MY Morning Wrap | IOI Announces Ninefold Surge in Q4 Earnings

The $Dow Jones Industrial Average (.DJI.US)$ rallied to a record-high close Monday, although the $S&P 500 Index (.SPX.US)$ and $NASDAQ 100 Index (.NDX.US)$ sank as geopolitical tensions and tech weakness ahead of Nvidia's earnings later this week weighed on Wall Street.

Weak chip stocks helped drive the IXIC and SPX lower, led by an 8.3% decline in $Super Micro Computer (SMCI.US)$. $Micron Technology (MU.US)$ likewise fell 3.8%, while $NVIDIA (NVDA.US)$ shed 2.3%. Chip names apparently eased among uncertainty as to whether Nvidia's earnings later this week will live up to Wall Street's lofty expectations.

$IOICORP (1961.MY)$, a leading Malaysian palm oil producer, reported a ninefold increase in net profit for the fourth quarter ended June 30, 2024 (4QFY2024), reaching RM346.9 million or 5.59 sen per share, up from RM37.2 million or 0.60 sen per share in the previous year. This significant profit rise was propelled by a net foreign currency translation gain of RM24.3 million from foreign currency borrowings and deposits, a stark turnaround from a RM171.5 million loss a year earlier. The company also recognized a net fair value gain of RM5.6 million on biological assets, a shift from a RM2.8 million loss in the preceding year.

$GDB (0198.MY)$ has triumphed in an adjudication concerning the 8 Conlay project, securing a decision in favor of the company regarding outstanding payments post-termination by KSK Land Sdn Bhd. As detailed in a stock exchange filing, the adjudicator mandated that KSK Land's subsidiary, Damai City Sdn Bhd (DCSB), remit RM59.32 million to GDB's subsidiary, Grand Dynamic Builders Sdn Bhd (GDBSB). This sum represents unpaid amounts for construction services rendered under their contractual agreement.

$TROP (5401.MY)$ has finalized a sale and purchase agreement (SPA) with NTT Global Data Centers Holding Asia Pte Ltd, divesting a 68.457-acre plot in Gelang Patah, Johor, for RM383.13 million. This transaction is the company’s fourth substantial asset sale within the last nine months. Tropicana Corp’s fully-owned entity Tropicana Firstwide Sdn Bhd (TFSB) and seven NTT Data Group indirect subsidiaries, collectively recognized as a global IT service and consulting conglomerate based in Japan, executed the SPA. The land's initial investment value was recorded at around RM143.19 million.

$KUB (6874.MY)$ has announced the divestment of a significant 70% shareholding in its indirect, fully-owned subsidiary, KUB Sepadu Sdn Bhd (KUBS), a key player in the company's agro division. The stake has been earmarked for sale to Sinong Enterprise Sdn Bhd, a firm with established operations in oil palm plantation and swiftlet ranching, for a total cash consideration of RM103.37 million. The transaction is anticipated to yield a pro forma profit of RM19.65 million for KUB Malaysia Bhd. Moreover, the infusion of cash from this disposal is designated for strategic reinvestment into the company's primary business segments, specifically the liquefied petroleum gas division and the power division.

$IHB (7240.MY)$, a prominent construction firm, has formally contested the accusations and demands for relief asserted by Consortium Zenith Construction Sdn Bhd (CZC) in a legal action targeting its subsidiary. The conflict centers on the significant roadwork and the Penang third link (PMRT) initiative. CZC has charged that transactions totaling RM13.12 million, remitted to IHB's fully-owned affiliate Infraharta Sdn Bhd (ISB), were marred by fraudulent activities and deception. Consequently, CZC insists that ISB is obligated to reimburse the aforementioned sum. Parallel claims have been made against Vizione Construction Sdn Bhd, a branch of $VIZIONE (7070.MY)$ and the second respondent in the case, concerning payments of RM15.5 million.

$TEXCHEM (8702.MY)$ has announced the appointment of Dr. Yuma Konishi to the role of Group Chief Executive Officer (CEO), succeeding Yap Kee Keong upon his retirement. Dr. Yuma Konishi, who is the progeny of Executive Chairman Tan Sri Dr. Fumihiko Konishi, has been with the company since 2005 and previously held the position of Executive Director.

$T7GLOBAL (7228.MY)$, an established provider of energy solutions, has been awarded a significant contract valued at RM74.6 million by the Ministry of Defence (Mindef). The contract entails the provision of comprehensive airfield surveillance radar systems, advanced communication systems, and integral air traffic management equipment for the Royal Malaysian Air Force. This agreement, which extends over a five-year period from August 5, 2024, to August 4, 2029, is a testament to the capabilities of T7 Global Bhd's subsidiary, T7 Kemuncak Sdn Bhd, which secured the contract on July 31.

$GLOTEC (5220.MY)$, through its Australian-listed subsidiary NuEnergy Gas Ltd, has announced a fundraising initiative aimed at securing gross proceeds of up to A$8.17 million (RM24.05 million). This capital injection is designated for the advancement of NuEnergy's early gas sales program in Indonesia. The financing will be achieved through a renounceable pro-rata entitlement offer, which involves issuing up to 408.54 million new shares of NuEnergy. Eligible shareholders will have the opportunity to purchase eight new shares for every 29 shares they currently possess, at a nominal issue price of A$0.02 per share. NuEnergy, holding a 64.66% interest by Globaltec, will partially underwrite the offer.

