RHB Invest Research

Top Story

TH Plantations:

• THP to record a 3-year earnings CAGR of 25% to FY12, on the back of a 3-year revenue CAGR of 14%.
• We project net dividend payouts at a consistent 55-60% p.a., which translate to attractive net yields of 5.6% for FY10, rising to 7-8% for FY11-12.
• THP’s earnings are very sensitive to CPO price movements and every RM100/tonne change in CPO price would impact earnings by 10-12% p.a.
• Fair value of RM2.30. Initiate with Outperform.

Corporate Highlights


SP Setia:

• 4QFY10 core net profit of RM59.1m came in within our expectation and market consensus.
• In tandem with the buoyant property market, SP Setia has achieved record high sales, from RM1.65bn last year to RM2.31bn in FY10. This has well exceeded the company’s initial sales target of RM2bn.
• The company targets to attain RM3bn sales in FY11. In view of the ambitious sales target and the expected improvement in profit margins, we revise our FY11-12 net profit forecast by 8-14%.
• Fair value is revised up to RM6.50, from RM5.94. Maintain Outperform.

Technical Highlights


Daily Trading Strategy:

• Admittedly, the recovery in recent sessions has silent the previous negative readings on the chart, and turned the market sentiment into a more favourable state.
• If the buying support persists, the market will stand a good chance to retake the strong resistance level at 1,524 and the all-time high level of 1,531.99 soon.
• FBM KLCI must remove the all-time high level of 1,531.99, before it can secure a fresh breakout signal, to lure in more buying support.
• For now, we maintain our strategy of “selling into strength” on the current rally.

Daily Technical Watch: Tenaga

• Next resistances at RM9.00 and RM9.29
• Immediate Support = RM8.50
• Immediate Resistance = RM9.00