An Undiscovered Gem At Attractive Valuations
Trading Idea
As HeveaBoard has a good earnings track record and prudent management, we think that at a target P/E of 6x FY15F, the stock should be worth MYR2.15 (a 22% upside). We expect the company to continue focusing on enhancing its production efficiency to improve earnings. HeveaBoard reported a YoY earnings increase of 119% in 1H14 and management is confident that it can maintain this pace of growth in 2H.
Oil & Gas (O&G) (NEUTRAL)
Something Has Got To Give
Sector Update
As a result of the fundamental change in the crude oil landscape, this report addresses the impact of the lower crude oil price environment on the companies under our coverage. For our Top Picks, we have chosen companies that are not materially affected by the lower crude oil price environment. Our top BUYs are Dialog, SapuraKencana and Bumi Armada.
Maxis (MAXIS MK, NEUTRAL, TP: MYR6.35)
Slow Road To Recovery
Results Review
Maxis’ 9M14 results came in line, at 71%/76% of our/consensus estimates. Maintain NEUTRAL, with a higher DCF-based TP of MYR6.35 (8% downside) after revising our key assumptions. Management continues to guide for lower services revenue for FY14, given the decline in voice and messaging revenue. That said, we believe 4Q revenue could see a pickup from recent smartphone launches.
GD Express Courier (GDX MK, BUY, TP: MYR2.42)
Good Start To The Year
Results Review
We maintain our BUY recommendation on GDEX, with an unchanged TP of MYR2.42 (14% upside). Its 1QFY15 earnings came in within expectations. Both courier and logistics segments grew positively but incurred higher expenses for expansion. GDEX also proposed 1-for-3 bonus issue as well as 1-for-5 free warrants. We keep our positive view on GDEX’s growth prospects.
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