RHBRI's Monthly Stock Watch - Special Focus: Downdraft of Fear Longer-Term Outlook Still Positive - 3/6/2010

MARKET DATELINE
PP 7767/09/2010(025354)
2 June 2010
•
Malaysia
RHBRI’s Monthly Stock Watch
Special Focus :
Downdraft Of Fear; Longer-term Outlook Still

Positive (See page 15)
Changes In Recommendation And Forecast From

Last Stock Watch For May 2010
Recommendation Adjustment Reasons For Changes In
Company Current Previous Date Recommendation And Forecast
AEON Outperform Outperform 19 May 2010 Our earnings forecasts are reduced
by 0.8-2.9% p.a. for FY10-12 after:
1) increasing our SSS growth for
FY10; and 2) taking into account
the loss of the 1U first phase
property management contract. Our
fair value is reduced marginally to
RM5.80 (from RM5.85) based on
unchanged 14x (average PER for
retail sector) FY12/10 EPS.
AFG Outperform Outperform 1 Jun 2010 We have raised our FY03/11 net
profit forecast by 3.6% after updating
for the full-year results. Fair value
raised to RM3.47 from RM3.27
based on unchanged target CY10
PER of 15x.
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Affin Trading Buy Market Perform 1 Jun 2010 We have raised our fair value to
RM3.58 from RM3.03 after raising our
target FY10 PER to 13x from 11x.
This increase is to reflect: 1) the
strong 1Q results, which suggests
potential upside to our numbers; and
2) news flow regarding a potential
bid for EON Cap (currently pending
BNM’s approval). The bid, if
successful, would see the enlarged
group move ahead of HL Bank in
terms of total assets. Furthermore,
valuations are the cheapest among
our banking universe. Thus, we
upgrade Affin to Trading Buy from
Market Perform.
AirAsia Outperform Market Perform 1 Jun 2010 FY12/10-12 net profit forecasts raised
by 41-61%, having raised our
assumptions on yields.
Recommendation upgraded as
valuation became attractive after
earnings upgrade.
AMMB Outperform Outperform 17 May 2010 Given the higher-than-expected final

DPS and dividend payout guidance
of 35-40% (for FY11) by
management, we have raised our
FY11-12 net DPS projections to 14-
16 sen from 7.5 sen p.a..
Ann Joo Underperform Outperform 26 May 2010 FY12/10-12 net profit forecasts cut
Resources by 4.0-4.5%, largely to reflect lower
sale volume and average selling price
assumptions. Indicative fair value was
downgraded by 30.1% to RM2.25
following: (1) A downward revision in
our earnings forecasts; and (2) A
downgrade in our 1-year forward
target PER for the long steel product
sector from 12x to 7x. Downgraded
from Outperform to Underperform,
as valuation has become rich
following the downgrade in our
indicative fair value.
RHBRI'S MONTHLY 2 STOCK WATCH

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Astro Ceased Market Perform 25 May 2010 We have ceased coverage on Astro
Coverage given that Astro Holdings has
received an acceptance level of more
than 90% for its general offer to
privatise Astro.
Axiata Outperform Outperform 21 May 2010 FY12/10-12 net profit forecasts raised
by 4.6-5.2% to reflect: (1) Upward
revisions in our net profit forecasts
for Axiata’s key subsidiaries post
release of their 1Q results; and (2)
Lower net interest expense arising
from the recent XL stake selldown,
partly offset by higher MI for XL.
SOP fair value is raised by 11.9% to
RM4.53, which takes into account:
(1) The upward revisions in our
valuation benchmarks for the key
subsidiaries; and (2) Gross proceeds
raised from the placement of XL
shares.
Carlsberg Outperform Outperform 31 May 2010 We tweaked our earnings forecasts

down by 1.6-1.7% for FY10-12 after
updating our FY09 numbers and
assumptions. DCF-based fair value
is reduced to RM5.85 (from RM5.90)
following the earnings changes, using
an unchanged WACC of 9.2%.
CSC Steel Market Perform Outperform 26 May 2010 FY12/10-12 net profit forecasts cut
by 17.7-20.6% to reflect lower sales
volume and average selling price
target PER for the flat steel product
from Outperform to Market Perform,

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Cuscapi Underperform Underperform 14 May 2010 We have raised our FY10-12 net
earnings forecasts by 27.3%, 17.5%
and 14% respectively after factoring
in: 1) expansion into the
international market; and 2) lower
operating expenses. Accordingly, we
have raised our fair value to RM0.11/
share (from RM0.09/share) based on
unchanged 9x FY10 PER.
Daibochi Outperform Outperform 12 May 2010 We reduced our earnings forecasts

by 4-5% for FY10-12 after: 1)
reducing our capex assumption for
FY10; and 2) increasing our
administrative expenses to be in line
with FY09 numbers. Our fair value
is reduced to RM4.20 (from RM4.40)
based on unchanged 12x FY12/10
EPS.
Digi Outperform Outperform 5 May 2010 DCF-derived fair value raised by

7.5% to RM25.7m after adjusting for
a lower WACC of 7.7% (vs. 8.3%
previously) that incorporates a debt-
equity ratio of 30:70 (10:90
previously).
Evergreen Outperform Outperform 2 June 2010 We reduced our earnings forecasts

by 1.4-3.2% for FY10-12 p.a. after:
1) updating our US$/MYR
assumptions to RM3.25/US$ in CY10
(from RM3.30/US$), RM3.20/US$ in
CY11 (from RM3.25/US$) and
RM3.15/US$ in CY12 (from RM3.30/
US$); 2) updating our FY09
numbers; and 3) increasing our
dividend payout assumptions. Fair
value is now at RM2.30 (from
RM2.35) based on unchanged target
PER of 11x FY12/10 earnings (which
is at a 3x PE discount to the timber
sector due to its smaller market
capitalisation).
Faber Outperform Outperform 6 May 2010 Our SOP-based fair value has been
raised slightly to RM3.40 (from
RM3.30) after updating for Faber’s
net cash position as at Mar ’10.

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First Outperform New 24 May 2010 We initiated coverage on FR with an

Resources Coverage outperform recommendation and a
S$1.55 target prices, based on a
target PE of 11.5x FY11 EPS, which
is a 30% discount to our Malaysian
target PER for the mid-cap plantation
stocks, given that traditionally, the
Singapore and Indonesia-listed
plantation stocks trade at a 20-30%
discount to Malaysia-listed peers. We
project FR to post a core net earnings
(ex-EI and biological gains/losses)
CAGR of 59.8% over the next three
years to FY12.
Furniweb Outperform Outperform 24 May 2010 We have raised our FY10-12 EBIT
margin assumptions slightly to 8.2-
9.2% (vs. 7.2-7.3% previously) and
raised our effective tax rate
assumption to 30% p.a. (vs. 17.5%
p.a. previously). Consequently, our
FY10 earnings forecasts have been
raised by 8.5%, while FY11-12
forecasts have been trimmed by
4.1% and 4.3% respectively.
Following the earnings revision
above, our indicative fair value has
been raised to RM0.71 (from
RM0.66) based on unchanged target
FY12/10 PER of 8.5x.
Genting Bhd Outperform Outperform 31 May 2010 Post-1QFY10 results, although we

maintained our PBT forecasts, we
revised our net profit forecasts by
16.4% for FY10 (or core net profit
forecasts by +84.3%), after taking
into account the positive minority
interest recorded during the quarter,
and tweaked our forecasts for FY11-
12 by 0.4-0.8% p.a.. Post-earnings
revision and after updating for the
latest market value of Landmarks,
and the latest company net debt
level for Genting (ex-GM and GS),
our SOP-based fair value for Genting
is raised slightly to RM8.95 (from
RM8.90).

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Genting Underperform Underperform 27 May 2010 Post-1QFY10 results, we tweaked our

Plantations forecasts slightly by-0.1-0.6% for
FY10-12. No change to our fair value
of RM6.65 based on 16.5x CY10
target PE multiple.
Hai-O Market Perform Outperform 21 May 2010 We reduced our earnings forecasts
by 6-13% for FY04/10-12 after
reducing our membership growth per
month and % of active members
following the tightening of credit
financing from banks and effect of
interest rate hikes on consumer
borrowing patterns. We have also
rolled forward our valuation target to
FY04/11 and reduced our target PER
for the stock to 10x (from 11.5x)
due to slower membership growth
ahead coupled with lower earnings
visibility going forward. As such, our
fair value has now been reduced to
RM4.30 (from RM5.20) based on 10x
FY11 EPS (from FY10 EPS), which is
a 30% discount to our consumer
sector target PER of 14.5x. Our
recommendation was therefore
downgraded to Market Perform (from
Outperform).
Hartalega Outperform Market Perform 12 May 2010 We have raised our FY11 and FY12
revenue projections by 11.9% and
26.8% respectively after adjusting our
FY11 and FY12 average selling price
assumptions to US$34/’000 pcs
(from US$30/’000 pcs) and US$33/
’000 pcs (from US$26/’000). As a
result, our FY11 and FY12 earnings
projections have been raised by
Consequently, we have upgraded our
call to Outperform from Market
Perform previously.

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Hiap Teck Market Perform Outperform 26 May 2010 FY07/10-12 net profit forecasts cut
by 9.2-13.1%, largely to reflect lower
sales volume and average selling
price assumptions. Indicative fair
value was downgraded by 23.9% to
RM1.28 following: (1) A downward
revision in our earnings forecasts;
and (2) A downgrade in our 1-year
forward target PER for the flat steel
product sector from 9x to 7x.
Downgraded from Outperform to
Market Perform, as valuation has
become rich following the downgrade
in our indicative fair value.
HSL Market Perform Market Perform 19 May 2010 FY12/10-12 net profit forecasts raised
by 3-12% largely to reflect higher
annual orderbook targets of RM600m
(from RM500m previously).
HSL Outperform Market Perform 26 May 2010 Recommendation upgraded as value

emerged after the recent correction
in share price.
ILB Outperform Outperform 13 May 2010 FY12/10-12 net profit forecasts raised
by 5-11% largely to reflect interest
savings from proceeds from the
disposal of Malaysian business.
IJM Land Outperform Outperform 27 May 2010 Downgraded FY03/11-12 net profit
forecasts by 0.7-20.7%. The removal
of contribution from the RM5bn
mixed Canal City project (due to the
delay in land acquisition) more than
offsets contribution from the new
project in Vietnam. Correspondingly,
indicative fair value based on RNAV
was trimmed from RM3.19 to RM3.06.
IOI Outperform Outperform 17 May 2010 Post-3QFY06/10 results, we have

Corporation lowered our FY10-12 EPS forecasts
by 4.5-6.6%, after: (1) lowering our
CPO price projection for FY10 to
RM2,350/tonne (from RM2,400); and
(2) raising our unallocated expenses
and minority interest projections.
Post-earnings revision, our SOP-
based target price is reduced slightly
to RM6.80 (from RM6.85).

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IJM Plantations Underperform Underperform 27 May 2010 Post-adjustment of 4QFY03/10

earnings, we tweaked our forecasts
by -2.0% to -4.6% for FY11-12 and
introduced our FY13 forecasts. Post
earnings revision, our fair value is
reduced slightly to RM2.30 (from
RM2.35), based on unchanged target
PER of 16.5x CY10 earnings.
Kinsteel Underperform Outperform 26 May 2010 FY12/10-12 net profit forecasts cut
target PER for the flat steel product
KNM Underperform Underperform 26 May 2010 We have cut our FY10-12 core EPS
forecasts by 22.1%, 21.8% and
27.0% respectively after factoring in:
1) lower average utilisation rates;
and 2) lower contribution from China,
Europe and Middle East. Accordingly,
our fair value was lowered to RM0.40
(vs. RM0.51 previously) based on
unchanged 13x FY10 PER.
KLCCP Market Perform Market Perform 18 May 2010 We tweaked our FY11-12 earnings
forecasts by 2% after updating for
the latest FY10 results. RNAV was
raised from RM4.05 to RM4.47 to
reflect the revaluation surplus.
Indicative fair value has been raised
to RM3.80 (from RM3.64) at a 15%
discount to its RNAV/share of RM4.47.
Kuala Lumpur Outperform Outperform 27 May 2010 Our forecasts are unchanged post
Kepong 2QFY09/10 results. However, we
revised our SOP-based fair value for
KLK down slightly to RM18.25 (from
RM18.40), after taking into account
the latest net debt figure.

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Kurnia Asia Outperform Market Perform 12 May 2010 Our FY12/10 forecasts have been
trimmed by 1.4% p.a., after taking
into account: 1) Lower expense; and
2) Higher effective tax rate. Fair
value remains unchanged at RM0.74,
while the stock was upgraded to
Outperform as valuations have
become attractive after the decline
in share price.
Lafarge Market Perform Outperform 27 May 2010 FY10-11 earnings forecasts cut by
18.0-35.7% p.a. to reflect: (1) Higher
production cost; and (2) Lower
average selling price assumptions.
Correspondingly, indicative fair value
was cut by 12.5% to RM6.83 (from
RM7.81) based on 14x revised FY12/
11 EPS of 48.8 sen.
LPI Capital Outperform Outperform 18 May 2010 FY10-12 earnings forecasts were
raised by 0.3-3.6% p.a. after taking
into account: 1) higher gross
premium growth of 21%; 2) higher
claims ratio of 48%; and 3) lower
management expense ratio of
18.5%. Consequently indicative fair
value was raised to RM16.70 (from
RM16.65)
MCIL Outperform Outperform 27 May 2010 We have lowered our FY11 and FY12
effective tax rate assumptions slightly
to around 25% p.a. (from around
27.5% p.a.). As a result our FY11
and FY12 earnings forecasts have
been raised slightly by 3.3% and
3.2% respectively. At the same time,
we have raised our FY11 and FY12
TE DPS forecasts to RM0.045 p.a.,
which represents a payout ratio of

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MNRB Underperform Market Perform 1 Jun 2010 Our FY11-12 claims ratio assumptions
were increased to 70-71% p.a. to
reflect the consistent uptrend since
FY2006. Consequently our earnings
forecasts for FY11-12 were lowered
by 33.0-49.3% p.a.. We have also
rolled over our valuations base year
to FY03/10 (from FY03/09
previously) and as a result, our fair
value has been raised to RM2.98
(from RM2.94), based on 0.7x FY03/
10 NTA. The stock was downgraded
to Underperform due to our cautious
view on its escalating claims ratio
and limited upside to our new fair
value.
Notion Vtec Outperform Outperform 20 May 2010 Given the volume loading of the HDD
segment, as well as the anticipation
of a robust demand for data storage,
we have re-adjusted our forecast
assumptions. Given the anticipation
of higher costs this year stemming
from higher start-up costs and
product testing, we have trimmed our
FY10 net profit forecast by 4.3% to
RM53.6m. However, given stronger
volume loading as well as tight cost
control and higher utilisation rate,
we have tweaked upwards our FY11-
12 net profit by 0.8% p.a.
respectively. After the revision in
earnings, our indicative fair value has
been raised to RM4.68, from
RM4.64, based on 10x target FY09/
11 PER.
Perwaja Underperform Outperform 26 May 2010 FY12/10-12 net profit forecasts cut

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Petronas Gas Market Perform Market Perform 12 May 2010 Our FY11-12 earnings estimates were
raised by 2.3% and 2.4% respectively
after updating our profit model.
Accordingly, we have tweaked
upwards slightly our DCF-based fair
value to RM10.71 (from RM10.51
previously).
Proton Outperform Outperform 27 May 2010 We have tweaked up Proton’s

valuation based on its end-March
2010’s asset position. Accordingly,
our indicative fair value has been
fine-tuned to RM5.50/share (from
RM5.48 previously), based on
stripped down book value.
QL Resources Outperform Outperform 25 May 2010 We tweaked down our earnings

forecasts by 1.0-1.2% for FY11-12
after updating our FY10 numbers. We
have also introduced our FY13
numbers. After rolling forward our
valuation target to CY11 and
updating our earnings forecasts, our
fair value was increased to RM4.60
(from RM3.93) based on unchanged
PER target of 13x (10% discount to
the consumer sector target PER of
14.5x).
Quill Capita Market Perform Outperform 27 May 2010 Based on our indicative fair value of
RM1.17, the stock presents an
implied capital gain of 14.7%, which
is in line with market return of
10.5%. Hence, we have downgraded
our rating on Quill Capita to Market
Perform.
RCE Outperform Outperform 27 May 2010 We have fine-tuned our FY03/11-12

earnings forecasts after updating for
the full-year results. We have also
raised our FY11-12 net DPS
projections to 1.53 sen p.a. from 0.75
sen p.a. given the higher-than-
expected final DPS.

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Sino Hua-An Underperform Market Perform 26 May 2010 Indicative fair value downgraded by
40.9% to RM0.25 following the
from Market Perform to
Underperform, as valuation has
become rich following the downgrade
in our indicative fair value.
Sime Darby Underperform Outperform 14 May 2010 Post-announcement regarding

provisions to be made for its oil and
gas division, we have reduced our
FY10 forecasts by 39.4%, but FY11-
12 forecasts remain unchanged.
Although the inclusion of the
RM964m provision would only reduce
our SOP-based fair value by RM0.16/
share, we reduced our fair value to
RM7.95 (from RM9.70), after
reducing the target PE for Sime’s
energy & utilities division to 13x CY10
(from 16x), taking into account the
higher risk associated with this
division, and after raising our holding
company discount to 25% (from
10%). We have downgraded our
recommendation to Underperform
(from Outperform).
Sunrise Outperform Outperform 14 May 2010 We cut our FY10-12 forecasts by

12.6-13.1% to factor in slower-than-
expected progress billings in MK28,
partly offset by a better take-up rate.
However, our indicative fair value is
maintained at RM2.76, or 30%
discount to its RNAV/share of RM3.94.
Ta Ann Outperform Outperform 27 May 2010 We reduced our earnings forecasts

by 11-15% for FY10-12 p.a. after:
1) increasing our FFB cost
assumption; 2) updating our US$/
MYR assumptions to RM3.25/US$ in
CY10 (from RM3.30/US$), RM3.20/
US$ in CY11 (from RM3.25/US$) and
US$); and 3) updating our FY09
numbers. Following our earnings
revision, our SOP-based fair value is
reduced to RM6.45 (from RM7.20)
based on unchanged 14x FY10
timber and plantation division
earnings.

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TM Market Perform Market Perform 31 May 2010 FY10-12 net profit forecasts trimmed
by 4.9-7.8%, largely to reflect an
upward revision in our effective tax
rate assumptions to 28-30% (from
26%). Fair value remains unchanged
at RM3.55 based on a required net
yield assumption of 5.5% on the
minimum RM700m dividends.
Unisem Outperform Outperform 6 May 2010 We have revised our FY10-11

EBITDA margin assumptions to 27.5%
and 28% (vs. 26% and 27%
previously) after factoring: 1) higher
contribution from Chengdu plant;
and 2) stronger demand for its
higher-margin QFN and module
packages; and 3) lower operating
costs. As such, we have raised our
FY10-11 net profit forecasts by 12.5%
and 5.9% respectively. Accordingly,
we have raised our fair value to
RM4.06/share (from RM3.74
previously) based on unchanged 15x
FY10 FD EPS.
Wah Seong Market Perform Outperform 1 Jun 2010 We have revised down our FY10-12
revenue contributions from
engineering division by 21%, 17%
and 6.3% respectively after factoring
lower-than-expected demand for
topside fabrication and compressors.
We have also trimmed our FY10-12
PBT margin assumptions to 25.5%,
26.0% and 27.5% respectively (from
29%, 28.5% and 28% previously) for
the engineering division. All in, we
have cut our FY10-12 earnings
projection by 15.7%, 11.0% and
4.5% respectively after factoring in
the above changes. Accordingly, we
have trimmed our fair value to
RM2.57/share (vs. RM3.09/share
previously), which is based on 16x
FY10 PER. Downgraded from
Outperform to Market Perform, as
valuation has become rich following
the downgrade in our indicative fair
value.

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WTKH Outperform Outperform 7 May 2010 Our earnings forecasts are tweaked
by 0.6%, 2.6% and -8.8% for FY10-
12 after: 1) updating our US$/MYR
assumptions to RM3.25/US$ in CY10
(from RM3.30/US$), RM3.20/US$ in
CY11 (from RM3.25/US$) and
US$); 2) increasing our yoy increase
in plywood prices assumptions to 18-
20% yoy in CY10 (from 10-14%); 3)
including the plantation division
earnings into our earnings forecasts;
and 4) updating our FY09
assumptions. Our fair value remains
unchanged at RM1.55 based on
unchanged 14x FY10 timber division
earnings.
WTKH Outperform Outperform 1 June 2010 We have reduced our earnings

forecast by 4.1-6.5% p.a. for FY10-
12 after reducing our log price
assumptions. Reduced our indicative
fair value for WTK to RM1.45 (from
RM1.55) based on unchanged 14x
CY10 EPS.
YTLP Market Perform Market Perform 31 May 2010 We have trimmed our FY10-13 net
profit forecasts by 3.5-4.3% to
account for the losses at the
investment holding and other
divisions, coupled with an upward
revision in our effective tax rate
assumptions to 25% p.a. (24% p.a.
previously). SOP-derived fair value,
however, has been raised slightly to
RM2.15 from RM2.12 after adjusting
for the latest debt and cash balances.

