CIMB Research has technical buy on Zelan at 50.5 sen

KUALA LUMPUR (Feb 29): CIMB Equities Research has a technical buy on Zelan at 50.5 sen at which it is trading at a price-to-book value of 1.9 times.

It said on Wednesday that Zelan broke out of its bullish flag pattern on Tuesday on high volume.

“We think it is due for another rebound. However, our strategy here would be to buy on weakness due to yesterday’s strong run-up,” it said.

CIMB Research said the technical reading was improving. MACD histogram bars were falling at a slower pace, suggesting that selling pressure was tapering off. RSI indicator had also hooked upward.

“The 30-day SMA looks like a good support here. We will only review our call if prices broke below this moving average, now at 45 sen. Resistance is seen at the 53 sen and 55 sen levels,” it said.



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HDBSVR sees chance for Malaysian equities to rally

KUALA LUMPUR (Feb 29): HwangDBS Vickers Research said there is a chance for the Malaysian bourse to leap forward on Wednesday.

HDBSVR said that in playing catch-up with its regional peers – which mostly ended higher on Tuesday – the benchmark index could pull away from the first support line of 1,555 ahead.

It said that overnight on Wall Street, main equity bellwethers rose between 0.2% and 0.7% amid hopes that the European Central Bank (ECB)’s long-term refinancing operation scheduled this afternoon would inject more liquidity into the monetary system, thus easing the banks’ funding strains.

At Bursa Malaysia, among the slew of financial result announcements that were releasedon Tuesday, UEM Land and Padini surprised on the upside but Masterskill came in below par.

Other corporate developments that may be of interest include: (a) TSM Global, after receiving a proposal to take over its businesses for RM1.25 per share (versus its last done price of RM1.12); and (b) CWorks, which is in advanced talks to take over a profitable IT company according to one media report.



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CIMB Research maintains Neutral on RHB Capital, TP RM7.50

KUALA LUMPUR (Feb 29): CIMB Equities Research said RHB CAPITAL BHD []’s FY11 net profit met its expectations as it accounted for 97% of its forecast and consensus.

It said on Wednesday that however, net profit growth at only 5.7% was slow, impacted by a margin squeeze that offset the positive effects of swift loan growth.

“We continue to peg the stock to our DDM value. Despite the undemanding valuation, we continue to rate RHB Capital a Neutral on concerns over slowing loan growth and suppressed net interest margins,” it said.

CIMB Research had a target price of RM7.50 for the stock.



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CIMB Research: UEM Land final results way ahead of expectations

KUALA LUMPUR (Feb 29): CIMB Equities Research said UEM Land’s final results were way ahead of expectations and its share price target was RM2.56.

It said on Wednesday the RM2.2 billion new sales notched up in FY11 were also impressive.

“The group has set the bar high for 2012 with headline KPIs of 50% revenue growth, 40% profit growth and 10% ROE. In view of the strong finals and high KPIs, we upgrade UEM Land from neutral to Trading Buy,” it said.

CIMB Research, which has a trading buy, also raised RNAV and EPS for the more ambitious KPIs and balance sheet adjustments.

“Our target price rises because of the higher RNAV and a halving of our RNAV discount to 5%,” it said.



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Stocks to watch: IPPs, Mah Sing, Genting, UEM Land

KUALA LUMPUR (Feb 29): With the current corporate results drawing to an end on Wednesday, investors’ focus would be on the companies with the stronger set of financial results and their prospects for the year ahead as the external and domestic economies slow down.

The important decision would be to pick companies which would be able to ride through slower growth, especially PLANTATION []s and banks with overseas operations.

Among the stocks to watch on Wednesday after independent power producers (IPPs), MAH SING GROUP BHD [], GENTING BHD [] and UEM Land Bhd.

The Energy Commission has invited the first generation of independent power producers to submit their plans to extend the power purchase agreements (PPAs).

