01/07/2025

BIZ & FINANCE TUESDAY | JULY 1, 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

Domestic govt bond yields may edge up as focus turns to US data KUALA LUMPUR: Yields on Malaysian Government Securities (MGS) and Government Investment Issues (GII) fell last week between 0.1 and 7.9 basis points (bps) across the curve. According to Kenanga Investment Bank Bhd, the 10-year MGS eased by 4.6 bps to 3.544%, while the 10-year GII slipped by 3.6 bps to 3.539%. The research firm said initial risk-off sentiment, spurred by US involvement in the Iran–Israel conflict, dissipated following the announcement of a ceasefire. Kenanga noted that the market sentiment was further buoyed by the signing of a free trade agreement with EFTA members – Switzerland, Norway, Iceland, and Liechtenstein –alongside deepening economic ties with Kyrgyzstan and Uzbekistan. Constructive developments in Malaysia-US tariff negotiations and reports of Intel’s planned semiconductor expansion strengthened Malaysia’s appeal as an investment destination, it said. Kenanga said, despite recent gains, local bond yields may rise modestly in the near term amid renewed global trade tensions. “Markets are growing wary of escalating US–EU tariff frictions, Trump’s forthcoming fiscal bill, and the potential reimposition of tariffs in the weeks ahead (July 9). “Investors will closely monitor upcoming US economic data for signs of weakness that could justify rate cuts by the Fed,“ it said. Meanwhile, US Treasury yields (UST) fell across the curve this week, with declines ranging from 5.8 to 16.1 bps. The 10-year yield dropped 10.0 bps to 4.291%, while the 2-year yield fell more sharply by 16.1 bps to 3.781%. Kenanga said the Fed’s proposal to relax capital requirements for large banks may support demand for Treasuries.

Ringgit closes higher against major currencies, Asean peers KUALA LUMPUR: The ringgit closed higher against the US dollar yesterday, buoyed by improved regional sentiment. At 6pm, the local note rose to 4.2060/2130 versus the greenback from last week’s close of 4.2300/2355. SPI Asset Management managing partner Stephen Innes said improving trade sentiment, spurred by the United States-China framework deal and ongoing negotiations with key Asian partners, has helped reduce risk premiums across the region. “This has prompted renewed investor interest in emerging markets such as Malaysia,” he told Bernama. Innes noted that with US inflation easing, expectations are rising for more aggressive rate cuts, particularly if a new Federal Reserve chair under the Donald Trump administration adopts a more dovish stance. “This could place further pressure on the US dollar, and the ringgit’s strength today is broadly in line with regional currency movements,” he added. At the close, the ringgit traded higher against a basket of major currencies and its Asean peers. It appreciated against the Japanese yen to 2.9156/9206 from 2.9359/9399, enhanced versus the British pound to 5.7597/7693 from 5.8141/8217, and gained against the euro to 4.9290/9372 from 4.9597/9661 last week. The ringgit also advanced vis-à-vis the Singapore dollar to 3.2986/3034 from 3.3192/3240, escalated against the Thai baht to 12.9356/9627 from 13.0254/0488, strengthened against the Indonesian rupiah to 259.0/259.5 from 260.9/261.4, and rose against the Philippine peso to 7.46/7.48 from 7.47/7.49, previously.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.2940 2.8200 3.3630 3.1300 5.0360 2.6140 3.3630 5.8940 5.4060 3.5810 60.2300 69.1900 55.2500 5.1100 0.0274 2.9720 43.7100 1.5400 7.7000 118.9900 115.6400 25.0000 1.4700 46.6900 13.7500 118.2100 N/A

4.1570 2.7040 3.2620 3.0440 4.8700 2.5160 3.2620 5.7010 5.1720 3.3330 57.6400 63.6300 52.4600 4.7900 0.0248 2.8750 40.1700 1.4400 7.2500 112.9600 109.7700 22.5700 1.3500 42.4900 12.1800 111.9900 N/A

4.1470 2.6880 3.2540 3.0320 4.8500 2.5000 3.2540 5.6810 5.1570

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

111.7900 3.1330 63.4300 52.2600 4.5900 0.0198 2.8650 39.9700 1.2400 7.0500 112.7600 109.5700 22.3700 1.1500 42.2900 11.7800 N/A 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

