05/11/2025

BIZ & FINANCE WEDNESDAY | NOV 5, 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

HLIB: Firmer palm prices to lift planters’ earnings

Ringgit rebounds as weak US data hits greenback THE ringgit rebounded to close higher yesterday as weaker US economic data and uncertainty over the US Federal Reserve’s (Fed) next monetary policy move weighed on the greenback. At 6pm, the ringgit climbed to 4.1950/1985 against the US dollar from Monday’s close of 4.1980/2025. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US ISM Manufacturing Index, which fell to 48.7 points in October from 49.1 in September, offered a glimpse into the US economy.“The index has remained below the 50-point demarcation line since March this year, and this suggests that the US tariff has resulted in higher input costs, leading to weak sentiments among the manufacturers,” he told Bernama. Mohd Afzanizam also noted that views on a rate cut in December remain divided among Fed members, as some believe interest rates should be kept steady to contain the risk of higher inflation. At the close, the ringgit traded mostly higher against most major currencies. It rose against the British pound to 5.4795/4841 from 5.5099/5158 at Monday’s close, and climbed versus the euro to 4.8238/8279 from 4.8344/8396. However, the local note down against the yen to 2.7331/7355 from 2.7230/7261 previously. The local note also traded mostly higher against Asean currencies. It strengthened against the Singapore dollar to 3.2131/2160 from 3.2206/2243 at Monday’s close, advanced vis-a-vis the Thai baht to 12.8859/9026 from 12.9285/9483, and was slightly higher against the Indonesian rupiah at 251.0/251.4 from 251.7/252.1 on Monday. The ringgit went down against the Philippine peso to 7.16/7.18 from 7.14/7.15 previously.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

KUALA LUMPUR: Higher palm product prices and seasonally stronger fresh fruit bunch (FFB) output are expected to lift most planters’ upstream earnings in the upcoming results season starting Nov 5, particularly on a quarter-on-quarter basis, said Hong Leong Investment Bank (HLIB). The investment bank said six of the seven planters under its coverage recorded positive quarter-on-quarter output growth in the third quarter of 2025 (Q3’25), supported by the seasonal uptick in cropping patterns. “Broadly higher FFB output, firmer palm product prices, and stable production costs are expected to drive sequential improvement in upstream earnings among planters,” HLIB said in a sector update note. However, it noted that downstream performance is likely to remain subdued in Q3’25 due to persistent competition and refinery overcapacity in Indonesia, which continue to pressure refining margins. Elevated feedstock costs and weak demand in the oleochemical sub-segment are also weighing on performance. Five of the seven planters under HLIB’s coverage registered modestly higher FFB output in Q3’25. HLIB said broadly stronger FFB output and palm product prices — particularly palm kernel — along with lower crude palm oil (CPO) production costs stemming from reduced fertiliser prices, though partly offset by Malaysia’s higher minimum wage since February 2025, would likely lift upstream earnings in Q3’25. The bank maintained its 2025 and 2026 CPO price assumptions at RM4,300 and RM4,200 per metric tonne, respectively, and kept its “overweight” stance on the plantation sector. – Bernama

1 US Dollar

4.2780 2.8050 3.2700 3.0340 4.9190 2.4410 3.2700 5.6090 5.3110 3.5600 60.3500 67.5400 55.5000 4.8900 0.0265 2.7760 43.2400 1.5500 7.3800 118.3600 115.0400 25.5300 1.4400 46.3600 13.7100 117.6000 N/A

4.1290 2.6900 3.1650 2.9480 4.7560 2.3490 3.1650 5.4250 5.0800 3.3310 57.7500 62.0900 52.7000 4.5900 0.0240 2.6740 39.7500 1.4300 6.9300 112.3600 109.2100 23.0500 1.3200 42.1900 12.1500 111.4100 N/A

4.1190 2.6740 3.1570 2.9360 4.7360 2.3330 3.1570 5.4050 5.0650

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

111.2100

3.1310

N/A

61.8900 52.5000 4.3900 0.0190 2.6640 39.5500 1.2300 6.7300 112.1600 109.0100 22.8500 1.1200 41.9900 11.7500 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

