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Investment & Market Trends

Investment & Market Trends

MKHOP Records Pre-Tax Profit of RM36 Million Ahead of Main Market Listing for Six Months Ending March 31, 2024

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MKH Oil Palm (East Kalimantan) Berhad, a forthcoming player in the oil palm plantation sector, disclosed its financial results for the second quarter (“2QFY2024”) and the initial half ended on March 31, 2024 (“1HFY2024”). This interim financial report marks the Group’s inaugural announcement in compliance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, coinciding with its imminent initial public offering (“IPO”). In 2QFY2024, MKHOP recorded a revenue of RM86.0 million, up by 4.5% from RM82.3 million in the previous quarter (“1QFY2024”). Profit before tax surged by 26.4% to RM20.1 million compared to RM15.9 million in 1QFY2024. Net profit soared to RM16.0 million, marking a significant increase of 53.3% from RM10.4 million in 1QFY2024. The revenue growth was primarily attributed to the uptick in the average selling prices of crude palm oil (“CPO”) and palm kernel (“PK”). The average CPO price per metric ton (“MT”) rose by 4.8% to RM3,441 in 2QFY2024, while the average PK price per MT increased by 6.4% to RM1,582. Additionally, fair value gains on biological assets amounted to RM1.4 million in the current quarter, in contrast to fair value losses of RM0.1 million in the preceding quarter. For 1HFY2024, MKHOP reported a net profit of RM26.5 million on revenue of RM168.4 million. As of March 31, 2024, the Group’s cash and bank balances stood at RM89.6 million. Tan Sri Dato’ Chen Kooi Chiew @ Cheng Ngi Chong, Non-Independent Non-Executive Chairman of MKHOP, expressed satisfaction with the Group’s financial performance for 2QFY2024 and highlighted positive prospects for the remainder of the financial year, driven by anticipated supportive CPO prices. Anticipating a stronger financial performance in the upcoming financial year, Tan Sri Dato’ Chen Kooi Chiew emphasized the strategic significance of the upcoming IPO, expecting its proceeds to facilitate expansion plans and technological investments to enhance operational efficiencies and market presence, ultimately aiming at long-term value creation for shareholders. MKHOP is scheduled to debut on the Main Market of Bursa Securities on April 30, 2024, with an issue price of RM0.62 per share, resulting in a market capitalization of RM634.6 million based on an enlarged share capital of 1.02 billion shares.

OYO
Investment & Market Trends, Property

OYO Launches Self-Operated Hotels in Malaysia: Expanding Partnerships and Enhancing Experiences

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KUALA LUMPUR: OYO has introduced self-operated hotels in Malaysia alongside its core business strategy, aiming to open 100 new managed hotels in 2024 and partner with realtors for hotel development. The company plans to bring about 100 hotels in Malaysia under management contracts, with selected professional operators running these properties. OYO will invest in upgrading infrastructure, technology, and marketing to boost property revenue. Realtors will benefit from assured rent, timely payments, flexible terms, and a responsive system to address concerns and suggestions. These self-operated hotels will be labelled as ‘Managed by OYO’ on the company’s app and website to highlight OYO’s hands-on management and high quality. The first of these hotels, GS Hotel in Kota Damansara, Kuala Lumpur, is already operational. OYO is actively seeking partnerships with real estate developers to locate suitable properties for these hotels, focusing on major tourist hubs like Kuala Lumpur, Penang, and Kota Kinabalu. The initiative aims to enhance customer experiences through upgraded facilities and effective marketing. The company will secure long-term management contracts based on revenue-sharing arrangements with property owners. OYO will provide training and ongoing support to ensure partners excel in managing these properties. This collaborative approach aims to foster economic growth through community partnerships. Akshay Rathod, Country Head of OYO Malaysia, emphasized the company’s commitment to empowering hotel partners with innovative programs to boost revenue and competitiveness. Dato Gordev Singh, Owner of GS Hotel, praised the program for meeting their operational needs and fostering mutual growth. OYO has streamlined its technology to help partners increase visibility and revenue. Features like Co-OYO allow partners to design promotions, while OYO 360 simplifies onboarding properties onto its platform in just 30 minutes.

