Moving forward, AME is equipped with an outstanding construction orderbook of c. RM300.0m to sustain earnings visibility over the next 2 years. For 9MFY23, new property sales of c.RM200.0m make up to 80.0% of our projection at RM250.0m. As a result, unbilled property sales at c. RM130.0m (up from RM122.9m in 2QFY23) will sustain the property development segment earnings for 2 years. Following the disposal of 10 plots of land to AME REIT, the group is equipped with a sizeable war chest with a net cash position at RM189.3m.

Going forward, the outstanding construction orderbook of approximately RM400.0m (as at end-FY22) will provide earnings visibility over the next 2-3 years. We gather that road upgrading works at Kulim valued at RM229.2m is at still infant stage (4% completion), while the Prihatin housing project valued at RM442.7m is expected to commence this year. This may boost contribution from the construction segment that was inactive over the past 3 financial years.

Moving forward, the normalising of steel prices in recent months should bode well for the general construction industry. Still, the elevated concrete price that rose 2.6% MoM in January 2023 will keep margins recovery in check. Hence, we expect ECONBHD may return to the black only towards end-2023.

Moving forward, we think that the price of Grade C chicken egg will linger around RM0.35. Do note that the ceiling prices are expected to be uplifted after June. An update report will be issued upon upliftment. In the shorter term, operating environment remains challenging in view of the elevated feed cost, as the egg price has been under ceiling price control since November 2022.

We reckon that net margins may stay in mid-to high teens in 1HFY23 before potentially improving towards slightly above 20.0% in 2HFY23 after the issue of defective products received from its FDA approved supplier resolves. While there were several rounds of selling price revisions last year, we reckon that margins recovery will be challenging due to the elevated copper prices that traded above USD8,000/MT year-to-date vs. USD5,000 6,500/MT level during pre-pandemic.

YoY, core net profit fell 16.6% YoY to RM3.7m, primarily resulted from (i) lower contribution from OEM segment that outweighed the slight increase contribution from House Brand segment, (ii) increase in administrative expenses resulting from annual bonus provisions and employee benefit expenses for share options, and (iii) increase in amortisation of research and development cost as a result of new products launched.

We continue to like REXIT’s business model leveraging on its core competencies such as its 24x7 secured e-Cover infrastructure, experienced management team, and solid relationship with clients which will ensure a stream of recurring income. Meanwhile, the group is in negotiation with potential new clients for FY24 who will bring new source of revenue for the business in both transactions and subscription basis.

For now, MSC remains committed to gradually improving their daily mining output level. However, we remain cautious that the rising natural gas price may continue to impact bottomline margins. Hence, we expect net margins to stay around midsingle digit over the foreseeable future.