Saturday, August 27, 2011

Apple and Steve Jobs: a brand as one

Source/转贴/Extract/Excerpts: youtube
Publish date:26/08/11

Lippo-Mapletree: Value Stock, Growth Company (SIAS)

Lippo-Mapletree Indonesia Retail Trust
Increase Exposure
Value Stock, Growth Company

We initiate coverage on Lippo-Mapletree Indonesia Retail Trust Management Limited (“LMIRT”) with an Increase Exposure rating based on an intrinsic value of S$0.795, representing a price-value gap of 44.5% over its current price of S$0.550 We like LMIRT for (1) its access to acquisitions through its sponsor which we believe will have a positive impact, (2) the outlook in the retail sector in Indonesia, and (3) large gap between NAV and its current price.

Fundamental Drivers
First access to sponsor’s assets for further growth: Following the LMIRT’s May 23 news release, Lippo Karawaci had announced plans to inject S$2.4 billion of mall assets over the next three years with LMIRT having the first right of refusal. This is a response to its increasing in its stake in LMIRT and obtaining control of the management. This allows LMIRT to continue its growth strategy of acquiring key assets for ongoing growth.

Strong projected demand from favorable industry trends: According to Euromonitor, Indonesia’s disposable income and consumer expenditure had been on a rise over the past three years. This had translated into higher demand for necessities and family items as observed by Central Bank of Indonesia’s Real Retail Sales Index. Moving forward, we reckon that retail malls will continue to benefit from the growth of the Indonesian middle class.

Large disconnection between value and price: Currently, LMIRT has a 45.3% discount to its June 2011 net asset value. This has resulted in LMIRT achieving a high yield at 7.9% compared to other retail REITs. We believe that this discount is irrational in our opinion considering the company’s future growth prospects.

Sole S-REIT exposure to Indonesian retail assets: LMIRT is the only S-REIT listed in the SGX that provides exposure to the Indonesian retail market. This counter provides investors with the opportunity to gain exposure to the strong economic growth of Indonesia.

Company Introduction
LMIRT is the first and only retail REIT listed on SGX-mainboard that focuses on the management of retail assets in Indonesia. The company currently holds and manages 15 Indonesian properties in its portfolio - eight retail malls and seven spaces in strata-titled retail malls that are master leased to PT. Matahari Putra Prima Tbk (“Matahari”). So far, LMIRT has been very conservative in expanding its asset base given the fact that it has acquired only one asset, the Sun Plaza, since listing.

LMIRT’s sponsor, PT Karawaci Tbk (“LPKR”) is one of the largest listed property companies in Indonesia by assets, revenue and net profit. LPKR mainly deals with residential properties, hospitals, retail malls, urban development and asset management. LPKR also represents one of the largest shareholders of LMIRT with an effective 29.5% interest. We also note that LPKR had taken over Mapletree Group’s 40% stake in LMIRT Management recently which makes it the sole shareholder of the LMIRT Management Ltd. The large involvement of LPKR will synergize with LMIRT’s operations by the over decade long in the Indonesia’s property market. Also, this strong stake in LMIRT will also align LPKR’s interest with LMIRT.

LMIRT management is led by experienced professionals that have experience working in the Lippo Group and other financial institutions. Present CEO and executive director of LMIRT, Ms Viven Gouw Sitiabudi, has approximately 20 years of experience in management, marketing and sales and was the President Director of the Sponsor LPKR. She is currently serving as a board member in LPKR.

CFO of LMIRT Mr Alvin Cheng has more than 20 years of working experience in the banking, transportation industries and also held positions in several senior positions in financial institutions prior to joining LMIRT.

Company Strategy
LMIRT focuses primarily on managing, enhancing and acquiring Indonesian retail properties and working closely with LPKR to add value through its management expertise which will enhance its growth prospects.

Growth Strategy 1 – Organic Growth:
This growth strategy involves active portfolio management and tenant re-mixing strategies to add value to the overall business. We note that the management had put forth certain initiatives such as the annual step up rent which gradually increase rental income during the tenants’ lease life. This is a move away from the conventional flat rent agreement. The company also projects an achievable growth rate of 5-7% through positive rental reversion of their expiring leases based on recent rent renewals. This provides them with stable growth in rents. The company is also able to achieve strong economics of scale and favorable bargaining position with its retail customers through its large size.

Growth Strategy 2 – Asset Enhancement:
Another part of the company’s growth strategy is to continuously seek opportunities to enhance their asset value for potential positive rental reversion. Since IPO, LMIRT is looking for ways to initiate asset enhancement initiatives (AEI) to increase existing asset yields. As an internal mandate, LMIRT places high focus on the rate of returns as well as the payback period that these AEI will bring.

Growth Strategy 3 – Acquisitions:
Following the 23 May 2011 announcement, LPKR intends to inject a series of transactions totaling S$2.4 billion worth of assets into LMIRT within three years, translating to a growth of assets under management by 219.8%*. Currently, LMIRT is in the process of refinancing its S$125 million loan which restricts additional borrowings. With a low gearing ratio of 10.2%, there is potential for the trust to release some of its secured assets from its covenants for future borrowings that should be at an appropriate and prudent level. We estimate that the LMIRT is able to achieve a 25-30% gearing level that will provide approximately S$400 million after securing newly acquired assets

Big Daddy’s Helping Hand: One of the advantages LMIRT has over its competitors is its access to the LPKR’s development pipeline. Following LMIRT 23 May 2011 release, LPKR had stated its intention to inject S$2.4 billion worth of mall assets into LMIRT over the next three years. This provides LMIRT with the opportunity to pursue its growth strategy to value adding to its equity holders.

LPRK’s annual statements indicated that it has twenty-five malls under management which include LMIRT’s malls. In addition to these existing malls, LPKR also plans to develop an additional 15 new leased malls across Indonesia within the next five years. We note that LMIRT has the first right of refusal for any projects that LPKR intends to inject into LMIRT which is subject to LMIRT’s own internal criteria.

Evaluating LMIRT’s Potential Acquisition Strategy
State of the game
First off, we feel that LPKR’s intentions to inject retail assets into LMIRT are a plus. This is due to LMIRT’s access to LPKR’s strong pipeline and having the first right of refusal which effectively turns these potential injections into “real” options. Secondly, LMIRT has an easier time absorbing LPKR’s injections and has better transparency of LPKR’s assets.

LMIRT also has advantages with regards to third-party acquisition due to the fragment market for retail malls in Indonesia. This allows LMIRT to achieve a commanding presence among other retail malls, thereby having an upper edge in bargaining in acquisitions.

As at 2QFY11, LMIRT sits on a cash ratio of 9.0% and a gearing ratio of 10.3%. We see that the company can capitalize on the current low interest rate environment by securing loans at a low rate. As seen in their 1HFY11 presentation, cost of debt had fallen from 7.7% to 6.5% due to favorable rates on its interest rate swaps renewal. We note that the company could continue to capitalize on this environment to finance its potential acquisitions.

Phase 1: Refinancing
LMIRT would be looking at refinancing its current secured borrowings for further asset purchases through LPKR or third parties. Due to its current conservative gearing, LMIRT will have the opportunity to bring gearing closer to its statutory allowance of 35%. We understand that due to the company’s conservative stance, we roughly estimate a gearing ratio of 25-30% with the ability to fund a S$400 million purchase.

Phase 2: Acquisition
Further acquisitions by LMIRT would be dependent on LMIRT’s appetite and the assets and price offered by LPKR and the third parties. We note that LMIRT had mentioned that they have their own set of internal guidelines and forecasting to the extent of reviewing assumptions of individual tenants. Further acquisitions on top of the first S$400 million purchase should be financed should be financed through further debt and equity issue.

A Brief Analysis on Potential Acquisition
Upon performing sensitivity analysis on potential acquisition, we reckon that under reasonable scenarios, the acquisitions should be yield accretive due to the current strong retail market rental rates which allow LMIRT to maintain their asset yields assuming a higher level of gearing.

However, through observation, the main growth lies in the fact that LMIRT is able to further lever up to achieve higher returns. Our sensitivity test shows an achievable 0.8% and 1.3% increase in equity yield if the company could leverage up to the 25% and 30% gearing ratio. At the same time, the company could still achieve yield accretion even if the company acquired assets lower than the current market rental rate if the company were to use more gearing.

Our analysis highlights that even under a suppressed asset yield scenario of 9% acquired asset yield, equity yields are still well above its current distribution yield of 7.9% with an assumption if LMIRT were to lever up. We feel that this acquisition is beneficial to both the company and the shareholders by growing its total assets base and increasing its effective yield.

Company Portfolio
LMIRT’s portfolio consists of eight retail malls and seven retail spaces valued at S$1.082 billion as at the 31 December 2010. With the exception of Sun Plaza, its investment properties have been under LMIRT’s management since its IPO.

Upon a closer look, most of these assets are mainly of family malls similar to Singapore’s Parkway Parade or Jurong Point. In total, these properties have a total NLA of 398,238 sqm. In terms of portfolio composition, a large percentage of LMIRT’s portfolio in terms of NLA and valuation are retail malls in Greater Jakarta. Occupancy rates for its retail malls remain high, enjoying a high rate of 97.8% during FY10. Together with its master leased retail spaces, the total weighted average occupancy rate is at 98.3%.

Time for Action
Since LMIRT is a REIT consisting solely of Indonesian assets, it is imperative to perform a sector analysis to get a greater understanding of the value prospects of LMIRT. In particular, seven out of eight of their retail malls are located in Java which is home to approximately 60% of Indonesia’s population. Furthermore, as observed in Figure 3, a large number of retail assets under LPKR’s management lie in Greater Jakarta which will be LMIRT’s potential acquisitions.

Indonesia, a growing country:
Indonesia’s economy has been growing strongly over the past few years with a GDP CAGR of 5.6% since March 2011. Referring to Badan Pusat Statistik (BPS)*, the poverty rate** decreased from 16.7% to 13.3% and the unemployment rate went down from 10% to 7.4% in 2010. The population base is also on the rise, growing from 205.1 million to 237.6 million inhabitants, and this translates to an annual CAGR of approximately 1.5%.

