Comprehensive Analysis of Malaysian Companies: An In-depth Look at Financial Performance and Market Strategies

Date: December 3, 2024

Broker: Maybank Investment Bank Berhad

Overview of Malaysian Market Performance

The Malaysian market continues to show an uptrend in core earnings, albeit at a slower pace with a 6.6% increase year-on-year in the third quarter of 2024, and a 15.5% rise over the first nine months of the year. Financial sectors like Banks, Utilities, and Oil & Gas were key contributors, marking significant growth. However, the Consumer sector lagged, showing a downturn in performance.

Detailed Company Analysis

This report dives deep into the performance of various companies across sectors, providing a comprehensive analysis of their financial results and future outlook.

Auto Sector

• Bermaz Auto: Despite a challenging market, Bermaz Auto posted a net profit of MYR 336.5 million in 2023, expected to slightly decline to MYR 305.1 million in 2024 before rebounding to MYR 318.3 million in 2025. The company maintains a “Buy” recommendation with a target price of MYR 2.42, reflecting a strong dividend yield of 10.6%.
• MBM Resources: The company shows steady growth with a “Hold” recommendation, achieving MYR 302.2 million in net profit for 2023 and forecasted to rise to MYR 325.8 million by 2025. Despite the “Hold” rating, the dividend yield remains robust at 9.3%.
• Tan Chong Motor: Currently struggling with negative profits, Tan Chong Motor receives a “Sell” rating with expectations of continued losses through 2025.
• Sime Darby: With a “Buy” recommendation, Sime Darby is positioned to increase its net profit from MYR 1,225.5 million in 2023 to MYR 1,401.7 million in 2025, supported by a solid dividend yield of 7.0%.

Banking Sector

• AMMB Holdings: Expected to see consistent growth with net profits rising from MYR 1,726.3 million in 2023 to MYR 2,018.0 million in 2025, AMMB is recommended as a “Buy” with a target price of MYR 6.30.
• Bank Islam Malaysia: Holding a “Hold” recommendation, the bank faces minor setbacks with profits expected to slightly decrease in 2024 before rebounding in 2025.
• Alliance Bank: Maintaining a “Buy” rating, Alliance Bank shows a promising growth trajectory with a solid increase in net profits anticipated through 2025.
• CIMB Group: With strong performance, CIMB Group stands as a “Buy” recommendation, with net profits projected to reach MYR 8,183.9 million by 2025.
• Public Bank: Retaining a “Buy” recommendation, Public Bank demonstrates consistent profit growth, supported by a healthy dividend yield.

Construction Sector

• Gamuda: Gamuda holds a “Buy” rating, with net profits expected to rise steadily, reflecting strong project execution and growth potential.
• IJM Corporation: With a “Buy” recommendation, IJM Corporation is positioned for growth, with projected net profits increasing significantly by 2025.
• Cahya Mata Sarawak: The company is recommended as a “Buy,” showing strong growth potential with expected net profit increases.
• Sunway Construction: Despite a “Sell” rating, Sunway Construction is expected to improve net profits by 2025.
• Pintaras Jaya: Receiving a “Hold” recommendation, Pintaras Jaya shows potential for recovery with a projected rebound in profits.

Consumer Sector

• AEON Co. (Malaysia): AEON Co. is marked as a “Buy,” with net profits projected to increase through 2025, supported by a reasonable dividend yield.
• Carlsberg Brewery: Carlsberg remains a “Buy” with steady profit growth and a robust dividend yield.
• Heineken Malaysia: Also a “Buy,” Heineken shows consistent growth with a high dividend yield.
• Padini Holdings: Holding a “Buy” rating, Padini is expected to recover from a slight dip in 2024 to increased profits in 2025.
• Nestle (Malaysia): Nestle is recommended as a “Buy,” despite a dip in 2024, it shows potential for recovery in subsequent years.

Gaming Sector

• Sports Toto: Sports Toto has a “Buy” recommendation with stable profit projections and a notable dividend yield.
• Magnum: Receiving a “Buy” rating, Magnum shows growth potential with increasing profits expected through 2025.
• Genting Bhd and Genting Malaysia: Both companies are recommended as “Buy,” reflecting recovery from pandemic impacts with projected growth in profits and dividends.

Glove Sector

• Hartalega Holdings: Hartalega is marked as a “Buy,” showing potential for recovery and profit growth by 2025.
• Kossan Rubber: Kossan maintains a “Buy” rating with expectations of recovering profits and a healthy dividend yield.
• Top Glove Corp: Despite current losses, Top Glove holds a “Hold” rating with potential for improvement by 2025.

Healthcare Sector

• KPJ Healthcare: KPJ Healthcare receives a “Buy” recommendation with expected steady growth in profits and an attractive dividend yield.
• Optimax: Optimax is also rated a “Buy,” reflecting growth potential and increased profits in the coming years.

Materials Sector

• Press Metal Aluminium Holdings: Holding a “Buy” rating, Press Metal shows significant growth potential with projected increases in net profits through 2025.

Oil & Gas Sector

• Dialog Group: Recommended as a “Buy,” Dialog Group shows steady profit increases with strong growth potential.
• Bumi Armada: With a “Buy” recommendation, Bumi Armada is expected to continue its growth trajectory with robust profit margins.
• Yinson Holdings: Yinson is marked as a “Buy,” reflecting steady growth and solid financial performance.

Property Sector

• SP Setia: SP Setia holds a “Buy” rating, with substantial growth anticipated in the coming years.
• UEM Sunrise: UEM Sunrise is recommended as a “Hold,” showing moderate growth potential.
• Sunway Berhad: Despite a “Hold” recommendation, Sunway Berhad is expected to maintain steady growth and profitability.
• Eco World Development: Eco World Development remains a “Buy,” with promising growth potential and strategic developments.

Telecommunications Sector

• CelcomDigi: Rated a “Buy,” CelcomDigi is expected to see significant growth due to merger synergies.
• Telekom Malaysia: Telekom Malaysia holds a “Buy” recommendation, showing potential for growth through cost optimization strategies.
• Axiata Group: With a “Buy” rating, Axiata is poised to benefit from merger synergies and strategic growth initiatives.

Transport Sector

• Capital A: Despite current challenges, Capital A is marked as a “Hold,” with expectations for recovery and growth in the future.
• AirAsia X: Rated a “Buy,” AirAsia X shows potential for recovery with projected improvements in profitability.
• Westports: Holding a “Buy” recommendation, Westports is expected to maintain steady growth and profitability.

Utilities Sector

• Tenaga Nasional: Tenaga Nasional is marked as a “Hold,” with steady profit growth expected through 2025.
• Petronas Gas: Also rated a “Hold,” Petronas Gas shows potential for stable growth and profitability.
• YTL Power: YTL Power holds a “Buy” recommendation, reflecting strong growth potential and strategic developments in the sector.

Conclusion

This comprehensive analysis provides insights into the performance and future outlook of key companies across various sectors in Malaysia. Despite challenges in some areas, many companies are positioned for growth and recovery, offering attractive investment opportunities.