KUALA LUMPUR (July 23): Based on corporate announcements and news flow today, companies in focus tomorrow (Friday, July 24) are CIMB, TAHPS, MESB, Datasonic, Cycle & Carriage, Pantech, Destini and Tower REIT.
CIMB Group Holdings Bhd expects the second half of 2015 to be challenging due to the difficult macroeconomic conditions in Thailand and Indonesia.
CIMB Group (fundamental: 1.05; valuation: 2.25) chief executive Tengku Datuk Zafrul Tengku Abdul Aziz said its banking business in Malaysia will remain flat this year, while the environment in Indonesia and Thailand will remain tough due to slower macroeconomic growth in Southeast Asia.
TAHPS Group Bhd, which is engaged in the cultivation of oil palm and rubber, and property development, plans to build a township on a 700-acre piece of land in Bukit Puchong, Selangor, which will have a gross development value (GDV) of RM10 billion.
Its group chief executive officer Tan Seng Chye said the township development will keep the group busy for the next decade.
He said TAHPS Group (fundamental: 2.7; valuation: 0.5) will draw a master plan incorporating future developments in the township, which is expected to be completed by the end of this year.
On its land bank, Tan said TAHPS Group will remain focused on acquiring land in Bukit Puchong, but is open to land acquisition opportunities in the Klang Valley.
However, he said the group does not aggressively seek land, unless there is an impetus for acquisition.
Apart from the proposed township in Bukit Puchong, Tan said the group has three other projects in its pipeline that are waiting to be launched. They comprise shop lots, condominiums and small-office-home-office (SOHO) units, which collectively have a GDV of RM600 million.
However, he said the group will launch these projects in phases, in line with the property market conditions as the current slowdown in the property market, particularly in the investment and luxury segment, may be unfavourable.
As at March 31, 2015 (4QFY15), TAHPS Group has unbilled sales of RM40 million.
Leather fashion products retailer MESB Bhd announced today that it is acquiring the entire equity interest of Active Fit Sdn Bhd, the designer and retailer of the "Jeep" apparel brand in Malaysia, for RM19 million cash.
In a filing with Bursa Malaysia, MESB said it has entered into a conditional share sale agreement (SSA) with Active Fit for the said acquisition.
MESB said the proposed acquisition will enable it to expand into the retailing of casual apparel and accessories, a segment within the retail fashion industry for which the group has experience and expertise.
Active Fit is principally involved in brand building, concept development, fashion designing, sourcing, marketing, distribution and retailing of casual apparel and accessories under the "Jeep" brand, which operates more than 100 consignment counters in various departmental stores nationwide.
MESB said the proposed acquisition shall be financed by internally generated funds and/or bank borrowings, and — subject to shareholders and relevant regulatory approvals — it is expected to be completed by the fourth quarter of 2015.
The proposed buy comes with a profit guarantee from Siow and Chen, whereby Active Fit shall achieve an audited profit after tax of not less than RM2.5 million for the financial year ending June 30, 2016 (FY16).
Datasonic Group Bhd, which saw its share price surge more than 24% since July 21, has been slapped with an Unusual Market Activity (UMA) query by Bursa Malaysia today over the sudden surge in its share price and trading volume.
Shares of the electronic-identification specialist have been actively traded recently on speculation that it has received a “multi-million ringgit” contract.
Datasonic (fundamental: 2.2; valuation: 0.9) was traded at RM1.08 on July 21 and have since surged 26 sen or 24% to close at RM1.34 today, up 9 sen or 7.2% from yesterday’s close.
It was the most actively traded stock across the exchange today and saw some 58.46 million shares change hands between RM1.26 and RM1.40. At the current price, its market capitalisation stood at RM1.8 billion.
Cycle & Carriage Bintang Bhd’s share price hit a three-and-a-half-year high today, after posting a 10-fold jump in net profit for its second quarter ended June 30, 2015 (2QFY15) to RM21.83 million or 21.67 sen a share from RM2.03 million or 2.02 sen a year ago.
