PETALING JAYA (July 21): Based on corporate announcements and news flow today, companies in focus tomorrow (Wednesday, July 22) are Berjaya Corp, UOA REIT, Takaso, AFG, KYM and IJM Corp.
Berjaya Corp Bhd (BCorp) has proposed to subscribe for one new ordinary share representing 50% of Berjaya Kyoto Development (S) Pte Ltd (Bkyoto)'s enlarged share capital, for S$34.66 million (about RM97.28 million) cash, which will allow it to participate directly in the Four Seasons Hotel & Residences project in Kyoto, Japan.
BCorp (fundamental: 0.9; valuation: 2) said the proposed subscription will also increase its landbank and portfolio of properties owned, which include The Ritz-Carlton Residences in Malaysia.
In a filing with Bursa Malaysia, BCorp said it has today signed a subscription agreement with Berjaya Land Bhd (BLand) and BKyoto for the proposed subscription. BLand (fundamental: 0.55; valuation: 1.2) is currently the sole shareholder of BKyoto.
Upon completion of the proposed subscription, BCorp and BLand will have equal equity of 50% each in BKyoto. Tan Sri Vincent Tan Chee Yioun is a major shareholder of both BLand and BCorp.
In conjunction with the proposed dilution, BCorp will advance to BKyoto Group up to RM152.74 million to part-settle the inter-company debts between BKyoto Group and BLand as well as to fund working capital of the BKyoto Group in proportion to its shareholdings in BKyoto.
BLand said the proposed dilution will result in an estimated gain of about RM147.9 million in BLand arising from the deemed disposal cum deconsolidation of Bkyoto, and the re-measurement of the fair value of its remaining stake of 50% in BKyoto.
The exercise is expected to be completed by the third quarter of 2015.
UOA Real Estate Investment Trust (REIT) saw its second quarter ended June 30 (2QFY15) distributable income increase 2.37% to RM11.39 million from RM11.12 million in 2QFY14.
This translates to a distribution per unit (DPU) of 2.69 sen compared with 2.63 sen in the previous corresponding quarter, according to UOA REIT’s filing to Bursa Malaysia.
Total distributable income for the half-year period (1HFY15) was RM22.5 million, up a marginal 0.95% compared with RM22.29 million in 1HFY14, resulting in a 1HFY15 DPU of 5.32 sen compared with 5.27 sen from 1HFY14. The 1HFY15 DPU will be paid on Aug 28.
Meanwhile, its total comprehensive income for the six-month period was largely flat at RM23.94 million, compared with RM23.71 million in 1HFY14.
Gross rental for the 1HFY15 improved by 4% due to revision in rental rates and steady occupancy rates of its investment properties, said UOA REIT, but total expenditure has increased 7% due to increase in property operating expenses and borrowing costs.
The REIT’s manager said it expects the REIT to maintain stable occupancy and rental rates across its portfolio of properties for the financial year ending Dec 31, 2015.
Separately, UOA REIT (fundamental: 1.0; valuation: 2.3) said its public unitholding spread as at June 30 stood at 23.36%, which does not comply with the minimal public unitholding spread requirement of Bursa Malaysia.
The trust said it has applied to Bursa Securities seeking the latter’s nod for a lower public unitholding spread and that the application is currently pending approval.
Baby products and condoms maker Takaso Resources Bhd saw 19.96 million of its shares that represent a 9.77% stake in the company traded off-market today for RM7.6 million.
According to Bloomberg, the shares were moved in six blocks comprising one block of 13.96 million shares — for 33 sen each — and five blocks of 6 million shares in all at 50 sen apiece, which totalled RM7.6 million.
The 33 sen price tag represented a discount of 29.79% to Takaso’s (fundamental: 1.65; valuation: 0.3) current trading price of 47 sen, while the 50 sen price tag was at a premium of 6.38% to Takaso’s market price.
It is not immediately known who the buyers and sellers of the shares were.
Alliance Financial Group Bhd (AFG) is targeting an 8% to 9% loan growth for the financial year ending Mar 31, 2016 (FY16).
For FY15, AFG posted a loan growth of 14.9% to RM36.6 billion, driven by expansion in consumer and business banking loan portfolio.
AFG chief executive officer Joel Kornreich told pressmen after the group's annual general meeting (AGM) that AFG is working to change the mix of origination, whereby areas expected to see much lower loan growth are hire purchase for auto, business purpose financing and mortgages.
Asked if AFG's net profit would grow in tandem with its loan growth, Kornreich declined to provide specific guidance, but said the group's bottom line growth would not differ much from its loan growth.
Nevertheless, he said the group's loans to small and medium businesses would continue to see a double-digit growth.
Last year (FY15) AFG’s (fundamental: 1.5; valuation: 2.25) small and medium enterprises loan growth was recorded at 26.8% to RM7.5 billion, and this year, Alliance is hoping for another 15% growth, Kornreich added.
KYM Holdings Bhd expects to turn around in current financial year ending January 31, 2016 (FY16), after restructuring its loss-making corrugated carton business.
KYM's (fundamental: 0.55; valuation: 0.9) chairman Datuk Seri Isahak Yeop Mohamad Shar said the company should be able to turn around in FY16, as the company had undertaken cost-efficiency measures.
"It should be showing some positive results in mid-year," Isahak Yeop told reporters after KYM's AGM today.
He expects KYM's revenue growth to be maintained at 10% in FY16. During FY15, net loss stood at RM2.95 million against higher revenue of RM99.36 million from a year earlier.
In 1QFY16, KYM's net loss widened to RM746,000, as compared to a net loss of RM509,000 a year earlier. Revenue was higher at RM25.66 million versus RM23.71 million.
Isahak Yeop said KYM was looking at divesting its non-core assets and that the company is in talks to divest two residential tracts in Perak, one in Lumut and another in Ipoh.
KYM owns 28ha (70 acres) in Lumut and 17ha (43 acres) in Ipoh. Proceeds from the land sale will be used for KYM's business expansion, according to him.
As at April 30 this year, KYM's net assets per share stood at 61 sen.
IJM Corp Bhd will dispose of 100% of its stakes in Swarna Tollway Private Limited (STPL) to MAIF Investments India 3 Pte Ltd (MAIF), through its two units for a total consideration of INR10.03 billion or RM596.78 million. The disposal is expected to net it a gain of about RM92.62 million.
IJMII (Mauritius) Ltd (IJMIIM), a wholly-owned subsidiary via IJM Investments (M) Limited, had on July 20, 2015 entered into a conditional Share Purchase Agreement (SPA) with MAIF and STPL to dispose of 175 million equity shares of INR10 each and 14 million cumulative compulsorily convertible preference shares of INR10 each to MAIF, according to a filing by IJM Corp to Bursa Malaysia yesterday.
The bulk of shares represent 70% of the issued and paid-up share capital of STPL. IJMIIM will part it for a total consideration of INR6.85 billion (equivalent to about RM407.76 million).
Meanwhile, IJM Corp’s 95%-owned unit CIDB Inventures Sdn Bhd (CIDBI) will dispose of the remainder 30% stake in STPL to MAIF — 75 million equity shares of INR10 each and 6 million cumulative compulsorily convertible preference shares of INR10 each — for INR3.18 billion (equivalent to about RM189.02 million).
However, the disposal of CIDBI’s stake in STPL is subject to obtaining the necessary approvals from the authorities and within a period of 42 months from the completion of the disposal of 70% equity.
According to IJM Corp (fundamental: 1.1; valuation: 0.8), STPL is a private limited company incorporated in India and the concessionaire for the improvement and upgrading of two highways in India on a build-operate-transfer basis.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)