*Maybank Kim Eng Kopi-O (23 Nov 2021)*
Nikkei 29774.1 0.09%
Kospi 3013.3 1.42%
SSE 3582.1 0.61%
HSI 24951.3 -0.39%
TWSE 17803.5 -0.08%
SET 1649.5 0.27%
JCI 6723.4 0.05%
STI 3237.1 0.15%
KLCI 1526.9 0.09%
*MKE Key Calls*
*Chularat Hospital - Hospital management a growth driver*
3Q21 core profit of THB1.6b surged 171% QoQ and 455% YoY, driven by ‘Covid income’ of THB3.0b, up 279% QoQ, as Covid infection hit the peak in 3Q21. Excluding the Covid income, revenue declined by 8% YoY to THB1.36b, as normal patient traffic was impacted by fear of contracting Covid in hospitals. We raise TP by 2.3% as we revise FY21E core profit up by 39% because of higher ‘Covid income’ than expected in FY21E but maintain FY22-23 forecasts. In the long term, there could be more hospital management income. CHG is negotiating these, but we won’t include these in our forecasts until contracts are finalized. Maintain BUY, increase TP to THB4.40
*MY*
o Expect KLCI to be volatile as risk appetite may be affected during earnings season. Sentiment will also stay cautious ahead of ahead of key statistics such as the manufacturing and services PMI in the US. Exporters and O&G stocks, however, could be in the spotlight after USD continued to strengthen against MYR and oil price edged higher. Technically, we expect the benchmark index to range between 1,520 and 1,540 today, with supports at 1,515 and 1,500.
o *Wah Seong (WSC MK)*: WSC’s 9M21 results is on track to meet our FY expectation. The setback in 3Q21 and its sub-par FY21 outlook have been well-flagged. Instead, focus is on its FY22 performance onwards, with its Qatar ops poised to inspire growth, delivering similar impact as its Nordstream 2 (NS2) project in 2017. Valuations are undemanding, should WSC deliver to its expectation. Our TP is based on 10x FY22 PER (unchanged). Maintain BUY and MYR1.20 TP.
o *Pestech (PEST MK)*: Its wholly-owned subsidiary company Pestech S/B was awarded a contract in relation to the South Luzon Substations Upgrading Project 2. The contract consists of offshore and onshore portions which are worth USD23.5m and PHP710.8m respectively (approximately MYR156.9m in aggregate). The contract will help to lift its outstanding order book which stood at MYR1.8b as at end-Jun 2021 (approximately 2x its FY6/20 revenue). Stock is trading at 10.1x FY6/22 consensus EPS.
o *Advancecon (ADVC MK)*: Its wholly-owned subsidiary Advancecon Infra S/B was appointed by Sime Darby Property (Bukit Raja) S/B as the contractor to undertake earthworks and other related works for the development of Phase 1 (R10C, R10D and R10E), at Bandar Bukit Raja 2, Klang, Selangor for a total contract sum of MYR23.5m. With the latest project award, ADVC has secured a total of MYR289.4m worth of jobs YTD, lifting its outstanding order book to MYR761.3m (equivalent to approximately 3x its FY20 revenue). Stock trades at 6.8x FY22 consensus EPS.
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