Gamuda rated Buy RM4.96 Target Price by OSK Research

OSK Research has maintained its "buy" call on Gamuda Bhd with a higher target price at RM4.96 from RM4.78 previously, as it expects the firm's construction margins to expand, going forward.

In a note today, OSK said it viewed the Gamuda-MMC Bhd's joint venture as the lead contender in the race for the mass rail transit's (MRT) underground portion where tenders would be called in the fourth quarter.

"Given the high risk and technically challenging nature of this package, we expect margins to be high at 15 per cent (pre-tax level).

"We are raising our financial year 2011 earnings by two per cent to reflect this," it said.

ECM Libra has maintained its 'hold' call on Gamuda with unchanged target price at RM3.99.

It said the cost of MRT tunnelling contracts was expected to be higher-than- expected.

ECM Libra said it viewed the risk of rising building material prices largely due to volatile crude oil price movements.

Meanwhile, Kenanga Research has downgraded Gamuda's financial year 2011 earnings by two per cent to RM402 million.

It, however, expected a stronger second half performance, which would be driven by higher construction revenue recognition and increased property income.

It has maintained its "hold" call on Gamuda, with unchanged target price of RM4.12.

Gamuda rated Buy $4.50 Target Price

Just this week, Gamuda has been rated at Buy by 3 research house averaging a target price of $4.50.

OSK rates a high 4.96 target price stapling the imminent underground MRT ETP as the basis.

CIMB rates it higher at 5.60 target price.
It said on Friday, March 25 that it expects 2H11 to be stronger due to the gradual rise of CONSTRUCTION  margins as key projects enter their mature phase.

'The reason for the deviation was our underestimation of EBIT margin. We now up our FY11-13 EPS forecasts by 8-10%, which raises our RNAV-based target price from RM5.45 to RM5.60,' it said.

CIMB Research said these strong results could catalyse the stock, along with project awards and newsflow on the MRT project for which Gamuda is the PDP and potentially the contractor for the tunnelling works. 

Mudajaya and KNM elevating silently others are in the limelight

Recently the ETP announcements helped propel stocks that are being directly awarded with contracts. Namely Gamuda, MMC Corp, Dialog, SapuraCrest.

At the same time some stocks are moving silently behind the scenes.

Mudajaya up from RM4.16 to RM5.10 today.
KNM up from RM1.80 (adjusted) to RM3.20 today.

Bursa Component Stocks Ready to Soar in 2011

My last writing was a preview and insight into the component stocks of the FTSE Bursa Malaysia Composite Index. A de facto benchmark of the country's performance, looking inside the ingredients is essential in powering your stock portfolio into winning gems and supernormal profits.

All the banks in the list, is out of the selection - mainly because of cost and also they have generally surged to high levels by now. The goal is to look for the final gems that can outperform for 2011. Forget 2009 and 2010 where many stocks have gained 50%. So here's my focus for this write up.

Now 22 left. MAS is out, since if one were to go into this sector (airline/travel), then go for AirAsia.

Heavily priced heavyweights such as BAT (over 40 RM), Digi and KLK(over 20 RM) I will leave out as well. So is SIME with a messy politico game. Plus it is expensive. Petronas Dagangan and Petronas Gas too both over 10 RM. So those too are cut away from my radar of stocks that are ready to soar in 2011.


Which currently leaves the remaining 10:

Axiata Group Bhd

1 Week 3.4% 13 Weeks 3.6%  
4 Weeks 7.4% 52 Weeks 55.4%

Maxis Bhd
1% since listing 2010

PETRONAS Chemicals Group Bhd
10% since listing 2010

MMC
1 Week 11.5% 13 Weeks 11.9%  
4 Weeks 0.3% 52 Weeks 26.5%

Genting Malaysia BHD
1 Week 4.4% 13 Weeks 8.3%  
4 Weeks -0.3% 52 Weeks 22.9%  

Telekom Malaysia

1 Week 6.3% 13 Weeks 10.4%  

4 Weeks 6.9% 52 Weeks 19.9%  

Tenaga Nasional

1 Week -2.3% 13 Weeks -4.9%  

4 Weeks -7.7% 52 Weeks -0.3%  

YTL Power International

1 Week -0.8% 13 Weeks 1.3%  
4 Weeks 4.8% 52 Weeks 10.0%  

Gamuda
1 Week 11.5% 13 Weeks 13.0%  
4 Weeks 11.3% 52 Weeks 49.6%

Plus Expressways

1 Week 2.0% 13 Weeks 5.3%  
4 Weeks 10.8% 52 Weeks 41.0%

The recent stock performance can give some indication where most stocks have rised 40-50% from a year ago. Gamuda up 50%. Plus 40%. Axiata 55%.

Tenaga has been trickily at a precarious position - not up nor down too much the past year. And now facing some issues with coal supply. It is perhaps still a good buy seeing it is still the utility company to go to in Malaysia.

Therefore, my selections would zoom down to MMC, YTL Power, Genting Malaysia.  

30 Stocks of the FTSE Bursa Malaysia Composite Index 2011

Shadowing an index is essentially one method to auto-park market sentiments with your investment choice. In this case, believing, relying, and monitoring the index. For Malaysia, the revamped and nimble (yet long winded naming) FTSE Bursa Malaysia Composite Index is the one that is featured as the de facto stock market health index of Malaysia.

Here are the components - consisting 30 stocks of various sectors:
RHB Capital
Malaysia Airline System
British American Tobacco (Malaysia)
Axiata Group Bhd
Maxis Bhd
PETRONAS Chemicals Group Bhd
Genting
Kuala Lumpur Kepong
Malayan Banking
MMC
PPB Group
Sime Darby Bhd
Hong Leong Financial
IOI
Genting Malaysia BHD
Telekom Malaysia
Tenaga Nasional
AMMB Holdings
CIMB Group Holdings
Hong Leong Bank
UMW Holdings
YTL Corp
Petronas Gas
YTL Power International
Digi.com
Petronas Dagangan Bhd
Gamuda
Plus Expressways
MISC
Public Bank BHD

Banks take the bulk with 8 stocks over 26% of the index. Recently almost every stock in the index has risen considerably. So perhaps looking at a each stock carefully and then analysing to choose the ones that have not soar as much as the others.