Stocks In Focus MY (Astro M’sia Hldgs, FGV Hldgs, UMW O&G) – 12/12/14
ASTRO (6399), FGV (5222), UMWOG (5243)
Astro M’sia 3Q15 Earnings Down 8%
For the third quarter ended 30 October, Astro Malaysia Holdings recorded a 5.2 percent gain in revenue to RM1.3 billion on the back of increased subscriptions and other revenue. However, net profit slipped 8.5 percent to RM113.3 million due to higher depreciation, amortisation and tax expenses.
For the nine-month period, the group achieved a 10 percent and 12.7 percent expansion in top and bottom lines, to RM3.9 billion and RM379.4 million respectively. The better performance was powered by higher subscriptions and other revenues, as well as lower marketing, distribution and staff costs.
The group saw strong demand in its high-definition (HD) segment with more than 1.9 million subscribers and will work towards sustaining this trend with more HD offerings. The group also aims to strengthen its relevance to advertisers by building on ratings mechanism analytics.
Significance: Astro has declared a third interim dividend of Rm0.0255 per share, bringing nine-month total dividend to RM0.0675, which is 12.5 percent higher year-on-year. Moving forward, the firm will execute its key strategy of growing revenues by providing differentiated content and a diverse range of value added products and services.
FGV Plans China Agriculture Venture
Felda Global Ventures Holdings (FGV) is set to mark a new foray into China by collaborating with Shenzhen Agricultural Products Co (SZAP) on an agri-business trading company.
SZAP specialises in the business of e-commerce and supply chain services in agricultural products based in Shenzhen and the partnership will jointly explore opportunities in various commodities, including rubber and palm oil.
The group looks forward to the collaboration to help provide greater accessibility of its products to consumers amid growing demand.
Significance: FGV noted that as the world’s largest trading power, China continues to be a destination market for the group and the strategic move is inline with FGV’s long-term growth plans towards becoming one of the leading global agri-business companies by 2020.
Concerns Over UMW O&G’s Charter And Utilisation Rate
Hong Leong Investment Bank (HLIB) is concerned about the potential drop in charter rates and lower utilisation rates for UMW Holdings existing seven jack-up rigs and upcoming Naga 8, noting that five of its contracts are expiring in 2015.
Several risks factors that include prolonged tightening of banks’ hire purchase rules, appreciation of the US dollar, the plunging crude oil price and slowdown in oil and gas exploration, has prompted HLIB to revise downwards UMW Oil & Gas Corporation’s target price from RM2.90 to RM2.47.
HLIB expects oil prices to stay weak in the near term and the outlook remains gloomy as there is a lack of sizeable near-term contracts for local upstream sector from Petroliam Nasional.
Significance: The cut in UMW O&G’s target price has also resulted in a reduction of UMW Holding;s target price to RM10.86 based on sum-of-parts. The research house also noted that it downgraded the overall price earnings valuation for the O&G sector due to the falling oil prices.
http://www.sharesinv.com
ASTRO (6399), FGV (5222), UMWOG (5243)
Astro M’sia 3Q15 Earnings Down 8%
For the third quarter ended 30 October, Astro Malaysia Holdings recorded a 5.2 percent gain in revenue to RM1.3 billion on the back of increased subscriptions and other revenue. However, net profit slipped 8.5 percent to RM113.3 million due to higher depreciation, amortisation and tax expenses.
For the nine-month period, the group achieved a 10 percent and 12.7 percent expansion in top and bottom lines, to RM3.9 billion and RM379.4 million respectively. The better performance was powered by higher subscriptions and other revenues, as well as lower marketing, distribution and staff costs.
The group saw strong demand in its high-definition (HD) segment with more than 1.9 million subscribers and will work towards sustaining this trend with more HD offerings. The group also aims to strengthen its relevance to advertisers by building on ratings mechanism analytics.
Significance: Astro has declared a third interim dividend of Rm0.0255 per share, bringing nine-month total dividend to RM0.0675, which is 12.5 percent higher year-on-year. Moving forward, the firm will execute its key strategy of growing revenues by providing differentiated content and a diverse range of value added products and services.
FGV Plans China Agriculture Venture
Felda Global Ventures Holdings (FGV) is set to mark a new foray into China by collaborating with Shenzhen Agricultural Products Co (SZAP) on an agri-business trading company.
SZAP specialises in the business of e-commerce and supply chain services in agricultural products based in Shenzhen and the partnership will jointly explore opportunities in various commodities, including rubber and palm oil.
The group looks forward to the collaboration to help provide greater accessibility of its products to consumers amid growing demand.
Significance: FGV noted that as the world’s largest trading power, China continues to be a destination market for the group and the strategic move is inline with FGV’s long-term growth plans towards becoming one of the leading global agri-business companies by 2020.
Concerns Over UMW O&G’s Charter And Utilisation Rate
Hong Leong Investment Bank (HLIB) is concerned about the potential drop in charter rates and lower utilisation rates for UMW Holdings existing seven jack-up rigs and upcoming Naga 8, noting that five of its contracts are expiring in 2015.
Several risks factors that include prolonged tightening of banks’ hire purchase rules, appreciation of the US dollar, the plunging crude oil price and slowdown in oil and gas exploration, has prompted HLIB to revise downwards UMW Oil & Gas Corporation’s target price from RM2.90 to RM2.47.
HLIB expects oil prices to stay weak in the near term and the outlook remains gloomy as there is a lack of sizeable near-term contracts for local upstream sector from Petroliam Nasional.
Significance: The cut in UMW O&G’s target price has also resulted in a reduction of UMW Holding;s target price to RM10.86 based on sum-of-parts. The research house also noted that it downgraded the overall price earnings valuation for the O&G sector due to the falling oil prices.
http://www.sharesinv.com
