28/03/2025

FRIDAY | MAR 28, 2025

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BIZ & FINANCE

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BIZ & FINANCE

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 lower against US dollar due to tariff concerns THE ringgit weakened against the US dollar yesterday alongside other Asean currencies as traders and investors are anxious about the reciprocal tariffs to be imposed by America on April 2. At 6pm, the local note eased to 4.4300/4340 against the greenback from Wednesday’s close of 4.4280/4315. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said Asean currencies were weaker against the US dollar with the Japanese yen depreciating to 150.53 per US dollar, falling by 0.41%, followed by the Singapore dollar which fell 0.28% to S$1.3399 per US dollar. He told Bernama the Indonesia rupiah turned out to be the best-performing currency, rising by 0.2% to 16,562 per US dollar possibly due to the intervention by the Bank of Indonesia as the currency hit its lowest point since June 1998 on Monday. Mohd Afzanizam said the ringgit was the second-best performing Asean currency, appreciating by 0.06% to RM4.4335. “Thus far, the immediate concern would be on the automotive sector in view of the 25% tariff levied on key exporting countries to the US such as Mexico, Japan, South Korea, Canada and Germany.” The ringgit appreciated against the euro to 4.7720/7763 from 4.7805/7842 at yesterday’s close, edged up against the Japanese yen to 2.9351/9380 from 2.9498/9524, but decreased against the British pound to 5.7236/7287 from 5.7161/7206. The local note fell against the Philippine peso to 7.72/7.73 from 7.67/7.68, weakened against the Thai baht to 13.0678/0854 from 13.0277/0453, and slid against the Indonesian rupiah to 267.4/267.8 from 266.9/267.2. However, the ringgit advanced against the Singapore dollar to 3.3060/3094 from 3.3104/3133 at the previous close.

Robust order book supports Binastra’s earnings momentum KUALA LUMPUR: Binastra Corporation Bhd’s Q4 FY25 core earnings of RM25 million brought FY25 core earnings to RM90 million, in line with both Phillip Capital Research’s and consensus expectations at 101% of both full-year forecasts. The research firm noted that Binastra’s FY25 revenue grew 123% YoY to RM947 million, driven by a doubling in the order book to RM3.6 billion from RM1.7 billion at the end of FY24, coupled with stronger project recognition. FY25 EBITDA margin improved by 0.8ppts YoY to 14.1%, primarily driven by better operating leverage from higher turnaround. Phillip Capital Research said Binastra announced a full-year DPS of 3 sen, translating to a 36% payout ratio, which it intends to maintain at a minimum of 30% from FY26 onwards. Sequentially, Phillip Capital Research noted that Binastra’s Q4 FY25 core net profit improved 4% to RM25 million on the back of higher revenue from better progress recognition from ongoing projects. “Looking ahead, we expect FY26 earnings momentum to remain well supported by its robust order book of RM3.6 billion. “This includes the newly secured RM250 million AIMS DC project, which is expected to be completed in FY26, with peak earnings recognition expected in 2H FY26,“ the research firm said. Binastra secured RM3.1 billion in new wins in FY25 and is targeting RM4-5 billion in order book replenishment in FY26, underpinned by a key clientele project pipeline in Klang Valley and Johor, amounting to RM5-6 billion in replenishment opportunities across FY26-27. Additionally, Phillip Capital Research noted that Binastra is in talks with a potential new client for a new high-rise residential construction project, with an estimated GDV of RM200-RM300 million, with finalisation expected in Q2 FY26.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.4940 2.8480 3.3540 3.1450 4.8470 2.5870 3.3540 5.8080 5.1250

4.3610 2.7340 3.2580 3.0610 4.6910 2.4920 3.2580 5.6250 4.9090 3.5170 59.6600 61.3000 55.5200 5.0000 0.0254 2.9010 40.2600 1.5300 7.4600 118.3400 115.0000 23.0800 1.4300 42.0700 12.2700 117.4000 N/A

4.3510 2.7180 3.2500 3.0490 4.6710 2.4760 3.2500 5.6050 4.8940 3.3170 59.6600 61.1000 55.3200 4.8000 0.0204 2.8910 40.0600 1.3300 7.2600 118.1400 114.8000 22.8800 1.2300 41.8700 11.8700 117.2000 N/A

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

123.7700 3.7750 62.2700 66.6000 58.4200 5.3200 0.0280 2.9960 14.6000 43.7500 1.6300 7.9200 124.6600 121.1400 25.5500 1.5600 46.1800 13.8200

