• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Consumer confidence
 

Consumer confidence

on

  • 1,933 views

Spend a little to make a bundle ...

Spend a little to make a bundle
 We maintain a selective Overweight call on the Consumer sector, mainly on market-leaders who continue to thrive even in the face of a domestic consumption slowdown.
 AEON Co, AEON Credit Services
 Top Buys are KFC and QL. Investors seeking liquid defensive plays should also be attracted to BAT’s earnings resilience and high dividend yield. , KFC Holdings and QL Resources are on track to continue posting >10% net growth rates in 2009-10, defying conventional logic and market expectations.
Reaping the fruits of disciplined ‘labour.’ AEON Co, AEON Credit Services
Sector Summary Table , KFC Holdings and QL Resources are expected to register double-digit net profit growth in 2009-10. For AEON Co and KFC, their less-than-one-year-old stores will contribute new sources of revenue and profits, even though existing stores, opened for more than one full calendar year, may not cumulatively register meaningful sales growth. AEON Co’s niche of providing comfortable one-stop shopping malls in many suburban areas continues to differentiate itself from other retailers domestically, whilst KFC continues to thrive as the most popular choice of fast food. Reaping the rewards of painstaking integration. In addition to the slew of growth activities at its Integrated Farming business, the integrated nature of QL Resources’ Marine Products business cushions fluctuating product prices. Although surimi (semi-processed fish paste) prices have fallen back to just above 2007-08 levels, this has instead made fishmeal and surimi-based products more affordable and encourages volume sales and margins for these products. Reaping the benefits of significant relationships. In AEON Credit Service’s case, despite the recent decline in motorcycle sales and relative uncertainty in 2009’s GDP growth prospects, its existing loans book, riding on 3-4 year loans profile, provides an earnings buffer against significant slow down in loans growth over the next 6-12months. Further, significant synergies with sister company AEON Co is expected to start showing with the likely combining of the latter’s privilege card (J Card) with the former’s credit cards. Currently, there are at least 10 times as many J Card holders as there are AEON Credit credit card holders. When growth and value come together. While we remain cautious of the broader market over the next few quarters, we continue to like the long-term value offered by our selection of four compelling growth stocks. Arguably, these three stocks offer the relative security of growing steadily within the generally defensive Consumer sector.

Statistics

Views

Total Views
1,933
Views on SlideShare
1,933
Embed Views
0

Actions

Likes
0
Downloads
32
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Consumer confidence Consumer confidence Document Transcript

    • Equity Research PP11072/03/2010 (023549) EQUITY FOCUS 9 April 2009 Consumer Sector Overweight (Unchanged) Spend a little to make a bundle Vincent Khoo, CFA  We maintain a selective Overweight call on the Consumer sector, vincentkhoo@maybank-ib.com mainly on market-leaders who continue to thrive even in the face of a (603) 2297 8684 domestic consumption slowdown.  AEON Co, AEON Credit Services, KFC Holdings and QL Resources are on track to continue posting >10% net growth rates in 2009-10, defying conventional logic and market expectations.  