PP 7767/09/2010(025354)

17 August 2010

Malaysia Corporate Highlights

RHB Research
Institute Sdn Bhd
A member of the
RHB Banking Group
Company No: 233327 -M

Marke t Upda te
17 August 2010
MARKET DATELINE

Shifting Trends
Going With The Flow

♦ Going with the flow. Concerns of a sharper-than-expected global

Table 1. Top Picks
economic slowdown will likely maintain the equity market’s volatility. As it
Price (RM) FV (RM)
stands, the FBM KLCI’s performance has been erratic since the beginning
Maybank 7.72 9.66
of the year, and will likely to remain so as weak economic data continue
CIMB 7.31 8.40
to be reported. However, we would not rule out a quick reversal in
Maxis 5.30 6.20
sentiment back to the positive if more optimistic data are announced.
Tenaga 8.60 10.20
♦ In trading mode. The economic concerns and volatile market should PLUS 3.78 4.33
have pushed investors towards the large and liquid big caps. However, Gamuda 3.35 3.85
price data suggest otherwise. While non-cyclical consumer stocks had a MRCB 1.71 1.96
good run in the 1H, investors appear to be in a short-term trading mode. Media Prima 2.10 2.80
KPJ 3.52 4.51
♦ Broad trends. Our analysis is based on share price data for a selection of Mah Sing 1.83 2.09
150 stocks, including the FBM100 components plus the other stocks under Faber 2.76 3.82
our coverage. We ranked the top performers for the YTD, last three HSL 1.52 1.95
months (3M), one month (1M) and last week (1W) by a number of As at 13 Aug
criteria: Source: Bloomberg, RHBRI
o By sector. While 17 sectors (out of 18 in our sample) were found
among the top 50 performers for YTD, the number had fallen to 15-
Table 2. Sectors Represented Among
16 sectors for 3M, 1M and 1W data. Among the top 30 performers,
Top 30 Performers
13-14 sectors were represented for YTD, 3M and 1M, but there were
YTD 3M 1M 1W
only 11 sectors for 1M (see Tables 2 and 3). Dropouts included banks
Banks - - - -
and technology (on fears of a sharper-than-expected slowdown), as
Construction 4 1 2 3
well as gloves (due to potential earnings disappointment).
Consumer 6 7 1 4
o Market cap. The 1W rankings underscore the apparent lack of leads Gaming - 2 3 2
among the big caps with the top 20 performers consisting almost Gloves 3 - - -
entirely of mid caps of RM4bn or below (except for Genting Bhd, Infra - 2 1 1
which was pushed up last Friday by subsidiary, Genting Singapore’s Insurance 1 1 1 -
strong 2QFY10 results). This trend has persisted since the beginning Materials 1 - 2 1
of the year. Among the top 20 YTD performers (+35.8-84.4%), the Media 1 - - -
largest by market cap was Titan Chemicals (RM3.9bn) in first place, Motor 2 2 3 4
while the smallest was Daibochi (RM239.8m). The only big cap in this O&G 3 6 5 5
list was Axiata (RM36.9bn). While there were four big caps (i.e. Plantations 1 2 3 5
among the top 20 performers for 3M rankings, and three for 1M and Power - 1 2 -
1W rankings, the majority of the outperformers were mid caps of Property 1 1 2 2
RM5bn and below (see Tables 4 and 5). Technology 3 1 - -
Telecom 1 1 - -
♦ News flow driving performance. We note that news flow played a key
Timber 1 - 2 1
part in stocks’ performance including: 1) projects e.g. SCORE (for HSL),
Transport 2 3 3 2
Federal land privatisation (for MRCB), and MRT (for Gamuda); 2) M&A
# As at 13 Aug
(e.g. privatisation of Tanjong and Titan Chemicals, new shareholder for
Source: Bloomberg, RHBRI
Tanjung Offshore, and the Parkway takeover bids which drew attention to
KPJ’s low valuations); and 3) earnings (e.g. Genting Singapore).

♦ Conclusion - news flow to remain key driver. In the absence of fresh

sector catalysts, we expect news flow to continue driving the market.
Nevertheless, we remain cautious as economic and earnings concerns
could further reduce the number of investible sectors. This remains a Yap Huey Chiang
stock-pickers’ market, although we advise investors to remain focused on (603) 92802171
yap.huey.chiang@rhb.com.my
the better-rated stocks. Our top picks are listed in Table 1.

