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Maintain Outperform, but reduce valuations. Although we remain bullish on the Chinese and Vietnamese economies, we believe the US sub-prime mortgage crisis could lead to a significant reduction in export income of these countries, thus hampering consumer spending power. Given this risk, we now attach a lower 2–year PEG of 1.2x (from 1.5x previously) to value PRG’s (China) revised FY08 earnings. We also reduce our target PE multiples for the Malaysian and Vietnamese operations to 12x (from 14x) and 18x (from 20x) CY08 earnings, respectively. Indicative fair value is therefore reduced to RM9.30 from RM11.70 after applying an unchanged 20% holding company discount to the company’s RNAV of RM11.65.


Share Price : RM6.00
Fair Value : RM9.30
Recom : Outperform
(Maintained)