Top Buys are KFC and QL. Investors seeking liquid defensive plays should also be attracted to BAT’s earnings resilience and high dividend yield. Reaping the fruits of disciplined ‘labour.’ AEON Co, AEON Credit Services, KFC Holdings and QL Resources are expected to register double-digit net profit growth in 2009-10. For AEON Co and KFC, their less-than-one-year-old stores will contribute new sources of revenue and profits, even though existing stores, opened for more than one full calendar year, may not cumulatively register meaningful sales growth. AEON Co’s niche of providing comfortable one-stop shopping malls in many suburban areas continues to differentiate itself from other retailers domestically, whilst KFC continues to thrive as the most popular choice of fast food. Reaping the rewards of painstaking integration. In addition to the slew of growth activities at its Integrated Farming business, the integrated nature of QL Resources’ Marine Products business cushions fluctuating product prices. Although surimi (semi-processed fish paste) prices have fallen back to just above 2007-08 levels, this has instead made fishmeal and surimi-based products more affordable and encourages volume sales and margins for these products. Reaping the benefits of significant relationships. In AEON Credit Service’s case, despite the recent decline in motorcycle sales and relative uncertainty in 2009’s GDP growth prospects, its existing loans book, riding on 3-4 year loans profile, provides an earnings buffer against significant slow down in loans growth over the next 6-12months. Further, significant synergies with sister company AEON Co is expected to start showing with the likely combining of the latter’s privilege card (J Card) with the former’s credit cards. Currently, there are at least 10 times as many J Card holders as there are AEON Credit credit card holders. When growth and value come together. While we remain cautious of the broader market over the next few quarters, we continue to like the long-term value offered by our selection of four compelling growth stocks. Arguably, these three stocks offer the relative security of growing steadily within the generally defensive Consumer sector. Sector Summary Table Company Rec Price TP EPS (sen) EPS Grth (%) PE (x) DPS (sen) Yield (%) PBV (RM) (RM) 09F 10F 09F 10F 09F 10F 09F 10F 09F 10F 09F AEON Co Buy 3.80 4.70 37.8 41.8 10.1 10.1 10.2 9.3 13.0 14.0 3.4 3.6 1.4 AEON Credit Services Buy 2.52 3.15 45.3 52.6 20.4 16.1 5.5 4.7 11.4 13.8 3.5 4.2 1.2 KFC Holdings Buy 6.95 7.90 67.7 75.4 9.0 11.5 10.2 9.1 47.0 52.4 6.8 7.6 1.8 QL Resources Buy 2.46 3.80 32.6 38.1 17.0 17.0 7.5 6.5 9.5 11.5 3.9 4.7 0.5 BAT Hold 45.75 44.75 294.2 304.3 3.5 3.4 15.5 15.0 380.5 393.6 8.3 8.6 27.1 JT International Hold 4.52 4.76 40.5 43.2 8.0 6.5 11.2 10.5 128.0 53.5 28.3 11.8 2.4 Nestle Hold 28.75 29.50 152.8 162.3 5.1 6.2 18.8 17.7 189.4 201.2 6.6 7.0 14.9 Fully F&N Holdings 8.55 6.70 53.7 53.6 10.9 -0.1 15.9 15.9 27.4 29.5 3.2 3.5 2.4 Valued Source: Maybank-IB
