10/06/2025

BIZ & FINANCE TUESDAY | JUNE 10, 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

Six PKNS entrepreneurs break into Japanese market SHAH ALAM: Six entrepreneurs under the guidance of the Selangor State Development Corporation (PKNS) have made history as their products officially break into the Japanese market through its Export Acceleration Programme (EAP). In collaboration with SME Corporation Malaysia (SME Corp), the products will be showcased at Expo 2025 Osaka and sold in major Japanese retail chains such as Don Quijote, as well as through hotels, restaurants and catering channels. PKNS Group CEO Datuk Mahmud Abbas said the achievement marks a collective milestone by the corporation, SME Corp and local entrepreneurs in advancing the export agenda of Bumiputera products to premium markets like Japan. “Today’s success is the culmination of an export journey that began in 2024, made possible through a strategic partnership between PKNS and SME Corp under the EAP framework. “This programme is specifically designed to provide intensive support to 30 high-potential entrepreneurs identified through the Market Acceleration for Export & Retail Product initiative,” he said during the EAP 2025 entrepreneur product flag-off ceremony at Galeria SA Sentral yesterday. Mahmud said the entrepreneurs received comprehensive guidance covering certification, product enhancement and tailored marketing strategies to enter the Japanese market, known for its stringent standards and discerning consumers. Out of 30 shortlisted firms, six successfully passed a series of evaluations and met all requirements, earning them access to retail chains, specialty stores and other commercial platforms across Japan. Mahmud added that all six entrepreneurs are currently in Japan for Expo 2025 Osaka, which runs from May 14 to Oct 13. – Bernama

Ringgit flat against greenback ahead of US-China talks T HE ringgit traded in a narrow range against the US dollar yesterday amid cautious sentiment in the currency market ahead of US-China trade talks set to take place later, said an analyst. At 6pm, the local note made a small retreat to 4.2290/2345 against the greenback compared to Friday’s close of 4.2270/2360. Market participants were awaiting the outcome of the trade negotiation between the two economic superpowers, said the analyst. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that China’s exports fell to 4.8% in May from 8.1% in the previous month, with exports to the United States contracting 34.5% in May from a contraction of 21%. “This suggests that the tariff shocks have taken a toll on bilateral (trade) between the United States and China,” he told Bernama. Meanwhile, Mohd Afzanizam said Bank Negara Malaysia’s FX reserves continued to expand, climbing to US$119.6 billion at the end of May from US$119.1 billion in the middle of May. “This suggests that the flow of funds on the ringgit has been constructive and may have supported the ringgit,” he added. At the close, the ringgit eased against the Japanese yen to 2.9344/2.9384 from Friday’s 2.9324/9390, depreciated versus the British pound to 5.7392/7466 from 5.7212/7334 and fell vis-à-vis the euro to 4.8316/8379 from 4.8268/8371. It fell versus the Singapore dollar to 3.2908/2953 from 3.2862/2934 but gained against the Thai baht to 12.9414/9642 from 12.9599/9947 on Friday. The domestic unit advanced vis-à-vis the Philippine peso to 7.57/7.59 from 7.58/7.60 but was almost flat against the Indonesian rupiah at 259.5/260.0 from 259.5/260.2 previously.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.3105 2.8160 3.3410 3.1430 4.9170 2.6030 3.3410 5.8380 5.2770 3.5980 60.3300 67.5700 55.4800 5.1100 0.0274 2.9800 43.7600 1.5500 7.8400 119.5300 116.1300 25.0900 1.4800 46.0900 13.7400 118.6600 N/A

4.1765 2.7020 3.2420 3.0580 4.7580 2.5070 3.2420 5.6520 5.0540 3.3510 57.7700 62.1800 52.7200 4.7900 0.0248 2.8840 40.2300 1.4600 7.3800 113.4700 110.2400 22.6600 1.3600 41.9800 12.1800 112.5000 N/A

4.1665 2.6860 3.2340 3.0460 4.7380 2.4910 3.2340 5.6320 5.0390

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

112.3000

3.1510

N/A

61.9800 52.5200 4.5900 0.0198 2.8740 40.0300 1.2600 7.1800 113.2700 110.0400 22.4600 1.1600 41.7800 11.7800 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

