*Maybank IBG Kopi-O (17 Jan 2022)*
Nikkei 28124.3 -1.28%
Kospi 2921.9 -1.36%
SSE 3521.3 -0.96%
HSI 24383.3 -0.19%
TWSE 18403.3 -0.18%
SET 1672.6 -0.44%
JCI 6693.4 0.53%
STI 3282.0 0.76%
KLCI 1555.3 -0.90%
*Maybank IBG Key Calls*
*AirAsia Group Bhd - Keep calm and carry on flying*
As we had earlier flagged (link), AAGB has been classified as a PN17 listed issuer due to its negative shareholders’ equity position. That said, this does not mean that AAGB is insolvent. Moreover, there are at least 6 ways that AAGB can narrow its negative shareholders’ equity position substantially to hopefully lift its PN17 status. More importantly, AAGB’s fundamentals have improved with its airlines actively flying again. Estimates, BUY call and MYR1.31 SOP-based TP unchanged.
*MY*
o The KLCI is poised for a cautious open ahead of China’s GDP data later today. All eyes will also be looking at BNM’ MPC meeting on Thursday. That said, higher oil price should lend support to the market while banks could also benefit from rotational play. Technically, we expect the benchmark index to range between 1,540 and 1,570 today, with supports at 1,515 and 1,500.
o *Malaysia Marine Heavy Engr (MMHE MK)*: MMHE prioritises for: (i) a stronger orders pipeline (heavy engineering & marine services), (ii) the delivery of existing projects on time, on schedule and on budget, (iii) improvement on its cost management and (iv) return to profitability this FY. We remain positive on MMHE – cash rich with undemanding valuations and a direct proxy play to PETRONAS’ domestic offshore fabrication activity. Our TP of MYR0.85 is unchanged, pegged to 0.8x EV/ order backlog (mean valuation) expectation of MYR1.2b.
o *Ahmad Zaki (AZR MK)*: Its wholly-owned subsidiary Ahmad Zaki S/B is acquiring a piece of freehold industrial land measuring approximately 19.3 ha in Ulu Selangor together with a factory erected thereon for MYR41m cash, which will be funded via a mix of internally generated funds and bank borrowings. AZR has returned to profitability in 1QFY6/22, after slipping into losses in FY6/20. Stock trades at a PB of 0.5x. Warrants are out of the money.
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