Market Dateline PP 7767/09/2010(025354)

RHB Research Institute

RHB Equity 360°

27 August 2010 (Allianz, CIMB, Sime, GentMsia, GentBhd, Sunrise, AEON, WTK, Kossan, Mah Sing,
YNH, Puncak; Technical: Berjaya Corp)

Top Story : Allianz – Encouraging fundamentals Outperform

Briefing Note
- General insurance gross premiums grew by 14.1% yoy in 1H FY12/10, driven by its productive agency
force (49%) and bancassurance tie-up with CIMB (12%).
- Life insurance premiums grew by 27.6% yoy, but, Annualised New Premiums (ANP) grew by only 5.6% vs.
20.9% in 1H09. We understand that the ANP was under pressure as Allianz introduced its first universal life
product, the Income Generator.
- Maintain Outperform call with an unchanged SOP-derived fair value of RM5.32/share.

Corporate Results

CIMB : Tracking expectations Outperform

2QFY10 Results/Briefing Note
- CIMB’s 2Q results met both our and consensus expectations.
- NIM (ex-Islamic income) was flattish qoq (+1bps) but down 3bps yoy.
- Non-interest income was flat qoq (+3.7% yoy), helped by a RM144m gain on disposal of fixed assets
(mainly relates to sale and leaseback transaction).
- CIR was broadly stable at 55.3% (1Q10: 55.2%; 2Q09: 54.1%).
- Gross loans grew +5.3% qoq and +12.5% yoy underpinned by the Malaysian consumer loans (+3.4% qoq;
+15.2% yoy) and +8.9% qoq (+30.7% yoy) expansion (in RM terms) in CIMB Niaga’s loan book.
- The group’s gross impaired loan ratio improved to 7.2% from 7.5% the previous quarter but LLC fell to
78.4% from 80.5% as at end-1Q10.
- We fine-tune our earnings forecasts although the overall impact is not significant.
- Fair value of RM8.40 remains unchanged, based on target CY11 PER of 15x. Maintain Outperform

Sime Darby : Kitchen sinking done - what’s next? Market Perform (up from UP)
4QFY10 Results/Briefing Note
- FY06/10 core net profit came in above our expectations, at 115% of our forecasts. In 4QFY10, Sime
recorded more EI losses for the E&U division of RM777.3m, which included RM213m in write-offs for its
groundwater project; RM61.2m of losses for impairment in investment in the healthcare sector and
RM18.2m in unrealised forex losses, bringing total EI loss for FY10 to an estimated RM1.95bn.
Management did not break down the EI losses for the E&U division by project, as it did not want to
jeapordise its VO recovery.
- The analysts briefing focused primarily on Sime’s oil and gas division provisions and the strategy going
forward with the new CEO at the helm. The key points from the briefing include: 1) strategic direction set
forth by new CEO; 2) more clarity on the provisions made in the E&U division this quarter and what to
expect going forward; and 3) expectation for plantation divisions.
- Post-results, we have trimmed our forecasts by 2-3% p.a.. We introduce our FY13 forecast. However, we
raise our fair value to RM8.35 (from RM8.00), after updating for Sime’s latest net debt balance and after
reducing our holding company discount to 20% (from 25%). We believe the worst is over for Sime and
expect it to now trade in line with the market. Upgrade to Market Perform (from underperform).

Genting Malaysia : Keeping it up Market Perform

4QFY10 Results/Briefing Note
- 1HFY10 core net profit was in line with our expectations. Total revenue grew 8% yoy mainly on the back of
stronger contributions from leisure and hospitality (+8.2% yoy) driven by stronger volumes and better luck
factor in the premium player business. Core net profit rose by a stronger 11.4% yoy in 1HFY10 due mainly
to higher EBIT margins of 1%-pt yoy in the leisure and hospitality division, on better luck factor in the
premium player segment, which contributed more than 35% to business (up from low-30+% in 1H09).
- Key briefing takeaways: 1) visitor arrivals are up 5% yoy in 1HFY10; 2) comments on impact of increased
competition in region; and 3) comments on new investments in UK and New York.
- Forecasts unchanged. After adjusting for the latest market value for Genting HK and updating for GM’s
end-2QFY10 net cash balance, our SOP-based fair value is raised slightly to RM3.25 (from RM3.20). Note
that our net cash balance has been adjusted for GM’s investment cost for Genting UK (RM2.1bn) and
Aqueduct New York (RM2.3bn). Maintain Market Perform.

