Maybank IB Views

Gamuda RM3.79: Buy
Earnings uptrend intact Shariah-compliant

Above our expectations. 1HFY11 results included a RM16m positive accounting adjustment at SPLASH post-IC12 implementation, which was not reflected in our forecast. RM183m net profit (+20% YoY) made up 51% of our pre-revision RM355m full-year forecast. We raise our FY11-13 net profit forecasts by 8-9% p.a. to reflect this adjustment. Being non-cash in nature, our DCF valuation for SPLASH is unchanged and this too, has no impact on our RM4.45 RNAV-based target price for Gamuda. The stock remains our top pick in construction. Maintain Buy.

Technicals
The FBM KLCI rose marginally by 1.87 points to 1,513.84 yesterday. Its resistance areas of 1,515 and 1,529 will cap market gains, whilst the obvious support areas are located at 1,497 and 1,513. Due to the DJIA’s rebound tone last night, we will see the FBM KLCI in a slightly firmer mode today.

Daily Trading idea is a Short-Term Buy call on PCHEM.

Other Local News
Wah Seong: To make fans, blowers. Wah Seong Corp Bhd will set up a joint venture with PT Agrindo Prima Lestari (PTA) to manufacture industrial fans and blowers for the palm oil industry and other industries utilizing similar products in Indonesia. (Source: Bursa Malaysia)

SEGi: Plans 50% dividend payout. SEG International Bhd (SEGi) has announced a dividend policy to distribute a minimum of 50% of its group net profit to shareholders with effect from the financial year ending Dec 31, 2011. (Source: The Edge Financial Daily)

Transmile: Gets RM200m from aircraft sale. Transmile Group Bhd has completed the disposal of four of its aircraft to Federal Express Corp for USD67m (RM200m), paving way for the company to pare down its long term borrowings that totaled RM531.6m as at Dec 31, 2010. (Source: The Edge Financial Daily)

Autos: Toyota to restart hybrid vehicle output in Japan. Toyota Motor Corp would restart production of three hybrid models (Prius, Lexus HS250h and CT200h) on Monday after a massive earthquake this month disrupted output across the industry. (Source: The Edge Financial Daily)

SCORE: Nine companies investing RM20b in Score so far. Nine companies have to date confirmed investments totalling RM20b in the Sarawak Corridor of Renewable Energy (Score). This does not include the RM2b investment by a Taiwanese company in the halal industry hub. (Source: The Star)

Plantation: 'Abolish windfall tax' call. Four national oil palm associations which represents over 80% of the country's oil palm fraternity has submitted a joint memorandum to the Prime Minister, urging the Government to seriously re-consider abolishing or reviewing the imposed crude palm oil (CPO) windfall profit tax (WPT) for the sector. (Source: The Star)