KNM shares price has been beaten recently due to its net profit fell to its lowest level in five year. On 2nd March KNM closed at RM2.34
However, many research houses are still maintaining a “buy” call for KNM on the positive sentiment that its current fiscal year would be better than 2010.
The table below are the target price for KNM from various research house.
The prices of food commodities have been on an uptrend due to a perceived tight supply. Amid concerns of how this will affect bottomlines, OSK believe that the share prices of food companies will lag in 2011.
OSK think that the near term negative impact on bottomlines is inevitable as companies adjust to higher raw material prices. On the other hand, OSK believe the retail industry will continue to deliver good earnings in 2011 driven by strong consumer spending and companies’ expansion plans.
OSK downgrade the F&B subsector to NEUTRAL, with CI Holdings and QL Resources as our top picks while we maintain OVERWEIGHT on the retail industry, with Parkson remaining our favorite stock.
Below are the target prices and ratings for selected consumer product stocks.
2010 proved to be a decent year for OSK’s Small Cap Jewels although their performance was eclipsed by the liquidity-infused rally, which benefited the bigger caps, particularly from 2H2010.
Of the 50 stocks profiled in handbook, half posted absolute returns in excess of 20%, with 49% outperforming the FBM Small Cap and FBM KLCI indices.
While the smaller caps are expected to bask in the glory their larger cap peers in 2011, investors should not ignore names with good longer term potential that are trading at attractive valuations.
OSK like small caps in the construction, property, oil & gas and consumer sectors as beneficiaries of the ETP, elections and earnings themes.
The table below are the 2010 performance of OSK Top 50 Small Jewels and performance since OSK’s Small Cap Jewels report released in April 2010.
OSK believes that the share prices of plantation stocks may have peaked even though palm oil price may continue to stay relatively firm due to the current supply tightness. The decline in plantation stock prices of late may signify that they are in the PE multiple compression phase, which occurs at cycle peaks.
OSK views that the equity price action as a signal that palm oil supply will strengthen in 2H and the current CPO price strength as being unsustainable. Given the recent strength in CPO price, we have raised our CPO price assumption to RM3200 for CY11 from RM2700 previously but have factored in lower PE multiples in arriving at the target prices of plantation stocks given the potential CPO price decline. OSK maintains a Neutral call on the sector.
Below are the target prices and ratings for selected plantation stock.
The 10th Sarawak state election should be held this year before its official deadline of 23 July. OSK study the share price performance of 5 Sarawak-based contractors during the 2006 election. They found that their share prices did indeed outperform 6M and 3M before the polls but underperformed 3M after election.
Investors can consider riding on this election play but advised that they lock in gains on Nomination Day, which is usually 1-2 weeks before the actual polls. OSK have a BUY rating on Naim, HSL and KKB while CMS and Zecon are NOT RATED.
The table below are the target price for constructions stocks to look for 10th Sarawak state election.