24/03/2025

BIZ & FINANCE MONDAY | MAR 24, 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 rises against US dollar on improved sentiment THE ringgit ended higher against the US dollar last Friday on improved sentiment towards the local currency, said an analyst. The local note rose to 4.4180/4220 against the greenback from Thursday’s close of 4.4215/4270. UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan said the ringgit opened lower this morning at 4.4245/4360 versus the US dollar, but strengthened throughout the day. “Despite initial weakness following the Federal Open Market Committee’s (FOMC) mildly dovish stance, the ringgit managed to gain ground as US treasuries remained stable, providing no strong signals for capital flows that could have exerted downward pressure. “Asian currencies, including the ringgit, recorded brief gains post-FOMC, though the reaction was short-lived as markets remained cautious ahead of key global developments,“ he told Bernama. The ringgit traded higher against a basket of major currencies. It improved against the euro to 4.7843/7886 from 4.7973/8033 at Thursday’s close, increased against the British pound to 5.7151/7203 from 5.7276/7347 and gained against the Japanese yen to 2.9574/9602 from 2.9728/9767. The local note also strengthened against Asean currencies. It edged up against the Singapore dollar to 3.3081/3114 from 3.3117/3164 at the previous close, climbed against the Philippine peso to 7.70/7.71 from 7.72/7.74, and ticked up against the Indonesian rupiah to 267.7/268.0 from 268.1/268.6.

MSB Global to raise RM26.6m from ACE Market listing KUALA LUMPUR: MSB Global Group Bhd, a player in Malaysia’s aftermarket automotive parts and component industry, launched its prospectus for the Initial Public Offering (IPO) in conjunction with its listing on the ACE Market of Bursa Malaysia Securities Bhd. MSB Global is the exclusive distributor of GSP-branded automotive parts and components in Malaysia, supplying a comprehensive range of high-quality aftermarket products. These include driveshafts, wheel hub assemblies, suspension parts, steering racks, and more, ensuring durability and reliability for customers. At the same time, the group has expanded its footprint in the automotive lubricants and fluids segment through its in house brands FK Fukuoka and ZR.Zuric – offering engine oil, automotive transmission fluid, gear oil, brake fluid, and other essential automotive fluids to meet the diverse needs of the market. The IPO seeks to raise RM26.6 million through the issuance of 133 million new ordinary shares at a retail price of RM0.20 per share. The proceeds from the IPO will be allocated - RM4.97 million for the reconstruction of a new factory and warehouse to support lubricants and fluids production; RM6 million for the purchase of machinery, equipment, and raw materials to establish blending and fill-and-finish production lines; RM0.84 million to support the launch and distribution of the group’s in-house branded electric vehicle chargers; RM5.5 million for repayment of bank borrowings; RM4.79 million for general working capital and RM4.5 million for listing expenses. Managing director Datuk Ow Kee Foo said the prospectus launch marks a key step for MSB Global, helping solidify their position in the automotive aftermarket and expand their product portfolio.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.4925 2.8470 3.3630 3.1330 4.8820 2.5980 3.3630 5.8200 5.1180

4.3595 2.7330 3.2660 3.0500 4.7260 2.5030 3.2660 5.6370 4.9000 3.5150 59.7700 61.7600 55.5200 4.9700 0.0255 2.9150 40.2200 1.5300 7.5100 118.3000 114.9700 23.1300 1.4300 41.6100 12.3200 117.3600 N/A

4.3495 2.7170 3.2580 3.0380 4.7060 2.4870 3.2580 5.6170 4.8850

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

123.7300 3.7740 62.3900 67.0900 58.4100 5.2900 0.0282 3.0110 14.6000 43.7200 1.6300 7.9700 124.6200 121.1000 25.6100 1.5500 45.7500 13.8900

117.1600

3.3150

N/A

61.5600 55.320 4.7700 0.0205 2.9050 40.0200 1.3300 7.3100 118.100 114.7700 22.930 1.230 41.410 11.9200 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

