with a longer tenure of 10 years. 

OCBC Malaysia provided the guarantee for the remaining tranche of RM150mil with a tenure of up to six years.

Both tranches, rated at AAA(fg) and AAA(bg) rating respectively, were issued on Tuesday and were fully subscribed.

Proceeds raised from the bonds issuance will go towards BLand’s investments in its hospitality and integrated development businesses, and also the refinancing of its existing borrowings. 

B-Land is an intermediate investment holding company within the Berjaya group, and is mainly involved in hotel and recreation activities, property development, gaming and investments.

AmInvestment Bank Bhd is the sole principal adviser and lead arranger for the transaction. 

Danajamin said it has provided guarantees for RM7.6bil bond and Sukuk programmes, which included the latest guarantee for BLand.

SE Asia Stocks- Extend declines on emerging markets sell-off

JAKARTA (Dec 16): Southeast Asian stock markets slumped on Tuesday after emerging market currencies were hit by global risk aversion, triggered by a sharp decline in the Russian rouble.

"Conditions in Russia pushed investors to return to holding U.S. dollar, which hurt local currencies and stock markets in the region," said Muhamad Alfatih, an analyst with Samuel Sekuritas in Jakarta.

The Russian central bank on Tuesday sharply hiked interest rates to halt a collapse in the rouble. Before the hike, the currency hit a record low on plunging oil prices and sanctions linked to the Ukraine crisis.

Shares in Bangkok led the regional decline with a 2.4 percent loss led by energy and banking stocks. The index is down for the sixth consecutive session.

Thai stock exchange data shows foreign investors have been net sellers in the past four sessions to Monday with a total outflow of 14 billion baht ($424.50 million).

Thailand's central bank said it has not seen "unusual capital outflow" and is not planning to take measures to support the baht.

The Indonesian stock index fell as much as 2 percent to its lowest in five weeks after the rupiah hit 12,950 against the dollar earlier in the day, its lowest since August 1998. The index extended a 1 percent loss from the previous session.   

Philippine stocks fell 1.1 percent while Singapore's Straits Times Index lost nearly 2 percent. – Reuters

Mainly Ananda Krishnan owned Bumi Armada to be taken private again?

PETALING JAYA: Bumi Armada Bhd’s tumbling share price and the sudden departure of its chief executive officer on Dec 5 is fuelling talk that the company could be taken private again. 

The oil and gas services company’s main shareholder T Ananda Krishnan has a track record of de-listing companies when times are bad and taking it back to the market when conditions and valuations improve.

Ananda’s chief corporate lieutenant Ralph Marshall declined to comment on the matter when contacted by StarBiz.
“Sorry, I cannot comment. I don’t know anything about Bumi Armada,” he said.

But the prospect of a fresh corporate exercise is keeping its share price afloat above the RM1 level.
Maybank IB Research, in a recent report, did not rule out a potential privatisation for the stock, as it was trading at around one time book value.

Operationally, it said it liked Bumi Armada’s floating production, storage and offloading (FPSO) business model in light of the current weak/volatile oil market environment while valuation-wise, it was inexpensive to growth.

Another analyst agreed that the company’s fundamentals were doing well and that he also would not be surprised by a move to privatise the company.
“There is value in it, just that the share price is down for now,” he said.
Ananda had previously delisted and relisted companies under his stable including Astro Malaysia Holdings Bhd, Maxis Bhd and Bumi Armada.
“It has happened before and I don’t think anyone will be surprised if it happens again,” said an analyst, who declined to be quoted.
She noted that the company’s fundamentals seemed to be intact, with the recent hit to its share price most likely to be due to poor market conditions.

She said that Bumi Armada had a strong order book with quite a lot of new contracts as well as work-in-progress contracts.
“Everyone knows the earnings will not be immediate but the fundamentals are quite sound. Beside this, FPSO contracts are quite resilient,” she said.

She said another factor that could have affected the stock was CEO Hassan Basma’s resignation.

“We have also seen supposedly substantial shareholders actively selling over the past few months. But again, they seem to be nibbling back their stake,” she observed.

One of Bumi Armada’s shareholders, Ombak Damai Sdn Bhd, had a 7.17% stake on Sept 9 after disposing of 15 million Bumi Armada shares. It continued to pare its stake down to 6.97% in October via three transactions on Oct 1, 3, and 7 that saw it dispose of a total of 297,500 shares.

