Sie sind auf Seite 1von 4

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

RHB Research Institute

RHB Equity 360°


6 August 2010 (Healthcare, Faber, Amway, Notion; Technical: Equine, Boustead)

Top Story : Healthcare – The wealth effect Overweight


Sector Update
- Healthcare is a long-term growth business, notwithstanding Khazanah’s willingness to pay a big premium
for Parkway.
- In our view, the wealth effect will be one of the primary drivers for growth in healthcare expenditure in
Malaysia. The Government has already stated its long-term plans under the New Economic Model to raise
per capita income from US$7.6k currently to US$15k in 10 years. Medical insurance, tax incentives and
medical tourism will provide the additional growth drivers.
- With the exit of Parkway from the equity market, we believe there will be a scarcity premium attached to the
remaining and broadly comparable hospital groups like KPJ. As it stands, regional peers’ average PER has
moved up to 18.5x, from 17.9x in Jun.
- We also highlight the growth prospects for the non-medical support services players like Faber, as well as
the long-term growth prospects for the rubber glove manufacturers (although we note the potential earnings
disappointment in the upcoming results).
- We maintain our Outperform calls for KPJ (with an upgraded fair value of RM4.51) and Faber (with an
upgraded fair value of RM3.82).

Corporate Highlights

Faber : Non-concession IFM boosted 2QFY10 earnings Outperform


2QFY10 Results
- 2QFY10 net profit of RM32.5m (+134.5% yoy) came in within expectations with 1HFY10 net profit of
RM46.7m (+121.9% yoy) accounting for 48% of our and consensus full-year estimates respectively.
- Qoq, IFM revenue grew 37.3% on the back of the higher contribution from the overseas IFM segment, as
non-concession revenue grew by 116.7% qoq. Faber also recognised higher revenue from property of
RM20.5m (vs. RM2.0m in 1Q10) due to higher progress billings from the Armada Villa Phase 1A in Taman
Desa, which was launched in Apr 2010. Consequently, 2Q10 earnings grew by 125.6% qoq.
- We have tweaked our FY10-12 net profit forecasts slightly to RM95.3m/RM95.7m/RM166.1m (vs.
RM96.3m/RM87.8m/RM157.5m previously) respectively.
- Our fair value has been raised to RM3.82 from RM3.54 (based on SOP valuation). Reiterate Outperform.

Amway : 1H FY12/10 within expectations Market Perform (down from OP)


3QFY10 Results
- Amway’s 1HFY12/10 net profit of RM38.5m (+7.8% yoy) was within ours and consensus estimates,
accounting for 43% and 46% of our and consensus earnings forecast respectively.
- In 2Q10, Amway declared a second single tier interim dividend of 9 sen bringing the YTD total to 18 sen.
- Operating margins grew by 4.9%-pts qoq and 3.5%-pts yoy, to 17.2% as USD/RM rate declined.
- We maintain our DCF-derived fair value at RM8.45, based on an unchanged WACC of 8.1%. However, we
downgrade the stock to Market Perform due to limited upside in its current share price of only 5.6%.

Notion Vtec : Worse than feared Underperform


3QFY10 Results
- 9MFY9/10 net profit of RM22.9m was below our and consensus expectations, accounting for 71.1% and
55.8% of our full-year and consensus forecast respectively. The key variance was due to: 1) higher-than-
expected costs; and 2) stronger RM vs. US$.
- Although 3QFY10 revenue rose 7.1% qoq, the company incurred higher-than-expected costs stemming
from the capacity expansion of the 2.5’’ HDD baseplates. Consequently, EBITDA margins dropped 20.8%-
pts qoq and 21.4%-pts yoy which resulted in a drop in net earnings by 74.9% qoq and 72.2% yoy.
- We have cut our FY10-12 earnings projections again by 22.2%, 25.4% and 28.4% respectively to reflect: 1)
lower sales from the HDD segment i.e. lower contribution from the 2.5’’ baseplate; 2) lower margins due to
higher costs; and 3) lower utilisation rate.
- Accordingly, we have cut our fair value to RM1.54 (from RM2.07 previously) based FY9/11 8x FD EPS.
Technical Highlights

Daily Trading Strategy : Another round of rally once consolidation ends…


- Generally, as expected, the FBM KLCI continued to undergo its consolidation after the recent rally.
- And with another small negative candle on the chart, coupled with possible pre-weekend profit-taking
activities and cautiousness ahead of the US monthly jobs data due on Friday, the index could expect
further mild weakness ahead.
- Having said that, downside should be limited, due to a stronghold near the 10-day SMA of 1,358 and 1,350.
- And even the short-term momentum indicators appearing to lose steam, the overall uptrend of the FBM
KLCI is still intact, as long as the 10-day SMA and 1,350 remains supportive and the average daily turnover
for the market stays robust at 800m – 1.0bn shares in the near term.
- In fact, given the sustainable rotational plays of late, the FBM KLCI could kick off another round of rally
anytime soon, once the consolidation mode ends, in our view.

