Market Focus
Happy ending in sight

December is traditionally a darling month for Malaysian equities with the KLCI rising in 23 of the last 26 years. The 5-year historical average return of 2.7% in December suggests the KLCI could end the year at a record high of 1,862. Maybank, Hong Leong Bank and RHB Capital are our top picks for index exposure.

Boustead Holdings; Hold; RM5.35
Price Target: RM3.60 (prev RM5.30); BOUS MK
A stronger quarter

3Q13 in line; better results from plantation and heavy industries segments. Declared single tier 7.5 sen interim dividend. Unlocking value via Plantation IPO. HOLD, raised TP to RM5.60 (20% discount to SOP).

MMC Corp; Buy; RM2.82
Price Target: RM4.95; MMC MK
Stronger 3Q earnings

3Q13 profit in line; stronger earnings from Energy & Utilities. Expect significantly stronger FY14F profit as Tanjung Bin maintenance will end soon. Still expect to be appointed PDP for Line 2 soon. BUY, TP RM4.95 (20% discount to SOP).

Muhibbah Engineering; Buy; RM2.32
Price Target: RM3.10; MUHI MK
Lifted by shipyard earnings

3Q13 net profit is below expectations. Earnings were driven by shipyard segment y-o-y, some drag from construction. Reduce FY13F EPS by 4%; FY14-15 earnings intact. Maintain BUY and RM3.10 TP.

RHB Capital; Buy; RM7.61
Price Target: RM8.80; RHBC MK
Some reprieve in provisions

3Q13 results in line; earnings driven by higher non-interest income and much lower provisions q-o-q; strong loan growth but deposits contracted. Earnings growth will be led by higher yielding loans, but mortgage loans could see margin pressure and provisions may be higher in 4Q13. Maintain BUY; RM8.80 TP.

Sime Darby; Hold; RM9.65
Price Target: RM10.20 (prev RM10.35); SIME MK
Dragged by Industrials, Motor

1QFY14 earnings of RM489m were below our and consensus’ expectations on annualised basis. Earnings declines in Plantations, Industrial and Motor segments were steeper-than-anticipated. Minamas listing on the cards, subject to certain pre-conditions; dividend re-investment plan approved. FY14F/15F/16F earnings cut by 6%/5%/5%, TP trimmed to RM10.20; HOLD rating maintained.

Sunway Bhd; Buy; RM2.65
Price Target: RM3.50; SWB MK
Another steady quarter

Results above expectations. Solid earnings visibility from record orderbook and unbilled sales. Maiden Iskandar launch just around the corner. Maintain BUY and RM3.50 TP.

Source: HwangDBS Research - 2 Dec 2013