Sie sind auf Seite 1von 4

Market Dateline PP 7767/09/2011(028730)

RHB Research Institute

RHB Equity 360°


25 October 2010 (QL, Wah Seong, Hunza; Technical: TSH, LBS)

Top Story : QL – Expansions to start contributing from FY12 onwards Outperform


Visit Note
- QL is in the midst of constructing its 13ha Breeder and 17ha Layer plant in Cianjur district, located
approximately 2 hours from Jakarta. The plant is expected to contribute 12m day old chicks/year by end
FY11 and 1m eggs/day by end FY12.
- Similarly in Tay Ninh, Vietnam, QL started construction on its egg plant in May of this year. The plant is
expected to produce 500k/eggs per day by end FY12, with similar margins as Malaysia i.e. 24-25 sen/egg
selling price and about 7-8% in PBT margins.
- For its MPM division, QL is expecting to complete Phase 1 of its new plant in Surabaya, Indonesia by Mar
2011. The Surimi and Fishmeal plant is situated on a 10ha land, and the overall cost would be around
RM30-35m. With capacity of 5k mt of Surimi and 5k mt of fishmeal, the plant will increase QL’s current
capacity by 20%.
- QL has finished planted 8,500ha of land in Eastern Kalimantan around mid of this year. By FY13, the group
aims to finish planting 15k ha. The 8,500ha that was planted is expected to mature in FY13, thus doubling
its production from FY12.
- After tweaking our ILF assumptions, our FY12-13 earnings are thus lifted by 2-6%. Our fair value is raised
slightly to RM5.50 (RM5.41 previously) based on unchanged target 16x CY11 EPS. Maintain Outperform.

Corporate Highlights

Wah Seong : Gladstone/Curtis LNG projects gets environmental green light Market Perform (up from UP)
Company Update
- The Upstream online on 22 Oct mentioned that both the Gladstone LNG and Queensland Curtis LNG had
won final environmental approvals. This clears the way for investment decisions (FID), expected by the end
of 2010. Both projects are purported to be worth around A$30bn (RM91.7bn).
- In our last update, Wah Seong’s management guided that they had limited visibility with regards to award
timelines for the Australian coal seam gas (CSG) projects. As such, the turn of events is positive. If both
projects are given the go ahead in Dec, likelihood of awards for the pipeline portion in FY11 is good. Recall,
awards for the Gorgon project was received in Oct 09, just about a month (Sep 2010) after the FID.
- Maintain forecasts at this juncture as the environmental approval does not have earnings impact as yet.
- While FY10 looks to be a watershed year, we believe that the turn of events signal that prospects down-
under are improving. As such, Wah Seong’s outlook is also beginning to look more positive.
Notwithstanding our concern on the near-term contract flows, the longer term positive outlook will now likely
provide support to the share price. Therefore we upgrade our call on the stock to a Market Perform while
our fair value is raised to RM2.21 based on 16x FY11 EPS (vs. 13x previously).

Hunza Properties : Headline net profit skewed by EIs Market Perform


1QFY11 Results
- 1QFY11 estimated core net profit of RM12.5m came in slightly below our expectation but in line with
consensus estimates. Headline net profit of RM34.7m was however skewed by exceptional items, mainly
made up of revaluation surplus amounted to RM22.1m. Sequential turnover fell 12.4%, continued to be
underpinned by progress billings from the 2 residential towers of Gurney Paragon.
- Unbilled sales continued to decline to RM82m, while take-up rate for Mutiara Seputeh, Gurney Paragon
and Infiniti improved slightly to 43%, 64% and 92%, from 34%, 63% and 87% previously.
- No change to our FY10 normalised net profit forecast, but we incorporate the EIs into our headline net
profit estimate.
- Until we see better prospects and more property launches in the pipeline, we maintain our Market Perform
call on the stock.

