MY Morning Wrap | Hap Seng Consolidated Posts Lower 3Q Profit on Smaller Disposal Gain, Revenue Drop

U.S. stocks traded lower Tuesday afternoon as November's rally stalled on a mixed bag of retailer earnings, while investors awaited results from AI chipmaker $NVIDIA(NVDA.US)$. the FOMC minutes showed the Fed was watching market conditions closely but unanimously agreed to keep rates the same until further data emerges.

The $Dow Jones Industrial Average(.DJI.US)$ fell 62 points, or 0.18%, to 35,088 while the $S&P 500 Index(.SPX.US)$ dipped 9 points, or 0.20%, to 4,538, and the tech-heavy $Nasdaq Composite Index(.IXIC.US)$ shed 84points, or 0.59%, to trade at 14,199.

$HAPSENG(3034.MY)$: Hap Seng Consolidated Bhd made a net profit of RM50.3 million in 3QFY2023, down 91.1% from RM563.75 million a year ago, as it recorded a smaller disposal gain during the quarter, and lower profit contribution from its property, credit financing, automotive and trading divisions — mitigated by higher profit contribution from plantation and building materials divisions. The preceding year's corresponding quarter had included a gain of RM425.1 million from the disposal of its credit financing operations in Birmingham, UK, while 3QFY2023 recorded a gain of RM5.3 million from the disposal of its wholly-owned Richmore Development Sdn Bhd.

$MFCB(3069.MY)$: Mega First Corp Bhd is increasing its shareholding in the 260MW Don Sahong hydropower project in Laos from 80% currently to 91.25%, through a US$85 million (RM396.95 mil) transaction. The deal involves Mega First’s 56.25%-owned unit Mega Ventures Ltd (MVL) buying 20% stake in Don Sahong Power Co Ltd from EDL-Generation Public Co for US$85 million. The remaining shareholders in MVL are Laos-incorporated Lao Green Power Corp Co Ltd (25%) and British Virgin Islands-incorporated Enemax Trading Ltd (18.75%). Mega First said the proposed acquisition will enable it to increase its shareholding in a proven and profitable renewable energy asset. Don Sahong hydropower plant commenced operations in January 2020 and generates approximately 2,028GWh per year.

$SUNCON(5263.MY)$: Sunway Construction Group Bhd's net profit rose 54.14% to RM35.01 million for 3QFY2023 from RM22.72 million a year earlier, in tandem with an increase in revenue, supported by higher topline contributions from all segments. Quarterly revenue climbed 43.53% to RM673.51 million from RM469.25 million. The group's construction business saw revenue rise 40.9% to RM590.5 million in 3QFY2023 from a year ago, fuelled by enhanced contributions from sustainable energy projects and higher revenue recognition as newer projects progress. Consequently, profit before tax rose 18.9% to RM41.6 million.

$KERJAYA(7161.MY)$: Kerjaya Prospek Group Bhd's RM404.35 million job from BCM Holdings Sdn Bhd — a subsidiary of EcoFirst Consolidated Bhd — to build a main residential building has fallen through after BCM decided not to proceed with the contract previously agreed upon between both parties. Kerjaya Prospek said it will be taking necessary steps under the letter of award after advice from its solicitors “to enforce its right to recover the pre-agreed damages payable, which is due and payable by BCM to [wholly owned subsidiary] Kerjaya Prospek (M) Sdn Bhd”.

$SHANG(5517.MY)$: Hospitality group Shangri-La Hotels (Malaysia) Bhd's net profit surged 157.7% to RM15.62 million in the third quarter ended Sept 30, 2023 (3QFY2023) from RM6.06 million a year earlier, on improved level of leisure demand and hotel occupancy rate. Quarterly revenue rose 31.8% to RM141.4 million from RM107.29 million a year earlier. On a quarterly basis, the group's net profit came in higher from RM2.63 million in 2QFY2023, while revenue grew by 31.5% from RM107.55 million.

$BJASSET(3239.MY)$: Berjaya Assets Bhd (BAssets) saw a lower net loss of RM2.26 million in its first financial quarter ended Sept 30, 2023 (1QFY2024) against RM4.22 million the year before, on lower winning prize payout incurred by its lottery unit Natural Avenue Sdn Bhd and higher revenue. Quarterly revenue rose 5.1% to RM56.39 million from RM53.67 million a year ago, mainly due to higher rental rates for the group's property investment business segment.

$AAX(5238.MY)$: AirAsia X Bhd (AAX) said its Practice Note 17 (PN17) status will be uplifted on Wednesday after Bursa Securities allowed its appeal on the matter. This comes after the medium-haul low-cost carrier reported a net profit of RM5.56 million for 3QFY2023, down 77.83% compared with RM25.09 million posted for the same period last year due to higher aircraft fuel expenses and maintenance and overhaul costs. AAX said Bursa Securities had resolved to allow the airline's appeal for the upliftment, and from having to implement a regularisation plan, subject to the group announcing a net profit for 3QFY2023.

