2010 12 17 (CIMB) MY Strategy 2011 MAL-NAV-2011-171210

The S.E.A.
Navigator – Malaysia 2011 [ 1 ]

Contents
Liquidity-fuelled pre-election rally................................................................................ 3
Review of 2010 ........................................................................................................... 4
V-shaped recovery so far ...................................................................................... 4
Key drivers for 2011.................................................................................................... 7
Foreign funds boost .............................................................................................. 7
Elections, elections, elections ............................................................................... 9
Economic outlook ..................................................................................................... 12
Key risks for 2011 ..................................................................................................... 16
Valuation and recommendation ................................................................................ 17
Maintain OVERWEIGHT on Malaysia ................................................................. 17
Sectors to overweight.......................................................................................... 19
CIMB picks in 2011................................................................................................... 23
Sector Briefs….......................................................................................................... 25
Company Briefs…..................................................................................................... 45
Appendices… ......................................................................................................... 206
Please read carefully the important disclosures at the end of this publication.
The S.E.A. Navigator – Malaysia 2011 [ 2 ]

Liquidity-fuelled pre-election rally OVERWEIGHT
2011 Tgt. Index: 1,700
• Significant trading catalysts. The KLCI confounded sceptics in 2010 when it

scaled new all-time highs, capping two years of a V-shaped recovery. 2011 looks
set to be another good year, driven by foreign funds which have strayed from the
beaten path in search of higher returns in emerging markets and also election fever
as elections are generally positive for the market. Malaysia remains underowned by
foreign funds, whose holdings are still worth 30% less than before the global crisis.
While we think it is too early to call for general elections, we note that Sarawak must
hold state elections by Jul 2011. Umno party elections should be held shortly after
general elections. We continue to rate Malaysia an OVERWEIGHT and raise our
end-11 KLCI target from 1,610 to 1,700pts as we halve the discount to the 3-year
moving average P/E to 5%. Accordingly, we have raised the target prices for 32
stocks under our coverage.
• 2010 was another strong year. After rebounding 43% in 2009, the KLCI gained
18% YTD, in the process breaking many records including the previous high for the
KLCI. Domestic factors that stoked the market include the government’s
transformation efforts such as the Economic Transformation Programme, the New
Economic Model and the 10th Malaysia Plan. The market ran into headwinds
towards mid-year as investor fret over a double-dip in Europe and the US. But
foreign funds turned sizeable net buyers in 2H following the waning of double-dip
fears and rising awareness of the stronger growth potential of emerging markets.
• Very underowned. Foreign investors have been making a beeline for Malaysia,
visiting companies and touring Iskandar Malaysia. The renewed interest is the result
of myriad factors including Bursa Malaysia’s perceived defensive qualities, the Najib
administration’s transformation programmes and severe underownership of the
local stockmarket due to the massive selldown after the 2008 general elections.
Foreign funds remain extremely underweighted in Malaysia and a return to neutral
weightings would have a very significant impact on the market.
• Elections good for the market. The 2011 Budget announced in Oct appeared to
us as a populist pre-election budget. The question is which election – general
elections or Sarawak state elections? We believe it is the latter though we think it
does not matter as either election augurs well for the market since the period
leading up to elections is typically investor-friendly. This is particularly true for Umno
party elections where the KLCI has historically rallied 30% in the 1-year period
before polling. For 2011, we expect pump-priming efforts to intensify, negative
policies to be kept to a minimum and speculative activities to pick up steam.
• Prefer cyclicals and GLCs. 2011 is likely to turn out to be a good trading year for
the market. Although risks remain relatively high, returns should be high and quick
too. We expect continued volatility but with an upward bias as liquidity fuels the
market. Our preferred sectors are those in the cyclical space including banking,
construction, property, oil & gas and auto which stand to benefit from renewed
investor confidence and higher risk appetite. GLCs should also gain prominence as
investors speculate on those that will gain from pre-election government largesse.
Terence WONG, CFA +60 (3) 2084-9689 – terence.wong@cimb.com
Figure 1: Top picks

Target Core 3-yr EPS P/BV ROE Div
Bloomberg Price price Mkt cap P/E (x) CAGR (x) (%) yield (%)
ticker Recom. (Local) (Local) (US$ m) CY2011 CY2012 (%) CY2011 CY2011 CY2011
Affin AHB MK O 3.20 4.04 1,520 8.8 8.0 17.1 0.9 10.2 3.8
Axiata AXIATA MK O 4.67 5.90 12,533 12.8 11.9 35.8 1.8 14.5 2.4
Gamuda GAM MK O 3.76 5.00 2,443 19.6 15.2 33.8 3.6 19.2 3.2
Kencana KEPB MK O 2.01 2.60 1,060 14.1 12.2 18.6 10.2 78.6 1.5
MAS MAS MK O 2.07 3.00 2,199 11.9 4.0 178.5 1.6 18.4 0.0
MRCB MRC MK TB 2.01 2.53 882 41.3 34.1 15.6 3.3 8.3 0.5
RHB Cap RHBC MK O 8.59 10.50 5,878 10.9 9.5 17.6 1.7 16.6 3.7
SapuraCrest SCRES MK O 2.82 3.30 1,144 13.4 12.4 19.5 3.8 28.9 3.2
Sime Darby SIME MK TB 8.74 10.78 16,691 16.3 14.6 8.7 2.2 13.9 4.1
WCT WCT MK O 3.00 4.34 750 13.0 12.5 10.8 1.8 15.0 3.3
O = Outperform, N = Neutral, U = Underperform, TB = Trading Buy and TS = Trading Sell
Source: Company, CIMB Research

Review of 2010
V-shaped recovery so far

2010 has been another Similar to 2009, 2010 confounded the naysayers although there were hiccups along
good year the way as global markets pulled back in 2Q10 on worries that Europe and the US
may slip back into recession. But quantitative easing by the US propped up markets
and emerging markets decoupled somewhat from the developed markets as investors
strayed from the beaten track in their hunt for better returns. Malaysia has surged 18%
YTD but its performance pales in comparison with the region’s star performers, the
TIP markets. Thailand, Indonesia and the Philippines are up a massive 38-47%
despite gaining 63-87% in 2009. This brings their 2-year gains to an astounding 126-
175%. Many markets including Malaysia hit new all-time highs in 2010. Compared with
their end-07 closings, Indonesia is the best performer, with Thailand in second place
and the Philippines in the third spot.
Figure 2: YTD, 2-year and 3-year performance of various indices

31 Dec 07 31 Dec 08 31 Dec 09 6 Dec 10 YT D From end-08 From end-07
JCI Index 2,745.8 1,355.4 2,534.4 3,722.3 46.9% 174.6% 35.6%
SET Index 858.1 450.0 734.5 1,034.1 40.8% 129.8% 20.5%
PCOMP Index 3,621.6 1,872.9 3,052.7 4,223.1 38.3% 125.5% 16.6%
FBMKLCI Index 1,445.0 876.8 1,272.8 1,501.7 18.0% 71.3% 3.9%
SENSEX Index 20,287.0 9,647.3 17,464.8 19,981.3 14.4% 107.1% -1.5%
FSSTI Index 3,465.6 1,761.6 2,897.6 3,181.4 9.8% 80.6% -8.2%
INDU Index 13,264.8 8,776.4 10,428.1 11,382.1 9.1% 29.7% -14.2%
UKX Index 6,456.9 4,434.2 5,412.9 5,754.7 6.3% 29.8% -10.9%
HSI Index 27,812.7 14,387.5 21,872.5 23,237.7 6.2% 61.5% -16.4%
NKY Index 15,307.8 8,859.6 10,546.4 10,167.2 -3.6% 14.8% -33.6%
SHCOMP Index 5,261.6 1,820.8 3,277.1 2,857.2 -12.8% 56.9% -45.7%
Source: Bloomberg, CIMB Research
Regional markets, The reasons for the strong performance by regional markets are manifold, including 1)
particularly TIPs, receding fears of a double dip in the developed countries, 2) global funds’ reallocation
performed well in 2010 of funds to emerging markets, 3) stronger-than-expected economic growth in Asia,
and 4) continued earnings upgrades by equity analysts. Malaysia’s respectable
performance in 2010 got a helping hand from domestic factors such as the
government’s numerous transformation efforts including the Economic Transformation
Programme (ETP), the New Economic Model (NEM) and the 10th Malaysia Plan
(10MP). We started the year with a KLCI target of 1,450 points, which we raised to
1,500 points after the 2Q results season in Aug. It appears that the KLCI is likely to
again beat our revised target. Foreign funds turned significant net buyers of Malaysia
in Jun. Jul’s inflow of US$308m was, in fact, the highest since Sep 07.
Figure 3: Monthly cross-border net buying/(selling) of Malaysian equities (US$ m)
1000
500
0
3/31/1995
3/31/1996
3/31/1997
3/31/1998
3/31/1999
3/31/2000
3/31/2001
3/31/2002
3/31/2003
3/31/2004
3/31/2005
3/31/2006
3/31/2007
3/31/2008
3/31/2009
3/31/2010
-500
-1000
-1500
Source: EPFR, CIMB Research

Heavyweights lifted the Although EPS forecasts were revised higher throughout the year, they were driven by
KLCI higher in 1H big-cap sectors such as banks and gaming. Smaller-cap stocks started to lose
momentum even for 4Q09 results, leading to a fall in the revision ratio to around 1x. A
ratio of 1x basically means that the number of companies that beat expectations is
roughly balanced by the number of companies that disappointed. The big-cap banking
and gaming sectors as well as selected heavyweights such as Axiata and PLUS
Expressways pushed the market higher in 1H. 2H was when stocks from the
plantations, construction and property sectors were re-rated. This then led to rotational
play on second- and third-liner stocks.
Figure 4: Qoq change in our KLCI universe’s earnings estimates post results seasons
3.0% 2.7%
CY10 CY11 2.1%
1.8% 1.9%
2.0%
1.6% 1.5%
1.1% 1.0%
1.0%
0.0%
-1.0%
End Feb 2010 End May 2010 End Aug 2010 End Nov 2010
Source: CIMB estimates
Figure 5: Revisions up/revisions down (x)
2.00
1.80
Positive momentum for market
1.60
1.40
1.20
1.00
0.80
0.60 Negative momentum for market
0.40
0.20
0.00
3Q03 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10
Figure 6: Performance of indices in 2010

31 Dec 08 31 Dec 09 % change 06 Dec 10 % change
KLTIN Index 231.01 291.81 26.3% 571.46 95.8%
FBM70 Index 5,442.06 8,269.22 52.0% 10,561.60 27.7%
KLPRP Index 515.61 781.71 51.6% 988.77 26.5%
KLCON Index 164.18 224.29 36.6% 279.67 24.7%
KLPLN Index 4,142.80 6,362.91 53.6% 7,870.14 23.7%
KLFIN Index 6,791.71 11,053.40 62.7% 13,622.41 23.2%
KLCSU Index 282.03 372.39 32.0% 451.14 21.1%
FBM100 Index 5,613.94 8,308.89 48.0% 9,960.57 19.9%
FBMEMAS Index 5,726.46 8,507.61 48.6% 10,189.70 19.8%
FBMSC Index 6,552.82 10,165.81 55.1% 12,098.33 19.0%
FBMKLCI Index 876.75 1,272.78 46.7% 1,501.74 18.0%
KLSER Index 117.91 160.94 46.7% 188.09 16.9%
FBMS Index 5,949.63 8,509.52 43.0% 9,916.55 16.5%
FBMFL Index 5,420.98 7,421.81 36.9% 8,511.95 14.7%
FBMHS Index 6,640.04 9,312.02 40.2% 10,377.91 11.4%
KLIND Index 2,063.85 2,654.51 28.6% 2,848.73 7.3%
KLTEC Index 13.69 18.14 32.5% 17.69 -2.5%
FBMMES Index 3,333.59 4,299.58 29.0% 4,143.75 -3.6%
Average 42.8% 21.1%
Source: CIMB estimates, Bloomberg

Laggard sectors played Plantation stocks enjoyed a re-rating in Oct, thanks to higher commodity prices
catch-up in 2H including CPO. Construction stocks were re-rated on the back of Gamuda’s strong
gains and reappearance in the KLCI. Also, the government’s commitment to pump-
priming was reaffirmed many times, for instance, during the release of the 10MP in
Jun, the soft launch of the ETP in Sep and the 2011 Budget in Oct. Property stocks
crept up unsuspectingly as investors shrugged off concerns over a cap on the loans-
to-value ratio and gave weight to the earnings impact of record sales in 2010.
Newsflow on potential landbanking and M&As by the big developers also helped in re-
rating the sector.
Figure 7: Four pillars of national transformation

Three anchors for
1Malaysia
Source: NEM For Malaysia Part 1
Figure 8: KLCI and various events in 2010

1550 22/11 -Ireland fiscal crisis
23/09 -FTSE Ups Status To Advanced Emerging

15/10 -Budget 2011
Market From Secondary Emerging Market
1500
13/05 -BNM raised the OPR by
25bps to 2.5% . 23/11 -Korea tension
1450
20/01-Obama To Propose New Limits On

Banks 05/05-Europe’s debt crisis
1400
19/10-23/10 -61st UMNO
21/06 -China loosens currency grip
26/01-Obama To Propose 3 Year Spending General assembly
Freeze On Many Programs
1350
04/02- Greece Crisis 21/09 -Economic Transformation
Programme Open Day
1300
08/07 -BNM raised the OPR by
30/03-New Economic Model 25bps to 2.75% .
(NEM) announcement 10/06-PM announced 10th M'sian Plan
1250
19/05 -Germany prohibits naked short
18/02-Fed raises discount rate from selling on Government bonds and some
0.50% to 0.75% shares.
1200
1/1/2010 1/31/2010 3/2/2010 4/1/2010 5/1/2010 5/31/2010 6/30/2010 7/30/2010 8/29/2010 9/28/2010 10/28/2010 11/27/2010
Source: Bloomberg, CIMB Research

Key drivers for 2011
Foreign funds boost

Foreigners coming back In 2H10, foreign investors made a beeline for Malaysia as they visited companies and
in a big way? toured Iskandar Malaysia. The reasons for the renewed interest include Bursa
Malaysia’s perceived defensive qualities, the new administration’s various
transformation programmes and severe underownership of the local stock market.
Foreign funds remain extremely underweighted in Malaysia and the stockmarket has
been disproportionately sold down since the 2008 general elections. Malaysia’s
weighting in EM Asia is still around 2.5%, a fraction of its pre-Asian crisis levels and
still low compared to even the 4% level before the global financial crisis. Statistics from
Bursa Malaysia confirm this – foreign ownership in Malaysia is 22%, still below the
pre-global crisis level of around 27%. A return to neutral weightings by foreign funds
would have a very significant impact on the market.
Figure 9: Aggregate EM Asia weightings in Malaysia

16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Feb-96 Feb-97 Feb-98 Feb-99 Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10
Figure 10: Month-end aggregate holdings by country (US$ m)

Hong Kong Singapore Malaysia Indonesia Thailand Others EM Asia
Feb 08 31,398 14,973 9,865 7,267 9,555 177,379 250,437
Weightings in EM Asia 12.5% 6.0% 3.9% 2.9% 3.8% 70.8% 100.0%
September 27,697 14,301 7,526 10,797 12,387 211,123 283,830
Weightings in EM Asia 9.8% 5.0% 2.7% 3.8% 4.4% 74.4% 100.0%
31-mth aggregate chg -12% -4% -24% 49% 30% 19% 13%
31-mth weighting chg -22% -16% -33% 31% 14% 5% 0%
31-month net sell (4,205) (3,418) (3,370) (252) (195) 11,556 115
Net sell/Feb 08 -13% -23% -34% -3% -2% 7% 0%
Figure 11: Foreign ownership in Malaysia

28.0%
27.0%
26.0%
25.0%
24.0%
23.0%
22.0%
21.0%
20.0%
Jan 07 May 07 Sep 07 Jan 08 May 08 Sep 08 Jan 09 May 09 Sep 09 Jan 10 May 10 Sep 10
Source: Bursa, CIMB Research

Foreign funds prefer Foreign shareholding has risen substantially for stocks that are favourites of foreigners
familiar, big-cap and such as AirAsia, CIMB, E&O and Public Bank. Well-managed foreign-owned
liquid stocks companies such as BAT and Guinness also saw a big increase in foreign ownership.
What is surprising is that foreign funds have not limited their purchases to only big-cap
blue chips or even just liquid stocks. Smaller-cap stocks with relatively low liquidity
such as Mudajaya, CI Holdings, Daibochi, Latexx, Mah Sing and MCIL have also seen
a sizeable increase in foreign ownership. The interest in these stocks, however, could
have been stoked by our positive reports on the companies. The selldown by foreign
shareholders was most pronounced for Alliance Financial, Gamuda, IOI Corp, Media
Prima, Petra Perdana, SP Setia and WCT. We are also not too surprised by the
selldown of some names such as Gamuda, WCT, IOI Corp and SP Setia which were
laggards for most of the year and only started to ourperform significantly in 2H. Should
foreign funds return to Malaysia in a big way, we expect the companies that are
familiar to them to be the biggest winners.
Figure 12: Foreign shareholdings

Mid-09 (%) Mid-10 (%) % pt change Mid-09 (%) Mid-10 (%) % pt change
Adventa 10.3 10.0 (0.3) MAHB N/A 9.0 N/A
Affin Holdings Bhd 25.9 26.5 0.6 Mah Sing 14.5 16.0 1.6
AirAsia Bhd 37.0 48.1 11.1 Malayan Banking Bhd 11.0 13.2 2.3
Alam Maritim 2.0 <1.0 (1.0) Malaysian Airline System Bhd 3.9 4.6 0.7
Alliance Financial Group 44.0 39.7 (4.3) Malaysian Bulk Carriers Bhd 2.4 2.2 (1.0)
AMMB Holdings Bhd 52.6 51.3 (1.3) Malaysian Pacific Industries Bhd 9.7 8.7 (1.0)
Ann Joo Resources 4.7 5.0 0.3 Maxis N/A 9.0 N/A
Asia File 10.0 10.0 - Media Chinese International 20.0 24.0 4.0
Genting Plantation 7.0 6.0 (1.0) Media Prima Bhd 40.0 28.0 (12.0)
CIMB 34.9 42.1 7.2 MISC Bhd 4.9 4.7 (0.2)
Berjaya Sports Toto Bhd 18.0 18.0 - MRCB 19.4 13.0 (6.4)
Bintulu Port Holdings Bhd 2.9 1.4 (1.5) MTD ACPI Engineering 3.0 3.0 -
British American Tobacco Bhd 68.7 74.5 5.8 Mudajaya 5.6 16.0 10.4
Bursa Malaysia Bhd 17.3 14.3 (3.0) Nestle (Malaysia) Berhad 72.6 73.0 0.4
Carlsberg Brewery (M) Bhd 64.0 63.3 (0.7) Pelikan International Corp Bhd 20.0 21.0 1.0
CI Holdings 5.6 5.6 Petra Perdana 7.0 4.0 (3.0)
Cocoaland Holdings 1.0 2.0 1.0 Petronas Dagangan Bhd <5.0 4.0 (0.6)
Daibochi 1.0 3.0 2.0 PLUS Expressways Bhd 9.1 9.0 (0.1)
Dialog Group Bhd <5.0 10.0 5.0 Proton Holdings Bhd 5.6 10.0 4.4
DiGi.com Bhd 11.0 8.5 (2.5) Public Bank Bhd 24.9 26.6 5.0
RGB International Bhd 8.2 10.0 1.8 Puncak Niaga Holdings Bhd 17.0 17.0 -
Ekovest 8.0 8.0 - QSR Brands 3.8 4.5 0.7
Eksons Corporation Bhd 5.0 5.0 - Genting Malaysia 32.0 33.0 1.0
EON Capital Bhd 41.8 44.0 2.2 RHB Capital Bhd 6.0 32.1 26.1
E&O Bhd 9.0 25.0 16.0 SapuraCrest 31.0 30.3 (0.8)
Fraser & Neave Holdings Bhd 61.1 58.0 (3.1) Sime Darby Bhd 13.7 13.0 (0.7)
Gamuda Bhd 45.0 33.0 (12.0) SP Setia Bhd 27.0 19.0 (8.0)
Genting Bhd 36.0 37.0 1.0 Star Publications Bhd 6.0 6.0 -
Guinness Anchor Bhd 66.2 71.8 5.6 Suria Capital 11.5 5.5 (6.0)
Hap Seng Plantation 3.0 3.0 - Supermax Corp Bhd 1.6 12.0 10.4
Hartalega 5.0 5.0 - Tan Chong Motor Holdings Bhd 14.3 19.0 4.7
Hong Leong Bank Bhd 7.2 7.3 0.1 Telekom Malaysia Bhd 10.5 10.9 0.4
Hunza Properties Bhd 5.9 4.6 (1.3) Axiata 8.5 11.5 3.0
IJM Corp Bhd 32.0 38.0 6.0 Tenaga Nasional Bhd 10.3 11.0 0.7
IOI Corporation Bhd 26.0 20.0 (6.0) Tomypak Holdings 1.0 2.0 1.0
JobStreet Corp Bhd 39.0 50.0 11.0 Top Glove Holdings Bhd 34.0 35.0 1.0
JT International Bhd 62.3 61.9 (0.4) Uchi Technologies Bhd 37.0 38.0 1.0
Kencana Petroleum Bhd 6.5 6.0 (0.5) UM Land 54.5 54.5 -
KLCC Property Holdings Bhd 14.7 13.4 (1.3) UMW Holdings Bhd 5.5 6.2 0.7
Kossan Rubber Industries Bhd 9.8 9.0 (0.8) Unisem (M) Berhad 10.0 13.0 3.0
Kuala Lumpur Kepong Bhd 14.0 17.0 3.0 Wah Seong Corp Bhd 11.6 11.8 0.2
Kurnia Asia Bhd 4.3 3.8 (0.5) WCT Engineering 17.0 12.0 (5.0)
Lafarge Malayan Cement Bhd 16.5 15.4 (1.1) Wellcall Holdings Bhd 6.0 5.0 (1.0)
Latexx 1.4 3.4 2.0 YTL Power International 5.0 5.0 -

Elections, elections, elections
Preparations for elections The 2011 Budget announced on 15 Oct appeared to us to be a feel-good populist
gathering pace budget that will pave the way for elections. Toll rates on PLUS’s highways were left
alone for the next five years, the dreaded sin taxes and real property gains tax did not
feature in the budget and construction projects were aplenty. The question that must
be asked is whether this heralds general elections or Sarawak state elections. We
believe it is the latter as Sarawak state elections have to be held by Jul 2011 but the
general elections do not have to be called until 2Q13, which is more than two years
away. We observe that the National Front has won only five of the 13 by-elections held
since the Mar 08 general elections compared to eight by the Opposition. However, it
won the two most recent by-elections, which came after the people-friendly 2011
Budget.
Figure 13: By-elections since Mar 2008

Of the 13 by-elections, BN PAS PKR DAP
BN has won five, PKR Permatang Pauh (Aug 08) win
four, PAS three and Kuala Terengganu (Jan 09) win
Bukit Selambau (Mar 09) win
DAP one Bukit Gantang (Mar 09) win
Batang Ai (Apr 09) win
Penanti (May 09) win
Manek Urai (Jul 09) win
Permatang Pasir (Aug 09) win
Bagan Pinang (Oct 09) win
Hulu Selangor (Apr 10) win
Sibu (May 10) win
Galas (Nov 10) win
Batu Sapi (Nov 10) win
Source: NST, CIMB Research
Pre-elections period is Besides Sarawak and general elections, Umno party elections were originally slated to
normally good for the be in 2011. However, party elections have been delayed by up to 18 months and will
market be held shortly after general elections. Regardless of the type of election, they augur
well for the stockmarket as the period leading up to elections is typically investor-
friendly. We expect pump-priming efforts to ratchet up in 2011, negative policies to be
kept to a minimum and speculative activities to pick up steam. In the previous
elections, the KLCI gained 5% in the 12 months before the elections were held and
surged 17% thereafter. The impact of Umno party elections on the market is even
more significant. In the past nine occasions, the market rallied an average of 30%
during the 12 months leading up to Umno party elections. On the other hand, the KLCI
fell an average of 7% in the 12 months after party elections. The clear signal from the
market’s performance pre and post Umno party elections is to buy ahead of the
elections and sell shortly after it. For general elections, the results must be favourable
to the incumbent for the market to rally after the polling date. In the case of the 2008
elections, the KLCI plunged 100 points the first trading day after elections and circuit
breakers kicked in for the first time ever.
Figure 14: General and Umno party elections since 1990
1,600 General Election General Election

General Election 08-Mar-08 08-Mar-08
1,400 25-Apr-95
General Election
1,200 General Election General Election 21-Mar-04
21-Oct-90 29-Nov -99
1,000
800
600 UMNO
9-Oct-96
UMNO
400 UMNO UMNO UMNO 26-Mar-09
4-Nov -93 11-May -00 23-Sep-04
200
1/2/1990 1/2/1992 1/2/1994 1/2/1996 1/2/1998 1/2/2000 1/2/2002 1/2/2004 1/2/2006 1/2/2008 1/2/2010
Source: www.UMNO-online.com, www.spr.gov.my, CIMB Research

Figure 15: KLCI performance before and after general elections
12 m ths 9 m ths 6 m ths 3 m ths 3 m ths 6 m ths 9 m ths 12 m ths
before GE before GE before GE before GE after GE after GE after GE after GE
1982 -34.3% -33.1% 2.8% -11.4% -18.3% -12.3% -4.7% 15.0%
1986 -25.7% -26.8% 1.6% 23.4% 28.6% 32.8% 71.5% 114.1%
1990 2.0% -17.0% -13.4% -24.4% 2.2% 24.9% 23.6% 8.3%
1995 -5.9% -3.2% -13.0% 10.5% 8.6% -1.9% 8.1% 19.9%
1999 48.5% 35.8% -1.6% -2.9% 34.4% 20.5% 7.2% -4.3%
2004 44.0% 32.7% 21.5% 17.5% -8.7% -4.3% 0.2% -2.1%
2008 9.2% -4.1% -0.7% -9.6% -3.7% -17.0% -35.3% -33.8%
Average 5.4% -2.3% -0.4% 0.4% 6.2% 6.1% 10.1% 16.7%
Avg excluding 2008 4.8% -1.9% -0.3% 2.1% 7.8% 10.0% 17.7% 25.2%
Source: Bloomberg and CIMB estimates
Figure 16: KLCI performance before and after Umno party elections
12 m ths 9 m ths 6 m ths 3 m ths 3 m ths 6 m ths 9 m ths 12 m ths
before UE before UE before UE before UE after UE after UE after UE after UE
1981 90.9% 61.1% 46.7% 20.0% -37.7% -29.7% -42.8% -46.4%
1984 1.1% -8.0% 2.1% -6.7% -8.5% -20.7% -21.1% -21.0%
1987 105.4% 77.0% 43.0% 32.7% 22.7% -15.9% -21.7% -14.7%
1990 -8.6% -23.0% -20.1% -12.4% 21.0% 36.6% 17.4% 14.5%
1993 49.6% 52.8% 36.2% 26.6% 17.7% 6.6% 10.4% 9.1%
1996 16.0% 8.2% 0.6% 1.0% 8.6% 1.9% -7.3% -26.7%
2000 30.4% 34.7% 26.3% -7.7% -12.2% -18.3% -21.3% -37.7%
2004 15.5% 10.0% -6.2% 4.2% 5.9% 3.0% 5.9% 8.2%
2009 -28.0% -26.8% -13.6% 1.8% 21.3% 37.5% 42.7% 48.2%
Average 30.3% 20.7% 12.8% 6.6% 4.3% 0.1% -4.2% -7.4%
Avg excluding 2009 37.5% 26.6% 16.1% 7.2% 2.2% -4.5% -10.0% -14.3%
Source: www.UMNO-online.com, www.spr.gov.my, CIMB Research
Figure 17: Companies perceived to have strong political ties

Bloomberg Business Price Market cap Hist. P/E Hist. P/B Hist. div yld
code activity (RM) (RM m) (x) (x) (%)
AFFIN HOLDINGS BERHAD AHB Banks 3.20 4,783 10.7 0.9 2.7
BERNAS PNL Food Producers 2.14 1,007 5.7 1.0 16.8
BOUSTEAD BOUS Support Services 5.63 5,293 11.0 1.3 5.8
DRB-HICOM BHD DRB Industrial Engineering 1.53 2,958 4.5 0.6 2.6
CMS CMS Construction & Materials 2.60 857 9.9 0.7 1.9
EQUINE CAPITAL BHD EQC Real Estate 0.45 102 N/A 0.5 N/A
JAKS RESOURCES BHD JAK Industrial Metals & Mining 0.72 313 N/A 0.7 N/A
KENCANA KEPB Oil Equipment, Services & Dist 2.01 3,335 21.6 4.4 0.1
KUB MALAYSIA BHD KUBM General Industrials 0.50 278 8.3 0.8 4.8
KULIM KUL Food Producers 12.36 3,939 15.6 1.1 1.4
LEBAR DAUN BHD LDB Construction & Materials 0.83 113 58.5 1.1 N/A
MMC CORP BHD MMC Gas, Water & Multiutilities 2.75 8,374 24.1 1.3 1.1
MEDIA PRIMA BHD MPR Media 2.34 2,345 6.1 2.0 6.0
MALAYSIAN RESOURCES CORP BHD MRC Construction & Materials 2.01 2,776 59.8 2.3 0.5
MALTON MALT Construction & Materials 0.73 253 12.0 0.6 N/A
MASTERSKILL MASEG Support Services 2.14 877 9.0 3.0 3.3
NAIM CORPORATION NHB Construction & Materials 3.49 873 8.8 1.2 2.9
OPCOM HOLDINGS BHD OHB Technology Hardware & Equipment 0.74 95 9.9 1.3 6.1
RHB CAPITAL BHD RHBC Banks 8.59 18,498 13.5 1.9 2.6
SAPURACREST PETROLEUM BHD SCRES Oil Equipment, Services & Dist 2.82 3,600 18.3 3.4 2.5
SARAWAK PLANTATIONS SPLB Food Producers 2.47 692 13.0 1.4 3.8
STAR PUBLICATIONS STAR Media 3.39 2,504 13.1 2.0 21.7
TIME ENGINEERING BHD TIM Software & Computer Services 0.39 302 35.8 1.4 3.4
TIME DOTCOM BHD TDC Fixed Line Telecommunications 0.66 1,658 17.6 1.4 N/A
TRADEWINDS CORP TWC Travel & Leisure 0.92 1,012 174.8 0.5 N/A
UEM LAND ULHB Real Estate 2.29 8,341 44.8 3.3 N/A
UTUSAN MELAYU (MALAYSIA) BHD UTUS Media 0.79 87 N/A 0.3 N/A
Source: Bloomberg, CIMB estimates

The market has historically While the outcome of the next general elections is important in determining the
viewed continuity positively direction of the market after elections, it is extremely difficult to predict given the
shocking results of the last elections in Mar 2008. Recall that the 2008 elections were
unprecedented in that the National Front lost its two-thirds majority in parliament for
the first time since the 1969 elections. Its share of the popular vote also fell to its
lowest in nearly 40 years. Unlike the situation in 1969, however, the National Front did
not regain its majority in parliament by including new parties into the coalition and the
opposition parties grouped together to form Pakatan Rakyat. A convincing win for the
incumbent has historically been positive for the market.
Figure 18: Parliamentary elections

Year 59 64 69 74 78 82 86 90 95 99 04 08
Alliance/BN 74 89 74 135 130 132 148 127 162 148 199 140
PAS* 13 9 12 - 5 5 1 7 7 27 6 23
Keadilan - - - - - - - - - 5 1 31
DAP - - 13 9 16 9 24 20 9 10 12 28
Others 14 6 44 10 1 - - 22 14 3 - -
Independent 3 - 1 - 2 8 4 4 - - 1 -
Total 104 104 144 154 154 154 177 180 192 193 219 222
Alliance/BN 71.2% 85.6% 51.4% 87.7% 84.4% 85.7% 83.6% 70.6% 84.4% 76.7% 90.9% 63.1%
PAS 12.5% 8.7% 8.3% 0.0% 3.2% 3.2% 0.6% 3.9% 3.6% 14.0% 2.7% 10.4%
Keadilan 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 2.6% 0.5% 14.0%
DAP 0.0% 0.0% 9.0% 5.8% 10.4% 5.8% 13.6% 11.1% 4.7% 5.2% 5.5% 12.6%
Others 13.5% 5.8% 30.6% 6.5% 0.6% 0.0% 0.0% 12.2% 7.3% 1.6% 0.0% 0.0%
Independent 2.9% 0.0% 0.7% 0.0% 1.3% 5.2% 2.3% 2.2% 0.0% 0.0% 0.5% 0.0%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
* Was part of BN in 1974
Source: Press reports, CIMB estimates
Figure 19: Votes for ruling coalition in parliamentary elections

Year
59 52
71
64 59
86
69 45
51
74 61
88
78 57
84
82 61
86
86 57
84
90 53
71
95 65
84
99 % popular v otes w on 57
% seats w on 77
04 64
91
08 50.4
63
0 10 20 30 40 50 60 70 80 90 100
Source: Press reports, Election Commission, CIMB Research
Figure 20: Voter turnout in parliamentary elections
Year (%)
12 Total v otes polled (m) Eligible v oters (m) 80.0
Voter turnout (%) (RHS)
10 78.0
8 76.0
6 74.0
4 72.0
2 70.0
0 68.0
59 64 69 74 78 82 86 90 95 99 04 08
Source: Press reports, Election Commission, CIMB Research

Economic outlook
Back on growth track After being mired in a recession in 2009 for the first time since 1998, the Malaysian
economy rebounded 9.4% yoy in 1H10 with the help of stronger-than-expected
exports and domestic demand resurgence. However, GDP growth slowed to a more
sustainable pace of 5.3% in 3Q10 as export growth cooled down from 21.7% in 2Q10
to 10.4% in 3Q10. Households contributed strongly to the recovery, with consumer
spending picking up in 2Q09 and sustaining the pace in 2010. Indications are that
private consumption will remain a key growth driver. Private investment also made a
comeback as business confidence returned, underpinned by higher corporate
earnings.
The Malaysian economy is firmly on the recovery path. After a spectacular rebound in
2010, the economy will move a notch down to a more sustainable growth pace. We
are looking at GDP growth of 5.5% for 2011 and 6.5% for 2012 compared to an
estimated 7.0% for 2010. Growth in 2011 will come from the continued expansion of
domestic demand amid export headwinds. Private investment, which staged a
meaningful recovery in 2010, remains a wild card.
Figure 21: The economy is back on the growth track
% pt contribution Domestic demand Net exports % yoy

Change in stock Real GDP growth (RHS)
12 8
9 6
6 4
3 2
0 0
-3 -2
-6 -4
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011F 2012F
Source: BNM, CIMB Research
Figure 22: Malaysia’s leading index points to growth, albeit at a more moderate pace
% Annualised real GDP growth Leading index - 6-mth smoothed growth rate
25
20
15
10
5
0
-5
-10
Jan-01 Nov-01 Sep-02 Jul-03 May-04 Mar-05 Jan-06 Nov-06 Sep-07 Jul-08 May-09 Mar-10
Source: BNM, Department of Statistics (DOS)
No double dip for global We continue to expect a two-tiered global recovery and do not believe that the world
economy economy is heading for a double-dip recession. Major advanced economies continue
to face headwinds given the multi-year deleveraging process. Although growth of
developing Asia is moderating, the growth prospects are still good. Global lead
indicators continue to head south, adding to the evidence that global growth has lost
momentum though the pace of deceleration differs between mature economies and
developing ones. Taking no chances on the risk of a faltering recovery, the Fed and
Bank of Japan have activated asset purchases or quantitative easing programmes to
bolster their anaemic economic recovery.

Domestic demand will There is much to suggest that domestic demand will remain a key growth driver as
drive growth exports take a backseat. Domestic conditions remain supportive of domestic demand,
which is projected to rise 5.4% in 2011 (estimated 6.5% in 2010). Consumer spending
has already gained traction in 2010, thanks to improved labour market conditions and
sustained income growth. Firm commodity prices, especially for crude palm oil (our in-
house CPO price estimate is RM2,800/tonne for 2011-12) and rubber also bode well
for rural household spending. As such, we estimate private consumption to grow 6.0%
in 2011 compared to an estimated 6.7% in 2010.
Figure 23: Private sector spending to underpin growth

% yoy % pt contribution % share
2009 2010E 2011F 2012F 2009 2010E 2011F 2012F 2009 2010E 2011F 2012F
Real GDP -1.7 7.0 5.5 6.5 -1.7 7.0 5.5 6.5 100.0 100.0 100.0 100.0
Private consumption 0.7 6.7 6.0 6.8 0.4 3.6 3.2 3.6 53.5 53.3 53.6 53.7
Public consumption 3.1 0.5 4.6 2.3 0.4 0.1 0.6 0.3 14.3 13.5 13.3 12.8
Private investment -17.2 11.6 9.0 10.5 -2.1 1.2 0.9 1.1 10.1 10.5 10.8 11.3
Public investment 8.0 8.7 0.6 3.3 0.8 1.0 0.1 0.4 11.2 11.4 10.9 10.5
Exports -10.4 11.3 6.9 8.5 -12.3 12.2 7.8 9.6 107.4 111.7 113.2 115.4
Imports -12.3 17.0 7.2 7.6 -12.9 15.9 7.4 8.0 93.8 102.5 104.1 105.2
Note: The sum of percentage point contribution and percent share may not equal to the overall number due to the change in stock.
Gradual fiscal rollback to As external risks persist, fiscal rollback will be gradual to avoid choking off the
avoid choking off the recovery. As such, total expenditure is budgeted to rise 2.8% to RM212.0bn in 2011
recovery (RM206.2bn in 2010), with the increase coming entirely from operating expenditure
(+7.0% to RM162.8bn). Development expenditure is set to decline 9.0% to RM49.2bn
in 2011 (RM54.0bn in 2010), reflecting the lapsing of the fiscal stimulus package. This
will translate into a marginal rise of 0.6% in public investment compared with an
estimated 8.7% in 2010. The federal government’s budget deficit is expected to be
reduced marginally to 5.4% of GDP for 2011 from 5.6% of GDP in 2010.
To realise government initiatives, substantial amounts of money will be provided,
namely RM9.5bn under the National Key Result Areas (NKRA), RM6.0bn for the 12
National Key Economic Areas (NKEA), RM22.0bn for the completion of 9MP projects
and RM12.4bn for new projects under the Tenth Malaysia Plan (10MP).
After a sharp contraction of 17.2% in 2009, private investment rebounded by an

estimated 11.6% in 2010 and is projected to rise 9.0% in 2011 as business sentiment
turns positive on the back of improved prospects for global and domestic economies.
Recent data points and leading indicators also hint at this recovery trend. Imports of
capital goods climbed 18.4% higher in Jan-Oct 2010 and approved manufacturing
investments were higher at RM21.1bn in Jan-Sep 2010.
Figure 24: Private investment to drive growth
% yoy Private investment Public investment

60
45
30
15
-15
-30
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011F 2012F

Shifting growth engine to The government aims to change the country’s growth model to one that is more driven
private sector by private investment and less by public investment. The Economic Transformation
Programme (ETP) has identified 131 entry point projects (EPP) and 60 business
opportunities (BO) to draw in both domestic and foreign investments. The
implementation of ETP projects requires total funding of US$444bn in 2011-2020, of
which 92% or US$410bn will come from the private sector and 8% or US$34bn from
the public sector.
A total of 53 EPPs with a total investment value of US$97bn (RM300bn) or nearly 45%
of the total targeted amount are now at various stages of discussion. As at Nov 2010,
18 EPPs worth more than RM50bn mark the initial results of the ETP. The 18 EPPs
cover electronics and electrical services, retail and hotels, airport, oil & gas and
energy, commercial property development, tourism and education sectors. The
government indicated that it will announce more investments from time to time.
We see enormous social-economic impact as well as positive economic spillover if the
proposed EPPs are comprehensively and expeditiously implemented. That said,
promising reforms and initiatives in the GTP and ETP must be executed to unleash
Malaysia’s growth potential. The stalling of reform momentum could drive down growth
and investment prospects. In order for the private sector to have the confidence
needed to pour funds into the economy, certainty and clarity in policy actions are
imperative.
All economic sectors are projected to register positive growth rates. The challenge is
to sustain private sector demand as the export engine may stall given the ongoing
headwinds in the major economies. The services sector is envisaged to grow 6.0% in
2011 (6.5% in 2010), supported by the continuing expansion of domestic consumption
and trade-related activities. The manufacturing sector is projected to expand 6.0%
(11.4% in 2010), in line with the moderating pace of export growth. Growth of the
construction sector is estimated to kick up a notch to 5.6% in 2011 (4.6% in 2010),
supported by the acceleration of ongoing projects such as KLIA 2, the second Penang
Bridge, SKVE (Package 3), highways, power plant, and the LRT extensions.
Figure 25: Private investment to drive growth

% yoy % pt contribution % share
2009 2010E 2011F 2012F 2009 2010E 2011F 2012F 2009 2010E 2011F 2012F
Real GDP -1.7 7.0 5.5 6.5 -1.7 7.0 5.5 6.5 100.0 100.0 100.0 100.0
Agriculture 0.4 3.7 4.0 4.0 0.0 0.3 0.3 0.3 7.7 7.4 7.3 7.2
Mining -3.8 0.5 2.5 2.5 -0.3 0.0 0.2 0.2 7.7 7.3 7.0 6.8
Construction 5.8 4.6 5.6 7.0 0.2 0.2 0.2 0.2 3.3 3.2 3.3 3.3
Manufacturing -9.4 11.4 6.0 7.0 -2.7 3.0 1.7 1.9 26.6 27.7 27.8 28.0
Services 2.6 6.5 6.0 7.2 1.4 3.8 3.4 4.1 57.6 57.3 57.6 58.0
Note: The sum of percentage point contribution and percent share may not equal to the overall number due to the FISIM and import duties.
No interest rate hike After three interest rate increases since Mar 2010, Bank Negara Malaysia (BNM) kept
until 2H11 its overnight policy rate (OPR) at 2.75% during two consecutive policy meetings as it
considers the current monetary policy stance to be appropriate in ensuring sustained
economic recovery. We think BNM is choosing to err on the side of boosting growth
rather than aggressively managing inflation expectations given the increasing
downside risks to growth. External headwinds have already caused a pullback in
exports and industrial output in recent months. Inflationary pressures are likely to
persist but are not a threat due to sustained domestic demand, firm commodity prices
and high food prices. Continued rationalisation of subsidies could add to the inflation
upside. We estimate inflation to rise modestly to 3.0% in 2011 from an estimated 1.7%
in 2010. As such, we expect the central bank to start normalising interest rates in
2H11 and we project a policy rate of 3.25% by end-2011 (2.75% in 2010).
We concur with BNM’s view that hefty capital inflows into emerging markets are the
key challenge. We expect the central bank to stay on guard against volatile short-term
capital flows to ensure that the flows do not pose a systemic risk to macroeconomic
and financial stability. On this note, we think BNM will be ready to act if volatile capital
flows threaten to destabilise the financial system. If the liquidity build-up leads to the
risk of fuelling excessive credit growth, BNM may raise the statutory reserve
requirement (SRR) ratio of 1% currently to curtail credit creation.

The risks to our forecasts come mostly from external sources including (1) slow and
uneven growth in G-3 economies, which would lead to an anaemic recovery for
exports, (2) growing asset bubbles in Asia, and (3) destabilising speculative capital
flows. The main domestic risks are (1) failure of private sector demand to pick up
strongly and assume the mantle of the engine of growth as the government gradually
withdraws its fiscal support, and (2) the delay in the implementation of the ETP.
Figure 26: No change in interest rates in 1H11
% yoy Inflation OPR (RHS) % p.a.

12 4.0
9 3.5
6 3.0
3 2.5
0 2.0
-3 1.5
-6 1.0
Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
Source: Source: BNM, DOS, CIMB Research
LEE Heng Guie +60 (3) 2084-9667 – hengguie.lee@cimb.com

Key risks for 2011
Risk of a double dip

30% risk of a double dip Although our economics team believes that the risk of a double dip of the Malaysian
in Europe and US economy is extremely low, double-dip risks are still high for the western developed
economies. Double-dip risk appears highest in Europe and the US at 30%. Although
equity markets appear to be decoupling, this could unravel if Wall Street fall into a
tailspin, as it did in 2008.
Political risks
2008 general election Political noise may have subsided this year but could easily rachet up should snap
has changed the political general elections be called. Elections in Malaysia are typically hotly contested and the
landscape stakes have never been higher. Sarawak state elections have to be called by Jul 2011
while general elections are not due till 2Q13. We note that the Opposition won eight
out of the last 13 by-elections.
Policy risks
Policy flip-flops Although the Najib administration has promised to avoid the policy flip-flops that
marred the Abdullah Badawi administration, imposition of unpopular policies would
draw similar reactions. The 2010 Budget re-imposition of the real property gains tax of
just 5% met with hue and cry. Likewise, the award of the sports betting licence in 2010
and its subsequent cancellation caused confusion and reinforced the perception that
there is still a tendency for policy flip-flops.
Execution risks
Execution in Malaysia Malaysia is well known for coming out with strong proposals and positive policy
has been wanting measures. However, it is also well known for its poor execution and implementation
skills. The question repeatedly asked in relation to the ETP is the authorities’ ability to
deliver what they promise. We are comforted that the various transformation proposals
have step-by-step procedures that will greatly assist in implementation. KPI targets are
also being tracked closely.
Corporate earnings risks

Have expectations run Corporate earnings expectations and actual results are very important in determining
too far ahead? the direction of the stockmarket. But analysts’ expectations may have run ahead of
fundamentals. In the last four quarters, the number of companies that beat
expectations was nearly the same as those that disappointed, which contrasts with the
massive positive surprises in 2009. That said, market EPS is still on the uptrend as
big-cap stocks from the banking and gaming sectors outperformed significantly and
lifted market earnings higher.
Foreign funds flow

How long will foreign Foreign funds were net sellers of Malaysia for a long time after the Mar 2008 general
funds remain net buyers? elections. They only turned net buyers in 2009 when global markets rebounded and
again in 2H10 on renewed interest in emerging markets. A reversal of that trend would
be negative though the risk is mitigated by Malaysia’s large pension funds which can
cushion selldowns. Also, foreign funds’ weightings in Malaysia remain at depressed
levels compared with the pre-global financial crisis levels.
Volatility here to stay?

Markets to remain volatile Volatility is likely to remain a feature of markets in 2011. Adverse news from Europe,
the US or China could send shockwaves through global markets. But as long as the
major markets do not go into a vicious downward spiral that triggers deterioration in
fundamentals, the selldowns should be viewed as buying opportunities.

Valuation and recommendation
Maintain OVERWEIGHT on Malaysia

KLCI target raised to Although we are still wary of the less favourable risk-to-reward ratio for the market
1,700 points after the V-shaped rebound, momentum seems to favour the bulls as 1) the various
transformation programmes will continue to reap low-lying fruits, 2) foreign funds
continue to view emerging markets and Malaysia favourably given their undemanding
valuations, and 3) election fever is heating up and the pre-election period is very
favourable for equities. In view of the upbeat outlook and big catalysts for the market,
we maintain our OVERWEIGHT weighting on Malaysia while raising our end-11 KLCI
target from 1,610 points to 1,700 points. Instead of a 10% discount, we now apply a
5% discount to the market’s 3-year moving average P/E, which raises our P/E target
from 13.8x to 14.5x. We note the possibility of further upside to our target if the re-
rating persists for the entire region. Should we remove the discount altogether, our
KLCI target would rise to around 1,800 points while a slight premium of 5% would
push it up to a mind-boggling 1,884 points.
Figure 27: FBM KLCI’s 12M forward core P/E (x) and standard deviation
24.0
22.0
FBMKLCI's actual PER, now at 14.4x 12M forward
20.0 +3 S.D.
18.0
+2 S.D.
P/E (x)
16.0
14.0 +1 S.D.
12.0
-1 S.D.
10.0 -2 S.D.
8.0 3-year moving avg = 15.3x -3 S.D.

6.0
Nov-03 Jul-04 Mar-05 Nov-05 Jul-06 Mar-07 Nov-07 Jul-08 Mar-09 Nov-09 Jul-10
Figure 28: KLCI targets

3 year m oving avg P/E end-2011 Target basis
KLCI target P/E (x)
20 discount 1,436 12.2
15% discount 1,525 13.0
10% discount 1,615 13.8
5% discount 1,705 14.5
Zero discount 1,795 15.3
5% premium 1,884 16.1
10% premium 1,974 16.8
15% premium 2,064 17.6
20% premium 2,154 18.4
No te: End-2011target based o n 2012 EP S integer o f 117.3 sen
Source: CIMB Research
KLCI target basis is not We could also apply the 3-year moving average P/E of 15x, which is where the mid-
aggressive cycle P/E is. This is not an aggressive target as valuations could stretch to as high as
18-19x towards the later part of the market cycle. On a P/BV basis, however,
valuations are slightly above the mid-cycle P/BV of 2.2x though still below the late-
stage peak of around 2.8x. Should EPS be revised upwards over the course of 2011
as it was throughout 2010, P/E valuations would be even more attractive, providing
further upside to the KLCI target.

Figure 29: FBM KLCI’s 12M forward core P/E (x)
19
18
17
12M forward core P/E

16 Mid-cycle
15
14
13
12
11
10
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59
Month of upcycle
Figure 30: FBM KLCI’s P/BV
2.9
2.7
2.5
Current P/BV
2.3
2.1 Mid-cycle
1.9
1.7
1.5
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59
Months of upcycle
Malaysia’s bull run still Bull markets in Malaysia lasted on average 26 months. This bull market started in
has legs earnest in Apr 09, i.e. 20 months ago. Assuming it peaks in the 26th month, that means
that 1H11 will be robust and the time to take profits will be mid-year. However, bull
markets can last much longer than 26 months. The longest was double that at 52
months. The average bull market enjoyed gains of 133%. So far, this bull market is up
less than 100% from its trough. Given that the trough was hit during unusual
circumstances, i.e. the global financial crisis, the rebound should be stronger. Recall
that during the Asian financial crisis, the KLCI surged 235% from trough to peak.
Figure 31: Bull markets in Malaysia

Bull m arkets Months Trough Peak Index chg
Feb 77 to Jun 81 52.0 90.77 225.51 148.4%
May 86 to Mar 90 27.0 169.83 606.94 257.4%
Sep 92 to Dec 93 15.0 567.66 1,275.32 124.7%
Nov 95 to Feb 97 15.0 888.91 1,270.69 42.9%
Aug 98 to Feb 00 18.0 302.91 1,013.27 234.5%
May 03 to May 06 36.0 627.26 966.05 54.0%
Jun 06 to Jan 08 19.0 913.63 1,516.22 66.0%
Average 26.0 132.6%
Malaysia’s premiums Malaysia’s valuations remain at a premium over its regional peers. But the premium
have narrowed has narrowed in view of Thailand’s and Indonesia’s massive rallies this year. The P/E
premium used to range between 15% and 20% but has narrowed to 10-12%.
Malaysia’s dividend yield is one of the most attractive in the region at around 5%. We
forecast ROEs to remain above 15% and net gearing to decline to 4% by 2012. This is
a vast improvement on 2003 when net gearing was 65%.

Figure 32: Regional comparisons
Core P/E (x) Core EPS growth
2010 2011 2012 2010 2011 2012
HK ( CIMB coverage) 12.3 10.8 9.5 27.2% 14.1% 13.4%
JCI (ID) 17.7 14.8 12.8 26.9% 20.1% 15.6%
KLCI (MY) 16.4 14.4 12.7 26.6% 13.9% 13.2%
FSSTI (SG) 15.8 14.2 12.8 22.3% 11.5% 10.9%
SET (TH) 14.0 12.0 10.3 33.8% 16.2% 16.5%
Simple Region x KL avg 15.0 13.0 11.4 27.6% 15.5% 14.1%
KLCI P/E premium vs region 9.7% 11.2% 11.9%
Source: CIMB
Figure 33: KLCI Index data

FBMKLCI Index CY2003 CY2004 CY2005 CY2006 CY2007 CY2008 CY2009 CY2010 CY2011 CY2012
P/E (x, pre-EI) 14.8 15.5 14.7 15.8 17.7 11.7 19.0 16.1 14.3 12.7
P/E (x, after EI) 14.7 14.6 14.0 15.1 16.8 13.2 18.8 16.4 14.1 12.6
P/E (x, core) 14.6 15.4 15.1 16.8 18.3 11.1 17.6 16.4 14.4 12.7
Core EPS growth (%) 16.7% 8.0% 1.5% 9.1% 21.3% 0.2% -8.6% 26.6% 13.9% 13.2%
P/BV (x) 1.9 2.1 2.0 2.3 2.9 1.7 2.1 2.4 2.2 2.0
Dividend yield (%) 4.6% 6.3% 5.9% 5.7% 4.6% 6.1% 5.4% 4.7% 4.7% 5.1%
EV/EBITDA (x) 8.6 8.4 8.2 8.6 10.2 6.5 9.1 8.8 7.8 7.0
P/FCF (x, equity) 20.8 17.0 33.9 19.5 18.4 14.7 20.7 17.5 13.8 14.8
P/FCF (x, firm) 27.0 14.6 12.8 17.3 14.8 (449.3) 31.1 16.9 12.4 11.8
Net gearing (%) 65.5% 55.0% 39.7% 40.6% 23.9% 30.5% 26.3% 19.7% 12.0% 3.5%
ROE (%, recurring) 14.2% 14.2% 13.9% 15.6% 17.4% 15.8% 12.8% 15.0% 15.8% 16.5%
FBMKLCI Index 794 907 900 1,096 1,445 877 1,273 1,502 1,502 1,502
CIMB/consensus (x) 1.14 1.02 1.02
Sectors to overweight
Buy cyclical sectors In view of the improving economic outlook, imminent call to the polls, ETP, 10MP and
and GLCs 2011 Budget, cyclical sectors are likely to benefit most from a more buoyant
environment. The potential approval of the RM36bn-40bn, RM10bn-12bn high-speed
rail, numerous new highways and transformation of Greater Kuala Lumpur/Klang
Valley into an outstanding global city will be hugely positive for contractors and
developers, particularly those in the Klang Valley. Banks will also gain from new bonds
issuance and corporate loans for these projects. Other cyclical sectors that we favour
include oil & gas service providers as steadily rising commodity prices facilitate the
development of the sector. The auto sector should register another record year in
2011 as consumer confidence feeds the propensity to spend. Last but not least, the
GLCs are an important category to invest in as they should benefit from the various
transformation programmes or at least there is the perception that they will benefit
from government largesse.
Figure 34: Private investors’ level of commitment or interest in ETP projects
Source: Pemudah

Figure 35: Sector weightings
Overweight Neutral Underweight
Airlines Brewery Food & beverage
Automotive Cement Insurance
Banking Technology Shipping
Construction Tobacco
Gaming
Media
Oil & gas
Plantations
Property
Rubber Gloves
Semiconductor
Steel
Telecommunications
Utilities
Automotive Loke Wei Wern
Strengthening consumer Propelled by new model launches, favourable credit conditions, and rising income
sentiment to boost auto levels, 2011 looks set to be another good year for the auto industry. In addition,
sales consumer sentiment, which is arguably the most important driver of big-ticket items
such as cars, is holding up well. We are projecting vehicle sales growth of 5% for
2011, pushing vehicle sales past the 600,000 mark to 619,070 units, from an
estimated 590,955 units in 2010. Our TIV growth projection implies an auto sales to
real GDP growth multiplier of only 0.9x, which is still below the historical range of 1.2-
3.0x. We remain OVERWEIGHT on the auto sector. Factors that could catalyse it
include 1) strong vehicle sales, 2) a firming ringgit, and 3) more accommodative auto
policies such as the lowering of excise duties. Tan Chong is our top pick in the sector.
Banking Winson Ng Gia Yann
Banking sector to chart 16% The banking sector remains an OVERWEIGHT, underpinned by the favourable
EPS growth in 2011 earnings outlook for 2011. We are projecting solid net earnings growth of 16.3% in
2011, driven by (1) healthy loan growth of 8-9%, (2) stable credit costs in anticipation
of stable or even improved asset quality, and (3) improved fee income from the
investment banking and SME segments. The potential re-rating catalysts for the sector
include (1) strong earnings growth, (2) sustained activities in capital markets to fuel
investment banking income, (3) better traction for overseas operations, (4) potential
GP write-backs, and (5) upside potential to dividend forecasts given the less-stringent-
than-expected Basel III capital requirements. RHB Capital is our top pick for the
sector.
Construction Sharizan Rosely
ETP pump-priming should We remain positive on the contruction sector in 2011 and are encouraged by the
start in 2011 progress of the RM36bn-40bn KL MRT, RM7bn LRT extension/upgrade and other
outstanding jobs under 10MP which are at various stages of tender/proposal
evaluations. This suggests that project awards are likely to dominate newsflow in the
next 6-9 months, backed by the deliverables of the Economic Transformation Plan.
The potential approval of the RM10bn-12bn high-speed rail project is another boon to
the sector. We remain OVERWEIGHT on the construction sector which remains
anchored by the public transportation upgrade theme. Gamuda and WCT remain our
top picks and MRCB makes a re-entry as one of our GLC/construction plays.

Oil & Gas Norziana Mohd Inon
A slew of new incentives Petronas is expected to announce more incentives for the oil & gas sector as the
from Petronas government sets the stage for Malaysia to become a regional hub for oilfield services
and attract more foreign investments. This follows the launch of Schlumberger's
financial hub in Nov, which marked the first step in the ETP's goal to draw MNCs into
setting up regional headquarters in the country. Also, the government is working
closely with Petronas to outline plans for industry players to optimise the country's oil
output, providing a boost to the sector by developing greater skills and creating
employment in value-added activities. We expect the service providers to benefit from
the incentives and the availability of more international expertise in the country.
Already the proposed development of marginal fields has generated buzz among the
service providers as Petronas is bringing the focus back on domestic fields. We
remain OVERWEIGHT on the sector and SapuraCrest stays as our top pick.
Property Terence Wong
Strong sales, M&A and With IFRIC 15 and the loan-to-value ratio cap out of the way, we do not foresee any
landbanking to re-rate more regulatory concerns for the sector until perhaps the general elections are held.
sector Many developers have chalked up record sales in 2010 and continued buoyant
demand should keep earnings growth strong over the next 2-3 years. Affordability is
close to its best-ever level and the various infrastructure projects including MRT and
high-speed rail bode well for the sector. The pick-up in M&A activity could also boost
interest in property stocks, particularly after the groundbreaking proposal to merge
UEM Land and Sunrise. Newsflow is likely to remain strong as landbanking activities
are also gaining traction. The sector remains an OVERWEIGHT, with Outperform calls
for all property developers. SP Setia remains our top pick.
GLCs Terence Wong
GLCs are mostly large and Being relatively large and liquid, most GLCs sit well with foreign investors. There are
liquid and popular with numerous GLCs spread across many sectors. In the banking sector, our GLC picks
foreign funds include RHB Cap, Maybank and Affin. In the construction and property space, MRCB
straddles both with significant exposure to infrastructure, construction and property
development. UEM Land’s (ULHB MK; Not Rated) proposed merger with Sunrise
(SUN MK; Not Rated) will enhance the group’s credibility and may make it too big to
ignore. In the auto sector, we like UMW and Proton while in the oil & gas sector, we
like Petronas Dagangan. For other cyclical sectors, our picks include Sime Darby for
plantations, MAS for airlines and Star for media. In the stable mature sectors, we like
Axiata and TM for telcos, Malaysia Airports for transport infrastructure and Tenaga for
utilities.

Figure 36: Government-linked companies
Affin AHB MK O 3.20 4.04 1,520 8.8 8.0 17.1 0.9 10.2 3.8
Bursa Malaysia BURSA MK N 7.96 8.64 1,344 27.4 24.9 13.0 4.8 17.6 4.4
KLCC Property KLCC MK U 3.53 3.03 1,048 11.9 10.5 10.1 0.6 5.0 4.2
Malayan Banking MAY MK O 8.41 9.50 18,916 12.4 11.0 14.5 2.0 16.4 7.5
MAS MAS MK O 2.07 3.00 2,199 11.9 4.0 178.5 1.6 18.4 0.0
MRCB MRC MK TB 2.01 2.53 882 41.3 34.1 15.6 3.3 8.3 0.5
Media Prima MPR MK N 2.34 2.78 745 12.6 11.0 (7.5) 4.6 41.7 4.0
MISC MISC MK U 8.75 7.00 12,412 25.4 22.6 19.4 1.7 6.5 5.3
Petronas Dagangan PETD MK O 11.70 15.40 3,694 12.2 11.1 12.8 1.7 14.3 7.3
Proton PROH MK TB 4.84 5.95 845 6.8 6.4 23.4 0.4 6.8 2.1
QSR QSR MK N 5.63 6.50 520 12.9 12.1 13.6 3.5 27.2 2.7
RHB Cap RHBC MK O 8.59 10.50 5,878 10.9 9.5 17.6 1.7 16.6 3.7
Star Publications STAR MK O 3.39 4.31 796 12.9 10.9 16.8 2.2 17.6 6.2
Telekom Malaysia T MK TB 3.41 4.04 3,877 46.6 34.0 (16.1) 1.9 9.2 7.6
Tenaga Nasional TNB MK TB 8.44 10.55 11,694 13.0 11.8 6.1 1.2 9.9 2.8
UMW UMWH MK O 6.91 8.85 2,530 10.5 10.0 25.8 1.7 17.2 6.4
17.0 14.4 22.5 2.1 15.1 4.2
O = Outperform, N = Neutral, U = Underperform, TB = Trading Buy and TS = Trading Sell

CIMB picks in 2011
Cheapest Malaysian Affin Holdings is an Outperform as we have witnessed strong traction in its earnings
bank growth in the past seven quarters and the trend is expected to continue. We are
particularly positive on its robust loan growth of 11-17% since Jun 09 compared with
low-to mid-single digits previously. Affin's loan growth has been consistently above the
industry's pace since Jun 09, reflecting the group's ability to gain market share despite
being one of the smallest banks in Malaysia. The potential share price triggers in the
near term are (1) above-industry loan growth, (2) better-than-expected net interest
margin, and (3) undemanding valuations. The acquisition of Bank Ina Perdana will
provide Affin a foothold in the underpenetrated and fast-growing Indonesian market
and this will help to support the group's longer-term earnings growth.
Axiata is our top Axiata is an Outperform on the back of its modest EPS growth, rising FCFE yield and
regional telco pick strengthening balance sheet. We expect its units in the Indian subcontinent to take
over the reins of growth as its assets in Malaysia and Indonesia mature. There is room
for dividends to surprise given its strong FCFE and rapidly falling gearing. We maintain
our SOP-based target price of RM5.90 and continue to rate Axiata as our top pick for
exposure to the regional telcos. Likely re-rating catalysts are positive earnings and
dividend surprises.
Gamuda is a direct Gamuda – We are encouraged by the progress of the proposed KL MRT, which is
beneficiary of the MRT now slated to start work in Jul 2011. This suggests that project approval, tender
project process and project awards are likely to come through within the next 2-6 months. A
major milestone would be Cabinet approval which should occur by end-2010. This is
positive for Gamuda as it has a good chance of bagging the RM12bn-14bn tunnelling
works. We estimate a 6-10% enhancement to FY11-12 earnings and 3-9% boost to
our target price if the group succeeds in clinching the job. We maintain our Outperform
call and RNAV-based target price of RM4.96. The main re-rating catalyst is progress
and award of the MRT project. Gamuda is one of our top construction picks.
Kencana is an O&G stock Kencana benefited from a steady flow of projects in Malaysia, Vietnam, India and
with strong newsflow Australia in 2010, landing 13 jobs worth RM1bn which took its order book to RM2.1bn.
Being one of the bigger, most efficient fabricators, Kencana is poised to secure more
contracts. We expect the company to continue to clinch new projects over the next few
months and stay a contract headliner as it is vying for works worth RM5.2bn in
Malaysia and at least US$300m in India. It is also gunning for contracts to develop the
Sepat and Berantai marginal fields, which could transform the company into an oilfield
developer and producer.
MAS is top airline pick in MAS – We continue to rate MAS an Outperform as it is turning into a more aggressive
Malaysia growth-oriented company. Over the next three years, the airline will be taking delivery
of the majority of the 56 aircraft it has ordered. They include new-generation narrow-
and wide-body planes like the B737-800, A330 and A380 that will fundamentally lower
its structural costs and increase the attractiveness of its cabin offerings to passengers.
After years of an incoherent response to the low-cost threat, MAS recently started a
separately managed low-cost business under Firefly with the intention of regaining
some of the 50%+ market share lost to its low-cost rival over the past seven years.
Also, MAS’s extremely expensive fuel hedges carried over from pre-crisis days will
finally expire at the end of 2011, potentially leading to a substantial earnings uplift in
2012.
MRCB is a dual MRCB makes an entry as one of our top picks for 2011 for a construction, property
construction and property and GLC play. We think that newsflow is likely to pick in 2011 on the much talked-
GLC play about 3,300-acre Sg Buloh Land as the government rolls out the ETP. MRCB is likely
to emerge as one of the key beneficiaries and participate both as a turnkey contractor
and a developer. Newsflow on details of the merger with IJM Land is another re-rating
catalyst for the stock. We reiterate our TRADING BUY recommendation and target
price of RM2.76, which is based on an unchanged 10% RNAV discount.
RHB is top banking RHB Capital is an Outperform and our top pick for the banking sector with a target
sector pick price of RM10.50. We see numerous catalysts for the group including (1) robust
investment banking income supported by robust deal flow, (2) brisk loan growth in the
mid-teens, driven primarily by consumer loans and lending to public sector, and (3)
network expansion via its innovative EASY outlets and tie-ups with big corporates for
faster new customer acquisition. We project net earnings growth of 15-17% for FY11-
12. The acquisition of Bank Mestika, which will be completed by 1Q11, will help the
group to establish a foothold in the underpenetrated and fast-growing market in
Indonesia.

SapCrest is top O&G SapuraCrest – Armed with a RM13bn order book which is the highest in the sector,
sector pick SapuraCrest continues to eye deals in Malaysia and overseas. The company is keen
to explore opportunities in the development of marginal fields and appears to have a
good chance of securing at least four of the remaining deepwater projects at the
Malikai, Pisangan, Ubah Crest and Kamunsu fields. Meanwhile, in the Timor Sea off
Australia, SapuraCrest is believed to be the frontrunner for a project that will require
the decommissioning of the Montara platform. Overseas revenue contribution has
risen from 18% of group revenue in FY1/07 to 30% in FY10 and is expected to hit 40-
50% in three years’ time.
Sime is Malaysia’s Sime Darby – We like Sime Darby as it is a liquid and cheap proxy for rising CPO
largest planter prices. In 2011, we expect the new CEO’s efforts to turn around the group and rising
CPO price to prevail over worries about the huge losses at its energy & utilities
division in the previous year. There is potential for recovery of some of the provisions if
the group is successful in claiming part of the cost overruns and divesting its
groundwater project. Sale of non-core assets could lead to earnings upside for Sime
from potential gains on the sale and reduced overheads though we do not expect it to
be substantial. Its foreign shareholding level has fallen close to its all-time low of 13%
from a high of 21%. Factors that could catalyse the stock include higher CPO price,
favourable newsflow on key management changes, sale of non-core assets and the
potential listing of individual business divisions.
WCT is Malaysia’s top WCT’s latest RM1.4bn project win in Qatar and the integrated complex concession at
subcontractor the new LCCT raised the group's profile as the biggest beneficiary of mega jobs in the
Middle East and open tender jobs locally. The group still has a strong chance of
bagging more projects in the next six months, with potential contract awards in 2011
matching the RM2bn secured in 2010. WCT’s share price performance has lagged
behind IJM’s and Gamuda’s, creating a buying opportunity. The stock remains an
Outperform with an unchanged target price of RM4.21, pegged to a 10% discount to
its RNAV. WCT is one of our top picks for the construction sector.

