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Author: MalaccaSecurities   |   Latest post: Tue, 28 Sep 2021, 8:51 AM

 

Protasco Bhd - Signs of improvement

Author: MalaccaSecurities   |  Publish date: Tue, 28 Sep 2021, 8:51 AM


Summary

  • Protasco Bhd's 2QFY21 net profit stood at RM6.4m vs. a net loss of RM1.7m recorded in the previous corresponding quarter, boosted by the higher contribution from the concession segment due to more periodic works, coupled with the mild contribution of new ventures; hotel and hospitality as well as clean energy segment. Revenue for the quarter increased 10.2% YoY to RM189.5m.
  • For 6MFY21, cumulative net profit stood at RM6.5m vs. a net loss of RM4.2m recorded in the previous corresponding quarter. Revenue for the period grew 29.7% YoY to RM398.5m. The reported net profit came within expectations, making up to 47.1% of our net profit forecast of RM13.6m. We expect further recovery is in store towards the remainder of the year with kitchen sinking exercises completed in FY20.
  • Expectedly, it was another quiet quarter for Protasco amid the lack of new construction contracts in 2Q21. We remain firm on our stance that the remainder of the year will remain quiet for the construction segment. Still, Protasco will continue to leverage on its expertise in the construction of low-cost housing projects; PPAM and we note that tenderbook is currently at approximately RM3.00bn.
  • On the property development segment, the joint mixed residential development project in Tampin, Negeri Sembilan, which has an estimated GDV of RM371.6m will be launched in 4Q21 (after being postponed in 2020). The development period is expected to be approximately seven years.
  • On a brighter note, the maintenance segment is expected to support the weakness across other segments, back by the long-term concession agreement that will ensure recurring stream of income till 2029. We remain upbeat on Protasco’s prospects in the concession segment to tap into allocation for the construction and upgrading of rural roads under the upcoming Budget 2022.
  • Moving forward, the implementation of Full Movement Control Order (FMCO) may continue to beset the construction sector. Still, their new ventures; hotel and hospitality as well as clean energy have proven to be a success, although contribution is expected to remain miniscule over the foreseeable future.

Valuation & Recommendation

  • Given that the reported earnings came within our expectations, we made no changes to our earnings forecast. We maintained our HOLD recommendation on Protasco, with an unchanged target price of RM0.24.
  • Our target price is derived via a sum-of-parts basis by ascribing a target PER of 8.0x to its FY22f fully diluted construction and concession segments, while the engineering services, education, trading, hotel and hospitality as well as clean energy business’ valuations remain pegged at target PERs of 6.0x respectively due to its smaller scale businesses. Meanwhile its property development division is pegged to BV at 0.4x amid the weak property market outlook.
  • Risks to our forecast and target price include (i) weaker-than-expected the targeted construction orderbook replenishment amount, (ii) slower work orders for the concession segment (iii) weaker property sales from new launches in its property business unit.

Source: Mplus Research - 28 Sept 2021

Labels: PRTASCO
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Mplus Market Pulse - 28 Sept 2021

Author: MalaccaSecurities   |  Publish date: Tue, 28 Sep 2021, 8:48 AM


Finding stability

Market Review

Malaysia:. The FBM KLCI (+0.1%) was boosted by the eleventh-hour buying support in selected banking and telco heavyweights as the key index recouped all its intraday losses to close marginally higher. The lower liners ended mixed, while the broader market also finished mixed with the energy sector (+1.7%) taking the lead.

Global markets:. The US stockmarkets closed mixed as the Dow rose 0.2%, but the S&P 500 and Nasdaq shed 0.3% and 0.5% respectively on concern over the lofty valuations, particularly within the technology sector. European stockmarkets ended mostly higher, while Asia stockmarkets finished mixed.

The Day Ahead

The FBM KLCI rebounded from the earlier session and edged higher as investors picked up shares in midday after digesting the 12th Malaysia Plan (12MP) that highlighted economy may improve to around 4.5-5.5% and a development expenditure allocation of around RM400.0bn for 2021-2025. Several highlights under the 12MP include nationwide 5G roll-out, infrastructure project resumptions, and a greater focus on renewable energy. On a side note, the crude oil price advanced to close above the USD79 per barrel level.

Sector focus:. We expect recovery theme sectors should continue to stay under the limelight, with aviation, tourism, and consumer counters under investors’ focus. Meanwhile, the 12MP may bode well for telecommunication infrastructure companies, construction as well as technology sectors. Besides, trading interest will be seen in oil & gas counters amid firmer crude oil price.

FBMKLCI Technical Outlook

The FBM KLCI continued to trade sideways; the key index rebounded to post marginal gains albeit still hovering below the daily EMA9 level. Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI continued hovering below the 50 level. Resistance is located at 1,550-1,560, while the support is pegged along 1,515.

