RHBInvest Research Highlights 21st November 2011

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: RHB

Price Call: SELL

Target Price: 6.98

Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD

Research House: RHB

Price Call: SELL

Target Price: 5.63

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: RHB

Price Call: BUY

Target Price: 12.54

Stock Name: HLBANK
Company Name: HONG LEONG BANK BHD

Research House: RHB

Price Call: HOLD

Target Price: 9.70

Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD

Research House: RHB

Price Call: SELL

Target Price: 4.40

Stock Name: AFG
Company Name: ALLIANCE FINANCIAL GROUP BHD

Research House: RHB

Price Call: SELL

Target Price: 2.83

Stock Name: AFFIN
Company Name: AFFIN HOLDINGS BHD

Research House: RHB

Price Call: SELL

Target Price: 2.05

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: RHB

Price Call: HOLD

Target Price: 1.62

Stock Name: RCECAP
Company Name: RCE CAPITAL BHD

Research House: RHB

Price Call: HOLD

Target Price: 0.50

21st November 2011

 

Top Story: WCT ' Still hopeful on RM2bn contract wins in FY12/11                Market Perform

Briefing Note

''       WCT is still not giving up hope on meeting its guidance of RM2bn worth of new contracts to be secured in FY12/11, despite having only bagged RM187m YTD.

 

Macro View

 

GDP: Real GDP bounced back strongly to +5.8% yoy in the 3Q, but outlook darkens

Economic Highlights (published 18 Nov)

''       Real GDP growth bounced back strongly to expand by 5.8% yoy in the 3Q, from +4.0% in the 2Q. This was boosted partly by significantly higher-than-expected public consumption and as industrial activities normalised after Japan 's earthquake disruption to supply chain receded. This was aided by an improvement in crude oil production, after a hiccup in the production of a major oil field was resolved in May. A pick-up in consumer spending also helped, while real export growth inched up moderately during the quarter.

 

Sector Call

 

Banks: Further measures to promote responsible financing practices            Underweight

Sector update

Maybank: Fair value at RM6.98                            Underperform

CIMB: Fair value at RM5.63                                   Underperform

Public Bank: Fair value at RM12.54                    Outperform

HL Bank: Fair value at RM9.70                             Market Perform

AMMB: Fair value at RM4.40                                 Underperform

AFG: Fair value at RM2.83                                     Underperform

Affin: Fair value at RM2.05                                     Underperform

MBSB: Fair value and call downgraded to RM1.62                     Market Perform (down from OP)

RCE: Fair value at RM0.50                                     Market Perform

 

Property: Riding through the storm                       Underweight

Sector Update

''       As expected, further regulations are imposed on household financing that will have an impact on the property sector.

 

Corporate Highlights

 

Parkson: PRG 3QCY12/11 results in line with expectations                  Outperform

Company Update

''       51.6% subsidiary, Parkson Retail Group (PRG)'s 9MCY12/11 core net profit of RMB842.1m (+14.8% yoy) was within expectations, accounting for 68% of our and consensus earnings forecasts, respectively. We consider this to be within expectations as the 4QCY12 is seasonally strongest for PRG, usually accounting for ~30% of full-year earnings due to the festive seasons and holidays.

 

MMHE: Saved by provision reversals                                Underperform

Briefing Note

''       Revenue was down due to: 1) change in recognition of the Turkmenistan Block 1 Phase 1 project to equity accounting (vs. consolidation previously) after the project was novated to the MMHE-TPGM JV; and 2) drop in work in both E&C and Marine Repair/Conversion divisions. Order book stands at RM3.7bn and tender book is RM4-5bn.