Technical | Fundamental Analysis Discussion Stocks Listed In Bursa

Wednesday, March 31, 2010

Favelle, KPJ, NEM, Tenaga, EON

DJ MARKET TALK: EON Capital May Rise On Revived HL Bank Offer


0011 GMT [Dow Jones] EON Capital (5266.KU) may rise to test MYR7.10 vs yesterday's close at MYR7.03 (unchanged) says dealer; this following Hong Leong Bank's (5819.KU) MYR4.92 billion (MYR7.10/share) revived offer Tuesday for EON Capital's assets, liabilities. "The revived offer from Hong Leong Bank is not a surprise after the appointment of seven new (EON Capital) directors who are in favor of a deal with Hong Leong," says dealer. "The offer price has not changed...whether or not this will be accepted by the new board remains to be seen, but the chances have improved." Hong Leong Bank's offer in January was rejected by EON Capital's then directors as it "significantly undervalues" the company. EON Capital has to revert to Hong Leong Bank on this offer by April 5 or it will lapse

DJ MARKET TALK: IOI Corp May Rise On Asset Acquisition Plans


0008 GMT [Dow Jones] IOI Corp (1961.KU) may rise to test resistance at MYR5.45 (March 19 high) on optimism company will soon make key acquisitions to expand plantation, property businesses; this after Executive Director Lee Yeow Chor tells Dow Jones Newswires IOI has identified acquisition opportunities, including planted oil palm estates in Indonesia, land for property development in Malaysia and Singapore. Lee adds, despite drop in palm oil production in 1H FY10, there's chance recovery in output in 2H FY10 may be enough to help IOI match FY09 production; tips 3-5% growth in output in FY11; Lee also says IOI set to launch S$1.1 billion Singapore property project in April. "It will be positive for the company if it indeed acquires estates that are already planted and are productive these will immediately contribute to earnings," dealer says; adds, however, lack of details on timing, pricing of acquisitions may cap gains. IOI ended 0.2% lower at MYR5.39 yesterday.

DJ MARKET TALK: Tenaga May Rise On Higher Power Demand Forecast


2352 GMT [Dow Jones] Tenaga Nasional (5347.KU) may rise to test 200-day moving average of MYR2.13, says dealer with local brokerage; this after Tenaga CEO Che Khalib says FY2010 power demand growth likely to come in at 6%-7%, higher than earlier guidance of 2%-3%; adds PM's comments on New Economic Model, tariffs, subsidies, positive and may reignite foreign interest in stock; also government may announce power tariff before June. "The higher power demand guidance and possible electricity hike may rekindle interest in the stock," says dealer. Tuesday, stock closed flat at MYR8.02.

DJ MARKET TALK: Malaysia NEM "A Positive Step" -Capital Economics


2349 GMT [Dow Jones] Malaysia's New Economic Model (NEM), published Tuesday, "is a positive step toward promoting long-term economic reform," says Capital Economics. Notes, boosting foreign investment, lifting education standards, reducing role of government is right way to increase trend GDP growth. House awaits more details to come in 3Q, says "implementation of reforms will surprise on the upside and lift KL equities." Adds, NEM aims to lift Malaysia to developed country status by 2020; requires boosting GDP growth to 6.5% on-year from the 4%-5% since late-1990s; "strategy outlined today for doing this looks about right." Notes, markets already expect more state sector sell-offs; "this should lift KL stocks, which have gained in recent weeks. The price/earnings ratio is still reasonable at around 16 times 2010 earnings and provides scope for more upside too." Forecasts KLCI at 1,500 by end-2010, +14% from Tuesday's close at 1,319. Maintains long-held view GDP will expand by 5.0% this year, noting Bank Negara recently lifted GDP forecast, is now broadly in line with house's 2010 view.

DJ MARKET TALK: KPJ Healthcare May Rise On Higher Profit Guidance


2348 GMT [Dow Jones] KPJ Healthcare (5878.KU) may rise to test MYR3.00 (yesterday's intraday high) vs yesterday's close at MYR2.86 (down 3.7%) says dealer; this after MD of country's largest private healthcare Siti Sa'diah Sheikh Bakir says expects 2010 net profit to grow minimum 19% this year on expansion in number of hospitals, rising healthcare demand. Siti Sa'diah tells Dow Jones KPJ "will at least sustain" 19% of net profit growth recorded in 2009. Adds, group will continue to maintain expansion policy of adding minimum of two hospitals per year to meet revenue target of MYR2 billion by 2012. Dealer says previous reported target was for earnings to grow 10%-15% per annum over next few years; "with the new guidance, it looks like the management is more optimistic on healthcare demand... it also exceeds street estimates." KPJ posted a net profit of MYR101.9 million on revenue of MYR1.45 billion in 2009.

DJ MARKET TALK: Favelle May Rise On MYR79.8M Orders Clinched


2338 GMT [Dow Jones] Favelle Favco (7229.KU) may rise to test 90 sen psychological resistance after clinching MYR79.8 million worth of orders for supply of cranes to be delivered in 2010-2011. "The contracts are expected to contribute positively to earnings and net assets...for the financial year ending 31 December 2010 and beyond," company says; dealer says contract size considerable for Favelle Favco as boosts orderbook by 20% (orderbook totaled MYR418 million as at February 2010). Favelle Favco ended down 1.2% at 84 sen.

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