Investment & Market Trends

KOTA DAMANSARA: JF Technology Berhad (“JF Tech” or the “Group”), a leading innovator and manufacturer of high-performance test contacting solutions for global integrated circuit (“IC”) makers, announced its fourth quarter (“4QFY24”) and full year financial results today for the period ended 30 June 2024 (“FY24”). Managing Director of JF Technology Berhad, Dato’ Foong Wei Kuong, commented on the results, stating, “FY24 has been a challenging year for us on the back of the slowdown in the semiconductor sector and global uncertainties. Nevertheless, we continue to be positive on the long-term prospects of the Group especially with the positive signs for the industry. The World Semiconductor Trade Statistics (“WSTS”) is forecasting a 16.0% growth for global semiconductor sales in 2024 and 12.5% in 2025. Based on the growth projections, global semiconductor sales would reach $611.2 billion and $687.4 billion respectively for 2024 and 2025, which would be the highest-ever annual sales in total.” He further added, “Moving forward, our focus remains on gaining further traction for our 6 growth drivers. The Group made a breakthrough in August 2024, as we entered into a cross-distribution agreement with Ironwood Electronics, Inc. (“Ironwood Electronics”). Together, we will be leveraging on each other’s strong expertise and established network to further expand our geographical presence.” “Meanwhile, for our joint venture (“JV”) with Shenzhen HFC Co., Ltd. (“Shenzhen HFC”) to design and manufacture electromagnetic interference shielding materials, thermal interface materials, absorbing materials, etc., machine installation is ongoing and production will commence thereafter. On the other hand, the demand outlook for China remains encouraging, with utilization at our China facility continuing to increase. All in all, the long-term outlook of the Group continues to be bright supported by the aforementioned factors. Barring unforeseen circumstances, the Board expects the FY2025 financial performance to be satisfactory,” Dato’ Foong concluded in his comments.  Revenue for FY24 was RM41.6 million, down from RM45.4 million in the previous year, mainly due to softer demand for test contacting sockets. However, contributions from the test interface products division and Kunshan manufacturing facility partially offset these effects.  Revenue from China increased by 10.6% year-on-year (“YoY”) to RM15.0 million from RM13.6 million in FY23. Profit before tax (“PBT”) for FY24 was RM6.3 million, with a profit after tax and non-controlling interest (“PATNCI” or “net profit”) of RM5.8 million, compared to RM11.7 million and RM12.2 million respectively in the prior year. This was primarily due to shifts in product mix, share of loss of an associate, and impairment of intangible assets. JF Tech declared a final dividend of 0.25 sen per share for FY24 amounting to RM2.3 million, reflecting a dividend payout of 39.5% based on a net profit of RM5.8 million.  

KUALA LUMPUR & SINGAPORE: Malaysia Smelting Corporation Berhad (“MSC” or “the Group”), a prominent tin miner and metal producer, has released its financial results for the second quarter (“2QFY24”) and first half ended June 30, 2024 (“1HFY24”). In 2QFY24, MSC reported a 25.6% year-on-year increase in revenue to RM410.8 million, up from RM327.0 million in 2QFY23, driven by higher average tin prices. However, net profit attributable to owners declined to RM16.7 million from RM28.4 million in the same period last year. The tin smelting segment’s profit after tax fell to RM4.7 million compared to RM16.3 million in 2QFY23 due to scheduled maintenance of the Top Submerged Lance (“TSL”) furnace from mid-May to mid-July 2024, impacting production and revenue. Conversely, the tin mining business saw a 45.2% increase in profit after tax to RM24.9 million in 2QFY24, buoyed by favourable tin prices of RM153,400 per metric tonne compared to RM116,500/MT in 2QFY23. For the first half of FY24, MSC’s revenue grew 15.9% year-on-year to RM773.3 million, supported by higher average tin prices of RM139,100/MT compared to RM116,300/MT in 1HFY23. Net profit for 1HFY24 amounted to RM35.0 million, down from RM63.9 million in the prior year. Dato’ Dr. Patrick Yong, Group Chief Executive Officer of MSC, commented, “In the first half of 2024, we benefited from favourable tin prices driving top-line growth. However, our profitability was impacted by planned maintenance of the TSL furnace, reducing tin output and smelting income.” Looking ahead, Yong emphasized MSC’s commitment to enhancing operational efficiencies, including the phased closure of the Butterworth smelting facility by 2025 and consolidation at the Pulau Indah smelter in Port Klang. The Pulau Indah facility features a 1.26 megawatt-peak (“MWp”) solar photovoltaic system to lower carbon footprint and energy costs. “In tin mining, we aim to increase daily output and productivity through technology upgrades, expanded mining operations, and strategic partnerships,” Yong added. “These initiatives are integral to securing MSC’s sustainable growth, positioning us to tackle future challenges and seize opportunities in the tin industry.”  

