Innovalues

Innovalues: Maybank-KE initiating coverage on the counter with a Buy call and TP of $0.52, offering 63% upside. The initiation comes after AmFraser initiated coverage on the counter last week, suggesting rising interests on the stock. The investment points for Innovalues is that it is well on the road to a strong recovery this year, led by its automotive parts business which now comprises 80% of sales. Our house is forecasting a doubling of profits in FY14E. Multi-year expansion lies ahead, as the parts it makes are related to vehicle safety, fuel savings and emission control, features that are being made mandatory across the globe. Immediate growth should be driven by end-market growth for its automotive customers and Innovalues’ own growing market share among its customers’ supplier base. The group is trading at just 7 5.9x FY15E forecasts and offers yields of 6-8%.