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

Gamuda Bhd Buy. Target price: RM5.83

MyNews Bhd Buy. Target price: RM0.77

AMMB Holdings Bhd Buy. Target price: RM6.70

March 27, 2025: RM0.59

March 27, 2025: RM4.32

March 27, 2025: RM5.67

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

AMMB held a pre-closed meeting recently, where the overall tone from management was relatively positive – 4QFY25 net profit should stay resilient on stable NIM and moderating costs. More interestingly we believe was the slight tweak to AMMB’s long-term dividend guidance, which is now based on a (higher) payout percentage vs absolute DPS - implying dividend upside if earnings hold up. Review of Winning Together FY29 Year 1. AMMB is progressing well on its key 5-year financial targets, specifically: i) Gradual reduction in CIR to 40% (FY24: 45%, 9MFY25: 44%), and ii) higher ROA of 1.10% (FY24: 0.99%, 9MFY25: 1.04%). Interestingly, management tweaked its long-term dividend guidance to a payout ratio of 60%, from the previously guided 45 sen absolute DPS in FY29, ie 2x vs FY24 DPS of 22.6 sen but implying a lower 55% payout ratio under an 8% earnings CAGR assumption. As management kept its earnings growth target unchanged, the higher payout ratio now guided leads to a FY29F DPS of 50 sen, or a 9% yield on last close. Overall, while the change means dividends are now tied to earnings performance and presents greater risks, both upside and downside, vs the previous absolute DPS target, the move to bump up the “terminal” payout seems a fair trade off to us. FY25 operating income should expand healthily YoY, driven by stronger NII (NIM uplift from funding cost optimisation), while non-II could come in marginally lower due to an absence of hefty trading gains. CIR and credit costs are likely to show a strong improvement YoY – the former due to the strong income expansion expected, and the latter due to improving delinquency trends. Maintain BUY, with new RM6.70 TP. – RHB Research, March 27

GAMUDA’S 1HFY25 core net profit of MYR417m (+7% YoY) was at 39% and 35% of our and street’s estimates. Results are in line, as we see stronger quarters ahead, supported by higher progress billings of domestic jobs and overseas property projects. We favour GAM’s diverse geographical exposure in addition to the stock being relatively undervalued at FY26F P/E of 15.8x (close to the level it was trading at during the 2017 upcycle) even with its data centre (DC) jobs. Outstanding orderbook was at MYR7.8bn at the time vs MYR36bn now. 2QFY25 construction PAT of MYR137.7m (+13.5% YoY) came from higher earnings contribution from domestic jobs. While the net margin of the construction arm was lower at 4.7% in 2QFY25 (2QFY24: 5%), it was higher than the net margins seen in 4QFY24 and 1QFY25 (4% and 4.6%) due to a higher mix of domestic earnings at 47% in 2QFY25 vs 40% in 2QFY24. Property segment saw a 7% YoY PAT drop in 2QFY25 due to Celadon City’s completion in Vietnam while new Quick Turnaround Projects (QTP) such as The Meadow (GDV: MYR179m; also in Vietnam) are ramping up. Upcoming QTP projects slated for launch in FY26 (Springville and Hai Phong in Vietnam, total GDV: MYR2.7bn) may propel the segment’s growth in addition to the unbilled sales of MYR7.2bn (end-2QFY25) vs MYR6.7bn (end-2QFY24). With an estimated unbilled orderbook of MYR32bn as of end-CY24 and assuming a monthly orderbook burn rate of MYR1bn per month, GAM needs MYR20-25bn worth of new wins in CY25 (MYR5bn has been covered by Penang LRT Segment 1) to hit its outstanding orderbook target of MYR40-45bn by end CY25. We think this is achievable. Keep BUY and RM5.83 TP. – RHB Research, March 27

1QFY25 results missed expectations due to CU’s slower-than expected turnaround. We reaffirm our positive stance on Mynews despite the delay, as CU’s losses continue to narrow while other business units deliver robust performance. The current 17.9x FY25F P/E is attractive compared to its pre-pandemic mean of 22.9x, and we believe the market has yet to fully price in the company’s recovery prospects. Core profit of MYR4m (+128.4% YoY, -11% QoQ) met only 14-15% of our and consensus forecasts. The negative deviation was due to CU’s slower-than-expected turnaround. YoY, 1QFY25 revenue grew 10.4% to MYR215.9m, driven by a higher store count (597 to 632) and stronger in-store sales supported by an improved product mix. GPM expanded 0.5ppts to 37.3% with improved product mix, better wastage control, and a higher contribution from CU’s higher margin business. QoQ, revenue rose 3.6%, supported by increased business volume during year-end festivities and a larger store network. However, core earnings fell 11% QoQ to MYR4m, mainly due to a 0.9ppt GPM contraction from aggressive promotional activities and a higher effective tax rate of 34.7% (vs 18.9% in 4QFY24, which was lower due to tax provision adjustments). CU’s losses continue to narrow and we look forward to its turnaround, though it has been delayed - management initially targeted end-2024 but now expects it to be within the next 12 months. This will be driven by sustainable GPM expansion, supported by strengthened supplier bargaining power from higher procurement volumes as store expansion progresses, alongside ongoing product refinements and improved wastage control. Still BUY, with new RM0.77 TP. – RHB Research, March 27