Introduction

Affin Hwang Investment Bank Berhad provides a detailed and data-driven analysis of the Malaysian stock market with a comprehensive evaluation of various listed companies. This report outlines key trends, forecasts, and recommendations for 2024 and 2025, offering deep insights into the performance and outlook of different sectors and individual companies. Here’s an extensive breakdown of the analysis for each company covered in the report.

Automotive Sector

Bermaz Auto (BAUTO MK)

Recommendation: SELL

Target Price: RM1.89

Current Price: RM1.30

Market Cap: RM1,520 million

Bermaz Auto faces challenges with declining sales and profitability. Projected core EPS growth for 2024 and 2025 are -20.3% and -17.0%, respectively. The stock’s valuation remains compelling with core PEs of 5.7x for 2024E and 6.9x for 2025E. Dividend yields are expected to remain strong at 15.6% in 2024E and 12.2% in 2025E, appealing to income-focused investors. However, headwinds in the automotive sector weigh on the recommendation.

MBM Resources (MBM MK)

Recommendation: HOLD

Target Price: RM6.55

Current Price: RM5.85

Market Cap: RM2,287 million

MBM Resources benefits from its strategic 22.6% stake in Perodua, Malaysia’s automotive leader. Core EPS growth in 2024E is forecasted at 11.1%, followed by a decline of -5.5% in 2025E. The core PE valuation is relatively attractive at 6.8x for 2024E and 7.1x for 2025E. Dividend yields are projected at 11.4% and 10.8% for 2024E and 2025E, respectively. While growth prospects are solid, challenges in the broader automotive market are reflected in the HOLD recommendation.

Sime Darby (SIME MK)

Recommendation: HOLD

Target Price: RM2.26

Current Price: RM2.18

Market Cap: RM14,858 million

Sime Darby’s diversified portfolio provides stability amidst challenges in the automotive sector. Core EPS growth for 2024E and 2025E is forecasted at 6.6% and 5.1%, respectively. The stock offers a steady dividend yield of 7.2% in 2024E and 7.6% in 2025E. With its core PE ratios at 10.6x for 2024E and 10.1x for 2025E, Sime Darby remains a stable pick, justifying the HOLD recommendation.

Banks & Financial Services

Alliance Bank Malaysia (ABMB MK)

Recommendation: HOLD

Target Price: RM4.75

Current Price: RM5.20

Market Cap: RM8,050 million

Alliance Bank stands out for its strong fundamentals, with core EPS growth of 4.0% in 2024E and 6.8% in 2025E. The stock trades at relatively low core PEs of 11.3x and 10.6x for 2024E and 2025E, respectively. Dividend yields are forecasted at 4.5% and 4.9%, ensuring steady returns for investors. However, high structural costs remain a challenge, leading to a HOLD rating.

AMMB Holdings (AMM MK)

Recommendation: HOLD

Target Price: RM5.80

Current Price: RM5.64

Market Cap: RM18,653 million

AMMB is well-positioned with core EPS growth projections of 16.7% in 2024E and 11.4% in 2025E. Core PEs of 9.8x for 2024E and 8.8x for 2025E make it an attractive investment. Dividend yields are forecast at 4.3% and 4.7% for the respective years. AMMB’s efforts to revamp its retail banking unit and achieve higher ROE levels are promising, though challenges persist, supporting the HOLD recommendation.

CIMB Group (CIMB MK)

Recommendation: BUY

Target Price: RM9.00

Current Price: RM8.19

Market Cap: RM87,895 million

CIMB Group is forecasted to achieve core EPS growth of 10.9% in 2024E and 4.3% in 2025E. The bank trades at appealing core PEs of 11.3x and 10.8x for 2024E and 2025E, respectively. Dividend yields of 5.3% in 2024E and 5.1% in 2025E provide stable income for investors. The bank’s ability to deliver consistent ROEs of 10.8% underscores its investment potential, earning it a BUY recommendation.

Malayan Banking (MAY MK)

Recommendation: BUY

Target Price: RM12.10

Current Price: RM10.38

Market Cap: RM125,255 million

Maybank’s revamped wholesale banking model positions it well to benefit from FDIs and DDIs in Malaysia. Its forecasted core EPS growth remains steady at 6.4% for 2024E and 0.5% for 2025E. With core PEs of 12.6x and 12.5x for the respective years and dividend yields of 6.2% and 6.4%, Maybank offers compelling value, justifying the BUY recommendation.

Building Materials

Malayan Cement (LMC MK)

Recommendation: BUY

Target Price: RM6.55

Current Price: RM4.77

Market Cap: RM6,396 million

Malayan Cement’s pricing power and favorable cost environment make it a standout in the sector. Core EPS growth for 2024E and 2025E is forecasted at 57.3% and 2.6%, respectively. The stock trades at core PEs of 12.1x for 2024E and 11.8x for 2025E, with dividend yields of 3.3% and 3.4%. Its strong potential for sales volume growth supports the BUY call.

Press Metal (PMAH MK)

Recommendation: BUY

Target Price: RM5.30

Current Price: RM4.92

Market Cap: RM40,539 million

Press Metal continues to benefit from robust aluminum demand. Core EPS growth is projected at 40.8% for 2024E and 0.2% for 2025E. The stock’s core PEs of 22.4x for both years are complemented by dividend yields of 1.4% each year. Its strong market position and growth prospects solidify its BUY recommendation.

Conclusion

The detailed analysis provided by Affin Hwang Investment Bank Berhad offers valuable insights for investors seeking to navigate the Malaysian stock market. With recommendations tailored to each company’s financial performance and market conditions, this report serves as a comprehensive guide for 2024 and 2025 investment strategies.