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1

MARKET DATELINE

MALAYSIA EQUITY

Investment Research

Sector Update

Transportation

Brighter Days Ahead

The transport sector chalked up an average total return of 14.8% vs

the FBM KLCI’s 0.6% return YTD. Shipping generated the highest

return, but ports were laggards. That said, shipping and ports’ 1Q’s

earnings are likely to disappoint while aviation could surprise in view

of strong passenger numbers. Maintain NEUTRAL on Transportation

sector, with OVERWEIGHTS on Aviation and Logistics.

OVERWEIGHT aviation. Travel demand remains favourable even as

newcomer Malindo is adding to overall traffic growth, which is positive for

airport operator Malaysia Airports Holdings (MAHB). Although this could

pressure the load factor and yields of airlines under our coverage, we think the

impact will be fairly contained due to Malindo’s small fleet and its inability to

offer airfares at steep discounts in the longer run. AirAsia is our top sector pick.

We deem it too premature to be alarmed by recent cases of bird flu given that

there are still no signs of human-to-human transmission.

NEUTRAL on shipping. The demand-supply disparity for vessels continues to

persist but is improving. We believe shipping rates have bottomed and are now

on a stable but slow recovery. This has prompted dry bulk players to buy cheap

vessels ahead for the next upcycle. We like Malaysian Bulk Carriers (Maybulk)

from a valuation standpoint given its net cash balance, and see the potential

listing of its marine offshore associate PACC Offshore Services Holdings Pte Ltd

(POSH) crystallizing valuations. That said, macro risks still prevail. On

expectation of 1QFY13 earnings disappointing, we remain NEUTRAL on the

SHIPPING sector.

OVERWEIGHT logistics; NEUTRAL on ports. We expect integrated logistics

players such as Tasco and Freight Management to benefit from strengthening

trade growth while NCB Holdings stands to gain from improved container

throughput. Our top pick is Pos Malaysia, whose thriving e-commerce activities

are fuelling profits at its courier division, while its direct mail venture will

mitigate the natural decline in conventional mail volume.

Ahmad Maghfur Usman 603 9207 7654 [email protected]

Jerry Lee 603 9207 7622 [email protected]

NEUTRAL

SUB SECTOR RECOMMENDATIONS AVIATION OVERWEIGHT Top pick: AirAsia LOGISTICS OVERWEIGHT Top pick: Pos Malaysia SHIPPING NEUTRAL Top pick: Maybulk

Stock Price Target ROE DY P/NTA (x) Rating

Dec-13F Dec-14F Dec-13F Dec-13F 1mth 3mth 12mth Dec-13F

AirAsia Bhd MYR2.87 MYR3.39 2,610 6.930 9.2 9.2 10.7% 0.0% -2.1% -2.1% -16.1% 1.3 BUY

Bintulu Port MYR7.01 MYR6.95 917 0.000 17.3 15.9 20.2% 3.9% 0.1% -1.3% 0.1% 192.2 NEUTRAL

Freight Management MYR1.25 MYR1.25 66 0.033 8.4 7.1 17.2% 3.6% 22.5% 25.6% 38.9% 1.4 NEUTRAL

Malaysia Airlines System BhdMYR0.76 MYR1.00 825 7.960 253.5 8.9 0.8% 0.0% 7.9% -2.6% -42.8% 1.2 BUY

Malaysian Airports Holdings BhdMYR6.05 MYR7.23 2,409 0.852 27.4 18.9 6.1% 2.2% 11.8% 10.2% 5.0% na BUY

Malaysian Bulk CarriersMYR1.64 MYR1.85 536 1.154 32.3 24.2 2.9% 1.8% 6.5% 20.6% -4.7% 0.9 BUY

MISC Bhd MYR5.46 MYR5.50 7,973 4.390 20.4 17.5 5.7% 2.7% 3.4% 34.5% 2.4% 1.3 NEUTRAL

NCB Holdings Bhd MYR4.60 MYR5.38 708 0.055 13.7 15.5 10.5% 4.4% 2.7% 4.5% 15.6% 2.1 BUY

POS Malaysia Bhd MYR4.35 MYR5.00 764 0.887 12.8 11.4 18.1% 3.9% 11.0% 23.6% 58.8% 2.2 BUY

