PETALING JAYA: Hiap Teck Venture Bhd ’s management is upbeat about its earnings prospects given China’s Covid policy reversal and stimulus plans that will boost demand for steel products, says Hong Leong Investment Bank (HLIB) Research. The declining coking coal prices coupled with the worning out of high-cost inventories in the first quarter of financial year 2023 (1Q23) are also pointing towards lower production cost from 2Q23, added the research house. Coking coal is part of key cost components in producing steel. “If this materialises, it will allow Australian coking coal to enter China, hence easing supply and price of coking coal and also, lowering steelmaking costs,” HLIB Research pointed out. “This will in turn have an impact on Hiap Teck’s trading and downstream segments.”Having said that, HLIB Research said a more meaningful improvement in performance would likely happen from the scond half of this year.

Source: The Star January 10, 2023 01:34 UTC