Key Highlights:

1. Company Results:

• Bumi Armada (BAB MK):
  • Q2 2024 Performance: Bumi Armada reported a strong performance in 2Q24, surprising the market with better-than-expected profits, largely due to income recognition from its associate FPSO ASV. The company upgraded its forecast and outlook from “Sell” to “Hold,” though risks remain, particularly concerning FPSO Kraken’s potential impairment.
  • Financials: Revenue grew 31.2% YoY to RM 578.9 million, and EBIT surged by 187.4% YoY. However, the company faces challenges related to ASV claims and further potential impairments for FPSO Kraken.
• Greatech Technology (GREATEC MK):
  • 1H24 Performance: Greatech reported record-high earnings in 1H24, with a significant increase in revenue driven by the life sciences and solar industries. Despite delays in some projects, the company is expected to see stronger earnings in 2H24.
  • Financials: The company posted a 28% YoY increase in revenue to RM 357.7 million, with a net profit of RM 48.4 million in 2Q24, marking a 51% QoQ increase.
• Hume Cement Industries (HUME MK):
  • FY24 Performance: Hume’s FY24 results were within expectations, with strong earnings growth due to higher cement prices and lower coal costs. The company is well-positioned for further growth, especially with the anticipated rollout of mega infrastructure projects in Malaysia.
  • Financials: The company reported a core net profit of RM 210.9 million for FY24, with an EBITDA margin of 29.3%. Hume’s earnings are expected to improve in FY25 due to better cement prices and increased demand.
• Kossan Rubber (KRI MK):
  • 2Q24 Performance: Kossan’s results were below expectations due to shipment delays and higher input costs. Despite these challenges, the company is expected to see improved performance in 2H24 as demand recovers and input costs stabilize.
  • Financials: Revenue for 2Q24 was RM 429.9 million, with a core profit of RM 26.8 million, reflecting a 7% QoQ increase.

2. Market and Sector Insights:

• The report provides insights into the broader market movements, including key indices such as the FBMKLCI and Bursa Emas, and highlights the top gainers and losers in the Malaysian market.
• The construction and cement sectors are expected to benefit from the upcoming mega infrastructure projects, which could drive higher demand and prices in these industries.

3. Investment Recommendations:

• The report maintains various investment calls, with recommendations ranging from “Buy” for companies like Greatech Technology and Hume Cement, to “Hold” for Bumi Armada. These recommendations are based on the companies’ financial performance, market conditions, and future prospects.

Conclusion:

The Malaysia Daily report provides a comprehensive overview of the Malaysian financial market, offering detailed analyses of company performances and sector outlooks. The report highlights the strong earnings growth in sectors like technology and cement, while also addressing the challenges faced by companies like Kossan Rubber due to external factors. Investors are advised to consider these insights when making investment decisions, particularly in light of upcoming infrastructure developments and sector-specific dynamics.

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