Investment & Market Trends, News

Sentoria Secures Confidence with Approval of Redeemable Convertible Bonds (RCB) in EGM

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SERI KEMBANGAN: Sentoria Group Berhad (“Sentoria”) reached a significant milestone today as it successfully held its Extraordinary General Meeting (EGM), marking a crucial step in the company’s journey towards financial revitalization. The virtual EGM saw strong participation from Sentoria’s esteemed shareholders, including the State Investment Agencies of Pahang, highlighting their unwavering commitment to the company’s strategic direction. Under the leadership of Sentoria’s Chairman, Datuk Ras Adiba Radzi, and with the attendance of all board members, the EGM centered on securing shareholders’ approval for Sentoria’s Redeemable Convertible Bond (RCB) issuance alongside a Shares Consolidation initiative. The overwhelming support, with nearly 99.9% of eligible registered shareholders backing the resolutions, including full endorsement from Pahang State Investment arm as the second largest shareholder, signifies a strong vote of confidence in Sentoria’s rejuvenation efforts. With conditional approval from Bursa Malaysia granted last month, contingent upon shareholders’ endorsement, today’s successful resolution paves the way for Sentoria to proceed with its first issuance of the three-tranche structured RCB, ensuring compliance with regulatory standards. Expressing gratitude for the awaited approval of the RCB proposal, Dato’ Loh Yuen Tuck, the Group’s CEO, emphasized the pivotal role of the RCB in revitalizing Sentoria’s cash flows, meeting financial obligations, advancing housing projects in Morib Bay, Selangor, and rejuvenating theme parks through strategic partnerships. The approval enables Sentoria to fulfill commitments to homebuyers, address legacy issues with bank loans, fund new projects in Morib, and revive theme park operations in Gambang Pahang and Samariang Sarawak, thereby enhancing property values and delivering sustainable returns to shareholders and fair returns to supporting banks. The RCB issuance, coupled with a share consolidation exercise of four to one, demonstrates Sentoria’s dedication to financial flexibility and disciplined management. The RCB, already fully subscribed, is structured to be convertible to a maximum of 306,690,544 new ordinary shares, in addition to Sentoria’s consolidated shares. The infusion of RM 150 million funds will support development initiatives, improve cash flows, reduce bank borrowings, and strengthen working capital, crucial elements of Sentoria’s strategic turnaround. Chairman Datuk Ras Adiba Radzi reaffirmed the new Management Team’s commitment to integrity and transparency in utilizing RCB funds, highlighting Sentoria’s dedication to realizing its full potential and creating value for stakeholders. The new team extends gratitude for continued support from shareholders, partners, suppliers, bankers, and stakeholders, emphasizing the importance of ongoing collaboration in achieving Sentoria’s turnaround objectives.

Investment & Market Trends, News

Capital A to Dispose of 100% Stake in AirAsia for RM6.8 Bil to Streamline Biz Activities