However, it then bought back some shares on Oct 9, raising its stake to 7.07% currently.

Bumi Armada was taken private by Ananda in 2003. The company, however, was re-listed on Bursa Malaysia in 2011 at an initial public offer price of RM3.03. The stock was last traded at RM1.01 yesterday.

Maybank KE Research maintains Hold on TM

KUALA LUMPUR: Maybank KE Research has maintained its Hold on Telekom Malaysia (TM) with a raised target price of RM7.20 on higher long-term growth assumption to reflect an improvement in TM’s longer-term prospects.

In a note on Tuesday, the research house said its FY14/15/16 net profit forecasts are consequently reduced by 2%/8%/11% respectively.

While the acquisition of a 57% stake in loss-making P1 was completed in Sep 2014, TM intends to only reveal its wireless strategy in 1Q15, it said.

"For now, we expect P1 to roll out its LTE network in 2015-17, with monetisation beginning in 2016. 

"We expect P1 to command 7% mobile data revenue share in 2017. By our estimates, P1 would only achieve break even (at the pre-tax level) closer to 2020," it said.

Maybank believed that a large part of TM’s 2014 share price rally was down to its impending entry into the wireless space (via the acquisition of a 57% stake in P1).

While the concept of convergence (between wireless and fixed) represents an attractive long-term proposition, there are near-term pains, which include the absorption of P1’s losses and additional capex for the LTE network rollout.

"This drag to TM’s P&L and cashflows would begin to manifest in 2015," it said.

Maybank Research retains Buy on Axiata, upgrades Maxis

KUALA LUMPUR: Maybank Investment Bank Research has retained its Buy call on Axiata and upgraded Maxis to a Buy as they would benefit from the implementation of the Goods and Services Tax (GST) when implement in April 2015.

“GST would allow wireless operators a chance to pass on the 6% service tax they currently absorb in the prepaid segment.

 “In reality, the benefits are likely less pronounced given elasticity and competition; we assume operators enjoy the equivalent of a 3% pass-through in service taxes for now,” it said.

Maybank Research said its sector picks are Axiata (maintain Buy, TP: RM7.80) and Maxis (upgrade to Buy, TP: RM7.40). 

"Consequently we raise net profit of Axiata/Digi/Maxis by 2.5%/4.1%/3.2% in 2015, and 3.1%/5.6%/4.3% in 2016 respectively.  

“For sensitivity purposes, every 1% pass-through in prepaid service tax raises net profit of Axiata/Digi/Maxis by 0.8%/1.4%/1.1% in 2015, and 1.0%/1.9%/1.4% in 2016 respectively,” it said. 
Maybank Research said the wireless operators have been absorbing the 6% service tax in the prepaid segment since 1998.

With GST, they can pass on the 6% service tax they currently absorb in the prepaid segment.  The theoretical impact of GST to operators is a direct flow-through of this previously-foregone revenue down to EBITDA. 

The research house explains that in reality, the benefits are likely less pronounced, given 1) the potential elasticity impact (prepaid is a price sensitive segment after all), and 2) possibility of increased competition, which effectively means part of the new-found revenue gets returned back to customers in the form of lower tariffs. 

Operators presently remain non-committal on their intentions with regards to GST treatment.
 “On the back of our earnings upgrades, we raise target prices of wireless operators under our coverage by 3%-7%. Consequently, we upgrade Maxis to BUY (from Hold). Our sector picks are Axiata and Maxis, on the back of their underperformance in 2014,” it added.

Supermax rebounds after plunging 16.5% as chief faces insider trading charge

KUALA LUMPUR (Dec 16): Glove maker Supermax Corp Bhd rebounded six sen or 3.7% after plunging 16.5% yesterday as its chief faces insider trading charges.

The Securities Commission (SC) had charged Supermax executive chairman and group managing director Datuk Seri Stanley Thai for insider trading involving APL Industries Bhd (APLI) shares. APLI is a former unit of Supermax.

The SC also charged Thai's spouse Tan Bee Geok and Bee Geok’s sister Tan Bee Hong for insider trading involving APLI shares.

