buysellhold july.23

CGS CIMB

CGS CIMB

Venture Corporation

On track for qoq revenue recovery

 

■ We provide an update on Venture Corporation.

■ In its 1Q24 business update, Venture guided that 2Q24F/2H24F revenue is expected to be stronger qoq and hoh.

■ We reiterate Add as we expect Venture to see a resumption in EPS growth in FY24-26F, supported by its 5.40% dividend yield (over FY24-26F).

 

 

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Telekom Malaysia

Redefining value with a data centre lift

 

■ We reiterate our Add call on Telekom Malaysia (TM) with an increased GGMderived price target of RM8.56 to better reflect its rising ROE trend.

■ TM’s new data centre venture with Singtel provides an added growth catalyst to its robust data business, supported by its extensive fibre network.

■ Valuations at 13.6x FY25F P/E are undemanding vs. its FY25F ROE of 18.2%, with dividend yields of more than 3.6% in FY24-26F

 

 

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UOB KAYHIAN

UOB KAYHIAN

Civmec (CVL SP)

Positive Developments For Change Of Domicile; Multiple Potential Benefits

 

Civmec made an application to the general division of the Singapore High Court on 19 Jun 24 to seek a grant to convene a shareholders’ scheme meeting in relation to the change of domicile from Singapore to Australia. Key benefits of this move include better opportunities to win projects that have stringent local content policies and better access to capital in Australia. We continue to like Civmec for its steady growth potential and attractive dividend yield of about 6%. Maintain BUY and target price of S$1.23.

 

 

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EcoWorld Development (ECW MK)

2QFY24: Results In Line; Likely Can Achieve Close To RM4b Sales In FY24

 

ECW’s 1HFY24 net profit increased 19% yoy. Including an industrial land sale to Microsoft, ECW’s achieved RM2.67b sales (74% of its sales target of RM3.5b), suggesting that it may surpass this target and potentially hit around RM4b, reaching its all-time high sales in FY17. Maintain BUY. Target price: RM2.05

 

 

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MAYBANK KIM ENG MAYBANK KIM ENG
Genting Bhd (GENT MK)
Inked 2 agreements with Chinese parties
 
 
Maintain BUY and MYR5.84 SOP-TP
GENT will expand into the independent power producer (IPP) industry in China and has separately commissioned a Chinese contractor to construct a floating liquefied natural gas (FLNG) facility. Our earnings estimates and TP are unchanged as details are lacking. That said, we believe they will be long term earnings and value accretive. On the latter development, our ‘back of the envelope’ calculations indicate that it could accrete MYR1.68/shr to our SOP-TP (assuming nil holding company discount).
 
 

 

 

ASEAN Banks

Selective opportunities

 

Consolidating growth after 1Q24. Maintain NEUTRAL Regional NIMs have peaked and higher-for-longer interest rates are likely to delay a fresh credit cycle. While asset quality remains benign, expect provisioning costs to be elevated as the sector navigates geo-political and high interest rate uncertainty. We expect earnings momentum to consolidate regionally without clear visibility on rate cuts and fiscal stimulus in key markets such as ID and TH. Strong balance sheets and provisioning cover gives downside protection. Maintain NEUTRAL with MY (upside risks to growth, good dividend yields) and VN (structural growth, index upgrade catalyst) as relative preferences. Top picks: BMRI, BBCA, AMMB, CIMB, DBS, TTB, KTB, TCB, VCB.

 

 

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