KUALA LUMPUR: HE Group Berhad, a leading electrical engineering service provider, has released its second quarter (“2QFY24”) and six months financial results for the fiscal year ending December 31, 2024 (“FY24”). This marks the fourth interim financial report in compliance with Bursa Malaysia Securities Berhad’s ACE Market Listing Requirements. There are no comparative figures for the previous corresponding quarter as no interim financial report was prepared. In 2QFY24, HE Group demonstrated robust financial performance with sustained profitability and margin expansion. Despite a decrease in revenue to RM48.9 million from RM64.8 million in the preceding quarter (“1QFY24”) due to reduced work deliveries in its core segment, the company achieved a profit before tax (“PBT”) of RM5.6 million, compared to an adjusted PBT of RM5.5 million in 1QFY24 (after adjusting for listing expenses of RM2.7 million). The PBT margin for 2QFY24 improved to 11.4%, up from the adjusted 8.4% in the previous quarter, driven by a favourable project mix. The Power Distribution System segment remained the primary revenue contributor, generating RM31.9 million or 65.2% of total revenue in 2QFY24, followed by the Electrical Equipment Hook-Up and Retrofitting segment contributing RM10.5 million, accounting for 21.5% of revenue. For the six months ended June 30, 2024 (“1HFY24”), HE Group reported a PBT of RM8.4 million with revenue totalling RM113.7 million, resulting in a PBT margin of 7.4%. Mr. Haw Chee Seng, Managing Director of HE Group, commented, “We are pleased to announce another strong financial performance in 2QFY24. Building on earlier momentum this year, we are confident in maintaining this trajectory for the remainder of the fiscal year. Encouragingly, we are observing increased market activity with a growing pipeline of potential projects.” The Malaysian economy continued its robust growth in the second quarter of 2024, expanding by 5.9%, driven by strong domestic demand bolstered by increased household spending and investment activity in sectors like manufacturing and services. Government initiatives such as the New Industrial Master Plan 2030, focusing on high-value industries like electrical and electronics, are expected to propel economic expansion further. Mr. Haw added, “We are confident in our ability to execute our strategic plans, leveraging proceeds from our listing and a strong order book. Our focus remains on seizing growth opportunities within the energy transition sector, supported by governmental initiatives. Despite challenges in navigating a dynamic business environment, we remain optimistic about our prospects, aligned with the nation’s green agenda.”

