16/05/2025

FRIDAY | MAY 16, 2025

20

BIZ & FINANCE

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 slightly higher against dollar on mild demand THE ringgit closed marginally higher against the US dollar yesterday, buoyed by mild demand, as traders remained cautious while monitoring ongoing economic developments. At 6pm, the local note appreciated to 4.2795/2870 versus the greenback from Tuesday’s close of 4.2840/2910. SPI Asset Management managing partner Stephen Innes said the ringgit remained largely in neutral territory. “Meanwhile, broader regional sentiment appears to favour stronger Asian currencies (although) the local market has yet to show a clear direction,” he told Bernama. He noted that the Korean won saw a sharp rally, driven by speculation that a stronger won — and by extension, a weaker US dollar — may be linked to ongoing US-South Korea trade discussions. “Although there has been no official confirmation, market participants are increasingly speculating that the US may be quietly allowing its currency to weaken against Asian currencies,“ he said. At the close, the ringgit traded higher against a basket of major currencies. It edged up versus the Japanese yen to 2.9326/9379 from 2.9373/9425 at Wednesday’s close, rose vis-a-vis the euro to 4.7939/8023 from 4.8204/8282 on Wednesday and surged against the British pound to 5.6862/6961 from 5.7191/7285 previously. The local note was traded mixed against its Asean peers. It climbed versus the Singapore dollar to 3.2950/3010 from 3.3045/3104 on Wednesday and firmed against the Thai baht to 12.8198/8488 from12.8920/9208.

Tex Cycle’s Q1 revenue rises 11% year-on-year to RM8.89m KUALA LUMPUR: Tex Cycle Technology (M) Bhd, a waste management and recycling solutions provider, posted revenue of RM8.89 million for the first quarter ended March 31, 2025 (FY25), an 11.18% increase from the RM7.99 million posted in Q1’24. One-time gains from the sale of investment property significantly boosted the previous year’s performance. Net profit showed a 68.09% decline to RM2.1 million from RM6.6 million in the same quarter of FY24. On a quarter-on-quarter basis, revenue declined slightly by 4.5% from RM9.3 million in Q4’24, mainly due to softer demand in the recovery and recycling business. Profit before tax (PBT) correspondingly decreased by 43.1% from RM4.5 million to RM2.6 million, due to lower fair value gains on quoted securities during the quarter. Shareholders approved all resolutions at the company’s recent 21st annual general meeting and an extraordinary general meeting (EGM), including the re-election of directors, the appointment of auditors, the renewal of share issuance authority, and the share buy-back mandate. Notably, shareholders also unanimously approved the acquisition of Meridian World Sdn Bhd for RM55 million during the EGM. To recap, Meridian World is an established player in the scheduled waste management industry, offering comprehensive solutions ranging from waste collection, transportation, recovery, and treatment to wastewater management. As Tex Cycle progresses into the remainder of FY25, the group remains optimistic about its strategic direction, particularly with the government’s heightened enforcement of scheduled waste compliance and the push for renewable energy adoption.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.3590 2.8210 3.3520 3.1160 4.8830 2.5840 3.3520 5.7920 5.2210

4.2250 2.7070 3.2530 3.0320 4.7250 2.4880 3.2530 5.6080 4.9990 3.4090 58.2800 61.7300 53.6200 4.8700 0.0247 2.8890 39.6100 1.4700 7.4700 114.7300 111.4900 22.3800 1.3800 42.0200 12.0900 113.7900 N/A

4.2150 2.6910 3.2450 3.0200 4.7050 2.4720 3.2450 5.5880 4.9840 3.2090 58.2800 61.5300 53.4200 4.6700 0.0197 2.8790 39.4100 1.2700 7.2700 114.5300 111.2900 22.1800 1.1800 41.8200 11.6900 113.5900 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

120.0000 3.6600 60.8500 67.0800 56.4300 5.1900 0.0272 2.9840 15.5000 43.0700 1.5700 7.9300 120.8600 117.4500 24.7800 1.5000 46.1500 13.6300

