MQ Market Updates - 15 December 2023

MQ Trader

Publish date: Fri, 15 Dec 2023, 05:20 PM

The sales outlook for Poh Huat Resources Holdings Bhd is expected to remain sluggish in financial year 2024 (FY2024) as the challenging furniture industry landscape is marred by weaker orders from US customers. Public Investment Bank Bhd (PublicInvest) has downgraded Poh Huat to "Underperform" and cut its target price for the company's stock to RM1.05 a share. Poh Huat's fourth quarter (Q4) financial year 2023 (FY23) headline net profit fell by 54.2 per cent year on year (YoY) to RM10.8 million, mainly attributable to reduced sales orders, reflecting subdued spending trends in the US. (NST)

Petra Energy Bhd and its wholly-owned subsidiary Petra Marine Sdn Bhd has entered into a memorandum of agreement with Great Sky Investments Corpoation for the disposal of a vessel named Petra Lyra for US$3.95mil (RM18.45mil) cash. Petra Energy said in a stock exchange filing the vessel is an accommodation work barge built in 2009 that sails under the Malaysian flag. "The disposal is timely as it allows PEB to monetise non-performing asset within the Group and crystalise the value of the vessel at a reasonable price. (TheStar)

The trading stock of Yinson Holdings Bhd climbed on Friday following financial results that came within market expectations. At the start of trading, the share was up four sen to RM2.54 apiece, before climbing to an intra-morning high of RM2.58. As at 9.20am, there had been 486,200 Yinson shares crossing hands on the market. Yinson, which announced its third quarter financial results yesterday, showed core earnings growth on the back of stronger FPSO operations. (TheStar)

SMRT Holdings Bhd can expect substantial earnings potential arising from the utility and financial services sectors, coupled with the growing recurring earnings base in the future. Strong growth in new site deployments was seen in the first quarter of financial year 2024 (1Q24) and this will gain momentum in the coming two quarters. This is so since utility companies typically spend the bulk of their capital expenditure towards the year-end, said Hong Leong Investment Bank (HLIB) Research. (TheStar)

Sapura Energy Bhd has been granted a time extension of up to May 31, 2024, to submit its Practice Note 17 (PN17) regularisation plan to the relevant regulatory authorities. In a filing with Bursa Malaysia, its principal adviser MIDF Amanah Investment Bank Bhd announced on behalf of the company that Bursa Malaysia Securities had given the extension to Sapura Energy via its letter dated Dec 13, 2023. “The extension of time would enable the company to continue building a robust regularisation plan based on the ongoing debt restructuring exercise, which is well underway following the confirmation for its proposed restructuring scheme approval-in-principle from the Corporate Debt Restructuring Committee,” it said. (TheStar)

Yinson Holdings Bhd is keeping its optimistic business outlook, underpinned by strong global demand for clean, affordable and stable energy, which it said has helped drive expansion in all its business units. The group said the floating production storage and offloading (FPSO) market continues to see strong demand for contractors such as itself, who have an edge in emissions reduction technologies and a solid track record of on-time delivery, as well as safety and operational performance. Yinson staged a strong performance in its third fiscal quarter ended Oct 31 (3Q24), which saw net profit jump by 60% year-on-year (y-o-y) to RM248mil, as revenue also similarly surged by 61.9% y-o-y to RM2.81bil. (TheStar)

Astro Malaysia Holdings Bhd will continue to maintain a cautious outlook with an emphasis on cost discipline, going forward. For the third quarter (3Q) ended Oct 31, 2023, Astro’s advertising expenditure (adex) saw a growth of 13% quarter-on-quarter (q-o-q) to RM98mil. The group’s average revenue per user posted an uplift of RM2.40 year-on-year (y-o-y) to RM99.80, driven by new TV packs and broadband bundles. Astro’s radio expenditure, TV advertising expenditure (adex) and digital adex market shares in 3Q of financial year 2024 (FY24) stood at 78%, 31% and 2%, respectively. (TheStar)

Ranhill Utilities Bhd has accepted a letter of acceptance of tender worth RM283.89mil for the non-revenue water (NRW) reduction contract in Johor. In a filing with Bursa Malaysia, Ranhill said this is the seventh successive NRW project in Johor it has secured through a competitive open tender process since 2011. (TheStar)

