RHBInvest Research

Top Story: Gamuda – FY07/11 results to meet expectations Outperform

Results Preview

¨ We expect Gamuda’s 4QFY07/11 results to come in within expectations at RM105-110m at the core net level, marginally weaker vis-à-vis RM116.6m recorded in 3QFY07/11 on slightly reduced construction margins sequentially as a result of the cycle of writebacks of cost over-provisions having already peaked 1-2 quarters ago.

Sector Call

Media: Aug adex rose 9.7% yoy Underweight

Sector Update

¨ According to Nielsen Media Research, Aug’s gross adex for TV and print media combined rose 9.7% yoy (+2.9% mom), led by the print media (+14.1% yoy).

¨ Aug’s adex growth was quite strong mainly due to: 1) Hari Raya and Merdeka adex; 2) ad rate hike; and 3) resilient consumer spending.

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Maybank IB Views

Construction: Overweight
Offers shelter from external turmoils

Maintain Overweight. Construction awards should pick up after a slow 1H 2011, to provide the multiplier impact to the domestic economy in anticipation of a slowdown at the global front. During the previous major downturns, government development spending continued to rise. Over the near-term, this will include the new public-private partnership (PPP) projects. We expect major awards only in 2012 relating to the MRT and SCORE. Our top buys are still Gamuda and Hock Seng Lee (HSL).

COMPANY UPDATE
Gamuda RM3.03: Buy
Record profits, Vietnam's conundrum Shariah-compliant

Record profits, Vietnam's conundrum. Gamuda's final results, due on 29 Sept, should meet expectations for record profits in FY11. We forecast FY12 to be another record year, on strong domestic property sales locked in. Nonetheless, we have tweaked our FY12-13 net profit forecasts by -1% after factoring lower sales forecast for the Vietnam property projects. We also reduce our RNAV-based TP to RM4.10 (-8%) after adjusting for lowered GDVs for the Vietnam projects and other house-keepings. The stock remains our top pick in construction.

ECONOMICS
Industrial Production Index (IPI), Jul '11
On slippery pole...

Volatile monthly industrial production trend… Industrial production in Jul '11 slipped back into the red as it contracted by -0.6% YoY (revised Jun'11: +1.3% YoY; Maybank-IB: +1.7% YoY; consensus: +2.4% YoY), dragged primarily by mining output and not helped by slower manufacturing production. MoM, the overall index fell by -0.6% (Jun: +1.3% MoM). For the first seven months of 2011, total output expanded by a mere +0.2% YoY (2010: + 7.2% YoY). Excluding mining, the adjusted industrial production grew by +1.8% YoY (June '11: +4.8% YoY).

Technicals
The FBM KLCI fell 4.97-points and closed at 1,469.12 last Friday. The local market remained somewhat quiet in lack luster and low volume trading. The weaker support areas for the FBM KLCI are located in the 1,423 to 1,455-zone. The next resistance levels of 1,469 and 1,511 will see very heavy liquidation activities.

Trading Idea is a Short-Term Buy call on KFIMA.

Other Local News
Sime: Open to GO for E&O. Sime Darby Bhd is open to increase its stake and make a general offer (GO) for Eastern & Oriental Bhd (E&O) shares at the right time, having recently purchased a 30% stake in the latter at RM2.30 per share, said its president and group CEO Datuk Mohd Bakke Salleh. (Source: The Star)

CIMB: Nazir reorganizes CIMB. CIMB Group Holdings Bhd has embarked on its biggest reorganization since a restructuring in 2005 gave birth to the second largest banking group in the country. After the exercise, CIMB’s group management committee will be trimmed to 15 people from 21. Datuk Seri Nazir Razak will hold dual functions as group CEO and head of Malaysian consumer bank. Meanwhile, Datuk Charon Wardini Mokhzani will be designated as CEO of CIMB Investment Bank Bhd. (Source: The Edge Financial Weekly)

UEM Land: 5 biotech proposals. Malaysian Biotechnology Corp says five more foreign biotech companies are planning to invest millions of ringgit at BioXCell@Nusajaya. One of them is India’s Biotech giant, Biocon Ltd that will be setting up a RM500m plant in BioXCell. UEM Land holds 40% equity in Malaysian BioXCell with remaining 60% held by Biotech Corp. (Source: The Star)

O&G: Gas Malaysia guarantees dividends in first two years, IPO set at RM2.20/sh. Gas Malaysia Bhd will pay a guaranteed dividend of 100% and 75% in the first two years, respectively, after floating its shares on Bursa Malaysia in December this year. Separately, Gas Malaysia shares will be sold at an indicative offer price of RM2.20 a share to prospective investors. (Source: The Star, The Malaysian Reserve)

Construction: Works Ministry to discuss Bumi contracts with Prasarana. The Works Ministry will hold discussions with Syarikat Prasarana Negara Bhd to identify job scope and contracts worth RM8b to be distributed to Bumiputera contractors via the implementation of the Sg-Buloh-Kajang stretch of the Mass Rapid Transit (MRT) system. (Source: Bernama)

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RHBInvest Research

Top Story: Gamuda – What if MMC-Gamuda JV walks away from MRT tunnelling package? Outperform

Company Update

¨ The recent correction in Gamuda share price may be partially attributable to an increased risk being priced in by the market of MMC-Gamuda not winning the MRT tunnelling package, with the “mighty” Chinese contractors coming into the picture.

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RHBInvest Research

Top Story: Top Glove – Latex prices set to ease further Underperform

Visit Note

¨ Latex prices have corrected sharply, in tandem with other commodity prices (excluding precious metals) amid concerns of weaker-than-expected economic growth. As such, we have reduced our latex price assumption to RM8.59/kg for FY11 (from RM8.69/kg earlier). Our latex price assumptions of RM7.75-7.90/kg for FY12-13 remain intact.



Sector Call



Property: Vietnam – Good prospect but not an easy market Neutral

Sector Update

¨ Vietnam has been a tough market. This is well known to many investors. The high inflation and lending rate imply that the required rate of return/IRR of any development projects must be at least 30% to make it profitable. The unfavourable economic indicators and the under-developed mortgage market have largely explained why many Malaysian developers have not been aggressive in pushing their launches in Vietnam during the recent property upcycle, when regional property markets are booming.



Corporate Highlights


no
Gamuda: Give me your best shot, comrades! Outperform

Visit Note

¨ MMC-Gamuda JV may have to settle for a low price for the tunnelling works if they have to match the ultra low winning bid from one of the two Chinese contractors, but we believe Gamuda could still optimise to improve profitability.



Notion Vtec: Shifting focus to camera and auto Underperform

Briefing Note

¨ Management appeared to have a more cautious tone on the industry outlook given the weaker-than-expected global economic growth. We understand although management has not witnessed any cut back in orders yet, the current environment poses a risk which could lead to slower-than-expected orders from customers. The HDD industry is not only facing weaker-than-expected IT spending for desktop PCs, it is also facing stiffer competition from tablets. Hence, we understand Notion will focus on the camera and automotive segments going forward.