Tasco Bhd MYR2.05 MYR2.35 67 0.058 6.1 5.3 12.3% 6.5% 0.5% 0.0% 0.0% 0.7 BUY

Mkt Cap

US$m

Volume

m

P/E (x) Rel. Perf. (%)

Source: Company data, RHBRI estimates

RHB Research


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2

SHARE PRICE PERFORMANCE YTD

Shipping a big gainer. Shipping was the leading performer, raking in an

average return of 24.8% YTD, led by Maybulk (24% YTD) and MISC (25.6%

YTD). We had earlier reaffirmed our BUY call on MISC in view of its earnings

turnaround although much of the share price rally was attributed to PETRONAS’

buyout offer. Meanwhile, our upgrade on Maybulk after it posted disappointing

results proved timely as we believe that the dry bulk shipping sector is headed

for a recovery, albeit a slow one.

Logistics in favour. Our logistics favourites, Freight Management and Pos

Malaysia generated a total YTD return of 29.4% and 24.7% respectively. We

remain bullish on Pos Malaysia’s earnings outlook, driven by its ability to

mitigate the natural decline in the mailing segment and growth in its courier

business. We downgrade Freight Management to NEUTRAL as we think

valuation could run ahead of its earnings growth expectations. We advise

investors to buy Tasco due to its cheap valuations, attractive yields and

earnings growth potential capitalising on the NYK Group’s network.

Aviation stocks still flying. Aviation stocks did not perform as strongly as

the two abovementioned sectors owing to the risk overhang from Malindo and

the possible delay in the completion of the KLIA2. However, it was still

encouraging that our OVERWEIGHT stance on the aviation sector has proven to

be correct, as the sector trumped the meagre performance of the FBMKLCI

index. MAHB chartered the highest total return among our aviation coverage

on the back of strong YTD growth in passenger numbers (of +7.23% YTD Feb

2013) coupled with the improved investor confidence that the KLIA2 could be

completed in time ahead of its end-June launching. AirAsia raked in a 10% YTD

return on improved sentiment as the investor concern on the Malindo threat is

reduced, coupled with a surprise special dividend payment. We were also

timely in upgrading MAS to a BUY, after the stock hit a bottom of 67sen, in

anticipation of an earnings turnaround.

Ports lagged. The port sector was a laggard on poor trade numbers in

February, which fell short of median estimates, and owing to the fact that most

investors were more inclined to be exposed to cyclical sectors.

Figure 1: Total YTD % Return (inclusive of dividends) of our Transport coverage

Title:

Source:

Please fill in the values above to have them entered in your report

29.5

25.6

24.7

24.1

16.1

10.7

7.7

5.4

2.5

2.1

0.6

0 5 10 15 20 25 30 35

Freight

MISC

Pos

Maybulk

MAHB

AirAsia

MAS

NCB

TASCO

Bintulu Port

FBMKLCI

Source: RHBRI

RHB Research


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3

SUB SECTOR ALLOCATION STRATEGY

All eyes on earnings. Following a good run up YTD across our coverage, we

believe investors will be focused on the upcoming earnings outlook. Aviation

stocks could be an outperformer as investors seek for cyclical exposure with

earnings upside surprise due to strong passenger traffic.

Aviation could be a performer. Operational data statistics will be the key

focus for our aviation coverage, the 1Q earnings outlook for which we should

be able to gauge in the coming weeks. Based on the numbers released by

Malaysia Airlines (MAS) and MAHB for February, which saw strong passenger

traffic, we foresee potential earnings surprise for the aviation stocks in our

coverage. This is also against the backdrop of flattish jet fuel price (down by

3% y-o-y on average in 1Q2013) and a more conservative strategy in fuel

hedging.

1Q not reflective of competitive landscape. However, we highlight that 1Q

earnings will not be reflective of the change in the competitive landscape as

Malindo had only commenced its operations in late-March. As such, investors

may also want to position their investment exposure to MAHB, which stands to

benefit from the rising competition between carriers on stimulated traffic

growth due to airfare discounts to expand market share.

