Highlights

AmInvest Research Reports

Author: AmInvest   |   Latest post: Mon, 18 Jan 2021, 9:44 AM

 

Thematic - Emergency measures to hit harder on virus but less severe on economy

Author: AmInvest   |  Publish date: Mon, 18 Jan 2021, 9:44 AM


The MCO 2.0 and state of emergency may not impact the economic significantly as compared to the previous MCO. With the focus on supporting the economy and addressing the pandemic virus, the MCO 2.0 is seen as a less restrictive measure that allows key sectors to operate. Furthermore, potential easing on the list of economic sectors allowed to operate during the movement control order remains on the table. Some micro businesses that have already been adhering to the SOP could be allowed to operate as well.

Besides, from our past experience with the MCO, there would be a more well-defined SOP, logistics and work-from-home infrastructure. There will be less disruption to businesses. And the public will be better prepared with heightened awareness. Combined with the RM325 billion stimulus measures which are expected to be implemented faster and effectively , steady exports growth from improving global GDP and trade, and firmer commodity prices with an upwards revision of 2021 are anticipated. Brent crude oil price is seen to average between US$50 and US$53 per barrel (previously US$42–45 per barrel) while CPO is expected to average RM3,000–3,200 per tonne (previously RM2,500–2,600 per tonne).

Furthermore, with a view that the pandemic virus spread dust should settle in 6–12 months, the domestic economy should, on the whole, hold up well. However, it is important to recognise that there will be some initial setback from the restrictive measures which is more likely to be felt in 1H2021.

Assuming the overall economic capacity during this period operates around 50%–60% in 1Q2021 and improves to 70%–80% in 2Q2021 with a gradual easing of the restrictive measures, and the economy operates as usual in 2H2021, the reduction in domestic GDP would be between 0.6% and 1.3%. This would mean the 2021 GDP projection of 6.5% growth would now be hovering around 5.2% and 5.9%. Upside to growth still remains, depends on external and domestic.

A. Recap

  • The severity of the Covid-19 impact on the economy, businesses and people was significant. It was due to the unprecedented measures taken to contain the virus spread through lockdowns and movement control orders (MCOs). Such unprecedented measures had led to a weak economic and poor financial results, cutbacks in demand and supply chain disruptions with knock-on effects of troubled sectors on employment both globally and in Malaysia.
     
  • Covid-19 impacted businesses i.e both large and SMEs as well as the labour market and society in several areas:
    1. Financial – delay in receivables and payments to vendor; fall in revenue projection; shortfall in liquidity
    2. Customer – drop in demand; poor access to customers; lower capacity; poor post-sales obligations
    3. Technology – poor communication with suppliers and customers; data and infrastructure issues; lack of familiarity with online applications; work-from-home connectivity challenges
    4. Supply chain – delay in the delivery and fulfilment; delay in receiving supplies; inventory pile-up
    5.  People – operations downtime; delay in completing tasks and projects; deferment in upskilling and training; disruptions due to illness
    6. Labour market – spike in unemployment; crippled informal sector, especially those self-employed
    7. Social – The B40 are worst hit while the M40 experienced loss or reduction of income; urban and rural poor
       
  • The economic impact from the MCO which came into force from 18 March until end-April 2020 caused an estimated revenue loss of RM63 billion or RM1.4 billion per day. During this period, the economy is projected to be operating around 40% capacity. Importantly, during this pandemic period, online sales of fast-moving grew rapidly, estimated at about 40%.
     
  • However, the relaxation of the restrictive measures both globally and in Malaysia in May created some breathing space. In Malaysia, business activities started to pick up while consumer spending gained momentum. The 2Q2020 GDP fell by 17.1% y/y, the worst contraction since the 1997 Asian financial crisis. The contraction was somewhat contained following the easing of the restrictive measures and supported by the stimulus measures.
     
  • Meanwhile, business activities and consumer spending continued to improve in 3Q2020. The economy benefitted from a well contained spread of the pandemic virus that had allowed the easing of the restrictive measures and supported by the stimulus measures as well as improving trade from the recovery of global GDP and trade. The 3Q2020 GDP registered a slower contraction of 2.4% y/y.
     
  • Meanwhile, the upside growth momentum was slightly dented following the rise in the number of Covid-19 cases. It resulted in the imposition of targeted restrictive measures in certain states. As a result of the conditional movement control order (CMCO), the estimated loss of revenue was RM17 billion from 7 October till 6 December 2020, which translated to a per day loss of around RM0.3 billion.
     
  • For the 4Q2020 GDP, the impact from the CMCO is likely to result in a contraction of 3.2 to 3.5%, which will be slightly worse than -2.7% y/y reported in the 3Q2020 GDP. On that note, the full-year 2020 GDP is estimated to contract around 5.5% to 5.7%.

B. MCO 2.0 and state of emergency

  • After a steep decline in early 2020, the global economy, including Malaysia, gained momentum in May from the gradual easing of the restrictive measures and supported by the stimulus measures. While this may have softened the downside risk on global economy, the risk remains high. Should the restrictions be extended or should disruptions to economic activity be prolonged, the recession could be deeper. While looking at a global GDP contraction of 4.5 % in 2020, the downside could reach -8.0%.
     
  • However, the possibilities for global GDP to perform better than our -5.0% projection for 2020 remains on the cards. Underpinned by such a scenario, the world economy in 2021 is seen to set the stage for better growth. The major economies have shaken off the impact of the pandemic and lockdowns with relatively little long-term economic damage. It was supported by the substantial monetary and fiscal support. Wage subsidies and job retention schemes have prevented unemployment rates from rising significantly in most countries.
     
  • The global GDP outlook for 2021 is projected to rebound to 5.5% with Malaysia’s growth forecasted at 6.5%. Optimism surrounding a global economic rebound in 2021 bodes well for Malaysia, which is a trading nation. Growth will be supported on the back of a vaccine rollout that sever the link between the Covid-19 virus and mobility. A widespread distribution of vaccines should be in place in 3Q2021. Apart from vaccines, the support from non-pharmaceutical measures remains vital.
     
  • The rebound in both global and domestic economy will continue to be underpinned by consumers. Investment, which acts as a reflection of the private corporate sector's risk tolerance and a key feature of any self-sustaining recovery, will bounce back as well.
     
  • Furthermore, global trade is poised to pick up as demand recovers. With Covid-19 restrictions easing, trade is poised to bounce back. But some pandemic virus-related disruptions to transport capacity will take time to unwind, and cause a persistent drag even as demand recovers.
     
  • Lockdowns and social distancing will remain. How well the global economy, including Malaysia, will rebound in 2021 will depend on how smooth the rollout of vaccines is. Vaccine progress is a key step towards restoring consumer and investment confidence over the course of 2021.
     
