HONG LEONG BANK BHD (HLBK MK, HLBB.KL) 28 February 2012

Transcription

1 - BANKING HONG LEONG BANK BHD (HLBK MK, HLBB.KL) 28 February 2012 Strong realisation of merger synergies Company report Rachel Huang Rationale for report: Company Result BUY (Maintained) Price Fair Value 52-week High/Low Key Changes Fair value EPS RM11.70 RM13.00 RM RM8.89 Unchanged Unchanged Investment Highlights We maintain BUY on Hong Leong Bank Bhd (HLBB), with an unchanged fair value of RM13.00/share. This is based on an adjusted (for rights) 14.7% ROE for FY12F, leading to a fair P/BV of 2.1x. YE to Jun FY11 FY12F FY13F FY14F Total income (RMmil) 2, , , ,773.2 Core net profit (RMmil) 1, , , ,026.2 Core EPS (Sen) EPS growth (%) Consensus EPS (Sen) n/a DPS (Sen) BV/share (RM) PE (x) Div yield (%) P/BV (x) ROE (%) Stock and Financial Data Shares Outstanding (million) 1,580.1 Market Cap (RMmil) 18,487.3 Book value (RM/share) 4.77 P/BV (x) 2.5 ROE (%) 16.3 Major Shareholders Hong Leong Financial Group (63.5%) Employees Provident Fund (11.8%) Free Float (%) 50.0 Avg Daily Value (RMmil) 10.5 Price performance 3mth 6mth 12mth Absolute (%) 12.3 (1.4) 31.0 Relative (%) 3.4 (9.3) ,674 HLBB registered net earnings of RM381mil in 2QFY12, a 6.3% decline QoQ from RM407mil in 1QFY12. Annualised net earnings are in line with ours and consensus forecasts. However, we note that 2QFY12 included a one-time provisioning for a full staff voluntary separation scheme of RM114.7mil. Stripping off this item, we estimate net earnings to be 17% above our estimate, and 16% above consensus. Loans growth picked up to an annualised rate of 6.5% in 2QFY12, from 5.7% in 1QFY11. Loans growth would have been much stronger if not for lumpy repayments of selected project-related loans. SME loans registered a 6.6% QoQ rise, or at an annualised rate of 17.7%. Individuals loans grew 8.5% annualised. NIM improved by a robust 9bps QoQ. Absolute gross impaired loans fell 1.5% QoQ; thus improving the overall gross impaired loans ratio to 2.0% in 2QFY11 from 2.1% in 1QFY12. Loan loss cover climbed to 141.9% in 2QFY12 from 137.8% in 1QFY12. The company alluded that there had been no signs of strains in its loans portfolio, with continuing improvement seen for its impaired loans. The company said it has achieved annualised synergies of RM191mil, exceeding its target of RM180mil. Revenue synergies, although not significant at this stage, has turned out to be stronger than the company s expectation ) M 9.00 (R ,518 1,361 1,205 In d e x P o in ts We believe HLBB s share price had been affected by share overhang post its rights issue in October 2011, as well as concerns over Bank of Chengdu and the overall external uncertainty. At the current share price levels, HLBB is pricing in credit costs of 84bps, compared with 100bps at the recent low in the past three months (we have modelled in 70bps). HLBB s latest results prove that credit costs are unlikely to be close to 84bps F A F A F A e b u e g b u e g b u g HLBank PP 12247/06/2012 (030106) F e b -1 0 FBM KLCI A u g -1 0 F e b -1 1 A u g -1 1 F 1,049 e b -1 2 We believe HLBB s 2QFY12 is strong in terms of top line (loans growth, NIM) as well as well-executed merger synergies. We remain positive on HLBB. Key catalysts for HLBB are:- (a) stronger-than-expected top line growth; (b) sustained asset quality, (c) seamless integration in its merger with EON Bank; (d) better-than-expected ROE of close to its internal target of 16% to 17%.

