PP 7767/09/2010(025354)

27 August 2010
RHB Research
Corporate Highlights

Malaysia
Institute Sdn Bhd
A member of the
RHB Banking Group
Company No: 233327 -M

R e su lts N ot e
27 August 2010
MARKET DATELINE

YNH Property Share Price

Fair Value
:
:
RM1.70
RM1.86
No Surprises Recom : Market Perform
(Maintained)

Table 1 : Investment Statistics (YNHPROP; Code: 3158) Bloomberg: YNHB MK

Net Net
FYE Turnover profit EPS Growth PER C.EPS* P/CF P/NTA ROE Gearing GDY
Dec (RMm) (RMm) (sen) (%) (x) (sen) (x) (x) (%) (%) (%)
2009 246.6 51.9 12.9 (36.8) 13.2 - 14.1 1.0 7.6 25.2 1.8
2010f 292.8 63.6 15.8 22.6 10.8 15.4 17.4 0.9 8.6 17.7 2.3
2011f 360.8 71.0 17.6 11.6 9.7 18.6 n.m. 0.9 9.0 25.8 2.6
2012f 408.8 81.8 20.3 15.2 8.4 - 28.0 0.8 9.7 27.2 3.0
Main Market Listing /Non-Trustee Stock/Syariah Approved Stock By The SC * Consensus Based On IBES Estimates

RHBRI Vs. Consensus

♦ Within expectations. YNH’s 2Q10 net profit of RM16m (+3.8% yoy; Above
+8.6% qoq) came in within our and consensus estimates. Key projects In Line
Below
that underpinned earnings for the quarter include Lot 163 Suites (KL),
Ceriaan Kiara (Mont’ Kiara), and township development in Taman Manjung Issued Capital (m shares) 405.3
Baru (Seri Manjung), Taman Singa Baru, Taman Pegawai, Taman Emas, Market Cap (RMm) 689.1
Daily Trading Vol (m shs)
and sales of development land. A 3 sen interim single tier dividend was 0.4
52wk Price Range (RM) 1.45-1.918
declared, in line with our full year dividend forecast of 3.9 sen.
Major Shareholders: (%)
♦ Rolling out Fraser Residence in end 2010. Fraser Residence will be Yu Family 32.3
LTH 5.8
rolled out in end 2010. It is a mixed development project (next to
Aberdeen 10.3
Renaissance Hotel KL), comprising serviced residences, office suites and a
retail mall, with a total GDV of RM650m. The selling price for the 446 units
of serviced residences (fully furnished with a built-up area of 600-1,600 sq FYE Dec FY10 FY11 FY12
EPS chg (%) - - -
ft) will be between RM900 – RM1,100 psf with 8% yield guarantee.
Var to Cons (%) 2.5 (5.3) -
Preliminary bookings have already achieved close to 200 units.
Construction of the project has commenced, currently at piling stage. As PE Band Chart
such, we believe revenue recognition will be fast once the project is
launched officially.
PER = 16x

♦ 60% sold for Kiara 163 commercial component. The take-up rate for
PER
PER
=
=
12x
8x
the commercial component of Kiara 163 has achieved 60%, generating PER = 4x

total sales of about RM200m. Going into 2011, YNH will launch the 580
serviced apartment units. Selling price is tentatively at RM800 psf with 8%
rental guarantee. With smaller unit size (built-up area of 650-1,200 sqf),
we believe it will attract good demand.
Relative Performance To FBM KLCI
♦ Forecast. Maintained.

♦ Risks. The risks include: (1) Failure to sell Menara YNH –office; (2) FBM KLCI

Competition from peers; and (3) Delays in launches, approvals and YNH Property
construction works.

♦ Investment case. Fair value is unchanged at RM1.86, based on a 40%

discount to RNAV. Maintain Market Perform.

Joshua CY Ng
Please read important disclosures at the end of this report. (603) 92802237
joshuang@rhb.com.my

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Table 2. YNH Prop Quarterly Results

QoQ YoY
FYE Dec (RMm) 2Q09 1Q10 2Q10 1H09 1H10 YoY (%) Comments
(%) (%)
Higher revenue in 1H10 was
contributed by progressive billings
from Lot 163 Suites (KL), Ceriaan
Turnover 74.0 93.8 65.1 (30.6) (12.0) 136.9 158.9 16.0
Kiara (Mont’ Kiara) and sales of its
development properties in
Manjung.
EBIT 23.7 23.7 25.6 7.8 8.1 46.2 49.3 6.9
Net interest (2.7) (3.2) (2.5) (21.1) (7.2) (5.1) (5.7) 11.5
Pretax profit 21.0 20.6 23.1 12.3 10.1 41.1 43.6 6.3
Taxation (5.5) (5.8) (7.0) 21.4 27.8 (10.4) (12.8) 23.1
Net profit 15.5 14.8 16.0 8.6 3.8 30.6 30.8 0.5 In line.

