Mirzan Mahathir making waves with Betamek, eyes EV market
https://www.freemalaysiatoday.com/category/highlight/2023/02/17/mirzan-mahathir-making-waves-with-betamek-eyes-ev-market/

TP 0.33 by Kenanga on 17/2/2023

Vestland wins contracts totalling RM200mil
https://www.thestar.com.my/business/business-news/2023/02/16/vestland-wins-contracts-totalling-rm200mil

Farm Fresh’s proposed buy of Inside Scoop earnings-accretive, synergistic, say analysts
https://www.theedgemarkets.com/node/655462

Turkey’s Textile and Garment Industry is in Crisis
https://sourcingjournal.com/topics/sourcing/turkey-syria-earthquakes-textile-mills-garment-factories-amazon-inditex-calik-bossa-416389/

Infomina Berhad

Securing a place in the heart of the tiger
■ Infomina announced today that it has secured a US$3.3m (RM14.4m)
contract from Maybank Indonesia for services under its renewal segment.
■ We estimate that Infomina currently has an orderbook of RM400m across
FY23-25F and a tenderbook of above RM550m.
■ Infomina remains a key proxy to ride on rising demand for mainframe and IT
transformation services in Asia. Reiterate Add.

Wins a RM14.4m contract from Maybank Indonesia
● In a Bursa announcement today, Infomina announced that it has obtained a letter of
confirmation to provide a contract worth US$3.3m (RM14.4m) from Maybank Indonesia.
This is to provide technology applications and infrastructure operations, maintenance
and support services over a five-year tenure (from 30 Nov 2022 to 27 Nov 2027).

Positive on this contract win; opens doors of opportunities
● We view this contract positively, as this is Infomina’s maiden contract in Indonesia. We
believe that this is the testament to Infomina’s ability in the mainframe and IT
transformation space and a strong demonstration of the close working ties of Infomina
and Broadcom, especially in its partner regions (Malaysia, Singapore, Thailand,
Indonesia, the Philippines, China, Hong Kong and Taiwan).
● In our view, this is also another feather in Infomina’s cap (in terms of reputable clientele),
given the profile of Maybank as a leading banking group in Southeast Asia. We also
believe that it would further strengthen opportunities for Infomina to obtain more
contracts from Maybank, which has operations across various countries.

Expecting more contract wins to add to its RM400m orderbook
● In terms of earnings contribution, this RM14.4m first new contract has already been
accounted for in our forecast of RM275m contract wins in FY23-25F. We estimate that
Infomina’s current orderbook stands at above RM400m (as at end-Jan 23) for the next
three years.
● We gather from Infomina that it is still targeting to obtain more contracts from local and
overseas customers in the next six months (estimated to be another RM100m-150m for
the next five years). We estimate that Infomina’s tenderbook currently stands above
RM550m; we expect it to further grow as Infomina’s existing and potential customers
expand their businesses in the IT transformation and mainframe space.

Reiterate Add; TP unchanged at RM1.70 (25x CY24F P/E)
● No changes to our FY23-25F EPS estimates as we had earlier inputted RM275m
contract wins for the next three years into our forecast. We maintain our Add call, with a
TP of RM1.70, pegged to 25x CY24F P/E, a 29.5% premium to the weighted average
CY23F P/E of its local peers in the IT space (19.3x). We continue to like Infomina for: i)
its unique exposure to rising demand for mainframe and related-businesses, ii) its
regional position as sole appointed Value-Added Distributor in Asia Pacific for
Broadcom’s mainframe software, and iii) its robust earnings growth profile (3-year EPS
CAGR of 41.6% vs. peers’ weighted average of 16.2%).
● Re-rating catalysts: robust EPS growth and more contract wins. Downside risks: nonrenewal of Tier 1 VAD status with Broadcom, a sharp dip in orderbook value, and lowerthan-expected margins.

