30/09/2024

BIZ & FINANCE MONDAY | SEP 30, 2024 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

Equalbase, DSV break ground on RM220m facility in Penang KUALA LUMPUR: Equalbase, headquartered in Singapore and specialising in the development and management of modern, sustainable industrial logistics assets, recently held an official groundbreaking ceremony for the RM220 million Valdor II in Penang. The multistorey warehouse, with a gross floor area of 620,000 sq ft, is scheduled for completion in 2025. DSV, a global logistics leader, has been confirmed as the anchor tenant of Valdor II. Equalbase Development CEO Nicholas Bischoff said, “We are excited to expand our footprint in Penang with the launch of our Valdor II project. This is another step forward in our journey to become the leading provider of carbon-neutral industrial assets in the region.” Valdor II will incorporate low-carbon construction materials and energy-efficient technologies, targeting to achieve both LEED Gold and GBI Gold certifications for sustainable design. DSV Solutions Malaysia managing director Chin Pee Ching said, “The construction of Valdor II is DSV’s commitment to meet the evolving needs of our customers. In today’s fast-paced world – adaptability, efficiency, and protecting the environment have become increasingly important. This warehouse will not only enhance our operational capabilities but will also enable us to better serve the diverse requirements of our customers across various industries while making a positive impact on the environment.” Northmod managing partner Paul Lee said:“The groundbreaking ceremony of Valdor II was an important day for us as we expand our presence in the region. Our focus on Penang is strategic due to its strong, investor-friendly economy and thriving Global Business Services sector, making it ideal for Valdor II. AEON Credit Service (M) Bhd Buy. Target price: RM8.80

Ringgit rises to 4.12 against dollar, ranking among top currencies THE ringgit soared to 4.12 against the US dollar last Friday, emerging as one of the top-performing currencies globally. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid highlighted that the ringgit had strengthened by 1.6% week-on-week against the US dollar. The local currency surged to 4.1230/1280 from Thursday’s close of 4.1430/1485, marking a year-to-date gain of 11.36%. Mohd Afzanizam noted that the local currency was well supported, particularly during the morning session when the dollar ringgit reached RM4.1175 in early trading. He also said that the ringgit’s appreciation was broad-based, gaining against the euro, British pound, Japanese yen, and Singapore dollar by 1.9%, 1.2%, 1.7%, and 1.2%, respectively, on a week-on-week basis. “The general expectation for interest rate cuts in the US remains intact ahead of the upcoming Federal Open Market Committee meetings in November and December,” he told Bernama. The ringgit traded mostly higher against a basket of major currencies, except for the Japanese yen, weakening to 2.8804/8841 from 2.8634/8674. It rose against the euro to 4.6009/6064 from 4.6157/6218 Thursday and appreciated against the British pound to 5.5178/5245 from 5.5317/5391. The ringgit also traded firmer against Asean currencies. It was higher against the Singapore dollar to 3.2146/2187 from 3.2204/2249 at Thursday’s close and gained against the Philippine peso to 7.35/7.37 from 7.40/7.41. The ringgit improved against the Indonesian rupiah to 272.5/273.0 from 273.1/273.6 and strengthened against the Thai baht to 12.7202/7407 from 12.7242/7489.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD BUYING TT

BUYING OD

1 US Dollar

4.1900 2.8980 3.2570 3.1000 4.6810 2.6560 3.2570 5.6160 4.9760

4.0540 2.7800 3.1610 3.0160 4.5280 2.5570 3.1610 5.4360 4.7620 3.3270 57.5300 59.1800 51.6400 4.7700 0.0258 2.7930 37.4200 1.4400 7.1500 110.1900 107.0700 22.7600 1.3200 38.7700 11.9500 109.2500 N/A

4.0440 2.7640 3.1530 3.0040 4.5080 2.5410 3.1530 5.4160 4.7470

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

115.2900 3.5760 60.1000 64.3600 54.3700 5.0900 0.0286 2.8880 14.3000 40.7000 1.5300 7.6000 116.0700 112.7900 25.2100 1.4300 42.6000 13.4800

109.0500

3.1270

N/A

58.9800 51.4400 4.5700 0.0208 2.7830 37.2200 1.2400 6.9500 109.9900 106.8700 22.5600 1.1200 38.5700 11.5500 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

