19/08/2025

BIZ & FINANCE TUESDAY | AUG 19, 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

DNB to get liquidity boost from RM116.7m advances: Kenanga KUALA LUMPUR: The fresh capital injection of RM116.7 million from each of Digital Nasional Bhd’s (DNB) mobile network operator (MNO) shareholders has provided the company with a near-term liquidity boost, said Kenanga Investment Bank Bhd (Kenanga IB). At DNB’s request, each MNO shareholder, namely CelcomDigi Bhd, Maxis Bhd, and YTL Power International Bhd, has provided an additional shareholder advance of RM116.7 million in cash, while still retaining their 19.44 per cent stake in DNB. Including earlier advances of RM233.2 million, each MNO’s cumulative investment now stands at RM350 million. In a note yesterday, Kenanga IB said that the capital injection is expected to ease DNB’s interest burden on the outstanding loan from the Ministry of Finance (MoF). “The shareholder advances are intended to support DNB’s 5G operations, strengthen its financial position, and cover working capital requirements. “No further cash contribution is required from the MoF, which holds a 41.7% stake in DNB, as its portion will be deemed to have been made out of its existing loan of RM450 million. “Accordingly, the outstanding loan balance owed to MoF is reduced to RM199.8 million,” it said. Kenanga IB is “neutral” on this development, as the modest additional advances have a negligible impact on CelcomDigi and Maxis’ balance sheets. “Assuming full funding via internal cash, the effect on leverage is minimal, with estimated net debt and earnings before interest, taxes, depreciation, and amortisation (EBITDA) rising marginally to 2.27 times for CelcomDigi (from 2.25x), and 2.11x for Maxis from (2.08x).” – Bernama

Ringgit ends lower vs greenback ahead of FOMC minutes release THE ringgit closed lower against the US dollar ahead of the release of the Federal Open Market Committee (FOMC) meeting minutes this week. At 6 pm, the local note slid to 4.2200/2240 from last Friday’s close of 4.2085/2155. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said mixed signals from US Federal Reserve officials along with weakening economic data make the call for a rate cut in September look increasingly daunting. “Thus far, the odds for 25-basis point rate cut in September are about 84% based on the federal funds futures contract.” The FOMC minutes meeting will be released on Aug 22. He said the US producer price index (PPI) for July released last week was much higher than expected, with the headline PPI rising 3.3% on an annual basis, the largest increase since February when core PPI increased 3.7%. “So the impression is that inflation risk would limit the odds for a rate cut,” he added. At the close, the ringgit settled mixed against a basket of major currencies. It strengthened versus the Japanese yen to 2.8632/8661 from last Friday’s close of 2.8653/8702. However, it slid against the British pound to 5.7139/7193 from 5.7050/7145 at the end of last week and eased vis-a-vis the euro to 4.9290/9336 from 4.9185/9267. It decreased versus the Singapore dollar to 3.2902/2936 from 3.2820/2877 at last Friday’s close and weakened against the Thai baht to 12.9942/13.0121 from 12.9760/13.0032. The local currency also declined vis-a-vis the Philippine peso to 7.40/7.42 from 7.37/7.39 previously. – Bernama

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.2845 2.8050 3.3380 3.1000 5.0130 2.5500 3.3380 5.8100 5.3410

4.1485 2.6920 3.2340 3.0130 4.8510 2.4560 3.2340 5.6240 5.1130 3.3480 57.4600 63.3600 52.4900 4.6700 0.0248 2.8060 39.6400 1.4400 7.1800 112.7400 109.4900 22.7800 1.3400 42.0700 12.2100 111.7900 N/A

4.1385 2.6760 3.2260 3.0010 4.8310 2.4400 3.2260 5.6040 5.0980

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

117.8900 3.5960 60.0000 68.8600 55.2400 4.9700 0.0274 2.9110 15.3000 43.1000 1.5400 7.6200 118.7600 115.3300 25.2200 1.4600 46.1900 13.7700

