By Say Cheong //
May 7, 2021
malaysia stock ideas

Our neighbour across the causeway has lots to offer in terms of raw materials, human capital and resources.

It is without a doubt a treasure trove as they have almost 6 times the number of people in Singapore. The sheer market size gives company an advantage to grow much faster when compared to Singapore.

Malaysia has its fair share of hidden gems on the Bursa Malaysia Exchange. We have uncovered 7 of these interesting stocks for you to take note in the month of May.

#1 Astro Malaysia Holdings Berhad

Public Investment bank has maintained its OUTPERFORM rating  on the stock with a target price of RM 1.16.

This is at the boosted by the future out look of the company.

” Astro is looking to introduce new over-the-top (OTT) streaming service partnerships in the near term, apart from the existing HBO Go, iQiYi and Astro Go, with an aim to cater for the diverse Malaysian market. This may help to mitigate the impact of the change in Disney’s business model.

In addition, we opine that the Home-Shopping segment will be one of the main drivers going forward, as the group is looking to leverage on the enlarged customer base via better product offerings.”

>> Read more about the company here.

#2 Axis REIT

Hong Leong Investment Bank has maintained its BUY rating with a target price of RM 2.54.

One major push is due to the stable results.

“Axis REIT’s 1QFY21 core net profit of RM31.9m (-0.8% QoQ, +6.7% YoY) were within both ours and consensus expectations. Dividend of 2.23 sen per unit was declared.

YoY improvement was mainly backed by new revenue contribution from newly acquired assets. Occupancy and gearing stood at 91% and 36% respectively.

We expect better FY21 driven by full year contribution from 5 acquired properties in FY20 as well as new acquired properties in the year. We increase our FY21-22 forecasts by 11-10% to reflect in newly acquired assets as well as introduce FY23 estimates.”

>> Read more about the company here.

#3 CIMB Bank

AM Investment bank has maintained its BUY rating on the company with a target price of RM 5.59.

The continued positive sentiments are a result of “Niaga reporting a stronger net profit of Rp996bil (+573.0%
QoQ) in 1Q21 attributed to higher operating income from stronger net interest income (NII) and non-interest
income (NOII). Also, provisions were lower QoQ.”

Moreover, another strong growth potential could be driven by new plans. “Niaga plans to transform its OCTO Mobile into a super app.

The app now features insurance and travel concierge services to increase stickiness of customers. A higher percentage of transactions has been carried out through OCTO Mobile. These included time deposit opening, FX transactions, trading in bonds and instalment payments.”

>> Read more about the company here.

#4 Pavilion REIT

AmInvestment Bank has maintained with a BUY rating on the stock with a target price of RM 1.75.

The positivity of the analysts as “Pavilion’s long-term outlook remains positive given its strategic assets which are located in the heart of the capital in Malaysia, and are poised to benefit from the growth in Malaysia’s economy post-pandemic.

We like PREIT as a recovery play as well as a yield play, with attractive dividend yields of more than 5% for FY21 and beyond amidst a low interest rate environment that is likely to be prolonged.”

>> Read more about the company here.

#5 Genting

Hong Leong Investment Bank has improved its rating to BUY and with its target price at RM 6.00.

The conviction of the analyst was because of  “Resorts World Las Vegas to open on 24 June 2021. RWLV is currently hiring employees and filling in its restaurant and shopping spaces as it prepares to open on 24 June 2021. Through a partnership with Hilton, RWLV will offer 3,500 guestrooms and suites from 3 premium Hilton brands, the largest multi-brand deal in Hilton’s history.”

“RWG expected to record an exponential recovery in FY22. We expect a significant YoY recovery for RWG in FY22 due to the timeline of vaccine rollouts and we are optimistic that Malaysia will achieve some form of normalcy in FY22.”

>> Read more about the company here.

#6 Westport Holdings

AM Investment bank has maintained its rating BUY on the company with a target price of RM 5.07.

The main driver of the sentiment is the growth prospects of the company.

“Looking beyond the pandemic, the outlook for the port sector in the region (Malaysia included) is resilient,
underpinned by global trade and investments in the manufacturing sector that generate tremendous inbound
(feedstock) and outbound (finished product) throughput for ports.

There have been significant relocations of the manufacturing base by multi-national companies out of China to the region due to the rising labour and land costs, exacerbated by the US-China trade war. Westports has charted a long-term expansion plan to capitalise on these.”

>> Read more about the company here.

#7 Greatech Technology Berhad

Public Investment Bank has maintained its OUTPERFORM rating on the company with a target price of RM 6.80.

Main driver of the sentiment is its strong orderbook.

“Greatech disclosed that its orderbook stood at RM293m, of which the EV battery segment makes
up 73% (c.RM214m), while photovoltaic (PV) and the other segment accounts for 25% (c.RM73m) and 2% (c.RM5.9m) respectively.

We understand that, for the PV segment, Greatech is currently waiting for order replenishments from First Solar, which should come about in the coming months and we estimate the contract value to be c.RM200m, of
which it has been incorporated in our FY21F forecasts.”

Moreover, “Greatech also did not rest on its laurels after securing its 4th EV client, as it is now pursuing 4 other potential clients in the EV space. We gather that two of the potential clients are battery cell manufacturers, while the other two are among the world’s largest car makers, located in Detroit.”

>> Read more about the company here.

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