Corporate Highlights...-17/08/2010

Shifting Trends
♦ Market Update : Going With The Flow

♦ Motor
Sector Update : TIV Growth Maintained

♦ Ta Ann Holdings
News Update : Enters Into JVs to Develop More Plantation Land

♦ Evergreen Fibreboard
Results Note : Stellar Results Due To Higher ASP And Improved Efficiency

♦ M’sian Airline System
Results Note : Still In The Red In 2QFY12/10

♦ Integrated Logistics
Results Note : Back In The Black In 1HFY12/10

Corporate Highlights...-17/08/2010

Malaysian Airline System Berhad : Still In The Red In 2QFY12/10-17/08/2010

Remained in the red in 2QFY12/10. Normalised net loss widened substantially to RM317.6m in 2QFY12/10 (excluding RM217.2m derivative losses), from RM75.6m in QFY12/10 (excluding RM329m A380 compensation and RM56.7m derivative gains). Cumulatively, normalised 1HFY12/10 net loss of RM393.2m came in much worse than our full-year net profit forecast of RM381.4m and the full-year market consensus of RM118.1m net profit. We believe the key variance against our forecast came largely from the lower-than-expected recovery in yields.

Malaysian Airline System Berhad : Still In The Red In 2QFY12/10-17/08/2010

M’sian Airline System Berhad : Operationally In The Red In 1QFY12/10 - 18/5/2010

In the red in 1QFY12/10. Excluding RM329m A380 compensation and RM56.7m derivative gains comprising largely mark-to-market (MTM) gains from fuel hedging contracts (long position) pursuant to FRS on the back of higher crude oil prices, MAS reported a normalised net loss of RM75.6m in 1QFY12/10. As we expect MAS to be profitable over the next three quarters on the back of a mild recovery in the global air travel sector and seasonally stronger 2H, we consider MAS’s 1QFY12/10 results within our full-year net profit forecast of RM381.4m but above the market consensus of RM30.4m net loss for the full year.

M’sian Airline System Berhad : Operationally In The Red In 1QFY12/10 - 18/5/2010

RHB Equity 360° - 18 May 2010 (LPI, EON Cap, Sunway, Kencana, MISC, Evergreen, MAHB, KLCCP, Sino Hua-An, MAS;Technical: KLK)

Visit Note
♦ We believe that LPI will be able to grow its gross premium by 21%, underpinned by the improvement in the property market, further expansion of its agency force and continued premium contribution from its bancassurance tie-up with Public Bank.
♦ For FY10, we are not expecting significant changes from FY09’s gross premium breakdown as management indicated that they expect to maintain the composition of its business portfolio.
♦ Number of agents has increased from 1,388 in FY09 to 1,400 currently. LPI has also introduced three different classes of elite agents that are determined by the respective agent’s ability to achieve and maintain a minimum level of profitable premium income.
♦ We believe LPI may undertake a corporate exercise in FY12/10 to increase the liquidity of its stock. The options include a bonus issue or a share split, both of which would not require any more capital commitments by investors. We estimate that it could potentially issue bonus shares of 3-for-4 based on its reserves as at the latest quarterly results.
♦ We have changed our forecast assumptions to incorporate: 1) higher gross premium growth of 21%; 2) higher claims ratio of 48%; and 3) lower management expense ratio of 18.5%. As a result, we have raised our FY10-12 earnings forecast by 0.3-3.6% p.a..
♦ Maintain Outperform, with a new fair value of RM16.70 (RM16.65 previously)

RHB Equity 360° - 18 May 2010 (LPI, EON Cap, Sunway, Kencana, MISC, Evergreen, MAHB, KLCCP, Sino Hua-An, MA...

Corporate Highlights - 3/5/2010

♦ Oil & Gas
Sector Update : Upturn In FPSO Market

♦ Banking
Sector Update : Mar ‘10 System Data – Underlying Trends Still Positive

Corporate Highlights - 3/5/2010

M’sian Airline System Berhad : Deliveries Of A380 Delayed For A Third Time - 3/4/2010

More delay. The deliveries of MAS’s six A380 aircraft on order have been delayed for a third time. The first A380 aircraft is now expected to arrive only in 1H2012 (vis-à-vis Aug and Jan 2011 according to the second and first revised schedules, and Jan 2007 based on the original schedule). The latest development is not quite a piece of “new news” to the market as MAS already made known the revised schedule (see Table 2) during its Investors’ Day on 20 Apr 2010 (see our Briefing Note on MAS dated 21 Apr 2010). Also, it was revealed in Dec 2009 that MAS was entitled to RM330m compensation for the postponement from Jan 2007 to Jan 2011, and that the compensation covering the postponement from Jan 2011 to Aug 2011 was being assessed. It is unknown if MAS will be entitled to compensation, and if so the quantum, for the latest postponement from Aug 2011 to 1H2010.

