06/08/2025

BIZ & FINANCE WEDNESDAY | AUG 6, 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

Tex Cycle completes buyout of Meridian World KUALA LUMPUR: Tex Cycle Technology (M) Bhd, a waste management and recycling solutions provider, has completed its acquisition of Meridian World Sdn Bhd, a scheduled waste management and chemical recovery solutions provider with the group making full payment of RM42.8 million to the vendors, alongside a RM6.7 million retention sum paid to its solicitors. As Meridian World achieved the profit guarantee with its audited consolidated profit after tax of no less than RM5.3 million for the financial year ended Dec 31, (FY) 2024, the guarantee period shall remain as FY24 and FY25, while the original retention sum of RM12 million has been reduced to RM6.7 million, in accordance with the terms of the share sale agreement. Tex Cycle group CEO Gary Dass Anthony Francis said the completion of this deal is more than a financial transaction as it represents the fusion of two established industry players in Malaysia’s environmental services sector to offer an expanded suite of product and service offerings that would enhance the competitive edge of the enlarged group moving forward. Meridian World managing director Teoh Kok Cheow said, “Joining forces with Tex Cycle opens up a new chapter of growth and opportunity for Meridian World. We’re proud to have met the profit guarantee, and even prouder to now be part of a larger ecosystem that shares our commitment to environmental responsibility. This collaboration enables us to expand our capabilities, reach new markets, and collectively drive greater impact across Malaysia’s waste management and circular economy landscape.” The acquisition is aligned with Tex Cycle’s strategic roadmap to expand both organically and through synergistic acquisitions.

Ringgit ends higher against dollar on Fed rate cut hopes THE ringgit continued to close higher against the US dollar yesterday as expectations of an interest rate cut by the US Federal Reserve (Fed) gained momentum, said an analyst. At 6pm, the local note climbed to 4.2260/2310 against the greenback from Monday’s close of 4.2350/2385. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that risky assets such as equities have been rising as a lower interest environment would be positive for corporate finances, especially on their cost of borrowings. Commenting on the US Fed, the economist noted that a series of Fed speakers are expected to shed more light on the future direction of US interest rates. He noted that several Fed officials, San Francisco Fed President Mary Daly, Boston Fed President Susan Collins, and Fed Governor Lisa Cook, will be speaking to the public on Thursday. “Our sense is that the market would want to hear the latest conviction among the Fed as to how the interest rate would evolve in the months to come, especially in the September Federal Open Market Committee meeting,” he told Bernama. At the close, the ringgit ended firmer against major currencies. It rose against the Japanese yen to 2.8618/8654 from 2.8652/8677 at the close on Monday, gained versus the British pound to 5.6159/6226 from 5.6296/6342, and was higher against the euro to 4.8772/8830 from 4.8978/9018 previously. The ringgit was also strengthened against regional peers. It improved against the Singapore dollar to 3.2793/2834 from 3.2878/2908, inched up versus the Thai baht to 13.0408/0627 from 13.0452/0616, and strengthened against the Indonesian rupiah to 257.8/258.2 from 258.2/258.5.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.3000 2.7970 3.3360 3.1170 4.9800 2.5510 3.3400 5.7180 5.3560 3.5970 60.2500 68.4100 55.3200 4.9800 0.0271 2.9270 42.9800 1.5400 7.6000 119.1200 115.7100 24.8800 1.4700 45.9200 13.9000 118.3500 N/A

4.1600 2.6810 3.2360 3.0300 4.8140 2.4540 3.2320 5.5310 5.1220 3.3470 57.6400 62.8800 52.5100 4.6700 0.0245 2.8310 39.5000 1.4400 7.1500 113.0800 109.8500 22.4500 1.3500 41.7900 12.3100 112.1000 N/A

4.1500 2.6650 3.2280 3.0180 4.7940 2.4380 3.2240 5.5110 5.1070

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

111.9000

3.1470

N/A

62.6800 52.3100 4.4700 0.0195 2.8210 39.3000 1.2400 6.9500 112.8800 109.6500 22.2500 1.1500 41.5900 11.9100 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