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KUALA LUMPUR: Capital A Bhd entered into a conditional share sale and purchase agreement with AirAsia Group Sdn Bhd (AAG) to dispose of its 100% equity interest in AirAsia Aviation Group Ltd (AAAGL) and AirAsia Bhd (AAB) for RM6.8 billion. The group entered into a conditional share sale and purchase agreement with AAG to dispose of AAAGL for RM3 billion and AAB disposal for RM3.8 billion. AAAGL and AAB are wholly-owned subsidiaries of Capital A. Under AirAsia X Bhd’s (AAX) proposed internal reorganisation, AAG will assume the listing status of AAX before the completion of the proposed disposals. Capital A has 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. “The AAAGL disposal consideration of RM3 billion will be satisfied entirely via the issuance of 2.30 billion new AAG shares at an issue price of RM1.30 for each consideration share,” the group said in a 68-page document filed with Bursa Malaysia. The AAB disposal consideration will be satisfied by way of AAG’s assumption of the company’s debt due to AAB of RM3.8 billion on the AAB completion date according to the terms of the disposal. It also said that based on Capital A’s audited consolidated financial statements for the financial year ended 31 December 2022 (FY22), the proposed AAAGL disposal is expected to result in a pro forma gain arising from the remeasurement of the remaining interest in AAAGL upon completion of the disposal of about RM4.69 billion. As for AAB, it said the proposed AAB disposal is expected to result in a pro forma gain on disposal of AAB upon completion of the disposal of some RM6.07 billion based on the group’s audited consolidated financial statements for FY22. “The proposed disposals are intended to be undertaken by Capital A to streamline the group’s core business activities to focus on aviation services and digital businesses, which are essential and complementary to the passenger airlines business,” it said. Upon completion of the exercise, the aviation services and digital businesses mainly encompass a wholly-owned subsidiary, Asia Digital Engineering; super app segment carried out by SuperApp, a 96.19% subsidiary of Capital A; logistics segment carried out by Teleport, a 77.56% subsidiary and digital payments segment carried out by BigPay, a 99.56% subsidiary of the group. “Additionally, after the proposed distribution, the entitled shareholders will be able to continue participating in the business of the new aviation group via AAG shares held, which will be listed on the Main Market of Bursa Securities after AAX’s proposed internal reorganisation. — BERNAMA

Investment & Market Trends, News

Tokyo Inflation Falls Below BOJ Target for 2nd Month

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TOKYO: Core inflation decelerated for the second consecutive month in April, dropping below the central bank’s 2 per cent target, as revealed by data on Friday. This development complicates the central bank’s decision on when to raise interest rates. The latest figures were released shortly before the conclusion of the Bank of Japan’s two-day policy meeting, where policymakers are expected to maintain interest rates at their current level and present new inflation forecasts for the coming years up to early 2027. The core Consumer Price Index (CPI) in Tokyo, which serves as an indicator for nationwide trends, rose by 1.6 per cent in April compared to a year earlier, marking a slowdown from the 2.4 per cent increase observed in March. This figure was lower than the market’s median forecast of a 2.2 per cent rise. Another index, which excludes the volatile effects of fresh food and fuel prices and is seen as a broader gauge of price trends, also indicated a slowdown in inflation to 1.8 per cent in April from 2.9 per cent in March. This represents the slowest rate of increase since September 2022, when the index rose by 1.7 per cent year-on-year. Despite core inflation still exceeding the central bank’s 2 per cent target, the deceleration underscores uncertainty about whether consumer spending and wage pressures will strengthen sufficiently to sustain price growth around this level. The Bank of Japan has previously stated that its decision to end negative interest rates last month was driven by indications of robust demand and the expectation of rising wages, which were prompting businesses to continue raising prices for both goods and services. The depreciation of the yen adds complexity to the Bank of Japan’s interest rate strategy. While it supports exports and contributes to inflation, it could dampen domestic consumption, potentially cooling the economy and discouraging businesses from passing on increased costs to households.— REUTERS