Earning and Spending: Benefiting from strong economic growth, Indonesians’ disposable income had been on the rise over the past few years, gaining 9.9% CAGR over the past four years. During these periods, consumer expenditure had been constantly ranging near 95% of disposable income. These imply that consumer sentiment in Indonesia is strong with Indonesians expecting the country to continue growing and therefore not increasing their level of savings. This is good news for the retail sector with an increased consumer base.

Retail Sector in Indonesia:
The retail sector continues to look attractive to foreign and domestic retailers due to growing domestic consumption and economic growth. According to At Kearney’s 2011 Global Retail Development Index which ranks retail expansion attractiveness of emerging countries, Indonesia is the third most attractive country in East Asia for retail expansion after India and China.

Retail sales in Indonesia continue to be on the rise with Real Retail Sales Index (“RSI”) by Central Bank of Republic of Indonesia (“CBRI”) with the latest results in April 2011 growing by 1.7% on monthly basis and 15.9% on annual basis. On top of that, retail sales survey on retailers done by Bank Indonesia found that survey respondents are optimistic on growing sales for the 2nd and 3rd quarters. However, survey respondents had also expressed price inflation concerns even though the sentiments are high.

Jakarta Retail Sector
Retail properties demand remains steady: With retail sales being on the upward trend, retailers’ optimism is on a high as reported in the JLL report with steady increase in retail absorption rates in Jakarta of approximately 29,000sqm in 1QFY11. Overall vacancy rate also dropped to 10.5% in 1QFY11 from 12.8% in 4QFY10 in the absence of any major projects set up, leaving approximately 682,700sqm of vacant retail space. This reflects a 3.6% increase in absorption over the prior period. The average asking ground floor retail rental rates remained stable, hovering around RP379,883 psm pa since Q2FY09 which further implies steady market demand.

Fresh Supply of Retail Mails in Market Coming Mainly from Sponsor: The majority of the retail pipeline projects are from LMIRT’s sponsor, LPKR. LPKR will further add an estimated 286,000 and 55,000 net lettable area (NLA)* of supply from its Puri Village and Kemang Village Mall project respectively. We note that LMIRT has the opportunity to acquire these two assets which is an advantage they got over their competitors.

Family malls, a perfect fit for current domestic consumption: Based on the statistics by CBRI, the RSI showed strong growth in food and tobacco, clothing and handicrafts, arts and toys retail sales which are mostly consumer goods. Strong growth in these areas should help sales volume of retailers for family malls which represents a large portion of LMIRT’s portfolio. These led to retail optimism which we believe will assist in maintaining high occupancy rates and further opportunities for positive rent reversions in the near term.

Good entry point for LMIRT?
As can be observed in Collier International data report, Jakarta rental rates for retail malls have been largely flat despite strong consumer growth in the region. We believe that this is largely impacted by the large supply coming from completion of projects during 2010 as seen in Figure 2 which reflects the pipeline delay of projects coming from 2008-2009. The strong economic outlook will attract new participants into the retail market which will have an upward pressure for retail rental yields. As of date, we believe that this may be a good entry point for LMIRT with market rates being relatively flat.

Value Prospects
Figure 14: Rental Rates of Shopping Centres in Greater Jakarta Based on Regions
Good entry point for LMIRT?
As can be observed in Collier International data report, Jakarta rental rates for retail malls have been largely flat despite strong consumer growth in the region. We believe that this is largely impacted by the large supply coming from completion of projects during 2010 as seen in Figure 2 which reflects the pipeline delay of projects coming from 2008-2009. The strong economic outlook will attract new participants into the retail market which will have an upward pressure for retail rental yields. As of date, we believe that this may be a good entry point for LMIRT with market rates being relatively flat.

Access to assets for further growth: The first right of refusal to the assets under LPKR gives LMIRT the opportunity for yield accretion through further acquisitions. Depending on how aggressive LMIRT is, there may be some dilution risk involved through fund raising for acquisitions. However, as shown mentioned above, both current discount over NAV and the strong outlook for retail properties in Indonesia suggest little downside to its current price.

Superb distribution yields backed by cheap valuations: LMIRT’s annualized trailing distribution yields are currently standing at 7.5% which is significantly higher than the current industrial average for retail REITs at 5.7%. This is partially caused by its current cheap market valuations as observed by its large discount to RNAV at 45.3%. Being the only Indonesian retail REIT, we reckon that this high yield and discount to RNAV may be induced by country specific risk. However, we feel that this large discount for country risk may be overly unjustified.

Lower downside risk with master lessee: As mentioned above, seven of the retail spaces are master-leased to Matahari. However, this will be converted into a revenue sharing initiative after 2011 where revenue and risk will be shared between both parties. According to LMIRT, this revenue sharing initiative is floored by 2011 rent with additional rental revenue collected by Matahari shared between both parties. We note that this lease will expire ten years after converting to the revenue sharing initiative.

Positive outlook on Indonesian retail sector: As mentioned above, the growth of the consumer market will make the retail market more attractive. This will provide LMIRT with opportunities to engage in positive rental reversion and achieve high occupancy rates.

Opportunity to utilize debt for further growth: LMIRT’s management is currently looking at refinancing its existing S$125 million secured loan so as to be able to draw higher debts for its potential acquisitions. This will increase LMIRT profit if they manage to execute this.

Dilution risk: We reckon that LPKR’s potential injection of assets of up to S$2.4 billion within the course of four years might cause LMIRT to engage in equity raising that may dilute current shareholders’ value. Our take on this is that the downside risk is limited based on the following reasons:
1) First right of refusal by LMIRT will allow them to cherry-pick the best acquisitions to be made from LPKR. We believe that the experienced management team will be able to conduct good selections.

2) Downside risk from the current price is fairly limited. Assuming the acquired asset’s yield matches the current asset’s yield, for every 1% reduction in stock price will cause an even greater increase in its distribution yield.

Currency risk: Even though the Company has hedged its cashflow in Singapore dollars so as to match its distributable income, the Company does not have its capital and is therefore exposed to translation risk which could potentially breach covenants. We note that this risk doesn’t affect rental distribution in anyway.

Valuation: We conduct our valuations using the dividends discount model as S-REITs have a 90% distributable income payout mandate. For conservative purposes, we assume that there LMIRT does not have to conduct any equity issues in the first year. We estimate approximately a 1-for-1 rights issue approximately 35% discount. Based on an assumed 30% gearing ratio at 2012, this would add approximately $0.92 billion to LMIRT’s balance sheet. Recommend: Increase Exposure

Source/转贴/Extract/Excerpts: SIAS Research
Publish date:26/08/11

Tough second quarter for carriers

The Star Online > Business
Saturday August 27, 2011

Tough second quarter for carriers


THE second quarter was not an easy period for any airline. Higher average jet-fuel price of US$140 per barrel against last year's US$106 has increased airlines' fuel bills while intensifying competition among airlines has mounted pressure on yields growth.

While national carrier Malaysia Airlines (MAS) saw its operating losses widen quarter-on-quarter, the low-cost model continued to prove its resilience in a tough operating environment as low-cost carrier (LCC) AirAsia Bhd made an operating profit.

For the second quarter ended June 30, AirAsia's operating profit was 3.5% lower at RM214.8mil despite its fuel bill expanding by some RM120mil to RM441.67mil from a year ago. Overall revenue grew to RM1.08bil from last year's RM933.40mil owing to higher passenger numbers and an increase in ancillary income.

The airline's net profit, however, did come down some 47% to RM104.26mil against RM198.93mil a year ago due to a RM32.7mil deferred tax charge.

AirAsia group chief executive officer Tan Sri Tony Fernandes explains that the big swing in the quarter that just ended from an income to a charge was because there were no aircraft delivered, which impacts deferred tax balances.

“Non-operating items such as deferred taxation, foreign exchange gains/losses and fair value gains/losses on derivative financial instruments due to FRS139, which are only accounting entries, should not be included when evaluating the performance of the company,” he says in a statement.

Deferred tax asset

AirAsia's deferred tax asset arises from tax allowances that are granted when it invests in new aircraft that are to be operated in Malaysia. These allowances are subsequently utilised by offsetting taxable profits against them during each financial period.

In a financial period when no aircraft are delivered, the balance of outstanding allowances will decline, resulting in an income statement charge. In a financial period when one or more aircraft are delivered, the balance of allowances may increase, leading to a gain in the income statement.

For the second quarter, AirAsia achieved an improved passenger load factor of 81%, up four percentage points from a year ago. This contributed to a higher revenue available seat kilometre of 16.71 sen, up 6% year-on-year (y-o-y) for its Malaysian operations.

Meanwhile, ancillary income for all three operations (Malaysia, Thailand and Indonesia) grew, with the Malaysian operations reporting a 15% y-o-y growth to RM50 per pax, Thai operations reporting a 30% y-o-y growth to 405 baht per pax, and Indonesia recording a 10% growth to 139,680 rupiah per pax.

Maybank Investment Bank (IB) Research says in its report that jet fuel prices soaring by over 30% from a year ago was responsible for the big jump in the airline's unit cost of 12% y-o-y.

“Yields were up by 2%-14% y-o-y across the operating units which is considered good under the current soft environment, whereby most airlines reported y-o-y declines. Operating cashflow was strong at RM216mil in the quarter,” it adds.

CIMB Research says that the budget carrier performance was good, given a tough environment. It expects pressure on AirAsia's yields to ease, going forward, as MAS culls domestic and Asean capacity and shuts down Firefly's LCC business.

Meanwhile, MAS posted an operating loss of RM413mil for the quarter ended June 30 against RM286mil one year ago due to higher fuel cost. Net loss for the quarter just ended was RM526mil compared wiht a net loss of RM534mil in the same quarter last year, as derivative losses narrowed to RM56mil from RM217mil for the quarter ended June 30, 2010.

Total operating revenue increased by 8.5% to RM3.43bil, RM269mil higher than the revenue recorded a year ago. The revenue growth was attributable to 12% expansion in passenger load (in terms of passenger revenue kilometers) at the back of 10% capacity growth, improved seat factor by 1.5 percentage point to 75.5% and 1% improvement in passenger yield (average revenue per passenger kilometer).

However, total expenditure increased by 11.4%, or RM399mil, to RM3.9bil mainly due to an increase in fuel cost by RM448mil as the total fuel cost increased by 41% over the same period last year. Non-fuel cost was lower by 2% or RM48mil than the same quarter last year.