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Downdraft Of Fear; Longer-term Outlook Still
Positive
No Major Corporate Earnings Surprises
After three consecutive quarters of positive earnings surprises, the earnings reporting Most of the corporate
season that has just ended showed that the bulk of the corporate results that results were within our as
we covered were within our as well as market expectations. Of the 93 well as consensus
companies that we covered, 73 of the results (78.5% of the total) were within our expectations
expectations. Only nine companies (9.7% of the total) reported earnings that
exceeded our projections, while the remaining 11 results (11.8%) were below forecasts
(see Table 1). A fairly similar picture was reflected in the consensus numbers, where
66.7% of the reported earnings were within expectations, while those reported
earnings that were above and below forecasts were roughly equal, i.e. 17.2% and
16.1% of the total, respectively (see Table 2).
Unlike the previous three quarters, there were no significant revisions to our No significant revisions to
individual company’s earnings numbers during this results reporting season. our individual company’s
Indeed, the upgrade to downgrade ratio has fallen from 1.8 in the previous quarter earnings numbers during
to 0.78 during the current reporting season. This suggests that major earnings this results reporting
upgrades have already been factored into analysts’ projections. Hence, we are season
unlikely to see any significant positive surprises in earnings from the companies
under our coverage in the quarters ahead. In fact, the risk is that there could be
earnings disappointment in the quarters ahead, in our view, due to : (i) A weaker-
than-expected recovery in external demand caused by the debt crisis in Europe and
as effect of the global stimulus spending packages dissipates; (ii) Impact from a
stronger ringgit vis-a-vis the US dollar and the euro; (iii) Reduction/restructuring of
government subsidies, if it materialises; and (iv) Unforeseen write-downs of companies
similar to Sime Darby’s cost overruns for its engineering and utilities division.
Despite the lack of positive earnings surprises, the overall earnings growth Earnings growth might
momentum of the stocks under our coverage remains intact. Sequentially, net have peaked on a yoy
EPS for the FBM KLCI stocks under our coverage recovered to +7.8% qoq in the basis, although the
1Q, after having eased to +4.2% in 4Q 2009 (see Chart 1). On a yoy comparison, recovery momentum is
net EPS for the FBM KLCI stocks under our coverage continued to trend up and sustained
surged to a high of +32.1% in the 1Q, from +11.7% in the previous quarter. The
strong surge in EPS growth measured on a yoy basis, however, reflected partly
a low base effect, although it points to sustained recovery in corporate
earnings. Overall, the stronger earnings momentum in the recently concluded
reporting seasons was consistent with the recovery in the economy, where real
GDP registered a stronger-than-expected growth of 10.1% yoy in the 1Q, from
+4.4% in 4Q 2009. But the lack of positive earnings surprises and the anticipated
slower economic growth in the quarters ahead suggest that earnings growth
might have already peaked in the 1Q.
Chart 1
Net EPS Changes On A Sequential And Yoy Comparison’s
%
60
39.1
40 32.1
20 11.7 7.8
4.0
0
4.2
-20
-40 qoq yoy
-60
1QCY06
2QCY06
3QCY06
4QCY06
1QCY07
2QCY07
3QCY07
4QCY07
1QCY08
2QCY08
3QCY08
4QCY08
1QCY09
2QCY09
3QCY09
4QCY09
1QCY10
Note : Net EPS Changes For RHBRI Covered Stocks In FBM KLCI

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Table 1
Comparison Of Actual Earnings Reported For 1QCY10 Against RHBRI’s Forecast
Covered Stocks Covered In Line Above Below Total reported % reported
Building Material 8 3 1 3 7 88
Semiconductor/ IT 4 2 2 4 100
Oil & Gas 8 4 2 6 75
Timber 4 2 1 3 75
Consumer 11 10 10 91
Gaming 4 3 3 75
Media 4 2 1 3 75
Motor 4 4 4 100
Construction 8 7 7 88
Infrastructure 2 2 2 100
Transportation 6 4 1 1 6 100
Telecommunication 4 3 1 4 100
Power 3 2 2 67
Banks & Finance 9 7 2 9 100
Insurance 4 3 1 4 100
Property 11 7 1 8 73
Plantation 6 5 1 6 100
Manufacturing 8 3 2 5 63
Total 108 73 9 11 93 86
% of total reported 78.5 9.7 11.8 100
Table 2
Comparison Of Actual Earnings Reported For 1QCY10 Against Market Consensus
Covered Stocks Covered In Line Above Below Total reported % reported
Building Material 8 2 2 3 7 88
Semiconductor/ IT 4 1 3 4 100
Oil & Gas 8 4 2 6 75
Timber 4 2 1 3 75
Consumer 11 10 10 91
Gaming 4 1 1 1 3 75
Media 4 2 1 3 75
Motor 4 3 1 4 100
Construction 8 5 1 1 7 88
Infrastructure 2 1 1 2 100
Transportation 6 3 1 2 6 100
Telecommunication 4 3 1 4 100
Power 3 2 2 67
Banks & Finance 9 7 2 9 100
Insurance 4 2 2 4 100
Property 11 7 1 8 73
Plantation 6 4 1 1 6 100
Manufacturing 8 3 2 5 63
Total 108 62 16 15 93 86
% of total reported 66.7 17.2 16.1 100.0
Most Sectors Reported Earnings That Were Within Expectations
Unlike the previous three quarters, most of the industries reported earnings that Only the banking,
were generally within our and market expectations. During the quarter under semiconductor and
review, only the banking, semiconductor/IT and manufacturing sectors manufacturing sectors
reported earnings that were slightly above our as well as consensus reported earnings that
projections. For the banking sector, the better-than-expected results came from were slightly above
Affin Holdings on account of the low allowance for impairment on loans during the expectations, while
quarter, and Alliance Financial Group on the back of lower-than-expected loan loss building material and oil &
provisioning. On the other hand, better sales and margins bolstered earnings of both
gas results were below
the semiconductor and manufacturing industries. The building material and oil
forecasts
& gas sectors, in contrast, registered earnings that were below
expectations. The slightly poorer-than-expected earnings of the building
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material sector were on account of higher raw material costs for the steel product
manufacturers (Ann Joo Resources and Sino Hua-An International) and lower-than-
expected cement selling prices and higher-than-expected operating expenses for
Lafarge (M) Cement. For the oil & gas sector, KNM’s earnings suffered from weaker-
than-expected demand from China, Europe and Middle East and lower utilisation
rate, while that of Wah Seong from weaker-than-expected contribution from the
engineering divison given still weak demand from topsides fabrications and
compressors.
Most of the bigger cap companies reported earnings that were within our expectations. Among the bigger cap
During the quarter under review, only earnings of MISC, IOI Corporation and companies, results of
TM were below our projections. MISC’s earnings continued to be dragged down MISC, IOI Corp and TM
by the larger-than-expected losses at the container liner division on the back of the were below expectations
persistent triple-whammy of reduced volumes and freight rates, but increased
operating cost. The variance of IOI Corporation’s earnings against our forecast
came largely from the slightly lower-than-expected average crude palm oil price
achieved as well as higher-than-expected unallocated expenses and minority interest.
The weaker-than-expected results of TM, on the other hand, was caused by lower-
than-expected operating income and higher-than-expected tax rate.
Earnings Growth Remains Intact
Despite the lack of positive earnings surprises during the current reporting season, Net EPS for the FBM KLCI
the outlook for corporate earnings recovery remains generally intact. We project is on track to recover to
net EPS for the FBM KLCI stocks under our coverage to recover from -14.9% +18.3% in 2010 and
in 2009 to +18.3% in 2010 and sustain at +14.4% in 2011 (see Table 3). The sustain at +14.4% in 2011
recovery in earnings, though from a sharp contraction last year, was relatively broad
base, with sharp rebounds in earnings across key industries (see Table 4).
Table 3
Earnings Outlook And Valuations
FBM KLCI RHBRI’s Basket
COMPOSITE INDEX @ 1,285.01
2008a 2009a 2010f 2011f 2008a 2009a 2010f 2011f
31 May 2010
EBITDA Growth (%) 2.2 -6.6 21.9 11.7 4.5 -3.7 21.2 11.8
Pre-Tax Earnings Growth (%) -9.1 -10.0 29.3 20.0 -6.2 -2.8 23.8 19.2
Normalised Earnings Growth (%) 0.4 -10.1 22.6 14.4 -1.2 -6.0 23.2 15.1
Normalised EPS Growth (%) -0.8 -14.9 18.3 14.4 -4.2 -9.6 18.8 15.0
Prospective PER (x) 16.3 18.0 15.2 13.3 16.3 17.5 14.6 12.7
Price/EBITDA (x) 8.7 9.4 7.7 6.9 8.6 8.6 7.3 6.5
Price/Bk (x) 2.4 2.2 2.1 2.0 2.3 2.0 1.9 1.8
Price/NTA (x) 2.8 2.9 2.5 2.3 2.7 2.3 2.2 1.1
Net Interest Cover (x) 6.5 5.9 6.0 8.1 6.2 7.1 7.2 7.8
Net Gearing (%) 71.3 61.3 52.6 49.0 64.0 52.8 48.7 46.7
EV/EBITDA (x) 6.8 7.6 6.4 5.6 7.0 7.6 6.5 5.7
ROE (%) 15.2 12.4 14.6 14.9 13.6 11.7 13.3 14.0
Based on the latest FactSet Asian and IBES consensus numbers, the local market is Valuations are not cheap
now trading at comparable valuations vis-a-vis the Singapore and Indonesian markets vis-a-vis its regional
(see Table 5). Whilst it is still trading at a premium vis-a-vis other regional peers, peers, although it is a very
this, in our view, is a reflection of high domestic liquidity and strong participation by under-owned market by
the Government-linked funds, and will unlikely change in the foreseeable future. It foreign investors
is, however, still a very under-owned market by foreign investors and non-
strategic foreign equity ownership of the Malaysian market is estimated at below
21% currently (20.5% at end-March 2010), a sharp drop from a recent high of
27.5% at end-April 2007.

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Table 4
Sector Weightings & Valuations
EPS Growth EPS Growth PER

(%) (%) (x)
Covered Stocks Mkt Cap Weight Before After Before After# Recom
RMbn % FY10 FY10 FY11 FY11 FY10 FY11
Banks & Finance 182.5 25.6 19.5 19.7 14.5 14.4 13.8 12.1 Overweight
Plantation 102.3 14.3 3.1 0.5 23.8 24.3 18.5 14.9 Overweight
Telecommunications 100.6 14.1 15.9 16.8 10.9 11.3 16.5 14.8 Overweight
Power 58.3 8.2 24.4 29.6 9.1 10.2 11.5 10.5 Overweight
Gaming 48.1 6.7 8.6 19.8 14.2 6.0 13.0 12.3 Overweight
Oil & Gas 29.2 4.1 21.3 20.4 11.3 13.5 14.7 12.9 Overweight
Motor 17.1 2.4 44.1 58.1 7.0 9.3 9.8 9.0 Overweight
Property 15.4 2.2 18.0 20.1 25.6 17.8 11.7 9.9 Overweight
Insurance 3.4 0.5 17.6 19.3 11.3 11.4 9.5 9.0 Overweight
Semiconductors & IT 2.8 0.4 67.6 106.8 50.4 65.7 9.3 4.6 Overweight
Transportation* 53.3 7.5 22.3 41.3 13.9 -2.3 20.2 14.9 Neutral
Consumer 28.6 4.0 9.1 8.5 6.7 7.1 14.9 13.9 Neutral
Construction^ 18.4 2.6 26.6 29.3 7.6 7.5 15.6 14.5 Neutral
Infrastructure 17.6 2.5 -1.4 -1.4 48.2 47.6 13.4 9.1 Neutral
Media 14.1 2.0 38.4 39.6 17.9 7.0 12.2 11.4 Neutral
Building Materials 11.0 1.5 29.1 11.0 10.8 -30.3 11.2 7.7 Neutral
Manufacturing 7.8 1.1 32.7 33.1 16.1 19.1 11.2 9.4 Neutral
Timber 3.2 0.4 101.5 88.1 39.8 41.0 9.7 6.9 Neutral
713.8 100.0
* Exclude MAS earnings in 2010

Note : RHBRI’s basket
Table 5
Regional Comparisons
Malaysia Singapore Thailand Philippines Indonesia Hong Kong Taiwan Korea
FactSet Asian Consensus Trends report dated 28 May 2010
EPS growth (%)

2009a 5.5 -1.5 33.1 32.6 42.1 8.8 43.1 42.1
2010f 23.2 12.0 15.5 11.3 26.3 23.4 72.5 67.2
2011f 12.8 10.0 15.6 5.1 20.9 16.8 12.4 6.8
PER (X)
2009a 18.2 16.3 11.8 13.0 16.0 16.1 22.5 14.2
2010f 13.9 13.6 10.8 11.9 14.0 12.8 12.3 8.5
2011f 12.4 12.3 9.3 11.3 11.6 10.9 10.9 7.9
IBES Consensus dated 20 May 2010
EPS growth (%)
2009a -19.2 -9.0 28.0 19.6 5.2 17.3 46.8 -13.6
2010f 29.7 22.5 16.0 19.7 31.8 17.4 86.6 56.6
2011f 14.6 12.6 17.0 11.5 19.8 12.7 14.4 9.5
PER (X)
2009a 18.8 16.6 12.9 15.3 18.7 15.4 24.8 24.1
2010f 14.2 13.4 11.2 12.8 14.1 13.0 13.5 9.2
2011f 12.4 11.9 9.6 11.5 12.0 11.5 11.8 8.4
Performance (%)
2008 (yoy) -39.3 -49.2 -47.6 -48.3 -50.6 -48.3 -46.0 -40.7
2009 (yoy) +45.2 +64.5 +63.2 +63.0 +87.0 +52.0 +78.3 +49.7
2010 (ytd)* +1.0 -5.0 +2.2 +7.2 +10.4 -9.6 -9.9 -2.5
* as at 31st May 2010

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The Fear Returns; Markets Under Siege
Despite the sharp double-digit 10.1% yoy surge in real GDP growth registered in Downdraft of fear sparked
the 1Q, the market appears to be caught in a downdraft of fear sparked off by Europe’s sovereign
off by Europe’s sovereign debt crisis. While a bailout package was put in debt crisis
place to deal with Greece’s immediate funding needs, doubts linger as to whether
its government has the political will to push through the accompanying austerity
measures in the face of public protests. And the other concern is whether the
package will send Greece into another economic recession. Similarly, the massive
750 billion euros emergency stabilisation loan package to fund European countries
that could come under speculative attacks met with scepticism. Investors were
fearful that by the time all the approvals needed are secured, it may be a little
late to stabilise the whole region. In addition, individual country’s debt-cutting
measures also threaten to undermine the region’s growth.
Subsequently, investor confidence took a turn for the worse when Germany Credit tightening in China
unexpectedly banned naked short-selling and prohibited speculation against European also created concerns on
government bonds using credit default swaps. These created uncertainty about the sustainability of its
regulations affecting financial markets which, coupled with US regulators looking economic expansion
at restricting risk-taking activities of banks, sent financial markets reeling. In
addition, credit tightening measures implemented by China to cool down
the surge in asset prices also created concerns on the sustainability of
China’s economic expansion that threatens to undermine the global economic
recovery.
The heightened market anxiety is reflected in the sudden surge in the gauges like The heightened market
the Chicago Board Options Exchange’s volatility index, or the VIX index, frequently anxiety is reflected in the
known as Wall Street’s fear gauge, which surged above the 45 mark for the first VIX index
time since March 2009 (see Chart 2), after hitting its lowest level for more than
two years on April 12 at 15.23. Similarly, the spread between the London Interbank
Offered Rate (Libor) and the Overnight Indexed Swaps (OIS) — a measure of
banks’ willingness to lend to each other — reached 31.5 basis points on 26 May,
its highest since July last year.
Chart 2
Sudden Surge In The VIX Index Points To Market Anxiety
Index
60
55
50
45
40
35
30
25
20
15
10
04/01/2009
21/01/2009
06/02/2009
25/02/2009
13/03/2009
31/03/2009
17/04/2009
05/05/2009
21/05/2009
09/06/2009
25/06/2009
14/07/2009
30/07/2009
17/08/2009
02/09/2009
21/09/2009
07/10/2009
23/10/2009
10/11/2009
27/11/2009
15/12/2009
04/01/2010
21/01/2010
08/02/2010
25/02/2010
15/03/2010
31/03/2010
19/04/2010
05/05/2010
21/05/2010
Risk Is A Sharper-than-expected Slowdown In 2H, Not A “Double-

dip”
Whilst Europe’s sovereign debt problems and China’s credit tightening plans have Market optimism on the
dampened optimism about the health of the world economy, we believe the risk global economic recovery
of a “double-dip” is manageable. This is mainly on account of : (i) Emergency dampened, although we
stabilisation packages have already been put in place in Europe to prevent contagion believe the risk of a
and confidence from spiralling downward. Consequently, the European debt “double-dip” is
problems will unlikely snowball into a much bigger issue that will jeopardise the manageable

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global economic recovery; (ii) Many of the eastern and central European countries
have already suffered double-digit economic contraction last year and are
undergoing restructuring; (iii) With US and Asia ex-Japan economies firmly on
recovery path, Germany, being financially stable and the largest economy in
Europe, can export and provide the cushion to stabilise the European region; (iv)
More sustainable US economic recovery where consumer spending is picking up
and labour market conditions are improving; and (v) Economic recovery in Asia
ex-Japan is building momentum relatively well and appears sustainable in the
absence of a major exogenous shock.
Nevertheless, the austerity measures undertaken by each of the major economies The risk from the fallout
in Europe, such as Greece, Spain, Portugal, Italy and UK, to reduce the fiscal of the European crisis is a
deficit and restructure the debt suggest that the economic recovery could stall sharper-than-expected
and fall back in these countries. This would imply weaker external demand for slowdown in the global
export-dependent economies and hence, a significant risk of a sharper-than- economy in the 2H
expected slowdown in the global economy in the 2H of 2010 that could
persist into the 1H of 2011, in our view. Malaysia would not be spared as
Europe accounts for about 10.6% of its total exports directly which have been
growing robustly by 29.1% yoy in the 1Q. At the same time, the indirect impact
via the other export markets such as China where Europe is its largest export
market, could also be significant. Consequently, we continue to anticipate real
GDP slowing down to 4.8% yoy in the 2H, from +8.8% in the 1H.
Lack Of Domestic Leads
As the economic growth has peaked and will likely moderate in the 2H, and in Meanwhile, the lack of
the absence of major positive corporate earnings surprises, the market may have domestic leads suggests
already fallen into a downshift, in our view. The impending move by the that external factors will
Government to reduce/restructure subsidies (purportedly over a period of five likely dominate market
years), though positive in increasing efficiency in the allocation and utilisation of movements in the near
the country’s resources over the longer term, will raise cost of doing business and term
impact consumer sentiment and dampen market performance in the near term.
Under such circumstances, the impending release of the Tenth Malaysia Plan,
2011-15 in June 2010 and the second part of the New Economic Model, will
unlikely excite the market and reverse the market direction in the near term.
Greater Volatility And A Near-term Market Downshift
On balance, more negative than positive news flow ahead suggests that global We expect the market to
equities may move into a phase of greater volatilities, which in our view, move into a phase of
could persist for the next three to four months until a clearer picture emerges on greater volatility over the
the strength of the global economic recovery. Although we are looking at the FBM next three to four months
KLCI trading towards 1,200 in the immediate term (i.e. another 6.6% downside with more downside risk
from the current level), the risk of more downside is likely to be greater than the
potential for an upside surprise in the immediate term. Whilst the FBM KLCI
benchmark has bounced back by 20.22 points and 15.85 points on 27 and 31 May
to 1,285.01 currently, after nine consecutive days of losing streaks since turning
downwards on 13 May, we expect the market to remain volatile. The downside,
as highlighted by RHBRI’s technical research, is towards the technical support
levels of 1,229 and 1,154.
Whilst we envisage a strong support at the important psychological 1,200 level,

there is still a risk of the market overshooting on the downside in the near term
given the adverse external developments. If the FMB KLCI fails to hold at the
important psychological threshold of 1,200, we would expect a strong technical
support at 1,154. This implies a 2010 PER of 13.3x based on the stocks under
our coverage, which coincidentally is one standard deviation (SD) below the
average one-year forward PER for the FBM KLCI stocks since 2000 (estimated to
be around 15x).

