Maybank IB Views

YTL Power International RM2.22: Buy
Great results tempered by poor dividends Shariah-compliant

Mixed signals. We are impressed that YTLP recorded earnings growth YoY despite start up losses at YES but disappointed that third interim net DPS remain subdued at 1.875 sen. We believe that this maybe due to it conserving cash ahead of its joint bid for the 2,000MW Pemalang IPP in Central Java. Maintain Buy call and RM2.70 DCF based target price pending a meeting with management.

KNM Group RM2.53: Buy
Soft 1Q, expects stronger quarters ahead Shariah-compliant

Weak results but hopes stay afloat. 1Q11 results were sub-par, underlying the margin compression effect from the low-yielding projects secured in the past. We maintain our forecasts for now. Top line recovery is visible but KNM needs to deliver its normalised margins and on bottom line to rerate. KNM remains a prospective long-term Buy.

Star Publications (Malaysia) RM3.35: Hold
Catalyst in M&As Shariah-compliant

Results delivered, M&As next. Star's 1Q11 results were within expectations. Our earnings estimates are marginally tweaked for higher adex growth assumption, offset by creeping staff costs. Maintain Hold with a marginally lower SOP-based target price of RM3.69 (-1%). The focus is now on further M&A activities enabled by the RM200m it recently drew down from its CP/MTN facility.

WCT RM3.04: Buy
No surprises Shariah-compliant

Reiterate Buy. 1Q11 net profit of RM37m made up 20% of our full-year forecast. The results were in line with house and street expectations. We maintain our earnings forecasts, expecting stronger quarters ahead to meet our 31% net profit growth projection for 2011. Target price is unchanged at RM3.75 based on sum-of-parts (15x 2012 PER plus 20sen value enhancement for KLIA2 retail concession).

Sunway City RM5.05: Hold
On track; expect stronger 2H Shariah-compliant

Accept offer. RM35m 1Q11 core net profit was in line. We maintain our earnings forecasts and RM5.10 TP (offer price for merger with Sunway Holdings). However, we downgrade SunCity to a Hold since its share price is approaching the offer price. We advocate shareholders to accept the SunCity-SunHoldings merger offer, which would result in a bigger entity with an e.RM3.6b market capitalisation and better liquidity. We estimate RNAV for the merged entity to be around RM3.70.

AEON Co RM6.45: Buy
2H has to catch up Shariah-compliant

Results in line. 1Q11 core net profit of RM35.7m (-13.3% YoY, -18.9% QoQ) was 20% of our and street estimates, after stripping off RM10.9m of insurance claims on its shopping centre in Melaka for a fire in 2009. We maintain our forecasts for now, expecting a stronger 2H to make up our full-year forecasts. 2H should strengthen with the reopening of the 1 Utama store, in time for the Raya and year-end festive seasons

Ann Joo Resources RM2.90: Buy
Seeing domestic cyclical growth Shariah-compliant

Back in the black. 1Q11 ex-forex net profit of RM34m (4Q10: RM3m net loss, 1Q10: RM42m net profit) was inline with expectations, making up 19% of our full-year forecast and 18% of consensus. Earnings growth momentum is likely to sustain on the commencement of big-ticket construction jobs (i.e. LRT Package A). Maintain Buy with a target price of RM3.30 (11x FD 2012 PER).

Technicals
The FBM KLCI gained 7.37 points to close at 1,540.94 yesterday. Its resistance areas of 1,542 and 1,555 will cap market gains, whilst the obvious support areas are located at 1,525 and 1,540.Due to the DJIA’s marginally firmer tone last night, we will see some benign trading activities today.

Daily trading idea is a Short-Term Buy call on DKSH.

