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High Drama and Big Impact: Trump’s Bold Tariff Plans and What to Expect

Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
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Key Corporate Updates from Malaysia

 

This article summarizes analysts' views on four Malaysian companies: Mr DIY Group (M) Bhd, Kelington Group Bhd, Pekat Group Bhd, and InNature Bhd. Here's a breakdown of the key insights:

Mr DIY Group (M) Bhd

  • Fair Value: RM2.65 (Buy)
  • Overview: Mr DIY's 1HFY24 earnings of RM300 million were in line with expectations, representing 46% of the full-year forecast. The company declared an interim dividend of 1.2 sen per share for 2QFY24, bringing the 1HFY24 dividend to 2.2 sen per share, a 57% year-on-year increase.
  • Growth Drivers: Revenue grew by 9% year-on-year, driven by the opening of new stores and an increase in transactions. Mr DIY aims to expand to 2,000 stores by 2028, with a focus on East Malaysia. Additionally, the acquisition of a 49% stake in the lifestyle retail brand KKV is expected to support future earnings growth.
  • Valuation: The stock trades at an attractive FY25F PER of 27 times, below its historical average. Analysts maintain a "buy" call with a fair value of RM2.65 per share, implying an FY25F PER of 34 times.

Kelington Group Bhd

  • Target Price: RM3.90 (Buy)
  • Overview: Kelington is expected to announce strong 1H24 results, supported by a robust RM1.3 billion order book and a favorable product mix. The company's gross profit margin is anticipated to remain strong, driven by ultra-high purity (UHP) projects.
  • Growth Drivers: New job wins, particularly from China, and the production of the second liquid carbon dioxide plant (P2) are expected to boost earnings. The company is on track to meet its RM1 billion order book replenishment target for FY24F.
  • Valuation: The target price is set at RM3.90, reflecting a 6% ESG premium and strong earnings potential.

Pekat Group Bhd

  • Target Price: RM1.32 (Buy)
  • Overview: Pekat has secured a RM21.8 million project from Gamuda Engineering for subcontract works on a hyperscale data center, expected to be completed by September 2025. This win increases Pekat’s outstanding order book to RM206.8 million.
  • Growth Drivers: The company is expected to secure more contracts related to the Corporate Green Power Programme (CGPP), which will further bolster its order book. Favorable policies like the National Energy Transition Roadmap (NETR) and the Large Scale Solar programme (LSS5) provide additional growth opportunities.
  • Valuation: The target price remains at RM1.32, based on a forward PER of 28 times.

InNature Bhd

  • Target Price: 28 sen (Neutral)
  • Overview: InNature recently acquired Blu Restaurant Sdn Bhd, which operates a Burger & Lobster (B&L) store in KLCC and holds exclusive rights for B&L in Malaysia, Indonesia, and Vietnam. The company plans to open a new B&L restaurant in Jakarta in 2025, diversifying its revenue streams.
  • Challenges: An anticipated US economic slowdown and weaker consumer consumption could impact earnings. However, the return of international tourists may mitigate some of the negative effects.
  • Valuation: The stock is rated "neutral" with a target price of 28 sen, based on a sum-of-parts (SOP) valuation approach.

In summary, analysts are optimistic about Mr DIY Group, Kelington Group, and Pekat Group, citing strong growth drivers and favorable valuations. In contrast, InNature is viewed with caution due to potential economic headwinds, though diversification into the F&B sector may provide some upside.

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