LEESK (8079) LEE SWEE KIAT GROUP BHD - THIS STOCK IS TOP SMALL CAP PICK FOR 2021 (106% POTENTIAL UPSIDE)
Lee Swee Kiat is one of the top 3 small cap picks with the highest upside (+106%), according to CGS-CIMB Research latest strategy report.
LSK is Malaysia’s largest manufacturer of natural bedding products, with annual production capacity of 6,000 tonnes.
LSK should record stronger quarters ahead, driven by higher semi-foam demand from export markets and maiden contribution from JV with Cuckoo.
LSK is targeting at least RM100m (LSK’s portion) from the JV in the next 3 years. Do note LSK existing business recorded RM100m sales last year.
Reiterate ADD with TP of RM1.60 (12.9x CY22F P/E, a 30% discount to our consumer discretionary sector CY22F target P/E of 18.4x).
- CGS-CIMB Research