We gather that the extended normalisation of tin prices appears to found stability early-November 2022 (c.USD16,900/MT) before staging rebound above USD20,000/MT over the past week in anticipation of recovery in demand following the potential easing of Covid-19 restrictions from China. Still, we think that tin price may remain soft due to weak demand from the consumer electronics sector. For now, we have revised our tin prices projection lower to an average of USD20,000/MT for the rest of the year and an average of USD25,000/MT for 2023f.

Overall, occupancy rate has been gradually showing a mild uptrend move QoQ for majority of the buildings. As at 3Q22, the occupancy rate for older buildings aged more than 20 years which include UOA Centre, Wisma UOA II, and Wisma UOA Damansara I stood around 68.0-73.0%. For newer buildings such as Menara UOA Bangsar and UOA Corporate Tower, occupancy rate remained above 90.0%. Meanwhile, rental revision rate for 3Q22 remained flattish.

We gather that orderbook replenishment now stood at RM1.62bn, largely surpassing RM1.28bn recorded in FY21. Given that demand for from big data centers, electric vehicles, IoT and 5G applications are still in the picture, there is no slowdown in global wafer fabrication plant expansion plans. We believe that KGB is well positioned to ride onto the aforementioned growth and we made no changes to our orderbook replenishment assumption of RM1.20bn for FY23f.

Following an increase of number of distributors from 806 in FY21 to 960 in FY22, NOVA remained committed to increase the number to 1,200 by FY25. With the construction of Phase 2 of its new plant well underway, we believe the upcoming additional capacity will allow the group to meet rising demand for nutraceutical products from distribution network expansion.

In view of a sustained repayment trend, ELKDESA raised its hire purchase receivables by 10.9% YoY and 3.8% QoQ to RM521.1m to capture a stronger demand for used-car hire purchase financing amid normalising economy. Contributing factors driving the demand include the popularity of online trading platforms for used car, as well as the revision of minimum wages to RM1,500.

The poultry industry witnessed continuous increase in demand for eggs in the domestic and overseas market amid economic recovery. However, the elevated feed price could continue to hit TEOSENG’s margin with egg being placed under price control scheme. Hence, we remained cautious on the industry’s outlook until both the price and feed costs normalise.

We believe that the sequential growth of the industrial gases segment will take place in the foreseeable future and will provide KGB with stable recurring income. This will also be back by the commencement of new onsite supply scheme over a 10 years period for an optoelectronics semiconductor giant in Kulim, Kedah from 1Q23. The move will generate a stable recurring revenue of RM180.0m that will span over a 10-year period.

We gather that blended ASP only fell -1.7% QoQ in 2QFY23. The slower magnitude of price. normalisation suggest that ASP may have bottomed. Moving forward, we expect ASP to trade around current levels, before demonstrating mild signs of revival towards mid-to-end 2023, following China’s reopening of economy and purchasers’ inventory levels from previous stockpiling activities dialed down.