HLIB Research 31 January 2012 (Public Bank; MAHB)

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

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

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.

TDM - Unheralded rising star

Underappreciated. Since we highlighted TDM as an undervalued stock in our 2012 outlook report of 6 Jan 2012, share price has appreciated +15%. Still, it remains deep in value, trading at 8.7x 2013 PER with an EV/planted ha of just c.RM27,900 (sector average: RM72,000). The market has also ignored TDM’s long-term growth catalysts, namely the potential doubling of planted area and tripling of hospital beds. TDM could be a strategic privatization target for its relatively low valuation. We attach a fair value of RM5.50 (based on 11x 2013 PER) to TDM. A further re-rating could come in in 2014 when it reaps the benefits of recently planted landbank and its extended hospital chain.


Maybank Research 30 January 2012

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Carlsberg Brewery (Hold): Brewing Asahi locally

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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RHBInvest Research Highlights 30th January 2012

30th January 2012

 

Top Story
Shifting Trends – Corporate Survey Market Update -          From our visits, briefings and conference calls with companies in Jan, half appeared to be optimistic about their outlook, and only a handful was neutral-to-negative. -          Consumer, education and REIT companies remained resilient amidst the global economic downturn, and we note the signs of optimism for rubber gloves, technology and oil & gas sectors.
Corporate Highlights
Public Bank – Expecting a strong end to FY11                                                             Outperform Results Preview -          Public Bank will announce its 4QFY11 results at midday today. Our full-year net profit estimate of RM3.5bn (+1% vs. consensus) implies that 4Q11 net profit could be down by 3.5% qoq but up 2.5% yoy. That said, we would not be too surprised if the actual results turn out slightly ahead of our and consensus estimates. Historically, 4Q tends to be a stronger quarter for the group.
Axiata – No Surprises For XL's 4Q                                                                          Market Perform Company Update -          Axiata's 67%-subsidiary, XL Axiata (XL) full year FY11 core net profit of Rp3,167bn (+4.7%) came in within our and consensus full-year estimates.

HLIB Research 30 Jan 2012 (Plantations; Traders Brief)

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.

 

HLIB Research 27 Jan 2012 (Trading Idea)

Stock to watch – CUSCAPI:

CUSCAPI (RM0.42 – Accumulate): Ripe for a breakout soon

§  Base on the mixed technicals on daily charts, Cuscapi is likely to consolidate for a short while before trending higher. However, any weakness is a good chance to accumulate as it is ripe for further upside after a brief consolidation, reflected by its bottoming hourly and weekly technical indicators.

§  There is a good chance that prices may swing higher if the downtrend line channel around RM0.43 is taken out strongly.

Immediate upside targets are RM0.45 (61.8% FR), RM0.475 (50% FR) and RM0.50 (38.2% FR). If RM0.50 is taken out, more significant resistance levels are RM0.53 (23.8% FR) and RM0.58 (52-wk high). Major supports are RM0.40 (mid Bollinger band) and RM0.37. Curt loss below RM0.37.

 

Stock to watch – BOILERM:

BOILERM (RM0.80 – Accumulate): Poised for a triangle breakout

§  BOILERM is still consolidating in a huge triangle pattern but the stock is ripe for a breakout above the downtrend line channel near RM0.81 and RM0.84 levels (upper band) soon.

Once these levels are taken out, the next target is RM0.87 set on 16 Dec 11 before retesting the RM0.90 (23.6% FR). Significant resistance is RM1.00 (historical high). Technical landscape is on the mend, which bodes well for greater heights. As long as prices stay above the immediate uptrend line support or near the lower Bollinger band at RM0.78 levels, we will continue to stick with the bull's camp. More solid support is RM0.74 (61.8% FR). Cut loss below RM0.74.  

HLIB Research 25 Jan 2012 (SP Setia)

SP Setia (HOLD)

Revised takeover offer

§  The CEO, Tan Sri Liew Kee Sin ("TSL") and PNB, are making a joint revised offer for SP Setia Bhd, and have provided much-need clarity on the future of the company.

