KUALA LUMPUR (Dec 29): Based on corporate announcements and news flow today, companies that may be in focus tomorrow (Wednesday, Dec 30) could include: Pavilion REIT, Boustead, Petaling Tin, MyEG, Box-Pak, IHH Healthcare, Microlink, OWG, Berjaya Corp, PUC Founder, Kim Teck Cheong and Raya International.
Pavilion Real Estate Investment Trust (Pavilion REIT) (fundamental: 2.4; valuation: 0.15) is buying The Intermark Mall, which forms part of The Intermark mixed-use development located at the crossroads of Jalan Ampang and Jalan Tun Razak here, for RM160 million cash, which will be fully funded through debt.
In a filing with Bursa Malaysia today, Pavilion REIT said its manager Pavilion REIT Management Sdn Bhd had signed a sale and purchase agreement with The Intermark Sdn Bhd, an indirect unit of investment fund Blackrock Inc, for the acquisition of the six-storey retail building, together with 367 car par bays.
The deal also entails The Intermark providing Pavilion REIT with a rental guarantee of RM15 million for three years to be held by a trustee, which will be jointly appointed by Pavilion REIT and The Intermark.
With the rental guarantee, Pavilion REIT said the estimated net yield for The Intermark Mall comes to 6.1% per year, and 3% when discounting the rental guarantee.
Occupancy rate at the building with a net lettable area of 225,014 sq ft, stood at 74%, based on committed and/or commenced tenancies as at the valuation date of Sept 30, 2015.
Boustead Heavy Industry Corp Bhd's (BHIC) subsidiaries have entered into separate Memoranda of Agreement (MoA) with Jasa Merin (Labuan) PLC for the disposal of three chemical tankers known as Chulan 1, Chulan 2 and Chulan 3, for US$5.7 million each or a total of US$17.1 million in cash.
The sale is expected to result in a net loss of RM12 million to BHIC for the financial year ending Dec 31, 2015.
In its filing to Bursa Malaysia yesterday (Dec 28), BHIC said the sale of the tankers is expected to be completed by Feb 29, 2016.
The timeframe for full utilisation of the disposal proceeds is approximately six months, and BHIC will use the proceeds to further reduce its existing loans and borrowings.
Bakti Wira Development Sdn Bhd (BWSB), a wholly-owned subsidiary of Boustead Holdings Bhd (fundamental: 0.65; valuation: 2.0), will dispose its 30% stake in loss-making Jendela Hikmat Sdn Bhd (JHSB) to Cascara Sdn Bhd for RM180 million.
In a filing with Bursa Malaysia, Boustead said the sale is a related party transaction.
Investment holding company Cascara holds a 40% stake in JHSB, with Lembaga Tabung Angkatan Tentera (LTAT) — the major shareholder of Boustead — and BWSB, holding a 30% stake each in JHSB.
JHSB and Cascara share the same directors, namely Petra Energy Bhd's major shareholder Tan Sri Bustari Yusuf and his son Mohamad Nadziff.
Boustead said the group will reap a net gain of RM194.46 million, based on the group’s cost of investment and after adjusting for share of losses, impairment of goodwill, as well as tax and expenses arising from the proposed disposal.
The disposal will be satisfied by cash, with a RM5.4 million deposit paid today and a balance payment of RM174.6 million by April 30, 2016.
Boustead said the disposal, to be completed by the third quarter of 2016, allows the group to strengthen its liquidity and cash flow position.
The disposal is expected to be completed by the third quarter of 2016.
Petaling Tin Bhd (fundamental: 0.75; valuation: 0.9) is disposing of five parcels of land totalling 116.11 acres in Ulu Yam, Selangor, to property developer Ringgit Muhibbah Sdn Bhd for a combined RM45.59 million cash, to unlock the value of the land and improve the group's cashflow.
In a filing with Bursa Malaysia today, Petaling Tin said its wholly-owned subsidiary PTB Development Sdn Bhd has signed two separate sale and purchase agreements (SPAs) with Ringgit Muhibbah for the proposed disposal.
Petaling Tin said the proposed disposal will enable it to raise funds for the working capital requirements of the group.
The original cost of investment for the land was RM15.5 million, and it has a net book value of RM15.65 million, netting the group a gain on disposal of RM28.98 million, which translates into a gain of 8.37 sen per share.
The proposed disposal is expected to be completed within nine months from the date of the SPAs, it added.
The completion of My E.G. Services Bhd's (MyEG) (fundamental: 2.3; valuation: 1.1) acquisition of 22 storeys of stratified parcels in the 45-storey Iconic Office Block at Empire City, Damansara, has been set back by a delay in the completion of the building.
In a filing with Bursa Malaysia, MyEG said today that the completion of the acquisition has been pushed back to the first quarter of 2016, as Cosmopolitan Avenue Sdn Bhd, the vendor, has not completed the construction of the building.
The group indicated that Cosmopolitan Avenue will not be able to obtain the CCC (Certificate of Completion and Compliance) by Dec 31, 2015; in accordance with the SPA (sale and purchase agreement) dated May 8, 2015.
The group had initially expected to complete the acquisition in the fourth quarter of 2015.
On May 8, MyEG had proposed to acquire the property for a total consideration of RM155.3 million.
Box-Pak (M) Bhd (fundamental: 1.0; valuation: 1.7) is leasing a piece of land in Myanmar for its expansion into the newly-opened market.
In a filing with Bursa Malaysia, the corrugated carton boxes maker said its wholly-owned subsidiary, Boxpak (Myanmar) Company Ltd, has entered into a land sublease agreement (LSA) with Myanmar Japan Thilawa Development Ltd to obtain a leasehold right over the piece of land, measuring 74,830 sq metres.
