Market Dateline PP 7767/09/2010(025354)

RHB Research Institute

RHB Equity 360°

15 March 2010 (Notion, MBM; Technical: Tan Chong, Cahya Mata Sarawak)

Top Story : Notion Vtec – Moving Up the Value Chain Outperform

New Coverage
- Notion Vtec (Notion) is an integrated precision engineering specialist and tools maker.
- Notion is expected to extensively produce for Samsung 2.5’’ baseplates components with initial production
of 100K units per/month rising sharply to 1m units per/month (by June) and 2m pieces per/month by end-
2010 respectively. We expect this to grow significantly in FY11-12 as Notion steps-up its capability to
produce higher-value components.
- Recall that Nikon acquired a 8.98% via a private placement exercise raised about RM33.8m. The proceeds
will be used for its plant in Thailand with plans for further expansion. We expect Notion Nikon to further
develop its expertise and technical know-how in order to service Nikon which will further improve
production efficiently.
- We estimate revenue growth in FY10, FY11, and FY12 to driven mainly by: 1) stronger demand in the 2.5’’
HDD segment particularly the robust orders from Samsung; and 2) stronger contribution from its camera
division given volume loading from Nikon.
- We estimate a fair value of RM 4.59 based on 10x FY11 EPS. Initiate coverage with an Outperform
recommendation.

Corporate Highlights

MBM : Entered Into Distributorship/Dealership Agreements Outperform

News Update
- MBM’s subsidiary, FAST has entered into two separate agreements with Autovox for the sole and exclusive
sale rights to distribute ABT Sportsline and Heico Sportiv products in Malaysia last Friday. Both
agreements stipulate that FAST will also be responsible for the import, logistics and coordination of
installation of ABT Sportsline products and Heico Sportiv.
- Separately, MBM’s other subsidiary DMSB was appointed as dealer for HMMSB, the distributor of HINO
commercial vehicles in Malaysia and an associate of MBM. A further announcement will be made for other
trading terms and conditions which will be included into a formal Dealership Agreement upon execution.
- The agreement made between MBM and Autovox might be able to open the door for MBM to get into talks
with the Volkswagen Group for a future business relationship. The agreement with Heico Sportiv on the
other hand has helped to expand MBM’s business scope for Volvo.
- Maintain Outperform and fair value of RM3.93/share.

Technical Highlights

Daily Trading Strategy : Revisiting The 1,300 Stronghold Soon

- Last Friday’s weakness was within our expectation, as the FBM KLCI underwent a temporary consolidation
following the recent sharp rally.
- Based on the current technical readings, the FBM KLCI could face further pullback towards a lower
technical gap near the 1,300.74 - 1,312.18 region and the 10-day SMA nearby.
- But we remain convinced that the recent bullish technical breakout from 1,300 will remain intact, even
though the index may revisit the stronghold in the near future.
- In other words, any weakness towards 1,300 will likely to see the return of fresh bargain-hunting activities.
- To revive its bullish momentum, the FBM KLCI must retake the 1,334.34 high to pave ways for a further
march to the upper technical gap near 1,354.79.
- For the medium-term outlook, based on the crucial breakout of 1,300, the index is still aiming at the 1,390
key resistance level, in our view.

Daily Technical Watch: Tan Chong Motor Holdings – Follow-through upside early this week…
- 10-day SMA: RM3.287
 - 40-day SMA: RM3.163
- Support: IS = RM3.36 S1 = RM3.10 S2 = RM2.80
- Resistance: IR = RM3.65 R1 = RM4.00

Weekly Trading Idea : Cahya Mata Sarawak – An Opportunity To Bargain Buy Near RM2.10 Bargain Buy
- Strategy: Bargain Buy near RM2.10 for further rally ahead.
- Target: IR = RM2.41 R1 = RM2.71
- Support: IS = RM2.10 S1 = RM1.87 S2 = RM1.60
- Exit: Cut loss if it loses the 10-day SMA near RM1.985.

