Reclaiming The 1,600 Level

Market Review

Malaysia: The FBM KLCI (+0.73%) Rebounded and Closed Above 1,600 Level, Mainly Due to PMETAL’s Rebound Following China’s Aluminium Export Tax Rebate Removal. The Industrial Products & Services (+1.18%) Sector Saw the Largest Gain, While Technology (-0.67%) Sector Declined the Most.

Global Markets: DJIA Ended Slightly Lower, But Both S&P500 and Nasdaq Ended Higher Due to Tesla’s Rally, Which Help to Start the Week on An Upbeat Mode. The European Market Closed Slightly Lower, While the Asian Market Ended Mixed as Investors Are Assessing Both the China Economic Data and Japan’s GDP.

The Day Ahead

The FBMKLCI Closed Above the 1,600 Level Following the Rebound in PMETAL and We Expect Stronger Sentiment Going Into the Earnings Season. In the US, the Market Started Off Strong, Buoyed by Tesla’s Performance, as Trump’s Administration Plans to Make a Federal Framework for Fully Self-driving Vehicles One of the Transportation Department’s Priorities. This Week, Traders Will Continue to Monitor Key Events Like: (i) a Speech by the BoJ Governor, (ii) NVIDIA’s Earnings Release, (iii) G20 Summit, and (iv) China’s Loan Prime Rate Announcements. In the Commodities Market, Brent Crude Oil Edged Closer to the USD73 Level Amid Escalating Tensions in the Ukraine-Russia Conflict, While Gold Prices Surged Above the USD2,600 Mark. Meanwhile, CPO Prices Traded Below the RM5,000 Psychological Level Due to a Slowdown in Exports.

Sector Focus: Following Strong Earnings by KGB and the Trump Administration's Proposal for a 60% Baseline Tariff on Chinese Imports, We Remain Optimistic About the Local Technology and Glove Sectors. The Intensified Ukraine-Russia Conflict May Also Boost Sentiment in Gold and Oil-related Counters. Also, We Favour the Construction, Property, and Building Materials Sectors, Supported by Growing Data Center Investments. We Remain Positive Towards East Malaysia Companies, Buoyed by Their Recent Strong IPO Performances.

FBMKLCI Technical Outlook

The FBM KLCI index rallied above the 1,600 level to close at 1604.04. However, the technical readings on the key index were still negative, with the MACD Histogram closing downwards, while the RSI trending below 50. The resistance is envisaged around 1,619-1,624, and the support is set at 1,584-1,589.

Company Briefs

CelcomDigi Bhd (CDB) has revised down its full-year guidance – expecting service revenue to be “flat- to slightly decreased,” from the previous projection of a “low single-digit increase”, while cutting its earnings before interest and tax (Ebit) growth outlook to a “low single-digit decrease”, from an earlier forecast of a “single-digit decrease”. The telco giant reported a 4.1% year-on-year drop in its net profit to RM436.98m in its third quarter ended Sept 30, 2024 (3QFY2024), from RM455.72m, as its total costs climbed 5.2% amid rising roaming cost, device subsidies, as well as 5G access and fibre expenses. Revenue rose 0.7% to RM3.13bn from RM3.10bn in 3QFY2023. It declared a third interim dividend of 3.6 sen per share – to be paid on Dec 23. For the nine months ended Sept 30, 2024 (9MFY2024), CelcomDigi’s net profit increased 9.2% to RM1.22bn from RM1.12bn in 9MFY2023, despite its cumulative revenue largely unchanged at RM9.40bn. (The Edge)

Ajinomoto (Malaysia) Bhd's (AJI) net profit surged 76.66% to RM18.29m in the second quarter ended Sept 30, 2024 (2QFY2025), from RM10.35m, helped by stronger sales from both consumer business and industrial business segments, and lower raw material costs. Quarterly revenue grew 11.61% to RM183.44m from RM164.36m a year before. For the first six months FY2025 (6MFY2025), its net profit jumped 64.93% to RM37.22m from RM22.57m in 6MFY2024, as cumulative revenue expanded by 13.42% to RM354.88m from RM312.89m. (The Edge)

Master Tec Group Bhd’s (MTEC) net profit only grew 3% to RM5.97m for its third quarter ended Sept 30, 2024 (3QFY2024) from RM5.78m in 3QFY2023, despite registering 34.4% year on year jump in its quarterly revenue to RM87.63m. The group's operating profit margin dropped to 9% from 14.1%. It declared a second interim dividend of 0.18 sen per share, payable on Dec 16. (The Edge)

