RHB Invest Research

Top Story


Jaya Setia:

• Still a plantation company in the making
• Indicative value is RM4.83. Maintain Outperform

Corporate Highlights



Pos Malaysia:

• Maiden boost from postal tariff hike.
• We cut FY10-12 net profit forecasts by 30-41% largely to reflect the lower-than-expected bottom line impact from the tariff hike.
• We value POSM at RM3.17.

KNM:

• Moving Forward Confidently.
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• The company looks to grow its technology and plant services division and also offer total project solutions
• This is as it believes such projects have lesser competitors and can fetch fatter margins.
• The company currently has an order backlog of RM2.4bn and tender book of RM16bn
• It expects to win at least RM3bn worth of contracts in FY11.
• We maintain our Outperform call on the stock with a fair value of RM2.33.

Hartalega:

• Stop-Work Order From Prime Minister Department due to chemicals discharged from its factories
• Three government agencies to conduct investigations on the complaints and declared that the factory did not pose any health risks to residents.
• It is still business as usual as Hartalega has not received any stop-work order from MDKS.
• Our indicative fair value is maintained at RM5.64.
• Market Perform call on the stock reiterated.

Technical Highlights


Daily Trading Strategy:

• Although the index managed to close the day at above the critical psychological level at 1,500 yesterday, there is a high risk of losing the 10-day and 40-day SMAs near 1,494 and 1,499, before heading towards the recent low of 1,474.02 and the critical level at 1,450 soon.
• Given the poor volume performance on the trading floor, and the volatile regional markets performances, investors are likely to continue their selling mode in the near term, in our opinion.
• Though the looming election plays and the speculation of more corporate M&A activities ahead may fuel further speculative interests in the short-term.
• The broader and regional economic concerns may prompt the longer-term investors to continue locking in more profits going forward.
• As a result, we prefer to stay biasly negative for the near-term technical outlook.

Daily Technical Watch: DRB-Hicom

• A surge towards the all-time high level possible if it removes RM2.34 today.
  
• Immediate support at RM2.23
• Immediate Resistance at RM2.34