*Maybank IBG Kopi-O (13 Jan 2022)*
Nikkei 28765.7 1.92%
Kospi 2972.5 1.54%
SSE 3597.4 0.84%
HSI 24402.2 2.79%
TWSE 18375.4 0.48%
SET 1678.5 0.68%
JCI 6647.1 -0.01%
STI 3255.0 0.27%
KLCI 1563.2 -0.07%
*Maybank IBG Key Calls*
*Siam Cement - FY21E ends on a low note, but upbeat FY22E prognosis*
Post discussion with the management, we concluded that SCC’s 4Q21E will miss our upbeat profit estimate of THB10b; likely to land at c.THB9b. As expected topline improved QoQ, YoY as demand recovery allowed hikes in product prices. But, input costs & opex – especially freight costs - are still higher muting the improvement in margins/profits in petrochem & packaging. Beyond 4Q21 we maintain bullish prognosis driven by demand and supported by capacity expansion. BUY, TP THB560.
*MY*
o Despite yesterday’s setback, we believe the KLCI is poised for further recovery, underpinned by the relatively firm oil price. Trading, however, will remain choppy due to headwinds such as tightening monetary policy and the omicron variant. Technically, we expect the benchmark index to range between 1,545 and 1,581 today, with supports at 1,545 and 1,515.
o *Malaysia Renewable Energy*: The recently launched Malaysia Renewable Energy Roadmap (MyRER) for 2022-2035 is expected to boost RE from 23% or 8.45GW of national installed capacity mix in 2020, to 31% in 2025, and 40% in 2035. The strategic pillars for the RE growth will continue to leverage on the existing untapped resources i.e. solar PV, bioenergy and hydro. New technologies and resources are also expected to support the MyRER post-2025. We remain POSITIVE on the sector, with BUY ratings for Cypark and Solarvest.
o *Nestcon (NESTCON)*: Its wholly-owned subsidiary, Nestcon Infra S/B, was awarded two sub-contracts by China Communications Construction (ECRL) S/B to undertake subgrade works for the East Coast Rail Link project in Kota Bharu, Kelantan. The projects are worth MYR90.4m in aggregate. This is the first contract award of the year, and will help to lift its construction order book. Stock trades at 38.3x annualized 9M21 EPS. It is sitting on a net cash of MYR41.4m 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.