Maybank IB Views

Thursday, April 28, 2011

Media Prima RM2.61: Buy
The going is still good Shariah-compliant

Still a believer. After seeing a respectable 1Q11 industry gross adex growth of 13% YoY and speaking to media buyers, we opine that we have been too conservative with our adex growth assumptions. We raise our earnings estimates for Media Prima (MPR) by 13% to 23% p.a., after revisiting our assumptions. In our view, concerns on the impact of digitalisation are premature. Maintain Buy. Target price is raised to RM3.06 on an unchanged 17x 1-year forward PER post-earnings upgrade.

US Economy: FOMC
Fussing Over Many Considerations...

Staying on course... for now. US Federal Reserve's policymakers unanimously voted to keep the federal funds rate (FFR) at the record low of 0%-0.25% and maintained its commitment to complete the USD600b second quantitative easing (QE2) which started in Nov '10 and will end in June '11.

The FBM KLCI rose 2.57 points higher at 1,529.91 yesterday. Its resistance areas of 1,532 and 1,542 will cap market gains, whilst the obvious support areas are located at 1,515 and 1,529.

Trading idea for today is a Buy call on MPHB.

Other Local News
RHBCap: Chinese banks interested in ADCB's stake. Amid speculation that China Construction Bank is seeking BNM approval to acquire a stake in EON Capital, Chinese were also among those invited to tender for the block of shares in RHBCap that is to be put on the market by Abu Dhabi Commercial Bank (ADCB) . (Source: The Edge Financial Daily)

Tanjung Offshore: Bags RM15m contract from Murphy Sarawak. Tanjung Offshore Bhd won an RM15m contract by Murphy Sarawak Oil Co Ltd. for valve repair and maintenance services. The contract is to last till March 2014 with the option to renew for another two years. (Source: Bursa)

KFC Holdings: To invest RM45m in 25 new outlets this year. KFCH MD Jamaludin Md Ali said this after yesterday’s AGM adding that 10 of the outlets will be 'drive-thrus'. On its overseas expansion, nine outlets have been planned for India. Overseas top line contribution from Brunei and Singapore will come up to 15%. (Source: Business Times)

TH Plantations: Higher FFB output expected this year. The company is targeting 504,901mt of palm bunches from 463,949mt in 2010. The company aims to expand its land bank to 50,000 ha from 39,113 ha by 2010 and is looking at Sabah, Sarawak, Sumatra and Kalimantan. (Source: TheStar)

Rubber: Malaysian production may rise 6.5%. Higher prices may encourage farmers to boost production tapping and output may increase to 1m metric tonnes this year from 939,000 in 2010. Thai production may decline if rains persist across the country’s main southern growing region (Source: The Malaysian Reserve)

Timber: Sarawak's log production falls. Total production in 1Q 2011 was down 28% YoY due to a combination of bad weather and flooding and impoundment of the Rejang River basin. Log prices are however expected to be higher this year due to tighter supply bigger demand. (Source: Business Times)


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