SECTOR BRIEFS…

CIMB Research Report 2011 OUTLOOK
MALAYSIA
OVERWEIGHT Maintained
Autos
A good cyclical play
Loke Wei Wern +60 (3) 2084 9946 - weiwern.loke@cimb.com
Key drivers Key risks

• Propelled by new model launches, favourable credit • The margins of carmakers are vulnerable to exchange
conditions and rising income levels, 2011 looks set to rate volatility. While we do not expect the US$ and yen
be another good year for the auto industry. In addition, exchange rate to rise above the levels seen in 2009,
consumer sentiment, which is arguably the most there is always a risk of exchange rates turning against
important driver of big-ticket items such as cars, is the carmaker’s favour, thereby putting pressure on
holding up well. We maintain our OVERWEIGHT call operating margins.
on the sector and keep Tan Chong as our top pick. • A gradual rise in fuel prices is another major dampener
• We are projecting a 4% rise in the total industry volume on vehicle demand. Apart from encouraging the usage
(TIV) from an estimated 600,500 units in 2010 to a of public transport, the rise in fuel prices could prompt a
record 626,890 units in 2011. shift from petrol guzzlers to fuel-sipping cars.
• Tan Chong is our top pick in the sector with an • There were three rounds of hire purchase (HP) rate
Outperform recommendation. Backed by its expansion hikes in 2010, all of which were induced by a rise in the
plans and stronger industry fundamentals, Tan Chong overnight policy rate (OPR). Further hikes of the OPR
boasts impressive earnings growth potential over the in 2011 could trigger a corresponding increase in HP
next three years, which should support our EPS CAGR rates. Higher borrowing costs are generally negative for
projection of 46%. car buyers as it increases the loan servicing burden for
buyers.
Figure 1: Total industry volume (units) Figure 2: Market share (Jan-Oct 2010)
units Hy undai
700,000 Others
1.6% Perodua
600,000 Nissan 12.9%
5.8% 31.1%
500,000
400,000 Honda
300,000 7.5%
200,000
100,000
0 Toy ota Proton
15.0% 26.4%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010F
2011F
Source: MAA, CIMB Research
Sector comparisons
Proton PROH MK TB 4.84 5.95 845 6.8 6.4 23.4 0.4 6.8 2.1
Tan Chong TCM MK O 5.44 9.15 1,162 10.7 7.7 45.9 1.8 18.4 2.4
UMW UMWH MK O 6.91 8.85 2,530 10.5 10.0 25.8 1.7 17.2 6.4
Simple average 9.3 8.0 31.7 1.3 14.1 3.6
O = Outperform, N = Neutral, U = Underperform, TB = Trading Buy, TS = Trading Sell and NR = Not Rated

MALAYSIA
Banks
Slower but healthy growth
Winson Ng Gia Yann, CFA +60(3) 2084 9686 - winson.ng@cimb.com

• We remain OVERWEIGHT on the banking sector • Rate competition has been reignited, especially in the
given the healthy projected net profit growth of 16.3% residential mortgage segment, putting pressure on
for 2011. RHB Capital is kept as our top pick, banks’ lending margin. We, therefore, expect banks’
underpinned by our projected net profit CAGR of net interest margin to contract 10-20bp in 2011.
17.7% for FY10-12. The sweet spots are (1) consumer • Business loan growth is set to moderate in 2011 as
loan growth supported by network expansion, and (2) corporates continue to switch to capital markets for
growth of investment banking due to active capital fundraising activities and SME loan growth eases in
markets. The acquisition of Bank Mestika will provide line with the trend in GDP growth.
the group with a foothold in the fast-growing market in • The imposition of a maximum loan-to-value ratio of
Indonesia. 70% for third and subsequent home purchases will
• For the banking sector, growth of non-interest income crimp the growth of residential mortgages. But the
should remain strong in 2011, driven by higher impact will be small as such loans make up less than
investment banking income from the sustained deal 3-5% of the loan base.
flow and business loan-related income amidst the • Competition from foreign banks will increase as Bank
favourable economic environment. Negara awarded five new banking licences to
• Robust loan approval processes and a favourable overseas banks in Jun 10. However, the impact will
operating environment will enable banks to maintain, if not be significant in the medium term as the new
not improve their asset quality in 2011. As such, we do players need time to build up their operations.
not expect any spike in credit costs. • Alliance remains an Underperform due to the lack of
• Several banks will see higher overseas contributions – catalysts. ROE and loan growth will be slower than
Maybank from BII, Public Bank from its HK/China the industry’s. Margins will be compressed as it needs
operations and RHB Capital from the completion of its to offer better deposit rates to support loan growth.
purchase of Bank Mestika in 1Q11.
Figure 1: Banking system’s loan base and yoy growth Figure 2: Banking system’s NPL ratio & loan loss coverage
Source: Bank Negara Malaysia
Sector comparisons
Affin AHB MK O 3.20 4.04 1,520 8.8 8.0 17.1 0.9 10.2 3.8
Alliance AFG MK U 3.08 3.11 1,515 10.5 9.4 20.2 1.4 13.8 4.2
AMMB Hldgs AMM MK O 6.26 8.20 5,996 11.2 9.8 24.9 1.6 15.0 4.2
Malayan Banking MAY MK O 8.41 10.50 18,916 12.4 11.0 14.5 2.0 16.4 7.5
Public Bank PBK MK O 12.80 16.10 14,367 12.8 10.9 19.3 3.0 25.1 5.7
RHB Cap RHBC MK O 8.59 10.50 5,878 10.9 9.5 17.6 1.7 16.6 3.7
Simple average 11.3 10.1 22.1 1.9 17.1 4.6

MALAYSIA
NEUTRAL Maintained
Brewers
Not the choice brew

• The excise duty hike reprieve for the brewery sector • The brewery sector was spared an excise duty hike in
under Budget 2011 is good news for industry volumes. the recent Budget 2011. But there is no guarantee that
As it is, sales volume is already on a recovery path, the industry will be let off indefinitely. We remain wary
thanks to the absence of duty hikes for the past four of the possibility of increases in duties given the
consecutive years. We maintain our NEUTRAL call on negative repercussions that they have for legal sales
the sector. volume.
• The firming of the ringgit against the US$ bodes well • Guinness Anchor and Carlsberg Brewery continue to
for brewery companies as the import of raw materials dominate the local malt liquor industry. A third brewer,
such as malt and hops is largely denominated in the Napex Corp, which produces lower-priced beer has a
US currency. negligible share of the local malt liquor market.
• On a more macro level, the improving economy should However, it could prove to be a bigger threat than
help support consumer confidence. Our economics expected if the authorities allow its production capacity
team is projecting GDP growth of 5.5% for 2011. and distribution network to extend beyond the current
Consumer companies such as the brewers stand to limits.
benefit from higher consumer spending. • The domestic malt liquor market is arguably saturated.
• We have a Neutral recommendation on both Carlsberg With only two major brewers, competition is intense as
Brewery (CAB MK; Neutral) and Guinness Anchor the growth of one company will most likely come at the
(GUIN MK; Neutral). Carlsberg Brewery’s acquisition of expense of another. Margins could be weighed down
Carlsberg Singapore has opened up a whole new by stiff competition and potential price war as brewers
market for it to tap into. As for Guinness Anchor which try to undercut each other in order to gain a larger slice
is exposed largely to the Malaysian market, we think of the market.
that it should have little difficulty retaining its pole
position in Malaysia due to its extensive product
portfolio and marketing prowess.
Figure 1: Total industry volume (‘000 hectolitre) Figure 2: Duty structure and trend
RM/HL
1500 1000
1250
800
1000
600
750
400
500
200
250
0 0
Australia
Hong
Indonesia
Vietnam
Japan
Singapore
Korea
Thailand
China
Philippines
Malaysia
New
Norway
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010F
2011F
Sector comparisons
Carlsberg Brewery CAB MK N 6.05 6.70 592 13.0 12.1 25.9 3.0 23.9 6.1
Guinness Anchor GUIN MK N 9.96 10.45 956 17.3 16.7 6.2 5.9 35.1 6.6
Simple average 15.2 14.4 16.1 4.5 29.5 6.4

MALAYSIA
NEUTRAL Maintained
Building Materials
If you build it, they will come
Terence Wong CFA +60(3) 20849689 - terence.wong@cimb.com

• The sector is a NEUTRAL as we believe that the • While progress on mega infrastructure projects is
earlier positive newsflow on mega projects and currently on track, successful execution of these
potential pickup in construction activities have already projects is subject to a variety of factors such as
largely been priced in for Malaysia’s largest cement economic activity. However, our economics team is
player, Lafarge Malayan Cement. However, we believe positive on the growth outlook for the Malaysian
prospects for the sector are bright as we expect economy and forecast GDP growth of 5.5% for 2011.
announcements on mega projects under the 10th MP • Policies implemented by China will also have an impact
and Budget 2011 such as the KL MRT, LRT, new on global steel prices. On a positive note, steel supply
LCCT and high-speed rail project to boost construction is expected to tighten on the back of lower steel
activities and reinvigorate demand for building production in China as the country decommissions
materials. We note that awards for RM1.6bn out of the obsolete plants and restricts power supply to meet its
RM7bn LRT extension have already been announced. energy consumption targets.
We expect more announcements in the year ahead. • The Malaysia Steel Association (MSA) has proposed
Our top pick is Ann Joo. several initiatives that are positive for upstream steel
• International steel prices should recover in 2011 given players such as Ann Joo. These include favourable
the ongoing urbanisation in China and lower steel electricity tariffs, import duties on finished goods as well
supply as China races to meet energy consumption as export duties on raw materials. Failure to legislate
targets by decommissioning obsolete plants. these proposals would be negative for the steel sector.
• In May 2010, a RM25/mt cement price hike to
RM300/mt was implemented. Further price hikes would
be positive for the sector.
Figure 1: Malaysia cement production (‘000 mt) Figure 2: East Asia import steel prices, CFR (US$ / mt)
2,000
Semi / billets Long / rebar
1000 Flat HRC Flat CRC
1,500 900
800
1,000
700
600
500
500
0 400
Jan
Sep
Jul
Mar
Jan-08
Sep-08
Jan-09
Sep-09
Jan-10
Sep-10
May
Nov
May-08
May-09
May-10
Source: Company, CIMB Research, CEIC, Malaysian Department of Statistics, Companies
Sector comparisons
Ann Joo AJR MK TB 2.94 3.74 490 9.7 6.8 92.2 1.4 15.3 5.8
Lafarge M Cement LMC MK U 7.40 6.37 2,004 14.4 13.7 3.5 1.9 13.3 5.7
Tasek TC MK O 7.59 9.00 299 9.6 9.2 31.4 1.0 14.3 1.6
Simple average 11.2 9.9 42.4 1.4 14.3 4.4

MALAYSIA
Construction
Mega jobs make tracks
Sharizan Rosely +60 (3) 2084 9864 - sharizan.rosely@cimb.com

• We maintain an OVERWEIGHT on the construction • Potential challenges from opposition parties due to the
sector as 2011 is likely to be a stronger year for high absolute cost of the MRT could delay the project.
execution, backed by the government’s Economic The RM36bn cost for the construction of the MRT alone
Transformation Programme (ETP). The RM36b-40bn makes it the most expensive mega project in the
KL MRT, RM7bn LRT extension/upgrade and other key nation’s history, surpassing the RM20bn development
jobs under the 10th Malaysia Plan (10MP) are making cost for Putrajaya, RM10bn for KLIA and Gamuda-
good progress towards tenders and awards. Positive MMC’s RM12.5bn northern double tracking project.
newsflow is likely to pick up in the next 6-9 months, • Implementation of a large public sector funded project
leading to further re-rating of the sector. Gamuda and amidst sustained budget deficits could raise funding
WCT remain our top picks. concerns too. But relief will come from an expected
• Recent developments for the KL MRT and LRT decline of the budget deficit. One option is the gradual
projects are positive. For the KL MRT, the RM13bn- phasing out of subsidies on petrol, food items and
14bn tunnelling works will be the first package to be services, which has already started with the recent
dished out. Going by the Jul 2011 timeline for the subsidy cuts for petrol, diesel, LNG and sugar.
groundbreaking, we expect the award of the first MRT • The land acquisition process for the KL MRT could take
package to be in 1H2011, along with the rollout of the longer than expected. The proposal calls for the
LRT Package B worth at least RM1.5bn-2bn. building of 90+ stations along 156km of tracks. 22
• We maintain our Outperforms on Gamuda for its MRT stations will be along 50km underground with an
exposure and WCT for its strength in open tenders and average depth of 30m. This may require an
in the Middle East. IJM Corp is also an Outperform amendment to the Land Act.
with an added merger angle while MRCB is a Trading • Our only Underperform call is the loss-making MTD-
Buy for its GLC advantage. Muhibbah is an attractive ACPI, which is facing a depleting order book.
recovery story. We also like Mudajaya.
Figure 1: Construction sector’s real GDP growth (%) Figure 2: Major 10MP projects
12.0 Key projects Value Status
(RM bn)
10.0
KL MRT 36-40 Appointed project manager
8.0
LRT Ex tension/upgrade Klang Valle 7 Aw arded Phase 1
6.0
Sev en new highw ay s 19 Approv ed in 10MP
4.0 High Speed Rail (HSR) 10-12 Feasibility study
2.0 Total 74.0
0.0
1Q01
4Q01
3Q02
2Q03
1Q04
4Q04
3Q05
2Q06
1Q07
4Q07
3Q08
2Q09
1Q10
-2.0
-4.0
-6.0
-8.0
Construction sector growth % yoy GDP growth % yoy
Sector comparisons
IJM Corp IJM MK O 6.14 6.95 2,644 21.3 20.2 32.6 3.5 16.4 1.7
Gamuda GAM MK O 3.76 5.00 2,451 19.6 15.2 33.8 3.6 19.2 3.2
MRCB MRC MK TB 2.01 2.53 885 41.3 34.1 15.6 3.3 8.3 0.5
Muhibbah MUHI MK TB 1.36 2.06 173 10.3 9.0 59.0 0.9 8.8 2.2
MTD ACPI ACP MK U 0.51 0.32 38 30.5 11.5 181.4 0.7 2.4 1.8
WCT WCT MK O 3.00 4.34 752 13.0 12.5 10.8 1.8 15.0 3.3
Mudajaya MDJ MK O 3.94 7.94 523 5.6 5.1 67.1 1.8 36.7 1.5
Simple average 20.2 15.4 57.2 2.2 15.3 2.0

MALAYSIA
UNDERWEIGHT Maintained
Food & Beverages
Not that tantalising
Norziana Mohd Inon +60(3) 2084 9645 - norziana.inon@cimb.com

• We continue to hold the view that the F&B sector • The price volatility of raw materials, especially milk
provides a refuge with its defensive earnings and solid, wheat flour and coffee, is the main concern for
generous dividends. Having said that, stiff competition F&B producers. Adverse weather conditions have in
and heightened raw material prices (Figure 1) may the past adversely affected the crop, leading to a
dilute producers’ margins. Given this outlook, we shortage of supply. Most of the raw materials other
remain UNDERWEIGHT on the sector. CI Holdings is than palm oil and cocoa are imported. Milk solid is
our top pick. typically imported from Australia and the Netherlands.
• Our economics research team estimates a 7% GDP • While the subsidy cut for sugar is unlikely to dent
growth in 2010 before slowing down to 5.5% in 2011. beverage producers, it may spell bad news for
Consumers generally are likely to remain careful in condensed milk producers given the product’s high
their spending, giving priority to essential items rather sugar content.
than discretionary and luxury goods. • Health scares may also dampen sales, as the SARS
• In early Dec, as part of the subsidy rationalisation plan outbreak did to poultry sales in 2003. A more recent
and to promote a healthy lifestyle, the government example is the widespread melamine concern which
raised the price of sugar by 20 sen to RM2.10/kg, the spoiled milk sales in 2008.
second price increase since Jul. There have been no • The hypermarkets have been aggressive in pushing
price revisions by the beverage producers. For 2011, their house brands. Price-sensitive consumers are
there are no plans for price adjustments so far. The spoilt for choice as they are offered cheaper
producers’ main worry is supply rather than pricing. alternatives to selected products such as chocolate
• We maintain a Buy on CI Holdings, the exclusive malt beverages and carbonated drinks.
franchise holder for Pepsi in Malaysia. Tropicana • We continue to rate Nestle and F&N as Underperforms.
Twister is the bestselling chilled orange juice brand They are among Malaysia’s oldest and venerable
with 40% market share. We remain Neutral on QSR companies but their valuations are way expensive
and Cocoaland. relative to their peers.
Figure 1: Milk solid price (US$ / pound) Figure 2: CPI for food & non-alcoholic beverage (% yoy)
0.25 2.5
0.20 2.0
0.15 1.5
0.10 1.0
0.05 0.5
0.00 0.0
Jan-08 Aug-08 Mar-09 Oct-09 May -10 Dec-10 Jan-10 Apr-10 Jul-10 Oct-10
Source: Bloomberg, Department of Statistics
Sector comparisons
CI Hldgs CIH MK B 3.68 5.15 166 12.2 10.9 11.5 4.4 36.3 3.3
Cocoaland COLA MK N 2.34 3.26 128 9.7 9.1 17.2 2.1 23.2 5.1
F&N Hldgs FNH MK U 16.26 11.05 1,859 21.5 20.9 (1.1) 5.1 22.4 3.3
Nestle (M) NESZ MK U 43.50 38.85 3,252 22.3 21.3 10.8 11.8 57.3 4.7
QSR QSR MK N 5.63 6.50 521 12.9 12.1 13.6 3.5 27.2 2.7
Simple average 15.7 14.9 10.4 5.4 33.3 3.8
O = Outperform, B = Buy, N = Neutral, U = Underperform, TB = Trading Buy, TS = Trading Sell and NR = Not Rated

MALAYSIA
Gaming
Win some, lose some
Ivy Ng Lee Fang CFA +60(3) 2084 9697 – ivy.ng@cimb.com

• We remain OVERWEIGHT on the Malaysian gaming • Genting Malaysia could face a bigger-than-expected
sector, with Genting Bhd staying as our top pick given and lasting degree of cannibalisation from Singapore’s
the potential share price catalysts of i) less-than- two IRs given the close proximity.
expected cannibalisation, ii) new M&A ventures and iii) • For Genting Bhd’s Singapore unit, key risks include i)
value-unlocking efforts via disposal of non-core assets. regulatory risks which could heighten in the run-up to
• We expect domestic gaming revenue to remain flattish the general election and ii) the slower-than-expected
(+1%) in 2011 on the back of a potential loss of punters licensing of junket operators which could lead to a
to Singapore’s two IRs. But over the medium term, smaller-than-expected VIP gaming market.
Resorts World Genting (RWG) could still hold appeal • Risk management is a primary focus for all gaming
as it remains one of the region’s cheapest holiday operators given the exposure to fluctuations in luck
destinations. factors. Having said that, the net win percentage
• We expect Genting Malaysia (GM) to continue focusing usually evens out over the longer term.
on yields in 2011 as it proactively minimises the • Force majeure and disease outbreaks are potential
migration of punters to Singapore’s two new IRs. 2011 risks for any tourism related activity.
will also see GM spreading its wings to nurture its • Although GM’s casino licence is renewed quarterly and
maiden project in US while also turning around its NFO licences are renewed annually, we do not view
newly acquired UK assets. this as a major risk factor given that all gaming
• Given the increasing dominance of its gaming-related operators will adhere to the strict guidelines. Gaming
takings, we believe Genting Bhd could explore the licences are a premium in Malaysia and the licensing
disposal of its non-core assets, especially the non- will exist as long as operations are ongoing.
performing ones. • Given that GM’s casino tax is among the highest in the
• We expect the NFO segment to remain sturdy, thanks region, the likelihood of tax hikes is small. But the NFO
to the small ticket and habitual nature of NFO bets. players were recently slapped with a 2% pt hike in
Despite its mature state, we are projecting industry betting duties. Unsuccessful attempts to lobby for a
growth to come in at about 2%, driven mainly by reduction in prize monies will compress margins and
Magnum’s 4D Jackpot game. sentiment on the NFO subsector.
Figure 1: Quarterly casino revenue trend (RM m) Figure 2: Quarterly NFO revenue trend (RM m)
Casino (LHS) grow th (%)
NFO (LHS) grow th (%)
1,400 25% 2,400 15%
1,300 20% 2,300 10%
15% 2,200
1,200 10% 5%
2,100
1,100 5% 0%
2,000
1,000 0%
1,900 -5%
-5%
900 -10% 1,800 -10%
800 -15% Mar- Jun- Sep- Dec- Mar- Jun- Sep- Dec- Mar- Jun-
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
08 08 08 08 09 09 09 09 10 10
Sector comparisons
B Toto BST MK N 4.25 4.67 1,830 15.9 15.3 (0.6) 8.9 60.3 6.8
Genting GENT MK O 10.70 15.20 12,665 13.3 11.5 36.5 2.1 17.2 0.7
Genting Malaysia GENM MK N 3.34 3.90 6,298 14.1 12.9 3.4 1.6 11.9 2.4
RGB RGB MK U 0.06 0.06 22 13.5 7.9 162.1 0.7 5.5 0.0
Simple average 14.2 11.9 50.4 3.3 23.7 2.5

MALAYSIA
Media
Sticking to papers

• We maintain our OVERWEIGHT call on the media • A gradual pickup of ad volume will not necessarily have
sector in view of the sustained recovery of industry a big impact on the earnings of media companies. This
advertising volume, backed by favourable macro is mainly due to the difference in ad volume measured
factors. Adex stats for Jan-Sep 10 point to a firmer at the gross level and actual advertising revenue which
recovery for all media segments in 2011. A potential is net of discounts.
boost from election-driven adex spending is a plus, • Although gross adex growth for the FTA TV segment
especially for the print companies. Our top picks are should continue to outperform other media segments,
Star Publications and Media Chinese International. the effective discounts given to advertisers are likely to
• We continue to favour the newsprint players as they remain high compared to discounts given by
should continue to stage an earnings recovery, driven newspaper companies. For Media Prima, this means
by margin expansion and a turnaround in advertisers’ lower net earnings from the TV business which makes
sentiment that is likely to last throughout 2011. The up more than 70% of group revenue. Effective
sequentially strong margins reported in the last three discounts for the TV segment are about 65% compared
quarters of 2010 are likely to continue, underpinned by to 20-25% for the newspaper segment.
cheaper newsprint inventory cost and a firmer ringgit. • From a low of US$511/tonne in Jan-10, newsprint spot
• Despite the sustained ad volume momentum of the price has crept up 22% to around US$654/tonne
FTA TV segment, we remain Neutral on Media Prima currently. The uptrend could continue in the medium
as the share price already largely reflects the positives term given the rise in global demand. This scenario is
from the consolidation of NSTP. mitigated by newspaper players’ newsprint inventory
• We maintain our Outperform on Star Publications as which was bought for US$650-680/tonne and can last
the group is the key beneficiary of the continued another 9-12 months. Further strengthening of the
recovery of the English newspaper adex, backed by its ringgit is another plus. Newsprint makes up 30-40% of
dominant market share of 70%. Also an Outperform is newspaper publishers’ operating costs.
Media Chinese International, which continues to reap • A separate concern for pay TV operators is the rise in
merger synergies. Both companies also boast content costs which is likely to put pressure on
attractive dividend yields of 6%. margins.
Figure 1: Annual adex trends Figure 2: Newsprint spot prices (US$/tonne)
800
30%
20% 700
10%
600
0%
1997
1999
2001
2003
2005
2007
2009
500
-10%
-20% 400
Adex growth GDP growth
Jan-08 Jun-08 Nov-08 Apr-09 Sep-09 Feb-10
Source: NMR, Bloomberg
Sector comparisons
Media Prima MPR MK N 2.34 2.78 748 12.6 11.0 (7.5) 4.6 41.7 4.0
MCI MCIL MK O 0.88 1.52 472 9.1 8.5 10.7 1.1 12.2 5.7
Star Publications STAR MK O 3.39 4.52 798 12.9 10.9 16.8 2.2 17.6 6.2
Simple average 11.5 10.1 6.7 2.6 23.8 5.3

MALAYSIA
Oil and Gas
Oiling growth
Norziana Mohd Inon +60(3) 2084 9645 - norziana.inon@cimb.com

• The sector remains an OVERWEIGHT. High oil prices • Higher prices of raw materials, especially steel, are
are a boon to both the upstream and downstream putting fabricators’ margins at risk. In some cases, the
segments. The sector, however, benefits not directly additional costs cannot be passed on to consumers,
from the high oil price but from an improvement in resulting in cost overruns. Pricey raw materials also
demand and supply. SapuraCrest stays our top pick. adversely affect smallish contractors, which already
• The steady rise of the oil price has prompted producers have to put up with modest margins.
to step up production to meet increasing market • The sector has underinvested in equipment needed for
demand, thereby benefiting service providers. As at 1 new projects. The equipment includes platforms, rigs
Jan 10, Malaysia produced 657,700 barrels of oil & and vessels, which require high capital outlay.
condensates per day, up 138% since 1980 (Figure 1). However, in the era of strategic partnerships,
• Oil & gas is one of the 12 National Key Economic companies can draw comfort in the sharing of financial
Areas under the 10th Malaysia Plan. To boost the obligations and risks with partners.
country’s reserves (Figure 2), the government recently • Labour cost remains high. The quickening pace of
announced two incentives aimed at improving the industry activities has absorbed all available capacity
commercial viability of marginal field development 1) while the lack of adequate recruitment and capacity
reduction of tax rate from 38% to 25%, and 2) waiver of building has resulted in a severe shortage of
export duty on oil produced and exported from experienced manpower. The problem is compounded
marginal fields. by the approaching retirement of many of the well-
• We maintain our Outperform calls on SapuraCrest, qualified people in the industry.
Kencana and Petronas Dagangan while Petra Perdana • While we like Dialog’s defensive income from the Kertih
stays as a Trading buy. We remain Neutral on Wah facility, we retain our Underperform call on the stock
Seong. given its demanding valuations relative to its peers.
• •
Figure 1: Oil production vs. consumption (‘000 bpd) Figure 2: Oil & gas reserves (m barrels of oil equivalent)
800 25
700 Crude oil & condensate Natural gas
20
600
Net production 15
500
400 10
300 5
200
0
100
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
1980 1984 1988 1992 1996 2000 2004 2008
Source: Petronas
Sector comparisons
Dialog DLG MK U 1.60 1.15 1,014 22.6 20.1 12.4 4.2 20.0 2.5
Kencana KEPB MK O 2.01 2.40 1,063 14.1 12.2 18.6 10.2 78.6 1.5
Petra Perdana PETR MK TB 0.77 0.98 110 12.9 9.4 8.4 0.6 5.3 2.6
Petronas Dagangan PETD MK O 11.70 15.40 3,705 12.2 11.1 12.8 1.7 14.3 7.3
SapuraCrest SCRES MK O 2.82 3.30 1,148 13.4 12.4 19.5 3.8 28.9 3.2
Wah Seong WSC MK N 2.00 2.36 462 12.7 11.7 4.3 3.3 27.4 2.8
Simple average 14.7 13.0 12.7 4.0 29.1 3.3

MALAYSIA
TRADING BUY Maintained
Plantations
Another year of strong harvest
Ivy Ng Lee Fang CFA +60(3) 2084 9697 - ivy.ng@cimb.com

• We continue to rate the Malaysian plantation sector a • Should there be sharp contractions in global liquidity or
TRADING BUY due to our bullish view on CPO price. US$ strength, it may lead to a steep correction for CPO
KL Kepong, Sime Darby and Hap Seng Plants remain price. However, our economists do not expect a
our top picks given the potential share price triggers of significant tightening of monetary policy in 2011 given
higher-than-expected CPO price and M&A. the still-uneven global economic recovery.
• Oil palm players are set to post higher earnings in • Higher crude oil price and rising biodiesel mandates in
2011, helped by higher FFB output and CPO price. South America and Malaysia are expected to drive up
Operating costs are expected to be manageable. demand for biodiesel. There is concern that if mineral
• CPO prices look set to rally in 1Q11 on the back of oil prices drop sharply, it may crimp biodiesel demand.
supply worries and a pickup in demand during Chinese We believe this is unlikely given rising mandates for
New Year, strong economic growth from emerging biodiesel and the increasing efforts by governments to
markets and increased biodiesel mandates in Brazil address climate change.
and new biodiesel mandates in Malaysia. Overall, we • The market expects Malaysia to implement its B5
project CPO prices to rise 18% to average RM2,630 biodiesel mandate in stages by June 11. But there is a
per tonne in 2010. For 2011, we forecast an average risk of delay as the government has not decided on the
price of RM2,800 per tonne. subsidy scheme though this could be offset by a
• Weather experts are predicting the La Nina to be potential new replanting subsidy scheme.
around till 1Q11. This could prolong the unusually low • The threat of higher edible oil import duties by India is
rainfall in the key soybean planting regions, which will low as its government wants to contain inflation.
affect soybean harvests in 2011. • China’s price control guidelines may lead to lower
• The government’s ETP talked about accelerating the prices in the short term. But we think that the price
replanting of oil trees in Malaysia. This could result in weakness is temporary as it will only result in
slower palm oil output growth. Also, labour shortage processors delaying the import of edible oils and
remains a concern for the industry. oilseeds.
Figure 1: Historical CPO prices Figure 2: 8 Oils & fats stock/usage ratio projected to decline
RM per tonne Oct/Set 10/11F 09/10 08/09 07/08 06/07
4,000 Op stocks 16.4 16.1 15.1 14.0 14.0
Production 143.2 138.0 131.6 127.8 120.8
3,500
Imports 61.1 59.4 58.7 54.8 51.5
3,000 Ex ports 61.0 59.4 58.1 55.0 51.8
Consumption 143.9 137.7 131.3 126.5 120.5
2,500
Ending stocks 15.8 16.4 16.1 15.1 14.0
2,000 Stock/Usage ratio 11.0% 11.9% 12.2% 11.9% 11.6%
1,500
1,000
1-Jan-09 18-Jun-09 24-Nov -09 24-Mar-10 22-Jul-10 19-Nov -10
Source: Oil World, CIMB Research, Bloomberg
Sector comparisons
IOI Corp IOI MK N 5.78 6.54 12,336 17.8 15.9 15.2 2.9 18.0 3.8
KLK KLK MK TB 21.58 25.00 7,344 19.6 18.1 8.6 3.4 18.1 4.1
Genting Plantations GENP MK N 8.68 9.84 2,100 17.4 16.5 19.0 2.1 12.6 1.0
Hap Seng Plant HAPL MK TB 3.15 3.73 803 13.5 13.5 22.8 1.4 10.8 5.9
Simple average 16.9 15.7 14.9 2.4 14.7 3.8

MALAYSIA
Power
A year of reforms?
Ivy Ng Lee Fang CFA +60(3) 2084 9697 – ivy.ng@cimb.com

• We remain OVERWEIGHT on the power sector as we • Sentiment on Tenaga could suffer if the government
expect subsidies to be in the spotlight in 2011, paving decides to postpone its tariff review yet again. Tenaga’s
the way for sector reforms involving i) tariff review and tariff was last cut by 3.7% in Mar 09.
ii) PPA renegotiations. Other themes include i) • Tenaga’s bottomline remains vulnerable to fluctuations
concrete plans for the country’s supply plant-up and ii) in international coal prices. We estimate that every
more details on the country’s energy policy. US$10/MT increase in average coal prices could lead
• Over the short term, our preference lies with national to a 17-18% cut in our core net earnings estimate.
utility company, Tenaga, as we see potential re-rating • The government is expected to lead the next round of
catalysts for this heavyweight laggard in the form of i) PPA renegotiations with an intention to conclude talks
newsflow on gas subsidy rollback and a corresponding within a 6-12 months timeframe. This could hit short-
tariff hike, ii) revival of foreign interest and iii) stronger- term sentiment on first-generation IPPs, though it would
than-expected demand with the rollout of major be positive over the long run given i) lower fixed
construction projects. capacity payments for Tenaga and ii) certainty of power
• Electricity demand growth is expected to improve yoy, supply beyond 2015. YTL Power’s Paka and Pasir
albeit at a more moderate pace. But there could be Gudang plants fall into this category.
upside to our 3-5% power demand growth estimate for • YTL Power’s WiMAX venture could face challenges,
FY11-13 given the string of projects announced by the leading to larger-than-expected start-up losses. Over
government under Budget 2011 and its Economic the longer term, our telco analyst still has reservations
Transformation Programme. about the viability of WiMAX with the key shortcoming
• As M&A opportunities at home are expected to be being the lack of supporting handsets and equipment
limited, expansion activities will be largely on overseas vendors.
ground. Both Tenaga and YTL Power remain on the • Overseas expansion plans carry higher risks and may
lookout for assets to add to their portfolios. not generate returns on par with their existing projects.
• For YTL Power, potential upside could also come from
stronger-than-expected PowerSeraya earnings and a
positive response to its recently launched WiMAX
network.
Figure 1: Industry generation mix (FY8/10) Figure 2: Electricity demand by sector (Sep 08 – present) (Gwh)
Gwh Industrial Commercial Domestic
Gas -
Hy dro Oil & Distil. 4,000
Tenaga
Coal -IPP 5.1% 0.4% 3,500
22.4%
20.6% 3,000
2,500
2,000
Coal - 1,500
Gas - IPP
Tenaga 1,000
32.0%
19.6% Sep-08 Jan-09 May -09 Sep-09 Jan-10 May -10 Sep-10
Sector comparisons
Tenaga Nasional TNB MK TB 8.44 10.55 11,731 13.0 11.8 6.1 1.2 9.9 2.8
YTL Power YTLP MK O 2.44 2.97 5,652 13.8 13.1 13.1 2.3 17.1 7.2
Simple average 13.4 12.5 9.6 1.8 13.5 5.0

MALAYSIA
Property
Piling on the newsflow

• We continue to rate the sector an OVERWEIGHT as • Massive overbuilding of upscale condos in the KLCC
the key catalysts – the economic and stockmarket area led to 20-40% price drops in the past 2-3 years,
outlook – remain positive. Record sales achieved in with the global financial crisis not helping matters.
2010 by aggressive developers should continue in Occupancy and rental rates in the city remain
2011. We view the recently imposed 70% cap on the depressed. Developers have had to change their
loan-to-value (LVR) ratio for the third property product mix to smaller and more affordable units to
purchased as a healthy move that will curb excessive push sales.
speculation while maintaining affordability for first-time • Many companies that opted for REIT listings in the
house buyers and second-home upgraders. early years were looking to cash out rather than
• We have Outperform recommendations on all the aggressively enlarging and enhancing their portfolio of
property developers under coverage as record sales in assets. The recently listed large REITs such as
2010 will translate into strong earnings growth. With Sunway REIT and CMMT are more professionally run
IFRIC 15 and LVR concerns out of the way, we believe and have ambitious acquisition strategies. The other
investors will focus on M&A and developers’ Malaysian REIT that we are more comfortable with is
landbanking activities. The merger of UEM Land and Axis REIT (AXRB MK; Not Rated).
Sunrise should boost interest in the sector and the • KLCC Property remains our only Underperform in the
potential inclusion of the merged group in the KLCI property sector as it is a property investment company
would make it too big to ignore. and not a developer. There is risk of EPS dilution from
• The affordability index for mass housing remains near preference share conversion. Its dividend yield is also
its best ever as mortgage rates are still low and banks not attractive and much lower than REITs. The listings
continue to offer very attractive packages. Also, of the large new REITs in 2010 provide investors a
concerns over an uptick in inflation due to moves to good alternative to KLCC Prop and those seeking
reduce subsidies could help properties as they are steady yields.
viewed as an inflation hedge.
Figure 1: Affordability index (mortgage payments/income) Figure 2: Price indices

0.4500 500.0 Malaysia house price index
0.4000 450.0 Per Capita Income Index
0.3500 400.0 Consumer Price Index
0.3000 350.0
300.0
0.2500
250.0
0.2000
200.0
0.1500 150.0
0.1000 100.0
0.0500 50.0
0.0000
0.0
1980 1984 1988 1992 1996 2000 2004 2008 1988 1991 1994 1997 2000 2003 2006 2009
Source: BNM, PMR, CIMB Research
Sector comparisons
Bloomberg Price price Mkt cap P/E (x) RNAV CAGR (x) (%) yield (%)
ticker Recom. (Local) (Local) (US$ m) CY2012 (Local) (%) CY2011 CY2011 CY2011
E&O EAST MK O 1.14 1.63 300 11.6 2.71 11.8 0.8 5.9 3.5
KLCC Property KLCC MK U 3.53 3.03 1,048 10.5 5.05 10.1 0.6 5.0 4.2
SP Setia SPSB MK O 5.24 6.88 1,694 14.6 5.73 25.1 2.2 13.0 4.5
Simple average 12.2 15.3 1.2 7.9 4.1

MALAYSIA
Rubber Gloves
Nitrile has the upper hand

• We maintain our OVERWEIGHT rating as we expect • Rubber and nitrile latex make up 55-60% of total
glove demand to grow 8-10% p.a. and utilisation rates production costs and dramatic changes in prices would
to remain a healthy 70-90%. Potential re-rating have a negative effect on earnings. Although most of
catalysts include 1) the eventual moderation of rubber this cost can be passed on as the glovemakers use the
latex prices, 2) more newsflow on MNCs’ outsourcing previous month’s price when quoting customers, drastic
of glove production, and 3) frequent price revisions and quick price changes can hurt margins.
which will allow ASPs to catch up with raw material Glovemakers mitigate unusual price fluctuations by
prices. repricing their products two to four times per month.
• All stocks are Outperforms and Hartalega is our top • 95% of glovemakers’ sales are exported, with
pick. Hartalega is Malaysia’s largest manufacturer of transactions priced in either US$ or euros. The
nitrile gloves, which make up 80% of its sales. This depreciation of the US$ and euro against the ringgit
insulates its earnings from rubber latex price volatility. has been a concern and has contributed to margin
If the price of natural rubber remains high, we believe contraction. However, nitrile glovemakers are less
more end users will switch to nitrile. This trend is impacted as they buy all of their nitrile requirements in
already beginning to emerge as some grades of nitrile US$, which acts as a natural currency hedge.
powder-free gloves are cheaper than natural rubber • Glovemakers rely heavily on labour in areas such as
powder-free gloves. stripping gloves, QC and packing. This exposes
• If operating headwinds persist, we believe some glove companies to shortages in foreign labour. However,
companies will explore consolidation options to more automation will reduce their reliance on
optimise costs and build scale. In our view, this would manpower and improve operating efficiency.
stir corporate interest in smaller-cap glovemakers such
as Latexx and Adventa which have nitrile capacity.
Figure 1: Nitrile and natural rubber price (RM/kg) Figure 2: Rubber and nitrile latex cost comparison (RM)
Rubber
15.0 Rubber latex Nitrile latex (For 1,000 gloves) Rubber latex Nitrile latex
vs. Nitrile
14.0 Average glove weight (kg) 5.00 3.50 -30%
13.0 Latex / nitrile content 73% 93% 20%
12.0 3.63 3.24 -11%
11.0
10.0
Total solid content 60% 44%
9.0
Weight of latex / nitrile (kg) 6.04 7.36 22%
8.0
7.0
6.0 Latex / nitrile price (RM/kg) 9.13 5.74 -37%
5.0
Total production cost 55.16 42.23 -23%
Jan-07
Mar-07
Jul-07
Sep-07
Jan-08
Mar-08
Jul-08
Sep-08
Jan-09
Mar-09
Jul-09
Sep-09
Jan-10
Mar-10
Jul-10
Sep-10
May-07
Nov-07
May-08
Nov-08
May-09
Nov-09
May-10
Nov-10
Source: Company, CIMB Research, Bloomberg, Companies
Sector comparisons
Adventa ADV MK O 2.13 3.79 104 7.1 5.7 26.9 1.0 15.0 3.0
Hartalega HART MK O 5.39 8.43 625 9.4 8.3 18.4 3.2 38.9 3.7
Kossan KRI MK O 3.34 5.41 340 7.4 6.3 12.5 1.8 27.6 3.0
Latexx LTX MK O 2.67 3.85 186 6.1 5.6 26.6 1.8 33.0 4.1
Supermax SUCB MK O 4.38 8.22 475 7.1 6.2 22.5 1.6 24.7 2.5
Top Glove TOPG MK O 5.55 7.27 1,094 12.0 11.1 9.7 2.5 22.4 3.4
Simple average 8.2 7.2 19.4 2.0 26.9 3.3

MALAYSIA
Semiconductor
Less chipper

• We continue to rate the sector an OVERWEIGHT as • The PC market has seen softness as consumer PC
the handset segment is still seeing rapid growth and demand has weakened in what is a seasonally strong
the corporate refresh cycle should provide some 3Q and has also been affected by strong media tablet
support. We have Outperform ratings on both MPI and sales. This prompted Gartner to reduce its PC unit
Unisem. The potential catalysts for Unisem include shipment forecast from 17.9% to 14% for 2010 and
earnings surprises, more tier 1 qualification and revival from 18.1% to 16% for 2011. The PC market makes up
of demand. As for MPI, it should benefit from any about 21% of Unisem’s revenue and 30% of MPI’s
turnaround in the computing segment and demand topline.
pickup. • The other key risk is how the economy fares. Our
• Worldwide mobile phone sales rose 35% on a yoy economic research team believes that the growth
basis in 3Q10, making it the third straight quarter of prospects for developing Asia are still good for 2011
double-digit sales growth and indicating healthy though the growth for advanced economies remains
consumer demand. The growth has in part been subdued. The possibility of a double-dip recession is
fuelled by the fast-growing sales of smartphones. not totally out of the picture and our team thinks that
• The corporate refresh cycle will provide some support there is a 30% chance of it occurring. While there is still
to the sector. However, Intel noted that this time a high degree of coupling between developed and the
around, the cycle will be more gradual. Similarly, developing economies, the pace of deceleration of
Gartner has forecast a modest growth rate of 3% in exports will be gradual and fears of a hard landing can
2011 for enterprise IT spending, after an expected 2% be put to rest. Visibility for the semicon sector remains
rise in 2010 led by growth in emerging economies. low as it is no more than a few months ahead.
• After a stellar 2010, chip sales are still set to register • With their revenue denominated entirely in US$, the
growth in 2011 though the growth will be moderating. semicon players have been hit by the falling US$
The SIA expects modest growth of 6% for 2011 and although that is starting to reverse now. Soaring gold
3% for 2012 as the economy recovers and consumer prices and other raw material costs will hit margins as
confidence is restored. Other market researchers have there is a time lag before costs can be passed on.
pegged 2011 growth at 5-9%.
Figure 1: Quarterly handphone sales (m units) Figure 2: Quarterly PC sales (m units)

450 100
90
400
80
350
70
300
60
250 50
200 40
150 30
100 20
50 10
0 0
1Q07 4Q07 3Q08 2Q09 1Q10 1Q07 4Q07 3Q08 2Q09 1Q10
Sector comparisons
Unisem UNI MK O 1.96 2.82 421 6.5 5.7 41.3 1.1 18.0 6.8
MPI MPI MK O 5.45 6.90 365 9.8 7.4 16.1 1.3 14.1 6.7
Simple average 8.2 6.6 28.7 1.2 16.1 6.8

MALAYSIA
OVERWEIGHT Upgraded
Telecommunications
Busy signals for 2011
Kelvin Goh CFA +60(3) 2084 9699 - kelvin.goh@cimb.com

• We upgrade the telco sector from Neutral to • Competition is intensifying with the entry of YTL
OVERWEIGHT on the back of likely catalysts from Communications, revival of U Mobile and SK Telecom’s
capital management and earnings surprise. Our top entry into Packet One. While we think YTLC will have
pick remains Axiata. little impact in mobile voice, it could be disruptive in
• TM may declare a special dividend as its cash has broadband, making it a challenger to TM. A
been bolstered by the sale of its stake in Measat and restructured Time dotCom is eyeing a bigger share in
its shares in Axiata are worth RM0.25/TM share. fixed broadband, data and wholesale, and upping the
Dividend yields for DiGi and Maxis should stay above- heat on TM.
market. Axiata will begin paying dividends in 2011, • Average voice revenue per minute will continue to be
thanks to a surge in FCF and falling gearing. under pressure due to competition for migrant workers
• Small and large screen data revenue should be the key and youths (Figure 1).
revenue drivers, thanks to pent-up demand, the rapid • Instead of an earlier plan to auction refarmed spectrum,
take-up of social networking and accessing of Internet the regulator has asked telcos to come to an amicable
and emails on the go. solution and give up some of their 2G spectrum.
• Celcom and DiGi are teaming up to share Termination rates are due to be revised in Jul 2011, in
infrastructure in 1) operations and maintenance, 2) place of the current interim rate. The regulator-imposed
transmission and site sharing, and 3) radio access reduction in roaming rates between Malaysia and
network. We estimate that this could bolster their Singapore remains outstanding and should be
EBITDA margins by 2-3% pts in the coming years. introduced in 2011. This is likely to be negative for
• Axiata remains an Outperform (SOP-based target price Maxis which earns the most from roaming.
of RM5.90), with the likely catalyst being positive • We remain Neutral on DiGi (TP: RM27.00) and Maxis
earnings and dividend surprises. Unlike its Malaysian (TP: RM5.60) as their steep valuations are offset by
peers, Axiata derives about 40% of its earnings from fairly attractive dividends. We prefer Axiata for its
faster-growing overseas markets. TM is a Trading Buy higher growth and more attractive valuations.
(TP: RM4.04) as we think it may undertake a capital
management with its rising cash levels.
Figure 1: Voice revenue per minute Figure 2: Projection of revenue market share
sen/min Max is Celcom DiGi %

29 50
27 45
Max is
25 40
23 Celcom
35
21
19 30
17 DiGi
25
15
20
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
2006 2007 2008 2009 2010F 2011F 2012F
Sector comparisons
DiGi.com DIGI MK N 24.80 27.00 6,147 14.8 13.3 13.2 16.9 114.1 6.7
Maxis MAXIS MK N 5.36 5.60 12,815 15.8 14.5 6.4 5.0 30.7 10.0
Telekom Malaysia T MK TB 3.41 4.04 3,889 46.6 34.0 (16.1) 1.9 9.2 7.6
Simple average 22.5 18.4 9.8 6.4 42.1 6.7

MALAYSIA
UNDERWEIGHT Maintained
Tobacco
It's getting tougher to smoke

• We have an UNDERWEIGHT call on the tobacco • In early Oct 10, the government hiked excise duty by 3
sector on the back of the tough operating environment sen per stick to 22 sen. As a result, cigarette prices
and unexciting earnings growth prospects. The were raised by about 8-9%, taking the selling prices for
tobacco sector’s strong operating cashflows and premium packs of 20s to the psychological level of
subsequently high dividends are still the sector’s key RM10. We expect these price increases to have
attraction. British American Tobacco (BAT) has negative repercussions for legal volumes.
consistently adopted a 90% net dividend payout policy. • The government has banned the sale of small packs
JT International (JTI) has reverted to its traditional 30 (<20 sticks) from 1 Jun 10. The tobacco players face a
sen gross dividend in 2010. But the company’s net challenging year for as 2011 will see the full-year
cash position is growing and we do not rule out the impact of the ban on tobacco players’ margins.
possibility of special dividends in the future. • Taking into account the government’s strong stance
• Our GDP growth projection of 5.5% for 2011 should be against smoking, we flag the possibility of further
good news for consumption. While there is no clear regulatory constraints such as the extension of non-
correlation between GDP growth and cigarette smoking zones and unrelenting excise duty increases.
consumption, we expect the improving macro • Now that Afta has been implemented, there is risk of an
conditions to help lift consumer sentiment, which influx of foreign cigarettes into the country, which will
should be generally positive for consumer spending. pose a threat to the existing brands. While these
• With the Afta in place, the requirement for 70:30 local- cigarettes are expected to come in at the lower end of
to-foreign tobacco leaves has been lifted. Tobacco the market at the initial stage, competition will
players now have the flexibility to increase their import nonetheless intensify in the future.
of Asean leaves which are generally cheaper than local • We have an Underperform call on BAT given the
leaves. potential de-rating catalysts of 1) more regulatory
• We have a Neutral call on JTI. The company’s negatives, 2) growth in illicit trade, and 3) market share
comeback in terms of market share is encouraging. But loss to its rival JTI. BAT will be most affected by the
we think that earnings growth prospects will be ban on small packs given its larger exposure to small
weighed down by the tough industry fundamentals. packs.
Figure 1: Tobacco industry volume (‘bn sticks) Figure 2: Level of illicit trade (% market share)
('bn sticks) 50%

45% 37.5% 39.7%
21 40%
20 35%
19 27.5%
18 30% 23.8%
25% 20.8%
17 17.5%
16 20% 14.4%
15 15%
14 10%
13 5%
12 0%
11
10 2004 2005 2006 2007 2008 2009 2010
(Mar-
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010F
2011F
May )
Source: Companies, CIMB Research
Sector comparisons
British American ROTH MK U 45.48 44.00 4,127 17.3 16.9 0.9 22.5 136.3 7.1
JTI RJR MK N 6.03 6.35 501 12.8 12.3 5.7 3.6 30.5 5.0
Simple average 15.1 14.6 3.3 13.1 83.4 6.1

MALAYSIA
NEUTRAL Maintained
Transport
Aviation to outperform shipping
Raymond Yap CFA +603 2084 9769 - raymond.yap@cimb.com

• We are bullish on aviation prospects for 2011 as • The aviation and shipping sectors are very susceptible
Southeast Asian airlines remain cautious on capacity to a global downturn in GDP growth. As can be seen
redeployment and continue to focus on yield recovery. during the 2008-09 global financial crisis, yields and
The problems besetting the A380 and B787 will also rates can fall dramatically as airlines and shipping
constrain global supply. Continued regional and global companies struggle to rein in capacity in the face of a
economic growth should keep demand healthy. We steep and sudden collapse in demand. However, our
have Outperform calls on both MAS and AirAsia. economists rate the chance of a double-dip recession
• Crude oil shipping demand has recovered in the first as fairly remote under present circumstances.
10 months of 2010 from 2009 levels, driven by a 1% • The crude tanker and chemical tanker shipping markets
yoy rise in US oil imports and a massive 19% jump have suffered very low rates as excessive newbuilding
Chinese imports. The outlook for crude oil supply looks deliveries overwhelm the demand recovery. While the
positive, with Iraq starting its drilling programme and container shipping sector has been strong, MISC’s liner
Brazil developing its deepwater offshore fields. These business continues to be structurally unprofitable. This
factors should support long-term shipping demand. explains our Underperform rating for MISC.
• China’s impact on the dry bulk market has been • Dry bulk shipping rates in 2011 could suffer in the face
substantial over the past seven years because of its of aggressive newbuilding deliveries and China’s
rapid industrialisation and massive infrastructure property sector crackdown. China’s determined efforts
building programme. China now comprises more than to dampen demand for properties could have a
70% of global iron ore imports and a substantial portion negative effect on demand for steel and consequently,
of the growth in thermal and coking coal imports. iron ore. Furthermore, the newbuilding order book is a
Additionally, the growth in imports of minor bulks has substantial 55% of the current fleet, keeping delivery
been material. India is another growth driver, with growth higher than demand growth for the next two
rising demand for thermal coal powering its new years. We rate Maybulk an Underperform.
generation plants.
Figure 1: Core net profit (RM m) Figure 2: Baltic Dirty Tanker Index
400
1,400
200 Baltic Dirty Tanker Index
1,200
0
-200 1,000
-400 AirAsia 800
-600 MAS
600
-800
400
-1,000
J FM AM J J A S O N D J FM AM J J A S O N
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
09 10
07 08 09 10
Source: Baltic Exchange, Companies, CIMB Research
Sector comparisons
MAS MAS MK O 2.07 3.00 2,205 11.9 4.0 178.5 1.6 18.4 0.0
AirAsia AIRA MK O 2.61 3.85 2,306 7.4 5.4 38.4 1.3 17.7 0.0
MISC MISC MK U 8.75 7.00 12,451 25.4 22.6 19.4 1.7 6.5 5.3
Maybulk MBC MK U 2.97 2.80 947 13.9 9.3 19.8 1.5 11.2 5.5
Simple average 14.7 10.3 64.0 1.5 13.5 2.7

MALAYSIA
NEUTRAL Downgraded
Water
On a slow boat to consolidation

• We downgrade the water sector from Trading Buy to • Further delays in the progress of both the takeover
NEUTRAL due to the disappointing progress of the plans in Selangor and the awards of the outstanding
takeover of water assets in Selangor. We will monitor mega water infrastructure projects are the main risks
the developments and review our call if there are signs for the sector. However, we think the risk of delays on
of a resolution to the impasse. the water infrastructure side is minimal in 2011 as the
• Although the takeover of water assets in Selangor tunnelling, intake pumping station, and dual pipeline of
made little headway in 2010, we expect it to advance in the IWTS has been awarded and it is just a matter of
2011, with the push factor being the risk that the time before the implementation of the remaining jobs
concessionaires (PNSB, Syabas, Abass and Splash) kicks off.
will default on their bond redemptions. Splash’s bonds, • Water concessionaires in Selangor recently filed legal
for example, are due in Jul 2011. actions against each other for Syabas’s failure to meet
• However, unless (i) the payment issues between the its capacity payments to water treatment suppliers. This
water players are dealt with, (ii) consideration is given could cause further hold-ups for the takeover. Also, the
to Syabas’s outstanding compensation, and (iii) the risk of bond defaults as a result of payment issues and
state government pushes for a resolution to all the the absence of the tariff hike for Syabas are likely to
issues, we think the takeover is likely to be protracted. weigh down sentiment on water stocks.
• Although the federal government recently stated that it • Unattractive takeover offers by PAAB for water assets
is looking at a likely solution by end-2010, we remain in Selangor could lead to a prolonged acquisition
Neutral on Puncak Niaga for now. There has been no process. This would further delay the state’s
progress since Splash’s revised proposal in Mar 10 consolidation plan which has already been side-tracked
which implied an effective takeover price of RM4.54 for by the Selangor state government’s unsuccessful
Puncak Niaga. takeover offer for Puncak Niaga.
• For alternative and indirect exposure to the water • Higher operating costs continue to compress water
sector, we recommend Gamuda (GAM MK, operators’ margins. Cost components such as
Outperform) for its 40% share in Splash and IJM Corp chemicals, bitumen and electricity are some of the
for exposure to water infrastructure/IWTS. major items that are denting water operators’ earnings,
both on the water distribution and water treatment side.
Figure 1: Demand and supply of water in Peninsular Malaysia Figure 2: Key water infrastructure projects (RM m)
2000 2020 2050 Value
Domestic 5,558 10,582 16,176 Kelau Dam & related w orks 2,500.0
Industrial 3,985 9,756 15,452 Langat 2 w ater treatment plant & related w orks 5,000.0
Irrigation 20,139 17,857 16,802 Sabah w ater supply project 2,000.0
Total demand (mld) 29,682 38,195 48,430 Mengkuang Dam (Penang) 1,200.0
Total supply (m ld) 11,917 20,300 n/a Total 10,700.0
Sector comparisons
Gamuda GAM MK O 3.76 5.00 2,451 19.6 15.2 33.8 3.6 19.2 3.2
IJM Corp IJM MK O 6.14 6.95 2,644 21.3 20.2 32.6 3.5 16.4 1.7
Puncak Niaga PNH MK N 2.54 2.89 333 4.2 3.2 32.3 0.5 12.7 5.3
Simple average 15.0 17.7 32.9 2.5 16.1 3.4

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COMPANY BRIEFS…

Syariah-compliant stock
MALAYSIA
OUTPERFORM Maintained
Adventa Bhd RM2.13 @07/12/10
Surgical glove specialist Target: RM3.79
Rubber Gloves
ADV MK / ADVE.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Maintain OUTPERFORM. We continue to rate Adventa an OUTPERFORM after

upping our target price from RM3.62 to RM3.79 because of an increase in Top
Glove’s CY11 target P/E from 13.8x to 14.5x. Our target basis remains a 30%
discount to Top Glove and our earnings forecasts remain unchanged. Potential re-
rating catalysts for the sector’s surgical glove specialist include 1) higher OBM
glove sales, 2) establishment of own distribution channels, and 3) better product
mix from its new nitrile manufacturing facility.
• New plant in Kluang coming onstream. With utilisation running at 85%, demand
for Adventa’s surgical and examination gloves is robust. We expect Adventa’s new
glove facility in Kluang to come onstream in 2H11, adding capacity of 1.5bn pieces
of gloves. These gloves will be nitrile, which in our view will help the company
diversify its product mix and fulfil customer demand.
• Transforming into an integrated healthcare company. Currently, 54% of
Adventa’s gloves are sold under its own brands. We expect OBM to make up 70%
of sales over the next few years. Adventa also continues to establish its distribution
of dialysis machines and is targeting RM150m-200m in revenues by FY16 from this
division to complement its core rubber and nitrile glove manufacturing arm.
Financial summary
FYE Oct 2008 2009 2010F 2011F 2012F
Revenue (RM m) 185.9 282.7 353.5 460.2 554.0
EBITDA (RM m) 23.0 45.0 52.0 62.8 77.4
EBITDA margins (%) 12.3% 15.9% 14.7% 13.7% 14.0%
Pretax profit (RM m) 13.5 18.6 36.9 47.0 61.7
Net profit (RM m) 13.8 17.2 34.0 43.3 56.8
EPS (sen) 9.0 11.2 22.3 28.3 37.2
EPS growth (%) (32.5%) 24.3% 98.3% 27.2% 31.3%
P/E (x) 23.6 19.0 9.6 7.5 5.7
Stock Information
Core EPS (sen) 9.0 18.2 22.3 28.3 37.2
Market cap: RM325m/US$104m Core EPS growth (%) (32.5%) 101.4% 22.4% 27.2% 31.3%
12-m price range: RM4.21 Core P/E (x) 23.6 11.7 9.6 7.5 5.7
RM2.10 Gross DPS (sen) 0.0 6.8 4.0 6.0 8.0
3-m avg daily vol: 0.3m Dividend yield (%) 0.0% 3.2% 1.9% 2.8% 3.8%
No. of shrs (m): 153 P/BV (x) 1.9 1.8 1.3 1.0 0.8
Est. free float (%): 49.8 ROE (%) 8.2% 9.3% 13.4% 13.3% 13.8%
Conv. secs (m): None Net gearing (%) 45.3% 41.6% 35.7% 31.6% 24.3%
Major shareholders (%): P/FCFE (x) 33.9 140.3 (21.5) (59.8) 19.1
- Low Chin Guan 39.7 EV/EBITDA (x) 17.6 9.0 8.0 6.9 5.5
- Koon Mei Wong 5.6 % change in EPS estimates N/A N/A N/A
- Lembaga Tabung Haji 4.9 CIMB/Consensus (x) 0.92 0.87 0.91
Source: Company, CIMB Research, Bloomberg
Price chart Corporate profile

4.4
0.80 Adventa started its operations in 1988 with a single production line for examination
0.70
3.9 0.60 gloves. Soon after that, it obtained US FDA approval to start exporting to the US.
3.4
0.50
0.40
Today, Adventa is principally involved in the manufacture and trading of gloves and
2.9 0.30 medical supplies. The group now has the capacity to produce 500m surgical and
0.20
2.4
0.10
4.4bn pieces of examination & dental gloves p.a. 30% of Adventa’s examination and
1.9
Dec-09 May-10 Oct-10
0.00
dental gloves are nitrile. Headquartered in Kota Bharu, Kelantan, the group has
Volume 10m (R.H.Scale) Adventa Bhd manufacturing facilities in Kota Bharu, Kluang in Johor and Montevideo in Uruguay.
Source: Bloomberg

Financial tables
PROFIT & LOSS KEY RATIOS

(RM m, FYE Oct) 2008 2009 2010F 2011F 2012F (FYE Oct) 2008 2009 2010F 2011F 2012F
Revenue 186 283 354 460 554 Revenue growth (%) (17.4) 52.1 25.0 30.2 20.4
Operating expenses (163) (238) (302) (397) (477) EBITDA growth (%) (21.7) 95.9 15.5 21.0 23.2
EBITDA 23 45 52 63 77 Pretax margins (%) 7.3 6.6 10.4 10.2 11.1
Depreciation & amortisation (7) (10) (12) (13) (14) Net profit margins (%) 7.4 6.1 9.6 9.4 10.3
EBIT 16 35 40 50 63 Interest cover (x) 4.6 6.3 9.4 10.6 12.3
Net interest & invt income (3) (5) (3) (3) (1) Effective tax rates (%) N/A 8.2 8.0 8.0 8.0
Associates’ contribution 0 0 0 0 0 Net dividend payout (%) 0.0 45.6 13.5 15.9 16.1
Exceptional items 0 (12) 0 0 0 Debtors turnover (days) 101.8 61.5 62.1 62.1 62.1
Others 0 0 0 0 0 Stock turnover (days) 92.1 67.6 69.4 69.4 69.4
Pretax profit 13 19 37 47 62 Creditors turnover (days) 46.3 37.7 34.1 29.6 27.8
Tax 0 (2) (3) (4) (5)
Minority interests 0 0 0 0 0
Net profit 14 17 34 43 57
Adj. wt. shares (m) 153 153 153 153 153
Unadj. year-end shares (m) 139 141 153 153 153
BALANCE SHEET KEY DRIVERS

(RM m, end Oct) 2008 2009 2010F 2011F 2012F (FYE Oct) 2009 2010F 2011F 2012F
Fixed assets 156 163 222 269 317 Production capacity (m pcs p.a) 3,300 3,800 5,300 6,800
Intangible assets 3 3 3 3 3 Capacity utilisation (%) 80.0% 75.0% 75.0% 75.0%
Other long-term assets 19 20 19 19 18 ASP (US$) per 1,000 pieces 20.00 22.00 21.00 20.00
Total non-current assets 178 186 245 291 339 Exchange rate (RM to US$) 3.55 3.17 3.11 3.15
Cash and equivalents 38 39 36 36 54 Natural rubber price (RM /kilogram) 4.23 7.00 6.50 6.00
Stocks 47 52 67 87 105 Nitrile latex prices (US$/mt) 1,100 1,350 1,368 1,483
Trade debtors 52 48 60 78 94
Other current assets 8 21 21 28 33
Total current assets 144 159 185 230 286
Trade creditors 24 29 33 37 42
Short-term borrowings 53 57 63 69 76
Other current liabilities 10 8 8 8 7
Total current liabilities 86 95 104 114 126
Long-term borrowings 62 58 64 71 78
Other long-term liabilities 5 6 7 8 9
Total long-term liabilities 67 65 71 79 86
Shareholders’ funds 168 184 253 327 412
NTA/share (RM) 1.08 1.18 1.63 2.12 2.67
CASH FLOW 12M - FORWARD FD CORE P/E (X)

(RM m, FYE Oct) 2008 2009 2010F 2011F 2012F 17.0
Pretax profit 13 19 37 47 62
Depreciation & non–cash adj. 7 10 12 13 14 15.0
Working capital changes (4) (7) (24) (41) (35)

13.0
Cash tax paid 0 0 (2) (3) (4)
Others 0 7 0 0 0
11.0
Cash flow from operations 16 28 23 16 38
Capex (26) (29) (50) (35) (35) 9.0
Net investments & sale of FA 0 1 0 0 0
Others 1 0 0 0 0 7.0
Cash flow from investing (26) (27) (50) (35) (35)
Debt raised/(repaid) 19 2 12 13 14 5.0
Equity raised/(repaid) 0 6 0 0 0
3.0
Dividends paid (6) (4) (3) (5) (7) Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10
Cash interest & others (3) (3) 16 10 8
Cash flow from financing 10 1 25 18 15
Change in cash 0 1 (2) 0 18
Change in net cash/(debt) (19) 0 (14) (13) 4
Ending net cash/(debt) (77) (77) (91) (104) (100)

MALAYSIA
Affin Holdings Bhd RM3.20 @07/12/10
Small bank gaining ground Target: RM4.04
Banks
AHB MK / AFIN.KL Winson Ng Gia Yann CFA +60(3) 2084 9686 – winson.ng@cimb.com
• Reaffirm OUTPERFORM. Affin remains an OUTPERFORM in our books, premised

on the potential re-rating catalysts of (1) robust loan growth, (2) better-than-
expected net interest margin, and (3) appealing valuations. We maintain our EPS
forecasts and DDM-based target price of RM4.04. Our DDM parameters remain
intact, including a cost of equity of 11.6% and dividend growth rates of 13.6% for the
interim growth phase and 4% for the long-term growth phase.
• Healthy earnings growth. Affin’s net profit is projected to grow at a healthy 15.2%
to RM546.2m in FY11, largely driven by a 10.5% rise in net interest income on the
back of strong loan growth. FY11 loan loss provisioning should be relatively stable
at RM95.2m while the credit charge-off rate is expected to improve from 37bp in
FY10 to 33bp in FY11. As we expect the 9.2% growth in topline to outpace the 5.6%
expansion of overheads, the cost-to-income ratio is expected to drop from 47% in
2010 to 45.4% in 2011.
• Speedy loan growth. Despite being one of the smallest banks in Malaysia, Affin
continued to turn in above-industry loan growth of 14-18% in Jan-Sep 10 vs. 9-13%
for the industry. We are projecting solid loan growth of 11.4% for Affin in 2011,
fuelled by growth of about 11% for non-residential mortgages and auto loans and
15% for working capital loans. Although the growth momentum of residential
mortgages is likely to ease from a projected 11.2% for 2010, the rate should remain
healthy at 8.7% in 2011.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Net interest income (RM m) 724.2 818.3 875.3 967.5 1,048.9
Non-interest income (RM m) 313.3 378.7 398.4 425.6 464.7
Total income (RM m) 1,137.8 1,299.1 1,370.9 1,497.6 1,619.7
Stock Information Loan loss provisions (RM m) (100.5) (185.1) (93.3) (95.2) (90.7)
Market cap: RM4,783m/US$1,520m
Net profit (RM m) 292.8 371.9 474.3 546.2 598.0
12-m price range: RM3.26
EPS (sen) 19.6 24.9 31.7 36.6 40.0
RM2.29
EPS growth (%) 16% 27% 28% 15% 9%
3-m avg daily vol: 0.8m
P/E (x) 16.3 12.9 10.1 8.8 8.0
No. of shrs (m): 1,495
Gross DPS (sen) 5.0 8.5 10.6 12.3 13.4
Est. free float (%): 23.0
Conv. secs (m): None Dividend yield (%) 1.6% 2.7% 3.3% 3.8% 4.2%
Major shareholders (%): P/BV (x) 1.1 1.0 0.9 0.9 0.8
- LTAT 35.7 ROE (%) 6.8% 8.1% 9.6% 10.2% 10.3%
- Bank of East Asia 21.2 % change in EPS estimates - - -
- Boustead 20.7 CIMB/Consensus (x) 1.00 1.03 1.04

3.5 1.00
0.90
Affin Holdings is the eighth largest local bank in Malaysia with assets totalling
3.3
3.1
0.80
0.70
RM45bn. It was incorporated in 1975 under the name Perwira Habib Bank. Its ultimate
2.9 0.60
0.50
shareholder is the armed forces retirement fund, LTAT. Its wholly-owned Affin Bank
2.7
2.5
0.40
0.30
commenced operations in Jan 01 following a merger of Perwira Affin Bank and BSN
2.3
0.20
0.10
Commercial in Aug 00. In Jun 05, the bank was merged with Affin-ACF Finance. Hong
2.1
0.00
Kong-based Bank of East Asia subscribed to 193.2m new shares in Affin in Oct 07,
Volume 10m (R.H.Scale) Affin Holdings Bhd making it a strategic partner with a 20% stake. Consumer loans account for 43% of
Source: Bloomberg Affin’s loan base, followed by 26.8% for SME loans and 22% for corporate loans.

Financial tables

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F (FYE Dec) 2008 2009 2010F 2011F 2012F
Net interest income 724 818 875 968 1,049 Total income growth (%) (0.3) 14.2 5.5 9.2 8.1
Non-interest income 313 379 398 426 465 Pre-provision profit growth (%) (2.0) 26.2 4.5 12.5 10.4
Other income 100 102 97 104 106 Pretax growth (%) 14.5 23.0 25.4 15.1 9.5
Total income 1,138 1,299 1,371 1,498 1,620 Net interest margin (%) 2.17 2.30 2.29 2.41 2.45
Overhead expenses (588) (605) (645) (680) (718) Cost-income ratio (%) 51.6 46.5 47.0 45.4 44.3
Pre-provision profit 550 695 726 817 902 Effective tax rates (%) 27.6 25.2 23.9 23.9 23.9
Loan loss provisions (101) (185) (93) (95) (91) Net dividend payout (%) 18.9 25.6 25.2 25.2 25.2
Associates’ contribution (5) 12 14 16 17
Exceptional items 0 0 0 0 0
Others (41) (25) (23) (20) (43)
Pretax profit 404 497 623 718 786
Tax (111) (125) (149) (172) (188)
Net profit 293 372 474 546 598
Adj. wt. shares (m) 1,494 1,494 1,494 1,494 1,494
Unadj. year-end shares (m) 1,494 1,494 1,494 1,494 1,494

(RM m, end Dec) 2008 2009 2010F 2011F 2012F (FYE Dec) 2008 2009 2010F 2011F 2012F
Cash & deposits with FIs 6,852 6,225 6,911 6,922 7,161 Loan growth (%) 15.3 12.9 16.0 11.1 9.9
Marketable securities 6,300 8,317 5,388 5,115 4,761 Deposit growth (%) 5.4 6.2 6.1 6.5 6.4
Total current assets 13,152 14,542 12,299 12,037 11,923 Loan-deposit ratio (%) 74.0 78.7 85.9 89.7 92.6
Net loans & advances 19,928 22,497 26,091 28,983 31,844 Gross NPL (%) 5.8 3.7 3.9 4.1 4.1
Long-term investments 603 518 395 371 338 Net NPL (%) 3.2 2.2 2.1 2.0 1.9
Fixed assets 291 243 254 255 259 Loan loss reserve (%) 71.6 81.5 84.2 86.9 89.6
Intangible assets 1,038 1,023 1,023 1,023 1,023 GP ratio (%) 1.5 1.5 1.4 1.5 1.5
Other long-term assets 1,817 1,131 1,196 1,214 1,224 RWCR (%) 13.9 13.8 14.2 13.8 13.3
Total long-term assets 23,676 25,412 28,960 31,847 34,688
Total assets 36,828 39,954 41,259 43,883 46,611
Customer deposits 26,935 28,599 30,356 32,315 34,387
Deposits of other FIs 3,889 5,147 3,827 4,060 4,194
Subordinated debts 700 300 300 300 300
Other long-term liabilities 893 1,173 1,652 1,643 1,682
Total liabilities 32,417 35,219 36,136 38,318 40,562
Shareholders’ funds 4,411 4,735 5,123 5,565 6,048
BV/share (RM) 2.95 3.17 3.43 3.72 4.05
CURRENT P/BV (X) 12M - FORWARD FD CORE P/E (X)

1.10 14.0
13.0
1.00
12.0
0.90 11.0
10.0
0.80
9.0
0.70
8.0
0.60 7.0
6.0
0.50
5.0
0.40 4.0
Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10

MALAYSIA
AirAsia Bhd RM2.61 @07/12/10
Risks dissipating, business booming Target: RM3.85
Airlines
AIRA MK / AIRA.KL Raymond Yap CFA +603 2084 9769 – raymond.yap@cimb.com
• Maintain OUTPERFORM. AirAsia’s LCC business continues to gain scale and

profitability as its route network expands and the older routes become mature.
Under relatively benign oil price conditions, we expect AirAsia to post significant
gains in profits over the next three years. Our target price of RM3.85 remains
pegged to 8x P/E multiple, at the top end of its past two years’ trading band, but at
the lower end of the 8-12x peer range as its business is less mature compared to
Southwest or Ryanair. We reiterate our OUTPERFORM rating which is based on
the potential catalysts of yield appreciation from maturing routes, strong regional
travel demand and repayment of associate balances.
• Record associate profitability. The two 49%-owned associates were “problem
children” in the past but appear to have grown up. Thai AirAsia and Indonesia
AirAsia earned strong profits in recent quarters, and appear to have gained a sound
footing. This will ensure their successful listings which are targeted for 2011-12.
• Dissipating risks. The associates required huge cashflow support from AirAsia in
the past but this is reversing. Balances owed by the associates to AirAsia have
declined a cumulative RM188m since end-2009, or 23% to RM635m. AirAsia
expects to convert a part of these balances to equity upon listing of the associates
to maintain its 49% stakes. The remaining sums will be fully settled in two years.
Meanwhile, AirAsia has deferred the deliveries of its A320 aircraft and its more
manageable pace of growth will allow net gearing to fall gradually.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 2,851.8 3,178.9 3,944.4 4,514.0 5,187.9
EBITDA (RM m) 525.7 1,193.7 1,585.8 1,877.4 2,299.9
EBITDA margins (%) 18.4% 37.6% 40.2% 41.6% 44.3%
Pretax profit (RM m) (869.2) 639.6 1,860.4 896.3 1,353.3
Net profit (RM m) (496.6) 549.2 1,914.2 887.5 1,339.5
EPS (sen) (20.9) 22.2 69.3 32.0 48.3
EPS growth (%) (170.8%) 206.3% 211.5% (53.8%) 50.9%
P/E (x) nm 11.7 3.8 8.2 5.4
Core EPS (sen) 2.8 18.2 27.5 35.1 48.3
Core EPS growth (%) (70.7%) 546.5% 50.8% 27.7% 37.8%
Stock Information
Core P/E (x) 92.7 14.3 9.5 7.4 5.4
Market cap: RM7,235m/US$2,306m Gross DPS (sen) 0.0 0.0 0.0 0.0 0.0
12-m price range: RM2.65 Dividend yield (%) 0.0% 0.0% 0.0% 0.0% 0.0%
RM1.11 P/BV (x) 3.9 2.7 1.6 1.3 1.1
3-m avg daily vol: 7.8m ROE (%) (26.8%) 25.7% 52.9% 17.7% 21.8%
No. of shrs (m): 2,772 Net gearing (%) 407.2% 257.0% 137.2% 104.4% 74.6%
Est. free float (%): 70.0 P/FCFE (x) (22.8) 75.9 4.4 9.6 6.2
Conv. secs (m): None EV/EBITDA (x) 24.2 11.1 8.5 6.9 5.4
Major shareholders (%): % change in EPS estimates N/A N/A N/A
- Tune Air 25.9 CIMB/Consensus (x) 0.96 1.13 1.36

2.8
2.6
3.50 AirAsia is Southeast Asia’s largest and arguably most successful low-cost carrier. It
2.4
3.00
2.50
operates a fleet of 52 aircraft in Malaysia, as well as 18 planes in Thailand and 15 in
2.2
2.0 2.00 Indonesia. It has 225 Airbus A320s on order, with 76 delivered to date. Over the past
1.8
1.6
1.50
year, AirAsia expanded its flights from Malaysia to India, after its foray into HK and
1.00
1.4
1.2 0.50
south China. AirAsia also owns 16% of AirAsia X, its long-haul low-cost associate that
1.0
De c-09 Ma y-10 Oct-10
0.00
flies to Australia, China, Japan, South Korea, north India and the UK. It also owns
Volume 10m (R.H.S ca le ) AirAs ia Bhd 49% stakes in Thai AirAsia and Indonesia AirAsia. Both associates and AirAsia X are
Source: Bloomberg targeted to be listed in 2011-12.

