MY Morning Wrap | Top Glove's Q2 Net Loss Narrows Despite Lower Revenue, Expects Return to Profit in August

Markets climbed Wednesday after the FOMC rate decision, which went as planned: no changes were announced for the Federal Funds Target Rate of 5.25-5.5%.With preliminary closing figures, all three major indexes were on track to close at all-time highs. The $S&P 500 Index (.SPX.US)$ climbed 0.89% to 5,224, an all-time intraday and closing high. The $Dow Jones Industrial Average (.DJI.US)$ climbed 1.03% to 39,511, an all-time closing high, and the $Nasdaq Composite Index (.IXIC.US)$ climbed 1.25% to 16,369, on track to a closing high.

$TOPGLOV (7113.MY)$: Top Glove Corp Bhd's net loss for the second quarter ended Feb 29, 2024, narrowed to RM51.19 million, despite lower revenue, as customers placed new orders following the depletion of excess inventory. For the cumulative six months, its net loss also narrowed, and the group is keeping to its target to return to profit as early as August, as demand for gloves continues to pick up after two years of inventory destocking due to excess capacity built up during the Covid-19 pandemic. The group is expecting its revenue to increase by more than 20% in its 3QFY2024 ending May 31, due to increasing sales for March and April, as well as an upward adjustment of the average selling price of gloves.

$YINSON (7293.MY)$: Yinson Holdings Bhd has proposed a private placement of 120 million new shares at a fixed issue price of RM2.36 per share, to raise RM283.2 million. The proceeds will primarily be used to facilitate the group's energy transition and for expansion of its renewable energy and green technology business. The deal, done after a one-for-one bonus issue, was further sweetened by three free detachable warrants with every seven rights shares subscribed, at the exercise price of RM2.29 apiece.

$HIBISCS (5199.MY)$: The Fyne Field oil field development licence for Hibiscus Petroleum Bhd's unit has been extended by 30 months by the UK's North Sea Transition Authority (NSTA). The extension request for the second term of the licence from March 31, 2024, to Sept 30, 2026, was approved by NSTA. Hibiscus’ indirect wholly-owned subsidiary Anasuria Hibiscus UK Ltd owns a 42.5% stake in the licence, with Ping Petroleum UK Plc, an indirect subsidiary of Dagang NeXchange Bhd, holding another 42.5% interest. Rapid Oil Production Ltd owns the remaining 15%.

$SCIENTX (4731.MY)$: Scientex Packaging (Ayer Keroh) Bhd’s net profit for the second quarter declined 40.06% mainly due to lower revenue, higher electricity costs, and changes in product mix. Net profit for the three months ended Jan 31, 2024, declined to RM8.02 million, while revenue fell 11.2% to RM175.84 million on lower demand from its export markets. For the first half of FY2024, the group’s net profit dropped 38.7% to RM15.72 million from RM25.65 million a year ago as revenue decreased by 15.3% to RM348.82 million from RM411.98 million.

$EWINT (5283.MY)$: Eco World International Bhd (EWI) returned to a net profit of RM182,000 for the first quarter ended Jan 31, 2024 (1QFY2024), after nine consecutive quarters of losses. Revenue also increased 41.6% to RM31.67 million from RM22.37 million previously, driven by the sale of higher priced commercial units. Earnings for 1QFY2024 were boosted by foreign exchange gains due to the appreciation of the British pound against the Malaysian ringgit as a result of the repayment of advances made by its joint venture company Ecoworld-Ballymore and the conversion of British pound-denominated bank balances.

$FM (7210.MY)$: FM Global Logistics Holdings Bhd is acquiring two additional plots of freehold land totalling 5.66 acres in the Setia Alaman Industrial Park, Klang, from property developer Petaling Garden Sdn Bhd for RM37.72 million. This comes after the international freight services provider's recent announcement in January that it was buying 5.68 acres of land in the same industrial park from Petaling Garden, also at RM153 per sq ft, for RM37.86 million. Petaling Garden is a wholly-owned subsidiary of I&P Group Sdn Bhd, which is in turn wholly-owned by S P Setia Bhd.

$SCGM (7247.MY)$: SCGM Bhd's substantial shareholders are injecting their agriculture-related business into the cash company as part of plans to regularise the listed entity after disposing of its core business back in 2022. The company has entered into a heads of agreement (HOA) to acquire Eramas Global Group Sdn Bhd from a group of shareholders at a price to be determined. The proposed acquisition is deemed a related party transaction because the selling shareholders collectively hold a 24.15% stake in SCGM. The company is proposing to satisfy the purchase consideration either by way of cash or issuance of new shares at an issue price of 61.5 sen apiece.