$VELESTO (5243.MY)$ has successfully concluded the "Mandatory Five Yearly Special Periodical Survey" (SPS) for its Naga 2 drilling rig. The rig is set to depart for Sarawak shortly after its dry-dock stay in Singapore since June 24. Upon arrival, Naga 2 will commence a development drilling operation. Additionally, Velesto received a "letter of award" for the Naga 3 rig, which is scheduled for deployment in Vietnam from September to November. The company has yet to reveal the contract's value, noting that this assignment precedes the rig's SPS planned for early next year.

$SIGN (7246.MY)$, a kitchen cabinet innovator, is advancing its growth strategy by aiming to list two subsidiaries on the ACE Market of Bursa Malaysia. This news comes as the firm reports a 50% reduction in its latest quarterly net income. The subsidiaries poised for listing are Space Alliance Contracts Sdn Bhd (SACSB), specializing in renovation, and Zig Zag Builders (M) Sdn Bhd, their commercial interior fit-out division. M&A Securities has been selected to guide and sponsor these anticipated public offerings.

$TM (4863.MY)$ reported a 30.3% drop in net profit for 2QFY2024 to RM396.4 million, down from RM568.7 million in the comparable period last year. This decline was primarily attributed to a one-time tax losses recognition in the prior year. The company's quarterly revenue experienced a slight dip of 1.7% year-on-year, reaching RM2.91 billion compared to RM2.96 billion, with declining voice services overshadowing the steady revenue from internet and data services. Nonetheless, Telekom Malaysia Bhd increased its quarterly dividend to 12.5 sen per share, up from 9.5 sen the previous year.

$TIMECOM (5031.MY)$ reported a decrease in net profit for the second quarter of fiscal year 2024, recording RM99.05 million, down from RM2.26 billion in the previous year, largely due to the absence of the prior year's gains from the divestment of its AIMS data center business. Despite the drop in profit, the company experienced a 7.53% increase in quarterly revenue, reaching RM418.49 million, up from RM389.2 million, attributed to a surge in data product revenue from retail customers. The group announced a special interim dividend of 18.93 sen per share, which shows an increase from 16.25 sen distributed during the same period last year.

$HAPSENG (3034.MY)$ saw its net profit for the same period nearly triple to RM27.67 million, up from RM9.42 million a year earlier. This significant rise was fueled by an increase in the average selling price of palm products, a higher sales volume of crude palm oil (CPO), and reduced operating expenses. The company's revenue climbed by 8.31% to RM182.82 million, marking its highest since the second quarter of fiscal year 2022, which had revenues of RM246.86 million. Hap Seng Plantations also declared a first interim dividend of 1.5 sen per share, with payment scheduled for September 24.

$GCB (5102.MY)$ witnessed its net profit for the second quarter of fiscal year 2024 (2QFY2024) more than double to RM67 million, up from RM28.13 million in the prior year, propelled by heightened cocoa product prices and a boost in cocoa solids sales volume. The company saw revenue climb by 91.56% to RM2.22 billion, compared to RM1.16 billion previously, evidencing the influence of these trends.

$BIMB (5258.MY)$, the nation's premier Islamic banking institution, recorded a nearly static net profit for 2QFY2024 at RM137.17 million, a slight increase from RM136.14 million year-on-year. This stability in earnings came despite a revenue uptick to RM1.15 billion from RM1.12 billion.

$HLIND (3301.MY)$ reported a 41.9% rise in net profit for the final quarter of FY2024 (4QFY2024), reaching RM98.33 million, up from RM69.29 million a year earlier. This growth is attributed to robust motorcycle sales and the strong performance of an associate company. Quarter revenue saw a marginal increase to RM773.66 million from RM767 million in the same period last year. The uptick in motorcycle sales was slightly offset by the absence of revenue from the recently divested fibre cement board segment. The annual net profit for the company increased by 33.5% to RM387.89 million, compared to RM290.61 million in the previous fiscal year, buoyed by a favorable sales mix yielding improved margins, a RM25 million insurance payout for flood damages in FY2022, and an RM18.7 million gain from the disposal of the fibre cement board division. However, annual revenue dipped by 8.9% to RM3.11 billion, down from RM3.42 billion, partly due to a deceleration in the motorcycle segment during the first three quarters of the year.

$BJLAND (4219.MY)$ faced a net loss of RM79.91 million in the fourth quarter of FY2024, contrasted with a net profit of RM51.91 million in the prior year, amidst rising operational costs in its segments and affiliates. Despite a marginal rise in quarterly revenue by 0.72% to RM1.96 billion from RM1.94 billion in 4QFY2023, the group's subsidiary STM Lottery Sdn Bhd achieved higher sales per draw and facilitated an extra draw (41 draws versus 40 previously). For FY2024, the company reported a net loss of RM90.20 million, marking a downturn from FY2023's net profit of RM147.30 million, despite revenue growing by 4.63% to RM7.61 billion.

$SKPRES (7155.MY)$, an electronic manufacturing services provider, witnessed a 31.3% net profit surge to RM28.34 million in 1QFY2025, up from RM21.59 million, bolstered by improved cost efficiencies and increased sales. The firm's revenue climbed 17.1% to RM505.53 million compared to RM431.61 million in the same quarter the previous year.

$AJI (2658.MY)$ enjoyed a net profit increase of 54.99% to RM18.93 million in 1QFY2025 from RM12.21 million the year prior, with both revenue and finance income experiencing growth. The food and seasoning entity's revenue escalated by 15.42% to RM171.44 million in the latest quarter from RM148.53 million in 1QFY2024, propelled by enhanced performance in both consumer and industrial business sectors.