Reports » Malaysia

Malaysia stock market and companies daily report (September 12, 2012)

Contributed by Shares Investment

Affin Research Maintains Buy On SapuraKencana, TP RM2.65
Affin Investment Research holds its earnings forecast and maintains its Buy rating on SapuraKencana Petroleum(SKP) with an unchanged Target Price of RM2.65, based on 18 times CY13 price-to-earnings ratio (PER). The research house is optimistic on the outlook of the Oil and Gas (O&G) industry where SapuraKencana is likely the best proxy to ride the uptrend capital expenditure cycle, as supported by its integrated business model, extensive O&G asset base and strong management track record. Recently, SapuraKencana’s joint venture SapuraAcergy Sdn Bhd secured a US$45million contract to provide a vessel in the Gulf of Mexico. The awarded contract has been agreed at a charter rate of US$360,000 a day, thus keeping the vessel occupied prior to commencement of offshore installation works in 2013 for the Australian Gorgon project and Shell’s Gumusut-Kakap.
Significance: At present, SKP has secured over RM1.5billion of new contracts making it well on track to achieve the research house‘s assumption for FY13 contract wins at RM3billion.

FGVH Plunges Further
Shares of Felda Global Ventures Holdings (FGVH) hit a new low on Tuesday, in line with the broader market sentiment prompted by the impending German ruling on Eurozone bailout funds and the US Federal Reserve’s policy decision. The group’s share price stood merely nine sen above its listing price of RM4.55 at noon on 11 September. Meanwhile, the Employers Provident Fund (EPF) had been accumulating shares of FGVH earlier this month despite the selling pressure on the stock. As of 10 September, EPF held a 6.98 percent stake in the group. RM200.65million in dividends have been announced by FGVH notwithstanding the lower earnings in the second quarter ended 30 June, where net profit fell 32.55 percent to RM188.36million despite a 75.81 percent increase in revenue to RM3.54billion. This led first half net profit to RM380.53million, 40.39 percent lower than a year ago while revenue rose 42.1 percent to RM5.25billion previously.
Significance: The continuous drop in earnings due to lower palm oil prices and lower productivity rate signals limited upside to the company’s outlook especially faced with its ageing oil palm trees that account for 53 percent of its estates. Replanting exercise would cause further loss of income for the group.

Crest Builder To Gather RM200 To RM400m In New Contracts
Crest Builder Holdings is targeting to secure between RM200million and RM400million in new contracts by the end of this year. The construction company is currently bidding for several jobs including infrastructure jobs in the Klang Valley, according to its managing director. The company currently carries around RM1billion in its order book. Crest Builder is seeking to grow its property development division, betting on projects such as the redevelopment of the Dang Wangi light rapid transit (LRT) station and the development of the 2.2 hectare land owned by Malaysia Rubber Board (MRB) along Jalan Ampang. Both Projects which have an estimated gross development value (GDV) of RM1.04billion and RM1.3billion respectively are expected to begin by the second quarter of next year.
Significance: Crest Builder is undergoing a transformation where it shifts from its traditional construction business into the property development scene by hopping into the Economic Transformation Programme play with Dang Wangi and MRB projects.