Latest news with #CIMBSecurities
New Straits Times
17 hours ago
- Business
- New Straits Times
Mah Sing's growth intact despite data centre delay
KUALA LUMPUR: Analysts remain upbeat on Mah Sing Group Bhd's outlook, citing steady property sales and resilient fundamentals, despite the company missing a deadline to formalise its data centre (DC) deal with Bridge Data Centres (BDC). RHB Investment Bank, CIMB Securities, Hong Leong Investment Bank (HLIB Research), and BIMB Securities have all maintained their "Buy" or "Add" calls, citing the group's solid fundamentals and long-term growth prospects. RHB Investment, which trimmed its target price to RM1.83 from RM2.16, said Mah Sing's first-quarter results were within expectations and highlighted the potential of its Southville City land in Bangi as a strategic DC location. "Although Mah Sing did not sign the definitive agreement with BDC within the required timeline, the land remains highly strategic," it said. CIMB Securities, which lowered its target price to RM1.90 from RM2.10, said the lapse in exclusivity now allows Mah Sing to pursue discussions with other parties. The firm said Mah Sing "remains committed to unlocking value from its sizeable landbank." BIMB Securities echoed the positive sentiment, citing RM1.01 billion in property sales in the first five months of 2025, driven by strong take-up rates at projects such as M Nova and M Legasi. It set a target price of RM2.02. HLIB Research noted that unbilled sales of RM2.73 billion provide earnings visibility into 2025 and revised its target price to RM1.85 from RM2.05. Mah Sing has lined up RM3.3 billion worth of new launches this year and is on track to achieve its full-year sales target of RM2.65 billion. Despite the BDC setback, analysts said the stock offers strong upside potential, with RHB Investment estimating a total return of nearly 84 per cent, including dividends. "Investors should look beyond the noise and focus on Mah Sing's proven execution and product-market fit," the firm said.
BusinessToday
18 hours ago
- Business
- BusinessToday
Analysts Downgrade Genting Malaysia, After Sharp Drop In Q1 Profits
CIMB Investment Bank Bhd (CIMB Securities) has downgraded Genting Malaysia Bhd (GENM) to HOLD from Buy, with a sharply lower target price of RM1.95 from RM2.45, while Hong Leong Investment Bank (HLIB) has reiterated its HOLD call with a revised target price of RM1.82, as both research houses flagged significant earnings pressure from weaker-than-expected performance across domestic and international operations. GENM's core net profit for the first quarter of FY25 fell 78% year-on-year to RM52 million, which CIMB said was impacted by a broad-based earnings decline across Resorts World Genting (RWG), the US, and UK segments, compounded by higher net interest cost and an elevated effective tax rate. The results were well below expectations, coming in at only 9% and 8% of CIMB Securities' and consensus full-year forecasts, respectively. HLIB similarly noted that GENM's RM31.1 million core profit for the quarter missed its projection by a wide margin, at just 6% of its FY25 estimate. RWG's gross gaming revenue (GGR) was a key concern, declining 7% year-on-year and 9% quarter-on-quarter, driven mainly by a significant drop in VIP play, which fell 18% year-on-year. Although mass market GGR grew by 7%, it was not enough to offset the overall weakness. CIMB Securities highlighted that hilltop visitations dipped 2% year-on-year, likely impacted by the earlier timing of Hari Raya compared to 2024, which affected non-gaming activities. Meanwhile, EBITDA for the group fell 11% year-on-year to RM869 million, with EBITDA margins shrinking to 31.9%. In the US and Bahamas, EBITDA contracted 22% year-on-year, pressured by higher labour costs and a weaker US dollar against the ringgit. In the UK and Egypt, earnings fell 25% year-on-year under similar conditions, though they were flat quarter-on-quarter. Share of associate losses from Empire Resorts also widened sequentially. HLIB noted that while revenue in the US & Bahamas rose 8.6% quarter-on-quarter, group-wide earnings recovery was insufficient to match past performance due to structural headwinds in international markets. CIMB Securities revised its