RHBInvest Research Highlights 13th February 2012

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: RHB

Price Call: BUY

Target Price: 15.00

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: RHB

Price Call: BUY

Target Price: 9.47

Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD

Research House: RHB

Price Call: HOLD

Target Price: 7.41

Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD

Research House: RHB

Price Call: HOLD

Target Price: 6.23

Stock Name: HLBANK
Company Name: HONG LEONG BANK BHD

Research House: RHB

Price Call: SELL

Target Price: 11.01

Stock Name: AFFIN
Company Name: AFFIN HOLDINGS BHD

Research House: RHB

Price Call: SELL

Target Price: 3.10

Stock Name: AFG
Company Name: ALLIANCE FINANCIAL GROUP BHD

Research House: RHB

Price Call: SELL

Target Price: 3.56

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: RHB

Price Call: HOLD

Target Price: 2.32

Stock Name: RCECAP
Company Name: RCE CAPITAL BHD

Research House: RHB

Price Call: HOLD

Target Price: 0.57

13th February 2012

 

Malaysia Equities

Top Story

Banks ' Easing Headwinds + YTD Underperformance = Sector Upgrade              Neutral (Upgraded) Sector Update Public Bank ' Fair value at RM15.00 (from RM14.10)                                                     Outperform Maybank ' Fair value at RM9.47 (from RM7.33)                                          Outperform (upgraded) CIMB ' Fair value at RM7.41 (from RM6.20)                                          Market Perform (upgraded) AMMB ' Fair value at RM6.23 (from RM4.99)                                        Market Perform (upgraded) HL Bank ' Fair value at RM11.01 (from RM9.90)                                                        Underperform Affin ' Fair value at RM3.10 (from RM2.37)                                                                Underperform AFG ' Fair value at RM3.56 (from RM3.25)                                                                Underperform MBSB ' Fair value at RM2.32 (from RM1.95)                                                           Market Perform RCE ' Fair value at RM0.57 (from RM0.50)                                                              Market Perform

Sector Update

Plantation ' Only Time Can Resolve The Indonesian Tax Structure Problem                    Overweight Sector Update -          The seasonal decline in production continued in Jan as CPO production fell 13.8% mom. Exports fell by a slightly smaller 13.2% mom also due to seasonal factors, post-festive season. Despite the lower CPO stock levels, annualised stock/usage ratio rose to 11.1% (up from 10.5% in Dec), mainly due to the smaller export volume in Jan.

Corporate Highlights

SEG International ' No Signs of Slowing Down                                                            Outperform Visit Note -          The management expects total student population of 35k (vs. our previous assumptions of 37k) by end-2012, implying yoy growth of almost 30% from the current 27k.   Gamuda ' PDP Terms For Klang Valley MRT Announced                                        Market Perform Company Update -          The agreement between MRT Co and project delivery partner (PDP) for the Klang Valley MRT project MMC-Gamuda JV has been signed with key terms being: 1) The PDP will be paid a fee equivalent to 6% of total contract value; 2) If the actual project cost exceeds the target cost by up to 15%, the PDP fee will be reduced in accordance with an agreed formula; 3) The PDP will have to shoulder the balance if the actual project cost exceeds the target cost by 15%; and 4) The PDP is liable to a liquidated and ascertained damage (LAD) for late delivery of RM500,000/day.   MPHB ' Sells down stake in Associate, Philippine Racing Club                                       Outperform News Update -          MPHB has sold a 13.1% stake in Philippine Racing Club Inc. (PRCI) at an average price of Peso 9.50/share, for Peso 722.4m (RM51.64m). Post-disposal, MPHB will own 19.9% of PRCI, and will no longer equity account it as an associate. MPHB will record a dispoal gain of RM17.34m.   CSC Steel ' 4QFY12/11 in the red on inventory writedown                                             Trading Buy Results Note -          FY11 net profit exceeded our full-year forecast by 42%, but missed the full-year market consensus by 22%. The variance against our forecast largely came from a lower-than-expected writedown of inventories. CSC Steel also declared a 7sen single tier dividend (net yield of 4.9%).

Regional Equities

Indonesia Banks : Opportunity To Accumulate                                                             Overweight Sector Update Bank Rakyat ' Fair value IDR8,200                                                                               Outperform Bank Mandiri ' Fair value IDR7,900                                                                             Outperform BCA ' Fair value IDR7,500                                                                                     Market Perform Bank Danamon Fair value IDR5,500                                                                             Outperform

Macro

GDP ' Resilient GDP Growth In 4Q 2011, Odds Of An Upgrade Improving Economic Update (published 10 Feb 2012) -          The country's real GDP growth is estimated to have softened to 5.4% yoy in the 4Q, after bouncing back to +5.8% in the 3Q. The moderation in real GDP growth is expected to persist into 2012, due to global economic slowdown amidst a lingering sovereign debt crisis in the Eurozone.