Gas Malaysia Berhad IPO Target Price 2012

Gas Malaysia Berhad (Subscribe) - Safe and stable
Fair Value: RM2.61

Investment Highlight

• Stable earnings from its monopolistic business model. Gas Malaysia is the only company licensed under the Gas Supply Act by the Energy Commission to sell, market and distribute natural gas in Peninsular Malaysia besides government-owned Petronas Gas Berhad.
• Attractive dividend payout. Gas Malaysia is committed to reward the shareholders with a dividend payout ratio of 100% in 2012F and a minimum of 75% payout in subsequent years onward. This translates into a decent dividend yield of 5.5% and 5.4% for 2012F and 2013F respectively. We believe the Group shall not have any difficulty of declaring even higher dividend of more than 75% payout in view of its current net cash of RM227m or net cash per share of 18 sen (zero gearing) and lower capex expected in 2013F onwards (estimated RM40m p.a., significantly down from 2012F’s capex of RM140m).
• Growing demand of natural gas in Malaysia. Natural gas is being viewed as an efficient energy source compared to other common fuel such as LPG, coal and diesel as it provides more energy output per weight and is also considered as a cleaner fuel. More importantly, it is one of the cheapest energy sources which is gaining popularity in the industrial usage as it provides competitive cost advantage to the users in view of rising energy prices.
• Wide strategic pipeline coverage throughout Peninsular Malaysia. Gas Malaysia has built approximately 1,800km of underground pipelines throughout Peninsular Malaysia in order to deliver gas to its industrial, commercial and residential customers. Furthermore, the Group is able to further extend its coverage to other growing industrial areas efficiently without incurring heavy capital expenditure.
• New source of gas supply to meet rising demand. Petronas has developed the Malaysia’s first LNG import terminal in Melaka. Thus, the shortage of gas supply since 2007 will be met by the commencement of Melaka regasification plant which is expected to be ready in Sept 2012.
•  Reaching a wider customer base. Gas Malaysia principally market and distribute natural gas to customers in Peninsular Malaysia initially consuming less than two MMScfd and below of natural gas. However, the Group is able to ink a new gas supply agreement to increase its supply to five MMScfd with effect from Jan 2013.
• Strategic shareholder. Petronas Gas Berhad, which is also the sole supplier of natural gas for the Group, is holding 14.8% of Gas Malaysia’s stake upon listing. By having such a strong strategic relationship with its supplier, we believe Gas Malaysia is able to reduce its risk of dependency on supply of natural gas.

Valuation & Recommendation

• Subscribe with a target price of RM2.61. Our non-rated target price is based on DCF valuation method (with discount rate of 9.7% and terminal growth rate of 2%) which indicates implied yield of 4.7% and 4.6% for 2012F and 2013F respectively or implied 2012F PER of 21.4x and 2013F PER of 16.5x. Our valuation also implies 20% discount to its peer, Petronas Gas’ 2013F consensus PE of 20.5x.
• Our fair value represents 19% upside to indicative IPO price of RM2.20. The listing of Gas Malaysia shall provide a safe investment opportunity for investors under current market uncertainty.

Source: JF Apex Research - 23 May 2012

Investors must diversify: Phillip Mutual

Diversifying is the only way to avoid the volatility of the market and investors' portfolio, Phillip Mutual Bhd chief strategist Phua Lee Kerk said.

He said the basic nuts-and-bolts asset allocation of stocks, fixed income and cash, although not a popular investment strategy now, was all that was needed to earn a good long-term total return.

Phua said typically, investors were loading up their portfolios with alternatives and exotic asset classes that might not provide much diversification.

Investors should understand that portfolios in which all the assets appreciated would demonstrate that the notion of diversification was not well understood.

"Diversification means that some assets will go up while others go down," he said in an interview.

Hence, how much to put in equity, fixed income and cash was individual-specific, he said.

"Understanding one's own risk return requirement and then establishing an appropriate asset mix plays a key role in determining how much to invest in equity, fixed income and cash and not when is the right time and which asset class is better," Phua said.

 

Portfolio's asset mix should reflect an investor's goals at any point in time and not the market sentiment, he said, adding that, in a globalised world, investors should recognise that economic conditions would frequently undergo seismic shifts.

"It therefore should not be any wonder that the dynamics of global financial asset prices, which must ultimately reflect the supply and demand of real assets, have become less stable in recent years.

