Latest news with #RHBResearch
New Straits Times
18 hours ago
- Business
- New Straits Times
Binastra building strong future with expanding project pipeline
KUALA LUMPUR: Binastra Corp Bhd is expected to achieve stronger earnings in the coming quarters as more projects progress along the S-curve, said RHB Research. The firm remains optimistic about the company's prospects, projecting a three-year compound annual growth rate of 132 per cent for its financial year 2025 (FY25) to FY28 earnings. "This is largely in tandem with its anticipated order book growth, backed by the expansion of its key clients beyond the Klang Valley," it said in a note. Binastra Corp has secured RM977 million in new jobs year-to-date for FY26, against the firm's internal job win target of RM4 billion (FY25 job replenishment of RM3.1 billion). "We envisage the remaining approximately RM3 billion that Binastra needs to secure (to hit the RM4 billion new job win target for FY26) to partly come from five mixed-development projects awarded by its key clients." Based on RHB Research's estimates, there could be another circa RM500 million in potential jobs on the remaining two plots of land at Jalan Kebun Teh. Exsim Development Bhd also has several other land parcels in Johor Bahru near New York Hotel and at Jalan Lumba Kuda, which could yield a cumulative gross development value of over RM3 billion, or a potential construction value exceeding RM1.5 billion, it said. Binastra Corp recorded a first quarter FY26 core profit of RM25.1 million, meeting 19 per cent of RHB Research's and the street's full-year projections. "No changes to our earnings estimates as we deem results to be in line with our expectations. Therefore, we maintain our 'buy' call on the stock, and our target price of RM2.64 remains," it added.
The Star
a day ago
- Business
- The Star
Tech sector on the upswing as recovery emerges
RHB Research said it believes Malaysia stands to benefit from US-imposed tariffs via short-term rushed orders and long-term manufacturing reallocation activity. PETALING JAYA: RHB Research remains positive on the local technology sector despite muted earnings in the first quarter of the year (1Q25), as stronger revenue trends and optimistic guidance from many companies point to a continued recovery. 'Engineering support players continue to book robust revenue growth – seen as a precursor to growth for automated test equipment manufacturers as well as outsourced semiconductor assembly and test players,' the research house said. RHB Research expects stronger numbers in the second quarter and second half of the year, supported by a broader recovery across the semiconductor supply chain. It forecast earnings growth for the sector at 2% year-on-year (y-o-y) for this year and 40% y-o-y next year. 'Order and revenue trends remain constructive, supported by a sector recovery and potential front-loading activities, despite the ongoing trade uncertainty. 'Most management teams have adopted an optimistic tone due to stronger loadings with the replacement cycle, new product introductions, demand recovery, and technology advancements. These trends are further bolstered by new opportunities emerging from the China Plus One and Taiwan Plus One strategies to diversify supply chains,' RHB Research added. The research house said it believes Malaysia stands to benefit from US-imposed tariffs via short-term rushed orders and long-term manufacturing reallocation activity. 'The country's robust ecosystem, talent pool, and infrastructure provide a competitive advantage. While excessive inventory build-up could raise demand uncertainty, the sector remains in an upcycle, showing minimal signs of major disruptions so far,' RHB Research said. It pointed out that after the industry's sell-down, the sector's valuations have become compelling, offering an attractive risk reward ratio. The research house said the sector is trading at 20 times its forward price-earnings ratio and expects a re-rating as earnings strengthen and global uncertainties ease. Reviewing the sector's 1Q25 results, RHB Research said the results were largely in line with expectations, with five companies under its coverage meeting projections and one outperforming estimates. However, three companies had numbers that missed expectations, due to slower order recognition, margin compression, and foreign exchange impacts. It pointed out that most players booked declining earnings, except for Coraza Integrated Technology Bhd , which maintained its revenue despite margin pressures from average selling price erosion, pre-opening expenses, and higher costs. RHB Research's top picks for the sector are Malaysian Pacific Industries Bhd and Unisem (M) Bhd which are key beneficiaries of the chip sector's recovery, China's demand rebound, and the commencement of new programmes and customers. It added that CTOS Digital Bhd was a standout as it leveraged the digitalisation trend and has exposure to the fintech segment.
