Friday, April 29, 2011

Kenanga downgraded KAWAN to HOLD with TP of RM1.51

Kawan Food’s 1Q11 revenue YoY grew 11.4% to RM25.9m while net profit dropped 6.7% to RM3m, bringing in slightly below our estimates. 1Q11 revenue surged 18.9% QoQ due mainly to the improved sales
from the rest of Asia, North America and Malaysia. The group’s 1Q11 net profit has decreased by 16.4% QoQ, no thanks to the high effective rate and appreciation of Ringgit Malaysia. We maintain our target price of RM1.51 that derived by using FY11 EPS of 12.6 sen and five-year sector average PE band of 12x. We have downgraded our stock recommendation to HOLD due to the limited upside from current level.

Thursday, April 28, 2011

OSK maintain TRADING BUY on Masterskill with TP of RM3.44

Masterskill Education Group's wholly-owned subsidiary, Masterskill (M) SB, has entered into an Undergraduate Articulation Program Agreement with Australia's University of Newcastle (UON). Under the agreement, UON will give one year’s advanced standing in the Bachelor of Business and Bachelor of Commerce program to Masterskill students in a number of study programs, including accounting practice and principles of marketing.

Maintain our TRADING BUY call at an unchanged FV of RM3.44 at 12x FY11 PER. Cheapest within our education sector coverage, the stock is trading at an alluring FY11 PER of 8.1x with a dividend yield of 6.2% p.a. We continue to see this as an opportune time to accumulate as the news flow on its Indonesian venture and collaboration with foreign university partners would likely grow over the next 2-3 months.

My view:
1. The recent sold down by its major shareholder SMALLCAP World Fund, Inc. ceased to be substantial shareholder on 21-Feb-2011. and "FMR LLC & FIL Limited" on 17-Feb-2011.
2. With this news about collabaration with University of Newcastle Australia, the market may have less fear about the Company's over concentration on Nursing courses.
3. Finally, market should have priced in all the fears... worst may be over (unless another major shareholder sells more). Trading opportunity is there for Masterskill..

Wednesday, April 27, 2011

OSK initiates coverage on TONGHER with TP of RM3.10

Tong Herr Resources (THR) has been a manufacturer of stainless steel nuts, bolts and screws for over 20 years, with its Malaysian base in Prai, Penang. Its recent acquisition of Metech Aluminium Industries will add aluminium extrusion products to its offering and make a full-year contribution in FY11, while the manufacture of steel billets is also on the cards. We value THR at RM3.10 based on a 10x FY11 PER, on the back of its new and future income streams, recovering ASPs and strengthening external demand. Initiate coverage with a Buy recommendation.

My view:

Hardly traded, low volume. Let's see how the market react to this.
As of 1230pm, TONGHER lost 5 sen to RM2.55 with only 13,000 shares traded.

Monday, April 25, 2011

CBIP gets RM38.35m contract from Ministry Of Health

CBIP got contract to supply 100 units ambulance 4x2 (Type “A” and “B”) inclusive medical equipment to Ministry of Health. The contract sum is RM38.35m.

Short comment:
1. It was just last Thursday the Company announced Bonus Issue. With this news flow, we should see another round of movement in CBIP share price.
2. Bear in mind that the ex-date 27-Apr-11 (this Wednesday) for distribution of interim share dividend of 1 treasury share for every 20 existing ordinary shares held.
3. The exact ex-date of the bonus issue has not been announced yet.
In short, plenty of opportunity for trading...

OSK reiterate BUY call on POS with TP of RM4.12

DRB announced that it has succeeded in its bid for Khazanah’s 32.21% stake in Pos Malaysia for RM622.8m, or RM3.60 per share. The acquisition price reflects a RM17.3m that is refundable if POSM cannot secure Government consent for commercial use of land leased to it by 31 Dec 2011. We see DRB, which owns a 70% of Bank Muamalat, as a good fit for POSM as the former could leverage on the latter’s postal network to enhance both their operations and growth as a more complete network that offer financial services. Although we see the offer price as unattractive and not reflective of the value of POSM’s related land, it still adequately reflects POSM’s postal business at 14.5x FY11 PER. Given that we see DRB aiming to redevelop POSM’s land, we maintain our SOP derived FV of RM4.12, which includes the value of the 5 land plots directly owned by POSM. While the share price may suffer some selling pressure in the short term, we maintain our BUY call on potential longer term upside arising from DRB unlocking the land value.

