ANALYSTS SAY: Buy, Sell, Hold (24 June)

BRC ASIA

We maintain our ACCUMULATE call on BRC Asia ($1.48, down 0.01) with a TP of S$1.90, representing an upside potential of 28.4%. We conservatively estimate FY21F’s NPAT to come in at S$36.2mln, taking into consideration that the uncertainty and resurgence of COVID-19 (especially with new variants) will once again result in a delayed recovery within the construction sector.

We believe that BRC’s market leadership as a steel rebar supplier will benefit them in the longer term once construction activity normalizes and the government continues pushing for large-scale initiatives such as Greater Southern Waterfront and the North-South Corridor. However, the unpredictability of COVID-19 also means that investors should expect their investment horizon to stretch beyond 12 months while waiting for the construction sector to recover. Management has guided that assuming COVID-19 remains under control and operations are able to continue without heavy disruption, they should be able to pay a dividend of 10 cents for FY21, representing a forward yield of 6.7%.

Scientex (SCI MK)

3QFY21: Record-high Quarterly Results

Scientex’s 3QFY21 results came in within our expectations with record-high revenue. The outstanding performance was attributed to higher sales volumes and improved sales mix of its manufacturing segment, as well as decent take-up rates and stable progress billings for the property segment. We expect resilient earnings momentum in the coming quarters, buoyed by the swift recovery of the global economy and consumer sentiment. Maintain BUY with a higher target price of RM4.60.

Read More ...

MAYBANK KIM ENG

UOB Kay Hian

RHB Bank (RHBBANK MK)

Credit cost guidance still intact

Buffers to our forecasts While an uptick in loans under targeted relief assistance is to be expected amid the current second lockdown, management is comfortable with its credit cost guidance for now and we have, in fact, maintained higher credit cost assumptions, thus providing some buffer to our earnings forecasts. We maintain a BUY on RHB with an unchanged TP of MYR6.30 (CY22E PBV: 0.9x; ROE: 8.5%).

Read More ... 

Sunway (SWB MK)

Stake Sale At Robust Valuation Lays Path For Healthcare Arm’s Eventual IPO

Sunway announced the 16% stake sale of its healthcare division to GIC for RM750m cash, implying RM4.7b for its entire healthcare unit (31x EV/EBITDA). The conditions for the stake sale provide better clarity for SHG’s expansion visibility and IPO timeline. SHG could see earnings CAGR of 20-25% given its ongoing expansion. Maintain BUY with a higher target price of RM2.25 as we have factored in the higher valuation for SHG. We believe valuation could rise over time riding on SHG’s good growth prospects.

Read More ...