Maybank IBG Kopi-O (13 Jun 2022) Nikkei 27824.3 -1. | ShareNews2U

Maybank IBG Kopi-O (13 Jun 2022)

Nikkei 27824.3 -1.49%
Kospi 2595.9 -1.13%
SSE 3284.8 1.42%
HSI 21806.2 -0.29%
TWSE 16460.1 -0.97%
SET 1632.6 -0.53%
JCI 7086.6 -1.34%
STI 3181.7 -0.87%
KLCI 1494.0 -1.04%

MIBG Key Calls
Regional Plantations - Lower MPOB May stockpile due to Indonesia’s export ban
ndonesia’s palm oil export ban for three weeks in May boosted Malaysia’s exports that led to a MoM decline in MPOB’s May stockpile. With the export ban already lifted, Malaysia’s stockpile will gradually pick up as Indonesia regains market share amid significant build-up of inventory during the period of ban. Barring any unexpected weather anomaly, we anticipate rising global supplies of oilseeds and CPO in 2H22 to pressure CPO price on the downside. Preferred BUYs: KLK, IOI and BAL.

MY
o The KLCI is set for a cautious start after Wall Street tumbled last Friday. Multiple headwinds are clouding sentiment, namely inflation and China lockdowns. All eyes will also be on the FOMC meeting later this week. Meanwhile, the fall in crude oil and CPO prices will also weigh on the market. Technically, we expect the KLCI to range between 1,480pts and 1,510pts today, with supports at 1,475 and 1,452.

o Bermaz Auto Berhad (BAUTO MK): We expect its upcoming 4QFY4/22 results performance (in Jun) to be the best this FY, better than our/ consensus’ earlier expectation, leading us to raise FY22’s estimate by 12%. BAuto remains our key auto pick. It offers strong earnings growth, a solid balance sheet, net cash, decent dividend yields, management acumen and undemanding valuations. Our TP is pegged to 15x FY22-23. Maintain BUY and MYR2.25 TP.

o Reservoir Link (RLEB MK): Its 60%-owned subsidiary Reservoir Link Solutions S/B was awarded a contract by SEA Hibiscus S/B, an indirect subsidiary of Hibiscus (HIBI MK, CP: MYR1.27, TP: MYR1.90, BUY) to supply equipment, chemicals, technical support team, and provide laboratory facility to conduct laboratory testing, studies and expert interpretative services. The duration of the contract is for 3 years effective 18 Apr 2022. A stronger job pipeline is crucial for RLEB to offset the disappointing 1Q22 results. Stock is trading at a PB of 1.4x.

o Hong Seng Consolidated (HONGSENG MK): Entered into a MoU with EoCell Inc, which is based in Silicon Valley, California, to set out the key terms in relation to building and creating a regional manufacturing hub in Malaysia for the manufacturing of batteries for EV, and to develop power storage solutions for EV which will be supplied to EV manufacturers, assemblers, users in the South East Asia region. HONGSENG swung back to profitability in 1HFY9/22 after slipping into the red for the past four financial years. Stock trades at a PB of 13.4x and an annualized 1HFY9/22 PER of 28.5x.

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