Tuesday, February 02, 2010

S&P take on Zhulian, Supermax & Tenaga


Lift to Strong Buy from Buy. Supermax’s order backlog remains at about 5 bln glove pieces. Demand continues to be strong, partially boosted by the A(H1N1) pandemic, which has prompted governments to stock up on gloves. We increase our 12-month target price to MYR6.50 (vs. MYR4.60).


Raise to Buy from Hold. We also lift our 12-month target price to MYR2.10 (vs. MYR2.00) on an improved earnings outlook. We continue to like Zhulian for its strong balance sheet (it remains debt-free and has cash per share of 36 sen), strong cashflow
generating business and attractive dividend yield of 7.7%.


Maintain Buy. Tenaga’s earnings visibility has improved, given that coal cost is contained while electricity demand is recovering at a faster rate. Its valuations are undemanding with a PER of 11.3x, as compared with its forward PER range of 10.3x-30.4x in the past five years, and its peer group average of 11.7x.

My take yesterday was on Premium Neutrients ha ha ha

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