Bursa Malaysia Stock Price Target

HwangDBS Malaysia Equity Research - 31 Jan 2012

2012-02-01T15:04:00.001+08:00

Stock Name: AIRPORT
Company Name: MALAYSIA AIRPORT HOLDINGS BHD

Research House: HWANGDBS

Price Call: HOLD

Target Price: 6.70

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD

Research House: HWANGDBS

Price Call: BUY

Target Price: 7.00

Malaysia Airport Holdings; Hold; RM5.75
Price target: RM6.70; MAHB MK
Fund raising to cover higher costs of klia2

Malaysia Airports Holdings (MAHB) has proposed a private placement of 110m new shares, equivalent to 10% of its issued share capital of 1.1bn, in an effort to part finance klia2 which is slated to begin operations in April 2013. The pricing for the placement has not been determined yet and potential investors will be identified via a book building exercise later.

Assuming MAHB issues its new placement shares at RM5.50 per share, it would be able to raise RM605m, which would be used to finance the construction of new klia2. At this pricing level, the funds raised would be higher than our initial assumption of RM550m previously. This would reduce the additional borrowings required by MAHB. The Group expects to complete this fund raising exercise by 1H2012.

Tenaga Nasional; Buy; RM5.97
Price target: RM7.00; TNB MK
TNB's CEO will not renew contract upon expiry in June

Tenaga Nasional Bhd (TNB) CEO Datuk Seri Che Khalib Mohd Noh will not be renewing his contract when it expires in June this year after heading the national utility for the past seven years. TNB's board has accepted his request and has begun finding a replacement.

It is reported that the most suitable replacement would be TNB's chief operating officer/executive director Datuk Azman Mohd, but TNB is also getting consultants to identify potential candidates. An internal candidate would ensure smooth transition, while a new candidate may bring new excitement to TNB. Nevertheless, we expect minimal impact to TNB's stock price as the development is not new. The CEO has indicated earlier that he will not renew his contract upon expiry. In addition, the Energy Commission has taken a more proactive role recently to look into problems related to the power sector and take charge of the competitive bidding process for the new power plants. The Energy Commission is also responsible for the tariff review proposal.

We maintain our Buy rating for TNB with RM7.00 TP for strong earnings recovery in FY12. We expect TNB's earnings to recover strongly in FY12F following the RM2bn gas compensation and increase in gas supply to 1,150mmscfd for FY12. The gas shortages issue should also be resolved following the completion of the new regas plant by Petgas in Jul 2012.

Moderating earnings growth trend to continue into FY12

2012-01-31T16:04:00.003+08:00

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: MIDF

Price Call: HOLD

Target Price: 13.30

Freight rates have bottomed, but it will be a "long" U-shaped recovery

2012-01-31T16:04:00.001+08:00

Stock Name: MAYBULK
Company Name: MALAYSIAN BULK CARRIERS BHD

Research House: MIDF

Price Call: TRADING SELL

Target Price: 1.61

HwangDBS Malaysia Equity Research - 31 Jan 2012 (Part 2)

2012-01-31T15:04:00.000+08:00

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: HWANGDBS

Price Call: BUY

Target Price: 14.90

Highlights

Regional Gaming
A tale of three cities

GENS: Stronger 2H12 will full opening of RWS. GENM: Strong free cashflow from Malaysia's resilient mass market will underpin US expansion plans. GENHK: GGR growth at RWM will remain strong as operations ramp up and future competition is likely to be delayed. GENS and GENT remain our top picks; GENHK's valuation is attractive.

Result Snapshot

Public Bank; Buy; RM13.44Price target: RM14.90; PBKF MK
Sustained healthy momentum

FY11 result was within expectations; slight deviation in non-interest income. Earnings driven by consistent loan growth, stable asset quality and best cost-to-income ratio. Declared 28sen DPS, taking full year dividend to 48sen or 48% payout; future payout at c.50%. Maintain Buy with RM14.90 TP.

DRB-Hicom upgraded to 'outperform'

2012-01-31T13:34:00.001+08:00

DRB-Hicom Bhd rose 1.1 percent to RM2.79, on course for its highest close since July 2003.

The stock was upgraded to "outperform" with its so-called fair value increased to RM3.45 from RM2.20 at RHB Capital Bhd after profit estimates were raised, Alexander Chia, an analyst, wrote in a report today. -- Bloomberg

HLIB Research 31 January 2012 (Public Bank; MAHB)

2012-01-31T13:04:00.005+08:00

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: HLG

Price Call: HOLD

Target Price: 13.90

Stock Name: AIRPORT
Company Name: MALAYSIA AIRPORT HOLDINGS BHD

Research House: HLG

Price Call: BUY

Target Price: 6.80

Public Bank (HOLD)

Continued To Deliver

'''' 4QFY11 results were in line with HLIB and consensus.''

'''' 2^nd interim single-tier dividend of 28 sen.'' FY11 total of 48 sen (48.3% payout), in line with HLIB's projection and company's unchanged dividend policy of circa 50%.

'''' FY11 loans growth of 13.5% yoy slightly behind target of 14-15% and our assumption of 14% mainly due to overseas operations (only 7%) while domestic growth was 14.1%.

'''' Targeting 12-13% FY12 loans and deposits growth (vs. HLIB's 11%) to offset anticipated 10-15bps erosion in NIM.''

'''' Asset quality continued to improve and remained stable.'' Guidance is for both asset quality and credit charge to stay stable with boost from full adoption of FRS139.''

'''' No issue meeting Basel III requirements and will strive to maintain a lean capital structure.'' BNM's concept paper on counter-cyclical capital buffer is expected by 2014.

'''' FY12-13 forecasts raised by 1.4-1.9% following final results while we introduced FY14 forecast.

'''' Thus, target price raised to RM13.90 (Gordon Growth with ROE of 24.3% and WACC of 9.6%) vs. RM13.45.

MAHB (BUY)''

'''' MAHB has proposed raise RM600m for its revised RM3.6-3.9bn capex (previously RM2bn) of KLIA2,'' through private placement exercise involving new share issuance of up to 10% of issued share capital or 110m shares.

'''' The exercise is expected to be completed within 1H12.

'''' The proposed private placement was within our expectation.

'''' We have estimated earnings dilution impact of 4.6% in 2012 (half year impact) and 9.1% in 2013.

'''' We are positive on the long term prospect of KLIA2 development backed by the continuous expansion of low cost airlines and strong demand for regional budget travelling.

'''' Maintain Buy with unchanged target price of RM6.80.

Public Bank (Buy): On a stable growth path

2012-01-31T13:04:00.003+08:00

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: MAYBANK

Price Call: BUY

Target Price: 14.60

Solid results. 2011 results were yet another testament to Public Bank's solid management capabilities and its unwavering position as Malaysia's premier retail bank. 4Q11 net profit rose 4% YoY to RM877m, contributing to a full-year earnings growth of +14% YoY to RM3.48b. Public Bank continues to be a safe haven amid current volatility, with impeccable fundamentals. Our Buy call is unchanged, as is our TP of RM14.60 (2012 P/BV of 2.8x, ROE: 22.3%).

Maybank Research 31 Jan 2012

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RHBInvest Research Highlights 31st January 2012

2012-01-31T13:04:00.001+08:00

Stock Name: DRBHCOM
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.

FY11: In line with consensus

2012-01-31T10:33:00.005+08:00

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: ECMLIBRA

Price Call: HOLD

Target Price: 13.00

A mathematical analysis of its Dividend Reinvestment Plan

2012-01-31T10:33:00.003+08:00

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: ECMLIBRA

Price Call: HOLD

Target Price: 7.80

Greater Room For Upside Surprise

2012-01-31T10:33:00.001+08:00

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: OSK

Price Call: BUY

Target Price: 2.70

2Q/FY12 results - within expectations. Maintain Hold Call.

2012-01-30T18:05:00.000+08:00

Stock Name: SPRITZR
Company Name: SPRITZER BHD

Research House: MERCURY

Price Call: HOLD

Target Price: 0.88

Carlsberg Brewery (Hold): Brewing Asahi locally

2012-01-30T17:04:00.003+08:00

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: MAYBANK

Price Call: HOLD

Target Price: 8.30

Maintain Hold and our DCF-based TP of RM8.30. We are positive on the move to brew Asahi locally, for this should contribute to some margin enhancement over the medium term. In the near term, however, no material impact is expected given that the super premium segment is not a meaningful contributor to overall sales just yet. No dividend policy has been established hence we maintain our net dividend payout assumption of 58-62% for FY12-13 - a net yield of 3.8% for FY12.

Maybank Research 30 January 2012

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MIDF Equity Beat (Axiata Group) 30 JANUARY 2012

2012-01-30T17:04:00.001+08:00

Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD

Research House: MIDF

Price Call: BUY

Target Price: 5.85

Growing From Strength-to-Strength

2012-01-30T11:03:00.000+08:00

Stock Name: GAMUDA
Company Name: GAMUDA BHD

Research House: OSK

Price Call: BUY

Target Price: 4.46

Taking a Slower Pace

2012-01-30T10:33:00.005+08:00

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: OSK

Price Call: HOLD

Target Price: 14.00

Up for Privatization

2012-01-30T10:33:00.004+08:00

Stock Name: GNEALY
Company Name: GLENEALY PLANTATIONS (M) BHD

Research House: OSK

Price Call: BUY

Target Price: 8.23

HLIB Research 30 Jan 2012 (Plantations; Traders Brief)

2012-01-30T10:33:00.003+08:00

Stock Name: TWS
Company Name: TRADEWINDS (M) BHD

Research House: HLG

Price Call: BUY

Target Price: 5.04

Stock Name: TSH
Company Name: TSH RESOURCES BHD

Research House: HLG

Price Call: BUY

Target Price: 2.13

Plantations (Neutral)

Highlights from MPOB Seminar

'''' MPOB expects 2012 CPO production in Malaysia to increase to increase to 19.3m tonnes from 18.9m tonnes in 2011 on the back of: (1) Higher FFB yield; (2) Higher OER; and (3) More matured areas coming into production from replanting in 2009. As for Indonesia, industry expert expects CPO production in 2012 to expand to 26m tonnes from 24.55m tonnes in 2011.

