Investment & Market Trends

Hengyuan Refining Co Bhd is aiming to return to profitability in the financial year ending Dec 31, 2026 (FY2026), after recording losses for three consecutive years amid prolonged volatility in the global oil market. The Port Dickson-based refiner said it has revamped its financial and risk management strategies and secured more stable crude oil feedstock supplies to support its turnaround. Chief financial officer Yeo Bee Hwan said these initiatives have strengthened the group’s foundation for a sustainable recovery. The group’s rights issue exercise, completed in October 2025, raised RM234 million and significantly bolstered its balance sheet. The funds enabled Hengyuan to secure more reliable crude supply, providing greater flexibility to optimise refinery throughput and lower production costs, which in turn supports healthier margins. Hengyuan began posting losses in FY2022 following heightened geopolitical tensions, particularly the prolonged Russia-Ukraine conflict. This led to sharp swings in global crude oil prices, which fluctuated between US$70 and US$112 per barrel within a year, severely disrupting supply-demand dynamics and refined product pricing. The volatility also affected the group’s hedging positions, weighing on earnings and prompting the suspension of dividend payments. Since 2022, Hengyuan’s share price has fallen about 74%, hitting a record low of 73 sen in November last year. In response, the company has recalibrated its hedging approach, shifting towards shorter-term contracts to better manage rapid movements in oil prices and protect margins. Early signs of recovery have emerged. Revenue bottomed out in the January–March quarter, while Hengyuan recorded a net profit of RM21.04 million in the July–September quarter of FY2025 — its strongest quarterly performance since the second quarter of FY2022. However, revenue for the third quarter declined to RM3.62 billion from RM4.12 billion a year earlier, reflecting ongoing market challenges. For the nine months ended Sept 30, 2025, the group still posted a net loss of RM332.65 million, largely due to losses incurred in the first half of the year. Crude oil prices have since stabilised at around US$63–64 per barrel, providing a more predictable operating environment. Hengyuan refines crude oil into gasoil (diesel), mogas (RON95 petrol) and jet fuel, supplying Malaysia’s transport and logistics sectors. Its key customers include Shell, Petroliam Nasional Bhd (Petronas), Petron and Five, with Shell accounting for about 60% of its refined product output. The company has also benefited from Malaysia’s petrol subsidy programme, Budi95, which compensates refiners directly for the price difference on subsidised RON95 petrol, supporting higher fuel consumption. Since 2017, Hengyuan has invested more than RM2.2 billion in refinery upgrades, largely funded through internal resources. The refinery has a production capacity of up to 156,000 barrels per day, with current utilisation at around 110,000 to 120,000 barrels per day, leaving room for further optimisation. As at end-September 2025, Hengyuan had cash and bank balances of RM676.37 million against borrowings of RM1.47 billion, resulting in a net gearing ratio of 1.02 times. Shares in Hengyuan closed at 85 sen, valuing the group at RM507 million. The stock has gained more than 9% since the start of the year, reflecting improving investor sentiment over its recovery prospects.

BigPay has integrated its app with Bank Rakyat’s BRICK platform, enabling users to access information and apply for Shariah-compliant personal financing directly through the app. Users who tap the financing option in the BigPay app will be redirected to Bank Rakyat’s BRICK virtual banking platform, where they can review product details and submit their applications seamlessly. BigPay chief operating officer Vijayanathan Sockanathan said the collaboration supports the company’s goal of improving access to Islamic financing and empowering Malaysians to make more informed financial decisions. “This partnership strengthens BigPay’s mission to widen access to Islamic financing by offering greater transparency and convenience through the BigPay app,” he said. Through the platform, eligible customers can apply for Bank Rakyat’s Personal Financing-i InstaCash of up to RM50,000, with profit rates starting from 7.60% per annum. While the offering is aimed at active BigPay users, it is also available to other Malaysians, who can download the BigPay app to access Bank Rakyat’s BRICK platform.

