28/07/2025

BIZ & FINANCE MONDAY | JULY 28, 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

Polymer Link receives Bursa’s approval for ACE Market listing KUALA LUMPUR: Polymer Link Holdings Bhd and its subsidiaries, a regional and international plastic manufacturer specialising in manufacturing plastic powder and colour masterbatch for rotational moulding applications, has received approval-in-principle from Bursa Malaysia Securities Bhd to list on the ACE Market of Bursa. Polymer Link operates through its subsidiaries in Malaysia, the Philippines, India, Australia and the United States, serving a diverse customer base across more than 10 countries. The group operates three manufacturing facilities located in Selangor; Pampanga, Philippines, and Daman, India. This is complemented by overseas sales offices in Australia and the United States to support its diverse customer portfolio in the region. For the financial year ended Sept 30, 2024, the group recorded total revenue of approximately RM145.4 million, mainly contributed by its key markets i.e., the Philippines, India, Australia and Malaysia which accounted for 42.3%, 25.9%, 13.6% and 7.5% respectively, of total revenue. Polymer Link president and group CEO Koh Song Heng said: “With the added credibility and resources that come with being a listed company, we are confident in our ability to accelerate our growth trajectory and further strengthen our presence in the regional market.” Polymer Link’s IPO will involve a public issue of 97,145,700 new ordinary shares, alongside an offer for sale of 24,080,100 existing shares, bringing the total to 121,225,800 ordinary shares, which represents approximately 21.6% of the enlarged share capital of 560,000,070 ordinary shares. Hong Leong Investment Bank Bhd is the principal adviser, sponsor, sole placement agent and sole underwriter for the IPO.

Ringgit likely to trade RM4.22 to RM4.24 against greenback THE ringgit is expected to hover between RM4.22 and RM4.24 this week as the US Federal Reserve is anticipated to maintain its policy rate, said an analyst. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said this outlook is tied to the upcoming Federal Open Market Committee meeting, scheduled for tomorrow and Wednesday. “Based on the interest rate futures market, the Fed is likely to keep the Federal Funds Rate steady at 4.5%. Technical indicators suggest that the US dollar-ringgit exchange rate is currently in a neutral zone,” he told Bernama. Meanwhile, SPI Asset Management managing partner Stephen Innes expects the ringgit to trade within a relatively narrow range of 4.2080–4.2280, with trade-related headlines and external sentiment continuing to drive short-term direction. On a Friday-to-Friday basis, the ringgit ended better against the greenback, closing at 4.2195/2245 versus 4.2410/2455 previously. However, it traded lower against a basket of major currencies. The ringgit depreciated vis-à-vis the Japanese yen to 2.8529/8565 from 2.8517/8549 and declined versus the euro to 4.9507/9566 from 4.9336/9388 at the end of last week. However, it gained against the British pound to 5.6786/6853 from 5.6999/7060 last Friday. The ringgit trended higher against Asean currencies. The local note firmed against the Singapore dollar to 3.2937/2978 from 3.3027/3065, strengthened versus the Thai baht to 13.0268/0478 from 13.3027/3065, rose versus the Indonesian rupiah to 258.5/258.9 from 260.2/260.6 previously, and improved against the Philippine peso to 7.38/7.40 from 7.41/7.43 last Friday.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.2870 2.8370 3.3490 3.1350 5.0380 2.5920 3.3490 5.7920 5.4180

4.1540 2.7230 3.2510 3.0510 4.8770 2.4970 3.2510 5.6080 5.1880 3.3320 57.7500 63.6800 52.4200 4.7300 0.0246 2.8180 39.9300 1.4300 7.2100 112.8200 109.6200 22.7500 1.3400 42.1900 12.3000 111.9100 N/A

4.1440 2.7070 3.2430 3.0390 4.8570 2.4810 3.2430 5.5880 5.1730

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

118.0200 3.5770 60.2800 69.1900 55.1600 5.0400 0.0272 2.9110 15.6000 43.4100 1.5300 7.6500 118.8400 115.4700 25.1900 1.4600 46.3200 13.8700

