Daily Brief Industrials: Eva Precision Industrial Holdings, Sime Darby, TRC Synergy Bhd and more

• Eva Precision Industrial Holdings (838 HK) is a supplier of office and automotive equipment (seat/battery frames and moulds), trading at 8.1x PE FY22 with an inflection point in earnings growth.
• As a supplier to Tesla Motors (TSLA US), Great Wall Motor (2333 HK), and Lucid, it is a play on the expansion of the EV space.
• Legacy business of office equipment will also experience growth due to the exit of foreign businesses like Fuji and Samsung enabling the company to have 25% CAGR revenue growth.

• SIME has proposed to divest its entire stake in Weifang Port companies for RMB1.92b (MYR1.27b) cash, marking its full exit from the non-core seaport business.
• We view the exit positively, in line with SIME’s strategy to redeploy capital to its core Automotive and Industrials businesses.
• We keep our FY22E/FY23E earnings forecasts for now. Reiterate OP. We keep our SoP-TP unchanged at RM2.60

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• We initiate coverage on TRC Synergy with a BUY recommendation and TP of RM0.40/share based on our SOP calculation with a deep 50% discount; reflecting small cap status and heavy public sector reliance.
• Job opportunities are poised for an inflection buoyed by MRT3 to which we consider TRC a strong contender
• TRC’s market cap trades at a -15% discount to its net cash position (1QFY22), we believe the market has ascribed a negative value to TRC’s real estate assets which we think is unwarranted.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.