Shipping earnings will continue to disappoint. In the shipping space, we

believe that earnings outlook will continue to be grim, though losses are

expected to narrow. The macro picture remains dismal and we foresee some

profit taking activities in the sector after a strong run up YTD.

A mixed bag for logistics and ports. 1Q earnings expectations could likely

be a mix bag for logistic players. Freight forwarders and port operators with

significant exposure on electronic & electrical products could be vulnerable in

view of the poor trade numbers in February. Tasco could likely suffer from this

though the logistics provider has been securing some new sizable contracts

from new customers to offset the impact. Freight Management, which is more

exposed to intra ASEAN, could likely see its earnings remain fairly resilient

while Pos Malaysia is expected to see another strong quarter, boosted by

higher mail and courier volume.

RHB Research


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4

SECTOR OVERVIEW

AVIATION – OVERWEIGHT: STILL FLYING

Resilient consumer spending, competition to fuel passenger growth.

The macro landscape continues to be favourable, which should sustain

consumer demand for leisure travel moving forward. Spending activities remain

encouraging as the consumer sentiment index continues to tick up over the

past four consecutive quarters. Competition has intensified with the emergence

of Malindo. The hybrid carrier, offering full service at low cost fares, is expected

to lure consumers with more options and choices to capture market share and

boost loads. Additionally, a few of Thailand’s low cost carriers are already

starting to penetrate into Malaysian routes, potentially igniting further

competition. For the full service carriers, we see competition emerging from

new carriers flying into the Kuala Lumpur International Airport (KLIA). Malaysia

Airports Holdings (MAHB) aims to increase the number of airlines flying into

KLIA to 60 from 56 and has recently succeeded in bringing in Air France and

Turkish Airways. MAS’ entry into the oneworld alliance has also boosted its

passenger traffic. Overall passenger traffic in Malaysia is expected to grow

11%, whilst MAS and AirAsia are expected to grow 7% and 13% respectively.

Resilient consumer spending, competition boost passenger growth. The

macro landscape continues to be favourable, which should sustain consumer

demand for leisure travel moving forward. Spending activities remain

encouraging as the consumer sentiment index continues to tick up over the

past four consecutive quarters. Competition has intensified with the emergence

of Malindo. The hybrid carrier, offering full service at low cost fares, is expected

to lure consumers with more options and choices to capture market share and

boost loads. Additionally, a few of Thailand’s low cost carriers are already

starting to penetrate into Malaysian routes, potentially igniting further

competition. For the full service carriers, we see competition emerging from

new carriers flying into the Kuala Lumpur International Airport (KLIA). Malaysia

Airports Holdings (MAHB) aims to increase the number of airlines flying into

KLIA to 60 from 56 and has recently succeeded in bringing in Air France and

Turkish Airways. MAS’ entry into the oneworld alliance has also boosted its

passenger traffic. Overall passenger traffic in Malaysia is expected to grow

11%, whilst MAS and AirAsia are expected to grow 7% and 13% respectively.

Malindo more of a threat to MAS. While the domestic aviation landscape has

intensified with Malindo’s entry, increasing the risk of a price war, we foresee

the impact on AirAsia’s overall yields will be minimal due to the former’s

inability to sustain low fares over the long run and its initial small fleet size. As

airfares move higher to a more sustainable level for Malindo to operate

profitably, it will hurt MAS more, considering that it offers complimentary full

service at a discount to MAS’ airfares. Meanwhile, its upcoming routes to India,

China and Indonesia will impact AirAsia X as well as other full service carriers

given Malindo’s more attractive offerings.

Bird flu fears premature. We deem it premature to be alarmed by the recent

developments in the H7N9 virus infection as according to the World Health

Organization, there is no evidence of human-to-human transmission. Reported

deaths amounted to six so far, four in Shanghai and two in Zhejiang, Eastern

China. More than 20,000 birds from a live-poultry trading zone in Shanghai

have been killed by Chinese authorities while a number of other cities across

the country have announced trading suspensions.

RHB Research


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5

OVERWEIGHT on Aviation. We remain OVERWEIGHT on the aviation sector.