♦
Please read important disclosures at the end of this report.
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Table 3. Top 30 Performers Grouped By Sectors

YTD 3 Months 1 Month 1 Week
Banks/Finance - - - -
Construction HSL, MRCB, Sunway, Gamuda Sunway, MRCB Mudajaya, Fajarbaru,
Gamuda Sunway
Consumer Faber, KFC, QL, Daibochi, KFC, KPJ, Faber, F&N, QL, Nestle Daibochi, Hai-O, Nestle, JTI
KPJ, F&N Guinness, Nestle
Gaming - Gent S’pore, Genting Bhd Gent S’pore, Genting Bhd, Gent S’pore, Genting Bhd
MPHB
Gloves Supermax, Kossan, Harta - - -
Infra - Puncak Niaga Puncak Niaga Puncak Niaga
Insurance LPI LPI Allianz -
Materials CSC Steel - Sino Hua-An, Lafarge Sino Hua-An
Media MCIL - - -
Motor APM, Tan Chong Tan Chong, MBM Tan Chong, APM, Delloyd MBM, Delloyd, Tan Chong,
Proton
O&G Titan, Tanjung Offshore, Titan, Tanjung Offshore, BHIC, Tanjung Offshore, BHIC, Dayang, SapCrest,
EPIC EPIC, BHIC, Petronas Titan, Petronas Dagangan, Perisai, Tanjung Offshore
Dagangan, Dayang EPIC
Plantations Boustead CBIP, Boustead CBIP. Boustead, Batu Boustead, CBIP, First
Kawan Resources, Kulim, Sime
Darby
Power - Tanjong Tanjong, MMC -
Property UEM Land UEM Land Sunrise, UEM Land Sunrise, Mah Sing
Technology MyEG, Globetronics, Unisem MyEG - -
Telecom Axiata Axiata - -
Timber Jaya Tiasa - Jaya Tiasa, Ta Ann Jaya Tiasa
Transport/Logistics Pos, MAHB Freight, AirAsia, NCB AirAsia, Freight, MAHB ILB, MAS
Source: Bloomberg, RHBRI Note: Price data as at 13 Aug

Table 4. Top 20 Performers Grouped By Market Cap (YTD And 3 Months Price Data)
Company Market Cap YTD Perf Company Market Cap 3 Months
(RMm) (%) (RMm) Perf (%)
Titan Chemicals 3,943.6 84.4 Titan Chemicals 3,943.6 77.2
APM Automotive 967.7 80.5 Tanjung Offshore 494.8 56.4
My EG Services 462.8 73.0 Genting Singapore Plc 17,770.1 48.2
Faber Group 1,001.9 71.4 My EG Services 462.8 35.1
Globetronics 353.8 70.5 KFC Holdings 2,081.9 29.2
Tanjung Offshore 494.8 70.3 CBIP 455.3 28.8
Unisem (M) 1,375.3 61.7 EPIC 340.7 25.6
Tan Chong Motor 3,360.0 60.3 UEM Land 6,046.2 24.8
MCIL 1,422.9 57.9 Boustead Holdings 4,099.1 22.5
Supermax Corp 1,989.3 56.2 BHIC 1,197.6 22.0
Hock Seng Lee 885.7 43.7 KPJ Healthcare 1,903.2 21.4
Axiata Group 36,905.3 43.3 Faber Group 1,001.9 21.1
CSC Steel Holdings 680.2 42.1 Freight Management 117.5 20.6
KFC Holdings 2,081.9 41.9 Airasia 4,361.0 20.6
Jaya Tiasa Holdings 1,039.7 41.0 F&N Holdings 4,983.8 19.7
Kossan Rubber 1,211.8 39.6 Tanjong Plc 8,557.1 19.5
QL Resources 1,762.5 37.9 QL Resources 1,762.5 19.3
Daibochi Plastic 239.8 37.4 Tan Chong Motor 3,360.0 16.8
Pos Malaysia 1,632.6 36.9 Genting 30,311.6 16.5
EPIC 340.7 35.8 Petronas Dagangan 10,232.6 15.6
Source: Bloomberg, RHBRI Note: Price data as at 13 Aug

