KUALA LUMPUR (Aug 26): CIMB Securities said Malaysian companies' second‑quarter results under its coverage showed a modest improvement from the previous quarter, supported by stronger earnings in the plantation and oil and gas sectors.

However, the performance came in below last year’s level.

In terms of outcomes versus the research house's forecasts, 63% of companies reported in line with expectations, 23% missed and 14% beat. This translated into a beat-to-miss ratio of 0.62 times in the second quarter, up from 0.52 times in the first quarter but below the 0.88 times recorded for the second quarter last year.

CIMB Securities said in a note that of the 26 KLCI constituents under its coverage, 12 companies or 46% had reported so far, with the majority in line, six companies beating expectations and two companies posting weaker-than-expected earnings.

Plantation companies recorded stronger earnings compared to a year earlier, led by SD Guthrie Bhd (KL:SDG) and Genting Plantations Bhd (KL:GENP) which benefitted from industrial land-sale gains and higher fresh fruit bunch output respectively.

In the oil and gas sectors, Dialog Group Bhd (KL:DIALOG) delivered a 13.6% year-on-year (y-o-y) profit increase to RM167.47 million, lifted by stronger upstream and downstream contributions.

Additionally, PETRONAS Chemicals Group Bhd (KL:PCHEM) reported a 23% y-o-y revenue surge to RM414 million, staging a turnaround from a net loss of RM1.08 billion a year earlier. However, despite the profit recovery, PETRONAS Chemicals is still classified as an underperformer relative to forecasts, as plant turnarounds reduced sales volumes and offset higher average product prices.

Dayang Enterprise Holdings Bhd (KL:DAYANG) also missed expectations due to deferred maintenance work as upstream operators prioritised production.

Looking ahead, the research house remains bullish on plantation, utility, property trust, and automotive counters, citing improved risk-reward profiles following the recent corporate earnings season.

CIMB Securities maintained its year-end FBM KLCI target at 1,745 points, while upgrading its recommendations from ‘hold’ to ‘buy’ for Genting Plantations, YTL Power International Bhd (KL:YTLPOWR), IGB REIT (KL:IGBREIT), Sunway REIT (KL:SUNREIT), and Bermaz Auto Bhd (KL:BAUTO).

The research house downgraded its recommendations from ‘buy’ to ‘hold’ for AMMB Holdings Bhd (KL:AMBANK), Affin Bank Bhd (KL:AFFIN), and MyNews Holdings Bhd (KL:MYNEWS).