MY Morning Wrap | Malaysia's Inflation Moderates to 2% in July

Stocks moved between gains and losses after Powell's speech, before closing higher. $S&P 500 Index (.SPX.US)$ added 0.7%, with all 11 sectors posting gains. Some investors said the choppy trading was likely because of lower summer trading volumes, with many on vacation. $Dow Jones Industrial Average (.DJI.US)$ climbed 0.7%, and the $Nasdaq Composite Index (.IXIC.US)$ rose 0.9%.

$TENAGA (5347.BMS)$ : Tenaga Nasional Bhd's (TNB) net profit slumped 62.41% to RM327.9 million for 2QFY2023 from RM872.2 million a year ago. This was mainly contributed by negative fuel margins and foreign exchange translation losses, said the utility giant. Quarterly revenue rose marginally by 3.78% to RM13.32 billion, from RM12.84 billion in 2QFY2022, on the back of a 3.4% increase in electricity sales to RM842.1 million, with a demand growth of 2%. The group has approved an interim dividend of 18 sen per share for FY2023.

$IHH (5225.BMS)$ : IHH Healthcare Bhd has upped its stake in Ravindranath GE Medical Associates Private Ltd (RGE) to 98.17% from 73.64%, following shares acquisition for a cash consideration of INR 7,400 million (RM415 million). The acquisition was done through IHH’s wholly-owned subsidiary Gleneagles Development Private Ltd (GDPL), which had on Friday entered into an agreement to buy out the entire remaining 24.53% stake held by Dr Ravindranath Kancherla and his affiliates (collectively known as Dr Ravi Group) in RGE. There is a remaining 1.83% stake in RGE that is held by minority shareholders. The move came as IHH seeks to strengthen RGE group’s operations and expand its leading market position, as part of IHH’s commitment to the Indian healthcare sector.

$PETGAS (6033.BMS)$ : Petronas Gas Bhd's (PetGas) net profit jumped 22% to RM485.37 million for the second quarter ended June 30, 2023 (2QFY2023) from RM396.5 million posted in the same period a year ago, lifted by higher gross profit coupled with higher share of profit from joint venture companies. The stronger profit was also attributed to higher interest income from fund investments and lower exposure from foreign exchange movement following early settlement of USD lease liabilities for floating storage units at liquefied natural gas (LNG) regasification terminal in Sungai Udang, Melaka. Quarterly revenue rose 8.8% to RM1.64 billion from RM1.5 billion in the same period last year, driven by revenue from the utilities segment on the back of higher product prices. The group also declared a second interim dividend of 16 sen per share amounting to RM316.6 million, payable on Sept 22.

$KLK (2445.BMS)$ : Kepong Bhd (KLK) saw a sharp decline in net profit for the third quarter ended June 30, 2023 (3Q23), with a decrease of 84.9% to RM84.1 million compared to RM558.27 million in the same period last year. The drop was primarily due to a 26.5% decrease in revenue, which fell to RM5.11 billion from RM6.96 billion. The company’s plantation segment profit was severely affected, dropping by 78.8% to RM125.9 million due to lower selling prices of crude palm oil (CPO) and palm kernel (PK), along with higher CPO production costs.

$TM (4863.BMS)$ :Telekom Malaysia Bhd’s (TM) net profit climbed 50.43% to RM568.74 million for 2QFY2023 against RM378.06 million a year ago, its highest quarterly earnings since 4QFY2011. In 4QFY2011, TM registered RM598.3 million in net profit. The higher earnings for the quarter under review was due to lower net finance cost and the recognition of tax credits from the utilisation of previously unrecognised tax losses. Quarterly revenue rose marginally to RM3.1 billion from RM3.09 billion for 2QFY2022, as TM saw an increase in fixed broadband subscribers, thanks to Unifi’s expansion. Revenue growth was also contributed by higher demand for domestic and international data services. The company declared a dividend of 9.5 sen per share, to be paid on Sept 29.

$KPJ (5878.BMS)$ : KPJ Healthcare Bhd, through its premier educational institution KPJ Healthcare University (KPJU) recently signed Memoranda of Understanding (MoU) with research institutions and industry leaders to affirm its commitment to enhance medical and healthcare research. KPJ Healthcare in a statement said the MoU with Arcadia Lifesciences Sdn Bhd, University of Southampton Malaysia and Alpro Pharmacy Sdn Bhd alongside a Letter of Intent with Universiti Kebangsaan Malaysia’s Medical Molecular Biology Institute (UMBI) reflect KPJ’s dedication to advance precision medicine, academic advancement, healthcare education and pioneering medical research.

$LPI (8621.BMS)$ : LPI Capital Group Bhd’s net profit rose 19.42% to RM63.94 million in the second quarter ended June 30, 2023 (2QFY2023), from RM53.52 million a year ago, driven by higher earnings contribution from the general insurance segment amid higher investment return. Revenue came in at RM462.36 million, 14.39% higher than the RM404.22 million reported for 2QFY2022, on the back of higher insurance revenue. The insurer, founded by the late banking magnate Tan Sri Teh Hong Piow, declared a first interim dividend of 26 sen per share, compared to 25 sen last year.

$AFFIN (5185.BMS)$ : Affin Bank Bhd registered a net profit of RM113.23 million or 4.98 sen for 2QFY2023, a 22.93% decline from RM146.91 million or 6.92 sen a year prior. The lower earnings was due to lower net interest income and Islamic banking income amounting to RM76.2 million, higher allowances for impairment losses of RM11.9 million, and higher overhead expenses of RM7.3 million. Quarterly revenue fell by 12.83% to RM504.86 million from RM579.19 million a year ago.

$ARMADA (5210.BMS)$ : Lower contribution from the Armada Kraken floating production storage and offloading (FPSO) pushed Bumi Armada Bhd's net profit down 36.23% to RM118.77 million in 2QFY2023 from RM186.25 million a year earlier. This was partially offset by gains from the sale of the Armada Claire FPSO and the last remaining offshore support vessels during the quarter, said the offshore energy facility and service provider. The group's quarterly revenue fell 28.64% to RM441.32 million from RM618.43 million.

$PADINI (7052.BMS)$ : Padini Holdings Bhd, which posted a 26% year-on-year decline in net profit for the fourth quarter ended June 30, 2023 (4QFY2023), expects retail business to remain challenging as inflation takes a toll on consumers’ spending power. The group’s net profit dropped 26.02% to RM57.31 million in 4QFY2023 from RM77.46 million a year earlier, due to higher expenses as a result of rising salary and incidental expenses, as well as higher finance costs. Revenue for the quarter inched down 1.01% to RM476.33 million from RM481.2 million previously due to lower sales in existing stores. The group declared a first interim dividend of 2.5 sen per share, payable on Sept 29.

$SOP (5126.BMS)$ : Sarawak Oil Palms Bhd's net profit fell 68.8% to RM48.12 million in 2QFY2023 from RM154.46 million a year ago, due to lower prices of palm products coupled with higher production costs. Revenue dropped 16% to RM1.18 billion from RM1.4 billion in 2QFY2022.