EPS (sen) 4.1 3.7 4.0 9.9 (2.7) 8.2 7.7 (6.4)

Gross DPS (sen) 3.1 0.0 3.0 3.1 3.0

NTA/share (RM) 1.7 1.8 1.8 1.7 1.8
EBIT margin (%) 32.0 25.3 39.3 33.7 31.0
Pretax margin (%) 28.3 21.9 35.4 30.0 27.5
Tax rate (%) 26.3 28.2 30.5 25.4 29.4

Table 3. Earnings Forecasts

FYE Dec (RMm) FY09a FY10F FY11F FY12F

Revenue 246.6 292.8 360.8 408.8

Operating profit 78.5 97.0 107.6 125.1
Interest expenses (11.8) (11.5) (11.9) (14.1)
PBT 70.5 86.5 96.4 111.3
Tax (18.6) (22.8) (25.4) (29.5)
Net profit 51.9 63.6 71.0 81.8
EPS (sen) 12.9 15.8 17.6 20.3
DPS (sen) 3.0 3.9 4.4 5.1
Source: Company data, RHBRI estimates

Table 4: RNAV breakdown

Landbank Remaining NBV Market Equity Surplus
size (acres) (RM psf) Value (RM psf) interest (RM mil)
Manjung, Perak 817 4.2 8.0 100% 94.7
Menara YNH 3 512.9 1,000.0 100% 44.6
139.2

Project Remaining Remaining Equity NPV @ 13.2%

GDV (RM
size (acres) mil) interest (RM mil)
Kiara 163 6 875 100% 35.6
Fraser Residence 2 533 90% 66.4
Projects 1-5 Duta 18 1,000.0 90% 73.3
Genting project 95 1,960.0 100% 137.9
313.3

Total projects NPV and land net surplus 452.5

Add: Unbilled sales (exclude Menara YNH podium) 112.5
Add: NTA as at Dec 2009 694.87
Total RNAV 1,259.88

No. of shares (mil) 403.23

Basic RNAV per share 3.12

Outstanding ESOS 5.80

Proceeds from ESOS, assuming full
conversion 6.61
Total RNAV after ESOS conversion 1,266.48
Enlarged share base (mil) 409.03

Fully Diluted RNAV per share 3.10

Discount 40%
Target price 1.86

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IMPORTANT DISCLOSURES

This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI and RHB Investment Bank Berhad
(previously known as RHB Sakura Merchant Bankers Berhad). It is for distribution only under such circumstances as may be permitted by applicable law. The
opinions and information contained herein are based on generally available data believed to be reliable and are subject to change without notice, and may differ or
be contrary to opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This report is not to be
construed as an offer, invitation or solicitation to buy or sell the securities covered herein. RHBRI does not warrant the accuracy of anything stated herein in any
manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against RHBRI. RHBRI and/or its associated persons
may from time to time have an interest in the securities mentioned by this report.

This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives
of persons who receive it. The securities discussed in this report may not be suitable for all investors. RHBRI recommends that investors independently evaluate
particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a particular investment or
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“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors,
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services from the companies in which the securities have been discussed/covered by RHBRI in this report or in RHBRI’s previous reports.

This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been reviewed by, and may not reflect
information known to, professionals in other business areas of the “Connected Persons,” including investment banking personnel.

The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based
upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

The recommendation framework for stocks and sectors are as follows : -

Stock Ratings

Outperform = The stock return is expected to exceed the FBM KLCI benchmark by greater than five percentage points over the next 6-12 months.

Trading Buy = Short-term positive development on the stock that could lead to a re-rating in the share price and translate into an absolute return of 15% or more
over a period of three months, but fundamentals are not strong enough to warrant an Outperform call. It is generally for investors who are willing to take on
higher risks.

Market Perform = The stock return is expected to be in line with the FBM KLCI benchmark (+/- five percentage points) over the next 6-12 months.

Underperform = The stock return is expected to underperform the FBM KLCI benchmark by more than five percentage points over the next 6-12 months.

Industry/Sector Ratings

Overweight = Industry expected to outperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Neutral = Industry expected to perform in line with the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Underweight = Industry expected to underperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

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securities, subject to the duties of confidentiality, will be made available upon request.

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actions of third parties in this respect.

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