152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 126
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Capital The Edge Best Call Awards2017Cindy Yeap and Kathy Fong(authorCindy Yeap and Kathy Fong)
theedgemarketscom(sourcetheedgemarketscom)
January 04 2018 1400 pm +08
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 226
This article rst appeared in Capital The Edge Malaysia Weekly on December 25 2017 - December
31 2017
PICKINGS were better this year with several stocks performing much better
than expected mdash surprising even the analysts some of whom were rewarded
for choosing to retain a ldquobuyrdquo call against consensus
After three straight years of annual declines at the FBM KLCI (something that
has only happened once in the past four decades) the bellwether index mdash
which rose by as much as 94 to 179675 points on June 16 mdash closed at
174663 points on Dec 20 mdash up 64 from the start of the year The broader
FBM Emas Index meanwhile was 976 higher year to date at 1258559
points last Wednesday
The winners in the 12th edition of The Edgersquos Best Call Awards for 2017 were
selected from 90 recommendations for 66 stocks received from 16 research
houses
Last year we received 86 nominations for 75 stocks from 14 outts Most
nominations were from heads of research and the analysts themselves
others being fund managers and other analysts for their fellow colleagues
The winners include those who rightly stuck their neck out by calling an
outright ldquosellrdquo (instead of just whispering it to clients) and were proved right
We were tempted to include more names as there were several other good
calls but we decided to stop at 17 for 2017
Like last year we made some allowances for calls made in 2016 that proved
right in 2017 This yearrsquos list of 17 winners are our best-eort attempt to
recognise good fundamental stock analysis and its importance in making
investment decisions based on submissions and publicly available data
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 326
Feedback on the methodology and winners is welcome at
bestcallsbizedgecom Feedback is also welcome on whether you would like
The Edge to have a fund managersrsquo poll on their best analysts and
recommendations
With that here are this yearrsquos winners in no particular order Congratulations
to the winners To the good stock pickers who slipped under our radar keep
up the good work Merry Christmas and a Happy New Year
RHB Research Institute former analyst Ng Sem Guan and analyst
Muhammad Syaq Mohd Salamrsquos call on Press Metal Aluminium Holdings
Bhd
By the time Press Metal was included as an FBM KLCI constituent on Dec 18
the largest integrated aluminium producer in Southeast Asia already had a
market capitalisation of close to RM20 billion It may be hard to imagine that
the stock just crossed RM1 billion market capitalisation barely ve years ago
in early 2013 By end-2016 its market capitalisation had risen to nearly RM6
billion double what it was the year before
When RHBrsquos former analyst Ng Sem Guan started coverage in June 2013 the
comparable (adjusted) share price was 397 sen Four-and-a-half years on the
stock is up a whopping 1154 to RM498 as at Dec 15 Total returns are six
times higher with Press Metal paying dividends every quarter for the past
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 426
three years up from twice a year before that Bloomberg data shows It also
had a two-for-one stock split and 40 bonus issue in 2016 Ng was also
acknowledged for his early ldquobuyrdquo call on Press Metal last year
According to Bloomberg data RHBrsquos Muhammad Syaq Mohd Salam
reiterated a ldquobuyrdquo recommendation when assuming coverage on Aug 17 this
year In a note dated Nov 1 he told clients that Press Metalrsquos size (RM16 billion
marketcap) meant that it could be included as an index constituent about a
month before the inclusion was announced
Press Metal which ran 113 from the start of the year to RM332 on Aug 17
appreciated another 50 over four months to RM498 on Dec 15 mdash bringing
total gains for the year to 213
At the time of writing RHB still had a ldquobuyrdquo recommendation and its RM530
target price mdash the highest among four analysts tracking the stock mdash implying
only 64 upside potential Risks to his forecast include a sharply weaker
greenback lower aluminium prices and unexpected production disruptions
A notable mention also goes to Kenanga Researchrsquos Voon Yee Ping who also
rightly stuck with a ldquobuyrdquo recommendation this year despite the strong price
gains Two other houses had ldquoneutralrdquo calls from April and August when the
stock was below RM350 Bloomberg data show
It remains to be seen if Press Metal will provide reasons for further
bullishness but the stock did reach RM547 intraday on Dec 4 although its
highest close so far was RM5184 on Nov 6
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 526
Nomura Researchrsquos Tushar Mohatarsquos call on Sunway Construction Group
Bhd
In a nutshell this is a winning call because the stock price ran shortly after
an upgrade to ldquobuyrdquo from ldquoholdrdquo But therersquos more depth than that
When Nomura Researchrsquos Tushar Mohata upgraded Sunway Construction
Group Bhd to ldquobuyrdquo on March 9 this year the share price rose 45 within
nine months to as high as RM241 on Dec 11 before retracing to RM238 on
Dec 15 Before the upgrade the stock price had largely been hovering
between RM150 and RM160 for about a year
His decision to upgrade Sunway Construction resulted from what he calls an
ldquoearnings-cash ow matrixrdquo as well as ldquothe law of diminishing returnsrdquo at a
time when most construction companies were already sitting on record-
sized order books A high base means small and medium-sized project
awards could mean very little incremental impact on future earnings and
share price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 626
That came after he revisited Nomurarsquos investment thesis for the Malaysian
construction sector While net prot remains the best long-term predictor for
stock price returns he told clients that the cash conversion of reported
earnings was becoming equally important due to rising gearing in a weak
property market The latter was the reason Tushar preferred pure-play
Malaysian contractors like Sunway Construction to diversied contractors
with exposure to property development
According to him Sunway Constructionrsquos earnings ldquofairly accurately track its
actual cash ows reective of its healthy margins and timely collection from
customersrdquo Thatrsquos a better position than companies which may have good
reported earnings but subpar conversion of it to operating cash ow due to
reasons such as non-cash earnings stream and growing working capital
which leads to higher gearing (thus burdening the balance sheet)
A notable mention also goes to Macquarie Researchrsquos Aiman Mohamad who
has had a ldquobuyrdquo call on Sunway Construction since at least March 2016
according to Bloomberg data Both Nomura and Macquarie currently have
the streetrsquos most bullish target price of RM280
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 726
An Hwang Capital Researchrsquos Kevin Lowrsquos call on Inari Amertron Bhd
Inari Amertron saw its stock price more than double this year An Hwangrsquos
Kevin Low started coverage as early as April 23 2013 when the comparable
stock price was 16 sen
He continues to like Inari calling it a ldquopreferred pickrdquo for the local technology
sector due to its ldquosolid growth in the RF segment given new drivers
including the Osram IRIS IR chip and its data server chip business from
Broadcomrdquo Key downside risks to his recommendation include a slowdown
in global demand for smart devices rapid average sale price (ASP) erosion
loss of customer base and the introduction of new technologies that may
render Inarirsquos products obsolete
According to Bloomberg data there is currently one ldquofully valuedrdquo call from
DBS Vickers with a RM225 target price Six analysts have ldquoholdrdquo or ldquoneutralrdquo
calls on Inari while the remaining six (including Low) recommend as ldquobuyrdquo
Time will tell who will prove prescient this time next year
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 826
This year a notable mention also goes to Macquarie Researchrsquos Anand
Pathmakanthan as clients would have beneted from his upgrade from
ldquoneutralrdquo to ldquooutperformrdquo in January when the stock price was RM160
Similarly RHB Researchrsquos Kong Heng Siong upgraded his call to ldquobuyrdquo when
the stock price was RM190 on March 22 Credit Suissersquos Danny Chan who
started coverage with an ldquooutperformrdquo call on July 11 when the stock was at
RM213 apiece also deserves a notable mention
An Hwang Capital Researchrsquos Kevin Lowrsquos call on KESM Industries Bhd
When starting coverage on KESM Industries on Aug 15 2016 An Hwangrsquos
Kevin Low told clients the company was a good proxy for the stable and
growing automotive semiconductor segment going by growing demand for
electronics for vehicles from safety to infotainment and autonomous
vehicles In just four months the stock has gained 34 mdash making him a
winner last year
He continues his winning ways this year at RM1950 on Dec 15 KESM shares
had doubled from the start of the year mdash and therersquos still upside if Lowrsquos
RM2180 target price is to be believed In fact KESM reached as high as
RM2050 intraday on Nov 23 before closing at RM2040
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 926
ldquoWe favour KESM for its exposure to the automotive space an area we
believe will continue to benet from structural growth underpinned by
increased semiconductor content in automobiles as well as growth in
demand for hybrid and autonomous vehiclesrdquo Low wrote in a Dec 18 note
reiterating his ldquobuyrdquo call
In an earlier note dated Nov 24 he told clients that KESMrsquos revenue and
earnings momentum ldquoremained strongrdquo underpinned by aggressive capital
expenditure into the automotive burn and test business He also noted that
1QFY72018 net prot would have been stronger if not for higher eective tax
rate of 155 versus 104 in 1QFY72017 Key downside risks include a loss of
customers and a reduction in the outsourcing opportunities as customers
increase their in-house burn-in and test function he says
Two other analysts have since started coverage on KESM this year according
to Bloomberg data CIMB Research has an ldquoaddrdquo rating and RM22 target price
while Kenanga Research is going against consensus with an ldquounderperformrdquo
call and RM1840 target price which is below open market prices It would be
interesting to see if Low will make it a hat trick next year
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Econpile
Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1026
Econpile Holdings shares have gained as much as 776 this year closing at
RM3195 on Dec 4 Even measured from this yearrsquos cut-o date of Dec 15
gains came to an enviable 73
In a Dec 29 note last year KAFrsquos Mak Hoy Ken retained his ldquobuyrdquo call He sees
Econpile as the research housersquos ldquotop small-cap construction pick for its
burgeoning order book sustained job momentum and attractive marginsrdquo
The civil engineering contractorrsquos market capitalisation breached RM1 billion
in late October 2016
Back then he also told clients that more strategic opportunities could stem
from Econpilersquos 6040 tie-up with China Communications Construction Co
(M) Sdn Bhd (CCCC) for a substructure and ancillary works package for
SUKE highway as it was a strong endorsement of Econpilersquos position as a
piling specialist in Malaysia
At the time of writing Makrsquos target price of RM333 implies only 7 upside
potential from RM311 on Dec 15 It remains to be seen just how much comfort
should be drawn from his Oct 20 note where he said Econpilersquos earnings
visibility ldquoremains solid backed by a healthy outstanding order book of
RM12 billion or around 21 times its construction revenuerdquo
Meanwhile Macquarie Researchrsquos Aiman Mohamad who started coverage
with an ldquooutperformrdquo call on Feb 23 this year when the stock price was at
RM207 apiece also deserves a notable mention with Econpile shares up
502 to RM311 apiece in about 10 months Macquarie has a RM350 target
price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1126
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Ann Joo
Resources Bhd
With shares of Ann Joo Resources Bhd up 83 to RM380 as at Dec 15 this
year investors who bought the stock at the start of the year would be sitting
on good portfolio gains KAFrsquos Mak Hoy Ken maintained a ldquobuyrdquo on the stock
with a higher target price of RM242 (from RM238) on Jan 5 The stock
dipped to RM217 mdash its lowest this year mdash on Jan 3 At its peak it closed as
high as RM391 on Nov 9
Back then Ann Joorsquos share price had just gained 224 in 2016 and there were
doubts in the market on whether the stock would continue to perform
especially with the direction of international steel prices being mixed at best
Mak was held to his belief that there was more upside to Ann Joo Among
other things he argued that domestic steel prices would see support from
provisional safeguard duties on imported bars and wire rods With the
counter trading at only eight to 10 times forward earnings multiples he was
convinced it was a cheaper alternative play to the Malaysian infrastructure
supercycle There is also a potential lift from a continued recovery in Chinese
steel prices as capacity cuts in that country gathers pace Chinese steel prices
have been on a general upward trend this year as the countryrsquos supply-side
reforms took eect
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1226
A notable mention goes to Maybank Investment Bank Researchrsquos Lee Yen
Ling who upgraded her call for Ann Joo on Aug 16 2016 when the stock
price was at RM172
At the time of writing Maybankrsquos Lee has since downgraded her call to
ldquoholdrdquo with a RM385 target price while KAFrsquos Mak continues to call a ldquobuyrdquo
with a RM410 target price Watch this space
Kenanga Researchrsquos Desmond Chongrsquos call on Malaysian Pacic Industries
Bhd
It was almost as if he had a crystal ball When Kenanga Researchrsquos Desmond
Chong upgraded his call on Malaysian Pacic Industries (MPI) from ldquomarket
performrdquo to ldquobuyrdquo on Jan 27 the stock price ran up 79 from RM797 to
RM14291 on Oct 11
Helping the gains were the better sales that MPI was seeing of its automotive
electronics and power management chips as well as improved eciency He
subsequently raised his target price three more times to as high as RM1570
on Aug 18
Thatrsquos not all When Chong turned cautious on its outlook and downgraded
MPI to ldquomarket performrdquo or a neutral stance on Nov 10 the stock price
retraced 12 fromRM1364 to RM12 on Dec 15
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1326
In a Nov 10 note issued following a brieng he highlighted the ldquomounting
pressure on marginsrdquo coupled with a potential setback from a longer
gestation period for its product rationalisation exercise
A special mention also goes to KAF Seagroatt amp Campbell Securitiesrsquo Shaq
Kadir and TA Securitiesrsquos Paul Yap who earlier had ldquobuyrdquo calls that also
proved right Kenangarsquos call got more points as MPI shares ran shortly after
his upgrade compared with the two existing ldquobuyrdquo calls
All three currently have ldquoholdrdquo calls on MPI in line with consensus At the
time of writing An Hwang Capital Research had the only ldquosellrdquo on the
stock with a target price of RM12 according to Bloomberg data Will he have
the last laugh next year
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Kerjaya Prospek Group
Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
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Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
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UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1626
Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1726
When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1826
2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1926
Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2026
product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
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A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
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httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
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This article rst appeared in Capital The Edge Malaysia Weekly on December 25 2017 - December
31 2017
PICKINGS were better this year with several stocks performing much better
than expected mdash surprising even the analysts some of whom were rewarded
for choosing to retain a ldquobuyrdquo call against consensus
After three straight years of annual declines at the FBM KLCI (something that
has only happened once in the past four decades) the bellwether index mdash
which rose by as much as 94 to 179675 points on June 16 mdash closed at
174663 points on Dec 20 mdash up 64 from the start of the year The broader
FBM Emas Index meanwhile was 976 higher year to date at 1258559
points last Wednesday
The winners in the 12th edition of The Edgersquos Best Call Awards for 2017 were
selected from 90 recommendations for 66 stocks received from 16 research
houses
Last year we received 86 nominations for 75 stocks from 14 outts Most
nominations were from heads of research and the analysts themselves
others being fund managers and other analysts for their fellow colleagues
The winners include those who rightly stuck their neck out by calling an
outright ldquosellrdquo (instead of just whispering it to clients) and were proved right
