2012 OSK outlook

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Among our defensive stock calls, the Top 10 Defensive Buys are namely:
1) Axiata (FV: RM5.60) – The only listed Malaysian telco company that also offers a
regional footprint in Indonesia, Singapore, India, Bangladesh, Sri Lanka and Cambodia.
Still the cheapest Malaysian telco company at 13x PER.
2) Petronas Gas (FV: RM15.52) – Natural gas processor, importer and transmitter in
Peninsular Malaysia with 80% of profits guaranteed by its mother company, Petronas.
Growth catalyst in the form of new LNG import terminal in Melaka.
3) Telekom Malaysia (FV: RM5.15) – Incumbent fixed-line telecoms provider in Malaysia.
Making waves via its new high-speed Internet offering Unifi that is acquiring new
subscribers at a rate of 1,000 per day. Highest yields at 10–12%.
4) Guinness Anchor (FV: RM13.58) – Broadest brewery offering translates into defensive
earnings in the event of an economic slowdown. Decent yields, coupled with the 2012
growth potential coming from the UEFA 2012 football tournament.
5) AirAsia (FV: RM4.57) – Largest Low Cost Carrier (LCC) in Asia; continues to
outperform its regional airline peers. Potential IPO of regional associates and benefits
from a partnership with MAS will be the catalysts for 2012.
6) KPJ Healthcare (FV: RM5.21) – Largest private hospital provider in Malaysia, which is
growing its hospital chain by another five hospitals from the current 21 over the next
three years. Growth areas are medical tourism and retirement care.
7) QL Resources (FV: RM3.62) – Largest manufacturer of surimi in ASEAN and second
largest producer of eggs in Malaysia. It is replicating its business in Indonesia and
Vietnam over the next 12 months.
8) Media Chinese International (FV: RM1.51) – Largest publisher of Chinese language
newspapers in Malaysia. To benefit from falling newsprint prices in 2012.
9) Supermax (FV: RM5.50) – Second largest rubber glove maker in the world, which will
benefit from a fall in latex prices, while demand remains resilient.
10) TRC Synergy (FV: RM0.76) – Leading Bumiputera contractor. Shortlisted for various
packages in the KL MRT project and should be assured of some contracts over the next
12 months.