Maybank IB Views

Tuesday, April 19, 2011

RESULTS REVIEW
Public Bank RM13.06: Hold
Slight forex impact on loans

No surprises. 1Q11 results accounted for 25% of our full-year forecast and consensus. Fundamentals remain very much intact with healthy loan growth, improving asset quality and robust ROEs. We nevertheless maintain our view that consumer demand is likely to taper off in 2H11 on the back of measures instituted recently coupled with inflationary pressure. To this end, we see little catalyst in the near term, while Public Bank's pricing is fair in our view (prospective 2011 P/BV of 3x, ROE: 23.9%). We maintain our Hold call with an unchanged DDM-derived TP of RM14.10 (payout ratio: 52%, cost of equity: 10.6%, terminal growth rate: 5%).

CapitaMalls Malaysia Trust RM1.12: Buy
On track; completed Gurney Plaza Extension acquisition

Maintain Buy. CMMT's RM25.8m 3M11 realised net profit (+13% QoQ) came in within expectations. CMMT has completed the RM215m Gurney Plaza Extension (GPE) acquisition which has further strengthened its position in the local retail industry. We raise our earnings forecasts by 10-13% to factor in GPE and the 144.9m new unit placement (RM1.06 issue price). Our DDM-based target price is raised to RM1.27 (+7 sen).

COMPANY UPDATE
Malaysia Marine and Heavy Engineering Holdings RM6.88: Hold
IM 2011: Pasir Gudang yard site visit Shariah-compliant

Better days ahead but prospects largely priced in. We are encouraged by the brisk activity at MMHE's Pasir Gudang yard in southern Johor. We expect job replenishment momentum to kick-off earnestly from May and foresee MMHE clinching RM4-5b new jobs over the next 12 months. These positives could momentarily stretch share price performance beyond the 26x 2012 PER of the sector's historical peak, above our fundamental TP of RM6.50 (22x EPS).

Technicals
The FBM KLCI advanced 5.98 points to close at 1,527.92 yesterday. Its resistance areas of 1,527 and 1,549 will cap market gains, whilst the weaker support areas are located at 1,517 and 1,525. The FBM KLCI has stalled at its new all-time and major high of 1,576.95 on 6 January 2011. The next key low sighted was at 1,474.38 (28 February 2011) and the next swing high was seen at 1,565.04 (4 April 2011).

Trading idea for today is a technical sell call on IOICORP.

Other Local News
Maybank: Gets approval to raise USD2b, Bio-Xcell gets funding from Maybank. Malayan Banking Berhad (Maybank) has obtained approval from the Securities Commission (SC) to establish a multi currency medium-term notes (MTN) programme of up to USD2b. Separately, Maybank and Malaysian Bio-Xcell Sdn Bhd (Bio-XCell) has signed an agreement for a RM250m Commodity Murabahah Term Financing - Islamic Facility (CMTF-i). (Source: Bursa Malaysia, The Star)

Axiata: Celcom signs fiberisation deal with Sacofa. Celcom Axiata Bhd signed a RM168m fiberisation leasing agreement with Sarawak-based Sacofa Sdn Bhd. With the completion of this project, Sarawakians will be able to enjoy enhanced services such as high-definition voice and video plus high-speed browsing with Celcom. (Source: The Star)

Affin: To convert Indonesia's Bank Ina into Islamic lender. Indonesia's conventional bank PT Bank Ina Perdana, which is being acquired by Affin Holdings Bhd will be converted into an Islamic bank - a process that will likely take two years. (Source: Business Times)

Construction: CMC, UK partner may win RM700m LRT job. CMC Engineering Sdn Bhd and UK's Colas (CMC-Colas) may win a contract worth some RM700m for electro-mechanical (E&M) system for the Kelana Jaya light rail transit (LRT) extension line. Tenders closed recently and Prasarana may award the contract by early May. (Source: Business Times)

Autos: Vehicle sales up 12.7% in March. Total vehicle sales surged 12.7% to 63,265 units in March 2011 from 56,139 units a year earlier due to a rush for deliveries and invoicing by companies that have their financial year ending in March. (Source: The Star)

Mining: Indonesian tin miner to list on Bursa Malaysia. Malaysia Smelting Corp Bhd (MSC) is proposing to list its Indonesian unit, involved in tin mining, on Bursa Malaysia's Ace Market. (Source: The Star)
Outside Malaysia

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