MY Morning Wrap | Glove Makers Poised for Improved Margins in 2024

Losses by $Amazon(AMZN.US)$, $Apple(AAPL.US)$, $Alphabet-A(GOOGL.US)$, $Microsoft(MSFT.US)$, $Meta Platforms(META.US)$ and $NVIDIA(NVDA.US)$ weighed the tech-heavy $Nasdaq Composite Index(.IXIC.US)$ down by 1.5% and pushed the $S&P 500 Index(.SPX.US)$ 0.9% lower. The $Dow Jones Industrial Average(.DJI.US)$ fell 0.2%, or about 77 points.

$KLK(2445.MY)$ ：KLK's crude palm oil (CPO) production cost will likely have peaked in the third quarter of financial year 2023 (3Q23) as seasonally higher 4Q23 fresh fruit bunch (FFB) production will bring unit production cost lower, says Hong Leong Investment Bank (HLIB) Research. Based on a recent virtual meeting with KLK, the research house expects production cost to continue to trend downwards in FY24 mainly due to lower fertiliser prices.

$SCIENTX(4731.MY)$ : Global packaging manufacturer and property developer Scientex Bhd posted a net profit of RM438.14 million in FY2023, a 6.9% increase from RM409.87 million in the previous year. Revenue was up 2.3% to RM4.08 billion from RM3.99 billion in FY2022. Scientex said operating profit also came in higher at RM589.6 million compared with FY2022's RM561 million. Scientex recommended a final dividend of five sen per share, payable on Jan 26, 2024.

$CAPITALA(5099.MY)$ : Capital A Bhd's wholly owned subsidiary Asia Digital Engineering Bhd (ADE), has entered into a joint venture (JV) agreement with Sivilai Asia Co Ltd to establish a maintenance, repair and overhaul (MRO) business in Cambodia. ADE will invest 60% in the Cambodian JV company ADE Cambodia Co Ltd, while Sivilai Asia will come up with the remaining 40% to undertake the MRO business.

$SUPERMX(7106.MY)$ : The US has allowed imports from Supermax Corp Bhd, after customs authorities lifted a ban imposed on the company since October 2021 for alleged forced labour. In a statement on Tuesday, the US Customs and Border Protection (CBP) said effective immediately, the agency will allow imports of disposable gloves manufactured by Supermax and its wholly -owned subsidiaries to enter the US, provided they are otherwise in compliance with US laws.

$EWINT(5283.MY)$ : Eco World International Bhd (EWI) posted a lower net loss of RM12.3 million in 3QFY2023, against RM56.68 million a year earlier, amid foreign exchange gains from repayment of shareholder’s advances from EcoWorld-Ballymore and bank balances conversion from the British pound (GBP) to ringgit. Its lower net loss was also due to lower finance costs from the full settlement of all borrowings, lower share of losses in Eco World London, and higher interest income from unit trust and fixed deposits following the shareholder’s advance repayment from EcoWorld-Ballymore and Eco World London. Quarterly revenue, however, fell 9.65% to RM31.17 million from RM34.5 million a year earlier, due to discounts given to accelerate sale of remaining units sold in the current quarter, in line with its monetisation strategy.

$HEXCAP(0035.MY)$ : Opcom Holdings Bhd is buying a 18.03% stake or 70 million shares in ACE Market-listed Binasat Communications Bhd from the latter's managing director Na Boon Aik for RM39.2 million as part of its venture into the satellite telecommunications business. The acquisition came less than two months after Opcom announced a plan to buy a 49% stake in Transgrid Ventures Sdn Bhd for RM98 million, via a cash-plus-share deal, to diversify into the power transmission and distribution business.

$MNHLDG(0245.MY)$ : Underground utilities and substation engineering specialist MN Holdings Bhd has bagged a substation engineering contract worth RM18.5 million for GDS data centre (Plot 2) at Nusajaya Technology Park, Johor. MN Holdings executive director Datuk Dang Siong Diang said this is the second contract awarded by GDS IDC Services (Malaysia) Sdn Bhd for its data centre in Johor. The first contract worth RM22.5 million was secured in October last year. MN Holdings said its wholly owned subsidiary MN Power Transmission Sdn Bhd has accepted a letter of award from GDS, a unit of Shanghai-based GDS Holdings Ltd, for its appointment as the contractor.