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Mplus Market Pulse - 25 Aug 2021

Publish date: Wed, 25 Aug 2021, 09:14 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 (+2.0%) recorded its third straight winning streak to close at the highest level in two months, boosted by a broad-based recovery on the stability of political developments. The lower liners extended their gains, while the REIT sector (-0.2%) was the sole underperformer against the broader market.

Global markets:. The US stockmarkets continues to march higher as the Dow added 0.1%, lifted by higher commodity prices such as crude oil as well as iron ore, coupled with the strong batch of corporate earnings. European stockmarkets finished mixed, while Asia stockmarkets ended mostly positive.

The Day Ahead

Tracking the gains on regional bourses, the FBM KLCI surged mainly spurred by buying interest in plantation and banking heavyweights. While the market may anticipate some potential pullback on profit taking activities, we believe overall sentiment on the local bourse should continue to be supported by broad-based recovery tune amid the rising commodities prices following the smooth vaccination progress as well as investors appears to be optimistic with the ongoing reporting season. Meanwhile, the Baltic Dry Index was above 4,200 point on Tuesday, marking its highest point since mid-2010 and the Brent oil price rebounded to close above the USD71 level.

Sector focus:. Investors should remain bullish on the technology sector following the extended overnight gains in Nasdaq at all-time high. Besides, we believe recovery theme sectors such as building material and construction sectors should continue to gain traction. Meanwhile, the rise in Brent oil price and Baltic Dry Index may support optimism over oil & gas and transportation & logistics counters.

The FBM KLCI surged amid to close above the daily EMA120 level. Technical indicators remained positive as the MACD Histogram has extended a green bar, while the RSI continues to stay above 50. With the key index crossing above 1,540, next resistance is at 1,565, while the support level is located at 1,520.

Company Brief

IJM Corporation Bhd’s (IJM Corp) 1QFY22 net profit surged 32.0x YoY to RM65.7m, due to fewer operational disruptions arising from Covid-19 movement control restrictions. Revenue for the quarter rose 48.4% YoY to RM1.30bn. (The Star)

IJM Plantations Bhd’s 1QFY22 net profit fell 26.9% YoY to RM60.1m, mainly due to lower fresh fruit bunches production amid the weather effects on the taller palms that offset the higher commodity prices. Revenue for the quarter, however, increased 31.9% YoY to RM271.7m. (The Star)

Leong Hup International Bhd’s 2QFY21 net profit jumped 87.5% YoY RM30.5m, on higher selling prices of day-old-chicks (DOC) and broiler chickens increased its margin. Revenue for the quarter improved 30.1% YoY to RM1.85bn. (The Star)

Tenaga Nasional Bhd (TNB) wholly-owned subsidiary TNB Topaz Energy Sdn Bhd has divested its entire tranche one investment comprising 105.6m units in a compulsory convertible debenture issued by India-based GMR Bajoli Holi Hydropower Private Ltd for 1.18bn rupees (RM67.0m) to streamline TNB's international portfolio. The company is defocusing on India, and shifting its effort to pursue growth in TNB's focused markets such as the UK, Europe and Southeast Asia. (The Edge)

Salutica Bhd has sealed its production areas after a member of its production workers tested positive for Covid-19. The affected areas have been closed for deep cleaning purposes and sanitisation, adding that affected production workers have been quarantined accordingly. (The Edge)

Ageson Bhd’s 4QFY21 net profit dropped 53.1% YoY to RM8.3m, due to the lower margin from trading of construction materials and higher operating expenses. Revenue for the quarter, however, grew 32.4% YoY to RM51.3m. (The Edge)

Press Metal Aluminium Holdings Bhd's 2QFY21 net profit surged 183.8% YoY to RM255.6m, due to higher aluminium prices. Revenue for the quarter rose 52.2% YoY to RM2.64bn. (The Edge)

Bina Puri Holdings Bhd has proposed to undertake a private placement of up to 10.0% of its total number of issued shares or 143.1m shares, which based on an illustrative price of 5.41 sen per placement share. The exercise is expected to raise RM7.7m, of which RM7.4m would be used for working capital. (The Edge)

Hap Seng Plantations Holdings Bhd's 2QFY21 net profit rose 38.3% YoY to RM47.4m, on higher palm oil prices and volume. Revenue for the quarter jumped 116.7% YoY to RM181.1m. (The Edge)

George Kent (Malaysia) Bhd’s 1QFY22 net profit stood at RM11.8m on top of revenue at RM61.3m. There were no comparable figures, as it had changed its financial year end to 31st March, from 31st January previously. (The Edge)

Suria Capital Holdings Bhd's 2QFY21 net profit jumped 191.2% YoY to RM16.8m, on higher contributions from the core business of port operations and lower operational costs. Revenue for the quarter rose to 34.0% YoY to RM62.4m. (The Edge)

Berjaya Corp Bhd (BCorp) chief executive officer Abdul Jalil Abdul Rasheed has reported that the diversified group via subsidiary Berjaya Land Bhd is now the largest hotel operator in Iceland with 1,471 keys across 14 hotels in that country under various brands. The group's Iceland hotels have bounced back very quickly due to Covid-19-led quarantine restrictions being removed. (The Edge)

KPJ Healthcare Bhd's 2QFY21 net profit dropped 45.0% YoY to RM7.0m on higher operational costs. Revenue for the quarter, however, rose 33.0% YoY to RM632.8m. (The Edge)

IOI Corp Bhd's 4QFY21 net profit added 50.8% YoY to RM359.4m, mainly due to higher contributions from plantation and resource-based manufacturing segments. Revenue for the quarter expanded 69.6% YoY to RM3.46bn. (The Edge)

JF Technology Bhd’s 4QFY21 net profit grew 12.6% YoY to RM3.5m, on the back of robust demand. Revenue for the quarter gained 25.3% YoY to RM10.2m. (The Edge)

Panasonic Manufacturing Malaysia Bhd’s 1QFY22 net profit stood at RM17.9m vs. a net loss of RM2.6m recorded in the previous corresponding quarter, due to the low base effect arising from the implementation of the Movement Control Order in March last year. Revenue for the quarter gained 64.6% YoY to RM253.7m. (The Edge)

Sunway Bhd's 2QFY21 net profit stood at RM70.5m vs. a net loss of RM6.7m recorded in the previous corresponding quarter, thanks to improvements from its property development, property investment and healthcare segments. Revenue for the quarter gained 73.9% YoY to RM967.9m. (The Edge)

TSH Resources Bhd's 2QFY21 net profit jumped 100.4% YoY to RM39.7m, thanks to higher CPO and palm kernel prices. Revenue for the quarter expanded 46.0% YoY to RM307.4m. (The Edge)

Tan Chong Motor Holdings Bhd's 2QFY21 net loss narrowed to RM22.2m, from a net loss of RM79.4m recoded in the previous corresponding quarter, on the back of higher profit contributions from all its business segments. Revenue for the quarter rose 24.4% YoY to RM638.0m. (The Edge)

Source: Mplus Research - 25 Aug 2021

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