Commodities & Currencies : xxxx

- Light Sweet Crude Oil futures (Crude): Short-term weakness should be absorbed near the US$80
psychological level.
- Crude Palm Oil futures (CPO): The 10-week SMA near RM2,562 and the breakout point at RM2,500
will cap near-term downside.
- Ringgit (RM)/US$: An immediate test to the major 3.29 level looks imminent.
- Japanese Yen (JPY)/US$: Yen to resume its uptrend towards 87 in the near term.
- Euro Dollar (EUR)/US$: Euro is ready to rebound from the previous downtrend against the US$.
- US Dollar Index (DXY): Any pullback could see a revisit of 78, near the 21-week SMA of 77.98.

Bulletin Board

Co/Sector News Impact Recom

Digi Digi yearns for more 900MHz spectrum so that it
can reach out to a wider segment of the
population. Currently, Celcom and Maxis have
more spectrum as they had acquired other
celcos. (StarBiz)
Sime Darby Sime Darby plans to launch at least one project s
month over the next six months, according to
managing director of Sime Darby Property, Datuk
Tunku Putra Badlishah. In March, it launched
Seri Pilmoor in Ara Damansara, a high-end
freehold residential development with GDV of
RM469m. This project comprises 74 bungalow
units and 34 semi-D homes, priced between
RM2.8-4.6m each and Sime Darby targets to sell
all the units within two years. Besides this, Sime
Darby is also launching another residential
project in Denai Alam this month, although no
details were given as to the GDV of this project.
This project was supposed to be launched in
Dec, but was delayed as Sime Darby wanted to
add some new features to the homes.
(StarBizWeek)
Neutral. We understand that there could be OP,
delays in the spectrum re-farming exercise, FV=RM23
which was scheduled to take place later this .90
year. While more spectrum would help in Digi’s
push to extend services to the underserved
areas, for now, Digi’s network still has sufficient
capacity to cater for its voice traffic.
Positive, as we have mentioned in our report OP, FV =
dated 24 Feb that Sime’s property division was RM9.85
expected to post weaker-than-expected earnings
in FY06/10 due to delays of certain property
launches. If Sime Darby is able to launch one
new project a month, we believe there may be a
chance that the property division may be able to
meet market its own previously guided sales
target of approximately RM1.5bn a year from
property development. Nevertheless, to be
conservative, we maintain our sales projections
for the property division, which assumes revenue
of about RM1.25bn from property development.

Important Dates

Company Entitlement details Ex-date Payment date

New entitlements
NTPM First interim single-tier dividend of 14.5% 30-Mar-10 16-Apr-10
 Going “ex” on 16 Mar
Hai-O Enterprise Share split on 1-into-2 basis + bonus issue on 1-for-5 basis 16-Mar-10 -
Guan Chong 1st interim div of 0.5 sen tax exempt + 0.75 sen less tax 16-Mar-10 26-Mar-10
SP Setia Final dividend of 9 sen less 25% tax 16-Mar-10 31-Mar-10
Boustead Holdings 4th interim dividend of 4 sen less 25% tax 16-Mar-10 31-Mar-10
Boustead Holdings 4th interim dividend of 6 sen single tier 16-Mar-10 2-Apr-10
Mithril 6th interest payment on 8-year 3% RCSLS 2004/2012 16-Mar-10 5-Apr-10
Boustead Heavy Industries Single tier first interim dividend of 6 sen 16-Mar-10 8-Apr-10
CNI Holdings Interim dividend of 8 sen less 25% tax 16-Mar-10 8-Apr-10
Xingquan Int’l Sports Tax exempt interim dividend of 2.5 sen 16-Mar-10 16-Apr-10

...For more details, see individual reports attached

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Stock Ratings

Outperform = The stock return is expected to exceed the FBM KLCI benchmark by greater than five percentage points over the next 6-12 months.

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Industry/Sector Ratings

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