Stocks In Focus (Datasonic, Muhibbah, Telekom M’sia)
RHB Research Maintains ‘Buy’ On Datasonic With Reduced Target Price
RHB Research has maintained its ‘Buy’ call on Datasonic Group with a reduced target price of RM2.10 based on an unchanged 25 times FY16F price to earnings.
The research house stated that management shared potential initiatives going forward but cautioned near-term earnings could come under pressure on slower-than-expected MyKad orders.
The group’s 30 percent-owned associate Fuelsubs House, meanwhile, is in the midst of finalising its proposal on the fuel subsidy rationalisation program, which Datasonic intends to implement via MyKad as the core platform, leveraging on its existing strength.
Significance: While Datasonic said that its earnings over the near term could come under pressure, RHB Research maintained its ‘Buy’ call on the group as it expects a major re-rating in share price should Fuelsubs House secure the fuel subsidy rationalisation programme as the Government looks set to announce the new mechanism to the public.
CIMB Research Raises Target Price For Muhibbah To RM3.89
CIMB Equities Research has maintained its assumptions that Muhibbah Engineering may secure RM600 million infrastructure job wins for FY14 and RM1 billion for FY15, driven by domestic oil & gas infrastructure.
The firm’s chances of securing a RM500 million job in the refinery and petrochemical integrated development by year-end reinforce expectations for the company’s infrastructure order back log.
As such, CIMB Research has raised its realised net asset value target price to RM3.89, which is still a 20 percent discount, as it rolls over its valuations.
Significance: The research house has maintained its ‘Add’ call on the group’s stocks, adding that there is a buying opportunity, as the stock has dropped 17 percent from its peak in July 2014 due to the global sell-down and also noted that job wins are potential catalysts.
JF Apex’s Top Pick For Telcos: Telekom Malaysia
JF Apex Securities said that investors could flock to telecommunication companies’ (telco) stocks in the current market slump, due to the sector’s defensive nature and stable dividends.
Telekom Malaysia (TM) came out as JP Apex’s top pick, in anticipation of its high-speed broadband Phase 2, which could boost earnings as it expands into suburban and rural areas.
The research house stated that it favours TM due to its dominance in broadband services, in contrast to the mobile segment that remains competitive in pricing and capital expenditure investment.
Significance: Overall, JF Apex has rated the telecommunication sector as ‘Neutral’ and assigned ‘Hold’ calls on TM, Axiata Group, DiGi.com and Maxis.- Shares Investment
