Maybank IB Views

Mah Sing Group RM2.44: Buy
Starts small, aims big Shariah-compliant

Attractive land deal. We are excited over MSGB’s latest involvement in DBKL’s privatized urban regeneration project along Jln Tun Razak. More importantly, MSGB could be invited for the development of the remaining 54 acres land (worth RM8b GDV). We maintain our earnings forecasts and Buy call. While the deal would enhance our RNAV by about 7 sen, our RNAV is lowered by 11 sen to RM3.16, factoring the potential dilutive impact from its RM325m convertible bond issuance.

CB Industrial Product Holding RM4.16: Buy
New RM171m contract win Shariah-compliant

Potential upside to earnings. CBIP has clinched a RM171m contract to assemble special purpose vehicle from the government. We estimate the contract to lift our 2011-13 net profit forecasts by 3-8%, with a potential 14 sen upside (+3%) to our target price. Our earnings forecasts are maintained for now pending further updates from recent proposed estates disposal. Maintain Buy with an unchanged TP of RM4.75 (7x 2011 PER).

Technicals
The FBM KLCI rose 3.16 points to close at 1,554.85 yesterday. Its resistance areas of 1,554 and 1,574 will cap market gains, whilst the obvious support areas are located at 1,544 and 1,552.Due to the US markets’ major fall last night; we will see some initial selling activities in the local bourse today.

Trading idea is a Take profit call on PMETAL.

Other Local News
SapuraCrest: Wins new jobs in Australia. SapuraCrest Petroleum Bhd's flagship vessel Sapura 3000 has won jobs worth up to USD260m (RM780m) for the Gorgon natural gas project offshore Western Australia. The Gorgon project is one of the world’s largest natural gas projects and is a joint venture between Chevron's Australia subsidiaries and ExxonMobil Corp. (Source: The Edge Financial Daily)

CIMB: Ventures into Indian market. CIMB Group has entered the Indian market with the opening of its Mumbai office and the signing of a Business Cooperation Arrangement with Kotak Mahindra Bank Ltd. The cooperation is expected to cover areas of mutual interest, including merger and acquisition, advisory, trade finance and remittance. (Source: The Edge Financial Daily)

Catcha Media: Leong emerges as substantial shareholder. Justin Leong, grandson of the late Tan Sri Lim Goh Tong, has emerged as a substantial shareholder of Catcha Media Bhd with 6.7m shares or a 5.01% stake. (Source: The Edge Financial Daily)

Tech: BlackBerry maker mulls procurement hub in Penang. Research In Motion (RIM), the company which makes BlackBerry smartphones, is looking at establishing an international procurement centre (IPC) in Penang. The application to set up the centre has been submitted to the Malaysian Industrial Development Authority. (Source: The Star)

Property: KL among top three retail investment destinations in Asia. Pacific Star Group, one of Asia's leading real estate investment houses says commercial properties in Asia will continue to do well in the 2H11. Within the commercial sector, its top pick is retail real estate, whilst the top three destinations in the region for retail property investment are Hong Kong, Singapore and Kuala Lumpur. (Source: The Malaysian Reserve)

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Maybank IB Views

SECTOR UPDATE
Banking: Neutral
Household loans moderate

Neutral maintained. System loans growth moderated to 13.4% YoY in June from 13.8% YoY in May, with marginally slower household loan growth of 12.8% in June vs 13.0% in May and non-household loan growth of 14.2% in June from 14.7% in May. We remain Neutral on the banking sector with top picks being AMMB, BIMB and CIMB.
RESULTS PREVIEW
Eastern Pacific Industrial Corp RM2.80: Hold
2QFY11: Still on track, dependably steady Shariah-compliant

Gradual progress in earnings. 1H11 results, expected to be released in mid August, are projected to be stronger YoY with earnings growth of 10-12%. A 5sen interim dividend (+100% YoY) could be declared as we estimate EPIC has about RM100m cash on its balance sheet (RM0.60/share) and should enjoy solid cash-flows going forward. We maintain our Hold call but nudge up our TP to RM2.70 (+6%) as we roll forward our valuation basis to 2012 with an unchanged 8x PE multiple.

Technicals
The FBM KLCI lost 16.25-points and closed at 1,548.81 last Friday. The local market remained weak due to the US debt ceiling woes. Until the weekend, a US political impasse over the debt ceiling led to a much weaker global market tone. The weaker support areas for the FBM KLCI are located in the 1,507 to 1,543-zone. The next resistance levels of 1,548 and 1,597 will see heavy selling and liquidation activities.

Trading Idea is a Short-Term Buy on IVORY.