KUALA LUMPUR: Although Islamic investments have become more popular in recent years, there is still a very limited selection of Shariah-compliant global derivatives products available to local investors.   Addressing this need is UOB Kay Hian Securities (M) Sdn Bhd who recently unveiled a curated list of global commodity futures that align with Shariah principles. The launch was officiated by CEO David Lim Meng Hoe and Professor Dato’ Dr. Aznan Hasan, Shariah Advisor for UOB Kay Hian.   Professor Dato’ Dr. Aznan’s expertise and guidance have been instrumental in ensuring the compliance of the selected global derivatives with Islamic principles.  “This marks a significant milestone in our commitment to supporting ethical investing in Malaysia. By providing access to these markets, we empower retail traders to achieve their financial goals while remaining steadfast with their religious values,” David Lim said in a statement at the product launch of its global Shariah derivatives.   “I am pleased to see more variety of Shariah-compliant commodity futures traded on global exchanges such as Bursa Malaysia Derivatives (BMD), New York Mercantile Exchange (NYMEX), Chicago Board of Trade (CBOT), and Singapore Stock Exchange (SGX) being accessible to local retailers,” said David Lim.  “This provides investors with greater flexibility and exposure to various asset classes meticulously reviewed to adhere to Islamic principles, ensuring that they are permissible under Shariah law. By investing in these products, investors can contribute to a more just and equitable financial landscape,” he added.  The launch included a brief presentation on the key characteristics of Shariah derivatives by Professor Dato’ Dr. Aznan. This was followed by a panel discussion themed “Shariah Derivatives and Personal Financial Planning” featuring Shariah market experts Ustaz Arham Merican, Managing Director, Sharlife Sdn Bhd and Alwi Adam, Principal of SmartSaham and EZAZ Wealth Group.   The panel discussion offered insights into the practical applications of Shariah derivatives including opportunities, strategies, advantages, and considerations for incorporating local and international derivatives products into existing portfolios. UOB Kay Hian futures broker representative Zuber Al-Awwam moderated the discussion. 

PULAU PINANG: Main-market listed leading insulation producer in Southeast Asia, PGF Capital Berhad (“PGF Capital” or the “Group”) (stock code: 8117), announced today that its wholly-owned subsidiary, NetZero Technology Sdn. Bhd. has entered into a Sales and Purchase Agreement (“SPA”) to acquire a piece of freehold land measuring approximately 96,720 square metres (equivalent to about 23.9 acres) in Pekan Padang Meha, Kulim, Kedah in a development to be known as “Kulim East Industrial Park” (the “Land”) from Senam Jaya Sdn. Bhd. (“Vendor”) for RM40.0 million (“Acquisition”). The Land shall be developed in phases. Under Phase 1, a new manufacturing plant will be built to increase the Group’s total annual insulation production capacity by 160% or 40,000 metric tonnes (“mt”), from the existing 25,000 mt to 65,000 mt. Construction of the new plant is slated to commence in early 2025, with commercial operations expected to begin by the first half of 2026. Meanwhile, Phase 2 of the expansion will add a further 20,000 mt of capacity, bringing the total to 85,000 mt, with completion anticipated by the first half of 2028. The Land is strategically located approximately 30 minutes from PGF Capital’s existing Perai manufacturing facility and 45 minutes from Penang Port, offering logistical advantages for the Group. The Acquisition, to be financed through a combination of internal funds and bank borrowings, is projected to complete within four calendar months from the date of SPA. Executive Director cum Group Chief Executive Officer, Mr Fong Wern Sheng, shared, “We are excited about the prospects this land offers, given its large acreage, which is sufficient to cater to our expansion needs for the next five years. Its strategic location, with close proximity to both our existing plant and the Penang Port, further enhances its value. We are building additional annual capacity of 40,000 mt to meet the growing demand driven by the global trend towards sustainability and energy efficiency. The increased focus on net zero targets presents significant opportunities for PGF Capital, as insulation plays a crucial role in reducing energy consumption and carbon emissions.” “At present, our operational expansion is buoyed by the surge in demand for insulation products, particularly in the Oceania market, where Australia’s stringent new energy efficiency building codes have significantly stimulated consumption. Furthermore, this expansion will also position us well to capture opportunities in other regions as demand for energy-efficient building solutions increases. Overall, we are optimistic on our future prospects.” To recap, PGF Capital has on 17 July 2024 established a strategic partnership with Centria Building Material Manufacturing (Shanghai) Co., Ltd. (“Centria International”), a global leader in advanced building materials, by signing a five-year distribution agreement for Centria International’s mineral wool sandwich panels in Malaysia, targeting industrial and commercial buildings, including data centres. This collaboration is expected to expand PGF Capital’s product portfolio and market reach to drive revenue growth. “The Group is exploring the possibility to jointly establish a local manufacturing facility with Centria International to produce insulated panels with both glass wool and stone wool cores. This Land in Kulim offers ample space to accommodate such potential expansion, positioning PGF Capital for long-term growth and market leadership in the insulation sector,” he concluded.

