*Maybank IBG Kopi-O (4 Jan 2022)*
Nikkei 28791.7 -
Kospi 2988.8 0.37%
SSE 3639.8 -
HSI 23274.8 -0.53%
TWSE 18270.5 0.28%
SET 1657.6 -
JCI 6665.3 1.27%
STI 3134.3 0.34%
KLCI 1549.1 -1.18%
*Maybank IBG Key Calls*
*Regional Plantations - Rising above the flood*
MY’s CPO spot price averaged ~MYR5,171/t in 4Q21 (+53% YoY, +17% QoQ), a new record. Even for ID, 4Q21 CPO price has averaged ~IDR14,087/t (+46% YoY, +15% QoQ; or MYR4,134/t). The high prices are in part supported by fear of supply disruption due to sporadic flooding. We estimate MY’s Dec 2021 CPO output at 1.45mt (-11% MoM), bringing 2021’s output to 18.1mt (-5% YoY). With record prices, we expect growers to deliver another set of sterling results in 4Q21. Preferred BUYs: KLK, SOP & BPLANT.
*MY*
o Expect another volatile session but sporadic bargain hunting activity may kick in after yesterday’s selloff. O&G and plantation stocks could take the lead after commodity prices rallied while banks should also benefit from firmer recovery this year. Technically, we expect the KLCI to range between 1,530 and 1,560 today, with supports at 1,515 and 1,475.
o *Advancecon (ADVC MK)*: Its 30% associate Advancecon Sarawak S/B was awarded a MYR32.4m contract by Yayasan Sarawak to undertake site clearing and earthworks in Kuching, Sarawak. The is the first contract win of the year, lifting its earthworks and civil engineering services order book to above MYR770m, equivalent to approximately 3.1x its FY20 revenue. Stock trades at 6.4x consensus FY22 EPS.
o *Opcom Holdings (OHB MK)*: Its 90%-owned subsidiary Opcom Engineering Services S/B was awarded a MYR26m contract by Celcom Networks S/B. This is the second contract win in FY3/22. Stock trades at 24.8x annualized 1HFY3/22 EPS. It is sitting on a net cash of MYR60.3m at end-Sep 2021, equivalent to about 24% of its market capitalization.
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