We were tempted to include more names as there were several other good
calls but we decided to stop at 17 for 2017
Like last year we made some allowances for calls made in 2016 that proved
right in 2017 This yearrsquos list of 17 winners are our best-eort attempt to
recognise good fundamental stock analysis and its importance in making
investment decisions based on submissions and publicly available data
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 326
Feedback on the methodology and winners is welcome at
bestcallsbizedgecom Feedback is also welcome on whether you would like
The Edge to have a fund managersrsquo poll on their best analysts and
recommendations
With that here are this yearrsquos winners in no particular order Congratulations
to the winners To the good stock pickers who slipped under our radar keep
up the good work Merry Christmas and a Happy New Year
RHB Research Institute former analyst Ng Sem Guan and analyst
Muhammad Syaq Mohd Salamrsquos call on Press Metal Aluminium Holdings
Bhd
By the time Press Metal was included as an FBM KLCI constituent on Dec 18
the largest integrated aluminium producer in Southeast Asia already had a
market capitalisation of close to RM20 billion It may be hard to imagine that
the stock just crossed RM1 billion market capitalisation barely ve years ago
in early 2013 By end-2016 its market capitalisation had risen to nearly RM6
billion double what it was the year before
When RHBrsquos former analyst Ng Sem Guan started coverage in June 2013 the
comparable (adjusted) share price was 397 sen Four-and-a-half years on the
stock is up a whopping 1154 to RM498 as at Dec 15 Total returns are six
times higher with Press Metal paying dividends every quarter for the past
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
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three years up from twice a year before that Bloomberg data shows It also
had a two-for-one stock split and 40 bonus issue in 2016 Ng was also
acknowledged for his early ldquobuyrdquo call on Press Metal last year
According to Bloomberg data RHBrsquos Muhammad Syaq Mohd Salam
reiterated a ldquobuyrdquo recommendation when assuming coverage on Aug 17 this
year In a note dated Nov 1 he told clients that Press Metalrsquos size (RM16 billion
marketcap) meant that it could be included as an index constituent about a
month before the inclusion was announced
Press Metal which ran 113 from the start of the year to RM332 on Aug 17
appreciated another 50 over four months to RM498 on Dec 15 mdash bringing
total gains for the year to 213
At the time of writing RHB still had a ldquobuyrdquo recommendation and its RM530
target price mdash the highest among four analysts tracking the stock mdash implying
only 64 upside potential Risks to his forecast include a sharply weaker
greenback lower aluminium prices and unexpected production disruptions
A notable mention also goes to Kenanga Researchrsquos Voon Yee Ping who also
rightly stuck with a ldquobuyrdquo recommendation this year despite the strong price
gains Two other houses had ldquoneutralrdquo calls from April and August when the
stock was below RM350 Bloomberg data show
It remains to be seen if Press Metal will provide reasons for further
bullishness but the stock did reach RM547 intraday on Dec 4 although its
highest close so far was RM5184 on Nov 6
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Nomura Researchrsquos Tushar Mohatarsquos call on Sunway Construction Group
Bhd
In a nutshell this is a winning call because the stock price ran shortly after
an upgrade to ldquobuyrdquo from ldquoholdrdquo But therersquos more depth than that
When Nomura Researchrsquos Tushar Mohata upgraded Sunway Construction
Group Bhd to ldquobuyrdquo on March 9 this year the share price rose 45 within
nine months to as high as RM241 on Dec 11 before retracing to RM238 on
Dec 15 Before the upgrade the stock price had largely been hovering
between RM150 and RM160 for about a year
His decision to upgrade Sunway Construction resulted from what he calls an
ldquoearnings-cash ow matrixrdquo as well as ldquothe law of diminishing returnsrdquo at a
time when most construction companies were already sitting on record-
sized order books A high base means small and medium-sized project
awards could mean very little incremental impact on future earnings and
share price
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That came after he revisited Nomurarsquos investment thesis for the Malaysian
construction sector While net prot remains the best long-term predictor for
stock price returns he told clients that the cash conversion of reported
earnings was becoming equally important due to rising gearing in a weak
property market The latter was the reason Tushar preferred pure-play
Malaysian contractors like Sunway Construction to diversied contractors
with exposure to property development
According to him Sunway Constructionrsquos earnings ldquofairly accurately track its
actual cash ows reective of its healthy margins and timely collection from
customersrdquo Thatrsquos a better position than companies which may have good
reported earnings but subpar conversion of it to operating cash ow due to
reasons such as non-cash earnings stream and growing working capital
which leads to higher gearing (thus burdening the balance sheet)
A notable mention also goes to Macquarie Researchrsquos Aiman Mohamad who
has had a ldquobuyrdquo call on Sunway Construction since at least March 2016
according to Bloomberg data Both Nomura and Macquarie currently have
the streetrsquos most bullish target price of RM280
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An Hwang Capital Researchrsquos Kevin Lowrsquos call on Inari Amertron Bhd
Inari Amertron saw its stock price more than double this year An Hwangrsquos
Kevin Low started coverage as early as April 23 2013 when the comparable
stock price was 16 sen
He continues to like Inari calling it a ldquopreferred pickrdquo for the local technology
sector due to its ldquosolid growth in the RF segment given new drivers
including the Osram IRIS IR chip and its data server chip business from
Broadcomrdquo Key downside risks to his recommendation include a slowdown
in global demand for smart devices rapid average sale price (ASP) erosion
loss of customer base and the introduction of new technologies that may
render Inarirsquos products obsolete
According to Bloomberg data there is currently one ldquofully valuedrdquo call from
DBS Vickers with a RM225 target price Six analysts have ldquoholdrdquo or ldquoneutralrdquo
calls on Inari while the remaining six (including Low) recommend as ldquobuyrdquo
Time will tell who will prove prescient this time next year
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This year a notable mention also goes to Macquarie Researchrsquos Anand
Pathmakanthan as clients would have beneted from his upgrade from
ldquoneutralrdquo to ldquooutperformrdquo in January when the stock price was RM160
Similarly RHB Researchrsquos Kong Heng Siong upgraded his call to ldquobuyrdquo when
the stock price was RM190 on March 22 Credit Suissersquos Danny Chan who
started coverage with an ldquooutperformrdquo call on July 11 when the stock was at
RM213 apiece also deserves a notable mention
An Hwang Capital Researchrsquos Kevin Lowrsquos call on KESM Industries Bhd
When starting coverage on KESM Industries on Aug 15 2016 An Hwangrsquos
Kevin Low told clients the company was a good proxy for the stable and
growing automotive semiconductor segment going by growing demand for
electronics for vehicles from safety to infotainment and autonomous
vehicles In just four months the stock has gained 34 mdash making him a
winner last year
He continues his winning ways this year at RM1950 on Dec 15 KESM shares
had doubled from the start of the year mdash and therersquos still upside if Lowrsquos
RM2180 target price is to be believed In fact KESM reached as high as
RM2050 intraday on Nov 23 before closing at RM2040
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ldquoWe favour KESM for its exposure to the automotive space an area we
believe will continue to benet from structural growth underpinned by
increased semiconductor content in automobiles as well as growth in
demand for hybrid and autonomous vehiclesrdquo Low wrote in a Dec 18 note
reiterating his ldquobuyrdquo call
In an earlier note dated Nov 24 he told clients that KESMrsquos revenue and
earnings momentum ldquoremained strongrdquo underpinned by aggressive capital
expenditure into the automotive burn and test business He also noted that
1QFY72018 net prot would have been stronger if not for higher eective tax
rate of 155 versus 104 in 1QFY72017 Key downside risks include a loss of
customers and a reduction in the outsourcing opportunities as customers
increase their in-house burn-in and test function he says
Two other analysts have since started coverage on KESM this year according
to Bloomberg data CIMB Research has an ldquoaddrdquo rating and RM22 target price
while Kenanga Research is going against consensus with an ldquounderperformrdquo
call and RM1840 target price which is below open market prices It would be
interesting to see if Low will make it a hat trick next year
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Econpile
Holdings Bhd
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Econpile Holdings shares have gained as much as 776 this year closing at
RM3195 on Dec 4 Even measured from this yearrsquos cut-o date of Dec 15
gains came to an enviable 73
In a Dec 29 note last year KAFrsquos Mak Hoy Ken retained his ldquobuyrdquo call He sees
Econpile as the research housersquos ldquotop small-cap construction pick for its
burgeoning order book sustained job momentum and attractive marginsrdquo
The civil engineering contractorrsquos market capitalisation breached RM1 billion
in late October 2016
Back then he also told clients that more strategic opportunities could stem
from Econpilersquos 6040 tie-up with China Communications Construction Co
(M) Sdn Bhd (CCCC) for a substructure and ancillary works package for
SUKE highway as it was a strong endorsement of Econpilersquos position as a
piling specialist in Malaysia
At the time of writing Makrsquos target price of RM333 implies only 7 upside
potential from RM311 on Dec 15 It remains to be seen just how much comfort
should be drawn from his Oct 20 note where he said Econpilersquos earnings
visibility ldquoremains solid backed by a healthy outstanding order book of
RM12 billion or around 21 times its construction revenuerdquo
Meanwhile Macquarie Researchrsquos Aiman Mohamad who started coverage
with an ldquooutperformrdquo call on Feb 23 this year when the stock price was at
RM207 apiece also deserves a notable mention with Econpile shares up
502 to RM311 apiece in about 10 months Macquarie has a RM350 target
price
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KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Ann Joo
Resources Bhd
With shares of Ann Joo Resources Bhd up 83 to RM380 as at Dec 15 this
year investors who bought the stock at the start of the year would be sitting
on good portfolio gains KAFrsquos Mak Hoy Ken maintained a ldquobuyrdquo on the stock
with a higher target price of RM242 (from RM238) on Jan 5 The stock
dipped to RM217 mdash its lowest this year mdash on Jan 3 At its peak it closed as
high as RM391 on Nov 9
Back then Ann Joorsquos share price had just gained 224 in 2016 and there were
doubts in the market on whether the stock would continue to perform
especially with the direction of international steel prices being mixed at best
Mak was held to his belief that there was more upside to Ann Joo Among
other things he argued that domestic steel prices would see support from
provisional safeguard duties on imported bars and wire rods With the
counter trading at only eight to 10 times forward earnings multiples he was
convinced it was a cheaper alternative play to the Malaysian infrastructure
supercycle There is also a potential lift from a continued recovery in Chinese
steel prices as capacity cuts in that country gathers pace Chinese steel prices
have been on a general upward trend this year as the countryrsquos supply-side
reforms took eect
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A notable mention goes to Maybank Investment Bank Researchrsquos Lee Yen
Ling who upgraded her call for Ann Joo on Aug 16 2016 when the stock
price was at RM172
At the time of writing Maybankrsquos Lee has since downgraded her call to
ldquoholdrdquo with a RM385 target price while KAFrsquos Mak continues to call a ldquobuyrdquo
with a RM410 target price Watch this space
Kenanga Researchrsquos Desmond Chongrsquos call on Malaysian Pacic Industries
Bhd
It was almost as if he had a crystal ball When Kenanga Researchrsquos Desmond
Chong upgraded his call on Malaysian Pacic Industries (MPI) from ldquomarket
performrdquo to ldquobuyrdquo on Jan 27 the stock price ran up 79 from RM797 to
RM14291 on Oct 11
Helping the gains were the better sales that MPI was seeing of its automotive
electronics and power management chips as well as improved eciency He
subsequently raised his target price three more times to as high as RM1570
on Aug 18
Thatrsquos not all When Chong turned cautious on its outlook and downgraded
MPI to ldquomarket performrdquo or a neutral stance on Nov 10 the stock price
retraced 12 fromRM1364 to RM12 on Dec 15
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In a Nov 10 note issued following a brieng he highlighted the ldquomounting
pressure on marginsrdquo coupled with a potential setback from a longer
gestation period for its product rationalisation exercise
A special mention also goes to KAF Seagroatt amp Campbell Securitiesrsquo Shaq
Kadir and TA Securitiesrsquos Paul Yap who earlier had ldquobuyrdquo calls that also
proved right Kenangarsquos call got more points as MPI shares ran shortly after
his upgrade compared with the two existing ldquobuyrdquo calls
All three currently have ldquoholdrdquo calls on MPI in line with consensus At the
time of writing An Hwang Capital Research had the only ldquosellrdquo on the
stock with a target price of RM12 according to Bloomberg data Will he have
the last laugh next year
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Kerjaya Prospek Group
Bhd
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Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
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UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
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Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
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When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
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2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
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Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
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product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
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and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
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Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
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A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
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Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
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At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
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price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
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Feedback on the methodology and winners is welcome at
bestcallsbizedgecom Feedback is also welcome on whether you would like
The Edge to have a fund managersrsquo poll on their best analysts and
recommendations
With that here are this yearrsquos winners in no particular order Congratulations
to the winners To the good stock pickers who slipped under our radar keep
up the good work Merry Christmas and a Happy New Year
RHB Research Institute former analyst Ng Sem Guan and analyst
Muhammad Syaq Mohd Salamrsquos call on Press Metal Aluminium Holdings
Bhd
By the time Press Metal was included as an FBM KLCI constituent on Dec 18
the largest integrated aluminium producer in Southeast Asia already had a
market capitalisation of close to RM20 billion It may be hard to imagine that
the stock just crossed RM1 billion market capitalisation barely ve years ago
in early 2013 By end-2016 its market capitalisation had risen to nearly RM6
billion double what it was the year before
When RHBrsquos former analyst Ng Sem Guan started coverage in June 2013 the
comparable (adjusted) share price was 397 sen Four-and-a-half years on the
stock is up a whopping 1154 to RM498 as at Dec 15 Total returns are six
times higher with Press Metal paying dividends every quarter for the past
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three years up from twice a year before that Bloomberg data shows It also
had a two-for-one stock split and 40 bonus issue in 2016 Ng was also
acknowledged for his early ldquobuyrdquo call on Press Metal last year
According to Bloomberg data RHBrsquos Muhammad Syaq Mohd Salam
reiterated a ldquobuyrdquo recommendation when assuming coverage on Aug 17 this
year In a note dated Nov 1 he told clients that Press Metalrsquos size (RM16 billion
marketcap) meant that it could be included as an index constituent about a
month before the inclusion was announced
Press Metal which ran 113 from the start of the year to RM332 on Aug 17
appreciated another 50 over four months to RM498 on Dec 15 mdash bringing
total gains for the year to 213