core earnings estimates down by 37–39% for FY25–27, expecting a 29% drop in FY25 earnings before a modest 12% recovery in FY26, aided by anticipated tourist inflows during Visit Malaysia Year. HLIB likewise slashed its forecasts by 36–40%, citing persistently high finance costs, tax burdens and operating volatility in the US. Despite the earnings headwinds, both brokers pointed out GENM's dividend yields remain relatively attractive at 5.5–6.6% over FY25–27. However, CIMB Securities stressed that valuation at an FY25 EV/EBITDA of 8.3x is only modestly attractive, trading at a 12% discount to its 10-year pre-COVID average. Upside risk remains in the form of a possible full casino licence in Downstate New York, which CIMB Securites estimates could add 40–50 sen to its target price. GENM shares closed at RM1.82 on 30 May, giving the group a market capitalisation of RM10.26 billion. Related
The Star
19 hours ago
- Business
- The Star
CIMB Securities cuts KLCI earnings forecasts by 5.6% after weak 1Q
KUALA LUMPUR: CIMB Securities has revised downward its earnings forecasts for FTSE Bursa Malaysia KLCI (FBM KLCI) constituents by 5.6 per cent for both 2025 and 2026, citing widespread underperformance in the first quarter ended March 31, 2025 (1Q 2025). The brokerage said the downgrade was primarily driven by lower earnings projections for the banking sector, Sime Darby Bhd , and Petronas Chemicals Group Bhd . "As a result, CIMB now forecasts KLCI core net profit growth at 3.4 per cent for 2025 and 6.5 per cent for 2026, down from 9.3 per cent and 6.6 per cent, respectively. CIMB Securities has also lowered its end-2025 FBM KLCI target to 1,560 points from 1,657, based on an unchanged price-to-earnings (P/E) multiple of 14.7 times. "The KLCI is trading at a 12-month forward P/E of 12.7 times with an attractive dividend yield of 4.2 per cent, but the upside may be capped by downside risks including the 10 per cent US import tariff, the end of the tariff reprieve on July 9, potential hikes in the Sales and Service Tax (SST) and RON95 fuel prices in the second half of 2025, and higher electricity tariffs expected in July. "These headwinds may be partially offset by strong domestic liquidity, a strengthening ringgit, and policy support from initiatives such as the National Energy Transition Roadmap (NETR), the Johor-Singapore Special Economic Zone (JS-SEZ), and the New Industrial Master Plan 2030 (NIMP 2030),' CIMB Securities said. The brokerage noted that only 7 per cent of companies under its coverage beat expectations in the first quarter, while 64 per cent missed, pulling the earnings surprise ratio down to 0.24 times, the weakest showing since the second quarter of 2020. It attributed the underperformance to lower-than-expected net interest margins for banks, weaker earnings in the oil and gas, consumer, and technology sectors, along with higher effective tax rates and foreign exchange losses. In terms of sector positioning, CIMB downgraded oil and gas and plantations to "neutral' from "overweight' due to a lack of near-term catalysts. It downgraded Petronas Chemicals Group Bhd and Sime Darby Plantation Bhd to "hold' from "buy.' Despite the cautious tone, the brokerage maintained its overweight stance on telecommunications, utilities, and construction. It added Maxis Bhd , IJM Corp Bhd , and IOI Corp Bhd to its top large-cap picks, alongside existing names such as CelcomDigi Bhd, Gamuda Bhd , Public Bank Bhd , RHB Bank Bhd, Tenaga Nasional Bhd , and 99 SpeedMart. In the small- and mid-cap space, Axis Real Estate Investment Trust (REIT) has been added to its list of recommended stocks, joining Malaysian Resources Corporation Bhd (MRCB), KJTS Group Bhd , Farm Fresh Bhd , and Mah Sing Group Bhd . - Bernama
New Straits Times
a day ago
- Business
- New Straits Times
Tariff, policy risks set to weigh on market in 2H25
