NST Online Business Times : latest

Posted: 21 Jan 2014 06:20 PM PST

KUALA LUMPUR: AmeSecurities re-initiate coverage on Malaysian Resources Corporation Berhad (MRCB) with a 'buy' rating and fair value of RM2.20 per share at a 20 per cent discount to the NAV of RM2.75 per share.

MRCB had several false starts over the years but the entry of new management, led by its CEO cum substantial shareholder Dato Mohamad Salim Fateh Din, should instil greater entrepreneurial spirit.

In fact, it has been undergoing a quiet restructuring exercise. The focus is on stabilising its balance sheet with property development as the cornerstone for growth.

Several catalytic newsflows to lift its balance sheet (net debt: RM2.9bil) may kick-in in the coming months, starting with asset monetisation of at least RM2bil. This has already started with the divestment of its IT business for RM45mil.

Next on the cards is the injection of its prime office properties in KL Sentral into a REIT. The immediate plan is to divest Platinum Sentral for RM680 million, followed by Shell Tower and Ascott Residences. Such a move would transfer RM750 million of debts to the REIT, with realised gains of about RM380mil, on our estimates.

MRCB may commence toll collection for the EDL Highway soon, subject to final regulatory approval. The toll proceeds are expected to be higher than the government compensation of about RM11mil/month currently. Its 30% stake in DUKE may be divested by month-end.

The lacklustre construction division is being revamped to avoid future losses. Building works would be deemphasised; it is embracing open tenders even for its own projects. New bids would focus on infrastructure & environmental engineering that come with higher margins.

KL Sentral has 2.5 million sq ft of NFA left to be developed under Lot F. MRCB is rebuilding its landbank. It recently acquired 1.8 acres of commercial land fronting a lake in Putrajaya. It is also looking to acquire the balance 49 per cent of Penang Sentral with an estimated GDV of RM2 billion.

The High Court is expected to deliver its judgement on the status of PJ Sentral – currently under dispute with PKNS – on January 30. PJ Sentral has high development potential given its strategic location. A favourable outcome would kick-start the share price re-rating cycle.

The development of RRIM land by its major shareholder EPF (39 per cent) may present future opportunities for MRCB. The stock is trading at 45 per cent discount to its RNAV, and at a trough P/BV of about 1.4x.

RHB keeps 'buy' call on CIMB shares

Posted: 21 Jan 2014 06:40 PM PST

KUALA LUMPUR: RHB is maintaining a 'buy' call on CIMB with a fair value of MYR8.90 per share.

This is based on a target 2014 price/earnings (P/E) of 14 times, a 10 per cent discount to the 10-year average to factor in higher earnings risk due to its Indonesian operations.

Admittedly, the stock continues to face near-term headwinds from Indonesia's challenging environment, among others. However, we think this has largely been priced in.

In fact, we see management's more bullish stance on Indonesia and feedback regarding asset quality as two key takeaways from the meeting that should be positive for investor sentiment.

We are waiting to see how these filter down to its financial targets for 2014.

This aside, we are still positive on the domestic outlook, thanks to the emergence of a new investment cycle.

We are of the view that CIMB's strong domestic corporate presence means that the bank will be one of the major beneficiaries of the rollout of ETP projects.

Malaysia still contributes the bulk of group profit before tax (PBT) (nine months 2013 was 62 per cent).

Apart from that, other re-rating catalysts we see include more positive news flow on Indonesia's macroeconomic front, a stronger pickup in capital market activities and cost restructuring initiatives bearing fruit.

Kredit: www.nst.com.my

Selasa, 21 Januari 2014

NST Online Business Times : latest

NST Online Business Times : latest

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