RHBInvest Research Highlights 29th August 2011

29th August 2011

Top Story: Banking ' History suggests potential sector derating ahead Neutral (down from OW)
Sector Update
Maybank: Fair value and call downgraded to RM8.85 Market Perform (down from OP)
CIMB: Fair value at RM7.49 (from RM8.80) Market Perform
Public Bank: Fair value and call downgraded to RM14.10 Market Perform (down from OP)
HL Bank: Fair value at RM11.89 (from RM12.50) Market Perform
AMMB: Fair value and call downgraded to RM6.15 Underperform (down from OP)
AFG: Fair value at RM3.38 (from RM3.60) Market Perform
Affin: Fair value and call downgraded to RM2.77 Underperform (down from MP)

Macro View

Money Supply: Broad monetary aggregate and loan growth eased in July
Economic Highlights (published 26 Aug 2011)
'' The broader money supply, M3, eased to 11.6% yoy in July, off the 30-month high of +12.4% in Jun but higher than +11.5% in May, indicating that economic activities are cooling but remained resilient.

Sector Call

Banking: Jul '11 system data ' Loan growth and leading indicators softened Neutral
Sector update
'' Jul '11 system-wide loan growth eased further to 12.9% yoy, as compared to +13.5% yoy in Jun '11 following lower disbursements during the month (vs. Jun).

Oil & Gas: Petronas 1QFY12/11 results Overweight
Sector Update
Dialog: Fair value at RM3.90 Outperform
P Gas: Fair value at RM14.47 Outperform
RH Petrogas: Fair value at $1.36 Outperform
Dayang: Fair value at RM2.33 Outperform
Petra Perdana: Fair value at RM1.15 Outperform
Wah Seong: Fair value at RM2.66 Outperform
Petronas Chemicals: Fair value and call downgraded to RM6.37 Market Perform (down from OP)
Kencana: Fair value at RM2.99 Market Perform
SapuraCrest: Fair value at RM4.56 Market Perform
KNM: Fair value at RM0.93 Underperform
MMHE: Fair value at RM5.62 Underperform

Corporate Highlights

Carlsberg: Premium segment growing stronger Outperform
Briefing Note
'' Carlsberg's range of premium and super premium beers, which include Hoegaarden, Corona and Asahi, among others, grew by ~44% yoy in the 1HFY11. We understand that the strong growth resulted in Carlsberg's premium brands gaining approximately 4.9%-pts in market in share in the premium beer segment, which accounts for approximately 20% of the total beer market Malaysia .

CI Holdings: Disposal of Permanis by November Trading Buy
Briefing Note
'' During the analysts' briefing on Friday, CI Holdings' (CIH) management highlighted that they are targeting to complete the disposal of Permanis to Asahi in 2QFY06/11. The deal is currently pending the approval from Bursa for CIH's circular to shareholders, MITI, and others. Management expects to hold the EGM concurrently with the AGM in late Oct, would be the final hurdle before Permanis is sold.

Kencana: Expanding its drilling fleet Market Perform
News Update
'' Kencana announced that its subsidiary Kencana Marine Drilling will build two tender assisted drilling rigs (TADRs) at a cost of US$145m (RM435m) each. We are not surprised by this as we mentioned in a previous note that Kencana will resume the expansion of its drilling rig division within the year as it expects many opportunities to emerge for offshore drilling in 2014.

Corporate Results

PetChem: Down on lower production and methane gas supply Market Perform (down from OP)
1QFY11 Results / Briefing Note
'' 3MFY12/11 net profit of RM737m came below expectations accounting for 20.3% of our (RM3.6bn) and 16.8% of consensus estimates (RM4.4bn). Overall, net earnings were down on a qoq basis due lower utilisation and methane gas supply limitation.

Ann Joo: 2QFY12/11 net profit declines by 23% qoq Underperform
2QFY11 Results / Briefing Note
'' 1HFY12/11 net profit came in within our expectations. 2QFY12/11 net profit declined by 23% mainly due to higher raw material cost amid relatively stable steel prices.


Author: William Huang