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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.

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

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

ATX Semiconductor to Boost Investment in Melaka to RM952 Mil

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MELAKA: ATX Semiconductor Group, a globally renowned semiconductor provider from China, intends to ramp up investment to US$200 million (RM952 million) for its new manufacturing plant in Melaka, over the next five years for its second-phase business expansion. Chief executive officer Chris Hsu said the company has already invested more than US$55 million (RM258 million) in the group’s inaugural manufacturing facility outside of China, in Free Trade Zone III, Batu Berendam here. Hsu added that production is slated to commence in the first half of 2026. “The new facility has initiated manufacturing activities and will expand production capacity to better serve customers in Malaysia and surrounding regions,” he said during a press conference following the opening ceremony of ATX Semiconductor (Melaka) Sdn Bhd here today. Hsu highlighted the potential for job creation, with over 2,000 jobs expected to be generated in the coming year. He emphasised the positive impact on the economy and employment opportunities in Melaka as well as the facilitation of technology transfer and talent development between China and Malaysia. The event was also attended by Melaka State Women’s Affairs, Family Development and Welfare Committee chairman Datuk Kalsom Nordin. Hsu commented on ATX Group’s strong presence in China, with leading packaging and test solutions, and noted that the new facility in Melaka would leverage this expertise. “ATX currently operates six manufacturing plants worldwide, with five in China and one in Melaka. “This plant marks not only the first ATX Semiconductor facility in Malaysia but also the first ATX manufacturing plant outside China,” he added. Hsu added that ATX’s products and services cater to various industries, including communication, automotive, consumer, industrial, high-performance computing and medical sectors. – BERNAMA

News, Property

JLL Malaysia’s Report: Real Estate Investment Trends and Market Insights

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KUALA LUMPUR: The Malaysian real estate market is experiencing a resurgence following the challenges of the pandemic. As interest rates stabilize and investor confidence rebounds, investment activity is gaining momentum. Notably, towards the latter part of 2023, investment volumes exceeded expectations, indicating a positive shift in market sentiment. With improving consumer sentiment and government initiatives supporting infrastructure development, the market is witnessing renewed interest from both domestic and international investors. This report delves deeper into the factors driving this resurgence and offers valuable perspectives for stakeholders navigating this evolving landscape. Dominant Investment Trends Industrial and logistics land transactions emerged as the dominant trend in 2023, constituting 57% of the total investment volume. This surge was driven by the escalating demand for logistics infrastructure, fueled by the rapid growth of e-commerce and the implementation of the “China plus one” strategy. Simultaneously, the data centre segment witnessed growth, with investors focusing on land acquisitions for future development, attracted by lower costs compared to purchasing existing properties. Logistics and industrial assets commanded a significant portion of the total transaction value in 2023, underscoring their resilience and attractiveness to investors. Conversely, traditional segments such as offices and retail experienced subdued activity, primarily involving Grade B assets. Critical Investments for 2024: Key Strategies for Success The year 2024 commenced with notable investment transactions that are set to bolster portfolios and yield promising returns. Sunway REIT’s acquisition of 163 Retail Park for RM215 million and KLCC Property Holdings Bhd’s purchase of Suria KLCC Sdn Bhd’s remaining equity for RM1.95 billion are strategic moves poised to enhance their market positions. The office submarkets observed subdued movement, with local investors increasingly opting to purchase buildings for owner-occupier purposes. This strategic shift underscores a preference for owning office spaces over leasing, driven by factors such as enhanced branding and visibility. Optimistic Market Outlook Looking ahead, market sentiment remains positive, supported by favourable macroeconomic indicators. Both local and international investors are actively exploring opportunities across sectors. The recent government initiative advising major government-linked companies (GLCs) to allocate more investments domestically is expected to stimulate demand, particularly in logistics, data centres, and healthcare and educational assets. The interest shown by large multinational investors and sovereign funds in participating in large-scale development projects reflects growing confidence in Malaysia’s real estate sector. Their involvement signifies broader investor interest and underscores the market’s growth potential. In conclusion, JJL Malaysia remains committed to providing expertise and guidance in navigating the evolving real estate landscape. With strategic insights and cautious optimism, investors can leverage emerging trends to capitalize on market opportunities and drive sustainable growth.

