KINSTEEL : Buy On Dip by Maybank IB

Kinsteel Stock Code 5060 RM0.78: Buy TP of RM1.23

- Cheaply-priced positive fundamentals
Buy on dips. After adjusting for seasonality, 1Q10 results were within expectations, at 20% of our full-year forecast and 22% of consensus. The share price fell 23% within 3 weeks on a broad-based market sell-
down. We view this as buying opportunity given that: (i) domestic pump-priming has yet to fully play out in terms of order-flow; and (ii) long steel remains practically the only sector on Bursa to have a positive fundamental story, yet with cheap valuations (Kinsteel: 5x 2011 FD PER). Maintain Buy, with a TP of RM1.23 (8x 2011 FD PER).

by Maybank Investment Bank

The Group manufactures and trades in a complete range of long steel products used in the manufacturing, construction and infrastructure industries.

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Malaysia Property Sector Outlook by ECMLibra

Maintain OVERWEIGHT. Spotlight on 1MDB

•  Lower amid market consolidation
The KL Property Index lost 5.1% amid weakness in global and domestic equity markets as investors confidence was spooked by concern over the European sovereign debt crisis. On major shareholding changes, Employees Provident Fund (EPF) acquired 2.5m shares in SP Setia but trimmed 0.5m shares in Sunrise last week. Meanwhile, Dato’ Dr Yu Kuan Chon acquired 1.2m in YNH Property.

•  Notable property news
There were further new flows on 1Malaysia Development Bhd (1MDB) last week as it will reportedly be the master planner for most of the federal government’s land redevelopment programme in the Klang Valley. The entity was reported to be partnering the Qatar Investment Authority for a US$5bn (approximately RM16bn) investment in real estates and energy sector. Following last week’s revelation that it will played a key role in the redevelopment of the RMAF air base in Sungai Besi, 1MDB last week was also reported by the media to be partnering Mubadala Development Co, the property arm of the Abu Dhabi government, to invest US$2bn (RM6.5bn) to develop the Kuala Lumpur International Financial District, a mixed development project on 34.4 ha along Jalan Tun Razak. The Malaysian government has handed over the site, popularly referred to as Dataran Perdana, to 1MDB. A joint venture company will be set up for a mixed development to include finance, banking, residences and retail. 

•  Maintain OVERWEIGHT
We remain bullish on the residential sub-segment of the property sector, as we believe investors’ concern on the impact of interest rate hike has been overblown. We hold the view that interest rate hike will be gradual and minimal. Further to that, property sales is driven more by sentiment, which remains buoyant, rather than interest rate alone. We like the residential sub-segment on expectation of higher sales in CY2010 amid still low interest rate and improving sentiments. We prefer laggard mid-cap property stocks such as Sunway City and Sunrise. Among non-rated property stocks, we like Mah Sing.

by ECMLibra Vickers

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TRANMIL Stock Code 7000

Chart wise : A stock could potentially bring smile after a pull back ……………
Tranmil (PN17) had on 21/5/2010 traded down to a day low of RM0.43 before rebounded to settle near day high at RM0.45. 

Next Potential Upside Target : An upside violation of RM0.485 level would likely see Tranmil to trade upward with next upside target at RM0.65. 

Entry Level  : Risk taking traders may establish buying position at RM0.41 as pull back is seen possible before the next upward move.

Stop Loss Level : Once a buying position is being established, a stop loss level at RM0.38 level must be placed for risk capital protection purpose followed by trailing stop loss strategy.

by Mercury Securities

Transmile Group offers a range of air transportation services, primarily freight.

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EONCAP stock code 5226

EON Capital (RM6.92; Hold; Price Target: RM7.30)
 
Lower overheads and taxes lift earnings
•  1Q10 net profit of RM97.8m (+59% q-o-q) was within our and market expectations
•  Net interest income inched up 1% q-o-q, but lower overheads (-15% q-o-q) and tax expense (-16% q-o-q) boosted net earnings
•  Maintain Hold and RM7.30 TP.

by HWDBS Vickers

EONCap Group is involved in commercial banking, merchant banking, finance company business and nominee and custodian services.

