Market Review

Malaysia:. The FBM KLCI (+0.3%) started off the week on an upbeat note after hovering in the positive territory for the entire trading session yesterday. Likewise, the lower liners extended their gains, while the healthcare (-1.2%) and plantation (- 0.1%) sectors underperformed the positive broader market.

Global markets:. The US stockmarkets extended their gains as the Dow rose 0.6% after US regulators granted full approval for the vaccine produced by Pzifer and BioNtech SE, which may lead to more other vaccine mandates. European stockmarkets advanced, while Asia stockmarkets finished mostly higher.

The Day Ahead

The FBM KLCI extended gains for a second session on the back of buying interest in recovery-theme stocks as well as optimism over political stability following the appointment of Malaysia’s new Prime Minister. Also, with the declining trend in Covid-19 daily cases, it may trigger more focus in the recovery theme sectors from market participants. Meanwhile, the local sentiment is supported by optimism amid the earnings season. Commodities wise, both the CPO and crude oil prices rebounded, with the Brent oil closing above the USD68 per barrel level.

Sector focus:. We believe buying interest should continue in the recovery theme sectors, such as consumer, transportation & logistics, and aviation as well as tourism. Besides, technology stocks may garner traction with the strong overnight performance on Wall Street.

The FBM KLCI started the week on a positive note, hovering firmly above the daily EMA9 and EMA20 levels. Technical indicators turned positive as the MACD Histogram has turned into a green bar, while the RSI hovered above the 50 level. Investors may trade towards the next resistance located around 1,540, while the support level is envisaged around 1,500.

Company Brief

Serba Dinamik Holdings Bhd, along with group managing director and chief executive officer (CEO) Datuk Dr Mohd Abdul Karim Abdullah, has begun legal action against the owner and operator of KLSE Screener. They have obtained an ad interim injunction over the alleged publication of false and defamatory comments posted by a user account impersonating the group’s CEO. (The Star)

MY EG Services Bhd's (MYEG) 2QFY21 net profit rose 28.1% YoY to RM80.7m, as it saw increased online transaction volume during the pandemic and contribution from new Covid-19 related business. Revenue for the quarter increased 30.0% YoY to RM161.7m. (The Edge)

Petronas Gas Bhd’s 2QFY21 net profit declined 19.7% YoY to RM439.1m, weighed down by lower gross profit, coupled with unfavourable movement on foreign exchange. Revenue fell 0.7% YoY to RM1.38bn. (The Star)

Petronas Dagangan Bhd's (PetDag) 2QFY21 net profit soared 23.4x YoY to RM82.1m, on the back of higher gross profit as a result of improved oil prices and volume. Revenue for the quarter improved 75.5% YoY to RM5.14bn. (The Edge)

Hextar Global Bhd's 2QFY21 net profit fell 33.0% YoY to RM7.4m, due to and lower gross profit margin driven by higher raw material prices and overhead costs. Revenue for the quarter slipped 2.0% YoY to RM98.7m. (The Edge)

Malaysia Airports Holdings Bhd’s (MAHB) 2QFY21 net loss widened to RM226.1m, from a net loss of RM91.1m recorded in the previous corresponding quarter, attributed to, among others, higher asset depreciation and amortisation at a time when the global aviation sector contended with the impact of Covid-19 pandemicled movement restrictions which resulted in a contraction in the number of passengers across its network of airports. Revenue for the quarter, however, increased 18.2% YoY to RM323.4m. (The Edge)

Gadang Holdings Bhd's wholly-owned subsidiary Gadang Land Sdn Bhd has entered into a sale and purchase agreement with SkyRia Development Sdn Bhd to dispose of a 38,451-sqm leasehold land, which comes with a development order and building plan approval for two 22-storey blocks of apartment comprising 479 units, for a purchase price of RM43.0m. (The Edge)

Guan Chong Bhd's 2QFY21 net profit fell 36.1% YoY to RM36.4m, as the group recorded a decline in the sales volume of cocoa products and lower profit margin. Revenue for the quarter slipped 3.8% YoY to RM876.2m. (The Edge)

Pelikan International Corp Bhd’s 2QFY21 net profit stood at RM18.0m vs. a net loss of RM12.7m recorded in the preceding quarter, on higher sales of school products due to the back-to-school season in Europe. Revenue for the quarter added 42.0% YoY to RM287.3m. (The Edge)

Boilermech Holdings Bhd's 1QFY22 net profit dropped 16.4% YoY to RM5.5m, as the lockdown restricted the group's business operations. Revenue for the quarter fell 6.7% YoY to RM70.9m. (The Edge)

MMC Corp Bhd’s 2QFY21 net profit jumped 124.6% YoY to RM173.8m, on the back of higher volumes handled across all ports. Revenue for the quarter grew 16.0% YoY to RM1.15bn. (The Edge)

OpenSys (M) Bhd's 2QFY21 net profit rose 7.5% YoY to RM2.8m, thanks to a favourable product mix where contributions from higher-margin maintenance of cash-recycling ATMs, software solutions and business process outsourcing in the bill payment kiosks and cheque processing segment. Revenue for the quarter, however, dropped 26.9% YoY to RM14.7m. (The Edge)

PMB Technology Bhd’s 2QFY21 net profit soared 8.5x YoY to RM11.6m, aided by improved contributions by its manufacturing & trading and construction & fabrication segments. Revenue for the quarter swelled 210.0% YoY to RM178.3m. (The Edge)

Taliworks Corp Bhd's 2QFY21 net profit rose 7.4% YoY to RM12.6m, due to higher contributions from its associate and joint venture, coupled with lower financing costs, following the redemption of an Islamic medium-term note. Revenue for the quarter, however, fell 18.6% YoY to RM61.9m. (The Edge)

Tiong Nam Logistics Holdings Bhd’s 1QFY22 net profit stood at RM1.6m vs. a net loss of RM5.5m recorded in the previous corresponding quarter, driven by stronger demand for the group's logistics and warehousing services from existing and new customers. Revenue for the quarter added 35.7% YoY to RM166.9m. (The Edge)

Tropicana Corp Bhd has proposed to undertake a private placement of up to 144.7m new shares or 10.0% of its total issued shares to be placed out to thirdparty investors at an issue price to be fixed at a later date to raise up to RM120.1m, which will be mainly used to fund existing projects and for working capital. (The Edge)

Radiant Globaltech Bhd’s 2QFY21 net profit stood at RM1.1m vs. a net loss of RM0.5m recorded in the previous corresponding quarter, on the back of higher contributions from its hardware and maintenance, as well as software segments. Revenue for the quarter jumped 165.5% YoY to RM32.9m. (The Edge)

Source: Mplus Research - 24 Aug 2021