Corporate Highlights

CIMB : Record earnings Outperform

3QFY09 Results/Briefing Update

- 3QFY09 results above expectations. Record quarter – CIMB Niaga and treasury the star, stable consumer bank and higher China contributions. Only setback was the higher provision for non-ASEAN loans in the corporate and IB division.

- Asset quality improved slightly. On track to hit FY09 KPIs.

- Corporatisation of bad bank soon, will be positive to CIMB Bank.

- Potential of more non-recurring sale as part of capital management.

- Has excess capital but premature to provide higher dividend guidance, next year would be better timing.

- Still unclear impact from FRS139 and Basel II IRB approach but indications from earlier meetings suggest positive to capital ratios.

- FY09-11 forecasts raised by 9-10%, consequently, FY09 ROE was raised from 13.8% to 15.1%.

- Maintain Outperform. Fair value raised from RM13.50 to RM14.70 based on unchanged 17x CY10 EPS.



Hartalega : 6MFY10 net profit up 90.3% yoy Outperform (up from UP)

2QFY10 Results

- 2QFY03/10 net profit came in above our and consensus expectations with 6M net profit of RM59.5m (+90.3% yoy) accounting for 57.5% and 56.3% of our and consensus estimates respectively. The key variances were: 1) stronger-than-expected demand due to the tight supply of gloves in the market as a resuly of the H1N1 virus; and 2) better-than-expected margins resulting from operating leverage effects from the higher utilisation rate.

- Hartalega declared a first interim single-tier of 5 sen (2Q09: gross DPS of 2 sen and 2 sen tax-exempt). This translates to a net yield of 0.9%.

- Qoq, sales volume grew 5% qoq thanks to a combination of stronger demand and higher selling prices, while 2Q earnings grew 25.6% largely due to the expansion in EBIT margin of 4.4%-pts qoq.

- We have revised our FY10-12 revenue forecasts by 4.6-5.4%. We have also raised our FY10-12 EBITDA projections by 18.6-30.1% to reflect the better-than-expected margins achieved by Hartalega thus far. As a result, our FY10-12 earnings projections have been raised by 14.2-27.0%.

- We have also raised our target CY10 PER to 11x (from 9.5x) to reflect the stronger earnings growth now projected. Our indicative fair value has been raised to RM6.23 from RM4.47 (based on CY10 PER of 9.5x) and subsequently, have upgraded our call on the stock to Outperform from Underperform.



MRCB : Venturing into a small property project in Australia Trading Buy

News Update

- MRCB has subscribed to a 70% stake in Yes 88 for A$6.6m (RM20m) that owns a piece of land measuring 1.24 acres 15km from Melbourne City Centre, planned for the development of two 4-storey residential properties with a total GDV of A$54.8m (RM170m).

- Assuming a PBT margin of 20%, MRCB’s share of PBT from the venture is projected at RM23.8m over the project period.

- We are maintaining our forecasts that assume MRCB's property profits to be underpinned by recurring sales at its existing projects, particularly, KL Sentral, as well as contributions from new property ventures such as the latest one.

- If MRCB is to bag two prime federal land parcels in KL as reported, its valuation can be enhanced by 69sen per share. Fair value is RM1.71. Maintain Trading Buy.