Company Quarter Result Results Comment And Changes To Forecasts Recom

Genting 2Q10 Above Raises our net profit forecasts by 51.9% for FY10 and by 35-40% for OP, FV =
FY11-12. Raised our SOP fair value of RM11.00 (from RM9.30). RM11.00
AEON Co. 2Q10 In line No change to forecasts. Maintain fair value of RM5.28 based on 12x MP, FV =
FY12/11 EPS. RM5.28
WTK 2Q10 In line No change to forecasts. Maintain fair value of RM1.60 based on target OP, FV =
PER of 12x FY11 EPS. RM1.60
Kossan 2Q10 In line No change to forecasts. Maintain fair value of RM5.36 based on OP, FV =
unchanged target FY11 PER of 12x. RM5.36
Mah Sing 2Q10 In line Property projects in Penang, Klang Valley and JB continued to OP, FV =
contribute positively, but EBIT margin was under pressure due to the RM2.06
rental yield guarantee for Icon Tun Razak, where occupancy rate is still
poor. We revise our FY10-12 EPS forecasts by -14% to +7% after fine-
tuning our assumptions for take-up rate and timeline of property
launches. RNAV-based FV lowered slightly to RM2.06, from RM2.09.
Sunrise 4Q10 In line Unbilled sales declined by 5% to RM861m, but this will be replenished OP, FV =
by RM6.6bn GDV of new projects from 2H10 to 2011. After some fine RM2.88
tuning, our FY11-12 EPS forecasts trimmed slightly by 1-5%. Adjusting
for latest balance sheet figures, our fair value is raised to RM2.88 from
RM2.76, based on an unchanged 30% discount to RNAV.
YNH 2Q10 In line Key projects that underpinned earnings for the quarter include Lot 163 MP, FV =
Suites (KL), Ceriaan Kiara (Mont’ Kiara), and township development in RM1.86
Taman Manjung Baru (Seri Manjung), Taman Singa Baru, Taman
Pegawai, Taman Emas, and sales of development land. No change to
forecasts. Fair value kept at RM1.86, based on 40% discount to RNAV.
Puncak Niaga 2Q10 In line No change to forecasts. Indicative fair value raised by 3.1% to RM3.01 MP, FV =
(at 20% discount to its DCF=derived NPV of RM3.77) after: 1) rolling RM3.01
forward the base year; and 2) updating the net debt amount.

Technical Highlights

Daily Trading Strategy : Further confirmation needed to resume upside momentum…

- Yesterday’s sudden reversal caught us by surprise as it has reduced the possibility of triggering a technical co
the FBM KLCI.
- With the huge positive candle registered on the board plus a record of a fresh 30-month high for the index s
previous bullish momentum.
- However, given the mixed momentum readings and the poorer daily turnover (below 800m – 1.0bn shares ma
of confirmation signals today before jumping on the bandwagon for an extended rally on the FBM KLCI in ses
is at 1,450.
- Should the selling resume today, forcing the index to fall to below 1,400 again, it will restore the corrective mo
term correction trigger point near 1,390 and the 10-day SMA again.
- Further support is seen at 1,350, near the 40-day SMA of 1,354.
- In our view, investors are likely to wait for the second reading of the US 2Q GDP and a key speech by
Bernanke tonight, before deciding their next course of action next week.

