Latest news with #TAResearch
The Star
18 hours ago
- Business
- The Star
CLMT's RM250mil fundraise to reduce gearing
TA Research said the placement would support the REIT's continued diversification into logistics and industrial assets. PETALING JAYA: Capitaland Malaysia Trust 's (CLMT) proposed private placement to raise up to RM250mil is being viewed positively as a successful placement will enable the real estate investment trust (REIT) to reduce net gearing that has climbed due to borrowings to acquire industrial assets. Maybank Investment Bank Research, which has maintained a 'buy' recommendation on the stock and raised the target price to 76 sen from 75 sen, projects the REIT's net gearing to be reduced to 39.6% post-placement from 44.1% in the first quarter ended March 31, 2025 (1Q25) based on existing borrowings for the industrial asset acquisitions. 'We are positive on this exercise as it enhances CLMT's balance sheet strength and provides additional headroom for future yield-accretive acquisitions,' the research house said, as proceeds from the placement would be used to partly refinance borrowings of RM400mil of completed and pending logistics as well as industrial assets. It added that these acquisitions would be expected to contribute RM20mil in gross rental income annually or around 4% of the financial year ending Dec 31, 2026 (FY26) revenue. 'Post-acquisition, CLMT's industrial and logistics exposure will rise from 2.8% to 7.9% of assets under management, which is expected to contribute around 9% of FY26 net property income,' it said. 'We expect its retail assets to remain resilient with mid-to-high single-digit range rental reversion and steady occupancy for its ex-Klang Valley malls. 'Despite short-term dilution, longer-term earnings visibility, diversification and improved gearing, support our positive view,' it added. TA Research said the placement would support the REIT's continued diversification into logistics and industrial assets in which more stable and recurring income can be expected. 'We are positive on CLMT's proposed placement, which reflects a proactive and forward-looking approach to strengthening its capital base while preserving balance sheet flexibility,' the research house said. It has reiterated a 'buy' call on the stock with an unchanged target price of 82 sen. It pointed out that while there would be some near-term dilution to earnings per unit, the longer-term benefits from improved gearing, enhanced portfolio mix and rising rental contributions from logistics assets outweigh the short-term impact.
The Star
3 days ago
- Business
- The Star
Soft demand continues to affect Amway's sales
PETALING JAYA: Amway (M) Holdings Bhd could continue to face the effects of softening consumer demand for its products in the near term, analysts say. TA Research noted that demand for non-essential goods appears to be weakening, while continued upward pressure on product costs is likely to persist for the direct-selling company. Additionally, the research house highlighted that Amway's outlook for this year remains challenging, weighed down by global economic uncertainty. CIMB Research also expects continued softness in Amway's top line in the near term, as consumers prioritise essential spending. 'While the challenging demand environment may weigh on revenue growth, we anticipate Amway to exercise prudent cost management and optimisation strategies to help mitigate margin pressures and support profitability in the near term,' the research house said. Amway recently reported a weaker-than-expected first-quarter core net profit of RM13.2mil, marking a 58.9% year-on-year (y-o-y) decline. This also represents the ninth consecutive quarter of y-o-y revenue decline.
The Star
3 days ago
- Business
- The Star
Coastal well positioned to deliver long-term value
PETALING JAYA: Coastal Contracts Bhd is well positioned to deliver long-term value, backed by its strong cash reserves and a growing presence in shipbuilding and energy infrastructure. While short-term earnings for the integrated oil and gas services and energy infrastructure solutions provider are being weighed down by timing-related factors, the group's medium-term prospects remain intact. The group's robust financial footing stems from major contributions from its Mexican joint venture Coastoil Dynamic SA De CV (Cody), and proceeds from the sale of two offshore support vessels (OSVs). As a result, Coastal now holds approximately RM1bil in cash and cash equivalents, the majority of which is currently placed in short-term investments such as money market funds, said TA Research. This liquidity, the research house noted, 'provides room to pursue key growth initiatives'. Coastal's shipbuilding division is expected to drive earnings recovery, TA Research said. Three utility support vessels are currently under construction, with two scheduled for delivery in the second half of this financial year (2H25), and one in 1H26. The company also has three high-end OSVs in the pipeline, with staggered deliveries planned from 1H26 through 1H27. Beyond its core business, Coastal is exploring diversification into high-end hospitality, which would further boost its prospects. TA Research noted that the group is in discussions with luxury hotel operators to manage a resort development on Pulau Mabul. 'The capital expenditure for the first phase is estimated to be RM85mil and the room rate is expected to be more than US$500 per person per night,' the research house said. Given the project's timeline of one to two years and the fact that discussions are still ongoing, TA Research said it does not expect the hospitality segment to generate revenue until 2026. Meanwhile, Coastal's near-term financial results reflect a lull in project deliveries. For the first quarter ended March 31, the group reported core profit of RM17.7mil, which TA Research said was within its expectations at 22% of its full-year forecast, though it missed consensus forecasts at 15%. 'We anticipate earnings to grow from the shipbuilding division with two utility support vessels scheduled for delivery in 2H25,' the research house said. Quarter-on-quarter, revenue fell 58.2% to RM16.5mil, due to weaker contributions from shipbuilding and ship repair, while pre-tax profit dropped by 84.9%. Year-on-year, revenue declined by 7.1%, with pre-tax profit plunging 83.3% due to the absence of charter income from an OSV. TA Research maintained its 'buy' recommendation on Coastal with a target price of RM2.04 per share, based on a sum-of-parts valuation.
