RHBInvest Research

Top Story: IJM Plantation – Short-term pain for long-term gain Market Perform

Visit Note
Key takeaways from our visit to IJMP’s estates and operations in Sandakan: 1) Heavy rainfall affected FFB production and OER; 2) Sold part of FY03/12 production forward; 3) Locked in 80% of fertiliser requirement for FY03/12; 4) Labour shortage of 10% currently; 5) Planted close to 9,000ha in FY03/11; and 6) Efficient facility, impressive long-term planning.



MMHE: Fair value unchanged at RM5.75 Underperform

Petronas unveiled plans for a US$20bn (RM61bn) refinery and petrochemicals complex in Pengerang, Johor last week.



Corporate Highlights

Dialog: Starting up the “Pengerang” engine Outperform

News Update
Dialog announced last week that the Johor state government had given the go ahead for the company to begin reclamation work for the proposed independent deepwater terminal in Pengerang. The total investment for the project is estimated at RM5bn over a 7-year period.

Kencana: Proposed acquisition to enter the subsea market Outperform

News Update
Kencana announced last week that it is looking to acquire Allied Marine & Equipment (AME), a company that specialises in subsea services for the oil and gas industry. The acquisition will cost RM400m, to be satisfied via the issue of 149.3m new shares at RM2.68 each.



DRB-Hicom: Keen to explore Bank Muamalat – Bank Islam merger Outperform

News Update
DRB-HICOM (DRB) issued a press release in a response to media reports that BIMB Holdings (BIMBH) had been approached to consider buying Bank Muamalat (BM).


CSC Steel: 1QFY11 net profit more than doubled qoq to RM24.0m Outperform

1QFY11 Results
1QFY11 net profit came in at 31% of our full-year forecast and 30% of the full-year market consensus. However, we consider the results within expectations as we expect lower margins in the next few quarters due to higher raw material cost.