JIT News - Tenaga, SYF, Padini, FGV ...

kiasutrader

Publish date: Tue, 09 Oct 2012, 08:57 AM

Tenaga: TNB is expected to be the front runner for the 1000MW to 1400MW Prai power plant project while Genting Sanyen Power Sdn Bhd and Segari Energy Ventures Sdn Bhd are to win power pact extensions.

The EC will be announcing the preferred bidder for the construction of new cycle gas turbine plant as well as the results of selective bidding exercise among first generation IPPs and Tenaga on 09 Oct 2012.

Tenaga, Sime Darby and 1MDB and CI Holdings are among the 33 companies that had bid for the power plant.

Meanwhile the frontrunners for the PPA extension are said to be Genting Sanyen and Malakoff Corporation Bhd's Segari Energy.

The PPA extension, which will be for another five or 10 years from 2016/.2017 is subjected to the new rates that Tenaga and IPP have offered to the government versus the current (Oct 2012) tariff stipulated in the existing PPAs.

SYF: SEGI chairman Datuk Seri Clement Hii has raised his stake in SYF Res to 16.8% after acquiring an additional 5 million shares in SYF. Hii bought 2.11 million shares on the open market on Oct 4, 2012 at 69.3 sen per share and another 2.89 million shares at 73.6 sen per share on 05 Oct 2012.

Padini: H&M is considered a potential rival to PadiniHoldings Bhd and could be a reason for the drop in the latter's share price since the opening of the first H&M store in Malaysia inLot 10 on Sept 2012.

It is believed that H&M's expansion strategy is likely to centre on selected high traffic affluent areas, targeting the middle income segment may pose a challenge to Padini's high traffic operations.

Given the good initial response to H&M, it will not be surprised if H&M penetrates into other niche and high traffic areas, notably in the Klang Valley. However, with existing retail malls being fully tenanted or having limited space to cater for H&M's huge floor space requirement, the threat in competition is viewed as medium term in nature. Nevertheless floor space availability is predicted to change when tenancy comes up for renewal and with the upcoming Sunway Pryramid 3, there is potentially sufficient floor space for H&M.

FGV: With CPO prices expected to trend lower, market observers viewed more downside to FGV's forward earnings. Currently (Oct 2012), FGV continues to trade at a premium to peers and the market, which is untenable. With the impending expiry of the lock up period for the cornerstone investors in late Dec 2012, more share price weakness is expected ahead (Oct 2012 & Beyond).

FGV is more sensitive to changes in CPO prices than peers as the group has large milling operations as its associate company FELDA Holdings Bhd.

Market observers expectation that FGV's earnings will be on the decline for the next three financial years, FGV's valuations is expensive (Oct 2012) when compared with peers.

FGV currently (Oct 2012) trades at a forward PER of 20 times which is above its peers (SIme Darby, KLK and IOI) long term average of 17.2 times. With FGV's earnings prospects poorer tan peers due to its aged hectarage and heavy replanting, the group should trade at a discount to peers, rather than at a premium.

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