The Star
3 days ago
- Business
- The Star
CSC Steel's outlook positive following strong earnings
PETALING JAYA: TA Research is positive on CSC Steel Holdings Bhd outlook following the stronger-than-expected earnings performance in the first quarter of financial year 2025. CSC Steel reported an adjusted net profit of RM14.8mil for 1Q25, surpassing the research house's expectations, accounting for 43.1% of its full-year forecast. It said the positive deviation was primarily driven by lower-than-anticipated input costs, which translated into improved profit margins. Revenue declined by 17.3% year-on-year (y-o-y) largely due to softening demand for steel products and subdued average selling prices. Despite the revenue contraction, TA Research said adjusted net profit rose 19.2%, thanks to easing raw material costs and a lower effective tax rate. It pointed out that CSC Steel's balance sheet remains strong, with zero borrowings and a net cash position of RM347.7mil. 'Following the stronger-than-expected earnings performance, we have adjusted our cost assumption for certain steel products. 'Consequently, our FY25-FY27 earnings forecasts have been revised higher by 47.3%,24.8%, 8.4% respectively,' it added. The research house has upgraded its 'sell' to 'hold' call for CSC Steel with a higher target price of RM1.23 versus RM1.02, after factoring in the upward revision in earnings. It explained that the upgrade was due to the company offering a balanced risk reward profile amid an evolving market landscape, while having an attractive dividend yield of 6.3%, based on our projected dividend yield of 7.5 sen a share. Meanwhile, TA Research expected the Malaysia's steel market to continue facing persistent oversupply pressures due to China's excessive production capacity and illegal imports. This is despite the implementation of a new five-year Anti-Dumping Duties Act (effective mid-May 2025) targeting certain steel products.
The Star
27-05-2025
- Business
- The Star
Deal with U Mobile on 5G network to lift TM's showing
TA Research maintained its FY25 to FY27 earnings forecasts for TM. PETALING JAYA: Telekom Malaysia Bhd 's (TM) tie up with U Mobile Sdn Bhd for the deployment of the second 5G network in Malaysia is deemed as a positive development, though the earnings impact will be minimal, analysts say. The annual revenue contribution for TM is projected to be only 1.8% of TA Research's total revenue forecast for TM next year (FY26). The research house maintained its FY25 to FY27 earnings forecasts for TM and kept its 'buy' call on the stock with a target price of RM8.30 a share. TM signed a RM2.4bil 10-year contract with U Mobile yesterday to provide fibre backhaul services for the second 5G network. TM has the most extensive fibre coverage in Malaysia. UOB Kay Hian Research (UOBKH Research) said TM's initial contract with Digital Nasional Bhd for the first 5G network to supply fibre backhaul services was also valued at approximately RM2.5bil. Based on the previous contract, UOBKH research estimates that the annual revenue and net profit impact for TM is approximately 2% and 1%, respectively. It made no changes to its earnings forecast for TM and maintained its 'hold' call with a target price of RM7 a share. CIMB Research also maintained its 'buy' call with a 4% higher discounted cash flow based target price of RM7.55 a share. Kenanga Research lifted its target price by 1% to RM8.15 from RM8.07 a share based on an unchanged seven-times FY25 enterprise value to earnings before interest, taxes, depreciation and amortisation. It maintained its 'outperform' rating for the stock.