  • Also, the speed of rebound depends on how fast and effectively the stimulus measures are implemented. In the case of Malaysia, it is the effectiveness and implementation of the RM325 billion stimulus measures. Should there be a prolonged period of restrictive measures, then there is a need for the governments to keep spending to help shore up their economies in the face of this unprecedented crisis – even if that means adopting a more relaxed attitude to managing national budget. Raising the debt level is a high cost for the economy now, but as the economy improves, this high cost could be reduced with prudent policies.
     
  • On the whole, in taking into consideration of 2021 global economy including Malaysia’s rebound, there is a need for another six to nine months or probably 12 months before the pandemic virus spread starts to ease. Still, the outlook is that the global economy including Malaysia’s is set to rebound.

C. Will MCO 2.0 & SOE derail Malaysia’s 2021 rebound?

  • On 11 January 2021, Malaysia reintroduced the movement control order (MCO 2.0). A state of emergency (SOE) was declared by the King on 12 January 2021. This raised concerns as to whether the economic recovery would de delayed. While some dent could be expected on the immediate term, it is unlikely for the economy to report an extremely slower growth in 2021.
     
  • For a start, the MCO 2.0 was imposed on five states i.e. Selangor, Penang, Melaka, Johor and Sabah, and the three federal territories (FTs) of Kuala Lumpur, Putrajaya and Labuan due to the worsening Covid-19 situation. These five states and three FTs account for about 66% of the national GDP. Their manufacturing and services activities account for 14.6% and 42% of the national GDP respectively.
     
  • Another 6 states remain under the CCMCO while two other states will see softer restrictions under the recovery MCO (RMCO), which is the mildest form of mobility restrictions. The restrictive measures will be in place for at least two weeks from 13–26 January.
     
  • Looking at the MCO 2.0 this time around, it appears to be less restrictive. Key sectors like manufacturing, industrial, construction, services, distribution and trade, plantation and commodities are allowed to operate. These sectors play a key role to support the supply of basic necessities, ensure uninterrupted supply chains and support critical infrastructure and emergency work.
     
  • And the potential easing on the list of economic sectors allowed to operate during the restrictive movement period remains on the table. Room for several key manufacturing sectors which are not under the essential services list as part of the economic sectors — textile and apparel manufacturers, ceramic product manufacturers, glass and footwear manufacturers as they are mainly export-oriented industries –– could be included. Likewise, some of micro businesses that have already been adhering to the SOP could be allowed to operate.
     
  • The SOE declared on 12 January until 1 August 2021 ( it could end earlier) by the King is to help battle Covid-19. How long the SOE will remain in place depends on the special independent committee’s view on the pandemic. The SOE is not a military coup. There is no curfew. Public administration is not affected. It allows the government to gain access to the nation’s private healthcare system for the treatment of Covid-19 patients and empower the military to aid the police force in the enforcement of law and border control during this period.
     
  • The parliament and state legislative assemblies will not convene during this period. Elections and by-elections will also be put off until the state of emergency is over. And elections can be held when the committee is of the view that the pandemic is over.
     
  • Given that the MCO 2.0 and SOE’s aim is to control the pandemic virus spread while the economy operates as usual, the downside risk on the overall economy could be less severe than envisaged. Besides, from our past experience with the MCO, there would be a more well-defined SOP, logistics and work-from-home infrastructure. There will be less disruption to businesses. And the public will be better prepared with heightened awareness.
     
  • And combined with the RM325 billion stimulus measures which are expected to be implemented faster and effectively, steady export growth from improving global GDP and trade, and firmer commodity prices with an upwards revision of 2021 are anticipated. Brent crude oil price is seen to average between US$50 and US$53 per barrel (previously US$42–45 per barrel) while CPO is expected to average RM3,000–3,200 per tonne (previously RM 2,500– 2,600 per tonne). The view that the pandemic virus spread dust will settle in 6–12 months should see the domestic economy on the whole hold up well.
     
  • However, it is important to recognise that there will be some initial setback from the restrictive measures which is more likely to be felt in 1H2021.
     
  • Assuming the overall economic capacity during this period operates around 50%–60% in 1Q2021 and improves to 70%–80% in 2Q2021 with a gradual easing of the restrictive measures, and the economy operates as usual in 2H2021, the reduction in domestic GDP would be between 0.6% and 1.3.%. This would mean the 2021 GDP projection of 6.5% growth would now be hovering around 5.2% and 5.9%. Upside to growth still remains, depends on external and domestic.

Source: AmInvest Research - 18 Jan 2021

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Top Glove Corp - Employees in 4 factories tested positive for Covid-19

Author: AmInvest   |  Publish date: Mon, 18 Jan 2021, 9:40 AM


  • Top Glove issued a press release on 16 Jan 2021 to confirm that workers from four of its factories have recently tested positive for Covid-19. The company, however, did not specify the total number of infected workers. All employees at its Port Dickson facilities had gone for screening with the Ministry of Health on 14 Jan 2021, and the affected employees are currently under quarantine. Foreign workers who are under quarantine are in designated quarters, while Malaysian staff are undergoing the quarantine period at home.
     
  • The company was also reported to be arranging for employees at the Sungai Puloh factory, Klang to undergo mass screening on 16 Jan 2021 while contact tracing and close contact screenings were being conducted at the facilities in Shah Alam and Kulim, Kedah.
     
  • All the affected areas, including staff quarters and company vehicles, have since been disinfected, with all related costs for local and foreign employees were borne by the company. Meanwhile, Top Glove noted that all primary contacts of these employees over the past 14 days have been identified and placed under quarantine and will undergo subsequent tests before they are permitted to return to work.
     
  • The impact on revenue is lower than 1% and is not material hence we are not making any changes to our earnings forecasts at this juncture. Our fair value is unchanged at RM6.50 based on CY22 EPS over 23x PER. Maintain HOLD recommendation.

Source: AmInvest Research - 18 Jan 2021

Labels: TOPGLOV
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Plantation - News flow for week 11 to 15 Jan

Author: AmInvest   |  Publish date: Mon, 18 Jan 2021, 9:39 AM


  • The USDA (US Department of Agriculture) has released its monthly demand and supply projections for vegetable oils. The USDA has reduced its 2020/2021F forecast of US soybean inventory by 20% to 140mil from 175mil bushels due to lower yields. US soybean yield is now estimated to be 50.2 bushels per acre vs. 50.7 bushels per acre in 2020/2021F. Comparing 2020/2021F against 2019/2020, US soybean production is expected to improve by 16.4% to 4,135mil bushels. However, US soybean stockpiles are envisaged to plunge by 73.3% to 140mil bushels in 2020/2021F due to lower carry-over inventory from the previous season.
     