M’sian Airline System Berhad : Deliveries Of A380 Delayed For A Third Time - 3/4/2010

RHB Equity 360° - 3 May 2010 (O&G, Banks, Notion Vtec, MAS; Technical: Maybank, Genting)

Top Story : Oil & Gas – Upturn in FPSO market Overweight
Sector Update
♦ According to Fred Olsen (a Norwegian floater specialist), the marked recovery is a continuation of the pickup in activity since 4Q 2009 which saw the award of seven contracts followed by another four contracts in Jan-Feb 2010. Going forward, we believe the market for FPSO is on track for a strong rebound driven mainly by: 1) stronger E&P spending beginning 2H 2010; and 2) increase in deepwater E&P activities.
♦ We highlight the potential shortages for the ‘High Case’ forecast of around 25-30 vessels p.a. in 2010-11, in the event of stronger-than-expected demand stemming from increased E&P activity in deepwater and ultradeepwater fields (Brazil, Africa, Malaysia, Vietnam and Gulf of Mexico). Hence, we expect FPSO charter rates to rise significantly over the next two years, driven by strong demand amidst a shortage of supply in the market.

RHB Equity 360° - 3 May 2010 (O&G, Banks, Notion Vtec, MAS; Technical: Maybank, Genting)

Corporate Highlights...-21/04/2010

TM
Visit Note : Higher Dividend, Possibly. Market Perform

Formis Resources
Company Update : Major Contract On The Platter. Not Rated

Tenaga Nasional
Results / Briefing Note : Demand Growth Turning Out Stronger Than Expected. Outperform

M’sian Airline System
Briefing Note : Flights To Europe To Resume Today, To Cap Net Gearing At 2x Over The Next Three Years. Underperform

Gamuda
News Update : Splash Sweetens Takeover Offer For Klang Valley Water Assets By Forgoing Ownership

Corporate Highlights...-21/04/2010

M’sian Airline System Berhad : Flights To Europe To Resume Today, To Cap Net Gearing At 2x Over The Next Three Years - 21/04/2010

Flights to Europe to resume today. MAS will resume its flights to Europe from today, as more airports in major cities in Europe reopen with the threat of volcanic ash cloud from Iceland subsiding. While acknowledging that there will be financial impact from aircraft grounding for five days, MAS believes that it will be mitigated by traffic backlog.

M’sian Airline System Berhad : Flights To Europe To Resume Today, To Cap Net Gearing At 2x Over The Next Th...

RHB Equity 360° (TM, Infra, TNB, Axis REIT, Quill Capita, MAS, Gamuda, Formis; Technical: Faber) - 21/04/2010

Top Story : TM – Higher dividend, possibly Market Perform
Visit Note
♦ TM’s UniFi packages has registered a take-up of 600 households as of 5 Apr 10. Although most of these subscribers were previously Streamyx users, nevertheless, UniFi would generally help TM both in terms of customer retention and acquisition in the rollout areas over the long run.
♦ Net adds for broadband has improved yoy since Dec 09, thanks to lower churn rate and the introduction of the “super upgrade deal” since Nov 09. While the “super upgrade deal” would result in higher ARPU, the accretive effect would only be felt from May onwards.
♦ Management did not rule out the possibility of paying shareholders in excess of the minimum of RM700m dividend, but neither did management provide a firm commitment to do so. Between special dividends and a higher minimum dividend policy, we sensed management’s preference would be for special dividends.
♦ Indicative fair value remains unchanged at RM3.55, which is based on a required net yield return assumption of 5.5% on the minimum RM700m dividends.

RHB Equity 360°(TM, Infra, TNB, Axis REIT, Quill Capita, MAS, Gamuda, Formis; Technical: Faber) - 21/04/2010

RHB Equity 360° (TNB, Sime Darby; Technical: MAS, AirAsia) - 19/04/2010

TNB will release its 2QFY10 results on 20 Apr. We estimate 2Q core net profit could be up by low-mid single digit qoq and flat yoy, which would bring 1H core net profit to around 52-53% of our revised FY10 net profit forecast and around 51-52% of consensus estimates.
♦ Overall, 2Q unit sales were up 13.8% yoy with the industrial/commercial/domestic segments reporting growth of +20.1%/+9.9%/+7.5% yoy respectively. Hence, we estimate that 2QFY10 revenue could rise by around 6-7% yoy but could stay flat qoq.
♦ YoY bottomline growth, however, would be dragged by:
1) generation mix;
2) higher capacity payments; and
3) higher effective tax rate.
♦ QoQ, the better net profit performance expected would be due to the absence of the RM94m provision for unutilised staff leave in 1QFY10, partly offset by higher coal costs.
♦ We expect TNB to declare an interim gross DPS of 10 sen (2QFY09: total gross DPS of 4.7 sen).
♦ We have raised our FY10 electricity demand growth assumption to +5.5% (+3.8% previously) while for FY11 and FY12, we have assumed annual electricity demand growth of +5% (from +4.5%). Overall, we have raised our FY10-12 net profit projections by 3.8-5.5%
♦ Fair value raised to RM9.90 (from RM9.50) based on unchanged target CY10 PER of 14x.

RHB Equity 360° (TNB, Sime Darby; Technical: MAS, AirAsia)