Carlsberg launched a seven-year plan in 2015 to deliver organic sales growth and margin improvements by striking a balance between volume growth and more profitable products.
Carlsberg Brewery Malaysia
Carlsberg’s new found cost efficiencies, superior product mix and greater economies of scale at its Singapore operations are expected to drive earnings on the back of our assumption of 1.5% volume growth and 2% ASP hike.
Datasonic Group Bhd
Datasonic’s recent passport chips job contract win, coupled with the potential renewal of its existing contracts (to be secured progressively over the next 6-12 months), may likely propel its earnings as well as share price to a new high.
DRB-Hicom Bhd
DRB-HICOM’s current share price ignores many profitable and valuable assets within the Group. With Proton in active discussions for a strategic equity partner, the stage is set for its business model to evolve into a more sustainable one.
Gadang Holdings Bhd
We like Gadang for its undemanding valuations/good earnings visibility. We think that being an experienced local contractor stands it a good chance in winning jobs from the upcoming infrastructure projects under the 11th Malaysia Plan.
Kimlun Corp Bhd
Kimlun is a must-own construction stock, given its exposure to the MYR80bn Klang Valley Mass Rapid Transit (MRT) project and recently-secured Pan Borneo Highway project. Kimlun is also aggressively tendering for various infrastructure projects and low-rise developments, which shall improve overall margins if secure.
KPJ Healthcare
We expect capacity expansions at some of its major hospitals to enhance operating leverage and provide margins buffer. In our view, near-term earnings concerns has been more than priced in as it trades below its 4-year historical mean and at a steep discount to some regional peers.
MMC Corp Bhd
We see ample upside to share price as the market continues to undervalue its non-listed businesses (NLBs) which imply that investors would get its port assets free. We see no reason for the discount, as the outlook of its NLBs is attractive.
Muhibbah Engineering Malaysia Bhd
Muhibbah Engineering is a beneficiary of the Refinery And Integrated Petrochemicals Development (RAPID) project. Its stable cash flow comes from Cambodian airports operations, with double-digit passenger growth expected.
Petronas Chemicals Group Bhd
We expect the olefins & derivatives and methanol segments to do well on the back of rising crude oil prices and firmer demand for the latter. Fertiliser prices remain sluggish in the near term, but we expect the supply deficit to provide some price support. Operationally, it recorded its best utilisation rate since listing.
Press Metal Bhd
Press Metal is set to make a comeback with its combined aluminium smelting capacity of 760,000 tonne pa poised to reach full production from May. Despite our conservative aluminium price assumption, we still expect 3-year earnings CAGR of 20.5%.
Public Bank Bhd
Public Bank stands out among peers with its solid asset quality, healthy income growth and strong execution track record. We believe the bank would weather the asset quality upcycle better due to its lower risk retail-based loan book and high loan provision buffers.
Sunway REIT
We believe the retail and hospitality segments will continue to be the main growth driver for Sunway REIT in the next few years. We also believe having a strong sponsor is a big advantage, as we expect a continuous slew of asset injections from the sponsor into the REIT in the next few years.
Telekom Malaysia Bhd
We continue to like TM’s data-driven earnings resiliency, which will also provide investors refuge from competition afflicting the mobile operators. Webe’s introduction would help increase average revenue per account (ARPA) “stickiness” which could translate into greater earnings quality over longer term.
Tenaga Nasional Bhd
We like Tenaga Nasional for its defensive earnings, large market value and high share liquidity. We also expect the firm to gradually regain lost ground in the lucrative power generation business.
VS Industry Bhd
VS Industry is one of the largest Electronics Manufacturing Services (EMS) providers in Malaysia. We favour its robust earnings growth, which will be underpinned by increasing orders from key customers, including Dyson.
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