Other Local News
RHB Cap: Abu Dhabi bank to meet over stake sale. A decision on the sale of the 25% stake held by Abu Dhabi Commercial Bank (ADCB) in RHB Capital Bhd is expected after ADCB board meeting on May 31. (Source: The Star)

Ann Joo: Plans expansion. Steel maker Ann Joo Resources Bhd is looking at expanding its operations across South-East Asia via joint ventures (JVs) or mergers and acquisitions (M&As) in greenfields and small regional steel millers. (Source: The Star)

Wah Seong: Tipped for LNG pipe coating job. Wah Seong Corp Bhd is close to bagging a pipe coating job relating to the Australia Pacific liquefied natural gas (APLNG) project, valued at about RM122m (USD40m). The project is expected to be given out in the next one to two months. (Source: The Edge Financial Daily)

Property: Tycoon Li Kashing firm buying malls in Malaysia. Singapore-based ARA Asset Management Ltd, which is linked to Hong Kong tycoon Li Kashing, is in different stages of negotiation to buy between five and 10 malls throughout Malaysia. Its second Asia Dragon Fund has a fund size of USD1b to buy Asian assets. (Source: The Star)

Consumer: Govt to review subsidy if oil price hits USD110-120 per barrel. The government has decided to maintain the prices of RON95 petrol , diesel, and liquefied petroleum gas (LPG), but will review the fuel subsidy if oil price reaches between USD 110-120 per barrel. (Source: The Edge Financial Daily)

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RHBInvest Research

AFG: Building the business for longer term

Market Perform

v AFG held a briefing yesterday in relation to its 4QFY11 results.

v The group’s medium term (3-5 years) targets were unchanged, which are:

1) gross impaired loans ratio that is in line with industry

2) CIR of 45-48% (currently 48%)

3) ROE of 14-16%

4) Dividend policy that pays “as much as we can afford, whenever we can”.

Corporate Highlights

Ann Joo: Turns around in 1QFY12/11 on margin expansion

Underperform

1QFY12/11 net profit came in within expectations. Ann Joo recorded a net profit of RM42.3m in 1QFY12/11 (from a net loss of RM2.7m in the previous quarter) as the impact of the steel market recovery finally kicked in and margins expanded.

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Annjoo downtrend

Annjoo daily chart

Please look at the chart. Currently Annjoo is in downtrend mode.

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RHBInvest Research

Sime Darby:

• 2QFY11 Results/Briefing Note
• Core net profit rose 22% yoy in 1HFY11 on the back of an 18% yoy rise in turnover, coming mainly from higher margins in the heavy equipment and motor divisions, offset slightly by lower margins in the plantations and energy & utilities divisions.
• Target price is reduced to RM10.60 (from RM11.10). Maintain Outperform.

Corporate Highlights

Ann Joo: Underperform

• 4QFY10 Results/Briefing Note
• Net loss in 4QFY12/10 due to lower margins
• No change to our forecasts. Fair value is RM3.02 based on 10x FY11 fully diluted EPS of 30.2sen.

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RHBInvest Research

RH Petrogas:

New Coverage ( Singapore )
RH Petrogas (RHP) is a new independent oil company, listed on the Singapore Stock Exchange, that is ultimately owned by Malaysia ’s Rimbunan Hijau Group.
We forecast FY10-12 net earnings of S$1.1m, S$3.0m and S$3.6m.
Fair value estimate to RM1.43/share.
We initiate coverage on the stock with an Outperform call.

Corporate Highlights

AMMB:

• Briefing Note (published 21 Feb 2011)
• AMMB Positioned for future rate hikes
• No change to our earnings forecasts. Fair value of RM7.42 and Outperform call maintained.

Ann Joo:

Results Preview

• FY10 results to come in below expectations
• Indicative fair value is reduced to RM3.02 (from RM3.14).

Maybank:
2QFY11 Results/Briefing Note
2QFY06/11 results were within our and consensus expectations. More dividend cheer.
No change to forecasts. Fair value of RM10.20 and Outperform call maintained.

Parkson:

• Company Update
• PRG 4QFY12/10 results below expectations
• Fair value is revised to RM6.55 (from RM7.10 previously) after our PRG earnings adjustment. Maintain Outperform.

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Maybank IB Views

COMPANY UPDATE
Ann Joo Resources RM2.97: Buy
Riding on bullish construction cycle Shariah-compliant

Looking forward to demand rebound. 4Q10 results may undershoot market's expectation by 25% due to weak ASPs. However, we think market is likely to look beyond the poor results and impute for volume recovery in 2011-12. Greater visibility of domestic pump-priming is raising the profile of construction steel sector, yet valuation remains a 35% discount to KLCI. Maintain Buy, with a revised TP of RM3.30 as we roll-over our valuation to 2012 EPS at an unchanged PER of 11x.


