Wilmar International (WIL SP)
2H21 Preview: On Track To Meet Our Earnings Estimate
Wilmar is scheduled to release 2H21 results on 22 Feb 22. We expect a core net profit of
US$380m-400m for 4Q21 or US$956m-976m for 2H21, driven by strong performances
from palm and sugar operations which offset the weaker contribution from China.
Wilmar’s share price performance remains lacklustre despite another record earnings
year, due to concerns over China’s weak economy and COVID-19 restrictions weighing
on domestic consumption. Maintain BUY. Target price: S$6.00. |
CIMB Group (CIMB MK)
Optimistic On Recovery Prospects
Management sounded fairly optimistic on the group’s recovery prospects. In fact, we
gather pre-emptive provisions could be peaking in 4Q21, while the level of loans
under repayment assistance is expected to decline by a swifter-than-expected pace
by 2Q22. We remain positive on the group’s recovery prospects with CIMB expected
to deliver the strongest earnings growth among peers. Maintain BUY and target
price of RM5.95 (0.90x 2022/23F P/B, 8.5% FY22/23 ROE).
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TIME dotCom (TDC MK)
Plotting the next growth driver
Data centre to gain in prominence
With space no longer a constraint going forward, we expect the data
centre segment to become a long term revenue growth driver for TDC.
Nevertheless, capex for re-purposing and new-build is not insignificant, and there is a gestation period (a few years). Maintain HOLD with an unchanged MYR4.60 TP (DCF-based). We prefer TM (T MK, BUY, CP: MYR5.21, TP: MYR7.40) among the Malaysia telcos.
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Eco World Development (ECW MK)
Proposed bonus issue of
warrants
Rewarding shareholders with free warrants
We are neutral on ECW’s latest corporate exercise. The proposed 1-for-5 bonus issue of warrants (≈589m), which is slated to be completed by 1H22 after the expiring of its existing warrants (525m), will likely dilute our RNAV estimate by 9-10% assuming an exercise price of MYR1/warrant.
We maintain our earnings forecasts and MYR0.93 TP (on an unchanged 0.6x FY22 PBV) for now pending more information. Reiterate HOLD.
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