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)

Malaysia Marine and Heavy Engineering Holdings (Hold): 'Four'-feit

Stock Name: MHB
Company Name: MALAYSIA MARINE AND HEAVY ENG

Research House: MAYBANK

Price Call: HOLD

Target Price: 5.70

Tactical downgrade to Hold. The delay in projects roll-out, a likely setback at Sime Darby's yard, grey visibility at Turkmenistan and higher tax rates are the 4 key reasons that compel us to cut 2011-13 earnings forecasts by 9-29%. The slower execution will constrain available yard space and could see MMHE missing out some projects in 2012. Against this backdrop, we cut our TP to RM5.70 (20x 2013 PER; -29%). We also downgrade our call on the stock due to fair valuations at this juncture although we remain positive over its longer term prospects.

Maybank research (7 December 2011)

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Secures RM17.9mil conversion contract

Stock Name: CBIP
Company Name: CB INDUSTRIAL PRODUCT HOLDING

Research House: AMMB

Price Call: BUY

Target Price: 5.00

Top ICT Distributor

Stock Name: ECS
Company Name: ECS ICT BERHAD

Research House: KENANGA

Price Call: BUY

Target Price: 1.45

MRCB JV with Ekovest confirmed as River of Life PDP

Stock Name: MRCB
Company Name: MALAYSIAN RESOURCES CORP

Research House: AMMB

Price Call: HOLD

Target Price: 2.13

Subscribes For Octagon's RCPS

Stock Name: KNM
Company Name: KNM GROUP BHD

Research House: OSK

Price Call: SELL

Target Price: 0.80

CIMB Research has technical sell on Tebrau Teguh at 71.5 sen

Stock Name: TEBRAU
Company Name: TEBRAU TEGUH BHD

Research House: CIMB

Price Call: SELL

Target Price: 0.715

KUALA LUMPUR (Dec 7): CIMB Equities Research has a technical sell on Tebrau Teguh at 71.5 sen at which it is trading at a price-to-book value of 1.0 times.

It said on Wednesday the rebound from its August's low may have hit a snag near the 61.8% FR level. Prices are now struggling to stay above its key moving averages.

'If the 50-day SMA gives way, there is a high possibility that prices may fall towards 67 sen and 63 sen. The 38.2% FR level is also a magnet for prices,' it said.

CIMB Research said the technical landscape is deteriorating. MACD signal line has staged a negative crossover while RSI has hooked downward.

'Unless prices swing back above the 75 sen level, we would rather stick with the bear's camp. Put a buy stop at 77.5 sen, just in case. Unload on strength,' it said.

ECM Libra: KLCI to trade in a range of 1,520 and 1,300 in 1H2012

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD

Research House: ECMLIBRA

Price Call: BUY

Target Price: 7.96

Stock Name: LIONIND
Company Name: LION INDUSTRIES CORPORATION

Research House: ECMLIBRA

Price Call: BUY

Target Price: 2.16

KUALA LUMPUR (Dec 7): ECM Libra Investment Research expects the FBMKLCI to trade in a range of 1,520 and 1,300 points in 1H2012 before moving up towards 1,600 in 2H2012.

It said on Wednesday that Malaysia had outperformed in 2011 and was not cheap relative to other markets.

The research house said that with the outlook for domestic interest rates flattish with downward bias, it made sense to hold high dividend yield stocks while waiting for better buying opportunities.

It also advised investors to avoid stocks with high exposure to Europe as it expects a sharp depreciation in the Euro.

'Stocks which have underperformed the FBM KLCI over the past year, and which are closer to their bottom due to negative news or developments, offer more potential upside if there is a turnaround in their situation.'

'We have identified two such stocks, Tenaga Nasional ( Strong Buy, TP: RM5.95-7.96) and Lion Industries (, Strong Buy, TP: RM2.16),' it said.

CIMB Research has technical sell on M-Mode at 43.5 sen

Stock Name: MMODE
Company Name: M-MODE BHD

Research House: CIMB

Price Call: TRADING SELL

Target Price: 0.435

KUALA LUMPUR (Dec 7): CIMB Equities Research has a technical sell on M-MODE BHD [] at 43.5 sen at which it is trading at a price-to-book value of 1.8 times.

It said on Wednesday that M-Mode is consolidating in a huge ascending wedge pattern.

'Therefore, we are worried about its follow through momentum. If prices fail to surpass the recent high of 44.5 sen soon, there is a high possibility that the candles may ease towards the support trend line,' it said.

CIMB Research said the bearish divergence on the MACD indicator suggests that the bulls are losing steam. RSI too has hooked downward.