The car maker attributed the higher earnings to the improvement in trading results from retail and aftersales operations and recognition of dividend income.
Revenue for the quarter doubled to RM472.36 million from RM231.16 million from last year.
No dividend was declared for the six months ended June 30, 2015.
For the cumulative six months (1HFY15), its net profit jumped over six-fold to RM28.47 million from RM3.73 million a year ago.
Revenue also rose 76.14% to RM735.48 million from RM417.56 million.
Cycle & Carriage chairman Alex Newbigging said the group has recently commenced a programme of upgrades to existing facilities, while a new Autohaus in Cheras, Kuala Lumpur, is expected to be operational by around the year end.
Pantech Group Holdings Bhd saw its net profit for the first quarter ended May 31, 2015 (1QFY16) fall 32.84% to RM9.12 million from RM13.58 million a year ago.
The steel pipe maker attributed the decline in earnings to the competitive pricing faced both on the local and foreign fronts.
Revenue rose 6.09% to RM138.64 million from RM130.68 million as its trading division secured better demand and delivery in the local oil and gas sector.
Pantech (fundamental: 1; valuation: 2.4) declared a first interim dividend of 0.5 sen per share for the financial year ending Feb 29, 2016 (FY16), which will be payable on Oct 22. The ex-date for the dividend is Oct 5.
Going forward, the group is cautious with the challenges faced by the oil and gas industry in Malaysia and the region.
Destini Armada Sdn Bhd, a wholly-owned subsidiary of Destini Bhd, has proposed to acquire Everyday Success Sdn Bhd, a wholly-owned subsidiary of Destination Marine Services Sdn Bhd (DMS), for RM90 million.
In a filing with Bursa Malaysia, Destini (fundamental: 1.7; valuation: 1.1) said Destini Armada had entered into a conditional SSA with DMS for the purchase of the company today.
The acquisition will be funded by RM15 million in bank borrowings while the remaining RM75 million will be satisfied by the issuance of 107.14 million shares of 10 sen each in Destini at the issue price of 70 sen per share.
This will see Destini’s share base increase to a maximum of 1.173 million shares or RM117.34 million.
Destini said the proposed acquisition is an opportunity for the group to increase its range of products and expand its supply of vessels by venturing into the paramilitary boat segment and its related services.
Under the SSA, DMS will inject identified assets into the company.
Tower Real Estate Investment Trust (REIT) declared an interim income distribution per unit (DPU) of 3.2 sen for the first half of its financial year ended June 30, 2015 (1HFY15), which was 16.5% lower than its 1HFY14 DPU of 3.83 sen.
The DPU of 3.2 sen amounts to a total income distribution of RM8.98 million, representing approximately 91% of the realised distributable net income for 1HFY15 of RM9.86 million.
In a filing with Bursa Malaysia, Tower REIT, which is part of the Hong Leong Group, reported a 6.7% increase in net profit for its second quarter ended June 30, 2015 (2QFY15) to RM5.81 million from RM5.45 million in 2QFY14.
The increase in net profit was mainly attributed to lower net interest expense due to the repayment of bank borrowings, by utilising the proceeds from the disposal of Menara ING in December last year.
Its revenue had decreased by 19.5% to RM9.5 million in 2QFY15 from RM11.8 million in 2QFY14 mainly due to the absence of income from Menara ING.
For 1HFY15, Tower REIT reported a 19.2% decrease in net profit to RM9.86 million from RM12.21 million last year. Its revenue for the period had also decreased by 20.2% to RM19.08 million in 1HFY15 from RM23.92 million in 1HFY14.
Tower REIT’s investment portfolio currently consists of Menara HLA in Jalan Kia Peng, Kuala Lumpur, and HP Towers in Bukit Damansara.
As for its prospects, Tower REIT said that the office oversupply situation is expected to continue for the foreseeable future.
(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.)