The Data Center Theme Has Regained Momentum

Market Review

Malaysia: The FBMKLCI (+0.52%) continued its third winning streak and closed higher at 1580.46 pts, as gains in PMETAL (+20.0 sen) and YTL (+14.0 sen) led the key index higher. In the broader market, the Construction (+1.97%) sector advanced the most, while REIT (-0.03%) was the only sector that declined.

Global markets: Wall Street ended higher on the first trading session post Donald Trump's Inauguration Day, as investors speculated that President Trump's trade policy will not be as stringent as feared. Similarly, both the European and Asian markets also closed higher.

The Day Ahead

The local bourse closed higher as President Trump's decision to not impose tariffs on China on his first day in office boosted regional sentiment. In the US, markets edged higher, as the US-China relations were off to an unexpectedly warm start after Trump returned to the White House. Meanwhile, Malaysian investors will also continue monitoring the CPI data and BNM's interest rate decision later today. In the commodities market, Brent crude oil broke below the USD80 mark, while gold price trended higher towards the USD2743 level. Bitcoin is trading around the USD105k level, marking a slight retracement from its all-time-high of USD109k, while CPO prices are still hovering around the RM4,200 level.

Sector Focus: With the upcoming CNY festive season and the start of Sumbangan Tunai Rahmah Phase 1 cash payments today, we expect a last-minute shopping spree to benefit the Consumer, Aviation and Tourism sectors. Momentum in the Construction and Building Materials sectors is likely to persist, driven by the JSSEZ formalisation, Penang LRT project, and ongoing data center investments. Lastly, bargain-hunting in the Technology sector may continue, as Malaysia remains largely unaffected by the US chip sanctions, at least for the near term.

FBMKLCI Technical Outlook

The index is still trading below all the MA lines within the pullback formation. The technical indicators however are recovering, with the RSI rebounded off the oversold zone, while MACD Histogram forming its rounding bottom formation. Resistance is anticipated around 1,595-1,600, while support is set at 1,560-1,565.

Company Briefs

Malaysian Resources Corp Bhd (MRCB) is said to have won the bid for the Ipoh Railway Station Integrated Development Plan (iRide) project, which will be inked on Thursday (Jan 23) in Ipoh, Perak, according to sources. There were two consortiums shortlisted by the Railway Assets Corporation (RAC) to develop iRide, Transport Minister Anthony Loke was reported saying in September last year. The iRide project, which is based on the transit-oriented development (TOD) concept, will see the development of almost 70 acres of RAC land behind Ipoh Railway Station, which will be rebranded as Ipoh Sentral. (The Edge)

Yinson Holdings Bhd's (YINSON) floating production storage and offloading unit Yinson Production Offshore Pte Ltd plans to allocate US$4.5bn to US$6bn (RM20.2bn to RM30bn) capital expenditure in the next three years to expand ahead of a possible initial public offering (IPO) in the US. "Listing is something that we would be talking about in three to five years," chief financial officer Markus Wenker said in an interview last week. While the company has options, an IPO in North America is the preferred choice, he said, adding that plans would depend on market sentiment and potential valuation. (The Edge)

Pansar Bhd (PANSAR) secured a RM477.69m contract to design and build the Serian-Gedong-Samarahan dual carriageway highway from the Sarawak Public Works Department. The scope of work includes the development of an 8.5km of a new four-lane dual carriageway, including two bridges, an autonomous rail transit reserve, bicycle tracks, utility corridors, road lighting, road furniture, and signage. The project is slated to commence in February 2025 and will take 36 months to complete. (The Edge)

MNRB Holdings Bhd (MNRB) reported a 36.93% increase in its net profit for the third quarter ended Dec 31, 2024 (3QFY2025) to RM115.86m from RM84.61m a year earlier on the back of a RM136.7m jump in the group's insurance service earnings. Revenue rose 15.85% to RM936.68m from RM808.55m previously, supported by growth in the reinsurance and general takaful businesses, although this was partially offset by a reduction in the retakaful business. MNRB did not declare any dividend for the quarter. (The Edge)

