*Maybank Kim Eng Kopi-O (26 Oct 2021)*
Nikkei 28600.4 -0.71%
Kospi 3020.5 0.48%
SSE 3609.9 0.76%
HSI 26132.0 0.02%
TWSE 16894.2 0.03%
SET 1634.2 -0.56%
JCI 6625.7 -0.27%
STI 3201.9 -0.10%
KLCI 1587.9 -0.01%
*MKE Key Calls*
*TMBThanachart Bank - Re-rating catalyst from higher ROE*
Upgrade to BUY from HOLD as we expect better earnings growth in FY22-23E. We like TTB for its focus on loan quality to limit asset-quality risk. Looking into FY22E, its cost-to-income ratio should decline YoY as TTB booked one-off integration costs in FY21. Revenue should also improve from the synergies from the cross-selling of new products to a larger customer base. Raised FY21-23E earnings and revised up TP to THB1.35. Key risks are weak asset quality and revenue growth.
*MY*
o After falling for three consecutive trading days, the KLCI may stage a rebound today, mirroring gains in overnight Wall Street. O&G stocks could take the center stage after oil price strengthened. That said, sentiment will stay cautious ahead of the upcoming Budget 2022 (which will be tabled on 29 Oct) as well as the US GDP data. Technically, we expect the benchmark index to range between 1,577 and 1,600, with supports at 1,577 and 1,555.
o *Axis REIT (AXRB MK)*: We are positive on Axis’ proposed acquisition of a logistics warehouse in Johor for MYR32m. We maintain our earnings forecasts, DDM-TP of MYR2.20 (Ke: 6.5%) and BUY rating. We are also keeping Axis as our sector’s top pick, attributed to its resilient rental income from industrial assets and active acquisition strategy. FY21E net DPU yield is a decent 4.6%.
o *Cabnet (CABN MK)*: Its wholly-owned subsidiary CEE M&E Engineering S/B was awarded an electrical work package by Kinetics Systems Malaysia S/B. The contract, which is worth MYR22.3m, will commence 27 Oct 2021 and is expected to be completed by 28 Feb 2022. This contract marked Cabnets’s first contract win of the year and help lift its order book which stood at MYR60.2m as at end-Jun 2021. The stock is trading at a P/B of 1.2x.
o *Annum (ANNM MK)*: Its indirect wholly-owned subsidiary Annum EPCC S/B had entered into a collaboration agreement with Greentech IOT Technology S/B to undertake subcontract works for Sarawak water supply grid program amounting to approximately MYR62.3m. The collaboration will help to build up its construction pipeline. ANNM has swung back into profitability in 1H21 thanks to the timber business but this sector is cyclical in nature. Stock trades at an annualized 1H21 core P/E of 3x and a P/B of 1.1x.
For more stock ideas and market flows, access Market Insight on Maybank Trade on Apple Store and Google Play now.
Stay Ahead, Trade Smart.