RHBInvest Research
Friday, April 15, 2011
Top Story: DRB Hicom
- New Coverage
- Slumbering Giant
- DRB has solid financials with significant balance sheet capacity to fund new businesses.
- We initiate coverage on DRB with an Outperform recommendation.
- Our sum-of-parts derived valuation of its various businesses amounts to RM4.20/share. After ascribing a 25% holding company discount, we arrive at our fair value for the stock of RM3.15/share.
Corporate Highlights
Lafarge:
- Visit Note
- Increase in domestic sales to drive earnings growth in 2011
- Rising cost of production remains a key concern. Nevertheless, we believe Lafarge will be able to pass on the higher costs given that domestic cement demand is expected to be robust.
- No changes to our earnings forecasts. Indicative fair value is RM7.87
SP Setia: Outperform
- News update
- Making its foray to Singapore
- Our fair value is raised to RM7.20, Maintain Outperform.
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