Midas: +6.1% at $0.785 on strong volume. JPM reiterates at Overweight, says recent sell-off on Minister of Railways’ resignation presents attractive buying opportunity. Points out that the new Minister, Sheng Guangzu has stressed that China’s high speed railway investment will persist, and believes that there is little risk of major revisions to rail spending...
Adjusts TP downwards to $1.00 from $1.10, to account for 5% earnings miss in 2010. But maintains expectations for Midas to realize a solid growth in top and bottom line on back of 1) a 67% increase of installed AEP pdtn capacity from 30k tons in 2010 to 50k tons in 2011; 2) train car fabrication capacity to double from 500 cars in 2010 to 1000 cars in 2011.
Tuesday, March 1, 2011
Golden Agri
Golden Agri: UOB KayHian upgrades grp to Hold from Sell, citing recent share price weakness; tweaks its target to $0.73 from $0.75 based on 16X 2012F P/E upcycle sector valuation. Add that FY10 core net profit, +91% on to US$387m, was above its expectation, mainly on a 36% rise in CPO FOB prices offsetting a 3% fall in CPO production, margin improvement, and forex gain….
House expects earnings growth to moderate in 2011, as it tips CPO production to increase about 10%, in line with management's guidance, however expect to see higher production cost, such as fertiliser prices in 2011, which is in line with higher crude oil prices, moderate growth in CPO prices in 2011 and higher CPO export tax. House tips 2011 and 2012 net profits of US$400.6m and US$426.7m respectively. Recommends an entry price of $0.60.
House expects earnings growth to moderate in 2011, as it tips CPO production to increase about 10%, in line with management's guidance, however expect to see higher production cost, such as fertiliser prices in 2011, which is in line with higher crude oil prices, moderate growth in CPO prices in 2011 and higher CPO export tax. House tips 2011 and 2012 net profits of US$400.6m and US$426.7m respectively. Recommends an entry price of $0.60.
Ascendas India Trust
Ascendas India Trust (AIT): may be impacted by Indian budget imposing tax on Special Economic Zones (SEZ). Developers of, and units operating within, assets classed as SEZ now have to pay a minimum alternate tax (MAT) of 18.5% (wef. Apr 2012) and a dividend distribution tax of 17% (wef Jun 2011). Previously SEZs enjoyed 100% tax exemption. Meanwhile the tax benefits available for STPI assets (IT parks) - an earlier scheme - have now expired...
The higher taxes were levied despite intense industry lobbying, which is likely to continue.
AIT’s existing assets are mostly classed as IT parks. However, the acquisitions it announced in Feb 2011, as well as its development projects in its Bangalore IT park, will be classed as SEZ assets.
The higher taxes were levied despite intense industry lobbying, which is likely to continue.
AIT’s existing assets are mostly classed as IT parks. However, the acquisitions it announced in Feb 2011, as well as its development projects in its Bangalore IT park, will be classed as SEZ assets.
Sound Global
Sound Global: Citi Upgrades Co. to Buy from Sell, with $0.78 TP. Note that 2010 results slightly above forecasts. Upgrade Sound Global to Buy from Sell after the stock has fallen 28% ytd. Raise earnings by 1-3% in 2011-12 and also introduce 2013 estimates….
Note that grp looks one of the cheapest water stocks, while current valuation of 10x FY11 P/E makes it look one of the cheapest stocks among wastewater treatment Chinese
peers vs average 19x P/E of the peer range…..
Add that BOT should be the key driver, in view of China credit tightening, more local govets will likely offer more BOT (Build-Operate-Transfer) projects instead of cash projects, which carry higher margins on bearing more interest expense. Believe BOT will account for 30% of total turnover in the coming five years, from 6-8% in 2011….
Also strong balance sheet underpins BOT capex, with Co. holding net cash of Rmb1.1b or a cash balance of Rmb2.3b, which should underpin its BOT capex needs over the coming three yrs. Mgt has no equity financing plan, given the current low valuation.
Note that grp looks one of the cheapest water stocks, while current valuation of 10x FY11 P/E makes it look one of the cheapest stocks among wastewater treatment Chinese
peers vs average 19x P/E of the peer range…..
Add that BOT should be the key driver, in view of China credit tightening, more local govets will likely offer more BOT (Build-Operate-Transfer) projects instead of cash projects, which carry higher margins on bearing more interest expense. Believe BOT will account for 30% of total turnover in the coming five years, from 6-8% in 2011….
