*Maybank IBG Kopi-O (10 Jan 2022)*
Nikkei 28478.6 -0.03%
Kospi 2954.9 1.18%
SSE 3579.5 -0.18%
HSI 23493.4 1.82%
TWSE 18169.8 -1.08%
SET 1657.6 0.28%
JCI 6701.3 0.72%
STI 3205.3 0.66%
KLCI 1543.1 0.64%
*Maybank IBG Key Calls*
*ASEAN Energy - COP26: a deep dive; positioning for ASEAN*
As the clamor on COP26 fades, we address the good, bad and ugly. 2022 is a critical year as parties agree to revisit commitments for COP27 and provide a detailed roadmap. We see positive policy risk for Indonesia and Philippines, while Thailand is at crossroads. Despite market disappointment, the trend is clear. Energy transition will accelerate as governments work towards closing the emission gap and increased capital flows into the space. BCPG, GPSC, SOLAR, CYP, ACEN, and AP will benefit.
*MY*
o After a weak start to 2022 last week, the KLCI is poised for a rebound this week. Trading however will remain choppy due to concerns over tightening monetary policy and the omicron variant. Technically, we expect the benchmark index to range between 1,520 and 1,560 today, with supports at 1,515 and 1,475.
o *Property*: We expect more muted sales momentum in 2022 given: 1) the absence of HOC that drove buying sentiments in 2019-2021, 2) political uncertainties ahead of/arising from GE15 could negatively affect the purchase of big-ticket items and potentially cause delays in project approvals and 3) potential interest rate hikes from 4Q22. Profit wise, developers’ margins could be hurt by higher raw material costs but impact remains manageable for now. Maintain NEUTRAL. We prefer sector leaders - SPSB, ECW.
o *Willowglen (WLW MK)*: Its wholly-owned subsidiary Willowglen Services Pte Ltd was awarded a contract valued equivalent to approximately MYR9.3m by Public Utilities Board, Singapore to undertake servicing and maintenance works for server room equipment of various supervisory control and data acquisition (SCADA) systems. This is the first contract award in 2023. Demand for SCADA is driven by wireless communication technology, cloud computing and IoT. Stock trades at 18x annualised 9M21 EPS. It is sitting on a net cash of MYR64.5m at end-Sep 2021.
o *Grand Hoover (GHB MK)*: Its wholly-owned subsidiary Pembinaan ATT S/B was awarded three contracts by Widad Builders S/B amounting to MYR373.8m. The group has returned to the black in 1QFY6/22 after slipping into losses in FY6/18, reporting a PATMI of MYR2m. But this was mainly due to a MYR1.6m reversal of impairment losses on trade receivables. Stronger construction pipeline is encouraged, but its prospects also depend on its property unit and the trading of building materials. Stock trades at a P/B of 1.4x. It is sitting on a net cash of MYR11.7m as at end-Sep 2021.
For more stock ideas and market flows, access Market Insight on Maybank Trade on Apple Store and Google Play now.
Stay Ahead, Trade Smart.