External broker reports(aggregated public sources), Hong Leong Investment Bank Berhad

Hong Leong Investment Bank Berhad

External broker reports(aggregated public sources)

Hong Leong Investment Bank Berhad operates as an investment banking company. The Company provides debt and equity funding, private debt securities issuance, merger and acquisitions, initial public offerings, corporate restructuring, and stockbroking services. 

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Equity Bottom-Up

OSK Holdings Berhad is an investment holding company. Through its subsidiaries, the Company provides retail and institutional broking in equities, futures and fixed income, underwriting and placement of securities, corporate finance and advisory, commercial and wholesale banking, asset management, trustee services and issues derivatives and structured products.

<ul><li>We remain positive on the group’s prospects, particularly due to the strong growth in capital financing, which recorded a PBT of RM26.1m in 1Q24, up 13.6% QoQ and 41.8% YoY.</li><li>Growth prospects for the segment remain strong anchored by Australia and civil servant segment.</li><li>The property segment expects RM1.75bn in launches for FY24, which is a record high in recent years. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We remain positive on the group’s prospects, particularly due to the strong growth in capital financing, which recorded a PBT of RM26.1m in 1Q24, up 13.6% QoQ and 41.8% YoY.Growth prospects for the segment remain strong anchored by Australia and civil servant segment.The property segment expects RM1.75bn in launches for FY24, which is a record high in recent years. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

OSK Holdings - An Emerging Force in Private Credit Market

<ul><li>OSK reported 1Q24 core PATAMI of RM122.8m (+26.7% QoQ; +6.4% YoY). The results were within our expectation, making up 26.4% of our full-year forecast.</li><li>The group is on track to record another year of solid growth anchored by property development from better progress billings and project cost savings, capital financing from higher loan portfolio and better economies of scale and industries from growing cables and IBS demand.</li><li>Its associate RHB is also expected to deliver stable performance given improving capital market from realization of investment activities. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

OSK reported 1Q24 core PATAMI of RM122.8m (+26.7% QoQ; +6.4% YoY). The results were within our expectation, making up 26.4% of our full-year forecast.The group is on track to record another year of solid growth anchored by property development from better progress billings and project cost savings, capital financing from higher loan portfolio and better economies of scale and industries from growing cables and IBS demand.Its associate RHB is also expected to deliver stable performance given improving capital market from realization of investment activities. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TRC Synergy Berhad is an investment holding company. Through its subsidiaries, the Company operates as general contractors carrying out construction works, sells construction materials, and develops property. TRC Synergy also hires and services vehicles and manufactures concrete piles and ready-mixed concrete.

<ul><li>TRC’s 1QFY24 core PATAMI of RM147k was below expectations. Negative deviation came from sluggish construction segment.</li><li>Unbilled orderbook is decent at RM850m (1.8x cover). With infrastructure projects expected to materialise in 2024, TRC could be a beneficiary of this healthier environment.</li><li>Projects we believe TRC will participate in are LRT, MRT3, remaining KUTS packages, road projects in East Malaysia and airport jobs. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TRC’s 1QFY24 core PATAMI of RM147k was below expectations. Negative deviation came from sluggish construction segment.Unbilled orderbook is decent at RM850m (1.8x cover). With infrastructure projects expected to materialise in 2024, TRC could be a beneficiary of this healthier environment.Projects we believe TRC will participate in are LRT, MRT3, remaining KUTS packages, road projects in East Malaysia and airport jobs. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hektar Real Estate Investment Trust / Equity Bottom-Up

Hektar Real Estate Investment Trust acquires and invests in income producing real estate in Malaysia.

Hektar Real Estate Investment Trust (HEKT MK)

<ul><li>Hektar’s 1Q24 core net profit came in at RM5.1m (+1.4x QoQ, -44.8% YoY). This came in below ours and consensus estimates at 16% of full year forecast.</li><li>The negative deviation was due to higher-than-expected finance costs. In view of the results shortfall, we cut our FY24/25 forecasts by -5.4%/-5.2%.</li><li>We also introduce FY26 forecasts. Besides, the increase in units in circulation after its private placement has resulted in our forecasted FY24/25 EPU to decline by -22%/-23% post earnings cut due to dilution. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hektar’s 1Q24 core net profit came in at RM5.1m (+1.4x QoQ, -44.8% YoY). This came in below ours and consensus estimates at 16% of full year forecast.The negative deviation was due to higher-than-expected finance costs. In view of the results shortfall, we cut our FY24/25 forecasts by -5.4%/-5.2%.We also introduce FY26 forecasts. Besides, the increase in units in circulation after its private placement has resulted in our forecasted FY24/25 EPU to decline by -22%/-23% post earnings cut due to dilution. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sam Engineering & Equipment / Equity Bottom-Up

Sam Engineering & Equipment (M) Bhd manufactures production equipment and aerospace products.  The Company produces manufacturing machinery including test handlers, laser mark handlers, material handling systems, vision inspection and automation solutions; and offers metal machining and sheet metal fabrication services.

<ul><li>SAMEE reported FY24 core earnings of RM108m (+27% YoY) which beat expectations thanks to stronger-than-expected EBITDA margin.</li><li>We are positive on SAMEE as: (i) the global semiconductor industry is gradually recovering from the inventory correction cycle; and (ii) aerospace is turning around strongly as global air passenger travel has recovered to &gt;99% of pre-pandemic level.</li><li>While the group's Thailand expansion will take time before breaking-even, we are encouraged by the narrowing losses in each subsequent quarter. We maintain HOLD on SAMEE with a higher TP of RM6.12.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SAMEE reported FY24 core earnings of RM108m (+27% YoY) which beat expectations thanks to stronger-than-expected EBITDA margin.We are positive on SAMEE as: (i) the global semiconductor industry is gradually recovering from the inventory correction cycle; and (ii) aerospace is turning around strongly as global air passenger travel has recovered to &gt;99% of pre-pandemic level.While the group's Thailand expansion will take time before breaking-even, we are encouraged by the narrowing losses in each subsequent quarter. We maintain HOLD on SAMEE with a higher TP of RM6.12.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SAM Engineering & Equipment - Ended with a Bang