CgsCimb Feb 15, 2023

Infomina bags contract worth US$3.3 mil from Bank Maybank Indonesia. Yee Chee Meng, managing director of Infomina in a press statement said the contract adds to the company's outstanding orderbook which has increased to over RM500 million.
http://www.theedgemarkets.com/node/655381#.Y-zU8mITFXk.telegram

February 13, 2023

Berjaya Food (BFD MK)

2QFY23: Dividend surprise

Maintain BUY with unchanged MYR1.50 TP
BFD’s 2QFY23 earnings were within our/consensus expectations. We
expect earnings to be stable in sequential quarters owing to the group’s
resilient product demand and new store expansion. Our earnings estimates
are unchanged but we lift FY23E-FY25E DPS estimates to 5sen p.a. (from
2sen p.a.), in-line with its higher payout in 2QFY23. Rolling forward
valuation to FY24E, our TP remains unchanged at MYR1.50 based on an
updated mean PER of 19x (vs. 20x previously).

Results in-line
2QFY23 core net profit of MYR33m (-21% YoY, -3% QoQ) brought 1HFY23
core net profit to MYR67m (+25% YoY). The latter accounted for 49% of
both our and consensus FY23E. Positively, a second interim DPS of 2sen
was declared, bringing 1HFY23 DPS to 2.5sen (1HFY22: 0.4sen), which was
above our FY23 DPS estimates of 2sen.

Revenue growth driven by new store openings
2QFY23 revenue grew 8% YoY predominantly due to the contribution from
new stores whilst BStarbucks SSSG remained flat YoY. EBIT however fell
12% YoY (EBIT margin: -4.7 ppts YoY) given higher costs from raw materials
(milk) and labour. On a QoQ basis, higher sales during the Christmas and
school holiday period led to a revenue growth of 4% QoQ. EBIT also grew
7% QoQ (EBIT margin: +0.5ppt) largely due to a MYR1 product price
adjustment made to its permanent beverage menu at the beginning of Nov
2022 and the strengthening of MYR/USD currency. The total count for
BStarbucks and Kenny Rogers Malaysia (KRR Msia) were 373 (+30 stores YoY,
+10 stores QoQ) and 70 (+1 store YoY, +2 stores QoQ) respectively.

Raised FY23E-FY25E DPS estimates
Our earnings estimates are maintained but we raise FY23E-FY25E DPS
estimates to 5sen p.a. (from 2sen p.a. previously). Sequential quarters are
expected to be stable with resilient sales demand boosted by intermittent
months of festive sales (CNY, Aidilfitri) in 3Q and 4QFY. Internal operating
costs are also being closely monitored in order to defend margins against
further operating cost increases in FY23. Nevertheless, our model has
imputed for FY23 EBIT margins to ease by 2 ppts YoY.

Maybank Investment Bank

Malaysia Top Dairy Farm Company Farm Fresh Berhad annouces F&B expansion under Jom Cha by farm fresh brand
https://www.thesundaily.my/home/malaysia-top-dairy-farm-company-farm-fresh-berhad-annouces-fb-expansion-under-jom-cha-by-farm-fresh-brand-ID10642468

Farm Fresh to acquire 65% stake in The Inside Scoop for RM83.9m
https://www.theedgemarkets.com/node/655404

MyEG’s Zetrix partners Uni Malaya and CAICT in G2G programme between Malaysia-China
https://www.theedgemarkets.com/node/655197

Perodua launches 2023 Axia, 20,100 units booked
https://www.nst.com.my/business/2023/02/879638/perodua-launches-2023-axia-20100-units-booked

Betamek bags six-year supply contract for Perodua's new car model
https://www.thestar.com.my/business/business-news/2023/02/14/betamek-bags-six-year-supply-contract-for-perodua039s-new-car-model

The recent rebound in China economic activity was encouraging. There were 36.8 million daily passenger trips made in seasonal rush to hometowns, which was 50% above last year's levels. Domestic tourism grew over 23.1% last year during the holidays, and retail sales increased 6.8% year on year - The Edge Malaysia Feb 13, 2023

Berjaya Food (BFD MK)
Onwards and upwards

Maintain BUY with unchanged TP of MYR1.50
BFD is navigating through heavier cost pressures in FY23 with internal cost
efficiencies and product price adjustments at BStarbucks. With this, FY23
group operating margins may ease YoY but strong sales momentum, driven
by resilient demand, should keep BFD’s earnings on its positive trajectory
in the near-term. Our earnings estimates, TP of MYR1.50 (20x FY23E PER,
about mean) and BUY call are maintained.

Strong demand continues
Based on channel checks, BStarbucks demand in 2QFY23 has been tracking
internal expectations with the Dec quarter being a seasonally strong
earnings contributor driven by festive sales and high store footfall. At
present, c.75% of revenue comes from in-store sales while delivery and
drive-thru window sales account for c.12% and c.13% respectively.

