CIHLDG - A Lift From Huge Disposal Gain (OSK)

CIH’s 1HFY12 net profit surged to RM657.7m from RM22.8m y-o-y, mainly attributed to the RM688.4m disposal gain following the sale of its wholly-owned bottling subsidiary. The company’s earnings would have come in at RM1.7m if the one-off gain was excluded. We revise our FY12 earnings to solely reflect its DOE unit’s contribution. As CIH has yet to acquire a new core business and the earnings from its tap and sanitary ware business is likely to be volatile due to the weaker economic outlook, we maintain our TAKE PROFIT call, with a FV of RM0.99.