Latest news with #MaybankIB
The Star
2 days ago
- Business
- The Star
Muted 2Q earnings likely
PETALING JAYA: Malaysia's upcoming second-quarter of financial year 2025 (2Q25) earnings season is expected to be relatively muted, with overall corporate performance continuing to reflect challenges from external uncertainties, particularly the ongoing US-Malaysia tariff negotiations. While earnings growth may remain soft, the reporting cycle begins against a backdrop of stabilising macroeconomic indicators and fewer forecast revisions compared to the previous quarter. As such, Maybank Investment Bank Research (Maybank IB) believes the worst of the earnings downgrades may now be behind. 'The 2Q25 results season may yet be another unexciting one but at least one with fewer earnings downgrades in our view,' the research house said in its latest strategy note. Maybank IB has forecast a modest 2.5% earnings growth for the FBM KLCI in 2025, primarily weighed down by the banking sector. It anticipates a stronger rebound in 2026 with a projected growth of 7.7%. The research house's base case target for the FBM KLCI stands at 1,660, pegged to 14.4 times 2026 estimated price-to-earnings ratio (PER), representing minus 0.5 standard deviation of the 10-year mean, amid continued market volatility and uncertainty over trade policy. 'Our base case assumes further de-escalation in trade tensions and favourable outcome from tariff negotiations,' the report noted. Conversely, in a bearish scenario where earnings growth moderates to 5%, the index could dip to 1,450 based on 13 times PER. Despite a softer external environment, Malaysia's domestic economic fundamentals appear encouraging. The research house points to robust consumer activity, a sustained investment cycle, and signs of resilient private demand as cushioning the impact of weaker exports, particularly in May and June. 'The 2Q25 real gross domestic product growth advanced estimate of 4.5% year-on-year, with a rebound quarter-on-quarter from 4.4% in 1Q25, suggests a steady growth momentum and indicates external headwinds due to US tariffs are being mitigated by domestic tailwinds,' it said. Inflation has also cooled to 1.1% in June, while the labour market remains firm with the unemployment rate steady at 3%. Maybank IB attributed rising disposable incomes – fuelled by civil servant pay hikes, minimum wage increases, and a surge in Employee Provident Fund contributions – as supportive of its positive stance on the consumer, real estate investment trusts (REITs), and construction sectors. Sector-wise, consumer, construction, healthcare, REITs, and renewable energy remain Maybank IB's key 'overweights', with minimal changes to its top stock picks apart from Solarvest Holdings Bhd , which has outpaced its target price. 'We expect some positive momentum for construction, healthcare, property and, more selectively, the oil and gas and utilities sectors,' the research house added. The technology sector may face near-term weakness, but Maybank IB noted that most of the necessary earnings downgrades have already been made. 'From our channel checks, we expect most sectors are likely to deliver flattish earnings with few surprises,' it said. Notably, while plantation firms may post weaker quarterly numbers due to lower crude palm oil prices, some could benefit from disposal gains and foreign exchange tailwinds. The recent 25 basis points cut to the overnight policy rate, announced in July, is expected to have a limited impact on second-quarter bank earnings. 'We had already factored this rate cut into our bank forecasts; we stay 'neutral' on banks,' Maybank IB stated.
