STOCK FOCUS OF THE DAY
Denko Industrial: A prime proxy to a prominent floor-care player BUY
We initiate coverage on Denko Industrial Corporation (Denko) with a BUY and fair value of RM1.76/share based on a CY19F PE of 13x. This represents a premium to its listed peers in the region which are trading at 10x. We attach a premium to Denko given that it is a stronger proxy to its key customer, which enjoys robust growth prospects. Among its peers, Denko has the highest share of orders from the key customer.
Denko is a prime proxy to its key customer's innovation and growth prospects. For 2017¬–2020, unit sales of the key customer are expected to grow at an astounding 3-year CAGR of 29%, underpinned by its constant innovation and fast-selling home appliances. Based on our projections, Denko should account for circa 30% of the key customer's total box-build requirements in CY18F (in terms of volume), rendering it the largest supplier for the customer.
Others :
Axiata Group: Negligible impact from acquisition of Kedah towers BUY
QUICK TAKES
Genting Bhd: In first phase of development for Kasuri Block BUY
Plantation Sector: News flow for week 30 April – 4 May NEUTRAL
RETAIL RESEARCH
Stocks On Radar: Hartalega, Power Root, Pestech International, KPJ Healthcare
ECONOMIC HIGHLIGHTS
Malaysia: Reiterate our optimistic view on exports
US: Is Fed still on track for aggressive rate hikes?
NEWS HIGHLIGHTS
Naim: Uncovers recovery plan
Kossan: To spend RM1.5b on new base
Property Sector: TH Prop¬er¬ties ven¬tur¬ing into Bangkok’s prop¬erty mar¬ket
Datasonic: Sees net profit surpass RM100m in FY19
DISCLAIMER:
The information and opinions in this report are prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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