SP Setia: Beranang? It’s far, but they will make it nearer Market Perform

News Update

¨ SP Setia entered into a SPA for the proposed purchase of a piece of 1,011-acre freehold land in Beranang for RM330m, or RM7.50 psf. The site is estimated to yield a GDV of RM3.5bn.The land is located midway between Semenyih, Bangi Old Town and Beranang. Travelling time is said to be about 40min to KL.



Evergreen Fibreboard: Going upstream into rubber plantation Underperform

News Update

¨ Evergreen has entered into a Mou with four individuals to purchase a 4,410-acre of land for RM37.8m. The land consists of tropical timber and approximately 1,730 acres of the area has been logged.



Dialog: On the mark Outperform

4QFY11 Results

¨ FY11 net earnings of RM152.4m were in line with expectations, rising 29% due to increased contribution from associate earnings (+23%) and better margins from core divisions of 13.4% (vs. 10.2% in FY10).



CSC Steel: 2QFY11 results dragged down by higher raw material costs Underperform

2QFY11 Results

¨ 1HFY11 net profit came in below expectations. We believe the variance against our forecast largely came from worse-than-expected margin contraction in 2QFY11 as a result of weak demand and significantly higher raw material costs.

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RHBInvest Research

Top Glove – Easing latex prices to help drive recovery – Underperform call based on PER of 15x

• Management expects latex prices to ease from RM9.30/kg to RM7.00/kg, in the next 3-4 months ahead due to seasonal factors
• Given the current situation where latex prices are higher than nitrile prices, Top Glove intends to increase its nitrile glove production mix from 13% to 16-17% by end-CY11.

AirAsia: Places order for 200 new A320 Neo aircraft - Market Perform (up from UP)

• AirAsia has placed an order with Airbus SAS for 200 A320 Neo aircraft with a list price of US$18.2bn (RM54.6bn), to be delivered in 2016-2026.
• The new A320 Neo aircraft will result in 15% fuel savings.
• We are raising AirAsia’s FY12/12-13 net profit forecasts by 12% each

Gamuda: 9MFY07/11 net profit grows 27% yoy - Market Perform

• Gamuda expects the Government to officially call for the tender for the tunnelling works for MRT in 4Q2011 while the award of contract is expected in 1Q2012 with physical work only in full swing by mid-2013.
• FY07/11 net profit forecast is raised by 6% largely to reflect higher property margins. Fair value is raised from RM4.03 to RM4.13.

Glomac: In a sweet spot - Market Perform

• 4QFY11 net profit of RM15.0m, Full year FY11 revenue and net profit surged commendably by 90% and 54%, respectively. A 5 sen final dividend was declared. Together with the 4.5 sen interim dividend, full year dividend amounted to 9.5 sen, upped from 8.5 sen in FY10.
• We raise our FY13 earnings forecast by 11% as management guided RM1bn GDV (vs. RM800m previously) for the Puchong project. We also introduce our FY14 estimate with a growth of 9%.

Jaya Tiasa: A strong finish to FY04/11 - Outperform

• FY04/11 net profit jumped significantly, Key variance was higher FFB production volume for its plantation division.
• We raised our FY04/12-13 net profit forecasts by 5.1-6.2%, after adjusting for higher FFB production volume on the back of higher yields. We introduce our FY04/14 forecast.

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Maybank IB Views

COMPANY UPDATE
Gamuda RM3.74: Buy
Entering an exciting phase Shariah-compliant

Check points ahead. The earnings uptrend should continue with 3Q results expected to track towards expectations. Property sales has again, shot past the internal target, reaching RM1b in just 9 months. The next few months will be exciting as pre-qualification for the MRT underground works have started. Yenso will see its maiden launch in Sept with a stronger indication on the demand momentum by end-2011. We are still positive; Buy (RNAV based TP: RM4.45)

RESULTS REVIEW

Exciting year ahead. FY11 results were in line; net DPS of 21 sen was a marginal 1 sen above forecast. These results are now academic in light of the recently introduced 4D Toto Jackpot which will not only lift lotto but non-lotto revenue. BST remains a Buy; our DCF based TP implies a fair 15.6x 2012 PER for its defensive qualities. At the current share price, the stock still offers attractive net dividend yield of 5.3%.

Technicals
The FBM KLCI lost 4.24 points and ended at 1,559.19 yesterday. Its resistance areas of 1,560 and 1,576 will cap market gains, whilst the obvious support areas are located at 1,533 and 1,558.Due to the US markets’ rebound tone last night, we will see some initial low volume buying activities in the local bourse today.

Trading idea for today is a Short-Term Buy call on SCIENTX.

Other Local News
AirAsia: AirAsia X gests approval for new key routes. Long-haul low-cost carrier AirAsia X Sdn Bhd gets the green light from the Transport Ministry to fly to Istanbul, Beijing, Shanghai, Osaka and Jeddah, sources close to the ministry said. A number of these flights may start as early as August this year. (Source: The Edge Daily)

AirAsia: AirAsia, CAE International plan aviation academy. AirAsia Bhd is teaming up with CAE International Holdings Ltd to set up an aviation academy and has set its sights to be the largest of its kind in Asean. The academy would provide training services for pilots, cabin crew, engineers, ramp handlers, guest services and aviation management. (Source: Bursa Malaysia)

Energy: No subsidy to IPPs. Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui reiterated yesterday that the government has never allocated any form of subsidies for gas sold by Petronas to Independent Power Producers (IPPs). Instead, the lower price for gas sold to IPPs by Petronas is part of its foregone revenue, in line with the government's initiative to ensure that IPPs can maintain a low tariff rate. (Source: The Sun)

Tradewinds Crop: RM60m refurbishment. Tradewinds Corp Bhd is forking out about RM60m to refurbish its hotels to improve its branding and inject a fesh new look. It expects an increase in room rates after the refurbishment in three years time. (Source: The Star)

Transport: 60,000 daily traffic volume seen for new highway. LATAR Expressway (KL-Kuala Selangor Expressway), to be open to the public before the month ends, will see an initial average daily traffic volume of over 60,000 vehicles. The concessionaire of the highway is jointly owned by Bina Puri Holdings Bhd and Arena Irama Sdn Bhd. (Source: The Star)

UEMLand: Sets up Singapore subsidiary. The new subsidiary, Sunrise MS Pte Ltd is to provide consultancy, advisory and technical services relating to project development in Singapore. (Source: Bursa Malaysia)

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RHBInvest Research

Top Story: Gamuda

Results Preview
9MFY07/11 results to meet expectations
Fair value is RM4.03. Maintain Market Perform.

