RHBInvest Research

Top Story: Axiata - Celcom still holding firm Outperform

Briefing Note
Celcom managed to register healthy prepaid net adds of 177k (4QFY10: +52k) thanks to greater focus on the prepaid segment over postpaid.


Sector Call

Semiconductor – Apr chip sales weaken to 3.9% yoy Neutral

Sector Update

Unisem: Fair value at RM1.99 Market Perform

Notion: Fair value at RM2.25 Market Perform

Apr chip sales fell 2.2% mom after rebounding 2.3% in Mar 11. We reckon this was partly due to the abrupt decline in chip demand due to the Japan disaster that occurred in Mar. On the other hand, Apr chip sales appeared weak with yoy growth of 3.9% compared to Mar 11 growth of 8.4% yoy.

Corporate Highlights

Puncak Niaga: Cash flows intact despite IC 12 Trading Buy

Briefing Note Management clarified that there is essentially no impact to the underlying business and cash flows despite adopting IC 12.

Puncak however conceded that it will record losses in FY11, but will return profitable in FY12 with the scheduled 25% water tariff hike in Jan 2012.

IJM: Raising Stakes In Two Indian Units Underperform

News Update
IJM has proposed to raise its stakes in CIDB Inventures and Swarna Tollway by 16.9% and 17% to 95% and 98.5% for RM46.4m.



CBIP: Sells plantation subsidiaries, RM1.07/share gain on sale Outperform (upgraded)

News Update
CBIP entered into two share sale agreements to dispose of its 100%-owned subsidiaries, Sachiew and Empresa for RM108.12m and RM159.94m cash, respectively. Sachiew is the holder of a provisional 60-year lease for 3,720ha of land in Suai, Miri, which also has a 30t/hr CPO mill. Empresa is the holder of a provisional 99-year lease for 5,936ha of land in Bok, Miri, which also has a 45t/hr CPO mill.

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RHBInvest Research

Top Story: Earnings Review / Strategy – More earnings downgrades; rising risk aversion

Market Update
The 1Q report card continued to be below our expectation as there were more companies reporting results that were below our projections compared with those that exceeded forecasts. Of the 111 companies that we cover, 62 of the results (55.9% of the total) were within our expectations, 33 below projections (29.7% of the total) and 16 above forecasts (14.4% of the total).

Sector Call
Banking: Apr ‘11 system data – Leading indicators moderated but loan growth resilient Overweight

Sector Update
Apr ’11 system-wide loan growth gathered further pace, growing 13.5% yoy as compared to +13.2% yoy achieved in Mar ’11. Similar with the previous month, this was mainly due to stronger loan growth to businesses (+14% yoy) while household loans outstanding continued to grow at a rather steady pace of 13.2% yoy.

Corporate Highlights

Affin: Keeping faith Outperform

Briefing Note
While 1Q11 headline net profit appears weak, management was keen to stress that the results were not representative of the full-year as 1Q tends to be a seasonally slower quarter coupled with the one-off RM40m litigation loss. As such, there was no change to the full-year targets.

MNRB: FY03/11 Earnings Up On Better Claims Experience Outperform

Results/Briefing Note
MNRB’s full year net profit of RM124m (+172% yoy) was above our expectations, accounting for 118% of our forecast. The main variance was the lower-than-expected claims ratio of 59.4% for its Malaysian Reinsurance division, compared to our projected 63% for FY03/11.
MAHB – Net profit up 21% yoy; land development in the works Outperform

Results/Briefing Note
MAHB’s 1QFY11 net profit came in at 21.7% of our full-year forecast. We consider the results to be within expectations as we expect a stronger 2H on the back of the year-end peak period for air travel.

Maxis: A slow start Market Perform

Results / Briefing Note
Maxis’s 1Q core net profit of RM2.29bn (-0.9% yoy; -7.7% qoq) was within expectations.
Management’s new tighter subscriber definition resulted in to better reflect its actual revenue generating base resulted in its overall subscriber base “contracting” by 1.2m to 12.7m.

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