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Tag Archives: Analyst Reports

Kenanga projects gradual recovery for KESM

KUALA LUMPUR: Kenanga Research expects KESM Industries Bhd's recovery to take on a more gradual pace than in other companies as its utilisation rate was impacted from the movement control order.

According to the research house, KESM's utilisation rate in FY21 dipped below 30% due to the sporadic relaxation and tightening of the restrictions.

"We anticipate a very gradual recovery for KESM instead of an exuberant one seen in other companies," it said in a note.

In FY22, Kenanga expects the utilisation rate to improve as the group increases the vaccination rate of its workforce,

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Evergrande debt crisis has limited impact on Bursa

KUALA LUMPUR: AmInvestment Research believes the sharp fall in China’s Evergrande Group share price will have a limited impact on Malaysia’s stock market.

Evergrande’s share price fell 10% on Monday to HK$2.28. This is the lowest level in more than 11 years. Year-to-date, the stock has tumbled 85% from HK$14.90 at the start of 2021.

“We understand that the weak share price performance is caused by concerns that the company may not have sufficient cash to address its near-term payment obligation to lenders,” it said.

As for the impact on Bursa, AmInvest Research believes the impact to Malaysia’s stock market will be limited.

“In terms of direct exposure to China’s property market for stocks under our coverage, only two property companies have exposure to China property market. Based on our channel checks, none

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Trading ideas: MCE, MGB, GFM, Dayang

KUALA LUMPUR: Companies which could see trading interest on Tuesday include MCE, MGB, GFM Services and Dayang following their corporate announcements, JF Apex Research said.

MCE has signed a memorandum of understanding (MOU) with China’s Chongqing Beidou Jiean Neo-Energy Technology Ltd (BDJA) to establish a joint venture (JV) for the electric vehicle business.

MGB has secured a turnkey project to develop a 1,006.7 acres industrial park in Kertih, Terengganu.

Also, MGB will take over a piece of land measuring 10,558.9 sqm in Plentong, Johor from its parent company, LBS Bhd for own development.

JF Apex Research said GFM Services said it is partnering Amzass (M) Sdn Bhd to upgrade the northbound and southbound Bemban lay-bys in Melaka. The gr

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Global semiconductor chip shortage likely to get worse, further pushing prices higher

KUALA LUMPUR: Prices for semiconductor chips are expected to rise across the spectrum given that the global chip shortage is likely to last until sometime late next year.

Moody's Analytics said the trend towards remote work that accelerated due to COVID-19 movement restrictions has given rise to heightened demand for semiconductor chips.

"Given the capital-intensive nature of their production process, supply has not been able to keep pace with the increase in demand," it said in a note today.

It noted that the world’s largest chipmaker, Taiwan Semiconductor Manufacturing Co, has been raising prices across the spectrum, some by as much as 20 per cent, while three Chinese chipmakers have been fined by the Chinese government for abnormally high price increases. Read More »

Maybank IB Research raises Eco World Devt target price

KUALA LUMPUR: Maybank Investment Bank Research has raised its target price for Eco World Development (ECW) from 78 sen to 93 sen after its strong locked-in property sales and an expected recovery in sales after the lockdown is lifted.

It said on Monday ECW’s 3QFY10/21 net profit of RM35mil (-65% YoY, -17% QoQ) was below its expectation but in line with consensus.

Sales wise, ECW’s 10MFY21 locked-in property sales of RM3.1bil were 9% above its FY21 sales goal.

Elsewhere, its net gearing continued to improve to 0.51x in end-3Q21 (from 0.55 times in end 2Q21).

“We adjust our earnings forecasts by -9% to +24% to factor in NRP 1 and a higher sales assumption of RM3.5bil for FY21. Our TP is raised to 93 sen (+15sen) on 0.55x FY22 price-to-bo

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Trading ideas: Gadang, Handal, Bioalpha, Revenue Group

KUALA LUMPUR:: Gadang, Handal, Bioalpha, Revenue Group and Southern Cable are among the stocks to watch on Monday after their corporate announcements, JF Apex Research says.

Gadang secured a RM100.34mil sub-contract under the Central Spine Road (CSR) project, a 347km toll-free highway aimed at motorists travelling between Bentong in Pahang and Kelantan.

As for Handal Energy, it secured a new contract from Tanjung Offshore Services Sdn Bhd for the provision of portable crane equipment and services package.

Southern Cable has received the nod from the Securities Commission to transfer its listing status to the Main Market of Bursa Malaysia, 11 months after its ACE Market debut in October 2020.

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UOB Kay Hian upbeat on gaming as NFOs restart operations

KUALA LUMPUR: UOB Kay Hian Malaysia Research is upbeat on the numbers forecast operators (NFOs) as they were allowed to start the first draws on Wednesday after a 3.5-month lockdown.

“With the nation’s encouraging vaccination milestones, we are optimistic that the NFOs will chart an uninterrupted swift earnings recovery and meaningful capital appreciation.

“Investors will again be attracted to the sector’s compelling risk-reward return, resilient cash flows and more than 6.6% lucrative yield. Maintain overweight,” it said.

UOB Kay Hian Research said with the nation’s vaccination rate expected to reach more than 80% for adults, NFOs were allowed to reopen for business from Sept 13, subject to having acceptable standard operating procedures (SOP) in place to ensure proper social distancing.

It also pointed out that

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AmInvest Research retains overweight on telcos, buy call on Telekom

KUALA LUMUR: AmInvestment Research is maintaining its overweight rating on the telecommunications sector with buy call for Telekom Malaysia (TM) which has shown significant cost improvements and poised under brighter prospects under the government’s MyDigital initiatives.

In its report on Friday, Maxis remains a Hold at a fair CYF22 enterprise value/earnings before interest, taxation, depreciation and amortisation (EV/Ebitda) of 12 times, at parity to its three-year average of 12 times.

AmInvest Research also pointed out Communications and Multimedia Minister Tan Sri Annuar Musa has announced the “Pakej Remaja Keluarga Malaysia” which provides affordable mobile data for youths and students at RM30 for 20GB of data with a three-month validity.

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