Problem
Suppose you are an investment analyst, your supervisor, a portfolio manager, asked you to make equity research report and recommend one Malaysian common stock which you start covering for the first time.
This initiating coverage report should include the main sections below:
1) Recommendation - Typically to either buy, sell, or hold shares in the company. This section also usually includes a target price (i.e., RM7.25 in the next 12 months).
2) Company Information - Background, general information, any recent information, new releases, quarterly or annual results, major contracts, management changes, or any other important information about the company.
3) Investment Analysis - A summary of why you believe the stock will over or underperform and what will cause it to reach the share price target included in the recommendation. This is the most important part of the report. It also called "Catalysts" or "Growth engines". Detailed identification of all relevant global, regional, and domestic factors including economic, political, cultural, legal and demographic factors which might affect its stock price.
4) Financial Information and Valuation - A forecast of the company's income statement, balance sheet, cash flow, and valuation. This section is often an output from a financial model built in Excel; or you can get the forecast from other sources. Please show how you calculate or estimate the target price in this section.
5) ESG Factors Analysis - ESG stands for Environmental, Social, and Corporate Governance. Investors are increasingly applying these non-financial factors as part of their analysis process. You are required to identify and provide details of all relevant global, reginal, and domestic factors including Environmental, Social, Corporate Governance which might affect the company.