RHB Equity 360° - 7 June 2010 (KPJ; Technical: AirAsia, Gamuda)

Company Update - There has been an increase in M&A activity in the healthcare sector recently, including Khazanah Nasional’s partial general offer for Singapore-listed Parkway Holdings’ shares and the start of bidding for Australia-listed Healthscope by private equity groups and US-based healthcare companies. - Khazanah’s partial offer for Parkway values the shares at FY10-11 PER of 27.2x and 20.1x respectively, vs. 22.3x and 16.5x before the offer was announced (i.e. a premium of around 22%). As for Australia-listed Healthscope, the top bid of A$1.84bn (or A$5.80/share) so far values the company at a CY10 PER of 17.1x. These large takeover premiums support our view that there is significant growth potential for the healthcare sector in the region.