At the time of writing RHB still had a ldquobuyrdquo recommendation and its RM530
target price mdash the highest among four analysts tracking the stock mdash implying
only 64 upside potential Risks to his forecast include a sharply weaker
greenback lower aluminium prices and unexpected production disruptions
A notable mention also goes to Kenanga Researchrsquos Voon Yee Ping who also
rightly stuck with a ldquobuyrdquo recommendation this year despite the strong price
gains Two other houses had ldquoneutralrdquo calls from April and August when the
stock was below RM350 Bloomberg data show
It remains to be seen if Press Metal will provide reasons for further
bullishness but the stock did reach RM547 intraday on Dec 4 although its
highest close so far was RM5184 on Nov 6
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Nomura Researchrsquos Tushar Mohatarsquos call on Sunway Construction Group
Bhd
In a nutshell this is a winning call because the stock price ran shortly after
an upgrade to ldquobuyrdquo from ldquoholdrdquo But therersquos more depth than that
When Nomura Researchrsquos Tushar Mohata upgraded Sunway Construction
Group Bhd to ldquobuyrdquo on March 9 this year the share price rose 45 within
nine months to as high as RM241 on Dec 11 before retracing to RM238 on
Dec 15 Before the upgrade the stock price had largely been hovering
between RM150 and RM160 for about a year
His decision to upgrade Sunway Construction resulted from what he calls an
ldquoearnings-cash ow matrixrdquo as well as ldquothe law of diminishing returnsrdquo at a
time when most construction companies were already sitting on record-
sized order books A high base means small and medium-sized project
awards could mean very little incremental impact on future earnings and
share price
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That came after he revisited Nomurarsquos investment thesis for the Malaysian
construction sector While net prot remains the best long-term predictor for
stock price returns he told clients that the cash conversion of reported
earnings was becoming equally important due to rising gearing in a weak
property market The latter was the reason Tushar preferred pure-play
Malaysian contractors like Sunway Construction to diversied contractors
with exposure to property development
According to him Sunway Constructionrsquos earnings ldquofairly accurately track its
actual cash ows reective of its healthy margins and timely collection from
customersrdquo Thatrsquos a better position than companies which may have good
reported earnings but subpar conversion of it to operating cash ow due to
reasons such as non-cash earnings stream and growing working capital
which leads to higher gearing (thus burdening the balance sheet)
A notable mention also goes to Macquarie Researchrsquos Aiman Mohamad who
has had a ldquobuyrdquo call on Sunway Construction since at least March 2016
according to Bloomberg data Both Nomura and Macquarie currently have
the streetrsquos most bullish target price of RM280
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An Hwang Capital Researchrsquos Kevin Lowrsquos call on Inari Amertron Bhd
Inari Amertron saw its stock price more than double this year An Hwangrsquos
Kevin Low started coverage as early as April 23 2013 when the comparable
stock price was 16 sen
He continues to like Inari calling it a ldquopreferred pickrdquo for the local technology
sector due to its ldquosolid growth in the RF segment given new drivers
including the Osram IRIS IR chip and its data server chip business from
Broadcomrdquo Key downside risks to his recommendation include a slowdown
in global demand for smart devices rapid average sale price (ASP) erosion
loss of customer base and the introduction of new technologies that may
render Inarirsquos products obsolete
According to Bloomberg data there is currently one ldquofully valuedrdquo call from
DBS Vickers with a RM225 target price Six analysts have ldquoholdrdquo or ldquoneutralrdquo
calls on Inari while the remaining six (including Low) recommend as ldquobuyrdquo
Time will tell who will prove prescient this time next year
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This year a notable mention also goes to Macquarie Researchrsquos Anand
Pathmakanthan as clients would have beneted from his upgrade from
ldquoneutralrdquo to ldquooutperformrdquo in January when the stock price was RM160
Similarly RHB Researchrsquos Kong Heng Siong upgraded his call to ldquobuyrdquo when
the stock price was RM190 on March 22 Credit Suissersquos Danny Chan who
started coverage with an ldquooutperformrdquo call on July 11 when the stock was at
RM213 apiece also deserves a notable mention
An Hwang Capital Researchrsquos Kevin Lowrsquos call on KESM Industries Bhd
When starting coverage on KESM Industries on Aug 15 2016 An Hwangrsquos
Kevin Low told clients the company was a good proxy for the stable and
growing automotive semiconductor segment going by growing demand for
electronics for vehicles from safety to infotainment and autonomous
vehicles In just four months the stock has gained 34 mdash making him a
winner last year
He continues his winning ways this year at RM1950 on Dec 15 KESM shares
had doubled from the start of the year mdash and therersquos still upside if Lowrsquos
RM2180 target price is to be believed In fact KESM reached as high as
RM2050 intraday on Nov 23 before closing at RM2040
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ldquoWe favour KESM for its exposure to the automotive space an area we
believe will continue to benet from structural growth underpinned by
increased semiconductor content in automobiles as well as growth in
demand for hybrid and autonomous vehiclesrdquo Low wrote in a Dec 18 note
reiterating his ldquobuyrdquo call
In an earlier note dated Nov 24 he told clients that KESMrsquos revenue and
earnings momentum ldquoremained strongrdquo underpinned by aggressive capital
expenditure into the automotive burn and test business He also noted that
1QFY72018 net prot would have been stronger if not for higher eective tax
rate of 155 versus 104 in 1QFY72017 Key downside risks include a loss of
customers and a reduction in the outsourcing opportunities as customers
increase their in-house burn-in and test function he says
Two other analysts have since started coverage on KESM this year according
to Bloomberg data CIMB Research has an ldquoaddrdquo rating and RM22 target price
while Kenanga Research is going against consensus with an ldquounderperformrdquo
call and RM1840 target price which is below open market prices It would be
interesting to see if Low will make it a hat trick next year
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Econpile
Holdings Bhd
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Econpile Holdings shares have gained as much as 776 this year closing at
RM3195 on Dec 4 Even measured from this yearrsquos cut-o date of Dec 15
gains came to an enviable 73
In a Dec 29 note last year KAFrsquos Mak Hoy Ken retained his ldquobuyrdquo call He sees
Econpile as the research housersquos ldquotop small-cap construction pick for its
burgeoning order book sustained job momentum and attractive marginsrdquo
The civil engineering contractorrsquos market capitalisation breached RM1 billion
in late October 2016
Back then he also told clients that more strategic opportunities could stem
from Econpilersquos 6040 tie-up with China Communications Construction Co
(M) Sdn Bhd (CCCC) for a substructure and ancillary works package for
SUKE highway as it was a strong endorsement of Econpilersquos position as a
piling specialist in Malaysia
At the time of writing Makrsquos target price of RM333 implies only 7 upside
potential from RM311 on Dec 15 It remains to be seen just how much comfort
should be drawn from his Oct 20 note where he said Econpilersquos earnings
visibility ldquoremains solid backed by a healthy outstanding order book of
RM12 billion or around 21 times its construction revenuerdquo
Meanwhile Macquarie Researchrsquos Aiman Mohamad who started coverage
with an ldquooutperformrdquo call on Feb 23 this year when the stock price was at
RM207 apiece also deserves a notable mention with Econpile shares up
502 to RM311 apiece in about 10 months Macquarie has a RM350 target
price
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KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Ann Joo
Resources Bhd
With shares of Ann Joo Resources Bhd up 83 to RM380 as at Dec 15 this
year investors who bought the stock at the start of the year would be sitting
on good portfolio gains KAFrsquos Mak Hoy Ken maintained a ldquobuyrdquo on the stock
with a higher target price of RM242 (from RM238) on Jan 5 The stock
dipped to RM217 mdash its lowest this year mdash on Jan 3 At its peak it closed as
high as RM391 on Nov 9
Back then Ann Joorsquos share price had just gained 224 in 2016 and there were
doubts in the market on whether the stock would continue to perform
especially with the direction of international steel prices being mixed at best
Mak was held to his belief that there was more upside to Ann Joo Among
other things he argued that domestic steel prices would see support from
provisional safeguard duties on imported bars and wire rods With the
counter trading at only eight to 10 times forward earnings multiples he was
convinced it was a cheaper alternative play to the Malaysian infrastructure
supercycle There is also a potential lift from a continued recovery in Chinese
steel prices as capacity cuts in that country gathers pace Chinese steel prices
have been on a general upward trend this year as the countryrsquos supply-side
reforms took eect
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A notable mention goes to Maybank Investment Bank Researchrsquos Lee Yen
Ling who upgraded her call for Ann Joo on Aug 16 2016 when the stock
price was at RM172
At the time of writing Maybankrsquos Lee has since downgraded her call to
ldquoholdrdquo with a RM385 target price while KAFrsquos Mak continues to call a ldquobuyrdquo
with a RM410 target price Watch this space
Kenanga Researchrsquos Desmond Chongrsquos call on Malaysian Pacic Industries
Bhd
It was almost as if he had a crystal ball When Kenanga Researchrsquos Desmond
Chong upgraded his call on Malaysian Pacic Industries (MPI) from ldquomarket
performrdquo to ldquobuyrdquo on Jan 27 the stock price ran up 79 from RM797 to
RM14291 on Oct 11
Helping the gains were the better sales that MPI was seeing of its automotive
electronics and power management chips as well as improved eciency He
subsequently raised his target price three more times to as high as RM1570
on Aug 18
Thatrsquos not all When Chong turned cautious on its outlook and downgraded
MPI to ldquomarket performrdquo or a neutral stance on Nov 10 the stock price
retraced 12 fromRM1364 to RM12 on Dec 15
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In a Nov 10 note issued following a brieng he highlighted the ldquomounting
pressure on marginsrdquo coupled with a potential setback from a longer
gestation period for its product rationalisation exercise
A special mention also goes to KAF Seagroatt amp Campbell Securitiesrsquo Shaq
Kadir and TA Securitiesrsquos Paul Yap who earlier had ldquobuyrdquo calls that also
proved right Kenangarsquos call got more points as MPI shares ran shortly after
his upgrade compared with the two existing ldquobuyrdquo calls
All three currently have ldquoholdrdquo calls on MPI in line with consensus At the
time of writing An Hwang Capital Research had the only ldquosellrdquo on the
stock with a target price of RM12 according to Bloomberg data Will he have
the last laugh next year
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Kerjaya Prospek Group
Bhd
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Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
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UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
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Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
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When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
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2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
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Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
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product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
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and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
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Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
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A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
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Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
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At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
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price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
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three years up from twice a year before that Bloomberg data shows It also
had a two-for-one stock split and 40 bonus issue in 2016 Ng was also
acknowledged for his early ldquobuyrdquo call on Press Metal last year
According to Bloomberg data RHBrsquos Muhammad Syaq Mohd Salam
reiterated a ldquobuyrdquo recommendation when assuming coverage on Aug 17 this
year In a note dated Nov 1 he told clients that Press Metalrsquos size (RM16 billion
marketcap) meant that it could be included as an index constituent about a
month before the inclusion was announced
Press Metal which ran 113 from the start of the year to RM332 on Aug 17
appreciated another 50 over four months to RM498 on Dec 15 mdash bringing
total gains for the year to 213
At the time of writing RHB still had a ldquobuyrdquo recommendation and its RM530
target price mdash the highest among four analysts tracking the stock mdash implying
only 64 upside potential Risks to his forecast include a sharply weaker
greenback lower aluminium prices and unexpected production disruptions
A notable mention also goes to Kenanga Researchrsquos Voon Yee Ping who also
rightly stuck with a ldquobuyrdquo recommendation this year despite the strong price
gains Two other houses had ldquoneutralrdquo calls from April and August when the
stock was below RM350 Bloomberg data show
It remains to be seen if Press Metal will provide reasons for further
bullishness but the stock did reach RM547 intraday on Dec 4 although its
highest close so far was RM5184 on Nov 6
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Nomura Researchrsquos Tushar Mohatarsquos call on Sunway Construction Group
Bhd
In a nutshell this is a winning call because the stock price ran shortly after
an upgrade to ldquobuyrdquo from ldquoholdrdquo But therersquos more depth than that
When Nomura Researchrsquos Tushar Mohata upgraded Sunway Construction
Group Bhd to ldquobuyrdquo on March 9 this year the share price rose 45 within
nine months to as high as RM241 on Dec 11 before retracing to RM238 on
Dec 15 Before the upgrade the stock price had largely been hovering
between RM150 and RM160 for about a year
His decision to upgrade Sunway Construction resulted from what he calls an
ldquoearnings-cash ow matrixrdquo as well as ldquothe law of diminishing returnsrdquo at a
time when most construction companies were already sitting on record-
sized order books A high base means small and medium-sized project
awards could mean very little incremental impact on future earnings and
share price
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That came after he revisited Nomurarsquos investment thesis for the Malaysian
construction sector While net prot remains the best long-term predictor for
stock price returns he told clients that the cash conversion of reported
earnings was becoming equally important due to rising gearing in a weak
property market The latter was the reason Tushar preferred pure-play
Malaysian contractors like Sunway Construction to diversied contractors
with exposure to property development
According to him Sunway Constructionrsquos earnings ldquofairly accurately track its
actual cash ows reective of its healthy margins and timely collection from
customersrdquo Thatrsquos a better position than companies which may have good
reported earnings but subpar conversion of it to operating cash ow due to
reasons such as non-cash earnings stream and growing working capital
which leads to higher gearing (thus burdening the balance sheet)
A notable mention also goes to Macquarie Researchrsquos Aiman Mohamad who
has had a ldquobuyrdquo call on Sunway Construction since at least March 2016
according to Bloomberg data Both Nomura and Macquarie currently have
the streetrsquos most bullish target price of RM280
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An Hwang Capital Researchrsquos Kevin Lowrsquos call on Inari Amertron Bhd
Inari Amertron saw its stock price more than double this year An Hwangrsquos
Kevin Low started coverage as early as April 23 2013 when the comparable
stock price was 16 sen
He continues to like Inari calling it a ldquopreferred pickrdquo for the local technology
sector due to its ldquosolid growth in the RF segment given new drivers
including the Osram IRIS IR chip and its data server chip business from
Broadcomrdquo Key downside risks to his recommendation include a slowdown
in global demand for smart devices rapid average sale price (ASP) erosion
loss of customer base and the introduction of new technologies that may
render Inarirsquos products obsolete
According to Bloomberg data there is currently one ldquofully valuedrdquo call from
DBS Vickers with a RM225 target price Six analysts have ldquoholdrdquo or ldquoneutralrdquo