Technical Highlights

Daily Trading Strategy : Short-term outlook remains optimistic…


- Last Friday’s negative candle confirmed the previous day’s “star” candle and suggested that the FBM KLCI
may risk more profit-taking activities in the immediate term.
- However, immediate weakness could be limited given the firm immediate support level near the 10-day
SMA of 1,489. In fact, investors should view this as an opportunity to collect value stocks for further positive
push ahead.
- And as we reiteraited, as long as the benchmark index trades and stablises near the SMA, the short-term
outlook remains optimistic and the FBM KLCI is expected to retest the 1,500 psychological level and the
recent high of 1,503.82 soon.
- Beyond that, sentiment will turn even more bullish and it will lift the index towards the all-time high of
1,524.69 next.
- For a longer-term view, the index is well supported by the support near a technical gap of 1,472 - 1,476,
followed by the 1,450 and the 40-day SMA of 1,462.

Daily Technical Watch: TSH Resources – Uptrend is likely to be maintained going forward…
- 10-day SMA: RM2.295
- 40-day SMA: RM2.113
- Support: IS = RM2.17 S1 = RM1.99 S2 = RM1.80
- Resistance: IR = RM2.58 R1 = RM3.00 R2 = RM3.36

Weekly Trading Idea : LBS Bina – Removing the recent high will spell more rallies ahead… Bargain Buy
- Strategy: Bargain Buy for a breakout of RM0.64 soon.
- Resistance: IR = RM0.64 R1 = RM0.75 R2 = RM0.86
- Support: IS = RM0.52 S1 = RM0.40
- Exit: Cut loss if it falls below the 10-day SMA near RM0.57.

Commodities & Currencies – Yet another sign of a rebound on the greenback …


- Light Sweet Crude Oil futures (Crude): We see limited downside ahead while foreseeing buyers to return.
- Crude Palm Oil futures (CPO): A fresh penetration into the next target region of RM3,000–RM3,300.
- Ringgit (RM)/US$: The pair could stay near to the 3.07 level in the near term.
- Japanese Yen (JPY)/US$: The technical outlook on the yen remains bullish.
- Euro Dollar (EUR)/US$: The pair could see yet another chance to stage a rebound this week.
- US Dollar Index (DXY): The index to continue its consolidation this week near the 76-78 region.

Bulletin Board

Co/Sector News Impact Recom


Oil and Gas Petronas might appoint consultants Technip and Neutral. The news of a re-gasification unit to N
Worleyparsons to conduct a front-end cater to Petronas future plans is not new. We
engineering and design (FEED) study for a three believe a change to initial plans of an onshore re-
month period for the proposed re-gasification unit gasification plant instead of a FSRU would
off the coast of Melaka, close to Port Dickson. mainly be pertaining to the cost of the project.
Once the study is concluded Petronas may We await further details on the firmed up plans of
commence giving out engineering, procurement Petronas. Beneficiaries of the project would be
and construction contracts to build a jetty and MMHE for the floating structures, while for the
onshore re-gasification facilities. This would be a onshore structure beneficiaries would be
material change from its earlier plans of building companies like Dialog and Kencana.
a 3.5mtpa floating storage and re-gasification unit
(FSRU). Petronas is looking at the re-gasification
unit to be ready and operating by mid 2012.
(Financial Daily)
Rubber The Malaysian Rubber Glove Manufacturers’ As we highlighted earlier, the near-term outlook N
Glove Association is urging its members to increase for the rubber glove manufacturers remains
selling prices. This is amid strong headwind as challenging due to slowdown in orders for rubber
latex price remains high, US$ continues to gloves as latex prices remains high while the
weaken against RM and overcapacity due to US$ remains soft against RM. We believe this
consistent capacity expansion in anticipation of will hamper some glove manufacturers from
constant demand growth due to the outbreak of adjusting prices for the higher costs. In addition,
diseases in the past (Financial Daily). customers are now fully aware that there is
additional capacity in the market and have been
less willing to absorb the higher prices and opted
to run their inventory levels on the anticipation
that the latex price would eventually come down.
Hai-O Hai-O announced that its wholly owned Neutral, as the amount involved is small. We UP, FV =
subsidiary, Hai-O Properties (HOP) has entered believe that Hai-O is looking towards expanding RM2.84
into a share sale agreement with Sierra its revenue base further given that its MLM
Equatorial Development (SED) in which SED business is slowing down. However, it seems
purchases from HOP 40% of Hai-O Development questionable that they are reviving their property
for a total of RM1k. The purpose of the arm and not focusing on re-growing its core
agreement is to enter into the business of business which is MLM.
property investment and development in
Malaysia. (Bursa)