Investment & Market Trends, News

ANCOM NYLEX Achieves Record-Breaking Earnings in First Nine Months

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PETALING JAYA: In the nine months ended February 29, 2024, Ancom Nylex achieved revenues of RM1.51 billion. The net profit increased by 10.7% year-over-year, reaching an unprecedented RM63.0 million for the same period, marking the first time it has exceeded RM60 million. The growth was primarily fueled by the Agrichem segment, which experienced robust sales of higher-margin products, leading to a 23.4% year-on-year increase in Earnings Before Interest and Tax (EBIT) to RM79.3 million. Managing Director and Group CEO, Lee Cheun Wei commented on the positive outlook, highlighting strategic initiatives such as new AI developments and operational enhancements to strengthen the Group’s market position. He also emphasized plans to expand product offerings in Latin America and optimize operations in the Industrial Chemicals segment. During the third quarter (Q3) of FY24, revenue rose to RM516.8 million, driven by growth in the Agrichem and Industrial Chemicals segments. Net profit for the quarter increased to RM20.1 million, reflecting improved sales of higher-margin products within the Agrichem segment. Additionally, Ancom Nylex announced the proposed acquisition of Green Lagoon Technology Sdn Bhd, aligning with its commitment to environmental responsibility and Malaysia’s renewable energy targets. This strategic move reinforces the Group’s aim for full decarbonization by 2025.

Investment & Market Trends, News

World Bank Urges Malaysian Government to Set Clear Revenue Target in Tax Reform

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KUALA LUMPUR (April 22): The World Bank recommends that the Malaysian government specify the revenue targets for its reforms to avoid an ad hoc approach to taxation. Dr. Apurva Sanghi, the World Bank’s lead economist for Malaysia, emphasized the importance of setting clear revenue goals to enable the government to implement appropriate tax policies effectively and in a timely manner. He noted that Malaysia has been collecting insufficient taxes and needs to increase revenue. During a media briefing on the World Bank’s April 2024 Malaysia Economic Monitor report titled “Bending Bamboo Shoots: Strengthening Foundational Skills,” Dr. Apurva stated, “Our main point is the necessity of publicly announcing a revenue target.” Malaysia has been striving to reduce a persistent fiscal deficit that originated during the 1998 Asian Financial Crisis. Recently, the government has implemented various measures such as reducing subsidies and introducing new taxes to address its fiscal challenges. To mitigate the impact on living costs, the government has committed to providing cash and other forms of assistance. This year, the government aims to reduce its budget deficit to 4.3% of economic output from 5% last year. In addition, Dr. Apurva Sanghi emphasized that the Malaysian government’s recent steps to broaden the tax base, including the introduction of a capital gains tax and an expanded services tax, are a positive move but fall short of addressing the revenue shortfall. He stressed that establishing a specific revenue target would enable better communication of tax reform decisions to the public and industry stakeholders, providing clarity on the amount of additional revenue needed. “The question is how much more?” Dr. Apurva emphasized. “What should the target be, should it be from 12.6% to 13% or 14%?” He noted that tax collection as a percentage of gross domestic product (GDP) is projected to increase to 12.8% in 2024 from 12.6% in 2023, which is still significantly below the regional average of 25%. “When you don’t set a target, you don’t know where you’re going; there are many roads to take,” he explained. “So it’s very important to know where you’re going.” At the same event, World Bank senior economist Chong Yew Keat highlighted that setting revenue targets is a standard practice in developed economies, where targets are based on the country’s structural spending. For instance, he explained that an ageing population would lead to increased spending on areas like healthcare as a percentage of GDP. “This approach ensures that the government takes a longer-term perspective and ensures that the revenue increase is sufficient, allowing for tax policy to be more strategically timed and sequenced over time,” he added.

Malaysia Aims to be in Top 20 Countries in Global Startup Ecosystem Index by 2030, Says PM Anwar
News

Malaysia Aims to be in Top 20 Countries in Global Startup Ecosystem Index by 2030, Says PM Anwar

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KUALA LUMPUR, April 21 — Malaysia aims to be among the top 20 countries in global startup ecosystem index by 2030 and turn Kuala Lumpur into a regional startup and digital hub, Prime Minister Datuk Seri Anwar Ibrahim said today. He added that the two-day KL20 Summit 2024, which begins tomorrow, would be a forum to facilitate startups in high-value investments and will encourage startups to expand abroad to benefit from a complete global ecosystem. “I appreciate partnerships from venture capitalist firms and investors who are part of this summit. It’s important that government policies consider their long-term perspectives and strategies. “I stress my government’s determination to support startups through clear policies that encompass our country’s vision, strength of resources and investor perspectives,” he posted on Facebook after attending the KL20 Summit 2024 exclusive dinner. He added that the Madani Government remains committed to creating a dynamic startup ecosystem to position Malaysia as a central hub for entrepreneurship and innovation. The prime minister is slated to officiate the summit, that will take place at the Kuala Lumpur Convention Centre, tomorrow. — BERNAMA

