*Maybank Kim Eng Kopi-O (9 Nov 2021)*
Nikkei 29507.1 -0.35%
Kospi 2960.2 -0.31%
SSE 3498.6 0.20%
HSI 24763.8 -0.43%
TWSE 17415.3 0.68%
SET 1626.1 -0.01%
JCI 6632.3 0.77%
STI 3263.9 0.66%
KLCI 1535.4 0.24%
*MKE Key Calls*
*British American Tobacco (ROTH MK) - Briefing update*
BAT will be able to launch its vapour product, Vuse, once the regulatory framework is released in 4Q21. Vuse will be positioned within the affordable mid- price range but the group did not guide on product prices at this juncture. Upon adjusting for higher tax expense relating to the ‘prosperity tax’, our FY22 earnings estimates are lowered by 6% while FY21 and FY23 estimates are left unchanged. Maintain BUY with unchanged DCF-TP of MYR15.20 (WACC: 9.5%, LT growth: 2.5%).
*MY*
o The KLCI is set to extend its gains after Wall Street ended firmer overnight. O&G and plantation stocks will continue to steal the limelight thanks to higher commodity prices. That said, trading will stay cautious ahead of Malaysia’s GDP data which will be released on Friday. Technically, we expect the benchmark index to range between 1,520 and 1,550 today, with supports at 1,515 and 1,500.
o *Wah Seong (WSC MK)*: WSC’s ESG drive is comparatively decent, at this juncture. It has been consistently disclosing its natural capitals data but missed out on the GHG emissions disclosure; a key ‘E’ statistics. An improved disclosure & the rollout of a short-/mid-/long-term sustainability roadmap would enhance its ESG framework. Overall, orderbook continues to grow & the Qatari pipe-coating ops would feature prominently from FY22. Our TP of MYR1.20 is pegged to 10x FY22 PER. Maintain BUY.
o *Ireka (IREKA MK)*: Its wholly owned subsidiary Ireka Engineering & Construction S/B was awarded a contract by Wanland Metro S/B to construct the infrastructure and associated works for a residential project in Besut, Terengganu. The contract, which is worth MYR45.8m, shall be completed by 29 May 2023. This is Ireka’s third contract win of the year, lifting total win to MYR366.2m (1.1x its FY3/21 revenue). Stock is trading at a P/B of 3.6x.
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