Malaysia - Infra Projects, Building Materials etc

[winston]

Construction – Malaysia
1Q24 Earnings In line; Stronger Momentum Ahead

1Q24 results are within expectations with underperformance coming from GAQRS and MRCB.

Moreover, most of the companies continued to register better earnings qoq and yoy.

We remain optimistic on the sector, which will be anchored by the imminent rollout of mega projects including MRT3 and Penang LRT coupled with stronger private job flows.

Maintain OVERWEIGHT. Our top picks for the sector remain Gamuda, Suncon, and Kerjaya Prospek.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

Utilities – Malaysia
Energy Boost In Peninsular Malaysia

The onset of aggressive DC plant-ups alongside Malaysia’s net-zero ambition suggest ample opportunities for power players to expand their businesses.

We expect 5GW of new plant-ups by 2030 and another 10-15GW by 2040.

Key beneficiaries are:
a) EPCC contractors with experience in building power plants,
b) TNB genco and IPP Malakoff, and
c) RE players.

Maintain MARKET WEIGHT. Top picks: Malakoff and Pekat.

Blue-sky scenario for TNB implies a fair value of RM14.50.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

Construction sector grew over 20% in 2Q, says DOSM

The construction sector recorded a 20.2% surge in work done value to RM38.9 billion in the second quarter of 2024 (2Q2024), spearheaded by the buoyant performance of the civil engineering and residential buildings sub-sectors.

The value of work done owned by the public sector posted a strong increase of 27.8% to RM15.3 billion (1Q2024: 20.6%), supported by the civil engineering sub-sector with a 23.8% growth.

By state, nearly 59% of the work done value was concentrated in Selangor, Johor, Sarawak, and the Federal Territories (Kuala Lumpur, Putrajaya and Labuan).

Source: Bernama

https://theedgemalaysia.com/node/722451

[behappyalways]

Will the forgotten Royal Port of Malacca see the light of day again?

被遗忘的马六甲皇京港，将重见天日？

https://m.youtube.com/watch?v=F4G_-TyLxwo

[winston]

RHB upgrades basic construction materials to 'overweight', Cahya Mata Sarawak the top pick

By Myia S Nair

RHB Research has upgraded the basic construction materials sector to 'overweight' from 'neutral', amid a positive outlook on aluminium and cement companies under its coverage.

The average selling price of aluminium is expected to be supported by slow Indonesian expansion, demand from electric vehicles and solar farms, and the increase in US tariffs on Chinese aluminium imports to 25%, from 7%.

For cement, the revival of construction projects is supporting demand. They include the Pan Borneo Highway, Sarawak-Sabah Link Road, Kuala Lumpur-Singapore High-Speed Rail, Johor-Singapore Rapid Transit System and Mass Rapid Transit 3.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/726000

[winston]

Developers, contractors reel under price and supply pressure

by Predeep Nambiar

The construction industry is under a lot of pressure as a strong US dollar means imported key materials like steel and cement cost more, compounded by a scarcity of building materials.

The cost of building materials was also affected by the increase in sales and services tax to 8% from 6%.

Disruptions to shipping routes and shortages in raw materials are still having a big impact.

Prices of quarry products and ready-mix concrete have gone up, while steel, copper, and aluminium, cost more because of high global demand.

Source: FMT

https://www.freemalaysiatoday.com/categ ... e=smartech

[winston]

Construction stocks ‘not yet ripe for profit-taking’, steady project flow to continue through 1H2025 — RHB IB

By Sankita Jayanandan

Major projects, such as the Penang Light Rail Transit (LRT) which is set to break ground in December and the Pan Borneo Highway Sabah Phase 1B, may keep investors on their toes.

On stocks strategy, the house prefers Gamuda Bhd (KL:GAMUDA) with a target price (TP) of RM9.79, Sunway Construction Group Bhd (KL:SUNCON) with a TP of RM5.50, and Kerjaya Prospek Group Bhd (KL:KERJAYA) with a TP of RM2.57, while it reiterated its “overweight” call on the sector.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/730386

[winston]

Construction stocks slip as govt shies away from new megaprojects

By Sankita Jayanandan

Analysts covering construction stocks are neutral to positive on Budget 2025, taking into account the slight decline in net development expenditure, absence of new megaprojects, and lack of details for key projects such as the third phase of the Klang Valley Mass Rapid Transit (MRT3).

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/730861

[winston]

Uptrend in performance for construction players

By SYAZWANI HASNIZAM

The construction sector continues to show an uptrend in performance as records show a 22.9% increase in growth, reaching RM41.1bil, in 3Q24.

This was a 20.2% improvement from the previous quarter of RM38.9bil.

The sector is expected to remain healthy in 4Q24, driven by sustained domestic housing demand amid stable local interest rates.

Gradual rollouts on minor road and infra upgrade jobs may also further sustain growth of the sector.

Construction companies focusing on data centre builds could be one of the beneficiaries within the sector.

Residential contractors may also benefit as well from domestic affordability as bank loans approval rates are also improving at the same time.

As the construction of the Light Rail Transit 3 (LRT3) wraps up, we expect the ongoing infrastructure projects such as the Pan Borneo Highway, East Coast Rail Link and the Rapid Transit System Link, on top of the slew of data centre projects to contribute to the strong construction numbers in 4Q24.

We can also expect the job awards this quarter to set the tone for next year, with projects such as the Penang LRT, Pan Borneo Phase 1B, Sarawak-Sabah Link Road Phase 2 and data centres.

“Despite the slightly lower DE, the amount remains substantial for the construction sector with the mentions of several crucial projects such as the widening of the North-South Expressway, expansion of Port Klang and expansion of the Penang International Airport, among others, which will aid in order book replenishments” .

It will contribute an even greater share to Malaysia’s economic growth in 3Q24 – contributing 13.5% of gross domestic product (GDP) growth based on advance estimate, higher than 10.6% of GDP growth in 2Q24.

The residential buildings and non-residential buildings sub-sectors both gained momentum by expanding 27.8% and 27.7%, respectively.

Source: The Star

https://www.thestar.com.my/business/bus ... on-players

[winston]

Construction sector on track for best year since 2016 — RHB

By Yu Jien Lim

The sector recorded RM183.7 billion worth of construction projects awarded in the first 11 months of 2024 (11M2024), a 20% year-on-year increase.

The sector’s growth is expected to be further fuelled by upcoming megaprojects, including the Mass Rapid Transit 3 roll-out planned for 2027, the Penang Light Rail Transit, the RM6.2 billion West Ipoh Span Expressway, the RM1.6 billion Penang Airport expansion, and the Sarawak deep-sea port project, valued at RM25 billion to RM30 billion.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/736499