'''' Besides having a direct negative impact on refiners' profitability and capacity utilization in Malaysia and India, the revised export taxes for palm products in Indonesia will also have an indirect impact to the upstream segment. This is mainly because India relies heavily on imported CPO for its downstream processing industry, and lower refined palm product prices from Indonesia will further weaken India refiners' price competitiveness and processing margin (of which the country is already suffering from low capacity utilization), hence reducing India's demand for CPO. This in turn means any reduction in the import of CPO from India will raise palm oil stockpile in Malaysia, hence affecting both demand and prices for CPO.

'''' Despite the current economic turmoil, most speakers expect CPO price to sustain at high level. MPOB expects CPO price to average at between RM3,100 and RM3,500 in 2012 assuming: (1) Crude oil price remains at US$100/barrel; and (2) Soybean oil price remains at US$950/tonne.

'''' We are keeping our Neutral stance on the plantations sector, given: (1) The unattractive valuation (in particular, the bigger plantation players) relative to their regional peers; and (2) Our less optimistic view on the downstream segment's fortunes. For exposure in the sector, our top picks are Tradewinds Plant. (BUY; TP: RM5.04) and TSH Resources (BUY; TP: RM2.13).

KLCI: Lower liners and penny stocks to shine

'''' Unless KLCI stages a breakout above the 1531 level (31 Dec 11 high), market is likely to consolidate further with attention remain on lower liners and penny stocks as more investors return from CNY holidays. Immediate support is 1500 while resistance are the huge gap between the 1529-1546 levels dated 5 Aug 11.

BPPLAS: Awaiting a neckline resistance breakout

Downside risks are limited with strong potential to rerate higher due to its cheap valuations, in the wake of its savvy management, strong average 4-year net profit margins of 7.6% (TGUAN: 5%; GWPLAST: 6.4%), superior 4-year ROE of 11.7%'' (TGUAN: 6.4%; GWPLAST: 7.4%) and compelling valuations at 6.9x trailing P/E (industry: 8.8x). Ex-cash, BPPLAS is only trading at 3.8x P/E. Moreover, BPPLAS dividend is also the highest at 6.2% against industry 3.1%.

'''' Technically, BPPLAS medium to long term outlooks are positive as weekly and monthly indicators are on the mend. A breakout above RM0.68 (neckline resistance) will spur greater upside towards RM0.74 (61.8% FR) and RM0.83 (76.4% FR). Immediate supports are situated near RM0.58 (38.2% FR) and RM0.60 (weekly mid Bollinger band5). Cut loss below RM0.58.

Picking up the Pace

2012-01-30T10:33:00.001+08:00

Stock Name: FIBON
Company Name: FIBON BERHAD

Research House: TA

Price Call: BUY

Target Price: 0.55

Initiation Report

2012-01-30T00:06:00.000+08:00

Stock Name: NHFATT
Company Name: NEW HOONG FATT HOLDINGS BHD

Research House: NETRESEARCH

Price Call: BUY

Target Price: 3.00

Boustead is a 'Buy', says HwangDBS

2012-01-27T20:05:00.000+08:00

Stock Name: BSTEAD
Company Name: BOUSTEAD HOLDINGS BHD

Research House: HWANGDBS

Price Call: BUY

Target Price: 6.60

KUALA LUMPUR: HWANGDBS Vickers Research Sdn Bhd has recommended a "buy" for Boustead Holdings Bhd due to its strong growth prospects, driven by all its core divisions.

The research firm said it had raised its ex-bonus target price to RM6.60 after including contribution from a new hotel, rolling over valuation base to financial year 2012 forecast and its new target price for Affin Holdings based on 1.1 times financial year 2012 forecast book value.

"This values Boustead at 12 times the financial year 2012 forecast price earnings and two times price over net tangible assets," it said in its research note today.

Boustead closed trading today at RM5.42, down one sen from RM5.43 yesterday.

According to HWANGDBS, the company had been stoking investor interest over the past two years with a more solid earnings delivery, formal 70 per cent dividend payout policy and a slew of acquisitions in Pharmaniaga Bhd and MHS Aviation.

"Its market capitalisation has visibly increased by almost double to RM5.6 billion, and it has beaten internal key performance indicators for return on equity and dividend per share," the research firm said.

However, HWANGDBS Vickers said Boustead was still undervalued.
"It is trading at 10 times financial year 2012 price earnings and 1.2 times price per net tangible assets currently, despite offering 19 per cent earnings per share compound average growth rate and an attractive 7.6 per cent yield," it added.

It also said Boustead's core divisions businesses were currently on solid ground.

Boustead naval shipyard contract of RM9 billion for six patrol vessels will keep its heavy industries unit busy until 2021.

The RM9 billion contract will provide long-term earnings visibility to BHIC and is set to reap substantial profits from this single largest contract awarded in Malaysia, given its leading roles in weaponry, combat system, vessel design, naval electronics.

"BHIC may also be given a maintenance contract for this batch of vessels, as for the first generation vessels. Strong patronage by the Royal Malaysian Navy will continue to ensure its order book is replenished regularly," the research firm said.

Boustead will also benefit from the rising crude palm oil (CPO) prices as it has about 74,000 hectares of matured estates. Every RM100 per metric tonne increase in the CPO price would raise financial 2012 forecast net profit by three per cent.

The research firm said Boustead's disposal of its 95 per cent stake in the Indonesian plantation business to PT Agro Investma Gemilang for US$38 million, was a good move, as the 8,000 hectares of planted area has been dragging down the group's blended fresh fruit bunches yield. - Bernama

OSK maintains 'buy' call on Axiata

2012-01-26T16:34:00.001+08:00

Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD

Research House: OSK

Price Call: BUY

Target Price: 5.60

OSK Research has maintained a "buy" call on Axiata Group based on its sum-of-parts (SOP) derived value of RM5.60 following strong revenue growth in the company's Idea Cellular.

In a research note today, OSK said Idea's strong results reaffirmed its view on the improved revenue and earnings perspective for the company, despite the rising tariffs due to the massive price-war in 2009-2010.

It noted that Idea continued to benefit from the 20 per cent power tariff hike levied by the Indian government earlier this year for the sustenance of state distribution utilities.

Idea recorded a strong nine per cent quarter-on-quarter growth in revenue to RM3.3 billion for the third quarter on the back of seasonally higher minutes of usage and improved subscribers growth of 6.2 per cent.

Axiata's Indian associate contributes less than 10 per cent to its net earnings and five per cent to OSK's SOP valuation on the stock.

The research house said Axiata remained as an inexpensive regional mobile exposure and therefore was its top regional telecoms pick. -- BERNAMA

4QFY11 results within expectations - maintain Buy

2012-01-26T12:03:00.000+08:00

Stock Name: ZHULIAN
Company Name: ZHULIAN CORPORATION BHD

Research House: ZJ

Price Call: BUY

Target Price: 2.40

OSK keeps "buy" call on Genting

2012-01-25T12:03:00.001+08:00

Stock Name: GENTING
Company Name: GENTING BHD

Research House: OSK

Price Call: BUY

Target Price: 13.36

OSK Research Sdn Bhd maintains a "buy" call for Genting Bhd stock at RM13.36 fair value following the selling of North West Natuna and Anambas oil blocks in Indonesia to Awe Ltd of Australia.

The research house said they were not surprised by the latest disposal as the group has been assessing opportunities to dispose its power and oil and gas businesses in Malaysia, China, Indonesia and India.

"The oil and gas business is expected to require heavy capital expenditure as and when some of its product-sharing contracts exploration blocks in Indonesia become commercially viable.

"We believe the group is unlikely to commit to the heavy funding needs of the oil and gas exploration business after all it is a non-core business.

"Given its growing global gaming presence, we believe the valuation disparity with its global peers should narrow over time," said OSK in a statement today. -- BERNAMA

To kick off the reporting season

2012-01-25T11:33:00.002+08:00

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: MAYBANK

Price Call: HOLD

Target Price: 14.60

RM500mil federal fund for Samalaju Port

2012-01-25T11:33:00.001+08:00

Stock Name: BIPORT
Company Name: BINTULU PORT HOLDINGS BHD

Research House: AMMB

Price Call: BUY

Target Price: 8.33

Higher offer from PNB

2012-01-25T11:33:00.000+08:00

Stock Name: SPSETIA
Company Name: SP SETIA BHD

Research House: MIDF

Price Call: HOLD

Target Price: 3.95

Poised on earnings inflection point

2012-01-25T10:33:00.001+08:00

Stock Name: BHIC
Company Name: BOUSTEAD HEAVY INDUSTRIES CORP

Research House: AMMB

Price Call: BUY

Target Price: 4.90

Let's move on

2012-01-25T10:33:00.000+08:00

Stock Name: SPSETIA
Company Name: SP SETIA BHD

Research House: AMMB

Price Call: HOLD

Target Price: 3.95

"Hold" call on SP Setia stays

2012-01-25T10:03:00.000+08:00

Stock Name: SPSETIA
Company Name: SP SETIA BHD

Research House: HLG

Price Call: HOLD

Target Price: 3.95

Hong Leong Investment Bank Research has maintained a "hold" call on SP Setia Bhd with a revised target price of RM3.95 from RM3.90 previously.

The research division of Hong Leong Investment Bank Bhd (HLIB) said the higher target price followed the move by SP Setia CEO Tan Sri Liew Kee Sin and Permodalan Nasional Bhd (PNB) to revise their offer for shares in the company to RM3.95 a piece.

