Affin Daily Insight (LV) - 28 August 2014 - MMC / AXIATA / RHBC / TM / GENP / JTIASA / MPI / APM / SWKPLNT / ARMADA / ECONOMY - ECONOMIC FOCUS

Top Calls

Results Note � MMC (BUY, upgrade from ADD) - Stronger Malakoff, KVMRT contribution lift earnings MMC reported a stronger 1H14 core net profit of RM152.1m (+209% yoy) driven by: (i) higher Malakoff earnings contribution due to positive recovery progress from Tanjung Bin power plant; and (ii) higher earnings from Klang Valley MRT project. Overall, the annualised results are broadly within consensus and our full year earnings forecast. While the group�s 1H14 core net profit accounts for 56-60% of street and our full year earnings forecast, we expect a normalisation of KVMRT earnings and higher effective tax rate (4.5% in 1H14) to weaken 2H14 earnings. We maintain our earnings forecast but upgraded MMC to BUY (from ADD) with an unchanged TP of RM3.15 based on a 15% discount to RNAV. Key re-rating catalysts are stronger-than-expected earnings, the listing of Malakoff and potential corporate restructuring of the group�s key assets.

Other Calls

Results Note - Axiata (REDUCE, maintain) - Broadly inline

Results Note � RHB Capital (REDUCE, maintain) - Not a bad quarter, but 2H14 credit cost to normalize

Results Note � TM (BUY, maintain) - Weaker earnings, but not a surprise

Results Note - Genting Plant (ADD, maintain) - CPO prices trended lower, below expectations

Results Note - Jaya Tiasa (REDUCE, maintain) - FY14 earnings slightly below expectations

Results Note - MPI (BUY, maintain) - FY14 core net profit surged by >4 folds to RM66m

Results Note - APM (BUY, maintain) - Margins impacted by higher operating cost

Results Note - Sarawak Plant (BUY, maintain) - Below expectations; Low implied land valuation

Flash Note - Bumi Armada (ADD, maintain) - Rights price fixed at RM1.35 per share

Economy - Economic Focus - Investment Trends - Higher FDI inflows into Asean, supporting investment

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