#3 Scientex
RHB has
upgraded its rating to Buy on the company with a target price of RM 4.68.
Commendable results and new plants coming online are driving the sentiments of the stock.
"2QFY22 revenue improved 2.6% QoQ to MYR952m (1HFY22 revenue +10% YoY) due to a firm demand for industrial and consumer packaging, with exports packaging revenue growing 17.5% YoY in 1HFY22 (locally: +7.2% YoY).
Revenue from the property segment remained flat in 1HFY22 (+0.6% YoY) due to a postponement of the issuance of the certificate of completion and compliance (CCC) for certain property projects which delayed the progress billings for the period.
New stretch film plant coming online in the second half of this year. Scientex’s new robotics stretch film plant – the first of its kind in Asia – will commence operations in a few months (capex: MYR80m).
The plant will initially be installed with two fully automated production lines which should improve the group’s manufacturing efficiency, productivity, and add an industrial stretch film capacity of 1,500 tonnes/month."
>> Read more about the company here.
#4 Bermaz Auto
Hong Leong Investment Bank has maintained its
Buy rating on the stock with a buy rating and a target price of RM 1.95.
Reopening of one of its revenue centers and commendable results are reasons for the favourable rating.
"Reported core PATMI of RM44.4m for 3QFY22 (+65.9% QoQ; +32.4% YoY) and RM82.8m for 9MFY22 (+24.6% YoY). We deem the result within HLIB expectation (55.4%) and consensus (62.5%) as we anticipate stronger earnings in 4QFY22 following stronger sales driven by the extended SST exemptions and continued economic recovery under the endemic transition in Malaysia and also economic reopening in Philippines.
BAuto’s Malaysia operation is expected to continue its uptrend in coming quarters, leveraging onto the extended SST exemptions until Jun 2022 and the recovery of the economy as the country transitions into an endemic stage. The current outstanding orders for Mazda marque is c.3.5k units, indicative of 2.0-2.5 months delivery backlog.
Malaysia operation is also expected to leverage onto the newly launched Peugeot new 2008, 3008 facelift and 5008 facelift and Kia marque for growth in 2022. Backlog order for Peugeot is c.300 units and Kia is c. 200 units.
Similarly, Philippines market is also expected to recover following its recent eased movement restrictions to the lowest level, allowing economic activities to operate at full capacity again."
>> Read more about the company here.
#5 Ranhill Utilities
RHB has maintained
its Buy rating on the stock with its target price at RM 0.76.
With a good order signed that will bring the company good bottom line is one of the main reason of this good rating.
"Ranhill Utilities via subsidiary, Ranhill Water Services (RWS), had accepted a letter of acceptance from Pengurusan Aset Air Berhad (PAAB). We believe the contract awarded worth MYR61.5m, with works to be undertaken from 29 Mar 2022 to 28 Mar 2024, will contribute positively to overall earnings.
We foresee minimal execution risks by RWS as it has previously secured two of PAAB’s pipe replacement contracts through a competitive open tender exercise in 2019.
Apart from that, RWS has been actively involved in Kelantan’s water supply projects, and since 2012, it has secured three non-revenue water (NRW) management contracts from Air Kelantan SB (AKSB).
As such, this latest win solidifies RWS’ presence in Kelantan and strengthen RAHH’s credentials as a holistic NRW management specialist in the country."
>> Read more about the company here.
#6 Hong Leong Bank
AM Investment has
maintained its Buy rating on the company with a target price of RM 22.90.
Respectable earnings as well as positive outlook boosted the rating of the company.
"2Q22 core earnings came in modestly higher at RM868mil (+1.2% YoY) with lower provisions and higher share of profits from associates partially offset by slight decline in total income.
6M22 core earnings of RM1.7bil (+23.3% YoY) were within expectations, making up 52.1% of our estimate. Meanwhile, it was slightly ahead of consensus estimate, accounting for 56.8% of street numbers.
The group’s loans expanded by 6.7% YoY with domestic loans growing at 5.7% YoY, ahead of the industry’s 4.5%
YoY. Meanwhile, overseas’ loan growth picked up pace to 25.7% YoY.
Underlying NIM in 1Q22 rose by 6bps QoQ at 2.19% in 2Q22. For 6M22, NIM expanded by 12bps YoY to 2.20%. CI ratio for 6M22 improved to 37.1% with positive jaws of 1.3% YoY. "
>> Read more about the company here.
#7 Matrix Concepts
RHB has
maintained its Buy rating on the company with a target price of RM 2.66.
Impressive dividend that are likely supported is one of the biggest reason behind the rating.
"We believe Matrix Concepts’ high dividend yield and potential en bloc sale in Jakarta will continue to drive investor interest on the stock. If the en bloc sale materialises, part of the proceeds repatriated back may suggest a potential upside to FY23F dividend.
We are also upbeat that management remains focused to entrench its presence in Sendayan, while strategic landbanking should boost the company’s RNAV if the land is sizeable enough.
Post virtual meeting with management, we remain positive on the steady growth outlook for the company. Management will endeavour to payout 50% of earnings as dividend despite its official payout policy of “up to 40%”.
Already, MCH has been hitting >40% payout over the past four quarters. Its dividend yield of c.6% is amongst the
highest in the sector. It is in a near net cash position"
>> Read more about the company here.