OSIM Target Price $2.11 BUY by OCBC Research

OCBC has cut its target price for Singapore lifestyle products firm Osim International (OSIL.SI), which is best known for its massage chairs, to $2.11 from $2.34 and kept its buy rating.

OCBC Investment Research cut its target price for Osim to account for a larger share base resulting from the recent exercise of its warrants.

However, OCBC remains bullish on Osim's growth prospects as its product range should benefit from research and development efforts to boost product innovation.

"While current economic uncertainty surrounding the EU and U.S. could dampen investor sentiment, we believe that the fundamentals of Osim remain strong and ample growth opportunities exist," said OCBC in a report.
 

Petronas Chemicals BUY Target Price RM9.28 by OSK Research

OSK is upgrading Petronas Chemicals Group's 2012 financial year earnings forecast by 28 per cent based on expectations that current oil prices will sustain, which will, in turn, buoy the prices of chemicals products.

"Financial year 2011 were above expectations. We are upgrading our financial 2012 earnings forecast in line with the better outlook for the company.

"We continue to like the company's strong backing from Petronas group, especially in keeping its feedstock prices low, as well as, attractive dividend payout ratio of 50 per cent, which is the highest among its closest peers," it said in a research note today.

However, it said the company is still subject to uncontrollable factors which included fluctuations in the international price of petrochemical products, global economic conditions and utilisation of its production facilities based on demand.OSK is upgrading Petronas Chemicals Group's 2012 financial year earnings forecast by 28 per cent based on expectations that current oil prices will sustain, which will, in turn, buoy the prices of chemicals products.

"Financial year 2011 were above expectations. We are upgrading our financial 2012 earnings forecast in line with the better outlook for the company.

"We continue to like the company's strong backing from Petronas group, especially in keeping its feedstock prices low, as well as, attractive dividend payout ratio of 50 per cent, which is the highest among its closest peers," it said in a research note today.

OSK maintained a "buy" on the company.

However, it said the company is still subject to uncontrollable factors which included fluctuations in the international price of petrochemical products, global economic conditions and utilisation of its production facilities based on demand.

KNM BUY Target Price RM3.20 by Maybank IB Research

KNM Target Price :
RM3.20 by Maybank Investment Banking Research
RM3.43 by ECMLibra
RM3.34 by OSK Research.

Four Seasons Hotel Bangkok Room Rate Promotion

Four Seasons Hotel Bangkok - This time-tested luxury hotel combines traditional style Thai architecture, artwork, and beautiful natural gardens, making it one of the most impressive hotels in Bangkok. The Four Seasons Hotel Bangkok is 25 km from the Suvarnabhumi International Airport, and is situated among many shopping venues and business addresses. It is also just a ten-minute walk to Lumpini Park, where guests can enjoy an evening walk or morning jog.

Hock Seng Lee HSL Target Price RM2.50 by OSK Research

Last year, HSL managed to secure RM532 million worth of jobs, which marginally surpassed our RM500 million target. This year, management is confident of bagging another RM500 million in new wins, with an upside potential of RM600 million, versus our assumption of a conservative RM400 million. In the near term, HSL may bag two road packages collectively worth RM150 million. It is also eyeing the Tg Manis port extension (RM300 million), Mukah airport extension (RM300 million), an education facility (RM260 million) and a flyover job (RM100 million).

We understand that the government intends to implement a mass affordable housing project across Sarawak worth RM1 billion. Another RM1 billion has also been allocated for rural infrastructure and utilities. While these jobs are sizeable, they will be broken up into packages worth RM20 million to RM30 million each, and we expect HSL to win some.

The management indicated that Phase 2 of the Kuching Wastewater Project is now 30% complete and on track for the 2Q2014 deadline. HSL has submitted its proposal for Phase 2 (RM500 million), with the results possibly made known after the state elections. The entire job over 4 phases is worth RM2.2 billion.

Given HSL's experience with Phase 1 and possession of the necessary equipment, we think it stands a good chance with the subsequent phases. We also gather that HSL is in discussions on a concession to maintain the wastewater system once it is completed.

The bulk of HSL's billings for the RM452 million Kuching sewerage project and the high-end The Leaf property sales should start accruing from this year, along with FY10's RM532 million new contracts.

Year-to-date, its order book replenishment stands at RM108 million, representing nearly a quarter of our FY11F new contract assumptions and nearly twice that of the same period last year.

The group is targeting RM550 million (our assumption is RM500 million) new contracts this year; with a particular focus on the Sarawak Corridor of Renewable Energy's (Score) agro-based growth node of Tanjung Manis.

Projects earmarked by HSL in Tanjung Manis this year include the RM350 million deepsea port extension, more than 100km of access roads and various high-margin marine civil works.

Also expected this year is the announcement of the remaining packages of RM2 billion worth of road jobs linking Score's energy sites involving 21 open tenders that were closed last year. HSL has tendered for seven of these.

Each package is valued at RM50 million to RM150 million. IJM Corp, Cahya Mata Sarawak Bhd (CMSB) and Loh & Loh Bhd Corp Bhd secured the early packages last year.

Keppel Land BUY Target Price $5.36 by CIMB Equities Research

CIMB Research has raised its target price for Singapore property developer Keppel Land (KLAN.SI) to $5.36 from $5.29 and kept its outperform rating.

