Market Dateline PP 7767/09/2010(025354)

RHB Research Institute

RHB Equity 360°

9 March 2010 (Box-Pak, Construction, Proton; Technical: L&G)

Top Story : Box-Pak – Growth from Vietnam Not Rated

Visit Note
- Box-Pak’s Vietnam operations provided growth for the company in the past four years, growing by a CAGR
(FY05-09) of 32.5% (vs. Malaysia of 5%). Given the strong prospects in the Vietnam market i.e. 3x
Malaysia’s population size, high proportion of young adults (about 62%), increasing trade liberalisation and
early phase of industrialisation, we believe Box-Pak will be a key beneficiary. As it stands, Box-Pak will be
expanding its Vietnam operations by increasing its capacity by 2,000t/m in mid-2010 (to 6,000t/m) and by
another 2,000t/m (to 8,000t/m) in 2011.
- Assuming Box-Pak expands its Vietnam plant from 4,000t/m to 6,000t/m by mid-10 and operating profit
margin normalises at a conservative 10% (when raw material prices climb up) vs. 12-13% in 3Q-4Q09, we
estimate FY10 net profit to be at RM17.6m, representing 21.5% growth yoy. Beyond 2010, growth
momentum would be spurred by full-year impact from the higher capacity, additional capacity expansion as
well as greater economies of scale.
- The stock is currently trading at FY12/10 PER of 5.4x, which is relatively low in comparison to its 3-year
average historical forward PER of 8x. We value Box-Pak at RM2.35/share based on 8x FY12/10 EPS.

Sector Update

Construction : “Less familiar names” to bag LCCT’s terminal and satellite building packages Underweight
Sector Update
- We understand from sources that the terminal and satellite building packages of the new LCCT worth
RM700-800m and RM500m respectively are going to “less familiar names”. The formal award of the
contracts is expected within days.
- To recap, Business Times end of last month carried a story that Malaysia Airports had shortlisted five
bidders for the terminal and satellite building packages of the new LCCT, i.e. IJM, Sunway Holdings, UEM-
Bina Puri JV, Gadang Holdings-PPC JV and privately-held AHT Norlan-Carriage JV.
- We also understand from sources that Malaysia Airports has shortlisted bidders for the parking apron
package worth about RM200m.
- Maintain Underweight.

Corporate Highlights

Proton : Streamlining vendors for EMAS Outperform

Company Update
- Proton will develop a comprehensive local vendor structure to support its global car programme after
unveiling its concept car, EMAS at the International Motor Show in Geneva, Switzerland last week.
- Currently, there are 220 vendors that supply parts to Proton, but it is expected that only 10-15 vendors will
be identified during the development phase of EMAS.
- Proton has an audit programme which assesses the technical capability and process effectiveness of its
vendors on three main areas, i.e. product development and process, supplier input as well as material and
production.
- Maintain Outperform with unchanged fair value of RM5.48 based on stripped down book value.

Technical Highlights

Daily Trading Strategy : On the way to cover a technical gap near 1,354.79 …
- With yesterday’s powerful rally, the FBM KLCI could resume the previous 11-month uptrend, with the
previous resistance zone of 1,250-1,300 region as its medium-term technical support zone going forward.
- Aided by the recent positive crossover of the 10-day SMA to above the 40-day SMA, as well as robust
 trading interests at above 1.0bn shares mark, the index is poised to surge further in the short term.
- In our view, it is on the way to cover a technical gap near 1,354.79, before heading towards the 1,390
tough resistance level.
- However, the index must defend at above the 1,300 level, should a sudden technical pullback appear in the
immediate term.
- Apart from the solid buying support on selective heavyweights, buying interests on lower liners should
improve if average daily turnover can maintain at around 1.0bn – 1.5bn shares mark in the near term.

Daily Technical Watch: Land & General – Recrossing the 40-day SMA will confirm a technical rebound…
- 10-day SMA: RM0.4725
- 40-day SMA: RM0.519
- Support: IS = RM0.50 S1 = RM0.425 S2 = RM0.36
- Resistance: IR = RM0.56 R1 = RM0.635

Bulletin Board

Co/Sector News Impact Recom

Plantations According to a media interview KLK’s plantations
director Roy Lim expects to see higher CPO
prices in its 2QFY09/10, of about RM2,400-
2,500/tonne. He also said that prices of CPO
may be capped at RM2,800/tonne in the next
three months. Tan Sri Lee Shin Cheng, however,
was quoted as saying that prices could hit
RM3,000/tonne in 2010 due to strong Asian
demand. (Financial Daily)
Bursa listing Bursa Malaysia has approved Petronas Gas’
guidelines application for a lower public shareholding
spread of 23.46% to be in compliance with
Paragraph 8.02 of the Main Market Listing
Requirements. (Bursa)
Petronas Bursa has approved Petronas Gas’ application
Gas for a lower public shareholding spread of 23.46%
to be in compliance with Listing Requirements.
(Bursa)
Positive. We share the view of strong CPO OW
fundamentals and prices. KLK’s 2QFY09/10 price
mentioned by the plantations director is close to
our projected price assumption of RM2,500/tonne
for KLK for FY09/10.
Although Bursa’s approval is likely to be on a -
case by case basis, this could be positive for
other tightly-held companies. However, for those
where there is quite a large shortfall, e.g. NSTP
(free float of only 10.4% due to the Media Prima
takeover) and Box-Pak (public shareholding of
only 17.01%), this will likely still have to be
rectified or other action taken.
Neutral. While PGas’ free float of less than 25% UP, FV =
implies tight liquidity for the stock, we believe this RM10.08
has little bearing on the share price which
continues to be supported by dividend yields of
5-6% p.a..

Important Dates

Company Entitlement details Ex-date Payment date

New entitlements
Chin Well Holdings Tax exempt interim dividend of 0.6 sen 31-Mar-10 16-Apr-10
Hubline First and final tax exempt dividend of 0.2 sen 13-May-10 31-May-10

Going “ex” on 10 Mar

Alliance Financial Group Second interim single tier dividend of 5.1 sen 10-Mar-10 26-Mar-10
Amway (M) Holdings 4th interim single tier dividend of 7 sen 10-Mar-10 26-Mar-10
DRB-Hicom Interim gross dividend of 1.5 sen less tax 10-Mar-10 29-Mar-10
Golden Land Interim single tier dividend of 1 sen 10-Mar-10 31-Mar-10
Chuan Huat Resources Interim dividend of 1.5 sen less 25% tax 10-Mar-10 8-Apr-10
...For more details, see individual reports attached

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