03/03/2025

BIZ & FINANCE MONDAY | MAR 3, 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 weakens amid rising concerns on trade war THE ringgit closed lower against the US dollar last Friday, as growing concerns over an escalating trade war dampened investor sentiment and market confidence. US President Donald Trump said on Thursday that his proposed 25% tariffs on Mexican and Canadian goods will take effect on Tuesday, along with an extra 10% duty on Chinese imports. At 6pm, the ringgit fell to 4.4600/4650 from 4.4410/4480 at Thursday’s close. Bank Muamalat Malaysia Bhd’s chief economist, Dr. Mohd Afzanizam Abdul Rashid, pointed out that the local currency experienced a decline and breached its immediate support level of RM4.45 last Friday, signaling potential challenges ahead for the ringgit in the face of ongoing market pressures. “In addition (to worries over the trade war), US Federal Reserve officials appeared inclined to maintain interest rates,” he told Bernama. The ringgit was traded mostly higher against major currencies. It improved against the British pound to 5.6174/6237 from 5.6303/6392 and rose against the euro to 4.6362/6414 from 4.6559/6633 but was slightly weaker against the Japanese yen at 2.9682/9717 from 2.9634/9683. The local currency traded mostly stronger against Asean currencies, except for the Philippine peso, where it weakened to 7.69/7.70 from 7.67/7.69. It appreciated against the Singapore dollar to 3.3069/3108 from 3.3122/3177, rose against the Thai baht to 13.0455/0670 from 13.0964/1240 and gained against the Indonesian rupiah to 268.7/269.1 from 269.8/270.4.

MAG posts RM139m revenue, RM21.5m pre-tax profit in H1’25 PETALING JAYA: MAG Holdings Bhd, a prawn aquaculture player, listed on the ACE Market of Bursa Malaysia Securities Bhd, announced its financial results for second quarter of the financial year ending June 30, 2025 (Q2’25). The group reported a revenue of RM67.9 million in Q2’25, a 32.2% increase from RM51.4 million in the same quarter last year, driven primarily by higher sales in the aquaculture business. Profit before taxation (PBT) for the quarter rose to RM10.9 million from RM8.4 million in Q2’24, in line with the higher revenue. Other income of RM1.3 million was mainly derived from interest income on a loan to a former subsidiary. For the six months ended Dec 31, 2024 (H1’25), the group recorded a revenue of RM138.9 million, a 41.2% increase from RM98.4 million in H1’24. PBT rose 43.5% to RM21.5 million from RM15 million in the same period last year, driven by higher margins from a more favourable product mix. Other income of RM2.7 million was mainly from interest income on a loan to a former subsidiary. As of Dec 31, 2024, MAG maintained a strong balance sheet with a net cash position of RM20.1 million and a healthy current ratio of 2.4x. Shareholders’ funds totalled RM859.8 million, underscoring the group’s solid financial position. During the quarter, the board of directors of Synergy declared a second interim single-tier dividend of 0.74 sen per share, amounting to approximately RM3.7 million for FY24. When combined with the first interim dividend, the total interim dividend for FY24 amounts to 1.64 sen per share, reflecting a payout ratio of approximately 29% of the group’s earnings.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.5320 2.8410 3.3620 3.1350 4.7210 2.5600 3.3620 5.7210 5.0760 3.8080 62.6300 64.8700 58.9000 5.2800 0.0285 3.0360 41.4100 1.6500 7.9300 125.7400 122.1900 25.4700 1.5800 43.5000 13.9000 124.8400 N/A

4.3980 2.7260 3.2650 3.0520 4.5680 2.4650 3.2650 5.5390 4.8600 3.5460 59.9800 59.7100 55.9800 4.9500 0.0258 2.9390 38.0400 1.5500 7.4700 119.3700 116.0000 23.0000 1.4500 39.6000 12.3300 118.3900 N/A

4.3880 2.7100 3.2570 3.0400 4.5480 2.4490 3.2570 5.5190 4.8450

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

118.1900

3.3460

N/A

59.5100 55.7800 4.7500 0.0208 2.9290 37.8400 1.3500 7.2700 119.1700 115.8000 22.8000 1.2500 39.4000 11.9300 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

