RHBRI's Monthly Stock Watch - Special Focus: Taking Stock - Position For More Volatility Ahead - 30/04/2010

MARKET DATELINE
PP 7767/09/2010(025354)
30 April 2010
•
Malaysia
RHBRI’s Monthly Stock Watch
Special Focus :
Taking Stock - Position For More Volatility Ahead

(See page 15)
Manufacturing Sector (See page 20)
Changes In Recommendation And Forecast From

Last Stock Watch For March 2010
Recommendation Adjustment Reasons For Changes In
Company Current Previous Date Recommendation And Forecast
Allianz Malaysia Outperform Outperform 29 Apr 2010 FY10-12 EPS forecasts were raised
by 8-15% p.a after removing the
notional interest on the RM490m
inter-company loan from parent,
Allianz SE from 3QFY10, assuming
the ICPS issue is completed within
the next three months.
Ann Joo Outperform Outperform 29 Apr 2010 FY12/10-12 net profit forecasts
lowered by 2.6-7.6% to reflect
higher raw material costs that more
than offset higher selling price
assumptions. Correspondingly,
indicative fair value was downgraded
by 5.9% to RM3.32 based on 12x
revised FY12/10 fully-diluted EPS of
27.6 sen.
Astro Trading Buy Underperform 18 Mar 2010 We have raised our indicative fair
value to the conditional offer price
of RM4.30 (previously RM3.10,
based on SOP) and consequently,
upgraded our recommendation to
Trading Buy from Underperform.
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Astro Market Perform Trading Buy 24 Mar 2010 Given that Astro’s share price has
run up closer to the conditional offer
price of RM4.30/share, we have
downgraded our recommendation to
Market Perform from Trading Buy.
Axis REIT Outperform Outperform 21 Apr 2010 Upgraded our FY10-12 earnings
forecasts by 0.4-8.1% to factor in
earlier-than-expected completion of
the acquisition of industrial building
in Seberang Prai (early March 10,
instead of May 10 previously) as well
as the new industrial building
acquisition in PTP.
Berjaya Sports Outperform Outperform 8 Apr 2010 We have tweaked our forecasts for
Toto BToto slightly, after fine-tuning some
parameters, resulting in a revision
of -2% for FY04/10, +0.7% for FY04/
11 and +1.8% for FY04/12. No
change to our fair value of RM4.95.
Berjaya Sports Outperform Market Perform 12 Mar 2010 Despite the positive potential of the
Toto launch of BToto’s new RM8.88m
minimum jackpot game, we are not
revising our forecasts for now, as we
prefer to monitor the new game’s
popularity first. We have, however,
upped our DCF-based fair value to
RM4.95 (from RM4.35) after rolling
forward our base year to FY11 and
raising our terminal growth rate to
3% (from 2.5%) to reflect the better
long-term prospects. As such, we
have upgraded our recommendation
to Outperform (from Market
Perform).
Carlsberg Outperform Outperform 28 Apr 2010 We increased our earnings forecasts

by 2-2.8% for FY10-12 after
increasing our average selling prices
for Carlsberg. Our DCF-based fair
value remains at RM5.90, based on
unchanged WACC of 9.2%.
RHBRI'S MONTHLY 2 STOCK WATCH

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CSC Steel Outperform Outperform 30 Apr 2010 FY12/10-12 net profit forecasts raised
by 26.1-46.5% to reflect higher sales
volumes and selling price
assumptions. Correspondingly,
indicative fair value was raised by
26.2% to RM2.55 based on 9x
revised FY12/10 EPS of 28.3 sen.
Faber Outperform Outperform 1 Mar 2010 Following the better-than-expected

revenue derived from the concession
and non-concession IFM segment, we
have raised our FY10 and FY11
revenue forecasts by 3.7% and 6.9%
respectively. We have also revised
our FY10 and FY11 EBIT margin
assumptions to 18.7% and 19.4%
(from 16.5% and 16.9%) to reflect
the FY09 margins achieved by Faber.
As a result, our earnings forecasts
have been raised by 18.0% and
24.0% respectively. Our indicative fair
value has been raised to RM3.30
(from RM3.01).
Faber Outperform Outperform 1 Apr 2010 We have revised our FY10 earnings
projection upward by 8.3% but
reduced our FY11 numbers by 18.7%
to reflect lower effective tax rate
assumption and the impact of FRS
convergence. Besides that, we have
also switched our valuation
methodology for property segment
from PE to RNAV in line with the
sector. Our SOP valuation, however,
is maintained at RM3.30.
Fajarbaru Outperform Outperform 26 Apr 2010 FY06/10 net profit forecast raised by
9% largely to reflect a higher blended
margin of 15% vis-à-vis 11.3%
previously. FY06/11-12 net profit
forecasts cut by 11-13% largely to
reflect the impact of the shortfall in
new contracts secured in FY06/10.
Genting S’pore Outperform Outperform 27 Apr 2010 Post-visit, we tweaked our forecasts
slightly, by +0.4-0.8% for FY10-12.
No change to our S$1.35 fair value,
based on blended average of EV/
EBITDA (12x FY11 based on regional
average) and DCF methodologies.

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Genting S’pore Outperform Outperform 8 Mar 2010 We have revised our FY10 forecasts
downwards by 3.1% to push our
projected contribution from USS back
by 1.5 months to beg-May (from
beg-March). No change to S$1.35 fair
value, based on blended average of
EV/EBITDA (12x FY11 based on
regional average) and DCF
methodologies.
Glomac Outperform Outperform 24 Mar 2010 Downgraded our FY10-11 earnings

forecasts by 4.4-1.9% but raised
FY12 earnings projections by 1.4%
due to the change in progress billing
assumptions. We had also raised our
FY10-12 dividend forecasts from 7
sen to 9 sen. No change to our
indicative fair value of RM1.56.
Hartalega Underperform Market Perform 31 Mar 2010 The run up in share price means
that the price is now close to our fair
value. Hence, we downgraded the
stock to Underperform from Market
Perform.
Hartalega Market Perform Underpeform 16 Apr 2010 We have upgraded Hartalega to

Market Perform from Underperform
as the recent correction in share price
means that valuations are now not
overly stretched.
Hiap Teck Outperform Outperform 31 Mar 2010 FY07/10-12 net profit forecasts
lowered by 2.3-13.7% to reflect lower
sales volume assumptions at the
manufacturing division.
Correspondingly, indicative fair value
was lowered by 10.4% to RM1.80
based on 9x revised CY2010 EPS of
20.0 sen.
Jaya Tiasa Underperform Underperform 17 Mar 2010 Our earnings forecasts are increased
by 30-57% p.a. for FY11-12 after
increasing our FFB yield assumptions
by 20-44%. Our SOP-based fair
value is increased to RM2.35 (from
RM1.80) based on unchanged 14x
FY10 timber division earnings and
12x FY10 plantation division earnings.

www.rhbinvest.com
Jaya Tiasa Underperform Underperform 31 Mar 2010 We increased our earnings forecasts
by 2-14% p.a. for FY11-12 after
increasing our plywood price
assumptions. Our SOP-based fair
increased 14x (from 12x) FY10
plantation division earnings.
KL Kepong Outperform Outperform 25 Mar 2010 Post-visit, we revised our forecasts

down by 7.1% for FY10, 1.5% for
FY11 and 18.7% for FY12, after: (1)
increasing new planting to 15,000ha
for FY10-11 (from 10,000ha); (2)
reducing our CPO price assumption
for FY12 to RM2,500/tonne (from
RM2,700 previously); (3) pushing
back contributions from KLK’s new
MES plant to FY09/11 from 2HFY09/
10, raising capacity assumption to
350,000 tonnes (from 300,000
tonnes) and reducing utilisation
rates; (4) reducing provision for store
closure in C&E US to US$5m (from
US$17m) in FY10; (5) imputing
contributions from KLK’s new township
development into forecasts from
FY12; and (6) reducing capex to
RM500m (from RM600m) for FY10-
12. Post-earnings revision, we lower
our SOP-based fair value for KLK to
RM18.40 (from RM19.50).
KLCC Prop Market Perform Market Perform 2 Apr 2010 Downgraded our FY11-12 earnings
forecasts by 2.1-9.7% to factor in
the delay in the completion of Lot C
construction works
KNM Underperform Market Perform 15 Apr 2010 Given the fall-out of the proposed
acquisition, we have revised down our
fair value to RM0.75 (from RM0.90
previously), which is based on 13x
FY10 PER.

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KNM Underperform Underperform 30 Apr 2010 We have cut our FY10-12 core EPS
forecasts by 31.6%, 1.6% and 1.0%
respectively after factoring in: 1)
lower utilisation rates; and 2)
lower contribution from Borsig’s
higher-margin products. Nevertheless,
we expect earnings to rebound
strongly in FY11-12 as the stronger
recovery in crude oil price to above
US$80/barrel, would revive more non-
conventional oil sands projects, and
hence raise the demand for higher-
end process equipment.
Accordingly, our fair value was
lowered to RM0.51 (vs. RM0.75
previously) based on unchanged 13x
FY10 PER.
KPJ Healthcare Market Perform Outperform 1 Apr 2010 Given the limited upside to our target
price of 9% vs. our projected FBM
KLCI return of 6%, we have
downgraded our recommendation on
KPJ to Market Perform (from
Outperform) with unchanged fair
value of RM3.20 based on 14.5x
FY10 EPS.
Lafarge Outperform Underperform 29 Mar 2010 1-year forward target PER raised from
12x to 14x on the back of the
improved demand outlook on the
cement sub-sector that will in turn
boost investors’ risk appetite in the
near term. Correspondingly,
16.7% to RM7.21 based on revised
14x FY12/10 EPS of 51.5 sen.
Lafarge Outperform Outperform 27 Apr 2010 FY12/10-11 net profit forecasts raised
by 8.4-13.1% to reflect higher selling
prices that more than offset higher
energy costs. Correspondingly,
8.3% to RM7.81 based on 14x FY12/
10 EPS of 55.8 sen.
Mah Sing Outperform Outperform 15 Apr 2010 Adjusted our FY10-12 EPS forecasts
for the 1-for-5 bonus issue that was
completed in Apr, resulting in our
estimates being lowered by 16.7%
p.a.. Due to the larger number of
shares, we have also lowered our
RNAV-based fair value from RM2.45
to RM2.04. No change to our
Outperform call.

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Mah Sing Outperform Outperform 23 Apr 2010 We raised FY12/11-12 net profit
forecasts by 3.9-10.3% p.a. to reflect
the contribution from M Suites @ Jln
Ampang. Our RNAV-based fair value
was raised by 2.5% from RM2.04 to
RM2.09 after taking M Suites @ Jln
Ampang into account.
MBM Outperform Outperform 12 Apr 2010 We have revised up our earnings

forecasts by 1.8% for FY10 and 2.0%
for FY11 and FY12 to reflect the
strength of the RM against JPY.
Accordingly we have increased our fair
value for MBM to RM5.04 (previously
RM3.93) based on 11x FY10 EPS (vs.
9x previously). Nevertheless, we
believe there is upside to our FY10-
12 earnings projections arising from
stronger-than-expected unit sales of
Alza.
MCIL Outperform Outperform 7 Apr 2010 We have raised our target CY10 PER
to 13x (11x previously) to reflect the
improved liquidity on the stock. Our
revised target CY10 PER is at a 20%
discount to our target PER for Star
(of 16x) on account of its smaller
market capitalisation. Consequently,
our indicative fair value has been
raised to RM1.09 (from RM0.92).
Media Prima Outperform Outperform 28 Apr 2010 We have revised up our FY10 and
FY11 ad revenue growth projections
for the TV segment to +8.0% and
+5% respectively (from +3.8% and
+4.5%) and for print segment, to
+4.9% and +4.6% respectively (from
+1.5% and 2.0%). Overall, our FY10-
11 net profit forecasts have been
raised by 9.9-13.5%. As a result, our
indicative fair value has been raised
to RM2.55 (from RM2.23), based on
unchanged target FY10 PER of 15x.

www.rhbinvest.com
MPI Outperform Outperform 14 Apr 2010 We have raised our FY10-12

earnings projections by 5.8%, 2.9%,
and 0.91% respectively after factoring
in stronger-than-expected medium
term chips demand from China as
well as margin expansion
contribution from strong sales of
high-density packages and module
packages. Accordingly, our fair value
has been raised to RM8.46/share
from RM8.15/share which is based
on unchanged 15x CY10 PER.
Notion Vtec Outperform New Coverage 15 Mar 2010 We have initiated coverage on
Notion Vtec with an Outperform
recommendation. Indicative fair
value of RM4.59 based on 10x FY11
EPS.
Notion Vtec Outperform Outperform 26 Apr 2010 We have revised our FY10 net profit
forecast by 8.6% driven by higher-
than-expected contribution from
sales volume of base plates from
Samsung and strong contribution
from higher-margin spindle motor
hub. We are maintaining our
indicative fair value of RM4.59 based
on a target PER of 10x FY09/11 EPS.
Notion Vtec Outperform Outperform 30 Apr 2010 Notion announced a proposal to

acquire 60% of Autic Mekki Sdn Bhd.
While the acquisition would be a cost
effective measure in manufacturing
components which require nickel
plating, we expect this would also
increase net profit by RM0.5-0.6m
per quarter. Hence, we have raised
our FY11-12 net earnings forecast
to reflect higher contribution from
subsidiaries by 1-2%. Accordingly,
our indicative fair value has been
raised to RM4.64 from RM4.59, which
is based on 10x FY11 EPS.

www.rhbinvest.com
Petronas Gas Market Perform Underperform 7 Apr 2010 We have revised up our FY11-12
earnings estimates by 12.4% and
12.3% respectively after factoring in
higher revenue contributions from the
new Capacity Reservation Charge
arising from the new gas distribution
assumptions. Accordingly, our
indicative fair value has been raised
to RM10.51 from RM9.72.
Puncak Niaga Underperform Market Perform 25 Mar 2010 Indicative fair value lowered by
13.6% from RM2.95 to RM2.55, at
30% discount to its revised DCF-
derived NPV of RM3.65 (based on
higher WACC of 11.5% vis-à-vis
10.9% previously to reflect its higher
beta).
Quill Capita Market Perform Outperform 30 Apr 2010 Downgraded our rating on the stock
as 10.5% potential upside of the
company is now in line with market
return of about 5% after the recent
increase in share price.
Sime Darby Outperform Outperform 29 Apr 2010 Post-company visit, we reduce our
core net profit forecasts for Sime by
2.8-6.4% p.a. for FY10-12, after: (1)
reducing our FFB yield and production
estimates for FY10-12; (2) adjusting
our new planting assumptions for
FY10-12 based on management
guidance; (3) raising our sales
projections for the property
development division for FY10-12;
and (4) raising our capex
assumptions for FY10-12. Post-
earnings revision and adjustment of
some of the target PE valuations for
Sime’s other divisions, we reduce our
SOP-based fair value for Sime to
RM9.70 (from RM9.85). We have
raised our target PEs for the motor
sector to 14x CY10 (from 12x
previously), the energy & utilities
sector to 16x CY10 (from 15x), the
heavy equipment sector to 14x CY10
(from 13.5x) and the property sector
to 14x CY10 (from 13.5x), to be in
line with the recent upgrades in these
sectors’ target valuations.

www.rhbinvest.com
Sino Hua-An Outperform Outperform 9 Apr 2010 FY12/10-11 net profit forecasts cut
by 21.0-98.2% to reflect narrower
price gap between metallurgical coal
and coke. Correspondingly, indicative
fair value was lowered by 16.9% to
RM0.59 based on 12x revised FY12/
10 EPS of 4.9 sen.
SP Setia Market Perform Outperform 19 Mar 2010 Maintain our FY10-11 earnings
forecasts for now. However, we
removed Setia View project from our
RNAV calculation after the termination
of the JV project recently. As a
result, our RNAV was reduced from
RM4.83 to RM4.66. Downgraded the
stock to Market Perform.
Ta Ann Outperform Outperform 31 Mar 2010 We increased our earnings forecasts

by 0.3-18% p.a. for FY10-12 after
assumptions. Our SOP-based fair
increased 14x (from 12x) FY10
plantation division earnings.
Tan Chong Outperform Outperform 12 Apr 2010 We have increased our FY10-12 net
profit forecasts by 11-36% after
factoring in higher volume loading
ahead as well as regional expansion.
Accordingly, our indicative fair value
has been raised to RM5.26/share
(from RM3.60 previously), which is
now based on 14x FY10 PER (vs.
12x previously).
Tanjong Outperform Outperform 25 Mar 2010 We have updated our forecasts for
the full-year results, although the
changes are not too significant. We
have also raised our FY11-12 gross
DPS projections to RM1.02-1.04 from
RM0.94-0.96, which imply a payout
ratio of around 44.5%.

www.rhbinvest.com
Tanjong Market Perform Outperform 13 Apr 2010 Our SOP-derived fair value of
RM19.20 is unchanged. Tanjong’s
strong share price performance
means that the gap to our SOP
valuation has narrowed significantly
and the stock’s total potential return
is now roughly in line with our
expected market return.
Consequently, we have downgraded
our recommendation to Market
Perform from Outperform. In our
view, Tanjong stands a strong chance
in securing some of the new power
projects, which we believe would be
value accretive. Our SOP valuation
does not reflect such additions and
hence, we see upside potential to
our fair value if Tanjong is successful
with its bids.
TM Market Perform Market Perform 26 Mar 2010 With the release of pricing details,
we now incorporate the revenue
stream from HSBB into our model.
All-in, we have raised our FY10-12
revenue and net profit projections
by 0.5-2% and 2-7.5% respectively.
TNB Outperform Outperform 19 Apr 2010 We have raised our FY10 electricity
demand growth assumption to +5.5%
(+3.8% previously) while for FY11 and
FY12, we have assumed annual
electricity demand growth of +5%
(from +4.5%). Overall, we have
raised our FY10-12 revenue and net
profit projections by 2.5-3.5% and
3.8-5.5% respectively. Following the
earnings revision above, we have
raised our indicative fair value to
RM9.90 from RM9.50, based on
unchanged target CY10 PER of 14x.

www.rhbinvest.com
TNB Outperform Outperform 21 Apr 2010 We have raised our FY10 electricity
demand growth assumption to +7%
(+5.5% previously) but keep our
FY11-12 assumptions of +5% p.a.
unchanged. In addition, we have also
raised our FY10-12 coal cost
assumptions to US$90/tonne flat
from US$88, but this is partly
mitigated by a downward revision in
our FY10-12 RM/US$ exchange rate
assumptions to RM3.40-3.20/US$
from RM3.50-3.30/US$. Overall, we
have raised our FY10-12 net profit
projections by 4.9-5.3% p.a..
Following the earnings revision
above, we have raised our indicative
fair value to RM10.40 from RM9.90,
based on unchanged target CY10 PER
of 14x.
Top Glove Outperform Outperform 16 Mar 2010 We have revised up our FY10-12
EBITDA margin projections by 1.3-
2.0%-pts to 17.8-19.9% (from 16.5-
17.9% respectively) and accordingly,
have raised our FY10-12 net profit
projections by 9.6-13.3%. As a result,
our fair value has been raised to
RM15.50 (from RM13.80) based on
unchanged target CY10 PER of 17x.
Unisem Outperform Outperform 31 Mar 2010 We have raised FY10-12 earnings

projections by 10.2%, 8.3% and
12.7% p.a. respectively to reflect
stronger-than expected chips
demand as well as higher utilisation
for its Chendu plant. Management
had guided FY10 capex of around
RM199m (vs. RM 134m in FY09) with
75% of the capex to be spent in
Chendu’s capacity expansion.
Accordingly, we have raised our fair
value to RM3.39/share (from RM3.07
previously).

www.rhbinvest.com
Unisem Outperform Outperform 14 Apr 2010 Given the stronger-than-expected

medium-term chips demand, we have
tweaked upwards our FY10-12
earnings projections by 10.2%, 0.5%,
and 0.12% respectively arising from
strong chips demand from emerging
markets and resilient demand for
wireless and networking chips.
Accordingly, we have raised our fair
value to RM3.74/share from RM3.39/
share, which is based on unchanged
15x FY10 PER.
UMW Outperform Market Perform 12 Apr 2010 We have revised up our earnings
forecasts by 2.8% for FY10 and 2.2%
for FY11 and FY12 to reflect our
anticipation of higher demand for
premium cars as well as margin
expansion arising from
strengthening of the RM against US$
and JPY. Accordingly, we have
increased our fair value for UMW to
RM7.52 (previously RM6.71) based
on 16X PER (vs. 14x previously) for
its automotive and oil & gas divisions,
8x (vs. 7x previously) for its heavy
equipment and 7x (previously 6x)
for its manufacturing division.
VS Industry Market Perform Outperform 31 Mar 2010 We have revised our FY10-12
revenue projections downwards by
1.4-9.5% following the weaker-than-
expected numbers. At the same
time, we have lowered our FY10-12
EBIT margin assumptions by 0.2-
0.8%-pts to reflect the margins
achieved by VSI thus far. As a result,
our FY10-12 earnings projections
have been lowered by 3.4-23.4%
respectively. Our indicative fair value
has been lowered to RM1.33 (from
RM1.59) based on unchanged target
CY10 PER of 7.5x. Recommendation
downgraded to Market Perform from
Outperform.

www.rhbinvest.com
YTL Cement Outperform Underperform 29 Mar 2010 1-year forward target PER raised from
9x to 11x on the back of the
improved demand outlook on the
cement sub-sector that will in turn
boost investors’ risk appetite in the
near term. Correspondingly,
21.9% to RM5.07 based on revised
11x CY2010 EPS of 46.1 sen.
YTL Cement Outperform Outperform 27 Apr 2010 FY06/10-11 net profit forecasts raised
by 7-19% to reflect higher selling
prices that more than offset higher
energy costs. Correspondingly,
8.7% to RM5.51 based on 11x
CY2010 EPS of 50.1 sen.
WTKH Outperform Market Perform 31 Mar 2010 We increased our earnings forecasts
by 0.8-31% p.a. for FY10-12 after
assumptions. Our fair value is
increased to RM1.55 (from RM1.18)
based on unchanged 14x FY10
timber division earnings and 12x
FY10. We have upgraded our
recommendation to Outperform
(from Market Perform)

www.rhbinvest.com
Taking Stock
Position For More Volatility Ahead
 More volatile market ahead. We expect the market volatility to continue due to changing external factors
including rising interest rates, fluctuating exchange rates, rising commodity prices, and balanced against the
global economic recovery. Athough the benchmark FBM KLCI is still positive (+4.7%) YTD, we note that most
of the top 30 stocks (including banks, plantation, power and telecom) have been relatively lacklustre over
the last two months, as investors focused on the smaller caps.
Table 1
FBM KLCI Stocks – YTD Performance
Company Price (RM)* Index Weight (%)# YTD Rel. Perf. Vs. FBM KLCI
CIMB Group 14.16 12.2 5.6
Public Bank 12.00 10.3 2.7
Maybank 7.45 9.6 4.2
Sime Darby 8.76 9.6 (6.9)
Tenaga Nasional 8.48 6.7 (3.5)
IOI Corp 5.43 6.6 (5.4)
Axiata Group 3.77 5.8 17.8
Genting 6.60 4.5 (13.3)
MISC 8.94 2.9 5.0
Maxis 5.31 2.9 (5.7)
AMMB Holdings 4.96 2.7 (5.4)
PPB Group 17.78 2.6 9.4
Telekom Malaysia 3.45 2.3 8.4
Kuala Lumpur Kepong 16.66 2.2 (4.0)
Genting Malaysia 2.82 2.0 (3.3)
YTL Corp 7.40 1.7 (3.4)
Digi.Com 22.20 1.7 (3.4)
PLUS Expressways 3.39 1.7 (0.6)
BAT 43.02 1.5 (4.1)
Petronas Gas 9.95 1.4 (3.9)
Hong Leong Bank 8.71 1.3 1.5
UMW Holdings 6.38 1.3 (4.4)
YTL Power International 2.19 1.1 (6.4)
Berjaya Sports Toto 4.48 1.1 (1.8)
Tanjong Plc 17.46 0.9 (0.3)
Astro All Asia Networks PLC 4.24 0.8 35.0
MMC Corp 2.46 0.7 (4.3)
Petronas Dagangan 8.91 0.6 (2.2)
RHB Capital 6.10 0.6 10.6
Nestle 35.04 0.6 1.37
* Based on 28 Apr # RHBRI estimates Source: Bloomberg, RHBRI
 Valuations related to size ... Some of this can be attributed to relative valuations. The heavyweights (i.e.
the FBM KLCI stocks under RHBRI coverage) are on average trading at 2010-2011 PERs of 17.9x and 15.4x.
This compares with the mid caps (i.e. the non-FBM KLCI stocks under RHBRI coverage with market cap above
RM700m) which are trading at 12.8x and 11.1x respectively, and the small caps (with market cap below
RM700m) at 8.8x and 7.0x respectively (see Table 1).

www.rhbinvest.com
Table 2
EPS Growth And Valuations
EPS Growth (%) PER (x)

2010 2011 2010 2011
RHBRI universe of stocks 18.1 15.0 15.2 13.2
FBM KLCI stocks = Heavyweights 14.3 14.8 17.9 15.4
Non FBM KLCI stocks:
Mid caps = Mkt cap >RM700m 28.3 14.8 12.8 11.1
Small caps = Mkt cap <RM700m 22.5 25.3 8.8 7.0
Note: Average estimates are weighted by market cap2010 and 2011 average PER are based on latest share prices
calculated against 2010 and 2011 earnings
Source: RHBRI estimates
 … suggest that the market has normalised. For 2010, the market has thus imputed a 29% discount in
terms of valuations between the mid and big caps, and a 31% discount for small vs. mid caps. Historical data
for 2006-2009 (see Table 3) indicate that average discounts between each category can fluctuate depending
on the “flavour” of the market. Latest valuation data suggests the broader market is still moving in tandem
although the gap between the mid and small caps appears to have widened. We believe this may due to
investors’ concerns on individual stock liquidity.
Table 3
Historical Valuations
2006 2007 2008 2009 2010 2011

Simple average forward PER (x):
FBM KLCI stocks = Heavyweights 13.4 13.3 16.6 14.2 17.9 15.4
Non FBM KLCI stocks:
Mid caps = Mkt cap >RM700m 9.6 12.0 14.6 9.5 12.8 11.1
Small caps = Mkt cap <RM700m 7.6 8.8 11.3 6.9 8.8 7.0
% Discounts between:
Mid caps and FBM KLCI big caps -28 -10 -12 -33 -29 -28
Small caps and Mid caps -20 -27 -23 -27 -31 -37
2010 and 2011 average PER are based on latest share prices calculated against 2010 and 2011 earnings
Source: RHBRI estimates
Double Whammy – The May Effect Followed By World Cup In June/July
 Looking ahead to the May effect ... We caution that May has tended to be volatile with the FBM EMAS
and FBM KLCI showing a decline in terms of end-May prices vs. end-Apr in six out of the last ten years (see
Table 4). The only years with positive May performance for the two indices were in 2009 (anticipation of
economic recovery), 2007 (bullish sentiment despite plunge in Shanghai bourse in Feb), 2003 (recovery from
SARS outbreak) and 2001 (recovery after the dotcom bust).
Table 4
May Performance (%)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
FBM KLCI 1.46 (1.99) (6.58) 6.52 (3.29) (2.07) (2.26) 1.86 (0.29) 5.39
FBM EMAS 0.10 (1.31) (6.71) 7.20 (4.50) (3.93) (2.86) 1.87 (1.15) 6.76
Source: Bloomberg
 … in addition to the World Cup effect. We also see potential volatility in the equity market during the
2010 FIFA World Cup in South Africa from the first match on 11 Jun (10pm Malaysia time) to the final on
11 Jul (or 2.30am on 12 Jul in Malaysia). Price charts for the last five World Cup years indicate the FBM EMAS
and FBM KLCI generally having a downswing in the early part of each event. However, we also note that
in 1990, 1994 and 2006, the market volatility during the World Cup was followed almost immediately by a
big upswing in the FBM KLCI (see Charts 1-5).