For the six months ended June 30, the airline posted a net loss of RM769.02mil from a net loss of RM224.68mil a year ago while revenue grew by 3% to RM6.68bil. But MAS slipped into an operating loss of RM679.92mil for the first six months of the year, a reversal of the small operating profit of RM3.89mil made one year ago.

Expected results

As the second quarter is traditionally the airline's weakest quarter of the year, MAS' poor performance was expected. Maybank IB says the second-quarter yields were dismal at 24.2 sen, a 1.3% increase y-o-y, while overall revenue per available capacity came in at 1.21 sen, down 1.1% from a year ago.

“This is ahead of the achievement of its regional peer namely Singapore Airlines (yields +0.9% y-o-y) but lower than Thai Airways (yields +9.3% y-o-y),” it says.

The research house has also revised its full-year forecast loss for the airline to RM976mil (from RM574mil). MAS management has indicated that the airline will remain loss-making in the second half of the year, although the quantum will be lower than the first half and the airline should be cashflow positive by the last quarter, thus not needing capital raising activities.

As the new management grapples with improving MAS' financials, analysts also raised concerns over some ambiguity in execution plans regarding the carrier's new business direction.

According to information made available to analysts during MAS' second-quarter results briefing recently, the present management looks set to reverse decisions made by the previous management, primarily under Datuk Seri Idris Jala and Tengku Datuk Seri Azmil Zahruddin.

CIMB Research says that instead of focusing on leisure traffic, using smaller aircraft and changing seat configuration to de-emphasise premium cabins in favour of more economy-class seating as charted out by Idris in the carrier's Business Turnaround Plan (BTP), the new MAS is looking to compete head-on with Singapore Airlines (SIA) and is aiming to recapture premium traffic that it has supposedly lost to Singapore.

“We think that the new management could be making a major strategic mistake, as Changi Airport's position and SIA's status as a full-service hub/carrier are likely to remain unchallenged for years to come,” it says.

The research house expressed its scepticism over the new MAS strategy to focus on premium traffic, as the BTP 1 in 2006 clearly analysed that Malaysia was primarily a leisure-based market rather than a business-focused market.

This analyse had led to the airline's aircraft needs being re-configured to emphasise a greater proportion of economy-class seats and fewer business-class seats.

Secondary hub

CIMB Research believes the nature of the Malaysian, Singapore and Thai travel markets have not changed between 2006 and 2011 and that KL International Airport (KLIA) remains a secondary hub compared with Changi and Bangkok's Suvarnabhumi Airport.

Aside from this, previous emphasis on serving premium customers was identified in the BTP as being the direct cause of MAS' malaise and a fleet that was misaligned to the nature of demand.

“Cabin upgrades to a generous seat pitch in economy and business' and a flat bed in first class' caused unit costs to rise while yields remained low.

“We are unclear as to what has changed to justify such a major shift in MAS' strategy from leisure-focused to premium-focused,” says the research house.

The airline's new management also told analysts that the key problem with KLIA as a full-service hub was the lack of full-service carrier (FSC) connectivity to the region and that by morphing Firefly into Sapphire (deemed a SilkAir-equivalent) offering regional FSC flights would help plug the gap between KLIA and Changi.

Absence of major carriers

“We disagree. Even if Sapphire improves regional FSC connectivity, KLIA lacks the international connecting traffic that Changi enjoys. For instance, on the kangaroo (Australia) route, British Airways and Qantas both fly to Changi and Suvarnabhumi but skip KLIA altogether.

“The absence of major carriers flying into KLIA will make it extremely difficult for MAS to execute its new premium-focused strategy as the Malaysia origin/destination market by itself obviously cannot support such premium services,” CIMB highlights.

Meanwhile, the cutting down of capacity for Asean and domestic routes by MAS' new management seems to be a departure under plans mapped out in the BTP 2, whereby the airline was to focus on strengthening its network in Asean, China and India.

OSK Research says in its report that management also pointed to more capacity cuts, notably for Asean and domestic routes.

“Management is doing this aggressively and has cancelled as many as 385 domestic flights in August and plans to cancel 63 more, realising a projected savings of RM9.8mil and available seat km reduction of 7% and 10% for Asean and domestic respectively.

“All non-profitable short routes will be terminated,” it adds.

Source/转贴/Extract/Excerpts: The Star Online
Publish date:27/08/11

Hutchison Port rebounds after recent selloff

Units of Singapore-listed Hutchison Port Holdings Trust (HPHT.SI) rose 5.6% on Friday, extending gains after traders said it was oversold and on hopes that it could benefit if the U.S. Federal Reserve pumped more stimulus into the economy.

At 10:56 a.m., units of Hutchison Port, which owns port assets, were 4.8% higher at US$0.66 ($0.80) with over 27.9 million units changing hands.
“It’s a bounce on an oversold situation,” said a local trader.

Its shares have fallen 12.5% so far this month.

“Fundamentally it doesn’t deserve the valuations it’s trading at now. Investors were pricing in negative growth next year, which I think is quite unlikely,” said Suvro Sarkar, an analyst at DBS Vickers.

He said he expects Hutchison Port to deliver an attractive distribution yield of about 9-10% next year, and recommends investors to buy the stock if it is trading below US$0.80.

Publish date:26/08/11

Bernanke offers no new stimulus

Bernanke offers no new stimulus


WASHINGTON: US central bank chief Ben Bernanke called on political leaders to do more to boost jobs and the housing market, saying the Federal Reserve could do little at this time to support economic growth.

In a speech much-awaited for news of new stimulus moves, Bernanke offered no hints that the Fed would adjust monetary policy to give the near-stagnant economy a shot of adrenalin.

Instead, he pushed the ball back to the government and fiscal policy, while adding a warning that politicians should not reprise their months-long political battle over spending and debt which he said could "seriously jeopardize" future growth.

"In the short term, putting people back to work reduces the hardships inflicted by difficult economic times and helps ensure that our economy is producing at its full potential rather than leaving productive resources fallow," Bernanke said in prepared remarks for a meeting of central bankers in Jackson Hole, Wyoming.

"Notwithstanding this observation... most of the economic policies that support robust economic growth in the long run are outside the province of the central bank."

At the same time, Bernanke said the Fed did have policy tools to help out and would be reviewing them at an expanded meeting of the Federal Open Market Committee (FOMC) policy board on September 20-21.

The Fed "is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability," he said.

Bernanke said he expected growth in the second half of the year to improve after a first half in which expansion was nearly stagnant, at a rate of less than one percent.

But, against deep hopes in markets that he would at least hint that the Federal Reserve would adjust monetary policies to add some fuel to the economy, he stressed that the work would have to be done by politicians using admittedly tightly constrained budgetary resources.

"Although the issue of fiscal sustainability must urgently be addressed, fiscal policymakers should not, as a consequence, disregard the fragility of the current economic recovery," he said.

Some analysts and investors had hoped that, with worries that the economy was sinking into recession, Bernanke might repeat what he did in a speech at the same venue almost exactly a year ago.

At that time, with the economic recovery also appearing stalled, he signalled that the Fed would move to ease monetary conditions, in what became the "QE2" "quantitative easing" programme, which injected $600 billion into the economy via Treasury bond purchases.

That move sent markets into a nine-month bull run, but ultimately failed to generate a self-sustaining recovery.

While not offering up a "QE3" on Friday, Bernanke suggested he was more confident that growth was resuming, after a second-quarter expansion estimated at just 1.0 percent.

He did not repeat the sober description of the FOMC of August 9 when it forecast growth at a "somewhat slower pace" over the coming quarters than it had earlier estimated, and warned of increasing "downside risks" to the economic outlook.

Analysts said Bernanke's speech had mainly served to put off expectations for another three weeks, giving time to see what economic data shows about growth.

"Bernanke affirmed that policy is not made on the hoof at Jackson Hole but at the FOMC, by adding to the importance of the September meeting, that will now be a two-day meeting discussing alternative tools," said economist Alan Ruskin of Deutsche Bank.

Harm Bandholz, economist at UniCredit, said the speech showed the Fed has put its own moves on hold in anticipation that growth will accelerate, negating any need for more stimulus.

"But the risks to the economic outlook are not trivial, and they are primarily skewed to the downside. That means that QE3 is not off the table," he said.

US stock markets meanwhile took the speech as a positive sign about growth, adding one percent after first plunging more than one percent on the news of no imminent stimulus. -- AFP

Publish date:27/08/11

Malaysia Airlines to join alliance by June

Malaysia Airlines to join alliance by June


SUBANG: Malaysia Airlines (MAS) has confirmed that it is on its way to be part of the oneworld alliance by the first half of next year.

Oneworld is a global alliance of airline companies which share resources and routes to save cost.

In June, MAS announced that it had been unanimously elected by the chief executives of the alliance's member airlines at the 2011 International Air Transport Association conference in Singapore.

MAS is currently a member-elect for the oneworld alliance, sponsored by Qantas Airways.

"Today, MAS remains focused in joining the oneworld alliance, following the formal invitation to join oneworld on June 6.

The airline is currently working diligently to meet the alliance requirements to ensure that it becomes a full member soonest possible, subject to the relevant regulatory approvals being obtained," MAS said in a statement yesterday.

The airline is hopeful that its oneworld alliance membership can materialise within the first half of next year to coincide with the introduction into service of its flagship A380 aircraft.

MAS is also reviewing its product offering on its new long-haul aircraft deliveries, especially the wide-body A380 and A330 aircrafts to ensure its products are "best-in-class".

With the combination of oneworld membership, "best-in-class" product and the airline's world-renowned service standards, MAS is confident that revenues and yields would improve and that 2012 would see a positive turnaround for its finances.

MAS' impending oneworld membership will also lead to easier transfers, code-shares, joint ventures and greater route access amongst alliance partners, as well as benefit passengers in terms of miles points, lounge and other rewards.

Publish date:27/08/11

Friday, August 26, 2011


Source/转贴/Extract/Excerpts: youtube
Publish date:19/08/11

2011-0818-57金錢爆(" 瑞"不可擋?)

