Highlights

RHB Research

Author: kiasutrader   |   Latest post: Wed, 12 Oct 2016, 05:13 PM

 

RHB Technical Research - DKSH (5908)

Author: kiasutrader   |  Publish date: Wed, 12 Oct 2016, 05:13 PM


The group offers any combination of sourcing, marketing,sales, distribution & after sales-services. 4 business units : consumer goods,healthcare,technology,performance material

Core business - support other companies to grow their business in new or existing markets.

Operates in 36 countries through a comprehensive network of 740 business locations in Asia Pacific & 30 business locations in Europe, America PE : 21.22, Dvd Yld : 1.52, NTA : 3.249.

Q1

  • Revenue : 1.332b
  • Net profit : 11,270m
  • EPS : 7.15

Q2

  • Revenue : 1.354b
  • Net profit : 20,417m
  • EPS : 12.95 *Mainly contribute from marketing distribution & services and logistic services* Prospect

Positive outlook-cost remain stable,no major expenses or infrastructure upgrades are planned in 2016 as the infrastructure has now been in place to support the growth currently being experienced.

Clients and customers portfolio remain well diversified. supported by strong sales,marketing & distribution.

Market trends support a positive medium to long term outlook ;

Growing middle class,support demand for consumer goods and healthcare products.

Manufacturer increasingly focus on core competencies and seek specialized service provider in order to grow the market. Curent price : RM6.20, TP : RM7.00, Potential upside : 12.90%.

Source: RHB Research - 12 Oct 2016

Labels: DKSH
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Trading Stocks - 14 June 2016 - JOHOTIN | HWATAI | AWC | KOMARK | CENTURY | KEURO

Author: kiasutrader   |  Publish date: Tue, 14 Jun 2016, 02:19 PM


Johore Tin may climb higher after crossing the MYR2.00 mark in its latest session. A bullish bias may be present above this point with a target price of MY2.23. The stock may consolidate further if it dips back below the MYR2.00 mark in the near term. Support may be found at MYR1.87, where traders can exit upon a breach to avoid the risk of a further correction.

Hwa Tai Industries may trend higher after surging through the MYR0.54 to extend its 52-week high. A bullish bias may be present above this point with a target price of MYR0.60, followed by MYR0.64. The stock may drift sideways if it cannot sustain above the MYR0.54 mark in the near term. Support may be found at MYR0.505, where traders can exit upon a breach.

AWC may trend higher after climbing above the MYR0.805 to extend its multi-year high in its latest session. A bullish bias may be present above this point with a target price of MYR0.875, followed by MYR0.935. The stock may drift sideways if it cannot sustain above the MYR0.805 mark in the near term. Support may be found at MYR0.73, where traders can exit upon a breach to avoid the risk of a further correction.

Komarkcorp may rebound further after inching above the MYR0.44 level in its latest session. A bullish bias may be present above this points with a target price of MYR0.53. The stock may trend sideways if it dips back below the MYR0.44 mark in the near term. Support may be found at MYR0.39, where traders can exit upon a breach.

Century Logistics may rebound further after sustaining above the MYR0.84 level in recent sessions. A bullish bias may be present above this point with a target price of MYR0.915, followed by MYR0.95. The stock may drift sideways if it cannot sustain above the MYR0.84 mark in the near term. Support may be found at MYR0.80, where traders can exit upon a breach.

Kumpulan Europlus was testing the MYR0.97 level in recent trades. A bullish bias may be present above this point with a target price of MYR1.03, followed by MYR1.10. The stock may consolidate further if it cannot surpass the MYR0.97 mark in the near term. Support may be found at MYR0.91, where traders can exit upon a breach to avoid the risk of a further correction.

Source: RHB Research - 14 Jun 2016

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Salutica Bhd - Paying Special Salute

Author: kiasutrader   |  Publish date: Thu, 5 May 2016, 09:28 AM


Salutica is slated for listing on the Ace Market of Bursa Malaysia on 18 May. The exercise involves the issuance of 78m new shares and offer for sale of 23m shares at an IPO price of MYR0.80 /share. We value the firm at MYR1.18 (48% upside) based on our target 2017 P/E of 10x, ie in line with its peers . We are forecasting for an earnings CAGR of >40% for FY15-18, which translates into an appealing PEG of 0.24x.

