RHBInvest Research

Top Story: 4Q2011 Market Outlook & Strategy – Perilous crossroads; Challenging times ahead

Strategy Update

¨ The US economic recovery has slowed to a crawl, while Europe is not just lurching from one crisis to another, it is lurching into a new one before the previous one is solved. There is a growing risk that sustained weak confidence could exert downward pressure on demand and business activity worldwide. At this stage, both the US and Europe cannot withstand another shock and any further escalation of the crises could potentially tilt the global economy into a “double-dip” recession. Nevertheless, in our view, this can still be avoided if political leaders get their acts together fast enough to contain the debt crises and avert a contagion given that global trade has not fallen off the cliff.

Corporate Highlights

DRB Hicom: Cautious outlook Market Perform

Company Update

¨ We recently downgraded our call on the auto and banking sectors to Underweight (from Neutral) on the back of our increasingly bearish view on the outlook for the global economy.

Gamuda: FY07/11 net profit grows 32% yoy Outperform

4QFY11 Results / Briefing Note

¨ FY07/11 net profit came in within our forecast and the market consensus.

Jaya Tiasa: 1QFY12 net profit more than doubled yoy on higher CPO contribution Outperform

1QFY12 Results

¨ QFY04/12 net profit of RM55.9m came within expectations

Hiap Teck: FY07/11 net profit declines by 46% yoy Underperform

4QFY11 Results

¨ FY07/11 net profit came in above our and consensus expectations. The variance against our forecast came largely from a deferred tax adjustment in 4QFY07/11 of RM6.8m.

VS Industry: No surprises but earnings risks rising Market Perform (down from OP)

4QFY11 Results

¨ FY07/11 core net profit of RM39.1m was in line with expectations, at 102.6% of our full-year estimate.