M+ Online Research Articles

Mplus Market Pulse - 20 Aug 2021

Publish date: Fri, 20 Aug 2021, 10:12 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 (-0.7% YoY) retreated alongside with the weakness across regional peers on quick profit taking activities after lingering in the negative zone for the entire trading session. The lower liners were downbeat, while the broader market ended mostly lower with the healthcare sector (-1.0% YoY) underperformed.

Global markets:. The US stockmarkets closed on a mixed note as the Dow fell 0.2% on concern over the rapid spread of Delta variant, coupled with the earlier-thanexpected trimming outlook of stimulus measures from the Federal Reserve. European stockmarkets endured a volatile session, while Asia stockmarkets finished mostly lower.

The Day Ahead

The FBM KLCI snapped two-session winning streak and closed lower in tandem with regional peers, as investors booked profit amid a fragile sentiment following US Fed’s bond-buying taper talks. However, we believe the factors such as a clearer picture on the political front, further relaxed SOPs in NRP Phase 1 states as well as corporate earnings season by this month could contribute to the trading interest within the local bourse. Nevertheless, the downside risks include the high Covid-19 daily infections as well as the declining crude oil price. Also, the CPO price has been retreating below the RM4,500 level.

Sector focus:. Investors may focus more on the recovery-theme sectors such as consumer and transportation & logistics following a further relaxation on SOPs in NRP Phase 1 states starting from today. Meanwhile, in view of the upcoming reporting season, traders may lookout on technology, healthcare and plantation sectors.

The FBM KLCI retreated after hovering in the negative territory for the entire session. Technical indicators, however, turned mixed as the MACD Histogram has turned into a red bar, while the RSI is hovering above the 50 level. Next resistance is located around 1,540, while next support level is set around 1,480.

Company Brief

Dialog Group Bhd's 4QFY21 net profit dropped 11.5% YoY to RM138.5m, on lower contribution from its downstream business. Revenue for the quarter declined 3.3% YoY to RM522.0m. (The Star)

Tenaga Nasional Bhd (TNB) has signed separate power purchase agreements (PPAs) with nine companies that are developing large scale solar energy generating facilities in five states. Each of the special purpose companies (SPC) will design, construct, own, operate and maintain a solar photovoltaic energy generating facility with the approved capacity at its proposed location. The PPAs govern the obligations of the parties to sell and purchase the energy generated by the facility for a period of 21 years from the commercial operation date. (The Star)

Bright Packaging Industry Bhd has entered into a joint venture agreement with Datai Plantations Sdn Bhd in Sarawak. The project involved the development of 1,921-ha of land in Sarikei with a total plantable area for the purpose of oil palm cultivation estimated at 1,152-ha. As at the date of the JVA, the planted area is approximately 579-ha. (The Star)

G Capital Bhd’s 96.0%-owned subsidiary Gunung Hydropower Sdn Bhd has signed a renewable energy power purchase agreement with Tenaga Nasional Bhd. It is expecting a potential revenue of more than RM400.0m over the span of 21 years from the date of the commission and completion of the plant. (The Edge)

ELK-Desa Resources Bhd’s 1QFY22 net profit jumped 116.1% YoY to RM5.0m, driven by higher contribution from the hire purchase segment. Revenue for the quarter grew 3.2% YoY to RM31.4m. (The Edge)

Freight Management Holdings Bhd’s 4QFY21 net profit surged 673.0% YoY to RM8.6m, attributed to higher freight rates and business activities. Revenue for the quarter improved 79.7% YoY to RM228.3m. (The Edge)

Econpile Holdings Bhd’s wholly-owned unit Econpile (M) Sdn Bhd has received an RM22.7m contract from Tunku Abdul Rahman University College to undertake earthworks, piling, infrastructure and related works in Setapak. The overall duration of the project is 10 months and works are expected to commence in September 2021. (The Edge)

Apex Healthcare Bhd’s 2QFY21 net profit slid 1.6% YoY to RM12.8m, on the back of higher costs from new production capacity addition under its associate. Revenue in the quarter, however, rose 4.5% YoY to RM182.6m. (The Edge)

Mega First Corp Bhd’s 2QFY21 net profit rose 7.4% YoY to RM87.3m, helped by higher earnings contributions from its renewable energy and resources divisions. Revenue for the quarter increased 14.7% YoY to RM207.8m. (The Edge)

Nestcon Bhd’s wholly-owned subsidiary Nestcon Infra Sdn Bhd was awarded an RM33.7m contract from MMC Engineering Sdn Bhd for a restoration project of the collapsed Kelantan riverbank in Kampung Pohon Celagi, Pasir Mas, Kelantan. The contract will start immediately and is slated for completion in 2Q22. (The Edge)

Perak Transit Bhd’s 2QFY21 net profit rose 67.2% YoY to RM13.5m, on higher contribution from the company’s integrated public transportation terminal operations. Revenue for the quarter added 80.2% YoY to RM34.9m. (The Edge)

Sime Darby Plantation Bhd and PTTGC International Pt Ltd are exiting their 50:50 joint venture in the Asia-Pacific business of Emery Oleochemicals (M) Sdn Bhd and Emery Specialty Chemicals Sdn Bhd by selling their collective 100.0% stake for RM38.0m to Edenor Technology Sdn Bhd. (The Edge)

JCY International Bhd’s 3QFY21 net loss stood at RM3.1m vs a net profit of RM18.42m recorded in the previous corresponding quarter, due to provision of RM17.0m for costs in fulfilling the requirements of the responsible business alliance code of conduct and exchange losses, as opposed to exchange gains a year ago. Revenue for the quarter, however, increased 19.4% YoY to RM271.2m. (The Edge)

Sunway Construction Group Bhd (SunCon)’s 2QFY21 net profit soared 280.8% YoY to RM8.3m, on better contribution from its business segments. Revenue for the quarter jumped 167.7% YoY to RM375.3m. (The Edge)

Deleum Bhd’s 60.0%-indirect subsidiary Deleum Primera Sdn Bhd (Primera) has been issued a RM1.0m compound by the Malaysian Anti-Corruption Commission (MACC) over the illegal scheme involving several of Primera’s directors and certain subcontractors. (The Edge)

VSTECS Bhd’s 2QFY21 net profit rose 40.8% YoY to RM9.9m, on high demand for its work-from-home products. Revenue for the quarter grew 25.6% YoY to RM563.9m. (The Edge)

Kumpulan H & L High-Tech Bhd is buying a land in Perak measuring 16,090-sqm, together with a 1.5 storey hypermarket constructed on the property for RM13.9m, for the group’s future investment. (The Edge)

Source: Mplus Research - 20 Aug 2021

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