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Value Re-emerging As Long-term Outlook Still Positive
Looking beyond this downshift, we believe the long-term outlook for the market Longer-term outlook of
is still positive given our expectation of the sustained economic and corporate the market, however,
earnings growth. We believe the global economic recovery is more sustainable than remains intact ...
feared, although there is a risk of a sharper-than-expected slowdown in the 2H.
Domestically, the Government’s push for reduction/restructuring of subsidies,
liberalisation and the implementation of a new economic model should bode well for
a more market-oriented economic structure that could gradually induce greater
foreign participation in the local market. We also expect more M&A activities under
such an environment to spice up activities in the local market.
On balance, while we expect a potential downshift of the market in the near term Our year-end FBM KLCI
and envisage greater volatility in the market over the next three to four months, we target remains unchanged
believe the market will likely come back towards the 4Q when there is more certainty at 1,400
on the strength of the global economic recovery. Consequently, our year-end FBM
KLCI target remains unchanged at 1,400 or 14.5x 2011 earnings.
Market Strategy : Accumulate On Weakness And Ride The Volatility
In our view, the long-term economic picture remains positive although we acknowledge We view the market
that the revival of past concerns about the strength of the global economic recovery downshift as an
will continue to cause volatility in the market. We believe investors should view opportunity to accumulate
the downshift in the market as an opportunity to buy on weakness although fundamentally-robust
we recommend focusing on fundamentally-robust stocks with positive and visible stocks on weakness
earnings outlook, good management and are attractively valued. A list of our top
picks is reflected in Table 6. Meanwhile, investors may find greater price stability
in companies that have little or hedged exposure to overseas markets or imported
costs. These domestic plays include Maxis, TNB, PLUS, Allianz, AEON, KFC, KPJ and
B-Toto. In addition, Asian consumer plays such as Carlsberg (expanding in Singapore),
Axiata (expanding mobile footprint across Asia) and Parkson (expanding in china and
Vietnam) are also likely to be relatively sheltered given the higher savings rate,
growing consumption spending and large young population.
Table 6
RHBRI’s Top Picks
Fair Mkt EPS EPS GWTH PER P/BV P/CF GDY

FYE Price Value Cap (sen) (%) (x) (x) (x) (%)
31/5/2010 (RM/s) (RM/s) (RM Mil) FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY10 FY10
Maybank Jun 7.34 8.96 51,950 51.3 60.7 35.7 18.1 14.3 12.1 1.9 n.a. 4.0
CIMB Dec 6.78 8.12 47,891 47.8 56.3 20.2 17.9 14.2 12.0 2.2 n.a. 1.8
Maxis Dec 5.22 6.20 39,150 33.2 36.2 6.6 9.1 15.7 14.4 3.9 10.2 6.4
Tenaga Aug 8.35 10.40 36,185 70.7 80.9 42.0 14.4 11.8 10.3 1.3 4.6 3.4
Genting Dec 6.80 8.95 25,193 53.4 56.4 68.8 5.7 12.7 12.1 1.6 13.6 1.4
KLK Sep 15.90 18.25 16,973 87.5 123.3 23.7 40.8 18.2 12.9 2.8 14.6 2.8
Top Glove Aug 12.28 15.50 3,730 89.0 96.2 55.3 8.1 13.8 12.8 3.6 11.3 3.7
IJM Land^ Mar 2.19 3.06 2,416 18.4 34.4 88.5 87.2 11.9 6.4 1.3 4.5 0.9
Media Prima D e c 2.12 2.55 2,004 16.3 18.0 +>100 10.1 13.0 11.8 2.1 6.6 4.7
Sunway City D e c 3.83 5.33 1,800 34.8 38.8 9.8 11.6 11.0 9.9 0.8 7.0 2.1
Unisem Dec 2.79 4.06 1,447 27.1 36.1 +>100 33.5 10.3 7.7 1.4 3.3 1.8
Kossan Dec 7.27 10.74 1,162 82.6 103.0 10.3 24.7 8.8 7.1 2.4 7.7 1.4
Faber Dec 2.43 3.40 882 26.5 24.2 16.4 -8.8 9.2 10.0 1.9 5.7 2.9
Evergreen Dec 1.48 2.35 759 21.3 23.3 26.1 9.4 6.9 6.3 1.0 9.8 3.4
Notion Vtec Sep 2.73 4.68 422 34.7 46.8 35.3 35.1 7.9 5.8 2.0 5.8 2.4
Daibochi Dec 2.94 4.20 223 35.1 38.0 16.9 8.3 8.4 7.7 1.6 7.0 7.7
^ FY10-11 valuations refer to those of FY11-12

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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 RM3.58 is based on 13x CY10 EPS
quarters with improvements in underlying or 3x discount to sector benchmark of 16x to
Trading Buy trends (loan growth, NIM and asset account for lower ROE as well as low liquidity
quality). Furthermore, capital ratios and market capitalisation.
RM2.90 remain healthy, thus raising the prospects
of higher dividend payout ahead. Finally,
Affin announced that it has submitted to
BNM for approval a bid for EON Cap. The
bid, if successful, would see the enlarged
group move ahead of HL Bank in terms of
total assets.
AFG We expect AFG to post strong earnings Fair value of RM3.47 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)
RM2.78 positive impact from a rate hike; and 4)
absence of CLO 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 dividend payout of 35-40% for
improve competitiveness, augment ROE FY11 and at least 40% beyond FY11.Fair value
Outperform and raise cross-border opportunities over of RM6.13 is based on sector benchmark of
the longer term. While AMMB should 16x CY10 EPS.
RM4.89 benefit 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 (2.4) 16.5 2.1 2.2
2010 +19.7 13.8 2.0 3.2
2011 +14.4 12.1 1.8 3.6
31 December
2009(a) 1274.2 371.8 24.9 +27.0 11.7 n.a. 0.9 8.5 2.9 (3.7)
2010(f) 1354.3 411.0 27.5 +10.5 10.5 n.a. 0.9 8.5 2.9 +9.4
2011(f) 1418.7 442.1 29.6 +7.6 9.8 n.a. 0.9 8.5 2.9 +73.0
2012(f) 1491.3 473.6 31.7 +7.1 9.1 n.a. 0.9 8.5 2.9
Issued capital of 1,494.4m ordinary shares of RM1.00 each
Average daily volume (000) : 2,024.8 shares
Market capitalisation (RMm) : 4,334
31 March
2010(a) 931.6 301.4 19.5 +30.6 14.3 n.a 1.5 8.5 3.1 (11.2)
2011(f) 1172.2 377.5 24.4 +25.2 11.4 n.a 1.3 8.5 3.1 (0.4)
2012(f) 1261.9 411.7 26.6 +9.1 10.5 n.a 1.2 8.5 3.1 +27.5
2013(f) 1344.6 451.3 29.2 +9.6 9.5 n.a 1.2 8.5 3.1
Average daily volume (000) : 3,872.7shares
31 March (Fully Diluted)

2009(a) 3184.4 860.8 31.1 +28.7 16.0 n.a. 1.7 8.0 1.6 +2.1
31 March
2010(a) 3893.4 1008.6 34.7 +11.7 14.1 n.a. 1.5 12.5 2.6 (1.6)
2011(f) 4166.0 1201.4 39.9 +14.8 12.3 n.a. 1.4 18.7 3.8 (1.4)
2012(f) 4479.1 1376.8 45.7 +14.6 10.7 n.a. 1.3 21.3 4.4 +45.5
2013(f) 4778.0 1495.6 49.6 +8.6 9.9 n.a. 1.3 17.0 3.5
fully diluted EPS (sen)
Note : Stock prices @ 31 May 2010

Banking (Cont'd)
Company Short-Term/Long-Term Drivers Earnings Comment/Fair Value
CIMB Post transformation of CIMB Niaga and CIMB Fair value of RM8.12 is based on 17x CY10
Thai, the group is now ready to further scale up EPS or 1x premium to sector benchmark of
Outperform its regional platforms for the next phase of 16x to reflect its status as a growing
earnings growth. Among the domestic banks, regional universal bank.
RM6.78 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 markets 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.
RM7.01 could reject the offer in the EGM, thereby
“forcing” HL Bank to increase its offer price. In
addition, competing bids (e.g. Affin) could result
in a higher offer price as well.
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 six
quarters. 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.
RM8.55 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 39.8 +37.5 17.1 n.a. 2.4 12.3 1.8 (4.4)
2010(f) 11865.8 3373.2 47.8 +20.2 14.2 n.a. 2.2 12.3 1.8 +0.7
2011(f) 12951.7 3976.6 56.3 +17.9 12.0 n.a. 2.0 12.3 1.8 +55.0
2012(f) 14164.6 4619.1 65.4 +16.2 10.4 n.a. 1.8 12.3 1.8
31 December
2009(a) 1423.3 305.5 49.2 +>100 14.2 n.a. 1.4 7.7 1.1 (0.8)
2010(f) 1577.4 373.1 53.8 +9.4 13.0 n.a. 1.3 10.0 1.4 +0.1
2011(f) 1678.6 422.4 60.9 +13.2 11.5 n.a. 1.1 10.0 1.4 +75.3
2012(f) 1780.4 468.8 67.6 +11.0 10.4 n.a. 1.0 10.0 1.4
Issued capital of 693.2m ordinary shares of RM1.00 each
Average daily volume (000) : 631.2 shares
30 June
2009(a) 2066.0 849.2 53.7 +14.5 15.9 n.a. 2.4 24.0 2.8 (1.7)
2010(f) 2125.6 892.7 56.5 +5.1 15.1 n.a. 2.1 24.0 2.8 +1.8
2011(f) 2227.3 894.2 56.6 +0.2 15.1 n.a. 1.9 24.0 2.8 +51.3
2012(f) 2326.9 945.9 59.9 +5.8 14.3 n.a. 1.8 24.0 2.8

Banking (Cont'd)
Maybank Earnings continue to gain traction on the Fair value of RM8.96 is based on sector benchmark
back of the strong increase in operating of 16x CY10 EPS.
Outperform income (both interest and non-interest)
and lower LLP. We expect its ROE to jump
RM7.34 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
deserve to trade 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
RM11.46 (F) interest rate. While the bank should
benefit from the adoption of FRS139 and
RM11.44 (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 RM1.18 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.
RM0.63 (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) 19.4 n.a. 1.7 8.0 1.1 (4.2)
2010(f) 12608.2 3634.4 51.3 +35.7 14.3 n.a. 1.9 29.0 4.0 +4.4
2011(f) 13425.1 4292.7 60.7 +18.1 12.1 n.a. 1.8 35.0 4.8 +38.5
2012(f) 14442.6 4823.4 68.2 +12.4 10.8 n.a. 1.6 39.0 5.3
31 December
F L F L F L
2009(a) 6109.9 2517.3 73.3 (4.7) 15.6 /15.6 n.a. 4.5 /3.6 55.0 4.8 +4.7 /+4.7
F L F L F L
2010(f) 6701.9 2872.0 82.0 +11.8 14.0 /14.0 n.a. 3.8 /3.1 60.0 5.2 +4.0 /+3.6
F L F L F L
2011(f) 7250.3 3211.7 91.7 +11.8 12.5 /12.5 n.a. 3.3 /2.8 65.0 5.7 +33.7 /+35.0
F L F L
2012(f) 7786.6 3476.0 99.2 +8.2 12.5 /11.5 n.a. 2.9 /2.5 70.0 6.1

F L
Average daily volume (000) : 1,697.5 /3,064.0 shares
31 March
2010(a) 255.6 81.1 10.4 +10.8 6.0 8.1 1.2 2.0 3.2 (5.3)
2011(f) 262.0 84.6 10.8 +4.3 5.8 8.2 1.0 2.0 3.2 (6.0)
2012(f) 271.2 88.5 11.3 +4.6 5.5 8.6 0.8 2.0 3.2 +11.6
2013(f) 286.2 90.9 11.6 +2.8 5.4 9.0 0.8 2.0 3.2
Market capitalisation (RMm) : 489

Building Materials Neutral
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).
Earnings of steel players, on the other hand, will likely weaken in the 2H due to: (1)
Increased concerns on overcapacity and weaker price outlook; and (2) Weaker replenishing
activities on the back of heightened risks of a sharper-than-expected slowdown in global
economy.
Ann Joo ST: Performance to peak in 2QFY12/10 (on FY12/10 earnings will be supported by
higher sales volumes, coupled with margin bumper earnings in 1H stemming from higher
Underperform expansion arising from selling prices that international steel prices.
outpaced its raw material costs). We believe
Fair value is RM2.25 based on 7x FY12/11
RM2.42 earnings are likely to weaken significantly in
fully-diluted EPS of 32.1 sen.
2H on the back of: (1) Heightened risks of a
sharper-than-expected slowdown in global
economy; and (2) Falling input prices (such as
iron ore and scraps) that will hurt both
consumption and prices of steel products.
LT: Diversification into the production of
higher-value steel products that will boost
profitability.
ST: Performance to peak in 2QFY12/10 (on FY12/10 earnings will be supported by
CSC Steel
higher sales volumes, coupled with margin bumper earnings in 1H stemming from higher
expansion arising from selling prices that international steel prices.
Market Perform
outpaced its raw material costs). We believe
Fair value is RM1.82 based on 7x FY12/11 EPS
earnings are likely to weaken significantly in
RM1.80 of 26.0 sen.
2H on the back of: (1) Heightened risks of a
LT: Sustained economic growth that will boost
demand and prices of flat steel products.
Hiap Teck ST: Expecting slower FY07/11 on the back of: Fair value is RM1.28 based on 7x CY2011 EPS
Heightened risks of a sharper-than-expected of 18.3 sen.
Market Perform slowdown in global economy; and (2) Falling
input prices (such as iron ore and scraps) that
RM1.20 will hurt both consumption and prices of steel
products.
LT: (1) Diversification into the production of
API pipes that command higher profit margin;
and (2) Potential supply contract with MITCO
that will boost demand for American
Petroleum Institute (API) certified electric
resistance welded (ERW) pipes.
Kinsteel ST: Performance to peak in 2QFY12/10 (on FY12/10 earnings will be boosted by: (1)
higher sales volumes, coupled with margin Higher international long steel product prices;
Underperform expansion arising from selling prices that (2) Speedy implementation of public
outpaced its raw material costs). We believe construction projects that will boost domestic
RM0.83 earnings are likely to weaken significantly in demand for long steel products; and (3)
2H on the back of: (1) Heightened risks of a Higher contribution at 37.3%-owned Perwaja.
fully-diluted EPS of 9.2 sen.
LT: Conversion of existing idle facilities to
production capacity that will boost scale of
operation.

3 MTHS
12 MTHS
Sector Average
2009 (19.3) 14.5 8.1 1.3 5.5
2010 +11.0 11.2 6.8 1.4 6.0
2011 (30.3) 7.7 5.6 0.9 6.3
31 December
2009(a) 1303.0 31.6 6.0 (77.3) 40.0 18.5 1.3 9.0 3.7 (15.7)
2010(f) 2357.9 185.6 35.5 +>100 6.8 6.1 1.1 24.0 9.9 (13.6)
2011(f) 3058.1 208.6 39.9 +12.4 6.1 6.0 1.1 27.0 11.2 +25.4
2012(f) 3081.9 205.8 39.4 (1.3) 6.1 5.8 1.0 27.0 11.2
31 December
2009(a) 971.9 91.2 24.0 +55.1 7.5 2.6 0.9 20.0 11.1 (7.2)
2010(f) 1283.7 92.8 24.4 +1.8 7.4 1.7 0.8 14.0 7.8 +4.0
2011(f) 1373.6 98.6 26.0 +6.3 6.9 0.8 0.8 15.0 8.3 +71.4
2012(f) 1479.8 108.2 28.5 +9.7 6.3 n.m 0.8 15.0 8.3
31 July
2009(a) 1159.3 17.4 5.3 (88.7) 22.6 10.9 0.7 1.0 0.8 (13.7)
2010(f) 1531.8 50.7 15.5 +>100 7.8 9.0 0.6 2.0 1.7 (11.1)
2011(f) 1736.2 59.0 18.0 +16.3 6.7 8.1 0.6 2.5 2.1 +27.7
2012(f) 1816.9 61.0 18.6 +3.4 6.4 7.7 0.5 2.5 2.1
31 December
2009(a) 1928.1 (13.7) (1.3) (>100) n.m. 17.0 1.0 1.0 1.2 (18.3)
2010(f) 1615.7 83.3 7.9 +>100 10.4 5.0 0.9 1.0 1.2 (17.5)
2011(f) 1990.7 96.7 9.2 +16.1 9.0 4.6 0.8 1.0 1.2 (9.3)
2012(f) 1990.7 99.2 9.4 +2.6 8.7 4.1 0.7 1.0 1.2

Building Materials (Cont'd)
Lafarge ST: (1) Higher domestic cement 2HFY12/10 performance to improve on: (1)
consumption stemming from the Higher domestic cement selling prices; and (2)
Market Perform implementation of large-scale public Higher domestic cement consumption.
projects and an anticipated pick up in
RM6.58 property development activities; and (2)
EPS of 44.8 sen.
Lower energy prices, in particularly, coal,
diesel and electricity.
LT: Sustained public spending in Malaysia
and the region.
Perwaja ST: Performance to peak in 2QFY12/10 (on FY12/10 performance to turn around,
higher sales volumes, coupled with margin underpinned by: (1) Higher average selling
Underperform expansion arising from selling prices that prices; (2) Higher sales volumes; and (3)
outpaced its raw material costs). We Lower raw material cost.
RM1.20 believe earnings are likely to weaken
Fair value is RM1.12 based on 7x fully-diluted
significantly in 2H on the back of: (1)
FY12/11 EPS of 16.0sen.
Heightened risks of a sharper-than-
expected slowdown in global economy; and
(2) Falling input prices (such as iron ore
and scraps) that will hurt both consumption
and prices of steel products.
LT: Conversion of existing idle facilities to
production capacity that will boost scale of
operation.
Sino Hua-Ann ST: Volatile steel output and prices in China FY12/10 to return to the black, underpinned
will continue to weaken the pricing power by: (1) Rising steel production in China will
Underperform of metallurgical coke producers. boost demand, and hence prices of
metallurgical coke (one of the key ingredients
LT: (1) Recovery in crude oil prices, that
RM0.34 in producing crude steel in China); and (2)
will in turn boost prices of Sino Hua-An’s
Higher by-product prices.
by-products; and (2) A full-steam recovery
in steel consumption, which will boost Fair value is RM0.25 based on 7x FY12/11 3.6
demand, and hence prices of metallurgical sen.
coke.
YTL Cement ST: (1) Higher domestic cement CY2011 earnings to improve on the back of:
consumption stemming from the (1) The implementation of public construction
Outperform implementation of large- scale public projects; and (2) Stronger property
projects and an anticipated pick up in development activities that will boost domestic
RM3.86 property development activities; and (2) cement consumption.
Lower energy prices, in particularly, coal,
Fair value is RM5.51 based on 11x CY2010
diesel and electricity.
EPS of 50.1 sen.
LT: (1) Sustained public spending in
Malaysia and the region; and (2)
Elimination of excess capacity in Zhejiang
province, China, which will in turn boost
cement prices in that region.

