The Worst May Be Over
Results Review
MAHB’s 3QFY14 core losses reduced QoQ to MYR2.7m from MYR25m. We deem this in line with our expectation as 4Q could be soft in view of the anticipated flight cancellations in the peak season post MH17 and MH370. The worst may be nearing its tail-end as FY15 earnings growth for domestic operations could be robust on KLIA 2’s full-year contribution. Maintain BUY, at a lower MYR8.04 TP (11% upside).
Alam Maritim (AMRB MK, NEUTRAL, TP: MYR1.12)
Secures MYR31.7m Demobilisation Contract
Corporate News Flash
Alam Maritim has received a USD9.56m (MYR31.7m) letter of award (LOA) to demobilise a floating storage facility. Maintain NEUTRAL, with our TP trimmed to MYR1.12 (from MYR1.35), implying a 4.7% upside. Although this LOA and a possible short-term contract for 1MAS-300 are positive surprises to us, we believe they are insufficient to lift the sentiment on the stock amid the current cautious outlook.
Malaysia Building Society (MBS MK, NR)
Higher Impairment Allowances In 3Q14
Results Review
Malaysia Building Society’s (MBSB) 3Q14 net profit of MYR192.4m fell 17.4% QoQ (+63.4% YoY) due to higher impairment allowances on loans, rising operating expenses as well as lower non-interest income. 3Q14 loan growth remained muted while NIM was stable QoQ at 3.86% (2Q14: 3.83%). Management updated that efforts to close the gap towards a full-fledged banking institution have been completed in 3Q14.
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