CIMB Research said it expects Keppel Land to weather China’s property cooling measures relatively unscathed, as its township portfolio in Tianjin Eco-City, a China-Singapore government venture development, has seen strong initial residental sales and will produce sustainable growth in the next decade.

“Its stock underperformance serves to reinforce our positive view. We continue to expect price catalysts from rising China township prices and Singapore office rents,” said CIMB in a report.

The brokerage said it expects Keppel Land’s China business to increasingly become an important growth driver for the company’s value.

UOB BUY Target Price $25 by Credit Suisse

Credit Suisse has upgraded Singapore’s United Overseas Bank (UOBH.SI) to outperform from neutral and raised its target price for to $25.00 from $22.50.

Credit Suisse has raised its earnings per share estimates for UOB from 2011-2013 by 5-7% due to higher loan growth, fee income and an improvement in net interest margins in the second half of 2011.

“UOB is set to show the best loan growth in 2011 with a significant lead over DBS (DBSM.SI) and OCBC (OCBC.SI) already in the first quarter. Banks expect overseas loan growth to be the main driver in 2011, with UOB seeing the highest overseas loan growth,” said Credit Suisse in a report.

The brokerage also added that UOB is its new sector top pick, given its attractive return-on-equity of 13.7% versus 11.2% for DBS (DBSM.SI) and 12.8% for Oversea Chinese Banking Corp (OCBC.SI).

Golden Agri BUY Target Price $0.83 by Phillips Securities

Phillip Securities has upgraded its rating for Singapore-listed palm oil firm Golden Agri-Resources (GAGR.SI) to buy from hold and raised its target price to $0.83 from $0.74.

Phillip upgraded Golden Agri after the firm reported a better-than-expected 134% increase in its first quarter revenue to US$1.4 billion ($1.75 billion), due to better performance from its China operations and higher average selling prices.

The brokerage also noted that Golden Agri is expanding its downstream business, which will benefit from the growing affluence of emerging markets and rising popularity of edible oils.

We see the importance of Golden Agri’s need to improve their downstream business because diversification of their source of revenue will help them reduce their business risk.

Ubud Hanging Gardens Bali Resort Hotel Promotion 2011

Ubud Hanging Gardens is set in an Avatar-like natural surrounding. Check prices and availability now for summer 2011. The ultimate in privacy and eco-luxury in the mountainous hills of Bali.

Tiger Airways Target Price SELL $1.43 by CIMB Research

During its analysts' briefing, management discussed the tough operating conditions in Australia but remained bullish on Asian demand. Tiger will no longer expand its Australian capacity, but instead focus on Asia.

In response to this, we lower our cost estimates and adjust our operating assumptions. Our FY2012 estimate drops by 10.1% but FY2013-2014 forecasts rise by 4.8-10.3%. Our target price also climbs to $1.43 (from $1.39) following our adjustments, still based on 8X CY12 P/E.

Execution of Tiger's plans remains uncertain in the near term, providing potential de-rating catalysts, though given time, Tiger's business model could mature. MAINTAIN UNDERPERFORM.

Mudajaya Target Price RM7.94 BUY CIMB Research

• Maintain BUY; upside to forecasts and target price. Our meeting with Mudajaya left us feeling even more upbeat on the group’s prospects. The slight delay in the Indian IPP should be overshadowed by the even more favourable outlook for project flows, both locally and abroad. The award of the Manjung EPCC contract to Alstom reinforces Mudajaya’s chances of bagging the civil works and should be a precursor to more project awards in the next few months. We expect positive developments in the group’s bid for BOT highways and a new power plant in India to add to the momentum of positive newsflow. The RM1bn target for new contracts in 2011 is likely to be exceeded. We maintain our EPS forecasts, BUY call and target price of RM7.94, pegged to an unchanged 20% RNAV discount. The award of projects holds the key to share price re-rating.

• Janamanjung a significant milestone. We expect the Janamanjung civil works to be the group’s first contract award for 2011, adding to the group’s portfolio of power plant construction projects after many years. The award would be the first civil works to be undertaken for the supercritical category and the first coal-fired power plant project to be implemented under the 10MP.

• Better things to come. The Janamanjung plant extension is likely to be a precursor to a slew of new projects for Mudajaya. We also do not discount the possibility of the group’s participation in the WCE and one of the remaining six highways.

• On course for contract wins in 2011. Mudajaya’s outstanding order book stands at RM4.8bn. We remain optimistic about the group’s chances of beating its RM1bn target for new projects in 2011. Success in clinching an estimated RM3.1bn worth

of orders this year would bump up the group’s order book to almost RM8bn, higher than IJM’s RM4bn and Gamuda’s RM5.5bn.

Outlook

Award is a matter of time. Mudajaya is likely to take up the role as a committed subcontractor for the civil works, estimated to be worth between RM700m and RM1bn. Civil works for coal-fired power plants typically account for 20% of total development cost and kick off the building of a power plant. Civil works for the Janamanjung extension are expected to start soon, which suggests that the civil works portion could be awarded in a matter of weeks. The civil works portion should come from the RM1.8bn portion of the total RM5.1bn development cost. We understand that the RM1.8bn is mainly for local content. Negotiations on pricing and project scope are at the final stages.

