GAMUDA, TM

GAMUDA- MRT Works Ready to Roll

By OSK Research
9 Apr 2012


BUY. All in, we are positive on the progress of the rollout and expect an acceleration in the award of contracts
in the coming months, with MMC-Gamuda perfecting its role as the caretaker of the elevated portion of the
SBK line. Hence, we maintain our BUY call on Gamuda with an unchanged FV of RM4.58, based on SOP
valuation. Moving forward, we expect more developments on the RM8bn Gemas-Johor Bahru Electrified
Double Tracking project to unfold, and which Gamuda is likely to bid  for in partnership with China Railway
Construction Corp come 3Q12. At the same time, we believe the current positive sentiment on the whole 
construction sector is set to continue, driven by rising news flow on the proposed Lines 2 and 3 of the KV
MRT project.


Price- RM3.59
Fair Value- RM4.58


[Source]

Telekom Malaysia, TM- Super Speed Me
By OSK Research
9 Apr 2012


TM has introduced a new marketing campaign to encourage more Streamyx users to
upgrade to Unifi  as well as to spur existing Streamxy users to trade-up to a 1Mbps  or
faster plan. At a function over the weekend, CEO Dato’ Zamzamzairani Mohd Isa said that
TM  has allocated RM2.5bn in capex for 2012, mostly  for new businesses  as well as
content and applications for Unifi.


RM2.5bn capex for FY12. The capex target is consistent with its guidance of RM2.5bn–
RM2.6bn post-FY11 results announcement. We believe this  amount  comprises: (i)
business-as-usual (BAU) capex of RM1.1bn–RM1.2bn, and (ii) HSBB capex of about
RM1.4bn. Note that HSBB capex is peaking this year as TM has almost attained the
1.3m target premises to be passed for 2012 under the agreement with the government.
Management expects  FY12  BAU capex to be slightly higher than the RM1.14bn for
FY11 as it is on a drive to replace older assets  as well as introducing a new billing
system. TM spent RM1.4bn for HSBB last year, with its portion of the spending (net of
government subsidy) at RM712m. The remaining subsidy from the government amounts
to some RM140m.


Super Speed Me. Under its latest marketing campaign which is valid until 30 June, TM
is offering existing Streamyx subscribers the option to upgrade to Unifi with the benefit
of maintaining their current subscription for 3 months. The same offer applies to current
Streamyx subscribers upgrading to a 1Mbps  of faster  plan. The promotion for
Streamyx is similar to its reasonably successful ‘Super Upgrade’ promotion offered 2
years ago to lure lower speed users to upgrade to a 1Mbps line which now makes up
close to 60% of its  1.7m Streamyx users. We gather from TM that Unifi subscribers
have surpassed 315,000 at end-1QFY12, marking  another record  in terms of
subscriber addition and topping the 76k net-adds in 4QFY11. More than 30% of the
new subscribers come from its existing TM Streamyx user base.

Maintain BUY based on FV of RM5.70. TM remains one of our top picks for exposure
to the sector in addition to Axiata. Key share price re-rating catalysts are: (i) additional
capital management (ii) stronger-than-expected earnings, and (iii) improved Unifi and
wholesale contributions.

Price- RM5.37
Fair Value- RM5.70


[Source]