  • Due to a downward revision in US soybean inventory, global stockpiles of soybeans are anticipated to fall by 11.6% to 84.3mil tonnes in 2020/2021F from 95.4mil tonnes in 2019/2020. Global soybean production is forecast to rise by 7.3% to 361.0mil tonnes in 2020/2021F on the back of a 5.6% increase in output in Brazil and 16.4% expansion in output in the USA.
     
  • Bloomberg reported that while the immediate outlook for Argentine soybeans remains fairly grim, things are looking up in Brazil where chances of a record harvest are increasing. In Brazil, the weather has improved enough to bolster plant development after dryness hindered sowing. An industry player was cited as saying that in Parana, which is Brazil’s second largest soybean growing state, regular rains have brought soil moisture back to normal levels. Currently, flowering and grain filing are performing well although the state has already lost 5% of its yield potential due to initial dryness.
     
  • According to Bloomberg also, Argentina has backtracked on a decision to cap corn exports. Instead, the country will monitor supplies to avoid tensions in the domestic market. Argentina has agreed to remove a limit on shipments of 30,000 tonnes a day that had been put in place in the rest of the season until February 2021.
     
  • S&P Global Platts said that Brazil’s soybean crush volumes are expected to remain elevated in year 2021F on high demand while the outlook for Argentina’s crushing industry is precarious as it grapples with recession and more than US$323bil of debt. An economist in Argentina said that the key challenge for Argentine processors in 2021F is likely to be low or negative crushing margins due to soaring input and logistics costs. In addition, crushers in Argentina are expected to face a supply crunch for raw soybeans in 2021F as the government’s currency control policies discourage farmers from selling.
     
  • Reuters reported that the US Supreme Court has agreed to review a lower court ruling that severely limited the government’s power to exempt small refineries from the country’s biofuel law, rekindling a dispute between the oil and corn industries. Under the Renewable Fuel Standard, refiners must blend billions of gallons of corn-based ethanol and other biofuels into their fuel or buy credit from those who do. The court is expected to hear the case in April and a ruling could take several months.

Source: AmInvest Research - 18 Jan 2021

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Perak Transit - A new breed of transport terminal operator

Author: AmInvest   |  Publish date: Mon, 18 Jan 2021, 9:38 AM


Investment Highlights

  • We initiate coverage on Perak Transit with a BUY recommendation and fair value (FV) of RM1.25. We see many similarities between this operator of modern public transport terminals and an airport operator. We value Perak Transit at RM1.25 based on 15x its FY22F EPS, at a 30% discount to our FY22F target PE of 22x for Malaysia Airports.
     
  • Here’s why we like Perak Transit:
    1. Its unique business model, i.e. the operation of modern public transport terminals, also known as integrated public transport terminals (IPTTs) that emulate airports with spacious and brightly lit shopping, dining and waiting areas, and clean public facilities, particularly the washrooms. This entices visitors and commuters to spend more money and time in the terminal prior to their departure or upon their arrival, or while sending off or picking up their loved ones. This captive traffic is monetized in the form of rental incomes from commercial units and advertising space within the terminal;
    2. Perak Transit has proven the commercial viability of this business model in its Terminal Meru Raya in Ipoh (an interstate transportation hub) and the newly opened Terminal Kampar Putra Sentral in Kampar. Kampar Putra Sentral is supported by a high and fast-growing student population in the campus town. This student population has high propensity for travel during school breaks and festivities, as well as during weekends for leisure; and
    3. The vast opportunities for Perak Transit to replicate this successful business model. Already, it has at least three more projects in the pipeline, namely, in Bidor, Tronoh and Kuantan.
       
  • We project Perak Transit’s earnings to grow by 22% and 10% in FY21–22F underpinned byhigher footfalls, and hence improved rental and advertising incomes arising from: (1) the normalisation of intrastate and interstate bus passenger travel (including the student population in Kampar) assuming the Covid-19 pandemic is to gradually come under control by 2H2021 with the availability of effective vaccines; (2) Kampar Putra Sentral’s first fullyear contribution from FY21F; and (3) the organic growth in bus passenger travel post-pandemic.
     
  • At 9–11x forward earnings, we believe Perak Transit offers investors a good opportunity to own a defensive public infrastructure business that is replicable for growth at bargain valuations.

Source: AmInvest Research - 18 Jan 2021

Labels: PTRANS
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Stocks on Radar - FoundPac Group (5277)

Author: AmInvest   |  Publish date: Mon, 18 Jan 2021, 9:35 AM


FoundPac Group is moving sideways, touching the RM0.975 resistance level. With its RSI indicator in an uptrend, coupled with a higher low candle stick pattern, there is a good chance it will break out and head towards the short-term target price of RM1.01, followed by RM1.05. The downside support is marked at RM0.93. Traders are advised to exit on a breach to avoid further losses.

Trading Call: Buy on breakout RM0.975

Target: RM1.01, RM1.05 (time frame: 2-4 weeks)

Exit: RM0.93

Source: AmInvest Research - 18 Jan 2021

Labels: FPGROUP
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Stocks on Radar - Vertice (7240)

Author: AmInvest   |  Publish date: Mon, 18 Jan 2021, 9:33 AM


Vertice jumped and tested the RM0.32 resistance level. With its RSI indicator pointing upwards, coupled with higher trading volume, we see a possibility for a technical breakout. If this happens, we expect it to move towards the short-term target prices of RM0.34 and RM0.355. The downside support is projected at RM0.29. Traders are advised to exit on a breach to avoid further losses.

Trading Call: Buy near RM0.32

Target: RM0.34, RM0.355 (time frame: 2-4 weeks)

Exit: RM0.29

Source: AmInvest Research - 18 Jan 2021

Labels: VERTICE
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Malakoff - Bidding for more renewable projects