Janamanjung civil works a sign of better things to come. We continue to expect the award of the civil works for the Manjung power plant extension to be a precursor to a slew of contracts, mainly local, for Mudajaya. We also do not discount the possibility of the group’s participation in the WCE and one of the remaining six highways as these projects are likely to be dished out in packages and are part of the Klang Valley Outer Ring road that will link KLKS, WCE and SKVE among others. Construction of the Kuala Lumpur-Kuala Selangor (KLKS) Highway will be completed by Jun 11, which suggests that the group has ample capacity to take on new infrastructure/highway projects.

Potential Projects

Janamanjung plant extension

Value: RM700mil

Verdict: Good chance against other local players

Tanjung Bin plant extension

Value: RM700mil

Verdict: Good chance against other local players

West Coast Expressway (WCE)

Value: RM1000mil

Verdict: Has the capacity to take on another highway job

MRT civil works

Value: RM500mil

Verdict: Fits prequalification criteria

LRT phase 2

Value: RM200mil

Verdict: Potential stations work and precast segment

Good chance of clinching Tanjung Bin extension too. Tenders for the 1000MW extension of the Tanjung Bin coal-fired power plant closed on 30 Mar 11. Compared to the Janamanjung project which is a Tenaga project, the Tanjung Bin power plant comes under Malakoff which is an IPP. Alstom is also among the bidders for the EPCC scope. However, for this job, Mudajaya is part of the consortium. The contract is expected to be awarded in Sep 11 and the potential size of the civil works is similar to the Janamanjung extension. Management remains optimistic about its chances as a civil contractor.

Vying for a piece of WCE. The recent approval of the West Coast Highway (WCE) is positive for the implementation of the seven new highways planned under 10MP. We gather that although the work scope will go largely to the main contractor, about 30% of the total project value of RM5bn-6bn will be dished out to other contractors. As the contractor for the KL-Kuala Selangor highway located near the proposed alignment of the WCE, Mudajaya is targeting c.RM500m worth of works from WCE. Project details are still scanty at this point. We expect more details of the WCE to be released in the months ahead.

Contender for Ampang elevated highway 2. We gather that the Ampang elevated highway 2 will be an extension of the current Ampang elevated highway and is also one of the key urban highways planned under the 10MP. The fully elevated highway project will be undertaken by Prolintas and is valued at RM2bn-3bn based on a cost/km of RM80m-100m. Mudajaya’s expertise in elevated highway jobs should give it an advantage in the tenders. An example would be the elevated portion of the Shah Alam-Kemuning Highway (LKSA) which was built by Mudajaya. LKSA is owned by Prolintas too.

Temporary setback for Indian power plant. Over the past six months, the Indian IPP project has been plagued by slight holdups caused by land compensation demands by villagers and bad weather conditions. The compensation issues relate to pricing issues among the villagers who demanded better prices for their land. This was a negative surprise but should not be a big concern as alternative measures have been taken such as the building of additional basic infrastructure around the area.

This, however, affected the delivery schedule for the power plant equipment. This also explains the small revenue contribution from the EP works over the past two quarters. Management clarified that these issues have been largely resolved. On the positive side, management is in negotiations to secure the last power purchase agreement (PPA) for the last unit of the 1,440MW Chhattisgarh power plant. Indications are that the tariff would be as high as Rs4.59/kwh, three times the rate in Malaysia.

Bidding for highways in India and a potential new power plant. In a 70:30 JV with a local partner, the group has submitted a bid for a 93km BOT highway project worth around RM900m in India. The scope of works includes the extension and widening of the highway to six lanes. The highway is part of the Chennai-Bangalore trunk road and will be a 12-18 year concession. 80% of the land will be provided by the government. Another potential highway is the 100km Bangalore-Bombay stretch for which the group has submitted its prequalification bid. On the power plant side, Mudajaya’s associate RKM Powergen has been invited to participate in the development of a 2100MW coal-fired power plant to be located near Chhattisgarh. This project is still at the stage of preliminary studies.

AirAsia BUY Target Price RM3.57 OSK Research

OSK Research maintains a "buy" call on AirAsia following the strong load factor and the potential set up of Singapore AirAsia.

By optimising its fleet via longer utilisation hours and short-haul routes, the budget airline continued to succeed in sustaining above 80 per cent load factor in April, exceeding the forecast, OSK said.

On the potential set up of Singapore AirAsia, the company would be night stopping its aircraft at the Changi International Airport in the near term, in accommodating early morning flights departing from Singapore.

In a research note today, OSK said the recruitment of cabin crew was already ongoing and this could be a prelude to the setup which would be a boost to earnings for AirAsia given that Changi was an international transit point and a sweet spot in luring passengers.

Meanwhile, OSK viewed the airline's move to shift its regional headquarters to Jakarta sometime this year as to gain more recognition from the Indonesian government.

Indonesia AirAsia is the only airline operating in the country within a clean safety track record.

"This would lead to securing more new routes given the buoyant demand for air travel," it added.

