01/09/2025

BIZ & FINANCE MONDAY | SEP 1, 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

Rubber prices to be driven by extreme weather, tariffs KUALA LUMPUR: The Malaysian rubber market is expected to trade sideways with an upside bias this week, driven by extreme weather conditions and flooding in several countries. Industry expert Denis Low noted that heavy rainfall and strong winds have swept across various regions, damaging crops and disrupting productivity. “It is clear that certain rubber-producing regions are affected and this will, in turn, cause a temporary decline in rubber production,” he told Bernama. “In the interim, there is also uncertainty stemming from the tariffs, which can swing from 25 to 50% at a moment’s notice. Such uncertainty is affecting the economy and trade across all nations.” Echoing this view, the Malaysian Rubber Glove Manufacturers Association said the rubber market may continue to trend upward this week, driven by ongoing supply disruptions caused by weather conditions as a result of Typhoon Kajiki, which has hit major rubber-producing areas in Southeast Asia. Additionally, it said new car sales in Europe rose by 5.9% in July, indicating resilient demand in a key consumer market. However, potential trade tensions could weigh on market sentiment. “US President Donald Trump has threatened to introduce new tariffs and impose technology export restrictions against countries that target US technology firms, alongside implementing a 50% tariff on Indian goods,” it said. On a Friday-to-Friday basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 fell by 1.0 sen to 743.50 sen per kg while latex in bulk declined by 1.5 sen to 569.50 sen per kg. – Bernama

Ringgit expected to trade sideways with upside bias

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

KUALA LUMPUR: The ringgit is expected to trade sideways with an upside bias this week, reflecting a cautious but optimistic market sentiment, ahead of the Bank Negara Malaysia Monetary Policy Committee meeting scheduled on Sept 4. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said BNM is likely to maintain the overnight policy rate (OPR) at 2.75%. “BNM has delivered a pre-emptive cut in OPR and I suppose the degree of monetary policy accommodation is sufficient to support the growth. “More importantly, markets would want to see the latest assessment by the central bank with regard to the current state of the economy and its prospects,” he told Bernama. Commenting on the latest US Personal Consumption Expenditures (PCE) data, he said PCE and core PCE inflation for July came in within expectation. “The core PCE rose 2.9% as expected but higher than 2.8% in the previous month. In that sense, the markets acknowledge the fact that inflation is going to be at elevated level due to tariff,” he said, adding that however, it remains to be seen whether this is going to be persistent or transitory. Mohd Afzanizam said it appears that inflation is likely to be momentary as demand is expected to be weakened. “On that note, the ringgit is likely to oscillate between RM4.21 and RM4.23 (to the dollar),” said Mohd Afzanizam. UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan also expects BNM to maintain the OPR at 2.75% during the September meeting, adopting a wait-and-see stance following the pre-emptive 25-basis point cut in July.

1 US Dollar

4.2765 2.8100 3.3320 3.1070 4.9890 2.5260 3.3320 5.7750 5.3590 3.5860 60.3400 68.5000 55.4500 4.9600 0.0270 2.9160 43.5200 1.5300 7.6100 118.3500 115.1300 25.0000 1.4500 46.4000 13.8300 117.6800 N/A

4.1415 2.6970 3.2290 3.0210 4.8280 2.4330 3.2290 5.5930 5.1310 3.3400 57.8100 63.0500 52.7000 4.6600 0.0245 2.8110 40.0400 1.4300 7.1700 112.3500 109.2900 22.5800 1.3300 42.2600 12.2600 111.6000 N/A