Author: AmInvest   |  Publish date: Fri, 15 Jan 2021, 9:57 AM


Investment Highlights

  • We are downgrading Malakoff to HOLD from BUY with a lower DCF-based fair value of RM1.00/share (WACC: 7.5%) vs. RM1.10/share previously. We have reduced Malakoff’s FY20E net profit by 8.2% and FY21F net earnings by 6.1%. We believe that an unplanned outage at the Tanjung Bin Energy (TBE) power plant in 4QFY20 would affect Malakoff’s net profit.
  • TBE accounted for 29.0% of Malakoff’s capacity payments in 9MFY20 while the TBP power plant accounted for a larger 47.6%.
  • In spite of the downward revision in Malakoff’s earnings forecast, we are keeping our gross DPS forecast of 6.5 sen (FY19: 6.5 sen) each for FY20E and FY21F. The gross DPS of 6.5 sen translates into a decent dividend yield of 7.2% based on the share price of RM0.90.
  • We forecast Alam Flora to account for 19.4% of Malakoff’s net profit in FY21F. Apart from waste collection, Alam Flora’s growth is expected to be underpinned by the environmental solutions segment, which involves sanitisation and cleaning works. The environmental solutions division accounts for about 20% of Alam Flora’s earnings.
  • Due to Covid-19, Alam Flora is expected to benefit from sustained demand for sanitisation works in FY21F. Also recently, Alam Flora assisted the Pahang state government in cleaning works after the state was hit by floods.
  • On the flip side, Malakoff’s despatch of electricity to Tenaga Nasional (TNB) may be affected if the MCO (movement restriction order) lasts for more than two weeks. In 2QFY20, Malakoff’s energy payments fell by 25.1% QoQ due to the MCO. However, the group’s bottomline was not severely affected in 2QFY20 due to higher earnings from the associates.
  • Malakoff is expected to submit its bid for a waste-toenergy (WTE) power plant in Johor soon. The tender is envisaged to close at the end of January 2021. The winner may be announced in 2HFY21. There may be tenders for six more waste-to-energy power plants in various states such as Melaka in the coming four years.
  • Based on Cypark Resources’ RM300mil Ladang Tanah Merah WTE incinerator project in Negeri Sembilan, we estimate the cost of a WTE plant at RM13.6mil per MW.

Source: AmInvest Research - 15 Jan 2021

Labels: MALAKOF
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Stocks On Radar - VSTECS (5162)

Author: AmInvest   |  Publish date: Fri, 15 Jan 2021, 8:53 AM


VSTECS surged and touched the RM2.10 resistance level. With its RSI indicator in an uptrend, coupled with a higher low candle stick pattern, there is a good chance it will break out and head towards the short-term target price of RM2.20, followed by RM2.30. The downside support is marked at RM1.91. Traders are advised to exit on a breach to avoid further losses.

Trading Call: Buy on breakout RM2.10

Target: RM2.20, RM2.30 (time frame: 2-4 weeks)

Exit: RM1.91

Source: AmInvest Research - 15 Jan 2021

Labels: VSTECS
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Stocks on Radar - RGT (9954)

Author: AmInvest   |  Publish date: Fri, 15 Jan 2021, 8:49 AM


RGT jumped and tested the RM0.60 resistance level. With its RSI indicator pointing upwards, coupled with higher trading volume, we see a possibility for a technical breakout. If this happens, we expect it to move towards the short-term target prices of RM0.625 and RM0.66. The downside support is projected at RM0.54. Traders are advised to exit on a breach to avoid further losses.

Trading Call: Buy on breakout RM0.60

Target: RM0.625, RM0.66 (time frame: 2-4 weeks)

Exit: RM0.54

Source: AmInvest Research - 15 Jan 2021

Labels: RGTBHD
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Telecommunication - MCO 2.0 amid consolidation prospects

Author: AmInvest   |  Publish date: Thu, 14 Jan 2021, 9:45 AM


Investment Highlights

  • Partly mitigated impact from new round of MCO. The reimposition of the movement control order (MCO) yesterday could have a partly mitigated impact on cellular operators (celcos), which experienced lower prepaid subscriber acquisitions with the temporary closure of physical outlets and suspension of postpaid accounts for non-payment back in March–April last year. Recall that this partly contributed to celcos’ revenue contracting QoQ by 8.7% in 2Q2020 and 7.5% in 3Q2020 before recovering 6% in 3Q2020 with the relaxation of movement restrictions. From our channel checks, operators remain cautious on further stresses on small-medium businesses amid declining overall disposable income from the lockdowns and slower economic activities. However, celcos are more prepared this round and also hopeful for a partly mitigated impact from subscriber renewals and subscriptions as the previous lockdown had encouraged more consumers to embrace digital platforms and online payment channels. Additionally, this MCO 2.0 is less onerous given the imposition on less states vs. the first lockdown while the free 1GB data offer for productivity and education has been extended indefinitely since last month. This is unlikely to significantly increase operators’ cost structure while driving higher work-from-home data usage.
  • Unrelenting competition in mobile and rising for fibre. In our view, the larger concern for operators is the unrelenting competition in mobile and fixed line business. Currently, U Mobile offers the most competitive plan with a RM30 prepaid package, which offers unlimited data and 6GB hotspot with speed cap of 6Mbps together with RM5/month top-up for unlimited calls. Meanwhile, Digi’s current entry-level plans for prepaid packages at RM15/month and postpaid at RM38/month are gaining traction even with limited data quotas. In the fibre broadband market, TM’s unifi has been aggressively competing for market share with recent promotions of free 42” Sharp TV sets and redemption of the RM500 penalty fee for switching from Maxis Home Fibre. In Peninsular Malaysia, Celcom and Digi have begun to target selectively market segments in the Klang Valley for their fibre-to-home offerings.
  • Net subscribers contracted. Cellular net subscribers decreased by 188K to 30.2mil in 3Q2020 after registering a surprisingly strong 121K QoQ increase in 2Q2020. Maxis again was the main cause of the variation as the group registered an unexpected 618K reduction in subscribers vs. a net gain of 373K for Celcom and 57K for Digi. The main drag stemmed from a reduction of 277K prepaid users to 20.2mil, wholly attributable to Maxis’ 683K drop with the removal of revenue-generating subscribers beyond 30 days, SIM consolidation and intense competition. This was the only prepaid decline amongst cellular operators as Celcom managed to register a 339K increase with the launch on unlimited data packages while Digi rose by 67K.
  • However, celco’s 3Q20 earnings recovered from Covid-19. 3Q2020 celco core net profit recovered with an increase of 20% QoQ to RM925mil after contracting by 11% due to the impact of the MCO which affected service revenue, subscribers and ARPU. Celcos’ 3Q2020 service revenues rose 6% QoQ to RM5.4bil, which drove EBITDA by 8% QoQ and EBITDA margin up by 2 percentage points (ppt) to 16.2%. The higher service revenue stemmed from average revenue per user (ARPU) rising by RM2/month to RM42/month and postpaid subscribers increasing by 76K QoQ to 9.8mil. The best performer was Axiata’s Celcom, which spearheaded a sizzling 66% QoQ surge to RM240mil in 3Q2020 after an 18% decline in 2Q2020. This was followed by Digi, which climbed 11% QoQ and Maxis’ 8% QoQ.
  • Maxis loses prepaid lead to Digi. In 3Q2020, Maxis’ overall subscriber market share of 37% retained its lead over Digi’s 35% while Celcom remained third at 28%. However, Digi has now retaken its pole position in the prepaid segment with the highest market share of 38% from Maxis, which has fallen to 35% following its sharp 3Q2020 reduction. Nevertheless, Maxis’ postpaid subscriber focus and convergence strategy with its fibre broadband services remains formidable as compared to Digi and Celcom’s.
  • Consolidation still in play. As we highlighted on 11 August 2020, declining data yields, new 5G spectrum fees and capex pressures are likely to drive players to seek consolidation amongst themselves to reduce costs, secure economies of scale and reduce rivalry. While the MCMC has shown a preference for maintaining competitive pressures to provide reduced broadband prices for consumers, we view that the industry’s stagnant revenue trajectory will eventually drive the sector towards more merger and acquisition activities, which was viewed as inevitable during Axiata’s analyst briefing last month.
  • Maintain OVERWEIGHT with BUY calls for TM, which has shown significant cost improvements together with more compelling dividend yields while Axiata offers bargain EV/EBITDA valuations with multiple opportunities for monetisation as the group aims for higher dividend payout policies. These valuations are even more compelling given their 3–4 star rating for ESG compliance on the FTSE4GOOD INDEX.

