PCHEM (Neutral↔;TP↑MYR8.35@10x FY21 EV/EBITDA). FY20 results beat expectations on better than expected margins. FY20 DPS at 12sen (vs FY19’s 18sen).
♦️4Q20 core profit +4x QoQ on stronger EBITDA (led by higher ASPs and widened margins) amdist higher sales volume and plant utilisation at 94%, from 90% in 3Q20).
♦️ FY20 core earnings -31% YoY on ASPs and margin weakness with 4% lower sales volume.
♦️ PIC is further delayed to 2H21 due to COVID-19 disruption Management guided 80% plan utilisation to achieve P&L breakeven under current spread. We expect PIC to incur minimal losses as only EBITDA positive to be achieved in 2H21.
♦️ 1Q21 could be stronger as major product ASPs continue to extend. Increase FY21F-22E by 2-5% but we have factored in relatively weaker price trend in 2H21 in view of industry capacity additions.
♦️ Upgrade to BUY with higher TP of MYR8.35 pegging to 10x FY21 EV/EBITDA, riding on strong earnings rebound this year.
•* Telekom Malaysia Bhd (TM)* returned to the black in the fourth quarter ended Dec 31, 2020 (4QFY20) registering a net profit of RM259.44 million from a net loss of RM51.09 million recorded a year earlier due to lower operating costs and net other gains, the telco said. The improvement in its bottom line was despite the fact that TM saw its revenue fall slightly by 1.1% to RM3 billion from RM3.03 billion a year earlier, underpinned by lower revenue in its voice, data and non telecommunication services. Its earnings per share (EPS) jumped to 6.87 sen in the quarter from 1.37 sen a year earlier. TM also declared a final interim single-tier cash dividend of 7.5 sen, to be paid on March 31. For the full year, TM has proposed 14.3 sen for FY20 versus 10 sen in FY19. For its full-year earnings in FY20, the telco reported a decline in revenue of 5.2% to RM10.84 billion against RM11.43 billion registered last year due to lower revenues from all lines of products. TM's full-year profit surged 61% year-on-year to RM1.02 billion in FY20, contributed partly by lower tax charges as well as contribution from the group's share of improved performance of subsidiaries with non-controlling interests. TM also will be investing between 14% and 18% of its annual revenue for the financial year ending Dec 31, 2021 (FY21) for capital expenditure (capex) purposes, said its chief executive officer Imri Mokhtar.
•* VSTECS Bhd’s* net profit for the fourth quarter ended Dec 31, 2020 (4QFY20) grew almost 20% to RM12.87 million — the highest quarterly net profit on record, compared with RM10.74 million last year driven by the new normal of working and learning from home. Earnings per share rose to 7.2 sen from six sen. Quarterly earnings also jumped 21.7% to RM659.63 million from RM542.1 million in 4QFY19. The company declared a second interim dividend of 4.5 sen per share in respect of the financial year ended Dec 31, 2020 (FY20), payable on May 21. For the full year of FY20, it posted a record high net profit of RM36.78 million, 24.3% higher, from RM29.59 million last year. Annual revenue hit an all-time high of RM2.02 billion, up 11.9% from RM1.8 billion.
•* Vitrox Corp Bhd’s* net profit for the fourth quarter ended Dec 31, 2020 (4QFY20) jumped 79.4% to RM31.92 million from RM17.79 million a year earlier on the back of higher revenue. Earnings per share rose 6.77 sen from 3.78 sen previously. Quarterly revenue climbed 68.03% to RM159.8 million from RM95.1 million a year ago mainly driven by the tremendous increase in demand from Machine Vision System (MVS) and Automated Board Inspection (ABI). For the full year ended Dec 31, 2020 (FY20), net profit increased 32.6% to RM105.62 million from RM79.65 million. Revenue climbed 38.51% to RM470.38 million from RM339.59 million due to higher volume demands from MVS and ABI.
•* D&O Green Technologies Bhd’s* net profit surged 119% to RM30.32 million for the fourth quarter ended Dec 31, 2020, from RM13.85 million in the previous year’s corresponding quarter, benefiting from increased demand and recovery in the automotive industry. The automotive LED maker’s revenue for the quarter grew 39% to RM209.57 million from RM150.47 million a year earlier. For the full year, D&O said its net profit rose 42% to RM49.65 million from RM34.87 million in the preceding year, while revenue climbed 14% to RM575.78 million from RM504.31 million.
