CIMB Research Summary - 5 Nov 2014

MISC Bhd - Restoring the relationship

As Petronas focuses its full attention on executing its existing O&G projects, we suspect that it may rethink the need to directly own LNG vessels. As such, MISC may be able to own and operate new LNG ships for Petronas, restoring the traditional father-son relationship. We keep our Add call and raise our SOP-based target price after factoring in DCF contribution from four LNG vessels now in Petronas’s orderbook, and other adjustments. Our forecasts have been tweaked for housekeeping items. The family reconciliation could excite investors and move the price.


British American Tobacco - Raising selling prices again!

Effective today, BAT has increased its cigarette selling prices by RM1.50/pack, to RM13.50/pack for premium cigarettes and RM12/pack for VFM sticks, due to the increase of 3 sen per stick in excise duty. While sales volume will most likely drop substantially in the immediate term, we believe that it will have a net positive impact on BAT’s FY15 earnings as long as the sales volume does not fall more than 16-17% which we think is unlikely. We cut our FY14-16 sales volume assumption by 2-4% pts factoring the potential fall in sales volume due to the higher selling prices. Our FY14-16 net profit was however raised by 1-10% as the higher selling price is more than sufficient to offset the decline in the potential drop in sales volume. We maintain Reduce on BAT with a higher DDM-based target price. We prefer Gudang Garam.


Petronas Gas - A steady flow of gas

At 75% of our and consensus full-year forecasts, Petronas Gas's (PetGas) 3Q14 core net profit of RM418.6m was in line with our expectations. Revenues grew by 9.8% yoy, underpinned by the new Gas Processing and Gas Transportation Agreements and higher utilities revenues. We retain our earnings forecasts and SOP-based target price of RM26.44. We remain optimistic on PetGas's earnings outlook, which we expect to be stable moving forward. We maintain our Add call on the stock, with the announcement of more regasification terminals being a potential re-rating catalyst. PetGas remains our top pick in the overall Malaysian utilities sector.


Tune Ins Holdings Bhd - No retuning by new maestro

Our meeting with the new CEO of Tune Ins, Mr. Junior N. Cho, reinforced our view that he is the right candidate to lead the company, given his experience in the insurance, e-commerce and airline sectors. We also draw comfort from the fact that the management team is intact despite the departure of the previous CEO. We do not expect the new CEO to change significantly the strategic direction of the company. Tune is still an Add, premised on the swift expansion of its travel insurance business in the region, with exposure to 30 countries. Our DDM-based target price (COE of 9.2%; LT growth of 5%) increases as we roll it over to end-2015.

Petronas Dagangan - Not pumping enough

Tasek Corporation - 50-year anniversary goodie bag

Research Summary: 6 August 2014

Research Summary: 6 August 2014

Research House	Type	Company/Sector	Report Title	Rating/Call	Target
RHB	Company update	Axis REIT	Brighter growth prospects	Neutral	RM3.34
RHB	Results review	Hartalega	Consolidation mode	Neutral	RM6.95
RHB	Results review	MHB	Still disappointing	Sell	RM3.10
RHB	Sector update	Telco	Staying connected – Aug 2014	Neutral
CIMB	Flash note	Axis REIT	More excitement ahead	Add	RM3.82
CIMB	Results note	MHB	Better yardstick elsewhere	Reduce	RM3.25
CIMB	Results note	Tasek	Dividend surprise in 2Q	Hold	RM15.30
CIMB	Results note	Hartalega	More challenges ahead	Hold	RM6.46
Maybank	Initiate coverage	Boustead Plantations	Plantation estates for free, anyone?	Buy	RM2.16
Maybank	Results review	MHB	In line; changes in methods	Buy	RM4.60
Maybank	Results review	Hartalega	High take-up for new capacity	Buy	RM7.30
Maybank	Technical	MFlour		Short-term buy
Kenanga	Company update	Axis REIT	Focusing on industrial assets	Market perform	RM3.53
Kenanga	Results note	Hartalega	Looking forward to a better 2H15	Outperform	RM7.48
Kenanga	Results note	MHB	Lower results, trimming forecasts	Underperform	RM3.24