*Maybank IBG Kopi-O (11 Jan 2022)*
Nikkei 28478.6 -
Kospi 2926.7 -0.95%
SSE 3593.5 0.39%
HSI 23746.5 1.08%
TWSE 18239.4 0.38%
SET 1657.1 -0.03%
JCI 6691.1 -0.15%
STI 3227.1 0.68%
KLCI 1550.2 0.46%
*Maybank IBG Key Calls*
*Thailand Banks - From resiliency to recovery*
The re-opening of the economy and rising vaccination rate should underpin increased consumer confidence. KBANK remains our Top Pick and we also changed another Top Pick to KKP from TTB.We like KKP as it’s a laggard play and a beneficiary of economic recovery and a strong capital market. We downgrade TTB to HOLD from BUY after it rose 20% and outperformed the SET by 16% in the past one month. Key risk is virus mutations, which could erode consumer confidence and could lead to another hard lockdown.
*MY*
o Market may take a breather due to the lackluster performance in overnight US markets. Headwinds such as tightening monetary policy and the omicron variant will continue to haunt sentiment but expect downside to be limited as bargain hunting activities may surface on value play. Technically, we expect the KLCI to range between 1,545 and 1,565 today, with supports at 1,515 and 1,475.
o *Plantations*: MPOB’s Dec 2021 stockpile at 1.58mt (-13% MoM, +25% YoY) was lower than street’s estimate of 1.7mt, and second lowest for the month of Dec in 15 years. Key surprise was a jump in domestic consumption. CPO price is off to a good start in 2022 due to weather risk in this region as well as South America. High fertilizer prices, disrupted fertilizer supplies and labour shortage in MY may possibly cause palm oil yields to again come in below expectation in 2022. Preferred BUYs: KLK, SOP & BPLANT.
o *HSS Engineers (HSS MK)*: Its associate HSS Integrated S/B has accepted two framework services from Digital Nasional Berhad to provide consultancy services worth MYR2.8m. The 14-month contract, which commenced in Nov 2021, will expire in Dec 2022. This is the second project win in 2022, lifting its YTD job win to MYR17.9m. The back-to-back job win will help to replenish its unbilled order book which stood at MYR548.3m. Stock trades at 15.9x consensus FY22 EPS.
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