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Mplus Market Pulse - 19 Aug 2021

Publish date: Thu, 19 Aug 2021, 09:36 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

All materials published here are prepared by Malacca Securities. For latest offers on Malacca Securities trading products and news, please refer to: https://www.mplusonline.com.my

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Market Review

Malaysia:. The FBM KLCI (+0.1%) closed on a flattish note as investors monitored the political developments ahead of the appointment of a new Prime Minister. The lower liners finished on a mixed note, while the broader market closed mostly higher with the plantation sector (+1.1%) outperformed.

Global markets:. The US stockmarkets extended their losses as the Dow slipped 1.1% after the latest FOMC meeting suggests that the tapering of bond buying programme may take place as early by end-2021. European stockmarkets finished mixed, while Asia stockmarkets closed mostly upbeat.

The Day Ahead

Final hour bargain hunting activities sent the FBM KLCI to close higher for the second session, as the key index booked marginal gains while investors awaiting for more clarity on the political front. Despite the overnight negative Wall Street performance, we believe investors will be monitoring on the news flow regarding the new PM to be appointed and government to be formed to decide their investment exposure. Besides, traders might be brushing off the political developments and focusing on recovery theme sectors in view of the further easing of business SOP in NRP Phase 2 states. Commodities wise, both CPO and crude oil prices declined.

Sector focus:. Buying interest was noticed in glove stocks amid record high Covid19 daily infections topped above 22k. Meanwhile, we believe the recovery theme sectors such as construction, building material and property are expected to gain traction with the smooth vaccination progress. Besides, investors may focus on the plantation companies’ solid results from SIMEPLT and KLK

The FBM KLCI extended its rally as the key index continued to hover above the daily EMA9 and EMA20 level. Technical indicators remained positive as the MACD Histogram has extended a green bar, while the RSI hovered above the 50 level. Next resistance is set at 1,540, while next support level is located around 1,500.

Company Brief

Kuala Lumpur Kepong Bhd’s (KLK) 3QFY21 net profit jumped 112.6% YoY to RM783.9m, boosted by to higher palm oil prices, one-tome gains from disposals and favourable exchange rates. Revenue for the quarter added 39.4% YoY to RM5.17bn. (The Star)

Sime Darby Plantation Bhd’s 2QFY21 net profit increased 63.2% YoY to RM617.0m, due to higher realised crude palm oil (CPO) and palm kernel (PK) prices, as well as an increase in fresh fruit bunch (FFB) production. Revenue for the quarter rose 37.4% YoY to RM4.41bn. An interim dividend of 7.9 sen per share, payable on 12th November 2021 was declared. (The Star)

Samchem Holdings Bhd’s (Samchem) 2QFY21 net profit jumped 119.6% YoY to RM19.2m, due to higher sales volumes from its Malaysia, Vietnam, and Singapore markets as well as higher average selling prices of chemicals. Revenue for the quarter rose 84.8% YoY to RM371.6m. (The Star)

Kelington Group Bhd has secured an engineering contract worth RM45.0m in Singapore. The contract involved work on a specialty gas distribution system for GlobalFoundries’ new fab in Singapore. The 12-month job started on 18th August 2021 and is expected to be completed by July 2022. (The Star)

Tri-Mode System (M) Bhd has inked an agreement with Pulau Indah Industrial Park (PIIP) master developer Central Spectrum (M) Sdn Bhd for the purchase of 5.3-ac of industrial land in PIIP Phase 3, with an investment cost of RM17.0m. The land will be used to construct a new Class A warehouse and distribution hub with a built-up area of approximately 150,000-sqf. with a total investment value of RM42.0m. (The Edge)

S P Setia Bhd’s 2QFY21 net profit stood at RM74.8m vs. a net loss of RM134.3m recorded in the previous corresponding quarter, supported by a profitable property division and absence of impairment of completed inventories. Revenue for the quarter surged 226.8% YoY to RM1.08bn. (The Edge)

Widad Group Bhd has announced that its wholly-owned subsidiary Widad Builders Sdn Bhd has secured an RM53.2m contract from the Public Works Department for the construction of a new school and other facilities at SMK Bukit Mahkota in Bangi, Hulu Langat. (The Edge)

AirAsia Group Bhd’s logistics outfit Teleport is acquiring a 100.0% stake in ecommerce platform Delivereat for US$9.8m (RM41.5m) in both cash and Teleport shares, as part of its expansion in the online delivery space. The acquisition will see Delivereat come under Teleport’s umbrella by the end of September 2021. (The Edge)

Batu Kawan Bhd’s 3QFY21 net profit soared 81.7% YoY to RM386.5m, on higher revenue by its business segments. Revenue for the quarter improved 41.2% YoY to RM5.40bn. (The Edge)

Berjaya Food Bhd’s 4QFY21 net profit stood at RM14.3m vs. a net loss of RM30.2m recorded in the previous corresponding quarter, as it managed the impact of the latest Covid-19 lockdowns, undertook cost management and recognised the income upon termination of the old Starbucks reward programme. Revenue for the quarter rose 62.0% YoY to RM180.7m. (The Edge)

Grand Hoover Bhd’s wholly-owned subsidiary, Pembinaan Att Sdn Bhd, has been appointed by R.M.E. Sdn Bhd as the main contractor for an RM69.9m construction project in Terengganu. The works shall commence on 19th August 2021, and to be completed by 18th August 2024. (The Edge)

Tomei Consolidated Bhd’s 2QFY21 net profit fell 28.2% YoY to RM1.4m, as gross profit fell amid the increase in carrying cost due to higher gold prices last year. Revenue for the quarter, however, grew 92.6% YoY to RM146.6m. (The Edge)

Kawan Food Bhd’s 2QFY21 net profit fell 29.0% YoY to RM6.3m, due to lower output as it was only allowed to operate at 60.0% capacity under the Full Movement Control Order. Revenue for the quarter declined 30.6% YoY to RM55.0m. (The Edge)

Central Global Bhd has opted to downsize its proposed two-for-one bonus issue to just one bonus share for every share held, which entails an issue of up to 108.0m bonus shares from the 216.0m proposed previously. As such, a subsequent proposal for issuance of free warrants is also downsized to a cap of 108.0m warrants, from 162.0m previously. (The Edge)

Komarkcorp Bhd, after completing two rounds of private placement to fund its face mask business venture, now plans to raise up to RM81.8m through a rights issue, which entails the issuance of up to 817.8m rights shares and up to 272.6m free detachable warrants, on the basis of three rights shares and one warrant for every three shares held. The rights issue with warrants is expected to be completed by 4Q21. (The Edge)

Tasco Bhd has been certified as an authorised economic operator by the Royal Malaysian Customs Department, which enables it to offer a number of benefits to its selected customers, which include priority customs clearance both at origin and destination, lower rate of physical inspections of imported or exported goods, faster release of shipments, deferred payment of duties, as well as enhanced security and improved risk mitigation. (The Edge)

Source: Mplus Research - 19 Aug 2021

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