Surprised on the upside. Strong 4Q11 net profit of RM117m (+65% QoQ, +46% YoY) brought 2011 net profit to RM318m (+8% YoY), making up 113% of our full-year estimates and consensus. 4Q11 margins were better than anticipated. Though we like LMC as a key beneficiary of local construction pump-priming, the share price has risen 15% in three months and is only 3% away from our TP (based on historical peak PER of 17x on 2013 EPS). Thus we downgrade the stock to Hold. A dividend yield of 4.9% net is still worth holding on for.

Maybank Research 23 Feb 2012

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