*Maybank Kim Eng Kopi-O (22 Nov 2021)*
Nikkei 29745.9 0.50%
Kospi 2971.0 0.80%
SSE 3560.4 1.13%
HSI 25050.0 -1.07%
TWSE 17818.3 -0.13%
SET 1645.1 -0.36%
JCI 6720.3 1.26%
STI 3232.3 -0.14%
KLCI 1525.5 0.11%
*MKE Key Calls*
*Quality Houses - Earnings upturn from 4Q21; U/G to BUY*
U/G to BUY from HOLD with a higher TP of THB2.56, offering 13% upside. After a three-year of downturn period, we expect its quarterly performance to gradually improve QoQ from 4Q21 onwards. As one of the well-known upper-end developers, QH should be a beneficiary of 100% LTV. Hence, it looks to increase the value of new launches for FY22E by 30-35% YoY. We estimate QH’s FY22-23 earnings to grow 23% and 9% YoY. We forecast FY22-23 dividend yield to increase to above 5% pa.
*MY*
o Market could be volatile after Wall Street ended mixed last Friday. Sentiment will also stay cautious ahead of key statistics such as the manufacturing and services PMI in the US. That said, exporters could be in the spotlight after USD continued to strengthen against MYR. Technically, we expect the benchmark index to range between 1,515 and 1,545 today, with supports at 1,515 and 1,500.
o *Bumi Armada (BAB MK)*: 9M21 core earnings made up 75%/ 87% of ours/ consensus FY estimates respectively, on the back of a sequentially softer 3Q21, mainly due to lower FPSO profits. Overall, its turnaround story is beginning to gain traction. Improving cashflows and monetizing non-core assets are its key KPIs. It will continue to de-gear, seek redeployment opportunities (FPSO Claire) and deliver FPSO Kakinada by 1H22. Our TP is SOP-based. Maintain BUY and MYR0.58 TP.
o *AE Multi (AEM MK)*: Its wholly-owned subsidiary AE Multi Industries S/B was awarded an EPCC contract by Fintec Glove S/B to commission up to 14 glove-dipping lines for the purpose of manufacturing medical-grade nitrile gloves. The contract is worth MYR49.4m.This is AEM's third EPCC contract since its diversification into glove manufacturing solutions business in Feb 2021. Stock is trading at a P/B of 0.3x.
o *Elsoft (ELSR MK)*: Reported a 8% YoY increase in 3Q21 PATMI, which lifted its 9M21 net profit to MYR5.4m (+34% YoY). 9M21 revenue jumped 23% YoY thanks to increased demand in smart devices industry. Meanwhile, positive contribution from associate company also led to a 3.5ppts expansion in PBT margin to 34.9% (9M20: 31.4%). ELSR’s primary markets are in the automotive, smart devices and general lighting industries. Stock trades at 26.4x consensus FY22 EPS. The group has no borrowings at end-Sep 2021.
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