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Chart 1 Chart 2
FBM KLCI 8 Jun – 8 Jul 1990 (Italy) FBM KLCI 17 Jun – 17 Jul 1994 (US)
Source: Bloomberg Source: Bloomberg
Chart 3 Chart 4
FBM KLCI 10 Jun – 12 Jul 1998 (France) FBM KLCI 31 May – 30 Jun 2002 (S. Korea/
Japan)
Chart 5 Chart 6
FBM KLCI 9 Jun – 9 Jul 2006 (Germany) FBM KLCI 11 Jun – 11 Jul 2010 (S. Africa)

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Taking Stock
 Focus on liquid stocks with value, trading stocks may suffer. We believe there is nothing
fundamentally wrong with the market, although 2010 valuations may not appear cheap relative to the post-
crisis mean of 15x. Therefore, even though 65% of the stocks under our coverage have underperformed the
FBM KLCI over the last month, we continue to advocate our top picks of liquid and fundamentally-robust
stocks over a 12-month view, i.e. stocks which should be able to ride out the near-term volatility. However,
during this volatile period, trading stocks that have outperformed the market (on M&A themes and GLC links)
may experience further profit taking.
Table 5
Star Performers
Rel. YTD Abs. 1 Abs. 5
Price (RM/s) Market Cap Change month Chg month
Company 28-Apr FV (RM/s) (RMm) (%)* (%) Change (%) Recom
Unisem 3.34 3.74 1,742 98.9 21.5 0.9 OP

MCIL 0.83 1.09 1,381 49.5 5.8 1.2 OP
Tan Chong 4.66 5.26 3,118 44.6 24.9 1.5 OP
Kossan 7.83 10.74 1,257 39.5 (3.1) (1.3) OP
Daibochi 3.28 4.40 247 37.9 (11.8) 0.3 OP
Faber 2.24 3.30 817 34.4 (7.8) (3.0) OP
Media Prima 2.25 2.55 2,209 30.0 6.6 - OP
* Relative performance vs. FBM KLCI

Source: Bloomberg, RHBRI estimates
 Stars and laggards. We note that some star performers including Daibochi, Faber and Kossan have already
seen some correction in the last five days if not the last month, while others such as Unisem, Tan Chong
and Media Prima have continued to outperform. Nevertheless, we remain bullish on these stocks as their
strong earnings growth through FY11 should sustain share price performance through the volatility. At the
other end of the spectrum, we also highlight YTD performance laggards like Genting Bhd, IOI, KLK, TNB, IJM
Land and Maxis, which we have rated as Outperform stocks. We believe these laggards deserve more
attention, given their resilient earnings and better stock liquidity.
Table 6
Laggards
Rel. YTD Abs. 1 Abs. 5
Price (RM/s) Market Cap Chg month Chg month
Company 28-Apr FV (RM/s) (RMm) (%)* (%) Chg (%) Recom
Gent Spore 0.87 1.35 11,379 (38.2) (6.0) 0.6 OP

Sino Hua-An 0.44 0.59 499 (15.9) (11.1) (4.3) OP
Genting 6.60 8.95 24,714 (14.8) (1.8) (1.0) OP
CBIP 2.67 3.60 366 (13.3) (8.9) (2.2) OP
Sime Darby 8.76 9.85 52,643 (7.1) 0.7 (1.6) OP
RCE Capital 0.66 1.08 516 (6.2) (3.7) (2.2) OP
IJM Land 2.32 3.19 2,549 (6.0) (0.4) (0.9) OP
Maxis 5.31 6.20 39,825 (5.9) (1.5) (0.2) OP
AMMB 4.96 6.13 14,920 (5.5) (0.4) (0.4) OP
IOI Corp 5.43 6.65 36,248 (5.5) 0.6 (0.9) OP
UMW 6.38 7.52 7,194 (4.3) 1.1 (1.1) OP
Te n a g a 8.48 10.40 36,920 (3.8) 5.7 1.2 OP
KL Kepong 16.66 18.40 17,742 (3.8) 1.3 (1.3) OP
* Relative performance vs. FBM KLCI

Source: Bloomberg, RHBRI estimates

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 Longer-term outlook still positive, caution on near-term volatility. While the early-stage recovery
in global economies has to some extent already been priced in to the market, we see price weakness as
an opportunity to accumulate the big banks, commodities (plantations and O&G) and power (TNB) stocks as
well as consumer-related stocks like Tan Chong, IJM Land and Notion Vtec. We also advocate a balanced
portfolio to include Alpha+ stocks such as Maxis, PLUS and Carlsberg that have resilient earnings as well as
attractive dividend yields.
Table 7
Forecasts And Valuations
FYE Price FV Rel EPS PER PBV PCF GDY

(RM/s) (RM/s) perf vs. EPS Growth (x) (x) (x) (%) Rec
28-Apr KLCI (sen) (%)
YTD FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY10 FY10
Stars Performers
Unisem Dec 3.34 3.74 98.9 24.9 3 4 . 1 +>100 36.9 13.4 9.8 2.0 5.7 1.5 OP
MCIL^ Mar 0.83 1.09 49.5 8.8 8.4 19.4 (4.1) 9.4 9.8 1.1 7.4 5.5 OP
Tan Chong Dec 4.66 5.26 44.6 39.0 45.3 72.0 16.2 12.0 10.3 1.9 10.1 2.4 OP
Kossan Dec 7.83 10.74 39.5 82.6 103.0 10.3 24.7 9.5 7.6 2.6 8.3 1.3 OP
Daibochi Dec 3.28 4.40 37.9 36.7 39.9 22.4 8.8 8.9 8.2 1.8 7.6 7.2 OP
Faber Dec 2.24 3.30 34.4 26.5 24.2 16.4 (8.8) 8.4 9.3 1.7 5.3 3.1 OP
Media Prima Dec 2.25 2.55 30.0 16.3 1 8 . 0 +>100 10.1 13.8 12.5 2.2 7.0 4.4 OP
Laggards
Gent Spore Dec 0.87 1.35 (38.2) 2.7 3.8 +>100 37.9 31.7 23.0 2.3 8.4 0.0 OP
Sino Hua-An Dec 0.44 0.59 (15.9) 4.9 4.8 +>100 (2.4) 9.0 9.2 0.6 n.m 0.0 OP
Genting Dec 6.60 8.95 (14.8) 45.8 56.1 38.9 22.5 14.4 11.8 1.5 5.8 1.4 OP
Sime Darby Jun 8.76 9.70 (7.1) 39.6 48.3 5.4 22.2 22.1 18.1 2.3 15.6 2.5 OP
RCE Capital^ Mar 0.66 1.15 (6.2) 10.6 11.3 5.9 6.1 6.2 5.8 1.1 n.m 1.5 OP
IJM Land^ Mar 2.32 3.19 (6.0) 18.4 34.4 88.5 87.2 12.6 6.7 1.4 4.7 0.9 OP
Maxis Dec 5.31 6.20 (5.9) 33.2 36.2 6.6 9.1 16.0 14.7 3.9 10.3 6.3 OP
AMMB^ Mar 4.96 6.13 (5.5) 39.9 45.7 19.0 14.6 12.4 10.9 1.6 n.a. 2.0 OP
IOI Corp Jun 5.43 6.65 (5.5) 27.9 31.5 (13.0) 13.0 19.5 17.2 3.7 17.1 2.2 OP
UMW Dec 6.38 7.52 (4.3) 52.6 53.8 56.4 2.3 12.1 11.9 2.0 8.5 3.7 OP
Tenaga Aug 8.48 10.40 (3.8) 70.7 80.9 42.0 14.4 12.0 10.5 1.3 4.6 3.3 OP
KL Kepong Sep 16.66 18.40 (3.8) 87.5 123.3 23.7 40.8 19.0 13.5 2.9 15.3 2.7 OP
Alpha+Picks
PLUS Dec 3.39 4.13 (0.8) 23.6 36.3 (0.3) 53.5 14.3 9.3 2.8 8.7 5.3 OP
Carlsberg Dec 5.32 5.90 12.4 42.1 44.3 68.1 5.3 12.7 12.0 3.0 24.2 4.7 OP
Notion Vtec Sep 3.22 4.64 13.6 36.2 46.4 41.1 28.4 8.9 6.9 2.4 6.4 2.0 OP
Wah Seong Dec 2.52 3.09 5.1 19.3 20.8 46.1 8.0 13.1 12.1 2.5 4.7 3.0 OP
Dialog Jun 1.10 1.29 12.2 6.4 9.3 (3.4) 45.4 17.3 11.9 4.3 15.0 3.2 OP
^ FY10-11 valuations refer to those of FY11-FY12 #

Consensus estimates Source: RHBRI, Bloomberg

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Manufacturing Sector
A Look At Malaysia’s Furniture Industry
 Exports of Malaysian furniture have achieved a CAGR of 19.2% (from 1998-2009). Over the
years, exports of furniture products have contributed significantly to Malaysia’s total exports. In 2009,
exports of Malaysian furniture products were valued at RM7.8bn or 1.8% of total exports in Malaysia, at the
same time achieving a commendable CAGR of 19.2% (from 1998-2009). According to Malaysian Industrial
Development Authority (“MIDA”), Malaysia exports to more than 160 countries with the main export des-
tinations being the US, Japan and Australia. Currently, Malaysia ranks as the tenth largest exporter of
furniture in the world and second in Asia after China.
 ...but as a global furniture player, Malaysia’s market share is still very small. According to an
independent market research report by Frost and Sullivan, the market size for global furniture was approxi-
mately US$302bn (approximately RM970bn) in 2008. This would mean that Malaysia held approximately 1%
of the global furniture industry market share in 2008 (based on the export furniture value for Malaysia worth
RM9bn in 2008).
 Jaycorp. Jaycorp is an integrated furniture manufacturer that is involved in: 1) upstream activities, which
include sourcing of rubberwood, pressure treatment and kiln drying; 2) downstream activities, i.e. furniture
manufacturing (mainly dining sets); and 3) packaging of materials. For the 1HFY07/10, approximately 88.2%
of its sales product mix was from furniture manufacturing. Jaycorp exported more than 75% of its 1HFY10
revenue overseas, where the key markets are the US, Europe and Australia.
 Latitude Tree. Latitude has carved out a strong niche in the household furniture segment, specifically dining
and bedroom sets and today the group has since made great advances to position itself as one of the largest
rubberwood furniture manufacturers and exporters in Malaysia and Vietnam.
 Risks to our view. The risks include: 1) fluctuations in raw material prices; and 2) weaker US against RM.
 Investment case. We value both Jaycorp and Latitude based on 7x FY10 EPS, which is at 40% discount
to our manufacturing sector PER of 12x FY10. This suggests a fair value of RM1.10 for Jaycorp and RM3.85
for Latitude respectively.
Table 1
Valuations of Jaycorp and Latitude
FYE Price FV EPS EPS growth PER P/NTA P/CF NDY Rec
(sen) (%) (x) (x) (x) (%)
(RM/s) (RM/s) FY08 FY09 FY08 FY09 FY08 FY09 FY09 FY09 FY09
Jaycorp Jul 0.84 1.20 3.1 9.5 (65.6) 194.2 26.8 8.9 1.0 4.7 8.9 NR
Latitude Jun 2.19 3.85 16.7 21.6 5.3 29.6 13.1 10.1 0.8 2.8 4.6 NR
Sector Avg (30.2) 111.9 20.0 9.5
Table 2
Relative Performance To FBM KLCI
Latitude
Jaycorp
FBM KLCI

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 Exports of Malaysian furniture achieved a CAGR of 19.2% (from 1998-2009). Over the years,
exports of furniture products have contributed significantly to Malaysia’s total exports. In 2009, exports of
Malaysian furniture products were valued at RM7.8bn or 1.8% of total exports in Malaysia, at the same time
achieving a commendable CAGR of 19.2% (from 1998-2009). According to MIDA, Malaysia exports to more
than 160 countries with the main export destinations being the US, Japan and Australia. Currently, Malaysia
ranks as the tenth largest exporter of furniture in the world and second in Asia after China.
Chart 1
Gross Exports Of Malaysian Furniture (from 1988-2009)
RM m
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: Department of Statistics, RHBRI
 Industry overview. Malaysian furniture exports are broken down by types of products which include office
furniture, kitchen furniture, upholstered furniture, non-upholstered seats, bedroom furniture, seats parts and
parts of furniture, of which 80% are made from wood-based products, while the remaining are made mostly
from rattan, metal, fabrics, plastic, glass marble and other composite materials. Exports of major timber
products have shown that wooden furniture constitutes 62.1% of total exports for the period Jan-Feb ’09
(source: Malaysia Timber Council, MTC). Currently, Malaysia has about 1,800 furniture players, which are
mainly located in Peninsular Malaysia, especially in Johor (Muar and Kluang), Selangor (Klang and Sungai
Buloh) and Melaka (Bukit Rambai) (source: MIDA). Barriers to entry are relatively low in the furniture
industry. However, furniture manufacturers need to be able to maintain their position in the market given that
the manufacturing start-up costs are high, have effective designs that are accepted in key markets as well
as have an efficient supply chain. Most Malaysian furniture manufacturers place greater emphasis on the
finishing, design and production of higher quality products either by producing it under Original Equipment
Manufacturer (“OEM”) or Own Brand Manufacturer (“OBM”). Malaysia’s forests, with over 80 species of wood,
provide abundant resources for the country’s large furniture manufacturing and furniture export industry.
 Malaysia as a global furniture player is still very small. According to an independent market research
report by Frost and Sullivan, the market size for global furniture was approximately US$302bn
(approximately RM970bn) in 2008. This would mean that Malaysia held approximately 1% of the global
furniture industry market share in 2008 (based on the export furniture value for Malaysia worth RM9bn in
2008). This shows that Malaysian furniture companies have a long way to go to capture a significant global
market share for furniture worldwide. They can do this by leveraging on their competitive advantages such
as: 1) the availability of rubber wood and timber; 2) experienced management; and 3) a diversified and well-
established client base.
Jaycorp
 Background. Jaycorp, formerly known as Yeo Aik Resources, was first listed in Bursa Malaysia in 2002, and
is principally involved in the furniture business. Today, Jaycorp, is an integrated furniture manufacturer that
is involved in: 1) upstream activities, which include sourcing of rubberwood, pressure treatment and kiln
drying; 2) downstream activities, i.e. furniture manufacturing; and 3) packaging of materials. For the 1HFY07/
10, approximately 88.2% of its sales product mix was from furniture manufacturing. Jaycorp derived more
than 75% of its 1HFY10 revenue from overseas, where the key markets are the US, Europe and Australia.
Jaycorp’s furniture products are sold to more than 120 customers, where the top ten customers combined
accounted for 37% of furniture’s revenue in FY07/09. Some of Jaycorp’s big retail customers include Target,
WalMart, Kmart, Dixie Furniture Company and many more.

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Chart 2
Jaycorp’s Corporate Structure
Jaycorp Berhad
Digital Yeo Aik Hevea Jaycorp

Yeo Aik Wood PT Tiga Pine Packaging Jaycorp
F urniture (M) Jaycorp Trading Home
Sdn Bhd Mutiara Nusantara (M) Limited
Sdn Bhd Sdn Bhd Sdn Bhd (100%) F urnishing
(100%) (51%) Sdn Bhd (100%) (70%)
(60%) (100%) Inv (100%)
Winshine
Holdings Sdn
Bhd (100%)
Wineshine
Industries Sdn
Bhd (100%)
Conversion of General Trading, Trading in

Manufacturing and sales of rubberwood Pressure t reat ment and kiln-drying corrugated Transport at ion Trading home
furnitures of rubberwood board into and property business furnishing
cart on boxes letting products
Source: Company, RHBRI
Chart 3 Chart 4
Jaycorp’s Sales Product Mix For 1HFY10 Breakdown of Jaycorp’s Production Cost
K il n D y in g O v e rh ea d
3% 6%
O t h e rs
C a rt o n B o xe s 0% L ab o u r
8% 19 %
R aw m a t e ria l
75 %
F u r n it u r e
89%
Source: Company, RHBRI Source: Company, RHBRI
 Products. In terms of its furniture segment, Jaycorp is primarily focused on producing dining sets but the
company also manufactures other furnitures such as coffee tables and made-to-order furniture as well as
parts for bedroom sets. In Mar 2010, the company introduced a new furniture range, which consists of full
bedroom sets. Currently the company operates 11 finishing lines (including two new lines for bedroom sets),
5 woodworking lines and 36 kilns. Average capacity utilisation rate for the company is approximately 80-90%
(excluding the two new lines for the bedroom sets).
Chart 5
Revenue And EBIT Margin Trend (from FY05-09)
R e v e n u e ( R M m ) %
3 0 0 9 .0
8 .0
2 5 0
7 .0
2 0 0 6 .0
5 .0
15 0
4 .0
10 0 3 .0
2 .0
5 0
1. 0
0 0 .0
F Y 0 5 F Y 0 6 F Y 0 7 F Y 0 8 F Y 0 9
R e v e n u e E B IT m a r g in
 Improvement in margins for FY09. Despite a drop in revenue of 11.0% yoy in FY09, as a result of the
slowdown in the global economy, Jaycorp posted FY09 net profit of RM12.3m from RM4.2m in FY08. This was
largely due to an improvement in margin, where FY09 EBIT margin grew 4.9%-pts yoy. We believe the growth
in margins was due to: 1) the reduction of sales to mega retailers (e.g. Wal-Mart and Target), where the
margins are lower as compared to other smaller retailers; 2) overall cost control, where the company
managed to streamline its operations; 3) increase in sales of higher margin products; and 4) stronger US$
against RM.

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 Stronger financial position. Over the years, Jaycorp has managed to strengthen its financial position from
a net debt position of RM11.6m in FY06 to a net cash position of RM30.4m in 1HFY10. This translates to a
net cash of RM0.22 sen/share as at 1HFY10 (from RM0.15/share as at FY09), which reflects the strong
operating cash flows, thanks to better working capital management. We note that the stable financial position
has allowed the company to maintain a good dividend payout ratio of 32-93% from FY06-FY09. In the last
two financial years, the company has been paying out dividends based on a net payout ratio of 81-93%,
which translates to net yields of 3.4% in FY08 and 8.6% in FY09 respectively.
 Prospects
o Introducing bedroom furniture range. Jaycorp recently introduced bedroom sets in their furniture range
to fully leverage on the strengths of Digital Furniture Sdn Bhd (60%-owned), which they acquired in 2006.
Currently, the company is the key producer of parts and components of bedroom sets for Muar-based
furniture players. Management mentioned that product samples have already been sent to customers (new
and existing customers). Given that this is still in the early stages, sales of the bedroom sets are not expected
to contribute significantly.
o Expansion in new markets. Currently, more than 75% of Jaycorp’s revenue is derived from overseas
mainly from US, Europe and Australia. The company is keen to explore partnership with People’s Republic
of China (“PRC”) players for sale of solid rubberwood furniture to PRC market to take advantage of its ability
to secure rubberwood at competitive prices and from diversified sources. Currently, the contribution from
PRC is relatively small as compared to US, Europe and Australia. Management also plans to target smaller
retailers in countries like Russia, Middle East, India and South Africa by introducing a mix container
programme, where customers can place an order for various furnitures into one container as opposed to just
dining chairs in one container previously. By implementing various options of selecting different types of
furniture for customers, Jaycorp would be able to command better margins and offer more value added
services to its customers.
Risk
 Risks to our view. The risks include: 1) fluctuations in raw material prices; and 2) weaker US against RM.
Forecasts
 Strong earnings growth, attractive dividend yield of 12.4% p.a.. In 1HFY10, Jaycorp posted a strong
surge of profit of 117.2% despite a 15.7% yoy drop in its 1HFY10 revenue. Operating margin once again
grew 6.1%-pts yoy, which management attributed to the continuous efforts in managing its cost and reducing
the reliance on mega retailers. We expect 2HFY10 sales and margins to be slightly affected by the stronger
RM, given that RM has strengthened by approximately 6% against US$ YTD. Nevertheless, our annualised
estimate for FY10 net profit-ex EI of approximately RM20m indicates an increase of 57.7% yoy, backed by
the continuous efforts in the company’s ongoing cost control and increase in sales of higher margin products.
Assuming Jaycorp maintains its dividend payout ratio at 80%, this would translate to net DPS of 10.4sen,
or net yield of 12.4%.
Valuations and Recommendations
 Investment case. Jaycorp is currently trading at 8.9x and 6.6x for FY07/09 and FY07/10 (based on
annualised estimated) earnings respectively, which is relatively low as compared to its 5-year average PE
of 10.5x. As seen in Table 2, we compare Jaycorp to companies that have similar business divisions and
produce goods related to Jaycorp’s portfolio of products. By applying a 40% discount to the CY10
manufacturing sector PE of 12x, we value Jaycorp at 7x FY10 EPS due to its smaller market cap vs. the
manufacturing stocks in our universe. This suggests a fair value of RM0.89. Although this may not yield much
upside from the current share price, we believe Jaycorp should be valued on an ex-cash basis, given that
the company pays out the bulk of its earnings in the form of dividends to shareholders. On an ex-cash basis,
Jaycorp is only trading at FY07/10 PER of 4.8x. Adding the cash back would give an estimated fair value of
approximately RM1.10.

