*Maybank IBG Kopi-O (21 Feb 2022)*
Nikkei 27122.1 -0.41%
Kospi 2744.5 0.02%
SSE 3490.8 0.66%
HSI 24327.7 -1.88%
TWSE 18232.4 -0.20%
SET 1713.2 0.09%
JCI 6892.8 0.84%
STI 3428.9 -0.37%
KLCI 1603.1 -0.12%
*Maybank IBG Key Calls*
*Sime Darby Plantation - A record 2021*
12M21 core PATMI beat our but met consensus estimates as record CPO ASP achieved lifted earnings to record level. We raise our FY22E-23E core EPS by 69%/25% as we revise up our CPO ASP forecasts. But we downgrade SDPL to HOLD (from BUY) given limited upside to our new RNAV-TP of MYR4.78 on unchanged 0.45x RNAV peg (previously MYR4.47) as we roll forward our valuation year to 2023 to reflect a more normalised level of earnings. We prefer KLK MK (BUY, TP: MYR29.60).
*MY*
o After the pullback last Friday, the KLCI is expected to continue its pattern of range-bound trading. The selloff in Wall Street, geopolitical tensions, as well as renewed worries over tightening monetary policy will weigh on sentiment. The only silver-lining is the firmer commodity prices which may lend support to the O&G and plantation stocks. Technically, we expect the benchmark index to range between 1,580pts and 1,630pts today, with supports at 1,570 and 1,530.
o *Inari Amertron (INRI MK)*: 2QFY22 core NP of MYR113m was above expectations, with 1HFY22 results coming in at 56%/58% of our/the street’s FY22E estimates. We have raised our FY22-24E earnings assumptions, but lower our valuation peg to 35x FY23E PER, to account for the accelerated rate increase cycle. Imputing for both, our TP is nudged marginally higher to MYR4.77 (+1%). Inari is our top M’sian OSAT pick, underpinned by its RF division’s strength/robust volume loading and the potential onboarding of new customers.
o *Elsoft Research (ELSR MK)*: Reported a net profit of MYR5.7m in 4Q21 vs. a loss after tax of MYR3.3m a year ago. This brought FY21 reported PATMI to MYR11.0m (+1,602% YoY). Excluding one-offs, its FY21 core net profit rose 95% YoY. Note that ELSR booked in impairment losses of approximately MYR5m in FY20. ELSR also reported a single tier second interim dividend of 1sen/sh. Its earnings hinge on the semiconductor and optoelectronics industries. The World Semiconductor Trade Statistics expects the global semiconductor market to grow by 8.8% to USD601b in 2022. Stock trades at 26.4x consensus FY22E EPS.
*For more stock ideas and market flows, access Market Insight on Maybank Trade on Apple Store and Google Play now*
Stay Ahead, Trade Smart.