Hartalega (HART MK, BUY, FV: MYR7.70)
Site Visit To The Next Generation Complex
Company Update
We visited Hartalega’s NGC site recently and gathered that all expansions are on track. Maintain BUY and a MYR7.70 TP (21x 2015 P/E, 11.8% upside).The first two lines will commence operations by end-November and December respectively. The NGC is designed to achieve high efficiency and productivity. Despite a potential short-term earnings impact, this expansion is crucial to retaining its market leadership.
British American Tobacco (ROTH MK, SELL, TP: MYR59.60)
Corporate News Flash
A MYR1.50 Excise-Led Price Hike
BAT announced that the prices of all its branded cigarettes were raised by MYR1.50 per pack effective yesterday, citing the 3-sen increase per stick in excise duty as the reason. Maintain SELL, with a higher DCF-based TP of MYR59.60 (from MYR57.80), suggesting a downside of 12.2%. We expect a significant drop in sales volume following the price hike but believe the higher ASP would more than offset the decline.
Malaysia Marine and Heavy Engineering (MMHE MK, SELL, TP: MYR2.01)
Results Review
Slow Orderbook Replenishment
Malaysia Marine and Heavy Engineering (MMHE)’s 9MFY14 net profit of MYR113.4m were within our estimate, at 71.4% of full-year numbers but fell below consensus at 69.4%. We maintain our earnings estimate for FY14 but lower our FY15F net profit by 22%. Maintain SELL, with a lower TP of MYR2.01 based on 15.5x P/E, which is at a 15% discount to mid-cap oil & gas counters under our coverage.
Perisai Petroleum Teknologi (PPT MK, SELL, TP: MYR0.88)
Results Review
Further Disappointment
Perisai posted a disappointing 9MFY14 core profit of MYR0.33m, well below our and consensus estimates. The disappointing numbers were due to the underutilisation of two of its marine assets as well higher finance costs from its borrowings. As we remain wary over its future earnings, we slash our FY14F/FY15F numbers by 95%/38% respectively. We downgrade our recommendation to SELL, with a lower TP of MYR0.88 based on 14.6x FY15F P/E.
No comments:
Post a Comment