HDBSVR: Malaysian equities may face pressure

KUALA LUMPUR: Hwang DBS Vickers Research said the profit-taking activities on Wall Street overnight may put the Malaysian bourse under pressures with the benchmark FBM KLCI likely to back off from its immediate resistance barrier of 1,580 ahead.

In its market outlook on Wednesday, HDBSVR said in terms of news flows, of probable interest is an insight into Bank Negara Malaysia’s projections on GDP growth rate and inflation, which will be revealed in the central bank’s 2011 annual report due for release this evening.

On the corporate front, there could be share price actions in the following counters: (a) KL Kepong, after disposing of its retailing business of personal care products for RM465 million; (b) Fajarbaru, which has received a letter of award for a CONSTRUCTION [] job worth RM73 million; and (c) TA Enterprise, as its latest financial results came in below par.

Berjaya Sports Toto is scheduled to announce its earnings report card later Wednesday.



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TA Enterprise’s Sydney launch a success

TA Enterprise Holdings Bhd (Dec 27, 58 sen)
Maintain buy at 59 sen with a target price of RM1.10: Net profit for 9MFY12 of RM72 million is 70% of our FY12 profit, led by higher hotel and broking income. Net profit for 3QFY12 fell 55% quarter-on-quarter (q-o-q) after a RM15 million foreign exchange translation loss on financing activities and higher effective tax rate (29%) due to underprovision in previous years. As expected, property contribution remained small at 3% of total earnings before interest and tax. Bursa Malaysia’s trading volume in the August to October quarter rose 18% to RM1 billion and value was up 3% to RM1.6 billion. As a result, broking income grew 18%. No dividends were declared in the quarter.

TA Global (TAG) launched the first parcel of Little Bay Cove, Sydney, Australia, in December. Called “The Solis”, the 45 apartments were offered at prices starting from A$495,000 (RM1.6 million) each. Registrations in Sydney and Malaysia have been encouraging so far. This is TAG’s maiden venture in the Australian property market.

Our RM1.10 sum-of-parts-based target price is based on 45% discount to realisable net asset value for property and 0.8 times price-to-book value (P/BV) for broking. TAG’s future property launches in Malaysia and overseas could be earnings and rerating catalysts. Its current project in Malaysia is Damansara Avenue with about RM1.3 billion in gross development value, while its projects in Canada are expected to rake in RM400 million and Australia RM900 million.
Future developments, including the 0.9ha parcel in a prime KLCC area and 1.2ha in Bukit Bintang, will further unlock its land values. Its broking business may be valued higher, as Singapore’s UOB recently offered to buy Innosabah Securities at 1.4 times P/BV. — HwangDBS Vickers Research, Dec 27


This article appeared in The Edge Financial Daily, December 28, 2011.



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TA Enterprise 3Q net profit dips 26.57% to RM11.73m on higher forex loss

KUALA LUMPUR (Dec 23): TA ENTERPRISE BHD [] net profit for the third quarter ended Oct 31, 2011 fell 26.57% to RM11.73 million from RM15.98 million a year earlier, weighed mainly by the increase in foreign exchange translation losses recorded in TA Global Group on financing activities.

The company said on Friday that its revenue for the quarter rose 12.9% to RM173.1 million from RM153.29 million in 2010.

Earnings per share for the quarter fell to 0.69 sen from 0.93 sen, while net assets per share was 92 sen.

For the nine months ended Oct 31, TA Enterprise posted net profit RM71.69 million compared to RM49.1 million while revenue rose to RM503.82 million from RM439.19 million in 2010.

Reviewing its performance, TA Enterprise said it recorded lower contributions from both the stockbroking arm and TA Global Group in the current quarter, as compared to the previous year’s corresponding period.

Although TA Global Group enjoyed higher interest income from financial receivables, and higher hotel profits in line with the increase in the number of hotels in operation subsequent to the group’s hotel acquisition exercises, the group recorded lower contribution from the property development arm, and high foreign exchange translation losses, it said.

On its prospects, TA Enterprise said global economic risk continued to weigh on regional growth prospects given the slow economic recovery in the US and sovereign-debt woes in Europe.

“Our local stock market activities have slowed down in the past few months but we anticipate market sentiments to moderately improve in the last quarter.

“Contributions from the group’s property divisions will continue to be positive despite growing uncertainties in the global economic landscape,” it said.

The company said domestic economy was expected to be resilient supported by accelerated government spending under the Economic Transformation Programme.

“Barring any unforeseen circumstances, the group is expected to show satisfactory performance in the current financial year,” it said.



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CIMB Research has technical buy on TA Enterprise at 61.5 sen

KUALA LUMPUR (Nov 18): CIMB Equities Research has a technical buy on TA Enterprise at 61.5 sen at which it trading at a price to book value of 0.7 times.

It said on Friday that TA Enterprise broke out of its medium term downtrend channel on Thursday.

“Looking at the chart, we think this rally could be extended. If we are right, prices are likely to edge closer towards 65 sen and 67.5 sen soon. The 200-day SMA at 67 sen is also a magnet for prices,” it said.

CIMB Research said the MACD histogram bars have returned to the black while RSI is also rising. This shows that the bulls are beginning to flex their muscles.

“Traders may start to nibble now to ride this breakout run. However, always put a stop at below 59 sen, just in case,” it said.



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CIMB Research has technical buy on TA Enterprise

KUALA LUMPUR (Nov 10): CIMB Equities Research has a technical buy on TA Enterptise at 59.5 sen at which it is trading at a price-to-book value of 0.7 times.

It said on Thursday that it appears that TA is now testing its downward slopping resistance trend line, looking eager to breakout. Prices held above its moving averages and are now attempting to push further.

“Once the 59.5 sen resistance is taken out, expect buying momentum to pick up strongly. The next upleg is going to lift prices towards 67 sen to 68 sen, where the latter is its 200-day SMA,” it said.

CIMB Research said the MACD signal line has staged a positive rollover while RSI has also hooked upwards once more. A slip below the recent swing low of 55.5 sen would trigger its stop.