July 16

[MY] 7 Interesting Stock Ideas [July 2021]

COVID cases in Malaysia have hit all time high and there are no signs of abating.

This throws a spanner to whether Malaysia’s economy can recover in the near term despite the continous pushing out of vaccinations.

That said, all is not doom and gloom.

In fact, analysts have highlighted 7 stocks which still have room to run as shown below:

#1 Sunway

Hong Leong Investment bank has maintained its BUY rating on the stock with a target price of RM 2.58.

The positive sentiment is mainly driven by the arrival of a strong investor.

“Partnership with GIC. GIC Private Limited (GIC), via Greenwood Capital Pte Ltd (Greenwood) will invest RM750m in Sunway Healthcare for a 16% stake via share subscription agreement.

The investment entails subscription by GIC of 8.24% ordinary shares in Sunway Healthcare, ICPS convertible to 7.76% equity interest and DCPS convertible into 1 Sunway Healthcare share, which will collectively give GIC a 16.0% equity interest in Sunway Healthcare on a fully converted basis.

The price tag of RM750m implies an equity value of RM4.7bn for Sunway Healthcare. ”

>> Read more about the company here.

#2 Astro Holdings

Hong Leong Investment Bank has maintained its BUY rating with a target price of RM 1.41.

The positive sentiment is driven by the potential arrival of Netflix.

“Astro will be bringing Netflix’s streaming services to Astro’s platform. While no further details on the partnership was disclosed, we believe the partnership will likely benefit both Netflix and Astro.

Netflix would be able to capitalize on Astro’s large customer base to penetrate in to the Malaysian market; while for Astro, this will further strengthen its position as the leading aggregator for streaming services and possibly uplift ARPU”

>> Read more about the company here.

#3 Eco World Development Berhad

Public Investment bank has maintained its Outperform rating on the company with a target price of RM 0.98.

Two main factors drove the analyst’s favourable rating.

“2QFY21 pre-sales up 87% QoQ to RM1.32bn. ECW attributed the good pre-sales to strong take-ups on all the new projects and products launched in 2QFY21, namely Eco Botanic 2 in Iskandar Malaysia, Co Home at Eco Horizon and Eco Grandeur and the second phase of ErgoHomes & Garden Homes at Eco Forest. ”

” Unbilled sales healthy at RM4.21bn. Group’s earnings visibility remain good with future billings from Malaysian projects alone rising substantially from RM2.99bn in 1QFY21 to RM3.77bn in 2QFY21.”

>> Read more about the company here.

#4 Gamuda Bhd

Kenaga has maintained its OUTPERFORM rating on the stock with a target price of RM 3.90.

The positivity of the analysts is derived from the good outlook.

“As of 2QFY21, outstanding order-book stood at RM4.9b, mainly comprising KVMRT2 (RM3.0b) which would continue to drive construction earnings till early FY22.

Meanwhile, its order-book is poised to be bumped up by RM5b (from PSR land reclamation works) pending the finalization of JV agreement between Penang state government and SRS. ”

>> Read more about the company here.

#5 Focus Point

Hong Leong Investment Bank has maintained its Outperform rating with its target price at RM 1.05.

The conviction of the analyst was because the analyst ” remain upbeat about the group’s longer-term prospects. We are comforted to know that optical sales in community malls are still doing pretty decent that help to cushion the sales decline in tourist-centric malls.

CK2 is currently running at c.30% utilisation rate (better than previous guidance of 30% by year end) and we expect the utilisation rate to improve to 70% based on increased orders from existing customers as well as new clients coming on board. The group is currently in advance discussion with a convenience chain store in Singapore and Tea customer.”

>> Read more about the company here.

#6 GHL Systems

Kenaga has maintained its OUTPERFORM rating on the company with a target price of RM 2.30.

The main driver of the sentiment is the exciting growth outlook of the company.

“GHL Systems (GHL) as a payment processor is poised for exciting growth due the urgent need for digital payment adoption among merchants which are still highly reliant on cash-based transactions.

GHL has taken the initiative to act as a third-party acquirer to cater to the underserved small to micro companies which in turn accelerates rollout and expands its addressable market beyond top-tier companies.

With the ASEAN Payment Connectivity initiative in place, GHL stands to benefit greatly when borders reopen as it has more than 383,600 touchpoints across ASEAN in place to facilitate cross-border transactions”

>> Read more about the company here.

#7 Magni-tech Industries Berhad

Public Investment Bank has upgraded to Buy rating on the company with a target price of RM 3.00.

Main driver of the sentiment is its strong performance and outlook.

“Magni-tech (Magni) reported a headline net profit growth of 4.4% YoY to RM127.2m for FY21, thanks to the higher sales in both garment and packaging segment. Stripping out the unrealised one-off disposal gain and forex loss, Magni’s core net profit stood at RM121.5m. The results were inline with our estimates, accounting for 101% of our forecast.

Moving forward, we remain upbeat on Magni’s long term outlook, driven by the growing awareness on healthcare favouring a more active lifestyle as well as the revival in major sporting events.”

>> Read more about the company here.

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Tags

astro, Eco World Development Berhad, focus point, Gamuda Bhd, GHL Systems, KLSE, Magni-tech Industries Berhad, malaysia stock ideas, malaysia stocks, Sunway


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