Mean Valuation Reflecting Near-term Headwinds

The stock outperformed FBMKLCI by 4.7% in 1H21 and currently trades at mean
valuation. Stepping into 2H21, we expect the following RP3 outcome: a) lower ROA, b) lower demand growth, and c) higher allowable capex. We see a three-year earnings CAGR of 3% (RP2: 5%). BUY on weakness with a lowered fair value of RM11.80, as we price in a lower ROA and demand profile for RP3. The stock offers sustainable dividend yield of 5%, supporting downside risk.