Scientex Bhd’s results for the first quarter ended Oct 31, 2023 (1QFY2024) met the expectations of several research houses, prompting some analysts to adjust their target prices (TPs) for the stock. The packaging manufacturer and property developer’s net profit in 1QFY2024 jumped 28.6% to RM137.84 million, from RM107.18 million a year earlier, driven by its property division. Scientex reported a slight uptick in revenue to RM1.11 billion, from RM1.03 billion in 1QFY2023. Kenanga Research, in a note on Friday, maintained its earnings forecasts for Scientex but upgraded its call to “market perform” from “underperform” and raised its TP to RM3.75 (from RM3.23), underpinned by robust demand in the group’s affordable housing development. (TheEdge)

SkyWorld Development Bhd is collaborating with Universiti Malaya (UM) through a memorandum of agreement (MOA) to develop an Application Programming Interface (API) that will revolutionise the data integration ecosystem within the property development sector, according to a press statement issued on Thursday (Dec 14). The MOA outlines a two-year (1Q2024 until 4Q2025) collaboration between SkyWorld and UM to develop cutting-edge technology ecosystems focusing on API development, data warehousing, data mining and an advanced data analyst system integrated with machine learning. (TheEdge)

MIDF Research has upgraded Eco World Development Group Bhd (EcoWorld) to “buy” at RM1, with an unchanged target price of RM1.14, and said the developer’s core net income of RM272.9 million for the financial year ended Oct 31, 2023 (FY2023) came in above consensus full-year expectations at 107%, but within MIDF’s estimate at 102%. In a note on Friday, the research house fine-tuned its earnings forecasts for FY2024 by 6%, and for FY2025 by 5.8%, post release of full-year figures for FY2023. (TheEdge)

ACE Market-bound Critical Holdings Bhd posted a net profit of RM6.21 million for its first quarter ended Sept 30, 2023 (1QFY2024) on revenue of RM49.68 million. Earnings per share for the quarter stood at 1.67 sen, based on the company's bourse filing on Thursday. No comparative figures were available, as it was the first interim financial report announced by the company. The quarterly net profit makes up nearly 64.75% of the company's total profit after tax (PAT) for FY2023, which amounted to RM9.59 million, according to the company's prospectus summary. (TheEdge)

Petronas Chemicals Group Bhd (PetChem), which is 64.35%-owned by Petroliam Nasional Bhd (Petronas), has named Mazuin Ismail as its new managing director and chief executive officer, effective from Jan 1, 2024. Mazuin, currently serving as the senior vice-president (SVP) of corporate strategy at Petronas, will succeed Mohd Yusri Mohamed Yusof, who was appointed as the MD and CEO in January 2022. (TheEdge)

Kanger International Bhd’s largest shareholder and executive director Kuah Choon Ching has disposed of his entire 12.28% stake in the company. According to a bourse filing on Monday, Kuah offloaded the stake comprising 74.05 million shares via the open market on Nov 30, thereby ceasing to a substantial shareholder in the construction outfit. Based on the price tag of seven sen per share stated in the filing, the executive director disposed of the block of shares for RM5.18 million. (TheEdge)

Hong Leong Investment Bank (HLIB) research is bullish on Kuala Lumpur Kepong Bhd's (KLK) RM276.8 million cash offer to acquire two companies in Indonesia, which it believes to be a reasonable offer price. KLK and its Singapore-incorporated wholly owned subsidiary, KLK Plantations and Trading Lte Ltd have entered into conditional shares sale agreements to acquire PT Satu Sembilan Delapan (SSD) and PT Tekukur Indah (TI). Both companies have a combined planted landbank of 6,371 hectare in East Kalimantan Province, Indonesia, a RSPO certified six tonnes per hour palm oil mill, and a biogas plant with capacity of 700 KWh/month (which is expected to be commissioned by July 2025). (NST)

RHB Retail Research said Kossan Rubber Industries Bhd is poised for an upward surge following a technical breakout above the RM1.77 resistance on Thursday, as evidenced by a "Bullish Marubozu" candlestick. In a trading stocks note on Friday, the research house said that supported by a significant increase in trading volume, the bullish momentum is expected to propel the stock towards the RM2 mark, with the next resistance at RM2.22. “Conversely, a decline below the RM1.60 support would indicate a potential downtrend,” it said. (TheEdge)

RHB Retail Research said Southern Cable Group Bhd is positioned for a technical breakout, having rebounded from the 21-day simple moving average line and approaching the immediate resistance of 40 sen on improved trading volume. In a trading stocks note on Friday, the research house said that should a breakout occur above that level, the current sideways consolidation could turn to an uptrend, potentially advancing towards the 42 sen mark before targeting the next resistance at 45 sen. “Conversely, a drop below the 36 sen support would invalidate the bullish setup,” it said. (TheEdge)

Source: New Straits Times, The Edge Markets The Star 15 December 2023