Thursday, May 2, 2013

2 more days to the Malaysian DECIDES DAY! KLSE still standing firm on 1700 level..

CIMB Group

The key takeaway from a pre-results briefing with Shahnaz Jammal (Deputy Group CFO) and Renzo Viegas (Group Deputy CEO of CIMB Bank) is that CIMB 2.0 is progressing well but cost containment is still the main challenge for FY13 amid the prospect of ongoing negative JAWS.
Positively, the group appears on track to meeting its ROE target of 16% for FY13. The earnings forecasts and TP of MYR7.50 (1.8x FY13 P/BV, ROE: 15.9%) are maintained. 1Q13 results will be out on 21 May.

SOP

1Q13 results disappointed primarily due to low CPO ASP achieved and ~4% of new plantation area coming into maturity which eroded margins. SOP's earnings contribution for FY13 will be back loaded into 2H on CPO ASP recovery, seasonally stronger production and higher refining margin.
Still, cutting FY13-15 earnings forecasts by 30%/23%/23% on lowered CPO ASP assumptions. Due to lack of short term catalyst, SOP is downgraded to HOLD for now given limited upside to our new TP of MYR6.18 on 13x FY14 PER (previously 13x mid-FY14 PER).

SUNWAY

SunREIT's 9MFY6/13 core net profit of MYR163m is in line. The proposed 3rd interim DPU of 2.1sen (YTD: DPU of 6.3sen, +12% YoY) is also within expectations. Maintain earnings forecasts, MYR1.60 DCF-based TP and HOLD rating. SunREIT offers gross yield of 5.2% (FY14) vs. 4.9% for large-cap REITs.

OTHERS

Construction: 4 groups eye high-speed rail link project. Four consortiums will be bidding for the high-speed rail (HSR) link between Kuala Lumpur and Singapore. MMC Corp Bhd is forming a consortium with Gamuda Bhd and roping in Chinese and European system integrators to bid for the HSR project. The details of the HSR link is being ironed out and tenders will be called by year-end. (Source: Business Times)

O&G: MNGV in project funding talks. Malaysian NGV Sdn Bhd (MGNV), which will be setting up a MYR7b regasification plant in Tanjung Langsat, Johor, is in talks with Asian Development & Investment Bank Ltd to finance the mammoth project. (Source: The Edge Financial Daily)

REIT: SC should consider letting REITs buy greenfield assets. Local real estate investment trust (REIT) managers are asking the Securities Commission (SC) to consider allowing them to buy greenfield assets, according to Malaysian REIT Managers Association chairman Datuk Stewart LaBrooy. (Source: The Star)

Market: Ekuinas eyes MYR600m investment in high-potential local firms. Ekuiti Nasional Bhd (Ekuinas) is looking to deploy MYR600m in high-potential Malaysian companies this year, having already committed a total of MYR49m thus far to two private firms. Ekuinas has six target investment sectors oil and gas (O&G), education, services, fast moving consumer goods, healthcare, and retail and leisure. (Source: The Star)

Closes At A New High, But Poor Breadth PersistsThe FBMKLCI rose by 9.68 points to close at 1,717.65 on Tuesday. Its resistance level of 1,718 will cap market gains, whilst obvious support areas are located at 1,695 and 1,717. Trading idea is to maintain strong buy on Eversendai and Benalec. This two stocks are extremely oversold and undervalue comparing to the peers in the same segment. KLSERoadrunner predicts the stocks will run up within this week before the GE13.

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