SKP Resources Bhd Outperform. Target price: RM1.35

Plantations Neutral

AME Elite Bhd Buy. Target price: RM2.00

June 9, 2025: RM1.60

June 9, 2025: RM1.03

Source: Phillip Capital Research

Source: Bloomberg, Phillip Capital Research

Source: PublicInvest Research

DURING a recent briefing, management highlighted its intention to continue expanding customer base to improve JB Site 5’s occupancy rate and reduce its high dependency on a key customer, which currently accounts for over 70% of group sales. Following the US tariff adjustment announcement, the group has received more inquiries, as customers plan to reroute production to mitigate the risks of trade sanctions. In short, we expect healthy growth for FY26F, driven by the full-year earnings contribution from two new customers. Excluding the JB Site 5, which accounts for 50% of total capacity, the group’s utilisation rate stood at approximately 75% based on Plants 1-4. The two new customers contributed about RM11m in sales during the final quarter of FY25. To accommodate increasing orders from the US-based customer, the group has added 100 headcounts and plans to recruit an additional 16 foreign workers. JB Site 5, a new three-storey plant, with a total floor space of 650,000 sq ft, is currently operating at an occupancy rate of just 20%. The first floor, designated for the two new customers, is only 20-30% occupied. As it has ramped up to the mass production stage, we expect margins and sales volume to improve significantly in the upcoming quarters. The recent US tariff adjustment has had a muted impact, based on the latest sales forecast from the group’s key customer. The group’s exposure to the US market stands at approximately 20%, followed by 16% in China. Notably, SKP implements a cost pass through mechanism with its key client, with pricing reviewed monthly. This has not only limits exposure to fluctuations in currency, raw material, and labour costs but also safeguards profit margins. Keep Outperform with RM1.35 TP. – PublicInvest Research, June 9

WE initiate on the Malaysian plantation sector with a Neutral rating, with average CPO price forecasts of RM4,100/MT for 2025E and RM4,000/MT for 2026E Overall aggregate sector is forecast to grow by 9.2% YoY in 2025, before facing a 3.4% YoY earnings contraction in 2026E due to weaker palm product prices in 2H25 and persistent structural challenges For sector exposure, our large-cap pick is SDG (TP: RM5.21) for its diversified landbank, strong upstream contribution, and strategic diversification into the non-food downstream segment. We like SPLB (TP: RM2.88) as a small-cap pick backed by a relatively young age estate profile and decent dividend yield. Malaysia’s plantation sector grapples with persistent structural challenges that undermine its long-term competitiveness. Key issues include declining productivity, an ageing tree profile, and limited land expansion opportunities. Between 2019 and 2024, total planted area contracted by 1.7%, restricted by the government’s 6.5m hectare(ha) cap and lagging replanting efforts. Some areas have also been redirected for other agricultural uses or development. Against this backdrop, CPO output will remain at 19.4m tonnes in 2025. While near-term prices remain resilient, palm oil’s historical cost advantage is narrowing due to rising production costs and reduced discount to soybean oil. Exports are projected to grow at a modest 0.9% YoY to 17.1m tonnes in 2025, supported by restocking in 2H25 and broader market diversification into emerging markets. However, increased competition from soft oils and a recovering global supply may cap upside. – Phillip Capital Research, June 9

AME Elite’s Northern TechValley registered RM56m sales in 4QFY25, lifting the group’s overall FY25 sales to RM641m (+126% YoY). Early demand was largely supported by local players from the consumer-related sector. Management anticipates sales momentum to strengthen further once infrastructure work commences in 2HCY25. AME remains focused in growing its GDV pipeline, with the pending acquisition of the land in Ijok (RM1.2 1.3bn estimated GDV) with KLK expected to complete in 2HCY25. Despite the stellar FY25 sales, AME is targeting a more conservative RM400m sales for FY26, reflecting the lingering uncertainties surrounding trade policies and tariffs that could influence the pace of foreign direct investment decisions. AME is expected to recognise earnings from the RM210m land sale to DC Hyperspace in 1HFY26, pending final payment from the client by Aug25. The client has reaffirmed its commitment to complete the transaction, having paid RM35m deposit and interest. AME is expected to record RM85m gain from this deal. In FY25, management has replenished RM114m (-6.6% YoY) worth of new construction contracts, bringing outstanding construction order book to RM114m (-37.8% YoY). Looking ahead, management aims to grow its order book to RM200m in FY26 with an active tender book of RM0.8-1bn. We anticipate AME to capture additional demand as it continues to benefit from growing industrial property needs in key FDI hubs such as Johor and Penang. Key risks to our BUY call include uncertainties surrounding US tariffs that could dampen property demand. Maintain BUY with unchanged 12-month TP of RM2.00. – Phillip Capital Research, June 9