Cheung Kong Target Price HK$144 Goldman Sachs BUY

Goldman Sachs resumed coverage on Cheung Kong (Hong Kong stock code 0001) with a “neutral” rating and a target price of HK$144, up from HK$138 previously. It updated CKH’s property schedule and incorporated its recent land acquisitions, leading to revisions of 2010-2013 EPS by -12% to +64%. Since introducing new campaigns in late-February (e.g. cash rebate for buyers who opt to complete the transactions early, do not take secondary mortgages), CKH has been able to speed up its property sales for Festival City Phase 2 and has cumulatively sold 1,100 out of the total 1,368 units, Goldman said. The house estimated the group has secured HK$8.1bn in contracted sales and 66% of development property profit in Hong Kong for this year. Pending government approval, CKH targets launching three more projects in 2011, including the Hung Shui Kui site, Lohas Park Ph 3 and Festival City Ph 3. But Goldman is also concerned about the abundant supply in these districts which may affect CKH’s ability to lift ASP. It believes value accretion from a potential spin-off of its China rental property assets into an Rmb REIT is unlikely to be significant, as China rental projects only account for 4% of CKH’s NAV.

Cathay Pacific Target Price HK$17.50 Sell by CLSA

CLSA keeps Cathay Pacific (Hong Kong stock code 0293) at Sell with a target price of HK$17.50; it says Cathay’s March operating data confirmed its expectations that both the passenger and cargo markets are in decline as capacity is increasing. With load factors in decline after a record year in 2010 combined with higher fuel costs, the house forecasts the airline’s EBIT margins to decline to 7.7% in 2011 from 12.8% in 2010; it adds that to achieve these forecasts, it needs traffic to accelerate in 2H, so risk is “still to the downside” and the house’s forecasts are below consensus.

China Unicom Target Price HK$20 by UBS

UBS says that as the only WCDMA network operator in China, Unicom “is best positioned to benefit from the data service boom in China;” it adds that China’s 3G subscriber growth “is approaching the tipping point” as both 3G and smartphone penetration rate has reached about 10% in China. UBS keeps Unicom at Buy with a target price of HK$20 (ADR $25.73).

Hang Seng Bank Target Price HK$130 by Nomura

Nomura resumed coverage of Hang Seng Bank (Hong Kong stock code 0011) with a “neutral” rating and price target of HK$130, up from HK$126 previously. The research house said earnings progression is likely to be challenging in 2011 owing to compressing margins and slow asset growth, which could cap Hang Seng’s upside potential. However, Nomura sees downside support as the stock is offering a 4.4% dividend yield.

IOI Corp Target Price RM4.39 by OSK Research

OSK Research has maintained a "sell" call on IOI Corporation and lowered the target price to RM4.39 from RM4.41 due to aging trees despite the higher crude palm oil (CPO) and palm kernel oil (PKO) prices.

OSK Research in a research note today said the aging trees combined with the adverse weather had reduced the palm oil fresh fruit bunch production for the nine-month period by 10.4 per cent.

"IOI will continue to struggle with its production due to aging trees, which caused its production to decline for the past two consecutive years," it said.

However, the weaker production was offset by the higher CPO and PKO prices, resulting in the plantation segment, recording a 21.8 per cent earnings before interest and taxes growth, it added.

Genting Malaysia Target Price RM4.05 by OSK Research

OSK Research is maintaining its "neutral" call on Genting Malaysia Bhd with an upgrade fair value (FV) of RM4.05 from RM3.24.

In its research note today, OSK said it was also maintaining the earnings forecast for Genting, which incorporates the earnings lift from the group's US casino operation scheduled for completion in the second half of this year.

"Our FV implies a relatively high 17.1 times financial year 2011 price earnings ratio (PER) versus the group's historical PER multiple of 14.9 times, suggesting, the growth potential from its US operation has been included in our valuation," it said.

Dialog Target Price RM3.27 by CIMB

CIMB Equities Research keeps DIALOG GROUP BHD [] an Outperform with the potential share price catalysts being an announcement of marginal field development, and new markets including Saudi Arabia.

The research house said on Monday, May 16 Dialog's CONSTRUCTION [] of the RM5bn independent deepwater petroleum terminal in Pengerang, south Johor is set to start in mid-CY11 as scheduled.

'Having received approval from the Department of Environment (DOE) last month, the company inked on Friday a JV that marks the start of land reclamation works. We expect the construction portion to start contributing in 1QFY6/12.

Golden Agri Target Price $0.96 by OCBC Research

OCBC Investment Research has raised its target price for Singapore-listed palm oil firm Golden Agri-Resources (GAGR.SI) to $0.96 from $0.88 and kept its buy rating.

OCBC said it raised its earnings forecast for Golden Agri by 22.7% for this year to reflect improving margins and after it reported strong quarterly results.

Golden Agri said on Friday its first quarter net profit rose 161% from a year earlier to US$230.7 million ($287.4 million), lifted by higher sales volumes and crude palm oil prices.

However, OCBC only raised its 2011 revenue estimate for Golden Agri by 3.3% as it lowered its expectations for crude palm oil prices in the second half of the year due to increased supplies.

Supermax Target Price RM6.91 BUY by OSK Research

OSK Research has maintained its "buy" call on Supermax Corporation although its first quarter financial year 2011 results were below expectations.

The research house believes the earnings of Supermax stand a strong chance to re-rate within a six-12 month horizon.