Singapore-based digital finance firm Atome has successfully finalised the renewal and expansion of its syndicated debt facility to US$345 million (RM1.4 billion), a move aimed at supporting its aggressive growth plans across Southeast Asia, the company announced on Tuesday. The expanded facility marks a significant increase from the US$200 million facility Atome secured in 2024, reflecting confidence from existing and new lenders in the company’s business model and growth prospects. Atome, a part of Singapore’s Advance Intelligence Group and backed by prominent investors including SoftBank Vision Fund 2 and Warburg Pincus, plans to deploy the funds to scale its buy-now-pay-later (BNPL) services, expand its lending products, and accelerate adoption of its Pay Later Anywhere card in key markets such as Singapore, Malaysia, and the Philippines. “We are now even better positioned to support a rapidly growing, healthy, and profitable loan book, while continuing to meet the evolving needs of our customers across the region,” said Andy Tan, Atome’s Chief Commercial Officer. The debt facility renewal saw HSBC reprising its roles as structuring bank, mandated lead arranger, and book runner, while DBS Bank joined as a mandated lead arranger and book runner. Returning lenders include Sumitomo Mitsui Banking Corporation’s Singapore branch, Baiduri Bank, and Cathay United Bank, with new participants Fubon Bank and Shanghai Pudong Development Bank coming on board for the first time. The company said the enhanced facility will provide Atome with greater financial flexibility to capitalise on the growing demand for digital finance solutions in Southeast Asia, enabling the firm to expand its footprint and support a growing base of consumers seeking flexible payment and credit solutions. This strategic financing move underscores Atome’s ambition to cement its position as a leading BNPL and digital finance provider in Southeast Asia, while also providing the company with the resources to innovate, diversify its product offerings, and strengthen its regional presence.

Japan saw a surge in business bankruptcies in 2025, reaching a 12-year high as rising material costs and worsening labor shortages hit companies, according to a survey by Tokyo Shoko Research. Last year, 10,300 companies went under, up 2.9% from 2024 and marking the fourth consecutive annual increase, though growth slowed from a 15.1% jump the previous year. Labor-shortage-related bankruptcies also hit a record 397 cases. The data highlights the pressures of inflation and a tight job market on Japanese businesses, which could keep the Bank of Japan cautious on interest rates. Rising costs from a weak yen, lingering debt, trade tensions, and strained China relations were cited as additional risks. A separate Cabinet Office survey showed that consumer-facing firms, such as retailers, experienced declining sentiment for the second straight month in December, with an index reading of 48.6. Rising living costs and fewer Chinese tourists were cited as factors affecting consumption and business performance.

Diageo plc is reviewing strategic options for its operations in China, including the possibility of divesting certain assets, as the global spirits group looks to streamline its portfolio, sources familiar with the matter said. The owner of brands such as Guinness and Johnnie Walker is working with advisers Goldman Sachs Group Inc and UBS Group AG to assess its China exposure, which includes a more than 63% stake in Shanghai-listed Sichuan Swellfun Co. The advisers have begun gauging interest from potential domestic buyers and private equity firms, the sources said, declining to be identified as the discussions are private. If pursued, Diageo would join a growing list of multinational companies reassessing their footprint in China amid rising competition from increasingly sophisticated local players with strong ties to domestic consumers. Shares of Sichuan Swellfun have fallen about 14% over the past year, valuing the Chengdu-based liquor producer at around US$2.7 billion. Diageo shares, which are down roughly 29% over the same period, rose as much as 2.4% in early London trading on Tuesday. The review is still at an early stage and no final decision has been made, the sources stressed, adding there is no certainty any transaction will proceed. Diageo, Goldman Sachs and UBS declined to comment. A spokesperson for Sichuan Swellfun said the company had not been informed of any plans involving a stake sale. The potential move comes as several Western companies reconsider their China strategies. In recent months, Starbucks Corp agreed to sell a majority stake in its China business to Boyu Capital, while Restaurant Brands International Inc took a similar step with Burger King’s local operations. Other multinational groups, including GE Healthcare Technologies Inc, have also explored options for their China units, according to sources. Diageo has been reshaping its global portfolio as weaker alcohol consumption weighs on demand for premium spirits. In December, the group agreed to sell a majority stake in East African Breweries to Japan’s Asahi Group Holdings Ltd for US$2.3 billion, though the deal is facing legal challenges from a local distributor. The strategic review also coincides with a leadership change at Diageo. Dave Lewis, former chief executive of Tesco plc, took over as CEO this month, replacing Debra Crew, whose tenure was marked by a profit warning and a sharp share price decline amid softer demand and trade tensions. In November, Diageo cut its full-year sales and profit outlook, citing weaker consumption in the US and China, where anti-extravagance measures have curbed spending. Sichuan Swellfun, best known for its baijiu products, reported a sharp drop in its latest quarterly results, with revenue falling nearly 59% and net profit down more than 75%.

