Maybank IB Views

SECTOR UPDATE
Property: Overweight
Playing the M&A game

Size is the word. We saw 3 sizeable mergers in less than a month. While SunCity-SunHoldings offers the highest upside to their merged RNAV from current levels, we are more excited on UEML-Sunrise due to its potential participation in Khazanah-Temasek's property project in prime Singapore land, followed by MRCB-IJML, whereby a merger will raise their chances of participating in the RM10b GDV Sg Buloh land development. These potentials are however not quantifiable for now.


COMPANY UPDATE
AirAsia RM2.72: Buy
AirAsia Philippines: Tony meets Tony Shariah-compliant

Long time waiting. AirAsia will set up a JV and begin operations by 1Q11. The Philippines will be AirAsia's 4th country of operations after Malaysia, Thailand and Indonesia. We are positive on the longer-term prospects of this JV, but are neutral on its shorter-term impact as it will incur start-up losses and take time to achieve success. Maintain Buy with a RM3.36 TP based on 9.0x 2011 PER, 20% discount to peers.


Media Prima Berhad RM2.33: Buy
Access is valuable

Strong momentum. The 4Q is shaping up well as advertisers clear out their budgets. Consensus is catching up with our FY10 earnings forecast. Next year is looking good too. More active yield management of its wide audience reach will result in effective double-digit rate hikes at TV3 and Harian Metro in particular. Separately, the proliferation of carriers will boost demand for content. Buy for yield and growth.


Technicals
The FBM KLCI advanced by 8.32 points to 1,510.06 yesterday. Its resistance areas at 1,513 and 1,528 may cap market gains, whilst its firm support areas are located at 1,495 and 1,510.
Trading idea for today is a TAKE PROFIT call on PBB.


Other Local News
TNB: In power cooperation with Yemen company. Tenaga Nasional (TNB) is collaborating with National Trading Company (Natco) of Yemen to explore joint cooperation in the development of the power industry in Yemen. The initial scope encompasses power generation and distribution, training, system planning, design, project management and development, system operation and system maintenance. (Source: The Star)

Gamuda-MMC: Double track railway job ‘will meet deadline’. Work on MMC-Gamuda Joint Venture Sdn Bhd’s electrified double track project from Ipoh to Padang Besar has been delayed but the Transport Minister is confident that the project will be completed on schedule. 64% of the project has been completed as at the end of last month. The delay was due to problems related to land acquisition which the ministry would resolve before year end. (Source: News Straits Times)

Proton: Group Lotus buys equity in Renault F1 team. Proton Holdings Bhd’s subsidiary Group Lotus plc has bought a major equity stake in the Renault F1 team from Genii Capital and the team will be renamed Lotus Renault F1 team. With the acquisition, Group Lotus will become the title sponsor until the end of the 2017 season. (Source: The Edge Financial Daily)

Hartalega: No order to close factory. Hartalega Holdings Bhd has clarified that its factory in Ijok, Kuala Selangor, has never been ordered to close, suspended, nor issued serious warnings of any kind. Hartalega assured that it has complied with all standards enforced by the Environmental Department. (Source: Business Times)

DRB-HICOM: Syed Mokhtar mulls DRB-HICOM buyout. Tan Sri Syed Mokhtar Al Bukhary could be privatizing DRB-HICOM Bhd soon. Maybank Investment Bank Bhd is believed to be the advisor for the RM2b plan. The offer would be comparable to DRB-HICOM's net tangible asset (NTA) value. (Source: Business Times)

Bina Puri: Secured jobs in Saudi Arabia & Thailand. Bina Puri Holding Bhd’s has secured a stormwater pipeline project worth SAR24 (RM19.9m) in Saudi Arabia, and a warehouse project in Bangkok worth THB175.0m (RM18.3m). The awards bring the Group’s outstanding order book to RM3.16 b. (Source: Bursa Announcements)

Titan: Honam extends closing date for takeover offer. Honam Petrochemical Corp Bhd has extended the closing date for the takeover offer of Titan Chemicals Corp Bhd to Dec 24, 5pm. (Source: The Star)

Hospitality: RM1b investment to transform Teluk Datai. Khazanah Nasional Bhd, through its investee company, Teluk Datai Sdn Bhd (TDR), and partners are investing RM1b in the Teluk Datai master development plan that will be completed by 2014. The five-year plan includes the expansion and upgrading of TDR’s hotel and golf course and construction of new hotels. The plan encompasses a five-star resort which will be jointly developed with Shangri-La Hotels, a six-star hotel and villas. (Source: News Straits Times)

Utilities: Cabinet agrees to electricity tariff hike. The federal Cabinet has agreed to a revision of electricity tariff but has not decided when it should take place. (Source: The Star)