Source: AmInvest Research - 14 Jan 2021

Labels: TM, AXIATA, MAXIS, DIGI
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Thematic - Self-isolation and support must go hand in hand

Author: AmInvest   |  Publish date: Thu, 14 Jan 2021, 9:42 AM


  • The world is still struggling to handle the ravaging Covid-19 pandemic and the deep economic recession caused by massive lockdown measures as we start the year 2021. Risks and uncertainties have undoubtedly remain, with mounting protectionism and anti-globalisation sentiment adding to the global economic challenges.
  • While 2020 has been described as “the worst year ever” – which resulted in enormous and endless pain – still good things happened, giving hope, courage and confidence. Following months of fight against the pandemic, the global community has demonstrated the will and determination to work together to defeat the virus and revitalise the world economy.
  • With more positive news from vaccine trials, the light at the end of this long and dark tunnel is growing brighter. After a projected 4% decline in 2020, the global economy is now expected to expand around 5% to 5.5% in 2021. Much of 2021 growth will depend on controlling the spread of the virus besides the vaccine deployment. The speed of the economic recovery will also rely on the reinvestment cycle as well as structural reforms aimed at sustainable growth.
  • Compared with the panic and disorder at the beginning of the outbreak, countries across the world have gradually established pandemic prevention systems. There has been better public understanding supported by a rational attitude.
  • According to the World Health Organization (WHO), as of 16 Dec, the number of Covid-19 candidate vaccines being developed worldwide stood at 222. Out of these, 56 are under clinical trials. While encouraging news about more effective anti-viral treatments and promising vaccines that could tame the pandemic by end-2021 had raised the level of optimism, it has slowly slipped.
  • Despite some bright spots emerging at the end of the dark tunnel, the challenge to address the pandemic has again raised concerns at the start of 2021. The surge in the number of Covid-19 cases compounded the fresh challenge of a mutating virus.
  • The WHO on 7 Jan 2021 has warned that the fight against the pandemic is at a “tipping point”. Being easily transmissible, it means that more people can get infected. This could mean more serious infections and more fatalities. Hence, the centre of attention now is to have strong unity both at the global and country level to address the spread and mutation of this virus. It will depend on the measures taken to address the spread.
  • Lockdowns only work if they reduce transmission. And transmission can only be reduced if those who are sick self-isolate. Such measures comes at a great cost. Those who are unable and cannot afford to self-isolate will face a choice between financial devastation and compliance. By not providing proper support, this group of people will be forced to decide between their families and communities.
  • Such choice is seen as a cruel option. Past lockdowns and movement control orders (MCO) have revealed the Covid-19 disparities were driven by differences in exposure at home and work. Those of lower socio-economic status were hit the hardest by both the virus and the collateral damage of restrictions.
  • As a result of the restrictive movements, almost all risk is shifted to the millions workers who cannot work from home, and those who live in deprived areas as well as in overcrowded houses. These two groups often overlap. The new variant of Covid-19 is significantly more infectious. The risk of rising cases remains high.
  • Hence, like lockdowns and MCOs, testing and tracing will only reduce transmission if the number of infectious cases are being isolated effectively. Yet how successful will it be? It remains unclear. Much will depend on adherence to the rules of the restrictive measures. In particular, those in the lower income group and cannot work from home will be badly afflicted.
  • This time around, with the rising number of Covid-19 cases, unprecedented restrictive measures are set to be introduced. Should that happen, there is a need to provide proper self-isolation support. Otherwise, this would mean that there will be protection for some, and pandemic for others. The reason being there are two categories of people i.e. those who have the means to stay at home and those who cannot, no matter how much they want to.
  • Hence, there is a desperate need for action from the government. Key workers must be guaranteed social and income protection. Additional support must be provided to ensure lowly-paid, non-salaried and zero-hour contract workers can afford to follow isolation rules.
  • For individuals to be able to self-isolate, support should include a daily text or phone call and provision of food supplies and essential goods. There is a need for solidarity and togetherness rather than divisive messaging. Workplaces must be made safer.
  • The government should use unoccupied hotel rooms to provide accommodation so that people, particularly those in crowded and multi-generational households, are able to self-isolate just like it’s practised in New Zealand, South Korea and New York.
  • Aslo, by addressing the barriers faced by socio-economically vulnerable group, it will increase test uptake. For instance, a pilot of mass-testing was rolled out in Liverpool. But the government ignored the requests from local public health leaders for additional funds to support isolation. As a result, the mass-testing reduced following low-test uptake from the deprived communities. It was due to the fear of not having adequate support to self-isolate.
  • Sweden’s Covid-19 strategy in 2020 is seen as coming to an end in 2021. The government recently proposed an emergency law that would allow it to lock down large parts of society, recommended the use of face masks, and schools to have the option to close for pupils over 13 – all changes to its strategy to combat the pandemic.
  • It appears that Sweden does not stand out from the rest of the world very much now. And with Sweden’s strategy being perceived as failing, it suggests that restrictive measures are necessary to contain the virus.
  • The effectiveness of the restrictive measures depends on the isolation of infectious individuals, which is the single most important measure in terms of controlling transmission. If the basic public health brake levers are not pulled up to slow the spread of the virus, it will continue to transmit. The effectiveness of the lockdown will be limited if the financially vulnerable groups are not self-isolated. It will be seen as the government shooting for the moon without looking at the rocket’s fuel.