The research house said aggressive traders may want to lock in some profits now while others should wait for a break below the wedge support (now at 40 sen) before joining the bear's camp. Next support levels are 37 sen and 35 sen.

Wah Seong price target cut, stock falls

Stock Name: WASEONG
Company Name: WAH SEONG CORPORATION BHD

Research House: HWANGDBS

Price Call: HOLD

Target Price: 2.50

Wah Seong Corp, a Malaysian pipe-coating company, fell to a one-month low in Kuala Lumpur trading after HwangDBS Vickers Research Sdn Bhd cut its price target to RM2.50 after losing potential contracts in Australia.

The stock dropped 1.5 percent to RM1.96 at 9:15 a.m. local time, set for its lowest close since Oct. 3. -- Bloomberg

CIMB Research has technical sell on UEM Land at RM2.16

Stock Name: UEMLAND
Company Name: UEM LAND HOLDINGS BHD

Research House: CIMB

Price Call: TRADING SELL

Target Price: 2.16

KUALA LUMPUR (Dec 7): CIMB Equities Research has a technical sell on UEM Land Holdings at RM2.16 at which it is trading at a FY13 price-to-earnings 23.5 times and price-to-book value of 2.0 times.

It said on Wednesday UEM Land has been gyrating in a diagonal triangle pattern for the past few weeks.

'Looking at the chart, it seems that the rebound from its September's low may have exhausted.

'Selling pressure should accelerate once the candles slip below its 30-day SMA, which is now at RM2.14. The next downleg will drag prices towards RM2.06 and RM1.91. Meanwhile, resistance is at RM2.22-RM2.30.Put a buy stop at RM2.38,' it said.

CIMB Research said the tndicators are showing signs of exhaustion. MACD histogram bars have slipped into the red while RSI has hooked downward.

RHB Research positive on construction sector, MRCB FV RM2.55

Stock Name: MRCB
Company Name: MALAYSIAN RESOURCES CORP

Research House: RHB

Price Call: BUY

Target Price: 2.55

KUALA LUMPUR (Dec 7): RHB Research Institute has turned positive on the CONSTRUCTION [] sector as there is now even more urgency for the Government to expedite the roll-out of various public projects.

The research house said on Wednesday this move by the government to pump prime the local economy to shield it against the increased risk of the global economy slipping into a double-dip recession.

'For MRCB, an additional trading angle also comes from the strong likelihood of it being offered a dual role, i.e. project manager and developer, by parent Employees Provident Fund (EPF) in the redevelopment of the 2,680-acre Rubber Research Institute (RRI) land in Sungai Buloh.

'Also, a 60:40 JV between Ekovest and MRCB is poised to bag the beautification portion worth RM1bn of the initial phase of the River of Life project. Indicative fair value for MRCB is RM2.55 based on 'sum of parts',' RHB Research said.

HLIB Research 7 December 2011 (Market View; MRCB; Traders Brief)

Stock Name: MRCB
Company Name: MALAYSIAN RESOURCES CORP

Research House: HLG

Price Call: BUY

Target Price: 2.22

Liquidity Injection, Bad Omen Or Good Karma?

'''' Similar move in Mar 08 resulted in a 1-1/2-mth rally but plunged thereafter, especially after Lehman collapse.

'''' Macro conditions are different, unlikely to see meltdown.''

'''' If history repeats, CI could hit 1600-1632 by CNY.

'''' Though history unlikely to follow scrip, potential for ST positive market exist given generally positive returns in Dec and CNY, local funds underinvested and pre-election rally.

'''' Announcement of GE may see selling ahead but also provide opportunity if GE results are better-than-expected.

'''' 6-mth later, though another collapse is unlikely, investors could turn jittery again given execution risk from EU, especially if the market had a good run.

'''' Technical readings suggest inflection point for a ST more positive market is 1503 with target projection of 1600.

'''' Maintain end 2011 and 2012 targets at 1440 and 1555 respectively and remain defensive but market could overshoot our 2012 target during 1H of next year.

'''' If trigger inflection point, stocks (from our ICPM - see our picks in the full report) with decent fundamentals, 3-mth avg daily vol of > 4m, Beta > 1.5 and potential return > 10% likely to outperform.

'''' Although index-linked heavyweights will lead, we also enlisted stocks (see full report) from our universe that are expected to outperform the general market.

''

MRCB (BUY)

Breathing life into KL river

'''' Ekovest-MRCB JV (60:40 stake) has entered into a PDP agreement with the Government for the River of Life (RoL) project. The appointment as the PDP is for a 3-year period and the JV will earn a maximum fee of 1% of the total estimated RoL project cost of RM2.2bn and will also enjoy monetary incentives with respect to the river rehabilitation and beautification works.

