21/05/2025

BIZ & FINANCE WEDNESDAY | MAY 21, 2025

/thesuntelegram FOLLOW / Malaysian Paper

ON TELEGRAM m RAM

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 lower against major currencies, Asean peers THE ringgit retreated against the greenback yesterday despite the weaker US dollar index (DXY) and lower US Treasury yields after the recent downgrade of the credit rating of the US by Moody’s Ratings. At 6pm, the local note eased to 4.2950/3010 versus the greenback from Monday’s close of 4.2870/2945. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the ringgit had climbed to RM4.2873 in the afternoon session from the previous day’s close of RM4.2908 before ending lower. “The gains were likely capped as some traders took profit,” he told Bernama. He noted that the Reserve Bank of Australia (RBA) decided to cut the cash rate by 25 basis points to 3.85% yesterday after it was last reduced in February due to greater uncertainties in the global economic outlook following the tariff shocks of the US. At the close, the ringgit traded mostly lower against a basket of major currencies. It was slightly higher vis-à-vis the euro to 4.8340/8408 from Monday’s 4.8344/8429, but depreciated versus the Japanese yen to 2.9727/9773 from Monday’s 2.9596/9650, and dipped against the British pound to 5.7428/7509 from 5.7420/7521 previously. The local note traded lower against its Asean peers. It went down vis-à-vis the Philippine peso to 7.72/7.73 from 7.69/7.71 on Monday, decreased against the Singapore dollar to 3.3153/3202 from 3.3135/3195 and declined against the Thai baht to 12.9856/13.0116 from 12.9630/9924. It slid against the Indonesian rupiah to 261.6/262.1 from 260.8/261.4.

Airbus adds third helicopter simulator at Subang academy LANGKAWI: Airbus is reinforcing its commitment to aviation safety with the expansion of the Airbus Helicopters Training Academy in Malaysia, and the addition of a third full-flight simulator (FFS) in Subang, Selangor. According to Airbus Helicopters, the expansion—slated to be operational in the second half of 2026—will address rising regional training demands, reinforcing the company’s commitment to customer proximity. Executive vice-president, customer support and services Romain Trapp said this latest investment underscores Airbus Helicopters’ dedication to aviation safety and customer proximity. “By expanding our training capabilities in Malaysia, we are ensuring that pilots and mechanics in Asia Pacific have access to world-class facilities designed to enhance safety and readiness,” he said in a statement in conjunction with the Langkawi International Maritime and Aerospace (Lima) 2025 exhibition. The new H175 simulator – the first of its kind outside Europe – joins existing H225 and AS365 simulators, offering an advanced learning experience with digitised classrooms and virtual trainers. These expanded capabilities will support pilot type rating, recurrent training, and mission training – ensuring operational proficiency for critical flight scenarios. To date, Airbus Helicopters’ simulator centre in Malaysia has provided over 21,000 training hours to 2,600 pilots. With the new H175 FFS, the company is poised to increase its capacity to an additional 2,000 to 3,000 training hours per year and further contribute to the region’s aviation safety. – Bernama Johor Plantations Group Bhd Buy. Target price: RM1.55

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.3670 2.8320 3.3660 3.1230 4.9050 2.5970 3.3660 5.8340 5.2570 3.6670 60.9100 67.3900 56.4000 5.2000 0.0275 3.0070 43.4200 1.5800 7.9500 121.0900 117.6700 25.0100 1.4900 46.4200 13.7300 120.2400 N/A

4.2330 2.7180 3.2670 3.0390 4.7460 2.5020 3.2670 5.6490 5.0330

4.2230 2.7020 3.2590 3.0270 4.7260 2.4860 3.2590 5.6290 5.0180

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

114.0000 3.4150 58.3400 62.0100 53.5900

113.8000 3.2150 61.8100 53.3900 4.6800 0.0199 2.9010 39.7300 1.2800 7.2900 114.7600 111.5000 22.3900 1.1700 42.0700 11.7800 N/A N/A

