MY Morning Wrap | Public Bank Commits to Sustainable Financing, Mobilizes Over RM53 Billion Since 2020

Shortly after the close, the US stock market showed a mixed performance with the $Dow Jones Industrial Average (.DJI.US)$ up by 0.46% while the $Nasdaq Composite Index (.IXIC.US)$ fell by about 0.21%. The $S&P 500 Index (.SPX.US)$ traded flat. On the day, approximately 7,100 equities declined while just 5,600 climbed.

$PBBANK (1295.MY)$ : Public Bank Bhd (PBBANK) has mobilized more than RM53 billion in sustainable finance since 2020, covering financing portfolios such as energy-efficient vehicle financing, affordable home financing, corporate loans, and green financing facilities. The bank is committed to driving sustainable best practices in line with its Sustainability Roadmap, targeting to mobilize a total of RM100 billion in sustainable finance by 2030. PBB will continue to develop and promote financial products and services that integrate environmental, social, and governance considerations into various aspects of banking while proactively incorporating climate risk into its credit assessment process and identifying new green financing opportunities. The bank's total gross loans and financing grew by 5.9% to RM399 billion as at end-2023, and it reported a net profit of RM6.65 billion for the financial year ended Dec 31, 2023.

$AXIATA (6888.MY)$: Axiata Group and PT Sinar Mas have sought permission from the Indonesian government to merge their telco units, PT XL Axiata and PT Smartfren Telecom, according to the communications minister. The planned merger would further consolidate companies in the telecoms sector into just three big players. Bloomberg previously reported the planned merger to create a US$3.5 billion entity, citing sources. However, the communications minister said he had no knowledge of the expected value of the prospective new entity. Executives from both XL Axiata and Smartfren had multiple meetings with the minister during which they mentioned the merger plan.

$DUFU (7233.MY)$: Dufu Technology Corp Bhd is hopeful that it is navigating the tail end of an unprecedented downturn in the storage sector after experiencing a dull 2023, which it said was the lowest point of the hard disk drive (HDD) market. The company believes there is a modest demand increase in precision machining of HDD and production of sheet metal, as well as stamping equipment and components, segments within its key operational domains. Dufu saw its net profit plunge 59.3% year-on-year to RM4.4 million for the first quarter ended March 31, 2024, while revenue fell 22% to RM57.9 million. The decrease in profits was attributed to the reduction in revenue from HDD components and higher overhead costs incurred during the quarter in review, according to a filing to Bursa Malaysia.

$CTOS (5301.MY)$: CTOS Digital Bhd had a slow start to the financial year 2024 (FY24) due to seasonality and delayed projects, but analysts remain upbeat about stronger quarters ahead. Hong Leong Investment Bank (HLIB) Research said CTOS' first-quarter (1Q24) core profit only increased 3% year-on-year (y-o-y) despite revenue rising by 20%, and the credit reporting agency also reported a weaker first-quarter sequentially. Nevertheless, HLIB Research said the results for 1Q24 were in line with expectations, and the research house maintained its forecast. UOB Kay Hian Malaysia Research also downgraded its call on CTOS to "hold" following recent positive share price action. Despite the weakness in 1Q24, CTOS management is confident of delivering a 20% to 25% y-o-y net profit growth in 2024, according to analysts.

$MNRB (6459.MY)$: MNRB Holdings Bhd aims to continue pursuing growth in overseas markets and venture into specialised business lines for its reinsurance and retakaful segment. The insurer and reinsurer reported a net profit of RM428.3 million for the financial year ended March 31, 2024, up from RM142.65 million in the previous year on the back of higher revenue of RM3.6 billion versus RM2.97 billion. MNRB's total financial assets grew by 12.8% to RM11.4 billion in FY24 compared to RM10.1 billion in the previous year, reflecting prudent capital management and robust investment growth. The group's aim is to accelerate business growth and scale while enhancing operational efficiency by leveraging digitalisation measures to offer excellent customer experience and easy access to transactional online platforms. MNRB expects a challenging economic environment locally and globally due to inflationary pressures and geopolitical risks.

$OCK (0172.MY)$: OCK Group's foray into Laos is deemed as a good venture given the robust growth prospects. The company has entered into a 15-year build-and-lease tower agreement with Best Telecom Co Ltd, a telecommunication player that was awarded the 5G spectrum in Laos. Kenanga Research expressed optimism that the move will allow OCK to expand its tower portfolio in various markets, including Malaysia and Vietnam. The research house noted that there is minimal counter-party risk as Laos' Ministry of Finance is one of the key shareholders in Best Telecom. OCK was awarded several site clusters located within the metropolitan area of Vientiane and a few major cities to kickstart the deployment, according to Kenanga Research.

$ARTRONIQ (0038.MY)$: Artroniq's 60% owned subsidiary, Fujim Digital Sdn Bhd, has proposed to dispose of a piece of land and a unit of single-storey semi-wooden house in Ayer Itam, Penang for RM1.8 million. Artroniq said the build-up area of the land and property is approximately 6,011 square feet, and the proceeds from the proposed disposal will be used to discharge any charges created on the property and the balance for working capital. The proposed disposal will enable the company to reduce the capital employed and pare down the company's borrowings, according to Artroniq.