calls on Inari while the remaining six (including Low) recommend as ldquobuyrdquo
Time will tell who will prove prescient this time next year
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This year a notable mention also goes to Macquarie Researchrsquos Anand
Pathmakanthan as clients would have beneted from his upgrade from
ldquoneutralrdquo to ldquooutperformrdquo in January when the stock price was RM160
Similarly RHB Researchrsquos Kong Heng Siong upgraded his call to ldquobuyrdquo when
the stock price was RM190 on March 22 Credit Suissersquos Danny Chan who
started coverage with an ldquooutperformrdquo call on July 11 when the stock was at
RM213 apiece also deserves a notable mention
An Hwang Capital Researchrsquos Kevin Lowrsquos call on KESM Industries Bhd
When starting coverage on KESM Industries on Aug 15 2016 An Hwangrsquos
Kevin Low told clients the company was a good proxy for the stable and
growing automotive semiconductor segment going by growing demand for
electronics for vehicles from safety to infotainment and autonomous
vehicles In just four months the stock has gained 34 mdash making him a
winner last year
He continues his winning ways this year at RM1950 on Dec 15 KESM shares
had doubled from the start of the year mdash and therersquos still upside if Lowrsquos
RM2180 target price is to be believed In fact KESM reached as high as
RM2050 intraday on Nov 23 before closing at RM2040
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ldquoWe favour KESM for its exposure to the automotive space an area we
believe will continue to benet from structural growth underpinned by
increased semiconductor content in automobiles as well as growth in
demand for hybrid and autonomous vehiclesrdquo Low wrote in a Dec 18 note
reiterating his ldquobuyrdquo call
In an earlier note dated Nov 24 he told clients that KESMrsquos revenue and
earnings momentum ldquoremained strongrdquo underpinned by aggressive capital
expenditure into the automotive burn and test business He also noted that
1QFY72018 net prot would have been stronger if not for higher eective tax
rate of 155 versus 104 in 1QFY72017 Key downside risks include a loss of
customers and a reduction in the outsourcing opportunities as customers
increase their in-house burn-in and test function he says
Two other analysts have since started coverage on KESM this year according
to Bloomberg data CIMB Research has an ldquoaddrdquo rating and RM22 target price
while Kenanga Research is going against consensus with an ldquounderperformrdquo
call and RM1840 target price which is below open market prices It would be
interesting to see if Low will make it a hat trick next year
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Econpile
Holdings Bhd
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Econpile Holdings shares have gained as much as 776 this year closing at
RM3195 on Dec 4 Even measured from this yearrsquos cut-o date of Dec 15
gains came to an enviable 73
In a Dec 29 note last year KAFrsquos Mak Hoy Ken retained his ldquobuyrdquo call He sees
Econpile as the research housersquos ldquotop small-cap construction pick for its
burgeoning order book sustained job momentum and attractive marginsrdquo
The civil engineering contractorrsquos market capitalisation breached RM1 billion
in late October 2016
Back then he also told clients that more strategic opportunities could stem
from Econpilersquos 6040 tie-up with China Communications Construction Co
(M) Sdn Bhd (CCCC) for a substructure and ancillary works package for
SUKE highway as it was a strong endorsement of Econpilersquos position as a
piling specialist in Malaysia
At the time of writing Makrsquos target price of RM333 implies only 7 upside
potential from RM311 on Dec 15 It remains to be seen just how much comfort
should be drawn from his Oct 20 note where he said Econpilersquos earnings
visibility ldquoremains solid backed by a healthy outstanding order book of
RM12 billion or around 21 times its construction revenuerdquo
Meanwhile Macquarie Researchrsquos Aiman Mohamad who started coverage
with an ldquooutperformrdquo call on Feb 23 this year when the stock price was at
RM207 apiece also deserves a notable mention with Econpile shares up
502 to RM311 apiece in about 10 months Macquarie has a RM350 target
price
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KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Ann Joo
Resources Bhd
With shares of Ann Joo Resources Bhd up 83 to RM380 as at Dec 15 this
year investors who bought the stock at the start of the year would be sitting
on good portfolio gains KAFrsquos Mak Hoy Ken maintained a ldquobuyrdquo on the stock
with a higher target price of RM242 (from RM238) on Jan 5 The stock
dipped to RM217 mdash its lowest this year mdash on Jan 3 At its peak it closed as
high as RM391 on Nov 9
Back then Ann Joorsquos share price had just gained 224 in 2016 and there were
doubts in the market on whether the stock would continue to perform
especially with the direction of international steel prices being mixed at best
Mak was held to his belief that there was more upside to Ann Joo Among
other things he argued that domestic steel prices would see support from
provisional safeguard duties on imported bars and wire rods With the
counter trading at only eight to 10 times forward earnings multiples he was
convinced it was a cheaper alternative play to the Malaysian infrastructure
supercycle There is also a potential lift from a continued recovery in Chinese
steel prices as capacity cuts in that country gathers pace Chinese steel prices
have been on a general upward trend this year as the countryrsquos supply-side
reforms took eect
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A notable mention goes to Maybank Investment Bank Researchrsquos Lee Yen
Ling who upgraded her call for Ann Joo on Aug 16 2016 when the stock
price was at RM172
At the time of writing Maybankrsquos Lee has since downgraded her call to
ldquoholdrdquo with a RM385 target price while KAFrsquos Mak continues to call a ldquobuyrdquo
with a RM410 target price Watch this space
Kenanga Researchrsquos Desmond Chongrsquos call on Malaysian Pacic Industries
Bhd
It was almost as if he had a crystal ball When Kenanga Researchrsquos Desmond
Chong upgraded his call on Malaysian Pacic Industries (MPI) from ldquomarket
performrdquo to ldquobuyrdquo on Jan 27 the stock price ran up 79 from RM797 to
RM14291 on Oct 11
Helping the gains were the better sales that MPI was seeing of its automotive
electronics and power management chips as well as improved eciency He
subsequently raised his target price three more times to as high as RM1570
on Aug 18
Thatrsquos not all When Chong turned cautious on its outlook and downgraded
MPI to ldquomarket performrdquo or a neutral stance on Nov 10 the stock price
retraced 12 fromRM1364 to RM12 on Dec 15
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In a Nov 10 note issued following a brieng he highlighted the ldquomounting
pressure on marginsrdquo coupled with a potential setback from a longer
gestation period for its product rationalisation exercise
A special mention also goes to KAF Seagroatt amp Campbell Securitiesrsquo Shaq
Kadir and TA Securitiesrsquos Paul Yap who earlier had ldquobuyrdquo calls that also
proved right Kenangarsquos call got more points as MPI shares ran shortly after
his upgrade compared with the two existing ldquobuyrdquo calls
All three currently have ldquoholdrdquo calls on MPI in line with consensus At the
time of writing An Hwang Capital Research had the only ldquosellrdquo on the
stock with a target price of RM12 according to Bloomberg data Will he have
the last laugh next year
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Kerjaya Prospek Group
Bhd
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Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
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UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
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Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
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When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
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2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
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Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
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product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
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and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
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Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
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A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
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Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
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At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
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price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
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Nomura Researchrsquos Tushar Mohatarsquos call on Sunway Construction Group
Bhd
In a nutshell this is a winning call because the stock price ran shortly after
an upgrade to ldquobuyrdquo from ldquoholdrdquo But therersquos more depth than that
When Nomura Researchrsquos Tushar Mohata upgraded Sunway Construction
Group Bhd to ldquobuyrdquo on March 9 this year the share price rose 45 within
nine months to as high as RM241 on Dec 11 before retracing to RM238 on
Dec 15 Before the upgrade the stock price had largely been hovering
between RM150 and RM160 for about a year
His decision to upgrade Sunway Construction resulted from what he calls an
ldquoearnings-cash ow matrixrdquo as well as ldquothe law of diminishing returnsrdquo at a
time when most construction companies were already sitting on record-
sized order books A high base means small and medium-sized project
awards could mean very little incremental impact on future earnings and
share price
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That came after he revisited Nomurarsquos investment thesis for the Malaysian
construction sector While net prot remains the best long-term predictor for
stock price returns he told clients that the cash conversion of reported
earnings was becoming equally important due to rising gearing in a weak
property market The latter was the reason Tushar preferred pure-play
Malaysian contractors like Sunway Construction to diversied contractors
with exposure to property development
According to him Sunway Constructionrsquos earnings ldquofairly accurately track its
actual cash ows reective of its healthy margins and timely collection from
customersrdquo Thatrsquos a better position than companies which may have good
reported earnings but subpar conversion of it to operating cash ow due to
reasons such as non-cash earnings stream and growing working capital
which leads to higher gearing (thus burdening the balance sheet)
A notable mention also goes to Macquarie Researchrsquos Aiman Mohamad who
has had a ldquobuyrdquo call on Sunway Construction since at least March 2016
according to Bloomberg data Both Nomura and Macquarie currently have
the streetrsquos most bullish target price of RM280
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An Hwang Capital Researchrsquos Kevin Lowrsquos call on Inari Amertron Bhd
Inari Amertron saw its stock price more than double this year An Hwangrsquos
Kevin Low started coverage as early as April 23 2013 when the comparable
stock price was 16 sen
He continues to like Inari calling it a ldquopreferred pickrdquo for the local technology
sector due to its ldquosolid growth in the RF segment given new drivers
including the Osram IRIS IR chip and its data server chip business from
Broadcomrdquo Key downside risks to his recommendation include a slowdown
in global demand for smart devices rapid average sale price (ASP) erosion
loss of customer base and the introduction of new technologies that may
render Inarirsquos products obsolete
According to Bloomberg data there is currently one ldquofully valuedrdquo call from
DBS Vickers with a RM225 target price Six analysts have ldquoholdrdquo or ldquoneutralrdquo
calls on Inari while the remaining six (including Low) recommend as ldquobuyrdquo
Time will tell who will prove prescient this time next year
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This year a notable mention also goes to Macquarie Researchrsquos Anand
Pathmakanthan as clients would have beneted from his upgrade from
ldquoneutralrdquo to ldquooutperformrdquo in January when the stock price was RM160
Similarly RHB Researchrsquos Kong Heng Siong upgraded his call to ldquobuyrdquo when
the stock price was RM190 on March 22 Credit Suissersquos Danny Chan who
started coverage with an ldquooutperformrdquo call on July 11 when the stock was at
RM213 apiece also deserves a notable mention
An Hwang Capital Researchrsquos Kevin Lowrsquos call on KESM Industries Bhd
When starting coverage on KESM Industries on Aug 15 2016 An Hwangrsquos
Kevin Low told clients the company was a good proxy for the stable and
growing automotive semiconductor segment going by growing demand for
electronics for vehicles from safety to infotainment and autonomous
vehicles In just four months the stock has gained 34 mdash making him a
winner last year
He continues his winning ways this year at RM1950 on Dec 15 KESM shares
had doubled from the start of the year mdash and therersquos still upside if Lowrsquos
RM2180 target price is to be believed In fact KESM reached as high as
RM2050 intraday on Nov 23 before closing at RM2040
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ldquoWe favour KESM for its exposure to the automotive space an area we
believe will continue to benet from structural growth underpinned by
increased semiconductor content in automobiles as well as growth in
demand for hybrid and autonomous vehiclesrdquo Low wrote in a Dec 18 note
reiterating his ldquobuyrdquo call
In an earlier note dated Nov 24 he told clients that KESMrsquos revenue and
earnings momentum ldquoremained strongrdquo underpinned by aggressive capital
expenditure into the automotive burn and test business He also noted that
1QFY72018 net prot would have been stronger if not for higher eective tax
rate of 155 versus 104 in 1QFY72017 Key downside risks include a loss of
customers and a reduction in the outsourcing opportunities as customers
increase their in-house burn-in and test function he says
Two other analysts have since started coverage on KESM this year according
to Bloomberg data CIMB Research has an ldquoaddrdquo rating and RM22 target price
while Kenanga Research is going against consensus with an ldquounderperformrdquo
call and RM1840 target price which is below open market prices It would be
interesting to see if Low will make it a hat trick next year
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Econpile
Holdings Bhd
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Econpile Holdings shares have gained as much as 776 this year closing at
RM3195 on Dec 4 Even measured from this yearrsquos cut-o date of Dec 15
gains came to an enviable 73
In a Dec 29 note last year KAFrsquos Mak Hoy Ken retained his ldquobuyrdquo call He sees
Econpile as the research housersquos ldquotop small-cap construction pick for its
burgeoning order book sustained job momentum and attractive marginsrdquo
The civil engineering contractorrsquos market capitalisation breached RM1 billion
in late October 2016
Back then he also told clients that more strategic opportunities could stem
from Econpilersquos 6040 tie-up with China Communications Construction Co
(M) Sdn Bhd (CCCC) for a substructure and ancillary works package for
SUKE highway as it was a strong endorsement of Econpilersquos position as a
piling specialist in Malaysia
At the time of writing Makrsquos target price of RM333 implies only 7 upside
potential from RM311 on Dec 15 It remains to be seen just how much comfort
should be drawn from his Oct 20 note where he said Econpilersquos earnings
visibility ldquoremains solid backed by a healthy outstanding order book of
RM12 billion or around 21 times its construction revenuerdquo
Meanwhile Macquarie Researchrsquos Aiman Mohamad who started coverage
with an ldquooutperformrdquo call on Feb 23 this year when the stock price was at
RM207 apiece also deserves a notable mention with Econpile shares up
502 to RM311 apiece in about 10 months Macquarie has a RM350 target
price
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KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Ann Joo
Resources Bhd
With shares of Ann Joo Resources Bhd up 83 to RM380 as at Dec 15 this
year investors who bought the stock at the start of the year would be sitting
on good portfolio gains KAFrsquos Mak Hoy Ken maintained a ldquobuyrdquo on the stock
with a higher target price of RM242 (from RM238) on Jan 5 The stock
dipped to RM217 mdash its lowest this year mdash on Jan 3 At its peak it closed as
high as RM391 on Nov 9
Back then Ann Joorsquos share price had just gained 224 in 2016 and there were
doubts in the market on whether the stock would continue to perform
especially with the direction of international steel prices being mixed at best
Mak was held to his belief that there was more upside to Ann Joo Among
other things he argued that domestic steel prices would see support from
provisional safeguard duties on imported bars and wire rods With the
counter trading at only eight to 10 times forward earnings multiples he was
convinced it was a cheaper alternative play to the Malaysian infrastructure
supercycle There is also a potential lift from a continued recovery in Chinese
