18th August 2011
Top Story: Proton – Rocky road ahead Underperform
Results Preview
¨ We are expecting Proton to report lower 1QFY12 earnings on a yoy basis (1QFY11: RM84.7m).
¨ Proton's domestic sales volume for the quarter to Jun (1QFY12) was up 0.9% yoy to 40,353 units.
Macro View
GDP: Real GDP slowed down to 4.0% yoy in the 2Q but will likely gradually improve in the 3Q
Economic Highlights (published 18 Aug 2011)
¨ Malaysia's economy might have hit its weakest point in the 2Q with real GDP growth slowing down to 4.0% yoy in 2Q 2011, from a revised +4.9% in 1Q and compared with +9.0% in 2Q 2010, due to a moderation in consumer and business spending during the quarter. The disruption in the supply of component parts to the auto industry caused by Japan 's earthquake and a production problem faced by a major oil field in Malaysia worsened the situation. These were, however, mitigated by a pick-up in exports in 2Q.
CPI: Inflation eased to 3.4% in July, giving the Central Bank room to pause raising interest rates
Economic Highlights (published 17 Aug 2011)
¨ Headline inflation eased to 3.4% yoy in Jul, marking the first month of easing after seven straight months of increase, and off a 26-month high of +3.5% in Jun. This was primarily due to a moderation in the core inflation rate, which was offset partially by a rise in food & non-alcoholic beverage prices during the month.
Corporate Highlights
AFG: Targets may be achieved earlier Market Perform
Briefing Note
¨ While the group's medium term (3-5 years) targets were unchanged, management appeared optimistic that the ROE (of 14-16%) and non-interest income contribution (of 30%) targets could be achieved earlier.
MPI: Subdued outlook Underperform
Briefing Note
¨ Management expects 1QFY12 revenue growth to be modest as it is not seeing a strong pick-up in sales volume despite the seasonally strong quarter. MPI expects earnings to be driven albeit moderately by volume loading of new projects with new micro-leadframe packages (MLP) and micro-electro-mechanical-systems (MEMS).
Petronas Gas: A good start Outperform
1QFY12/11 Results
¨ 1QFY12/11 (Apr-Jun 2011) net profit of RM386.7m was within expectations, accounting for 26% and 26.5% of our (RM1.48bn) and consensus (RM1.46bn) full-year estimates respectively.
Mah Sing: Earnings growth fully priced in Market Perform
2QFY11 Results
¨ 2Q11 net profit of RM43.1m was in line with our and consensus estimates. EBIT margin was slightly lower in 2Q11 at 15% vs. 19% in the previous quarter, due mainly to higher operating as well as selling and marketing expenses compared to the previous quarter.
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