Meanwhile, we note that OMH has successfully modified and converted 2 FeSi furnaces to produce manganese alloys with hot commissioning and performance testing on 27th June 2022 and 25th July 2022 respectively. This will boost total annual production capacity to 333,000-400,000 MT per annum of manganese alloys. In the meantime, 2 units of FeSi furnaces are still undergoing conversion works (demolition works completed and civil modification works are ongoing) that will be able to generate 21,000-24,500 MT per annum of metallic silicon (MetSi) upon completion.

Moving forward, we do not foresee a rapid growth in occupancy rates due to lingering effect from the Covid-19 pandemic as well as the inflationary pressures on the global economy which may risk on economic recovery. Rental rates are also expected to remain flat upon renewal of tenancies. Nevertheless, we are positive on UOAR’s outlook over longer term as rental activities are appeared to be on the road of recovery amid reopening of economic activities and national borders.

Local integrated healthcare supply chain player that markets and distributes their products offering to over 400 customers across more than 30 countries worldwide and is embarking into expansion of new factory building. We project core earnings to grow from stronger sales in medical devices, particularly ventilators, patient monitors, defibrillators and ultrasound machines, in line with the upgrade of healthcare facilities in both public and private hospitals. UMC is valued by pegging its FY23f core EPS of 2.2 sen to PE of 17.0x, leading to a FV of RM0.38.

Rexit Berhad (REXIT) started off since 1998 and has evolved into one of the leading solutions providers to the general insurance industry. Ongoing expansion in both local and oversea markets leveraging on its reputation and expertise helps REXIT to capture the growing demand in the insurance industry. We initiate coverage on REXIT with a BUY call and fair value of RM0.83, based on 14.0x P/E pegged to its forward FY23f EPS of 6.0 sen.

For FY23f, we have imputed a FFB production assumption of 280,000MT (1QFY23 numbers makes up to 21.8% of our assumption). We expect production to improve in subsequent quarters as labour shortage issues may see some alleviation. Meanwhile, we take note that biogas plants at Keningau and Telupid mills are expected to commence operation to supply power grid by end of 2QFY23.

We attended two site visits earlier this week at OSK Holdings Bhd’s (OSK) on-going property development projects located at (i) Iringan Bayu, Seremban and (ii) Shorea Park, Puchong and we came away feeling re-assured over their respective developments progress. Both Phase 1 of Iringan Bayu and Shorea Park are largely on track for sequential rollout of new phases over the foreseeable future after having achieved commendable take-up rates in their previous launches.

Following the latest win, KGB’s year-to-date orderbook replenishment now stood at approximately RM762.0m. Current orderbook replenishment meets 76.2% of our projected orderbook replenishment target of RM1.00bn for FY22f. Moving into final half of the year, we reckon that our projected orderbook replenishment is largely achievable, supported by the robust outlook within the semiconductor industry.

Established in 1989, Nova Wellness Group Berhad (NOVA) is now involved in the development and production of nutraceutical products under its house brand and for its OEM customers. Rising demand for nutraceutical products, coupled with NOVA’s ongoing expansion of distributor network and production capacity are expected to drive the house brand segment’s growth. We initiate coverage on NOVA with a BUY call and fair value of RM1.08, based on 14.0 P/E pegged to its forward FY23f EPS of 7.7 sen.