RHB Research Summary - 27 Oct 2014

Notion (NVB MK, NEUTRAL, TP: MYR0.49) (Upgraded)

Fairly Valued Following Recent Selldown

Company Update

Notion’s share price corrected by >25% since our downgrade in February. Although we foresee earnings headwinds over the near term due to continued weakness in worldwide PC and camera sales, the downside has largely been priced in at current valuations. Hence, we upgrade our call to NEUTRAL with our TP still at MYR0.49 (based on an average of 8x FY15 P/E and 0.6x FY15 P/NTA), implying a 1% upside.

 

 

 

Hua Yang (HYB MK, BUY, TP: MYR2.74)

Landbank Replenishment Still The Main Priority

Company Update

Hua Yang’s management said in a briefing that it will continue to focus on landbanking activities in 2HFY15 (Mar), with the Penang mainland and Kota Kinabalu as potential new target markets. Interestingly, the company expects some buyers to hold off the purchase of new homes until after the GST is implemented.  Nonetheless, it is still targeting MYR1.1bn of new launches for FY15.  Maintain BUY, and a RNAV-based TP of MYR2.74 (15.0% upside).

 

 

 

MPI (MPI MK, BUY, TP: MYR6.34) (Upgraded)

Buy On Weakness

Company Update

Malaysian Pacific Industries’ (MPI) share price has retraced by >25% since August in tandem with the weakness in the local equity market. We think this as an opportunity to buy on weakness as we continue to see positives in the improving industry outlook. Upgrade to BUY, with our TP revised to MYR6.34 from MYR6.40 (15.8x 2015 P/E, 40.9% upside) as we updated our model following the release of its annual report.

RHB Research Summary - 24 Oct 2014

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).

 

Research Summary: 18 July 2014

Research Summary: 18 July 2014

Research House	Type	Company/Sector	Report Title	Rating/Call	Target
Maybank	Results review	Digi	Strong earnings delivery again	Hold	RM5.60
Maybank	Results review	Bursa	Earnings in line, dividend surprise	Hold	RM8.00
Maybank	Results review	Pavilion Reit	Continues to grow	Buy	RM1.52
Maybank	Results review	CMMT	No surprises	Buy	RM1.74
Maybank	Technical	SPSetia		Short-term buy
CIMB	Results note	CMMT	Property assessment rate boost	Hold	RM1.49
CIMB	Results note	Pavilion Reit	Hit by weaker tourist arrivals	Hold	RM1.45
CIMB	Results note	Digi	Delivering as usual	Add	RM6.00
CIMB	Results note	Bursa	Good dividend surprise	Add	RM10.00
RHB	Results review	Digi	Leading the way	Buy	RM6.50
RHB	Results review	Bursa	Yet more dividends	Buy	RM9.10
RHB	Results review	Hua Yang	Optimistic on sales prospects	Buy	RM2.70
RHB	Results review	Pavilion Reit	Expect 2HFY14 to be stronger	Neutral	RM1.48
RHB	Results review	CMMT	No surprises	Neutral	RM1.41
Kenanga	Results note	CMMT	1H14 within expectations	Outperform	RM1.59
Kenanga	Results note	Pavilion Reit	Within expectations	Outperform	RM1.41
Kenanga	Company update	Hua Yang	Gearing up for growth	Outperform	RM2.60
Kenanga	Results note	Bursa	1H14 results inline	Outperform	RM8.60
Kenanga	Results note	CIMB	CIMB Thai: weak macro outlook	Market perform	RM8.00
Kenanga	Results note	Digi	Results on track	Market perform	RM5.53
Kenanga	Quick bites	Maybulk	RM320.0m loan facility secured	Outperform	RM2.53

Research Summary: 17 July 2014

Research Summary: 17 July 2014

Research House	Type	Company/Sector	Report Title	Rating/Call	Target
Maybank	Results review	Tenaga	Improving operational trends	Buy	RM14.00
Maybank	Company update	Public Bank	To fully own VID Public Bank	Sell	RM19.20
Maybank	Sector update	O&G, Property	Key takeaways from Corporate Day
Maybank	Eco highlights	Economics	CPI June 2014: Staying above 3%
Maybank	Technical	MMSV		Short-term buy
RHB	Results review	Tenaga	Another decent quarter	Buy	RM13.75
RHB	Results review	Hua Yang	Progress billings continue to drive earnings	Buy	RM2.70
RHB	Company update	SKP Resources	Positive surprises in store	Buy	RM0.75
RHB	Eco highlights	Economics	Inflation inched higher to 3.3% yoy in June, BNM could raise OPR again in 1H2015
CIMB	Results note	Tenaga	Time to fund another buzz	Hold	RM12.56
CIMB	Eco update	Economics	Inflation quickens to 3.3% in June
Kenanga	Company update	Redtone	Interesting tone ahead	Outperform	RM0.81
Kenanga	On radar	SCC	New premix catalyst	Not rated	RM1.68
Kenanga	Results note	Hua Yang	Steady results	Under review	Under review
Kenanga	Eco viewpoint	Economics	CPI: Increased by 3.3% in June
Kenanga	Results note	Zhulian	Still not the time	Market perform	RM3.08
Kenanga	Results note	Tenaga	9M14 results above expectations	Outperform	RM13.77