"We understand that the joint offer was arrived at following six to eight weeks of intense discussions between Liew and PNB.

"Also, PNB intends to maintain the listed status of SP Setia and its public spread," it said in a research note today.

It said the the most important part of the offer was a three-year management agreement for Liew to have a free hand in running SP Setia.

"We welcome this news as it removes uncertainty over the future of SP Setia, particularly with regards to Liew's involvement.

"With the entry of PNB, we believe SP Setia will stand a better chance than ever of obtaining a substantial allocation of Rubber Research Institute (RRI) land in Sungai Buloh," HLIB Research said. -- BERNAMA

Dialing up a New Record

2012-01-20T23:06:00.011+08:00

Stock Name: DIGI
Company Name: DIGI.COM BHD

Research House: OSK

Price Call: HOLD

Target Price: 4.00

In Hot Pursuit of D.B.E. Gurney?

2012-01-20T23:06:00.009+08:00

Stock Name: CIHLDG
Company Name: C.I. HOLDINGS BHD

Research House: OSK

Price Call: SELL

Target Price: 0.99

A One-Stop Media Provider

2012-01-20T23:06:00.007+08:00

Stock Name: MEDIA
Company Name: MEDIA PRIMA BHD

Research House: OSK

Price Call: BUY

Target Price: 2.89

Building a New FMCG Facility

2012-01-20T23:06:00.005+08:00

Stock Name: OLDTOWN
Company Name: OLDTOWN BERHAD

Research House: OSK

Price Call: BUY

Target Price: 1.55

CIMB Thai boosted by one-off gain in 4Q

2012-01-20T23:06:00.003+08:00

Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD

Research House: AMMB

Price Call: BUY

Target Price: 8.00

Even busier days ahead, amid Sarawak's construction boom

2012-01-20T23:06:00.001+08:00

Stock Name: HSL
Company Name: HOCK SENG LEE BHD

Research House: AMMB

Price Call: BUY

Target Price: 2.30

HLIB Research 20 Jan 2012 (Digi; Traders Brief)

2012-01-20T14:04:00.005+08:00

Stock Name: DIGI
Company Name: DIGI.COM BHD

Research House: HLG

Price Call: SELL

Target Price: 3.17

DiGi.Com (SELL)

4Q11 Results

'''' FY11 reported revenue of RM5,964m and PBT of RM1,561m came within expectation, accounting for 100% and 101% of our full-year forecast respectively.

'''' The only deviation was net profit which registered RM1,255m exceeded our expectation, accounting for 110% of our full-year forecast but is much below consensus whereby it only account for 87%.

'''' This is mainly due to effective tax rates on approved tax incentives related to mobile broadband network facilities for FY09-FY11.

'''' Declared 4^th interim tax exempt dividend of 6.5 sen, translating to a payout ratio of 128.2%. Total declared dividend for FY11 was 17.5 sen vs. 16.3 sen in 2010.

'''' Minor tweaks on earnings forecast imputing guided tax rate for FY12-13 with consideration of voice products' ARPU and MOU trends. As a result, FY12-FY13 EPS were adjusted by +16.1% and +14.9% respectively.

'''' DDM-derived TP is maintained at RM3.17 (based on WACC of 7.4% and TG of 0%).

KLCI: Sideways ahead of CNY holidays next week''

'''' Ahead of the CNY holidays next week, we expect more sideways movement as bigcaps continue its consolidation whilst lower liners and ACE counters to remain in the limelight. Immediate supports are 1512 (mid Bollinger band), 1502 and 1492 (lower Bollinger band).

Dow Jones: Still upside bias

'''' Following the triangle breakout, current uptrend remains intact as long as the Dow is able to maintain its posture above the mid Bollinger band or uptrend line supports near 12350. Further support is 12068 (50-d SMA) and 200-d SMA at 11962.

'''' Immediate resistance targets 12753 (Jul 2011 high) and 12876 (May 2011 high), followed by a more formidable resistance near 13000 psychological barrier.

DIGI.com (Hold): Helped by well-timed tax benefits

2012-01-20T14:04:00.003+08:00

Stock Name: DIGI
Company Name: DIGI.COM BHD

Research House: MAYBANK

Price Call: HOLD

Target Price: 3.74

Within expectations. Digi ended FY11 strongly but only due to some well-timed tax benefits. Net of this, earnings were within expectations, down slightly from FY10. In 2012, competitive pressures are expected to rise and valuations are stretched but management was optimistic, guiding for mid to high single-digit topline growth and sustained EBITDA. Further, dividends should be sustained as Digi is likely to undertake more capital management measures. Maintain Hold with a raised EV-derived TP of RM3.74 (+8%) after incorporating forward guidance of lower effective tax rate.

Maybank research (20 January 2012)

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Pavilion REIT (Hold): Asset enhancement for the longer term

2012-01-20T14:04:00.001+08:00

Stock Name: PAVREIT
Company Name: PAVILION REAL ESTATE INV TRUST

Research House: MAYBANK

Price Call: HOLD

Target Price: 1.10

Positive asset enhancement. We are positive on Pavilion REIT's (PREIT) latest asset enhancement initiatives in transforming the existing TANGS Fashion Lifestyle Store area (68,000 sqft NLA or 5% of Pavilion Mall's total NLA) into a new high street fashion precinct, which will enhance the rental yield. Significant contributions should come in from 2013 onwards. No change in our earnings forecasts for now. Our DCF-based TP is unchanged at RM1.10. Hold.

Maybank research (20 January 2012)

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Bond with free warrants on Indonesia and Vietnam

2012-01-20T11:03:00.001+08:00

Stock Name: SAMCHEM
Company Name: SAMCHEM HOLDINGS BERHAD

Research House: ECMLIBRA

Price Call: BUY

Target Price: 1.10

CIMB Thai's 4QFY11 net profit boosted by exceptional gains

2012-01-20T10:33:00.005+08:00

Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD

Research House: MIDF

Price Call: HOLD

Target Price: 7.50

Rewards for all

2012-01-20T10:33:00.003+08:00

Stock Name: DIGI
Company Name: DIGI.COM BHD

Research House: MIDF

Price Call: BUY

Target Price: 4.35

DiGi surges to record, fair value raised

2012-01-20T10:33:00.001+08:00

Stock Name: DIGI
Company Name: DIGI.COM BHD

Research House: RHB

Price Call: BUY

Target Price: 4.40

DiGi.Com Bhd, Malaysia's third- largest mobile-phone operator by market value, jumped to a record in Kuala Lumpur trading after fourth-quarter net income grew 19 per cent to RM394.2 million.

The stock gained 1.3 per cent to RM3.93 at 9:03 a.m. local time.

DiGi's fair value raised to RM4.40 from RM4.10, analyst Lim Tee Yang writes in report. -- Bloomberg

RHBInvest Research Highlights 19th January 2012

2012-01-19T22:36:00.007+08:00

Stock Name: UNISEM
Company Name: UNISEM (M) BHD

Research House: RHB

Price Call: HOLD

Target Price: 1.22

Stock Name: MPI
Company Name: MALAYSIAN PACIFIC INDUSTRIES

Research House: RHB

Price Call: HOLD

Target Price: 2.79

Stock Name: NOTION
Company Name: NOTION VTEC BHD

Research House: RHB

Price Call: SELL

Target Price: 1.69

Stock Name: DAYANG
Company Name: DAYANG ENTERPRISE HOLDINGS BHD

Research House: RHB

Price Call: BUY

Target Price: 2.07

Stock Name: QCAPITA
Company Name: QUILL CAPITA TRUST

Research House: RHB

Price Call: HOLD

Target Price: 1.27

19th January 2012

Top Story

Semiconductor ' Seeing the first crack of dawn Neutral (Upgraded)

Sector Update

Unisem ' Fair value raised to RM1.22 Market Perform (Upgraded)

MPI ' Fair value raised to RM2.79 Market Perform (Upgraded)

Notion ' Fair value raised to RM1.69 Underperform

- Yesterday, Linear Technology (US based IC design company) gave an upbeat outlook for the industry. This would be the third positive guidance after Broadcom and ChipMOS, and indicates a more positive tone for the industry after a parade of negative guidance last month.

- We have already factored in a weak 1Q12 for local packaging players, as there is still lack of order visibility, but we believe the industry may be on track for some recovery in 2Q12, and stronger recovery in 2H12.

- We believe the demand weakness for chips has already been priced in. Thus, we are raising our benchmark forward target P/BV from 0.6x to 0.8x for the semiconductor players. We upgrade Unisem and MPI to Market Perform (from underperform).

Corporate Highlights

Dayang ' Delivery of Dayang Topaz and extension to Dayang Zamrud's contract Outperform

News Update

- Dayang announced that it had it had taken delivery of its new workboat, Dayang Topaz yesterday. On another note the company also received a letter of award from Brunei Shell Petroleum Co on 16 Jan, extending its contract for another workboat Dayang Zamrud from 1 Mar 2012 to Oct 2016.

- We are positive on the new delivery as it bumps up the company's assets. The extension of the contract is also another positive, as it indicates that the company has performed well thus far. This will enhance its track record in Brunei and its chances for future contracts from the country. Maintain fair value of RM2.07/share and Outperform call on stock.

- Related story: Oil & Gas Sector Update - Resilient Despite Macroeconomic Uncertainties (12 Dec 2011)

Quill Capita ' Achieves a target DPU of 8.3 sen for FY11 Market Perform

Results Note

- Quill Capita's 4QFY12/11 realised net income (-14.6%, -0.6%) came in within expectations. Net property income declined mainly due to higher property repair costs incurred in 4QFY12/11. On a full-year basis, however, QC's net profit grew by 5.4% yoy. A final DPU of 4.3 sen was declared bringing total DPU for the year to 8.3 sen (FY10: 8.03 sen), in line with our estimate.

