09/09/2025

BIZ & FINANCE TUESDAY | SEPT 9, 2025

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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

Telecom industry’s ARPU slips in second quarter: CIMB KUALA LUMPUR: The telecommunications industry’s average revenue per user (ARPU) eased 0.8% quarter-on-quarter (q-o-q) in the second quarter of 2025 (2Q 2025) with the possibility to decline further in the second half of the year (2H 2025), according to CIMB Securities Sdn Bhd. In a research note yesterday, the firm attributed the decline to bundled discounts and promotional rebates offered by service providers to acquire and retain customers. “We think ARPU may be more stable thereafter because most subscribers would have re-contracted on the new offers introduced since 2H 2023, following the implementation of the mandatory standard on access pricing on March 1, 2023,” it said. CIMB Securities noted that most telcos reported earnings broadly in line with expectations, with Maxis Bhd beating forecasts, while CelcomDigi Bhd (CDB) underperformed. Maxis’ mobile revenue market share (RMS) rose 0.3 percentage points to 42.7%, while CDB’s fell by the same margin to 57.3%, it said. “Fixed services revenue fared worse than mobile in 2025, down 2.5% year-on-year (y-o-y) solely due to Telekom Malaysia Bhd (TM). “Fibre broadband competition stayed tight,” CIMB Securities said. On earnings, it said Maxis posted a q-o-q 7% rise in core earnings per share (EPS) helped by higher device-related income and lower effective tax rates. CDB’s core EPS slipped 2% q-o-q while TM’s fell 4.5% due to a lower one-off income and higher depreciation. The research house maintained its “Overweight” rating on the telecommunications sector. – Bernama

Ringgit firmer vs greenback on weak US jobs data THE ringgit closed higher against the US dollar yesterday as the greenback weakened following a disappointing United States labour market report released last Friday. At 6 pm, the local note appreciated to 4.2165/2205 from last Thursday’s close of 4.2260/2320. The market was closed on Friday for the Maulidur Rasul holiday. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the weaker-than-expected US Nonfarm Payrolls (NFP) report for August has strengthened the case for an interest rate cut when the Federal Open Market Committee (FOMC) reconvenes next week. “For now, the Fed officials are in a blackout period, during which they are not allowed to share their views with the public a week before the FOMC meeting. “Hence, traders and investors are left with only a few data points to digest, namely the Producer Price Index (PPI) and Consumer Price Index (CPI),” he told Bernama. At the close, the ringgit was lower against a basket of major currencies. It depreciated against the euro to 4.9430/9477 from 4.9203/9273, slipped versus the yen to 2.8536/8565 from 2.8489/8531, and shed against the pound to 5.6956/7011 from 5.6793/6874 last week. Against Asean currencies, the ringgit was also lower. It dropped against the Singapore dollar to 3.2831/2865 from 3.2775/2824, eased against the baht to 13.2299/2491 from 13.0666/0908, lower versus the rupiah at 258.5/258.8 from 257.3/257.7 and slipped against the peso to 7.43/7.44 from 7.40/7.42 previously.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.2875 2.8270 3.3350 3.0960 5.0240 2.5370 3.3350 5.7910 5.4040 3.5930 60.4400 68.9800 55.5400 4.9400 0.0271 2.9030 43.8500 1.5400 7.6500 118.8500 115.4400 25.2300 1.4600 47.0700 13.9800 117.9900 N/A

4.1525 2.7130 3.2320 3.0110 4.8630 2.4440 3.2320 5.6090 5.1740 3.3460 57.8900 63.4900 52.7900 4.6400 0.0245 2.7980 40.3500 1.4400 7.2100 112.8300 109.5900 22.7900 1.3400 42.8800 12.3900 111.9000 N/A

