RHBInvest Research Highlights 29th July 2011

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Bursa Malaysia Stock Watch

RHBInvest Research Highlights 29th July 2011

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Publish date: Fri, 29 Jul 2011, 11:35 AM

29^th July 2011

Top Story: Building Materials ' Steel: Bracing for continued weakness in 2H11 Underweight

Sector Update

'' The steel sector has underperformed the broader market YTD. An uptrend in steel prices since the beginning of the year has not filtered down to improve margins due to rising feedstock prices.

'' Most steel companies are likely report lower net profit or continued losses in 2Q11, as rising raw material costs should start eating into 2Q11 P&L, amid relatively stagnant steel prices qoq.

Corporate Highlights

SP Setia: Eyeing E&O Market Perform

News Update

'' Business Times reported that shareholders of SP Setia had made overtures in recent months with certain shareholders of E&O, who may have included Temasek Holdings director Goh Yew Lin.

'' While this rumours is unconfirmed, if the deal materialises, the rationale can be easily explained. SP Setia only left with 60 acres of land in Penang island.

IOI Corp: Buys 11,978ha of land in Sabah for RM830m Underperform

News Update

'' IOIC's subsidiary has announced an acquisition of 11,978ha of land in Labuk and Sugut, Sabah from Dutaland's subsidiary for RM830m (or RM69,294/ha). The total planted area of the land is about 10,449 ha of which approximately 85% of the estate is at its prime with oil palm trees ranging between three years to fifteen years. The purchase consideration will be funded by its existing cash reserves and/or borrowings and the acquisition is due to be completed by 4QCY2011.

WCT: Bags RM115.1m Vale earthwork project in Perak Underperform

News Update

'' WCT has been awarded by Vale Malaysia a RM115.1m contract for earthwork for Phase 1A (Stage 1) of Vale Malaysia 's iron ore hub in Teluk Rubiah, Perak.

Malaysia Airports: In line with expectations; KLIA-2 on track for completion Outperform

2QFY11 Results / Briefing Note

'' 1HFY12/11 net profit came in at 41.9% of our full-year forecast. We consider the results broadly in line with expectations given the expected pent up demand for air travelling in the 2H on the back of holiday season.

'' According to MAHB, the construction of KLIA2 is around 45% completed on track to be completed by 2013.

SEGi: No Surprises Outperform

2QFY11 Results

2Q11 net profit of RM18.1m (+67.9% yoy, 0.1% qoq) came within expectations, with 1HFY11 net profit of RM36.3m (78.5% yoy) reaching 50% of our and 48% of consensus estimates. SEGi's revenue of RM69.2m (+31.7% yoy, +1.1 qoq) also came within ours and consensus estimates.

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