SMTrack, MAHB, IOI Corp, Signature, RHB Cap, KESM, IOI Properties, JCY and TH Heavy

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KUALA LUMPUR (Feb 13): Based on corporate announcements and news flow today, companies that may be in focus on Monday (Feb 16) could include: SMTrack Bhd, Malaysia Airports Holdings Bhd (MAHB), IOI Corp Bhd, Signature International Bhd, RHB Capital Bhd (RHB Cap), KESM Industries Bhd, IOI Properties Group Bhd, JCY International Bhd and TH Heavy Engineering Bhd.

SMTrack Bhd has announced a new venture, involving the export of palm oil sludge or palm acid oil to China, which management has expected to account for 50% of the firm’s total revenue after two years.

SMTrack (fundamental: 2.25; valuation: 0.3) chief executive officer Yow Lock Sen said the new venture is in line with his turnaround plan for the loss-making entity, which he expects to return to black in 2015.

Under the new venture with Sino Renewable Energy Corporation, SMTrack will source the palm acid oil, export the materials, while also providing the tracking services for the shipment to China.

Malaysia Airports Holdings Bhd (MAHB) posted a sharp increase in its fourth quarter (4QFY14) net profit at RM662.9 million, from RM36.9 million a year before, mainly due to the gains arising from re-measurement of fair value of investment, amounting to RM502.5 million.

Revenue however declined 36.5% to RM711.3 million, from RM1.12 billion previously.

For the full year ended Dec 31, 2014 (FY14), MAHB (fundamental: 0.5; valuation: 0.6) saw its net profit doubled to RM748.5 million, from RM377.5 million a year before.

Revenue meanwhile, declined 18.4% to RM3.3 billion, from RM4.1 billion previously, due to lower construction revenue as a result of completion of klia2 project in April 2014.

Looking ahead, MAHB said it expected 2015 passenger traffic to record 85.8 million movements — a growth of 3% from 2014.

IOI Corp Bhd reported a net profit of RM19.6 million for the second quarter ended Dec 31, 2014, 96% lower than the net profit of RM487.1 million the year before, due mainly to unrealised fair value loss in foreign currency forward exchange contracts, arising from the weaker ringgit.

Revenue for the quarter declined marginally to RM2.88 billion, from RM2.93 billion.

For the six months ended Dec 31, IOI Corp's (fundamental: 1.7; valuation: 2.1) net profit also came in 75% lower at RM196.2 million, compared with RM788.9 million a year earlier. Revenue also decreased 4% to RM5.9 billion, from RM6.2 billion previously.

Signature International Bhd posted a net profit of RM12.2 million for the second quarter ended Dec 31, 2014, 318% higher than the previous corresponding quarter net profit of RM2.9 million, in tandem with the increased revenue.

Revenue for the quarter was 66% higher at RM71.1 million, from RM42.9 million previously.

For the first half of the financial year, Signature (fundamental: 2.1, valuation: 2.4) delivered a net profit of RM18.9 million — a 281% leap from RM5 million last year. Revenue was 87% higher at RM130.4 million, compared with RM69.9 million in 2HFY14.

RHB Capital Bhd’s deputy managing director Khairussaleh Ramli has been said to be the frontrunner to succeed Kellee Kam, as the head of Malaysia’s fourth-largest lender by assets, according to sources.

Bloomberg reported while RHB sees Khairussaleh as the only internal candidate that fits the role, it’s also talking to individuals outside the company. The board of directors will meet in late February or early March, after the Lunar New Year holidays, to decide on the position.

KESM Industries Bhd is acquiring the remaining 34.62% stake in its subsidiary KESM Test (M) Sdn Bhd, from Sunright Ltd for RM35 million.

Following the acquisition, KESM Test will become a wholly-owned subsidiary of KESM (fundamental: 2.35; valuation: 2.4), the group said in a statement today.

KESM's executive chairman and chief executive officer Sam Lim believes the acquisition will further enhance the group's growth in the testing of automotive devices.

IOI Properties Group Bhd’s net profit for the second quarter ended Dec 31, 2014 (2QFY15) declined 6.6% to RM280.35 million, on higher related marketing and selling expenses.

The group has recorded a higher revenue for 2QFY15, from RM392.62 million to RM448.26 million — an increase of 14.17%.

For the six months, its profit went down 13.57% to RM381.35 million, despite revenue having increased by 22.68% to RM823.78 million.

IOI Properties said the Malaysian property market remains challenging, with the banks' credit tightening measures, volatile economy and the impending introduction of Goods and Services Tax.

Moving forward, the group will continue to focus on affordable housing and landed properties in its existing and new townships in Klang Valley and Johor.

JCY International Bhd saw its net profit for the first quarter ended Dec 31, 2014 (1QFY15) risen 65.92% to RM50.19 million, from RM30.25 million a year ago, mainly due to favourable exchange rate and increased in sales volume.

Quarterly revenue climbed by 2.32% to RM487.9 million, versus RM476.81 million a year ago.

JCY (fundamental: 1.8; valuation: 1.8) has recommended a Single Tier Tax Exempt First Interim Dividend of 1.25 sen per ordinary share or 5% for the financial year ending Sept 30, 2015.

On prospects, the firm said the Total Addressable Market (TAM) for HDD has been steady, as the decline in PC shipments has moderated and the demand for cloud and enterprise storage remains healthy.   

TH Heavy Engineering Bhd has proposed a rights issues of up to 1.2 billion new Islamic irredeemable convertible preference shares (IICPS) at 25 sen each, to raise a gross proceed of up to RM300 million.

TH Heavy (fundamental: 0.35; valuation: 0.3) said the tenure of the preference shares is five years, and the proceeds will be utilised mainly for capital expenditure, working capital, and repayment of debt.

The IICPS will have annual dividends rate of between 3% to 5%.

(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.)