30/05/2025

FRIDAY | MAY 30, 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

RON95 subsidy delay brings respite to consumers: MIDF KUALA LUMPUR: MIDF Amanah Investment Bank Bhd said the potential delay in RON95 fuel subsidy rationalisation to the second half of 2025 (2H’25) is expected to offer temporary relief to consumers, supporting private consumption amid stable inflation. “While the Finance Ministry targets a 2H25 rollout, we anticipate implementation may be pushed to the fourth quarter of 2025 due to unresolved issues like eligibility and the delivery mechanism,” it said in a note yesterday. The investment bank also said that consumers are unlikely to face any significant price pressure via pass-through mechanisms. However, MIDF said inflationary pressures could emerge later in the year, driven by the potential pickup in price pressure stemming from subsidy reforms and the higher utility costs for businesses. The investment bank also said that the gap between the Producer Price Index, which measures the price changes at the producer level, and the consumer price index (CPI) continues to widen further, with the CPI continuing to grow modestly by 1.4% year-on-year in April 2025. On Wednesday, the Statistics Department Malaysia said April 2025’s PPI contracted by 3.4% y-o-y. It was the second month of decline and the sharpest drop since June 2023. The softer overall price pressure was primarily driven by a sharper, double-digit decline in prices within the mining sector. This was largely due to a significant drop in crude petroleum prices, which exerted considerable downward pressure, while prices for natural gas also declined, albeit at a more moderate pace. – Bernama

Ringgit slips as dollar lifted by US court ruling on tariffs THE ringgit retreated to close lower against the greenback yesterday as the American dollar rallied after a US trade court blocked most of US President Donald Trump’s tariffs on imports into the country. At 6pm, the local note fell to 4.2390/2475 versus the US dollar from Wednesday’s close of 4.2215/2275. The US Court of International Trade on Wednesday ruled that Trump was not authorised to invoke emergency economic powers legislation to impose the sweeping global tariffs announced in April. SPI Asset Management managing partner Stephen Innes said markets welcomed the US court decision against Trump, seeing it as potentially good news for the American economy. “The initial market read is that this could be a net positive for US growth since many had expected the tariffs to weigh on consumption. The sentiment also helped fuel a rally in US equities with Nvidia’s blowout earnings boosting investor confidence, leading more people to take risks, stoking demand for US dollars,”he told Bernama. At the close, the ringgit traded mostly higher against a basket of major currencies. It rose against the Japanese yen to 2.9188/9249 from Wednesday’s close of 2.9271/9315 and gained vis-à-vis the euro to 4.7803/7899 from 4.7838/7906. The local note was traded mixed against its Asean peers. It weakened against the Singapore dollar to 3.2853/2921 from 3.2776/2825 on Wednesday and dropped versus the Indonesian rupiah to 259.9/260.5 from 259.0/259.5 previously. It inched up against the Thai baht to 12.9321/9647 from 2.9355/9614 and was flat vis-à-vis the Philippine peso at 7.60/7.62 from 7.60/7.62.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.3105 2.7820 3.3290 3.1070 4.8530 2.5690 3.3290 5.7990 5.2100 3.5980 60.2100 66.7100 55.5500 5.1300 0.0274 2.9590 43.3500 1.5500 7.8600 119.5200 116.1200 24.8700 1.4800 45.8900 13.7100 118.6700 N/A