Technicals
The FBM KLCI closed higher by 3.95 points at 1,539.55 yesterday. Its resistance areas of 1,540 and 1,558 will cap market gains, whilst the obvious support areas are located at 1,515 and 1,538.

Trading ideas for today are two BUY calls on DAYANG and BSTEAD.


Other Local News
MPHB: Expected to announce major acquisition. Trading in the securities of Multi-Purpose Holdings Bhd (MPHB) was suspended from 2.30pm on Tuesday, Feb 8, pending a material announcement. MPHB will be announcing a major acquisition today, reliable sources said, although speculation is rife that the company could also be announcing the re-listing of its gaming subsidiary Magnum Corp Sdn Bhd. (Source: The Star)

PJD: Plans RM1.7b projects by Q3. PJ Development Holdings Bhd (PJD) will be launching four projects worth about RM1.7b by Q3 2011. The projects are located in Sri Hartamas and Cheras in Kuala Lumpur, Butterworth in Penang, and Kuantan in Pahang. In Sri Hartamas, PJD will launch Duta Kingsbury, comprising more than 300 units of condominiums. (Source: Business Times)

Unisem: Plans to spend RM250m to ramp up plant expansion. Unisem (M) Bhd may spend more than RM250m this year to construct and equip new plants as capacity fills up with rising sales. Among others, Unisem plans to build a new plant in Ipoh, Perak, as the existing facility is nearing its production limit even after an expansion in 2010 to upgrade the assembly, test and wafer-bumping capabilities. (Source: The Malaysian Reserve)

Banking: Below 10m credit cards issued, corporate loans growth to continue. The total number of credit cards in circulation in the country has dropped below 10m, partly affected by the RM50 service tax introduced in Budget 2009 and as more people opt for debit cards. Separately, corporate loans growth fuelled by working capital loans is expected to continue its upward trend this year supported by the multitude of projects under the Economic Transformation Programme (ETP) and the 10th Malaysian Plan (10MP). (Source: The Star)

Autos: Earlier liberalization? The government may bring forward the liberalization of the automotive industry to several years earlier than 2020, amid mounting pressure for a level playing field between national and non-national players, and as foreign automakers express keen interest to set up or expand their manufacturing presence in the country. Financial benefits such as R&D grants and soft loans, mainly benefit local companies, are likely to cease with liberalization. Protective policies would have to be abolished too. (Source: The Edge Financial Daily)

Property: UOA to list development arm. The board of United Australia Ltd (UOA) which is listed primarily on the Australian Stock Exchange (ASX), has submitted documents to Bursa Malaysia for a proposed listing of its development arm on the main market. UOA hopes to have its development arm listed on Bursa by June 2011. (Source: The Edge Financial Daily)

Property: Proposal for higher licence deposits set to test developers. The possible raising of the deposit required for a property developer's licence may not reduce the number of abandoned projects, but could instead lead to costlier homes, said the Real Estate and Housing Developers Association (Rehda). (Source: The Edge Financial Daily)

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KLCI Steel Counter ; Annjoo, Lionind, Pmetal

Lionind Weekly Chart - uptrend

Pmetal Weekly Chart - Strong uptrend


Annjoo Weekly Chart - just broke downtrend line

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Bought Uchitec at RM1.32

Our stock market currently in bullish mode. Bought Uchitec yesterday at RM1.32.

Last week I sold my Pelikan at RM1.25 and Eksons at RM1.02. Tried to decrease the quantity of my stock portfolio. After this I will avoid the penny stock such Saag and Hubline. The cheap stock is much easy to be manipulated.

Current my stock portfolio are as follow:

Ranhill at RM0.855
Saag at RM0.125
Latexx at RM3.65
Annjoo at RM2.65
Hubline at RM0.24
Uchitec at RM1.32

I am not monitor closely my share actually since I trade it in longer timeframe. But if the stock price exceed 10% just trading for a few days, I will take partial profit. 10% for me is good enough than nothing. Am I right? How about you?

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Annjoo and Pelikan - The Uptrend still intact

Pelikan weekly chart

Annjoo weekly chart

Annjo0 and Pelikan still in uptrend. The broken downtrend line still valid until to today. My Annjoo still not sold even partial profit. My Pelikan already sold at Rm1.25.