•* Rubberex Corp Bhd* posted a fourth quarter ended Dec 31, 2020 net profit of RM59.44 million — 15 times the RM3.88 million it made in the corresponding quarter a year ago — which is its highest quarterly net profit on record. The jump in the rubber glove makers' earnings was due to higher average glove selling prices amid higher demand. Revenue for the quarter surged 203.8% to RM152.83 million from RM50.31 million previously. The group's annual net profit also swelled to its highest of RM131.18 million for FY20, 11.6 times the RM11.35 million it posted in FY19, as annual revenue about doubled to RM416.39 million from RM218.64 million.
•* Allianz Malaysia Bhd’s* net profit for the financial year ended Dec 31, 2020 (FY20) rose to RM520.32 million compared with RM492.48 million in FY19. Revenue also increased to RM5.95 billion from RM5.53 billion previously, due mainly to higher gross earned premiums and investment income by RM384.8 million and RM26.5 million respectively. As for the fourth quarter ended Dec 31, 2020, net profit was higher at RM144.03 million compared with RM133.08 million, while revenue increased to RM1.53 billion from RM1.41 billion in the same quarter in 2019.
•* Press Metal Aluminium Holdings Bhd* posted a net profit of RM142.6 million for the fourth quarter ended Dec 31, 2020 on higher aluminium prices, up 6% from RM134.47 million recorded a year ago. Quarterly revenue, however, slipped 3.69% to RM2.12 billion from RM2.2 billion due to the lower extrusion products sales, according to a bourse filing today. Its earnings per share rose slightly to 3.53 sen from 3.33 sen in 4QFY19. The group declared a fourth interim single-tier dividend of 1.25 sen per share to be paid on March 31, 2020. This brings total dividends for FY20 to 4.25 sen translating to a pay-out ratio of 37.5%. For the full year ended Dec 31, 2020 (FY20), net profit declined to RM457.2 million from RM474 million a year earlier. Revenue fell 14.4% to RM7.54 billion from RM8.8 billion due to softer aluminium prices in the first half of 2020 during the height of the pandemic.
•* Inari Amertron Bhd* posted its best-ever quarterly net profit of RM90.1 million in the second quarter ended Dec 31, 2020 (2QFY21), about 2.4 times the RM37.49 million it made last year, driven by stronger sales volume generated by its radio frequency (RF) business. Quarterly revenue grew by 42% to RM376.83 million from RM265.44 million previously. Earnings per share rose to 2.74 sen from 1.18 sen. The group declared a second interim dividend of 2.5 sen per share in respect of the financial year ending June 30, 2021 (FY21), payable on April 8. For the first six months of FY21, Inari Amertron's net profit jumped 88% to RM160.17 million from RM85.22 million last year, while revenue climbed 24.5% to RM724.45 million from RM582.04 million.
•* AEON Co (M) Bhd’s* net profit for the financial year ended Dec 31, 2020, fell to RM41.42 million from RM109.229 million registered last year. Revenue also declined 10.7% to RM4.05 billion from RM4.54 billion previously, due to lower revenue from the retailing segment and property management services by RM387.6 million and RM100 million respectively, it said. AEON said revenue from its retail segment was affected by lower non-essential category sales, namely hard-line and soft-line products as a result of the Covid-19 pandemic and Movement Control Order (MCO), as well as other related restrictions since March 18, 2020, whereby general merchandise and specialty stores were not allowed to operate for almost two months during the period under review.
•* Genting Plantations Bhd’s* net profit grew by 28.1% to RM79.04 million in the fourth quarter ended Dec 31, 2020 from RM61.69 million a year earlier, due to stronger palm products prices. Earnings per share rose to 8.81 sen from 6.88 sen. Quarterly revenue rose 14.9% to RM739.25 million from RM643.59 million, the group said. The group has declared a final dividend of four sen per share payable on a date to be fixed later as well as a special dividend of 11 sen per share to be paid on March 30. For the full year, Genting Plantations said its net profit grew 79% to RM254.36 million from RM142.07 million in 2019, while revenue was up 10.2% to RM2.5 billion from RM2.27 billion.
•* Parkson Holdings Bhd* has narrowed its net loss to RM28.27 million or 2.65 sen per share in the second quarter ended Dec 31, 2020 from RM81.08 million or 7.6 sen per share last year, mainly thanks to better operating profits from its China operations. Quarterly revenue was down 11.1% to RM877.77 million from RM987.41 million. For the cumulative six months ended Dec 31, its net loss also shrank to RM50 million, from RM125.7 million last year, while revenue slipped 9.9% to RM1.69 billion from RM1.87 billion.
