MY Morning Wrap | Strategic DDI Can Attract More FDI, Driving Economic Growth - PM Anwar

The $S&P 500 Index (.SPX.US)$ declined 0.3%, while the $Dow Jones Industrial Average (.DJI.US)$ retreated 0.5%, or 175 points. The $Nasdaq Composite Index (.IXIC.US)$ added 0.1% as tech heavyweights including $Apple (AAPL.US)$ and $Microsoft (MSFT.US)$ defied the downdraft.

$TENAGA (5347.MY)$ : The High Court on Tuesday granted Tenaga Nasional Bhd's judicial review application to set aside RM3.977 billion in tax assessment for the years 2015 to 2017. Judge Datuk Wan Ahmad Farid Wan Salleh agreed with TNB’s argument that it is in the business of manufacturing electricity and hence entitled to claim reinvestment allowance on the capital expenditure that it incurred, including for the three assessment years, to expand, modernise and automate its business. It is understood that this is one of the biggest tax disputes decided by the courts. The energy company was also successful in its judicial review application in February last year to set aside a tax assessment of RM1.812 billion from IRB for 2018, on similar reinvestment allowance provisions. TNB filed the judicial review application to challenge the RM3.977 billion assessment in Dec 2019, and obtained leave in May 2020 to have the merits of its application be heard.

$PCHEM (5183.MY)$ : Petronas Chemicals Group Bhd's net profit slumped 66% to RM628 million for the second financial quarter ended June 30, 2023 (2QFY2023), from RM1.87 billion a year ago, in line with lower earnings before interest, tax, depreciation and amortisation and share of profit from joint ventures and associates. Revenue for the quarter rose to RM7.11 billion, versus RM6.58 billion previously, largely due to higher sales volumes and inclusion of revenue from a recently acquired subsidiary. PetChem declared a first interim dividend of eight sen per share to be paid on Sept 21.

$IOICORP (1961.MY)$ : IOI Corp Bhd's net profit dropped 93.13% to RM37.2 million in its fourth quarter ended June 30, 2023 (4QFY2023), from RM541.8 million a year earlier, mainly due to lower contribution from both its plantation as well as resource-based manufacturing segments. The lower net profit was also due to higher net foreign currency translation loss on foreign currency denominated borrowings which tripled to RM175.7 million from RM58.3 million previously. It declared a second interim dividend to be paid on Sept 22 of five sen per share, down from the eight sen it announced for the same quarter last year.

$AEON (6599.MY)$ : AEON Co (M) Bhd's net profit declined 36.15% to RM30.18 million for 2QFY2023, from RM47.28 million a year earlier, mainly due to lower revenue and higher operating costs. Quarterly revenue slipped 5.7% to RM1.03 billion from RM1.1 billion last year after its retail business' topline decreased, mainly due to pent-up spending for the festivities in the corresponding quarter in FY2022.

$MATRIX (5236.MY)$ : Matrix Concepts Holdings Bhd's net profit for the first quarter ended June 30, 2023 (1QFY2024) rose 37.3% to RM64.6 million from RM47.04 million a year ago, as it benefitted from improved speed of construction activity with labour shortage issues resolved. Revenue grew 44.6% to RM331.43 million in 1QFY2024 from RM229.3 million in 1QFY2023, mainly driven by higher contribution from the group’s property development division, which rose by 46.4% to RM321.3 million in the current quarter from RM219.4 previously. The company declared a first interim dividend of 2.5 sen per share in respect of FY2024, to be paid on Oct 5, 2023.

$TALIWRK (8524.MY)$ : Taliworks Corp Bhd posted a 6.82% increase in net profit for 2QFY2023 to RM11.8 million or 0.58 sen per share, from RM11.05 million or 0.55 sen per share a year earlier, as flattish revenue was boosted by a one-off gain from disposal of property, higher fair value and foreign exchange gains. Quarterly revenue rose a marginal 3.84% to RM89.03 million from RM85.73 million previously as improved contributions from the group’s water treatment and supply, toll highway, and renewable energy segments were offset by lower revenue from its construction and other segments (investment holding and other non-core segments). The group declared a second interim dividend of 1.65 sen per share — amounting to a payout of about RM33 million on its share base of 2.02 billion shares — to be paid on Sept 29.

$TMCLIFE (0101.MY)$ : TMC Life Sciences Bhd's net profit dropped 43.56% to RM13.25 million for 4QFY2023 from RM23.47 million a year earlier, due to lower deferred tax credits. This is despite quarterly revenue increasing by 19.57% to RM84.65 million from RM70.8 million, on the back of an increase in capacity at Thompson Hospital Kota Damansara and the recovery of the group's fertility business. TMC Life declared a total dividend of 0.84 sen for FY2023, including a special dividend of 0.42 sen, to be paid on Jan 3, 2024.

$SCOMNET (0001.MY)$ : Supercomnet Technologies Bhd's (Scomnet) net profit for 2QFY2023 fell 22.36% to RM7.3 million, from RM9.4 million a year earlier, due to lower revenue from all its segments, higher electricity tariff and recognition of RM790,000 for fair value expense related to share options granted under employees share option scheme. Consequently, its quarterly revenue declined 16.38% to RM33.33 million from RM39.86 million due to the decrease in demand from all three segments, especially for the industrial segment.

$IRIS (0010.MY)$ : Iris Corp Bhd has written to the Home Ministry to dispute the “invalid and unlawful” termination of the group's contract for the National Integrated Immigration System (NIISe). Iris said the letter was issued on Tuesday through its wholly owned subsidiary, Iris Information Technology Systems Sdn Bhd (IITS), after the group obtained independent legal advice. IITS had received the notice of termination dated Aug 10. Three months earlier, the ministry had extended the NIISe contract by 12 months from Sept 1, 2025 to Aug 31, 2026. The contract worth RM1.16 billion was first awarded to IITS in January 2021 for a period of 54 months, from March 1, 2021 to Aug 31, 2025.

$STAR (6084.MY)$ : Star Media Group Bhd's net profit more than halved to RM791,000 or 0.11 sen per share in 2QFY2023 compared with RM1.81 million or 0.25 sen per share recorded in the previous year's corresponding quarter. The publisher of the nation's largest English-language newspaper said the group's operating cost for the quarter rose 11.3% to RM60.95 million from RM54.75 million a year ago, increasing at a faster pace than revenue growth. Revenue for 2QFY2023 advanced 7.7% to RM58.02 million from RM53.87 million.