- One of QC's tenants has already signed a letter for a two-year renewal on its lease contract in Jan 2012. As this tenant occupies about 37% of the total NLA due to expire in FY12, the total leases up for renewal in 2012 is now reduced to 24% of total NLA (from 39%).

- Overall, we lift our FY12-13 EPU estimates by 0.5-2.2%. Fair value unchanged at RM1.27.

- Related story: Property ' MREITs Sector Update: A Defensive Pick for Property Exposure (5 Jan 2012)

Macro

Inflation ' Slowed To 3.0% YoY In December, As Price Pressure Eased

Economic Highlights (published 19 Jan 2012)

- The headline inflation rate slowed to 3.0% yoy in Dec, the lowest in eight months, after inching lower to +3.3% in Nov, mainly due to a moderation in the core inflation rate, on the back of easing price pressures, while food & non-alcoholic beverage prices held stable during the month.

- Going forward, we believe inflation has peaked but will likely remain sticky downward in the immediate term. As a result, we expect inflation to moderate to an average of 2.8% in 2012, from +3.2% in 2011.

- Although BNM has shifted its focus from inflation to growth, pressure for it to ease monetary policy has reduced significantly of late. However, we believe there is room for BNM to cut OPR by 25-50 basis points in 1H 2012, should global economic conditions take a turn for the worse.

HLIB Research 19 Jan 2011 (Lafarge; Economics; Traders Brief)

2012-01-19T22:36:00.005+08:00

Stock Name: LMCEMNT
Company Name: LAFARGE MALAYAN CEMENT BHD

Research House: HLG

Price Call: HOLD

Target Price: 7.11

Lafarge (M) Cement (Hold; TP: RM7.11)

Largest Beneficiary from ETP

'''' Our investment highlights for Lafarge are:

1.'' Our favourable outlook on the construction sector, and cement sector is the major direct beneficiary from the construction sector;

2.'' As the largest player in Malaysia, Lafarge will be the largest beneficiary from ETP implementation; and

3.'' Strong balance sheet.

'''' We are projecting Lafarge's net profit in 2012-13 to rise by 32.7% and 10.8% to RM366.2m and RM405.7m from a projected net profit of RM276.0m in 2011.

'''' We are initiating coverage on Lafarge with a HOLD recommendation and TP of RM7.11 based on 16.5x 2012 EPS of 43.1 sen.

December Inflation Report

'''' CPI growth eased further to 3.0% yoy in Dec 2011 (Nov: +3.3% yoy), slightly below the consensus estimate of 3.1%, due mainly to lapse of fuel price hike effected a year ago. Accordingly, price increase of the transport category eased sharply to 1.9% yoy (Nov: +3.9% yoy).

'''' The lapse of fuel price hike contributed to a 0.3ppt reduction in the CPI growth. December inflation rate would have remained at 3.3% yoy if Pemandu had continued with its subsidy removal in Dec 2011.

'''' Stable mom CPI growth of 0.1% and easing of services inflation (3.1% yoy; Nov: 3.2% yoy) provided a relief that price pressure on the ground has begun to stabilise.

'''' We now lower our inflation forecast for 2012 to 2.7% from earlier forecast of 3.0% as Pemandu did not perform any subsidy removal for Dec 2011 as anticipated.

'''' We expect BNM to keep the OPR at 3.00% until end-2012 given the resilient economic growth with sticky inflation.

Holding well above the key 200-d SMA support''

'''' We reiterate that as long as KLCI continues to remain its posture above the crucial 200-d SMA (now at 1502), the benchmark index is still likely to gradually refill the huge gap of 1529-1546 resistance recorded on 5 Aug 11, probably as early as next week. Ahead of the CNY holidays next week, we expect more sideways consolidation above the 200-day SMA. Breaking the key 200-d SMA will drag index lower to 30-d SMA (1496) and 50-d SMA (1484) levels.

Medium to long term positive after recent consolidation

'''' Following the breakout above the downtrend line formed since 2002 coupled with improving technical readings on the monthly chart, BOXPAK is expected to rally further towards the 50% FR (at RM2.36) and 38.2% FR (RM2.65), which is also the 52-wk high. A breakout above RM2.65 will drive prices higher to a more formidable resistance near RM3.00.

'''' We believe BOXPAK could find its floor soon amid signs of bottoming up on its hourly chart and share prices also retraced back to below the 50% FR (daily chart). Immediate supports are RM2.06 (61.8% FR-daily chart) and RM2.00 (monthly mid Bollinger band). Cut loss below RM2.00.

Pavilion REIT (Hold): A Malaysia retail icon

2012-01-19T22:36:00.003+08:00

Stock Name: PAVREIT
Company Name: PAVILION REAL ESTATE INV TRUST

Research House: MAYBANK

Price Call: HOLD

Target Price: 1.10

A class of its own. Pavilion REIT's (PavREIT) key attraction lies in its asset portfolio and the jewel in its crown, Pavilion Kuala Lumpur (KL) Mall. Strategically located in the heart of Kuala Lumpur's prime tourist and shopping district, this mall caters predominantly to the upper middle to high income group, and is one of only 4 prime retail malls in the country. We initiate coverage on PavREIT with a Hold rating and RM1.10 DCF-based target price. It currently trades at a 5.5% yield.

Maybank research (19 January 2012)

Click here for full report

Quill Capita Trust (Hold): Growing organically

2012-01-19T22:36:00.001+08:00

Stock Name: QCAPITA
Company Name: QUILL CAPITA TRUST

Research House: MAYBANK

Price Call: HOLD

Target Price: 1.10

Defensive but not exciting yet. QCT's 2011 recurring net profit of RM34.3m (+5.4% YoY) was within our expectations. FY12 dividend yield forecast of 7.8% is above the industry average of 6.8%, but we see limited upside due to concerns on oversupply in the office market. Hold maintained, with an unchanged DCF-based TP of RM1.10.

Maybank research (19 January 2012)

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Proposes 10% Private Placement

2012-01-19T14:04:00.000+08:00

Stock Name: AMEDIA
Company Name: ASIA MEDIA GROUP BERHAD

Research House: TA

Price Call: BUY

Target Price: 0.41

Time to play catch up

2012-01-19T11:03:00.000+08:00

Stock Name: WCT
Company Name: WCT BHD

Research House: ECMLIBRA

Price Call: BUY

Target Price: 3.02

4QFY11 net profit likely to be lower by 7% qoq

2012-01-19T10:33:00.003+08:00

Stock Name: BURSA
Company Name: BURSA MALAYSIA BHD

Research House: MIDF

Price Call: HOLD

Target Price: 6.20

Performs According to Expectations

2012-01-19T10:33:00.002+08:00

Stock Name: AJIYA
Company Name: AJIYA BHD

Research House: OSK

Price Call: HOLD

Target Price: 1.94

RM20m Investment on International School

2012-01-19T10:33:00.001+08:00

Stock Name: HELP
Company Name: HELP INTERNATIONAL CORPORATION

Research House: OSK

Price Call: HOLD

Target Price: 1.63

Spent RM3.1mil on NY lobbying in 2011

2012-01-19T10:33:00.000+08:00

Stock Name: GENM
Company Name: GENTING MALAYSIA BERHAD

Research House: AMMB

Price Call: BUY

Target Price: 4.30

Tenaga Nasional (Buy): 1QFY12: Above expectations

2012-01-18T22:36:00.007+08:00

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD

Research House: MAYBANK

Price Call: BUY

Target Price: 6.90

Finally, some good luck. Tenaga received some well-deserved good luck which helped turn 1QFY12 operationally profitable. It has received higher natural gas supply, and generated more power from its hydroelectric dams due to higher water levels courtesy of the monsoon rains. It has also received RM1.0b of its cost-sharing payments and will likely receive the balance RM1.0b by the end of 2QFY12. Maintain Buy, with an unchanged target price of RM6.90 pegged to 13x FY12 PER.

Maybank research (18 January 2012)

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HLIB Research 18 January 2012 (Auto; IOI; TNB; Traders Brief)

2012-01-18T22:36:00.005+08:00

Stock Name: DRBHCOM
Company Name: DRB-HICOM BHD

Research House: HLG

Price Call: BUY

Target Price: 2.90

Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD

Research House: HLG

Price Call: BUY

Target Price: 5.10

Stock Name: IOICORP
Company Name: IOI CORPORATION BHD

Research House: HLG

Price Call: HOLD

Target Price: 4.85

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD

Research House: HLG

Price Call: HOLD

Target Price: 6.00

Automotive (Overweight)

Affected by Thailand Flood

'''' MAA released Dec 11 data showing TIV suffered from a significant drop of 12.9% yoy, leading to 2011 TIV dropping by 0.9% yoy vs. our forecast of 0.3% yoy decline.

'''' We expect 2012 TIV to grow 6% yoy, mainly due to sustainable GDP growth (underpinned by the 2012 Budget and ETP implementation) and supply chain recovery.

'''' For 2011, Perodua (UMW and MBM), Nissan (TCM) and Honda (DRB) sales was within our expectations, while Toyota (UMW) and Proton was below our expectations.

'''' Other marques (i.e. Hyundai, Kia, Peugeot, Chevrolet, VW etc) had been gaining market share, with records of double digit growth since beginning 2011, indicating growing competitive environments going forward.

'''' We expect continued strong demand for hybrid cars in 2012, due to lowered price (tax free) as well as its fuel economy advantage.

'''' TOP Picks: BUY on DRB (TP: RM2.90) and TCM (TP: RM5.10).

IOI Corporation (Hold; TP: RM4.85)

More details on Singapore land deal

'''' IOI's 99.8% subsidiary Multi Wealth (Singapore) Pte Ltd won its bid for a parcel of 99-year leasehold land in Jalan Lempeng, off Clementi Avenue 6, Singapore for S$408m.