Riding on Bluetooth growth. Bluetooth has become one of the most prevalent and pervasive wireless technologies available today. This is evident in the fast growing Bluetooth- enabled devices shipments, which jumped to 3bn units in 2014 from 1.8bn units in 2011 – a CAGR of 18.6%. Independent market researcher Smith Zander International expects global shipment volumes to hit 4.9bn units by 2018. The adoption of Bluetooth technology to enhance connectivity wll play a significant role in the Internet of Things (IoT)environment. We believe this could ultimately spur demand for Bluetooth related devices , which, in our view , could benefit Salutica in the long run.

New models to drive growth. In 2011 -2013, Salutica secured manufacturing contracts for the design and production of Bluetooth stereo handsets from Plantronics Inc and Jaybird LLC. Currently, Salutica has three existing surface mount technology (SMT) lines with maximum output of approximately 14m units pa. Post IPO, it is looking to procure a new line to in crease SMT capacity by >32% to 18.5m pa. We believe the capacity expansion is intended to eye more outsourcing opportunities from Plantronics and Jaybird. Based on our findings, Jaybird is set to launch two new products called Freedom and X3 in 2Q16 ,while Plantronics is looking to launch 1-2 new models over the next 6-12 months. Ultimately, these new launches by its customers could spell more job opportunities for Salutica over the near to medium term.

Looking to bag a new product. On top of that, Salutica is currently in the midst of securing a contract to manufacture a USB-powered device that adds touchscreen functionality to non -touch laptop screens. Approximately MYR10m of the IPO proceeds are be utilis ed to purchase a new production line with an annual installed capacity of 3m devices dedicated for this new product. We expect the installation to take place in 4Q16 , with mass production to commence by early-2017. Earnings accretion is likely to be felt come 2HFY17(Jun).

Our valuation estimate of MYR1.18 is pegged to a target 2017 P/E of 10x, which is in line with local peers VS Industry (VSI MK, BUY, TP : MYR1.68) and SKP Resources (SKP MK, NEUTRAL, TP: MYR1.42). This is further supported by a corroborative DCF valuation of MYR1.28 that implie s a 2017 P/E of 10.8x, ie close to our target P/E. Management is committed to a dividend policy of no less than 30% going forward. This offers decent dividend yields of 2.3 -5.3% for FY16F-18F.

Key risks include customers’ concentration risk ( its three largest customers contributed close to 90% of its FY15 revenue), dependence on foreign labour(75% of its workforce), and susceptibility to forex fluctuations , given that its sales are predominantly in USD.

 

 

 

IPO Structure The IPO is set to raise MYR62.4m Salutica is slated for listing on the Ace Market of Bursa Malaysia on 18 May. The exerciseinvolve s the issuance of 78m new shares and offer for sale of 23m shares at an IPO price of MYR0.80 per share. The exercise would raise MYR62.4m in gross proceeds. Post IPO, the equity interests of the single - largest shareholder, ie the Lim family , would stand at 67.7%. This is via the family ’s vehicles Blue Ocean Enlightenment SB and Genius Thinkers SB.

 

 

Business Overview Company background Salutica is an investment holding company. Its 100% -owned subsidiary Salutica Allied SBis the main business entity. Salutica Allied commenced operations in 1990 as an original equipment manufacturer (OEM), principally involved in the manufacturing of precision plastic pars and components for the electronics industry. Over the years, the company has transformed. It is now involved in the design, development and manufacture of consumer electronic products , with the focus primarily on Bluetooth -related devices. Salutica Allied’s niche is essentially in being a one- stop solutions provider for external brands . This is given its fully vertically -integrated operations. At the same time, the company is engaged in the development of its in - house tyre pressure monitoring system (TPMS) products under the FOBO brand. Currently, Salutica’s manufacturing base is in Ipoh, Perak, and sits on three pieces of contiguous land measuring 9.6 acres in total. Its production plant has a total manufacturing floor space of approximately 30 ,000 sq ft.

Management team led by largest shareholder Mr James Lim is the group’s MD/CEO. An electrical and electronics engineer by profession, his previous stints include ASEA AB of Sweden, Maxtor Corp, Applied Magnetics SB and Seagate Technology. He joined Salutica Allied in 2004 as CEO and helped set up the research & development (R&D) division to focus on Bluetooth technology. In 2013, Mr Lim led a managemen buyout of the company from the Balda AG Group when the latter stated its inten t to focus on its core business , medical precision plastic parts and solutions.

