SP Setia (RM3.59; Buy; Price Target: RM4.80 (prev RM4.45); SPSB MK)
Staying ahead of The Curve
• 4QFY09 result within our and consensus expectations
• FY10 sales target to match FY09’s RM1.6b. Key launch
to watch: RM6b KL Eco City in Oct 10
• Maintain Buy, upgrade TP to RM4.80 (20% discount to revised RNAV of RM5.95).
Parkson Holdings (RM5.19; Buy; Price Target: RM6.30; PKS MK)
Will be replaced as a FBM KLCI constituent Bursa Malaysia announced that Parkson Holdings will be excluded as a component stock of the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) effective 21 Dec 09 following a semi-annual review. Replacing it on the member list will be Nestle. With the impending changes, there could be some portfolio adjustments by index-tracking funds although we reckon any reallocation would be minimal given their marginal relative weights in the index calculations. Parkson Holdings’ existing relative weight stands at 0.69%. Parkson Holdings remain a Buy from our fundamental perspective, with a RNAV-derived target price of RM6.30.
Berjaya Sports Toto (RM4.20; Hold; Price Target: RM4.40; BST MK)
Revenue fell, no dividends!
• Results within our and market’s expectations,
• No interim dividend declared (2QFY09: 7sen) • Lower prize payout helped cushion revenue decline
with slower Mega 6/52 sales • Maintain Hold and TP of RM4.40 (based on dividend discount model)
Plantation sector
Start of low season
• MPOB Nov palm oil data showed 19.6% m-o-m drop in Stock Picks – Large Cap Price (RM) 10/12 Target Price Public Bank 10.90 12.20 MISC 8.60 9.60 IJM Corp 4.55 6.00 Gamuda 2.70 4.25 Tanjong 16.42 19.25 production and 1.4%
• Inventory declined faster than expected to 1.9m MT
• Low season has kicked in; CPO shipments to India and
China may pick up on soybean oil price premium
• Reiterate our buy calls on Sampoerna Agro, Wilmar and
First Resources
Comments
DiGi.Com (RM21.24; Hold; Price Target: RM21.00; DIGI MK)
Signs domestic roaming with U Mobile Digi announced that it has signed a Domestic Roaming (DR) agreement with U Mobile, the only celco with a 3G spectrum, but not a GSM spectrum. The agreement allows U Mobile to handover calls from its 3G network to Digi’s 2G network. Lasting 3 years, the agreement has an option for a 2-year extension.
Based on the industry report by Frost & Sullivan (in Maxis
Bhd’s IPO prospectus), U Mobile has <200k subscribers as at Jun09. In comparison, the celco industry has 28.5m subscribers at that time. Hence, we see negligible impact on Digi’s earnings. Consequently, U Mobile would end its DR arrangement with Celcom (100%-owned subsidiary of Axiata), which similarly would have negligible impact on Axiata.
We retain our HOLD call on Digi with a DCF-based price target of RM21.00 and FULLY VALUED call on Axiata with a sum-of-parts price target of RM3.00.
source : HWangDBS Research