Shares of IJM Corporation Bhd climbed to a more than four-month high on Tuesday following Sunway Bhd’s proposal to acquire the construction group in a cash-and-share deal valued at over RM11 billion. IJM rose 19 sen or 6.9% to RM2.94 — its highest level since August — giving it a market capitalisation of RM10.7 billion. In contrast, Sunway shares slipped 12 sen or 2.1% to RM5.48, valuing the group at RM37.3 billion. Under the proposed voluntary takeover offer (VTO), IJM shareholders will receive RM315 in cash and 501 Sunway shares for every 1,000 IJM shares held. If completed, the enlarged group would rival Gamuda Bhd as Malaysia’s largest construction company by revenue. Analysts largely favour acceptance, Kenanga dissents Most research houses have recommended that IJM shareholders accept Sunway’s offer of RM3.15 per share, describing it as fair and providing valuation certainty. However, Kenanga Research stands out as the sole major dissenting voice. Kenanga advised shareholders to reject the offer, arguing it is below its RM3.40 target price for IJM and that the share-swap element overvalues Sunway. It noted that Sunway’s implied issue price of RM5.65 reflects a calendar year 2026 price-earnings ratio of 27.6 times, compared with 19.4 times for IJM under the offer. Based on Kenanga’s Sunway target price of RM4.73, the implied value of the offer for IJM would be only RM2.69 per share, below both its current market price and Kenanga’s target. Strategic upside highlighted Other analysts view the VTO as reasonable, pointing to IJM’s ability to monetise its investment at a fair valuation while gaining exposure to Sunway’s larger, more diversified earnings base. TA Securities said the offer’s valuation is broadly in line with IJM’s historical price-earnings multiples and close to its net asset value, making it attractive despite some analysts’ target prices sitting slightly above the offer. The transaction values IJM at around RM11 billion, with consideration comprising 90% new Sunway shares and 10% cash. Completion is subject to regulatory and shareholder approvals, including a minimum acceptance level of 50% plus one share, with completion targeted for the third quarter of 2026. Analysts also highlighted potential earnings accretion and synergies, including scale benefits, bulk procurement savings and operational efficiencies. They added that IJM could benefit from Sunway’s internal property development pipeline, which offers more predictable margins than open-tender construction projects. Sunway has indicated it does not intend to maintain IJM’s listing status, with analysts flagging possible consolidation of overlapping construction, manufacturing and quarrying operations following the deal’s completion.

MiniMax Group Inc, one of China’s leading generative artificial intelligence (AI) start-ups, surged in its Hong Kong debut after raising US$619 million in an initial public offering. The shares jumped 109% to close higher on Friday, after being priced at HK$165 (about US$21.17) per share in an upsized offering. Retail demand was exceptionally strong, with subscriptions exceeding the available shares by more than 1,830 times. Supported by investors including Alibaba Group Holding Ltd and Abu Dhabi’s sovereign wealth fund, MiniMax is among the first wave of China’s post-ChatGPT AI companies to list publicly. The strong debut followed a more muted listing by rival Knowledge Atlas Technology JSC Ltd, also known as Zhipu, which gained 13% on its first trading day last Thursday. According to UOB Kay Hian Hong Kong executive director Steven Leung, the rally reflects interest from both short-term traders and long-term institutional investors. He added that some capital may be rotating away from the US amid concerns over a potential AI market bubble. MiniMax’s performance suggests investor appetite in China’s AI sector is expanding beyond hardware manufacturers to include software-focused companies. Earlier, strong localisation demand had driven chipmakers Moore Threads Technology Co and MetaX Integrated Circuits Shanghai Co to post multi-fold gains on their Shanghai debuts. Zhipu extended its gains by a further 21% last Friday. Still, Bloomberg Intelligence analyst Marvin Chen cautioned that it remains early in China’s AI investment cycle compared with global peers, making it challenging for investors to clearly distinguish long-term winners from laggards.

