RHBInvest Research

Top Story: Penang Property Update

• Sector Update
• Property sector is the key beneficiary of all the infra developments and strong capital investment flow in Penang.
• IJM Land and E&O, which are the prime beneficiaries of the upcoming major infra developments and strong capital investment flows into the Penang state.
• Our estimated fair value for E&O is RM1.91,we maintain our Overweight stance on the sector. Our top picks are IJM Land and Mah Sing.

Sector Call

Banking:

Sector Update

1QCY11 report card
Low loan impairment allowances provides relief to slow start
No change to our Overweight stance on the sector.

Media:

Sector Update 1Q11

1. Apr Adex For TV and Print Grew 17.8% YoY
2. Media Prima remains our preferred pick given its position as the largest integrated media player in Malaysia. In addition, we believe there is still scope for further synergies to be unlocked across its different platforms.
3. No change to our Overweight call on the sector.

Building Material:

Sector Update

• Impact of electricity and natural gas tariff review
• Maintain Underweight for the sector.

Corporate Highlights

TNB:

Briefing Note

• TNB’s outlook received a boost after receiving an average tariff hike of 7.12% effective 1 Jun and the formalisation of a fuel cost pass-through (FCPT) formula.
• Fair value raised to RM8.00 (previously RM5.60). Upgrade to Outperform from Underperform.

CBIP:

Results / Visit Note

• Benefitting from plantation arm
• Raise target price to RM4.90 (from RM4.65), after updating for CBIP’s latest net debt figure.
• No change to our Market Perform recommendation on CBIP.

MCIL:

Results Note

• FY11 Ends On A High Note
• Fair value is raised to RM1.43 (from RM1.38), which is based on unchanged target CY11 PER of 13x.
• We reiterate our Outperform call on the stock.

Petronas Gas:

News Update

• Minimal Impact From Government’s Gas Price Hike
• We maintain our RM13.95/share fair value and Outperform call on the stock.

Petronas Chemicals:

News Update

• Minimal Impact From Government’s Gas Price Hike
• Fair value for the stock decreases slightly to RM8.92/share (from RM9.02/share previously). We maintain our Outperform call on the stock.