Each stock in our coverage offers a compelling and attractive valuation despite

the external risks. AirAsia is our top pick as the stock is trading at a steep

discount - at 8x FY13 P/E - after incorporating the market cap of its listed

stakes in Asia Aviation and Tune Ins.

COMPANY BRIEFS

AIRASIA (BUY, FV: RM3.39) The underperformance of its shares since 2012

means that the competitive threat from Malindo has been priced in. We have

already factored in a 3% dip in overall yields, which would lead to its EBITDA

declining by 2%. Its earnings growth of 7% will be largely driven by associate

earnings. From a valuation standpoint, after taking into account its stakes in

listed entities such as Asia Aviation and its insurance arm, AirAsia is valued at

a a FY13 P/E of 8x, at a steep discount to the 12x peer average and historical

average of 10.5x. We value AirAsia, our top pick, at 11x FY13 earnings.

Forecasts and Valuations Dec-10 Dec-11 Dec-12 Dec-13F Dec-14F

Total turnover (MYRm) 3,948 4,495 4,996 5,524 6,015

Recurring net profit (MYRm) 973 1,090 803 858 864

Recurring net profit growth 136.1% 12.1% (26.4%) 6.9% 0.6%

Core EPS (MYR) 0.35 0.39 0.29 0.31 0.31

Core EPS growth 136.1% 12.1% (26.4%) 6.9% 0.6%

DPS (MYR) 0.03 0.05 0.24 0.00 0.00

Dividend Yield 1.1% 1.8% 8.4% 0.0% 0.0%

Core P/E (x) 8.15 7.27 9.87 9.24 9.18

Return on average equity 59.8% 14.5% 40.0% 10.7% 9.5%

P/B (x) 2.18 1.96 1.48 1.28 1.20

EV/EBITDA (x) 8.16 6.08 6.38 7.08 7.10

Net debt to equity 167.6% 134.3% 116.2% 97.4% 95.5%

RHBRI vs consensus EPS (33.5%) (42.1%) Source: Company data, RHBRI estimates

Figure 2: AirAsia’s yield still growing, albeit moderating

Title:

Source:

Please fill in the values above to have them entered in your report13.7

15.6

18.5 19.018.0

19.317.8

17.918.9

20.5

18.8 18.720.0

20.9

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Adj. Rev/RPK - sen (RHS) Y-o-Y % chg (LHS)

Source: RHBRI, AirAsia

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6

MAS (BUY, FV: RM1.00). We remain upbeat on MAS and expect its

turnaround to become a reality following its route restructuring and entry into

the oneworld alliance which will help to lift yields and load factor. Furthermore,

MAS’ fleet rejuvenation exercise would cut maintenance costs and fuel

consumption. We are keeping our BUY recommendation on MAS with a FV

RM1.00, based on 9x FY14 adjusted EV/EBITDAR.

Forecasts and Valuations Dec-11 Dec-12 Dec-13F Dec-14F Dec-15F


Recurring net profit (MYRm) (1,816) (748) 25 714 1,199

Recurring net profit growth (3274.2%) (58.8%) na 2733.2% 67.9%

Core EPS (MYR) (0.54) (0.22) 0.00 0.09 0.14

Core EPS growth (3274.2%) (58.8%) na 2733.2% 67.9%

Core P/E (x) na na 253 9 5

Return on average equity (110.5%) (51.9%) 0.8% 12.1% 17.5%

P/B (x) 2.45 4.09 1.15 1.02 0.86

EV/EBITDA (x) na na 9.94 6.34 5.06


RHBRI vs consensus EPS (69.8%) 64.4% Source: Company data, RHBRI estimates

Figure 3: MAS’ unit cost continue to improve q-o-q

Title:

Source:


20

22

24

26

28

30

32

34

36

38

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Revenue/RPK (sen) - Adjusted CASK (include Jet Fuel)

Source: RHBRI, MAS

RHB Research


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7

MAHB (BUY, FV: RM7.23) MAHB is a defensive play. The proliferation of low

cost and new full service carriers coming in is expected to boost passenger

volumes. These in turn would expand its non-aeronautical revenue with the

commencement of the KLIA2 later this year. Our DCF FV of RM7.23 on MAHB

implies a FY14 EV/EBITDA of 11x, which is at a 15% premium to global airport

peers average. This is warranted by its high free cash flow capability in the

absence of any onerous capex after the KLIA2 opening.