    • Consumer Sector AEON Co: New stores fuel growth, +10% YoY earnings intact Expect minimal same-store sales growth in 2009. Market sources and leading indicators in 1Q09 suggest that major grocery retailers’ same-store sales growth was flat or minimal. This is in line with our overall view that GDP growth, on a quarterly basis, could be at its weakest in 1Q09, especially in view of the high base in 1Q08 (see Chart 1). But, expect double-digit revenue growth for AEON Co in 2009, due to new stores (less than 1-year old) from 1Q08 (5 stores altogether). In fact, each of the next four quarters (1Q09-4Q09) will continue to see initial contributions from at least two malls that were opened within the last year (see Chart 2). Even in the seasonally weakest 2Q of the year, Aeon Co’s retail sales growth should be secured by full-year contributions of a MaxValu supermarket and three Jusco departmental store outlets. Similarly, its property income growth is expected to be fuelled by three ‘new’ AEON malls in 2H09. Chart 1: Malaysia’s Real GDP Growth (YoY), 1Q05A-4Q10F 10.0 7.3 7.4 8.0 6.7 6.7 6.0 5.9 5.6 5.9 5.9 5.7 5.6 5.3 5.5 6.0 4.7 4.3 3.4 4.0 3.0 2.5 2.7 2.0 1.0 0.1 0.0 (0.4) 1Q09F 3Q09F 1Q10F 3Q10F 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 (2.0) (1.6) (4.0) (4.0) (6.0) Source: Maybank-IB Chart 2: AEON Co’s new store contributions in 2009 1Q09 2Q09 3Q09 4Q09 MaxValu Desa Park City, Selangor MaxValu Kota Kemuning, Selangor AEON Seberang Prai, Penang AEON Ampang Utara, Selangor AEON Bukit Indah, Johor AEON Melaka Utara Source: Maybank-IB A recession may be on the cards in 2009, but private consumption, according to our Economics Team, should continue to post positive growth in both 2009 and 2010, albeit at a slower pace (2008A: +8.4%, 2009F: +2%, 2010: +3.8%). In short, while the overall economy may contract, total private consumption (mainly consumer spending) should remain positive, albeit in the 2-4% p.a growth region, compared to 6-12% p.a. growth achieved in 2004-08. EQUITY FOCUS ▪ 9 April 2009 Page 2 of 10
    • Consumer Sector Our 2009-11 forecasts for AEON Co already reflect conservative growth estimates, and are in line with actual annual growth in retail sales and property income (see Chart 3). For instance, in spite of an increasing number of new stores opened each year up to and including 2008, we are expecting a slowdown in growth from 2009. In fact, we are only expecting one new mall by end-3Q09 and another two by end-4Q09. Similarly, although capex assumptions in 2010 and 2011 fall to only RM200m p.a. from 2008’s high of RM448m, this is matched by no new store contributions in the corresponding years. Maintain Long-term Buy. Given its penchant for growth and the perceived lack of modern, one-stop shopping malls in Malaysia, we expect AEON Co to comfortably match, if not better our 2009-11 forecasts of just over 10% p.a. net profit growth, whilst maintaining a 20-25% pay-out of net profits in dividends. Our TP of RM4.70 is based on 11x 2010 PER, at a discount to leading Consumer sector heavyweights in the higher teens PER-band range. Chart 3: Malaysia’s Private vs. Public Consumption Split, 2004A-2010F Private Consumption Expenditure (RM b) (LHS) Other Components (RM b) (LHS) Private Consumption (% YoY) (RHS) 600 12 550 10 500 450 8 400 350 6 300 4 54% 250 54% 52% 50% 200 48% 2 48% 46% 150 100 0 2004 2005 2006 2007 2008 2009F 2010F Source: Maybank-IB Chart 4: AEON Co’s growth in retail sales and property income, 2001-2011F Chg in retail sales (RM m) (LHS) Chg in property income (RM m) (RHS) 1,000 80 70 750 60 50 500 40 30 250 20 10 - 0 * FY01-FY06 is for FY ended 20 Feb, 2006 is for the 10-mth FY ended 31 Dec Source: Maybank-IB EQUITY FOCUS ▪ 9 April 2009 Page 3 of 10
