13/02/2025

BIZ & FINANCE THURSDAY | FEB 13, 2025

20

MARKETS/FROM THE BROKERS

SUNBIZ presents extracts of a selection of commentaries and research reports received from stockbrokers on counters that could be of interest to investors.

DISCLAIMER: The information is extracted from stockbrokers’ commentaries and research reports and do not represent the views or opinions of Sun Media Corporation Sdn Bhd. It is not a solicitation, recommendation or an offer to buy or sell the equities featured. Sun Media Corporation shall not be liable or responsible for any consequences resulting from usage of the information.

[ Compiled by SunBiz Team

Ringgit ends flat against dollar on cautious sentiment THE ringgit ended flat against the US dollar yesterday on cautious sentiment regarding the current economic outlook. At 6pm, the ringgit stood at 4.4680/4725 versus the greenback compared to Monday’s close of 4.4680/4730. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said market participants remained anxious on policy uncertainties under US President Donald Trump. “The currency market participants remain anxious about Trump 2.0 policies and how the US Federal Reserve (Fed) would react to the policy,” he told Bernama. In his semi-annual monetary policy report to Congress, Fed chair Jerome Powell signalled that the central bank was in no rush to ease interest rates further and would wait until next quarter before cutting rates again. Meanwhile, the ringgit was traded mostly lower against a basket of major currencies. It strengthened versus the Japanese yen to 2.9106/9137 from 2.9352/9387 at the close on Monday, but slipped against the euro to 4.6351/6398 from 4.6128/6179 previously and depreciated vis-a-vis the British pound to 5.5613/5669 from 5.5430/5492. The local note was mostly higher against Asean currencies. The ringgit rose versus the Indonesian rupiah to 272.7/273.2 from 273.1/273.5 at Monday’s close, gained against the Philippine peso to 7.68/7.69 from 7.69/7.70 previously and climbed vis-a-vis the Thai baht to 13.0953/1151 from 13.1768/1986. However, it eased against the Singapore dollar to 3.3028/3064 from 3.3006/3048 on Monday.

Steel Hawk wins manpower supply deal from Petronas unit KUALA LUMPUR: Oil and gas services and equipment provider Steel Hawk Bhd’s wholly owned subsidiary Steel Hawk Engineering Sdn Bhd (SHE) secured a contract to supply manpower from PRPC Utilities and Facilities Sdn Bhd. The contract was signed on Nov 29, 2024, and the announcement was made following the consent obtained from PRPC on Feb 12, 2025, for Steel Hawk to release this information to Bursa Malaysia. Under the terms of the contract, SHE will provide manpower for bagging operations PRPC’s solid product warehouse. The contract is on a call-out basis with no fixed contract value, and it will be valid for three years. PRPC is a subsidiary of Petronas Refinery and Petrochemical Corporation Sdn Bhd (PRPC), a member of the Petroliam Nasional Bhd (Petronas). To recap, on Feb 3, 2025, Steel Hawk announced the extension of its existing contract to provide ONMCM services for Petronas Carigali Sdn Bhd. This extension will cover the period from Jan 1, 2025 to Dec 31, 2025 following the expiration of the original contract on Dec 31, 2024. Furthermore, on Nov 12, 2024 the group was appointed as a panel contractor for five available packages to provide CMW works for Petronas and 27 of its Downstream Operating Plant Units. This appointment has a three-year term with an option for two one-year extensions at Petronas’ discretion. Steel Hawk deputy chairman and executive director Datuk Sharman K Michael said the company remain optimistic about the outlook for the oil and gas industry, particularly given Petronas’ continued investment as outlined in its latest Activity Outlook for 2025-2027.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.5185 2.8670 3.3380 3.1600 4.6900 2.5720 3.3380 5.6360 4.9850

4.3855 2.7520 3.2420 3.0770 4.5400 2.4780 3.2420 5.4590 4.7740 3.5360 59.6400 59.3400 55.7100 4.9800 0.0259 2.8550 38.1400 1.5400 7.4300 118.9800 115.6700 22.8700 1.4400 39.1400 12.3000 118.0500 N/A

4.3755 2.7360 3.2340 3.0650 4.5200 2.4620 3.2340 5.4390 4.7590

1 Australian Dollar 1 Brunei Dollar 1 Canadian Dollar 1 New Zealand Dollar 1 Singapore Dollar 1 Sterling Pound 1 Swiss Franc 100 UAE Dirham 100 Bangladesh Taka 100 Chinese Renminbi 100 Danish Krone 100 Hongkong Dollar 100 Indian Rupee 100 Indonesian Rupiah 100 Japanese Yen 100 New Taiwan Dollar 100 Norwegian Krone 100 Pakistan Rupee 100 Philippine Peso 1 Euro

124.4600 3.7960 62.2500 64.4600 58.6100 5.3000 0.0286 2.9490 14.8000 41.4400 1.6500 7.8800 125.3300 121.8400 25.3100 1.5600 42.9600 13.8600

