Malaysia Marine & Heavy Eng; Fully Valued (downgrade from Hold); RM4.24
TP: RM3.30 (Prev RM3.30); MMHE MK
Weak 2Q13

2Q13 result was within our expectation but below consensus’. There is still earnings risk given slow order book replenishment.  Downgrade to Fully Valued with RM3.30 TP.

Regional Plantation
Not much help from biodiesel

Malaysia’s Jul13 palm oil output of 1.674m MT was in line with forecast, but ending stockpile of 1.664m MT was slightly higher on flat exports. Biodiesel exports jumped 71% m.-o-m to 33k MT – volumes too small to make a difference. Expect Aug13 output to rise slightly by 3% m-o-m due to Eid break, marginally trimming ending stock. Global inventories coming down, but prices still weak. Stick with AALI, BAL, FR, and IOI.

Source: HwangDBS Research - 15 Aug 2013