Going forward, we expect CPO prices to trade at an average RM3,500/MT for 2023. The rising inventory level that climbed to 2.3m tonnes in November 2022 highlights that demand remains relatively soft despite total CPO production was flat at 16.8m tonnes in 11M22. We expect challenges to persist from the rising labour, fertiliser and transportation costs that will keep margins in check.

Total packaging solutions provider with established track record that is underpinned by its manufacturing capabilities of corrugated paper packaging products as well as fast and lean inventory management system. We project core earnings to be driven by normalising economy in FY24, as well as the group’s strategies to penetrate the northern region of Peninsular Malaysia within the solar PV and medical devices industries. DS Sigma is valued by pegging its FY24f core EPS of 5.0 sen to P/E of 16.0x, leading to a FV of RM0.80.

Despite the slower contribution from Ambu, growth from the medical segment will be anchored by new products coming onto stream in 2023. This include IHS nonelectric syringe infusion system that will see mass production coming onto stream in December 2022, Ambu’s Falcon–C (colonoscope) in 2QFY23 and Plass’ soldier first aid hemostatic product that is still awaiting for FDA approval.

Looking ahead into 2023. OSK aims to rollout approximately RM1.00bn worth of gross development value (GDV) new launches. This comprises a healthy mixture from their (i) existing 2 townships located at Sg. Petani, Kedah and Seremban, Negeri Sembilan as well as (ii) several high-rise residential projects across Klang Valley. After acquiring some 89-ac of land (50-ac at Sg. Petani and 39-ac at Seremban) for a total of RM41.0m year-to-date, OSK will also remain active in their land banking replenishment activities, with the focus on lands adjacent to their 2 townships.

We welcome the move as we believe that the extension of new concession period will likely be more favourable with a better lease term and tariff structure against current concession agreement. A structural step up in port tariffs would be on the cards, as we reckon a revision of port tariffs that was unchanged for the past 35 years is long overdue to keep up with the rising operational cost over the years. This will also generate additional CAPEX to improve port facilities to cement their position as the Emerging Port/Terminal of the Year 2021 and Port/Terminal of the Year - South East Asia 2021.

YoY, the decline in core net profit was due primarily to the weakening of both GBP and EURO which has affected the group’s bottom line. GBP/MYR contracted from 5.65 to 5.17 while EURO/MYR dropped from 4.85 to 4.55 YoY. Besides, the significant decline in GBP/USD and EURO/USD of more than 15.0% for the past one year has put additional pressure on ASIAFLE’s margin as majority of its export proceeds are denominated in GBP and EURO while imports are mainly denominated in USD.

SURIA stands as of the biggest beneficiaries under the previous tabling of Budget 2023. Recall that the Federal Government has allocated RM250.0m to fund the expansion of the Sapangar Bay Container Port (SBCP). Upon completion tentatively in February 2025, the aforementioned port will be able to handle 1,250,000 twentyfoot equivalent units, from 500,000 at present. Meanwhile, the construction of a new jetty at Sapangar Bay Oil Terminal is on track for completion in 4Q22.

Moving forward, AME is equipped with an outstanding construction orderbook of RM304.2m to sustain earnings visibility over the next 2 years. For 1HFY23, new property sales of RM124.0m makes up to 49.6% of our projection at RM250.0m. This brings unbilled property sales to RM122.9m (up from RM120.4m in 1QFY23) to sustain the property development segment earnings for 2 years.