'''' Assuming land cost to account for 40% of the total GDV and EBIT margin of 20%, IOI will incur a total development cost of S$647.6m or RM1,567.2m, which would in turn raise IOI's net debt and net gearing from RM2.3bn and 0.2x (as at 30 Sep 2011) to RM3.98bn and 0.3x respectively.

'''' Based on our estimates, the project will enhance IOI's earnings by RM79.7m p.a. from FY13 onwards (or 3.4% of our projected FY13 net profit), assuming: (1) Land cost to account for 40% of the total GDV; (2) 20% setback; (3) EBIT margin of 20%; (4) Earnings from this project to contribute equally over 3 years starting from FY06/13; (5) Borrowing cost of 6% p.a.; and (6) Tax rate of 17%.''

'''' We are neutral on the latest development, as the Singapore government's measures will cool demand for property market there, hence IOI's returns on its investments.

'''' Net profit forecasts, SOP-derived TP of RM4.85 as well as Hold recommendation maintained for now.

Tenaga (Hold)

1Q12 Earnings Return to Black

'''' Within estimates - Reported 1Q12 core earnings of RM184m, as compared to HLIB's core earnings RM1.9bn (have included RM1.0bn compensation for FY08/12 higher fuel cost), but lower than consensus.

'''' 1Q12 earnings return to black on the back of lower power demand QoQ, higher hydropower generation and improved supply of gas.

'''' TNB is expected to continue incur high fuel cost expenses (estimated ~RM2.5bn), and submit claims for compensation for the period of Nov 11 - Sep 12.

'''' Gas supply issue will only be resolved with the commencement of Melaka regassification plant in Sep 2012. However, the issue of pricing the gas to TNB is another concern as TNB may need to absorb the higher gas prices and unable to pass through to consumers.

'''' Maintain HOLD on TNB with unchanged TP of RM6.00.

KLCI: To consolidate above the crucial 200-d SMA

'''' Ahead of the CNY holidays next week, investors should keep an eye on the 200-day SMA. A significant close below 1502 on rising volume would likely signal the resumption of the longer term bear market. Breaking the key 200-d SMA will drag index lower to 30-d SMA (1495), 50-d SMA (1482) and lower Bollinger band (1476) levels. Resistance zones are 1529-1546.

HLIB Research 18 January 2012 (Axiata)

2012-01-18T22:36:00.003+08:00

Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD

Research House: HLG

Price Call: HOLD

Target Price: 4.92

Axiata (HOLD)

Bigger Footprint in India

'''' Bloomberg reported that Axiata is in talks to buy a stake in India's Tikona Digital Networks Ltd.

'' A deal may involve Tikona selling new shares to Axiata.

'' Tikona hold licenses to offer wireless broadband Internet services in regions including Gujarat, Himachal Pradesh and Rajasthan.

'''' Tikona spent more than RM610.54m for 4G spectrum.

'' Comments: We are taking a neutral stand on this news.'' Positively, this acquisition will allow Axiata to expand its market share and sustain growth riding on the data boom in India. On the downside, Tikona will be competing head-to-head with Idea Cellular (which Axiata also owns a stake) as there are overlaps of their 4G and 3G service areas.

'' Currently, Tikona has about 1m subscribers across the country.

'' Analysys Mason predicts that 3G and 4G technologies will account for a respective 57.1% and 10.75% of the nation's mobile subscribers by 2020.

'' Axiata may adopt network sharing strategy in India to rollout broadband coverage at a faster pace and cost effectively. It was reported that Reliance Industries, who has acquired pan-India spectrum to operate Broadband Wireless Access (BWA) across India, is seeking for partnerships for high-speed data services it plans to start this year.

'' We reiterate our HOLD call with unchanged target price of RM4.92.

RHBInvest Research Highlights 18th January 2012

2012-01-18T22:36:00.001+08:00

Stock Name: IJM
Company Name: IJM CORPORATION BHD

Research House: RHB

Price Call: SELL

Target Price: 4.48

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD

Research House: RHB

Price Call: HOLD

Target Price: 6.50

Stock Name: AXREIT
Company Name: AXIS REITS

Research House: RHB

Price Call: HOLD

Target Price: 2.72

Stock Name: FAJAR
Company Name: FAJARBARU BUILDER GRP BHD

Research House: RHB

Price Call: HOLD

Target Price: 0.86

Stock Name: MBMR
Company Name: MBM RESOURCES BHD

Research House: RHB

Price Call: BUY

Target Price: 3.90

Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD

Research House: RHB

Price Call: HOLD

Target Price: 4.40

Stock Name: UMW
Company Name: UMW HOLDINGS BHD

Research House: RHB

Price Call: SELL

Target Price: 6.20

Stock Name: APM
Company Name: APM AUTOMOTIVE HOLDINGS BHD

Research House: RHB

Price Call: HOLD

Target Price: 4.30

Stock Name: PROTON
Company Name: PROTON HOLDINGS BHD

Research House: RHB

Price Call: HOLD

Target Price: 5.50

Stock Name: DRBHCOM
Company Name: DRB-HICOM BHD

Research House: RHB

Price Call: HOLD

Target Price: 2.20

18th January 2012

Top Story

IJM Corp ' Kajang- Seremban Highway not living up a cash cow Underperform

Company Update

- FY03/12-14 net profit forecasts are trimmed by 3% p.a., having imputed share of RM20m net loss p.a. from Lekas. Fair value reduced by 2% from RM4.59 to RM4.48. Maintain Underperform.

- Related story : IJM Corp Results/Briefing Note ' 1HFY03/12 Core Net Profit Grows 11% YoY, Slight Delays In WCE and NPE Extension (29 Nov 2011)

Sector Update

Motor ' A better 2012 Underweight

Sector Update

MBM Resources ' Fair value RM3.90 Outperform

Tan Chong ' Fair value RM4.40 Market Perform

UMW ' Fair value RM6.20 Underperform

APM ' Fair value RM4.30 Market Perform

Proton ' Fair value RM5.50 Market Perform

DRB-HICOM ' Fair value RM2.20 Market Perform

- MAA (Malaysian Automotive Association) guidance is for Jan 2012 vehicle sales to improve slightly given ongoing promotional campaigns and the seasonal rush to deliver new vehicles ahead of the Lunar New Year holidays. We are revising our 2012 TIV forecast to 612,000 units (+2% yoy) from 607,000 units on the back of RHBRI's 3.6% GDP growth forecast and 5.3% rise in consumption spending.

- Related story: Motor Sector Update ' Seasonal Slump And Floods Hit Sales (20 Dec 2011)

Corporate Highlights

TNB ' On recovery path Market Perform

Results / Briefing Note

- FY12 core earnings forecast raised by 22% after imputing an additional 50 mmscfd of gas to be received by TNB beginning Mar. Fair value revised to RM6.50 (from RM6.15) based on unchanged target CY12 PER of 15x. Maintain Market Perform.

- Related story: TNB Results Preview ' Slight improvement in 1Q (16 Jan 2012)

Axis REIT ' More asset acquisitions in the pipeline Market Perform

Briefing Note

- Axis REIT is currently looking at 11 potential assets totalling RM545m that could be injected into the REIT over the next 2 years, with half targeted to be acquired by end-2012.

- Our EPS forecasts have been revised slightly by 0.8-1.1% for FY12-14 after we factor in lower interest expenses. We raise our fair value slightly to RM2.72 (from Rm2.70) after revising our FY12 DPU estimates. Maintain market Perform.

- Related stories: Axis REIT 4Q11 Results Note ' Total DPU of 17.2 sen for FY11 (17 Jan 2011); Axis REIT News Update ' Acquisition in Bayan Lepas (27 Oct 2011); Axis REIT News Update ' New Acquisition in Penang (29 Sep 2011)

Fajarbaru ' Completes private placement of 15m new shares at RM0.90/share Market Perform

Company Update

- Fajarbaru has completed a private placement of 15m new shares at RM0.90 per share.

- The RM13.5m gross proceeds from the exercise will increase its net cash of RM24.2m as at 31

- Fair value is reduced by 5% from RM0.91 to RM0.86. Maintain Market Perform.

- Related story: Fajarbaru News Update ' Lands RM62m Sewerage Treatment Plant Job In Selangor (22 Dec 2011)

MIDF Equity Beat (Tenaga Nasional Berhad) 18 JANUARY 2012

2012-01-18T17:35:00.001+08:00

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD

Research House: MIDF

Price Call: BUY

Target Price: 6.70

IOI advances, "hold" rating stays

2012-01-18T16:34:00.003+08:00

Stock Name: IOICORP
Company Name: IOI CORPORATION BHD

Research House: HWANGDBS

Price Call: HOLD

Target Price: 4.90

IOI Corporation Bhd rose one sen or 0.19 per cent to RM5.34 as at 11.20am today as market players are bullish on its property business.

IOI announced yesterday its 99.8 per cent-owned indirect subsidiary Multi Wealth (Singapore) Ltd has won a bid for a parcel of land in the island republic for S$408 million (RM995.5 million).

Measuring about 24,417.6 sq metres (2.4ha), the land, in Jalan Lempeng, Clementi Avenue 6, is intended for condominium development.

HwangDBS Vickers Research said it was neutral on the deal as the aggregate impact over five years would be less than 10 per cent of IOI's forecast pre-tax profits (approximately RM2.8 to RM3.4 billion per annum).

"We believe the estimated S$709 million (approximately RM1,730 million) total investment cost is better spent on its higher-margin plantation operations," it said in a research note today.
The research house maintains a "hold" rating on IOI. -- Bernama

HwangDBS keeps "buy" call on TNB

2012-01-18T16:34:00.001+08:00

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD

Research House: HWANGDBS

Price Call: BUY

Target Price: 7.00

Tenaga Nasional Bhd (TNB) was among the top losers, losing 13 sen or 2.09 per cent to RM6.10 as at 10.30am today, as investors were concerned over the power utility giant's financial performance.