3 MTHS
12 MTHS
31 December
2009(a) 2483.1 412.2 48.5 +12.1 13.6 8.7 1.8 38.0 5.8 (2.5)
2010(f) 2886.2 304.5 35.8 (26.1) 18.4 11.4 1.8 30.0 4.6 +4.8
2011(f) 3040.7 414.5 48.8 +36.1 13.5 8.5 1.8 30.0 4.6 +30.3
2012(f) 3042.2 429.0 35.8 (26.5) 18.4 8.5 1.8 30.0 4.6
31 December
2009(a) 1571.2 (115.5) (20.6) (>100) n.m. n.m 0.7 0.0 0.0 (14.9)
2010(f) 2095.9 75.4 13.5 +>100 8.9 7.6 0.7 0.0 0.0 (14.3)
2011(f) 2193.4 91.6 16.4 +21.5 7.3 6.7 0.6 0.0 0.0 (8.4)
2012(f) 2193.4 101.6 18.1 +10.9 6.6 6.2 0.6 0.0 0.0
31 December
2009(a) 1280.3 (20.6) (1.8) (>100) n.m. 20.6 0.5 0.0 0.0 (25.6)
2010(f) 1667.7 39.2 3.5 +>100 9.6 6.7 0.5 0.0 0.0 (30.2)
2011(f) 1896.6 39.8 3.5 +1.4 9.5 6.4 0.5 0.0 0.0 (36.2)
2012(f) 2013.1 42.2 3.8 +6.1 8.9 5.9 0.5 0.0 0.0
30 June
2009(a) 1972.8 240.5 51.3 +74.8 7.5 4.2 1.2 30.0 7.8 (10.6)
2010(f) 1843.1 246.5 50.1 (2.2) 7.7 3.7 1.2 30.0 7.8 (5.9)
2011(f) 1914.9 268.1 54.5 +8.8 7.1 3.1 1.1 30.0 7.8 (3.0)
2012(f) 1922.1 258.2 52.5 (3.7) 7.4 2.6 0.9 30.0 7.8

Construction Neutral
Sector Rating : On one hand, we foresee improved investors’ 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. On the other hand, certain
negative elements remain such as: (1) The still 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
RM0.55 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
RM0.98
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.
RM2.95 projects.
Hock Seng Lee ST: Outstanding construction Sustained growth in EPS in FY12/10-11 as key
orderbook of RM1.3bn. contracts hit substantial billing milestones.
Outperform LT: Sustained public spending in East Fair value is RM1.61 based on 12x FY12/10 EPS, in
Malaysia. line with our benchmark 1-year forward target PER
RM1.41
for the construction sector of 10-14x.
IJM Corporation ST: Outstanding construction EPS to resume growth in FY03/11 on recognition of
orderbook of RM3.6bn. profits from higher-margin newer contracts,
Market Perform LT: Sustained public spending in coupled with stronger property and plantation
Malaysia, ability to win overseas profits.
RM4.78 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 (4.0) 20.3 12.7 1.6 2.6
2010 +29.3 15.6 11.3 1.5 2.6
2011 +7.5 14.5 10.7 1.4 2.6
31 December
2009(a) 137.5 9.8 11.4 (14.7) 4.8 4.4 0.6 1.5 2.7 +3.8
2010(f) 175.0 11.0 13.1 +15.0 4.2 3.5 0.5 1.5 2.7 (1.8)
2011(f) 164.0 12.8 15.2 +16.7 3.6 2.9 0.5 1.5 2.7 +37.5
2012(f) 173.9 14.2 16.9 +11.1 3.2 2.4 0.4 1.5 2.7
30 June
2009(a) 184.6 18.1 15.2 +56.3 6.4 n.m 1.2 5.5 5.6 (8.9)
2010(f) 176.4 22.4 13.6 (10.1) 7.2 n.m 1.4 5.5 5.6 (8.9)
2011(f) 263.0 28.0 16.1 +18.1 6.1 n.m 1.2 5.5 5.6 +0.4
2012(f) 374.0 35.9 19.5 +21.2 5.0 n.m 1.1 5.5 5.6
31 July
2009(a) 2727.3 193.7 9.7 (40.1) 30.3 31.9 2.0 8.0 2.7 (1.7)
2010(f) 2958.5 277.0 13.6 +40.4 21.6 27.7 1.9 12.0 4.1 +5.4
2011(f) 3370.5 326.6 16.1 +17.9 18.3 21.7 1.8 12.0 4.1 +12.6
2012(f) 3194.9 331.3 16.3 +1.5 18.1 20.5 1.8 12.0 4.1
31 December
2009(a) 375.0 56.3 10.2 +35.3 13.8 8.8 2.7 2.4 1.7 (7.2)
2010(f) 529.5 74.4 13.4 +30.8 10.5 6.3 2.2 2.5 1.8 +6.0
2011(f) 652.5 90.3 16.2 +21.4 8.7 4.7 1.8 2.5 1.8 +69.9
2012(f) 742.5 98.4 17.7 +8.9 8.0 6.0 1.5 2.5 1.8
31 March
2010(a) 4013.5 263.6 20.0 (14.8) 23.9 11.0 1.3 11.0 2.3 (3.0)
2011(f) 5984.4 428.6 31.7 +58.9 15.1 8.7 1.2 11.0 2.3 +7.2
2012(f) 5585.6 440.2 32.6 +2.7 14.7 8.2 1.1 11.0 2.3 +16.4
2013(f) 5483.3 462.2 34.2 +5.0 14.0 7.7 1.1 12.0 2.5

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

orderbook of RM1.2bn. Ability to bag construction margins are to improve.
Trading Buy federal land. Fair value is RM2.06 based on “sum of parts”,
LT: Sustained public spending in valuing its construction business at 10x FY12/10
RM1.50 Malaysia, profitable property earnings, in line with our benchmark 1-year
development on federal land. forward target PER 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
orderbook of RM2bn, property profits strong construction and property profits.
Outperform from Singapore, and sales of
Fair value is RM1.69 based on 10x fully-diluted
aggregates in Malaysia and Trinidad &
FY12/10 EPS of 16.9sen, in line with our
RM1.44 Tobago.
benchmark 1-year forward target PER for the
LT: Sustained public spending in construction sector of 10-14x.
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 RM2.8bn. orderbook.
Underperform
LT: Sustained public spending in Fair value is RM2.10 based on 12x fully-diluted
Malaysia, ability to rebuild its FY12/10 EPS of 17.5sen, in line with our
RM2.68
reputation (after the high-profile benchmark 1-year forward target PER of 10-14x
dismissal as contractor for the for the construction 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 39.5 19.9 2.0 0.0 0.0 (4.5)
2010(f) 1276.5 96.4 7.1 +86.4 21.2 14.4 1.6 0.0 0.0 +7.1
2011(f) 1325.6 104.1 7.6 +8.0 19.6 13.1 1.5 0.0 0.0 +20.0
2012(f) 1301.4 113.0 8.3 +8.5 18.1 11.7 1.4 0.0 0.0
31 December
2009(a)** 2589.9 109.3 13.6 (27.0) 10.6 7.1 1.4 2.3 1.6 (5.9)
2010(f) 2406.9 128.6 21.4 +57.6 6.7 5.7 1.1 2.8 1.9 +3.6
2011(f) 2230.9 136.2 22.7 +5.9 6.3 6.0 1.0 2.8 1.9 +21.0
2012(f) 2643.2 156.3 26.0 +14.8 5.5 5.3 0.8 3.8 2.6
Annualised ** 18 M
31 December
2009(a) 4666.6 147.1 18.8 +43.6 14.3 9.4 1.6 10.0 3.7 (8.8)
2010(f) 2436.2 140.6 18.2 (3.0) 14.7 12.9 1.5 6.0 2.2 +1.5
2011(f) 2020.9 130.7 16.9 (7.0) 15.8 13.6 1.4 6.0 2.2 +24.7
2012(f) 1747.5 134.2 17.4 +2.6 15.4 13.4 1.3 6.0 2.2

Consumer Neutral
Sector Rating : RHBRI’s economics team forecasts that consumer spending will likely grow at a stronger pace
of +5.0% 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. However, 2H10’s consumer
spending is expected to grow at a slower pace vis-à-vis 1H10 (4.6% vs. 5.4%), as effect from
government spending fizzes off and export growth starts to slow down. For the tobacco
players, the Government has recently delayed the small packs ban to Jan 2011 (from Jun
2010), which could marginally help improve earnings for tobacco players with larger exposure
such as BAT. For the brewers, we expect them to benefit from a recent hike in selling prices
by about 3% in May 2010 and improving sales in 2Q10 following the FIFA World Cup
celebration in Jun/Jul 2010. 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 prefer stocks with potential for a strong recovery in earnings
ahead, and with resilient attributes.
AEON SSS growth is expected to grow at 3-4% yoy in For FY10, we expect improving consumer
FY10 coming from improvement in consumer sentiment together with the opening of its
Outperform spending. Contributions from the new AEON new Melaka and one Cheras mall to boost
Melaka 2 and Bandar Mahkota Cheras stores are earnings by 9% yoy. Our fair value of
RM4.98 expected to offset the potential loss in property RM5.80 is based on 14x FY10 EPS, the
management income due to the non-renewal of average PER for the retail sector.
AEON’s 1U contract. Longer-term growth would
be underpinned by recurring sales from its
strong customer loyalty programme, which now
has 850,000 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 8% strengthening of ringgit against US$,
against ringgit from FY09’s average of RM3.60/ together with higher revenue per CDF on
RM7.45 US$. Amway would appeal to conservative improving consumer sentiment. We also
investors for its consistent and decent dividend expect Amway to continue its net
payout.Longer-term growth will be underpinned dividend payout of 90-95%, translating to
by Amway’s success of attracting new net yield of 7% p.a.. DCF-derived fair
distributors into its MLM team as well as value is RM8.45/share based on Amway’s
increasing its revenue per distributor. WACC of 8.1%.
BAT Short-term pressure includes: 1) continued high 6.9% decline in earnings for FY10 driven
level of 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
RM44.18 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 +5.0 16.2 8.3 4.3 3.9
2010 +8.5 14.9 7.6 3.8 4.0
2011 +7.1 13.9 6.7 3.4 4.1
31 December
2009(a) 2808.2 133.5 38.0 +10.7 13.1 5.3 1.8 12.0 2.4 (0.4)
2010(f) 2997.3 145.2 41.4 +8.7 12.0 5.1 1.6 12.0 2.4 +1.4
2011(f) 3275.8 158.8 45.2 +9.4 11.0 3.8 1.4 12.0 2.4 +15.8
2012(f) 3734.7 180.2 51.3 +13.5 9.7 4.4 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 0.0
2010(f) 697.9 89.6 54.5 +23.6 13.7 8.6 5.0 50.0 6.7 +1.2
2011(f) 722.5 92.8 56.5 +3.5 13.2 8.4 4.9 52.0 7.0 +8.2
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) 16.9 12.0 n.m 236.0 5.3 +0.5
2010(f) 3921.6 695.2 243.5 (6.9) 18.1 12.8 n.m 219.1 5.0 +4.1
2011(f) 3926.9 665.8 233.2 (4.2) 18.9 13.2 n.m 209.9 4.7 +0.4
2012(f) 3988.7 667.1 233.6 +0.2 18.9 12.8 n.m 210.3 4.8

Consumer (Cont'd)
Carlsberg Carlsberg’s earnings growth looks We expect Carlsberg’s earnings to jump by

favourable as: 1) TIV may not be affected 63% yoy in FY10 as: 1) economic condition
Outperform by recent 3% price increase given the small improves; 2) margins improve; and 3)
quantum; 2) margin improvement from impact from Carlsberg Singapore acquisition
RM4.84 lower raw material prices and higher comes through (which is expected to
utilisation of its plant following the Singapore contribute 33% of Carlsberg’s earnings in
acquisition; and 3) other synergies from its FY10). DCF-derived fair value is RM5.85
Singapore acquisition. based on Carlsberg’s WACC of 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 17%
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
underpinned by the company’s emphasis on and non-F&B segments; 2) product
RM2.94 product innovation and move into non-F&B innovation; and 3) increasing sales to
sectors, which would yield higher margins. overseas market. Our target price of
RM4.20 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
expansion in UAE and India. In the longer UAE; and 2) recovery in property
RM2.43 term, although the current concession development earnings on several new
agreement will expire in Oct 2011, we launches in FY10 and FY11 onwards. We use
believe there is a strong likelihood that it will SOP to derive our RM3.40/share fair value
be renewed given its political links, as well for Faber. This is based on: 1) DCF valuation,
as for its size and geographical reach. which uses a WACC discount rate of 9.7%
Further expansion in its non-concession IFM for its concession business and property
business in non-healthcare segments either business; and 2) 14x target PER on
overseas or locally would reduce the estimated FY10 earnings for its non-
earnings dependence on the concession. As concession IFM business.
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 to weaken to 3,000 – FY04/11-12 earnings projected to increase

4,000 new members per month (from 4,000 by 19-28% due mainly to growth in MLM
Market Perform – 5,000 per month) following the tightening division. Indicative fair value is RM4.30/
in credit financing to households from some share, based on 10x FY04/12 EPS (30%
RM3.91 banks, and the rising interest rate discount to CY10 target PER of 14.5x for the
environment, which reduces the ability of consumer sector).
MLM members to attain cheap financing,
which subsequently, reduces the appeal of
attracting new members. Longer-term
growth will be driven by innovative new
products to drive MLM sales, successful
penetration into the Indonesian market and
the successful commercialisation of its
energy division.

3 MTHS
12 MTHS
31 December
2009(a) 1045.5 76.1 24.7 +0.03 19.6 11.7 2.9 17.3 3.6 (8.4)
2010(f) 1462.7 125.5 40.7 +64.8 11.9 7.8 2.6 24.4 5.1 +4.3
2011(f) 1491.8 132.0 42.8 +5.2 11.3 7.1 2.4 25.7 5.3 +30.6
2012(f) 1505.7 146.3 47.5 +10.8 10.2 6.6 2.2 28.5 5.9

31 December
2009(a) 221.8 22.8 30.0 +>100 9.8 6.6 3.7 19.4 6.6 (9.8)
2010(f) 250.2 26.6 35.1 +16.9 8.4 5.2 3.1 22.5 7.7 (14.3)
2011(f) 270.1 28.8 38.0 +8.3 7.7 4.6 2.6 25.0 8.5 +269.8
2012(f) 281.7 31.0 40.8 +7.4 7.2 4.0 2.2 26.3 8.9
31 December
2009(a) 805.3 82.7 22.8 +35.3 10.7 4.5 2.5 6.0 2.5 +5.7
2010(f) 922.6 96.3 26.5 +16.4 9.2 3.5 2.0 7.0 2.9 +34.3
2011(f) 839.0 87.8 24.2 (8.8) 10.0 3.3 1.8 8.0 3.3 +154.5
2012(f) 1343.0 157.5 43.4 +79.3 5.6 1.6 1.4 8.5 3.5
30 April
2009(a) 435.2 52.4 25.8 (55.8) 15.1 9.7 2.0 17.5 4.5 (6.2)
2010(f) 546.3 73.6 36.3 +40.4 10.8 7.0 1.6 24.2 6.2 (6.5)
2011(f) 678.6 87.3 43.1 +18.7 9.1 5.8 1.3 28.7 7.3 +140.6
2012(f) 841.0 111.5 55.0 +27.7 7.1 4.4 1.1 36.7 9.4
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 is based on unchanged 12.5x
RM8.43 strategy (to open 54-58 new outlets p.a. for FY10 EPS, a 14% discount to consumer
FY10-12) would continue to strengthen its sector 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 number of patients and revenue/ due to: 1) patient growth spurred by
Market Perform inpatient from increasing take up of insurance expansion of its hospital network into
policies, as well as the turnaround of smaller towns; and 2) turnaround of loss-
RM2.99 previously loss-making hospitals. In the longer making hospitals. Indicative fair value of
term, growth momentum would be RM3.20, based on 14.5x FY10 EPS, is in
underpinned by hospital expansion strategy line with our target PER for the consumer
(two new hospitals p.a.) together with growing sector.
national aging population, which is about twice
the national population growth rate of 2.3%
p.a..
Parkson We believe that Parkson’s short-term earnings 15% yoy earnings growth for FY06/10
growth would be fuelled by robust consumer projected. Indicative fair value is RM6.40/
Outperform spending in China. share, based on a SOP valuation
Parkson’s longer-term growth would be driven comprising: 20% holding company
RM5.35 by: 1) increase in consumer spending in China discount to its Hong Kong subsidiary,
from higher GDP per capita; 2) increase in Parkson Retail Group’s fair value of
China / Vietnam’s living standards, as Parkson HK$11.95 (which is based on average
caters to middle to upper middle income forward PER of China departmental stores
group; 3) store expansion (China: 4-6 new of 24x); 14x CY10 earnings for its
stores p.a.; Malaysia: 2-3 new stores p.a.; and Malaysian operations; 11.5x CY10 for its
Vietnam: 2-3 new stores p.a.); and 4) cost- Vietnamese operations; the value of its 6-
rationalisation activities. excluded stores in China, assuming that
the 6 stores would be acquired at about
10x PE for retail sector and assuming
about RMB10m net profit per store (based
on previous transactions); and net cash/
(debt) balance.
QL Resources QL’s business of staple food based products Fair value is RM4.60/share based on 13x
willprovide resilient earnings, and this is CY11 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.
RM3.70 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 12.8 6.5 2.3 24.0 2.8 +6.7
2010(f) 2650.9 152.8 77.1 +17.2 10.9 5.4 2.0 26.0 3.1 +9.3
2011(f) 3012.5 177.5 89.5 +16.2 9.4 4.5 1.7 28.0 3.3 +22.2
2012(f) 3406.5 204.6 103.2 +15.3 8.2 3.7 1.5 30.0 3.6
31 December
2009(a) 1446.4 98.8 18.7 +15.1 16.0 8.8 1.4 12.0 4.0 +3.1
2010(f) 1602.4 115.6 21.9 +17.3 13.6 8.0 1.4 14.0 4.7 +16.8
2011(f) 1778.3 122.6 23.2 +6.0 12.9 7.5 1.4 16.0 5.4 +146.8
2012(f) 1972.1 145.1 27.5 +18.3 10.9 6.8 1.4 18.0 6.0
30 June
2009(a) 2242.3 263.2 25.4 +22.0 21.1 5.6 3.2 5.0 0.9 (7.8)
2010(f) 2583.7 302.7 29.2 +15.0 18.3 4.8 2.8 7.0 1.3 (4.3)
2011(f) 2872.6 376.2 36.3 +24.3 14.7 3.4 2.4 8.0 1.5 +4.9
2012(f) 4340.6 476.4 46.0 +26.6 11.6 2.1 2.1 9.0 1.7
31 March
2010(a) 1476.7 106.4 26.9 +19.4 13.7 7.1 3.1 10.0 2.7 (2.4)
2011(f) 1679.2 122.9 31.1 +15.4 11.9 5.6 2.6 10.4 2.8 +7.2
2012(f) 1870.2 144.3 36.5 +17.4 10.1 5.3 2.1 12.2 3.3 +64.4
2013(f) 2007.2 162.4 41.1 +12.6 9.0 4.7 1.8 14.2 3.9
Note
Note :: Stock
Stock prices
prices @
@ 28
31 October
May 20102009

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 strong, with no “discernible
cannibalisation of business” so far, despite a slight decline in visitor arrivals from Singapore.
For the NFO segment, things are also a-changing with the recent approval of a sports betting
licence to Berjaya Corp, as industry pundits hope that more “liberalisation” of gaming
policies are in the offing.
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
RM4.30 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.
We expect the recent approval of a sports
betting licence to Berjaya Corp to only
have a minimal 2-3% impact to BToto’s
earnings at this stage, given the fact that
distribution is divided between retail
outlets and telephone betting; and that the
1% agent commissions will have to be
split further between the agencies and
BToto.
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
RM6.80 (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-1Q10. 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 (16.0) 15.8 6.7 2.4 2.1
2010 +19.8 13.0 5.3 2.1 2.3
2011 +6.0 12.3 4.4 1.8 2.1
30 April
2009(a) 3695.7 410.5 32.7 +18.4 13.2 8.9 n.m 29.0 6.7 (5.9)
2010(f) 3419.0 414.3 30.7 (6.2) 14.0 9.8 n.m 23.5 5.5 (0.7)
2011(f) 3445.6 437.1 32.4 +5.5 13.3 9.6 n.m 24.0 5.6 (3.2)
2012(f) 3470.0 459.0 34.0 +5.0 12.7 9.3 n.m 25.0 5.8
31 December
2009(a) 8893.6 1168.3 31.6 (31.3) 21.5 6.9 2.5 7.2 1.1 (2.2)
2010(f) 13971.1 1972.3 53.4 +68.8 12.7 4.7 2.1 9.5 1.4 +9.3
2011(f) 16152.7 2084.1 56.4 +5.7 12.1 3.7 1.8 11.5 1.7 +21.4
2012(f) 17785.7 2416.1 65.4 +15.9 10.4 2.9 1.8 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
RM2.78 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 and at end-4Q09.
2012 for 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$1.06 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 1383.2 24.2 (0.5) 11.5 5.3 1.6 7.3 2.6 (4.1)
2010(f) 4858.7 1294.0 21.0 (13.4) 13.2 5.9 1.5 6.8 2.4 +3.0
2011(f) 5051.7 1381.7 22.4 +6.8 12.4 5.1 1.3 7.4 2.7 (2.5)
2012(f) 5252.8 1452.7 23.6 +5.1 11.8 4.3 1.2 8.0 2.9
31 December
2009(a) 491.2 (167.0) (1.4) (>100) n.m. n.m 4.5 0.0 0.0 +10.4
2010(f) 2550.1 318.5 2.7 +>100 38.9 20.0 4.1 0.0 0.0 +16.5
2011(f) 3339.8 439.3 3.8 +37.9 28.2 14.1 3.5 0.0 0.0 +50.7
2012(f) 3933.8 693.0 5.9 +57.7 17.9 12.1 3.0 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 Above-industry premium growth, higher
ability to maintain above-industry premium retention rate, below-industry combined
Outperform growth but below-industry combined ratio. ratio, synergistic benefits and sustainable
In addition, its highly-productive agency life business profit transfer which was two
RM4.98 force, bancassurance tie-up, innovative new FYs ahead of guidance.
products and strong support from parent Will benefit once motor tariff system is
would be able to meet consumer preference changed to a more risk-based regime. SOP
for products that provide protection cum based fair value is RM6.68.
savings.
Increase in motor claims ratio is mitigated
by various measures and lower claims ratio
from other classes of business. Sustainable
low management expense should be able to
provide “comfortable” combined ratio.
Sustainable life insurance business profit
transfer due to change from solvency base
capital to risk-based capital as well as
achieving critical mass.
Recently proposed an issue of Irredeemable
Convertible Preference Shares (ICPS) to
repay the RM490m parent loan and address
the RBC requirement. EPS dilution is subject
to the conversion of the ICPS, which seems
unlikely due to the higher dividend rate of
1.2 times of normal shares. Issuance of
ICPS is expected to be concluded by
3QFY10. ICPS is priced at RM3.18, and
Allianz will issue 192.1m new ICPS to raise
RM611m.
Kurnia Asia Continued 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 upside potential to its earnings
reduction in third-party motor policies
should the motor tariff be changed to
RM0.480 exposure.
positively affect the motor insurance
Combined ratio is expected to improve, business i.e. limit on claims for third party
albeit at subpar level mainly due to liability, increase in tariff, and reduction of
improved claims (tighter risk management legal liability. We believe a full transition to
in selecting more profitable business, spring risk-based tariffs is unlikely in the near
cleaning of its business portfolio as well as future given the impact on the lower-
focus on growing the non-motor insurance) income group.
and management expense ratios. However,
claims ratio will still be affected by old files
claims settlement.
Less volatility in its investment as equity
portfolio is now down to only 5% of its total
investment portfolio.

