Malaysia: The FBM KLCI (+0.4%) extended its gains with two-third of the key index components marching higher ahead of the mid-week break. The lower liners also extended their gains, while the broader market finished mostly higher, led by the Energy sector (+1.0%).

Global markets: The US stockmarkets rebounded as the Dow (+0.03%) was boosted by easing concern over the prospect of rising interest rates. European stockmarkets finished mildly lower, while Asia stockmarkets were upbeat.

The Day Ahead

The FBM KLCI finished higher on Tuesday after a volatile session, boosted by late bargain hunting following recent selldown, coupled with the firmer crude oil prices. Market sentiment is likely to remain weak as Malaysia’s Covid-19 cases continued to increase as of this juncture, while vaccine rollout schedule is having slight delay. However, as the market sentiment has stabilised in the global context amid the easing concerns over interest rate prospects, traders may re-look into growth companies.

Sector focus: Given the firmer CPO and oil prices, traders might focus on plantation and oil & gas counters. After the technology stocks rebounded earlier this week, we expect the follow-through buying support may sustain as investors might find value in them after the corrective wave since two months ago. Besides, we continue to like essential consumer and packaging stocks amid ongoing MCO environment.

The FBM KLCI extended its gains to close in the positive territory with milder volume. Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI was hovering below the 50 level. The key index is likely to trade within a tight range below 1,600 level, with support located at 1,555-1,565, while the resistance is pegged at 1,590, followed by 1,600. 

Company Brief

Sime Darby Bhd’s 3QFY21 net profit jumped 160.9% YoY to RM300.0m, underpinned by the strong performance of the motors division, particularly in China. Revenue for the quarter increased 30.7% YoY to RM11.02bn. (The Star)

Axiata Group Bhd’s 1QFY21 net profit declined 59.8% YoY to RM75.5m, due to the accelerated depreciation of RM126.0m and the higher one-off gain registered in the previous corresponding quarter Revenue for the quarter, however, rose 0.5% YoY to RM6.10bn. (The Star)

Petronas Dagangan Bhd's 1QFY21 net profit stood at RM191.0m vs. a net loss of RM29.4m recorded in the previous corresponding quarter, on higher fuel prices. Revenue for the quarter, however, declined 22.1% YoY to RM5.10bn. An interim dividend of 14 sen a share, payable on 24th June 2021 was declared. (The Star)

Sunway Bhd’s 1QFY21 net profit fell 6.3% YoY to RM58.5m, amid lower contributions from its property and property investment segments. Revenue for the quarter, however, improved 4.7% YoY to RM1.00bn. (The Star)

Genting Bhd’s 1QFY21 net loss widened to RM331.0m, from a net loss of RM132.0m recorded in the previous corresponding quarter, due to the adverse impact of the Covid-19 pandemic on the group's leisure and hospitality operations. Revenue for the quarter slipped 46.3% YoY to RM2.20bn. (The Star)

Genting Malaysia Bhd’s (GenM) 1QFY21 net loss widened to RM483.6m, from a net loss of RM418.0m recorded in the previous corresponding quarter, due to the temporary closure of the group’s businesses in Malaysia and the UK. Revenue for the quarter tumbled 68.1% YoY to RM623.4m. (The Edge)

George Kent (Malaysia) Bhd was found to have been in breach of a shareholders’ agreement (SHA) concerning its joint-venture company (JVCo) with Malaysian Resources Corp Bhd (MRCB) under the AIAC arbitration rules on 21st May 2021. George Kent will now have to confirm its agreement in writing within 21 days to the appointment of an audit firm by the JVCo’s management to carry out an independent valuation of the latter’s shares on a discounted cash flow basis. (The Edge)

Serba Dinamik Holdings Bhd has assured its shareholders that the management has taken prompt actions to address the audit matters raised by its external auditor KPMG PLT prior to its announcement about the issue. The issue pertains to its annual statutory audit for the financial year ended 31st December 2019, but did not detail what they are. The group has also engaged potential international independent firms and are now finalising the terms of appointment to assess the veracity and accuracy of the matters brought up by KPMG after consulting with Bursa Securities. Day-to-day operations will continue as usual. (The Edge)

Malayan Banking Bhd's (Maybank) foreign shareholding has fallen from 16.6% on 30th April 2021 to 16.5% as of 12th May 2021, according to the figures on the bank's website. This is the lowest since 17th February 2017, when foreign shareholding stood at 16.2%. (The Edge)

Petronas Gas Bhd’s 1QFY21 net profit rose 40.3% YoY to RM516.4m, on lower operating cost. Revenue for the quarter, however, fell 4.2% YoY to RM1.34bn. (The Edge)