Mitigating cost pressures with price adjustments
The group is facing additional cost pressures arising from higher raw
material costs (milk) and unfavourable USD/MYR currency exchange (c.50%
of raw materials are purchased in USD). Note that BFD’s milk costs are in
MYR. To mitigate this, BFD has raised product prices for all its beverage
items in BStarbucks by MYR1/item (effective Nov 2022) which translates
to a 5%-10% increase in permanent beverage product ASPs. On average,
beverage sales attributed to c.67% of BStarbucks revenue.

No changes to earnings estimates
BFD’s outlook is positive based on its resilient product demand and
unhindered ability to grow its store network amid weak consumer
sentiment. That said, we believe that its recent price adjustments will
only partially buffer cost increases from raw materials and the stronger
USD currency as BFD tries to strike a balance between maintaining
consumer affordability and defending group operating margins. Our model
has assumed for higher costs to weaken FY23 EBIT margins by 2ppts YoY.

Maybank Investment Bank
December 13, 2022

Perodua January sales up 43.5% year-on-year
https://www.thestar.com.my/business/business-news/2023/02/08/perodua-january-sales-up-435-year-on-year

Exciting deals at Sunway Theme Parks Mega Roadshow
https://www.thestar.com.my/business/business-news/2023/02/05/exciting-deals-at-sunway-theme-parks-mega-roadshow

SDS Group Rises To The Occasion
https://www.businesstoday.com.my/2023/01/28/sds-group-rises-to-the-occasion/

Perodua aims for maximum production, sales in 2023
https://www.thestar.com.my/business/business-news/2023/01/31/perodua-aims-for-maximum-production-sales-in-2023

Theme park, daily company saddle up for Wild West fun
https://www.thestar.com.my/metro/metro-news/2022/12/09/theme-park-dairy-company-saddle-up-for-wild-west-fun

Sunway Group's Sunway Lagoon Resort, Selangor, in December unveiled its Wild Wild West-themed night park. Developed jointly with daily manufacturer Farm Fresh, the attraction features a mini cow barn - The Edge Malaysia January 30, 2023
https://www.klook.com/en-MY/blog/sunway-lagoon-night-park/

Rubber market ends with SMR 20 at highest level since November 2022
https://www.nst.com.my/business/2023/01/874095/rubber-market-ends-smr-20-highest-level-november-2022

Malaysia’s 2022 TIV hits record high, surpasses 2015
https://www.thesundaily.my/business/malaysia-s-2022-tiv-hits-record-high-surpasses-2015-LA10547950

Anwar Announces RM1 Billion To Upgrade Sarawak, Sabah Border Infrastructure
https://www.businesstoday.com.my/2023/01/20/anwar-announces-rm1-billion-to-upgrade-sarawak-sabah-border-infrastructure/

Berjaya Food to set up five more Paris Baguette after maiden Pavilion KL opening
https://www.nst.com.my/business/2023/01/871444/berjaya-food-set-five-more-paris-baguette-after-maiden-pavilion-kl-opening

Farm Fresh to open Jom Cha outlet at AEON Big's Wangsa Maju
https://www.nst.com.my/business/2023/01/870617/farm-fresh-open-jom-cha-outlet-aeon-bigs-wangsa-maju

Wellspire Factory Visit & Business Operations

https://www.youtube.com/watch?v=7RyNVzePeMU

QES & Focusp already transferred from ACE to the Main Market. Coming soon be Sds & Scomnet.

Infomina likely to secure RM100mil-RM150mil new IT contracts
https://www.nst.com.my/business/2023/01/867694/infomina-likely-secure-rm100mil-rm150mil-new-it-contracts

Perodua hits record sales of 282,019 units in 2022
https://www.thestar.com.my/business/business-news/2023/01/05/perodua-hits-record-sales-of-282019-units-in-2022

China consumer confidence highest in the world
https://www.thestar.com.my/business/business-news/2022/12/28/china-consumer-confidence-highest-in-the-world

Cnergenz

Expanding Its Range Of Solutions Offerings

 MYR1.09 FV based on 22x FY23F P/E. Cnergenz is riding on its proven
track record, expansion of multinational corporation (MNC) manufacturers
and growing surface mount technology (SMT) demand by electronics
manufacturing services (EMS) players. This, on top of it being in a sweet
spot of the US-China trade war and its effort in providing new innovative
solutions in the next two financial years, lead us to project a 3-year earnings
CAGR of 37.9% for the stock. We see it as a proxy to MNC manufacturers
with its expansion plans.