'''' The PDP fee is 1% and translates to an immaterial sum of RM22m. However, we can reasonably assume that the JV will not bear the risks of cost overrun or LAD penalty. We view this positively as we are not too bullish on the river cleaning stage as it involves too many government divisions (>20) and is faced with difficulties in educating the public on proper waste disposal.

'''' Our FY11-FY13 earnings were tweaked downwards by between -1% to -8% to reflect slower construction/ property progress. However, we maintain a BUY call on MRCB with a higher TP of RM2.22 based on SOP valuation. The higher TP is largely due to rolling over the assigned construction P/E to next 2-year's average earnings.

''

KLCI: Choppy ahead of EU summit

'''' Ahead of the EU summit and the S&P's downgrade warnings on euro zone countries en masse, the local bourse will waver for the rest of this week. Immediate resistance stays at 200-d SMA (1503 pts) whilst supports fall on mid Bollinger band (1465) and 100-day SMA (1471) levels.

''

TRC: Poised for a triangle breakout

'''' TRC is still consolidating in a huge triangle pattern but the stock is ripe for a stronger rebound, once the 50-day and mid Bollinger band (both at 0.62 now) are breached. Expect momentum to pick up strongly toward RM0.70 (38.2% FR) and RM0.75 (downtrend line from 2008) once the candles swing above the RM0.64 level. Supports are RM0.59 (uptrend line) and RM0.57 (61.8% FR). Cut loss below RM0.57.

Blasting Their Way Through

Stock Name: HIAPTEK
Company Name: HIAP TECK VENTURE BHD

Research House: OSK

Price Call: HOLD

Target Price: 0.80

3QFY12: Sailing Strong

Stock Name: SAPCRES
Company Name: SAPURACREST PETROLEUM BHD

Research House: ECMLIBRA

Price Call: TRADING BUY

Target Price: 4.60

HLIB Research 6 Dec 2011 (BToto; TRC; DRB; Traders Brief)

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: HLG

Price Call: BUY

Target Price: 4.92

Stock Name: TRC
Company Name: TRC SYNERGY BHD

Research House: HLG

Price Call: BUY

Target Price: 0.69

BToto (BUY)

Consistent On Jackpot, Falling on Lotto

'' BToto will be releasing its 2QFY12 results on 12th Dec (Mon). Its 4D Jackpot game has shown good performance with the ability to maintain at a range of RM1.5-2.1m sales per draw for the past 6 months since its launch. In average, 4D Jackpot sales per draw was RM1.7m.

'' To date, the market share for BToto's 4D Jackpot was 45.5% vs. Magnum's 54.5%. However, the impressive performance from 4D Jackpot has also resulted in higher-than-expected cannibalization on BToto's lotto games.

'' Our regression results showed that the impact has widened to circa RM500-600k per draw. Despite the larger-than-expected cannibalization, the 4D Jackpot would still have added RM1.1-1.2m per draw to overall non-4D sales.

'' Hence, we have lowered our assumption of RM1.3m net sales per draw under the 4D Jackpot previously to RM1.0m as the proxy to the larger-than-expected cannibalization on lotto games.

'' FY12-14 net profit forecast reduced 1-1.3% to reflect a more conservative view by factoring in the additional cannibalization on BToto's lotto games.

'' TP reduced to RM4.92 based on DCF. Maintain Buy given total potential return of 23%.

''

TRC Synergy (BUY)

2nd Putrajaya housing project

'' TRC has clinched a RM38.1m Putrajaya housing project from Putrajaya Holdings for the construction of 14 units 2-storey terrace house and 14 units 2-storey semi-D house at Precinct 14-3; and 72 units 2-storey terrace house at Precinct 14-6A.

'' The order is TRC's second housing project from Putrajaya Holdings in FY11 after bagging a similar job for semi-D homes in Precinct 8 during April, bringing its YTD order wins of >RM500m. Overall, total outstanding order book is estimated at ~RM1.47bn, translating to ~3.9x FY10's revenue and ~5.2x order book-to-market cap ratio.

'' We have cut FY11 earnings by another -7% to RM16.1m from RM17.4m previously while maintaining FY12-FY13 earnings.

'' The execution of the LRT project has been a steep learning curve for TRC. However, we maintain our BUY call with a TP of RM0.69 in view of its growing order book which is diversifying away from the LRT project and strong balance sheet with net cash of ~26 sen/share.