Source/转贴/Extract/Excerpts: youtube
Publish date:18/08/11


Source/转贴/Extract/Excerpts: youtube
Publish date:17/08/11

大型股业绩差动摇基本盘 马股或下探1378点

大型股业绩差动摇基本盘 马股或下探1378点
Created 08/26/2011 - 19:35






套利退场 马股挫19点









盈利未入佳境 33%大型股业绩逊预测








年初最受看好 银行股逆转下滑








Source/转贴/Extract/Excerpts: 南洋商报
Publish date:26/08/11


Created 08/26/2011 - 19:30

蘋果公司(Apple)首席執行員喬布斯(Steve Jobs)引退,接班的庫克(Tim Cook)週四正式上任,他向員工保證將堅持傳奇人物喬布斯的致勝之道,並對公司前景表示樂觀。


這封電子郵件最先出現在科技新聞網站Ars Technica,旋即傳遍網絡。




Source/转贴/Extract/Excerpts: 星洲日報
Publish date:26/08/11


Created 08/26/2011 - 19:27






貝萊德集團(Black Rock)紐約貨幣經理蘭迪諾(Kevin Rendino)表示:“25年來我見過最反常的事之一就是標普調降美國政府評級,投資者的反應卻是轉進被降級的債券,且不計代價出脫持股。““股價震盪過於劇烈。”

標普發言人史威尼(Edward Sweeney)不願對於降評是否影響到投資者賣出股票發表評論。




Source/转贴/Extract/Excerpts: 星洲日報
Publish date:26/08/11


Created 08/26/2011 - 19:14

全美銀行業龍頭美國銀行(Bank of America Corp.)宣佈,股神巴菲特(Warren Buffett)旗下波克夏哈薩威公司(Berkshire Hathaway Inc.)將注資50億美元(約149億令吉)。

美銀今天在新聞稿中表示,美銀將賣給波克夏5萬股永續累積特別股(cumulative perpetual preferredstock),此股年股利達6%。


在投資人臆測美銀將得透過公開市場增資之際,美銀今年在紐約證券交易所(NYSE)股價已近腰斬。現年51歲的首席執行員莫乃漢(Brian T.Moynihan)曾表示,美銀沒有必要發行股票,以符合新國際資本標準,並解決不良抵押貸款相關索賠案。


美銀週四在紐約股價攀漲11%,收6.99美元,漲幅居標準普爾500指數之冠,利多在於華爾街名分析師惠特妮(Meredith Whitney)接受彭博電台專訪時指出,美銀沒有增資的迫切需求。

美銀本月宣佈,莫乃漢已同意脫手美銀的加拿大信用卡部門,其貸款餘額達86億美元,此外美銀也計劃退出英國和愛爾蘭信用卡市場。美銀已被迫沖銷信用卡和前首席執行員路易斯(Kenneth D.Lewis)收購的房貸部門。


Source/转贴/Extract/Excerpts: 星洲日報
Publish date:26/08/11

Nouriel Roubini Expects QE3

Source/转贴/Extract/Excerpts: youtube
Publish date:25/08/11


Created 08/26/2011 - 18:30

























Source/转贴/Extract/Excerpts: 星洲日報
Publish date:26/08/11


Created 08/26/2011 - 19:00

(英國‧倫敦26日訊)3年前雷曼兄弟(Lehman Brothers)倒閉時造成全球信貸市場急凍的光景令人記憶猶新,如今歐債危機與全球經濟前景疑慮恐將令銀行面臨更大挑戰。

英國每日電訊報報導,歐洲幾家大型銀行發行的金融債避險成本已創下歷史新高,其中蘇格蘭皇家銀行(Royal Bank of Scotland)的5年期信用違約交換(CDS)合約價差24日達343.54個基點(1千萬英鎊債券一年保費達34.354萬英鎊),超過2008年10月政府紓困前的水平。




在美國銀行方面也出現同樣狀況:美國銀行(Bank of America)、花旗集團(Citigroup)與摩根大通(J.P.Morgan)股價均彈高,惟債券CDS價差擴大。


Thomson Reuters報導,倫敦銀行同業拆款利率(Libor)3個月期美元利率24日升至0.31428%,創下去年8月以來新高,其與3個月期美國國庫券收益率差距(泰德價差)則略減至30個基點,23日的31個基點創下2010年6月以來新高。2007-2009年金融危機時泰德價差曾逼近100個基點,創歷史新高。

Source/转贴/Extract/Excerpts: 星洲日報
Publish date:26/08/11

Asian dry bulk rates may surge on iron ore demand

Business Times - 26 Aug 2011

Asian dry bulk rates may surge on iron ore demand

Traders watching talks between Cosco and shipowners over firm's unpaid bills

(SINGAPORE) Rates for capesize dry bulk carriers on key Asian freight routes are expected to rise over the next week on strong Chinese demand for the steelmaking ingredient iron ore.

For smaller panamax vessels, rates are also seen higher following bullish sentiment in the capesize market and steady buying for Indonesian coal, shipbrokers said yesterday.

Benchmark capesize fixture rates from Australia to China rose to a nine-month high of US$9.967 a tonne on Wednesday from US$8.608 last week on increased iron ore buying from Chinese steel mills.

Brisk construction demand has pushed Chinese mills to produce more than 1.9 million tonnes of crude steel per day since late February, up from last year's daily average of around 1.7 million tonnes. Iron ore is a key ingredient for steel.

'An exceptional week was witnessed for the capes as a fresh increase in inquires helped better balance both basins, giving a significant boost in overall rates,' said Panos Makrinos, analyst at Greek shipbroker Intermodal. 'Volatility and great uncertainty are the key factors that surround the dry cargo markets.'

Traders were closely watching ongoing talks between China Cosco and shipowners over the firm's unpaid bills, with investors uncertain how it would affect the broader market.

Cosco, the world's largest dry bulk firm, sought on Wednesday to reassure investors that negotiations would be resolved and its business remained strong.

'If more of Cosco's vessels are arrested then that would be supportive for the market as there would be less tonnage available,' said a Singapore-based trader. 'On the other hand, if shipowners concede to Cosco and reduce their rates then that could have a knock-on effect to the broader market.'

Rates for the Brazil-China route jumped to a nine- month high of US$25.838 a tonne from US$21.338 last week. The Baltic Exchange's main sea freight index rose to a near seven- month high of 1,602 points, up 2.36 per cent or 37 points. The benchmark index has risen over 25 per cent in the last two weeks.

The rate of panamax vessels travelling via the transpacific route surged to a two-month high of US$11,146 a day on Wednesday from US$9,929 last week on steady demand for Indonesian coal.

'The majority of the enquiries were reported from Indonesia, where round-trip voyages were fixed close to US$12,000 from a South China position,' said broker firm ICAP. 'The recent upward trend for short periods has led to shipowners asking up to US$14,000 for their vessels.'

In the supramax market, freight rates for shipments from Australia to Japan and South Korea, two major coal importers, rose to a two-month high of US$12,502 a day from US$11,400 last week.

Rates from the east coast of India to China also jumped to a two-month high of US$11,275 a day from US$10,623 last week\. \-- Reuters

Publish date:26/08/11

Tiger seeks rights issue to raise $155.2m

Business Times - 26 Aug 2011

Tiger seeks rights issue to raise $155.2m

Capital-raising will be backed by Singapore Airlines and Temasek


TIGER Airways is seeking a rights issue to raise $155.2 million in net proceeds that it says will oil its engines for expansion in Asia and to smoothen its turbulent ride in Australia, where it has been hit by safety concerns.

The budget carrier has proposed issuing up to 273,423,930 new shares at 58 cents apiece on the basis of one rights share for every two existing shares held by shareholders. This issue price stands at a discount of about 39 per cent to the last traded price of 95.5 cents per share yesterday.

It also represents a discount of about 30 per cent to the theoretical ex-rights price of 83 cents per share.

The capital-raising will be backed by Singapore Airlines (SIA) and Temasek Holdings, which together hold about 40.2 per cent of Tiger's issued share capital. They have undertaken to subscribe for 90 per cent of all the rights shares.

The remaining 10 per cent of the rights shares will be underwritten by the joint managers and underwriters for the rights issue, DBS Bank Ltd and Standard Chartered Securities (Singapore) Pte Limited.

'The board of directors of Tiger Airways Holdings reviews the capital structure of the company and its funding needs on a regular basis. The board sees this rights issue as an appropriate method of raising equity capital,' said Chin Yau Seng, acting chief executive officer of Tiger Airways Holdings. 'The proceeds from the rights issue will enable the company to strengthen its balance sheet and provide the company with the financial flexibility to fund its expansion plans.'

Tiger will use the net proceeds to partially fund the pre-delivery and final delivery payments for the purchase of its committed orders of aircraft which are expected to be delivered by the end of 2015, it said.

The call for cash comes two weeks after its Australia arm resumed operations following a six-week suspension imposed by the country's Civil Aviation Safety Authority (Casa).

While operations have resumed, Casa has limited the number of flights that Tiger can operate in Australia to just 18 a day, compared with 60 before the suspension.

Tiger itself also decided to scale down its Australian operations but has plans to gradually ramp up operations after the initial rationalisation.

The rights issue, which is subject to shareholders' approval at an extraordinary general meeting, among other things, is expected to be completed by mid-November 2011.

Publish date:26/08/11

Market hopes to sail north on QE III

Business Times - 26 Aug 2011

Market hopes to sail north on QE III

Investors prime themselves for what Bernanke might say today


(SINGAPORE) If a third round of quantitative easing (QE III) plays out in the United States, it could trigger a short price rally in the Singapore market, especially in blue chips that have been sold down heavily, say analysts.

Many investors have their eyes planted on Federal Reserve chairman Ben Bernanke's every move today as they await clues as to whether QE III would emerge from the central bank's annual event at Jackson Hole in Wyoming.

Many traders are hoping for news that could break the south-bound curse, which has since erased trillions of dollars off global equity markets.

If there is QE III, stocks are likely to get a breather from a marathon sell-down and perhaps see a quick bounce in the near term, say analysts.

In particular, blue chips and larger-cap counters, such as SingTel and Genting Singapore, faced with strong selling of late, are likely candidates for a sharper price rally.

Commodity counters, such as Golden Agri Resources, are also expected to benefit from further US monetary easing.

