The market could hardly hide the disappointment as KLCI finished a disappointing 4Q18 earnings season with uninspiring earnings outlook. The market is now starting to reel in to the fact that slow growth is the new norm. That being said, there are still stocks that are worth a BUY recommendation from the street. Here are four MY stocks that have been given a BUY recommendation by the street.
Investors Takeaway: 4 MY Stocks Poised To Outperform
- Allianz Malaysia
Allianz Malaysia crossed the finishing line with great finesse, beating expectations despite a challenging environment. Allianz saw an expansion in earnings from both its life and general insurance divisions that were above consensus estimates. In particular, its life division pre-tax profit rose 18 percent year-on-year on the back of growth in net earned premiums and lower contract liabilities. Its persistency ratio also improved with less customers lapsing their policies.
BUY, TP RM16.70; Current share price RM14.54
- Sime Darby Property
Within its coverage universe, Sime Darby Property has been given a high conviction rating by CIMB. Sime Darby Property managed to blow past CIMB’s FY18 full-year estimate thanks to higher-than-expected revenue recognition.
This helped Sime Darby Property to exceed its sales target in FY18. Given such a good performance, Sime Darby Property has given itself a higher FY19 sales target. It plans to roll out multiple projects to ride on the strong sales momentum and achieve its new sales target.
Sime Darby Property is currently trading at a large discount to its RNAV compared to its peers. CIMB thinks that a re-rating will occur for Sime Darby Property from potential catalysts such as ramp-up in launches and new property sales.
BUY, TP RM1.34; Current share price RM1.10
- Oceancash Pacific
Oceancash finished the quarter with a weak 4Q18 result, owing to lower volumes in both the felt and hygiene segment. This led to lower utilisation rates and in turn affected EBITDA margins. On a whole, Oceancash disappointed on FY18 revenue and earnings as both fell significantly below consensus expectations.
That being said, CIMB is confident that Oceancash will see a pick-up in orders for both its felt and hygiene segment in FY19. The company has also been receiving healthy interest from a number of customers. The bright long-term prospects in foreign markets continue to put Oceancash in prime position.
BUY, TP RM0.63; RM0.45
- IHH Healthcare
IHH Healthcare put on a stellar performance as 4Q18 net core profit grew 88 percent year-on-year. This brought 2018 core net profit to exceed RM1 billion with a 73 percent year-on-year growth. This was above consensus estimates for the full year.
The strong overall performance came from contributions from established markets. IHH’s Singapore segment enjoyed a surge in revenue as case mix improved together with an aging demographics. Driven by a similar trend, IHH’s Malaysia segment also saw revenue grow. IHH’s recently acquired Fortis Healthcare has started yielding positive results with inpatient admission volumes more than doubling quarter-on-quarter.
This was also the first quarter where IHH started recognising earnings from Fortis’ operations. Moving forward, UOBKH expects further improvement in IHH’s EBITDA margins over the next few quarters.
BUY, TP RM6.30; Current share price RM5.59
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