Reports » Malaysia

Malaysia stock market and companies daily report (September 07, 2012)

Contributed by Shares Investment

AirAsia To Leases 3 Planes From ICBC
AirAsia will add three more planes to its operating fleet by leasing them from Industrial and Commercial Bank of China Ltd (ICBC). The lease term will last for 12 years starting from the fourth quarter of  this year. The group has an operating fleet of 105 planes and a firm order of 375 A320 and A320Neo aircrafts, where 21 A320 aircrafts are due to be delivered this year, with another 21 to be delivered next year. Analysts have revised down the numbers for the budget carrier with some signifying a potential miss of full-year earnings forecast this year due to higher fuel costs, lower ancillary income and lesser incentives from Malaysia Airports Holdings (MAHB). AirAsia group net operating profit for the first half ended 30 June was RM130.94million, a marginal increase of 0.6 percent from a year ago, while revenue rose to RM2.35 billion from RM2.14 billion.
Significance: Air Asia CEO is optimistic that earnings will carry on strongly as the lag effects of lower jet fuel prices in the first half are expected to continue into the third quarter. Moreover, the budget carrier is in talks with MAHB to secure further incentives.

Affin Upgrades SP Setia To ‘Add’
Affin Investment Bank revised SP Setia’s target price to RM3.82 from RM3.60 and upgraded it from “Reduce” to “Add”. The developer’s valuations are regarded fairly attractive when considering the stock has not been on par with its peers in terms of performance and especially Malaysia’s benchmark composite stock index, according to Affin Investment Bank. Additionally, Affin is optimistic on the take-up rates for the first phase of the Battersea power plant project which involves property development. At a selling price of 900 pounds per square feet, we believe that the apartments are likely to achieve a decent take-up rate, Affin said but highlighted that the project will only contribute to SP Setia’s bottom line upon completion and delivery of the properties in 2016. At 9.25am Thursday, SP Setia was unchanged at RM3.56, while the benchmark composite index was down 0.44 percent at 1,634.02.
Significance: The 15.8-hectare Battersea Power Station project is joint-venture comprising SP Setia, Sime Darby and the Employees Provident Fund (EPF) which has a gross development value of £8 billion. The consortium have recently completed the purchase of the land and preparatory work on the development project will begin in December.

HwangDBS Keeps ‘Hold’ Call On FGVH
According to HwangDBS Vickers Research, Felda Global Ventures Holdings (FGV) plans to undertake aggressive expansion, especially to acquire plantation land bank. The company has plans to raise its sugar output and storage capacity, as well as to expand downstream via strategic overseas partnerships. Its 99-year land lease agreement for 355,864 hectares of plantation land from Felda makes the group as the world’s third largest oil palm planter. Felda Holdings, associate company of FGV, offers the group’s upstream operations with milling and downstream businesses, thus giving FGV access to 3.3 million metric tonnes of crude palm oil, or seven percent of global supply. HwangDBS Vickers Research said FGV’s improving operational efficiency should also help to propel growth, given its large fresh fruit bunch base. The research house has maintained a “hold” call on FGV’s shares of RM4.85.
Significance: Around 83 per cent of FGV’s land area is mature with the remainder expected to progressively reach maturity over the next few years. FGV has begun replanting about 15,000 hectares per annum to maintain and improve its age profile.