ANALYSTS SAY: Buy, Sell, Hold (28 Sept)

CGS CIMB

Grab Holdings
Investor Day takeaways

■ Grab looks to achieve adj. EBITDA breakeven by 2H24F as it focuses on sustainable growth and accelerating its path to profitability.
■ Key initiatives: 1) grow customer loyalty and maximise users’ lifetime value, 2) lowering platform cost to serve, 3) exit services with weak unit economics.
■ Grab also shared strategies for its two medium-term growth drivers: digital bank and advertising business. Maintain Add; TP based on SOP valuation.

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VS Industry Bhd
Expecting stronger quarters ahead

■ VSI’s FY4/22 core EPS (-21.4% yoy) was above expectations, due mainly to lower taxes and higher profits from subsidiaries.
■ We expect stronger qoq 1QFY23F, from a ramp-up of box-built assembly for new product models and margin accretions from an influx of workers.
■ Reiterate Add, with an unchanged TP of RM1.21 (15.7x CY23F P/E).

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UOB KAYHIAN

Nanofilm Technologies International (NANO SP)
NDR Takeaways: Positioned For Growth And New Opportunities In The EV Space

We held an NDR with Nanofilm’s management. Key takeaways include: a) operations have improved in 3Q22 with the Shanghai plant reverting back to its normal state and is
currently in the peak season production, b) Nanofilm is gaining traction with Customer Z as it wins more wallet share across all product categories, and c) Nanofilm expects positive development in the EV battery space, where further details will be revealed in the near term. Maintain BUY and target price of S$2.72.

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MyNews Holdings (MNHB MK)
3QFY22: Almost Breaks Even

MyNews’ in-store sales displayed encouraging recovery on the back of the economy reopening further, which could see further uplift. Gross margins have recovered to prepandemic levels thanks to CU. While MyNews registered minimal losses, key operations saw encouraging signs of bottoming out. We are encouraged over the sequential improvement and excited over further progress going forward. Alongside improved earnings visibility, valuations appear attractive as well. Maintain BUY. Target: RM0.66.

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V.S. Industry (VSI MK)
Results exceed expectations

Positively surprised; upgrade to BUY
VSI’s FY22 results came in above expectations, exceeding by 18%/15% of ours/consensus’ full-year forecasts respectively. We maintain our FY23-24E’s earnings estimates and introduce FY25E, while raising TP by 8% to MYR1.15 (from MYR1.07) on rolling forward valuation base year to FY24E.
Our TP is derived by pegging VSI’s fully-diluted FY24E EPS of 8sen to a PER multiple of 14.4x (at -0.5SD to its 5-year PER average of 16.9x), with the -0.5SD peg to reflect the increasing economic risks globally. 

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Astro Malaysia (ASTRO MK)
The going is getting tough

Cut TP to MYR0.82 (-34%) and downgrade to HOLD
Earnings were within our expectations but a lower-than-expected dividend portends a weak outlook. We have great respect for ASTRO and appreciate their efforts (e.g. upgrading set-top-boxes, tying up with over-the-top operators like NetFlix and slashing costs) but we have no visibility as to when its outlook will improve. Cut FY23E/FY24E/FY25E EPS and DPS by 8%/14%/28% and 9%/7%/29% respectively and our DCF based TP to MYR0.82 from MYR1.24. Downgrade to HOLD from BUY.

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