*Maybank Kim Eng Kopi-O (6 Dec 2021)*
Nikkei 28029.6 1.00%
Kospi 2968.3 0.78%
SSE 3607.4 0.94%
HSI 23766.7 -0.09%
TWSE 17697.1 -0.16%
SET 1588.2 -0.23%
JCI 6538.5 -0.69%
STI 3101.9 0.32%
KLCI 1501.7 -
*MKE Key Calls*
*RL Commercial REIT - A REIT that sizes up*
RL Commercial REIT, Inc. (RCR PM) is the largest office REIT in the Philippines with 425k sqm of gross leasable area (GLA) leased primarily to business process outsourcing (BPO) tenants. We initiate coverage with BUY and a DDM-based TP of PHP8.10. At current levels, RCR offers a FY22E dividend yield of 5.0% and a potential total return of 15%.
*MY*
o The selloff in Wall Street last Friday will drag investors into a risk-off mode today. Sentiment will also be weighed down over Omicron worries. That said, O&G counters could take the limelight after the crude oil prices inched higher. Technically, we expect the benchmark index to range between 1,490 and 1,520 today, with supports at 1,484 and 1,450.
o *Alliance Bank (ABMB MK)*: Alliance Bank’s (ABMB) ESG framework could be better defined, but that it is principally a retail bank does reduce overall ESG risks, in our view. We deem the services extended by ABMB to SMEs to be critical, particularly from a Social perspective. We maintain a BUY with a TP of MYR3.25, pegged to a CY22 PBV of 0.7x (unchanged).
o *Velesto Energy Berhad (VEB MK)*: We are optimistic over its next 12 months’ outlook, on stronger operations and financials ahead. Demand for JUs is rising and tenures are lengthening, tell-tale signs of a recovering market. A robust domestic drilling program in 2022, from PETRONAS’ upcoming Activity Outlook, will be a key validating cause. Our TP is pegged to 1x EV/ replacement value. Maintain BUY and MYR0.23 TP.
o *Taliworks (TWK MK)*: Awarded a contract by Pengurusan Air Selangor S/B to design and build Sg Rasau water treatment plant and water supply scheme (Phase 1) in Selangor. The contract, which is worth MYR293.9m, shall be completed by 31 Dec 2024. This is TWK’s first contract win of the year. Stock is trading at 24.4x consensus FY22 EPS. The group is sitting on a net cash position of MYR82.4m as at end-Sep 2021.
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