MY Morning Wrap | Sime Darby's 2Q Net Profit Surges to RM2.29 Billion on Disposal of Healthcare Division

Stocks closed higher on Wednesday after staying low in preparation for Nvidia earnings that beat expectations. The FOMC meeting minutes showed that most members expressed caution toward cutting rates too early, but the same number believed that rates had reached their height for this tightening session. The $S&P 500 Index (.SPX.US)$ rebounded and climbed 0.13%, the $Dow Jones Industrial Average (.DJI.US)$ climbed 0.13%, and the $Nasdaq Composite Index (.IXIC.US)$ reversed direction but still fell 0.32%.

$PCHEM (5183.MY)$: Petronas Chemicals Group has signed a memorandum of understanding with Sarawak Petchem to conduct a joint feasibility study to develop a low-carbon ammonia and urea plant in Bintulu. The two companies will conduct a joint comprehensive study on the technical and commercial aspects, among other considerations, to meet rising demand for cleaner energy solutions by tapping into renewable energy potential within the region. This confirms a report by The Edge, which cited sources that Petronas and the Sarawak state government will sign a preliminary agreement to facilitate discussions and assess the feasibility of the project.

$SIME (4197.MY)$: Sime Darby's net profit for the second quarter ended December 31, 2023, surged to RM2.29 billion from RM389 million, mainly due to the RM2 billion gain on the disposal of Ramsay Sime Darby Health Care in December 2023. The conglomerate's revenue for the quarter rose to RM15.55 billion from RM11.29 billion, and earnings per share rose to 33.60 sen from 5.70 sen. Sime Darby declared a dividend of three sen per share to be paid on March 27. For the cumulative six months ended December 31, 2023, Sime Darby's net profit jumped to RM2.88 billion from RM596 million a year earlier, on the back of revenue of RM29.53 billion, versus RM23.47 billion previously.

$SUNWAY (5211.MY)$: Sunway Bhd recorded a 29.8% YoY jump in net profit to RM265.9 million in the fourth quarter for the financial year 2023, supported by improved contributions from its property investment, construction, trading and manufacturing, and quarry businesses. The company's quarterly revenue expanded by 22% to RM1.87 billion, resulting in its highest annual revenue of RM6.14 billion since its listing in 2011. Sunway declared a second interim dividend of 3.5 sen per share for FY2023, bringing its payout for the year to 5.5 sen. For the full FY2023, the group's net profit rose 10.3% to RM737.8 million, while revenue climbed 18% to its record high of RM6.14 billion.

$KLK (2445.MY)$: Kuala Lumpur Kepong Bhd (KLK) has redesignated its CEO Tan Sri Lee Oi Hian as executive chairman after the retirement of Tun Raja Muhammad Alias Raja Muhammad Ali as the group's non-executive chairman. Lee is also the chairman of KLK's controlling company, Batu Kawan Bhd. The Lee family owns over 55% of Batu Kawan, which has a 47.16% stake in KLK.

$RENEUCO (7130.MY)$: Reneuco Bhd and Citaglobal Bhd's consortium has secured a 30-year concession to supply electricity to the East Coast Rail Line (ECRL). The consortium will develop transmission and distribution interconnection facilities valued at RM600 million, as well as operate and maintain the assets over a 30-year period. Citaglobal holds a 60% stake in the consortium, while Reneuco holds the remaining 40%. The supply contract is exclusive and will provide electricity and renewable energy of up to 100MW to the ECRL network for both traction and non-traction systems.

$SUNCON (5263.MY)$: Sunway Construction Group Bhd (SunCon) has secured a RM720.99 million shopping mall project in the Kinta district in Perak through a related party transaction. Sunway Construction Sdn Bhd, a wholly-owned subsidiary of SunCon, received the contract from Sunway Bhd's indirect subsidiary, Sunway Lost World Water Park Sdn Bhd, for earthworks and main building works of a six-floor shopping complex, cinema, and shops. The project is expected to begin on March 1 and be completed by January 31, 2027. This new project brings SunCon's total secured new projects for the current year to RM831 million.

$APEX (5088.MY)$: Apex Healthcare Bhd reported a 42.41% YoY decline in net profit for the fourth quarter, but declared a special dividend following a record year thanks to a disposal gain. The company's net profit for the three months ended December 31, 2023, was RM20.06 million from RM34.84 million, largely due to a lower share of earnings from associates. However, revenue for the quarter rose 8.85% YoY to RM240 million from RM220.49 million. The company's net profit for FY2023 tripled to a record high of RM397.99 million compared to RM100.98 million in FY2022, thanks to a one-off gain of RM321.7 million from the partial stake disposal of Straits Apex Sdn Bhd. Full-year revenue rose 6.66% to RM936.17 million against RM877.74 million in FY2022. Apex Healthcare declared a final dividend of 2.5 sen per share and a special dividend of 20 sen per share, bringing the total dividend per share for FY2023 to 25 sen.