Mynews Holdings Bhd Buy. Target price: RM0.80

Gamuda Bhd Buy. Target price: RM9.79

Sept 27, 2024: RM0.615

Sept 27, 2024: RM7.05

Sept 27, 2024: RM8.10

Source: RHB Research, Bloomberg

Source: RHB Research, Bloomberg

Q2’25 net profit of RM71.2 million (-38% YoY, -33% QoQ) brought the H1’25 total to RM177.6 million (-17% YoY) – this formed 43% and 41% of our numbers and consensus full-year estimates. The key deviation against our numbers came from a sharper-than expected credit cost of 4.4% in Q2’25 (Q1’25: 3.2%, Q2’24: 2.6%). Otherwise, all items remained in line, with total operating income up 14% YoY in H1’25 on strong NII (+15%) and non-II (+6%), while opex crept up further by 20%, due to greater personnel and marketing spend. The group also recorded associate losses of RM18.7 million in Q2’25, bringing the H1’25 sum to RM30.3 million, in line with management’s RM60-70 million guidance. Positively, ACSM declared an interim DPS of 14.25 sen (same quantum as H1’24, adjusted for 1-for-1 bonus issue), implying that its dividend payout ratio has risen to 41% (H1’24: 34%). The group’s gross financing receivables stood at RM13.2 billion as at end-Aug 2024, up 14% YoY and 4% QoQ. Growth was driven by all segments, especially personal financing (+19% YoY, +5% QoQ) and automobile financing (+21% YoY, +6% QoQ), whereas moped financing grew by a softer clip of 7% YoY (QoQ: +3%). The receivables YTD annualised growth rate of 16% is currently tracking ahead of management’s 10% target for the year, which was left unchanged. We think this target leans towards prudence, and will likely be surpassed – especially given the revision to civil servants’ salaries in Dec 2024. Despite the spike in net credit costs in Q2’25, absolute NPL was flat QoQ (YoY: -9%). As such, its NPL ratio slipped by 0.1ppts QoQ to 2.4% (Q2’24: 3%). We gather that write-offs were stable QoQ, and that the sharp rise was attributable to BAU provisions following a refresh of the ECL model. Maintain BUY and RM8.80 TP. – RHB Research, Sept 27

GAM’S FY24 construction PAT of RM501.3 million (<1% YoY increase) was due to the high portion of low-margin overseas jobs (62% of segmental PAT). Construction PAT margin remains at a low level of 4.7% in FY24 (FY23: 9%). We expect overall construction margins to gradually trend upwards amidst higher contribution of upcoming higher-margin local jobs. The property segment saw a 31% YoY growth in PAT for FY24 backed by a combination of strong sales from local key townships (Cove and Gamuda Gardens) and quick turnaround projects (QTPs) such as Eaton Park and Elysian in Vietnam. New QTP projects in Vietnam (Springville and Meadows with total GDV of RM2 billion) may propel the segment’s growth in addition to the unbilled sales of RM7.7 billion (end-FY24) vs RM6.7 billion (end-FY23). With an outstanding orderbook of RM25 billion as of end-July and an assumed burn rate of RM5 billion from July to end-2024 – we expect GAM to secure RM10-12 billion of new jobs to hit an orderbook level of RM30-32 billion by end of CY24. We project it to clinch another RM20 billion of new jobs in CY25 to achieve an orderbook level of RM40 billion (assuming a 12-month RM12 billion burn rate) by the end of that year. As such, another RM10 billion of jobs could be potentially won between Jan-July 2025, in our view. Anticipated jobs aside from the Penang Light Rail Transit Mutiara Line include renewable energy projects in Australia, water supply scheme for Ulu Padas Hydro project, and domestic data centre jobs among others. We continue to favour GAM for steady flow of job wins (target to hit outstanding orderbook of RM30 billion by end of CY24) while higher-margin domestic jobs may start contributing higher. BUY with new RM9.79 TP. – RHB Research, Sept 27

Source: Maybank Investment Bank

AT MNHB’s Q3’24 results briefing, management shared that its food processing centre (FPC) has turned marginally profitable and utilisation rate has increased to 80% (vs. 70% in Q2’24). Its CU stores are also on track to break-even by end-Q4’24 on the back of increasing average sales/store, better food wastage management, and product mix improvements. MNHB’s recent entry into the East Coast also shows promise with higher average basket size and fresh food demand in the region. We understand that MNHB is unlikely to meet its FY24 store opening target of +100 stores (YTD: +16 net new stores), as management’s efforts are on revamping & increasing productivity at their existing Mynews and CU stores this year. We believe that this pause was much needed in order to streamline back-end processes across its brands. A major overhaul of its fresh food SKUs was also done to align its offering to consumer demand, which would ultimately lead to MNHB’s much improved profitability in FY24E. With a steadier operational footing, MNHB will be able to resume its store expansion plans of +100 stores in FY25. MNHB is preparing to open its first Maru Coffee store at Intercontinental Hotel, Kuala Lumpur, on Sept 30. Its new format will have an extended F&B menu for dine-in customers, with competitive pricing compared to other café chains. The group has identified another 5 locations for Maru Coffee but assured that store openings will be done at a slower pace. Reiterate BUY with an unchanged TP of MYR0.80. – Maybank Investment Bank, Sept 27