04/11/2025

BIZ & FINANCE TUESDAY | NOV 4, 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

Banking sector records steady loan growth of 5.5% KUALA LUMPUR: The Malaysian banking sector continued to record steady loan growth of 5.5% year-on-year (y-o-y) in September 2025, supported by stronger month-on-month (m-o-m) expansion, according to CIMB Securities Sdn Bhd. The brokerage firm said it observed a discernible positive trend emerging in new business and household loan approvals, particularly in the third quarter of 2025. “Business loans momentum improved to 5.4% y-o-y in September 2025 (from 5.2% y-o-y in August 2025) on a more robust 0.7% m-o-m expansion, driven by larger corporates investment-related loans,” it said in a research note. “Growth in SME loans (accounting for 19% of the banking system loans), continued to exceed industry growth (September 2025: 8.1% y-o-y),” it added. On household loans, CIMB Securities noted the growth slowed slightly to 5.5% y-o-y in September 2025 compared to 5.7% in the preceding month, due to the moderation in the automotive, residential property, personal, and credit card financing segments. The key economic sectors, namely financial and insurance, real estate, utilities, manufacturing, information/communications, and retail, saw robust growth. CIMB Securities added that funding and liquidity conditions within the banking system remain healthy and supportive of growth. “System deposits growth accelerated to 5.2% y-o-y in September 2025 from 4.8% y-o-y in July–August 2025, driven by stronger current account and savings account (CASA) growth of 8.1% y-o-y in September 2025. Corporate deposits also picked up (7.8% y-o-y in September 2025) as Negotiable Instrument of Deposit (NID) placements rose (20.8% y-o-y).”

Ringgit eases vs greenback ahead of key US data THE ringgit closed lower compared to the greenback yesterday on a lack of catalysts for the local note ahead of the release of key US economic data. At 6pm, the ringgit shed to 4.1980/2025 against the US dollar from last Friday’s close of 4.1860/1930. It was reported that the greenback hovered near a three-month high yesterday as investors are waiting for a series of US economic data this week to assess the state of the US economy and see if it might prompt a shift in the Federal Reserve’s hawkish stance. Among them are the S&P Global US Manufacturing and US ISM Manufacturing data which will be released later and the US export and import (month-on-month) data. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid told Bernama the US ISM Manufacturing Index is expected to come in at 49.4 points for October compared with 49.1 points in the previous month. “The index has been below the 50-point demarcation line, which suggests that manufacturers’ sentiments have been cautious ever since US President Donald Trump’s administration announced the Liberation Day tariff measures in early April.” At the closing, the ringgit traded lower against most major currencies. It inched down against the yen to 2.7230/7261 from 2.7162/7210 at last Friday’s close, weakened against the British pound to 5.5099/5158 from 5.5025/5117, but rose versus the euro to 4.8344/8396 from 4.8453/8534 previously. The local note slid against the Singapore dollar to 3.2206/2243 from 3.2185/2241 at last Friday’s close.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.2680 2.8040 3.2730 3.0380 4.9160 2.4460 3.2730 5.6020 5.3270

4.1230 2.6910 3.1710 2.9530 4.7580 2.3560 3.1710 5.4240 5.1030 3.3190 57.7000 62.1000 52.6300 4.5800 0.0240 2.6740 39.7300 1.4300 6.9300 112.1500 109.0000 23.0000 1.3200 42.1100 12.1600 111.2500 N/A

4.1130 2.6750 3.1630 2.9410 4.7380 2.3400 3.1630 5.4040 5.0880

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

117.3200 3.5630 60.2400 67.4800 55.3700 4.8800 0.0265 2.7740 14.9000 43.1800 1.5400 7.3600 118.1400 114.8200 25.4600 1.4400 46.2200 13.7200

