MY Morning Wrap | Analysts Positive About MyNews Holdings' Prospects on Strong Earnings

The $S&P 500 Index(.SPX.US)$ ended the final, holiday-shortened week of the first quarter at a new all-time high, while the $Dow Jones Industrial Average(.DJI.US)$ gained about 0.12%, also ending at a record near 39,807. The $Nasdaq Composite Index(.IXIC.US)$ fell 0.12%. The market is awaiting February PCE data, coming out on Friday.

$GASMSIA(5209.MY)$: UOB Kay Hian Research sees Gas Malaysia Bhd benefiting from higher demand capacity in its distribution arm, which will help buffer the relatively flattish natural gas prices expected in 2024. The research firm expects demand for the retail arm to increase 5%-6% year-on-year in 1Q24, while earnings will likely be dragged down by a 30% drop in natural gas prices. However, UOBKH Research has raised its 2024-26 net profit forecasts by 5% and offers an attractive dividend yield of 7% in the near term. Gas Malaysia currently commands an 80% share of the natural gas retail market.

$MYNEWS(5275.MY)$: Analysts are positive about MyNews Holdings Bhd's prospects following its second consecutive profitable quarter, with CIMB Securities maintaining its earnings forecasts and projecting the company will achieve a net profit of RM8 million in financial year 2024, rising to RM31 million by financial year 2026. This will be driven by accelerated store openings with a focus on its more profitable MyNews outlets, enhanced gross profit margin through improvements in sales mix and disciplined cost management. CIMB Securities has upgraded the stock to a "hold" call with a target price of 49 sen. Meanwhile, Maybank Investment Bank Research has maintained a "buy" call with an unchanged target price of 62 sen for MyNews.

$SAPNRG(5218.MY)$: UOB Kay Hian Research is maintaining its "sell" call on Sapura Energy Bhd following the company's larger-than-expected core loss for financial year 2024 (FY24). While Sapura Energy has secured more time for its restructuring, EBITDA recovery remains uncertain, and even if it does materialize, UOBKH Research believes that the earliest Practice Note 17 upliftment of the stock can only be after January 2025. The group's operating cash flow tripled year-on-year to RM311 million, but UOBKH Research believes this is unsustainable and likely a result of another extension period of the restraining orders for the scheme of arrangement. The group's outstanding order book is RM5 billion, and operating conditions remain tough amid rising inflation and industry costs.

$ZANTAT(0301.MY)$: Zantat Holdings Bhd plans to use the majority of its IPO proceeds of RM14 million to expand its core business of calcium carbonate production and venture into the bioplastics value chain. The expansion plan includes purchasing research and development equipment, upgrading infrastructure, and investing in high-efficiency components. The group also plans to invest in high-efficiency machine components to facilitate industrial automation and upgrade a major calcium carbonate production plant for the first time in 24 years. The managing director expects revenue to grow from the Indian market, as the plastic industry there remains in growing demand, and the group plans to expand its footprint into South Korea, Australia, New Zealand, and Europe within 2024 with its latest product, the bioplastic compounds.