Financial tables

Revenue 2,852 3,179 3,944 4,514 5,188 Revenue growth (%) 48.3 11.5 24.1 14.4 14.9
Operating expenses (2,326) (1,985) (2,359) (2,637) (2,888) EBITDA growth (%) 1.3 127.1 32.8 18.4 22.5
EBITDA 526 1,194 1,586 1,877 2,300 Pretax margins (%) (30.5) 20.1 47.2 19.9 26.1
Depreciation & amortisation (279) (425) (504) (565) (614) Net profit margins (%) (17.4) 17.3 48.5 19.7 25.8
EBIT 247 769 1,082 1,312 1,686 Interest cover (x) 1.0 2.1 2.8 3.1 3.8
Net interest & invt income (224) (367) (367) (380) (382) Effective tax rates (%) N/A 14.1 N/A 1.0 1.0
Associates’ contribution 0 0 0 0 0 Net dividend payout (%) N/A 0.0 0.0 0.0 0.0
Exceptional items (940) 192 1,096 (86) 0 Debtors turnover (days) 4.0 4.7 3.8 3.9 3.9
Pretax profit (869) 640 1,860 896 1,353 Creditors turnover (days) 107.6 120.6 105.2 105.7 101.8
Tax 373 (90) 54 (9) (14)
Net profit (497) 549 1,914 888 1,339
Adj. wt. shares (m) 2,374 2,469 2,763 2,772 2,772

(RM m, end Dec) 2008 2009 2010F 2011F 2012F (FYE Dec) 2009 2010F 2011F 2012F
Fixed assets 6,594 7,937 9,415 9,862 10,698 Passenger fleet size (# of planes) 46 50 54 59
Intangible assets 856 773 833 835 836 Av. seat km (ASK, yoy chg %) 17.8% 11.4% 8.9% 8.7%
Other long-term assets 139 164 164 164 164 Rev. psg km (RPK, yoy chg %) 16.8% 14.4% 8.9% 8.7%
Total non-current assets 7,589 8,874 10,412 10,862 11,698 Load factor (%) 75.0% 77.0% 77.0% 77.0%
Cash and equivalents 154 748 2,404 3,159 4,321 Passenger yield per RPK (sen) 17.02 18.88 19.91 21.10
Stocks 21 21 21 21 21 Jet fuel price (US$/barrel) 70.33 95.00 100.00 105.00
Trade debtors 46 36 45 51 59 Fuel cost per ASK (sen) 4.23 5.24 5.19 5.48
Other current assets 1,711 1,618 1,618 1,618 1,618 Non-fuel cost per ASK (sen) 7.93 7.51 7.83 7.52
Total current assets 1,932 2,422 4,087 4,849 6,019
Trade creditors 1,061 1,039 1,235 1,380 1,512
Total current liabilities 1,769 1,535 1,731 1,876 2,008
Long-term borrowings 6,147 7,097 8,191 8,369 8,904
Total long-term liabilities 6,147 7,097 8,191 8,369 8,904
NTA/share (RM) 0.32 0.69 1.35 1.67 2.15

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
48.0
Pretax profit (869) 640 1,860 896 1,353
Working capital changes (124) (82) 187 139 124 38.0

Cash tax paid (3) (4) (6) (11) (15)
33.0
Others 207 297 (779) 330 332
Cash flow from operations (511) 1,275 1,766 1,919 2,409 28.0
Capex (2,621) (1,919) (1,982) (1,013) (1,450) 23.0

18.0
Others (34) (35) 0 0 0
Cash flow from investing (2,555) (1,771) (1,982) (1,013) (1,450) 13.0
Debt raised/(repaid) 2,993 902 2,189 178 535 8.0

3.0
Dividends paid 0 0 0 0 0 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10
Cash interest & others (199) (321) (317) (330) (332)
Cash flow from financing 2,794 1,090 1,872 (151) 203
Change in cash (272) 594 1,656 755 1,162
Change in net cash/(debt) (3,265) (308) (533) 577 627
Ending net cash/(debt) (6,538) (6,846) (6,283) (5,706) (5,079)

MALAYSIA
UNDERPERFORM Maintained
Alliance Financial Group RM3.08 @07/12/10
Continued headwinds for the topline Target: RM3.11
Banks
AFG MK / ALFG.KL Winson Ng Gia Yann CFA +60(3) 2084 9686 – winson.ng@cimb.com
• Maintain UNDERPERFORM. We reiterate our UNDERPERFORM rating on

Alliance in light of the potential downside triggers of (1) sequential contraction in
interest margin, (2) still-weak non-interest income, and (3) slower-than-expected
recovery in loan growth. We retain our EPS forecasts and target price of RM3.11,
still pegged to its DDM value (cost of equity of 12.2% and dividend growth rates of
13.9% for the interim growth phase and 4% for the long-term growth phase.
• Slowdown in FY12 earnings growth. We are forecasting a slowdown in net
earnings growth from 38.2% in FY3/11 to 12.2% in FY12, partly because of the
expected increases of 8% in loan loss provisioning and 6% in overheads. On the
other hand, growth will be supported by a (1) 10.7% increase in net interest income,
on the back of 10.4% loan growth, and (2) 10% rise in non-interest income, primarily
from the retail and business banking units.
• Concerns persist. We still see concerns in a few areas, which may continue to
affect the group’s earnings in the next few quarters. These include (1) slow loan
growth of 6.2% yoy in Sep 10 vs. the industry’s 11.9%, (2) tepid non-interest income
growth of 6.4% yoy in 1HFY3/11, leading us to project a pace of 3-7% in FY11-12,
and (3) sequential erosion of net interest margin due to the upward re-pricing of
fixed deposit rates and reduction of lending rates to rejuvenate loan growth.
Financial summary
FYE Mar 2009 2010 2011F 2012F 2013F
Net interest income (RM m) 654.6 616.9 679.0 751.3 813.4
Non-interest income (RM m) 365.4 391.3 429.9 468.3 516.0
Total income (RM m) 1,054.7 1,064.5 1,185.4 1,292.2 1,401.6
Stock Information Loan loss provisions (RM m) (115.1) 31.9 (61.5) (66.3) (75.6)
Net profit (RM m) 229.1 301.4 416.6 467.5 523.4
EPS (sen) 14.8 19.5 26.9 30.2 33.8
RM2.41
EPS growth (%) (46%) 32% 38% 12% 12%
P/E (x) 20.8 15.8 11.4 10.2 9.1
Gross DPS (sen) 8.3 8.5 11.8 13.3 14.4
- Duxton Investment 14.5 ROE (%) 8.6% 10.6% 13.5% 13.9% 14.2%
- Langkah Bahagia 14.5 % change in EPS estimates - - -
- EPF 15.7 CIMB/Consensus (x) 1.04 1.04 1.01

3.4
Alliance was incorporated on 7 Apr 66 and was listed on Bursa Malaysia on 6 Jul 79.
6.00
3.2
5.00
The bank is the smallest among the nine local banking groups, with total assets of
3.0
4.00 RM35.8bn. It was formed from the mergers of seven financial institutions, namely
2.8
2.6
3.00
2.00
Multi-Purpose Bank, International Bank Malaysia, Bolton Finance, Bumiputra
2.4 1.00 Merchant Bankers, Sabah Bank, Sabah Finance and Amanah Merchant Bank in 2001.
2.2
0.00
In 2005, Temasek bought an effective stake of 15% in Alliance and appointed a new
Volume 10m (R.H.S ca le ) Allia nce Fina ncia l Group management team headed by Datuk Bridget Lai who was replaced by Mr. Sng Seow
Source: Bloomberg Wah in Jul 10. On 31 Dec 04, Alliance acquired 100% of Kuala Lumpur City Securities
(KLCS) to strengthen its investment banking business.

Financial tables

(RM m, FYE Mar) 2009 2010 2011F 2012F 2013F (FYE Mar) 2009 2010 2011F 2012F 2013F
Net interest income 655 617 679 751 813 Total income growth (%) 3.7 0.9 11.4 9.0 8.5
Non-interest income 365 391 430 468 516 Pre-provision profit growth (%) (9.5) 2.9 21.4 11.8 12.1
Other income 35 56 77 73 72 Pretax growth (%) (39.6) 34.8 35.8 12.2 12.0
Overhead expenses (559) (555) (566) (600) (626) Cost-income ratio (%) 53.0 52.1 47.8 46.5 44.7
Pre-provision profit 495 510 619 692 776 Effective tax rates (%) 24.5 26.3 25.0 25.0 25.0
Loan loss provisions (115) 32 (61) (66) (76) Net dividend payout (%) 41.9 32.9 33.0 33.0 32.0
Associates’ contribution 0 0 0 0 0
Others (77) (133) (2) (2) (2)
Pretax profit 303 409 556 623 698
Tax (74) (107) (139) (156) (175)
Net profit 229 301 417 467 523
Adj. wt. shares (m) 1,548 1,548 1,548 1,548 1,548

(RM m, end Mar) 2009 2010 2011F 2012F 2013F (FYE Mar) 2009 2010 2011F 2012F 2013F
Marketable securities 46 0 19 11 20 Deposit growth (%) 19.8 (7.6) 9.5 14.3 13.4
Long-term investments 6,635 6,086 5,938 7,202 8,332 Net NPL (%) 1.8 1.8 1.6 1.7 2.0
Intangible assets 369 362 363 363 363 GP ratio (%) 1.8 1.5 1.5 1.5 1.5
Other long-term assets 712 690 755 789 820 RWCR (%) 14.8 15.7 15.9 16.0 16.3
Total assets 31,846 31,664 34,599 38,905 43,604
Subordinated debts 600 600 600 600 600
Other long-term liabilities 1,721 2,194 2,387 2,452 2,578
BV/share (RM) 1.78 1.90 2.08 2.27 2.49

2.10
20.0
1.90
18.0
1.70
16.0
1.50
14.0
1.30
12.0
1.10
10.0
0.90 8.0

MALAYSIA
AMMB Holdings Bhd RM6.26 @07/12/10
Riding on ANZ momentum Target: RM8.20
Banks
AMM MK / AMMB.KL Winson Ng Gia Yann CFA +60(3) 2084 9686 – winson.ng@cimb.com
• Maintain OUTPERFORM. We reiterate our OUTPERFORM rating on AMMB, which

is premised on the potential re-rating catalysts of (1) further value-add from ANZ, (2)
benefits from the group revamp, (3) improved investment banking deal flow, and (4)
new growth avenue in the treasury business. We are keeping our EPS forecasts
and target price basis of 10% premium over its DDM value (cost of equity of 12%
and dividend growth rates of 13.8% for the interim growth phase and 5% for the
long-term growth phase). This gives us an unchanged target price of RM8.20.
• Brisk earnings growth. After a projected spectacular 39.1% jump in FY3/11,
AMMB’s net profit is set to increase 26.1% in FY12. The earnings drivers are
expected to be a (1) 14.3% rise in net interest income, on the back of 9.5% loan
growth and a 5bp expansion of net interest margin to 2.16%, (2) 14.7% uptick in
non-interest income, primarily from investment banking and treasury operations,
and (3) a 7% drop in loan loss provisioning.
• Continuous emphasis on transformation. Aided by ANZ, AMMB will push ahead
with its transformation programme, which will yield more positive results in the
coming years. The focus of the revamp will be (1) expansion of branch and ATM
networks to capture more market share, (2) further development of the treasury
business, (3) expansion of deposits, especially low-cost deposits.
Financial summary
FYE Mar 2009 2010 2011F 2012F 2013F
Net interest income (RM m) 1,776.3 1,886.6 2,272.4 2,615.3 2,903.3
Non-interest income (RM m) 1,160.5 1,671.2 1,888.8 2,152.8 2,362.6
Total income (RM m) 2,927.6 3,577.8 4,174.6 4,799.6 5,286.0
Pretax profit (RM m) 1,217.5 1,376.7 1,945.0 2,447.5 2,724.3
Net profit (RM m) 860.8 1,008.6 1,403.3 1,770.0 1,967.5
EPS (sen) 31.6 35.2 46.6 58.7 65.3
RM4.61
EPS growth (%) 15% 11% 32% 26% 11%
P/E (x) 19.8 17.8 13.4 10.7 9.6
Gross DPS (sen) 8.0 12.5 21.7 27.4 30.5
- ANZ 23.8 ROE (%) 11.6% 11.6% 13.7% 15.4% 15.2%
- Amcorp 16.7 % change in EPS estimates - - -

AMMB is Malaysia’s 5th largest domestic bank by assets. It is a full-fledged banking
2.00
6.3
group with the second largest market share in auto financing which accounts for a
1.50
5.8
substantial 33.8% of its loan book. In 2005, the group underwent a restructuring
5.3 1.00
exercise whereby it took its finance arm private and listed its investment bank,
4.8 0.50
AmInvestment Group. However, AmInvest was privatised in early 2008. ANZ emerged
4.3
0.00
as a significant shareholder in AMMB in early 2007 with a 14.1% direct stake, which
Volume 10m (R.H.S ca le ) AMMB Holding s Bhd was increased to 23.8% after conversion of its 163.9m preference shares and
Source: Bloomberg RM575m convertible bonds in the group.

Financial tables

Net interest income 1,776 1,887 2,272 2,615 2,903 Total income growth (%) (12.7) 22.2 16.7 15.0 10.1
Non-interest income 1,161 1,671 1,889 2,153 2,363 Pre-provision profit growth (%) (8.6) 25.2 24.3 20.4 12.3
Other income (9) 20 13 31 20 Pretax growth (%) 1.9 13.1 41.3 25.8 11.3
Overhead expenses (1,269) (1,501) (1,593) (1,693) (1,798) Cost-income ratio (%) 43.3 42.0 38.2 35.3 34.0
Pre-provision profit 1,659 2,076 2,581 3,107 3,488 Effective tax rates (%) 27.9 24.3 26.3 26.2 26.3
Associates’ contribution 0 (1) 0 0 0
Others (97) (130) (53) (39) (47)
Pretax profit 1,218 1,377 1,945 2,448 2,724
Tax (339) (334) (512) (641) (716)
Minority interests (17) (34) (29) (37) (41)
Net profit 861 1,009 1,403 1,770 1,968
Adj. wt. shares (m) 2,723 2,869 3,014 3,014 3,014

(RM m, end Mar) 2009 2010 2011F 2012F 2013F (FYE Mar) 2009 2010 2011F 2012F 2013F
Long-term investments 780 563 662 823 994 Net NPL (%) 2.6 1.5 2.2 2.2 2.2
Total assets 89,893 96,480 106,857 118,852 130,989
Subordinated debts 4,206 5,649 5,133 5,305 5,247
BV/share (RM) 2.84 3.20 3.59 4.05 4.52

14.0
1.90
13.0
1.70 12.0
11.0
1.50
10.0
1.30 9.0
1.10 8.0
7.0
0.90
6.0
0.70 5.0

MALAYSIA
Ann Joo Resources RM2.94 @07/12/10
Pedal to the metal Target: RM3.74
Steel
AJR MK / ANNJ.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Maintain TRADING BUY. Ann Joo’s TRADING BUY call and EPS forecasts are
intact. Although we continue to value the stock at a 10% discount to our target
market P/E, our target price increases from RM3.60 to RM3.74 because of a
revision in our target market P/E from 13.8x to 14.5x. Potential re-rating catalysts
are 1) new LCCT and LRT construction starts, 2) commissioning of Ann Joo’s
0.68m-1.1m mt blast furnace within 1H11, and 3) legislation of the MSA’s proposals
such as favourable energy tariffs and import duties. Ann Joo’s FY11 5.8% dividend
yield is also the highest in the sector.
• Mega construction jobs. The 10th MP and Budget 2011 revealed big projects
such as the KL MRT, LRT, new LCCT and high-speed rail project, which will boost
construction activities and reinvigorate steel demand. Awards for RM1.6bn out of
the RM7bn LRT extension have already been announced and we expect more
announcements in 2011. This is positive as elevated projects tend to use more steel
relative to other materials.
• Export steel prices to recover in 2011. We expect international steel prices to
recover in 2011 due to 1) US$50bn in government spending to urbanise Chinese
rural areas and 2) lower global steel supply as China races to meet energy
consumption targets by decommissioning obsolete plants. As at Sep, 35m mt of
iron- and 9m mt of steel-making capacity have already been eliminated.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 2,222.1 1,303.0 1,900.3 2,045.8 2,293.2
EBITDA (RM m) 153.6 103.7 245.9 280.5 370.1
EBITDA margins (%) 6.9% 8.0% 12.9% 13.7% 16.1%
Net profit (RM m) 139.4 31.6 132.1 157.7 224.9
EPS (sen) 26.7 6.0 25.3 30.2 43.0
EPS growth (%) (21.7%) (77.3%) 317.8% 19.4% 42.6%
P/E (x) 11.0 48.6 11.6 9.7 6.8
Core EPS (sen) 23.9 6.0 25.3 30.2 43.0
Core EPS growth (%) (21.7%) (74.7%) 317.8% 19.4% 42.6%
Stock Information
Core P/E (x) 12.3 48.6 11.6 9.7 6.8
Market cap: RM1,537m/US$490m FD core EPS (sen) 15.9 4.0 16.8 20.1 28.7
12-m price range: RM3.35 FD core P/E (x) 18.4 72.9 17.5 14.6 10.3
RM2.25 Gross DPS (sen) 12.0 6.0 14.0 17.0 23.0
No. of shrs (m): 523 P/BV (x) 1.7 1.7 1.6 1.4 1.3
Conv. secs (m): 261.4 Net gearing (%) 109.0% 93.5% 81.7% 68.5% 50.9%
Major shareholders (%): P/FCFE (x) 30.1 598.0 8.6 151.8 16.0
- Ann Joo Corporation 62.2 EV/EBITDA (x) 16.7 23.3 9.6 8.2 5.9
- Lembaga Tabung Haji 5.1 % change in EPS estimates N/A N/A N/A
- Seng Lim Chee 1.1 CIMB/Consensus (x) 0.89 0.89 1.12

3.5
Ann Joo Resources started out as a scrap metal dealer in 1946. It was listed on the
2.50
3.3
2.00
Main Board in Nov 1996. The group is primarily engaged in the manufacturing and
3.1
2.9 1.50
trading of steel and steel-related products and is now one of Malaysia’s largest steel
2.7
1.00 manufacturers, stockists and traders of steel products. It also operates service
2.5
2.3
0.50 centres. Its plant in Prai, Penang has a total annual rated steel manufacturing
2.1
0.00
capacity of 680,000 mt and a total annual rated steel rolling capacity of 630,000 mt of
Volume 1m (R.H.Scale) Ann Joo Resources steel bars and wire rods. The group’s products are primarily used in construction.
Source: Bloomberg

Financial tables

Revenue 2,222 1,303 1,900 2,046 2,293 Revenue growth (%) 14.1 (41.4) 45.8 7.7 12.1
Operating expenses (2,068) (1,199) (1,654) (1,765) (1,923) EBITDA growth (%) (42.1) (32.5) 137.1 14.1 31.9
Net interest & invt income (22) (17) (7) (1) 1 Effective tax rates (%) N/A 15.2 25.0 25.0 25.0
Exceptional items 14 0 0 0 0 Debtors turnover (days) 29.7 38.8 31.6 36.1 35.4
Tax 29 (6) (45) (54) (77)
Minority interests (9) 1 (3) (4) (6)
Net profit 139 32 132 158 225
Adj. wt. shares (m) 523 523 523 523 523

Fixed assets 718 823 983 969 955 Sales volume ('000 tonnes) 732 804 846 919
Intangible assets 10 9 9 9 9 Average price/tonne (RM ) 2,000 2,125 2,200 2,300
Other long-term assets 87 80 78 176 124 Exchange rate (RM to US$) 3.51 3.02 3.05 3.05
Total non-current assets 815 912 1,070 1,153 1,088
Cash and equivalents 41 35 180 147 179
Stocks 995 882 760 716 803
Trade debtors 143 134 195 210 235
Total current liabilities 926 1,026 1,127 1,060 1,002
Shareholders’ funds 886 907 984 1,075 1,210
NTA/share (RM) 1.68 1.72 1.86 2.04 2.30

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 28.0
Pretax profit 120 36 180 216 308
26.0
Depreciation & non–cash adj. 26 50 59 64 63
24.0
Working capital changes (162) 155 120 44 (88)
Cash tax paid (94) 64 (6) (45) (54) 22.0
Others 27 (21) (52) (123) 16 20.0

Cash flow from operations (82) 284 301 156 246
18.0
Capex (286) (131) (220) (50) (50)
16.0
Others 0 0 4 5 (11) 14.0
Cash flow from investing (265) (119) (216) (45) (61) 12.0
Debt raised/(repaid) 421 (145) 101 (100) (90) 10.0
Equity raised/(repaid) (25) (14) 0 0 0
8.0
Cash interest & others (28) (3) (10) (1) 1
Cash flow from financing 291 (174) 59 (143) (153)
Change in cash (57) (9) 144 (33) 32
Change in net cash/(debt) (478) 136 43 67 121

MALAYSIA
Asia File Corporation RM4.45 @07/12/10
File is at the right location Target: RM6.36
Retail
AF MK / AFCB.KL Nigel Foo +60(3) 2084 9293 – nigel.foo@cimb.com
• Maintain OUTPERFORM. Asia File remains an OUTPERFORM, with an

unchanged target price of RM6.36 as we continue to value it at a 30% discount to
our regional sector P/E target of 13x. Potential share price triggers include i) more
orders from US and EU customers, ii) signs of economic recovery in Europe and iii)
its attractive gross dividend yield of about 7%.
• Europe remains largest market. Europe remains Asia File’s main market,
contributing around 60-70% of its revenue. In FY10, it was 63%. Europe became its
dominant market for Asia File after the company acquired Plastoreg in 2008. Most
of Plastoreg’s business was from Europe when Asia File acquired this company.
• Change in business model in Europe. Plastroreg has changed the group’s
business model in Europe, from that of an exporter to a major distributor in Europe.
Europe is now reachable in just two days by truck from Plastoreg’s operations and
warehouse in west and east Germany.
• World’s largest OEM producer of dividers. With Plastoreg under its umbrella,
Asia File is the world’s largest OEM producer of dividers and indices. This
dominance has helped the company make headway with major stationery suppliers
in the US and Europe over the past few years as customers seek larger established
suppliers with extensive distribution networks. In addition, Asia File is able to offer
quality products at competitive prices in view of its low cost base in Asia.
• Strong balance sheet offers opportunities. Asia File’s balance sheet remains
strong with RM39m (RM0.34/share) net cash. This will give the group the capacity
to acquire financially troubled stationery companies with strong distribution
networks in the US and Europe if the opportunity arises.
Financial summary
FYE Mar 2009 2010 2011F 2012F 2013F
Revenue (RM m) 298.4 267.5 296.7 326.3 359.0
EBITDA (RM m) 52.9 63.1 74.9 84.8 91.4
EBITDA margins (%) 17.7% 23.6% 25.2% 26.0% 25.5%
Stock Information Net profit (RM m) 72.8 57.7 66.1 75.1 80.1
EPS (sen) 64.5 51.2 58.6 66.6 71.0
Market cap: RM514m/US$164m EPS growth (%) 78.9% (20.7%) 14.6% 13.6% 6.6%
12-m price range: RM5.26 P/E (x) 6.9 8.7 7.6 6.7 6.3
RM4.23 Gross DPS (sen) 25.3 27.8 32.7 32.7 32.7
No. of shrs (m): 115 P/BV (x) 1.8 1.6 1.4 1.2 1.1
Conv. secs (m): None Net cash per share (RM) 0.01 0.22 0.44 0.85 1.18
Major shareholders (%): P/FCFE (x) (28.8) 11.0 14.0 7.0 7.9
- Prestige Elegance S/B 45.5 EV/EBITDA (x) 9.5 7.6 6.0 4.8 4.0
- PNB 13.5 % change in EPS estimates - - -
- ASB 13.2 CIMB/Consensus (x) 0.99 0.99 1.00

5.6
3.00
Asia File Corp is Malaysia's largest integrated stationery and office supplies
5.4
5.2 2.50 manufacturer and distributor, selling under the "ABBA" brand. Its HQ and
5.0
4.8
2.00 manufacturing base is in Penang, Malaysia. It also operates major warehouses in
4.6
1.50
1.00
Puchong, the Klang Valley and Basingstoke, UK. The US and UK are its largest
4.4
4.2 0.50 export markets, taking up more than 70% of its sales. Acquisition of Plastoreg,
4.0
0.00
Europe's largest OEM producer of dividers and indices, has transformed Asia File into
Volume 100k (R.H.S c a le ) As ia File Corpora tion the world’s largest OEM producer of indices and dividers. It also makes Asia File a
Source: Bloomberg major stationery distributor in Europe and not just an export player.

Financial tables

Revenue 298 268 297 326 359 Revenue growth (%) 43.2 (10.4) 10.9 10.0 10.0
EBIT 47 56 68 78 84 Interest cover (x) N/A N/A N/A N/A N/A
Net interest & invt income 2 (1) 2 1 1 Effective tax rates (%) 4.7 12.6 18.0 17.5 18.0
Associates’ contribution (1) 10 11 13 13 Net dividend payout (%) 27.9 38.6 39.6 34.9 32.7
Tax (4) (8) (15) (16) (18)
Net profit 73 58 66 75 80
Adj. wt. shares (m) 113 113 113 113 113

(RM m, end Mar) 2009 2010 2011F 2012F 2013F (FYE Mar) 2010 2011F 2012F 2013F
Fixed assets 104 98 112 128 144 Exchange rate (Euro/USD) 1.40 1.35 1.35 1.35
Intangible assets 30 30 30 30 30 Raw materials as % of op costs 70.0% 70.0% 70.0% 70.0%
Other long-term assets 95 105 105 105 105 Total sales growth (% yoy) -10.0% 11.0% 10.0% 10.0%
Total non-current assets 230 233 247 263 279
Stocks 54 59 66 49 54
NTA/share (RM) 2.18 2.55 2.91 3.32 3.80

(RM m, FYE Mar) 2009 2010 2011F 2012F 2013F 16.0
15.0
14.0
Working capital changes (17) (15) (1) 15 0
Cash tax paid (4) (8) (15) (16) (18) 13.0
Others 11 (3) (11) (15) (13) 12.0

Cash flow from operations 73 46 61 82 74 11.0
Capex (44) (1) (10) (10) (10)
10.0
Others (31) 0 0 0 0 9.0
Debt raised/(repaid) (15) 0 (15) 0 0 7.0
6.0
Cash interest & others (1) 0 0 0 0
Cash flow from financing (37) (21) (41) (26) (26)
Change in cash (39) 24 10 46 38
Ending net cash/(debt) 1 25 50 96 133

MALAYSIA
Axiata Group Berhad RM4.67 @07/12/10
A one-stop Asian telco shop Target: RM5.90
Telecommunications - Mobile
AXIATA MK / AXIA.KL Kelvin Goh CFA +60(3) 2084 9699 – kelvin.goh@cimb.com
• Still an OUTPERFORM. Axiata remains an OUTPERFORM on the back of its

modest EPS growth, rising FCFE yield and strengthening balance sheet. We expect
its units in the Indian-subcontinent to take over the reins of growth as its assets in
Malaysia and Indonesia mature. Celcom’s and XL’s earnings should also be lifted
by operating leverage. We maintain our SOP-based target price of RM5.90 and
continue to rate Axiata as our top pick for exposure to the regional telcos. Likely re-
rating catalysts are positive earnings and dividend surprises.
• Tilting towards growth. With margin reaching its highest ever, Axiata has shifted
its focus from margin expansion towards growth. The telco is looking to be more
aggressive to cement longer-term revenue growth even at the expense of margins.
• More cost efficiency. Celcom’s proposed network sharing with DiGi should deliver
opex savings of RM100m-150m p.a. and enhance FY12 group earnings by 2-3%.
Celcom expects savings to kick in from FY12.
• Dividend upside. While we understand that Axiata plans to have a “conservative”
balance sheet to be prepared for any potential M&A, we believe there is upside to
its 30% dividend payout after FY11 because of very strong FCF generation. XL and
Dialog have joined Celcom and M1 in the positive FCFE camp.
• Key concerns. Our main concerns are 1) rising competition in Malaysia from YTL
Communications, especially in the large screen data segment, 2) regulatory risks,
especially in India, and 3) potential selldown by Khazanah and Telekom Malaysia.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 11,347.7 13,105.5 15,744.0 17,174.5 18,426.8
EBITDA (RM m) 4,541.8 5,156.7 7,165.5 7,812.8 8,349.2
EBITDA margins (%) 40.0% 39.3% 45.5% 45.5% 45.3%
Pretax profit (RM m) 905.8 2,666.2 4,181.2 4,836.1 5,287.6
Net profit (RM m) 444.2 1,652.7 2,745.4 3,075.5 3,303.7
EPS (sen) 8.1 22.9 32.5 36.4 39.1
EPS growth (%) (76.2%) 183.9% 42.1% 12.0% 7.4%
P/E (x) 57.9 20.4 14.4 12.8 11.9
Stock Information Core EPS (sen) 19.7 15.6 32.5 36.4 39.1
Core EPS growth (%) (33.8%) (20.8%) 108.5% 12.0% 7.4%
Market cap: RM39,439m/US$12,572m Core P/E (x) 23.7 30.0 14.4 12.8 11.9
12-m price range: RM4.74 Gross DPS (sen) 0.0 0.0 10.0 11.0 12.0
RM3.01 Dividend yield (%) 0.0% 0.0% 2.1% 2.4% 2.6%
3-m avg daily vol: 14.8m P/BV (x) 2.3 2.2 2.0 1.8 1.6
No. of shrs (m): 8,445 ROE (%) 4.2% 11.2% 14.3% 14.5% 14.1%
Est. free float (%): 38.2 Net gearing (%) 142.7% 54.6% 26.3% 10.7% N/A
Conv. secs (m): None Net cash per share (RM) N/A N/A N/A N/A 0.09
Major shareholders (%): P/FCFE (x) 22.3 (5.1) 12.0 10.2 9.3
- Khazanah 44.5 EV/EBITDA (x) 9.4 8.7 6.4 5.6 4.9
- Employees Provident Fund 9.4 % change in EPS estimates - - -
- Amanah Saham Bumi 7.9 CIMB/Consensus (x) 0.98 0.99 0.93

4.8
0.60
A spin-off of Telekom Malaysia's domestic mobile and foreign assets, Axiata Group
0.50
4.3 0.40
has stakes in mobile operators in some of the largest, fastest-growing countries in
3.8
0.30
Asia – 100% of Malaysia’s Celcom, 66.5% of Indonesia’s XL Axiata, 84.7% of Sri
0.20 Lanka’s Dialog, 70% of Bangladesh’s Robi, 100% of Cambodia’s Hello, 19.3% of
3.3
0.10 India’s Idea Cellular and 29.7% of Singapore’s M1. Axiata's units have a strong
2.8
0.00
foothold in these markets, mostly ranking in the top 3. It plans to dispose of its non-
Volume 100m (R.H.S ca le ) Axia ta Group Be rha d
mobile assets. Axiata was formerly known as TM International.
Source: Bloomberg

Financial tables

EBITDA 4,542 5,157 7,165 7,813 8,349 Pretax margins (%) 8.0 20.3 26.6 28.2 28.7
Depreciation & amortisation (2,338) (2,860) (3,160) (3,270) (3,346) Net profit margins (%) 3.9 12.6 17.4 17.9 17.9
EBIT 2,203 2,296 4,006 4,543 5,003 Interest cover (x) 2.5 2.6 5.6 6.9 7.6
Net interest & invt income (598) (319) (89) (6) (93) Effective tax rates (%) 48.0 34.1 25.9 25.8 26.0
Exceptional items (640) 587 0 0 0 Debtors turnover (days) 39.3 43.2 39.8 41.6 41.9
Pretax profit 906 2,666 4,181 4,836 5,288 Creditors turnover (days) 136.5 122.6 102.7 102.2 103.3
Tax (435) (910) (1,083) (1,247) (1,377)
Net profit 444 1,653 2,745 3,075 3,304
Adj. wt. shares (m) 5,511 7,223 8,445 8,445 8,445

Fixed assets 14,960 15,815 16,183 16,164 16,054 Mobile subscribers (m) - Malaysia 10.15 10.75 11.23 11.71
Intangible assets 8,326 8,563 8,563 8,563 8,563 Blended mobile ARPU (RM) 54.3 51.9 51.2 49.7
Other long-term assets 8,990 9,068 7,068 7,068 7,068 Prepaid ARPU (local currency) 43.0 40.9 38.8 37.6
Total non-current assets 32,275 33,447 31,815 31,796 31,686 Postpaid ARPU (local currency) 98.0 93.1 91.2 88.5
Cash and equivalents 3,331 2,006 5,303 8,334 11,663 Mobile subscribers (m) - Indonesia 31.4 37.6 42.5 47.4
Stocks 77 35 42 46 50 Postpaid ARPU (Rp'000) 167.0 158.7 150.7 146.2
Trade debtors 1,540 1,559 1,873 2,043 2,192 Prepaid ARPU (Rp'000) 34.0 33.3 32.0 31.0
Trade creditors 4,538 4,263 4,601 5,021 5,405
Short-term borrowings 9,477 2,149 2,149 2,149 2,149
Other current liabilities 195 221 1,045 1,144 1,212
Other long-term liabilities 898 1,457 1,457 1,457 1,457
Minority interests 481 696 1,049 1,563 2,170
NTA/share (RM) 0.52 1.14 1.37 1.62 1.90

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 906 2,666 4,181 4,836 5,288 28.0
Depreciation & non–cash adj. 2,338 2,860 3,160 3,270 3,346
Working capital changes (48) (253) 17 246 232
Cash tax paid (435) (910) (1,083) (1,247) (1,377) 23.0
Others (374) 273 89 6 93
Cash flow from operations 2,388 4,636 6,364 7,111 7,581
Capex (5,324) (3,290) (3,528) (3,251) (3,236) 18.0
Net investments & sale of FA 0 0 2,000 0 0

Others (6,238) 97 0 0 0
Debt raised/(repaid) 10,928 (7,700) (1,450) 0 0

Equity raised/(repaid) 0 5,345 0 0 0
8.0
Dividends paid 0 90 0 (824) (923) Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10
Cash flow from financing 10,330 (2,584) (1,539) (829) (1,016)
Change in cash 1,156 (1,140) 3,297 3,030 3,329
Change in net cash/(debt) (9,772) 6,560 4,747 3,030 3,329
Ending net cash/(debt) (16,692) (10,317) (5,570) (2,539) 790

MALAYSIA
NEUTRAL Maintained
Berjaya Sports Toto Bhd RM4.25 @07/12/10
Betting on yields Target: RM4.67
Gaming
BST MK / BSTB.KL Ivy Ng Lee Fang CFA +60(3) 2084 9697 – ivy.ng@cimb.com
• Staying NEUTRAL on B-Toto. B-Toto is a NEUTRAL in our books given i) the

limited re-rating catalysts, ii) competitive threat from Magnum’s 4D Jackpot game
and iii) expectations of a relatively muted net earnings impact even if the authorities
approve the lowering of prize payouts after Jul 10’s betting duty hike. However, its
gross dividend yields of 6-7% should appeal to investors who want a defensive
play. We retain our end-CY11 DDM-based target price of RM4.67.
• Leadership being whittled down. Although we expect B-Toto to retain its market
leadership in 2011 due to decent punting interest in its flagship 4D game and the
recent addition of the 6/58 Power Toto lotto variant with a minimum RM8.88m
jackpot, we expect its market leadership to be reduced given the strength of interest
in Magnum’s 4D Jackpot game. Because of this and the maturity of the NFO
market, we see some downside risk to our flat to +3% annual topline growth
projections for B-Toto for FY11-13.
• Lower prize payout offers relief. That said, we take comfort in the recent approval
of a cut in prize monies for the 4D big game from RM200 to RM180 per RM1 bet
effective 15 Dec 10. A cut in prize money should help preserve B-Toto’s profit
margins following the 2% pt hike in pool betting duty on 1 Jun 10.
• But still an attractive dividend play. These negatives are cushioned by the
stock’s dividend yield in excess of 6%, which is supported by its minimum 75%
formal dividend payout policy. Within the Berjaya group of companies, B-Toto still
stands out as a key cash cow with probably the best dividend prospects.
Financial summary
FYE Apr 2009 2010 2011F 2012F 2013F
Revenue (RM m) 3,695.7 3,392.3 3,503.7 3,578.0 3,578.0
EBITDA (RM m) 613.0 578.1 521.8 556.1 557.3
EBITDA margins (%) 16.6% 17.0% 14.9% 15.5% 15.6%
Net profit (RM m) 413.6 381.7 332.2 372.9 374.8
EPS (sen) 30.6 28.3 24.6 27.6 27.7
Stock Information EPS growth (%) 18.6% (7.7%) (13.0%) 12.2% 0.5%
Market cap: RM5,742m/US$1,830m P/E (x) 13.9 15.0 17.3 15.4 15.3
No. of shrs (m): 1,351 ROE (%) 102.0% 82.4% 63.9% 58.9% 53.0%
Est. free float (%): 35.0 Net gearing (%) 5.2% 40.5% 9.4% N/A N/A
Conv. secs (m): None Net cash per share (RM) N/A N/A N/A 0.02 0.08
- Berjaya Land 43.5 EV/EBITDA (x) 9.4 10.3 11.1 10.3 10.1
- Bank Sarasin-Rabo (Asia) 3.1 % change in EPS estimates - - -
- AIA Bhd 1.9 CIMB/Consensus (x) 0.88 0.94 0.91

4.8
1.80
1.60
Berjaya Sports Toto (B-Toto) is part of the Berjaya Group which is owned by Tan Sri
4.6
1.40 Dato’ Seri Vincent Tan. B-Toto has stamped its presence in number forecast
1.20
4.4 1.00 operations (NFO) by offering the highest number of games among its legal peers –
4.2
0.80
0.60
three NFO games (4D, 5D, 6D) and three lotto games (6/52 Mega Jackpot, 6/55
4.0
0.40
0.20
Power Toto and 6/58 Supreme Toto). Supreme Toto is a new game which recently
3.8
0.00
replaced the Toto 6/49 lotto variant. B-Toto remains the leading NFO player in
Volume 10m (R.H.S ca le ) Be rja ya S ports Toto Bhd Malaysia with an estimated 40% share of the legal NFO market.
Source: Bloomberg

Financial tables

(RM m, FYE Apr) 2009 2010 2011F 2012F 2013F (FYE Apr) 2009 2010 2011F 2012F 2013F
Operating expenses (3,083) (2,814) (2,982) (3,022) (3,021) EBITDA growth (%) 15.6 (5.7) (9.7) 6.6 0.2
Exceptional items 0 0 (8) 0 0 Debtors turnover (days) 6.7 8.2 10.4 10.5 11.2
Tax (164) (160) (138) (147) (148)
Net profit 414 382 332 373 375
Adj. wt. shares (m) 1,351 1,351 1,351 1,351 1,351

(RM m, end Apr) 2009 2010 2011F 2012F 2013F (FYE Apr) 2010 2011F 2012F 2013F
Fixed assets 98 98 96 95 93 Revenue growth (%) -8.3% 3.3% 2.1% 0.0%
Intangible assets 618 644 644 644 644 Revenue per draw day (RM m) 19.17 20.50 20.94 20.94
Other long-term assets 95 111 101 91 81 Prize payout ratio (%) 64.0% 64.0% 63.4% 63.4%
Total non-current assets 812 852 841 830 818 No. of outlets 680 680 680 680
Stocks 7 9 9 9 9
Trade debtors 49 104 96 109 109
NTA/share (RM) (0.10) (0.15) (0.04) 0.02 0.07
CASH FLOW CURRENT P/BV(X)

(RM m, FYE Apr) 2009 2010 2011F 2012F 2013F
Pretax profit 586 546 475 524 527 20.40

Working capital changes 13 (35) 12 (14) 1 18.40
Cash tax paid (144) (160) (160) (138) (147)
Others 27 78 170 (3) (5)
16.40
Capex (24) (15) (16) (17) (18)
Net investments & sale of FA (12) 1 10 10 10 14.40
Others 0 (93) 0 0 0
Debt raised/(repaid) (97) 187 178 (31) (30)
Equity raised/(repaid) 0 (35) 0 0 0
10.40
Change in cash 111 26 308 50 53
Change in net cash/(debt) 208 (161) 130 81 83
Ending net cash/(debt) (26) (187) (57) 24 106

MALAYSIA
NEUTRAL Maintained
Bintulu Port Holdings Bhd RM6.60 @07/12/10
A dividend play Target: RM6.95
Ports
BPH MK / BPOT.KL Loke Wei Wern +60 (3) 2084 9946 – weiwern.loke@cimb.com
• Maintain NEUTRAL. Bintulu Port’s key appeal lies in its relatively stable income
stream which helps support its attractive gross yields of 7-8%. On a more macro
level, the continued economic growth and newsflow on the rollout of new projects
within the Sarawak Corridor of Renewable Energy (Score) should provide some
excitement to the stock. But Bintulu Port is trading at premium valuations of 17.6x
forward P/E and 3.2x P/BV. Low liquidity is another dampener. We remain
NEUTRAL on the stock with an unchanged DCF-based target price of RM6.95. We
prefer Malaysia Airports (MAHB MK, Outperform) for exposure to the transport
infrastructure sector.
• Economic growth bodes well for port activities. Our economics team is
projecting GDP growth of 5.5% for 2011, which bodes well for port activities. While
liquefied natural gas (LNG) cargo should remain relatively stable due to the long-
term nature of the contracts, potential upside could come from non-LNG cargo as
internal and external demand increases on the back of a pickup in economic
activities.
• Still very much a dividend play. While new projects under Score could provide a
kicker to Bintulu Port’s earnings, we do not expect contribution from this corridor to
be significant yet. But in the longer run, Bintulu Port stands to gain from the import
and export requirements of the new industries. For now, earnings should remain
largely stable, underpinned by the LNG cargo. The stock’s key appeal lies in its
attractive gross yields of 7-8% which should provide support to its share price.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 448.8 439.0 472.9 501.8 517.9
EBITDA (RM m) 213.9 187.2 215.4 234.0 245.4
EBITDA margins (%) 47.7% 42.6% 45.5% 46.6% 47.4%
Net profit (RM m) 150.6 128.8 143.0 150.2 157.1
Stock Information
EPS (sen) 37.7 32.2 35.8 37.5 39.3
Market cap: RM2,640m/US$839m EPS growth (%) 11.0% (14.5%) 11.1% 5.0% 4.6%
RM6.18 Gross DPS (sen) 55.0 50.0 55.0 55.0 55.0
No. of shrs (m): 400 P/BV (x) 3.0 3.1 3.2 3.2 3.3
- Petroliam Nasional Bhd 32.8 EV/EBITDA (x) 10.2 12.4 11.2 10.5 10.0
- State Financial Secretary 30.7 % change in EPS estimates - - -
- KWAP 9.5 CIMB/Consensus (x) 0.97 0.98 0.95

7.4
Bintulu Port Holdings, through Bintulu Port Sdn Bhd, has been the operator for Bintulu
7.2
7.0
10.00
Port since 1993. Besides being the sole export gateway for liquefied natural gas in
8.00
6.8
6.6 6.00
Malaysia and a leading container hub in East Malaysia, the port is also equipped to
6.4
4.00
handle other types of cargo including dry, liquid and break bulk cargo. Strategically
6.2
6.0
2.00 located in the BIMP-EAGA region, it is well-positioned to serve Malaysia’s major LNG
5.8
0.00
exports, the resource-rich Sarawak hinterland as well as the increasing activity in that
Volume 100k (R.H.S ca le ) Bintulu P ort Holding s Bhd region. Bintulu Port’s subsidiary, Biport Bulkers Sdn Bhd, provides bulking installation
Source: Bloomberg facilities for palm oil, edible oil, vegetable oil and its by-products.

Financial tables

Operating expenses (235) (252) (258) (268) (272) EBITDA growth (%) 9.8 (12.5) 15.0 8.6 4.9
Net interest & invt income 20 18 12 9 8 Effective tax rates (%) 26.8 25.8 25.0 25.0 25.0
Tax (55) (45) (48) (50) (52)
Net profit 151 129 143 150 157
Adj. wt. shares (m) 400 400 400 400 400

Fixed assets 516 617 683 721 719 LNG throughput (m'tonnes) 22.8 23.7 23.9 23.9
Intangible assets 15 13 12 10 8 Avg tariff/LNG vessel call (RM'000) 720.7 720.7 720.7 720.7
Other long-term assets 1 1 1 1 1 Containers handled (TEUs) 261,150 308,510 323,935 340,132
Stocks 0 0 0 0 0
NTA/share (RM) 2.17 2.08 2.03 2.01 2.00

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 20.0
Pretax profit 206 174 191 200 209
19.5
19.0
Working capital changes 30 (31) (1) 2 1
Cash tax paid (46) (40) (48) (50) (52) 18.5
Others (38) (27) (12) (9) (8) 18.0

17.5
Capex (51) (131) (100) (80) (40)
17.0
Others 23 41 0 0 0 16.5
Debt raised/(repaid) 0 0 0 0 0
15.5
15.0
Cash interest & others 0 (14) 12 9 8
Change in cash (11) (145) (84) (48) (1)
Change in net cash/(debt) (11) (145) (84) (48) (1)

MALAYSIA
British American Tobacco Bhd RM45.48 @07/12/10
Feeling the drag Target: RM44.00
Tobacco
ROTH MK / BATO.KL Loke Wei Wern +60 (3) 2084 9946 – weiwern.loke@cimb.com
• Maintain UNDERPERFORM. In 2011, British American Tobacco (BAT) will have to

grapple with the margin erosion from the ban on small packs, the high level of illicit
trade, and a potential decline in demand due to the hefty price hike of 8-9% in
October. Given the challenging operating terrain and unexciting growth prospects,
we see little room for share price appreciation. This explains our decision to keep
the stock as an UNDERPERFORM. Potential de-rating catalysts are 1) more
regulatory negatives, 2) growth in illicit trade, and 3) market share loss to rival JT
International (RJR MK, Neutral).
• Full-year impact of ban on small packs. The biggest hurdle for BAT is the
potential loss of margins due to the ban on small packs. Although it has quite
successfully migrated smokers of its packs of 14 to the 20s pack, margins should
still be under pressure as small packs have a higher per stick pricing. But this
should be partially compensated by cost savings arising from the company’s blend
optimisation initiatives.
• Still No. 2 in the value segment. Pall Mall’s market share loss has relegated BAT
to the second spot in the value-for-money (VFM) segment. Although it will continue
investing in brand promotional activities to claw back market share and it recently
relaunched Peter Stuyvesant as a VFM brand, competition from rival brand Winston
is unlikely to dissipate anytime soon.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 4,135.2 3,923.4 3,951.2 4,095.7 4,142.3
EBITDA (RM m) 1,182.3 1,108.9 1,080.8 1,110.2 1,132.8
EBITDA margins (%) 28.6% 28.3% 27.4% 27.1% 27.3%
Pretax profit (RM m) 1,081.2 1,005.3 973.2 999.2 1,021.8
Net profit (RM m) 811.8 746.8 729.9 749.4 766.3
Stock Information
EPS (sen) 284.3 261.5 255.6 262.5 268.4
Market cap: RM12,986m/US$4,127m EPS growth (%) 10.9% (8.0%) (2.3%) 2.7% 2.3%
RM41.60 Gross DPS (sen) 361.0 314.7 315.0 325.0 330.0
No. of shrs (m): 286 P/BV (x) 31.9 29.6 24.8 22.5 20.4
- BAT BV 50.0 EV/EBITDA (x) 11.5 12.1 12.5 12.1 11.7
- PNB 6.1 % change in EPS estimates - - -
- Lazard Asset Management 2.5 CIMB/Consensus (x) 1.01 1.03 1.04

51.5 5.00
50% owned by British American Tobacco BV, British American Tobacco (BAT)
49.5
4.00
manufactures and markets tobacco products in Malaysia. It is the result of the merger
47.5
3.00 of Rothmans of Pall Mall and Malaysia Tobacco Company (MTC) in 1999. With about
45.5
43.5
2.00 63% market share, BAT is the clear leader in the industry, followed by JT International
41.5 1.00 and Philip Morris. Its portfolio includes Dunhill, Pall Mall, Peter Stuyvesant and
39.5
De c -09 Ma y-10 Oct-10
0.00
Benson and Hedges. Dunhill is the dominant brand in the premium cigarette segment
Volume 100k (R.H.S ca le ) Britis h Ame rica n Toba cco Bhd and accounts for close to an estimated 72% of BAT’s total sales. In the value-for-
Source: Bloomberg money (VFM) space, BAT is the No. 2 player after JT International.

Financial tables

EBIT 1,102 1,028 994 1,020 1,039 Interest cover (x) 39.2 36.9 34.0 34.9 35.5
Pretax profit 1,081 1,005 973 999 1,022 Creditors turnover (days) 22.8 23.5 21.1 21.6 21.9
Tax (269) (259) (243) (250) (255)
Net profit 812 747 730 749 766
Adj. wt. shares (m) 286 286 286 286 286

Fixed assets 459 431 477 447 413 Industry volume growth (% growth) -11.5% -3.0% -5.0% 0.0%
Intangible assets 412 412 412 412 412 Excise duties (RM per kg) 190.00 220.00 220.00 220.00
Other long-term assets 20 47 47 47 47 Sales tax (%) 5.0% 5.0% 5.0% 5.0%
Stocks 225 214 252 261 264
Trade debtors 258 165 192 199 202
NTA/share (RM) (0.02) 0.10 0.39 0.58 0.79

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 19.0
Pretax profit 1,081 1,005 973 999 1,022
18.5
18.0
Working capital changes 2 37 (46) (8) (2)
Cash tax paid (251) (269) (259) (243) (250) 17.5
Others 42 70 177 (11) 9 17.0

16.5
Capex (102) (107) (60) (60) (60)
16.0
Others 8 5 5 5 5 15.5
Debt raised/(repaid) (100) 0 0 0 0
14.5
14.0
Change in cash (11) 113 9 77 93
Change in net cash/(debt) 89 113 9 77 93

MALAYSIA
NEUTRAL Maintained
Bursa Malaysia Bhd RM7.96 @07/12/10
Taking stock of the swift growth Target: RM8.64
Stockbroking & Exchanges
BURSA MK / BMYS.KL Winson Ng Gia Yann CFA +60(3) 2084 9686 – winson.ng@cimb.com
• Retain NEUTRAL. With our EPS forecasts and target price of RM8.64 unchanged,
we maintain our NEUTRAL call on Bursa as the anticipated strong earnings growth
in FY11 has been priced in given the high FY12 P/E of 24.9x. Although we expect
velocity to pick up to 35% in 2011, it will still be lower than the average of 40%
registered in 2007-09. For exposure to equity market, we prefer AMMB Holdings
which derives about 3% of its revenue from brokerage income, the highest
percentage among the banking groups.
• Equity-driven earnings growth. We envisage a 28.6% jump in FY11 EPS,
primarily driven by higher equity income due to the continuing inflow of foreign
funds. Equity income is projected to surge 33.5% to RM178.7m in FY11 as a result
of an assumed 10% rise in market capitalisation and an increase in velocity from
32% in 2010 to 35% in 2011.
• Improving derivative income. Derivative income should be on the rise as Bursa’s
tie-up with Chicago Mercantile Exchange (CME) to promote its derivative products
in the international market will start to bear fruit. We are forecasting a 20.1% jump in
derivative income to RM63.7m in FY11.
• Retain earnings forecasts and target price. We retain our earnings forecasts and
target price of RM8.64, pegged to an unchanged 27x target P/E or a 10% discount
to the stock’s 3-year historical average.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 302.3 297.6 301.9 357.6 391.0
EBITDA (RM m) 137.5 153.9 147.9 196.7 219.7
EBITDA margins (%) 45.5% 51.7% 49.0% 55.0% 56.2%
Net profit (RM m) 104.4 177.6 118.1 151.8 167.3
EPS (sen) 20.0 34.0 22.6 29.0 32.0
EPS growth (%) (56.7%) 70.1% (33.5%) 28.6% 10.2%
Stock Information P/E (x) 39.9 23.4 35.3 27.4 24.9
Core EPS (sen) 20.0 22.2 22.6 29.0 32.0
Market cap: RM4,230m/US$1,344m Core EPS growth (%) (56.7%) 11.1% 1.8% 28.6% 10.2%
RM6.78 Gross DPS (sen) 24.3 40.8 27.1 34.8 38.4
No. of shrs (m): 531 P/BV (x) 5.7 5.0 4.9 4.8 4.7
- Ministry of Finance Inc. 18.9 EV/EBITDA (x) 22.0 19.6 20.7 15.8 14.3
- Capital Market Development 18.9 % change in EPS estimates - - -
- Newton Investment 5.7 CIMB/Consensus (x) 0.91 1.00 0.97

8.9 7.00
Bursa Malaysia completed its demutualisation exercise on 5 Jan 2004 and was
8.4 6.00 converted from a non-profit entity limited by the guarantee of its members to a public
5.00
7.9
4.00
company limited by shares. It operates a fully integrated exchange, offering a full suite
7.4 3.00 of exchange-related services, organised under several business units (1) exchanges,
2.00
6.9
1.00
(2) clearing, settlement and depository and (3) information services. It currently
6.4
0.00
operates in a monopolistic environment with two different equity markets – Main and
Volume 1m (R.H.Scale) Bursa Malaysia Bhd ACE markets – and a derivative market. On 17 Sep 09, Bursa entered into a tie-up
Source: Bloomberg with CME to promote its derivative products (including CPO futures contracts) in the
international market.

Financial tables

Revenue 302 298 302 358 391 Revenue growth (%) (31.8) (1.6) 1.5 18.4 9.4
Operating expenses (165) (144) (154) (161) (171) EBITDA growth (%) (51.8) 11.9 (3.9) 33.0 11.7
EBIT 117 115 105 149 167 Interest cover (x) 167.1 191.7 N/A N/A N/A
Tax (41) (42) (37) (48) (53)
Net profit 104 178 118 152 167
Adj. wt. shares (m) 523 523 523 523 523

Fixed assets 254 243 248 253 258 Average daily value traded (RMm) 1,221 1,517 1,826 2,008
Intangible assets 45 43 43 43 43 Derivatives contract traded ('000) 25 28 34 41
Other long-term assets 166 242 250 258 267 Effective clearing rate (%) 3.4% 3.0% 3.4% 3.4%
Total non-current assets 464 528 541 554 568 Velocity (%) 34.0% 32.0% 35.0% 35.0%
Cash and equivalents 1,144 1,151 1,109 1,072 1,036 Total exchange market cap (RMbn) 999.0 1,138.1 1,251.9 1,377.1
Stocks 0 0 0 0 0 Price per unit of trade (RM) 1.36 1.33 1.35 1.34
NTA/share (RM) 1.31 1.52 1.55 1.59 1.62

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 146 219 155 200 220
Working capital changes 10 (13) 61 21 36

Cash tax paid (41) (42) (37) (48) (53) 39.0
Others (50) (74) (84) (91) (90)

Capex (36) (30) (90) (90) (90)
Net investments & sale of FA 33 6 20 13 16 29.0
Others 31 29 30 29 30
Cash flow from investing 28 5 (40) (47) (44)
24.0
19.0
Cash interest & others 10 0 (65) 25 (13)
Change in cash (33) 65 (73) (29) (42)
Change in net cash/(debt) (33) 65 (73) (29) (42)
Ending net cash/(debt) 1,144 1,151 1,109 1,072 1,036

MALAYSIA
NEUTRAL Maintained
Carlsberg Brewery (M) Bhd RM6.05 @07/12/10
Fizz from down south Target: RM6.70
Brewers
CAB MK / CBMS.KL Loke Wei Wern +60 (3) 2084 9946 – weiwern.loke@cimb.com
• Carlsberg Brewery remains a NEUTRAL. Carlsberg Brewery now has an

alternative channel to grow its earnings, i.e. via Carlsberg Singapore. While
Carlsberg Singapore’s commendable performance and the fairly strong volume
growth in Singapore’s malt liquor market (MLM) are encouraging, we think that the
benefits of the acquisition are mostly reflected in the share price, which has risen
43% relative to 29% for the KLCI since news of the acquisition broke. We,
therefore, maintain our NEUTRAL stance. However, our DDM-based target price is
raised from RM6.10 to RM6.70 after we lower our cost of equity from 9% to 8% for
a lower beta assumption of 0.6x (0.7x previously). Our FY10-12 earnings
projections are intact.
• Carlsberg Singapore to open up new growth channels. We have seen a jump in
Carlsberg Brewery’s earnings in 2010 following the completion of the acquisition of
Carlsberg Singapore. Given the increasingly saturated domestic market and the
dominance of its rival Guinness Anchor (GUIN MK; Neutral) in the local MLM,
Carlsberg Brewery’s access to the Singapore market will play an instrumental role
in the company’s growth, in our opinion.
• Improving growth prospects; decent dividend yields. The reprieve from an
excise duty hike in the latest Budget should pave the way for further volume growth.
Besides the company’s improving earnings growth prospects on the back of a more
favourable operating terrain, Carlsberg Brewery’s other key appeal is its decent
gross yield of 6%. In the absence of any major capex plans, the company should
have little difficulty keeping to its unofficial 50-70% net dividend payout this year.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 960.2 1,045.5 1,358.4 1,387.9 1,415.1
EBITDA (RM m) 114.9 117.6 196.5 202.7 215.8
EBITDA margins (%) 12.0% 11.2% 14.5% 14.6% 15.3%
EPS (sen) 24.9 24.9 42.9 46.2 49.8
Market cap: RM1,864m/US$594m EPS growth (%) (3.0%) 0.0% 72.3% 7.6% 7.8%
RM4.43 Gross DPS (sen) 12.5 20.5 35.0 37.0 39.0
No. of shrs (m): 308 P/BV (x) 3.9 3.6 3.3 3.0 2.7
Conv. secs (m): None Net cash per share (RM) 0.72 0.36 N/A 0.10 0.33
Major shareholders (%): P/FCFE (x) 20.9 (23.3) (19.1) 13.0 12.1
- Carlsberg Breweries A/S 51.0 EV/EBITDA (x) 14.1 14.6 9.5 8.9 8.0
- Kim Keow Chan 5.9 % change in EPS estimates - - -
- State Street Corp 0.7 CIMB/Consensus (x) 1.06 1.08 1.21

6.2
0.50
0.45
Carlsberg Brewery is Carlsberg Asia Pte Ltd’s 51%-owned subsidiary. It engages in
5.7
0.40
0.35
the production, marketing and distribution of beer, stout, shandy and non-alcoholic
0.30
0.25
beverages in Malaysia. Carlsberg holds an estimated 43% of the malt liquor market
5.2
0.20
0.15
with a range of products that include Carlsberg Green Label, Carlsberg Special Brew,
4.7 0.10
0.05
Skol and Tuborg Green. Although a dominant player in the beer segment, it remains a
4.2
0.00
distant second in the stout segment. In 2009, Carlsberg Brewery acquired Carlsberg
Volume 1m (R.H.S ca le ) Ca rls be rg Bre we ry (M) Bhd Singapore from parent Carlsberg A/S, thereby making the latter its wholly-owned
Source: Bloomberg subsidiary.

Financial tables

Revenue 960 1,045 1,358 1,388 1,415 Revenue growth (%) 7.0 8.9 29.9 2.2 2.0
Operating expenses (845) (928) (1,162) (1,185) (1,199) EBITDA growth (%) (0.2) 2.4 67.1 3.1 6.5
Net interest & invt income 7 3 (9) (1) 1 Effective tax rates (%) 24.9 25.2 22.2 22.4 22.5
Tax (25) (26) (38) (41) (44)
Minority interests 0 (1) (1) (1) (1)
Net profit 76 76 131 141 152
Adj. wt. shares (m) 306 306 306 306 306

Fixed assets 140 130 122 114 105 Excise duties (RM per litre) 7.40 7.40 7.40 7.40
Intangible assets 8 383 406 406 406 Sales tax (%) 5.0% 5.0% 5.0% 5.0%
Other long-term assets 23 32 32 32 32 Unit sales ('000 Hli) 642 660 670 686
Cash and equivalents 227 119 (24) 39 109
Stocks 66 59 76 78 79
Trade debtors 141 178 231 236 240
NTA/share (RM) 1.51 0.44 0.53 0.71 0.92

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 18.0
Pretax profit 101 103 169 183 197
Working capital changes 15 25 (195) (3) (3) 16.0

Cash tax paid (23) (34) (26) (38) (41)
Others (9) (6) 142 (8) (10) 15.0

14.0
Capex (12) (12) (12) (13) (13)
Net investments & sale of FA (11) (171) (199) 0 0 13.0
Others 4 (6) 0 0 0
12.0
10.0
Cash interest & others 0 0 3 (1) 1
Change in cash 10 (108) (143) 63 70
Change in net cash/(debt) 9 (110) (143) 64 70
Ending net cash/(debt) 221 110 (33) 31 102

MALAYSIA
Daibochi Plastic & Packaging RM2.45 @07/12/10
Stretching its client base Target: RM3.92
Packaging
DPP MK / DPPM.KL Nigel Foo +60(3) 2084 9293 – nigel.foo@cimb.com
• Reiterate OUTPERFORM with higher target price. We continue to rate Daibochi

an OUTPERFORM while upping our target price from RM3.72 to RM3.92 in line
with the revision in our CY12 target market P/E from 13.8x to 14.5x. We maintain
our valuation basis of 30% discount to the target market P/E. Factors that could
trigger a re-rating of the stock include a decline in raw material costs and new
contracts from major non-F&B companies. The share price is backed by the
attractive gross dividend yield of 9% for FY11.
• Defensiveness arises from F&B exposure. More than 90% of Daibochi’s revenue
is derived from the food & beverage sector, both domestic and export. Revenue
from this sector is stable, even in recessionary times. MNCs are the group’s main
customers and Nestle is its largest customer.
• Quarterly price revisions help sustain margins. Daibochi and its MNC
customers review the selling prices every quarter for changes in raw materials and
forex fluctuations. This enables Daibochi to pass on raw material cost increases to
its customers, allowing management to focus on its operations.
• Expand customer base. The company is looking to expand its customer base to
the non-F&B sector including electronics, healthcare and cigarette packaging.
Packaging for the electronics industry offers huge long-term growth potential.
Daibochi launched its electrostatic discharge (ESD) product called Tribosafe at the
Taiwan semiconductor exhibition last Sep. The product was co-developed with US-
based Lubizrol. Initial feedback has been positive and Daibochi recently secured its
first commercial sale to one of the world’s largest IC packing and testing
companies. The order was small but could be a major breakthrough for Tribosafe.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 217.2 221.8 245.8 282.8 311.1
EBITDA (RM m) 16.7 33.1 32.4 41.6 47.2
EBITDA margins (%) 7.7% 14.9% 13.2% 14.7% 15.2%
Net profit (RM m) 8.1 22.7 18.4 25.3 29.3
EPS (sen) 10.7 29.9 24.3 33.3 38.6
EPS growth (%) (6.9%) 180.2% (18.8%) 37.1% 16.0%
Stock Information
P/E (x) 23.0 8.2 10.1 7.4 6.3
Market cap: RM186m/US$59m Gross DPS (sen) 8.2 21.2 16.6 22.8 26.4
RM2.05 P/BV (x) 1.6 1.5 1.3 1.2 1.1
3-m avg daily vol: 0.1m ROE (%) 7.1% 18.4% 13.9% 17.1% 18.2%
No. of shrs (m): 76 Net gearing (%) 23.8% 11.8% 3.4% N/A N/A
Est. free float (%): 50.0 Net cash per share (RM) N/A N/A N/A 0.01 0.25
Conv. secs (m): None P/FCFE (x) 929.8 7.7 9.8 9.7 5.7
Major shareholders (%): EV/EBITDA (x) 12.8 6.1 5.9 4.5 3.6
- Low Chan Tian 11.7 % change in EPS estimates - - -
- Datuk Wong Soon Lim 6.5 CIMB/Consensus (x) 0.87 0.98 1.04

3.9
1.60 Daibochi Plastic is the country’s largest flexible packaging producer with an estimated
3.4
1.40
1.20
30% share of the domestic market. More than 90% of its customers are from the food
1.00 and beverage sector. This sector is generally resilient even during poor economic
2.9 0.80
0.60 conditions. 70% of the group’s revenue comes from MNCs and 40% of revenue
2.4 0.40
0.20
comes from export markets. Daibochi’s plants are located on 14 acres of industrial
1.9
0.00
land in Ayer Keroh, Melaka. Management and direction of the group is driven by its
Volume 1m (R.H.S ca le ) Da ibochi P la s tic & P a c ka g ing Bhd Managing Director Thomas Lim.
Source: Bloomberg

Financial tables

Revenue 217 222 246 283 311 Revenue growth (%) 7.3 2.1 10.8 15.1 10.0
Operating expenses (201) (189) (213) (241) (264) EBITDA growth (%) (4.6) 98.2 (2.1) 28.4 13.5
Tax (1) (4) (6) (8) (9)
Minority interests 0 0 0 0 (1)
Net profit 8 23 18 25 29
Adj. wt. shares (m) 76 76 76 76 76

Fixed assets 55 54 56 53 50 Capacity (tonnes p.a.) 20,000 20,800 22,000 22,000
Other long-term assets 41 29 38 38 38
Stocks 41 37 39 48 48
NTA/share (RM) 1.50 1.62 1.86 2.03 2.22

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 15.0
Working capital changes 4 0 2 (10) 0

11.0
Cash tax paid (1) (4) (6) (8) (9)
Others (2) (5) (1) 0 0
9.0
Capex (19) (5) (10) (6) (6) 7.0
Others 0 0 0 0 (1) 5.0

3.0
1.0
Cash interest & others 1 2 1 0 1
Change in cash (4) 13 10 6 18

MALAYSIA
Dialog Group Bhd RM1.60 @07/12/10
Tanking up in Pengerang Target: RM1.15
Oil & Gas - Equipment & Svs
DLG MK / DIAL.KL Norziana Mohd Inon +60(3) 2084 9645 – norziana.inon@cimb.com
• Maintain UNDERPERFORM. While we like certain aspects of Dialog, i.e. defensive

income from the 30%-owned Kertih facility and prudent management, valuations
are demanding, making Dialog the most expensive stock in our oil & gas portfolio.
We maintain our forecasts but raise our target price from RM1.10 to RM1.15,
pegged to our revised target market P/E of 14.5x (13.8x previously). Dialog remains
an UNDERPERFORM, with the potential downside triggers being 1) a slowdown in
engineering & construction (E&C) order book replenishment, and 2) delay in the
Pengerang project. Our top oil & gas pick is SapuraCrest.
• New capacity in Tanjung Langsat. Terminal 1 of the Tanjung Langsat terminal
(TLT) started its Phase 1 operations in Sep 09 with a capacity of 130,000m³. The
270,000m³ capacity in Phase 2 has been utilised since Apr 10. Dialog has started
work on the RM80m construction of Terminal 1’s Phase 3 (capacity: 80,000m³) and
RM180m construction of Terminal 2 (capacity: 180,000m³). The construction is
expected to be completed by end-CY11. Dutch trader Trafigura is both a partner
and a client, ensuring long-term commitment and consistent utilisation.
• Pengerang progress. In Jun 09, Dialog and the Johor state government signed an
MOU to set up an independent deepwater petroleum terminal in Pengerang. In Oct
10, the state government awarded Dialog exclusive rights to develop the terminal
for a 60-year period. We have yet to include its potential contribution in our
forecasts. Using the Kertih facility as guidance, we estimate that pretax contribution
from Pengerang may be no less than RM30m p.a. Dialog is now working on the
environmental assessment, which is slated to finish by early CY11.
Financial summary
FYE Jun 2009 2010 2011F 2012F 2013F
Revenue (RM m) 1,104.3 1,139.1 2,027.6 2,558.5 2,822.0
EBITDA (RM m) 105.5 130.7 148.3 170.1 185.0
EBITDA margins (%) 9.6% 11.5% 7.3% 6.7% 6.6%
Net profit (RM m) 92.2 116.1 130.6 150.2 164.7
EPS (sen) 4.7 5.9 6.6 7.6 8.3
Stock Information EPS growth (%) 17.6% 26.0% 12.5% 15.0% 9.7%
No. of shrs (m): 1,988 ROE (%) 19.7% 21.1% 20.1% 20.0% 19.0%
Est. free float (%): 58.8 Net cash per share (RM) 0.09 0.11 0.14 0.18 0.21
- Ngau Boon Keat 26.8 % change in EPS estimates - - -

1.7
1.6
Dialog has business interest in the upstream and downstream segments of the oil &
2.00
1.5 gas sector, locally and regionally. Its upstream activities include the provision of base
1.4 1.50
1.3 oil, a crucial element in drilling mud. Dialog is the sole supplier of Shell Sarapar base
1.2
1.1
1.00
oil in Malaysia and selected countries in the region including Thailand, Vietnam and
1.0
0.9
0.50
India. In the downstream segment, the group performs plant maintenance services,
0.8
0.00
runs four petrol stations and has a string of E&C projects. Above all, Dialog enjoys
Volume 10m (R.H.S ca le ) Dia log Group Bhd relatively comfortable contributions from the Kertih facility, which is now in the 11th
Source: Bloomberg year of a 20-year concession, and early contributions from TLT, which is on a 30-year
concession.

Financial tables

(RM m, FYE Jun) 2009 2010 2011F 2012F 2013F (FYE Jun) 2009 2010 2011F 2012F 2013F
Operating expenses (999) (1,008) (1,879) (2,388) (2,637) EBITDA growth (%) 40.5 23.9 13.5 14.7 8.8
EBIT 89 113 140 162 177 Interest cover (x) 83.6 51.7 1,872.6 1,296.9 1,010.6
Tax (22) (29) (44) (50) (55)
Minority interests (9) (6) 0 0 0
Net profit 92 116 131 150 165
Adj. wt. shares (m) 1,980 1,980 1,980 1,980 1,980

(RM m, end Jun) 2009 2010 2011F 2012F 2013F (FYE Jun) 2010 2011F 2012F 2013F
Fixed assets 275 294 313 332 352 Overseas rev contribution (%) 35.0% 35.0% 35.0% 35.0%
Intangible assets 2 2 2 2 2 Downstream contribution to rev (%) 43.0% 43.0% 43.0% 43.0%
Other long-term assets 479 536 593 610 628 Upstream contribution to rev (%) 57.0% 57.0% 57.0% 57.0%
Total non-current assets 756 832 908 945 982 Construction margins (%) 9.0% 9.0% 9.0% 9.0%
Stocks 30 52 62 78 86
Trade debtors 162 294 354 447 491
Total current assets 371 568 699 885 1,005
Total current liabilities 636 784 910 1,009 1,060
NTA/share (RM) 0.25 0.31 0.35 0.41 0.46

(RM m, FYE Jun) 2009 2010 2011F 2012F 2013F
Pretax profit 123 151 174 201 220

Cash tax paid (7) (10) (10) (12) (13)
23.0
Others (41) (32) (33) (36) (44)
Capex (10) (10) (10) (10) (10) 18.0
Others 3 3 3 4 5
8.0
Change in cash 17 43 61 76 68

MALAYSIA
NEUTRAL Maintained
DiGi.com Bhd RM24.80 @07/12/10
Squeezing out more cost efficiencies Target: RM27.00
DIGI MK / DSOM.KL Kelvin Goh CFA +60(3) 2084 9699 – kelvin.goh@cimb.com
• Reiterate NEUTRAL. Despite its modest earnings growth, we remain NEUTRAL on

DiGi as its price upside may be dampened by lower future dividend payouts and
high valuations. Earnings will be driven by data revenues and more cost
efficiencies. We expect DiGi’s dividend payout ratio to decline from >120% in the
last 5 years to 100% in FY11 as its gearing should reach its targeted level. We are
not overly concerned about YTL Communications’ entry given its lack of variety in
handheld devices. Our DCF-based target price is RM27.00 (WACC 11.6%).
• Data key to future growth. DiGi plans to develop its small and large screen data
revenue, aided by the expansion of its 3G network from about 45% in end-2010 to
65% in 2011. With only 5% of its users on smartphones and 20% on 3G handsets,
there is plenty of room for growth.
• Network sharing with Celcom. DiGi aims to improve operating efficiency through
its MOU with Celcom to share infrastructure in 1) operations and maintenance, 2)
transmission and site sharing, and 3) radio access network. We estimate that this
could bolster EBITDA margin by 2-3% pts in the coming years.
• Key concerns. Our main concern with DiGi is the rising competition in the large
screen data segment from WiMAX operators, Packet One and YTL
Communications. We are less concerned about competition in small screen data
given the lack of WiMAX handheld devices.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 4,814.5 4,909.6 5,338.3 5,737.7 6,063.5
EBITDA (RM m) 2,158.7 2,115.1 2,348.9 2,581.9 2,789.2
EBITDA margins (%) 44.8% 43.1% 44.0% 45.0% 46.0%
Net profit (RM m) 1,140.7 1,000.5 1,158.9 1,299.2 1,450.7
EPS (sen) 146.7 128.7 149.1 167.1 186.6
EPS growth (%) 3.6% (12.3%) 15.8% 12.1% 11.7%
P/E (x) 16.9 19.3 16.6 14.8 13.3
Stock Information
Core EPS (sen) 146.7 128.7 149.1 167.1 186.6
Market cap: RM19,282m/US$6,147m Core EPS growth (%) 3.6% (12.3%) 15.8% 12.1% 11.7%
RM21.00 Gross DPS (sen) 184.7 178.0 198.2 167.1 205.2
No. of shrs (m): 778 P/BV (x) 10.2 12.7 16.9 16.9 19.4
- Telenor 49.0 EV/EBITDA (x) 9.0 9.3 8.5 7.7 7.1
- EPF 16.0 % change in EPS estimates - - -
- Time dotCom 3.5 CIMB/Consensus (x) 1.03 1.09 1.15

26.9
2.50
DiGi is the smallest cellco in Malaysia but one of the most innovative in terms of
25.9
24.9 2.00
products and services. After capturing among the highest net adds in 2007, DiGi’s
23.9
1.50
momentum slowed down as it focused on migrating its prepaid customers to postpaid.
22.9
21.9
1.00 As a result, its subscriber market share slipped from 28% at its peak in mid-07 to 26%
20.9
0.50 currently while its share of industry revenue remained unchanged yoy at 26%. At end-
19.9
De c -09 Ma y-10 Oct-10
0.00
07, DiGi acquired 3G spectrum by issuing 27.5m or 3.7% new DiGi shares to Time
Volume 1m (R.H.S ca le ) DiGi.com Bhd dotCom. Telenor pared its stake in Digi to 49% to comply with the regulatory limit. Digi
Source: Bloomberg was established in 1995 as Mutiara Telecom.

