*Maybank Kim Eng Kopi-O (5 Nov 2021)*
Nikkei 29794.4 0.93%
Kospi 2983.2 0.25%
SSE 3526.9 0.81%
HSI 25225.2 0.80%
TWSE 17078.9 -0.25%
SET 1626.3 0.89%
JCI 6586.4 0.52%
STI 3219.7 -
KLCI 1531.3 -
*MKE Key Calls*
*United Overseas Bank - Set for regional re-opening*
UOB’s 9M21 PAT was in-line with MKE expectations. Its strong ASEAN franchise stands to benefit from higher loan growth, better NIMs and increasing fees with the region opening up as vaccinations accelerate. Asset quality should also remain supportive in such a backdrop. Concurrently, UOB’s investments in its digital-first strategy could see it gaining share in the mass-premium customer segment in the region and drive higher risk adjusted returns. We raise TP to SGD31.15. Maintain BUY.
*MY*
o Expect market to be choppy as profit taking may accelerate after Wall Street ended mixed overnight and ahead of the weekend break. Easing commodity prices may also weigh on O&G and plantation stocks. Technically, we expect the KLCI to range between 1,520 and 1,550 today, with supports at 1,515 and 1,500.
o *Frontken Corp. Bhd (FRCB MK)*: 9MFY21 core net profit was in-line with our/the streets FY21 core earnings estimates. Our earnings forecast and BUY call are maintained, but our TP is nudged higher to MYR4.30 from a re-calibration of the LT mean, albeit still pegged to an unchanged +2SD to the 3Y mean, at 52x FY22 PER (from 47x previously). We remain sanguine on its LT prospects, underpinned by the semiconductor industry’s accelerating upcycle, its ongoing expansion in Taiwan, and the steady recovery of the O&G industry. Reiterate BUY.
o *Malaysia Marine Heavy Engr (MMHE MK)*: Results came in below our expectation due to lower yard activities, affected by the extended lockdowns, leading us to cut our FY21 earnings. That said, the sub-par performance is well-flagged. Focus should be on FY22, on expectation of a stronger orders pipeline and earnings turnaround. MMHE is cash rich and undeservedly undervalued. Maintain BUY and MYR0.85 TP.
o *Hextar Global (HAL MK)*: Acquiring 100% stake in TufBond Technologies S/B (TTSB) for a total consideration of MYR13m. The proposed acquisition comes with a profit guarantee of at least MYR2m p.a. for three years (aggregate PAT of MYR6m). This is Hextar’s fourth acquisition this year, which are aimed to expand Hextar’s footprint in the specialty chemicals sector. Share price has surged 183% YTD. Stock is trading at 27.9x FY22 consensus EPS.
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