KUALA LUMPUR: Market sentiment is expected to remain fragile heading into the second half of the year, as investors brace for a combination of external tariff risks and domestic policy shifts that could weigh on earnings and consumption. In its strategy note, CIMB Securities flagged several looming challenges that may limit upside for equities, despite supportive valuations and ample market liquidity. Chief among them is the scheduled end of the US 90-day tariff reprieve on July 9, which could see the reinstatement of elevated reciprocal tariffs between the world's two largest economies. "This adds another layer of trade friction to an already cautious global backdrop," the firm said. On the local front, investors are anticipating potential adjustments to the RON95 fuel subsidy, a move that could raise transport and logistics costs for businesses, while straining household budgets. CIMB Securities also cited the possible implementation of a higher sales and service tax and an expected increase in electricity tariffs in the second half of 2025. "Together, these measures could contribute to inflationary pressures and squeeze corporate margins," it said. "These headwinds may erode near-term earnings visibility and investor risk appetite, even as Bursa Malaysia trades at an undemanding 12.7 times forward price-to-earnings and offers a 4.2 per cent dividend yield." While acknowledging that policy reforms are necessary for long-term fiscal consolidation and subsidy rationalisation, it said the timing and communication of such measures would be critical to avoid unsettling investors. Still, the firm noted that downside risks may be partially cushioned by strong domestic liquidity and a strengthening ringgit. Additional support could come from long-term structural initiatives such as the National Energy Transition Roadmap, the Johor-Singapore Special Economic Zone, and the New Industrial Master Plan 2030.
New Straits Times
a day ago
- Business
- New Straits Times
Blue chips face slower earnings growth after disappointing Q1 results
KUALA LUMPUR: Bursa Malaysia's blue chips are projected to deliver lower earnings growth this year after a disappointing first quarter of 2025 (1Q25) across key sectors, according to CIMB Securities. The firm has cut its full-year earnings growth forecast for these stocks to 3.4 per cent from 9.3 per cent, citing widespread 1Q25 results that fell short of expectations. It said the 1Q25 earnings surprise ratio plunged to 0.24 times, the lowest in over a year, reflecting broad-based underperformance across sectors including oil and gas, consumer, technology and banking. The earnings surprise ratio measures the number of companies that exceeded expectations relative to those that missed. Only seven per cent of companies under CIMB Securities' coverage beat expectations in the quarter, while 29 per cent missed. "We are negative on the 1Q25 earnings season as disappointments were widespread, and upside drivers remain limited in the near term," it said in a strategy note titled 'A disappointing start to 2025'. The firm also lowered its end-2025 FTSE Bursa Malaysia KLCI target to 1,560 points from 1,657, based on an unchanged forward price-to-earnings multiple of 14.7 times. Earnings downgrades were led by banks, Sime Darby Bhd and Petronas Chemicals Group Bhd. Weak sales, foreign exchange losses, margin compression and one-off dilution from Chinese associates were among the key contributors to the weaker results. Among the 30 blue-chip stocks that make up the benchmark index, 17 per cent reported earnings below expectations, the firm said. CIMB Securities also downgraded its sector calls on oil and gas and plantations to "Neutral" from "Overweight", citing a lack of near-term catalysts and subdued earnings visibility. The firm said tariff uncertainty and domestic policy shifts are expected to further weigh on market sentiment in the coming quarter. Risks highlighted include the potential end of the US 90-day tariff reprieve on July 9, possible adjustments to RON95 fuel subsidies and the sales and service tax, as well as higher electricity tariffs expected in the second half of the year. Despite the weak earnings momentum, the firm identified pockets of opportunity in defensive names and stocks with clear catalysts. Its revised large-cap top picks include CelcomDigi Bhd, Gamuda Bhd, Public Bank Bhd, RHB Bank Bhd, Tenaga Nasional Bhd, Maxis Bhd, IOI Corporation Bhd, IJM Corporation Bhd and 99 Speed Mart Retail Holdings Bhd. For the small- to mid-cap segment, the firm's top picks are Axis REIT, Farm Fresh Bhd, Mah Sing Group Bhd, Malaysian Resources Corporation Bhd and KJTS Group Bhd.