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IJM Corp Target Price RM6

IJM Corp BUY RM 4.85
Price Target : 12: RM 6.00 
•  Most diversified Malaysian contractor that offers resilient earnings
•  Strategy to bid for a large pool of contracts gives it the highest probability of new wins
•  Resurgence in the India construction market where IJM has a stronghold

by DBS Vickers

The activities of the Group are concentrated on construction, properties, manufacturing and quarrying, plantations and international ventures.

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Malaysia Property Stocks Outlook by ECMLibra

•  Up slightly for the week
The property sector rebounded last week with the KL  Property Index
gaining 1.8%. Selective buying was seen in large cap property investment companies such as KLCC and IGB, as well as UEM Land, IJM Land, Sunway City and Mah Sing. On major shareholding changes, Employees Provident Fund (EPF) acquired 1.1m shares in SP Setia last week, Tong Kooi Ong acquired 0.3m shares in Sunrise, and Aberdeen Asset Management and Dato’ Dr Yu Kuan Chon acquired 0.4m and 0.1m shares in YNH Property respectively.

•  Notable property news
Last week,  Naim Holdings announced plans to partner Cahya Mata Sarawak Bhd (CMS) and Bintulu Development Authority (BDA)  to build a RM1.5bn township in Samalaju, Sarawak, which will cater for the expected boom in the working population in the Samalaju Industrial Park located 80km north of Bintulu. The new township, covering an area in excess of 2,200ha, will be developed over 10 years. Naim will hold 60% of the tie-up, with CMS having 30% and BDA the balance. Another major development announced last week was the redevelopment of the Sungai Besi Royal Malaysian Air Force (RMAF) base which was purportedly agreed in principle by the cabinet. According to sources, a consortium comprising 1Malaysia Development Bhd (1MDB), Lembaga  Tabung Angkatan Tentera (LTAT) and Datuk Desmond Lim of Malton Bhd, will be developing the 162 hectare site into a multi-billion ringgit Islamic financial centre. It is said that 1MDB would hold 30% interest while Lim or Malton would hold 40% and LTAT the remaining 30%. Up north in Penang, Plenitude acquired a piece of land in Batu Ferringhi for RM45m The company said the land measures about  165,000 sq m and the transaction costs about RM273 sq m or RM25 sq ft. The company plans to develop medium-high end, semi-Ds houses and condominiums on that site.

•  Maintain OVERWEIGHT
We remain bullish on the residential sub-segment of the property sector, as we believe investors’ concern on the impact of interest rate hike has been overblown. We hold the view that interest rate hike will be gradual and minimal. Further to that, property sales is driven more by sentiment, which remains buoyant, rather than interest rate alone. We like the residential sub-segment on expectation of higher sales in CY2010 amid still low interest rate and improving sentiments. We see little upside in big cap property stocks and as such prefer laggard mid-cap property stocks such as Sunway City and Sunrise. Among non-rated property stocks, we like Mah Sing.

  above: click to enlarge

by ECM Libra

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MTOUCHE : Technical Look to moved toward RM0.30

Chart wise : In position to move towards RM0.30……………
MTouche (Stock Code 0092) had on 17/5/2010 crossed over RM0.26 hurdle to a higher day high of RM0.275 before settled at RM0.265. 

Next Potential Upside Target : With the upside violation of RM0.26 level, MTouche  would thus be likely to trade upward with an immediate upside target at RM0.30. 

Entry Level : Risk taking traders may establish buying position at RM0.25 as a small pull back is seen likely before resuming its upward move.

Stop Loss Level : Once a buying position is being established, a stop loss level at RM0.23 level
must be placed for risk capital protection purpose followed by trailing stop loss strategy.

above: MTouche chart (click to enlarge)

by Mercury Securities

The principal activities of the Company are investment holding, research and development of existing and new technologies in the field of information technology and telecommunications, and distribution and sale, installation and service of telecommunications and multimedia systems, and related activities. The principal activities of the subsidiaries are provision of mobile messaging technology services.

