Latest news with #PhillipCapitalResearch
The Star
11 hours ago
- Business
- The Star
AME Elite expects more conservative sales of industrial property
PETALING JAYA: Industrial park developer AME Elite Consortium Bhd is targeting a more conservative RM400mil in sales for its financial year ending March 31, 2026 (FY26). This reflects the lingering uncertainty surrounding trade policies and tariffs that could influence the pace of foreign direct investment (FDI) decisions, said Phillip Capital Research. AME's Northern TechValley industrial park registered RM56mil in sales for the fourth quarter of its FY25, lifting the group's overall sales to RM641mil. Early demand was largely supported by local players from the consumer-related sector. The research house said AME expects sales momentum to strengthen further once infrastructure work commences in second half of this year (2H25). AME remains focused on growing its gross development value (GDV) pipeline, with the acquisition of the land in Ijok, Selangor. The work on an industrial park at the site with an estimated GDV of between RM1.2bil and RM1.3bil, is a partnership with Kuala Lumpur Kepong Bhd , and is expected to be completed in 2H25. AME is also expected to recognise earnings from a RM210mil land sale to data centre operator Digital Hyperspace Malaysia Sdn Bhd in 1H26, pending final payment from the client by August. The client reaffirmed its commitment to complete the transaction, having paid a RM35mil deposit and interest. AME is expected to record a gain of RM85mil from the deal. Phillip Capital Research reiterated its 'buy' rating on the stock with an unchanged sum of parts derived target price of RM2 a share.
The Star
6 days ago
- Business
- The Star
Delay in major Uzma project remains a concern
The order book could grow by RM1bil following Uzma's latest win. PETALING JAYA: The delay in Uzma Bhd 's major project has caused analysts to be concerned about the impact on its earnings despite the substantial new contract wins of the oil and gas (O&G) company. UOB Kay Kian (UOBKH) Research stated the sailaway of the Sara water injection facility (WIF) to offshore Sabah site would likely be delayed to October this year or February next year instead of the April 2025 target due to various client-requested design changes. 'Uzma can deliver the WIF in October, but it will encounter the monsoon when it arrives at Hibiscus Petroleum's offshore site in Sabah. Under this scenario, Uzma may have to bear the high transportation and installation costs. 'Therefore, from a project cost perspective, it is better to sail away in February 2026 (but also means the startup will miss financial year 2026 (FY26) completely),' the research house stated. On the positive side, Uzma has grown its order book to RM4.1bil as of April but unfortunately many of the projects are small, UOBKH Research added. The order book could grow by RM1bil following Uzma's latest win. It has secured a two-year long-term charter contract from PETRONAS Carigali for the seismic vessel WOA, from March 14, 2025 to March 13, 2027. The contract involved comprehensive seismic data acquisition across Peninsular Malaysia and Sabah, in addition to providing ancillary services such as catering, according to Phillip Capital Research. It expected the charter to contribute about RM10mil in annual profit to Uzma. Uzma's order book growth was primarily O&G-driven (with O&G comprising 74% mix), and the bulk of the growth came from the production service segment, which surged from RM1.1bil to RM2bil quarter-on-quarter. Uzma will miss its five-year internal target of a recurring income mix of 60% due partly to the delay risk of Sara-WIF. 'We believe this downside risk is fully priced in, but recommend a wait-and-see approach for earnings delivery and the (environmental, social and governance) development. 'Retain 'buy' and target price (TP) of 76 sen a share,' UOBKH Research noted in its latest report on the company following a briefing with Uzma's management. The valuation is at an unchanged price earnings (PE) multiple of eight times. Phillip Capital Research also retained its 'buy' rating on Uzma with a TP of 76 sen a share, based on eight-times PE on FY26 earnings per share. The stock is currently trading at an attractive four-times forward FY26 PE, with a forward dividend yield of 5% providing additional support to the share price.
The Star
7 days ago
- Business
- The Star
OCK targets bigger FY26 earnings from contracts
Phillip Capital Research said FY25 has been a challenging year due to sluggish order book replenishment. PETALING JAYA: OCK Group Bhd 's earnings in financial year 2026 (FY26) could surpass that of FY25 as it bids for more contracts to replenish its order book in the near-to-medium term. Phillip Capital Research said FY25 has been a challenging year due to sluggish order book replenishment following the completion of major projects such as Malaysia's first 5G network and Jendela Phase 1. OCK's RM250mil order book is led by telecommunication network services (62%), mechanical and electrical (30%), with RM1.5bil in activice bids. It said U Mobile Sdn Bhd intends to co-share about 160 existing towers with OCK, which is expected to enhance infrastructure efficiency and support the expansion of network capacity. The 5G infrastructure collaboration covers the deployment of towers, in-building coverage and related services with potential contract value exceeding RM500mil.
