Market Commentary
26 November 2009
Stocks in Bursa Malaysia drop slightly as FBM KLCI lost 0.39 points to close at 1270.61 on Thursday as investors took profit ahead of the long weekend. The Finance Index decreased 0.53% to 10902.77 points while the Properties Index lost 0.43% to 775.06 points. However, Plantation Index gained 0.22% to 6245.94 points. The market traded within a range of 5.03 points between an intra-day high of 1273.85 and a low of 1268.82 during the session. Actively traded stocks include HARVEST-WA, MAXIS, GAMUDA, MAXIS-CA, HUBLINE-WA, MTONE, KNM, PROTON-CB, MAXIS-CD and GPACKET-WA. Trading volume increased to 764.66 mil shares worth RM988.61 mil as compared to Wednesday’s 753.11 mil shares worth RM1041.66 mil.
Lagging Movers were MAYBANK (-9 sen to RM6.83), AXIATA (-2 sen to RM3.10), GENTING (-3 sen to RM7.05), PUBLIC BANK (-2 sen to RM10.92) and GENTING MALAYSIA (-2 sen to RM2.85).
Leading Movers were MISC (+14 sen to RM8.97), MAXIS (+7 sen to RM5.37), SIME DARBY (+3 sen to RM9.01), YTL POWER (+3 sen to RM2.27) and ASTRO (+8 sen to RM3.52).
Market breadth was negative with 401 losers as compared to 267 gainers.
Saturday, November 28, 2009
Friday, November 27, 2009
Ahmad Zaki Resources
Not Short on Jobs
AZRB’s 9MFY09 earnings of RM15.6m (+24.8% y-o-y) were within our expectations (-
2.4%). Earnings were lower q-o-q despite the higher revenue due to unrealized
foreign currency translation losses. Its job wins momentum has been positive so far,
as the company has picked up RM826m worth of contracts YTD. The potential jobs in
the short term include preliminary works for the Kenyir Dam and a low cost housing
job. Maintain BUY.
Within expectation. AZRB’s 3QFY09 revenue came in at RM161.8m (-2.3% y-o-y) and
earnings at RM5.6m (+3.8% y-o-y). On a cumulative basis, 9M earnings stood at RM15.6m
(+24.8% y-o-y). Margins for the 9M period rebounded given the higher material prices
incurred last year, with EBIT and net figures at 8.1% and 4.4% (FY08 comparatives at 5.5% and 2.5%). The company’s annualized earnings came in within our expectations (-2.4%).
Numbers lower q-o-q. From a q-o-q perspective, revenue was up 97.6% but earnings fell
by 12.3%. The higher revenue was mainly attributed to some of its jobs gaining momentum.
However, the fall in profits was due to unrealized foreign currency translation losses on
advances made to a foreign subsidiary.
Reversal of fortunes. After a lackluster year for contracts in FY08, AZRB is indeed
witnessing a reversal in its fortunes this year. To date, it has secured job totaling RM826m
compared with only RM115m in FY08. Based on the construction contracts announced on
Bursa YTD, we note that the average value per job stands at RM165m, which indicates that
small jobs dominate the pump priming scene. We see AZRB as a clear beneficiary of small
job pump priming as its contract sizes are usually in the RM100m–RM300m range. AZRB’s
orderbook balance stands at RM1.3bn.
More to come. Media sources said that AZRB is in the running for a RM50m contract
involving preliminary civil works for the 2nd Kenyir Dam. We gather that the award for the
preliminary works could materialize pretty soon once tenders for the dam itself are called.
We also understand that AZRB is eyeing a low cost housing job (~RM100m) which is
expected to materialize by early-2010. Some jobs could also come from Terengganu,
where AZRB has a strong foothold.
Maintain BUY. As the results were within expectations, we are keeping our FY09
estimates unchanged. However, we are cutting our FY10 forecast by 3.1% and raising
FY11 by 3.7% owing to: (i) the tweaking of our revenue recognition for its newer jobs, and
(ii) our oil & gas analyst’s change in earnings forecast for EPIC (BUY, TP: RM2.03). Our
RM1.24 TP is still based on an average of 11x FY10 earnings and 1.6x P/BV. Maintain
BUY.
AZRB’s 9MFY09 earnings of RM15.6m (+24.8% y-o-y) were within our expectations (-
2.4%). Earnings were lower q-o-q despite the higher revenue due to unrealized
foreign currency translation losses. Its job wins momentum has been positive so far,
as the company has picked up RM826m worth of contracts YTD. The potential jobs in
the short term include preliminary works for the Kenyir Dam and a low cost housing
job. Maintain BUY.
Within expectation. AZRB’s 3QFY09 revenue came in at RM161.8m (-2.3% y-o-y) and
earnings at RM5.6m (+3.8% y-o-y). On a cumulative basis, 9M earnings stood at RM15.6m
(+24.8% y-o-y). Margins for the 9M period rebounded given the higher material prices
incurred last year, with EBIT and net figures at 8.1% and 4.4% (FY08 comparatives at 5.5% and 2.5%). The company’s annualized earnings came in within our expectations (-2.4%).