Matrix Concepts Holdings Bhd’s 4QFY21 net profit increased 41.2% YoY to RM78.5m, thanks to better margins, reduced sales and marketing expenses and tax expenses. Revenue for the quarter, however, declined 17.8% YoY to RM388.3m. A fourth interim dividend of 4 sen per share, payable on 8th July 2021 was declared. (The Star)

Boustead Plantations Bhd’s 1QFY21 net profit stood at RM12.3m vs. a net loss of RM9.6m recorded in the previous corresponding quarter on higher CPO prices. Revenue for the quarter rose 5.9% YoY to RM171.9m. A dividend of 0.3 sen per share, payable on 30th June 2021 was declared. (The Edge)

S P Setia Bhd’s 1QFY21 net profit jumped 212.3% YoY to RM75.2m, mainly driven by progressive revenue recognition from strong take-up rates achieved. Revenue for the quarter rose 49.8% YoY to RM1.05bn. (The Edge)

Affin Bank Bhd's 1QFY21 net profit fell 44.2% YoY to RM68.9m, largely on lower net gain on sales of financial instruments. Revenue for the quarter declined 13.9% YoY to RM537.6m. (The Edge)

Sanichi Technology Bhd has been hit with an unusual market activity (UMA) query by Bursa Malaysia after its share price declined by as much as 21.1%. The local bourse has asked Sanichi to disclose any corporate developments that had not been previously announced that could account for the greater trading activity. (The Edge)

UOA Development Bhd’s 1QFY21 net profit fell 70.9% YoY to RM36.1m, on lower revenue after the property developer recognised, a year earlier, higher progressive income from its United Point Residence project. Revenue for the quarter fell 62.6% YoY to RM140.2m. (The Edge)

Pos Malaysia Bhd’s 1QFY21 net loss narrowed to RM46.8m, from a net loss of RM232.4m recorded in the previous corresponding quarter, mainly due to the absence of impairments. Revenue for the quarter, however, declined 9.3% YoY to RM595.3m. (The Edge)

Ta Ann Holdings Bhd’s 1QFY21 net profit surged 299.8% YoY to RM41.0m, in part due to higher crude palm oil (CPO) prices. Revenue for the quarter grew 34.8% YoY to RM340.6m. (The Edge)

Hap Seng Consolidated Bhd's 1QFY21 net profit declined 24.7% YoY to RM120.8m, on lower contributions from its property and credit financing divisions. Revenue for the quarter fell 13.5% YoY to RM1.28bn. An interim of 10.0sen per share, payable on 23rd June 2021 was declared. (The Edge)

Padini Holdings Bhd’s 3QFY21 net profit fell 26.6% YoY to RM12.2m, as the group suffers from adverse impacts from the pandemic and the re-imposition of the Movement Control Order (MCO) by the government. Revenue for the quarter declined 24.3% YoY to RM262.9m. (The Edge)

Bursa Malaysia Bhd has disposed of 50,000 shares of CME Group Inc (previously known as Chicago Mercantile Exchange Holdings Inc) Class A common stock for US$18.9m (RM44.9m). The proceeds of the sale will be used to fund its initiatives to ensure continuous development to the ecosystem and infrastructure of the exchange. (The Edge) 

Star Media Group Bhd’s 1QFY21 net loss widened to RM14.1m, from a net loss of RM4.0m recorded in the previous corresponding quarter, mainly due to lower revenue from the print segment. Revenue for the quarter fell 35.2% YoY to RM42.6m. (The Edge)

Muda Holdings Bhd's 1QFY21 net profit jumped 102.5% YoY to RM35.4m, on the back of better selling price of industrial paper and paper packaging products. Revenue for the quarter grew 22.3% YoY to RM415.0m. (The Edge)

Perak Transit Bhd's 1QFY21 net profit rose 55.6% YoY to RM13.4m, as lower cost of sales, finance costs, and higher revenue offset higher tax expenses incurred. Revenue for the quarter rose 19.3% YoY to RM35.5m. An interim dividend of 0.8 sen per share, payable on 23rd August 2021 was declared. (The Edge)

Cahya Mata Sarawak Bhd’s (CMS) 1QFY21 net profit surged 350.2% YoY to RM77.8m, due to higher contributions from the cement, trading, and property development divisions. Revenue for the quarter increased 6.7% YoY to RM202.1m. (The Edge)

KPJ Healthcare Bhd's 1QFY21 net profit tumbled 66.3% YoY to RM13.0m, due to lower patient numbers following the implementation of the second Movement Control Order (MCO 2.0). Revenue for the quarter fell 9.0% YoY to RM605.9m. (The Edge)

Source: Mplus Research - 27 May 2021