Thursday, September 23, 2010

IATA raised forecast for 2010 but less upbeat in 2011 -midf

IATA raised forecast for 2010 but less upbeat in 2011

• IATA has significantly revised its profit forecast for 2010 from USD2.5b to USD8.9b due to global demand to expand by 11%yoy and capacity by 7%yoy.

• Load factor from January to July stood at 78% globally, giving an advantage to gain some pricing power and strong improvement in yields. Yields are now expected to grow by 7.3%yoy for passenger.

• Asia-Pacific carriers would continue to drive significant growth globally and expected to post a profit of USD5.2b, better than USD3.0b recorded during the previous peak in 2007 and doubled the previously forecast USD2.2b.

• However, it is less upbeat on the prospects for next year. IATA forecasted lower profit of USD5.3b as governments ran out of cash for pump priming, weakening business confidence and high unemployment rate.

• Although, travel and freight markets will remain strong in Asia, Middle East and South America, it does not expect these markets to be able to sustain the global growth in 2011.

In line with MAS recovery. The latest report from IATA is in line with the recovery of MAS’ performance in 1H10, where its revenue increased by 17.6%yoy in 1H10. However, MAS was only able to increase its yields by 2%yoy to 23.9 sen/RPK as compared to its peers, Cathy Pacific and Singapore Airlines which saw yields increasing by 18% and 15%.

Slower growth in Europe will be moderated by growth in Asia-Pacific. We expect that a slowing growth in the global aviation especially in Europe and the US would have an impact on MAS as Europe and Middle East represents 27.6% of its FY09 flown revenue. However, we are not revising our FY11 estimates as we have not imputed a significant growth in the European and US sector. We believe that the main sector for passenger growth would be in the Asia-Pacific region especially with the recent launched of its Eastern hub in Kota Kinabalu.

Regional carrier, AirAsia will be less affected. We believe that being a regional carrier, AirAsia will be less affected by falling consumer confidence in Europe and the US. We expect that AirAsia will be able to take advantage of the continuing strong demand in Asia for FY11 as evident in the upward earnings revision of 52.6% in our previous report dated 19 August 2010.

Maintain NEUTRAL for the sector. We maintain our NEUTRAL recommendation for the sector as there is persistent doubt on the pace of the global recovery continuing in FY11 and possible fear of a double dip recession. The aviation industry is expected to see lower profits in FY11 with the end of pump priming activities and possible slower business growth in FY11 especially in Europe and the US.

Remain NEUTRAL on MAS. We are maintaining our NEUTRAL recommendation on MAS as we believe that impact of the slower growth in global aviation would be moderated by the growth in Asia-Pacific. We like the fact that its yields had increased slightly despite its yields grew less than average in 2Q10. Our target price of RM2.50 is based on PER of 10.5x, which is the mean PER of its peers.

Upbeat on AirAsia, but.....We also believe that AirAsia’s good performance in FY10 so far will continue into FY11 as demand for travelling continues and with the possible fears of a double-dip recession in 2011, it will gain from bargain hunting from travelers. We are also upbeat for AirAsia’s as it has increased its yields by 15.3% in the last quarter despite being a yield passive carrier.

Downgrading AirAsia to NEUTRAL due to the recent run up. However, with the recent run up in price for Air Asia, we are downgrading our recommendation to NEUTRAL for AirAsia’s shares as our target price of RM2.25 represent only a 4.2% upside to the current price. However, further upside on the share price could lead to profit taking opportunities in the near term.

FBM KLCI : Bottom-up Valuation -midf

Wednesday, September 22, 2010

FBM KLCI Outlook


Overall, the underlying market tone remains firm despite ongoing consolidation, following the rotational plays from overbought blue chips to small to mid caps whilst daily trading volume remains healthy at around or above 800m shares. We maintain our view that current consolidation should be shallow and once the overbought momentum readings are neutralize, the FBM KLCI is likely to resume its upward trajectory to test 1,500 and all time high at 1525 pts.

Economic Transformation Programme (ETP)-Property

Economic Transformation Programme (ETP)-ecm

The property sector is an obvious benefactor of the ETP given that Greater KL is the NKEA with the largest incremental GNI impact. We have been rather sceptical of the various large scale commercial developments within Greater KL that have been announced so far due to oversupply concern and uncertain future demand. However, an ambitious EPP to attract 100 world’s top MNCs may change all that though it will not be an easy task as regional competition to attract FDIs has been intense.

