In a nutshell, our market view remains pretty much unchanged.
The domestic economic growth is expected to be decent at 4.7% in 2019 while big caps’ FY18E/FY19E earnings growth rates are estimated at 0.7%/6.9%.
Nonetheless, we believe the local market may still remain stuck in a range-bound mode until significant rerating catalysts are seen. While the downside could be cushioned, upside is uninspiring with our end-2019 Index Target pegged at 1,775, implying FY18E/FY19E PERs of 16.9x/15.8x.
Nonetheless, with >50% of listed stocks on Bursa Securities declining >20% in 2018, we believe values have emerged.
Therefore, in this quarter we focus on stocks that were sold down heavily. We have selected (i) AEON (OP, TP: RM2.00), (ii) BIMB (OP, TP: RM5.05), (iii) MBSB (OP, TP: RM1.25), (iv) OCK (OP, TP: RM0.570), (v) PADINI (OP, TP: RM4.05), (vi) PESTECH (OP, TP: RM1.45), (vii) PWROOT (OP, TP: RM1.65), (viii) SKPRES (OP, TP: RM1.25), (ix) UEMS (OP, TP: RM0.850) and (x) WCT (OP, TP: RM0.850) as our 1Q19 Top Picks.
Timing-wise, the ideal Buy on Weakness (B.O.W.) zone is between 1,670 and 1,620.
https://klse.i3investor.com/blogs/kenangaresearch/188501.jsp |
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