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Reports Malaysia

Malaysia stock market and companies daily report (February 04, 2014)

February 4, 2014, Tuesday, 05:16 GMT | 01:16 EST | 10:46 IST | 13:16 SGT
Contributed by Shares Investment

Pahang Aims For 24% Jump In Visitor Traffic
- Pahang is aiming for 3.2 million foreign tourist arrivals this year, in line with the country’s projected record international visitors of 28 million in conjunction with Visit Malaysia Year 2014. The target is a 24 percent increase over 2013’s figure of 2.6 million. It represents 26.7 percent of the state’s total tourist traffic of 12 million forecast for the 2014.
- The state of Pahang has seen foreign tourist arrivals increasing gradually, with 2011 and 2012 recording 2.4 million and 2.9 million respectively. Department of Statistics Malaysia in its domestic tourism survey for 2012 highlighted that the top five most visited places by Malaysians in Pahang were Cameron Highlands, Genting Highlands, Pantai Teluk Cempedak, Gambang Water Park and Pantai Cherating.
- Tourism Malaysia Pahang director Mohd Faharuddin Hatmin said, “One of the state’s goals for 2014 is to increase the average length of stay. In 2012, the average length of stay was 2.4 nights. Tourism Malaysia is targeting three nights.”
Significance: While 2014 is Visit Malaysia Year, the government has declared 2015 as “Year of Festivals” to keep the momentum going in line with the target of the Malaysian Tourism Plan 2020 to achieve 36 million tourist arrivals and tourism revenue of RM168 billion by 2020.
Affin IB Research Starts Coverage On IOIPG With “Reduce” Rating
- Affin IB Research has initiated coverage on IOI Properties Group (IOIPG) stating that whilst the firm’s large land bank and strong balance sheet were its key strengths, IOIPG’s low return on equity versus its top performing peers dictates operationally IOIPG was less efficient in capital management.
- In a research note, the house added IOIPG also had the highest exposure to the more volatile Singapore and China property market which jointly accounts for 50 percent of its upcoming projects’ gross development value. Strategy wise, management’s long investment timeframe and lack of dividend policy may not appeal to some investors
- Overall, the Affin IB Research opines that IOIPG’s weaknesses outweigh its strengths and thus warrants a steeper 40 percent valuation discount to revised net asset value (RNAV) compared to the average 30 percent discount applied for its peers.
Significance: Affin IB Research initiates coverage on IOIPG with a “Reduce” rating and target price of RM2.50, based on a 40 percent discount to RNAV. The target price of RM2.50 translates into an implied price-to-earnings ratio (PER) of 12.5 times, comparable to the 11 to 13 times average PER of domestic large-cap developers.
Revamp May Be On The Cards For Genting Group: CIMB Research
- CIMB Research views Genting group’s global expansion may led to a major restructuring exercise entailing the merger of Genting Berhad (GB) and Genting Hong Kong (GHK) as well as a possible listing of its US gaming assets.
- The research house pointed out that the size of GB and GHK’s gaming assets could become so large at some stage that its hypothesis of a merger between the two could come to pass. As such, the research house said that it saw a significant restructuring potential in the current structure of the Genting group as it rolled out its global footprint.
- GB would experience an acceleration in its core earnings on the back of its global expansion. The group is currently carving its global footprint in every major gateway in the world with the ultimate goal to run gaming operations in every major international market and lead in incorporating gaming as an integral part of the Asian and global leisure industry.
Significance: CIMB Research has maintained its “Overweight” call on the gaming sector, with Genting Malaysia as its top pick due to its cheap valuations (7 times 2014 EV/EBITDA, lowest among its regional peers) and significant re-rating potential stemming from its RM5 billion capital expenditure plan.