111.7100 3.1320 57.7500 63.4800 52.2200

4.5300 0.0196 2.8080

N/A

39.7300 1.2300 7.0100 112.6200 109.4200 22.5500 1.1400 41.9900 11.9000

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

Eco-Shop Marketing Bhd Buy. Target price: RM1.51

Nestle (M) Bhd Buy. Target price: RM95

Texchem Resources Bhd Buy. Target price: RM1.37

JULY 25, 2025: RM85.50

JULY 25, 2025: RM0.725

JULY 25, 2025: RM1.31

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

NESTLE’S 1H25 results are above expectations as we expect its recovery to pick up ahead, spurred by margin expansion. This, together with the demand normalisation stemming from improving sentiment on its brands, leads us to believe that its prospects may have turned the corner. We think its comeback is timely in view of the pick-up in investor appetite for defensive stocks amidst uncertain market conditions. NESZ’s 1H25 core net profit of RM284m (-5% YoY) comprises 54-60% of our and Street full-year forecasts due to strong sales traction. YoY, 1H25 revenue grew 4% to RM3.4bn, driven by robust export sales and a gradual domestic market recovery. We take comfort from the return of topline growth and believe it is sustainable, premised on NESZ’s effective marketing engagements to stimulate consumer spending and the normalising sentiment on Nestle brands. On top of that, the fall in key commodity prices including that of coffee, cocoa, wheat and sugar should propel a margin recovery as early as 2H25, further aided by a stronger MYR. Meanwhile, consumption of staple food products should remain resilient, underpinned by wage growth and continuous fiscal support extended to the lower income groups. This, together with the group’s quality product offering and entrenched distribution channels, will provide earnings visibility - notwithstanding the challenging business environment and uncertain economic outlook. Upgrade to BUY from Neutral, TP rises to RM95 from RM77. – RHB Research, July 25

1H25 results came in below expectations, mainly on weaker performances in the industrial and food segments. We still anticipate earnings to improve in 2H, underpinned by ongoing volume recovery, contributions from new business initiatives, and seasonally stronger demand - all of which should support operating leverage. Texchem Resources’ current 6x P/E valuation appears undemanding, and has yet to reflect its recovery prospects. 1H25 core earnings came in at RM4.3m vs 1H24’s -RM0.4m, meeting 26% of our full-year forecast. The shortfall was mainly on softer-than-expected performances in the industrial and food divisions. Note: We adjusted for unrealised FX losses of RM2.2m to derive our core earnings. YoY, 1H25 revenue dipped 0.6% to RM566.8m, mainly on weaker performances in the industrial segment (-6.9%) from price dumping by China, and the food division (-11.1%) amid softer global fishmeal prices. That said, 1H25 EBITDA margins expanded 1.7ppts to 8.5%, supported by stronger contributions from polymer engineering and the improving-margin restaurant division. QoQ, 2Q25 revenue rose 0.7% to RM284.4m, driven by continued recovery in polymer engineering (+5.1%) and seasonally stronger sales in the restaurant segment (+6.8%). However, 2Q25 core profit fell 7.9% QoQ to RM2.1m, mainly dragged by challenging operating conditions in Myanmar, which affected the food division. We revise down our FY25F-27F earnings by 14%, 5%, and 5% after lowering margin assumptions for industrial and food segments. Keep BUY, new RM1.37 TP. – RHB Research, July 25

THE nascent dollar store industry will continue to prosper as penetration rates pick up to meet rising demand. This retail model offers a comprehensive range of value-for-money products that appeal to increasingly cost-conscious consumers amidst rising living costs. As the dominant market leader, Eco-Shop Marketing is aiming to capture untapped market opportunities, focusing on outlet expansion, driving robust SSSG, developing house brands, and continuously refining operational efficiency metrics. According to Frost and Sullivan, the dollar store industry will grow at a 2024E-2029F CAGR of 14%, outpacing the 6% of overall store-based retail sales. This suggests a switch in consumer preference towards the dollar store format given the inflationary environment, thanks to the affordability advantage of the flat-price model. In addition, the relatively faster income growth within the lower-income groups ie the bulk of the customers has also accelerated the shift. ECOSHOP’s expansion plans entail the opening of at least 70 net new stores pa. The mushrooming store network will allow the group to capitalise on the rapid industry growth and the resultant growing operational scale will raise the barrier of entry, thereby fortifying its market position. Consequently, its entrenched fundamentals in insourced distribution capabilities, differentiated merchandising strategies and crowd-pulling house brands will be further enhanced to drive sustainable profitability through improving operating leverage whilst maintaining the ultra-affordable price points. Initiating coverage with a BUY and RM1.51 TP. – RHB Research, July 25