*Maybank IBG Kopi-O (17 Mar 2022)*
Nikkei 25762.0 1.64%
Kospi 2659.2 1.44%
SSE 3170.7 3.48%
HSI 20087.5 9.08%
TWSE 16940.8 0.09%
SET 1667.9 1.43%
JCI 6992.4 1.07%
STI 3290.9 1.70%
KLCI 1571.3 0.89%
*Maybank IBG Key Calls*
*Malaysia Telcos - The preferred outcome*
The government’s (hopefully final) decision on 5G rollout would see telcos owning 70% of DNB, which in turn would continue to operate Malaysia’s sole 5G network. Telcos thus regain network ownership and control, possibly with minimal incremental outlay, in our view. Our sector picks remain TM (T MK, BUY, CP: MYR4.92, TP: MYR7.50) and Axiata (AXIATA MK, BUY, CP: MYR3.80, TP: MYR4.70).
*MY*
o The KLCI is set to extend its gains for second day after Wall Street advanced overnight on signs that the US can handle tighter monetary policy. Meanwhile, possible progress on Russia and Ukraine conflicts may also help lift sentiment. Falling commodity price however may add volatility to O&G and plantation stocks but the resumption of the MRT3 will help drive interest in construction counters. Technically, we expect the benchmark index to range between 1,550pts and 1,590pts today, with supports at 1,530 and 1,510.
o *Gamuda (GAM MK)*: GAM’s recent MYR6.5b win in Australia reaffirms its capability, as it continues to target an even larger E&C orderbook size - MYR20b by mid-2023. Higher pre-sales can also be expected of its property projects as it embeds sustainability into design and concept. A highway trust for its tolled urban highways, if materialise, will unlock value. We raise earnings forecasts to incorporate its recent E&C wins. Our new RNAV-TP is MYR4.28. We also update for its ESG efforts. Maintain BUY.
o *Bintai Kinden (BKC MK)*: Its wholly-owned subsidiary Kejuruteraan Bintai Kindenko S/B was awarded a MYR8.5m contract by *Tenaga Nasional (TNB MK, CP: MYR9.10, TP: MYR9.30, HOLD)*. The latest contract award lifted its outstanding order book to approximately MYR113.5m, equivalent to about of 1.9x its FY3/21 revenue, providing earnings visibility for the next two years. Providence, an independent market research report, estimates that the M&E service industry in Malaysia will reach MYR5.5b by 2023, representing a CAGR of 9.4% between 2021 and 2023. BKC has returned to the black in 9MFY3/22 after slipping into the red in FY3/20, but its PATMI of MYR3.4m included a MYR3.3m gain on deemed disposal of subsidiary. Stock trades at a trailing P/B of 0.5x.
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