"In today's complicated and sophisticated world, it is impossible for us to have a complete picture on how the economy and individual asset class will perform in the short term," he said. 

Phillip Mutual Bhd is the Malaysian unit trust management company of the Phillip Capital Group. -- BERNAMA

Zuckerberg's post-IPO wedding is smart legal move

SAN FRANCISCO (Reuters) - Getting married was a smart business move as well as a personal milestone for Facebook chief Mark Zuckerberg, with the timing of the wedding, the day after the company's initial public offering, potentially proving particularly advantageous, California divorce lawyers said on Sunday.

Assuming the couple signed a prenuptial agreement, as most wealthy Californians do, Zuckerberg and Chan would have agreed exactly how to split assets, including his Facebook stock, if their marriage dissolved in future. Even without a prenup, the wedding's timing would help establish the value of their assets in the event of any future divorce battle, lawyers said.

A spokeswoman for Facebook declined to comment on whether the couple signed such an agreement.

Priscilla Chan and Zuckerberg live together in the modest house in Palo Alto, Calif., where they were married on Saturday.

Facebook co-founder and CEO Mark Zuckerberg and Priscilla Chan are seen in this wedding photo.. - Reuters

The couple met as undergraduates at Harvard University in 2004. Zuckerberg, now 28, dropped out of college to work on Facebook, while Chan, a pediatrician, stayed to earn her undergraduage degree in 2007.

Chan's work led to Facebook created an organ donation page. The pair recently travelled to China.

Had they continued the status quo, Chan could potentially lay claim to a much larger portion of assets, including a chunk of his $20 billion in Facebook shares, lawyers say.

"In California, people who live together without the benefit of marriage could claim they had an agreement to pool resources and efforts," said Napa, Calif., lawyer Robert Blevans. Although they are hard to prove, "those claims can get really ugly."

Blevans cited the case of Anthony Maglica, the founder of the company that makes Maglite flashlights. In 1994, an Orange County court awarded $84 million to Maglica's girlfriend Claire, who took his name and lived with him for 23 years. Although an appeals court reversed the award in 1998, she later negotiated a $29 million settlement.

The same logic-- avoiding messy court fights-- enters into the calculus of a prenuptial agreement.

"One of the primary reasons that wealthy people enter into prenups is to prevent the type of carnage that can come with divorce," said Garrett Dailey, an appellate attorney in Oakland, Calif., "Better to sort it out in advance."

DIVIDING ASSETS

A prenuptial agreement in California typically states how spouses would divide assets in the event of a divorce. The couple usually waives the right to make claims based on community-property laws, which state that any property created after the marriage is essentially community property and should be split evenly after any divorce.

California is one of a handful of states with community-property laws. Most states rely on equitable-division rules, which give more flexibility to a judge in dividing assets.

In Chan's case, she could lay claim to a portion of the options and grants in Facebook stock that vest during the time of their marriage, lawyers said.

If there were no prenup, or if there were and Chan contested it, she could also try to go after stock Zuckerberg held previously if she could claim it increased in value during the relationship and the increase was due directly to Zuckerberg's efforts. Lawyers said that is hard to prove for publicly-traded companies.

"In an organization of this size, that's not going to happen," Blevans said.

But still, in case of such a clash, it would likely help Zuckerberg that the marriage took place the day after the initial public offering.

"The value of the company is absolutely known," said Dailey. "There's no dispute over it." If the timing of the marriage so close to the IPO was accidental, "then it was a very nice coincidence," said Blevans.

Getting married after Zuckerberg achieved such a high level of success probably made the couple at least consider a prenuptial agreement.

"If they had gotten married in college, it probably wouldn't have occurred to them," said Jennifer Saslaw, an attorney at Moradi Saslaw LLP in San Francisco.

Lawyers said there was no guarantee the couple signed an agreement, citing divorce cases involving wealthy people such as actor Mel Gibson and singer Paul McCartney who skipped prenups. But they say it is likely they did.

"In every single state, a wealthy person is better with a prenup," said Dailey. "I cannot comprehend Zuckerberg marrying without one."

Source: Star Online

Buying Facebook's Share 2012 ???

After months of hype Facebook (FB) is expected to become a publicly traded stock at the end of this week. The richly valued company may not be for every investor, but those who've decided they need to own shares of the social media giant should know the right and wrong ways to buy the next hot stock. The frenzy surrounding any highly anticipated IPO can lead investors into mistakes that cost them real money. Josh Brown, author of Backstage Wall Street and editor oftheReformedBroker.com, has some tips on how to buy Facebook shares.