Company Brief

AirAsia X Bhd posted a massive RM24.63bn net loss in the three-month ended 30th June 2021, on the back of a revenue of RM72.3m. AAX has made a provision of RM23.80bn in the current quarter, though it should be highlighted that the contractual liabilities for which the provision is made will be waived upon a successful completion of the proposed debt restructuring exercise. No comparison figures were made as AAX has changed its financial year end from 31st December to 30th June. (The Star)

Straits Energy Resources Bhd has entered into a heads of agreement with Seashore Technologies Pte Ltd to collaborate on 4G and 5G related projects in the oil and gas industry. In addition to participating in the 4G and 5G rollout, the company is also targeting digital transformation of the oil and gas industry, especially in the areas of automation, surveillance, remote operations and big data analytics. (The Star)

Protasco Bhd’s 2QFY21 net profit stood at RM6.4m vs. a net loss of RM1.7m recorded in the previous corresponding quarter, boosted by stronger contribution by its road maintenance division. Revenue for the quarter improved 10.2% YoY to RM189.5m. (The Star)

Dolomite Corporation Bhd has been classified as an affected listed issuer under Practice Note 17 after it was unable to pay its debts as its liabilities have far exceeded its assets. As of 31st December 2020, Dolomite has net liabilities of RM59.6m. (The Star)

Axiata Group Bhd's indirect wholly-owned subsidiary Axiata Investments (Indonesia) Sdn Bhd (AIISB) is selling a 5.0% stake in Indonesia-listed arm PT XL Axiata Tbk to Ferrymount Investments Ltd (FIL) for 1.44tn Rupiah (RM423.5m) or 2,700 Rupiah (RM0.79) per share. AIISB currently holds a 66.5% stake in XL. (The Edge)

Aemulus Holdings Bhds wholly-owned subsidiary Aemulus Corp Sdn Bhd (ACSB) has clinched new orders worth RM4.5m. The new orders were given by a customer in Malaysia for the delivery of test systems for the enterprise storage market but the name of the customer was not specified. (The Edge)

Handal Energy Bhd has bagged a five-year contract from ExxonMobil Exploration and Production Malaysia Inc to provide crane overhaul, repair and refurbishment services. This is the second contract it has bagged from ExxonMobil in three months. (The Edge)

AWC Bhd’s 4QFY21 net profit stood at RM2.7m vs. a net loss of RM29.9m recorded in the previous corresponding quarter, on higher operating income and lower other operating expenses. Revenue for the quarter rose 29.6% YoY to RM97.0m. (The Edge)

Malaysian Resources Corp Bhd (MRCB) has on 24th September 2021 received the final award on costs from the Asian International Arbitration Centre (AIAC), which mediated in the MRCB-George Kent (M) Bhd (MRCBGK) dispute involving both companies' shareholders’ agreement dated 8th June 2015. In the final award on costs, the arbitrator has ruled that George Kent (Malaysia) Bhd will pay MRCB RM2.1m, plus S$70,458.50 (about RM0.2m). (The Edge)

Seni Jaya Corp Bhd’s shareholders have approved the issuance of 24.3m bonus warrants on the basis of one bonus warrant for every two existing Seni Jaya shares at its extraordinary general meeting. The exercise price of the warrants will be determined later. (The Edge)

MyNews Holdings Bhd’s 3FY21 net loss widened to RM14.9m, from a net loss of RM6.1m recorded in the previous corresponding quarter, dragged down by weaker retail performance, which saw its food processing division sinking into the red. Revenue for the quarter declined 14.7% YoY to RM93.9m. (The Edge)

Hextar Global Bhd has executed an RM50.0m financing facility from HSBC Amanah Malaysia Bhd to finance its purchase of Nobel Synthetic Polymer Sdn Bhd and Nobel Scientific Sdn Bhd, collectively known as the Nobel Group. The facility is expected to increase its consolidated gearing from 0.5x to 1.2x. The facility will be secured by way of corporate guarantee by its wholly-owned Hextar Chemicals Sdn Bhd. (The Edge)

 

Source: Mplus Research - 28 Sept 2021

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Mplus Market Pulse - 27 Sept 2021

Author: MalaccaSecurities   |  Publish date: Mon, 27 Sep 2021, 11:06 AM


Tabling of 12th Malaysia Plan

Market Review

Malaysia:. The FBM KLCI (-0.5%) pullback after erasing all its intraday gains from the start of the trading bell as sentiment turned dour following the lingering concern over China's Evergrande Group defaulted a US$83.5m coupon bond payment. The lower liners retreated, while the broader market ended mostly lower.

Global markets:. The US stockmarkets edged mildly higher as the Dow added 0.1% after recovering from its intraday losses as traders turned defensive following the China’s Evergrande Group’s debt woes and prospectus of reduction in US stimulus. European stockmarkets were downbeat, while Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI finished the volatile week in the negative territory, mirroring the weakness across China and Hong Kong stock markets amid investors’ fret over Evergrande debt concerns; the key index was mainly dragged by TENAGA and selected banking heavyweights. The local bourse may remain sideways with investors eyeing on the 12th Malaysia Plan (12MP) which will be tabled today; we noticed construction and property sectors have some trading activities prior to this event. Commodities wise, the crude oil price rose above the USD78 level, while the CPO price declined. Baltic Exchange Dry Index still hovered at its 12 years high despite a retreat on Friday.