Corporate Highlights


CMMT:

Briefing Note
Big development potential for East Coast Mall
We maintain our fair value of RM1.23. Maintain Market Perform.

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Stocks to Watch: EON Bank, EON Capital, DiGi, Masterskill, construction, O&G

KUALA LUMPUR: The FBM KLCI is likely to kick-off May on a cautious note as historically the market drifts lower in this month.

With few fresh leads coming from the regional markets after the extended weekend, as well as a three-day break starting in Japan on Tuesday, investors will likely look for domestic news flow to decide on how best to allocate their funds.

Meanwhile, US stocks rose last Friday on strength from Caterpillar and other industrials, lifting the Dow and Nasdaq to their best monthly performance since December, according to Reuters.

The advance at Wall Street on Friday was also due to Federal Reserve chairman Ben Bernanke's pledge to keep cheap money flowing through the economy pushed the Nasdaq to a 10-year high, and gold and silver broke records.

MIDF Research head Zulkifli Hamzah said the FBM KLCI closed 0.7% lower in April, the first time in seven years that the market ended the month on a negative note.

He said it was not a reassuring development moving into May as the market tended to drift lower for the month, adding that in seven out of the last 10 years, the KLCI closed May lower.

Zulkifli said he expects a continuation of positive news flow particularly with regards to the ETP-related initiatives in May.

The oil and gas sector was likely to remain upbeat with expectations of more contract announcement on upstream E&P projects both in the deepwater and marginal field developments, he said.

"Stocks of major offshore oil and gas fabricators such as MMHE and Kencana may attract buying interests in view of the pending announcements," he said.

He also said the government had announced its intention to begin CONSTRUCTION of the MRT project in July this year, the exact date being July 8, 2011, adding that tender pre-qualifications for some sections of the project were expected to be undertaken as soon as the month of May.

"Hence we may see some excitements in big construction players such as Gamuda and IJM Corp in anticipation of the tender exercises," he said.

On Bursa Malaysia, stocks to watch include EON Bank Bhd and EON CAPITAL BHD, DIGI.COM BHD, Masterskill Education Group Bhd, construction, and, oil and gas counters.

EON Bank has proposed a dividend of RM311.94 million, translating into 44.9 sen per share, but to be paid to its parent EON Capital Bhd.

The proposed interim dividend was a surprise when EONCap announced on Friday, it had accepted HONG LEONG BANK BHD's offer of RM5.06 billion or RM7.30 per share.

DiGi posted net profit of RM331.39 million in the first quarter ended March 31, 2011, up 19% from RM278.25 million a year ago. Revenue rose 10.8% to RM1.43 billion from RM1.29 billion. It declared an interim dividend of 43 sen.

Masterskill won its suit against Sistem Televisyen Malaysia Bhd (STMB) over the visuals of its college on a TV3 news report about 60 colleges which had been deregistered.

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RHBInvest Research

Media:

Sector Update

• Strong start to the year
• Media Prima (FV=RM3.20) remains our preferred pick given its position as the largest integrated media player in Malaysia and given its relatively fixed cost structure, any increase in topline, will flow straight to bottomline. We maintain our Outperform call on MCIL (FV=RM1.38) and Star (FV=RM4.23).

Corporate Highlights

Gamuda:

• 2QFY11 Results/Briefing Note
• 1HFY07/11 net profit grows 20% yoy.
• Gamuda expects the Government to officially call for the tender for the tunneling works for the Sungei Buloh – Kajang line of the MRT project in 4Q2011.
• Gamuda formally announced that it had been granted by the Government a second extension of time for the completion of the Ipoh – Padang Besar double-tracking project to Nov 2014.
• The maiden launch of Gamuda City in Hanoi is expected in Jul.
• Maintain Market Perform. Fair value is RM4.03.

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Maybank IB Views

Gamuda RM3.79: Buy
Earnings uptrend intact Shariah-compliant

Above our expectations. 1HFY11 results included a RM16m positive accounting adjustment at SPLASH post-IC12 implementation, which was not reflected in our forecast. RM183m net profit (+20% YoY) made up 51% of our pre-revision RM355m full-year forecast. We raise our FY11-13 net profit forecasts by 8-9% p.a. to reflect this adjustment. Being non-cash in nature, our DCF valuation for SPLASH is unchanged and this too, has no impact on our RM4.45 RNAV-based target price for Gamuda. The stock remains our top pick in construction. Maintain Buy.

Technicals
The FBM KLCI rose marginally by 1.87 points to 1,513.84 yesterday. Its resistance areas of 1,515 and 1,529 will cap market gains, whilst the obvious support areas are located at 1,497 and 1,513. Due to the DJIA’s rebound tone last night, we will see the FBM KLCI in a slightly firmer mode today.

Daily Trading idea is a Short-Term Buy call on PCHEM.

Other Local News
Wah Seong: To make fans, blowers. Wah Seong Corp Bhd will set up a joint venture with PT Agrindo Prima Lestari (PTA) to manufacture industrial fans and blowers for the palm oil industry and other industries utilizing similar products in Indonesia. (Source: Bursa Malaysia)

SEGi: Plans 50% dividend payout. SEG International Bhd (SEGi) has announced a dividend policy to distribute a minimum of 50% of its group net profit to shareholders with effect from the financial year ending Dec 31, 2011. (Source: The Edge Financial Daily)

Transmile: Gets RM200m from aircraft sale. Transmile Group Bhd has completed the disposal of four of its aircraft to Federal Express Corp for USD67m (RM200m), paving way for the company to pare down its long term borrowings that totaled RM531.6m as at Dec 31, 2010. (Source: The Edge Financial Daily)

Autos: Toyota to restart hybrid vehicle output in Japan. Toyota Motor Corp would restart production of three hybrid models (Prius, Lexus HS250h and CT200h) on Monday after a massive earthquake this month disrupted output across the industry. (Source: The Edge Financial Daily)

SCORE: Nine companies investing RM20b in Score so far. Nine companies have to date confirmed investments totalling RM20b in the Sarawak Corridor of Renewable Energy (Score). This does not include the RM2b investment by a Taiwanese company in the halal industry hub. (Source: The Star)

Plantation: 'Abolish windfall tax' call. Four national oil palm associations which represents over 80% of the country's oil palm fraternity has submitted a joint memorandum to the Prime Minister, urging the Government to seriously re-consider abolishing or reviewing the imposed crude palm oil (CPO) windfall profit tax (WPT) for the sector. (Source: The Star)

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JP Morgan maintains Overweight on IJM, WCT, Neutral on Gamuda

KUALA LUMPUR: JP Morgan Asia Pacific Equity Research maintains its overweight ratings on IJM Corp Bhd and WCT Corp Bhd and its neutral rating on GAMUDA BHD.