2 TABLE 1: RESULTS COMPARISON YE June (RMmil) 2QFY11 1QFY12 2QFY12 QoQ YoY YTD2011 YTD2012 YoY Interest income , , , , Interest expense (355.7) (684.4) (664.8) (2.9) 86.9 (689.9) (1,349.2) 95.6 Net interest income , Islamic Banking Non-interest Income Operating income , , , Overhead expense (248.6) (435.6) (564.7) (466.6) (1,000.4) Pre-provision profit (8.8) Loan loss provision (39.9) (23.1) 3.2 (113.7) (107.9) (80.9) (19.9) (75.4) Impairment loss n.m. n.m #DIV/0! Associate (43.5) (21.8) Joint venture company (0.5) 0.2 (0.0) n.m. n.m. (0.7) 0.1 (118.0) Pre-tax profit (7.8) , Taxation and Zakat (68.3) (116.7) (101.8) (12.8) 49.1 (128.4) (218.5) 70.1 Minorities n.a. n.a n.m. Net profit (6.3) EPS (sen) (13.3) WELL ABOVE EXPECTATIONS IF NOT FOR EXPENSES RELATED TO VSS SCHEME 2QFY12 included one-off expenses relating to VSS scheme Hong Leong Bank Bhd (HLBB) registered net earnings of RM381mil in 2QFY12, a 6.3% QoQ decline from RM407mil in 1QFY12. Annualised net earnings are in line with our forecasts, and consensus estimate of RM1,561mil FY12F. However, we note that 2QFY12 included a one-time provisioning for a full staff voluntary separation scheme of RM114.7mil. Stripping off this item, we estimate net earnings to be 17% above our estimate and 16% above consensus. The better earnings compared to our estimates, stemmed from lower-than-expected loan loss provisions. Interim dividend is 22% YoY higher The company declared a higher interim GDPS of RM0.11 for 1HFY12, better than the RM0.09 GDPS for 1HFY11. This was above our estimated RM0.09 interim GDPS for FY12F. With this, we believe there is a good chance that the final GDPs will be higher than our estimated RM0.15 (our full year forecast GDPS for FY12F is RM0.24, unchanged from FY11 s RM0.24). LOANS GROWTH SLIGHTLY HIGHER Annualised loans growth at 6.5% Gross loans grew 1.8% QoQ in 2QFY12, which is slightly stronger than 1QFY12 s 1.4% QoQ rise. Annualised, loans growth came in at 6.5% in 2QFY12, ahead of the 5.7% recorded in 1QFY12. This is positive considering that 2QFY12 was a normally slower holiday season. The loans growth was backed by residential mortgage loans which recorded an annualised growth of 11.9%, and non-residential mortgage loans which grew at an annualised rate of 12.6%. The personal use segment s growth was also robust at 17.0% annualised (see Table 2 in following page). The company hinted that loans growth would have been stronger if not for lumpy repayments relating to project loans. In terms of loans by holders, the SME loans (15.3% of total loans) registered a 6.6% QoQ rise, or at an annualised loans growth of 17.7%. This should help dispel concerns that the merged entity is sliding in terms of its SME customer base. The growth for the SME segment was notably much stronger in 2QFY12 compared with the 2.1% QoQ rise or the annualised rate of 8.3% recorded in 1QFY11. Individuals (63.1% of total loans) loans growth was unchanged at a 2.1% QoQ in 2QFY12 (1QFY12: 2.1% QoQ) or at an annualised rate of 8.5%. Overall, taking into account the lumpy repayments as well as the softer economic environment, we believe that the annualised loans growth in 1HFY12 was strong, especially for its SME and individual loans segment. AmResearch Sdn Bhd 2