Financial tables

Operating expenses (2,656) (2,794) (2,989) (3,156) (3,274) EBITDA growth (%) 2.3 (2.0) 11.1 9.9 8.0
Net interest & invt income 24 (18) (22) (41) (37) Effective tax rates (%) 26.3 26.8 25.0 25.0 25.0
Pretax profit 1,547 1,366 1,545 1,732 1,934 Creditors turnover (days) 12.7 13.8 13.5 13.3 13.2
Tax (406) (366) (386) (433) (484)
Net profit 1,141 1,000 1,159 1,299 1,451
Adj. wt. shares (m) 778 778 778 778 778

Fixed assets 2,870 2,896 2,834 2,745 2,647 No of mobile subscribers (m) 7.72 8.56 9.28 9.88
Intangible assets 994 950 881 811 742 No of postpaid mobile subs (m) 1.24 1.36 1.47 1.56
Other long-term assets 12 12 12 12 12 No of prepaid mobile subs (m) 6.49 7.20 7.81 8.32
Total non-current assets 3,876 3,858 3,727 3,569 3,401 Postpaid ARPU (local currency) 83.8 82.5 81.7 80.9
Cash and equivalents 342 441 828 864 1,094 Prepaid ARPU (local currency) 49.0 47.5 46.6 45.6
Stocks 17 13 19 20 21 Blended mobile ARPU (RM) 54.5 53.7 52.1 51.2
Trade debtors 421 420 457 491 519
Total current assets 779 874 1,304 1,375 1,634
Other current liabilities 1,789 1,685 1,780 1,634 1,812
Long-term borrowings 100 772 1,372 1,372 1,372
Total long-term liabilities 492 1,185 1,758 1,805 1,856
Shareholders’ funds 1,897 1,521 1,139 1,139 994
NTA/share (RM) 1.16 0.73 0.33 0.42 0.32

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 20.0
Pretax profit 1,547 1,366 1,545 1,732 1,934
Working capital changes (51) 15 (29) (24) (21)

Cash tax paid (374) (392) (413) (386) (433) 18.0
Others 260 (48) 91 110 106

17.0
Capex (888) (717) (720) (720) (720) 16.0
Others 0 14 0 0 0 15.0
13.0
Dividends paid (1,501) (1,376) (1,447) (1,444) (1,418) Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10
Cash interest & others 24 (18) (22) (41) (37)
Cash flow from financing (1,376) (870) (869) (1,485) (1,455)
Change in cash (236) 99 387 36 230
Change in net cash/(debt) (333) (425) (213) 36 230

MALAYSIA
Eastern & Oriental Bhd RM1.14 @07/12/10
Takeover candiate? Target: RM1.63
Property Devt & Invt
EAST MK / ENOB.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Maintain OVERWEIGHT. E&O provides investors with exposure to the upmarket

condo market in Kuala Lumpur and Penang island. It is a key beneficiary of any
boom in the Malaysian property market due to its prime landbank in those two
areas. The company also fits the profile of candidates for takeover due to its
fragmented shareholding and high free float. We reiterate our OUTPERFORM
recommendation in view of its compelling valuations. Applying an unchanged 40%
discount to its FD RNAV of RM2.72, we get an unchanged target price of RM1.63.
Factors that could catalyse the stock include 1) a sales pickup for the Penang
condo project, and 2) successful launch of new projects in Kuala Lumpur and 3)
rising M&A interest in property stocks.
• Takeover candidate? The recent spate of mergers including that of Sunrise (SUN
MK; Not Rated) and UEM Land (ULHB MK; Not Rated) begs the question of which
company is next in line. We view E&O as a potential candidate as it has a premium
brand name, prime landbank in strategic locations and strong expertise in marketing
and project management. It also has expertise in condo and township development.
Moreover, the stock is trading at a huge discount to RNAV.
Financial summary
FYE Mar 2009 2010 2011F 2012F 2013F
Revenue (RM m) 302.6 352.4 395.0 526.1 656.8
EBITDA (RM m) 27.2 72.2 73.1 98.3 134.4
EBITDA margins (%) 9.0% 20.5% 18.5% 18.7% 20.5%
Pretax profit (RM m) (38.1) 93.7 68.8 101.9 117.0
Net profit (RM m) (37.7) 70.9 45.0 70.2 80.6
EPS (sen) (6.4) 9.3 5.7 8.8 10.1
EPS growth (%) (124.7%) 246.2% (39.3%) 56.0% 14.8%
P/E (x) nm 12.2 20.2 12.9 11.3
Core EPS (sen) (1.0) 6.4 5.7 8.8 10.1
Core EPS growth (%) (143.9%) 730.2% (11.1%) 56.0% 14.8%
Stock Information
Core P/E (x) nm 17.9 20.2 12.9 11.3
Market cap: RM940m/US$300m FD core EPS (sen) 1.0 6.4 5.7 8.0 8.9
RM0.86 Gross DPS (sen) 0.0 3.8 3.8 4.0 5.0
No. of shrs (m): 825 P/BV (x) 0.8 0.8 0.9 0.8 0.8
Est. free float (%): 67.1 ROE (%) (4.9%) 7.6% 4.3% 6.5% 7.1%
Major shareholders (%): P/FCFE (x) (2.7) 5.1 (25.1) (19.3) (136.6)
- Dato' Terry Tham Ka Hon 16.8 EV/EBITDA (x) 50.2 17.8 20.4 16.6 12.3
- G.K. Goh Holdings Limited 16.1 % change in EPS estimates N/A N/A N/A
- Halfmoon Bay Capital 10.4 CIMB/Consensus (x) 0.99 1.00 0.87

1.4 3.50 E&O is a product of numerous restructuring exercises including divestments and
1.3 3.00
2.50
mergers. The now streamlined group has three core businesses, i.e. property
1.2
1.1
2.00 development, hospitality & lifestyle and property investment. E&O has over 1,400
1.0
1.50
acres of landbank in Kuala Lumpur and Penang Island. This includes 740 acres of
1.00
0.9 0.50
land to be reclaimed under Phase 2 of the Seri Tanjung Pinang project in Penang.
0.8
0.00
The group owns the heritage Eastern & Oriental Hotel and Lone Pine Hotel in
Volume 10m (R.H.S ca le ) Ea s te rn & Orie nta l Bhd Penang. E&O also has numerous small parcels of very prime landbank in the centre
Source: Bloomberg of Kuala Lumpur.

Financial tables

EBITDA 27 72 73 98 134 Pretax margins (%) (12.6) 26.6 17.4 19.4 17.8
Net interest & invt income (19) 2 (17) (21) (23) Effective tax rates (%) N/A 19.9 27.0 25.0 25.0
Associates’ contribution (3) 8 32 44 26 Net dividend payout (%) N/A 30.6 50.4 34.0 37.0
Pretax profit (38) 94 69 102 117 Creditors turnover (days) 85.6 48.5 18.6 17.2 17.7
Tax 6 (19) (19) (25) (29)
Net profit (38) 71 45 70 81
Adj. wt. shares (m) 592 762 796 796 796

Fixed assets 341 395 380 366 351 Undeveloped landbank (acres) 1,463 1,443 1,423 1,403
Intangible assets 0 0 0 0 0 Company's targeted sales (RMm) 1,000 585 700 850
Other long-term assets 758 755 922 1,091 1,128 Margin - Property development (%) 40.0% 23.7% 22.4% 23.5%
Total non-current assets 1,099 1,150 1,302 1,456 1,479 Gross Margin (%) 20.5% 18.5% 18.7% 20.5%
Stocks 95 55 50 45 40
Trade debtors 105 73 82 109 136
Total current assets 872 1,029 1,039 1,074 1,129
Shareholders’ funds 814 1,042 1,064 1,110 1,161
NTA/share (RM) 1.37 1.37 1.34 1.39 1.46

(RM m, FYE Mar) 2009 2010 2011F 2012F 2013F
Pretax profit (38) 94 69 102 117 1.60
Working capital changes (111) 100 (35) (54) (59) 1.40
Cash tax paid (23) (16) (19) (6) (19) 1.20

Others 22 (10) (15) (23) (2)
Cash flow from operations (138) 184 19 38 57 1.00
Capex (104) (70) (5) (5) (5)
0.80
Net investments & sale of FA 216 3 (167) (169) (38)
Others (265) 22 0 0 0 0.60
Equity raised/(repaid) 387 157 0 0 0 0.20

Dividends paid 0 (22) (23) (24) (30) Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10
Cash flow from financing 83 174 126 110 (25)
Change in cash (208) 313 (27) (27) (11)
Change in net cash/(debt) (265) 285 (161) (137) (13)

MALAYSIA
Eksons Corporation Bhd RM1.00 @07/12/10
Property is a new plank for earnings Target: RM1.26
Timber
EKSON MK / EKSN.KL Nigel Foo +60(3) 2084 9293 – nigel.foo@cimb.com
• Reiterate OUTPERFORM. Eksons remains an OUTPERFORM. We retain our

valuation basis of 0.6x P/NTA, which is its 3-year average. This gives us an
unchanged target price of RM1.26. Potential share price triggers are i) higher sales
for its property project, ii) a further pickup in plywood prices and iii) its attractive
valuations of 0.5x P/BV and 4x CY11 P/E.
• Middle East is main market for timber. Demand for the group’s thin plywood
remains strong in its main export markets, the Middle East and Africa. The US used
to be its main export market but is unlikely to see a recovery anytime soon as its
housing market is still in the doldrums. Eksons does not supply plywood to Japan.
• Prices picking up. Average plywood price has risen from US$425-430/m3 last year
to around US$450/m3 currently. With industry supply remaining tight and demand
showing signs of picking up in 2011, we believe that the average plywood price
should stabilise around US$450-460/m3 over the next few quarters.
• Property to start contributing this year. The property division should provide
some earnings stability amid volatile timber earnings. In mid-09, Eksons launched
its maiden property project, “The Atmosphere”, an RM850m commercial project in
Seri Kembangan, Selangor. The project has secured close to RM230m bookings
since its launch in Aug 09 and the average take-up rate is 90%.Assuming 25% net
profit margin from current sales, property could contribute around RM55m-60m net
profit over the next three years. We are projecting RM11m-12m EBIT contribution
from the division for FY11 and around RM20m for FY12.
• Strong balance sheet. Eksons’s balance sheet is strong with RM21m net cash
(RM0.13/share), which is equivalent to 13% of its share price. This gives the
company the capacity to acquire assets, particularly property landbank.
Financial summary
FYE Mar 2009 2010 2011F 2012F 2013F
Revenue (RM m) 291.1 279.1 348.7 367.8 382.3
EBITDA (RM m) 33.3 27.0 53.6 61.8 76.4
EBITDA margins (%) 11.4% 9.7% 15.4% 16.8% 20.0%
EPS (sen) 15.8 10.6 21.3 25.6 33.0
Market cap: RM163m/US$52m EPS growth (%) (38.1%) (33.1%) 100.7% 20.5% 28.8%
RM0.78 Gross DPS (sen) 2.7 4.1 5.9 7.1 9.2
No. of shrs (m): 164 P/BV (x) 0.5 0.5 0.4 0.4 0.4
Major shareholders (%): P/FCFE (x) 14.1 (5.9) 6.3 3.3 2.5
- Tay Hua Sin 46.9 EV/EBITDA (x) 3.9 6.3 2.5 1.5 0.5
- Faizal bin Abdul Aziz 12.3 % change in EPS estimates - - -

1.2
1.80 Eksons is one of the region's major producers of thin plywood, focusing on plywood of
1.1
1.60
1.40 2.5mm and 2.7mm thickness. Thin plywood is mainly used in interior design and
1.0
1.20
1.00
furniture. The company has two plants in East Malaysia, Tawau and Sibu, with a
0.9 0.80
0.60
combined annual capacity of 285,000 cu metres. Products are sold under the “Panda”
0.8 0.40
0.20
brand. Its largest export markets are currently the Middle East, Asia and Africa. Its
0.7
0.00
maiden property project, a commercial development in Seri Kembangan, named “The
Volume 1m (R.H.S ca le ) Eks ons Corpora tion Bhd Atmosphere” will start contributing to Eksons’s bottomline in FY11.
Source: Bloomberg

Financial tables

Operating expenses (258) (252) (295) (306) (306) EBITDA growth (%) (34.6) (18.9) 98.5 15.3 23.6
Net interest & invt income 0 0 0 0 0 Effective tax rates (%) N/A N/A 11.5 10.8 11.5
Tax 5 5 (5) (5) (7)
Minority interests 0 (1) 0 0 0
Net profit 26 17 35 42 54
Adj. wt. shares (m) 164 164 164 164 164

Fixed assets 202 178 174 170 165 Average plywood price (US$/cu m) 425 450 450 450
Intangible assets 15 27 27 27 27 Annual prodn capacity (cu m) 285,000 285,000 285,000 285,000
Other long-term assets 0 9 9 9 9 Production (cu m p.a.) 185,250 203,000 228,000 228,000
Total non-current assets 217 214 210 206 201 Average log price (US$/cu m) 145 165 165 165
Stocks 70 86 83 80 75
NTA/share (RM) 1.84 1.93 2.10 2.30 2.56

(RM m, FYE Mar) 2009 2010 2011F 2012F 2013F 9.0
Working capital changes (1) (4) 6 3 5
Cash tax paid 5 0 (5) (5) (7) 7.0
Others 0 11 0 0 0
Capex (24) (70) (10) (10) (10)
5.0
Others (3) 0 0 0 0
4.0
Debt raised/(repaid) 0 8 (19) 0 0
3.0
Cash flow from financing 9 4 (26) (8) (11)
Change in cash 20 (31) 19 41 53

MALAYSIA
Fraser & Neave Holdings Bhd RM16.26 @07/12/10
Growth is fizzling out Target: RM11.05
Food & Beverages
FNH MK / FRAS.KL Norziana Mohd Inon +60(3) 2084 9645 – norziana.inon@cimb.com
• Maintain UNDERPERFORM. We maintain our EPS forecasts and DCF-based

target price of RM11.05 (WACC of 7.3%). F&N remains an UNDERPERFORM, with
the potential downside triggers being 1) margin pressure from price discounting,
and 2) core EPS contraction in FY11 and marginal growth in FY9/12-13. Our top
F&B pick is CI Holdings.
• Tricky Thai market. In preparation for the expiry of the agreement with The Coca-
Cola Company (TCCC) in Sep 11, F&N will launch more soft drink products/variants
and strengthen its distribution. The company is also exploring the possibility of
exporting its soft drinks to Brunei and Thailand. Thailand is a familiar market for
F&N given the dairy business. However, soft drinks are price-controlled items in
Thailand, making price adjustments difficult and potentially putting pressure on
margins.
• New plant in Pulau Indah. The Rojana plant serves as a blueprint for F&N’s new
37.4-acre, RM350m plant at the Pulau Indah halal hub. Currently, dairy production
in Malaysia is carried out at the Petaling Jaya facility which is facing capacity
constraints after 30 years of operations. The Pulau Indah plant is expected to be
ready next year. In Malaysia, F&N has over 60% market share for sweetened
condensed milk and about 80% market share for evaporated milk.
• Red Bull charges ahead. In Feb 10, F&N signed a 5-year agreement giving it
exclusive distribution rights for Red Bull energy drinks in Malaysia. The beverages
were launched in Apr and have shown encouraging growth. FY11 will see the first
full-year contribution by Red Bull.
Financial summary
FYE Sep 2009 2010 2011F 2012F 2013F
Revenue (RM m) 3,737.1 3,637.7 4,929.9 5,040.8 5,093.9
EBITDA (RM m) 453.0 519.4 454.7 465.2 481.2
EBITDA margins (%) 12.1% 14.3% 9.2% 9.2% 9.4%
EPS (sen) 63.0 195.1 74.9 77.1 79.4
Market cap: RM5,832m/US$1,859m EPS growth (%) 34.5% 209.8% (61.6%) 2.8% 3.1%
RM10.34 Gross DPS (sen) 53.4 182.7 53.4 53.4 53.4
No. of shrs (m): 359 P/BV (x) 5.8 4.4 5.1 5.1 5.1
- Fraser and Neave Ltd 57.2 EV/EBITDA (x) 13.0 10.7 12.4 11.9 11.3
- Skim ASB 21.5 % change in EPS estimates - - -

16.8
1.00
F&N’s core divisions are soft drinks, dairy and property. Coca-Cola has been the
15.8
14.8
0.80
F&N’s flagship product for decades but the non-renewal of agreements with TCCC
13.8 0.60 has prompted the company to accelerate the rollout of other products, especially
12.8
0.40 isotonic and Asian drinks, which have gained traction. Meanwhile, the dairy division
11.8
10.8
0.20 continues to enjoy the lion’s share of the local sweetened condensed milk market
9.8
De c -09 Ma y-10 Oct-10
0.00
after the RM310m acquisition of Nestle’s business in Feb 07. The Fraser Business
Volume 1m (R.H.S ca le ) Fra s e r & Ne a ve Holdings Bhd Park Phase 2 property development is nearing completion. In FY10, F&N disposed of
Source: Bloomberg its glass business.

Financial tables

(RM m, FYE Sep) 2009 2010 2011F 2012F 2013F (FYE Sep) 2009 2010 2011F 2012F 2013F
Operating expenses (3,284) (3,118) (4,475) (4,576) (4,613) EBITDA growth (%) 22.3 14.6 (12.5) 2.3 3.4
Net interest & invt income (14) 0 (3) 1 1 Effective tax rates (%) 19.0 10.6 23.0 23.0 23.0
Tax (57) (82) (83) (86) (88)
Net profit 224 695 267 275 283
Adj. wt. shares (m) 356 356 356 356 356

(RM m, end Sep) 2009 2010 2011F 2012F 2013F (FYE Sep) 2010 2011F 2012F 2013F
Fixed assets 532 388 299 207 110 Manufacturing overhead growth (%) 6.0% 6.0% 6.0% 6.0%
Other long-term assets 3 3 3 3 3 Raw material price growth (%) 12.0% 12.0% 12.0% 12.0%
Total non-current assets 534 390 302 210 113 SKU 422 423 424 425
Stocks 578 680 661 678 685
Trade debtors 806 947 921 944 955
NTA/share (RM) 2.82 3.68 3.18 3.20 3.20

(RM m, FYE Sep) 2009 2010 2011F 2012F 2013F 22.0
Pretax profit 300 776 363 373 384
Working capital changes (92) (117) 22 (19) (9)
Cash tax paid (60) (72) (85) (83) (86) 18.0
Others (42) (107) 0 2 2
16.0
Capex (84) (97) (112) (128) (148)
14.0
Others 0 0 0 0 0
Cash flow from investing (84) 6 (112) (128) (148)
12.0
Debt raised/(repaid) (11) (10) (9) (9) (8)
10.0
Change in cash 10 328 (68) 87 92
Change in net cash/(debt) 21 339 (59) 96 100

MALAYSIA
Gamuda Bhd RM3.76 @07/12/10
Riding on the MRT Target: RM5.00
Construction
GAM MK / GAMU.KL Sharizan Rosely +60 (3) 2084 9864 – sharizan.rosely@cimb.com
• Maintain OUTPERFORM. We are encouraged by the progress of the proposed KL

MRT, which is slated to start work in Jul 2011. This suggests that project approval,
tender process and project awards are likely to come through within the next six
months. A major milestone would be Cabinet approval which should occur by end-
2010. This is positive for Gamuda as it has a good chance of bagging the RM13bn-
14bn tunnelling works. We maintain our OUTPERFORM rating but nudge upwards
our RNAV-based target price from RM4.96 to RM5.00 as we apply our higher target
market P/E of 14.5x (prev. 13.8x) to the construction component. The main re-rating
catalyst is progress and award of the MRT project. Gamuda remains one of our top
picks for the construction sector.
• Open tender with some advantages as a chariot master. We continue to believe
that even though the entire RM36bn-40bn MRT project will be up for open tender,
Gamuda-MMC will have an advantage in bidding for the job. The JV is still
interested in undertaking the RM13bn-14bn tunnelling job and its odds of clinching
this portion are good given its track record and expertise in handling large-scale
infrastructure works such as the SMART tunnel and the northern double-tracking
project. The tunnelling works will be the first package to be dished out. Going by the
Jul 2011 timeline for the groundbreaking, we expect the award of the first MRT
package to occur in 1H2011.
Financial summary
FYE Jul 2009 2010 2011F 2012F 2013F
Revenue (RM m) 2,727.3 2,455.1 3,106.7 4,107.8 4,587.9
EBITDA (RM m) 303.4 236.6 233.7 327.2 417.9
EBITDA margins (%) 11.1% 9.6% 7.5% 8.0% 9.1%
Net profit (RM m) 193.7 280.7 335.0 458.5 558.2
EPS (sen) 9.6 13.9 16.6 22.7 27.7
EPS growth (%) (33.8%) 44.9% 19.3% 36.9% 21.7%
Market cap: RM7,687m/US$2,443m FD core EPS (sen) 9.6 13.7 16.3 22.1 32.9
RM2.58 Gross DPS (sen) 7.9 12.0 12.0 12.0 12.0
No. of shrs (m): 2,045 P/BV (x) 3.7 4.1 3.7 3.6 3.4
Major shareholders (%): P/FCFE (x) 30.0 109.4 225.9 (201.0) (151.5)
- EPF 8.3 EV/EBITDA (x) 28.5 37.9 38.2 27.2 21.3
- Amanah Raya Trustees 7.2 % change in EPS estimates - - -
- Platinum 5.2 CIMB/Consensus (x) 0.89 1.01 1.09

4.2
4.0 3.00
Since its inception as a pure construction player in 1976, Gamuda has gradually
3.8 2.50 evolved through ventures into toll highways and property. It has diversified into water
3.6
3.4
2.00
treatment as well as overseas via Indian highway projects, among others. Today,
1.50
3.2
3.0
1.00
Gamuda is Malaysia’s premier infrastructure specialist with its scope of expertise
2.8
2.6
0.50 covering highways, bridges, tunnels, dams and hydropower, hydraulic engineering
2.4
0.00
and water treatment, railways and mass-rapid transit systems. It has also expanded to
Volume 10m (R.H.S ca le ) Ga muda Bhd overseas markets including Vietnam.
Source: Bloomberg

Financial tables

(RM m, FYE Jul) 2009 2010 2011F 2012F 2013F (FYE Jul) 2009 2010 2011F 2012F 2013F
Tax (78) (81) (125) (168) (203)
Net profit 194 281 335 459 558
Adj. wt. shares (m) 2,016 2,016 2,016 2,016 2,017

(RM m, end Jul) 2009 2010 2011F 2012F 2013F (FYE Jul) 2010 2011F 2012F 2013F
Fixed assets 79 62 43 24 5 Construction margins (%) 5.0% 9.0% 9.0% 9.0%
Intangible assets 19 19 18 18 18 Orderbook replenishment (RM m) 500 500 1,000 1,000
Other long-term assets 1,644 1,814 1,963 1,958 1,952 Outstanding orderbook (RM m) 8,500 9,200 10,600 12,000
Total non-current assets 1,742 1,895 2,024 2,000 1,975
Stocks 35 63 66 88 98
Trade debtors 1,665 1,900 1,894 2,154 2,373
NTA/share (RM) 1.01 0.90 1.01 1.05 1.10

(RM m, FYE Jul) 2009 2010 2011F 2012F 2013F
Pretax profit 282 370 479 646 781 43.0
Working capital changes 164 (376) 70 (55) (103) 38.0
Cash tax paid (80) (104) (120) (156) (192)
Others 249 95 (16) (89) (133) 33.0
Capex (14) (14) (14) (14) (14) 28.0
Net investments & sale of FA (212) (234) (256) (308) (340)

Others 0 0 0 0 0 23.0

18.0
Debt raised/(repaid) (156) 312 (130) (82) (70)
13.0
Cash interest & others (261) 27 (14) 90 99
Cash flow from financing (504) 253 (231) (78) (57)
Change in cash (95) 10 (67) (34) (38)
Ending net cash/(debt) (910) (1,224) (1,161) (1,113) (1,082)

MALAYSIA
Genting Bhd RM10.70 @07/12/10
Top gaming pick Target: RM15.20
Gaming
GENT MK / GENT.KL Ivy Ng Lee Fang CFA +60(3) 2084 9697 – ivy.ng@cimb.com
• Reiterate OUTPERFORM. Genting Bhd remains firmly an OUTPERFORM and our

top pick within the group, with the potential share price triggers of i) less-than-
expected cannibalisation, ii) new M&A ventures and iii) value-unlocking efforts via
disposal of non-core assets. Our SOP-based target price stays at RM15.20.
Genting Bhd also provides indirect exposure to the high-growth Singapore gaming
market as more than half of its SOP value comes from Genting Singapore.
• A global gaming play. With its monopoly in Malaysia and market leadership in
Singapore, Genting Bhd is well-positioned to capitalise on the positive outlook for
gaming in Asia as the favourable economic climate will propel demand from a
captive target market with a naturally higher propensity to gamble. For 2011, we
expect RWS to maintain its market leadership, albeit marginally. There is also
upside to the size of Singapore’s gaming pie with the expected licensing of junkets.
Meanwhile, GM’s focus will be on its maiden project in the US and its newly
acquired UK assets. We expect RWG to keep its focus on yields to protect its turf.
• Plantation – the only non-core gem. The plantation arm is set for a better 2011
on the back of higher CPO prices and production. But power earnings could come
under pressure as coal prices start heading north again. We also do not expect
material contributions from the oil and gas division given the increasing dominance
of the core gaming contributions. Non-core asset disposals, especially the non-
performing ones, could be a focus in 2011.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 9,082.5 8,893.6 14,850.2 18,002.3 20,039.7
EBITDA (RM m) 3,470.1 3,776.3 6,508.2 7,958.6 8,595.2
EBITDA margins (%) 38.2% 42.5% 43.8% 44.2% 42.9%
Net profit (RM m) 567.6 1,044.3 2,229.5 2,974.1 3,458.6
EPS (sen) 15.3 28.2 60.2 80.3 93.4
EPS growth (%) (71.5%) 84.0% 113.5% 33.4% 16.3%
P/E (x) 69.8 38.0 17.8 13.3 11.5
Core EPS (sen) 45.9 36.7 65.7 80.3 93.4
Core EPS growth (%) 6.4% (20.2%) 79.3% 22.2% 16.3%
Stock Information
Core P/E (x) 23.3 29.2 16.3 13.3 11.5
RM6.22 P/BV (x) 3.2 2.9 2.5 2.1 1.8
No. of shrs (m): 3,713 Net cash per share (RM) 0.97 0.32 0.38 1.95 3.58
Est. free float (%): 50.0 P/FCFE (x) 69.2 6.9 11.2 4.9 7.2
Major shareholders (%): % change in EPS estimates - - -
- Lim family 39.6 CIMB/Consensus (x) 1.39 1.08 1.13

10.9
2.50 The Genting group is owned by the family of the late Tan Sri Lim Goh Tong. Its prized
9.9
2.00
asset is Resorts World Genting (RWG), held by 49%-owned Genting Malaysia (GM),
8.9
1.50
which also owns 18% of Genting Hong Kong. The huge success of Resorts World
7.9
1.00
Sentosa (RWS), which opened doors in Singapore earlier this year, has strengthened
6.9 0.50
the group’s gaming earnings. Its 55%-subsidiary Genting Plantations is among the
5.9
De c -09 Ma y-10 Oc t-10
0.00
larger plantation operators with a 66,000ha landbank. The group holds a 58.6%
Volume 10m (R.H.S c a le ) Ge nting Bhd interest in Genting Sanyen Power with associate interests in China and India power
Source: Bloomberg assets. The oil & gas operations include several producing wells in China and
exploration in Indonesia.

Financial tables

Operating expenses (5,612) (5,117) (8,342) (10,044) (11,444) EBITDA growth (%) (6.6) 8.8 72.3 22.3 8.0
Depreciation & amortisation (625) (687) (1,228) (1,884) (1,952) Net profit margins (%) 6.2 11.7 15.0 16.5 17.3
Exceptional items (1,133) (445) (815) 0 0 Debtors turnover (days) 38.6 44.9 36.0 41.1 42.7
Tax (751) (746) (944) (1,349) (1,396)
Minority interests (414) (739) (1,128) (1,570) (1,710)
Net profit 568 1,044 2,230 2,974 3,459
Adj. wt. shares (m) 3,704 3,704 3,705 3,705 3,705

Fixed assets 10,692 16,450 20,510 19,626 18,674 Number of tables 420 420 420 420
Intangible assets 3,523 3,914 3,914 3,914 3,914 Number of slots 3,500 3,500 3,500 3,500
Other long-term assets 5,103 6,590 6,512 6,528 6,543 Net win per table p.a. (RM m) 8.546 8.525 8.649 8.908
Total non-current assets 19,317 26,955 30,936 30,068 29,131 Net win per slot p.a. (RM m) 0.289 0.289 0.293 0.302
Cash and equivalents 9,467 14,707 17,834 25,559 30,668 Average occupancy rate (%) 75.0% 95.0% 85.0%
Stocks 376 387 646 784 872 Number of rooms - Total 1,350 1,350 1,500
Trade debtors 1,090 1,097 1,831 2,220 2,471 Universal Studios visitor (m) 4.1 4.6 5.6
Other current assets 201 356 594 721 802 Net win per table (S$ m) 10 11 11
Trade creditors 1,512 2,382 3,977 4,822 5,367
Other current liabilities 251 202 883 1,289 1,340
Minority interests 8,971 11,825 12,953 14,523 16,233
NTA/share (RM) 2.41 2.69 3.24 3.98 4.86

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 1,733 2,528 4,302 5,893 6,565 17.0
Depreciation & non–cash adj. 625 687 1,228 1,884 1,952
Working capital changes (180) 852 602 318 206
15.0
Cash tax paid (886) (863) (746) (944) (1,349)
Others 1,646 326 808 361 296
Cash flow from operations 2,938 3,531 6,194 7,512 7,669 13.0
Capex (2,500) (5,205) (5,288) (1,000) (1,000)

Net investments & sale of FA (345) (100) (100) (100) (100) 11.0
Others 0 0 0 0 0
Debt raised/(repaid) 535 7,655 2,915 1,923 (952)
Equity raised/(repaid) (174) 0 0 0 0
7.0
Cash flow from financing (217) 7,014 2,323 1,313 (1,460)
Change in cash (125) 5,240 3,128 7,725 5,109
Change in net cash/(debt) (660) (2,415) 214 5,802 6,061

MALAYSIA
NEUTRAL Maintained
Genting Malaysia Bhd RM3.34 @07/12/10
A dicey bet Target: RM3.90
Gaming
GENM MK / GENM.KL Ivy Ng Lee Fang CFA +60(3) 2084 9697 – ivy.ng@cimb.com
• Reiterate NEUTRAL. We are staying NEUTRAL on Genting Malaysia (GM) as we

see limited re-rating catalysts for the stock over the near term. The minimal near-
term earnings enhancement from its global expansion drive is largely offset by
lingering corporate governance and newfound competitive concerns. Our end-CY11
SOP-based target price stays at RM3.90 (10% discount intact).
• RWG on auto-cruise mode. We expect GM to continue focusing on yields in 2011
as it proactively minimises punting migration to Singapore’s two new IRs. In the
past, the emphasis on yield has been a rewarding one, with GM successfully
sustaining patronage even during the worst of economic times and the peak of
A(H1N1) worries.
• Realising global ambition. 2011 will also see GM spreading its wings to nurture its
maiden project in US while also turning around its newly acquired UK assets. Phase
1 of its Aqueduct project is expected to be unveiled by mid-year with some 1,600
video lottery terminals. Meanwhile, GM will be banking on its powerful membership
database and gradually revamping its provincial casinos to drive patronage of its
UK casinos.
• Still sitting on RM2bn+ cash pile. We estimate that even after the UK and US
additions, GM is still sitting on a healthy cash balance in excess of RM2bn.
Because of this, we do not discount the possibility of more unpopular RPTs ahead.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 4,886.7 4,991.8 5,134.4 7,003.3 7,688.1
EBITDA (RM m) 2,034.5 2,038.7 1,932.5 2,165.7 2,309.1
EBITDA margins (%) 41.6% 40.8% 37.6% 30.9% 30.0%
Net profit (RM m) 632.7 1,323.6 1,229.6 1,403.1 1,530.7
EPS (sen) 10.8 22.4 20.8 23.8 25.9
EPS growth (%) (60.8%) 107.9% (7.1%) 14.1% 9.1%
P/E (x) 31.0 14.9 16.0 14.1 12.9
Core EPS (sen) 23.8 23.5 22.7 23.8 25.9
Core EPS growth (%) 18.1% (1.3%) (3.3%) 4.7% 9.1%
Stock Information
Core P/E (x) 14.1 14.2 14.7 14.1 12.9
RM2.51 P/BV (x) 2.4 1.9 1.8 1.6 1.5
No. of shrs (m): 5,915 Net gearing (%) N/A N/A N/A N/A N/A
- Genting Berhad 47.3 % change in EPS estimates - - -
- First Eagle Investment 3.6 CIMB/Consensus (x) 1.01 0.97 0.97

3.9
8.00
Genting Malaysia (GM), previously Resorts World, is a 47%-owned subsidiary of
3.7
3.5
7.00 Genting Bhd. Its principal business is the operation of Resorts World Genting, an
6.00
3.3
3.1
5.00 integrated resort and casino located 45mins from Kuala Lumpur. The resort consists
4.00
2.9
3.00 of six hotels and two apartment blocks, offering a total of over 10,000 rooms. The
2.7
2.5
2.00
1.00
Genting casino has over 400 gaming tables and 3,500 slot machines. It recently
2.3
0.00
completed the acquisition of Genting Singapore’s UK casino assets and is in the midst
Volume 10m (R.H.S ca le ) Ge nting Ma la ys ia Bhd of rolling out its maiden venture in Aqueduct in US. GM also holds just under 20%
Source: Bloomberg interest in Genting Hong Kong, the third largest cruise operator in the world and the
joint operator of the newly opened Resorts World Manila in the Philippines.

Financial tables

EBIT 1,773 1,769 1,657 1,834 1,951 Interest cover (x) 1,077.6 N/A N/A N/A N/A
Exceptional items (762) (81) (145) 0 0 Debtors turnover (days) 14.0 13.6 13.4 11.8 13.0
Tax (493) (441) (388) (538) (551)
Net profit 633 1,324 1,230 1,403 1,531
Adj. wt. shares (m) 5,866 5,903 5,905 5,905 5,905

Fixed assets 3,638 3,482 3,587 3,675 3,752 Number of tables 420 420 420 420
Intangible assets 0 0 0 0 0 Number of slots 3,500 3,500 3,500 3,500
Other long-term assets 963 2,318 2,318 2,318 2,318 Net win per table p.a. (RM m) 8.546 8.525 8.649 8.908
Total non-current assets 4,602 5,800 5,904 5,993 6,070 Net win per slot p.a. (RM m) 0.289 0.289 0.293 0.302
Cash and equivalents 4,555 5,272 6,381 7,548 8,705 Revenue growth (%) 2.9% 2.1% 36.6% 9.8%
Stocks 60 62 64 87 96
Trade debtors 186 186 191 261 286
Total current liabilities 779 835 918 1,220 1,323
NTA/share (RM) 1.41 1.72 1.91 2.09 2.28

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 18.0
Pretax profit 1,125 1,765 1,617 1,941 2,081
17.0
16.0
Working capital changes 50 92 11 145 53
Cash tax paid (416) (469) (441) (388) (538) 15.0
Others 735 (127) 287 (241) (177) 14.0

Capex (518) (130) (400) (400) (404)
12.0
Net investments & sale of FA 639 (402) 0 0 0
Others 0 0 0 0 0 11.0
Cash flow from investing 121 (532) (400) (400) (404) 10.0
Debt raised/(repaid) (175) 0 0 0 0 9.0
8.0
Change in cash 1,519 703 1,105 1,167 1,157
Change in net cash/(debt) 1,694 703 1,105 1,167 1,157

MALAYSIA
NEUTRAL Maintained
Genting Plantations Bhd RM8.68 @07/12/10
Planting roots in Indonesia Target: RM9.84
Palm Oil & Rubber
GENP MK / GENP.KL Ivy Ng Lee Fang CFA +60(3) 2084 9697 – ivy.ng@cimb.com
• Retain NEUTRAL rating. We continue to rate Genting Plantations a NEUTRAL as

our bullish take on CPO price in 2011 is already reflected in the group’s valuations.
Also unchanged are our earnings forecasts and our target price basis of 10%
discount to SOP. However, we increase our target price from RM9.37 to RM9.84 as
we raise our target P/E for the plantation division from 16x to 17x, based on a 15%
premium over our revised target market P/E of 14.5x.
• Rising CPO price and production to boost earnings. We project the group’s
FY11 earnings to rise 16% due mainly to higher selling prices and production.
Asiatic’s strategy of selling almost all of its CPO production on spot basis means
that the group will benefit in a rising CPO price environment. We estimate that every
RM100 per tonne change in CPO price would have a 6% impact on our FY11 net
profit forecast. We expect the group to achieve a higher average CPO price and
better production in 2011 as more Indonesian estates will reach maturity in 2011.
On top of that, Genting Plantations should book higher property earnings from more
sales of industrial land.
• Making good progress in Indonesia. Thanks to favourable weather, the pace of
new planting in Indonesia has picked up. The group planted 9,478ha in 9M10,
bringing its total planted area in Indonesia to 27,147ha. It hopes to plant a further
2,000ha by the end of 2010. Overall, we expect the group to plant around 11,500ha
in 2010. This will raise Indonesia’s share of the group’s planted estates to 33%.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 1,036.0 755.6 932.5 1,043.7 1,126.3
EBITDA (RM m) 488.1 312.5 456.3 523.1 549.2
EBITDA margins (%) 47.1% 41.4% 48.9% 50.1% 48.8%
Net profit (RM m) 373.3 235.7 326.0 377.3 397.4
EPS (sen) 49.3 31.1 43.1 49.9 52.5
Stock Information EPS growth (%) 8.4% (36.9%) 38.3% 15.7% 5.3%
No. of shrs (m): 759 ROE (%) 17.0% 9.7% 12.1% 12.6% 12.0%
- Genting 53.8 % change in EPS estimates - - -
- Employees Provident Fund 13.8 CIMB/Consensus (x) 0.98 1.02 0.97

9.2
5.00
Formerly Asiatic Development, Genting Plantations is the plantation arm of Genting
8.7
4.00
Berhad and one of the top Malaysian plantation companies by market cap. The
8.2
7.7 3.00 company was incorporated on 29 Sep 1977 to spearhead Genting's plantation
7.2
2.00 business. It was listed on Bursa Malaysia on 30 Aug 1982. This midsized plantation
6.7
6.2
1.00 company has 87,147ha of planted oil palm estates located in Malaysia (69%) and
5.7
0.00
Indonesia (31%). It also has property development projects in Johor, Kedah and
Volume 1m (R.H.S c a le ) Ge nting P la nta tions Bhd Melaka. The group also owns Asiatic Centre for Genome Technology (ACGT) which
Source: Bloomberg focuses on R&D in genome sequencing and biomarker discovery that will lead to
innovations for enhancing the productivity and sustainability of palm oil production.

Financial tables

Revenue 1,036 756 933 1,044 1,126 Revenue growth (%) 14.3 (27.1) 23.4 11.9 7.9
Tax (106) (64) (118) (126) (132)
Net profit 373 236 326 377 397
Adj. wt. shares (m) 757 757 757 757 757

Fixed assets 437 493 663 829 893 CPO price per tonne (RM) 2,240 2,620 2,720 2,720
Intangible assets 0 0 0 0 0 FFB output (000' tonnes) 1,148 1,220 1,324 1,435
Other long-term assets 1,253 1,485 1,484 1,484 1,484 FFB yield per ha (tonnes) 21 22 22 22
Total non-current assets 1,690 1,978 2,147 2,313 2,377 Mature area (ha) 54,982 56,982 61,721 71,721
Cash and equivalents 521 526 629 781 1,009 FFB growth (%) -6.9% 6.3% 8.5% 8.4%
Stocks 140 152 164 172 178
Trade debtors 131 156 114 126 137
Total current assets 861 889 971 1,149 1,401
NTA/share (RM) 3.09 3.37 3.73 4.16 4.57

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 483 302 446 503 530 20.0
Working capital changes (44) (19) (6) (10) (17) 18.0
Cash tax paid (157) (64) (118) (126) (132)
Others (16) (15) (10) (12) (17) 16.0

Capex (111) (86) (200) (200) (100) 14.0
Net investments & sale of FA (85) 0 0 0 0

12.0
Others 5 5 5 5 5
10.0
8.0
Cash interest & others (1) (137) 6 8 (27)
Change in cash 25 5 102 152 229

MALAYSIA
NEUTRAL Maintained
Guinness Anchor Bhd RM9.96 @07/12/10
More reason for cheer Target: RM10.45
Brewers
GUIN MK / GUMS.KL Loke Wei Wern +60 (3) 2084 9946 – weiwern.loke@cimb.com
• Maintain NEUTRAL. As a leader in the Malaysian malt liquor industry with a solid
product portfolio and marketing prowess, GAB is well-positioned to ride on the
improving industry fundamentals. Its valuations are arguably not cheap as its 17.0x
FY12 P/E stands at a 33% premium over its 3-year historical average of 12.8x. But
investors should be compensated by an attractive gross yield of 6-7%. We remain
NEUTRAL on the stock despite a higher DDM-based target price of RM10.45
(RM8.85 previously) after lowering our cost of equity from 8% to 7% for a cut in the
beta assumption from 0.6x to 0.4x. Our FY10-12 earnings projections are intact.
• To remain the market leader in 2011? We think that brand investments will
continue to be one of GAB’s key strategies for retaining its leadership position in the
Malaysian malt liquor market (MLM) in 2011. Given its solid brand portfolio which
includes Tiger, Heineken, Guinness and Anchor, and its marketing prowess,
keeping its market dominance should not be a problem. But competition will
undeniably heighten, especially in the imported beer segment. Sales of premium
beer imported by its rival Carlsberg Brewery (CAB MK; Neutral) via Luen Heng
Agency are picking up, posing a threat to GAB’s premium beer brands such as
Heineken.
• Improving growth prospects and attractive dividends. The reprieve from an
excise duty hike in the latest Budget should pave the way for further volume growth.
Besides improving earnings growth prospects, GAB’s other key appeal remains its
high gross yield of 6-7%, which should lend support to the share price.
Financial summary
FYE Jun 2009 2010 2011F 2012F 2013F
Revenue (RM m) 1,285.4 1,341.7 1,390.1 1,432.2 1,475.7
EBITDA (RM m) 217.4 234.5 256.6 264.7 272.9
EBITDA margins (%) 16.9% 17.5% 18.5% 18.5% 18.5%
EPS (sen) 47.0 50.5 56.5 58.6 60.6
Market cap: RM3,009m/US$956m EPS growth (%) 12.8% 7.5% 11.8% 3.7% 3.5%
RM6.60 Gross DPS (sen) 54.5 60.0 64.5 67.0 69.0
No. of shrs (m): 302 P/BV (x) 6.8 6.4 6.1 5.8 5.5
- GAPL Pte Ltd 51.0 EV/EBITDA (x) 13.1 12.2 11.1 10.6 10.2
- Aberdeen Asset Mgmt 6.0 % change in EPS estimates - - -
- Vontobel Asset Mgmt 1.5 CIMB/Consensus (x) 1.04 1.03 1.01

10.2 6.00 Guinness Anchor (GAB) was incorporated on 24 January 1964 under the name of
9.7
9.2
5.00 Guinness Malaysia Limited. Listed on the Main Board of Bursa Malaysia in 1965, it is
8.7
4.00
51% owned by GAPL Pte Ltd, a unit of Asia Pacific Breweries. Its market share has
8.2 3.00
7.7
2.00
been gradually increasing in recent years to around 57% currently. Anchoring this
7.2
6.7
1.00 market share expansion is the growth of its blond beers, led by Tiger, Heineken and
6.2
De c -09 Ma y-10 Oct-10
0.00
Anchor. GAB remains the market leader by far in the stout market via its flagship
Volume 100k (R.H.S c a le ) Guinne s s Anchor Bhd Guinness Stout. It also carries other imported brands such as Strongbow, Paulaner
Source: Bloomberg and Sol.

Financial tables

Tax (49) (52) (57) (59) (61)
Net profit 142 153 171 177 183
Adj. wt. shares (m) 302 302 302 302 302

Fixed assets 236 240 240 242 245 Excise duties (RM per litre) 7.40 7.40 7.40 7.40
Other long-term assets 0 0 0 0 0 Unit sales ('000 Hli) 849 870 888 914
Stocks 69 76 78 81 83
Trade debtors 122 127 132 136 140
NTA/share (RM) 1.46 1.56 1.64 1.72 1.81

(RM m, FYE Jun) 2009 2010 2011F 2012F 2013F 17.0
Pretax profit 191 205 228 236 244

Cash tax paid (48) (49) (52) (57) (59)
Others (4) (10) (13) (13) (10) 14.0

13.0
Capex (29) (30) (31) (33) (35)
Others (2) (5) 0 0 0

11.0
9.0
Change in cash (20) (14) 23 20 20
Change in net cash/(debt) (20) (14) 23 20 20

MALAYSIA
Hap Seng Plantations Holdings RM3.15 @07/12/10
Richest dividend pickings among planters Target: RM3.73
Palm Oil & Rubber
HAPL MK / HAPP.KL Ivy Ng Lee Fang CFA +60(3) 2084 9697 – ivy.ng@cimb.com
• Maintain TRADING BUY and target price of RM3.50. We continue to rate Hap
Seng Plant (HSP) a TRADING BUY due to its attractive P/E valuations and strong
dividend yields. Recent purchases of its shares by its major shareholder are a vote
of confidence in the company. We are leaving our EPS forecasts untouched but are
raising our target price from RM3.50 to RM3.73 as we impute a higher target P/E of
16x instead of 15x in view of the more bullish outlook. The target P/E is still at a
slight discount to the target P/Es of 17-18x accorded to the large-cap planters, in
view of HSP’s lower liquidity.
• A stronger year beckons. We expect stronger FFB production and higher selling
prices to boost 2011 results. We project a 15% improvement in HSP’s 2011 net
profit, coming from higher selling prices, increased production and lower operating
costs per tonne. Production should pick up in 2011 when the impact of poor
weather in the previous year wears off. However, the group will have to contend
with the issue of shortage of foreign estate workers though it does have a slight
advantage over its peers due to its more comprehensive facilities for its workers.
• Major shareholder increasing stake. Hap Seng Consolidated (HAP MK; Not
Rated) has been raising its stake in HSP, which is positive news as it suggests that
the major shareholder sees value in HSP at this level. We estimate that it bought
7.856m shares between 2 and 19 November 2010, raising its stake in HSP by
around 1% to 52.53%.
Financial summary
FYE Dec 2009 2010F 2011F 2012F
Revenue (RM m) 373.1 432.4 473.4 482.8
EBITDA (RM m) 160.5 242.5 275.7 276.9
EBITDA margins (%) 43.0% 56.1% 58.2% 57.4%
Pretax profit (RM m) 135.1 217.5 249.4 248.8
Net profit (RM m) 100.7 163.1 187.1 186.6
EPS (sen) 12.6 20.4 23.4 23.3
EPS growth (%) (29.5%) 62.0% 14.7% (0.2%)
Stock Information
P/E (x) 25.0 15.4 13.5 13.5
Market cap: RM2,520m/US$803m Gross DPS (sen) 12.6 16.3 18.7 18.7
12-m price range: RM3.15 Dividend yield (%) 4.0% 5.2% 5.9% 5.9%
RM2.04 P/BV (x) 1.5 1.5 1.4 1.4
3-m avg daily vol: 1.0m ROE (%) 6.1% 9.7% 10.8% 10.3%
No. of shrs (m): 800 Net gearing (%) 1.5% 0.0% N/A N/A
Est. free float (%): 34.2 Net cash per share (RM) N/A N/A 0.02 0.09
Conv. secs (m): None P/FCFE (x) 11.2 15.6 17.2 18.8
Major shareholders (%): EV/EBITDA (x) 15.9 10.4 9.1 8.8
- Hap Seng Consolidated 52.5 % change in EPS estimates - -- -
- Innoprise 15.0 CIMB/Consensus (x) 1.02 0.92 0.88

3.3 5.00
Hap Seng Plantations is a pure oil palm player, with activities spanning estate
3.1
4.00 operations and milling activities. The group has no exposure to downstream palm oil
2.9
2.7 3.00 operations. As at 31 December 2009, it owned 34,467ha of planted oil palm estates in
2.5
2.00 Sabah, East Malaysia. Its estates are mostly located in Kinabatangan, which we
2.3
2.1
1.00 believe is one of the most fertile regions for oil palm in Sabah. On top of that, 96% of
1.9
0.00
its estates are located in one contiguous block, allowing the group to achieve better
Volume 1m (R.H.S ca le ) Ha p S e ng P la nta tions Holdings economies of scale. Approx. 87% of its total landbank of 39,803ha is planted with oil
Source: Bloomberg palms and 8.8% is reserved for infrastructure and nurseries.

Financial tables

(RM m, FYE Dec) 2009 2010F 2011F 2012F (FYE Dec) 2009 2010F 2011F 2012F
Revenue 373 432 473 483 Revenue growth (%) (13.1) 15.9 9.5 2.0
Operating expenses (213) (190) (198) (206) EBITDA growth (%) (19.6) 51.1 13.7 0.4
EBITDA 161 242 276 277 Pretax margins (%) 36.2 50.3 52.7 51.5
Depreciation & amortisation (24) (27) (29) (31) Net profit margins (%) 27.0 37.7 39.5 38.7
EBIT 136 216 247 246 Interest cover (x) 51.2 108.0 308.8 N/A
Net interest & invt income (1) 2 2 3 Effective tax rates (%) 25.5 25.0 25.0 25.0
Associates’ contribution 0 0 0 0 Net dividend payout (%) 75.0 60.0 60.0 60.0
Exceptional items 0 0 0 0 Debtors turnover (days) 18.6 19.4 18.0 19.5
Others 0 0 0 0 Stock turnover (days) 33.0 29.7 26.7 29.5
Pretax profit 135 218 249 249 Creditors turnover (days) 49.9 59.9 55.1 55.1
Tax (34) (54) (62) (62)
Minority interests 0 0 0 0
Net profit 101 163 187 187
Adj. wt. shares (m) 800 800 800 800
Unadj. year-end shares (m) 800 800 800 800

(RM m, end Dec) 2009 2010F 2011F 2012F (FYE Dec) 2009 2010F 2011F 2012F
Fixed assets 241 269 297 325 CPO price per tonne (RM) 2,303 2,500 2,750 2,750
Intangible assets 0 0 0 0 FFB output (000' tonnes) 667 705 705 716
Other long-term assets 1,645 1,645 1,645 1,645 FFB yield per ha (tonnes) 21 22 22 22
Total non-current assets 1,886 1,914 1,942 1,970 Immature area (ha) 1,712 1,912 2,112 1,612
Cash and equivalents 122 130 119 106 Mature area (ha) 32,532 32,332 32,332 32,832
Stocks 38 32 37 41 Planted area (ha) 34,244 34,244 34,444 34,444
Trade debtors 24 22 25 27 CPO extraction rate (%) 21.8% 21.8% 21.8% 21.8%
Other current assets 11 13 14 15 FFB growth (%) -15.0% 5.7% 0.0% 1.5%
Total current assets 196 196 195 188
Trade creditors 68 74 69 77
Short-term borrowings 80 80 80 35
Other current liabilities 6 6 6 6
Total current liabilities 154 160 155 118
Long-term borrowings 67 50 20 0
Other long-term liabilities 196 196 196 196
Total long-term liabilities 263 246 216 196
Shareholders’ funds 1,665 1,705 1,770 1,845
Minority interests 0 0 0 0
NTA/share (RM) 2.08 2.13 2.21 2.31

(RM m, FYE Dec) 2009 2010F 2011F 2012F
Pretax profit 249 218 249 249 20.0
Depreciation & non–cash adj. 24 27 29 31
Working capital changes (18) 13 (14) 1
18.0
Cash tax paid (53) (34) (54) (62)
Others 1 (2) (2) (3)
Cash flow from operations 203 221 207 215 16.0
Capex (28) (28) (28) (28)

Net investments & sale of FA (42) 0 0 0 14.0
Others 0 0 0 0
Cash flow from investing (70) (28) (28) (28) 12.0
Debt raised/(repaid) 90 (30) (30) (50)
Equity raised/(repaid) 0 0 0 0
10.0
Dividends paid (95) (60) (98) (112) Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10
Cash interest & others (15) (108) (62) (23)
Cash flow from financing (20) (199) (190) (186)
Change in cash 113 (5) (10) 1
Change in net cash/(debt) 23 25 20 51
Ending net cash/(debt) (25) 0 19 71

MALAYSIA
Hartalega Holdings RM5.39 @07/12/10
Hands down the best Target: RM8.43
Rubber Gloves
HART MK / HTHB.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Still an OUTPERFORM. In view of volatile natural rubber latex prices and customer
preference for protein-free synthetic nitrile gloves, Hartalega remains our top pick
as Malaysia’s largest nitrile glovemaker. We retain our EPS forecasts. Although we
also retain our valuation basis of 10% discount to our target market P/E, our target
price rises from RM8.03 to RM8.43 because of an upgrade of our target market P/E
from 13.8x to 14.5x. Potential re-rating catalysts include 1) better operating
efficiency, 2) higher output from refurbished lines, and 3) higher ASPs from selling
higher quality gloves.
• The reliable and efficient glovemaker. With 80% of sales coming from nitrile
gloves, Hartalega avoids the vagaries of the rubber latex market, which is highly
unpredictable due to weather and speculative financial flows. Furthermore,
Hartalega’s high level of automation and innovative culture lead us to believe that it
will maintain its 35% EBITDA margin over our FY11-13 forecast period.
• Large valuation gap. Hartalega trades at a single-digit P/E of 8.1x, which, in our
view, is unjustified given its 32% ROE and 18% 3-year EPS CAGR. We believe the
gap between Hartalega’s 8.1x multiple and our 14.5x target P/E will reduce as
investors increasingly appreciate its growth potential and sound fundamentals.
Financial summary
FYE Mar 2009 2010 2011F 2012F 2013F
Revenue (RM m) 443.2 571.9 711.5 821.7 899.4
EBITDA (RM m) 107.9 202.7 254.2 295.1 329.1
EBITDA margins (%) 24.3% 35.4% 35.7% 35.9% 36.6%
Net profit (RM m) 84.5 142.9 184.7 215.7 241.1
EPS (sen) 23.3 39.3 50.8 59.3 66.3
EPS growth (%) 21.5% 69.1% 29.3% 16.8% 11.8%
P/E (x) 23.2 13.7 10.6 9.1 8.1
Core EPS growth (%) 14.7% 82.2% 27.1% 16.8% 11.8%
Market cap: RM1,959m/US$625m Core P/E (x) 24.6 13.5 10.6 9.1 8.1
No. of shrs (m): 363 ROE (%) 39.0% 47.0% 43.7% 37.8% 32.6%
Est. free float (%): 37.7 Net gearing (%) 7.7% N/A N/A N/A N/A
Conv. secs (m): None Net cash per share (RM) N/A 0.09 0.30 0.65 0.91
- Hartalega Industries Sdn 50.4 EV/EBITDA (x) 18.3 9.5 7.3 5.8 5.0
- Budi Tenggara Sdn Bhd 7.4 % change in EPS estimates N/A N/A N/A
- Kelana Citra Sdn Bhd 4.5 CIMB/Consensus (x) 1.02 1.06 1.02

Hartalega is a leading global producer of nitrile gloves with a capacity of almost 9bn
5.00
5.6
4.00
gloves. The group began its manufacturing operations in 1988 and in the same year,
5.1
3.00
made its foray into the overseas market by exporting to the US. Since inception,
4.6
2.00 Hartalega has been focusing on R&D on automation systems to improve the
4.1
1.00 production efficiency and effectiveness of the group’s glove manufacturing operations.
3.6
0.00
It currently owns five manufacturing plants on a 25-acre site in Batang Berjuntai,
Volume 1m (R.H.Scale) Hartalega Holdings Selangor, which offers room for expansion.
Source: Bloomberg

Financial tables

Operating expenses (335) (369) (457) (527) (570) EBITDA growth (%) 25.8 87.9 25.4 16.1 11.5
Net interest & invt income (2) (2) 0 1 2 Effective tax rates (%) 11.5 19.5 20.0 20.0 20.0
Tax (11) (35) (46) (54) (60)
Net profit 85 143 185 216 241
Adj. wt. shares (m) 363 363 363 363 363

NTA/share (RM) 0.70 0.97 1.35 1.79 2.28

(RM m, FYE Mar) 2009 2010 2011F 2012F 2013F 12.0
Pretax profit 95 178 231 270 302
11.0
10.0
Working capital changes (23) (15) 6 (9) (7)
Cash tax paid (4) (22) (35) (46) (54) 9.0
Others 0 4 (19) 39 (21) 8.0

7.0
Capex (61) (67) (100) (100) (100)
6.0
Others 0 0 0 0 0 5.0
Debt raised/(repaid) 14 (15) (14) (12) (10) 3.0
2.0
Dividends paid (8) (45) (31) (53) (58) Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10
Cash interest & others (1) 0 (1) 1 2
Cash flow from financing 4 (59) (45) (64) (66)
Ending net cash/(debt) (19) 33 108 236 330

MALAYSIA
IJM Corp Bhd RM6.14 @07/12/10
Stoked by a merger play Target: RM6.95
Construction
IJM MK / IJMS.KL Sharizan Rosely +60 (3) 2084 9864 – sharizan.rosely@cimb.com
• Maintain OUTPERFORM. Apart from the positive construction outlook backed by

the implementation of 10MP and the government’s execution of the Economic
Transformation Programme (ETP), another growth catalyst for IJM is the impending
merger between IJM Land and MRCB in which IJM Corp is likely to emerge with the
largest stake. This move would enhance its RNAV by at least 40 sen to
RM7.35/share. We maintain our OUTPERFORM call but raise our RNAV-based
target price from RM6.95 to RM6.95 as we apply our revised target market P/E of
14.5x (13.8x before) to the construction component. Potential re-rating catalysts
include (i) contract awards, and (ii) positives from the merger.
• IJM emerges as a merger play. We view the proposed merger as overall positive
and value enhancing for IJM Corp. We estimate RNAV accretion of at least 40 sen
from RM6.85 to RM7.35, with more upside if MRCB’s other businesses, i.e. the toll
concessions, are rationalised and absorbed into IJM Corp. We make no changes to
our FY11-13 EPS forecasts pending finalisation of the deal which is expected no
earlier than end-2Q11.
• RM3.6bn order book with more upside. The top-up prospects for its order book
continue to be good as the group is vying for projects totalling as much as RM10bn.
Financial summary
FYE Mar 2009 2010 2011F 2012F 2013F
Revenue (RM m) 4,601.3 4,013.5 4,961.1 5,354.0 5,656.1
EBITDA (RM m) 618.8 567.5 747.7 775.2 814.1
EBITDA margins (%) 13.4% 14.1% 15.1% 14.5% 14.4%
Net profit (RM m) 290.2 332.6 377.8 393.4 417.0
EPS (sen) 22.0 24.6 27.9 29.1 30.8
EPS growth (%) 147.9% 11.7% 13.6% 4.1% 6.0%
P/E (x) 27.9 25.0 22.0 21.1 19.9
Core EPS (sen) 22.0 21.5 27.9 29.1 30.8
Core EPS growth (%) 9.8% (2.4%) 30.0% 4.1% 6.0%
Core P/E (x) 27.9 28.6 22.0 21.1 19.9
Stock Information
FD core EPS (sen) 20.4 20.0 25.9 27.0 46.6
Market cap: RM8,295m/US$2,636m FD core P/E (x) 30.1 30.8 23.7 22.8 13.2
No. of shrs (m): 1,351 ROE (%) 12.4% 14.2% 16.1% 16.6% 18.0%
Est. free float (%): 67.2 Net gearing (%) 80.6% 91.1% 82.3% 86.8% 91.1%
Conv. secs (m): 159 P/FCFE (x) 44.6 40.5 34.6 33.4 31.7
- Zelan 5.3 CIMB/Consensus (x) 0.93 0.82 0.76

6.5
1.20
IJM Corp has its beginnings in three construction companies which were merged in
6.0
1.00 order to compete more effectively with the foreign contractors that entered the local
5.5 0.80
market in the late 1970s. Over the years, IJM has made its presence felt, both
0.60
5.0
0.40
domestically and internationally, specifically in China, India, Argentina, Vietnam and
4.5
0.20 the UAE. Diversification has led the group into property and plantations while its 2007
4.0
0.00
acquisition of Road Builder enriched its portfolio with recurring income and property
Volume 10m (R.H.S ca le ) IJ M Corp Bhd ventures. The local construction sector continues to provide growth opportunities for
Source: Bloomberg the group while India’s robust infrastructure spending presents another key growth
area on the regional front.

Financial tables

Net interest & invt income (32) 8 (176) (180) (190) Effective tax rates (%) 24.0 26.8 25.2 25.3 25.3
Tax (127) (155) (130) (137) (145)
Net profit 290 333 378 393 417
Adj. wt. shares (m) 1,319 1,353 1,353 1,353 1,353

Fixed assets 168 83 129 41 (47) Construction margins (%) 7.2% 8.1% 8.1% 8.1%
Intangible assets 61 61 61 61 61 Orderbook replenishment (RM m) 1,000 1,000 1,000 1,000
Stocks 477 549 552 596 629
Trade debtors 2,692 3,097 3,116 3,362 3,552
Other current assets 2,394 1,619 1,657 1,657 1,657
Trade creditors 1,907 2,193 2,207 2,381 2,516
NTA/share (RM) 1.76 1.65 1.73 1.69 1.64

(RM m, FYE Mar) 2009 2010 2011F 2012F 2013F
Pretax profit 529 578 516 541 573 28.0
Cash tax paid (97) (107) (114) (132) (139) 23.0
Others 46 (2) 182 184 191
Capex (51) (56) (56) (56) (56) 18.0

Others 0 0 0 0 0

8.0
Change in cash (20) (31) 15 (1) 12
Change in net cash/(debt) (218) (223) 145 (75) (49)

MALAYSIA
NEUTRAL Maintained
IOI Corporation Bhd RM5.78 @07/12/10
Less fruitful than peers Target: RM6.54
Palm Oil & Rubber
IOI MK / IOIB.KL Ivy Ng Lee Fang CFA +60(3) 2084 9697 – ivy.ng@cimb.com
• Maintain NEUTRAL with a higher target price of RM6.54. We continue to rate IOI
Corp a NEUTRAL as the earnings upside from our more upbeat view on CPO price
is offset by the stock’s rich valuations and slower output growth relative to its peers.
Our earnings forecasts remain intact. However, we are raising our target price from
RM6.05 to RM6.54 as we up our target forward P/E from 17x to 18x, in line with our
upward revision of our target market P/E. Our new target price is based on a 25%
premium over our target market P/E of 14.5x in view of the strong liquidity of its
shares. For exposure to the sector, we prefer KL Kepong.
• Higher CPO price to drive 2011 earnings. We expect FY11 core earnings to jump
17%, thanks to higher CPO selling prices, stronger FFB production as the weather
normalises and better earnings contribution from its Singapore property projects.
There could be more upside to our earnings numbers if the group scoops up
earnings-accretive acquisitions.
• Beneficiary of recovering CPO price. We are more upbeat on 2011 CPO price in
view of the potential tightness in CPO supplies and strengthening of the ongoing La
Nina event, which may crimp soybean harvests from South America. Approximately
62% of IOI Corp’s earnings come from its upstream plantation division, which will
benefit from the recovering CPO price. Our sensitivity analysis suggests a 4%
earnings impact from every RM100/tonne change in CPO price.
Financial summary
FYE Jun 2009 2010 2011F 2012F 2013F
Revenue (RM m) 14,600.4 12,543.0 16,369.6 17,519.7 18,475.7
EBITDA (RM m) 1,954.3 2,879.7 3,024.3 3,300.2 3,436.8
EBITDA margins (%) 13.4% 23.0% 18.5% 18.8% 18.6%
Net profit (RM m) 983.9 2,035.7 2,090.8 2,345.8 2,511.2
EPS (sen) 15.1 31.3 31.3 35.1 37.6
EPS growth (%) (55.9%) 107.2% 0.0% 12.2% 7.1%
P/E (x) 38.3 18.5 18.5 16.5 15.4
Core EPS (sen) 22.2 24.3 29.9 35.1 37.6
Core EPS growth (%) (26.5%) 9.7% 23.1% 17.2% 7.1%
Core P/E (x) 26.1 23.8 19.3 16.5 15.4
FD core EPS (sen) 21.8 24.0 29.4 34.3 36.7
Stock Information
FD core P/E (x) 26.5 24.1 19.7 16.8 15.7
RM4.69 P/BV (x) 4.4 3.5 3.1 2.8 2.4
No. of shrs (m): 6,695 Net gearing (%) 35.3% 8.0% N/A N/A N/A
Est. free float (%): 58.8 Net cash per share (RM) N/A N/A 0.11 0.26 0.44
Conv. secs (m): 253.5 P/FCFE (x) (172.5) 17.3 8.1 20.2 22.1
- Progressive Holdings Sdn 41.8 % change in EPS estimates - - -

6.2
2.50
Incorporated in 1969 and listed in 1980, IOI Corp is an integrated plantation group. Its
6.0
5.8 2.00
palm oil business comprises plantation and downstream resource-based
5.6
5.4 1.50 manufacturing (oleochemical and speciality fats). The group is also the largest palm
5.2
5.0
1.00 oil owner in East Malaysia. It owned 154,709ha of planted oil palm estates as at 30
4.8
4.6
0.50 June 2010. Approximately 66% of palm oil estates are located in Sabah, 30% are in
4.4
0.00
Peninsular Malaysia and the remaining 4% in Indonesia. Downstream activities are
Volume 10m (R.H.S ca le ) IOI Corpora tion Bhd held under 100%-owned Loders Croklaan and IOI Oleochemical while property
Source: Bloomberg development is carried out by its property arm, IOI Properties.

Financial tables

Revenue 14,600 12,543 16,370 17,520 18,476 Revenue growth (%) (0.4) (14.1) 30.5 7.0 5.5
Tax (487) (486) (614) (715) (765)
Net profit 984 2,036 2,091 2,346 2,511
Adj. wt. shares (m) 6,522 6,512 6,685 6,685 6,685

Fixed assets 4,570 4,604 6,019 6,519 6,755 Mature area (ha) 139,500 142,500 145,500 148,500
Intangible assets 513 514 514 514 514 CPO price per tonne (RM) 2,372 2,710 2,800 2,800
Other long-term assets 4,868 5,035 4,926 5,136 5,431 FFB output (000' tonnes) 3,409 3,534 3,710 3,861
Total non-current assets 9,951 10,153 11,459 12,170 12,700 FFB yield per ha (tonnes) 24 25 26 26
Cash and equivalents 2,459 3,877 6,760 7,743 8,768 CPO extraction rate (%) 21.4% 21.4% 21.4% 21.4%
Stocks 1,647 1,575 1,884 2,016 2,016
Trade debtors 951 853 1,561 1,671 1,762
Other current assets 950 855 1,001 1,039 1,121
Short-term borrowings 199 409 1,088 1,088 1,088
Minority interests 426 289 1,143 1,191 1,191
NTA/share (RM) 1.24 1.58 1.76 2.01 2.29

(RM m, FYE Jun) 2009 2010 2011F 2012F 2013F
Pretax profit 1,551 2,551 2,758 3,109 3,328
Working capital changes (967) 632 1,770 (34) (82)

Cash tax paid (561) (544) (614) (715) (765)
25.0
Others 803 (231) 16 (65) (155)
Capex (422) (427) (500) (500) (500) 20.0
Others 0 0 0 0 0
Cash flow from investing (717) 489 (500) (500) (500) 15.0
Debt raised/(repaid) (401) (797) 1,266 0 (200)

Equity raised/(repaid) 11 1,200 (10) 2 2
10.0
Dividends paid (434) (1,018) (1,001) (1,173) (1,256) Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10
Cash interest & others 34 (1,108) (1,053) 103 389
Cash flow from financing (789) (1,723) (798) (1,068) (1,064)
Change in cash (437) 1,418 2,883 983 1,025
Change in net cash/(debt) (36) 2,215 1,617 983 1,225
Ending net cash/(debt) (3,095) (880) 737 1,720 2,945

MALAYSIA
JCY International RM0.80 @07/12/10
A dislocated disk Target: RM0.92
Technology Components
JCYH MK / JCYI.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Maintain UNDERPERFORM with target price of RM0.92. We believe near-term

earnings will remain hindered by the current soft HDD demand as JCY derives all of
its business from the HDD sector. Without the Christmas cheer and given the
seasonally weaker 1H, we think the market will only start turning positive in 2H11.
Other negative factors that could weigh on the bottomline include the weakening of
the US$ and wage pressure in Malaysia. Our target price of RM0.92 pegs JCY at 8x
CY12 P/E, in line with the industry peers. We prefer SGX-listed Broadway (BWAY
SP, S$1.03, Outperform) for HDD play at this moment.
• Stronger ringgit and rising labour costs are two key negatives. Although JCY
intends to accelerate the relocation of labour-intensive processes from Malaysia to
China, the process may take time to complete and the potential positive benefits are
not likely to be felt in the near term. Also, wages in China are rising rapidly. The
other concern we have is execution risk as China is relatively new for the group,
especially in Guangzhou.
• Longer-term beneficiary of industry consolidation. We think that major
component suppliers like JCY are in a good position to benefit from further market
consolidation in the HDD supply chain. HDD OEMs will prefer to work with “bigger”
suppliers that are able to offer multiple components, better pricing and the financial
power to grow with them. This is evident from JCY’s recent success in securing new
customers for base plates.
Financial summary
FYE Sep 2009 2010 2011F 2012F 2013F
Revenue (RM m) 1,758.0 2,044.6 2,112.3 2,439.7 2,701.9
EBITDA (RM m) 287.5 296.9 280.2 354.2 413.2
EBITDA margins (%) 16.4% 14.5% 13.3% 14.5% 15.3%
Net profit (RM m) 207.3 176.4 168.8 224.7 266.8
EPS (sen) 10.1 8.6 8.3 11.0 13.0
EPS growth (%) 2.2% (14.9%) (4.3%) 33.1% 18.7%
P/E (x) 7.9 9.3 9.7 7.3 6.1
Core EPS (sen) 10.1 9.3 8.3 11.0 13.0
Core EPS growth (%) 2.2% (8.0%) (11.4%) 33.1% 18.7%
Core P/E (x) 7.9 8.6 9.7 7.3 6.1
Stock Information
Gross DPS (sen) 5.1 3.9 4.1 5.5 6.5
Market cap: RM1,636m/US$521m Dividend yield (%) 6.3% 4.9% 5.2% 6.9% 8.2%
12-m price range: RM1.95 P/BV (x) 2.0 1.9 1.7 1.5 1.4
RM0.78 ROE (%) 25.5% 21.0% 18.3% 22.0% 23.3%
3-m avg daily vol: 7.2m Net gearing (%) N/A 24.5% 21.5% 16.9% 10.6%
No. of shrs (m): 2,045 Net cash per share (RM) 0.03 N/A N/A N/A N/A
Est. free float (%): 24.0 P/FCFE (x) 10.4 (58.0) 70.6 11.9 8.7
Major shareholders (%): % change in EPS estimates N/A N/A N/A
- Yong Yoon Kiong 76.0 CIMB/Consensus (x) 0.65 0.71 0.77

2.1 7.00 JCY International Bhd is a precision engineering manufacturer of hard disk drive
1.9
1.7
6.00
5.00
(HDD) mechanical components, with manufacturing facilities in Malaysia, Thailand
1.5 4.00 and China. Its principal activities include the manufacturing of base plates, top cover
1.3
1.1
3.00
2.00
assembly, actuator pivot flex assembly (APFA) and antidiscs, which are key
0.9 1.00 components of HDDs. JCY typically develops these components jointly with its HDD
0.7
Fe b-10 Ma y-10 Aug-10 Nov-10
0.00 customers.
Volume 10m (R.H.S ca le ) J CY Inte rna tiona l Bhd
Source: Bloomberg

Financial tables

Revenue 1,758 2,045 2,112 2,440 2,702 Revenue growth (%) (4.2) 16.3 3.3 15.5 10.7
Net interest & invt income (5) (8) (3) (4) (3) Effective tax rates (%) N/A 4.3 0.4 0.4 0.4
Others 5 (11) 2 3 3 Stock turnover (days) 39.1 35.2 37.9 36.0 36.1
Tax 1 (8) (1) (1) (1)
Net profit 207 176 169 225 267
Adj. wt. shares (m) 2,045 2,045 2,045 2,045 2,045

Fixed assets 643 754 799 850 880 Unit sales (million units) Baseplate 214 229 263 288
Intangible assets 0 0 0 0 0 Unit sales (million units) Top cover 126 144 174 196
Other long-term assets 48 19 19 19 19 Unit sales ( mn units) Actuator arm 80 84 97 109
Stocks 185 209 230 252 282
Trade debtors 345 367 401 439 496
Shareholders’ funds 803 880 964 1,076 1,210
NTA/share (RM) 0.39 0.43 0.47 0.53 0.59

(RM m, FYE Sep) 2009 2010 2011F 2012F 2013F
22.0
Pretax profit 206 184 170 226 268
20.0
Cash tax paid 0 (7) (8) (1) (1) 18.0
Others (1) (170) (1) (1) (2)

16.0
Capex (141) (226) (154) (179) (175) 14.0
Others 3 2 1 1 2 12.0

10.0
Dividends paid (60) (80) 0 (84) (112) Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10

Change in cash 94 (114) (54) 25 54
Ending net cash/(debt) 53 (215) (207) (182) (128)

MALAYSIA
JobStreet Corp Bhd RM2.88 @07/12/10
Doing a better job through more marketing Target: RM3.73
Technology - Others
JOBS MK / JOBT.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Maintain OUTPERFORM. We retain our OUTPERFORM call on Jobstreet and

expect the re-rating catalysts to be further market share gains and earnings
surprises. There are no changes to our EPS forecasts or target price of RM3.73,
which we continue to peg to a 20% discount to its peers or 22.6x P/E.
• Spending to grow market share. Jobstreet raised its marketing spend in 2010 to
capture more market share, especially in its weakest core market, Singapore. Its
efforts have paid off as it has closed the gap down south and is no longer seeing a
job posting deficit of 4-5K per month. Job posting volumes are also rising in its other
two core markets where its lead over its rivals has not been eroded.
• Still positive outlook for 4Q. While there was a slightly more downbeat feel to
Jobstreet’s 4Q10 job outlook compared to 3Q, most respondents were still generally
positive about the job outlook. The expectations for job growth remain fairly high
and growth in jobs for the next 12 months is expected to improve. But employers
appear to be less optimistic about hiring activities than a quarter ago.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 102.3 92.3 111.5 125.9 140.0
EBITDA (RM m) 47.2 36.9 47.3 54.5 61.0
EBITDA margins (%) 46.2% 40.0% 42.4% 43.3% 43.6%
Net profit (RM m) 32.8 26.7 37.5 46.5 51.9
EPS (sen) 10.6 8.6 11.9 14.8 16.5
EPS growth (%) 12.6% (18.7%) 38.7% 23.8% 11.8%
P/E (x) 27.2 33.4 24.1 19.5 17.4
Stock Information
Core EPS (sen) 12.5 8.6 11.9 14.8 16.5
Market cap: RM916m/US$292m Core EPS growth (%) 30.6% (31.0%) 38.7% 23.8% 11.8%
RM1.41 Gross DPS (sen) 4.7 4.0 7.8 9.6 10.8
No. of shrs (m): 318 P/BV (x) 8.2 7.1 6.2 5.4 4.7
- Seek 22.4 EV/EBITDA (x) 17.8 22.8 18.0 15.2 13.2
- Fidelity 12.0 % change in EPS estimates N/A N/A N/A
- Mark Chang 10.7 CIMB/Consensus (x) 1.02 1.03 1.00

3.1 1.60 Jobstreet is Malaysia’s premier online recruitment, with operations in the Philippines
2.9
2.7
1.40
1.20
(market leader), Singapore (#2 spot), India (#3 spot), Indonesia (#3 spot), Japan,
2.5
2.3
1.00 Thailand (new entrant) and Hong Kong. It was first to market in Malaysia and has
0.80
2.1
1.9
0.60 focused on building its brand over the past 12 years. The company provides staff
1.7
1.5
0.40
0.20
recruitment services and payroll management for corporations in addition to online
1.3
0.00
recruitment services. It listed on the Mesdaq market (now Ace Market) in 2004 and
Volume 1m (R.H.S ca le ) J obS tre e t Corp Bhd transferred to the Main Board at end-07. About 63% of Jobstreet’s 9M10 revenue was
Source: Bloomberg derived from Malaysia, 19% from Singapore, 14% from the Philippines and the
balance from its other markets.