IJM Corporation Bhd Buy. Target price: RM3.45

Top Glove Corporation Bhd Buy. Target price: RM1.06

Auto & Autoparts Neutral

March 21, 2025: RM0.875

March 21, 2025: RM2.04

Source: Bloomberg

Source: Bloomberg

TOPG reported a Q2’25 core profit of RM23.3 million, taking 1H’25 core earnings to RM1.4 million (better than our expected RM13 million core loss) and largely due to improving ASPs. Realised ASPs spiked up by 3% QoQ to US$19.90 on a better sales mix (increased contributions from higher ASP products) while sales volumes dipped 9% QoQ to 9.4 billion pieces – no thanks to frontloading by US customers. Raw material prices lowered QoQ: Natural latex dipped 1% QoQ while nitrile butadiene rubber prices decline by 8% QoQ. Plant utilisation declined 6ppts QoQ to 58%. Management guided that sales volumes hit through in February, but are likely to resume the positive growth trend in March-May. Order enquiries for June from US customers picked up meaningfully, indicating signs of inventory restocking for the quarters ahead. Competition within the non-US market remains intense, as China ASPs of US$15 remain beyond unsustainable levels for Malaysian glove makers. Nonetheless, the net effect remains positive for local players, as the effect of losing out on non-US sales is set to be compensated by better ASPs in the US. Our previous downgrade call largely played out. TOPG now trades at 1.6x P/BV or 0.3SD below its 3-year historical mean of 1.7x. Looking beyond May, we expect sales volumes to pick up gradually when the US channel inventory depletes. Following the recent share price correction, we think TOPG’s valuation is undemanding, as such valuations last traded prior to the tariff announcements in May 2024 and Sept 2024. Key risks: Decrease in gloves ASP, slower-than-expected demand recovery, lower-than- expected utilisation rate, and higher-than-expected raw material prices. BUY with RM1.06 TP. – RHB Research, March 21

IJM CORP has refuted what it called “false and malicious allegations” circulating online about the company and its leadership. In a briefing, the group stressed that it upholds strict corporate governance, with its chairman – who is a non-executive director – holding only 0.3% of its shares. At the time of writing, none of IJM’s executives and board members have been contacted by the authorities in relation to the allegations. IJM said it had lodged a report with the Malaysian Communications and Multimedia Commission (MCMC) to initiate investigations on the allegations, and will take legal action if necessary. The group added that it would cooperate fully with the authorities, if required. The civil servant housing job in Indonesia’s new capital (RM1 billion) is undergoing finalisation of its feasibility study and could take another 3-6 months before the final outcome is known. Extension works for the New Pantai Expressway (RM1 billion) should be dished out soon, pending approvals – although it is unlikely to be by end-March. Therefore, we think IJM will not achieve its target of RM5 billion new local jobs, with only RM2.7 billion jobs clinched YTD FY25. However, we gather that IJM recently submitted two tenders related to hyperscale data centre (DC) players, with another four in the works. As we think IJM will not meet its FY25F RM5 billion new job win target, we revise our target to RM3 billion (from RM5 billion). Consequently, we slash our earnings estimates by 5% each for FY25-27. We also ascribe a lower target P/E of 17x (close to where it was trading during the CY17 construction upcycle) from 20x for its construction arm, as we think IJM has yet to stack up against other key peers which have sizeable job exposures in DC. BUY with RM3.45 TP. – RHB Research, March 21

Source: Company data, RHB

FEBRUARY TIV rose 30% MoM to 63,906 units (-2% YoY) – which was expected, given the seasonal low numbers recorded in January. This brought YTD TIV to 113.1k units (-14.3% YoY). The MoM jump was seen across all major marques i.e. Honda (+105%), Perodua (+35%), Toyota (+23.2%), and Proton (+14.2%) – albeit offset by Nissan (-12.4%) and Mazda (-9.8%). Note that January was relatively a shorter working month with both the New Year and Lunar New Year holidays occurring then. Total production volume (TPV) grew by 8% MoM (-7% YoY) in February. The MoM increase was driven by strong February production across the major marques, i.e. Perodua (+20%), Proton (+14.7%), Toyota (14.5%), and Honda (+7%). The MoM increase was also likely due to a longer working month in February. TPV is likely to pick up further MoM in March, as carmakers push for higher production before the Aidil Fitri holidays in April. We anticipate TIV for March to increase MoM, driven by carmakers ramping up sales through aggressive festive season promotions ahead of Aidil Fitri in April. As YTD TIV was exceptionally weak (-14.3% YoY), we believe Q1’25 TIV will decrease YoY. Our Top Pick is SIME, as it is well-positioned for the RON95 rationalisation with its broad EV line-up, while its stake in Perodua provides some insulation against earnings risks amidst intensifying competition among the non-national marques. – RHB Research, March 21