''

DRB Hicom (BUY)

DRB Hicom To Acquire Proton

'' According to Business Times, three parties have submitted a bid to Khazanah's stake in Proton. Among the bidders are DRB-Hicom and Naza. The price was believed to be in the range of RM6-7 per share.

'' Khazanah currently has 42.74% shares in Proton. Assuming Khazanah paring down its entire stake, the total cost is estimated to range RM1.41 -1.64bn.

'' Based on Proton's latest quarterly report, Proton's Book Value/share of RM9.81 and NTA/share of RM7.62.

'' We opined that DRB could harvest synergistic values by tying-up its existing business units with Proton. DRB already has existing close business relation with Proton (EON ' Proton Edar, Tanjung Malim land development).

'' DRB will be able to ride on Proton's existing automotive manufacturing license, effectively expanding its automotive value chain from the existing automotive assembly, distribution and sales.

'' However, we have upmost concern on the turnaround of Proton's 100% owned Lotus Group, which incurred huge losses and needed substantial capex for its turnaround plan.

'' We are unsure if there are covenants or conditions of the sales, which may impede DRB's flexibility in restructuring Proton.

'' Pricing and payment method could also become a concern given the potential of huge EPS dilution. However, it could be mitigated if Lotus is not part of the deal.

'' Forecasts remained unchanged. Maintain target price at RM2.90 (pending review) based on 20% discount to SOP.

''

KLCI: More sideways trading

'' The KLCI's powerful rebound of 4% last week has injected some optimism to our market. Nevertheless, with the sighting of three Doji stars and ahead of the EU summit, the KLCI is likely to trade sideways within the 100-d SMA (1473) and 200-d SMA range (1503).

UNIMECH: Upside targets at RM1.00-1.08

'' UNIMECH has been climbing steadily along the uptrend channel since its trough in mid Sep by overcoming resistance of 100-d SMA (RM0.81), 200-d SMA (RM0.83) and mid Bollinger band (RM0.85) levels. Resistance levels are RM0.94-1.00. Significant resistance is near RM1.05 (upper channel ' weekly chart). Supports are RM0.80-0.84. Cut loss below RM0.78. ''

Robust 3QFY11 results - maintain Buy call

Stock Name: KSL
Company Name: KSL HOLDINGS BHD

Research House: ZJ

Price Call: BUY

Target Price: 2.38

CIMB Research has technical buy on K. Euro at RM1.06

Stock Name: KEURO
Company Name: KUMPULAN EUROPLUS BHD

Research House: CIMB

Price Call: TRADING BUY

Target Price: 1.06

KUALA LUMPUR (Dec 6): CIMB Equities Research has a technical buy on Kumpulan Europlus at RM1.06 at which it is trading at a price to book value of 5.4 times.

It said on Tuesday that Kumpulan Europlus is still trading within its consolidation triangle pattern. If prices can continue to hold above its 30-day and 50-day SMAs, then a breakout to higher levels is likely.

'Technical landscape is neutral with both the MACD and RSI showing little signs of life, which is in line with the triangle view.

'Since the prior trend before the triangle is up, the odds favour the bulls here. Buy now with a tight stop placed below RM1.01. The likely breakout could send prices shooting towards RM1.18 and RM1.20 next,' it said.

''

RHB Research has Outperform on Jaya Tiasa, Ta Ann

Stock Name: JTIASA
Company Name: JAYA TIASA HOLDINGS BHD

Research House: RHB

Price Call: BUY

Target Price: 6.71

Stock Name: TAANN
Company Name: TA ANN HOLDINGS BHD

Research House: RHB

Price Call: BUY

Target Price: 6.49

KUALA LUMPUR (Dec 6): RHB Research Institute said the build-up in plywood inventory in Japan is easing with low arrivals of import since September.

It said on Tuesday that generally, plywood prices are firming, although demand is not strong enough to push up prices up very much.

For log, prices have remained firm due to robust demand from India amid seasonal low log production period in Sarawak currently.

'We maintain our Neutral call on the sector as we remain cautious that the recovery in Japan housing starts could stall due to a protracted slowdown in the global economy.

'Nevertheless we still like Jaya Tiasa (Outperform, FV RM6.71) and Ta Ann (Outperform, FV RM6.49) as there will be significant boost to their earnings from PLANTATION [] going forward due to rising fresh fruit bunches production volume and favourable crude palm oil prices,' it said.

