*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 (7 Dec 2021)*
Nikkei 27927.4 -0.36%
Kospi 2973.3 0.17%
SSE 3589.3 -0.50%
HSI 23349.4 -1.76%
TWSE 17688.2 -0.05%
SET 1588.2 -0.23%
JCI 6547.1 0.13%
STI 3116.3 0.46%
KLCI 1483.5 -1.22%
*MKE Key Calls*
*Malaysia Banking - 3Q21 results round-up*
While aggregate net profit growth is estimated at just 3% in 2022, i) Cukai Makmur is one-off and we expect earnings to rebound 18% in 2023, ii) current valuations largely reflect the tax impact, in our view, and iii) dividend yields are still decent at current prices. POSITIVE maintained on the sector, with BUYs on RHB, AMMB, HLBK, HLFG, BIMB and ABMB.
*MY*
o The rebound in overnight US markets as well as stronger commodity prices will lend support to the market. O&G and plantation stocks will likely take the center stage but expect bottom fishing in banking and financial stocks too. Technically, we expect the KLCI to range between 1,470 and 1,500 today, with supports at 1,475 and 1,452.
o *Bank Islam Malaysia (BIMB MK)*: Bank Islam is one of only two standalone Islamic banks in the country that is not associated with any conventional banking group, with its very own network of Islamic bank branches. It is also the only Islamic bank listed on Bursa Malaysia at the moment and since it is guided by Shariah principles, the bank is already largely ESG compliant. BUY maintained – TP MYR3.20 based on an FY22 PBV target of 0.9x (ROE: 8.8%).
o *Kelington (KGRB MK)*: Its wholly-owned subsidiary Kelington Engineering (S) Pte Ltd was awarded a contract worth approximately MYR85m to provide Ultra High Purity solutions for a semiconductor wafer fab in Singapore. With the latest award, KGRB’s outstanding order book is at MYR1b, which is equivalent to 2.5x its FY20 revenue. Stock trades at 24.7x consensus FY22 EPS. It is sitting on a net cash of c.MYR50.1m at end-Sep 2021.
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