RHBInvest Research Highlights 07th December 2011

Stock Name: APM
Company Name: APM AUTOMOTIVE HOLDINGS BHD

Research House: RHB

Price Call: HOLD

Target Price: 4.30

07th December 2011

MALAYSIA EQUITIES	RHBRI TOP PICKS Public Bank FV: RM12.54 Petronas Gas FV: RM14.50 TM FV: RM4.68 Genting Plant FV: RM8.80 MPHB FV: RM3.10 KFC FV: RM3.40 KPJ Healthcare FV: RM4.71 Carlsberg FV: RM8.05   REGIONAL PICKS PTBA FV: INR20,750 Super Group FV: S$1.70 First Resources FV: S$1.75   Recent Stories Banking Sector Update Oct '11 system data, improved mom, but still off highs this year (1 Dec) Earnings Review  Subdued earnings; market volatile and uncertain (2 Dec) TNB News Update A welcome relief (2 Dec) Proton Company Update  What's Up At Proton? (5 Dec) Benchmarking - Market Update  AirAsia First, Then Bumi Armada (5 Dec) Timber Sector Update  Easing Plywood Inventory In Japan (6 Dec)
APM VISIT NOTE  Dividend potential to support share price We see APM facing a challenging year in 2012 with pressure on both costs and pricing, with the recent strength of the JPY and US$ raising pressure on margins. APM also faces renewed pressure on pricing from OEM customers continually looking to cost down. While we see multiple growth opportunities for APM, some of these can only be realised in the medium term from 2013 and beyond. Investor interest in APM could be sustained by the possibility of a higher dividend payout considering its consolidated net cash position of RM361.6m at end-Sep. We reiterate our Market Perform call and revise our fair value estimate to RM4.30 (from RM4.50). Our conservative dividend estimates already imply a 5% annual gross yield that should help support the share price. Related story: APM Results Note ' 3Q11 Earnings Disappoint (18 Nov 2011) MRCB NEWS UPDATE  Formally appointed PDP of River Of Life project Related story: MRCB News Update ' Lands RM40.3m Perai River Estuary Rehabilitation Project (1 Dec 2011)