Recurring net profit (MYRm) 435 474 269 389 428

Recurring net profit growth 19.0% 8.9% (43.3%) 44.8% 10.1%

Core EPS (MYR) 0.38 0.39 0.22 0.32 0.35

Core EPS growth 13.3% 3.6% (43.5%) 44.8% 10.1%

DPS (MYR) 0.17 0.20 0.13 0.19 0.21

Dividend Yield 2.8% 3.2% 2.2% 3.2% 3.5%

Core P/E (x) 16.1 15.5 27.4 18.9 17.2


P/B (x) 2.06 1.69 1.64 1.58 1.53

EV/EBITDA (x) 10.5 10.3 12.0 9.4 8.6


RHBRI vs consensus EPS (30.4%) (14.3%) (11.0%) Source: Company data, RHBRI estimates

Figure 4: Passenger Numbers on a rebound y-o-y Figure 5: Aircraft movement growing y-o-y

Title:

Source:


0

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-4-202468

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Aircraft Traffic Movement

y-o-y % chg

International Aircraft Movement

Domestic Aircraft Movement

y-o-y (total domestic and international) chg

Source: RHBRI, MAHB Source: RHBRI, MAHB

RHB Research


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8

SHIPPING (NEUTRAL): Rates hit bottom; ready for upcycle

Shipping rates may have bottomed, showing signs of stability. The dry

bulk index has been on an uptrend since the start of 2013, rising to 935 points

from 698 currently. This supports our view that rates have bottomed out after

hitting a low of 647 early last year. Rates for the Panamax and Handymax type

vessels – which are Maybulk’s fleet type – were well supported by firm

demand, notably for grain and iron ore shipments. At mid-March, according to

ship broker Clarkson, earnings for Panamax reached USD7.8k/day, the highest

level in 10 months. However, despite the improving outlook in the dry bulk

sector prompting vessel buying activities, rates will not likely recover at a

significantly fast pace soon, as the imbalance between demand and supply

growth for dry bulk vessels persists. Last year saw a record delivery of new

builds into the market, with the global dry bulk fleet increasing by 10% y-o-y,

exceeding the bulk trade demand growth of 7%. This year, the gap between

supply and demand appears to be narrowing, with expectations that trade

demand will grow by 5% y-o-y whilst fleet is expected to grow by 7%. The glut

will also be eased by higher scrapping activities, with many shippers in ailing

financial conditions unable to operate.

Tanker outlook better than dry bulk. The demand imbalance on the tanker

side is less of a drag compared to dry bulk shipping on the back of higher crude

oil demand riding on the recovery of the global economy. Fleet supply growth

in 2013 is expected to grow by 3.3% against the demand growth of 2.6%. This

also suggests that rates are expected to improve further though volatility may

still persist. On the tanker segment, petroleum shipping rates will still be

affected by the supply glut with the Aframax vessels being the worst hit. On

the other hand, chemical tanker shipping rates are expected to be much

stronger as chemical shipping demand growth outweighs supply.

Modernising fleet for next upcycle. The strengthening rates has prompted

strong vessel operators with solid balance sheets to modernise their fleet by

buying newly built vessels, taking advantage of the rock-bottom asset prices,

to prepare for the next shipping upcycle. Such move will allow companies to

cut their vessel operating costs by almost half with the new cheaper vessels.

These buying activities are however more in the dry bulk sector given that the

longer-term outlook in the petroleum tanker segment remains uncertain as the

US, a key oil importer, becomes oil independent once production of shale gas

commences on a massive scale by 2017-2018.

NEUTRAL on Shipping. We are NEUTRAL on the shipping sector as we see

the overcapacity of vessels in most shipping segments continuing to prevent a

sharp rise in freight rates. Profits will remain unexciting for most shipping

players. Maybulk, riding on the potential recovery of dry bulk shipping, is our

top pick in this space.