It said Malaysian CONSTRUCTION stocks have been beaten down on heightened risk aversion following the Middle east and North Africa (MENA) political turmoil.

“Gamuda, IJM and WCT are down 4.8%, 1.8%, and 4.3% YTD, in our view providing a good buying opportunity for IJM, our top pick in the construction space, and for WCT in the mid-cap space, as we think valuations have become more attractive, and they are trading well within mean and 1SD (one standard deviation),” it said in a research note issued on Friday, March 4.

In its analysis, JP Morgan Research said Gamuda’s exposure to MENA was small, at 1.7% of total outstanding construction order book, IJM’s is 2%, while WCT’s is the largest, at 42%.

The bulk of WCT’s exposure is to Qatar, where WCT’s management believes the risks are lower given that Qatar has the highest GNP per capita in the world.

Qatar’s proven natural gas reserves stood at approximately 896 trillion cubic feet as of Jan 1, 2011, and it holds almost 14% of total world natural gas reserves, the world’s third largest.

WCT’s major project in Qatar, the RM1.36 billion ministerial building (37% of outstanding order book) is buffered by advance payments, while all progress billings are on a monthly basis, mitigating risks further.

Gamuda’s share price was down 2.5% year-to-date in market capitalisation against a 0.9% sum of the parts (SoTP) exposure from MENA, IJM’s market capitalisation fell 7.3% against no SoTP exposure from MENA, while WCT fell 6.3% against SoTP exposure of 0.9% from Bahrain and 19.9% from Qatar.

“We remain positive on the construction sector, supported by rollout of projects under the Economic Transformation Progamme (ETP), and RM67 billion private-public partnership (PPP) projects under the 10th Malaysia Plan.

“Recent newsflow has turned even more positive for the sector, with the appointment of Gamuda-MMC as the project delivery partner for the RM36 billion mass rapid transit (MRT) project, slated to commence in July this year; and the letter of intent given to MRCB for the close to RM18 billion River of Life project, both part of the ETP.

“We expect positive construction order flows will be the driver of share price performance. Another project due for award soon is the second package of the RM7 billion LRT extension project, for which tenders will close by April,” it said.

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Maybank IB Views

COMMENTS ON NEWS
SP Setia RM5.96: Buy
Replicating Eco Park's success Shariah-compliant

3% EPS enhancement from new Cyberjaya land. We are positive on the latest Cyberjaya land purchase by SP Setia (SPSB) given its fair pricing. More importantly, the land, which will be developed into a RM3b GDV mixed development, will enhance our FY13 earning forecast by 3%. SP Setia remains as our top Buy in property. Our TP is unchanged for now at RM7.15 (10% premium to its RM6.50 RNAV).


Technicals
The FBM KLCI closes lower by 2.96 points at 1,499.28. Its resistance areas of 1,499 and 1,527 will cap market gains, whilst the weaker support areas are located at 1,485 and 1,497.

Trading idea for today is a Take Profit call on PROTON.

Other Local News
Celcom: Investing RM1b to upgrade network. Celcom Axiata Bhd will invest about RM1b this year in capex to upgrade its network to be long-term evolution (LTE) ready. 60% of the RM1b would be used to enhance its data network while 40% would be used to maintain its current network. (Source: The Star)

Sime Darby: No deal signed on Cameroon. Sime Darby Berhad clarified that it has not entered into any agreement to invest in oil palm plantation in Cameroon. However, Sime Darby does explore investment opportunities relating to its core businesses as part of the continuous expansion plan of the Group. (Source: Bursa Malaysia)

MMC, Gamuda: In shareholders deal. MMC Corp Bhd and Gamuda Bhd have entered into a shareholders' agreement to regulate their rights and liabilities as shareholders of a company that will act as the project delivery partner for the Klang Valley Mass Rapid Transit (MRT) project. The company that would undertake the MRT project would be equally owned by MMC and Gamuda. (Source: Bursa Malaysia)

Uzma: Secures RM200m Petronas contract. Uzma Bhd's subsidiary, Uzma Engineering Sdn Bhd, was awarded a long term service agreement from Petronas to provide a Low Pressure System (LPS) for its domestic upstream operations. The contract that is estimated to value at RM200m encompasses supply of uzmAPRESTM equipment, manpower and consultancy services. The tenure of the contract is from Feb 18 2011 till Feb 17 2014, with the option to extend the contract for another two years. (Source: Bursa Malaysia)

O&G: Petronas to invest RM250b in next 5 yrs. Petroliam Nasional Bhd plans to invest RM250b in the next five years in exploration and asset replacement to maintain the exploration levels. The capital expenditure would be internally funded. (Source: The Edge Financial Daily)

Aviation: IATA cuts airline industry 2011 earnings outlook. Global airline earnings will halve this year as rising costs, especially oil prices, offset increasing demand, according to industry body International Air Transport Association (IATA). IATA, whose 230 members include Malaysia Airlines and Singapore Airlines lowered its earnings forecast for 2011 to USD8.6b this year from USD9.1b forecasted in December. The new forecast represents a 46% decline in net profit from 2010 net profit of USD16b. (Source: The Star)

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Stocks to watch: AMMB, Tasek, Mudajaya, Hap Seng

KUALA LUMPUR: Investors will have to brace for the flurry of corporate results flowing from Monday, Feb 21 including those from the Genting group, SIME DARBY BHD, AIRASIA BHD, MALAYSIAN AIRLINE SYSTEM BHD (MAS), MALAYAN BANKING BHD and CIMB Group Holdings Bhd.

Other companies due to announce their results include KUALA LUMPUR KEPONG BHD, IJM Corp Bhd and GAMUDA BHD.

Most importantly, investors want to know what is the outlook for the companies, especially those with international operations, in the face of volatile external environment and record high oil prices.

On Friday, Bank Negara announced the Malaysian economy grew at a slower pace of 4.8% in the fourth quarter of 2010 compared with 5.3% in the third quarter due to the weaker growth in external demand which impacted the manufacturing sector.

It said 4Q growth was still underpinned by higher private and public sector spending, but the central bank expects the pace of growth to be affected by moderating external demand. Manufacturing grew at a slower pace due to slower external demand while the agriculture sector registered a decline, mainly due to the decrease in palm oil output.

“The pace of growth of the Malaysian economy will be affected by the environment of moderating external demand. Growth will, nevertheless, be supported by continued firm expansion in domestic demand.

“Private consumption spending will continue to benefit from the favourable labour market conditions, firm commodity prices and access to financing. The roll-out of CONSTRUCTION and infrastructure activities and the implementation of the economic transformation programme by the government are likely to provide significant support to the growth momentum in private investment,” it said.

MIDF Research head Zulkifli Hamzah said the Malaysian market was still reeling from a selldown by foreign investors. Preliminary data from Bursa shows that foreign investors were still net sellers this week.

