Stocks to watch: Telcos, XiDeLang, CIMB, Crest Builder, Hartalega

KUALA LUMPUR: The lacklustre overnight close on Wall Street should spur some profit taking in key Asian markets, including Bursa Malaysia on Wednesday, Nov 11.

As usual, after the recent surge, there are doubts on Wall Street again whether the market can build on recent gains.

U.S. stocks closed mostly lower on Tuesday, as differing views on whether the market can extend the recent gains, stalled the S&P 500's six-day winning streak.

The Dow Jones industrial average gained 20.03 points, or 0.20 percent, to end at 10,246.97. The Standard & Poor's 500 Index shed 0.07 of a point, or 0.01 percent, to 1,093.01. The Nasdaq Composite Index dropped 2.98 points, or 0.14 percent, to close at 2,151.08.

However, investors can be more optimistic about the local equities following the fresh batch of positive earnings and corporate developments.

For telcos, Maxis set the share offering at RM4.75 for retail investors and RM5 for institutional and cornerstone investors.

This will see the shareholders receiving about RM11.2 billion from the listing of 2.25 billion shares on Bursa. No new shares were issued.

Sports shoe manufacturer XiDeLang Holdings will see active trade o its first trading day.

RHB Research Institute has derived a fair value of 93 sen for XiDeLang. The issue price is 58 sen.
"By applying a 60% discount to the FY10 sector average of 10.5 times, we derived a target price-to-earnings ratio (PER) of four times.

"We have applied the discount to reflect its smaller size, that is revenue and capacity. Ascribing a target 2010 PER of four times, we derive a fair value of 93 sen for XiDeLang," said. RHB Research

CIMB Group Holdings Bhd posted net profit of RM726.8 million in the third quarter ended Sept 30, its best single-quarter result ever.

CIMB's net profit for the 3Q was 62.3% above the RM447.9 million a year ago. It was also 9.7% higher than its 2Q earnings.

Crest Builder secured a RM145.3 million contract to build the superstructure of a 35-storey office tower along Jalan Ampang in Kuala Lumpur.

The contract, awarded by Khor Joo Saik Sdn Bhd, is for 24 months and it is expected to be completed by Nov 11, 2011.

HARTALEGA HOLDINGS BHD [] posted an 80% rise in net profit to RM33.11 million in its second quarter (2Q) ended Sept 30, 2009 from RM18.37 million a year ago.

The stronger earnings were due to the expansion in production capacity, higher nitrile sales mix, improvement in production process, lower synthetic and natural latex prices, and favourable exchange rate.