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New Straits Times
6 days ago
- Business
- New Straits Times
Consumer sector set for boost from cash aid, fuel reforms — analysts
KUALA LUMPUR: Consumer sector, including food and beverage (F&B), will receive immediate boost from the government's latest cash handout and fuel subsidy reforms, analysts said. The stimulus should also provide a modest upside for banks, while consumer-linked real estate inverstment trusts (Reits) may gain from higher tenant sales, improving occupancy and rental performance. Datuk Seri Anwar Ibrahim on Wednesday announced a one-off RM100 cash aid totalling RM2 billion under Sumbangan Asas Rahmah (Sara) as part of fiscal measures to address rising cost of living. The prime minister also announced a lower RON95 petrol price to RM1.99 per litre to ease transportation costs for the public and a freeze of scheduled toll price hikes on 10 highways. Analysts said the likes of Nestle (M) Bhd, Fraser & Neave Holdings Bhd, QL Resources Bhd and Farm Fresh Bhd should benefit from increased demand for staple F&B products, many of which may be eligible for purchase using the RM100 credit. The retailers expected to benefit from these initiatives include 99 Speed Mart Retail Holdings Bhd, Aeon Co (M) Bhd, Eco-Shop Marketing Bhd and Mr DIY Group (M) Bhd. Hong Leong Investment Bank Bhd (HLIB) said the one-off cash transfer and lower RON95 price for the majority of Malaysians is supportive of private consumption. "Assuming the full RM100 must be spent to realise the benefit, we estimate the RM2 billion would increase private consumption growth by about 0.2 percentage point. "The additional cash transfer of RM2 billion translates to 0.1 per cent of gross domestic product (GDP)," it added. HLIB noted that the direct cash injection into consumers' wallets from Aug 31 is timely and will help sustain spending momentum heading into the fourth quarter of 2025. "We expect 99 Speedmart and Aeon to benefit from these developments. 99 Speedmart, with 2,800 outlets nationwide and an average basket size of RM21.40, is particularly well positioned to capture recurring spend from consumers using Sara credits. "Aeon, with its urban footprint and diversified merchandise, may see uplift from middle-income segments with improved purchasing sentiment," HLIB said. CIMB Securities continues to favour companies within the consumer sector that benefit from stable demand for essential goods and are well-placed to tap into downtrading trends by catering to the mass-market segment. "We are keeping our earnings forecasts unchanged at this juncture, as we believe the announced fiscal support measures will underpin our existing revenue growth assumptions for the stocks under our coverage," it added. The consumer sector is currently trading at 27.2 times its one-year forward price-to-earnings ratio, which is just over one standard deviation below its five-year average of 29.1 times, CIMB Securities said. It said the current valuations are reasonable, taking into account subdued consumer sentiment, the higher sales tax on discretionary items, boycott-related impacts on certain brands such as Nestlé and Berjaya Food Bhd, as well as rising costs linked to the expanded sales and service tax (SST) on rental expenses. MBSB Research, formerly MIDF Research, expects the consumer discretionary segment to register the most immediate upside. This is given its sensitivity to short-term demand shifts and sentiment. "Likely beneficiaries include Aeon (broad retail exposure), Padini Hodlings Bhd (affordable fashion), Oriental Kopi Holdings Bhd (F&B) and 99 Speedmart, which commands strong traction among price-sensitive urban and semi-urban consumers," it said. The consumer staples segment, MBSB Reserach said, remains structurally resilient, with consistent volume support driven by essential nature of demand and targeted cash disbursements. Players such as F&N, Life Water Bhd and Leong Hup International Bhd are poised to benefit from steady consumption of beverages, bottled water and poultry products. Meanwhile, HLIB said the government is likely to see a slight rise in subsidy expenditure due to the lower subsidised fuel price from RM2.05 to RM1.99 per litre. However, this is expected to be fully balanced out by the targeted subsidy rationalisation measures, lower global oil prices and a stronger ringgit. "At the same time, the government has already implemented SST expansion in July 2025 with a target of RM5 billion additional revenue for 2025. Taking all this into account, we maintain our fiscal deficit projection of 3.8 per cent of GDP," it said. HLIB has a positive view of the government's "appreciation package", highlighting the Sara credit as a key component. "With RM2 billion allocated, this one-off aid, redeemable at over 4,100 outlets and local grocers broadens the impact beyond the B40 segment by providing per capita support. "A household of four, for instance, could receive RM400 in total, enhancing purchasing power for essential goods through year end," it said. HLIB said the government's decision to cut RON95 petrol prices to RM1.99 per litre and freeze toll rate increases on 10 major highways is expected to ease financial pressure on households. These initiatives, it noted, will boost net disposable income, particularly for daily commuters and lower-income groups, thereby supporting consumption growth across the wider retail sector.