1. Avoid "Facebook Funds"

Contrary to what you might hear, the funds and companies that already have Facebook stakes aren't likely to suddenly shoot up in value when the stock starts trading. Don't believe anyone who tells you to buy some company that either has an investment in or is "like" Facebook. Stick to the real deal.

"Avoid any kind of indirect way of owning it, just own it," Brown emphasizes. That's what the company going public is all about.

2. Use a Limit Order

Placing a limit order means you're setting a ceiling on how much you'll pay per share. This is in contrast to a market order where you buy stock at any price.

If you place a market order, you end up owning shares wherever the stock is trading at that very instant. On the first day of trading for a hot IPO, swings of 25% or more aren't uncommon. Obviously you don't want to be at the high end of that range.

The success or failure of your Facebook investment may ride on deciding in advance how much you're willing to pay per share. The best way to do that is by placing a limit order.

3. Only Use Your Risk Money

Facebook is an exciting company, but the potential share price—targeted to price between $28 to $35 each—already reflects some of that enthusiasm. You shouldn't put all your eggs in one basket under any circumstance, especially for a hot IPO.

"This is not the money you're going to use in two years to buy a house!" cautions Brown. A controlled investment is one where "if you're wrong and it gets cut in half, you won't be happy, but it won't change the way you live."

4. Don't Buy at the Open

Brown says in a lot of cases company insiders can sell their shares three to six months after a company goes public. When that supply of stock comes flooding onto the market, stocks can take a temporary hit, making it an ideal time for outsiders to scoop up shares.

"In Facebook's case, I'm not 100% sure that the insiders are going to come out with that many shares to sell," says Brown. In other words, even though he thinks investors need to know they are "grossly overpaying" for shares, they need to start buying the right way.

Following the steps above won't make owning Facebook any less risky than buying shares of any other stock, but they should help you to not get burned on the first day. In this case, having a precise plan may make all the difference to make money on your investment.

Source: Yahoo finance

Gold drops to 4-1/2-month low on euro zone worries

LONDON (Reuters) - Gold prices fell to a 4-1/2-month low on Monday, hit by concerns about a worsening debt crisis in the euro zone following political deadlock in Greece which fuelled risk aversion and put pressure on the euro.

Spot gold hit a session low at $1,556.61 an ounce, its lowest since December 30, 2011, before recovering slightly to trade at $1,561.10 an ounce at 1323 GMT, down 1.1 percent from $1,578.30 hit late in New York on Friday.

Gold has moved in tandem with riskier assets this year as the turmoil in Europe sent the euro to multi-month lows and investors turned to the safety of the dollar, analysts said.

"Gold is under severe pressure. The U.S. dollar is being seen as a safe haven at the moment and as long as the dollar is appreciating against the euro this is clearly weighing on the gold price," said Daniel Briesemann, analyst at Commerzbank.

"I wouldn't be surprised if we test the December low of around $1,520 an ounce and if we don't stop here we could go below $1,500."

Concerns about the euro zone crisis resurfaced after coalition talks in Greece hit an impasse on Sunday and Greece's radical leftist leader spurned an invitation from the president for a final round of talks on Monday, all but ensuring another election next month.

The euro fell to its lowest in nearly four months against the dollar, which rose against a basket of currencies. A strong dollar makes commodities priced in the U.S. unit more expensive for holders of other currencies.

Also weighing on sentiment for the precious metal, money managers in gold futures and options cut their net long positions by 20 percent to the lowest level since December 2008, as investors aggressively unwound their bullish bets in the precious metal after a sharp price pullback.

U.S. gold for June slipped 1.5 percent to $1,561 an ounce.

Reflecting risk aversion in financial markets, European shares fell to their lowest levels in four months, while safe haven German bond yields hit record highs. (.EU)

Investors had turned to gold as a safe haven during the debt crisis last year, sending prices to an all-time high of around $1,920 an ounce. But this year gold is trading more in line as a commodity that moves in the opposite direction to the U.S. dollar.

"In our view, recent (gold) market activity is consistent with distressed selling and long liquidation," Morgan Stanley analysts wrote in a note.

"Nevertheless, we think gold prices will recover in the coming weeks. The fundamental factors that have driven the gold bull market of late remain very much in place."