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Latitude Tree Holdings
 Background. From its humble beginnings as a manufacturer of chairs for dining sets in 1988, Latitude has
carved out a strong niche in the household furniture segment, specifically dining and bedroom sets. Today,
the group has made great advances to position itself as one of the largest rubber-wood furniture
manufacturers and exporters in Malaysia and Vietnam, where the company derived 100% of its revenue from
overseas and 90% of it are from the US. Latitude’s big customers are mainly retail giants like JC Penny,
Ashley Furniture, RiversEdge Furniture, Broyhill Furniture and Embassy International. The company operates
from two factories in Malaysia, three factories in Vietnam and a factory in Thailand with total floor areas of
approximately 8.2m sq. ft. and total current workforce of about 7,830 workers.
 73.4% of Latitude’s revenue was derived from Vietnam. Since 2002, the company has set up
manufacturing operations in Vietnam, where labour is reasonably priced and plentiful. In addition, due to its
early entrance into Vietnam, Latitude enjoys lower capital costs and tax incentives. For 1HFY10,
approximately 73.4% of Latitude’s revenue was derived from Vietnam and as a result, the company has
emerged to be the largest exporter of wooden furniture since 2006.
Chart 6
Latitude’s Corporate Structure
Latitude Tree
Holdings Berhad
Uptown
Latitude Tree Rhong Khen Grob Holz
Latitude Tree Promenade
International Group Timbers Sdn Sdn Bhd
Sdn Bhd (100%) Sdn Bhd
Ltd. (100%) Bhd (100%) (100%)
(100%)
Latitude Tree Win Yuan Bio Grob Holz

Vietnam Joint Stock Tech Co., Co., Ltd.
Company (100%) Ltd (35%) (51%)
Rhong Khen
Resources Co., Ltd
(100%)
Chart 7 Chart 8
Latitude’s Revenue Breakdown By Breakdown of Latitude’s Production Cost
Geographical Segments For 1HFY10
T h a ila n d
L a b o u r (8 -12 %)
2%
M a la ys ia
24%
O v e rh e a d s (15 -
2 5 %)
W o o d (4 0 -6 0 %)
V ie t n a m
74%
Source: Company, RHBRI Source: Company, RHBRI
Chart 9
Revenue and EBIT Margin Trend (from FY05-09)
R e v e n u e ( R M m ) %
4 5 0 8 .0
4 0 0 7 .0
3 5 0
6 .0
3 0 0
5 .0
2 5 0
4 .0
2 0 0
3 .0
15 0
2 .0
10 0
5 0 1.0
0 0 .0
F Y 0 5 F Y 0 6 F Y 0 7 F Y 0 8 F Y 0 9
R e v e n u e E B IT m a r g in

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 Prospects.
o Capex expansion. Currently, Latitude’s plant in Vietnam is operating at full capacity at US$9m
(approximately RM28.8m) sales per month, and the company hopes to increase capacity by another US$2m
to US$11m per month by July 2010. This would mean that the company will be adding one more line to its
Vietnam plant at a cost of US$5m to bring the number of lines to five. With its strong operating cash flow
and relatively low gearing of 0.2x (as at 30 Dec 2009), we believe the company would be able to finance
the manufacturing expansion with internally-generated funds.
o Expansion in new markets and product range. Currently, 90% of its products are exported to US. The
company is keen to expand its presence in developing countries like China and Vietnam, given the high
population of those two countries. Latitude is also keen to expand its current product range, which would
include entertainment furniture, baby’s bedroom furniture and many more.
Risk
 Risks to our view. The risks include: 1) fluctuations in raw material prices; and 2) weaker US$ against RM.
Forecast
 A decent “dividend yield stock” of 5.5% p.a.. For the 1HFY06/10, Latitude recorded a growth in revenue
of 18.1% yoy as a result of an increase in production of 20%. As for its earnings, 1HFY10 net profit surged
to RM22.6m from RM6.1m in 1HFY09, while operating margin grew by 7.9%-pts yoy thanks to: 1)
improvement in production efficiency; 2) lower factory cost per unit due to higher production output; 3)
increase in sales of higher margin products; 4) lower raw material costs, as prices of raw material were down
by 10-20%. Although we expect 2HFY10 earnings to be lower due to the seasonal effect (3Q would typically
be lower) based on our annualised estimate, FY06/10 profit could potentially be around RM35.6m, which is
an increase of 154.4% yoy, backed by the operating leverage effect and increase in sales of higher margin
products. Management mentioned that it expects to pay out 20% of its earnings as dividends. Given that it
had earlier declared an interim tax-exempt DPS of 3 sen, we expect the company to pay out another 9 sen
(based on a payout ratio of 20%) (FY09: 5.8 sen TE). This would bring total tax-exempt dividend to 12 sen
and a decent net yield of 5.5%.
Valuations and Recommendations
 Investment case. Latitude is currently trading at 10.1x and 4.0x for its FY06/09 and FY06/10 (based on
annualised) earnings respectively, as compared to its 5-year average PE of 6.8x. As seen in Table 2, we
compare Latitude to companies that have similar business divisions and produce goods related to Jaycorp’s
portfolio of products. By applying a 40% discount to the CY10 manufacturing sector PE of 12x, we value
Latitude at 7x FY10 PER due to its smaller market cap vs. the manufacturing stocks in our universe. This
suggests a fair value of RM3.85.
Table 2
Comparative Valuations
Company FY09 FY08 FY09 FY08 FY09 FY09

Market cap Revenue EPS EPS PER PER Operating
(RM m) (RM m) (sen) (sen) (x) (x) Margin (%)
Eurospan Holdings^ 36.6 62.8 0.16 0.08 5.7 11.4 1.7

Jaycorp 115.3 252.7 0.03 0.09 28.0 9.3 9.4
Latitude Tree Holdings 141.9 397.4 0.17 0.19 12.9 11.5 5.6
Len Cheong Holdings 9.3 24.4 0.02 0.00 7.8 n.m 2.6
Lii Hen Industries 72.0 218.9 0.09 0.27 13.3 4.4 7.4
SYF Resources 21.0 190.6 (0.17) (0.22) n.m n.m. -4.4
Homeritz 108.0 108.4 0.07 0.13 7.7 4.2 23.2
Simple average 12.6 8.2
Source: RHBRI and Bloomberg

www.rhbinvest.com
Banking Overweight
Sector Rating : We see several factors that could take valuations to higher levels. These include: 1)
earnings growth gaining momentum (continued loan growth, stable NIM, booming non-
interest income and stable NPLs); 2) M&A excitement; 3) potentially more active capital
management (barring Basel III); 4) low foreign shareholding; 5) largest sector weighting in
FBM KLCI; and 6) valuations that are still below recent peaks. The sector, in our view,
represents the best proxy to the economic recovery.
Company Short-Term/Long-Term Drivers Earnings Comment/Fair Value
Affin Consistency in earnings over the last five Fair value of RM3.03 is based on 11x CY10
quarters with improvements in underlying EPS or 5x discount to sector benchmark of
Market Perform trends (loan growth, NIM and asset quality). 16x to account for lower ROE as well as low
While asset quality is below industry liquidity and market capitalisation.
RM3.01 average, the gap has narrowed significantly
since 3Q08. Furthermore, capital ratios
remain healthy, thus raising the prospects of
higher dividend payout ahead.
AFG We expect AFG to post strong earnings Fair value of RM3.27 is based on 15x (1x
growth ahead on the back of factors such discount to sector benchmark) CY10 EPS.
Outperform as: 1) niche in the consumer and SME
segments; 2) strong deposit franchise; 3)
RM3.05 positive impact from a rate hike; and 4)
absence of CLOs provisions and aggressive
pre-emptive provisioning. Moreover, any
potential write back of provisioning from
CLOs and pre-emptive provisioning earlier
would provide an additional kicker to
earnings.
Other positive factors are robust capital
ratios, relatively cheap valuations (which are
not stretch vis-à-vis historical) and low
foreign shareholding.
AMMB Value proposition from ANZ is expected to Guiding for higher dividend of at least 10
improve competitiveness, augment ROE and sen in FY03/10 vs. 8 sen in FY03/09.
Outperform raise cross-border opportunities over the Fair value of RM6.13 is based on sector
longer term. While AMMB should benefit benchmark of 16x CY10 EPS.
RM4.96 from the revival in capital market activities,
it would also be the worst hit when interest
rate rises. In mitigation, AMMB has gradually
changed its loan portfolio to position for any
eventual interest rate hike.
Earnings sensitivity to rising NPLs is the
highest among mid-cap banks and high
percentage of HP loans means higher
delinquency risk. However, recent results
have shown that its much improved risk
management was able to contain NPLs,
mitigating earlier concerns about asset
quality.

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FYE TURNOVER NET NET % NET EV/ P/ GROSS DIV % CHANGE
(RMm) PROFIT EPS GROWTH PER EBITDA BV DIV YIELD IN PRICE
(RMm) (SEN) (x) (x) (x) (SEN) (%) 1 MTH
3 MTHS
12 MTHS
Sector Average
2009 (3.1) 17.2 2.2 2.2
2010 19.5 14.3 2.1 3.1
2011 14.5 12.5 1.9 3.4
31 December
2009(a) 1274.2 371.8 24.9 +27.0 12.1 n.a. 0.9 8.5 2.8 +4.2
2010(f) 1354.3 411.0 27.5 +10.5 10.9 n.a. 0.9 8.5 2.8 +17.1
2011(f) 1418.7 442.1 29.6 +7.6 10.2 n.a. 0.9 8.5 2.8 +79.6
2012(f) 1491.3 473.6 31.7 +7.1 9.5 n.a. 0.9 8.5 2.8
Issued capital of 1,494.4m ordinary shares of RM1.00 each
Average daily volume (000) : 2,250.9 shares
Market capitalisation (RMm) : 4,498
31 March (Fully Diluted)

2009(a) 979.8 229.1 14.8 (39.7) 20.6 n.a. 1.7 6.3 2.0 +8.2
2010(f) 968.6 259.3 16.7 +13.2 18.2 n.a. 1.6 6.3 2.0 +22.0
2011(f) 1162.2 364.2 23.5 +40.5 13.0 n.a. 1.5 6.3 2.0 +53.3
2012(f) 1244.9 411.4 26.6 +13.0 11.5 n.a. 1.3 6.3 2.0
Average daily volume (000) : 3,643.7shares

2009(a) 3184.4 860.8 31.1 +28.7 16.0 n.a. 1.7 8.0 1.6 +2.1

2009(a) 3184.4 860.8 31.1 +28.7 16.0 n.a. 1.7 8.0 1.6 (0.4)
2010(f) 3772.2 1010.0 33.5 +7.8 14.8 n.a. 1.7 10.0 2.0 +2.1
2011(f) 4092.9 1202.1 39.9 +19.0 12.4 n.a. 1.6 10.0 2.0 +67.0
2012(f) 4388.3 1377.3 45.7 +14.6 10.9 n.a. 1.4 10.0 2.0
Note : Stock prices @ 28 April 2010

Banking (Cont'd)
CIMB Post transformation of CIMB Niaga and CIMB Fair value of RM16.24 is based on 17x
Thai, the group is now ready to further scale up CY10 EPS or 1x premium to sector
Outperform its regional platforms for the next phase of benchmark of 16x to reflect its status as a
earnings growth. Among the domestic banks, growing regional universal bank.
RM14.16 CIMB is best placed to benefit from the move
by western banks to scale back their resources
in the region.
Other positive factors include lower earnings
volatility due to a smaller trading book,
consumer banking gaining traction and fast
growing contribution from CIMB Niaga. CIMB is
also the best proxy to the growth from non-
interest income as capital market conditions
improve. While the adoption of more
aggressive capital management has been
temporarily put on hold pending Basel III, in
mitigation, the group would not need additional
equity capital.
EON Cap Near term, EON Cap’s share price performance Fair value of RM8.07 is based on 15x CY10
could be capped by HL Bank’s offer price to EPS or 1x discount to sector benchmark to
Outperform acquire the former’s assets and liabilities. reflect smaller market capitalisation and
However, there is a possibility that shareholders liquidity.
RM7.08 could reject the offer in the EGM, thereby
“forcing” HL Bank to increase its offer price.
The above, however, does not change our view
that EON Cap’s fundamentals are improving.
The transformation has resulted in sustainable
PBT of more than RM100m over the last four
quarters as asset quality inches closer to the
industry average. Moreover, we see the
potential of more active capital management
that would benefit shareholders in terms of
higher dividends and enhancement in ROEs. Its
internal restructuring would also result in a
more efficient corporate structure and would be
more efficient for tax planning purposes.
HL Bank Near-term focus will be on the merger saga Fair value of RM9.05 is based on 15x CY10
with EON Cap and this could prevent any value EPS or 1x discount to sector benchmark to
Market Perform enhancing corporate exercises. HL Bank has account for lower liquidity and smaller
also announced two capital raising exercises to market capitalisation.
RM8.71 strengthen its balance sheet in the event the
deal goes through, i.e.: 1) a renounceable
rights issue to raise up to RM1.6bn; and 2) the
issuance of up to RM1.8bn of capital qualifying
securities.
On its own, HL Bank has the highest capital
ratios and second strongest asset quality in our
universe. However, due to its conservative
stance during the economic downturn, its loan
growth is now lagging behind peers and
industry. Given that it may have lost traction in
the market, it may take time for the group to
regain market share.

3 MTHS
31 December
2009(a) 10592.7 2806.8 79.5 +37.4 17.8 n.a. 2.5 18.5 1.3 +1.1
2010(f) 11865.8 3373.2 95.5 +20.2 14.8 n.a. 2.3 18.5 1.3 +11.8
2011(f) 12951.7 3976.6 112.6 +17.9 12.6 n.a. 2.1 18.5 1.3 +79.2
2012(f) 14164.6 4619.1 130.8 +16.2 10.8 n.a. 1.9 19.5 1.4
31 December
2009(a) 1423.3 305.5 49.2 +>100.0 14.4 n.a. 1.4 7.7 1.1 +0.9
2010(f) 1577.4 373.1 53.8 +9.4 13.2 n.a. 1.3 10.0 1.4 +2.0
2011(f) 1678.6 422.4 60.9 +13.2 11.6 n.a. 1.2 10.0 1.4 +102.3
2012(f) 1780.4 468.8 67.6 +11.0 10.5 n.a. 1.1 10.0 1.4
Issued capital of 693.2m ordinary shares of RM1.00 each
Average daily volume (000) : 666.2 shares
30 June
2009(a) 2066.0 849.2 53.7 +14.5 16.2 n.a. 2.4 24.0 2.8 +1.0
2010(f) 2125.6 892.7 56.5 +5.1 15.4 n.a. 2.2 24.0 2.8 +6.9
2011(f) 2227.3 894.2 56.6 +0.2 15.4 n.a. 2.0 24.0 2.8 +55.5
2012(f) 2326.9 945.9 59.9 +5.8 14.6 n.a. 1.8 24.0 2.8

Banking (Cont'd)
Maybank Earnings have significantly surprised on Fair value of RM8.96 is based on sector benchmark
the upside for two consecutive quarters of 16x CY10 EPS.
Outperform on the back of strong increase in
operating income (both interest and non-
RM7.45 interest) and lower LLP. We now expect its
ROE to jump back to the 15% level
(matching FY08 ROE), albeit just a tad
lower than the 16-17% achieved during
FY04-07. With strong organic growth from
domestic operations, Singapore and,
especially, BII, the negative impact from
the expensive acquisitions (of BII and
MCB) would be more than nullified as
FY11 EPS is expected to exceed pre-
acquisition levels. Thus, its PER and P/B
no longer deserves to be the only stock
trading near one standard deviation below
their post Asian financial crisis means.
Public Bank In our view, Public Bank is the best proxy Fair value of RM13.12 is based on sector
to the economic recovery in terms of loan benchmark of 16x CY10 EPS.
Outperform growth. Also expected to be one of the
main beneficiaries from the hike in
RM12.00 (F) interest rate. While the bank should
benefit from the adoption of FRS139 and
RM12.00 (L) Basel II IRB approach, the impact of
Basel III has raised uncertainties on
capital ratios and resulted in lower
dividend guidance. Nevertheless, dividend
yields are still attractive at above 5%.
Longer term, the group appears well
placed to penetrate the China market
through its Hong Kong arm.
RCE Earnings growth expected to be Fair value of RM1.15 is based on 11x CY10 EPS or
underpinned by the strong expansion in 5x discount to sector benchmark of 16x to reflect
Outperform loan book. This is despite rising its non-deposit taking status and small market
competition from the commercial banks capitalisation.
RM0.66 (with several of them already growing
their loans to civil servants via salary
deduction). RCE’s high margins would
also help cushion the rising competitive
pressure on profitability. Meanwhile,
delinquency risk remains low as almost all
its borrowers are civil servants (relatively
higher job security) and the company has
the first right to repayment (via salary
deduction scheme).

3 MTHS
12 MTHS
30 June
2009(a) 10321.5 2180.6 37.8 (39.7) 19.7 n.a. 1.7 8.0 1.1 (0.7)
2010(f) 12608.2 3634.4 51.3 +35.7 14.5 n.a. 2.0 29.0 3.9 +9.7
2011(f) 13425.1 4292.7 60.7 +18.1 12.3 n.a. 1.8 35.0 4.7 +74.1
2012(f) 14442.6 4823.4 68.2 +12.4 10.9 n.a. 1.6 39.0 5.2
31 December
F L F L F L
2009(a) 6109.9 2517.3 73.3 (4.7) 16.4 /16.4 n.a. 4.7 /3.7 55.0 4.6 +3.3 /+3.3
F L F L F L
2010(f) 6701.9 2872.0 82.0 +11.8 14.6 /14.6 n.a. 4.0 /3.3 60.0 5.0 +1.5 /+2.5
F L F L F L
2011(f) 7250.3 3211.7 91.7 +11.8 13.1 /13.1 n.a. 3.5 /2.9 65.0 5.4 +44.1 /+43.3
F L F L
2012(f) 7786.6 3476.0 99.2 +8.2 13.1 /12.1 n.a. 3.1 /2.6 70.0 5.8
F L
Average daily volume (000) : 1810.4 /2951.9 shares
31 March
2009(a) 215.4 66.6 9.4 +12.0 7.0 8.2 1.6 1.0 1.5 (3.7)
2010(f) 229.6 78.5 10.0 +7.3 6.5 8.2 1.4 1.0 1.5 (5.1)
2011(f) 243.8 83.2 10.6 +5.9 6.2 9.0 1.1 1.0 1.5 +35.1
2012(f) 264.7 88.3 11.3 +6.1 5.8 9.3 1.0 1.0 1.5
Market capitalisation (RMm) : 512

Building Materials Overweight
Sector Rating : Domestic cement consumption will likely improve from 2H10 onwards, underpinned by: (1)
The implementation of public construction projects; and (2) A pick-up in property
development activities (as evidenced in the surge in property launches since 2H09). Upward
price momentum for steel prices is likely to sustain in the near term, as: (1) Global demand
will likely strengthen in 2010; (2) Concerns on overcapacity is likely to be downplayed; and
(3) Prices of inputs will likely rise further and this will lend support to steel prices.
Ann Joo ST: AJR’s profitability to accelerate in FY12/10 earnings will be boosted by: (1) Low
1HFY12/10 on the back of the recent rise in inventory cost carried from FY12/09; (2)
Outperform global steel prices which will outpace its Higher international long steel product prices;
production cost. This is mainly because: and (3) Speedy implementation of public
RM2.85 (1) It managed to stock up scrap inventory construction projects that will boost domestic
at low prices (when prices weakened in demand for long steel products.
4Q); and (2) The demand in the SEA
Fair value is RM3.32 based on 12x FY12/10
region has started to pick up since Jan 09.
fully-diluted EPS of 27.6 sen.
LT: Diversification into the production of
higher-value steel products that will boost
profitability.
CSC Steel ST: Both demand and prices of cold rolled FY12/10 earnings to sustain on the back of
coil will be boosted by: (1) Economic global economic recovery that will boost
Outperform recovery that will boost demand for end demand and prices of flat steel products.
products, and hence cold rolled coil; and Fair value is RM2.55 based on 9x FY12/10 EPS
RM1.94 (2) Rising input prices, which will lend of 28.3 sen.
support to steel prices, and hence steel
stockists’ restocking sentiment.
LT: Sustained economic growth that will
boost demand and prices of flat steel
products.
Hiap Teck ST: (1) Recovering sales volume at the CY2010 earnings will be boosted by: (1)
trading division that trades largely long Demand and price recovery at the flat steel
Outperform steel products; and (2) Potential supply product segment; and (2) Higher long steel
contract with MITCO that will boost demand product prices that will boost earnings
RM1.39 for American Petroleum Institute (API) contribution at the trading division.
certified electric resistance welded (ERW)
Fair value is RM1.80 based on 9x CY2010 EPS
pipes.
of 20.0 sen.
LT: (1) Economic recovery that will boost
demand and prices of flat steel products;
and (2) Diversification into the production
of API pipes that command higher profit
margin.
Kinsteel ST: Margin expansion arising from the FY12/10 earnings will be boosted by: (1)
rising global steel prices that will boost Higher international long steel product prices;
Outperform profitability at 37.4%-owned Perwaja, as (2) Speedy implementation of public
Perwaja’s production cost in 1HFY12/10 will construction projects that will boost domestic
RM0.97 only increase marginally given that its demand for long steel products; and (3)
contracted iron ore shipment at low prices Higher contribution at 37.3%-owned Perwaja.
will last until 2QFY12/10. Fair value is RM1.22 based on 12x FY12/10
LT: Conversion of existing idle facilities to fully-diluted EPS of 10.2 sen.
production capacity that will boost scale of
operation.

3 MTHS
12 MTHS
Sector Average
2009 (19.3) 15.5 8.5 1.4 5.2
2010 +36.8 9.6 6.3 1.4 5.6
2011 (34.5) 7.0 5.4 0.9 6.0
31 December
2009(a) 1303.0 31.6 6.0 (77.3) 47.1 20.5 1.6 9.0 3.2 +0.7
2010(f) 2368.6 194.3 37.2 +>100 7.7 6.6 1.3 24.0 8.4 +1.8
2011(f) 3068.6 217.2 41.5 +11.8 6.9 6.3 1.2 27.0 9.5 +90.0
2012(f) 3093.1 214.9 41.1 (1.0) 6.9 6.2 1.2 27.0 9.5
31 December
2009(a) 971.9 91.2 24.0 +55.1 8.1 2.9 0.9 20.0 10.3 +8.4
2010(f) 1468.0 107.5 28.3 +17.9 6.9 2.1 0.9 13.0 6.7 +42.6
2011(f) 1596.0 113.0 29.7 +5.1 6.5 1.3 0.8 15.0 7.7 +113.2
2012(f) 1701.0 122.1 32.1 +8.1 6.0 0.5 0.8 15.0 7.7
31 July
2009(a) 1159.3 17.4 5.3 (88.7) 26.1 11.8 0.8 1.0 0.7 (4.1)
2010(f) 1591.6 62.5 19.1 +>100 7.3 8.2 0.7 2.0 1.4 0.0
2011(f) 1806.7 69.6 21.2 +11.3 6.5 7.4 0.7 2.5 1.8 +93.1
2012(f) 1890.8 71.3 21.8 +2.5 6.4 7.0 0.6 2.5 1.8
31 December
2009(a) 1928.1 (13.7) (1.3) (>100) n.m. 17.9 1.1 1.0 1.0 (5.4)
2010(f) 1546.5 106.8 10.2 +>100 9.5 4.7 1.0 1.0 1.0 (5.4)
2011(f) 2049.2 123.0 11.7 +15.2 8.2 4.3 0.9 1.0 1.0 +69.3
2012(f) 2062.3 124.9 11.9 +1.5 8.1 3.9 0.8 1.0 1.0

Building Materials (Cont'd)
Lafarge ST: Pump priming activities and more FY12/10 earnings to improve on the back of: (1) The
property launches. implementation of public construction projects; and
Outperform (2) Stronger property development activities that
LT: Sustained public spending in
will boost domestic cement consumption.
Malaysia and the region.
RM6.55 Fair value is RM7.81 based on 14x FY12/10 EPS of
55.8 sen.
Perwaja ST: To benefit from the recent rise in FY12/10 performance to turn around, underpinned
global steel prices (which is likely to by: (1) Higher average selling prices; (2) Higher
Outperform sustain until 1HFY12/10 on the back of sales volumes; and (3) Lower raw material cost.
the cost push factor) as its production
cost in 1HFY12/10 will only increase Fair value is RM1.79 based on 12x FY12/10 fully-
RM1.40
marginally given its contracted iron diluted EPS of 14.9 sen.
ore shipment at low prices will last
until 2QFY12/10.
LT: Conversion of existing idle
facilities to production capacity that
will boost scale of operation.
Sino Hua-Ann ST: Profitability to improve on FY12/10 to return to the black, underpinned by: (1)
narrower gap between prices of Rising steel production in China will boost demand,
Outperform metallurgical coal (input) and and hence prices of metallurgical coke (one of the
metallurgical coke (output). key ingredients in producing crude steel in China);
RM0.44 LT: A full-steam recovery in global and (2) Higher by-product prices.
steel output that will boost demand, Fair value is RM0.59 based on 12x FY12/10 EPS of
and hence price of metallurgical coke. 4.9 sen.
YTL Cement ST: Pump priming activities and more CY2010 earnings to improve on the back of: (1) The
property launches. implementation of public construction projects; and
Outperform LT: Sustained public spending in (2) Stronger property development activities that
Malaysia and the region. will boost domestic cement consumption.
RM4.30 Fair value is RM5.51 based on 11x CY2010 EPS of
50.1 sen.

3 MTHS
12 MTHS
31 December
2009(a) 2483.1 412.2 48.5 +12.1 13.5 8.6 1.7 38.0 5.8 +4.6
2010(f) 3016.9 473.8 55.8 +14.9 11.7 8.5 1.7 30.0 4.6 +4.0
2011(f) 3069.4 505.6 59.5 +6.7 11.0 7.6 1.6 30.0 4.6 +47.5
31 December
2009(a) 1571.2 (115.5) (20.6) (>100) n.m. n.m 0.8 0.0 0.0 (6.7)
2010(f) 2187.2 84.2 15.0 +>100 9.3 7.4 0.8 0.0 0.0 (5.4)
2011(f) 2284.9 127.9 22.8 +51.8 6.1 6.4 0.7 0.0 0.0 +53.0
2012(f) 2298.1 135.5 24.2 +6.0 5.8 5.9 0.6 0.0 0.0
31 December
2009(a) 1280.3 (20.6) (1.8) (>100) n.m. n.a 0.7 0.0 0.0 (11.1)
2010(f) 1707.1 55.0 4.9 +>100 9.0 n.a 0.6 0.0 0.0 (9.3)
2011(f) 1942.2 53.6 4.8 (2.4) 9.2 5.1 0.6 0.0 0.0 +51.7
2012(f) 2062.4 50.9 4.5 (5.1) 9.7 5.0 0.5 0.0 0.0
30 June
2009(a) 1972.8 240.5 51.3 +74.8 8.4 4.6 1.3 30.0 7.0 +1.2
2010(f) 1843.1 246.5 50.1 (2.2) 8.6 4.2 1.3 30.0 7.0 +7.5
2011(f) 1914.9 268.1 54.5 +8.8 7.9 3.5 1.2 30.0 7.0 +51.4
2012(f) 1922.1 258.2 52.5 (3.7) 8.2 3.0 1.0 30.0 7.0

Construction Neutral
Sector Rating : We are now more upbeat on the construction sector, prompted largely by investors’
improving risk appetite for construction stocks following: (1) The massive underperformance
of the sector vis-à-vis the market in 4Q2009 and 1Q2010; and (2) A better sector news flow
and new expectations leading up to the announcement of the 10th Malaysia Plan (10MP) in
June 2010. We believe these may to a certain extent, moderate the negative elements that
have weighed down on the performance of the construction stocks over the last two quarters
such as: (1) The slow pace of the roll-out of public projects, shrinking margins and declining
dominance of established players in large-scale projects locally; and (2) The not-so-rosy
outlook and increased operating risks in key overseas markets (following the Dubai credit
crisis, Dong’s devaluation and rising arbitration cases).
Emas Kiara ST: Geosynthetics contracts for the Sustained EPS growth in FY12/10-11 on increased
new permanent LCCT. sales of geosynthetics.
Outperform LT: Sustained public spending in Fair value is RM1.31 based on 10x FY12/10 EPS, in
Malaysia, rising acceptance of line with our benchmark 1-year forward target PER
RM0.53 geosynthetics and awareness towards for the construction sector of 10-14x.
environment protection.
Fajarbaru ST: Outstanding construction Double-digit growth in FY06/11 EPS assuming

orderbook of RM427m. RM400m worth of new jobs to be secured.
Outperform
LT: Sustained public spending and Fair value is RM1.31 based on 10x fully-diluted
airport development in Malaysia. CY10 EPS of 13.1sen, in line with our benchmark
RM1.06
1-year forward target PER for the construction
sector of 10-14x.
Gamuda ST: Outstanding construction EPS to recover in FY07/10 as cost pressure eases.
orderbook of RM7bn.
Fair value is RM2.05 based on 14x CY10 EPS of
Underperform LT: Sustained public spending in 14.7sen, in line with our benchmark 1-year forward
Malaysia, ability to win overseas target PER for the construction sector of 10-14x.
RM2.96 projects.
Hock Seng Lee ST: Outstanding construction Sustained growth in EPS in FY12/10-11 as key
orderbook of RM1.2bn. contracts hit substantial billing milestones.
Market Perform
LT: Sustained public spending in East Fair value is RM1.56 based on 12x FY12/10 EPS, in
Malaysia. line with our benchmark 1-year forward target PER
RM1.53
for the construction sector of 10-14x.
IJM Corporation ST: Outstanding construction EPS to resume growth in FY03/11 on recognition of
orderbook of RM4.6bn. profits from higher-margin newer contracts,
Market Perform coupled with stronger property and plantation
LT: Sustained public spending in
Malaysia, ability to win overseas profits.
RM4.90
projects. Fair value is RM4.88 based on 16x fully-diluted EPS
of 30.5sen, at a 2x multiple premium above our 1-
year forward target PER for the construction sector
of 10-14x to reflect: (1) IJM’s group earnings that
are resilient as reduced construction profits in the
event of sharp increases in construction input costs
will be cushioned by higher plantation profits during
a commodity price upcycle; and (2) IJM’s largely
trouble-free position as it is not involved in any
major arbitration cases in the overseas market.