Glomac (Hold): Building warchest for landbanking

Stock Name: GLOMAC
Company Name: GLOMAC BHD

Research House: MAYBANK

Price Call: HOLD

Target Price: 0.88

Maintain Hold. Glomac's RM35m 1HFY12 core net profit accounted for 45% of our and consensus full-year estimates. With close to RM50m (8.6sen/sh) net cash, Glomac is in a good position for accretive landbanking opportunities. We raise FY13-14 earnings forecasts by 4% and RNAV by 2sen. We now value Glomac at RM0.88 on a lower 40% discount (previously 50%). The formalization of BNM's prudent lending guidelines should remove surrounding policy risk.

Maybank research (5 December 2011)

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Resilient Sales from Township Projects

Stock Name: GLOMAC
Company Name: GLOMAC BHD

Research House: TA

Price Call: SELL

Target Price: 0.86

Proposed Capital Reconstruction And Settlement Scheme By LionCorp

Stock Name: LIONIND
Company Name: LION INDUSTRIES CORPORATION

Research House: RHB

Price Call: SELL

Target Price: 1.19

Malakoff inks PPA with TNB

Stock Name: MMCCORP
Company Name: MMC CORPORATION BHD

Research House: KENANGA

Price Call: BUY

Target Price: 3.10

Progressing Well

Stock Name: SEG
Company Name: SEG INTERNATIONAL BHD

Research House: KENANGA

Price Call: BUY

Target Price: 2.35

3Q11 results review

Stock Name: TRC
Company Name: TRC SYNERGY BHD

Research House: NETRESEARCH

Price Call: BUY

Target Price: 0.80

HLIB Research 5 Dec 2011 (Market View; Tenaga; Glomac; Traders Brief) (Part 1/2)

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD

Research House: HLG

Price Call: HOLD

Target Price: 6.00

Stock Name: GLOMAC
Company Name: GLOMAC BHD

Research House: HLG

Price Call: BUY

Target Price: 0.87

CY3Q11 Report Card

Disappointing But Revision Ratio Improved

'''' 'disappointed again but HLIB's revision ratio improved. ''Earnings risk persists but expectations toned down to levels less susceptible to shocks.

'''' Sectors that disappointed were Building Materials, Conglos, Construction, Property, Technology and Transportation.''

'''' Only the Gaming and Plantation sectors were ahead, Plantation continued to exceed expectations.

'''' Axiata, Genting Ml, Notion, TM and TSH cut to Hold while KLK is now a Sell.'' Only upgrade was JCY to Hold.

'''' HLIB's revision ratio improved to 1.3x (i.e. for every earnings upgrade, there were 1.3 downgrades) vs. 2.4x.''

'''' 2011 EPS growth forecasts cut to 6.3% vs. 6.8% but due to lower base, 2012 EPS growth is higher at 10.6% vs. 10%.

'''' Sentiment improved after major central banks provided liquidity support, VIX now below 30.

'''' However, progress towards resolving the EU debt woes are expected to be slow and with hiccups along the course.''

'''' With minor changes to our EPS growth, we maintain our end 2011 and 2012 FBM KLCI targets (unchanged 13x 1-year forward P/E) at 1,440 and 1,555 respectively.

'''' Although the market could overshoot in the short-term, we are keeping our defensive stance at this juncture and our preferred defensive picks are AFG, Boustead, BToto, Genting Mal, Maybank, MRCB, Sunway and TM.''

''

Tenaga (HOLD)

Official PPA between TNB and Tanjung Bin

'''' Tenaga has officially signed (PPA) Power Purchase Agreement with Tanjung Bin Energy (100% owned by Malakoff), for the 1,000MW coal power plant, for 25 years starting from the commercial operational date. The expected date is 1 March 2016.

'''' Similar to other power plants, the coal fuel will be supplied by TNB.

'''' We are positive on the news, for Tenaga will need to secure adequate power generation capacity to meet the annual 4-5% growing power demand in Peninsular Malaysia.

'''' Furthermore, coal energy could be the cheapest fuel energy to produce power by 2016, which is only ~14.5sen/kWh (assuming coal price at USD115/mt or RM345/mt) for natural gas price for power industry, is expected to rise gradually from current level of RM13.70/mmbtu to RM40.70/mmbtu by end 2015. Thus, natural gas energy will eventually cost ~40sen/kWh, more expensive than coal energy, but still cheaper than alternative energy costing 50-60sen/kWh.

'''' Maintain TP at RM6.00 (based on unchanged DCFE) and our Hold recommendation.

''

Glomac (BUY)

Rolling Out Heavy Projects In Petaling Jaya

'''' 1H FY12 net profit of RM41.6m was in-line with both HLIB and consensus estimates (51% of full -year forecast).

'''' 2Q net profit rose 33% qoq and 49.7% yoy thanks to a one-off RM8.6m disposal gain arising the sale of their 49% stake in their Thailand associate (WHA Glomac Alliance Company Limited).

