CIMB Research has technical sell on Axiata

KUALA LUMPUR (Nov 22): CIMB Equities Research has a technical sell on Axiata Group at RM4.71 at which it is trading at a FY12 price-to-earnings of 13.9 times and price-to-book value of 2.1 times.

It said on Tuesday the rebound from its RM4.43 low reached the 61.8% FR of the July-August correction, suggesting that this upleg is probably may have found a short term top at RM5.

“Yesterday’s move lower took prices below its key moving averages. Indicators are showing signs of exhaustion with its MACD just confirming its dead crossover while the RSI has hooked lower.

“The stock remains a sell now with a buy stop placed above RM5.05. We expect prices to test the August low of RM4.38. The next support is at RM4.20-4.05. After that, there is no strong support until RM3.50,” it said.



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KLCI extends losing streak as Asian markets fall

KUALA LUMPUR (Nov 22): The FBM KLCI continued its losing streak on Tuesday, weighed by losses at blue chip stocks in line with the retreat at global markets and overnight fall at Wall Street.

Asian shares fell on Tuesday as fears about the ability of politicians on either side of the Atlantic to tackle huge debt burdens sapped investors' confidence in riskier assets, according to Reuters.

At 9.05am, the FBM KLCI fell 4.43 points to 1,429.65.

Losers led gainers by 170 to 37, while 87 counters traded unchanged. Volume was 48.81 million shares valued at RM16.29 million.

Among the early decliners were HLFG, Public Bank, MISC, Genting, Axiata, Harvest Court, Top Glove, Supermax and DRB Hicom.



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CIMB Research maintains Buy on Alam Maritim, lower target price RM1.20

KUALA LUMPUR (Nov 22): CIMB Equities Research is maintaining a Buy recommendation on Alam Maritim but a a lower target price of RM1.20.

It said on Tuesday that Alam Maritim stayed on the recovery path in 3Q11, with a net profit of RM13 million that took nine-month bottomline to RM13.6 million.

“However, it was way below expectations, at only 18% of our full-year forecast and 25% of consensus estimates. We had overestimated contributions from the pipe installation business,” it said.

CIMB Research has slashed its FY11 forecast by 64%. It also scaled back the FY12-13 forecasts by 14%-15% and target price reduced from RM1.50 to RM1.20.

“Although FY11 is a washout year, Alam remains a BUY as the pipe installation business could still surprise on the upside next year,” it said.



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RHB Research cuts MAS fair value by 27% to RM1.04

KUALA LUMPUR (Nov 22): RHB Research Institute has reduced the indicative fair value for MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) by 27% from RM1.43 to RM1.04 based on 1.5 times book value of 69 sen, in line with its regional peers

It said on Tuesday that MAS’s 9MFY12/11 results came in below expectations with a core net loss of RM1.034 billion (excluding RM212.5 million in derivative losses).

RHB Research said the losses “already exceeded our full-year net loss forecast of RM967.2 million as well as the market’s full-year net loss forecast of RM970.6 million”.

The research house also pointed out that and MAS expects “4Q operational results to be weaker than 3Q”.

It believed the key variance against its forecast came from MAS’ inability to contain the escalation in fuel and non-fuel costs.

The research house added that MAS also spoke about chopping unprofitable routes, expanding higher-yielding Asian routes and accelerating the return of ageing aircraft to improve fuel burn. It will be announcing a comprehensive business plan next month.

“Having reflected higher fuel and non-fuel costs, we now project MAS to report a larger net loss of RM1.257 billion in FY12/11 vis-a-vis RM967.2 million net loss we projected previously. For the same reason, FY12/12-13 net profit forecasts are cut by 53%-63%,” it said.



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TSH Res gains on bonus issue plan

TSH Resources Bhd, a Malaysian palm oil producer, rose to a one-week high in Kuala Lumpur trading after proposing a one-for-one bonus share issue.

The stock gained 1.6 percent to RM3.73 at 9:02 a.m. local time, set for its highest close since Nov. 14. -- Bloomberg



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MAA climbs on doubling Q3 income

MAA Group Bhd rose the most in three weeks in Kuala Lumpur trading after its third-quarter net income almost doubled from a year earlier to 35.7 million ringgit.

The stock climbed 2.3 percent to 44 sen at 9:02 a.m. local time, set for its steepest gain since Nov. 2. -- Bloomberg



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MIDF Research raises target price for JT International to RM6

KUALA LUMPUR (Nov 22): MIDF Research has maintained its Neutral rating on JT INTERNATIONAL BHD [] (JTI) but raised its target price for the stock to RM6 (from RM5.50) based on discounted cash flow valuation, with a lower WACC of 10.9% from 11.1%.

The research house said on Tuesday that as at-end Sept 2011, JTI’s net cash fell to RM189.9 million from RM240 million as at-end June 2011.

“We are ruling out the possibility of JTI declaring a special dividend payout in FY11.

“Currently, we are maintaining our FY11f gross dividend per share to 40 sen which translates into yield of 5.1% based on the current price,” it said.



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RHB Research maintains Outperform on Eversendai

KUALA LUMPUR (Nov 22): RHB Research Institute is maintaining its Outperform call on Eversendai with a fair value of RM1.95.

It issued the report on Tuesday following the company’s announcement about securing a RM132 million Manjung power plant contract.

Eversendai was awarded by Alstom for the “mechanical erection for the boiler and auxiliary equipment” worth RM132 million of the 1 x 1,000MW Manjung coal-fired power plant extension project.

RHB Research said the latest contract has boosted Eversendai’s year-to-date new contracts secured to RM973 million and outstanding CONSTRUCTION [] orderbook by 9% from RM1.5 billion to RM1.63 billion.

“Assuming an EBIT margin of 12%-15%, the contract will fetch RM15.8 million to RM19.8 million EBIT over the contract period.

“Forecasts are maintained as we have already assumed in our forecasts Eversendai to secure RM1.4 billion worth of new jobs in FY12/11,” it said.



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