CCK Consolidated Holdings
3Q22: Robust results from retail and poultry
■ 9M22 core net profit of RM36m (+102.6% yoy) was above expectations, due
to better-than-expected results from its retail and poultry segments in 3Q22.
■ We expect CCK to record slightly weaker qoq results in 4Q22F, due to higher
input costs (weak ringgit) and seasonally slower sales.
■ Reiterate Add, with a higher TP of RM1.03 (12x CY24F P/E).
9M22 core net profit rose 102.6% yoy, beating expectations
3Q22 core net profit came in at RM13m (+106.3% yoy), after accounting for one-off gains
of RM13.4m (gain on disposal of investment properties of RM6m and estimated RM7.5m
in subsidies from the government in relation to the price ceilings on chicken and eggs).
This brought 9M22 core net profit to RM36m (102.6% yoy); above expectations at 83.8%
of our and 86.5% of Bloomberg consensus full-year estimates. The earnings beat in 3Q22
was due to stronger-than-expected contribution from its retail and poultry divisions. We had
expected weaker sales volume from both segments due to surge in feed cost prices.
3QFY22: Stronger qoq performance across all divisions
On a qoq basis, 3Q22 revenue and core net profit rose 12.2% and 10.8% respectively.
Retail segment’s 3Q22 EBIT rose 87.4% qoq to RM27m, owing to: i) better overall cost
control and ii) margin enhancements from selling price hikes. Poultry segment’s 3Q22 EBIT
rose to RM7.3m, lifted by the government subsidy of RM7.5m. Excluding this, the segment
would have posted a 3Q22 EBIT of -RM0.2m, still narrower than the -RM0.8m in 2Q22,
thanks to higher selling prices. Prawn segment’s 3Q22 EBIT expanded to RM2.1m (>100%
qoq) owing to the maiden contribution from PT Bonzana, an Indonesia prawn processing
plant whose acquisition it completed in 3Q22. Food service segment’s 3Q22 EBIT rose
58.7% qoq, thanks to higher demand from schools (increase in student activities).
Expecting a slightly weaker 4Q22F qoq
We expect CCK to record a slightly weaker core net profit qoq in 4Q22F, premised on: i)
weaker sales owing to lower consumer affordability (reduced spending power amid
inflationary pressures), ii) higher input costs from a weaker ringgit, and iii) seasonally
weaker performance from its food services unit (lower demand from school due to festive
and year-end school holidays) and prawn segment (weaker demand due to seasonality
factors). Nevertheless, we project CCK to post net profit growth of 6.6%/5.7% in
FY23F/24F, to be mainly driven by its retail (more store openings), poultry (lower feed cost
prices) and prawn (full contribution from PT Bozana) segments.
Maintain Add, with higher TP of RM1.03 (12x CY24F P/E)
In tandem with the 3Q22 results beat, we raise our FY22-24F EPS to account for higher
contribution from its retail and poultry segments. Accordingly, our TP rises to RM1.03 (12x
CY24F P/E, its current 5-year mean), and we keep our Add call. Besides its attractive
valuation (7.7x CY23F P/E, a 35.8% discount to its 5-year mean), we like CCK for: i) the
defensive nature of its retail business, ii) its captive market in East Malaysia, and iii) the
inelastic demand for poultry goods in Malaysia.

