US Mixed Ahead Of PCE Data

Market Review

Malaysia: The FBM KLCI (+0.72%) ended higher, in line with the positive performance in the regional stock markets, boosted by Utilities and Telco heavyweights. On the broader market, the Utilities sector (+1.76%) was the leading sector, while the Transportation & Logistics sector (-0.76%) declined.

Global markets: Wall Street ended mixed, as investors awaiting fresh catalysts in the market prior to the upcoming Core PCE that is due on Thursday. Both the European and Asian stock market ended higher, the latter due to positive sentiment ahead of the China’s manufacturing PMI.

The Day Ahead

The FBM KLCI added strength after a 4-day consolidation with the help of Utilities heavyweights. Likely, the overall sentiment will remain positive, digesting the improvements in latest quarterly results. On Wall Street, sentiment was mixed as US Consumer Confidence retreated in Feb. Meanwhile, the traders will be focusing on the upcoming Core PCE, unemployment claims and the US Manufacturing PMI as these factors may dictate the Fed’s tone going forward. On the commodity market, the Brent oil price slid after Joe Biden’s statement on a potential ceasefire agreement between Israel and Hamas is in the works, but still ranging within USD81- 83/bbl, while the Gold prices have recovered gradually above the USD2030 zone.

Sectors focus: A general trend of gradual recovery was noticed within the metal related stocks, such as PRESTAR, PA and SCGBHD, thus this may translate to higher trading activities within the Building Material segment. Meanwhile, the Packaging sector has seen improvements in BPPLAS and PPHB. Besides, selected Technology stocks like DUFU and UNISEM have seen recovery and we reckon traders to pay attention to the Technology sector.

FBMKLCI Technical Outlook

The FBM KLCI ended higher breaking out from the 4-bar consolidation pattern. However, the technical readings on the key index were mixed, with the MACD Histogram forming a rounding top formation, while the RSI hovering above 70. The resistance is envisaged around 1,565-1,575 and the support is set at 1,540-1,550.

Company Brief

Mah Sing Group Bhd said its net profit climbed 38% in the fourth quarter of 2023 from a year earlier, thanks largely to higher margin and lower net finance costs. Net profit for the three months ended Dec 31, 2023 was RM64.74m compared to RM46.78m over the same period the prior year. Revenue for the quarter rose marginally year-on-year to RM671.28m from RM670.87m. For the full year of 2023, net profit rose nearly 20% to RM215.29m versus RM180.05m in 2022, thanks to higher property sales and progressive revenue recognition from ongoing construction progress. Unbilled sales totalled RM2.33bn. (The Edge)

Unisem (M) Bhd's net profit for the financial year ended Dec 31, 2023 (FY2023) fell 79% to RM80.24m or 4.97 sen per share, from RM385.36m or 23.89 sen per share a year earlier, due mainly to lower sales volumes in line with softer market demand. The semiconductor assembly and test services provider said revenue for the year dropped to RM1.44bn, from RM1.78bn a year ago. Unisem declared a dividend of 2 sen per share to be paid on April 5, taking the full-year dividend payout to 8 sen per share. (The Edge)

Alliance Bank Malaysia Bhd's (ABMB) net profit for the third quarter ended Dec 31, 2023 dipped 0.13% from a year earlier, dragged by higher operating expenses that partially offset the gains from higher net interest and other operating income. ABMB's net profit was down to RM176.86m or 11.42 sen per share, from RM177.1m or 11.44 sen per share a year earlier. However, revenue for the quarter increased marginally by 2.69% year-on-year (y-o-y) to RM509.92m from RM496.55m. For the nine-month period ended Dec 31 (9MFY2024), ABMB's net profit was lower by 6.38% at RM512.73m or 33.12 sen per share from RM547.68m or 35.38 sen per share in 3QFY2023. However, its revenue for 9MFY2024 rose 3.66% to RM1.5bn, compared with RM1.45bn in the preceding year’s corresponding period. (The Edge)

MISC Bhd said its net profit slipped 2.7% for the fourth quarter ended Dec 31, 2023 (4QFY2023) from a year earlier, dragged by higher vessel operating costs and lower billings for its offshore business. Net profit stood at RM627.30m, compared with RM645.00m a year earlier. Revenue for the quarter, however, rose 2.5% y-o-y to RM4.28bn, from RM4.17bn. Full-year net profit came in 16% higher at RM2.12bn, versus RM1.82bn for FY2022, thanks to better charter and freight rates. Revenue for the year, meanwhile, rose 2.9% to RM14.27bn from RM13.87bn. (The Edge)

RHB Bank Bhd said its net profit fell 24% in the fourth quarter from a year earlier due to lower net interest income and higher provisions. Net profit for the three months ended Dec 31, 2023 was RM585.91m compared to RM770.59m over the same period the year before. The company declared a second interim dividend of 25 sen per share, bringing the total dividend for FY2023 to 40 sen per share or a 61.1% payout. For the full-year of 2023, net profit was 4.8% higher at RM2.81bn versus RM2.68bn in 2022. (The Edge)