111.0500 3.1190 57.7000 61.9000 52.4300

4.3800 0.0190 2.6640

N/A

39.5300 1.2300 6.7300 111.9500 108.8000 22.8000 1.1200 41.9100 11.7600

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

KJTS Group Bhd Buy. Target price: RM2.00

Frontken Corporation Bhd Buy. Target price: RM5.19

Unisem (M) Bhd Neutral. Target price: RM3.78

Nov 3, 2025: RM4.45

Nov 3, 2025: RM3.41

Nov 3, 2025: RM1.48

Source: Bloomberg, RHB Research

Source: Malacca Securities

Source: FactSet, Maybank Investment Bank

UNISEM’S 9M25 core PATAMI of RM26.9m (-35% YoY) was broadly in line, dragged by pre-operating expenses at the new Gopeng plant despite strong topline growth. Management remains confident of sustaining the high revenue into 4Q25 and beyond, supported by robust demand and improving utilisation. 9M25 revenue grew 19% YoY to RM1,391.5m - exceeding expectations - while core profit was broadly in line at 50% of full year forecasts, in view of a stronger 4Q ahead. EBITDA margin dipped to 17% (from 18.9%) due to pre-operating costs and higher headcount, while net margins were impacted by increased depreciation and a higher effective tax rate. A third interim dividend of 2 sen/share (flat YoY) was declared. USD revenue rose for the seventh straight quarter (+5.6% QoQ to US$116.8m), driven by broad-based strength in Chengdu and improving utilisation in Malaysia. Chengdu remains the growth engine, contributing 65% of group revenue. Power management, smartphone, and auto related sectors all continued to show strength along with AI-peripheral related chips. Consequently, core PATAMI jumped 33.5% QoQ and 79% YoY to RM19.6m, reflecting higher demand and leverage from Chengdu, while Malaysian operations remained loss-making due to sub-optimal utilisation rate and manpower costs. Headcount increased slightly to 7,310, with 3Q25 capex easing to RM115.5m (from RM185.6m). Management guided for flattish to higher QoQ revenue in 4Q25 - an impressive feat given seasonal softness - driven by demand for Micro-Electro-Mechanical System (MEMS) microphones, Power Management Integrated Circuits (PMIC) for servers, and EV-related applications. Downgrade to NEUTRAL, new MYR3.78 TP. – RHB Research, Nov 3

KJTS has entered into a supplemental agreement with Pacific Trustees Bhd to include an additional site, KIPMall Desa Coalfields, under its existing service agreement, thereby expanding its coverage from seven to eight KIPMalls. We understand the revised contract entails a total upfront capex of approximately RM22.9m across all eight sites, with a new fixed chilled water fee of RM1.6m per annum, inclusive of a base fee of at least RM426,000 per annum, and a variable component based on actual consumption. The retrofit works commenced in April this year, with completion expected in July next year, after which the O&M and chilled water supply services will extend up to 2046. We think this latest contract award reflects KJTS’s continual effort to strengthen its recurring income base. Notably, the contract was awarded by Pacific Trustees (as trustee for KIP REIT), a client with a strong 97.8% occupancy rate, supported by resilient tenant relationships and a stable base of anchor tenants such as Econsave, Jaya Grocer, Giant, Hwa Thai, and others. From what we gathered, KIP REIT has a net lettable area of approximately 2m sq ft with estimated asset valuations of around RM 1.4bn. That said, we view this maiden engagement as a potential springboard for future contract wins from KIP REIT, given our understanding that AEON Mall Kinta City and TF Value Mart - Hypermarket have yet to utilise KJTS’s offerings, while the latter remains active in asset acquisitions. As this job wins is within our expectation, we maintained the earnings forecast. We maintain BUY recommendation with a target price of RM2.00. – Malacca Securities, Nov 3

EXCLUDING RM12m in one-off losses (mainly FX), 9M25 core profit rose 29% YoY to RM122m, in line with our and consensus expectations at 74% and 70% of full-year forecasts, respectively. Revenue grew 7% YoY to RM451m, supported by stronger performance in TW (+16% YoY), while MY (-9%), SG (-18%) and the PHP (-2%) recorded softer contributions. EBIT margin edged up by 0.7ppts YoY to 34.3%, with reported weakness largely attributable to FX losses in Taiwan. Adjusting for FX, we estimate core profit margins improved meaningfully by 4.5ppts YoY to 27.1%. Post-briefing, we remain confident that Frontken is on track to close 2025 on a firmer footing vs 2024, in line with seasonal trends. Beyond 4Q25, Frontken is optimising its capacity by relocating lines from P1 to P3, creating room for more advanced production lines, targeted for installation by 1H26. Additionally, P2 will also see new line additions by end-2025 to cater for a next-gen tool. Management also flagged potential US-based M&A and JV opportunities to broaden its service capabilities and customer reach, with any of these developments potentially to crystallise in 2026. We believe this could be opportunistic for Frontken’s future growth, enhancing customer stickiness and long-term service visibility. The ongoing capacity optimisation and prospective M&A/JV initiatives enables long-term growth for Frontken. We continue to favour Frontken for its niche exposure to FE semiconductors, margin expansion, and resilient earnings outlook. Maintain BUY and TP at RM5.19. – Maybank Investment Bank, Nov 3