Infomina Berhad
Tier 1 VAD - Broadcom mainframe software
■ We initiate coverage on Infomina, an IT solutions provider specialising in
mainframe technology, with an Add call and TP of RM1.15 (20x CY24F P/E).
■ We project a 3-year EPS CAGR of 29.6% (FY22-25F), driven by a robust
order book (cover ratio: 2.2x), new clients and geographical expansion.
■ As the sole Tier 1 VAD for Broadcom Mainframe Software in 8 countries
currently, Infomina should benefit from rising demand for mainframe services.
IT solutions provider, specialises in mainframe software technology
Infomina is a Malaysia-listed information technology (IT) solutions provider, specialising in
mainframe-related technology. It has two key business segments: i) Turnkey - design and
delivery of technology infrastructure solutions (50.3% of FY5/22 revenue), and ii) Renewal
- technology infrastructure operations, maintenance and support services (49.7%).
Infomina has a strong regional clientele base that includes government bodies, financial
institutions, and other industries (automotive, telecommunications, etc.).
Sole Premier Tier I VAD for CA (Broadcom) in eight countries
In our view, Infomina’s key strength is its status as sole appointed Premier Tier 1 Value-
Added Distributor (VAD) of Broadcom Mainframe Software in eight countries since 2019
(Computer Associates Partner Regions). We think it can benefit from: i) growing adoption
of Broadcom mainframe technology, and ii) repeat business from users of Broadcom
mainframe software whose contracts are up for renewal (signed with Broadcom prior to
VAD appointment). Based on Gartner’s research (2020), Broadcom had the largest global
market share (37%) in mainframe software market - potential value of >US$7bn.
Robust orderbook (2.2x FY22 revenue) and rising tender book
Across FY23-27F, Infomina has an orderbook of RM443.6m (2.2x of FY22 revenue); 34.7%
from turnkey and 65.3% from tenewal segments. It has tendered for projects with total
value of RM376m (55%: turnkey segment). We expect robust orderbook replenishment
from: i) client acquisitions (new users of mainframe and onboarding Broadcom clients), ii)
upgrading works for mainframe users (capabilities enhancement), and iii) higher demand
for renewal segment (clients tend to sign service level agreement post turnkey projects).
Projecting 3-year net profit CAGR of 29.6% (FY22-25F)
We project Infomina to post a 3-year core net profit CAGR of 29.6% (FY22-25F). This is
driven by i) higher sales from both turnkey and renewal segments, ii) regional expansion
into new markets, and iii) higher economies of scale. We initiate coverage on Infomina with
Add and TP of RM1.15, pegged to our 20x CY24F P/E; in-line with local peers’ average
CY23F P/E in the IT industry (19.9x, Figure 55). Our Add call is backed by: i) robust NP
growth profile, ii) regional presence as Broadcom’s Tier I VAD, and iii) robust balance sheet
(RM73.3m net cash at end-1QFY5/23). Re-rating catalysts: robust EPS growth and rise in
institutional holdings (currently:c.1%). Downside risks: non-renewal of Tier 1 VAD status
with Broadcom, sharp dip in orderbook value and lower-than-expected margins - CgsCimb 1 Dec 2022

TP 1.03 by CgsCimb on 25 Nov 2022

TP 1.15 by CgsCimb on 1 Dec 2022

Mtag has cash and bank balances, fixed deposits and other investment in unit trust amounting to RM128.80 million and zero borrowings as at 30 Sept 2022 - Source : Q1 Sep 22 Report dd 23 Nov 2022

GFM Services 3Q net profit triples to RM8.1m
https://www.theedgemarkets.com/article/gfm-services-3q-net-profit-triples-rm81m

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

Farm Fresh Dairy Products awarded Brand of the Year
https://www.thesundaily.my/spotlight/farm-fresh-dairy-products-awarded-brand-of-the-year-NC10211639

Affin Bank, Farm Fresh among five added to MSCI Global Small Cap Index, while six removed
https://www.theedgemarkets.com/article/affin-bank-farm-fresh-among-five-added-msci-global-small-cap-index-while-six-removed

Kenanga Research starts coverage on MGRC, target price RM1.07
https://www.theedgemarkets.com/article/kenanga-research-starts-coverage-mgrc-target-price-rm107

PPHB's The Prestige Hotel
i) Winner Of Best Design Hotel 2022
ii) Winner Of Malaysia's Leading Hotel 2022
Iii) TripAdvisor Travelers' Choice 2022

ACE Market-listed Kim Teck Cheong seeks to transfer listing to Main Market
https://www.theedgemarkets.com/article/ace-marketlisted-kim-teck-cheong-seeks-transfer-listing-main-market

PT Resources staged a bullish breakout, says RHB Retail Research
https://www.theedgemarkets.com/article/pt-resources-staged-bullish-breakout-says-rhb-retail-research

Gloves & Plantations already rebounded. Some interest in Steel today. Annjoo breakout of 0.96 & Hiaptek breakout of 0.245 this morning. Ays attempting to breakout 0.40.

BursaKakis

Four Quarters of steady performances. At 0.145 cts now, PE is 4.9

1 month ago

Price jumped 52% from 0.145 a month ago to 0.22 on 26/10/2022

ACE Market-bound Betamek posts RM4.7m net profit on revenue of RM48.6m in 2QFY2023
https://www.theedgemarkets.com/article/ace-marketbound-betamek-posts-rm47m-net-profit-revenue-rm486m-2qfy2023

Sunview bags RM94 mil EPCC contract for LSSPV plant
https://www.theedgemarkets.com/article/sunview-bags-rm94-mil-epcc-contract-lsspv-plant