 

Investment Highlights Riding on the growth in Bluetooth devices Bluetooth has become one of the most prevalent and pervasive wireless technologies available today. Its role has evolved with the advancement of technology and the expansion in the consumer electronics product lines to accommodate new functions . These include connected home and wearable technology. This is evident in the fastgrowing Bluetooth- enabled device shipments , which jumped to 3bn units in 2014 from 1.8bn units in 2011 – a CAGR of 18.6%. Independent market researcher Smith Zander International expects gobal shipment volumes to hit 4.9bn units by 2018, as the adoption of Bluetooth technology to enhance connectivity is to play a significant role in the IoTenvironment. We believe this could ultimately spur demand for Bluetooth -related devices ,which – in our view – could benefit Salutica in the long run. It is currently a member of the Bluetooth Special Interest Group, which owns the Bluetooth trademark, oversees development of Bluetooth standards, publishes technological specifications and administers its qualification programme.

On a side note, we highlight that the next-generation flagship smartphones could get rid of headphone jacks altogether. Notably, Apple Inc is widely anticipated to launch its iPhone 7series this coming September. The market is rife with talk that Apple is eliminating the headphone jack to reduce the thickness of its next-generation smartphone line- up. This, if it materialis es , could spark demand for Bluetooth-enabled audio devices . A t the same time, this ought to compel existing Bluetooth headphone brands such as Plantronics and Jaybird to up the ante for better audio output quality to entice buying interest. Should other handset makers decide to follow Apple’s move in getting rid of the standard 3.5mm headphone jack, we see plenty upside potential for Salutica to tap into this opportunity by leveraging on its niche within the Bluetooth space.

New models to be launched by its customers In 2011 -2013, Salutica secured manufacturing contracts for the design and production of Bluetooth stereo handsets from Plantronics and Jaybird. Currently, the group has three existing SMT lines with a maximum output of approximately 14m units pa. Post IPO, it is looking to procure a new line to increase its SMT capacity by over 32% to 18.5m pa. We opine that the capacity expansion is intended to eye for more outsourcing opportunities from Plantronics and Jaybird. Based on our findings , Jaybird is set to launch two new products named Freedom and X3 in 2Q16. Following the unveiling of the new series at the Consumer Electronics Show 2016 in January, early reviews – on better battery performances – have thus far been positive. The new models use the more power- efficient Bluetooth 4.0 wireless technology. On the other hand, our channel checks indicate that Plantronics is looking to launch 1- 2 new models over the next 6-12 months. Ultimately, these new launches by its customers could spell more job opportunities for Salutica over the near to medium term.

Looking to bag a new product Beyond its existing focus on Bluetooth audio devices, management is currently in the advanced stages of securing a contract to manufacture a USB - powered device that addstouchscreen functionality to non -touch laptop screens. This unnamed device uses infrared and proprietary software to detect a user’s touch position on the display monitor of a laptop . Salutica has been in active discussions with this potential customer for the past six months. It also participated in both the design of the prototype as well as dis cussions on the manufacturing process flow for commercial production to take place . Management said approximately MYR10m of the IPO proceeds are be utilis ed to purchase a new production line – with an installed capacity of 3m devices pa – dedicated to this new product. We understand that, as opposed to its typical SMT lines, this new line is an automated wafer chip and electronic component s encapsulation production system . It also has the additional capability to mount wafer chips and perform wire bonding. We expect the installation to take place in 4QFY 16, with mass production to commence byearly -2017. Earnings accretion is likely to be felt come 2HFY17.TPMS to gradually take off

To reduce the group’s dependence on third party manufacturing contracts, management spent over MYR5m in 2012 -2013 to develop its own TPMS products under the FOBObrand. In essence, the TPMS system allows users to monitor real -time vehicle tyre pressure using Bluetooth 4.0 technology. Currently, FOBO’s offerings cover a broad range of platforms , which includ e bikes, cars, light trucks and vans. Management is looking to officially launch its FOBO Ultra product, to cater for heavy -duty trucks , by June.

On the other hand, Salutica is looking to penetrate into more e -commerce platforms to increase awareness of its brand. Currently, sales are conducted t hrough its own ecommerce site (http://www.my-fobo.com) as well as third party platforms such as Amazon, Lazada and Mudah.com. In addition, m anagement has appointed local and overseas distributors to penetrate into physical retail outlets. In Malaysia, FOBO products are available in 47 retail point of sales in Malaysia through authorised distributor Sunweu SB, which is involved in the distribution of mobile phone accessories in Malaysia. On the overseas front, Salutica has selected 29 distributors to help ma rket its products. FOBO sales made up approximately 1% of Salutica’s FY15 revenue at MYR3.5m . We expect this to increase to MYR8m-10m by FY17-18. This is as we see potential for this aftermarket solution to gain momentum , given that there is a large numbe r of vehicles on the road that do not come pre-installed with this specification.

