MY Morning Wrap | Analysts: MISC Capable of Bidding on More FPSO Projects and Expanding Horizons with New Vessel
Good morning mooers! Here are things you need to know about today's market:
●S&P 500 Ends Slightly Higher Amid Earnings and Fed Interest-Rate Cut Speculation
●Topmix Inks Underwriting Agreement with M&A Securities
●Stocks to watch: MISC, Hartalega, Gas Malaysia
-moomoo News MY
Wall Street Summary
US stocks traded in mixed directions Tuesday following a pullback that saw bond yields rise after comments from Federal Reserve Chairman Jerome Powell all but dashed hopes for an interest-rate cut in March. The Fed's Metser reiterated Powell's claim that lowering rates too soon was not an option, sending treasuries higher.The $S&P 500 Index (.SPX.US)$ traded 0.23% higher, the $Dow Jones Industrial Average (.DJI.US)$ rose just 0.37%, and the $Nasdaq Composite Index (.IXIC.US)$ fell 0.07%.
Breaking News
Topmix inks underwriting agreement with M&A Securities
Topmix Bhd, a total surface decorative products company, has entered into an underwriting agreement with M&A Securities Sdn Bhd for its initial public offering (IPO) on the ACE Market of Bursa Malaysia. The IPO will include a public issuance of 82.7 million new ordinary shares, which represents 21% of its enlarged share capital, and an offer for sale of RM19.7 million existing shares, or 5% of its enlarged share capital, via private placement to selected investors. M&A Securities will underwrite 27.6 million new shares made available to the Malaysian public and pink-form allocations under the agreement.
Stocks to Watch
$MISC (3816.MY)$: According to analysts, MISC Bhd is now capable of bidding for additional new floating production storage and offloading (FPSO) projects, as well as successfully completing future jobs. This assessment follows a recent site visit to MISC's Mero 3 FPSO vessel at the CIMC Raffles Shipyard in Yantai, China, where TA Research expressed greater confidence in the maritime conglomerate's Mero 3 execution and future prospects. The research firm further predicts that MISC will emerge as the top contender for future FPSO projects, citing Mero 3's clean audit and exceptional safety profile.
$HARTA (5168.MY)$: Hartalega Holdings Bhd, Malaysia's largest glove maker by market value, reported a profit of RM22.38 million for the third quarter ended December 31, 2023, marking the second straight quarterly profit. This is a significant improvement from a net loss of RM31.91 million in the same period the previous year. The company attributed the improved performance to lower raw material prices and cost savings from operational rationalisation, which more than offset a 10% decline in revenue to RM415.64 million from RM461.84 million. The improved performance was also due to lower utilities expenses, better production efficiency arising from higher capacity utilisation, coupled with higher interest income and a reversal of certain provisions no longer required during the quarter.
$GASMSIA (5209.MY)$: Gas Malaysia Bhd is projected to experience a 3% increase in net profit for the fourth quarter ended December 31, 2023, due to higher sales volume and better gas selling prices. Kenanga Research estimates the company's net profit for 4Q23 to be around RM88mil, with cumulative FY23 net profit at approximately RM367mil, in line with their forecast. The research firm anticipates a 4% sequential increase in sales volume for 4Q23, attributed to improved business conditions, particularly in the local glove-manufacturing sector, which experienced a sales decline but has now bottomed out since 2Q23.
$BAT (4162.MY)$: British American Tobacco (Malaysia) Bhd (BAT Malaysia) reported a 23.27% decline in net profit for the fourth quarter ended December 31, 2023, dropping to RM47.36 million from RM61.72 million in the previous year. The decline was attributed to significant investments made in the launch of vapour products, resulting in higher operating expenses. The group's quarterly revenue also fell by 17.5% to RM635.86 million from RM770.66 million. The company declared a fourth interim dividend of 15 sen per share, amounting to RM42.8 million, payable on March 5.
$ECOWLD (8206.MY)$: Eco World International Bhd plans to reduce its share capital by an additional RM500 million to pay a targeted dividend of 21 sen per share or RM504 million in total payout over the next two years. The group has set aside funds for working capital and funding requirements and intends to declare a first tranche of dividends of at least RM144 million or six sen per share. The capital reduction is expected to be completed by the first half of 2024. The group clarified that its dividend distribution target of RM504 million is solely an internal target and has not been reviewed by an external auditor, and is neither a financial estimate, forecast nor projection.
