A Mercedes-Benz dealer in Malaysia, Hap Seng shares rose 13.6% to RM3.76 during the afternoon session.
This marked its loftiest price point since May 30, when the stock started a sharp decline from its Jan 31 year-to-date peak of RM7.19.
It pared its gains to end 12.7% or 42 sen higher at RM3.73 with 13.64 million shares changing hands. Notably, it emerged as the top gainer on the Bursa Malaysia.
YTL Power moved up 10.6% to an intraday high of RM1.88. However, the gains were pared by day’s end at 5.9% or 10 sen higher at RM1.80 with a trading volume of 56.63 million shares.
YTL Power’s impressive upward trajectory this year is driven by strong earnings potential in its utility operations in Singapore and the UK, alongside promising ventures in data centres and digital banking.
This excitement among investors has led to a remarkable year-to-date share price surge of over 140%.
Hap Seng’s fragile recovery
Hap Seng’s recent resurgence appears to be in its early stages but is quite a turnaround for a stock that had seen a 70% year-to-date decline. This was likely driven by its removal from the MSCI Malaysia Index in May along with Mercedes-Benz’s plan to transition from a dealership model to an agency model for selling its luxury vehicles by year-end.
In a statement last month, Hap Seng revealed the signing of agency and service dealer agreements with the two parties, to be effective from September onwards.
Effective Sept 1, its subsidiary Hap Seng Star Sdn Bhd will take on the role of a non-exclusive agent responsible for facilitating the sale of Mercedes-Benz passenger vehicles.
Additionally, it will provide assistance to Mercedes-Benz in managing and delivering direct sales to their customers in Malaysia.
Furthermore, Hap Seng Star will be appointed as the non-exclusive service dealer to service Mercedes-Benz passenger vehicles in Malaysia.
In Q1 FY2023, the group recorded a significant 67% decline in net profit to RM50.77 million compared with RM156.3 million in the previous year, mainly attributed to the impact of reduced palm oil prices and a sluggish real estate market.