- AISB (2682) , BURSA (1818), DIGI (6947)
AIS Sees Better Earnings With Anti-Dumping Tax
Amalgamated Industrial Steel (AIS), which has been in the red for six years, is hopeful of narrowing loss this year as it sells its pipes at higher prices, following the government’s slapping of anti-dumping tax on select imported hot-rolled coils (HRC).
The government made the move following a petition filed by HRC producer Megasteel, on behalf of the domestic industry, alleging that HRC imports from the China, Indonesia and South Korea were being sold at prices much lower than those in their respective markets.
For 120 days from 23 October, the Ministry of International Trade and Industry has imposed provisional anti-dumping duties of between 3.2 percent and 29.4 percent on HRC originating or imported from the three countries mentioned.
Significance: The group shared that in view of the government’s decision on HRC, which is a raw material used by the firm, AIS can now price its steel pipes accordingly and this should contribute positively to its earnings and help narrow loss in the current year.
Bursa Malaysia 3Q14 Net profit Jumps 15%
For the three-month period ended 30 September, Bursa Malaysia’s revenue and net profit came in 8 percent and 14.9 percent higher at RM121 million and RM53.1 million respectively, backed by an increase in both trading and non-trading revenues.
Despite a softer global market, the firm’s trading revenue was bolstered by higher domestic participation, especially in the retail segment. Non-trading revenue rose as a result of higher listing fees on the back of larger initial public offerings and greater secondary fund-raising activities.
Despite the volatility and uncertainty in the global markets, Malaysia managed to register a strong growth. The group expects investor sentiments to remain positive and states that it will spur growth through outreach activities.
Significance: Notwithstanding the increase in earnings, CIMB Research has lowered its target price for Bursa Malaysia from RM10 to RM8.82 after lowering its target FY16 price-to-earnings multiple. However, the group remains an ‘Add’ given its above-market dividend yield of 4 percent to 5 percent and the positive outlook for the derivative business.
Service Revenue Boosts DiGi’s 3Q14 Earnings
For the third quarter ended 30 September, DiGi.com reported an 8.5 percent rise in net profit to RM486.9 million as top line strengthened 3.3 percent to RM1.8 billion, fuelled by growth in service revenue and an efficient cost structure.
For the quarter, DiGi also recorded higher capital expenditure (capex) of RM276 million, primarily to deliver on its planned billing migration, expansion of 3G coverage and acceleration of LTE sites to support growth demand for Internet services. It is on track to invest the allocated RM900 million capex.
The company noted that its priority was to deliver stronger customer and quality focus. DiGi also announced that it will pay an interim dividend of RM0.062 per share, up from RM0.057 in 3Q13.
Significance: In a separate report, CIMB Equities Research has maintained its ‘Add’ rating and a target price of RM6.30 on DiGi, which remains its top pick for the Malaysian telecommunication sector. The research house stated that stronger-than-peers earnings growth over the next three years would be a re-rating catalyst for the firm.- Shares Investment