4.8800 0.0249 2.9110

N/A

39.9300 1.4800 7.4900 114.9600 111.7000 22.5900 1.3700 42.2700 12.1800

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

Taliworks Corporation Bhd Buy. Target price: RM1.01

Ranhill Utilities Bhd Buy. Target price: RM1.37

May 20, 2025: RM1.19

May 20, 2025: RM0.66

May 20, 2025: RM1.24

Source: Bloomberg

Source: Bloomberg

Source: Bloomberg

TALIWORKS Corporation’s Q1’25 core profit of RM10.5 million (- 30% YoY) missed our estimates – making up 12% of our full-year projections. Segmental wise, the water treatment and supply division recorded a 5.4% YoY decrease in EBIT for Q1’25 due to Air Selangor’s rationalisation of balancing water intake in the southern region, resulting in the reallocation of surplus water to the northern region of Selangor. The Grand Saga and Grand Sepadu highways saw growth in average daily traffic for Q1’25 but was offset by the 50% discount offered during the festive period (for Grand Saga) and higher maintenance expenses. Meanwhile, effective operating losses for its waste management associate widened to RM7.7 million in Q1’25 (Q1’24 loss: RM5.6 million), attributable to lower profits recorded by the associate. The construction arm recorded a lower EBIT of RM1 million in Q1’25 (Q1’24: RM0.3 million) driven by better progress for the Sungai Rasau Stage 1’s packages 2 and 3 which reached completion percentages of 24% and 11% as of end-Q1’25 (vs 12% and 6% at end-Q1’24). This was the largest quarterly EBIT recorded over the last five quarters (despite still underperforming our projections). Separately, the EBIT of the renewable energy segment in Q1’25 remained unchanged as the higher revenue was offset by lower sundry income during the quarter. While we still expect the Sungai Rasau project to be completed in CY27, we view annual progress may significantly pick up in the final year of completion. Therefore, we dial down on our progress billings for FY25 and FY26 but increase for FY27. BUY with new RM1.01 TP. – RHB Research, May 20

FOR Q5’25 (or Q1’25), PAT for the water segment dropped by 38% YoY vs Q1’24 due to higher amortisation on service concession assets of RanhillSAJ. Meanwhile, the consultancy and services segment recorded net loss of RM14.1m in Q5’25 vs Q1’24’s PAT of RM24.3 million due to cost overruns of certain projects. The power segment recorded a net loss of RM3.1 million in Q5’25 vs a RM4.1 million PAT in Q1’24 likely due to maintenance costs related to one of its power plants in Sabah, in our view. We envision Johor’s water demand to be strong in the coming years backed by industrial investments namely data centres (especially due to the scrapping of the US artificial intelligence diffusion rules) and also manufacturing plants which could be part of the Johor-Singapore Special Economic Zone. Also, the Ministry of Energy Transition and Water Transformation (PETRA) has agreed to introduce a new water tariff category for data centres at RM5.50 per cu m instead of the standard non-domestic water tariff of RM3.55 per cu m in Johor (for utilisation above 35 cu m). This is on top of the potential nationwide tariff hike which could take effect in July. The other near-term catalyst for RAHH we see is the National Non-Revenue Water Programme to be implemented from 2025 to 2030 with a RM2.5 billion allocation. RAHH may benefit from the aforementioned plan via its subsidiary Ranhill Technologies (under the consultancy and services arm) which has clinched water projects beyond Johor – namely the RM61.5 million job to replace old pipes in Kelantan covering a total length of 103km secured in March 2022. BUY with RM1.37 TP. – RHB Research, May 20

JOHOR Plantations Group’s Q1’25 earnings are in line with our and Street estimates. We expect earnings to slightly weaken QoQ looking ahead, due to moderating ASPs – but this may be offset by improving productivity. Q1’25 core earnings rose 53% YoY (-24% QoQ) to RM70.5 million, accounting for 25% of our and consensus full-year forecasts. The YoY growth was mainly driven by higher CPO ASPs (+22% YoY), offset by weaker FFB output in Q1’25 (-10% YoY). JPG declared a DPS of 1 sen in Q1’25, translating to a payout ratio of 33%. Q1’25 FFB output plunged by 25% QoQ (-10% YoY), mainly due to heavy rainfall in Johor affecting 2,798ha (5% of planted area). In 4M’25, the situation marginally improved, with FFB output growth improving to -8% YoY, below our and management’s guidance of +5% for FY25. Despite this, JPG is keeping its target for FY25, as it anticipates a larger pick-up from May, with peak output in Q3’25. We remain conservative, and trim FFB growth to +3% from +5% for FY25, and adjust our growth estimate to +4-5% for FY26-27 from +5-6%. CPO ASP was RM4,969/tonne in Q1’25 (+3% QoQ, +22% YoY), ie a 5% premium over the Malaysian Palm Oil Board (MPOB) price, while its PK ASP climbed by 65% YoY to RM3,989/tonne (7% premium over the MPOB price). As usual, JPG has not sold forward its output, but secured a premium over the MPOB price for 70% of output in 2025, ieRM130-200/tonne. We keep our CPO ASP

premium forecast of 3% for FY25-27, for now. BUY with RM1.55 TP. – RHB Research, May 20