$SUNCON (5263.MY)$: Analysts anticipate that Sunway Construction Group Bhd (SunCon) will deliver better earnings this year, as a result of a strong order book and margin recovery. UOB Kay Hian Research (UOBKH Research) revealed that SunCon's order book was RM5.8bil at the end of 3Q23, indicating positive prospects for the construction sector, which led to the group increasing its 2024 replenishment target to RM2.5bil. SunCon attributed the improved revenue to integrated construction and prefabrication hub projects, as well as several new projects.
$REDTONE (0032.MY)$: REDtone Digital Bhd has secured a RM398.1 million contract from the Malaysian Administrative Modernisation and Management Planning Unit (Mampu) to provide unified communications solutions. The contract, known as the MyGovUC 3.0 contract, covers the government's unified communications needs, including electronic mail systems, calendar systems, audio and video conferencing, chat spaces, directory management, change management, user training, software support, security operation center, network operation center, and helpdesk covering information security management.
$SPRITZER (7103.MY)$: Spritzer Bhd is poised for higher earnings in the near term, thanks to a surge in domestic travel and international tourist arrivals that follows two consecutive quarters of growth. In a recent report, Malacca Securities noted that as global tourism gradually returns to pre-pandemic levels, the well-established Spritzer bottled water brand is expected to benefit from the uptick in tourism activities. This is supported by Tourism Malaysia's report of a 160% YoY increase in the first nine months of 2023.
$CLOUDPT (0277.MY)$: Cloudpoint Technology Bhd, an information technology solutions provider, is acquiring a 75% equity interest in Unique Central Sdn Bhd (UCSB) and Uniqcen Sales & Services Sdn Bhd (USSSB) for a total of RM26.78 million in cash. UCSB is primarily involved in the supply, delivery, and installation of data centers, data cabling, fiber optic works, as well as mechanical and electrical services, while USSSB is an electrical contractor.
$EFORCE (0065.MY)$: Excel Force MSC Bhd, a financial services business solutions provider, is acquiring the entire stake in Orca Capital Holdings Ltd, an investment holding company incorporated in the British Virgin Islands, from Honest Winner Ltd for RM18.15 million through a combination of share sale and cash. As part of the deal, Excel Force MSC Bhd will issue 50.5 million new shares to Honest Winner at an indicative issue price of 33.5 sen per share, which amounts to RM16.92 million. The remaining RM1.23 million will be paid in cash.
$NPC (5047.MY)$: NPC Resources Bhd, which is based in Sabah, has proposed to sell 7,505 acres (3,037 hectares) of oil palm land in the state, held through three subsidiaries, for RM165.11 million. The land is located in the Labuk-Sugut district, and the company plans to sell it to Tamaco Plantation Sdn Bhd, a private company based in Lahad Datu. NPC has not disclosed how it plans to use the proceeds from the sale, the reason for the divestment, or the shareholders of Tamaco.
$ADVCON (5281.MY)$: Advancecon Holdings Bhd's subsidiary, Advancecon Infra Sdn Bhd, has won a RM27.3 million contract from Mujur Minat Sdn Bhd. The contract is for the site clearing and earthworks construction (stage 1) of the Gamuda Gardens Park mixed development project in Rawang, Selangor. The contract is set to begin on February 7, 2024, and end on December 16, 2024.
$SEAL (4286.MY)$: Seal Incorporated Bhd is entering the solar project engineering, procurement, construction, and commissioning (EPCC) business by subscribing to ordinary and preference shares of MSR Green Energy Sdn Bhd (MSRGE) in a RM15 million deal. The company may raise its stake in the solar EPCC company to 20%. The transaction is a related party deal, as KVC Corp Sdn Bhd, which has a 50.96% stake in MSRGE, is linked to Aaron Chen Khai Voon, a 29.22% shareholder in Seal.
$SANICHI (0133.MY)$: Precision plastic mould maker Sanichi Technology Bhd has terminated its memorandum of understanding with Singapore-based FKS Holdings Pte Ltd after more than five years of negotiations. The MOU was related to the provision of fresh produce such as seafood, wagyu beef, fruits, and vegetables to international food and beverage industry players. Sanichi Technology did not disclose the reason behind the termination of the MOU.
Source: Dow Jones Newswires, Bursa Malaysia, The Malaysian Reserve, The Star, The EDGE
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