111.5900 3.1480 57.4600 63.1600 52.2900

4.4700 0.0198 2.7960

N/A

39.4400 1.2400 6.9800 112.5400 109.2900 22.5800 1.1400 41.8700 11.8100

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

IJM Corp Bhd Buy. Target price: RM3.73

Heineken Malaysia Bhd Buy. Target price: RM30.50

Sentral REIT Buy. Target price: RM0.97

AUG 18, 2025: RM22.96

AUG 18, 2025: RM2.96

AUG 18, 2025: RM0.805

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

SENTRAL REIT has entered into a conditional sale and purchase agreement to dispose of Wisma Sentral Inai for RM135m in cash. We view the disposal as a rerating catalyst for the stock, as it removes a long-vacant, non-income generating asset from its portfolio, and boosts its balance sheet flexibility. We like the REIT for its stable earnings outlook, healthier balance sheet, and wide yield spread following the interest rate cut. SENTRAL hiving off Wisma Sentral Inai to Turiya Properties for RM135m - the transaction will be conducted fully in cash terms. The proceeds are expected to be used to either repay debts or fund yield-accretive acquisitions. Assuming the proceeds (RM132m) are used to pare down borrowings, SENTRAL’s gearing is expected to improve to 41.9%, from 44.6% as at FY24. The disposal is targeted to be completed by 4Q25. Completed in 1994, Wisma Sentral Inai is a 12-storey office building with a mezzanine floor and three split-level basement car parks, offering a total NLA of 233k sq ft. The freehold property sits on a 39.4k sq ft land parcel located along Jalan Tun Razak, Kuala Lumpur - a prime commercial area with excellent accessibility. The property has 310 car park bays, but has been vacant since Jul 2022, and was last valued at RM150m as at FY24. The divestment removes a drag on the portfolio, with the blended occupancy rate expected to improve to 94% (from 85%), while also unlocking capital that can be redeployed into yield accretive assets or used to pare down borrowings and lower financing costs. At RM579 psf on NLA, we view the disposal price as fair vs recent KL office transactions. Keep BUY, new RM0.97 TP. – RHB Research, Aug 18

IJM Corp announced that it has secured a RM1.4bn job involving the proposed construction of a data centre (DC) consisting of a 6 storey DC building with an office, two guard posts, and a waste management facility with a recycling area in Mukim Pulai, Daerah Johor Bahru. This DC job is targeted to be completed within 13 months, by Sep 2026. The latest win - which is IJM’s fourth DC job clinched so far - is also its largest such contract to date. We expect the PBT margin of the job to be 5-8%. The previous three DC jobs it won only had values (based on effective share) below RM500m. Taking into account this latest win, IJM has secured a total of RM2.3bn (based on effective share) worth of DC jobs. Note that all DC jobs won by the conglomerate so far are located in Johor. With the latest DC job win being the second job awarded to IJM in FY26 (Mar), its new job wins for the year now stands at RM2.8bn vs our own FY26F target of RM5bn. As such, its total domestic outstanding orderbook is now at about MYR9.2bn, ie almost matching the level recorded in end-FY18, which was at RM9.4bn. DC jobs now make up around 22% of IJM’s domestic outstanding orderbook, as per our estimate. We understand that IJM has submitted about 4-6 bids for DC jobs across the Klang Valley and Johor. Telekom Malaysia’s DC in Iskandar Puteri (which IJM is constructing) recently had a topping out ceremony in July - indicating that its progress has reached the point of meaningful completion. Therefore, it is now ready to take on more DC jobs, as it continues to work towards finishing earlier ones. Stay BUY, unchanged RM3.73 TP. – RHB Research, Aug 18

HEINEKEN Malaysia’s 1H25 results disappointed, due to its weaker than-expected sales traction. We believe the recent stock selldown is unwarranted and its current valuation is compelling, in view of its resilient earnings and generous dividends - notwithstanding the cautious consumer sentiment and environment of rising costs. Our stock rating is premised on demand stickiness, margin uplift brought about by a premiumised product mix and price increases, as well as the encouraging trend of tourist arrivals YoY, 1H25 revenue eased 4% to RM1.3bn, impacted by: i) The earlier timing of the Lunar New Year in 2025 and ii) cautious consumer sentiment. That said, HEIM’s 1H25 operating margin held steady at 21.1% (-0.1ppt) on continuous efficiency improvements and a price increase in Apr 2024. Consequently, 1H25 net profit decreased by 4% YoY to RM205m. QoQ, while 2Q25 revenue and net profit dipped 29% and 32% - largely a function of a seasonal swing as demand normalised after the festive season. Management declared a 1H25 DPS of 40 sen. We view macroeconomic headwinds and subdued consumer sentiment as the key challenges to the growth in consumption in 2H25. As such, HEIM’s mitigation strategies are expected to revolve around consumer engagement, innovative product launches and disciplined cost management. Meanwhile, the latest round of price increases and a more premiumised product mix should continue to support profit margins, further aided by the trend of easing input costs and favourable FX trends. Other catalysts to highlight include the robust momentum of tourist arrival (5M25: +20%) ahead of Visit Malaysia 2026. Maintain BUY, new TP of RM30.50. – RHB Research, Aug 18