PP 7767/09/2010(025354)

29 April 2010

Malaysia Corporate Highlights

RHB Research
Institute Sdn Bhd
A member of the
RHB Banking Group
Company No: 233327 -M

R e su l ts N o t e
29 April 2010
MARKET DATELINE

YNH Property Share Price

Fair Value
:
:
RM1.76
RM1.86
Stronger 2HFY12/10 Ahead Recom : Market Perform
(Maintained)

Table 1 : Investment Statistics (YNHPROP; Code: 3158) Bloomberg: YNHB MK

Net Net
FYE Turnover profit EPS Growth PER C.EPS* P/CF P/NTA ROE Gearing GDY
Dec (RMm) (RMm) (sen) (%) (x) (sen) (x) (x) (%) (%) (%)
2008 350.0 86.8 21.8 0.2 8.1 - 9.4 1.1 13.3 0.3 5.0
2009 269.6 53.0 13.9 (36.3) 12.6 - 17.3 1.0 7.4 0.3 3.6
2010f 311.0 63.6 16.1 15.8 10.9 17.0 7.5 0.9 8.5 0.2 3.6
2011f 373.3 71.0 18.0 11.6 9.8 21.0 6.8 0.9 8.9 0.2 3.6
Main Market Listing /Non-Trustee Stock/Syariah Approved Stock By The SC * Consensus Based On IBES Estimates

RHBRI Vs. Consensus

♦ Within expectations. 1QFY12/10 net profit made up 22-23% of our and Above
consensus estimates. We consider the results within expectations as we In Line
Below
expect stronger 2H on the back of new property launches and as
construction works of Fraser Residence and Kiara 163 commence. The Issued Capital (m shares) 403.2
company’s unbilled sales currently stand at about RM890m, or 2.9x of our Market Cap(RMm) 709.7
Daily Trading Vol (m shs)
FY10 revenue forecast. 0.4
52wk Price Range (RM) 1.15-2.11
♦ Fraser Residence clocks up 300 registrants. YNH expects to put into Major Shareholders: (%)
the market its RM550m Fraser Residence, a mixed development project Yu Family 32.3
LTH 5.8
(next to Renaissance Hotel) comprising serviced residences, office suites
Aberdeen 10.3
and a retail mall, by Jul 10. The selling price for the 440 units of serviced
residences (fully furnished with a built-up area of 600-1,600 sq ft) will
start from RM800 psf with rental guarantee. So far, the project has FYE Dec FY09 FY10 FY11
EPS chg (%) - - -
clocked up 300 registrants. The company already tendered out the
Var to Cons (%) - (5.1) (14.3)
substructure works this month and construction works will soon start.
PE Band Chart
♦ Soft launch for Kiara 163 in Sep 10. The soft launch for Kiara 163, a
PER = 16x
service apartment project in the Mont Kiara area with a GDV of RM550- PER = 12x
PER = 8x
600m is expected by Sep 10. The 580 units of service apartments of the PER = 4x
project will have a small built-up area of 650-1,200 sq ft. The key selling
point of the project is affordable pricing (fully furnished, tentative selling
price from RM750 psf with rental guarantee), targeted at young
professionals and families. So far, the project has clocked up 250
registrants.

♦ Forecast. Maintained. Relative Performance To FBM KLCI

♦ Risks. The risks include: (1) Failure to sell Menara YNH –office; (2)
Competition from peers; and (3) Delays in launches, approvals and
YNH Property
construction works.

♦ Maintain Market Perform. Indicative fair value is RM1.86 based on a FBM KLCI
40% discount to our estimated RNAV of RM3.11 to reflect YNH’s generally
longer turnaround time for its properties vis-à-vis its peers that means
higher holding costs and weaker cashflow.

Joshua CY Ng
Please read important disclosures at the end of this report.
(603) 92802237
joshuang@rhb.com.my

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Table 2. YNH Prop Quarterly Results

QoQ YoY
FYE Dec (RMm) 1Q09 4Q09 1Q10 3M09 3M10 YoY (%) Comments
(%) (%)
Turnover 62.9 47.8 93.8 96.2 49.1 62.9 93.8 49.1 Yoy improvement due to stronger
progress billings from its Cerian
Kiara and Perak projects.
EBIT 22.5 17.2 23.7 37.7 5.5 22.5 23.7 5.5
Net interest (2.4) (3.9) (3.2) (17.5) 32.6 (2.4) (3.2) 32.6 Net gearing was maintained at
0.25x as at 1Q10.
Pretax profit 20.1 13.4 20.6 53.7 2.3 20.1 20.6 2.3
Taxation (4.9) (4.3) (5.8) 33.4 17.9 (4.9) (5.8) 17.9
Net profit 15.2 9.0 14.8 63.5 (2.7) 15.2 14.8 (2.7) Yoy decline due to higher tax
charges.
EPS (sen) 4.1 2.3 3.7 59.4 (10.1) 4.1 3.7 (10.1)

Gross DPS (sen) - 3.4 - n.a. n.a. - - n.a.

