Sunway
Sunway's latest MYR222m job win has lifted its outstanding construction order book to MYR4.4b (+5%), improving the visibility of its construction earnings over the next 2-3 years.
Maintain earnings forecasts as this already imputed job wins of MYR1.8b for FY13. Our MYR2.65 RNAV-based TP and HOLD rating are under review pending the completion of Sunway's fundraising exercise (1-for-3 renounceable rights issue).
Malaysia Marine & Heavy Engineering
Contract flows are less forthcoming due to delays in new orders, which are
only expected to crystalise by end-4Q13 at the earliest (previous expectation:
3Q13).
With majority of ongoing projects to be completed in 2013, we lower our
FY14-15 earnings estimates by 15%/4% to account for slower than expected order
replenishment.
Accordingly, the TP is revised to MYR3.70 (-12%), on unchanged 18x FY14 PER
basis. Share price is expected to trade sideways in the absence of catalyst in
the short-midterm. Maintain Hold.
CIMB Group
CIMB Niaga's 1Q13 results were below expectations at just 21% of our
full-year estimates, but with management holding out for an improved operating
outlook in the following quarters, trim the earnings forecasts only
marginally (-2% p.a. for FY13-15) on lower NIM assumptions, with little impact
to CIMB Group (forecasts maintained).
It is expected CIMB Niaga to contribute to 33% of group earnings this year. Our
CIMB Group TP of MYR7.50 (FY13 P/BV of 1.8x, ROE: 15.9%) is maintained.
OTHERS
Sime Darby: PNB finds buyer for non-core assets. Permodalan Nasional Bhd
(PNB) has found a suitor to buy the non-core assets of Sime Darby Bhd. Other
non-core assets that PNB is looking to divest include U-Insurance Sdn Bhd, the
insurance arm of UMW Holdings Bhd. (Source: Business Times)
Syarikat
Takaful: Expects higher revenue. Syarikat Takaful Malaysia Bhd aims for its
revenue for the financial year 2013 to grow in line with the industry expansion
of between 20% and 25%. (Source: The Star)
Oil & Gas: Progress
Energy, Petronas secure first LNG buyer. Progress Energy Canada Ltd, Pacific
NorthWest LNG Ltd and Petroliam Nasional Bhd (Petronas) have closed the
previously announced transaction that saw Japex Montney Ltd, the Canadian
subsidiary of Japan Petroleum Exploration Co Ltd (Japex), acquire a 10% interest
in Progress Energy Canada’s natural gas assets in north-east British Columbia
and in the proposed Pacific NorthWest LNG export facility on Canada’s west
coast. As part of the transaction, Japex has agreed to buy a 10% share of the
liquefied natural gas (LNG) facility’s production for a minimum of 20 years for
domestic use in Japan. (Source: The Star)
Economics: Malaysia on track
for 5%-6% GDP growth. Malaysia is on track to achieve gross domestic product
(GDP) growth of 5% to 6% this year, driven by strong domestic demand and
investment inflows despite the current slowdown in China, Bank Negara governor
Tan Sri Dr Zeti Akhtar Aziz said. The central bank has already included the risk
from global slowdown in the projection and that the current situation in China
would not affect the GDP target for the whole year. (Source: The
Star)
M&A: Fitters, Deluge Fire sign MoU on merger. Fitters
Diversified Bhd has entered into a memorandum of understanding (MoU) with Deluge
Fire Protection (SEA) Pte Ltd (Deluge) to facilitate the merger of their fire
protection businesses and listing of the merged entity on the Main Market of
Bursa Malaysia. (Source: Business Times)
Boring And Range Bound At Lofty Levels
The FBMKLCI declined by 3.32 points to close at 1,707.97 yesterday. Its
resistance levels of 1,707 and 1,718 will cap market gains, whilst obvious
support areas are located at 1,688 and 1,703.
Trading idea is maintain strong buy for Eversendai. Recent sold down of the share is overdone and rebound is in the horizon. TP MYR1.70
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