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These are the stocks analysts favour for 2024

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Publish date: Fri, 16 Feb 2024, 09:28 AM

KUALA LUMPUR (Feb 16): Malaysian equities got off to a mixed start in 2024. Big- and mid-cap companies traded higher, led by a 5% gain in the KLCI to date, while the ACE Index fell 8%, dragged by poor sentiment following a recent margin call shock among penny stocks.

From a macro perspective, analysts pointed to opportunities coming out of currency and interest rate headwinds, which until recently diverted investor interest towards the US at the expense of regional markets.

Taking a look at the top stock picks of 2024 by analysts, The Edge compiled a list of companies with the most 'buy' calls relative to total analyst coverage, as well as the potential upside relative to the consensus target price on Bloomberg.

Fund managers and heads of research were also asked for their stock picks for the year.

Gamuda, TM, YTLP, Genting top big-cap picks

Among companies with a market capitalization above RM10 billion, conglomerate Gamuda Bhd tops the list with an overwhelming 20 'buy' calls out of 21 analysts. Analysts cite Gamuda's healthy overseas expansion progress, and their consensus TP of RM5.58 represents 8.3% upside against the stock's Feb 15 close of RM5.15. The counter has risen over 29.7% in the last year.

Gamuda is followed by Telekom Malaysia Bhd, which has 19 'buy' calls out of 22. It has a potential upside of 9.6% based on Friday’s RM5.86 close.

TM turned in a strong performance recently on better cost management, coupled with long-term prospects as a fibre infrastructure and cloud services provider. However, the telco's upcoming fourth quarter results, expected on Feb 28, will show the full extent of the impact of the latest regulatory pricing adjustments on its services.

Among those with the highest percentage of 'buy' calls, YTL Power International Bhd tops the list given the screaming 'buy' by all 11 analysts covering the stock, on sustained earnings expected from its Singapore operations, as well as data centre exposure and outlook for the wider renewable energy space.

The power player's share price has rallied by more than 434% in the last 12 months - 54% since the start of the year - to push past the consensus TP by over 2.6%. It traded at RM3.93 at press time. However, expect marginal upward TP revisions, analysts contacted by The Edge said.

Another notable mention is Genting Bhd. After a flat 2023, analysts have raised the annual earnings forecast for the group for 2023 to 2025, with more upside projected in tourism recovery in markets it operates in, such as Singapore and the US. Consensus TP suggests an upside of 20.2%, compared to its last close of RM4.88, which is down 4% from a year ago.

Other notable picks are Dialog Group Bhd (48% upside) - the stable dividend payer was deemed oversold following its removal from the KLCI last year - as well as Mr DIY Group M Bhd (42% upside) on optimism towards East Malaysia expansion and strong results of its private label strategy.

Mid-to-small cap: Property, O&G top list

The mid-cap space enjoyed a good run in 2023, with Bursa Malaysia’s Mid 70 Index up 12.3%, followed by the Small Cap Index - made up of companies in the Main Market excluding the top 100 by market capitalisation - which rose 9.6%.

For 2024, top picks among the companies with market cap between RM1 billion and RM10 billion based on 'buy' calls are Mah Sing Group Bhd due to healthy land banking and speedy turnover to sales; Sime Darby Property Bhd on better-than-expected earnings; and automotive group Bermaz Auto Bhd on strong financials and decent dividend yield forecasts of over 7% for the financial year ending April 2025 (FY2025) despite risks of a peaking automotive market after a strong 2023.

Across sectors, top picks include floating production storage offloading vessel (FPSO) operators Yinson Holdings Bhd and Bumi Armada Bhd; semiconductor player Pentamaster Corp Bhd and ViTrox Corp Bhd; as well as select retail REITs (Sunway REIT, Pavilion REIT, IGB REIT) and brewers on recovery play.

CTOS Digital Bhd also stood out owing to steady earnings following past regional acquisitions, tax exemption extension and position as proxy of rising credit ratings utilization.