steel prices as capacity cuts in that country gathers pace Chinese steel prices
have been on a general upward trend this year as the countryrsquos supply-side
reforms took eect
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A notable mention goes to Maybank Investment Bank Researchrsquos Lee Yen
Ling who upgraded her call for Ann Joo on Aug 16 2016 when the stock
price was at RM172
At the time of writing Maybankrsquos Lee has since downgraded her call to
ldquoholdrdquo with a RM385 target price while KAFrsquos Mak continues to call a ldquobuyrdquo
with a RM410 target price Watch this space
Kenanga Researchrsquos Desmond Chongrsquos call on Malaysian Pacic Industries
Bhd
It was almost as if he had a crystal ball When Kenanga Researchrsquos Desmond
Chong upgraded his call on Malaysian Pacic Industries (MPI) from ldquomarket
performrdquo to ldquobuyrdquo on Jan 27 the stock price ran up 79 from RM797 to
RM14291 on Oct 11
Helping the gains were the better sales that MPI was seeing of its automotive
electronics and power management chips as well as improved eciency He
subsequently raised his target price three more times to as high as RM1570
on Aug 18
Thatrsquos not all When Chong turned cautious on its outlook and downgraded
MPI to ldquomarket performrdquo or a neutral stance on Nov 10 the stock price
retraced 12 fromRM1364 to RM12 on Dec 15
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In a Nov 10 note issued following a brieng he highlighted the ldquomounting
pressure on marginsrdquo coupled with a potential setback from a longer
gestation period for its product rationalisation exercise
A special mention also goes to KAF Seagroatt amp Campbell Securitiesrsquo Shaq
Kadir and TA Securitiesrsquos Paul Yap who earlier had ldquobuyrdquo calls that also
proved right Kenangarsquos call got more points as MPI shares ran shortly after
his upgrade compared with the two existing ldquobuyrdquo calls
All three currently have ldquoholdrdquo calls on MPI in line with consensus At the
time of writing An Hwang Capital Research had the only ldquosellrdquo on the
stock with a target price of RM12 according to Bloomberg data Will he have
the last laugh next year
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Kerjaya Prospek Group
Bhd
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Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
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UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
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Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
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When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
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2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
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Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
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product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
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and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
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Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
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A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
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Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
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At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
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price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
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That came after he revisited Nomurarsquos investment thesis for the Malaysian
construction sector While net prot remains the best long-term predictor for
stock price returns he told clients that the cash conversion of reported
earnings was becoming equally important due to rising gearing in a weak
property market The latter was the reason Tushar preferred pure-play
Malaysian contractors like Sunway Construction to diversied contractors
with exposure to property development
According to him Sunway Constructionrsquos earnings ldquofairly accurately track its
actual cash ows reective of its healthy margins and timely collection from
customersrdquo Thatrsquos a better position than companies which may have good
reported earnings but subpar conversion of it to operating cash ow due to
reasons such as non-cash earnings stream and growing working capital
which leads to higher gearing (thus burdening the balance sheet)
A notable mention also goes to Macquarie Researchrsquos Aiman Mohamad who
has had a ldquobuyrdquo call on Sunway Construction since at least March 2016
according to Bloomberg data Both Nomura and Macquarie currently have
the streetrsquos most bullish target price of RM280
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An Hwang Capital Researchrsquos Kevin Lowrsquos call on Inari Amertron Bhd
Inari Amertron saw its stock price more than double this year An Hwangrsquos
Kevin Low started coverage as early as April 23 2013 when the comparable
stock price was 16 sen
He continues to like Inari calling it a ldquopreferred pickrdquo for the local technology
sector due to its ldquosolid growth in the RF segment given new drivers
including the Osram IRIS IR chip and its data server chip business from
Broadcomrdquo Key downside risks to his recommendation include a slowdown
in global demand for smart devices rapid average sale price (ASP) erosion
loss of customer base and the introduction of new technologies that may
render Inarirsquos products obsolete
According to Bloomberg data there is currently one ldquofully valuedrdquo call from
DBS Vickers with a RM225 target price Six analysts have ldquoholdrdquo or ldquoneutralrdquo
calls on Inari while the remaining six (including Low) recommend as ldquobuyrdquo
Time will tell who will prove prescient this time next year
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This year a notable mention also goes to Macquarie Researchrsquos Anand
Pathmakanthan as clients would have beneted from his upgrade from
ldquoneutralrdquo to ldquooutperformrdquo in January when the stock price was RM160
Similarly RHB Researchrsquos Kong Heng Siong upgraded his call to ldquobuyrdquo when
the stock price was RM190 on March 22 Credit Suissersquos Danny Chan who
started coverage with an ldquooutperformrdquo call on July 11 when the stock was at
RM213 apiece also deserves a notable mention
An Hwang Capital Researchrsquos Kevin Lowrsquos call on KESM Industries Bhd
When starting coverage on KESM Industries on Aug 15 2016 An Hwangrsquos
Kevin Low told clients the company was a good proxy for the stable and
growing automotive semiconductor segment going by growing demand for
electronics for vehicles from safety to infotainment and autonomous
vehicles In just four months the stock has gained 34 mdash making him a
winner last year
He continues his winning ways this year at RM1950 on Dec 15 KESM shares
had doubled from the start of the year mdash and therersquos still upside if Lowrsquos
RM2180 target price is to be believed In fact KESM reached as high as
RM2050 intraday on Nov 23 before closing at RM2040
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ldquoWe favour KESM for its exposure to the automotive space an area we
believe will continue to benet from structural growth underpinned by
increased semiconductor content in automobiles as well as growth in
demand for hybrid and autonomous vehiclesrdquo Low wrote in a Dec 18 note
reiterating his ldquobuyrdquo call
In an earlier note dated Nov 24 he told clients that KESMrsquos revenue and
earnings momentum ldquoremained strongrdquo underpinned by aggressive capital
expenditure into the automotive burn and test business He also noted that
1QFY72018 net prot would have been stronger if not for higher eective tax
rate of 155 versus 104 in 1QFY72017 Key downside risks include a loss of
customers and a reduction in the outsourcing opportunities as customers
increase their in-house burn-in and test function he says
Two other analysts have since started coverage on KESM this year according
to Bloomberg data CIMB Research has an ldquoaddrdquo rating and RM22 target price
while Kenanga Research is going against consensus with an ldquounderperformrdquo
call and RM1840 target price which is below open market prices It would be
interesting to see if Low will make it a hat trick next year
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Econpile
Holdings Bhd
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Econpile Holdings shares have gained as much as 776 this year closing at
RM3195 on Dec 4 Even measured from this yearrsquos cut-o date of Dec 15
gains came to an enviable 73
In a Dec 29 note last year KAFrsquos Mak Hoy Ken retained his ldquobuyrdquo call He sees
Econpile as the research housersquos ldquotop small-cap construction pick for its
burgeoning order book sustained job momentum and attractive marginsrdquo
The civil engineering contractorrsquos market capitalisation breached RM1 billion
in late October 2016
Back then he also told clients that more strategic opportunities could stem
from Econpilersquos 6040 tie-up with China Communications Construction Co
(M) Sdn Bhd (CCCC) for a substructure and ancillary works package for
SUKE highway as it was a strong endorsement of Econpilersquos position as a
piling specialist in Malaysia
At the time of writing Makrsquos target price of RM333 implies only 7 upside
potential from RM311 on Dec 15 It remains to be seen just how much comfort
should be drawn from his Oct 20 note where he said Econpilersquos earnings
visibility ldquoremains solid backed by a healthy outstanding order book of
RM12 billion or around 21 times its construction revenuerdquo
Meanwhile Macquarie Researchrsquos Aiman Mohamad who started coverage
with an ldquooutperformrdquo call on Feb 23 this year when the stock price was at
RM207 apiece also deserves a notable mention with Econpile shares up
502 to RM311 apiece in about 10 months Macquarie has a RM350 target
price
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KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Ann Joo
Resources Bhd
With shares of Ann Joo Resources Bhd up 83 to RM380 as at Dec 15 this
year investors who bought the stock at the start of the year would be sitting
on good portfolio gains KAFrsquos Mak Hoy Ken maintained a ldquobuyrdquo on the stock
with a higher target price of RM242 (from RM238) on Jan 5 The stock
dipped to RM217 mdash its lowest this year mdash on Jan 3 At its peak it closed as
high as RM391 on Nov 9
Back then Ann Joorsquos share price had just gained 224 in 2016 and there were
doubts in the market on whether the stock would continue to perform
especially with the direction of international steel prices being mixed at best
Mak was held to his belief that there was more upside to Ann Joo Among
other things he argued that domestic steel prices would see support from
provisional safeguard duties on imported bars and wire rods With the
counter trading at only eight to 10 times forward earnings multiples he was
convinced it was a cheaper alternative play to the Malaysian infrastructure
supercycle There is also a potential lift from a continued recovery in Chinese
steel prices as capacity cuts in that country gathers pace Chinese steel prices
have been on a general upward trend this year as the countryrsquos supply-side
reforms took eect
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A notable mention goes to Maybank Investment Bank Researchrsquos Lee Yen
Ling who upgraded her call for Ann Joo on Aug 16 2016 when the stock
price was at RM172
At the time of writing Maybankrsquos Lee has since downgraded her call to
ldquoholdrdquo with a RM385 target price while KAFrsquos Mak continues to call a ldquobuyrdquo
with a RM410 target price Watch this space
Kenanga Researchrsquos Desmond Chongrsquos call on Malaysian Pacic Industries
Bhd
It was almost as if he had a crystal ball When Kenanga Researchrsquos Desmond
Chong upgraded his call on Malaysian Pacic Industries (MPI) from ldquomarket
performrdquo to ldquobuyrdquo on Jan 27 the stock price ran up 79 from RM797 to
RM14291 on Oct 11
Helping the gains were the better sales that MPI was seeing of its automotive
electronics and power management chips as well as improved eciency He
subsequently raised his target price three more times to as high as RM1570
on Aug 18
Thatrsquos not all When Chong turned cautious on its outlook and downgraded
MPI to ldquomarket performrdquo or a neutral stance on Nov 10 the stock price
retraced 12 fromRM1364 to RM12 on Dec 15
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In a Nov 10 note issued following a brieng he highlighted the ldquomounting
pressure on marginsrdquo coupled with a potential setback from a longer
gestation period for its product rationalisation exercise
A special mention also goes to KAF Seagroatt amp Campbell Securitiesrsquo Shaq
Kadir and TA Securitiesrsquos Paul Yap who earlier had ldquobuyrdquo calls that also
proved right Kenangarsquos call got more points as MPI shares ran shortly after
his upgrade compared with the two existing ldquobuyrdquo calls
All three currently have ldquoholdrdquo calls on MPI in line with consensus At the
time of writing An Hwang Capital Research had the only ldquosellrdquo on the
stock with a target price of RM12 according to Bloomberg data Will he have
the last laugh next year
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Kerjaya Prospek Group
Bhd
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Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
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UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
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Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
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When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
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2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
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Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
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product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
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and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
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Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
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A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
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Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
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At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
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price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
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An Hwang Capital Researchrsquos Kevin Lowrsquos call on Inari Amertron Bhd
Inari Amertron saw its stock price more than double this year An Hwangrsquos
Kevin Low started coverage as early as April 23 2013 when the comparable
stock price was 16 sen
He continues to like Inari calling it a ldquopreferred pickrdquo for the local technology
sector due to its ldquosolid growth in the RF segment given new drivers
including the Osram IRIS IR chip and its data server chip business from
Broadcomrdquo Key downside risks to his recommendation include a slowdown
in global demand for smart devices rapid average sale price (ASP) erosion
loss of customer base and the introduction of new technologies that may
render Inarirsquos products obsolete
According to Bloomberg data there is currently one ldquofully valuedrdquo call from
DBS Vickers with a RM225 target price Six analysts have ldquoholdrdquo or ldquoneutralrdquo
calls on Inari while the remaining six (including Low) recommend as ldquobuyrdquo
Time will tell who will prove prescient this time next year
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This year a notable mention also goes to Macquarie Researchrsquos Anand
Pathmakanthan as clients would have beneted from his upgrade from
ldquoneutralrdquo to ldquooutperformrdquo in January when the stock price was RM160
Similarly RHB Researchrsquos Kong Heng Siong upgraded his call to ldquobuyrdquo when
the stock price was RM190 on March 22 Credit Suissersquos Danny Chan who
started coverage with an ldquooutperformrdquo call on July 11 when the stock was at
RM213 apiece also deserves a notable mention
An Hwang Capital Researchrsquos Kevin Lowrsquos call on KESM Industries Bhd
When starting coverage on KESM Industries on Aug 15 2016 An Hwangrsquos
Kevin Low told clients the company was a good proxy for the stable and
growing automotive semiconductor segment going by growing demand for
electronics for vehicles from safety to infotainment and autonomous
vehicles In just four months the stock has gained 34 mdash making him a
winner last year
He continues his winning ways this year at RM1950 on Dec 15 KESM shares
had doubled from the start of the year mdash and therersquos still upside if Lowrsquos
RM2180 target price is to be believed In fact KESM reached as high as
RM2050 intraday on Nov 23 before closing at RM2040
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ldquoWe favour KESM for its exposure to the automotive space an area we
believe will continue to benet from structural growth underpinned by
increased semiconductor content in automobiles as well as growth in
demand for hybrid and autonomous vehiclesrdquo Low wrote in a Dec 18 note
reiterating his ldquobuyrdquo call
In an earlier note dated Nov 24 he told clients that KESMrsquos revenue and
earnings momentum ldquoremained strongrdquo underpinned by aggressive capital