'''' Glomac is current undergoing a soft patch in earnings following the completion of Glomac Tower, and now relies on Glomac Damansara Residences as its main earnings contributor.

'''' Next two key projects are in Bandar Utama and Mutiara Damansara, slated to launched in early 2012, with combined GDV of ~RM800m.

'''' Maintain our forecast, TP (RM0.87, 50% discount to RNAV), and BUY call, but we put our numbers under review.''

''

KLCI: More sideways trading after surging 4% wow

'''' The KLCI's strong weekly gains of 4% has overcome resistances of mid Bollinger band & 30-d SMA (now at 1464 pts), 50-d SMA (at 1437) and 100-day SMA (1473 pts), signalling a shift in market momentum. Nevertheless, the sighting of Doji stars on daily chart could indicate high possibility for a short-term peak coinciding with the key and strong 200-day SMA (1503 pts) resistance.'' This could see the index pull back and cover last Thursday's gap of 1472-1502 pts before more buying interest returns.

UOADEV: Getting oversold

'''' Based on daily chart, we reckon that UOADEV is likely to find a short term bottom near RM1.38 (38.2% FR). Stronger support is RM1.30 (23.6% FR). After a brief consolidation, the next upswing is expected to push prices towards its mid Bollinger band (RM1.50) and 30-d SMA (RM1.54). Stronger resistance is seen at RM1.65 (upper Bollinger band). ''

RHB Research ups Proton to trading buy, RM2.90

Stock Name: PROTON
Company Name: PROTON HOLDINGS BHD

Research House: RHB

Price Call: TRADING BUY

Target Price: 2.90

KUALA LUMPUR (Dec 5): RHB Research Institute has raised its outlook on PROTON HOLDINGS BHD [] to a trading buy and valued it as RM2.90.

It said on Monday at RM2.90, this would mean a 25% discount to its five-year average price-to-book (P/B) of 0.39 times applied to CY12 book value per share.

'The potential value of Proton would obviously depend on any M&A outcome. However, factoring in a speculative premium by valuing the stock at 0.5 times P/B (30% premium to 0.39 times) suggests a potential value of RM5.00 that also implies a price to net tangible asset of 0.66 times.

'The sale of Lotus could enhance valuations by RM2.36 a share over our base case valuation of RM2.90 and could lift the fair value to RM5.26 a share,' it said.

Within expectation, exciting year ahead...

Stock Name: GLOMAC
Company Name: GLOMAC BHD

Research House: ECMLIBRA

Price Call: BUY

Target Price: 1.12

Agreement on 1,000MW power plant and coal supply with Malakof

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD

Research House: MIDF

Price Call: BUY

Target Price: 6.70

OSK Research upgrades Hiap Teck Ventures to Neutral, FV 80 sen

Stock Name: HIAPTEK
Company Name: HIAP TECK VENTURE BHD

Research House: OSK

Price Call: HOLD

Target Price: 80.00

KUALA LUMPUR (Dec 5): OSK Research has upgraded HIAP TECK VENTURE BHD [] (HTVB) to Neutral with a fair value of 80 sen.

It said on Monday that HTVB shareholders have approved the cash call exercise for its 55% owned subsidiary, Eastern Steel's blast furnace (BF) project.

Eastern Steel has appointed China Shougang International Trade and Engineering Corporation (Shougang) as its main contractor for the BF. Shougang also show its commitment to the BF project by acquiring 40% of Eastern Steel's equity stake and 10% stake in HTVB.

'Although we think that Eastern Steel will not face much problem in selling its slabs in the first phase to local steel plate mills, we reckon there is an investment risk in a longer term when other new regional casters may ramp up their production,' it said.

OSK Research says the Menteri Besar of Terengganu might announce on Monday during its BF plant ground breaking that the state government is ready to consent to Eastern Steel for its iron ore mining proposal, similar to Perwaja Holdings during their iron ore pelletisation plant ground breaking ceremony.

'We now value HTVB based on -1 standard deviation of its historical trading range at 0.5 times FY12 BV translates into a higher FV of 80 sen. Thus, we upgrade the company to NEUTRAL.

'If our postulation that it may win a portion of the Bukit Besi iron ore concession is indeed correct, a potential valuation re-rating will materialise as the blue-sky DCF for this mining concession is worth RM708 million,' it said.