Sunview Group Bhd - Reputable solar company backed by strong order book
https://klse.i3investor.com/web/blog/detail/MplusOnline/2022-10-17-story-h1650239641-Sunview_Group_Bhd_Reputable_solar_company_backed_by_strong_order_book

Q3 July 2022 Report - Prospects

The Group’s Manufacturing segment continue to deliver positive results stemming from persistent orders and healthy demands for metal fabricated components. Looking ahead, the outlook for this segment is expected to remain upbeat as the Group works on upgrade and expansion of its plant and machineries to fulfil the existing surge in orders besides capturing new markets and industries to diversify and increase our customer base. The strengthening of US Dollar exchange rates has also benefitted the Group’s business and is expected to sustain over the near term. Nevertheless, we anticipate headwinds to our operation and business to linger driven by fluctuation in input cost and overhead, manpower constraints and challenges in the global supply chain affecting availability and lead times.

As for Construction & PD segment, the Group will cautiously seek out new projects and opportunities for expansion. Our associate company, Broadway Lifestyle Sdn Bhd (BLSB) is in the midst of planning for the proposed development in Sepang, Selangor on a parcel of land it acquired back in 2020. Premised on the above and barring further unforeseen circumstances, we remain cautiously optimistic of the Group’s financial performance and prospect for the coming quarters.

Federal International Holdings upbeat in securing more RE projects. FIHB has a 4.9 per cent direct stake in Sunview.
https://www.nst.com.my/business/2022/10/837072/federal-international-holdings-upbeat-securing-more-re-projects

Federal International to benefit from Starbucks’ aggressive India expansion
https://www.theedgemarkets.com/article/federal-international-benefit-starbucks-aggressive-india-expansion

Federal International partners China’s major power generator in RE venture
https://focusmalaysia.my/federal-int-partners-chinas-major-power-generator-in-re-venture/

Mercury sets 60 sen TP for ACE-bound Sunview on strong growth prospects
https://www.theedgemarkets.com/article/mercury-sets-60-sen-tp-acebound-sunview-strong-growth-prospects

SNS Network sees positive outlook on demand for ICT products
https://www.thestar.com.my/business/business-news/2022/09/27/sns-network-sees-positive-outlook-on-demand-for-ict-products

PT Resources debuts with brisk volume; posts higher profit in 1QFY23
https://www.theedgemarkets.com/article/pt-resources-debuts-brisk-volume-posts-higher-profit-1qfy23

PT RESOURCES HOLDINGS BERHAD (IPO Note)
Recommendation : Subscribe
IPO Price : MYR 0.36
Fair Value : MYR 0.54
Key Points:
• PT Resources revenue CAGR was at 44.2% annually, mainly attributable to its processing and trading of frozen seafood products to overseas markets that saw sizeable increase in export sales to Saudi Arabia and China.
• The IPO proceeds of MYR48.6 million will mainly be utilised for its working capital (55.9%), capex for new cold storage warehouses (36.3%), and the remaining for the listing expenses. This will increase the facility capacity to 4,000 tonnes from 700 tonnes.
• Moving forward, the Group expects to grow export sales at a faster pace as compared to local sales and continue to generate more than 50% of revenue from the processing and trading of frozen seafood segments. The purchases of raw materials would also remain the main component of the total cost.
• We believe demand for seafood would remain resilient, as part of essential products and supported by growing consumption in its overseas markets. We have a SUBSCRIBE recommendation on PT Resources with a target price of MYR0.54 and a target multiple of 10.8x (based on the enlarged issued share capital of 535,020,000), which represents a 12-month potential return of 50%. The indicative IPO price of MYR0.36 is based on PE Multiple of 6.8 and existing issued share capital of 400,020,000 shares).

Phillip Research Sdn Bhd

Ramssol secures new revenue stream via deal with GT-Max Motors
https://www.thesundaily.my/home/ramssol-secures-new-revenue-stream-via-deal-with-gt-max-motors-LC9859379

PCCS set to trend north, says RHB Retail Research
https://www.theedgemarkets.com/article/pccs-set-trend-north-says-rhb-retail-research

PCCS adopts 30% dividend payout policy
https://www.thestar.com.my/business/business-news/2022/08/29/pccs-adopts-30-dividend-payout-policy

Focusing on developing high-tech sports wear ( Kindly refer to BursaKakis Telegram for full article }
https://www.thestar.com.my/business/business-news/2022/09/17/focusing-on-developing-high-tech-sports-wear

Very good article on PCCS in The Star Biz on Sat 17092022

Mr Koon, how about Ruberex ? Ruberex purchased Reszon for RM180m or PE multiple of approximately 3.6 times. RM54m will be paid by cash & RM126m paid by issuing Ruberex shares @ 0.7091 per share. After this deal, Ruberex still has cash resources of about 126m. Reszon is providing a profit guarantee of RM50m for each year of financial years 2022 & 2023. Based on enlarged capital of 1,038,367,281 shares & 50m profit guarantee, eps is about 4.8 cts and forward PE 10 will be 48 cts. This is excluding their gloves business. Both Scomnet & UMC are trading above pe of 35 times. Ruberex will be changing it's name to Hextar Healthcare Berhad.