On why QE III could potentially be a positive catalyst for the sector, Kenneth Ng, head of research at CIMB, said: 'QE III will further de-base the US dollar so it will artificially prop up the nominal prices of all commodities. Commodities-related stocks could gain the most immediately after QE III.'

Having said that, there is never a perfect solution to any problem and there are always two sides to a coin.

Though further monetary easing could help buoy the US economy momentarily, it would also serve to drive the US dollar into a deeper hole.

Technology players, for instance, that draw revenue in the US dollar and settle costs in stronger currencies such as the Chinese yuan, are already facing the heat even in the absence of QE III. In addition, a weak US dollar would also place exporters between a rock and a hard place. Therefore, these counters are more likely to do better without further QE.

But according to Robert Buckland, global strategist at Citigroup, in dire times markets 'look for help from policymakers' and the main 'focus' this time would be QE III.

Mr Buckland thinks that should it happen, QE III 'would not necessarily transform prospects of profitability for the global corporate sector, which drives share prices, but it will be a short-term boost to sentiment'.

In the market, many share the same view as Mr Buckland that QE III would be more boon than bane if it pans out, as markets have already been building in some expectations of it becoming a reality during the past few days.

More pertinently, if the hopes are left unmet, the domestic equity market would likely see another slide in prices. But that said, QE III would not necessarily spell sunny days ahead either.

Brokers warn that even with QE III, any trading euphoria is likely to be short-lived as many view it as a distraction rather than a real solution to global economic ills, and there will continue to be macro headwinds for the Singapore equity landscape.

On the effect of any QE III-led rebound, head of Kim Eng Research Stephanie Wong said: 'QE III or not, we are really not that interested as any technical rebound in the market will be matched with an equal amount of profit-taking and/or cut-loss. Furthermore, the big picture is not looking so good and we hold the view that the worst is yet to come, which could probably be next year.'

So it looks like the name of the game remains the same in the medium to long term, with defensive plays staying in the limelight regardless of whether there is QE III or not.

Some favourites highlighted by brokers include Ascendas Reit, Cache Logistics Trust, CapitaMall Trust, DBS Group, Fraser & Neave, M1, SingTel and Singapore Press Holdings.

Publish date:26/08/11
S i2i: Leading The Switch Revolution To A Digital Lifestyle
By Xavier Lim and Louis Lee

In the 21st century that we live in, it is not uncommon for people to be glued to their mobile devices as they surf their favourite websites, check their stocks, or even log in to any messenger services to chat with their friends. With the world embracing a digitally connected lifestyle, we have officially moved into the era of a new kind of internet, Mobile Internet.

Moving its chess pieces with absolute finesse and careful planning, S i2i, formerly known as Spice i2i has been making significant progress in targeting key markets around the world to tap on and provide the service of “Mobile Internet” at an affordable price. Its expansion footprints marked by its “i2i belt” (Ivory Coast to Indonesia) sees S i2i’s presence in a total of 41 countries such as Indonesia, United Arab Emirates, Thailand and Singapore.

Silver Lining In Developing Markets
“The world that we live in right now is actually separated into two; namely the developed world and the developing world,” remarked Dr. Bhupendra Kumar Modi, Chairman of S i2i, during an exclusive interview with Shares Investment (Singapore).

Dr. Modi further explained that the developed countries, no doubt being fast and well-connected, are very limited by the heavy problems surrounding it. Examples like the U.S. downgrade and Eurozone crisis are putting a serious bottleneck which limits growth potential of developed countries.

“Developing countries are, however, on the different side of the pitch. Although it’s not as fast or well-connected as compared to the developed countries, the growth potential, especially that of internet usage, is one that is limitless. This is why we chose to expand S i2i’s footprints in these developing markets,” Dr. Modi said.

A compelling issue many of such developing countries are facing pertaining to setting up internet infrastructures is the high costs involved in the installation of the fibre wires. Therefore youths, whom are generally the targeted crowd for the internet wave to kick start might not even have the capability to own a PC at home, let alone having internet access. However, Dr. Modi does not see this as a bottleneck and views this as a disguised opportunity instead.

“It is not uncommon for youths in the developing countries to have their first exposure to the internet via mobile phones, because the costs of owning a PC (excluding the infrastructure costs of having good enough fibre wires to support the usage) clearly outweigh the cost of owning a mobile phone that could do the exact same thing,” Dr. Modi pointed out.

Elaborating further, Dr. Modi commented that the price of owning a computer, exclusive of internet data is about $200-$400, while a mobile phone that supports basic internet data usage of 2.5-2.75G could very well cost only $40-$50.

“This stark difference will evidently make mobile internet the more economical choice and also eradicate the need to migrate users who are accessing the internet via their computers to their mobile phones.” said Dr. Modi confidently.

Developing Low Cost Applications For The Masses

As developing markets are in the infancy stage pertaining to mobile internet, most phones run on 2.5-2.75G instead of the commonly seen 3G here. Thus, applications which are commonly supported by 3G phones may not be supported by the lower tiered bandwidth phones at all.

Having envisaged this issue beforehand, S i2i has mitigated this by working closely with Chinese developers to pre-load 50 most commonly used applications ranging from banking, shopping to movies onto its mobile handsets.

“We want to be on the side of users, why limit them to only 3G apps when the infrastructure for 3G is obviously not ready in these developing markets yet?” explained Dr. Modi.

Having the same foresight, developers of said applications are seeing the same potential in developing markets and are flocking to S i2i, effectively putting S i2i in a position where it could not only select the best application for its mobile handsets, but work on concessionary deals like profit sharing.

Sourcing Local Champions
Adhering to the basic rule of “When in Rome, be like the Romans”, S i2i has been successful in establishing a foothold in these developing markets by acquiring each country’s local leading brand, or in their coined terms, local champions. Some local champions S i2i have acquired are ‘Wellcom’ in Thailand and the Greater Mekong Sub-region, ‘CSL’ in Malaysia and ‘Nexian’ in Indonesia.

The recent acquisition of ‘Nexian’ from Affinity Group is one that is of strategic importance. The ‘Nexian’ brand name is one that is loudly heard in Indonesia. It has the second largest market share with around 25% of mobile phones supplied in Indonesia, and the said acquisition will allow S i2i to leverage upon Nexian’s substantial presence in Indonesia and penetrate the mobile internet market there.

While preserving the brand equity built up in those emerging markets, S i2i is also looking to combine all its acquisitions under one umbrella S brand. Meaning consumers in the region will soon be able to get their hands on S-Nexian, S-CSL and S-Wellcom branded phones as they make the switch to the mobile internet. S i2i also plans to launch its range of phones into the Singapore market shortly. This will allow S i2i to greater recognise the synergistic benefits of its acquisitions through an expanded retail reach and lower procurement costs from integrating its supply chain.

“Although Nokia, S i2i’s biggest competitor, has a comparatively large market share of approximately 40 percent in Indonesia, S i2i is still reaching out to its target audience without much resistance,” commented Dr. Modi.

He explained that this is because Nokia is now in the middle of a war with the big boys like Blackberry, Apple, HTC and Samsung to claw back market share in the developed markets.

“With the big players and Nokia fighting so fiercely, Nokia doesn’t really have much room to regard S i2i as an immediate threat to their market share, and this is also one of the reasons why our progress has been without much hiccups.” Dr. Modi stressed.

S i2i has also taken decisive steps to build up its technological capabilities, having entered into a strategic partnership with Mediatek Inc. through its sister company “Spice Digital”. Mediatek is a leading fabless semiconductor company for wireless communications and digital multimedia solutions with sales of US$3.9 billion in FY2010. The partnership allows S i2i to tap onto Mediatek’s chipset technologies which are currently used by top mobile phone brands across the globe.

On top of that, it is only a matter of time before the entire world moves in full gear into the era of mobile internet and ensuing digital lifestyle. Coupling this with the fact that developing markets, which i2i belt mostly consists of, will eventually match up to the same level of playing field of developed markets, S i2i looks set to lead the switch to the digital lifestyle comfortably.

Publish date:26/08/11

Hunza: FY11 Showing Weakness (Kenanga)

Hunza Properties
Price: RM1.49
Target Price: RM1.22↓
52-week range (H) 1.83
52-week range (L) 1.31
FY11 Showing Weakness

Hunza Properties (“Hunza”) FY11 net profit of RM63.7m was within the market but below our expectations. Disappointing set of results was a function of softer take-ups for its on-going projects. FY11 core earnings dipped 22% YoY given lesser new launches and slower take-ups for its completed projects. FY11 sales of RM136m (+10% YoY) met our expectations of RM137m, but we reckon that future sales will downtrend given less new launches. Lowering FY12E core net profit by 13% to RM29.8m (-24% YoY) as we assume slower FY12E sales of RM122m (-10% YoY). Final single tier dividend of 5.6sen, implying FY11 8.1sen (0% YoY; 5.4% yield). However, we are expecting lower FY12E NDPS of 3.3sen (2.2% yield) given slower earnings. Lower fair value of RM1.22 (vs. RM1.65 previously), based on 0.47x FY12E PBV (@-1.0SD of 5-year average) or trough valuations. Downgrade to SELL (from HOLD previously) given the declining earnings trends in FY12 and limited earnings visibility. Although net gearing is low at 0.04x, we believe having GP Mall on its books will restrict its landbanking opportunities, limiting future earnings growth. To recap, the cost of the mall is almost c.85% of FY12E’s shareholder’s funds.

FY11 net profit of RM63.7m was within the market but below our expectations, exceeding 4% of street’s FY11E net profit of RM61.2m but 8% below our RM69.2m. Stripping off RM24.7m revaluation gains relating to Gurney Paragon Mall (GPM), FY11 core net profit of RM39.5m came 16% below our FY11E RM47.1m. The disappointing set of results was a function of softer take-ups for its on-going projects. Positively, Gurney Paragon Mall is on schedule for completion end CY12.

FY11 core earnings dipped 22% YoY given lesser new launches and slower take-ups for its completed projects; Gurney Paragon Condo (GPC) was handed over in June 2011. 4Q11 core net profit reduced 48% QoQ to RM5.8m for the same reason, as well as, a 3.5ppt QoQ compression in 4Q11 EBITDA margins to 20.9%; we think the company is feeling impact of its fixed cost in a declining earnings environment.