Top Glove Corporation Bhd Neutral. Target price: RM0.78

Eco World International Bhd Buy. Target price: RM0.41

Gamuda Bhd Buy. Target price: RM5.64

June 30, 2025: RM0.71

June 30, 2025: RM0.32

June 30, 2025: RM4.79

Source: Bloomberg, RHB Research

Source: PublicInvest Research

Source: Maybank IBG Research

9MFY25 (Jul) core net profit of RM663m (+6% YoY) made up 68% and 64% of our and Street’s estimates but we deem it to be in line amid a better 4QFY25 supported by higher progress billings of domestic jobs. While GAM is trading at 19x FY26F P/E - a premium to the Bursa Malaysia Construction Index (average 10-year mean P/E of 14x) - we believe there is room for valuations to be higher, backed not just for its data centre (DC) capabilities but also for its involvement in renewable energy (RE) projects in Australia. GAM’s 3QFY25 construction PAT of RM174.5m (+40% YoY) came from higher earnings contribution from domestic jobs. The net margin for the construction arm stood at 6.6% in 3QFY25 vs 4.9% in 3QFY24 due to a higher mix of domestic earnings at 23% in 3QFY25 vs 13% in 3QFY24. The property segment saw a 35% YoY drop in PAT for 3QFY25 due to Celadon City’s completion in Vietnam plus the absence of lumpy earnings from OLA Residences in Singapore in 3QFY24. While 9MFY25 property sales was at RM2.6bn (52% of FY25F’s target), the fourth quarter tends to be the strongest (4QFY24 alone contributed 54% of FY24 full-year property sales), especially with over RM2bn in GDV of launches focused on mid-market and affordable segments in 4QFY25. With an unbilled orderbook of RM34.6bn as of end-Apr 2025 and an assumed burn rate of RM1bn per month, GAM needs RM13-18bn worth of new wins between now and Dec 2025 to hit its outstanding orderbook target of RM40-45bn by end-CY25. We view this to be achievable. Keep BUY with RM5.64 TP. – RHB Research, June 30

TOP Glove reported a net profit of RM34.7m in 3QFY25, down 31.4% YoY from RM50.7m in 3QFY24, primarily due to lower ASPs. After stripping out non-operating items, 3QFY25 core net profit stood at RM2.3m, turnaround from a core net loss of RM53.5m in 3QFY24. The results came in below both our and consensus estimates. The discrepancy in our forecasts was mainly due to the lower-than expected sales volume. We revise our FY25-26F earnings forecasts downward by 27% and 21% respectively, to reflect lower sales volume following a higher-than-expected frontloaded orders by US customers prior to tariff hike and weaker ASPs. Top Glove’s revenue declined 6% QoQ to RM830.3m in 3QFY25, mainly attributed to a 5% drop in blended ASPs to USD19/1k pcs, and nitrile glove ASPs falling by 6% QoQ. The decline in ASPs was largely driven by intensified pricing competition from China manufacturers. Nevertheless, sales volume increased modestly at 4% QoQ in 3QFY25. Meanwhile, the Group’s utilisation rate increased to 61% in 3QFY25 (2QFY25: 58%). Top Glove posted a net profit of RM34.7m in 3QFY25, declined 31% YoY from RM50.7m in 3QFY24. Excluding non-operating items, core net profit stood at RM2.3m, up from a RM53.5m core net loss in 3QFY24. The improvement was supported by a moderation in raw material costs, with natural rubber lates prices dropping 9% QoQ and nitrile latex prices declined by 4% QoQ. Looking ahead, we remain cautious on the operating landscape, weighed down by persistent pricing pressure and a sluggish demand recovery. Neutral with RM0.78 TP. – PublicInvest Research, June 30

2QFY25 core net loss of RM1.4m was lower-than-expected. Sales wise, ECWI secured RM98m in sales in 7MFY25 from the clearance of unsold stocks. We lower our loss projections to reflect reduced admin costs and higher sales assumption in FY25E. ECWI is expected to remain in the red until new projects are launched. Potential collaborations with JLG in Sedenak and Sydney serve as strong re-rating catalysts for ECWI. No dividend was declared during the quarter. With its planned expansion into the Malaysia property market, ECWI may revise its dividend commitment (i.e., 10 sen for FY25-26E). As of May 2025, ECWI has total completed stocks available for sale worth RM168m, of which 60% are commercial units and the remainder residential. We lower our FY25/26/27E loss projections by - 60%/-50%/-47%, factoring in lower admin expenses and higher sales assumption of RM178m (+24%) for FY25E. As at Apr 2025, ECWI had a net cash position of RM203.5m (or 8.5sen/sh). The proposed termination of the collaboration agreement between ECWI and Eco World Development was completed on 24 June 2025, following shareholder approvals from both companies. Shareholders of ECWI also approved the company’s name change to ‘EWI Capital Bhd. The name change will take effect once the Companies Commission of Malaysia issues the Notice of Registration of New Name under Section 28 of the Companies Act 2016. BUY. Our TP remains intact at RM0.41. – Maybank IBG Research, June 30