Transmile: ANALYSTS are positive over this cargo operator's earnings prospect despite the challenging market conditions. Avenue Securities, in recommending an “outperform” rating, said Transmile has a strong earnings profile, given its ability to pass on the higher fuel costs prices to its customers, better operating efficiency and the economies of scale. Its growth will come from the acquisition of the two wide-body aircraft, the remaining 30% stake in Transmile Air and the geographical extension of its routes.
IGB: A Singapore-based brokerage said property development would be the key driver to better profits for IGB, supported by four major launches in the strategic locations in Kuala Lumpur this year. With the exception of Plaza Permata, IGB's investment properties should also perform better with firmer rentals and higher occupancies in excess of 90%. The brokerage said IGB still has good assets. Its crown jewel is the MidValley Megamall, 10 hotels and three office towers. Its balance sheet is under control with a manageable net gearing of 10%.
Road Builder: ROAD Builder is optimistic of several material construction projects in the next few months to replenish its construction order book. Mayban Securities, in its latest notes, said it believed that the worst may be over for Road Builder, which has fundamentals bolstered by its non-construction divisions. Potential catalysts would be the toll road project in Indonesia and the anticipated local construction awards. The group is also negotiating several property joint ventures and is eyeing India’s residential property and township development.
PPB Oil Palms: PPB Oil Palms remains a top pick of Mayban Securities as it is poised to benefit from the maturing of young plantations, translating into higher fresh fruit bunches and crude palm oil (CPO) production. Earlier this year, the company increased its landbank by 67,189ha to 210,788ha following the acquisition of four Indonesian plantations. Analysts are positive that this will lead to production expansion, which could provide an earnings buffer in terms of weaker CPO prices. This year, PPB Oil Palms had set aside a higher capital expenditure of about RM300mil from RM128mil last year.
Magnum: ANALYSTS expects the normalisation of prize payout ratio to lead to a one-off strong rebound for Magnum this year, even on a moderate numbers forecast operation (NFO) sales growth of 5%. Going forward, a local bank backed brokerage said Magnum's ticket sales growth will be driven primarily by continued clampdown on illegal gaming operators, sustained marketing efforts and new game variants. The domestic NFO market will continue to be Magnum's core earnings driver in FY05 as sales at its Indonesian gaming venture had not been encouraging and would not be profitable anytime soon.
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