ANALYSTS SAY: Buy, Sell, Hold (12 Apr)

MAYBANK KIM ENG

Delfi Ltd
Committed to be ‘Better for You’

■ In a 7 Apr article on The Edge, Delfi CEO Mr John Chuang shared its market strategy of premiumisation and expansion plans ahead.
■ We remain optimistic of Delfi’s earnings ahead with potential re-rating from a successful ‘Better for You’ campaign. Reiterate Add with an unchanged TP.

Expressed interest in China
In an article on The Edge on 7 Apr 2022, Delfi CEO Mr John Chuang expressed his interest for the company to expand into China in the long term. Although no concrete plans have
been laid out, Mr Chuang shared some of his considerations, including potentially working with a local partner to enter the market due to the competitive landscape, as well as intentions of setting up a manufacturing plant in China. Today, Delfi mainly operates in Indonesia and the Philippines, with distribution presence in Malaysia, Singapore and other regional markets. China resents an attractive growth opportunity with a growing demand for chocolate confectionery driven by higher discretionary income and lifestyle changes.
According to the Association of Chinese Chocolate Manufacturers, the chocolate consumption per capita in China is 70g/year, far below the world average of 0.9kg/year. 

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Axis REIT (AXRB MK)
Acquiring logistics warehouse
in PTP

Maintain BUY
We are mildly positive on Axis’ proposed acquisition of a MYR390m logistics warehouse in Pelabuhan Tanjung Pelepas, Johor. We maintain our earnings forecasts, DDM-TP of MYR2.30 (Ke: 6.5%) and BUY rating. We are also keeping Axis as our sector’s top pick, on account of its resilient rental income from industrial assets and active acquisition strategy.

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UOB KAYHIAN

UOB KAYHIAN

Singapore Telecommunications (ST SP)
Repositioning NCS For Regional Growth

We came away from a recent NCS meeting more sanguine on its near-term prospects. We expect NCS to deliver double-digit revenue growth as it focuses on driving digital services within the government and telecommunications sector. Its recent acquisition in Australia paves the way for NCS to enter Asia Pacific’s third-largest ICT market, after Japan and China. It is still too early to monetise NCS as it is on the cusp of ramping up
its business. Maintain BUY. Target price: S$2.90.

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IGB REIT (IGBREIT MK)
Appealing Yields With A Favourable Risk-Reward Balance

In anticipation of a market consolidation, IGB REIT offers a favourable risk-reward balance. The stock should appeal to investors with its earnings recovery trajectory in addition to its share price still hovering at the pandemic trough. We like IGB REIT for its resilient assets and faster-than-peers’ recovery pace. The REIT still offers attractive yields of at least 5.6% from 2022 onwards. Maintain BUY and target price of RM1.90. 

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