*Maybank IBG Kopi-O (20 Jan 2022)*
Nikkei 27467.2 -2.80%
Kospi 2842.3 -0.77%
SSE 3558.2 -0.33%
HSI 24127.9 0.06%
TWSE 18227.5 -0.82%
SET 1658.2 -0.12%
JCI 6592.0 -0.33%
STI 3283.9 0.12%
KLCI 1530.3 -0.82%
*Maybank IBG Key Calls*
*Malaysia Aviation - Regaining altitude*
After nearly 2 years of disruptions, Malaysian (MY) passenger traffic is on the mend. >50% of aircraft operated by MY carriers are in service again. Fleet strategies also indicate that the excess capacity of 2019 is behind us. This is negative for MAHB as passenger traffic is unlikely to recover to pre-COVID-19 levels but positive for AAGB as airfares are likely to rise. Maintain our forecast that MY domestic/international passenger traffic will recover to 45%/20% of pre-COVID-19 levels in 2022.
*MY*
o Expect another volatile session after Wall Street tumbled overnight. Selling pressure could accelerate if the KLCI fall below yesterday’s low of 1,525, as it would drag the benchmark below the 30-day SMA. The silver lining is the higher commodity prices, which will lend support to O&G stocks and plantation counters. Technically, we expect the KLCI to range between 1,515 pts and 1,555pts today, with supports at 1,515pts and 1,475pts.
o *Nestcon (NESTCON MK)*: Its wholly-owned subsidiary, Nestcon Builders S/B, was awarded a MYR188.5m contract to undertake foundation works, sub-structure works, main building works and infrastructure works for a 39-storey building at Jalan Klang Lama, Kuala Lumpur. This is the second contract award in a month, bringing YTD job win to MYR278.9m, equivalent to approximately 81% of FY20 revenue. Stock trades at 37.1x annualized 9M21 EPS. It is sitting on a net cash of MYR41.4m at end-Sep 2021, which is equivalent to approximately 14% of its market capitalisation.
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