PETALING JAYA: Hiap Teck Ventures Bhd is on track to post improved financial results in its third quarter ending April 2023 (3Q23), backed by higher steel prices and demand and contribution from associate company, Eastern Steel Sdn Bhd (ESSB). Hong Leong Investment Bank (HLIB) Research said the steel maker’s management has guided for sequential earnings recovery, supported by continued increase in steel prices (amid optimism on China’s economic reopening) and seasonal recovery in domestic steel demand. “While the recovery in steel prices (and margins) will likely remain uneven and patchy, its management highlighted that earnings growth potential remains, underpinned by ESSB’s major capacity expansion,” HLIB Research said in its latest report following a recent meeting with Hiap Teck’s management. The ESSB facility however faces cost pressures as the cost of processing coking coal into coke remains high, relative to purchasing coking coke. At the current price of 34.5 sen, Hiap Teck shares are trading at FY23-FY25 price-earnings multiple of 11.7 times, 6.4 times and 5.9 times respectively.

Source: The Star April 07, 2023 04:07 UTC