Malaysia Airports Holdings (MAHB MK, BUY, TP: MYR8.51)
Taking Full Control Of Sabiha Gokcen
Corporate News Flash
As anticipated, Malaysia Airports announced that it would exercise ROFR to block Limak’s 40% sale of Istanbul Sabiha Gokcen airport (ISG) to TAV. Funding details have yet to be revealed but we believe it may purely be a cash call. We maintain our MYR8.51 TP and BUY call (a 27.2% upside), pending its funding decision. ISG is on the verge of an earnings uptick that could materialise earlier than anticipated.
Cahya Mata Sarawak (CMS MK, BUY, TP: MYR5.00)
Continuing To Ride On SCORE
Company Update
CMS continues to be an excellent proxy to SCORE. Maintain BUY and SOP-based MYR5.00 TP, a 22% upside. Its OMS associate and MPA phosphate project are making good progress, and are set to benefit from attractive power tariffs. Investors also think its huge cash pile will allow CMS to participate in projects with attractive yields that may arise from SCORE’s developments or other opportunities.
Sime Darby (SIME MK, NEUTRAL, TP: MYR9.00)
Long Term Plans To Unlock Value
Company Update
Sime answered many questions on its strategy for the spinning off and listing of core units, latest acquisition and potential contributions from its Battersea project at our IMHK event last week. Despite its rather subdued earnings prospects, we believe news flow about its potential restructuring could support its share price. Maintain NEUTRAL, as we lift our SOP-based TP to MYR9.00 (from MYR8.75) a 1.4% downside.
Public Bank (PBK MK, NEUTRAL, TP: MYR20.60)
OPR Hike Booster
Results Review
Public Bank’s 3Q14 results were robust, underpinned by a sequential expansion in NIM following July’s 25bps OPR hike. Other positives: well-controlled overheads, low credit cost with stable asset quality while capital levels are now among the highest after its MYR4.8bn rights issue. Still, we believe the positives are largely priced in. Maintain NEUTRAL, with a revised MYR20.60 GGM-based TP (10.6% upside).
Daibochi (DPP MK, NEUTRAL, TP: MYR4.10)
Looking Towards a Better 2015
Results Briefing
In view of Daibochi’s mediocre 9M14 thus far, we trim our earnings forecasts for FY14. However, we believe 2015 may be a record year, with earnings fuelled by its topline growth as well as margin expansion on the back of lower raw material prices. Despite this, valuations are not compelling at this juncture. Maintain NEUTRAL and a MYR4.10 TP (2.6% downside), premised on an unchanged 13x P/E 2015 EPS.
Hua Yang (HYB MK, BUY, TP: MYR2.74)
Dark Days Are Over
Results Review
Hua Yang’s 1HFY15 results were in line, coming in at 54/49% of ours/consensus estimates. Net profit more than doubled YoY, as contributions from its new projects started trickling in. With more projects to be launched in 2HFY15 (Mar), management’s full-year new sales target of MYR500-600m looks achievable (1HFY15: MYR192.2m). Maintain BUY, and a RNAV-based TP of MYR2.74 (19.0% upside).
