STOCK FOCUS OF THE DAY

DiGi.Com : Result inline,special dividend of 75 sen/share HOLD



DiGi.Com Bhd (DiGi) posted 3Q09 core earnings of RM244mil (+4% QoQ), bringing 9M2009 core earnings to RM754mil (-12% YoY). This made up 70%-72% of ours as well as market estimates - for FY09F earnings. Subscriber base grew 9% YoY and 2% QoQ to 7.4 million in 3Q09. DiGi also managed to capture some 200,000 3G services subscribers, including 25,000 mobile broadband subscribers. After having grown by an average of 9% between 2Q08-2Q09, postpaid subscribers’ growth decelerated to a marginal 2% QoQ in 3Q09. We see Celcom’s renewed focus on the low-income segment as a possible disruption to DiGi’s market share. 3Q09’s blended ARPU of RM55/mth was higher by 2% QoQ but lower by 7% YoY. DiGi also declared net special dividend of 75 sen/share (FY08: 78 sen/share). We expect DiGi to declare a FY09F’s dividend of 165 sen/share (payout: 122%) on back of steady annual FCF generation of RM1.2bil. We believe DiGi will continue its proactive dividend initiatives. We reaffirm our HOLD call with unchanged fair value of RM22.80/share, at parity to our DCF/share estimate (WACC: 10.3%, TG: 3%).



Others :
Economic Update : OPR set to stay low until mid-2010
Auto Sector : NAP review: Not sexy enough OVERWEIGHT



QUICK TAKES
Tenaga Nasional : RM1.2bil job from Petronas Gas HOLD
SP Setia : Challenging maiden venture into China SELL
WCT Bhd : Enters into JV to develop 1Medini BUY
Tobacco Sector: Minimum pricing come 1 January 2010 NEUTRAL
Oil & Gas Sector: MMC AMEC awarded Malikai engineering job OVERWEIGHT



NEWS HIGHLIGHTS
WCT : To develop RM600 million 1Medini condos
CIMB Group : Bank CIMB Niaga 9-month profit gains 19% to 1.15 trillion rupiah
Fraser and Neave Holdings : Invests US$43mil in Vietnam glass plant



AmFraser Research
Capitaland Ltd : Every 10% above CMA book value is an extra 17c BUY
Land Transport Sector : Public transport ridership growth slower than expected OVERWEIGHT