Sunway Bhd announced on Thursday that one of its subsidiaries plans to raise up to RM10 billion through a sukuk wakalah programme to support working capital and refinance existing borrowings. Sunway Treasury Sdn Bhd, a wholly owned unit of Sunway City Sdn Bhd, which is in turn fully owned by Sunway, has submitted the necessary documents to the Securities Commission Malaysia for the sukuk programme, according to a Bursa filing. The sukuk programme will have a perpetual tenure, while each issuance will carry a tenure of over one year, with specific terms determined before issuance. The first tranche will be backed by a corporate guarantee from Sunway. Proceeds from the sukuk are intended for capital expenditure, investments, general corporate purposes, working capital, refinancing of both Shariah-compliant and conventional borrowings, programme-related fees, and inter-company advances within the Sunway Group. OCBC Al-Amin Bank Bhd has been appointed as principal adviser, lead arranger, lead manager, sustainability structuring adviser, and Shariah adviser for the programme. Last month, another Sunway subsidiary, Sunway Cochrane Sdn Bhd, proposed a separate RM2 billion sukuk wakalah programme to support working capital and expansion plans. As of September 2025, Sunway reported cash and bank balances of RM6.52 billion, with short-term debt of RM6.34 billion and long-term borrowings of RM6.08 billion. Shares of Sunway closed unchanged at RM5.58 on Thursday, giving the group a market value of RM38 billion.

Hang Seng Bank shareholders have approved HSBC’s plan to take the bank private in a move aimed at strengthening the Asia-focused lender’s footprint in Hong Kong. In a vote held Thursday, about 86% of shareholders backed HSBC’s proposal to acquire the 36.5% of Hang Seng shares it does not already own, in a deal valued at roughly US$13.6 billion. The plan now awaits approval from Hong Kong’s High Court, which will hold a hearing on January 23 to decide if the take-private transaction can proceed. If cleared, Hang Seng is expected to be delisted from the Hong Kong Stock Exchange on January 27. HSBC CEO Georges Elhedery said the strong shareholder support reflects confidence in Hang Seng’s business and the growth opportunities that full ownership under HSBC could unlock. The move aligns with HSBC’s strategy of expanding key operations while continuing selective divestments. Founded in 1933, Hang Seng Bank is one of Hong Kong’s largest banks, serving around four million customers across more than 250 branches and digital platforms. The bank has faced challenges in recent years due to its exposure to the Hong Kong and mainland Chinese property markets, and the acquisition will make it a wholly owned subsidiary of HSBC Asia Pacific.

China’s Anta Sports Products has made an offer to acquire a 29% stake in struggling German sportswear brand Puma from France’s Pinault family, according to sources familiar with the discussions. The offer was made several weeks ago, and Anta has already secured financing for the potential acquisition, two of the sources said. However, negotiations have since stalled, one source added. All sources spoke on condition of anonymity as the talks are private. The Pinault family’s investment vehicle, Artemis, is said to be seeking a price of more than €40 per share for its Puma stake, a separate source told Reuters. Artemis is led by François-Henri Pinault, chairman of luxury group Kering. The Pinault family acquired the stake in 2018, when Kering divested Puma as part of its strategy to become a pure luxury-focused group. Both Artemis and Puma declined to comment, while Anta did not immediately respond to a request for comment. Puma’s market capitalisation stood at €3.3 billion (US$3.85 billion or RM15.6 billion) at Wednesday’s close, roughly half its value a year earlier, as the company grapples with declining sales and weak consumer demand. The sportswear group appointed Arthur Hoeld as chief executive officer in October, unveiling a turnaround plan after recent sneaker launches, including the Speedcat, failed to gain traction. Sales have also suffered as consumers shifted towards competitors such as Adidas, On and Hoka. Hong Kong-listed Anta, known for acquiring and revitalising Western sports and lifestyle brands, has previously explored a bid for Puma. In 2019, Anta led a consortium that acquired Amer Sports, the owner of brands including Wilson and Salomon. A senior source close to Artemis said in September that the Pinault family viewed its Puma stake as non-strategic, but was unwilling to sell at the company’s then-prevailing valuation. Puma shares have since rebounded by about 15%. Artemis, which controls Kering, auction house Christie’s and talent agency CAA, has faced investor scrutiny over rising debt levels built up as the Pinault family diversified beyond luxury amid a slowdown in global luxury demand.