Sector focus:. With the adult vaccination rate increased to 83.1%, the government’s prediction to reopen cross state travel in 3 weeks might benefit the aviation and tourism counters. Other sectors such as consumer and technology may also trend higher. Besides, the firmer crude oil price may shine a light on the oil & gas sector.

FBMKLCI Technical Outlook

 

The FBM KLCI retreated as the key index still closed below the daily EMA9 level. Technical indicators were negative as the MACD Histogram has extended a red bar and the RSI hovered below the 50 level. Resistance is located at 1,550-1,560, while the support is pegged along 1,515.

 Company Brief

VS Industry Bhd’s 4QFY21 net profit fell 24.2% YoY to RM41.5m, owing to a one-off impairment on the investment in an associate amounting to RM25.0m. Revenue for the quarter, however, rose 6.6% YoY to RM941.1m. A fourth interim dividend of 0.5 sen per share and a final dividend of another 0.5 sen per share was proposed, subject to shareholders’ approval at the upcoming annual general meeting. (The Star)

Hong Seng Consolidated Bhd has entered into a share sale agreement with Robust Potential Sdn Bhd for the disposal of 100.0% equity interest in Hong Seng Priority Management Sdn Bhd (HSPM) for RM34.5m. The sale of 2.0m ordinary shares of its hire purchase business will result in an estimated gain of about RM31.2m. The proceeds will mainly be used for working capital purposes for the group’s healthcare and glove businesses. (The Star)

Bursa Malaysia Securities has queried Sam Engineering & Equipment (M) Bhd following the recent sharp rise in the price and volume of its shares. The regulator had advised investors are advised to take note of the company’s reply to the above unusual market activity (UMA) query when making their investment decision. (The Star)

FGV Holdings Bhd is believed to be eyeing its maiden oil palm venture in India's State of Telangana after news reports indicated that FGV representatives had met government officials there on 22nd September 2021 to propose the setting up of an oil palm processing unit in Sircilla, and other parts of the State. (The Edge)

NTPM Holdings Bhd's 1QFY22 net profit rose 7.8% YoY to RM15.8m, on the back of higher unrealised gain on foreign exchange of RM5.5m. Revenue for the quarter, however, slipped 3.1% YoY to RM173.8m. A first interim dividend of 0.8 sen per share, payable on 29th October 20212 was declared. (The Edge)

Dagang NeXchange Bhd (DNeX) recorded a net profit of RM116.7m for its 6QFY21 on revenue of RM45.9m after changing its financial year end from 31st December to 30th June. The reported figures mainly boosted by a fair value of oil reserves and goodwill from its acquisition of Ping Petroleum Ltd. (The Edge)

Analabs Resources Bhd's 1QFY22 net profit rose 49.2% YoY to RM8.2m, thanks to higher pipe laying and rehabilitation segment contribution, and higher dividend income that offset the lower contributions from chemicals division and recycled products division. Revenue for the quarter, however, fell 2.5% YoY to RM27.0m. (The Edge)

Federal International Holdings Bhd's 50.0%-owned joint venture outfit has inked a Memorandum of Understanding (MoU) with SPIC Energy Malaysia Bhd to acquire a stake in some operating solar energy assets. The collaboration will focus on the acquisition of a solar farm, which would then undergo a process of repair and upgrade under a team led by SPIC. (The Edge)

AMMB Holdings Bhd (AmBank) has continued its share buy-back exercise after a three-month hiatus since June 2021. The banking group spent RM3.5m to acquire 1.1m shares in four transactions between 17th September 2021 and 22nd September 2021. The shares were acquired between RM3.17 and RM3.22 per share, which comes up to an average of RM3.21 per share. (The Star)

 

Source: Mplus Research - 27 Sept 2021

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Market Chat - 4Q21 Outlook & Strategy - Recovery begins with an ENDemic

Author: MalaccaSecurities   |  Publish date: Mon, 27 Sep 2021, 11:01 AM


  • We believe Covid-19 may turn endemic as more than 80% of the adult population has been vaccinated. That may provide potential economic recovery going forward and we are anticipating some goodies for the construction, tourism, and consumer sectors in the upcoming Budget 2022 to boost the economy.
  • Recovery theme play should be interesting under the NRP from 4Q2021 going into 2022 as business activities are likely to return to normalcy by then.
  • Also, we like technology and telco on the back of higher adoption for 5G and IoT devices, electric vehicles as well as the 5G rollout story in Malaysia.