3QFY11 results weaker-than-expected

Stock Name: CBSA
Company Name: CBSA BERHAD

Research House: ZJ

Price Call: HOLD

Target Price: 0.36

TSH falls after 1-for-1 bonus, OSK Research FV RM2.21

Stock Name: TSH
Company Name: TSH RESOURCES BHD

Research House: OSK

Price Call: BUY

Target Price: 2.21

KUALA LUMPUR (Dec 2): Shares of TSH RESOURCES BHD [] fell to a low of RM1.90 on Friday after its bonus shares, which were issued on a one-for-one basis, went ex.

At 12.08pm, it was down eight sen to RM1.91. There were 513,100 shares done at prices ranging from RM1.90 to RM2.01.

OSK Research said that following its calendar year 2012 crude palm oil (CPO) price assumption upgrade to RM3,000 per tonne, it was raising its FY12 earnings forecast for TSH by 10.4% and revising upwards its fair value to RM2.21.

'The company possesses one of the youngest tree age profiles among planters under our coverage, but its valuations are starting to appear a little rich following its recent strong price appreciation. Still a BUY at the moment with a potential 10.8% upside,' it said.

''

HLIB Research 2 Dec 2011 (GenT; Axiata; Affin; Traders Brief)

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: HLG

Price Call: HOLD

Target Price: 7.61

Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD

Research House: HLG

Price Call: HOLD

Target Price: 4.92

Stock Name: AFFIN
Company Name: AFFIN HOLDINGS BHD

Research House: HLG

Price Call: HOLD

Target Price: 2.62

Genting Plantations (Hold; TP: RM7.61)

Site visit: Johor Premium Outlets

'''' We visited Johor Premium Outlets (JPO, a 50:50 JV project between Genting Plant and Simon Group) and we walked away feeling positive on Genting Plant's latest venture.

'''' We believe JPO will likely attract shoppers consistently, particularly from residents within the Johor state as well as visitors from Singapore, given its location that already has a captive shoppers of 8.3m and ample car park space (3,000 car park spaces and 30 bus bays for tour groups).

'''' Potential revenue and earnings contribution from JPO aside, we believe the opening of JPO, coupled with the new highway interchange will also boost property demand and prices in that area.

'''' We are maintaining our 2011-2013 net profit forecasts, as this has already been reflected in our forecasts (we have already expected JPO to contribute ~RM11m net profit to Genting Plantations from 2012 onwards, based on ROE of 15%).

'''' Maintain TP at RM7.61 (based on unchanged 13x 2012 EPS of 58.5 sen) and our Hold recommendation on the stock, as the recent share price run-up has capped potential upside on the stock.

''

Axiata (HOLD)

3Q11 Results Briefing

'' Axiata recorded a strong subscriber growth of 26% yoy reaching 186.9m customers despite softening key markets. Revenue growth continues to be driven by significant increase in data particularly at XL and Celcom with YTD growth of 50% and 29% respectively.

'' Celcom subscriber base declined to 11.4m (2.7m postpaid and 8.7m prepaid) due to rationalization of multi-SIM user and we think this is the reason that ARPUs are elevated (postpaid +RM3 to RM95 while prepaid +RM1 to RM37). Meanwhile, MoU broke its down trend and came in higher +6% qoq at 210mins thanks to the festive season in 3Q. Wireless broadband contributed RM197m with +6% qoq on the back of 924k subscribers. Smartphone penetration is 15%.

'' XL successfully gained momentum and acquisition through new offerings with 12% subscribers increase qoq reaching 43.4m. Prepaid ARPU stagnated at IDR31k while postpaid plunged to IDR171k or declined -17% qoq even though 3Q should have the benefit of festive season. XL explained that lower outgoing MoU is due to shifting in subscribers' behavior from voice to SMS and data usage. Smartphone penetration is 11%.

'''' Updated with latest guidance on higher CAPEX and depreciation along with tweaking lower our assumptions of subscriber base and ARPU. Our FY11-FY13 EPS are revised lower by -9.0% to -10.7%.

'''' We keep our HOLD call as we cut out target price by 9% to RM4.92 from RM5.44. We opine that the robust growth story may have come to an end especially for Celcom and XL who are the main contributors as market matures and competition intensifies.

''

Affin Holdings (HOLD)

Not In The "Market" For M&A

'''' Management target 2012 loans growth of 9-10% due to risk pricing, conserving capital and protecting asset quality ahead of Basel III and to protect NIM.'' This is slightly ahead of our more conservative assumption of 7%.

'''' Strong capital position (Tier-1 capital are purely equity) and can comfortably meet Basel III requirements.

'''' Although it is the second smallest bank management believes that there is no urgency to undertake M&A or additional strategic partner given that collaboration with BEA is progressing well albeit at slow pace.''

