Market Background:
2018 economy is expected to improve further on the back of
synchronized global economic growth. Recovery in crude oil prices will strengthen Malaysia's government finance and provide crucial support to MYR. Though it is widely expected that BNM will raise interest rate, however the monetary policy will remain accommodative to the economy. Election rally will be the main theme for this year and will be the catalyst for more vibrant equity market in Bursa, hence might attract new interesting IPO this year. Consumer sentiments will likely to pick up this year and this will provide opportunities to accumulate consumer related stocks. My stock picks are:
SERBADK: an integrated engineering, contracting, and maintenance company servicing oil and gas industry. The company decade-long expertise, recovery in crude oil prices and present extensive order book secured both from local and overseas market will provide much room for growth in revenue and hence profit.
COMFORT: a relatively small glove maker in Malaysia serving largely overseas market. Current low rubber and crude oil price will continue to benefit glove makers like COMFORT. Planned capacity expansion in Thailand and Vietnam are the major growth factor.
CCK: on the backdrop of low corn and soybean prices couple with stronger MYR, I expect that CCK will continue to benefit from margin expansion for this year. Feeds which are largely imported represent 70% of production cost, hence the major contributor for stellar financial result this year.
OCK-WA: OCK is a diversified telecommunication support services provider. OCK owns and lease telecom towers, provide M&E engineering services and ventured into green energy and power business. The company presences in growing telecommunication economies namely Myanmar and Vietnam should provide support for future growth
BINACOM: Binasat Communication Berhad, an IPO company scheduled to be listed on 8 Jan 2018 is a peer to OCK. At relatively cheap price compare to OCK, I think there is large upside can be gained from BINACOM. IPO was priced at 12times to last FYE earning as oppose to OCK which is trading at about 27 times last FYE earning.
http://klse.i3investor.com/blogs/erenthink/143333.jsp
