MY Morning Wrap | Sunway Construction's Subsidiary Lands RM418 Million Sub-Contract for Data Centre M&E Works

The U.S. stock market experienced a second consecutive day of declines, largely due to a sell-off in the semiconductor sector that occurred on Wednesday. By the end of trading on Thursday, the S&P 500 and Nasdaq Composite had slipped into negative territory for the week, while the $Dow Jones Industrial Average(.DJI.US)$, despite being the hardest hit with a 1.19% drop, managed to stay in the green on a weekly basis. The $Nasdaq Composite Index(.IXIC.US)$ shed 0.82%, and the $S&P 500 Index(.SPX.US)$ saw a modest retreat of 0.86% by the closing bell at 4 pm ET. This two-day pullback reflects ongoing market volatility and investor caution.

$SUNCON(5263.MY)$: Sunway Construction Group Bhd, listed on the Kuala Lumpur Stock Exchange as SUNCON, has secured a significant RM417.8 million sub-contract in connection with a previously awarded RM747.8 million contract from a prominent US-based multinational technology company to build a data centre in Selangor. This lucrative sub-contract for mechanical and electrical works has been granted to Sunway Engie DC Sdn Bhd, a joint venture between Sunway Engineering Sdn Bhd, which holds a majority 70% stake and is a fully-owned subsidiary of Sunway Construction Sdn Bhd, and Engie Services Malaysia Sdn Bhd, which owns the remaining 30% stake. Sunway Construction Sdn Bhd is an indirect wholly-owned subsidiary of Sunway Construction Group Bhd. This development marks further progress for SunCon in strengthening its foothold in the construction sector, particularly in the high-growth area of data centre development.

$GENP(2291.MY)$: Genting Plantations Bhd, a subsidiary under $GENTING(3182.MY)$ with a majority stake of 55.4%, has announced plans to expand its property development portfolio by acquiring two parcels of land in Sentul City, situated in the Bogor Regency of West Java Province, near Jakarta, Indonesia. The total cost of the acquisition is RM593 million, and the land spans an area of 152 hectares. This move into the Indonesian property market involves Genting Plantations’ indirect subsidiaries signing separate agreements with three different vendors—PT Sentul City Tbk, PT Aftanesia Raya, and PT Primatama Cahaya Sentosa—to secure the land purchase. This strategic investment by Genting Plantations signals a broadening of its business interests and a potential growth opportunity in the Indonesian real estate sector.

$MCEHLDG(7004.MY)$: MCE Holdings Bhd, a company listed on the Kuala Lumpur Stock Exchange under the symbol MCEHLDG, has secured a lucrative contract worth RM19.6 million to provide a suite of electronic and mechatronic components for Perusahaan Otomobil Kedua Sdn Bhd's (Perodua) inaugural electric vehicle (EV). The agreement entails the supply of critical components such as multimedia display units, instrument panel clusters, advanced driver assistance systems, functional switches, and interior lighting. This contract represents a significant step for MCE Holdings as it positions itself within the growing EV market and cements its relationship with Perodua, Malaysia's second national car manufacturer. The partnership highlights the advancement of the domestic automotive industry and MCE Holdings' capabilities in the evolving landscape of vehicle technology.

$CIMB(1023.MY)$: CIMB Thai Bank PCL, predominantly owned by CIMB Group Holdings Bhd at a stake of 94.83%, has reported a robust 24% increase in net profit for the second quarter of the fiscal year 2024, amounting to 668.46 million baht (approximately RM86.27 million). This performance marks a substantial improvement over the 538.75 million baht net profit recorded during the same period in the previous year. The bank's financial success has been attributed to significant gains in financial instruments and investments, alongside an overall increase in operating income. Specifically, gains from financial instruments have seen a fourfold rise to 290.06 million baht, up from 71.59 million baht, while earnings from investments have surged to 175.26 million baht, a significant leap from the previous year's 34.86 million baht. In addition to these gains, the bank's total operating income has experienced a 5.52% growth, reaching 3.51 billion baht compared to 3.33 billion baht in the corresponding quarter of the previous year. This financial update signals a positive trajectory for CIMB Thai Bank PCL, reflecting its strong operational performance and profitable financial strategies.

$PMETAL(8869.MY)$: Press Metal Aluminium Holdings Bhd (PMETAL) has signed an agreement with China's Xi'an Jiaotong University to jointly research and develop a cost-effective carbon capture and utilization (CCU) model for its manufacturing processes. Following a memorandum of understanding in August of the previous year, this collaboration seeks to create a viable CCU solution with shared intellectual property rights between the two entities. This partnership underscores Press Metal's commitment to sustainable manufacturing practices.

$FIMACOR(3107.MY)$: Fima Corp Bhd, listed on the KL stock exchange as FIMACOR, has landed a lucrative RM93.92 million contract with the Ministry of Education. This deal entrusts the group's fully owned subsidiary, Percetakan Keselamatan Nasional Sdn Bhd, with the task of printing and supplying confidential documents over a period of two years. Fima Corp, with business interests spanning manufacturing, plantation, and property management, further diversifies its portfolio with this new venture, bolstering its position in the market and aligning with its strategic growth objectives.

$EG(8907.MY)$: Malaysia-based EG Industries Bhd, trading under the ticker symbol EG on the Kuala Lumpur Stock Exchange, has announced that its wholly-owned subsidiary, SMT Technologies Sdn Bhd, has received a substantial purchase order worth US$117 million (approximately RM545.67 million). The contract, awarded by a major existing client who has not been publicly identified, is for the provision of advanced 5G photonics-related products. This significant deal highlights EG Industries’ capabilities in the electronics manufacturing services sector and underscores the company's involvement in the cutting-edge 5G technology space.

$GCE(5592.MY)$: The Kuala Lumpur Stock Exchange-listed Grand Central Enterprises Bhd (GCE) is set to temporarily suspend trading of its securities on Monday, July 22, in anticipation of a significant corporate disclosure. Specializing in the hospitality industry, Grand Central Enterprises operates five Hotel Grand Continental establishments and manages Hotel Grand Crystal. The trading halt indicates the forthcoming announcement is material and could impact the company’s share price. Investors and stakeholders are advised to watch for the forthcoming news, which could provide insights into the company's strategic direction or financial health.

$INGENIEU(5178.MY)$: KLSE-listed Ingenieur Gudang Bhd (INGENIEUR) has reported an impressive net profit of RM6.48 million for its second quarter ending June 30, 2024, marking a significant increase from the RM234,000 seen in the same quarter of the previous fiscal year. The construction firm's profit surge is largely attributed to asset disposal gains and a robust uptick in construction revenue. The quarter's revenue soared to RM12.29 million, the company's highest since the fourth quarter of FY2020, reflecting more than a twofold increase from 2QFY2023's RM4.57 million. These financial achievements have been fueled by the acquisition of new projects and enhanced construction progress recognition.

$MASTEEL(5098.MY)$: Malaysia Steel Works (KL) Bhd (MASTEEL), listed on the Kuala Lumpur Stock Exchange, has announced its intention to raise RM31.69 million through a private placement. The company plans to issue up to 90.55 million new shares, which will represent 10% of its enlarged share base, with the purpose of bolstering its working capital. The prospective investors for this placement have yet to be identified. The indicative price for the shares is set at 35 sen each, which is a 6.52% discount on the five-day volume-weighted average market price of 37.44 sen, calculated as of July 12. This strategic move aims to strengthen the company's financial position to support its operational needs.