MORNING CALL: 6/10/23

Maybank IB Research expects Cypark Resources to book a recovery in earnings

Transcript

00:00 Our stock in focus today is Saipark Resources.

00:05 Maybank Investments Bank Research, which recently met with the company's management,

00:09 said it's upgrading the stock to tactical buy from hold,

00:13 though it's keeping its target price unchanged at RM1.05.

00:16 The counter last traded at RM0.895.

00:20 So, key takeaways.

00:21 Firstly, Saipark's ongoing construction of three large-scale solar, or LSS, projects

00:26 in Trengganu and Kelantan are targeted for completion by December 2023.

00:32 Then there's the Waste-to-Energy, or WTE, plant at Ladang Tanah Merah, Negeri Sembilan,

00:37 which is expected to achieve optimal operation this coming December.

00:41 By then, the WTE segment is expected to generate circa RM80 million in revenue,

00:47 which covers tipping fee, recycling revenue and green energy sale to TNB.

00:51 According to Maybank, Saipark has been liaising closely with the authorities

00:56 on a revision to tipping fees and is asking for higher fees in an upcoming review.

01:01 It now receives a tipping fee of circa RM33 per metric tonne of municipal solid waste.

01:07 The company is also exploring new renewable energy, or RE, related opportunities with several states,

01:14 with an eye on expansion in engineering, procurement, construction

01:17 and commissioning works or asset ownership.

01:20 It sees further opportunities from the remaining 237 megawatts of the Corporate Green Power Programme,

01:26 or CGPP, which has yet to be awarded, and RE export.

01:31 So what's the consensus?

01:32 According to Bloomberg data, Maybank's buy-in side, there's also a hold-call by Public Invest,

01:38 with a target price of 90 cent.

01:40 That takes the average target price to 97 cent,

01:43 which is some 8 percent higher than Saipark's last close of 89.5 cent.

01:49 (Music)