Daily Technical Watch: Berjaya Corporation – Selling pressure expected to continue in the near term…
- 10-day SMA: RM1.0265
- 40-day SMA: RM1.0964
 - Support: IS = RM0.88 S1 = RM0.75 S2 = RM0.50
- Resistance: IR = RM1.06 R1 = RM1.20 R2 = RM1.33

Bulletin Board

Co/Sector News Impact Recom

Axiata Group Axiata announced that Dato’ Yusof Anuar
Yaacob (Executive Director & Group CFO) will be
leaving by end-Nov 10 to join Goldman Sachs
Corporate Finance Malaysia as the Managing
Director, Chairman. Dato’ Yusof’s replacement
will be announced in due course.
Affin Affin and its foreign partner, Hong Kong’s The
Bank of East Asia, have submitted a proposal to
the China Banking Regulation Authority to open
China’s first Islamic bank. (Business Times)
TNB Announced a 1-for-4 bonus issue. (Bursa)
Supermax 2Q10 net profit of RM45.9m (+77.9% yoy) was
within consensus expectations with 1HFY10 net
profit of RM97.3m (+114% yoy) accounting 52%
of consensus expectations. Qoq, 2Q10 earnings
fell 10.9% as a result of time lag in passing on
high latex prices and weakening US$ (Bursa).
Neutral. We believe it would be “business-as- OP, FV =
usual” for Axiata, as Dato’s Yusof’s replacement RM4.75
will be supported by the existing senior
management team.
While we do not expect earnings contribution OP, FV =
from this and the recent proposal to take up a RM4.10
stake in Bank Ina of Indonesia, to be significant
in the near-mid term, nevertheless, these would
help Affin widen its regional footprint. We think
this also forms part of the further collaboration
ahead with BEA that management had
mentioned in the recent analyst briefing.
Neutral. The bonus issue will further improve the OP, FV =
liquidity of the shares but has not impact on RM10.20
valuations.
Neutral. As highlighted earlier, the near-term NR
outlook for some of the rubber glove
manufacturers may be negative. We believe the
long-term outlook for the sector remains positive
given the rising awareness for health safety, as
well as in response to disease outbreaks.

Important Dates

Company Entitlement details Ex-date Payment date

New entitlements
KFC Holdings Bonus issue on the basis of 1-for-1 8-Sep-10 -
KFC Holdings Share split 1-into-2 8-Sep-10 -
KFC Holdings Rights issue of free warrants 8-Sep-10 -
Axis REIT 3rd interim income dist. of 2.93 sen taxable + 0.12 sen tax exempt 8-Sep-10 12-Oct-10
CIMB Group Single-tier interim dividend of 4.625 sen 13-Sep-10 30-Sep-10
Nestle (M) Interim dividend of 50 sen single-tier tax exempt 13-Sep-10 5-Oct-10
Scomi Group Loan stock interest of 4% for ICSLS 14-Sep-10 24-Sep-10
Litrak Single tier interim dividend of 10 sen 14-Sep-10 27-Sep-10
Supermax Corporation Interim tax exempt dividend of 5% 15-Sep-10 1-Oct-10
Kimlun Corporation First interim single-tier dividend of 2 sen 20-Sep-10 18-Oct-10
Nationwide Express Courier Final dividend of 4.0% less 25% tax 23-Sep-10 25-Oct-10
EPIC First interim dividend of 2.5 sen tax exempt 28-Sep-10 18-Oct-10
Genting Malaysia Interim dividend of 3.6 sen less 25% tax 28-Sep-10 21-Oct-10
Genting Interim dividend of 3.3 sen less 25% tax 28-Sep-10 26-Oct-10
Lay Hong Final dividend of 3% less 25% tax 18-Oct-10 3-Nov-10
YNH Property Interim dividend of 3% single tier 22-Oct-10 26-Nov-10
YLI Holdings First and final dividend of 1sen less 25% tax 19-Nov-10 8-Dec-10
Sime Darby Final single tier dividend of 3 sen 29-Nov-10 15-Dec-10

Going “ex” on 1 Sep

Tompak Holdings Bonus issue on the basis of 1-for-4 1-Sep-10 -
 Tompak Holdings Share split on the basis of 1-into-2 1-Sep-10 -
Hartalega Holdings Final dividend of 5 sen single-tier 1-Sep-10 17-Sep-10
Hua Yang First and final dividend of 3 sen less 25% tax 1-Sep-10 28-Sep-10

...For more details, see individual reports attached

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