*Maybank Kim Eng Kopi-O (29 Nov 2021)*
Nikkei 28751.6 -2.53%
Kospi 2936.4 -1.47%
SSE 3564.1 -0.56%
HSI 24080.5 -2.67%
TWSE 17369.4 -1.61%
SET 1610.6 -2.30%
JCI 6561.6 -2.06%
STI 3166.3 -1.71%
KLCI 1512.2 -0.35%
*MKE Key Calls*
*Alliance Bank - 2QFY22 results above expectations*
Alliance Bank’s (ABMB) 2QFY22 results were above expectations and our FY22/23E net profit forecasts are raised by 29%/8%. With the improved outlook, and on expectations of a rise in the group’s ROE to 7.6% in FY22 and 8.1% in FY23 from 5.9% in FY21, we upgrade the stock to a BUY with a raised TP of MYR3.25 (from MYR2.90) pegging on a CY22 PBV target of 0.7x (unchanged). We also raise our dividend payout ratio to 40% from 25%, and this translates to a decent FY22 dividend yield of 4.5%.
*MY*
o The selloff in Wall Street last Friday will drag investors into a risk-off mode today. Worries over Omicron will also weigh on sentiment. Commodity stocks, particularly O&G counters, are expected to take the brunt of the selling after crude oil and CPO prices tanked. Technically, we expect the benchmark index to range between 1,500 and 1,530 today, with supports at 1,515 and 1,500.
o *Sarawak Oil Palms (SOP MK)*: 3Q21 core PATMI beat our/street estimates on better-than-expected CPO ASP, and lower-than-expected cost. 4Q21 earnings outlook remains promising given present high palm oil prices as SOP has minimal forward sales. We lower our TP slightly to MYR5.60 on 13x FY22 PER peg, its updated 5Y mean (from MYR5.80 on 14x FY22 PER). With net gearing at just 3%, 8x FY22E PER and an unadjusted EV/ha of MYR26,000 (below replacement cost), SOP is undervalued. A first ever interim DPS of 4sen was announced. BUY.
o *Press Metal (PMAH MK)*: Reported a 55% YoY jump in 3Q21 PATMI, lifting its 9M21 net profit to MYR744.6m (+137% YoY). Excluding one off net loss (mainly foreign exchange loss), its 9M21 core PATMI surged 130% YoY to MYR757.2m. PMAH also declared a third interim single tier dividend of 1sen/sh. The stronger 9M21 results stemmed mainly from higher aluminium price and production output from its phase 3 smelter which achieved full commissioning in mid-Oct 2021. Stock trades at 22.2x consensus FY22 EPS.
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