KUALA LUMPUR (May 19): Based on corporate announcements and news flow today, stocks in focus on Monday (May 22) may include: Magnum, IHH, Axiata, Metronic, MyEG, Star, DRB-Hicom, Top Glove, Cypark, Ho Hup, Choo Bee and Ranhill.
Magnum Bhd and its wholly-owned Magnum Holdings Sdn Bhd were slapped with notices of assessment by the Inland Revenue Board (IRB), with penalties amounting to RM476.47 million.
It follows the disallowance of deduction of certain interest expenses incurred for investments between 2008 and 2015. Both companies are seeking to challenge the validity and legality of the notices.
Meanwhile, Magnum's first quarter ended March 31 (1QFY17) net profit slumped 55.6% to RM30.57 million from RM68.84 million a year ago, on lower gaming sales and weak consumer spending. Revenue fell 7.4% to RM697.08 million from RM752.56 million.
IHH Healthcare Bhd has sold its remaining 4.78% stake in India's Apollo Hospitals Enterprise Ltd — the second of two tranches — for INR8.198 billion (RM551.1 million).
IHH first sold its 6.07% stake in Apollo earlier this year, which helped double its net profit for its first quarter ended March 31, 2017 (1QFY17) to RM470.05 million from RM235.49 million a year ago.
Revenue in the period rose 8% year-on-year to RM2.68 billion from RM2.48 billion, as more hospitals commenced operations.
Mitsui Co Ltd is buying 10% stake in Axiata Group Bhd's Cambodian subsidiary, Smart Axiata Co Ltd, for US$66 million (RM285.54 million), with option to buy another 10% in within 12 months.
Through the deal, Mitsui will appear as a strategic partner — with expertise in Internet of Things (IoT) — to help Axiata leapfrog its digital leadership in the Cambodian telco market.
Metronic Global Bhd has appointed Ferrier Hodgson MH Sdn Bhd as special auditor to identify any irregularities in the company's transactions.
The audit — to be completed in two months — is also to ascertain whether directors involved may have breached their fiduciary duties, said Metronic.
In light of the special audit, Metronic's adviser Jackson Tan Ew Chew, who is a related party to a former director, has resigned from his post effective May 16, while its head of finance Eric Boon has taken a voluntary leave of absence.
My E.G. Services Bhd (MyEG) is buying a controlling 67% stake in Essential Reviews Sdn Bhd, which owns the popular food review website EatDrinkKL, for RM1.25 million cash.
The shareholders agreement was inked between MyEG's wholly-owned subsidiary MY E.G. Capital Sdn Bhd and Essential Reviews' sole owner, ex-Assiociated Press journalist Sean Cornelius Yoong Wan Yen.
RAM Ratings Services Bhd opined that Star Media Group Bhd's proposed disposal of its 52.51% stake in Cityneon Holdings Ltd is "slightly credit negative" — but said it will not have immediate ratings implications.
Star's debt securities — a RM750 million commercial papers programme maturing 2018 and a RM750 million medium-term notes programme maturing 2026 — are rated P1 and AA1/Stable by RAM, respectively.
RAM said while Cityneon's sale — totalling RM460 million — will add to Star's cash pile, it will lose a key recurring income, though it noted Cityneon's rights to Transformers and Marvel brands would expire in 2023 and 2024, respectively.
Lembaga Tabung Haji is seen reducing its stake in DRB-Hicom Bhd as the deadline looms to bring in a foreign partner in Proton Holdings Bhd that could potentially take up a 51% stake in the national carmaker.
The pilgrims' fund disposed of 4.38 million shares on May 17, bringing its direct interest in DRB-Hicom to 5.3% from 5.69% on April 26.
Top Glove Corp Bhd's wholly-owned GMP Medicare Sdn Bhd is acquiring a factory in Negeri Sembilan from A1 Glove Sdn Bhd for RM31.5 million, and another in Johor from Titi Glove Sdn Bhd for RM7.5 million.
The acquisitions fall under related-party transactions, as Top Glove chairman Tan Sri Lim Wee Chai is the brother of Datuk Lim Kwee Fatt, who is a director in both A1 Glove and Titi Glove.
The proposed acquisitions are in line with the group's expansion plans which entail increasing its production capacity and market share.
Cypark Resources Bhd has bagged two contracts from Selasih Mentari Sdn Bhd and Revenue Vantage Sdn Bhd worth a combined RM75.01 million to develop two large-scale solar photovoltaic (PV) plants in Negeri Sembilan.
The first — a RM53.38 million contract from Selasih Mentari — entails the development of a 10.50MW solar PV plant at Ladang Tanah Merah from May 23, 2017 to Nov 16, 2018.
The second contract from Revenue Vantage — worth RM21.63 million — involves the development of a 3.95MW plant at Jelebu from May 24, 2017 to Sept 7, 2018.
Ho Hup Construction Co Bhd reported a 35% drop in its net profit to RM12.39 million in 1QFY17, from RM19.08 million a year ago. Quarterly revenue also fell 56% to RM35.55 million in 1QFY17 from RM81.08 million in 1QFY16.
Chief executive Datuk Derek Wong Kit Leong had expected 1H17 will be "a bit quiet", but is optimistic on 'fantastic' results in FY18, as it is launching three projects with gross development value worth around RM1.6 billion towards 2H17. It currently has RM142 million in unbilled sales.
Choo Bee Metal Industries Bhd's net profit rose over three-fold to RM11.55 million in 1QFY17 from RM2.85 million, on improved average selling prices, interest income and foreign exchange gains.
Revenue however fell 3.4% to RM97.32 million, from RM100.74 million in 1QFY16, due to lower contributions from the trading segment.
Ranhill Holdings Bhd's net profit in 1QFY17 jumped 127% to RM15.69 million from RM6.91 million last year, backed by a one-off Islamic medium-term notes premium redemption worth RM13.3 million.
Revenue for the period, meanwhile, grew a marginal 2% to RM351.95 million from RM344.75 million a year ago.