Capital markets executive summary | Tue 30 May 2023

Capital markets executive summary | Tue 30 May 2023

Cloudpoint ended up 35.5% on ACE Market debut

The company’s share price jumped from its IPO price of 38 sen to 51.5 sen. It opened at a high of 75 sen with a volume of 17m shares. At the end of the day, 344.38m shares changed hands. The strong start was expected after the IPO was oversubscribed 112.94 times. The company provides information technology solutions encompassing design, procurement, implementation, support and after-sales maintenance. Its serves large enterprises such as financial institutions, telecommunications companies and technology service providers in Malaysia. Net profit for 1Q ended 31 Mar 2023 trebled to RM3m from RM933k a year ago. Revenue jumped 189% from RM10.25m to RM19.40m due to recurring and project-based incomes. Looking ahead, businesses are investing in new technologies to improve competitiveness, in particular, cybersecurity, cloud computing and software modernisation. Cloudpoint raised RM40.4m with RM13.3m allocated for business expansion, RM15.8m for working capital, RM7.8m for office relocation and RM3.5m for listing expenses. M&A Securities Sdn Bhd was the principal adviser, sponsor, underwriter and placement agent.

Petronas Chemicals 1Q net profit down 74%

The figure plunged from RM2.08b last year to RM532m in 1Q ended 31 Mar 2023 due to lower average product prices and higher utility and fuel costs. Earnings per share fell from 26 sen to 7 sen. Revenue however was higher by 13.91% from RM6.63b to RM7.56b as the weaker ringgit bumped up the sales value of olefins and derivatives. The segment’s revenue climbed 23.7% from RM2.74b to RM3.39b. Despite that, net profit plummeted 76.81% from RM733m to RM170m attributed to lower product spreads, higher energy and utilities costs, and pre-operation costs of a joint operating company. Meanwhile, contributions from a recently acquired subsidiary helped the specialties segment deliver a threefold increase in revenue from RM578m to RM1.75b. Nonetheless, compressed margins forced the segment to report a RM29m loss compared with RM163m net profit the prior year. Fertilisers and methanol suffered a 27.15% fall in revenues from RM3.3b to RM2.41b as product prices weakened. Net profit decreased 54% from RM1.17b to RM533m because of compressed margins. With the global economic slowdown and inflation and foreign exchange volatility, prices of olefins and derivatives are expected to soften while fertiliser and methanol prices will stabilise. The company observes modest demand recovery for specialties. The counter closed at RM6.87.

Apr 2023 producer price index down 3%

This was a larger decline compared with -2.9% in Mar. The negative trend for the agriculture, forestry and fishing sector continued for 10 straight months at -26.0% in comparison with -28.7% in Mar. The mining sector fell by 4.7% from -11.5% in Mar, because of a decline in the extraction of crude petroleum index by 12.5%. Month-on-month, the producer price index (PPI) for local production marginal rose by 0.2% in Apr, compared to 0.3% in Mar. The agriculture, forestry, and fishing sector grew by 0.8%, due to a 1.1% increase in the growing of perennial crops index. The mining sector crept up 0.5% as the extraction of crude petroleum index rose 1.5%. The manufacturing sector was up 0.1%, with the manufacture of food products +0.9% and manufacture of chemicals and chemical products +0.7%.

AirAsia X posts 1Q net profit of RM327m

Its revenue of RM548.8m is close to 50% of pre-Covid 2019 performance. The company activated 2 more aircraft in 1Q ended 31 Mar 2023. Another 6 aircraft will commence operations soon. Shareholders’ equity turned around from negative RM285.2m in 4Q2022 to RM40.8m, allowing the company to begin addressing its PN17 classification. Cost per available seat kilometres fell by over 50% to 6.50 sen compared to the same period in 2019 due a revamped cost structure and rationalised capacity in the market. Revenue per available seat kilometres was 18.93 sen as the average base fare rationalised to RM785 because of more normalised capacity in the market. The company’s earnings have improved in recent quarters owing to the surge in passenger volume, the ramp up of aircraft activation and a stronger fare environment. Total number of passengers carried increased to 504,476 passengers, due to the new year holidays and spring season travel demand. Capacity grew to 630,069 seats, while available seat kilometres jumped to 2,899m. Passenger load factor was 80% with Delhi and Tokyo close to 90%. The counter closed at RM2.06.

MyEG to launch blockchain-based cross-border trade services in Sep

On 30 Mar, the company formed a joint venture with East Logistic-Link Co Ltd to provide cross-border trade facilitation services. MyEG’s layer-1 public blockchain infrastructure – Zetrix – completed the international deployment of the supernode to China’s national blockchain Xinghuo 2 weeks ago. The company is currently running all of the native Chinese applications on the international supernode to ensure stability. The Malaysian and Chinese customs’ systems are fully integrated into Zetrix, and the company is working through some of those integrations. MyEG has yet to decide on the full production version of the service because of Personal Data Protection Act issues.