We expect the coal fired thermal power plant in Vietnam to remain as a key profit driver in FY22f and the foreseeable future. The group also aims to strengthen the power-related business with 2 MoU signed in 2021 for the (i) potential collaboration on the development in renewable energy plants such as solar and hydropower in Sabah and (ii) development of 1,500-MW liquefied natural gas (LNG) power project in Vietnam. At the same time, we gather that the progress of LSS4 project remains well on track and is slated for completion in 1Q23.

Occupancy rates at Plaza OSK, Faber Towers and Atria Shopping Gallery remains relatively healthy will generate stable recurring income, while the construction segment will be supported by an outstanding orderbook of RM211.0m (for their ongoing property development projects). With Malaysia transitioning into the endemic phase, we reckon that the industry segment is expected to deliver improvement on the back of smoother construction work progress. We also note that the loan portfolio remains stable at RM906.0m.

Moving forward, the progressive 5G services rollout by Digital Nasional Bhd (DNB) is expected to require 3,000-4,000 sites of 5G wholesale network by end-2022. Already, DNB has engaged OCK to conduct site survey for 5G infrastructure works. As of end 1QFY22, OCK will be kept busy with the delivery of outstanding order book of more than RM280.0m, from the JENDELA programme.

We believe that the maintenance segment will remain as the key revenue and profit contributor for FY22f, backed by 2 long-term federal road and 5 long-term state road concession agreements that will ensure recurring income stream till 2029. Leveraging onto their expertise, Protasco will be tapping into the RM3.50bn allocated for infrastructure projects under Budget 2022.

Moving into the next financial year (FY32f), we reckon a recovery is largely on table following the re-opening of borders, which could potentially speed up the industrial property sales progress from international companies and construction work progress may also accelerate. With Malaysia having transitioned into the endemic phase, we foresee no major foreclosure of site works.

Moving forward, we believe contribution from vaccination programme will remain minor as majority of the Malaysian population have been vaccinated. Optimax’s main business focus will be on ACC network expansion, setting up satellite clinics and business expansion to extend its market reach in the country. As Malaysia transitions into endemic phase, the group saw a gradual improvement in the performance of its branches, with some branches returned to pre-Covid-19 levels.

Following the multiple lockdowns over the past 2 years that hampered work progress, we reckon that the construction industry will be in a slightly better position in 2022 as the country transitioned into the endemic phase. Still, we remain cautious on the rising costs of labour and raw materials that could detriment the already razor thin margins within the construction sector.

Moving forward, we believe the demand for poultry products should remain robust amid recovery in economic activities supported by continued progress of booster shots rollout. However, the industry may continue to face uncertainties stemming from supply chain disruptions and government’s attempts to manage food inflation. Such measures include the price control scheme implemented on chicken and egg effective until 5th June 2022 and the chicken exports ban from 1st June 2022.