29/07/2025

BIZ & FINANCE TUESDAY | JULY 29, 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

MPOB expects palm oil exports to recover in H2’25 NEW DELHI: The Malaysian Palm Oil Board (MPOB) expects palm oil exports to recover in the second half of this year due to stronger festival season demand in key markets. “The demand, particularly from India, is due to the need to replenish stock for the festive season, attractive palm oil pricing and lower import duty on crude vegetable oils,” MPOB director-general Datuk Dr Ahmad Parveez Ghulam Kadir told Bernama. Ahmad Parveez was in New Delhi last week to speak at a conference organised by the Indian Vegetable Oil Producers’ Association (IVPA). In the first half of this year, Malaysian exports of palm oil and palm-based products dipped 7.4% to 11.39 million tonnes compared with the January-June period last year, according to MPOB figures. Palm oil exports were recorded at 6.95 million tonnes during the half-year period, representing a drop of 7.7% over the corresponding period in 2024 as demand weakened in India, China, the European Union, Bangladesh and Egypt. Nonetheless, despite a drop in the overall palm oil exports in the first half of 2025, Malaysia saw a growth in volumes to the Philippines, Iran, Kenya and Nigeria. Ahmad Parveez said that although export tonnage had dropped, Malaysia’s earnings from palm oil and palm products during the January-June 2025 period surged 9.3% to RM53.43 billion compared with the same period last year. The value of palm oil exports was almost RM34 billion. Malaysian palm oil has gained in geographical reach in recent years but the country’s full-year palm oil exports by volume this year are projected to be 5.3% lower than the 16.9 million tonnes recorded in 2024. – Bernama

Ringgit slips against US dollar as BNM lowers GDP projection THE ringgit ended easier against the US dollar yesterday, as traders’ sentiment was affected by Bank Negara Malaysia’s (BNM) gross domestic product (GDP) revision for the year. At 6pm, the local note slid to 4.2275/2345 versus the greenback from last Friday’s close of 4.2195/2245. The central bank has revised Malaysia’s 2025 GDP growth to 4%-4.8% from 4.5%-5.5% previously, and similarly, the inflation rate for 2025 is projected to range between 1.5% and 2.3% from the previous forecast of 2%-3.5%. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the BNM is being pragmatic by adjusting the growth forecast lower, taking into account external risks. At the same time, a lower inflation forecast suggests that the impact from the anticipated RON95 subsidies rationalisation is likely to be manageable. “As such, we foresee this will be positive for the ringgit in the mid- to long-term as fiscal consolidation will continue to take place, resulting in more fiscal space which can be redirected into targeted assistance as well as higher development expenditure. “This Thursday, the government will announce the 13th Malaysia Plan, and we foresee a higher allocation for development expenditure in the next five years to drive the Malaysian economy into high-income status,” he said to Bernama. Meanwhile, he noted that the US Dollar Index (DXY) has strengthened, buoyed by optimism over the upcoming US-China trade talks. “The US Dollar Index was up 0.5% to 98.13 points as news over US tariffs is seen to be dollar-positive,” he said.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.2860 2.8320 3.3440 3.1230 5.0410 2.5870 3.3440 5.7640 5.4220

4.1530 2.7170 3.2460 3.0400 4.8790 2.4930 3.2460 5.5810 5.1910 3.3240 57.6200 63.7200 52.4100 4.7300 0.0246 2.8100 39.8800 1.4400 7.1800 112.7900 109.5900 22.6100 1.3400 42.3400 12.2700 111.8900 N/A

4.1430 2.7010 3.2380 3.0280 4.8590 2.4770 3.2380 5.5610 5.1760

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

117.9900 3.5570 60.1500 69.2400 55.1500 5.0400 0.0271 2.9020 15.6000 43.3400 1.5400 7.6200 118.8100 115.4400 25.0300 1.4600 46.4800 13.8300