Furthermore, there may also be competition from Iskandar Malaysia in attracting MNCs.
We like the ideas of mass rapid transit (MRT) and high speed rail connection to singapore as these will re-energise Greater KL which has been choked up by poor public transportation system. An efficient public transportation will not only attract MNCs but also makes city living more feasible. Developers with projects in the vicinity of the proposed MRT lines will benefit from higher demand and price appreciation. With better public transportation network, we believe land prices in the city centre will also rise. While new bigscale developments such as RRIM land, RMAF redevelopment, KL Eco City, KL International Financial District, and Kg Baru will benefit from MRT connectivity, we like to highlight a few other notable ones such as Mont Kiara which will benefit Sunrise (SUN MK, Buy, TP: RM3.58), Ampang (near Great Eastern Mall) which will benefit Mah Sing (MSGB MK, non-rated), Sentul which will benefit YTL Land (YTLL MK, non-rated), Bangsar which will benefit Bandar Raya (BRD MK, non-rated), Damansara Heights which will benefit Guocoland (GUOL MK, non-rated), Batu Kantomen which will benefit Boustead (BOUS MK, Hold, TP: RM4.48), and Kajang which will benefit Metro Kajang (MKH MK, non-rated).

Economic Transformation Programme (ETP) -Aviation

Economic Transformation Programme (ETP)-ecm

One of the EPPs under the tourism banner is to encourage tourist arrivals from medium-haul markets (China, India, Saudi Arabia, UAE, Japan, South Korea and Australia) to Malaysia.

Tourists from these markets have higher spending pattern compared to those from shorthaul markets (Indonesia, Philippines, and Vietnam) which currently makes up 78% of tourist arrivals in 2009. PEMANDU targets incremental arrivals from medium-haul markets to reach 43% by 2020 (vs 22% in 2009). Among the initiatives proposed is to increase connectivity to medium-haul markets by liberalizing existing air rights allocation on parallel routes.

We believe increased flight frequencies to the medium-haul countries and further
liberalization of air rights bode well to the aviation industry. Higher tourist flow to the country leads to better load factor and yield to the airlines. Apparent beneficiaries are AirAsia (AIRA MK, Buy, TP: RM2.32), Malaysia Airlines (MAS MK, Hold, TP RM2.08) and MAHB (MAHB MK, non-rated).

Separately, another project within the Business Services segment that will positively impact the aviation industry is to establish Malaysia as the aviation MRO (Maintenance, Repair and Overhaul) hub through MAS’ maintenance arm, MAS Aerospace Engineering (MAE). Apart from handling all the line maintenance and heavy checks for MAS subsidiaries, Firefly and MASWings, MAE also provide services to more than 100 global third party customers. Plans to improve the MRO sector include developing overseas feeder centres to route back component and engine repairs to Subang.

Econ. Transformation Prog (ETP)-cimb

Econ. Transformation Prog


1,476.0 @21/09/10 / Target Index: 1,610

Roadmap to Vision 2020

• Upgrading KLCI targets. Yesterday’s Open Day on the Economic Transformation Programme (ETP) held positive surprises for various sectors, especially construction, property, tourism and consumer and is particularly good news for Gamuda, YTL Corp, UEM Land and the Genting group.

We are encouraged by Idris Jala’s enthusiasm and excitement on the ETP as well as the progress made on the earlier-launched government transformation programme (GTP). Taking into conside ation the KLCI’s surprisingly strong performance of late, the easing fears of a double-dip in the US and positive surprises from the ETP, we are raising our end- 11 KLCI target from 1,520 pts to 1,610 pts after reducing the discount to the 15.3x 3-year moving average P/E from 15% to 10%. We remain OVERWEIGHT on Malaysia and see potential re-rating catalysts in the form of positive newsflow from 1) the ETP Open Day, 2) contracts relating to the 10th Malaysia Plan and 3) the upcoming 2011 Budget on 15 Oct.

• Construction and property the big winners. Drilling down to the sectors and stocks affected by ETP, we see positive implications for the construction and property sectors. We were pleasantly surprised that
1) the RM36bn MRT project is very high on the commitment scale of catalytic projects with named investors,

2) the high speed rail from KL to Singapore and Penang is a project with partial or near commitment from a named investor, and

3) Johor Bahru is listed as an example of a geographic location that is a driver of economic activity. This is very good news for contractors in general and Gamuda, MMC and YTL Corp in particular, as well as the property sector in Greater KL, Iskandar Malaysia and Penang. Building material companies will also benefit from any boom in the construction and property sectors.

• Other winners. Sectors that will also ride on the high speed rail project which will draw Singapore business and tourist travellers to KL, and later Penang include tourism, retail and hotel. Genting Berhad and Genting Malaysia should benefit from an increase in visitors from Singapore to Genting Highlands. Companies with exposure to retail and hotel activities including KLCC Property, Tradewinds Corp and CMMT stand to gain from higher rental, room and occupancy rates due to an influx of Singaporeans and also tourists visiting Singapore and making a beeline for KL or Penang. Other less obvious sectors that should also enjoy spillover benefits include the healthcare and education sectors due to the much cheaper costs in Malaysia. In the oil & gas sector, Dialog is teaming up with the Johor state government on the Pengerang oil storage project, which aims to make Malaysia a regional oil storage hub.

