Maybank IB Views

COMPANY UPDATE
Ann Joo Resources RM2.97: Buy
Riding on bullish construction cycle Shariah-compliant

Looking forward to demand rebound. 4Q10 results may undershoot market's expectation by 25% due to weak ASPs. However, we think market is likely to look beyond the poor results and impute for volume recovery in 2011-12. Greater visibility of domestic pump-priming is raising the profile of construction steel sector, yet valuation remains a 35% discount to KLCI. Maintain Buy, with a revised TP of RM3.30 as we roll-over our valuation to 2012 EPS at an unchanged PER of 11x.


Technicals
The FBM KLCI closed higher by 3.95 points at 1,539.55 yesterday. Its resistance areas of 1,540 and 1,558 will cap market gains, whilst the obvious support areas are located at 1,515 and 1,538.

Trading ideas for today are two BUY calls on DAYANG and BSTEAD.


Other Local News
MPHB: Expected to announce major acquisition. Trading in the securities of Multi-Purpose Holdings Bhd (MPHB) was suspended from 2.30pm on Tuesday, Feb 8, pending a material announcement. MPHB will be announcing a major acquisition today, reliable sources said, although speculation is rife that the company could also be announcing the re-listing of its gaming subsidiary Magnum Corp Sdn Bhd. (Source: The Star)

PJD: Plans RM1.7b projects by Q3. PJ Development Holdings Bhd (PJD) will be launching four projects worth about RM1.7b by Q3 2011. The projects are located in Sri Hartamas and Cheras in Kuala Lumpur, Butterworth in Penang, and Kuantan in Pahang. In Sri Hartamas, PJD will launch Duta Kingsbury, comprising more than 300 units of condominiums. (Source: Business Times)

Unisem: Plans to spend RM250m to ramp up plant expansion. Unisem (M) Bhd may spend more than RM250m this year to construct and equip new plants as capacity fills up with rising sales. Among others, Unisem plans to build a new plant in Ipoh, Perak, as the existing facility is nearing its production limit even after an expansion in 2010 to upgrade the assembly, test and wafer-bumping capabilities. (Source: The Malaysian Reserve)

Banking: Below 10m credit cards issued, corporate loans growth to continue. The total number of credit cards in circulation in the country has dropped below 10m, partly affected by the RM50 service tax introduced in Budget 2009 and as more people opt for debit cards. Separately, corporate loans growth fuelled by working capital loans is expected to continue its upward trend this year supported by the multitude of projects under the Economic Transformation Programme (ETP) and the 10th Malaysian Plan (10MP). (Source: The Star)

Autos: Earlier liberalization? The government may bring forward the liberalization of the automotive industry to several years earlier than 2020, amid mounting pressure for a level playing field between national and non-national players, and as foreign automakers express keen interest to set up or expand their manufacturing presence in the country. Financial benefits such as R&D grants and soft loans, mainly benefit local companies, are likely to cease with liberalization. Protective policies would have to be abolished too. (Source: The Edge Financial Daily)

Property: UOA to list development arm. The board of United Australia Ltd (UOA) which is listed primarily on the Australian Stock Exchange (ASX), has submitted documents to Bursa Malaysia for a proposed listing of its development arm on the main market. UOA hopes to have its development arm listed on Bursa by June 2011. (Source: The Edge Financial Daily)

Property: Proposal for higher licence deposits set to test developers. The possible raising of the deposit required for a property developer's licence may not reduce the number of abandoned projects, but could instead lead to costlier homes, said the Real Estate and Housing Developers Association (Rehda). (Source: The Edge Financial Daily)