RHBInvest Research

Proton –Underperform (down from MP)

• Visit Note
• A long road ahead
• We downgrade our call to Underperform (from market perform) as we see business risks being heavily weighted on the downside with few positive catalysts within our investment horizon. Fair value to RM4.15 (from RM5.60).

Macro View

Inflation:

• Economic Highlights (published 23 Feb 2011)
• Rose to 2.4% in Jan, pointing to rising price pressure
• We expect inflation to grow at 3.0% (an upward revision from 2.8% previously) in 2011.
• As a whole, we expect the OPR to be raised by 50-75 basis points in 2H 2011 to bring it to a more neutral level of 3.25-3.50%.

Sector Call

Motor : Neutral

• Sector Update
• A decent start to 2011
• Staying Neutral on autos. We revise our 2011 and 2012 TIV forecast to +4.0% and +2.1% respectively, with the replacement cycle and sales growth already having peaked.

Corporate Highlights


MRCB: Trading Buy

• Ekovest-MRCB JV awarded LOI for River Of Life project
• Fair value is RM2.65. Maintain Trading Buy

PLUS: Underperform

• Deal is sealed – ceasing coverage
• We advise investors looking for stocks with a similar defensive quality like PLUS to consider telecom stocks, which offer high dividend yields supported by strong free cash flows.

AFG: Market Perform

• Briefing Note (published 23 Feb 2011)
• Staying conservative
• No change to forecasts. Fair value of RM3.60 and Market Perform call maintained.

Media Prima: Outperform

• 4QFY10 Results/Briefing Note
• FY10 core net profit jumped 132.4% yoy
• Fair value maintained at RM3.20. Reiterate Outperform.

Axiata: Market Perform

• 4QFY10 Results/Briefing Note
• Potential headwinds ahead
• Maintain Market Perform call and fair value of RM5.75