3/09/2025

BIZ & FINANCE WEDNESDAY | SEP 3, 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

‘O&G, energy remain vital amid green energy transition’ KUALA LUMPUR: Although green transitions are accelerating worldwide, the oil and gas (O&G) and energy sectors have continued to play a vital role, said Informa Markets Malaysia Sdn Bhd chairman Tan Sri Rahman Abdul Mamat. Citing the International Energy Agency, he said Southeast Asia is on course to account for a quarter of global energy demand growth between now and 2035, and by mid-century, the region’s energy demand will overtake that of the European Union. “This is where growth is happening; this is where solutions must scale; and the Oil and Gas Asia 2025 (OGA 2025) is where those conversations and decisions accelerate,“ he said in his welcome remarks at OGA 2025 yesterday. OGA 2025, Southeast Asia’s premier energy business platform, opened its 21st edition yesterday, attracting industry leaders, companies and professionals eager to capture new opportunities in the region’s fast-growing energy landscape. Held from Sept 2-4 at the Kuala Lumpur Convention Centre, the event encompasses the theme “Powering Progress, Shaping Tomorrow” as the region seeks to strengthen economic integration with energy as a key cornerstone under Malaysia’s chairmanship of Asean this year. In a statement, Informa Markets Malaysia said this year’s exhibition spans 20,000 sqm featuring more than 2,000 brands and companies from 72 countries, including eight international pavilions representing the UK, China, Singapore, South Korea, India, Italy, Germany, and the US. “Last year, OGA attracted more than 36,000 trade visitors from 72 countries, generating an estimated US$52 million (RM220 million) in potential business,“ it said. – Bernama

Ringgit ends lower ahead of Bank Negara’s MPC meeing THE ringgit ended on a low note yesterday as market sentiments remained cautious, with traders bracing for Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) meeting on Thursday to gauge the latest economic assessments. At 6pm, the local note eased to 4.2270/2350 against the US dollar compared with last Friday’s close of 4.2230/2275. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid told Bernama that many market participants view BNM’s preemptive Overnight Policy Rate (OPR) cut in July as sufficient, with the central bank seen as comfortable keeping rates at the current level. He said market sentiment was also guarded ahead of the US Federal Open Market Committee (FOMC) meeting on Sept 16-17, as the odds of a 25-basis-point cut remain elevated. “The US dollar-ringgit pair was seen oscillating between RM4.22 and RM4.23. Compared with Friday’s closing, the ringgit depreciated 0.1 per cent to RM4.2295,” he said. Meanwhile, he said regional currencies were mixed, with local factors largely driving market sentiment. At the close, the ringgit settled mostly higher against a basket of major currencies. It strengthened against the Japanese yen to 2.8451/8507 from 2.8708/8741 last Friday, rose against the British pound to 5.6638/6745 from 5.6833/6894 last week and advanced against the euro to 4.9194/9287 from 4.9291/9343 previously. At the same time, the local note was mixed against other Asean currencies, rising against the Singapore dollar to 3.2808/2873 from 3.2859/2899 last Friday and firmed against the Philippines’ peso to 7.35/7.37 from 7.39/7.40 previously.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.2915 2.8250 3.3410 3.1180 5.0270 2.5410 3.3410 5.8130 5.3880 3.5990 60.4700 69.0300 55.5800 4.9500 0.0270 2.9200 44.0400 1.5400 7.6000 118.8600 115.4600 25.2400 1.4600 47.0700 13.8700 118.1000 N/A

4.1515 2.7080 3.2340 3.0280 4.8590 2.4460 3.2340 5.6230 5.1560 3.3480 57.8600 63.4600 52.7600 4.6400 0.0244 2.8120 40.4700 1.4400 7.1500 112.8400 109.6100 22.7900 1.3400 42.8400 12.2800 111.8700 N/A

4.1415 2.6920 3.2260 3.0160 4.8390 2.4300 3.2260 5.6030 5.1410

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

111.6700

3.1480

N/A

63.2600 52.5600 4.4400 0.0194 2.8020 40.2700 1.2400 6.9500 112.6400 109.4100 22.5900 1.1400 42.6400 11.8800 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