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Malaysia Oil and Gas Sector Stocks Outlook by ECMLibra

10th – 16th May 2010 May: Malaysia Stocks unaffected by crude dip  

•  Local share prices unaffected by crude oil dip 
Crude oil futures closed the week down again by 4.7%, close to testing the US$70 level as the markets attention has turned to high US crude oil stock levels. Besides that, negative correlation with the USD also added to weakened crude oil prices. Going forward, we believe that should the market continue to play up on news of high crude oil stock levels, crude oil prices have the potential to weaken further. At home, share prices were positive w-o-w despite crude oil prices with the exception of Petra which was down close to 5% on news of their private placement and rights issue proposal. 

•  News and views
Story of the week for the sector was surely Sime Darby’s RM964m write down for their engineering & utilities segment. Of that sum, RM514m was for their oil & gas related projects in Qatar of which they have not been able to claim variances on orders. Besides this, interesting news to note include  Perisai selling two recently bought jack-up rigs to Nagendran Nadarajah, the director which only just sold out his stake in the company to Singapore’s Ezra Shipping for RM18.3m. Next up was Petra Perdana proposing a much needed private placement (supposedly to an established shipbuilder hence Grade 1, Shin Yang, Labuan Shipyard, Coastal Contracts,  Sealink and Nam Cheong are some of the names that come to mind) followed by a rights issue that  would come with detachable warrants. The move, if it goes through,  will cause heavy dilution we believe but on the flip side, raise cash that the group badly needs now to service their operating lease, new ship deliveries and also borrowings. We made a drastic 87% slash to our FY10 numbers for Petra as we are just not confident that the group can turn in results matching last years. 

On contract news, Kencana was the winner again, snagging a RM92m job for subsea pipe installation from the Ministry  of Energy, Green Technology and Water. The contract entails the installation of the pipeline between a water treatment plant in Beaufort and Labuan, as well as other related external works.

 
•  Maintain Overweight
Some current weakness in crude oil prices does not deter us from continuing to overweight the sector.  To note, YTD  the industry has seen some RM3.2bn of jobs and we expect more in the 2H from newer developments. We continue to like Wah Seong and Dayang. 

by ECM Libra

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Malaysia Warrant trading ideas BICORP - CB

BJCORP-CB
Last Wednesday, BJCORP announced that it was purchasing 70% shareholding in Ascot Sports which was until then 70% owned by its
major shareholder, Tan Sri Dato’ Seri Vincent Tan. The acquisition PE was cheap at only 6x. Therefore, the deal is EPS accretive to BJCORP. Another major re-rating catalyst going forward is the possible award of the first NFO license in Vietnam. Of the two call warrants on BJCORP, BJCORP-CB has the lowest premium at 23%
and highest gearing at 4x. 

by ECM Libra

Berjaya Corporation is engaged in the following core activities 1. Financial Services 2. Consumer Marketing, Direct Selling & Retailing 3. Vacation Time-Share, Travel, Hotels & Resorts Development & Management 4. Recreation Development and Management 5. Property Investment & Development 6. Gaming & Lottery Management 7. Food & Beverages 8. Industrial 9. Education 10. Investment Holding & Others

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Construction and Property Sector Stocks Top Picks - HWDBS

For the property sector, demand should be supported by an improving economic outlook, rising income levels, inflationary fears (property is perceived as a good hedge against inflation), and a young population (50% below 21 years of age). The mass residential segment should still be supported as those who need to buy properties would still do so. Our top property pick is SP Setia (TP: RM4.80). 

Construction sector picking up 
We understand there has been a pick-up in the number of construction tenders as we approach the final months of the Ninth Malaysia Plan. Although competition remains keen, we see more positive project newsflow for the sector and hints of the Tenth Malaysia Plan (to be released in June 2010) in the coming months.

IJM Corp (Buy; TP RM6.00) remains our top pick in the sector and the safest proxy to the sector, because of its existing strategy to bid for a large pool of contracts. Moreover, its earnings base is the most diversified in our construction universe. Trading at 14x FY11 PE and 1.1x P/NTA vs its 1-SD historical averages of 18x and 1.3x, valuations are attractive.  We also like MRCB (Buy; TP RM2.25) and Gamuda (Buy; TP RM4.45) for exposure to the sector.

by HWDBS

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Berjaya Sports Toto Upgraded to Buy

BJTOTO Stock Code 1562
(RM4.64; Buy; Price Target: RM5.20)