Important Dates

Company Entitlement details Ex-date Payment date


New entitlements
Hunza Properties Final single tier dividend of RM0.056 31-Dec-10 17-Jan-11

Going “ex” on 27 Oct


K-Star Sports Ltd Share split on the basis of 1-into-3 27-Oct-10 -
Eng Kah Corporation Second tax exempt interim dividend of 3.75 sen 27-Oct-10 12-Nov-10
Asia Poly Holdings Tax exempt interim dividend of 2.5% 27-Oct-10 22-Nov-10

...For more details, see individual reports attached

IMPORTANT DISCLOSURES

This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI and RHB Investment Bank Berhad (previously known as RHB Sakura Merchant Bankers
Berhad). It is for distribution only under such circumstances as may be permitted by applicable law. The opinions and information contained herein are based on generally available data believed to be reliable and are
subject to change without notice, and may differ or be contrary to opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This report is not to be construed as
an offer, invitation or solicitation to buy or sell the securities covered herein. RHBRI does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall
give rise to any claim whatsoever against RHBRI. RHBRI and/or its associated persons may from time to time have an interest in the securities mentioned by this report.

This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The securities discussed in this
report may not be suitable for all investors. RHBRI recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The
appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Neither RHBRI, RHB Group nor any of its affiliates, employees or agents accepts any liability for
any loss or damage arising out of the use of all or any part of this report.

RHBRI and the Connected Persons (the “RHB Group”) are engaged in securities trading, securities brokerage, banking and financing activities as well as providing investment banking and financial advisory services. In the
ordinary course of its trading, brokerage, banking and financing activities, any member of the RHB Group may at any time hold positions, and may trade or otherwise effect transactions, for its own account or the accounts of
customers, in debt or equity securities or loans of any company that may be involved in this transaction.

“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors, officers, employees and agents of each of them. Investors
should assume that the “Connected Persons” are seeking or will seek investment banking or other services from the companies in which the securities have been discussed/covered by RHBRI in this report or in RHBRI’s
previous reports.

This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been reviewed by, and may not reflect information known to, professionals in other business areas of
the “Connected Persons,” including investment banking personnel.

The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based upon various factors, including quality of research, investor
client feedback, stock picking, competitive factors and firm revenues.

The recommendation framework for stocks and sectors are as follows : -

Stock Ratings

Outperform = The stock return is expected to exceed the FBM KLCI benchmark by greater than five percentage points over the next 6-12 months.

Trading Buy = Short-term positive development on the stock that could lead to a re-rating in the share price and translate into an absolute return of 15% or more over a period of three months, but fundamentals are not
strong enough to warrant an Outperform call. It is generally for investors who are willing to take on higher risks.

Market Perform = The stock return is expected to be in line with the FBM KLCI benchmark (+/- five percentage points) over the next 6-12 months.

Underperform = The stock return is expected to underperform the FBM KLCI benchmark by more than five percentage points over the next 6-12 months.

Industry/Sector Ratings

Overweight = Industry expected to outperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Neutral = Industry expected to perform in line with the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Underweight = Industry expected to underperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

RHBRI is a participant of the CMDF-Bursa Research Scheme and will receive compensation for the participation. Additional information on recommended securities, subject to the duties of confidentiality, will be made
available upon request.

This report may not be reproduced or redistributed, in whole or in part, without the written permission of RHBRI and RHBRI accepts no liability whatsoever for the actions of third parties in this respect.