RHBInvest Research Highlights 29th August 2011

Stock Name: PETGAS
Company Name: PETRONAS GAS BHD

Research House: RHB

Price Call: BUY

Target Price: 14.47

Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD

Research House: RHB

Price Call: HOLD

Target Price: 7.49

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: RHB

Price Call: HOLD

Target Price: 11.89

Stock Name: AFFIN
Company Name: AFFIN HOLDINGS BHD

Research House: RHB

Price Call: SELL

Target Price: 2.77

Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD

Research House: RHB

Price Call: SELL

Target Price: 6.15

29th August 2011

 

Top Story: Banking ' History suggests potential sector derating ahead       Neutral (down from OW)

Sector Update

Maybank: Fair value and call downgraded to RM8.85                                       Market Perform (down from OP)

CIMB: Fair value at RM7.49 (from RM8.80)                                                         Market Perform

Public Bank: Fair value and call downgraded to RM14.10                               Market Perform (down from OP)

HL Bank: Fair value at RM11.89 (from RM12.50)                                               Market Perform

AMMB: Fair value and call downgraded to RM6.15                                            Underperform (down from OP)

AFG: Fair value at RM3.38 (from RM3.60)                                                           Market Perform

Affin: Fair value and call downgraded to RM2.77                                                Underperform (down from MP)

 

Macro View

 

Money Supply: Broad monetary aggregate and loan growth eased in July

Economic Highlights (published 26 Aug 2011)

''       The broader money supply, M3, eased to 11.6% yoy in July, off the 30-month high of +12.4% in Jun but higher than +11.5% in May, indicating that economic activities are cooling but remained resilient.

 

Sector Call

 

Banking: Jul '11 system data ' Loan growth and leading indicators softened            Neutral

Sector update

''       Jul '11 system-wide loan growth eased further to 12.9% yoy, as compared to +13.5% yoy in Jun '11 following lower disbursements during the month (vs. Jun).

 

Oil & Gas: Petronas 1QFY12/11 results               Overweight

Sector Update

Dialog: Fair value at RM3.90                                 Outperform

P Gas:  Fair value at RM14.47                               Outperform

RH Petrogas: Fair value at $1.36                         Outperform

Dayang: Fair value at RM2.33                               Outperform

Petra Perdana:  Fair value at RM1.15                  Outperform

Wah Seong:  Fair value at RM2.66                       Outperform

Petronas Chemicals: Fair value and call downgraded to RM6.37                Market Perform (down from OP)

Kencana: Fair value at RM2.99                             Market Perform

SapuraCrest:  Fair value at RM4.56                     Market Perform

KNM: Fair value at RM0.93                                    Underperform

MMHE: Fair value at RM5.62                                 Underperform

 

Corporate Highlights

 

Carlsberg: Premium segment growing stronger             Outperform

Briefing Note

''       Carlsberg's range of premium and super premium beers, which include Hoegaarden, Corona and Asahi, among others, grew by ~44% yoy in the 1HFY11. We understand that the strong growth resulted in Carlsberg's premium brands gaining approximately 4.9%-pts in market in share in the premium beer segment, which accounts for approximately 20% of the total beer market Malaysia .

 

CI Holdings: Disposal of Permanis by November          Trading Buy

Briefing Note

''       During the analysts' briefing on Friday, CI Holdings' (CIH) management highlighted that they are targeting to complete the disposal of Permanis to Asahi in 2QFY06/11. The deal is currently pending the approval from Bursa for CIH's circular to shareholders, MITI, and others. Management expects to hold the EGM concurrently with the AGM in late Oct, would be the final hurdle before Permanis is sold.

 

Kencana: Expanding its drilling fleet                                 Market Perform

News Update

''       Kencana announced that its subsidiary Kencana Marine Drilling will build two tender assisted drilling rigs (TADRs) at a cost of US$145m (RM435m) each. We are not surprised by this as we mentioned in a previous note that Kencana will resume the expansion of its drilling rig division within the year as it expects many opportunities to emerge for offshore drilling in 2014.

 

Corporate Results

 

PetChem: Down on lower production and methane gas supply            Market Perform (down from OP)

1QFY11 Results / Briefing Note

''       3MFY12/11 net profit of RM737m came below expectations accounting for 20.3% of our (RM3.6bn) and 16.8% of consensus estimates (RM4.4bn). Overall, net earnings were down on a qoq basis due lower utilisation and methane gas supply limitation.

 

Ann Joo: 2QFY12/11 net profit declines by 23% qoq                            Underperform

2QFY11 Results / Briefing Note

''       1HFY12/11 net profit came in within our expectations. 2QFY12/11 net profit declined by 23% mainly due to higher raw material cost amid relatively stable steel prices.