18/08/2025

BIZ & FINANCE MONDAY | AUG 18, 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

Pantech Global unit to buy Selangor land for RM29m KUALA LUMPUR: Pantech Global Bhd’s wholly-owned subsidiary, Pantech Steel Industries Sdn Bhd, has entered into a sale and purchase agreement with Uptown Promenade Sdn Bhd to acquire a parcel of land in Klang, Selangor, for RM29 million. In a filing with Bursa Malaysia, the company said the proposed acquisition involves 1.96 hectares of land, as the group intends to expand its Selangor operations by establishing a new factory and corporate head office, namely Klang Factory 2, by 2028. “The proposed acquisition is expected to be completed by the fourth quarter of 2025. With the expansion of the Selangor operations, the group can broaden the range of carbon steel butt weld pipe fittings in terms of normal pipe size, wall thickness and material grade,” it said. Pantech has also proposed a variation to the utilisation of proceeds of RM38 million raised from its initial public offering (IPO) to fund the proposed acquisition. Under the proposed variation, it said the allocation for the acquisition of land, including the ancillary cost, has been revised from RM35 million to RM30 million, as land conversion will not be required for the new site. “The reduction of RM5 million will be allocated to construction works. Due to the smaller size of the land, the company will no longer proceed with the construction of a workers’ hostel using IPO proceeds. The RM3 million originally allocated for this purpose will also be reallocated to construction works. “This brings the revised total construction allocation to RM16 million,” said Pantech. The company said the proposals are not expected to have any material effect on its consolidated earnings. – Bernama

Ringgit seen trading within RM4.20-RM4.22 this week THE ringgit is expected to hover between RM4.20 and RM4.22 this week as traders and investors remain cautious over the trajectory of US interest rates. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the release of the US Federal Open Market Committee (FOMC) meeting minutes on Wednesday could offer more clarity on the state of the US economy, particularly after two FOMC members dissented from the recent decision and favoured a 25-basis-point rate cut. Meanwhile, Kenanga Investment Bank Bhd said markets continued to swing between two and three US Federal Reserve cuts over the past few weeks. “We maintain our base case for two, underpinned by evidence that firms are absorbing tariff costs, a trend that is unsustainable and likely to squeeze margins,” it said in a research note. Moreover, the investment bank said, further easing would require either a major deterioration in the next jobs report or a significantly dovish tone from Fed chair Jerome Powell. “Hence, we expect the ringgit to range around RM4.22 to RM4.23 against the greenback in the near term,” it added. On Thursday, the ringgit appreciated to the 4.18 level against the US dollar, its strongest level in more than six weeks. The last time it reached a similar high was on July 1, when it hit 4.1805. Meanwhile, on a Friday-to-Friday basis, the ringgit ended the week higher against the greenback, closing at 4.2085/2155 versus 4.2420/2480 previously. The local note appreciated vis-à-vis the Japanese yen to 2.8653/8702 from 2.8720/8763 the previous week and rose versus the euro to 4.9185/9267 from 4.9381/9451. – Bernama Johor Plantations Group Bhd Buy. Target price: RM1.50

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.2845 2.7970 3.3340 3.0990 4.9940 2.5440 3.3340 5.8000 5.3360

4.1485 2.6830 3.2310 3.0120 4.8320 2.4500 3.2310 5.6160 5.1080 3.3480 57.4700 63.1000 52.4200 4.6600 0.0249 2.8140 39.5400 1.4400 7.1700 112.5600 109.4900 22.7700 1.3400 41.9500 12.2200 111.7900 N/A

4.1385 2.6670 3.2230 3.0000 4.8120 2.4340 3.2230 5.5960 5.0930

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

117.9200 3.5960 60.0200 68.5800 55.1700 4.9700 0.0275 2.9080 15.3000 42.9900 1.5400 7.6200 118.5700 115.3300 25.2200 1.4600 46.0700 13.7700