These IPPs, whose PPAs were scheduled to end in three to four years, were invited to extend the agreements on condition they would reduce the capacity payments.

Mah Sing Group Bhd posted net profit of RM41.03 million in the fourth quarter ended Dec 31, 2011, up 30.8% from RM31.35 million a year ago, boosted by the property segment.

Its revenue increased by 41% to RM422.12 million from RM299.28 million. Earnings per share were 4.93 sen compared with 3.77 sen. It announced dividend of 11 sen a share.

For FY11, its earnings rose 42.7% to RM168.55 million from RM118.07 million in FY10.

Genting Bhd reported net profit of RM772.91 million in the fourth quarter ended Dec 31, 2011, up 66% from RM465.43 million a year ago.

Its revenue increased by 23.9% to RM5.06 billion from RM4.08 billion. Its earnings per share were 20.94 sen compared with 12.57 sen while it proposed a dividend of 4.5 sen a share.

Group profit before tax was RM1.802 billion, compared with RM1.182 billion a year ago as it included a reversal of RM308.6 million in respect of previously recognised impairment loss relating to the UK casino licenses and a net fair value gain of RM64.4 million on derivative financial instruments.

UEM LAND HOLDINGS BHD [] posted a 3.84% increase in earnings to RM140.56 million for the fourth quarter ended Dec 31, 2011, from RM135.36 million, due to improved performance from the group's various development activities.

It said the board was confident of the group’s prospects in the coming financial year as the on-going projects had unbilled sales of RM1.85 billion as at Dec 31, 2011.

Shareholders of TSM GLOBAL BHD [], who own 28.07% of the paid-up share shares, have offered to acquire all the business, including assets and liabilities, for RM159.24 million or RM1.25 per share.

Property developer, Dijaya Corp Bhd's earnings rose 12.8% to RM39.02 million for the fourth quarter ended Dec 31, 2011, from RM34.59 million a year ago, due to better sales performance and recognition of progress billings from its project launches in 2011.

Revenue was up 53.2% to RM156.19 million from RM101.91 million. Earnings per share were 8.53 sen compared to 7.60 sen a year ago.

KFC Holdings Bhd (KFCH) saw its fourth quarter earnings decline 21.9% to RM38 million from RM48.67 million a year ago.

It said KFC India and KFCH International College continued to incur high initial start-up costs in the current quarter during the gestation period.

QSR BRANDS BHD [] reported net profit of RM38.69 million in the fourth quarter ended Dec 31, 2011, up 9.7% from the RM35.25 million a year ago due to better profits from Pizza Hut Malaysia.

Cafe chain operator Oldtown Bhd recorded RM11.66 million in profits for the fourth quarter ended Dec 31, 2011 as it benefited from an increase in exports of its beverage products and higher selling prices.

Steel contractor Eversendai Corporation Bhd recorded profits of RM36.42 million for the fourth quarter ended Dec 31, 2011, due to higher revenue from current on-going projects. Its revenue was RM313.29 million while earnings per share were 5.41 sen.

For the financial year ended Dec 31, 2011, revenue was RM1.03 billion, while profits were RM119.45 million.

Benalec Holdings Bhd, posted a 52.51% increase in earnings to RM28.84 million for the second quarter ended Dec 31, 2011, from RM18.91 million due to net gain on sale of land in the current quarter.

Its revenue was 40.54% lower to RM26.89 million from RM45.22 million mainly due to certain projects located in Melaka had already reached the completion stage.

RHB CAPITAL BHD [] posted an 8.09% fall in profits to RM348.39 million for the fourth quarter ended Dec 31, 2011, from RM380.15 million due to increased competition among banks.



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UEM Land records RM140.5m in 4Q earnings, unbilled sales of RM1.85b

KUALA LUMPUR (Feb 28): UEM LAND HOLDINGS BHD [] posted a 3.84% increase in earnings to RM140.56 million for the fourth quarter ended Dec 31, 2011, from RM135.36 million, due to improved performance from the group's various development activities.

