Watch of day

STOCK FOCUS OF THE DAY
CB Industrial Product : Contract flow to pick up in 2H2009 BUY



Maintain BUY with higher fair value of RM4.15/share based on FY10F PE of 8x instead of FY09F PE of 7x. Although CBIP’s Modipalm mill, which uses horizontal continuous sterilisation method has been facing competition from vertical sterilisation mills, we understand that the latter is not as effective as horizontal sterilises. We understand that CBIP is targeting to receive RM300mil to RM400mil contracts this year versus our assumption of RM200mil. Contract flow was slow in the first half of this year due to a few reasons. CBIP’s Modipalm mill recently has a new Zero Waste Discharge composting plant, which replaces the effluent treatment pond. In view of growing compliance for sustainable palm oil or RSPO (Roundtable for Sustainable Palm Oil) guidelines, we believe that there would be increasing demand for this system. Conventional mills can also use the Zero Waste Discharge System, as it is not patented. But with conventional mills, the Zero Waste Discharge System would be more difficult and less efficient to implement, as there are certain processes in Modipalm mills that conventional mills do not have.



Others :
Keppel Corporation : Road bumps along path to recovery BUY
Economic Update : V-shaped recovery for E&E?



QUICK TAKES
Dialog Group : Another tank project on the way HOLD
Steel Sector : June local steel prices up another RM100/tonne OVERWEIGHT



NEWS HIGHLIGHTS
Public Bank : Sells RM1.2bil of debt
MAS : To partner Turkish Airlines
BCHB : AA-IS for CIMB Islamic sukuk
PLUS Expressways : Offers 50,000 PLUSMiles cards with free RM5 paid-up value