*Maybank Kim Eng Kopi-O (18 Oct 2021)*
Nikkei 29068.6 1.81%
Kospi 3015.1 0.88%
SSE 3572.4 0.40%
HSI 25331.0 1.48%
TWSE 16781.2 2.40%
SET 1638.3 -0.16%
JCI 6633.3 0.11%
STI 3173.9 0.29%
KLCI 1598.3 0.36%
*MKE Key Calls*
*TISCO Financial Group - Look no further - highest ROE, 8% yield*
TISCO offers better earnings visibility than peers given its high NPL coverage and profitability. TISCO will leverage its expertise in auto lending and wealth management to grow its businesses in FY22E. We expect TISCO to maintain a high dividend payout ratio to improve ROE. The tier-1 ratio was 19.7% in 3Q21 vs its comfortable level at 15% so TISCO can offer c.8% dividend yield for FY21-23E. Maintain BUY and TP THB110 (2.1x FY21E P/BV, 17.7% ROE). Key risk is higher-than-expected credit cost.
*MY*
o The KLCI is set for a firm start after Wall Street ended higher last Friday. Locally, oil & gas stocks will continue to hog the limelight as crude oil rose above USD83/bbl, highest since 2014. That said, sentiment will stay cautious ahead of key statistics such as GDP, Industrial Production and Retail Sales in China which are set to release later today. Technically, we expect the KLCI to range between 1,575 and 1,625 today, with supports at 1,550 and 1,515.
o *CTOS Digital Berhad (CTOS MK)*: CTOS Digital 9M21 core net profit came ahead of our/consensus FY21E expectations, making up 85%/86% respectively. We remain upbeat on the overall credit bureau market in Malaysia, with CTOS’ growth potential further supported by strong market positioning and attractive verticals - reiterate BUY with higher MYR2.34 TP (vs. MYR2.17 previously) pegged to 2.8x PEG, in-line with updated global peer basket mean (2.6x previously).
o *Petronas Chemicals (PCHEM MK)*: We have turned positive on PCHEM’s near-to-mid-term earnings outlook, on the back of sustained price firmness in the F&M segment. We raise our FY21-23 EPS estimates by 11%/20%/6% and upgrade PCHEM to a BUY with a new TP of MYR9.70 (+11%), pegged to an unchanged 9x FY22E EV/EBITDA (10Y mean). It also has a robust balance sheet with a net cash position of MYR12.6b (MYR1.58 per share) as at end-2Q21 and offers an attractive FY21/22E dividend yield of 4.2%/3.3%.
For more stock ideas and market flows, access Market Insight on Maybank Trade on Apple Store and Google Play now.
Stay Ahead, Trade Smart.