expenditure into the automotive burn and test business He also noted that
1QFY72018 net prot would have been stronger if not for higher eective tax
rate of 155 versus 104 in 1QFY72017 Key downside risks include a loss of
customers and a reduction in the outsourcing opportunities as customers
increase their in-house burn-in and test function he says
Two other analysts have since started coverage on KESM this year according
to Bloomberg data CIMB Research has an ldquoaddrdquo rating and RM22 target price
while Kenanga Research is going against consensus with an ldquounderperformrdquo
call and RM1840 target price which is below open market prices It would be
interesting to see if Low will make it a hat trick next year
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Econpile
Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1026
Econpile Holdings shares have gained as much as 776 this year closing at
RM3195 on Dec 4 Even measured from this yearrsquos cut-o date of Dec 15
gains came to an enviable 73
In a Dec 29 note last year KAFrsquos Mak Hoy Ken retained his ldquobuyrdquo call He sees
Econpile as the research housersquos ldquotop small-cap construction pick for its
burgeoning order book sustained job momentum and attractive marginsrdquo
The civil engineering contractorrsquos market capitalisation breached RM1 billion
in late October 2016
Back then he also told clients that more strategic opportunities could stem
from Econpilersquos 6040 tie-up with China Communications Construction Co
(M) Sdn Bhd (CCCC) for a substructure and ancillary works package for
SUKE highway as it was a strong endorsement of Econpilersquos position as a
piling specialist in Malaysia
At the time of writing Makrsquos target price of RM333 implies only 7 upside
potential from RM311 on Dec 15 It remains to be seen just how much comfort
should be drawn from his Oct 20 note where he said Econpilersquos earnings
visibility ldquoremains solid backed by a healthy outstanding order book of
RM12 billion or around 21 times its construction revenuerdquo
Meanwhile Macquarie Researchrsquos Aiman Mohamad who started coverage
with an ldquooutperformrdquo call on Feb 23 this year when the stock price was at
RM207 apiece also deserves a notable mention with Econpile shares up
502 to RM311 apiece in about 10 months Macquarie has a RM350 target
price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1126
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Ann Joo
Resources Bhd
With shares of Ann Joo Resources Bhd up 83 to RM380 as at Dec 15 this
year investors who bought the stock at the start of the year would be sitting
on good portfolio gains KAFrsquos Mak Hoy Ken maintained a ldquobuyrdquo on the stock
with a higher target price of RM242 (from RM238) on Jan 5 The stock
dipped to RM217 mdash its lowest this year mdash on Jan 3 At its peak it closed as
high as RM391 on Nov 9
Back then Ann Joorsquos share price had just gained 224 in 2016 and there were
doubts in the market on whether the stock would continue to perform
especially with the direction of international steel prices being mixed at best
Mak was held to his belief that there was more upside to Ann Joo Among
other things he argued that domestic steel prices would see support from
provisional safeguard duties on imported bars and wire rods With the
counter trading at only eight to 10 times forward earnings multiples he was
convinced it was a cheaper alternative play to the Malaysian infrastructure
supercycle There is also a potential lift from a continued recovery in Chinese
steel prices as capacity cuts in that country gathers pace Chinese steel prices
have been on a general upward trend this year as the countryrsquos supply-side
reforms took eect
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1226
A notable mention goes to Maybank Investment Bank Researchrsquos Lee Yen
Ling who upgraded her call for Ann Joo on Aug 16 2016 when the stock
price was at RM172
At the time of writing Maybankrsquos Lee has since downgraded her call to
ldquoholdrdquo with a RM385 target price while KAFrsquos Mak continues to call a ldquobuyrdquo
with a RM410 target price Watch this space
Kenanga Researchrsquos Desmond Chongrsquos call on Malaysian Pacic Industries
Bhd
It was almost as if he had a crystal ball When Kenanga Researchrsquos Desmond
Chong upgraded his call on Malaysian Pacic Industries (MPI) from ldquomarket
performrdquo to ldquobuyrdquo on Jan 27 the stock price ran up 79 from RM797 to
RM14291 on Oct 11
Helping the gains were the better sales that MPI was seeing of its automotive
electronics and power management chips as well as improved eciency He
subsequently raised his target price three more times to as high as RM1570
on Aug 18
Thatrsquos not all When Chong turned cautious on its outlook and downgraded
MPI to ldquomarket performrdquo or a neutral stance on Nov 10 the stock price
retraced 12 fromRM1364 to RM12 on Dec 15
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1326
In a Nov 10 note issued following a brieng he highlighted the ldquomounting
pressure on marginsrdquo coupled with a potential setback from a longer
gestation period for its product rationalisation exercise
A special mention also goes to KAF Seagroatt amp Campbell Securitiesrsquo Shaq
Kadir and TA Securitiesrsquos Paul Yap who earlier had ldquobuyrdquo calls that also
proved right Kenangarsquos call got more points as MPI shares ran shortly after
his upgrade compared with the two existing ldquobuyrdquo calls
All three currently have ldquoholdrdquo calls on MPI in line with consensus At the
time of writing An Hwang Capital Research had the only ldquosellrdquo on the
stock with a target price of RM12 according to Bloomberg data Will he have
the last laugh next year
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Kerjaya Prospek Group
Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1426
Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1526
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
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Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
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When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1826
2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1926
Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
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product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
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A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
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Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
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httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
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httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
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This year a notable mention also goes to Macquarie Researchrsquos Anand
Pathmakanthan as clients would have beneted from his upgrade from
ldquoneutralrdquo to ldquooutperformrdquo in January when the stock price was RM160
Similarly RHB Researchrsquos Kong Heng Siong upgraded his call to ldquobuyrdquo when
the stock price was RM190 on March 22 Credit Suissersquos Danny Chan who
started coverage with an ldquooutperformrdquo call on July 11 when the stock was at
RM213 apiece also deserves a notable mention
An Hwang Capital Researchrsquos Kevin Lowrsquos call on KESM Industries Bhd
When starting coverage on KESM Industries on Aug 15 2016 An Hwangrsquos
Kevin Low told clients the company was a good proxy for the stable and
growing automotive semiconductor segment going by growing demand for
electronics for vehicles from safety to infotainment and autonomous
vehicles In just four months the stock has gained 34 mdash making him a
winner last year
He continues his winning ways this year at RM1950 on Dec 15 KESM shares
had doubled from the start of the year mdash and therersquos still upside if Lowrsquos
RM2180 target price is to be believed In fact KESM reached as high as
RM2050 intraday on Nov 23 before closing at RM2040
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ldquoWe favour KESM for its exposure to the automotive space an area we
believe will continue to benet from structural growth underpinned by
increased semiconductor content in automobiles as well as growth in
demand for hybrid and autonomous vehiclesrdquo Low wrote in a Dec 18 note
reiterating his ldquobuyrdquo call
In an earlier note dated Nov 24 he told clients that KESMrsquos revenue and
earnings momentum ldquoremained strongrdquo underpinned by aggressive capital
expenditure into the automotive burn and test business He also noted that
1QFY72018 net prot would have been stronger if not for higher eective tax
rate of 155 versus 104 in 1QFY72017 Key downside risks include a loss of
customers and a reduction in the outsourcing opportunities as customers
increase their in-house burn-in and test function he says
Two other analysts have since started coverage on KESM this year according
to Bloomberg data CIMB Research has an ldquoaddrdquo rating and RM22 target price
while Kenanga Research is going against consensus with an ldquounderperformrdquo
call and RM1840 target price which is below open market prices It would be
interesting to see if Low will make it a hat trick next year
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Econpile
Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
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Econpile Holdings shares have gained as much as 776 this year closing at
RM3195 on Dec 4 Even measured from this yearrsquos cut-o date of Dec 15
gains came to an enviable 73
In a Dec 29 note last year KAFrsquos Mak Hoy Ken retained his ldquobuyrdquo call He sees
Econpile as the research housersquos ldquotop small-cap construction pick for its
burgeoning order book sustained job momentum and attractive marginsrdquo
The civil engineering contractorrsquos market capitalisation breached RM1 billion
in late October 2016
Back then he also told clients that more strategic opportunities could stem
from Econpilersquos 6040 tie-up with China Communications Construction Co
(M) Sdn Bhd (CCCC) for a substructure and ancillary works package for
SUKE highway as it was a strong endorsement of Econpilersquos position as a
piling specialist in Malaysia
At the time of writing Makrsquos target price of RM333 implies only 7 upside
potential from RM311 on Dec 15 It remains to be seen just how much comfort
should be drawn from his Oct 20 note where he said Econpilersquos earnings
visibility ldquoremains solid backed by a healthy outstanding order book of
RM12 billion or around 21 times its construction revenuerdquo
Meanwhile Macquarie Researchrsquos Aiman Mohamad who started coverage
with an ldquooutperformrdquo call on Feb 23 this year when the stock price was at
RM207 apiece also deserves a notable mention with Econpile shares up
502 to RM311 apiece in about 10 months Macquarie has a RM350 target
price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1126
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Ann Joo
Resources Bhd
With shares of Ann Joo Resources Bhd up 83 to RM380 as at Dec 15 this
year investors who bought the stock at the start of the year would be sitting
on good portfolio gains KAFrsquos Mak Hoy Ken maintained a ldquobuyrdquo on the stock
with a higher target price of RM242 (from RM238) on Jan 5 The stock
dipped to RM217 mdash its lowest this year mdash on Jan 3 At its peak it closed as
high as RM391 on Nov 9
Back then Ann Joorsquos share price had just gained 224 in 2016 and there were
doubts in the market on whether the stock would continue to perform
especially with the direction of international steel prices being mixed at best
Mak was held to his belief that there was more upside to Ann Joo Among
other things he argued that domestic steel prices would see support from
provisional safeguard duties on imported bars and wire rods With the
counter trading at only eight to 10 times forward earnings multiples he was
convinced it was a cheaper alternative play to the Malaysian infrastructure
supercycle There is also a potential lift from a continued recovery in Chinese
steel prices as capacity cuts in that country gathers pace Chinese steel prices
have been on a general upward trend this year as the countryrsquos supply-side
reforms took eect
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1226
A notable mention goes to Maybank Investment Bank Researchrsquos Lee Yen
Ling who upgraded her call for Ann Joo on Aug 16 2016 when the stock
price was at RM172
At the time of writing Maybankrsquos Lee has since downgraded her call to
ldquoholdrdquo with a RM385 target price while KAFrsquos Mak continues to call a ldquobuyrdquo
with a RM410 target price Watch this space
Kenanga Researchrsquos Desmond Chongrsquos call on Malaysian Pacic Industries
Bhd
It was almost as if he had a crystal ball When Kenanga Researchrsquos Desmond
Chong upgraded his call on Malaysian Pacic Industries (MPI) from ldquomarket
performrdquo to ldquobuyrdquo on Jan 27 the stock price ran up 79 from RM797 to
RM14291 on Oct 11
Helping the gains were the better sales that MPI was seeing of its automotive
electronics and power management chips as well as improved eciency He
subsequently raised his target price three more times to as high as RM1570
on Aug 18
Thatrsquos not all When Chong turned cautious on its outlook and downgraded
MPI to ldquomarket performrdquo or a neutral stance on Nov 10 the stock price
retraced 12 fromRM1364 to RM12 on Dec 15
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1326
In a Nov 10 note issued following a brieng he highlighted the ldquomounting
pressure on marginsrdquo coupled with a potential setback from a longer
gestation period for its product rationalisation exercise
A special mention also goes to KAF Seagroatt amp Campbell Securitiesrsquo Shaq
Kadir and TA Securitiesrsquos Paul Yap who earlier had ldquobuyrdquo calls that also
proved right Kenangarsquos call got more points as MPI shares ran shortly after
his upgrade compared with the two existing ldquobuyrdquo calls
All three currently have ldquoholdrdquo calls on MPI in line with consensus At the
time of writing An Hwang Capital Research had the only ldquosellrdquo on the
stock with a target price of RM12 according to Bloomberg data Will he have
the last laugh next year
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Kerjaya Prospek Group
Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1426
Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1526
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
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Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1726
When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1826
2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1926
Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2026
product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
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httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
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Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
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A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
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Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
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At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
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price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
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ldquoWe favour KESM for its exposure to the automotive space an area we
believe will continue to benet from structural growth underpinned by
increased semiconductor content in automobiles as well as growth in
demand for hybrid and autonomous vehiclesrdquo Low wrote in a Dec 18 note
reiterating his ldquobuyrdquo call
In an earlier note dated Nov 24 he told clients that KESMrsquos revenue and
earnings momentum ldquoremained strongrdquo underpinned by aggressive capital
expenditure into the automotive burn and test business He also noted that
1QFY72018 net prot would have been stronger if not for higher eective tax
rate of 155 versus 104 in 1QFY72017 Key downside risks include a loss of
customers and a reduction in the outsourcing opportunities as customers
increase their in-house burn-in and test function he says
Two other analysts have since started coverage on KESM this year according
to Bloomberg data CIMB Research has an ldquoaddrdquo rating and RM22 target price
while Kenanga Research is going against consensus with an ldquounderperformrdquo
call and RM1840 target price which is below open market prices It would be
interesting to see if Low will make it a hat trick next year
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Econpile
Holdings Bhd
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Econpile Holdings shares have gained as much as 776 this year closing at
RM3195 on Dec 4 Even measured from this yearrsquos cut-o date of Dec 15
gains came to an enviable 73
In a Dec 29 note last year KAFrsquos Mak Hoy Ken retained his ldquobuyrdquo call He sees
Econpile as the research housersquos ldquotop small-cap construction pick for its
burgeoning order book sustained job momentum and attractive marginsrdquo
The civil engineering contractorrsquos market capitalisation breached RM1 billion
in late October 2016
Back then he also told clients that more strategic opportunities could stem
from Econpilersquos 6040 tie-up with China Communications Construction Co
(M) Sdn Bhd (CCCC) for a substructure and ancillary works package for
SUKE highway as it was a strong endorsement of Econpilersquos position as a
piling specialist in Malaysia
