23/06/2025

BIZ & FINANCE MONDAY | JUNE 23, 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

Minimum impact on auto sector from SST expansion: CIMB KUALA LUMPUR: CIMB Securities Sdn Bhd has projected the upcoming Sales and Service Tax (SST) expansion in July to have a limited direct impact on the automotive sector. In a research note, it said vehicle sales are already subject to a 10% sales tax, while maintenance and repair services incur an 8.0% service tax. “That said, there may be a slight increase in dealership and showroom rental costs due to the measure, although we believe the impact will be minimal. “Indirectly, however, weaker consumer sentiment could weigh on new vehicle sales in the second half of 2025 (2H 2025),” it said. The Malaysian Automotive Association (MAA) has reportedly projected a 4.5% year-on-year (y-o-y) decline in total industry volume (TIV) to 780,000 units in 2025, attributing this to demand normalisation and a reduced industry order backlog. CIMB Securities has, however, forecasted a sharper 7.0% y-o-y decline in TIV to 760,000 units, due to potential headwinds from the planned removal of the RON95 petrol subsidy in 2H 2025. “Despite this, we expect demand in the sub-RM100,000 segment to remain resilient, supported by national brands and selective entry-level Japanese models. “We project national brands to retain a dominant 64.5% market share in 2025, with non-national marques accounting for the remaining 35.5%,” it said. CIMB Securities also believed the removal of fuel subsidies could accelerate battery electric vehicle (BEV) adoption. BEV sales nearly doubled y-o-y in 1Q 2025 to 5,394 units from 2,703 units a year ago, with combined BEV and hybrid penetration rising 1.9 percentage points y-o-y to 7.3% – Bernama

Ringgit set to stay defensive amid Middle East conflict THE ringgit is expected to stay defensive within a tight range this week as traders and investors will continue to observe the military conflict in the Middle East, said an analyst. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid told Bernama the Israel-Iran war continues to take centre stage. “Apart from that, personal consumption expenditure inflation data for May 2025 will also be released (this week). On that note, the ringgit could stay within a range of RM4.24 to RM4.25.” For the week just ended, the ringgit gave up its earlier gains at the beginning as escalating geopolitical concerns spurred demand for the safe-haven US dollar. However, the market showed a slight sign of recovery at the end of the week. The ringgit ended the week easier against the greenback, closing at 4.2505/2565 on Friday from 4.2435/2480 a week earlier. The local note traded mostly higher against a basket of major currencies. It rose vis-à-vis the Japanese yen to 2.9245/9289 from 2.9448/9482 at Friday’s close, went up against the British pound to 5.7356/7437 from 5.7482/7543 previously, but depreciated versus the euro to 4.9000/9069 from 4.8906/8958 at the end of last week. The ringgit traded mostly higher against Asean currencies. The local note declined against the Singapore dollar to 3.3088/3140 on Friday from 3.3077/3118 in the previous week, advanced versus the Indonesian rupiah to 259.2/259.7 from 260.2/260.6 previously, and strengthened versus the Thai baht to 12.9727/9969 from 13.0807/1018. Meanwhile, the ringgit rose against the Philippine peso at 7.43/7.45 compared to 7.55/7.56 previously.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.3140 2.8120 3.3540 3.1450 4.9700 2.5970 3.3540 5.8200 5.3160

4.1790 2.6980 3.2550 3.0600 4.8080 2.5010 3.2550 5.6340 5.0880

4.1690 2.6820 3.2470 3.0480 4.7880 2.4850 3.2470 5.6140 5.0730

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

118.7700 3.5980 60.3800 68.3000 55.5100 5.0500 0.0272 2.9730 15.0700 44.1500 1.5500 7.6500 119.5700 116.1500 24.8000 1.4700 46.2200 13.7600

112.5800 3.3500 57.8200 62.8300 52.7300

112.3800 3.1500 62.6300 52.5300 4.5400 0.0196 2.8670 40.4000 1.2500 6.9900 113.3100 110.0600 22.2000 1.1500 41.8700 11.8000 N/A N/A

