Following our first part coverage of our 4-part series on CIMB’s Malaysia strategy, we follow up with part 2 of the series focusing on stocks that have strong presence in Malaysia.

Investors Takeaway: 4 Stocks With Strong Malaysian Presence

  1. Syarikat Takaful Malaysia


2018 is the year where Syarikat Takaful Malaysia launched its “Click for Cover” digital transformation programme.

With its digital transformation, customers can now purchase takaful products through its digital platform. Syarikat Takaful Malaysia has also been aggressively partnering with other financial institutions to distribute its products. They signed collaborative agreements with Lembaga Tabung Haji (LTH) and Bank Islam (BI) for the online distribution of Syarikat Takaful Malaysia’s takaful products to LTH’s depositors and BI’s customers.

The digital transformation has also helped Syarikat Takaful Malaysia build the first integrated medical underwriting engine in Malaysia. CIMB expects the high straight-through processing rates and quick turnaround time from its integrated medical underwriting engine to drive Syarikat Takaful Malaysia’s performance.

BUY, TP RM4.17

  1. Dialog Group

Dialog Group is starting works for the Pengerang Deepwater Terminal (PDT) Phase 3 land reclamation which involves the laying of pipelines, erection of tanks, the construction of common facilities, and the construction of the third jetty.

According to CIMB’s estimates, Dialog Group’s shareholding stake in PDT Phase 3 will initially be 80 percent, larger than previous phases. While CIMB expects Dialog to rope in another equity partner into PDT Phase 3, Dialog’s expected stake in PDT Phase 3 will be at least 50 percent. Still, the project is expected to drive Dialog’s earnings.

BUY, TP RM4.00

  1. CCK Consolidated Holdings

CCK Consolidated Holdings is CIMB’s top pick in the small-cap space. Its strong earnings prospects, dominant position in East Malaysia through its network of 57 retail outlets and strong demand for poultry products are three reasons why CCK is a top pick for CIMB.

CCK also recently announced a 1-for-1 split for all existing shares and issuance of 1 free warrant for every 2 subdivided shares. CIMB believes that the move to split existing shares will increase CCK’s trading liquidity and enlarge its shareholder base. CCK’s management has also guided that the issuance of free warrants is to reward shareholders, which allows investors to participate in CCK’s convertible securities without incurring any additional cost. This could catalyse the share price of CCK in the short run.

BUY, TP RM1.86


Despite seasonally lower service revenue, managed to grow its 1Q18 EBITDA on the back of lower operating expenses. Service revenue also grew 0.7 percent year-on-year, which is the first time since 2Q15. Moving forward, CIMB expects a more positive outlook for as its service revenue growth is underpinned by strong growth in postpaid services and better data monetisation on steadier competition.

Currently, is trading at a 14 percent discount to its 5-year Enterprise Value/Operating Free cash flow mean. It is also offering a decent dividend yield of around 4.2-4.8 percent. CIMB notes that a potential re-rating catalyst is the delivery of FY18-19 earnings that beat consensus forecasts.

BUY, TP RM5.10

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