Financial tables

Associates’ contribution (1) (1) 3 7 9 Net dividend payout (%) 32.7 34.5 48.9 48.9 48.9
Tax (5) (7) (12) (14) (15)
Net profit 33 27 38 46 52
Adj. wt. shares (m) 310 310 314 314 314

Fixed assets 14 14 14 14 14 Paid job postings (number) 316,132 363,552 436,262 527,877
Intangible assets 3 3 3 3 3 Active customer accounts 59,501 65,452 71,997 79,916
Stocks 0 0 0 0 0
NTA/share (RM) 0.34 0.40 0.45 0.53 0.61

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 40 36 51 62 70 20.0
Working capital changes (4) 0 1 2 2
18.0
Cash tax paid (5) (7) (12) (14) (15)
Others 15 3 (1) (5) (6)
Capex (1) (1) (2) (2) (2)

Net investments & sale of FA (32) (21) (14) 0 0 14.0
Others 0 0 0 0 0
10.0
Change in cash (4) 2 8 23 26

MALAYSIA
NEUTRAL Maintained
JT International Bhd RM6.03 @07/12/10
Keeping the fire alive Target: RM6.35
Tobacco
RJR MK / JTIN.KL Loke Wei Wern +60 (3) 2084 9946 – weiwern.loke@cimb.com
• Maintain NEUTRAL. JT International (JTI)’s comeback in terms of market share is

encouraging. But prospects are likely to be weighed down by the tough industry
fundamentals. In 2011, JTI will have to grapple with the high level of illicit trade and
the potential decline in demand due to the hefty 8-9% price hike in October. We,
therefore, remain NEUTRAL on the stock with an unchanged DDM-based target
price of RM6.35 (COE 7.7%, LTG 1.5%). The stock should be supported by its
decent dividend yield of 5%.
• Continued brand investments to sustain growth. JTI has finally regained its
footing after coming under intense competitive pressure over the past few years.
Winston and Mild Seven are faring well and should sustain their growth momentum
given JTI’s continuous investments in the two brands. But the recent repositioning
of British American Tobacco (ROTH MK; Underperform)’s Peter Stuyvesant as a
value-for-money (VFM) brand will inevitably raise the bar in the VFM segment. Now
that Peter Stuyvesant has joined the fray, BAT has two brands in the VFM segment,
which is JTI’s mainstay.
• JTI unlikely to mimic brand repositioning strategy. Despite the intensifying
competition, we think JTI is unlikely to mimic its rivals’ move of repositioning its
existing brands. Beginning July 2010, tobacco manufacturers need the Ministry of
Health’s approval for any changes in their cigarette prices. This makes brand
repositioning more difficult as tobacco manufacturers will have to ensure that there
is a substantial change in the product to justify a price change.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 1,038.5 1,158.2 1,223.5 1,297.3 1,317.4
EBITDA (RM m) 147.7 163.7 173.1 183.8 188.6
EBITDA margins (%) 14.2% 14.1% 14.2% 14.2% 14.3%
EPS (sen) 37.5 41.4 43.8 47.1 48.9
Market cap: RM1,577m/US$501m EPS growth (%) 21.1% 10.3% 5.8% 7.5% 3.7%
RM4.78 Gross DPS (sen) 67.8 30.0 30.0 30.0 35.0
No. of shrs (m): 262 P/BV (x) 3.4 5.0 4.2 3.6 3.2
- JT International BV 60.4 EV/EBITDA (x) 8.9 8.9 8.1 7.3 6.8
- PNB 5.1 CIMB/Consensus (x) 0.94 0.96 0.96

6.5
6.3
4.00 JT International (JTI) is 60.4% owned by JT International Holding BV. It is involved in
3.50
6.1
5.9
3.00
the manufacturing, marketing and sale of tobacco products primarily in Malaysia.
5.7
5.5
2.50
2.00
Previously known as RJ Reynolds until the takeover of RJR’s global brands by JTI, it
5.3
5.1
1.50 is the second biggest player in the Malaysian tobacco industry, which is dominated by
4.9
4.7
1.00
0.50
British American Tobacco (BAT). JTI’s portfolio of brands includes Winston, Mild
4.5
0.00
Seven, Salem, Camel, More and Mine. While BAT is ahead of JTI in terms of total
Volume 100k (R.H.S ca le ) J T Inte rna tiona l Bhd market share, JTI dominates the value-for-money (VFM) segment via its Winston
Source: Bloomberg brand.

Financial tables

Operating expenses (891) (994) (1,050) (1,114) (1,129) EBITDA growth (%) 13.3 10.9 5.8 6.1 2.6
Tax (36) (35) (40) (43) (45)
Net profit 98 108 115 123 128
Adj. wt. shares (m) 262 262 262 262 262

Fixed assets 102 121 121 122 124 Industry volume growth (% growth) -11.7% -3.0% -5.0% 0.0%
Other long-term assets 5 5 5 5 5 Excise duties (RM per kg) 190.00 220.00 220.00 220.00
Stocks 88 76 80 85 86
NTA/share (RM) 1.77 1.21 1.42 1.67 1.89

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 14.0
Pretax profit 134 144 155 166 173
13.5
13.0
Cash tax paid (41) (36) (35) (40) (43) 12.5
Others (16) (12) (14) (7) (18) 12.0

11.5
Capex (20) (22) (23) (24) (24)
11.0
Net investments & sale of FA 1 (18) 0 0 0
Others 8 2 0 0 0 10.5
9.5
9.0
Change in cash (17) (142) 46 59 57

MALAYSIA
Kencana Petroleum Bhd RM2.01 @07/12/10
Drilling for more growth Target: RM2.60
KEPB MK / KENP.KL Norziana Mohd Inon +60(3) 2084 9645 – norziana.inon@cimb.com
• Maintain OUTPERFORM. We maintain our forecasts but raise our target price
from RM2.28 to RM2.60, pegged to a revised target market P/E of 14.5x (13.8x
previously). Kencana remains an OUTPERFORM, with the potential re-rating
triggers being 1) active order book replenishment, 2) a new JV partner and 3) M&A.
• RM2.1bn order book and rising. Management has been consistently delivering its
promise to expand the order book. YTD, Kencana has secured 13 new contracts,
worth a collective RM1bn, taking its outstanding order book to RM2.1bn. The all-
time high is RM2.8bn recorded in Oct-Dec 08. The company is eyeing sizeable
deals worth a collective RM5.2bn in Malaysia and at least US$300m in India.
• KM1 extends Kencana’s expertise. Drilling rig KM1 is on a 5-year, RM729m
Petronas Carigali drilling contract which accounts for 34% of Kencana’s current
orders. The contract commenced on 2 Sep 10 and the rig started drilling in the final
week of Sep at a daily charter rate of US$130,000/day, higher than the average
global rate of US$115,628/day. Kencana is the first Malaysian company to build,
own and operate a drilling rig. KM1 could be the start of more rigs to come.
• A JV partner in McDermott? We understand that McDermott may surface as a JV
partner of Kencana. Kencana could be interested in working with McDermott to
build a pipeline installation business after its attempt with US-based Global failed.
Following the breakdown of the JV with Global in May, Kencana has maintained its
interest in owning and operating pipelay barges, either by going it alone or by roping
in a partner.
Financial summary
FYE Jul 2009 2010 2011F 2012F 2013F
Revenue (RM m) 1,140.8 1,089.7 1,702.5 2,686.0 3,146.0
EBITDA (RM m) 174.9 196.7 310.5 373.1 396.1
EBITDA margins (%) 15.3% 18.1% 18.2% 13.9% 12.6%
Net profit (RM m) 118.5 135.8 213.2 270.8 279.3
EPS (sen) 13.1 10.1 12.9 16.3 16.8
EPS growth (%) 39.0% (23.1%) 27.4% 27.0% 3.1%
Stock Information
P/E (x) 15.3 19.9 15.6 12.3 11.9
RM1.27 P/BV (x) 8.0 10.7 10.6 9.7 9.1
No. of shrs (m): 1,659 Net gearing (%) 7.9% 3.8% N/A N/A N/A
Est. free float (%): 53.0 Net cash per share (RM) N/A N/A 0.00 0.01 0.01
- Khasera Baru Sdn Bhd 38.6 % change in EPS estimates - - -

2.2 3.50
Kencana is involved in fabrication, drilling and marine support activities. It is one of
2.0
3.00 seven Petronas-licensed fabricators of offshore structures. This essentially allows it to
1.8
2.50
2.00
bid for fabrication contracts tendered by production-sharing contractors in Malaysia.
1.6 1.50 At present, the company’s yard in Lumut spans 169 acres with capacity of 60,000
1.00
1.4
0.50
tonnes p.a. Its covered yard space of 30,000 sq m allows the welders to work 24/7 in
1.2
0.00
all weather conditions. In CY08, Kencana started the fabrication of its first drilling rig
Volume 10m (R.H.S ca le ) Ke nca na P e trole um Bhd KM1. The company also owns two AHTS vessels, namely 67%-owned 5,500HP KPV
Source: Bloomberg Kapas and wholly-owned 8,080HP KPV Gemia.

Financial tables

(RM m, FYE Jul) 2009 2010 2011F 2012F 2013F (FYE Jul) 2009 2010 2011F 2012F 2013F
Revenue 1,141 1,090 1,703 2,686 3,146 Revenue growth (%) (21.4) (4.5) 56.2 57.8 17.1
Associates’ contribution 0 (1) 1 1 1 Net dividend payout (%) 8.2 10.7 14.0 15.4 19.2
Tax (35) (36) (89) (94) (109)
Net profit 118 136 213 271 279
Adj. wt. shares (m) 903 1,346 1,658 1,658 1,658
Unadj. year-end shares (m) 903 1,346 1,658 1,658 1,658

(RM m, end Jul) 2009 2010 2011F 2012F 2013F (FYE Jul) 2010 2011F 2012F 2013F
Fixed assets 147 153 192 200 199 Overseas rev contribution (%) 55.0% 55.0% 55.0% 55.0%
Intangible assets 1 1 1 1 1 Order book (RM m) 2,500 2,500 2,500 2,500
Other long-term assets 4 5 5 6 6 Size of fabrication yard (acres) 169 169 169 169
Total non-current assets 152 159 198 207 207 Yard annual capacity (tonnes) 60,000 60,000 60,000 60,000
Cash and equivalents 99 109 120 132 145 Yard utilisation rate (%) 80.0% 80.0% 80.0% 80.0%
Stocks 26 29 32 35 39
Trade debtors 330 363 399 439 483
NTA/share (RM) 0.25 0.19 0.19 0.21 0.22

(RM m, FYE Jul) 2009 2010 2011F 2012F 2013F 15.0
Pretax profit 153 171 302 364 388
14.0
13.0
Cash tax paid (32) (44) (55) (89) (94) 12.0
Others 183 187 182 181 181 11.0

10.0
Capex (35) (35) (34) (33) (32)
9.0
Others 0 4 7 11 13 8.0
Debt raised/(repaid) (3) 2 1 2 2 6.0
5.0
Ending net cash/(debt) (18) (10) 0 10 21

MALAYSIA
KLCC Property Holdings Bhd RM3.53 @07/12/10
Switch to REITs or developers Target: RM3.03
Property Investment
KLCC MK / KCCP.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Maintain UNDERPERFORM. We continue to prefer property developers to

property investment companies as developers will benefit from the record sales
achieved in 2010. We make no changes to our EPS forecasts or RM3.03 target
price, which we continue to base on a 40% discount to its fully diluted RNAV of
RM5.05. The stock remains an UNDERPERFORM in light of the potential de-rating
catalysts of 1) investor preference for property developers, and 2) shift in interest to
large-cap REITs with much higher yields. Investors seeking stable rental income,
higher yields and accretive acquisitions should plump for Axis REIT (AXRB MK; Not
Rated).
• Higher yields from REITs. We maintain our preference for property developers
over property investment companies as developers will benefit from the record
sales achieved in 2010. Also, some developers are merging into very large property
companies that are more investable. Moreover, the oversupply of office space and
hotel rooms will limit upside to rental income from the group’s investment
properties. For investors seeking stable yields, Malaysian REITs provide far better
returns than KLCC Prop. The listing of large REITs such as Sunway REIT (SREIT
MK; Not Rated) and CapitaMalls Malaysia (CMMT MK; Not Rated) also provides
investors with an alternative to KLCC Prop.
Financial summary
FYE Mar 2009 2010 2011F 2012F 2013F
Revenue (RM m) 861.2 881.3 917.8 1,003.2 1,148.0
EBITDA (RM m) 661.0 683.0 739.3 777.2 833.2
EBITDA margins (%) 76.7% 77.5% 80.6% 77.5% 72.6%
Pretax profit (RM m) 1,032.2 1,291.5 576.1 618.5 686.7
Net profit (RM m) 646.8 896.6 259.1 281.9 323.7
EPS (sen) 69.2 96.0 27.7 30.2 34.7
EPS growth (%) 16.2% 38.6% (71.1%) 8.8% 14.8%
P/E (x) 5.1 3.7 12.7 11.7 10.2
Core EPS (sen) 25.1 25.7 27.7 30.2 34.7
Core EPS growth (%) 6.7% 2.4% 7.8% 8.8% 14.8%
Stock Information
Core P/E (x) 14.1 13.7 12.7 11.7 10.2
RM2.75 Gross DPS (sen) 14.0 14.7 15.0 15.0 15.0
No. of shrs (m): 934 P/BV (x) 0.7 0.6 0.6 0.6 0.6
Conv. secs (m): 358 Net gearing (%) 19.8% 16.2% 16.1% 15.9% 15.7%
Major shareholders (%): P/FCFE (x) (24.4) (13.1) 42.1 11.7 10.4
- Petroliam Nasional Berhad 52.6 EV/EBITDA (x) 11.1 11.1 10.5 10.2 9.7
- Employees Provident Fund 12.3 % change in EPS estimates N/A N/A N/A
- Valuecap Sdn Bhd 3.7 CIMB/Consensus (x) 0.82 1.08 1.04

3.8
KLCC Prop was incorporated in Feb 04 and acquired from its holding company
20.00
3.6
interests in numerous buildings and two vacant plots of land in the 100-acre KLCC
3.4
3.2
15.00
Development. It owns only selected properties within KLCC Development and not the
3.0
10.00
entire project, which includes other development activities. The only building owned
2.8
5.00
by KLCC Prop that is not part of KLCC Development is Kompleks Dayabumi. KLCC
2.6
0.00
Prop’s assets include 50.5% of Petronas Twin Towers, 60% of Suria KLCC, 33% of
Volume 1m (R.H.S c a le ) KLCC P rope rty Holding s Bhd Menara Maxis, 100% of Menara ExxonMobil, 75% of Mandarin Oriental Hotel and
Source: Bloomberg 100% of Lot C and Lot D1 development land.

Financial tables

Revenue 861 881 918 1,003 1,148 Revenue growth (%) 2.2 2.3 4.1 9.3 14.4
Pretax profit 1,032 1,291 576 619 687 Creditors turnover (days) 14.3 22.2 16.1 8.2 8.0
Tax (195) (173) (144) (155) (172)
Net profit 647 897 259 282 324
Adj. wt. shares (m) 934 934 934 934 934

Fixed assets 885 1,021 1,039 1,055 1,070 Mandarin Oriental occupancy (%) 55.0% 57.0% 59.0% 61.0%
Intangible assets 0 0 0 0 0 Mandarin Oriental room rate (RM) 635.00 654.05 673.67 693.88
Other long-term assets 9,107 9,864 10,091 10,102 10,334 Suria KLCC occupancy rates (%) 100.0% 100.0% 100.0% 100.0%
Total non-current assets 9,992 10,885 11,130 11,157 11,404 Suria KLCC rental (RMpsf/month) 22.27 23.16 24.08 25.05
Cash and equivalents 579 601 541 487 438 Twin Towers rental (RMpsf/month) 8.52 8.75 8.98 9.22
Stocks 1 1 0 0 1
NTA/share (RM) 5.10 5.69 5.85 6.04 6.28

(RM m, FYE Mar) 2009 2010 2011F 2012F 2013F 0.90
Pretax profit 1,032 1,291 576 619 687
Working capital changes 11 17 (22) (1) (1) 0.80
Cash tax paid (119) (141) (285) (103) (90)
Others 104 113 121 115 101 0.75
Cash flow from operations 1,061 1,317 432 673 743 0.70
Capex (78) (172) (60) (60) (60)
Others (317) (409) 0 0 0 0.60
Cash flow from investing (922) (1,338) (287) (72) (292)
Debt raised/(repaid) (134) (101) 68 (191) (18) 0.55
Change in cash (34) 18 30 (226) (48)
Change in net cash/(debt) 100 119 (38) (35) (31)

MALAYSIA
Kossan Rubber Industries Bhd RM3.34 @07/12/10
Handled with care Target: RM5.41
Rubber Gloves
KRI MK / KRIB.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Maintain OUTPERFORM. Kossan remains an OUTPERFORM despite a tweaking

of our target price from RM5.44 to RM5.41 following 4-6% cuts in our FY10-13 EPS
for higher cost assumptions. Our valuation basis is 10.2x, still based on a 30%
discount to Top Glove’s CY11 target P/E which we have raised from 13.8x to 14.5x.
Potential re-rating catalysts include 1) new orders from Japanese and US original
glove brands, 2) high utilisation rates, and 3) margin improvement from higher nitrile
sales and productivity gains.
• Trusted and proven. MNCs account for 80% of Kossan’s sales, giving Kossan one
of the highest MNC exposures in the sector. We view this positively as large MNCs
require detailed and thorough audits on their contract manufacturers. Kossan’s
relationships with some well-established MNC clients date back more than 10
years, putting the company on a good footing to benefit from outsourcing trends.
• Good handling of headwinds. Kossan maintained EBITDA margins at 17.8%
during 3Q10 despite a firmer ringgit and a 20% rise in rubber latex prices. We
attribute the stable margins to management’s ability to manage customers’ price
expectations and accurately hedge its forex exposure. We expect EBITDA margins
to improve 1-2% p.a. on the back of a better product mix.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 897.2 842.1 1,209.5 1,343.9 1,489.9
EBITDA (RM m) 107.9 128.5 198.7 242.8 287.8
EBITDA margins (%) 12.0% 15.3% 16.4% 18.1% 19.3%
Net profit (RM m) 58.6 66.7 118.5 144.7 170.4
EPS (sen) 18.3 20.9 37.1 45.3 53.3
EPS growth (%) 6.5% 13.7% 77.8% 22.1% 17.7%
P/E (x) 18.2 16.0 9.0 7.4 6.3
Core EPS growth (%) 8.8% 104.1% (0.9%) 22.1% 17.7%
No. of shrs (m): 320 ROE (%) 21.3% 20.3% 29.0% 27.6% 25.7%
- Kossan Holdings Sdn Bhd 51.8 EV/EBITDA (x) 11.9 9.7 6.0 4.5 3.4
- Kumpulan Wang Persaraan 7.0 % change in EPS estimates (3.6%) (5.9%) (5.4%)
- Asian Small Companies 4.9 CIMB/Consensus (x) 1.01 1.13 1.21

4.3
3.00 Kossan Rubber Industries was established in 1979 when the company offered a
2.50
range of cutless bearings that were often used in the marine industry. The company
3.8
2.00
1.50
diversified into rubber glove manufacturing in 1988. It listed on the Main Board of
3.3
1.00
Bursa Malaysia in 1996 and today has 124 glove production lines producing 12.5bn
2.8
0.50 pieces per annum. The company has a diversified mix of natural rubber and nitrile
2.3
0.00
glove products, representing 40% and 60% of capacity, respectively. Kossan also
Volume 1m (R.H.Scale) Kossan Rubber Industries Bhd manufactures high technical input rubber products for a wide range of applications
Source: Bloomberg including the automotive and marine sectors.

Financial tables

Revenue 897 842 1,210 1,344 1,490 Revenue growth (%) 27.7 (6.1) 43.6 11.1 10.9
Tax (14) (18) (34) (44) (54)
Net profit 59 67 119 145 170
Adj. wt. shares (m) 320 320 320 320 320

Trade debtors 161 193 230 255 283
NTA/share (RM) 0.93 1.12 1.44 1.84 2.30

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 11.0
Pretax profit 73 86 153 189 226
10.0
Working capital changes 0 0 0 0 0 9.0
Cash tax paid (14) (18) (34) (44) (54)
Others (60) (28) (26) (18) (25) 8.0

7.0
Capex (66) (41) (60) (60) (60)
Others 0 4 0 0 0
5.0
Debt raised/(repaid) 2 (32) 6 6 7 4.0
3.0
Change in cash (51) (4) 64 99 121
Ending net cash/(debt) (210) (182) (124) (32) 83

MALAYSIA
Kuala Lumpur Kepong Bhd RM21.58 @07/12/10
Tapping into higher rubber and CPO prices Target: RM25.00
Palm Oil & Rubber
KLK MK / KLKK.KL Ivy Ng Lee Fang CFA +60(3) 2084 9697 – ivy.ng@cimb.com
• Maintain TRADING BUY with higher target price of RM25.00. KL Kepong

remains a TRADING BUY as it is a prime beneficiary of rising CPO and rubber
prices and should see strong FFB output growth in 2011. Our earnings forecasts
are unchanged but our SOP-based target price is increased from RM22.84 to
RM25.00 as we now value its plantation division at 18x P/E (16x prev), a 24%
premium over our revised target market P/E, in view of our more bullish outlook for
CPO price. KL Kepong remains our pick of the crop in Malaysia.
• Upbeat earnings prospects for 2011. We expect the group to record earnings
growth of 13% in 2011, driven by (1) increased FFB output due to higher yields from
its young estates and new mature areas, (2) stronger earnings from its
manufacturing division as a result of higher capacity and improved demand for
oleochemical products, and (3) higher earnings contribution from its retail division
following successful restructuring efforts.
• Projecting 14% growth in FFB production. In view of the young age profile for its
estates, the group is expected to post 14% growth in FFB output in FY9/11, fuelled
mainly by new mature areas as well as rising yields. The oleochemical division is
expected to benefit from the acquisition of Uniqema in Germany which was
completed in 4QFY10. We are also positive on its retail unit, which turned around in
FY10 following a successful restructuring. Property sales are expected to pick up
when the group launches new property projects in the coming financial year.
Financial summary
FYE Sep 2009 2010 2011F 2012F 2013F
Revenue (RM m) 6,658.3 7,490.6 8,972.6 9,565.0 10,158.0
EBITDA (RM m) 1,102.7 1,637.9 1,861.0 2,042.0 2,094.4
EBITDA margins (%) 16.6% 21.9% 20.7% 21.3% 20.6%
Net profit (RM m) 612.5 1,012.3 1,143.0 1,265.2 1,296.1
EPS (sen) 57.4 94.8 107.1 118.5 121.4
Stock Information EPS growth (%) (41.1%) 65.3% 12.9% 10.7% 2.4%
No. of shrs (m): 1,068 ROE (%) 11.0% 17.4% 18.0% 18.2% 17.2%
- Batu Kawan 45.7 % change in EPS estimates - - -

22.7 0.70
KL Kepong is one of the top plantation companies in Malaysia. It was listed on the
21.7 0.60
20.7
0.50
Main Board of Bursa in Feb 1974. Although plantations remain its core business, it
19.7
18.7
0.40 has expanded downstream into resource-based manufacturing, in particular,
17.7
0.30
0.20
oleochemicals, cocoa processing and rubber processing. It is also involved in property
16.7
15.7 0.10 development as well as retailing (100%-owned Crabtree & Evelyn). The group has an
14.7
0.00
18% stake in Yule Catto, which is listed on the London Stock Exchange. KLK owns
Volume 10m (R.H.S ca le ) Kua la Lumpur Ke pong Bhd 170,071ha of planted oil palm and rubber estates, which are located in Peninsular
Source: Bloomberg Malaysia (41%), East Malaysia (26%) and Indonesia (33%).

Financial tables

EBIT 885 1,404 1,604 1,765 1,798 Interest cover (x) 12.9 24.1 26.7 32.1 36.0
Tax (245) (316) (381) (421) (432)
Net profit 613 1,012 1,143 1,265 1,296
Adj. wt. shares (m) 1,068 1,068 1,068 1,068 1,068

Fixed assets 2,488 2,569 3,037 3,280 3,503 CPO price per tonne (RM) 2,402 2,620 2,737 2,737
Other long-term assets 2,600 2,877 2,677 2,723 2,772 FFB yield per ha (tonnes) 23 22 23 23
Total non-current assets 5,415 5,768 6,043 6,331 6,604 Mature area (ha) 157,041 169,041 184,041 194,041
Cash and equivalents 1,292 1,255 756 979 1,201 CPO extraction rate (%) 21.0% 21.5% 21.5% 21.5%
Stocks 882 1,288 1,515 1,616 1,716 FFB growth (%) 11.1% 14.4% 10.7% 5.7%
Trade debtors 628 328 718 762 811
Short-term borrowings 1,123 580 800 800 800
Long-term borrowings 627 1,107 600 600 600
Total long-term liabilities 923 1,568 895 895 895
NTA/share (RM) 4.97 5.32 5.95 6.48 7.00

(RM m, FYE Sep) 2009 2010 2011F 2012F 2013F 26.0
Pretax profit 887 1,383 1,586 1,755 1,798
Working capital changes 134 (356) (548) (132) (128)

22.0
Cash tax paid (356) (296) (316) (381) (421)
Others 31 (181) 52 44 35
20.0
Cash flow from operations 914 784 1,031 1,563 1,579
Capex (371) (333) (500) (500) (500) 18.0
Others 0 0 0 0 0 16.0

Debt raised/(repaid) (39) (39) (287) 0 0 14.0
12.0
Cash flow from financing (532) (533) (1,033) (837) (856)
Change in cash 124 (13) (502) 226 222

MALAYSIA
Kurnia Asia Bhd RM0.35 @07/12/10
Murky earnings outlook Target: RM0.20
Insurance - General
KUAB MK / KURN.KL Winson Ng Gia Yann CFA +60(3) 2084 9686 – winson.ng@cimb.com
• Maintain UNDERPERFORM. In view of the murky earnings outlook, we maintain

our UNDERPERFORM call on Kurnia, with the potential de-rating catalysts being (1)
its still-high claims ratio, (2) slowdown in premium growth, and (3) high FY12 P/E of
14.1x against an ROE of 9.7%. We retain our EPS forecasts and target price of
RM0.20, pegged to an unchanged target CY12 P/E of 8x. For exposure to the
insurance sector, we prefer Maybank and AMMB.
• Volatile earnings trend. Despite the strong investment income of RM20m-30m,
earnings have been volatile for the past three quarters, with net profit of RM23.8m in
1Q10 and RM3.2m in 2Q10 and a net loss of RM3.7m in 3Q10. This reflects the
tough operating environment, which will continue to dilute the positive impact of the
company’s transformation programme.
• Key risk from high claims ratio. Kurnia enjoyed a 19.2% yoy jump in 3Q10 gross
premium but this may not translate into a similar growth at the bottomline if the
claims ratio remains high. The claims ratio had been volatile, rising from 66-68% in
1-2Q10 to 81.5% in 3Q10. This leads us to forecast a high claims ratio of 73% for
FY11-12. For this reason, we are projecting only RM36m-37m net profit in FY11-12,
compared to the RM112.2m recorded in CY09 when the claims ratio was only 67%.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Gross premium (RM m) 1,121.8 977.7 1,023.8 1,095.5 1,161.2
Investment & other income (RM m) 81.3 85.2 90.0 91.8 93.6
Revenue (RM m) 1,011.2 854.3 901.0 964.1 1,021.9
Stock Information Operating profit (RM m) (314.4) 102.4 47.6 47.8 49.8
Market cap: RM525m/US$167m (301.8) 112.2 32.4 35.8 37.3
Net profit (RM m)
12-m price range: RM0.76 (20.1) 7.5 2.2 2.4 2.5
EPS (sen)
RM0.35 (12,174% 137% (71%) 11% 4%
EPS growth (%)
3-m avg daily vol: 0.6m nm 4.7 16.2 14.7 14.1
P/E (x)
No. of shrs (m): 1,500 0.0 0.0 0.0 0.0 0.4
Gross DPS (sen)
Est. free float (%): 37.6 0.0% 0.0% 0.0% 0.0% 1.1%
Dividend yield (%)
Conv. secs (m): None 3.5 1.7 1.6 1.4 1.3
P/BV (x)
Major shareholders (%): (97.8%) 49.6% 10.2% 10.2% 9.7%
ROE (%)
- Tan Sri Kua Sian Kooi 51.7
% change in EPS estimates - - -
- Datuk Kua Chung Sen 4.9
CIMB/Consensus (x) 0.90 0.61 0.58

0.8
0.8
1.40
Kurnia Asia was incorporated on 16 Feb 01. On 21 Nov 02, it was converted to a
1.20
0.7
0.7 1.00
public limited company with the present name. Its key subsidiary, Kurnia Insurans
0.6
0.6
0.80 (Malaysia) Berhad is one of the largest general insurance companies in Malaysia with
0.5
0.5
0.60
0.40
gross premium of more than RM1bn, of which about 80%+ is generated from the auto
0.4
0.4
0.20 insurance segment. Kurnia has been pushing for regional expansion with the following
0.3
0.00
moves (1) acquisition of 80% of Kurnia Insurans Indonesia in 2007, and (2) acquisition
Volume 10m (R.H.Scale) Kurnia Asia Bhd of a 26.3% stake in Kurnia Insurance (Thailand). In Jul 07, the group embarked on a
Source: Bloomberg transformation programme to revamp its underwriting portfolio and achieve greater
operating efficiency.

Financial tables

Gross premium 1,122 978 1,024 1,095 1,161 Gross premium growth (%) 1.0 (12.8) 4.7 7.0 6.0
Reinsurance (111) (123) (123) (131) (139) Net premium growth (%) (1.1) (15.5) 5.5 7.0 6.0
Net premium 1,011 854 901 964 1,022 Operating profit growth (%) (2,464. 132.6 (53.5) 0.3 4.3
(Inc)/Dec in UPR (5) 59 (81) (87) (92) Pretax margins (%) 2)
(31.2) 11.2 5.8 5.4 5.4
Net commissions (98) (97) (82) (88) (93) Net profit margins (%) (30.0) 12.3 3.9 4.1 4.0
Net claims incurred (1,082) (612) (598) (640) (679) Effective tax rates (%) N/A N/A 32.0 25.0 25.0
Management expenses (235) (192) (172) (183) (194) Net dividend payout (%) N/A 0.0 0.0 0.0 12.0
Investment income 81 85 90 92 94
Others 13 4 (10) (10) (8)
Operating profit (314) 102 48 48 50
Others 0 0 0 0 0
Pretax profit (314) 102 48 48 50
Tax 13 10 (15) (12) (12)
Net profit (302) 112 32 36 37
Adj. wt. shares (m) 1,500 1,500 1,500 1,500 1,500

Fixed assets 202 182 245 236 227 Net claims ratio (%) 106.7 67.0 73.0 73.0 73.0
Intangible assets 11 5 5 5 5 Net commission ratio (%) 9.7 10.6 10.0 10.0 10.0
Other long-term assets 0 0 0 0 0 Management expenses ratio (%) 23.2 20.6 20.0 20.0 20.0
Total non-current assets 213 187 250 241 232 Retention ratio (%) 90.1 87.4 88.0 88.0 88.0
Cash and equivalents 96 58 58 121 197 Combined ratio (%) 140.5 100.8 101.1 101.1 101.0
Investments 1,625 1,786 1,928 2,063 2,187 Underwriting margin (%) (40.6) 1.4 (3.9) (3.9) (3.8)
Trade debtors 94 78 87 93 98 Investment return (%) 4.8 4.7 4.8 4.6 4.4
Provision for claims 1,433 1,031 1,113 1,191 1,263
Unearned premium reserves 448 369 450 536 628
Total long term liabilities 448 369 450 536 628
BV/share (RM) 0.10 0.20 0.22 0.25 0.27

48.0
6.40 38.0
28.0
5.40
18.0
4.40 8.0
-2.0
3.40
-12.0
-22.0
2.40
-32.0
1.40 -42.0

MALAYSIA
Lafarge Malayan Cement Bhd RM7.42 @04/12/10
The cement giant Target: RM6.37
Cement
LMC MK / LMCE.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Maintain UNDERPERFORM. Lafarge remains an UNDERPERFORM as we

believe that newsflow on construction activities has been largely priced in. Lafarge’s
share price has risen 11% since March and now trades 21.2x FY10 P/E compared
to 12.7x for the FBM KLCI. Our EPS forecasts are unchanged. Although we
maintain our valuation basis of a blend of P/E and the stock’s 1.2x 5-year P/BV, our
target price rises from RM6.18 to RM6.37 as our target market P/E increases from
13.8x to 14.5x. Potential de-rating catalysts are 1) raw material cost inflation, and 2)
Lafarge’s high P/E despite a 3-year EPS CAGR of only 3.5%. For exposure to
cement, we recommend Tasek Corp (TC MK, Outperform).
• No end yet to cement rebates. Earnings improved in 2010 due to the RM25/mt
price hike to RM300/mt for bulk cement in May. However, cement companies
continue to give RM20-30/mt rebates in order to attract buyers.
• Margin contraction. Margins will remain under pressure if there are further price
increases for coal and electricity, which account for 45% of Lafarge’s total costs.
World coal prices usually increase during the winter months because of higher
heating needs in China. Further hikes in domestic electricity rates would dampen
profitability. We also expect Lafarge to incur higher maintenance costs in FY11 as it
will be repairing a kiln that was damaged during 3Q10.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 2,530.8 2,483.1 2,470.7 2,624.5 2,680.5
EBITDA (RM m) 544.6 602.6 510.1 666.9 691.2
EBITDA margins (%) 21.5% 24.3% 20.6% 25.4% 25.8%
Net profit (RM m) 367.7 412.2 297.8 435.3 457.4
EPS (sen) 43.3 48.5 35.0 51.2 53.8
EPS growth (%) 31.1% 12.1% (27.8%) 46.2% 5.1%
P/E (x) 17.1 15.3 21.2 14.5 13.8
Core EPS growth (%) 21.3% 21.1% (27.8%) 46.2% 5.1%
No. of shrs (m): 850 ROE (%) 12.4% 13.2% 9.3% 13.3% 13.4%
Conv. secs (m): None Net cash per share (RM) N/A 0.06 0.16 0.40 0.68
- Lafarge Cement UK Plc 53.8 EV/EBITDA (x) 12.2 10.4 12.1 9.0 8.3
- Associated International 8.4 % change in EPS estimates N/A N/A N/A

8.00
Lafarge Malayan Cement (LMC) is 53.8% owned by the Lafarge Group, a world
8.2
7.7
7.00
6.00
leader in building material solutions with operations in 78 countries. The group’s
7.2
5.00 earnings are mainly from the manufacturing and distribution of cement, ready mixed
4.00
6.7 3.00 concrete, and other related building materials. LMC was the first cement company in
6.2
2.00
1.00
Malaysia, building its first cement plant in Rawang in 1953. Today, LMC employs
5.7
0.00
some 1,200 people and is Malaysia’s largest cement player with a market share of
Volume 1m (R.H.Scale) Lafarge Malayan Cement Bhd about 43%. While the bulk of LMC’s cement is sold locally in Malaysia, the company
Source: Bloomberg has a presence in Singapore where it imports, sells, and trades building materials.

Financial tables

Revenue 2,531 2,483 2,471 2,624 2,681 Revenue growth (%) 16.4 (1.9) (0.5) 6.2 2.1
Tax (30) (36) (61) (89) (94)
Net profit 368 412 298 435 457
Adj. wt. shares (m) 850 850 850 850 850

Fixed assets 1,946 1,845 1,770 1,691 1,608 Cement ASP - domestic (RM/tonne) 270 275 275 275
Intangible assets 1,209 1,209 1,209 1,209 1,209 Export ASP (US$/t) 40.9 41.6 42.8 42.8
Other long-term assets 166 152 143 135 128 Thermal coal price (US$/tonne) 70 92 92 92
Total non-current assets 3,321 3,205 3,122 3,035 2,945 Exchange rate (RM to US$) 3.50 3.17 3.11 3.15
Stocks 435 309 308 327 334
Trade debtors 341 296 295 313 320
Total current assets 982 1,081 1,029 1,266 1,516
NTA/share (RM) 2.15 2.34 2.35 2.50 2.69

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 19.0
Pretax profit 398 442 361 526 553

15.0
Cash tax paid (23) (18) (66) (94) (99)
Others (9) 2 0 0 1
13.0
Capex (98) (60) (80) (80) (80) 11.0
Others 0 0 0 0 0 9.0
Debt raised/(repaid) (175) (100) (134) (3) (3) 7.0
5.0
Cash interest & others 13 12 0 0 (1)
Change in cash (31) 278 (46) 196 234

MALAYSIA
Latexx Partners RM2.67 @07/12/10
Good things come in small packages Target: RM3.85
Rubber Gloves
LTX MK / LATX.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Maintain OUTPERFORM. Latexx remains an OUTPERFORM. We retain our

earnings forecasts and valuation basis of 30% discount to our target P/E for Top
Glove. However, our target price rises from RM3.66 to RM3.85 (9.4x CY12 P/E) as
we are upping Top Glove’s target P/E from 13.8x to 14.5x, in line with our revised
target market P/E. Potential re-rating catalysts are 1) a better product mix, 2)
demand for ultra-thin rubber gloves, and 3) resumption of its delayed capacity
expansion programme.
• Access to China. Latexx derives 80% of its sales from MNCs, which gives it one of
the highest exposures to MNCs in the sector. We expect the company to benefit
from Cardinal Health Inc’s (CAH US, Not Rated) recent acquisition of Yong Yu,
China’s largest importer of medical supplies, as 20% of Latexx’s revenues come
from Cardinal and the companies have a relationship going back more than 15
years.
• Its first OBM product. Total Glove, Latexx’s 50.01:49.9% JV with Dutch R&D
company Budev B.V. has been established for almost a year. We believe the
collaboration to commercialise low-protein gloves will begin to bear fruit when latex
prices eventually moderate. This will give Latexx a rubber glove product that can be
sold alongside its nitrile gloves.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 223.3 328.5 437.4 531.8 537.6
EBITDA (RM m) 24.1 66.7 118.8 140.2 154.4
EBITDA margins (%) 10.8% 20.3% 27.2% 26.4% 28.7%
Net profit (RM m) 15.2 51.3 81.3 95.7 104.2
EPS (sen) 6.9 23.5 37.1 43.7 47.6
EPS growth (%) 212.6% 237.8% 58.4% 17.8% 8.9%
P/E (x) 38.5 11.4 7.2 6.1 5.6
Stock Information
FD core EPS (sen) 5.5 18.7 29.6 34.8 37.9
Market cap: RM584m/US$186m FD core P/E (x) 48.3 14.3 9.0 7.7 7.0
No. of shrs (m): 219 ROE (%) 13.4% 35.3% 38.9% 33.0% 27.8%
Conv. secs (m): 56.0 Net cash per share (RM) N/A N/A N/A 0.02 0.25
- BT Capital Sdn Bhd 23.6 EV/EBITDA (x) 26.6 9.9 5.2 4.1 3.4
- Best Time Ventures 5.9 CIMB/Consensus (x) 1.00 1.02 0.89

1.60 Latexx Partners was incorporated in 1988 and was listed on Bursa Malaysia in 1996.
4.7 1.40
4.2
1.20 Its office and manufacturing facilities are located in Kamunting Industrial Estate in
3.7
1.00
0.80
Kamunting, Perak. The company currently owns six manufacturing plants located on a
3.2
0.60 40-acre plot that has space for expansion. With its current annual production capacity
0.40
2.7
0.20
of 8.0bn pieces of gloves, Latexx ranks as the fifth largest glove manufacturer in
2.2
0.00
Malaysia with 4% global market share. The company focuses on higher-quality
Volume 10m (R.H.Scale) Latexx Partners powder-free natural rubber (NR) gloves and nitrile gloves. It is planning a staggered
Source: Bloomberg capacity expansion to keep pace with growing market demand.

Financial tables

Tax 0 0 (20) (24) (26)
Net profit 15 51 81 96 104
Adj. wt. shares (m) 219 219 219 219 219

NTA/share (RM) 0.46 0.68 1.04 1.42 1.82

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 15 52 102 120 130 11.0
9.0
Cash tax paid 0 0 0 20 24
Others 2 2 (8) (45) (46)
Cash flow from operations (1) 63 95 101 126 7.0
Capex (23) (48) (50) (50) (50)

Others 0 0 0 0 0
Debt raised/(repaid) 29 (2) 8 10 12
1.0
Cash interest & others (21) (30) 5 (4) (5)
Change in cash (16) (18) 50 45 63

MALAYSIA
Malayan Banking Bhd RM8.41 @07/12/10
Recharging BII Target: RM10.50
Banks
MAY MK / MBBM.KL Winson Ng Gia Yann CFA +60(3) 2084 9686 – winson.ng@cimb.com
• Maintain OUTPERFORM. We reiterate our OUTPERFORM rating on Maybank,

premised on the potential re-rating catalysts of (1) strong overseas growth,
especially in Indonesia, (2) an expected rebound of loan growth in Malaysia and
Singapore, (3) reversal in treasury income, and (4) a pickup in investment banking
income. Another plus is its attractive dividend yield of about 7%. Our earnings
forecasts are intact, along with our target price of RM10.50. We continue to apply a
10% premium to its DDM value. There are no changes to the key DDM parameters,
including a cost of equity of 11.3% and dividend growth rates of 7.3% in the interim
growth phase and 5% in the long-term growth phase.
• Projecting net earnings growth of 12-19% in FY11-12. We are projecting an
18.7% rise in Maybank’s FY6/11 net earnings to RM4.53bn, fuelled by a 16.7%
increase in net interest income on the back of 11.6% loan growth and higher net
interest margin. The growth in FY12 is still expected to be a healthy 12.2%,
supported by a 9-10% expansion in net and non-interest income and an 18% drop
in credit costs.
• Continuous transformation of BII. The key focus in 2011 will be the continuous
transformation of Bank Internasional Indonesia (BII) through the (1) strengthening of
relationships with customers, (2) expansion of the distribution network, and (3)
enhancing of product development capabilities. Going by its loan growth of 34-38%
yoy in Jun-Sep 10, BII is beginning to see the early fruits of the revamp.
Financial summary
FYE Jun 2009 2010 2011F 2012F 2013F
Total income (RM m) 10,519.0 12,871.7 14,117.6 15,132.5 16,541.3
Loan loss provisions (RM m) (1,698.8) (1,188.0) (1,393.5) (1,136.9) (1,100.1)
Net profit (RM m) 691.9 3,818.2 4,532.5 5,084.3 5,729.4
Stock Information EPS (sen) 11.1 53.8 63.9 71.7 80.8
Market cap: RM59,526m/US$18,975m EPS growth (%) (80%) 387% 19% 12% 13%
RM6.71 Core EPS (sen) 34.9 53.8 63.9 71.7 80.8
3-m avg daily vol: 9.2m Core EPS growth (%) (42%) 54% 19% 12% 13%
No. of shrs (m): 7,078 Core P/E (x) 24.1 15.6 13.2 11.7 10.4
Est. free float (%): 51.0 Gross DPS (sen) 8.0 55.0 59.6 66.9 75.4
- Skim Amanah Saham 44.7 ROE (%) 3.1% 14.5% 15.9% 16.8% 17.6%
- Permodalan Nasional 5.9
Berhad CIMB/Consensus (x) 1.05 1.05 1.08

9.8
3.00 Maybank is the largest banking group in Malaysia, with assets totalling RM347bn. In
9.3
8.8
2.50 2000, it acquired Pacific Bank and Phileo Allied Bank. The group’s lending is mostly
8.3
2.00
channelled to the consumer segment, which accounts for almost half of its local loan
1.50
7.8
7.3 1.00
portfolio. Maybank also has sizeable exposure to foreign markets, with foreign loans,
6.8 0.50 mainly in Singapore and Indonesia, making up 33% of its total loan base. In early
6.3
0.00
2008, it embarked on an aggressive overseas expansion programme. It acquired 20%
Volume 10m (R.H.S ca le ) Ma la ya n Ba nking Bhd of Pakistan’s MCB Bank, 15% of Vietnam’s An Binh Bank and 97.5% of Bank
Source: Bloomberg Internasional Indonesia (BII) in 2008.

Financial tables

Net interest income 5,920 6,771 7,670 8,402 9,212 Total income growth (%) 10.0 22.4 9.7 7.2 9.3
Non-interest income 4,600 6,101 4,710 4,847 5,288 Pre-provision profit growth (%) (6.7) 30.2 15.3 6.5 10.4
Other income 0 0 1,737 1,884 2,041 Pretax growth (%) (59.0) 220.8 14.8 12.2 12.7
Loan loss provisions (1,699) (1,188) (1,393) (1,137) (1,100) Net dividend payout (%) 54.2 76.6 70.0 70.0 70.0
Exceptional items (1,686) 0 0 0 0
Others 0 0 0 0 0
Pretax profit 1,674 5,370 6,167 6,917 7,795
Tax (924) (1,402) (1,542) (1,729) (1,949)
Net profit 692 3,818 4,533 5,084 5,729
Adj. wt. shares (m) 6,255 7,093 7,093 7,093 7,093

(RM m, end Jun) 2009 2010 2011F 2012F 2013F (FYE Jun) 2009 2010 2011F 2012F 2013F
Fixed assets 1,422 1,405 1,489 1,522 1,546 Loan loss reserve (%) 112.9 124.5 124.5 120.5 118.9
Total assets 310,739 336,700 361,135 385,361 409,929
BV/share (RM) 3.51 3.93 4.10 4.42 4.78
2.60
19.0
2.40
17.0
2.20
2.00 15.0
1.80
13.0
1.60
11.0
1.40
1.20 9.0
1.00
7.0
Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10

MALAYSIA
Malaysia Airports Holdings Bhd RM6.27 @07/12/10
Still on a high plane Target: RM7.50
Airports
MAHB MK / MAHB.KL Loke Wei Wern +60 (3) 2084 9946 – weiwern.loke@cimb.com
• Maintain OUTPERFORM. Thanks to its monopoly of the operations of all of

Malaysia’s airports except Senai Airport, Malaysia Airports (MAHB) is poised to ride
on the back of robust passenger growth, carriers’ expansion plans and the gradual
liberalisation of air transport. We maintain our OUTPERFORM call but raise our
DCF-based target price from RM7.05 to RM7.50 after lowering our WACC from
8.2% to 7.9% for a lower beta assumption of 0.8 (0.9 previously). Potential re-rating
catalysts for the stock include 1) stronger-than-expected passenger growth, 2)
continuous expansion of airlines, and 3) industry liberalisation.
• 10% growth for 2011. Our economics team is projecting GDP growth of 5.5% for
2011, which bodes well for consumer sentiment and the demand for air travel and
retail spending. We are projecting 10% earnings growth for 2011, largely driven by
an 8% growth in passenger movements and higher contribution from its non-
aeronautical segment, particularly the retail operations. We think that MAHB will
focus on growing its non-aeronautical revenue by optimising its retail operations.
• Sabiha Gokcen to stay in the red in 2011. We expect MAHB’s 20%-owned
Sabiha Gokcen (SGIA) to remain in the red in 2011. Given the typical airport
gestation period of 4-5 years, management expects SGIA to break even
operationally in 2014-2015. We see MAHB’s investment in SGIA as a strategic
move to gain exposure to the huge tourism potential in Turkey. We gather that the
airport yields an attractive EBITDA margin of 55%, which surpasses MAHB’s 39-
40% margins. The current losses are mainly due to interest and depreciation costs.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 1,435.0 1,637.1 1,824.2 1,917.0 2,187.8
EBITDA (RM m) 534.6 603.2 711.3 761.4 857.2
EBITDA margins (%) 37.3% 36.8% 39.0% 39.7% 39.2%
Net profit (RM m) 298.3 379.3 375.2 414.3 389.6
EPS (sen) 27.1 34.5 34.1 37.7 35.4
EPS growth (%) 2.8% 27.1% (1.1%) 10.4% (6.0%)
P/E (x) 23.1 18.2 18.4 16.6 17.7
Stock Information
Core EPS (sen) 24.5 31.7 34.1 37.7 35.4
Market cap: RM6,897m/US$2,192m Core EPS growth (%) (7.0%) 29.2% 7.7% 10.4% (6.0%)
No. of shrs (m): 1,100 ROE (%) 9.7% 11.6% 11.0% 11.6% 10.3%
Est. free float (%): 30.0 Net gearing (%) N/A 7.1% 35.6% 72.4% 72.4%
Conv. secs (m): None Net cash per share (RM) 0.61 N/A N/A N/A N/A
Major shareholders (%): P/FCFE (x) 50.4 (29.3) 24.0 4,333.9 22.9
- Khazanah Nasional 54.0 EV/EBITDA (x) 11.5 11.6 11.3 12.4 11.2
- T Rowe Price 1.7 CIMB/Consensus (x) 1.04 0.97 0.95

6.5
3.50
Malaysia Airports Holdings Bhd was incorporated in 1991 with a core focus on the
6.0 3.00 operations, management, maintenance, as well as the development of airports.
2.50
5.5
5.0
2.00
MAHB is 54% owned by Khazanah Nasional. It operates and manages 39 airports in
4.5
1.50 Malaysia comprising international, domestic and short take-off and landing ports.
1.00
4.0 0.50
Apart from its local operations, MAHB also has four international airports under its
3.5
0.00
portfolio, namely Delhi International Airport and Hyderabad International Airport in
Volume 1m (R.H.S ca le ) Ma la ys ia Airports Holdings Bhd India, Sabiha Gokcen International Airport in Turkey and the Maldives International
Source: Bloomberg Airport in Maldives.

Financial tables

Operating expenses (900) (1,034) (1,113) (1,156) (1,331) EBITDA growth (%) (2.5) 12.8 17.9 7.0 12.6
EBIT 380 453 553 592 631 Interest cover (x) 1,346.2 31.9 22.3 25.1 6.2
Associates’ contribution 2 3 (20) (15) (10) Net dividend payout (%) 49.9 49.1 50.4 50.0 53.2
Tax (123) (100) (132) (138) (130)
Net profit 298 379 375 414 390
Adj. wt. shares (m) 1,100 1,100 1,100 1,100 1,100

Fixed assets 1,911 1,951 2,832 4,509 4,824 Int'l passenger traffic growth (%) 9.6% 10.2% 8.0% 6.0%
Intangible assets 1,188 1,758 1,715 1,672 1,628 Domestic pax traffic grwth (%) 7.1% 9.9% 8.0% 6.0%
Other long-term assets 486 547 547 547 547 Int'l pax service charge (RM) 51 51 51 51
Total non-current assets 3,585 4,256 5,094 6,727 6,999 Dom pax serv charge (RM) 9 9 9 9
Stocks 58 60 314 330 376
Trade debtors 668 634 707 743 848
Total current assets 1,407 964 1,265 1,111 1,357
Total current liabilities 1,375 685 741 787 895
Long-term borrowings 0 508 1,482 2,708 2,935
NTA/share (RM) 1.81 1.46 1.60 1.83 2.03

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 422 480 508 553 520 16.0
14.0
Cash tax paid (128) (97) (100) (132) (138)
Others (53) (544) (26) (76) (15)
Cash flow from operations 442 (306) 288 499 547 12.0
Capex (282) (326) (950) (1,700) (450)

Others 4 (99) 0 0 0
Cash flow from investing (485) (420) (950) (1,700) (450) 8.0
Debt raised/(repaid) 180 505 975 1,226 227
6.0
Cash flow from financing 35 305 638 995 (2)
Change in cash (8) (421) (24) (206) 94
Change in net cash/(debt) (188) (926) (999) (1,431) (133)
Ending net cash/(debt) 674 (240) (1,239) (2,670) (2,803)

MALAYSIA
Malaysian Airline System Bhd RM2.07 @07/12/10
Radical transformation on the cards Target: RM3.00
Airlines
MAS MK / MASM.KL Raymond Yap CFA +603 2084 9769 – raymond.yap@cimb.com
• Maintain OUTPERFORM. MAS is en route to a radical transformation of its

structural costs as 56 passenger aircraft will be delivered from Boeing and Airbus
over the next four years and it has 30 more options that has not yet been exercised.
A one-for-one replacement with its present aged fleet will halve the average fleet
age to just six years by 2013. This process will significantly improve fuel efficiency,
reduce maintenance costs, improve the product to world-class standards, justify an
increase in fares and yield intangible benefits like greater pilot and crew work
satisfaction and improved staff morale. The reduction in structural costs that could
permanently lift MAS’s profitability range underpins our OUTPERFORM call. Our
target price stays at RM3, based on 6x CY12 EPS.
• Process will take time. MAS will take delivery of three new planes in 2010,
followed by eight in 2011, 13 in 2012 and 17 in 2013, 13 in 2014 and two in 2015.
This fleet replacement process will take several years and the benefits will be more
visible only in 2012-13. Over the past year, MAS’s yield recovery has lagged behind
its peers in Singapore or HK as it is less leveraged to a business travel recovery. As
a result, MAS’s share price has not re-rated as much as SIA (Outperform, TP:
S$20.50) or AirAsia (Outperform, TP: RM3.85).
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 15,034.2 11,309.8 12,633.7 13,827.6 15,561.4
EBITDA (RM m) 344.0 (375.9) 242.0 1,386.1 2,526.9
EBITDA margins (%) 2.3% (3.3%) 1.9% 10.0% 16.2%
Pretax profit (RM m) 302.7 462.0 106.3 722.9 1,751.8
Net profit (RM m) 244.4 490.2 92.5 708.8 1,734.1
EPS (sen) 11.9 23.9 3.0 21.2 51.9
EPS growth (%) (74.9%) 100.6% (87.6%) 617.3% 144.7%
P/E (x) 17.4 8.7 70.0 9.8 4.0
Core EPS (sen) 6.8 (111.8) (29.0) 17.3 51.9
Core EPS growth (%) (86.0%) (1,739.1%) 74.1% 159.8% 199.2%
Core P/E (x) 30.4 nm nm 11.9 4.0
FD core EPS (sen) 7.0 (104.1) (27.3) 17.1 50.3
Stock Information
FD core P/E (x) 29.7 nm nm 12.1 4.1
RM1.80 P/BV (x) 1.0 5.8 2.0 1.6 1.2
No. of shrs (m): 3,342 Net gearing (%) N/A N/A 27.4% 37.1% 14.0%
Est. free float (%): 15.0 Net cash per share (RM) 1.56 0.31 N/A N/A N/A
Conv. secs (m): 134.3 P/FCFE (x) (7.2) (2.6) (2.3) 22.1 4.4
Major shareholders (%): EV/EBITDA (x) 3.1 (9.7) 30.8 6.1 3.1
- Penerbangan Malaysia 70.0 % change in EPS estimates N/A N/A N/A
- EPF 10.0 CIMB/Consensus (x) (4.43) 1.53 2.26

2.7
Malaysian Airline System will operate a fleet of around 105 aircraft, including seven
2.5
2.00
dedicated freighters and 20 ATR-72 turboprops. It went through a significant financial
2.3
1.50
restructuring exercise, known as widespread asset unbundling in 2002, and
2.1
1.00
comprehensive operational restructuring under its ex-managing director Dato’ Sri Idris
1.9 0.50
Jala from 2007. Tengku Dato’ Azmil Zahruddin took over as managing director in
1.7
0.00
2008 and has continued with the reforms. Over 2010-15, MAS is expected to receive
Volume 10m (R.H.S ca le ) Ma la ys ia n Airline S ys te m Bhd new aircraft that will completely transform the aged fleet including 35 B737-800
Source: Bloomberg planes with 20 options, six A380s, and 15 A330-300s with 20 options.

Financial tables

EBITDA 344 (376) 242 1,386 2,527 Pretax margins (%) 2.0 4.1 0.8 5.2 11.3
EBIT 16 (692) (124) 844 1,913 Interest cover (x) 0.3 (8.3) (0.9) 4.4 8.3
Net interest & invt income 162 (25) (94) (146) (172) Effective tax rates (%) 18.8 N/A 10.2 1.5 0.8
Exceptional items 104 1,167 314 15 0 Debtors turnover (days) 36.0 54.5 44.3 44.7 44.1
Pretax profit 303 462 106 723 1,752 Creditors turnover (days) 52.3 75.0 66.6 62.7 57.2
Tax (57) 31 (11) (11) (15)
Net profit 244 490 92 709 1,734
Adj. wt. shares (m) 2,053 2,053 3,127 3,342 3,342

Fixed assets 2,465 3,044 6,710 7,745 8,612 Passenger fleet size (# of planes) 86 84 84 79
Intangible assets 108 144 144 144 144 Av. seat km (ASK, yoy chg %) -9.5% 3.3% 5.0% 5.0%
Other long-term assets 571 545 555 565 575 Rev. psg km (RPK, yoy chg %) -8.3% 14.3% 2.5% 5.0%
Total non-current assets 3,144 3,733 7,409 8,454 9,331 Load factor (%) 68.8% 76.1% 74.4% 74.4%
Cash and equivalents 4,617 2,952 2,817 3,131 4,710 Passenger yield per RPK (sen) 25.79 25.03 27.26 29.66
Stocks 380 385 408 410 429 Jet fuel price (US$/barrel) 106.06 107.00 102.64 105.00
Trade debtors 1,932 1,447 1,617 1,770 1,992 Fuel cost per ASK (sen) 7.31 8.85 8.33 8.35
Other current assets 0 0 0 0 0 Non-fuel cost per ASK (sen) 17.12 16.23 15.65 15.58
Trade creditors 2,409 2,236 2,372 2,381 2,495
Long-term borrowings 986 2,001 3,461 4,381 5,229
Shareholders’ funds 4,186 736 3,502 4,211 5,945
NTA/share (RM) 1.99 0.29 1.00 1.22 1.74

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 44.0
Pretax profit 303 462 106 723 1,752
34.0
Working capital changes (1,213) 307 (58) (145) (128) 24.0
Cash tax paid (15) (5) (11) (11) (15) 14.0

Others (27) (2,677) (503) 52 221
4.0
Cash flow from operations (624) (1,597) (99) 1,161 2,443
Capex (764) (914) (4,032) (1,576) (1,480) -6.0
Net investments & sale of FA 41 (22) 0 0 0 -16.0

Others 214 54 0 0 0
-26.0
Cash flow from investing (509) (882) (4,032) (1,576) (1,480)
Debt raised/(repaid) 559 901 1,460 920 848 -36.0
Equity raised/(repaid) 0 0 2,674 0 0 -46.0

Dividends paid (56) (2) 0 0 0 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10

Cash flow from financing 490 815 3,996 729 617
Change in cash (643) (1,664) (135) 313 1,580
Change in net cash/(debt) (1,202) (2,565) (1,595) (607) 732
Ending net cash/(debt) 3,197 633 (962) (1,569) (837)

MALAYSIA
Malaysian Bulk Carriers Bhd RM2.97 @07/12/10
Avoid the bulk and tanker space Target: RM2.80
Dry Bulk Shipping
MBC MK / MBCB.KL Raymond Yap CFA +603 2084 9769 – raymond.yap@cimb.com
• Maintain UNDERPERFORM. Maybulk is exposed to the shipping and offshore

sectors which are unlikely to do well in 2011. As a result, we expect its share price
performance to remain lacklustre. Our SOP target price is unchanged at RM2.80,
based on the estimated secondhand market price of its fleet. We continue to rate
the stock an UNDERPERFORM. The main potential de-rating catalyst is the weak
outlook for bulk, tanker and offshore markets in 2011.
• Disturbing signs of weakness. Spot bulk shipping rates continue to weaken and
MR tanker rates are near all-time lows. We are negative on the prospects for both
segments in 2011. There is also no sign of recovery in the offshore service space.
Earnings from its 22% associate POSH sank 74% yoy in 9M10.
• Selective and patient acquisition strategy. Although Maybulk has been looking
for ships to purchase, it executed only two secondhand bulker deals in 2009 and
one tanker deal in 2010 as asset values may have moved up too quickly over the
past year. The current freight market decline could create opportunities to buy but
Maybulk is likely to remain very patient and selective. We have assumed two
purchases this year, followed by three each in 2011-12. Separately, Maybulk
recently entered in a 50% JV with Mexican partners to participate in two 32,500 dwt
handysize newbuildings to service the US Gulf/Mexico markets for delivery in May
and August 2011.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 721.1 303.7 427.3 436.2 604.5
EBITDA (RM m) 341.9 105.3 222.9 221.1 330.8
EBITDA margins (%) 47.4% 34.7% 52.2% 50.7% 54.7%
Net profit (RM m) 460.9 255.7 212.8 214.3 317.7
EPS (sen) 46.1 25.6 21.3 21.4 31.8
EPS growth (%) (15.4%) (44.5%) (16.8%) 0.7% 48.3%
P/E (x) 6.4 11.6 14.0 13.9 9.3
Core EPS growth (%) (21.5%) (33.8%) 15.2% 0.7% 48.3%
No. of shrs (m): 1,000 ROE (%) 25.8% 13.9% 11.7% 11.2% 15.4%
Est. free float (%): 31.0 Net gearing (%) N/A N/A N/A 1.2% 1.8%
Conv. secs (m): None Net cash per share (RM) 0.44 0.11 0.08 N/A N/A
Major shareholders (%): P/FCFE (x) 18.0 166.9 16.4 (416.4) 28.6
- Pacific Carriers Ltd. 34.5 EV/EBITDA (x) 5.3 18.6 8.8 9.2 6.1
- Bank Pembangunan 18.4 % change in EPS estimates N/A N/A N/A
- PPB Group Bhd 14.0 CIMB/Consensus (x) 1.01 0.94 1.20

3.5
3.4
4.50
Malaysian Bulk Carriers operates a fleet of 11 bulk carriers and four product tankers.
3.3
4.00
3.50
The company is managed by the Kuok group’s Pacific Carriers Ltd. Maybulk’s
3.2
3.1
3.00
2.50
philosophy in the past has been to treat its ships as assets available for sale, rather
3.0
2.9
2.00
1.50
than purely as fixed assets that trade for freight income. During 2007 and 2008, it sold
2.8
2.7
1.00
0.50
eight ships and paid handsome dividends from the proceeds. Since the market turned
2.6
0.00
in late 2008, Maybulk has sold only two ships, This, together with the downturn in
Volume 1m (R.H.S c a le ) Ma la ys ia n Bulk Ca rrie rs Bhd earnings, means that future dividends are unlikely to return to previous highs. With the
Source: Bloomberg fall in asset prices, Maybulk has now shifted its attention to rebuilding its fleet.

Financial tables

Operating expenses (379) (198) (204) (215) (274) EBITDA growth (%) (12.6) (69.2) 111.6 (0.8) 49.6
Net interest & invt income 9 7 (8) (4) (4) Effective tax rates (%) 0.8 0.2 0.0 0.0 0.0
Tax (4) (1) 0 0 0
Net profit 461 256 213 214 318
Adj. wt. shares (m) 1,000 1,000 1,000 1,000 1,000

Fixed assets 600 628 676 865 1,046 Fleet size (number of vessels) 15 17 20 24
Intangible assets 0 0 0 0 0 Baltic Dry Index (yoy change %) -59.0% 7.6% -17.9% -13.0%
Other long-term assets 859 974 1,012 1,054 1,102 Bulk rates (US$/day) 19,076 26,706 25,371 29,177
Total non-current assets 1,459 1,602 1,688 1,919 2,148 Clean tanker TCE rates (US$/day) 15,975 12,780 13,419 14,761
Stocks 7 7 7 7 9
Total current assets 1,025 695 738 632 634
NTA/share (RM) 1.88 1.79 1.85 1.96 2.16

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 18.0
Pretax profit 526 260 220 221 327
Working capital changes 46 (12) (9) 3 6

16.0
Cash tax paid (4) (1) 0 0 0
Others (161) (155) (30) (38) (44)
15.0
Capex (40) (83) (81) (228) (229) 14.0
Others 41 (18) 0 0 0 13.0

12.0
11.0
Change in cash (221) (345) 31 (107) (16)
Ending net cash/(debt) 442 108 83 (24) (41)

MALAYSIA
Malaysian Pacific Industries Bhd RM5.45 @07/12/10
A more muted outlook Target: RM6.90
Semiconductor
MPI MK / MPIM.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Maintain OUTPERFORM. MPI remains an OUTPERFORM given the potential

catalysts of a turnaround of the computing segment and a demand pick-up. Our
earnings forecasts are intact, along with our target price of RM6.90, which we
continue to base on a 20% discount to its 5-year historical adjusted average of
P/BV of 0.7x.
• Muted outlook. MPI is expecting a mid-single-digit qoq revenue contraction for
4QCY10 due to inventory correction and weakness in computing. Based on the
fairly limited visibility right now, the company is expecting flattish revenue for
1QCY11 due to seasonality. However, 2QCY11 should see a snapback.
• China to grow fast. China’s growth is outpacing MPI’s local operations due to the
strong growth of its MLP and the preference of its customers in expanding there. As
a result, it will be expanding its capacity by 4x the current floor space over the next
12 months. Over the medium term, MPI hopes to have a more balanced spread
between its Ipoh and China operations for Carsem compared to the 15-20%
contribution from its China operations currently.
• Copper conversion is gradual. The take-up of copper wires has been more
gradual because the products manufactured by MPI have low pin counts and lower
wire lengths. It does, however, expect more conversion over the next 12 months.
Financial summary
FYE Jun 2009 2010 2011F 2012F 2013F
Revenue (RM m) 1,150.6 1,386.2 1,441.7 1,614.6 1,776.1
EBITDA (RM m) 258.1 355.1 338.8 387.5 435.1
EBITDA margins (%) 22.4% 25.6% 23.5% 24.0% 24.5%
Net profit (RM m) (39.9) 105.4 94.2 123.5 164.9
EPS (sen) (20.5) 54.1 48.3 63.3 84.6
EPS growth (%) (135.6%) 364.2% (10.7%) 31.1% 33.6%
P/E (x) nm 10.1 11.3 8.6 6.4
Market cap: RM1,144m/US$365m Core EPS growth (%) (74.6%) 238.8% (10.6%) 31.1% 33.6%
RM5.20 Gross DPS (sen) 26.7 33.3 33.3 40.0 50.0
No. of shrs (m): 210 P/BV (x) 1.5 1.4 1.4 1.3 1.2
- Hong Leong Industries 67.1 EV/EBITDA (x) 5.7 3.9 4.2 3.6 3.2
- ASB 4.7 % change in EPS estimates N/A N/A N/A
- Great Eastern 2.2 CIMB/Consensus (x) 0.89 1.11 1.52

7.9 1.20
MPI is principally an investment holding company with subsidiaries (70%-owned
7.4 1.00
Carsem, 100% owned Dynacraft) involved in designing, manufacturing, assembling,
6.9 0.80
6.4 0.60
testing and sale of integrated circuits, semiconductor devices, electronic components
5.9 0.40
and leadframes to customers worldwide. It is also currently one of the top 10 global
5.4 0.20 players in the semiconductor test and assembly services (SATS) space. It is listed on
4.9
0.00
the Main Board of Bursa Malaysia. About 87% of its 3QCY10 revenue is from Carsem
Volume 1m (R.H.S ca le ) Ma la ys ia n P a cific Indus trie s Bhd while the balance is from Dynacraft. For 3QCY10, 46% of its revenue is from Asia,
Source: Bloomberg 25% from the US and 30% from Europe.

Financial tables

Operating expenses (893) (1,031) (1,103) (1,227) (1,341) EBITDA growth (%) (38.0) 37.6 (4.6) 14.4 12.3
Net interest & invt income (8) (5) (8) (6) (5) Effective tax rates (%) N/A N/A 10.0 10.0 10.0
Exceptional items (71) (52) 0 0 0 Debtors turnover (days) 62.2 52.0 59.0 56.9 57.4
Tax (4) 41 (12) (17) (22)
Net profit (40) 105 94 123 165
Adj. wt. shares (m) 195 195 195 195 195

Fixed assets 1,051 962 1,054 1,087 1,128 Global semicon sales (US$bn) 265 310 325 342
Intangible assets 12 12 12 12 12 EBITDA Margin (%) 25.6% 23.5% 24.0% 24.5%
Total non-current assets 1,084 994 1,086 1,120 1,160
Stocks 72 88 94 104 114
Trade debtors 166 228 238 266 293
NTA/share (RM) 3.52 3.73 3.88 4.11 4.46

(RM m, FYE Jun) 2009 2010 2011F 2012F 2013F 43.0
Pretax profit (62) 85 123 165 221
Working capital changes 41 13 2 (10) (10)

Cash tax paid (4) 41 (12) (17) (22) 33.0
Others 16 0 40 41 42
28.0
Capex (124) (189) (300) (250) (250) 23.0
Others 0 0 0 0 0 18.0
Debt raised/(repaid) (82) (44) 0 0 0 13.0
8.0
Cash interest & others (8) 6 (8) (6) (5)
Change in cash (33) 58 (35) 37 55

MALAYSIA
Malaysian Resources Corp Bhd RM2.01 @07/12/10
The urge to merge Target: RM2.53
Construction
MRC MK / MYRS.KL Sharizan Rosely +60 (3) 2084 9864 – sharizan.rosely@cimb.com
• Maintain TRADING BUY. Newsflow on the much-talked-about 3,300-acre Sg Buloh

land is likely to pick up in 2011 as the government rolls out its Economic
Transformation Programme (ETP). MRCB is likely to emerge as one of the key
beneficiaries and participate both as a turnkey contractor and a developer. A more
attractive valuation for the merged IJM Land-MRCB entity is a potential re-rating
catalyst for MRCB, along with progress on the Sg. Buloh land. We maintain our
TRADING BUY recommendation and target price of RM2.53, pegged to an
unchanged 20% RNAV discount.
• Positive on the proposed merger. Although we are overall positive on the
proposed merger, the RM2.30 swap price for MRCB was a slight negative.
However, investors are not likely to be worse off as the combined listed entity will
provide investors with exposure to a larger, more credible and liquid property stock,
with probably more attractive upside.
• To merge by end-2Q11. The deal is expected to be completed at end-2Q11 at the
earliest. The combined listed entity is expected to be more liquid and have a good
mix of institutional and retail investors.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 788.6 921.6 1,065.6 1,182.2 1,313.0
EBITDA (RM m) 3.8 45.3 121.8 140.5 156.3
EBITDA margins (%) 0.5% 4.9% 11.4% 11.9% 11.9%
Net profit (RM m) (56.6) 34.6 51.3 66.4 80.4
EPS (sen) (6.2) 3.8 3.8 4.9 5.9
EPS growth (%) (191.6%) 161.1% (1.3%) 29.4% 21.0%
P/E (x) nm 52.7 53.4 41.3 34.1
Core EPS (sen) (3.4) 3.8 3.8 4.9 5.9
Core EPS growth (%) (149.5%) 213.0% (1.3%) 29.4% 21.0%
Stock Information
Core P/E (x) nm 52.7 53.4 41.3 34.1
Market cap: RM2,776m/US$882m Gross DPS (sen) 0.0 1.0 1.0 1.0 1.0
RM1.24 P/BV (x) 2.7 2.6 3.6 3.3 3.0
3-m avg daily vol: 6.0m ROE (%) (8.2%) 5.0% 6.9% 8.3% 9.2%
No. of shrs (m): 1,381 Net gearing (%) 39.3% 37.0% 26.6% 14.8% 2.3%

2.3 5.00
MRCB is a diversified GLC with businesses in four key areas – engineering &
2.1 4.00 construction, property, infrastructure & concessions and building services. The
1.9
3.00 company is a leading premier property developer and a major construction player. It
1.7
1.5
2.00 specialises in civil and energy infrastructure development and has built transmission
1.3
1.00 networks, colleges, transportation facilities, hospitals and roads all over the country.
1.1
0.00
The group is the nation’s biggest developer of high-voltage transmission networks. On
Volume 10m (R.H.S ca le ) Ma la ys ia n Re s ource s Corp Bhd the property front, its flagship development is the 72-acre KL Sentral which remains
Source: Bloomberg the group’s crown jewel.

