#4 ELK-Desa Resources Bhd
Malacca Securities has initiated coverage
on the stock with a buy rating and a target price of RM 1.52.
The strong position and the strong growth of the company are main reasons behind the rating.
"Reputable hire purchase financier in niche market. We like ELK’s position as (i) a prudent hire purchase financier focused on the niche used car market, (ii) it has more than 17 years’ experience in the competitive industry and (iii) its extensive dealer network comprised of more than 1,000 dealers.
Meanwhile, a report by Ken Research suggested that the Malaysian used cars market is anticipated to witness a CAGR of 2.1% during 2020-2025 in terms of number of used cars sold.
Strong growth in hire purchase receivables. ELK registered a CAGR of 11.5% on hire purchase receivables in FY17-21 with a healthy asset quality.
Non-performing loan (NPL) ratio has been declining over the past years and became on par with the financial institution in FY19. The NPL ratio has declined in 1QFY22 after a spike in FY20-21 due to Covid-19 pandemic. "
>> Read more about the company here.
#5 Inari Amerton Bhd
Rakuten Research has maintained
its Buy rating with its target price at RM 4.80.
New partnership in China that will maximise the usage of its plant in China drives the sentiment of the analyst.
" We are positive on the MoU with China Fortune-Tech Capital (a VC firm incorporated by SMIC) to set up a JV in China, offering OSAT related businesses.
The new JV will utilise the existing facilities of Inari’s wholly-owned subsidiary,
Amertron Technology (Kunshan), to accelerate the qualification process for new customers before moving into a new plant when the need arises.
Such a move is in tandem with Inari’s goal to broaden its revenue stream and ride on China’s ambitious plan to achieve self-sufficiency (currently 16% vs its 70% target) in the semiconductor industry."
>> Read more about the company here.
#6 AXIS Reit
Kenaga Research has
maintained its OUTPERFORM rating on the company with a target price of RM 2.15.
The main driver of the sentiment is the stable outlook of the company.
"Outlook. FY21 is expected to see minimal leases expiring at 18% of portfolio NLA, of which the Group has already secured renewals for 83% of these leases (vs. 32% in 4QFY20) on positive reversions, while
FY22 will see 21% of leases up for expiry. In the near term, the Group is actively eyeing industrial assets worth a total of RM135m, focusing on Grade A logistics located in Selangor, Penang and Johor and will
continue to target acquisitions with net yield of >6%."
>> Read more about the company here.
#7 IGB Bhd
Public Investment Bank has
maintained its outperform rating on the company with a target price of RM 2.70.
Timely exit of its assets brought well needed profits and cash into the company, which provided the impetus for the good rating on the stock.
"Verokey and Tower Ray each hold a 50% stake in Black Pearl, which is the owner of a freehold title to a land known as 18 Blackfriars Road, SE1 in London — a property asset initially earmarked for a mixed-development.
The land in London was initially purchased for about £122m in 2014. Project launch was deferred initially due to the change of design to meet authorities’ requirements. In 2018, it submitted planning application to the Greater London Authority to build six buildings ranging from 5 to 53-storeys each on the site that measures 0.80ha in total.
This would have included an office space, a 548-room hotel, 288 residential units, a flexible retail component, a restaurant, a music venue, and car parks, among others, which was again delayed by the uncertainties of Brexit and then the Covid-19 pandemic.
Subsequently, the JV signed a non-binding heads of terms agreement with Hero Inc Ltd, Staycity Ltd and BSW Land and Property Ltd, who wanted to buy their entire stakes in Black Pearl for £235m but the deal subsequently lapsed. Albeit the latest deal is c.11% lower, we believe it is fair given current market conditions."
>> Read more about the company here.