 

Working on new in-house products To capitalise on the strength of its R&D division – which accommodates over 30 personnel – to drive product development and new innovations , management is exploring potential opportunities within the healthcare industry. We gather that this would likely be in the form of the development of electronic devices for personal health moni toring , eg blood pressure and glucose monitors for home usage. This could be management’s long-term strategy to grow its own products portfolio to reduce dependence on third- party manufacturing contracts. Salutica said that commercial rollout could take place by 2019 or 2020.

Risk Factors Customer concentration Salutica’s three largest customers contributed close to 90% of its sales in FY14 and FY15. The potential loss of these customers could have significant negative impact on the group’s financial performance. Nonetheless, we believe such an outcome is unlikely, as Salutica has established business relationships of 4 -10 years with each of them. The group is also on the approved suppliers’ list for the three firms.

 

Sales and raw material procurement in USD Over 95% of Salutica’s revenue is derived in USD. This , however, is partly mitigated by its raw materials procurement, which is denominated in the same currency. We estimate that every 1% strengthening in the MYR against the USD could potentially impact Salutica’s bottomline by 1-2%, assuming all else as constant.

 

Sales and raw material procurement in USD Over 95% of Salutica’s revenue is derived in USD. This , however, is partly mitigated by its raw materials procurement, which is denominated in the same currency. We estimate that every 1% strengthening in the MYR against the USD could potentially impact Salutica’s bottomline by 1-2%, assuming all else as constant.

Source: RHB Research - 5 May 2016

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Trading Stocks - 5 May 2016 - IWCITY | HLIND | Protasco | MAYBULK | INARI | GTRONIC

Author: kiasutrader   |  Publish date: Thu, 5 May 2016, 09:27 AM


Iskandar  Waterfront  City  (IWCITY)  may  trend  higher  after  surgingabove  the  MYR0.95  level  in  its  latest  close.  A  bullish  bias  may  be present above  this point, with a target price of MYR1.05, followed by MYR1.12.  On the other  hand, the stock  may  drift sideways  if it dips  back  below  the  MYR0.95  level.  Support  may  be  found  at MYR0.905, where traders can exit upon a breach to avoid the risk of a further correction.

 


Hong Leong Industries may climb further after extending to a  multiyear  high  in  its  latest  session.  A  bullish  bias  may  still  be  present above the MYR7.30 level, with a target price of MYR8.30. The stock may take a further breather  if  it retraces below the MYR7.30 mark in the near term.  Support may be found at MYR7.00, where traders can exit upon a breach to avoid the risk of a further correction.

 

Protasco  rebounded  to  test  the  MYR1.74  level  in  its  latest  sessionafter the recent  pullback. The bullish  bias may be enhanced if  the stock  surpasses  this  point  in  the  near  term,  with  a  target  price  of MYR1.92,  provided  the  MYR1.84  resistance  can  be  violated. However,  it  may  trade  sideways  if  the  MYR1.74  mark  cannot  be surpassed.  Support  may  be  found  at  MYR1.64  where  traders  can exit upon a breach to avoid the risk of a further correction.

 

Malaysian  Bulk  Carriers  may  rebound  further  after  forming  a “Bullish Engulfing” pattern in its latest session. A bullish bias may be present above the MYR0.835 level, with a target price of MYR0.945, followed by MYR1.00. The stock may drift lower if it retraces back below  the  MYR0.835  mark.  Support  may  be  found  at  MYR0.755,where traders can exit upon a breach to avoid the risk of a further correction.

 

Inari Amertron may experience a technical rebound after forming a “Bullish  Engulfing”  pattern  amid  oversold  conditions  in  its  latest session.  A  bullish  bias  may  be  present  above  the  MYR2.78  level, with  a  target  price  of  MYR3.03.  The  stock  may  drift  lower  if  it cannot  breac  the  MYR2.78  mark.  Support  may  be  found  at MYR2.60, where traders can exit upon a breach.

 


Globetronics  Technology  may  be  poised  for  a  technical  rebound after forming a “Bullish Engulfing” pattern  amid oversold conditions in  its  latest  session.  A  bullish  bias  may  be  present  above  the MYR3.56 level, with a target price of MYR4.17 –  ie  the mid-point of 26 Apr’s black candle. The stock may drift lower if it cannot surpass the  MYR3.56  mark.  Support  may  be  found  at  MYR3.12,  where traders can exit upon a breach.

