ATA IMS: Fairly valued with positive prospects factored in Hold

We downgrade our BUY recommendation on ATA IMS (ATA) to HOLD with unchanged forecasts and fair value of RM1.72/share, pegged to a CY19F PE of 13x, following the recent run-up in its share price. Our fair value represents a 6% upside to the current price.

We believe that ATA’s positive earnings prospects have been factored in at the current price. The group’s positive prospects stem from: 1) it being a prime proxy to its key customer’s continuous innovation and robust growth prospects, 2) its position as the largest supplier of filters for its key customer globally, commanding a formidable market share of 80-85%; and 3) its PAT is expected to grow at a stunning 3-year CAGR of 24% for FY18-FY21F, underpinned by higher box-build orders for new products and a margin expansion due to better product mix.

Others:

LPI Capital: Cumulative earnings muted despite better 3Q results Hold

Plantation Sector: Inventory up 1.4% MoM in September Neutral

NEWS HIGHLIGHTS

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Property Sector: Affordable homes pipeline expands

Leisure & Hospitality Sector: Owner of Escape theme park in Penang heads for Singapore IPO

Plastrade Technology: To diversify into ICT via acquisition

Source: AmInvest Research - 11 Oct 2018