“Last week, they sold in terms of gross value, RM4.3 billion of Malaysia equity. This week, we estimate a gross outflow of about RM2 billion,” he told theedgemalaysia.com.

“We do not expect the GDP numbers to have a crushing impact on the market when it opens on Monday. Investors are likely to be more apprehensive over the slew of corporate results due to be unveiled next week,” said Zulkifli.

Stocks to watch with fresh corporate developments include AMMB HOLDINGS BHD, Tasek Corp Bhd, MUDAJAYA GROUP BHD and HAP SENG CONSOLIDATED BHD.

AMMB’s net profit for the third quarter ended Dec 31, 2010 rose 21.2% to RM325.31 million from RM268.47 million a year ago. The higher net profit was mainly due impairment writeback on financial investment and doubtful sundry receivables of RM38.3 million and RM2.3 million respectively as compared to impairment loss of RM19.2 million and RM4.0 million for previous corresponding quarter.

Revenue rose to RM1.82 billion from RM1.71 billion in 2009. Earnings per share was 10.83 sen while net assets per share was RM3.31.

For the nine months ended Dec 31, AMMB’s net profit rose 34% to RM1.03 billion from RM766.87 million, on the back of revenue RM5.3 billion, up from RM4.87 billion a year earlier.

Tasek’s earnings in the fourth quarter surged 325% to RM69.1 million from RM16.25 million. The much improved group results apart from the RM43.6 million gain from disposal of PLANTATION and other property, was mainly in line with the increase in group's total revenue compounded by better local cement sales margin.

Tasek said revenue rose 15% to RM133.67 million from RM116.08 million. Earnings per share were 43.3 sen compared with 8.77 sen. It proposed a bumper dividend, comprising of preference dividend of 6%, ordinary dividend 30% and special dividend 50%.

Mudajaya’s net profit for the fourth quarter ended Dec 31, 2010 rose 39% to RM57.09 million from RM41.05 million a year earlier, driven by the increased level of activities. Revenue rose to RM230.29 million from RM211.76 million a year ago. Earnings per share were 13.96 sen while net assets per share rose to RM1.75 from RM1.

Mudajaya proposed a final dividend of 3.0 sen per ordinary share of 20 sen each under the single tier system for FY10.

For the 12 months in 2010, Mudajaya’s net profit surged 75% to RM208.45 million from RM119.18 million a year ago, on the back of revenue RM869.43 million.

Hap Seng Consolidated’s net profit for the fourth quarter ended Dec 31, 2010 surged to RM103.13 million from RM7.69 million a year earlier, driven by improvement in revenue in all divisions except for fertilisers trading which was affected by lower average selling prices.

Revenue rose 19.3% to RM810.88 million from RM679.6 million. Earnings per share were 18.30 sen while net assets per share was RM4.59. For the financial year ended Dec 31, 2010, Hap Seng’s net profit rose 222% to RM323.16 million from RM100.24 million a year ago.

Hap Seng proposed to pay out as final dividend about 50% of its net profit tax and minority interest totalalling RM123.98 million or 22 sen per share.

RAMUNIA HOLDINGS BHD is eyeing some RM300 million worth of fabrication jobs this year as projects up for grabs start pouring into the market again, underpinned by the surge in crude oil prices.

Chief executive officer Nor Badli Munawir Mohamad said on Friday that while Ramunia's existing order book was negligible, he expected it to grow this year after Petroliam Nasional Bhd committed to opening more marginal oilfields and issue more oil and gas contracts this year.

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RHBInvest Research

Top Story: Public Bank – Expect a solid finish to FY10
Announcing its 4QFY10 results later this month with full-year net profit estimate of RM3bn.

• With 9M annualised gross loan growth at 13.7%
• Non-interest income to remain at healthy
• Expect a second interim gross DPS of 35 sen
• Maintain Outperform with FV of RM15.40

Construction: BLT to roll out RM3bn jobs this year

• Believed that the RM3bn police quarter/station contracts largely went to privately owned Class-A Bumiputera contractors.
• Expect the winners of the RM3bn jobs to sub-contract out part of their jobs that will translate orderbooks to other players in the industry.
• Downgrading IJM to Underperform from Market Perform as valuations are now ahead of fundamentals.
• Maintain Overweight. Top "tactical" pick is Gamuda (FV=RM4.51) and top "value" pick is Fajarbaru (FV=RM1.37)

SP Setia:

• Swapping of IMR Land in Bangsar for a new integrated complex construction at Setia Alam
• Bangsar IMR Land to be developed into an integrated complex of residential and high-rise office buildings
• Maintain Outperform with an unchanged fair value of RM8.05

VS Industry:
Orders from for Dyson vacuum cleaners have already exceeded internal expectations
Recently secured a contract to produce components for an international leading water management solution company based in Australia
Raised our FY11-13 revenue assumptions by 1.6%, 3.6% and 0.1% respectively
Upgrade to Outperform with fair value of RM2.44

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Maybank IB Views

ACQUISITIONS / DISPOSAL
PLUS Expressways RM4.69: Hold
The loner in UEM-EPF Shariah-compliant

Nothing at offer close. MMC Corp did not throw in a new bid for PLUS as speculated. Jelas Ulung did not put in a RM50m cash deposit which means that it is out of the race. All eyes will now be back on UEM-EPF, which is the lone "bidder". The offer implies RM4.60 per PLUS share. PLUS is now officially a Hold; our call has been put under review since its share price started trending close to the UEM-EPF offer price. UEM-EPF's offer is fair, close to our RM4.70-DCF derived target price.


COMPANY UPDATE
Gamuda RM4.21: Buy
New water offer significantly undervalues Shariah-compliant

Another long drawn affair. The Selangor Government's latest offer for SPLASH values its equity value at RM297.5m, we estimate. Gamuda's short announcement yesterday only quoted the offer price on a per share basis, but not the total amount. If our calculation is right, the offer prices SPLASH at just 0.63x book. We think that the offer will be rejected by SPLASH's three shareholders, including Gamuda. Water consolidation in Selangor seems like another long drawn affair.


Sunrise RM3.12
Ceasing coverage Shariah-compliant

Stock to be delisted. The take-over offer by UEM Land at RM2.80 a piece has received 96.4% acceptances. UEM Land does not intend to maintain the listing status of Sunrise, which has been suspended since 31 Dec 2010. We are ceasing research coverage of Sunrise. Investors should no longer depend on our financial forecasts of Sunrise in making investment decisions, nor infer an adverse opinion as a result of our decision to cease coverage.