KUALA LUMPUR: Masteron Group – a premier property developer in Malaysia – announced its collaborative partnership with Maybank and The Makeover Guys (TMOG) to offer a complete homeownership solution for its newest launch in Puchong, the Astra at Aurora Residence. This collaboration is designed as a holistic solution for all three parties that assists Malaysians in reaching their major life milestones. Understanding the daunting process of home ownership – especially for first time buyers – is extremely daunting, with many significant decisions to be made from financing, to choosing a property, to even picking wall colours and fittings. As Malaysians buying their starter homes may become overwhelmed, this collaboration therefore aims to demystify and ease the process for home buyers to turn their units into fully integrated dream homes. With this partnership, prospective Astra at Aurora Residence home owners have access to both home ownership financing and home customisation financing, as well as a selection of furnishing packages provided by TMOG for Astra at Aurora Residence customers to choose from, worth up to RM45,000* (*terms & conditions apply). “It was really important to us to create a one-stop-shop for these first-time homeowners,” says Choy Kin Mann, Director of Masteron. “With 80% of our customers for Astra at Aurora Residence buying to stay, we knew we wanted to give them comfort and support from house to home. Now, we can do exactly that, covering these young home buyers from property purchase to financing to interior design. We’re very excited to not only continue Masteron’s long-standing relationship with Maybank – since our founding in 1981, in fact – but also to highlight our newer collaboration with TMOG as well.” Astra at Aurora Residence exemplifies modern living in Puchong Prima, designed with the idea of blending the lines between ‘live, work, and play’. These 728 serviced apartments, designed as starter homes for young families, feature New Urbanism-inspired designs that promote walkable, mixed-use, and diverse neighbourhoods, combining modern architecture with nature-centric facilities. With amenities like a hydroponic glass house, two swimming pools, and a communal herbs garden, the property is purpose-built for a lifestyle that is natural, timeless, and future-proof. Adding on to the home comforts provided within Astra at Aurora Residence, Maybank  MyDeco financing provides prospective home buyers further financial accessibility for options for interior design, furnishing, fittings, aesthetics, decorations and more. In fact, Maybank MyDeco financing provides up to 120% of the property value,  including additional 30% on top of existing financing or a maximum of RM250,000, whichever is lower. Financing is disbursed progressively over a 12-month period – with a repayment period of up to 10 years or until the age of 70, whichever comes first – ensuring flexibility, convenience, and providing liquidity for the customers. “We are thrilled to partner with Masteron and The Makeover Guys to make home ownership a joyful experience for Malaysians,” adds Tracy Pan, Head of Mortgage at Maybank. “Our goal is to simplify the entire home ownership journey, from securing a mortgage to creating a space you truly love. Maybank MyDeco financing empowers customers to not only purchase their dream home, but also personalise it to reflect their unique style. This collaboration is a testament to our commitment to putting our customers first and providing comprehensive solutions that meet their evolving needs. This is our drive and commitment to Humanising Financial Services: by easing our customers’ journey through putting our customers at the heart of everything we do.” “Creating a home goes beyond decorating and arranging furniture within four walls and a roof. Turning a house into a home means creating a space that offers comfort while showcasing the style of the people living there — which is exciting, no doubt, but can get overwhelming, especially in the rush of organising your first home. Our role here is to simplify the interior design process,” shares Gavin Liew, CEO and Founder of The Makeover Guys. “Our available selection of base templates has been curated to serve as a helpful starting point for homeowners, easing them into the design process with plenty of room for future growth.” With this three-way collaboration, future homeowners can look forward to having a fully integrated, end-to-end process to take their starter properties from a blank slate to their first home.  

