Highlights by Hwang on 11/9/09

Plantation Sector

Exports lose steam

· August palm oil exports dropped 9.5% m-o-m to 1.316m MT according to MPOB; offset by weak seasonal up-tick in production

· Negative bias in CPO prices may continue near term; but 4QCY09 rebound expected on lower inventory

· Top picks: Wilmar and Kencana Agri

· Malaysian palm oil production forecast cut; CY09F and CY10F CPO price maintained at RM2,300/MT

Astro (RM3.65; Fully Valued; Price Target: RM2.65; ASTR MK)

High churn, low ARPU

· 2QFY10 is in line with our FY1/10F estimate, but is below consensus, hit by highest churn in 4 years

· DCF-based price target tweaked lower to RM2.65

· Maintain Fully Valued. Absence of special dividend may disappoint speculators, with downside risk to consensus earnings.

CB Industrial Product (RM3.15; Fully Valued; Price Target: RM2.80; CBP MK)

Secured RM15.7m new contract from Central America

CBIP’s 100%-owned subsidiary, Modipalm Engineering Sdn Bhd was awarded a palm oil mill contract worth USD4.5m (RM15.7m) by Nacional Agro Industrial S.A. The contract requires CBIP to supply equipment and engineering services for a palm oil mill with an initial capacity of 15MT FFB/hour and expandable to 45MT FFB/hour at Guatemala , Central America .

Eastern and Oriental (RM1.49; Buy; Price Target: RM2.10; EAST MK)

ICSLS issue price fixed at 65sen

E&O's 1-for-2 renounceable rights issue of 8% irredeemable convertible secured loan stock 2009/2019 (ICSLS) has been fixed at 65sen each, as indicated earlier.

Malaysia Airports (RM3.40; Buy; Price Target: RM4.50; MAHB MK)

Yesterday’s off-market trade may involve Khazanah selling down its stake

There are talks that the 55m shares (5% of total MAHB’s shares) traded off-market yesterday morning at RM3.30 per share (3% discount to the last closing price), may likely involve Khazanah Nasional paring down its 72.7% stake. If this is true, it is in line with Khazanah’s intention to gradually reduce its stakes in government-linked companies (GLCs) to improve the stock market liquidity. Khazanah is the Malaysian government’s investment arm.