It said on Tuesday, that the board was confident of the group’s prospects in the coming financial year as the on-going projects had unbilled sales of RM1.85 billion as at Dec 31, 2011.

“The profits from these future billings will be recognised substantially over the next two financial years. The group will also be launching several residential and commercial projects in the Klang Valley, Cyberjaya and Nusajaya in 2012. These projects will ensure the groups’ profitability is sustainable in the near future,” it said.

UEM Land’s 4Q11 revenue soared 115.22% to RM597.80 million from RM277.76 million. Earnings per share were 3.25 sen compared to 3.72 sen a year ago.

The higher contributions were attributed to improved performance to the group's activities in SiLC, East Ledang, Nusa Idaman, Nusa Bayu and Symphony Hills. The quarter also saw the consolidation of results from SUNRISE BHD [], as a factor to its increased earnings.

For the financial year ended Dec 31, 2011, revenue rose 261.7% to RM1.70 billion compared to RM471.14 million the previous year, while profits were up 55.1% to RM301.71 million from RM194.54 million.



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RHB Cap 4Q earnings dip to RM348m on stiffer competition

KUALA LUMPUR (Feb 28): RHB CAPITAL BHD [] posted an 8.09% fall in profits to RM348.39 million for the fourth quarter ended Dec 31, 2011, from RM380.15 million due to increased competition among banks.

It said on Tuesday its revenue increased 10.5% to RM1.89 billion to RM1.71 billion. Earnings per share were 15.80 sen compared with 17.70 sen a year ago.

The lower margins were attributed to stiffer competition in both loans and deposits, as well as a relatively lower yielding credit risk-free public sector loans and financing on book.

RHB Cap said the increase in the overnight policy rate (OPR) in May 2011, coupled with several increases in the statutory reserve requirement (SRR) contributed to the lower net interest income.

For the financial year ended Dec 31, 2011, revenue was up 15.12% to RM7.08 billion from RM6.15 billion. Meanwhile, profit rose 5.63% to RM1.50 billion from RM1.42 billion.

“In line with our commitment to consistently provide value to our shareholders, a final dividend of 11.82% less 25% tax and single tier dividend of 5.59% totaling RM318.7 million has been proposed.

"Together with the interim dividend of 8.00% less tax, the total gross dividend for 2011 would amount to 25.41% per share. This is in line with the group’s stated dividend policy of 30% payout ratio”, said RHB Capital chairman Datuk Mohamed Khadar Merican.

The improvement in performance was attributable to higher net interest income, other operating income, income from its Islamic banking arm as well as lower loan loss provisions and impairment losses on other assets. However, this was partly offset by other operating expenses.



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Dijaya records 12.8% rise in 4Q earnings to RM39m

KUALA LUMPUR: Property developer, Dijaya Corp Bhd's earnings rose 12.8% to RM39.02 million for the fourth quarter ended Dec 31, 2011, from RM34.59 million a year ago, due to better sales performance and recognition of progress billings from its project launches in 2011.

It said on Tuesday, Feb 28, that revenue was up 53.2% to RM156.19 million from RM101.91 million. Earnings per share were 8.53 sen compared to 7.60 sen a year ago.

Both revenue and profits were boosted by contributions from the Tropicana Grande and Casa Tropicana developments at Tropicana Golf & Country Resort, as well as the Grand Villa, Pool Villas and Link Villas at Tropicana Indah Resort Homes.

"The group now has its footprints in Klang Valley, Penang and Johor, which are the major property development areas. With all these projects in the pipeline, the group is poised for growth and expansion in the market share to achieve market capitalisation of above RM1 billion," said Dijaya chief executive officer Tan Sri Danny Tan.

For the financial year ended Dec 31, 2011, revenue increased by 27.8% to RM373.72 million from RM292.26 million in FY10. Net profits rose 50.4% to RM65.07 million from RM43.25 million.



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