Covid-19 status

  • Subsiding Covid-19 sub-indicators. Despite the daily cases on the local front still hovering above 15k mark, most of the important indicators such as death toll, hospitalisation rate, ICU occupancy are on a declining trend since two weeks ago.
  • Smooth vaccination progress. Nearly 60% of the total population has achieved fully vaccinated status (2 doses), while about 70% of the total population have done at least 1 dose. Meanwhile, Klang Valley (KV) is getting nearer to the 80% mark on the fully vaccinated status.
  • Malaysia in gradual recovery mode… Kedah is currently under Phase 1 and most of the states are in Phase 2 and Phase 3. Meanwhile, Labuan and Negeri Sembilan are the regions with Phase 4 status under the National Recovery Plan. PM has announced that offices will be allowed to operate under certain conditions from 17th Sept 2021 if their workforce is 40-60% fully inoculated. Also, interstate travel and tourism activities are allowed when adult vaccination rate is above 90%.
  • Crucial 80% target. Although most of the indicators are pointing for a recovery, the downside risk could be the Delta variant. Hence, the 80% fully vaccinated target for Malaysia citizens will be important for the economic recovery going forward. Still, wearing facemasks and social distancing should continue to reduce daily infections.

Economic review and outlook

  • The Federal Reserve is less dovish. The Fed maintained its interest rate and asset purchase programme direction, but signals potential interest rate hike by end-2022. However, the next meeting in November may send more clues to future monetary policies. Do note that the Fed is purchasing at least USD120bn of bonds monthly.
  • Stimulus packages should be cushioning the downside risks. Over the past 1.5 years, Malaysia has put in efforts releasing stimulus packages, worth roughly RM380bn to support the economy. We opine these measures are able to cushion the downside risk. However, to reboot the economy to the fullest potential we think the government will need to provide more boosters in the upcoming Budget 2022.
  • Near term domestic focus. Domestic driven catalysts are likely to be seen in Budget 2022, as the travel borders remained restricted. Thus, higher development expenditure is expected and may benefit the construction sector, while measures or policies related to domestic tourism, automotive and property sectors could be crafted to rekindle the domestic consumption activities.
  • Lower expectation on economic growth. In 2020, Malaysia’s GDP contracted -5.6% YoY. Based on Bloomberg consensus, Malaysia’s GDP is projected to grow at a rate of 4.1% and 5.7% in 2021-2022. Do note that MoF has toned down their projections for 2021 to 3-4% (vs. 6.5-7.5% in Budget 2021), and this will be a realistic target as we are coming out of the Covid-19 pandemic environment.

Market review and outlook

  • Global markets look overvalued, while the local market is at a discount. The MSCI World Index and S&P500 are trading at 24.2x and 26.7x vs. 10Y avg PE of 19.7x and 19.5x, respectively, while the FBM KLCI is trading at 14.9x PE (10Y avg PE of 17.7x).
  • Trading activities slowed down, but foreign funds are returning. YTD average daily trading value (ADTV) dropped 26.2% to RM3.75bn in 2Q21 (1Q21: RM5.08bn). QTD, ADTV has declined further to RM2.85bn. Nevertheless, foreign investors have turned net buyers for the month of August, scooping up RM1.05bn in equities, while MTD registered another RM847.9m of buying flows in the local exchange.
  • Big caps were flat, but small caps gained strength. In 3Q21, the FBMKLCI was flat, while FBM Small Cap and FBMACE added 3.0% and 3.1%, respectively. Overall, technology (+23.0%) was the leading sector, followed by the industrial products (+7.7%) sector. Meanwhile, the healthcare and energy sectors lost -13.7% and -9.9% respectively.
  • Supercycle commodities are still upward trending. Most of the commodities that have rallied under this Covid-19 pandemic due to shipping disruptions and supply constraints could remain elevated. However, technical readings on Bloomberg Commodity Index might be forming bearish divergence signal.

4Q21 Strategy – Recovery begins with an ENDemic

  • Covid-19 induced recession to regain momentum. Economy contracted in 2020, but we opine that the recovery is on its way. With the help of a smooth vaccination drive, 80% of Malaysia’s adult population are fully vaccinated with Covid-19 vaccine and it will be meaningful for businesses to operate under comfortable conditions with less severe Covid-19 conditions. Eventually, rebooting the economic activities in a broader manner and returning to normalcy by 2022.
  • Restarting the construction is crucial… Given the international travel restrictions are not uplifted, we expect more infra works to be seen in the upcoming Budget 2022 and that should kick start the economy at least for the domestic front. Also, we favour the building material segment, which is the proxy to the construction sector.
  • …and revitalising the domestic economy. While waiting for the international borders to be uplifted, domestic tourism will be important in stimulating the economy. With the Langkawi travel bubble pilot project started recently, we feel the revenge spending is surfacing in a significant manner and that should be a decent catalyst for tourism, aviation and consumer related stocks.
  • Technology sector is likely to be the winner. Technology sector continues to rise despite the chip shortages issues globally; the Bursa Technology Index rose 39% YTD. We believe the adoption in 5G and IoT devices, as well as higher demand in electronic gadgets under the Covid-19 environment will remain as the main catalysts for the sector. Meanwhile, the hype in electric vehicles will continue to provide positive sentiment for the sector.
  • Progressive 5G rollouts in Malaysia. Malaysia has setup the National 5G Task Force in Nov 2018 and introduced Jalinan Digital Negara (JENDELA) in Aug 2020 to provide wider coverage and better quality of broadband experience for the Rakyat and it was further supported by the Digital Economy Blueprint – MyDIGITAL that focuses on the rollout of 5G technology going forward, where Malaysia’s 5G network and infrastructure across the whole nation will be done by Malaysia’s single wholesale 5G-network operator - Digital Nasional Berhad (DNB).

