Maybank IB Research

COMPANY UPDATE
WCT RM3.04: Buy
Earnings delivery in 2011 Shariah-compliant

Maintain Buy. We retain our earnings forecasts for WCT post analyst briefing on its 3Q10 results. Indications are that 2011 will be a good year in terms of earnings delivery - we forecast a 34% growth in net profit. We are also optimistic on job win momentum flowing into 2011, being the first year of the 10th Malaysia Plan implementation. Our target price pegs the stock to 15x 2011 earnings plus a 20sen increment from the new KLIA2 retail concession which will be inked this month-end.


RESULTS REVIEW
Tan Chong Motor Holdings RM5.62: Sell
Needs to unlock value regionally Shariah-compliant

As anticipated, 3Q results were sequentially weak. With most of the positives priced in, TCM's valuations are no longer cheap vis-a-vis its peers. With no near-term catalyst in sight, TCM is unlikely to excite and should underperform relative to market. Reiterate Sell with a RM5.00 target price, which is based on 12x 2011 EPS.


RCE Capital RM0.625: Buy
Surprises on the upside

Beats expectations. 1HFY11 RM55m net profit (+47% YoY) made up 56% of house RM98m FY11 forecast and 60% of street RM91m. Loan impairment loss was lower than expected. We raise our FY11 net profit forecast by 11% and FY12-13 by 5-7% p.a. Our new TP is RM1.10 (+8%) based on 7x 2011 PER (unchanged) and the market value of its investment in AmFirst REIT (35m units). For its strong delivery track record and growth potential, valuations are low at 4.2x earnings. Buy.


Technicals
The FBM KLCI rose 9.40-points last week. The obvious support areas for the FBM KLCI are located in the 1,462 to 1,500-zone. The key resistance areas of 1,507 and 1,531 will cap any rebound activity.

Trading idea for today is a SHORT TERM BUY call on KIANJOO.


Other Local News
QSR: Halim Saad eyes QSR. Tan Sri Halim Saad, the former boss at Renong/UEM Group has made an offer to acquire Pizza Hut restaurant operator QSR Brands Bhd's entire business that includes its controlling stake in KFC Holdings (M) Bhd. The board is in the midst of deliberating on the proposal and will make further announcements in due course. (Source: The Star)

CIMB: Opens in Cambodia. CIMB Bank Plc was officially launched after CIMB Group received its license to fully operate its 100%-owned subsidiary in Cambodia. CIMB received approval-in-principle to establish and operate in Cambodia six months ago to offer banking products and services to the nation of 14.5m people. (Source: The Star)

K-Star: Expands footprint in China. K-Star Sports Ltd's wholly owned subsidiary Fujian Jinjiang Dixing Shoes Plastics Co Ltd is expanding its footprint in China by setting up six new wholesale outlets in northern China. K-Star started developing the northern China market in the middle of this year and had set up 19 wholesale points, of which six were in Urumqi in Xinjiang province and the remaining in Russia. In China, Urumqi acts as a major export market as it is situated near neighbouring countries like Russia, Kazakhstan and the Middle East countries. (Source: The Star)

O&G: Total signs PSC, Gazprom buys stake in Gulf of Mexico project. French oil and gas company, Total has signed an agreement with Petroliam Nasional Bhd (Petronas) to acquire a 85% interest in Block SK317B, located about 100km offshore Sarawak. Under the agreement, Total will operate the block with its partner, Petronas Carigali holding the remaining 15% interest. Separately, Gazprom Neft, the oil arm of Russian energy company Gazprom, has signed a deal to acquire a 30% stake in a project operated by Petronas to explore and develop four offshore blocks in the Gulf of Mexico. (Source: Business Times)

E&U: Expansion in solar photovoltaic to generate RM200m in opportunities. The solar photovoltaic (PV) capacity in the country is expected to increase substantially to 11 mega watt (MW) in 2011, generating about RM200m in business opportunities for companies involved in installing solar power generation systems. AWC Bhd's MD, Azmir Merican said that the 11MW capacity would provide for the grid-connected market in the peninsula and the off-grid market in East Malaysia, following the implementation of the feed-in tariff scheme under the Renewable Energy Law next July. AWC set up a joint venture company with Solamas Sdn Bhd to provide solar power integrated services. (Source: The Star)

External reserves: Increased slightly in the first half of November 10. The external reserves has increased to RM326.5b (USD105.8b) as at 15 November 10 from RM324.9b (USD105.3b) on 29 October 10. The latest reserve amount is equivalent to 8.8 months of retained imports and 4.5 times short-term external debt. (Source: Bank Negara)