Latest news with #HiapTeck
The Star
02-07-2025
- Business
- The Star
Hiap Teck eyes stronger recovery through ESSB gains
HLIB Research expects the group's earnings to remain under pressure in the near term. PETALING JAYA: Hiap Teck Venture Bhd is expected to post another muted quarter in the fourth quarter of financial year ending July 31, 2025 (4Q25), weighed down by persistent weak steel prices, lingering uncertainties from US tariffs and the sluggish pace of domestic infrastructure project rollouts. In 3Q25, the group posted a net profit of RM34.28mil on the back of RM344.84mil in revenue, compared with RM46.82mil and RM399.68mil, respectively, in the corresponding quarter a year earlier. For the cumulative nine months, Hiap Teck reported a net profit of RM89.41mil and revenue of RM1.09bil. Its core net profit dropped 42.9% year-on-year to RM47mil, primarily due to margin compression in its trading and downstream segments, driven by weaker selling prices and reduced sales volumes. These factors offset stronger contributions from its 27.3%-owned associate Eastern Steel Sdn Bhd (ESSB), which saw core earnings rise to RM71.1mil. The improvement came on the back of higher sales volumes that helped mitigate lower average selling prices. Looking ahead, Hong Leong Investment Bank (HLIB) Research expects the group's earnings to remain under pressure in the near term, citing macroeconomic challenges in China and the delayed rollout of local infrastructure projects as key headwinds. However, steady contributions from the scaffolding division and ESSB are expected to help cushion the impact as Hiap Teck gradually increases capacity utilisation at its hot rolled coil (HRC) plant. The research house also pointed out that ESSB's HRC plant, which began operations in December 2024, is currently running at about 50% capacity. Hence, Hiap Teck is looking to ramp up utilisation to near 100% by the end of 2025, which will further bring down its unit conversion cost. HLIB Research has revised its financial year 2025 (FY25) to FY27 core net profit forecasts lower by 3.3%, 0.9% and 3.8%, respectively, to reflect reduced sales volume assumptions. Despite the near-term earnings weakness, the research house maintained a 'buy' call on Hiap Teck with a lower target price of 34 sen, based on a revised valuation of 6.5 times FY26 core earnings per share of 5.2 sen.
New Straits Times
02-07-2025
- Business
- New Straits Times
Hiap Teck's tepid earnings may continue in Q4: HLIB
KUALA LUMPUR: Hiap Teck Venture Bhd's subdued earnings performance is expected to continue into the fourth quarter of 2025 (4Q25). This is mainly due to ongoing weak sentiment in steel prices, uncertainties surrounding US tariffs and the sluggish rollout of domestic infrastructure projects. However, Hong Leong Investment Bank Bhd (HLIB) said the impact will be partially cushioned by stable contributions from the scaffolding business and Eastern Steel Sdn Bhd, as management continues to ramp up capacity utilisation at its hot-rolled coil (HRC) plant. "We trim our core net profit forecasts for the financial years 2025 to 2027 (FY25-FY27) by 3.3 per cent, 0.9 per cent and 3.8 per cent respectively, mainly to reflect lower sales volume assumptions," the firm said in a note. Hiap Teck's core net profit declined 42.9 per cent to RM47.0 million for the nine months ended FY25 (9MFY25), as the improved contribution from its 27.3 per cent-owned ESSB was more than offset by margin compression in the trading and downstream segments, due to weaker selling prices and lower sales volumes. As for ESSB, its core earnings contribution rose 13.6 per cent to RM71.1 million in 9MFY25, supported by stronger sales volumes that more than offset the impact of lower selling prices. The improvement was driven by the continued ramp-up in capacity utilisation since early 2024. ESSB's HRC plant, which began operations in Dec 2024, is currently operating at around 50 per cent. The company aims to increase the utilisation to nearly 100 per cent by the end of 2025, which would help reduce its unit conversion cost further. Overall, HLIB maintained a "Buy" call on Hiap Teck with a lower target price of RM0.34. Despite near-term earnings headwinds, the firm said it continues to favour Hiap Teck for its healthy balance sheet and attractive valuations.
