Staying afloat

Market Review

Malaysia:. The FBM KLCI (+0.1%) inched higher to register its seventh consecutive winning run, supported by gains across selected plantation heavyweights yesterday. The lower liners also advanced, but the broader market ended mixed with the plantation sector (+3.9%) leading the pack as CPO prices rallied.

Global markets:. Wall Street was beset by another round of volatility as the Dow (- 1.8%) sank on concern over the renewed geopolitical risk between Russia and Ukraine. The European stockmarkets turned downbeat, erasing all their intraday gains, while Asia stockmarkets ended mixed.

The Day Ahead

While global stock markets continued to be spooked by the flared-up tension between Ukraine and Russia, the FBM KLCI managed to hold above the 1,600 psychological level as rallies in plantation heavyweights, positioning ahead of the reporting season. Given the firm crude palm oil and crude oil prices, we expect the sentiment on both the sectors will remain positive at least for the near term. Meanwhile, we noticed consumer and construction sectors have started the rebound recently; the consumer sector is expected to provide solid growth in their upcoming earnings following BJFOOD’s result last week.

Sector focus:. The firm CPO price is hovering above RM5,500 level should continue to lend support to the plantation sector, albeit profit taking is possible in selected companies following the strong rally yesterday. Meanwhile, the technology stocks may retreat, tracking the Nasdaq overnight plunge on Wall Street.

FBMKLCI Technical Outlook

The FBM KLCI ended with mild gains after wiping off most of the intraday profit, extending its gains for the 7th straight session. Technical indicators remained positive as the MACD stayed above the zero level, while the RSI hovered around the overbought region. The next resistance is located at 1,620, while the support is now set around 1,570-1,580.

Company Brief

Kossan Rubber Industries Bhd’s 4QFY21 net profit sank 59.8% YoY to RM218.7m, due to lower revenue from all three divisions. Revenue for the quarter decreased 29.3% YoY to RM924.6m. A fourth interim dividend of 12.0 sen per share, payable on 22nd April 2022 was declared. (The Star)

Datasonic Group Bhd has secured a contract worth RM50.1m from the Home Affairs Ministry for the supply of MyKad, MyTentera, MyPOCA raw cards and consumables to the National Registration Department. The contract is for a period of 12 months commencing from 15th February 2022, to 14th February 2023. (The Star)

Asia Poly Holdings Bhd has spent 5.2% or RM7.5m of its net assets to acquire 51.1m shares or a 1.5% equity interest in Ta Win Holdings Bhd, bringing the former’s stake to 191.0m shares or 5.6% of the latter’s total issued shares. The 51.1m Ta Win shares were purchased between 10th Jun 2021 and 16th February 2022, using internally-generated funds. (The Edge)

Bintai Kinden Corp Bhd has emerged as a substantial shareholder in Malaysian Genomics Resource Centre Bhd with a 5.0% stake, after acquiring 6.3m shares. Bintai Kinden has also diversified into the healthcare sector through the acquisition of Johnson Medical International Sdn Bhd (JMI) in November 2021. (The Edge)

Carlsberg Brewery Malaysia Bhd’s 4QFY21 net profit rose 88.2% YoY to RM71.4m, underpinned by higher profit contributions from its operations in Malaysia. Revenue for the quarter increased 14.8% YoY to RM542.3m. A dividend of 46.0 sen per share was proposed. Meanwhile, Carlsberg Malaysia has allocated RM110.0m of its capital expenditure to upgrade its brewery facilities, which is expected to be completed by the end-2022. (The Edge)

CIMB Group Holdings Bhd’s foreign shareholding increased to 24.9% in January 2022 from 24.7% in December 2021; the highest since May 2020, when the bank’s foreign shareholding stood at 25.6%. (The Edge)

CTOS Digital Bhd plans to raise RM270.0m via a private placement of up to 166.7m new shares at an indicative RM1.62 each to fund its acquisition of Juris Technologies Sdn Bhd and Business Online Public Co Ltd as well as other investments to further grow its business. The proposed placement is expected to be completed by 1Q22. (The Edge)

Hibiscus Petroleum Bhd’s 2QFY22 net profit surged 303.4% YoY to RM48.5m, on the back of improved operational performance and higher crude oil prices. Revenue for the quarter rose 49.5% YoY to RM284.4m. (The Edge)

Luxchem Corp Bhd’s 4QFY21 net profit inched up 3.1% YoY to RM16.6m, on the back of a strong showing by its trading and manufacturing segments. Revenue for the quarter rose 31.1% YoY to RM288.7m. A third interim dividend of 1.0 sen per share, payable on 13th May 2022 was declared. (The Edge)

MISC Bhd's 4QFY21 net profit fell 17.0% YoY to RM461.7m, dragged mainly by higher operating loss incurred by the marine and heavy engineering division and other adjustments. Revenue for the quarter, however, rose 16.8% YoY to RM3.09bn. A fourth dividend of 12.0 sen per share, payable on 16th March 2022 was declared. (The Edge)

Kobay Technology Bhd’s 2QFY22 net profit jumped 144.0% YoY to RM14.5m, on the back of its manufacturing segment’s strong performance. Revenue for the quarter soared 159.3% YoY to RM92.8m. (The Edge)

Pharmaniaga Bhd’s 4QFY21 net profit stood at RM85.5m vs. a net loss of RM6.3m recorded in the previous corresponding quarter, lifted by higher revenue. Revenue for the quarter grew 12.2% YoY to RM711.7m. A fourth interim dividend of 5.0 sen per share, payable on 5th April 2022 was declared. (The Edge)

Serba Dinamik Holdings Bhd has filed a notice of appeal at the Court of Appeal to invalidate the High Court’s directive requiring the group to comply with Bursa Malaysia’s instruction to make public the fact-finding update on Serba Dinamik's special independent review. The review by Ernst & Young Consulting was on Serba Dinamik's financials. (The Edge)

Source: Mplus Research - 18 Feb 2022