RHBInvest Research

Top Story: Benchmarking –

Market Update (published 27 May 2011)

• The review of the FBM indices will be based on 31 May share prices.
• YTD, the FBM KLCI has risen by just 1.4%. Looking ahead, notwithstanding concerns about the strength of US and EU economic growth, we believe the market will be driven by M&A, corporate restructuring and to some extent the follow-through from earlier-announced ETP projects. This is further supported by decent market earnings growth of 11.3% and 12.0% for 2011-2012.

Corporate Highlights

WCT :

Briefing Note

• Still Confident About RM2bn New Jobs In FY12/11
• Maintain Underperform. Fair value is RM2.37.

Petronas Chemicals :

Briefing Note

• Product Prices, Fertilisers And Methanol Division Capacity Utilisation Keep Earning Intact
• We maintain our Outperform call and RM9.02/share fair value.

MMHE :

News Update
Signing MOU For Sime Darby’s Pasir Gudang Yard Acquisition

Sime Darby :
3QFY11 Results/Briefing Note

• In 3QFY11, Sime recorded a net EI loss of RM7.9, comprising forex gain RM0.5m, the RM98.5m writeback for the Maersk Oil project, a RM73.9m impairment on biodiesel and bioganic assets and a RM33m impairment loss on a property project, bringing total EI for 9MFY11 to a loss of RM11m.

Fair value has been reduced slightly to RM10.60 (from RM10.70). Now that the sale of the O&G division has been announced, we believe Sime would need to gain further ground by being more focused on its other divisions to improve operational efficiencies, to improve its market value and standings in the different industries it operates in.

We maintain our Outperform recommendation on the stock.



IJM Land :

Results / briefing note
The value has yet to be fully appreciated
We maintain our Outperform call with an unchanged FV of RM3.28, IJMLD continues to be our top pick for the sector.



IJM:
FY03/11 Performance Weighed Down By Construction Losses In 4Q
Maintain Underperform. Fair value is RM6.12.Sime Darby :

3QFY11 Results/Briefing Note

• In 3QFY11, Sime recorded a net EI loss of RM7.9, comprising forex gain RM0.5m, the RM98.5m writeback for the Maersk Oil project, a RM73.9m impairment on biodiesel and bioganic assets and a RM33m impairment loss on a property project, bringing total EI for 9MFY11 to a loss of RM11m.
• Fair value has been reduced slightly to RM10.60 (from RM10.70). Now that the sale of the O&G division has been announced, we believe Sime would need to gain further ground by being more focused on its other divisions to improve operational efficiencies, to improve its market value and standings in the different industries it operates in.
• We maintain our Outperform recommendation on the stock.

IJM Land :

Results / briefing note

• The value has yet to be fully appreciated
• We maintain our Outperform call with an unchanged FV of RM3.28, IJMLD continues to be our top pick for the sector.

IJM:

• FY03/11 Performance Weighed Down By Construction Losses In 4Q
• Maintain Underperform. Fair value is RM6.12.