Maybank IB Views

COMPANY UPDATE
RHB Capital RM8.62: Buy
Robust loan growth targets

Valuations still justify a BUY. RHB Capital continues to offer value in terms of valuations, with the stock trading at a prospective 2012 PER of just 10.3x or a 16% discount to the average for the other four large banks of 12.3x. On a P/BV basis, it trades at a prospective 2011 P/BV of 1.64x versus a peer average of 2.3x and 1.7x for AMMB Holdings (Hold, TP:RM6.80), despite a higher prospective ROE of 15.1% vs 13.1% for AMMB. Our RM9.50 target price is maintained.

COMMENTS ON NEWS
S P Setia RM6.50: Buy
First foray into the "lion city" carries an important role Shariah-compliant

Maintain Buy. We are positive on SPSB's latest acquisition of Leong Bee Court in Singapore given its strategic location and fair pricing. Despite minimal impact to earnings and RNAV, this project is important as it will strengthen SPSB's brandname in Singapore and showcase its development capabities and this in turn, will boost demand for SPSB's properties in Malaysia by Singaporeans. We fine-tune our FY11-13 forecasts for the acquisition and raise RNAV by 1 sen. Our new TP is RM7.13 (10% premium to RM6.48 RNAV; ex-bonus TP is RM4.75).

Technicals
The FBM KLCI gave up Wednesday’s rebound gains as it lost 9.79 points to close at 1,525.80 yesterday. Its resistance areas of 1,525 and 1,550 will cap market gains, whilst the weaker support areas are located at 1,500 and 1,517.

Trading Idea for today is a Take profit call on CMSB.

Other Local News
KL Kepong: Is world's No. 1 nitrile latex supplier. Kuala Lumpur Kepong Bhd (KLK) is now the world's biggest synthetic latex producer, via its 19% British unit Yule Catto & Co plc. The business is also growing and it plans to build another plant at a yet-to-be decided location in Asia. (Source: The Star)

MAS: Eyes 15% fall in costs from fleet renewal. Malaysia Airlines (MAS) expects its costs to fall by 15% by 2015 from its fleet renewal programme that reduces fuel usage and maintenance cost. (Source: Bernama.com)

SEGi: In nurse training deal with S. Korea varsity. SEG International Bhd is partnering South Korea's Chung Cheong University to set up a nursing faculty at its Kota Damansara campus in Selangor. The academic collaboration is expected to contribute an increase in FY11 earnings of approximately 4% to the Group. (Source: Bursa Malaysia)

YTL: On the M&A trail. YTL Corp is looking for sizeable merger and acquisition (M&A) opportunities as highly geared companies may soon find themselves in hot water as the economic recovery brings inflationary pressures. (Source: The Edge Financial Daily)

Transportation: Final project on railway project to be ready. The East Coast Economic Region Development Council (ECERDC) is in the process of completing its final report on the proposed east coast railway project linking Kuala Lumpur-Tumpat, a distance of 550km. The route includes five districts- Bentong, Bera, Temerloh, Maran and Kuantan. (Source: The Edge Financial Daily)

Plantation: Boilermech expects revenue to jump by a fifth. Boilermech Holdings Bhd, soon to be listed on the ACE Market boiler maker for biomass power plants, expects profit after tax and revenue to rise by as much as a fifth this year, driven by existing contracts. (Source: The Star)