KUALA LUMPUR – AmInvestment Bank has maintained its “overweight” recommendation on the consumer sector as the demand and supply recovery remains intact with the economy gradually reopening.
In a research note today, AmInvestment Bank said it noticed optimism in consumers’ future spending as reflected in the consumer sentiment index, as economic activities pick up steam and Covid-19 daily cases decrease.
“The ongoing efforts to promote booster shots may offset fears of the new Covid-19 variant threat.
“The sector is ripe for transformation and growth with the large number of small-to-mid cap companies with expansionary potential, coupled with pivoting opportunities underpinned by changing consumer preferences,” it said.
The Malaysian Institute of Economic Research’s Consumer Sentiment Index surged to 101.7 points in the third quarter of 2021 (3Q21), its highest level since 2Q18, exceeding the optimism threshold as the economy reopens and Covid-19 daily cases remain low.
“With the gradual pick-up in economic activities, reopening of borders, and ongoing efforts to increase the booster shot rate, we reckon that consumer confidence is likely to remain elevated throughout the first half of 2022 (1H22),” it added.
AmInvestment Bank said hence, its top picks are Mr DIY Group (M) Bhd, Guan Chong Bhd (GCB) and Berjaya Food Bhd (BFood).
“We like Mr DIY for the company’s profit-generating stores in a post-pandemic scenario, proactive management and the potential of the new ‘Mr DIY Express’ store format.
“Meanwhile, GCB offers a positive outlook as regional demand for chocolate recovers with borders reopening.
“BFood is attractive due to its revamped and leaner business model. Any weakness in its share price is an opportunity to collect, in our view,” it said. – Bernama, December 30, 2021
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