RHB Equity 360° - 30 August 2010 (Banks, Property, PetGas, Ta Ann, Kinsteel, Perwaja, KLCCP; Technical: CIMB, K.Euro)

Sector Update
- Jul loan growth moderated slightly to +11.9% yoy (Jun: +12.5% yoy). This was largely due to lower disbursements during the month, especially to the business segment. The household segment saw outstanding loans accelerate further to +13.2% yoy (vs. Jun: +12.9% yoy) with growth still broad-based.
- Jul loan applications rose further to RM58.4bn (+13.6% yoy; +9.9% mom), a new high for the banking system. Absolute loan approvals, meanwhile, moderated to RM28.9bn (+7.9% yoy) vs. RM33.3bn (+24.2% yoy) in Jun. Jul’s statistics suggest that demand for loans has not been dampened by the three hikes in the Overnight Policy Rate (OPR) by BNM thus far.

RHB Equity 360° - 30 August 2010 (Banks, Property, PetGas, Ta Ann, Kinsteel, Perwaja, KLCCP; Technical: CIM...

CIMB Group Holdings Berhad : Tracking Expectations-27/08/2010

2QFY10 results in line. CIMB’s 2Q net profit of RM889m (+34.1% yoy; +6.1% qoq) was in line with our and consensus expectations with 1H10 net profit of RM1.7bn (+35.3% yoy) accounting for 49-51% of our and consensus full-year forecasts.

CIMB Group Holdings Berhad : Tracking Expectations-27/08/2010

RHB Equity 360° - 22 June 2010 (Tanjong, EON Cap, Kencana; Technical: CIMB)

Results Preview
- We expect Tanjong’s 1Q net profit could be down yoy (low double-digit) due to weaker contribution from gaming and, possibly, power, while qoq, net profit is expected to be significantly higher thanks to better contribution from NFO as well as seasonally stronger results from Tropical Island.
- For the power division, potential lumpy items that could impact the 1Q results include business development and bidding costs as well as scheduled maintenance expenses (RM50m budgeted for FY11). A weaker US$ vs. RM would also impact the division’s contribution.

RHB Equity 360° - 22 June 2010 (Tanjong, EON Cap, Kencana; Technical: CIMB)

Mandarin Version - CIMB Group Holdings Berhad : The 10-day SMA Will Cut Below The 40-day SMA Soon… - 24/05/2010

CIMB closed with a gap and a huge bearish candle on Friday. The share price of CIMB turned bullish when its 10-day SMA cut above the 40-day SMA near RM3.10 in Mar 2009. Thereafter it has been trading above the supportive UTL. In late Feb 2010, the stock recharged its upward momentum and rebounded from the UTL support near RM6.00, with a powerful rally across the RM6.70 level before reaching an all-time high of RM7.41 in Apr. However, since then momentum deteriorated as it eased lower. On Friday, it plunged with a 7sen gap, and closed at its day low of RM6.86, with a huge bearish candle on the chart.

Mandarin Version - CIMB Group Holdings Berhad : The 10-day SMA Will Cut Below The 40-day SMA Soon…-24/05/2010

CIMB Group Holdings Berhad : The 10-day SMA Will Cut Below The 40-day SMA Soon… - 24/05/2010

CIMB closed with a gap and a huge bearish candle on Friday. The share price of CIMB turned bullish when its 10-day SMA cut above the 40-day SMA near RM3.10 in Mar 2009. Thereafter it has been trading above the supportive UTL. In late Feb 2010, the stock recharged its upward momentum and rebounded from the UTL support near RM6.00, with a powerful rally across the RM6.70 level before reaching an all-time high of RM7.41 in Apr. However, since then momentum deteriorated as it eased lower. On Friday, it plunged with a 7sen gap, and closed at its day low of RM6.86, with a huge bearish candle on the chart.

CIMB Group Holdings Berhad : The 10-day SMA Will Cut Below The 40-day SMA Soon…24/05/2010

RHB Equity 360° (First Resources, QL, IJM, EON Cap, PLUS, WCT, Furniweb; Technical: Hai-O, CIMB) - 24/05/2010

Top Story : First Resources – Exponential earnings growth at inexpensive valuations - Outperform
New Coverage
♦ First Resources (FR) is a small (by Indonesian standards) but efficient pure plantation company listed in Singapore. FR has 113,010ha of landbank in Indonesia and currently operates 8 palm oil mills. It has also ventured downstream via a 250k tonne capacity refinery and a 250k tonne capacity biodiesel plant. It is currently constructing a 300k tonne fractionation plant which will be completed by 1HFY12/011.
♦ We believe there are five major reasons for investing in FR:
1) Its strong growth profile, given its young plantation age profile;
2) Aggressive planting targets, given its unplanted landbank;
3) Efficient planter, with below average cost of production;
4) Downstream expansion to boost bottomline; and
5) Valuations at unjustifiable significant discount to peers.
We project FR to post a core net earnings (ex-EI and biological gains/losses) CAGR of 59.8% over the next three years to FY12.
♦ FR is currently trading at 8.7x CY10 EPS and 7.2x CY11 EPS, which is a significant discount to the Malaysian plantation sector’s average PE of 19.2x for FY10 and 15.4x for FY11 and even to the regional plantation sector average of 12.6x for FY10 and 10.6x for FY11. Given FR’s efficiently-run estates, clean operating structure and sustainable earnings growth for the medium to long term, we believe FR does not deserve to trade at such a large discount to industry peers. We assign a target PE of 11.5x to FR’s FY11 EPS, which is a 30% discount to our Malaysian target PER for the mid-cap plantation stocks, to obtain our target price of S$1.55/share. We initiate coverage with an Outperform recommendation.

