September 6

[MY] 7 Interesting Stock Ideas [September 2021]

Malaysia had a lot of changes during the month of August. They had a new prime minister instated, COVID cases continue to notch all time high everyday, and lockdowns continue for some states.

Stocks on KLSE continue to trudge on and some stocks perform better than others due to the nature of the business.

Here are 7 stocks that you should take note for the month of September.

#1 IOI Properties Group

Hong Leong Investment bank has maintained its BUY rating on the stock with a target price of RM 1.79.

The positive sentiment of the company was bolstered by the group’s beating expectations.

“IOIPG’s FY21 core earnings of RM665.4m (-5.3% YoY) were above our expectation. The group chalked in a better performance in property development sales but this was offset by higher COGS from the low margin products.

Sales of RM2.3bn (+25% YoY) were achieved in FY21 as well as launches worth RM1.9bn. We increase our forecast by 5% and 8% in FY22-FY23 from higher contribution of property development and new recurring income from the new mall in China.”

>> Read more about the company here.

#2 Hibiscus Petroleum Berhad

Public Investment bank has maintained its outperform rating on the stock with a target price of RM 1.05.

The favourable ratings from the analyst was driven by the potential earnings uptrend of the company.

“Given the stability in oil price at above USD60/bbl coupled with the earnings consolidation from Repsol assets from 2HFY22, we believe the Group will register encouraging performances in the coming years. Earnings are expected to grow further by >100%.

Futher opportunities beyond 2023 would come from new infill wells i.e. Teal West, Eagle Tieback and Marigold. While Marigold may only achieve first oil in late 2023, the Teal West and Eagle discoveries will be a key focus for management as potential tieback candidates to the Anasuria FPSO in the near term.

Teal West contains approximately 7.1 mbbls of oil net to Anasuria, with implementation targeted in 2H2023”

>> Read more about the company here.

#3 DKSH Holdings (M) Berhad

Public Investment Bank has maintained its Outperform rating on the company with a target price of RM 5.00.

The company’s profit margin as well as Malaysia’s reopening are the factors behind its good stock valuation.

” We think that DKSH is well positioned to benefit from the recovery in consumer spending as the economy gradually reopens, aided by the rapid Covid-19 vaccination rollout.

In addition, DKSH remains committed to focus on operational efficiencies and working capital management to provide better support to its profit margins.

All in all, we are positive on DKSH’s outlook as consumer demand remains relatively stable even during lockdowns, given the inelastic demand for consumer staple goods.”

>> Read more about the company here.

#4 Dutch Lady Milk Industries

Kenaga Research has maintained its OUTPERFORM rating on the stock with a target price of RM 40.00.

The stable outlook and the stable demand for its products are the highlights of the company.

“Moving forward, the group should be able to preserve its sales base on the back of fresh product innovations and strategic pricing strategies, in tandem with the gradual reopening of the economy
with the successful roll-out of vaccines.

Outlook remains positive due to its brand presence and the dietary and nutritional value of milk.
However, in the immediate term, margins will still be challenged by: (i) still volatile commodity prices in 2021 compounded by unfavorable forex.

We are still positive on stable commodity prices in FY22, seeing the GDT price index has remained on a downtrend on a MoM basis with 6-month forward contracts looking more or less the same.

Given that its new manufacturing facility in Seremban is still a long way off and capex will be funded from internally generated funds, dividend payout could be crimped in the medium term. ”

>> Read more about the company here.

#5 UEM Edgenta

Hong Leong Investment Bank has maintained its Buy rating with its target price at RM 2.30.

The forward thinking management with expansion plans in place is one of the key driver of the company’s good valuation.

” Edgenta believes that HSS will continue to drive their post-pandemic recovery, as the group have accelerated regional expansion efforts as well as introducing new-to-market solutions beyond the traditional healthcare offerings.

Edgenta sees opportunity in new high growth markets such as Saudi Arabia. With regards to the Infrastructure Solutions division, profitability will be greatly reliant on Malaysia’s ability to keep Covid-19 cases under control and relax MCO restrictions, which would lead to more movement of people, and hence maintenance work on expressways”

>> Read more about the company here.

#6 ATA IMS

Am Investment Bank has maintained its BUY rating on the company with a target price of RM 3.34.

The favourable outlook of the company was the factor behind the company’s good rating.

“Looking ahead, we believe the group’s prospects remain positive as its main customer’s order forecasts have stayed strong while production activities for new customers (mostly smart home products and DIY tools) shall come online before the year is out.

ATA has plans to expand its factory floor space by 200K sq ft (equivalent to approximately 10% of its existing factory floor space) in anticipation of more orders.

Meanwhile, the group is striving to achieve full vaccination for its entire workforce within the next 4–6 weeks, enabling it to operate at full capacity. ”

>> Read more about the company here.

#7 Three-A Resources Berhad

Public Investment Bank has maintained its outperform rating on the company with a target price of RM 1.35.

Main driver of the sentiment is due to the management’s decision to increase investment in R&D and to bring down costs.

“Going forward, the group plans to mitigate the cost pressure by continuing with its automation plans to improve production plant efficiency and achieve savings in operational and
manpower cost.

In addition, 3A remains committed to invest in R&D initiatives to expand its product range to meet the constantly evolving customers’ requirements.”

>> Read more about the company here.

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Tags

ATA IMS, DKSH Holdings (M) Berhad, Dutch Lady Milk Industries, Hibiscus Petroleum Berhad, IOI Properties Group, KLSE, Three-A Resources Berhad, UEM Edgenta


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