Financial tables

Revenue 789 922 1,066 1,182 1,313 Revenue growth (%) (8.7) 16.9 15.6 10.9 11.1
Operating expenses (785) (876) (944) (1,042) (1,157) EBITDA growth (%) (97.6) 1,089.9 168.9 15.4 11.2
EBIT (4) 36 112 130 145 Interest cover (x) (0.1) 0.9 1.1 1.3 1.5
Net interest & invt income 3 27 (64) (63) (60) Effective tax rates (%) N/A 19.4 24.0 24.0 24.0
Associates’ contribution (15) (16) 21 21 22 Net dividend payout (%) N/A 20.8 20.3 16.6 13.9
Tax (20) (9) (16) (21) (26)
Net profit (57) 35 51 66 80
Adj. wt. shares (m) 908 908 1,364 1,364 1,365
Unadj. year-end shares (m) 908 908 1,364 1,365 1,365

Fixed assets 28 28 27 27 26 Orderbook depletion (RM' m) 500 400 600 600
Intangible assets 10 10 10 10 10 Orderbook replenishment (RM m) 500 500 500 500
Stocks 15 15 15 15 15
Trade debtors 504 555 596 661 734
Trade creditors 855 886 950 1,048 1,164
NTA/share (RM) 0.74 0.77 0.55 0.60 0.66

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit (42) 46 68 88 107
Working capital changes 124 (20) 24 33 43

Cash tax paid 30 (16) (5) (5) (4) 38.0
Others 12 (10) 44 42 38
Capex (8) 0 0 0 0
Others 0 0 0 0 0
Cash flow from investing (9) 0 1 1 0
23.0
18.0

MALAYSIA
Masterskill Education Group RM2.14 @06/12/10
Making the grade for long-term investment Target: RM4.48
Education
MASEG MK / MAED.KL Sharizan Rosely +60 (3) 2084 9864 – sharizan.rosely@cimb.com
• Maintain OUTPERFORM. Although uncertainty over the status of the PTPTN loan
scheme may overhang Masterskill’s share price in the near term, we maintain our
OUTPERFORM stance as the stock scores on long-term fundamentals and
defensiveness. Applying a 10% discount to our revised target market P/E of 14.5x
(previously on par with 13.8x) to reflect risks relating to the PTPTN loan scheme,
our target price goes down from RM4.73 to RM4.48. The stock could be catalysed
by (ii) a favourable decision on the PTPTN appeal, (ii) better-than-expected student
growth, and (iii) recovery in investor sentiment. Valuations are attractive at 6-7x
CY11-12 P/E.
• Fundamentally still attractive. We still regard Masterskill’s (i) leading position in
the industry with the highest market share in its segment, (ii) EBITDA margin of
over 40% which is higher than local education companies’ 15-20%, and (iii)
exposure to the growth prospects of both the healthcare and education sectors as
key factors that will ensure strong fundamentals over the long term.
• More of a margin impact from new PTPTN scheme. The potential new loan
scheme will affect Masterskill’s margins more than its student population or
enrolment. Also, it will hit only the Kuching campus as (i) this campus is new, and
(ii) it offers two new diploma courses. We estimate only a 1-2% dent on group
earnings. Management stressed that it will not affect the bottomline immediately as
diploma programmes span three years. Though the timing of a decision on the
appeal is unclear, we continue to believe that it will be in the group’s favour.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 202.9 273.4 326.4 363.0 410.0
EBITDA (RM m) 90.1 123.5 139.5 159.0 182.4
EBITDA margins (%) 44.4% 45.2% 42.7% 43.8% 44.5%
EPS (sen) 17.6 23.8 25.3 29.0 34.3
Market cap: RM877m/US$279m EPS growth (%) 40.2% 35.1% 6.5% 14.7% 18.2%
RM2.06 Gross DPS (sen) 0.0 0.0 12.6 14.5 17.1
No. of shrs (m): 410 P/BV (x) 5.5 3.1 2.2 1.7 1.3
- Dato' Seri Edmund Santhara 22.1 EV/EBITDA (x) 9.6 6.5 4.8 3.6 2.4
- Masterskill Holding Ltd 21.5 % change in EPS estimates - - -
- Fidelity 9.6 CIMB/Consensus (x) 0.98 0.95 0.94

4.4 8.00 Masterskill provides education programmes that develop skilled professionals in the
7.00
3.9
6.00
areas of nursing and allied health. It is the largest nursing and allied health education
3.4
5.00
4.00
provider in Malaysia. Masterskill is the leading brand in healthcare education and has
2.9 3.00 significant scale compared to its competitors. Based on student enrolment, the group
2.4
2.00
1.00
had 22% market share of nursing education among private higher education
1.9
Ma y-10 Aug -10 Nov-10
0.00
institutions in 2010. Masterskill offers diploma and degree programmes targeted
Volume 10m (R.H.S ca le ) Ma s te rs kill Educa tion Group primarily at Malaysian secondary school leavers and will soon venture into medical
Source: Bloomberg and masters degree programmes as it moves up the value chain.

Financial tables

Net interest & invt income (1) 0 (1) 4 8 Effective tax rates (%) 10.0 13.3 18.4 20.3 20.5
Tax (8) (15) (23) (30) (36)
Net profit 72 97 104 119 141
Adj. wt. shares (m) 410 410 410 410 410

Fixed assets 97 140 144 148 154 Number of students 17,402 19,594 21,831 23,989
Intangible assets 0 0 0 0 0 Average school fees (RM/student) 48,500 48,500 48,500 49,955
Other long-term assets 0 0 0 0 0 Campus utilisation rates (%) 43 55 58 60
Stocks 0 0 0 0 0
Trade debtors 89 130 146 162 184
NTA/share (RM) 0.39 0.70 0.95 1.24 1.59

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 16.0
Pretax profit 80 112 127 149 177
15.0
Cash tax paid (7) (14) (23) (30) (36) 13.0

Others (1) 0 33 (10) (15)
12.0
Capex (46) (67) (16) (17) (19) 11.0
10.0
Others 0 15 0 0 0
Debt raised/(repaid) (21) (4) 70 51 16 8.0

7.0
Dividends paid 0 0 (52) (59) (70) May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10
Cash flow from financing (6) 7 84 69 46
Change in cash 16 56 203 158 145

MALAYSIA
NEUTRAL Maintained
Maxis Berhad RM5.36 @07/12/10
Not maxed out Target: RM5.60
MAXIS MK / MXSC.KL Kelvin Goh CFA +60(3) 2084 9699 – kelvin.goh@cimb.com
• Maxis is a NEUTRAL as its fairly attractive dividends make up for the lack of price
catalysts and low earnings growth. Voice revenue is coming under pressure due to
falling tariffs and dwindling price elasticity but is compensated by rising data
revenue. Our DCF-based target price remains intact at RM5.60 (WACC 10.8%).
• Data-driven revenue. Maxis expects its FY11 revenue growth to accelerate to mid-
single digit from an expected 3% in FY10 and also a slight rise in EBITDA margin,
which is consistent with our view. This is lower than Celcom’s and DiGi’s
expectation of high-single digit growth given its larger base. Maxis believes that
data revenue will continue compensating for the decline in voice, where price
elasticity has been maximised. FY11 capex should remain at the FY10 level of
RM1.4bn though this figure is likely to fall if it inks an agreement to use Telekom
Malaysia’s HSBB network. The telco indicated that it is close to signing an
agreement, after being delayed for a few months.
• Quad play ambitions. Maxis is investing RM200m in fibre to the home. It is
engaging TM on a pricing and service level agreement to access TM’s highspeed
broadband network.
• Will Maxis deliver 40-50 sen net DPS? Maxis is vague over whether it will deliver
the 40-50 sen net DPS that its major shareholder indicated during its IPO. We
assume that it will declare a net DPS of 38 sen, implying a final special dividend of
6 sen on top of a quarterly DPS of 8 sen.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 8,449.8 8,611.0 8,899.8 9,405.0 9,980.0
EBITDA (RM m) 4,402.0 4,318.0 4,426.1 4,790.2 5,093.1
EBITDA margins (%) 52.1% 50.1% 49.7% 50.9% 51.0%
Net profit (RM m) 2,394.7 2,232.0 2,320.4 2,545.3 2,778.7
EPS (sen) 31.9 29.8 30.9 33.9 37.0
EPS growth (%) 20.9% (6.8%) 4.0% 9.7% 9.2%
P/E (x) 16.8 18.0 17.3 15.8 14.5
Core EPS (sen) 31.9 30.8 30.9 33.9 37.0
Core EPS growth (%) 1.7% (3.6%) 0.5% 9.7% 9.2%
Stock Information
Core P/E (x) 16.8 17.4 17.3 15.8 14.5
RM5.12 P/BV (x) 9.4 4.5 4.7 5.0 5.2
No. of shrs (m): 7,500 Net gearing (%) N/A 42.8% 57.0% 64.1% 71.3%
- Maxis Communications 70.0 CIMB/Consensus (x) 1.00 1.03 1.07

5.8
5.7
Maxis is Malaysia’s largest mobile phone operator with 40% subscriber market share
2.00
5.6
5.5
and 42% share of revenue. It has dominated the mobile scene with its strong branding
1.50
5.4
5.3
and good customer service. Mobile contributes 93% of group revenues, with 5% from
5.2
5.1
1.00
international gateway and 2% from fixed line/Internet. Maxis began commercial
5.0
4.9
0.50
operations in Aug 1995 and was listed on Bursa Malaysia in Jul 02 as Maxis
4.8
0.00
Communications Bhd. It acquired Aircel in Mar 06 and Natrindo Telepon Selular in
Volume 10m (R.H.S ca le ) Ma xis Be rha d April 07. Maxis was delisted in Jul 07 but relisted in Nov 09 as Maxis Bhd with only
Source: Bloomberg the Malaysian operations.

Financial tables

Tax (833) (775) (845) (927) (1,012)
Net profit 2,395 2,232 2,320 2,545 2,779
Adj. wt. shares (m) 7,500 7,500 7,500 7,500 7,500

Fixed assets 4,456 4,555 4,901 4,924 4,905 Blended mobile ARPU (RM) 61.7 63.9 55.2 49.5
Intangible assets 90 11,019 11,019 11,019 11,019 Postpaid ARPU (local currency) 104.0 103.0 103.0 99.9
Other long-term assets 284 92 92 92 92 Prepaid ARPU (local currency) 41.0 34.9 33.1 31.5
Total non-current assets 4,830 15,666 16,012 16,035 16,016 Broadband ARPU (RM) 97.0 63.1 56.7 51.1
Cash and equivalents 1,692 1,192 2,157 1,800 1,512 No of mobile subscribers (m) 12.03 12.99 13.53 14.07
Stocks 108 134 73 77 82 No of postpaid mobile subs (m) 2.71 2.65 2.71 2.77
Trade debtors 744 790 735 751 770 No of prepaid mobile subs (m) 9.32 10.34 10.82 11.30
Other current assets 1,065 16 16 16 16 No. of broadband subscribers (m) 0.25 0.70 1.20 1.70
Trade creditors 1,978 2,496 2,186 2,255 2,387
NTA/share (RM) 0.56 (0.28) (0.34) (0.39) (0.44)

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 18.0
Pretax profit 3,228 3,007 3,166 3,472 3,791
Depreciation & non–cash adj. 1,192 1,165 1,054 1,076 1,067 17.5
Working capital changes (853) 447 (195) 49 110
Cash tax paid (789) (775) (845) (927) (1,012) 17.0
Others 443 (719) 206 242 235
16.5
Capex (796) (1,222) (1,400) (1,100) (1,048)
16.0
Others (8) 1,010 0 0 0
Cash flow from investing (803) (212) (1,400) (1,100) (1,048)
15.5
Debt raised/(repaid) (167) 4,020 1,969 0 0
15.0
Dividends paid (720) (5,441) (2,784) (2,927) (3,195) Nov-09 Mar-10 Jul-10 Nov-10
Cash interest & others (568) (1,992) (206) (242) (235)
Cash flow from financing (1,454) (3,413) (1,022) (3,169) (3,431)
Change in cash 965 (500) 965 (357) (288)
Change in net cash/(debt) 1,132 (4,520) (1,004) (357) (288)
Ending net cash/(debt) 690 (3,830) (4,834) (5,191) (5,479)

MALAYSIA
Media Chinese International Ltd RM0.88 @06/12/10
A clearer print Target: RM1.52
Media - Integrated
MCIL MK / MDCH.KL Sharizan Rosely +60 (3) 2084 9864 – sharizan.rosely@cimb.com
• Maintain OUTPERFORM. We continue to like MCIL for its dominance of the

recovering Chinese newspaper segment and continuing reaping of merger
synergies. We maintain our EPS forecasts but increase our target price from
RM1.45 to RM1.52 as we apply our revised CY12 target market P/E of 14.5x (13.8x
previously) to the stock. The stock remains an OUTPERFORM in light of the
potential re-rating catalysts of (i) positive earnings surprises, and (ii) the continued
recovery of Chinese newspaper adex. MCIL remains one of our top picks for the
sector, backed by its attractive dividend yield of 6%.
• Ad rate hike shows pricing power. Although 2HFY3/11 is likely to be subdued,
profitability in the next two years will be underpinned by merger synergies, superior
operating efficiency for its Malaysian operations and better cost management. The
3-7% increase in ad rates for Sin Chew and China Press for 2011 is good news and
signals the group’s optimism on adex trends for FY11.
• Jewel is still its Malaysian operations. The group’s Malaysian operations through
Sin Chew and Nanyang remain the main earnings driver (60% of pretax profit) and
should continue to cushion the potential downside to earnings in the coming
quarters. The broad-based recovery of newspaper adex (+15% yoy in Jan-Sep 10)
is positive for the group’s Malaysian operations as it controls more than 80% of
Chinese newspaper adex.
Financial summary
FYE Mar 2009 2010 2011F 2012F 2013F
Revenue (RM m) 1,437.8 1,226.7 1,636.5 1,698.5 1,822.4
EBITDA (RM m) 119.7 176.4 206.8 227.6 245.3
EBITDA margins (%) 8.3% 14.4% 12.6% 13.4% 13.5%
Net profit (RM m) 61.2 134.2 151.4 166.6 178.8
EPS (sen) 3.6 8.0 9.0 9.9 10.6
EPS growth (%) (40.6%) 119.2% 12.8% 10.0% 7.3%
P/E (x) 24.2 11.1 9.8 8.9 8.3
Core EPS (sen) 4.1 7.8 9.0 9.9 10.6
Stock Information Core EPS growth (%) (32.8%) 90.5% 14.9% 10.0% 7.3%
Core P/E (x) 21.5 11.3 9.8 8.9 8.3
Market cap: RM1,482m/US$471m
Gross DPS (sen) 2.9 4.2 5.0 5.0 5.0
Dividend yield (%) 3.2% 4.8% 5.7% 5.7% 5.6%
RM0.53
P/BV (x) 1.3 1.2 1.1 1.0 1.0
ROE (%) 5.6% 11.5% 12.1% 12.2% 12.1%
Net cash per share (RM) 0.18 0.22 0.26 0.32 0.36
P/FCFE (x) 38.2 11.7 12.0 10.2 11.3
Conv. secs (m): None
EV/EBITDA (x) 9.8 6.3 5.0 4.2 3.5
Major shareholders (%):
% change in EPS estimates N/A N/A N/A
- Tan Sri Datuk Tiong Hiew 50.0
King CIMB/Consensus (x) 2.99 3.09 3.21

1.0
1.0
Media Chinese International Ltd (MCIL) is the product of a merger of Sin Chew Media
5.00
0.9
0.9 4.00
Corporation, Nanyang Press and Ming Pao Enterprise Corp (Hong Kong). The
0.8
0.8 3.00
enlarged group is the largest print publisher in Malaysia as well as the region and
0.7
0.7
2.00 controls 77% of the Chinese print segment in Malaysia. MCIL’s earnings are anchored
0.6
0.6
1.00 by the Malaysian operations which contribute 80% of group pretax profit. Over the
0.5
0.00
long run, the group’s exposure to Hong Kong, San Francisco, Vancouver, Toronto
Volume 1m (R.H.S ca le ) Me dia Chine s e Inte rna tiona l Ltd and New York will provide a global dimension to earnings.
Source: Bloomberg

Financial tables

Tax (50) (45) (45) (50) (54)
Minority interests (2) (1) 0 0 0
Net profit 61 134 151 167 179
Adj. wt. shares (m) 1,686 1,686 1,686 1,686 1,686

Fixed assets 184 186 188 189 191 Adex revenue growth (%) -3.0% 6.0% 3.0% 8.0%
Intangible assets 46 46 46 46 46 Market share of adex (%) 85.0% 86.0% 87.0% 87.0%
Stocks 485 497 513 528 566
Trade debtors 289 297 314 326 350
NTA/share (RM) 0.64 0.69 0.75 0.81 0.89

(RM m, FYE Mar) 2009 2010 2011F 2012F 2013F
Pretax profit 113 180 197 216 233 20.0

18.0
Cash tax paid (34) (36) (45) (50) (54) 16.0
Others (3) (2) (2) (1) 0
Capex (13) (13) (14) (14) (14)

12.0
Others 0 0 0 0 0 10.0
6.0
Dividends paid (35) (36) (45) (50) (54) May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11

MALAYSIA
NEUTRAL Maintained
Media Prima Bhd RM2.34 @06/12/10
Fruits of consolidation Target: RM2.78
Media - Integrated
MPR MK / MPRM.KL Sharizan Rosely +60 (3) 2084 9864 – sharizan.rosely@cimb.com
• Staying NEUTRAL. Despite the sustained ad volume momentum for the FTA TV
segment, we remain NEUTRAL on Media Prima as we believe its share price
already reflects the positives from the consolidation of NSTP. However, we raise
our FY10-12 EPS forecasts by 2-8% for stronger ad volume assumptions, partly
because of an expected pre-election adex boost, especially for NSTP. This, coupled
with an increase in our CY12 target market P/E from 13.8x to 14.5x, raises our
target price from RM2.46 to RM2.78. For exposure to the media sector, we prefer
Star Publications and Media Chinese International given their higher upside and
dividend yields.
• Still driven by TV. Due to the inclusion of NSTP, Media Prima’s revenue from TV
notched up 22% yoy growth in 9M10, which was also in line with the ad volume
momentum in the TV segment. A lower effective rate discount of 67% compared to
68% in 2009 signals a sustained recovery of TV ad volume. But viewership has
come off from 50% in 2009 to 46%, which is a slight concern.
• Cushioned by NSTP. Media Prima currently controls 98% of NSTP. NSTP, which
contributes 44% of group revenue, is benefiting from lower newsprint cost and
growth of Malay newspaper ad volume. This should offset potential downside to
Media Prima’s earnings.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 781.3 744.1 1,418.9 1,500.3 1,593.5
EBITDA (RM m) 190.1 146.7 309.7 340.2 375.3
EBITDA margins (%) 24.3% 19.7% 21.8% 22.7% 23.6%
Net profit (RM m) 117.7 251.8 158.2 181.7 207.4
EPS (sen) 12.0 25.8 16.2 18.6 21.2
EPS growth (%) 0.2% 114.0% (37.2%) 14.9% 14.2%
P/E (x) 19.4 9.1 14.5 12.6 11.0
Core EPS (sen) 12.3 27.4 16.2 18.6 21.2
Core EPS growth (%) 4.1% 123.1% (40.8%) 14.9% 14.2%
Core P/E (x) 19.1 8.6 14.5 12.6 11.0
Stock Information FD core EPS (sen) 10.9 24.3 14.7 16.9 19.2
Market cap: RM2,345m/US$745m FD core P/E (x) 21.5 9.6 15.9 13.9 12.2
No. of shrs (m): 1,002 ROE (%) 58.0% 96.0% 47.6% 41.7% 37.1%
Conv. secs (m): 150 Net cash per share (RM) N/A N/A N/A N/A 0.08
- EPF 25.3 EV/EBITDA (x) 13.2 16.5 7.6 6.8 5.9
- Gabungan Kesturi 14.4 % change in EPS estimates 1.5% 3.0% 8.2%

2.5
0.80
Media Prima became a media entity after the restructuring of Malaysian Resources
0.70
2.3 0.60 Corporation (MRCB) which resulted in it owning TV3 and print media company NSTP.
2.1
0.50
0.40
Today, Media Prima is the dominant free-to-air (FTA) TV company in Malaysia. With
1.9 0.30 control of all private TV stations, the group also generates revenue streams from the
0.20
1.7
0.10
print, radio and outdoor platforms. This diversification allows the group to capture a
1.5
0.00
substantial portion of the advertising spending in Malaysia. The well-defined target
Volume 10m (R.H.S c a le ) Me dia P rima Bhd audience of its four key TV channels exposes the company to minimal competitive
Source: Bloomberg risks. The successful privatisation of NSTP will be long-term positive for the group.

Financial tables

Revenue 781 744 1,419 1,500 1,593 Revenue growth (%) 13.0 (4.8) 90.7 5.7 6.2
Operating expenses (591) (597) (1,109) (1,160) (1,218) EBITDA growth (%) 17.7 (22.8) 111.1 9.8 10.3
Tax (42) (24) (36) (38) (45)
Minority interests 0 0 (5) (6) (3)
Net profit 118 252 158 182 207
Adj. wt. shares (m) 977 977 977 977 977

Fixed assets 182 154 212 265 314 Market share of adex (%) 30.0% 30.0% 30.0% 30.0%
Intangible assets 35 35 35 35 35 Market share of viewers (%) 50.0% 50.0% 50.0% 50.0%
Other long-term assets 324 324 324 324 324 Programming costs (% of op costs) 25.0% 25.0% 25.0% 25.0%
Total non-current assets 541 514 571 625 673 Programming costs (RM' million) 150 277 290 305
Stocks 2 2 2 2 2
Trade debtors 336 320 609 645 685
NTA/share (RM) 0.21 0.26 0.35 0.47 0.60

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 159 276 200 225 256 21.0

Working capital changes 11 124 20 (4) (5)
17.0
Cash tax paid (42) (37) (36) (38) (45)
Others (16) 2 5 18 18 15.0
Capex (20) (19) (150) (150) (149)
11.0
Net investments & sale of FA (13) (103) 0 0 0
9.0
Others 0 0 0 0 0

3.0

MALAYSIA
MISC Bhd RM8.75 @07/12/10
Battling cyclical and structural negatives Target: RM7.00
Tanker Shipping
MISC MK / MISC.KL Raymond Yap CFA +603 2084 9769 – raymond.yap@cimb.com
• Maintain UNDERPERFORM. MISC is battling unfavourable fundamentals in the

crude tanker and chemical shipping markets. We retain our UNDERPERFORM call
and target price of RM7 based on 18x CY12 EPS or a 25% premium over our target
market P/E. MISC is also trading at a premium over its US-listed tanker peers. The
premium over the KLCI is counterintuitive given MISC’s relatively poor prospects.
This may be due to MISC’s low free float of only 17% and low foreign interest in the
stock with just 5% holdings.
• Shipping rates to remain weak. Rates for crude tanker and chemical are expected
to remain weak for at least another year. In addition, MISC’s liner shipping division
is still making large losses even though the industry enjoyed record profitability
during Jul-Sep 10. While its offshore and heavy engineering businesses continue to
grow and earn higher profits, we think that investors in MISC are focused on the
prospects of its shipping earnings, especially since investors can gain direct access
to its heavy engineering business (MMHE MK, Not Rated) that was recently listed.
• Baffling liner losses. Despite securing very cheap chartered-in ships, MISC’s liner
division recorded a negative EBIT margin of 16.3% in Jul-Sep 10 against APL’s
14% and probably even higher margins at OOCL and CSCL. The business appears
to be structurally unsound and will continue to be a millstone around MISC’s neck.
Financial summary
FYE Mar 2009 2010 2011F 2012F 2013F
Revenue (RM m) 15,783.4 13,775.0 14,056.7 14,350.7 15,319.7
EBITDA (RM m) 4,943.9 2,514.4 3,332.8 3,643.5 3,805.8
EBITDA margins (%) 31.3% 18.3% 23.7% 25.4% 24.8%
Pretax profit (RM m) 3,271.4 911.8 1,624.3 2,013.9 2,208.6
Net profit (RM m) 3,081.0 681.9 1,330.5 1,603.2 1,771.6
EPS (sen) 79.9 17.4 29.8 35.9 39.7
EPS growth (%) 26.8% (78.2%) 71.1% 20.5% 10.5%
P/E (x) 10.9 50.2 29.4 24.4 22.0
Core EPS growth (%) 39.1% (70.8%) 27.8% 20.5% 10.5%
No. of shrs (m): 4,464 ROE (%) 15.6% 3.1% 5.6% 6.8% 7.5%
Conv. secs (m): None P/FCFE (x) 10.8 104.5 (279.8) 21.0 23.1
- Petronas 62.7 % change in EPS estimates N/A N/A N/A

9.4
0.90
0.80
MISC is Malaysia’s premier shipping company, engaged primarily in energy-related
8.9
0.70 shipping of LNG and crude petroleum. Other divisions include container shipping,
0.60
0.50 chemical shipping, offshore oil and gas solutions (FPSO/FSO) and heavy engineering
8.4
0.40
0.30
(shipbuilding and repair). A significant proportion of MISC’s earnings, i.e. from the
7.9 0.20
0.10
LNG and offshore businesses, are stable due to the long-term nature of its contracts.
7.4
0.00
However, earnings from the petroleum, chemical and liner divisions do fluctuate with
Volume 10m (R.H.S ca le ) MIS C Bhd changes in spot freight rates. MISC is leveraged to Petronas’s expansion and will
Source: Bloomberg benefit from its development of offshore oil and gas fields in Malaysia and abroad.

Financial tables

Pretax profit 3,271 912 1,624 2,014 2,209 Creditors turnover (days) 69.6 97.2 100.4 95.8 93.1
Tax (68) (90) (65) (81) (88)
Net profit 3,081 682 1,331 1,603 1,772
Adj. wt. shares (m) 3,854 3,915 4,464 4,464 4,464

Fixed assets 27,385 28,229 28,041 27,864 28,182 Fleet size (number of vessels) 174 191 194 194
Intangible assets 1,028 963 963 963 963 No of LNG tankers 29 29 29 29
Other long-term assets 961 1,642 3,316 3,515 3,746 No of petroleum tankers 75 84 87 87
Total non-current assets 29,373 30,834 32,320 32,342 32,892 No of chemical tankers 24 32 32 32
Cash and equivalents 3,725 7,849 6,239 6,540 6,666 No of container shipped 35 35 35 35
Stocks 442 345 328 328 352 No of offshore vessels 7 7 7 7
Trade debtors 2,844 1,994 2,035 2,077 2,217 Petroleum TCE rate (yoy chg %) -31.1% 10.0% -5.0% -5.0%
Other current assets 373 39 39 39 39 Chemical TCE rate (yoy chg %) -12.3% -5.0% 10.0% 10.0%
Total current assets 7,384 10,226 8,640 8,983 9,275 Liner rates (yoy change %) -30.0% 0.0% 10.0% 10.0%
Trade creditors 3,380 3,959 3,771 3,765 4,048
Minority interests 341 374 603 933 1,282
NTA/share (RM) 5.17 5.09 5.05 5.06 5.11

(RM m, FYE Mar) 2009 2010 2011F 2012F 2013F
Pretax profit 3,271 912 1,624 2,014 2,209
34.0
Depreciation & non–cash adj. 1,676 1,288 1,688 1,677 1,681
Working capital changes 85 1,527 (213) (48) 119
29.0
Cash tax paid (68) (90) (65) (81) (88)
Others (1,556) (119) 20 (48) (84)
Capex (4,011) (4,696) (1,500) (1,500) (2,000)

Net investments & sale of FA 0 0 (1,556) 0 0 19.0
Others 81 (26) 0 0 0
Debt raised/(repaid) 4,324 920 0 0 0
Equity raised/(repaid) 0 5,203 0 0 0
9.0
Cash flow from financing 2,282 5,327 (1,609) (1,714) (1,710)
Change in cash 1,761 4,124 (1,610) 301 127
Change in net cash/(debt) (2,563) 3,204 (1,610) 301 127

MALAYSIA
MTD ACPI Engineering RM0.51 @07/12/10
Down and out for now Target: RM0.32
Construction
ACP MK / MTDA.KL Nigel Foo +60(3) 2084 9293 – nigel.foo@cimb.com
• Maintain UNDERPERFORM. MTD-ACPI remains an UNDERPERFORM. We

maintain our target price of RM0.32, which is based on an unchanged 30% discount
to the stock’s average 12-month P/BV of 0.6x. Continuous quarterly losses and
depleting order book are potential de-rating catalysts. We continue to rate MTD-
ACPI an UNDERPERFORM and prefer Muhibbah Engineering (MUHI MK,
Outperform) for a mid-cap construction play.
• Dwindling order book a major concern. The group’s outstanding order book of
only RM900m can sustain it for just another year or so. This continues to be a major
concern. Over the past year, it has not secured any construction jobs, whether
overseas or locally. Its largest construction job is the East Coast Expressway 2,
(Package 10), which is expected to be fully completed by FY12.
• Potential loss from Bakun? Furthermore, MTD-ACPI could still be liable for losses
relating to Bakun as it has a 7.7% equity stake in the consortium involved in the
Bakun dam. There are still no details on the potential provisions for the project. In
the worst-case scenario, MTD-ACPI may have to bear RM100m loss for Bakun
though we believe this is unlikely.
• Selling part of its precast business. The company is talking to a few parties on
selling some of its manufacturing precast concrete assets. Negotiations, however,
are at a preliminary stage. We estimate the total book value for its precast concrete
business to be around RM180m. But given that the assets are loss-making and are
not showing any signs of a major turnaround, any asset sale would probably be at a
deep discount to the book value. Furthermore, sale of the assets could dampen the
group’s long-term earnings growth prospects.
Financial summary
FYE Mar 2009 2010 2011F 2012F 2013F
Revenue (RM m) 966.4 642.1 677.0 701.8 601.8
EBITDA (RM m) 28.0 5.0 4.4 35.5 34.0
EBITDA margins (%) 2.9% 0.8% 0.6% 5.1% 5.7%
Pretax profit (RM m) (4.0) (11.7) (14.0) 20.5 19.0
Net profit (RM m) (12.8) (18.5) (18.4) 11.3 10.0
EPS (sen) (5.8) (8.0) (7.9) 4.9 4.3
Stock Information EPS growth (%) (455.6%) (38.3%) 0.5% 161.2% (11.4%)
Market cap: RM118m/US$38m P/E (x) nm nm nm 10.5 11.9
No. of shrs (m): 232 ROE (%) (5.3%) (9.5%) (10.9%) 6.9% 5.8%
Conv. secs (m): None Net cash per share (RM) N/A N/A N/A 0.13 0.23
- MTD Capital 38.1 EV/EBITDA (x) 4.7 26.4 30.6 2.9 2.5
- Metacorp 11.8 % change in EPS estimates - - -

0.8
0.8 25.00
MTD-ACPI is MTD Capital’s construction and building material arm. Its outstanding
0.7
0.7 20.00
construction order book is currently around RM900m. The company should benefit
0.6
0.6 15.00
from the implementation of the major infrastructure projects as it is the country’s
0.5
0.5
10.00 biggest precast concrete producer, supplying a third of the products needed for
0.4
0.4
5.00 domestic infrastructure construction. It has 11 plants located across Peninsular
0.3
0.00
Malaysia with 1.5m tonnes of annual production capacity. MTD-ACPI has a niche in
Volume 1m (R.H.S ca le ) MTD ACP I E ngine e ring higher-margin specialised precast concrete products like segmental box girders
Source: Bloomberg (SBG), precast tunnel lining segment and concrete railway sleepers.

Financial tables

Revenue 966 642 677 702 602 Revenue growth (%) 10.9 (33.6) 5.4 3.7 (14.3)
Operating expenses (938) (637) (673) (666) (568) EBITDA growth (%) (26.5) (82.1) (12.3) 709.8 (4.2)
EBITDA 28 5 4 36 34 Pretax margins (%) (0.4) (1.8) (2.1) 2.9 3.2
Depreciation & amortisation (19) (19) (19) (19) (19) Net profit margins (%) (1.3) (2.9) (2.7) 1.6 1.7
EBIT 10 (14) (14) 17 16 Interest cover (x) 0.6 N/A (36.8) N/A N/A
Net interest & invt income (16) 4 0 3 3 Effective tax rates (%) N/A N/A N/A 28.0 28.0
Associates’ contribution 3 (2) 1 1 1 Net dividend payout (%) N/A N/A N/A 14.2 16.0
Pretax profit (4) (12) (14) 21 19 Creditors turnover (days) 138.0 209.5 206.5 212.5 247.8
Tax (14) (5) (2) (6) (5)
Net profit (13) (19) (18) 11 10
Adj. wt. shares (m) 222 232 232 232 232

Fixed assets 149 138 130 121 113 Construction margins (%) 1.0% -3.0% 3.0% 3.0%
Intangible assets 60 57 57 57 57 Production capacity (million tonnes) 1.5 1.5 1.5 1.5
Other long-term assets 31 27 27 27 32 Utilisation rate (%) 50.0% 55.0% 60.0% 65.0%
Stocks 67 44 77 70 75
Trade debtors 232 246 259 260 260
NTA/share (RM) 0.67 0.53 0.44 0.48 0.51

(RM m, FYE Mar) 2009 2010 2011F 2012F 2013F
-5.0
Pretax profit (4) (12) (14) 21 19
Depreciation & non–cash adj. 19 19 19 19 19 -10.0
Working capital changes (26) (30) 5 6 (5) -15.0

Cash tax paid (2) 0 1 0 0
-20.0
Others 67 3 (1) (4) (4)
-25.0
Cash flow from operations 54 (21) 9 40 29
Capex (10) (10) (10) (10) (10) -30.0
Net investments & sale of FA 2 17 2 2 2 -35.0

Others (2) 14 0 0 0
-40.0
Cash flow from investing (10) 21 (8) (8) (8)
Debt raised/(repaid) 0 0 0 0 0 -45.0
Equity raised/(repaid) 0 0 0 0 0 -50.0


Cash flow from financing 83 3 (1) 2 2

MALAYSIA
Muhibbah Engineering RM1.36 @06/12/10
Dig in Target: RM2.06
Construction
MUHI MK / MUHI.KL Sharizan Rosely +60 (3) 2084 9864 – sharizan.rosely@cimb.com
• Maintain TRADING BUY. We continue to like this midsized contractor for its
earnings and recovery story. Muhibbah’s share price is down more than 70% from
the historical high of RM4.24 reached in Jul 07. We reiterate our TRADING BUY
call with a higher RNAV-based target price of RM2.06 (RM2.00 previously) as we
apply our revised target market P/E of 14.5x (13.8x before) CY12 to our
construction and shipping net profit forecast. We continue to value the stock at a
20% discount to its RNAV. Factors that could catalyse the stock include (i) a
resolution to the APH project, (ii) contract wins, and (iii) a recovery of investor
sentiment on the stock.
• Diversified earnings. Though infrastructure construction remains the major
contributor at 65% of revenue, Muhibbah has a fairly diversified business model that
provides exposure to oil & gas and airport/road maintenance concessions. The
group’s outstanding order book of RM3bn is good for another three years and has
more room for upside as it is actively bidding for jobs, both locally and overseas.
• APH resolution is a major catalyst. We continue to believe that there is a strong
chance of a resolution to the APH project. We do not discount the possibility of a
shareholding restructuring that could bring in additional funds to revive the project.
This should be positive for the recovery in investor sentiment and is the main
premise of our Trading Buy stance. The stock is trading at attractive CY11-12 P/Es
of 9-10x. Share price weakness presents a buying opportunity.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 2,033.5 2,252.0 1,756.6 1,931.9 2,028.4
EBITDA (RM m) 55.2 76.2 86.7 130.5 146.6
EBITDA margins (%) 2.7% 3.4% 4.9% 6.8% 7.2%
Net profit (RM m) 21.8 12.7 31.6 52.7 60.3
EPS (sen) 5.5 3.2 7.9 13.3 15.1
EPS growth (%) (68.9%) (41.8%) 149.0% 67.0% 14.3%
P/E (x) 24.8 42.7 17.1 10.3 9.0
Core EPS (sen) 2.5 3.8 7.9 13.3 15.1
Stock Information
Core EPS growth (%) (85.9%) 51.7% 111.0% 67.0% 14.3%
Market cap: RM542m/US$172m Core P/E (x) 54.9 36.2 17.1 10.3 9.0
No. of shrs (m): 398 ROE (%) 5.3% 2.8% 6.0% 8.8% 10.1%
- Mac Ngan Boon 17.3 % change in EPS estimates - - -

1.5 4.50
4.00
Set up in 1972 as a marine and civil engineering construction company, Muhibbah
1.4
1.3 3.50 Engineering was listed on the Main Board of Bursa Malaysia in 1994. Over the years,
3.00
1.2
1.1
2.50 it expanded into infrastructure construction, cranes, shipyard and airports as well as
1.0
2.00
1.50
road maintenance concessions. Through its construction, cranes and shipbuilding
0.9
0.8
1.00
0.50
businesses, it offers exposure to the oil and gas segment. This, plus its concessions,
0.7
0.00
gives it a diversified business model. The group’s earnings are also diversified
Volume 10m (R.H.S ca le ) Muhibba h E ngine e ring geographically as it has exposure to 14 countries – the US, UK, Denmark, Germany,
Source: Bloomberg Syria, Sudan, Bahrain, Qatar, UAE, Yemen, Cambodia, Malaysia, Singapore and
Australia.

Financial tables

Revenue 2,034 2,252 1,757 1,932 2,028 Revenue growth (%) 44.1 10.7 (22.0) 10.0 5.0
Tax (10) (39) (18) (26) (29)
Net profit 22 13 32 53 60
Adj. wt. shares (m) 398 398 398 398 398

Fixed assets 481 515 463 485 503 Outstanding orderbook (RM m) 3,118 2,946 3,346 3,746
Intangible assets 24 22 22 22 22 Construction margins (%) 2.0% 5.0% 6.0% 7.0%
Stocks 223 202 262 340 442
Trade debtors 739 940 1,092 1,270 1,475
Trade creditors 784 803 709 846 1,000
Other current liabilities 1,002 829 709 846 1,000
NTA/share (RM) 1.05 1.08 1.46 1.44 1.45

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 45 68 65 96 107 47.0
42.0
Working capital changes (132) 224 (9) (2) 3
Cash tax paid (19) (11) (7) (7) (8) 37.0
Others (20) (17) (19) (8) (7)

32.0
Cash flow from operations (96) 289 71 121 141
Capex (138) (67) (70) (69) (68) 27.0
Net investments & sale of FA (3) 9 36 (15) (52) 22.0

Others 20 24 34 50 74
17.0
Cash flow from investing (121) (34) 0 (34) (46)
Debt raised/(repaid) 298 (203) 39 45 50 12.0
7.0
Change in cash 301 (226) (232) (29) (40)
Change in net cash/(debt) 3 (23) (270) (75) (89)

MALAYSIA
Nestle (Malaysia) Berhad RM43.50 @07/12/10
No sugar rush Target: RM38.85
Food & Beverages
NESZ MK / NESM.KL Norziana Mohd Inon +60(3) 2084 9645 – norziana.inon@cimb.com
• Maintain UNDERPERFORM. Our earnings forecasts and DCF-based target price

of RM38.85 (8.2% WACC) are intact. Given its demanding valuations, Nestle
remains an UNDERPERFORM. The potential de-rating catalysts are 1) a further
upturn in commodity prices, and 2) deceleration of export growth. We advise
investors to switch to our top F&B pick CI Holdings.
• Record export sales. Nestle’s export sales are going from strength to strength.
Thanks to investment in major production lines for Nescafe and Coffee-mate in the
past three years, exports chipped in 23.9% of group revenue in 3Q10, its highest
ever. Nescafe is Nestle’s largest brand after Milo and Maggi. Nestle’s biggest export
market is Asean which is gobbling up Nestle’s additional capacity, aided by
economic growth and rising demand for halal products.
• No price increase planned. Although prices of raw materials such as robusta and
Arabica coffee beans, crude palm oil and wheat flour remain high, a selling price
hike is not in the cards for 2011. Increasing selling prices is Nestle’s last resort as
the company wants to make its products affordable to the masses while protecting
its market share. The last price adjustment was made in 1Q10 when the prices of
Milo powder and 3-in-1 mixes were raised by 9%.
• Halal tax incentives. Nestle has the distinction of being the Nestle group’s global
halal hub. Because of this status, the company enjoyed a low effective tax rate of
around 16% in FY10-12 due to halal tax incentives and reinvestment allowances.
Nestle is likely to continue benefiting from the low tax structure during our forecast
period. We impute an effective tax rate assumption of 16% p.a. in our FY10-12
forecasts.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 3,877.1 3,744.2 3,837.2 3,952.3 4,070.8
EBITDA (RM m) 538.9 548.9 610.8 634.9 659.9
EBITDA margins (%) 13.9% 14.7% 15.9% 16.1% 16.2%
Net profit (RM m) 340.9 351.8 435.9 457.2 479.1
EPS (sen) 145.4 150.0 185.9 195.0 204.3
Stock Information EPS growth (%) 16.7% 3.2% 23.9% 4.9% 4.8%
No. of shrs (m): 235 ROE (%) 60.6% 78.2% 71.6% 57.3% 50.7%
- Nestle S.A. 72.5 % change in EPS estimates - - -

46.8 Nestle is Malaysia’s largest F&B company, boasting household brands such as
44.8 5.00
42.8 Nescafe, Milo, Maggi and Kit Kat. The bulk of sales are generated domestically
4.00
40.8
38.8 3.00
although the company has been steadily expanding its export business, with Asean,
36.8
2.00 Europe and Oceania being its main focus. Nestle became the regional production
34.8
32.8
1.00 centre for Milo and baby cereals after completion of the group’s rationalisation
30.8
De c -09 Ma y-10 Oct-10
0.00
programme in 2003. It is also the global halal hub for the Nestle group. Its
Volume 100k (R.H.S c a le ) Ne s tle (Ma la ys ia ) Be rha d management is renowned for good corporate governance and astute marketing
Source: Bloomberg capabilities.

Financial tables

EBIT 465 461 527 551 575 Interest cover (x) N/A 21.8 75.1 88.3 102.9
Tax (100) (88) (83) (87) (91)
Net profit 341 352 436 457 479
Adj. wt. shares (m) 235 235 235 235 235

Fixed assets 520 703 513 682 1,123 Manufacturing overhead growth (%) 10.0% 10.0% 10.0% 10.0%
Other long-term assets 6 6 7 8 9 SKU 580 609 640 700
Total non-current assets 589 768 574 740 1,178
Cash and equivalents 30 (90) 74 93 114
Stocks 303 321 340 351 361
Trade debtors 385 406 428 440 452
Shareholders’ funds 411 489 729 865 1,026
NTA/share (RM) 1.48 1.83 2.88 3.47 4.17

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 23.0
Pretax profit 441 440 519 544 571
Cash tax paid (111) (112) (113) (83) (87) 21.0
Others (10) 1 141 (75) (97)
20.0
Capex (82) (83) (84) (85) (86)
19.0
Others 0 0 0 0 0
18.0
Debt raised/(repaid) (35) (29) (24) (20) (17)
17.0
Change in cash (160) (120) 165 19 21

MALAYSIA
NEUTRAL Maintained
Pelikan International Corp Bhd RM1.21 @07/12/10
Flying low in Europe Target: RM1.40
Retail
PELI MK / PELK.KL Nigel Foo +60(3) 2084 9293 – nigel.foo@cimb.com
• Reiterate NEUTRAL. Pelikan continues to be a NEUTRAL. We maintain our target

basis of 7.2x P/E, a 45% discount to the regional sector target P/E of 13x, which
pegs the stock at RM1.40. Until we see strong signs of demand recovery in Europe,
we prefer Asia File which offers an attractive dividend yield of 7% and has been
gaining market share in the US and Europe.
• Focus on merging both operations. Management’s focus in 2011 is to merge
Pelikan’s and Herlitz’s operations, leading to cost savings and economies of scale.
Herlitz, which was acquired in 2010, is one of Europe’s largest and oldest stationery
players. It has a strong distribution network in east Europe and complements
Pelikan as 80% of its product range does not overlap with Pelikan’s.
• But synergies to take time. While there could be strong synergies and cost
savings in areas such as distribution, logistics, production and branding with Herlitz,
we believe it will take time, possibly 1-2 years, and a lot of effort to extract
economies of scale and synergies. One of the initial initiatives is the consolidation of
the logistic and distribution centre in Falkensee, near Berlin, Germany. Cost savings
from this move are as much as €5m (RM20m) annually.
• Market conditions in Europe remain sluggish. Market conditions in Europe
remain sluggish despite the rebound of the global economy over the past year. This
is a concern for Pelikan as more than 70% of the group’s revenue comes from
Europe.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 1,286.6 1,153.8 1,798.0 2,013.8 2,315.8
EBITDA (RM m) 108.3 115.6 152.1 155.6 172.1
EBITDA margins (%) 8.4% 10.0% 8.5% 7.7% 7.4%
EPS (sen) 7.9 8.4 12.7 14.9 19.6
Market cap: RM620m/US$198m EPS growth (%) (56.5%) 6.3% 51.0% 17.2% 31.7%
RM1.02 Gross DPS (sen) 1.8 1.8 1.8 1.8 1.8
No. of shrs (m): 513 P/BV (x) 0.8 0.7 0.7 0.7 0.6
Major shareholders (%): P/FCFE (x) (55.9) (33.3) (2.4) 6.8 6.4
- Lembaga Tabung Haji 30.3 EV/EBITDA (x) 8.4 8.4 7.0 6.3 5.2
- Loo Hooi Keat 24.3 % change in EPS estimates - - -
- Pembinaan Redzai S/B 5.9 CIMB/Consensus (x) 1.03 0.97 1.03

1.5
2.50
Pelikan International Corporation owns a global stationery brand, Pelikan, which is
1.4
2.00 recognised for fine writing instruments, painting and printer consumables. Products
1.3
1.2
1.50 can be broken down into three segments: office, writing instruments and hobby/craft,
1.1
1.00 with roughly equal contributions to group sales. More than 80% of revenue comes
1.0 0.50 from Europe. The group has manufacturing plants in Germany, Mexico and Malaysia.
0.9
0.00
In 2010, Pelikan acquired Herlitz, one of Europe’s largest and oldest stationery
Volume 1m (R.H.S ca le ) P e lika n Inte rna tiona l Corp Bhd players. The acquisition almost doubled the group’s revenue and should generate
Source: Bloomberg strong synergies and economies of scale for the group.

Financial tables

Tax (12) (8) (7) (7) (7)
Net profit 41 43 65 76 100
Adj. wt. shares (m) 513 513 513 513 513

Fixed assets 364 360 579 567 556 Revenue growth-Germany (%) -10.0% -5.0% -3.0% 6.0%
Intangible assets 119 122 119 119 119 Exchange rate (Euro/USD) 1.40 1.35 1.35 1.35
Other long-term assets 285 317 285 285 285 Rev growth-Latin America, Asia (%) 5.0% 5.0% 5.0% 0.0%
Stocks 312 290 515 518 537
Trade debtors 311 311 596 598 598
NTA/share (RM) 1.24 1.32 1.45 1.59 1.77

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 50.0
45.0
Cash tax paid (11) (18) (8) (8) (8) 35.0

Others 29 26 8 29 21
30.0
Capex (34) (43) (250) (30) (30) 25.0
20.0
Others (12) (68) 0 0 (1)

5.0
Cash flow from financing (57) 2 143 (30) (22)
Change in cash (38) (22) (83) 89 93

MALAYSIA
Petra Perdana RM0.77 @07/12/10
In calmer waters Target: RM0.98
PETR MK / PTRD.KL Norziana Mohd Inon +60(3) 2084 9645 – norziana.inon@cimb.com
• Maintain TRADING BUY. We maintain our forecasts and RNAV-based target price
of RM0.98. Petra Perdana remains a TRADING BUY, premised on the expectations
of 1) an earnings recovery, and 2) contract wins by 29.6%-owned Petra Energy
(PENB MK, Not Rated) by year-end. Also, the departure of Tengku Datuk Ibrahim
Petra has eliminated the risk of another fight for control.
• Putting its house back in order. The boardroom tussle, which was a major drag
on operations, finally ended when management received the support of the majority
at an EGM on 20 Jul. The close of this disruptive episode has allowed management
to rebuild after 10 months of less-than-optimal running of the business.
Consequently, vessel utilisation rate improved to 60% in 3Q from around 50% in
2Q.
• Hope floats. Petra Perdana could break even in 4Q, thanks to further improvement
in the vessel utilisation rate, which is now more than 60%. Currently, only two
vessels are without contracts, an improvement on five idle vessels in 2Q.
Meanwhile, associate company Petra Energy is bidding for a sizeable topside
maintenance contract after winning a RM400m Petronas Carigali hook-up and
commissioning (HUC) job on 5 Dec. In addition to an associate contribution, Petra
Perdana could also benefit from the HUC contract by chartering its vessels to Petra
Energy, which will need extra capacity to execute the new contract.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 669.6 605.7 448.7 501.2 536.2
EBITDA (RM m) 163.8 85.3 19.5 84.3 99.3
EBITDA margins (%) 24.5% 14.1% 4.3% 16.8% 18.5%
Pretax profit (RM m) 119.3 48.7 (36.7) 37.9 48.2
Net profit (RM m) 84.9 29.3 (40.3) 31.6 41.9
EPS (sen) 28.5 9.9 (12.0) 7.0 9.3
EPS growth (%) (45.5%) (65.5%) (222.1%) 158.4% 32.5%
P/E (x) 2.7 7.8 nm 11.0 8.3
Core EPS (sen) 21.0 5.7 (9.3) 6.0 8.2
Core EPS growth (%) (19.5%) (72.9%) (264.1%) 163.9% 38.3%
Stock Information
Core P/E (x) 3.7 13.6 nm 12.9 9.4
Market cap: RM347m/US$110m FD core EPS (sen) 21.0 5.7 (7.9) 5.2 7.2
12-m price range: RM1.55 FD core P/E (x) 3.7 13.6 nm 14.7 10.6
RM0.75 Gross DPS (sen) 2.8 2.0 2.0 2.0 2.0
No. of shrs (m): 450 P/BV (x) 0.5 0.4 0.4 0.6 0.6
Est. free float (%): 60.8 ROE (%) 19.0% 5.8% (6.9%) 5.3% 7.1%
- PNB 18.2 EV/EBITDA (x) 2.8 5.7 26.4 7.2 6.1
- Shamsul & Kho brothers 11.8 % change in EPS estimates - - -

1.7
Petra Perdana started out in 1995 as an oil & gas engineering and maintenance
2.50
1.5
2.00
player. Without abandoning its engineering roots, the company widened its scope of
1.3
1.50
operations and made a move into marine support in early FY04, taking advantage of
1.1
1.00 what appeared to be a potent combination for marine support success at that time –
0.9 0.50 high crude oil price and shortage of local vessels. With the move into marine support,
0.7
0.00
Petra now has a presence along the entire oil & gas upstream chain. In Jul 07, the
Volume 10m (R.H.S ca le ) P e tra P e rda na engineering arm, Petra Energy, was spun off and listed on Bursa Malaysia. Currently,
Source: Bloomberg Petra Perdana owns 29.6% of Petra Energy.

Financial tables

Revenue 670 606 449 501 536 Revenue growth (%) 0.7 (9.5) (25.9) 11.7 7.0
Operating expenses (506) (520) (429) (417) (437) EBITDA growth (%) 1.4 (47.9) (77.1) 332.5 17.7
EBITDA 164 85 20 84 99 Pretax margins (%) 17.8 8.0 (8.2) 7.6 9.0
Depreciation & amortisation (42) (49) (36) (40) (45) Net profit margins (%) 12.7 4.8 (9.0) 6.3 7.8
EBIT 121 36 (16) 44 55 Interest cover (x) 3.7 1.1 (1.3) 3.6 4.4
Net interest & invt income (25) 0 (12) (12) (12) Effective tax rates (%) 14.8 25.4 N/A 2.9 2.3
Associates’ contribution 0 0 0 0 0 Net dividend payout (%) 7.3 15.0 N/A 21.1 15.9
Exceptional items 23 12 (9) 5 5 Debtors turnover (days) 114.7 129.3 178.0 162.6 155.0
Pretax profit 119 49 (37) 38 48 Creditors turnover (days) 28.0 32.4 45.2 43.1 42.7
Tax (18) (12) (1) (1) (1)
Net profit 85 29 (40) 32 42
Adj. wt. shares (m) 298 298 335 450 450

Fixed assets 444 492 493 493 493 Charter rate (US$ per horse power) 2.30 2.50 2.70 2.80
Intangible assets 0 0 0 0 0 Number of vessels 20 29 29 29
Other long-term assets 0 0 0 0 0 Order book (RM m) 1,500 1,500 1,500 1,500
Total non-current assets 444 492 493 493 493 Overseas rev contribution (%) 16.0% 16.0% 16.0% 16.0%
Cash and equivalents 56 58 59 61 63 Vessel utilisation rate (%) 55.0% 60.0% 65.0% 70.0%
Stocks 36 36 36 37 37
Trade debtors 212 217 221 225 230
NTA/share (RM) 1.47 1.91 1.79 1.32 1.31

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 119 49 (37) 38 48 41.0
31.0
Cash tax paid (18) (18) (16) 0 (1) 21.0
Others 313 487 714 618 605 11.0

Capex (451) (678) (678) (678) (678)
-9.0
Others 3 3 0 0 0 -19.0
Cash flow from investing (448) (545) (677) (676) (675) -29.0
Debt raised/(repaid) 10 0 46 0 0 -39.0
-49.0
Cash flow from financing (8) (16) 30 (18) (18)

MALAYSIA
Petronas Dagangan Bhd RM11.70 @07/12/10
Refuel for dividends here Target: RM15.40
Oil & Gas - Retail
PETD MK / PETR.KL Norziana Mohd Inon +60(3) 2084 9645 – norziana.inon@cimb.com
• Maintain OUTPERFORM. We maintain our forecasts for Petronas Dagangan

(PetDag) but raise our target price from RM14.70 to RM15.40, pegged to a revised
target market P/E of 14.5x (13.8x previously). PetDag remains an OUTPERFORM,
with the potential share price triggers being 1) leadership of the retail and lubricant
segments, and 2) M&As.
• Aiming for leadership positions all around. PetDag is Malaysia’s No. 1
petroleum retailer. It is also the leader in the commercial and liquefied petroleum
gas (LPG) businesses. But PetDag trails behind Shell in the retail and lubricant
businesses. To boost retail income, PetDag is aggressively pushing for sales at the
pumps and Mesra convenience stores, and is hopeful that it will overtake Shell in 2-
3 years’ time. Meanwhile, the low-revenue, high-margin lubricant business is
expected to benefit from tie-ups and improved distribution. Management targets the
lubricant business to be in the top position in five years’ time.
• Attractive growth and dividend plays. PetDag’s 3-year EPS CAGR of 12.8% is
expected to outpace that of selected upstream players. Furthermore, cash-rich
PetDag makes a reliable dividend play despite a regulated operating environment
and high capital requirements. For FY11-13, we forecast capex of RM500m and
generous DPS of 85 sen p.a. PetDag tops the dividend list among local oil & gas
stocks with a 7.3% yield for CY11. The company does not have a dividend policy
and does not intend to have one. We believe management prefers to have the
flexibility to undertake an M&A exercise should the opportunity arise.
Financial summary
FYE Mar 2009 2010 2011F 2012F 2013F
Revenue (RM m) 24,367.6 20,687.0 25,395.6 27,932.3 30,782.3
EBITDA (RM m) 1,039.0 1,280.4 1,460.2 1,592.1 1,753.6
EBITDA margins (%) 4.3% 6.2% 5.8% 5.7% 5.7%
Stock Information Net profit (RM m) 578.7 752.9 883.8 972.5 1,082.1
EPS (sen) 58.2 75.8 89.0 97.9 108.9
Market cap: RM11,623m/US$3,705m EPS growth (%) (12.5%) 30.1% 17.4% 10.0% 11.3%
RM8.55 Gross DPS (sen) 45.0 60.0 85.0 85.0 85.0
No. of shrs (m): 993 P/BV (x) 2.2 1.9 1.8 1.6 1.5
- Petronas 69.9 EV/EBITDA (x) 10.6 8.6 7.5 6.8 6.1
- Valuecap 3.3 CIMB/Consensus (x) 1.13 1.17 1.21

12.1
PetDag undertakes the retail business of Petronas, Malaysia’s sole representative in
2.50
11.6
11.1 2.00
the Fortune 500 list. However, the retailer is mandated to operate only in the local
10.6
1.50
market as Petronas’s overseas retail operations are handled by the holding company
10.1
9.6 1.00 itself. PetDag is the biggest local oil & gas company by market capitalisation,
9.1
8.6
0.50 commanding some 25% of the sector’s total market capitalisation. It is also Malaysia’s
8.1
De c -09 Ma y-10 Oct-10
0.00
biggest petroleum retailer after replacing Shell in 2002. Furthermore, the company is
Volume 1m (R.H.S ca le ) P e trona s Da g a ng a n Bhd the only pure oil & gas retailer that is listed on Bursa Malaysia. As at end-Sep 10, it
Source: Bloomberg operated 938 Petronas stations nationwide.

Financial tables

EBIT 804 1,034 1,202 1,322 1,470 Interest cover (x) 365.6 304.2 1,997.7 2,196.0 2,442.3
Tax (229) (288) (329) (362) (403)
Net profit 579 753 884 972 1,082
Adj. wt. shares (m) 993 993 993 993 993

Fixed assets 4,446 5,201 5,437 5,737 6,125 No. of petrol stations 936 966 996 1,026
Intangible assets 0 0 0 0 0 Capex (RMm) 371 500 500 500
Other long-term assets 487 576 670 769 872 Market share (%) 43.5% 44.0% 44.0% 44.0%
Total non-current assets 4,933 5,777 6,107 6,505 6,998 Sales volume (bn litres) 15.4 17.1 18.7 20.6
Stocks 971 1,067 1,252 1,454 1,687
Trade debtors 2,746 2,870 3,278 3,695 4,163
Trade creditors 3,315 3,390 3,757 4,132 4,554
NTA/share (RM) 5.33 6.13 6.48 7.17 7.98

(RM m, FYE Mar) 2009 2010 2011F 2012F 2013F 15.0
Pretax profit 810 1,046 1,220 1,342 1,492
Cash tax paid (200) (301) (329) (362) (403) 13.0
Others 0 68 256 257 259
12.0
Capex (500) (500) (500) (500) (500)
11.0
Others (65) (68) (75) (78) (81)
10.0
9.0

MALAYSIA
Proton Holdings Bhd RM4.84 @06/12/10
Steering a restructuring course Target: RM5.95
Autos
PROH MK / PROT.KL Loke Wei Wern +60 (3) 2084 9946 – weiwern.loke@cimb.com
• Maintain TRADING BUY. We are encouraged by management’s ongoing efforts to

restructure Proton. Apart from the recent management restructuring of Lotus and
the current push for its turnaround, Proton is also pursuing initiatives which could
address its overcapacity, i.e. a push for exports and a study on plant consolidation.
Proton’s improving financials are also encouraging. We maintain our TRADING
BUY call in view of the emergence of potential near-term catalysts such as 1)
ongoing restructuring of its internal operations, 2) more inroads into export markets,
and 3) renewed consolidation talks. We also retain our target price of RM5.95 as we
continue to value it at a 20% premium over its 5-year historical P/BV of 0.5x.
• Consolidation talks to dominate in 2011? Now that partnership talks with
Volkswagen AG (VW) have ended, discussions on consolidation of the local auto
players are likely to dominate in 2011. From Proton’s point of view, there are merits
in collaboration as Proton’s Achilles heel is the negative perception of the quality of
its cars. With Perodua on board, Proton might be able to leverage Toyota’s support
which should help it gain mileage in its export aspirations, among others.
• Tackling the overcapacity. Proton’s two manufacturing plants in Shah Alam,
Selangor and Tanjung Malim, Perak have a combined installed capacity of 380,000
units, which is only about half utilised currently. The Tanjung Malim plant alone has
a designed capacity of 1m cars p.a. We gather that feasibility studies on Proton’s
plant consolidation are ongoing. A decision on the plant consolidation could be
made as early as the beginning of 2011, in our opinion.
Financial summary
FYE Mar 2009 2010 2011F 2012F 2013F
Revenue (RM m) 6,518.8 8,226.9 9,001.6 9,531.6 10,012.7
EBITDA (RM m) 347.0 667.2 838.2 915.3 964.0
EBITDA margins (%) 5.3% 8.1% 9.3% 9.6% 9.6%
Net profit (RM m) (301.8) 218.9 360.6 398.5 426.0
EPS (sen) (55.0) 39.9 65.7 72.6 77.6
EPS growth (%) (263.5%) 172.5% 64.7% 10.5% 6.9%
Stock Information P/E (x) nm 12.1 7.4 6.7 6.2
Core EPS (sen) (4.3) 41.2 65.7 72.6 77.6
Market cap: RM2,658m/US$845m Core EPS growth (%) (154.4%) 1,064.4% 59.2% 10.5% 6.9%
12-m price range: RM5.00 Core P/E (x) nm 11.7 7.4 6.7 6.2
RM3.81 Gross DPS (sen) 5.0 20.0 10.0 10.0 10.0
No. of shrs (m): 549 P/BV (x) 0.5 0.5 0.5 0.4 0.4
Major shareholders (%): P/FCFE (x) (13.6) 3.7 (6.8) 6.8 6.0
- Khazanah Nasional Bhd 42.7 EV/EBITDA (x) 5.6 1.5 1.6 1.1 0.6
- Petroliam Nasional Bhd 7.9 CIMB/Consensus (x) 1.13 1.14 1.15

5.2 4.50 Founded in 1983, Proton Holdings is Malaysia’s first car manufacturer. It is
4.00
5.0
4.8
3.50 headquartered in Shah Alam, Selangor and has a manufacturing plant in Tanjung
4.6
3.00
2.50
Malim, Perak. Formerly the top player in Malaysia, Proton has lost ground over the
4.4
4.2
2.00
1.50
years due partly to tepid response to its products and keener competition, especially
4.0
3.8
1.00
0.50
from Perodua. However, it managed to claw back some market share recently
3.6
0.00
through the successful launches of the Persona, Saga and Exora. But it remains the
Volume 1m (R.H.S ca le ) P roton Holding s Bhd number two player with a market share of about 26% vs. 31% for Perodua.
Source: Bloomberg

Financial tables

EBIT (103) 235 380 432 456 Interest cover (x) (7.2) 19.5 51.2 64.7 75.8
Net interest & invt income 28 16 28 20 27 Effective tax rates (%) N/A 16.1 13.0 13.0 13.0
Tax 17 (42) (54) (60) (64)
Net profit (302) 219 361 399 426
Adj. wt. shares (m) 549 549 549 549 549

Fixed assets 2,827 2,633 3,253 3,238 3,197 Production capacity (units) 380,000 380,000 380,000 380,000
Intangible assets 461 593 593 593 593 Car sales (units) 156,653 170,885 178,005 186,577
Other long-term assets 407 407 403 398 393 Market share (%) 26.9% 27.0% 27.0% 27.8%
Cash and equivalents 914 1,652 1,308 1,657 2,061
Stocks 1,395 1,227 1,343 1,422 1,494
Trade debtors 890 920 1,007 1,066 1,120
Trade creditors 1,278 1,630 1,784 1,889 1,984
NTA/share (RM) 8.45 8.63 9.21 9.86 10.56

(RM m, FYE Mar) 2009 2010 2011F 2012F 2013F
Pretax profit (319) 261 414 458 490 43.0
38.0
Cash tax paid 40 17 (42) (54) (60) 33.0
Others 365 (30) (684) 33 24

28.0
Cash flow from operations 302 1,290 98 886 932
Capex (500) (500) (500) (500) (500) 23.0

Others (142) 108 0 0 0
13.0
Debt raised/(repaid) 117 (186) (17) (16) (14) 8.0
3.0
Dividends paid (21) 0 (82) (41) (41) Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10
Change in cash (312) 738 (344) 349 404
Change in net cash/(debt) (429) 925 (327) 365 418
Ending net cash/(debt) 553 1,478 1,151 1,516 1,933

MALAYSIA
Public Bank Bhd RM12.80 @07/12/10
Banking on its tradition of consistency Target: RM16.10
Banks
PBK MK / PUBM.KL Winson Ng Gia Yann CFA +60(3) 2084 9686 – winson.ng@cimb.com
• Reaffirm OUTPERFORM. Public remains an OUTPERFORM and our top pick

among the big-cap Malaysian banks. Potential share price triggers include (1) a
potential improvement in its loan growth, (2) increased contributions from Greater
China, and (3) stronger-than-expected non-interest income. We retain our earnings
forecasts and target price of RM16.10, pegged to an unchanged 10% premium over
the DDM value. Also intact are the key DDM parameters, including a cost of equity
of 11.2% and dividend growth rates of 10.2% in the interim growth phase and 5% in
the long-term growth phase.
• Healthy earnings growth. Although net earnings growth is expected to slow down
from a projected 20.3% for FY10, the pace will remain healthy at 16.5% in FY11.
This will be driven by the 14.2% rise in the topline, emanating from a (1) 15.9%
increase in net interest income, on the back of mid-teens loan growth, and (2) 11%
expansion of non-interest income, partly from the wealth management and
bancassurance businesses.
• Projecting loan growth in the mid-teens. The group will continue its tradition of
expanding loans at a robust pace. We estimate loan growth of 15.5% for FY11, led
by an 18% rise in residential mortgages. Auto and general commerce loans are
projected to expand 10-11%.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Total income (RM m) 5,739.2 6,124.9 6,998.6 7,992.8 8,999.7
Net profit (RM m) 2,581.2 2,517.3 3,027.3 3,525.5 4,150.3
EPS (sen) 70.1 69.3 85.1 99.8 117.5
RM10.76
EPS growth (%) 20% (1%) 23% 17% 18%
P/E (x) 18.2 18.5 15.0 12.8 10.9
Gross DPS (sen) 87.0 77.2 62.4 73.2 86.2
- Tan Sri Dr. Teh Hong Piow 24.1 ROE (%) 27.3% 24.5% 25.2% 25.1% 25.4%
- Valuecap 3.0 CIMB/Consensus (x) 1.00 1.04 1.08

13.2 1.20
Public Bank is Malaysia’s third largest banking group with assets totalling RM220.6bn.
12.7 1.00 As an anchor bank, it acquired Hock Hua Bank, Advance Finance and Sime Merchant
12.2 0.80
Bank in 2000-01. The bank also took Public Finance private in 2003 and merged it
11.7 0.60
11.2 0.40
with its banking business in Sep 04. The group’s major operations include commercial
10.7 0.20 banking, Islamic banking, investment banking and management of unit trust funds. As
10.2
0.00
part of its overseas expansion, Public acquired HK-based Asia Commercial Bank in
Volume 10m (R.H.S ca le ) P ublic Ba nk Bhd 2006 for HK$4.5bn. It also forged a strategic alliance with ING Asia in 2007 to
Source: Bloomberg distribute the latter’s bancassurance products.

