CIMB Research Summary - 30 Oct 2014

Gamuda - More traction on MRT 2

Gamuda announced that it has received a letter from MRT Corp appointing the MMC-Gamuda JV as project development partner (PDP) for MRT 2. This news is a big positive and solidifies Gamuda’s position as the biggest beneficiary of the project, with a stronger chance of bagging the underground works. Imputing the DCF value of the PDP agreement may raise our RNAV by 3-4% but we retain our numbers pending formalisation of the PDP terms in the next 3-4 months. Our RNAV-based target price remains pegged to a 10% discount. We expect the share price to continue its steady rerating on the back of this news and positive expectations for a recovery in the water takeover talks. Maintain Add. Gamuda remains our top sector pick for the big caps.


Gas Malaysia Berhad - Gas prices raised by 2.3%

Despite the small quantum, Gas Malaysia's revision of the non-power gas tariff is positive as it implies that the government is sticking to its 6-month gas price revision plan. The new gas tariff will take effect by the beginning of November while we anticipate another revision by Apr/May 2015. We maintain our Add call on Gas Malaysia, with a revised target price of RM3.95, still based on 24x FY15 P/E, after trimming FY14-16 EPS by 0.2-0.4% p.a. given the new selling prices.


Taliworks Corporation - A value-accretive M&A play

Taliworks's main appeal is that after several years of operations since it acquired a highway and secured two water concessions, it is now back in M&A mode. Value-accretive acquisitions, local and domestic, are in the pipeline, backed by its rising post-restructuring cash hoard It is also a beneficiary in Selangor’s post-water restructuring landscape as its O&M contract is likely intact. We expect further re-rating of the stock to be event-driven (M&A, new jobs and asset divestment). Based on a 10-20% discount to our RNAV/share of RM3.29, the stock could offer 38-56% upside. The new 75% payout policy could imply 5-6% dividend yield.


Strategy Note - Implications of lower oil prices
 

Plantations - CPO price predictions at POTS
 

Rubber Gloves - Minimal impact from price hike
 

IGB REIT - Continues to deliver

MIB Research Summary - 30 Oct 2014

Gamuda: Maintain Buy Wins PDP for KVMRT 2, TP raised  Shariah-compliant

Clinching the PDP role for KVMRT 2 significantly enhances its construction orderbook. Further major infrastructure job wins would further elevate its construction orderbook size. We raise our sustainable construction orderbook assumption and revise our RNAV-based TP to MYR6.00 (+13%). Gas Malaysia: Maintain Hold A milder than expected hike?  Shariah-compliant The 2.3% selling price hike appears to be insufficient for a full pass-through of a MYR1.50/mmBTU hike in the purchase price of subsidised gas. Our forecasts are unchanged pending further clarifications from the company. Maintain HOLD with an unchanged TP of MYR3.80. WCT Holdings: Maintain Hold Clinches MYR652m job  Shariah-compliant New MYR652m building construction works lifts outstanding external construction orderbook by 35%. Eyeing more jobs from TRX, RAPID, WCE and Qatar. Positive, but not re-rating our call yet; maintain HOLD with an unchanged TP of MYR2.30. Perdana Petroleum: Maintain Buy Sells Superior, gains MYR1m  Shariah-compliant A decent sale price, MYR1m gain. Proceeds to help part-finance fleet rejuvenation. Lowering 2015-16 earnings forecasts by 2-3%, taking into account this deal. Maintain BUY, but TP adjusted to MYR2.48 (unchanged 15x 2015 PER) from MYR2.55 post earnings revision. Axiata Group: Maintain Buy XL: Weak revenue trends  Shariah-compliant XL’s 9M14 EBITDA was in line at 72% of ours and 71% of consensus full year forecasts; net profit was below. The integration of Axis has been completed; Axis to be EBITDA-neutral by 1Q15. XL’s FY14 earnings are significantly distorted; our BUY rating and MYR7.60 TP for Axiata are unchanged. CIMB Group: Maintain Hold Provisions higher at CIMB Niaga CIMB Niaga’s results below expectations; FY14/15 net profit cut by 34%/20%. CIMB Group earnings trimmed by 8%/6%. TP trimmed to MYR7.40 from MYR7.60 for CIMB Group, to MYR10.20 from MYR10.45 for RHB – still 15% upside for both. BUY RHB for exposure to the merger, HOLD CIMB. IGB REIT: Maintain Hold Earnings on track 9M14 core net profit of MYR176.4m was in line. Maintain our earnings forecasts, MYR1.29 DCF-based TP. Lacks strong asset pipeline to re-rate over the short term; maintain HOLD. Technicals: Index may head to 1,840 and higher The FBMKLCI rose 13.87 points to 1,839.55 yesterday and the FBMEMAS and FBM100 gained 82.22 points and 78.41 points respectively. In terms of market breadth, the gainer-to-loser ratio was 587-to-231 while 280 counters were unchanged. 2.01b shares were traded, valued at MYR2.11b. Today's trading idea is a Short-Term BUY CALL on MMSV with target price of MYR0.59, MYR0.64 and MYR0.81.

