Headline Corporate earnings improved in 2Q MediaTitle The Malaysian Reserve Date 03 Sep 2021 Language English Circulation 12,000 Readership 36,000 Section Companies Page No 10 ArticleSize 399 cm² Journalist S BIRRUNTHA PR Value RM 12,569 Corporate earnings improved in 2Q Expectations of a more robust commented the FBM KLCI component stocks delivered a set of 2Q21 results that recovery in the coming quarters had yet to show meaningful improvement could be on hold sequentially. He views this as due to the reintroduc- by S BIRRUNTHA tion of various pandemic restrictions against a backdrop of surging Covid-19 THE corporate sector's second-quarter infections which weighed on corporate (2Q) financial results reporting season financial performance. appears to be healthier in terms of face According to Ng, six FBM KLCI compo- value, with the number of companies nent stocks, namely, CIMB Group Holdings meeting and/or exceeding expectations Bhd (lower operating expenditure), Sime trumping those that missed, Public Invest- Darby Group Bhd (stronger vehicle and ment Bank Bhd (Publiclnvest) stated results heavy equipment sales), Sime Darby Plan- from the banking, plantation and consu- tation Bhd (higher crude palm oil prices), mer sectors exceeded expectations. IHH Healthcare Bhd (Covid-19-related "A closer look into the results will reveal patients and effective cost-saving initia- some extremes. Be it a function of over- •S^SL, * tives), Petronas Chemicals Group Bhd pessimism or under-estimation, results (higher product prices) and Tenaga Nasional Bhd (lower repair and mainte- were telling. : * . I.3H nance costs) beat projections. "While one can be forgiven for opening Pic by Hussein Shaharuddin that recovery is well on track, notable TNB is among the 6 FBM KLCI component stocks On the other hand, four FBM KLCI that beat projections weakness in the consumer-centric pro- component stocks under its coverage perty, real estate investment trust and cilled strict standard operating procedures were missed, namely, MR DIY Group (M) gaming suggests otherwise," it stated in a (SOPs) where only a limited number of Bhd (pandemic restrictions and delays in note yesterday. manufacturing subsectors were allowed expansion plans), PPB Group Bhd (weak Publiclnvest added expectations of a to operate. performance from grains and agribusiness more robust recovery in the coming quar- "Less-than-favourable operating con- and Wilmar International), Dialog Group ters could be on hold as companies con- ditions pushed the index to remain below Bhd (pandemic restrictions weighed down tinue to work through the effects of the the neutral level at 43.4 in August, a project execution) and Petronas Gas Bhd movement restrictions, delayed economic rebound, however, against 40.1 in July. (higher operating cost stemming from pan- sector reopenings and capacity constraints. "We remain cautious on the near-term demic restrictions). It highlighted the market remains tra- outlook given the ongoing Phase 1 in key Amlnvest's top buy reflects names that are likely to benefit from the recovery of the t ding-oriented with volatile swings to be industrial areas —* such as Selangor, Johor, expected. Perak and Kuala Lumpur — which could domestic and global economies, namely The investment bank maintained its take longer-than-expected to recover given Malayan Banking Bhd, Tenaga Nasional, year-end FTSE Bursa Malaysia KLCI (FBM the high number of work-related clusters," CIMB Group, Telekom Malaysia Bhd, RHB KLCI) closing at 1,590 points (15 times Publiclnvest stated. Bank Bhd, Westports Holdings Bhd, Astro multiple to one-year forward earnings) A combination of supply and demand Malaysia Bhd, ATA IMS Bhd, Hibiscus adding the country's manufacturing Pur- disruptions is expected to dampen the Petroleum Bhd and Perak Transit Bhd. chasing Managers' Index remained lack- index in the near term with the emergence The firm also maintained its end-2021 lustre in August due to the disruption from of stronger Covid-19 variants (Beta, Delta FBM KLCI target of 1,695 points based partial lockdown measures. and Lambda). on 16 times of 2021 forward-earnings The partial lockdown measure or Phase Amlnvestment Bank Research (Am- projection. 1 of the National Recovery Plan (NRP) pen- Invest) head of equity research Joshua Ng SEE ALSO P13 .