$LBS(5789.MY)$: LBS Bina Group Bhd has recorded a 13.8% growth in net profit for 3QFY2023, underpinned by better site construction activities, as well as cost savings upon delivery of vacant possession for two completed projects. Net profit rose to RM40.21 million or 2.11 sen per share, from RM35.35 million or 1.78 sen per share in 3QFY2022. This is despite revenue declining 11% to RM471.49 million from RM529.89 million previously, while finance costs rose 22% to RM17.75 million from RM14.6 million over the same period.

$MESTRON(0207.MY)$: Mestron Holdings Bhd has received the Securities Commission Malaysia's approval for the transfer of its shares and warrants from the ACE Market to the Main Market of Bursa Malaysia. Mestron said the transfer would allow the group to expand its investor base to include those who are specifically interested in investing in Main Market companies.

$PERDANA(7108.MY)$: Vessel operator Perdana Petroleum Bhd posted its best quarterly results since 2014, as net profit nearly doubled in the quarter ended Sept 30, 2023 (3QFY2023) to RM22.76 million, from RM11.41 million, supported by improved daily charter rates (DCR). The improved DCR, added with the increase in chartering of third-party vessels, helped boost revenue by 49.69% to RM103.92 million, from RM69.43 million.

$KPS(5843.MY)$: Selangor state-controlled Kumpulan Perangsang Selangor Bhd (KPS) has secured a contract worth RM162.18 million to supply various water treatment chemicals to Pengurusan Air Selangor Sdn Bhd (Air Selangor). KPS said its 51%-owned unit Aqua-Flo Sdn Bhd, signed a framework agreement with Air Selangor for the two-year contract, which runs from Jan 1, 2024 to Dec 31, 2025. Throughout the contract period, Aqua-Flo is required to deliver a performance bond of 5% of the contract amount to Air Selangor, said KPS.

$STAR(6084.MY)$: Star Media Group Bhd's net profit fell 97.45% to RM56,000 for 3QFY2023, from RM2.2 million a year ago, as earnings were once again affected by high operating costs. Quarterly revenue was flat at RM54.93 million against RM54.43 million previously. On a quarter-on-quarter basis, the group’s net profit was 92.92% lower compared with RM791,000 in 2QFY2023, while revenue fell 5.34% from RM58.02 million due to lower revenue from the print, digital and events segment and the radio broadcasting segment.

$TEOSENG(7252.MY)$: Teo Seng Capital Bhd is set to post a record high annual profit for FY2023, as the egg producer's profit for 3QFY2023 surged by more than 84 times to RM43.83 million from RM516,000 a year ago, boosted by higher average selling price and sales quantity of eggs. The 3QFY2023 net profit is already more than double the group's full-year net profit of RM21.64 million in FY2022, its bourse filing showed. It is the highest quarterly profit recorded since the group's listing in 2008. Its previous highest quarterly net profit was RM25.4 million, achieved in the months of April to June under 2QFY2023.Quarterly revenue rose 20.1% to RM199.99 million from RM166.68 million in 3QFY2022.

$COMFORT(2127.MY)$: Improved margins that led to lower costs of both natural rubber and synthetic latex has helped narrow Comfort Gloves Bhd's net loss for 3QFY2023 to RM7.9 million, from RM17.8 million a year earlier. The glove maker also attributed the smaller quarterly net loss to its efforts to continuously improve business operational efficiency to stay competitive, as well as a reversal of written down on inventory amounting to RM13.1 million. Revenue for 3QFY2023 fell 43% to RM72.45 million, from RM126.79 million a year earlier, on lower sales quantity.

$PRIVA(0123.MY)$: Privasia Technology Bhd extended its turnaround performance with a net profit of RM2.36 million in the nine months ended Sept 30, 2023 (9MFY2023), from losses of RM2.66 million in the previous corresponding period (9MFY2022), amid a strong jump in contribution from its satellite-based network services (SAT) segment. The segment helped Privasia to triple its revenue in 9MFY2023 to RM79.37 million, from RM26.15 million. It also allowed Privasia to stay in the black, despite losses in its information technology (IT) and information and communications technology segments, due to higher operating expenditure and lower contract value, respectively. In 3QFY2023, Privasia’s net profit rose to RM843,000 or 0.14 sen per share, from RM66,000 or 0.01 sen per share. This was in line with the three-fold jump in quarterly revenue to RM31.75 million, from RM10.35 million.