Moving forward, we reckon that the UHP segment will continue to anchor revenue contribution, being kept busy by multiple wafer fabrication works. Meanwhile, the general contracting segment will focus onto the relatively large-scale construction work that was secured last year at Sarawak, while the industrial gas segment will be kept busy with the gas supply scheme for one of the largest optoelectronics semiconductor companies located at Kulim, Kedah.

The FBM KLCI fell into the negative territory in line with the regional peers as investors remained jittery following the overnight tumble on Wall Street. Given the persistent inflation worries, we believe the selling pressure may prolong on Wall Street, translating to spillover selling activities on the technology sector. On the broader market, we expect bargain hunting activities to emerge in the recovery-themed and plantation sectors ahead of the reporting season.

The FBM KLCI rebounded with the bargain hunting activities in the plantation and banking sector; the latter propelled following the BNM’s announcement to increase the overnight policy rate by 25 basis points. We believe investors should brace for heightened volatility across global markets as Wall Street tumbled overnight in anticipation on a faster pace of interest rate hike and potential further tightening in monetary policies after the higher-than-expected inflation data was released. Nevertheless, recovery-themed and commodities related sectors may be favourable ahead of the quarterly reporting season.

Moving forward, SLP will be targeting to bring its utilisation rate back to pre-Covid-19 levels, which is at around 75.0%. Local sales growth will be backed by the recovery in economic activities as the country entered into the endemic phase, while the Japanese market will be boosted by the upgrade of economic growth to +3.2% YoY (from +2.2% YoY) in 2022.

We gather that plants utilisation rate has recovered as production activity resume uninterrupted. Moving forward, we expect utilisation rate to hover at current levels for FY23f. We were also guided that ASP trend appears to have stabilised, which we expect current prices that is above pre-pandemic level to hold throughout FY23f.

SDS Group Bhd (SDS) is primarily involved in production and distribution of bakery products, which include bread, buns, rolls, and cakes, alongside with operating of F&B outlets. The products are marketed under its trademarked brands of “Top Baker” and “Daily’s”.

The FBM KLCI bucked the downtrend in the regional markets, following the three straight session of decline, mainly powered by bargain hunting in telecommunication and selected banking heavyweights. We foresee investors to continue to buy the dip ahead of the earnings season, but overall market sentiment may be tested by concerns over (i) impact of Cukai Makmur, (ii) mixed performances on Wall Street overnight, and (iii) the upcoming BNM’s interest rate decision.

We gather that the aforementioned contract is the third major construction contract secured by Econpile for FY22f. Current orderbook replenishment now stands at RM155.4m, makes up to 77.7% of our expectations of RM200.0m for FY22f. Although the figure is still not within reach with only approximately 2 months left before the end of FY22f, we believe the jobs acceleration will materialise moving into 2H22 in line with the economic recovery.