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Monday, October 31, 2011

JOHOTIN - Diversifying to Reach Greater Heights (OSK)

Johore Tin Bhd (JTB) is involved in the manufacture of various tins, cans and other
containers, as well as printing tin plates via its subsidiaries. In August 2011, it
ventured into the manufacturing of dairy products, including sweetened condensed
milk and evaporated milk, via the acquisition of Able Dairies. We view JTB’s dairy
products manufacturing business positively as the move will propel its earnings
going forward. Based on our SOP valuation of JTB’s tin can business at 6.5x FY12
EPS and dairy products business at 8x FY12 EPS, we value the stock at RM1.62 and
initiate coverage with a BUY recommendation.

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