BUILDING MATERIAL
[%tozy%] [%iNmH%] [%gXlR%] [%MoXu%]
Research by Kenanga
Neutral

“4QCY23 Report Card: Weak Selling Prices Weigh”

There was deterioration in earnings delivery (against our expectations) by the sector in the recently concluded 4QCY23 reporting season. Players continued to struggle with high-cost inventories and weak ASPs as the global steel sector languished. Nonetheless, prices of both ferrous and non-ferrous metals may have bottomed out as the weak economic outlook of the largest consuming country, i.e. China is partially mitigated by supply constraints. Our sector top picks are low-carbon ferrosilicon (FeSi) and silicomanganese (SiMn) producer OMH (OP; TP: RM1.80) and water pipe maker ENGTEX (OP; TP: RM1.41) on the back of the revival of domestic water projects. 

Analyst(s):
Teh Kian Yeong 
[%HtoT%]
Nigel Ng 
[%swMK%]

BUILDING MATERIAL
$KLSE-ENGTEX $KLSE-OMH $KLSE-PMETAL $KLSE-ULICORP
Research by Kenanga
Neutral

“4QCY23 Report Card: Weak Selling Prices Weigh”

There was deterioration in earnings delivery (against our expectations) by the sector in the recently concluded 4QCY23 reporting season. Players continued to struggle with high-cost inventories and weak ASPs as the global steel sector languished. Nonetheless, prices of both ferrous and non-ferrous metals may have bottomed out as the weak economic outlook of the largest consuming country, i.e. China is partially mitigated by supply constraints. Our sector top picks are low-carbon ferrosilicon (FeSi) and silicomanganese (SiMn) producer OMH (OP; TP: RM1.80) and water pipe maker ENGTEX (OP; TP: RM1.41) on the back of the revival of domestic water projects. 

Analyst(s):
Teh Kian Yeong 
tehky@kenanga.com.my
Nigel Ng 
nigel@kenanga.com.my

$ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD)

$PMETAL / 8869 (PRESS METAL ALUMINIUM HOLDINGS BERHAD)