Any share counter has been monitored or to be highlighted? I am sure there will be on construction theme play next.

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RHBInvest Research

Top Story

Building Materials

Steel Sub-sector: Ann Joo vs. Southern Steel.
Still premature to turn bullish on the steel sub-sector.

Macro View

Trade

• Exports slowed down markedly in Sep.
• We expect the country’s exports to slow down in 2011, after a strong rebound in 2010.
  

BNM Measures

• Bank Negara Malaysia announced tightening measure on property financing.
• Move is to ensure a stable and sustainable property market.
  

Sector Call

Property

• The overhanging issue is now over.
• Maintain Overweight on the sector.
• We continue to like SP Setia (OP, FV = RM5.94) and IJM Land (OP, FV = RM3.50).

Banks

• BNM implements LTV cap of 70%
• Overweight stance on the sector maintained.

Corporate Highlights

Sunrise

• Suspension + unusual interim dividend.
• Maintain Outperform call and fair value of RM3.30

Daibochi

• The rising raw material price predicament.
• Fair value is RM3.10. We downgrade our call to Market Perform.

Unisem

• Guiding for a weaker 4QFY12/10.
• Fair value is RM2.31. Maintain Outperform.

Mah Sing

• 2 land banking deals cost RM166.5m
• Fair value is RM2.40. Maintain Outperform.

QL Resources

• Private placement, share split, and free warrants issue.
• Fair value is RM6.46. Maintain Outperform.

Technical Highlights


Daily Trading Strategy

• Trading is expected to be volatile today.
• Compounded with a drastic move by the Bank Negara late yesterday to curb speculative purchase on property sector.
• Ahead of the shortened week due to the Deepavali holiday on Friday, the trading sentiment in local bourse is expected to stay cautious.
• Technically, if the index manages to remove Monday’s high of 1,511.24, the index will gear towards the historical peak at 1,524.69.

Daily Technical Watch: Mulpha

• Turn bullish only if it sustains at above RM0.52 in the near term.
• Immediate Support at RM0.52
• Immediate Resistance at RM0.62

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Views & News, Maybank IB (2010-11-03)

SECTOR UPDATE

Plantations: Neutral

US Dollar takes centre stage
The Fed meets tonight, commodity prices could trend higher. Depending on what transpires at the Fed meeting tonight, further USD weakness is a possibility. This could push devastating rot diseases infected on oil palm trees. ACGT was targeting to come out with a diagnostic tool that could detect early-stage ganoderma infection on oil palm trees by 2015. (Source: The Star).

RESULTS REVIEW

TH Plantations RM1.68: Hold
3Q10: Pricing issue persists Shariah-compliant
Raising earnings. We raise our 2010-11 earnings by 12.1% and 2.2% respectively after incorporating 1) higher ASP's (2010: RM2,300 to RM2,550, 2011: RM2,400 to RM2,600) and 2) higher minority contribution. While THP is attractively valued relative to peers, we believe the discount is merited given the company's almost perennial pricing issues. Maintain Hold with a higher target price of RM1.75.


Technicals
The FBM KLCI dropped slightly by 3.09 points yesterday to end at 1,506.57. Its resistance areas at 1,509 and 1,524 may cap market gains, whilst its support areas are located at 1,490 and 1,506. Due to the firm tone in the USA last night, we may see the FBM KLCI in a strong mode today - with blue chip and mid-cap buying that might be curtailed by some later profit-taking activities.

Daily trading Idea is a SHORT-TERM BUY call on TASCO.

Other Local News

Genting Plantation: Beefing up R&D activities. Genting Plantation's subsidiary, ACGT Sdn Bhd, yesterday announced it had completed the sequencing, assembly and annotation of ganoderma, a white fungus known for its devastating rot diseases infected on oil palm trees. ACGT was targeting to come out with a diagnostic tool that could detect early-stage ganoderma infection on oil palm trees by 2015. (Source: The Star).