Sector and stock picks for 2Q21

  • Building Materials: OKA, SCGBHD, OMH
  • Construction: AME, JAKS
  • 5G-related: BINACOM, OCK, ROHAS
  • Healthcare: OPTIMAX, SCOMNET
  • Plastic/ paper packaging: BPPLAS
  • Technology: FRONTKN, GREATEC, KGB, KRONO
  • Tourism: GENM, GENTING
  • Transport & Logistics: AIRASIA, AIRPORT

AIRASIA – Domestic travel bubble to get the ball rolling

  • AIRASIA is the largest multinational low-cost airline headquartered in Malaysia by fleet size and destinations; the group operates scheduled domestic and international flights to more than 165 destinations spanning 25 countries.
  • Domestic travel is restarting as 80% of the adult population has taken the Covid-19 vaccine. Langkawi is the first travel bubble pilot project and may extend to various tourism spots going forward, when the Covid-19 vaccination rate hit 90%.
  • Waiting the international borders to be uplifted. We expect revenge travelling and spending to return once the Covid-19 subsides and the borders are being uplifted; that should boost the aviation industry to the fullest potential.

JAKS – Renewable energy to take the lead

  • JAKS is a medium scale contractor with involvement in the property sector and has diversified recently into power-related sectors that will provide long-term sustainable income for more than 20 years.
  • Establishing its footprint in the renewable energy sector through the 2 MoU signed with Qhazanah Sabah and T&T Group in Vietnam to improve long-term earnings visibility through solar, hydro and gas-fired power solutions.
  • Tapping into the revival of the construction sector in the upcoming Budget 2022, which expects the rollout of mega infrastructure projects.

OKA – Gaining momentum alongside the construction sector

  • OKA engaged in manufacturing and sale of precast concrete products and trading of ready-mixed concrete that are used in the drainage, sewerage, buildings and water related infrastructure works.
  • Construction activities to restart. With the smooth vaccination rate, construction activities are restarting in tandem with the NRP and Budget 2022 may provide some booster to the sector, eventually benefiting the building material segment.
  • Solid balance sheet and steady dividend paymaster. As of 1Q22, OKA net cash stood at RM48.0m that translates to c.25% of its market cap. OKA has a solid track record in paying dividends and indicated yield stood at 4-5%.

OCK – Firing up both the telco and renewable energy segments

  • One of the leading telecommunication network services providers with 4,330 telco sites in ASEAN region and will be leveraging on the infrastructure developments on rollout 5G network in Malaysia.
  • Overseas ventures in Myanmar and Vietnam may provide long term and sustainable earnings visibility while undertaking the rapid expansion plans alongside with commitment to drive the towers' tenancy ratio.
  • Involvement in green energy as OCK operates 17 solar farms with a combined capacity of 11.3MW in West Malaysia and will participate in large-scale tenders and proposed joint ventures with state governments over the foreseeable future.

SCGBHD – Cables and wires producers for power and communications

  • SCGBHD engaged in manufacturing of cables and wires for power distribution and transmission, communications as well as control and instrumentation applications. SCGBHD is expected to transfer to the main market by 4Q21.
  • Secured RM30.4m contract from TM. The group has secured a rectifier systems supply contract from TM and to be fulfilled over 30 months from Sept 2021.
  • SCGBHD to expand into new products. Although SCGBHD focuses on power cables, they are developing new products into automotive, elevator and communications industries that should bode well with the 5G rollout as well as the EV trend.

KGB – Still riding the semiconductor supercycle

  • Ultra High Purity (UHP) specialist, backed by multinational clients and well positioned to leverage on the semiconductor industry supercycle through the newly setup fabrication plant in China.
  • Industrial gas to see improvement in utilisation rate pending the Halal certification application for its LCO2 plant to facilitate its plan to penetrate the food and beverage (F&B) segment.
  • Record high orderbook of RM902.0m as of Sep-2021 will propel earnings growth over the next 2 years.