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

Sunway REIT Buy. Target price: RM2.13

Technology Overweight

MN Holdings Bhd Buy. Target price: RM1.68

May 15, 2025: RM2.00

May 15, 2025: RM1.33

Source: PublicInvest Research

Source: Bloomberg

THE Framework for Artificial Intelligence Diffusion, which was issued in January under the administration of former President Joe Biden, created three broad tiers of access for countries seeking AI chips. The policy faces backlash from the US allies and technology companies due to the complication in executing the rules, and it also strained the ties with key partners by labeling them as second-tier. Under the revised AI Diffusion Rule, there will be likely three main focuses on the radar. Firstly, the Trump administration restricts the use of Huawei’s Ascend AI chips and aims to confine its reach within China. It also plans to issue guidance warning against US chips being used to train China’s AI learning models. In this case, Nvidia chip exports are likely to be more transparent in reporting and suggest that features like location tags or kill switches could be on the way. Lastly, the revised AI Diffusion Rule will also incorporate new guidance for US companies on safeguarding their supply chains, particularly against the risks posed by transshipment tactics used to circumvent export controls. Overall, the Trump administration appears to favour less stringent regulatory measures that do not impede AI chip exports. We view this development positively, as it would provide a significant boost for foreign technology companies planning to establish large-scale data centres in Malaysia—many of which would have otherwise exceeded the limits imposed by the AI diffusion rules. Other beneficiaries include i) contractors, ii) power cable suppliers, iii) GPU assemblers and dealers, and iv) mechanical and engineering players. – PublicInvest Research, May 15

Q1’25 core profit of RM98.6 million (-1% QoQ, +13% YoY) was in line with expectations at 25% of our and Street’s estimates. The YoY growth was mainly led by the newly acquired properties (namely the six Sunway REIT Hypermarkets, Sunway 163 Mall, and Sunway Kluang Mall), alongside stronger performance from Sunway Pyramid and Sunway Carnival Mall. This helped to offset slower performance in both the hospitality and office segments. NPI margin remained stable at 72% (Q1’24: 73%). Following the acquisitions, interest expense grew 13% YoY, but declined 7% QoQ with a lower average cost of debt attributed to a lower Malaysia Government Securities yield (52% of borrowings on floating rate). Excluding the newly acquired properties, the retail segment’s revenue grew 13% YoY in Q1’25 thanks to the asset enhancement initiatives (AEI) on Sunway Pyramid and Sunway Carnival Mall and higher occupancy rates. The hospitality segment recorded a slow quarter, with revenue dropping 16% YoY, primarily due to lower demand from Meetings, Incentives, Conferences and Exhibitions during Ramadan, with management sharing that bookings in Q2’25 so far have improved. The office segment recorded 4% lower revenue YoY due to a loss of key tenants in Sunway Putra Tower in Q2’24. Sunway Carnival Mall’s AEI has been completed in May, with full reopening of the newly renovated area expected within the next month – which should drive higher rental rates for the mall. We also think there is more room for organic growth from Sunway Pyramid with the full-year impact of the Oasis precinct, which was only opened in Nov 2024. BUY with RM2.13 TP. – RHB Research, May 15

Source: Bloomberg

MN Holdings (MN) has secured a RM37.9 million design, engineering, procurement, construction, installation, testing, and commissioning (EPCC) contract for the transmission line of a waste-to-energy (WTE) interconnection facility. MN will act as the subcontractor to Customer A, a civil engineering and electrical provider, who will serve as the main contractor for the project. The work is expected to commence in May 2025 with completion targeted by March 2027. The transmission lines are scheduled to be back-energized by TNB in May 2027. This latest contract win raises MN’s outstanding orderbook to RM1.2 billion (equivalent to 4.8x FY24 revenue cover ratio), providing strong revenue visibility until FY27. Inclusive of this win, MN secured RM1.1 billion in new contracts year-to-date. Assuming a 7% PAT margin, we estimate this contract will contribute RM3 million PAT across the project period, representing 2% of our FY26–27 earnings forecast. More importantly, securing this project allows MN to establish its presence in the sustainable energy space, potentially opening up future opportunities as the government targets the development of 18 WTE plants across Peninsular Malaysia over the next 10 years to address the long-term shortage of landfill sites. Elsewhere, the tender pipeline remains strong at RM1.4 billion across various sectors, including TNB/Sarawak Energy (40%), DC (39%), solar (11%), water and sewerage (2%), and others (8%). BUY with RM1.68 TP. – Phillip Capital Research, May 15