RHB Research Summary - 14 Nov 2014

HeveaBoard (HAVE MK, NR)

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.

 

RHB Research Summary - 12 Nov 2014

GD Express Courier (GDX MK, BUY, TP: MYR2.42)

Poised For a New Quantum Leap

Initiating Coverage

We initiate coverage on GDEX with a BUY call and DCF-derived MYR2.42 TP (a 20.4% upside), valuing the stock at an implied 81x FY15F P/E. It has seen 10 years of strong earnings growth, which is expected to remain resilient in the coming years on the capacity expansion of its express delivery service and logistics arm as the drivers. Opportunity in the AEC is a key catalyst to drive GDEX’s earnings higher.

 

 

Tambun Indah (TILB MK, BUY, TP: MYR2.50)

Land Deal Terminated

Company Update

Tambun has terminated the deal to acquire 209.5 acres of land, as certain terms were not met. Although this could disappoint the market, we still like Tambun for its solid management team and >500-acre land at Seberang Perai. Moving forward, management can still embark on other landbanking opportunities. For now, without the new land, we lower our TP to MYR2.50 (14.7% upside). Maintain BUY. 

 

 

Tune Ins Holdings (TIH MK, BUY,  TP: MYR3.00)

Rejuvenating Its Multi-Channel Growth

Results Preview

We expect no major surprises from Tune Ins’ 3Q14 results, as passengers carried by its airline partners are on track to meet our full-year forecast, which had factored in lower travel demand. Reiterate BUY and MYR3.00 TP (24x FY15F P/E, 42% upside). We see a long-term transformation in this growth stock, buoyed by its new leadership, a swift global expansion and sharpening of its multichannel capabilities.

 

Economic Highlights - Industrial Production And Manufacturing Sales Moderated In September, Pointing To More Moderate Real GDP Growth In 3Q (Published on 11 Nov 2014)

Industrial production moderated to 5.4% YoY in September, from 6.5% in August. The reading was slightly lower than the median estimate of a 5.5% gain as a modest increase in export demand dampened manufacturing activities. Along with a slower growth in electricity production, industrial activities experienced a more moderate growth during the month. These were, however, mitigated by a faster increase in the production from the mining sector. Cumulatively, the increase in industrial activities weakened to 4.1% YoY in 3Q (2Q: +5.9%).