RHBInvest Research

Mutiara Goodyear:

• Visit Note
• A turnaround story
• New projects to be launched in 2011-2012 amounted to RM1.9bn. We expect earnings to leap frog with a growth of 67% in FY11 from FY10 annualised net profit of RM20.3m.
• Our fair value on the stock is RM1.60. At the current price, the stock is trading at 9x PE, which is reasonable for a small cap developer.

Macro View

Inflation:

• Economic Highlights (published 22 Feb 2011)
• Rising inflationary pressure and policy options
• We expect inflation to rise at a much faster pace of an average rate of 2.8% in 2011, compared with +1.7% in 2010.
• OPR to be raised by 50-75 basis points in 2H to bring it to a more neutral level of 3.25-3.50%.

Sector Call

Telecom: Overweight

Sector Update

• Celcom Axiata and TM have entered into MOU for strategic collaboration to provide fixed/mobile solutions.
• Another step towards convergence We maintain our earnings forecasts for now. Maintain Overweight. The sector is defensive against the growing unrest in the Middle East which may hurt market sentiment in the short term.
• Building Materials: Higher cement price effective 1st Mar
• Neutral

Sector Update

• YTL Cement: Fair value is raised to RM5.85
• Outperform
• Lafarge: Fair value is raised to RM7.87
• Market Perform (up from UP)

Corporate Highlights


MBM:

• Briefing Note
• Daihatsu winds back commercial vehicle franchise
• We maintain our Outperform call on valuation grounds. Our fair value of RM3.95 is unchanged.

Daibochi:

• Outperform (up from MP)
• Briefing Note
• Raw material prices stabilised
• Our fair value is raised to RM3.50 (from RM2.95). Upgrade to Outperform.

Amway:

• Briefing Note
• Forex to boost earnings
• Fair value is revised to RM9.35. We maintain our Outperform call on the stock.

Genting Plantation: Market Perform

• 4QFY10 Results/Briefing Note
• Optimistic management outlook on prices and production prospects .
• Fair value has been reduced to RM9.20 (from RM9.65), based.
• Maintain Market Perform.