Nestlé (Malaysia) Bhd closed its financial year ended Dec 31, 2023 (FY2023) on a higher note as its fourth-quarter net profit rose 11.48% y-o-y, thanks mainly to the absence of the prosperity tax or Cukai Makmur that was imposed on its FY2022 earnings. The group announced a third interim dividend payout of RM1.28 per share for shareholders, 6 sen more than the RM1.22 third interim dividend it announced in FY2022, taking its year-to-date payout to RM2.68, up from RM2.62 in the corresponding period previously. Net profit for the fourth quarter ended Dec 31, 2023 rose to RM148.1m from RM132.85m, with revenue climbing 2.26% to RM1.69bn from RM1.65bn, contributed by positive domestic growth despite some correction in export sales against a high baseline last year. Separately, the group announced it has appointed Tan Sri Wan Zulkiflee Wan Ariffin, a former Petronas CEO, as its new chairman, effective May 1, as Tan Sri Syed Anwar Jamalullail will be retiring from Nestlé Malaysia after 15 years at its helm. (The Edge)

Tenaga Nasional Bhd's net profit fell 27.83% to RM583.9m in the fourth quarter ended Dec 31, 2023 (4QFY2023) from RM809.1m a year ago, on the back of lower imbalance cost pass-through (ICPT) under-recovery and lower forex gains. Quarterly earnings per share fell to 10.12 sen, from 14.1 sen in 4QFY2022. It declared a dividend of 28 sen per share, bringing FY2023 dividends to 46 sen per share, unchanged from the year before. Revenue rose 5.7% to RM13.65bn in 4QFY2023 from RM12.92bn a year ago. For FY2023, Tenaga’s net profit fell 20.01% y-o-y to RM2.77bn or 48 sen per share, from RM3.46bn or 60.35 sen per share. (The Edge)

Petronas Gas Bhd’s (PetGas) net profit rose 7.04% in the fourth quarter ended Dec 31, 2023 (4QFY2023) on lower other expenses, financing costs and higher contribution from joint venture (JV) companies, offset by lower other income and higher tax expenses. PetGas’ 4QFY2023 net profit came in at RM441.59m versus RM412.55m in 4QFY2022. Earnings per share rose to 22.32 sen from 20.85 sen previously. The group declared an interim dividend of 22 sen per share, bringing its full-year payout to 72 sen per share, unchanged from FY2022. (The Edge)

UOA Development Bhd's fourth quarter net profit more than doubled to RM118.72m from RM53.06m a year ago, helped by a progressive recognition of its ongoing development projects. Revenue for the quarter ended Dec 31, 2023 was, however, down 3.1% to RM109.01m from RM112.52m previously. For the full year, net profit rose 27.1% to RM279.55m from RM219.94m in FY2022, despite revenue declining 11.6% to RM399.39m from RM451.65m. UOA Development proposed a final dividend of 10 sen per share, bringing total dividend declared for FY2023 to 30 sen per share, compared with 10 sen per share in FY2022. (The Edge)

Malaysia Building Society Bhd (MBSB) posted a 50% jump in fourth quarter net profit to RM301.15m from RM200.73m a year earlier, after recording a one-off gain of RM354m from the acquisition of MIDF Group. Besides the gain on acquisition, the group’s net income for the quarter ended Dec 31, 2023 (4QFY2023) remained predominantly from loans, financing, and financial investments. Quarterly revenue rose 4.5% to RM698.05m from RM668.02m in 4QFY2022. Full-year net profit stood at RM491.81m, up 6.9% from RM460.19m in FY2022, as revenue rose 4.7% to RM2.82bn from RM2.69bn. (The Edge)

UEM Sunrise Bhd is lifting its dividend payout to 40%-60% of net profit, from 20%- 40% currently, as part of its dividend policy revision. UEM Sunrise declared a dividend of 0.75 sen per share for the fourth quarter ended Dec 31, 2023 (4QFY2023), which is higher compared to 0.5 sen a year ago. Its 4QFY2023 net profit rose 33.59% to RM27.34m from RM20.46m a year prior, as higher revenue more than offset higher finance costs and a swing to the red by its joint venture and associates. Revenue rose 25.51% y-o-y to RM421.97m from RM336.22m, lifted by RM150m in land sales in the quarter versus RM61m in 4QFY2022. For the financial year ended Dec 31, 2023 (FY2023), UEM Sunrise's net profit slipped 5.97% to RM75.73m or 1.50 sen per share, from RM80.54m or 1.59 sen per share, dragged by impairment in Haute Property Sdn Bhd. (The Edge)

Heineken Malaysia Bhd's net profit dipped 5.32% to RM99.07m in its fourth quarter ended Dec 31, 2023 (4QFY2023) from RM104.63m in 4QFY2022, as it recorded lower sales as consumer sentiment weakens amid rising cost of living and macro- economic concerns. Quarterly revenue dropped 7.97% to RM728.62m from RM791.69m. Earnings per share slipped to 32.8 sen from 34.64 sen. The group closed its FY2023 with a 6.3% dip in annual net profit to RM386.8m from RM412.82m in FY2022, as revenue fell 7.61% to RM2.64bn from RM2.86bn. The brewer proposed a final dividend of 88 sen per share, raising its dividend payout for FY2023 to RM1.28, 10 sen lower than the RM1.38 it paid for FY2022. (The Edge)

Source: Mplus Research - 28 Feb 2024