The Star
a day ago
- Automotive
- The Star
Auto sales likely to ease
RHB Research maintained its 2025 vehicle sales forecast at 730,000 units. PETALING JAYA: The automotive sector's total industry volume (TIV) rose by 12.4% month-on-month in May, reaching 68,007 units compared with 60,527 units in April. In a statement, the Malaysian Automotive Association (MAA) said the higher TIV was due to more working days in May compared with April, ongoing strong promotional activities and the delivery of vehicles from bookings made in the first quarter of 2025. However, on a year-on-year basis, MAA said the TIV fell by 3.2% from the 70,254 units recorded in May 2024. MAA noted that a total of 65,970 vehicles were produced in May, down 11.6% from the same month last year. 'TIV for June is expected to be lower than May due to a one-week plant shutdown during Hari Raya Aidiladha by major makes,' MAA said in its outlook for June. Meanwhile, RHB Research said auto sales momentum is expected to ease further in the coming quarters due to the lack of catalysts, softening order backlogs and a high base effect from 2024. The research house maintained its 2025 vehicle sales forecast at 730,000 units, representing an 11% year-on-year (y-o-y) decline from the record high of 816,747 units last year. 'We do not see any compelling catalysts for 2025 auto sales to be maintained at elevated levels,' it said. RHB Research noted that its forecast aligned with the year-to-date April TIV of 248,700 units – a 5% y-o-y drop – which made up 34% of its full-year assumption. The research house remained cautious on the sector, citing 'ongoing price competition in the non-national segment and softening order backlogs.' 'We anticipate TIV to soften y-o-y in the second quarter of this year (2Q25), due to the declining order backlogs, shorter working quarter as a result of the long festive holidays, as well as scheduled factory maintenance shutdowns by major carmakers.' While the expiry of tax exemptions for fully imported electric vehicles (EVs) after 2025 could lead to a short-term spike in EV sales, RHB Research said the impact on overall TIV would be minimal. 'The local EV market remains modest, accounting for about 2% of total car sales. Hence, it is unlikely that a surge in EV demand would materially move the TIV needle in 2025,' it said. In line with its 'cautious' outlook, RHB Research has maintained its 'neutral' call on the sector. 'We maintain our sector weighting –premised on a lack of catalysts to drive sales and earnings to new highs.' RHB Research said sector earnings for 1Q25 were largely underwhelming, with two out of four companies under its coverage – Sime Darby Bhd and Tan Chong Motor Holdings Bhd – coming in below expectations, while MBM Resources Bhd and Bermaz Auto Bhd were in line. Despite the miss, Sime remained its sole 'buy' call within the sector, supported by robust mass-market brand contributions from Perusahaan Otomobil Kedua Sdn Bhd or Perodua and Toyota Motor Corp. 'Automotive sales volumes may slow, but solid contributions from mass-market brands – Perodua and Toyota – should cushion the impact (for Sime).' On the policy front, RHB Research highlighted that the rationalisation of the RON95 fuel subsidy is set to proceed as reaffirmed by the prime minister. 'While details remained limited, earlier indications may point to a rollout in the second half of 2025. 'Nonetheless, we believe the policy will raise vehicle ownership costs. This could accelerate EV adoption or lead some consumers to downtrade, especially given the limited affordable EV options. 'Public transport may gain traction as an alternative, but much will depend on how the policy is executed,' it added.
