Sep 28, 2016

JAYA TIASA: Triangle Pattern Breakout


Stock Code: 4383

jayatiasa stock analysis

Jaya Tiasa may resume its uptrend after climbing above the “Triangle” pattern. A bullish bias may be present above the MYR1.26 level with a target price of MYR1.40, followed by MYR1.47. The stock may turn sideways if it cannot sustain above the MYR1.26 mark in the near term. Support may be found at MYR1.20, where traders can exit upon a breach to avoid the risk of a further correction.

source: RHB Research 27/09/2016

The Company is a fully-integrated timber producer in Malaysia with access to 1.76 million acres of timber concessions in the state of Sarawak Malaysia.The principal activities of the Company are investment holding provision of management services extraction and sale of logs manufacturing and sale of timber products reforestation and oil palm plantation.

Sep 27, 2016

Ekovest : Upside Potential +56.3%

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EKOVEST Share Price RM1.92 Target Price RM3.00 Upside +56.3%

ekovest stock dataRise Of The DUKE
Ekovest is a deeply undervalued contractor and concessionaire. Its recent 40% sale of DUKE 1 & 2 to EPF implicitly values just one of its many assets at RM2.8b, below its RM1.7b market cap. It also recently obtained a 53.5-year concession to build and operate a new 50km urban expressway, which will support its construction arm’s profit growth. Initiate coverage with BUY and SOTP target price of RM3.00, implying 18.2x FY18F PE, supported by a 3-year earnings CAGR of 69%.

• Value unlocking of a vital urban traffic dispersal system. Ekovest recently announced it has entered into a binding term sheet that would see it selling a 40% equity stake in Konsortium Lebuhraya Utara-Timur (KL), the holding company of the Duta-Ulu Kelang Expressway (DUKE) 1 and 2, to the Employees Provident Fund (EPF) for RM1.13b. This sum implicitly values the expressways at RM2.82b vs Ekovest’s market cap of RM1.69b. While the group has made no official commitments, we do not discount the possibility that part of the cash proceeds would be declared as special dividends in the near term.

• DUKE 3 – the next big boost. Ekovest’s longer-term outlook was given a boost with the recent announcement that it has been granted a 53.5-year concession to build, operate and transfer the new 50km Setiawangsa-Pantai Expressway (SPE) (formerly known as DUKE Phase 3) that links MRR2 at Taman Melati to Kerinchi Link at Federal Highway. Alongside the benefit of obtaining a concession, the new expressway would enhance its medium-term orderbook visibility as the group would snap up much of the construction jobs worth over RM3.7b. We expect the construction jobs to contribute RM139m-212m p.a. to Ekovest’s financials for the next three years.

ekovest key financial dat

A construction company which owns the highly coveted Duta-Ulu Kelang Expressways. It also
has exposure in construction and property development.

source: UOBKayhian – 23/09/2016

Sep 22, 2016

AirAsia – Target Price RM3.80


Crystallisation of value

airasia financial data

● The sale of leasing arm AAC is looking more likely. Details over recent weeks suggest scope for the value in AIRA's planes to be crystallised at a level higher than we previously expected, substantial deleveraging, and a large special dividend.
● Assuming the sale of AAC completes by end-2016, we estimate AIRA's net D/E would drop to -0.44x from 1.64x. Current net debt of RM9.2 bn could turn to RM3.8 bn of net cash. On a proforma basis, excluding AAC our earnings estimates would be ~34-43% lower.
● Post AAC-sale and placement, AIRA could have ~RM3.1 bn of excess cash (39% of market cap) to fund a special dividend. Whilst MH pricing pressure has picked up, we think there is still
potential for some upside surprise in 2H16 earnings.
● We change our valuation methodology to incorporate the AAC divestment, though our forecasts still do not assume the same due to timing uncertainty. Our target price increases to RM3.80 (from RM3); rating raised to OUTPERFORM from Neutral.

Upgrade to OUTPERFORM, TP raised to RM3.80
The sale of leasing arm AAC is looking more likely. Along with additional details given in the 2Q16 results, there is now scope for the value embedded in AIRA's owned planes to be crystallised at a level ~13% higher than we previously expected, substantial deleveraging, and a large special dividend. We also raise our 2017 EPS forecast by 16% after correcting our fuel hedging assumptions.

Cash-rich, low leverage, up-cycle
Assuming the sale of AAC and the ongoing placement to founders are completed by end-2016, we estimate AIRA's net D/E would drop to -0.44x from 1.64x (current net debt of RM9.2 bn could turn into RM3.8bn of net cash). On a proforma basis, excluding AAC our earnings estimates would be ~34-43% lower. Cyclical upturns don’t last forever, e core airline business could see tailwinds from low oil and relatively benign competition for a few more quarters.

Strong 2H16, special dividends
Whilst Malaysia Airlines' pricing pressure has picked up, AIRA's forward bookings are pointing to record load factor in 2H16; we think there is potential for some upside surprise (our 2016E forecast is 15% higher than consensus). Post AAC-sale and placement, AIRA could have ~RM3.1 bn of excess cash (39% of market cap) to fund a special dividend, in our view; coincidentally, such a dividend would mean the founders would have raised their stake to 32% from 19% for free.