4.1315 2.6810 3.2210 3.0090 4.8080 2.4170 3.2210 5.5730 5.1160

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

111.4000 3.1400 57.8100 62.8500 52.5000

4.4600 0.0195 2.8010

N/A

39.8400 1.2300 6.9700 112.1500 109.0900 22.3800 1.1300 42.0600 11.8600

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

KPJ Healthcare Bhd Buy. Target price: RM3.05

Cloudpoint Technology Bhd Buy. Target price: RM1.13

Inari Amertron Bhd Buy. Target price: RM2.54

Aug 29, 2025: RM0.72

Aug 29, 2025: RM2.03

Aug 29, 2025: RM2.60

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

CLOUDPOINT posted solid 2QFY25 results with revenue of RM45.6m (+37% YoY, +30.6% QoQ) and core PATAMI of RM5.5m (+6.1% YoY, +22.4% QoQ). Growth was broad-based, led by 8x YoY surge in digital applications and cloud services, +37% growth in project-based revenue, and +11% in recurring IT services. Excluding the RM0.3m Main Market transfer expenses, core PATAMI was RM5.8m. 1H25 revenue rose +25% YoY to RM80.5m, with core PATAMI of RM10.3m (+15.9% YoY), forming 40% of our full-year forecast. As 60% of earnings typically fall in 2H , we deem the results as on track and maintain our FY25-27 earnings estimates. Cloudpoint maintains a positive outlook moving into 2H, supported by strong customer enquiries from both existing and new clients. While project revenue timing may vary due to client specific implementation schedules, management noted that orderbook replenishment continues as planned. Cybersecurity orders also picked up in 2Q25, reversing the slower momentum seen in 1Q25. Meanwhile, recurring income from professional IT services remains stable QoQ - 1Q and 2Q mark the highest quarterly run-rates for this high-margin segment, despite a slight margin dilution in 2Q due to a higher portion of hardware deliveries. This stable recurring base continues to provide earnings resilience and margin uplift over time. Management is actively engaging with clients to capitalise on rising AI adoption, which will drive infrastructure upgrades across networking, cybersecurity, and enterprise workloads. With strong client relationships and proven execution, Cloudpoint is well-positioned to capture structural growth opportunities. Maintain BUY and TP of RM1.13. – RHB Research, Aug 29

KPJ Healthcare’s 2Q25 core profit of RM79m brought the 1H25 number to RM143m, at 39% and 35% of our and consensus’ full-year estimates. Results were below expectations due to flattish inpatient visits and a spike in depreciation charges. Revenue surged 11% YoY, primarily driven by an increase in revenue intensity, with average revenue intensity per inpatient rising 9% YoY, and outpatients by +5% YoY. This was further supported by higher total patient visits (+3.5% YoY), partially offset by a lower bed occupancy rate (62%). The number of outpatient and inpatient visits grew by 3.8% and 1.6% YoY to 703,802 and 92,665, bringing total patient visits to 796,467 (+3.5% YoY). The bed occupancy rate (BOR) declined to 62% (2Q24: 66%) as KPJ added 285 beds YoY (QoQ: +35 beds), bringing total operational beds to 3,930. Group EBITDA margin remained largely stable at 23% (2Q24: 23.7%), notwithstanding the drag from KPJ Kuala Selangor, which commenced operations in March. Core net margin contracted 0.8ppts YoY as depreciation spiked 11% YoY due to the commissioning of KPJ Kuala Selangor. The Ministry of Health plans to roll out the diagnosis-related group (DRG) payment system for private hospitals next year via the Medical and Health Takaful Insurance (MHIT) model, with the transition to commence by 2027. The DRG scheme under the MHIT model is non-mandatory for private hospitals and the public (as it may overlap with existing medical insurance plans), and the ministry had previously suggested funding MHIT premiums via EPF Account 2. Meanwhile, the launch of the national DRG system by 2027 also faces uncertainly, heading towards the next general elections. Keep BUY, lower TP of RM3.05. – RHB Research, Aug 29

INARI Amertron’s FY25 core earnings of RM254.6m (-16.8% YoY) are in line, albeit dragged by weaker revenue, margin compression from unfavourable FX rates, and start-up losses at its China operation. We see its current price weakness as a chance to position for new radio frequency (RF) packages in flagship smartphone models and its own pivot to new growth areas. FY25 revenue contracted by 8.6% YoY to RM1.35bn, with core profit at 95.5% and 98.4% of our and Street estimates. The RF segment contributed 65% of revenue, followed by optoelectronics (29%) and legacy integrated circuits or ICs (6%). INRI’s EBITDA margin contracted to 24.3% (FY24: 25.3%) on higher fixed costs (new product development, China venture) and FX impact. Meanwhile, its Yiwu venture incurred a RM16.1m start-up loss. 4QFY25 core profit rose 15.7% QoQ and 4.4% YoY to RM61.5m (ex-unrealised FX loss), aided by tax credits and better cost control and even though its revenue declined by 0.5% QoQ or 7.9% YoY to RM306.7m. Testing time remained low and smartphone-related demand was unexciting, dampened by trade war-related uncertainties. In FY26, INRI should benefit from a stronger contribution from its fibre optics segment, while the growth of its RF business will hinge on the uptake of new smartphones. On its partnership with Sanan Optoelectronics to acquire Lumileds, we are neutral on this development over the short term, but positive over the medium term as this will enable INRI to diversify its revenue stream, boost its exposure to key growth areas, ramp up vertical integration, expand manufacturing capabilities, and improve ROE through strategic cash deployment. Keep BUY, new RM2.54 TP from RM2.45. – RHB Research, Aug 29