Today, Supermax was traded at RM1.68 at 10.21am after rising as much as 11 sen or 7% to RM1.73 earlier. The FBM KLCI fell 7.31 points or 0.4%.  

Yesterday, Supermax shares fell 32 sen or 16.5% to close at RM1.62. Weak broader market sentiment also weighed on its share price.

The KLCI declined 35.68 points or 2.06% to close at 1,697.31 points.

In a press statement yesterday, the SC said Thai, 54, was charged at the Kuala Lumpur Sessions Court for communicating non-public information between October 26 and 29, 2007 to Tiong Kiong Choon, a remisier with a stock broking company.

Tiong was earlier charged by the SC last Tuesday at the Kuala Lumpur Sessions Court for disposing of 6.2 million APLI shares on October 26 and 29, 2007 while in possession of the information.

In addition, the SC also charged Thai’s spouse Bee Geok for communicating non-public information to Bee Hong between October 23 and 31, 2007.

The regulator alleged that Bee Hong had on October 31, 2007 sold 350,000 APLI shares held in her account while in possession of the information.

AFG gets Joel Kornreich as new group chief executive officer

TA Securities
(Dec 15, RM4.72)
Maintain “sell” with unchanged target price of RM4.35.
Last Friday, Alliance Financial Group Bhd (AFG) announced the appointment of Joel Kornreich as its group chief executive Officer (CEO). His appointment will take effect on Jan 1, 2015. According to the press release, Kornreich has over 23 years of experience in the financial services industry. Before joining Alliance Bank, he was with Citigroup for 20 years in various roles around the world.

We are excited about this new appointment for AFG. We believe the new CEO can revive AFG’s consumer banking operations and imbue the bank with the wealth of his global experience.  Kornreich is reportedly well-known for his successful management of consumer banking businesses, built around superior service and innovative solutions.

Operationally, we believe AFG continues to lag its peers in the consumer banking space — reporting decreases in the credit card and personal loan segments in 2013 before accelerating only in 2014.  Its mortgage portfolio remained buoyant with growth of 15% to 20% year-on-year (y-o-y). While still eyeing double-digit loan growth, momentum is expected to slow down in the coming quarters.  Housing loans are expected to come off to 11% due to the impact of new regulations to control household debt. The HP portfolio has also been recording average growths of close to 50% y-o-y since 2013.

Its consumer market share is still shy of 3%. AFG accounts for 2.7% of the entire loan market in Malaysia. — TA Securities, Dec 15

This article first appeared in The Edge Financial Daily, on December 16, 2014.

IJM appointed main contractor for WCE

IJM Corp Bhd
(Dec 15, RM6.42)
Upgrade to “buy” with an unchanged target price of RM7.20.
The IJM Construction Sdn Bhd (IJMC)-Kumpulan Europlus Bhd (KEB) joint venture (JV) recently accepted the letter of award (LoA) from West Coast Expressway Sdn Bhd, appointing the JV the engineering, procurement and construction contractor to undertake and complete the construction works for the West Coast Expressway (WCE) from Taiping to Banting for a fixed sum not exceeding RM5 billion.

Pursuant to the LoA, the JV shall award to IJMC the WCE construction works for packages 3,4,5,8 and 9 at a cost not exceeding RM2.83 billion.

The construction period is five years. We are not surprised with the JV appointment as a main contractor as it was announced by KEB that the government had given the nod for the appointment in May this year.

We opine the above appointment could lead to an open tender stage for the remaining RM2.2 billion packages of the WCE project in the coming weeks and the contract award stage in the following months. We do not rule out the possibility of IJM Corp participating in the other work packages. Winning the other work packages could provide an earnings surprise for IJM Corp in terms of higher construction job replenishment and more demand for its industry products.

We make no changes to our earnings forecasts. Going forward, we expect to hear more positive news flow on the WCE development. On its recent share price weakness, we upgrade IJM Corp to “buy” with an unchanged target price of RM7.20. We advise investors to take opportunity to accumulate this stock. — MIDF Research, Dec 15

This article first appeared in The Edge Financial Daily, on December 16, 2014.

Kossan continues landbanking activities

Kossan Rubber Industries Bhd
(Dec 15, RM4.60)
Maintain “buy” with unchanged target price of RM5.05.
Kossan announced last Friday the acquisition of a 13.3 acre (5.38ha) piece of freehold industrial land at Mukim Kapar in Klang, Selangor, for a cash consideration of RM39 million.