    • Consumer Sector AEON Co: Financial Summary FYE Dec (RM m) FY07A FY08A FY09F FY10F FY11F Turnover 2,886.2 3,433.0 3,791.5 4,110.3 4,293.0 EBITDA 247.3 293.8 338.5 363.3 381.9 Recurring Net Profit 105.2 120.6 132.8 146.2 161.3 Recurring EPS (sen) 30.0 34.4 37.8 41.7 45.9 EPS growth (%) 26.4 14.7 10.1 10.1 10.3 DPS (sen) 17.0 12.0 13.0 14.0 15.0 PE (x) 12.9 11.2 10.2 9.3 8.4 EV/EBITDA (x) 4.7 4.6 4.3 3.5 3.0 Div Yield (%) 2.9 3.1 3.4 3.6 3.9 P/Book Value (x) # 1.7 1.5 1.4 1.2 1.1 Net Gearing (x) Cash Cash 0.0 0.1 Cash ROE (%) 14.0 14.4 14.1 13.8 13.5 ROA (%) 6.1 5.8 5.7 5.6 5.7 Book Value (RM)# 2.3 2.5 2.8 3.2 3.6 Consensus Net Profit (RM m) - - 122.8 133.3 161.0 # 2007 re-based after 1:2 bonus issue in 2007 Source: Maybank-IB AEON Co: Basic assumptions 2007A 2008A 2009F 2010F 2011F Same-store sales growth (%) 7.0 10.0 1.0 3.5 3.5 Total retail sales growth (%) 13.3 18.3 10.2 8.2 3.9 Stores at start of FY 17 21 26 29 30 Jaya Jusco stores 15 18 21 23 24 MaxValu supermarkets 2 3 5 6 6 Malls managed at start of FY 13 15 18 20 21 EBIT Margin Ex.EI (%) 5.5 5.2 5.4 5.5 5.5 Retail 3.5 3.7 3.7 3.7 3.7 Mall management 26.0 20.1 22.0 22.5 22.5 EBIT (RM m) 157.5 178.4 204.9 224.6 224.6 Retail 93.6 116.2 128.1 137.8 143.2 Mall management 63.9 62.2 76.9 86.8 95.2 EBIT breakdown (%) Retail 59.4 65.2 62.5 60.5 63.8 Mall management 40.6 34.8 37.5 39.5 42.4 Source: Maybank-IB EQUITY FOCUS ▪ 9 April 2009 Page 4 of 10
    • Consumer Sector QL Resources: >20% ROEs, +>15% YoY net profit Expect softer growth from Marine Products, from 4QFY09 (FYE Mar) up to FY11, after the ‘supernormal profits’ enjoyed in 1HFY09 when prices of surimi, surimi-based products and fishmeal rose. We have imputed ‘normalised’ sales and profit growth from 2HFY09. QL’s FY09 net profit should meet our expectations (+xx% YoY), despite slower-than-expected surimi exports in 4QFY09, which off-sets increased exports of fishmeal and surimi-based products. More importantly, any further slowdown in surimi sales is expected to be off-set by fattened margins and increased sales for surimi-based products and fishmeal. Lowering FY10-11 earnings forecasts by 6-8%. We have lowered FY10-11 earnings contributions from the Marine Products’ division (which contributes xx- xx% to group pre-tax profit) by xx-xx%. The net result is only a 6-8% reduction to our group net profit forecasts. In fact, the reduction is just as much to do with QL’s recently revealed intention to moderate its RM150m p.a. expansion plans both locally and regionally. Although long-term loans for FY10 and FY11’s new capex plans are available, QL appears to be toning down its immediate overseas expansion as local demand at its Marine Products plant in Surabaya, Indonesia and layer farm in Tay Ninh, Vietnam may still be weak. Chart 5: World fishmeal prices Apr ’84- Feb ’09 Fishmeal prices (USD/MT) 1,500 1,200 900 600 300 Oct-86 Oct-91 Oct-96 Oct-01 Oct-06 Apr-84 Apr-89 Apr-94 Apr-99 Apr-04 Jan-88 Jan-93 Jan-98 Jan-03 Jan-08 Jul-85 Jul-90 Jul-95 Jul-00 Jul-05 Source: Maybank-IB from trade press Graph 6: QL’s five inter-dependent revenue streams in the Marine Products unit Surimi -based Surimi products (Intermediate (Finished good) product) Surimi Fish catch (Finished product) (Raw material) Fishmeal (Finished product) Source: Maybank-IB EQUITY FOCUS ▪ 9 April 2009 Page 5 of 10
    • Consumer Sector FY10-11 earnings growth still in double-digit territory Despite reducing our FY10-11 net profit forecasts by 6-8%, QL is still expected to post a very strong net profit growth trajectory of over 15% p.a. up to FY11. This is before its 74.5%-stake in 10,000ha of Indonesian plantation begins to enter its fourth year or maturity stage, in FY12. No liquidity concerns. Although QL’s net gearing appears relatively high, at an estimated 75% by end-FY09 (i.e. Mar ’09), about half or 55% of its debts (total RM397m as at Dec ‘08) is in the form of bankers’ acceptances which QL uses as an affordable source of funds for its trading of commodity raw materials business. Compelling value. QL is in a sweet spot of growth where scalability over the next three to five years is within grasp. At a target 10x CY10 PER, our TP for QL is RM3.80. This is supported by our DDM-valuation of RM3.73 using a 5% terminal growth rate and 8.5% required equity return. QL Resources – Financial Summary FYE Mar (RM m) FY07A FY08A FY09F FY10F FY11F Turnover 1,120.2 1,310.3 1,542.1 1,669.2 1,891.8 EBITDA 112.9 137.9 171.4 204.6 249.1 Recurring Net Profit 63.2 80.8 97.2 111.5 130.6 Recurring EPS (sen) 19.2 24.5 29.4 33.8 39.6 EPS growth (%) 30.8 27.8 20.3 14.7 17.1 DPS (sen) 4.9 6.5 8.0 10.0 12.0 PER (x) 12.9 10.1 8.3 7.3 6.3 EV/EBITDA (x) 9.5 8.1 7.0 6.0 5.0 Div Yield (%) 2.0 2.6 3.2 4.0 4.8 P/BV (x) 0.8 0.7 0.6 0.5 0.4 Net Gearing (x) 79.4 74.5 75.8 68.8 60.0 ROE (%) 23.1 24.5 24.4 23.4 23.0 ROA (%) 9.4 9.8 9.0 8.2 8.1 Book Value (RM) 2.9 3.6 4.3 5.2 6.1 Consensus Net Profit (RM ) - - 91.8 101.4 125.1 Source: Maybank-IB EQUITY FOCUS ▪ 9 April 2009 Page 6 of 10
    • Consumer Sector AEON Credit: Slower growth as consumers wait-and-see The slowdown in new motorcycle registrations, which will be reflected in AEON Credit’s 4QFY09 (FYE 20 Feb) results, should be within expectations. This is consistent with the 12-month moving average (MA) for new motorcycle registrations over the last few years, which has hovered between 2-13% YoY growth since Apr ’05. As new registrations of 28,031 motorcycles in Jan ’09 are a far cry from the Jan-Nov ’08 average of over 45,000 new registrations monthly, we are lowering our growth forecasts for AEON Credit’s income from Motorcycle Easy Payments (MEP). Nevertheless, the company continues to gain market share in the number of new registrations that it finances. With the average tenure of MEPs estimated at 3-4 years, we believe AEON Credit will be able to regain sales growth momentum in 2HFY10 at latest. To err on the side of caution, we are cutting FY10 and FY11 net profit forecasts by 9% and 10%, even though we believe FY09 could outperform our estimates. Further, AEON Credit could expense some acquisition costs as it approaches the taking over of sister company AEON Co’s privilege card (J Card) operations. We have not imputed any synergistic gains from AEON Credit potentially replacing AEON Co’s J Card with a combined credit card- cum-J Card in 2HFY10. If executed smoothly, this could provide significant upside benefits from FY11 onwards. Still a steal in spite of restricted liquidity. AEON Credit sits in an enviable market niche in which larger financial institutions are less likely to want to compete, while its peers lack the regional nous and track record of the AEON Credit Group, which spans much of Asia. We also see significant synergies from working more closely with its sister company, AEON Co, in Malaysia. Our lowered TP of RM3.15 (from RM3.50) is pegged to 6x CY10 PER, supported by our DDM-valuation of RM2.87 using a 5% terminal growth and 9.2% required equity return. Chart 7: Motorcycle and Motorcar new registrations Dec ’87- Jan ’09 Motorcycles 12-mth MA (m) (LHS) Motorcars 12-mth MA (m) (LHS) Motorcycles 12-mth MA (% YoY) (RHS) Motorcars 12-mth MA (% YoY) (RHS) units % 750,000 100 75 50 500,000 25 0 250,000 -25 -50 0 -75 Dec-87 Dec-90 Dec-93 Dec-96 Dec-99 Dec-02 Dec-05 Dec-08 Source: Maybank-IB EQUITY FOCUS ▪ 9 April 2009 Page 7 of 10