RHB Equity 360° (First Resources, QL, IJM, EON Cap, PLUS, WCT, Furniweb; Technical: Hai-O, CIMB) - 24/05/2010

Corporate Highlights - 21/5/2010

♦ Market Momentum
Market Update : Pick And Choose

♦ Oil & Gas
Sector Update : Fabricators To Ride On Stronger Contract Flows In 2H10

♦ Axiata
Results Preview : Likely To Report Strong 1Q10 Performance

♦ CIMB Group
Results / Briefing Note : Off To A Good Start

♦ UMW Holdings
Results Note : Sustaining Strong Hold in 1Q10

♦ Kossan Rubber Industries
Results Note : No Surprises

Corporate Highlights - 21/5/2010

CIMB Group Berhad : Off To A Good Start - 21/5/2010

1QFY10 results in line. CIMB’s 1Q net profit of RM838m (+36.5% yoy; +4.4% qoq) was within our and consensus expectations, accounting for 24-25% of our and consensus full-year forecasts. No dividend was declared for the quarter.

CIMB Group Berhad : Off To A Good Start - 21/5/2010

RHB Equity 360° - 21 May 2010 (Market, O&G, Axiata, Hai-O, CIMB, UMW, Kossan; Technical: AirAsia)

Market Update
- We do not see much good news in the near term and Malaysia appears caught in a downdraft of fear sparked off by global macroeconomic concerns. The risk of more downside is thus likely to be greater than the potential for upside.
- Clearly, losers from the strong ringgit have been among the hardest hit, including resources (plantations, oil & gas and timber), semiconductor, rubber gloves and steel. The GLCs and M&A plays could also slip further if confidence continues to falter.
- If the FBM KLCI falls as expected by RHBRI’s technical research to the next support level of 1,229, i.e. 6% lower than current levels, last seen in Oct 2009, 2010-2011 PERs would fall to 14.0x and 12.2x respectively, from 15.1x and 13.1x currently. We thus see value re-emerging.
- We believe the long-term picture is still intact with sustained economic and corporate earnings growth. We expect the Government to push forward with liberalisation policies and reduction of subsidies later. M&A activities are likely to continue in the industrial space, as well as banks and insurance. In addition, we
expect Malaysian corporates to look overseas for new growth opportunities, and especially given their pricing power have improved with the stronger ringgit.
- Under current volatile market conditions, we highlight that this is an opportunity to pick and choose stocks, especially those that have fallen hard in the last month such as Notion, Daibochi, Evergreen and Unisem.

RHB Equity 360° - 21 May 2010 (Market, O&G, Axiata, Hai-O, CIMB, UMW, Kossan; Technical: AirAsia)

Corporate Highlights - 17/5/2010

♦ Kossan Rubber Industries
Results Preview : Expecting Low Double-Digit YoY Revenue And Earnings Growth For 1Q10

♦ IOI Corporation
Results Note : Banking On Manufacturing And Property

♦ CIMB
News Update : Streamlining CIMB Niaga’s Shareholding Structure

♦ AMMB
Results / Briefing Note : FY10 Net Profit Reaches RM1bn

Corporate Highlights - 17/5/2010

CIMB Group Berhad : Streamlining CIMB Niaga’s Shareholding Structure - 17/5/2010

Acquiring up to 19.67% interest in CIMB Niaga from Khazanah. CIMB announced on 14 May a proposal to acquire Khazanah’s 17.1% equity stake in CIMB Niaga and a further equity interest of 2.57%, although the latter sale would be at the sole discretion of Khazanah (Proposed Acquisition). The Proposed Acquisition could amount up to RM1.9bn (IDR1,155/CIMB Niaga share), which would be satisfied by the issuance of up to 134m new CIMB shares at an issue price of RM14.50/share.

CIMB Group Berhad : Streamlining CIMB Niaga’s Shareholding Structure - 17/5/2010

RHB Equity 360° - 17 May 2010 (Kossan, CIMB, AMMB, IOI, ILB, Wellcall; Technical: Sime, Pos)

Results Preview
♦ Kossan is due to announce its 1QFY10 results later this week. We expect Kossan to post low double-digit yoy revenue and net profit growth due to a combination of: 1) higher volume sales for the glove segment; 2) improved demand for its TRP products as a result from the economic recovery; and 3) margin expansion due to the improvement in sales mix as more higher value gloves were sold during the quarter.
♦ Qoq, we expect high single digit revenue growth to be achieved mainly on the back of:
1) upward adjustments to selling prices to pass on higher raw material cost, offset by the weakening of US$ against RM; and
2) stronger demand for TRP segment due to economic recovery. 1Q10 core earnings, however, could possibly remain flat qoq due to lower margins resulting from the usual time lag in passing on higher raw material prices and weakening US$, partly offset by stronger performance from TRP segment.
♦ Capacity expansion at its new factory in Jalan Meru is ongoing, and upon completion, this new factory will house a total of 32 double former lines. This factory currently houses 8 double-former lines, which started commercial production in Oct’09 while another 8 double-former lines are expected to start commercial production in 3Q2010. The remaining 16 double-former lines are expected to start commercial production
by 2Q2011. In total, Kossan’s annual production capacity would increase from 12bn pieces currently to 14.5bn pieces by end-2010 and 18 bn pieces by end-2011.
♦ Maintain forecasts, fair value of RM10.74 (based on target CY10 PER of 13x) and Outperform call.

RHB Equity 360° - 17 May 2010 (Kossan, CIMB, AMMB, IOI, ILB, Wellcall; Technical: Sime, Pos)