3 MTHS
12 MTHS
Sector Average
2009 (2.2) 20.6 13.6 1.6 2.5
2010 +26.8 16.1 11.6 1.5 2.1
2011 +7.1 15.0 11.0 1.4 2.1
31 December
2009(a) 137.5 9.8 11.4 (14.7) 4.7 4.4 0.6 1.5 2.8 (5.4)
2010(f) 175.0 11.0 13.1 +15.0 4.1 3.5 0.5 1.5 2.8 (4.5)
2011(f) 164.0 12.8 15.2 +16.7 3.5 2.9 0.5 1.5 2.8 +35.9
2012(f) 173.9 14.2 16.9 +11.1 3.1 2.4 0.4 1.5 2.8
30 June
2009(a) 184.6 18.1 15.2 +56.3 7.0 0.1 1.3 5.5 5.2 0.0
2010(f) 176.4 22.4 13.6 (10.1) 7.8 0.5 1.5 5.5 5.2 +1.0
2011(f) 263.0 28.0 16.1 +18.1 6.6 0.2 1.3 5.5 5.2 +19.8
2012(f) 374.0 35.9 19.5 +21.2 5.4 (0.1) 1.2 5.5 5.2
31 July
2009(a) 2727.3 193.7 9.7 (40.1) 30.4 32.0 2.0 8.0 2.7 +3.9
2010(f) 2958.5 277.0 13.6 +40.4 21.7 27.8 1.9 8.0 2.7 +6.9
2011(f) 3370.5 326.6 16.1 +17.9 18.4 21.8 1.8 8.0 2.7 +31.0
2012(f) 3194.9 331.3 16.3 +1.5 18.1 20.5 1.7 8.0 2.7
31 December
2009(a) 375.0 56.3 10.2 +35.3 15.0 9.6 2.9 2.4 1.6 (2.5)
2010(f) 514.5 72.4 13.0 +27.2 11.8 7.2 2.4 2.5 1.6 +31.9
2011(f) 597.5 84.2 15.1 +16.4 10.1 5.7 2.0 2.5 1.6 +155.0
2012(f) 617.5 87.6 15.8 +4.1 9.7 7.3 1.7 2.5 1.6
31 March
2009(a) 4601.3 290.2 32.8 (5.2) 14.9 10.8 1.2 21.4 4.4 +1.7
2010(f) 4740.3 278.9 21.1 (35.7) 23.2 12.2 1.3 10.7 2.2 +6.5
2011(f) 5984.4 428.6 31.7 +50.6 15.4 8.9 1.3 10.7 2.2 +47.2
2012(f) 5585.6 440.2 32.6 +2.7 15.0 8.4 1.2 10.7 2.2

Construction (Cont'd)
MRCB ST: Outstanding construction Stronger profitability in FY12/10 assuming

orderbook of RM1.2bn. Ability construction margins are to improve.
Trading Buy to bag federal land. Fair value is RM2.06 based on “sum of parts”, valuing
LT: Sustained public spending in its construction business at 10x FY12/10 earnings, in
RM1.55 Malaysia, profitable property line with our benchmark 1-year forward target PER
development on federal land. for the construction sector of 10-14x, and DCF for its
concession assets and existing/potential property
projects.
Sunway Holdings ST: Outstanding construction EPS to jump 58% in FY12/10 underpinned by strong
orderbook of RM2.2bn, property construction and property profits.
Outperform profits from Singapore, and Fair value is RM1.69 based on 10x fully-diluted FY12/
sales of aggregates in Malaysia 10 EPS of 16.9sen, in line with our benchmark 1-year
RM1.54 and Trinidad & Tobago. forward target PER for the construction sector of 10-
LT: Sustained public spending in 14x.
Malaysia, ability to win overseas
projects. Ability to secure new
property projects in Singapore.
Sustained demand for
aggregates in Malaysia and
Trinidad & Tobago.
WCT ST: Outstanding construction EPS to contract in FY12/10-11 on depleting

orderbook of RM3.2bn. orderbook.
Underperform
LT: Sustained public spending in Fair value is RM2.10 based on 12x fully-diluted FY12/
Malaysia, ability to rebuild its 10 EPS of 17.5sen, in line with our benchmark 1-year
RM2.94
reputation (after the high-profile forward target PER of 10-14x for the construction
dismissal as contractor for the sector.
Meydan Racecourse project in
Dubai) and win contracts in the
Gulf states.

3 MTHS
12 MTHS
31 December
2009(a) 921.6 34.6 3.8 +>100 40.8 20.3 2.1 0.0 0.0 +3.3
2010(f) 1276.5 96.4 7.1 +86.4 21.9 14.9 1.7 0.0 0.0 +9.9
2011(f) 1325.6 104.1 7.6 +8.0 20.3 13.6 1.5 0.0 0.0 +52.2
2012(f) 1301.4 113.0 8.3 +8.5 18.7 12.2 1.4 0.0 0.0
31 December
2009(a) 2589.9 109.3 13.6 (27.0) 11.3 7.4 1.4 2.3 1.5 0.0
2010(f) 2406.9 128.6 21.4 +57.6 7.2 5.9 1.2 2.8 1.8 +15.8
2011(f) 2230.9 136.2 22.7 +5.9 6.8 6.2 1.0 2.8 1.8 +91.3
2012(f) 2643.2 156.3 26.0 +14.8 5.9 5.5 0.9 3.8 2.5
31 December
2009(a) 4666.6 147.1 18.8 +43.6 15.7 10.2 1.8 10.0 3.4 +7.7
2010(f) 2436.2 140.6 18.2 (3.0) 16.2 13.8 1.6 6.0 2.0 +11.8
2011(f) 2020.9 130.7 16.9 (7.0) 17.4 14.6 1.5 6.0 2.0 +100.0
2012(f) 1747.5 134.2 17.4 +2.6 16.9 14.4 1.4 6.0 2.0

Consumer Neutral
Sector Rating : RHBRI’s economics team forecasts that consumer spending will likely grow at a stronger pace
of +4.5% yoy in 2010, as compared to +2.1% in 2009, as consumer confidence rises on the
back of improving employment prospects and pent-up demand. This should positively impact
all consumer stocks under our coverage. For the tobacco players, we expect continuing
pressure from: 1) growth in illicit cigarettes; 2) Government policies; 3) AFTA-Cept; and 4)
excise duty hike in Budget 2011. Meanwhile, we expect brewers to benefit from an increase
in average selling prices by about 3% in May 10, easing pressure from raw material costs
and the exemption from an excise duty hike in the recent Budget. For the F&B sub-sector,
new product innovations or new market ventures will provide F&B companies with
opportunities to capture a new consumer base while a recovering economy will provide the
impetus for a rise in consumer spending. For the consumer sector as a whole, we now prefer
stocks with potential for a strong recovery in earnings ahead, and with resilient attributes.
AEON While short-term retail growth may be slower in For FY10, we expect improving consumer
the near term as the opening of its new Melaka sentiment together with the opening of its
Outperform store (deferred to Feb 10) and its two smaller new Melaka and one Cheras mall to boost
Cheras stores in FY10-11 is below its average of earnings by 9.6% yoy. Our fair value of
RM5.00 2-3 new Jusco stores p.a. in the past four years, RM5.85 is based on 14x FY10 EPS, the
AEON’s property management division’s margins average PER for the retail sector.
have fully recovered in 4Q09.
Longer-term growth would be underpinned by
recurring sales from its strong customer loyalty
programme, which now has 800,000 members
(60% active) and improving consumer and
business confidence. AEON is also looking at two
possibilities to expand its income stream i.e.
taking up a stake in its parent’s expansion plans
in Vietnam and expanding into East Coast, Sabah
and Sarawak. Potential earnings contribution
from these plans would only be realised from
2014 onwards.
Amway Short-term growth may be favourable in the We expect earnings to increase by 24% in
near term as 88% of Amway’s products are FY10 following an anticipated
Outperform purchased in US$. US$ has weakened by 11% strengthening of ringgit against US$,
against ringgit from FY09’s average of RM3.60/ together with higher revenue per CDF on
RM7.45 US$. Together with consistent and decent improving consumer sentiment. We also
dividend payout. expect Amway to continue its net
Amway would appeal to conservative investors dividend payout of 90-95%, translating to
for its consistent and decent dividend net yield of 7% p.a.. DCF-derived fair
payout.Longer-term growth will be underpinned value is RM8.45/share based on Amway’s
by Amway’s success of attracting new WACC of 8.1%.
distributors into its MLM team as well as
increasing its revenue per distributor.
BAT Short-term pressures includes: 1) continued high 6.9% decline in earnings for FY10 driven
levels illicit cigarettes; 2) Government’s by declining TIV, one-off expenditure on
Underperform persistent fight to reduce cigarette consumption the Reloc pack, increase in COGS from
(via pictorial health warning, floor price for the new packaging and less than 20s
RM43.02 cigarettes, removal of less than 20s packs etc); pack ban. DCF-derived fair value is
and 3) 2010 AFTA-Cept, which we believe would RM38.95 based on BAT’s WACC of 7.9%.
negatively affect TIV growth. In addition, the Projected net dividend payout of 90-95%
Government could impose a ban on smoking in translates to 5% net yield p.a..
public places. We expect TIV to fall by 5% in
2010.

3 MTHS
12 MTHS
Sector Average
2009 +5.3 16.1 8.2 4.3 3.9
2010 +9.1 14.8 7.5 3.8 4.0
2011 +6.9 13.8 6.6 3.4 4.1
31 December
2009(a) 3735.8 133.5 38.0 +10.7 13.1 4.7 1.8 12.0 2.4 +1.0
2010(f) 3944.5 146.3 41.7 +9.6 12.0 4.5 1.6 12.0 2.4 (4.8)
2011(f) 4312.3 163.6 46.6 +11.8 10.7 3.9 1.4 12.0 2.4 +25.0
2012(f) 4918.0 185.3 52.8 +13.3 9.5 3.1 1.3 12.0 2.4
31 December
2009(a) 663.0 72.5 44.1 (23.7) 16.9 10.1 5.2 48.0 6.4 +1.8
2010(f) 697.9 89.6 54.5 +23.6 13.7 8.6 5.0 50.0 6.7 +2.1
2011(f) 722.5 92.8 56.5 +3.5 13.2 8.4 4.9 52.0 7.0 +5.9
2012(f) 748.0 96.1 58.4 +3.5 12.7 8.1 4.7 54.0 7.2
31 December
2009(a) 3923.4 746.8 261.5 (8.0) 16.4 11.7 n.m 236.0 5.5 (0.6)
2010(f) 3921.6 695.2 243.5 (6.9) 17.7 12.5 n.m 219.1 5.1 +2.2
2011(f) 3926.9 665.8 233.2 (4.2) 18.5 12.8 n.m 209.9 4.9 (3.3)
2012(f) 3988.7 667.1 233.6 +0.2 18.4 12.5 n.m 210.3 4.9

Consumer (Cont'd)
Carlsberg Carlsberg’s earnings growth looks We expect Carlsberg’s earnings to jump by 68%
favourable as: 1) TIV may not be affected yoy in FY10 as: 1) economic condition improves;
Outperform by recent 3% price increase given the small 2) margins improve; and 3) impact from
quantum; 2) margin improvement from Carlsberg Singapore acquisition comes through
RM5.32 lower raw material prices and higher (which is expected to contribute 33% of
utilisation of its plant following the Singapore Carlsberg’s earnings in FY10). DCF-derived fair
acquisition; and 3) other synergies from its value is RM5.90 based on Carlsberg’s WACC of
Singapore acquisition. 9.1%. Projected net dividend payout of 60%
translates to 5-6% net yield from FY10 onwards.
Daibochi Short-term growth to come from current and We expect FY12/10 earnings to jump by 22.4%
new clientele and expansion into other driven by: 1) the gain of new contracts from
Outperform overseas markets.Longer-term growth existing and new customers in both the F&B and
underpinned by the company’s emphasis on non-F&B segments; 2) product innovation; and 3)
RM3.28 product innovation and move into non-F&B increasing sales to overseas market. Our target
sectors, which would yield higher margins. price of RM4.40 is based on target 12x FY12/10
EPS, which is a 17% discount to the consumer
sector PER of 14.5x attributed for its smaller
market capitalisation.
Faber In the short term, Faber’s earnings would be Earnings outlook for Faber is expected to be
driven by the growth in its concession driven by: 1) ongoing expansion plans in IFM
Outperform revenue business as well as its overseas services to overseas markets in India and UAE;
expansion in UAE and India. and 2) recovery in property development
RM2.24 In the longer term, although the current earnings on several new launches in FY10 and
concession agreement will expire in Oct FY11 onwards.
2011, we believe there is a strong likelihood We use SOP to derive our RM3.30/share fair
that it will be renewed given its political value for Faber. This is based on: 1) DCF
links, as well as its size and geographical valuation, which uses a WACC discount rate of
reach. Further expansion in its non- 9.7% for its concession business and property
concession IFM business in non-healthcare business; and 2) 14x target PER on estimated
segments either overseas or locally would FY10 earnings for its non-concession IFM
reduce the earnings dependence on the business.
concession. As for its property division, the
current landbank is 40 acres with
approximately RM800m in outstanding GDV,
which should last for 3-4 years.
Hai-O Short-term growth remains strong backed FY04/10-12 earnings projected to increase by 20-
by increasing distributor force, currently 50% due mainly to growth in MLM division.
Outperform growing at 4,000 to 5,000 new members per Indicative fair value is RM5.20/share based on
month. Longer-term growth will be driven by 11.5x CY10 EPS (20% discount to CY10 target
RM4.30 innovative new products to drive MLM sales PER of 14.5x for the consumer sector).
and successful penetration into the
Indonesian market. Downside risk of its
investment into Indonesia is low, considering
the minimal capital investment of RM1.7m. If
successful, we estimate that this could
potentially increase FY04/11 earnings by
10% p.a. on a full-year basis.

3 MTHS
12 MTHS
31 December
2009(a) 1045.5 75.9 25.0 +1.3 21.3 12.6 3.3 14.6 2.7 +6.6
2010(f) 1448.0 129.6 42.1 +68.1 12.7 8.3 3.0 24.8 4.7 +16.7
2011(f) 1476.9 136.4 44.3 +5.3 12.0 7.7 2.7 25.3 4.8 +46.2
2012(f) 1490.8 149.9 48.7 +9.9 10.9 7.9 2.5 27.6 5.2
31 December
2009(a) 221.8 22.8 30.0 +>100 10.9 7.3 4.3 19.4 5.9 (11.8)
2010(f) 250.2 27.9 36.7 +22.4 8.9 5.6 3.7 23.8 7.2 +8.3
2011(f) 270.1 30.3 39.9 +8.8 8.2 5.0 3.1 25.0 7.6 +382.4
2012(f) 281.7 32.5 42.9 +7.3 7.7 4.3 2.5 26.3 8.0
31 December
2009(a) 805.3 82.7 22.8 +35.3 9.8 4.1 2.3 6.0 2.7 (7.8)
2010(f) 922.6 96.3 26.5 +16.4 8.4 3.2 1.9 7.0 3.1 +40.0
2011(f) 839.0 87.8 24.2 (8.8) 9.3 2.9 1.6 8.0 3.6 +154.5
2012(f) 1343.0 157.5 43.4 79.3 5.2 1.4 1.3 8.5 3.8
30 April
2009(a) 435.2 52.4 25.8 (55.8) 16.6 10.7 2.2 17.5 4.1 (3.6)
2010(f) 611.8 78.5 38.7 +49.9 11.1 7.3 1.8 25.8 6.0 +23.3
2011(f) 782.1 97.9 48.3 +24.7 8.9 5.7 1.4 32.2 7.5 +175.9
2012(f) 904.2 116.9 57.7 +19.4 7.5 4.6 1.2 38.5 8.9
Note : Stock prices @ 28 October 2009

Consumer (Cont'd)
KFCH Improved consumer spending is expected to 17% yoy earnings growth for FY10 due to
boost demand for KFCH products. We expect improving SSS growth driven by on-going
Outperform SSS growth of +7% p.a. in FY10-12 for its promotions. Indicative fair value of
Malaysia restaurants. Aggressive expansion RM9.63 based on unchanged 12.5x FY10
RM7.88 strategy (to open 54-58 new outlets p.a. for EPS, a 14% discount to consumer sector
FY10-12) would continue to strengthen its PE of 14.5x.
presence in the country, while its venture into
India with its 1.3bn population is expected to
be a catalyst for its long-term earnings
growth.
KPJ Healthcare Short-term earnings would be driven by 17% yoy core earnings growth for FY10
growing no. of patients and revenue/inpatient due to: 1) patient growth spurred by
Market Perform from increasing take up of insurance policies, expansion of its hospital network into
as well as the turnaround of previously loss- smaller towns; and 2) turnaround of loss-
RM2.92 making hospitals. making hospitals. Indicative fair value of
RM3.20, based on 14.5x FY10 EPS is in
In the longer term, growth momentum would
line with our target PER for the consumer
be underpinned by hospital expansion strategy
sector.
(two new hospitals p.a.) together with anl
aging population, which is growing at about
twice the national population growth rate of
2.3%.
Despite the positive fundamentals, we believe
the relative upside to fair value is no longer
attractive vs. the market, hence, our Market
Perform call on the stock.
Parkson As economic indicators in China are improving 15% yoy earnings growth for FY06/10
(i.e. smaller contraction in manufacturing projected. Indicative fair value is RM6.40/
Market Perform activities and consumer confidence), we share, based on a SOP valuation
believe that Parkson’s short-term earnings comprising: 20% holding company
RM5.62 growth would be fuelled by a recovery in discount to its Hong Kong subsidiary,
consumer spending in China. Also, we expect Parkson Retail Group’s fair value of
China’s RMB4trn stimulus package to start HK$11.95 (which is based on average
filtering down to the consumers. forward PER of China departmental stores
Parkson’s longer-term growth would be driven of 24x); 14x CY10 earnings for its
by: 1) increase in consumer spending in China Malaysian operations; 11.5x CY10 for its
from higher GDP per capita; 2) increase in Vietnamese operations; the value of its 6-
China / Vietnam’s living standards, as Parkson excluded stores in China, assuming that
caters to middle to upper middle income the 6 stores would be acquired at about
group; 3) store expansion (China: 4-6 new 10x PE for retail sector and assuming
stores p.a.; Malaysia: 2-3 new stores p.a.; and about RMB10m net profit per store (based
Vietnam: 2-3 new stores p.a.); and 4) cost- on previous transactions); and net cash/
rationalisation activities. (debt) balance.
Despite the positive fundamentals, we believe

the relative upside to fair value is no longer
attractive vs. the market, hence, our Market
Perform call on the stock.
QL Resources QL’s business of staple food based products Fair value is RM3.93/share based on 13x
willprovide resilient earnings, and this is CY10 earnings, which is at a 10%
Outperform enhancedwith continuous expansions of its discount to the consumer sector target PE
product base as well as geographical of 14.5x.
RM3.73 reach.Commercialisation of its palm biomass
pellet technology in FY11 will provide another
earnings stream going forward, while stronger
earnings contributions from the plantation
division will kick-in from 2012 onwards.

3 MTHS
12 MTHS
31 December
2009(f) 2297.4 130.4 65.8 +10.0 12.0 6.1 2.2 24.0 3.0 +0.4
2010(f) 2650.9 152.8 77.1 +17.2 10.2 5.1 1.9 26.0 3.3 (1.0)
2011(f) 3012.5 177.5 89.5 +16.2 8.8 4.2 1.6 28.0 3.6 +15.0
2012(f) 3406.5 204.6 103.2 +15.3 7.6 3.4 1.4 30.0 3.8
31 December
2009(a) 1446.4 98.8 18.7 +15.1 15.6 8.6 1.3 12.0 4.1 (1.7)
2010(f) 1602.4 115.6 21.9 +17.3 13.3 7.9 1.3 14.0 4.8 +32.7
2011(f) 1778.3 122.6 23.2 +6.0 12.6 7.3 1.3 16.0 5.5 +169.0
2012(f) 1972.1 145.1 27.5 +18.3 10.6 6.7 1.3 18.0 6.2
30 June
2009(a) 2242.3 263.2 25.4 +22.0 22.1 6.0 3.3 5.0 0.9 (1.4)
2010(f) 2583.7 301.9 29.1 +14.7 19.3 5.1 2.9 7.0 1.2 +1.3
2011(f) 2872.6 373.7 36.1 +23.8 15.6 3.6 2.6 8.0 1.4 +35.8
2012(f) 4340.6 472.2 45.6 +26.4 12.3 2.3 2.2 9.0 1.6
31 March
2009(a) 1397.9 89.3 22.6 +10.6 16.5 8.7 3.7 5.8 1.6 +8.1
2010(f) 1523.6 106.8 27.0 +19.6 13.8 6.9 3.1 9.0 2.4 +12.0
2011(f) 1679.2 124.1 31.3 +16.2 11.9 5.9 2.6 10.4 2.8 +74.8
2012(f) 1870.2 146.1 36.9 +17.7 10.1 5.2 2.1 12.3 3.3
Note
Note :: Stock
Stock prices
prices @
@ 28
28 October
April 2010
2009

Gaming Overweight
Sector Rating : With the recent opening of Marina Bay Sands in Singapore on 27 Apr, both the Singapore
casinos are now open and the market waits to see who will be the winner in terms of market
share lead and earnings. We expect to see a more sustainable visitor trend only in another
3-6 months, once the dust settles. In the region, while the Macau Government has recently
made some regulation changes to cool the current booming growth in the gaming industry
in order to promote long-term sustainability of casino operators and diversify the city’s
revenue base, other countries are going ahead with the liberalisation of the gaming industry,
with new casinos being built in Vietnam, Philippines, Cambodia, South Korea and Taiwan,
amongst others). In Malaysia, business continues to be satisfactory with no “discernible
cannibalisation of business” so far, despite a slight decline in visitor arrivals from Singapore.
For the NFO segment, there is also potential for more industry changes in the form of the
potential emergence of a new jackpot game for Tanjong and the possible approval of a
sports betting licence, all of which has intensified industry hopes that the government is
becoming more liberal in its gaming policies.
Berjaya Sports We believe BToto has been given a new We believe all the bad news regarding market
Toto lease of life with the launch of Supreme 6/ share loss to Magnum’s jackpot 4D game has
58, its new RM8.88m minimum already been reflected in BToto’s share price
Outperform replacement jackpot lotto game for Super and that there is not much downside left. At
6/49m as we expect this game to help current valuation levels, we believe BToto
RM4.48 create bigger jackpots than those provides better dividend yield prospects and
previously under the Mega 6/52 game (of is now trading at the lower-end of its 10-year
>RM20m), and bigger than Magnum’s 4D historical PE range of 11-19x. Our DCF-based
jackpot game, resulting in higher sales per fair value is RM4.95 (WACC 9.8%).
draw day. Depending on luck and the
jackpot build-up, this could also help BToto
regain some of its market share lost to
Magnum since the launch of Magnum’s 4D
jackpot game.
Genting Bhd Genting’s earnings growth in 2010 would We prefer Genting over Genting Malaysia, as
be mainly spearheaded by its Malaysian we expect potential earnings contribution
Outperform casino (Genting Malaysia – 40-45% from the Singaporean IR’s to continue to be
contribution); Singaporean casino a kicker, while any slowdown in domestic
RM6.60 (Genting Singapore – 30-35% casino earnings would be buffered by its
contribution); power and oil and gas plantations and power divisions.
divisions (5-10% contribution); and
Our SOP-based fair value is RM8.95/share,
plantations and property divisions
which mainly includes its share of fair values
(Genting Plantations - 10-15%
for Genting Malaysia (RM2.90), Genting
contribution).
Plantations (RM6.65), Genting Singapore
(S$1.35), DCF value for management fees
(WACC 10.1%), 30% discount to US$0.94 EV
per effective MW for power division; 12x
CY10 (20% discount to sector average) target
PER for oil & gas division; market value for its
30% stake in Landmarks; less net debt
(company level) as at end-4Q09. We have
attributed a 20% discount to the SOP to
obtain our fair value for its holding company
status.

