Stocks In Focus MY (AirAsia X, Hap Seng Consolidated, Hartalega Hldgs) – 03/12/14
AAX (5238), HAPSENG (3034), HARTA (5168)
AirAsia X Plans Route Expansion
AirAsia X plans to fly to Hawaii and Sapporo, Japan, next year in a bid to strengthen its bottom line, says group chief executive officer Tan Sri Tony Fernandes.
The plans came after a review of the airline’s network, following the decline in global oil prices, which is a boost for the company. Fernandes also shared that plans are in the works to resume flights to Gatwick, London while the firm re-looks at flying to Paris and building presence in India.
The long-haul low-cost carrier had trimmed its route network over the last two years to focus on mid-haul flights to Australia, China, Japan, South Korea and Taiwan, citing cost pressures due to the rising oil prices, high departure taxes and lower demand, amid a financial crisis.
Significance: Fernandes noted that the group has been cutting costs and slowing growth as it has been slightly hampered by Malaysian Airline (MAS), who is currently selling fares at a loss. He believes that AirAsia X has a better chance to complete after MAS completes its restructure and also sees great opportunities in India.
Hartalega’s New Production Line To Boost Growth
Hartalega’s two upcoming new generation complex (NGC) production lines will boost volume growth, backed by incoming capacity of about nine billion pieces per annum and the best operating structure in the sector, according to AllianceDBS Research.
The research house expects the group to be more aggressive in its pricing once it has commissioned sufficient capacity at the NGC plants, which will help it grab market share from competitors, maximise utilisation and profits, and derail competitors’ expansion plans.
While an aggressive pricing may reduce earnings before interest and tax per 1,000 pieces of gloves, AllianceDBS believes that the effect will be offset by resulting higher sales.
Significance: AllianceDBS has upgraded Hartalega to ‘Buy’, with a target price of RM8.45, based on 22 times FY16F earnings per share, as it expects 16 percent earnings compound annual growth rate in FY15-FY16.
Hap Seng To Unveil RM2b Property Projects
Hap Seng Consolidated will launch two property projects with a combined gross development value (GDV) of close to RM2 billion in Klang Valley next year. The projects include a high-end development at Jalan Tun Razak and a mid-end development in Blalkong.
According to group managing director Datuk Edward Lee, the projects are expected to start to contribute to earnings from as early as the financial year ending 31 December 2015. Lee also mentioned that the firm has some property projects in Sabah as well.
For the third quarter ended 30 September, the group posted a 37.7 percent rise in net profit to RM194.4 million albeit revenue being relatively flat at RM828.9 million, mainly due to improved earnings in its business divisions.
Significance: Going forward, Lee said that he is optimistic about the outlook for the group’s proerty division, despite a softening market at the moment, noting that the firm’s properties are in prime locations.
http://www.sharesinv.com
AAX (5238), HAPSENG (3034), HARTA (5168)
AirAsia X Plans Route Expansion
AirAsia X plans to fly to Hawaii and Sapporo, Japan, next year in a bid to strengthen its bottom line, says group chief executive officer Tan Sri Tony Fernandes.
The plans came after a review of the airline’s network, following the decline in global oil prices, which is a boost for the company. Fernandes also shared that plans are in the works to resume flights to Gatwick, London while the firm re-looks at flying to Paris and building presence in India.
The long-haul low-cost carrier had trimmed its route network over the last two years to focus on mid-haul flights to Australia, China, Japan, South Korea and Taiwan, citing cost pressures due to the rising oil prices, high departure taxes and lower demand, amid a financial crisis.
Significance: Fernandes noted that the group has been cutting costs and slowing growth as it has been slightly hampered by Malaysian Airline (MAS), who is currently selling fares at a loss. He believes that AirAsia X has a better chance to complete after MAS completes its restructure and also sees great opportunities in India.
Hartalega’s New Production Line To Boost Growth
Hartalega’s two upcoming new generation complex (NGC) production lines will boost volume growth, backed by incoming capacity of about nine billion pieces per annum and the best operating structure in the sector, according to AllianceDBS Research.
The research house expects the group to be more aggressive in its pricing once it has commissioned sufficient capacity at the NGC plants, which will help it grab market share from competitors, maximise utilisation and profits, and derail competitors’ expansion plans.
While an aggressive pricing may reduce earnings before interest and tax per 1,000 pieces of gloves, AllianceDBS believes that the effect will be offset by resulting higher sales.
Significance: AllianceDBS has upgraded Hartalega to ‘Buy’, with a target price of RM8.45, based on 22 times FY16F earnings per share, as it expects 16 percent earnings compound annual growth rate in FY15-FY16.
Hap Seng To Unveil RM2b Property Projects
Hap Seng Consolidated will launch two property projects with a combined gross development value (GDV) of close to RM2 billion in Klang Valley next year. The projects include a high-end development at Jalan Tun Razak and a mid-end development in Blalkong.
According to group managing director Datuk Edward Lee, the projects are expected to start to contribute to earnings from as early as the financial year ending 31 December 2015. Lee also mentioned that the firm has some property projects in Sabah as well.
For the third quarter ended 30 September, the group posted a 37.7 percent rise in net profit to RM194.4 million albeit revenue being relatively flat at RM828.9 million, mainly due to improved earnings in its business divisions.
Significance: Going forward, Lee said that he is optimistic about the outlook for the group’s proerty division, despite a softening market at the moment, noting that the firm’s properties are in prime locations.
http://www.sharesinv.com