RHB Research


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9

Figure 6: Baltic Dry Index Figure 7: Baltic Dirty Tanker Index

Title:

Source:


0

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Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13

Source: RHBRI, Bloomberg Source: RHBRI, Bloomberg

Figure 8: Smaller bulk carriers rates are improving

Title:

Source:


0

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Clarkson Baltic Supramax TC6 (USD/day)

Clarkson Baltic Handysize TC6 (USD/day)

Source: Bloomberg

Figure 9: Average prices of new builds

Title:

Source:


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Source: SSY, Bloomberg

RHB Research


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10

COMPANY BRIEFS

MISC (NEUTRAL, FV: RM5.50) MISC’s petroleum and chemical tanker

segment will still be in the red, its losses are expected to narrow. Furthermore,

growth will still be driven by higher earnings from LNG, offshore, tank

terminals, subsidiary Malaysia Marine and Heavy Engineering (MMHE) and

50%-owned Gemusut Kakap, which will commence operation sometime in 3Q.

We recommend investors to accept the cash buyout from Petronas of RM5.50

per share.


Total turnover (USDm) 3,739 3,127 3,936 4,246 4,669

Recurring net profit (USDm) (287) 267 386 449 530

Recurring net profit growth na 44.8% 16.4% 17.9%

Core EPS (USD) (0.06) 0.06 0.09 0.10 0.12

Core EPS growth na 44.8% 16.4% 17.9%

DPS (USD) 0.02 0.00 0.05 0.05 0.08

Dividend Yield 1.1% 0.0% 2.7% 2.7% 4.5%

Core P/E (x) na 29.6 20.4 17.5 14.9

Return on average equity (17.5%) 3.7% 5.7% 6.8% 7.9%

P/B (x) 1.20 1.15 1.20 1.18 1.16

EV/EBITDA (x) 43.9 11.2 10.2 9.5 8.1


RHBRI vs consensus EPS (2.2%) (7.5%) Source: Company data, RHBRI estimates

Maybulk (BUY, FV: RM1.85) We maintain our BUY call on Maybulk, with an

unchanged FV of RM1.85 premised on 1x P/BV. The potential listing of

associate PACC Offshore Services Holdings Group (POSH) is a catalyst that we

have yet to factor into our valuation. At the current exchange rate, Maybulk’s

acquisition cost of USD221m and its entitled 25% premium exercise option,

would translate into a valuation of about MYR0.85 per share. We like the

company’s healthy net cash compared to other regional dry bulkers, which are

mostly laden with net gearing.


Total turnover (MYRm) 256 157 189 246 287

Recurring net profit (MYRm) 103 34 51 68 76

Recurring net profit growth (52.0%) (66.8%) 49.1% 33.4% 12.1%

Core EPS (MYR) 0.10 0.03 0.05 0.07 0.08

Core EPS growth (52.0%) (66.8%) 49.1% 33.4% 12.1%

DPS (MYR) 0.03 0.03 0.03 0.03 0.04

Dividend Yield 1.8% 1.8% 1.8% 1.8% 2.4%

Core P/E (x) 16.0 48.1 32.3 24.2 21.6


P/B (x) 0.95 0.96 0.89 0.87 0.86

EV/EBITDA (x) 4.9 29.0 16.7 11.4 9.2

Net debt to equity net cash net cash net cash net cash net cash

RHBRI vs consensus EPS 24.7% 0.3% Source: Company data, RHBRI estimates

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11

LOGISTICS & PORTS: A BOOST FROM IMPROVING TRADE

Integrated logistics players such as TASCO (BUY, FV RM2.03) and FREIGHT

MANAGEMENT (NEUTRAL, FV: RM1.25) are expected to benefit on the stronger

growth in Malaysia’s import and export trade. This too would propel container

throughputs for port operator, NCB (BUY, FV RM5.38). We remain

OVERWEIGHT on LOGISTICS but NEUTRAL on PORT OPERATORS. Pos

Malaysia (BUY, FV: RM5.00) is our top pick in LOGISTICS on account of its

exposure in thriving e-commerce activities, which have boosted profits of its

courier division. Furthermore, its new venture into direct mail would mitigate

the natural decline in postal mail.

