As a fully integrated poultry farming company, TEOSENG enjoys economies of scale which enable the group to meet the rising demand for chicken eggs amid business resumption and gain market share from the local farmers. Nevertheless, we foresee the uncertainty over commodity prices which may prevail over FY22 on the back of inflation as well as the unresolved Russia-Ukraine tensions to post challenge to the group.
Read MoreMoving forward, we reckon that the UHP segment will continue to anchor revenue contribution, being kept busy by multiple wafer fabrication works. Meanwhile, the general contracting segment will focus onto the relatively large-scale construction work that was secured last year at Sarawak, while the industrial gas segment will be kept busy with the gas supply scheme for one of the largest optoelectronics semiconductor companies located at Kulim, Kedah.
Read MoreMoving forward, SLP will be targeting to bring its utilisation rate back to pre-Covid-19 levels, which is at around 75.0%. Local sales growth will be backed by the recovery in economic activities as the country entered into the endemic phase, while the Japanese market will be boosted by the upgrade of economic growth to +3.2% YoY (from +2.2% YoY) in 2022.
Read MoreWe gather that plants utilisation rate has recovered as production activity resume uninterrupted. Moving forward, we expect utilisation rate to hover at current levels for FY23f. We were also guided that ASP trend appears to have stabilised, which we expect current prices that is above pre-pandemic level to hold throughout FY23f.
Read MoreWe gather that the aforementioned contract is the third major construction contract secured by Econpile for FY22f. Current orderbook replenishment now stands at RM155.4m, makes up to 77.7% of our expectations of RM200.0m for FY22f. Although the figure is still not within reach with only approximately 2 months left before the end of FY22f, we believe the jobs acceleration will materialise moving into 2H22 in line with the economic recovery.
Read MoreWe are sanguine on the deal as the move will cement OMH position as one of the largest vertically integrated manganese ore and ferroalloy player in South East Asia market that is operating as the world’s low-cost quartile smelter. The move that would be earnings accretive over the long run would benefit OMH that is tapping into the rising demand for building material products alongside with leveraging into the soaring raw material prices.
Read MoreWe understand that the decline in sales volumes was mainly impacted by the delay in shipments in end-March 2022. As such, a total of 405,269 MT of ores and alloys (-27.0% QoQ) were transacted during the quarter. Given that the production is touted to be within our expectations, we made no changes to our earnings forecast for now. Consequently, we maintained our BUY recommendation on OMH with an unchanged target price of RM3.65.
Read MoreMoving forward, KGB’s outstanding orderbook of approximately RM1.30bn, which represents an orderbook-to-cover ratio of 2.9x against FY21 revenue of RM517.7m will provide strong earnings visibility over the next 2 years. We remain sanguine on KGB’s outlook that is well supported by the tenderbook of close to RM2.00bn as the group continues to leverage on the semiconductor players expansion plans with tenders skewing towards larger scale wafer fabrication projects.
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