New growth driver
•  Malaysia’s first legalized sports betting in Aug/Sep10, via BST’s 220 outlets and telephone
•  Agency fees (estimated 1% of sales) could boost BST’s FY10-12 earnings by 2-7%
•  Sports betting and potential Vietnam NFO licence may be next earnings growth drivers 
•  Upgrade to Buy, TP raised to RM5.20 based on DCF

by HWDBS Vickers

Berjaya Sports Toto Bhd is an investment holding company that provides management services. The principal activities of its subsidiary companies are Property development; Investment holding and trading in marketable securities; Toto betting operations; Trading in sports equipment and other related products; and Computer service for Toto betting operations

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DUFU stock code 7233

Dufu (7233) had on 10/5/2010 traded higher with a day high of RM0.59 before settled at day high. 

Chart wise : Buying volume expanded ……………

Next Potential Upside Target : With the crossover of RM0.56 level, Dufu would thus be likely to trade upward with next upside target at RM0.65. 

Entry Level : Risk taking traders may establish buying position at RM0.57 as a pull back would improve the risk reward ratio.

Stop Loss Level : Once a buying position is being established, a stop loss level at RM0.53 level must be placed for risk capital protection purpose followed by trailing stop loss strategy.

by Mercury Securities

The Company was incorporated on March 30, 2002 as a private limited company under the name of Dufu Technology Corp. Sdn Bhd. The principal activities of the Company are investment holding company of DISB, IPG and DISPL.

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PLUS Expressway : Maintain Buy TP RM4

PLUS Expressway (RM3.39; Buy; Price Target: RM4.00)
Stock Code 5052

Starting 2010 on the right foot
•  Strong 1Q10 traffic provides potential upside to PLUS’KPI
•  Asas Serba’s 7% coupon on bond could be challenging on its FCF, in our view
•  Maintain Buy, DCF-derived TP of RM4.00

by HWDBS Vickers 

The principal activities of the Company are investment holding and provision of expressway operation services. Its sole and wholly-owned subsidiary company, Projek Lebuhraya Utara-Selatan Berhad (PLUS) is involved in the operation and maintenance of a tolled expressway network comprising the North-South Interurban Toll Expressway, the New Klang Valley Expressway, and a section of Federal Highway Route 2 between Subang and Klang in Peninsular Malaysia.

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SUPERMAX - Buy On Technical

SUPERMX– RM6.86  SHORT-TERM BUY (TECHNICAL) (Stock Code: 7106)

Supermax Corporation Berhad (SUPERMX)  is an investment holding company that manufactures, sells, and exports various types of latex gloves around the world.

Above: Supermx daily chart: click to enlarge

Recommendation 
SUPERMX  fell in accordance to our report of 5 May 2010 to just below the second (RM6.19) target to RM6.10 last Friday and rebounded firmly from that level. With the oversold Stochastic buy signal, SUPERMX is likely to inch up and test the resistance and target areas of RM6.97 and RM7.45.

SHORT-TERM BUY (TECHNICAL)  on dips for  SUPERMX  with firm support areas above. We expect SUPERMX to test its upside target and resistance areas. Stop-loss is at RM6.10.

by maybank IB

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SUNCITY 6289 : Maintain Buy - HWDBS

SunCity (RM3.92; Buy; Price Target: RM4.80) Stock Code 6289

REIT in motion
•  Disposal of assets to REIT for RM3.7b (~6.6% yield; RM328m gain on disposal) – 7% higher than our expectations. 
•  Consideration in shares (SunCity to retain 38% stake in REIT) and RM2.7b cash (30% gearing for REIT)
•  Proceeds to repay debts (turning net cash), development of new offices/landbank acquisitions and working capital
•  Maintain Buy and TP of RM4.80. REIT slated for listing in Jul 2010.

by HWDBS Vickers

The Company's principal activities are that of property investment and development, property and project management, and investment holding.

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KLCI Technical : Sell and Step Aside

Technicals (as close of may 06)
FBM KLCI has peaked at 1,349.92 and a firm downside will emerge

The FBM KLCI weakened by  3.78 points to close at 1,331.87. Its resistance areas at 1,331 and 1,349 will cap market gains, whilst the weaker support areas for the FBM KLCI are located at 1,320 and 1,324. Due to the Dow’s major overnight plunge of 347.80 points, we expect the FBM KLCI to plunge initially to be followed by some minor
local bargain hunting later today. 