4.1765 2.6690 3.2310 3.0240 4.6970 2.4750 3.2310 5.6150 4.9900

4.1665 2.6530 3.2230 3.0120 4.6770 2.4590 3.2230 5.5950 4.9750

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

112.5100 3.3510 57.6700 61.3800 52.7900

112.3100 3.1510 57.6700 61.1800 52.5900

4.8100 0.0248 2.8640

4.6100 0.0198 2.8540

N/A

N/A

39.8700 1.4500 7.4000 113.4600 110.2300 22.4600 1.3600 41.7900 12.1500

39.6700 1.2500 7.2000 113.2600 110.0300 22.2600 1.1600 41.5900 11.7500

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

Magnum Bhd Neutral. Target price: RM1.29

MISC Bhd Buy. Target price: RM9.70

Hong Leong Bank Bhd Buy. Target price: RM24.30

May 29, 2025: RM19.62

May 29, 2025: RM7.52

May 29, 2025: RM1.28

Source: Bloomberg

Source: Bloomberg

Source: Bloomberg

Q1'25’S core profit of RM667.9 million came broadly within our and consensus expectations, accounting for 29% of full-year estimates. A first interim DPS of RM0.08 was declared (Q1’24: RM0.08). Core profit – excluding items such as impairment provisions, loss on modification of a finance lease contract, gain on acquisition of subsidiaries, and a one-off gain from the commencement of a new FPSO lease – increased 32.7% QoQ (+3.2% YoY). This was primarily driven by stronger contributions from the offshore segment following the start-up of Mero 3. Slightly offsetting the YoY gain was the weaker gas performance due to lower earning days from contract expiries, vessel disposals, and lower charter rates. The offshore segment is poised for stronger performance following first oil delivery from Mero 3, which is expected to generate steady long-term cash flows for MISC. For vessel deliveries, the group anticipates four, 12, and three new LNG carriers in FY25, FY26, and FY27. Other deliveries include one FSU in FY25, two Aframaxes in FY27, and two Very Large Ethane Carriers or VLECs in FY28. The term-to-spot ratio is at 82:18 for both the gas and petroleum divisions. Management guided that LNG shipping rates are expected to stay subdued due to vessel oversupply, driven by high newbuild deliveries and delays in LNG liquefaction projects. The petroleum outlook is mixed: VLCC rates are forecasted to slightly outperform mid-sized tankers, supported by stagnant fleet growth and sustained long-haul crude demand from the Americas and Middle East to Asia. Mid-sized tanker rates are expected to ease, in MISCs view, amid increased vessel availability, normalising from

Q1'25 core earnings of RM53m (+124.5% YoY) make up 36% and 33% of our and consensus full-year estimates. We consider the results to be within expectations, given the anticipation of softer quarters ahead following the high jackpot run during the quarter and the seasonally strong Lunar New Year period. A first interim DPS of 2.5 sen (Q1’24: 1.5 sen) was declared and will go ex on 13 Jun, translating to a payout ratio of 68% — which is also within expectations. YoY, Q1'25 sales rose 11% to RM648.9 million, supported by a higher number of draws (Q1'25: 43 vs Q1'24: 42) and stronger sales per draw, driven by a high jackpot run during the Lunar New Year period and in March 2025. Its Q1'25 PBT margin expanded by 5.2ppts YoY to 11%, aided by a lower prize payout ratio (Q1'25: 61.2% vs Q1'24: 67.6%), as Q1'24 was impacted by unfavourable luck. QoQ, Q1'25 revenue rose 22.7%, benefiting from festive seasonality during the Lunar New Year and the aforementioned jackpot run. Consequently, Q1'25 core profit rose 11.4% QoQ to RM53 million, with a similar prize payout ratio (Q1'25: 61.2% vs Q4’24: 61%). Ticket sales for Q2’25 are expected to normalise following the strong Q1'25, which was boosted by the Lunar New Year and high jackpot run. Beyond the immediate term, our channel checks indicate that illegal NFOs continue to pose strong competition, having gained market share during the Covid-19 pandemic and after the suspension of legal operations in the northern states. Management is currently awaiting a decision on its appeal to resume operations there, which would help it regain some lost ground. NEUTRAL with RM1.29 TP. – RHB Research, May 29

HLBK’S core 9M'25 net profit stood at RM3.3 billion, up 4% YoY – this formed 75% and 74% of our and Street full-year estimates. Total income surged 11% YoY driven by NII (+6%) and non-II (+34%), while opex growth of 8% ensured positive JAWs and an easing CIR (39% vs 40% in 9M'24). BAU credit costs remained benign at 1bp (9M'24: net writeback), and as such, PBT from home operations of RM2.9 billion was a strong 9% YoY increase. Associate contributions, however, dipped 7% YoY. All in, 9M'25 core ROE stood at 11.6%, a slight drop from the 12% in 9M'24. In Q3'25, HLBK logged a dilution loss from associates of RM408 million, mostly related to the dilution in HLBK’s stake in Bank of Chengdu to 17.8% from 19.8% following the full conversion of the latter’s convertible bonds in Feb 2025. The dilution loss is non-recurring, and should be positive for sequential associate contributions growth in Q4’25. The dilution loss was mitigated by a reversal of management overlays amounting to RM399 million, leaving the group with a remainder of RM175 million, or c.16% of total provisions. While the LLC has now dropped to 95% (Dec 2024: 139%, March 2024: 154%), management remains comfortable with the provision coverage available – the LLC including collateral value of secured exposures stands at a healthy 165% (Dec 2024: 209%). At the 9M mark, HLBK is on track to achieving most of its FY25 targets. It is trailing its CASA mix target (Q3'25: 30% vs 32% target), though it expects its CASA acquisition to pick up with the launch of its new transaction banking proposition for SMEs soon. BUY with RM24.30 TP. – RHB Research, May 29

the strong levels seen in 2023 and early 2024. BUY with RM9.70 TP. – RHB Research, May 29