*MKE Kopi-O will be posting our final Kopi of the year on 17 Dec 2021. We will resume publication on 3 Jan 2022. Wishing everyone Happy Holidays, a Merry Christmas and a Happy New Year!*
*Maybank Kim Eng Kopi-O (10 Dec 2021)*
Nikkei 28725.5 -0.47%
Kospi 3029.6 0.93%
SSE 3673.0 0.98%
HSI 24254.9 1.08%
TWSE 17914.1 0.46%
SET 1618.2 -0.01%
JCI 6643.9 0.61%
STI 3142.5 0.41%
KLCI 1501.8 0.52%
*MKE Key Calls*
*Philippines Conglomerates - Year ahead 2022: NAV growth intact*
The country’s macroeconomic recovery will have an uneven impact on Philippine conglomerates but should be generally positive for the sector’s NAV accretion story in FY22. Given this, we prefer groups which complement this external uplift with opportunistic M&As and/or divestments, which would likely extend their NAV growth momentum well beyond the FY22 recovery year. Ayala Corp remains to be our top pick in the space, followed by GT Capital.
*MY*
o Expect trading to be volatile as profit-taking may accelerate ahead of the weekend break. Sentiment will also be weighed by the lackluster performance in overnight Wall Street. O&G stocks and planters will likely take the brunt of the selling after commodity prices tanked. Technically, we expect the KLCI to range between 1,490 and 1,520 today, with supports at 1,475 and 1,452.
o *Astro Malaysia (ASTRO MK)*: Results were above our expectations. 4QFY22 operations ought to better QoQ as the FMCO ends but there will likely be a one-off negative impact from Cukai Makmur. We trim our FY22E EPS by 4% but raise FY23E/FY24E EPS by 7%/9%. Our DCF-TP is tweaked to MYR1.38 from MYR1.36 as we roll forward valuation base year to end-FY23E from end-FY22E. We continue to like ASTRO as an earnings turnaround and high dividend yield offering. Maintain BUY.
o *CB Industrial Product Holdings (CBP MK)*: The group is disposing its 70% stake in Gulf Lubes Malaysia S/B (GLM) for MYR55m cash. The disposal is expected to result in a gain on disposal of approximately MYR0.8m, resolve management deadlock in GLM and to recover the carrying amount of advances made to GLM. Stock trades at 9x consensus FY22 EPS. It is sitting on a net cash of about MYR7m at end-Sep 2021.
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