MQ Market Updates - 26 January 2024

MQ Trader

Publish date: Fri, 26 Jan 2024, 05:15 PM

Capital A Bhd is believed to be seeking a valuation of some RM5 billion for its planned sale of its aviation unit AirAsia Bhd that will eventually be merged with AirAsia X Bhd to be under AirAsia Aviation Group Ltd (AAGL). A local financial portal quoted sources saying that the valuation was a 12 per cent discount to Capital A's market value of RM5.7 billion as at end-2019. However, it was a 61 per cent premium to the company's market capitalisation of RM3.1 billion as at Jan 18. On Jan 8, Capital A announced that it had entered into a non-binding letter of offer with AirAsia X to sell its aviation business to the latter. (NST)

Maxis Bhd and Public Bank Bhd has signed a Memorandum of Understanding (MOU) to promote digital adoption among Malaysian small and medium enterprises (SMEs), paving the way for them to access digital solutions and financial assistance for implementation. In a joint statement, Public Bank managing director and chief executive officer Datuk Tay Ah Lek said the collaboration will see Malaysian SMEs getting top-notch financial and technology support. (NST)

KJTS Group Bhd made its debut on the ACE Market of Bursa Malaysia at 44 sen, a credible 62.96 per cent premium over its initial public offering (IPO) price of 27 sen. The company raised RM58.87 million from the IPO which will be utilised for the expansion of the cooling energy segment and offices in Malaysia, Thailand and Singapore amounting to RM44.92 million. It will use RM8.12 million for working capital while RM5.83 million is set aside for listing expenses. Managing director Lee Kok Choon said the company is expecting strong demand in its energy management services following the rising awareness on environmental, social and governance (ESG) aspects. (NST)

The partnership between Measat Global Bhd and Space Exploration Technologies Corp (SpaceX) opens up opportunities for better connectivity among the underserved community as well as increase the nation's workforce productivity and economy, a technology expert said. It was reported earlier that Measat has officially inked a partnership with SpaceX to become the official authorised reseller for Starlink hardware and services. The collaboration enables Measat to solidify its position as a one-stop provider for customers in satellite services and solutions while Starlink will be able to benefit from Measat's established market presence and strong on-ground customer service and technical support. (NST)

Sime Darby Plantation Bhd has appointed Mohd Haris Mohd Arshad (pic) as its new group chief operating officer overseeing the group's upstream operations in Malaysia, Indonesia and Papua New Guinea and Solomon Islands. In a statement, the plantations group said the appointment was effective from Jan 1, 2024. Meanwhile, Haris will continue in his capacity as managing director of Sime Darby Oil, a position he has held since March 2019, where he will lead efforts in market expansion and revenue growth. (TheStar)

Malaysian Resources Corporation Bhd (MRCB) share price was higher this morning, rising 8.62 per cent, following the news over the property developer’s participation in the Kuala Lumpur-Singapore high-speed rail (HSR) project. At 9.47 am, MRCB rose five sen to 63 sen with 83.66 million shares changing hands. It was the most actively traded stock.

Tenaga Nasional Bhd will kick-start a 400 megawatt-hour (MWh) battery energy storage system (BESS) pilot project in this quarter, marking Malaysia’s first utility-scale battery storage project to address intermittency issues of renewable energy (RE). The pilot project will be executed by the national utility outfit, operated by Grid System Operator (GSO), and overseen by the Energy Commission, according to the Ministry of Energy Transition and Public Utilities. “The execution of the pilot BESS project will support the nation’s energy transition aspiration through the strengthening of the electricity supply grid network,” the ministry said in a statement in conjunction with the International Day of Clean Energy.

