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Investment & Market Trends

Investment & Market Trends, News

Farm Price Holdings Berhad’s 85.4% Potential Upside

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With two decades of unwavering commitment to wholesale fresh vegetable distribution, Farm Price Holdings Bhd (FPHB) stands as a pillar of reliability in the staple food industry. Positioned within the crucial narrative of food security, analysts anticipate FPHB to ride the wave of growth in the Johor-Singapore corridor. Projections for FY24-25f showcase robust bottom-line growth of 16.6-25.1%, reaching RM10.1-12.7 million, buoyed by strategic operational expansions to meet escalating customer demands. Analysts have assigned a fair value of RM0.445 for FPHB, underpinned by a forward P/E of 15.7x aligned with peers in the Packaged Foods sub-industry. Addressing current capacity constraints, FPHB is swiftly adapting to surging demand, evident in its cold room facilities operating at over 95% capacity. Short-term measures, including increased processing shifts and flexible infrastructure utilization, will ensure timely delivery of fresh produce, translating into significant top and bottom-line growth. Expansion initiatives for exponential growth include the utilization of IPO proceeds to expand SCDC, augmenting floor space by 90% by FY26. This strategic move will bolster operational efficiency, adding 54k sqft to operational areas, enhancing cold room capacity by 35%, and accommodating up to 40k pallets annually, laying a robust foundation for sustained growth. Despite challenges in FY20-22, including margin pressure due to fixed pricing contracts amidst rising vegetable costs, FPHB anticipates stable margins akin to FY23 levels, with an optimistic outlook for normalized pricing dynamics. Leveraging its track record, FPHB enjoys a competitive edge in securing new customers, particularly in Singapore. Operating from Malaysia, FPHB leverages lower production costs and SCDC’s strategic location to ensure freshness and prompt delivery, outshining its Singaporean counterparts. Ongoing discussions with potential clients underscore FPHB’s prowess in leveraging its reputation and competitive advantages for continued market penetration in Singapore. In essence, FPHB’s journey as a staple food provider epitomizes resilience and growth potential, poised to capitalize on emerging opportunities and fortify its position in the dynamic food distribution landscape.

Investment & Market Trends, News

Kawan Renergy Berhad Set to Raise RM33.0 Million in IPO En Route to ACE Market Listing

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KUALA LUMPUR: Engineering solutions provider Kawan Renergy Berhad has announced the successful launch of its prospectus, marking a significant step towards its upcoming initial public offering (IPO) and listing on the ACE Market of Bursa Malaysia Securities Berhad. Kawan Renergy Group, comprising subsidiaries Kawan Engineering Sdn Bhd and Kawan Green Energy Sdn Bhd, specializes in designing, fabricating, installing, and commissioning industrial process equipment, process plants, and renewable energy and co-generation plants. Their solutions cater to diverse industries such as food processing, oleochemical and chemical processing, oil and gas, waste recovery, power plant, and utilities. Additionally, the Group is engaged in power generation and the sale of electricity.   Managing Director Ir. Lim Thou Lai noted that the prospectus launch is a significant milestone for Kawan Renergy as it progresses towards becoming a publicly listed entity. The IPO is integral to their long-term growth strategy, facilitating additional funding to support ongoing and future projects, and expand their power generation and electricity sales segment.   Based on an Independent Market Research Report by Smith Zander International Sdn Bhd, Malaysia’s industrial process equipment industry saw substantial growth from RM15.6 billion in 2020 to RM23.5 billion in 2023, with a compound annual growth rate (CAGR) of 14.6%. With increasing foreign direct investment (FDI) inflows, industries like power generation, oil and gas, and manufacturing are expected to expand, benefiting the industrial process equipment sector. The Group is optimistic about the industry’s prospects.   Ir. Lim outlined the Group’s plans for the IPO proceeds, which include allocating a significant portion towards supplementing working capital for ongoing and future co-generation plant projects. Additionally, investments are earmarked for constructing a new biomass power plant and enhancing the production output of the Bercham Plant, a landfill biogas power plant. A portion of the proceeds will also go towards repaying bank borrowings and defraying listing expenses.   Mr. Gary Ting, Head of Corporate Finance at M & A Securities Sdn Bhd, expressed confidence in Kawan Renergy’s capability to expand its market share with the successful listing. He highlighted the potential benefits of the listing, including enhancing the Group’s reputation, expanding visibility, and attracting talent.   The IPO exercise comprises a public issuance of new ordinary shares, representing 20.0% of its enlarged share capital, as well as an offer for sale of existing shares. A portion of the new shares will be available to the Malaysian public via balloting, with allocations for eligible Directors, employees, and contributors to the group’s success. Selected Bumiputera investors approved by the Ministry of Investment, Trade and Industry will also have access to a portion of the shares.   Upon listing, Kawan Renergy’s market capitalization is estimated to be approximately RM165.0 million, based on the IPO price of RM0.30 per share and its enlarged issued shares. The Group has demonstrated robust financial performance, with revenue and net profit experiencing significant growth over the past three years.   Applications for the public issue are currently open and will close on 14 May 2024, with the Group scheduled to be listed on the ACE Market of Bursa Securities on 29 May 2024. M & A Securities Sdn Bhd is serving as the Principal Adviser, Sponsor, Underwriter, and Placement Agent for the IPO exercise.

