Stocks In Focus MY (Affin Hldgs, Axiata Grp, Westports Hldgs) – 25/11/14
Affin Posts Weaker 3Q14 Earnings
For the third quarter ended 30 September, Affin Holdings recorded a 22.7 percent increase in turnover to RM937.2 million, while net profit slid 17.9 percent to RM142 million, due to lower profit from the group’s banking arm.
However, the group noted that 3Q14’s performance was better than the preceding quarter, mainly due to the increases in other operating income, net interest income and Islamic banking income as well as the reduction in both allowance for loan impairment and finance cost.
For the nine-month period, bottom line contracted 17.9 percent to RM396.7 million despite a 15.6 percent expansion in top line to Rm2.6 billion.
Significance: Affin has declared an interim dividend of RM0.15 per share and notes that in the current economic environment, its business segments (commercial banking, investment banking and insurance) will be leveraging on synergistic growth to boost its position in the nation and region.
Axiata 3Q14 Net Profit Shrinks 12%, Misses Estimates
For the third quarter ended 30 September, Axiata Group’s net profit eased 11.7 percent to RM631 million, in tandem with a 2 percent dip in revenue to RM4.7 billion.
The poorer performance was attributable to the impact of systems-related issues in Celcom Axiata and forex losses in its Indonesian telco, as the Indonesian rupiah has depreciated by 11.4 percent against the US dollar since the beginning of the year until 30 September.
The group’s management said Axiata is well-positioned to finish the year on a stronger note as it regained momentum at Celcom and XL, which is now well placed after the completion of the Axis integration.
Significance: In a separate report, CIMB Research noted that Axiata’s 3Q14 earnings came in below estimates and has thus cut its sum-of-parts based target price to RM7.10. However, the group remains as the research house’s preferred Malaysian telco pick for its earnings recovery story.
Strong Earnings Expected For Westports
CIMB Equities Research states that Westports Holdings’ share price may be driven up in the months ahead by three potential catalysts, the start of the Ocean Three (O3) alliance, the renewal of the investment tax allowance and the government approval to raise port tariffs.
The research house noted that the landscape of container carrier alliances has changed dramatically in favour of Westports as the P3 alliance of Maersk, MSC and CMA CGM, which once threatened Westports’ transshipment volumes, was dealt with a Chinese regulatory rejection.
Since then, its top three customers of CMA CGM, CSCL and UASC have decided to form the O3 alliance, which will only solidify their commitment to Westports as a transshipment hub. Westports may enjoy at least a net 500,000 twenty-foot equivalent units step-up in transshipment volumes when the alliance begins early-2015.
Significance: CIMB Research has initiated coverage with an ‘Add’ call on Westports with a probability-weighted discounted cashflow target price of RM4.57, incorporating different scenarios of the timing and quantum of the tariff hike.
http://www.sharesinv.com
Affin Posts Weaker 3Q14 Earnings
For the third quarter ended 30 September, Affin Holdings recorded a 22.7 percent increase in turnover to RM937.2 million, while net profit slid 17.9 percent to RM142 million, due to lower profit from the group’s banking arm.
However, the group noted that 3Q14’s performance was better than the preceding quarter, mainly due to the increases in other operating income, net interest income and Islamic banking income as well as the reduction in both allowance for loan impairment and finance cost.
For the nine-month period, bottom line contracted 17.9 percent to RM396.7 million despite a 15.6 percent expansion in top line to Rm2.6 billion.
Significance: Affin has declared an interim dividend of RM0.15 per share and notes that in the current economic environment, its business segments (commercial banking, investment banking and insurance) will be leveraging on synergistic growth to boost its position in the nation and region.
Axiata 3Q14 Net Profit Shrinks 12%, Misses Estimates
For the third quarter ended 30 September, Axiata Group’s net profit eased 11.7 percent to RM631 million, in tandem with a 2 percent dip in revenue to RM4.7 billion.
The poorer performance was attributable to the impact of systems-related issues in Celcom Axiata and forex losses in its Indonesian telco, as the Indonesian rupiah has depreciated by 11.4 percent against the US dollar since the beginning of the year until 30 September.
The group’s management said Axiata is well-positioned to finish the year on a stronger note as it regained momentum at Celcom and XL, which is now well placed after the completion of the Axis integration.
Significance: In a separate report, CIMB Research noted that Axiata’s 3Q14 earnings came in below estimates and has thus cut its sum-of-parts based target price to RM7.10. However, the group remains as the research house’s preferred Malaysian telco pick for its earnings recovery story.
Strong Earnings Expected For Westports
CIMB Equities Research states that Westports Holdings’ share price may be driven up in the months ahead by three potential catalysts, the start of the Ocean Three (O3) alliance, the renewal of the investment tax allowance and the government approval to raise port tariffs.
The research house noted that the landscape of container carrier alliances has changed dramatically in favour of Westports as the P3 alliance of Maersk, MSC and CMA CGM, which once threatened Westports’ transshipment volumes, was dealt with a Chinese regulatory rejection.
Since then, its top three customers of CMA CGM, CSCL and UASC have decided to form the O3 alliance, which will only solidify their commitment to Westports as a transshipment hub. Westports may enjoy at least a net 500,000 twenty-foot equivalent units step-up in transshipment volumes when the alliance begins early-2015.
Significance: CIMB Research has initiated coverage with an ‘Add’ call on Westports with a probability-weighted discounted cashflow target price of RM4.57, incorporating different scenarios of the timing and quantum of the tariff hike.
http://www.sharesinv.com