117.8500

3.3360

N/A

59.1400 55.5100 4.7800 0.0209 2.8450 37.9400 1.3400 7.2300 118.7800 115.4700 22.6700 1.2400 38.9400 11.9000 N/A

100 Qatar Riyal 100 Saudi Riyal

100 South Africa Rand 100 Sri Lanka Rupee 100 Swedish Krona

100 Thai Baht

Source: Malayan Banking Bhd/Bernama

RGB International Bhd Buy. Target price: RM0.71

Plantations Neutral

MGB Bhd Outperform. Target price: RM1.16

Feb 12, 2025: RM0.70

Feb 12, 2025: RM0.435

Source: PublicInvest Research

MGB has secured a high-rise construction job from its parent company, LBS Bina Group, for RM194.7 million. The contract’s scope includes the construction of a 22-storey service apartment and a 2-storey fast-food restaurant. This new job is expected to contribute 5.8% per annum on average to the group’s earnings over the 28 months contract period. The contract, worth RM194.7 million, was awarded to MGB’s wholly owned unit MGB Construction & Engineering SB by LYK Architect SB, on behalf of Casa Inspirasi SB for a development project in Cameron Highlands. The project, spanning 4.1 acres in Tanah Rata, consists of two phases: a two-storey fast food restaurant and a 22-storey serviced apartment with retail spaces, parking and amenities. Both phases are scheduled to commence simultaneously on Feb 17 and are expected to be completed within 28 months. With this job win, the group’s orderbook is estimated to have reached RM1.27 billion, providing earnings visibility for the next 2-3 years. Our projections indicate that this job will contribute approximately 5.8% per annum on average, from FY25 to FY27F, assuming a high single-digit margins. The group continues to prioritise building affordable homes by leveraging innovation, technological advancements, and enhancements in its construction processes. Additionally, it seeks to secure new government projects and expand its footprint in Saudi Arabia through strategic partnerships with Nordimpianti System S.R.L. and MCT Italy S.R.L. In the near term, potential growth drivers include the development of the Kertih Terengganu Industrial Park. OUTPERFORM with RM1.16 TP. – PublicInvest Research, Feb 12

Source: PublicInvest Research

Source: Bloomberg

MALAYSIA’S palm oil industry kicks off 2025 with a low inventory level of 1.57m mt as production saw a steeper than expected drop due to heavy rainfall in East Malaysia. It was also the lowest level since April 2023. Given shorter working month in February, we expect production to pick up as early as next month. Following the positive data, CPO futures rose RM92 to RM4,596/mt. Palm oil inventories registered a 7.6% MoM drop to 1.57m mt, the lowest level since April 2023. Meanwhile, the stock-to-usage ratio climbed from 8.6% to 9.1% as production saw a steeper decline than the exports. CPO exports saw another steep decline, down 12.9% MoM to 1.1m mt, mainly dragged by China (-79.2%), India (-38.1%), and the Middle East (-25.6%), partially offset by strong demand from the EU (+2.3%), and the US (+17.2%). We attributed the weaker demand to two notable factors, namely uncompetitive CPO prices and slow demand for vegetable oil in the beginning of the year. CPO production dropped 16.8% MoM to 1.57m mt as the heavy rainfall in East Malaysia affected harvesting and logistics activities. It was also the steepest drop since Jan 2016. The steep decline was dragged by lower production from Peninsular Malaysia (-18.3%) and East Malaysia (-15.1%). Despite registering lower production on a YoY basis, we expect better results from most of the plantation companies under our coverage as CPO price saw a strong performance, recording a 31.6% gain YoY in Q4’24. Ta Ann posted the steepest production drop, down 11.5% followed by Sarawak Plantation’s 9.8%. – PublicInvest Research, Feb 12

RGB International (RGB) is the leading distributor of Aristocrat, Light & Wonder, and Konami’s electronic gaming machines (EGM), holding a dominant 70-80% market share across Asian casinos. Aspired to be the leading one-stop solution provider for casinos, RGB has partnered with a major China-based company to provide cutting-edge security surveillance solutions. RGB is sitting on a strong net cash position of RM156 million, or 25% of its market capitalization. We expect a blockbuster year for RGB, forecasting a 32% profit CAGR over 2023–26. RGB is in a prime position to capture 60–70% of new EGM orders from its largest market, the Philippines, driven by 1) a robust pipeline of new integrated resorts set to open, 2) ongoing upgrades following the privatisation of PAGCOR’s casino operations, and 3) growing global replacement market. With the recent legalisation of gambling in the UAE and Japan, we estimate that the total addressable market for EGMs is projected to expand by 17k over 2024–27. This growth builds on the existing 44k EGMs currently in operation, reflecting the significant potential opportunities from newly opened market. These dynamics provide strong visibility for our RGB’s projected sales of 4.5–5.5k units across 2024–26. We see RGB as the driving force behind casino success. With an extensive portfolio of renowned brands and in-depth industry expertise, RGB provides casinos with innovative, high performance solutions that maximise player engagement. BUY with RM0.71 TP. – Phillip Capital Research, Feb 12