Investment & Market Trends, News

Malaysia’s Inflation Stayed at 1.8% In March 2024

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KUALA LUMPUR: Since November 2023, the country’s inflation rate stood at 1.5% up until January 2024. By February, the number went up to 1.8%, which continued until last month, with the index points recorded at 132.2 as against 129.9 in the same month of the previous year.   The increase of inflation in March 2024 was driven by housing, water, electricity, gas and other fuels (3%); restaurant and accommodation services (3%); personal care, social protection and other goods and services (2.6%) and transport (1.3%). However, the increase has been offset by the other main group which recorded a slower increase namely health (2.1%); food and beverages (F&B) (1.7%) and recreation, sport and culture (1.5%). The increase of 3% (February 2024: 2.7%) in for housing, water, electricity, gas and other fuels was contributed by the expenditure class of water supply which increased to 31.4% in March 2024 (February 2024: 28.8%). Kedah has increased the water tariff rates for domestic category users starting in March 2024 as compared to other states that have implemented the new tariff rates in February 2024. The F&B group recorded a slower increase of 1.7% in March 2024 (February 2024: 1.9%). The main subgroup of food at home increased to 0.3% in March 2024 (February 2024: 0.5%). Meanwhile, the main subgroup of food away from home increased 3.5%, the same rate as registered in February 2024. Overall, monthly inflation recorded a marginal increase of 0.1% as compared to 0.5% recorded in February 2024. A few main groups that posted increases on a monthly basis were restaurant and accommodation services (0.4%); personal care, social protection and other goods and services (0.4%) as well as housing, water, electricity, gas and other fuels (0.3%). Meanwhile, inflation for the first quarter of 2024 recorded an incline of 1.7% (Q4 2023: 1.6%). For quarterly comparison, Malaysia’s inflation increased 0.7% (Q4 2023: 0.2%). Meanwhile, core inflation increased slower at 1.7% as compared to 1.8% in February 2024. The increase was due to the F&B and restaurant and accommodation services which both recorded increases of 3%respectively in March 2024. At the state level, most of the states recorded increases below the national inflation level of 1.8%. However, 5 states recorded increases above the national inflation level namely Pulau Pinang (3%), Sarawak (2.9%), Pahang (2.1%), Selangor (2.1%) and Perlis (1.9%). In comparison to inflation in other selected countries, inflation in Malaysia (1.8%) was lower than inflation in Vietnam (4%), Philippines (3.7%), United States of America (3.5%), Republic of Korea (3.1%) and Indonesia (3.1%). However, the rate is higher than China (0.1%) and Thailand (-0.5%).

Investment & Market Trends, News

Meta Bright Signs RM24 Mil Leasing Contract with Australian Company

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KUALA LUMPUR: Meta Bright Group Bhd’s (MBG) wholly-owned Australian subsidiary, Meta Bright Australia Pty Ltd (MBA), signed a new leasing contract with Mt Cuthbert Resources Pty Ltd (MCR). The agreement, signed on April 24, 2024, marks another significant step in MBG’s strategic expansion in the equipment leasing market. Under the terms of the contract, MBA will provide dry hire equipment rental services to MCR, supporting its copper mining operations in Australia with essential machinery and equipment valued at up to AU$8 million (approximately RM24.82 million). The equipment list includes machinery, vehicles, and other mining equipment necessary for MCR’s readiness to operate and respond to the promising copper mining outlook. A filing with Bursa Malaysia showed that this contract is expected to generate substantial monthly recurring rental income, estimated at AU$222,950 (about RM691,657.78), enhancing MBG’s recurring revenue streams and reinforcing its presence in the Australian market. MBG executive director of corporate and strategic planning Derek Phang Kiew Lim said this contract strengthens the company’s relationship with MCR and underscores its capability and commitment to supporting the mining industry with high-quality and reliable equipment. “Our strategic decision to diversify into machinery and equipment leasing has allowed us to tap into the robust growth of the mining sector in Australia, which continues to show significant potential,” he said in a statement. The mining industry in Australia is a critical economic sector, with growth driven by increasing domestic and international demand for minerals. The industry’s income from mineral exploration is projected to grow to AU$5.7 billion by 2025, at a compounded annual growth rate (CAGR) of 11.3% from 2023. The equipment leasing market in Australia is similarly promising, expected to grow to US$1.9 billion by 2025. This growth is supported by expanding end-user industries such as mining, construction, and manufacturing, which rely heavily on leased equipment to reduce capital expenditure and enhance operational efficiency. “Our strategic focus on the equipment leasing sector is paying dividends, enabling us to leverage growth opportunities within Australia’s dynamic industrial landscape. “We are confident that this new contract with MCR will contribute positively to our financial performance, starting from the second quarter of the financial year 2025,” added Phang. MGB continues to explore opportunities to expand its leasing business, aligning with its goal to provide stable and sustainable returns to its shareholders.

