KUALA LUMPUR (Sept 28): Based on corporate announcements and news flow today, the companies that may be in focus tomorrow (Tuesday, Sept 29) could be the following: Asdion, MMC Corp, Gamuda, Ho Hup Construction Company, Takaso, Octagon, A-Rank, Tadmax, RHB Capital, Pentmaster Corp, Muar Ban Lee, Cypark Resources and E&O.
Ho Hup Construction Company Bhd clinched a RM21.6 million subcontract for soil improvement work at the Refinery and Petrochemical Integrated Development (RAPID) project in Pengerang, Johor.
In a filing with Bursa, Ho Hup said today that the company was awarded the contract by Sinopec Engineering Group (Malaysia) Sdn Bhd (SEGM), the main contractor of PRPC Refinery and Cracker Sdn Bhd, via a letter of award dated Sept 23, 2015.
SEGM is a subsidiary of Sinopec Group, the leading oil refining, petrochemical and chemical engineering group based in China.
The job is expected to commence next month and will be completed over four months.
The company said the contract is in the best interest of the company after considering the potential financial contribution to the earnings of the company, amongst others.
“This maiden contract in Petronas’ RAPID project will put the group in a good and competitive position for other infrastructure and construction projects we have tendered for in Pengerang, Johor,” said Ho Hup chief executive Derek Wong Kit Leong in a separate statement.
Asdion Bhd announced that Tengku Azlan Ibni Sultan Abu Bakar, Datuk Yen Soon Ai and Datuk Mohamed Ridzuan Nor MD resigned last Saturday.
In its Bursa filings today, the computer software specialist said former chairman Tengku Azlan, and the two former executive directors Yen and Mohamed Ridzuan did not give reasons for their resignations.
They were supposed to stand for re-election today at Asdion’s annual general meeting.
Their resignations followed a recent announcement on Asdion’s higher audited net loss for financial year ended March 31, 2015 (FY15) compared to the unaudited figures.
Asdion told the exchange on Sept 1 this year its FY15 audited net loss was RM2.81 million versus the unaudited net loss of RM2.07 million.
“The deviation is mainly due to wrong calculation of the non-controlling interests for newly acquired subsidiary,” Asdion said then.
MMC Corp Bhd's wholly-owned subsidiary, Senai Airport City Sdn Bhd (SACSB), has leased 24.75 acres of its industrial land to Japanese food products supplier Fuji Oil Asia Pte Ltd, for RM53.9 million.
Fuji Oil Asia, which is part of the Fuji Oil Group, entered into a lease agreement with SACSB for 60 years to construct and operate its manufacturing facility, said MMC Corp in a statement today.
Headquartered in Japan, Fuji Oil Asia is a global supplier of intermediate food ingredients, particularly specialty oils and fats, confectionery and bakery, soy protein and its related consumer food products.
The facility will be its largest outside Japan and is located adjacent to its major client: US-based confectionary Hershey’s largest chocolate manufacturing facility outside of North America.
SACSB is the master developer of the 2,718 acre integrated industrial development known as Senai Airport City, with various industrial segments such as free industrial zone, hi-tech and general manufacturing, aerospace maintenance, repair and overhaul (MRO) as well as logistics and mixed development, which are currently being developed in phases with 40% completed to date.
According to the statement, MMC Corp is leveraging to capitalise on the sale and/or lease of its strategic property assets in Johor, comprising almost 5,000 acres of industrial land in both Senai Airport City and the Tanjung Bin Petrochemical & Maritime Industry Centre developments.
It is also looking to unlock the values of almost 500 acres of pockets of lands and buildings mainly in the central and northern states to support its revenue growth in the next five years.
Consumer product manufacturer Takaso Resources Bhd’s net loss widened to RM4.88 million for its fourth quarter ended July 31, 2015 (4QFY15) from RM3.01 million in 4QFY14.
On a cumulative full year basis, its annual net losses for the financial year ended July 31, 2015 widened to RM7.99 million from RM5.95 million in the previous year.
"The increase was mainly due to additional impairment loss on plant and machinery of RM1.5 million and impairment loss on receivables of RM820,000 during the current quarter and cumulative period under review compared with the corresponding quarter and cumulative period ended 31 July 2014," said Takaso in a filing with Bursa today.
Revenue contracted 20% to RM6.35 million from RM7.94 million previously due to the slowdown in its computer accessories business.