3 MTHS
12 MTHS
Sector Average
2009 +44.3 11.9 n.m 1.5 0.1
2010 +19.3 10.1 n.m 1.4 4.2
2011 +11.4 9.0 n.m 1.3 0.1
31 December
2009(a) 2222.7 118.8 77.2 +68.0 6.4 n.m 1.5 2.0 0.4 (6.2)
2010(f) 2460.8 110.6 71.9 (7.0) 6.9 n.m 1.3 2.0 0.4 0.0
2011(f) 2720.0 132.6 86.2 +19.9 5.8 n.m 1.1 2.0 0.4 +25.1
2012(f) 2933.5 153.5 99.7 +15.8 5.0 3.4 2.7 2.0 0.4
30 June
2009(a)^ 1137.7 57.0 3.8 +118.9 12.5 n.m 2.2 0.0 0.0 (8.6)
2010(f) 1134.2 99.1 6.6 +73.7 7.2 n.m 1.8 0.0 0.0 (22.0)
2011(f) 1216.1 112.9 7.6 +14.0 6.3 n.m 1.4 1.5 3.2 +28.0
2012(f) 1309.6 127.3 8.5 +12.8 5.6 4.0 1.1 1.7 3.6
^ FYE changed from June to Dec. Numbers are annualised.

Insurance (Cont'd)
LPI Capital Even though other general insurers are Fair value is RM16.70 based on 15x FY12/
suffering from high claims ratio, its claims 10EPS.
Outperform ratio remained well contained given its The anticipated change in tariff insurance
relatively higher exposure to the fire market will benefit the motor segment
RM15.04 insurance business, which has low claims (circa 25% of total portfolio) but may
ratio of 20.7%. This could be partly due to potentially 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 attractive
for risk-adverse investors. There is a
potential for a corporate exercise i.e. a
bonus issue/share split to increase the
liquidity of the stock. We believe that if this
were to happen, it would be completed by
the end of FY10.
MNRB We remain cautious on its overseas Our fair value for the stock is RM2.98,
expansion strategy given the volatile claims based on 0.7x FY03/10 NTA.
Underperform trend despite strong top line growth, which
may potentially hurt its bottom
RM2.89 line.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 16.5 n.m 2.3 0.0 0.0 0.0
2010(f) 894.7 154.5 111.4 22.5 13.5 n.m 2.2 109.9 7.3 14.1
2011(f) 1070.7 177.8 128.2 15.1 11.7 n.m 2.1 126.5 8.4 48.9
2012(f) 1293.2 213.4 153.8 20.0 9.8 n.m 2.0 151.8 10.1
31 March
2010(a) 1345.2 45.5 21.3 +72.9 13.5 n.m 0.7 0.0 0.0 (1.0)
2011(f) 1629.9 48.6 22.8 +6.9 12.7 n.m 0.6 10.0 3.5 +2.8
2012(f) 1864.4 38.5 18.1 (20.8) 16.0 n.m 0.6 10.0 3.5 (9.1)

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.
PLUS ST: Projecting FY12/10 traffic volume FY12/10 earnings growth will be supported by
Outperform growth to slow down to 3%, from 7.1% traffic volume growth assumption of 3% for its
in FY12/09, on the back of: (1) The high bread and butter North-South Expressway
RM3.32 base effect; and (2) Potentially higher (NSE).
toll rates and petrol prices (which are Indicative fair value is RM4.13, equivalent to
likely to have a negative impact on PLUS’s DCF-derived NPV.
PLUS’s traffic volume).
LT: Succeed in overseas expansion.
Puncak Niaga ST: 37% water tariff hike may not be FY12/10 earnings to decline on the back of
forth-coming. higher depreciation and amortisation expenses.
Underperform LT: Restructuring of water/waste water Indicative fair value is RM2.55, at a 30%
sector that may result in the discount to its DCF-derived NPV of RM3.65/
RM2.43 Government buying out all water/waste share (based on WACC of 11.5%) to reflect
water concessionaires. Puncak’s high earnings and regulatory risks.

3 MTHS
12 MTHS
Sector Average
2009 +20.3 13.3 7.9 2.5 4.8
2010 (1.4) 13.4 8.0 2.3 5.3
2011 +48.2 9.1 6.4 2.1 5.8
31 December
2009(a) 3179.0 1185.1 23.7 +9.8 14.0 9.5 2.7 16.5 5.0 (3.2)
2010(f) 3290.7 1181.9 23.6 (0.3) 14.0 9.7 2.7 18.0 5.4 (4.0)
2011(f) 4260.1 1814.5 36.3 +53.5 9.1 7.3 2.4 20.0 6.0 (0.6)
2012(f) 4390.5 1846.1 36.9 +1.7 9.0 7.2 2.2 22.0 6.6
31 December
2009(a) 1885.4 142.6 34.7 +>100 7.0 4.4 1.0 6.0 2.5 (8.6)
2010(f) 2220.9 127.8 31.1 (10.4) 7.8 3.1 0.7 6.0 2.5 (6.5)
2011(f) 2300.8 118.3 28.8 (7.4) 8.4 3.2 0.7 6.0 2.5 (16.8)

Manufacturing Neutral
Sector Rating : We believe the global economic is more sustainable than feared. 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 Future earnings growth hinges on successful
demand amidst the recovery in the global execution of capacity expansion plans.
Outperform economic situation as gloves have evolved Fair value of RM4.34/share is based on target
into a necessity and an essential medical CY10 PER of 13x.
RM3.07 product; and b) potential beneficiary from
the additional pick-up in demand 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 Continuous capacity expansion expected to
demand amidst the recovery in the global underpin Hartalega’s 3-year net profit CAGR
Outperform economic situation as gloves have evolved of 40.0%.
into a necessity and an essential medical Fair value of RM8.89/share is based on target
RM7.65 product; and b) potential beneficiary from CY10 PER of 13x.
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 Healthy 3-year core net profit CAGR of 13.1%
demand amidst the recovery in the global mainly driven by capacity expansion in the
Outperform economic situation as gloves have evolved glove manufacturing business.
into a necessity and an essential medical Fair value of RM10.74/share after ascribing a
RM7.27 product; and b) potential beneficiary from target CY10 PER of 13x.
H1N1-type flu outbreaks in future. 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 Continuous capacity expansion expected to
demand amidst the current global economic underpin Top Glove’s 3-year net profit CAGR
Outperform situation as gloves have evolved into a of 21.1%.
necessity and an essential medical product; Fair value of RM15.50/share is based on
RM12.28 and b) potential beneficiary from the target CY10 PER of 17x.
additional pick-up in demand from more
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 +40.2 15.0 9.2 3.4 2.3
2010 +33.1 11.2 7.1 2.7 3.1
2011 +19.1 9.4 5.8 2.2 3.4
31 October
2009(a) 282.9 31.9 22.0 +>100 13.9 10.4 2.5 9.3 3.0 (9.7)
2010(f) 412.4 45.7 31.5 +43.2 9.7 8.1 2.1 12.0 3.9 (12.3)
2011(f) 532.1 62.0 42.8 +35.7 7.2 6.4 1.7 14.7 4.8 +189.6
2012(f) 651.7 75.8 52.2 +22.1 5.9 5.2 1.4 14.7 4.8
31 March
2010(a) 571.9 143.1 59.1 +80.8 13.0 9.4 5.2 10.0 1.3 (2.3)
2011(f) 700.3 173.1 71.5 +21.0 10.7 7.7 3.8 12.0 1.6 +4.5
2012(f) 897.4 202.5 83.6 +16.9 9.2 5.9 2.9 14.0 1.8 +125.0
2013(f) 1011.1 214.7 88.6 +6.0 8.6 5.1 2.3 15.5 2.0
31 December
2009(a) 837.0 119.8 74.9 +>100 9.7 7.2 3.3 12.0 1.7 (7.0)
2010(f) 1082.9 132.1 82.6 +10.3 8.8 6.0 2.4 10.5 1.4 +5.4
2011(f) 1378.5 164.7 103.0 +24.7 7.1 4.6 1.9 12.5 1.7 +106.5
2012(f) 1508.1 173.1 108.3 +5.1 6.7 3.9 1.5 14.5 2.0
31 August
2009(a) 1529.1 169.1 57.3 +54.2 21.4 11.9 4.6 29.3 2.4 (3.2)
2010(f) 2062.3 262.7 89.0 +55.3 13.8 8.4 3.8 45.3 3.7 +7.7
2011(f) 2342.1 283.8 96.2 +8.1 12.8 7.5 3.2 46.7 3.8 +109.3
2012(f) 2648.1 300.6 101.9 +5.9 12.1 6.8 2.8 50.7 4.1

Note : Stock prices @ 28 October 2009

Manufacturing (Cont'd)
Other
manufacturers
BP Plastics Given that demand for stretch film (which Our fair value of RM0.80 is based on unchanged
are supplied to overseas distributors for 8x FY12/10 EPS, which is in line with its 3-year
Outperform ware house and logistics distribution average PER.
centres) is recovering as well as the
RM0.64 inelastic demand for most blown products
(which are sold to packaging converters
as well as food and beverage industries),
we believe BPP will enjoy rising volumes
ahead.
Furniweb registered a better-than- Our indicative fair value of RM0.71 is based on
Furniweb
expected 1Q performance on the back of unchanged target FY12/10 PER of 8.5x.
Outperform higher-than-expected core EBIT margin.
Going forward, we expect Furniweb to
RM0.39 register stronger sales, on the back of the
recovering economy. However, in the near
term, earnings could remain volatile due
to fluctuating raw material prices, which
could adversely impact margins.
Separately, Furniweb’s plan to list in
Vietnam has hit a snag as the listing
requirements have been made stricter by
the Vietnamese authorities. This could
potentially dampened Furniweb’s plan to
raise funds for future capacity expansion.
VS Industry Given VS’s exposure to the consumer We expect FY07/10 core net profit to jump by
electrical and electronic sector, we believe 92.2% following a rebound in consumer
Market Perform sales orders should improve on the back spending and demand for consumer electronics.
of recovering economy.
Fair value is RM1.33/share after ascribing a
RM1.18 Longer term, we believe Dyson’s shorter target CY10 PER of 7.5x.
timeframe to launch new products and
rising global market share in the vacuum
cleaner industry as well as demand from
recently secured customers should help
hold VS in good stead.
Wellcall In the short term, demand for industrial Decent 3-year net profit CAGR of 13.0% on the
hoses is expected to improve gradually back of higher capacity, new customers and
Underperform amidst the improving economic condition. taking market share from competitors.
Longer term, management remains Fair value of RM1.14/share is based on target
RM1.21 focused on leveraging on its extensive CY10 PER of 9x.
customer 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 7.3 3.7 0.9 4.0 6.3 (1.6)
2010(f) 230.6 18.1 10.0 +15.7 6.3 2.0 0.8 4.0 6.3 +2.4
2011(f) 247.8 19.7 10.9 +8.9 5.8 1.4 0.7 4.4 6.9 +44.3
2012(f) 262.4 21.4 11.9 +8.7 5.3 0.9 0.7 4.8 7.5
31 December
2009(a) 80.7 3.7 4.1 (42.4) 9.5 3.4 0.2 0.0 0.0 (13.3)
2010(f) 118.0 7.6 8.4 +>100 4.6 1.5 0.2 0.0 0.0 (24.3)
2011(f) 163.4 9.4 10.4 +23.6 3.8 1.5 0.2 0.0 0.0 +13.0
2012(f) 181.8 7.0 12.2 +17.9 3.2 0.2 0.2 0.0 0.0
31 July
2009(a) 724.8 11.8 6.6 (81.4) 17.8 4.4 0.7 1.7 1.5 (9.2)
2010(f) 789.8 22.7 12.7 +92.2 9.3 3.8 0.7 8.0 6.8 (3.3)
2011(f) 872.5 44.4 24.9 +95.5 4.7 2.8 0.7 10.7 9.0 (4.1)
2012(f) 972.2 55.4 31.0 +24.6 3.8 2.0 0.6 12.7 10.7
30 September
2009(a) 79.0 13.2 10.2 (24.0) 11.9 6.5 2.0 14.7 12.1 (9.0)
2010(f) 96.9 15.7 11.9 +17.3 10.2 5.2 1.9 12.9 10.6 (6.9)
2011(f) 114.8 19.1 14.7 +23.7 8.2 3.8 1.8 14.9 12.3 +27.4
2012(f) 132.9 22.6 17.5 +18.4 6.9 2.9 1.6 13.4 11.1
Note
Note :: Stock
Stockprices
prices@@2831October 2009
May 2010

Media Neutral
Sector Rating : Adex in 2010 would continue to gain momentum as the global economy recovers. Apart from
that, adex would also be supported by high sporting events such as the 2010 FIFA World Cup,
2010 Thomas/Uber Cup Finals and the Commonwealth Games. Meanwhile newsprint prices
continue to creep up as economic conditions improved. Nevertheless, companies that had
stocked-up on newsprint earlier should continue to enjoy the benefits of lower cost in the
months ahead.
MCIL We see continued recovery in ad spending Earnings growth is expected to be driven by

in tandem with improving macroeconomic the Malaysian operations.
conditions and key sporting events taking
Fair value of RM1.14/share is based on
Outperform place this year. Lower newsprint cost and
target CY10 PER of 13x.
tight cost-control measures should help as
RM0.80 well.
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 due to a combination of: 1) a recovery in
Outperform structure as this means that the bulk of the ad revenue for the TV division; 2) higher
stronger revenue would flow straight down contribution from NSTP due to strong
RM2.12 to bottomline. The take-over offer for NSTP earnings growth and a higher equity stake
has also been a success, in our view, and that Media Prima now has in NSTP; and 3)
would help the group plug earnings maiden contribution from the recent
leakages and give it control over NSTP’s outdoor acquisitions.
strong cash flow ahead.
Fair value of RM2.55/share is based on
Other re-rating catalysts include adex target CY10 PER of 15x.
growth (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 +15.3% yoy) mainly stemming from
Market Perform would continue to be dragged by its high- a recovery in ad revenue.
cost newsprint stock, which we estimate
Fair value of RM3.60/share is based on 16x
RM3.29 would last 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 (7.0) 17.1 9.7 9.7 5.7
2010 +39.6 12.2 6.5 2.0 4.4
2011 +7.0 11.4 5.9 1.9 4.7
31 March
2010(a) 1226.7 135.2 8.0 +80.1 10.0 5.5 1.6 5.5 6.8 (2.4)
2011(f) 1379.9 152.4 9.0 +12.7 8.9 4.2 1.4 6.0 7.5 +36.8
2012(f) 1410.3 146.1 8.7 (4.1) 9.2 4.1 1.3 6.0 7.5 (40.5)
2013(f) 1442.7 153.1 9.1 +4.8 8.8 3.4 1.2 6.3 7.8
Issued capital of 1,686.2m ordinary shares of HK0.10 each
31 December
2009(a) 744.0 73.8 6.9 (50.4) 30.7 23.0 3.6 7.5 3.5 (7.0)
2010(f) 1465.5 174.5 16.3 +136.4 13.0 7.4 2.9 10.0 4.7 +11.0
2011(f) 1545.0 192.2 18.0 +10.1 11.8 6.6 2.5 11.3 5.3 +78.3
2012(f) 1607.3 222.1 20.8 +15.6 10.2 5.7 2.1 12.5 5.9
31 December
2009(a) 974.4 144.6 19.6 (11.4) 16.8 7.4 2.0 23.0 6.4 (2.1)
2010(f) 1006.1 166.9 22.6 +15.4 14.6 7.2 1.9 23.0 6.4 (3.2)
2011(f) 1048.0 190.2 25.8 +14.0 12.8 6.3 1.9 23.0 6.4 +4.0
2012(f) 1083.0 199.1 27.0 +4.7 12.2 5.7 1.8 23.0 6.4

Motor Overweight
Sector Rating : Improving prospects and rising car sales on account of economic recovery, better job
prospects, as well as pent-up demand stemming from car buyers postponing big-ticket
purchases in 2009. We have tweaked upwards our 2010-2012 TIV projections by 0.7%, 0.8%
and 1.4% respectively after factoring in the recent upgrade in our GDP forecast to 6.8% (vs.
6.4% previously). We now expect TIV to achieve a stronger growth of 8.9% (vs. +8.5%
previously) in 2010, 2.8% (vs. +2.5%) in 2011 and 2.3% (vs. +2.2%) in 2012.
MBM We believe the strong performance in Indicative fair value is RM5.04 based on 11x FY10
Resources 1QFY10 has set the tone for MBM to EPS.
rebound strongly for the remaining of
We believe the company’s earnings are on track to
Outperform FY10 on the back of: 1) Improved sales
meet our forecast as we expect the coming
outlook, with orders from all brands
quarters to remain positive on the back of: 1)
RM2.82 picking up; and 2) New models launched
sustained strengthening of the ringgit against the
in 2H09 (Volvo S40 2.0 in Sept 09 and
yen which would help to bring down CKD kits
Perodua MPV in Nov 09) to help spur
costs; 2) improved consumer sentiments and
demand into 2010.
business conditions; and 3) strong contribution
MBM has announced its plans to spend a from the Alza.
total of RM100m capex between 2010-
2012 to expand its distribution and
dealership of Perodua, Hino and VW
network with 3S centres in the country.
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 4QFY03/10 assets position and on the
RM4.70 two existing plants into one; 2) securing
assumption of stripped down book value, Proton’s
contract manufacturing to optimise plants
indicative fair value is RM5.50.
utilisation that will further improve
profitability via better cost control and
economies of scale; and 3) to commit to
introducing one new model a year to gain
market interest.
Proton has announced capex of around
RM0.9-1.0bn for 2011 (vs. RM500k in
FY2010), largely due to development cost
of new models (i.e. Waja and Perdana) as
well as regional expansion.
We are expecting for Proton to come out
with an announcement on its strategic
foreign partnership soon.