PLATINUM, PALLADIUM TO RISE

Spot platinum fell 0.9 percent to $1,446.24 an ounce, while spot palladium edged up 0.3 percent to $598.72 an ounce. Spot silver fell 1.2 percent to $28.50.

Prices of platinum and palladium are expected to end the year well above current levels, a Reuters poll conducted for Platinum Week showed, as constraints on supply and improving demand tighten the market.

Meanwhile, the global palladium market is seen swinging into a shortfall this year, potentially pushing prices of the autocatalyst metal to nine-month highs, as top producer Russia completes sales of its state stockpile, refiner Johnson Matthey said on Monday.

Market sentiment was also dampened by China's move on Saturday to loosen monetary policy which underscored how Europe's plight is hampering global growth.

The People's Bank of China cut the amount of cash that banks must hold as reserves on Saturday, freeing an estimated 400 billion yuan ($63.5 billion) for lending to add to the roughly 800 billion injected in two previous 50 bps cuts since the government tilted its policy stance towards growth in October.

In the physical market, jewelry makers and speculators took advantage of last week's drop in prices.

"We've seen physical buying interest. But people are still bearish about the market because of the strong dollar and worries that Greece won't be able to solve its problems," said a dealer in Hong Kong.

"Investors are not so aggressive, and I think the jeweler sector is more important. Supply is a bit tight in the physical market."

(Additional reporting by Lewa Pardomuan in Singapore; Editing by Alison Birrane and Helen Massy-Beresford)

Source: Reuters News

Malaysia Stock Counters with 3 Years Continuously Improvement in Revenue & Profit (2009,2010,2011)

