Thursday, July 21, 2011

Stocks to watch 20110720: Bumi Armada, Tenaga, Nadayu, KLCCP

Written by Joseph Chin of theedgemalaysia.com
Wednesday, 20 July 2011 19:53

KUALA LUMPUR: An improvement in market sentiment would bode well for Bumi Armada Bhd which will be listed on the Main Market of Bursa Malaysia on Thursday, July 21.

Its institutional price was fixed at RM3.03 per share after it had completed the bookbuilding process. The final retail price was fixed at RM3.03 per share, which was 12 sen below the retail offering of RM3.15.

The Edge weekly said the listing exercise would enable Bumi Armada to raise RM2.66 billion which is the country’s biggest IPO and the second largest in Southeast Asia so far this year.

At RM3.03, it is valued at more than 20 times price-to-earnings based on its FY2010earnings per share of 11.9 sen. The target price for the company ranges from RM3.62 to RM4.05, the weekly reported.

Other stocks to watch would be TENAGA NASIONAL BHD [], Nadayu PROPERTIES [] Bhd, KLCC Properties Bhd and DIGI.COM BHD [].

The Edge FinancialDaily reported on Wednesday TNB was likely to report weaker 3QFY11 ended May 31 results tomorrow due to higher coal cost and plant maintenance.

The utility giant posted a net profit of RM1.11 billion in the previous corresponding quarter on the back of RM7.72 billion revenue. In 2QFY11 ended Feb 28, TNB recorded a net profit of RM630.3 million.

HwangDBS said while weaker 3Q earnings are expected this year, it looks forward to stronger earnings from 4Q onwards as TNB has received an average tariff hike of 7% effective June 1.

“We estimate there will be a net profit enhancement of RM600 million per year for TNB from the 7% tariff hike, despite the 28% increase in subsidised gas cost,” said the research house.

UDA Holdings Bhd is terminating the proposed sale of a piece of land in Jalan Sultan Ismail in the heart of Kuala Lumpur for RM215.50 million to Nadayu, formerly known as MUTIARA GOODYEAR DEVELOPMENT [] Bhd.

UDA said it was “unable to obtain the approval of UDA’s shareholder” for the disposal of the 3.56 acres and intends to terminate the sale and purchase agreement with Nadayu.

KLCC expects its revenue to be boosted by RM100 million from the Lot C development project.

The revenue boost from the RM1 billion Lot C development would be in the financial year 2012.

DiGi’s earnings fell 15.1% to RM236.31 million from RM278.41 million a year ago on accelerated depreciation of RM323.76 million and also due to premium relating to the up-coming early redemption of its debt notes.

Revenue rose 9.7% to RM1.46 billion from RM1.33 billion, earnings per share were 30.4 sen compared with 35.8 sen. It declared a tax exempt interim dividend of 30 sen per share.

It said the RM1.5 billion revenue was well above the RM1.3 billion reported a year ago.

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