Maybank IB Views

RESULTS REVIEW
Malayan Banking RM8.86
Upside surprise to dividends

Within expectations. Maybank's results were within expectations, with a 1HFY11 net profit of RM2.15b or 50% of consensus' RM4.32b. 2QFY11 net profit rose 13% QoQ largely on the back of much reduced credit charge offs; operating profit was flat (+1.3% QoQ). Dividends surprised on the upside with an interim net cash DPS of 3 sen and an electable portion of 18 sen net under the Dividend Reinvestment Plan.


KFC Holdings (M) RM3.85: Hold
A great 2010; more challenging 2011 Shariah-compliant

Done well, but downgrade to a Hold. KFC's share price has risen 92.5% over the last 52 weeks. While it continues to consistently deliver sustained top-line and >10% p.a. bottom-line growth, we see a lack of near-term catalysts. Although our DCF-value rises 8.4% post-2010 results to RM3.97/sh, this implies little upside to its current market price. At our new TP, KFC would trade at 16.7x 2012 PER.


TH Plantations RM1.90: Buy
4Q10: Charging ahead Shariah-compliant

A strong showing. Results were ahead of forecasts on stronger than expected 4Q10 performance driven largely by higher CPO prices. We raise our FY11 net profit forecast by 13% after incorporating higher average CPO price of RM3,100/t (+7%). THP remains a Buy with a higher RM2.35 target price (+9%). Valuation wise, THP is attractive at 8.1x, trading at 1sd below its mean one-year forward PER of 11x.


RCE Capital RM0.53: Sell
Strong quarter, but uncertainties still

Above expectations. 9MFY11 net profit made up 83% of our RM105m full-year forecast and 88% of consensus on sustained margins. We raise our FY11-13 net profit forecasts by 6% p.a.. Despite continous earnings delivery, the larger picture remains cloudy as there is no development yet on KOWAJA's compliance with cooperatives guidelines which affects RCE's earnings growth post FY11. Maintain Sell with an unchanged RM0.45 TP based on 0.7x P/B (end-2010).


Notion VTEC RM2.06: Buy
Profits rebound; special dividend surprise Shariah-compliant

NVB's earnings rebounded 64% QoQ in 1QFY11, fueled by stronger camera segment's performance and a RM2m currency gain. It surprised with special dividends (via treasury shares distribution of 13 shares for every 1,000 held). Our unchanged 2-year net profit CAGR forecast of 38% has upside potential. Clinching MSC tax status could further lift EPS by 6 sen. Maintain Buy with a RM2.40 target price.


RESULTS PREVIEW
Kossan Rubber Industries RM3.29: Buy
Better than peers at riding out the storm Shariah-compliant

Expect commendable 4Q10 results. Kossan's 4Q earnings are likely to have been stable QoQ (+17% YoY) on sustained EBIT margins. Such a performance would be highly commendable in our view, considering the fact that high latex prices had negatively impacted the margins and earnings of its latex peers in the recent quarter. Latex gloves presently account for 60% of Kossan's glove production with nitrile accounting for the remaining 40%. Kossan's share price has unjustifiably underperformed the bigger latex peers by 5% YTD and valuations are undemanding. Maintain Buy and DCF-derived TP of RM3.60.


Technicals
The FBM KLCI rebounded strongly by gaining 8.29 points at 1,525.85 yesterday. Its resistance areas of 1,526 and 1,544 will cap market gains, whilst the obvious support areas are located at 1,500 and 1,523.

Trading idea for today is a Buy call on KIANJOO.


Other Local News
Banking: Mizuho Malaysia gets MoF approval for its commercial banking licence.The licence would enable it to provide a full range of financial services to multinational companies seeking to establish and expand their broad manufacturing base. (Source: The Edge Daily)

Oriented Media: In reverse takeover. Bina Puri will be injecting its polyol manufacturing business and power assets in Indonesia into OMedia in exchange for new shares, making Bina Puri the largest shareholder in OMedia, after the reverse takeover (RTO) is concluded. Ace Market-listed OMedia is presently involved in the sale of information technology-related products and services. (Source: The Edge Daily)

Parkson: To accelerate expansion in China. MD Alfred Cheng said the company will open 8 to 9 stores a year through 2013, after opening 5 last year and spend up to RMB500m this year on new stores and remodeling existing outlets. (Source: Malaysian Reserve)

MAS: Offering up to 85% discount for all destinations. Malaysia Airlines (MAS) is offering up to 85% discount to all destinations in conjunction with the 8th edition of the Malaysia Airlines Travel Fair (MATF'11) from Feb 21 to Feb 28. The travel period for the fares is from March 21 to Dec 31. MAS is also offering up to 50% discount for business class seats for all of its destinations for the first time. (Source: Malaysian Reserve)

Healthcare: Medical records online by 2015. At least 20 government hospitals nationwide will be able to serve patients faster by 2015 when medical records are accessible online. However, having a common database for medical records has raised concerns on privacy and confidentiality. (Source: New Straits Times)