TMC Life Sciences Bhd’s (TMCLIFE) net profit for the first financial quarter ended Sept 30, 2024 (1QFY2025) plunged 80.6% to RM2.94m from RM15.14m a year ago, as the healthcare group posted a lower revenue while its staff costs and other operating expenses rose. Quarterly revenue fell 11.3% to RM81.97m from RM92.44m a year earlier. (The Edge)

Perak Transit Bhd’s (PTRANS) net profit for the three months ended Sept 30, 2024 (3QFY2024) increased 6.72% to RM17.71m from RM16.6m a year ago — marginally eclipsing its previous quarterly record earnings of RM17.69m in 2QFY2024, thanks to higher fees from development services as well as rental income and revenue sharing contributions from its terminals’ tenants. Revenue for the quarter jumped 19.3% to RM52.08m from RM43.65m. It declared a fourth interim dividend of 0.5 sen per share, payable on Feb 17, 2025. (The Edge)

UEM Sunrise Bhd (UEMS) has received development approval for its 0.49ha site in Perth, Australia for a mixed-use development with a gross development value potential of A$450m (RM1.3bn). The development will involve tiered heights of 36 and 26 storeys for Lot 1, and 11 storeys for Lot 2, offering a mix of one- to threebedroom apartments and townhouses with diverse amenities. (The Edge)

EA Technique (M) Bhd (EATECH) has secured three contract extensions valued at RM63.9m from Petronas. The largest of the extensions is worth RM41m for tugboat services followed by two emergency standby vessel (ESV) services with a combined value of RM22.9m. All three agreements, each spanning two years, are set to start in November. The group now has a firm orderbook totalling RM169m and another RM217.2m in optional contracts. (The Edge)

AWC Bhd (AWC) has secured a RM48.57m contract to provide facilities management and maintenance services at Menara Seri Wilayah in Putrajaya. The five-year contract will run from Dec 12, 2024, to Dec 11, 2029. (The Edge)

Johor Plantations Group Bhd (JPG) has appointed Johor Corporation (JCorp) affiliated company JL Projects Sdn Bhd as the project manager consortium (PMC) for the construction of its integrated sustainable palm oil complex (ISPOC) for RM30.99m. The ISPOC has an initial development value of RM500m and is expected to be completed by mid-2026. (The Edge)

Berjaya Corp Bhd (BJCORP) has sold 32m shares or 4.14% equity stake in REDtone Digital Bhd (REDTONE), for RM29.76m in cash via direct business transaction. The group will book a gain of RM7.68m on the disposal, which will be reflected in BCorp’s equity position. (The Edge)

Datuk Doh Tee Leong, major shareholder of Lagenda Properties Bhd (LAGENDA) and Epicon Bhd (EPICON) has triggered a takeover offer for Mercury Industries Bhd (MERCURY) after having purchased 59.88% stake. Doh has launched an unconditional mandatory takeover offer at 90 sen apiece for the remaining 40.12% stake for RM23.22m. (The Edge)

Gandingan Jakel Sdn Bhd said it is actively working with Kuala Lumpur City Hall (DBKL) to address concerns at its J Satine project in Wangsa Maju, following a stopwork order issued by the authorities on Nov 8. TCS Group Holding Bhd’s (TCS) wholly owned subsidiary TCS Construction Sdn Bhd was appointed as main contractor by the JV company Jayyid Land Sdn Bhd in June 2021. (The Edge)

MMAG Holdings Bhd’s (MMAG) Guidance Note 3 (GN3) status has been granted a waiver by Bursa Securities after raising RM237.43m — RM145.34m from its six-forone rights issue at 10 sen per share in January, and RM92.09m from warrant conversion from January to September. It fell into GN3 after its shareholders equity fell below 50% of issued share capital in the year ended March 31, 2023 (FY2023). In the 18 months ended September 2024, MMAG posted a net loss of RM95.71m, on revenue of RM824.44m. At end-June, it was in a net-cash position of RM52.6m, not taking into account lease liabilities of RM52.62m. (The Edge)

Pecca Group Bhd (PECCA) has on Monday declared a special dividend of 1.5 sen per share for the financial year ended June 30, 2024 (FY2024). Total payout for FY2024 amounts to 6.5 sen per share, with a dividend payout ratio of 88.79%. (The Edge)

OM Holdings Ltd’s (OMH) manganese alloys workshop suffered minimal damage on Sunday (Nov 17) due to overflow of molten material from casting moulds. The incident was contained, and the company maintains its production guidance of 460,000 to 490,000 tonnes per annum for the financial year 2024. (The Edge)

Source: Mplus Research - 19 Nov 2024