Market Review

Malaysia: The FBM KLCI (-0.3%) was unable to hold onto its intraday gains as weakness were largely evident amongst the gloves and banking heavyweights as the key index underperformed the mostly positive regional peers. Both the lower liners and the broader market ended mixed with the latter saw the energy sector (+1.9%) turned upbeat, reflecting the higher crude oil prices.

Global markets: US stockmarkets ended mostly higher after recovering from their intraday losses as the Dow and S&P climbed 0.1% each after US Federal Reserve Chairman Jerome Powell re-assured his stance on the delivery of fiscal stimulus. European stockmarkets ended mixed, while Asia stockmarkets finished higher.

The Day Ahead

In contrast with the regional gains, the FBM KLCI failed to sustain its intraday gains as the key index slipped into negative territory during the final trading hour. We expect the arrival of the second batch of Pfizer-BioNTech vaccine today and the vaccine distribution to different states will continue to attract buying interest in recovery-theme stocks moving forward. Meanwhile, crude oil price continued to remain firm above the USD65 level for the time being. Also, traders will focus on high earnings certainty sectors during this reporting season.

Sector focus: Following development in vaccine arrival and distribution, we opine that the market may look out recovery-theme sectors such as tourism and aviation. Besides, energy sector may be traded actively as Brent oil price is holding well above USD65. With selected packaging and steel related stocks registering positive growth in their results, we expect traders to focus within these sectors.

While the FBM KLCI continued to trade below the EMA120 level, consolidation may continue to take place. Technical indicators have turned negative as the MACD Histogram has extended another red bar, while the RSI was hovering below 50. Support is pegged around 1,550, while the resistance is envisaged at 1,590, followed by 1,600.

Company Brief

Genting Malaysia Bhd has invested more than USD800.0m in a new theme park, Genting SkyWorlds, which will incorporate 20th Century Studios brands and intellectual properties among its rides and attractions targeted for opening in 2Q21. The park is located some 6,000 ft above sea level at Genting Highlands. (The Star)

Nestle (M) Bhd's (Nestle Malaysia) 4QFY20 net profit ticked up 0.5% YoY to RM132.5m, underpinned by sales in Out-of-Home channels as restrictions eased. Revenue for the quarter climbed 3.1% YoY to RM1.37bn. A third interim dividend of 92 sen per share, payable on 20th May 2021 was declared. (The Edge)

Petronas Chemicals Group Bhd's (PetChem) 4QFY20 net profit rose 37.0% YoY to RM466.0m, on higher plant utilisation rate. Revenue for the quarter, however, slipped 9.0% YoY to RM3.85bn. A second interim single tier dividend of seven sen per share, payable on 25th March 2021 was declared. (The Edge)

Perak Transit Bhd’s 4QFY20 net profit grew 11.5% YoY to RM13.2m, amid contributions from a newly commenced terminal. Revenue for the quarter rose 7.6% YoY to RM35.3m. A dividend of 0.8 sen per share, payable on 21st May 2021 was declared. (The Edge)

IOI Corp Bhd’s 2QFY21 net profit increased 66.6% YoY to RM355.7m, benefiting from high crude palm oil (CPO) and palm kernel (PK) prices. Revenue for the quarter grew 25.0% YoY to RM2.45bn. An interim single tier dividend of 4.5 sen per share, payable 19th March 2021 was declared. (The Edge)

Sunway Construction Group Bhd (SunCon)’s 4QFY20 net profit fell 4.5% YoY to RM30.2m, amid a provision for a debtor and the temporary ceasing of operations due to the Covid-19 pandemic. Revenue for the quarter, however, rose 29.1% YoY to RM627.2m. A second interim dividend of 2.75 sen per share, payable 7th April 2021 was declared. (The Edge)

Petron Malaysia Refining & Marketing Bhd’s 4QFY20 net profit rose 45.1% YoY to RM42.0m, mainly due to inventory holding gains and improved refining margin. Revenue for the quarter, however, fell 48.1% YoY to RM1.51bn. (The Edge)

ATA IMS Bhd’s 3QFY21 net profit surged 165.2% YoY to RM53.3m, on strong order flows coupled with improved productivity and operational efficiency. Revenue for the quarter rose 35.5% YoY to RM1.17bn. (The Edge)

Syarikat Takaful Malaysia Keluarga Bhd’s 4QFY20 net profit climbed 37.3% YoY to RM103.2m, mainly due to savings from management expenses and release of expense reserve. Revenue for the quarter, however, declined marginally by 0.6% YoY to RM774.9m. (The Edge)

Frontken Corp Bhd’s 4QFY20 net profit grew 28.0% YoY to RM23.3m, due to improved revenue and better profit margins resulting from continual efforts to improve efficiency across the group. Revenue for the quarter added 13.7% YoY to RM101.0m. An interim dividend of 2.8 sen per share was announced. Additionally, Frontken has also proposed a bonus issue of shares and warrants on the basis of one bonus share and one bonus warrant for every two shares held by the shareholders. (The Edge)

Manulife Holdings Bhd’s 4QFY20 net profit rose 71.4% YoY to RM23.4m, boosted by gains from its equity investments. Revenue for the quarter gained 19.0% YoY to RM531.4m. The board recommended a first and final dividend of seven sen per share and shareholders may elect to reinvest their dividend in new shares. (The Edge)

Berjaya Sports Toto Bhd’s 2QFY21 net profit rose 5.0% YoY to RM65.1m, underpinned by lower prize payout and operating expenses. Revenue for the quarter, however, fell 12.4% YoY to RM1.23bn. A second interim dividend of 2.5 sen, payable on 23rd April 2021 was declared. (The Edge)

Supermax Corp Bhd founder Datuk Seri Stanley Thai Kim Sim and his wife Datin Seri Cheryl Tan Bee Geok have acquired a 3,438-sqf luxury condominium in Sunny Isles Beach in the US state of Florida. There was no specification on how much money Thai and Tan paid for the condominium. (The Edge)

AT Systematization Bhd has inked an agreement with Kenteam Sdn Bhd (KSB) to manufacture and supply nitrile examination gloves. The group said its wholly owned subsidiary, AT Glove Engineering Sdn Bhd, has reached an agreement to supply 30.0m boxes of nitrile examination gloves for a period of 12 months and allocate 10 production lines to KSB. (The Edge)

Metronic Global Bhd is expecting US$1.00bn in turnover from its monopoly of Covid-19 immune system test kit supply chain worldwide. The company has received pre-orders for a total of 50.0m test kits from companies within Southeast Asia, causing its order book to swell by US$350.0m. The first batch of orders will come from pharmaceutical groups of Thailand, Hong Kong, Indonesia, Singapore and the Philippines. (The Sun)

Source: Mplus Research - 24 Feb 2021