Friday, April 22, 2011

CBIP announced 1 to 1 bonus issue

Historically, stocks which have just announced bonus issue will shoot up in the next trading day. Let's see how high CBIP can go.

As a reference, average analyst Target Price for CBIP = RM4.78 (Lowest = RM4.65, Highest = RM5.00).

Thursday, April 21, 2011

BKAWAN: Value Stock That Market May Have Missed

Batu Kawan may be a stock that you never heard of, and yeah that's why the liquidity is low...
BUT there's something worth highlighting about the Company. These are quoted from Kenanga Research:

1. We view BKAWAN as a cheaper proxy to Kuala Lumpur Kepong (“KLK”) since BKAWAN’s 47%
stake in KLK is worth more than its own market capitalization.

2. It also trades at undemanding valuations of 8.5x FY11E PER vs. KLK’s 15.5x. We are expecting FY11E dividend yield of 5.9% and recommend a Sum-of-Parts fair value of RM19.38, implying total upside of 32.4%.

My view: Seriously, at the current market, it is hard to find Company with 5.9% dividend yield and trading at 8.5x PER only... But take note of the share low liquidity. So this stock is good for long term investor interested at dividend, rather than trading play...

Friday, April 1, 2011

TA Initiate Coverage on Crescendo with TP of RM1.87

Crescendo’s FY11 net profit came in above our expectations by 15%. The variance was largely due to the lower-than-expected tax rate. At PBT level, Crescendo’s FY11 earnings were within our forecasts. For this quarter, Crescendo has declared a final gross dividend of 5sen, bringing the total YTD gross dividend to 11sen. This was higher than our projections of 10sen and the previous year dividend payment of 7sen.

YoY, Crescendo’s FY11 net profit grew by >100% driven by: 1) 34% increase in revenue; and 2) improvement in PBT margin 7.5%pts. On the quarter-on-quarter basis, Crescendo’s 4QFY11 earning was boosted by higher top-line growth, coupled with the expansion in margins and lower effective tax rate.

We value Crescendo at 9x CY11 EPS, which is at a discount to our sector PE of 12x for the small cap property company. This discount is to factor in the concentrated risks in relation to its sole exposures to property development in Johor.

We arrive at a target price of RM1.87/share. Given the potential upside of 33%, we re-initiate coverage on Crescendo with a Buy recommendation.

For full report, you can get it free from Bursa CBRS website at

Crescendo FY11 Result Comment

This is the report from Business Times:

Crescendo Corp, a Malaysian property developer, rose the most in three months in Kuala Lumpur trading after saying fourth-quarter earnings more than trebled to RM14.3 million.

The stock climbed 3.6 per cent to RM1.46 at 9:07 a.m. local time, set for its biggest gain since Jan. 3. -- Bloomberg

Additional information:
1) Crescendo earnings for FY11 jumped 286% to RM14.3m or EPS of 8.4 sen per share.
2) Dividend announced = 5 sen for 4Q, making full year dividend at 11 sen (vs 7 sen in FY10). This translates into an attractive 7.4% dividend yield based on price of RM1.48...
3) This stock is a laggard among Iskandar stocks, reasons = low liquidity + lack of promotion from stockbrokers. But fundamentally a strong company with long history.

Quoting from the Company's Bursa announcement:

The Group has performed well for the financial year ended 31 January 2011. The revenue increased by 34% to RM215.2 million and the profit before taxation ("PBT") increased substantially by 95% to RM50.9 million as compared to the last financial year.

The higher revenue is mainly contributed from higher sales in construction services and industrial properties. The increase in PBT is contributed by higher sales as well as improved margin especially from industrial properties and construction operation.