The Star
22-07-2025
- Business
- The Star
SC Estate Builder sells Alor Setar land for RM8.8mil
PETALING JAYA: SC Estate Builder Bhd is disposing of a piece of land in Alor Setar, Kedah, measuring 5,834 sq metres to Novium Pinnacle Sdn Bhd for RM8.8mil. In a filing with Bursa Malaysia, the construction company said the proposed disposal will enable the group to use the proceeds to 'enhance its working capital to facilitate its renewable energy businesses in solar power plants and affordable houses with solar power on the roof.' 'The proposed disposal will also reduce the group's operational and maintenance costs of the property.' SC Builder said it had acquired the property on July 29, 2021 and that the cost of investment is RM6.28mil for the land. The company said the bulk of the proceeds will be utilised for working capital purposes.
The Sun
22-07-2025
- Business
- The Sun
Express Powerr inks underwriting agreement with Mercury Securities for ACE Market IPO
KUALA LUMPUR: Generator rental services provider, Express Powerr Solutions (M) Bhd signed an underwriting agreement with Mercury Securities Sdn Bhd for its upcoming initial public offering (IPO) on the ACE Market of Bursa Malaysia. Express Powerr managing director Lim Cheng Ten said the company is entering a new phase of growth, and this underwriting agreement marks a significant step towards its listing on the ACE Market of Bursa Malaysia. 'This move will accelerate our expansion into new end-user markets, including the oil and gas industry, and broaden our geographical coverage. 'With this in mind, we see great potential in the oil and gas sector. The industry typically operates in remote and challenging environments, where generators are required as temporary power solutions during exploration, drilling and production operations,' he said in a statement. He said in the first nine months of 2024 alone, 27 oil and gas projects worth RM4.46 billion were approved, presenting strong prospects for the industry. In the utility sector, Tenaga Nasional Bhd (TNB) has invested RM21 billion in its Grid of the Future programme to enhance its transmission and distribution network. As generator sets are widely used in the engineering, procurement, and construction of power grids as well as other generation and transmission projects, these developments reinforce the continued relevance of the generator rental business, Lim said. Express Power provides generator rental services, which are utilised in critical emergencies such as power outages and planned maintenance, and serve as standby power for events and special occasions, providing a reliable power source when needed most. The group also supplies ancillary items, including distribution boards, generator synchronisation panels, transformers, switchgears, load banks, and cables, to meet the varied requirements of its customers. With a 20-year track record, the group owns a fleet of 111 generator units, ranging in capacity from low- to high-voltage systems. Over 70% of the fleet consists of mobile generator units mounted on trucks, designed for easy transportation and deployment to various locations. The remaining units are canopy generators, which are commonly used in outdoor settings or areas where noise reduction is important. Routine maintenance is performed in-house, with generators inspected and maintained every 300 operational hours to ensure reliability and minimise downtime. In addition to its core business, the group is also registered as a solar photovoltaics (PV) investor under the Net Energy Metering (NEM) programme and a PV service provider by Sustainable Energy Development Authority Malaysia (SEDA). This enables the group to install rooftop solar PV systems for both residential and commercial properties. Though still in its early stages, this expansion aligns with Malaysia's net-zero emission target by 2050 and supports the growing demand for sustainable energy solutions. As a testament to its growing reputation for delivering quality generator rental services, Express Powerr became an approved vendor of TNB in 2021 and subsequently secured service contracts with TNB in 2022 after having supplied generators indirectly to TNB since 2005. The group has also expanded its geographical footprint to Sabah last year, providing services indirectly to Sabah Electricity Sdn Bhd (SESB). Beyond electric utility companies, Express Powerr serves a diverse range of end-user industries, including mechanical and electrical, manufacturing, construction, and event industries, as well as government agencies. The IPO exercise comprises a public issue of 180.0 million new ordinary shares, representing approximately 19.3% of the company's enlarged issued share capital, and an offer for sale of 65.4 million existing shares, equivalent to 7.0% of the enlarged share capital. Of the 180.0 million new shares, 46.7 million will be offered to the Malaysian public via balloting, 18.7 million allocated to eligible directors, employees, and contributors to the group's success, 63.2 million placed privately with selected investors, and 51.4 million placed with Bumiputera investors approved by the Ministry of Investment, Trade and Industry (Miti). The 65.4 million existing shares under the offer for sale will also be allocated to Bumiputera investors approved by the Ministry of International Trade and Industry (Miti). Under the underwriting agreement, Mercury Securities has agreed to underwrite a total of 65.4 million Issue Shares made available to the Malaysian public and Pink Form Allocations. Express Powerr is scheduled to be listed on the ACE Market of Bursa Malaysia by the third quarter of 2025. Mercury Securities serves as the principal adviser, sponsor, sole underwriter and sole placement agent for the IPO exercise.
