News of the Day
– Asian economic growth will slow to the weakest since 1998 financial crisis, says ADB
– Exports of Malaysian palm oil products for March rose 5.4% to 1.22m tonnes
– Cabinet decide today whether there is water tariff rate hike in Selangor, as much as 31%
Economics of the Day
Tanjong Plc 4QFY09 below – Tripped up by one-offs
Tanjong’s FY1/09 core net profit came in 15% below our forecast and 12% below consensus largely due to i) overestimation of local power earnings, ii) an unexpected RM23m windfall tax charge in 4Q and iii) larger-than-expected losses at TI. A total gross DPS of 37.5 sen was declared for 4Q, bringing FY09 total DPS to 90 sen. Power earnings should improve in FY10 as the windfall tax will not recur, which should more than offset the Bangladesh plant’s scheduled maintenance works. Resilience should also continue to prevail for its gaming business. After updating FY09’s numbers, we lower our FY10-11 earnings by 7-8%. Our DPS projections remain intact. The earnings and SOP variable adjustments reduce our end-CY09 target price from RM17.00 to RM16.60 (20% discount intact). Maintain OUTPERFORM with share price triggers of i) more earnings-enhancing power asset acquisitions, ii) a sustainable turnaround at TI and iii) potential spin-off of its power business over the medium term.
Quick takes – Dreamgate Corp update – More impairment drags
Quick takes – Malayan Banking update – Adjusting for rights issue
Quick takes – Plantations Sector update – Fertile ground in US planting intentions
Economic news – 4Q08: Portfolio outflows subside
Economic news – Feb 09: Recovery in loan indicators not sustainable
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