KUALA LUMPUR (June 5): Institutional analysts covering stocks on Bursa Malaysia said the 1Q2024 results of companies under their coverage did not disappoint.

In separate earnings wrap notes on Wednesday, TA Securities and MIDF Research said core earnings of stocks under coverage rose 9.1% quarter-on-quarter (q-o-q) and 20.7% respectively, while 16% of stocks under coverage reported higher than expected earnings, respectively.

TA Securities attributed the performance to strong contributions from the banking, gaming, power & utilities, and transportation sectors.

Meanwhile, MIDF Research said target price changes involved 55 upward adjustments and seven downward adjustments.

“Furthermore, we made 17 changes to our stock recommendations, with 13 upgrades and four downgrades.

“The aggregate FY2024 earnings forecast of the FBM KLCI constituents under our coverage was raised by 1.9% to RM67.0 billion.

“Likewise, the aggregate FY2024 earnings forecast of the stocks under MIDF universe was raised by 2.2% to RM87.2 billion,” it said.

TA Securities tweaked its end-2024 FBMKLCI target to 1,690, from 1,620, based on CY2025 price–earnings ratio (PER) of 14x, which is still a 19.5% discount compared to the last five years’ average of 17.4x.

The research house said the 10 stocks that were upgraded to “buy” are Ann Joo Resources Bhd (KL:ANNJOO), CelcomDigi Bhd (KL:CDB), Farm Fresh Bhd (KL:FFB), IOI Corp Bhd (KL:IOICORP), Kim Loong Resources Bhd (KL:KMLOONG), Malakoff Corp Bhd (KL:MALAKOF), Malayan Banking Bhd (KL:MAYBANK), Scientex Bhd (KL:SCIENTX), Sime Darby Guthrie Bhd (KL:SDG), and TSH Resources Bhd (KL:TSH), whereas three stocks, namely Kuala Lumpur Kepong Bhd (KL:KLK), Sports Toto Bhd (KL:SPTOTO) and United Malacca Bhd (KL:UMCCA) were upgrade to “hold”.

On the other hand, three stocks, Allianz Malaysia Bhd (KL:ALLIANZ), MISC Bhd (KL:MISC), and Telekom Malaysia Bhd (KL:TM) were downgraded to “hold”, while six stocks, namely, Amway (Malaysia) Holdings Bhd (KL:AMWAY), Apex Healthcare Bhd (KL:APEX), Cahya Mata Sarawak Bhd (KL:CMSB), Elk-Desa Resources Bhd (KL:ELKDESA), FGV Holdings Bhd (KL:FGV), and Malaysian Pacific Industries Bhd (KL:MPI), were downgraded to “sell”.

Meanwhile, MIDF Research said that in 4QCY2023, the outperformers among FBM KLCI constituents under its coverage came from varied sectors.

They were Axiata Group Bhd (KL:AXIATA), Hong Leong Financial Group Bhd (KL:HLFG), IOI Corp Bhd (KL:IOI), MISC, and Petronas Chemicals Group Bhd (KL: PCHEM).

“Meanwhile, there were no underperformers among the FBM KLCI constituents under our coverage in the reviewed quarter,” it said.

In view of the positive liquidity and fundamental considerations, MIDF Research raised its FBM KLCI, FBM Hijrah, and FBM70 targets for 2024 to 1,750 points or PER24 of 15.6x, 14,100 points or PER24 of 22.6x, and 18,900 points or PER24 of 18.8x, respectively.