    • Consumer Sector AEON Credit – Financial Summary FYE 20 Feb (RM m) FY07A FY08A FY09F FY10F FY11F Operating Income 141.2 188.2 247.2 298.1 349.8 EBITDA 54.6 78.9 105.2 126.6 149.8 Recurring Net Profit 19.7 33.4 47.1 55.5 64.4 Recurring EPS (sen) 20.1 27.8 39.2 46.3 53.6 EPS growth (%) (64.3) 38.4 41.0 18.0 15.9 DPS (sen) 6.6 12.8 12.0 14.0 17.0 PER^ 12.4 8.9 6.3 5.4 4.6 EV/EBITDA (x) 12.2 10.1 9.0 8.5 8.1 Div Yield (%) ^ 1.7 3.3 3.1 3.6 4.3 P/BV (x)^ 2.3 1.6 1.4 1.1 1.0 Net Gearing (x) 4.0 4.1 2.4 2.2 2.7 ROE (%) 23.6 23.4 23.6 23.2 22.6 ROA (%) 3.4 5.4 7.0 8.3 8.8 Book Value (RM) 1.1 1.5 1.8 2.2 2.6 Consensus Net Profit (RM ) - - 45.3 56.2 66.2 ^ FY07 re-based to current share capital Source: Maybank-IB EQUITY FOCUS ▪ 9 April 2009 Page 8 of 10
    • Consumer Sector KFC: still potentially crunchy returns We maintain our net earnings growth forecasts of 13% and 11% for 2009- 10, which conservatively assume 2-3% annual same store sales (SSS) growth at the Malaysian retail chain and relatively flattish margins. 2009’s core EBIT is expected to grow at about 6% after adjusting for a RM4.5m impairment loss in 2008. Sales trend stabilised in March. We estimate that SSS at KFC’s Malaysian retail chain has stabilised to a low single digit growth in Mar, after contracting in the high teens in Feb. The sharp contraction in Feb was due to seasonality (earlier arrival of the Chinese New Year season this year), price competition from McDonalds, and general consumption slowdown. Margins could be a swing factor. Our forecasts assume that EBIT margin will ease to 7.9% in 2009 (2008: 8.2%) before recovering to 8.3% in 2010. However, changes to raw material cost trends and the Ringgit (as a significant portion of raw materials are imported) will be key factors this year. Nevertheless, we expect margins to pick up after 1Q09 (1Q09 continues to be impacted by a weak Ringgit and subdued consumption trends), when the company begins to realise significant declines in input costs. We note that by end-4Q08, soybean and corn prices had fallen 41% and 46% from their respective peaks in 2008, but the company could only deplete its older inventory (bought at much higher prices) by 1Q09. Potential M&A in the longer term could still add juice to valuations. While soundbites of the potential merger between KFC Berhad and parent QSR Brands seem to have subsided somewhat, we envision that such a merger (probably via a share swap) could still eventually materialise. It still makes good synergistic and administrative sense to merge KFC’s and QSR’s operations, especially when the KFC Cambodian franchise is presently parked in QSR. We expect KFC to benefit from an M&A situation, as QSR (presumably the ‘acquirer’) would need to offer a premium for KFC shares. This could significantly reduce KFC’s present 38% discount to its RNAV of RM11.30. Meanwhile, we maintain our Buy call and RM7.90 target price, which is based on a 30% discount to RNAV. KFC Holdings: Financial Summary FYE Dec (RM m) FY07A FY08A FY09F FY10F Turnover 1,730.4 2,177.4 2,305.4 2,428.2 EBITDA 212.2 234.8 241.7 264.2 Recurring Net Profit 104.3 123.1 134.2 149.6 Recurring EPS (sen) 52.6 62.1 67.7 75.4 EPS growth (%) 7.4 18.1 9.0 11.5 DPS (sen) 20.0 22.0 47.0 52.4 PE (x) 13.2 11.2 10.3 9.2 EV/EBITDA (x) 6.4 5.4 4.9 4.1 Div Yield (%) 2.9 3.2 6.8 7.5 P/Book Value (x) 2.3 2.0 1.8 1.7 Net Gearing (x) Cash Cash Cash Cash ROE (%) 18.4 18.4 18.6 18.9 ROA (%) 13.2 14.0 14.2 14.7 Book Value (RM) 3.0 3.5 3.8 4.2 Consensus Net Profit (RM m) - - 128.7 141.4 Source: Maybank-IB EQUITY FOCUS ▪ 9 April 2009 Page 9 of 10