MR DIY Group (M) Bhd Hold. Target price: RM1.55

RHB Bank Bhd Buy. Target price: RM7.70

IHH Healthcare Bhd Buy. Target price: RM7.97

Feb 28, 2025: RM7.45

Feb 28, 2025: RM1.38

Feb 28, 2025: RM6.91

Source: Maybank Investment Research

Source: Maybank Investment Research

Source: Maybank Investment Research

RHB’S Q4’24 core net profit of RM835 million (+42% YoY, +0% QoQ) took FY24 core net profit to RM2.39 billion (+17% YoY) – within consensus, but 5% above our full-year forecast. Positively, loan growth remained robust (+6.4% YoY) while NIM improved 6bps QoQ. NOII jumped 39% YoY and JAWS was positive. Credit cost was however higher due to pre-emptive provisions against specific corporate loans and as such, FY24 pretax profit growth was a slower, but still commendable, 7% YoY. Management’s FY25 targets include a) loan growth 6-7% (FY24: 6.9%; MIBG: 5.8%), b) NIM 1.86-1.9% (FY24: 1.86%; MIBG: 1.87%), c) cost/income ratio 45.5-46% (FY24: 46.7%; MIBG: 46.4%), d) GIL ratio 1.4-1.5% (FY24: 1.47%; MIBG: 1.5%), e) credit cost 15-20bps (FY24: 22bps; MIBG: 20bps). Management also targets an ROE of 10.4-10.8% (FY24: 9.8%; MIBG: 10%). We have raised our FY25 loan growth forecast to 5.8% from 5.5% and lowered our credit cost assumption to 20bps from 25bps previously for FY25/26. As such, we are upgrading our FY25/26 net profit forecasts by 3% respectively. Our FY25 ROE of 10% trails management’s target of 10.4-10.8%. On prudent grounds, we have assumed a constant DPS of 43 sen over the next three years, which implies a declining payout ratio to 53% in FY27, which would still be above management’s stipulated dividend payout policy of 30-50%. Dividend yield would still be attractive at 6.4%. As the fourth largest domestic financial institution in Malaysia in terms of asset size, any economic slowdown in the country would have a knock-on effect on the group’s operating performance. BUY with RM7.70 TP. – Maybank Investment Research, Feb 28

Q4’24 net profit of RM147 million (-7% YoY, +21% QoQ) brought FY24 net profit to RM569 million (+2% YoY). The latter accounted for 97% / 95% of our/consensus full-year earnings estimates. Positively, an interim DPS of 1.8 sen was declared which brings FY24 DPS to 5 sen (FY23: 3.2 sen, DPR: 54%) with a payout ratio of 83%, exceeding its dividend policy target of 50% to 65%. MRDIY’s Q4’24 revenue rose by a marginal +3% YoY predominantly due to contribution from new stores (+174 stores YoY) but partially offset by weak SSSG of -5.5% YoY (FY24 SSSG: -1.9% YoY) – led by higher out of stock rates given warehouse inventory fulfilment issues. Favourable FX however drove gross profit margins up to 46.7% (+0.8ppts YoY). Q4’24 pre-tax profit fell 8% YoY mainly from higher operating expenses relating to labour, utilities and costs associated with its new automated and existing warehouses which amounted to RM4.9 million. The commissioning date for its new automated warehouse has been pushed back to mid-2025 and target full-capacity ramp up towards end-FY25. With this, high labour and warehousing costs are expected to continue in the near-term. Moreover, MRDIY shared that sales erosion (on a per sq ft & per store basis) may also continue into FY25 which suggests that MRDIY’s new store growth target has outpaced the growth in consumers’ propensity to spend. Hence, our FY25-26 earnings estimates are cut by 15% / 16% upon adjusting for lower average store sales and higher operating expenses. HOLD with RM1.55 TP. – Maybank Investment Research, Feb 28

IHH registered a +26%/ +33% YoY boost in its Q4’24 revenue/EBITDA owing to robust and revenue-intensive healthcare demand, which brought FY24 core net profit to an all-time high of RM2.2 billion (+13% YoY). However, this was partially subdued by a RM239 million write-off from revaluation gains of investment properties in the quarter, which sequentially tapered Q4’24 core net profit to RM325m (-33% YoY, -39% QoQ). Operationally, we saw an average 1-2ppt YoY improvement in terms of hospitals’ FY24 EBITDA margins across all key segments. This had also offset its larger finance cost of RM1.1 billion (+13% YoY) due to increased borrowings required to fund its recent acquisitions i.e. Island Hospital in Nov 2024. IHH’s India and Malaysia segments are looking at the most aggressive bed expansion plans group-wide, with target to increase bed capacity by +1,910 and +1,420 respectively over the next three years. This should further support our expectations of India/ Malaysia’s EBITDA 3-year CAGR growth of 20%/ 19% with higher overall demand for complex healthcare. We remain positive for a sustainable growth in inpatient admissions and revenue intensity especially with the addition of the 600-bed Island Hospital, which is expected to boost IHH’s market share in Malaysia’s booming medical tourism space. We remain cautious on probabilities of a seasonally muted Q1’25 due to a higher concentration of festivities. The nursing shortage experienced by private healthcare providers like IHH poses downside risk to earnings via higher staff costs but its impact to share price is not easy to ascertain as it is “slow-burning”. BUY with RM7.97 TP. – Maybank Investment Research, Feb 28