The Star
03-06-2025
- Business
- The Star
HE Group holds RM990mil in tenders despite market slump
PETALING JAYA: Despite HE Group Bhd 's results being in line with expectations, Phillip Capital Research is cutting its forecast of the company's earnings to account for lower order book replenishment amid a prolonged semiconductor market downturn. The research house said the mechanical, electrical and process contractor's tender book remains healthy at RM990mil, primarily consisting of data centres (80%) and utility-infrastructure (12%) projects. 'However, the timing of contract awards remains the biggest uncertainty, with management guiding for the third quarter of this year (3Q25). 'Given the continued delay in project awards, we revise our 2026 to 2027 order book replenishment forecast to between RM200mil and RM250mil (from between RM250mil and RM300mil) and cut earnings forecasts by between 12% and 15%,' the research house added. HE Group is an electrical engineering service provider focusing on power distribution systems for end-user premises such as industrial plants and industrial and commercial substations. The group recorded 1Q25 core net profit of RM2.9mil, while revenue declined by 51% year-on-year to RM32mil, weighed down by the power distribution and building systems segments. This mitigated the stronger performance from its electrical equipment hook-up and retrofitting services. 'The 1Q25 earnings before interest, tax, depreciation and amortisation margin improved 3.6 percentage points, attributable to a more favourable revenue mix from the higher-margin electrical equipment hook-up and retrofitting segment. 'Overall, 1Q25 results were in line with our expectations, accounting for 24% of our full-year forecasts for this year,' Phillip Capital Research said. The research house said it was raising its 12-month target price to 45 sen pfrom 44 sen after rolling forward its valuation horizon and slashing the target price-earnings (PE) multiple to 12 times from the previous 16 times. 'The lower PE multiple reflects a more cautious view, taking into consideration the softer market sentiment, and is in line with small and mid-cap valuations. 'Despite the absence of a near-term catalyst, the stock is trading below minus one standard deviation since listing,' the research house said. Phillip Capital Research maintained its 'buy' rating on the stock. 'Key risks include slower-than-expected order book replenishment, unforeseen project delays, and cost overruns,' the research house said.
The Star
02-06-2025
- Business
- The Star
Lagenda rides affordable housing wave into 2025
PETALING JAYA: Lagenda Properties Bhd is expected to see stronger sequential earnings momentum going forward, underpinned by continued steady demand for affordable housing. Phillip Capital Research expects the property developer's sales momentum to continue building sequentially, supported by its RM2.1bil in planned launches for 2025. 'Notably, Lagenda launched its RM4bil Johor Kulai township in April, which we anticipate to be a key sales driver for the group,' it said in a report. For the first quarter ended March 31, 2025 (1Q25), Lagenda's net profit rose to RM44.59mil from RM42.72mil a year ago, while revenue grew to RM264.4mil from RM225.62mi. Lagenda said the earnings reflected the strong market appeal of its well-planned and affordable township developments. In a filing with Bursa Malaysia, the property developer said it had kicked off the current financial year on a strong footing, recording confirmed sales of RM251.9mil in 1Q25. This was driven by robust contributions from Lagenda Aman in Tapah, Perak; La'Indera in Kuantan, Pahang; and Puncak Warisan in Kota Tinggi, Johor. 'As of March 2025, unbilled sales stood at a healthy RM898.9mil, with outstanding bookings of RM268.8mil, offering strong revenue visibility for the coming quarters.' The company said it remains optimistic about its latest developments planned for the current financial year and is confident that upcoming launches will solidify the group's position for a bright future. 'In 1Q25, we also marked our entry into a sixth state through a land acquisition in Senawang, Negri Sembilan. 'These expansions reflect our confidence in the long-term prospects of these regions and the growing demand for affordable, well-designed housing. 'We remain confident that our unique value proposition – combining quality with affordability – will continue to resonate with a broad range of homebuyers.' Going forward, the property developer said it will remain focused on executing its pipeline of launches and maintaining a disciplined landbanking strategy, targeting affordable land in strategic locations. UOB Kay Hian Research noted that Lagenda has revised its launch target from 4,000 to 8,000 units in 2025, driven by continued demand for affordable housing. 'Looking ahead, we expect a 30% year-on-year sales growth in 2025, driven by higher project launches and better construction progress from its new townships.' However, the research house lowered its earnings estimates for 2025 to 2027 by 13% to 15%, citing lower margin assumptions due to higher initial construction costs for township developments. 'We maintain (our) 'buy' call with a lowered target price (TP) by 16% to RM1.78 (from RM2.13), as we factor in a higher revised net asset value (RNAV) discount of 40% (from 30%), due to a more conservative margin environment in 2025 to 2026.' Meanwhile, Philip Capital Research maintained its earnings forecast for Lagenda, given the satisfactory results. It kept its 'buy' call and RNAV-derived TP of RM1.75 per share, based on a 30% RNAV discount. 'We continue to like Lagenda for its niche focus on affordable housing and its attractive 6% dividend yield for 2025.' The research house added that key risks to its 'buy' call include higher building material prices and lower-than-expected property sales.