Source: RHB Research - 5 May 2016

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Hartalega - Moderating Earnings Growth Ahead

Author: kiasutrader   |  Publish date: Wed, 4 May 2016, 09:36 AM


We maintain NEUTRAL with an unchanged TP of MYR3.95 (5% downside) as we remain cautious of heightened industry competition amidst a rising cost environment. We expect operating margins to be crimped as manufacturers struggle to fully pass on the higher costs, while deferredcapacity expansion will subdue earnings growth. Nonetheless, we believe current valuations have caught up with the fundamentals where the stock is trading marginally above its historical +0.5SD valuation band.

Weaker ASP. Reflecting the more competitive landscape, Hartalega reported a 17% QoQ fall in ASP. We believe that the ASP decay was exacerbated by greater exposure in the nitrile glove segment as well as a relatively more concentrated clientele base. Furthermore, we forecast ASP pressure to remain in subsequent quarters, as the industry adjusts to evolving demand-supply dynamics. This could complicate the cost pass-through mechanism with itscustomers, especially in a rising cost environment (minimum wage/raw materials) and would adversely impact operating margins.

Capacity growth deferred. Amid a more competitive landscape, Plant 3&4 of the Next Generation Complex (NGC) would now be delayed to Oct 2016 (three months delay) while the pace of commissioning would fall to two lines per 1.5 months (from two lines per month for Plant 1&2). While this would alleviate over-supply concerns, future earnings growth will be moderated. Downside risk to our recommendation includes a rebound in raw material prices while upside risk is a weaker-than-expected competitive landscape.

 

 

Maintain NEUTRAL. We remain cautious as we believe valuations have caught up with fundamentals despite the challenging outlook. Maintain NEUTRAL with unchanged TP of MYR3.95 (5% downside, CoE:9%, TG:2%) with an implied CY16F P/E of 23.5x. The stock is trading at 24.7x CY16F P/E, marginally above its historical +0.5SD trading band of 24.0x - an 8 month valuation low.

 

 

 

 

 

Source: RHB Research - 4 May 2016

Labels: HARTA
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Press Metal - On Track For Record Earnings

Author: kiasutrader   |  Publish date: Wed, 4 May 2016, 09:35 AM


Press Metal is all set to post record earnings with its Phase III aluminium smelter at the end stage of commissioning, while its production costs remain in the first quartile of the global cost curve. we lift our earningsestimates for the next three years (FY16-18) by 3.3-15.5% due to: 1. The recent strengthening of aluminium prices; and, 2. Strengthening of the MYR/USD exchange rate, Coupled with the revision in terminal growth to -3%, a 20% discount to our fully-diluted DF valuation derives a higher TP of MYR4.50. Keep BUY. Making a comeback. Press Metal’s Phase III smelter in Samalaju is at the tail-end of ramping up and is expected to be fully commissioned in the next few weeks. Phase II of its Samalaju smelter also returned to normal operations in late Nov 2015 after six months of fire damage repair while the Mukah smelter (Phase I) continues its regular production. We expect its aluminium smelting capacity to rise to 760,000 tonnes per annum (tpa) or 1.5% of global primary aluminium production, and sales tonnage to surge 65.7%/11.8% YoY in FY16-17 respectively. Its aluminium smelters in Sarawak represent a successful lowcost model currently in the first quartile of the global production cost curve.

Forecasts and key risks. The strengthening of aluminium prices and the MYR/USD prompted us to raise our FY16-18 earnings estimates by 3.3-15.5% respectively. Key risks include further downward pressure on aluminium prices and a sharp weakening of the USD that may hurt its profitability. In addition, an unexpected power supply interruption at its smelting plant may damage machineries and disrupt its operations.

 

 

 

Keep BUY with a higher TP. While headline profit was lifted by a one-off insurance claim of MYR40m (net of MI), we deem 1Q16 core results to be largely in line with our expectations but above street estimates. We continue to value Press Metal based on DCF on a 20% discount and fully-diluted basis, but lift our terminal growth rate to -3% (from -15%) to derive a higher TP of MYR4.50 (from MYR3.56). Reiterate BUY.

