21st November 2011
Top Story: WCT – Still hopeful on RM2bn contract wins in FY12/11 Market Perform
Briefing Note
¨ WCT is still not giving up hope on meeting its guidance of RM2bn worth of new contracts to be secured in FY12/11, despite having only bagged RM187m YTD.
Macro View
GDP: Real GDP bounced back strongly to +5.8% yoy in the 3Q, but outlook darkens
Economic Highlights (published 18 Nov)
¨ Real GDP growth bounced back strongly to expand by 5.8% yoy in the 3Q, from +4.0% in the 2Q. This was boosted partly by significantly higher-than-expected public consumption and as industrial activities normalised after Japan 's earthquake disruption to supply chain receded. This was aided by an improvement in crude oil production, after a hiccup in the production of a major oil field was resolved in May. A pick-up in consumer spending also helped, while real export growth inched up moderately during the quarter.
Sector Call
Banks: Further measures to promote responsible financing practices Underweight
Sector update
Maybank: Fair value at RM6.98 Underperform
CIMB: Fair value at RM5.63 Underperform
Public Bank: Fair value at RM12.54 Outperform
HL Bank: Fair value at RM9.70 Market Perform
AMMB: Fair value at RM4.40 Underperform
AFG: Fair value at RM2.83 Underperform
Affin: Fair value at RM2.05 Underperform
MBSB: Fair value and call downgraded to RM1.62 Market Perform (down from OP)
RCE: Fair value at RM0.50 Market Perform
Property: Riding through the storm Underweight
Sector Update
¨ As expected, further regulations are imposed on household financing that will have an impact on the property sector.
Corporate Highlights
Parkson: PRG 3QCY12/11 results in line with expectations Outperform
Company Update
¨ 51.6% subsidiary, Parkson Retail Group (PRG)'s 9MCY12/11 core net profit of RMB842.1m (+14.8% yoy) was within expectations, accounting for 68% of our and consensus earnings forecasts, respectively. We consider this to be within expectations as the 4QCY12 is seasonally strongest for PRG, usually accounting for ~30% of full-year earnings due to the festive seasons and holidays.
MMHE: Saved by provision reversals Underperform
Briefing Note
¨ Revenue was down due to: 1) change in recognition of the Turkmenistan Block 1 Phase 1 project to equity accounting (vs. consolidation previously) after the project was novated to the MMHE-TPGM JV; and 2) drop in work in both E&C and Marine Repair/Conversion divisions. Order book stands at RM3.7bn and tender book is RM4-5bn.
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