KUALA LUMPUR (June 24): Based on corporate news flow and announcements today, stocks in focus next Monday (June 27) could include: Berjaya Assets (BAssets), MyEG Services, Sime Darby, SP Setia, Eco World International (EWI), Kimlun Corp, Kelington Group, REDtone International, Oriental Interest and Red Sena.
Berjaya Credit Sdn Bhd (BCredit), an indirect wholly-owned unit of Berjaya Retail Bhd (BRetail), which is controlled by tycoon Tan Sri Vincent Tan, is injecting a freehold commercial unit in Berjaya Times Square, with a built up area of about 13,369 sq ft, into Berjaya Assets Bhd for RM13.37 million.
The lot is currently tenanted to Sports Toto Fitness Sdn Bhd, which runs a fitness centre there, at an annual rental of RM442,368.
BAsset's wholly-owned unit Berjaya Times Square Sdn Bhd (BTSSB) inked a sale and purchase agreement with BCredit today, to effect the purchase.
BAssets said the property was initially purchased by BCredit for RM10.5 million in 2009. Its net carrying value as at Dec 31, 2015 was RM9.1 million. The property's open market value was RM14.7 million, it added.
It said the cash consideration for the proposed acquisition will be funded by internally-generated funds and/or borrowings.
BCredit is a wholly-owned subsidiary of Singer (Malaysia) Sdn Bhd (Singer), which in turn is a wholly-owned unit of BRetail, in which Tan is the major shareholder by virtue of his 99.99% equity interest in HQZ Credit Sdn Bhd, BRetail's ultimate holding company.
Tan is also a major shareholder of BAssets and a director in BTSSB.
BAssets said the buy will provide an opportunity for BTSSB, who already owns a substantial part of Berjaya Times Square, to increase its flow space in the mall.
The Malaysian Competition Commission (MyCC) has decided to fine MyEG Services Bhd, a total of RM2.27 million and possibly impose daily fines going forward, for “abusing its dominant position in the provision and management of online Foreign Workers Permit renewals.”
MyCC found that MyEG, together with MyEG Commerce Sdn Bhd, had infringed section 10(2)(d)(iii) of the (Competition Act 2010) by abusing its dominant position in harming competition in the downstream market, in which MyEG Commerce is participating as an insurance agent for online Foreign Workers Permit renewal applications.
There are three remedial actions that MyCC wants MyEG to take. First, the concessionaire of Malaysian E-Government MSC Flagship Application has to immediately stop imposing different conditions to equivalent transactions in the processing of mandatory insurances for online Foreign Workers Permit renewal applications.
MyCC next wants MyEG to provide an efficient gateway for all of its competitors in the market sale of the mandatory insurances”, and let these competitors compete at a level-playing field within 60 days from today.
Thirdly, MyEG has to provide an undertaking in the form and manner acceptable to MyCC. The company has to then be fully compliant with the rules and regulations of General Insurance Association of Malaysia, also within 60 days.
In the event that MyEG does not comply with any of the above-mentioned remedial actions, the commission is at the liberty to impose a higher daily penalty for the subsequent period of non-compliance, said MyCC.
Sime Darby Bhd said the results of the United Kingdom’s referendum to exit the European Union will not impact the viability of the Battersea Power Station project.
Reiterating its long term commitment as a shareholder of the Battersea Power Station project, the government-linked conglomerate said the project will continue to generate interest in the longer term.
The group is confident that the iconic development will continue to generate interest in the longer term and that London will continue to remain a key investment destination and financial centre.
In an unprecedented move, UK voters polled for the country to leave the EU, with 52% or 17.41 million voters commanding the winning decision. A total of 48% or 16.14 million voters chose to stay in the EU. Voter turnout was 72.16%.
The Battersea Power Station regeneration project, with an estimated gross development value of £10 billion (RM57 billion), involves the redevelopment of London’s iconic Battersea Power Station.
Sime Darby and SP Setia Bhd have also jointly invested in the project with 40% stakes each, while the Employee Provident Fund owns the remaining 20%.