At the time of writing Makrsquos target price of RM333 implies only 7 upside
potential from RM311 on Dec 15 It remains to be seen just how much comfort
should be drawn from his Oct 20 note where he said Econpilersquos earnings
visibility ldquoremains solid backed by a healthy outstanding order book of
RM12 billion or around 21 times its construction revenuerdquo
Meanwhile Macquarie Researchrsquos Aiman Mohamad who started coverage
with an ldquooutperformrdquo call on Feb 23 this year when the stock price was at
RM207 apiece also deserves a notable mention with Econpile shares up
502 to RM311 apiece in about 10 months Macquarie has a RM350 target
price
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KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Ann Joo
Resources Bhd
With shares of Ann Joo Resources Bhd up 83 to RM380 as at Dec 15 this
year investors who bought the stock at the start of the year would be sitting
on good portfolio gains KAFrsquos Mak Hoy Ken maintained a ldquobuyrdquo on the stock
with a higher target price of RM242 (from RM238) on Jan 5 The stock
dipped to RM217 mdash its lowest this year mdash on Jan 3 At its peak it closed as
high as RM391 on Nov 9
Back then Ann Joorsquos share price had just gained 224 in 2016 and there were
doubts in the market on whether the stock would continue to perform
especially with the direction of international steel prices being mixed at best
Mak was held to his belief that there was more upside to Ann Joo Among
other things he argued that domestic steel prices would see support from
provisional safeguard duties on imported bars and wire rods With the
counter trading at only eight to 10 times forward earnings multiples he was
convinced it was a cheaper alternative play to the Malaysian infrastructure
supercycle There is also a potential lift from a continued recovery in Chinese
steel prices as capacity cuts in that country gathers pace Chinese steel prices
have been on a general upward trend this year as the countryrsquos supply-side
reforms took eect
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A notable mention goes to Maybank Investment Bank Researchrsquos Lee Yen
Ling who upgraded her call for Ann Joo on Aug 16 2016 when the stock
price was at RM172
At the time of writing Maybankrsquos Lee has since downgraded her call to
ldquoholdrdquo with a RM385 target price while KAFrsquos Mak continues to call a ldquobuyrdquo
with a RM410 target price Watch this space
Kenanga Researchrsquos Desmond Chongrsquos call on Malaysian Pacic Industries
Bhd
It was almost as if he had a crystal ball When Kenanga Researchrsquos Desmond
Chong upgraded his call on Malaysian Pacic Industries (MPI) from ldquomarket
performrdquo to ldquobuyrdquo on Jan 27 the stock price ran up 79 from RM797 to
RM14291 on Oct 11
Helping the gains were the better sales that MPI was seeing of its automotive
electronics and power management chips as well as improved eciency He
subsequently raised his target price three more times to as high as RM1570
on Aug 18
Thatrsquos not all When Chong turned cautious on its outlook and downgraded
MPI to ldquomarket performrdquo or a neutral stance on Nov 10 the stock price
retraced 12 fromRM1364 to RM12 on Dec 15
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In a Nov 10 note issued following a brieng he highlighted the ldquomounting
pressure on marginsrdquo coupled with a potential setback from a longer
gestation period for its product rationalisation exercise
A special mention also goes to KAF Seagroatt amp Campbell Securitiesrsquo Shaq
Kadir and TA Securitiesrsquos Paul Yap who earlier had ldquobuyrdquo calls that also
proved right Kenangarsquos call got more points as MPI shares ran shortly after
his upgrade compared with the two existing ldquobuyrdquo calls
All three currently have ldquoholdrdquo calls on MPI in line with consensus At the
time of writing An Hwang Capital Research had the only ldquosellrdquo on the
stock with a target price of RM12 according to Bloomberg data Will he have
the last laugh next year
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Kerjaya Prospek Group
Bhd
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Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
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UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
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Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
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When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
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2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
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Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
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product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
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httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1026
Econpile Holdings shares have gained as much as 776 this year closing at
RM3195 on Dec 4 Even measured from this yearrsquos cut-o date of Dec 15
gains came to an enviable 73
In a Dec 29 note last year KAFrsquos Mak Hoy Ken retained his ldquobuyrdquo call He sees
Econpile as the research housersquos ldquotop small-cap construction pick for its
burgeoning order book sustained job momentum and attractive marginsrdquo
The civil engineering contractorrsquos market capitalisation breached RM1 billion
in late October 2016
Back then he also told clients that more strategic opportunities could stem
from Econpilersquos 6040 tie-up with China Communications Construction Co
(M) Sdn Bhd (CCCC) for a substructure and ancillary works package for
SUKE highway as it was a strong endorsement of Econpilersquos position as a
piling specialist in Malaysia
At the time of writing Makrsquos target price of RM333 implies only 7 upside
potential from RM311 on Dec 15 It remains to be seen just how much comfort
should be drawn from his Oct 20 note where he said Econpilersquos earnings
visibility ldquoremains solid backed by a healthy outstanding order book of
RM12 billion or around 21 times its construction revenuerdquo
Meanwhile Macquarie Researchrsquos Aiman Mohamad who started coverage
with an ldquooutperformrdquo call on Feb 23 this year when the stock price was at
RM207 apiece also deserves a notable mention with Econpile shares up
502 to RM311 apiece in about 10 months Macquarie has a RM350 target
price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1126
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Ann Joo
Resources Bhd
With shares of Ann Joo Resources Bhd up 83 to RM380 as at Dec 15 this
year investors who bought the stock at the start of the year would be sitting
on good portfolio gains KAFrsquos Mak Hoy Ken maintained a ldquobuyrdquo on the stock
with a higher target price of RM242 (from RM238) on Jan 5 The stock
dipped to RM217 mdash its lowest this year mdash on Jan 3 At its peak it closed as
high as RM391 on Nov 9
Back then Ann Joorsquos share price had just gained 224 in 2016 and there were
doubts in the market on whether the stock would continue to perform
especially with the direction of international steel prices being mixed at best
Mak was held to his belief that there was more upside to Ann Joo Among
other things he argued that domestic steel prices would see support from
provisional safeguard duties on imported bars and wire rods With the
counter trading at only eight to 10 times forward earnings multiples he was
convinced it was a cheaper alternative play to the Malaysian infrastructure
supercycle There is also a potential lift from a continued recovery in Chinese
steel prices as capacity cuts in that country gathers pace Chinese steel prices
have been on a general upward trend this year as the countryrsquos supply-side
reforms took eect
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1226
A notable mention goes to Maybank Investment Bank Researchrsquos Lee Yen
Ling who upgraded her call for Ann Joo on Aug 16 2016 when the stock
price was at RM172
At the time of writing Maybankrsquos Lee has since downgraded her call to
ldquoholdrdquo with a RM385 target price while KAFrsquos Mak continues to call a ldquobuyrdquo
with a RM410 target price Watch this space
Kenanga Researchrsquos Desmond Chongrsquos call on Malaysian Pacic Industries
Bhd
It was almost as if he had a crystal ball When Kenanga Researchrsquos Desmond
Chong upgraded his call on Malaysian Pacic Industries (MPI) from ldquomarket
performrdquo to ldquobuyrdquo on Jan 27 the stock price ran up 79 from RM797 to
RM14291 on Oct 11
Helping the gains were the better sales that MPI was seeing of its automotive
electronics and power management chips as well as improved eciency He
subsequently raised his target price three more times to as high as RM1570
on Aug 18
Thatrsquos not all When Chong turned cautious on its outlook and downgraded
MPI to ldquomarket performrdquo or a neutral stance on Nov 10 the stock price
retraced 12 fromRM1364 to RM12 on Dec 15
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1326
In a Nov 10 note issued following a brieng he highlighted the ldquomounting
pressure on marginsrdquo coupled with a potential setback from a longer
gestation period for its product rationalisation exercise
A special mention also goes to KAF Seagroatt amp Campbell Securitiesrsquo Shaq
Kadir and TA Securitiesrsquos Paul Yap who earlier had ldquobuyrdquo calls that also
proved right Kenangarsquos call got more points as MPI shares ran shortly after
his upgrade compared with the two existing ldquobuyrdquo calls
All three currently have ldquoholdrdquo calls on MPI in line with consensus At the
time of writing An Hwang Capital Research had the only ldquosellrdquo on the
stock with a target price of RM12 according to Bloomberg data Will he have
the last laugh next year
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Kerjaya Prospek Group
Bhd
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httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1426
Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
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httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1526
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
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httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1626
Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1726
When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
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httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1826
2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
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httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1926
Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2026
product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1126
KAF Seagroatt amp Campbell Securitiesrsquo Mak Hoy Kenrsquos call on Ann Joo
Resources Bhd
With shares of Ann Joo Resources Bhd up 83 to RM380 as at Dec 15 this
year investors who bought the stock at the start of the year would be sitting
on good portfolio gains KAFrsquos Mak Hoy Ken maintained a ldquobuyrdquo on the stock
with a higher target price of RM242 (from RM238) on Jan 5 The stock
dipped to RM217 mdash its lowest this year mdash on Jan 3 At its peak it closed as
high as RM391 on Nov 9
Back then Ann Joorsquos share price had just gained 224 in 2016 and there were
doubts in the market on whether the stock would continue to perform
especially with the direction of international steel prices being mixed at best
Mak was held to his belief that there was more upside to Ann Joo Among
other things he argued that domestic steel prices would see support from
provisional safeguard duties on imported bars and wire rods With the
counter trading at only eight to 10 times forward earnings multiples he was
convinced it was a cheaper alternative play to the Malaysian infrastructure
supercycle There is also a potential lift from a continued recovery in Chinese
steel prices as capacity cuts in that country gathers pace Chinese steel prices
have been on a general upward trend this year as the countryrsquos supply-side
reforms took eect
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1226
A notable mention goes to Maybank Investment Bank Researchrsquos Lee Yen
Ling who upgraded her call for Ann Joo on Aug 16 2016 when the stock
price was at RM172
At the time of writing Maybankrsquos Lee has since downgraded her call to
ldquoholdrdquo with a RM385 target price while KAFrsquos Mak continues to call a ldquobuyrdquo
with a RM410 target price Watch this space
Kenanga Researchrsquos Desmond Chongrsquos call on Malaysian Pacic Industries
Bhd
It was almost as if he had a crystal ball When Kenanga Researchrsquos Desmond
Chong upgraded his call on Malaysian Pacic Industries (MPI) from ldquomarket
performrdquo to ldquobuyrdquo on Jan 27 the stock price ran up 79 from RM797 to
RM14291 on Oct 11
Helping the gains were the better sales that MPI was seeing of its automotive
electronics and power management chips as well as improved eciency He
subsequently raised his target price three more times to as high as RM1570
on Aug 18
Thatrsquos not all When Chong turned cautious on its outlook and downgraded
MPI to ldquomarket performrdquo or a neutral stance on Nov 10 the stock price
retraced 12 fromRM1364 to RM12 on Dec 15
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1326
In a Nov 10 note issued following a brieng he highlighted the ldquomounting
pressure on marginsrdquo coupled with a potential setback from a longer
gestation period for its product rationalisation exercise
A special mention also goes to KAF Seagroatt amp Campbell Securitiesrsquo Shaq
Kadir and TA Securitiesrsquos Paul Yap who earlier had ldquobuyrdquo calls that also
proved right Kenangarsquos call got more points as MPI shares ran shortly after
his upgrade compared with the two existing ldquobuyrdquo calls
All three currently have ldquoholdrdquo calls on MPI in line with consensus At the
time of writing An Hwang Capital Research had the only ldquosellrdquo on the
stock with a target price of RM12 according to Bloomberg data Will he have
the last laugh next year
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Kerjaya Prospek Group
Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1426
Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1526
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1626
Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1726
When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1826
2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1926
Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2026
product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
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A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
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Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
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httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
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httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1226
A notable mention goes to Maybank Investment Bank Researchrsquos Lee Yen
Ling who upgraded her call for Ann Joo on Aug 16 2016 when the stock
price was at RM172
At the time of writing Maybankrsquos Lee has since downgraded her call to
ldquoholdrdquo with a RM385 target price while KAFrsquos Mak continues to call a ldquobuyrdquo
with a RM410 target price Watch this space
Kenanga Researchrsquos Desmond Chongrsquos call on Malaysian Pacic Industries
Bhd
It was almost as if he had a crystal ball When Kenanga Researchrsquos Desmond
Chong upgraded his call on Malaysian Pacic Industries (MPI) from ldquomarket
performrdquo to ldquobuyrdquo on Jan 27 the stock price ran up 79 from RM797 to
RM14291 on Oct 11
Helping the gains were the better sales that MPI was seeing of its automotive
electronics and power management chips as well as improved eciency He
subsequently raised his target price three more times to as high as RM1570
on Aug 18
Thatrsquos not all When Chong turned cautious on its outlook and downgraded
MPI to ldquomarket performrdquo or a neutral stance on Nov 10 the stock price
retraced 12 fromRM1364 to RM12 on Dec 15
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1326
In a Nov 10 note issued following a brieng he highlighted the ldquomounting
pressure on marginsrdquo coupled with a potential setback from a longer
gestation period for its product rationalisation exercise
A special mention also goes to KAF Seagroatt amp Campbell Securitiesrsquo Shaq
Kadir and TA Securitiesrsquos Paul Yap who earlier had ldquobuyrdquo calls that also
proved right Kenangarsquos call got more points as MPI shares ran shortly after
his upgrade compared with the two existing ldquobuyrdquo calls
All three currently have ldquoholdrdquo calls on MPI in line with consensus At the
time of writing An Hwang Capital Research had the only ldquosellrdquo on the
stock with a target price of RM12 according to Bloomberg data Will he have
the last laugh next year
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Kerjaya Prospek Group
Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1426
Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
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UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
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Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1726
When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1826
2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1926
Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2026
product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1326