Investment & Market Trends, News

HeiTech Padu Berhad Targets Stronger Earnings Growth after Returning to Profitability for FY2023

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SUBANG JAYA: HeiTech Padu Berhad (HeiTech or the Group) has returned to profitability in the financial year ending December 31, 2023 (FY2023), reporting a profit of RM7.2 million to Bursa Malaysia compared to losses of RM10 million in 2022. This turnaround of RM17.2 million is attributed to improved profit margins resulting from effective cost management and successful acquisition of new contracts in both public and private sectors amidst heightened competition and economic uncertainty. Contracts secured include those from key ministries and agencies such as the Ministry of Education, Ministry of Domestic Trade and Cost of Living, Ministry of Health, Inland Revenue Board of Malaysia, and an extended contract with the Immigration Department of Malaysia.   Salmi Nadia Mohd Hilmey, Group Managing Director and Group Chief Executive Officer, emphasized HeiTech’s commitment to delivering value-added solutions and services to customers, driving stronger earnings growth. Over the past 30 years, HeiTech’s track record in developing and managing technological solutions for public and private sector clients has fueled its growth. The company’s success in securing high-profile government contracts is attributed to its consistent delivery and merit-based approach. Established as a leading player in Malaysia’s IT industry, HeiTech has driven technological transformation for governmental, financial, and commercial organizations through strategic collaborations and partnerships. It has evolved from a system integrator and managed infrastructure provider to offering digital and emerging products like smart parking systems, e-KYC, payment gateways, and smart applications for local councils, cooperatives, schools, and teaching portals. HeiTech’s regional expansion initiatives include ventures into Indonesia, where it launched financial systems for cooperatives, a school administration system, and a mobile app for teachers and students through PT DesaTech Nusantara, an investee company. Looking ahead, HeiTech aims to become a comprehensive Digital Technology Service Provider by leveraging emerging technologies, broadening operational capabilities, expanding its customer base, diversifying its business, and enhancing its financial position.

Investment & Market Trends

MKH Oil Palm IPO Sparks Surge of Interest, Oversubscribed 8.4 Times

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KUALA LUMPUR: Oil palm plantation player MKH Oil Palm (East Kalimantan) Bhd (MOPB) has garnered strong investor interest in its upcoming initial public offering (IPO). Shares has been oversubscribed by 8.4 times ahead of its listing on the main market of Bursa Malaysia. MOPB’s IPO received 9,510 applications for 482.9 million shares, worth around RM299.4 million. The Malaysian public oversubscribed by 8.4 times, while Bumiputera category sees a 7.6 times oversubscription, and other Malaysian public category reaches 9.3 times. The private placement of 168.8 million shares for selected investors have also been fully placed out. MOPB non-independent non-executive chairman Tan Sri Datuk Chen Kooi Chiew expressed gratitude for the favourable response to the company’s balloting results. “We value the public’s support for the company’s capabilities and future potential. “With the IPO funds, we are well-equipped to pursue our expansion strategy, which includes acquiring new land in the vicinity of our existing plantation estates to expand our plantation landbank,” he said in a statement. MOPB’s IPO exercise comprises a public issue of 220.0 million shares at an issue price of RM0.62 per share, representing 21.5 per cent of its enlarged share capital, with IPO proceeds of RM136.4 million. Additionally, there is also an offer for sale of 30.7 million existing shares or 3.0 per cent of the enlarged shares by way of private placement to selected investors. “Our efforts will be directed towards enhancing our operational efficiency and increasing our processing capabilities and product offerings, supported by investments in new machinery and equipment. “A key initiative includes the new palm kernel (PK) crushing facility to crush and press PK for extraction and processing into crude palm kernel oil and palm kernel expeller, thereby diversifying our revenue streams,” Chen said. MOPB will debut on the main market of Bursa Malaysia on April 30, 2024. Upon listing, the company’s market capitalisation will be RM634.6 million, based on the issue price of RM0.62 per ahare and its enlarged share capital of 1.02 billion shares. M&A Securities Sdn Bhd is the adviser, managing underwriter, joint underwriter and joint placement agent of the IPO exercise, while Kenanga Investment Bank Bhd is the joint underwriter and joint placement agent, and AmInvestment Bank Bhd is the joint placement agent.