 Represents the top equipment brands. The group has established long
business relationships with about 54 suppliers comprising reputable
international brand owners and manufacturers of machinery, equipment
and tools of particular SMT processes used for the electronics and
semiconductor (E&S) industries. Its proven track record in meeting the
stringent selection and quality requirements set by its customers makes its
solutions greatly in demand by many EMS providers.

 Beneficiary of US-China trade diversion. Vietnam has proven to be the
biggest winner of the US-China trade war in the past years, followed by
Malaysia and other South-East Asian countries (US Census Bureau, China
General Administration of Customs and Nomura). Cnergenz should benefit
from the trade diversion as its distribution territories including Vietnam,
Thailand, and Malaysia – Penang, Klang Valley and Kedah. The EMS
market is expected to witness significant growth from the rising demand for
electric vehicles – management is targeting it next from its new solutions.

 Moving up the manufacturing value chain. Management is in talks with
a few new distributors (for different manufacturing process) to secure
distributorship rights in FY23. In FY24, the group’s new facility is expected
to commence operations, expanding its smart factory solutions business to
encompass workshop and assembly area to design and develop its
proprietary range of smart factory solutions. There will be no territory
restrictions for its proprietary range of smart factory solutions. It also
supports the nation’s sustainability goal of Industry 4.0 in manufacturing
lines. The wider range of solutions will bode well for it in the years to come.

 Earnings forecasts and valuation. Coupled with the expansion of MNC
manufacturers and expected pipelines of new solutions offerings, we are
projecting an earnings CAGR of 37.9% from FY22F-24F. We like Cnergenz
for its diversified customer base and as a representative of top brands. We
ascribe a 22x P/E on its FY23F earnings, which is c.25% discount from its
peer average 2-year forward P/E due to its lower profit margin and market
capitalisation.

 Key risks. Loss of skilled engineers and technicians, failure to secure new
projects and risk of termination, non-renewal and exclusivity of
distributorships.

RHB Research 22122022

*STOCK ON RADAR*
20 December 2022
AmBank Retail Research

*Betamek* (0263)
Shariah Compliant: Yes
Entry : RM0.535-0.575
Target : RM0.65, RM0.70
Exit : RM0.46

Disclaimer: This message is for information purposes only and is not intended to be distributed to any third party. It does not construe as an offer/a solicitation/a recommendation to buy/sell any stocks. Please consult your own independent adviser(s) before investing in any stocks and no responsibility or liability can be accepted for any loss or damage that may arise from the reliance of this message. The information herein constitutes our findings as of this date and is subject to change without notice.

Wong Engineering counts on manufacturing division
https://www.thestar.com.my/business/business-news/2022/12/15/wong-engineering-counts-on-manufacturing-division

SNS Network posts 3Q net profit of RM11.9mil
https://www.thestar.com.my/business/business-news/2022/12/13/sns-network-posts-3q-net-profit-of-rm119mil

Focus Point hungry for F&B growth after ‘elementary mistakes’ in early years
https://www.theedgemarkets.com/article/focus-point-hungry-fb-growth-after-elementary-mistakes-early-years

UMW sold 39,034 vehicles in November as UMWT and Perodua hit record sales
https://www.theedgemarkets.com/article/umw-sold-39034-vehicles-november-umwt-and-perodua-hit-record-sales

HLIB starts coverage of OSK Holdings, target price at RM1.42
https://www.theedgemarkets.com/article/hlib-starts-coverage-osk-holdings-target-price-rm142

Sunview clinches RM120 mil EPCC contract for solar energy facility in Bestari Jaya
https://www.theedgemarkets.com/article/sunview-clinches-rm120-mil-epcc-contract-solar-energy-facility-bestari-jaya

China eases Covid restrictions on travel and production
https://www.cnbc.com/2022/12/07/china-eases-covid-restrictions-on-travel-and-production.html

China opening up good for sports activities.