The land where Box-Pak will set up a manufacturing plant is located in Thilawa Special Economic Zone, Class A Area, Yangon Region, Myanmar.
The total cash consideration payable by Boxpak Myanmar to Thilawa Development is US$5.61 million or US$75 per sq metre.
Box-Pak said the lease tenure commences from the date of execution of the LSA to June 4, 2064.
The group estimates the lease transaction to be completed by Jan 31, 2016.
Hospitals operator IHH Healthcare Bhd (fundamental: 1.25; valuation: 0.5) will no longer be managing City International Hospital, a 320-bed tertiary multi-specialty hospital, in Ho Chi Minh City, Vietnam, starting Thursday (Dec 31).
This follows the termination of a hospital management agreement (HMA) entered into between IHH's Singapore-based unit, Gleneagles Management Services Pte Ltd (GMS), and City International Hospital Co Ltd (CIH), formerly Hoa Lam-Shangri-La 1 LLC, in 2012.
IHH told Bursa Malaysia that GMS and CIH have signed a termination agreement to amicably terminate the hospital management agreement, with effect from Dec 31.
Microlink Solutions Bhd (fundamental: 1.7; valuation: 1.2) signed a services agreement with German business applications software developer, SAP SE, to provide the latter with services in developing Islamic banking solution on the SAP platform.
In a filing with Bursa Malaysia, Microlink said it will help SAP’s customers design, implement and integrate SAP banking solutions; optimise Islamic banking business processes; and provide strategic business consultation.
As an SAP partner, Microlink will take an active part in the support, customisation and deployment of SAP banking solution-based systems.
Microlink said both parties have been working for the past 18 months in co-innovation activities, to develop this new solution.
The group also revealed that a significant pipeline of prospective financial institutions which the new Islamic banking platform can serve, has already been identified.
Leisure and hospitality services provider Only World Group Holdings Bhd (OWG) said it expects to seal an investment deal "in the next couple of months".
This comes on the heels of the group's recent purchase of a 60% stake in Escaperoom Holdings Sdn Bhd for RM5.4 million cash, paving its way into the real-life physical adventure games segment.
At the group’s annual and extraordinary general meetings today, group managing director Datuk Seri Richard Koh said OWG has received several offers and is planning to complete one soon.
However, Koh declined to reveal further details.
Diversified group Berjaya Corp Bhd (fundamental: 0.9; valuation: 2.4) saw its net profit for the second quarter ended Oct 31, 2015 (2QFY16) dip 20.1% to RM122.26 million or 2.47 sen per share, from RM153.08 million or 3.13 sen per share a year ago.
In a filing with Bursa Malaysia today, the group said the lower net profit was due to the full effect of the non-consolidation of Berjaya Auto Bhd (BAuto) in the marketing of consumer products and the services segment, and the lower profit contribution from Sports Toto Malaysia Sdn Bhd (STM)'s toto betting operations.
Revenue for the quarter decreased 12.4% to RM2.26 billion, from RM2.58 billion in 2QFY15.
For the six-month period (1HFY16), net profit rose 10.6% to RM178.39 million or 3.67 sen per share, from RM161.36 million or 3.37 sen per share in the previous year.
Revenue for the period, however, decreased 13.2% to RM4.39 billion, from RM5.06 billion in 1HFY15.
Moving forward, the group expects the operating environment to be challenging for the remaining quarters of FY16.
Shareholders of fingerprint verification products marketer PUC Founder (MSC) Bhd (PUCF) has approved its venture into the renewable energy (RE) business, at an extraordinary general meeting (EGM) today.
Group managing director Cheong Chia Chieh said that moving forward, the RE business can be a core business of the company.
Along with the approval for its diversification, its shareholders also approved the proposed rights issue to fund its expansion plans for its new business segment.
To recap, the company has already completed the construction of MaxGreen 1, its 1MW solar photovoltaic (PV) plant in Sungai Petani, Kedah.
Cheong also said the plant has been completed and is generating electricity, but contributions will only come in during the first quarter of next year.
On average, a 1MW plant would be able to contribute over RM1 million in revenue, at minimum cost of operation, according to him.
Kim Teck Cheong Consolidated Bhd (KTC Consolidated) said it is not aware of any reason for the unusual market activity (UMA) that resulted in the sharp rise in price and volume of its shares recently.
In its reply to an UMA query by Bursa Malaysia today, it said there has not been any corporate development related to its business and affairs that has not been previously announced, that may account for the trading activity.
The Sabah-based consumer packaged goods distributor added that there is no rumour or report concerning the group's business and affairs that may account for the unusual trading activity.
Air and water filter manufacturer Raya International Bhd (fundamental: 0.65; valuation: 0.0) is collaborating with Tumpuan Megah Development Sdn Bhd to jointly explore and develop the business of bunkering services for petroleum-based products.
In a filing with Bursa Malaysia, Raya International said its 51%-owned subsidiary, Selatan Bunker (M) Sdn Bhd, had entered into a collaboration agreement with Tumpuan Megah today.
Raya International further explained that the business involves the provision of bunkering services for marine fuel, petroleum and petroleum-based products, comprising the operations, as well as marketing and sales of bunkering services in Pasir Gudang Port area; and works on mutually-agreed projects in this area.
Both Tumpuan Megah and Selatan Bunker will share all resources available to each of them, including making available their employees where required, to the other party, to ensure the objectives of the business collaboration is achieved.
Under the agreement, each party shall be responsible for its own costs incurred in performing its obligations under the collaboration agreement.
The agreement shall be for a period of one year, and renewable for a subsequent period of one year.
(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.)