3 MTHS
12 MTHS
Sector Average
2009 (10.5) 15.6 13.9 1.2 2.3
2010 +58.7 9.8 6.5 1.1 2.8
2011 +9.3 9.0 6.1 1.0 3.0
31 December
2009(a) 1187.2 68.3 28.2 (41.7) 10.0 25.7 0.8 9.0 3.2 (0.7)
2010(f) 1404.9 110.9 45.8 +62.3 6.2 14.7 0.7 12.0 4.3 +6.4
2011(f) 1488.8 116.8 48.2 +5.3 5.8 12.3 0.7 12.0 4.3 +31.8
2012(f) 1618.7 122.7 50.7 +5.0 5.6 9.7 0.6 12.0 4.3
31 March
2010(a) 8232.9 248.1 45.2 +>100.0 10.4 n.m 0.5 0.0 0.0 (2.1)
2011(f) 7611.0 347.4 63.3 +40.0 7.4 7.7 0.5 0.0 0.0 +16.0
2012(f) 7839.4 373.2 68.0 +7.4 6.9 7.4 0.5 0.0 0.0 +59.9

Motor (Cont'd)
Tan Chong TCM is expected to roll out a facelift SOP-derived fair value is RM5.26 based on 14x
version of Nissan X-Trail and a CKD FY10 target motor division PER and surplus of
Outperform version of the Teana in 3Q-4QFY10 Segambut land revaluation of RM400m. We
respectively to improve demand on highlight potential re-rating catalysts which
RM4.04 Nissan’s luxury model. Going forward, include: 1) higher-than-expected sales of its A
it plans to launch more cars in the and B segment cars; and 2) earlier-than-
under-represented segments, i.e. expected earnings contribution from its regional
segment A, B and D. Ongoing launches expansion.
to replace old models are crucial to
sustain and create new demand.
TCM will also ramp up activities in their
Serendah plant to 2 shifts starting
from June 2010, bringing up
production to 3,000 units per month
(from 2,000 units previously) in order
to meet the pent up demand for Nissan
models.
Automotive division: We expect SOP-derived fair value is RM7.52 based on 16x

UMW
brighter prospects for Toyota as it will FY10 target motor division PER as we applied a
benefit from improving sentiment and premium to the sector benchmark in view of its
Outperform
affordability on the back of economic strong branding in the sector. Target PERs for oil
RM6.36 recovery, where preference towards and gas, heavy equipment and manufacturing are
premium products will start to 16x, 8x and 7x respectively.
improve.
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) 17.8 11.8 1.9 9.0 2.2 (12.2)
2010(f) 3708.3 262.0 39.0 +72.0 10.4 7.7 1.7 11.4 2.8 +23.9
2011(f) 4114.7 304.5 45.3 +16.2 8.9 6.8 1.4 12.0 3.0 +128.2
2012(f) 5598.5 452.4 67.3 +48.6 6.0 4.7 1.2 13.0 3.2
31 December
2009(a) 10697.9 371.1 33.6 (35.8) 18.9 7.4 2.0 20.0 3.1 +0.8
2010(f) 10670.5 621.9 55.3 +64.4 11.5 5.2 1.8 23.5 3.7 +0.5
2011(f) 11062.4 672.1 59.2 +7.2 10.7 5.0 1.6 24.5 3.9 +11.6
2012(f) 11982.5 752.1 66.3 +11.9 9.6 4.3 1.4 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 growth
maintenance services amidst increasing in FY11-12 arising from expansion of TLP and
Outperform number of petrochemical plants in Middle EPCC jobs as well as sizeable catalyst handling
East will help partly offset lower E&C projects. Furthermore, we continue to like the
RM1.04 contribution. company’s conservative and asset-light
Longer term, Dialog is focused on more strategy driven by strong management.
recurrent and higher-margin specialist Fair value of RM1.29 is based on SOP, and
services in plant maintenance, catalyst applying 16x target PER on CY10 operating
handling and tankage. 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.
Outperform expand its KSB business. We estimate Fair value of RM2.69 is based on 10x FY10 EPS,
FY10-11 revenue to be boosted by 12- at a discount to our target for the sector of
RM1.71 15% p.a. respectively if this happens. 13x.
Longer-term earnings growth would likely
be driven by KSB expansion (with Phase
3 completing end 2QFY10).
Kencana Based on orderbook replenishment of Our forecasts indicate net profit growth of 35%
Petroleum around RM1-1.2bn by 4Q 2010 and burn- and 12% for FY10 and FY11 respectively driven
rate of around RM300m/quarter, we mainly by: 1) RM1.0-1.3bn new orders per
Outperform expect Kencana’s orderbook to remain annum flowing in over the next 24 months to
above RM1.9bn going into 2011. Kencana replenish existing ones; and 2) margin
RM1.37 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 16.2%
contracts in Malaysia and overseas. With in FY12, mainly due to higher-margin product
the upgrade in the Lumut yard (i.e. mix. We believe there would be upside to our
tonnage handling capability increased to assumption for new orders given current
30,000 tonnes from 20,000 tonnes orderbook replenishment rate of RM126m/
previously) nearing completion, we month since Jun 09.
believe Kencana stands a good chance of
Fair value of RM1.88 is based on 16x FY11 EPS,
securing higher-margin deepwater jobs.
at a premium to the sector.
driven by higher recurrent earnings (i.e.
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).
KNM While concerns on KNM’s ability to secure Nevertheless, we highlight the potential for
enough new jobs for FY10 would linger, we continued downward pressure on KNM’s share
Underperform highlight that things are turning more price in the near term due to the fall-out from
positive for investments into non- the aborted privatisation proposal by BlueFire
RM0.50 conventional oil sands projects in Canada. Capital Group (Bidco).
With crude oil price expected to trend
Fair value of RM0.40/share is based on 13x
higher, we believe higher E&P activities
FY10 EPS in line with our 1-year forward target
would likely increase demand for process
PER for the sector.
equipment over the longer term.

3 MTHS
12 MTHS
Sector Average
2009 (5.7) 18.1 9.2 2.9 4.6
2010 +20.4 14.7 7.5 2.8 5.3
2011 +13.5 12.9 6.5 2.6 5.6
30 June
2009(a) 1104.3 92.2 6.6 +22.0 15.8 13.4 3.4 3.6 3.5 (3.7)
2010(f) 1114.5 126.0 6.4 (3.4) 16.3 11.1 4.1 3.5 3.4 +3.0
2011(f) 1314.8 183.2 9.3 +45.4 11.2 6.1 3.4 5.1 4.9 +29.1
2012(f) 1490.6 223.0 11.3 +21.7 9.2 4.3 2.8 6.2 6.0
31 December
2009(a) 184.0 42.3 24.9 +81.0 6.9 4.6 0.9 8.7 5.1 +7.5
2010(f) 222.7 45.6 26.9 +7.9 6.4 5.1 0.8 9.4 5.5 +9.6
2011(f) 232.9 46.1 27.2 +1.1 6.3 4.3 0.8 9.5 5.6 +1.8
2012(f) 271.5 50.8 30.0 +10.1 5.7 3.4 0.7 10.5 6.1
31 July
2009(a) 1140.8 118.2 7.1 (24.3) 19.2 11.2 4.4 0.5 0.4 (12.7)
2010(f) 1458.8 169.0 10.2 +42.9 13.4 7.5 2.7 0.7 0.5 (6.8)
2011(f) 1632.6 194.4 11.7 +15.0 11.7 6.1 2.1 0.8 0.6 +26.1
2012(f) 1750.0 214.3 12.9 +10.2 10.6 4.9 1.7 0.9 0.7
31 December
2009(a) 2469.6 150.8 3.8 (55.2) 13.1 11.8 10.1 2.0 4.0 (7.5)
2010(f) 2117.1 122.4 3.1 (18.9) 16.2 10.6 7.7 2.0 4.0 (37.3)
2011(f) 2619.4 215.7 5.4 +76.2 9.2 7.6 4.8 2.0 4.0 (50.0)
2012(f) 3077.9 283.3 7.1 +31.3 7.0 6.1 3.1 2.0 4.0

Oil & Gas (Cont'd)
Although 50% of the vessels demand arising We believe the business has suffered with
Petra Perdana
from the replacement market is holding up, potential loss of contracts to competitors
demand stemming from newer requirement during the management tussle, and the
Underperform
appears to remain weak (despite crude oil reinstated management may need the
price having stabilised above US$70/barrel). whole of FY10 to get things back on track.
RM1.16
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 Notwithstanding lower throughput
GPTA is to tap into the growth potential of the processing fees for the domestic operations
Market Perform gas transportation business arising from arising from ‘lean’ fields, we believe
higher demand for processed gas Petronas Gas still enjoys relatively secure
RM9.92 transmission (vs. unprocessed gas from earnings, guaranteed by the Reservation
offshore Peninsular Malaysia) over the longer Charge, and this will also underpin dividend
term. Growth is mainly driven by utilities payouts.
sales while throughput services are capped Fair value of RM10.71 is based on DCF
by gas processing volumes. (WACC of 10.1%).
In the absence of earnings catalysts from

new 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 FY01/10-11 margins are expected to be

now stands at RM9.1bn. In addition, the more stable due to fuel and weather-related
Outperform Sapura3000 DP2 and two Indian vessels (to cost pass-through clauses for Petronas
be delivered in 1Q10) should have positive Carigali contract. Moreover, the company
RM2.01 impact on IPF margins. expects operating margin of 8-10% from
Shell Gumusut Kakap project 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 23.1% stake Fair value of RM2.66 is based on 16x FY11
positively. EPS, at a premium to the sector.
Wah Seong Near term, earnings growth would likely be While the company is in the look-out to
capped by weaker-than-expected acquire other pipe-coaters in Gulf of Mexico
Market Perform contribution from its engineering division and South America, we highlight that any
given still-weak demand for topsides significant M&A deals would likely be
RM2.21 fabrication and compressors stemming from pushed out given potential delay in
the softer market for FPSOs as oil majors identifying sizeable pipe-coating assets.
continue to hold back huge investments in Fair value of RM2.57 is based on 16x FY10
marine assets. EPS, at a premium to the sector.
Further-out, demand for pipe-coating
services would likely pick up as more
conventional E&P projects begin to flow again
given that crude oil price has stabilised
above US$70/barrel.
We believe the company’s pipe-coating pre-
tax margin of 9-10% is sustainable given
lower raw material cost and its flexibility and
experience to offer new solutions to the
project owner.

3 MTHS
12 MTHS
31 December
2009(a) 605.7 29.3 9.8 (53.1) 11.8 4.0 0.7 2.0 1.7 (21.6)
2010(f) 305.9 23.8 8.0 (18.5) 14.5 3.8 0.7 2.0 1.7 (10.1)
2011(f) 369.1 50.9 17.1 +>100 6.8 2.6 0.6 2.0 1.7 (56.4)
2012(f) 392.4 75.0 25.2 +47.3 4.6 1.3 0.5 2.0 1.7
31 March
2010(a) 3221.8 940.7 47.5 +1.4 20.9 9.9 3.0 50.7 5.1 (0.5)
2011(f) 3308.3 1238.2 62.6 +31.6 15.9 8.1 3.1 66.7 6.7 +1.7
2012(f) 3348.2 1273.6 64.4 +2.9 15.4 7.8 3.1 68.7 6.9 +1.2
2013(f) 3411.3 1324.8 67.0 +4.0 14.8 7.4 3.2 71.4 7.2
31 January
2010(a) 3257.3 170.2 12.3 +46.1 16.4 7.6 2.2 7.0 3.5 (12.6)
2011(f) 4829.8 231.0 16.6 +35.7 12.1 4.7 1.8 7.0 3.5 (14.5)
2012(f) 5403.1 254.8 18.3 +10.3 11.0 3.8 1.6 7.0 3.5 +35.8
2013(f) 5533.6 264.7 19.1 +3.9 10.5 3.2 1.4 7.0 3.5
31 December
2009(a) 1950.3 121.3 13.1 +29.4 16.9 6.4 3.5 7.4 3.3 (13.7)
2010(f) 2374.4 149.6 16.1 +23.1 13.8 5.4 2.8 6.3 2.9 (3.5)
2011(f) 2642.0 170.8 18.3 +14.0 12.1 5.0 2.2 7.2 3.3 +19.2
2012(f) 2396.2 168.7 18.1 (1.2) 12.2 5.7 1.9 7.1 3.2

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. However, we believe that in the current market
environment, volatility caused by external factors is the norm rather than the exception and
this could cause CPO prices to undershoot or overshoot our projected price range. 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
RM2.54 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).
First First Resources, being mainly a pure We project FR to post a core net CAGR of
Resources upstream cost-efficient plantations player, will 59.8% over the next three years to FY12.
benefit from an upward trend in CPO prices, We estimate every 10% change in CPO
Outperform especially given its mostly spot CPO sales price would change FR’s earnings by about
policy. In addition, it will benefit from its 15%, while every 5% depreciation in the
S$1.00 young plantation age profile, aggressive US$ vs. Rp will reduce FR’s earnings by
planting targets, below average cost of about 5-6% p.a..
production and downstream expansion. Our
Our fair value of S$1.55/share is based on
CPO price assumptions are US$730/tonne for
FY11 PER of 11.5x, which is a 30% discount
FY10, US$800/tonne for FY11 and US$750/
to our Malaysian target PER for the mid-cap
tonne for FY12.
plantation stocks, given that traditionally,
the Singaporean and Indonesian-listed
plantation stocks trade at a 20-30%
discount to its Malaysian-listed peers.
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. Our CPO price assumptions are CY10 target PER of 16x, which is at a 2x
RM6.45 RM2,500/tonne for FY12/10, RM2,700 for
discount to benchmark sector PER, given its
FY12/11 and RM2,500 for FY12/12.
mid-cap status and landbank size.
Valuations appear stretched at current
levels.

3 MTHS
12 MTHS
Sector Average
2009 -27.1 18.9 12.7 2.6 2.2
2010 +0.5 18.5 11.7 2.5 2.7
2011 +24.3 14.9 9.8 2.3 3.4
31 December
2009(a) 334.8 41.3 30.0 (32.0) 8.5 7.2 1.5 10.0 3.9 (3.1)
2010(f) 463.5 61.3 41.2 37.5 6.2 5.6 1.3 14.0 5.5 (10.6)
2011(f) 523.9 74.0 49.7 20.6 5.1 4.9 1.1 17.0 6.7 (14.5)
2012(f) 553.5 77.6 52.2 4.9 4.9 4.1 0.9 18.0 7.1
31 December (US$m)
2009(a) 218.9 39.7 2.7 (61.5) 26.1 7.2 1.9 1.5 2.1 (10.7)
2010(f) 326.5 116.5 7.9 +>100.0 9.0 6.3 1.6 1.8 2.5 (3.8)
2011(f) 393.4 139.7 9.5 +19.9 7.5 5.4 1.4 2.2 3.1 (53.8)
2012(f) 438.5 161.9 11.0 +16.0 6.5 5.0 1.2 2.7 3.8
Issued capital of 1468.5m ordinary shares of USD0.20 each
31 December
2009(a) 755.6 235.7 31.1 (37.0) 20.7 14.3 1.9 9.0 1.4 (5.1)
2010(f) 914.0 304.7 40.2 +29.3 16.0 11.4 1.7 11.0 1.7 +3.7
2011(f) 1083.3 341.0 45.0 +11.9 14.3 9.8 1.6 13.0 2.0 +17.3
2012(f) 1099.1 308.8 40.7 (9.4) 15.8 10.5 1.5 11.0 1.7

Plantations (Cont'd)
IJM Plantations IJMP, being a pure upstream cost- We estimate every RM100/tonne change in
efficient plantations player, will benefit CPO price would change IJMP’s earnings
Underperform from an uptrend in CPO prices. by 5-7% p.a..
Our CPO price assumptions are Our fair value of RM2.30/share is based
RM2.48 RM2,550/tonne for FY03/11, RM2,600 on CY10 target PER of 16x, which is at a
for FY03/11 and RM2,500 for FY03/12. 2x discount to benchmark sector PER,
However, earnings dilution of an given its mid-cap status and landbank
estimated 30-35% as a result of the 2- size. Valuations appear stretched at
for-8 rights issue with free warrants current levels.
would be a 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.
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 RM6.80 fair
RM4.91 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
RM2,350/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
manufacturing division.
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 RM18.25. This
RM15.90 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 are We estimate every RM100/tonne change in
diversified, plantations still contributes CPO price would change SD’s earnings by
Underperform the majority (65-75%) of group 4-6% p.a.. Our SOP-based RM7.95 fair
earnings, which means it will benefit value for Sime Darby is obtained after
RM7.75 from a rising CPO price environment, attributing an 18x average CY10 PER for
especially given its current mostly spot the plantation earnings (in line with
CPO sales policy. However, we believe benchmark sector PER), 14x CY10 PER for
investor sentiment on the stock will the heavy equipment, motor, property and
continue to be weak until management
other small divisions and 13x CY10 for the
is able to bolster confidence that recent
energy & utilities division, and after
massive provisions made for its oil &
gas division will not be repeated in its applying a 25% holding company and
other divisions and that the weaknesses weak corporate governance discount to its
in risk management and controls have SOP.
been identified and corrected.Our CPO
price assumptions are RM2,450/tonne
for FY06/10, RM2,600 for FY06/11 and
RM2,500 for FY06/12.

3 MTHS
12 MTHS
31 March
2010(a) 406.7 90.0 11.2 (41.6) 22.1 10.5 1.7 5.0 2.0 (1.6)
2011(f) 506.3 119.2 13.5 20.5 18.3 10.6 1.7 5.5 2.2 0.8
2012(f) 557.7 128.9 14.6 8.2 17.0 10.1 1.6 6.0 2.4 (4.7)
2013(f) 533.3 118.3 13.4 (8.2) 18.5 10.8 1.5 5.5 2.2
Issued capital of 881.3m ordinary shares of RM0.50 each (fd for warrants conversion)
30 June
2009(a) 14600.5 1897.7 32.1 (0.1) 15.3 12.4 3.7 8.0 1.6 (9.7)
2010(f) 14924.0 1708.8 26.8 (16.5) 18.3 12.7 3.6 12.0 2.4 (9.9)
2011(f) 16777.2 2113.8 33.1 +23.7 14.8 10.9 3.1 13.5 2.7 +10.5
2012(f) 18831.4 2233.9 35.0 +5.7 14.0 10.3 2.8 15.0 3.1
30 September
2009(a) 6658.3 753.8 70.8 (33.3) 22.5 14.4 3.0 40.0 2.5 (3.6)
2010(f) 7687.6 934.5 87.5 +23.7 18.2 11.2 2.9 45.0 2.8 (4.6)
2011(f) 8910.5 1315.9 123.3 +40.8 12.9 8.3 2.6 65.0 4.1 +35.9
2012(f) 8967.4 1378.3 129.1 +4.7 12.3 7.8 2.6 70.0 4.4
30 June
2009(a) 31013.9 2255.2 37.5 (38.1) 20.7 12.4 2.2 20.3 2.6 (11.7)
2010(f) 31855.9 2404.1 40.0 +6.6 19.4 11.5 2.2 22.0 2.8 (9.9)
2011(f) 35294.9 2904.6 48.3 +20.8 16.0 9.8 2.1 29.0 3.7 +9.2
2012(f) 39784.0 3056.2 50.9 +5.2 15.2 9.4 2.0 34.0 4.4

Power Overweight
Sector Rating : Plans to import electricity from Sarawak (i.e. Bakun) 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,
on top of the current existing capacity. Potentially, this could be positive for both TNB and
the IPPs. For TNB, the planting up of new capacity in Peninsular Malaysia itself 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 2000MW 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 projected
businesses should help cushion the impact of but dividends should remain attractive
Market Perform domestic power policy changes, if any. (gross DPS of at least RM1).
The next leg of growth would depend on
SOP fair value of RM19.20/share includes
RM18.00 acquisitions. Management had previously
DCF for power and 15x FY10 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
to our fair value if Tanjong is successful
Asia. We believe Tanjong stands a strong
with its bids.
chance in 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 (Sept ’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/share
RM8.35 however, would partly be tempered by higher 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).
Separately, the Government plans to reduce
gas subsidies, which could see gas price reach
parity with market price by 2015. TNB,
however, would be allowed to raise tariffs to
compensate for the higher gas cost.
Notwithstanding this mechanism, longer term,
TNB would still need a fuel cost pass-through
formula to help address the issue of
fluctuating fuel prices, in our view. 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.
YTL Power We think the market would be watching YTLP’s While Wessex Water will continue to be the
WiMAX rollout (expected 2H2010) and strategy largest earnings contributor to the group’s
Market Perform closely. A potential concern here is that YTLP earnings, growth could be tempered by
could decide to start a price war in order to the depreciation of GBP vs. RM.
RM2.22 win subscribers, especially given that it would Fair value of RM2.15/share based on SOP
be coming into the market with a largely (EV/RCV of 1.1x for Wessex Water, WACC
unutilised network. For now, management’s of 6.3% for power and investment cost for
reassurance regarding dividends means that a PowerSeraya) further supported by gross
key investment thesis for the stock remains dividend yields of around 9% p.a..
intact, i.e. attractive dividend yields. 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 1.5 3.9
2010 +29.6 11.5 7.5 1.4 5.0
2011 +10.2 10.5 7.0 1.3 5.3
31 January
2010(a) 5219.9 676.8 165.1 +26.4 10.9 7.3 1.9 100.0 5.6 +0.7
2011(f) 5325.4 693.1 171.9 +4.1 10.5 7.0 1.8 102.0 5.7 +1.9
2012(f) 5403.7 707.8 175.5 +2.1 10.3 6.7 1.6 104.0 5.8 +31.4
2013(f) 5474.0 712.3 176.6 +0.6 10.2 6.3 1.5 106.0 5.9
Issued capital of 403.3m ordinary shares of 7.5 pence each
31 August
2009(a) 28785.6 2157.1 49.8 (7.4) 16.8 8.0 1.4 17.8 2.1 (1.8)
2010(f) 29857.6 3062.9 70.7 +42.0 11.8 7.1 1.3 28.3 3.4 +4.9
2011(f) 31264.7 3505.5 80.9 +14.4 10.3 6.5 1.2 32.4 3.9 +5.7
2012(f) 32742.0 3999.8 92.3 +14.1 9.0 5.9 1.1 36.9 4.4
30 June (Fully Diluted)

2009(a) 6093.4 882.0 11.5 (12.3) 19.3 12.1 1.9 17.5 7.9 +1.4
2010(f) 10771.3 1133.6 13.7 +18.8 16.2 8.7 1.9 20.0 9.0 +0.9
2011(f) 10997.1 1176.5 14.2 +3.6 15.7 8.7 1.9 20.0 9.0 +5.2
2012(f) 11270.1 1215.7 14.6 +3.2 15.2 8.5 1.8 20.0 9.0

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 relatively 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 RM2.35, 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
RM2.03 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’s commercial property projects will be We value Glomac at RM1.56, or 30%