3 Years Continuously Improvement in Revenue & Profit (2009,2010,2011)

Stock Code	Stock Name	Revenue (2011)	Revenue (2010)	Revenue (2009)	Profit (2011)	Profit (2010)	Profit (2009)
5185	AFFIN	2,654,425	2,272,995	2,008,858	709,148	637,533	497,160
7083	ANALABS	138,357	112,956	54,651	23,245	20,629	11,620
5975	ASAS	112,047	72,820	44,270	32,170	25,359	15,564
9814	BERTAM	72,309	60,274	39,711	19,922	17,401	4,218
5069	BLDPLNT	1,897,876	1,315,185	823,031	127,315	76,557	37,850
9288	BONIA	461,624	360,099	314,891	57,538	44,759	29,515
2771	BSTEAD	8,555,800	6,181,800	5,392,006	831,000	726,200	501,648
8982	CEPAT	290,269	231,816	164,003	62,200	35,277	25,951
2828	CIHLDG	580,737	516,400	363,001	53,742	48,087	27,966
6718	CRESNDO	215,225	160,321	110,469	50,916	25,806	22,455
5355	DAIMAN	166,124	123,320	107,126	72,188	36,374	29,559
5141	DAYANG	382,305	255,108	196,990	106,595	83,057	52,663
0029	DIGISTA	97,828	69,179	44,384	25,998	6,808	1,081
0006	DISCOMP	53,204	44,526	37,522	2,140	1,737	796
0030	EBWORX	51,813	32,920	7,969	11,278	4,867	939
0090	ELSOFT	12,653	11,269	5,880	4,868	4,063	1,751
2755	FCW	35,504	19,340	7,366	7,345	3,304	1,472
6939	FIAMMA	225,494	200,688	178,191	40,690	30,252	21,795
9318	FITTERS	446,593	190,036	127,198	29,725	19,073	10,152
7210	FREIGHT	295,488	265,501	229,424	24,002	21,805	19,333
2291	GENP	1,336,481	988,583	622,206	601,342	439,739	254,150
3182	GENTING	19,559,041	15,194,737	8,893,617	6,673,321	4,394,324	2,528,449
3204	GKENT	165,037	125,084	106,933	33,131	26,719	14,219
5102	GUANCHG	1,382,800	1,168,605	642,650	150,069	111,549	20,611
3034	HAPSENG	3,628,380	2,789,410	2,464,242	634,999	504,456	172,760
7501	HARNLEN	166,767	131,486	103,077	19,996	17,129	10,957
5168	HARTA	734,917	571,892	443,204	243,278	177,938	95,548
6688	HDBS	399,333	346,942	295,798	119,651	85,742	45,518
6238	HSL	581,514	488,275	375,021	116,597	98,419	75,569
5138	HSPLANT	654,866	473,754	373,134	339,473	226,376	135,136
1961	IOICORP	16,154,251	12,542,962	6,218,862	2,863,612	2,550,633	754,080
0010	IRIS	407,173	366,110	331,727	53,049	41,632	30,539
0054	KARYON	110,353	91,262	71,128	8,870	7,140	5,494
7323	KEN	87,188	54,200	31,195	31,350	24,075	11,945
5122	KENCANA	1,561,003	1,089,698	822,351	272,967	171,341	108,916
9334	KESM	248,113	225,142	169,315	22,716	19,403	10,448
0151	KGB	139,710	84,732	54,854	9,759	8,473	6,956
2445	KLK	10,743,252	7,490,626	6,658,308	2,066,205	1,312,832	887,362
6971	KOBAY	111,175	82,191	55,799	12,488	5,598	1,741
5878	KPJ	1,891,300	1,656,202	1,107,634	191,617	166,740	110,294
1996	KRETAM	250,065	156,675	119,869	103,155	61,950	35,898
9385	LAYHONG	441,181	388,616	350,546	21,354	15,193	11,382
7118	LIPO	67,794	44,350	35,095	11,701	5,438	528
8583	MAHSING	1,570,696	1,110,108	701,562	238,628	177,865	144,243
3514	MARCO	128,137	109,891	93,064	19,000	11,416	7,031
5152	MBL	55,062	44,085	25,417	12,380	7,928	5,691
1171	MBSB	1,350,017	1,099,736	537,959	428,262	207,399	80,315
5026	MHC	33,692	27,337	23,293	36,702	28,324	23,059
5150	MSPORTS	417,704	288,136	199,970	106,575	78,288	54,447
5339	NILAI	284,982	151,906	107,750	58,760	10,014	8,029
8508	NOMAD	74,434	66,947	44,385	7,674	3,857	3,194
0035	OPCOM	136,558	121,218	62,805	37,308	16,241	10,412
6661	OSKPROP	272,712	144,872	125,848	66,857	26,712	11,923
3719	PANAMY	761,407	679,764	600,867	101,806	79,318	60,818
1295	PBBANK	12,756,360	11,035,597	7,277,533	4,610,633	4,086,197	2,464,925
8869	PMETAL	2,283,015	1,713,369	1,317,618	127,972	101,686	88,722
0123	PRIVA	44,547	37,855	27,162	6,101	5,179	858
5207	SBCCORP	113,811	103,379	77,771	17,910	13,118	5,088
4731	SCIENTX	804,023	694,816	509,731	96,641	70,754	42,052
2224	SDRED	345,999	234,430	164,070	44,854	27,948	21,228
9792	SEG	278,293	220,115	43,885	88,218	54,314	907
4197	SIME	42,722,990	32,951,613	15,008,969	5,492,521	1,741,504	1,423,241
9431	SJC	26,437	23,413	20,233	4,544	2,219	1,533
5126	SOP	1,166,292	725,352	567,610	362,359	220,547	133,783
8664	SPSETIA	2,232,473	1,745,870	1,281,074	430,594	330,967	221,905
2054	TDM	519,704	420,856	336,376	218,329	131,423	77,407
9741	TECNIC	210,300	172,234	108,920	24,193	18,194	10,245
7034	TGUAN	538,960	488,434	403,060	28,116	22,727	17,509
5112	THPLANT	434,835	365,882	304,358	183,022	144,552	70,912
7230	TOMEI	505,387	356,286	300,890	45,705	30,435	26,318
5010	TONGHER	601,047	344,278	211,554	48,591	36,167	14,705
9059	TSH	1,148,635	909,660	734,106	162,362	106,718	87,577
4421	TWS	7,010,002	5,575,625	2,067,573	909,940	825,546	213,717
6327	TWSPLNT	1,703,497	909,126	677,424	478,164	281,165	78,197
5148	UEMLAND	1,703,172	469,713	403,085	355,246	205,507	129,582
7091	UNIMECH	193,833	158,357	119,846	29,634	23,888	19,815
5016	WARISAN	470,423	363,831	301,757	22,638	20,039	12,044
7231	WELLCAL	136,834	96,564	79,024	22,370	16,052	14,316
5155	XINQUAN	712,410	626,059	229,490	145,152	126,700	56,413
0009	YTLE	74,246	44,030	36,812	64,846	16,677	7,10

Source: http://www.malaysiastock.biz