Among small cap companies, notable top picks include terminal payment operator GHL Systems Bhd amid growing efforts in e-commerce payment, buy now-pay later scheme (BPNL), and international ventures; and Samaiden Group Bhd for its continuous wins in the solar space as well as its maiden mini hydro EPCC project announced last month.

Public space networked systems and related artificial intelligence provider ITMAX System Bhd (3 'buy' calls, consensus TP: RM2.65 against last close of RM2.11, 25.8% upside) hit a record-high unbilled order book of RM903.5 million following its recent contract win with Pasir Gudang City Council.

The company “looks set to penetrate the remaining 13 Johor city councils and replicate its success in other states, including Penang, Sabah and Selangor”, said Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng.

Apart from government contracts, ITMAX also secured a RM3.9 million contract from Malaysia Airports Holdings Bhd (MAHB) in 3Q2023 to supply and install aeronautical ground lighting control systems for six airports in Malaysia, said Malacca Securities head of research Loui Low Ley Yee, who “strongly believes” the company might win more jobs in the near future.

Aside from its successful mobile offshore production unit (MOPU) venture in the upstream O&G sector, Rakuten Trade’s Thong also likes T7 Global Bhd (3 'buy' calls, consensus TP: 57 sen against last close of 47 sen, 21% upside) for its positive performance in its baggage handling system (BHS) contract win, and exposure in the aerospace segment.

“The T7 Elise MOPU achieved 95% uptime in 3QFY2023, while the Nong Yao MOPU is expected to boost FY2024 bottomline by 16%.

“The non-energy division saw 550% year-on-year revenue growth and is anticipated for higher revenue from the KLIA BHS project in FY2024,” Thong noted, adding that there is also potential for an operations and maintenance (O&M) contract post-construction.

The prospects of AMMB Holdings Bhd (12 'buy' calls of 15 analysts, consensus TP: RM4.45 against last close of RM4.33, 2.7% upside) are brightened by its imminent tax credit in the coming quarters, said a local fund manager overseeing RM3 billion in assets under management.

“[This] is expected to improve the company’s common equity tier 1 (CET 1) ratio and pave the way for a potential higher dividend payout in the future,” he said.

AMMB has undemanding valuations, where its price-earnings ratio (PER) currently stands at 8.3 times versus its 10-year mean of 9.36 times, while its price-to-book value (PBV) currently stands at 0.77 times, the fund manager said, compared to industry average of 0.9 times.

Exposure to industrial building development is projected to see AME Elite (5 'buy' calls, consensus TP: RM1.99 against last close of RM1.79, 11% upside) leveraging on rising FDIs, said Apex Securities head of research Kenneth Leong.

“[The stock is] supported by unbilled sales of RM203.9 million and outstanding construction and engineering order book of RM259.0 million. New industrial park measuring 176-acre located at Penang that carries [an] estimated GDV of RM1.5 billion will spark new avenue for revenue growth driver, said Leong, who has a target price of RM1.80.

Apex Securities’ Leong also likes Lagenda Properties Bhd (2 'buy' calls, TP: RM1.61 against last close of RM1.47, 9.3% upside) due to its strong exposure in the affordable housing segment which is strongly aligned with the mass market demand.

“Demand for affordable housing, particularly units priced below RM500,000, is projected to remain resilient and is supported by various government initiatives,” he said, adding that Lagenda is supported by unbilled sales of RM855 million, providing earnings visibility over the next 12 months.

Malacca Securities’ Low also likes Johor property player KSL Holdings Bhd. A proxy to the hype enlivening Malaysia’s southern state of Johor - spurred by the various mega infrastructure projects slated and mulled by the government - it may emerge as a theme for 2024.

KSL, which has three decades of experience in the southern state, saw normalised 9MFY2023 earnings of RM285 million which was stronger than the full-year performance in FY2017-FY2019 period, Low said.

