RHB Equity 360° - 12 May 2010 (AFG, Daibochi, B-Toto, Kencana, Petra Perdana, Kurnia Asia, Hartalega, PetGas;Technical: Latexx)

Visit Note - According to press reports, the Board has identified a replacement for Datuk Bridget Lai as group CEO and will announce the person’s name once BNM approves the appointment. - Notwithstanding the absence of a CEO these past few months, management reassured us that it was business as usual for the group with consumer and commercial banking remaining as the main areas of focus for the group. Management targets “above industry” loan growth, which we believe is achievable given the group’s niche in the SME and consumer segments. - Despite having the highest CASA as a percentage to total deposits, AFG’s unadjusted NIM is the third lowest among peers. Nevertheless, we think this would mean that the company has room to manoeuvre and can be competitive in terms of pricing (which would indirectly translate into loan growth). - AFG is expected to announce its 4QFY03/10 results next week. We expect AFG to post 4Q net profit of around RM35-45m (vs. 3QFY10 net profit of RM99.9m) with the qoq drop resulting from the normalisation of LLP (after the recovery of a corporate loan in 3Q) as well as another RM9.6m impairment provision on the Idaman CLO (3QFY10: nil for Idaman CLO). We do not expect any final dividend.