Research house reiterates ‘Buy’ on Yinson, ATech, EcoWorld, maintains ‘Sell’ for Top Glove


IN ITS top picks of the week, Maybank IBG Research Reports (Malaysia) suggested a ‘Buy’ call for Yinson Holdings Bhd due to the company’s performance ahead of expectation for the first half of 2023 (1H23).

“Its 1H23 results exceeded our expectations, coming in at 58%/62% of our/consensus original financial year (FY) forecasts, fuelled mostly by engineering, procurement, construction, installation and commissioning ops strength, prompting us to improve our financial year 2023 (FY23) net profit forecast by 24%. The floating production storage and offloading market is booming and Yinson is well-positioned to capitalise on it. 

“Winning one to two additional positions in 18M is a reasonable prospect, and our SOP-TP (standard operating procedure-test procedure) has yet to account for this possible upside,” the research house said.

On the second pick, Maybank IBG Research stated that it reiterated a ‘Buy’ call on Eco World Development Group Bhd.

“EcoWorld’s third quarter 2022 (3Q22) core net profit of RM45 million (28% year-on-year, 5% quarter-on-quarter) was in line with expectations, while its 10M22 locked-in property sales of RM3.4 billion exceeded them.

“Net gearing continued to improve, reaching 0.35 times at the end of 3Q22, up from 0.36 times at the end of 2Q22. We revise our earnings projections by -6% to 7%. Our target price (TP) remains unchanged at RM0.81 (on unchanged 0.5 times FY23E price-to-book value). EcoWorld has a dividend yield of 6%,” he added.

On the other hand, the research house also suggested a ‘Buy’ call on Aurelius Technologies Bhd (ATech).

“We retain our earnings projections, ‘Buy’ recommendation and TP of RM2.03 for Aurelius Technologies as we await its 2Q23 results, which are scheduled on Sept 29.

“Our TP is based on CY23E EPS of 13.7 sen and a PER of 14.8 times, which is in line with its EMS rivals’ historical five-year weighted average PER. Aurelius Technologies’ 1H23 core net profit is expected to be between 35%-40% of our full-year forecast of RM33 million,” said Maybank IBG Research.

However, he stated that the bank maintained a ‘Sell’ suggestion for Top Glove Corp Bhd due to its first quarterly loss since being listed in 2001.

“Top Glove’s 4Q22 results (net loss of RM53 million) fell short of our/consensus expectations. The near-term picture remains difficult due to ongoing inventory depletion actions at the client end, while competition remains fierce, particularly from China peers. 

“We reduce our earnings predictions for FY23-FY24 by 34%-58% and introduce FY25. Our TP has been reduced to RM0.52 (-13 sen; on an unchanged 13 times CY24E PER),” he further added.