With approximately RM266.0m worth of property sales recorded during the quarter, 9MFY22 sales at RM744.0m is largely on track to meet our expectations of RM1.00bn for FY22f. Moving forward, OSK’s property development unbilled sales of approximately RM1.04bn (slightly up from RM976.0m recorded as at end-2QFY22) will sustain earnings visibility over the next 18-24 months.

We reckon that the construction segment may continue to bleed, given that the balance EPC works at Vietnam is expected to be recognised only in 2HFY23. Moving forward, outstanding orderbook of more than RM200.0m will provide revenue visibility over the next 2 years.

Albeit a potential recovery could take shape, we reckon that challenges may persist from the rising operational costs environment which may dampen the margins. Going forward, the outstanding construction orderbook of approximately RM435.0m (as at end-3QFY22) will provide earnings visibility over the next 2-3 years.

Moving forward, we expect the medical segment which makes up to 56.0% of total revenue in 3QFY22 to remain as the key contributor to the overall group revenue. This will be supported by progressive launches of new products that is in line with the growing demand. Also, two new products (Mermaid declotting device and IHS syringe infusion system) launching in 2HFY22 is expected to strengthen the contribution from the medical segment in FY23.

REXIT remained committed to grow its customer base in e-Cover, InfoGuardian, and e-PPA. The group is in negotiation with various potential customers, targeting to bring two new customers on board in FY24. The revenue generated from the two new customers is expected to be in both transactions and subscription basis. Meanwhile, the group has been continuously refreshing its e-Cover portal and engaging existing customers for the implementation of additional products and services.

Resin continued to see price erosion in 3Q22, largely due to the overhang resin supply in the market as well as the overall lackluster demand amid uncertain global economic condition. We expect price consolidation to continue in the resin market before producers clearing out inventory overhang to rebalance supply and demand.

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.