TNB reported yesterday RM224.7 million net loss for the first quarter ended November 2011 from RM716.5 million net profit in the same period in 2010 due to persistent higher use of oil and distillates.

However, the power company was confident to return to profitability in the second quarter ending February 2012 as it will receive RM2 billion in compensation from the government and Petronas.

HwangDBS Vickers Research said TNB could expect stronger earnings over the next few quarters with the recognition of gas compensation and gradual increase in gas supply to 1,150 million standard cubic feet per day (mmscfd).

The research house maintained "buy" call on TNB for strong earnings recovery.

"We expect TNB's earnings to recover strongly in the 2012 financial year following the RM2 billion gas compensation and increase in gas supply to 1,150 mmscfd," it said in a research note.

It said the gas shortage issue should be resolved following completion of Petronas Gas Bhd's new regas plant in July.

TNB received RM1 billion compensation from the government due to gas shortages and Petronas will pay the balance RM1 billion in the next few months.

Besides the RM2 billion claim, TNB will continue to ask for compensation as the current gas supply still falls below the agreed supply of 1,350 mmscfd.

HwangDBS Research said the gas compensation approval demonstrated TNB's ability to pass on costs increases through the "cost pass through" mechanism. -- BERNAMA

A Second Passage In India?

2012-01-18T00:06:00.004+08:00

Stock Name: AXIATA
Company Name: AXIATA GROUP BERHAD

Research House: OSK

Price Call: BUY

Target Price: 5.60

Uncertainty Remains

2012-01-18T00:06:00.003+08:00

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD

Research House: OSK

Price Call: HOLD

Target Price: 6.36

Significantly higher loan growth target for FY12

2012-01-18T00:06:00.002+08:00

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: AMMB

Price Call: BUY

Target Price: 2.70

Workboat Contract Extension

2012-01-18T00:06:00.001+08:00

Stock Name: DAYANG
Company Name: DAYANG ENTERPRISE HOLDINGS BHD

Research House: OSK

Price Call: BUY

Target Price: 2.70

Bags a RM14m Contract

2012-01-18T00:06:00.000+08:00

Stock Name: PRESBHD
Company Name: PRESTARIANG BERHAD

Research House: OSK

Price Call: BUY

Target Price: 0.96

HLIB Research 17 Jan 2012 (Automotive; Traders Brief)

2012-01-17T22:36:00.001+08:00

Stock Name: DRBHCOM
Company Name: DRB-HICOM BHD

Research House: HLG

Price Call: BUY

Target Price: 2.90

Automotive (Overweight)

A Key Regional Auto Player to be Born

'''' DRB to acquire Khazanah's 42.7% stake in Proton, triggering MGO at RM5.50. Total cost estimated at RM3.02bn.

'''' Post the acquisition in FY03/13: 1) DRB to realize RM2.4bn one-off gains of negative goodwill; 2) net gearing increase to 45.3%; and 3) NTA/share increase to RM3.13.

'''' DRB become key regional automotive player with own Proton marque, and exporting VW to regional markets.

'''' DRB not expected to inject cash/capex into Proton in the near term.

'''' DRB to leverage on its strong partnerships with foreign automotive players, in restructuring Proton to improve operational efficiency and products offering.

'''' Maintain BUY on DRB (unchanged TP of RM2.90) and downgrade Proton to Hold (lower TP of RM5.50).

KLCI: Crucial 200-d SMA to curb more selldown

'''' Although selling pressures are expected to continue today, it is likely to be cushioned by the overnight rebound in the European markets as investors re-focus on measures taken by officials to toughen budget laws and make Greek debt more sustainable deserve far more attention than these rating changes, which as usual are lagging fundamental developments.

'''' As long as KLCI continues to remain its posture above the 200-d SMA (now at 1501), KLCI is still likely to slowly fill the huge gap of 1529-1546 recorded on 5 Aug 11.

DRBHCOM: Short term positive after recent breakout

'''' Following the breakout above the downtrend line channel and 200-d SMA coupled with improving technical readings, DRBHCOM is expected to rally further towards the 50% FR (at RM2.45) and RM2.62 (weekly upper Bollinger band).

'''' A breakout above RM2.62 will drive prices higher to a more formidable resistance near RM2.85 (38.2% FR). Immediate supports are situated near daily mid Bollinger band (RM2.05) and 100-d SMA (RM2.02), followed by daily lower Bollinger band of M1.98.

'''' Cut loss below RM1.98.

Enhancing future profitability

2012-01-17T17:35:00.002+08:00

Stock Name: AIRASIA
Company Name: AIRASIA BHD

Research House: MIDF

Price Call: TRADING BUY

Target Price: 4.20

First LNG import in Aug2012

2012-01-17T17:35:00.001+08:00

Stock Name: PETGAS
Company Name: PETRONAS GAS BHD

Research House: MIDF

Price Call: BUY

Target Price: 16.50

Win-win solution for all?

2012-01-17T17:35:00.000+08:00

Stock Name: PROTON
Company Name: PROTON HOLDINGS BHD

Research House: MIDF

Price Call: HOLD

Target Price: 5.50

Axis REIT (Buy): Minor timing setback in the results

2012-01-17T17:34:00.001+08:00

Stock Name: AXREIT
Company Name: AXIS REITS

Research House: MAYBANK

Price Call: BUY

Target Price: 2.75

Maintain Buy. AXRB's 2011 results were below our expectations at 92% of our forecast but within consensus estimates. The shortfall was mainly due to the delays in its acquisitions of the DHL and industrial buildings in Seberang Perai, which is a mere timing issue. 2011 gross DPU of 17.2sen (6.4% yield) was in line. We continue to like AXRB's hands-on management and its proven track record in growing its dividend income stream. AXRB remains our top pick for the sector.

Maybank research (17 January 2012)

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Puts in Top Bid For Singapore Land

2012-01-17T03:02:00.000+08:00

Stock Name: IOICORP
Company Name: IOI CORPORATION BHD

Research House: OSK

Price Call: SELL

Target Price: 5.05

Secures premium AHTS charter from Petrobras

2012-01-17T00:06:00.001+08:00

Stock Name: ARMADA
Company Name: BUMI ARMADA BERHAD

Research House: AMMB

Price Call: BUY

Target Price: 5.05

Easing pressure on capital, and dividend

2012-01-17T00:06:00.000+08:00

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: AMMB

Price Call: HOLD

Target Price: 15.40

Awaiting An All-Clear Sign

2012-01-16T23:06:00.009+08:00

Stock Name: ENG
Company Name: ENG TEKNOLOGI HOLDINGS BHD

Research House: OSK

Price Call: HOLD

Target Price: 1.52

Making Good Progress

2012-01-16T23:06:00.007+08:00

Stock Name: PANTECH
Company Name: PANTECH GROUP HOLDINGS BHD

Research House: OSK

Price Call: TRADING BUY

Target Price: 0.57

Plantation undervalued, more so than Jaya Tiasa's

2012-01-16T23:06:00.005+08:00

Stock Name: TAANN
Company Name: TA ANN HOLDINGS BHD

Research House: AMMB

Price Call: BUY

Target Price: 7.60

Unleashing oil palm's potential

2012-01-16T23:06:00.003+08:00

Stock Name: JTIASA
Company Name: JAYA TIASA HOLDINGS BHD

Research House: AMMB

Price Call: BUY

Target Price: 8.37

Close to sealing the deal?

2012-01-16T23:06:00.001+08:00

Stock Name: PROTON
Company Name: PROTON HOLDINGS BHD

Research House: AMMB

Price Call: TRADING BUY

Target Price: 5.60

HLIB Research 16 January 2012 (Property; Traders Brief)

2012-01-16T09:33:00.002+08:00

Stock Name: MAHSING
Company Name: MAH SING GROUP BHD

Research House: HLG

Price Call: BUY

Target Price: 2.37

Property (Overweight)

An exciting year ahead

'''' In our view, the property sector is now at a crossroads, with dichotomy emerging between the stagnating mid/high end segment vs. the vibrant and emerging affordable segment.

'''' We remain positive on long term outlook for property prices, but see little upside in prices for the mid/high end segment.'' Instead, buyers and developers will start gravitating towards the affordable segment.

'''' For 2012, we expect the property sector to be driven by three main catalysts: (1) Affordable housing, (2) M&A excitement, and (3) Iskandar Malaysia.

'''' Our top pick remains Mah Sing (BUY, TP RM2.37) for a combination of good liquidity, decent market cap (RM1.6bn) and attractive valuations (8.1x FY12E P/E and 25% upside).

KLCI: Sideways consolidation ahead of the CNY holidays

'''' Despite short term consolidation due to CNY holidays, as long as KLCI continues to remain its posture above the 200-d SMA and mid Bollinger band supports (now at 1501), KLCI is still likely to slowly filling the huge gap between 1529-1546 which was recorded on 5 Aug 11.

DIGISTA: Short term positive after recent breakout

'''' After breaking out from the long term downtrend channel last Friday, DIGISTA is ripe for a stronger rebound towards the RM0.50 psychological level soon, supported by bullish technical indicators. Once this level is taken out, the next resistance targets are RM0.535 (52-wk high), RM0.57 (123.6% FR) and RM0.60 (138.2% FR).

'''' As long as prices stay above the RM0.43 level (100-d & 200-d SMAs and lower Bollinger band supports), the bullish undertone should continue. Cut loss below RM0.41 (23.8% FR).

IOI Corporation (Hold): Wins land auction in Singapore?