Financial tables

Non-interest income 1,610 1,875 2,037 2,254 2,454 Pre-provision profit growth (%) 15.5 1.7 18.4 17.8 15.5
Other income 402 214 216 239 262 Pretax growth (%) 12.5 (1.7) 25.2 17.7 17.6
Others (33) (15) (6) (41) (8)
Pretax profit 3,379 3,321 4,159 4,894 5,756
Tax (757) (770) (1,008) (1,235) (1,450)
Net profit 2,581 2,517 3,027 3,525 4,150
Adj. wt. shares (m) 3,680 3,635 3,558 3,532 3,532

Fixed assets 1,303 1,341 1,394 1,439 1,483 Loan loss reserve (%) 159.7 172.4 175.5 181.8 185.0
Total assets 196,163 217,136 241,554 269,970 301,823
BV/share (RM) 2.59 3.08 3.68 4.28 4.95
4.60 17.0
16.0
4.10 15.0
14.0
3.60 13.0
12.0
3.10
11.0
10.0
2.60
Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 9.0

MALAYSIA
NEUTRAL Maintained
Puncak Niaga Holdings Bhd RM2.54 @06/12/10
Waiting for the takeover lifeboat Target: RM2.89
Water Treatment & Services
PNH MK / PNHB.KL Sharizan Rosely +60 (3) 2084 9864 – sharizan.rosely@cimb.com
• Maintain NEUTRAL. The takeover of water assets in Selangor made little progress
in 2010, which was a disappointment. As the takeover is likely to be protracted, we
remain NEUTRAL on the stock at this juncture but would relook at our call if the
takeover progress picks up. Also intact is our target price of RM2.89, which imputes
a 40% discount to its DCF value to reflect the risks of further delays. Puncak’s
effective takeover price is backed by Splash’s RM4.54/share offer in Mar 10.
• Looking to 2011 for progress on takeover. Although the takeover of water assets
in Selangor has made little headway, we expect it to advance in 2011, with the push
factor being the risk that the concessionaires (PNSB, Syabas, Abass and Splash)
will default on their bond redemptions in 2011. Splash’s bonds, for example, are
due in Jul 2011. A successful takeover of the concessionaires would resolve the
payment issues, which stem from the absence of a water tariff increase for Puncak
Niaga in 2009.
• Takeover likely to remain long-drawn. Unless (i) the payment issues are dealt
with, (ii) consideration is given to Syabas’s outstanding compensation, and (iii) the
state government pushes for a resolution to all the issues, the takeover is likely to
be protracted.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 1,476.1 1,885.4 2,214.8 2,342.1 3,095.9
EBITDA (RM m) 649.6 1,072.3 1,354.4 1,449.5 2,169.4
EBITDA margins (%) 44.0% 56.9% 61.2% 61.9% 70.1%
Net profit (RM m) 24.9 142.6 193.2 248.8 330.6
EPS (sen) 6.1 34.7 47.0 60.5 80.4
EPS growth (%) (81.4%) 472.7% 35.5% 28.8% 32.9%
Stock Information
P/E (x) 41.9 7.3 5.4 4.2 3.2
RM2.38 P/BV (x) 0.7 0.6 0.6 0.5 0.4
No. of shrs (m): 411 Net gearing (%) 9.5% 39.9% 40.4% 35.9% N/A
Est. free float (%): 61.1 Net cash per share (RM) N/A N/A N/A N/A 1.26
Conv. secs (m): None P/FCFE (x) (4.5) 1.7 3.3 1.7 0.8
- Central Plus (M) Sdn Bhd 30.0 % change in EPS estimates - - -

3.2
4.50
4.00
Puncak Niaga is the largest water supply concessionaire in Malaysia, holding two
3.0
3.50 concessions from the Selangor state government. The first, awarded in 1994, allows
3.00
2.8 2.50 Puncak to operate water treatment plants formerly under the management of
2.6
2.00
1.50
Perbadanan Urus Air Selangor (PUAS). The second concession, awarded in 1995,
2.4
1.00
0.50
allows Puncak to operate a new water treatment plant at Bukit Badoh. Both
2.2
0.00
concessions will expire in 2020. 70%-owned Syabas holds a 30-year concession and
Volume 1m (R.H.S c a le ) P unc a k Nia g a Holding s Bhd is the biggest water supply privatisation in Malaysia.
Source: Bloomberg

Financial tables

EBITDA 650 1,072 1,354 1,449 2,169 Pretax margins (%) 3.9 16.6 14.1 17.9 22.6
Net interest & invt income (160) (250) (26) 43 (49) Effective tax rates (%) 62.5 27.1 26.0 26.0 26.0
Tax (36) (85) (81) (109) (182)
Net profit 25 143 193 249 331
Adj. wt. shares (m) 411 411 411 411 411

Fixed assets 1,164 2,762 3,059 3,555 3,450 Utilisation rate (%) 90.0% 90.0% 90.0% 90.0%
Intangible assets 0 0 0 0 0 Tafiff hike (%) 37.0% 0.0% 0.0% 25.0%
Other long-term assets 1,232 1,232 1,232 1,232 1,232 Tariff rate (RM per cubic metre) 2 2 3 4
Cash and equivalents 1,299 2,397 2,694 3,278 4,637
Stocks 29 42 44 47 62
Trade debtors 243 243 243 243 243
Trade creditors 869 1,257 1,329 1,405 1,858
NTA/share (RM) 3.64 4.08 4.49 5.04 5.78

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
44.0
Pretax profit 57 313 312 418 701
Depreciation & non–cash adj. 433 509 1,016 1,074 1,420 39.0

34.0
Cash tax paid (188) 287 (162) 14 154
Others 0 0 0 0 0 29.0
Cash flow from operations 344 1,470 1,233 1,576 2,696

24.0
Capex (563) (858) (912) (970) (1,315)
Others 0 0 0 0 0
14.0
Cash flow from investing (563) (858) (912) (970) (1,315)
4.0
Cash interest & others 230 (1,189) (400) (598) 0
Cash flow from financing 205 (1,214) (424) (621) (22)
Change in cash (14) (601) (103) (14) 1,359
Change in net cash/(debt) (3) (592) (94) (7) 1,366

MALAYSIA
NEUTRAL Maintained
QSR Brands RM5.63 @07/12/10
No birdie for suitors Target: RM6.50
Food & Beverages
QSR MK / QSRB.KL Norziana Mohd Inon +60(3) 2084 9645 – norziana.inon@cimb.com
• Maintain NEUTRAL. We retain our EPS forecasts and target price of RM6.50,
pegged to an unchanged 16x forward P/E, which factors in a 10% discount to the
average valuation of bigger F&B producers. QSR remains a NEUTRAL after our
recent downgrade which was prompted by the limited share price upside after an
earlier rise on the expectation of a race for control. Our top F&B pick is CI Holdings.
• Not for sale. The statements issued by Kulim and QSR after they turned down the
takeover bids by Carlyle and Idaman Saga as well as the news that Johor Corp has
engaged CIMB to restructure its debt suggest that QSR and KFC Holdings will
remain within Johor Corp, at least for now. We are not disappointed that the two
offers were rejected. Johor Corp has done a commendable job growing the Pizza
Hut and KFC franchises at home and abroad since the emergence of Kulim as the
controlling shareholder of QSR in Jun 06.
• Spicy India. We believe that the main factor that influenced the decision to keep
both companies is the growth opportunities in India. KFC India is now operating
three outlets, which are raking in encouraging monthly sales of RM450,000/outlet
vs. RM250,000/outlet in Malaysia. This may increase KFC India’s chances of taking
over five profitable outlets which are now under Yum!.
• Record average ticket prices. Operationally, QSR and KFCH are at their
strongest. As at end-Sep, the same-store sales growth was encouraging at 5% for
Pizza Hut and 3% for KFC. There were no selling price revisions in 9M10. Also,
average ticket prices remained at all-time highs of RM40 for Pizza Hut and RM20
for KFC for the second consecutive quarter in 2Q10.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 532.8 2,760.3 2,830.9 2,979.5 3,137.9
EBITDA (RM m) 90.0 354.0 400.7 436.1 466.6
EBITDA margins (%) 16.9% 12.8% 14.2% 14.6% 14.9%
Net profit (RM m) 85.3 90.9 110.1 125.1 133.2
EPS (sen) 29.8 31.8 38.5 43.7 46.5
EPS growth (%) 8.6% 6.6% 21.1% 13.5% 6.5%
P/E (x) 18.9 17.7 14.6 12.9 12.1
FD core EPS (sen) 26.0 27.7 33.6 38.1 40.6
Stock Information
FD core P/E (x) 21.6 20.3 16.8 14.8 13.9
RM3.17 P/BV (x) 3.5 3.5 3.5 3.5 3.5
No. of shrs (m): 290 Net gearing (%) 39.1% 40.1% 40.8% 40.8% 41.4%
Conv. secs (m): 40.9 EV/EBITDA (x) 14.7 3.7 3.3 3.0 2.9
- Kulim 57.9 CIMB/Consensus (x) 0.87 0.87 0.76

6.5
6.00 QSR is Malaysia’s biggest quick-service restaurant operator with three main brands
6.0
5.5
5.00 under its belt: Pizza Hut, KFC and Ayamas. The other brands are RasaMas and Life.
5.0
4.00
In Malaysia, the Pizza Hut chain is run by QSR while the KFC and Ayamas chains are
3.00
4.5
2.00
under 51.3%-owned KFC Holdings. The Pizza Hut and KFC brands are owned by
4.0
3.5 1.00 Yum!, which also owns the Long John Silver’s, Taco Bell and A&W brands. The
3.0
0.00
home-grown Ayamas, RasaMas and Life brands are owned by the QSR group. The
Volume 1m (R.H.S ca le ) QS R Bra nds group has a presence in Malaysia, Singapore, Brunei, Cambodia and India. QSR is
Source: Bloomberg 57.9% owned by Kulim, which is 54.3% held by Johor Corp.

Financial tables

Revenue 533 2,760 2,831 2,979 3,138 Revenue growth (%) 14.2 418.1 2.6 5.3 5.3
Operating expenses (443) (2,406) (2,430) (2,543) (2,671) EBITDA growth (%) 28.8 293.3 13.2 8.8 7.0
Tax (14) (72) (80) (84) (88)
Net profit 85 91 110 125 133
Adj. wt. shares (m) 286 286 286 286 286

Fixed assets 313 314 320 334 341 Consumer: EBITDA margins (%) 12.8% 14.2% 14.6% 14.9%
Intangible assets 0 0 0 0 0 Raw material price change (%) -2.4% 25.9% 4.7% 5.0%
Other long-term assets 558 558 558 559 560 No. of outlets 265 281 297 313
Total non-current assets 870 871 877 892 900 Same store sales growth (%) -5.0% 6.0% 6.0% 6.0%
Cash and equivalents 36 37 39 41 43 Average ticket price (RM) 36 40 40 40
Stocks 15 15 15 16 16
NTA/share (RM) 1.62 1.60 1.60 1.62 1.62

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 15.0
Pretax profit 98 230 254 274 287
14.0
Cash tax paid (23) (76) (80) (84) (88) 12.0

Others 25 (133) (151) (178) (199)
11.0
Capex (51) (50) (50) (50) (49) 10.0
9.0
Others (91) (90) (90) (94) (98)

6.0

MALAYSIA
RGB International Bhd RM0.06 @07/12/10
Bad dream coming to an end? Target: RM0.06
Gaming
RGB MK / RGBI.KL Ivy Ng Lee Fang CFA +60(3) 2084 9697 – ivy.ng@cimb.com
• Still an UNDERPERFORM. RGB remains an UNDERPERFORM in our books, with

the key de-rating catalyst being slow turnaround efforts. Although RGB has been
showing qoq improvements, its still-struggling key TSM division remains our main
concern. We retain our end-CY11 target price of RM0.061 based on 8x P/E or an
unchanged 50% discount to its larger peers.
• Starting to turn around? RGB’s three straight quarters of narrowing losses could
be an early sign of a turnaround after two disastrous years of regulatory changes,
outlet closures, slow machine mobilisations and weak sales. Although the worst
may be over, we remain cautious as the TSM division is still grappling with idle
machines and underperforming sites. Meanwhile, machine sales could see some
boost as Galaxy Macau is slated to open in early 2011 and both the Singapore IRs
still have room for more slot machines. Orders from the Philippines are also
expected to pick up after the completion of the May 10 election.
• Back to basics. RGB remains in active negotiations to dispose of a 40% equity
interest in its 60%-owned Chateau de Bavet. The stake sale is expected to be
completed in late 2010 or early next year. Given the uninspiring performance of its
Bavet casino so far, the disposal should help reduce losses and shift RGB’s focus
back to its core strengths, i.e. slot machines and the Indochina market.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 227.8 170.2 159.1 238.6 266.4
EBITDA (RM m) 73.7 20.3 45.2 93.2 102.3
EBITDA margins (%) 32.3% 11.9% 28.4% 39.0% 38.4%
Pretax profit (RM m) (3.3) (60.5) (46.2) 5.8 10.0
Net profit (RM m) (2.9) (57.8) (39.0) 4.6 7.9
EPS (sen) (0.3) (5.6) (3.7) 0.4 0.8
EPS growth (%) (107.3%) (1,585.3%) 32.6% 111.9% 70.9%
P/E (x) nm nm nm 13.5 7.9
Stock Information
Core EPS (sen) 1.0 (3.2) (3.7) 0.4 0.8
Market cap: RM69m/US$22m Core EPS growth (%) (78.7%) (427.7%) (17.7%) 111.9% 70.9%
12-m price range: RM0.18 Core P/E (x) 6.2 nm nm 13.5 7.9
RM0.06 Gross DPS (sen) 0.0 0.0 0.0 0.0 0.0
No. of shrs (m): 1,151 P/BV (x) 0.3 0.4 0.8 0.7 0.7
Est. free float (%): 25.0 ROE (%) (1.6%) (35.8%) (34.4%) 5.5% 8.7%
Major shareholders (%): P/FCFE (x) (2.7) (1.1) (12.6) 1.3 1.0
- Datuk Chuah Kim Seah 29.4 EV/EBITDA (x) 2.3 9.0 5.3 2.1 1.4
- Gerak Juara Sdn Bhd 14.1 % change in EPS estimates - - -
- Chuah Kim Chiew 2.3 CIMB/Consensus (x) 1.01 1.11 0.95

0.2
0.2 1.20
Owned by the Chuah family of Penang, RGB International, previously Dreamgate, is
0.2
0.1
1.00 an agent and distributor of gaming equipment to all Asia ex-Japan countries. Besides
0.1
0.1
0.80
representing many renowned global gaming machine manufacturers, this company
0.60
0.1
0.1 0.40
has also started selling its in-house RGBGames and Elaut gaming machines. Its key
0.0
0.0
0.20 earnings contributor is its revenue sharing operations with casino operators under its
0.0
0.00
technical support and management division (TSM). Despite only opening its maiden
Volume 10m (R.H.S c a le ) RGB Inte rna tiona l Bhd casino venture, Chateau De Bavet in Aug-09, RGB is currently exploring options to
Source: Bloomberg divest a stake in the venture to focus on its core strengths.

Financial tables

Revenue 228 170 159 239 266 Revenue growth (%) (17.6) (25.3) (6.5) 49.9 11.7
EBITDA 74 20 45 93 102 Pretax margins (%) (1.4) (35.6) (29.0) 2.4 3.7
Depreciation & amortisation (56) (48) (82) (76) (82) Net profit margins (%) (1.3) (34.0) (24.5) 1.9 3.0
EBIT 17 (28) (37) 17 21 Interest cover (x) 1.8 (3.0) (3.4) 1.4 1.6
Net interest & invt income (9) (8) (10) (12) (11) Effective tax rates (%) N/A N/A N/A 2.5 2.5
Associates’ contribution 0 0 1 1 1 Net dividend payout (%) N/A N/A N/A 0.0 0.0
Pretax profit (3) (61) (46) 6 10 Creditors turnover (days) 115.4 175.3 229.2 184.6 210.0
Tax 0 0 1 0 0
Minority interests 1 3 6 (1) (2)
Net profit (3) (58) (39) 5 8
Adj. wt. shares (m) 872 1,042 1,042 1,042 1,042
Unadj. year-end shares (m) 872 1,042 1,042 1,042 1,042

Fixed assets 238 283 275 243 207 Number of machines sold 1,213 750 1,030 1,150
Intangible assets 0 0 0 0 0 Average price per machine (RM) 73,337 73,337 74,804 76,300
Other long-term assets 9 9 9 10 11 No. of revenue sharing machines 5,348 6,160 7,275 7,702
Total non-current assets 247 292 284 253 218 Avg net win/machine/day (RM) 35 39 50 53
Stocks 12 16 15 22 25
NTA/share (RM) 0.20 0.14 0.08 0.08 0.09

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit (3) (61) (46) 6 10 43.0

23.0
Cash tax paid (1) 0 0 1 0
Others 13 61 (48) 26 22 13.0
Cash flow from operations 70 90 (12) 109 113 3.0

Capex (99) (136) (40) (50) (53)
-7.0
-17.0
Others 0 0 0 0 0
Cash flow from investing (93) (136) (40) (50) (53) -27.0
Debt raised/(repaid) 12 (5) 57 1 10 -37.0

-47.0
Dividends paid (4) 0 0 0 0 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10
Cash interest & others 3 16 (10) (12) (11)
Cash flow from financing 15 36 47 (12) (1)
Change in cash (7) (9) (5) 47 60

MALAYSIA
RHB Capital Bhd RM8.59 @07/12/10
Surfing on brisk loan growth Target: RM10.50
Banks
RHBC MK / RHBC.KL Winson Ng Gia Yann CFA +60(3) 2084 9686 – winson.ng@cimb.com
• Reaffirm OUTPERFORM. RHB Capital remains an OUTPERFORM and our top

pick among the Malaysian banks in light of the potential re-rating catalysts of (1)
bright earnings outlook, (2) group revamp, (3) vibrant investment banking income,
(4) brisk loan growth, (5) stronger overseas growth prospects, and (6) attractive
valuations. We retain our EPS forecasts and target basis of 10% premium over the
DDM value (cost of equity of 12.9% and dividend growth rates of 16.2% for the
interim growth phase and 5% for the long-term growth phase). This leads to an
unchanged target price of RM10.50.
• Positive outlook. We are forecasting 16.9% growth in the group’s FY11 net profit
to RM1.7bn, which is expected to be driven by 11.3% expansion at the topline
coming from a 10.1% increase in net interest income and 13.8% rise in non-interest
income. The credit charge-off rate is also projected to improve from 80bp in FY10 to
75bp in FY11, thanks to stable asset quality.
• Fastest loan growth. Among the local banks, RHB Capital recorded the fastest
loan growth of 19.6% yoy in Sep 10 vs. 11.9% for the industry. This was fuelled by
the 229% yoy jump in loans classified as “others”, which are believed to be mostly
extended to government agencies, and double-digit rates for residential mortgages,
auto loans and construction loans. Management is targeting strong loan growth of
15% for FY11-12, higher than our forecasts of 11.3% for FY11 and 10% for FY12.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Non-interest income (RM m) 841.3 946.4 1,188.9 1,372.9 1,427.7
Total income (RM m) 3,445.1 3,665.0 4,243.8 4,722.3 5,113.8
Net profit (RM m) 1,048.7 1,201.4 1,455.2 1,701.0 1,956.5
EPS (sen) 48.7 55.8 67.6 79.0 90.9
RM5.17
EPS growth (%) 36% 15% 21% 17% 15%
P/E (x) 17.6 15.4 12.7 10.9 9.5
Gross DPS (sen) 19.6 22.5 27.0 31.6 36.3
- EPF 54.0 ROE (%) 14.1% 14.5% 15.8% 16.6% 16.9%
- Abu Dhabi Commercial 25.0 % change in EPS estimates - - -
- Amanah Saham Bumiputera 2.0 CIMB/Consensus (x) 1.05 1.09 1.10

8.9
1.00
0.90
RHB Capital is the fourth largest banking group in Malaysia with total assets of
8.4
7.9
0.80
0.70
RM127.1bn. RHB Bank started out as D&C Bank and merged with Kwong Yik Bank in
7.4 0.60
0.50
1997, Sime Bank in 1999 and Utama Bank in 2002. In 1H07, EPF acquired 82% of
6.9
6.4
0.40
0.30
RHB Capital via its full control of RHB and a general offer. Subsequently, the group
5.9
5.4
0.20
0.10
embarked on corporate exercises to acquire the remaining 30% stake in RHB Bank on
4.9
0.00
12 Jul 07 and refinance the INCPS in 1Q08. EPF sold a 25% stake in RHB Capital to
Volume 10m (R.H.S ca le ) RHB Ca pita l Bhd Abu Dhabi Commercial Bank on 8 May 08. In Oct 09, the group announced the
Source: Bloomberg acquisition of an 80% stake in PT Bank Mestika, which will be completed in 1Q11.

Financial tables

Non-interest income 841 946 1,189 1,373 1,428 Pre-provision profit growth (%) 2.6 8.6 22.3 14.6 9.5
Other income 387 305 318 335 356 Pretax growth (%) 14.1 8.2 26.2 17.4 14.9
Others (10) 18 (30) (32) (18)
Pretax profit 1,422 1,539 1,942 2,280 2,621
Tax (373) (330) (476) (570) (655)
Net profit 1,049 1,201 1,455 1,701 1,956
Adj. wt. shares (m) 2,154 2,154 2,154 2,154 2,154

Marketable securities 11,539 9,953 10,427 9,459 9,501 Deposit growth (%) (2.4) 14.7 7.3 7.2 7.1
Total assets 104,533 114,951 123,615 132,322 141,695
BV/share (RM) 3.63 4.04 4.49 5.05 5.69

13.0
1.90
12.0
1.70 11.0
10.0
1.50
9.0
1.30 8.0
1.10 7.0
6.0
0.90
5.0
0.70 4.0

MALAYSIA
SapuraCrest Petroleum RM2.82 @07/12/10
Pumped up by a huge order book Target: RM3.30
SCRES MK / SCRS.KL Norziana Mohd Inon +60(3) 2084 9645 – norziana.inon@cimb.com
• Maintain OUTPERFORM. We maintain our forecasts but raise our target price from
RM3.14 to RM3.30, pegged to a revised target market P/E of 14.5x (13.8x
previously). SapuraCrest remains an OUTPERFORM and our top pick in the oil &
gas sector. The potential re-rating catalysts are 1) active order book replenishment,
2) success in new markets (i.e. Australia, Japan and the Middle East), and 3) a
growing fleet of strategic assets (i.e. pipelay barges and drilling rigs).
• Fleet expansion. Two new pipelay barges, namely the LTS3000 and the Quippo
Prakash, joined the Sapura3000 this year. The barges are held through JVs with
Indian partners. Through the partnerships, SapuraCrest will have access to the
sought-after barges without having to incur an otherwise substantial capital outlay.
The two new barges are suitable for shallow-water works while the Sapura3000 is a
deepwater barge. The Sapura3000 will be used to execute the recently-announced
US$160m Montara decommissioning project in Australia. We believe the ownership
of the barge tilted the odds in SapuraCrest’s favour.
• RM13.6bn order book. To date, SapuraCrest has clinched three contracts valued
at RM935m inclusive of the Montara contract. The estimated order book value
stands at RM13.6bn, of which 84% comes from the installation of pipelines and
facilities activities. The jobs in hand will keep the company busy for the next four
years. Although management concedes that the flow has contracts has slowed
significantly this year, it foresees an increase in deepwater activities in Asia
(Malaysia, Indonesia, India and China) and Australia in the next three years.
Financial summary
FYE Jan 2009 2010 2011F 2012F 2013F
Revenue (RM m) 3,483.8 3,257.3 4,245.3 4,661.2 5,117.7
EBITDA (RM m) 463.4 339.0 589.6 649.2 678.6
EBITDA margins (%) 13.3% 10.4% 13.9% 13.9% 13.3%
EPS (sen) 9.0 13.4 16.8 21.4 22.8
Market cap: RM3,600m/US$1,148m EPS growth (%) 37.1% 47.9% 25.4% 27.6% 6.7%
RM1.89 Gross DPS (sen) 5.0 7.0 8.0 9.0 10.0
No. of shrs (m): 1,277 P/BV (x) 3.8 4.2 4.0 3.7 3.7
- Sapura Technology 40.1 EV/EBITDA (x) 9.3 13.0 7.4 6.8 6.5
- Seadrill 23.6 % change in EPS estimates - - -

2.9
0.80
SapuraCrest came into being in Jan 03 when Sapura Telecommunications bought a
0.70
2.7 0.60 38.56% stake in Crest Petroleum from Renong for RM105.2m. It was transferred to
2.5 0.50
0.40
the Main Board in Feb 06. Today, SapuraCrest is the leader in drilling and installation
2.3
2.1
0.30 of pipelines and facilities, which are the company’s two biggest income generators
0.20
1.9 0.10
with more than 80% contribution. Other businesses are marine services and
1.7
0.00
operations & maintenance. SapuraCrest owns a fleet of assets, which include drilling
Volume 10m (R.H.S ca le ) S a pura Cre s t P e trole um rigs, barges and support vessels. The rigs are jointly owned with Seadrill, which is
Source: Bloomberg also a substantial shareholder.

Financial tables

(RM m, FYE Jan) 2009 2010 2011F 2012F 2013F (FYE Jan) 2009 2010 2011F 2012F 2013F
Depreciation & amortisation (81) 0 (90) (94) (99) Net profit margins (%) 3.3 5.2 5.0 5.8 5.7
Tax (31) (31) (83) (99) (114)
Net profit 115 170 213 272 291
Adj. wt. shares (m) 1,269 1,272 1,272 1,272 1,273

(RM m, end Jan) 2009 2010 2011F 2012F 2013F (FYE Jan) 2010 2011F 2012F 2013F
Fixed assets 904 949 1,014 1,061 1,097 Overseas rev contribution (%) 30.0% 40.0% 50.0% 50.0%
Intangible assets 150 140 122 140 141 Downstream contribution to rev (%) 1.0% 1.0% 1.0% 1.0%
Other long-term assets 118 108 109 110 111 Upstream contribution to rev (%) 99.0% 99.0% 99.0% 99.0%
Total non-current assets 1,171 1,196 1,245 1,311 1,349 Order book (RM m) 15,000 13,500 12,000 10,500
Cash and equivalents 594 653 719 791 871 Overall Gross Margin (%) 10.4% 13.9% 13.9% 13.3%
Stocks 50 50 50 50 50 Charter rate (US$ per horse power) 1.80 2.00 2.00 2.00
Trade debtors 1,760 1,778 1,796 1,814 1,832 Number of vessels 3 4 4 4
Other current assets 0 0 0 0 0 Vessel utilisation rate (%) 90.0% 90.0% 90.0% 90.0%
Total current assets 2,404 2,481 2,564 2,654 2,753 O&G contribution to order book (%) 100.0% 100.0% 100.0% 100.0%
Trade creditors 1,270 1,283 1,296 1,309 1,322
NTA/share (RM) 0.63 0.57 0.61 0.64 0.65

(RM m, FYE Jan) 2009 2010 2011F 2012F 2013F 22.0
Pretax profit 280 364 458 550 602
20.0
Working capital changes 72 (5) (5) (5) (5) 18.0
Cash tax paid (31) (69) (83) (99) (114) 16.0

Others 164 (74) (179) (193) (182)
14.0
Capex (200) (80) (300) (300) (79) 12.0
10.0
Others 62 0 0 0 0

4.0
Cash interest & others (26) (23) 143 89 (169)
Cash flow from financing (183) (73) 89 30 (236)

MALAYSIA
Sime Darby Bhd RM8.74 @07/12/10
Making a fresh start Target: RM10.78
Conglomerate
SIME MK / SIME.KL Ivy Ng Lee Fang CFA +60(3) 2084 9697 – ivy.ng@cimb.com
• Maintain TRADING BUY. We continue to like Sime Darby for its attractive
valuations, its new management’s restructuring efforts and the potential turnaround
of its energy and utilities (E&U) division. Its CY12 P/E of 14.5x is below the ratings
of other big-cap plantation plays in Malaysia. There is earnings upside if the group
succeeds in selling some of its non-core assets, enhancing the value of its property
landbank and turning around its loss-making E&U unit. Our EPS forecasts are
unchanged but we raise our SOP-based target price from RM9.84 to RM10.78 as
we apply a higher plantation P/E multiple of 17x (prev. 16x) and remove the 5%
SOP discount given management’s restructuring efforts. Potential share price
triggers include rising CPO price and better-than-expected earnings.
• Better earnings prospects. We project an 18% rise in Sime’s FY11 net profit due
to higher earnings contribution from all major business segments and lower losses
from its oil and gas division.
• Sime’s KPIs below estimates. Sime Darby’s FY11 KPI targets include a net profit
of RM2.5bn and an ROE of 11.5%. The net profit target is 15% below our forecast
due to lower sales estimates for the non-plantation divisions. We suspect that Sime
is choosing to err on the conservative side given the uncertain external markets.
The disappointing KPI target is offset by the group’s plans to unlock the value of its
property landbank and its expectation of a narrowing of oil & gas losses if it secures
some local projects soon.
Financial summary
FYE Jun 2009 2010 2011F 2012F 2013F
Revenue (RM m) 31,013.7 32,951.6 35,659.2 37,585.9 39,413.9
EBITDA (RM m) 3,901.0 2,805.0 5,384.2 6,245.4 6,705.7
EBITDA margins (%) 12.6% 8.5% 15.1% 16.6% 17.0%
Net profit (RM m) 2,280.1 726.8 2,943.2 3,479.1 3,719.0
EPS (sen) 37.9 12.1 49.0 57.9 61.9
EPS growth (%) (35.1%) (68.1%) 305.0% 18.2% 6.9%
P/E (x) 23.0 72.3 17.8 15.1 14.1
Core EPS growth (%) (34.8%) 27.1% 1.6% 18.2% 6.9%
No. of shrs (m): 6,009 ROE (%) 10.6% 3.5% 13.5% 14.4% 14.3%
Conv. secs (m): None P/FCFE (x) 1,346.7 18.9 20.3 30.3 23.7
- Permodalan Nasional 53.0 % change in EPS estimates - - -

9.6
4.00
Sime Darby, Malaysia’s leading multinational conglomerate, is one of the largest
9.1 3.50
3.00
conglomerates in Southeast Asia. It was founded in 1910 and listed on the Main
8.6
2.50 Board of Bursa Malaysia in 1980. In 2007, Sime was restructured through a landmark
2.00
8.1
1.50 merger with Golden Hope and Kumpulan Guthrie. Today, it is the world’s largest-listed
7.6 1.00
0.50
oil palm player by planted area and the largest listed Malaysian property developer by
7.1
0.00
landbank. It retains three other core businesses, i.e. motor, heavy equipment and
Volume 10m (R.H.S ca le ) S ime Da rby Bhd energy & utilities. It is also the fourth largest listed company on Bursa Malaysia,
Source: Bloomberg accounting for 8.7% of the FBM30 weighting as at 28 November 2010.

Financial tables

Tax (731) (887) (1,089) (1,287) (1,375)
Net profit 2,280 727 2,943 3,479 3,719
Adj. wt. shares (m) 6,009 6,009 6,009 6,009 6,009

Fixed assets 9,740 10,844 14,300 16,300 18,300 CPO price per tonne (RM) 2,350 2,650 2,780 2,780
Other long-term assets 7,756 8,175 7,728 7,448 7,664 Immature area (ha) 75,615 70,324 66,453 63,616
Total non-current assets 17,578 19,128 22,138 23,857 26,073 Land bank (ha) 633,607 633,607 633,607 633,608
Cash and equivalents 3,638 5,033 4,000 4,000 4,000 Mature area (ha) 484,420 491,605 497,884 503,517
Stocks 5,627 5,217 6,470 6,819 7,151 Planted area (ha) 560,035 561,929 564,338 567,132
Trade debtors 5,875 5,263 6,833 7,240 7,631
Trade creditors 6,421 6,919 7,188 7,440 7,765
Other current liabilities 592 1,468 592 592 592
Other long-term liabilities 814 819 1,172 1,370 1,459
Minority interests 621 681 860 1,043 1,239
NTA/share (RM) 3.55 3.39 3.86 4.15 4.46

(RM m, FYE Jun) 2009 2010 2011F 2012F 2013F
Pretax profit 3,072 1,742 4,187 4,949 5,290 27.0
Depreciation & non–cash adj. 750 893 1,100 1,200 1,300

25.0
Working capital changes (1,957) 802 (913) (504) (397)
Cash tax paid (731) (887) (757) (1,089) (1,287) 23.0
Others (391) 1,104 (906) (907) (888) 21.0

Cash flow from operations 742 3,654 2,711 3,650 4,019
19.0
Capex (2,123) (2,885) (2,000) (2,000) (2,000)
Others 736 0 0 0 0
15.0
Cash flow from investing (1,387) (2,885) (2,000) (2,000) (2,000)
Debt raised/(repaid) 778 2,182 1,973 178 313 13.0
11.0
Cash flow from financing (1,682) 607 404 (1,658) (1,662)
Change in cash (2,327) 1,377 1,115 (8) 357
Change in net cash/(debt) (3,105) (805) (857) (186) 44

MALAYSIA
SP Setia Bhd RM5.24 @07/12/10
Raring for the good fight Target: RM6.88
Property Devt & Invt
SPSB MK / SETI.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Still our top property pick. FY10/10 was an excellent year for SP Setia as
property sales amounted to RM2.31bn, beating its full-year target of RM2bn. SP
Setia is aiming to sell RM3bn worth of properties in FY11, a figure we believe is
achievable. The group may not be actively seeking M&A partners but is on an
aggressive landbanking and organic growth path. In view of its excellent execution
track record, it stands a good chance of keeping its position as the top developer in
terms of sales and profit. We maintain our OUTPERFORM recommendation and
target price of RM6.88, based on an unchanged 20% premium over its FD RNAV of
RM5.73. Potential re-rating catalysts include 1) continued robust sales, 2) newsflow
on landbanking and 3) strong earnings growth. SP Setia remains our top pick in the
property sector.
• KL EcoCity excitement. The RM6bn KL EcoCity project will be launched in
Jan/Feb 2011. The commercial component of the first phase is worth RM1bn while
the residential portion is worth RM800m. Pricing of both the office space and
residential properties is at least RM1,000 psf. Despite the high selling price,
indicative demand is very strong, being 2-3x the available supply. The attraction of
the project, besides its strategic location next to Bandar MidValley, is its excellent
accessibility. The LRT, KTM and MRT will all stop at the project.
Financial summary
FYE Oct 2009 2010 2011F 2012F 2013F
Revenue (RM m) 1,408.4 1,745.9 1,934.6 2,398.5 2,346.2
EBITDA (RM m) 194.6 293.6 367.5 468.6 477.8
EBITDA margins (%) 13.8% 16.8% 19.0% 19.5% 20.4%
Net profit (RM m) 171.2 251.8 283.3 364.3 374.4
EPS (sen) 16.8 24.8 27.9 35.8 36.8
EPS growth (%) (19.8%) 47.1% 12.5% 28.6% 2.8%
P/E (x) 31.2 21.1 18.8 14.6 14.2
Core EPS (sen) 16.3 21.1 27.9 35.8 36.8
Core EPS growth (%) (14.7%) 30.0% 31.8% 28.6% 2.8%
Stock Information
Core P/E (x) 32.1 24.8 18.8 14.6 14.2
RM3.53 Gross DPS (sen) 14.0 20.0 22.0 24.0 26.0
No. of shrs (m): 1,017 P/BV (x) 2.8 2.6 2.5 2.3 2.1
- PNB 31.0 EV/EBITDA (x) 31.9 21.2 16.3 12.6 12.3
- EPF 16.0 % change in EPS estimates N/A N/A N/A
- Tan Sri Liew Kee Sin 12.0 CIMB/Consensus (x) 1.15 1.29 N/A

0.90
0.80
Incorporated in Aug 1974 and listed on the Second Board in Apr 1993, SP Setia was
5.4
0.70 transferred to the Main Board in 1996. The group has four ongoing township projects
4.9 0.60
0.50 in Johor, one key one in the Klang Valley and another in Vietnam. It also has smaller
4.4 0.40
0.30
parcels of landbank for development in the Klang Valley, Penang, Sabah and
3.9 0.20
0.10
Vietnam. Recently, the group made inroads into China where it is developing 25 acres
3.4
0.00
in the growth corridor of XiaoShan, Hangzhou in the Zhejiang province. The group’s
Volume 10m (R.H.S ca le ) S P S e tia Bhd landbank totals some 3,500 acres. Its flagship project remains the 3,930-acre Bandar
Source: Bloomberg Setia Alam township in Klang/Shah Alam.

Financial tables

(RM m, FYE Oct) 2009 2010 2011F 2012F 2013F (FYE Oct) 2009 2010 2011F 2012F 2013F
Revenue 1,408 1,746 1,935 2,399 2,346 Revenue growth (%) 6.0 24.0 10.8 24.0 (2.2)
Depreciation & amortisation 0 (18) (17) (17) (18) Net profit margins (%) 12.2 14.4 14.6 15.2 16.0
Tax (60) (79) (94) (121) (125)
Net profit 171 252 283 364 374
Adj. wt. shares (m) 1,017 1,017 1,017 1,017 1,017

(RM m, end Oct) 2009 2010 2011F 2012F 2013F (FYE Oct) 2010 2011F 2012F 2013F
Fixed assets 146 108 97 84 72 Margin - Property development (%) 21.4% 20.9% 21.1% 22.0%
Intangible assets 0 0 0 0 0 Undeveloped landbank (acres) 3,678 3,478 3,278 3,078
Other long-term assets 1,469 1,564 1,632 1,704 1,780 Sales (RMm) 1,231 1,735 2,195 2,137
Total non-current assets 1,615 1,672 1,729 1,789 1,852 Company's targeted sales (RMm) 2,000 3,000
Cash and equivalents 886 1,059 1,375 1,534 1,705 Unrecognised billings (RMm) 1,780 2,000 2,200 2,300
Stocks 27 24 43 54 52
Trade debtors 437 669 499 619 606
Other current assets 987 963 946 1,005 1,050
NTA/share (RM) 2.00 2.15 2.27 2.44 2.62

(RM m, FYE Oct) 2009 2010 2011F 2012F 2013F 3.00
Pretax profit 231 331 378 486 499
2.80
Working capital changes (142) (127) 160 (66) (51) 2.60
Cash tax paid (60) (73) (79) (112) (124) 2.40
Others 2 2 2 2 2
2.20
Capex (65) 19 (5) (5) (5) 2.00
1.80
Others (8) 38 0 0 0

1.20
Change in cash 294 172 316 159 171

MALAYSIA
Star Publications Bhd RM3.39 @06/12/10
Still a dividend play Target: RM4.52
Newspaper
STAR MK / STAR.KL Sharizan Rosely +60 (3) 2084 9864 – sharizan.rosely@cimb.com
• Maintain OUTPERFORM. Star Publications remains the key beneficiary of the

continued recovery of English newspaper adex. We maintain our OUTPERFORM
call but raise our target price from RM4.31 to RM4.52 as we apply our revised CY12
target market P/E of 14.5x (13.8x previously) to the stock. Potential re-rating
catalysts include better-than-expected quarterly performances and advertising
volume. Star remains one of our top picks for the media sector.
• Bright sparks for 2011. Newspaper adex chalked up 15% yoy growth in Jan-Sep
10, driven by 18% growth in the Chinese segment and 15% in the English segment.
Growth was only 13% for the Malay segment. Ad volume momentum continues to
be encouraging and should spill over into 2011. This trend is positive for Star which
dominates the English segment with 70% share of English newspaper adex.
• Margin and dividend attraction. Our FY10-12 forecasts factor in a rise in EBITDA
margins, backed by the low average newsprint cost of US$650-700/tonne which is
good for another 12 months. Our FY11-12 DPS forecasts of 21 sen, which do not
factor in a repeat of the recent 53 sen bumper special dividend, translate into an
attractive dividend yield of 6%, which is the highest in the media sector.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 831.0 974.4 1,189.9 1,284.1 1,337.3
EBITDA (RM m) 223.7 232.3 305.6 337.5 365.7
EBITDA margins (%) 26.9% 23.8% 25.7% 26.3% 27.3%
Net profit (RM m) 138.7 144.6 184.3 193.5 230.3
EPS (sen) 18.8 19.6 25.0 26.2 31.2
EPS growth (%) (13.0%) 4.2% 27.5% 5.0% 19.0%
P/E (x) 18.0 17.3 13.6 12.9 10.9
Core EPS (sen) 22.1 19.6 25.0 26.2 31.2
Stock Information
Core EPS growth (%) 2.3% (11.3%) 27.5% 5.0% 19.0%
No. of shrs (m): 739 ROE (%) 11.2% 11.4% 15.8% 17.6% 19.4%
- Amanah Raya Nominees 7.3 CIMB/Consensus (x) 1.04 1.02 1.09

4.3
Star Publications publishes The Star, Malaysia’s largest circulating English daily with
5.00
4.1
a readership of over 1m. Apart from publishing various magazines and publications, it
3.9 4.00
3.7 3.00
operates two radio stations. The Star (English) online newspaper was the first in
3.5
2.00 Malaysia to establish its presence on the Internet and is recognised as the most
3.3
3.1
1.00 widely read in Malaysia. In 2008, Star acquired a stake in Cityneon for exposure to
2.9
0.00
the meetings, incentives, conventions and exhibitions (MICE) sector in Asia and the
Volume 1m (R.H.Scale) Star Publications Bhd Middle East. The Star is the single largest source of adex in the country and extended
Source: Bloomberg its coverage to East Malaysia in late 2009.

Financial tables

Revenue 831 974 1,190 1,284 1,337 Revenue growth (%) 6.6 17.3 22.1 7.9 4.1
Tax (63) (48) (76) (82) (91)
Net profit 139 145 184 193 230
Adj. wt. shares (m) 739 739 739 739 739

Fixed assets 763 759 753 748 741 Adex revenue growth (%) -14.9% 12.3% 14.4% 7.1%
Intangible assets 34 34 34 34 34 Ad rate per ccm (RM) 56 57 58 59
Other long-term assets 21 21 21 21 21 Cover price (RM) 1.20 1.20 2.20 3.20
Total non-current assets 818 814 809 803 796 Newsprint cost (US$/tonne) 638 660 660 680
Cash and equivalents 573 597 287 356 461 Newsprint usage (tonnes p.a.) 75,690 79,474 80,666 82,615
Stocks 200 190 319 342 351
Trade debtors 112 98 163 176 183
Total current assets 897 897 781 885 1,006
NTA/share (RM) 1.66 1.67 1.40 1.49 1.63

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 17.0
Pretax profit 201 197 271 294 325
16.5
16.0
Cash tax paid (63) (45) (76) (82) (91) 15.5
Others (22) (19) (19) (9) (12) 15.0

14.5
Capex (50) (49) (48) (47) (46)
14.0
Others 0 0 0 0 0 13.5
12.0
Change in cash 51 24 (310) 69 105

MALAYSIA
Supermax Corp Bhd RM4.38 @07/12/10
Supercharged Target: RM8.22
Rubber Gloves
SUCB MK / SUPM.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Reiterate OUTPERFORM. Supermax, the most liquid rubber glove stock, remains
an OUTPERFORM. Our EPS forecasts are unchanged. However, our target price
increases from RM7.82 to RM8.22 after raising Top Glove’s CY11 target P/E from
13.8x to 14.5x while maintaining Supermax at a 20% discount to Top Glove or
11.6x P/E. Potential re-rating catalysts include 1) higher nitrile glove sales, 2)
refurbishment of the company’s Sungai Buloh plant to manufacture surgical gloves,
and 3) tax savings from the company’s regional distribution hub in Malaysia.
• Unique business model. Supermax’s own brand gloves make up 63% of its sales,
making it the sector’s largest original brand glovemaker and giving it superior
pricing power. Through its ownership of distributors, the group has gained its own
distribution channels that give it direct access to customers. Distribution income
now accounts for 44% of net profit compared with just 21% in 2001.
• Flexible glovemaking capabilities. 60-70% of Supermax’s production lines are
dual mode, enabling the company to switch seamlessly between natural rubber and
nitrile glove production. In our view, this enhances Supermax’s ability to gain market
share and maintain high utilisation rates by meeting market demand quickly.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 811.8 803.6 946.5 1,184.2 1,381.4
EBITDA (RM m) 98.9 169.0 226.4 261.5 306.2
EBITDA margins (%) 12.2% 21.0% 23.9% 22.1% 22.2%
Net profit (RM m) 47.0 126.6 183.8 208.7 241.0
EPS (sen) 13.8 37.2 54.0 61.4 70.9
EPS growth (%) (16.0%) 169.3% 45.2% 13.5% 15.5%
P/E (x) 31.7 11.8 8.1 7.1 6.2
Core EPS growth (%) 10.9% 111.2% 40.2% 13.5% 15.5%
No. of shrs (m): 340 ROE (%) 11.7% 26.0% 28.0% 24.7% 23.1%
- Thai Kim Sim, Stanley 20.7 EV/EBITDA (x) 17.7 8.9 6.3 5.0 3.8
- Tan Bee Geok, Cheryl 14.8 % change in EPS estimates N/A N/A N/A
- Koperasi Permodalan Felda 5.2 CIMB/Consensus (x) 1.01 1.06 1.08

6.9 1.00
0.90
Founded by Dato' Seri Stanley Thai in 1987, Supermax exports to over 145 countries.
6.4
5.9
0.80
0.70
It is Malaysia’s first and largest original brand glove manufacturer, with brands such
5.4
4.9
0.60
0.50
as Supermax, Aurelia and Maxter. Although traditionally a natural rubber glovemaker,
4.4 0.40
0.30
Supermax has ramped up nitrile glove production to 20-24% of capacity. Today, the
3.9
3.4
0.20
0.10
company produces 16.5bn pieces of gloves p.a., meeting 11% of the world’s glove
2.9
0.00
demand. Supermax also has six of its own distribution centres in the US, Brazil,
Volume 10m (R.H.Scale) Supermax Corp Bhd Germany, Belgium and Canada.
Source: Bloomberg

Financial tables

Revenue 812 804 947 1,184 1,381 Revenue growth (%) 41.4 (1.0) 17.8 25.1 16.7
Operating expenses (713) (635) (720) (923) (1,075) EBITDA growth (%) 32.1 70.9 34.0 15.5 17.1
Tax (5) (25) (32) (37) (43)
Net profit 47 127 184 209 241
Adj. wt. shares (m) 340 340 340 340 340

Trade debtors 125 79 142 178 207
NTA/share (RM) 1.14 1.56 2.14 2.67 3.29

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 52 151 216 246 284 11.0
9.0
Cash tax paid (2) (13) (25) (32) (37)
Others 17 (19) 0 0 0
Capex (39) (17) (70) (60) (60)

Others (19) 0 0 0 0
Equity raised/(repaid) (6) 27 0 0 0
1.0
Change in cash (8) 97 84 131 179

MALAYSIA
Tan Chong Motor Holdings Bhd RM5.44 @06/12/10
Following a regional roadmap Target: RM9.15
Autos
TCM MK / TNCS.KL Loke Wei Wern +60 (3) 2084 9946 – weiwern.loke@cimb.com
• Maintain OUTPERFORM; top auto pick. Although Tan Chong’s share price has
risen 73% relative to the KLCI’s 18%, we still see value in the stock. It is trading at
close to 10% discount to its average historical P/E of 8.5x. In addition to the
strategic expansion of its model mix and excitement from its regional plans, we
think that Tan Chong is a good cyclical play on the economy. We continue to rate it
an OUTPERFORM and our top pick in the auto sector. Potential re-rating catalysts
include 1) a stronger earnings growth trajectory, 2) new model pipeline, and 3)
strategic positioning which will help it tap into regional demand. Our SOP-based
target price stays at RM9.15.
• New models to drive earnings growth next year. For 2011, Tan Chong plans to
launch three new facelifts, two new CKD models and two CBUs. Among them will
be the Nissan March, which is currently produced by Nissan’s Thai plant with a
localisation rate of close to 90%. This model is expected to hit Malaysian shores
towards end-2011. 2011 will also capture the full-year contribution from Nissan
Teana, which was officially launched on 23 Nov 10. The launch of the Teana
marked Nissan’s re-entry into the D-segment after a five-year hiatus.
• Building a platform for sustainable growth. Tan Chong’s FY11-12 earnings
should be largely driven by the domestic market. However, the group is building a
regional platform that should provide a new leg of growth post FY12 when the local
auto industry will be closer to saturation point. Having gained a foothold in the
Indochina region, Tan Chong is paving the way for a possible entry into Indonesia.
It was recently awarded a manufacturing licence in Sabah that could give the group
a springboard into Indonesia given Sabah’s proximity to Kalimantan and Sulawesi.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 3,195.8 2,856.9 3,518.8 4,072.0 5,314.8
EBITDA (RM m) 374.9 234.0 451.5 516.3 696.9
EBITDA margins (%) 11.7% 8.2% 12.8% 12.7% 13.1%
EPS (sen) 36.6 22.8 40.8 51.0 70.9
Market cap: RM3,656m/US$1,162m EPS growth (%) 318.6% (37.6%) 78.9% 25.0% 39.0%
RM2.46 Gross DPS (sen) 10.0 11.0 12.0 13.0 14.0
No. of shrs (m): 672 P/BV (x) 2.6 2.4 2.1 1.8 1.5
- Tan Chong Consolidated 45.6 EV/EBITDA (x) 10.4 16.0 8.3 7.1 5.2
- Nissan Motor Corp 5.6 % change in EPS estimates - - -

6.3
6.00
Tan Chong Motor is the exclusive assembler and distributor of the Nissan and
5.8
5.3 5.00
Renault marques in Malaysia. It is 5.6% owned by Nissan Motor Japan. Through
4.8
4.3
4.00 Nissan and Renault, Tan Chong accounts for close to 6% share of total vehicle sales
3.8
3.00
2.00
in Malaysia currently compared with a mere 3.8% in 2007. Beyond the domestic
3.3
2.8 1.00 market, Tan Chong holds the exclusive distribution rights for Nissan vehicles in
2.3
0.00
Cambodia and Laos. Recently, it rounded off its Indochina strategy with the proposed
Volume 1m (R.H.S ca le ) Ta n Chong Motor Holdings Bhd acquisition of a 74% stake in the exclusive importer and distributor of Nissan vehicles
Source: Bloomberg in Vietnam.

Financial tables

Tax (61) (23) (118) (115) (159)
Net profit 246 153 274 343 477
Adj. wt. shares (m) 672 672 672 672 672

Fixed assets 521 494 522 548 591 Unit sales 31,731 35,077 39,949 55,453
Intangible assets 0 0 0 0 0 Unit sales growth (%) 2.6% 10.5% 13.9% 38.8%
Other long-term assets 280 393 393 393 393 Exchange rate (RM to US$) 3.60 3.30 3.25 3.25
Stocks 854 673 872 1,010 1,321
Trade debtors 276 352 441 519 690
NTA/share (RM) 2.12 2.25 2.57 2.98 3.59

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 13.0
Pretax profit 307 177 393 458 637
12.0
Working capital changes (293) 60 (226) (165) (365) 11.0
Cash tax paid (61) (52) (23) (118) (115) 10.0

Others 15 4 (96) 36 (32)
9.0
Capex (79) (56) (80) (80) (100) 8.0
Net investments & sale of FA (1) (144) 0 0 0
7.0
Others 1 (20) 0 0 0

Equity raised/(repaid) (7) (12) 0 0 0
4.0
Cash interest & others 0 0 15 (1) (10)
Change in cash 6 38 (29) 136 19
Change in net cash/(debt) (109) (40) (29) 116 (1)

MALAYSIA
Tasek Corporation Bhd RM7.59 @07/12/10
Concrete prospects Target: RM9.00
Cement
TC MK / TKCS.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Maintain OUTPERFORM. Tasek remains an OUTPERFORM given our upbeat

outlook for the construction sector and the potential improvement in cement selling
prices. Our target price remains RM9.00 as we continue to use a blend of 12.4x P/E
and 1.0x BV. Potential re-rating catalysts for Tasek include 1) construction starts, 2)
stable selling prices for cement, and 3) product diversification.
• Positive on M&A. In November, it was reported that Tasek could use its RM354m
net cash to acquire MTD ACPI’s (ACP MK, Underperform) precast concrete
business. We would view this positively as Tasek would be able to take advantage
of MTD ACPI’s presence in Johor since Tasek’s parent company, Hong Leong Asia
Ltd is a leading supplier of cement and prefabrication products in Singapore.
• Mega construction jobs. The 10th Malaysia Plan and Budget 2011 revealed big
projects such as the KL MRT, LRT, new LCCT and high-speed rail project, which
should boost construction activities and reinvigorate demand for building materials
such as cement. Awards for RM1.6bn out of the RM7bn LRT extension have
already been announced and we expect more announcements in 2011.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 509.8 526.8 575.9 611.2 620.6
EBITDA (RM m) 122.6 124.2 139.0 157.1 158.8
EBITDA margins (%) 24.0% 23.6% 24.1% 25.7% 25.6%
Net profit (RM m) 75.1 67.1 121.0 130.9 101.9
EPS (sen) 40.7 36.3 97.9 105.9 82.4
Stock Information EPS growth (%) 99.8% (10.8%) 169.6% 8.2% (22.1%)
Market cap: RM938m/US$299m P/E (x) 18.7 20.9 7.8 7.2 9.2
12-m price range: RM8.57 Core EPS (sen) 40.7 36.3 66.7 79.4 82.4
RM5.66 Core EPS growth (%) 99.8% (10.8%) 83.6% 19.2% 3.8%
3-m avg daily vol: 0.0m Core P/E (x) 18.7 20.9 11.4 9.6 9.2
No. of shrs (m): 124 P/BV (x) 1.6 1.5 1.1 1.0 0.9
- HL Cement (M) Sdn Bhd 72.6 EV/EBITDA (x) 9.0 8.5 4.1 3.0 2.2
- Amanah Raya 8.6 % change in EPS estimates N/A N/A N/A

8.8 Tasek Corporation was incorporated in 1962 as Tasek Cement Limited and was listed
25.00
8.3
20.00
on Bursa Malaysia in 1963. It commenced cement production in 1964 with an annual
7.8
7.3 15.00
rated production capacity of 250,000 tonnes at its present plant in the Tasek Industrial
6.8
10.00 Estate, Ipoh. Over the years, it undertook a series of expansion to keep pace with
6.3
5.8
5.00 Malaysia’s economic and infrastructure development. Its continuous upgrade of its
5.3
0.00
plants, equipment and technology has pushed its capacity to 2.3m mt of clinker per
Volume 100k (R.H.Scale) Tasek Corporation Bhd year. Tasek now ranks as the fourth largest cement player in the country.
Source: Bloomberg

Financial tables

Tax (24) (20) (40) (44) (34)
Net profit 75 67 121 131 102
Adj. wt. shares (m) 184 185 124 124 124

Fixed assets 371 361 370 369 368 Cement ASP - domestic (RM/tonne) 277 300 300 300
Intangible assets 1 1 1 1 1 Utilisation rate (%) 66.0% 70.0% 70.0% 70.0%
Stocks 121 113 126 134 136
NTA/share (RM) 4.63 4.91 6.93 7.81 8.75

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 99 87 161 175 136 18.0
Working capital changes (46) 20 (2) 8 2
16.0
Cash tax paid (13) (11) (4) (4) (3)
Others (7) (1) (74) (1) (1)
Capex (31) (37) (50) (40) (40)

Others 0 0 0 0 0
Debt raised/(repaid) 5 (1) (1) 0 0
8.0
Change in cash 52 95 18 101 114

MALAYSIA
Telekom Malaysia Bhd RM3.41 @07/12/10
Capital management potential Target: RM4.04
Telecommunications - Integrated
T MK / TLMM.KL Kelvin Goh CFA +60(3) 2084 9699 – kelvin.goh@cimb.com
• Telekom Malaysia is a TRADING BUY because of potential capital management

given its burgeoning cash. Its net debt/EBITDA is 0.9x and would be 0.6x if its
Axiata shares were included. Operationally, we are concerned about the take-up of
its Unifi HSBB, rising competition from wireless broadband operators and continued
decline in voice revenues. We raise our SOP-based target price from RM3.80 to
RM4.04 after including its Axiata shares which are worth RM0.25/TM share. Likely
re-rating catalysts are the sale of its Axiata shares and special dividends or capital
repayment.
• Concerns over take-up of Unifi. We are concerned that the take-up of Unifi could
be limited due to affordability issues and consumers’ lack of need for high speeds.
An indication of this is the low take-up of 5% for TM’s upselling of Streamyx
residential users since Nov 09 to higher-end plans.
• Crowded broadband playing field. Broadband competition will intensify with the
entry of YTL Communications, the re-emergence of U Mobile and SK Telecom’s
investment in Packet One. Given YTLC’s strong financial backing, good execution,
and plan to launch pay TV, we think it will be the biggest threat to TM.
• Special dividends? We think there is a possibility of a special dividend at end-
2010 or 2011 given the rising cash bolstered by RM0.07/share by the sale of its
Measat stake. Expectations of capital management will be raised further if it sells its
shares in Axiata. However, TM may keep its balance sheet conservative given that
it has US$260m (RM810m) debt due at end-2010 and RM2bn due in 2011.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 8,674.9 8,608.0 8,715.9 8,910.4 9,075.8
EBITDA (RM m) 2,738.4 2,936.8 2,806.5 2,453.1 2,553.1
EBITDA margins (%) 31.6% 34.1% 32.2% 27.5% 28.1%
Pretax profit (RM m) 353.8 921.6 1,254.0 916.1 1,056.6
Net profit (RM m) 167.0 643.0 970.2 613.4 717.4
EPS (sen) 4.8 18.2 27.2 17.1 19.9
EPS growth (%) (83.9%) 277.8% 49.4% (37.0%) 16.4%
P/E (x) 70.8 18.8 12.5 19.9 17.1
Market cap: RM12,199m/US$3,889m Core EPS growth (%) 28.7% (15.1%) (6.2%) (55.0%) 37.1%
RM2.99 Gross DPS (sen) 27.3 124.4 43.0 26.0 25.9
No. of shrs (m): 3,577 P/BV (x) 1.2 1.7 1.7 1.9 2.0
- Amanah Saham Bumi 5.9 CIMB/Consensus (x) 0.85 0.45 0.56

3.8 1.80
1.60
Telekom Malaysia (TM) is Malaysia’s third largest telecom service provider in terms of
3.6 1.40 revenue and the fourth largest by market capitalisation. It is the incumbent fixed line
1.20
3.4
1.00 telecom service provider offering consumer and business voice, broadband and data
3.2
0.80
0.60
services. It also has a 100% stake in VADS, a leading IT systems integrator,
3.0 0.40
0.20
managed network service provider and contact centre service provider. In 2008, TM
2.8
0.00
undertook a demerger exercise where its domestic mobile and overseas operations
Volume 10m (R.H.S ca le ) Te le kom Ma la ys ia Bhd were carved out and listed separately as TM International, which was later renamed
Source: Bloomberg Axiata Group.

Financial tables

Operating expenses (5,937) (5,671) (5,909) (6,457) (6,523) EBITDA growth (%) (11.1) 7.2 (4.4) (12.6) 4.1
Pretax profit 354 922 1,254 916 1,057 Creditors turnover (days) 121.6 121.8 122.5 124.9 128.7
Tax (78) (248) (253) (257) (285)
Net profit 167 643 970 613 717
Adj. wt. shares (m) 3,469 3,536 3,570 3,585 3,601

Fixed assets 11,772 12,330 12,597 12,504 11,797 Residential fixed line ARPU (RM) 45.0 44.1 45.7 45.2
Intangible assets 2 2 2 2 2 Business fixed line ARPU (RM) 131.0 126.7 127.1 127.1
Other long-term assets 1,347 1,431 1,179 1,179 1,179 Residential fixed line subs (m) 2.77 2.76 2.76 2.77
Total non-current assets 13,121 13,763 13,778 13,684 12,978 Business fixed line subs (m) 1.55 1.56 1.57 1.58
Cash and equivalents 2,373 3,785 3,068 2,703 3,280 Broadband ARPU (RM) 87.0 82.7 78.5 76.2
Stocks 123 111 107 110 112 No. of broadband subscribers (m) 1.57 1.73 1.89 2.01
Trade debtors 2,891 2,284 2,193 2,120 2,159
Other current assets 4,025 0 0 0 0
Trade creditors 2,813 2,935 2,914 3,184 3,217
NTA/share (RM) 2.95 1.98 2.00 1.75 1.70

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 354 922 1,254 916 1,057
Working capital changes 1,188 708 74 341 (9)

Cash tax paid (78) (248) (253) (257) (285) 34.0
Others (312) (364) 107 81 78
Capex (1,839) (2,516) (2,200) (1,850) (1,200)
Net investments & sale of FA 1,000 8 0 0 0 24.0
Others (2,735) 38 252 0 0
19.0
Debt raised/(repaid) 170 3,739 (945) 0 0
14.0
Dividends paid (2,631) (4,419) (924) (1,499) (935) Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10
Cash interest & others 489 4,670 (107) (81) (78)
Cash flow from financing (1,928) 4,206 (1,883) (1,539) (969)
Change in cash (2,251) 4,791 (717) (365) 577
Change in net cash/(debt) (2,421) 1,052 228 (365) 577

MALAYSIA
Tenaga Nasional Bhd RM8.44 @07/12/10
Sparks to fly soon? Target: RM10.55
Power
TNB MK / TENA.KL Ivy Ng Lee Fang CFA +60(3) 2084 9697 – ivy.ng@cimb.com
• Key heavyweight laggard; reiterate TRADING BUY. Tenaga remains a

TRADING BUY as we see potential re-rating catalysts for this heavyweight laggard
in the form of i) newsflow on gas subsidy rollback and a corresponding tariff hike, ii)
revival of foreign interest and iii) stronger-than-expected demand with the rollout of
major construction projects. We retain our end-CY11 target price of RM10.55
(unchanged 1.5x forward P/BV) and continue to rate it our top pick in the power
sector.
• Expecting positive sector-wide reforms. We expect sector-wide reforms to be a
key theme in the coming months. A focus on subsidies could pave the way for a
gas-led tariff hike, which could also mean an upward revision of its coal reference
price and base tariff. Attention on other themes like i) plant-up of new supply and ii)
PPA renegotiations are also long-term positives for Tenaga.
• Power demand to normalise. After an impressive 8.8% rise in FY10, demand
growth is set to moderate to about 5% p.a. for FY11-12. We believe there is room
for upside to demand growth, especially if the massive construction projects under
the 10MP and ETP initiatives take off over the near term.
• A heavyweight laggard. Having underperformed the FBM KLCI YTD, Tenaga is
clearly a laggard play. Given its low foreign shareholdings of under 13%, it is also a
prime beneficiary of a potential inflow of foreign funds into the Malaysian market.
Financial summary
FYE Aug 2009 2010 2011F 2012F 2013F
Revenue (RM m) 28,785.6 30,320.1 31,812.0 33,337.3 34,299.6
EBITDA (RM m) 7,260.4 8,208.4 7,956.7 8,360.0 8,794.1
EBITDA margins (%) 25.2% 27.1% 25.0% 25.1% 25.6%
Net profit (RM m) 917.9 3,201.9 2,982.2 3,110.2 3,303.5
EPS (sen) 21.2 73.6 68.5 71.5 75.9
EPS growth (%) (64.6%) 247.6% (6.9%) 4.3% 6.2%
P/E (x) 39.9 11.5 12.3 11.8 11.1
Stock Information
Core EPS (sen) 56.7 63.5 63.0 69.4 75.9
Market cap: RM36,799m/US$11,731m Core EPS growth (%) (4.0%) 11.9% (0.8%) 10.2% 9.4%
RM7.81 Gross DPS (sen) 17.8 26.0 22.7 24.7 24.0
No. of shrs (m): 4,360 P/BV (x) 1.4 1.3 1.2 1.1 1.0
- Skim ASB 9.6 CIMB/Consensus (x) 0.95 0.95 0.95

2.00
1.80
Tenaga Nasional is Malaysia’s national utility company. It was privatised and listed on
9.4
1.60
1.40
Bursa Malaysia in May 92. Tenaga has a monopoly of the power transmission and
8.9 1.20
1.00
distribution (T&D) business in Peninsular Malaysia. Its share of the peninsula’s
8.4 0.80
0.60
generating capacity currently stands at about 47%. Via its 80% stake in Sabah
7.9 0.40
0.20
Electricity Sdn Bhd (SESB), Tenaga also controls power-related matters in Sabah. On
7.4
0.00
the overseas front, it owns a 235MW power plant in Pakistan and an effective 6%
Volume 10m (R.H.S ca le ) Te na g a Na s iona l Bhd stake in the Shoaiba water and power project in Saudi Arabia. The government,
Source: Bloomberg directly and indirectly, owns around 85% of Tenaga. Since Jan 10, Tenaga’s foreign
shareholding has been creeping up mom to 12.7% as at end-Sep 10.

Financial tables

(RM m, FYE Aug) 2009 2010 2011F 2012F 2013F (FYE Aug) 2009 2010 2011F 2012F 2013F
Operating expenses (21,525) (22,112) (23,855) (24,977) (25,506) EBITDA growth (%) (2.0) 13.1 (3.1) 5.1 5.2
Others (1,239) 656 241 91 0 Stock turnover (days) 26.5 26.5 27.9 27.1 27.4
Tax (690) (825) (684) (754) (825)
Net profit 918 3,202 2,982 3,110 3,304
Adj. wt. shares (m) 4,337 4,353 4,353 4,353 4,353

(RM m, end Aug) 2009 2010 2011F 2012F 2013F (FYE Aug) 2010 2011F 2012F 2013F
Fixed assets 58,227 58,032 60,081 61,850 63,542 Average selling price per kwh (sen) 31 31 31 31
Intangible assets 0 0 0 0 0 Capacity (MW) 21,794 21,794 21,794 21,794
Other long-term assets 1,177 1,254 1,278 1,305 1,335 Demand growth (%) 12.5% 5.0% 5.0% 3.0%
Total non-current assets 59,404 59,286 61,359 63,156 64,877 Exchange rate (RM to US$) 3.34 3.16 3.17 3.15
Stocks 1,956 2,450 2,420 2,537 2,611
Trade debtors 2,468 2,468 2,108 2,210 2,274
Trade creditors 4,150 3,870 5,092 5,332 5,444
NTA/share (RM) 6.00 6.61 7.07 7.53 8.04

(RM m, FYE Aug) 2009 2010 2011F 2012F 2013F 17.0
Pretax profit 1,543 4,022 3,662 3,859 4,124
Working capital changes 369 (609) 1,092 7 (46) 15.0

Cash tax paid (250) (579) (692) (574) (632)
Others 1,457 825 732 682 665 14.0
Capex (4,128) (3,708) (4,530) (5,200) (5,200)
Net investments & sale of FA 66 (74) 0 0 0 12.0
Others 230 0 0 0 0
11.0
Debt raised/(repaid) (1,205) (703) (2,786) (1,533) (1,888) 10.0

9.0
Cash interest & others (1,490) 220 (1,305) (461) (359)
Cash flow from financing (3,148) (998) (4,725) (2,692) (2,924)
Change in cash (300) 2,829 (649) 0 0
Change in net cash/(debt) 904 3,532 2,137 1,533 1,888

MALAYSIA
Tomypak Holdings RM1.00 @07/12/10
A solid package Target: RM1.80
Packaging
TOMY MK / TOMY.KL Nigel Foo +60(3) 2084 9293 – nigel.foo@cimb.com
• Maintain OUTPERFORM. Tomypak, Malaysia’s 2nd largest flexible packaging

producer, remains an OUTPERFORM for its exposure to the resilient F&B sector
and its stable MNC customer base. We continue to value the stock at a 30%
discount to Daibochi’s revised target P/E of 10.1x, which reduces our target price
from RM2.00 to RM1.80, based on 7.1x CY12 P/E. Potential re-rating catalysts
include i) a margin recovery from 1Q11 onwards, ii) stronger-than-expected
revenue, and iii) attractive P/E valuations.
• Indirect play on F&B sector. Tomypak derives 90% of its revenue from the
resilient F&B sector, which should provide a stable revenue base in the long term,
especially with major MNCs such as Nestle, Kraft and Unilever being its customers.
MNCs currently contribute around 40-45% of the group’s revenue and Nestle is
Tomypak’s largest MNC customer. MNC and domestic listed companies contribute
around 70% of Tomypak’s revenue.
• Quarterly price revisions. Tomypak and its MNC customers review selling prices
every quarter for changes in raw materials and forex fluctuations. This enables the
company to pass on rising raw material costs and allows management to focus on
its operations.
• Quarterly dividend paymaster. Tomypak pays dividends on a quarterly basis.
Gross dividend yield is projected to be around 8% this year but could surprise on
the upside as it works out to a net payout ratio of less than 30%. Given the
company’s projected net cash position in 2011, the net dividend payout ratio could
be much higher at around 40-50%.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 182.8 159.1 182.9 194.6 212.2
EBITDA (RM m) 18.1 31.6 27.1 36.9 40.2
EBITDA margins (%) 9.9% 19.9% 14.8% 19.0% 18.9%
Net profit (RM m) 7.6 20.1 15.6 24.8 27.1
EPS (sen) 7.6 20.1 14.5 23.0 25.3
EPS growth (%) 406.7% 164.5% (27.6%) 58.2% 9.7%
Stock Information
P/E (x) 13.2 5.0 6.9 4.3 4.0
Market cap: RM109m/US$35m Gross DPS (sen) 1.6 6.5 7.4 8.5 9.6
RM0.65 P/BV (x) 1.7 1.3 1.2 1.0 0.9
No. of shrs (m): 109 Net gearing (%) 58.8% 11.5% 8.1% N/A N/A
Est. free float (%): 40.0 Net cash per share (RM) N/A N/A N/A 0.18 0.30
- Chow family 32.0 % change in EPS estimates - - -
- Lim Hun Swee 13.6 CIMB/Consensus (x) 0.86 1.00 1.01

1.6
8.00 Tomypak, the country’s second largest plastic flexible packaging (PFP) materials
7.00
1.4 6.00
producer, was listed on the Main Board in 1996. Its founder, the Chow family remains
1.2
5.00
4.00
the group’s largest shareholder with around 32% equity stake. Management and
1.0 3.00 direction of the group is driven by its MD Chow Yuen Liong who has been with
0.8
2.00
1.00
Tomypak since 1980. Tomypak handles mainly the demands of MNCs in Malaysia.
0.6
0.00
MNC customers include Nestle, Kraft and Unilever. Local customers include Apollo
Volume 1m (R.H.S ca le ) Tomypa k Holding s Food, Zhulian and Mamee-Double Decker. The group has been supplying to Nestle
Source: Bloomberg since 1980.

Financial tables

Operating expenses (165) (128) (156) (158) (172) EBITDA growth (%) 56.0 74.6 (14.2) 36.2 8.9
EBIT 9 22 17 27 30 Interest cover (x) 8.0 17.0 57.7 N/A N/A
Tax 0 (1) (1) (3) (3)
Net profit 8 20 16 25 27
Adj. wt. shares (m) 100 100 108 108 108

Stocks 27 26 27 29 38
NTA/share (RM) 0.59 0.77 0.81 0.97 1.15

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 8.0
7.0
Working capital changes (2) 9 (10) 5 (9) 6.0
Cash tax paid 0 (1) (1) (3) (3)
Others (6) 0 0 0 0 5.0

Capex (7) (11) (8) (7) (7)
Others 0 0 0 0 0
2.0
Debt raised/(repaid) (3) 0 0 (2) 0 1.0
0.0

MALAYSIA
Top Glove Corporation RM5.55 @07/12/10
It’s a whole new ball game Target: RM7.27
Rubber Gloves
TOPG MK / TPGC.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Maintain OUTPERFORM. Top Glove remains an OUTPERFORM and the key

proxy for the glove sector due to its size and liquidity. We retain our EPS forecasts.
Although we continue to value the stock at our target market P/E, our target price
rises from RM6.92 to RM7.27 as our target market P/E has been revised from 13.8x
to 14.5x. Potential re-rating catalysts include 1) distributors’ restocking of
inventories, which have been whittled down to as low as a month, 2) diversification
of its product mix, and 3) commissioning of its two nitrile glove factories with a
capacity of 1.5bn pieces of gloves each in FY11.
• Potential upstream diversification. Top Glove has signed an MOU with a
Cambodian party and is expected to formalise an agreement to acquire a brownfield
rubber plantation in Cambodia over the next few months. Although the earnings
impact is negligible given the 4-6 year gestation period for rubber, we take a
positive view of this development as it will give Top Glove its own source of rubber
latex over the longer term. This will smooth out earnings by reducing the company’s
exposure to the volatile rubber latex market.
• Catching up quickly. At 7% of its capacity, Top Glove has the least nitrile capacity
in the sector. However, we expect this percentage to increase to 10-15% or 4bn-
6bn pieces over the next two years as the company will be commissioning its two
nitrile plants and converting exiting lines to nitrile. Moreover, Top Glove has
RM260m cash that could be used to acquire nitrile expertise, distribution networks
and key customers.
Financial summary
FYE Aug 2009 2010 2011F 2012F 2013F
Revenue (RM m) 1,529.1 2,079.4 2,009.2 2,298.2 2,427.2
EBITDA (RM m) 286.2 362.3 406.0 440.3 466.8
EBITDA margins (%) 18.7% 17.4% 20.2% 19.2% 19.2%
EPS (sen) 27.4 39.7 44.6 49.0 52.4
Market cap: RM3,432m/US$1,094m EPS growth (%) 53.7% 45.0% 12.5% 9.8% 7.0%
RM4.60 Gross DPS (sen) 10.9 16.0 18.0 20.0 22.0
No. of shrs (m): 618 P/BV (x) 4.2 3.1 2.6 2.2 1.9
- Tan Sri Dr. Lim Wee Chai 29.0 EV/EBITDA (x) 11.5 8.7 7.3 6.3 5.5
- Top Glove Holdings 5.2 % change in EPS estimates N/A N/A N/A
- Matthews International 5.2 CIMB/Consensus (x) 1.10 1.13 1.07

1.20 Top Glove is the world’s largest rubber glove manufacturer with a global market share
7.3
6.8
1.00
of 23% based on its existing capacity of 33.75bn pieces. Established in 1991, the
0.80
6.3
0.60
group was listed on Bursa Malaysia in 2001. Currently, it has 379 production lines in
5.8
5.3
0.40
18 glove manufacturing factories located in Malaysia, Thailand and China. It also has
4.8 0.20 two latex concentrate plants in Thailand with a combined capacity of 93,200 tonnes
4.3
0.00
p.a. The company produces a diversified range of high-quality and value-added
Volume 10m (R.H.Scale) Top Glove Corporation gloves for the medical, food & services, high technology and industrial markets.
Source: Bloomberg

Financial tables

(RM m, FYE Aug) 2009 2010 2011F 2012F 2013F (FYE Aug) 2009 2010 2011F 2012F 2013F
EBIT 229 303 347 379 404 Interest cover (x) 26.9 475.4 1,126.4 1,119.8 1,083.9
Net interest & invt income (6) 4 5 7 10 Effective tax rates (%) 24.3 18.2 22.0 22.0 22.0
Associates’ contribution (1) (1) 1 1 1 Net dividend payout (%) 29.8 30.2 30.2 30.6 31.5
Tax (54) (56) (78) (85) (91)
Minority interests 1 (5) 1 1 1
Net profit 169 245 276 303 324
Adj. wt. shares (m) 618 618 618 618 618

(RM m, end Aug) 2009 2010 2011F 2012F 2013F (FYE Aug) 2010 2011F 2012F 2013F
Trade debtors 198 233 241 276 291
Total current assets 511 737 925 1,174 1,420
NTA/share (RM) 1.30 1.74 2.08 2.46 2.86

(RM m, FYE Aug) 2009 2010 2011F 2012F 2013F 17.0
Pretax profit 222 306 352 387 414
Cash tax paid (39) (74) (56) (78) (85) 13.0
Others 22 14 (1) 8 6
11.0
Capex (67) (85) (80) (80) (80)
9.0
Others (10) 0 0 0 0
7.0
Debt raised/(repaid) (166) (17) 0 0 0
5.0
Change in cash 67 117 190 187 219

MALAYSIA
Uchi Technologies Bhd RM1.34 @07/12/10
An unknown brew for 2011 Target: RM1.68
Technology - Others
UCHI MK / UCHI.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Reiterate OUTPERFORM as we raise our target price. Uchi remains an

OUTPERFORM in view of the potential re-rating catalysts of better-than-expected
FY11 guidance, stronger-than-expected order flows and higher contribution from
higher-margin products. Although we maintain our EPS forecasts and valuation
basis of 20% discount to our target market P/E, our target price rises from RM1.60
to RM1.68, purely because of the upgrade of our target market P/E from 13.8x to
14.5x.
• Guidance for 2011 unknown but signs are positive. Uchi is unable to provide
any guidance for FY11 as it is only meeting its clients in early Dec. Nevertheless,
there are some encouraging signs as it has received some orders for as late as Apr
11 and lead times from some of its customers have been increasing. Meanwhile,
Uchi has already raised its guidance for FY10 from 25-30% topline growth in US$
terms to 33-34%.
• Future sources of revenue growth. Uchi’s revenue growth will depend on
increasing outsourcing, either by i) piggybacking on Jura’s ambition of growing the
market or ii) convincing its existing customers to outsource more to it. It is also
perpetually working on 20-30 new products each year to help drive revenue and
broaden its product offerings.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 122.8 83.1 100.4 110.5 121.5
EBITDA (RM m) 53.5 41.1 46.6 50.9 55.7
EBITDA margins (%) 43.6% 49.4% 46.4% 46.1% 45.9%
Net profit (RM m) 58.7 27.0 44.7 48.9 53.7
EPS (sen) 15.8 7.3 12.1 13.2 14.5
EPS growth (%) (24.7%) (53.9%) 66.1% 9.2% 9.8%
Core EPS (sen) 15.8 10.1 12.1 13.2 14.5
Market cap: RM503m/US$160m Core EPS growth (%) (24.7%) (36.1%) 19.9% 9.2% 9.8%
RM1.17 Gross DPS (sen) 16.7 8.0 13.3 14.1 15.4
No. of shrs (m): 376 P/BV (x) 2.9 3.0 2.9 2.8 2.6
- Eastbow International 24.6 EV/EBITDA (x) 6.8 9.1 7.9 7.1 6.4

1.6
1.6
4.00 Uchi was listed on the now-defunct Second Board in 2000. It is an original design
3.50
1.5
1.5
3.00
manufacturer (ODM) of controller and power modules for fully automated coffee
1.4
1.4
2.50
2.00
makers and scientific instruments. Uchi is the largest producer of fully automated
1.3
1.3
1.50 coffee modules in the world. These products contribute around 80% of its revenue.
1.2
1.2
1.00
0.50
Uchi supplies them to Eugster which supplies the completed coffee machines to
1.1
0.00
Saeco (Italian), Jura (Swiss), Krups (German), AG (German), Bosch (German),
Volume 1m (R.H.S ca le ) Uchi Te chnolog ie s Bhd Siemens (German) and Nestle (Swiss). The remaining 20% of Uchi’s revenue comes
Source: Bloomberg from the biotech division, namely weighing scales and lab products.