Investment & Market Trends, News

Malaysia-China Trade Strengthens 3.3%, Reaching RM112 Billion

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KUALA LUMPUR: Malaysia’s total trade with China increased 3.3% year-on-year to over RM112 billion in the first quarter of this year, according to the Malaysia External Trade Development Corporation (MATRADE). Chairman Datuk Seri Reezal Merican Naina Merican said during the period, Malaysia recorded RM44.5 billion worth of exports to China with electrical and electronics (E&E) products being the biggest exports. In his keynote speech during the 21st China-ASEAN Expo (CAEXPO) promotional conference, Reezal said that E&E products made up 32.6% of the country’s total exports to the world’s second-largest economy. Meanwhile, imports were valued at RM67.78 billion comprising intermediate goods meant for the manufacture of products for exports such as E&E products, machinery, equipment and parts as well as chemicals and chemical products. Reezal said that China remained Malaysia’s largest trading partner and primary source for imports last year, while Malaysia was China’s 10 largest global trading partner as well as the second largest trading partner within ASEAN. On CAEXPO 2024, he said that MATRADE is targeting 150 Malaysian companies to join the event, which will be held from 24-28 September this year in Nanning, China. “This year would be special for Malaysia, as we have been invited to be the country of honour and the Malaysian Pavilion will be given special highlights. We will have a significantly larger pavilion to provide ample space for Malaysian companies to showcase a wider range of offerings,” Reezal announced, highlighting that the CAEXPO is a golden opportunity for Malaysian companies to tap into the China market. Last year, the Malaysia Pavilion – officiated by Prime Minister Datuk Seri Anwar Ibrahim – recorded a total sales of RM625.42 million and saw seven memoranda of understanding signed for further potential sales. — BERNAMA

Investment & Market Trends, News

RHB Islamic Leading the Islamic Wealth Management Segment With RM3.3 Bil Achieved