'''' However, we believe it will still attract M&A interest as its asset size is less than half of the next biggest bank.

'''' Maintain Hold with unchanged target price of RM2.62 based on Gordon Growth with both ROE of 9.2% and WACC of 11.4%.

''

KLCI: More sideways trading after surging 54 pts in 3 days

'''' On the backdrop of a 3-day 54 pts jump and a gravestone Doji formation yesterday, KLCI is likely to encounter more profit taking activities ahead but any selling pressures are likely to be well-absorbed as technical indicators remain positive. Short term resistance remains at 200-d SMA or 1504 pts whilst supports are situated at 100-d SMA (1474) pts) and 1463 (mid Bollinger band).

MASTEL: Poised for triangle breakout

'''' Signs of bottoming up in the trend and momentum coupled with the ADX readings bode well for more rebound towards RM1.16-RM1.24 levels. Major supports are RM1.04 (lower Bollinger band) and RM1.00 psychological level. Cut loss below RM0.98.'' For cheaper exposure, investors can consider MASTEL-WA.

Tenaga Nasional (Buy): Fuel cost sharing mechanism worth RM2b

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD

Research House: MAYBANK

Price Call: BUY

Target Price: 6.90

Coming together; upgrade to Buy. Tenaga received confirmation for a fuel sharing mechanism with the government and PETRONAS. Each party will equally split the additional cost incurred of RM3.1b for burning pricey oil and distillates which means Tenaga will get a RM2b cheque soon. The investment proposition for Tenaga has improved; a tariff revision is very much in the bag. We upgrade the stock to BUY based on higher earnings outlook and better balance sheet health, with a new target price of RM6.90 (+17%) pegged to 13x FY12 PER.

Maybank research (2 December 2011)

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DiGi.Com (Hold): Take the money and run

Stock Name: DIGI
Company Name: DIGI.COM BHD

Research House: MAYBANK

Price Call: HOLD

Target Price: 3.46

Switch to Telekom. We are downgrading our call on DiGi.Com to a Hold following a very successful Buy call in October. Since then, the stock has surged by some 16% and outperformed the KLCI by 15%. Given a lack of further catalysts other than the stock split that occurred post-upgrade, and the fact that recent results by all the telcos suggest the Malaysia telco market is now in the grind phase as they combat declining voice revenue and slowing data growth, we would prefer to take the money first. Switch to Telekom Malaysia. Our EV-based TP of RM3.46 is maintained.

Maybank research (2 December 2011)

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Genting Plantations (Sell): "Premium outlet" next door

Stock Name: GENP
Company Name: GENTING PLANTATIONS BERHAD

Research House: MAYBANK

Price Call: SELL

Target Price: 6.70

New shopping experience. Johor Premium Outlet ("JPO"), the first premium outlet in the ASEAN region, started its pre-launch sales yesterday, featuring a combination of 69 brands and F&B outlets. However, we observe certain hiccups that can be overcome over time. We expect <5% impact on GENP's earnings from the JPO. Maintain Sell as GENP trades at relatively rich valuation of 17.5x 2013 PER. Our TP is unchanged at RM6.70, pegged at 14.5x 2013 PER.

Maybank research (2 December 2011)

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Sarawak Oil Palms (Buy): Still early to take profit

Stock Name: SOP
Company Name: SARAWAK OIL PALMS BHD

Research House: MAYBANK

Price Call: BUY

Target Price: 6.48

Still undervalued. Recent oil palm estates transactions in East Malaysia went for as high as RM80,580/ha, yet SOP commands approximately half that value despite recent share price run up (+13% since our initiation on 2 Aug). The scarcity of investable assets and undervaluation offer an interesting M&A angle, in our view. Share price should receive further lift driven by its irresistible 2011 single digit valuation and our projected 16% FFB output CAGR (2010-13). Reiterate Buy and RM6.48 TP (13x 2013 PER).

Maybank research (2 December 2011)

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CIMB Research maintains Hold on Tenaga, TP RM6.47

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD

Research House: CIMB

Price Call: HOLD

Target Price: 6.47

KUALA LUMPUR (Dec 2): CIMB Equities Research said that investors should be cautious about the compensation for TENAGA NASIONAL BHD [] for the gas shortage as it was only an ad hoc payment.

It said on Friday that compensation for the gas shortage was good news as Tenaga's financial position has deteriorated substantially.

'But being an ad hoc payment rather than the proper cost pass-through mechanism that Tenaga needs, it leaves Tenaga vulnerable to future gas supply shocks.

"We maintain HOLD and our target price of RM6.47, based on 1.1 times price-to-book value,' said CIMB Research.