The purchase consideration implies a price tag of RM68 per sq ft. This is 40% higher than the price it previously paid for 9.3 acres of industrial land located close by in late 2013.

The acquisition will be funded via internally generated funds and/or bank borrowings, and is expected to be completed by the first quarter of financial year 2015 ending December 2015 (1QFY15).

Funding should not be an issue given the group’s low gearing level of 0.1 times as at end-3QFY14.

We understand the land is located near its existing plants. As such, we believe the site is well connected to necessary infrastructure for glove manufacturing, including natural gas supply. This should reduce the associated execution risks in the construction of new plants.

Management plans to develop this land after it completes the construction of two plants at the adjacent 15-acre site in 2016.

We are positive on this acquisition as it will help the group to achieve its long-term growth plan. Including this site, Kossan has 95 acres of vacant land available to drive its expansion plans.

Management guided that it could put up a warehouse and two plants with total annual capacity of 3.8 billion to  four billion gloves. This represents 18% to 19% of the group’s estimated production capacity at end-2015.
We maintain our “buy” rating on Kossan with an unchanged RM5.05 target price, based on 18 times FY15 earnings per share. We are keeping our earnings forecast unchanged, pending further details on the development plans for the land. — Alliance DBS Research, Dec 15

This article first appeared in The Edge Financial Daily, on December 16, 2014.

Perwaja Steel to undertake retrenchment exercise

PETALING JAYA: Perwaja Holdings Bhd has came out to clarify that its its wholly-owned subsidiary, Perwaja Steel Sdn Bhd (PSSB) has in fact ceased all material operations since August 2013 when its dry gas and electricity supplies were curtailed.

"Given the cessation of operations, PSSB intends to undertake a company-wide retrenchment programme for its employees," it told Bursa Malaysia yesterday.

To date, it said that PSSB has about 1,000 employees under its employment.
"All the employees have been informed on the Proposed Retrenchment Programme, and PSSB is currently undertaking a consultation process with the employees via their appointed representatives."
Perwaja said the financial impact of the proposed retrenchment programme can only be determined once the plan is finalised.

RHB Research upgrades aviation sector to Overweight, top pick AirAsia

KUALA LUMPUR (Dec 16): RHB Research has upgraded the aviation sector to “Overweight” from Neutral and said the slump in oil prices would benefit the aviation sector.

In a note Tuesday, the research house said while it does not see demand growing strongly, sector earnings will be underpinned by yield recovery, with an additional positive impact from lower jet fuel prices.
“As such, we upgrade the sector to Overweight from Neutral.

“AirAsia Bhd is our Top Pick for the Malaysian aviation sector. AirAsia X Bhd remains a Sell as losses will continue into FY15,” it said.

At 10am, AirAsia rose 0.36% or one sent to RM2.81 with 1.37 million shares done while AirAsia X fell 0.73% or half a sen to 68 sen with 969,300 shares traded.

CIMB Research maintains Hold on KLCC Property, target price RM6.90

KUALA LUMPUR (Dec 16): CIMB Research has maintained its “Hold” rating on KLCC Property Holdings Bhd at RM6.50 with an unchanged target price of RM6.90 and said that in the current market conditions, REITs could provide a safe haven for capital preservation given its stable dividend yields.

In a note Tuesday, the research house said during its recent tour of some of KLCCP's assets, it was pleasantly surprised that Menara ExxonMobil still looked relatively new despite being almost 18 years old.

“This gives us confidence that it will not face issues extending its tenancy when it expires in 2017. We were also impressed by Menara 3, which was more recently built (in 2011) and houses Petronas's offices and other O&G companies.

“While the offices were impressive, we understand that KLCCP's acquisition pipeline remain scarce in the next 1-2 years.

“We maintain our Hold call and DDM-based target price of RM6.90. For exposure to M-REITs, we prefer Axis REIT,” it said.

The edge: Hibiscus’ shareholders raised interest, says MD

KUALA LUMPUR: Key shareholders of junior oil and gas exploration company Hibiscus Petroleum Bhd have increased their shareholding since its initial public offering (IPO) in 2011, said managing director Dr Kenneth Pereira.