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KUALA LUMPUR: RHB Islamic Bank Bhd is gaining momentum in the Islamic Wealth Management (IWM) market, having already secured RM3.3 billion in the segment as of the end of 2023. In October 2023, the bank launched the IWM portal with the target of achieving RM6 billion funds in the segment by end-2026, driven by RHB Multi-Currency Visa Debit Card/-1, Islamic unit trusts products, estate planning and trust propositions. Its Managing Director Datuk Adissadikin Ali said IWM revolved around responsible wealth management guided by Shariah principles, which encompasses a holistic approach to wealth creation and accumulation, protection, purification and distribution to ensure both short-term financial success and long-term sustainability. “More importantly, we help guide our customers at every step of their wealth management journey, from halal investments to zakat and waqf for a better portfolio,” Adissadikin said. He explained that RHB Islamic has a dedicated Shariah Committee that would ensure that all its products and services are Shariah-compliant to ease the minds of its customers. Moreover, innovation is central to RHB Islamic’s IWM approach as the bank continuously adapts to evolving customer needs and regulatory requirements by leveraging technology and digital platforms. According to Adissadikin, RHB Islamic enhances accessibility to IWM for a wider audience, including individual investors and businesses, through user-friendly online investment platforms and mobile applications. “More importantly, we prioritise sustainability by integrating environmental, social and governance (ESG) elements into the IWM offerings to ensure that the bank’s products not only yield financial returns but also contribute positively to society and the environment, meeting the growing demand for socially responsible investments. On its dedication to social inclusion, RHB Islamic empowers individuals from the B40 segment to launch their own businesses, fostering financial independence with the B40 Empowerment Strategy – Be Your Own Boss (BEST-BYOB) programme, while the B40 Education Empowerment Programme (BEEP) provides educational opportunities for underprivileged individuals. The bank also fosters collaboration within the industry to drive growth and development in Islamic finance by working closely with other financial institutions, regulatory bodies and industry associations. “The collaborative approach enhances RHB Islamic’s expertise and promotes knowledge sharing and best practices within the industry. “With Malaysia’s well-established position as a global hub for Islamic finance, a robust regulatory framework and a diverse range of Shariah-compliant products attracting local and international investors, IWM is set to play an increasingly important role,” Adissadikin said. — BERNAMA

Investment & Market Trends, News

Meta Bright Obtains RM28Mil in Funding from AmBank to Fuel Strategic Growth

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KUALA LUMPUR: Meta Bright Group Bhd’s (MBGB) wholly-owned Australian subsidiary, Meta Bright Sdn Bhd, has secured financing facilities totalling RM28 million from AmBank (M) Bhd, expanding MBGB’s business operations and solidifies its relationship with the bank. In addition, this initiative is a testament to MBGB’s capability to secure significant banking support within just two years, reflecting the company’s successful turnaround and robust growth trajectory. This financing aligns with MGBG’s ambitious growth strategy, particularly in enhancing its capabilities within the equipment leasing sector linked to its recent expansion into Australia. The funds will be used to buy equipment for Meta Bright Australia Pty Ltd, which has just signed its third lease agreement with Mt Cuthbert Resources Pty Ltd (MCR). This agreement is expected to strengthen MBGB’s position in the global market and provide a consistent monthly income of approximately AUD$222,950 (about RM691,657.78). MBGB executive director of corporate and strategic planning Derek Phang Kiew Lim said obtaining these facilities from AmBank within such a short period is not only a milestone for the company but also a strong endorsement of its business model and strategic direction. “This financial partnership is pivotal as it supports our next phase of growth and strengthens our relationship with AmBank, setting a solid foundation for future collaborative opportunities,” he said in statement. The funding facilities include term loan 1 amounting to RM25.5 million, allocated for the purchase of plant and machinery to enhance operational capabilities. Term loan 2 amounting to RM3 million, designed to finance life insurance premiums for the company’s directors, safeguarding corporate governance and leadership continuity. Further, Ambank’s uncommitted foreign exchange contract facilities is to facilitate efficient international currency transactions, supporting MBGB’s global operations. “Through this strategic financial support, MBGB is set to significantly boost its capacity to manage large-scale projects and enhance its offerings in the highly competitive mining equipment leasing market. “We are particularly focused on our operations in Australia, where we see great potential due to the robust growth of the mining sector,” Phang said.