3 TABLE 2: LOANS DATA YE June (RMmil) 2QFY11 1QFY12 2QFY12 QoQ YoY Purchase of securities , ,139.9 (0.8) Purchase of transport vehicles 5, , ,439.1 (0.8) Landed properties - residential 17, , , Landed properties - non residential 5, , , Fixed assets (excl landed properties) n.m. n.m. Personal use 1, , , Credit card 2, , , Purchase of consumer durables (7.9) Construction Working capital 9, , , Mergers and acquisition n.m. n.m. Other purpose , , less Islamic Financing sold to Cagamas n.a. n.a. Total gross loan 41, , , Corporate 14, , , Consumer 27, , , Total gross loan 41, , , Breakdown of loan (%) 2QFY11 1QFY12 2QFY12 Purchase of securities Purchase of transport vehicles Landed properties - residential Landed properties - non residential Fixed assets (excl landed properties) Personal use Credit card Purchase of consumer durables Construction Working capital Mergers and acquisition Other purpose less Islamic Financing sold to Cagamas Total gross loan Corporate Consumer Total gross loan Higher CASA and fixed deposit, driven by business and individual deposits Total deposit has resumed a healthier growth rate, at 4.4% QoQ in 2QFY12 vs. a -0.5% QoQ decline in 1QFY12 (although the 1QFY12 s drop came largely from a 17.2% QoQ decline in short-term corporate placements). The growth in deposits was driven this time by CASA, which grew 5.4% QoQ in 2QFY12. This is much stronger if compared to 1QFY12 s 1.5% QoQ drop. With the higher growth, CASA contribution was nudged upwards to 23.9% in 2QFY12, from 23.7% in 1QFY12. Fixed deposits grew 3.7% QoQ in 2QFY12, also above the 1.6% QoQ rate seen in 1QFY12. For deposits by holders, the individuals segment (48% of total deposits) deposit growth remained strong at 4.7% QoQ in 2QFY12 (1QFY12: 5.1% QoQ). What is even more positive was continuing robust expansion in the business enterprise segment (46% of total deposits) with deposits for this segment rising 7.7% QoQ in 2QFY12 (1QFY12: 7.7% QoQ). AmResearch Sdn Bhd 3

4 TABLE 3: KEY RATIOS Year-end 30 June 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 Profitability Average net asset yields (%) Average cost of funds (%) Average NIM (%) - per company na. na Average NIM (%) - per AmResearch estimates Average spread (%) Fee income ratio (%) Cost to income ratio (%) Effective tax rate (%) Annualised ROE (%) Balance Sheet Gross loans & advances (RMm) 40, , , , , ,913.5 Gross loan growth (% qoq) Deposits of customers (RMm) 70, , , , , ,232.9 Deposit growth (% qoq) (0.5) 4.4 Gross loan/deposit ratio (%) CASA contribution (%) Asset Quality Gross impaired loans (RMmil) , , ,753.4 Gross impaired loans ratio (%) Net NPL ratio (%) Loan loss cover (%) NPL movement: New impaired loans formation (RMmil) Reclassed to performing Recoveries Subtotal: Reclassed to performing + recoveries Impaired loans written-off Credit costs (%p) (0.01) Capital Tier 1 CAR after proposed dividend (%) Total RWCR after proposed dividend (%) The company explained that it had gone on a more aggressive retail deposit growth to bring down its loan-todeposit ratio (LDR) for the retail segment closer to now 105% in 2QFY12, from well above 100% just post the merger with EON Bank. Retail LDR used to range at close to the group s LDR levels of 55% to 60% before the merger. We understand the business banking s deposits were driven partly by its SME segment. Strong increase in NIM on QoQ basis The company reported a net interest margin (NIM) increase of 9bps QoQ, attributed to a better yield management of its loan mix and rise in CASA. The company expects NIM to be sustained if the economy recovers. We view NIM performance as unexpectedly strong, given competitive pressure on both the loan and deposit segments overall in the industry. Overall, we are positive on its deposit growth and efforts to improve its liquidity at the retail segment. The latest deposit data indicates that HLBB continues to build on its deposit franchises from both the consumer and business segments. AmResearch Sdn Bhd 4