Yahoo
30-06-2025
- Business
- Yahoo
Returns On Capital At Hiap Teck Venture Berhad (KLSE:HIAPTEK) Paint A Concerning Picture
If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. In light of that, when we looked at Hiap Teck Venture Berhad (KLSE:HIAPTEK) and its ROCE trend, we weren't exactly thrilled. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. Analysts use this formula to calculate it for Hiap Teck Venture Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.00092 = RM1.4m ÷ (RM2.0b - RM492m) (Based on the trailing twelve months to April 2025). Therefore, Hiap Teck Venture Berhad has an ROCE of 0.09%. In absolute terms, that's a low return and it also under-performs the Metals and Mining industry average of 7.3%. See our latest analysis for Hiap Teck Venture Berhad Above you can see how the current ROCE for Hiap Teck Venture Berhad compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Hiap Teck Venture Berhad for free. On the surface, the trend of ROCE at Hiap Teck Venture Berhad doesn't inspire confidence. Around five years ago the returns on capital were 4.2%, but since then they've fallen to 0.09%. And considering revenue has dropped while employing more capital, we'd be cautious. This could mean that the business is losing its competitive advantage or market share, because while more money is being put into ventures, it's actually producing a lower return - "less bang for their buck" per se. In summary, we're somewhat concerned by Hiap Teck Venture Berhad's diminishing returns on increasing amounts of capital. Yet despite these concerning fundamentals, the stock has performed strongly with a 79% return over the last five years, so investors appear very optimistic. In any case, the current underlying trends don't bode well for long term performance so unless they reverse, we'd start looking elsewhere. If you're still interested in Hiap Teck Venture Berhad it's worth checking out our to see if it's trading at an attractive price in other respects. If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
The Star
14-05-2025
- Business
- The Star
Profit-taking drags FBM KLCI into the red at midday
KUALA LUMPUR: The FBM KLCI turned lower at midday, reversing recent gains as profit-taking activity emerged following yesterday's strong run-up. At lunch break, the benchmark FBM KLCI fell 3.55 points, or 0.22%, to 1,578.84, rebounding from an intramorning low of 1,573.44. There were 489 gainers, 401 losers and 470 counters traded unchanged on the Bursa Malaysia. Turnover stood at 2.43 billion shares valued at RM1.42bil. The top loser on Bursa Malaysia was United Plantations, which lost 48 sen to RM22.50. Carlsberg fell 28 sen to RM19.20, Nestle eased 24 sen to RM84.76 and PETRONAS Dagangan declined 20 sen to RM20.28. Among the gainers, Malaysian Pacific Industries rose 34 sen to RM21.32, SAM Engineering added 32 sen to RM4.42, DKSH gained 27 sen to RM5.26 and Hengyuan climbed 26 sen to RM1.90. TA Securities said stocks are likely to extend gains as the improvement in US-China trade relations has abated concerns of a global trade war and is expected to support risk-on sentiment in the near term. 'Immediate support has been revised higher to 1,526, representing the 50% Fibonacci retracement (FR) of the rally from the 1,369 low (June 2023) to the 1,684 peak (August 2024), with stronger support seen at the 38.2% FR (1,490) and 23.6% FR (1,444). 'Immediate resistance is also revised upwards to the 76.4% FR (1,610) with tougher upside hurdles at 1,644 and the 29/08/24 high of 1,684,' TA said. Meanwhile, Malacca Securities expects further upside in Malaysia's technology sector, following the rally on Wall Street and renewed optimism after the US-China tariff truce. The research house said sentiment was also lifted by news that the Trump administration has formally rescinded the Biden-era AI Diffusion Rule, which supported gains in local tech counters. On the flip side, Malacca Securities said the US-China trade deal is seen as negative for Malaysian glove players, as it makes Chinese gloves more competitively priced and may hurt demand for Malaysian gloves. 'Besides, we believe trading opportunities will extend within the Steel sector like Hiap Teck, Hiap Teck and Malaysia Steel Works, as Malaysia is set to impose anti-dumping duties on steel and tinplate from China and other Asian nations,' it said.