Teo Seng Capital Bhd Neutral. Target price: RM1.05

Techbond Group Bhd Buy. Target price: RM0.42

S P Setia Bhd Neutral. Target price: RM0.93

Nov 4, 2025: RM0.315

Nov 4, 2025: RM0.815

Nov 4, 2025: RM1.12

Source: PublicInvest Research

Source: PublicInvest Research

Source: Bloomberg

SP SETIA (SPSB) is disposing 275 acres of land in Semenyih, Selangor for RM273.5 million or about RM22.80 psf to Mah Sing Group Bhd. To recap, Mah Sing earlier purchased a 500-acre land adjacent to the said land which completed in 2024 from SPSB. We are positive with the land sale as it would raise capital that could be used for investment into strategic projects developments as well as debt repayment. We understand that the proposed disposal will not have any material effect on the earnings per share, net assets per share, save for the group realising an estimated gain on disposal of RM34.5 million upon completion, which is expected in 2H’26. We understand that the land is located approximately 16km and 43km due south-east of town centre of Kajang and city centre of Kuala Lumpur, respectively. The land is within the southern corridor of the Klang Valley, accessible via the Kajang-Seremban Highway. Currently, the land is surrounded by residential and commercial schemes comprising mainly of terraced houses, semi detached houses, bungalows, shop offices, apartments/ condominiums/ service apartments. Group to sell the remaining Glengowrie land for RM273.5 million. The Glengowrie land, which measures about 805 acres as a whole, was purchased back in 2016 from Sime Darby Bhd for RM429 million or about RM12.23 psf. SP Setia sold the first tranche of land back in 2024 for about RM18 psf and the latest transaction is pricing it at about RM22.80 psf. While earnings impact is minimal (at about RM34.5 million only), we perceive the move positively as it is in line with the group’s direction to optimise and rebalance its land bank which would enhance the group’s cash flow and balance sheet. Neutral with RM0.93 TP. – PublicInvest Research, Nov 4

TEO SENG Capital Bhd (Teo Seng) is one of the largest egg producers in Malaysia, having the capacity to produce 4.5 million eggs/day. With an ample experience for over 40 years in the industry, the group has developed into a fully integrated layer farming business, supported by complementary divisions to ensure its quality. Teo Seng’s earnings recorded an impressive 4-year compound annual growth rate (CAGR) of 157% for FY20-24, mainly due to improved operational efficiencies and government grants. Looking ahead, while we expect earnings for FY25-26F to decline by an average of 20% due to the absence of government subsidy, we take comfort in Teo Seng’s ongoing initiatives to enhance operational efficiency, which should help to mitigate the impact of subsidy removal. Additionally, we foresee rising egg demand, on the back of steady population growth in Malaysia and Singapore. Teo Seng recorded a strong 4-year CAGR core net profit growth of 157% in FY20-24, driven by increase in egg production volume from 4m/day to 4.5m/day and lower imported feed cost due to ringgit appreciation. Teo Seng’s earnings was further fuelled by government subsidy where the group received RM91 million in FY24. We project Teo Seng’s earnings to contract by an average of 20% over FY25-26, mainly to reflect the impact of the government’s complete removal of egg subsidies effective Aug 1. Nonetheless, we anticipate a 5% YoY earnings recovery in FY27, driven by stronger egg demand and margin expansion from ongoing operational efficiency. Neutral with RM1.05 TP. – PublicInvest Research, Nov 4

THE value of the Asia-Pacific adhesives and sealants market is estimated to expand at a decent 6% CAGR over 2025-2030 to US$42.9 billion – fuelled by rapid urbanisation, rising consumerism and e-commerce, and the robust production of electronic items. We believe TB is well-positioned to ride on this favourable outlook, leveraging on its integrated production facilities, strong R&D capabilities and expanding market reach. While the impact of the US tariffs remains uncertain, TB sees a potential tailwind in the re shoring of US furniture production, which should fuel demand for adhesives – and could lead to production shifting to Asean countries like Malaysia. TB’s 2023 acquisition of MAC – a leading player in industrial adhesives – is earnings-accretive and has significantly strengthened its market position, elevating it into a 1-stop adhesive solutions provider. We see operational and product rationalisation at MAC contributing to stronger revenue and profitability ahead, facilitated by cross-selling opportunities and access to new markets. A key competitive advantage for TB lies in its polymerisation plant in Vietnam, which offers upstream access to new markets in addition to meeting the group’s raw input needs. With integrated production, TB maintains strict quality control and formulation, driving efficiency and customer loyalty. We forecast a FY26-28 core earnings CAGR of 11.2%, driven by: i) Double-digit growth of the adhesives segment, off a low FY25 base and from the on-boarding of new customers/distributors; and ii) the ongoing restructuring at MAC, with greater opex efficiencies extracted alongside an improved product portfolio. Buy with RM0.42 TP. – RHB Research, Nov 4