2012-01-16T09:33:00.001+08:00

Stock Name: IOICORP
Company Name: IOI CORPORATION BHD

Research House: MAYBANK

Price Call: HOLD

Target Price: 5.14

Cautious on property outlook; maintain Hold. IOI's subsidiary MultiWealth (Singapore) Pte. Ltd. has emerged as the highest bidder for a parcel of residential land at Jalan Lempeng for SGD408m (or SGD554psf ppr), according to Singapore's Housing & Development Board (HDB). We are Neutral on this win as we are generally cautious on the outlook for residential property in Singapore in the near term. Pending an announcement from IOI on its winning bid and development plan, we retain our Hold call and TP of RM5.14 (based on 16x FY13).

Maybank research (16 January 2012)

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Dialog Group (Buy): A continuous growth story into 2012

2012-01-16T09:33:00.000+08:00

Stock Name: DIALOG
Company Name: DIALOG GROUP BHD

Research House: MAYBANK

Price Call: BUY

Target Price: 3.05

Maintain Buy. We have raised FY12-14F earnings estimates by 8-20% on higher EPCC revenue (+RM400-RM900m p.a.). Our 3-year net profit CAGR of 21% now reflects Dialog's 20-30% growth guidance. Our sum-of-parts based target price has however been lowered to RM3.05 (from RM3.35) after adjusting for the 2-for-10 rights issue (excluding warrants). Despite trading at 25x 2013 earnings (which incorporated just partial earnings potential), we continue to rate Dialog a Buy on expectations of continuous major project wins in 2012.

Maybank research (16 January 2012)

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RHBInvest Research Highlights 13th January 2012

2012-01-13T16:34:00.003+08:00

Stock Name: CSCSTEL
Company Name: CSC STEEL HOLDINGS BERHAD

Research House: RHB

Price Call: BUY

Target Price: 1.41

Stock Name: MEDIAC
Company Name: MEDIA CHINESE INTERNATIONAL LT

Research House: RHB

Price Call: SELL

Target Price: 1.00

Stock Name: SAPCRES
Company Name: SAPURACREST PETROLEUM BHD

Research House: RHB

Price Call: BUY

Target Price: 4.50

13th January 2012

Top Story

CSC Steel ' Profitability remains a challenge, ' Trading Buy (Upgraded)

Visit Note

- We estimate CSC Steel is likely to record a net loss of RM10-15m in the upcoming 4Q11 results due to narrowing margins as well as a write-down in inventory value.

- CSC Steel has a huge cash reserve of RM213.5m, or about 56sen/share (as at 30 Sep 2011). At RM1.41, it would only cost the controlling shareholder about RM295m to buy out all minority shareholders, and this amount could be substantially funded with CSC Steel's cash reserve.

Sector Update

Media ' Expect adex growth to moderate in 2012 Underweight

Sector Update

- As the pace of overall adex growth continues to moderate due to weak global economic conditions, we reiterate a slowdown in adex growth to 3.6% in 2012 from 9% projected for 2011.

- Elections in 2012 will have a positive though not significant impact on adex.

- Due to its recent share price appreciation, we downgrade MCIL to Underperform, while maintaining a fair value of RM1.00. Maintain Underweight on the sector due to lack of catalysts.

- Related story : Media Sector Update ' Nov Sees Weakest Adex Growth So Far (22 Dec 2011)

Corporate Highlights

SapuraCrest ' New subsea construction contract Outperform

News Update

- Yesterday, the company announced that it had entered into a contract with IHC Offshore and Marine B.V. for the construction of two 550-tonne-pipelay-support-vessels (PLSV) at an undisclosed fixed lump sum. The two vessels are expected to be completed and delivered by May and Aug of 2014 respectively and will be utilised specifically for the Petrobras contract, which it won in Nov-11. Maintain fair value of RM4.50/share and Outperform call on stock.

- Related story: News Update - Buying Two New Pipelay Barges (23 Sep 2011) & News Update- Taking Home A Brazilian Win (2 Nov 2011)

HLIB Research 13 Jan 2012 (Telecommunication; MBMR; Traders Brief)

2012-01-13T16:34:00.001+08:00

Stock Name: TIMECOM
Company Name: TIME DOTCOM BHD

Research House: HLG

Price Call: BUY

Target Price: 0.85

Stock Name: MBMR
Company Name: MBM RESOURCES BHD

Research House: HLG

Price Call: HOLD

Target Price: 3.38

Telco (NEUTRAL)

2012 Outlook: Monetizing the data

'' The industry as a whole will undergo moderate growth (forecasted to be mid-single digit) in 2012 supported by resilient domestic consumerism as a result from ETP and "rakyat" friendly budget.

'' Voice revenue will continue to trend downward in 2012 while data revenue taking the limelight, expecting its contribution towards 50% of overall revenue.

'' As both Huawei and ZTE have successfully secured a very extensive footprint in Malaysian telcos, we opine that they will have a stronger bargaining power and going forward, will minimize their reliance on pricing strategy to win bids. Hence, we believe that telcos might be facing more difficulties in their cost saving initiatives.

'' Continuing the momentum in 2011, we believe "co-opetition" will be the order for the year in the telco industry as players seek strategic partnerships to reduce infrastructure cost, strengthening margins and cross-selling of products.

'' Telcos are constantly under the increasing threat of over-the-top (OTT) players substituting their products and services including voice, messaging, video streaming, gaming and mobile payment. Moving forward, telcos are expected to actively exploring partnership opportunities with OTT players harnessing a win-win business model rather than being a dumb pipe.

'' Prefer fixed-line players over mobile operators for their high operating leverage, new sources of revenue stemming from agreements with mobile operators and increasing demand for wholesale which could help to buffer the new challenges. We re-iterate our BUY call on TIME dotCom (Buy, TP: RM0.85).

'' We also take this opportunity to downgrade DiGi to SELL as the current share price has overshot its fair value for more than 10%.

MBM Resources (Hold)

More Wheels

'' MBMR's 78% owned Oriental Metal Industries (OMI) will invest RM103m for a new alloy wheel manufacturing plant in Rawang.

'' The plant is expected to complete by 3Q2015 with targeted capacity of producing 1m units of alloy wheels for the regional market. The 1st phase is scheduled for completion by 4Q2012. Upon completion, MBMR expects OMI to generate ~RM150m revenue.

'' We are positive on the new investment plan, as MBMR will be able to leverage on the expected vehicle sales growth of the regional market.

'' However, we remain skeptical on its ability to find a strong foreign automotive partner, since it does not have track record on vehicle assembling (vs peers) and most foreign automotive cars have already established regional hubs in Thailand and Indonesia.

'' No changes to FY12-13 earnings, as we expect marginal earnings contribution during startup of 1st phase in 2013. Maintain HOLD with TP of RM3.38.

KLCI: Heading towards the 1529-1546 pts gap

'' Technically, trend and momentum indicators remain supportive for further upside as KLCI continues to leverage on its strong supports near 10-d SMA (now at 1517) and 200-day SMA (1502), in an attempt to slowly fill the huge gap between 1529-1546 recorded on 5 Aug 11.

'' Immediate supports are 10-d SMA and 200-d SMA, followed by the uptrend line near 1490 pts.

STI: Short term positive after recent breakout

'' With the recent breakout (from downtrend) and as long as prices stay above the uptrend line support at 2600 pts, the odds favor further upward movement to retest the 30-w SMA (now at 2830) and weekly upper Bollinger band (2887) in the coming weeks. A more formidable resistance is 200-d SMA at 2917.

'' Immediate supports are 30-d SMA (2696), daily mid Bollinger band (2678) and 2608 (lower Bollinger band).

SapuraCrest Petroleum (Buy): Orders 2 pipelay vessels

2012-01-13T16:04:00.011+08:00

Stock Name: SAPCRES
Company Name: SAPURACREST PETROLEUM BHD

Research House: MAYBANK

Price Call: BUY

Target Price: 5.60

Maintain Buy with a RM5.60 TP. SapCrest's rapid expansion of its marine fleet to capitalise on the boom in the installation of pipelines and facilities (IPF) markets is positive, in keeping with its aspiration to be a regional player. This strategy will be rewarding, if executed well. However, contributions will only be realised from FY15. We remain positive on its strong ability to grow and pursue new jobs for medium term growth, and continue to rate SapCrest a Buy.

Maybank research (13 January 2012)

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KNM Group (Sell): Riding through a transition phase

2012-01-13T16:04:00.009+08:00

Stock Name: KNM
Company Name: KNM GROUP BHD

Research House: MAYBANK

Price Call: SELL

Target Price: 0.88

Target price cut to RM0.88 (-19%) following a 10-19% downgrade in FY12-13F earnings forecasts on lower revenue recognition. While margin pressure has abated on improving order flows, we are cautious of KNM's cost management abilities and so retain a conservative stance on our estimates. KNM needs to deliver a consistent set of quarterly results to warrant a re-rating. Sell maintained.

Maybank research (13 January 2012)

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Buy Petronas Gas shares: HwangDBS

2012-01-13T16:04:00.007+08:00

Stock Name: PETGAS
Company Name: PETRONAS GAS BHD

Research House: HWANGDBS

Price Call: BUY

Target Price: 16.90

HwangDBS Vickers Research is maintaining its "buy" call on Petronas Gas Bhd with the target price raised to RM16.90 a share from RM15.50 earlier due to promising outlook in the oil and gas industry.

The research house, also optimistic over the company's strong earnings growth from this year's financial year onwards, said the promising outlook for the industry was supported by new pipelines and regas plants.

It said strong earnings growth would be led by contributions from the Melaka regas plant in FY2012 and the Sabah power plant in 2013, it said in a review of the company, whose shares eased four sen to RM15.40 on Bursa Malaysia at 11.30am today.

Petronas Gas would be the prime beneficiary with the planned new pipelines in Terengganu and new regas plants in Pengerang and Lumut, it said in a statement.