Investment & Market Trends, News

TTM Technologies’ First Manufacturing Facility Opens in Penang

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PENANG: TTM Technologies, Inc. (NASDAQ: TTMI), a leading global provider of technology solutions encompassing mission systems, radio frequency (“RF”) components, RF microwave/microelectronic assemblies, and advanced printed circuit boards (“PCBs”), has officially inaugurated its inaugural manufacturing facility in Penang, Malaysia. With an investment totaling USD 200 million (approximately RM 958 million), the new plant signifies a strategic move to enhance the resilience of the printed circuit board supply chain and to broaden geographic operational scope. Situated across 27 acres within the Penang Science Park, the cutting-edge facility boasts highly innovative and automated PCB manufacturing capabilities. This development is a collaborative effort between TTM and its clientele, aimed at meeting the escalating demand for diversified manufacturing locations and fortified PCB supply chains. Tailored to support mass production needs across diverse commercial sectors such as networking, data center computing, medical, industrial, and instrumentation, the facility signifies a pivotal step in addressing industry requirements. YAB Tuan Chow Kon Yeow, Chief Minister of Penang, remarked, “Penang takes great pride in hosting TTM’s maiden large-scale, highly automated, and innovative PCB manufacturing plant in Southeast Asia. This choice underscores the confidence foreign investors place in Penang. Renowned for its robust industrial ecosystem, Penang is well-equipped to cater to the evolving needs of industrial players in cutting-edge technologies and growth strategies. I am optimistic about the manifold benefits TTM will derive from its Penang operations, solidifying Penang’s status as the Silicon Valley of the East.” The opening ceremony, attended by dignitaries including YAB Tuan Chow Kon Yeow, Pn. Najihah Abas of Malaysian Investment Development Authority (“MIDA”), YBhg. Dato’ Loo Lee Lian of InvestPenang, Mr. Thomas Edman, President and CEO of TTM Technologies, Inc., Mr. Philip Titterton, Executive Vice President and COO of TTM Technologies, Inc., along with senior government officials and TTM’s management, marked the inauguration of TTM’s Penang facility. The establishment of TTM’s Penang plant is projected to create approximately 1,000 employment opportunities across various sectors by 2025. Furthermore, it will foster growth opportunities for local suppliers and enhance the skills of local technical talent in advanced PCB technology solutions. TTM anticipates achieving full run rate revenue of around USD 180 million (approximately RM 855 million) by 2025, with provisions for a Phase 2 expansion, potentially resulting in a 25% capacity increase. Mr. Sikh Shamsul Ibrahim Sikh Abdul Majid, CEO of MIDA, emphasized the substantial benefits of TTM Technologies’ investment for Malaysia’s electrical and electronics (“E&E”) industry, particularly within the semiconductor sector. The inauguration of TTM’s advanced facility in Penang not only reinforces Malaysia’s E&E industry but also enhances its capabilities in next-generation PCB manufacturing, aligning with the objectives of the New Industrial Master Plan (“NIMP”) 2030. Mr. Thomas Edman, President and CEO of TTM Technologies, expressed his enthusiasm for the opening of the flagship Penang plant, highlighting TTM’s commitment to delivering innovative technology solutions globally. He emphasized the significance of Penang’s industrial ecosystem, talent pool, and conducive business environment in making it an ideal location for TTM’s expansion. In addition to meeting industry demands, TTM remains dedicated to safeguarding its employees, community, customers, and the environment. The new facility is designed to minimize energy and water consumption, reducing its carbon footprint by 60% compared to traditional PCB plants, while adhering to stringent environmental standards.

