.png)
Equity Focus
KNM Group (RM0.36): Hold
Still challenging, still grey …
We have cut core net profit by 17-21% in FY09-10, on orderbook slowdown and RM50m amortization cost p.a. recognized from Borsig post-PPA exercise.
Maintain Hold, TP cut to RM0.69 based on 1.4x BV but depressed valuations could trigger privatization talk.
Daily trading volume has been exceptionally high over the past six months, averaging 1% of KNM’s share base but key shareholders remain with no emergence of new funds.
Banking: Underweight
Moving into rising NPLs and more negative news flows
4Q08 reporting season sprung no major surprises for the banks, with combined net profit down 2.1% QoQ, but asset quality stayed firm.
Sector earnings are now expected to contract 10.1% in 2009, before recovering 6.1% in 2010 (previously 2009-10: -6.3%, +3%) as combined earnings were lowered by 5.4% (2009) and 2.6% (2010).
We downgrade the sector to Underweight, as banks enter a period of rising NPLs and more negative economic news flows.
Other Local News
PAAB: Seeks approval in principle
Can-One: No plans to privatise Kian Joo
Tabung Haji: Looks to bonds, property mart
PPB: Rewards investors with handsome payout for 2008
AirAsia: Set to raise money for expansion
Bina Puri: Gets RM693m Brunei contract
Construction: Cost of 2nd Penang Bridge stays RM4.3b
Rubber: Ministries considering floor price for dry rubber
Politics: Tree House - Assembly meets in open air, court bars further meetings
Other Local News
U.S: AIG's bailout made Bernanke `more angry' than any other episode in crisis
U.S: Bernanke says U.S. may need to expand USD 700b bank rescue
U.S: Pending sales of existing homes fall 7.7% MoM
Canada: Cuts benchmark rate to record low of 0.5%, signals further stimulus
U.K: Darling may grant BoE money-printing powers in March 5 letter
U.K: Treasury pledges USD 18b to rescue highway, school construction
Ireland: Plans emergency measures to tackle deficit as recession worsens
Japan: To tap foreign reserves to lend to companies
China: Economy may recover in first half, deputy central bank chief says
Australia: Leaves rate at 3.25% after recent cuts
Technicals
The market fell on poorer market sentiment following the steep fall of the overnight US markets
KNM Group (RM0.36): Hold
Still challenging, still grey …
We have cut core net profit by 17-21% in FY09-10, on orderbook slowdown and RM50m amortization cost p.a. recognized from Borsig post-PPA exercise.
Maintain Hold, TP cut to RM0.69 based on 1.4x BV but depressed valuations could trigger privatization talk.
Daily trading volume has been exceptionally high over the past six months, averaging 1% of KNM’s share base but key shareholders remain with no emergence of new funds.
Banking: Underweight
Moving into rising NPLs and more negative news flows
4Q08 reporting season sprung no major surprises for the banks, with combined net profit down 2.1% QoQ, but asset quality stayed firm.
Sector earnings are now expected to contract 10.1% in 2009, before recovering 6.1% in 2010 (previously 2009-10: -6.3%, +3%) as combined earnings were lowered by 5.4% (2009) and 2.6% (2010).
We downgrade the sector to Underweight, as banks enter a period of rising NPLs and more negative economic news flows.
Other Local News
PAAB: Seeks approval in principle
Can-One: No plans to privatise Kian Joo
Tabung Haji: Looks to bonds, property mart
PPB: Rewards investors with handsome payout for 2008
AirAsia: Set to raise money for expansion
Bina Puri: Gets RM693m Brunei contract
Construction: Cost of 2nd Penang Bridge stays RM4.3b
Rubber: Ministries considering floor price for dry rubber
Politics: Tree House - Assembly meets in open air, court bars further meetings
Other Local News
U.S: AIG's bailout made Bernanke `more angry' than any other episode in crisis
U.S: Bernanke says U.S. may need to expand USD 700b bank rescue
U.S: Pending sales of existing homes fall 7.7% MoM
Canada: Cuts benchmark rate to record low of 0.5%, signals further stimulus
U.K: Darling may grant BoE money-printing powers in March 5 letter
U.K: Treasury pledges USD 18b to rescue highway, school construction
Ireland: Plans emergency measures to tackle deficit as recession worsens
Japan: To tap foreign reserves to lend to companies
China: Economy may recover in first half, deputy central bank chief says
Australia: Leaves rate at 3.25% after recent cuts
Technicals
The market fell on poorer market sentiment following the steep fall of the overnight US markets
No comments:
Post a Comment