5 TABLE 4: NPL DATA Gross NPL by Sector (RMmil) 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 QoQ YoY Purchase of securities (32.7) (16.0) Purchase of transport vehicles Landed properties - residential (2.8) 80.7 Landed properties - non residential (5.8) 27.3 Personal use Credit card Purchase of consumer durables n.m. n.m. Construction Working capital (5.2) 85.5 Merger and acquisition n.a. n.a. Other purpose ,541.3 Total gross NPL , , ,753.4 (1.5) Gross NPL ratios by sector (%) 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 Purchase of securities 2.3% 2.2% 0.8% 1.3% 0.9% Purchase of transport vehicles 1.0% 1.0% 1.1% 1.2% 1.3% Landed properties - residential 1.4% 1.4% 1.7% 1.5% 1.5% Landed properties - non residential 1.3% 1.2% 0.9% 0.9% 0.8% Personal use 4.2% 3.8% 2.6% 2.6% 2.5% Credit card 1.0% 1.0% 1.4% 1.6% 1.6% Purchase of consumer durables 0.0% 0.0% 8.5% 8.9% 9.7% Construction 4.3% 3.5% 5.1% 4.5% 4.2% Working capital 4.3% 3.5% 5.1% 4.5% 4.2% Merger and acquisition 0.0% 0.0% 0.0% 0.0% 0.0% Other purpose 0.1% 0.3% 1.3% 2.6% 2.9% Total gross NPL ratio 2.1% 1.9% 2.2% 2.1% 2.0% NON-INTEREST INCOME RECOVERED The non-interest income line recovered this quarter with a +24.5% QoQ rise compared with the 19.3% QoQ drop in 1QFY12. This was due largely to the lesser unrealised loss in financial assets held-for-trading and derivatives of RM31.9mil in 2QFY12, compared to the larger loss booked in of RM57.1mil in 1QFY12. The 1QFY12 loss was related to interest rate swap contracts, which were undertaken to hedge HLBB s fixed rate portfolio. We believe the 1QFY12 unrealised loss was similar in nature. Besides the lesser unrealised loss, the strong non-interest income was also boosted by a better traction in the more sustainable fee income portion with service charges and fees recording a robust 81% QoQ rise to RM22.0mil in 2QFY12, from 1QFY12 s RM12.2mil. Commission income rose 3.1% QoQ to RM29.3mil in 2QFY12, from RM28.4mil in 1QFY12. We believe the gains came from a higher mix of SME customers overall. Foreign exchange division (which reflects treasury activities and forex fees on third party customers) posted a lower gain of RM35.5mil in 2QFY12 compared with RM44.6mil in 1QFY12; this was not surprising considering the volatility in forex. The fee income ratio has now been brought up to 21.9% in 2QFY12 from 19.2% in 1QFY12. ASSET QUALITY REMAINS TOP NOTCH Absolute gross impaired loans fell 1.5% QoQ; thus improving the overall gross impaired loans ratio to 2.0% in 2QFY12 from 2.1% in 1QFY12. In terms of gross impaired loans by segment, the only major uptick that we have detected was the continuing increase in the auto gross impaired loans segment. Gross impaired loans for auto had risen 12.5% QoQ to RM232.2mil in 2QFY12 from RM206.6mil in 1QFY12 (see Table 4 above). The gross impaired loans ratio for the auto segment stood at 1.3% in 2QFY12, slightly higher than 1QFY12 s 1.2%. We believe this was due to continuing refinement of trigger points in relation to EON Bank s auto loan portfolio, which we believe had a different benchmark than HLBB s. AmResearch Sdn Bhd 5

6 CHART 1: BANK OF CHENGDU (RMmil) Bank of Chengdu's pre-tax profit (RMmil) (LHS) Bank of Chengdu's contribution to group PBT (%) (RHS) Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 (%) We believe that it is positive that this particular portfolio was being adjusted to HLBB s higher benchmarks overall, and thus, view the uptick as more of a merger realignment. The company hinted the higher auto NPLs is thus not related to any particular deterioration in its underlying asset quality for this segment. In terms of outlook, the company alluded that it foresees credit costs to rise if there is any substantial increase in interest rates. However, it alluded that liquidity situation in Malaysia remains healthy and thus far, it has continued to see improvements in the overall gross impaired loans. (Bank of Chengdu), fell by 43.5% QoQ to RM34.9mil in 2QFY12, from RM61.8mil in 1QFY12. We believe this was due to Bank of Chengdu moving towards FRS139 adoption, which had affected the effective interest rates estimates, and consequently the net interest income line. Secondly, we believe there were also additional overhead expenses in Bank of Chengdu s last quarter for its financial quarter ending 31 December Overall, we are not concerned about the decline, which was one-off and seasonal in nature. This is positive as the company indicted that the December to February period is historically considered a slow season in terms of repayments. Some write-backs in loan loss provisions There was an overall net write-back in loan loss provisions in 2QFY12, leading to a positive write-back of RM23.2mil, in contrast to 1QFY12 s loss of RM23.1mil. This came largely from a higher recovery at RM88.7mil in 2QFY12 compared with RM78.0mil in 1QFY12. Loan loss cover strengthens considerably Loan loss cover has been raised further to 141.9% in 2QFY12 from 137.8% in 1QFY12. Thus, HBB s loan loss cover remains the second best among the local banks that we cover, after PBB. BANK OF CHENGDU S PBT AFFECTED BY REGULATORY CHANGES AND OVERHEADS HLBB s associate pre-tax profit, which reflects contribution by its 20%-owned associate Bank of Chengdu Co Ltd AmResearch Sdn Bhd 6