RM3.80 TP assumes AAC sale
We change our methodology to incorporate the AAC divestment; our SOTP comprises the potential excess cash post AAC-sale, the remaining pure airline business, and AIRA's stakes in listed associates (zero worth for IAA and PAA). The potential valuation for AAC also implies an RNAV of ~RM3.55/share. Due to timing uncertainties, financial estimates in the databox do not yet assume the AAC divestment; we include some proforma estimates in the note.

by Credit Susse – 21/09/2016

Sep 21, 2016

Poh Huat: Target Price RM2.05 (+32.3%)


Expansion Down Under. Poh Huat Resources Holdings Bhd   Stock Code: 7088 
TP: RM2.05(+32.3%) Last traded: RM1.55

pohhaut analysis

Expanding into Australia The company is acquiring a detached warehouse cum office-showroom in South Dandenong, Victoria, Australia, from JSNJ Investment Pty Ltd,  for a total consideration of AUD4.25mn (RM13.27mn). The proposed acquisition will be funded by internally generated funds. This is backed by POHUAT’s net cash position of RM25.8mn as of end April 2016. 
The property comprises a 2,807sqm single storey warehouse with a 315sqm office with retail/showroom facilities. It is situated on a 5,265sqm parcel of commercial land, secured by parameter fencing and automated gate entrance and has 47 car parks within its compound. 
Dandenong is a suburb of Melbourne, approximately 30km South-East from Melbourne’s central business district. It is located within an industrial estate designated to host a cluster of “new economy” industry, including manufacturing, wholesaling, logistics and transport and storage business.
The rationale of the acquisition is to expand into new target market from its existing operational bases in Malaysia, Vietnam and South Africa.
The proposed acquisition is expected to complete by December 2016.
Our View We understand that for a start, the group intends to market its panel-based office furniture and bedroom sets under its own brand. While it may take some time to establish its brand and gain wide market acceptance, we are positive on the move as the new target market is expected to provide a growth potential to the group, and may in long term, reduce the over-reliance on the North America market.
Even though the population of Australia (estimated at 24mn as of 2015) is significantly smaller than its traditional main market in the US (estimated population of 320mn as of 2015), the Australia market is relatively untapped compared with the much more matured furniture business in the US. Furthermore, the product design adopted for the Western market in US market is commonly accepted by the Australians.  
Forecast We leave our earnings forecasts unchanged for now. We do not expect the expansion to make immediate earnings contribution to the group in FY17 and FY18 as we think it may require time to establish the brand and gain market share. 
Valuation  No change to our target price of RM2.05, based on unchanged 10x CY17 EPS. Reiterate BUY call on POHUAT

source: TA Secruties – 20/09/2016

The principal activities of the Company are investment holdings and provision of management services. The principal activities of its subsidiary companies are manufacturing and trading of furniture and furniture parts.

Sep 15, 2016

HIAPTEK - 2 Months Channel Breakout

Hiaptek Venture Stock Code: 5072

hiaptek analysis

HIAPTEK inched up RM0.005 (+1.72%) to stage a breakout from its 2-month trend channel on increased trading volume, settling at RM0.295 yesterday. The MACD histogram staged a bullish convergence above the zero-line on the back of improved buying momentum as depicted by the hook up seen in RSI and Stochastic. With the booming hype surrounding steel players, HIAPTEK could be one of the laggard plays. Nonetheless, the appearance of an ‘inverted hammer’ candlestick yesterday indicates that sellers are still in play. Thus, we advocate interested traders to only enter the stock when it has swiftly taken out the RM0.30 (R1) level decisively. Next overhead resistance is seen at RM0.33 (R2), while supports are located at RM0.275 (S1)/RM0.26 (S2).

source: RHB Research – 15/09/2016

The principal activities of the Company are investment and property holdings and the provision of management services. The principal activities of the subsidiaries are importers and exporters and general dealer of steel products hardware and building materials general merchant and dealer in metal hardware building equipment and materials transportation services manufacturing selling dealing and renting of scaffolding equipment slitting and forming process for pipes and ranges of stell product.

Sep 6, 2016

HARTALEGA – Buying Interest Signal

HARTA Stock Code: 5168

hartalega analysis

HARTA. The rubber glove sector is in the limelight as of recent, seeing players such as TOPGLOV notching a gain of 14.0 sen (+3.0%) yesterday on strong trading volume. HARTA also received some spill-over attention, breaking out from its multi-month resistance turned-support level of RM4.50 (S1) on high trading volume. MACD histogram is also displaying its bullish convergence away from its zero-line on the back of positive climb seen by the RSI, indicating that buying interest is returning to the stock. With the main hurdle (RM4.50 resistance) surpassed, the stock could set sight on a gradual climb towards RM4.70 (R1) and possibly RM4.98 (R2) further. Immediate downside support is seen at RM4.50 (S1) and RM4.23 (S2) next.

source: Kenanga Research 06/09/2016

The principal business of the Group is manufacturing latex gloves including natural rubber and nitrile gloves

Sep 1, 2016

GOODWAY – Technical Highlight


goodwill analysis

GOODWAY rose 5.0 sen (8.7%) on Tuesday to a closing high of RM0.625. This signals a continuation of its uptrend after a brief pullback towards the trend-line and 20-day SMA combined supports last week. Trading volume has also proven to be consistent with a healthy uptrend these past two months, and Tuesday’s uptick is constructive for a higher move. From here, we expect the share price to retest the RM0.675 (R1) resistance fairly soon. Should a breakout occur, investors may then set their sights on RM0.79 (R2) further up. As for the downside, strong support is expected at RM0.56 (S1) although a break below would be highly negative.

source: Kenanga Research – 01/09/2016


The Group is principally involved in the development manufacture and distribution of technical compounds tyre compounds and other rubber related products. The Group also provides retreading services.