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

RHB Research Institute

RHB Equity 360°

24 March 2010 (Media, Motor, Sunway City, Glomac; Technical: IRC)

Top Story : Media – Feb’10 adex- up 29.1% yoy Neutral

Sector Update
Media Prima – Fair value unchanged at RM2.23 Outperform
Media Chinese International – Fair value unchanged at RM0.92 Outperform
Star – Fair value unchanged at RM3.60 Market Perform
Astro – Fair value maintained at RM4.30 Underperform (down from TB)
- According to NMR, Feb’s gross adex for TV and print media rose 29.1% yoy with both TV and print media
reporting yoy growth of 55.3% and 11.7% respectively. On the whole, we believe this strong yoy growth
was mainly due to low base effect as a result of weak economic conditions a year ago.
- Overall, Feb’s print media yoy growth was led by the Chinese dailies, which grew 42.6% yoy with stronger
numbers generally posted across the board. The English dailies also recorded better yoy figures (+5.4%
yoy), which was led by the Star and Malay Mail, which grew (16.5% yoy and 16.0% yoy respectively). As
for the Malay dailies, gross adex declines by 2.6% yoy, mainly due to weaker adex for Utusan (-27.9%) and
Berita Harian (-4.6% yoy).
- Feb’s TV adex was still going strong at 29.1% yoy growth, mainly a reflection of last year’s low base. The
stronger TV adex growth was led by TV2 (+120.5%), of which, we believe was aided by their repositioning
exercises last year.
- Media Prima (OP, FV=RM2.23) remains our preferred pick as we believe adex (especially TV) will be a
prime beneficiary of a recovering economy. We maintain our Outperform call on Media Chinese and Market
Perform call on the Star. We have, however, downgraded our call for Astro to Underperform (from trading
buy previously), given that its share price has run up closer to the conditional offer price of RM4.30/share.
- We maintain our Neutral stance on the sector.

Sector Update

Motor : Feb TIV up 8.7% yoy, pointing to resilient growth ahead Overweight
Sector Update
Proton – Fair value is RM5.48 based on stripped down book value Outperform
Tan Chong – Fair value at RM3.60 Outperform
MBM – Fair value at RM3.93 Outperform
UMW – Fair value at RM6.71 Market Perform
- Malaysian automotive industry’s TIV increased 8.7% yoy in Feb 10 (vs. +32.8% yoy in Jan 10) with 40,654
units sold (vs. 59,622 units in Jan 10). We believe the resilient growth in Feb 10 TIV is largely due to the
low base factor arising from the sharp contraction beginning Oct 08 as well as pent-up demand stemming
from car buyers postponing big-ticket purchases in 2009. However, the lower yoy increase in TIV was
largely due to lower yoy growth for most of the top marques as well as yoy contraction for Honda.
Accordingly, mom sales declined by 19.5% (vs. +6.2% mom or 59.6k units in Jan 10) due to the shorter
working month as well as strong demand for new car registrations in Jan 10.
- Separately, we understand that Berjaya Corp (BCorp) is negotiating with the government on the grant to
manufacture Chinese marque BYD given the current freeze on the new manufacturing licences for the
production of petrol-powered cars below 1.8 litres. However, we believe the freeze will unlikely be lifted
given that: 1) entry of CKD Chinese cars would pose a threat to Proton and Perodua; and 2) over-capacity
issues in the local car assembly industry.
- The strong mom gain in Dec 09 (+5.5%) which bucks the trend of seasonal decline arising from year-end
registrations as well as still resilient growth in Feb 10 (+8.7% yoy), suggests that strong demand for cars
would likely flow through 2010. Hence, we expect TIV for motor vehicles to turn around from a contraction
of 2.0% in 2009 to a positive growth of 8.5% in 2010 and 2.5% in 2011. Reiterate Overweight.

Corporate Highlights
Sunway City : RM1.48bn launches to cash in on property upcycle Outperform
Company Update
- Suncity has lined up RM1.48bn worth of property products for launching in FY2010, with a sales target of
RM1bn. We believe the target is achievable mainly because of generally good locations of the products,
the availability of financing packages, and right pricing and target markets. We are particularly excited over
three new projects i.e. Sunway SPK 3 Harmoni, Sunway Rymba Hills and Sunway Velocity. Already,
Sunway SPK 3 Harmoni has achieved 60% booking rate within few days during the soft launch last week.
The project has clocked up about 700 registrants thus far.
- No change to our earnings forecasts for now. Potential surprises could come from further revaluation gains
arising from its hotel assets and better-than-expected profit margins.
- Our fair value is maintained at RM5.33, based on 15% discount to RNAV of RM6.27. Maintain Outperform.

Glomac : Strong sales recorded Outperform

3QFY10 Results/Briefing Note
- 9MFY04/10 normalised net profit was below our and consensus estimates mainly due to slower-than-
expected progress billing. The company declared an interim gross dividend of 4 sen (57% of our dividend
forecast). As at Jan 10, the company had unbilled sales of RM384m or 1.1x of our FY10 property
development revenue forecast.
- Two key highlights from the analysts briefing: 1) 378 units service apartment @ Glomac Damansara will be
a sell-out in view of its strategic location; and 2) Glomac is eyeing prime land in the city centre (which has
estimated development value of at least RM4-5bn.
- FY10-11 earnings forecasts downgraded by 4.4-1.9% but FY12 projection raised by 1.4% due to change in
progress billing assumptions. We have also raised our FY10-12 dividend forecasts from 7 sen to 9 sen. No
change to fair value of RM1.56, based on 30% discount to RNAV of RM2.23. Maintain Outperform.

Technical Highlights

Daily Trading Strategy : Expect some profit-taking activities today …

- The surprise recovery yesterday managed to halt the recent bearish momentum and gave rise to hopes of
a potential technical rebound on the FBM KLCI today.
- We acknowledge the importance of the positive short-term momentum readings. However, as the index
failed to remove the 10-day SMA near 1,306, uncertainties persist.
- Only with a removal of the 10-day SMA will the index extend its upside momentum towards the previous
high of 1,334.34.
- Not that average daily turnover of 800m–1.0bn shares has to be obtained to sustain yesterday’s buying
momentum. Failure to do so will dampen sentiment, hence prompting more profit-taking activities on recent
highflyers.
- As a result, we remain sceptical on the current recovery, and expect investors to take profit, pending
clearer technical signals ahead.

Daily Technical Watch: Integrated Rubber Corporation – Cautious investors should lock in their profits …
- 10-day SMA: RM0.9775
- 40-day SMA: RM1.1265
- Support: IS = RM0.97 S1 = RM0.83 S2 = RM0.70
- Resistance: IR = RM1.32 R1 = RM1.62

Bulletin Board

Co/Sector News Impact Recom

BAT The Customs Department is now arresting Positive. This would help reduce illicit cigarettes UP, FV =
retailers who are caught selling contraband sold in the market and may help to improve total RM38.95
cigarettes instead of just issuing compound TIV of legal market.
notices. (The Star)
Important Dates

Company Entitlement details Ex-date Payment date

New entitlements
Malaysian Bulk Carriers Final single tier dividend of 15 sen 16-Apr-10 30-Apr-10

Going “ex” on 25 Mar

Iris Corporation Renounceable rights issue of new warrants on the basis of 3-for-20 25-Mar-10 -

...For more details, see individual reports attached

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