7 TABLE 5: TARGETED MERGER SYNERGIES POST MERGER 2012E Year 1F Year 2F Year 3F Revenue Achieved YTD 11 Targeted remainder for rest of FY 24 Costs Achieved YTD 64 Targeted remainder for rest of FY 103 Total INTEGRATION COSTS WITHIN EXPECTATIONS In terms of integration costs arising from the merger, the company alluded that it had included a one-off costs relating to the staff voluntary separation scheme (VSS) of RM115mil in 2QFY12. This had all been entirely provided for in 2QFY12. Total integration costs (including the VSS expense of RM115mil) came up to RM127mil YTD. We had forecast an about RM103mil in integration costs for FY12, with a previous RM78mil (relating to professional and legal fees) already reflected in FY11. Thus, integration costs have now turned in slightly higher than our estimate, but we believe this will be easily compensated by its overall better performance elsewhere. MERGER SYNERGIES ABOVE EXPECTATIONS The company signalled that it has achieved overall cost synergies of RM64mil YTD, with a targeted amount of RM103mil to be achieved for the remaining quarters of FY12F (see Table 5 above). This takes overall cost synergies to RM167mil for FY12F, exceeding its target of RM143mil. Revenue synergies achieved was RM11mil YTD, with the remaining target of RM24mil to be achieved in the remaining quarters of FY12F. This is expected to take the overall revenue synergies to RM35mil for FY12F, in line with its targeted RM37mil. The revenue synergies were derived from better product sales for its mortgage and auto loans divisions. Overall annualised synergies achieved was about RM191mil, exceeding its overall RM180mil target for FY12F. The breakdown for the estimated RM191mil comprises:- 1. Revenue of RM24mil; 2. Personnel costs of RM123mil. With VSS scheme implemented, the company expects to achieve cost synergy of close to the RM115mil (relating to the VSS) on annual basis. 3. Non-personnel costs of RM44mil. Of these nonpersonnel costs, the breakdown comprises: (a) marketing cost savings of RM32mil, (b) procurement savings of RM23mil, (c) optimisation of business solutions of RM6mil and (d) branch rationalisation of RM27mil. Merger synergy realised is thus turning out well and is ahead of our expectations. MAINTAIN BUY WITH AN UNCHANGED FAIR VALUE OF RM13.00/SHARE HLBB s 2QFY12 results were strong in terms of deposit, asset quality as well as execution of its merger synergies. Share price prices in much higher loan loss provisions We believe HLBB s share price had been affected by share overhang post its rights issue in October 2011, as well as concerns over Bank of Chengdu and overall external uncertainty. The share price has recovered circa 10% from its recent low. At the current share price level, HLBB is pricing in credit costs of 84bps, compared with 100bps at the recent low in the past three months (we have modelled in 70bps). However, even at 84bps, this is way above its historical levels. To recap, HLBB s credit costs peaked at 104bps in June 2009, after recording benign levels of 13bps in September 2008, 29bps in December 2008 and 32bps in March Thus, its average credit cost for these four quarters was only 45bps. At credit costs of 84bps, this implies loan loss provision will shoot up to RM727mil (our estimate is RM610mil based on 70bps) FY12F, and net earnings will only come in at RM1,462mil or ROE of 13.8% FY12F. For comparison, our estimates are net earnings of RM1,557mil or ROE of 14.7% FY12F. To recap, the actual experience during the financial crisis of 2008, HLBB s total loan loss provision was far lower at RM157mil in FY09. As for EON Bank, credit costs were at 36bps in September 2008, 83bps in December 2008, 46bps in March 2009 and at 53bps in June These brought the average credit cost for EON Bank during the September 2008 to June 2009 period to 54bps. EON Cap s total loan loss provision was RM422mil in FY08, including a kitchen-sinking loan AmResearch Sdn Bhd 7