ECONOMICS
Industrial Production Index Nov '10
Stabilising after slowdown

Industrial production in Nov '10 picked up to +5.1% YoY (Oct '10: +3.1% YoY). However, on MoM basis, output fell across the board by 3.7%. YTD, the industrial production index (IPI) was up +7.8%. For Oct-Nov '10, it increased by +4.1% YoY (3Q10: +4.3% YoY; 2Q10: +10.8% YoY, 1Q10: +11.1% YoY). Using this to estimate real GDP, we came to a figure of around +5.0% YoY for 4Q10 (3Q10: +5.3% YoY; 2Q10: +8.9% YoY; 1Q10: +10.1% YoY). Our 2010 economic growth estimate of +7% reflects a 4% YoY expansion in the final three months.


Technicals
The FBM KLCI fell 8.69 points to 1,563.52 yesterday. Its resistance area of 1,563 and 1,576 will cap market gains, whilst its weaker support areas are located at 1,535 and 1,560.


Other Local News
Proton: In talks with to assemble vehicles in India. Proton Holdings Bhd could be in talks with Indian automobile manufacturer, Hindustan Motors to assemble its vehicles for the Indian market. Proton is in favour of using Hindustan Motors' Chennai plant, set up for assembling the Mitsubishi Lancer, to locally produce its Exora multi-purpose vehicle. (Source: The Star)

SapuraCrest: Gets RM750m loan. SapuraCrest Petroleum Bhd's wholly-owned subsidiary, Aurabayu Sdn Bhd was granted a syndicated Islamic financing facilities of up to RM750m comprising ringgit Malaysia and US dollar denominated tranches from Maybank Investment Bank Bhd. Maybank Investment acted as the mandated lead arranger and bookrunner. (Source: The Star)

Transmile: Sells four aircraft to FedEx for RM209m. Transmile Group Bhd has sold four MD-11F aircraft to Federal Express Corp (FedEx) for RM208.8m. The funds raised from the disposal would be used to partially settle the outstanding debt of the company, which amounted to RM528.9m as at Sept 30, 2010. (Source: The Star)

Integrax: Perak allows Vale of Brazil to build its jetty in Lumut. Vale International SA has been allowed by the Perak state government to construct its own jetty in Lumut to accommodate its proposed iron ore transshipment project. Vale was originally supposed to use Integrax Bhd's Lekir Bulk Terminal (LBT), but the facility upgrade has been on hold since 2009 due to the feud between two brothers who hold a combined 37% stake in Integrax through Halim Rasip Holdings. (Source: The Star)

Property: Tambun Indah IPO oversubscribed by 14.9x. Property developer Tambun Indah Land Bhd's initial public offering (IPO) of 11.1m shares was oversubscribed by 14.9 times where 10,751 applications for 175.7m shares with a total value of RM123m were received. (Source: The Edge Financial Daily)

Construction: Benalec oversubscribed by 4.9times. Benalec Holdings Bhd, which will be listed on the Main Market of Bursa Malaysia, has received an oversubscription rate of 4.92 times for the 36.5m shares made available for public subscription. (Source: The Edge Financial Daily)

Plantation: Planters appeal to abolish windfall profit levy. Malaysian oil palm planters will appeal collectively to Prime Minister Datuk Seri Najib Tun Razak to abolish the windfall profit levy on crude palm oil (CPO) after their requests were turned down by the Finance Ministry recently. The joint appeal is expected to be made by the Malaysian Palm Oil Association (MPOA), Malaysian Estate Owners' Association (MEOA), East Malaysia Planters' Association (EMPA) and Sarawak Oil Palm Plantation Owners' Association (SOPPOA). (Source: The Star)

Conglo: JCorp's directors may not attend EGMs. Johor Corp (JCorp) directors representing the Johor and Federal governments are unlikely to attend the EGM's of Johor Corp's three public listed companies (Kulim, Damansara Realty, KPJ Healthcare) this month to remove Tan Sri Muhammad Ali Hashim as their respective chairman. (Source: The Star)

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RHBInvest Research

Top Story:

Construction:

• The prospects of the construction sector will be bright in 2011.
• Maintain Overweight.
• Our top “tactical” pick is Gamuda (FV=RM4.51) T
• Top “value” pick is Fajarbaru (FV=RM1.37).

Corporate Highlights


KNM:

• The company has won a huge EPC contract worth GBP450m (RM2.2bn) from the UK’s Peterborough Renewable Energy Limited (PREL).
• Upgrading our FY11-12 core EPS estimates by 22.4% and 17.3% correspondingly.
• We maintain our Outperform call on the stock
• Upgraded target price of RM3.78/share (from RM3.09)

Sunrise:

• A cheaper entry to the enlarged UEM
• New fair value of RM3.25 for Sunrise (from RM2.80), based on a swap ratio of 1.33 under Option 1-direct share swap.
• Upgrade our call to Market Perform.

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Maybank IB Views

RESULTS REVIEW
Gamuda RM3.83: Buy
No surprises in 1Q, MRT in the bag ! Shariah-compliant

Positive big win. RM88.5m 1QFY11 net profit (+11% YoY) is 25% of our full-year forecast and 23% of consensus. Construction and property drove earnings uptrend. The award of the Greater KL MRT project delivery partner (PDP) role to MMC-Gamuda is positive, to potentially drive mid term earnings. No change to our earnings forecasts for now, while we have already imputed a 50sen impact from the MRT project in our RM4.45 RNAV-based target price. Maintain Buy.


COMPANY UPDATE
IJM Corporation RM6.27: Buy
Another major win; MRT, LRT jobs ahead? Shariah-compliant

Replenishing nicely. A new RM461m building works contract has lifted IJM's FY11-YTD job wins to RM1.61b, closing in to our RM2b estimate for FY11. No change to our earnings forecasts. Last Friday's Greater KL MRT project go-ahead and the remaining packages of the LRT extension works may benefit IJM, based on its works experience. The stock remains a Buy with a RM6.40 RNAV-based TP.


Technicals
The FBM KLCI lost 7.40-points and closed at 1,499.28 last week. The obvious support areas for the FBM KLCI are located in the 1,474 to 1,495-zone. The key resistance areas of 1,499 and 1,531 may cap any rebound activity.


