RHBInvest Research Highlights 05 September 2011

Stock Name: UNISEM
Company Name: UNISEM (M) BHD

Research House: RHB

Price Call: SELL

Target Price: 1.28

Stock Name: NOTION
Company Name: NOTION VTEC BHD

Research House: RHB

Price Call: SELL

Target Price: 1.74

Stock Name: MPI
Company Name: MALAYSIAN PACIFIC INDUSTRIES

Research House: RHB

Price Call: SELL

Target Price: 2.64

05^th  September 2011

 

Top Story : Property ' Case study : Impact of mortgage loan calculations based         on net pay                                                                                                    Neutral

Sector Update

''       The proposal of computation of household debt based on net income rather than gross income is currently on BNM's table for consideration. Despite less encouraging economic outlook, we still do not rule out the possibility of it being implemented. In our view, administrative measure will be the only tool left to curb excessive growth in mortgage loans, as interest rate is not expected to rise further this year as economic growth slows down. Moreover, although we acknowledge that Malaysia 's property market lags the regional property markets in price appreciation, transaction volumes and liberalisation, the measures that the government/BNM has undertaken thus far to cool the property market are less severe vs. policies imposed in regional countries. This could mean BNM still has room for more stringent measures.

 

 

Sector Call

 

Semiconductor:Fall in equipment orders indicates weak outlook    Underweight

Sector Update

Unisem: Fair value at RM1.28                                                               Underperform

Notion : Fair value at RM1.74                                                                Underperform

MPI : Fair value at RM2.64                                                                      Underperform

''       Jul 11 global chip sales of US$24.9bn declined 0.1% mom, although this was slightly better than the Jun 11 drop of 0.6%. While overall chip sales continued to fall mom, we note that geographically, Japan showed some recovery, gaining 4.9% mom.

 

 

Corporate Highlights

 

Masterskill : Weaker numbers expected to continue                           Market Perform (down from OP)

Briefing Note

''       The new intake of students in 1H11 was negatively affected by changes in government policies and requirements. As a result, only 1.8k new students enrolled at Masterskill in 1H11 (vs. 3.2k in 1H10), hence the lower revenue reported. Masterskill also incurred higher costs during the year such as higher staff and depreciation costs, which contributed to its significantly lower-than-expected earnings.