Pereira, in a written response to a story published by The Edge this week, noted that Hibiscus’ top nine shareholders have been raising their interest in the company since its listing to 67% currently.

According to data presented by Pereira and collected from Bloomberg, as of yesterday, through Hibiscus Upstream Sdn Bhd, the company’s management team held an 18.75% interest in Hibiscus. Its shareholdings rose from an initial 83.61 million shares post-IPO to 167.22 million shares currently.

Several other shareholders in the private oilfield services sector and an investor in technology companies have also accumulated their shareholdings in Hibiscus after its listing in 2011. According to Bloomberg, current substantial shareholders of Hibiscus include Mercury Pacific Marine Pte Ltd (8.17%), Littleton Holdings Pte Lte (5.99%) and Chye Tek Lee (5.06%), among others. Note that Chye is the group chief executive officer and managing director of Singapore-listed Ezra Holdings Limited and also non-executive chairman of EMAS Offshore Limited.

Yesterday, Hibiscus announced to Bursa Malaysia that Datuk Sri Muhammad Syafiq Baljit Abdullah increased his shareholding to 12.78% by acquiring 4.12 million shares from three transactions between Dec 8 and 12, making him the company’s second-largest shareholder. Hibiscus shares shed 6.32% yesterday to close at 89 sen a share, translating into a market capitalisation of RM793.6 million. Year-to-date, the stock has fallen 49.17%.

The story in The Edge highlighted accumulating losses at Hibiscus which may have contributed to the stock’s recent poor performance.

“It is well known and widely reported that the share prices of oil and gas companies have been adversely affected by the slide in oil prices, both in Malaysia and worldwide. We do not understand the grounds for stating that the share price decline is due to accumulating losses when other oil and gas companies are also suffering from price declines,” said Pereira.

He also noted that Hibiscus’ share price has been resilient, substantiated by the fact that even with a 99.6% warrant conversion rate in July 2014, the company’s market capitalisation has been reasonably stable.
Meanwhile, Pereira also emphasised that Hibiscus had drilled two wells from November 2013 to February 2014, culminating in the first offshore discovery in the east of Oman after almost 40 years of exploration in the region by several other companies.

“Our 50% success rate in exploration drilling is significantly higher than the global average, where approximately one out of seven wells are successful,” said Pereira.

This article first appeared in The Edge Financial Daily, on December 16, 2014.

AffinHwang Capital downgrades Unisem to Sell, target price RM1.54

KUALA LUMPUR (Dec 16): AffinHwang Capital Research has downgraded Unisem (M) Bhd to “Sell” (from Reduce) at RM1.83 with an unchanged target price of RM1.54 and said Unisem's stock price has continued to gain positive traction on accumulation by a major shareholder.

In a note Tuesday, the research house said this could be attributed to: 1) its strong 3Q14 results and the possibility of strong earnings delivery in the subsequent quarters; 2) its exposure to the robust RF business; and 3) the potential for a strong DPS in 4Q14.

“However, trading at 17.3x 2015 EPS, and a premium to peers, we believe that good news is already in the price. On a risk adjusted basis, Unisem is the most expensive semiconductor stock under our coverage.
“With good news priced in and limited re-rating catalyst from this point, we turn anti-consensus on the stock, downgrading Unisem to Sell with an unchanged target price of RM1.54,” it said.

BIMB Securities maintains Buy on Dayang, raises target price to RM3.37

KUALA LUMPUR (Dec 16): BIMB Securities Research has maintained its “Buy” rating on Dayang Enterprise Holdings Bhd at RM2.36 with a higher target price of RM3.37 (from RM3.14) after Dayang’s subsidiary, Dayang Enterprise SB has been awarded a contract by Petronas Carigali SB for the provision of brownfield major modification work for Bardegg-2 and Baronia Enhanced Oil Recovery (EOR) development project.

In a note Tuesday, the research house said with this, it had revised its  available FY15/16 forecast higher by 7% respectively.

BIMB Securities said inclusive of this contract, Dayang’s current outstanding orderbook would stand at circa RM4.5 billion, with the HUC contracts portion to provide earnings visibility until 2018.

“Maintain a Buy call with a revised target price of RM3.37 from RM3.14 previously based on higher FY15 EPS of 30.6sen on PER of 11x,” it said.
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