Glomac
the key earnings driver over the next few years. discount to its estimated RNAV/share of
Fully-sold ongoing commercial property projects RM2.23.
Outperform
will continue to support the company earnings
RM1.24 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 Mar 10, the company’s unbilled RNAV/share of RM2.85.
Market Perform sales stood at RM167.3m, or 0.7x of our FY10
revenue projection. The company has entered
RM1.27 into a SPA to acquire 17 ha freehold land in
Bayan Baru, Penang for RM82.1m cash (or RM45
psf) at end-Dec 09. Planning is at a 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 from 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 -2.9 14.2 12.6 1.0 83.3
2010 +20.1 11.7 8.2 0.9 104.6
2011 +17.8 9.9 6.9 0.9 121.8
31 December
2009(a) 71.9 42.9 16.0 +4.8 12.7 14.0 1.1 15.8 7.8 +1.0
2010(f) 83.9 50.5 16.4 +3.0 12.3 13.5 1.2 16.4 8.1 +3.6
2011(f) 90.9 54.9 17.9 +8.7 11.4 12.9 1.2 17.9 8.8 +38.1
2012(f) 93.1 57.6 18.8 +4.9 10.8 13.0 1.2 18.8 9.2
30 April
2009(a) 365.5 35.3 12.5 +38.9 9.9 8.8 0.7 7.8 6.3 (10.1)
2010(f) 377.5 36.6 12.3 (1.4) 10.1 5.7 0.7 9.0 7.3 (6.1)
2011(f) 441.8 45.7 15.4 +24.7 8.1 4.9 0.6 9.0 7.3 +86.2
2012(f) 487.2 57.7 19.4 +26.5 6.4 4.4 0.6 9.0 7.3
30 June
2009(a) 91.8 27.6 19.0 (44.9) 6.7 9.7 0.6 5.6 4.4 +4.1
2010(f) 237.0 46.3 24.2 +27.4 5.2 4.9 0.6 7.5 5.9 +3.3
2011(f) 242.5 47.2 24.7 +2.1 5.1 4.7 0.5 7.5 5.9 (3.9)
2012(f) 152.0 28.8 15.1 (39.1) 8.4 7.7 0.5 7.5 5.9
Note
Note :: Stock
Stockprices
prices@@28
31August 2009
May 2010

Property (Cont'd)
IJM Land The company’s normalised FY03/10 net profit Our indicative fair value is pegged at its
rose +92.4% yoy, underpinned by RM1.25bn RNAV/share of RM3.06.
Outperform sales registered in FY03/10 that exceeded its
internal target of RM1bn by a whopping 25%.
RM2.19 IJM Land now targets to achieve RM1.4bn sales
in FY03/11. As at end-FY03/10, its unbilled
sales stood at about RM850m or 0.6x of our
FY03/11 revenue forecast. Long-term
prospects will be supported by its overseas
projects in China and Vietnam. IJM Land
recently paid RM18m cash for a 70% stake in
Sova Holdings S/B that is embarking on a
mixed development project on a 7-acre site in
Phu Hoi commune, Nhon Trach City Centre,
Dong Nai Province in Vietnam, with a state-
owned company. The project will comprise four
blocks of high-rise residential apartments as
well as retail and commercial components.
Total GDV is estimated at US$127.5m.
KLCCP KLCCP FY03/10 results were within our We value KLCCP at RM3.80, or 15% discount
expectation. Going forward, we expect 2011- to its estimated RNAV/ share of RM4.47.
Market Perform 2012 earnings growth to be supported by: (1)
the first full-year impact from the rental
RM2.90 revision of Petronas Twin Tower in end 09,
from RM8.70 psf to RM9.10 psf; (2) 3-month
contribution from Lot C’s retail portion; and (2)
better occupancy rate for Mandarin Oriental on
improving economic outlook 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 16-39% earnings growth potential
RM1.68 between 2010-2012. The company’s unbilled
sales stood at RM1.1bn as at end-1QFY12/10,
or 1.6x of our FY12/10 property revenue
forecast. For 1QFY12/10, the company chalked
up impressive sales of RM600.9m (vs.
RM170.2m in 1Q09 and RM727m in FY09),
already accounting for 59.6% of its FY10 sales
target of RM1bn. 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 managed to renew all the lease We value Quill Capita at RM1.17, based on
agreements due in FY09. Despite the tough 7% pre-crisis average dividend yield
Market Perform economic condition, some were even renewed benchmark. This is supported by its DDM-
at higher rate. In FY10, the company’s based value of RM1.38 (based on 8.8%
RM1.01 occupancy risk will be low as only 1% of total WACC).
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
2010(a) 1101.1 98.3 8.9 +50.4 24.6 19.8 1.5 2.0 0.9 (5.6)
2011(f) 1418.0 201.5 18.3 +>100 12.0 11.0 1.3 2.0 0.9 +4.3
2012(f) 1654.2 301.0 27.3 +49.4 8.0 7.8 1.1 2.0 0.9 +48.0
31 March
2010(a) 881.3 235.2 25.2 +5.1 11.5 6.2 0.6 11.0 3.8 (9.9)
2011(f) 978.8 245.8 26.3 +4.4 11.0 5.0 0.5 11.0 3.8 (12.1)
2012(f) 1057.3 255.2 27.3 +3.8 10.6 4.6 0.5 11.0 3.8 (9.9)
2013(f) 1178.7 315.4 33.8 +23.6 8.6 3.9 0.5 11.0 3.8
31 December
2009(a) 701.6 94.3 11.3 (8.5) 14.8 6.2 1.7 6.5 3.9 (2.3)
2010(f) 817.6 109.2 13.1 +15.8 12.8 4.5 1.5 7.0 4.2 +11.4
2011(f) 981.8 152.0 18.3 +39.3 9.2 2.7 1.4 9.8 5.8 +13.9
2012(f) 1335.3 204.0 24.5 +34.2 6.8 0.3 1.2 13.1 7.8
31 December
2009(a) 67.4 32.4 8.3 +10.2 12.2 12.9 0.8 7.7 7.6 (4.7)
2010(f) 69.0 34.8 8.9 +7.3 11.3 13.1 0.8 8.2 8.1 +1.0
2011(f) 72.0 36.4 9.3 +4.7 10.8 12.7 0.7 8.6 8.5 +14.8
2012(f) 73.9 37.6 9.6 +3.4 10.5 12.4 0.7 8.9 8.8
Stockprices
Note : Stock prices@@28
31August
May 2010
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
RM3.87 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 Suncity is very well positioned to cash in on the We value Suncity at RM5.33, or 15%
current property upcycle. The company has discount to its estimated RNAV/ share of
Outperform lined up RM1.48bn worth of property products RM6.27.
for launching in FY2010, with a sales target of
RM3.83 RM1bn (+144% yoy from actual sales of RM410
in FY09). While seemingly aggressive, we do
share the company’s optimism that the target is
highly achievable mainly because of generally
good locations of the products, the availability
of financing packages, and right pricing and
target markets.As at Mar 10, the company had
unbilled sales of RM630m, or 0.7x of our FY10
property development revenue.
Sunrise 9MFY06/10 results came in below expectations, We value Sunrise at RM2.76, or 30%
mainly due to slower-than-expected progress discount to its estimated RNAV/ share of
Outperform billings at MK28, its RM998m condominium RM3.94.
project in Mont Kiara. However, it was partly
RM1.88 offset by better take-up rate of 50% in MK28.
As at Apr 10, its unbilled sales stood at
RM907m, translating to 1.1x of our FY10
revenue forecast. Long-term prospects will be
supported by high-end residential and
commercial projects in Mont Kiara, KLCC, Bukit
Jelutong, Kajang as well as 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
RM1.55 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 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 RM815m, or 2.6x
of our FY10 revenue forecast.

3 MTHS
12 MTHS
31 October
2009(a) 1408.4 163.2 16.0 (13.7) 24.2 22.2 1.9 14.0 3.6 (7.9)
2010(f) 1407.7 188.9 18.6 +16.4 20.8 25.4 1.8 9.3 2.4 (9.4)
2011(f) 1532.8 220.4 21.7 +16.7 17.9 19.8 1.7 10.8 2.8 (5.1)
2012(f) 1616.1 230.9 22.7 +4.7 17.0 19.1 1.6 11.4 2.9
31 December
2009(a) 1070.3 146.2 31.7 +9.3 12.1 6.8 0.8 13.0 3.4 (1.8)
2010(f) 1361.6 163.4 34.8 +9.8 11.0 12.2 0.8 8.0 2.1 +15.0
2011(f) 1443.7 182.3 38.8 +11.6 9.9 9.3 0.7 8.0 2.1 +31.2
30 June
2009(a) 38.8 136.8 27.9 +10.5 6.7 4.6 1.0 3.0 1.6 (13.4)
2010(f) 40.5 162.8 32.9 +17.6 5.7 3.7 0.8 5.0 2.7 (13.8)
2011(f) 45.1 179.3 36.2 +10.1 5.2 3.4 0.7 5.0 2.7 +4.4
2012(f) 48.1 190.5 38.5 +6.2 4.9 3.1 0.6 5.0 2.7
31 December
2009(a) 269.6 53.0 13.9 (36.3) 11.1 6.9 0.9 6.4 4.1 (12.4)
2010(f) 311.0 63.6 16.1 +15.8 9.6 6.2 0.8 6.4 4.1 (4.3)
2011(f) 373.3 71.0 18.0 +11.6 8.6 5.5 0.8 6.4 4.1 (1.3)
Note
Note :: Stock
Stockprices
prices@@28
31August 2009
May 2010

Semiconductor & IT Overweight
Sector Rating : Global chip sales are rising rapidly and iSuppli has raised its global chip sales forecast for
2010 to +31% (vs. +21.5% previously) after seeing global chip sales grew 2% qoq to
US$70.6bn in the 1Q. Growth in the 1Q also bucked the seasonally weaker quarter, adding
further evidence of a semiconductor industry recovery. Chips sales are expected to trend up,
driven by a strong pick-up in demand from both the consumers and enterprises for products
such as personal computers, consumer electronics and smartphones, and supported by
diligent inventory control and capacity management on the part of chip makers.
Cuscapi Cuscapi’s longer-term prospects appear Downside risks to FY10-11 earnings include
positive given its expansion internationally with severe contraction in corporate IT
Underperform the roll-out of new software and recovering spending and faster-than-expected margin
global economy. However, it’s near term erosion.
RM0.12 earnings growth remains weak given faster- Fair value of RM0.11 is based on
than-expected margin erosion on the back of unchanged 9x FY10 EPS.
intense competition from China and Taiwan.
MPI Management expects 4QFY06/10 revenue to Going forward, we believe MPI’s medium-
register stronger qoq growth, given 3QFY06/10 term earnings visibility remains bright
Outperform qoq growth of +2.0% which bucks the trend of given still resilient chips demand from
a seasonally weaker quarter. In addition, China. Further-out, we highlight that
RM6.35 management expects 4QFY06/10 net profit to earnings growth would be driven by
grow sequentially on the back of: 1) higher stronger chips demand from US and
utilisation rate; 2) stronger contribution from Europe as well as margin expansion
MLP and high-density packages; and 3) margin stemming from higher contribution of high-
expansion stemming from higher contribution of density packages and module packages.
high-density packages and cost-cutting Our fair value of RM8.46/share is based on
measures. With Ipoh and Suzhou plants unchanged 15x CY10 PER.
currently running at full-capacity, we
understand that MPI expects to raise capacity
for these plants by 25% and 30% by Sep-10.
MPI is targeting to increase its higher-margin
MLP capacity to 12m/day by end-FY10 (vs. 8m/
day currently).
Notion Vtec We believe Notion’s earnings will be driven Longer term, we believe there is potential
mainly upside to our FY11-12 forecasts arising
Outperform by: 1) stronger demand in the 2.5’’ HDD from: 1) Stronger-than-expected sales of
segment particularly to meet robust orders spindle motor hubs and 2.5’’ base plates
RM2.73 from Samsung; and 2) stronger contribution from Alphana; 2) Stronger contribution
from its camera division given volume loading from its Thailand operations; and 3) Higher
from Nikon. Note that management expects contribution from the auto segment.
capex of around RM80m to ramp up the base
Fair value from RM4.68 is based on 10x
plate capacity to 1m/month, 5m/month, and
target FY09/11 PER.
7m/month by FY10-12 pending the arrival of
additional equipment and machinery i.e. die
casting and computer numerical control (CNC)
machines.
Unisem Management expects 2Q revenue to increase While near-term earnings are supported by
by 5-8% qoq (vs. 3-5% qoq in 1Q10) driven chips demand from China, we highlight that
Outperform mainly by strong demand for analog, RF and longer-term earnings growth would be
mixed signal devices as well as resilient
dependent on chips recovery from US and
demand for its legacy packages i.e. SOIC,
RM2.79 Europe.Fair value of RM4.06/share is based
PDIP, and MSOP. In addition, management has
indicated plans to expand capacity with FY10 on unchanged 15x FY10 FD EPS.
capex of RM200m (vs. RM134m in FY09) to
expand capacity for its higher-margin packages
i.e. WLCSP and module packages, to expand
the wafer bumping business, and capacity
expansion in Chengdu by acquiring additional
copper wire-bonders. Unisem expects its QFN
capacity in Chengdu to increase to 7m/day by
2Q and 9m/day by 4Q10 (vs. 6m/day in 1Q10).

3 MTHS
12 MTHS
Sector Average
2009 -18.0 23.7 7.5 1.5 0.9
2010 +106.8 9.3 5.0 1.7 1.5
2011 +65.7 4.6 3.9 0.8 3.7
31 December
2009(a) 38.8 0.2 0.1 (76.1) +>100 9.7 0.9 0.0 0.0 +9.5
2010(f) 40.5 2.8 1.2 +>100 9.2 5.4 0.9 1.3 11.3 +4.5
2011(f) 45.1 4.7 2.1 +69.8 5.4 4.6 0.8 1.3 11.3 +27.8
2012(f) 48.1 5.7 2.6 +21.2 4.5 5.0 0.7 1.3 11.3
30 June
2009(a) 1150.6 (14.9) (7.1) (>100) n.m. 9.9 1.4 20.0 3.1 (7.4)
2010(f) 1332.4 94.7 45.1 +>100 14.1 4.1 1.4 20.0 3.1 +0.6
2011(f) 1459.0 141.9 67.6 +49.8 9.4 3.6 1.3 20.0 3.1 +21.0
2012(f) 1619.5 132.8 63.3 (6.4) 10.0 3.4 1.2 20.0 3.1
30 September
2009(a) 172.7 36.0 25.6 +6.7 10.7 7.2 2.3 5.0 1.8 (13.9)
2010(f) 236.9 53.6 34.7 +35.3 7.9 4.8 2.0 6.5 2.4 (12.8)
2011(f) 340.7 72.4 46.8 +35.1 5.8 3.5 1.6 6.5 2.4 +91.6
2012(f) 482.3 98.9 64.0 +36.6 4.3 2.7 1.2 6.5 2.4
31 December
2009(a) 1036.3 61.9 11.5 (17.1) 24.2 7.5 1.5 2.5 0.9 (19.8)
2010(f) 1450.6 146.6 27.1 +>100 10.3 5.0 1.4 5.0 1.8 +22.4
2011(f) 1651.4 196.0 36.1 +33.5 7.7 4.1 1.2 5.0 1.8 +128.7
2012(f) 1874.3 258.7 47.6 +31.9 5.9 3.4 1.0 5.0 1.8

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, coupled with the recent launch of High Speed
Broadband Service, would remain strong to help mitigate the weaker voice revenue.
Axiata Having addressed gearing concerns with a rights FY09-12 core net profit CAGR of 20.4%
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.
RM3.77 earnings growth in the near term. However, Fair value of RM4.53 is based on SOP,
competition remains steep in India, Sri Lanka and which comprises: a) DCF for Celcom
Bangladesh, which means near-term contribution (WACC=9.9%); b) 6x EV/EBITDA for
from this region would be muted. Over the longer XL; c) 8x EV/EBITDA for Robi; d)
term, we believe Axiata’s portfolio of assets will consensus median target price for Idea;
offer investors a unique blend of mobile assets and e) market price for remaining
operating in maturing/matured markets and thus, regional cellcos.
have strong cash flow generative abilities as well as
assets that are located in high-growth markets
within the region.
Digi The recent move to introduce iPhone, coupled with FY09-12 net profit CAGR of 8% due to
its ongoing expansion of 3G coverage should help a recovery in usage and rising non-
Outperform Digi better compete and tap into the data revenue voice revenue contribution.
market. Nevertheless, despite the additional capex Fair value of RM25.70 is based on DCF
RM22.88 for the rollout of 3G, we think capital management (WACC=8.3%).
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 helping Digi address
spectrum constraint issues.
Maxis We believe Maxis is well poised to capture the rising We project FY09-12 net profit CAGR of
popularity of mobile broadband and strong data 8%, led by stronger non-voice revenue
Outperform revenue growth ahead due to its customer base, (both broadband and advanced data
which is the largest in the country, are of the high- services).
RM5.22 end type and appear to be early adopters of Fair value of RM6.20 is based on DCF
technology. Despite having projected Maxis to pay (WACC=8.4%).
a total DPS of 35 sen p.a. over the next three
years, we believe there could still be further upside
to our projected dividends, given its stable EBITDA
margin (which continued to remain above the 50%
mark) and strong 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
Market Perform areas. However, management guided that topline
data segments, partly offset by weaker
contribution from HSBB would not be immediate. voice revenue and absence of interest
RM3.35 Apart from that, TM remains principally a dividend income from Axiata. We have assumed
play given its dividend policy of paying out at least that TM will continue to meet its
RM700m in dividends.Over the longer term, our dividend commitment of paying out at
main concerns on TM have not changed, i.e. least RM700m or 90% of normalised
declining voice revenues, operational inefficiencies PAT, whichever is higher.
as well as the risks involved in the rollout of HSBB. Fair value of RM3.55/share assumes a
However, we believe data and internet revenue minimum required net yield of 5.5% for
growth will remain strong to help mitigate the TM’s minimum RM700m dividend.
weaker voice revenue.

3 MTHS
12 MTHS
Sector Average
2009 -13.6 19.3 7.9 6.8 3.5
2010 +16.8 16.5 7.1 5.6 4.5
2011 +11.3 14.8 6.4 4.7 4.9
31 December
2009(a) 13105.1 1413.7 18.4 +27.8 20.4 7.5 3.3 0.0 0.0 (3.6)
2010(f) 14698.1 2087.3 24.7 +34.0 15.3 6.2 2.7 0.0 0.0 (3.1)
2011(f) 16094.4 2410.2 28.5 +15.5 13.2 5.4 2.3 0.0 0.0 +57.7
2012(f) 17208.8 2470.0 29.2 +2.5 12.9 4.7 1.9 10.0 2.7
31 December
2009(a) 4909.6 1000.5 128.7 (13.4) 17.8 8.6 31.1 137.3 6.0 +0.8
2010(f) 5271.9 1080.7 139.0 +8.0 16.5 8.1 24.9 148.3 6.5 +1.2
2011(f) 5627.8 1185.2 152.4 +9.7 15.0 7.4 16.1 162.7 7.1 +3.9
2012(f) 5947.8 1250.9 160.9 +5.5 14.2 6.9 11.9 171.6 7.5
31 December
2009(a) 8611.0 2335.0 31.1 (2.7) 16.8 9.9 n.m 20.0 3.8 (1.7)
2010(f) 9631.3 2488.2 33.2 +6.6 15.7 8.8 n.m 33.2 6.4 (4.2)
2011(f) 10449.1 2714.4 36.2 +9.1 14.4 7.9 n.m 36.1 6.9 n.a
2012(f) 11099.2 2940.5 39.2 +8.3 13.3 7.2 n.m 39.2 7.5
31 December
2009(a) 8608.0 468.5 13.3 (41.8) 25.3 5.0 1.8 26.3 7.9 (3.5)
2010(f) 8811.7 441.6 12.5 (6.1) 26.9 5.7 1.8 26.3 7.9 +3.4
2011(f) 9132.2 478.0 13.5 +8.2 24.8 5.2 1.9 26.3 7.9 +26.4
2012(f) 9402.7 561.0 15.8 +17.4 21.2 5.0 2.0 26.3 7.9

Timber Neutral
Sector Rating : Latest Apr 10 Japan housing starts saw a minor improvement (+0.6% yoy), the first in 17
months, which signifies that Japan’s housing recovery may start gaining pace soon. We also
understand from Japan Lumber reports and timber players that plywood prices seem to have
stabilised since 1Q10 and are slowly creeping up. However, until more significant growth
numbers in sales volumes are seen, we maintain our view that Japan’s housing starts
recovery will be gradual. 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-May 10, Evergreen has been running at FY10 earnings are expected to jump 27%
capacity utilisation rate of above 80% (vs. 4Q09’s yoy following strong yoy rebound in
Outperform utilisation of 78%) from rising demand due to capacity utilisation and average selling
supply shortages as competitors continue to cut prices. Our fair value of RM2.30 is based
RM1.48 back capacity / close plants, while other major on 11x CY10 earnings. The 11x target PE
MDF exporting countries remain uncompetitive in is a 3 multiple discount to the timber
the export market due to its high cost of sector PE for its smaller market
production. capitalisation.
Long-term drivers for Evergreen include: 1)
further gain of market share in the region; 2)
lower cost of production; and 3) acquisition of
existing MDF plants both in Malaysia and
overseas.
Jaya Tiasa Short-term outlook remains favourable yoy as we We expect earnings to jump 99% in
believe that average selling prices have since FY04/10 due to the low base effect from
Underperform been gaining momentum for Jaya Tiasa. Mid to FY09; and higher earnings contribution
longer-term earnings growth would be supported from the plantations division, on account
RM3.00 by increasing mature hectarage from its of the increase in mature hectarage
plantations division together with our rising CPO together with higher CPO prices. Our
assumptions of RM2,500 in CY10, RM2,700 in indicative fair value of RM3.05 is based
CY11 and RM2,500 in CY12 (from RM2,300 in on target PE of 14x CY10 earnings, both
CY09). for the timber and plantation divisions.
However, Jaya Tiasa’s valuation looks stretched at
current levels, and as such, we maintain our
Underperform recommendation on the stock.
Ta Ann Short-term outlook remains favourable yoy as We expect core earnings to jump by 55%
average selling prices of plywood have since in FY10 due to a gradual recovery in
Outperform recovered from the YTD-low by 15%, which would timber division as well as higher earnings
be reflected in 2Q10 results. contribution from the plantations division
RM5.08 Increasing mature hectarage from its plantations from the increase in mature hectarage
division together with our rising CPO assumptions and higher CPO prices. Our indicative fair
of RM2,500 in CY10, RM2,700 in CY11 and value of RM6.45 is based on target PE of
RM2,500 in CY12 (from RM2,300 in CY09), would 14x CY10 earnings, both for the timber
help to further boost earnings. and plantation divisions.
WTK Short-term outlook remains favourable yoy as We expect earnings to return to the black
average selling prices of plywood have since in FY10 due to higher earnings
Outperform recovered from the YTD-low by 15%, which would contribution from the gradual recovery in
be reflected in 2Q10 results. Log price is also log and plywood prices, together with an
RM1.14 expected to recover after 1Q10’s low due to more increase in our log export quota
favourable weather conditions. assumption. Our indicative fair value of
Long-term earnings would be from plantation RM1.45 is based on target PER of 14x
division, which we believe would start contributing CY10 earnings.
more significantly only by FY12.

