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Reports Malaysia

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

July 4, 2014, Friday, 03:08 GMT | 22:08 EST | 06:38 IST | 09:08 SGT
Contributed by Shares Investment

CIMB Research Upbeat On SapuraKencana

- A solid order book and earnings visibility are two key reasons behind CIMB Research’s Add rating on SapuraKencana Petroleum.

- The research house said that the outlook was supported by two long-term contracts in Brazil as well as various drilling and offshore construction and subsea services contracts.

- As at 10 June, SapuraKencana’s order book stood at RM30.3 billion with Brazil, the firm’s single largest market, accounting for 49 percent of it.

Significance: CIMB Research continues to value the stock at 23.4 times CY15 price-to-earnings (P/E), a 40 percent premium its implied target market P/E of 16.7 times, but within the historical P/E range of the oil and gas big caps.

Asset Injection Speculation Lifts SP Setia

- SP Setia’s share price climbed to a day-high of RM3.44 on 3 July before closing at RM3.39, up RM0.08 from its previous close, based on rumours that its major shareholder, Permodalan Nasional (PNB), could inject its unlisted assets into the firm.

- Between 2005 and 2007, PNB privatised three listed property companies – Petaling Garden, Pelangi and I&P, before organising them under a single company, I&P Group, in 2009.

- According to Maybank Investment, which cited the media, I&P Group’s asset could be worth RM10 billion.

Significance: Maybank views the merger between the two entities as a foregone conclusion and when materialised, SP Setia could emerge as the largest listed developer in the country.

Yong Tai Diversifies Into Property Development

- Together with PTS Properties, Yong Tai will develop a 29-storey luxury condominium hotel in Malacca, Malaysia, with a gross development value of RM120.9 million.

- The project, with a gross built-up area of 27,702 square metres, has a duration period of 24 months.

- Yong Tai guided that the property development segment may contribute up to 25 percent of its net profits.

Significance: The proposal is part of Yong Tai’s strategy to move into the property development business segment around the Southeast Asia region.