Financial tables

Net interest & invt income 9 (1) 1 1 1 Effective tax rates (%) 3.2 2.7 0.6 0.4 0.3
Tax (2) (1) 0 0 0
Net profit 59 27 45 49 54
Adj. wt. shares (m) 373 371 371 371 371

Fixed assets 28 32 34 36 39 Average selling price (RM/unit) 130 140 150 160
Intangible assets 0 0 0 0 0 Units of microcontrollers (m) 0.6 0.7 0.9 0.9
Stocks 16 10 13 14 16
NTA/share (RM) 0.45 0.44 0.46 0.49 0.52

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 17.0
16.0
15.0
Cash tax paid (1) (1) 0 0 0 14.0
Others (6) (2) (1) (1) (1) 13.0

12.0
Capex (10) (5) (5) (5) (5)
11.0
Others 5 3 0 0 0 10.0
Cash flow from investing 3 3 (5) (5) (5) 9.0

7.0
Cash interest & others (5) (1) 1 1 1
Change in cash (11) (12) 3 6 7

MALAYSIA
UMW Holdings Bhd RM6.91 @07/12/10
Vehicle for auto exposure Target: RM8.85
Autos
UMWH MK / UMWS.KL Loke Wei Wern +60 (3) 2084 9946 – weiwern.loke@cimb.com
• Reiterate OUTPERFORM. With 46% share of the domestic market through

Perodua and Toyota, UMW is a good proxy for the auto sector, which has done
very well in terms of sales. But UMW’s share price hardly reflects this, having risen
only 9% YTD against the KLCI’s 18% gain. We maintain our OUTPERFORM rating
given the potential share price triggers of 1) rising contribution from the auto
segment, 2) recovery of its O&G earnings, and 3) listing of its O&G division. No
changes are made to our earnings projections or SOP-based target price of
RM8.85, which continues to tag target P/Es of 13.8x to its auto division, 10x to
manufacturing & equipment and 7.5x to O&G.
• Auto division to remain the key earnings driver. Due to the liberalisation of the
auto sector, we think that competition will remain intense as consumers have
increasingly broader product choices. But we think that UMW Toyota and Perodua
will continue to introduce new models to enhance their model line-up and sustain
orders. In 2011, Perodua is slated to release the replacement for the Myvi, which
we expect will be a key volume driver for the national carmaker. 2011 will also see
the full-year impact from the recent launch of the Toyota Avanza.
• Oil & gas division to recover in 2011? Sentiment on the stock could be weighed
down by the losses at its O&G division. But we expect prospects for its O&G
division to improve in 2011. Recall that Naga 2 started operations at end-Sep 10,
which means that its maiden full-year contribution will be reflected in 2011. UMW
has also taken delivery of Naga 3 and is in active negotiations with potential clients.
However, UMW may incur pre-operating expenses in the period leading up to the
successful deployment of the new premium jack-up rig.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 12,769.6 10,699.0 12,361.3 12,917.6 13,716.4
EBITDA (RM m) 1,268.2 1,013.5 1,505.5 1,553.2 1,616.6
EBITDA margins (%) 9.9% 9.5% 12.2% 12.0% 11.8%
Pretax profit (RM m) 1,276.7 846.5 1,417.2 1,505.6 1,573.2
Net profit (RM m) 565.8 382.4 652.7 736.6 771.3
EPS (sen) 52.2 34.6 58.3 65.8 68.9
No. of shrs (m): 1,152 ROE (%) 17.0% 10.5% 16.6% 17.2% 16.6%
Est. free float (%): 30.0 Net gearing (%) N/A 8.4% 1.2% N/A N/A
Conv. secs (m): None Net cash per share (RM) 0.27 N/A N/A 0.41 0.89
- Permodalan Nasional Bhd 61.0 EV/EBITDA (x) 6.5 9.1 6.1 5.8 5.4
- Kumpulan Wang Persaraan 5.1 CIMB/Consensus (x) 1.04 1.06 0.97

7.4
7.2
0.80
UMW Holdings, a 61%-owned subsidiary of Permodalan Nasional, is the exclusive
0.70
7.0 0.60 assembler and distributor of the Toyota marque in Malaysia. Within the auto sector, it
6.8
6.6
0.50
0.40
has the biggest exposure to the sector with a 46% market share through Toyota
6.4
6.2
0.30 (15%) and Perodua (31%). Its other major divisions include the oil & gas (O&G),
0.20
6.0
5.8 0.10
manufacturing and engineering (M&E) as well as the equipment divisions. The auto
5.6
0.00
division remains UMW’s biggest earnings contributor, accounting for close to 80% of
Volume 10m (R.H.S ca le ) UMW Holdings Bhd group revenue.
Source: Bloomberg

Financial tables

EBIT 1,074 778 1,216 1,260 1,322 Interest cover (x) 22.3 22.4 26.1 19.8 23.1
Pretax profit 1,277 846 1,417 1,506 1,573 Creditors turnover (days) 26.9 32.1 28.3 29.7 29.4
Tax (321) (199) (357) (388) (401)
Net profit 566 382 653 737 771
Adj. wt. shares (m) 1,084 1,106 1,119 1,119 1,119

Fixed assets 1,792 2,781 2,845 2,855 2,862 Unit sales 79,422 91,026 94,576 100,568
Intangible assets 133 241 241 241 241 Unit sales growth (%) -15.2% 14.6% 3.9% 6.3%
Other long-term assets 1,973 1,870 1,966 2,063 2,159 Exchange rate (RM to US$) 3.60 3.30 3.25 3.25
Stocks 1,454 1,304 1,506 1,574 1,671
Trade debtors 683 642 742 775 823
Trade creditors 990 889 1,027 1,073 1,140
NTA/share (RM) 3.10 3.16 3.45 3.77 4.12

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 16.0
Pretax profit 1,277 846 1,417 1,506 1,573

14.0
Cash tax paid (177) (321) (199) (357) (388)
Others (411) (15) (156) (123) (128)
13.0
Capex (630) (601) (300) (300) (300) 12.0
Others 75 (198) 0 0 0 11.0
Debt raised/(repaid) 486 897 (235) (190) (171) 10.0

9.0
Change in cash (29) 218 334 289 337
Ending net cash/(debt) 290 (411) (67) 457 994

MALAYSIA
Unisem (M) Berhad RM1.96 @07/12/10
All eyes on China Target: RM2.82
Semiconductor
UNI MK / UNSM.KL Terence Wong CFA +60(3) 20849689 – terence.wong@cimb.com
• Reiterate OUTPERFORM. We maintain our OUTPERFORM rating on Unisem in

view of the potential catalysts of earnings surprises, more tier 1 customer
qualification and demand revival. Also intact are our EPS forecasts and target price
of RM2.82 as we continue to value the stock at 1.6x P/BV, a 20% discount to its
mid-cycle valuation.
• Gunning for 20% revenue growth. Unisem aims to expand its topline by 20% for
2011 as it plans to increase its market share for advanced packages. It is also
looking to raise its market share as a whole by growing its business from existing
customers, bringing in new customers and qualifying one or two tier-1 customers.
The guidance is slightly above our own forecast of a 15% growth as we are a bit
more cautious about the uptick in demand and visibility is limited.
• Pouring capex into China. Unisem’s China operations are still expected to be the
main driver for the group. This unit will be raising its capacity by 30-40% and the
revenue growth profile for 2011 is expected to be similar to its capacity expansion
there. Capex for FY11 will be RM200m-250m, and will mostly be spent on China.
• Test-only facility. Unisem is constructing its test-only facility in Ipoh which should
be ready by 4Q11. It will give it more capacity, free up space in its existing facility
and allow for a more streamlined and efficient operation.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 1,233.4 1,036.3 1,396.8 1,605.3 1,748.2
EBITDA (RM m) 235.7 245.4 342.7 412.2 455.1
EBITDA margins (%) 19.1% 23.7% 24.5% 25.7% 26.0%
Net profit (RM m) 19.8 61.8 178.7 204.0 231.9
EPS (sen) 3.7 9.2 26.5 30.3 34.4
EPS growth (%) (85.5%) 151.1% 189.1% 14.2% 13.7%
P/E (x) 53.7 21.4 7.4 6.5 5.7
Core EPS (sen) 10.0 10.2 26.5 30.3 34.4
Core EPS growth (%) (28.9%) 1.8% 160.5% 14.2% 13.7%
Stock Information
Core P/E (x) 19.6 19.3 7.4 6.5 5.7
RM1.15 Gross DPS (sen) 3.0 2.5 8.0 13.3 13.3
No. of shrs (m): 674 P/BV (x) 1.4 1.4 1.2 1.1 1.0
- John Chia 32.0 EV/EBITDA (x) 6.5 6.8 4.8 4.0 3.4
- LTAT 5.4 % change in EPS estimates N/A N/A N/A

3.0
2.8 2.50
Unisem is a leading semiconductor packaging and test services company in Malaysia.
2.6
2.4 2.00
It has its main packaging and test facilities in Ipoh, Malaysia. It completed the
2.2
2.0
1.50
acquisition of a competitor in Mauritius in July 2007, making it one of the global top 10
1.8
1.6
1.00 semiconductor and test services (SATS) players. Unisem offers an integrated suite of
1.4
1.2
0.50 packaging and test services such as wafer bump, wafer probe, wafer grinding and a
1.0
0.00 wide range of leadframe and substrate IC packaging, among others.
Volume 10m (R.H.S ca le ) Unis e m (M) Be rha d
Source: Bloomberg

Financial tables

Net interest & invt income (10) (17) 10 (7) (8) Effective tax rates (%) 23.8 N/A 9.0 10.0 12.0
Tax (6) 2 (18) (23) (32)
Net profit 20 62 179 204 232
Adj. wt. shares (m) 542 674 674 674 674

Fixed assets 1,149 1,118 1,214 1,289 1,309 Global semicon sales (US$bn) 229 302 317 333
Intangible assets 97 93 93 93 93 EBITDA Margin (%) 23.7% 24.5% 25.7% 26.0%
Stocks 114 127 169 191 207
Trade debtors 147 186 251 289 315
Shareholders’ funds 836 950 1,075 1,190 1,332
NTA/share (RM) 1.21 1.27 1.46 1.63 1.84

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
Pretax profit 24 58 198 230 267 12.0
10.0
Cash tax paid (5) 2 (18) (23) (32)
Others 96 25 0 0 0
Capex (119) (134) (250) (250) (200)

Others (7) 3 0 0 0
Debt raised/(repaid) (28) (155) 0 (20) (37)
2.0
Change in cash (29) (20) 10 (4) 69

MALAYSIA
NEUTRAL Maintained
Wah Seong Corp Bhd RM2.00 @07/12/10
In need of a stronger coating of growth Target: RM2.36
WSC MK / WAHE.KL Norziana Mohd Inon +60(3) 2084 9645 – norziana.inon@cimb.com
• Maintain OUTPERFORM. We maintain our forecasts but raise our target price from
RM2.24 to RM2.36, pegged to a revised target market P/E of 14.5x (13.8x
previously). Wah Seong remains a NEUTRAL. Our top oil & gas pick is
SapuraCrest.
• Gorgon project interrupted. The 3-year, RM551m Chevron Australia’s Gorgon
project, which involves the coating of 850km of pipes, commenced in Apr 10 but
was halted for a few weeks beginning Jun. The project resumed in late Jul but at a
slow pace. Putting the production hiccup behind, management stated that the
project is already back on track and that the company’s 4Q performance should
better reflect the execution of the project. Now in full production, the project takes
up about 70% of the Kuantan facility’s capacity and will contribute for the first full
year in FY11. Management has expressed its interest in other Australian pipe
coating contracts that are yet to be awarded including two by Woodside and Inpex
estimated to be worth some RM1.3bn.
• Engineering unit shows progress. While the pipe coating and corrosion
protection business awaits the award of new contracts, the engineering business
has picked up new jobs worth US$60m, which have helped to boost the company’s
order book value to RM1.3bn. Engineering jobs contribute 30% to the order book.
Pipe coating and corrosion protection remains the company’s main business with a
43% order book contribution.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 2,343.2 1,950.3 1,372.6 1,639.3 1,712.6
EBITDA (RM m) 247.2 452.1 129.5 221.3 273.2
EBITDA margins (%) 10.5% 23.2% 9.4% 13.5% 16.0%
Net profit (RM m) 115.6 121.3 51.9 107.4 137.7
EPS (sen) 17.7 17.8 7.6 15.8 20.2
EPS growth (%) 13.6% 0.6% (57.2%) 106.7% 28.2%
FD core EPS (sen) 14.1 14.3 6.1 12.7 16.2
Market cap: RM1,448m/US$462m FD core P/E (x) 14.2 14.0 32.6 15.8 12.3
No. of shrs (m): 724 ROE (%) 31.2% 29.3% 13.0% 27.4% 32.4%
Conv. secs (m): 30.7 Net cash per share (RM) N/A 0.01 0.39 0.40 0.74
- Wah Seong (Malaya) 26.7 EV/EBITDA (x) 7.3 3.6 10.8 6.4 4.5
- Chan Cheu Leong 8.6 % change in EPS estimates - - -

2.8
0.60
Wah Seong is principally involved in the provision of highly specialised pipe coating
2.6
0.50
services via its pipe coating and corrosion protection business, which has a major
0.40
2.4
0.30
presence across Asia. The company’s client base of oil & gas majors and state-run oil
2.2
0.20
& gas companies shows that it can compete internationally in an industry with high
2.0 0.10 entry barriers. In recent years, Wah Seong has made inroads into the engineering
1.8
0.00
business with the fabrication of gas compressors through GSI International. After
Volume 10m (R.H.S ca le ) Wa h S e ong Corp Bhd completing works in Turkmenistan, the company is now eyeing more pipe coating jobs
Source: Bloomberg in Australia.

Financial tables

Revenue 2,343 1,950 1,373 1,639 1,713 Revenue growth (%) 19.8 (16.8) (29.6) 19.4 4.5
Net interest & invt income (25) 40 (39) (40) (41) Effective tax rates (%) 13.0 16.1 16.0 16.0 16.0
Tax (20) (40) (11) (25) (33)
Net profit 116 121 52 107 138
Adj. wt. shares (m) 652 681 724 724 724

Fixed assets 1,164 975 681 753 619 Order book (RM m) 1,500 1,500 1,500 1,500
Intangible assets 60 61 62 63 65 Overseas rev contribution (%) 74.0% 74.0% 70.0% 70.0%
Other long-term assets 33 33 34 35 37 Number of oil & gas plants 10 10 10 10
Total non-current assets 1,257 1,069 777 851 721 O&G contribution to order book (%) 85.0% 85.0% 85.0% 85.0%
Cash and equivalents 167 433 702 722 967 Oil & gas plants' utilisation (%) 94.0% 94.0% 94.0% 94.0%
Stocks 109 114 120 126 258
Total current liabilities 757 778 800 825 1,088
NTA/share (RM) 0.53 0.54 0.45 0.51 0.55

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F
30.0
Pretax profit 153 246 67 156 205
Cash tax paid (22) (31) (34) (11) (25)
Others (50) (40) 410 26 192
20.0
Capex (500) (60) (59) (58) (57)
Others (18) (18) (17) (16) (15)

5.0
Change in cash 15 267 268 20 245

MALAYSIA
WCT Bhd RM3.00 @07/12/10
Moving to higher ground in 2011 Target: RM4.34
Construction
WCT MK / WCTE.KL Sharizan Rosely +60 (3) 2084 9864 – sharizan.rosely@cimb.com
• Top construction pick. WCT’s upbeat view on its outlook in 2011 ties in with our
overall positive stance on the construction sector. Locally, it will be driven by the
implementation of mega jobs and focus projects under the government’s Economic
Transformation Programme (ETP). The group is also optimistic about its prospects
in the Middle East (ex-Dubai) and long-term positive on its positioning in Vietnam.
Order book replenishment potential remains good, with RM2bn targeted for 2011.
We reiterate our OUTPERFORM rating while raising our RNAV-based target price
from RM4.21 to RM4.34 as we apply our revised target market P/E of 14.5x (prev.
13.8x) to its construction net profit component. The main potential re-rating catalyst
is contract awards. WCT is one of our top picks for the construction sector.
• 2010 target for new jobs in the bag; RM2bn in 2011. In 2010, the group clinched
four jobs worth slightly over RM2bn, meeting its target. The outstanding order book
stands at RM3.9bn with a roughly equal split between local and overseas jobs. The
RM1.4bn Qatar government building project which was secured recently is a
significant milestone for the group as it represents the biggest open tender
overseas job awarded to a local contractor. The recently clinched RM486m new
LCCT was another milestone that will boost the group’s recurring income base.
Financial summary
FYE Dec 2008 2009 2010F 2011F 2012F
Revenue (RM m) 3,711.5 4,666.6 3,087.0 3,597.4 3,619.1
EBITDA (RM m) 292.9 359.6 425.2 476.7 494.8
EBITDA margins (%) 7.9% 7.7% 13.8% 13.3% 13.7%
Net profit (RM m) 101.3 143.9 151.2 180.8 187.7
EPS (sen) 12.9 18.4 19.3 23.1 23.9
EPS growth (%) (39.7%) 42.0% 5.1% 19.5% 3.8%
P/E (x) 23.2 16.3 15.6 13.0 12.5
Core EPS (sen) 21.9 18.4 19.3 23.1 23.9
Core EPS growth (%) 1.9% (16.0%) 5.1% 19.5% 3.8%
Stock Information
Core P/E (x) 13.7 16.3 15.6 13.0 12.5
RM2.48 Gross DPS (sen) 8.8 10.0 10.0 10.0 10.0
No. of shrs (m): 786 P/BV (x) 2.6 2.3 2.1 1.8 1.6
- EPF 20.5 EV/EBITDA (x) 9.9 7.9 6.8 6.0 5.8
- WCT Capital 22.0 % change in EPS estimates N/A N/A N/A

3.5
1.40 WCT made its debut on the Second Board on 16 Feb 95 and was elevated to the
3.3
1.20
Main Board on 7 Jan 99. Today, it is a well-diversified group with businesses in civil
3.1 1.00
2.9
0.80
engineering, building & infrastructure construction, property development, property
2.7
0.60
investment and toll highway concession. The group is one of the highly regarded
0.40
2.5
0.20
contractors in the Gulf region. Over the past 28 years, WCT has completed over 300
2.3
0.00
projects worth RM9.5bn. The construction business is the biggest earnings
Volume 10m (R.H.S ca le ) WCT Bhd contributor, accounting more than 60% of earnings, followed by property at 30%.
Source: Bloomberg

Financial tables

Others (70) 0 0 0 0 Stock turnover (days) 0.1 0.1 0.1 0.1 0.1
Tax (13) 5 (71) (81) (83)
Net profit 101 144 151 181 188
Adj. wt. shares (m) 784 784 784 784 784

Fixed assets 305 258 198 125 38 Construction margins (%) 9.0% 10.0% 12.0% 12.5%
Intangible assets 0 0 0 0 0 Orderbook replenishment (RM m) 500 1,700 1,000 1,000
Cash and equivalents 865 924 954 1,033 1,086
Stocks 1 1 1 1 1
Trade debtors 1,227 1,396 1,380 1,608 1,618
Trade creditors 842 957 946 1,103 1,109
Other current liabilities 851 949 953 1,109 1,117
Long-term borrowings 831 873 916 962 1,010
Total long-term liabilities 866 898 946 991 1,042
NTA/share (RM) 1.15 1.29 1.44 1.63 1.83

(RM m, FYE Dec) 2008 2009 2010F 2011F 2012F 23.0
Pretax profit 158 208 285 325 332
21.0
Cash tax paid (47) (66) (56) (70) (80) 17.0

Others (30) 47 23 18 13
15.0
Capex (76) (79) (82) (84) (87) 13.0
11.0
Others 0 0 0 0 0

5.0
Cash interest & others 166 (19) (1) 0 15
Cash flow from financing 683 (47) (11) (12) 9

MALAYSIA
NEUTRAL Maintained
Wellcall Holdings RM1.19 @07/12/10
Overstretched by rubber Target: RM1.28
Ind Goods & Services - Others
WELL MK / WELL.KL Nigel Foo +60(3) 2084 9293 – nigel.foo@cimb.com
• Maintain NEUTRAL. Despite its high dividend yields, Wellcall remains a NEUTRAL
as there are no re-rating catalysts in sight. Although we continue to value the stock
at a 40% discount to Top Glove’s target P/E, our target price rises from RM1.22 to
RM1.28 as we are raising Top Glove’s CY12 target P/E from 13.8x to 14.5x, in line
with the revision of our target market P/E. For exposure to small-cap stocks in the
rubber sector, we prefer glove producers, Latexx and Adventa.
• Raw material price at record high. Rubber prices are at all-time highs. The price
of SMR20 climbed 30% in the past three months to reach above the RM13/kg in
November, even higher than the 2008 peak of RM10.50/kg. As there is a 2-3
months lag before Wellcall is able to pass on the cost rise to its customers, more
margin erosion can be expected for 1QFY9/11. The margin deterioration could
continue if raw material costs continue to trend higher. Our current forecast for the
average SMR20 price is RM10/kg for FY11-12 compared with an average of
RM9.50/kg in FY10.
• Strong demand. Demand remains strong, with an order backlog of 2-3 months for
extrusion hoses and around two months for mandrel. The company is already
operating on two shifts to meet demand. But Wellcall is concerned that if raw
material prices stay high, orders may slow down as customers fear that they could
be caught with high-priced inventory when prices come off eventually.
• Balance sheet is healthy. With RM40m net cash as at end-Sep, the company is
able to pay out most of its earnings as dividends. In FY10, the net dividend payout
ratio was 99%. Wellcall is looking at a major expansion in the long term. Land,
factory and machinery capex could be around RM20m. Funding of the capex is not
a concern in view of its net cash.
Financial summary
FYE Sep 2009 2010 2011F 2012F 2013F
Revenue (RM m) 79.0 96.6 117.6 130.5 144.9
EBITDA (RM m) 16.3 18.6 25.3 28.5 29.7
EBITDA margins (%) 20.6% 19.3% 21.5% 21.8% 20.5%
EPS (sen) 10.3 11.1 12.7 14.5 15.2
Market cap: RM157m/US$50m EPS growth (%) (22.8%) 7.4% 14.5% 14.5% 4.8%
RM1.13 Gross DPS (sen) 14.7 14.7 15.2 17.4 18.3
No. of shrs (m): 132 P/BV (x) 1.9 2.0 2.0 1.9 1.9
Major shareholders (%): P/FCFE (x) 6.7 10.1 (560.1) 10.1 9.6
- Maximum Perspective S/B 11.3 EV/EBITDA (x) 6.8 6.3 5.2 4.7 4.6
- PTB Ventures Sdn. Bhd. 10.9 % change in EPS estimates - - -
- Chew Chee Chek 9.6 CIMB/Consensus (x) 1.00 1.04 1.01

1.6 1.80
1.60
Wellcall Holdings is Malaysia’s largest industrial rubber hose exporter, producing two
1.5
1.40 main products – mandrel and extrusion hoses. Its products are in a niche market
1.4 1.20
1.3
1.00 segment as they are made to order. Exports to markets like Asia, the Middle East,
1.2
0.80
0.60
Europe and the US make up more than 90% of its sales. Asia remains its largest
1.1
0.40
0.20
export market, with the Middle East coming in second. Wellcall has more than 130
1.0
0.00
customers in over 50 countries. Its customers are mainly involved in the distribution of
Volume 1m (R.H.S ca le ) We llca ll Holdings Bhd rubber hoses to OEM producers. Its dividend yields are among the highest in our
Source: Bloomberg stock coverage.

Financial tables

Tax (1) (1) (5) (6) (6)
Net profit 13 15 17 19 20
Adj. wt. shares (m) 128 132 132 132 132

Stocks 10 11 11 12 13
NTA/share (RM) 0.63 0.59 0.60 0.61 0.63

(RM m, FYE Sep) 2009 2010 2011F 2012F 2013F 14.0

12.0
Cash tax paid (1) (2) (5) (6) (6)
Others (1) (1) 1 0 0
11.0
Capex (5) (2) (15) (5) (5) 10.0
Others 0 0 0 0 0 9.0

8.0
7.0
Change in cash 15 (2) (15) (2) (2)
Change in net cash/(debt) 15 (2) (15) (2) (2)

MALAYSIA
Xingquan International RM1.53 @07/12/10
Full of sole Target: RM3.04
Retail
XISH MK / XING.KL Nigel Foo +60(3) 2084 9293 – nigel.foo@cimb.com
• Maintain OUTPERFORM. Xingquan remains an OUTPERFORM with an

unchanged target price of RM3.04, based on 6x CY12 P/E. The stock offers one of
the most attractive valuations in our regional footwear coverage as it is trading at
huge discounts of 70-80% to its bigger peers. Potential re-rating catalysts for
Xingquan include better-than-expected trade fair orders and sharp declines in raw
material prices.
• Indirect play on consumer spending in China’s second-tier cities. Xingquan is
an indirect play on China’s consumer market. Its “Addnice” brand is strong in
China’s second- and third-tier cities whose growth is expected to outpace first-tier
cities.
• First-mover advantage in outdoor wear. Xingquan has established itself as one
of China’s top shoe brands in outdoor wear with its “Addnice” brand. Due to stiff
competition in the sports shoe market in China, the company diversified into the
casual outdoor wear a few years ago. This has given the company first-mover
advantage as many sport shoe companies in China have only just started to
diversify into other markets such as casual or outdoor wear.
• New capacity by early-2011. Xingquan’s new shoe factory, once ready by early
2011, will boost its annual production capacity to 10m pairs of shoes and 28m pairs
of shoe soles. Its existing capacity is 6m pairs of shoes and 14m pairs of soles.
• TDR expected to be completed by end-FY. Xingquan has proposed a Taiwan
Depositary Receipts (TDR) programme involving the issue of 46.1m new Xingquan
shares amounting to 15% of its existing share capital. Assuming completion of the
exercise by end-FY11, FY12 EPS dilution would be around 12%.
Financial summary
FYE Jun 2009 2010 2011F 2012F 2013F
Revenue (RM m) 434.2 609.3 762.5 880.0 1,002.9
EBITDA (RM m) 119.1 136.5 186.8 201.8 218.5
EBITDA margins (%) 27.4% 22.4% 24.5% 22.9% 21.8%
Net profit (RM m) 92.2 105.2 137.7 148.5 161.9
EPS (sen) 42.9 34.2 44.8 48.3 52.7
Market cap: RM470m/US$150m P/E (x) 3.6 4.5 3.4 3.2 2.9
No. of shrs (m): 307 ROE (%) 84.0% 44.5% 33.6% 27.9% 24.4%
Conv. secs (m): None P/FCFE (x) 3.3 7.1 (15.4) 5.0 4.3
- Tai Zhen Xiang Hldgs 58.4 % change in EPS estimates - - -
- Koon Yew Yin 15.0 CIMB/Consensus (x) 0.51 0.47 0.47

2.0
1.9
5.00 Listed in 2009, Xingquan International is the first foreign IPO in Bursa Malaysia. Its
1.8
1.7
4.00 founder and executive chairman Wu Qingquan set up his shoe operations in Jinjiang,
1.6
1.5
3.00 China in 1995. The company produces and distributes shoe soles and shoes under
1.4
1.3
2.00 the “Addnice” brand and outsources the production of apparel and accessories. From
1.2
1.1
1.00 producing just sports shoes, the company diversified into the outdoor market a few
1.0
0.00
years ago and is now one of the top outdoor wear brands in China, competing with
Volume 1m (R.H.S ca le ) Xingqua n Inte rna tiona l brands such as Timberland, North Face and Columbia. Currently, Xingquan has a
Source: Bloomberg distribution network of around 2,000.

Financial tables

Revenue 434 609 763 880 1,003 Revenue growth (%) 32.5 40.3 25.2 15.4 14.0
Net interest & invt income (2) 0 3 2 3 Effective tax rates (%) 16.8 19.2 25.1 25.0 25.0
Tax (19) (25) (46) (49) (54)
Net profit 92 105 138 148 162
Adj. wt. shares (m) 215 307 307 307 307

Fixed assets 32 79 219 262 306 Number of points of sales 2,000 2,400 2,883 2,884
Intangible assets 5 7 7 7 7 Footwear (Rmb/pair) 88 89 93 95
Other long-term assets 0 0 0 0 0 Apparel (Rmb/piece) 44 44 44 44
Total non-current assets 37 86 226 269 313 Footwear sales (m pairs) 7.2 9.0 10.0 12.0
Cash and equivalents 104 281 230 302 386 Apparel sales (m pieces) 8.0 12.0 13.0 14.0
Stocks 20 19 42 51 61
NTA/share (RM) 0.54 1.12 1.50 1.91 2.36

(RM m, FYE Jun) 2009 2010 2011F 2012F 2013F 6.0
Pretax profit 111 130 184 198 216
5.5
Cash tax paid (17) (23) (5) (46) (49)
Others 2 0 (3) (2) (3) 4.5

Capex (5) (56) (146) (49) (49)
Others 0 (1) 0 0 0
3.0
2.0
Dividends paid (70) (7) (21) (22) (24) Jul-09 Nov-09 Mar-10 Jul-10 Nov-10
Change in cash 56 192 (51) 73 84

MALAYSIA
YTL Power International RM2.44 @07/12/10
All eyes on Yes Target: RM2.97
IPP
YTLP MK / YTLP.KL Ivy Ng Lee Fang CFA +60(3) 2084 9697 – ivy.ng@cimb.com
• Reiterate OUTPERFORM. YTL Power remains an OUTPERFORM as we like its i)

multi-utility focus and ii) still-sizeable cash hoard in excess of RM7.8bn. We retain
our SOP-based target price of RM2.97 and see potential share price triggers in i)
good response for its WiMax service, Yes, ii) potential M&As and/or higher yields
from its burgeoning cash pile and iii) positive earnings surprises from PowerSeraya.
• Balancing core assets ... 2011 could finally see a win-win conclusion to the long-
drawn PPA talks for its local power plants based on recently set deadlines. While
there could be risk to Wessex Water’s translated earnings because of the weak £,
this will be cushioned by PowerSeraya’s strong showing where margins are set to
expand further with the commission of its new cogen plant in Oct 10.
• ... with upside from Yes? Strong take-up and better awareness of Yes would be
positive as we believe that the market does not fully appreciate the potential of YTL
Power’s WiMAX venture given the limited details. We think that Yes’s product
flexibility, bundling proposition and rebate for higher data usage could appeal.
• RM7.8bn cash pile. YTL Power’s cash pile settled at RM7.8bn as at end-Sep 10.
We expect this cash hoard to diminish as YTL Power channels cash to the
enhancement of its WiMAX network and adds on hybrid TV for its eventual quad
play offering. Having said that, we still believe that the group has sufficient funds to
at least sustain dividend yields of 7-8% and/or snap up assets.
Financial summary
FYE Jun 2009 2010 2011F 2012F 2013F
Revenue (RM m) 6,093.4 13,442.9 13,240.1 13,430.8 13,576.6
EBITDA (RM m) 2,482.7 2,875.5 2,989.9 3,015.3 3,115.9
EBITDA margins (%) 40.7% 21.4% 22.6% 22.5% 23.0%
Net profit (RM m) 646.6 1,212.1 1,251.5 1,314.5 1,377.0
EPS (sen) 10.9 16.7 17.3 18.1 19.0
EPS growth (%) (45.3%) 52.9% 3.2% 5.0% 4.8%
P/E (x) 22.3 14.6 14.1 13.5 12.8
Core EPS (sen) 18.4 16.7 17.3 18.1 19.0
Core EPS growth (%) (7.8%) (9.2%) 3.2% 5.0% 4.8%
Core P/E (x) 13.2 14.6 14.1 13.5 12.8
Stock Information FD core EPS (sen) 14.1 15.4 15.8 16.6 17.4
Market cap: RM17,729m/US$5,652m FD core P/E (x) 17.4 15.9 15.4 14.7 14.0
No. of shrs (m): 7,266 ROE (%) 10.4% 18.1% 16.9% 17.3% 17.6%
Conv. secs (m): 1,202 P/FCFE (x) (5.2) (9.7) (22.0) 320.2 87.5
- YTL Corporation 52.0 % change in EPS estimates - - -

2.8 Established in Oct 96, YTL Power is the global utilities arm of YTL Corp. Over the
2.7 3.00
2.6 2.50
years, the group has evolved from just a local power play with two power generating
2.5
2.4
2.00 assets into a global multi-utility group. YTL Power currently owns power plant assets
2.3
1.50
1.00
in Malaysia, Indonesia and Singapore as well. It has exposure to water concession
2.2
2.1 0.50 assets in the UK through Wessex Water and a 33.5% stake in Electranet, which owns
2.0
0.00
and operates a power transmission network in Australia. The group recently launched
Volume 10m (R.H.S ca le ) YTL P owe r Inte rna tiona l its presence within the telco arena with the rollout of its WiMAX network, Yes. By end-
Source: Bloomberg 2011, it will emerge as a quad play with the offering of hybrid TV as well.

Financial tables

Tax (740) (482) (498) (523) (548)
Net profit 647 1,212 1,251 1,314 1,377
Adj. wt. shares (m) 5,910 7,247 7,247 7,247 7,247

Fixed assets 17,283 15,949 16,313 16,538 16,248 Average capacity utilisation (%) 71.8% 71.8% 71.8% 71.8%
Intangible assets 6,332 6,149 5,964 5,785 5,612 Capacity (MW) 4,739 4,739 4,739 4,739
Other long-term assets 1,875 1,811 1,947 2,090 2,243
Stocks 859 593 618 628 631
Trade debtors 2,353 2,008 2,104 2,134 3,534
NTA/share (RM) (0.04) 0.16 0.21 0.27 0.32

(RM m, FYE Jun) 2009 2010 2011F 2012F 2013F 15.0
Pretax profit 1,387 1,694 1,749 1,837 1,925
Working capital changes 2,031 (855) 132 34 0
Cash tax paid (347) (740) (482) (498) (523) 13.0
Others (2,409) 941 89 198 313
Capex (8,566) (1,387) (1,435) (1,478) (1,478)
11.0
Others 0 0 0 0 0
10.0
Debt raised/(repaid) 5,355 (1,432) (734) 4 12
9.0
Cash interest & others (675) 3,793 (2) (2) (2)
Cash flow from financing 3,905 1,368 (1,729) (991) (982)
Change in cash (3,458) 1,707 (1,007) (222) (64)
Change in net cash/(debt) (8,813) 3,140 (273) (226) (76)
The S.E.A. Navigator – Malaysia (2011) [ 205 ]

APPENDICES…

Malaysia Earnings Summary
No. Mkt Mkt Mkt FD Core EV/EBITDA
Price as at of Cap Cap Cap FD Core P/E (x) EPS growth (%) Div yld (%) P/BV (x) Core ROE (%) (x)
07-Dec-10 Stocks (RM m) (%w t) (%wt) 2010 2011F 2012F 2011F 2012F 2011F 2012F 2010E 2011F 2011F 2012F 2012F
Automobiles and Parts 3 14,274 1.9% 1.9 11.5 9.8 8.7 17.1 14.1 < 4.5 4.7 1.7 1.5 15.5 16.0 4.5
Av iation 2 14,153 1.9% 1.9 1.4 9.7 4.8 93.7 114.0 < 0.0 0.0 1.8 1.5 17.2 27.8 4.2
Conglomerates 1 52,523 6.9% 6.9 18.0 16.3 14.6 10.0 12.1 < 4.1 4.6 2.4 2.2 13.9 14.4 9.0
Construction and Materials 8 29,003 3.8% 3.8 25.6 20.7 15.7 26.8 31.9 < 3.0 3.1 3.0 2.9 15.2 16.7 14.4
Consumer 11 39,109 5.2% 5.2 18.9 18.2 17.5 5.2 4.3 < 5.4 5.5 13.6 12.3 71.0 66.0 11.5
Financial Serv ices 10 176,085 23.2% 23.2 14.5 12.4 11.0 16.6 13.6 < 5.6 6.4 2.7 2.4 20.1 20.4 14.3
Forestry and Paper 1 163 0.0% 0.0 5.3 4.1 3.2 31.7 27.1 < 6.8 8.7 0.4 0.4 10.6 12.3 0.7
Industrial Goods and Serv ices 9 9,357 1.2% 1.2 11.9 10.2 8.7 17.0 16.8 < 3.9 4.7 2.7 2.1 25.5 23.9 5.0
Media 3 6,331 0.8% 0.8 13.6 12.4 10.8 9.9 14.5 < 5.3 5.5 3.4 2.8 25.1 24.1 5.6
Oil and Gas 1 11,623 1.5% 1.5 13.7 12.2 11.1 11.6 10.4 < 7.3 7.3 1.8 1.7 14.3 14.3 6.3
Oil Equipment and Serv ices 5 11,911 1.6% 1.6 20.9 16.4 14.6 37.0 12.7 < 2.4 2.7 5.9 5.6 39.7 42.3 9.5
Plantations 4 70,842 9.3% 9.3 21.4 18.4 16.8 16.5 9.5 < 3.7 4.1 3.3 3.0 17.1 16.8 10.7
Property 4 11,681 1.5% 1.5 22.2 18.8 17.1 17.9 10.9 < 3.4 3.6 1.5 1.4 8.8 9.1 12.0
Technology 5 5,520 0.7% 0.7 11.9 10.7 9.0 9.5 21.0 < 6.2 7.1 2.4 2.2 20.5 22.1 5.8
Telecommunications 4 111,120 14.7% 14.7 16.6 18.0 15.5 3.8 12.1 < 6.4 7.1 5.5 5.6 36.5 42.0 6.9
Serv ices 1 877 0.1% 0.1 8.5 7.4 6.2 14.7 18.2 < 6.8 8.0 2.2 1.7 26.4 24.2 2.4
Shipping 2 42,028 5.5% 5.5 29.8 24.6 21.6 20.4 15.2 < 5.3 5.6 1.7 1.6 6.9 7.9 11.9
Transport Infrastructure 3 31,437 4.1% 4.1 17.5 14.3 13.7 23.7 2.8 < 5.7 5.4 3.4 3.4 24.7 26.2 8.9
Trav el and Leisure 4 65,296 8.6% 8.6 15.8 13.8 12.2 15.2 13.0 < 1.7 1.8 3.0 2.6 19.4 18.8 5.3
Utilities 3 55,572 7.3% 7.3 13.9 13.5 12.6 3.7 8.2 < 4.2 4.3 1.6 1.5 11.8 12.1 6.8
Overall * 84 758,028 100.0% 100.0 16.7 15.3 13.7 10.2 12.7 < 4.9 5.1 3.5 3.3 22.5 23.4 8.4
KLCI ** 24 647,599 16.6 15.5 13.9 8.1 12.2 < 5.1 5.2 3.4 3.2 22.1 23.3 8.2
Notes:
1) Dividend yields are computed on gross basis
2) * Based on CIMB's coverage
3) ** Based on index components in CIMB's coverage

Malaysia Earnings Guide
Div Net Avg.
Latest Net Profit (RM m) FD Core EPS (sen) FD Core P/E (x) P/BV PEG Yield gearing Market Free Daily
Prices as at Bloomberg Price Actual (x) (x) (%) (%) cap. float T/o.
07-Dec-10 Rec. Code (RM) FY FY2010 FY2011 FY2012 FY2010 FY2011 FY2012 FY2010 FY2011 FY2012 FY2010 FY2010 FY2011 FY2010 (RM m) (RM m) (m)
Automobiles and Parts

Proton Holdings Bhd TB PROH MK 4.84 Mar 10 219 361 399 41.2 65.7 72.6 11.7 7.4 6.7 0.5 0.4 2.1 cash 2,658 890 0.3
Tan Chong Motor Holdings Bhd O TCM MK 5.44 Dec 09 274 343 477 40.8 51.0 70.9 13.3 10.7 7.7 2.1 0.4 2.4 7.2 3,656 1,353 0.5
UMW Holdings Bhd O UMWH MK 6.91 Dec 09 653 737 771 58.3 65.8 68.9 11.8 10.5 10.0 1.9 1.4 6.4 1.2 7,960 2,388 2.4
Aviation
AirAsia Bhd O AIRA MK 2.61 Dec 09 1,914 888 1,339 27.5 35.1 48.3 9.5 7.4 5.4 1.6 0.3 0.0 137.2 7,235 5,064 9.6
Malay sian Airline Sy stem Bhd O MAS MK 2.07 Dec 09 92 709 1,734 -27.3 17.1 50.3 n.m. 12.1 4.1 2.0 n.m. 0.0 27.4 6,918 1,038 2.7
Conglomerates
Sime Darby Bhd TB SIME MK 8.74 Jun 10 727 2,943 3,479 48.2 49.0 57.9 18.1 17.8 15.1 2.6 1.9 3.8 12.1 52,523 20,011 5.9
Construction and Materials
Gamuda Bhd O GAM MK 3.76 Jul 10 281 335 459 13.7 16.3 22.1 27.4 23.1 17.0 4.1 1.0 3.2 60.9 7,687 6,102 8.1
IJM Corp Bhd O IJM MK 6.14 Mar 10 333 378 393 20.0 25.9 27.0 30.8 23.7 22.8 3.6 1.9 1.7 91.1 8,295 5,574 3.6
Lafarge Malay an Cement Bhd U LMC MK 7.40 Dec 09 298 435 457 35.0 51.2 53.8 21.1 14.4 13.7 2.0 0.9 5.7 cash 6,288 1,920 0.8
Malay sian Resources Corp Bhd TB MRC MK 2.01 Dec 09 51 66 80 3.8 4.9 5.9 53.4 41.3 34.1 3.6 2.1 0.5 26.6 2,776 1,613 5.8
MTD ACPI Engineering U ACP MK 0.51 Mar 10 -19 -18 11 -8.0 -7.9 4.9 n.m. n.m. 10.5 0.7 n.m. 1.8 2.5 118 30 0.6
Muhibbah Engineering TB MUHI MK 1.36 Dec 09 32 53 60 7.9 13.3 15.1 17.1 10.3 9.0 0.9 0.4 2.2 45.8 542 395 8.3
Tasek Corporation Bhd O TC MK 7.59 Dec 09 121 131 102 66.7 79.4 82.4 11.4 9.6 9.2 1.1 1.0 1.6 cash 938 111 0.0
WCT Bhd O WCT MK 3.00 Dec 09 151 181 188 18.3 22.6 23.8 16.4 13.3 12.6 2.1 1.2 3.3 30.1 2,359 1,205 2.5
Consumer
Asia File Corporation O AF MK 4.45 Mar 10 58 66 75 51.2 58.6 66.6 8.7 7.6 6.7 1.6 0.6 7.4 cash 514 206 0.0
British American Tobacco Bhd U ROTH MK 45.48 Dec 09 730 749 766 255.6 262.5 268.4 17.8 17.3 16.9 24.8 7.2 7.1 90.3 12,986 3,896 0.1
Carlsberg Brew ery (M) Bhd N CAB MK 6.05 Dec 09 132 142 153 43.1 46.5 49.9 14.0 13.0 12.1 3.3 1.8 6.1 cash 1,864 559 0.2
Cocoaland Holdings N COLA MK 2.34 Dec 09 20 32 34 15.2 24.2 25.6 15.4 9.7 9.1 2.4 0.5 5.1 4.0 402 161 0.1
Fraser & Neav e Holdings Bhd U FNH MK 16.26 Sep 10 695 267 275 82.2 74.9 77.1 19.8 21.7 21.1 4.4 n.m. 3.3 cash 5,832 1,243 0.1
Guinness Anchor Bhd N GUIN MK 9.96 Jun 10 153 171 177 50.5 56.5 58.6 19.7 17.6 17.0 6.4 2.6 6.5 cash 3,009 903 0.1
JT International Bhd N RJR MK 6.03 Dec 09 115 123 128 43.8 47.1 48.9 13.8 12.8 12.3 4.2 2.5 5.0 cash 1,577 473 0.0
Nestle (Malay sia) Berhad U NESZ MK 43.50 Dec 09 436 457 479 185.9 195.0 204.3 23.4 22.3 21.3 14.0 4.8 4.7 15.5 10,201 2,024 0.0
Pelikan International Corp Bhd N PELI MK 1.21 Dec 09 65 76 100 12.7 22.3 29.4 9.5 5.4 4.1 0.7 0.2 1.5 45.2 620 217 0.5
QSR Brands N QSR MK 5.63 Dec 09 110 125 133 33.6 38.1 40.6 16.8 14.8 13.9 3.5 1.7 2.7 40.8 1,635 688 1.5
Xingquan International O XISH MK 1.53 Jun 10 105 138 148 34.2 44.8 48.3 4.5 3.4 3.2 1.3 0.2 4.4 cash 470 146 0.3
[ continued on the following page… ]

[ continued from the previous page… ]
Div Net Avg.
Financial Services
Affin Holdings Bhd O AHB MK 3.20 Dec 09 474 546 598 31.7 36.6 40.0 10.1 8.8 8.0 0.9 0.8 3.8 cash 4,783 1,100 0.5
Alliance Financial Group U AFG MK 3.08 Mar 10 301 417 467 19.5 26.9 30.2 15.8 11.4 10.2 1.6 0.6 3.8 cash 4,768 3,099 1.6
AMMB Holdings Bhd O AMM MK 6.26 Mar 10 1,009 1,403 1,770 33.4 46.6 58.7 18.7 13.4 10.7 2.0 0.6 3.5 cash 18,869 11,321 3.8
Bursa Malay sia Bhd N BURSA MK 7.96 Dec 09 118 152 167 22.6 29.0 32.0 35.3 27.4 24.9 4.9 1.9 4.4 cash 4,230 2,538 0.9
EON Capital Bhd O EON MK 6.96 Dec 08 480 531 590 69.2 76.6 85.1 10.1 9.1 8.2 1.2 0.9 3.9 cash 4,825 2,509 0.2
Hong Leong Bank Bhd U HLBK MK 9.40 Jun 09 957 1,046 1,121 60.6 66.2 70.9 15.5 14.2 13.3 2.5 1.9 2.6 cash 14,853 4,010 0.3
Kurnia Asia Bhd U KUAB MK 0.35 Dec 09 32 36 37 2.2 2.4 2.5 16.2 14.7 14.1 1.6 2.2 0.0 cash 525 197 0.8
Malay an Banking Bhd O MAY MK 8.41 Jun 10 3,818 4,533 5,084 53.8 63.9 71.7 15.6 13.2 11.7 2.1 1.0 7.1 cash 59,526 30,358 9.0
Public Bank Bhd O PBK MK 12.80 Dec 09 3,027 3,525 4,150 85.1 99.8 117.5 15.0 12.8 10.9 3.5 0.9 5.7 cash 45,209 33,906 1.7
RHB Capital Bhd O RHBC MK 8.59 Dec 09 1,455 1,701 1,956 67.6 79.0 90.9 12.7 10.9 9.5 1.9 0.8 3.7 cash 18,498 3,237 2.7
Forestry and Paper
Eksons Corporation Bhd O EKSON MK 1.00 Mar 10 17 35 42 10.6 21.3 25.6 9.4 4.7 3.9 0.5 0.2 5.9 cash 163 49 0.1
Industrial Goods and Services
Adv enta Bhd O ADV MK 2.13 Oct 09 34 43 57 22.3 28.3 37.2 9.6 7.5 5.7 1.3 0.3 2.8 35.7 325 162 0.2
Ann Joo Resources TB AJR MK 2.94 Dec 09 132 158 225 16.8 20.1 28.7 17.5 14.6 10.3 1.6 0.6 5.8 81.7 1,537 581 0.4
Daibochi Plastic & Packaging Bhd O DPP MK 2.45 Dec 09 18 25 29 24.3 33.3 38.6 10.1 7.4 6.3 1.3 0.4 9.3 3.4 186 93 0.1
Hartalega Holdings O HART MK 5.39 Mar 10 143 185 216 40.0 50.8 59.3 13.5 10.6 9.1 5.5 0.6 3.2 cash 1,959 738 0.2
Kossan Rubber Industries Bhd O KRI MK 3.34 Dec 09 119 145 170 37.1 45.3 53.3 9.0 7.4 6.3 2.3 0.5 3.0 26.8 1,068 388 0.5
Latex x Partners O LTX MK 2.67 Dec 09 81 96 104 29.6 34.8 37.9 9.0 7.7 7.0 2.4 0.7 4.1 12.5 584 377 1.2
Tomy pak Holdings O TOMY MK 1.00 Dec 09 16 25 27 14.5 23.0 25.3 6.9 4.3 4.0 1.2 0.2 8.5 8.1 109 43 0.3
Top Glov e Corporation O TOPG MK 5.55 Aug 10 245 276 303 39.7 44.6 49.0 14.0 12.4 11.3 3.1 1.3 3.2 cash 3,432 1,899 1.1
Wellcall Holdings Bhd N WELL MK 1.19 Sep 10 15 17 19 11.1 12.7 14.5 10.7 9.4 8.2 2.0 0.7 12.8 cash 157 47 0.2
Media
Media Chinese International Ltd O MCIL MK 0.88 Mar 10 134 151 167 7.8 9.0 9.9 11.3 9.8 8.9 1.2 0.9 5.7 cash 1,482 741 0.6
Media Prima Bhd N MPR MK 2.34 Dec 09 158 182 207 14.7 16.9 19.2 15.9 13.9 12.2 6.0 1.1 4.0 15.9 2,345 917 1.2
Star Publications Bhd O STAR MK 3.39 Dec 09 184 193 230 25.0 26.2 31.2 13.6 12.9 10.9 2.3 1.2 6.2 cash 2,504 1,905 0.6
Oil and Gas
Petronas Dagangan Bhd O PETD MK 11.70 Mar 10 753 884 972 75.8 89.0 97.9 15.4 13.2 12.0 1.9 1.1 7.3 cash 11,623 2,811 0.3
Oil Equipment and Services
Dialog Group Bhd U DLG MK 1.60 Jun 10 116 131 150 5.9 6.6 7.6 27.3 24.3 21.1 5.2 2.0 2.5 cash 3,181 1,866 7.8
Kencana Petroleum Bhd O KEPB MK 2.01 Jul 10 136 213 271 10.1 12.9 16.3 19.9 15.6 12.3 10.7 0.7 1.2 3.8 3,335 1,777 9.3
Petra Perdana TB PETR MK 0.77 Dec 09 -40 32 42 -7.9 5.2 7.2 n.m. 14.7 10.6 0.4 n.m. 2.6 25.1 347 211 4.1
SapuraCrest Petroleum O SCRES MK 2.82 Jan 10 170 213 272 13.4 16.8 21.4 21.1 16.8 13.2 4.2 0.8 2.8 19.4 3,600 1,013 1.9
Wah Seong Corp Bhd N WSC MK 2.00 Dec 09 52 107 138 6.1 12.7 16.2 32.6 15.8 12.3 3.7 0.5 2.8 cash 1,448 763 0.7

Div Net Avg.
Plantations
Hap Seng Plantations Holdings TB HAPL MK 3.15 Dec 09 163 187 187 20.4 23.4 23.3 15.4 13.5 13.5 1.5 2.2 5.9 0.0 2,520 861 1.7
IOI Corporation Bhd N IOI MK 5.78 Jun 10 2,036 2,091 2,346 24.0 29.4 34.3 24.1 19.7 16.8 3.5 1.2 3.5 8.0 38,698 22,739 7.6
Genting Plantations Bhd N GENP MK 8.68 Dec 09 326 377 397 43.4 49.9 52.5 20.0 17.4 16.5 2.3 2.0 1.0 cash 6,587 2,135 0.7
Kuala Lumpur Kepong Bhd TB KLK MK 21.58 Sep 10 1,012 1,143 1,265 94.8 107.1 118.5 22.8 20.2 18.2 3.8 1.9 4.0 6.8 23,037 9,745 0.8
Property
Eastern & Oriental Bhd O EAST MK 1.14 Mar 10 71 45 70 6.4 5.7 8.0 17.9 20.0 14.3 0.8 1.5 3.3 36.2 940 631 2.8
KLCC Property Holdings Bhd U KLCC MK 3.53 Mar 10 897 259 282 19.1 20.4 22.2 18.5 17.3 15.9 0.6 2.3 4.2 16.2 3,297 1,563 0.7
SP Setia Bhd O SPSB MK 5.24 Oct 10 252 283 364 21.1 27.9 35.8 24.8 18.8 14.6 2.4 1.0 4.5 26.5 5,674 2,930 2.1
Sunw ay City O SCITY MK 4.50 Dec 09 398 202 232 27.7 34.2 39.0 16.3 13.1 11.5 0.9 0.9 2.2 1.9 2,115 741 0.7
Services
Masterskill Education Group O MASEG MK 2.14 Dec 09 104 119 141 25.3 29.0 34.3 8.5 7.4 6.2 2.2 0.5 6.8 cash 877 359 2.6
Shipping
Malay sian Bulk Carriers Bhd U MBC MK 2.97 Dec 09 213 214 318 21.3 21.4 31.8 14.0 13.9 9.3 1.6 0.6 5.5 cash 2,970 921 0.4
MISC Bhd U MISC MK 8.75 Mar 10 682 1,331 1,603 23.3 29.8 35.9 37.5 29.4 24.4 1.7 1.6 5.3 20.5 39,058 6,640 1.7
Technology
JCY International Bhd U JCYH MK 0.80 Sep 10 176 169 225 9.3 8.3 11.0 8.6 9.7 7.3 1.9 1.0 5.2 24.5 1,636 393 6.3
JobStreet Corp Bhd O JOBS MK 2.88 Dec 09 38 46 52 11.9 14.8 16.5 24.1 19.5 17.4 6.2 1.4 3.3 cash 916 142 0.1
Malay sian Pacific Industries Bhd O MPI MK 5.45 Jun 10 105 94 123 54.0 48.3 63.3 10.1 11.3 8.6 1.4 1.2 6.1 9.1 1,144 240 0.1
Uchi Technologies Bhd O UCHI MK 1.34 Dec 09 45 49 54 12.1 13.2 14.5 11.1 10.2 9.3 2.9 1.2 10.5 cash 503 133 0.5
Unisem (M) Berhad O UNI MK 1.96 Dec 09 179 204 232 22.5 25.4 28.7 8.7 7.7 6.8 1.2 0.7 6.8 29.4 1,321 466 1.4
Telecommunications
Ax iata Group Berhad O AXIATA MK 4.67 Dec 09 2,745 3,075 3,304 32.5 36.4 39.1 14.4 12.8 11.9 2.0 1.5 2.4 26.3 39,439 15,046 18.1
DiGi.com Bhd N DIGI MK 24.80 Dec 09 1,159 1,299 1,451 149.1 167.1 186.6 16.6 14.8 13.3 16.9 1.4 6.7 60.9 19,282 9,151 0.3
Max is Berhad N MAXIS MK 5.36 Dec 09 2,320 2,545 2,779 30.9 33.9 37.0 17.3 15.8 14.5 4.7 1.8 10.0 57.0 40,200 12,060 4.2
Telekom Malay sia Bhd TB T MK 3.41 Dec 09 970 613 717 16.2 7.3 10.1 21.0 46.5 33.8 1.7 n.m. 7.6 37.0 12,199 4,244 6.5
Transport Infrastructure
Bintulu Port Holdings Bhd N BPH MK 6.60 Dec 09 143 150 157 35.8 37.5 39.3 18.5 17.6 16.8 3.2 3.8 8.3 cash 2,640 571 0.0
Malay sia Airports Holdings Bhd O MAHB MK 6.27 Dec 09 375 414 390 34.1 37.7 35.4 18.4 16.6 17.7 2.0 9.6 4.0 35.6 6,897 2,069 0.5
PLUS Ex pressw ay s Bhd O PLUS MK 4.38 Dec 09 1,282 1,669 1,763 25.6 33.4 35.3 17.1 13.1 12.4 3.9 1.0 5.9 57.5 21,900 10,359 5.2

Div Net Avg.
Travel and Leisure

Berjay a Sports Toto Bhd N BST MK 4.25 Apr 10 382 332 373 28.3 25.0 27.6 15.0 17.0 15.4 12.9 n.m. 6.7 40.5 5,742 2,010 1.4
Genting Bhd O GENT MK 10.70 Dec 09 2,230 2,974 3,459 65.7 80.3 93.4 16.3 13.3 11.5 2.5 0.8 0.7 cash 39,729 19,865 7.1
Genting Malay sia Bhd N GENM MK 3.34 Dec 09 1,230 1,403 1,531 22.7 23.8 25.9 14.7 14.1 12.9 1.8 2.1 2.4 cash 19,756 9,878 5.5
RGB International Bhd U RGB MK 0.06 Dec 09 -39 5 8 -3.7 0.4 0.8 n.m. 13.5 7.9 0.8 n.m. 0.0 232.6 69 17 0.4
Utilities
Puncak Niaga Holdings Bhd N PNH MK 2.54 Dec 09 193 249 331 47.0 60.5 80.4 5.4 4.2 3.2 0.6 0.2 5.3 40.4 1,044 638 0.2
Tenaga Nasional Bhd TB TNB MK 8.44 Aug 10 3,202 2,982 3,110 63.5 63.0 69.4 13.3 13.4 12.2 1.3 2.9 2.7 44.8 36,799 13,244 7.9
YTL Pow er International O YTLP MK 2.44 Jun 10 1,212 1,251 1,314 15.4 15.8 16.6 15.9 15.4 14.7 2.4 n.m. 7.2 187.7 17,729 3,546 7.2
Note:
1) Dividend yield is gross.
O = Outperform, N=Neutral, U = Underperform, TB = Trading Buy, TS = Trading Sell and NR = Not Rated

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(i) As of 13 December 2010, CIMB has a proprietary position in the following securities in this report:
(a) Proton Holdings, Proton Holdings CW, Tan Chong, Tan Chong CW, UMW Holdings, UMW Holdings CW, AirAsia, AirAsia CW, MAS, MAS CW, Sime Darby,
Sime Darby CW, Gamuda, Gamuda CW, IJM Corp, IJM Corp CW, MRCB, MRCB CW, Mudajaya, WCT, WCT CW, Malayan Banking, Maybank CW, Public
Bank, Public Bank CW, AMMB Holdings, AMMB Holdings CW, Affin Holdings, Affin Holdings CW, Hong Leong Bank, Hong Leong Bank CW, RHB Capital,
RHB Capital CW, Bursa Malaysia, Bursa Malaysia CW, Hartalega, Hartalega CW, Supermax, Supermax CW, Top Glove, Top Glove CW, Kencana
Petroleum, Kencana Petroleum CW, SapuraCrest Petroleum, SapuraCrest Petroleum CW, Petronas Dagangan, Petra Perdana, Petra Perdana CW, Wah
Seong, Wah Seong CW, IOI Corp, IOI Corp CW, KLK, KLK CW, SP Setia, SP Setia CW, Maybulk, MISC, MISC CW, JCY, JCY CW, Unisem, Unisem CW,
Axiata, Axiata CW, DiGi, DiGi CW, Maxis, Maxis CW, Telekom Malaysia, Telekom Malaysia CW, Malaysia Airport Holdings, Malaysia Airport Holdings CW,
PLUS Expressways, Berjaya Sports Toto, Berjaya Sports Toto CW, Genting, Genting CW, Genting Malaysia, Genting Malaysia CW, Tenaga Nasional,
Tenaga Nasional CW, YTL Power, YTL Power CW.
(ii) As of 17 December 2010, the analyst, Terence Wong / Kelvin Goh / Ivy Ng / Raymond Yap / Nigel Foo / Winson Ng / Sharizan Rosely / Norziana Mohd Inon / Loke
Wei Wern who prepared this report, has / have an interest in the securities in the following company or companies covered or recommended in this report:
(a) -.
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RECOMMENDATION FRAMEWORK #1*
STOCK RECOMMENDATIONS SECTOR RECOMMENDATIONS

OUTPERFORM: The stock's total return is expected to exceed a relevant OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is
benchmark's total return by 5% or more over the next 12 months. expected to outperform the relevant primary market index over the next 12
months.
NEUTRAL: The stock's total return is expected to be within +/-5% of a relevant NEUTRAL: The industry, as defined by the analyst's coverage universe, is
benchmark's total return. expected to perform in line with the relevant primary market index over the next
12 months.
UNDERPERFORM: The stock's total return is expected to be below a relevant UNDERWEIGHT: The industry, as defined by the analyst's coverage universe,
benchmark's total return by 5% or more over the next 12 months. is expected to underperform the relevant primary market index over the next 12
months.
TRADING BUY: The stock's total return is expected to exceed a relevant TRADING BUY: The industry, as defined by the analyst's coverage universe, is
benchmark's total return by 5% or more over the next 3 months. expected to outperform the relevant primary market index over the next 3
months.
TRADING SELL: The stock's total return is expected to be below a relevant TRADING SELL: The industry, as defined by the analyst's coverage universe,
benchmark's total return by 5% or more over the next 3 months. is expected to underperform the relevant primary market index over the next 3
months.
* This framework only applies to stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand and Jakarta Stock Exchange. Occasionally, it is permitted for the total expected returns to be
temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.
CIMB Research Pte Ltd (Co. Reg. No. 198701620M)
RECOMMENDATION FRAMEWORK #2 **
STOCK RECOMMENDATIONS SECTOR RECOMMENDATIONS

OUTPERFORM: Expected positive total returns of 15% or more over the next OVERWEIGHT: The industry, as defined by the analyst's coverage universe,
12 months. has a high number of stocks that are expected to have total returns of +15% or
better over the next 12 months.
NEUTRAL: Expected total returns of between -15% and +15% over the next NEUTRAL: The industry, as defined by the analyst's coverage universe, has
12 months. either (i) an equal number of stocks that are expected to have total returns of
+15% (or better) or -15% (or worse), or (ii) stocks that are predominantly
expected to have total returns that will range from +15% to -15%; both over the
next 12 months.
UNDERPERFORM: Expected negative total returns of 15% or more over the UNDERWEIGHT: The industry, as defined by the analyst's coverage universe,
next 12 months. has a high number of stocks that are expected to have total returns of -15% or
worse over the next 12 months.
TRADING BUY: Expected positive total returns of 15% or more over the next 3 TRADING BUY: The industry, as defined by the analyst's coverage universe,
months. has a high number of stocks that are expected to have total returns of +15% or
better over the next 3 months.
TRADING SELL: Expected negative total returns of 15% or more over the next TRADING SELL: The industry, as defined by the analyst's coverage universe,
3 months. has a high number of stocks that are expected to have total returns of -15% or
worse over the next 3 months.
** This framework only applies to stocks listed on the Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the
prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.

CIMB INVESTMENT BANK – ANALYSTS’ COVERAGE
TOH Hoon Chew, CFA (Reg. Head of Research) Winson NG, CFA TEE Sze Chiah
+60 (3) 2084-9684 – hoonchew.toh@cimb.com +60 (3) 2084-9686 – winson.ng@cimb.com +60 (3) 2084-9620 – szechiah.tee@cimb.com
Terence WONG, CFA (Head of Research) Financial Services Industrial
+60 (3) 2084-9689 – terence.wong@cimb.com Affin Holdings Imaspro (Bursa scheme)
Strategy Alliance Financial Group Retail Research
Property AMMB Holdings Retail Technicals
Eastern & Oriental Bursa Malaysia KONG Seh Siang
KLCC Property EON Capital +60 (3) 2084-9289 – sehsiang.kong@cimb.com
Mah Sing (Bursa scheme) Hong Leong Bank Retail Technicals
SP Setia Kurnia Asia
Malayan Banking LOKE Wei Wern
Sunway City +60 (3) 2084-9946 - weiwern.loke@cimb.com
UM Land (Bursa scheme) Public Bank
RHB Capital Breweries
Kelvin GOH, CFA Carlsberg Brewery (M)
+60 (3) 2084-9699 – kelvin.goh@cimb.com Norziana Mohd INON Guinness Anchor
Telecommunications +60 (3) 2084-9645 – norziana.inon@cimb.com Motor
Axiata Group Food & Beverage Proton
DiGi.com C.I. Holdings (Bursa scheme) Tan Chong
Maxis F&N Holdings Bhd UMW
Telekom Malaysia Nestle Malaysia Tobacco
QSR Brands BAT
Ivy NG, CFA Oil & Gas
+60 (3) 2084-9697 – ivy.ng@cimb.com JT International
Alam Maritim (Bursa scheme) Transport Infrastructure
Conglomerates Dialog
Sime Darby Bintulu Port
Kencana Malaysia Airports Holdings
Gaming Petronas Dagangan
Berjaya Sports Toto Petra Perdana YEOH Yung Juen
Genting SapuraCrest Petroleum +60 (3) 2084-9911 – yungjuen.yeoh@cimb.com
Genting Malaysia Wah Seong Building Materials
RGB International Ann Joo Resources
Plantations Sharizan ROSELY Lafarge Malayan Cement
Genting Plantations +60 (3) 2084-9864 – sharizan.rosely@cimb.com Tasek Corporation
Hap Seng Plantations Education Industrial
IOI Corp Masterskill Adventa
KL Kepong Infrastructure Hartalega Holdings
Utilities Cahya Mata Sarawak (Bursa scheme) Kossan Rubber Industries
Tenaga Nasional Gamuda Latexx Partners
YTL Power IJM Supermax (Bursa scheme)
MRCB Top Glove
Nigel FOO Mudajaya (Bursa scheme)
+60 (3) 2084-9293 – nigel.foo@cimb.com Muhibbah Engineering Jonathan NG
Mid-small Caps PLUS Expressways +65 6210-8650 – jonathan.ng@cimb.com
Asia File Puncak Niaga Technology
Cocoaland WCT Engineering JCY International
Daibochi Plastic Media
Eksons Corporation Media Chinese International
Lingui (Bursa scheme) Media Prima
MTD-ACPI Engineering Star Publications
Pelikan International Corporation Simeon KOH
Tomypak +60 (3) 2084-9807 – simeon.koh@cimb.com
Wellcall Holdings Technology
Retail JobStreet
Xingquan International MPI
Regional Technicals Uchi Technologies
Raymond YAP, CFA Unisem
+60 (3) 2084-9769 – raymond.yap@cimb.com
Aviation
AirAsia
MAS
Shipping
Maybulk
MISC
CIMB INVESTMENT BANK – ECONOMICS RESEARCH

LEE Heng Guie (Head of Economics) Julia GOH (Senior Manager) Kenneth WONG (Assistant Manager)
+60 (3) 2084-9667 – hengguie.lee@cimb.com +60 (3) 2084-9698 – julia.goh@cimb.com +60 (3) 2084-8940 – kenneth.wong@cimb.com
LOKE Siew Ting (Executive)
+60 (3) 2084-9867 – siewting.loke@cimb.com

CIMB SECURITIES OFFICES
CIMB Investment CIMB Securities (S) PT CIMB Securities CIMB Securities CIMB Securities CIMB Securities CIMB Securities
Bank Bhd Pte Ltd Indonesia (HK) Limited (Thailand) Co Ltd (UK) Ltd (USA) Inc
(18417-M) (198701621D) (01.353.099.3-054.000) (290697) (0105542081800) (2719607) (52-1971703)
(A Participating Organisation of 50 Raffles Place #19-00 The Jakarta Stock 25th Floor 44 CIMB Thai Bank 27 Knightsbridge 540 Madison Avenue
Bursa Malaysia Securities Bhd)
10th Floor Singapore Land Tower Exchange Building Central Tower Building London SW1X 7YB 11th Floor
Bangunan CIMB Singapore 048623 Tower II, 20th Floor 28 Queen’s Road 24-25th Floor United Kingdom New York
Jl. Jend. Sudirman Central, Hong Kong Soi Langsuan N.Y. 10022
Jalan Semantan
Kav. 52-53 Lumpini, Patumwan USA
Damansara Heights
Jakarta 12190 Bangkok 10330
50490 Kuala Lumpur
Indonesia Thailand
Malaysia
T: +60 (3) 2084 8888 T: +65 6225-1228 T: +62 (21) 515-1330 T: +852 2868-0380 T: +66 (2) 657-9000 T: +44 (20) 7201-2199 T: +1 (212) 616 8600
F: +60 (3) 2084 8899 F: +65 6224-6906 F: +62 (21) 515-1335 F: +852 2537-1928 F: +66 (2) 657-9111 F: +44 (20) 7201-2191 F: +1 (212) 616 8639

2010 12 17 (CIMB) MY Strategy 2011 MAL-NAV-2011-171210

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The S.E.A.

Navigator – Malaysia 2011 [ 1 ]

The S.E.A. Navigator – Malaysia 2011 [ 2 ]

• Significant trading catalysts. The KLCI confounded sceptics in 2010 when it

Terence WONG, CFA +60 (3) 2084-9689 – terence.wong@cimb.com

Figure 1: Top picks

The S.E.A. Navigator – Malaysia 2011 [ 3 ]

V-shaped recovery so far

Figure 2: YTD, 2-year and 3-year performance of various indices

Figure 3: Monthly cross-border net buying/(selling) of Malaysian equities (US$ m)

Source: EPFR, CIMB Research

The S.E.A. Navigator – Malaysia 2011 [ 4 ]

Source: CIMB estimates

Figure 5: Revisions up/revisions down (x)

Source: CIMB estimates

Figure 6: Performance of indices in 2010

The S.E.A. Navigator – Malaysia 2011 [ 5 ]

Figure 7: Four pillars of national transformation

Source: NEM For Malaysia Part 1

Figure 8: KLCI and various events in 2010

23/09 -FTSE Ups Status To Advanced Emerging

20/01-Obama To Propose New Limits On

Source: Bloomberg, CIMB Research

The S.E.A. Navigator – Malaysia 2011 [ 6 ]

Foreign funds boost

Figure 9: Aggregate EM Asia weightings in Malaysia

Source: EPFR, CIMB Research

Figure 10: Month-end aggregate holdings by country (US$ m)

Figure 11: Foreign ownership in Malaysia

Source: Bursa, CIMB Research

The S.E.A. Navigator – Malaysia 2011 [ 7 ]

Figure 12: Foreign shareholdings

The S.E.A. Navigator – Malaysia 2011 [ 8 ]

Figure 13: By-elections since Mar 2008

Figure 14: General and Umno party elections since 1990

1,600 General Election General Election

Source: www.UMNO-online.com, www.spr.gov.my, CIMB Research

The S.E.A. Navigator – Malaysia 2011 [ 9 ]

Figure 17: Companies perceived to have strong political ties

The S.E.A. Navigator – Malaysia 2011 [ 10 ]

Figure 18: Parliamentary elections

Figure 19: Votes for ruling coalition in parliamentary elections

Source: Press reports, Election Commission, CIMB Research

Figure 20: Voter turnout in parliamentary elections

Source: Press reports, Election Commission, CIMB Research

The S.E.A. Navigator – Malaysia 2011 [ 11 ]

Figure 21: The economy is back on the growth track

% pt contribution Domestic demand Net exports % yoy

The S.E.A. Navigator – Malaysia 2011 [ 12 ]

Figure 23: Private sector spending to underpin growth

After a sharp contraction of 17.2% in 2009, private investment rebounded by an

Figure 24: Private investment to drive growth

% yoy Private investment Public investment

The S.E.A. Navigator – Malaysia 2011 [ 13 ]

Figure 25: Private investment to drive growth

The S.E.A. Navigator – Malaysia 2011 [ 14 ]

Figure 26: No change in interest rates in 1H11

% yoy Inflation OPR (RHS) % p.a.

Source: Source: BNM, DOS, CIMB Research

LEE Heng Guie +60 (3) 2084-9667 – hengguie.lee@cimb.com

The S.E.A. Navigator – Malaysia 2011 [ 15 ]

Risk of a double dip

Corporate earnings risks