buysellhold july.23



Kimly Group

Navigating cost pressures


■ 2HFY23 core net profit of S$18m (+19% yoy) was above our expectation on resilient outlet management margins. FY23 DPS was 1.68 Scts (flat yoy).

■ We think net outlet growth will resume in FY24F but margin pressure will likely persist given elevated opex and difficulty in passing on higher costs.

■ Reiterate Hold with a lower TP of S$0.36, now pegged to a lower 13x CY24F P/E (15x previously), based on 1 s.d. below 5-year historical mean.



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YTL Corporation

Firing on all cylinders


■ We reiterate Add, raise FY24F-26F EPS by 14-38% and lift TP to RM2.13.

■ YTL is balancing dividends, growth opportunities and share buybacks.

■ We believe the company, an FBM KLCI constituent, is a proxy for Malaysia’s economic recovery. 



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Malaysia Banking

4.0% YoY loan growth in Oct 2023


4.6% industry loan growth forecast for 2024E The drag on the non-HH loan front would imply that industry loan growth could fall short of our forecast of 4.6% for the year. On expectations of faster GDP growth in 2024E, we maintain our 2024E industry loan growth forecast of 4.6%. Positively, the slide in CASA appears to be contained, while asset quality is still benign. We maintain a POSITIVE on the sector, with BUYs on CIMB, PBK, AMMB, HLBK, HLFG and ABMB.



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Axiata Group (AXIATA MK)

Exits Nepal


De-risking the portfolio Axiata has completed the disposal of Ncell. While the disposal consideration is not material in our view, Axiata will be indemnified against Nepalese tax claims going forward. Reiterate BUY with a lower MYR3.00 SOP-based TP (-3%). We view the overall risk-reward as being positive, with sequential net profit recovery and asset monetisation (leading to balance sheet repair) being potential re-rating catalysts.



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Alpha Picks: Add VALUE And VMS; Remove THBEV And CSE


Global markets rallied in Nov 23 as encouraging economic data, cooling inflation and dovish comments from the US Fed raised hopes of an end to the rate-hike cycle. This enabled our Alpha Picks portfolio, which rose 1.5% mom in Nov 23, to beat the STI by 1.3ppt on an equal-weighted basis. For Dec 23, we add VALUE and VMS, while removing THBEV and CSE.



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Alpha Picks: December Conviction Calls


MSCI China rose only 2.3% mom in November while the HSI shed 0.4% mom over the same period, despite positive newsflow for the real estate sector. Investors preferred to sell into strength, as concerns over China’s slow economic growth remain. Looking ahead, the mid-Dec 23 Economic Work Conference may provide positive surprises and with MSCI China trading at 12-month forward PE of 9.3x, risk is skewed to the upside. We add CSPC, HKEX, Lenovo, Longfor, Pinduoduo and Sunny Optical to our BUY list



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