FY11 sales of RM136m (+10% YoY) met our expectations of RM137m. However, we think future sales will continue to trend down. Take-up rates has not improved significantly for Gurney Paragon Condo (GPC), Infinity and Mutiara Seputeh bungalows (MS) at 73%, 95% and 92%, respectively. However, the take-up rates indicate Hunza has surpassed its breakeven points, implying lower cash flow risks. Furthermore, Hunza has not launched any new projects yet.

Lowering FY12E core net profit by 13% to RM29.8m (-24% YoY) as we assume slower FY12E sales of RM122m (-10% YoY). We are already imputing launch of Alila 2 (GDV: RM250m) in FY12, although significant earnings contributions is likelier in FY13 onwards. We hope to get further clarity on its future launches during their upcoming analyst briefing in early Sept 11. There are no more unbilled sales as GPC is completed while there are no projects under construction.

Final single tier dividend of 5.6sen, implying FY11 8.1sen (0% YoY; 5.4% yield). We are expecting lower FY12E NDPS of 3.3sen (2.2% yield) given slower earnings.

Source/转贴/Extract/Excerpts: KENANGA RESEARCH
Publish date:26/08/11

Genting Malaysia : 1H11 Largely Inline (Kenanga)

Genting Malaysia
Price: RM3.41
Target Price: RM4.40↔
1H11 Largely Inline

Genting Malaysia (“GENM”)’s 1H11 results were largely within expectations, despite 2Q11 core earnings dipping 19% QoQ as UK operations hit by luck factor. Earnings from local casino remained fairly resilient with a mild decline in bottomline as win rate dropped at VIP floor. We reiterate our OUTPERFORM call with unchanged TP of RM4.40/SOP share.

1H11 results on the dot. GENM reported 2Q11 core net profit that contracted by 19% QoQ to RM324.4m, due to weaker luck at UK casino operations. This brought 1H11 core earnings to RM731.5m, from RM577.8m last year, accounting for 51% and 50% of house and street’s FY11 full-year estimates. It declared a 3.8 sen gross DPS in 2Q11, which will go ex on 30 Sept 2011, to be paid on 21 Oct 2011.

Home turf remained solid. 2Q11 numbers from Resort World Genting continued to be strong with flattish QoQ revenue at RM1.33bn, although adjust EBITDA slid slightly by 2% QoQ to RM518.3m on luck factor. A single-digit chip drop growth in mass market has mitigated a single-digit chip volume contraction at the VIP floor. Clientele mix between VIP and Non-VIP remained at 35:65 in 2Q11 vs. 1Q11

UK got hit again by luck factor. Although business volume expanded 6% QoQ in 2Q11, Genting UK reported lower 2Q11 revenue, which plunged by 46% QoQ, due to lower hold percentage that fell c.50%. Hence, it turned to loss in adjusted EBITDA level of RM7.8m in 2Q11 from profit of RM75.9m in the preceding quarter. The loss was mainly from London's casinos, which cater for high-roller that come with higher volatility, while performance for provincial casinos was fairly stable.

The opening of Aqueduct is on tract. GENM posted RM363.1m 2Q11 construction revenue from Resort World New York against RM264.6m reported in 1Q11. Management guided that the racino is on tract to be opened in 4Q11. YTD, it incurred pre-operating expenses of RM17.3m. Elsewhere, GENM incurred RM39.4m property related termination costs for Resort World Miami.

OUTPERFORM reaffirmed. We have made no changes to our estimates. The recent weakness on GENM prices, which is inline with overall equity markets globally, provides an opportunity to accumulate the stock. We continue to like the stock for its resilient earnings with strong cash-flow generating ability. We keep our OUTPERFORM rating with unchanged price target of RM4.40/SOP share.

Source/转贴/Extract/Excerpts: KENANGA RESEARCH
Publish date:26/08/11

Fajarbaru: Take a hit from project delays (Kenanga)

Fajarbaru Builder
Price: RM0.96
Target Price: RM1.02↓
52-week range (H) 1.30
52-week range (L) 0.90
Take a hit from project delays

FY11 net profit of RM13.6m came in largely below our expectation and consensus at 45% and 52%, respectively. This is mainly due to the delays in LRT contract works, which only started in June 2011 (FY12). Its order book now stands at c. RM300m where the big chunk of the contract (RM150m) came from LRT project. We pushed forward the contract to FY12 to reflect the delays, hence, lowering our FY12E earnings by 34% to RM19m due to the delays. Hence, we downgrade Fajarbaru to HOLD with lower Target Price at RM1.02 based on an unchanged 10x PE FY12E.

Largely below expectations. FY11 net profit of RM13m came in way below our expectation and consensus at 45% and 52%, respectively. The lower than expected results was mainly due to the delays in LRT works which only started in June 2011. We understand the main reason for delays stems from land issues in Selangor where the works will take place in Awan Besar and Kelana Jaya. The net profit came down by 45% due to lack of new projects recognized during the period which also lead to substantially lower net margin from 14% to 7%.

Sequentially weak quarter. As most of the contract is at its tail end, 4Q11 net profit fell by 2% QoQ despite topline increasing 23% QoQ. We see that this lead to the absence of the new contract recognition from the newly secured LRT contract where the cost has been accounted during the period. Nonetheless, the management reiterate that works has started progressing from June 2011 onwards, which should be reflected in the 1Q12. This is evidenced by shrinking net margin from 5% to 4%, while we expect the impact to its earnings to be neutralised when revenues from LRT start to kick in by 1Q12.

What’s happening with LRT contract? The main setback for the work delays was the land issue. Thus far, total delays are now up to 6 months, since the award of contracts in March 2011. We do not expect any penalties to be imposed on Fajarbaru on this delay. To recap, Fajarbaru has been awarded as sub-contractor for TRC and Bina Puri for construction of 2 LRT stations in Awan Besar and Kelana Jaya with a combined contract value at RM150m in March 2011.

Order book stands at c. RM300m for the next 2 years. We believe the market has already factored in the LRT contract impact to Fajarbaru’s share price. Re-rating catalyst lies with securing other projects in the remaining LRT and MRT project. Riding on RM300m order book coupled with healthy balance sheet (net cash at 49sen/share), we think Fajarbaru remains a strong contender for MRT and additional LRT contract.

Lowering FY12E net profit by 34% to RM19m. We have factored in the contribution from the LRT project in our earlier FY11 forecast, which we are now pushing forward the contract to FY12 to reflect the delays.

Downgrade to HOLD with a lower Target Price of RM1.02 (from RM1.57 previously) with an unchanged 10x PE multiple on a lower FY12E EPS. The rerating catalyst will be the additional contract secured more than our anticipation of RM300m worth of new contract in FY12.

Source/转贴/Extract/Excerpts: KENANGA RESEARCH
Publish date:24/08/11

Coastal: 1H11 within expectation (Kenanga)

Coastal Contracts Berhad
Price: RM2.04
Target Price: RM3.64↔
52-week range (H) RM2.87
52-week range (L) RM1.59
1H11 within expectation

Coastal Contracts Bhd (“Coastal”)’s 1H11 net profit of RM102.7m was within both ours and consensus’ expectations. 2Q11’s revenue of RM233.8m spiked 50% QoQ on the back of higher number of OSVs delivered (total of 5 OSVs) from 3 units in the preceding quarter. However, a lower priced OSV vessel sold dragged 2Q11 net earnings which led to 17% QoQ decline to RM46.6m. Meanwhile, it is worth noting vessel manufacturing margins have normalized to 20%-25% from previous high of c.30% during buoyant days in 2008. Nevertheless, management expects orderbook replenishment to continue with upcoming vessel sale and construction of higher value and bigger OSVs in vessel building programme. Hence, we maintain FY11-12E net profit at RM217.7m-RM220.2m with unchanged Target Price of RM3.64 based on FY12E EPS of 45.6sens using 8x PER. First interim tax exempt dividend of 4.2sen was declared out of our FY11E GDPS of 9.4sen (4.6% yield). Reiterate BUY.

1H11 net profit of RM102.7m was within both ours and consensus’ full year estimate, making up 50% of street’s FY11E net profit of RM206.2m and 47.2% of our RM217.7m. 2Q11 net profit of RM46.6m slipped 17% QoQ despite corresponding revenue seeing 50% QoQ hike from higher number of delivery of high-end vessels. Management revealed that sale of lower priced vessels (good faith measure to save initial vessel order from a buyer during financial crisis in 2009) dragged 2Q11 performance. Overall, 8 vessels (5 OSVs and 3 tug & barges) were delivered in 2Q11. Meanwhile, chartering division continued to improve with >100% QoQ increase in Pre-tax profit to RM2.5m on the back of 23% QoQ stronger revenue contribution from higher overall tonnage transported. Chartering revenue remained nominal as it contributes only of 1% of total revenue.

YoY, 1H11 net profit grew 12.0% to RM102.7m, driven by delivery of 8 OSVs in total as compared to 4 units in 1H10. However, it is worth noting vessel manufacturing margins have normalized to 20%-25% from previous high of c.30% during buoyant days in 2008. 2Q11’s revenue chartering division revenue suffered 54.2% YoY decline to RM2.4m, stemming from lower fleet utilization rate.

Maintain FY11-12E net profit at RM217.7m-RM220.2m as we believe Coastal will continue to attract potential buyers and replenish its orderbook. In view of current global environment, management cautioned that potential buyers may adopt a ‘wait and see’ stance in anticipation of attractive vessel prices in the event of potential economic downturn. However, management is still optimistic of orderbook replenishment with potential vessel sales from its current vessel building programme. Additionally, Coastal is progressing up the value chain with higher specification and bigger OSV vessels construction in their new vessel building programme to meet the vessel requirements for O&G exploration into deeper water and harsher environment.

Source/转贴/Extract/Excerpts: KENANGA RESEARCH
Publish date:24/08/11

SIA: Tiger fills up its tank (KE)

Singapore Airlines (SIA SP) – Tiger fills up its tank
Previous day closing price: $10.61
Recommendation – BUY (upgraded)
Target price – $14.40 (maintained)

Singapore Airlines’ (SIA) 32.8%-owned associate Tiger Airways has announced a 1-for-2 rights issue in which it seeks to raise $158.6m. SIA will also underwrite up to 81.8% of the total issue. At a rights price of $0.58 per Tiger share, SIA’s subscription to its entitlement amounts to $51.9m and a maximum potential commitment of $77.9m. The issue will create no stress on SIA’s cash pile of around $6b.