Sarawak Oil Palms Bhd Buy. Target price: RM5.09

Telekom Malaysia Bhd Buy. Target price: RM7.50

Gamuda Bhd Buy. Target price: RM6.05

Sept 2, 2025: RM3.36

Sept 2, 2025: RM5.60

Sept 2, 2025: RM6.93

Source: Maybank Investment Bank

Source: Maybank Investment Bank

Source: Maybank Investment Bank

UNIFI’S performance remains resilient amid heightened competition. Longer term, we note that TM is conceptually a beneficiary of Malaysia’s data centre boom through its connectivity and data centre offerings. Excluding unrealised forex, TM’s Q2’25 core net profit of RM346 million (-11% YoY, -11% QoQ) brings 1H’25 core net profit to RM734 million (-13% YoY), 43%/44% of our/consens us full-year forecasts respectively. EBIT was in line with our forecast, with the net profit miss attributable to higher-than-expected finance cost (a one-off RM100 million non-cash expense in relation to debt settlement). Q2’25 revenue was 3% lower QoQ (-5% YoY), driven by sequential declines across all customer segments. Internet revenue was marginally lower QoQ as sequential Unifi subscriber growth was offset by slight ARPU erosion. Total cost meanwhile trended lower QoQ on lower direct (in tandem with lower project billings) and manpower (reversal of previous provisions) costs, resulting in Q2’25 EBITDA margin expanding by 2.8ppt QoQ to 41%. FY25 guidance is unchanged, with management expecting revenue to pick up in 2H’25. We assume a 60% dividend payout, which implies 4% yield. Unifi’s performance would continue to be scrutinised given the still elevated competitive intensity. There are several risk factors for our earnings estimates, price target, and rating for TM. Competitive developments, such as price wars would adversely affect monetisation and thus profitability. Regulatory developments pertaining to taxation or product pricing also pose a risk to earnings. BUY with RM7.50 TP. – Maybank Investment Bank, Sept 2

Q2’25 core PATMI of RM93 million (-11% YoY, -20% QoQ) brings 1H’25 core PATMI to RM208 million (+15% YoY) which was 50% of our full-year estimates. Q2’25 core profits would have been even better had it not been for RM10.5 million in bearer plants written off. Q2’25 YoY profits were mainly boosted by slightly better palm oil products ASP (+3% YoY, -9% QoQ), higher PK ASP (+40% YoY, - 4% QoQ), and improving FFB output (+3% YoY, +5% QoQ). We understand fertiliser application caught up in Q2’25 (after a slow start in Q1’25 due to wet weather) with 60% applied vs its full year plan. We estimate its 1H’25 all-in operating cost of production at RM2,231/t (+8% YoY). 1H’25 FFB output of 596,998t (+3% YoY) met 45% of our full year forecast; within historical averages of 40-49%. We are keeping our +5% YoY FFB growth assumption for FY25, anticipating a stronger pick-up in 2H’25 output. As for downstream, we understand it posted a small profit in Q2’25 (without specifics) on weak refining margins while its biodiesel segment continues to provide steady margins fulfilling Sarawak’s biodiesel mandate. For 2H’25, we believe SOP’s refining outlook should be better with higher availability of feedstock (ie seasonal in nature) to refine, boosting refining utilisation factor and margins. We are keeping our earnings forecasts. SOP declared an interim DPS of 4sen for 1H’25 (1H’24: 4sen), representing c.17% dividend payout ratio. We believe SOP is on track to deliver 15sen DPS for FY25 with potential upside considering its growing net cash pile of RM1.26 billion (+20% YoY, +11% QoQ). Adjusted for its net cash, SOP trades at just 4.4x FY25 PER. BUY with RM5.09 TP.– Maybank Investment Bank, Sept 2

GAM has been awarded the construction, completion, testing and commissioning of Hyperscale Data Centres (HDC) in Eco Business Park V, Selangor by ECW. The contract sum is RM2.1 billion and involves construction, completion, testing and commissioning of:- (i) shell and core of 2 data centre blocks; (ii) a consumer substation; (iii) a water reservoir; and (iv) associated infrastructures and ancillary facilities. The project will commence in Q3’25 and be completed by Q3’27. Assuming 8% pre-tax profit margin, this project will accrete RM130 million (2sen/shr) over its duration. With this job win, GAM’s outstanding orderbook now stands at RM40 billion. Within the next 12 months, we expect Pearl Computing to award GAM a contract to carry out MEP works on the HDC. We understand that the contract sum for the MEP works will be similar to that of the core and shell one at RM2.1 billion. Thus, the job wins from these HDC will likely double to RM4.2 billion. Coupled with its Northern Coastal Highway, Limbang job win (RM0.5 billion), GAM has secured RM2.6 billion of job wins in the first month of FY7/26. With the aforementioned potential MEP contract (RM2.1 billion), which we believe is ‘in the bag’, GAM has secured a hypothetical RM4.7 billion of job wins. Given that GAM has another >RM25 billion of “high” confidence potential jobs, our FY26/FY27 job wins assumptions of RM22.5 billion/RM22.5 billion is looking conservative. We value GAM’s engineering and construction operations at 20x FY7/27 PER or 1.5 SD above the 10-year 12M forward PER mean of 15x. In our opinion, GAM deserves this premium valuation due to the possibility of its actual job wins exceeding our estimates. BUY with RM6.05TP. – Maybank Investment Bank, Sept 2