Plantations - Malaysia implements B7
We are positive on Malaysia's plans to start implementing the use of B7 biodiesel in stages starting Nov as this will boost the country's usage of palm oil. We estimate that the rollout could raise the country's palm oil demand by 263k-390k tonnes per annum, or 1-2% of the total palm oil production in 2013. As this equates to an additional monthly CPO demand of only 22k-33k tonnes, we keep our average CPO price forecast at RM2,390 and RM2,460 per tonne for 2014 and 2015, respectively. We also maintain our Neutral rating on the sector. Our key picks in the sector are First Resources, Astra Agro and SIMP.
GHL Systems Bhd - One-for-two bonus issue goes ex
GHL’s one-for-two bonus issue has gone ex today. Ex-bonus, our target price adjusts to RM1.06, still based on 23.8x CY16 P/E (at 40% premium over the global payment sector average of 17x, in view of its strong EPS CAGR of 75% in FY13-16 and attractive PEG of 0.6x). Stronger earnings from the TPA segment, M&A activities in new markets and the possibility that the company could be a takeover target are potential re-rating catalysts. Maintain Add.
Nestle (Malaysia) - Still the leader
Nestle highlighted during its analysts’ briefing today that although domestic sales grew by only 5.8% yoy, the company considers the achievement encouraging as the growth rate was above industry average. To boost profits, it will continue to focus on increasing its operating efficiency. We trim our FY14-16 net profit forecasts by 0.3-0.6% to factor in the higher capex as guided by management. This reduces our DCF-based target price. We maintain an Add rating on the stock given its strong branding, solid delivery track record and superior ROE. Key rerating catalysts include a positive impact from the cost pass-though and easing raw material prices.
No comments:
Post a Comment