Market Review

Malaysia:. The FBM KLCI (-0.6%) erased all its previous two session of gains to close below the 1,400 psychological level, as selling pressure from foreign funds escalated. The lower liners closed mixed, while the healthcare sector (-1.3%)  underperformed the mixed sectorial peers.

Global markets:. Wall Street ended mixed as the Dow (-0.2%) retreated after the consumer confidence data in May 2023 slipped to 6-month low as the labour market softens, while the S&P 500 closed flat. The European stockmarkets closed lower, while Asia stockmarkets ended mixed.

The Day Ahead

The FBM KLCI drifted below the key 1,400 level as investors took profit ahead of the passing of US debt ceiling deal. Whilst global sentiment remained mixed, we believe bargain hunting activities may emerge on the local front in undervalued stocks. Meanwhile, the renewable energy theme may come into investors’ focus as the government target to roll out its Energy Transition Roadmap, as well as to  reveal the renewable energy export guidelines in June. Commodities wise, the  Brent crude oil tumbled towards USD73 amid uncertainty over global demand  prospects, while the CPO price hovered above RM3,350. 

Sector focus:. Investors may favour the technology sector given the Nasdaq crossed above the 13,000 level. The renewable energy counters may shine following a series of government’s initiative. However, selling pressure may be  noticed in the energy sector after the plunge of crude oil prices.

FBMKLCI Technical Outlook

The FBM KLCI sank and violated the key 1,400 level after hovering in the negative territory for the entire session. Technical indicators remained negative as the MACD indicators extended a negative bar, while the RSI hovered below 50. Support is pegged along 1,370-1,390, while the resistance is set along 1,440-1,460.

Company Brief

MyEG Services Bhd’s 1QFY23 net profit rose 25.2% YoY to RM105.9m, mainly attributable to an overall increase in revenue, one-off recognition of fair value gain in investment as a result from the listing of its investment in Agmo Holdings Bhd and contribution from newly launched services from the Zetrix blockchain platform. Revenue for the quarter increased 7.1% YoY to RM173.2m. (The Star)

Malaysia Airports Holdings Bhd’s (MAHB) 1QFY23 net profit stood at RM58.2m vs. a net loss of -RM150.4m recorded in the previous corresponding quarter, driven by  international passenger traffic that more than tripled after Malaysia’s borders reopened from April 2022 onwards. Revenue for the quarter rose 81.2% YoY to  RM1.03bn. (The Edge)

Press Metal Aluminium Holdings Bhd's 1QFY23 net profit fell 33.0% YoY to  RM282.0m, on lower revenue and contribution by its associated companies.  Revenue for the quarter decreased 21.7% YoY to RM3.07bn. A first interim dividend of 1.75 sen per share, payable on 30th June 2023 was declared. (The Edge)

Alliance Bank Malaysia Bhd's (ABMB) 4QFY23 net profit rose 26.3% YoY to  RM130.2m, due to higher net interest income and lower allowances for expected credit losses. Revenue for the quarter gained 3.8% YoY to RM468.6m. A second interim dividend of 10.0 sen per shares, payable on 28th June 2023 was declared.  (The Edge)

Bank Islam Malaysia Bhd's 1QFY23 net profit rose 11.5% YoY to RM118.1m, led by a jump in investment income. Revenue for the quarter climbed 42.6% YoY to  RM1.10bn. (The Edge)

KPJ Healthcare Bhd’s net profit jumped 134.4% YoY to RM51.9m, mainly driven by the performance from the Malaysian segment. Revenue for the quarter gained  29.2% YoY to RM829.0m. (The Edge)

Berjaya Corp Bhd’s (BCorp) 3QFY23 net profit stood at RM3.3m vs. a net loss of  RM35.9m registered in the previous corresponding quarter, thanks to higher contributions from its food retail, property and hospitality segments. Revenue for the quarter rose 3.3% YoY to RM2.50bn. (The Edge)

FGV Holdings Bhd's 1QFY23 net profit sank 96.7% YoY to RM12.1m, on the back of  a sharp decline in revenue due to normalising prices and lower sales volume of crude palm oil (CPO). Revenue for the quarter declined 21.5% YoY to RM4.59bn. (The Edge)

Farm Fresh Bhd’s 4QFY23 net profit dropped 72.4% YoY to RM4.9m, as elevated raw material costs and foreign exchange rate fluctuation ate into its bottom line.  Revenue for the quarter, however, grew 26.0% YoY to RM161.4m. (The Edge)

IOI Corp Bhd's 3QFY23 net profit declined 52.0% YoY to RM197.4m, mainly due to  lower contribution from its plantation segment. Revenue for the quarter fell 35.1% YoY to RM2.66bn. (The Edge)

Chin Hin Group Bhd’s 1QFY23 net profit fell 23.6% YoY to RM20.1m, on higher administrative expenses, finance cost and impairment of trade receivables.  Revenue for the quarter, however, rose 49.3% YoY to RM523.9m. (The Edge)

Panasonic Manufacturing Malaysia Bhd’s 4QFY23 net profit shrank 53.4% YoY to  RM7.4m, due to lower revenues, higher operating and utilities costs, as well as  lower share of profits from its associated company. Revenue for the quarter fell  6.3% YoY to RM195.5m. A final dividend of 107.0 sen per share, payable on 22nd  September 2023 was declared. (The Edge)

Shangri-La Hotels (M) Bhd’s 1QFY23 posted net profit stood at RM8.3m vs. a net loss of RM12.9m recorded in the previous corresponding quarter, bolstered by  stronger results across its hotel operations on the back of more favourable  business environment. Revenue for the quarter jumped 103.6% YoY to RM116.3m. (The Edge)

CAB Cakaran Corp Bhd's 2QFY23 net profit surged 326.3% YoY to RM28.5m, on higher revenue from sales, especially at the integrated poultry division. Revenue for the quarter rose 20.0% YoY to RM570.9m. (The Edge)

Citaglobal Bhd’s 1QFY23 net profit fell slightly by 1.9% YoY to RM2.1m, as higher earnings from the civil engineering and construction (CEC) segment was offset by weaker results from other business segments. Revenue for the quarter dropped  16.4% YoY to RM38.2m. (The Edge)

Propel Global Bhd, which took over the listing status of troubled Daya Materials  Bhd last year, will no longer be classified as a Practice Note 17 company from 31st  May 2023. This was after completion of the implementation of its regularisation plan in October 2022, it had regularised its financial condition and level of operations, and no longer triggers any of the criteria under PN17 of Bursa's Main  Market listing requirements. (The Edge)

Axis Real Estate Investment Trust (Axis REIT) has made a slew of board changes as part of the trust's succession plan. Its executive deputy chairman Datuk Abas  Carl Gunnar Abdullah, 64, was promoted to executive chairman effective immediately, while its non-independent director Stephen Tew Peng Hwee@Teoh  Peng Hwee, 62, will take over the role of deputy chairman. The trust also announced the departure of three independent and non-executive directors — Tunku Shahabuddin Burhanuddin, 88, Datuk Seri Fateh Iskandar Mohamed Mansor,  55, and Mohd Sharif Yusof, 84 — who are stepping down after serving the board of  Axis REIT for more than 12 years. (The Edge)

Source: Mplus Research - 31 May 2023