Perwaja Holdings Berhad : In Line, Expecting Performance To Pick Up From 4Q - 30/08/2010

♦ In line. 1HFY12/10 core net profit of RM32.9m came in within our
expectation, at 51% of our full-year estimate.

Perwaja Holdings Berhad : In Line, Expecting Performance To Pick Up From 4Q - 30/08/2010

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...

RHB Equity 360° - (Steel, BAT; Technical: Faber)

Sector Update

Ann Joo Resources : Target PER raised from 7x to 9x Market - Perform (up from UP)
CSC Steel : Target PER raised from 7x to 9x - Outperform (up from MP)
Hiap Teck Venture : Target PER raised from 7x to 9x - Market Perform
Kinsteel : Target PER raised from 7x to 9x - Underperform
Perwaja : Target PER raised from 7x to 9x - Outperform
Sino Hua-An : Target PER raised from 7x to 9x - Underperform

- We believe prices of steel products will likely stage a rebound in 4Q, as: 1) steel consumption is seasonally stronger in 4Q; 2) concerns on overcapacity in the steel sector are likely to ease in the near term; and 3) spot price of iron ore fines (key steelmaking input for most large steel mills in the world) has bottomed.

RHB Equity 360° - 23 July 2010 (Steel, BAT; Technical: Faber)

Perwaja Holdings Berhad : In Line, Expecting Weaker 2H - 26/05/2010

In line. 1QFY12/10 core net profit of RM22.7m accounted for 30.1% of our full-year forecast. However, we consider this within our expectation as we expect Perwaja’s performance to weaken in 2H on the back of weaker restocking activities in 2H arising from weaker price outlook.

Perwaja Holdings Berhad : In Line, Expecting Weaker 2H-26/05/2010

Corporate Highlights...-26/05/2010

♦ Shifting Trends
Market update : Seeking Shelter In Domestic Plays

♦ Consumer Sector - Tobacco
Sector Update : Industry Changes From AFTA-Cept

♦ Building Materials
Sector Update : Steel Sub-sector Running Out of Steam

♦ Perwaja Holdings
Results Note : In Line, Expecting Weaker 2H

♦ Kinsteel
Results Note : In Line; Anticipating Weaker 2H

♦ Malaysian Pacific Industries
Results Note : FY11 Earnings Growth To Be Driven By X3-MLP

Corporate Highlights...-25/05/2010

RHB Equity 360° (Market, Consumer, Steel, Kencana, Sunway, MPI, HSL, KFC, Kinsteel, Perwaja, KNM; Technical: Genting Malaysia)-26/05/2010

Top Story : Shifting Trends – Seeking shelter in domestic plays
Market Update
♦ The FBM KLCI has erased all its gains and more during the first five months of 2010 since turning downwards on 13 May. We expect the market to remain volatile, with the risk on the downside.
♦ We have used historical valuations and market data in order to find possible fundamental support levels for the FBM KLCI:
1) Average one-year forward PER for FBM KLCI stocks since 2000 is estimated to be around 15x, and one standard deviation (SD) below the mean is estimated to be around 13.3x, which is coincidentally the same valuation at the next technical support of 1,154 for the FBM KLCI; and
2) Annual returns for the FBM KLCI over the last 32 years have averaged around 13% and 1SD below the mean would imply a pullback of around -17.6%. However, we note that a 1SD fall has only occurred seven times over the last 32 years. As it stands, the FBM KLCI has already fallen by 7.2% from the peak this year.
♦ Having painted a near-term bearish picture for the market, we highlight that the correction is driven more by external factors relating to fears over global macroeconomic conditions especially in the EU. We acknowledge that these concerns could result in some of our earnings forecasts coming under pressure.

Therefore, in our view, companies that have little or hedged exposure to overseas markets or imported costs are likely to be more resilient. These domestic plays include Maxis, TNB, PLUS, Allianz, AEON, KFC, KPJ and B-Toto.

RHB Equity 360°(Market, Consumer, Steel, Kencana, Sunway, MPI, HSL, KFC, Kinsteel, Perwaja, KNM;Technical: ...

Corporate Highlights - 10/03/2010

♦ Plantation : All For CPO Prices Crossing RM3,000/Tonne
♦ Perwaja Holdings : Better Quarters Ahead
♦ Kinsteel : Better Demand Ahead
♦ Gamuda : Served A Request For Arbitration Amounting To RM51.5m
♦ WCT : Served A Request For Arbitration Amounting To RM49.5m

Corporate Highlights - 10/03/2010

Perwaja Holdings Berhad : Better Quarters Ahead - 10/03/2010

Anticipates 2010 benchmark iron ore contract price to rise 20-40%.Perwaja anticipates iron ore benchmark prices in 2010 (Apr 2010 – Mar 2011) to rise by 20-40%, given the global iron ore miners’ improved bargaining power amidst sustained steel consumption in China. Given its relatively flat production cost curve in 1HFY12/10 (as Perwaja has already locked in iron ore pellets at low prices in anticipation of higher iron ore prices going forward), Perwaja anticipates a steep margin expansion in 1HFY12/10 from the rising global steel price trend.

Perwaja Holdings Berhad : Better Quarters Ahead - 10/03/2010

RHB Equity 360° (Plantation, Perwaja, Kinsteel, KPJ, Gamuda, WCT; Technical: Faber) - 10/03/2010

Top Story : Plantation – All for CPO prices crossing RM3,000/tonne mark Overweight
Sector Update

• We came away from the first day of the 2010 POC (Palm and Lauric Oils Conference) with a “bullish vibe”,as three of the speakers who made price forecasts had relatively bullish expectations, projecting CPO prices to cross the RM3,000/tonne mark this year.
• We admit most of the price forecasts given today were slightly more bullish than our expectations. While we believe it is possible for CPO prices to touch or cross the RM3,000/tonne mark, based on the current bullish momentum, we do not discount the potential for prices to fall back down in the normal seasonal peak period in 2H2010, assuming normal weather conditions. We believe Dorab Mistry’s projection for stronger CPO prices in 2H2010 would only come through if the impact of El Nino on production is relatively severe. As such, we maintain our average CPO price assumptions of RM2,500/tonne for 2010 and RM2,700/tonne for 2011. YTD average spot prices of CPO of approximately RM2,550/tonne is in line with our projection, which assumes stronger CPO prices in the first half of the year versus the second half, following the CPO production cycle.
• No change to our earnings forecasts. We maintain our Overweight stance on the sector as a whole and reiterate our recommendation for investors to stick with the more liquid stocks given the anticipated volatile market conditions in 2010. We maintain our Outperform recommendations on IOIC, KLK, Sime Darby and CBIP, and Underperform recommendation on Genting Plantations and IJMP.

RHB Equity 360° (Plantation, Perwaja, Kinsteel, KPJ, Gamuda, WCT; Technical: Faber) - 10/03/2010

Perwaja Holdings Berhad: Expecting Margin Boost in 1HFY12/10 - 01/03/2010

Below expectation. FY12/09 net loss of RM115.5m came in larger than our projected net loss of RM105m. We believe the variance against our forecast came largely from:
1. Lower-than-expected selling prices; and
2. Higher-than-expected depreciation expenses.

Perwaja Holdings Berhad :Expecting Margin Boost in 1HFY12/10 - 01/03/2010