KUALA LUMPUR: Kabal Software, a global leader in logistics software solutions for the energy industry, announced the acquisition of Trackit Energy, a move that will enable the company to offer enhanced support and significant benefits to its customers in the Asia Pacific region and beyond.   Kabal is renowned for its innovative software that streamlines logistics operations and empowers energy operators to achieve significant cost savings and operational efficiencies. Some of its key benefits to customers include 30% reduction in vessel costs and up to 50% reduction in rental equipment costs on top of minimized carbon emissions from operations.   As a specialist in workforce management, Trackit Energy has been expanding its offerings for the past decade. Over the years, it has built a strong team to service customers in the region’s energy space. With the acquisition of Trackit Energy, Kabal will be able to combine the complementary expertise and technologies of both companies to deliver even more comprehensive and efficient solutions to energy operators worldwide.   “With the increasing demand for efficient and cost-effective logistics solutions in the Asia Pacific energy sector, we are excited to expand our capabilities and offerings. By combining our expertise with Kabal’s cutting-edge logistics management platform, we will be able to provide our customers here with comprehensive, end-to-end logistics solutions, offering them even greater value for their operations,” said Kevin Best, Chief Executive Officer of Trackit Energy.   “We are excited to welcome Trackit Energy to the Kabal family,” said Jan Inge Pedersen, Chief Executive Officer of Kabal. “Trackit Energy has been a respected competitor over the years, and with their expertise combined with ours, we are poised to accelerate our growth in the dynamic energy industry. We look forward to helping our clients in this region to optimize operations, reduce costs, and minimize their environmental footprint by providing them with total control over all cargo, resources and transport.”

KUALA LUMPUR: Mah Sing Group Berhad (“Mah Sing”), a prominent Malaysian property developer, continues to exhibit robust performance, driven by strong demand for affordable housing and strategic expansion into the data centre (DC) sector. Strong Financial Performance in 1HFY24 Mah Sing reported a core net profit (CNP) of RM116 million for the first half of the fiscal year 2024 (1HFY24), marking a 19% year-on-year increase. This performance came despite a 12% decline in revenue, attributed to the early stages of new project sales that have yet to significantly contribute to the company’s top line. The improved CNP margin, rising to 10% from 7.5% in the previous year, underscores the company’s effective cost management and project execution. Affordable Housing Segment Remains a Pillar The company has secured RM1.7 billion in new sales year-to-date, achieving 66% of its FY24 sales target of at least RM2.5 billion. This success is largely driven by the affordable housing segment, which continues to see over 90% take-up rates. With multiple project launches planned in the second half of the year, including M Aspira, M Terra, and M Zenya, Mah Sing is well-positioned to exceed its sales targets. Strategic Expansion into Data Centres In addition to its property development business, Mah Sing is making significant strides in the data centre sector. The initial collaboration with Bridge Data Centres for up to 100MW capacity at Southville City has set the stage for further expansion. The company is currently in advanced negotiations for an additional 90MW project and is exploring the sale of 42 acres of land at its Meridin East township in Johor Bahru to a data centre player. This move could generate a disposal gain exceeding RM100 million, contributing significantly to Mah Sing’s FY24 net profit. Outlook and Valuation AmInvestment Bank has maintained its “BUY” rating on Mah Sing with an unchanged fair value of RM2.11 per share, based on a sum-of-parts (SOP) valuation. The stock trades at a price-to-earnings (P/E) ratio of 14x for FY25, offering a fair dividend yield of 3%. The bank’s positive outlook is supported by Mah Sing’s agile business model, strong focus on affordable properties in high-demand areas, and strategic foray into Malaysia’s booming data centre industry. As Mah Sing continues to leverage its core competencies and explore new growth avenues, the company remains well-positioned for sustainable long-term growth, backed by strong financials and strategic initiatives. Analysts’ reports maintain BUY call on Mah Sing respectively: UOBKayHian – 2Q24: Results Within Expectations; Achieves RM1.66b In Sales (TP: rm2.29) TA Securities – Steady Performance (TP: RM2.11) RHB – Awaiting More DC Deals To Come; BUY (TP: RM 2.26) CIMB Securities – 1H24 results inline; DC plans taking shape (TP: RM2.10) AmInvestment Bank – Robust demand for affordable homes with DC catalysts (TP: RM2.11)