*Maybank Kim Eng Kopi-O (17 Nov 2021)*
Nikkei 29808.1 0.11%
Kospi 2997.2 -0.08%
SSE 3521.8 -0.33%
HSI 25713.8 1.27%
TWSE 17693.1 0.33%
SET 1644.0 0.32%
JCI 6651.2 0.53%
STI 3238.8 -0.05%
KLCI 1522.9 0.04%
*MKE Key Calls*
*Bumitama Agri - Bigger beneficiary of CPO spot prices going forward*
BAL has immaterial forward sales going into 4Q21 and 2022. With still elevated CPO price in 4Q21 and higher QoQ output, BAL may just deliver another set of strong quarterly results. BAL is committed to its dividend policy to pay up to 40% of recurring profits. BUY for its attractive valuation of ~6x PER and net dividend yields of ~6%. We maintain our BUY call with an unchanged TP of SGD0.93 on 11x FY22 PER, its 5Y mean.
*MY*
o The firmer overnight US markets may lend support to the KLCI but sentiment will remain cautious as investors switch their focus to earnings season. Plantation stocks may come under pressure after CPO price dived yesterday. Technically, we expect the benchmark index to range between 1,515 and 1,535 today, with supports at 1,515 and 1,500.
o *Dialog Group (DLG MK)*: 1QFY22 core earnings made up 21% of our FY estimate. Its tank terminal operations remain its core earnings contributor and developing Pengerang to its full potential is key, which will take about 10 years to be fully developed. Its green energy agenda is also starting to shape up, a positive for its sustainability roadmap. Maintain BUY and MYR4.90 TP.
o *GHL Systems (GHLS MK)*: With improving visibility on economic recovery and border reopening, GHL is well positioned for an accelerated TPV growth from 4Q21 onwards, reinforced by increasing partnerships momentum, most recently including Lotuss Stores and Atome, within its payments ecosystem. We reiterate BUY with unchanged TP of MYR2.25 pegged to 51x FY22 PE target (which is +1sd above its 5Y mean).
o *JF Technology (JFTB MK)*: Reported a 26% YoY and 45% QoQ jump in 1QFY6/22 PATMI to a record high of MYR5m, mainly attributable to a 24% YoY rise in revenue and margins expansion, which more than offset a normalized tax. A couple of observations: 1) its test engineering solution business has started to contribute this quarter; 2) its new manufacturing facility in Kunshan, China has commenced operations; and 3) the construction of its new facility in Kota Damansara is expected to be completed by 3Q22. Stock trades at 70x annualized 1QFY6/22 EPS but it is sitting on a net cash of approximately MYR80.4m at end-Sep 2021.
o *CJ Century Logistics (CLH MK)*: Signed a warehousing, fulfilment and logistics services agreement with Astro Malaysia (ASTRO MK, TP: MYR1.36, Buy) unit MEASAT Broadcast Network Systems S/B . The partnership will commence on 1 Dec for an initial period of three years, with an option to extend for two more years upon conclusion of the initial term. YTD, share price has risen 39.5%. Stock is trading at a P/B of 0.9x.
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