Investment & Market Trends, News

Malaysian Trade Industry on the Rise as of March 2024, Up 5% From 2023

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KUALA LUMPUR: Malaysia’s total trade for March 2024 amounted to RM244.5 billion with exports and imports recorded RM128.6 billion and RM115.8 billion, respectively as reported by the Department of Statistics (DOSM). The total amount of trade has increased 5% year-on-year compared to RM232.7 billion in March 2023. Chief Statistician Malaysia Dato’ Sri Dr Mohd Uzir Mahidin said exports were valued at RM128.6 billion in March 2024 decreased RM1 billion (-0.8%) as compared to the same month of the previous year. The decrease in exports was attributed to the lower exports in most states such as Selangor (-RM2.1 billion), WP Labuan (-RM1.6 billion), Melaka (-RM686.2 million), Sabah (-RM443.8 million), Sarawak (-RM260.9 million), Pulau Pinang (-RM129.8 million), Negeri Sembilan (-RM118.5 million), Johor (-RM44.6 million) and Perlis (-RM27 million). However, exports increased in Perak by RM1.5 billion, WP Kuala Lumpur (+RM1.3 billion), Terengganu (+RM929.9 million), Pahang (+RM522 million), Kedah (+RM151.7 million) and Kelantan (+RM36.2 million). Pulau Pinang remained as the top exporter with 32% share, followed by Johor (20%), Selangor (16.9%), Sarawak (8.1%) and WP Kuala Lumpur (4.5%). Looking at the performance of imports by state, Mohd Uzir said imports in March 2024 increased RM12.9 billion (+12.5%) as compared to the same month in 2023. The increase in imports was attributed to the higher imports in most states such as Johor (+RM8.2 billion), Melaka (+RM1.6 billion), Negeri Sembilan (+RM1.2 billion), WP Kuala Lumpur (+RM1 billion), Selangor (+RM996.7 million), Kedah (+RM419.7 million), Pahang (+RM152.6 million), Terengganu (+RM92.1 million), Kelantan (+RM71 million), Sabah (+RM55.5 million) and WP Labuan (+RM30.3 million). However, imports decreased in Pulau Pinang by RM521.9 million, Perak (-RM393.8 million), Sarawak (-RM115.9 million) and Perlis (-RM6.8 million). Johor dominates Malaysia’s imports with a share of 27.9%, followed by Selangor (23.6%), Pulau Pinang (19.2%), WP Kuala Lumpur (7.5%) and Kedah (5%).

Investment & Market Trends

Global Manufacturing Activity to Gradually Recover

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KUALA LUMPUR: The global manufacturing activity recovery had seen a gradual improvement in late 2023 and is expected to continue into 2024 although it remained in contractionary territory after two years of downturn. S&P Global Market Intelligence Senior Associate Benjamin Ng said that with global growth prospects picking up, the economic conditions are likely to improve and this could be observed from the global purchasing managers index (PMI) data, improvement in the electronic industry as well as tourism. “We saw that the US economy is stronger than expected although the Western Europe sector continued to underperform. Growth in Asia Pacific (APAC) was uneven in India and Indonesia leading the region as the fastest growing while China was still struggling with multiple headwinds,” he said during a webinar organised by the Malaysia External Trade Development Corporation. He said global PMI data showed that global gradual improvement of economic positions, with indications of further improvements from new orders and future output indications rising to their highest level since mid-2023. Ng explained that the market condition also sees improvement in demand prospects as reflected in the pickup in the employment and services segments despite the manufacturing segment remaining in a relatively challenging environment. He added that APAC is expected to drive world growth in 2024 benefitting from gradual recovery in China, with the expectation of the region’s gross domestic product (GDP) to increase for this year and the next. Currently, APAC’s contribution to global growth is about 55% of the world’s GDP, with half of the total coming from China, followed by India and ASEAN, especially Indonesia. “Gradual recovery in electronic exports combined with a continued rebound in international tourism will support the export sector of many APAC companies,” Ng noted. As for Malaysia, he said that its economic momentum that was observed at the end of 2023 will continue in 2024 with real GDP growth projected to accelerate to 4.6% driven by the recovery in merchandise exports as well as tourism and the continued strength in private consumption and investment. “Recovery is underway after an extended period of downturn supply chain activity has shown signs of improvement. Although the rate of growth in trade resulting from the recovery is expected to be moderate, it is expected to increase through the remainder of 2024,” he added. Ng also mentioned that manufacturing new orders declined in 2022, observing from PMI for G4 countries including Brazil, Germany, India and Japan had also steadily increased since December 2023. This was accompanied by steady improvement in export orders and quantity or purchases while the electronic segment growth in 2023 saw an improvement in early 2024 and is expected to persist throughout the year. However, Ng also noted that the textile and apparel manufacturing segment is expected to slip by 1.6% and will not recover on a quarterly basis despite the ongoing period of restocking. Nonetheless, he shared that evidence of recovery in the electric supply chain is mixed with the AI boom driving the industry’s revenue up by 33% in the first quarter (Q1) of 2024. However, there is an upside risk to supply chain activities which may come later in 2024 if US importers choose to anticipate tariff increases of imports from China. “We anticipate prior to the increase, there would be a pre-tariff surge which could add 20-30% of imports from China in Q4 2024. However, amid the geopolitical uncertainties, Ng said there are both unintended consequences in limitations as well as market potential. China remains a huge market for semi-conductor suppliers, equipment providers and raw material suppliers, accounting for almost 30% of revenues of the 10 largest chip companies while the US accounts for 25%. Given that this may likely split the market, exporters may need to take into consideration various strategies to mitigate the market risks, Ng concluded. — BERNAMA