Other Local News
EPIC: Ambitious plans for Tasik Kenyir. Eastern Pacific Industrial Corp Bhd (EPIC) has been granted the project to transform Terengganu's Tasik Kenyir, the largest man-made lake in Southeast Asia, into a duty-free shopper's paradise. This is part of the redevelopment plan to turn Tasik Kenyir, which will attain a duty-free status by the end of 2012, into a major tourist spot. (Source: The Star)

Genting Group: Gets nod for Vietnam venture, eyes Sri Lanka. The JV between Genting Group and a Vietnam fund manger VinaCapital has obtained approval from the central government for a USD4b (RM12.5b) casino resort project in Hoi An city, Vietnam. The large scale project features a five-star hotel, resort villas and a casino. Genting Group is also exploring the setting up of a casino in Sri Lanka, as its parliament recently passed the Gambling (Special Provision) Bill to legalise gaming. (Source: The Edge Financial Weekly)

Sime Darby: Culprits in Sime's RM2.1b losses to face full brunt of the law. The Malaysian Anti-Corruption Commission (MACC) has found several "elements of fraud" in Sime Darby Berhad and has shared its findings with police and the Companies Commission (SSM) for them to initiate action. Sime Darby was found to have breached several provisions under the Penal Code, the Companies Act and the Anti-Corruption Act 2009. (Source: The Star)

DiGi: Plans to spend RM700m in capex next year. DiGi.com Bhd will invest RM700m in 2011 in capital expenditure, focusing on enhancing data and internet rather than voice services. Revenue growth is expected to be a high single digit to 10% with the expanding contribution from data and Internet business. (Source: The Star)

RHBCap: EPF may sell 9% in RHBCap. The Employees Provident Fund (EPF) is planning to sell another 9% stake in RHB Capital Bhd to a diverse group of institutional fund managers. The senior management of RHB Banking Group participated in roadshows in the region and in London and New York to meet foreign investors, mostly institutional fund, for the divestment. (Source: The Edge Financial Weekly)

Kencana: JV with Petrofac may bag Berantai job. Kencana Petroleum Bhd and its technical partner London-based Petrofac Ltd have emerged as the front runners to bag the exploration of the Berantai oil and gas field at PM309, off the coast of Peninsular Malaysia. Kencana and Petrofac may opt for either a processing platform or a standalone development, utilizing a floating production, storage and offloading (FSPO) vessel. (Source: The Edge Financial Weekly)

Conglo: JCorp seeks to remove Muhammad Ali. Johor Corp (JCorp) is seeking to remove Tan Sri Muhammad Ali Hashim, its previous head for 18 years, from the boards of three listed companies it has direct stakes in. JCorp has called for EGMs at Kulim (M) Bhd, KPJ Healthcare Bhd and Damansara Realty Bhd (DRealty) for this purpose. (Source: The Star)

Scomi Marine: Unit to sell foooour logistic firms. Scomi Marine Bhd (SMB) unit Scomi Marine Services Pte Ltd has proposed to sell four companies to its 80.5%-owned subsidiary PT Rig Tenders Indonesia Tbk for IDR323.1b (RM538.3m) in a group-related corporate exercise. The four companies Scomi Marine Services is disposing of (its entire equity interest) are CH Logistics Pte Ltd, CH Ship Management Pte Ltd, Grundtvig Marine Pte Ltd and Goldship Private Ltd. (Source: The Star)

KPJ: Shareholders approve hospitals sale. KPJ Healthcare Bhd's shareholders have approved the disposal of three hospitals to the company's associate Al-Aqar KPJ Real Estate Investment Trust (REIT) for RM138.8m. KPJ, a 48.4% associate of Johor Corp, has a 43% stake in Al-Aqar KPJ REIT. The three hospitals being sold were the Bandar Baru Klang Specialist Hospital and the Kluang Utama Specialist Hospital in Malaysia as well as the Rumah Sakit Bumi Serpong Damai hospital in Jakarta. (Source: The Star)

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RHBInvest Research

Gamuda:

• Trading Buy
• 1QFY07/11 net profit grows 20% yoy, appointed MRT’s PDP
• Fair value is RM4.51.
• Maintain Trading Buy.

Corporate Highlights


IJM:

• Awarded RM461m building contract for Naza’s Platinum
• Fair value is RM6.16.
• Maintain Market Perform.

Hai-O:

• Weak MLM sales continues
• Maintain Underperform.

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Maybank IB Views

RESULTS REVIEW
SP Setia RM5.58: Buy
Stronger ahead; upgrade to Buy Shariah-compliant

Upgrade to Buy. RM187.8m FY10 normalised net profit (+24% YoY) was within our expectations, but 12% below consensus. We upgrade forecasts by 12-40% and raise TP to RM6.90 (+41%) on unchanged 10% premium to RNAV. Despite three major property mergers recently, the premium justifies, due to SPSB's strong track record and hands-on management. We are increasingly positive, expecting SPSB to gain further traction in government land development kick-starting next year. With size being significant, it could also be on a corporate prowl next.


COMPANY UPDATE
Gamuda RM3.79: Buy
Rail, and more rail Shariah-compliant

Maintain Buy. Qatar MRT, which Gamuda is eyeing, will be 4x the size of the Greater KL MRT which Gamuda-MMC JV is vying for a chariot master role, and in the tunneling works. Besides rail, we believe that Gamuda stands a good chance in securing other infrastructure works in Qatar leading to the 2022 FIFA World Cup. Its chariot master role in the KL MRT project looks positive. Our RM4.45 RNAV-based TP has imputed a 50sen per share potential from the KL MRT project.


ECONOMICS
Malaysia: Balance of Payments (BoP)
Eyes on capital flows...

Trends in capital flows are the main highlights. Inward FDI rebounded this year after last year's plunge, although net FDI flows is set for the fourth consecutive year of outflows due to larger outward FDI, while net portfolio funds recorded its fifth consecutive quarter of inflows. However, "Errors and Ommissions" ballooned year-to-date, raising the issue of "disintermediation" in capital flows via informal channels instead of the formal financial/banking system. Overall, "hot money" remain at manageable level in view of the RM41.4b net inflows in 2010 YTD compared with RM83.9b net outflows in 2008-2009.


Industrial Production October '10
Going through volatile growth trend...

Industrial production growth of +3.0% YoY in Oct '10 was between our expectations and consensus estimates (Aug: +5.6% YoY; Maybank IB estimate: +3.5% YoY; Consensus: +2.1% YoY). MoM, output was up +3.4% after contracting in the previous two months, a trend that mirrored exports and imports. As highlighted in our report of Oct '10 external trade data on 6 Nov '10 ("V for Volatile"), the string of festivities that kicked off with Ramadan and Eid in Aug-Sep played a major part in the volatility of production and external trade growth trends, which is continuing in 4Q10 with the Christmas and year-end holidays and in 1Q11 with the Chinese New Year.


Technicals
The FBM KLCI advanced by 11.23 points to 1,521.29 yesterday. Its resistance areas at 1,523 and 1,531 may cap market gains, whilst its firm support areas are located at 1,503 and 1,521.

Trading idea for today is a SHORT TERM BUY call on SPSETIA.