Other Local News
MAS: Appoints Md Nor as chairman. Malaysia Airlines (MAS) has announced the appointment of Tan Sri Md Nor Md Yusof (pic) as chairman effective Monday. Md Nor is an old hand and well-versed with the workings of MAS, having served as its managing director from 2001 to 2004. (Source: The Star)

Ivory: To double sales with reclaimed land project. Ivory Properties Group Bhd expects its newly acquired 102 acres of reclaimed land in Penang, with an estimated GDV of RM10b, to generate sales of about RM1.2b a year on average if the project is completed in eight years. Ivory is targeting sales of RM600m to RM700m this year from its existing projects compared to RM600m last year. (Source: The Edge Financial Weekly)

Press Metal: Unit secures RM400m loan facility. Press Metal Bintulu Sdn Bhd (PMB), a wholly-owned subsidiary of Press Metal Bhd, has secured a RM400m syndicated term loan facility to expand the second phase of its aluminium smelting plant in Samalaju, Sarawak. When fully commissioned, the new plant is expected to triple PMB's smelter capacity in Malaysia to 360,000 tonnes. (Source: The Star)

Jotech, AIC, AutoV: In RM696m merger plan. Temasek Foundation Sdn Bhd(TFSB), a special purpose company, is acquiring the entire interest, including assets and liabilities, of Jotech, AIC Corp Bhd and AutoV Corp Bhd for a total of RM696m. TFSB owned by Jotech Executive chairman Datuk Goh Tian Chuan, will then merge the companies to create a larger entity. (Source: Bursa Malaysia)

Plantation: Malaysia plans own palm oil cert scheme. Malaysia plans to come up with its very own national certification scheme on the sustainable production of palm oil to tell the world that its oil palm plantations are grown in a sustainable manner and do not involve the clearing of virgin forest. The certification scheme will cover areas not covered before such as deforestation. (Source: Business Times)

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Stocks to watchSarawak counters, Proton, Press Metal, Masteel, KUB

KUALA LUMPUR: Investors’ sentiment in the week ahead, starting Monday, April 18 would partly hinge on the outcome of the Sarawak state elections due late Saturday, April 16.

Sarawak-based companies had run up ahead of the dissolution of the state assembly in late March before easing off.Since then, market sentiment had been generallyl cautious on political concerns about the Sarawak polls, which are the most hotly contested in recent years.

Meanwhile, Bernama reported that as at midday on Saturday, a total of 233,134 voters or 21.72% of the electorate in Sarawak have voted in the state polls, according the Election Commission. There were no untoward incidents.

At Bursa, over the past week, the 30-stock FBM KLCI had lost 22.06 points or 1.42% to end at 1,521.94 while RM14.83 billion had been erased from the market capitalisation, which mirrored the declines also in key regional markets. External concerns include the European debt crisis, sustained high oil prices and worries about the Japan's ability to recover from the earthquake which impacted its manufacturing sector.

Among the stocks which would be in focus include CAHYA MATA SARAWAK BHD (CMSB), NAIM HOLDINGS BHD, TA ANN HOLDINGS BHD, ZECON BHD [], ENCORP BHD and HOCK SENG LEE BHD (HSL).

Stocks with recent corporate developments are PROTON HOLDINGS BHD, PRESS METAL BHD, KUB MALAYSIA BHD and Malaysia Steel Works (KL) Bhd.

The Edge weekly reports that FUTUTECH BHD, which was a loss-making, former associate company of Eastern & Oriental Bhd, was poised to transform itself into a CONSTRUCTION [] firm. It had been awarded RM332.4 million worth of design, road and construction works by E&O Property Development Sdn Bhd.

Proton’s unit Lotus Cars Ltd secured £270m million (RM1.33 billion) in loans from six financial institutions over a six-year period to turn around the loss-making company.

Proton group managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said he expected Lotus to break even by 2014.

Press Metal proposed a rights issue to raise between RM316.7 million and RM323.7 million to finance the Samalaju aluminium smelting project in Sarawak.

The rights issue involved RM323.73 million nominal value of redeemable convertible secured loan stocks (RCSLS) at 100% of its nominal value with up to 147.15 million warrants.

Johor Menteri Besar Datuk Abdul Ghani Othman has approved the proposed RM1.23 billion intra-city commuter train service in Iskandar Malaysia which would involve a100km rail network.

The project would be undertaken by Metropolitan Commuter Network Sdn Bhd - a joint venture between KUB Malaysia Bhd and Malaysia Steel Works (KL) Bhd.

SUCCESS TRANSFORMER CORP BHD has proposed to distribute 100 treasury shares for every 4,000 shares of 50 sen held for the financial year ending Dec 31, 2011. It also announced a tax exempt interim dividend of 2pct for FY ending 2011.

FAR EAST HOLDINGS BHD is recommending a final single tier dividend of 20 sen for the financial year ended Dec 31, 2010.

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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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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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Weekly Equity Information Flyer - 25 October 2010

Pmetal

Press Metal Berhad , the leading aluminium extruder in South East Asia with a 40,000 metric tonnes per annum of aluminium extrusion capacity offering customers a quick turnaround services.

Buy Price: RM1.67
Target Price: Rm2.10

HSPlant

Hap Seng Plantations Holdings Berhad , the efficient pure plantation player with activities located mainly in Lahad Datu.

Buy Price: RM2.69
Target Price: Rm3.00

AirAsia Berhad , the pioneer of low cost flights in Asia and was also the first airline in the region to implement fully ticketless travel.

Buy Price: RM2.58
Target Price: Rm3.30

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