3 MTHS
12 MTHS
Sector Average
2009 (14.6) 15.4 6.6 2.0 2.1
2010 +9.0 14.0 5.4 2.1 2.3
2011 +14.3 12.2 4.4 1.8 2.1
30 April
2009(a) 3695.7 410.5 32.7 +18.4 13.7 9.2 n.m 29.0 6.5 +2.5
2010(f) 3419.0 414.3 30.7 (6.2) 14.6 10.2 n.m 23.5 5.2 +6.2
2011(f) 3445.6 437.1 32.4 +5.5 13.8 9.9 n.m 24.0 5.4 +3.4
2012(f) 3470.0 459.0 34.0 +5.0 13.2 9.7 n.m 25.0 5.6
31 December
2009(a) 8893.6 1218.0 33.0 (28.3) 20.0 6.7 1.8 7.2 1.1 (1.8)
2010(f) 13239.2 1694.6 45.8 +38.9 14.4 4.7 2.0 9.5 1.4 (6.4)
2011(f) 15601.3 2075.6 56.1 +22.5 11.8 3.6 1.7 11.5 1.7 +50.7
2012(f) 17497.4 2484.3 67.1 +19.7 9.8 2.7 1.7 14.0 2.1

Gaming (Cont'd)
Genting As fortunes of Genting Malaysia are still Despite its business resiliency, we continue to
Malaysia very much domestic-centric, with tourists expect that any share price re-rating for GM
only making up about 15% of its 20m will be hindered by continued investor
Market Perform visitors and with only 3.5-4% of total disappointment that no capital management in
average household income (of Chinese the form of special dividends or treasury share
RM2.82 population) spent on gaming activities, we cancellation seems to be forthcoming despite
do not expect earnings to be significantly its large cash hoard (of RM5.3bn) and lack of
affected by weaker consumer spending, significant expansion plans. We assign a 15%
although we do acknowledge there could discount to our SOP-based fair value for
be a short-term impact from the opening Genting Malaysia to obtain our target price of
of the Singapore IRs. Nevertheless, we RM2.90. Our SOP is based on DCF for its
believe our casino visitor arrival gaming operations (WACC 9.9%), market
projections of a 4% decline for 2010 value of its stake in Star Cruises and net cash
followed by a 2% growth for 2011 for at end-4Q09.
Genting Malaysia is achievable.
Genting We are positive on Genting Singapore’s We believe there is room for a potential
Singapore (GS) prospects as we believe the strength earnings upgrade via: (1) Higher revenue per
of the whole package that Resorts World patron – due to management’s casino target
Outperform Sentosa (RWS) is offering will drive visitor market of “above average” patrons (one step
numbers and casino patronage strongly at below VIP, but two steps above mass market),
S$0.87 least for the first year or two, especially in versus our VIP:mass assumption of 50:50;
view of it being a “family” destination and and (2) More direct VIP patrons versus junket
the novelty factor, while riding on VIP patrons, given that the direct VIP rebates
Singapore’s anticipated tourism-led of 0.8-1.1% are lower than junket
economic recovery. In the longer term, commissions of 1.4-1.5%, versus our
RWS would have to prove itself to be assumptions of 60%:40% junket VIP:direct
innovative and to respond to the market’s VIP patrons. Our fair value of S$1.35 is based
changing needs in order to maintain its on an unchanged blended average of EV/
customer base, in view of the increasing EBITDA (12x FY11 based on regional average)
competition within the region, not only for and DCF methodologies.
casinos but also for theme parks, although
operating in a guaranteed casino duopoly
market with a highly lucrative gaming tax
structure would give it a competitive
advantage.

3 MTHS
12 MTHS
31 December
2009(a) 4991.8 1383.1 24.2 (0.5) 11.6 5.4 1.6 7.3 2.6 (0.7)
2010(f) 4825.4 1294.3 21.0 (13.3) 13.4 6.0 1.6 6.8 2.4 +1.4
2011(f) 5018.2 1382.1 22.4 +6.8 12.6 5.1 1.5 7.4 2.6 +21.0
2012(f) 5219.0 1452.9 23.6 +5.1 12.0 4.4 1.3 8.0 2.8
31 December
2009(a) 491.2 (167.0) (1.4) (>100) n.m. n.m 3.7 0.0 0.0 (6.0)
2010(f) 2550.1 318.5 2.7 +>100 31.7 16.9 3.3 0.0 0.0 (18.4)
2011(f) 3339.8 439.3 3.8 +37.9 23.0 11.9 2.9 0.0 0.0 +50.7
2012(f) 3933.8 693.0 5.9 +57.7 14.6 10.1 2.4 0.0 0.0
Issued capital of 11,690.1m ordinary shares of USD0.10 each

Insurance Overweight
Sector Rating : The recovering economy will provide increasing demand for general insurance products, in
tandem with increased business activities, recovering property market and motor TIV.
Claims ratio is also expected to improve. As for life insurance, rising disposable income and
personal tax relief for annuity premiums will increase the awareness of life insurance
products as savings cum protection tool. More product innovations are expected to spur the
market, especially to cater for retirement needs.
Allianz The stock is relatively undervalued due to its AMB recently proposed an issue of
ability to maintain above-industry premium Irredeemable Convertible Preference
Outperform growth but below-industry combined ratio. Shares (ICPS) to repay the RM490m parent
In addition, its highly-productive agency loan and address the RBC requirement. EPS
RM5.36 force, bancassurance tie-up, innovative new dilution is subject to the conversion of the
products and strong support from parent ICPS, which we believe is unlikely due to
would be able to meet consumer preference the higher dividend rate of 1.2 times the
for products that provide protection cum normal dividend, plus the restrictions on
savings. Allianz SE’s conversion rights. The ICPS
issue is expected to be completed within the
Increase in motor claims ratio is mitigated
next three months.
by various measures and lower claims ratio
from other classes of business. Sustainable Above-industry premium growth, higher
low management expense should be able to retention rate, below-industry combined
provide “comfortable” combined ratio. ratio, synergistic benefits and sustainable
Sustainable life insurance business profit life business profit transfer which was two
transfer due to the change from solvency FYs ahead of guidance.
base capital to risk-based capital as well as SOP based fair value is RM6.68.
achieving critical mass.
Kurnia Asia Continues rebalancing act with an increase Fair value is RM0.74 based on 11x FY12/10
in exposure to non-motor and profitable EPS.
Outperform comprehensive motor policies as well as There is an upside potential to earnings
reduction in third-party motor policies should the motor tariff be changed to a
RM0.525 exposure. more risk-based regime.
Combined ratio is expected to improve,
albeit at subpar level mainly due to
improved claims (tighter risk management
in selecting more profitable business, spring
cleaning of its business portfolio as well as
focus on growing the non-motor insurance)
and management expense ratios. However,
claims ratio will still be affected by old files
claims settlement.
Less volatility in investments as equity
portfolio is down to only 5% of its total
investment portfolio.

3 MTHS
12 MTHS
Sector Average
2009 +53.2 11.1 n.m 1.5 3.0
2010 +19.9 9.6 n.m 1.4 4.2
2011 +13.1 8.5 n.m 1.3 3.0
31 December
2009(a) 2222.7 118.8 77.2 +68.0 6.9 n.m 1.6 2.0 0.4 +0.4
2010(f) 2460.8 110.6 71.9 (7.0) 7.5 n.m 1.4 2.0 0.4 +19.1
2011(f) 2720.0 132.6 86.2 +19.9 6.2 n.m 1.1 2.0 0.4 +57.6
2012(f) 2933.5 153.5 99.7 +15.8 5.4 n.m 2.9 2.0 0.4
30 June
2009(a)^ 1137.7 57.0 3.8 n.a. 13.7 n.m 2.4 0.0 0.0 (7.1)
2010(f) 1129.4 100.7 6.8 +76.5 7.8 n.m 2.0 0.0 0.0 (22.8)
2011(f) 1216.1 112.9 7.6 +12.1 6.9 n.m 1.5 1.5 2.9 +61.5
2012(f) 1309.6 127.3 8.5 +12.8 6.1 n.m 1.2 1.7 3.3

Insurance (Cont'd)
LPI Capital Even though other general insurers are Fair value is RM16.65 based on 15x FY12/
suffering from high claims ratio, LPI’s claims 10EPS.
Outperform ratio remained well contained given its The anticipated change in insurance tariffs
relatively higher exposure to the fire will benefit the motor segment (around
RM14.38 insurance business, which has low claims 25% of total portfolio) but may potentially
ratio of 20.7%. This could be partly due to also affect the fire portfolio (27%).
its ability to gain captive, high retention and
more profitable residential fire business from
Public Bank (sister company).
The stock does not only offer steady growth
on the back of healthy premium mix that
leads to a balanced expansion, but also
provides attractive dividend payout. Hence
despite being illiquid, the stock is suited for
risk-adverse investors.
MNRB We remain cautious on overseas expansions Our fair value for the stock is RM2.94,
given the volatile claims trend despite strong based on 0.7x FY03/09 NTA.
Market Perform top line growth, which may potentially hurt
its bottom line.
RM2.94 Commencement of re-takaful business and
strong growth from Takaful Ikhlas will
diversify its earnings base and provide
growth.
Prospects for dividend payment look shaky
given its reinsurance subsidiary (which
contributes about 86% of MNRB earnings),
volatile claims ratio and stricter guideline by
the authority on dividend payment under
RBC framework.

3 MTHS
12 MTHS
31 December
2009(a) 738.3 126.1 90.9 +21.0 15.8 n.m 2.2 67.5 4.7 +4.8
2010(f) 874.3 154.0 111.0 +22.2 13.0 n.m 2.1 109.6 7.6 +5.1
2011(f) 1022.0 174.4 125.7 +13.2 11.4 n.m 2.0 124.1 8.6 +45.3
2012(f) 1206.0 206.0 148.5 +18.1 9.7 n.m 1.9 146.5 10.2
31 March
2009(a) 1173.2 26.3 12.3 (84.6) 23.8 n.m 0.7 10.0 3.4 (3.6)
2010(f) 1421.9 63.5 29.8 +>100 9.9 n.m 0.7 4.0 1.4 +6.9
2011(f) 1629.9 73.0 34.3 +15.1 8.6 n.m 0.6 10.0 3.4 +1.7
2012(f) 1864.4 76.0 35.7 +4.0 8.2 n.m 0.6 10.0 3.4

Infrastructure Neutral
Sector Rating : We believe the water sector restructuring is unlikely to materialise any time soon as it now
appears that all three parties (the Federal Government, Selangor state government and
water concessionaires) will be involved, and this may complicate and drag the negotiation
process. Toll concessionaires offer defensive earnings quality and decent dividend yield.
ST: Projecting FY12/10 traffic FY12/10 earnings growth will be supported by traffic
PLUS
volume growth to slow down to 3%, volume growth assumption of 3% for its bread and
Outperform from 7.1% in FY12/09, on the back butter North-South Expressway (NSE).
of: (1) The high base effect; and (2)
RM3.39 Indicative fair value is RM4.13, equivalent to PLUS’s
Potential petrol price hike in
DCF-derived NPV.
2QFY12/10 arising from the
restructuring of the fuel subsidy
scheme (which is likely to have a
negative impact on PLUS’s traffic
volume).
LT: Succeed in overseas expansion.
Puncak Niaga ST: 37% water tariff hike may not FY12/10 earnings to decline on the back of higher
be forth-coming. depreciation and amortisation expenses.
Underperform LT: Restructuring of water/waste Indicative fair value is RM2.55, at a 30% discount to
water sector that may result in the its DCF-derived NPV of RM3.65/share (based on
RM2.63 Government buying out all water/ WACC of 11.5%) to reflect Puncak’s high earnings
waste water concessionaires. and regulatory risks.

3 MTHS
12 MTHS
Sector Average
2009 +20.3 13.6 8.0 2.6 4.7
2010 (1.4) 13.8 8.1 2.4 5.1
2011 +48.2 9.3 6.5 2.2 5.7
31 December
2009(a) 3179.0 1185.1 23.7 +9.8 14.3 9.6 2.8 16.5 4.9 (0.6)
2010(f) 3290.7 1181.9 23.6 (0.3) 14.3 9.9 2.8 18.0 5.3 +2.4
2011(f) 4260.1 1814.5 36.3 +53.5 9.3 7.4 2.5 20.0 5.9 +5.3
2012(f) 4390.5 1846.1 36.9 +1.7 9.2 7.3 2.2 22.0 6.5
31 December
2009(a) 1885.4 142.6 34.7 +>100 7.6 4.5 1.1 6.0 2.3 0.0
2010(f) 2220.9 127.8 31.1 (10.4) 8.5 3.2 0.7 6.0 2.3 (6.4)
2011(f) 2300.8 118.3 28.8 (7.4) 9.1 3.3 0.7 6.0 2.3 (8.7)

Manufacturing Neutral
Sector Rating : We believe the global economic recovery is gaining momentum, although the pace of the
recovery is likely to be uneven. Nevertheless, this should translate into an improvement in
demand for exports in 2010 and generally, should bode well for the manufacturers, in our
view.
Rubber Gloves
Adventa Short-term drivers include: a) resilient demand Future earnings growth hinges on
amidst the recovery in the global economic successful execution of capacity
Outperform situation as gloves have evolved into a necessity expansion plans.
and an essential medical product; and b) potential
Fair value of RM4.34/share is based on
RM3.38 beneficiary from the additional pick-up in demand
target CY10 PER of 13x.
from more H1N1-type flu outbreaks in future.
Longer term, improvement in the capacity
utilisation rate of the Uruguay operations (current
utilisation is approximately 70%) together with
capacity expansion in Malaysia, would help drive
earnings.
Hartalega Short-term drivers include: a) resilient demand Continuous capacity expansion expected
amidst the recovery in the global economic to underpin Hartalega’s 3-year net profit
Market Perform situation as gloves have evolved into a necessity CAGR of 47.3%.
and an essential medical product; and b) potential
Longer term, earnings growth would be driven by
continuous expansion in production capacity
whereby the company is embarking on the
construction of Plant 5. Apart from that, the group
also plans to replace ten old lines in Plant 1 with
six new high capacity lines. In total, Plant 5 and
the upgrade of Plant 1 will raise total capacity to
10bn pieces p.a., from 6.2bn pieces currently.
Kossan Short-term drivers include: a) resilient demand Healthy 3-year core net profit CAGR of
amidst the recovery in the global economic 13.1% mainly driven by capacity
Outperform situation as gloves have evolved into a necessity expansion in the glove manufacturing
and an essential medical product; and b) potential business.
Fair value of RM10.74/share after
ascribing a target CY10 PER of 13x.
Longer-term earnings growth would be driven by
continuous expansion in production capacity. In
total, Kossan’s annual capacity production would
increase to 14.5bn pcs in end-2010 and 18bn pcs
by end-2011.
Top Glove Short-term drivers include: a) resilient demand Continuous capacity expansion expected
amidst the current global economic situation as to underpin Top Glove’s 3-year net profit
Outperform gloves have evolved into a necessity and an CAGR of 21.1%.
essential medical product; and b) potential Fair value of RM15.50/share is based on
RM12.78 beneficiary from the additional pick-up in demand target CY10 PER of 17x.
Longer term, earnings growth would be driven by
continuous expansion in production capacity at F21
by Jul’10 and additional eight new lines at F18. This
will increase Top Glove’s annual production
capacity to 35.3bn pcs by end-FY10 from 33bn pcs
currently.

3 MTHS
12 MTHS
Sector Average
2009 +36.6 16.1 9.8 3.6 2.1
2010 +32.7 12.1 7.6 2.9 3.3
2011 +16.1 10.4 6.4 2.4 3.6
31 October
2009(a) 282.9 31.9 22.0 +>100.0 15.4 11.3 2.7 9.3 2.8 (10.3)
2010(f) 412.4 45.7 31.5 +43.2 10.7 8.8 2.3 12.0 3.6 (2.3)
2011(f) 532.1 62.0 42.8 +35.7 7.9 6.9 1.9 14.7 4.3 +221.9
2012(f) 651.7 75.8 52.2 +22.1 6.5 5.6 1.5 14.7 4.3
31 March
2009(a) 443.2 79.1 32.7 +>100 23.9 16.8 7.4 9.3 1.2 (7.1)
2010(f) 528.8 130.0 53.6 +64.2 14.5 10.7 5.5 18.3 2.3 +6.8
2011(f) 626.0 153.8 63.5 +18.3 12.3 8.8 4.2 23.6 3.0 +146.8
2012(f) 707.8 159.3 65.7 +3.6 11.9 8.0 3.4 26.3 3.4
31 December
2009(a) 837.0 119.8 74.9 +>100 10.5 7.7 3.5 12.0 1.5 (3.1)
2010(f) 1082.9 132.1 82.6 +10.3 9.5 6.4 2.6 10.5 1.3 +27.9
2011(f) 1378.5 164.7 103.0 +24.7 7.6 4.9 2.0 12.5 1.6 +117.5
2012(f) 1508.1 173.1 108.3 +5.1 7.2 4.2 1.57 14.5 1.9
31 August
2009(a) 1529.1 169.1 57.3 +54.2 22.3 12.5 4.8 29.3 2.3 (6.4)
2010(f) 2062.3 262.7 89.0 +55.3 14.4 8.8 4.0 45.3 3.5 +14.9
2011(f) 2342.1 283.8 96.2 +8.1 13.3 7.8 3.4 46.7 3.7 +117.8
2012(f) 2648.1 300.6 101.9 +5.9 12.5 7.1 2.9 50.7 4.0

Note : Stock prices @ 28 October 2009

Manufacturing (Cont'd)
Other
manufacturers
BP Plastics Given that demand for stretch films (which Our fair value for the stock is RM0.80 (8x
are supplied to overseas distributors FY12/10 EPS which is in line with its 3-year
Outperform warehouse and logistics distribution centres) average PE).
is recovering as well as the inelastic demand
for most blown products (which are sold to
RM0.62
packaging converters as well as food and
beverage industries), we believe BPP will
enjoy rising volume ahead. We are
encouraged by its capability in maintaining
higher margins as compared to its peers due
to more efficient cost structure and cost pass
through ability. Its earnings should gain
momentum going forward, underpinned by
the global economic recovery in 2010.
Furniweb Furniweb’s 4Q performance suggests that the We project Furniweb to post FY09-11 net
worst could be over for Furniweb although profit CAGR of 46.1%, driven by the
Outperform we note management’s expectations of a improvement in customers’ confidence as
slow and gradual recovery in orders. the global economic situation recovers.
RM0.45 Furniweb is currently the 2nd largest
manufacturer of furniture webbing in the Fair value of RM0.66/share is based on 8.5x
world and its plan to list in Vietnam will allow CY10 EPS.
the group to gain direct access to the
Vietnamese capital market and to raise funds
for future expansion plans over the longer
term.
VS Industry Given VS’s exposure to the consumer We expect FY07/10 core net profit to jump
electrical and electronic sector, we believe a by 92.2% following a rebound in consumer
Market Perform recovery could be on the cards by year-end. spending and demand for consumer
electronics.
Longer term, we believe Dyson’s shorter
RM1.28
timeframe to launch new products and rising Fair value is RM1.33/share after ascribing a
global market share in the vacuum cleaner target CY10 PER of 7.5x.
industry as well as demand from recently
secured customers should help hold VS in
good stead.
Wellcall Decent 3-year net profit CAGR of 13.0% on

In the short term, demand for industrial
hoses is expected to improve gradually the back of higher capacity, new customers
Underperform and taking market share from competitors.
amidst the improving economic condition.
Longer term, management remains focused Fair value of RM1.14/share is based on
RM1.32
on leveraging on its extensive customer target CY10 PER of 9x.
network, competitive products, quality
services and a wider range of products to
enhance its competitive edge.

3 MTHS
12 MTHS
31 December
2009(a) 175.2 15.6 8.7 +31.9 7.1 3.5 0.8 4.0 6.5 (1.6)
2010(f) 230.6 18.1 10.0 +15.7 6.2 1.9 0.8 4.0 6.5 +8.8
2011(f) 247.8 19.7 10.9 +8.9 5.7 1.3 0.7 4.4 7.1 +63.2
2012(f) 262.4 21.4 11.9 +8.7 5.2 0.8 0.7 4.8 7.7
31 December
2009(a) 80.7 3.7 4.1 (42.4) 10.9 3.9 0.3 0.0 0.0 (1.1)
2010(f) 118.0 7.0 7.7 88.4 5.8 2.2 0.3 0.0 0.0 (3.2)
2011(f) 163.4 9.8 10.8 40.0 4.1 1.9 0.2 0.0 0.0 50.0
2012(f) 181.8 7.0 12.8 18.3 3.5 0.2 0.2 0.0 0.0
31 July
2009(a) 724.8 11.8 6.6 (81.4) 19.3 4.7 0.8 1.7 1.4 (2.3)
2010(f) 789.8 22.7 12.7 +92.2 10.1 4.0 0.8 8.0 6.3 +4.1
2011(f) 872.5 44.4 24.9 +95.5 5.1 3.0 0.7 10.7 8.3 +18.5
2012(f) 972.2 55.4 31.0 +24.6 4.1 2.2 0.7 12.7 9.9
30 September
2009(a) 79.0 13.2 10.2 (24.0) 13.0 7.3 2.1 14.7 11.1 +1.5
2010(f) 96.9 15.7 11.9 +17.3 11.1 5.9 2.1 12.9 9.8 +3.1
2011(f) 114.8 19.1 14.7 +23.7 9.0 4.4 1.9 14.9 11.3 +36.2
2012(f) 132.9 22.6 17.5 +18.4 7.6 3.4 1.8 13.4 10.1
Note
Note :: Stock
Stock prices
prices @
@ 28
28 October 2009
April 2010

Media Neutral
Sector Rating : 2010 would be a relatively better year for ad spending, which would also be supported by
sporting events such as the 2010 FIFA World Cup, 2010 Thomas/Uber Cup Finals and the
Commonwealth Games. Meanwhile newsprint prices have been rather stable, but we expect
prices to creep up as economic conditions improve further. Nevertheless, companies that
have stocked-up on newsprint over the past few months should enjoy the benefits of lower
cost in the coming months.
Astro We believe the privatisation offer appears fair Domestic operations expected to drive
given that the significant premium over our FY01/10-12 earnings, dragged by start-up
Market Perform fair value was largely due to the valuation losses from its Indian operations.
accorded to Astro’s overseas investments.
RM4.24 Fair value of RM4.30 is based on Astro
These investments are generally loss-making
Holding’s offer price to privatise Astro.
and with the privatisation exercise, this would
allow the value of the overseas investments
to be unlocked immediately.
In the longer term, Astro’s next generation
services would require additional spending on
capex and opex. Content cost could be on the
rise due to a combination of: 1) HD content;
2) new BPL contract kicking-in; and 3) 2010
being a high sporting event year.
MCIL We see continued recovery in ad spending in Earnings growth is expected to be driven by

tandem with improving macroeconomic the Malaysian operations.
conditions and key sporting events taking
Outperform place this year. Lower newsprint cost and tight
cost-control measures should help as well.
RM0.83 Longer term, management plans to enlarge
the group’s footprint in Mainland China and to
expand into the digital/multimedia business.
Media Prima We like Media Prima for its high leverage to We expect FY10 core EPS growth of 136.4%
ad spending as well as its fixed cost structure due to a combination of: 1) a recovery in
Outperform as this means that the bulk of the stronger ad revenue for the TV division; 2) higher
revenue would flow straight down to contribution from NSTP due to strong
RM2.25 bottomline. The take-over offer for NSTP has earnings growth and a higher equity stake
also been a success, in our view, and would that Media Prima now has in NSTP; and 3)
help the group plug earnings leakages and maiden contribution from the recent
give it control over NSTP’s strong cash flow outdoor acquisitions.
ahead.
Fair value of RM2.55/share is based target
Other re-rating catalysts include adex growth CY10 PER of 15x.
(especially the TV segment) turning out
stronger than expected, the realisation of
merger synergies and a potential re-rating in
valuations that the enlarged group could
command.
Star While Star would benefit from a potential We expect a recovery in FY10 earnings (net
pick-up in adex in 2010, we think its results profit +22% yoy) mainly stemming from a
Market Perform would continue to be dragged by its high-cost recovery in ad revenue.
newsprint stock, which we estimate would last Fair value of RM3.60/share is based on 16x
RM3.34 until end-1H2010. FY12/10 EPS.
Star’s circulation figures have also been on
the decline, and in order to address this, Star
has already started a Sarawak Edition. Other
longer-term measures include widening its
media platform such as tapping the internet
space and introducing its new weekly Malay
newspaper.

3 MTHS
12 MTHS
Sector Average
2009 (10.1) 18.3 10.1 10.1 5.0
2010 +42.9 12.8 6.7 2.1 4.2
2011 +7.2 12.0 6.0 1.9 4.4
31 January
2009(a) 2971.5 (445.5) (27.4) (>100) n.m. n.m 22.8 13.3 3.1 0.0
2010(f) 3258.3 193.0 12.0 +>100 35.2 11.8 17.7 16.7 3.9 +32.5
2011(f) 3535.8 142.3 7.4 (38.9) 57.6 12.9 20.2 14.0 3.3 +70.3
2012(f) 3811.7 224.5 11.6 +57.7 36.5 10.9 17.3 14.7 3.5
31 March
2009(a) 1437.8 75.1 4.5 (15.2) 18.5 7.2 1.8 2.8 3.4 +5.8
2010(f) 1345.5 123.6 7.3 +64.7 11.3 5.5 1.6 3.6 4.3 +55.7
2011(f) 1379.9 147.6 8.8 +19.4 9.4 4.2 1.4 4.5 5.5 (40.5)
2012(f) 1410.3 141.6 8.4 (4.1) 9.8 3.7 1.3 4.2 5.1
Issued capital of 1,686.2m ordinary shares of HK0.10 each
31 December
2009(a) 744.0 73.8 6.9 (50.4) 32.6 24.2 3.8 7.5 3.3 +6.6
2010(f) 1465.5 174.5 16.3 +>100 13.8 7.8 3.1 10.0 4.4 +27.8
2011(f) 1545.0 192.2 18.0 +10.1 12.5 7.0 2.6 11.3 5.0 +92.4
2012(f) 1607.3 222.1 20.8 +15.6 10.8 6.0 2.2 12.5 5.6

31 December
2009(a) 974.4 144.6 19.6 (11.4) 17.1 7.5 2.1 23.0 6.9 (2.3)
2010(f) 1006.1 166.9 22.6 +15.4 14.8 7.3 2.0 20.8 6.2 +5.6
2011(f) 1048.0 190.2 25.8 +14.0 13.0 6.4 1.9 22.5 6.7 +6.9
2012(f) 1083.0 199.1 27.0 +4.7 12.4 5.8 1.8 24.8 7.4

Motor Overweight
Sector Rating : Malaysia’s automotive industry TIV in Mar 10 has hit a 53-month high since Oct 05 with an
increase by 25.0% yoy (vs. +8.7% yoy in Feb 10) suggesting that the sector is poised to
register a stronger growth in 2010. We believe the stronger growth 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. 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% for now in 2011. We believe there is potential upside to our 2010-11 TIV
projections given stronger-than-expected car sales arising from higher business spending, new
model launches as well as favourable foreign currency impact due to the strengthening of the
RM against US$ and Yen.
MBM More promising FY10 revenue on the back Indicative fair value is RM5.04 based on 11x
Resources of: 1) Improved sales outlook, with orders FY10 EPS.
from all brands picking up; and 2) New We believe there is upside to our FY10-12
Outperform models launch in 2H09 (Volvo S40 2.0 in earnings projections from higher unit car sales
Sept 09 and Perodua MPV in Nov 09) to and associate contributions on the back of
RM2.82 spur demand into 2010. improved sentiment as well as stronger-than-
Going forward, we expect Volvo sales to expected unit sales of Perodua MPV.
improve, backed by: 1) new models; 2)
Volvo new sales strategies; and 3)
premium brand vehicles to benefit from
improving sentiment and economic
recovery as consumers switched from
economical to premium vehicles.
We expect earnings to rebound strongly in
FY10 as the Ringgit strengthens against the
Yen. For every 1% change in the Yen, our
FY10 EPS would change by 3%.
Proton We expect to see more developments on We use a stripped down book value to better
the strategic front after the NAP to ensure reflect its value in view of Proton’s sub-par
Outperform the Group’s long-term survival. The next profitability.
possible steps could be: 1) consolidating
Based on its 3QFY03/09 assets position and on
RM4.84 two existing plants into one; and/or 2)
the assumption of stripped down book value,
securing contract manufacturing to
Proton’s indicative fair value is RM5.48.
optimise plants utilisation that will further
improve profitability via better cost control
and economies of scale.