Free Malaysia Today
2 days ago
- Business
- Free Malaysia Today
Corporate Malaysia's Q2 earnings likely to be damp squib
Maybank Investment Bank forecasts a modest 2.5% earnings growth for the FBM KLCI in 2025. (Bernama pic) PETALING JAYA : Investors hoping for better second-quarter (Q2) earnings from listed companies will likely be left high and dry as Corporate Malaysia is expected to continue the underperformance of Q1 2025. Maybank Investment Bank (Maybank IB) said the upcoming Q2 results season may be muted, reflecting challenges from external uncertainties, particularly the ongoing US-Malaysia tariff negotiations. 'The Q2 results season may yet be another unexciting one but at least one with fewer earnings downgrades,' it said in a strategy note. The research house forecasts a modest 2.5% earnings growth for the FBM KLCI this year, primarily weighed down by the banking sector. However, it anticipates a stronger rebound in 2026 with a projected growth of 7.7%. It has a base case target of 1,660 points for the FBM KLCI, pegged to 14.4 times 2026 estimated price-to-earnings ratio (PER). 'Our base case assumes further de-escalation in trade tensions and favourable outcome from tariff negotiations,' it added. Some bright spots Despite the softer external environment, Maybank IB said there are 'bright spots' to be found. It noted Malaysia's domestic economic fundamentals appear encouraging, pointing to robust consumer activity, a sustained investment cycle, and signs of resilient private demand as cushioning the impact of weaker exports. The economy grew at 4.5% in Q2, slightly faster than the 4.4% year-on-year growth in Q1 as resilient consumer demand offset weaker exports. This suggests a steady growth momentum and indicates external headwinds due to US tariffs are being mitigated by domestic tailwinds, it noted. Maybank IB said investors should watch out for weakness in the technology sector. Banks are 'unlikely to yield much surprise' even as it watches for lower loan growth. However, it expects some positive momentum for construction, healthcare, property, and more selectively, the oil and gas, and utilities sectors. It said most plantation companies would be weaker quarter-on-quarter due to lower crude palm oil prices, though some could book gains from disposal and forex exchange movements. Consumer and real estate investment trusts are expected to be softer, after a seasonally strong first quarter.
New Straits Times
3 days ago
- Business
- New Straits Times
SunCon clears the air on MACC probe at investor briefing, maintains strong outlook
KUALA LUMPUR: Sunway Construction Group Bhd (SunCon) has dismissed concerns over its long-term prospects following the recent remand of one of its employees by the Malaysian Anti-Corruption Commission (MACC) over subcontractor-related dealings. In an investor briefing led by group managing director Liew Kok Wing, SunCon affirmed that the incident poses no threat to its long-term prospects or operational integrity, stressing the incident is isolated and does not implicate the company, Maybank Investment Bank (Maybank IB) said in a note. According to Maybank IB, the group assured investors and clients that the probe involves only a single contract manager and a few subcontractors, not the company as a whole. The employee has since been suspended and will be terminated after the remand period. SunCon, which is involved in several high-value data centre projects in the Klang Valley and Johor, has been in active communication with clients to explain the situation. So far, responses have been supportive, and the group does not expect any disruption to its ongoing projects, Maybank IB said. To further bolster investor confidence, SunCon highlighted its recent Anti-Bribery Management Systems (ABMS) certification, awarded just two months ago following an audit by SIRIM and external parties. "It believes its standard operating procedures (SOPs) are sound and the aforementioned case involved just that one employee. SCGB revealed that it conducts subcontracting tenders electronically and only awards to local companies that offer the lowest bid," Maybank IB said. The investment bank said that while acknowledging some reputational impact, SunCon believes the long-term outlook remains intact. "At the very least, it does not expect its existing projects to be affected. SunCon stated that its clients have been receptive of its explanation. Given SunCon's explanation, we believe there should not be too many negative repercussions over time once the case is settled, though there may be near-term distractions," Maybank IB said. Maybank IB reiterated its "BUY" call on SunCon, maintaining a target price of RM6.72 based on 24x fiscal year 2026 earnings, supported by annual job win expectations of RM7 billion. Similarly, Hong Leong Investment Bank (HLIB) echoed a bullish stance, reaffirming its "Buy" rating with a target price of RM6.70. HLIB noted that SunCon's management has assured the RM180 million work scope under the employee's purview can be absorbed internally if subcontractor changes are required. Technically, SunCon shares formed a Hammer candlestick pattern at RM5.49 on July 21, after sliding from an all-time high of RM6.27 on June 11 to a recent low of RM4.93 - a signal that a near-term rebound may be on the horizon. Despite the volatility, SunCon has delivered strong year-to-date performance, trading 12.96 per cent above its January opening price of RM4.63, with a trading range between RM3.29 and RM6.16 - reflecting both investor optimism and broader market swings. In a separate development, the Employees Provident Fund (EPF) - a key shareholder since 2018 - disposed of 20 million shares on July 14 via Citigroup Nominees, trimming its stake to 4.27 per cent and exiting its position as a substantial shareholder. SunCon, listed on Bursa Malaysia in July 2015, continues to demonstrate resilience amid market headwinds - underpinned by strong fundamentals, a solid project pipeline, and growing confidence from both clients and analysts.