We upgrade SIA to a BUY following the correction in its share price. Our target price of $14.40 remains, based on a P/B of 1.2x. Trough valuation in 2008 was 0.8x, which translates to a theoretical floor of $9.50. While short-term earnings are at risk, SIA’s balance sheet will enable it to weather the storm, just as it has done several times before.

Source/转贴/Extract/Excerpts: Kim Eng Research
Publish date:26/08/11


Created 08/25/2011 - 19:30



不過多數經濟學家都認為投資者的期待過度樂觀,以CNN Money的調查為例,受訪的16名經濟學家中,有12名認為伯南克不會在貨幣政策上宣佈任何調整,事實上大多數人也認為儘管此時美國就業市場疲軟、消費不振、股市下跌,聯儲局也不該馬上行動,為經濟施打強心針。









Source/转贴/Extract/Excerpts: 星洲日報
Publish date:26/08/11

YTL Land: Moving To A Bigger Stage (Hwang)

YTL Land
Moving To A Bigger Stage
BUY RM1.06
Price Target : RM2.40 (Prev RM 2.70)
At a Glance
• Results above expectation. Higher unbilled sales & strong following for launches should support earnings visibility.
• Asset injection exercise expected to complete by Oct11
• Maintain Buy, TP cut to RM2.40 (from RM2.70) based on 10% discount to RNAV of RM2.66

Comment on Results
4QFY11 net profit came in at RM9.8m, bringing full-year earnings to RM18.3m - 44% above our expectation due to higher other operating income. Gross profit fell 50%yoy with completion of D7@Sentul East commercial project in Dec10 and minimal contribution from new launches (still early stage of construction), but +26%qoq with increased contribution from D6@Sentul East commercial (handing over soon).

Earnings should pick up on the back of: a) ~RM400m unbilled sales (mainly from successful launch of Capers@Sentul East); b) RM1.7b- GDV launches over next 12-18 months (D2 & D5 commercial & Fannel condos at Sentul East, Shorefront Residences on Penang Island); and c) Recognition of progress billings from Sentosa Cove upon completion of parent YTL Corp’s asset injection exercise by Oct11 (yet to factor in our estimates).

Recall, YTL Corp is injecting prime lands in KL and Singapore into YTLL for a fair RM476m, to be satisfied by ICULS and cash (to be raised via RM221m ICULS rights issue). After securing shareholders’ approval in the recent EGM, YTLL will proceed with price-fixing for the ICULS rights issue. We advocate investors to take up the rights to participate in YTLL’s transformation into a regional developer and attractive valuation.

Maintain BUY, but cut TP to RM2.40 (from RM2.70) based on 10% discount to RNAV of RM2.66 (factoring in higher market risk premium). YTLL is our favourite to benefit from MRT interchanges (66% of RNAV) and can leverage on its strong execution track record to secure sales & participate in government land deals.

Source/转贴/Extract/Excerpts: HWANGDBS Vickers Research
Publish date:26/08/11

Sunway: Sell down overdone (Hwang)

Sunway Berhad
Sell down overdone
BUY RM2.29
Price Target : RM3.50 (Prev RM3.50)
At a Glance
• 2Q11 result in line, on track to meet full year forecast
• Selling is overdone, valuations are now at only 7x FY12 PE and 0.9x NTA
• BUY, RM3.50 TP implies 52% upside

Comment on Results
Sunway reported 2Q11 headline net profit of RM108m (+59% QoQ), taking 1H11 net profit to RM178m. This is 49% of our forecast, in line. The numbers are not comparable on YoY basis because of the recently-completed merger. 2Q11 revenue grew 20% QoQ to RM1.0bn driven by stronger construction and property revenues. Property revenue grew 17% to RM237m on the back of RM30m revenue from Jiangyin project in China, while EBIT was slightly lower at RM34m due to lower recognition from Nexis retail. Unbilled sales are healthy at RM1.7bn (1.2x FY11 property revenue). Property investment business also improvement QoQ with revenue and EBIT up 7% and 30% to RM117m and RM42m, respectively, led by leisure business and higher REIT management fees. Meanwhile, 2Q11 construction revenue jumped 40% to RM387m driven by its RM1.8bn outstanding orderbook, with EBIT margins stable at 6.3%.

We reaffirm our BUY rating for Sunway, and RM3.50 target price based on 10% discount to SOP value. In our view, the sell down of the shares post-listing is overdone, and valuations are now a steal at only 7x FY12 PE and 0.9x NTA. We continue to like its diversified property franchise, where two key projects (Sunway Velocity and Sunway Damansara) will benefit from the presence of MRT stations. Additionally, its construction and precast businesses will be strong beneficiaries of the MRT elevated works, for which Sunway has been short-listed for all three categories (civil, stations and depot).

Source/转贴/Extract/Excerpts: HWANGDBS Vickers Research
Publish date:26/08/11

Genting Malaysia: Resilient Domestic Play (Hwang)

Genting Malaysia
Resilient Domestic Play
Price Target : RM3.70 (prev. RM3.80)
At a Glance
• Results in line with expectations, interim DPS of 3.8sen declared (2Q10: 3.6sen). RWNY on track for 4Q11.
• Safe haven: Resilient local visitor arrivals, net cash
• Cut earnings marginally by 2-4% & SOP-based TP to RM3.70 (from RM3.80). Maintain Hold.

Comment on Results
2Q11 net profit ex-exceptionals came in at RM329m (-3% yoy, -21% qoq), with 1H11 earnings constituting 50-51% of our & consensus expectations. Normalised for better VIP luck factor, Malaysian gaming revenue grew 2%yoy as stronger mass drop helped cushioned lower VIP rolling chip (VIP:mass GGR split remains at 35:65). Casino patronage rose by double-digits yoy, following more aggressive marketing and Singapore IRs novelty waning (rebound in visitors from Singapore & southern states). EBITDA margin declined 5.5ppt yoy, 2.6ppt qoq to 33.7% due to higher marketing expenses and UK operations falling into the red (RM8m loss vs 1Q11’s RM76m gain) with poorer VIP luck factor in London casinos (although business volume +6%qoq). Resorts World at New York (RWNY) is on track for launch in 4Q11, which we estimate should contribute 14% to 2012F EBITDA (assuming US$250 daily win/video lottery terminal) and help diversify earnings base. Despite challenging global economic outlook, RWNY should do well given its strategic location (10min from Flushing’s Chinatown vs Yonkers’ 30min, Foxwood casino’s 2 hours) and potential for electronic table games.

We tweak our 2011-12F earnings by 2-4% to factor in weaker UK operations, recent acquisition of Miami waterfront properties (US$236m) and capex for Birmingham NEC large casino (GBP120m; targeted completion by 2014). Maintain Hold and SOP-based TP of RM3.80. GENM’s share price should continue to be supported by its share buy-back programme (Treasury shares 264m or 4% of share cap vs GENM’s 10% target).

Source/转贴/Extract/Excerpts: HWANGDBS Vickers Research
Publish date:26/08/11

HG Metal: New growth strategy looks promising (NRA)

HG Metal Manufacturing Ltd
Current Price S$0.081 25 July 2011
Fair Value S$0.151

New growth strategy looks promising
 3Q PATMI boosted by gain in fair value. HG Metal (“HGM”) recorded 95% yoy (+12% qoq) increase in sales in 3QFY11 on higher sales volume. It sold about 170k tons of steel in the first nine month of FY11, 42% higher than the same period last year. PATMI doubled to $6.6m from the preceding quarter and reversed from $0.4m loss last year. Profit was inflated by $3.6m gain in fair value for derivatives (call options and warrants) as the share price declined in 3Q. The 153m call options were exercised in July by Oriental Castle Sdn Bhd (“OCS”), leaving only 60m outstanding warrants. All else being equal, smaller issues of derivatives will result in smaller variance in fair value. EPS was 0.7 cents, 69% above our estimate.

 EBITDA margin increased 1.8ppt yoy (-2.2ppt qoq) to 5.4%. Year-on-year improvement was driven by economies of scale arising from higher sales volume while qoq decline was attributed to lower gross margin. Gross margin shrank 1.3ppt yoy and 2.2ppt qoq to 11%. EBITDA almost tripled yoy to $3.7m, but dropped 21% from the preceding quarter.

 Net gearing lowered from 0.25x as at Sep 2010 to 0.22x at June 2011 as reduction in accumulated loss outpaced increase in net borrowings. HGM intends to increase its gearing by leveraging on low borrowing costs to drive its growth strategy, in order to reduce weighted average cost of capital and thus achieve higher ROE. HGM generated negative operating cash flow of $9.9m in 3QFY11 on swollen working capital, in line with sales growth.

 Dividend en route. FY11 will mark a turnaround year for HGM following two consecutive years of loss. The last dividend payment was 0.25 cents, 6% payout based on FY08 results. Assuming the coming dividend payment matches the previous one, yield would be about 3.1%.

 Multi-pronged growth strategy. During the briefing, Mr. Goh Kian Sin, Managing Director and CEO, stressed that HGM is focusing on diversifying its business model from a commodity-based stockist to offering higher value, niche products and services. The company’s operations have been restructured into 5 business units, namely distribution, project sales, flat steel processing, long processing and specialized processing. HGM is expanding into “non-standard” product space, by adding difficult-to-attain, higher-grade products to portfolio. It also plans to widen geographical reach by leveraging Singapore as a hub to expand into ASEAN, South Asia, Middle East and Australia. To enhance customer loyalty, it is focusing on handling projects directly with end-users as well as providing customized products to meet their needs.

 Reiterate Overweight. We revised up FY11 earnings forecast by 17% to reflect higher-than-expected 3Q profits. We like the counter for its ROE which is higher than industry average, a well executed growth strategy and support from OCS in terms of expertise and network. Our target price of 15.1 cents (prev 15 cts) is based on 1x FY12 NTA.

