Ann Joo Resources Berhad

$ANNJOO / 6556 (ANN JOO RESOURCES BERHAD)
Research Report by TA

@terence775 callback to my article dated may 2022, we are starting to see commodity traders suffer huge losses as the spot prices of commodities drop, while they are left holding high priced inventory.

$ANNJOO / 6556 (ANN JOO RESOURCES BERHAD) especially so as a prime example.

$ANNJOO / 6556 (ANN JOO RESOURCES BERHAD)
Research by TA
Buy - TP RM1.35

"Steel on Shaky Ground"

Following the earnings revision, we reduced our target price to RM1.35 (from RM1.64 previously), based on 12x CY25 earnings. We continue to like ANNJOO for the following reasons: (i) ANNJOO stands to be the biggest beneficiary as the key supplier of steel materials for the Penang LRT project, supported by its cost competitiveness from its steel-making plant in Prai, Penang, (ii) increasing construction activities from the revitalisation of the property sector are driving higher demand for steel products, and (iii) the upgrading of the power grid, in line with TNB’s NETR goals, further boosts demand for steel products. Maintain Buy call on the stock.

Analyst:
Raymond Ng Ing Yeow
raymondng@ta.com.my

$FACBIND / 2984 (FACB INDUSTRIES INCORPORATED BERHAD)
$GENM / 4715 (GENTING MALAYSIA BERHAD)
$HOHUP / 5169 (HO HUP CONSTRUCTION COMPANY BHD)
$ANNJOO / 6556 (ANN JOO RESOURCES BERHAD)

$ANNJOO / 6556 (ANN JOO RESOURCES BERHAD)

Change of Company Secretary - WONG YOUN KIM

Change of Company Secretary - WONG MEE KIAT

Change of Company Secretary - LIM LI HEONG

Infra Projects A Boon for Steel Sector

The steel industry is expected to experience positive growth in 2024, with demand to be spurred by the commencement of infrastructure projects, says the Malaysian Iron and Steel Industry Federation (Misif).
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Misif president Datuk Lim Hong Thye said if the government is able to kickstart the construction of infrastructure projects such as the mass rapid transit line three or MRT3 by this year, it will boost steel demand from the expected 8.3 million tonnes to nine million tonnes.
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“If all these infrastructure projects were to begin, the demand (for steel) would surge past nine million tonnes and then we would move closer to the optimum level. That would make a big difference to the industry,” he told the media after the launch of Misif’s report on the status and outlook of the iron and steel industry.
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However, he pointed out that the country’s capacity utilisation of crude steel products at 39.1% and high amount of steel import of 7.2 million tonnes was rather concerning, affecting steel players’ ability to survive in the industry.
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“The government needs to provide directions for the steel industry, so that our sector can stay intact and survive. The growth currently is not the recovery growth, but for us to reach a growth level to survive,” he added.
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That being said, Investment, Trade and Industry Deputy Minister Liew Chin Tong said the ministry is committed to working with the steel industry to overcome the scrap metal challenge, finding ways to deal with shortages and create a better ecosystem and a virtuous cycle rather than the current vicious cycle.
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He noted that the iron and steel industry is heavily influenced by global factors.
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Hence, if any policy changes or market trends occur in China or the United States, it would leave a “butterfly effect” on profitability or the survival of the Malaysian steel industry.
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Also highlighting Malaysia’s capacity utilisation of crude steel products – such as billets, blooms and slabs – Liew stated that it was significantly lower than the global level of 75.7% and the Asean-6 level of 60.1%.
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“However, flat products may have a brighter prospect given that there is a once-in-a-generation relocation of the supply chain. With more manufacturing activities in South-East Asia, flat products commonly used in the automotive, heavy machinery and appliances industries should have a better prospect,” he said.
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Liew went on to say that Malaysia will have to start implementing carbon pricing as a way to facilitate carbon trading, as well as looking into carbon taxing as the European Union (EU) prepares to commence its Carbon Border Adjustment Mechanism (CBAM) in 2026.
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He stated that the collections should be channelled into green investments, including investment into green steel, as he acknowledged the challenges in its production (of green steel).
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“Carbon pricing, trading and taxing are crucial aspects of the decarbonisation agenda. Under the CBAM, the export of steel and the other five listed items from Malaysia will be taxed by the EU, unless Malaysia collects the tax,” he added.
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Liew also stated that the ministry is working with the Construction Industry Development Board and the Works Ministry to explore ways to enforce a more stringent localisation programme for government construction projects.

$ANNJOO / 6556 (ANN JOO RESOURCES BERHAD)

https://cutt.ly/DedHN6OM

More Good News on Steel Industry

1. Data centre boom, chip industry expansion expected to boost local steel demand
- Steel consumption is expected to see positive growth this year, reaching 8.3 million tonnes, primarily driven by the construction of data centres. If infrastructure projects like the Penang light rail transit commence, steel demand could approach nine million tonnes.

2. Miti working with construction industry, Works Ministry to ensure more local steel used in govt projects
- The government is exploring ways to enforce greater use of local steel products in government projects. Additionally, a two-year moratorium on approvals for expansion and diversification in the iron and steel industry was implemented in August 2023. This moratorium applies to all inquiries, assessments of current applications, new applications, licence transfers, expansions, regularisations, and diversifications for manufacturing licences in the iron and steel industry.

Companies poised to be benefited: $HIAPTEK / 5072 (HIAP TECK VENTURE BERHAD), $ANNJOO / 6556 (ANN JOO RESOURCES BERHAD), $KKB / 9466 (KKB ENGINEERING BERHAD), $CSCSTEL / 5094 (CSC STEEL HOLDINGS BERHAD), $SENDAI / 5205 (EVERSENDAI CORPORATION BERHAD), CHINWEL, TONGHER, SSTEEL, ASTINO, MASTEEL, TSA, LEFORM, LIONIND, BWYS, LEONFB, TASHIN, YLI, etc.