"Within this period and provided the latex price does not break its recent high of about RM11 per kg and continues the uptrend of late, we think the earnings of Supermax stand a strong chance to re-rate.

"It can then pass on the latex cost increase to its customers in a more accurate and timely manner," it said in a research note today.

The results of Supermax were lower owing to the higher latex price, forex losses and slower-than-expected demand for examination gloves from certain countries.

OSK Research said Supermax Corp Bhd's FY10 results were within expectations and as anticipated, the results were lower on-quarter owing to spiralling latex price and no improvement in forex.

The research house said on Wednesday, Feb 16 although the company is the closest to Top Glove in terms of product mix, it has managed to differentiate itself by having a higher OBM mix as well as distribution income to smoothen its manufacturing profits.

'Our target price for Supermax remains unchanged at RM7.84, based on the existing PER of 13x FY11 EPS. Supermax remains one of our top two picks for the sector besides Kossan. Although we maintain Neutral on the sector, Supermax's valuation still stands out over some of its peers given its single-digit valuation.

'Going forward, we believe the stock would come in for a re-rating when latex price gets toppish, which we think would be sometime in May 2011 when the wintering season of rubber trees is over,' it said.

Banyan Tree Madivaru Maldives Atoll Summer Promotion 2011

Open the door of your tented pool villa to a stretch of pristine white sand, dive into beautiful lagoons and the Maldives' most breathtaking house reefs, enjoy a private romantic dinner on a sandbank island, and enjoy a high level of privacy coupled with the finest service yet, all in a quintessential Banyan Tree experience.

A true Maldives five-star hotel experience, Banyan Tree Madivaru features an exclusive cluster of six freestanding Tented Pool Villas – the first of its kind in Maldives. It boasts inspired desert island décor with timber flooring, two outdoor showers, handcrafted wood furniture and luxurious tent canopies. Meals and scheduled excursions are all-inclusive, ensuring that guests enjoy the very best of fresh catches and marine activities. Island Hosts are available around the clock to ensure that guests want for nothing.

Kencana Petroleum Target Price RM3.17 BUY by OSK Research

OSK Research has upgraded KENCANA PETROLEUM BHD to Buy with revised fair value of RM3.17.

The research house said on Monday, May 16, it viewed positively Kencana’s plan to acquire Allied Marine & Equipment Sdn Bhd for RM400m from Worldclass Inspiration Sdn Bhd and Allied Asset Holdings Sdn Bhd.

OSK Research said the purchase would be satisfied by the issuance of 149.3m new shares of Kencana at RM2.68 a share.

“This acquisition also comes with a profit guarantee of RM40m. The entire exercise is expected to be completed by 3QCY11.

“We view this acquisition positively as it would help Kencana to expand vertically. Upgrade to Buy with revised fair value of RM3.17,” it said.

Angang Steel Target Price HK$12.40 ICBC Equity Research

We believe Angang Steel Co Ltd's (ANGANG) weak 4QFY2010 results are behind us and expect quarterly improvement given steel price increase month-on-month for 3 consecutive months.

Profit growth is expected at 125% y-o-y for FY2011.

Net profit grew 175% y-o-y to RMB 2.05 billion thanks for margin recovery, while turnover increased 32% y-o-y to RMB 92.2 billion on higher unit price and sales volume expansion. Net gearing ratio is at 52.6% at end 2010. A Final Dividend per share of RMB 0.15 was declared.

Bangkok Bank Target Price THB187 Kim Eng Research

Bangkok Bank's quarterly loan growth 14% year-on-year and 4% quarter-on-quarter was supported by demand for working capital loans and retail loans. Starting in 1Q, the banking sector is now booking dividend income as other income and fees and non-interest income net of expenses. Target price is THB187 which is based on a P/BV of 1.43 times FY2001F ending 31 Dec.

AirAsia Target Price RM3.65 by ECM Libra BUY Rating

AirAsia Bhd's units in Indonesia and Thailand are gaining substantial market share and a strong foothold in the respective countries, says ECM Libra Capital Sdn Bhd.

Despite higher jet fuel costs, demand is looking up for Indonesia AirAsia (IAA) and Thailand AirAsia (TAA), it said in a research note today.

In the first quarter 2011, IAA's passenger traffic rose 33.1 per cent year-on-year to 1.5 billion, with the load factor up 2.5 percentage points year-on-year to 80 per cent.

Likewise, TAA's traffic grew 23.5 per cent year-on-year to 1.9 billion as the first quarter is usually the peak season for tourism. The load factor was up by 4.6 percentage points year-on-year to 84 per cent.

ECM Libra maintained a "buy" call on AirAsia.

According to AirAsia, both IAA and TAA will focus on improving their market share for international routes and identify, create and interconnect new uncharted routes through existing hubs.

ECM Libra said AirAsia's affiliates are currently preparing for their upcoming initial public offerings and listings, which are expected to take place in the fourth quarter of this year.

TAA is looking to raise US$150 million from the exercise while IAA plans to raise between US$150-US$200 million in proceeds. This is to finance future growth plans, including capacity expansion and acquisition of aircraft.

"As part of the listing exercise, accumulated debts may be cleared, which means AirAsia may start recognising earnings from IAA and TAA through its 49 per cent stake in the units.