111.5900 3.1480 57.4700 62.9000 52.2200

4.4600 0.0199 2.8040

N/A

39.3400 1.2400 6.9700 112.3600 109.2900 22.5700 1.1400 41.7500 11.8200

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

Sunway Construction Group Bhd Buy. Target price: RM6.55

KKB Engineering Bhd Buy. Target price: RM1.65

AUG 15, 2025: RM1.35

AUG 15, 2025: RM1.36

AUG 15, 2025: RM5.37

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

KKB Engineering reported a core net profit of RM5.7m (-18% YoY) for 1H25 which missed our estimates - making up 25% of our initial FY25F. The negative deviation was mainly due to the weaker-than expected performance of the engineering division. The group is expected to reset its activities in FY25 whereby projects have reached its tail end while it continues tendering for a new round of jobs. The engineering division of KKB recorded a PAT of RM3.5m in 2Q25 (2Q24 PAT: RM12.8m) stemming from the steel fabrication arm which saw two major projects at its tail end which related to Sarawak Shell (c.RM300m) and the Rosmari and Marjoram (R&M) onshore gas plant in Bintulu (RM112.6m) awarded by Samsung E&A Engineering. Nonetheless, 2Q25’s engineering PAT cancelled out 1Q25’s net loss of RM3.4m. Meanwhile, the manufacturing division rebounded to a PAT of RM4.6m from a net loss of RM1.4m supported by KKB’s supply of mild steel concrete lined pipes for a water treatment plant in Sibu and a regional water supply project in Serian. As at end-2Q25, KKB’s outstanding orderbook stood at RM127m (end-1Q25: RM250m), while the group’s tenderbook for engineering and construction as of end 2Q25 is worth RM231m. Moving forward, the group expects to submit another set of bids with a combined value of RM650m for the engineering and manufacturing divisions) and RM1.2bn for oil & gas jobs in 2H25 (estimated success rate of 30-40%) - of which outcomes are expected to be known in FY26. Since results underperformed expectations - we lower our FY25F-27F earnings by 14%, 6% and 7% . Stay BUY, with new RM1.65 TP. – RHB Research, Aug 15

JOHOR Plantations Group’s 1H25 earnings are in line with our and Street estimates. FFB output should improve in 2H25 as we head towards the peak output season in 3Q25, but this may be offset by moderating CPO ASPs. 1H25 FFB output dropped to -8% YoY (2Q25: +25% QoQ, -6% YoY), no thanks to the dry season weather in Johor, but JPG guided that from July onwards, weather conditions have been favourable. YTD-July, FFB output slightly improved to -6% YoY, albeit below our and management’s initial guidance of +3 to +5% for FY25. While JPG is hoping for a larger pick up in 2H25, with peak output in September/October, it has now targeted for a lower FFB growth target for FY25F, citing 0% to +5% YoY. We remain conservative, and trim our FFB growth estimates further to +1% for FY25 (from +3%) and +3% to +4% for FY26-27 (from +5%). JPG recorded 1H25 CPO ASPs of RM4,605 (+11% YoY), ie a 6% premium over the Malaysian Palm Oil Board (MPOB) price, while its PK ASP shot up by 53% YoY to RM3,808/tonne (10% premium over the MPOB price), owing to the tight lauric oil market. As usual, JPG has secured a premium over the MPOB price for 70 80% of output in 2025 of RM200-250/tonne. CPO unit cost rose by 3% YoY to RM2,263/tonne in 1H25 (vs our flattish unit cost assumption), due to weaker output. As JPG is targeting for production to pick up in 2H25, it maintains its FY25 cost assumption of RM2,200-2,300/tonne (flattish YoY). In terms of application, JPG applied 49% of its FY25 fertiliser requirements in 1H25 (fertiliser tendered at prices lower at -11% YoY for FY25). Maintain BUY, with a higher RM1.50 TP. – RHB Research, Aug 15

WE expect Sunway Construction (SCGB) to chalk in a 2Q25 core profit ranging between RM70m and RM85m (translating into a YoY growth of 88-129% backed by a combination of progress for its internal jobs and some data centre (DC) jobs. Our observations in Ipoh and Cyberjaya indicate that the Sunway City Ipoh Mall (SCIM) and the Project Services Request (PSR) multinational corp (MNC) DC job has reached commendable progress in June and July. As of end Mar 2025, SCIM was only 11% completed but during our visit in Jul 2025, we estimate that progress may have reached to around 20-25%. Separately, our observation for SCGB’s DC projects namely the PSR MNC in Cyberjaya has also seen commendable advancement with progress likely being at 30-35% in late June (in our view) compared to 19% as of end March). SCGB’s parent company Sunway will be developing a Transport Oriented Development (TOD) project; Seremban Sentral (estimated GDV: RM2.2bn). Conservatively assuming that construction cost is 40% of GDV, the potential construction value could be around RM880m. We do not rule out the possibility of SCGB being a front runner for this project in light of its involvement for the Rapid Transit System TOD project at Bukit Chagar, Johor Bahru. Putrajaya Holdings and Sunway Healthcare Holdings have signed a heads of agreement to jointly develop a private tertiary medical centre in Precinct 7, Putrajaya. The first component of the medical centre is expected to house a tertiary hospital with over 300 beds. Taking the minimum 300 bed capacity as a base - we envisage that the potential construction value could be between RM400m and RM600m. Still BUY and RM6.55 TP. – RHB Research, Aug 15