In the longer term, we believe that the FBM KLCI has peaked at 1,349.92 and a firm downside will emerge if local funds start selling too. It is a matter of time before the local market joins the global equity contagion to the downside. SELL and STEP ASIDE.

by Maybank IB

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MRCB - Take Profit On Rally (Technical)

MRCB– RM1.52  TAKE PROFIT (TECHNICAL)
(Stock Code: 1651)

Malaysian Resources Corporation Berhad (MRCB) provides construction and engineering services, multimedia, property development and management, and information technology services. Besides being an independent power producer, it also manufactures and sells ceramic tiles and pre-stressed spun concrete piles.

Recommendation 
MRCB peaked at its Wave 5 high of RM1.72 in April 2010 with grossly overbought and bearish divergent signals and had since fallen below its 19-day and 50-day SMA. With the bearish indicators above supporting our view of further plunges, MRCB will trend lower and test our support and downside target areas.

TAKE PROFIT (TECHNICAL) on rallies for MRCB with weaker support areas at RM1.27 and RM1.50 and downside target areas of RM1.18, RM1.27 and RM1.41.

by Maybank Investment Bank

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AIRASIA - Stock Code 5099

AirAsia (RM1.32; Buy; Price Target: RM1.95)

Positioned to ride the recovery
•  AirAsia is well-positioned to capitalize on demand
recovery with its fleet expansion program
•  Ability to fund new aircraft purchases and repay loans
no longer a major concern as operating cash flows
strengthen
•  Upgrade to Buy with RM1.95 TP based on 9x CY11F
EPS.

by HWDBS

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FABER Stock Code 1386

Faber Group (RM2.30; Buy; Price Target: RM3.55)
At a glance
•  1Q10 net profit doubled y-o-y to RM14.4m, driven by 31% revenue growth, within our and consensus expectations
•  Full contribution from Faber’s new overseas contracts (especially in UAE) drove 1Q10 earnings; overseas projects fetched better margins, lifting Faber’s pre-tax margin by 3ppts y-o-y
•  Maintain Buy and RM3.55 SOP-derived TP

by HWDBS

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KENCANA :Maintain BUY - OSK

Kencana Petroleum Secures Job in Gorgon Project

Our target price for Kencana remains unchanged at RM2.04 based on a calendarised PER of 16x FY11 EPS

Yesterday, Kencana announced that its 100%-subsidiary, Kencana HL SB, has secured purchase orders from oil and gas service company Saipem S.A, for the fabrication of LNG jetty and marine structures for Chevron Australia. This scope of the contract, which is part of the Gorgon project, comprises the provision of fabrication and supply of pre-assembled racks. The job, estimated at about RM166m, will be delivered in stages from 2QCY11 to 3QCY12.

Maintain Buy. Our target price for Kencana remains unchanged at RM2.04 based on a calendarised PER of 16x FY11 EPS. We mainly like the company’s delivery track record, even on the international arena. Also, it boasts a robust orderbook of about RM1.6bn and
tenderbook of over RM2.0bn. We think 2H10 would be an exciting quarter for the company as it is expecting the outcome of its bids for some new O&G fabrication contracts. Kencana remains one of our 3 top picks for the O&G sector besides Alam Maritim and Wah Seong. 

by OSK Research

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GPACKET Stock Code 0082 technical view

Chart wise : Selling pressure…….
GPacket had on 4/5/2010 traded higher to a day high of RM1.09 before settled at day low RM0.96.

Price Direction ….. 
In view of  an increase  in market participation, the stock could be expected to trade sideways in coming day(s) with an overhead resistance pegged at RM1.10. 

What to watch for …. 
A turnaround of prices to close above RM1.10 level would likely see an immediate short term reversing direction in the stock.

above: Gpacket Daily chart (click to enlarge)

by: Mercury Securities

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KNM - highlight

•  We maintain our HOLD call on KNM Group Bhd (KNM) with unchanged fair value of RM0.60/share based on industry’s FY10F PE of 12x.