Investment & Market Trends, News

Maxis Invests RM813 Mil To Enhance Network And IT Capabilities

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KUALA LUMPUR: Maxis Bhd has invested RM813 million in FY2023 to enhance its mobile network capacity, grow its fibre-to-premise footprint and improve digitalisation across the company. Its Chief Executive Officer Goh Seow Eng said that at the end of 2023, Maxis has more than 11,000 LTE sites in Malaysia, covering 95% of the population and connecting an additional 181,000 premises with its fibre infrastructure. “We continue to record a high touch point net promoter score of +68, thanks to the loyalty of our customers and their satisfaction with our products and services,” he said in the company’s annual report. According to Goh, Maxis has improved its Maxis and Hotlink apps to enable features such as plan upgrades, device purchases, roaming passes and credit top-ups to be completed with as few clicks as possible. It will also focus on digitalising customer interactions to ensure faster, more accessible and reliable service and is confident that Maxis will strengthen its position as Malaysia’s leading integrated telco. “Our long-term goal remains firmly set on sustainable and predictable business growth. “Despite the intensifying competition and ever-changing regulatory landscape, we are confident that our agility and fast response allow us to seize opportunities that may arise from these developments,” he added. Maxis’ net profit for the financial year ended 31 Dec 2023 (FY23) fell 16.8% to RM993 million from RM1.15 billion in FY22. However, its revenue increased to RM10.18 billion from RM9.79 billion a year ago, with the total revenue growing 4% while underlying service revenue, excluding low-margin wholesale voice service terminated in the fourth quarter of 2022 (4Q22) grew 4.2% year-on-year (YoY). Preparing For The Digital Future Moving forward, Maxis plans to further explore automation and AI capabilities for improved operational efficiency while maintaining its focus on the company’s strategic initiatives. The company also plans to incorporate sustainability elements into its supply chain in the long run. “Our long-term vision focuses on evolving into a cyber-resilient digital telecommunications company. We expect threats against mobile networks, systems and attempts to compromise data to grow more advanced and persistent. “At the same time, our interconnected supply chains create new risks. We pre-empt this through our investment into resources, capabilities, AI/ML (machine learning)-led capabilities, targeted automation and strong partnerships,” Goh added.

Energy & Technology, News

Over RM90 Bil Investment Needed to Fund Crucial Energy Projects In Malaysia

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KUALA LUMPUR: According to Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad, Malaysia would need an allocation of RM60 billion to RM90 billion from the government for the next 10 years to fund critical projects revolving around energy transition. The projects would involve improving the public transportation sector, strengthening grid infrastructure and workforce upskilling. Nik Nazmi explained that it is important to have a robust and adaptable grid to handle the increasing reliance on renewable energy sources. He also added that the estimated cost for the grid alone could reach over RM180 billion by 2050. He said this during a memorandum of understanding (MoU) signing ceremony between Bursa Malaysia and the UK government’s Mobilising Institutional Capital Through Listed Product Structures (MOBILIST) programme in Kuala Lumpur today. Nazmi said that the collaboration – aimed at enabling greater investment and advancing the UN’s Sustainable Development Goals (SDGs) in Malaysia – will be a catalyst for positive change that could encourage more green investments across the region. “Our thanks also go to the UK government for its leadership in establishing this programme. This collaboration on sustainable finance builds on a strong foundation of collaboration between our countries, such as the existing MoU between the UK and Malaysia to jointly work towards addressing climate issues,” he added. Improving Electricity Supply In Sarawak Meanwhile, Sarawak Energy Bhd provided an allocation of RM42 million last year to finance several improvement projects in Sibu, Kanowit, Kapit, Daro and Dalat, which will ensure the stability of electricity supply to consumers. Earlier this month, the company’s Group Chief Executive Officer Datuk Sharbini Suhaili said that the allocation is used to fund the construction of a new substation in Kemuyang (Sibu). The new substation is aimed at increasing the electricity supply and managing the distribution system. He also mentioned that Sawarak Energy will implement a smart grid project to help achieve the desired level of supply security and reliability. The smart grid project is expected to be fully implemented by 2025. “As the main electricity supplier in the state, Sawarak Energy achieved an almost full electricity rate throughout the state,” Sharbini added. — BERNAMA

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