Maybank IBG Kopi-O (3 Mar 2022) Nikkei 26393.0 -1.68% | Info Pelaburan Saham - Maybank Investment Bank Ipoh

Maybank IBG Kopi-O (3 Mar 2022)

Nikkei 26393.0 -1.68%
Kospi 2703.5 0.16%
SSE 3484.2 -0.13%
HSI 22343.9 -1.84%
TWSE 17867.6 -0.17%
SET 1689.8 -0.26%
JCI 6868.4 -0.77%
STI 3244.4 -1.04%
KLCI 1598.1 0.10%

Maybank IBG Key Calls
4Q21 Results Roundup: Turning the corner
4Q21 research universe core net profit was prima facie flattish QoQ (+8 YoY) but this was primarily due to gloves sector earnings slump (-65% QoQ); 9 sectors saw improved core profits both YoY/QoQ I.e. Plantation, Petrochem, Consumer, Property, REITs, Const/Infra, Healthcare, Tech and Auto. Surging commodity prices (oil & gas, aluminium, CPO) are reinforcing KLCI relative outperformance, with c.24% of index weighting being commodities-related stocks. End-2022 1,710(+7%) KLCI target is maintained.

MY
o Expect another volatile session amid concerns over external headwinds such as the Russia-Ukraine conflicts. Sentiment will also stay cautious ahead of BNM’s MPC meeting later today. That said, O&G stocks may continue to steal the limelight after oil price rallied overnight. Technically, we expect the KLCI to range between 1,570pts and 1,620pts today, with supports at 1,570 and 1,530.

o Oil & Gas: PETRONAS’s improved financials in FY21 are not a surprise; in line with its global peers’ performance. Similarly, it is targeting for a higher capex spend in FY22 (+31%-63% YoY; stronger in 2H). It is also accelerating its energy transition strategy, allocating 20% of its 5-year capex (2022-26) for clean energy solutions, targeting renewables, hydrogen and green mobility markets. Our key BUYs are Yinson, Dialog, Hibiscus and BArmada. Velesto, WSC, MMHE, Favelle and Icon are our SMID BUYs.

o TCS Group Holdings (TCS MK): Its wholly-owned subsidiary TCS Construction S/B was awarded a MYR255m contract by Remedy Power S/B to undertake foundation and main building works for a mixed-use development project in Taman Desa, Kuala Lumpur. This is the first project award of the year, and should lift the outstanding order book which stood at MYR1.6b at end-Dec 2021. Stock trades at 20x trailing 12-month EPS. It is sitting on a net cash of MYR8.1m at end-Dec 2021, about 6% of its market capitalization.

o Willowglen MSC (WLW MK): Its wholly-owned subsidiary Willowglen (Malaysia) S/B was awarded a contract valued at approximately MYR14.4m by Sapura Rail Systems S/B for the systems package-integrated supervisory control system in respect of rapid transit system. This is the fourth project award in FY22. With the latest project win, WLW has secured approximately MYR38.4m worth of jobs YTD, equivalent to 22% of its FY21 revenue. Stock trades at 12.3x trailing 12-month EPS. It is sitting on a net cash of MYR76m at end-Dec 2021 (or MYR0.16/sh or 42% of share price).

o Aneka Jaringan (ANEKA MK): Its wholly-owned subsidiary Aneka Jaringan S/B was awarded a MYR20.2m contract to undertake piling and substructure works for a condominium project at Setapak, Kuala Lumpur. This is the third project award in FY8/22, bringing total win to approximately MYR50.5m, equivalent to 41% of FY8/21 revenue. However, ANEKA has been loss making since FY8/21 but the reopening of economy should bode well for the ANEKA. Stock trades at a PB of 0.9x.

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