Rubberex gets shareholders nod for RM180mil acquisition
https://www.nst.com.my/business/2022/09/831306/rubberex-gets-shareholders-nod-rm180mil-acquisition

Rubberex acquires Reszon Diagnostics for RM180mil
https://www.nst.com.my/business/2022/05/801178/rubberex-acquires-reszon-diagnostics-rm180mil

Purchased Reszon for RM180m or PE multiple of approximately 3.6 times. RM54m paid by cash & RM126m paid by Ruberex shares @ 0.7091 per share. Annual profit guarantee by Reszon of RM50m for each year of financial years 2022 & 2023. Ruberex changing name to Hextar Healthcare Berhad.

Budget 2023 to focus on automation, digital technology - MOF
https://www.theedgemarkets.com/article/budget-2023-focus-automation-digital-technology-%E2%80%94-mof

Budget 2023 to focus on automation, digital technology - MOF
https://www.theedgemarkets.com/article/budget-2023-focus-automation-digital-technology-%E2%80%94-mof

Eps way ahead of D&O but share price much much lower.

Four Quarters of steady performances. At 0.145 cts now, PE is 4.9

Outlook
Genm Outlook :

GenM has finally returned to black mainly driven by capacity ramp up and increase in footfall from subsided Omicron wave and foreign visitors from border reopening. Looking ahead, the recovery trajectory should continue for RWG from (i) hotel capacity ramp up (room available as at July was 7.6k vs. 6k in June); (ii) theme park capacity ramp up (3 more rides by 4Q22); and (iii) increase in foreign visitations as more countries relax their border restrictions. The current weak local currency should bode well for foreign visitations. Furthermore, the opening of SkyWorlds theme park also allows RWG to attract a large and previously untapped Muslim market which represents c.63% of Malaysia population. GenM will be able to harness the full potential of SkyWorlds in 2H22 as capacity ramps up. The increased footfall to the theme park should have a positive spillover effect to the other venues in RWG

HLIB 26 Aug 2022

OWG: The worst is likely over

A victim of Covid-19. Listed in the Main market since 2014, OWG Berhad (OWG) is an investment holding company that manages and operates F&B and leisure-related brands found in popular resorts and shopping malls. The group's F&B outlets, water amusement parks, and family attractions are strategically located in tourist attractions, such as Genting Highlands, Komtar Tower at Penang and Klang Valley.

As the group business is primarily involved in the tourism industry, the onset of Covid-19 has heavily affected the group's operation. The decline of business volume from its Food service operation as well as the Amusement and recreation operation has whipped 79% of its FY19 revenue of RM123m to RM25m in FY21. In turn, the group chalked into red in FY20 (the first loss-making FY since it was listed), and the loss expanded further to RM42m in FY22. Nonetheless, we see the return of tourism following Malaysia's transition toward endemicity as a turning point for OWG as it will drive more footfall to its F&B outlet and family attractions.

A comeback. As of 21 June, Malaysia has already surpassed its full-year target of 2m incoming tourist arrivals. Genting Highlands, where most of its outlets are located and made up 40% of OWG's bottom line back in 2019, has seen its footfall gaining traction supported by (i) pent-up demand for travel, (ii) the depreciation of ringgit, and (iii) the launches of GentingSkyworld theme park. We flag that the group turnaround 3QFY22 (report until 31 March) had yet to reflect the strong return of foreign tourists as Malaysia only reopened its international border on 1 April 2022. In view of solid recovery momentum (2H seasonally stronger earnings), we expect greater business volume in its F&B outlet and family attractions and thus better earnings going forward.

HLIB 26 July 2022

4Q22 results ahead of expectation

Maintain BUY and MYR1.90 TP
FY22 core net profit of MYR335m was 10% above our estimate, fuelled
mainly by the strength of the oil price realized (+34% QoQ) at its North
Sabah ops in 4Q22. Our estimates are unchanged, on stronger operating/
financial outlook in FY23, benefiting from the full-year impact of its
Repsol ops. Our TP is unchanged, pegged to a USD11/boe of EV/2P
reserves valuation; undemanding relative to peers’ USD18/boe.