Proton: To offer hybrid car priced below RM100,000. Proton Holdings Bhd is looking to offer its first hybrid car at a competitive price of below RM100,000. Proton is said to be developing hybrid as well as electric engines with British company Frazer-Nash Research, South Korea's LG and its Britain based subsidiary Lotus that are expected to launch commercially next year. (Source: The Malaysian Reserve)

TNB: Inks energy purchase deal with KUB-Berjaya. Tenaga Nasional Bhd (TNB) signed an agreement for the purchase of electricity generated by a small renewable energy (RE) power project developed by KUB-Berjaya Energy Sdn BHd (KUBBE) for RM1.84m annually for a period of 21 years. The RE power plant which utilizes landfill gas (methane gas) as fuel, is located in Bukit Tagar, Selangor and will have an export capacity of 1MW to TNB. (Source: The Malaysian Reserve)

Boustead: RM1b bond bid to buy Pharmaniaga. Boustead Holdings Bhd, plans to raise up to RM1b from a bank guaranteed medium term notes (MTN) programme. Proceeds from the seven year MTN would be used mainly to part finance the acquisition of Pharmaniaga Bhd and expand its landbank as well as pare down short-term borrowings. Malaysian Rating Corp Bhd has assigned an indicative long-term rating of AAA for the proposed MTN with a stable outlook. (Source: The Malaysian Reserve)

Communications: MCMC introduces new 11-digit mobile phone number format. The Malaysian Communications and Multimedia Commission (MCMC) will introduce a new mobile phone number format with 11 digits effective Dec 15 this year. The new format would use the 3+8 structure compared to existing 3+7 and all service providers would use a similar "011" prefix, for example, 011 1234 5678. The existing structure that involves 31m numbers are not required to migrate to the new 3+8, as both will co-exist after the roll-out. The new shared prefix "011" could accommodate 900m numbers compared to the 60m numbers with 3+7 structure. (Source: Bernama)

Steel: Association members to invest RM5b. The nine members of the newly formed Malaysia Steel Association (MSA) will invest RM5b in the next three years to boost their cumulative capacity by 3.2m tonnes a year, making Malaysia one of the biggest steel manufacturers in Asean. The nine founding members are Amsteel Mills Sdn Bhd, Ann Joo Steel Bhd, Ann Joo Integrated Steel Sdn Bhd, Antara Steel Mills Sdn Bhd, Kinsteel Bhd, Malaysia Steel Works (KL) Bhd, Megasteel Sdn Bhd, Perfect Channel Sdn Bhd, and Perwaja Holdings Bhd. (Source: The Star)

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Assessment on Annjoo

Annjoo weekly chart

Assessment on my stock holding; Annjoo

I am still holding Annjoo counter. The last session Annjoo was trading at RM2.99. The longterm downtrend already broken last week. Annjoo daily chart showing that the trend turning down.

My first target to dispose Annjoo at RM3.3o succeed during trading time on last Monday (partially). Next target will be at RM3.80. I am still holding 5500 units to be disposed. Maybe need some time to achieve at the price level. 3/4 months??? Anyway, this November Annjoo will announce their latest financial. If the fundamental has changed, than I need to reevaluate back this share counter.

Happy investing!!!

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Stocks in Steel Sector

Pmetal daily chart - stock in uptrend mode

Annjoo daily chart - downtrend line broken

Perwaja daily chart - stock in uptrend mode

CSCSteel daily chart - stock in uptrend mode

Lionind daily chart - stock in uptrend mode

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RHBInvest Research Highlights 19th October 2010

Top Story

ILB:

• Named partner in Hong Leong Asia's new warehouse project in China
• Fair value is RM1.47. Maintain Outperform.

Corporate Highlights

Public Bank:

• 9MFY10 net profit raises 19.7% yoy.
• Fair value is RM14.70. Outperform call maintained.

Technical Highlights

Daily Trading Strategy:

• The index must reclaim the 10-day SMA soon.
• If no immediate rebound to above the 10-day SMA today, the index could retrace towards the recent technical gap at 1,472.32 - 1,476.05.
• However, the medium- to long-term technical outlook will remain positive if the index manages to sustain at above the 1,450 level and the 40-day SMA near 1,453.

Daily Technical Watch:

Ann Joo Resources

• Forming a support near the SMAs prior to any technical recovery.
• Immediate Support at RM2.98
• Immediate Resistance at RM3.38

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My target for Annjoo is RM3.30

Annjoo daily chart Oct 2010

Annjoo is in uptrend mode. My target for Annjoo is RM3.30. I am using a trendline set target. MACD already made golden cross... Happy investing!!!

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