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.

In line with the ELKDESA’s strategic direction to grow its hire purchase portfolio amidst economic recovery environment, the group increased its hire purchase receivables 19.4% YoY and 7.5% QoQ to RM560.3m. Liabilities wise, the group’s bank borrowings increased by 51.9% YoY to RM198.6m as a result of higher drawdown of block discounting facilities to support the increased hire purchase receivables.

Blended ASP declined -8.3% QoQ in 3QFY23. Given the intense market competition, we reckon that ASP may remain under pressure, before mild signs of revival towards mid-to-end 2023 as purchasers’ inventory levels from previous stockpiling activities dialed down and exit of new entrants from recent years.