RHBInvest Research Highlights 31st January 2012

by **hlk** Tue 31 Jan 2012, 10:51

31st January 2012

Top Story

Wah Seong ' A Quiet 2012? Market Perform
Visit Note
- We
met up with Wah Seong's management recently and came away positive
on: 1) news that the domestic pipe-coating contracts are picking up;
2) the progress with the Insituform JV; and 3) the ongoing endeavour
to segregate the two core business, with the aim for better
operational focus.
- However,
our concerns are: 1) the uncertainty of the domestic pipe-coating
contract awards; and 2) the lack of a large international project to
anchor earnings for 2012.

Sector Update

Motor ' Storm In A Teacup Neutral (Upgraded)
Sector Update
DRB-HICOM ' Fair value raised to RM3.45 Outperform (Upgraded)

UMW ' Fair value at RM6.20 Underperform
- Recent
media reports suggest that banks are considering measures to tighten
HP lending, including restricting buyers to a maximum of two car loans
at any one time reducing the margin of financing for the second HP
loan (65-70%) and also for loans for "luxury" makes (50%).
- We
understand that there is no official directive from Bank Negara
(BNM). In our opinion, the possible measures are not likely to have a
significant impact on auto sales given that the majority of HP
borrowers have only one car loan.

Corporate Highlights

Public Bank ' Results in line but dividend slightly disappointing Outperform
Results / Briefing Note
- Public
Bank's 4Q11 results were in line with our and consensus estimates but
the interim net DPS of 28 sen declared was below our expected 31.5
sen. Full-year net payout was 48.3% was below our 52.5% assumption,
which we suspect was partly to conserve capital as BNM has yet to
announce its stand on the countercyclical buffer.

Author: TradeTalk