111.6900 3.1240 57.6200 63.5200 52.2100

4.5300 0.0196 2.8000

N/A

39.6800 1.2400 6.9800 112.5900 109.3900 22.4100 1.1400 42.1400 11.8700

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

CTOS Digital Bhd Buy. Target price: RM1.16

HE Group Bhd Buy. Target price: RM0.51

AMMB Holdings Bhd Neutral. Target price: RM5.50

JULY 28, 2025: RM0.37

JULY 28, 2025: RM5.12

JULY 28, 2025: RM0.87

Source: Bloomberg, Phillip Capital Research

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

WE are turning more upbeat on HEG’s prospects, underpinned by strong pipelines of data centre (DC) projects and improved visibility on award timelines heading into 2H25. The RM675m tender book is set to expand further as tender activity gains momentum. DC remains a key focus, accounting for 80% of the current tenders, with the remainder spread across semiconductors and medical devices. HEG’s foray into the DC segment began with a RM3m fit-out job recently awarded by a US-based hyperscaler, which we view as a promising start, to help build its credentials and capture larger DC opportunities ahead. The outlook for the medical segment appears encouraging, backed by healthy factory expansion plans slated for 2H25. HEG’s experience working with a US-based medical customer with presence in Batu Kawan, Penang, improves its chances of securing more projects in this fast-growing segment, in our view. We revise our 2025-27E earnings forecasts by -1%/-3%/+1% mainly to account for the timing delays in new contract awards. While the upcoming 2Q25 results are expected to remain soft with core net profit likely to be steady QoQ at RM3m, we encourage investors to look beyond near-term softness. We anticipate a meaningful earnings recovery in 2026E (+34% YoY) . While Malaysia’s semiconductor exports are currently exempt from tariffs, uncertainty over the final decision by the US remains an overhang on the sector. That said, we take comfort that several of HEG’s existing semiconductor MNC clients are ramping up their production activities, with one client planning for expansion in 2H25 to cater to stronger end-market demand. Maintain BUY with a higher TP of RM0.51. – Phillip Capital Research, July 28

AMMB’S Strategy Day event hosted last Friday showcased the group’s steady progress towards its Winning Together 2029 (WT29) aims. While the recent cut to the overnight policy rate (OPR) could put pressure on earnings growth in FY26F, we think the group’s longer-term plans - especially for greater dividend distribution - remain intact. Management reiterated its longer-term targets under the WT29 strategic roadmap - these include an operating income CAGR of 8% supported by loans and deposits CAGRs of 6%, and net profit CAGR of 8%. Ultimately, it aspires to achieve a 40% CIR (FY25: 44.6%) and 1.1% ROA (FY25: 1.02%). The group also reiterated its gradual dividend expansion plan, with a terminal payout ratio target of 60% by FY29. Despite a YoY contraction in its retail CASA mix (21% in FY25 vs 26% in FY24), management is optimistic on its ability to win “sticky” retail CASA moving forward. It has multiple brand partnerships to aid with visibility, and is also set to launch its new employee banking proposition soon, with a focus on gaining payroll CASA from its business banking clients. Elsewhere, business banking loans growth (+12% YoY in FY25) continues to remain strong, partly supported by AMMB’s sub segment specific growth strategies. It is also seeing resilient demand from prospective Chinese clients intending to establish in Malaysia - to capture this business, AMMB has partnered with several Chinese banks in Malaysia to provide payroll, current accounts and balance sheet support to those customers. Stay NEUTRAL, with new RM5.50 TP. – RHB Research, July 28

CTOS Digital’s 1H25 core PATAMI of RM37.1m (-21% YoY) was dragged by slower growth, delay in project recognition, and underperforming investment. Management lowered the multi year internal growth outlook to provide a new baseline guidance. While the plateauing growth trajectory may keep investors at bay, valuation has reverted to a palatable level. We cut our forecasts and TP accordingly but still like its exposure to the recession-proof credit reporting agency sector with strong cash-flow generation. 1H25 core PATAMI only made up 30% of our and 35% of Street’s full-year forecasts, dragged by slower consumption from local key accounts and commercial segments with some delays in new projects. It was further undermined by underperforming investments and increase in various marketing and development costs. GPM dipped to 68% (from 73%), mainly due to the lower margin international business and higher costs from earlier product investments. Bottomline impact was cushioned by stronger associates’ profit, recording 43% growth YoY in 1H25 - thanks to much better performances from Juris Technologies, RAM Holdings and Business Online Public Company. 2Q25 revenue for key accounts was down 2% YoY to RM29.5m, because of high-base from a one-off fee in 2Q24 and slower consumption from local clients, but digital bank volumes accelerated. For the commercial segment, growth in local commercial clients was offset by decline from international clients. The only bright spot stems from the direct-to-consumer space showing a healthy double-digit growth. Keep BUY with lower RM1.16 TP. – RHB Research, July 28