Posted on 14 Jul 2026
Hiap Teck Venture Bhd's performance is expected to improve sequentially in the fourth quarter of the financial year ending 2026 (Q4 FY26), Hong Leong Investment Bank Bhd (HLIB) said.
The firm said the anticipated growth will be supported by firmer steel prices, stable sales volumes across its trading and manufacturing segments, and a recovery in sales volumes at ESSB, its 27.3 per cent-owned joint venture.
"We anticipate HTVB's performance to improve sequentially in 4QFY26, supported by firmer steel price sentiment and stable sales volumes (if not better) across both its trading and manufacturing segments.
"Meanwhile, ESSB's performance is also expected to strengthen, driven by higher steel prices and a recovery in sales volumes following the timing-related shipment delays in the previous quarter," the firm said in a note.
HLIB said ESSB's exports remain resilient despite the Strait of Hormuz disruption, while its domestic expansion strategy reinforces longer term growth.
"The closure of the Strait of Hormuz had minimal impact on ESSB's export activities, as evidenced by continued strong shipments to Turkey and Italy, which collectively accounted for more than 50 per cent of its total sales volume during the quarter.
"This is because the company's export shipments were routed via the Red Sea, avoiding the Strait of Hormuz altogether.
"That said, management reiterated that ESSB remains committed to gradually increasing its domestic sales (with a target of 50 per cent of total sales volume over the medium term), leveraging its unique position as Malaysia's sole domestic producer of hot rolled coils," HLIB added.
HLIB said this positions the company well to capture import substitution opportunities.
The firm maintained its "Buy" call on Hiap Teck, with an unchanged target price of 35 sen.
Source:New Straits Times