 

Aluminium price and forex revisions. Aluminium cash prices have been hovering above USD1,600 per tonne for the past two weeks, which prompted us to revisit our aluminium price assumption. We have revised up the London Metal Exchange (LME) aluminium spot price to the average of USD1,600 and USD1,650 a tonne in FY16F-17F respectively (from USD1,525 and USD1,548 respectively), with a 1.5% pa increase expected from FY18F onwards. Still, we remain prudent and continue to project the physical premium paid on top of the LME cash price for the standard aluminium ingot (P1020) to stay flat at USD100 per tonne.

We believe our latest all-in aluminium price assumption is conservative vs its long-term price movement. The nominal all-in aluminium price fell below this level for short period spost the global financial crisis (GFC) in 2008 and 2009, the 1997’s Asian financial crisis, and the recession in the early 2000s. Furthermore, this is also the lowest level in real terms on a 3% inflation-adjusted basis. In addition, we noted that the recent strengthening of the MYR/USD is mildly negative to Press Metal’s profitability. Our latest house assumptions on MYR/USD are 4.00/3.80/3.70 for FY16/FY17/FY18 respectively (from 4.20/4.10/4.00).

 

 

 

 

Earnings set to surge. Despite our prudent assumption revisions, our latest projection shows that Press Metal is capable of recording a MYR411m (from MYR383m) core net profit in FY16. With the Samalaju smelter (Phase III) set to resume full operations by midMay 2016, we project a profit of MYR100m in 2Q16 with an average all-in-aluminium price of USD1,700 a tonne. Earnings are set to improve further to MYR125m in 3Q16 and MYR130m in 4Q16 when all plants start to run at full capacity and the all-in aluminium price escalates to USD1,745 a tonne in 2H16. We project Press Metal’s FY17 profit to reach MYR534m (from MYR479m), with the all-in aluminium price expected to average USD1,750 a tonne.

Ride on this earnings wave. We urge investors to take the opportunity to ride on this potential earnings wave. We project core earnings of MYR411m for FY16 and MYR534m for FY17, implying YoY growth of 50.0% and 29.9% respectively. These would mark new profit milestones for the company upon its first full-year operations for all its smelters in Sarawak.

 

BUY with TP revised up to MYR4.50. We continue to believe that the DCF approach may be the closest approximation to the stock’s long-term value. We incorporate the group’s warrants – issued in late 2011 – into our valuation. That said, our previous terminal growth assumption of -1.5% may be overly conservative as Sarawak Energy islikely to continue offering power tariffs at competitive rates so that its major client could maintain its operations. Hence, we lift our terminal growth assumption to -3%. At a 20% discount on the stock’s fully-diluted DCF valuation, we derive a higher TP of MYR4.50 (from MYR3.56), which implies 14.2x, 10.9x and 10.5x P/Es as well as 2.6x, 2.2x and 1.9x P/BVs based on FY16, FY7 and FY18 forecasts respectively. With that, we reiterate our BUY call on Press Metal, which is our Top Pick for the basic materials sector.

Calculated Investment Risks Volatility in aluminium prices and demand. Press Metal’s operations are undeniably vulnerable to fluctuations in prices and volume in the domestic and export markets. In particular, its primary aluminium businesses are sensitive to commodity price fluctuations. However, we are not overly concerned over the demand for its primary aluminium products, as the commodity is widely tradable. The company enjoys cost advantages such as competitive power tariffs and lower overheads, which should ensure profitability once Phase III of its Samalaju smelting plant is fully commissioned. Our all-in aluminium priceassumption of USD1,700 a tonne (FY16) is also at a multiple-year low since 1988, on a3% inflation-adjusted basis. Given that current prices have dragged many major smelters into the red, we have no assurance that prices would not drop further. Our sensitivity test (Figure 8) provides a rough gauge of the breakeven point of its smelting operations in Sarawak. At our USD/MYR assumption of 4.00, at the PATMI level, the price is around USD1,425 (spot + premium) a tonne vs the last (as at 29 Apr 2016) aluminium selling price of USD1,795 (USD1,679 (spot) + USD116 (premium)).

 

 

Source: RHB Research - 4 May 2016

Labels: PMETAL
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Bruce88 Is PMetal 12mth TP=$4.50 realistic ? I doubt !
04/05/2016 10:44
moniekj Rhb revised the tp for the second time. They will again revise it for the 3rd n 4th time. 4.50 is not my target. Aluminium just began its cyclical hike from the very bottom. 2081USD is very realistic n achievable target.
05/05/2016 15:36
king36 If Jim Rogers' recession prediction for end of this year or next year comes true, it may go back to $1.?? .......
20/05/2016 14:41


 

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