"Based on the 49 per cent stake, AirAsia would be able to gain an additional RM224 million in earnings," ECM Libra said.

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Genting Singapore BUY Target Price $2.74 by Phillips Securities

Phillip Securities Research in a 14th Jan 2011 research report says: "Genting Singapore is an investment holding company for Resorts World Singapore (RWS). Genting principal activities include casino operations, operation and management of integrated resort, international sales and marketing services as well as IT application related services.

"With the recent divestment of Genting UK, Genting Singapore derives 98% of its revenue from RWS. We believe revenue growth to be strong in 2011 and this is likely to translate to higher earnings. Given our estimated EBITDA of $2.3 billion in 2011, the enterprise value is estimated to be $34.9 billion base on 15x EV/EBITDA.

"Our market value of equity is worth $33.5 billion thus giving rise to fair value estimate of $2.74 base on 12.2 billion shares. Fair value estimate of $2.74. BUY (initiating coverage of Genting Singapore stock). "

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Kencana Petroleum BUY Target Price RM3.05 by OSK Research

Kencana Petroleum Bhd remains a top pick for OSK Research in the oil and gas sector due to its delivery track record.

The research house has maintained a trading "buy" for Kencana with the target unchanged at RM3.05.

"We believe another re-rating of its share price will happen
sometime in the fourth quarter of this year, when there is more guidance from management on the potential contribution from the Berantai marginal field," said OSK Research said in its research note today.

Yesterday, the company announced that its 100 per cent owned subsidiary, Kencana HL SB, has secured a contract from Kebabangan Petroleum Operating Company SB for the fabrication of Kebabangan substructure for Kebabangan Northern Hub Development Project.

"We had expected Kencana to win at least a portion of it given the company’s delivery track record and available yard space.

"We understand that Kencana’s utilisation rate had recently
increased to about 60 per cent but there is still ample room to take on more jobs," OSK Research added.

OSK Research said Kencana's order book should increase to about RM2.4 billion and this is expected to keep the company busy for the next two years. Meanwhile, Kencana’s tender book was about RM5.0 billion.

Hotels near Petroleum Hub are essentially utlised by oil and gas company executives, engineers, and has helped provide a boom for once quiet little towns such as Bintulu, Pekan Baru, Pengerang.

Maybank BUY Target Price RM10.07 by OSK Research

MALAYAN BANKING BHD shares advanced on Friday, May 13 after the bank said it ''expects earnings for FY11 ending June 30 to surpass the record net profit it achieved in FY10.

Maybank's net profit for 3QFY11 rose 11%''to RM1.14 billion from RM1.03 billion.

At 9.35am, Maybank was up 16 sen to RM8.90 with 329,700 shares traded.

Maybank's revenue for the three months in review was 11.8% higher at RM5.13 billion compared with RM4.6 billion a year ago.

Maybank said on Thursday, May 12 that the results were boosted by strong loans growth, increased revenues across almost all business segments of the group and significantly lower allowance for losses on loans which declined by almost half.

OSK Research in a note May 13 maintained its buy call on Maybank with a target price of RM10.07.

'Its previously conservative provisioning coupled with continued improvement in asset quality are beginning to bear fruit, with loan loss provisions declining 49.8% q-o-q.

'The combination of continued improvement in domestic asset quality, loans growth traction and benefits from the rising interest rate environment will boost the group's earnings momentum in FY12,' said OSK Research.


Hotels close to Maybank Headquarters in Kuala Lumpur, as well as the iconic Maybank Tower in Singapore.

Global Logistic Properties BUY Target Price $2.90 by JP Chase Morgan

JP Morgan Research in a Feb 25 research report says: "GLP announced a joint venture with the Suzhou municipal government to develop a modern logistics park with a total land area of 1 million sqm. Phase 1 will comprise 200,000sqm GFA of modern logistics facilities with GLP’s investment cost at US$90 million (90% stake in the JV).

"Evidence of the underlying momentum in new leasing activity, development starts and land acquisition are the main share price drivers for this stock in our view. The recent announcements on new leasing and new development sites we believe are some of positive catalysts for the stock.

"Our December 2011 price target of $2.90 is based on our December 2011 sum-of-the-parts valuation for GLP. The net asset value for GLP assets on our estimate is $9.5 billion, or $2.03 per share. MAINTAIN OVERWEIGHT."


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SIA BUY Target Price $18.50 by Credit Suisse

Singapore Airlines, the world’s second-largest carrier by market value, rose the most in a month on the city’s stock exchange after pledging to pay S$1.20 a share in special and final dividends.

The airline climbed 2.8% to $14.66, the biggest gain since April 13. The benchmark Straits Times Index advanced 1.1%.

Singapore Air announced the dividends yesterday after rebounding travel demand following the end of the global recession helped boost annual profit fivefold. Net income in the fourth quarter declined a worse-than-expected 38% because of higher fuel costs.

“The key positive surprise is the big special and final dividend,” Credit Suisse Group AG analyst Sam Lee said in a research note today. “SIA’s valuation is not excessive, but we do not see short-term company-specific catalyst after the big cash dividend.”

Credit Suisse has an “outperform” rating and $18.50 target price for the carrier. Its forecasts are under review pending an analyst briefing today, Lee said.