The Star
a day ago
- Business
- The Star
Scientex's property arm offsets packaging woes
UOBKH Research said the group's outlook appears mixed. PETALING JAYA: Scientex Bhd 's financial performance is likely to be propped up by its property development arm, driven by demand for affordable housing. This comes as its plastic packaging division continues to struggle with external challenges, particularly stiff competition from Chinese manufacturers and foreign-exchange (forex) losses. The company's third-quarter results for the period ended April 30, 2025 (3Q5), released on Wednesday, showed continued weakness in its packaging arm. UOB Kay Hian (UOBKH) Research noted that fierce competition from China and unfavourable forex movements resulted in margin compression. The research house, which maintained its 'buy' call on the stock with a higher target price of RM4.10 (up from RM4.05), said the group's outlook appears mixed. While property earnings remain robust, amid recent landbank acquisitions signalling upcoming launches, the plastic packaging business faces structural headwinds from Chinese supply. 'As a result, we believe the property segment will remain the main growth driver for Scientex in the near term, pending potential consolidation in the packaging industry,' it said. The research house added that forecasts for the financial year ending July 31, 2025 (FY25), to FY27 have been revised downward to account for lower margins in the packaging arm. RHB Research shared that Scientex's management believes the plastic packaging market will remain challenging in the near term, especially in the industrial sub-segment. However, a rebound is anticipated in 2026, supported by returning demand for the consumer sub-segment, which makes up 45% to 50% of total packaging revenue. 'On the property business, we are optimistic that Scientex is on track to achieve its property launch target of more than RM2bil for FY25. 'Hence, we continue to expect the property segment to be the main earnings contributor in the coming quarters,' the research house said. RHB Research remains 'neutral' on Scientex, lowering its target price to RM3.50 from RM3.70 and cutting earnings assumptions for FY25 to FY27. Meanwhile, TA Research noted that Scientex's management expects sustainable packaging demand to remain strong despite the subdued outlook. 'On a positive note, we expect average selling prices and volumes for consumer packaging to remain stable, supported by a wider range of product offerings and designs for customers,' it said. The research house maintained its 'buy' call but trimmed its target price to RM4.85 from RM5.54 and cut earnings forecasts for FY25 to FY27, It said Scientex plans to launch 8,000 affordable housing units in FY25, up from 6,336 in FY24. Kenanga Research kept its 'market outperform' call and target price at RM3.60, noting downside risks have largely been priced in. However, it flagged the need to monitor resin prices, a key plastic packaging raw material, due to recent surge in crude oil prices.
New Straits Times
2 days ago
- Business
- New Straits Times
Malaysia poised to benefit from US-China tech decoupling
KUALA LUMPUR: Malaysia's technology sector is well-positioned to benefit from ongoing United States-China trade tensions as global manufacturers seek to diversify their supply chains, according to RHB Investment Bank Bhd (RHB Research). The firm said the country's established semiconductor ecosystem, strong infrastructure and skilled talent base give it a competitive edge amid shifting production strategies, particularly under the "China Plus One" and "Taiwan Plus One" frameworks. "Malaysia stands to benefit from US-imposed tariffs via short-term rushed orders and long-term manufacturing reallocation activities," said analysts Lee Meng Horng and Miza Izaimi in a research note today. They said companies are increasingly mitigating geopolitical risks by relocating part of their operations to alternative locations in Asia, and Malaysia remains a top choice due to its track record and capacity. "The country's robust ecosystem, talent pool and infrastructure provide a competitive advantage," they added. RHB Research maintained a positive outlook for the technology sector despite near-term demand uncertainties stemming from excessive inventory build-up. It said the technology upcycle remains intact, with little evidence so far of major disruptions from global trade frictions. It also noted that Malaysia's position in the global semiconductor supply chain is expected to strengthen as multinational firms seek more resilient and diversified manufacturing bases. "The sector remains in an upcycle, showing minimal signs of major disruptions so far," the firm said. Despite macroeconomic uncertainties and ongoing trade challenges, RHB Research expects structural shifts in global supply chains to support Malaysia's long-term growth in high-tech manufacturing.
