Market Dateline PP 7767/09/2010(025354)

RHB Research Institute

RHB Equity 360°

29 September 2010 (Gamuda, Jaya Tiasa; Technical: Unisem)

Top Story : Gamuda – FY10 net profit grows 45%, expects cabinet approval for MRT soon Trading Buy
4QFY10 Results/Briefing Note
- FY07/10 net profit came in within our forecast and the market expectation.
- Gamuda is confident about securing the Cabinet approval for the RM36bn MRT project “before the end of
the year”. It is optimistic that physical work can start as soon as by mid- or late-2011.
- Gamuda has emerged one of the five final contenders for the RM1.5bn Durkhan Highway 2 project in the
Gulf states.
- Gamuda is on track to launch the Tan Thang project in HCMC in Oct 2010. However, the maiden launch of
the Yenso Park project in Hanoi has been delayed to Feb 2011 from Aug 2010.
- We raise FY07/11-12 net profit forecasts by 23-27% largely to reflect stronger property profits in Malaysia.
- Fair value is raised by 14% from RM3.96 to RM4.51. Maintain Trading Buy.

Corporate Highlights

Jaya Tiasa : Higher selling prices boost performance Outperform

1QFY11 Results
- 1Q FY04/11 net profit of RM22.5m came in at 31% and 40% of our and consensus forecast respectively. In
line with our forecast as we expect Jaya Tiasa to record lower net profit in the next few quarters due to the
strengthening of RM vs. US$.
- Yoy, 1Q FY04/11 net profit jumped to RM22.5m due to: 1) increase in average selling price for logs (7%);
2) better margin for plywood sales; and 3) increase in sales volume and average selling prices for FFB.
- Qoq, revenue declined by 2% mainly due to the fall in sales volume for log (18%) and plywood (15%).
However, net profit jumped to RM22.5m (from RM9m in previous quarter) as a result of: 1) higher average
selling price of logs and plywood; and 2) increase in the sales volume of FFB and crude palm oil
- No changes to our forecast. Indicative fair value is RM4.43 based on 12x CY11 timber and plantation
division earnings. Maintain Outperform.

Technical Highlights

Daily Trading Strategy : Unless 1,450 is violated, short-term uptrend remains intact…
- Disappointedly, buying momentum failed to extend yesterday, forcing the FBM KLCI to fail its attempt to
cross over the 10-day SMA of 1,467.
- The weak closing with a “negative harami” candle also indicates weaker trading momentum ahead.
- In our view, the index will likely retreat to cover the small technical gap before testing the 1,450 critical level
in the near term.
- But unless the crucial technical level of 1,450 is violated, the current uptrend will stay intact. As a result, we
expect a strong support near 1,450 in the near term.
- And for the index to resume its bullish momentum, it must break out from the 10-day SMA of 1,467 soon.
- The next lower supports are seen at a tiny technical gap at 1,438.32 – 1,439.26 and the 40-day SMA of
1,413.
- In our opinion, the local market sentiment will continue to be influenced by volatility in the overseas markets
going forward.

Daily Technical Watch: Unisem – Must penetrate 40-day SMA and RM2.10 to turn med-term outlook positive
- 10-day SMA: RM1.818
- 40-day SMA: RM1.989
- Support: IS = RM1.80 S1 = RM1.55 S2 = RM1.30
- Resistance: IR = RM2.10 R1 = RM2.40 R2 = RM2.60
 Bulletin Board

Co/Sector News Impact Recom

Oil and Gas Petronas could get a handsome profit from the
sale of its 14.9% equity stake in Cairn India Ltd.
(CIL) under the general takeover offer (GO)
exercise by Vedanta Resources. Vedanta is
offering Rs355/share. According to the news
article, Petronas bought a 10% stake in Jan-07 at
Rs176.5/share, 2.7% stake in Mar-08 at
Rs224.30 and 2.3% stake for Rs260/ share in
Oct-09. At the Rs355/share price tag, Petronas is
set to gain about US$900m. The divestment is
believed to be part of Petronas’ new strategy to
divest assets that are in markets that the national
oil firm considers not strategic. (Business Times)
Rubber Malaysia’s export of rubber products is expected
Glove to touch RM30bn in 10 years driven primarily by
strong demand for rubber gloves (Business
Times).
Proton Proton Holdings, which owns British-based Neutral. The dispute is not in relation to any OP, FV =
Group Lotus squared up for a fight with racing operational matters of Proton, as such, will have RM5.50
team boss Datuk Seri Tony Fernandes on minimal impact to the stock.
Monday over the right to use the brand in
Formula One. Datuk Seri Tony Fernandes who
runs AirAsia said he acquired Team Lotus
Ventures from David Hunt – brother of the late
world champion James – who had retained the
rights to the name since the team’s exit from F1.
(Business Times)
Genting Genting Malaysia has paid up the US$380m
Malaysia (RM1.18bn) licensing fee to the New York state
to develop an electronic slot machine parlour at
the Aqueduct Racetrack five days before the due
date. New York state intends to sell US$250m
bonds to help finance this project. (Bloomberg)
Neutral. We concur with the view that the N
divestment is in line with Petronas’ strategy to
focus on developing domestic fields instead of
overseas ventures that are not strategic. We are
positive that Petronas’ will stand to gain some
RM2.8bn from the sale as this would free up
some cash that could be utilised for their capex
plans here.
We remain positive on the sector over the long- N
term as gloves are considered to be the most
basic and affordable form of protection against
viruses in the healthcare industry. However, in
near-term, the outlook remains challenging on
the back of the high latex cost and weakening
US$ (vs. RM) as well as slowing orders, which,
we believe will affect some glove manufacturers
to adjust prices for the higher costs.
Neutral. We expect the earlier payment of the MP, FV =
licensing fee to speed up the process, so that RM3.25
GM can start work on the project as soon as (under
possible. The proceeds from US$250m bonds to review)
be sold by the government will be given to GM as
a Government grant, which will offset the total
capex cost of US$350m.

Important Dates

Company Entitlement details Ex-date Payment date

New entitlements
HPI Resources First and final dividend of 5 sen tax exempt 1-Nov-10 22-Nov-10
Kein Hing International First and final tax exempt dividend of 4% 22-Oct-10 19-Nov-10

Going “ex” on 30 Sep

Malaysia Steel Works Renounceable rights issue of warrants on the basis of 1-for-2 30-Sep-10 -

...For more details, see individual reports attached

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