YoY, the bottomline rocketed as revenue from the poultry segment increased mainly due to (i) higher sales volume of DOC in Malaysia and Indonesia, (ii) higher average selling price (ASP) and sales volume of broiler chickens and eggs in Vietnam, and (iii) subsidies from Malaysia’s government on livestock of RM24.9m. Besides, higher contribution from the feedmill segment was primarily attributed to higher ASP and sales volume in Indonesia and Vietnam.

For 9M23, the lower core net profit was mainly due to the share of losses of associate at RM4.7m vs. a share of profit of RM9.8m in 9M22. The group saw an improvement in revenue as revenue contribution from the Consumer and Food ware division rose 6.9% for the period. Meanwhile, turnover from the filing division remained largely unchanged.

Moving forward, OSK’s property development unbilled sales of approximately RM1.00bn will sustain earnings visibility over the next 18-24 months. We have penciled RM1.00bn of property sales in FY23f, backed by several upcoming highrise developments across Klang Valley and the on-going 2 township developments. Meanwhile, their 2,003-ac of landbank will ensure earnings sustainability over the long run, backed by the strong historical track record of take-up rates.

We gather that production volumes for FeSi rose 3.6% to 71,426 tonnes in 2H22 vs. 68929 tonnes in 1H22. Cumulatively 140,355 tonnes make up to 93.6% of our assumption of 150,000 tonnes. On the other hand, production volumes of Mn alloys fell 21.3% to 95,506 tonnes in 2H22 vs. 121,307 tonnes in 1H22. The decline was due to 4 manganese alloy furnaces were shut down in stages for major maintenance works in 4Q22. We expect production to tick slightly lower in 2023 with FeSi at 125,000 tonnes and Mn alloys at 210,000 tonnes due to the conversion progress of 2 furnaces to produce MetSi.

Moving into 2023, we expect further improvement in performances. This will be backed by their execution of its robust orderbook replenishment in recent two years. We reckon that margins may at mid-single digit level in subsequent years.

While market cycle has been establishing a long trough floor, resin price continued to see consolidation in 4Q22. Market was hit by massive oversupply due to uninspiring demand environment. Nevertheless, we expect spot resin activity to gradually pick up in FY23, but demand may remain slow at least for 1H23.

Local sales in 4QFY22 at RM29.6m continues to anchor topline, making up to 64.5% of total revenue, followed by sales to Japan at RM12.6m (27.8% of total revenue), Australia at RM2.4m (5.3% of total revenue) and other countries at RM3.2m (2.8% of total revenue). With the easing of container shortages and tapering of freight costs, we reckon that SLP may step up their efforts to shore up their export sales. Still, we expect local sales to remain as the key contributor in FY23f.

Given the absence of new orderbook replenishment, we reckon that the construction segment may continue to remain in red, while the balance EPC works at Vietnam is expected to be recognised progressively in subsequent quarters. Moving forward, outstanding orderbook of c.RM150.0m will provide revenue visibility over the next 2 years.