4Q22: A spectacular performance
Core net profit of MYR210m (+497% QoQ; 6-fold increase) in 4Q22 took
FY22 core earnings to MYR335m (+223% YoY), 110% of our FY estimate.
The better-than-expected QoQ performance was driven by relatively
higher: (i) oil, condensate & gas sold at the group level (2.2x to 2.2m
boe) and ASP of crude oil realized, especially at its North Sabah ops:
+34% to USD120/bbl, followed by Anasuria ops (+5% to USD128/bbl). For
FY22, it sold a higher 4.6m boe of oil equivalent (+22% YoY), comprising
3.5m bbls of oil and 1.1m boe of gas.

Expect a stronger FY23
We look forward to a stronger FY23 (+78% YoY core net profit). The YoY
strength will largely be underpinned mainly by the full-year impact of its
Repsol ops (vs. 6M in FY22). Operationally, it targets to sell 7.2m-7.5m
boe of oil, condensate and gas in FY23 (+57%-63% YoY) in FY23. Based on
its 1HFY23 planned off-take schedule, it aims to sell up to 1.6m/ 2.6m
boe of oil, condensate & gas in 1QFY23/ 2QFY23, which would account
for 22%/ 36% of its FY23’s sales. We see upside to our earnings estimates,
should it accelerate its development plans. Gearing up to fast-track
growth is a possibility.

More positives in the pipeline
Hibiscus remains the best play for a cyclical, strong energy price market.
It is fundamentally sound, financially resilient and offers compelling
growth with undemanding valuations. Securing Field Development
Planning (FDP) approval on Marigold would: (i) turn its 43.6m bbls of 2C
resources to 2P reserves, (ii) lift its Group’s 2P reserves by 60% to
115.9m bbls and (iii) make it a more attractive M&A proposition. An
extension on Repsol’s PSC (beyond 2032) would also be positive in
improving Repsol’s NPV and potentially adding a further 30m bbls of 2P
reserves to Hibiscus.

Source : MIB 25/8/2022

U.S. says about 20 models will get EV credits through end of 2022
https://www.theedgemarkets.com/article/us-says-about-20-models-will-get-ev-credits-through-end-2022

Seven Malaysian companies make it to Forbes Asia's Best Under A Billion 2022 list
https://www.theedgemarkets.com/article/seven-malaysian-companies-make-it-forbes-asias-best-under-billion-2022-list

Volcano bought 11 laser cutting machine in year 2021. New Thailand factory will be twice the size of the present factory.
Source : Bursa Announcement.

Front-end semiconductor, upstream energy spaces bodes well for DNeX, says HLIB Research
https://www.nst.com.my/business/2022/08/818888/front-end-semiconductor-upstream-energy-spaces-bodes-well-dnex-says-hlib

Global investment in RE hit US$226 billion in 1H2022, says BNEF
https://www.theedgemarkets.com/article/global-investment-re-hit-us226-billion-1h2022-says-bnef

KYM looking to electric vehicles, renewable energy to power business transformation - The Edge Weekly dd 25/7/2022

Tesla profit tops target; Musk sees no demand problem
https://www.reuters.com/business/autos-transportation/tesla-misses-quarterly-revenue-estimates-production-challenges-2022-07-20/

Technology stocks: Poised for a rebound?
https://www.thestar.com.my/business/business-news/2022/07/16/technology-stocks-poised-for-a-rebound

TSMC's 2Q profit up 76%, beats market estimates
https://www.theedgemarkets.com/article/tsmcs-2q-profit-76-beats-market-estimates

Taiwan economy minister: Order books for chip firms still very full
https://www.thestar.com.my/tech/tech-news/2022/07/06/taiwan-economy-minister-order-books-for-chip-firms-still-very-full

Global semicon sales up 18.0% y-o-y in May to US$51.8 billion, says SIA
https://www.theedgemarkets.com/article/global-semicon-sales-180-yoy-may-us518-billion-says-sia

Global semicon sales up 18.0% y-o-y in May to US$51.8 billion, says SIA
https://www.theedgemarkets.com/article/global-semicon-sales-180-yoy-may-us518-billion-says-sia

Tech-sector-tops-net-cash-companies
https://www.theedgemarkets.com/article/tech-sector-tops-net-cash-compa...

Taiwan's Foxconn raises full-year outlook on strong tech demand
https://www.theedgemarkets.com/article/taiwans-foxconn-raises-fullyear...