MQ Market Updates - 14 December 2023

MQ Trader

Publish date: Thu, 14 Dec 2023, 05:27 PM

Pestech International Bhd's joint venture (JV) with Sky High Construction Sdn Bhd has secured a RM109.98 million contract from Syarikat SESCO Bhd for the construction of an electrical substation project in Entinggan, Kuching, Sarawak. Pestech's subsidiary Pestech Sdn Bhd (PSB) will be allocated 60 per cent of the contract value while its JV partner Sky High Construction Sdn Bhd will have the remaining 40 per cent. Pestech said in a filing to Bursa Malaysia that the contract's commencement date shall be Dec 26, 2023, or any later date as notified by Syarikat SESCO and to be completed 23 months from the commencement date. (NST)

Eco World International Bhd (ECWI) is expected to pay out dividends of about 25 sen a share in financial year 2024 (FY24) even as it continues to post losses without any new property launches planned. According to Maybank Investment Bank Bhd (Maybank IB) research, ECWI has set a RM850 million sales target for FY24 and will likely pay another RM600 million (25sen /share) as dividend in FY24. It as lowered ECWI's FY24/25 loss projections by 51 per cent and 60 per cent respectively after factoring in actual FY23 results. Excluding RM15.5 million foreign exchange gain and RM26.3 million impairment losses, ECWI's fourth quarter ended Oct 30, 2023 (4QFY23) core net loss of RM26.9 million brought its FY23 core net loss to RM91 million, meeting the research firm's FY23 net loss forecast. The YoY decline in FY23 core net loss was due to lower finance costs and higher interest income as well as lower losses from Eco World-Ballymore projects. (NST)

Eco World Development Group Bhd (EcoWorld Malaysia) achieved sales of RM3.61bil in FY23, which exceeded its sales target of RM3.5bil. According to the group, its Eco Business Parks registered RM1.04bil in industrial sales, which was the highest in a single year. The group's Eco Hubs, meanwhile, contributed RM515mil in commercial properties sales in FY23, representing a 15% increase over FY22. Total residential sales in FY23 hit RM2.05bil on the back of the group's Eco Townships and Eco Rise. (TheStar)

Scientex Bhd is expecting a sustainable performance in its packaging division for the coming year, while projecting resilient demand for its property division. In the first quarter of its 2024 financial year (FY24), Scientex registered a net profit of RM137.84mil, up from RM107.18mil, which brought its earnings per share higher to 8.89 sen from 6.91 sen previously. The group's revenue was RM1.11bil, up from RM1.03bil in the same quarter in 2022. The group, which has been experiencing slowing global market demand due to inflationary pressure, as well as rising interest rates and energy costs, said it will remain focused on its operational efficiency. (TheStar)

Samaiden Group Bhd’s wholly-owned subsidiary, Samaiden Sdn Bhd, has been appointed to undertake the engineering, procurement, construction and commissioning works for the development of a 2MWAC small hydro facility at Hutan Rezab Pelagat in Besut, Terengganu. In a filing with Bursa Malaysia, Samaiden said the contract was worth RM25.8mil and was secured from Tesdec Hydropower Sdn Bhd. (TheStar)

Sapura Energy Bhd topped the list of most active stocks in Thursday morning trade, after the oil and gas services provider received in-principle approval for its proposed debt restructuring scheme. At the time of writing, the counter had risen 10% or half a sen to 5.5 sen a share, giving it a market capitalisation of RM790.96 million. Trading volume swelled to 117.16 million, 22% higher than Wednesday’s trading volume of 96.12 million, making it the most briskly traded counter on Bursa Malaysia. (TheEdge)

Chin Hin Group Bhd’s conditional mandatory general offer (MGO) to acquire the remaining shares it does not own in Ajiya Bhd has turned unconditional after its collective shareholding — together with persons acting in concert with it — climbed past 50%. In a bourse filing, AmInvestment Bank Bhd, on behalf of Chin Hin, said the acceptance condition for the MGO has been met. The offer, it said, will now remain open for acceptances until Jan 3, 14 days from the day it turned unconditional. (TheEdge)

Datuk Seri Amir Hamzah Azizan has stepped down from the boards of Malaysian Resources Corp Bhd (MRCB) and Sime Darby Plantation Bhd respectively following his appointment to the Malaysian Cabinet, the companies said in separate stock exchange filings today. Amir Hamzah was appointed Finance Minister II by Prime Minister Datuk Seri Anwar Ibrahim following a Cabinet reshuffle on Tuesday. Amir Hamzah, who was the non independent non executive chairman of MRCB, came to the company's board in September 2021, and was appointed the non independent non executive director of Sime Darby Plantation Bhd in February 2023. He was also the CEO of the Employees Provident Fund, which owns 36.21% and 13.33% stakes in MRCB and Sime Darby Plantation respectively. (TheStar)

Westports Holdings Bhd stock recommendation has been downgraded to "reduce" from "hold" by CGS-CIMB Securities as a lack of clarity regarding the timing and magnitude of tariff increases is important for financing substantial capital expenditures. The firm said when Westports announced the signing of the new concession agreement last Friday, there was no mention of any proposed container regulatory terminal handling charge (THC) tariff increase. Last Friday, Westports signed the third supplemental agreement for the privatisation of Westports with the government and the Port Klang Authority (PKA) for a 58-year extension of concession until 2082. (NST)

RHB research is positive on the disposal of KPJ Healthcare Bhd's loss-making aged care business, Jeta Gardens, in Australia, suggesting that it could increase earnings estimate for 2024 by eight per cent. "We are positive on the disposal of the Jeta Gardens business given that, by removing the underperforming asset, KPJ can reduce its operating costs and cash flow requirements," the firm said in its note today. Jeta Gardens registered a net loss of RM20.9 million in 2022. KPJ Healthcare announced it was selling its 57.2 per cent-owned Jeta Gardens to DPG Services Pty Ltd yesterday, in a related party transaction. (NST)

Hong Leong Investment Bank (HLIB) research is optimistic about the prospects of public transport service provider SMRT Holdings Bhd, considering substantial earnings potential from the utility and financial services sectors coupled with the growing recurring earnings base. In its note today the firm said it finds SMRT's current financial year 2025 (FY25) forward price to earnings ratio of 13.8 times to be very undemanding, making it a compelling case. New managed sites increased by 1,130 (vs 952 in the six-month period of FY23) to 22,500 in the first quarter of FY24 thanks to encouraging new site deployments in Malaysia and Indonesia markets, which both registered quarter-on-quarter (QoQ) growths according to management. (NST)

Rakuten Trade has a “buy” rating on Kerjaya Prospek Group Bhd (KPG) at RM1.46, with a target price (TP) of RM1.79, and is positive on KPG’s outlook. In an note on Thursday, the research house said The Vue @ Monterez launched recently in the third quarter ended Sept 30, 2023 (3QFY2023), with a gross development value (GDV) of RM250 million, had recorded a take-up rate of approximately 50% as of November. Rakuten said that meanwhile, KPG is planning to launch Papyrus @ North Kiara, with a GDV of RM500 million, in 1QFY2024. (TheEdge)

RHB Retail Research said Superlon Holdings Bhd is poised for a bullish breakout, as it climbed to test the immediate resistance point of 72 sen on improved trading volume. In a trading stocks note on Thursday, the research house said that if a breakout happens above that level, the stock is likely to propel strongly towards 76.5 sen, before heading for the next resistance of 81 sen. “On the other hand, falling below the 69.5 sen support will negate the bullish setup,” it said. (TheEdge)

Source: New Straits Times, The Edge Markets The Star 14 December 2023