Stock Name: DRBHCOM
Company Name: DRB-HICOM BHD
Stock Name: UMW
Company Name: UMW HOLDINGS BHD
Company Name: DRB-HICOM BHD
| Research House: RHB | Price Call: BUY | Target Price: 3.45 |
Stock Name: UMW
Company Name: UMW HOLDINGS BHD
| Research House: RHB | Price Call: SELL | Target Price: 6.20 |
31st January 2012
| Top Story |
| Wah Seong ' A Quiet 2012? Market Perform Visit Note - We met up with Wah Seong's management recently and came away positive on: 1) news that the domestic pipe-coating contracts are picking up; 2) the progress with the Insituform JV; and 3) the ongoing endeavour to segregate the two core business, with the aim for better operational focus. - However, our concerns are: 1) the uncertainty of the domestic pipe-coating contract awards; and 2) the lack of a large international project to anchor earnings for 2012. |
| Sector Update |
| Motor ' Storm In A Teacup Neutral (Upgraded) Sector Update DRB-HICOM ' Fair value raised to RM3.45 Outperform (Upgraded) UMW ' Fair value at RM6.20 Underperform - Recent media reports suggest that banks are considering measures to tighten HP lending, including restricting buyers to a maximum of two car loans at any one time reducing the margin of financing for the second HP loan (65-70%) and also for loans for "luxury" makes (50%). - We understand that there is no official directive from Bank Negara (BNM). In our opinion, the possible measures are not likely to have a significant impact on auto sales given that the majority of HP borrowers have only one car loan. |
| Corporate Highlights |
| Public Bank ' Results in line but dividend slightly disappointing Outperform Results / Briefing Note - Public Bank's 4Q11 results were in line with our and consensus estimates but the interim net DPS of 28 sen declared was below our expected 31.5 sen. Full-year net payout was 48.3% was below our 52.5% assumption, which we suspect was partly to conserve capital as BNM has yet to announce its stand on the countercyclical buffer. |
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