Malaysia Airlines System - ecm

Malaysia Airlines
RM2.20 -Hold
Target Price: RM2.08
Increasing cargo fleet size

· News
Malaysia Airlines (MAS) has reportedly placed a firm order with Airbus for two more A330-200F freighters, following the conversion of two existing options. The latest contract increases the airline's firm orders for freighter aircraft to four. The aircraft will be operated by Malaysia Airlines Cargo Sdn Bhd (MASkargo). According to management, the new aircrafts will enable MASkargo to efficiently match capacity with demand on many medium lift sectors across MAS’ cargo network. (Business Times)

· Comments
We understand that the new freighters are expected to be delivered in 1H2012. We view the increase in MASkargo’s fleet size is in line with the Group’s plans to enhance the cargo business where it is targeting 50% annual growth in freighter services. This includes introducing new service routes which include China-Europe and China-USA routes. The cargo division has been a relatively small part of the Group’s business where at end June-2010, it contributed 20% to the Group’s total revenue. We have factored in the cost of two additional freighters into our FY11 projections. As a result, borrowings have increased by 14% to RM5bn leading net gearing to rise from 1.11x to 1.39x. However, there is no material impact on our FY11 earnings. As such, we maintain our Hold recommendation and target price of RM2.08.

Tuesday, September 21, 2010

small-mid caps -DBS

Straits Times Index Technical Outlook -dbs

STI’s current rise towards 3100 is within our expectations set 2 weeks ago. The rising trend currently remains intact. This should continue till end September or even early October underpinned by quarter end window dressing.

We raise the possibility of the index surpassing our 3100 objective level to the 3160 resistance level before it runs into higher risk of a consolidation. Above that, the major resistance is at 3250. The near-term support levels are at 3010 and 2935.

The market breadth McClellan Oscillator currently reads 29.7. This is considered moderately overbought. We will be very watchful of a market pullback should this indicator heads closer to the extreme overbought reading of 50. Equally important, this current indicator reading suggests that while the local bourse can support rotational interest, on the other hand, a broad-based rally will lift the breadth indicator to an the extreme overbought level in a matter of days that can bring the market correction forward

Economic cycle

Beyonics Technology -CIMB

Beyonics Technology (BT SP; S$0.26) – BUY
Historical P/E: 18.5x, P/BV: 0.5x

• Beyonics is trying to breakout of its consolidation triangle after closing marginally below its triangle resistance at S$0.265 yesterday. Trading volume also picked up, suggesting that the bulls are really giving it a go.

• Both its indicators look positive at the moment, which is supportive of a breakout.

• In the days ahead, prices could attempt another breakout of the S$0.265 resistance. A breakout would likely send prices climbing towards S$0.30 next. Keep a stop just below S$0.24 just in case the bulls fail in their breakout attempt.

First REIT -cimb

First REIT (FIRT SP; S$0.885)
• First REIT announced that it is in discussions with PT Lippo Karawaci in relation to the acquisition of two healthcare properties located in Indonesia; being Mochtar Riady Comprehensive Cancer Centre and Siloam Hospitals Lippo Cikarang. It is intended that these properties be leased by First REIT to PT Lippo Karawaci under long term lease agreements.

• The terms of the transactions are currently being negotiated, and the transactions would be subjected to (i) the valuations of the properties; (ii) the approval of the relevant regulators and the audit committee of the Manager of the Trust; and (iii) unitholders of First REIT.

• We have a BUY call on the stock, target price of S$1.08.

Monday, September 20, 2010



当有一天所有人都在讲赶快买股票的时候,6个月之后股市绝对崩盘。这是因为胡立阳通过统计得出,任何商品期货包括股票,只要上了报纸的头条,只要所有投资人都认定这个价格必定会涨的时候,通常在未来6 个月内必定暴跌,这叫物极必反。


Lower liners to play catch-up whilst bluechips consolidate -HLG

§ Technically, the growing overbought position and the formation of a shooting star (last Wednesday) may entice jittery investors to book profit, thus leading the market to greater volatility in the immediate term. Nevertheless, the bulls are still dominating the floor in the mid to long term and likely to flow to lower liners while any FBM KLCI retreat will likely be short-lived with investors buying on weakness.

§ On top of mildly positive external economic newsflow and strengthening Ringgit, positive domestic developments like the Economic Transformation Program Open Day on Sept 21, NEM2, Budget 2011 and speculation of Sarawak and general elections are likely to cushion significant correction.

§ For Bursa, immediate resistance targets are 1472 (76.4% FR from top 1525 and low of 1300) pts, 1490 (8 Jan 08’s intraday high) and all-time high of 1524. Immediate support levels are 1449 (10-d SMA). Stronger support levels are situated around 1429 (20-d SMA) and 1405 (30-d SMA) pts.

§ For Wall St, all eyes will focus on the FOMC meeting on 21 Sept as the turning point for stocks that have been searching to break out of the current range with conviction. If the Federal Reserve's view of the economy brightens by just a glimmer this week, it could push the Dow above the 3M high of 10720, and probably to retest the 11k psychological level prior to the US mid- term election in Nov.

Sunday, September 19, 2010

胡立阳- 农夫播种术(财经追击 18.09.10)


Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)

乔治·索罗斯(George Soros)



高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo

There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
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