Hiap Teck Venture Bhd (HTVB) delivered a 24.4% increase in financial year 2026 core earnings to RM125.8 million, slightly exceeding Hong Leong Investment Bank (HLIB) Research’s expectations on stronger-than-anticipated performance from its manufacturing segment.
In a research note, HLIB said the steel group’s full-year core profit accounted for 106.1% of its earnings forecast, driven primarily by improved contributions from the trading and manufacturing divisions.
Fourth-quarter core earnings rose 60.6% quarter-on-quarter to RM39.4 million, despite revenue declining 38.3%, as higher selling prices and improved operating performance at its 27.3%-owned joint venture, Eastern Steel Sdn Bhd (ESSB), offset lower sales volumes.
On a year-on-year basis, however, fourth-quarter core profit declined 27.3%, mainly due to a weaker contribution from ESSB.
Hiap Teck has proposed a dividend of 0.7 sen per share, with the entitlement and payment dates to be announced later.
HLIB said domestic steel demand should continue to benefit from infrastructure development, manufacturing activities, industrial investment and the expansion of Malaysia’s data centre sector.
Nevertheless, the research house noted that management remained cautious about the near-term outlook amid persistent supply-demand imbalances and exports from major steel-producing countries.
HLIB maintained its earnings forecasts pending further updates from management.
The research house also reiterated its BUY rating and unchanged target price of RM0.35, based on five times average core earnings per share of 7.1 sen for FY2026 and FY2027.
At a share price of RM0.255, Hiap Teck was trading at 3.5 times forecast FY2027 earnings and 0.26 times book value, according to HLIB.
