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

RHB Research Institute

RHB Equity 360°

6 April 2010 (Semicon; Technical: Lion Industries, Scomi)

Top Story : Semiconductor – Feb sales up strongly by 56.2 yoy Overweight

Sector Update
- Feb 10 chip sales of US$22.0bn declined (-1.3% mom) after a gain in Jan. This is not unexpected as wafer
foundries cut back on production on the anticipation of seasonally weaker sales in Feb.
- Equipment bookings in Feb 10 were up a whopping 377% yoy (vs. 325% in Jan 10) to US$1.23bn mainly
due to higher investment in test capacity and wafer fabrication equipment as well as the low base factor in
Feb 09. Despite a shorter working month in Feb 10, bookings were up 4.5% (vs. +29.1% mom in Jan 10)
pointing towards stronger capex spending ahead.
- Separately, major computer suppliers (i.e. Acer and HP) expect notebook and netbook sales from
emerging economies (i.e. China and Brazil) to register stronger growth in 2010-11 given the pent-up
demand as consumer and corporates delay purchases of computers during the global economic crisis. In
the same vein, Renesas (third-biggest chip maker) is looking into high-growth markets, moving away from
stagnant markets (i.e. Japan and US).
- We are reiterating our Overweight stance on the sector. Our top pick for the sector is Unisem.

Technical Highlights

Daily Trading Strategy : Robust rotational plays to return soon…

- Technically, yesterday’s closing with another positive candle has confirmed last Friday’s chart breakout
from Mar’s high of 1,334.34. This suggests that the FBM KLCI’s current uptrend remains firmly intact.
- Aided with the daily turnover that has recovered back to above the 1.0bn mark, the FBM KLCI is poised to
improve its trading sentiment soon.
- This means with stronger trading interests amongst the retail and institutional investors, the FBM KLCI has
a brighter chance to fill-up the pevious technical gap at 1,344.46 – 1,354.79 in the near term.
- In fact, we expect healthy rotational play to return with lower liners stocks attracting fresh buying interests.
- All these will eventually lead the index towards our medium-term target at 1,390, in our view.

Daily Technical Watch: Lion Industries – The stock could rechallenge the RM2.16 higher resistance soon…
- 10-day SMA: RM1.789
- 40-day SMA: RM1.708
- Support: IS = RM1.87 S1 = RM1.60 S2 = RM1.30
- Resistance: IR = RM2.16 R1 = RM2.51 R2 = RM2.78

Short-term Trading Idea : Scomi – Breaking out from the downtrend resistance line… Bargain Buy
- Strategy: Bargain Buy above RM0.40 for a confirmation of a chart breakout.
- Target: IR = RM0.53 R1 = RM0.57 R2 = RM0.69
- Support: IS = RM0.40 S1 = RM0.36 S2 = RM0.255
- Exit: Cut loss if it falls below the 10-day SMA near RM0.39

Bulletin Board

Co/Sector News Impact Recom

Maybank Maybank expects financing for its Islamic
banking unit to record more than 18% growth for
FY06/10. Separately, Maybank has announced
an internal restructuring to transfer its 69% stake
in Maybank Fortis to wholly-owned Etiqa
International for RM359m. (Financial Daily)
Neutral. Islamic financing makes up around 15% OP, FV =
of the Group’s total gross loans as at 31 Dec ’09 8.96
and the growth would form part of our overall
FY10 loan growth assumption of 8%. As for the
internal restructuring, there will be no gain or loss
from the transfer, but is expected to help realign
Maybank’s insurance and takaful businesses.
 Affin Affin is expected to complete the acquisition of We suspect the bank could be a small one with OP, FV =
PT Bank Ina Perdana by 3Q10. (StarBiz) asset size of <RM450m (vs. RM40bn for Affin). 3.03
Thus, it may take time before the new venture
starts to contribute meaningfully to the group.
CIMB The SC’s proposed move to raise the CIMB would be one of the banks that are more OP, FV =
shareholder approval threshold in the takeover of sensitive to a drop in M&A activities. However, 16.24
companies’ assets and liabilities may result in a this is a consultative paper at the moment and
drop in M&A activities. (Financial Daily) there could still be changes in the final ruling.
Sime Darby All of the conditions relating to Sime’s sale and Positive, as Sime would now be able to start OP, FV =
purchase agreement to acquire Ramunia’s tendering for more deepwater fabrication jobs RM9.85
assets have been fulfilled and as such, the S&P and be able to benefit from the synergistic
agreement is now unconditional and the benefits of having a larger capacity for its
acquisition can be completed. (Bursa Malaysia) fabrication yard. Assuming Sime is able to
improve Ramunia’s operations once it takes over
management, to achieve operating margins
which are close to its own margins (of 5-7%) and
obtain another RM3-4bn in jobs, this would result
in adding another 4-6% to Sime’s bottomline on a
full year basis, or another RM0.10-0.20/share to
Sime’s SOP-based fair value.

Important Dates

Company Entitlement details Ex-date Payment date

New entitlements
Amanahraya REIT 1st interim income distribution of 1.832 sen (taxable) + 0.0277 sen (TE) 14-Apr-10 27-May-10
Selangor Properties First and final dividend of 10 sen less 25% tax 29-Apr-10 21-May-10
Suria Capital Final dividends of 1 sen less 25% tax + 2 sen tax exempt 4-May-10 21-May-10
QSR Brands Final dividend of 9 sen less 25% tax 4-May-10 27-May-10
KFC Holdings Final dividend of 16 sen less 25% tax 4-May-10 27-May-10
LCTH Corporation Final dividend of 1.78 sen less 25% tax 5-May-10 21-May-10

Going “ex” on 7 Apr

Global Carriers Share consolidation 7-Apr-10 -
UMS Holdings Final dividend of 4.98% tax exempt 7-Apr-10 23-Apr-10

...For more details, see individual reports attached

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