*Maybank Kim Eng Kopi-O (2 Nov 2021)*
Nikkei 29647.1 2.61%
Kospi 2978.9 0.28%
SSE 3544.5 -0.08%
HSI 25154.3 -0.88%
TWSE 17068.2 0.48%
SET 1613.8 -0.59%
JCI 6552.9 -0.58%
STI 3219.1 0.65%
KLCI 1530.9 -2.01%
*MKE Key Calls*
*Malaysia Banking - A pick-up in September loan growth*
With the gradual opening up of the economy, we expect loan growth to strengthen in the coming months and maintain our industry loan growth forecast of 3.8% (annualized 3.4% end-Sep 2021). Positively, the pace of contraction in working capital loan applications is slowing and looks set to turn the corner. Cukai Makmur is expected to dampen banks’ earnings in FY22, but a possible offset could be lower-than-expected provisions, in our view. POSITIVE maintained.
*MY*
o Expect selling to continue in the near term though bargain hunting could emerge as investors seek undervalued stocks. All eyes will also be on the upcoming FOMC meeting and Bank Negara’s OPR decision. Technically, we expect the KLCI to range between 1,515 and 1,545, with supports at 1,515 and 1,500.
o *Greatech Technology (GREATEC MK)*: 3Q21 results were broadly in-line with our/the street’s FY21 core earnings estimates. Pending material updates from the analyst briefing later today, we maintain our BUY call, earnings forecast and TP at MYR8.05, pegged to an unchanged 49x FY22E PER. With a burgeoning orderbook and plans to double capacity by end-2022, we remain bullish on its future prospects.
o *KNM (KNMG MK)*: Its wholly-owned subsidiary KNM Process Systems S/B has signed a contract with Keppel Shipyard Limited for the supply of pressure vessel worth approximately MYR20.7m. This is the fifth contract win of the year. KNMG has secured a total of MYR193m worth of projects YTD, about 14% of FY20 revenue. Stock trades at 38x annualised 1H21 EPS.
o *Ta Win Holdings (TWH MK)*: Its wholly-owned subsidiary Ta Win Industries (M) S/B entered into a sales contract with POSCO International Corporation to exclusively supply copper rods and wires as well as other copper related products to the copper foil manufacturers based in South Korea, including all their overseas production plants through POSCO International. TWH expects to achieve an aggregated revenue of MYR2.55b. Share price has risen by approximately 107% YTD. Stock trades at a P/B of 1.8x.
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