Maybank IB Views

ACQUISITIONS / DISPOSAL
PLUS Expressways RM4.60: Buy
Sense and sensibility Shariah-compliant

Shareholders to decide. PLUS' EGM tomorrow will proceed and shareholders will vote to either accept UEM-EPF's offer or adjourn the passing of resolutions which will give PLUS more time to evaluate Jelas Ulung's offer. As we have written yesterday, we are not comfortable with Jelas Ulung's offer - we are concerned on financial implications or recourse later. After a 5.5% share price gain yesterday, PLUS is trading at UEM-EPF's offer price and just a tinge away from our RM4.70 DCF-based target price. Our Buy call is now under review.


COMPANY UPDATE
KNM Group RM2.69: Buy
Doing a double; raising target price Shariah-compliant

Double joy on orders. We are bullish on the fabricators and have raised KNM's target price by 40% to RM4.35 as it has started to exhibit strong new job wins. The latest RM2.2b EPCC project win instantly doubles its backlog to RM4.6b and the growing momentum is set to sustain into 2011. We opine delivering consistent earnings and margin recovery will supersede market skeptics. Maintain Buy.


Lafarge Malayan Cement RM7.68: Buy
Bright prospects; upgrade to Buy Shariah-compliant

Liquidity and scarcity. Share price has outperformed its cement and steel peers by 3% and 11% YTD respectively and the stock now trades at 15.4x 2012 earnings, which we expect to be a peak demand year for cement in view of major infrastructure projects in Greater KL starting in 2011. Nonetheless, 2012 could mark the start of sustained demand for cement driven by the LRT, MRT, and government land development projects. On that scenario, 15.4x 2012 valuation is not too demanding.


Technicals
The FBM KLCI surged 9.30 points to 1,505.18 yesterday. Its resistance areas at 1,507 and 1,525 may cap market gains, whilst its obvious support areas are located at 1,493 and 1,505.
Trading idea for today is a SHORT TERM BUY call on TWSPLNT.


Other Local News
DRB-Hicom: In RM1b tie up with VW, keen to be VW's distributor in Malaysia. DRB-Hicom Bhd and Volkswagen AG (VW)'s has officially tied up in a collaboration worth RM1b. DRB-Hicom will assemble the Passat, Polo and Jetta models in Pekan. DRB-Hicom has expressed an interest to distribute VW's vehicles in Malaysia. (Source: The Star)

Conglo: Ex-CEO explains why Johor Corp wanted him out. Former Johor Corp CEO Tan Sri Muhammad Ali Hashim said that the reason for his removal is for to facilitate the sale of Johor Corp's assets, including the fast-food businesses. (Source: Business Times)

Amanah Saham Nasional Bhd: Declares 22% higher income payout. ASNB, the subsidiary of Permodalan Nasional Bhd (PNB) has declared an income distribution of 7.5 sen per unit and a bonus of 1.25 sen per unit for ASNB for the financial year ending Dec 31, 2010. The total payout is 22% higher than last year, at RM5.93b while bonus portion payment is RM603.34m. (Source: The Star)

MTD: In JV for jobs in S. Arabia. MTD Capital Bhd has formed a joint-venture (JV) company with ANC Holdings Pte Ltd to target engineering and infrastructure projects in Saudi Arabia. MTD would hold 51% in the JV while ANC would have the remaining 49%. (Source: The Star)

Agriculture: Government negotiating to raise price of Kenaf. The Ministry of Plantation Industries and Commodities is negotiating with a Pahang-based Japanese company to raise the price of kenaf to more than RM750/t to enable the jute-like plant to be commercially cultivated by former tobacco planters. (Source: Bernama)