CIMB Group Holdings Bhd's (CIMB) 94.83%-owned CIMB Thai Bank PCL saw its net profit surge 77.7% to 2.85bn baht (RM374.5m) for the financial year ended Dec 31, 2024 (FY2024), up from 1.61bn baht a year earlier, thanks to higher operating income and lower expected credit losses. The bank's consolidated operating income increased 9.7% to 15.1bn baht from 13.77bn baht, attributed to a 49.4% rise in its other operating income, as well as 19.9% increase in net fees and service income. (The Edge)

Mah Sing Group Bhd (MAHSING) is purchasing a 2.78-acre prime land in Sentul here for RM32m, where it plans to develop its new RM283m residential development project dubbed M Aria. The new project marks Mah Sing's third development in Sentul and is estimated to carry a gross development value (GDV) of RM283m. The land purchase is expected to be completed by the second half of 2025. (The Edge)

YNH Property Bhd (YNHPROP) is disposing of a two-storey shopping centre, AEON Mall Seri Manjung in Perak, to Sunway Real Estate Investment Trust (SUNREIT) for RM138m. The property is 100% leased to supermarket chain operator AEON Co (M) Bhd (AEON), whose lease will last another 13 years until Dec 3, 2037. The sale is expected to be completed within six months. YNH Property expects to book a pro forma net gain of RM12.03m from the sale. Meanwhile, Sunway REIT said the property is expected to generate an initial net property income (NPI) yield of 6.5% and average 7% yield over AEON Co's remaining tenure on its lease. (The Edge)

Alpha IVF Group Bhd's (ALPHA) net profit for its second quarter ended Nov 30, 2024 (2QFY2025) increased 23.6% to RM15.1m, from RM12.21m a year ago, thanks to higher sales revenue from foreign patients. Revenue increased 12.2% year-on-year to RM43.24m, from RM38.54m in 2QFY2024. No dividend was declared for the quarter. (The Edge)

KIP Real Estate Investment Trust (KIPREIT) posted a 28.9% rise in NPI for the second quarter ended Dec 31, 2024 (2QFY2025) to RM21.62m, from RM16.78m a year earlier on better performance of its malls, bolstered by newly acquired retail assets, Cyberjaya mall D'Pulze and Perak hypermarket TF Value. Revenue expanded 32.7% to RM30m versus RM22.61m on the aforementioned stronger retail asset performance and asset additions. The trust declared a distribution per unit (DPU) of 0.48 sen, payable on Feb 28. Including the DPU of 1.18 sen declared in November before the conclusion of 2QFY2025, DPU declared, so far, amounted to 1.66 sen which is higher than the 1.55 sen in the same period a year earlier. (The Edge)

UOA Real Estate Investment Trust (UOAREIT) posted a 8.55% increase in net rental income for the fourth quarter ended Dec 31, 2024 (4QFY2024) to RM20.36m from RM18.76m in the same period a year earlier on improved occupancy. Gross rental income increased almost 7% to RM29.01m versus RM27.11m, while property operating expenses logged a slower 3.46% rise to RM8.65m from RM8.36m. UOA REIT declared a final income DPU of 3.24 sen, payable on Feb 28. (The Edge)

Taghill Holdings Bhd's (TAGHILL) said it has secured a RM58m contract for construction work on an 18-storey commercial complex in Ipoh. The contract, awarded by One Roof Development Sdn Bhd, will span 16 months from March 1, 2025, with a target completion date of June 30, 2026. The 18-storey commercial complex comprises 271 hotel rooms, offices, restaurants, cafes, function rooms, banquet halls and swimming pools. (The Edge)

KTI Landmark Bhd (KTI) is exploring a potential affordable housing project in Kota Kinabalu, Sabah, to be jointly developed with a state government agency. KTI's wholly owned unit KTI Sdn Bhd accepted a letter of intent in relation to the project from Sabah's Housing and Town Development Authority. The project comprises developing 5,000 units of houses atop 57.25 hectares of land in Sepanggar district, subject to relevant authorities' approvals on the development and building plans. (The Edge)

Source: PublicInvest Research - 22 Jan 2025