4.7400 0.0246 2.8770

N/A

40.6000 1.4500 7.1900 113.5100 110.2600 22.4000 1.3500 42.0700 12.2000

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

Binastra Corporation Bhd Buy. Target price: RM2.64

Malakoff Corporation Bhd Neutral. Target price: RM0.82

Time dotCom Bhd Neutral. Target price: RM5.10

June 20, 2025: RM5.21

June 20, 2025: RM0.79

June 20, 2025: RM1.88

Source: Bloomberg, RHB Research

Source: PublicInvest Research

Source: Bloomberg, RHB Research

AT its inaugural Investor Day, Time dotCom outlined its longer term aspirations and strategic roadmap, with the focus on maximising returns and asset yields. The expanding addressable market for fibre broadband (FBB) should still see subs growth outpacing peers. Structural shifts in the wholesale and enterprise units indicate a balanced risk-reward stock profile, with the strong relative outperformance likely to have priced in upside risks, in our view. Key risks: FBB/retail competition, and weaker-than-expected earnings and margin. TDC articulated its longer-term business roadmap (technology investment company) with insights on core product segments (retail consumer, wholesale and enterprise). Its focus will be on maximising returns and asset yields via a portfolio approach on traditional and new utility assets. Efficient deployment of capital remains key to scale up its regional utility business. Specifically, management flagged that the above-industry growth in revenue, EBITDA and PAT is over, with single-digit growth looking to be the new normal. Contributions from adjacent investments (solar and EV charge stations) should not move the needle, but offer bundling opportunities in the longer term. Overall, while we are enthused over the group’s strategic direction and growth narrative (unique position to outpace industry FBB growth), we see the risk-reward profile for the stock as balanced - given the structural shifts in the wholesale and enterprise markets. Management is not ruling out regional terrestrial investments as it aligns with a new InfraCo model. NEUTRAL with DCF-based TP of RM5.10. – RHB Research, June 20

BINASTRA Corporation booked a 1QFY26 core profit of RM25.1m, which meets 19% of our and Street full-year projections. We deem the results as in line, however, as we expect it to chalk stronger numbers in the quarters with more jobs progressing higher along the S-curve. We continue to remain upbeat on the company’s prospects as we project a 3-year (FY25-28) earnings CAGR of 132%, largely in tandem with its anticipated orderbook growth, backed by the expansion of its key clients beyond the Klang Valley. Core profit for 1QFY26 stood at RM25.1m (+39% YoY) underpinned by a higher number of jobs on hand - with 25 active projects and an outstanding orderbook of RM4.1bn as of end April (vs RM1.6bn as of end Apr 2024). Its 1QFY26 core net margin remained robust at 9.8%, albeit lower than 10.1% in 1QFY25, as the company has taken on more data centre (DC) projects with lower net margins ranging between 6% and 7%. BNASTRA has clinched RM977m in new jobs for YTD-FY26 vs our internal job win target of RM4bn (FY25 job replenishment: RM3.1bn). We envisage the remaining RM3bn that BNASTRA needs to secure (to hit the RM4bn new job win target for FY26) to partly come from five mixed development projects awarded by three key clients - EXSIM Development (EXSIM), Maxim Global (MAXIM MK, NR), and Platinum Victory with RM4bn (with RM2bn to likely be dished out this year) worth of construction jobs yet to be awarded based on our estimates. Based on our estimates, there could be another RM500m in potential jobs on the remaining two plots of land at Jalan Kebun Teh. EXSIM also has a few other land parcels in Johor Bahru near New York Hotel and at Jalan Lumba Kuda. Keep BUY and RM2.64 TP. - RHB Research, June 20

MALAKOFF announced that it secured a concession agreement with the government for the design, construct, finance, operate, maintain and closure of a waste-to-energy (WTE) facility in Sungai Udang, Malacca. The project is expected to begin in 2Q 2026, spanning over a 34-year concession period, including 3 years of construction, 30 years of operations, and 1 year for decommissioning. The facility is expected to process up to 1,056 tonnes of municipal solid waste (MSW) per day and generate 22MW of gross renewable energy, increasing Malakoff’s total RE capacity to 195MW. This brings the group incrementally closer to its internal RE target of 1,400MW by 2031. While the announcement is in-line with guidance earlier, this marks another key milestone for Malakoff as its first foray into WTE, leveraging synergies between its expertise in power generation and waste management. Despite the positive development, we make no changes to our earnings forecasts as the commencement of operations falls beyond our current forecast numbers. The WTE Sungai Udang is expected to process up to 1,056 tonnes of MSW per day and generate 22MW of gross renewable energy. The estimated capex stands at RM660m, in line with earlier guidance of RM600-700m. We also understand that the key success factor of the facility lies in the furnace technology provided by Malakoff’s technology partner, Hitachi Zosen Inova. The system is designed to burn domestic waste with a moisture content of 50-60%, a typical MSW profile in Malaysia, effectively eliminating the need for a pre-separation process, which otherwise might pose a risk of mechanical failure for combustion. We maintain our Neutral call and target price of RM0.82. – PublicInvest Research, June 20