Faber – Concession agreement – Likely to be renewed

Faber – Concession agreement – Likely to be renewed Outperform Visit Note- Faber recently spoke at our GLC Day. In Oct 2009, the company had submitted its application for arenewal for the concession and is currently waiting for the reply from the Government, which would only beknown some time in October this year. We see little risk of Faber losing the concession given its politicallinks as well for its size and geographical reach.- Faber plans to expand in the healthcare sector, and is positioning itself for new opportunities includingowning or managing hospitals to broaden its income stream. Faber is already managing non-medicalservices in hospitals across Malaysia, India and United Arab Emirates, and therefore management believesthe company has the capability of moving up the value chain in the hospital business.- Faber is currently on track to launch new property projects in 2010, which consists of three propertylaunches, with total estimated GDV of approximately RM495m.- We maintain our earnings forecast for now. Our SOP fair value has been raised to RM2.94 (from RM2.69previously), after upgrading our target CY10 PER for the non-concession IFM business to 14x from 9xpreviously, in line with our target FY10 PER for KPJ Healthcare. Maintain Outperform.