Established in 1991, Supercomnet Technologies Bhd (SCOMNET) has now evolved into a global award-winning medical devices and cable specialist. The group is embarking into a relatively large-scale expansion on its existing 4 factory buildings that will boost built-up area to more than 30,000 sqm upon completion in coming years. We initiate coverage on SCOMNET with a BUY call and fair value of RM1.51, based on a target P/E multiple of 38.0x (which is in line with the 5-year historical average) to FY23f diluted EPS of 4.0 sen.

Moving forward, we expect the maintenance segment to anchor the overall performance, backed by multiple long term federal and state road concession agreements will provide earnings visibility till 2029. Although the maintenance segment will be kept busy with current works on hand, we think that Protasco will continue to leverage onto the allocation of RM3.50bn under Budget 2022 for the development of infrastructure projects.

The FBM KLCI slumped for the sixth straight session amid regional weakness, marking its longest losing streak since January 2022. Despite the stronger retail sales recorded in April 2022 coupled with the improved unemployment rate which dipped below 4.0%, investors may stay cautious given the heavy selling pressure on Wall Street and European stock exchanges as ECB increased its interest rate by 50 bps, translating to further volatility on local exchange over the near term.

The FBM KLCI lost ground in the final-hour selloff as investors struggled to find a floor amid concerns over elevated inflation and costs pressure. Given the slight negative tone on Wall Street, technology stocks will be under pressured once again. Meanwhile, the elevated Brent crude oil price trading above USD123, coupled with the trucker strike in South Korea could further threaten the global supply chain disruptions and add risks to the global inflation. Having said that, we believe there will be positive trading activities within the recovery-themed sectors as we are transitioning to the endemic phase.

Only World Group Bhd (OWG) was incorporated since 1973 and engaged in the provision of management services of leisure and hospitality services under the operation of food service outlets, water amusement parks and family attractions and other services.

The FBM KLCI remained negative as investors continued to trade cautiously under the interest rate upcycle as well as intensifying inflationary pressure environment. We expect a range-bound trading on the local bourse prior to a series of economic data releases for the week including Malaysia’s unemployment rate, European Central Bank interest rate decision, as well as inflation data from China and US. Nevertheless, the overnight jump on Wall Street may shed a light on the local bourse, especially in the technology sector.

UOA Real Estate Investment Trust (UOAR) commenced its operations in December 2005 and has now expanded its property portfolio to 6 buildings spanned across Kuala Lumpur, Damansara Heights, and Bangsar South. Properties are located in strategic locations coupled with the alignment of interest with UOA Development Bhd granted few long-term competitive edges against its peers. We initiate coverage on UOAR with a BUY call and fair value of RM1.40, based on 14.0x P/E pegged to its forward FY23f EPS of 10.0 sen.

The proposed acquisition of ABSB will enable RHT to (i) construct additional tailings ponds or storage and waste rock storage on ABSB’s land, (ii) expand existing mining pit in Hulu Perak further eastward so that RHT will be able to mine additional tin resources within its own land and (iii) mine the tin resources within ABSB’s land. The proposed acquisition is expected to be completed by 3Q22.