NWP - The Empire Strikes Back
15Dec - NWP [Initiate Coverage]
Stock code: 5025 NWP
Key Investment Notes
1) Finding Direction
For the past year, NWP has been marred by internal management issues. The Group CEO was suspended in February amidst a board tussle. As a result, the company lacked clear leadership and direction.
2) IT Man
With the appointment of IT/Tech businessman Datuk Chu as new Executive Director in end September, things started to turn for the better. A slew of boardroom changes were subsequently announced, as well as changes in the audit and risk committee. Just like a country could not function with an ever-changing government, could this finally be the settlement that could steer NWP forward after many lacklustre years?
▪️ Week of 30Nov – 4Dec: As market grasps the positive developments in NWP, as well as the credentials of Datuk Chu in the IT/Tech business, NWP’s share price moved from 15sen Monday morning to close 17.5sen Friday.
3) Light of Hope
Datuk Seri Nelson Kee was reinstated as Group CEO 11December, Friday.
▪️ Week of 7Dec -11Dec: In the week preceding the return of Datuk Seri Nelson, NWP’s share price moved from 17.5sen Monday morning to close 24sen Friday. The price appreciation is in tandem with shareholders’ and market’s enthusiasm for better things to come to NWP.
4) Vision and Execution
Immediately after regaining leadership, Datuk Seri Nelson addressed the media over the weekend. He outlined the diversification initiatives that would drive the new growth phase of NWP including:
i) Property management, an expertise of DS Nelson by virtue of GS Realty, one of the largest and most successful real estate firms in Malaysia.
ii) Partnership with a “well-known food delivery service provider”.
▪️ Week of 14Dec – 18Dec: NWP opened Monday gap up at 25sen to touch a high of 28sen, before political sentiments dampen the overall bursa market. It softened to 24.5sen before closing strong at 26.5sen. Investors are clearly excited with the new leadership duo of Chu and Nelson, coupled with a transparent, realistic strategy to push NWP to new heights.
Recommendation:
Initiate coverage with immediate TP of 35 sen
While analysts are digesting DS Nelson’s new business plans and putting numbers into valuation models, we are of the opinion that market enthusiasm towards the potentially explosive tie-up with the “well-known food delivery service provider” is more than enough to drive the price to immediate TP of 35sen.
Best regards,
Alpha7 Research
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