Figure 10: Container Throughputs at Port Klang (TEU)

Import Export Transhipment Total Y-o-Y growth

2005 1,342,901 1,276,661 2,923,965 5,543,527

2006 1,403,946 1,367,625 3,554,724 6,326,295 14%

2007 1,527,893 1,474,193 4,116,628 7,118,714 13%

2008 1,629,977 1,598,544 4,745,058 7,973,579 12%

2009 1,515,743 1,478,354 4,315,682 7,309,779 -8%

2010 1,716,304 1,718,845 5,436,596 8,871,745 21%

2011 1,794,508 1,720,542 6,088,876 9,603,926 8%

2012 1,872,867 1,821,995 6,306,633 10,001,495 4%

Source: RHBRI

Figure 11: Monthly container throughput movements (export)

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Apr

11

Jul 11

Oct

11

Jan 1

2

Apr

12

Jul 12

Oct

12

TEU

Klang Port

Tanjung Pelepas Port

Penang PortKuantan PortJohor Port

Source: RHBRI

Figure 12: Monthly container throughput movements (import)

Title:

Source:


0.0

50,000.0

100,000.0

150,000.0

200,000.0

250,000.0

300,000.0

350,000.0

400,000.0

450,000.0

500,000.0

Jan 0

8

Apr

08

Jul 08

Oct

08

Jan 0

9

Apr

09

Jul 09

Oct

09

Jan 1

0

Apr

10

Jul 10

Oct

10

Jan 1

1

Apr

11

Jul 11

Oct

11

Jan 1

2

Apr

12

Jul 12

Oct

12

TEU

Klang Port

Johor Port

Tanjung Pelepas Port

Penang PortKuantan Port

Source: RHBRI

RHB Research


www.rhbinvest.com

12

RHB Guide to Investment Ratings Buy: Share price may exceed 10% over the next 12 months

Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain

Neutral: Share price may fall within the range of +/- 10% over the next 12 months

Take Profit: Target price has been attained. Look to accumulate at lower levels

Sell: Share price may fall by more than 10% over the next 12 months

Not Rated: Stock is not within regular research coverage Disclosure & Disclaimer All research is based on material compiled from data considered to be reliable at the time of writing, but RHB does not make any representation or warranty, express or implied, as to its accuracy, completeness or correctness. No part of this report is to be construed as an offer or solicitation of an offer to transact any securities or financial instruments whether referred to herein or

otherwise. This report is general in nature and has been prepared for information purposes only. It is intended for circulation to the clients of RHB and its related companies. Any recommendation contained in this report does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This report is for the information of addressees only and is not to be taken in substitution for the exercise of judgment by addressees, who should obtain separate legal or financial advice to independently evaluate the particular investments and strategies. RHB, its affiliates and related companies, their respective directors, associates, connected parties and/or employees may own or have positions in securities of the company(ies) covered in this research report or any securities related thereto, and may from time to time add to, or dispose off, or may be materially interested in any such securities. Further, RHB, its affiliates and related companies do and seek to do business with the company(ies) covered in this research report and may from time to time act as market maker or have assumed an underwriting commitment in securities of such company(ies), may sell them or buy them from customers on a principal basis and may also perform or seek to perform significant investment banking, advisory or underwriting services for or relating to such company(ies), as well as solicit such investment, advisory or other services from any entity mentioned in this research report. RHB and its employees and/or agents do not accept any liability, be it directly, indirectly or consequential losses, loss of profits or damages that may arise from any reliance based on this report or further communication given in relation to this report. The term “RHB” shall denote where applicable, the relevant entity distributing the report in the particular jurisdiction mentioned specifically herein below and shall refer to RHB Research Institute Sdn Bhd, its holding company, affiliates, subsidiaries and related companies. All Rights Reserved. This report is for the use of intended recipients only and may not be reproduced, distributed or published for any purpose without prior consent of RHB and RHB accepts no liability whatsoever for the actions of third parties in this respect. Malaysia This report is published and distributed in Malaysia by RHB Research Institute Sdn Bhd (233327-M), Level 11, Tower One, RHB Centre, Jalan Tun Razak, 50400 Kuala Lumpur, a wholly-owned subsidiary of RHB Investment Bank Berhad (RHBIB), which in turn is a wholly-owned subsidiary of RHB Capital Berhad. As of 07 07 07 Apr 2013Apr 2013Apr 2013, RHBIB does not have proprietary positions in the subject companies, except for: a) - - - As of 07 07 07 Apr 2013Apr 2013Apr 2013, none of the analysts who covered the stock in this report has an interest in the subject companies covered in this report, except for: a) - - - Singapore This report is published and distributed in Singapore by DMG & Partners Research Pte Ltd (Reg. No. 200808705N), a wholly-owned subsidiary of DMG & Partners Securities Pte Ltd, a joint venture between OSK Investment Bank Berhad, Malaysia (“OSKIB”) and Deutsche Asia Pacific Holdings Pte Ltd (a subsidiary of Deutsche Bank Group). DMG & Partners Securities Pte Ltd is a Member of the Singapore Exchange Securities Trading Limited and is a subsidiary of OSKIB, which in turn is a wholly-owned subsidiary of RHB