The carrier’s 40 cent final dividend compares with 12 cents a year earlier. The special dividend totals 80 cents. The carrier had net cash, including investments, of $5.6 billion or about $4.70 a share, as of the end of March, Citigroup Inc. analysts led by Robert P. Kong said in a May 12 note.


PROFIT JUMP
The airline reported net income of $1.1 billion for the year ended March, compared with $216 million a year earlier. Fourth-quarter profit fell to $171 million, missing the $244 million average of four analyst estimates compiled by Bloomberg in the preceding 28 days.

The airline has hedged about 20% of this year’s fuel need at about US$130 per barrel, Chief Executive Officer Goh Choon Phong said at a press briefing in Singapore today.

In the three months ended March, the carrier filled 75.5% of total available seats, down from 80% a year earlier as capacity expansion outpaced demand, it said in a statement yesterday. Passenger numbers were little changed at 4.1 million. Yield, the average price a traveler pays to fly one kilometer, was 12.1 Singapore cents, compared with 11.1 cents a year earlier.

AIRBUS A380s
The airline intends to boost capacity 6% in the fiscal year started April 1. It expects to add eight Airbus SAS A380s, while retiring five Boeing Co. 777s and all seven of its 747-400s.

Singapore Air’s fuel bill, its biggest expense, jumped 24% to $1.24 billion in the quarter ended March 31. Jet- fuel prices averaged US$121.2 per barrel in the quarter in Singapore trading, 42% higher than a year earlier.

“The twin challenges of near-term weakness in load factors and high fuel prices will adversely affect operating performance,” Singapore Air said. “While there has been some respite in the past week, jet-fuel prices are likely to remain high and volatile in the near term.”

Sembcorp Marine BUY Target Price $6.60 by Phillips Securities

Phillip Securities Research in a May 10 research report says: "Sembcorp Marine reported 1Q11 turnover at $829 million (-39% y-o-y, -16% q-o-q) and 1Q11 net profit at $152 million (+ 0.1 y-o-y, -41% q-o-q).

"The results were well in line with expectations with turnover and net profit constituting 23% and 19% of FY2011 forecast respectively. Although revenue fell 39% y-o-y, which was well flagged earlier due to the rig order drought in 2009, gross profits remain relatively unchanged due to a sharper drop in cost of sales.

"Our SOTP based target price of $6.60 implies a valuation of 18x FY11E earnings, which we feel is undemanding given that the company has impressive margin growth and we have not factor in potential contract wins from Petrobras. With an upside of 21.2% to its last trading price, we maintain our Buy call on SMM at an unchanged target price of $6.60. MAINTAIN BUY."

Sembcorp Marine BUY Target Price $6.60 by Credit Suisse

Credit Suisse has raised its target price on Singapore’s Sembcorp Marine (SCMN.SI), the world’s second-largest oil rig builder, to $6.60 from $6.30 and maintained its outperform rating.

Sembcorp Marine said on Monday first quarter net profit rose 1.2% though revenue fell, while margins improved due to greater operational.

Credit Suisse said Sembcorp Marine’s margin performance has surprised on the upside over the past 24 months primarily due to increased efficiency and better pricing of orders. The brokerage lifted its 2011 margin forecast to 17% from 15%.

It also raised its order intake estimate for 2011 to $5 billion from $4 billion. Year to date, Sembcorp Marine has won $1.5 billion of orders and has another $2 billion of options in hand, Credit Suisse said.

The brokerage said it believes orders are likely to pick up in the second half of 2011 due to a combination of strong oil prices, the resumption of drilling in the Gulf of Mexico and positive commentary from offshore drillers.

AirAsia BUY Target Price RM4.80 by Credit Suisse

Credit Suisse Group AG raised its share-price estimate to 4.80 ringgit from 4.30 ringgit after the carrier introduced fuel surcharges. The stock rating was maintained at “outperform,” Annuar Aziz, an analyst at Credit Suisse, wrote in a report 9 May 2011.

The 5 year chart on the left shows recent gains by AirAsia and a significant demand by institutional investors and funds.

Averaging RM1.80 for the first two years, then RM1.50 the next two years, and finally breaking both the RM2.50 and RM3.00 barrier, AirAsia has finally cemented its position as the largest South East Asian (ASEAN) carrier and overshadowing national carrier Malaysia Airlines in terms of fleet, capacity, profits, routes and overall staff satisfaction.

Several other researchers have further upped the target price of AirAsia to above RM4.00. The recently announced fuel surcharge was even greeted with a mature acceptance and signals a positive method to stem the increase in jet fuel prices.

And it is easy to see that branding spread and viral-marketing effects AirAsia has on travellers. Travellers will tell their friends, families. Championing their low cost airfare to a dream destination. And anticipating for the next round of zero fares, or super low promotional fares. Stop ten people on their tracks and likely 9 out of 10 will have heard, flown, thought about, curious about, AirAsia. Much like Coca Cola. It is everywhere (now). Perhaps even Coke would have coined the term now everyone could have a fizzy drink.

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Yangzijiang BUY Target Price $2.42 by OCBC

OCBC Investment Research has raised its target price on Singapore-listed Chinese shipbuilder Yangzijiang (YAZG.SI) to $2.42 from $2.36 and maintained its buy rating.