    • Consumer Sector Definition of Ratings Maybank Investment Bank Research uses the following rating system: STRONG BUY Total return is expected to exceed 20% in the next 12 months; high conviction call BUY Total return is expected to be above 10% in the next 12 months HOLD Total return is expected to be between above 0% to 10% in the next 12 months FULLY VALUED Total return is expected to be between -10% and 0% in the next 12 months SELL Total return is expected to be below -10% in the next 12 months TRADING BUY Total return is expected to be between 10-20% in the next 6 months arising from positive newsflow e.g. mergers and acquisition, corporate restructuring, and potential of obtaining new projects. However, the upside may or may not be sustainable WITHHELD Rating and target price withheld in the exercise of Maybank Investment Bank 's duties under the applicable laws, rules, regulations, policies and procedures for the time being in force, and is not a reflection of expected returns. Applicability of Ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies. Some common terms abbreviated in this report (where they appear): Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings BV = Book Value FV = Fair Value PEG = PE Ratio To Growth CAGR = Compounded Annual Growth Rate FY = Financial Year PER = PE Ratio Capex = Capital Expenditure FYE = Financial Year End QoQ = Quarter-On-Quarter CY = Calendar Year MoM = Month-On-Month ROA = Return On Asset DCF = Discounted Cashflow NAV = Net Asset Value ROE = Return On Equity DPS = Dividend Per Share NTA = Net Tangible Asset ROSF = Return On Shareholders’ Funds EBIT = Earnings Before Interest And Tax P = Price WACC = Weighted Average Cost Of Capital EBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year EPS = Earnings Per Share PAT = Profit After Tax YTD = Year-To-Date EV = Enterprise Value PBT = Profit Before Tax Disclaimer This report is for information purposes only and under no circumstances is it to be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report. The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Bhd and consequently no representation is made as to the accuracy or completeness of this report by Maybank Investment Bank Bhd and it should not be relied upon as such. Accordingly, no liability can be accepted for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Maybank Investment Bank Bhd, its affiliates and related companies and their officers, directors, associates, connected parties and/or employees may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice. This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward- looking statements. Maybank Investment Bank Bhd expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events. This report is prepared for the use of Maybank Investment Bank Bhd's clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of Maybank Investment Bank Bhd and Maybank Investment Bank Bhd accepts no liability whatsoever for the actions of third parties in this respect. This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. Published / Printed by Maybank Investment Bank Berhad (15938-H) (Formerly known as Aseambankers Malaysia Berhad) (A Participating Organisation of Bursa Malaysia Securities Berhad) 33rd Floor, Menara Maybank, 100 Jalan Tun Perak, 50050 Kuala Lumpur Tel: (603) 2059 1888; Fax: (603) 2078 4194 Stockbroking Business: Level 8, MaybanLife Tower, Dataran Maybank, No.1, Jalan Maarof 59000 Kuala Lumpur Tel: (603) 2297 8888; Fax: (603) 2282 5136 http://www.maybank-ib.com EQUITY FOCUS ▪ 9 April 2009 Page 10 of 10