KUALA LUMPUR, Dec 4 (Bernama) -- Bursa Malaysia rallied to close broadly higher on Wednesday amid strong buying interests mainly in utility and technology stocks, with the benchmark index gaining 0.44 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 7.13 points to 1,614.09 from Tuesday’s close of 1,606.96. The index opened marginally higher at 1,606.97 and moved between 1,606.53 and 1,616.03 throughout the day. Advancers thumped decliners 727 to 381 on the broader market, with 522 counters unchanged, 781 untraded and 10 suspended. Turnover advanced to 3.60 billion units valued at RM3.30 billion versus 3.32 billion units valued at RM3.30 billion on Tuesday.
Shares of NationGate Holdings Bhd fell over 11% to RM2.09 in early trading Thursday, following weaker-than-expected 3Q2024 results. The company, valued at approximately RM4.8 billion, saw 30 million shares traded, prompting the suspension of intraday short selling (IDSS) for the day.
Key Takeaways from 3Q2024 Results:
- Revenue: Doubled quarter-on-quarter (q-o-q) due to higher server deliveries, but margins contracted by 1 percentage point to 6%.
- Core Net Profit: Down 18% q-o-q to RM22 million, despite a 19% year-on-year (y-o-y) increase.
- Distortions: Profit was impacted by one-offs, including:
- RM18 million provision for product liabilities
- RM7 million product development costs
- RM20 million cost of goods revaluation
For 9M2024, core net profit rose 53% y-o-y to RM70 million, but results accounted for just 60% of Philip Capital’s earnings forecast.
Market Reaction and Analyst Outlook:
- Philip Capital maintained its "buy" call with a target price of RM2.65, attributing the weak results to a temporary setback.
- Forecasts for 2024 EPS were lowered by 9% due to weaker margins. However, estimates for 2025-26 earnings were raised by 5%-8%, driven by anticipated growth in server deliveries.
Growth Story Remains Intact:
Analysts remain optimistic about NationGate’s:
- AI exposure through its server business.
- Beneficiary position in the US-China geopolitical tensions, boosting structural growth.
While short-term margin challenges impacted 3Q performance, the company’s long-term outlook remains appealing to investors.
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