The Star Online: Business

Maybank Research keeps Buy on Hock Seng Lee
DRB-Hicom slips after privatisation denial
Ford doubles dividend to highest in seven years

Maybank Research keeps Buy on Hock Seng Lee

Posted: 10 Jan 2013 06:26 PM PST

Published: Friday January 11, 2013 MYT 10:26:00 AM

KUALA LUMPUR: Maybank Investment Bank Research is maintaining its Buy call on Hock Seng Lee after the Sarawak-based company secured a RM49mil contract.

"We continue to rate the stock a BUY with an unchanged target price of RM2.25, pegged to 12 times FY13 earnings," it said on Friday.

Maybank Research said the RM49mil contract from Lembaga Kemajuan Bintulu for the infrastructure works at Samalaju Industrial Park in Bintulu was a good replenishment.

It said assuming 18% gross margin for the job, it estimated RM6.6mil net profit contribution into FY14. This worked out to be 1.1 sen earnings per share to be recognised in the current and next year.

The research house said this contract would add about 4% to its outstanding order book of RM1.1bil as at September 2012.

Last year, it secured about RM525mil in new contracts, while this year's job win value should at least match last year's.

"Total contract values at hand should be about RM1.9bil," it said.

DRB-Hicom slips after privatisation denial

Posted: 10 Jan 2013 06:02 PM PST

Published: Friday January 11, 2013 MYT 10:03:00 AM

KUALA LUMPUR: DRB-Hicom Bhd's share price fell to a low of RM2.65 on Friday after it said it was unaware of plans by the major shareholder to take it private.

At 9.47am, it was down two sen to RM2.68. There 1.08 million shares done at prices ranging from RM2.65 to RM2.69.

The FBM KLCI was up 4.93 points to 1,689.50. Turnover was 164.49 million shares valued at RM88.69mil. Advancers beat decliners 194 to 103 while 200 shares were unchanged.

On Thursday, DRB-Hicom reiterated that it had not been approached on any privatisation plan. Its management also revealed that it was considering a possible listing of the Proton distribution business, the proposal was still at a preliminary stage.

In a separate media article, DRB-Hicom's group managing director Datuk Seri Mohd Khamil Jamil said, "I believe that DRB-Hicom is in no position to be privatised. We are still in the state of rationalising Proton and some of our businesses as well."

Ford doubles dividend to highest in seven years

Posted: 10 Jan 2013 05:49 PM PST

Ford Motor Co doubled its quarterly dividend on Thursday to 10 cents per share, its highest in seven years, betting it can boost earnings even as it tries to staunch losses in Europe and deal with flagging market share in the United States.

The automaker's move, which could attract yield-hungry investors, reflects Ford's belief that it has the firepower to overhaul its European unit. Ford expects to lose at least $3 billion in Europe over the next two years.

"The doubling of the dividend illustrates Ford's internal confidence in the amount of cash that will be required to execute its European restructuring plan," said Jefferies analyst Peter Nesvold in a research note.

Ford's shares rose 37 cents, or 2.8 percent to $13.84 in afternoon trading on the New York Stock Exchange.

The first-quarter payout to common shareholders will cost the No. 2 U.S. automaker more than $370 million. The Ford family, which holds a separate group of shares that hold more voting power, will receive $7 million a quarter.

Ford last paid a 10-cent dividend in June 2006. Shortly after that, the company reduced and later suspended its quarterly payout as it scrambled to avoid bankruptcy during the height of the recession.

"Ford's plan is to grow its dividend, consistent with earnings and liquidity growth, to a level that is sustainable through all business cycles," Ford said on Thursday.

The larger-than-expected increase was announced earlier than analysts predicted. Nesvold, who expected the move to occur in late 2013, boosted his price target on the stock by $2 to $16.

Ford shares, which gained 20 percent in 2012, jumped as much as 3.5 percent to $13.94 on the New York Stock Exchange. Shares of rival General Motors rose 42 percent last year.

At the Detroit auto show next week, Ford will unveil a compact crossover under its luxury brand, Lincoln, as well as an early look of its upcoming F-150 pickup truck, the top-selling vehicle in the United States.

Ford is struggling to keep up with consumer demand in the United States, where its market share fell to 15.5 percent in 2012 from 16.8 percent in 2011.

Automotive consulting firm Polk forecasts Ford's U.S. market share will fall further, to 15 percent this year and 14.5 percent in 2014.

Analysts said the dividend increase bodes well for fourth-quarter earnings, due this month. Ford's U.S. sales crossed 2 million cars last year. In the third quarter, Ford posted record 12-percent margins in North America.

The increased dividend is payable on March 1 to shareholders of record on January 30. RBC Capital Markets analyst Joseph Spak predicted that Ford would continually grow the dividend as the company's earnings and liquidity improves. - Reuters

Kredit: www.thestar.com.my

Khamis, 10 Januari 2013