NTA/share (RM) 1.6 1.7 1.8 1.6 1.8
EBIT margin (%) 35.8 36.1 25.3 35.8 25.3
Pretax margin (%) 31.9 28.0 21.9 31.9 21.9
Tax rate (%) 24.5 32.5 28.2 24.5 28.2

Table 3. Earnings Forecasts Table 4: WACC assumption

FYE Dec (RMm) FY08a FY09a FY10F FY11F
(%)
Revenue 350.0 269.6 311.0 373.3 Risk free rate 4.2
Operating profit 128.4 83.6 86.0 95.9 Equity risk premium 9.0
Interest expenses (9.7) (11.2) (12.2) (15.1) Beta 1.3
PBT 118.7 72.4 86.0 95.9 WACC 11.7
Tax (31.8) (19.4) (22.4) (24.9)
Net profit 86.8 53.0 63.6 71.0
EPS (sen) 21.8 13.9 16.1 18.0
DPS (sen) 8.7 6.4 6.4 6.4
Source: Company data, RHBRI estimates
Table 5: RNAV Estimate

Area Book value Mkt Value Surplus

Assets (Acres) (RMm) (RMm) (RMm)

Perak 986.5 157.2 343.8 186.6

Klang Valley 16.7 80.0 145.5 65.5

252.1

RMm RM
Surplus from land in Perak 252.1

DCF of Ceriaan Kiara 10.7

DCF of Menara YNH 54.6
DCF of D'Kiara 103.8
Project 3 KL 80.5
Project 5 Duta 0.0
Manjung Hospital 11.0
NTA as @ 31 Dec 09 713.6
Total RNAV 1,226.4
Paid-up capital (m) 394.6
Basic RNAV per share (RM) 3.11

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IMPORTANT DISCLOSURES

This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI and RHB Investment Bank Berhad
(previously known as RHB Sakura Merchant Bankers Berhad). It is for distribution only under such circumstances as may be permitted by applicable law. The
opinions and information contained herein are based on generally available data believed to be reliable and are subject to change without notice, and may differ or
be contrary to opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This report is not to be
construed as an offer, invitation or solicitation to buy or sell the securities covered herein. RHBRI does not warrant the accuracy of anything stated herein in any
manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against RHBRI. RHBRI and/or its associated persons
may from time to time have an interest in the securities mentioned by this report.

This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives
of persons who receive it. The securities discussed in this report may not be suitable for all investors. RHBRI recommends that investors independently evaluate
particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a particular investment or
strategy will depend on an investor’s individual circumstances and objectives. Neither RHBRI, RHB Group nor any of its affiliates, employees or agents accepts
any liability for any loss or damage arising out of the use of all or any part of this report.

RHBRI and the Connected Persons (the “RHB Group”) are engaged in securities trading, securities brokerage, banking and financing activities as well as providing
investment banking and financial advisory services. In the ordinary course of its trading, brokerage, banking and financing activities, any member of the RHB
Group may at any time hold positions, and may trade or otherwise effect transactions, for its own account or the accounts of customers, in debt or equity
securities or loans of any company that may be involved in this transaction.

“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors,
officers, employees and agents of each of them. Investors should assume that the “Connected Persons” are seeking or will seek investment banking or other
services from the companies in which the securities have been discussed/covered by RHBRI in this report or in RHBRI’s previous reports.

This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been reviewed by, and may not reflect
information known to, professionals in other business areas of the “Connected Persons,” including investment banking personnel.

The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based
upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

The recommendation framework for stocks and sectors are as follows : -

Stock Ratings

Outperform = The stock return is expected to exceed the FBM KLCI benchmark by greater than five percentage points over the next 6-12 months.

Trading Buy = Short-term positive development on the stock that could lead to a re-rating in the share price and translate into an absolute return of 15% or more
over a period of three months, but fundamentals are not strong enough to warrant an Outperform call. It is generally for investors who are willing to take on
higher risks.

Market Perform = The stock return is expected to be in line with the FBM KLCI benchmark (+/- five percentage points) over the next 6-12 months.

Underperform = The stock return is expected to underperform the FBM KLCI benchmark by more than five percentage points over the next 6-12 months.

Industry/Sector Ratings

Overweight = Industry expected to outperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Neutral = Industry expected to perform in line with the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Underweight = Industry expected to underperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

RHBRI is a participant of the CMDF-Bursa Research Scheme and will receive compensation for the participation. Additional information on recommended
securities, subject to the duties of confidentiality, will be made available upon request.

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actions of third parties in this respect.

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