Singapore-listed Chinese shipbuilder Yangzijiang (YAZG.SI) said on Thursday its first quarter net profit rose 63% from a year ago to 954.9 million yuan ($179.9 million).

OCBC said Yangzijiang's net profit was higher than expected, boosted by better gross profit margins. The firm said about 55% of its total order book comprises high-margin vessels and it is confident about sustaining margins in 2011-2012.

Yangzijiang also confirmed that it intends to continue to invest in held-to-maturity financial products. OCBC said this is currently a lucrative business, but a sudden dip in the Chinese stock market may affect the value of the collateral.

Japanese Asia Hotel Deals 2011

DBS BUY Target Price $18.00 by RBS

RBS has raised its target price on Singapore’s DBS (DBSM.SI), Southeast Asia’s largest bank, to $18.00 from $16.50 and maintained its buy rating.

DBS posted a record quarterly profit, thanks to falling bad-debt charges and a surge in trading income, and signalled that an erosion in interest rate margins in its core markets may be coming to an end.

RBS said it had revised its earnings estimates for DBS’ 2011-2013 financial years by 9.4% given the bank’s solid first quarter results.

DBS remains its top Singapore bank pick, reflecting the strong revenue trends, improving margins and attractive valuation relative to other lenders under its coverage, RBS said.

QL Resources BUY Target Price RM4.00 by OSK

OSK Research has reduced its 2011/12 forecast earnings for QL Resources by one per cent to 5.3 per cent, saying that heavy rainfall in Indonesia and the stake dilution of 40.5 per cent to 35 per cent in Boilermech had delayed the company from achieving its target fresh fruit bunch production volume in Vietnam.

The research house however raised its Future Value (FV) from RM3.51 to RM4, pegging at a higher price earnings (PE) of 19 times earnings per share in 2012, taking into account the potential catalyst from its venture into renewable energy and higher share liquidity post share placement exercise.

QL Resources is a regional integrated livestock farming player

and has diversified into the fisheries sector through the development of a marine-based manufacturing chain.

QL’s expansion plan in Indonesia is on track for completion (500,000 eggs per day by 1QFY13 and one million day-old chicks (DOC) by 2QFY12). Cianjur, Indonesia, has low egg/broiler consumption per capita and is situated between Jakarta and Bandung, which have the highest consumption of poultry products.

The production volume of poultry products in Cianjur is also relatively low compared with other areas. Upon the completion of the farms, QL will become a significant poultry player in the industry. While the DOC market is dominated by other major players, QL will be the largest layer farmer in Indonesia after the farm is up and running given that Charoen Pokhpand and Japfa Comfeed (major Indonesian poultry players) are not involved in egg farming. QL estimates that its average cost of production could be 5% lower than the industry average.

Our checks with management reveal that its expansion in Tay Ninh, Vietnam, to achieve a production volume of 500,000 eggs per day by 1QFY13 initially, will be delayed to 3QFY13 due to some local issues. Nonetheless, we believe there is much more room to grow in the country given that the poultry industry in Vietnam is still dominated by traditional small players while egg consumption is still low.

We think that concerns over rising radiation at Japan’s nuclear plant would actually benefit QL’s marine products manufacturing segment, albeit minimally. Malaysian scientists have reaffirmed that the radiation will not reach Malaysia due to its distance from Japan and this means that QL’s fish, caught in Southeast Asian waters, is safe for consumption.

AirAsia BUY Target Price RM3.80 by HLIB

Maintain buy at RM2.87 with an upward revision of target price to RM3.80 from RM3.50: We revise up FY11 earnings by 9.7% after imputing higher passenger load factor, fares, and ancillary income as well as the implementation of a fuel surcharge to offset higher jet fuel prices. We have also increased our FY12/13 earnings forecast by 15% to 20%.

We also upgrade our target price for AirAsia to RM3.80 from RM3.50 per share previously after estimating higher net income for FY11/13. We use the sum-of-parts valuation method to better reflect AirAsia's valuation post listing of AirAsia X, Thai AirAsia and Indonesia AirAsia, and re-rating catalysts from the planned listing.

AirAsia has re-introduced a fuel surcharge for bookings from yesterday due to escalating jet fuel costs which have touched some US$140 (RM415.80) a barrel. To recap, AirAsia abolished its fuel surcharge on Nov 11, 2008, when jet fuel prices dropped to US$80 a barrel. The fuel surcharge will vary between RM10 and RM30, depending on the flight hours.

With this exercise, overall demand for AirAsia flights may be affected, as consumers may switch to competitors. However, we opine that the fuel surcharge is minimal as AirAsia's'' total fare is still one of the lowest and the airline will be able to sustain its market share due to its strong brand name, connectivity, frequency, and the continued strong growth of regional air travel.

The appreciation of the ringgit against the greenback has been providing some cushion against the impact of escalating jet fuel costs, as the fuel is denominated in US dollars.

On April 27 this year, AirAsia announced its maiden gross dividend payout of three sen a share, translating into a net dividend payout of 2.77 sen a share (0.97% net dividend yield). This was in line with our expectations of a possible low dividend payout. Nevertheless, we are positive on the move as it will widen the stock's appeal to investors who are looking for dividend yields (especially pension funds), apart from capital gains. ' Hong Leong Investment Bank.