Investment & Market Trends, News

Fernandes: AirAsia Group to be Listed on Bursa Malaysia in September

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KUALA LUMPUR: AirAsia Group Sdn Bhd (AAG) is poised to be listed on Bursa Malaysia in September, taking over the listing status of AirAsia X Bhd, said Capital A Bhd chief executive officer Tan Sri Tony Fernandes. He said AAG is a combined airline under AirAsia Aviation Group Ltd (AAAGL), consisting of AirAsia subsidiaries in Thailand, Indonesia, the Philippines and soon Cambodia together, with AirAsia Bhd (AAB) which handles operations in Malaysia. “The merger is to streamline the operation which aims to be the largest low cost carrier in Asia with the ‘One Airline’ strategy set to transform the face of global low cost travel,” he said during the exchange ceremony of a conditional share sale and purchase agreement between Capital A and AAG, today. Fernandes said he believes the move will pave the way for Capital A to exit PN17 status after the divestment of its wholly-owned subsidiaries – AAAGL and AAB. “So the first thing is to get the circular done for this transaction which I hope will be done in two weeks. Then we have to submit it to Bursa Malaysia for approval which I hope can be done quickly. “Then we have 21 days to call for an extraordinary general meeting from both companies to approve this transaction. So once that is done, we have to get the cost to approve it for capital reduction, then we can list,” he said. Post-divestment, he said Capital A will retain four core businesses, including Capital A Aviation Services, Teleport, MOVE Digital, and Capital A International. He said AirAsia Group will be optimising their profitability with an efficient fleet model, with the company upsizing the A320s model and downsizing the A330s to A321 Neo models. Capital A announced to the stock exchange yesterday it has entered into a conditional share sale and purchase agreement with AAG to dispose of its 100 per cent equity interest in AAAGL and AAB for RM6.8 billion. Capital A also announced a proposed distribution of new ordinary shares in AAG to be received as consideration shares for the proposed AAAGL disposal of about RM2.20 billion to the entitled shareholders of the group. –BERNAMA

Investment & Market Trends, News

GFM Services Successfully Transfers to the Main Market of Bursa Securities

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KUALA LUMPUR: GFM Services Berhad (“GFM” or “the Group”), a provider of Integrated Facilities Management services, has announced the completion of the transfer of its entire issued share capital from the ACE Market to the Main Market of Bursa Malaysia Securities Berhad (“Bursa Securities”). This transfer involves the listing and quotation of the Group’s total issued share capital, amounting to 759,508,350 shares in GFM. Encik Ruslan Bin Nordin, the Group Managing Director of GFM, expressed his satisfaction with the successful migration to Bursa Securities’ Main Market. He emphasized that this achievement signifies a significant milestone for GFM, reflecting its financial strength and stability, meeting the transfer criteria related to profitability, financial position, and liquidity. Nordin highlighted that being listed on the Main Market will enhance access to capital markets, especially institutional funds, and boost credibility among investors, aligning with the Group’s current scale of operations. Nordin outlined the Group’s future growth strategies, focusing on expanding its presence in the Oil and Gas facilities maintenance sector, Highway Rest and Service Areas (RSA), and exploring opportunities in the Workforce Lodging segment to address the increasing demand for proper workers’ accommodation. He expressed confidence that the transfer to the Main Market will facilitate the realization of these expansion plans. Nordin expressed gratitude to investors, customers, and business partners for their support, and recognized the contribution of GFM team members to the Group’s success. To summarize, GFM achieved its highest-ever revenue of RM145.0 million and net profit of RM27.4 million for FY2023, driven primarily by increased contributions from its Oil and Gas and Concession Arrangements divisions.

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