Farm Fresh, over 100 institutions to teach kids on benefits of drinking milk
https://www.nst.com.my/business/2022/12/858259/farm-fresh-over-100-institutions-teach-kids-benefits-drinking-milk

Sunview

Beneficiary of growing RE adoption

MYR0.66 FV based on 15x FY24F (Mar) P/E. An experienced solar EPCC main- and sub-contractor, Sunview is poised to ride on Malaysia’s growing adoption of renewable energy (RE) and the Government’s commitment to achieve a higher RE mix. Its strong orderbook (6.5x cover of FY22 revenue) provides earnings visibility and continues to drive earnings growth. Over the next two years, Sunview is also striving to double its recurring income base from 18 solar assets. Currently valued at 11x FY24F P/E, this counter is an attractive RE play, in our view.

A solar EPCC contractor and solar asset owner. Sunview is mainly an EPCC contractor that derives the bulk of its revenue by providing EPCC services on: i) Utility-scale large-scale solar (LSS) projects, and ii) solar photovoltaic (PV) facilities for commercial and industrial (C&I) clients. It also owns solar PV facilities on client rooftops, and operates them for a fixed concession period under power purchase agreements (PPA). Currently, it owns 18 solar PV facilities with a collective installed capacity of 7.74MWp, which currently generates <2% of revenues. Sunview plans to double its installed capacity to c.15MWp within two years, and looks to continue building or acquiring more solar assets, using a mix of equity and debt funding.

Beneficiary of Malaysia’s RE commitment. As the Government is targeting for 31% of Malaysia’s installed capacity to be made up of RE by 2025, these efforts will likely translate to more of such projects that Sunview can capitalise on. With a reputable track record and its status as a listed company, it is wellpositioned to win more LSS contracts, in our view. The group should also benefit from the growing demand for solar PV facilities from C&I clients, fuelled by: i) Growing ESG awareness and a desire for a higher RE mix to be ESG-compliant; and ii) potential cost savings from using solar energy, given the possible hike in electricity tariff rates in 2023. Sunview also aims to venture into the EPCC of biogas facilities in the near future.

Strong demand for solar power helps to replenish orderbook. As of endSeptember, it had an unbilled orderbook of MYR644m, providing a 6.5x cover of FY22F revenue. We forecast a 3-year earnings CAGR of 40%, driven by its current orderbook and future project replenishments. While margins have softened YoY in 1HFY23 on the back of larger LSS contributions, we think these could gradually inch up as solar panel prices start to ease, and as Sunview procures certain discounted P-type solar cells in the market.

Valuation. We ascribe a P/E of 15x on FY24F (Mar) EPS to arrive at our fair value of MYR0.66. The 15x forward P/E is the same as what we ascribed to Samaiden (SAMAIDEN MK, NEUTRAL, TP: MYR0.76), and is at a premium to the Malaysian utility peer 2023 P/E average of c.12x – which is justified, given its relatively brighter growth prospects. Key risks include the inability to secure more projects, and a rise in solar panel prices, which could erode margins and delay projects

RHB Research 5 Dec 2022

Within the F&B segment, Focus Point has 11 Komugi retail stores selling Japanese baked goods and pastries in Malaysia (along with 20 retail stores by franchises in the Philippines and four in Brunei), and a wholesale arm supplying in-house pastry offerings to its corporate customers locally including FamlyMart, Starbucks, Don Don Donki, Aeon Co (M) Bhd and Sushi King. Negotiations to supply to an airline company are underway, Liaw say, adding that the company is looking for big corporate clients to supply pastries to.

"We are committed to grow our wholesale business," Liaw says, explaining that Komugi's wholesale business is bigger than retail in terms of percentage ratio. The food products are prepared at the group's two central kitchens in Kota Damansara.

Plans to tap the fast-moving consumer goods market with the launch of chilled delicacies - starting with frozen macarons to be supplied to supermarkets, hypermarkets and petrol stations - are in progress.

With the acceleration in the group's F&B segment, he expects the division's contribution to group revenue to increase to at least 50% in the next two to three years, from 30% currently.

The Edge Malaysia December 5, 2022

Tong's Portfolio - CCK

We also acquired shares in relatively attractively value consumer stock, CCK Consolidated Holdings Bhd. The company operates a fully integrated poultry business - from feed mill to breeder farms, hatchery, broiler and layer farms, and abattoir - primarily in the state of Sarawak. The downstream distribution network includes retail stores, supermarkets as well as retail outlets across Sarawak, Sabah and Indonesia (Jakarta and Pontianak). Fresh dressed chicken and chicken parts make up of about 50% of its retail stores' products, where about 70% of its customers are F&B operators.

