KUALA LUMPUR: There could be sequential earnings improvement in store for Hiap Teck Venture Bhd as steel prices continue to rise amid optimism over China's economic reopening, says Hong Leong Investment Bank (HLIB) Research. It reported that in 2QFY23, Eastern Steel Sdn Bhd's (ESSB) core contribution to Hiap Teck increased to RM16.8mil after adjusting for RM16mil forex translation gain. Higher contribution from ESSB, improved steel prices, and lower key input prices resulted in HTVB’s core net loss narrowing to RM400,000, from RM23.5mil in1QFY23. Over the longer term, the recovery in steel prices will likely remain uneven and patchy due to global inflationary pressures, rising interest rates, volatile exchange rates, geopolitical issues and the banking turmoil. HLIB noted that ESSB continues to run all four of its coking coke plants since 2QFY23 although the cost of processing coking coal into coke remains high relative to purchasing coking coke.

Source: The Star April 06, 2023 14:35 UTC