3 MTHS
12 MTHS
Sector Average
2009 (18.1) 18.2 10.4 1.0 1.8
2010 +88.1 9.7 7.3 0.9 2.6
2011 +39.8 6.9 5.5 0.8 3.4
31 December
2009(a) 771.5 85.0 16.6 +5.9 8.9 7.9 1.1 4.0 2.7 (6.9)
2010(f) 915.0 107.9 21.0 +27.0 7.0 6.3 1.0 8.4 5.7 (9.8)
2011(f) 1001.4 118.0 23.0 +9.4 6.4 5.4 0.9 10.4 7.0 +126.0
2012(f) 1065.1 127.9 24.9 +8.4 5.9 4.7 0.8 6.2 4.2
30 April
2009(a) 756.5 13.9 4.9 (73.2) 61.1 15.4 0.8 0.0 0.0 (18.3)
2010(f) 733.6 27.6 9.8 +99.1 30.7 12.8 0.8 0.0 0.0 +9.1
2011(f) 1021.1 78.2 27.7 +>100 10.8 8.6 0.8 0.0 0.0 +49.3
2012(f) 1269.3 156.7 55.5 +>100 5.4 5.3 0.7 1.3 0.4
31 December
2009(a) 666.6 63.8 29.7 (11.5) 17.1 9.1 1.7 5.0 1.0 (11.2)
2010(f) 768.8 98.7 46.0 +54.6 11.0 7.3 1.5 7.0 1.4 +2.8
2011(f) 864.1 124.6 58.1 +26.3 8.8 5.8 1.3 11.5 2.3 +28.3
2012(f) 949.6 164.0 76.4 +31.6 6.6 4.2 1.1 12.5 2.5
31 December
2009(a) 555.4 (0.8) (0.2) (>100) n.m. 16.5 0.6 6.0 5.3 (13.0)
2010(f) 699.1 45.6 10.4 +>100 11.0 6.3 0.6 6.0 5.3 (3.4)
2011(f) 753.2 62.5 14.3 +37.3 8.0 5.3 0.6 6.0 5.3 (10.9)
2012(f) 802.7 71.2 16.3 +13.9 7.0 2.9 0.6 6.0 5.3

Transportation & Logistics Neutral
Sector Rating : The airline sector is poised for better prospects over the near term on improved yields and
load factors thanks to rising demand for air travel on the back of the recovery in the global
economy. This augurs well for airport operators such as Malaysia Airports as well. However,
the shipping sector will continue to be weighed down by weak freight rates on the back of
just a mild recovery in volumes while new capacity continues to flood the market. One key
speed bump to the recovery of the transportation and logistics sector as a whole is rising
crude oil prices that could crimp margins.
AirAsia ST: Rising demand for air travel on the Earnings growth in FY12/11-12 driven by
back of the global economic recovery. capacity expansion and efficiency.
Outperform LT: Rising affluence and propensity for air Fair value is RM2.20 based on 16x FY12/10
travel, particularly, in the region. EPS (in line with Ryanair), adjusted for
RM1.22 RM733.4m owed to AirAsia by 49%-owned
associates Thai AirAsia and Indonesia
AirAsia that translates to 28sen/AirAsia
share.
Freight ST – Higher contribution from its Fair value is RM1.40 based on 10x CY10
warehouse and distribution division from EPS of 14.0 sen, in line with our benchmark
Outperform recently secured distribution rights from 1-year forward target PER for the transport
Sharp to distribute electrical appliances and logistics sector.
RM0.81 throughout Klang Valley.
LT – Sustained organic growth at its core
business, i.e. freight services through
expansion of: 1) customer base; 2)
agents base; and 3) new destinations.
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.
Outperform
sector in China, sustained production Fair value is RM1.30 based on 13x FY12/10
volumes of Lenovo/IBM’s ThinkPad EPS, at a premium to our benchmark 1-
RM1.00
laptops and IBM’s servers in three year forward target PER for the transport
warehouses in Futian FTZ, Shenzhen, and logistics sector of 10x to reflect ILB’s
managed by ILB with “Vendor Managed superior earnings growth visibility with the
Inventory” (VMI) supply chain good execution of its second wave of
management system, and new overseas investment/expansion in China.
warehouse projects in the pipeline.
MAHB ST – Diversion of traffic from Fair value is RM5.45 based on 16x FY12/10
Suvarnabhumi due to political turmoil in EPS of 34.1 sen, in line with our 1-year
Outperform Thailand. forward target PER for the market.
LT – 1) Increased capacity with the new

RM4.95
LCCT under construction; 2) increasing
retail space at the airports; and 3)
development of land surrounding MAHB’s
airports particularly in Sepang.

3 MTHS
12 MTHS
Sector Average
2009 -10.8 28.2 8.3 1.5 3.7
2010 +41.3 20.2 9.6 1.5 3.9
2011 -2.3 14.9 9.5 1.3 4.0
31 December
2009(a) 3178.9 449.1 18.3 +>100 6.7 7.9 1.1 0.0 0.0 (9.6)
2010(f) 3399.5 430.6 15.5 (15.3) 7.9 9.7 1.1 0.0 0.0 (15.9)
2011(f) 3735.3 546.3 19.7 +26.9 6.2 9.1 0.9 0.0 0.0 (9.6)
2012(f) 4067.9 630.7 22.7 +15.4 5.4 8.8 0.8 0.0 0.0
30 June
2009(a) 195.0 13.6 11.1 +11.0 7.3 4.3 0.9 5.0 6.2 +0.6
2010(f) 243.6 15.8 13.0 +17.0 6.2 3.3 0.8 4.5 5.6 +15.0
2011(f) 265.9 18.4 15.1 +16.4 5.3 2.9 0.7 4.5 5.6 +34.2
2012(f) 284.7 19.1 15.7 +3.7 5.1 2.8 0.7 4.5 5.6
31 December
2009(a) 187.0 (17.7) (9.0) (>100) n.m. 11.0 0.5 3.0 3.0 (5.7)
2010(f) 164.8 19.8 10.0 +>100 10.0 5.8 0.5 3.0 3.0 +6.4
2011(f) 130.5 22.4 11.4 +13.2 8.8 5.9 0.5 3.0 3.0 +22.7
2012(f) 136.5 23.4 11.9 +4.5 8.4 5.2 0.5 3.0 3.0
31 December
2009(a) 1563.1 314.3 28.6 +3.0 17.3 10.1 1.6 15.2 3.1 0.0
2010(f) 1697.6 375.0 34.1 +19.3 14.5 9.5 1.4 17.1 3.5 +1.2
2011(f) 1988.9 429.1 39.0 +14.4 12.7 8.7 1.3 19.6 4.0 +36.7
2012(f) 2392.7 516.5 47.0 +20.4 10.5 6.8 1.1 24.7 5.0

Transportation & Logistics (Cont'd)
MAS ST: Rising demand for air travel on To turn around in FY12/10 on better capacity
the back of the global economic management. Fair value is RM1.60 based on 14x
recovery. FY12/10 EPS that is in line with the average 1-year
Underperform
forward PER for peer Singapore Airlines Ltd.
LT: Rising affluence and propensity for
RM1.97 air travel, particularly, in the region.
MISC ST: Petroleum, chemical and container EPS to resume growth in FY03/11 as losses from
segments will continue to be weighed the container liner and chemical segments narrow.
down by weak freight rates and Fair value is RM8.02 based on “sum of parts”.
Underperform volumes on the back of overcapacity.
LT: Steady income stream from its LNG
RM8.43
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. n.m 5.3 0.0 0.0 (9.2)
2010(f) 12283.6 381.4 11.4 +>100 17.3 10.2 1.8 0.0 0.0 (11.3)
2011(f) 12259.2 480.0 14.4 +25.8 13.7 9.5 1.6 0.0 0.0 (26.2)
2012(f) 12201.9 567.9 17.0 +18.3 11.6 9.0 1.4 0.0 0.0
31 March
2010(a) 13775.1 703.3 18.2 (51.7) 46.3 14.9 1.6 35.0 4.2 (5.6)
2011(f) 14474.2 1473.4 33.0 +81.2 25.5 13.2 1.6 36.0 4.3 +8.1
2012(f) 15118.8 1638.5 36.7 +11.2 23.0 12.5 1.6 37.0 4.4 +2.8
2013(f) 15749.8 1959.9 43.9 +19.6 19.2 11.3 1.6 38.0 4.5

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

(RM/s) (RM/s)
31/5/2010
OUTPERFORM
Adventa 3.07 4.34 Manufacturing
AEON 4.98 5.80 Consumer
Affin 2.90 3.58 Banking
AFG 2.78 3.47 Consumer
AirAsia 1.22 2.20 Transportation & Logistics
Allianz Malaysia 4.98 6.68 Insurance
AMMB 4.89 6.13 Banking
Amway 7.45 8.45 Consumer
Axiata 3.77 4.53 Telecommunication
Axis REIT 2.03 2.35 Property
BP Plastics 0.64 0.80 Manufacturing
B-Toto 4.30 4.95 Gaming
Carlsberg 4.84 5.85 Consumer
CBIP 2.54 3.60 Plantation
CIMB 6.78 8.12 Banking
Daibochi 2.94 4.20 Consumer
Dialog 1.04 1.29 Oil & Gas
Digi.com 22.88 25.70 Telecommunication
Emas Kiara 0.55 1.31 Construction
EON Cap 7.01 8.07 Banking
EPIC 1.71 2.69 Oil & Gas
Evergreen 1.48 2.30 Timber
Faber 2.43 3.40 Consumer
FajarBaru Builder 0.98 1.31 Construction
First Resources (S$) 1.00 1.55 Plantation
Freight Management 0.81 1.40 Transportation & Logistics
Furniweb 0.39 0.71 Manufacturing
Genting Bhd 6.80 8.95 Gaming
Genting S’pore (S$) 1.06 1.35 Gaming
Glomac 1.24 1.56 Property
Hartalega 7.65 8.89 Manufacturing
HSL 1.41 1.61 Construction
IJM Land 2.19 3.06 Property
ILB 1.00 1.30 Transportation & Logistics
IOI Corp 4.91 6.80 Plantation
Kencana 1.37 1.88 Oil & Gas
KFCH 8.43 9.63 Consumer
KL Kepong 15.90 18.25 Plantation
Kossan 7.27 10.74 Manufacturing
Kurnia Asia 0.48 0.74 Insurance
LPI Capital 15.04 16.70 Insurance
Mah Sing 1.68 2.09 Property
MAHB 4.95 5.45 Transportation & Logistics
Maxis 5.22 6.20 Telecommunication
Maybank 7.34 8.96 Banking
MBM 2.82 5.04 Motor
Media Chinese 0.80 1.14 Media

Appendix

(RM/s) (RM/s)
31/5/2010
OUTPERFORM
Media Prima 2.12 2.55 Media
MPI 6.35 8.46 Semiconductor & IT
MRCB 1.50 2.06 Construction
Notion Vtec 2.73 4.68 Semiconductor & IT
Parkson 5.35 6.40 Consumer
PLUS 3.32 4.13 Infrastructure
Proton 4.70 5.50 Motor
Public Bank-F 11.46 13.12 Banking
Public Bank-L 11.44 13.12 Banking
QL Resources 3.70 4.60 Consumer
RCE Capital 0.63 1.18 Banking
SapuraCrest 2.01 2.66 Oil & Gas
Suncity 3.83 5.33 Property
Sunrise 1.88 2.76 Property
Sunway 1.44 1.69 Construction
Ta Ann 5.08 6.45 Timber
Tan Chong 4.04 5.26 Motor
Te n a g a 8.35 10.40 Power
Top Glove 12.28 15.50 Manufacturing
UMW 6.36 7.52 Motor
Unisem 2.79 4.06 Semiconductor & IT
WTK 1.14 1.45 Timber
YTL Cement 3.86 5.51 Building Material
MARKET PERFORM
CSC Steel 1.80 1.82 Building Material

Genting M’sia 2.78 2.90 Gaming
Hai-O Ent 3.91 4.30 Consumer
Hiap Teck 1.20 1.28 Building Material
HL Bank 8.55 9.05 Banking
Hunza Prop 1.27 1.43 Property
IJM Corp 4.78 4.88 Construction
KLCCP 2.90 3.80 Property
KPJ Healthcare 2.99 3.20 Consumer
Lafarge 6.58 6.83 Building Material
P Gas 9.92 10.71 Oil & Gas
Quill Capita 1.01 1.17 Property
SP Setia 3.87 4.66 Property
Star 3.29 3.60 Media
Tanjong 18.00 19.20 Power
TM 3.35 3.55 Telecommunication
VS. Industry 1.18 1.33 Manufacturing
Wah Seong 2.21 2.57 Oil & Gas
YNH Property 1.55 1.86 Property
YTL Power 2.22 2.15 Power

Appendix

(RM/s) (RM/s)
31/5/2010
UNDERPERFORM
Ann Joo Resources 2.42 2.25 Building Material
BAT 44.18 38.95 Consumer
Cuscapi 0.12 0.11 Semiconductor & IT
Gamuda 2.95 2.05 Construction
Genting Plantation 6.45 6.65 Plantation
IJM Plantations 2.48 2.30 Plantation
Jaya Tiasa 3.00 3.05 Timber
Kinsteel 0.83 0.64 Building Material
KNM 0.50 0.40 Oil & Gas
MAS 1.97 1.60 Transportation & Logistics
MISC 8.43 8.02 Transportation & Logistics
MNRB 2.89 2.98 Insurance
Perwaja 1.20 1.12 Building Material
Petra Perdana 1.16 1.00 Oil & Gas
Puncak 2.43 2.55 Infrastructure
Sime Darby 7.75 7.95 Plantation
Sino Hua An 0.34 0.25 Building Material
WCT Bhd 2.68 2.10 Construction
Wellcall 1.21 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.
RHBRI and the Connected Persons (the “RHB Group”) are engaged in securities trading, securities brokerage, banking and financing activities as
well as providing investment banking and financial advisory services. In the ordinary course of its trading, brokerage, banking and financing
activities, any member of the RHB Group may at any time hold positions, and may trade or otherwise effect transactions, for its own account or
the accounts of customers, in debt or equity securities or loans of any company that may be involved in this transaction.
“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the
respective directors, officers, employees and agents of each of them. Investors should assume that the “Connected Persons” are seeking or will
seek investment banking or other services from the companies in which the securities have been discussed/covered by RHBRI in this report or in
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This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been reviewed by, and may
not reflect information known to, professionals in other business areas of the “Connected Persons,” including investment banking personnel.
The research analysts, economists or research associates principally responsible for the preparation of this research report have received
compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm
revenues.
The recommendation framework for stocks and sectors are as follows :-
Stock Ratings
Outperform = The stock return is expected to exceed the FBM KLCI benchmark by greater than five percentage points over the
next 6-12 months.
Trading Buy = Short-term positive development on the stock that could lead to a re-rating in the share price and translate into
an absolute return of 15% or more over a period of three months, but fundamentals are not strong enough to warrant an
Outperform call. It is generally for investors who are willing to take on higher risks.
Market Perform = The stock return is expected to be in line with the FBM KLCI benchmark (+/- five percentage points) over the
next 6-12 months.
Underperform = The stock return is expected to underperform the FBM KLCI benchmark by more than five percentage points
over the next 6-12 months.
Industry/Sector Ratings
Overweight = Industry expected to outperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12
months
Neutral = Industry expected to perform in line with the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12
months.
Underweight = Industry expected to underperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12
months.

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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

Downdraft Of Fear; Longer-term Outlook Still

Changes In Recommendation And Forecast From

AMMB Outperform Outperform 17 May 2010 Given the higher-than-expected final

RHBRI'S MONTHLY 2 STOCK WATCH

Carlsberg Outperform Outperform 31 May 2010 We tweaked our earnings forecasts

RHBRI'S MONTHLY 3 STOCK WATCH

Daibochi Outperform Outperform 12 May 2010 We reduced our earnings forecasts

Digi Outperform Outperform 5 May 2010 DCF-derived fair value raised by

Evergreen Outperform Outperform 2 June 2010 We reduced our earnings forecasts

RHBRI'S MONTHLY 4 STOCK WATCH

First Outperform New 24 May 2010 We initiated coverage on FR with an

Genting Bhd Outperform Outperform 31 May 2010 Post-1QFY10 results, although we

RHBRI'S MONTHLY 5 STOCK WATCH

Genting Underperform Underperform 27 May 2010 Post-1QFY10 results, we tweaked our

RHBRI'S MONTHLY 6 STOCK WATCH

HSL Outperform Market Perform 26 May 2010 Recommendation upgraded as value

IOI Outperform Outperform 17 May 2010 Post-3QFY06/10 results, we have

RHBRI'S MONTHLY 7 STOCK WATCH

IJM Plantations Underperform Underperform 27 May 2010 Post-adjustment of 4QFY03/10

RHBRI'S MONTHLY 8 STOCK WATCH

RHBRI'S MONTHLY 9 STOCK WATCH

RHBRI'S MONTHLY 10 STOCK WATCH

Proton Outperform Outperform 27 May 2010 We have tweaked up Proton’s

QL Resources Outperform Outperform 25 May 2010 We tweaked down our earnings

RCE Outperform Outperform 27 May 2010 We have fine-tuned our FY03/11-12

RHBRI'S MONTHLY 11 STOCK WATCH

Sime Darby Underperform Outperform 14 May 2010 Post-announcement regarding

Sunrise Outperform Outperform 14 May 2010 We cut our FY10-12 forecasts by

Ta Ann Outperform Outperform 27 May 2010 We reduced our earnings forecasts

RHBRI'S MONTHLY 12 STOCK WATCH

Unisem Outperform Outperform 6 May 2010 We have revised our FY10-11

RHBRI'S MONTHLY 13 STOCK WATCH

WTKH Outperform Outperform 1 June 2010 We have reduced our earnings

RHBRI'S MONTHLY 14 STOCK WATCH

No Major Corporate Earnings Surprises

-40 qoq yoy

RHBRI'S MONTHLY 15 STOCK WATCH

Covered Stocks Covered In Line Above Below Total reported % reported

Covered Stocks Covered In Line Above Below Total reported % reported

Most Sectors Reported Earnings That Were Within Expectations

Earnings Growth Remains Intact

RHBRI'S MONTHLY 17 STOCK WATCH

EPS Growth EPS Growth PER

* Exclude MAS earnings in 2010

FactSet Asian Consensus Trends report dated 28 May 2010

EPS growth (%)

* as at 31st May 2010

RHBRI'S MONTHLY 18 STOCK WATCH

Risk Is A Sharper-than-expected Slowdown In 2H, Not A “Double-

RHBRI'S MONTHLY 19 STOCK WATCH

Lack Of Domestic Leads

Greater Volatility And A Near-term Market Downshift

Whilst we envisage a strong support at the important psychological 1,200 level,

RHBRI'S MONTHLY 20 STOCK WATCH

Market Strategy : Accumulate On Weakness And Ride The Volatility

Fair Mkt EPS EPS GWTH PER P/BV P/CF GDY

^ FY10-11 valuations refer to those of FY11-12

RHBRI'S MONTHLY 21 STOCK WATCH

RHBRI'S MONTHLY 22 STOCK WATCH

31 March (Fully Diluted)

Note : Stock prices @ 31 May 2010