•* DRB-Hicom Bhd* has reported a surge in net profit to RM985.99 million for the fourth quarter ended Dec 31, 2020 (4QFY20), from RM47.5 million in the preceding quarter, fuelled by higher contributions from its automotive and properties segments. The diversified group posted a record-high quarterly revenue of RM4.85 billion, versus RM3.56 billion in the preceding quarter underpinned by completion of the disposals of property assets and investments by the group and higher sales of vehicles and components by Proton. For the financial year ended Dec 31, 2020 (FY20), DRB-Hicom registered pre-tax profit of RM540.1 million on the back of revenue of RM13.16 billion, thanks to moderate business recovery in the second half of 2020 and the completion of an asset disposal exercise.
•* Hap Seng Plantations Holdings Bhd* saw its net profit in the fourth quarter ended Dec 31, 2020 increase by 47% quarter-on-quarter to RM36.95 million from RM25.08 million. The planter said a combination of higher commodity prices and sales volume led to the increase. Earnings per share rose to 4.62 sen from 3.14 sen previously. The planter declared a second interim dividend of 5.5 sen per share, payable on March 24. In contrast, it declared a two sen dividend in 4QFY19. This brings total dividends declared for FY20 to seven sen per share from 2.5 sen in FY19. Hap Seng Plantations' revenue was up 19% at RM153.27 million from RM128.9 million in 3QFY20. On a year-on-year (y-o-y) basis, the group saw its net profit rise 19% from RM31.17 million, while its revenue was up 23% from RM124.86 million. Earnings per share rose from 3.9 sen in 4QFY19. Its latest quarterly net profit brings its FY20 net profit to RM90.3 million, up 187% from RM31.45 million in FY19. Full-year revenue was 12% higher y-o-y at RM467.6 million compared with RM418.6 million.
•* Globetronics Technology Bhd’s* net profit for the fourth quarter ended Dec 31, 2020 rose 15.97% to RM16.86 million from RM14.54 million a year ago on higher revenue. Its quarterly revenue was also up, growing 7.11% to RM63.15 million from RM58.96 million a year ago. The group has declared a second interim single tier ordinary dividend of 1 sen per share and a single tier special dividend of 1.5 sen per share, totalling RM16.7 million in respect of the financial year ended 31 December 2020, that was paid on 3 December 2020. The group said the higher revenue and net profit achieved in the current year were mainly due to higher volume loadings and better economy of scale achieved from certain of the group's customers. For the full year ended December 31, 2020, the group’s net profit increased by 13.62% to RM50.8 million from RM44.71 million a year earlier, as its yearly revenue rose 5.18% to RM227.52 million from RM216.32 million a year earlier.
•* Dayang Enterprise Holdings Bhd’s* net profit for the fourth quarter ended Dec 31, 2020 slumped 83.17% to RM13.17 million from RM78.23 million a year ago, dragged by slower work orders due to the pandemic. Revenue fell 44.49% to RM158.23 million from RM285.02 million mainly attributable to lower vessel utilisation at 44%, as compared with 76% in the previous corresponding quarter. For the full year ended Dec 31, 2020, the group’s net profit plunged 75.07% to RM57.59 million from RM230.95 million in the previous year, as revenue slipped 30.08% to RM731.44 million from RM1.05 billion.
•* Datasonic Group Bhd* saw its net profit for the third quarter ended Dec 31, 2020 slump to RM627,000 from RM20.18 million in the corresponding quarter last financial year following lower demand for its passport, consumables and personalisation services. Quarterly revenue also shrank by 61% y-o-y to RM29.45 million from RM74.97 million a year prior. For the cumulative nine months ended Dec 31, 2020, its net profit declined by 73% y-o-y to RM12.93 million, from RM48.05 million in the corresponding nine months of the previous financial year. Meanwhile, 9MFY21 revenue declined by 43% y-o-y to RM112.59 million from RM196.83 million a year prior. The group also announced that it has appointed Wan Zalizan Wan Jusoh as its new managing director replacing Datuk Razali Mohd Yusof, who has been redesignated as a non-independent and non-executive director. Meanwhile, Safian Mohd Yunus has been appointed as Razali's alternate director, while Handrianov Putra Abu Hanifah has resigned from his post as executive director to pursue other interests.