Research Summary: 21 August 2014

Research Summary: 21 August 2014

Research House	Type	Company/Sector	Report Title	Rating/Call	Target
RHB	Results review	Bumi Armada	Calmer seas ahead	Buy	RM4.52
RHB	Results review	Kossan	Better outlook for 2H	Buy	RM5.12
RHB	Results review	AirAsia	2Q dips into losses but look beyond this quarter	Buy	RM2.73
RHB	Results review	MSM	Not-so-sweet prospects	Neutral	RM5.23
RHB	Results review	IOI	Manufacturing division weakens	Neutral	RM5.42
RHB	Results review	KLK	FY14 may not be affected by lower CPO prices	Neutral	RM25.20
CIMB	Results note	Eksons	Cash rich after land sale	Hold	RM1.54
CIMB	Results note	AirAsia	The dawn of industry rationality?	Add	RM2.88
CIMB	Results note	IOI	Lower 4Q downstream earnings	Reduce	RM4.49
CIMB	Eco focus	Economic	Malaysia’s inflation outlook amid fuel subsidy review & GST
CIMB	Eco update	Economic	Inflation ebbs to 3.2% in July
CIMB	Flash note	Star	Growing the non-print segment	Hold	RM2.70
CIMB	Results note	MSM	New APs remove sugar coating	Hold	RM5.22
CIMB	Results note	Kossan	2Q impacted by water rationing	Add	RM4.71
CIMB	Results note	KLK	Production recovers but…	Reduce	RM22.50
CIMB	Result note	Gas Malaysia	Fired up by gas price revisions	Add	RM3.96
CIMB	Sector	Autos	July driven by Raya promotions	Neutral
Maybank	Sector	Banking	Deposit competition still intense	Neutral
Maybank	Results review	AirAsia	It was a mirage, 2014 will be tough	Hold	RM2.55
Maybank	Results review	Bumi Armada	Results on track	Buy	RM4.55
Maybank	Results review	KLK	A traditionally weak 3Q	Hold	RM23.20
Maybank	Results review	IOI	Pricey on forward earnings	Sell	RM3.97
Maybank	Results review	Boustead Plantations	Downside capped by its land value	Buy	RM2.16
Maybank	Results review	Gas Malaysia	Potential dividend bummer?	Hold	RM3.80
Maybank	Results review	Kossan	Stronger growth ahead	Buy	RM5.00
Maybank	Results review	MSM	2A14: Within expectations	Hold	RM5.00
Maybank	Company update	MBM Resources	Excitement from Perodua	Buy	RM3.42
Maybank	Company visit	Star	Already in the price	Hold	RM2.89
Maybank	Eco update	Economic	CPI July 2014 – eased but still above 3.0%
Maybank	Technical	PJDev		Short-term buy
Kenanga	Results note	AirAsia	Better prospects over the horizon	Market perform	RM2.47
Kenanga	Results note	Gas Malaysia	2Q14 in line; upgrade to MP	Market perform	RM3.54
Kenanga	Results note	IOI	FY14 below consensus	Market perform	RM5.30
Kenanga	Results note	Kossan	Expect a better 2H14	Outperform	RM4.86
Kenanga	On radar	KSL	Back in our “sights”	Trading buy	RM6.63
Kenanga	Company update	MBM Resources	Look further down the road	Market perform	RM3.06
Kenanga	Eco viewpoint	Economic	CPI: Tapered off slightly to 3.2% in July
Kenanga	Results note	KLK	9M14 in line	Market perform	RM25.00
Kenanga	Company update	Matrix	Banking on GDV replenishment	Outperform	RM3.20
Kenanga	Company update	Star	Challenging 2H14	Underperform	RM2.44
Kenanga	Initiate coverage	Thong Guan	Value unwrapping!	Outperform	RM3.70
HL	Results review	Kossan	2Q14 results – below expectations	Hold	RM3.70
HL	Results review	AirAsia	Further yield pressure in 2Q14	Hold	RM2.20
HL	Results review	Bumi Armada	Signing block 15.06 Angola…	Buy	RM4.27
HL	Results review	KLK	Below expectations	Sell	RM20.41
HL	Results review	IOI	Below expectation	Hold	RM4.39
HL	Results review	MBM Resources	Watch out for 2015 fruits bunches	Buy	RM4.00
HL	Company update	Matrix	Making the right moves	Buy	RM3.74
HL	Briefing	Star	1HFY14 analyst briefing	Hold	RM2.55
HL	Eco update	Economic	July inflation report