Brokers Digest: Key Updates on Local Equities - Oil & Gas, Mynews Holdings, MISC, Eco World Development
Oil and Gas Sector - OVERWEIGHT
Kenanga Research (Oct 2): The KL Energy Index has dropped by 15.5% since May 2024, following the fall in Brent crude prices. However, Kenanga believes the sell-off is overdone, as the earnings outlook for upstream service providers remains robust for 2024 and 2025. Companies like Dayang Enterprise, Keyfield International, and Hibiscus Petroleum have seen their stock prices decline by an average of 22%, more than Brent's price drop. Kenanga maintains an overweight recommendation on the sector, noting that fundamentals are intact, and Petronas’ capex spending is expected to ramp up, even with value-focused investments.
Mynews Holdings Bhd - BUY (Target Price: 81 sen)
RHB Research (Oct 1): Mynews is venturing into the coffee and fresh food market with the opening of its Maru Café. Although the near-term earnings impact is muted, the café presents long-term growth opportunities. The company plans to open 100 new outlets in FY25, which will increase the utilization rate of its food processing center. The consolidation of management for Mynews and CU has helped reduce losses, and CU is expected to break even by FY24. RHB maintains a buy rating with a target price of 81 sen, implying a 20.2x FY25F PER.
MISC Bhd - BUY (Target Price: RM10.25)
CIMB Securities (Oct 2): MISC Bhd has signed long-term contracts with Petronas LNG Sdn Bhd for two new LNG carriers, starting in 2027, while also securing extensions for two other LNG vessels. MISC will receive compensation for the early termination of other contracts. The company now has 19 LNG carriers under construction, with 11 earmarked for Qatar Energy. CIMB maintains its buy rating with a target price of RM10.25, pending further contract details.
Eco World Development Group Bhd - BUY (Target Price: RM1.96)
Maybank IB Research (Oct 2): EcoWorld’s Quantum Edge Business Park (QEBP) in Johor is progressing well, targeting AI, cloud computing, and high-tech manufacturing companies. With land deals secured with Microsoft and Princeton Digital Group, QEBP is expected to contribute to earnings from FY25. Maybank IB has slightly raised its FY25-26 earnings forecasts, maintaining a target price of RM1.96 for EcoWorld.
source: theedgemalaysia
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