KRONO – Cloud services demand may continue to rise

  • KRONO provides enterprise data management (EDM) solutions, such as (i) IT infrastructure optimisation and (ii) data protection. They have presence in most of the SEA countries, as well as India, Taiwan, Hong Kong and China.
  • Profitable quarters despite Covid-19 pandemic. KRONO only registered one negative quarter in 1Q20, while net profit has normalised over the past two quarters. For 2Q22, it has registered RM5.1m of net profit.
  • Acquired remaining stake in Quantum China Ltd (QCL). In May 2021, KRONO will acquire the remaining 83.3% in QCL for RM150m; this acquisition will provide a profit warranty of USD2m and USD2.5m for FY22 and FY23, respectively.

OPTIMAX – Higher foot traffic and surgeries expected

  • One of the leading eye specialist services providers that offers a wide range of eye surgeries and services, backed by an extensive network of eye specialist centres.
  • Ongoing expansion of eye specialist clinics towards east coast in Peninsular Malaysia and East Malaysia will bring in new resident surgeons and expand customer base, thereby contributing to top and bottom line growths.
  • Easing restrictions amid increasing vaccination rate in Malaysia could drive recovery in foot traffic and number of surgeries conducted moving forward.

OMH – Benefiting from elevated FeSi and SiMn prices

  • OMH engaged in mining and trading raw ores together with the smelting and marketing of processed ferro alloys (ferrosilicon and manganese alloys). Ferro Manganese, Silico-Manganese and Ferrosilicon are used in steel mills and foundries, while Metallic Silicon is used in chemicals, solar and electronics segments.
  • Ferrosilicon (FeSi) and Silico-manganese (SiMn) prices rocketed. As China has its energy consumption target for each province and energy intensive industries are now limiting production, translating to lower supply of FeSi and SiMn are affected.
  • Benefitting from this supply disruptions environment. We believe OMH has the advantage under this situation, given its production facilities are mainly in Malaysia, coupled with its long-term access to low-cost electricity.

Source: Mplus Research - 27 Sept 2021

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penglum pls remove this
27/09/2021 5:19 PM
calvintaneng D) AND BETWEEN THIS TIME IS COLD COLD WINTER

Bank of America forecast this will be a Very Cold Winter & OIL will Spike Up to USD100 per barrel

See



Sept 13 (Reuters) - Bank of America Global Research said it could bring forward its $100 per barrel oil price target to the next six months from mid-2022 if the winter is colder than usual, potentially driving a surge in demand and widening a supply deficit.


BRENT OIL ALMOST USD80 NOW

WILL TRIGGER BIODIESEL ENGINE

BOOST SOYBEAN & PALM OIL FOR BIODISEL : UP UP & UP

DON'T MISS JTIASA NOW

https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/2021-09-23...
28/09/2021 10:42 AM
stockraider Yes buy palmoil stock loh!

Palm oil Sustained good prospect with undervalued share price


Posted by calvintaneng > Sep 28, 2021 10:42 AM | Report Abuse

D) AND BETWEEN THIS TIME IS COLD COLD WINTER

Bank of America forecast this will be a Very Cold Winter & OIL will Spike Up to USD100 per barrel

See



Sept 13 (Reuters) - Bank of America Global Research said it could bring forward its $100 per barrel oil price target to the next six months from mid-2022 if the winter is colder than usual, potentially driving a surge in demand and widening a supply deficit.


BRENT OIL ALMOST USD80 NOW

WILL TRIGGER BIODIESEL ENGINE

BOOST SOYBEAN & PALM OIL FOR BIODISEL : UP UP & UP

DON'T MISS JTIASA NOW
28/09/2021 10:45 AM

Mplus Market Pulse - 24 Sept 2021

Author: MalaccaSecurities   |  Publish date: Fri, 24 Sep 2021, 9:00 AM


Stability ensured

Market Review

Malaysia:. The FBM KLCI (+0.7%) recovered all its previous session losses, taking cue from the positive developments on Wall Street overnight as the key index was lifted by recovery in selected banking and plantation heavyweights. The lower liners extended their gains, while the broader market finished mostly upbeat.

Global markets:. The US stockmarkets extended their gains as the Dow climbed 1.5% to recoup all its weekly losses, boosted by optimism of economic outlook painted by the US Federal Reserve. Both the European and Asia stockmarkets finished mostly higher.

The Day Ahead

We think that there will be more immediate upsides for Malaysian equities towards the end of the week, on the back of the extended bargain hunting activities with the key index now finding stability at current levels. With further clarity on US fiscal policy direction and the calmer Chinese markets, this would help to provide some measure of stability after enduring a volatile spell over the past couple of weeks. Elsewhere, the broader market will be largely supported by rotational play with traders capitalising on the improvement in trading activities alongside with the positive market undertone.

Sector focus:. We reckon that the recovery theme sectors will remain as the focal point with nationwide adult population vaccination rate now above 80% level. The construction sector is poised for some limelight as construction activities gather pace, while the technology sector may trade higher, tracking the gains on Nasdaq overnight.

