PETALING JAYA: Hiap Teck Venture Bhd
has seen a better performance for financial year 2026 (FY26) on stronger trading and manufacturing sectors.
Hong Leong Investment Bank (HLIB) Research said the steel manufacturer’s FY26 core profit of RM125.8mil came in above expectations, accounting for 106.1% of its full-year estimate.
The research firm said its computation of FY26 profit excluded the RM1.8mil unrealised foreign-exchange (forex) loss and forex derivatives, and a RM5.1mil gain on disposal.
It also excluded the RM14.2mil that was uncovered in inventories and the estimated RM5.1mil loss from forex translation from its joint venture, Eastern Steel Sdn Bhd (ESSB). Its revenue for the year decreased 0.7% to RM1.42bil, as higher sales volumes were largely offset by lower average selling prices.
For the fourth quarter ended July 31, 2026, Hiap Teck posted a 60.6% higher profit of RM39.4mil, which took the total profit for the year to RM125.8mil.
The increase was due to higher selling prices at both trading and manufacturing segments, as well as improved operating performance at ESSB.
HLIB Research said ESSB’s performance was steady, supported by its operational business. Its revenue for the quarter however, saw a drop of 38.3% – on the back of lower sales and average steel product prices.
Hiap Teck proposed a first and final dividend of 0.7 sen per share, an increase from the 0.5 sen per share from FY25.
The research firm said it will maintain forecasts for the time being, as it waits for further updates.
“While domestic demand for steel products will continue to be supported by infrastructure development, manufacturing activities, industrial investments and the expansion of the data centre sector, management remains cautious on its near-term prospects, given the challenging market condition amid persistent supply-demand imbalances and exports from major producing countries,” HLIB Research noted.
With that, it said it would maintain its “buy” call on the stock with an unchanged target price of 35 sen, based on unchanged five times mid FY26 to FY27 core earnings per share of 7.1 sen.
Separately, in a filing with Bursa Malaysia, Hiap Teck said it expects the global steel market to remain challenging due to subdued demand, persistent excess capacity and continued pricing pressure.
On a positive note, the group said domestically, the demand for steel will continue to receive support from infrastructure development, manufacturing activities, industrial investments and the expansion of the data centre sector.
“At the same time, the group remains mindful of competitive pressures arising from global steel overcapacity and exports from major producing countries.
“The implementation of the Steel Industry Roadmap 2035, including measures relating to capacity management, trade remedies and fair competition, is expected to continue shaping the domestic steel industry,” it noted.