KSL shares have gained 74% in the last one year, and 33% in the first trading week of 2024 alone. The counter last traded at RM1.48, with a trailing price-to-earnings ratio of 4.5 times and price-to-book value of 0.4 times - giving it a market capitalisation of RM1.5 billion.

 

https://www.theedgemarkets.com/node/701095

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Be the first to like this. Showing 7 of 7 comments

Income

Can’t be trusted

1 month ago

nicholas99

maybe few can.. less than 30%

1 month ago

calvintaneng

Income

Can’t be trusted

7 hours ago

Better do your own self Study

And OPEN YOUR EYES WIDE WIDE

AND SEE

Income

TheContrarian

Yesterday took Mr Calvintaneng advice and bought Cepat at 71 sen, now Cepat 74 sen. Thank you.

8 hours ago

Very smart move

But also get some TSH and hold till Rm2.00
Then Rm3 to Rm5!

See

How nice to know TSH RESOURCES got 94,700 Acres Lands in IKN NUSANTARA

Book Value about Rm5,000 per acre (Current market value as high as Rm1 Million per acre

See

https://www.youtube.com/watch?v=P27JpoUUUsw

Investing like this now we know why Warren Buffet said, "I know I will be rich"

0 seconds ago

1 month ago

stockraider

This useless 3iii has been targeting sifu calvin tan with his bias comment for a long time loh!
3iii should look into the mirror and reflect how are the performance of his top holding Dlady & Nestle since 2017, b4 making unfair & unjustify comment at sifu calvin loh!

Btw sifu calvin have make many many successful call buy & alot of people benefited from his pick including raider loh!

The recent sifu calvin calls on high exposure on plantations are very strategic & defensive and it is meant to protect investors from simply buying into rubbish & overvalue stocks mah!

Buying into plantation co.....which have big exposure to finite land at very cheap price is a very intelligent way for long term fundamental investors loh!

Some of great plantation call by sifu calvin & already proven bringing in very good return todate are bplant & jtiasa mah!

I believe calvin tan huge call on TSH will start to bring huge return loh!
General Raider has followed calvin & bought into TSH at Rm 1.01 and Cepat at Rm 0.71, and General raider is very confident good tidings are coming loh!

Do not listen to the naysayers like 3iii, See and Mike as there serve no purpose in your successful money making scheme mah!

1 month ago

Balian de Ibelin

Raider
You went bankrupt and Calvin helped you.
Each and every person inside i3 forums knows this.

Thats why you helped Calvin in the NetX dodgy deal.
Now you again help Calvin, defending against 3iii.

Its time for you to stop hammering in those coffin nails into Calvin's coffin.
Calvin will be buried without your help.
You help Calvin = Means Calvin is guilty, everyone knows this.

1 month ago

stockraider

General Raider & Calvin Tan are Great Allies bcos we share many common success criteria mah!

Btw Calvin Tan has knack of picking great stocks, thus in order to be successful u should careful go thru Calvin Usual Great Pick & pick some to follow mah!

1 month ago

calvintaneng

Fantastic Speed of Progress in Ikn Nusantara!

This Video on Govt Quarter Interiors posted in Jan 2024

6 Months Ahead of Time for Launching of Ikn Nusantara in July 2024

The Amazing Thing is this

Land Prices in IKN Nusantara now over Rm1 Millions Per Acre
But TSH RESOURCES 94,700 Acres Land there still Valued at Rm5,000 per acre book value

More Amazing is This

No Research House, IB Bankers or GURUs highlight the DEEP DEEP VALUE OF TSH RESOURSE

Instead people chased UEMS with High Debt of Over RM4 BILLIONS!

And TSH Far Better! Almost Debt Free Now!

See

https://www.youtube.com/watch?v=DGfhV7mxhpM
Time to buy before others know
SO TSH WILL BE A GREAT SUPERSTOCK!

1 month ago

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