*Maybank IBG Kopi-O (14 Feb 2022)*
Nikkei 27696.1 -
Kospi 2747.7 -0.87%
SSE 3462.9 -0.66%
HSI 24906.7 -0.07%
TWSE 18310.9 -0.15%
SET 1699.2 -0.22%
JCI 6815.6 -0.12%
STI 3429.0 0.03%
KLCI 1578.9 0.56%
*Maybank IBG Key Calls*
*Dialog Group - Big EPCC job wins*
Dialog is off to a good start in 2022. The MYR724m EPCC job win offers a 24-30 months order visibility. That said, its tank terminal operations remain its core earnings contributor and developing Pengerang to its full potential remains its key agenda, a long-term project lasting 10 years. Meanwhile, its green energy agenda is also starting to shape up, targeting the renewable section to contribute 10% to Group’s earnings over the long run. Our SOP-based TP of MYR4.90 is unchanged. Maintain BUY.
*MY*
o Expect the KLCI to be choppy amid renewed concerns over geopolitical risks and the high Covid-19 new infections. That said, the jump in oil price last Friday may draw interest on O&G counters. Technically, we expect the benchmark index to range between 1,550 and 1,590 today, with supports at 1,530 and 1,509.
o *Icon Offshore (ICON MK)*: We are positive on Icon securing a short-term JU contract with decent DCR from ConocoPhillips, following the end of its previous gig (Petrofac) in 4Q21. Overall, we expect higher utilisation for its JU and OSVs, its key earnings driver as offshore capex rises. Icon’s turnaround story has just begun to gain traction. We value the: (i) JU ops at 0.6x EV/ replacement value (9 sen/shr) and (ii) OSV ops at 0.7x PBV, (7 sen/shr). On a combined basis, our MYR0.16 SOP-based TP equates to a PBV of 1x. Maintain BUY.
o *Malaysia Marine Heavy Engr (MMHE MK)*: FY21 results came in line. 4Q21 ops continued to be disrupted by the prolonged border restrictions and seasonal weakness. While the YoY operating underperformance is well-flagged, its cash levels and order backlog have improved YoY, a positive. Focus should be on FY22, on expectation of a stronger order & tender pipeline and earnings turnaround. MMHE is cash rich and undeservedly undervalued. Our TP of MYR0.85 is unchanged, based on 0.8x EV/ order backlog (mean valuation) expectation of MYR1.2b. Maintain BUY.
o *Tropicana (TRCB MK)*: Its wholly owned subsidiaries, Tropicana Inspirasi Indah S/B and Tropicana Inspirasi Impian S/B, had entered to a memorandum of agreement with PowerChina International Ltd and Sinohydro Corporation (M) S/B to initiate mutually beneficial collaboration to develop an integrated entertainment hub and serviced apartment blocks at Bentong, Pahang. The proposed collaboration forms part of a larger 596-acre master plan township in Genting Highlands (Tropicana WindCity). PowerChina shall provide maximum possible financing margin for the construction costs, which should bode well for TRCB which had a net gearing of 0.7x at end-Sep 2021. Stock trades at a PB of 0.3x.
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