Full year revenue was weaker at RM36.76 million, down 2.1% from RM37.56 million a year ago.
The lower revenue was caused by a slowdown in cathode ray tube glass business and trading in consumable products despite improvements in its electrical and mechanical products and computer accessories segment.
The company has been facing challenges in its core business of manufacturing and marketing of condoms and baby products as raw material prices and operational cost rose over the last few years.
Bursa Malaysia will proceed to delist Practice Note 17 company Octagon Consolidated Bhd from its Official List of Securities tomorrow, despite the company's appeal.
In its filing with Bursa today, Octagon said that Bursa has informed the company that the decision of its listing committee is final, and reiterated that the securities of the company will be removed from the official list of Bursa Securities tomorrow.
Octagon submitted a letter of appeal to Bursa Malaysia last Friday, appealing against its delisting and seeking approval from the regulator for an extension of time, up to 60 days, from the date of the letter of appeal to submit its proposed regularisation plan.
Trading in the securities of Octagon was suspended on Nov 27, 2013. It last traded at seven sen for a market capitalisation of RM11.7 million.
Aluminum billets manufacturer A-Rank Bhd saw its net profit for the fourth quarter ended July 31, 2015 (4QFY15) climbed 32.8% to RM3.98 million from RM2.99 million a year ago, due to the overprovision of deferred taxation in prior years.
Earnings per share expanded to 3.31 sen from 2.49 sen.
However, A-Rank announced to Bursa today that its revenue for the quarter fell 6.4% to RM115.48 million from RM123.35 million in the same corresponding period.
The company explained the decline in revenue was due to lower business volume although average selling prices were higher as a result of the increase in raw material cost.
A-Rank has proposed a first and final single-tier dividend of 2.25 sen per share, amounting to RM2.7 million, for FY15.
For FY15, A-Rank's net profit rose 8.63% to RM10.32 million, or 8.6 sen per share, against RM9.5 million, or 7.92 sen per share, a year earlier.
Revenue was almost flat at RM485.95 million compared with RM487.3 million in FY14.
A-Rank said the volatility of aluminium prices and weak ringgit has had adverse impacts on its profit margins and the increase in natural gas pricing from July 1 has also added further pressure to margins.
Barring unforeseen circumstances, the company said it is "optimistic" to remain profitable for the forthcoming quarter.
Tadmax Resources Bhd is divesting its entire stake in wholly-owned Usama Industries Sdn Bhd to individuals Phua Bok Chuan and Nai Kin Nai Chooi for RM1.99 million.
Tadmax entered into a share sale agreement for the proposed divestment aimed at realising the net assets value of an inactive entity.
Property developer Tadmax added that the proceeds from the sale will be channelled to working capital purposes, including overhead expenditure.
It does not expect the sale to have any material impact on the company’s earnings and net assets for the financial year ending Dec 31, 2015.
Usama Industries’ primary activity was the extraction and trading of timber logs, but the company has been dormant since July 2010 after the expiration of its timber concession in Kapit, Sarawak.
Tadmax’s original cost of investment in Usama Industries was RM200,000 in August 1993. The original cost of investment was reduced by RM100.08 million following the payment of dividend out of pre-acquisition profits during the financial year ended Dec 31, 2005.
Abu Dhabi state fund Aabar Investments may refuse to invest in a RM2.5 billion (US$565 million) rights issue by RHB Capital, Reuters reported.
RHB announced the rights issue in April to support its growth and meet regulatory requirements for capital. Aabar owns about 21.09% of the bank group.
But three sources with knowledge of the matter told Reuters in the last few days that Aabar was unlikely to buy into the offer partly because it was disappointed by the performance of its investment in RHB as Malaysia’s currency and financial markets sag.
A Malaysian investment banker who requested anonymity said Aabar was not happy with their RHB investment and will not subscribe.
Penang-based Pentamaster Corp Bhd is proposing to acquire Origo Ventures (M) Sdn Bhd, a property project management company for RM5.78 million.
In its Bursa filing today, Pentamaster said that it entered into a sale and purchase agreement to acquire two ordinary shares, representing a 100% stake in Origo from Sulaiman Ahmad and Sabariah Ahmad.
“Origo is headed by an experienced general manager that has more than 14 years of architecture and property project management experience that span across major Malaysian property companies, namely Sunway Bhd, TRC Development Sdn Bhd, Talam Corporation Bhd and IOI Properties Bhd," said the global manufacturing industries automation solutions provider.
