ANALYSTS SAY: Buy, Sell, Hold (13 Dec)

CGS CIMB

Keppel DC REIT
BKK NDR highlights

■ We hosted KDC on a non-deal roadshow (NDR) in Bangkok. Key questions were regarding 1) higher utilities, 2) rising interest costs and 3) acquisitions.
■ KDC highlighted that the rental indexations, escalations and reversions should help to mitigate higher electricity and interest rate expenses.
■ Reiterate Add. KDC is trading at an attractive 5.6%/5.9% FY22F/23F DPU yield and P/NAV of 1.38x, -0.5x s.d. from its 8-year average P/NAV of 1.54x.

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Public Bank Bhd
Public Bank founder passes away at 92

■ PBB announced that its Chairman Emeritus and founder, Tan Sri Teh Hong Piow, has passed away peacefully on 12 Dec.
■ While the above is a loss to PBB, we do not expect this to materially affect the outlook of PBB as it is backed by a strong management team.
■ Tan Sri Teh’s demise would trigger a major change in the shareholding structure of PBB.

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UOB KAYHIAN

Sea (SE US)
Testing Times For Key Segments

Share price has recovered about 50% after a narrower net loss in 3Q22, but we are doubtful that huge profitability could be attained with slower growth from the digital entertainment and e-commerce segments. We are also cautious on the risks of potential divestment by major shareholder Tencent and the huge amount of convertible notes in 2025-26. However, Shopee’s dominant market share in ASEAN could allow it to leverage on higher growth opportunities. Initiate coverage with HOLD. Target price: US$58.77.

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Malaysia Marine and Heavy Engineering Holdings (MMHE MK)
Building Track Record On Decarbonisation/Green Projects

Although share price surged by around 30% after securing the mega CCS project, we still see further upside thereafter, as MMHE is well-positioned to capture more green projects including offshore wind structures (50% of its bidbook), onshore projects related to circular economy, and demand for green shipping retrofits. We upgrade forecasts and valuation, premised on our assumption that marine repair will continue to show recurring profits. Upgrade to BUY. Target price: RM0.75.

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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.

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Public Bank (PBK MK)
Founder passes on

HOLD maintained
Tan Sri Teh’s demise marks the departure of an icon in the banking industry. Nevertheless, he leaves the bank in much capable hands and it should be business as usual at Public Bank. We maintain a HOLD call with an unchanged TP of MYR5.00, which pegs FY23E valuation to a PBV of 1.9x for an ROE of 13%. We prefer HL Bank (HLBK MK; BUY; CP: MYR20.58; TP: MYR24.10) for exposure to the retail banking space. 

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