Investment Highlights

• We maintain HOLD with an unchanged fair value (FV) of RM1.27 on MyETF DJ Islamic 25 based on our FVs (for stocks under our coverage), and consensus FVs (for stocks not under our coverage). It is at a premium of 0.4% to its NAV of RM1.12 (Exhibit 3).

• Following its latest quarterly review, index provider S&P Dow Jones Indices has replaced Dagang NeXchange (DNeX) with V.S. Industry (VSI) in the Dow Jones Islamic Market Malaysia Titans 25 Index. This took effect after the close of trading on 18 March 2022. We are reflecting these changes in our revised valuation.

• We have a BUY call on VSI due to three reasons: (i) its ability to offer turnkey electronic manufacturing services solutions as a vertically integrated player; (ii) customer diversification efforts with opportunities arising from the US-China trade war diversion; and (iii) improving overseas operations with higher sales order from its Indonesian segment as well as improving cost rationalisation initiatives in China.

• The healthcare sector’s outlook is expected to improve in 2022 as inpatient occupancy rate should improve. As the Covid-19 situation improves, it should lead to higher confidence among healthcare consumers to seek treatment which have been delayed previously. For the glove sector, we maintain our neutral outlook as the lower earnings outlook for the next quarter is offset by higher sales volume, indicating that the bottom for ASP is near.

• We are positive on these key sectors – consumer goods and oil & gas. We believe consumer spending will be well supported by cash handouts during the pandemic and the recovery in the job market thereafter. Meanwhile, we believe oil prices will ride on the gradual recovery in global economy.

Source: AmInvest Research - 21 Mar 2022