Maybank KE Research reiterates Buy on Mah Sing

From Star Online: Business
30th Sep 2013

KUALA LUMPUR: Maybank KE Research has had its attention drawn to Mah Sing Group Bhd, following the launch of phase one of the company’s Southville City project in Bangi on Saturday which attracted around 2,500 potential buyers and resulted in 1,068 units (70%) booked.

It is maintaining its Buy call with the target price unchanged at RM2.50 for the stock, which closed last week at RM2.20.

Overbuilding of mega projects could affect sectors

From The Edge Malaysia
12th Sep 2013

KUALA LUMPUR: The overbuilding of mega projects, such as the Tun Razak Exchange, the RM5 billion Warisan Merdeka Tower and the Rubber Research Institute land development in Sungai Buloh, could negatively affect the banking, property and real estate investment trust (REIT) sectors.

CIMB Research, in a recent note, said without the solid backing of fundamental demand, the overbuilding of commercial real estate could result in painful long-term issues.

“Should the project be part-funded by government-guaranteed bonds and fail, the losses would hit the government’s balance sheet and exert further pressure on the overall public debt,” said the research house.

In addition, there will be an oversupply of office space, leading to depressed rentals and yields as well as wastage of strategic land resources. The research house is also concerned that the financial sector might see its non-performing loans ratio rise as borrowers default on their loans.

Ivory Properties unit to buy/rehabilitate Plaza Rakyat for RM400m

From The Edge Malaysia
6th September 2013

"Ivory Properties said it intends to revise the development plans of the project, which encompasses a comprehensive and integrated residential, commercial and transportation hub."

KUALA LUMPUR (Sept 6): Ivory PROPERTIES Group Bhd announced that its 65% unit Ivory Place Sdn Bhd is buying the property assets of the abandoned Plaza Rakyat project in Kuala Lumpur for RM400 million.

Affin maintains "Buy" rating on AirAsia, lower TP

From The Star Online: Business
6th Sep 2013

KUALA LUMPUR: Affin Research has maintained its “Buy” call on AirAsia with a lowered target price of RM3.60 given its earnings downgrade.

“We continue to like AirAsia’s sound fundamentals, which is backed by its strong operating statistics, as well as the group’s regional growth strategy,” it said in a note on Friday.

Affin said on average, fuel accounts for about 40- 50% of AirAsia’s operating cost.

“We gather that AirAsia has hedged 30% of its financial year 2013 fuel requirement at US$123 per barrel, leaving the remaining 70% at spot price,” it said.

Masteel sanguine on domestic steel demand

From The Edge Malaysia
4th Sep 2013

LOCAL steelmakers reported a mixed bag of results for the second quarter of 2013 (2Q13). While Malaysia Steel Works (KL) Bhd (Masteel; 91 sen) and Southern Steel Bhd reported improved earnings, Ann Joo Resources Bhd, Perwaja and Kinsteel Bhd saw profit deteriorate from 1Q13. This could be attributed to a combination of factors such as differences in capacity and utilisation, product range as well as gearing levels.

Steel bar prices in the domestic market have been relatively resilient year-to-date, averaging between an estimated RM2,100 and RM2,200 per tonne, thanks to sustained local demand while raw material prices have softened slightly.

Masteel fared comparatively well. Turnover was marginally down year-on-year (y-o-y) at RM342.3 million, due to lower average selling prices for steel products, but was 3.7% higher from 1Q13, thanks to stronger volume demand. Domestic sales improved quarter-on-quarter (q-o-q), picking up the slack in exports in 2Q13.

Pre-tax profit saw an outsized decline, by 42.5% y-o-y to RM10.9 million, from RM18.9 million in 2Q12. The company attributed this to lower selling prices coupled with higher raw material costs in the latest quarter.

Favelle Favco powers on in China

From The Edge Malaysia
4th Sep 2013

FAVELLE Favco Bhd, a 61.78% owned unit of Muhibbah Engineering Bhd, began manufacturing cranes in China last year and is optimistic about its operations there, despite concerns that the country is facing a credit crunch.

The company's deputing managing director and CEO Mac Chung Hui tells The Edge that he is positive the company can secure plenty of work in mainland China.

"What we read in the papers is a little bit different from what we see on our side … nevertheless, we are monitoring the situation closely," says the 35-year-old.

A credit squeeze in China has raised fears about a slowdown in the world's second-largest economy, given its dependence on debts to finance massive projects and to fuel growth.

Favelle Favco started operations in China in February last year and delivered its first crane in 4Q2012. It is looking to deliver up to 15 tower cranes a year from its operations in China, which would add up to RM100 million a year, depending on the size of the crane ordered.

CIMB lowers UMW target price to RM12.83

From Star Online Business: Online
2nd Sep 2013

KUALA LUMPUR: CIMB Equities Research has lowered its target price for UMW Holdings from RM14.70 to RM12.83 after its second quarter results for the period ended June 30, 2013 (Q2, 2013).

It said on Monday that UMW’s losses in India were behind the results setback that took 1H13 core EPS to just 38% of its full-year forecast and 44% of consensus numbers.

“The main worry is the current and future losses for the manufacturing division on the back of rupee depreciation. We cut our EPS forecasts by 18-19% and lower our RNAV-based target price. We maintain our Neutral rating,” it said.

CIMB Research: Accumulate MRT related stocks

From The Star Online: Business
2nd Sep 2013

KUALA LUMPUR: CIMB Equities Research is advising investors to accumulate stocks with Mass Rapid Transit (MRT) exposure as re-rating could be in store once the government announces projects for execution in the medium term.

“Share-price corrections triggered by news of likely project sequencing offer a good entry point, in our view, especially for our top pick, Gamuda, which has fallen due to its high foreign shareholdings and liquidity,” it said on Monday.