3 MTHS
12 MTHS
Sector Average
2009 (9.5) 16.0 8.8 1.3 2.2
2010 +51.5 10.7 7.0 1.2 2.8
2011 +10.2 9.7 6.7 1.0 3.1
31 December
2009(a) 1187.2 68.3 28.2 (41.7) 10.2 25.7 0.8 9.0 3.2 +4.8
2010(f) 1404.9 111.6 46.1 +63.3 6.2 14.2 0.7 12.0 4.3 +7.6
2011(f) 1555.1 129.4 53.4 +16.0 5.4 14.2 0.7 12.0 4.3 +24.8
2012(f) 1674.0 136.8 56.1 +5.7 5.1 10.5 0.6 12.0 4.3
31 March
2009(a) 6486.6 40.0 7.3 +98.1 66.5 n.m 0.6 5.0 1.0 +1.5
2010(f) 6984.8 257.8 46.9 +>100 10.3 8.5 0.5 0.0 0.0 +23.8
2011(f) 7611.0 358.4 65.3 +39.0 7.4 7.8 0.5 0.0 0.0 +66.9
2012(f) 7839.4 385.4 70.2 +7.5 6.9 7.5 0.5 0.0 0.0

Motor (Cont'd)
Tan Chong TCM has entered into two separate SOP-derived fair value is RM5.26 based on 14x
distribution agreements with Nissan for FY10 target motor division PER and surplus of
Outperform the sole and exclusive rights to Segambut land revaluation of RM400m. We
distribute Nissan’s CBU vehicles in highlight potential re-rating catalysts which
RM4.66 Cambodia and Laos. This is expected include: 1) higher-than-expected sales of its A
to take place in 2Q10 with an initial and B segment cars; and 2) earlier-than-
sales volume of 200 units each. We see expected earnings contribution from its regional
this as a positive step taken by TCM to expansion.
tap into the growing ASEAN market.
We are expecting more deals to come
between TCM and Nissan given the
long-standing business relationships
between both companies.
Going forward, it plans to launch more
cars in the under-represented
segments i.e. segment A, B and D.
Ongoing launches to replace old
models are crucial to sustain and
create new demand. It plans to
introduce a model in the D-segment
sometimes late this year, which will
allow more room to grow.
We expect earnings to rebound
strongly in FY10 as the Ringgit
strengthens against the Yen. Every 1%
change in the Yen and US$ exchange
rates vs. RM results in 1.5% and 7.2%
adjustment to our FY10 EPS forecasts
respectively.
UMW Automotive division: We reiterate SOP-derived fair value is RM7.52 based on 16x
that the quality issues affecting Toyota FY10 target motor division PER as we applied a
Outperform cars are limited to US and Europe premium to the sector benchmark in view of its
given that auto part models in this strong branding in the sector. Target PERs for oil
RM6.38 region are sourced from different and gas, heavy equipment and manufacturing are
suppliers. We expect brighter prospects 16x, 8x and 7x respectively.
for Toyota as it will benefit from
improving sentiment and affordability
on the back of economic recovery,
where preference towards premium
products will start to improve.
We would also like to highlight that the
current strengthening of the RM which
has appreciated by 7% against the
greenback will likely lower the
imported CKD kits costs given foreign
part estimates of 60%-70% for Toyota.
Every 1% change in the Yen and US$
exchange rates vs. RM results in 0.3%
and 5.8% adjustment to our FY10 EPS
forecasts respectively.
O&G division: We expect increased
contract flows ahead in 2H 2010 driven
mainly by: 1) stronger exploration
activities; and 2) revival of deepwater
projects on the back of rising trend of
crude oil prices over the longer term.

3 MTHS
12 MTHS
31 December
2009(a) 2856.9 152.3 22.7 (24.9) 20.6 13.5 2.2 9.0 1.9 +24.9
2010(f) 3708.3 262.0 39.0 +72.0 12.0 8.8 1.9 11.4 2.4 +47.9
2011(f) 4114.7 304.5 45.3 +16.2 10.3 7.7 1.7 12.0 2.6 +221.4
2012(f) 5598.5 452.4 67.3 +48.6 6.9 5.4 1.4 13.0 2.8
31 December
2009(a) 10697.9 371.1 33.6 (35.8) 19.0 7.4 2.0 20.0 3.1 +1.1
2010(f) 10670.5 621.9 52.6 +56.4 12.1 5.8 2.0 23.5 3.7 +2.1
2011(f) 11062.4 672.1 53.8 +2.3 11.9 5.6 1.8 24.5 3.8 +13.9
2012(f) 11982.5 752.1 60.2 +11.9 10.6 4.9 1.6 25.5 4.0

Oil & Gas Overweight
Sector Rating : While sizeable contract flows appeared to be minimal in 1Q 2010, we believe contracts will
likely flow more substantially in 2H 2010 given the gradual pick up in energy demand as
well as increased reserve replenishment activities by national oil companies and major E&P
players. In the longer term, we reiterate our view that the continued shortage of offshore
E&P assets (exacerbated by delays in E&P spending) will underpin the growth for the support
services companies.
Dialog Medium term, pick-up in plant We highlight potential stronger earnings

maintenance services amidst increasing growth in FY11-12 arising from expansion of
Outperform number of petrochemical plants in Middle TLP and EPCC jobs as well as sizeable
East will help partly offset lower E&C catalyst handling projects. Furthermore, we
contribution. continue to like the company’s conservative
RM1.10
Longer term, Dialog is focused on more and asset-light strategy driven by strong
recurrent and higher-margin specialist management.
services in plant maintenance, catalyst Fair value of RM1.29 is based on SOP, and
handling and tankage. applying 16x target PER on CY10 operating
earnings, at a premium to the sector.
EPIC The company has hinted that it would be Flat earnings growth for FY12/10-11 due to
keen to acquire West Wharf from IJM to concession-based earnings from KSB.Fair
Outperform expand its KSB business. We estimate value of RM2.69 is based on 10x FY10 EPS, at
FY10-11 revenue to be boosted by 12- a discount to our target for the sector of 13x.
RM1.59 15% respectively if this happens.
Longer-term earnings growth would likely
be driven by KSB expansion (with Phase
3 completing end 2QFY10).
Kencana Given the orderbook replenishment of Our forecasts indicate net profit growth of
Petroleum around RM1-1.2bn by 4Q 2010 and burn- 35% and 12% for FY10 and FY11 respectively
rate of around RM300m/quarter, we driven mainly by: 1) RM1.0-1.3bn new orders
Outperform expect Kencana’s orderbook to remain per annum flowing in the next 24 months to
above RM1.9bn going into 2011. Kencana replenish existing ones; and 2) margin
RM1.56 is currently tendering another RM4bn expansion with EBITDA margin rising from
worth of orders, which include fabrication 15.3% in FY09 to 15.6% in FY10-11 and
contracts in Malaysia and overseas. With 16.2% in FY12, mainly due to higher-margin
the upgrade in the Lumut yard (i.e. product mix. We believe there would be
tonnage handling capability increased to upside to our assumption of RM1-1.3bn of
30,000 tonnes from 20,000 tonnes new orders per annum flowing in over the
previously) nearing completion, we next 24 months given current orderbook
believe Kencana stands a good chance of replenishment rate of RM126m/month since
securing higher-margin deepwater jobs. Jun 09.
Longer term, earnings growth would be Fair value of RM1.88 is based on 16x FY11
driven by higher recurrent earnings (i.e. EPS, at a premium to the sector.
drilling services and chartering of
offshore marine support vessels) as well
as margin expansion (i.e. higher-margin
fabrication of drilling rigs and subsea
equipment). Furthermore, with Kencana
likely to buy 45% of Global Offshore and
its vessel (a derrick lay barge) we
believe this would help diversify its
earnings going forward.
KNM While concerns on KNM’s ability to secure We believe there is upside to FY10-11
enough new jobs for FY10 would linger, earnings given stronger demand for higher-
Underperform we highlight that things are turning more end process equipment stemming from the
positive for investments into non- recovery of oil price to above US$80/barrel,
RM0.51 conventional oil sand projects in Canada. which would revive more non-conventional oil
With crude oil price expected to trend sands projects. Fair value of RM0.51/share is
higher, we believe higher E&P activities based on 13x FY10 EPS in line with our 1-year
would likely increase demand for process forward target PER for the sector.
equipment over the longer term.

3 MTHS
12 MTHS
Sector Average
2009 (7.0) 19.0 9.4 3.0 4.3
2010 +24.2 15.0 7.7 2.9 4.9
2011 +14.1 13.2 6.7 2.7 5.1
30 June
2009(a) 1104.3 92.2 6.6 +22.0 16.7 14.1 3.6 3.6 3.3 (0.9)
2010(f) 1114.5 126.0 6.4 (3.4) 17.3 11.8 4.3 3.5 3.2 +12.4
2011(f) 1314.8 183.2 9.3 +45.4 11.9 6.5 3.6 5.1 4.6 +45.4
2012(f) 1490.6 223.0 11.3 +21.7 9.8 4.6 2.9 6.2 5.6
31 December
2009(a) 184.0 42.3 24.9 +81.0 6.4 4.3 0.9 8.7 5.5 (1.9)
2010(f) 222.7 45.6 26.9 +7.9 5.9 4.8 0.8 9.4 5.9 +3.2
2011(f) 232.9 46.1 27.2 +1.1 5.8 4.0 0.7 9.5 6.0 +20.5
2012(f) 271.5 50.8 30.0 +10.1 5.3 3.2 0.7 10.5 6.6
31 July
2009(a) 1140.8 118.2 7.1 (24.3) 21.9 13.0 5.0 0.5 0.3 (1.3)
2010(f) 1458.8 169.0 10.2 +42.9 15.3 8.9 3.0 0.7 0.5 0.0
2011(f) 1632.6 194.4 11.7 +15.0 13.3 7.4 2.4 0.8 0.5 +61.2
2012(f) 1750.0 214.3 12.9 +10.2 12.1 6.0 1.9 0.9 0.6
31 December
2009(a) 2469.6 150.7 3.8 (55.2) 13.5 12.4 19.3 2.0 3.9 (29.7)
2010(f) 2400.3 157.2 3.9 +4.2 13.0 9.7 10.1 2.0 3.9 (30.6)
2011(f) 2710.8 275.9 6.9 +75.5 7.4 6.6 4.9 2.0 3.9 (4.7)
2012(f) 3403.0 387.9 9.7 +40.6 5.3 4.8 2.7 2.0 3.9

Oil & Gas (Cont'd)
Petra Perdana We have highlighted that although 50% of the We believe the business has suffered with
vessels demand arising from the replacement potential loss of contracts to competitors
Underperform market is holding up, demand stemming from during the management tussle, and the
newer requirement appears to remain weak reinstated management may need the
RM1.47 (despite crude oil price having stabilised above whole of FY10 to get things back on track.
US$70/barrel). We highlight that we have forecast
Further out, we believe charter rates would significant earnings recovery in FY11, but in
trend upwards as we expect the vessel the absence of better numbers from Petra
shortage to persist beyond the near-term Energy, we are still looking at a core net
slowdown, and especially for vessels in the profit that is lower than that of FY08.
larger range as new deepwater fields are Fair value of RM1.00 is based on 13x FY10
opened up. EPS in line with our 1-year forward target
PER for the sector.
Petronas Gas We believe the key driver for the revised GPTA Notwithstanding lower throughput
is to tap into the growth potential of the gas processing fees for the domestic operations
Market Perform transportation business arising from higher arising from ‘lean’ fields, we believe
demand for processed gas transmission (vs. Petronas Gas still enjoys relatively secure
RM9.95 unprocessed gas from offshore Peninsular earnings, guaranteed by the Reservation
Malaysia) over the long term. Growth mainly Charge, and this will also underpin dividend
driven by utilities sales; throughput services payouts.
capped by gas processing volumes.
Fair value of RM10.51 is based on DCF
In the absence of earnings catalysts from new (WACC of 10.1%).
projects, the share price will likely be
supported by stable annual operating cashflow
of RM1.7bn and decent annual dividend yield of
5-6%.
SapuraCrest SapuraCrest’s current effective orderbook now FY01/10-11 margins are expected to be
stands at RM7.4bn. In addition, the more stable due to fuel and weather-related
Market Perform Sapura3000 DP2 and two Indian vessels (to be cost pass-through clauses for Petronas
delivered in 1Q10) should have positive impact Carigali contract. Moreover, the company
RM2.34 on IPF margins. expects operating margin of 8-10% from
Shell Gumusut Kakap contract as the
With crude oil price expected to trend higher contract price has factored in operating cost
over the longer term, we believe the opening based on crude oil price above US$100/
up of more deepwater fields would likely barrel. Sapura3000 and the addition of two
increase demand for such vessels, thus Indian vessels will also help the company
boosting its charter rate going forward. control its vessel charter costs.
We also view Seadrill Norway’s 23.6% stake Fair value of RM2.66 is based on 16x FY11
positively. EPS, at a premium to the sector.
Wah Seong In our view, demand for pipe-coating services We highlight that Wah Seong’s FY10-12
would likely pick up as more conventional E&P overseas earnings contribution would rise
Outperform projects begin to flow again given that crude oil on the heels of geographical expansion
price has stabilised above US$70/barrel. We coupled with the less fragmented market
RM2.52 believe the company’s pipe-coating pre-tax for deepwater pipe-coating going forward.
margin of 9-10% is sustainable given lower Note that we have not factored in potential
raw material cost and its flexibility and earnings contribution from other overseas
experience to offer new solutions to the project pipeline contracts. Our sensitivity analysis
owner.Longer term, we are positive on the shows that FY10-12 FD EPS would be
company’s M&A strategy given that it would boosted by 8.7-9.5% and 17.4-19.8%
enable the company to bid for more high- respectively if the company were to secure
margin deepwater jobs arising from the RM0.5-1bn/year of new contracts.
Deepwater Golden Triangle (i.e. Gulf of Mexico,
Brazil and West Africa). Fair value of RM3.09 is based on 16x FY10
Longer term, we are positive on the company’s EPS, at a premium to the sector.
M&A strategy given that it would enable the
company to bid for more high-margin
deepwater jobs arising from the Deepwater
Golden Triangle (i.e. Gulf of Mexico, Brazil and
West Africa).

3 MTHS
12 MTHS
31 December
2009(a) 605.7 29.3 9.8 (53.1) 15.0 4.9 0.9 2.0 1.4 +7.3
2010(f) 305.9 23.8 8.0 (18.5) 18.4 5.2 0.8 2.0 1.4 +3.5
2011(f) 369.1 50.9 17.1 +>100.0 8.6 3.7 0.8 2.0 1.4 (14.5)
2012(f) 392.4 75.0 25.2 +47.3 5.8 2.1 0.7 2.0 1.4
31 March
2009(a) 3415.1 928.0 46.9 (15.1) 21.2 9.9 3.0 50.0 5.0 +2.2
2010(f) 3297.1 923.6 46.7 (0.5) 21.3 10.0 3.0 49.8 5.0 +1.8
2011(f) 3267.9 1210.2 61.2 +31.0 16.3 8.2 3.1 65.2 6.6 +3.1
2012(f) 3305.8 1244.4 62.9 +2.8 15.8 8.0 3.1 67.1 6.7
31 January (Fully Diluted)

2009(a) 3483.8 115.7 8.4 +47.2 27.9 8.5 2.9 3.0 1.3 (2.1)
2010(f) 3713.4 164.0 11.8 +40.8 19.8 7.4 2.5 4.0 1.7 +0.9
2011(f) 4829.8 231.0 16.6 +40.9 14.1 5.3 2.0 4.0 1.7 +122.9
2012(f) 5403.1 254.8 18.4 +10.3 12.7 4.4 1.7 4.0 1.7
31 December (Fully Diluted)

2009(a) 1950.3 121.3 13.2 +30.8 19.1 7.1 3.9 7.5 3.0 (5.3)
2010(f) 2462.8 177.9 19.3 +46.1 13.1 5.4 3.0 7.6 3.0 +9.5
2011(f) 2715.8 192.2 20.8 +8.0 12.1 5.1 2.4 8.3 3.3 +53.1
2012(f) 2425.7 176.7 19.2 (8.0) 13.2 6.0 2.0 7.6 3.0

Plantations Overweight
Sector Rating : We believe that the basic supply and demand fundamentals of the 17 oils & fats and of CPO
continue to be positive and would help support CPO prices at a price range of RM2,300-
2,800/tonne over the short to medium term. Although based on our CPO price range
expectations, there does not seem to be that much more upside (possibly another 5-10%)
to CPO prices, we believe that in the current market environment, where volatility in external
factors like crude oil prices, exchange rates and financial commodity demand is the norm,
CPO prices could undershoot or overshoot our projected price range. As such, although CPO
prices could potentially hit the RM3,000/tonne mark again, we believe this may not be a
sustainable price target in the medium term, due to the demand reallocation which would
occur in price-sensitive markets like China and India which would then “re-balance” prices.
In the long term, we believe CPO prices would stay above RM2,000/tonne due to structural
changes. We believe the risk of external factors like the volatilities of crude oil prices,
exchange rates and financial commodity demand, as well as weather uncertainties would
continue to be the wild card affecting CPO and vegetable oil prices in the future. We maintain
our CPO price assumptions at RM2,500/tonne for 2010, RM2,700/tonne for 2011 and
RM2,500/tonne for 2012. In view of the many external factors and potential volatilities they
bring, we continue to advise investors to keep to the more liquid stocks and to trade the
volatilities.
CBIP We believe CBIP has a large captive market Our sum-of-parts (SOP) based target price
in the domestic palm oil mill industry in of RM3.60/share is based on its fully diluted
Outperform Malaysia and a growing international (post 10%-share placement) share base,
customer base for its repair and maintenance attributes a target PER of 8x CY10 for its oil
RM2.67 services and spare part products as well as mill manufacturing and servicing division
for its mill building capabilities. Higher CPO and a target PER of 14x CY10 earnings for
prices would also add to earnings, as its plantation division, given its small-cap
earnings contribution from the plantation status and landbank size.
division is expected to rise to close to 35% of
earnings in FY10 (from about 25% in FY08).
Genting Genting Plantations, being mainly a pure We estimate every RM100/tonne change in
Plantations upstream cost-efficient plantations player, will CPO price would change Genting
benefit from an upward trend in CPO prices, Plantations’ earnings by 5-7% p.a..
Underperform especially given its mostly spot CPO sales Our fair value of RM6.65/share is based on
policy. CY10 target PER of 16x, which is at a 2x
RM6.75 Our CPO price assumptions are RM2,500 for discount to benchmark sector PER, given its
FY12/10 and RM2,700 for FY12/11. mid-cap status and landbank size.
Valuations appear stretched at current
levels.
IJM Plantations IJMP, being a pure upstream cost-efficient We estimate every RM100/tonne change in
plantations player, will benefit from an CPO price would change IJMP’s earnings by
Underperform uptrend in CPO prices. 5-7% p.a..
Our CPO price assumptions are RM2,200/ Our fair value of RM2.35/share is based on
RM2.52
tonne for FY03/10, RM2,550 for FY03/11 and CY10 target PER of 16x, which is at a 2x
RM2,650 for FY03/11. discount to benchmark sector PER, given its
However, earnings dilution of an estimated mid-cap status and landbank size.
30-35% as a result of the recent 2-for-8 Valuations appear stretched at current
rights issue with free warrants would be a levels.
dampener for the medium term, given that
returns from the utilisation of the rights
proceeds (for planting up of its Indonesian
plantation land) would only kick in from FY03/
13-14 onwards..

3 MTHS
12 MTHS
Sector Average
2009 -27.4 20.9 13.9 2.8 2.0
2010 +1.8 20.2 12.6 2.7 2.4
2011 +21.9 16.6 10.6 2.5 3.1
31 December
2009(a) 334.8 41.3 30.0 (32.0) 8.9 7.5 1.6 10.0 3.7 (8.9)
2010(f) 463.5 61.3 41.2 +37.5 6.5 5.8 1.3 14.0 5.2 (7.9)
2011(f) 523.9 74.0 49.7 +20.6 5.4 5.1 1.1 17.0 6.4 +16.1
2012(f) 553.5 77.6 52.2 +4.9 5.1 4.3 1.0 18.0 6.7
31 December
2009(a) 755.6 227.8 30.1 (39.0) 22.4 15.4 2.0 9.0 1.3 (3.0)
2010(f) 1036.1 305.1 40.3 +34.0 16.7 12.0 1.8 11.0 1.6 +11.6
2011(f) 1204.3 353.9 46.8 +16.0 14.4 10.2 1.7 13.0 1.9 +40.6
2012(f) 1218.8 308.6 40.8 (12.8) 16.6 11.4 1.5 11.0 1.6
31 March
2009(a) 491.6 123.2 19.2 (19.2) 13.1 8.7 1.9 8.0 3.2 (0.4)
2010(f) 420.2 90.2 10.2 (46.8) 24.6 10.5 1.8 4.0 1.6 +5.0
2011(f) 506.3 121.6 13.8 +34.8 18.3 10.3 1.7 5.0 2.0 +11.9
2012(f) 566.5 140.3 15.9 +15.4 15.8 9.5 1.6 6.5 2.6

Plantations (Cont'd)
IOI Corporation IOIC, being one of the most efficient We estimate every RM100/tonne change in
plantation players in Malaysia, will CPO price would change IOIC’s earnings
Outperform benefit from a rising CPO price by 3-5% p.a..
environment, although the
We use SOP to arrive at our RM6.65 fair
RM5.43 manufacturing and property divisions
value for IOIC. This is based on a target
still contribute about 30% to group
PE of 18x CY10 earnings for the plantation
earnings.
division (in line with benchmark sector
Our CPO price assumptions are PER), 13.5x CY10 for the property
RM2,450/tonne for FY06/10, RM2,600 development and investment property
for FY06/11 and RM2,500 for FY06/12. divisions and 12.5x CY10 for the
Earnings dilution of 5-6% from its manufacturing division.
recently announced 1-for-15 rights
issue is relatively insignificant, given
that IOIC should be able to gain from
the utilisation of the rights proceeds n
the form of lower financing costs and
higher profit contributions from its
expanded refinery capacity in
Rotterdam.
KL Kepong Although KLK’s earnings portfolio is We estimate every RM100/tonne change in

diversified, plantations still contributes CPO price would change KLK’s earnings by
Outperform the majority (80-85%) of group 4-6% p.a..
earnings, which means it will benefit Our SOP-based fair value is RM18.40. This
RM16.66 from a rising CPO price environment. is based on target PERs of 18x CY10
Our CPO price assumptions are earnings for the plantation division (in line
RM2,500 for FY09/10, RM2,650 for with benchmark sector PER), 12.5x CY10
FY09/11 and RM2,500 for FY09/12. for the manufacturing division, 13.5x CY10
for the property division and a negative
asset value for the retail division (zero
asset value less potential asset write-down
value).
Sime Darby Although Sime Darby’s earnings We estimate every RM100/tonne change in
portfolio is diversified, plantations still CPO price would change SD’s earnings by
Outperform contributes the majority (65-75%) of 4-6% p.a.. Our SOP-based RM9.70 fair
group earnings, which means it will value for Sime Darby is obtained after
RM8.76 benefit from a rising CPO price attributing an 18x average CY10 PER for
environment, especially given its the plantation earnings (in line with
current mostly spot CPO sales policy. benchmark sector PER), 14x CY10 PER for
the heavy equipment, motor, property and
Our CPO price assumptions are
other small divisions and 16x CY10 for the
RM2,450/tonne for FY06/10, RM2,600
energy & utilities division, and after
for FY06/11 and RM2,500 for FY06/12.
applying a 10% holding company discount
to its SOP.