Numbers lower q-o-q. From a q-o-q perspective, revenue was up 97.6% but earnings fell
by 12.3%. The higher revenue was mainly attributed to some of its jobs gaining momentum.
However, the fall in profits was due to unrealized foreign currency translation losses on
advances made to a foreign subsidiary.
Reversal of fortunes. After a lackluster year for contracts in FY08, AZRB is indeed
witnessing a reversal in its fortunes this year. To date, it has secured job totaling RM826m
compared with only RM115m in FY08. Based on the construction contracts announced on
Bursa YTD, we note that the average value per job stands at RM165m, which indicates that
small jobs dominate the pump priming scene. We see AZRB as a clear beneficiary of small
job pump priming as its contract sizes are usually in the RM100m–RM300m range. AZRB’s
orderbook balance stands at RM1.3bn.
More to come. Media sources said that AZRB is in the running for a RM50m contract
involving preliminary civil works for the 2nd Kenyir Dam. We gather that the award for the
preliminary works could materialize pretty soon once tenders for the dam itself are called.
We also understand that AZRB is eyeing a low cost housing job (~RM100m) which is
expected to materialize by early-2010. Some jobs could also come from Terengganu,
where AZRB has a strong foothold.
Maintain BUY. As the results were within expectations, we are keeping our FY09
estimates unchanged. However, we are cutting our FY10 forecast by 3.1% and raising
FY11 by 3.7% owing to: (i) the tweaking of our revenue recognition for its newer jobs, and
(ii) our oil & gas analyst’s change in earnings forecast for EPIC (BUY, TP: RM2.03). Our
RM1.24 TP is still based on an average of 11x FY10 earnings and 1.6x P/BV. Maintain
BUY.
Tuesday, November 24, 2009
sun tzu tactical
Tactical Dispositions
1. Sun Tzu said: The good fighters of old first put themselves beyond the possibility of defeat, and then waited for an opportunity of defeating the enemy.
2. To secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself.
3. Thus the good fighter is able to secure himself against defeat, but cannot make certain of defeating the enemy.
4. Hence the saying: One may know how to conquer without being able to do it.
5. Security against defeat implies defensive tactics; ability to defeat the enemy means taking the offensive.
6. Standing on the defensive indicates insufficient strength; attacking, a superabundance of strength.
7. The general who is skilled in defense hides in the most secret recesses of the earth; he who is skilled in attack flashes forth from the topmost heights of heaven. Thus on the one hand we have ability to protect ourselves; on the other, a victory that is complete.
8. To see victory only when it is within the ken of the common herd is not the acme of excellence.
9. Neither is it the acme of excellence if you fight and conquer and the whole Empire says, "Well done!"
10. To lift an autumn hair is no sign of great strength; to see the sun and moon is no sign of sharp sight; to hear the noise of thunder is no sign of a quick ear.
11. What the ancients called a clever fighter is one who not only wins, but excels in winning with ease.
12. Hence his victories bring him neither reputation for wisdom nor credit for courage.
13. He wins his battles by making no mistakes. Making no mistakes is what establishes the certainty of victory, for it means conquering an enemy that is already defeated.
14. Hence the skillful fighter puts himself into a position which makes defeat impossible, and does not miss the moment for defeating the enemy.
15. Thus it is that in war the victorious strategist only seeks battle after the victory has been won, whereas he who is destined to defeat first fights and afterwards looks for victory.
16. The consummate leader cultivates the moral law, and strictly adheres to method and discipline; thus it is in his power to control success.
17. In respect of military method, we have, firstly, Measurement; secondly, Estimation of quantity; thirdly, Calculation; fourthly, Balancing of chances; fifthly, Victory.
18. Measurement owes its existence to Earth; Estimation of quantity to Measurement; Calculation to Estimation of quantity; Balancing of chances to Calculation; and Victory to Balancing of chances.
19. A victorious army opposed to a routed one, is as a pound's weight placed in the scale against a single grain.
20. The onrush of a conquering force is like the bursting of pent-up waters into a chasm a thousand fathoms deep.
Monday, November 23, 2009
warren buffett
Warren Edward Buffett (born August 30, 1930) is an American investor, businessman, and philanthropist. He is one of the most successful investors in history, the primary shareholder and CEO of Berkshire Hathaway, and in 2008 was ranked by Forbes as the richest person in the world with an estimated net worth of approximately $62 billion. In 2009, Buffett was ranked as the second richest man in the United States with a net worth of $40 billion. However, this was after he donated billions of dollars to charity.
Buffett is often called the "Oracle of Omaha" or the "Sage of Omaha" and is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth. Buffett is also a notable philanthropist, having pledged to give away 85 percent of his fortune to the Gates Foundation. He also serves as a member of the board of trustees at Grinnell College.
In 1999, Buffett was named the top money manager of the twentieth century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton. In 2007, he was listed among Time's 100 Most Influential People in the world.
Buffett is often called the "Oracle of Omaha" or the "Sage of Omaha" and is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth. Buffett is also a notable philanthropist, having pledged to give away 85 percent of his fortune to the Gates Foundation. He also serves as a member of the board of trustees at Grinnell College.
In 1999, Buffett was named the top money manager of the twentieth century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton. In 2007, he was listed among Time's 100 Most Influential People in the world.
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