Hiap Teck shares rise 2.35% following earnings surge

KUALA LUMPUR: Shares in Hiap Teck Venture Bhd were lifted 2.35% in active trading on Monday following a positive quarterly result.

As at 10.30am, the trading stock of the steel trader was up one sen to 2.35% to 43.5 sen a share after 30.99 million shares changed hands, making it the second most-active security on Bursa Malaysia.

Last Friday, Hiap Teck announced its net profit tripled to RM46.82mil in the third quarter ended April 30, 202, from RM15.03mil a year earlier, mainly owing to better-than-expected contribution from its Eastern Steel Sdn Bhd (ESSB) joint venture.

According to Hong Leong Investment Bank (HLIB) Research, the group registered a 3QFY24 core net profit of RM46.2mil, which brought 9MFY24's total to RM78.6mil.

Year-to-date, the nine-month performance turned around with a core net profit of RM78.6mil as compared to core net loss of RM4mil in the same period in 2023..

HLIB said this was due mainly to increased sales volumes at both trading and downstream segments, improved margins at downstream operations amid stabilised steel prices, and improved JV contribution (arising from margin expansion and higher sales volumes).

The results surpassed the research firm's expectation at 91.7% of its full-year estimate.

"We remain optimistic on HTVB’s earnings prospects, supported by the pending rollout of mega infrastructure projects and robust private sector job flows in Malaysia, rising capacity utilisation at ESSB’s new blast furnace, which will boost its contribution to HTVB’s bottomline, and weak demand sentiment for steel products in China may have bottomed," it said.

HLIB maintained its "buy" call on Hiap Teck with an unchanged target price of 52 sen.