KUALA LUMPUR, Oct 3 (Bernama) -- HongLeong Investment Bank (HLIB) expects Southern Cable Group Bhd (SCG) to post stronger earnings in the second half of 2023 (2H 2023), backed by robust sales, encouraging purchase orders secured and a strong order book.
The earnings would also be driven by margin expansion as a result of a better product mix.
“Additionally, the company stands to bolster its margins through higher demand for its medium voltage and high voltage cables, alongside contributions from the United States sales, which commands favourable margins.
"Combined with strong orders in hand, these factors reinforce our belief that SCG is poised to deliver stronger earnings in 2H 2023,” HLIB said in a note today.
It said SCG secured purchase orders totalling RM296.2 million in the second quarter of 2023 (2Q 2023), representing a 137 per cent quarter-on-quarter growth due to the influx of foreign direct investments in Penang’s semiconductor sector.
"We anticipate a pickup in tender activity once utility companies call for new tenders in 4Q 2023 - 1Q 2024,” said HLIB.
At 10.40 am, SCG's share price rose by half-a-sen to 35 sen with 812,800 shares traded.
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