CCK's revenue grew 21%-26% y-o-y in 1QFY2022/2QFY2022, and 36% in the latest quarter, 3QFY2022, bolstered by the new store openings, contributions from new facilities related to frozen poultry products in Pontianak, as well as recovery in its school food services units. The company's latest venture, the diversification into prawn agriculture and processing - largely for exports, including Australia, Hong Kong, Japan, Dubai, Vietnam and Indonesia - also contributed to top-line growth. Its prawn factories are HACCP-certified and process both cook -and-feel and IQF prawns. Net profit margin recovered to between 5.3% and 5.6% in the last two quarters, as the hotel/restaurant/cafe' businesses rebounded with the easing of lockdown measures. Its trailing PER is only 10 times while dividend yield is around 1.8%.

Source ; The Edge Malaysia December 5, 2022

Tong's Portfolio - Li Ning Co

We also foresee that domestic brands will continue to gradually gain market share from foreign competitors over the coming years. As such, we decided to add shares for Li Ning, the company founded by the famed Chinese gymnast and Olympic gold medalist, to the Global Portfolio.

The sportwear (primarily attire and shoes) and equipment (racquets, basketballs and accessories such as caps, socks and bags) company operates primarily in China, where the market is expected to grow at more than 10% annually. Currently, Li Ning has a roughly 8.2% share of the domestic sportswear market. While smaller than Nike's (19.1) and Adidas' (14.6%), Li Ning been gaining market share and we expect this trend to persist.

Chinese consumers, especially the younger generations, have shown an increasing penchant for home-grown brands of quality that they can identify with, that are more in tune with their needs, tastes and style preferences, and often retail at more attractive prices. These domestic companies have a much better understanding of the nuanced localised differences across the vast country, and are more sensitive to changing trends and traditional culture. They are, therefore, more savvy in terms of their product designs and marketing campaigns.

Li Ning's revenue grew at a CAGR of 26% between 2017 and 2021, generating consistently positive free cash flow (FCF). FCF increased from RMB844 million to RMB4,989 million over this period. The company is sitting on net cash of RMB8,822 million. Inventory days improved from 80 days in 2017 to 55 days in 1H2022.


https://www.youtube.com/watch?v=-azITSQFzus

https://www.youtube.com/watch?v=oxfgPk-81kQ

https://www.youtube.com/watch?v=WvL6XGfQ5ak

The Edge Malaysia 28 November 2022

PCCS' Q2 net profit surges 242pct, revenue up 1.24pct
https://www.nst.com.my/business/2022/11/853718/pccs-q2-net-profit-surges-242pct-revenue-124pct

Perodua's year-to-date sales breach 250,000 units in November
https://www.theedgemarkets.com/article/peroduas-yeartodate-sales-breach-250000-units-november

Technical tracker - HLIB Retail Research –12 December 2022

FOCUSP: Get ready for a prosperity year ahead

Optical and F&B segments to grow further. Accounting for 83% of the group’s 9M22 revenue, the optical segment is expected to grow in line with new store openings and new corporate clients, evidenced by the burgeoning corporate sales after signed up more corporate clients in early 2022. As the month of Dec marks most of its corporate clients’ FYE, Dec sales from the corporate client segment is expected to be strong as employees rush to utilize their benefits. Separately, FOCUSP has launched 15 optical stores YTD and is targeting 12-15 new stores in FY23. The expansion in the optical business will enable the group to bargain for higher rebates from its key suppliers which are mainly the established foreign brands.

For F&B segment, FOCUSP is in an advance stage of discussion with its airline corporate client, which would bump up the CK2 utilization rate to 80% (from 50%) should the deal materialize. Meanwhile, sales from other corporate clients remain stable.

Brace for a strong 4Q22 earnings. Though management shared that optical sales was relatively soft in Nov due to the lower footfall to malls amid the World Cup and GE15, management believes that the momentum will pick up strongly in Dec-Jan on the back of year-end sales and CNY. In fact, 4Q tends to be FOCUSP’s seasonally stronger quarter due to the recognition of rebates of optical sales. With FOCUSP having more store counts and corporate clients than before, we opine that 4Q22 will deliver a stellar end to FY22.

