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APM shares slip after rally, RHB Research maintains Buy
RHB Research maintains Buy on Maybank, FV RM10.95
Alliance Research sees turning point for Penang's Hunza Properties

APM shares slip after rally, RHB Research maintains Buy

Posted: 15 May 2013 06:57 PM PDT

KUALA LUMPUR: Shares of car parts maker APM Automotive Holding slipped in early trade on Thursday, after the recent rally, but RHB Research is maintaining a Buy recommendation on with a higher fair value of RM5.35 a share from RM4.85.

At 9.41am, APM was down three sen to RM5.41. There were 11,200 shares done at prices ranging from RM5.41 to RM5.45.

Its recent high was RM5.44 on Feb 2 and six-month high at RM5.94 on Jan 30.

The FBM KLCI fell 2.78 points to 1,780.25. Turnover was 458.58 million shares valued at RM244.43mil. There were 209 gainers, 257 losers and 236 counters unchanged.

RHB Research is maintaining a Buy recommendation on APM with a higher fair value of RM5.35 a share from RM4.85.

It said APM achieved improved operating margins during the first quarter ended March 31, 2013 helped by a weaker yen although it is likely to be clawed back by the original equipment manufacturers (OEM) customers.

The research house said APM's revenue for the quarter was moderate, growing just 3.0% on-year despite industry production had risen 12.2% on-year.

"This is likely due to price reductions demanded by OEM customers. Its earnings before interest and tax margin contracted to 12.8%, down from 14.4% in first quarter 2012, but was better than the 9.7% achieved in fourth quater 2012 that were adversely affected by inventory provisions relating to the depreciation of the yen," it said.

RHB Research said APM's sales of interior and plastic products rose 10.2% on-year but revenue from operations outside Malaysia fell 11.4% on-year due to the divestment of its Australian radiator business.

"Across its product segments, revenue was flat on-year at its suspension and electrical product line due to lower demand and the weak Euro currency," it said.

RHB Research added growth prospects for domestic auto-parts players will be capped by limited automotive sales volume potential and that Malaysian Automotive Association (MAA) is only forecasting 2% total industry volume growth this year.

"Management also warned of higher parts and raw material costs. APM will also find it tough to penetrate regional automotive markets in Thailand and Indonesia due to the entrenched presence of Japanese tier-1 auto-parts suppliers.

"We understand that APM is likely to enjoy a reversal of some yen-related inventory provisions in second quarter 2013 after negotiating a cost pass through agreement with a major customer.

"Near term revenue could be lifted by orders from Berjaya Auto for components for the locally assembled Mazda 6," it said.

RHB Research maintains Buy on Maybank, FV RM10.95

Posted: 15 May 2013 05:52 PM PDT

Published: Thursday May 16, 2013 MYT 8:52:00 AM

KUALA LUMPUR: RHB Research is maintaining its Buy call on Malayan Banking (Maybank) with a fair value of RM10.95, which is 15 times CY 2013 earnings per share (EPS).

It said on Thursday there is no change to its earnings forecasts for now. Maybank is expected to release first quarter 2013 results sometime next week.

"The impending departure (Datuk Seri Abdul Wahid Omar as its president and CEO following his appointment to the Cabinet) of does not change our view of Maybank being an excellent proxy to Economic Transformation Programme activities.

"Maybank would benefit from the pick-up in business lending activities now that the General Election overhang has been lifted. Maintain Buy call," it said.

RHB Research in the near-term, it believes Maybank already has in place a seasoned and experienced management team to cope with the departure and handle the daily operations.

It added 2013 earnings remains well supported by the group's existing loan and capital market pipelines.

"Beyond that, much would depend on the direction set by the successor, although we think this may just involve some fine-tuning given that the building blocks are already in place," said the research house.

Alliance Research sees turning point for Penang's Hunza Properties

Posted: 15 May 2013 06:04 PM PDT

Published: Thursday May 16, 2013 MYT 9:05:00 AM

KUALA LUMPUR: Alliance Research expects 2013 to be a turning point for Hunza Properties as the completion of Gurney Paragon Mall in Penang by mid-2013 will provide significant boost to its earnings visibility and realised net asset value (RNAV).

"Over the longer term, we expect Hunza Properties to be transformed into an asset rich company with investment properties worth in excess of RM4bil," it said on Thursday.

Alliance Research said given improved prospects, it believe its share price at 71% discount to RNAV of RM6.55 is not justified.

"We recommend long-term investors to buy Hunza Properties with target price of RM2.62," it said. Its closing price on Wednesday was RM1.90.

Kredit: www.thestar.com.my

Rabu, 15 Mei 2013