RHBInvest Research Highlights 18th November 2011

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RHBInvest Research Highlights 18th November 2011

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Publish date: Fri, 18 Nov 2011, 11:21 AM

18th November 2011

Top Story: Super Group ' Regional 3-in-1 Instant Beverage Player Outperform (New Coverage)

Initiation Report ( Singapore )

'' Super Group, based in Singapore , is an instant F&B brand owner and manufacturer of more than 200 instant beverages and convenient food products which is distributed worldwide. It derives its revenues from two main sources, i.e. branded consumer segment and ingredient segment which accounts for 83% and 17% of total group revenues respectively.

Regional Sector Call

Indonesia Coal: Resilient in times of uncertainty Overweight (New Coverage)

Sector Initiation ( Indonesia )

Tambang Batubara Bukit Asam (PTBA): A sleeping giant ' Fair value IDR20,750 Outperform

Adaro Energy: Integrated coal player from pit to power ' Fair value IDR2,350 Outperform

Harum Energy: Small but attractive ' Fair value IDR9,050 Outperform

Indo Tambangraya Megah (ITMG): Quality coal but limited reserves ' FV IDR45,600 Market Perform

'' We initiate coverage on Indonesia 's coal sector with an Overweight stance. Despite uncertainty in the global economic outlook, we believe the coal sector will remain resilient, driven by favourable demand-supply dynamics in the global seaborne thermal coal trade. Indonesia will be the prime beneficiary, being the largest exporter of thermal coal in the seaborne market.

Indonesia Banks: A Perfect 10 Neutral

Sector Update

Bank Rakyat Indonesia : Fair value IDR6,700 Market Perform

Bank Mandiri: Fair value IDR6,700 Market Perform

Bank Central Asia : Fair value IDR6,300 Underperform

Bank Danamon: Fair value IDR4,700 Market Perform

Bank Indonesia (BI) released banking industry data for Sep that revealed solid metrics.

'' This was in line with expectations given robust earnings growth seen during the recently concluded 3Q11 reporting season and consistent with the steady 6.5% GDP growth achieved during the quarter.

'' System loan growth accelerated to +25.2% yoy, up from +23.9% in the preceding month.

Sector Call

Rubber Gloves: Falling Latex Prices = Improving Sentiment Towards Glove Manufacturers Neutral

Sector Update:

'' Since hitting a peak of RM10.93/kg back in Apr '11, latex prices have broadly been on a down trend and more recently, saw a significant decline from RM7.55/kg to around RM6.77/kg currently in over two weeks which we believe was due to: 1) concerns over slower global economic growth ahead, which could hamper demand for commodities; 2) the flooding in Thailand could lead to potential disruptions to automotive manufacturers' operations there, leading to lower demand for rubber; and 3) easing concerns on latex supply issues over in Thailand given that the major tract of the country's rubber plantation is located in the south.

Malaysia Corporate Highlights

Tan Chong Motor: A Disaster Hit 2011 Market Perform

3Q11 Results

'' Tan Chong's 3Q11 results were below our and consensus estimates.

'' Net profit for the quarter of RM54.6m (-3.4% qoq and +10.6% yoy) brought cumulative 9M11 earnings to RM185.1m (+4.2% yoy) that reached 70.3% of our previous 2011 forecast.

'' The main reasons for the weaker-than-expected earnings include start-up costs at Nissan Vietnam and othe costs incurred for regional expansion and upgrade of existing facilities.

TCHONG (4405)

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