2024 Portfolio Review (Bursa Version)

meriam_api

Publish date: Sun, 18 Aug 2024, 07:08 PM

With the “roller coaster” on Bursa Malaysia wiping out weak holders in the stock market, it is now time to review and restructure our portfolio, preparing for the final quarter of 2024, and 2025 ahead.

Here’s my top 3 stock picks after the valuation readjustment happened this month.

SIMEPROP (5288)

One of the best property developers in town, Sime Darby Property registered their best profit since the 2017 split from 1 Berhad company to 3 Berhad companies.

In this quarter, Sime Darby Property had RM978.7 million in revenue compared to last year, which is a significant 42.8% increase, where PBT hits RM180.8 million, a 84.6% growth on YoY basis.

The strong financial performance is largely attributed to the property development segment, including the well sought after Serenia City with starting price tag of RM580,000, Elmina Green 7 with price tag of over a million (who says Malaysians shy away from properties?), and The Eight.

It is noteworthy that non-landed properties, such as Hype Residences, TRiARA Residence and Serasi Residences (1 & 2) also performed strongly for Sime Darby Property.

Looking ahead, with The Ophera near KLGCC contributing to Sime Darby Property, this stock is likely to perform very well in the near future.

EFRAME (0227)

Besides Sime Darby Property, we can easily identify the few other property developers in Malaysia that are doing exceptionally well too. This leads to (i) better orderbook given to construction players, and (ii) better demand for construction materials.

Speaking of construction material, metal is an extremely price sensitive market, with no clear winners in the industry, where cement on the other hand, is controlled by massive conglomerates like YTL, there is no space for value creation.

On Econframe, the largest aluminium door frame manufacturer in Malaysia, things are a little bit different. Due to the uniqueness of their products (i.e. different shapes and weights for different floor levels or layouts), Econframe is able to maintain the market share of over 60% in Malaysia.

Recently, the company also acquired another aluminium glass frame manufacturer and facade specialist called Lee & Yong Aluminium S/B to enhance their products portfolio.

In terms of financial performance, the company suffered one-off expenses in their FY24 Q3 results, leading to a selloff in the shares. Which has given me the opportunity to collect at a low of RM0.60 level.

With a wider product portfolio range and stronger demand for products from local property developers, this company is really set to perform in Q4 2024 and 2025.

SUNREIT (5176)

On a more defensive and yield accretive manner, Sunway REIT has always been my favourite with their vast diversified portfolio of assets in office, retail, medical and hotel segment.

In FY24 Q2, Sunway REIT achieved a total revenue of RM175.6 million, with NPI of RM129.3 million, a 11.3% growth compared to a year before, still a good growth given the nature of the business as a REIT.

Most importantly, the basic EPS of the REIT is 2.28 sen on realised basis (1.93 sen in unrealised EPS), and they are giving out a generous dividend of 2.28 sen per share. Cumulatively, they had paid 4.66 sen in total for FY24.

The assets of the REIT are very much well managed, and they are acquiring even more assets. In April 2024, Sunway REIT decided to acquire 6 Sunway REIT hypermarkets for a cash consideration of RM520.0 million, these are under triple net leases agreement with average remaining lease term of 5 to 10 years.

All in all, Sunway REIT is managing their assets well and is progressively growing with dividends, all these 3 stocks are definitely my favourite until something unforeseen happens.

Until we meet again.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial or investment advice. The views and opinions expressed are based on the author’s analysis and should not be considered as recommendations for any particular investment or strategy. Readers are advised to conduct their own research and consult with a qualified financial advisor before making any investment decisions. The author and publisher are not responsible for any losses or damages that may arise from reliance on this information.

SIMEPROP (5288)EFRAME (0227)SUNREIT (5176)

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