The Star
04-07-2025
- Business
- The Star
WCT secures RM365mil job for North-South Expressway expansion
PETALING JAYA: WCT Holdings Bhd had secured a RM365.22mil contract from Projek Lebuhraya Usahasama Bhd (Bhd) for the construction of an additional lane along the North-South Expressway from Sedenak to Simpang Renggam in Johor. In a filing on Bursa Malaysia, WCT Holdings stated the contract was awarded to its wholly-owned subsidiary WCT Bhd on July 4 to undertake Phase 2 of the Yong Peng (North) to Senai (North) stretch. The scope of works includes site clearance, demolition, earthworks, drainage, pavement and road marking works, as well as the construction of bridge structures, geotechnical works, road lighting systems, utility relocation and environmental protection measures. Scheduled to commence on July 28, 2025, the project is expected to be completed within 36 months from the date of commencement.
The Star
04-07-2025
- Business
- The Star
AEON Credit valuations to hinge on banking arm
AEON Bank is projected to see losses peak in FY26 and gradually ease from FY27 with breakeven targeted in FY28 and profitability by FY29. PETALING JAYA: Aeon Credit Service (M) Bhd 's valuations will likely be driven by the performance of its loss making subsidiary, AEON Bank (M) Bhd, which is Malaysia's first Islamic digital bank. AEON Credit's management expects the bank to only post a profit in financial year 2029 (FY29) and to run losses till then due to expansion and product development related costs. At its AGM on June 25, AEON Credit had guided to RM80mil to RM90mil in associate losses from its 50%-owned digital banking venture in FY26. 'This represents a 17.1% to 31.8% year-on-year (y-o-y) increase from the RM68.3mil loss recorded in FY25 and exceeds our RM75mil loss forecast by 7% to 20%. The updated guidance also surpasses consensus estimates of RM60mil by 33.3% to 50%. 'Further checks with AEON Credit revealed that the higher projected losses are driven by the rollout of expanded product offerings under AEON Bank, including a personal financing facility of up to RM10,000, business banking services and term deposit offerings,' CIMB Securities said in its report. The research house noted that the expansion entailed higher upfront costs, particularly in digital infrastructure and core banking systems, including cloud deployment, cybersecurity and regulatory compliance. AEON Bank is projected to see losses peak in FY26 and gradually ease from FY27 with breakeven targeted in FY28 and profitability by FY29. The financing company also guided to minimal impact on its business from the expanded sales and service tax (SST) apart from RM1.8mil in SST related costs for FY26 (year ending February). To improve its collections, AEON Credit expects to finalise discussions with two agencies to explore the potential implementation of a salary deduction scheme for civil servant borrowers by this month. This market segment accounts for 19% of its customer base. It might not fully mitigate the risk of rising impairments, particularly in light of elevated household debt levels and living costs. The recent increase in civil servant bankruptcies – triggered by the Malaysian Anti-Corruption Commission's 'Op Sky' investigation and the implementation of Malaysia's 'second chance policy' – may continue to weigh on the creditworthiness of this segment, potentially limiting the effectiveness of the salary deduction mechanism over the longer term. AEON Credit's impairment losses surged 32.9% y-o-y in FY25, driven by an 18.4% y-o-y increase in delinquent accounts. This resulted in a higher net credit cost of 3.87% in FY25 (FY24: 3.35%) and an increase in the non-performing loans ratio to 2.64% (FY24: 2.57%).
