Hup Seng Industries Bhd's (KL ) shares surged after the company reported record quarterly profits and announced a special dividend. The biscuit maker's stock rose 9.1% to RM1.20 at its peak before settling at RM1.16, valuing the company at RM928 million with 1.7 million shares traded by 9:15 am. BIMB Securities upgraded Hup Seng to a “buy” with a target price of RM1.36, following stronger-than-expected quarterly results. The firm cited Hup Seng’s enhanced production capabilities and solid market positioning as key growth drivers. Earnings projections for FY2024F, FY2025F, and FY2026F were raised by 26.9%, 28.4%, and 30.1%, respectively, driven by an anticipated rise in sales from increased production and market reach. Festive season demand is expected to further boost sales momentum, BIMB noted. However, they cautioned about potential margin pressures due to rising palm oil costs.
Hilton Worldwide has reduced its annual room revenue growth and net income forecasts, citing weaker demand in China and disruptions to its US business during the third quarter. Despite steady demand in Europe and business travel, these factors were not enough to offset the challenges faced by the global hotel chain.
Shares of Hilton fell 2% on Wednesday, with competitor Marriott International also declining by 3%. The company cited several contributing factors, including macroeconomic uncertainty affecting both American and Chinese consumers, ongoing labor disputes, and weather disruptions in the US, as well as the upcoming US election.
Hilton's system-wide comparable RevPAR (revenue per available room) rose by 1.4% in Q3, with room revenue dropping 9% in China but increasing by 1% in the United States. Hilton CEO Christopher Nassetta acknowledged flat or slightly declining demand, though the company suggested that increased room rates could help mitigate lower demand.
For 2024, Hilton now expects room revenue growth between 2% and 2.5%, down from its previous estimate of 2% to 3%. The company's net income for the third quarter fell 9% to US$344 million, and its full-year net income forecast was adjusted to a range of US$1.4 billion to US$1.42 billion, down from an earlier projection of US$1.53 billion to US$1.56 billion.
Despite the challenges, Hilton's net unit growth, reflecting room additions, rose 7.8% in the quarter. For the full year, the company expects room additions to be between 7% and 7.5%. Hilton's quarterly revenue totaled US$2.87 billion, just shy of estimates of US$2.9 billion.
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