Latest news with #CGSInternationalResearch
The Star
09-06-2025
- Business
- The Star
QL Resources growth trajectory remains intact
PETALING JAYA: CGS International Research (CGSI Research) expects QL Resources Bhd 's potential expansion into adjacent verticals could possibly bolster further growth for the agro-based group moving forward. Following a recent analysts' call with the QL Resources' management, the research house said 'apart from expanding its product range in the proteins business, which we assume encompasses its ongoing ventures in broiler chickens and aquaculture, the group's management alluded to the need to have better control over the supply chain of its products, potentially expanding its retail reach outside of convenience stores. 'While no further details were provided, given QL Resources' success with the Family Mart franchise, this seems a credible opportunity to plug the earnings gap from the sale of its plantations business,' CGSI Research said in a report yesterday. 'With a net gearing of less than 10%, this provides the group with financial flexibility, in our view,' the research house added. QL Resources' management also provided a neutral outlook on its earnings for its financial year ending March 31, 2026 (FY26) . It expects the combination of egg subsidy rationalisation (five sen each in May and August this year) coupled with the lifting of the price ceiling by Aug 1 to lead to a normalisation in profits on subsidised eggs to between three sen and four sen per egg. 'An expansion of its branded egg segment, currently around 20% of eggs, is hoped to lift profitability over time,' added CGSI Research. Management was also upbeat on the clean-energy business under 53%-owned BM Greentech Bhd , whose pre-tax profit jumped 35% year-on-year (y-o-y) to RM73.5mil in FY25 helped by the acquisition of solar company Plus Xnergy in July 2024. The research house upgraded the stock from a 'reduce' call to 'hold' following its 10.9% share price decline over the past six months, but at a lower target price of RM4.37 per share. 'We believe QL Resources' 30.5 times calendar year 2026 price-earnings ratio better reflects its 14.3% recurring return on equity, but the upside is likely to be capped by slowing earnings growth in FY26,' it noted.
New Straits Times
25-05-2025
- Business
- New Straits Times
Inflation seen moderating on weaker demand, slower policy rollout
KUALA LUMPUR: A potential delay in policy reforms, due to softening domestic activity and external demand risks, is expected to moderate inflation growth in the near term, said CGS International Research. The research house said recent macroeconomic data showed a decline in domestic demand, while tariff threats from United States presidential candidate Donald Trump may further weigh on sentiment. As a result, it expects the Malaysian government to adopt a more cautious approach in implementing reform policies. "Given the modest consumer price index (CPI) growth, softer global commodity prices, and delay in price reforms, we revise lower our 2025F CPI growth forecast to 2.0 per cent year on year (yoy) from 2.3 per cent previously. "Trend-wise, we still think prices will begin to elevate from the second half of 2025 onwards towards 2026," it said in a note. Meanwhile, CGS International believes there will be minimal impact on inflation following removal of eggs subsidy. On April 30, the Agriculture and Food Security Ministry announced that Malaysia would discontinue price controls on eggs starting May 1, as part of the government's gradual adjustment of subsidies. CGS International Research said the decision to lift price controls signals that input costs and egg supply have stabilised. "As such, we believe the potential for future price spikes in eggs is unlikely despite the removal of price caps. In terms of fiscal, we estimate this could save the government around RM400 million in 2025 subsidy expenses. "Overall, we think this may lead to a minimal impact on 2025F CPI (eggs portion in the CPI basket is only 0.4 per cent)," it added.