Source: AmInvest Research - 14 Jan 2021

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Maxis - Enterprise solutions for Petronas stations

Author: AmInvest   |  Publish date: Thu, 14 Jan 2021, 9:40 AM


Investment Highlights

  • We maintain Maxis’ HOLD rating with an unchanged DCFderived fair value of RM5.50/share. This is based on a WACC discount rate of 6.3% and terminal growth rate assumption of 2%, implying an FY20F EV/EBITDA of 13x and is on par with its 3-year average.
  • Maxis has entered into a strategic partnership to offer converged solutions to Petronas Dagangan’s customers focusing on safety, security and sustainability for businesses to create unique retail experiences at Petronas stations as part of its retail transformation strategy.
  • The partnership would focus on leveraging big data and advanced analytics to co-create hyper personalisation for an enhanced and differentiated retail experience for over 1,000 Petronas stations through big data and advanced analytics with Maxis as the technology enabler.
  • The companies will also go to market with converged end-to-end business solutions that will offer greater convenience and cost optimisation while ensuring the safety and security of Petronas’ assets, fleet and drivers.
  • This will enable the customers of Petronas Dagangan and Maxis Business to benefit from a suite of solutions ranging from asset management to logistic services.
  • This is part of Maxis’ enterprise business, which contributed 7% of the group’s 9MFY20 service revenue. While this partnership is positive over the longer term for Maxis, we do not expect a substantive enhancement to the group’s earnings in the near term. Hence, we maintain our FY20F–FY22 earnings for now.
  • Besides this new development, the group has also partnered with Amazon Web Services’ Solution Provider Program and supported AmBank’s digital solutions for small-medium enterprises while helping the Penang state government to launch IoT pilot projects. These include offering cloud and bandwidth-on-demand services.
  • Meanwhile, given the uncertain impact from the Covid-19 pandemic, management is still not confident in providing a fresh guidance following the withdrawn expectation of a “flat to low single-digit increase” for both FY20F service revenue and normalised EBITDA.
  • Against the backdrop of intensifying competition in the cellular and fibre market, the stock’s FY21F EV/EBITDA of 12x is slightly below with its 3-year average of 13x, while providing a fair dividend yield of 4%.

Source: AmInvest Research - 14 Jan 2021

Labels: MAXIS
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Stocks on Radar - OCK Group (0172)

Author: AmInvest   |  Publish date: Thu, 14 Jan 2021, 8:52 AM


OCK Group jumped and tested the RM0.445 resistance level. With its RSI indicator pointing upwards, coupled with higher trading volume, we see a possibility for a technical breakout. If this happens, we expect it to move towards the short-term target prices of RM0.465 and RM0.485. The downside support is projected at RM0.405. Traders are advised to exit on a breach to avoid further losses.

Trading Call: Buy on breakout RM0.445

Target: RM0.465, RM0.485 (time frame: 2-4 weeks)

Exit: RM0.405

Source: AmInvest Research - 14 Jan 2021

Labels: OCK
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Stocks on Radar - Bahvest Resources (0098)

Author: AmInvest   |  Publish date: Thu, 14 Jan 2021, 8:51 AM


Bahvest Resources surged and touched the RM0.545 resistance level. With its 21-day moving average in an uptrend, coupled with higher trading volume, there is a good chance it will break out and head towards the shortterm target price of RM0.565, followed by RM0.59. The downside support is marked at RM0.50. Traders are advised to exit on a breach to avoid further losses.

Trading Call: Buy on breakout RM0.545

Target: RM0.565, RM0.59 (time frame: 2-4 weeks)

Exit: RM0.50

Source: AmInvest Research - 14 Jan 2021

Labels: BAHVEST
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FBM KLCI ETF - Bursa ETF Watch: Glove stocks cap valuations

Author: AmInvest   |  Publish date: Wed, 13 Jan 2021, 5:20 PM


Investment Highlights

  • We maintain our HOLD call on FBM KLCI ETF but trim our fair value (FV) to RM1.84 (from RM1.85) (Exhibit 1). Our FV is based on our FVs (for stocks under our coverage), consensus FVs (for stocks not under our coverage) and last traded price (for Hap Seng Consolidated, which is not under any coverage). It is at a 10% premium to its NAV of RM1.68 (Exhibit 1).
  • The FV adjustment is largely to reflect the downgrade in our FVs for glove makers Top Glove (-8% to RM6.50) and Hartalega (-8% to RM12.50), and a slight drop (-3% to RM11.46) in Supermax’s consensus FV, offset by the upgrade in our FVs for banks CIMB (+10% to RM4.10) and Public Bank (+7% to RM19.00).
  • We expect glove selling prices to start to ease within 1H2021 (after rising persistently over the last three quarters), as glove supply gradually outstrips glove demand, from a shortage situation at present.
  • Post- pandemic, we believe the demand growth for gloves will normalise to 8–10%, driven by rising glove usage per capita on higher/stricter hygiene standards.
  • On the supply side, expansion plans by existing players and new entrants should add about 120bil (+55%) pieces annually to global supply by the end of 2022. Top Glove, Supermax, Hartalega and Kossan will respectively add 30bil, 22bil, 12bil and 10bil pieces annually, with the balance coming from Sri Trang (Thailand), Intco Medical (China) and Blue Sail (China)
  • Meanwhile, cost pressure will come from the rising cost of inputs latex and butadiene, as well as additional expenses incurred in relation to the upgrading the dormitory for foreign workers in compliance with the Worker’ Minimum Standards of Housing and Amenities Act 1990, also known as Act 446.

Source: AmInvest Research - 13 Jan 2021

Labels: FBMKLCI-EA
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MYETF DJ Islamic Titans 25 - Bursa ETF Watch: Glove stocks dent valuations

Author: AmInvest   |  Publish date: Wed, 13 Jan 2021, 5:18 PM


Investment Highlights

  • We maintain our HOLD call on MYETF DJ Islamic 25 but adjust our fair value (FV) down by 2% to RM1.39 (from RM1.42) (Exhibit 3). Our FV is based on our FVs (for stocks under our coverage) and consensus FVs (for stocks not under our coverage). It is at a 5% premium to its NAV of RM1.32 (Exhibit 3).
  • The FV adjustment is driven largely by the downgrade in our FVs for glove makers Top Glove (-8% to RM6.50), Hartalega (-8% to RM12.25) and Kossan (-11% to RM4.80), and a slight drop (-3% to RM11.46) in Supermax’s consensus FV.
  • We expect glove selling prices to start to ease in 1H2021 (after rising persistently over the last three quarters), as glove supply gradually outstrips glove demand, from a shortage situation at present.
  • Post-pandemic, we believe the demand growth for gloves will normalise to 8–10%, underpinned by rising glove usage per capita on higher/stricter hygiene standards.
  • On the supply side, expansion plans by existing players and new entrants should add about 120bil (+55%) pieces annually to global supply by the end of 2022. Top Glove, Supermax, Hartalega and Kossan will respectively add 30bil, 22bil, 12bil and 10bil pieces annually, with the balance coming from Sri Trang (Thailand), Intco Medical (China) and Blue Sail (China).
  • Meanwhile, cost pressure will come from the rising cost of inputs latex and butadiene, as well as additional expenses incurred in relation to the upgrading the dormitory for foreign workers in compliance with the Worker’ Minimum Standards of Housing and Amenities Act 1990, also known as Act 446.