8 loss provision of RM197mil which was done subsequent to emergence of a new shareholder then. EON Cap posted a lower loan loss provision subsequently of RM164mil in FY09, which included the worst effects of the 2008 financial crisis. So in essence, if we were to combine EON Cap s and HLBB s worst levels of loan loss provisions experienced in FY08- FY09, the total will be up to only RM580mil, far less than the current RM727mil implied in the current share price. Thus, we believe our earnings forecasts already err on the conservative side. Latest results prove credit costs unlikely to shoot up The latest results prove that credit costs are unlikely to shoot up, particularly given the continuing excellent asset quality. In addition, Bank of Chengdu s pre-tax profit was affected largely by one-off regulatory changes. Maintain buy with unchanged fair value of RM13.00/share We like HLBB s 2QFY12 results as it reaffirms HLBB s excellent asset quality and strong execution on its targeted merger synergies, including revenue synergies. We are maintaining our BUY on Hong Leong Bank Bhd (HLBB), with an unchanged fair value of RM13.00/share. This is based on an adjusted (for rights) 14.7% ROE for FY12F, leading to a fair P/BV of 2.1x. Key catalysts for HLBB are:- (a) stronger-than-expected top line growth; (b) sustained asset quality, (c) better-thanexpected contribution from Bank of Chengdu, and (d) seamless integration in its merger with EON Bank; (e) likelihood of achieving close to its internal ROE target of 16% to 17% for FY12F. AmResearch Sdn Bhd 8

9 TABLE 6: FINANCIAL DATA Income Statement (RMmil, YE 30 Jun) F 2013F 2014F Net interest income 1, , , , ,293.1 Non-interest income Islamic banking income Total income 2, , , , ,773.2 Overhead expenses (916.5) (1,205.6) (1,911.2) (2,016.3) (2,114.8) Pre-provision profit 1, , , , ,658.4 Loan loss provisions (105.0) (137.3) (610.1) (648.2) (331.7) Impairment & others Associates Pretax profit 1, , , , ,586.6 Tax (197.3) (276.9) (444.4) (468.6) (560.4) Minority interests Net profit , , , ,026.2 Core net profit , , , ,026.2 Balance Sheet (RMmil, YE 30 Jun) F 2013F 2014F Cash & deposits with FIs 15, , , , ,515.1 Marketable securities 27, , , , ,046.2 Total current assets 43, , , , ,561.3 Net loans & advances 37, , , , ,905.1 Statutory deposits Long-term investments , , , ,837.2 Fixed assets Intangible assets , , , ,766.5 Other long-term assets 3, , , , ,039.4 Total LT assets 41, , , , ,234.5 Total assets 84, , , , ,795.8 Customer deposits 69, , , , ,352.5 Deposits of other FIs 3, , , , ,029.4 Subordinated debts , , , ,767.3 Hybrid capital securities , , , ,389.5 Other liabilities 3, , , , ,076.0 Total liabilities 78, , , , ,614.7 Shareholders funds 6, , , , ,181.0 Minority interests Key Ratios (YE 30 Jun) F 2013F 2014F Total income growth (%) n/a Pre-provision profit growth (%) n/a Core net profit growth (%) Net interest margin (%) Cost-to-income ratio (%) Effective tax rate (%) Net dividend payout (%) Key Assumptions (YE 30 Jun) F 2013F 2014F Loan growth (%) Deposit growth (%) Loan-deposit ratio (%) Gross NPL (%) Net NPL (%) Credit charge-off rate (%) (0.3) (0.2) (0.7) (0.7) (0.3) Credit charge-off rate (excl GP) (%) (0.2) 0.2 (0.6) (0.6) (0.3) Loan loss reserve (%) RWCR (%) Core (%) Source: Company, AmResearch estimates AmResearch Sdn Bhd 9

10 Published by AmResearch Sdn Bhd ( P) (A member of the AmInvestment Bank Group) 15th Floor Bangunan AmBank Group 55 Jalan Raja Chulan Kuala Lumpur Tel: (03) (research) Fax: (03) Printed by AmResearch Sdn Bhd ( P) (A member of the AmInvestment Bank Group) 15th Floor Bangunan AmBank Group 55 Jalan Raja Chulan Kuala Lumpur Tel: (03) (research) Fax: (03) The information and opinions in this report were prepared by AmResearch Sdn Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmResearch Sdn Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmInvestment Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgement as of this date and are subject to change without notice. For AmResearch Sdn Bhd Benny Chew Managing Director AmResearch Sdn Bhd 10