In a Nov 10 note issued following a brieng he highlighted the ldquomounting
pressure on marginsrdquo coupled with a potential setback from a longer
gestation period for its product rationalisation exercise
A special mention also goes to KAF Seagroatt amp Campbell Securitiesrsquo Shaq
Kadir and TA Securitiesrsquos Paul Yap who earlier had ldquobuyrdquo calls that also
proved right Kenangarsquos call got more points as MPI shares ran shortly after
his upgrade compared with the two existing ldquobuyrdquo calls
All three currently have ldquoholdrdquo calls on MPI in line with consensus At the
time of writing An Hwang Capital Research had the only ldquosellrdquo on the
stock with a target price of RM12 according to Bloomberg data Will he have
the last laugh next year
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Kerjaya Prospek Group
Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1426
Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1526
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1626
Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1726
When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1826
2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1926
Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2026
product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1426
Investors who made money might recall that UOB Kay Hianrsquos retail research
team started coverage on Kerjaya Prospek as far back as January 2016 when
it was still called Fututech Bhd The team called the stock ldquoan upcoming mid-
cap construction companyrdquo that would emerge as an end-to-end building
contractor with RM27 billion order book after completing the acquisition of
two privately-run construction companies
At the time the (adjusted) stock price was RM169 As at Dec 15 it had gained
134 to RM397 although that is o as high as RM408 on Nov 3 This year
alone Kerjaya shares were up 83 at the time of writing
On Jan 3 UOBrsquos Ridhwan Eendy told clients that 2017 would continue to be
an eventful year for Kerjaya mdash which stands out as a potential capital
management play mdash given its strong cash pile of RM107 million or 10 of its
market capitalisation back then
According to Bloomberg data at the time of writing UOB is the only house
still calling a ldquobuyrdquo on Kerjaya while the remaining two houses with active
coverage have ldquoneutralrdquo or ldquounderperformrdquo The ldquounderperformrdquo call made
in early August when the share price was RM354 but the stock is at RM397
currently
UOB upgraded the stock to ldquobuyrdquo again on Nov 23 with a higher target price
of RM453 (from RM381) after raising its earnings estimates as well as order
book win assumptions Ridhwan continues to like Kerjaya for its superior
margins high order book cover net cash of RM163 million (289 sen per
share) and ability to clinch new contracts
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1526
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1626
Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1726
When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1826
2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1926
Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2026
product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1526
UOB Kay Hian Researchrsquos Ridhwan Eendyrsquos call on Sunsuria Bhd
UOB Kay Hian was the rst house to initiate coverage on Sunsuria nearly
three years ago At the time the headline recommendation was ldquoholdrdquo based
on a 50 discount to its sum-of-parts valuation
Nonetheless the research house told clients that it expected the company to
take on a major asset acquisition strategy ldquoInvestors with the risk appetite
for small-caps should consider re-entering ahead of the announcement
which is expected to be in 1Q2015rdquo it said in a brief note dated Feb 18 2015
That gives this submission an edge over others Based on where the stock is
today post the corporate developments the equivalent (adjusted) stock price
would be 868 sen A simplistic measurement would show a 786 gain at its
recent peak of RM155 on July 14 2017
UOB Kay Hianrsquos Ridhwan Eendy raised his target price to RM125 (from
RM1) when reiterating a ldquobuyrdquo call on Jan 12 this year as he expected
Sunsuria to enter a multi-year growth phase Riding on the success of
Xiamen University Ridhwan expects its agship Sunsuria City development
to be a key driver for sales and earnings
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1626
Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1726
When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1826
2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1926
Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2026
product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1626
Sunsuriarsquos stock price took only about a month to reach the new target price
and on Feb28 Ridhwan raised the target price to RM150 mdash which the stock
hit on April 10 before retracing to RM140-levels
On May 25 Ridhwan downgraded the stock to ldquoholdrdquo with an unchanged
target price after the release of the companyrsquos 2QFY2017 earnings telling
investors to ldquocapitalise on their gainsrdquo as he believed its near-term potential
had been reected after a 42 year-to-date climb
At the time the stock price was RM141 and the highest it went was a 99 rise
to a recent high of RM155 on July 17 before retracing to RM134 about 5
lower than at the point of downgrade
AmInvestment Bank Researchrsquos Alex Gohrsquos call on Petronas Gas Bhd
AmInvestment Bankrsquos Alex Goh got it right when he cut Petronas Gas to ldquosellrdquo
from ldquoholdrdquo on Nov 18 with a RM1665 target price while the stock was
trading at RM20-levels
From there the price skidded 22 to as low as RM1588 on Nov 30 The
magnitude of the fall is considerably sharp given that Petronas Gas is a big-
cap counter with a market capitalisation of RM336 billion
In fact between Nov 18 last year and the recent low on Nov 30 it lost a
whopping RM101 billion in market capitalisation
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1726
When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1826
2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1926
Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2026
product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1726
When downgrading his call more than a year ago Goh told clients about the
chances of impending earnings erosion given the Energy Commissionrsquos
upcoming plan to implement incentive-based regulation (IBR) taris on the
grouprsquos gas transport tari That made it hard to justify the companyrsquos
valuation and share price of above RM20
On Dec 5 Goh seemed to have also rightly upgraded Petronas Gas to a ldquoholdrdquo
with a RM1665 target price when the share price was at RM1610 Closing at
RM1696 on Dec 21 the stock had gained 53
Meanwhile it is worth noting that TA Securitiesrsquo analyst Kylie Chan also had a
ldquosellrdquo call on the stock according to Bloomberg data when many others on
the street still said ldquoholdrdquo
Inter-Pacic Securities Researchrsquos Wong Ling Lingrsquos call on Uchi
Technologies Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1826
2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1926
Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2026
product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1826
2017 has been a spectacular year for Uchi Technology as was Inter-Pacic
Securities Researchrsquos Wong Ling Lingrsquos ldquobuyrdquo call on the company
The companyrsquos share price had gained between 13 and 30 a year between
2012 and 2016 and this year was beginning to look that way as well until a
sharp rally occurred from the middle of the year barely a fortnight from the
time she started coverage on the stock with a ldquobuyrdquo call
Uchirsquos performance likely surprised even her
Only three analysts are actively tracking Uchi according to Bloomberg data
When Wong started coverage on June 15 Uchi shares were at RM184 a share
From there it rocketed 93 in just over ve months to RM355 on Nov 29
At RM345 on Dec 15 Uchirsquos market capitalisation stood at RM157 billion
compared with about RM800 million just six months earlier
Wongrsquos ldquobuyrdquo recommendation was premised on the companyrsquos stable
earnings growth unique business model a minimum dividend payout ratio
of 70 of prot after tax very comfortable prot margins and a clientele
comprised of industry market leaders It would be interesting to see if Uchi
which specialises in the design of electronic control systems for a number of
multinational companies that are global leaders in their respective industries
can continue to surprise on the upside next year
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1926
Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2026
product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 1926
Hong Leong Investment Bank Researchrsquos Jeremy Gohrsquos call on George Kent
(M) Bhd
This time last year HLIB Researchrsquos Jeremy Goh was the only analyst
actively tracking George Kent telling clients that the water meter-turned-
engineering company had RM51 billion engineering order book and ldquocan no
longer be ignoredrdquo
Today he is one of three analysts calling a ldquobuyrdquo on the company he
described as one with 68 sen per share net cash and a ldquokey rail play with
exposure to the LRT extensionsrdquo His target price is currently RM390 Closing
at RM362 on Dec 15 George Kent shares had gained 83 year to date
continuing its ascent from the year before
In a Dec 7 note after the companyrsquos third quarter earnings brieng Goh noted
that George Kent mdash which is the leader for water meters in Malaysia with
over a 50 market share mdash could see the opening of ldquoa whole new marketrdquo
for itself when it commercialises its automated meter reading (AMR)
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2026
product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2026
product which allows remote reading of water meters Selangor is expected
to call tenders for AMR meters in two months for a pilot project while Johor
and Penang are also looking to replace traditional meters Goh said
The company (via a joint venture with Siemens) is also preparing to put in a
bid for the Kuala Lumpur-Singapore high-speed rail (HSR) asset company
(AssetsCo) that will help develop key parts of the project That may provide
further catalysts for the stock next year
UOB Kay Hian Researchrsquos Kong Ho Mengrsquos call on Sapura Energy Bhd
When analysts rushed to revise their ldquobuyrdquo and ldquoneutralrdquo calls on Sapura
Energy Bhd in early December after a large quarterly net loss UOB Kay Hian
Researchrsquos Kong Ho Meng stood out as he had had a ldquosellrdquo call for close to six
months
The stock tumbled 20 in a single day on Dec 7 after the group announced a
quarterly net loss of RM2744 million for the third quarter ended Oct 31 a
sharp contrast to a net prot of RM158 million the year before
Looking back we see that the share price had in fact been drifting lower
since mid-June when the consensus view was that the oil
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2126
and gas giant was in calmer waters as the recovery of global crude oil prices
gathered steam
Kongrsquos timely downgrade of his call from ldquoneutralrdquo to ldquosellrdquo on June 20 would
have saved clients from sizeable portfolio losses From RM167 the stock
price tumbled 53 to 785 sen at our award evaluation cut-o date of Dec 15
When The Edge went to print the stock price had slid further to a record low
of 715 sen on Dec 21
A notable mention goes to Credit Suissersquos Danny Chan who also went against
the grain with a contrarian ldquosellrdquo call since June although he prematurely
upped his recommendation to ldquoneutralrdquo while the counter was still heading
south
An Hwang Capital Researchrsquos Ng Chi Hoongrsquos call on Jaks Resources Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2226
Jaks Resources is not well tracked by analysts many of whom may feel the
need to observe the company from the sidelines for the time being since its
power generation project in Vietnam will only start contributing in 2020 and
be a good source of recurring income
The lack of coverage makes An Hwang Capitalrsquos Ng Chi Hoongrsquos ldquobuyrdquo
recommendation and analysis stand out even more Those familiar with the
company would know Jaks is undertaking a US$187 billion 1200MW coal-
red thermal power plant project near Hai Duong together with China Power
Engineering Consulting Group Co Ltd (CPECC) Jaks holds a 30 stake in the
joint venture and CPECC the remaining 70
In a Jan 4 note Ng raised his target price for Jaks to RM2 (from RM160)
following a review of its assets after the company said it was realigning its
focus on Vietnam given the slowdown in the property market in Malaysia
At the time Jaksrsquo share price was at RM101 It took barely three months to
jump 70 to reach RM172 on April 5 before retracing
Following the strong rally Ng downgraded his call to ldquoholdrdquo on May 25 when
the price was RM158 When it skidded to RM138 on Oct 17 however he saw
reason to upgrade to ldquobuyrdquo again with RM175 target price Jaks closed at
RM150 as at Dec 20 up 485 from the time Ng reiterated his ldquobuyrdquo call with
a higher target price
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2326
A special mention goes to Anrsquos Lim Yee Tang who initiated coverage on
Jaks before he moved to equity sales Ng assumed coverage from November
2016
Kenanga Researchrsquos Raymond Choorsquos call on Hartalega Holdings Bhd
At the start of 2017 Kenanga Investment Researchrsquos Raymond Choo boldly
recommended that clients buy Hartalega Holdings shares He was the only
one of 20 analysts tracking the stock to do so according to Bloomberg data
In fact there was as many as ve ldquosellrdquo calls
The lack of enthusiasm may have stemmed from the fact that Hartalega
shares were down 17 year on year in 2016 after gaining 72 y-o-y in 2015 A
long-time favourite of investors the leading nitrile glove maker sprang a
surprise rebound this year rising more than120
The stock moved from RM476 as at end-2016 to RM975 on Dec 15 our award
evaluation cut-o date As at Dec 20 the stock price reached RM1140
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2426
Investors who bought shares early this year would have Choo to thank His
contrarian stance stemmed from the conviction that Hartalega was
capitalising on its new capacity from the NGC plant in Sepang on the back of
robust demand and a slower-than-expected production ramp-up in the other
rubber glove players
He was convinced by Hartalegarsquos constant desire to move up the value chain
by oering superior product innovation and automating its production
processes Hartalegarsquos recently announced rst non-leaching antimicrobial
nitrile examination glove is also expected to be a game changer in the rubber
glove industry
Inter-Pacic Securitiesrsquo David Lai Yoon Hui also deserves a notable mention
for also having a ldquobuyrdquo for the most part save for a blip in May
MIDF Researchrsquos Ng Bei Shanrsquos call on Superlon Holdings Bhd
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2526
At its peak Superlon Holdings Bhdrsquos market capitalisation reached RM4637
million when its share price rose to RM292 on Sept 18
While some institutional investors may consider this small the market cap is
already more than double the RM20247 million the company was valued at
on Nov 22 last year mdash the day MIDF Researchrsquos Ng Bei Shan initiated
coverage on the maker of synthetic rubber insulators used mainly for
heating ventilation air conditioning (HVAC) and refrigeration mdash which are
important for high-rise buildings and industrial use The recommendation
was based on the prospects for its new warehouse which would improve
lead time and sales market dominance and its sturdy balance sheet
(RM3913 million net cash) that spelt dividend payments
In fact MIDF had been watching Superlon for some months starting with a
non-rated report in March 2016 when its market cap stood at RM1596
million
Measured from Nov 21 2016 the share price appreciated as much as 137 to
reach RM292 on Sept 11 this year Part of the gains were thanks to a share
split that the company had hoped would improve liquidity mdash a move that was
rewarded with the entry of institutional investors including the emergence
of Kumpulan Wang Persaraan (Diperbadankan) as a substantial shareholder
with a 1049 stake
Closing at RM215 on Dec 15 the counter had skidded 26 from its recent
peak but it remains about 75 above the time MIDF started calling a ldquobuyrdquo
Ng who had downgraded the stock to ldquoneutralrdquo on Sept 27 when her target
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager
152018 Capital The Edge Best Call Awards 2017 | The Edge Markets
httpwwwtheedgemarketscomarticlecapital-edge-best-call-awards-2017 2626
price was nearly met and its 1QFY2018 earnings were hit by a spike in raw
material price upgraded her call again to ldquobuyrdquo on Dec 15 following the share
price weakness At the time of writing its RM236 target price implies 98
upside potential from current levels
An Hwang Capital Researchrsquos Tan Jian Yuanrsquos call on Serba Dinamik
Holdings Bhd
If you had bought Serba Dinamik Holdings Bhd shares when An Hwang
Researchrsquos Tan Jian Yuan started coverage with a ldquobuyrdquo and RM240 target
price you would have seen your holdings rise 677 over seven months from
RM176 to RM322 on Dec 15
Thatrsquos if you did not get the initial public oering (IPO) shares for Serba
Dinamik which made a strong debut on the Main Market on Feb 8 this year
and went on to become the yearrsquos best-performing IPO with a gain of 119 as
at Dec 15 Kenanga Investment Bank was the IPO lead manager