RHBInvest Research Highlights 13th February 2012

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Bursa Malaysia Stock Watch

RHBInvest Research Highlights 13th February 2012

kltrader

Publish date: Mon, 13 Feb 2012, 09:35 AM

13th February 2012

Malaysia Equities

Top Story

Banks ' Easing Headwinds + YTD Underperformance = Sector Upgrade Neutral (Upgraded)

Sector Update

Public Bank ' Fair value at RM15.00 (from RM14.10) Outperform

Maybank ' Fair value at RM9.47 (from RM7.33) Outperform (upgraded)

CIMB ' Fair value at RM7.41 (from RM6.20) Market Perform (upgraded)

AMMB ' Fair value at RM6.23 (from RM4.99) Market Perform (upgraded)

HL Bank ' Fair value at RM11.01 (from RM9.90) Underperform

Affin ' Fair value at RM3.10 (from RM2.37) Underperform

AFG ' Fair value at RM3.56 (from RM3.25) Underperform

MBSB ' Fair value at RM2.32 (from RM1.95) Market Perform

RCE ' Fair value at RM0.57 (from RM0.50) Market Perform

Sector Update

Plantation ' Only Time Can Resolve The Indonesian Tax Structure Problem Overweight

Sector Update

- The seasonal decline in production continued in Jan as CPO production fell 13.8% mom. Exports fell by a slightly smaller 13.2% mom also due to seasonal factors, post-festive season. Despite the lower CPO stock levels, annualised stock/usage ratio rose to 11.1% (up from 10.5% in Dec), mainly due to the smaller export volume in Jan.

Corporate Highlights

SEG International ' No Signs of Slowing Down Outperform

Visit Note

- The management expects total student population of 35k (vs. our previous assumptions of 37k) by end-2012, implying yoy growth of almost 30% from the current 27k.

Gamuda ' PDP Terms For Klang Valley MRT Announced Market Perform

Company Update

- The agreement between MRT Co and project delivery partner (PDP) for the Klang Valley MRT project MMC-Gamuda JV has been signed with key terms being: 1) The PDP will be paid a fee equivalent to 6% of total contract value; 2) If the actual project cost exceeds the target cost by up to 15%, the PDP fee will be reduced in accordance with an agreed formula; 3) The PDP will have to shoulder the balance if the actual project cost exceeds the target cost by 15%; and 4) The PDP is liable to a liquidated and ascertained damage (LAD) for late delivery of RM500,000/day.

MPHB ' Sells down stake in Associate, Philippine Racing Club Outperform

News Update

- MPHB has sold a 13.1% stake in Philippine Racing Club Inc. (PRCI) at an average price of Peso 9.50/share, for Peso 722.4m (RM51.64m). Post-disposal, MPHB will own 19.9% of PRCI, and will no longer equity account it as an associate. MPHB will record a dispoal gain of RM17.34m.

CSC Steel ' 4QFY12/11 in the red on inventory writedown Trading Buy

Results Note

- FY11 net profit exceeded our full-year forecast by 42%, but missed the full-year market consensus by 22%. The variance against our forecast largely came from a lower-than-expected writedown of inventories. CSC Steel also declared a 7sen single tier dividend (net yield of 4.9%).

Regional Equities

Indonesia Banks : Opportunity To Accumulate Overweight

Sector Update

Bank Rakyat ' Fair value IDR8,200 Outperform

Bank Mandiri ' Fair value IDR7,900 Outperform

BCA ' Fair value IDR7,500 Market Perform

Bank Danamon Fair value IDR5,500 Outperform

Macro

GDP ' Resilient GDP Growth In 4Q 2011, Odds Of An Upgrade Improving

Economic Update (published 10 Feb 2012)

- The country's real GDP growth is estimated to have softened to 5.4% yoy in the 4Q, after bouncing back to +5.8% in the 3Q. The moderation in real GDP growth is expected to persist into 2012, due to global economic slowdown amidst a lingering sovereign debt crisis in the Eurozone.