Fairly Valued Following Recent Selldown
Company Update
Notion’s share price corrected by >25% since our downgrade in February. Although we foresee earnings headwinds over the near term due to continued weakness in worldwide PC and camera sales, the downside has largely been priced in at current valuations. Hence, we upgrade our call to NEUTRAL with our TP still at MYR0.49 (based on an average of 8x FY15 P/E and 0.6x FY15 P/NTA), implying a 1% upside.
Hua Yang (HYB MK, BUY, TP: MYR2.74)
Landbank Replenishment Still The Main Priority
Company Update
Hua Yang’s management said in a briefing that it will continue to focus on landbanking activities in 2HFY15 (Mar), with the Penang mainland and Kota Kinabalu as potential new target markets. Interestingly, the company expects some buyers to hold off the purchase of new homes until after the GST is implemented. Nonetheless, it is still targeting MYR1.1bn of new launches for FY15. Maintain BUY, and a RNAV-based TP of MYR2.74 (15.0% upside).
MPI (MPI MK, BUY, TP: MYR6.34) (Upgraded)
Buy On Weakness
Company Update
Malaysian Pacific Industries’ (MPI) share price has retraced by >25% since August in tandem with the weakness in the local equity market. We think this as an opportunity to buy on weakness as we continue to see positives in the improving industry outlook. Upgrade to BUY, with our TP revised to MYR6.34 from MYR6.40 (15.8x 2015 P/E, 40.9% upside) as we updated our model following the release of its annual report.
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