Capital Berhad. DMG & Partners Securities Pte Ltd may have received compensation from the company covered in this report for its corporate finance or its dealing activities; this report is therefore classified as a non-independent report. As of 07 07 07 Apr 2013Apr 2013Apr 2013, DMG & Partners Securities Pte Ltd and its subsidiaries, including DMG & Partners Research Pte Ltd do not have proprietary positions in the subject companies, except for: a) - - - As of 07 07 07 Apr 2013Apr 2013Apr 2013, none of the analysts who covered the stock in this report has an interest in the subject companies covered in this report, except for: a) -

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Special Distribution by RHB Where the research report is produced by an RHB entity (excluding DMG & Partners Research Pte Ltd) and distributed in Singapore, it is only distributed to "Institutional Investors", "Expert Investors" or "Accredited Investors" as defined in the Securities and Futures Act, CAP. 289 of Singapore. If you are not an "Institutional Investor", "Expert Investor" or "Accredited Investor", this research report is not intended for you and you should disregard this research report in its entirety. In respect of any matters arising from, or in connection with this research report, you are to contact our Singapore Office, DMG & Partners Securities Pte Ltd. Hong Kong This report is published and distributed in Hong Kong by OSK Securities Hong Kong Limited (“OSKSHK”), a subsidiary of OSK Investment Bank Berhad, Malaysia (“OSKIB”), which in turn is a wholly-owned subsidiary of RHB Capital Berhad. OSKSHK, OSKIB and/or other affiliates may beneficially own a total of 1% or more of any class of common equity securities of the subject company. OSKSHK, OSKIB and/or other affiliates may, within the past 12 months, have received compensation and/or within the next 3 months seek to obtain compensation for investment banking services from the subject company. Risk Disclosure Statements The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities. Past performance is not a guide to future performance. OSKSHK does not maintain a predetermined schedule for publication of research

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Jalan Tun Razak Kuala Lumpur

Malaysia Tel : +(60) 3 9280 2185 Fax : +(60) 3 9284 8693

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12th Floor World-Wide House 19 Des Voeux Road Central, Hong Kong

Tel : +(852) 2525 1118 Fax : +(852) 2810 0908

DMG & Partners

Securities Pte. Ltd. 10 Collyer Quay

#09-08 Ocean Financial Centre Singapore 049315

Tel : +(65) 6533 1818 Fax : +(65) 6532 6211

Jakarta Shanghai Phnom Penh

PT OSK Nusadana

Securities Indonesia Plaza CIMB Niaga

14th Floor Jl. Jend. Sudirman Kav.25

Jakarta Selatan 12920, Indonesia Tel : +(6221) 2598 6888 Fax : +(6221) 2598 6777

OSK (China) Investment

Advisory Co. Ltd. Suite 4005, CITIC Square 1168 Nanjing West Road

Shanghai 20041 China

Tel : +(8621) 6288 9611 Fax : +(8621) 6288 9633

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No. 1-3, Street 271 Sangkat Toeuk Thla, Khan Sen Sok

Phnom Penh Cambodia

Tel: +(855) 23 969 161 Fax: +(855) 23 969 171

Bangkok

OSK Securities (Thailand) PCL

10th Floor ,Sathorn Square Office Tower 98, North Sathorn Road,Silom

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