Posted on 08 Apr 2026
Steel manufacturer Hiap Teck Venture Bhd (KL:HIAPTEK) is expected to see a moderate performance in the third quarter ending April 30, 2026 (3QFY2026) due to seasonal festive holidays and softer global steel prices, said Hong Leong Investment Bank (HLIB) Research.
“We expect the 3QFY2026 performance to moderate quarter-on-quarter, as the trading and downstream segments will likely be affected by fewer working days due to festive holidays and weak steel prices,” the research house stated in a note.
However, HLIB highlighted that Eastern Steel Sdn Bhd's (ESSB) performance should remain resilient, as its hot rolled coil (HRC) plant reached optimum utilisation in January 2026, ahead of the management's earlier guidance.
The Middle East conflict is also seen as having a limited near-term impact on Hiap Teck’s core operations due to the localised nature of demand, but ESSB may face higher transportation costs because over 50% of its products are exported to Italy and Türkiye.
“The management is pivoting towards the domestic market, underpinned by strong HRC demand and its position as Malaysia's sole producer, to mitigate external risks,” HLIB added.
This domestic shift is further supported by Hiap Teck’s 27.3% stake acquisition in East Coast Eastern Steel Industrial Park Sdn Bhd (ECESIP), which is slated for completion by the end of 2026. The park has already seen commitments from several manufacturers, which will strengthen ESSB’s value chain.
HLIB maintained its earnings forecasts for the group, projecting a core profit after tax and minority interest of RM119 million for FY2026 and RM127 million for FY2027.
At the current share price of 28 sen, Hiap Teck is trading at a FY2026 price-earnings ratio of 4.1 times, which HLIB noted is below its historical five-year average of 6.7 times.
HLIB maintained its ‘buy’ rating on Hiap Teck with an unchanged target price of 35 sen.
Source:The Edge
