Company Research

 Notwithstanding concerns over lethargic O/B replenishment, GREATEC’s 1Q25 earnings delivery met expectations due to sound project execution. With GREATEC trading at 21x FY26E PER (vs. its 5Y fwd mean of 39x), we believe valuations remain undemanding despite US tariff uncertainties. We maintain FY25-27E, our BUY rating and TP of MYR1.95 (26x FY26E PER, 1.0SD to 5Y mean) as its fundamentals remain intact. We continue to like GREATEC for its mkt leading position in factory automation and exposure to global marque brands in high-growth sectors (solar/EV/LS/semicon).  Excluding one-offs (+MYR2.4m), GREATEC registered 1Q25 core earnings of MYR39.3m (+17% YoY/+41% QoQ). The results met expectations, coming in at 23%/22% of ours/street’s FY25E forecasts. Despite a 16% YoY increase in group turnover to MYR175.4m from steady solar and e-mobility PLS project execution, turnover weighed sequentially (-15% QoQ) as the group began the design & planning stage of a new project in 1Q25 (v...

 Velesto delivered yet another beat in 1Q25. Post earnings call and disclosures of its updated rig schedule, we adjust our FY25-27E net profit forecasts by +5%/-5%/-9% to account for: i) lower realised DCR forecasts of USD120k/102k/100k (from USD122k/112k/110k); and ii) lower utilisation rate assumptions of 71%/72%/76% (from 74%/81%/81%). Our TP is maintained at MYR0.19 after rolling forward our base valuation year to FY26E – pegged to an unchanged PER of 10x, inline with other rated OGSE peers. Maintain BUY.  Velesto’s 1Q25 core net profit of MYR52.6m (-5% QoQ, +12% YoY) came in above expectations at 34%/43% of ours/consensus full-year estimates. While our 1Q25 operational assumptions were close to reported operational figures (DCR: USD127k, UR: 67%), key variance against our estimates was mainly due to higher-than-expected net margins (+9.6 ppts YoY) due to: i) lower-than-expected depreciation; and ii) Velesto’s cost optimisation initiatives which are bearing fruits. We note...

Maintain BUY and MYR0.62 TP, 68% upside. Malaysia Marine & Heavy Engineering’s results are in line with our expectations, as the stronger marine segment helped cushioned the lower revenue of the heavy engineering (HE) division. We remain positive on the group’s outlook – given its strong orderbook, underpinned by its growing involvement in the clean energy and low-carbon sectors. MMHE’s robust project pipeline, coupled with improved contract terms, should support its sustained profitability.  MMHE's results met our expectations but missed the consensus estimate. Its core profit of MYR16m accounted for 25% and 16% of our and Street fullyear forecasts. No dividend was declared for the quarter.  Results review. Revenue fell to MYR453.1m (-45% QoQ, -54% YoY) mainly due to lower project billings from the HE division. The decline was attributed to several ongoing projects nearing completion, which led to reduced activity, while newer projects remained in their early stages. Cons...

Maintain BUY and TP of MYR2.33, 64% upside with c.3% FY26F yield. Sime Darby Property’s 1Q25 earnings are below estimates, as some industrial property sales are yet to be recognised. Its property sales were encouraging, at MYR928m for the quarter, ie on track to meet the MYR3.6bn target by the year-end. While the property sales momentum is likely to stay strong, given its strategic launches, management is also driving the growth of the investment property segment – KLGCC Mall will open its doors in 2H25, while SDPR will ensure the timely delivery of two data centre facilities.  1Q25 results. SDPR’s property development revenue during the quarter eased, as some sales of industrial products have yet to meet the revenue recognition criteria while revenue from residential projects decelerated due to the lower number of launches held in 2H24. Overall cost structure improved, as marketing and selling expenses were only at MYR27.7m (39% lower YoY) as a more cost-effective promotional appr...

Results deemed within; D/G to HOLD @ MYR8.26 TP Despite a good start, we deem MISC’s 1Q25 results to be in line including the recognition of a one-off gain for FPSO Bunga Kertas. While we make no changes to our FY25-27E forecasts, our SOP-based TP is lowered to MYR8.26 (from MYR8.34) to account for weak guidance on continued delays in LNG liquefaction projects and oversupply of LNG vessels in the near term. Our terminal growth (TG) rate is trimmed to 0.2% (from 0.3%) for its LNG business. Our SOP-TP also pencils in a lower consensus TP of its 66.5%-owned ММНЕ (ММНЕ МK, Not Rated). With limited upside, we D/G MISC to HOLD (from BUY).  1Q25 core net profit +45% QoQ, +8% YoY MISC’s 1Q25 core net profit of MYR755m (+45% QoQ, +8% YoY) was boosted by a one-off gain in relation to the commencement of a new lease contract for FPSO Bunga Kertas in the Gulf of Thailand – amounting to c.USD17m. In view of a normalisation of profits in upcoming quarters, we deem MISC’s results to be within exp...

Keep BUY, new MYR0.48 TP from MYR0.50, 76% upside, FY26F (Mar) yield. FY25 earnings of MYR110.7m (+22% YoY) exceeded expectations, supported by higher ASPs and i-Kad orders on stronger-than-expected margins.  We like NexG’s competitive strength in its niche solutions, strong cash flow generation, and potential upside from new project/contract wins at below-mean valuation. We tweak our TP lower after incorporating an updated ESG scoring.  A beat! FY25 revenue of MYR373.5m (+1.4% YoY), which translated to stronger core earnings of MYR110.7m, was ahead of expectations at 111.9% and 110.5% of our and Street’s full-year estimates. However, no dividend was declared, which came below our expectations.  YoY revenue was flattish with lower demand for passport and smartcard solutions – this was cushioned by higher ASPs and contributions from the i-Kad segment. The ASP hike, coupled with lower depreciation costs, lifted EBITDA margins by 290bps. 4QFY25 core profit rose 14.7% YoY on ...