MY Morning Wrap | Sime Darby Property to Build and Lease Hyperscale Data Centre

On Thursday, despite Nvidia seeing a $221 billion boost in its market cap, stocks fell, marking the Dow's worst day of 2024. The $Dow Jones Industrial Average (.DJI.US)$ closed 605 points lower, down 1.5%, while the $Nasdaq Composite Index (.IXIC.US)$ lost 0.4% and the $S&P 500 Index (.SPX.US)$ was down 0.27%.

$SIMEPROP (5288.MY)$: Sime Darby Property Bhd has announced its entry into the data centre segment with a deal worth RM2 billion to build and lease out a hyperscale data centre at its Elmina Business Park. Construction is set to begin in Q2 2024 and be completed by 2026. Following completion, the group will sign a 20-year lease with Pearl Computing Malaysia, a wholly owned unit of Singapore-based Raiden APAC, with options to renew for two additional five-year terms. Separately, the group's managing director, Datuk Azmir Merican Azmi Merican, said he is confident of continuing to defend its profit margin via a strategic product mix. The group's financial result for Q1FY2024 serves as a strong testament to the effectiveness of having a good product mix as a tool to fortify margins.

$SIME (4197.MY)$: Sime Darby Bhd has reported a 41.7% increase in net profit for the third quarter of FY2024, driven by higher sales and income from newly acquired businesses. Net profit for the quarter was RM340 million, up from RM240 million a year earlier, while revenue surged 63.4% to RM18.84 billion, from RM11.53 billion previously. The company, which assembles motor vehicles and sells heavy equipment, benefited from a recovery in the automotive sector and strong demand for its products and services.

$PBBANK (1295.MY)$: Public Bank Bhd has lost a case against a house buyer who sued the bank for terminating a loan facility agreement after the first disbursement. The Kuala Lumpur High Court found that the bank failed to provide documents of purported falsified supporting documents and claims that the customer inflated his income, which resulted in the facility and house purchase being terminated. As a result, the court has ordered the bank to pay close to RM65,000 in damages to the house buyer, in addition to a sum that will be decided after assessing the man's loss of the property and his subsequent loss of reputation on being blacklisted by the Central Credit Reference Information System and CTOS data system.

$YTL (4677.MY)$: YTL Corp Bhd has reported a 19.8% increase in net profit for its third financial quarter ended March 31, 2023, as all of its business segments reported higher earnings. The conglomerate's net profit rose to RM496.23 million from RM414.14 million a year earlier, despite revenue coming in slightly lower by 1.7% at RM7.21 billion compared with RM7.33 billion previously. The company's two biggest contributors were utilities through the listed YTL Power International Bhd, in which it has a 49.08% direct and a 6.49% indirect stake, and cement and building materials through its 78.58% indirectly owned Malayan Cement Bhd.

$INARI (0166.MY)$: Inari Amertron Bhd, Malaysia's biggest outsourced semiconductor assembly and test firm, has reported a 29% increase in net profit for its 3QFY2024, thanks to higher loading volume and currency gains. Net profit rose to RM73.72 million from RM57.36 million a year earlier, while revenue for the quarter surged 26% to RM347.63 million from RM275.6 million. The company expects "continued positive results" for FY2024 from improvements in production capacity and utilization, operational efficiencies, and a strong US dollar.

$KLCC (5235SS.MY)$: KLCCP Stapled Group, which comprises KLCC Property Holdings Bhd and KLCC Real Estate Investment Trust, has reported a 4.1% increase in net profit for the first quarter ended March 31, 2024. The group's net profit rose to RM188.03 million from RM180.56 million a year earlier, on the back of steady performance across its business segments. Quarterly revenue also rose 7.4% to RM408.9 million from RM380.74 million. The group declared a dividend of nine sen per stapled security for the quarter, which is 5.9% higher than the same period last year and payable on June 28.

$BAT (4162.MY)$: British American Tobacco (Malaysia) Bhd, or BAT Malaysia, has reported a 34.46% year-on-year lower net profit for the first quarter of 2024. The decline was due to higher operating expenses as the tobacco group transitions towards a multicategory business, coupled with inflationary pressures and higher cost of vapour products. The group's net profit for the quarter ended March 31, 2024 was RM29.99 million, the lowest level seen in over two decades since 4QFY2000, against RM40.32 million a year earlier. However, quarterly revenue grew 5.57% to RM411.97 million from RM390.23 million in 1QFY2023, thanks to its new vapour brand Vuse, which was introduced to the market in the second half of last year. The group has declared a first interim dividend of 10 sen per share, the lowest ever declared, amounting to RM28.55 million for FY2024, payable on June 20.