 FBMKLCI Technical Outlook

 

The FBM KLCI formed a gap up candle to close higher after hovering largely in the positive territory yesterday. Technical indicators have now turned mixed as the MACD Histogram has turned green, while the RSI remained below the 50 level. Resistance is located at 1,550-1,560, while the support is pegged at 1,515.

 Company Brief

Yinson Holdings Bhd’s 2QFY22 net profit climbed 25.6% YoY to RM126.0m, boosted by higher contribution from its engineering business. Revenue for the quarter grew 5.9% YoY to RM1.05bn. An interim dividend payout of 4.0 sen a share, payable on 17th December 2021 was declared. (The Star)

Pan Malaysia Corporation Bhd (PMC) has proposed to acquire a 51.0% share in A&W (Malaysia) Sdn Bhd from Inter Mark Resources Sdn Bhd for RM21.0m. The acquisition would be satisfied via a combination of cash amounting to RM11.6m and a transfer of 63.1m PMC shares. (The Star)

KPower Bhd’s 4QFY21 net profit earnings slipped 19.1% YoY to RM5.9m, impacted by the Covid-19 pandemic. Revenue for the quarter, however, swelled 157.4% YoY to RM101.3m. (The Star)

CIMB Group Holdings Bhd's foreign shareholding rose to 22.4% in August 2021; the highest since June 2020. August 2021 foreign shareholding figure is also the highest so far this year, beating the high of 22.1% in the previous two months (June 2021 and July 2021). (The Edge)

Hock Seng Lee Bhd's (HSL) 2QFY21 net profit jumped 121.6% YoY to RM8.8m, thanks to stronger contribution from its construction segment. Revenue for the quarter gained 71.9% YoY to RM142.8m. (The Edge)

Bursa Securities has rejected Sapura Energy Bhd's application for a one-month extension to announce its latest quarterly results. The oil and gas outfit submitted its application on 14th September 2021 for the one-month extension until 30th October 2021. The group is required to file its results for the quarter ended 31st July 2021 by 30th September 2021. (The Edge)

Dagang NeXchange Bhd (DNeX), via its 90.0% owned subsidiary Ping Petroleum Ltd has announced the completion of the acquisition of the remaining 50.-% interest in the UK North Sea Block containing the Avalon Oil Development. The acquisition is from Summit Exploration and Production Ltd, a wholly-owned subsidiary of Sumitomo Corp, for an initial cash consideration of US$5.0m (RM21.1m) with further contingent payments, giving a total price of US$17.0m (RM71.7m). (The Edge)

United Malacca Bhd’s 1QFY22 net profit soared 486.5% YoY to RM20.8m, as higher crude palm oil (CPO) and palm kernel prices saw its Indonesian operations break even while Malaysian operations showed growth. Revenue for the quarter added 32.4% YoY to RM114.9m. (The Edge)

AirAsia Group Bhd expects a strong recovery for air travel in all key domestic destinations and for international flights to resume in the near future, complemented by stringent health and safety protocols that the airline has put in place. Following the government's announcement of the resumption of interstate travel and the reopening of tourism activities once the vaccination rate for adults reaches 90.0% in Malaysia, the budget carrier is geared up to fully restore its domestic and international services. (The Edge)

Latitude Tree Holdings Bhd's 4QFY21 profit surged 687.4% YoY to RM2.6m, on the back of higher revenue. Revenue for the quarter increased 55.9% YoY to RM216.0m. (The Edge)

Hextar Global Bhd has reported that its shareholders have approved the proposed acquisition of chemical derivatives, coating and related products manufacturer Nobel Group. It will now proceed to complete the acquisition and commence the integration of their business operations and is expected to contribute to its earnings from 4QFY21 onwards. (The Edge)

 

Source: Mplus Research - 24 Sept 2021

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Mplus Market Pulse - 23 Sept 2021

Author: MalaccaSecurities   |  Publish date: Thu, 23 Sep 2021, 10:05 AM


Recovery in store

Market Review

Malaysia:. The FBM KLCI (-0.1%) staged a mild pullback after hovering in region for the entire trading session, dragged down by weakness in selected telco and plantation heavyweights. The lower liners, however, rebounded, while the broader market closed finished mostly higher, anchored by the technology sector (+1.3%).

Global markets:. The US stockmarkets advanced as the Dow jumped 1.0% despite US Federal Reserve officials signal for tapering of bond buying program and interest rate hikes in 2022; suggesting that economic recovery is well on track. European stockmarkets extended their gains, while Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI ended the day mildly negative as investors mulled the possible imposition of capital tax rate and one-off higher tax rate with windfall profits. On the broader market, shares linked to telecommunications network infrastructure soared on the JENDELA tender news, which was said to be issued within 4 weeks. We opine that the overnight gains on Wall Street, news on cross state travel to be allowed when the adult population vaccination rate reaches 90.0% coupled with government’s decision to move three more state to the next phase of NRP could lift investors’ sentiment.