Kelington Group Bhd Buy. Target price: RM5.40

Banking Overweight

Telecommunications Neutral

AUG 5, 2025: RM4.43

Source: Bloomberg

Source: TA Research, Bank Negara Malaysia

Source: Bloomberg, RHB

WE see the tepid industry revenue momentum continuing in 2H’25 as telcos maintain the affordable connectivity narrative via tactical campaigns. The pressure on industry ARPUs should stay elevated with rebates offered. Overall, we believe the rise in 5G wholesale charges (on higher 5G traffic) and inflation-led opex pressures should weigh on industry EBITDA despite the good cost restraint exercised by the MNOs. We expect Maxis and CDB to exercise their put options to acquire the Finance Ministry’s (MoF) 41.7% stake in Digital Nasional Bhd (DNB) by year-end. This would mark the government’s full exit from DNB with the three MNOs (including YTL Communications) holding an equal 33.3% each. With a new operating model instituted, a review of the existing 5G wholesale framework is plausible. The MSAP is up for review by end-2025 which could renew concerns again over broadband price competition. However, based on the previous rhetoric and the already competitive broadband pricing landscape, we think adjustments to access prices would be manageable and rates commercially negotiated. Meanwhile, press reports indicated that JP2 is set to begin in September utilising a hybrid approach with 3,000 sites identified nationwide. We see this and the rollout of the second 5G network benefitting towercos and/or infrastructure providers including OCK Group, Reach-Ten Holdings and Redtone International. We like TM for its expanding ROE, under-leveraged balance sheet (net debt/EBITDA of 0.4x)) and potential for higher dividends. CDB is our preferred mobile exposure on stronger commercial execution and integration synergies. – RHB Research, Aug 5

KGB has accepted an LOI for a semiconductor hook-up job in Dresden, Germany. The LOI spells out the agreed unit pricing structure and price adjustment clauses which will remain in effect until 2027. We gather that this is a precursor to a contractual agreement with the European customer (KGB’s existing customer in Malaysia) where similar arrangements were entered into in the past and with work to commence immediately. The contract value for the first phase is at a minimum of €30 million (RM146 million), potentially rising to €50 million over two years and beyond for additional works. We are positive on the development, being KGB’s first European hook-up job and part of the RM2.5 billion European tenderbook (end-May). We note that YTD order wins (including the latest job) have reached RM800 million (Q1’25: RM390 million). As more tender outcomes are expected by end-Q3’25 and Q4’25, total FY25 order replenishments may comfortably surpass the RM1.1bn booked in FY24 and our RM1.26 billion estimate. KGB’s Q2/1H’25 results are due on Aug 21. We expect it to track slightly ahead of our/market expectations with revenue up 20-25% QoQ against a seasonally shorter March quarter. On improving margins, core PATAMI should see double-digit QoQ/YoY expansion to RM30-34 million (Q1’25: RM26.6 million). The advanced engineering segment should remain the key growth driver with stronger billings from China, Singapore, and Malaysia (69% of RM1.43 billion outstanding orderbook at end-March). We see the industrial gas segment posting a 23% FY25-27 revenue CAGR, underpinned by stronger LCO2 customer off-takes and the new on-site gas supply contract for an opto-electronics player in Kedah. BUY with RM5.40 TP. – RHB Research, Aug 5

TOTAL loans and advances expanded at a more moderate pace of 5.1% YoY (+0.7% MoM) in June 2025. By segment, consumer loans rose 5.8% YoY (+0.5% MoM), while business loans grew 4.2% YoY (+0.9% MoM). YTD loans grew by 2.1% (June 2024: +2.5% YTD), supported by a 2.5% (June 2024: +2.7% YTD) and 1.6% (June 2024: +2.3% YTD) increase in consumer and business loans, respectively. Looking ahead, we expect loan momentum to pick up in 2H’25. Consumer loans, which accounts for around 58% of total system loans, should see a lift from improved household sentiment, supported by a resilient labour market, an-accommodative interest rate backdrop, and recent fiscal support measures. These include increased cash assistance allocations, the reduction in RON95 petrol (following the implementation of a targeted fuel subsidy plan), and a freeze on toll hikes at 10 highways. Meanwhile, business and SME loan growth is expected to gradually accelerate, underpinned by improved policy visibility following the recent reduction in the US tariff on Malaysian imports from 25% to 19%. Total loan applications rose modestly by 1.2% YoY in June, though they contracted sharply on a MoM basis (-18.4%). The improvement was largely driven by business loan applications, which expanded 2.9% YoY (-25.9% MoM), helping offset a marginal 0.1% YoY decline in consumer loan applications (-11.2% MoM). By sub-segment, applications for residential property loans and credit cards slipped 1.4% YoY and 0.3% YoY, respectively. In contrast, there were modest gains in HP loans (+2.9% YoY), loans for the purchase of securities (+10.5% YoY), and personal financing (+0.5% YoY), although all posted MoM declines. – TA Research, Aug 5