Investment & Market Trends

DXN Records Stellar Revenue Growth of RM1.8 Mil, All-Time High Net Profit of RM311 Mil

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KUALA LUMPUR: Leading global manufacturer of nutraceutical products DXN Holdings Bhd. achieved record-breaking growth across key metrics in its fourth quarter (Q4 FY24) and full-year financial results for the year ended 29 February 2024 (FY24). DXN’s revenue surged by 12.6% year-on-year (YoY) to RM1.8 billion, exceeding the RM1.6 billion recorded in FY23. This growth is primarily driven by increased revenue contributions from Latin America and India, underpinned by a collective combination of member-driven conventions and events, the launching of new products and targeted marketing programs. Mirroring the strong topline growth, the company displayed solid improvement in profitability. Its earnings before interest, tax, depreciation & amortisation (EBITDA) came in at RM537.1 million, representing an 8.2% YoY increase from RM496.4 million recorded in FY23. Profit before taxation (PBT) also rose by 5.2% YoY to RM479.0 million from RM455.5 million registered in the previous financial year, while its net profit stood at RM311 million, beating last year’s RM275.4 million and setting an all-time high with a remarkable 12.9% YoY increase. Executive Chairman and Founder of DXN Datuk Lim Siow Jin shared, “We are thrilled to have achieved record-breaking financial results this year, demonstrating our resilient business model and effective growth strategy. “During the year, we have invested RM119.2 million in capital expenditure to support our expansion initiatives. This encompasses the construction of new manufacturing facilities, acquisition of plants and machinery, and strategic land purchases across China, India, Dubai and Peru.” According to Lim, the investments align with DXN’s objective to significantly boost its manufacturing capacity, supporting rapid market growth and driving expansion into new, promising markets. “Our recent entry into Brazil presents a significant new market opportunity within Latin America. With Brazil’s vast population exceeding 200 million, the growth potential is immense. “We are well-poised to capitalise on this opportunity by leveraging our established member network and strong brand presence in neighbouring Latin American countries, such as Mexico, Peru, Bolivia, and Colombia,” he added. Moving forward, Lim said that DXN will continue to sustain its market momentum through continued product innovation via research and development initiatives and by optimising production efficiency for long-term success. On a quarterly basis, the company’s revenue saw a commendable 16.2% increase to RM470.6 million in 4Q FY24, compared to RM405 million in the prior-year corresponding quarter Q4 FY23. EBITDA improved by 6.7% to RM132.6 million from RM124.3 million previously, while net profit rose by a remarkable 43.2% YoY to reach RM79 million from RM55.2 million achieved in Q4 FY23. Consistent with its dividend policy, the Board of Directors has announced a fourth interim dividend of 1 sen per ordinary share for FY24. This dividend amounts to RM49.7 million and will be paid on 30 May 2024. As of 29 February 2024, the total dividend announced for FY24 amounts to 3.6 sen per ordinary share, equivalent to RM179.3 million. This represents a 57.7% payout of DXN’s FY24 net profit, showcasing its commitment and capability to distribute dividends per its dividend policy of at least 50% of the net profit payout.

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