3 MTHS
12 MTHS
30 June
2009(a) 14600.5 1897.7 32.1 (0.1) 16.9 13.6 4.1 8.0 1.5 +0.6
2010(f) 12102.0 1779.2 27.9 (13.0) 19.5 13.3 3.9 12.0 2.2 +5.4
2011(f) 13416.3 2010.1 31.5 +13.0 17.2 12.0 3.5 13.5 2.5 +36.5
2012(f) 15327.6 2071.5 32.5 +3.1 16.7 11.7 3.1 15.0 2.8
30 September
2009(a) 6658.3 753.8 70.8 (33.3) 23.5 15.0 3.1 40.0 2.4 +1.3
2010(f) 7687.6 934.5 87.5 +23.7 19.0 11.7 3.1 45.0 2.7 +0.6
2011(f) 8910.5 1315.9 123.3 +40.8 13.5 8.7 2.8 65.0 3.9 +47.4
2012(f) 8967.4 1378.3 129.1 +4.7 12.9 8.2 2.8 70.0 4.2
30 June
2009(a) 31013.9 2255.2 37.5 (38.1) 23.3 13.9 2.5 20.3 2.3 +0.7
2010(f) 31855.9 2377.5 39.6 +5.4 22.1 12.7 2.3 22.0 2.5 +2.7
2011(f) 35294.9 2904.6 48.3 +22.2 18.1 10.8 2.2 29.0 3.3 +36.9
2012(f) 39784.0 3056.2 50.9 +5.2 17.2 10.3 2.1 34.0 3.9

Power Overweight
Sector Rating : Jan-Mar ’10 electricity demand growth was an impressive +15.3% yoy, which helps reinforce
our view that the sector and, specifically, TNB, is an excellent proxy to a recovering
economy. Separately, plans to import electricity from Sarawak increasingly do not appear
likely to materialise given that the state needs power to develop SCORE. Hence, alternative
plans would now need to be considered. In total, TNB estimates that another 6,000MW would
be required. Potentially, this could be a positive for TNB as the planting up of new capacity
in Peninsular Malaysia could help ease concerns regarding the undersea cables project (e.g.
cost). As for the IPPs, another 4,000MW in capacity would be required (assuming the
planned 2,000MW expansion at Manjung goes through) and this could provide opportunities
for the IPPs to expand their domestic portfolio. In addition, the shortage in capacity could
strengthen the case for an extension of the 1st generation PPAs.
Tanjong Diversified earnings base and overseas Low single-digit earnings growth
businesses should help cushion the impact of projected but dividends should remain
Market Perform domestic power policy changes, if any. attractive (gross DPS of at least RM1).
The next leg of growth would depend on SOP fair value of RM19.20/share includes
RM17.46
acquisitions. Management had previously DCF for power and 15x FY11 PER for
expressed a target of doubling its current gaming. Our SOP valuation does not
power capacity to 8,000MW over the next four reflect any potential new power projects,
to five years, with particular focus in regions which we believe would be value
such as Middle East-North Africa (MENA) accretive. Hence, we see upside potential
region, India sub-continent and Southeast Asia. to our fair value if Tanjong is successful
We believe Tanjong stands a strong chance in with its bids.
securing some of the new power projects in
countries such as Bangladesh, Egypt and UAE,
given their existing presence in these places.
Tenaga Nasional YTD (Sep ’09-Mar’10) unit sales growth has We project TNB to post 3-year core net
been strong (+8.5% yoy). Consequently, profit CAGR of 23%, driven by a recovery
Outperform management upped their FY10 demand growth in economic conditions.
guidance to 7-8% (previously 2-3%). This,
We estimate a fair value of RM10.40/
RM8.48 however, would partly be tempered by higher
share based on target CY10 PER of 14x.
coal cost, where guidance for FY10 average
coal cost was also raised to US$90/tonne (from
US$85/tonne).
Longer term, a fuel cost pass-through formula
would help TNB address the issue of fluctuating
fuel prices. While positive, if approved, we
highlight that it is not likely to be viewed as an
earnings catalyst as an informal fuel cost pass-
through mechanism already appears to be in
place and effective for the last two fuel cost
adjustments.
YTL Power We think the market would be watching YTLP’s While Wessex Water will continue to be
WiMAX rollout (expected 2H2010) and strategy the largest earnings contributor to the
Market Perform closely. A potential concern here is that YTLP group’s earnings, growth could be
could decide to start a price war in order to win tempered by the depreciation of GBP vs.
RM2.19 subscribers, especially given that it would be RM.
coming into the market with a largely unutilised Fair value of RM2.12/share based on SOP
network. For now, management’s reassurance (EV/RCV of 1.1x for Wessex Water, WACC
regarding dividends means that a key of 6.3% for power and investment cost
investment thesis for the stock remains intact, for PowerSeraya) further supported by
i.e. attractive dividend yields.
gross dividend yields of around 9% p.a.
Longer-term growth will be dependent on the
company’s bids for overseas power and/or
water distribution projects.

3 MTHS
12 MTHS
Sector Average
2009 (8.3) 15.1 8.8 1.6 3.9

2010 +31.0 11.5 7.6 1.4 5.0
2011 +10.0 10.4 7.1 1.3 5.3
31 January
2010(a) 5219.9 676.8 165.1 +26.4 10.6 7.1 1.9 100.0 5.7 (3.0)
2011(f) 5325.4 693.1 171.9 +4.1 10.2 6.9 1.7 102.0 5.8 +0.6
2012(f) 5403.7 707.8 175.5 +2.1 9.9 6.5 1.6 104.0 6.0 +25.6
2013(f) 5474.0 712.3 176.6 +0.6 9.9 6.2 1.4 106.0 6.1
Issued capital of 403.3m ordinary shares of 7.5 pence each
31 August
2009(a) 28785.6 2157.1 49.8 (7.4) 17.0 8.1 1.4 17.8 2.1 +5.7
2010(f) 29857.6 3062.9 70.7 +42.0 12.0 7.2 1.3 28.3 3.3 +6.3
2011(f) 31264.7 3505.5 80.9 +14.4 10.5 6.5 1.2 32.4 3.8 +19.4
2012(f) 32742.0 3999.8 92.3 +14.1 9.2 5.9 1.1 36.9 4.4
30 June (Fully Diluted)

2009(a) 6093.4 882.0 11.5 (12.3) 19.0 12.0 1.9 17.5 8.0 0.0
2010(f) 10771.3 1186.3 14.3 +24.1 15.3 8.9 1.8 20.0 9.1 0.0
2011(f) 10997.1 1221.2 14.7 +2.8 14.9 8.9 1.9 20.0 9.1 +7.9
2012(f) 11270.1 1264.8 15.2 +3.4 14.4 8.7 1.8 20.0 9.1

Property Overweight
Sector Rating : Malaysian property sector is in the midst of recovery given improving economic outlook,
rising inflationary expectation, an excess of liquidity permeating the market due to easy
monetary conditions and low interest rate which prompt consumers to look for alternative
investment opportunities. These are signals of the start of an asset reflation scenario which
would ultimately benefit the property sector, especially the high-end property market.
Axis REIT We like Axis REIT for its hands-on management, We value Axis REIT at RM2.34, based on
proven track record as well as aggressive 7% pre-crisis average dividend yield
Outperform acquisition plans. The company is targeting to benchmark. This is supported by its
buy at least five assets this year with value of DDM-based value of RM3.32 (based on
RM2.02 more than RM200m. As a result, the fund value 8.2% WACC).
could potentially grow from RM885m to RM1.1bn.
It plans to fund these acquisitions via two
placements, i.e. 61.4m and 73.7m in 1H10 and
2H10, respectively. The company would normally
identify new assets before undertaking the
placement, and time the placement together with
new assets in order to reduce the dilution in
earnings.
Glomac Glomac’s commercial property projects will be We value Glomac at RM1.56, or 30%
the key earnings driver over the next few years. discount to its estimated RNAV/share of
Outperform Fully-sold ongoing commercial property projects RM2.23.
will continue to support the company earnings
RM1.37 growth. Meanwhile, residential projects, the
company’s bread and butter, will continue to
provide stable income to the company. As at Jan
10, the company had unbilled sales of RM384m
or 1.1x of our FY10 property development
revenue forecast.
Hunza Hunza Properties’ short-term earnings growth We value Hunza Properties at RM1.43,
Properties will mainly be supported by Infinity and Gurney based on 50% discount to its estimated
Paragon. As at Dec 09, the company had RNAV/share of RM2.85.
Market Perform unbilled sales of RM194m, or 0.8x of our FY10
revenue projection.
RM1.21
The company has entered into a SPA to acquire
17 ha freehold land in Bayan Baru, Penang for
RM82.1m cash (or RM45 psf) end-Dec 09.
Planning is at preliminary stage but we
understand that it will likely comprise service
apartments, hotel and medical centre. Total
relocation cost for squatters currently occupying
the land is estimated at around RM35-50m. We
expect the project to only kick off 2012-2013
onwards. A successful launching will be a strong
catalyst and could sustain earnings for 6-7
years. However, we have yet to factor this
potential project into our earnings forecasts
pending further details from the management.

3 MTHS
12 MTHS
Sector Average
2009 -1.6 15.0 8.9 1.1 64.8
2010 +18.3 12.6 8.5 1.0 97.1
2011 +23.3 10.1 6.9 0.9 130.8
31 December
2009(a) 71.9 42.9 16.0 +4.8 12.7 13.9 1.1 15.8 7.8 +0.5
2010(f) 83.9 50.5 16.4 +3.0 12.3 13.4 1.2 16.4 8.1 +3.1
2011(f) 90.9 54.9 17.9 +8.7 11.3 12.9 1.2 17.9 8.8 +35.6
2012(f) 93.1 57.6 18.8 +4.9 10.8 12.9 1.2 18.8 9.3
30 April
2009(a) 365.5 35.3 12.5 +38.9 11.0 9.6 0.7 7.8 5.7 (0.7)
2010(f) 377.5 36.6 12.3 (1.4) 11.1 6.2 0.7 9.0 6.6 +1.5
2011(f) 441.8 45.7 15.4 +24.7 8.9 5.3 0.7 9.0 6.6 +113.7
2012(f) 487.2 57.7 19.4 +26.5 7.1 4.8 0.7 9.0 6.6
30 June
2009(a) 91.8 27.6 19.0 (44.9) 6.4 9.4 0.5 5.6 4.6 (2.4)
2010(f) 237.0 46.3 24.2 +27.4 5.0 4.7 0.6 7.5 6.2 (2.4)
2011(f) 242.5 47.2 24.7 +2.1 4.9 4.5 0.5 7.5 6.2 +2.2
2012(f) 152.0 28.8 15.1 (39.1) 8.0 7.3 0.5 7.5 6.2
Note
Note :: Stock
Stock prices
prices @
@ 28
28 August 2009
April 2010

Property (Cont'd)
IJM Land IJM Land’s Light project in Penang will continue Our indicative fair value is pegged at its
to be the key earnings catalyst to the RNAV/share of RM3.19.
Outperform company. The company’s second project in
The Light, i.e. Light Point (which was launched
RM2.32 in Dec 09) has received strong take-up rate of
more than 70% (with average selling price of
RM620 psf).
As at Dec 09, the company had unbilled sales
of about RM800m, which represents 0.9x of
our FY10 revenue forecast.
KLCCP Despite lower yoy contribution from its hotel We value KLCCP at RM3.64, or 10% discount
division due to H1N1 outbreak as well as to its estimated RNAV/ share of RM4.05.
Market Perform financial crisis, the company is expected to
register 7.2% earnings growth due to rental
RM3.26 revisions, especially for its office properties
i.e. Menara Exxon Mobil and Petronas Twin
Tower and better contribution from its car park
division.
Long-term prospects will be supported by its
new projects i.e. Lots C (retail cum office
building) and D (service apartment and office
buildings) as well as higher rental rates for
existing properties.
Mah Sing We like Mah Sing for its fast turnaround We value Mah Sing at RM2.09, based on
business model (projects are cash generative), RNAV valuation method.
Outperform proven track record, hands-on management
and 16-34% earnings growth potential
RM1.68 between 2010-2011. As at Dec 09, the
company’s unbilled sales remained healthy at
RM690.4m, or 1x of our FY10 property
revenue forecast.
Mah Sing’s 1QFY12/10 sales more than tripled
to RM516m, from RM170.2m a year ago,
thanks to good responses to its new projects.
With sales expected to sustain in the coming
quarters underpinned by new launches, FY12/
10 sales target of RM1bn now appears within
reach.
Quill Capita Quill Capita reported 10.2% yoy growth in its We value Quill Capita at RM1.17, based on
FY12/09 normalised net profit due to full year 7% pre-crisis average dividend yield
Market Perform income contributions from the assets acquired benchmark. This is supported by its DDM-
in 2008 as well as better operating margin based value of RM1.38 (based on 8.8%
RM1.05 arising from cost rationalisation exercises. The WACC).
company managed to renew all the lease
agreements due in FY09. Despite the tough
economic condition, some were even renewed
at higher rate. In FY10, the company’s
occupancy risk will be low as only 1% of total
NLA will be renewed in 4Q10. This will provide
stability to the rental income.Long-term
prospects will be supported by better rental
rates (organic growth). Potential surprise will
come from new acquisition(s) e.g. HSBC-HQ.

3 MTHS
12 MTHS
31 March
2009(a) 671.0 51.1 5.9 (19.3) 39.2 25.2 1.7 0.0 0.0 (0.4)
2010(f) 907.5 107.6 9.8 +64.6 23.8 21.2 1.6 2.0 0.9 +6.4
2011(f) 1405.2 202.8 18.4 +88.5 12.6 10.5 1.4 2.0 0.9 +73.1
2012(f) 1903.0 379.7 34.4 +87.2 6.7 5.9 1.2 2.0 0.9
31 March
2009(a) 861.2 224.0 24.0 +6.2 13.6 5.9 0.7 10.5 3.2 0.0
2010(f) 938.1 240.1 25.7 +7.2 12.7 5.6 0.6 11.0 3.4 (1.5)
2011(f) 978.8 241.0 25.8 +0.4 12.6 5.5 0.6 11.0 3.4 +4.5
2012(f) 1057.3 250.3 26.8 +3.9 12.2 5.1 0.6 11.0 3.4
31 December
2009(a) 701.6 94.3 11.3 (8.5) 14.8 6.2 1.7 6.5 3.9 +3.9
2010(f) 817.6 109.5 13.2 +16.1 12.8 4.4 1.5 7.0 4.2 +11.4
2011(f) 951.0 146.4 17.6 +33.7 9.5 2.8 1.4 9.4 5.6 +17.2
2012(f) 1237.6 184.9 22.2 +26.3 7.6 0.6 1.3 11.9 7.1
31 December
2009(a) 67.4 32.4 8.3 +10.2 12.6 13.2 0.9 7.7 7.3 0.0
2010(f) 69.0 34.8 8.9 +7.3 11.8 13.4 0.8 8.2 7.8 0.0
2011(f) 72.0 36.4 9.3 +4.7 11.3 13.0 0.8 8.6 8.2 +22.8
2012(f) 73.9 37.6 9.6 +3.4 10.9 12.7 0.7 8.9 8.5
April 2010
Note : Stock prices @ 28 August 2009

Property (Cont'd)
SP Setia The company recorded commendable sales of We value the company at RM4.66, based
RM760m in the first four months of FY10/10 on RNAV valuation method.
Market Perform (Nov 09-Feb 10). This already met 47.5% of its
initial FY10 sales target of RM1.6bn. Given the
RM4.18 strong sales performance due to improving
economic outlook and property demand, the
company has raised its sales target by 25% to
RM2bn. As at Feb 10, the company had unbilled
sales of RM1.5bn or 1.2x of our FY10 property
development revenue forecast.
SP Setia has recently proposed to acquire 1.07
acres land in Melbourne, Australia for AUD30m
cash, or AUD642.2 psf (RM92.4m / RM1,977.9
psf)). The proposed acquisition is one of the
company’s overseas projects after China and
Vietnam.
Suncity The company has appointed RHB Investment We value Suncity at RM5.33, or 15%
and Credit Suisse Ltd as financial advisers for discount to its estimated RNAV/ share of
Outperform the proposed listing of its REIT. RM6.27.
As at Dec 09, the company had unbilled sales
RM3.76
of RM637m, or 1x of our FY10 property
development revenue.
Sunrise Recent JV with Sime Darby to develop a

We value Sunrise at RM2.76, or 30%
freehold commercial land in Bukit Jelutong is in
discount to its estimated RNAV/ share of
Outperform line with the company’s “stage 3 growth”
RM3.94.
strategy i.e. further widening product range,
RM2.19 targeting new markets and new areas. As at
Dec 09, the company had unbilled sales of
RM714.1m, or 0.9x of our FY10 revenue
forecast.
Long-term prospects will be supported by high-
end residential and commercial projects in Mont
Kiara, KLCC, Bukit Jelutong and Canada.
YNH Prop YNH expects to put into the market its RM550m We value YNH Property at RM1.86, or 40%
Fraser Residence, a mixed development project discount to its estimated RNAV/ share of
Market Perform comprising serviced residences, office suites RM3.11.
and a retail mall, by Jul 10. So far, the project
RM1.76 has chalked up 300 registrants. It also targets
to soft launch its Kiara 163 service apartment
project in the Mont Kiara area with a GDV of
RM550-600m is expected by Sep 10. 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 chalked up 250 registrants.
YTD, the company has unbilled sales of
RM890m, or 2.7x of our FY10 revenue forecast.

3 MTHS
12 MTHS
31 October
2009(a) 1408.4 163.2 16.0 (13.7) 26.2 23.8 2.1 14.0 3.3 0.0
2010(f) 1407.7 188.9 18.6 +16.4 22.5 27.3 1.9 9.3 2.2 +3.5
2011(f) 1532.8 220.4 21.7 +16.7 19.3 21.2 1.8 10.8 2.6 +32.3
2012(f) 1616.1 230.9 22.7 +4.7 18.4 20.4 1.7 11.4 2.7
31 December
2009(a) 1070.3 146.2 31.7 +9.3 11.9 6.8 0.8 13.0 3.5 +11.6
2010(f) 1361.6 163.4 34.8 +9.8 10.8 12.1 0.8 8.0 2.1 +17.5
2011(f) 1443.7 182.3 38.8 +11.6 9.7 9.2 0.7 8.0 2.1 +87.1
30 June
2009(a) 38.8 136.8 27.9 +10.5 7.8 5.4 1.1 3.0 1.4 +3.3
2010(f) 40.5 162.8 32.9 +17.6 6.7 4.3 1.0 5.0 2.3 0.0
2011(f) 45.1 179.3 36.2 +10.1 6.1 4.0 0.8 5.0 2.3 +69.8
2012(f) 48.1 190.5 38.5 +6.2 5.7 3.6 0.7 5.0 2.3
31 December
2009(a) 269.6 53.0 13.9 (36.3) 12.6 7.6 1.0 6.4 3.6 +12.1
2010(f) 311.0 63.6 16.1 +15.8 10.9 6.8 0.9 6.4 3.6 +7.3
2011(f) 373.3 71.0 18.0 +11.6 9.8 6.1 0.9 6.4 3.6 +47.9
Note
Note :: Stock
Stock prices
prices @
@ 28
28 August 2009
April 2010

Semiconductor & IT Overweight
Sector Rating : Feb chip sales up strongly yoy. The stronger yoy sales growth of 56.2% for Feb (vs. 47%
in Jan) was the fourth monthly gain on yoy basis. 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. Geographically, Feb 10
sales on a mom basis from US, Europe, Japan, and Asia Pacific dipped 3.7%, 1.8%, 1.1%,
and 0.4% (vs. Jan: -1.9%, -0.3%, -2.6%, and 2.0%) respectively. We believe the
semiconductor sector is poised for a stronger recovery in 2010 given stronger outlook for
key product segments as sales of PC and cell phones are expected to lead the growth of
chip sales, supported by consumer electronics and the enterprise sector.
Cuscapi Cuscapi’s longer-term prospects are bright given Downside risks to FY10-11 earnings
international expansion that focuses on consulting include severe contraction in
Underperform services and recovering global economy, we corporate IT spending and faster-
highlight that medium-term earnings growth than-expected margin erosion.
RM0.11 remains subdued given: 1) slowing global Fair value of RM0.09 is based on
demand for managed services amid still low unchanged 9x FY10 EPS.
corporate spending; 2) faster-than-expected
margin erosion on the back of intense
competition from China and Taiwan; and 3)
tightening monetary policy in China that may
impede corporate spending for its exposure from
F&B clients.
MPI We believe MPI’s medium-term earnings visibility We highlight potential upside to FY10-
remains bright given still-resilient chips demand 11 earnings driven by stronger-than-
Outperform from China. Further-out, we highlight that expected chips demand from US and
earnings growth would be driven by stronger Europe as well as margin expansion
RM6.95 chips demand from US and Europe as well as stemming from cost-reduction
margin expansion stemming from higher initiatives and roll-out of higher-
contribution of high-density packages and module margin packages.
packages. Further out, we are positive on MPI’s Fair value of RM8.46/share is based on
cost-reduction initiatives and roll-out of higher- 15x CY10 EPS.
margin high density MLP packages in MPI Suzhou
as these will likely boost its FY10-11 profit
margin.
Notion Vtec We believe Notion’s earnings will be driven mainly We note that there is potential 16.4%
by: 1) stronger demand in the 2.5’’ HDD segment EPS dilution from a proposed 10%
Outperform particularly to meet robust orders from Samsung; private placement and rights issue of
and 2) stronger contribution from its camera 34m free warrants. We believe there
RM3.22 division given volume loading from Nikon. could be potential upside to our FY11-
We expect margins to remain stable supported 12 earnings driven mainly by: 1)
by: 1) stronger contribution of higher-margin higher-than-expected sales of higher
camera segment; 2) continuous stable HDD ASP; margin spindle motor and camera
and 3) cost-cutting measures via efficient in- barrels; and 2) stronger contribution
house tooling capability. from its Thailand operations stemming
from expansion of WD and HGST in
Thailand. Fair value of RM4.64 based
on a target PER of 10x FY9/11 EPS.
Unisem Management expects FY10 revenue contribution While near-term earnings are
from Chengdu to be driven mainly by: 1) supported by chips demand from
Outperform stronger-than-expected chips demand from the China, we highlight that longer-term
emerging countries; 2) still resilient demand for earnings growth would be dependent
RM3.34 wireless and networking chips driven by on chips recovery from US and
emerging markets; and 3) higher capacity
Europe.
utilisation. In addition, management has guided
for a higher capex in FY10 of US$60-$70m (vs. Fair value of RM3.74/share is based on
US$50m previously) with 75% of the capex to be 15x FY10 FD EPS.
spent in Chengdu’s capacity expansion. Note that
Unisem expects its QFN capacity in Chengdu to
increase to 10m/day by 4Q10 (from 5m/day 4Q)
that would lead to stronger sales in FY11-12.

3 MTHS
12 MTHS
Sector Average
2009 -18.0 28.3 8.8 2.2 0.7
2010 +96.5 11.7 6.1 2.5 1.2
2011 +69.1 5.6 4.4 1.2 6.1
31 December
2009(a) 38.8 0.2 0.1 (76.1) +>100 9.1 0.8 0.0 0.0 +5.0
2010(f) 40.5 2.2 1.0 +>100 10.8 5.8 0.8 1.0 9.5 (4.5)
2011(f) 45.1 4.0 1.8 +86.9 5.8 5.1 0.7 1.0 9.5 +5.0
2012(f) 48.1 5.0 2.2 +23.9 4.7 5.7 0.7 1.0 9.5
30 June
2009(a) 1150.6 (14.9) (7.1) (>100) n.m. 11.2 2.1 52.1 7.5 +2.4
2010(f) 1332.4 94.7 45.1 +>100 15.4 4.6 2.0 52.1 7.5 +10.1
2011(f) 1459.0 141.9 67.6 +49.8 10.3 3.8 1.9 52.1 7.5 +44.8
2012(f) 1619.5 132.8 63.3 (6.4) 11.0 3.8 1.6 52.1 7.5
30 September
2009(a) 172.6 36.1 25.6 +8.2 13.6 8.4 2.8 5.0 1.6 (7.7)
2010(f) 227.7 55.9 36.2 +41.1 8.9 5.3 2.4 6.6 2.0 +6.6
2011(f) 295.1 71.8 46.4 +28.4 6.9 4.1 1.9 9.0 2.8 +162.9
2012(f) 384.5 98.1 63.5 +36.6 5.1 2.8 1.4 12.0 3.7
31 December
2009(a) 1036.3 61.9 11.5 (17.1) 29.0 8.8 2.2 2.5 0.7 +21.5
2010(f) 1450.6 134.8 24.9 +>100 13.4 6.1 2.0 5.0 1.5 +51.1
2011(f) 1664.8 185.0 34.1 +36.9 9.8 5.0 1.7 5.0 1.5 +328.2
2012(f) 1896.7 250.8 46.2 +35.4 7.2 4.1 1.4 5.0 1.5

Telecommunications Overweight
Sector Rating : Despite continued mobile subscriber growth (we project Malaysia’s mobile penetration rate to
reach 120% by end-2012 from 106% as at end-2009), voice minutes are increasingly
becoming commoditised and we expect tariffs would continue to be under pressure. With
slowing voice revenue growth, mobile operators are expected to shift focus towards the
provision of non-voice services to support further topline growth. Two key drivers of non-
voice revenue we see ahead are wireless broadband and revenue from data value-added
services. In addition, while competition within the mobile and broadband space is expected
to remain intense, we do not expect irrational pricing to set in. Similarly, for TM, we believe
data and broadband revenue growth would remain strong to help mitigate the weaker voice
revenue.
Axiata Having addressed gearing concerns with a rights FY09-11 core net profit CAGR of 27.6%
issue last year, we believe the group is now on expected, anchored by Celcom as well
Outperform firmer ground to move to the next level. We as a recovery in earnings of overseas
continue to see Celcom and XL drive the group’s cellcos. Fair value of RM4.05 is based on
RM3.77 earnings growth in the near term. However, SOP, which comprises: a) DCF for
competition remains steep in India, Sri Lanka Celcom (WACC=9.9%); b) 5x EV/
and Bangladesh, which means near-term EBITDA for XL; c) 6x EV/EBITDA for
contribution from this region would be muted. TMIB; d) 11.5x FY09 PER for TMIC; e)
Over the longer term, we believe Axiata’s consensus median target price for Idea;
portfolio of assets will offer investors a unique and e) market price for remaining
blend of mobile assets operating in maturing/ regional cellcos.
matured markets and thus, have strong cash
flow generative abilities as well as assets in
high-growth markets within the region.
Digi The recent move to introduce iPhone, coupled FY09-12 net profit CAGR of 8% due to a
with its ongoing expansion of 3G coverage recovery in usage and rising non-voice
Outperform should help Digi better compete and tap into the revenue contribution. Fair value of
data revenue market. Nevertheless, despite the RM23.90 is based on DCF
RM22.20 additional capex for the rollout of 3G, we think (WACC=8.3%).
capital management would still be on the cards
as management remains committed to move
towards a more efficient balance sheet.Longer-
term benefits from 3G include new revenue
streams (e.g. wireless broadband) and enhanced
product offerings (e.g. mobile broadband) as well
as help address spectrum constraint issues.
Maxis We believe Maxis is well poised to capture the We project FY09-12 net profit CAGR of
rising popularity of mobile broadband and strong 8%, led by stronger non-voice revenue
Outperform data revenue growth largely ahead due to its (both broadband and advanced data
customer base, which is the largest in the services). Fair value of RM6.20 is based
RM5.31 country, are of the high-end type and appear to on DCF (WACC=8.4%).
be early adopters of technology.Maxis has
adopted a 75% dividend payout policy.
Nevertheless, with its strong cash flows and
healthy balance sheet, we think it would be able
to supplement that further with special dividends
in order to achieve an optimal balance sheet.
TM We believe TM's near term focus would be on Going forward, we expect earnings
expanding the rollout of HSBB services in more would be driven by the broadband and
areas. However, management guided that topline
Market Perform data segments, partly offset by weaker
contribution from HSBB would not be immediate.
voice revenue and absence of interest
Apart from that, TM remains principally a
RM3.45 income from Axiata. We have assumed
dividend play given its policy of paying out at
that TM will continue to meet its dividend
least RM700m in dividends.Over the longer term,
commitment of paying out at least
our main concerns on TM have not changed, i.e.
declining voice revenues, operational RM700m or 90% of normalised PAT,
inefficiencies as well as the risks involved in the whichever is higher. Fair value of
rollout of HSBB. However, we believe data and RM3.55/share assumes a minimum
internet revenue growth will remain strong to required net yield of 5.5% for TM’s
help mitigate the weaker voice revenue. minimum RM700m dividend.