§  The new offer price has been revised to RM3.95 per share from RM3.90 while the offer for the warrants has been revised to 96 sen per warrant from 91 sen.

§  The most important part of the offer is a 3-year management agreement for TSL to have a free hand in running SP Setia.  When asked, TSL also said he does not intend to inject other PNB-related property developers such as Pelangi and I&P into SP Setia.  Also, PNB did not impose their KPI on SP Setia.

§  TSL also said that they expect to complete the land acquisitions for Bangsar and Federal Hill shortly.

§  TSL will hold on to his 8% stake, and PNB will provide TSL with a put option to sell his 8% stake to PNB in progressive tranches at RM3.95 per share.

§  Maintain HOLD, and raise target price by 5 sen to RM3.95, which is the revised offer price.

Alam Maritim Resources (Hold): RM115m contract win to start 2012

Positive but not yet a re-rating prospect. Securing Samsung's RM115m contract is newsflow-positive, and should contribute about 17.4% to 2012 earnings (which we have already factored in). While the contract flow momentum brought on by PETRONAS' capex plans is building up, Alam's stretched balance sheet will continue to curtail its growth potential (i.e. expansion of fleet size). Until this is addressed, Alam remains a Hold with a RM0.85 target price (9x 2012 EPS).


Maybank research (27 January 2012)

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IJM Corporation (Buy): Major wins

Upgrade to Buy. Two major pieces of news today - MRT job win and WCE concession win by Kumpulan Europlus - are positive for IJM, in terms of order book enhancement. However, we retain our earnings forecasts and RNAV-based target price pending details. Share price has come off since our last update and at current levels, the stock offers a 14% upside to our target. We upgrade our call to a Buy.


Maybank research (27 January 2012)

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RHBInvest Research Highlights 27th January 2012

27th January 2012

 

Top Story

MBSB – Watch out for NIM and credit cost                                                              Market Perform Results Preview -          MBSB is expected to release its 4QFY11 results early-Feb. Our full-year net profit estimate of RM316m may appear conservative relative to MBSB's 3QFY11 results as it implies that 4Q net profit would contract about 20% qoq (+>480% yoy) mainly due to NIM compression and higher loan impairment charges.

 

Sector Update

Media – A Seasonal Boost In December                                                                     Underweight Sector Update -          Dec's gross advertising expenditure (adex) for TV and print media was relatively stable with 2.9% yoy growth (Nov was the weakest in 2011 at +2.2% yoy). On mom basis, adex jumped 16% mainly due to festivities and seasonality.

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

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

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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HLIB Research 20 Jan 2012 (Digi; Traders Brief)

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.

RHBInvest Research Highlights 20th January 2012

20th January 2012

 

Top Story

Carlsberg – Ended 2011 on a good note, 2012 earnings outlook clearer                    Market Perform Visit Note -          Carlsberg's 4QFY11 results will be out on the 28 Feb. We understand that 4Q earnings should be fairly strong, underpinned by the earlier timing of Chinese New Year, even though 4Q revenues are normally weakest during the FY. -          Given that FY12 capex plans are minimal, comprising mainly replacement capex of around RM30m, we believe Carlsberg could potentially pay out 90-100% of its FY11 earnings.

Corporate Highlights

Digi – Ends On A High                                                                              Outperform (Upgraded) Results/Briefing Note -          DiGi's reported FY11 net profit of RM1.25bn (+6.5% yoy) exceeded our and consensus expectations, mainly due to a tax writeback of RM4.9m in 4Q. Management attributed this to approved tax incentives related to mobile broadband network facilities.

Quill Capita Trust (Hold): Growing organically

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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Pavilion REIT (Hold): A Malaysia retail icon

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)

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

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.

RHBInvest Research Highlights 19th January 2012

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.

Tenaga Nasional (Buy): 1QFY12: Above expectations

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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RHBInvest Research Highlights 18th January 2012

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)