Source: AmInvest Research - 13 Jan 2021

Labels: MYETFDJ
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Glove - Earnings will peak in 1H2021

Author: AmInvest   |  Publish date: Wed, 13 Jan 2021, 5:14 PM


Investment Highlights

  • Maintain NEUTRAL. We are maintaining our NEUTRAL view on the sector as valuations for glove companies under our coverage (Top Glove, Kossan and Hartalega) are already fully reflected in the companies’ earnings outlook. We reckon the average selling prices (ASP) will begin to ease after 1H2021 following the strong increase over the past 9 months, and are already priced in. Moreover, we are cutting our target PER by 10% across the board to take into account the risk of a down cycle in the sector as a result of successful rollouts of Covid-19 vaccines. While we believe that glove makers’ fundamentals remain steady for the next few years, they offer limited upside at their current share prices. Hence we advise investors to accumulate at lower levels.
  • Demand will remain stable post-Covid-19. The Malaysian Rubber Glove Manufacturers Association (Margma) expects demand for gloves to remain positive post-Covid-19. The main reason is the pandemic has raised much awareness on personal hygiene, thus resulting in a higher usage of gloves. In developing countries, the usage of gloves is increasing with a wider adoption of gloves usage from non-medical industries such as F&B, services, retail etc. Beyond the pandemic, we anticipate a structural change in the way gloves are used, forming a new normal where glove usage per capita will rise as hygiene measures become stricter. This is expected to apply not only in the healthcare sector but also across different industries like F&B. The glove consumption per capita in emerging markets such as India and China is still low at around 2–6 gloves as opposed to about 100–280 gloves for developed countries.
  • Capacity expansion. Glove companies will continue their expansion plan, adding about 120bil (+55%) pcs per annum by the end of 2022 (Exhibit 2). For Malaysian companies, Top Glove and Supermax will see the biggest expansion as they add 30bil and 22bil pcs respectively, followed by Hartalega (12bil) and Kossan (10bil). The rest of the additional capacity will be from Sri Trang (Thailand), Intco Medical and Blue Sail (both China), totalling about 56bil pcs per annum.
  • ASP to taper off in 1H2021. Although we hold the view that demand for gloves will remain stable post-Covid-19, we expect ASP to decline as there is no longer a rush for gloves compared to what happened at the beginning of the pandemic. Nonetheless, we expect ASP will stabilise at a higher level than the pre-pandemic level due to the broader usage of gloves. Moreover, capacity expansion from glove companies will be able to cope with the future demand.
  • Rising raw material prices. Rubber prices have been increasing over the past 12 months as protective glove demand surges due to Covid-19. At the same time, the price of butadiene (Exhibit 4), which is the key ingredient to produce nitrile, has also been on the rising trend over the past 6 months. Nonetheless, we believe glove makers will be able to pass on the price increase to buyers, thus keeping their margins safe.
  • Maintain our HOLD call on Top Glove with a fair value (FV) of RM6.50 per share. We forecast Top Glove’s net profit at RM7.9bil, RM2.7bil and RM1.5bil for FY21–23F respectively. Our ASP assumptions for FY21–23 are US$82/1,000 pcs, US$30/1,000 pcs and US$25/1,000 pcs respectively. Our FV of RM6.50 is based on CY22 EPS over a PER of 23x.
  • Maintain our HOLD call on Hartalega with a FV of RM12.25 per share. We expect Hartalega to register net earnings of RM2.1bil, RM1.3bil and RM1.1bil for FY21-FY23 respectively. Our ASP assumptions for FY21–FY23 are US$40/1,000 pcs, US$33/1,000 pcs and US$32/1,000 pcs. Our FV of RM12.25 per share is based on its 5-year average PER of 35x over CY22EPS.
  • Maintain our HOLD call on Kossan with a FV of RM4.80 per share. We are forecasting net earnings of RM903.8mil, RM1.4bil and RM511.3mil for FY20–FY22 respectively based on ASP assumptions of US$31/1,000pcs, US$40/1,000 pcs and US$29/1,000 pcs. Our FV of RM4.80 per share is based on its 5-year average PER of 24x over FY22 EPS.

Source: AmInvest Research - 13 Jan 2021

Labels: TOPGLOV, KOSSAN, HARTA
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GillianTan78 AmInvest analyst Thong Pak Leng just woke up today?

The whole world know glove ASP will peak in 2021 and subsequently normalize at a higher ASP.

Maybe Thong Pak Leng's brain juice peaked in Dec 2020 thus unable to think like a normal human
13/01/2021 5:49 PM
LimitUp Attempt at Market manipulation
13/01/2021 8:41 PM
Tesla Vaccination does not require to ware Gloves! over liao...
14/01/2021 11:17 AM
Sales Glove got nothing to do with vaccine. Without vaccine already not enough of glove. Be more logic.
14/01/2021 2:35 PM
Water Fish Burger (水鱼哥哥) uncle, u MCO till sot pluk liao?
all around the world keep saying NOT ENOUGH medical equipments.

井底之蛙izzit? please do more re-search before writing an article.

Even JAPAN front line also Not enough gloves, they no choice, have to use non-medical gloves.

I will tell my children, study more, if not will work at AmInvest.
14/01/2021 4:57 PM