Daily Technical Watch: Equine – A decisive penetration to above RM0.52 will turn the chart more bullish…
- 10-day SMA: RM0.4405
- 40-day SMA: RM0.4027
- Support: IS = RM0.445 S1 = RM0.365
- Resistance: IR = RM0.52 R1 = RM0.59 R2 = RM0.685

Short-term Trading Idea : Boustead Holdings – A breakout rally is on the cards… Trading Buy
- Strategy: Trading buy for a further breakout rally above RM4.00 soon.
- Resistance: IR = RM4.44 R1 = RM5.02
- Support: IS = RM3.50 S1 = RM2.86 S2 = RM2.37
- Exit: A stop loss will be triggered if it loses the 40-day SMA of RM3.86.

Bulletin Board

Changes To Foreign Shareholdings (%)


Stock Jun-10 Jul-10 Chg (%)
AirAsia 50.4 48.1 -2.3
AMMB 28.5 27.1 -1.4
B-Toto 18.0 17.0 -1.0
CIMB 42.4 41.5 -0.9
Genting 36.0 37.0 1.0
Genting M'sia 31.0 33.0 2.0
Hong Leong Bank 8.1 7.3 -0.8
IOI Corp. 24.0 19.9 -4.1
Maybank 11.0 12.6 1.7
Public Bank 26.5 26.6 0.1
Sime Darby 14.7 13.1 -1.6

Co/Sector News Impact Recom


Motor Perodua is open to talks on a Neutral. While a merger between Proton and OW
collaboration/partnership with Proton (Starbiz). Perodua would mean control of more than 50%
in the market share, we believe it would be quite
difficult to implement as both carmakers have
different business models.
CIMB CIMB expects to record double-digit growth in Neutral. The SME segment currently makes up OP, FV =
loans for the SME sector next year. (StarBiz) around 14.8% of the group’s loan book and RM8.40
management had said that they plan to refocus
on this segment once again.
MAHB MAHB through its subsidiary, Malaysia Airports Positive. We believe funding the new LCCT with OP, FV =
Capital plans to offer up to RM3.1bn Islamic Islamic bonds is a good move, given the RM6.24
bonds to part finance the construction of the new generally lower interest rates as compared to
LCCT and/or refinance MAHB’s normal loans. No changes to our forecasts for
borrowings/financings utilised for Shariah- now pending further details.
compliant purposes. Both the Islamic
Commercial Papers ("ICP") and Islamic Medium
Term Note ("MTN") are rated AAA by RAM
Rating Services Sdn Bhd. (Bursa).
Puncak Sino Water Pte Ltd (a 80%-owned subsidiary of Neutral, contribution from its business venture in MP, FV =
Niaga Puncak) raised its stake in Luwei (which China will remain insignificant over the next few RM2.92
undertakes water and wastewater projects in years.
China from 83% to 87.9%. (Bursa Malaysia)
Sime Darby According to a report in The Star, a GM at Sime Negative. This is a result of the MACC probe that UP, FV =
is expected to be charged with graft totaling started when Sime declared its provisions of RM8.00
RM0.3m, following a MACC probe. The GM RM964m for the oil & gas division in May 2010.
allegedly received the monies from contractors in We are unsure if there will be more people
Johor and Klang Valley, one of which is charged by the MACC as the probe is still
purportedly related to the shipping industry. (The ongoing currently, but if there are, investor
Star) sentiment surrounding the stock would continue
to be weak, in our view.
Sime Darby In the Malaysian Insider yesterday, a report said We think this is highly unlikely, as this would UP, FV =
that Sime is likely to post losses in its FY10 mean that Sime would have to provide for RM8.00
earnings of between RM2-2.5bn, owing to further another RM3.3-3.8bn in the 4QFY10 results due
provisions from its Bakun and MOQ project. 26 Aug, in order to reach a full year loss of RM2-
(Malaysian Insider) 2.5bn, based on our FY10 net profit estimates of
RM1.36bn.
Genting Tan Sri Lim Kok Thay, CEO of Genting Plant Neutral, as mentioned in our report dated 28 Jul, UP, FV =
Plantations launched the groundbreaking ceremony for its we do not expect this to contribute much to RM6.70
Chelsea Premium Outlets in Kulai, Johor earnings, especially in the first year of
yesterday. The Premium Outlets, a 50%-joint operations. We expect the longer-term impact to
venture between Genting Plantations and be positive, however, as it should bring more
Premium Outlets, a unit of Simon Property visitors to the area, therefore increasing the value
Group, is due to open its doors in Sep next year of Genting Plantation’s property developments
and is expected to cost about RM149m, with there.
gross built-up space of about 330,000 sq.ft..
Besides the Premium Outlets, the Genting group
is said to be interested in building other
attractions such as a hotel and an international
branded water theme park to complement the
mall. (Business Times)

Important Dates

Company Entitlement details Ex-date Payment date


New entitlements
Amway (M) Second interim single tier dividend of 9 sen 19-Aug-10 7-Sep-10

Going “ex” on 10 Aug


BAT (M) First interim dividend of 113 sen tax exempt under single tier 10-Aug-10 20-Aug-10
Bolton First and final dividend of 3 sen less 25% tax 10-Aug-10 8-Sep-10
Konsortium Logistik Final dividend of 8 sen less 25% tax 10-Aug-10 9-Sep-10

...For more details, see individual reports attached

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

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

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

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

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

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

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

Stock Ratings

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

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

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

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

Industry/Sector Ratings

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

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

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

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

This report may not be reproduced or redistributed, in whole or in part, without the written permission of RHBRI and RHBRI accepts no liability whatsoever for the actions of third parties in this respect.