Sector focus:. As three more states are transitioning into next phase of NRP which signals brighter economic recovery going forward and it should position well for the recovery theme sectors, investors may look out for aviation, tourism, and consumer related stocks. Meanwhile, we expect telco related stocks to extend its rally move today amid the JENDELA tender news. 

FBMKLCI Technical Outlook

 

The FBM KLCI back into the negative territory amid lacklustre trading. Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI continued hovering below the 50 level. Resistance is located at 1,550- 1,560, while the support is pegged along 1,515.

Company Brief

Opcom Holdings Bhd’s 1QFY22 net profit stood at RM2.6m vs. a net loss of RM0.8m recorded in the previous corresponding quarter, on the back of improved revenue. Revenue for the quarter jumped 192.9% YoY to RM22.9m. (The Star)

Favelle Favco Bhd’s 2QFY22 net profit grew 79.0% YoY to RM13.5m, mainly due to increase in sales. Revenue for the quarter added 57.2% YoY to RM153.1m. (The Star)

Heitech Padu Bhd has secured a contract from the Road Transport Department (RTD) worth RM36.3m. It has signed a letter of award (LoA) to provide RTD with maintenance and technical support for its ICT infrastructure as well as the vehicle and driver information system (mySIKAP). The contract is from 6th September 2021 to 30th September 2022. (The Star)

Sedania Innovator Bhd’s 51.0%-owned health tech subsidiary Offspring Inc Sdn Bhd is expanding into the Middle East, starting with Bahrain. Offspring focuses on early childcare solutions, offering, among others, products such as baby diapers, wet wipes, skincare and home care products that are made of naturally derived, organic, sustainable and biodegradable materials. (The Edge)

IOI Properties Group Bhd's wholly-owned subsidiary Boulevard View Pte Ltd has submitted a S$1.51bn (RM4.68bn) bid to buy an estimated 0.8-ha (7,817.6 sqm) leasehold land known as the White site in Singapore's Marina View enclave under the country's Urban Redevelopment Authority's invitation to tender, which saw Boulevard View become the sole bidder. (The Edge)

Solarvest Holdings Bhd is planning further diversification in the solar energy business. Solarvest is moving aggressively into solar energy investments that are working on as well as leveraging Powervest, which is the all-new solar financing programme that will strengthen its position in the solar energy market. (The Edge)

Rhone Ma Holdings Bhd via its subsidiary A2 Fresh Sdn Bhd, has entered into a joint venture agreement with Kulim (Malaysia) Bhd to develop, operate and manage a potential dairy project. The initial investment required for the project will be up to RM41.4m, which will be funded through equity in the form of subscription of shares by the shareholders in proportion to their shareholding ratio in the special purpose vehicle company. (The Edge)

Glomac Bhd's 1QFY22 net profit fell 60.7% YoY to RM1.7m, impacted by the very difficult operating environment arising from the implementation of Movement Control Order 3.0. Revenue for the quarter slipped 38.5% YoY to RM28.8m. (The Edge)

Vizione Holdings Bhd has entered into an agreement to develop 2,500 affordable apartment units with related infrastructure in Putrajaya. The agreement for the RM500.0m gross development value project was inked between Vizione's wholly owned unit Vizione Builder Sdn Bhd and Pan Sejati Development (M) Sdn Bhd. (The Edge)

Scomi Group Bhd’s wholly-owned Scomi Capital Sdn Bhd has entered into a memorandum of understanding with ODESI eCOB Sdn Bhd to explore opportunities to develop an urban solar programme to sell and purchase electricity generated from solar photovoltaic systems. (The Edge)

CIMB Group Holdings Bhd has committed to a series of strengthened sustainability commitments, including the mobilisation of RM30.0bn towards sustainable finance to be an ASEAN sustainability leader by 2024. CIMB has set a higher sustainability finance target guided by the group's Green, Social, Sustainable Impact Products and Services framework. (The Edge)

Sarawak Consolidated Industries Bhd (SCIB) has announced that its wholly-owned subsidiary SCIB Properties Sdn Bhd has been awarded a RM137.0m contract to build housing for civil servants. The developer of the project, Awana JV Suria Saga Sdn Bhd in Muallim, Perak has nullified Puncak Gemilang Melati Sdn Bhd as the main contractor and appointed SCIB Properties to take over as the main contractor. (The Edge)

TAFI Industries Bhd has entered into five joint-venture agreements to develop mixed housing projects in Pahang with an estimated total gross development value of RM621.5m. For all five projects, TAFI's wholly-owned subsidiary Gerak Mahir Sdn Bhd will be bearing the cost of the development, while the joint venture partners will be providing the project land. (The Edge)

Berjaya Land Bhd's 4QFY21 net loss widened to RM126.3m, from a net loss of RM108.5m recorded in the previous corresponding quarter as the lockdown restrictions impacted its business operation. Revenue for the quarter, however, jumped 128.1% YoY to RM1.24bn. (The Edge)

 

Source: Mplus Research - 23 Sept 2021

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