•* UOA Development Bhd's* net profit for the fourth quarter ended Dec 31, 2020 slumped 68.95% to RM34.96 million from RM112.61 million a year ago, due to lower recognition from ongoing projects and a fair value loss from the revaluation of its investment properties. Its quarterly revenue also fell 14.5% to RM194.11 million from RM227.02 million a year ago. The group has recommended a first and final single-tier dividend of 14 sen and a proposed special dividend of one sen for the financial year ended Dec 31, 2020, utilising proceeds from the disposal of UOA Corporate Tower. For the full FY20, the group's net profit slipped 2.05% to RM391.29 million from RM399.47 million a year earlier, as its revenue declined by 23.53% to RM844.6 million from RM1.1 billion.
•Steel products and equipment maker Prestar Resources Bhd’ net profit for the fourth quarter ended Dec 31, 2020 jumped to RM15.76 million, five times the RM3.12 million it made in the corresponding quarter a year earlier, driven by strong demand and higher selling prices of its products. Quarterly revenue grew 22.6% to RM137.05 million from RM111.77 million. Earnings per share jumped to 8.12 sen from 1.59 sen previously. The group has proposed a final dividend of 1 sen per share, amounting to RM1.94 million, subject to shareholders' approval. The strong 4QFY20 lifted the group's annual profit for FY20 to RM22.17 million, four times the RM5.53 million it recorded in FY19. This came despite annual revenue slipping 9.73% to RM409.98 million from RM454.17 million, following sales slowdown in April and May due to MCO restrictions, and the reimposition of the conditional MCO towards the end of 2020.
•* Tek Seng Holdings Bhd* returned to the black with a net profit of RM8.16 million for the fourth quarter ended Dec 31, 2020 , from a net loss of RM12.94 million a year ago, underpinned by higher profit in its polyvinyl chloride (PVC) segment. The group's quarterly revenue rose 14.27% to RM48.52 million from RM42.46 million. It proposed a final dividend of 0.5 sen for FY20. For FY20, the group made a net profit of RM27.41 million compared to a net loss of RM16.25 million a year earlier, as revenue grew 10.71% to RM191.09 million from RM172.6 million
•Property development and realty outfit Majuperak Holdings Bhd aims to raise up to RM20 million via a proposed private placement. The group said the funds are to support its operating expenditure, repay bank borrowings and fund upcoming projects. Majuperak said it plans to issue up to 56.66 million in new shares, representing not more than 20% of its total number of issued shares. It said of the total proceeds expected to be raised, RM7 million has been earmarked for a facility management project involving the provision of clinical support service for four Ministry of Health clinics in Terengganu in addition to the 10 clinics already serviced by the group. Meanwhile, RM11.46 million will be allocated for administrative and operating expenditure to sustain its operations for the year ahead. Additionally, RM2 million will be utilised for the settlement of existing overdraft facilities.
•* AirAsia Group Bhd* said the budget airline has recognised a loss of US$74.11 million (RM299.34 million) in the second half of 2020, as a result of 33%-owned associate AirAsia Japan Co Ltd’s (AAJ) bankruptcy proceedings due to the impact of the Covid-19 pandemic. The group said AAJ has commenced its bankruptcy proceedings as ordered by the court today. The company also incurred US$5.18 million in the fourth quarter of 2020 and first quarter of 2021 for expenses related to the aircraft de-registration to move three aircraft from Japan to Malaysia.
•* Destini Bhd* has entered into an agreement with Keretapi Tanah Melayu Bhd (KTMB) to establish a joint-venture (JV) company, ET Sdn Bhd (ETSB) to expand its capabilities in maintenance, repair and overhaul (MRO) services in the rail sector. Destini said both parties have inked a subscription, JV, and shareholders agreement that will see Destini acquiring a 70% stake in ETSB, an indirect wholly-owned subsidiary of KTMB, through its 100%-owned subsidiary, Destini Rail Sdn Bhd. The remaining 30% shareholding will be held by KTMB, through its wholly-owned subsidiary KTMB Technics Sdn Bhd.
•* LKL International Bhd* has announced that its subsidiary LKLAdvance Metaltech Sdn Bhd has secured exclusive distributorship rights for Singapore-based iWOWTechnology Pte Ltd’s trace token nationwide and targets Selangor to be the first State in Malaysia to adopt the device. LKL said the group will market, sell and distribute trace tokens to assist Selangor's efforts in containing the spread of the Covid-19 virus, particularly in hotspots such as workplaces, factories and construction sites. The exclusive distributorship agreement has been signed for an initial duration of two years and renewable thereafter upon future consensus between both LKL and iWOW Technology.