Main board listing. After meeting the main market listing requirements, FOCUSP has secured SC’s approval to grant its listing to Main market in Nov (proposed in Aug). The move will be another strong catalyst for share price rerating as it allows FOCUSP to gain access to a wider investor base.

Pending breakout. At RM0.82, FOCUSP is trading at an undemanding 7.5x FY23 P/E (48% discount against its 5-year average of 14.7x), which has yet to reflect the positives, in our view. Hence, we reiterate accumulate stance in FOCUSP to ride on the catalysts abovementioned. Technically, FOCUSP is pending for a long-term resistance breakout of RM0.83. A successful breakout above the said hurdle will signal a new up-leg toward RM0.88-0.96-1.05. Cut lost at RM0.70.

Collection range: RM0.77-0.80-0.82

Upside targets: RM0.88-0.96-1.05

Cut: RM0.70
HLeBroking 2 Dec 2022

CGS-CIMB starts coverage of Infomina with 'add' call, target price at RM1.15
https://www.theedgemarkets.com/article/cgscimb-starts-coverage-infomina-add-call-target-price-rm115

Insert Insert
Genetec Technology Bhd
2QFY23: Record-breaking quarter
■ 1HFY3/23 net profit beat our expectations at 58% of FY23F core NP due to
stronger-than-expected net margin in 2QFY23, but in line with consensus.
■ We expect Genetec to record stronger yoy results in 2HFY23F, backed by its
robust order book in EV & ES and favourable forex movements.
■ We raise FY23-25F EPS by 3-7%. Reiterate Add with a higher RM4.60 TP.
2QFY3/23 net profit rose 35% qoq; beat expectations
2QFY3/23 revenue declined 3.5% qoq due to a delay in automation line delivery for its hard
disk drive (HDD) segment from Sep 22 to Oct 22 amounting to about RM5m. Despite the
lower sales, EBITDA margin expanded by 13.2% pts qoq to 42.1% in 2QFY23 due to 1) a
better sales mix coming from higher engineering change request (ECR) service related to
electric vehicle (EV) & energy storage (ES) segment, which offers higher margins than
production line segment, and 2) favourable forex movement. Overall, 2QFY3/23 net profit
surged 35% qoq to RM25.1m, despite a higher effective tax rate of 8.2% (+4.1% pts qoq).
Note that this was the highest quarterly net profit in the company’s history since its listing.
1HFY23: driven by higher HDD and EV & ES contribution
On a cumulative basis, 1HFY3/23 revenue and net profit rose 44.5% and 78%,
respectively. The group attributed the stronger performance to: i) higher contribution from
HDD (+5.6x yoy) and EV & ES (+6% yoy) segments, ii) a better sales mix and iii) favourable
forex movements from the depreciation in Ringgit against US$. 1HFY23 EBITDA margin
rose 6.8% pts yoy to 35.4%. Overall, 1HFY23 net profit jumped 78% yoy to RM43.5m.
Strong growth prospects backed by RM256m order book
Genetec’s order book stood at RM256.4m as at end-Sep 2022, out of which 98% are
related to the EV & ES segment. We gathered from the management that Genetec added
c.RM79m worth of new orders in the quarter mainly in the EV & ES segment, including a
second formation line from its US EV customer. In addition, the group is also tendering for
additional formation, regenerative braking system and electronic control unit (ECU) lines
for FY3/24F. Genetec’s tender book stood at c.RM237m as of end-Sep 22. Moreover, we
also learnt that Genetec is working on developing its in-house battery energy storage
system (BESS) as part of its new growth strategy. The group plans to complete the BESS
prototype by end-2022 and begin pilot run deployment in CY23F.
Reiterate Add; TP raised to RM4.60
We raise our FY23-25F EPS by 3-7% to account for: i) higher sales from HDD and EV &
ES segments, ii) a more profitable sales mix and iii) favourable forex. Accordingly, our TP
rises from RM4.30 to RM4.60, based on a lower 31x CY24F P/E, in line with the Malaysian
automated test equipment (ATE) sector’s 5-year mean P/E, (vs. 35x previously; 0.5 s.d.
above Malaysian ATE sector mean), in view of the weak sentiment in the global technology
sector. We also roll over our valuation to end-2023F - CgsCimb 29 Nov 2022