OTHERSVESTING OF SHARES UNDER SHARE GRANT PLAN PURSUANT TO THE LONG TERM INCENTIVE PLAN ("LTIP")

Immediate Announcement of Changes in Treasury Shares

Immediate Announcement of Changes in Treasury Shares

OTHERSVESTING OF SHARES UNDER SHARE GRANT PLAN PURSUANT TO THE LONG TERM INCENTIVE PLAN ("LTIP")

General Meetings: Outcome of Meeting

OTHERSANN JOO RESOURCES BERHAD ("AJR")

ANN JOO METAL SDN. BHD., A WHOLLY-OWNED SUBSIDIARY OF ANN JOO RESOURCES BERHAD, IN CONSORTIUM WITH PT LUMINTU INSAN MANDIRI, AWARDED THE DESIGN AND BUILD PROJECT FOR ELECTRIFICATION OF THE EAST COAST RAIL LINK (ECRL) FEEDER STATIONS, INCLUDING 132KV SWITCHING STATION, OVERHEAD TRANSMISSION LINE, UNDERGROUND CABLE INSTALLATION AND ASSOCIATED WORKS BY TENAGA SWITCHGEAR SDN. BHD., A SUBSIDIARY OF TENAGA NASIONAL BERHAD, FOR A TOTAL CONTRACT VALUE OF RM297,900,00

PETALING JAYA: Ann Joo Resources Bhd’s recent contract win for the design and construction of electrification works for the East Coast Rail Link (ECRL) feeder stations is seen as a positive step, as it marks Ann Joo’s entry into the utility-infrastructure sector.

$ANNJOO / 6556 (ANN JOO RESOURCES BERHAD)
Research by TA
Buy – TP of MYR 1.64

“Venturing Into New Space”

ANNJOO and its consortium partner, PT Lumintu Insan Mandiri (PT LUMINTU), have secured a contract worth RM297.9mn on 14 June 2024 from Tenaga Switchgear Sdn Bhd, a subsidiary of Tenaga Berhad (TENAGA). This contract involves the design and build for the electrification of the East Coast Rail Link (ECRL) feeder stations, including a 132kV switching station, overhead transmission lines, underground cable installation, and associated works

Analyst(s):
Raymond Ng Ing Yeow
raymondng@ta.com.my

KUALA LUMPUR: Ann Joo Resources Bhd and partner PT Lumintu Insan Mandiri, secured a RM297.9 million contract for the design and construction of electrification works for the East Coast Rail Link (ECRL) feeder stations.

© New Straits Times Press (M) Bhd

KUALA LUMPUR: Ann Joo Resources Bhd's wholly-owned subsidiary Ann Joo Metal Sdn Bhd in consortium with Indonesia's PT Lumintu Insan Mandiri has secured the design and build project for electrification of East Coast Rail Link (ECRL) feeder stations.

OTHERSANN JOO RESOURCES BERHAD ("AJR")

ANN JOO METAL SDN. BHD., A WHOLLY-OWNED SUBSIDIARY OF ANN JOO RESOURCES BERHAD, IN CONSORTIUM WITH PT LUMINTU INSAN MANDIRI, AWARDED THE DESIGN AND BUILD PROJECT FOR ELECTRIFICATION OF THE EAST COAST RAIL LINK (ECRL) FEEDER STATIONS, INCLUDING 132KV SWITCHING STATION, OVERHEAD TRANSMISSION LINE, UNDERGROUND CABLE INSTALLATION AND ASSOCIATED WORKS BY TENAGA SWITCHGEAR SDN. BHD., A SUBSIDIARY OF TENAGA NASIONAL BERHAD, FOR A TOTAL CONTRACT VALUE OF RM297,900,000

$ANNJOO / 6556 (ANN JOO RESOURCES BERHAD)
Research by TA
Buy – TP RM1.51

“Banking on Domestic Demand Recovery"

We believe ANNJOO will benefit from the spillover effect from the upcoming mega infrastructure projects, particularly the Penang LRT. Given its proven track record in large-scale infrastructure projects, we assign ANNJOO a higher target price-to-earnings ratio (PER) of 11x, anticipating a brighter earnings outlook. As a result, we arrive at a new target price of RM1.51 (up from RM1.11 previously). Upgrade ANNJOO to Buy.

Analyst:
Raymond Ng Ing Yeow
raymondng@ta.com.my

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Intention to Deal During Closed Period

General Meetings: Notice of Meeting

MULTIPLE PROPOSALSANN JOO RESOURCES BERHAD

-MULTIPLE PROPOSALS

$ANNJOO / 6556 (ANN JOO RESOURCES BERHAD)
Research by TA
Sell – TP of RM1.11

“Steel Demand Remains Subdued”

Following the stabilisation of raw material costs, we believe that the group’s margin should gradually improve over time. However, we remain wary about the prospect of the global steel market, as the ASP and demand may require a longer time to ramp up and restore the balance of demand-supply globally.

Apart from that, the 2-year moratorium implemented by the Ministry of Investment, Trade and Industry (MITI), which allowed reassessments to address the numerous challenges the local steel industry faces, is believed to have a positive impact on the steel sector. This strategy is expected to improve the competitive landscape and benefit the existing steel players.

Analyst(s):
Raymond Ng Ing Yeow
raymondng@ta.com.my

Quarterly rpt on consolidated results for the financial period ended 31/12/2023

$ANNJOO / 6556 (ANN JOO RESOURCES BERHAD)
$ENGTEX / 5056 (ENGTEX GROUP BERHAD)

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Intention to Deal During Closed Period