Glove Sector - Earnings will peak in 1H2021

Author: AmInvest   |  Publish date: Wed, 13 Jan 2021, 9:06 AM


Investment Highlights

  • Maintain NEUTRAL. We are maintaining our NEUTRAL view on the sector as valuations for glove companies under our coverage (Top Glove, Kossan and Hartalega) are already fully reflected in the companies’ earnings outlook. We reckon the average selling prices (ASP) will begin to ease after 1H2021 following the strong increase over the past 9 months, and are already priced in. Moreover, we are cutting our target PER by 10% across the board to take into account the risk of a down cycle in the sector as a result of successful rollouts of Covid-19 vaccines. While we believe that glove makers’ fundamentals remain steady for the next few years, they offer limited upside at their current share prices. Hence we advise investors to accumulate at lower levels.
  • Demand will remain stable post-Covid-19. The Malaysian Rubber Glove Manufacturers Association (Margma) expects demand for gloves to remain positive post-Covid-19. The main reason is the pandemic has raised much awareness on personal hygiene, thus resulting in a higher usage of gloves. In developing countries, the usage of gloves is increasing with a wider adoption of gloves usage from non-medical industries such as F&B, services, retail etc. Beyond the pandemic, we anticipate a structural change in the way gloves are used, forming a new normal where glove usage per capita will rise as hygiene measures become stricter. This is expected to apply not only in the healthcare sector but also across different industries like F&B. The glove consumption per capita in emerging markets such as India and China is still low at around 2–6 gloves as opposed to about 100–280 gloves for developed countries.
  • Capacity expansion. Glove companies will continue their expansion plan, adding about 120bil (+55%) pcs per annum by the end of 2022 (Exhibit 2). For Malaysian companies, Top Glove and Supermax will see the biggest expansion as they add 30bil and 22bil pcs respectively, followed by Hartalega (12bil) and Kossan (10bil). The rest of the additional capacity will be from Sri Trang (Thailand), Intco Medical and Blue Sail (both China), totalling about 56bil pcs per annum.
  • ASP to taper off in 1H2021. Although we hold the view that demand for gloves will remain stable post-Covid-19, we expect ASP to decline as there is no longer a rush for gloves compared to what happened at the beginning of the pandemic. Nonetheless, we expect ASP will stabilise at a higher level than the pre-pandemic level due to the broader usage of gloves. Moreover, capacity expansion from glove companies will be able to cope with the future demand.
  • Rising raw material prices. Rubber prices have been increasing over the past 12 months as protective glove demand surges due to Covid-19. At the same time, the price of butadiene (Exhibit 4), which is the key ingredient to produce nitrile, has also been on the rising trend over the past 6 months. Nonetheless, we believe glove makers will be able to pass on the price increase to buyers, thus keeping their margins safe.
  • Maintain our HOLD call on Top Glove with a fair value (FV) of RM6.50 per share. We forecast Top Glove’s net profit at RM2.9bil, RM2.7bil and RM1.5bil for FY21–23F respectively. Our ASP assumptions for FY21–23 are US$82/1,000 pcs, US$30/1,000 pcs and US$25/1,000 pcs respectively. Our FV of RM6.50 is based on CY22 EPS over a PER of 23x.
  • Maintain our HOLD call on Hartalega with a FV of RM12.25 per share. We expect Hartalega to register net earnings of RM2,1bil, RM1.3bil and RM1.1bil for FY21-FY23 respectively. Our ASP assumptions for FY21–FY23 are US$40/1,000 pcs, US$33/1,000 pcs and US$32/1,000 pcs. Our FV of RM12.25 per share is based on its 5-year average PER of 35x over CY22EPS.
  • Maintain our HOLD call on Kossan with a FV of RM4.80 per share. We are forecasting net earnings of RM903.8mil, RM1.4bil and RM511.3mil for FY20–FY22 respectively based on ASP assumptions of US$31/1,000pcs, US$40/1,000 pcs and US$29/1,000 pcs. Our FV of RM4.80 per share is based on its 5-year average PER of 24x over FY22 EPS.

Source: AmInvest Research - 13 Jan 2021

Labels: TOPGLOV, KOSSAN, HARTA
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Economics - Malaysia – Downward pressure remains on distributive sales

Author: AmInvest   |  Publish date: Wed, 13 Jan 2021, 9:03 AM


Distributive trade fell for the second month in a row, down 1.2% y/y in November – the fastest contraction since August versus -0.8% y/y in October, impacted by the selective restrictive measures taken to contain the spread of the virus.

Downward pressure on distributive trade and retail spending remains, especially with uncertainties on the pandemic virus spread. This will continue to weigh on both business confidence and consumer sentiment, clouded by concerns over the type of restrictive measures imposed to contain the virus spread.

  • Distributive trade contracted for the second month in a row, down 1.2% y/y in November – the fastest contraction since August versus -0.8% y/y in October due to the selective restrictive measures introduced to contain the spread of the virus. The poor showing was attributed to the contraction in retail sales (-2.3% y/y in November from -1.5% y/y in October) which more than offset the gains reported from wholesale trade (-0.7% y/y in November from -0.9% y/y in October), and motor vehicles sales (1.2% y/y in November from 2.2% y/y in October).
  • The downtrend in retail sales was a result of weaker consumer spending inflicted by the restrictive measures, poor job market and challenging sentiments issues.
  • Looking at the details of retail sales, it showed specialised stores falling by 4.9% y/y in November from -4.7% y/y in October, dragged by weaker automotive fuel sales (-14.7% y/y in Nov) due to lower mobility and fuel sales.
  • The non-specialized stores (provisions stores, mini market, convenience stores, supermarket, hypermarket, etc.) also slowed down to 2.3% y/y in November from 4.4% y/y in October partly due to base effect. However, spending remained positive in areas like stalls & market (7.2% y/y in Nov from 7.0% y/y) as well as the e-commerce space & direct selling (10.9% y/y from 8.3% y/y).
  • Downward pressure on distributive trade and retail spending remains, especially with uncertainties on the pandemic virus spread. This will continue to weigh on both business confidence and consumer sentiments, clouded by concerns over the type of restrictive measures imposed to contain the virus spread.

Source: AmInvest Research - 13 Jan 2021

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Stocks on Radar - Mi Technovation (5286)

Author: AmInvest   |  Publish date: Wed, 13 Jan 2021, 8:32 AM


Mi Technovation consolidated and is poised to reach the RM3.99 resistance level. With its RSI indicator in an uptrend, coupled with higher trading volume, there is a good chance it will break out and head towards the shortterm target price of RM4.13, followed by RM4.35. The downside support is marked at RM3.79. Traders are advised to exit on a breach to avoid further losses.

Trading Call: Buy on breakout RM3.99

Target: RM4.13, RM4.35 (time frame: 2-4 weeks)

Exit: RM3.79

Source: AmInvest Research - 13 Jan 2021

Labels: MI
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foo 《2021年财政预算案》带来的利好消息分析员均认为,政府没有如市场预料般向4大手套厂征收暴利税而是要求相关公司捐献合计4亿令吉供政府购买疫苗和医疗设备。政府今年将拨款10亿令吉推动国内高附加价值科技领域的研究和发展活动受惠的工业区有槟城峇都加湾、吉打居林科技园区内的航天和电子领域。基于政府拨款1亿5000万令吉支持中小企业迈向数码科技,大众投行分析员认为,阁代科技(GREATEC,0208,科技股)可从该措施获利,因阁代科技在上述两科技园区内均有厂房。维毅集团(ISTONE,0209,科技股)、MMS创投(MMSV,0113,科技股)、腾达科技(PENTA,7160,科技股)和伟特科技(V I T R O X,0097,科技股)这些自动化解决方案供应商会是受惠公司。
18/01/2021 10:13 AM


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