ANALYSTS SAY: Buy, Sell, Hold (31 Mar)

UOB KAYHIAN

Wilmar International (WIL SP)
Accelerating The Construction Of Central Kitchen Food Park In China

Wilmar sees great potential in the central kitchen business which is a good complementary business to its agri-based food ingredient products. The first Central
Kitchen Food Park in Hangzhou is in the trial production stage. While consumer packs
and soybean crushing in China remain challenging, palm and sugar operations should be able to partly mitigate this weakness. Both palm and sugar operations are enjoying good ASPs and processing margins. Maintain BUY. Target price: S$5.50.

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VS Industry (VSI MK)
Look Beyond Short-term Lull; Staging For A Much Stronger FY23

While VS could see sequentially stronger results for 2HFY22, the ongoing systemic issues could still lead to operational inefficiency. Cut FY22 earnings by 10%. Beyond the temporary blips, key customers remain committed by making VS their preferred partner in Asia via massive volumes loadings. The additional job opportunities upon the full arrival of foreign workers could lift its earnings by 23% in a blue-sky scenario, which we have yet to factor in. Maintain BUY. Target price: RM1.60.

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MAYBANK KIM ENG

UOB KAYHIAN

Malaysia Banking
2H21 Financial Stability Review

Sector fundamentals intact The banking system remains stable and resilient, especially amid economic recovery. BNM nevertheless highlights that the recovery is uneven and a few sectors continued to warrant monitoring. It also highlights the risk of higher mark-to-market losses on investments should bond yields rise. This, however, is not unexpected and has somewhat been factored into our forecasts. We maintain sector POSITIVE with BUYs on HLBK, AMMB, RHB, ABMB, HLFG and BIMB.

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China Construction Bank (939 HK)
2021: Results In Line; Expect 2022 NIM Compression To Continue

CCB’s attributable net profit grew 11.61% yoy mainly due to lesser provisions taken in.
Property risk remains manageable as shown from the 14bp decrease in NPL ratio.
Given China's sluggish economy, more rate cuts might be imposed, which − together
with the competitive deposit market − might lead to continued NIM compression in
2022. Maintain BUY with target price reduced to HK$8.05.

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