New Straits Times
3 days ago
- Business
- New Straits Times
Maybank IB: Construction, healthcare, O&G among 2025 bright spots
KUALA LUMPUR: While most sectors are expected to deliver flattish earnings in the second quarter of 2025 (2Q25), Maybank Investment Bank Bhd (Maybank IB) said it anticipates positive momentum in the construction, healthcare, property, oil and gas (O&G), and utilities sectors. "Macro data released year-to-date suggests that domestic tailwinds, namely resilient consumer spending and sustained investment upcycle, are countering external headwinds. "The 2Q25 results season has just begun, and we are expecting a more balanced quarter after an underwhelming first quarter (1Q25)," the investment bank said in a note today. In the construction sector, Maybank IB noted that 1Q25 was seasonally slower due to the dual impact of the Chinese New Year and the fasting month of Ramadhan, both of which fell during the quarter. "For 2Q25, we expect works and thus, progress billings to accelerate. This will lead to more revenue and profit recognised in 2Q25," it said. The investment bank also expects a rebound in the healthcare and property sectors following a seasonally weaker performance in 1Q25. As for O&G, Maybank IB said earnings for oil and gas services and equipment players in 2Q25 are likely to improve quarter-on-quarter, as the sector moves beyond the annual monsoon season, which typically affects the fourth and first quarters.
The Star
3 days ago
- Business
- The Star
Diversification likely to buoy CapitaLand
Kenanga Research anticipates the trust's positive trajectory to continue into FY25 and FY26. PETALING JAYA: Analysts are positive on Capitaland Malaysia Trust 's (CLMT) diversification efforts, which are expected to enhance earnings visibility and help mitigate retail sector volatility. Maybank Investment Bank Research (Maybank IB) said CLMT's ongoing share placement exercise – aimed at raising up to RM250mil to fund acquisitions and reduce debt – will increase the company's industrial and logistics exposure to 7.9%, up from 2.8% of its assets under management (AUM). 'Proceeds from the placement (to be completed in the third quarter of financial year 2025 [3Q25]) is expected to partly refinance borrowings for RM400mil of completed and pending logistics/industrial acquisitions, including Glenmarie Distribution Centre (retrofitting completed in January 2025), Senai Airport City, and upcoming assets in Elmina Business Park and Nusajaya Tech Park,' it said. The research house expects CLMT's gearing to fall from 44.1% (post-acquisitions) to 39.6% post-placement. Moving forward, Maybank IB forecasts full contributions from the logistics assets beginning in 3Q25, with annualised gross rental income of RM20mil, or about 4% of revenue for the financial year ending December 2026 (FY26). CLMT also benefitted from positive rental reversions, and full-quarter income from Glenmarie Distribution Centre (from January 2025) and initial contributions from Senai Airport City from June. Meanwhile, Kenanga Research anticipates the trust's positive trajectory to continue into FY25 and FY26, given the promising developments in Penang. 'The group will continue its direction in acquiring and expanding its industrial segment, with a focus on logistics assets as part of its strategy to diversify portfolio income streams. 'Currently, industrial assets make up less than 5% of the group's net property income (NPI). 'It aims to increase the composition mix from its industrial segment to 20% of its total AUM in approximately three years,' the research house said. Kenanga Research kept its FY25 earnings forecast for CLMT, noting that the ongoing share placement will likely contribute less than 2% of the group's total NPI. However, it increased its FY26 earnings estimate by 8% to incorporate income contribution from the newly acquired Senai Airport City assets and interest savings from the proposed placement. That said, the resulting dilution is expected to reduce CLMT's FY26 net dividend per unit to 4.7 sen, down from five sen.
