Multi-Usage, Sunway, Puncak Niaga, KNM Group, Solid Automotive, THHE, TM, DiGi and Bina Darulaman

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KUALA LUMPUR (April 9): Based on corporate announcements and newsflow today, stocks in focus tomorrow (Friday, Apr 10) could include: Multi-Usage Holdings Bhd, Sunway Bhd, Puncak Niaga Holdings Bhd, KNM Group Bhd, Solid Automotive Bhd, TH Heavy Engineering Bhd (THHE), Telekom Malaysia Bhd (TM), DiGi.Com Bhd and Bina Darulaman Bhd.

Precast product manufacturer and property developer Multi-Usage Holdings Bhd has proposed a private placement of up to 5.27 million shares, equivalent to 10% of its issued and paid-up capital, to finance the acquisition of land in the northern region of Peninsular Malaysia.

Multi-Usage (fundamental: 2.8; valuation: 1.8) said the proposed placement may be implemented in one or more tranches within six months from the approval date, with the issue price to be determined separately.

“In any event, the placement shares will not be priced lower than RM1, being the current par value of our shares,” the group explained.

Assuming a placement price of RM1.26 per share, Multi-Usage expects to raise RM6.644 million, of which 97% or RM6.434 million will be used to finance or part finance the land buy.

The group said the proceeds will be utilised within 24 months from the listing of the placement shares.

Property and construction group Sunway Bhd is acquiring two hardware distributors — Winstar Trading Sdn Bhd and PND Hardware & Trading Pte Ltd — for a combined RM137.82 million.

The acquisitions are expected to be completed in three annual tranches, with the final tranche completing in the second quarter of 2018.

In a filing with Bursa Malaysia today, Sunway (fundamental: 1.5; valuation: 1.8) said its wholly-owned unit Sunway Holdings Sdn Bhd (SunHoldings) has signed two separate share sale agreements (SSAs) with Winstar vendors to acquire Winstar Trading for RM130.95 million, and with PND vendors to buy PND at S$2.57 million (RM6.87 million).

Under the SSAs, both Winstar and PND vendors have guaranteed net profit of RM15 million and S$250,000 respectively per year, for the financial years ending Dec 31, 2015, 2016 and 2017, in proportion to Sunway’s stake in the two companies.

In Malaysia, Winstar are sole exclusive distributors of household hardware names such as WD-40, Araldite and Esicut, and authorised distributors of brands such as Bosch, Skil, 3M, Bahco, Cigweld, Selley, Stanley, Norton and GP Battery. Winstar and PND also distribute 17 in-house brands including Nietz, Winsir, Cyber, Galaxy, Buick and StarWeld.

Sunway said the proposed acquisitions provide opportunities for its trading and manufacturing division to acquire profitable market leaders with over 30 years of experience in the wholesaling of hardware market. 

Puncak Niaga Holdings Bhd said the proposed RM1.5 billion disposal of its water assets to Pengurusan Air Selangor Sdn Bhd (Air Selangor) has been extended for the fourth time by another month, to May 11, 2015.

Puncak Niaga (fundamental: 1.5; valuation: 1.2) said both the company and Air Selangor had mutually agreed to a further extension until May 11, for the fulfillment of the conditions precedent stated in the conditional sale and purchase agreement dated Nov 11 last year.

The proposed sale entails the disposal of Puncak Niaga’s 100% stake in Puncak Niaga (M) Sdn Bhd and 70% stake in Syarikat Bekalan Air Selangor (Syabas) to the Selangor state agency.

The RM1.5 billion deal was agreed in principle last year and finally approved by Puncak Niaga’s shareholders in January. The sale is a key component in the prolonged water restructuring dispute between the opposition-led Selangor and Putrajaya.

KNM Group Bhd has secured three projects worth a combined US$56.67 million (RM204.01 million) from Japan's Toyo Group and Spanish-based Tecnidas Reunidas Group.

KNM (fundamental: 0.85; valuation: 1.8) said its wholly-owned subsidiary KNM Process Systems Sdn Bhd was awarded a US$33.53 million contract by Toyo Group to supply columns, reactors, drums and tanks for the Pengerang Integrated Petroleum Complex Project in Johor.

The group also won a US$15.17 million contract from Tecnicas Reunidas Group to supply reactors, columns and pressure vessels for the same project. Its third contract valued at US$7.97 million, involves supplying towers to Toyo Engineering Corp of Japan for the Turkmengas Petrochemical Complex project in Turkmenistan.

Solid Automotive Bhd has proposed to undertake a private placement of up to 10% of its issued share capital to repay bank borrowings and for working capital. The proposed private placement will be issued at any point of time, to third party investor(s) to be identified at an issue price to be determined later.

Solid Automotive said based on the indicative issue price of RM1.41 per placement share, the proposed private placement is expected to raise gross proceeds of up to RM21.15 million.  

The proposed private placement is expected to be completed by the third quarter of this year.  

Loss-making TH Heavy Engineering Bhd (THHE) announced it has fixed the issue price for the second tranche of its private placement — which involves 10 million new shares — at 33 sen per share, which will raise RM3.3 million.

“The issue price represents a discount of 1.87% to the five-day weighted average market price of THHE shares up to and including April 8, 2015, being the last market day immediately preceding the price-fixing date of RM0.3363 per share,” the group said in a filing with Bursa Malaysia this evening.

To recap, THHE (fundamental: 0.35, valuation: 1.2) had on Sept 24, 2014, announced its intention to place up 125.81 million new shares or 10% of its issued and paid-up capital of 1.258 billion shares, in several tranches to selected investors.

Telekom Malaysia Bhd (TM) and DiGi.Com Bhd will tap each other’s customer base through a collaboration involving TM's Internet Protocol television (IPTV).

According to both companies' joint media invite issued today, TM (fundamental: 1; valuation: 1.1) will provide entertainment, sports and video on demand on its HyppTV to DiGi (fundamental: 1.55; valuation: 2.1) customers, through mobile app "HyppTV Everywhere".

TM and DiGi said the launch for the service would take place next Monday (April 13, 2015).

TM’s pay-TV platform is delivered through optical fibre via the company's Internet services UniFi and Streamyx.

HyppTV provides more than 60 channels which offer news, lifestyle and entertainment, as well as sports programmes.

Kedah-based developer Bina Darulaman Bhd is keen on bidding for the construction of the proposed Kulim International Airport, which was reported to cost some RM1.6 billion.

But Bina Darulaman's (fundamental: 0.45; valuation: 1.4) group managing director Datuk Izham Yusoff told reporters after the group's annual general meeting here today that the group has yet to be able to bid for the project at the moment, as both the state and federal governments have yet to finalise the terms of the proposed airport.

"We have both the property and construction expertise. For example, back then, we were part of the team constructing the airports at Alor Setar and Langkawi. This itself adds credibility to us," he added.

(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.)