Other Local News
Maybank: Must sell down 20% in subsidiary. The chairman of Indonesia’s capital market regulator Ahmad Fuad Rahmany commented that Maybank is required to sell down its stake in PT Bank International Indonesia (BII) within six months. However, Maybank has stated that it will still proceed to apply for further extension if the sell down would result in potential losses. (Source: The Malaysian Reserve)

MAS: Firefly to make Senai next hub? Firefly is planning to make Johor's Senai Airport its second hub and is eyeing regional destinations like Jakarta and Bandung in Indonesia. Firefly has leased two Boeing 737-400 planes to be based in Senai Airport. (Source: Business Times)

Perodua: Eyes bigger slice of car market in Nepal. Perusahaan Otomobil Kedua Sdn Bhd (Perodua) aims to grow its market share in Nepal. It sold 300 units last year and aims to sell 400 units next year. The Nepalese automotive market is largely dominated by Indian and Japanese makers. (Source:The Star)

TNB: Wants government to review gas tariff to ease burden of higher coal prices. Tenaga Nasional Bhd (TNB) will request the government to review the tariff for natural gas if coal prices were to rise significantly and become a financial burden. (Source: Bernama)

Gamuda: Gamuda Land Targets RM5b property sales over next 2 years. Gamuda Land is targeting RM5b worth of sales over the next 2 years, RM2b of which is generated from various local projects while the remaining RM3b would be from its two major developments to be launched in 2011 in Hanoi and Ho Chi Minh City of Vietnam. The gross development value are USD9b (RM28.3b) and RM5.5b respectively over the next 9 years. (Source: The Edge Financial Daily)

Genting: Unit seeks SGD4.2b refinancing. Genting Bhd’s unit, Genting Singapore Ltd is seeking to borrow around SGD4.2b (SGD1 = RM2.39) to pay off an existing loan. The refinancing comprises a S$3.5 billion seven-year amortising term loan and a revolving credit facility. Bank of Tokyo-Mitsubishi UFJ, DBS, HSBC, Oversea-Chinese Banking Corp and Sumitomo Mitsui Banking are lead arrangers and joint bookrunners for the loan. (Source: Business Times)

DRB-HICOM: Unaware of privatizing plans. DRB-HICOM clarified that it is not aware of any privatisation proposals and has not received any notice from its holding company, Etika Strategi Sdn Bhd. (Source: Bursa Announcement)

Conglomerate: JCorp appoints Kamaruzzaman CEO. Johor Corp (JCorp) has appointed its acting CEO Kamaruzzaman Abu Kassim as the new CEO. The decision was a surprise as the initial plan was to bring in fresh talent. (Source: The Star)

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Maybank IB Views

SECTOR UPDATE
Property: Overweight
Playing the M&A game

Size is the word. We saw 3 sizeable mergers in less than a month. While SunCity-SunHoldings offers the highest upside to their merged RNAV from current levels, we are more excited on UEML-Sunrise due to its potential participation in Khazanah-Temasek's property project in prime Singapore land, followed by MRCB-IJML, whereby a merger will raise their chances of participating in the RM10b GDV Sg Buloh land development. These potentials are however not quantifiable for now.


COMPANY UPDATE
AirAsia RM2.72: Buy
AirAsia Philippines: Tony meets Tony Shariah-compliant

Long time waiting. AirAsia will set up a JV and begin operations by 1Q11. The Philippines will be AirAsia's 4th country of operations after Malaysia, Thailand and Indonesia. We are positive on the longer-term prospects of this JV, but are neutral on its shorter-term impact as it will incur start-up losses and take time to achieve success. Maintain Buy with a RM3.36 TP based on 9.0x 2011 PER, 20% discount to peers.


Media Prima Berhad RM2.33: Buy
Access is valuable

Strong momentum. The 4Q is shaping up well as advertisers clear out their budgets. Consensus is catching up with our FY10 earnings forecast. Next year is looking good too. More active yield management of its wide audience reach will result in effective double-digit rate hikes at TV3 and Harian Metro in particular. Separately, the proliferation of carriers will boost demand for content. Buy for yield and growth.


Technicals
The FBM KLCI advanced by 8.32 points to 1,510.06 yesterday. Its resistance areas at 1,513 and 1,528 may cap market gains, whilst its firm support areas are located at 1,495 and 1,510.
Trading idea for today is a TAKE PROFIT call on PBB.


Other Local News
TNB: In power cooperation with Yemen company. Tenaga Nasional (TNB) is collaborating with National Trading Company (Natco) of Yemen to explore joint cooperation in the development of the power industry in Yemen. The initial scope encompasses power generation and distribution, training, system planning, design, project management and development, system operation and system maintenance. (Source: The Star)

Gamuda-MMC: Double track railway job ‘will meet deadline’. Work on MMC-Gamuda Joint Venture Sdn Bhd’s electrified double track project from Ipoh to Padang Besar has been delayed but the Transport Minister is confident that the project will be completed on schedule. 64% of the project has been completed as at the end of last month. The delay was due to problems related to land acquisition which the ministry would resolve before year end. (Source: News Straits Times)

Proton: Group Lotus buys equity in Renault F1 team. Proton Holdings Bhd’s subsidiary Group Lotus plc has bought a major equity stake in the Renault F1 team from Genii Capital and the team will be renamed Lotus Renault F1 team. With the acquisition, Group Lotus will become the title sponsor until the end of the 2017 season. (Source: The Edge Financial Daily)

Hartalega: No order to close factory. Hartalega Holdings Bhd has clarified that its factory in Ijok, Kuala Selangor, has never been ordered to close, suspended, nor issued serious warnings of any kind. Hartalega assured that it has complied with all standards enforced by the Environmental Department. (Source: Business Times)

DRB-HICOM: Syed Mokhtar mulls DRB-HICOM buyout. Tan Sri Syed Mokhtar Al Bukhary could be privatizing DRB-HICOM Bhd soon. Maybank Investment Bank Bhd is believed to be the advisor for the RM2b plan. The offer would be comparable to DRB-HICOM's net tangible asset (NTA) value. (Source: Business Times)

Bina Puri: Secured jobs in Saudi Arabia & Thailand. Bina Puri Holding Bhd’s has secured a stormwater pipeline project worth SAR24 (RM19.9m) in Saudi Arabia, and a warehouse project in Bangkok worth THB175.0m (RM18.3m). The awards bring the Group’s outstanding order book to RM3.16 b. (Source: Bursa Announcements)

Titan: Honam extends closing date for takeover offer. Honam Petrochemical Corp Bhd has extended the closing date for the takeover offer of Titan Chemicals Corp Bhd to Dec 24, 5pm. (Source: The Star)

Hospitality: RM1b investment to transform Teluk Datai. Khazanah Nasional Bhd, through its investee company, Teluk Datai Sdn Bhd (TDR), and partners are investing RM1b in the Teluk Datai master development plan that will be completed by 2014. The five-year plan includes the expansion and upgrading of TDR’s hotel and golf course and construction of new hotels. The plan encompasses a five-star resort which will be jointly developed with Shangri-La Hotels, a six-star hotel and villas. (Source: News Straits Times)

Utilities: Cabinet agrees to electricity tariff hike. The federal Cabinet has agreed to a revision of electricity tariff but has not decided when it should take place. (Source: The Star)

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