4.1425 2.6970 3.2240 2.9990 4.8430 2.4280 3.2240 5.5890 5.1590

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

111.7000 3.1460 57.8900 63.2900 52.5900

4.4400 0.0195 2.7880

N/A

40.1500 1.2400 7.0100 112.6300 109.3900 22.5900 1.1400 42.6800 11.9900

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

BM Greentech Bhd Buy. Target price: RM2.58

Axis REIT Buy. Target price: RM2.23

D&O Green Technologies Bhd Neutral. Target price: RM1.27

Sept 8, 2025: RM1.34

Sept 8, 2025: RM1.55

Sept 8, 2025: RM2.03

Source: PublicInvest Research

Source: Bloomberg, RHB Research

Source: Bloomberg, Phillip Capital Research

AXIS REIT has announced its second acquisition in 2025 - an industrial facility in Bandar Sultan Suleiman, Port Klang. We continue to view the counter as a solid proxy to the resilient industrial property sector, supported by steady inorganic growth and strong execution capabilities. Additionally, its healthy balance sheet and the currently favourable interest rate environment should provide ample room for further yield-accretive acquisitions. The REIT is acquiring the property from Barry Callebaut Malaysia for a total cash consideration of RM50m, which will be fully funded via bank borrowings. This will raise AXRB’s gearing from 32.7% (2Q25) to 33.6%, which is still comfortably below the 50% threshold, with an estimated debt headroom of RM853m post-acquisition. The acquisition is expected to be completed by 1Q26. Built between 1993 and 1998, the asset comprises a single storey detached factory with annexed offices, a standalone office/canteen block, and a single-storey detached warehouse with offices, with a combined GFA of 240.6k sq ft. The property sits on a 9.0-acre leasehold site (lease expires in 2104), located in Kawasan Industri Bandar Sultan Suleiman. The area benefits from being located at a close distance to North Port and having connectivity to major highways. The property is currently vacant, with tenants to be identified. We are mildly positive on the acquisition, as it is relatively small in scale (c.1% of AXRB’s total assets). The purchase price of RM50m is in line with the independent valuation of RM50.3m. Based on prevailing rental benchmarks in Port Klang (c.RM1.50 psf/month), the asset could deliver a gross yield of 7% once leased. Maintain BUY and RM2.23 TP. – RHB Research, Sept 8

DURING the analyst briefing last week, management noted signs of recovery in the company’s outlook, supported by i) rising demand for SmartRGB, SpicePlus 2520 (RCL) & SpicePlus 3014 (infotainment), and headlamp (Nagajo) products, ii) early signs of recovery in global auto sales after two years of contraction, and iii) increasing design wins in the interior lighting segment. Notably, management projects a 70% growth in smart RGB LED sales in FY26, potentially contributing more than 10% of the group’s revenue. Production loading is expected to rise from 74% in 2QFY25 to 81% in 3QFY25, before reaching 85% in 4QFY25. Smart LED sales are expected to recover in 2HFY25, before accelerating sharply in FY26 by 70% growth, driven by strong orders from two automakers in Germany and South Korea. A new order was also secured from another South Korean automaker. D&O remains the market leader in the smart LED space given its technological edge. In addition, the group recently secured a panoramic roof ambient-lighting project from a leading German automaker, which requires 100 smart RGB LEDs per roof. To reduce its heavy dependency on its German IC-chip supplier, the group has initiated its own IC chip development under an open-protocol collaboration with Osram. The IC chip design has been patented and is scheduled to be released in 4Q 2026. The new IC chip will not only help the company expand its smart LED products in the China’s market at a more competitive price but also minimise the risk of being subject to the government scrutiny, as it can adopt multiple IC designs suitable for local foundry production. Neutral, with RM1.27 tP. – PublicInvest Research, Sept 8

BMG has made its entry into the high-growth data centre sector with its inaugural river water treatment project at DayOne DC in Kempas Tech Park, Johor. This project demonstrates both feasibility and the group’s capability to deliver differentiated solutions as DC accelerate their transition toward more sustainable practices The growing demand for water-intensive cooling systems has heightened the need for alternative water sources, with a typical 100MW facility consuming 4-6m litres per day (MLD) of water. Global hyperscalers, including Amazon, Microsoft, Google, and Bridge, have begun to adopt such initiatives as part of their expanding ESG commitments, setting a precedent for broader adoption. Against this backdrop, BMG’s early-mover advantage positions it well to capture opportunities from Johor’s sizeable 5GW DC pipeline. While the water treatment segment contribution to FY25 revenue mix remain small at 11% (1QFY26: 9%), the new DC venture could emerge as a significant growth catalyst, with individual project sizes guided to be at RM15-20m. BMG is actively engaging with prospective DC operators on several proposals; if secured, could see the water treatment segment emerging as another structural growth vertical for the group. We gather the expiry of the NEM scheme has dampened residential solar demand, with the investment payback period doubling to 6-7 years. That said, BMG’s broad and established C&I client base provides a ready market for the group to expand into integrated solar and battery energy storage system (BESS) solutions. Maintain BUY with lower TP of RM2.58. – Phillip Capital Research, Sept 8