MIDF Research holds a favourable view on the impact of worldwide fluctuations in agricultural commodity prices on Leong Hup International Bhd's feedmill business. This is attributed to Leong Hup's cost-plus-margin model, which enables the passing on of any rise in raw material expenses to livestock producers. "In Malaysia, 70 per cent of the feed produced in Leong Hup's feedmill is for internal use (usually sold in bulk), while the remaining 30 per cent is for other poultry players, either packed in 50kg bags or in bulk based on customer orders and the type of the farmhouse. (NST)

Kenanga Research is keeping Pavilion Real Estate Investment Trust (REIT) as its top sector pick on the back of its earnings resilience. "We believe Pavilion REIT’s premium retail assets are less vulnerable to downward pressure on occupancy and rental rates amidst rising headwinds in the retail sector on the back of sustained high inflation that hurts consumer spending," it said in a note. The research firm, which has an "outperform" call on Pavilion REIT, said the REIT's FY23 results met expectations with a notable pick-up in occupancy rates, along with a return in overall consumer spending appetite.

RHB Investment Bank Research (RHB IB) has maintained its "overweight" rating on the real estate sector, identifying UEM Sunrise Bhd as the top proxy for the segment, with potential benefits extending to Sunway Bhd, IOI Properties and Eco World Development Group Bhd if significant railway infrastructure projects materialise in Johor. In a sector update on Friday, the research house said that if the government decides to proceed with the Johor Light Rail Transit (LRT) and Kuala Lumpur-Singapore High-Speed Rail (HSR) projects, it could boost demand for residential, commercial and industrial properties in Iskandar Malaysia in the coming years, leading to an increase in prices for strategically located parcels of land.

Apex Research has downgraded Lagenda Properties Bhd to “hold”, with an unchanged target price of RM1.43, since its share price has appreciated in recent months. In a note on Friday, the research house said it is optimistic about the 50:50 joint venture (JV) of Lagenda Properties with Sime Darby Property Bhd (SimeProp) for the establishment of Seed Homes Lagenda, aiming to deliver innovative solutions in the affordable homes segment. Apex stated that Lagenda Properties will leverage SimeProp’s position as one of the largest property players in Malaysia, while Lagenda Properties will offer its expertise in affordable housing township development.

Sime Darby Property Bhd's (SimeProp) deal with Lagenda Properties to venture into the affordable homes sector could allow the group to explore the viability of the segment, potentially leading to future developments in other states, said Hong Leong Investment Bank (HLIB). In a company update note on Friday, the research house expressed pleasant surprise at this development, considering it as yet another effort by SimeProp to activate its non-core land bank. "This project marks SimeProp's first foray into the affordable home segment, leveraging the expertise from Lagenda Properties, which specialises in this domain. Unlike an outright land disposal, the joint venture (JV) allows the group to learn, explore, and study the viability of the segment," HLIB stated.

TA Securities has maintained its “sell” rating on Gadang Holdings Bhd at 41 sen with a lower target price of 23 sen (from 28 sen) based on sum-of-parts valuation due to stretched valuation. In a note on Friday, the research house said stripping off some one-off items of RM200,000, Gadang’s registered lower core earnings of RM7.8 million (-6.9% year-on-year) for the first half ended Nov 30, 2023 (1HFY2024), which was disappointing as it accounted for only 36.6% of TA's full-year projection. It said the negative variance was mainly underpinned by: i) slower-than-expected work progress for certain projects; and ii) higher operating expenses in the construction and utilities divisions.

RHB Retail Research said Sunsuria Bhd is poised for a technical rebound after bouncing off the immediate support and testing the immediate resistance level of 51 sen during the latest session. In a trading stocks note on Friday, the research house said that if a breakout above that level happens, the stock may trend upwards further towards 58 sen, followed by the next resistance point of 62 sen, which is also the four-month high. “On the other hand, falling below the 47.5 sen support would turn its direction into a downtrend,” it said.

RHB Retail Research said the uptrend of Carimin Petroleum Bhd may be extended after it rebounded strongly above the 21-day simple moving average line, while heading towards the 95 sen immediate resistance on surging trading volume. In a trading stocks note on Friday, the research house said that if a breakout occurs, the stock should test the next resistance pegged at RM1, followed by RM1.12. “If it drops below the 87 sen support, this would negate the bullish setup,” RHB said.

Source: New Straits Times, The Edge Markets The Star 26 January 2024