Meanwhile, Eco World International Bhd (EWI), which is developing three projects in London, is optimistic the Brexit results hold a silver lining for the group and its customers, going forward.
EWI, which is set to make its debut on the main market of Bursa Malaysia, also noted that the pound sterling has dropped, which means the cost of its development projects there will be lower.
"If this situation holds, it will also make it cheaper for EWI to acquire new sites, post-listing," said EWI vice chairman Tan Sri Liew Kee Sin in a statement.
Liew said the results of the Brexit vote — though largely unexpected — has finally removed uncertainty which has caused many investors to hold back on decision-making.
"Britain is still a hugely important economy in Europe, with highly principled, professional and competent leaders. I have every confidence that the UK government will do their utmost to take proactive measures to assuage post-Brexit concerns and move the United Kingdom forward on every front," he said.
Engineering and construction specialist Kimlun Corp Bhd expects its earnings for the current financial year to either be the same or lower than last year, as most mega infrastructure projects in the country are still at early stages and not likely to contribute significantly to its earnings in the immediate- to near-term.
Due to the softening property market, the group also expects lower profit contribution from the group's property development. The segment contributed less than 10% to the group's earnings last year.
The Group's chief executive officer Sim Tian Liang said the construction sector, which dominated about 80% of the group's revenue in FY15, will still be the main earnings growth driver this year.
Sim said the group, which has an order book of RM1.8 billion, is bidding for up to RM3 billion worth of projects.
He said it is difficult to estimate as to how much the group can secure from the bids that it has submitted so far, though he shared that Kimlun has a 20% win ratio.
Industrial gas and chemical delivery specialist Kelington Group Bhd’s chairman and chief executive officer Raymond Gan said the group's revenue in the current financial year ending Dec 31, 2016 (FY16) is expected to rise on a strong order book.
Gan said Kelington's outstanding order book stood at RM250 million and that it managed to secure new orders amounting to RM160 million so far this year.
The group is also tendering for RM500 million worth of projects, from which it expects to secure 20% worth of jobs. Among these projects, 40% is from the high-tech industry, while 60% is from the general industry, he said.
In FY15, Kelington reported a net loss of RM2.62 million, compared with a net profit of RM5.2 million a year earlier. Revenue was higher at RM206.45 million versus RM189.11 million.
Gan said Kelington is expanding its business abroad. He said the group, which had recently expanded its business in the Philippines and Indonesia, is now eyeing Vietnam and Myanmar.
Telecommunications player REDtone International Bhd recorded a loss of RM23.53 million or 3.03 sen a share for the fourth quarter ended April 30, on revenue of RM51.81 million.
For the 11 months to April 30, the group recorded a net loss of RM29.79 million or 3.81 sen a share, on revenue of RM148.59 million.
There were no comparison figures, as the group had changed its financial year end from May 31 to April 30, in line with Berjaya Corporation Bhd’s (BCorp's) financial year end. BCorp took over REDtone on May 8, 2016.
REDtone said that its losses were due to high project costs arising from prolonged delay in major projects, high impairment of trade receivables and impairment of goodwill and property, plant and equipment.
Property developer Oriental Interest Bhd (OIB)'s largest shareholder Jupiter Sunrise Sdn Bhd (JSSB) has disposed of 19.85 million shares, representing a 13.7% stake in the company.
Upon the completion of the disposal, JSSB owns 85.03 million shares or 58.69% equity in the company. However, the trading price of this bulk of shares was not stated.
Meanwhile, Pension fund Kumpulan Wang Persaraan (Diperbadankan) (KWAP) has emerged as a substantial shareholder in Red Sena Bhd, a newly-listed special purpose acquisition company (SPAC), targeting food and beverage-related businesses.
The shell company said KWAP's fund manager bought 4.02 million Red Sena shares in the open market on June 9, bringing the total number of shares that KWAP indirectly owns, to 51.52 million.
KWAP's fund manager bought another 750,000 Red Sena shares the next day (June 10), according to another stock exchange filing. As at June 23, KWAP owns 52.27 million or 5.23% of Red Sena's share capital.