On April 15, Origo was contracted by by Maarij Development Sdn Bhd to project manage a mixed development project measuring about 9.88 acres in the new township of Tunjong, Jajahan Kota Bharu, Kelantan.
The gross development value is approximately RM164 million, and the total remuneration for the project management agreement shall equate to 60% of the net profit generated from the development.
To date, Origo has an outstanding billing of approximately RM3 million to Maarij, upon the completion of stages of work done.
The proposed acquisition is expected to be financed through Pentamaster's internally generated funds. Upon the completion of the proposed acquisition, the group also stands to gain financially from Origo's existing contract, it said.
Muar Ban Lee Group Bhd's (MBL) wholly-owned unit Muar Ban Lee Engineering Sdn Bhd (MBLE) is subscribing to a 51% stake in PT Serdang Jaya Perdana (SJP), which is IDR 15.3 billion or RM4.57 million, to venture into the upstream industry of palm kernel oil processing and manufacturing.
In a Bursa filing today, MBL said that MBLE today subscribed to a new additional allotment of IDR 15.3 billion paid up share capital in SJP at par value, equivalent to 51% shareholdings, to be satisfied in cash generated internally.
Pursuant to the subscription, SJP will become a subsidiary of MBLE. The purchase was arrived on a willing buyer-willing seller basis after taking into consideration the audited consolidated net assets of SJP as at Dec 31, 2014 and the potential earnings of SJP.
The subscription will be completed within 60 days.
MBLE is principally involved in manufacturing and trading in all kinds of machinery, tools, plants, hardware, building materials, accessories and engineering requisites, while SJP operates a palm kernel crushing plant where crude palm kernel oil is extracted from palm kernel.
Gamuda Bhd's net profit declined 25.4% to RM153.68 million in the fourth quarter ended July 31, 2015 (4QFY15) from RM205.89 million a year ago, mainly due to the completion of the electrified-double tracking railway.
In the filing to Bursa filing, the construction company said its revenue rose 5.28% to RM623.27 million from RM592 million a year ago.
The earnings per share (EPS) was 6.39 sen versus 8.89 sen.
For the full year of FY15, Gamuda's net profit fell 5.2% to RM682.1 million from RM719.4 million. Annual EPS decreased to 28.94 sen from 31.29 sen.
Revenue was at RM2.4 billion, a slight increase of 7.62% compared with RM2.23 billion in FY14.
Gamuda attributed the increase in revenue to higher contribution from Kesas Sdn Bhd as a result of the additional stake in the concessionaire of Shah Alam Expressway.
Moving forward, the group anticipates a good performance next calendar year from ongoing construction projects and steady earnings from the water and expressway concessions division.
"However, with the softening residential and non-residential property market, weaker growth for the property division is expected over the coming quarters," it added.
Gamuda's share price has fallen from a peak of RM5.15 in May to a 28-month low of RM3.85 last month.
Lembaga Tabung Haji (LTH) has raised its stake in Cypark Resources Bhd to 10.17%, from 8.52%, after purchasing four million shares over a four-day trading period last week.
In its Bursa Malaysia announcement today, Cypark Resources said LTH bought total of four million shares between Sept 21 and Sept 25. The transaction price is not revealed.
This raised LTH’s total shares in Cypark Resources to 24.58 million shares.
Year-to-date, the share price of Cypark Resources, which provides integrated environmental engineering services such as landfill restoration and waste water management treatment, has dropped by 21.4% or 46 sen.
Property developer Eastern & Oriental Bhd (E&O) said today the construction of the infrastructure at the 54.63ha freehold land in Elmina West will be carried out over the next three years.
In a filing to Bursa, the company said the full payment of RM192.75 million for the parcel of land acquired from Sime Darby Elmina Development Sdn Bhd, an indirect wholly-owned subsidiary of Sime Darby Bhd, was completed today.
E&O said Sime Darby Elmina Development will continue the construction work on the land, while instalment payments are settled.
According to the sale and purchase agreement, E&O had said 90% the construction sum of RM47.04 million will be paid in equal quarterly instalments, over the construction period.
E&O entered into a sales and purchase agreement (S&P) agreement with Sime Darby Elmina Development on July 4, 2014, for the development of a wellness and liveable city. It acquired the land from Sime Darby Elimina for RM239.8 million.
Under the agreement, E&O would share 20% of the proceeds with Sime Darby, should the value exceed the baseline GDV.
(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.)