Also strong balance sheet underpins BOT capex, with Co. holding net cash of Rmb1.1b or a cash balance of Rmb2.3b, which should underpin its BOT capex needs over the coming three yrs. Mgt has no equity financing plan, given the current low valuation.
SG Banks Results Conclusion
SG Banks Results Conclusion: SG Loans and advances accelerated in Jan, growing at 16.1% YoY. Credit demand continues to broaden with general commerce growing 38.3% YoY (Dec: 32.7%). Nomura note that core holding is OCBC for strong ASEAN presence, and broad integrated product platform; DBS is showing traction in better leveraging its core franchise strengths, particularly S$CASA deposit base, although biggest kicker remains interest rate direction…..
- MS maintain forecast of 9% loan growth for 2011, expect mortgages to grow at 11.0% vs. 22.9% achieved last year. Top pick is DBS for an undervalued recovery UOB, while valuations are undemanding, has benefited from one off gains in 2010 that appear unsustainable; hence, with significant challenges in earnings growth, it is the least preferred exposure.
- CS maintain market weight, business loan growth could drive overall growth in 2011, as housing loan growth slows (mortgage applications are down ~20% after the govt property market cooling measures). SG banks expect low- to mid-teen group loan growth in 2011. OCBC remains as top pick near term.
- MS maintain forecast of 9% loan growth for 2011, expect mortgages to grow at 11.0% vs. 22.9% achieved last year. Top pick is DBS for an undervalued recovery UOB, while valuations are undemanding, has benefited from one off gains in 2010 that appear unsustainable; hence, with significant challenges in earnings growth, it is the least preferred exposure.
- CS maintain market weight, business loan growth could drive overall growth in 2011, as housing loan growth slows (mortgage applications are down ~20% after the govt property market cooling measures). SG banks expect low- to mid-teen group loan growth in 2011. OCBC remains as top pick near term.
Yongnam
Yongnam: FY2010 rev in at $335.1m -3.4%yoy but posted a net profit of $54.4m +35.7%yoy. The increase in net profit was mainly due to a shift in rev mix with more on Specialist Civil Engrg (37.0% up from 26.0% of share of rev) which enjoys better margins to Structural Steelworks. Singapore remained the main contributing region approx 90% rev...
…Co has current order book of $450m and expects to complete 60% by FY2011 which provide earnings visibility. Co has also started bidding on offshore projects such as windfarms in Europe for a new revenue growth driver and other govt projects...
LowXuYang : …On costs, Co’s impact from foreign levy hike is est to be minimal approx $1.5m in FY2011 and generally hedges steel costs by pricing it within its contracts. A 0.65c div was declared, approx 2.6% yield, and currently trades at P/E of 5.7x, other construction peers TTJ trades at 7.8x P/E, OKP at 8.9x P/E.
…Co has current order book of $450m and expects to complete 60% by FY2011 which provide earnings visibility. Co has also started bidding on offshore projects such as windfarms in Europe for a new revenue growth driver and other govt projects...
LowXuYang : …On costs, Co’s impact from foreign levy hike is est to be minimal approx $1.5m in FY2011 and generally hedges steel costs by pricing it within its contracts. A 0.65c div was declared, approx 2.6% yield, and currently trades at P/E of 5.7x, other construction peers TTJ trades at 7.8x P/E, OKP at 8.9x P/E.
BioSensors
BioSensors: CIMB Has Technical Sell Call. Note that the stock fell below its triangle support in early February and prices fell rapidly to test its 200-day SMA. Prices have since rebounded to retest this breakdown support turned resistance level as well as its resistance trend line from its Nov highs…..
Note that its moving averages could also provide some resistance at current levels. MACD is rising but remains below its zero line while its RSI is below the 60- pts mark. House note that this run from its 200-day SMA is only a rebound. Recommend aggressive traders may opt to sell now with a stop placed above $1.16. Prices could potentially fall back to retest the 200-day SMA at $0.975. Break above $1.16 would mean that a more bullish interpretation is likely and potentially a new 52-wk high.
Note that its moving averages could also provide some resistance at current levels. MACD is rising but remains below its zero line while its RSI is below the 60- pts mark. House note that this run from its 200-day SMA is only a rebound. Recommend aggressive traders may opt to sell now with a stop placed above $1.16. Prices could potentially fall back to retest the 200-day SMA at $0.975. Break above $1.16 would mean that a more bullish interpretation is likely and potentially a new 52-wk high.
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