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 17 August 2010

Table 5. Top 20 Performers Grouped By Market Cap (1 Month And 1 Week Price Data)
Company Market Cap 1 Month Company Market Cap 1 Week
(RMm) Perf (%) (RMm) Perf (%)
BHIC 1,197.6 28.2 Genting Singapore 17,770.1 15.9
Tanjung Offshore 494.8 22.9 Sino Hua-An 448.9 14.3
Genting Singapore 17,770.1 22.7 BHIC 1,197.6 13.7
Titan Chemicals 3,943.6 21.6 Mudajaya Group 1,760.1 7.0
Tanjong Plc 8,557.1 20.6 Boustead Holdings 4,099.1 6.1
CBIP 455.3 17.4 Dayang Enterprise 756.8 5.9
Boustead Holdings 4,099.1 15.6 Sunrise 1,060.1 5.4
Sunrise 1,060.1 14.4 MBM Resources 766.0 5.3
Tan Chong Motor 3,360.0 14.2 Delloyd Ventures 282.8 4.5
Airasia 4,361.0 13.7 Integrated Logistics 185.2 4.4
Sino Hua-An 448.9 12.7 CBIP 455.3 4.4
Jaya Tiasa 1,039.7 11.5 Genting 30,311.6 3.4
APM Automotive 967.7 10.3 Sapuracrest Petroleum 3,025.8 3.0
Multi-Purpose Holdings 2,349.5 10.1 Perisai Petroleum 364.3 2.8
Puncak Niaga 1,192.3 9.8 Daibochi Plastic 239.8 2.6
Delloyd Ventures 282.8 9.7 Tan Chong Motor 3,360.0 2.0
Petronas Dagangan 10,232.6 9.6 Fajarbaru Builder 167.9 2.0
Batu Kawan 5,109.3 9.3 MAS 7,152.2 1.9
Freight Management 117.5 9.0 Sunway Holdings 993.1 1.9
Nestle (Malaysia) 9,145.5 9.0 First Resources Ltd 1,718.1 1.7
Source: Bloomberg, RHBRI Note: Price data as at 13 Aug

Table 6. RHBRI’s Top Picks

Price FV EPS PER PBV PCF GDY
FYE (RM/s) (RM/s) (sen) EPS Growth (%) (x) (x) (x) (%) Rec
13 Aug FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY10 FY10
Maybank Jun 7.72 9.66 51.3 60.7 35.7 18.1 15.0 12.7 2.0 n.a. 3.8 OP
CIMB Dec 7.31 8.40 47.8 56.3 20.2 17.9 15.3 13.0 2.4 n.a. 1.7 OP
Maxis Dec 5.30 6.20 33.2 36.2 6.6 9.1 16.0 14.6 3.9 10.3 6.3 OP
Tenaga Aug 8.60 10.20 68.0 78.7 36.6 15.8 12.6 10.9 1.3 4.9 3.2 OP
PLUS Dec 3.78 4.33 24.5 37.4 3.3 52.7 15.4 10.1 3.1 9.4 4.8 OP
Gamuda Jul 3.35 3.85 13.6 16.1 40.4 17.9 24.6 20.8 2.0 115.1 3.6 TB
MRCB Dec 1.71 1.96 6.0 7.3 57.3 21.8 28.6 23.5 1.8 17.9 0.0 TB
Media Prima Dec 2.10 2.80 16.3 18.0 136.4 10.1 12.9 11.7 2.1 6.5 4.8 OP
KPJ Dec 3.52 4.51 24.0 26.6 14.6 10.7 14.6 13.2 2.5 14.0 4.0 OP
Mah Sing Dec 1.83 2.09 13.1 18.3 15.8 39.3 13.9 10.0 1.6 9.9 3.8 OP
Faber Dec 2.76 3.82 26.3 26.4 15.3 0.5 10.5 10.5 2.2 6.6 2.5 OP
HSL Dec 1.52 1.95 13.4 16.2 30.8 21.4 11.4 9.4 2.4 13.7 1.6 OP
^ FY10-11 valuations refer to those of FY11-FY12 Source: RHBRI, Bloomberg

IMPORTANT DISCLOSURES

This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI and RHB Investment Bank
(previously known as RHB Sakura Merchant Bankers). It is for distribution only under such circumstances as may be permitted by applicable law. The opinions
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contrary to opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This report is not to be
construed as an offer, invitation or solicitation to buy or sell the securities covered herein. RHBRI does not warrant the accuracy of anything stated herein in any
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may from time to time have an interest in the securities mentioned by this report.

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“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors,
officers, employees and agents of each of them. Investors should assume that the “Connected Persons” are seeking or will seek investment banking or other
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This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been reviewed by, and may not reflect
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The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based
upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

The recommendation framework for stocks and sectors are as follows : -

Stock Ratings

Outperform = The stock return is expected to exceed the FBM KLCI benchmark by greater than five percentage points over the next 6-12 months.

Trading Buy = Short-term positive development on the stock that could lead to a re-rating in the share price and translate into an absolute return of 15% or
more over a period of three months, but fundamentals are not strong enough to warrant an Outperform call. It is generally for investors who are willing to take
on higher risks.

Market Perform = The stock return is expected to be in line with the FBM KLCI benchmark (+/- five percentage points) over the next 6-12 months.

Underperform = The stock return is expected to underperform the FBM KLCI benchmark by more than five percentage points over the next 6-12 months.

Industry/Sector Ratings

Overweight = Industry expected to outperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Neutral = Industry expected to perform in line with the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Underweight = Industry expected to underperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

RHBRI is a participant of the CMDF-Bursa Research Scheme and will receive compensation for the participation. Additional information on recommended
securities, subject to the duties of confidentiality, will be made available upon request.

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the actions of third parties in this respect.

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