It said the company was a main player in the current volatile oil and gas market and might be rerated with imminent news of project awards. -- Bernama

The railway specialist

2012-01-13T16:04:00.005+08:00

Stock Name: GAMUDA
Company Name: GAMUDA BHD

Research House: MIDF

Price Call: BUY

Target Price: 4.40

Orderbook replenishment set to rise

2012-01-13T16:04:00.003+08:00

Stock Name: MRCB
Company Name: MALAYSIAN RESOURCES CORP

Research House: MIDF

Price Call: BUY

Target Price: 2.41

Coming to You Live in FY12

2012-01-13T16:04:00.001+08:00

Stock Name: AMEDIA
Company Name: ASIA MEDIA GROUP BERHAD

Research House: TA

Price Call: BUY

Target Price: 0.42

Proposal for merger submitted to BNM

2012-01-12T23:06:00.001+08:00

Stock Name: SAPCRES
Company Name: SAPURACREST PETROLEUM BHD

Research House: MIDF

Price Call: BUY

Target Price: 9.20

Proposal for merger submitted to BNM

2012-01-12T17:34:00.005+08:00

Stock Name: RHBCAP
Company Name: RHB CAPITAL BHD

Research House: MIDF

Price Call: BUY

Target Price: 9.20

HLIB Research 12 January 2012 (Gaming; Economics; Traders Brief)

2012-01-12T17:34:00.003+08:00

Stock Name: BJTOTO
Company Name: BERJAYA SPORTS TOTO BHD

Research House: HLG

Price Call: BUY

Target Price: 4.92

Stock Name: GENM
Company Name: GENTING MALAYSIA BERHAD

Research House: HLG

Price Call: HOLD

Target Price: 4.07

Stock Name: GENTING
Company Name: GENTING BHD

Research House: HLG

Price Call: HOLD

Target Price: 11.19

Gaming (Neutral)

What's There in 2012?

'''' Gaming sector is expected to feel positive spillover from consumerism following the announced Malaysia Budget 2012 and potential job and income creation from the implementation of ETP projects.

'''' BToto will be experiencing the full impact from its new game segment, 4D Jackpot with 7.6% growth in FY04/12. For GenM, international operations are the focus now with its latest development in New York and the current passing of the State Senate on the destination resort bill.

'''' GenS will continue to be the main contributor for GenT and with the full expansion in RWS by 2012, better growth is expected to be seen.

'''' No changes made to our forecast as we have earlier imputed all potential earnings in 2012. We are NEUTRAL with the sector. Maintain BUY on BToto (unchanged TP of RM4.92) and HOLD on both GenM (unchanged TP of RM4.07) and GenT (unchanged TP of RM11.19).

Moderation in November Exports

'''' Export growth moderated to 8.0% yoy in Nov (Oct: +15.4% yoy), below the consensus estimate of 11.9% expansion. Import growth, however, picked up to 8.4% yoy (Oct: +4.0% yoy). Trade surplus narrowed to RM9.5bn in Nov (Oct: RM13.3bn).

'''' E&E export growth declined by 3.5% yoy (Oct: -9.0% yoy) which is in tandem with the development in E&E output.

'''' As expected, contribution of palm oil diminished drastically in November. Exports of palm oil slowed sharply to 4.2% yoy (Oct: +54.3% yoy), ending 14 consecutive months of double-digit growth.

'''' The rebound in import growth with intermediate imports rising by 4.6% yoy suggests that manufactured exports could remain stable in the coming months.

'''' We maintain our full year 2011 GDP estimate at 5.1%, factoring in 4Q estimate of 5.0% (unchanged). We also maintain 2012 GDP growth forecast at 4.5%.

'''' We expect BNM to hold the OPR at 3.00% until end-2012 given the resilient economic growth with sticky inflation.

KLCI: Interests in lower liners to sustain momentum

'''' Technically, trend and momentum indicators remain supportive for further upside as KLCI continues to leverage on its strong supports near 10-d SMA (now at 1513) and 200-day SMA (1502), in an attempt to slowly filling the huge gap within 1529-1546 levels dated 5 Aug 11.''

'''' Immediate supports are 10-d SMA and 200-d SMA, followed by the uptrend line near 1490 pts.

''

HSI: Short term positive after recent breakout

'''' In the short term, HSI is poised for greater heights following its recent positive breakout, supported by bullish trend and momentum indicators on its daily and weekly charts.

'''' Immediate supports are 18561 (mid Bollinger band), 18000 and 17951 (lower Bollinger band). Resistance levels are 20338 (weekly upper Bollinger band and downtrend channel), 21078 (50-w SMA) and 21416 (100-w SMA).

RHBInvest Research Highlights 12th January 2012

2012-01-12T17:34:00.001+08:00

Stock Name: SIME
Company Name: SIME DARBY BHD

Research House: RHB

Price Call: BUY

Target Price: 10.65

Stock Name: UMW
Company Name: UMW HOLDINGS BHD

Research House: RHB

Price Call: SELL

Target Price: 6.20

12th January 2012

Top Story

Sime Darby ' Trading at unjustified discount to peers Outperform

Visit Note

- Key takeaways: 1) Conservative CPO production growth targets likely to be surpassed?; 2) Downstream division bleeding but once Indonesian refinery is operational, things should improve; 3) New planting in Liberia behind schedule; 4) Good news in the heavy equipment division in the form of Bucyrus acquisition; 5) Resilient sales in the motor division; and 6) Appealing to the right target market in the property sector.

- We have revised our forecasts by -2.9% to +1.3% for FY12-14. We are maintaining our Malaysian CPO price assumptions at RM3,150/t for FY06/12 and RM2,900/tonne for FY13.

- Post-earnings revision, we have lowered our SOP target price to RM10.40 (from RM10.65). We maintain our Outperform call on the stock. Although earnings growth for Sime may not be too exciting, we believe PE valuations for the stock of 13-13.5x are at an unjustified discount to peers at 15-17x. In addition, with a dividend policy to pay out at least 50% of net earnings, we believe Sime's net yields of 3-4% p.a. provide a relatively decent and stable return for investors.

- Related story: Sime Darby Results/Briefing Note ' No Significant Impact From Global Economic Slowdown Yet (29 Nov 2011)

Corporate Highlights

UMW ' New Toyota Avanza Launched Underperform

News Update

- UMW Toyota launched the Indonesian-assembled Toyota Avanza yesterday replacing the long-in-the-tooth previous generation vehicle that dates back to 2004. UMW Toyota is targeting to sell 8,500 units of the new Avanza in 2012.

- UMW is forecasting sales of 93,000 Toyota and Lexus vehicles in 2012 that is broadly in line with expectations, helped by the planned launch of four new models.

- We have tweaked our FY11-13 net profit estimates lower by 2.8%, 0.1% and 0.5% respectively. No change to our Underperform call on valuation grounds. We lift our PER-based, SOP fair value estimate to RM6.20 (from RM5.80). The main downside worry for UMW is margin pressure given that the US $ and JPY have appreciated 4.3% and 9.4% respectively against the RM in the past six months. However, hopes for a higher dividend payout could keep investor interest up.

- Related story: UMW Holdings - New Iraq Power Contract (21 Dec 2011)

Macro

Trade ' Exports growth slowed to a four-month low in November, as commodity exports weakened

Economic Highlights (published 11 Jan 2012)

- Export growth slowed to 8.0% yoy in Nov, the lowest in 4 months, after holding up at +15.8% in Oct and off a 15-month high of +16.6% in Sep.

- This was due to sliding exports of commodity products as well as weaker growth in the exports of non-electronic & electrical (E&E) manufactured goods but was mitigated by a smaller contraction in the exports of E&E products.

- As a result, the trade surplus narrowed to RM9.5bn in Nov, from a surplus of RM13.2bn in Oct.

- Going forward, we expect the current account to record a larger surplus of RM101.5bn or 12.0% of GNI in 2012, compared with a surplus of RM98.8bn or 12.2% of GNI estimated for 2011.

Lacking the x-factor

2012-01-11T23:06:00.005+08:00

Stock Name: TOPGLOV
Company Name: TOP GLOVE CORPORATION BHD

Research House: MIDF

Price Call: SELL

Target Price: 3.61

Bouncing Back With a Bang

2012-01-11T23:06:00.004+08:00

Stock Name: TOPGLOV
Company Name: TOP GLOVE CORPORATION BHD

Research House: OSK

Price Call: BUY

Target Price: 6.00

Ripe For Re-rating

2012-01-11T23:06:00.003+08:00

Stock Name: MBMR
Company Name: MBM RESOURCES BHD

Research House: OSK

Price Call: BUY

Target Price: 3.69

Fresh Vietnam job

2012-01-11T23:06:00.002+08:00

Stock Name: SAPCRES
Company Name: SAPURACREST PETROLEUM BHD

Research House: AMMB

Price Call: BUY

Target Price: 5.44

At lower range of book value

2012-01-11T23:06:00.001+08:00

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD

Research House: AMMB

Price Call: BUY

Target Price: 6.57

Receives bid from MCCM to buy QSR at RM6.90/share

2012-01-11T23:06:00.000+08:00

Stock Name: KULIM
Company Name: KULIM (M) BHD

Research House: AMMB

Price Call: BUY

Target Price: 4.25

Petronas Chemicals (Buy): Behold, the recovery is in sight

2012-01-11T12:04:00.007+08:00

Stock Name: PCHEM
Company Name: PETRONAS CHEMICALS GROUP BHD

Research House: MAYBANK

Price Call: BUY

Target Price: 7.50

Prices recovering, maintain forecasts. PCHEM's product margin in Dec 2011 was USD1,034/tonne (+6.5% YoY, -4.8% MoM), we estimate. The year-to-date product margin of USD1,149/tonne was 35.9% higher YoY. Product prices appear to have reached a support level and are slowly drifting upwards, driven by a tight supply/demand balance, higher naphtha cost and some restocking due to low inventory levels. Maintain BUY on PCHEM with an unchanged target price of RM7.50/share based on 13.5x 2012 PER.

Maybank research (11 January 2012)

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