Source/转贴/Extract/Excerpts: NRA Capital
Publish date:25/08/11

Sunway: One-off costs hit earnings (MIB)

Sunway Bhd
Buy (unchanged)
Share price: RM2.29
Target price: RM3.78 (from RM3.85)
One-off costs hit earnings

Below expectations. Sunway’s 1H11 RM132m core net profit accounted for 40% of our and consensus full-year estimates. We lower our 2011-13 earnings forecasts by 9-15% and RNAV-based TP to RM3.78 (-7sen). Sunway continues to trade at a steep 40% discount to our RNAV. Buy. Positive re-rating catalysts include potential MRT job wins. During times of uncertainties, stable rental/dividend/manager fees from investment properties would provide the cushion to its earnings.

Construction-led growth. The earnings shortfall was due to: 1) higher-than-expected re-listing costs, and 2) lower-than-expected property development (PD)’s EBIT margin. Sharp decline in PD EBIT (- 61% QoQ; due to higher contributions from low margin Jiangyin project) was offset by strong growth in construction (+>100%) and associates contributions (+>100%; SunREIT and Australia’s Wonderland Business Park), resulting in a 39% QoQ growth in 2Q core net profit.

Property sales on track. 6M11 property sales of RM884m (44% of RM2b target for 2011) was driven by its Singapore projects (21% of sales), South Quay (12%) and Australia’s Wonderland Business Park (12%). Estimated RM150m bookings from Sunway Velocity’s Phase 1 service apartment (50% booked; RM800-900psf ASP) would further lift its YTD sales to RM1b. RM1.7b unbilled sales remain healthy (1.3x our forecast), which should sustain near-term earnings.

LRT first, then MRT? Sunway’s LRT job win has lifted its outstanding order book to RM2.4b (+33% from RM1.8b as at Jun’11). YTD job wins are RM961m, 80% of our RM1.2b forecast for 2011. The LRT works are expected to start in Sept 2011 with a 29-month works period. We estimate a 2.2 EPS enhancement by 2014 (5% net margin). Sunway is confident in winning part of the RM7b-RM8b MRT elevated work packages – it has been prequalified to bid. We understand that 4 packages will be opened for tender in early Sep’11.

Forecasts lowered by 9-15% to factor in: 1) delay in the launching of Tianjin (China) project, 2) lower pretax profit margin for the Jiangyin project, and 3) higher-than-expected re-listing costs. We now expect ‘zero’ dividend in 2011 as guided by management, and lower our 2012- 13 DPS forecasts by the same 9-10% as our earnings downgrades (but based on unchanged 20% payout assumption).

Source/转贴/Extract/Excerpts: Maybank IB Research
Publish date:26/08/11

SOP: Too good to ignore (MIB)

Sarawak Oil Palms
Buy (unchanged)
Share price: RM4.20
Target price: RM6.80 (unchanged)

Too good to ignore
Explosive 2Q. SOP’s RM69m 2Q11 net profit (+132% YoY; +24% QoQ) exceeded our and market expectations, boosted by high FFB production and low all-in cost of production. We raised our 2011 earnings by 6% and reiterate our Buy call with unchanged RM6.80 TP (13x 2012 PER). With 42.5% of estates still immature, SOP offers robust 16% 3-year CAGR in FFB production, 21% 3-year CAGR EPS, and yet trades at 8x 2012 PER. Its traded EV/planted ha of RM32,000 is cheap relative to recently transacted prices exceeding RM50,000/ha.

Boosted by high FFB production. SOP’s high FFB production in 2Q of 213,648 tonnes (+41% QoQ, +35% YoY) more than offset 8% QoQ decline in CPO ASP to RM3,343/t (+32% YoY). The strong production growth was due to favourable weather and more estates coming into maturity, bearing in mind that SOP is in its high growth phase with average oil palm tree age profile of 7.5 years old. All-in cost of production was also lower at RM865/t (-29% YoY, -20% QoQ).

Low cost of production in 1H. 1H11 net profit of RM124m (+133% YoY) met 57% and 61% of our and consensus full-year forecasts. FFB production for 1H grew 30% YoY to 364,648 tonnes, and met 45% of our full year forecast. Earnings were also boosted by high 1H CPO ASP of c.RM3,460/t (+37% YoY). The high FFB production in 1H11 has led SOP to register low all-in cost of production of c.RM950/t (-16% YoY). Given present favourable weather, we expect 2H FFB output to be stronger.

Under-researched, under-valued. We tweaked our costs assumption and raised 2011 net profit forecast by 6% but maintained our 2012-13 forecasts which now impute higher labour cost. However, our 2H11 earnings expectation may prove conservative if CPO ASP exceeds our 2H CPO price assumption of RM3,000/t.

Source/转贴/Extract/Excerpts: Maybank IB Research
Publish date:26/08/11

Maybulk: Bottom of the barrel (CIMB)

Malaysian Bulk Carriers Bhd
NEUTRAL Maintained
RM2.03 Target: RM2.27
Bottom of the barrel
• Below; staying NEUTRAL. Maybulk’s interims were clearly below expectations as 1H11 core net profit accounted for only 37% of our full-year forecast and 32% of consensus and 2H should be weaker due to the expiry of the lucrative Tenaga contract signed at rates 4-5x higher than current spot rates. Tanker earnings undershot expectations because of higher dry-docking days. We slash our FY11-13 earnings estimates by 26-36% and reduce our SOP-based target price from RM2.50 to RM2.27. While the dry bulk sector is likely to remain unattractive, Maybulk offers a decent gross yield of 4.7% and its poor financial performance could already be partly in the price which has tumbled 30% YTD. We remain NEUTRAL on it. Within the bulk sector, we recommend a switch to Pacific Basin (2343 HK, Outperform) due to its cheap valuations of 0.6x FY11 P/BV.

• Lower bulk earnings. Despite the lucrative Tenaga contract and additional hire days, bulk EBIT halved yoy to RM21.4m as average daily rates fell 33% to US$17,861. Overcapacity continues to plague the dry bulk sector, resulting in weak rates for all ship segments. Apart from that, we have assumed that Maybulk will acquire three bulk vessels in 2011 and two each in 2012 and 2013. As it has yet to acquire any, we now assume no acquisition in 2011 but maintain our 2012 and 2013 forecasts.

• POSH keeps falling. 22%-owned POSH’s earnings fell to a mere RM0.3m, lower than the previous quarter’s RM1.8m and much below the RM16m quarterly average back in 2009. Management cited glut-induced weaker rates as a key reason. If POSH is not listed by end-2013, Maybulk has the right to sell its stake at 125% of the US$221m it paid back in 2008. However, management is confident that the outlook will improve and may decide to keep its stake in POSH.

Briefing highlights
Maybulk’s results briefing held last evening was hosted by its CEO Kuok Khoon Kuan who was joined by key management. Highlights are as follows. A temporary BDI spike? Management commented on the recent BDI spike which it largely attributed to capesize ships whose rates jumped from US$10,000/day to US$18,000/day in just a month. This is due to restocking by China’s steelmakers as most of them expect higher iron ore prices in the long term. Also, domestic iron ore prices in China have gone up, which makes imported iron ore more attractive.

However, the spike could be temporary as forward rates have not picked up strongly. The big increase in rates has spilled over to the smaller ship segments that Maybulk operates in, i.e. panamax and handysize, but by a much smaller quantum. Overcapacity in the market. Although there is still growth in demand, it does not match supply growth, resulting in very weak rates. However, new orders for both the bulk and tanker segments have declined as the focus has shifted to the container, LNG and LPG segments. On a global scale, order book as a percentage of current fleet for the various vessel sizes is 49% for panamax, 38% for handymax, 27% for handysize and 15% for MR tankers.

Bad weather, natural disasters and bans. The current quarter’s poor performance was also attributed to bad weather as well as the Queensland floods which affected exports. The Japan earthquake also played its part from a demand standpoint. Karnataka, a state in India, banned iron ore exports, which resulted in lower demand for bulk ships.

Extension of Tenaga COA. As the lucrative 3-year Tenaga contract has just expired, Maybulk has submitted a tender to renew the contract. At the moment, Tenaga is sourcing vessels from the spot market, in which Maybulk participates in. Negotiations are currently ongoing for a new COA but Tenaga has not decided on the terms. We expect a much lower rate for the new COA than the previous one. Panamax spot rates are currently just US$13,000/day compared to Maybulk’s previous COA rate of some US$60-90,000/day.

Hunting for bargains. Maybulk is looking to acquire newbuildings or modern secondhand vessels as management believes that prices are right and there are many distressed companies out there. However, most banks are unwilling to lend at this time due to previous bad experiences with ships. In the preceding 2-3 years after the global financial crisis, management opted for growth mainly through long-term leases, which worked out pretty well as prices of vessels have continued to decline and Maybulk did not need to invest equity capital.

Source/转贴/Extract/Excerpts: CIMB Research
Publish date:25/08/11

TIGER AIRWAYS: downgrade to Neutral (limtan)

26 August 2011
S$0.955-TIGR.SI / S$10.61-SIAL.SI
􀁺 Tiger’s share price is likely to take another hit, despite (a) the rights issue being heavily discounted; and (b) SIA and Temasek’s morethan- full support.

􀁺 Tiger’s rights issue is on the basis of 1-for-2 at 58 cents a share, representing 30% discount to the theoretical ex-rights price of 83 cents (2x95.5 + 1x58 / 3)

􀁺 SIA and Temasek, which own 32.8% and 8% respectively of Tiger, will not only take up their entitlement in full, but also excess shares representing up to 90% of the total rights shares. Assuming no one else takes up his entitlement, their combined stake would be 56%. A whitewash waiver from having to launch a general offer has been obtained from SIC.

􀁺 The likely “disappointment” for Tiger can be attributed to (a) expectation of privatization by SIA; and (b) expectation of Tiger “cutting loss” in Australia.

􀁺 The latter now not only looks increasingly unlikely with SIA clearly in “control” of Tiger, some may also point to Qantas’ recent decision to “come to” either Singapore or KL to set up an Asian hub for its international operations.

􀁺 We maintain SELL for Tiger, and a downgrade to Neutral for SIA, especially now that its generous dividend for ye Mar ’11 is out of the picture.

Source/转贴/Extract/Excerpts: Limtan
Publish date:26/08/11
Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)

乔治·索罗斯(George Soros)



高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo

There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
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