•  KNM Group Bhd’s (KNM) audited FY09 net profit has been raised by 53% from RM171mil to RM261mil from the company’s earlier result announcement back in February. 

•  While there were some minor adjustments to revenue and costs, the highest impact to the accounts came from the additional positive tax charge of RM95mil - which stems from the recent tax incentive of RM1.4bil arising from the acquisition of Borsig for RM1.8bil (EUR372mil) back in 2008. 

•  We believe that restrictions on this valuable tax incentive is part of the reason why KNM’s substantial shareholder/group managing director Lee Swee Eng recently aborted his proposed offer (via Bluefire Capital Group) to buy KNM’s entire business at an equivalent value of RM0.90/share.

•  KNM’s auditors, KPMG has stated that the accounts give a true and fair view without any qualifications.

•  From the accounts we note that KNM made provisions for contract losses of RM38mil and unrealized foreign exchange loss of RM47mil. Including the Borsig tax adjustment, we estimate that KNM’s FY09 core net profit fell 25% to RM251mil in tandem with a 27% revenue reduction to RM1.8bil. 

•  From greater clarity of KNM’s results, it appears that our earlier FY10F-FY12 assumptions on KNM’s operating costs appear on track.

•  Positive tax charge is largely the recognition of the Borsig tax incentive as a tax asset with pre-tax profit of RM138mil. Assuming that KNM is able to claim additional tax incentives of RM95mil for FY10F-FY12F, we estimate that our earnings forecasts could be raised by 36%-48%.

•  This significant but uncommon tax effect is likely  to be adjusted to normalized rates for comparison with industry peers.  Hence, we have only marginally adjusted FY10F-FY12F earnings, as our effective tax rate assumption of 10% has not been changed. 

•  The stock currently trades at a FY10F PE of 11x – which is at the mid range of KNM’s FY07-FY09 PE band 5x-26x and roughly in line with industry.

by AM Research

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Warrant trading idea - MEDIA-WB

MEDIA-WB stock code 4502WB
With 1Q10 TV adex growing 35% y-o-y on the recovering economy, albeit from a low base last year, Media Prima with its 90% share is poised to benefit most. The privatisation of NSTP, while EPS neutral, will add some RM100m to Media Prima’s free cash flow and strengthen its balance sheet’s ability to pay more dividends. Media Prima’s 1-year forward PE stands at only 14x which  is 4x below the 6-year average. MEDIA-WB is a good way to ride Media Prima’s upside potential. 

by: ECMLibra

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Cahaya Mata Sarawak - Technical Rebound

Cahaya Mata Sarawak Berhad (stock code 2852) had on 29/4/2010 traded higher to a day  high of RM2.53 after making a lower low of RM2.41 before settled at RM2.50.

Price Direction ….. 
In view of  a decrease  in market participation, the stock could be expected to trade sideways in coming day(s) with an support pegged at RM2.30. 

What to watch for …. 
A turnaround of prices to close above RM2.70 level would likely see an immediate short term reversing direction in the stock.

above daily chart: click to enlarge

by Mercury Securities

The Group is principally engaged in cement and steel manufacturing,construction and quarry operations, road maintenance, banking, stockbroking and related financial services, property development and trading. Country: Malaysia..

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CIHLDG - Short Term Technical Buy

CIHLDG – RM2.35  SHORT-TERM BUY (TECHNICAL)
(Stock Code: 2828)

CI Holdings Berhad (CIHLDG) is engaged in investment holding, and the provision of management services to its subsidiaries. It operates in three segments: beverages, building and construction-related products, and investment holdings.

 
above: click to enlarge

Recommendation 
CIHLDG  reached its Wave 4 low of RM2.00 in April 2010 and has since risen above its 19-day and 50-day simple moving averages. With the positive  indicators above supporting our bullish view, CIHLDG has excellent potential to trend higher and test our resistance areas of RM2.43 and RM2.77.

SHORT-TERM BUY (TECHNICAL)  on dips for CIHLDG with firmer support areas at RM2.12 and RM2.35 and potential upside target areas of RM2.63 and RM2.72. Stop-loss is at RM2.10.

by Maybank Investment Bank

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