3 MTHS
12 MTHS
Sector Average
2009 -13.7 19.4 7.9 6.8 3.5
2010 +15.9 16.7 7.3 5.6 4.5
2011 +10.9 15.1 6.6 4.8 4.9
31 December
2009(a) 13105.1 1406.7 18.4 +27.1 20.5 7.5 3.3 0.0 0.0 (1.8)
2010(f) 14395.5 1996.4 23.6 +28.8 15.9 6.6 2.7 0.0 0.0 +15.3
2011(f) 15641.5 2291.3 27.1 +14.8 13.9 5.8 2.3 0.0 0.0 +86.6
31 December
2009(a) 4909.6 1000.5 128.7 (13.4) 17.3 8.4 30.2 137.3 6.2 (1.8)
2010(f) 5271.9 1080.7 139.0 +8.0 16.0 7.8 24.2 148.3 6.7 +1.6
2011(f) 5627.8 1185.2 152.4 +9.7 14.6 7.2 15.7 162.7 7.3 +3.1
2012(f) 5947.8 1250.9 160.9 +5.5 13.8 6.7 11.5 171.6 7.7
31 December
2009(a) 8611.0 2335.0 31.1 (2.7) 17.1 10.1 n.m 20.0 3.8 (1.5)
2010(f) 9631.3 2488.2 33.2 +6.6 16.0 8.9 n.m 33.2 6.3 (1.3)
2011(f) 10449.1 2714.4 36.2 +9.1 14.7 8.0 n.m 36.1 6.8 n.a
2012(f) 11099.2 2940.5 39.2 +8.3 13.5 7.3 48.5 39.2 7.4
31 December
2009(a) 8608.0 468.5 13.3 (41.8) 26.0 5.1 1.8 26.3 7.6 +0.6
2010(f) 8811.7 479.2 13.5 +1.9 25.5 5.5 1.9 26.3 7.6 +10.6
2011(f) 9132.2 511.0 14.4 +6.6 23.9 5.3 2.0 26.3 7.6 +22.3
2012(f) 9402.7 589.8 16.6 +15.4 20.7 5.1 2.0 26.3 7.6

Timber Neutral
Sector Rating : Contrary to expectations, Japan’s housing starts have registered a 16 straight month of
th
decline, at 2.4% yoy in Mar 10 to 65,008 units, thus limiting demand for tropical plywood.
We understand from Japan Lumber reports and timber players that plywood prices seem to
have stabilised since 1Q10 and are slowly creeping up. We note however that another false
start to the economic recovery in Japan would result in timber prices remaining at current
levels or even falling (as has happened several times since the 1990s). We prefer the timber
players with exposure to the plantations sector, as this would give them some buffer from
the more volatile timber market.

Evergreen YTD-Apr 10, Evergreen has been running at FY10 earnings are expected to jump
capacity utilisation rate of above 80% (vs. 4Q09’s 26% yoy following strong yoy rebound
Outperform utilisation of 78%) from rising demand due to in capacity utilisation and average
supply shortages as competitors continue to cut selling prices. Our fair value of RM2.35
RM1.61 back capacity / close plants, while other major is based on 11x CY10 earnings. The
MDF exporting countries remain uncompetitive in 11x target PE is a 3 multiple discount to
the export market due to its strong currencies. the timber sector PE for its smaller
Long-term drivers for Evergreen include: 1) market capitalisation.
higher utilisation of its plants; 2) improving
average selling prices; and 3) management’s
commitment to grow its market share in the Asia
Pacific region.
Jaya Tiasa Jaya Tiasa’s sales decline has been reducing qoq We expect earnings to jump 99% in
(-9% in 3QFY04/10 and -24% in 2QFY04/10) and FY04/10 due to low base effect from
Underperform we believe that average selling prices have since FY09; and higher earnings contribution
been gaining momentum. Mid-to-longer term from the plantations division, due to
RM3.68 earnings growth would be supported by increasing the increase in mature hectarage
mature hectarage from its plantations division together with higher CPO prices. Our
together with our rising CPO assumptions of indicative fair value of RM3.05 is based
RM2,500 in CY10, RM2,700 in CY11 and RM2,500 on target PE of 14x CY10 earnings for
in CY12 (from RM2,300 in CY09).However, as the timber division and 14x CY10
Jaya Tiasa’s valuation look stretched at current earnings for the plantation division.
levels, and as such, we maintain our
Underperform recommendation on the stock.
Ta Ann Ta Ann’s plywood division continued to be in the We expect core earnings to jump by
black in 4Q09 since breaking even in 3Q09, while 46% in FY10 due to gradual recovery in
Outperform capacity utilisation increased to 69% (from 66% timber division as well as higher
in 3Q09). Moving into FY10, we expect the earnings contribution from the
RM5.73 plywood division to record higher profit (+23% plantations division from the increase
yoy), following gradual recovery in average in mature hectarage and higher CPO
selling prices and higher capacity utilisation from prices. Our indicative fair value of
increase in demand.Increasing mature hectarage RM7.60 is based on target PE of 14x
from its plantations division together with our CY10 earnings for the timber division
rising CPO assumptions of RM2,500 in CY10, and 14x CY10 earnings for the
RM2,700 in CY11 and RM2,500 in CY12 (from plantation division.
RM2,300 in CY09), would help to further boost
earnings.
WTK In 1Q10, average selling prices of plywood We expect earnings to return to the
products have increased by 5-12% qoq while the black in FY10 due to higher earnings
Outperform selling prices of logs jumped 10% qoq. While log contribution from the gradual recovery
price was flat qoq in 2Q10, we understand that in log and plywood prices, together
RM1.33 indicative selling prices for plywood have since with an increase in our log export
increased by another 3-6% qoq in 2Q10. WTK is quota assumption. Our indicative fair
currently exporting about 50% of its total log value of RM1.55 is based on target PER
production and targets a 75% capacity utilisation of 14x CY10 earnings
rate on its plywood plant in FY10. Impact from
weakening US$ against RM may be minimal as we
understand that any weakening will be passed
down, but at a lag time of 6 weeks.

3 MTHS
12 MTHS
Sector Average
2009 (18.4) 21.0 11.5 1.2 1.6
2010 +101.5 10.4 7.6 1.1 1.8
2011 +36.6 10.4 5.6 1.0 2.3
31 December
2009(a) 771.5 86.8 16.9 +8.2 9.5 8.6 1.2 4.0 2.5 (5.8)
2010(f) 929.0 109.4 21.3 +26.1 7.5 6.6 1.1 5.0 3.1 +11.0
2011(f) 1016.5 119.7 23.3 +9.4 6.9 5.4 1.0 6.0 3.7 +187.5
2012(f) 1114.2 132.1 25.7 +10.3 6.3 4.6 0.9 7.0 4.3
30 April
2009(a) 756.5 13.9 4.9 (73.2) 74.9 17.2 1.0 0.0 0.0 (6.6)
2010(f) 733.6 27.6 9.8 +99.1 37.6 14.2 1.0 0.0 0.0 +31.4
2011(f) 1021.1 78.2 27.7 +>100 13.3 9.5 0.9 0.0 0.0 +104.4
2012(f) 1269.3 156.7 55.5 +>100 6.6 5.9 0.8 1.3 0.4
31 December
2009(a) 662.2 61.2 28.5 (15.2) 20.1 10.0 1.9 5.0 0.9 (3.7)
2010(f) 776.2 116.2 54.1 90.0 10.6 7.1 1.6 7.0 1.2 24.8
2011(f) 865.9 140.9 65.7 21.2 8.7 5.6 1.4 11.5 2.0 75.8
2012(f) 968.4 182.2 84.9 29.3 6.8 4.1 1.2 12.5 2.2
31 December
2009(a) 555.4 (0.8) (0.2) (101.6) n.m. 18.7 0.8 6.0 4.5 (5.0)
2010(f) 674.7 48.5 11.1 +>100 12.0 6.3 0.7 6.0 4.5 +20.9
2011(f) 723.4 64.0 14.6 +32.0 9.1 5.1 0.7 6.0 4.5 +52.0
2012(f) 773.8 81.4 18.6 +27.2 7.2 2.3 0.7 6.0 4.5

Transportation & Logistics Neutral
Sector Rating : The transportation and logistics sector is poised for improved prospects over the near term,
in line with the recovery in the global economy, but not without some speed bumps along
the way such as: (1) A mild rebound in the global economy will not materially stimulate
demand for transportation and logistics service; (2) Over the short term, new capacity will
continue to flood the market, intensifying competition and capping yields; and (3) Rising
crude oil prices that will crimp margins. However, we see bright spot in Malaysia Airports.
Over the longer term, the growth prospects of the air travel sector in Asia Pacific are
promising. MAHB offers exposure to the booming air travel sector, less the troubles of
airlines such as intense competition, huge losses from fuel hedges gone bad and high
gearing.
AirAsia ST: A mere mild rebound in the global Earnings to contract in FY12/10 as capacity
economy will not materially stimulate the expansion more than offset by higher fuel
Market Perform demand for air travel. Tremendous cost and lower yields.Fair value is RM1.49
pricing pressure on the back of the based on 16x FY12/10 EPS (in line with
RM1.33 massive new capacity coming onstream Ryanair), adjusted for RM739.1m owed to
both from full-service and budget airlines AirAsia by 49%-owned associates Thai
in the region. LT: Rising affluence and AirAsia and Indonesia AirAsia that
propensity for air travel, particularly, in translates to 27sen/AirAsia share.
the region.
Freight ST: Capacity expansion at its 51%-owned Fair value is RM1.40 based on 10x CY10
tug and barge unit TCH Marine. EPS of 14.0 sen, in line with our benchmark
Outperform 1-year forward target PER for the transport
LT: Sustained organic growth at its core and logistics sector.
RM0.80 business, i.e. the freight services.
ILB ST: Recovery in China’s export sector. To turn around in FY12/10 on recovery of
LT: The bright prospects of the logistics China’s export sector. Fair value is RM1.24
Outperform sector in China, sustained production based on 13x FY12/10 EPS, at a premium to
volumes of Lenovo/IBM’s ThinkPad our benchmark 1-year forward target PER
RM1.06 laptops and IBM’s servers in three for the transport and logistics sector of 10x
warehouses in Futian FTZ, Shenzhen, to reflect ILB’s superior earnings growth
managed by ILB with “Vendor Managed visibility with the good execution of its
Inventory” (VMI) supply chain second wave of investment/expansion in
management system, and new overseas China.
warehouse projects in the pipeline.
MAHB ST: AirAsia’s continued aggressive Fair value is RM5.45 based on 16x FY12/10
expansion, diversion of traffic from EPS of 34.1 sen, in line with our 1-year
Outperform Suvarnabhumi due to political turmoils in forward target PER for the market.
Thailand.
RM4.91
LT: Rising affluence and propensity for air
travel, particularly, low-cost air travel.

3 MTHS
12 MTHS
Sector Average
2009 -18.3 26.9 8.5 1.5 3.5
2010 +22.3 22.5 10.2 1.5 3.7
2011 -3.5 16.9 10.2 1.3 3.8
31 December
2009(a) 3178.9 449.1 18.3 +>100 7.3 8.2 1.2 0.0 0.0 (5.0)
2010(f) 3353.5 305.3 11.0 (39.9) 12.1 11.2 1.2 0.0 0.0 (2.2)
2011(f) 3585.0 340.3 12.2 +11.5 10.9 11.0 1.1 0.0 0.0 +14.7
2012(f) 3905.6 394.1 14.2 +15.8 9.4 10.7 1.0 0.0 0.0
30 June
2009(a) 195.0 12.9 10.6 +6.3 7.5 4.2 0.9 5.0 6.3 (1.2)
2010(f) 243.6 15.8 11.7 +10.1 6.8 3.3 0.8 4.5 5.6 +9.6
2011(f) 265.9 18.4 13.6 +16.2 5.9 2.9 0.7 4.5 5.6 +33.3
2012(f) 284.7 19.1 15.1 +11.1 5.3 2.8 0.7 4.5 5.6
31 December
2009(a) 187.0 (17.7) (9.0) (>100) n.m. 11.4 0.6 3.0 2.8 +1.9
2010(f) 210.4 18.8 9.5 +>100 11.1 10.3 0.5 2.0 1.9 +21.1
2011(f) 218.3 20.1 10.2 7.1 10.4 9.2 0.5 2.0 1.9 +54.7
2012(f) 224.3 21.5 10.9 6.8 9.7 8.5 0.5 2.0 1.9

31 December
2009(a) 1563.1 314.3 28.6 +3.0 17.2 10.0 1.6 15.2 3.1 +2.5
2010(f) 1697.6 375.0 34.1 +19.3 14.4 9.5 1.4 17.1 3.5 +6.7
2011(f) 1988.9 429.1 39.0 +14.4 12.6 8.6 1.3 19.6 4.0 +54.4
2012(f) 2392.7 516.5 47.0 +20.4 10.5 6.7 1.1 24.7 5.0

Transportation & Logistics (Cont'd)
MAS ST: A mere mild rebound in the global To turn around in FY12/10 on better capacity
economy will not materially stimulate management.
Underperform the demand for air travel. Fair value is RM1.60 based on 14x FY12/10 EPS that
Tremendous pricing pressure on the is in line with the average 1-year forward PER for
RM2.13 back of the massive new capacity peer Singapore Airlines Ltd.
coming onstream both from full-
service and budget airlines in the
region.
LT: Rising affluence and propensity for

air travel, particularly, in the region.
MISC ST: Petroleum, chemical and container EPS to resume growth in FY03/11 as losses from the
segments will continue to be weighed container liner and chemical segments narrow.
Underperform down by the depressed freight rates
and volumes on the back of Fair value is RM8.06 based on “sum of parts”.
RM8.94 overcapacity and falling demand.
LT: Steady income stream from its

LNG division and high growth at its
offshore & engineering businesses.

3 MTHS
12 MTHS
31 December
2009(a) 11309.9 (672.9) (40.3) (>100) n.m. (9.4) 5.8 0.0 0.0 (2.3)
2010(f) 12283.6 381.4 11.4 +>100 18.7 10.9 1.9 0.0 0.0 +0.3
2011(f) 12259.2 480.0 14.4 +25.8 14.8 10.1 1.7 0.0 0.0 (11.9)
2012(f) 12201.9 567.9 17.0 +18.3 12.5 9.6 1.5 0.0 0.0
31 March
2009(a) 15783.5 1404.5 37.8 (35.6) 23.7 11.4 1.6 35.0 3.9 11.2
2010(f) 15090.2 810.9 21.8 (42.3) 41.0 13.5 1.6 35.0 3.9 14.2
2011(f) 14474.2 1473.4 33.0 +51.4 27.1 13.9 1.6 36.0 4.0 9.0
2012(f) 15118.8 1638.5 36.7 +11.2 24.4 13.1 1.6 37.0 4.1


Appendix
Valuations And Ratings Of Individual Stocks Under Coverage
Price Fair Value Sector

(RM/s) (RM/s)
28/4/2010
OUTPERFORM
Adventa 3.38 4.34 Manufacturing
AEON 5.00 5.85 Consumer
AFG 3.05 3.27 Banking
Allianz Malaysia 5.36 6.68 Insurance
AMMB 4.96 6.13 Banking
Amway 7.45 8.45 Consumer
Ann Joo 2.85 3.32 Building Material
Axiata 3.77 4.05 Telecommunication
Axis REIT 2.02 2.34 Property
BP Plastics 0.62 0.80 Manufacturing
B-Toto 4.48 4.95 Gaming
Carlsberg 5.32 5.90 Consumer
CBIP 2.67 3.60 Plantation
CIMB 14.16 16.24 Banking
CSC Steel 1.94 2.55 Building Material
Daibochi 3.28 4.40 Consumer
Dialog 1.10 1.29 Oil & Gas
Digi.com 22.20 23.90 Telecommunication
Emas Kiara 0.53 1.31 Construction
Eon Cap 7.08 8.07 Banking
EPIC 1.59 2.69 Oil & Gas
Evergreen 1.61 2.35 Timber
Faber 2.24 3.30 Consumer
FajarBaru 1.06 1.31 Construction
Freight Mgmt 0.80 1.40 Transportation & Logistics
Furniweb 0.45 0.66 Manufacturing
Genting 6.60 8.95 Gaming
Genting S’pore (S$) 0.87 1.35 Gaming
Glomac 1.37 1.56 Property
Hai-O Enterprise 4.30 5.20 Consumer
Hiap Teck 1.39 1.80 Building Material
IJM Land 2.32 3.19 Property
ILB 1.06 1.24 Transportation & Logistics
IOI Corp 5.43 6.65 Plantation
Kencana 1.56 1.88 Oil & Gas
KFCH 7.88 9.63 Consumer
Kinsteel 0.97 1.22 Building Material
KL Kepong 16.66 18.40 Plantation
Kossan 7.83 10.74 Manufacturing
Kurnia Asia 0.53 0.74 Insurance
Lafarge 6.55 7.81 Building Material
LPI Capital 14.38 16.65 Insurance
Mah Sing 1.68 2.09 Property
MAHB 4.91 5.45 Transportation & Logistics
Maxis 5.31 6.20 Telecommunication
Maybank 7.45 8.96 Banking
MBM 2.82 5.04 Motor
MCIL 0.83 1.09 Media
Media Prima 2.25 2.55 Media
MPI 6.95 8.46 Semiconductor & IT

Appendix

(RM/s) (RM/s)
28/4/2010
OUTPERFORM
MRCB 1.55 2.06 Construction
Notion Vtec 3.22 4.64 Semiconductor & IT
Perwaja 1.40 1.79 Building Material
Plus 3.39 4.13 Infrastructure
Proton 4.84 5.48 Motor
Public Bank-F 12.00 13.12 Banking
Public Bank-L 12.00 13.12 Banking
QL Resources 3.73 3.93 Consumer
RCE Capital 0.66 1.15 Banking
Sime Darby 8.76 9.70 Plantation
Sino Hua An 0.44 0.59 Building Material
Suncity 3.76 5.33 Property
Sunrise 2.19 2.76 Property
Sunway 1.54 1.69 Construction
Ta Ann 5.73 7.60 Timber
Tan Chong 4.66 5.26 Motor
Te n a g a 8.48 10.40 Power
Top Glove 12.78 15.50 Manufacturing
UMW 6.38 7.52 Motor
Unisem 3.34 3.74 Semiconductor & IT
Wah Seong 2.52 3.09 Oil & Gas
WTK 1.33 1.55 Timber
YTL Cement 4.30 5.51 Building Material
MARKET PERFORM
Affin 3.01 3.03 Banking

AirAsia 1.33 1.49 Transportation & Logistics
Astro 4.24 4.30 Media
Genting M’sia 2.82 2.90 Gaming
Hartalega 7.80 7.93 Manufacturing
HL Bank 8.71 9.05 Banking
HSL 1.53 1.56 Construction
Hunza Prop 1.21 1.43 Property
IJM Corp 4.90 4.88 Construction
KLCCP 3.26 3.64 Property
KPJ Healthcare 2.92 3.20 Consumer
MNRB 2.94 2.94 Insurance
P Gas 9.95 10.51 Oil & Gas
Parkson 5.62 6.40 Consumer
Quill Capita 1.05 1.17 Property
SapuraCrest 2.34 2.66 Oil & Gas
SP Setia 4.18 4.66 Property
Star 3.34 3.60 Media
Tanjong 17.46 19.20 Power
TM 3.45 3.55 Telecommunication
VS. Industry 1.28 1.33 Manufacturing
YNH Property 1.76 1.86 Property
YTL Power 2.19 2.12 Power

Appendix

(RM/s) (RM/s)
28/4/2010
UNDERPERFORM
BAT 43.02 38.95 Consumer
Cuscapi 0.11 0.09 Semiconductor & IT
Gamuda 2.96 2.05 Construction
Genting Plantation 6.75 6.65 Plantation
IJM Plantations 2.52 2.35 Plantation
Jaya Tiasa 3.68 3.05 Timber
KNM 0.51 0.51 Oil & Gas
MAS 2.13 1.60 Transportation & Logistics
MISC 8.94 8.06 Transportation & Logistics
Petra Perdana 1.47 1.00 Oil & Gas
Puncak 2.63 2.55 Infrastructure
WCT Bhd 2.94 2.10 Construction
Wellcall 1.32 1.14 Manufacturing

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.
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the accounts of customers, in debt or equity securities or loans of any company that may be involved in this transaction.
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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.

RHB DEALING AND RESEARCH OFFICES
MALAYSIA
RHB Investment Bank Bhd
Level 10, Tower One, RHB Centre,
Jalan Tun Razak
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50786 Kuala Lumpur, Malaysia
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Fax (Research) : (603) 9284 8693

Lim Chee Sing

Director
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MARKET DATELINE

RHBRI’s Monthly Stock Watch

Taking Stock - Position For More Volatility Ahead

Manufacturing Sector (See page 20)

Changes In Recommendation And Forecast From

Carlsberg Outperform Outperform 28 Apr 2010 We increased our earnings forecasts

RHBRI'S MONTHLY 2 STOCK WATCH

Faber Outperform Outperform 1 Mar 2010 Following the better-than-expected

RHBRI'S MONTHLY 3 STOCK WATCH

Glomac Outperform Outperform 24 Mar 2010 Downgraded our FY10-11 earnings

Hartalega Market Perform Underpeform 16 Apr 2010 We have upgraded Hartalega to

RHBRI'S MONTHLY 4 STOCK WATCH

KL Kepong Outperform Outperform 25 Mar 2010 Post-visit, we revised our forecasts

RHBRI'S MONTHLY 5 STOCK WATCH

RHBRI'S MONTHLY 6 STOCK WATCH

MBM Outperform Outperform 12 Apr 2010 We have revised up our earnings

RHBRI'S MONTHLY 7 STOCK WATCH

MPI Outperform Outperform 14 Apr 2010 We have raised our FY10-12

Notion Vtec Outperform Outperform 30 Apr 2010 Notion announced a proposal to

RHBRI'S MONTHLY 8 STOCK WATCH

RHBRI'S MONTHLY 9 STOCK WATCH

Ta Ann Outperform Outperform 31 Mar 2010 We increased our earnings forecasts

RHBRI'S MONTHLY 10 STOCK WATCH

RHBRI'S MONTHLY 11 STOCK WATCH

Unisem Outperform Outperform 31 Mar 2010 We have raised FY10-12 earnings

RHBRI'S MONTHLY 12 STOCK WATCH

Unisem Outperform Outperform 14 Apr 2010 Given the stronger-than-expected

RHBRI'S MONTHLY 13 STOCK WATCH

RHBRI'S MONTHLY 14 STOCK WATCH

Position For More Volatility Ahead

* Based on 28 Apr # RHBRI estimates Source: Bloomberg, RHBRI

RHBRI'S MONTHLY 15 STOCK WATCH

EPS Growth (%) PER (x)

2006 2007 2008 2009 2010 2011

Double Whammy – The May Effect Followed By World Cup In June/July

RHBRI'S MONTHLY 16 STOCK WATCH

Source: Bloomberg Source: Bloomberg

Source: Bloomberg Source: Bloomberg

Source: Bloomberg Source: Bloomberg

RHBRI'S MONTHLY 17 STOCK WATCH

Unisem 3.34 3.74 1,742 98.9 21.5 0.9 OP

* Relative performance vs. FBM KLCI

Gent Spore 0.87 1.35 11,379 (38.2) (6.0) 0.6 OP

* Relative performance vs. FBM KLCI

RHBRI'S MONTHLY 18 STOCK WATCH

FYE Price FV Rel EPS PER PBV PCF GDY

^ FY10-11 valuations refer to those of FY11-FY12 #

RHBRI'S MONTHLY 19 STOCK WATCH

A Look At Malaysia’s Furniture Industry

RHBRI'S MONTHLY 20 STOCK WATCH

RHBRI'S MONTHLY 21 STOCK WATCH

Digital Yeo Aik Hevea Jaycorp

Conversion of General Trading, Trading in

Source: Company, RHBRI

Source: Company, RHBRI Source: Company, RHBRI

Source: Company, RHBRI

RHBRI'S MONTHLY 22 STOCK WATCH

Valuations and Recommendations

RHBRI'S MONTHLY 23 STOCK WATCH

Latitude Tree Win Yuan Bio Grob Holz

Source: Company, RHBRI

Source: Company, RHBRI Source: Company, RHBRI

Source: Company, RHBRI