KUALA LUMPUR (Jan 28): Based on corporate announcements and news flow today, the companies that may be in focus tomorrow (Friday, Jan 29) could include the following: Axiata, Tropicana, Pintaras Jaya, TM, Tenaga, ES Ceramics, Perstima, Spritzer, MPI, Homeritz, Chin Teck, WZ Satu and Kejuruteraan Samudera.

Axiata Group Bhd is planning to merge its 91.59%-owned unit, Robi Axiata Ltd, with India's Bharti Airtel Ltd's subsidiary Airtel Bangladesh Ltd to strengthen Axiata's position in the mobile internet segment in Bangladesh.

The proposed merger will also consolidate Axiata's position as the second largest operator in Bangladesh, according to Axiata's statement today.

Axiata has signed a definitive agreement with Bharti Airtel to effect the proposed merger, which will be satisfied through the issuance of new ordinary shares of BDT10 each in Robi to Bharti Airtel, for a shareholding of up to 25% plus one Robi share, on a fully diluted basis of the combined entity of Robi and Airtel Bangladesh.

Post-merger, Axiata will hold 68.3% in the combined entity, while Bharti Airtel will hold 25%. The remaining 6.7% will be held by Robi's existing shareholder, NTT DoCoMo of Japan.

The proposed transaction is expected to be completed in the first half of 2016.

Property developer Tropicana Corp Bhd, controlled by tycoon Tan Sri Danny Tan, is disposing of the Dijaya Plaza office building at Jalan Tun Razak here to Kenanga Investment Bank Bhd for RM140 million cash, which will be used for working capital and/or to repay borrowings.

In a statement, Tropicana said the asset sale comprises a piece of freehold land measuring approximately 3,674 sq m, together with an en-bloc 19-storey office tower with two levels of basement car park containing 322 parking bays. The building is approximately four years old.

The building, with a total net lettable area of 156,488 sq ft, is currently 70% occupied.

Following the disposal of Dijaya Plaza, Tropicana said the cash inflow is expected to improve the group's financial position by freeing up net proceeds of RM51.6 million.

Construction engineering firm Pintaras Jaya Bhd's unit Pintaras Geotechnics Sdn Bhd has bagged a RM67.6 million contract from I-Bhd for provision of earthworks and piling works.

In a filing with Bursa Malaysia today, Pintaras Jaya said the contract, to be completed in 14 months, is to provide earthworks, piling and sub-structure works for Central Tower Project in i-City, Shah Alam.

Packet One Networks (Malaysia) Sdn Bhd (P1), a subsidiary of Telekom Malaysia Bhd (TM), will soon be able to provide domestic roaming services via a collaboration with Celcom Axiata Bhd.

In return, Celcom will have access to enhanced network facilities and infrastructure provided by TM.

In a bourse filing today, TM said it has entered into a domestic roaming services and facilities agreement with P1 and Celcom to effect the roaming arrangement.

TM also entered into a memorandum of agreement for the next phase of infrastructure collaboration comprising TM Next-Gen Backhaul Services and TM's high-speed broadband (access) with Celcom, Celcom Mobile Sdn Bhd and Celcom Networks Sdn Bhd for the infrastructure collaboration.

National utility company Tenaga Nasional Bhd (TNB) saw its net profit fall 16% to RM1.98 billion or 35.01 sen per share for the first quarter ended Nov 30, 2015 (1QFY16), from RM2.35 billion or 41.67 sen per share in the previous year, due to the recognition of the imbalance cost pass through (ICPT) and foreign exchange translation loss.

Revenue for the quarter was 3% lower at RM10.68 billion compared to RM11.03 billion a year earlier, its bourse filing today showed.

The group noted that the reduction in profit is mainly due to the recognition of ICPT in the current reporting period and the strengthening of the US dollar and Japanese yen against the ringgit.

Meanwhile, TNB said the sales of electricity for the period rose 3.9% to RM11.18 billion from RM10.76 billion, mainly due to a 3.6% sales increase in Peninsular Malaysia electricity sales.

Glove formers maker ES Ceramics Technology Bhd saw its net profit for the second quarter ended Nov 30, 2015 (2QFY16) jump 32% to RM1.83 million or 0.9 sen per share from RM1.39 million or 0.7 sen per share a year ago, in tandem with the increase in revenue.

Revenue for 2QFY16 grew 7% to RM7.66 million from RM7.14 million in 2QFY15.

For the half year of FY16 (1HFY16), ES Ceramics' net profit climbed 31.4% to RM3.3 million or 1.6 sen per share, from RM2.5 million or 1.3 sen per share in the previous year, helped by continuous cost improvement, better product mix and higher output volume.

Cumulative revenue came in 7.9% higher at RM14.3 million compared with RM13.3 million in 1HFY15.

The country's sole tin plate manufacturer Perusahaan Sadur Timah Malaysia Bhd (Perstima) saw its net profit for the third financial quarter ended Dec 31, 2015 (3QFY16) jump 26% to RM14.33 million from RM11.4 million a year ago, on higher sales volume despite lower selling price.

Revenue for 3QFY16 increased 25.4% to RM208.72 million from RM166.39 million in 3QFY15.

For the cumulative nine months ended Dec 31, 2015 (9MFY16), net profit surged 50.6% to RM37.72 million from RM25.04 million a year ago.

Revenue also rose 12.4% year-on-year to RM543.88 million from RM483.83 million in the previous corresponding period.

Natural mineral water manufacturer Spritzer Bhd saw its net profit for the second quarter ended Nov 30, 2015 (2QFY16) surge 113.54% to RM7.41 million or 5.12 sen per share, from RM3.47 million or 2.52 sen a year ago, on higher sales and lower packaging material costs.

Revenue rose 13.43% to RM65.62 million, from RM57.85 million, mainly due to higher sales of bottled water products and packaging materials, and better average selling prices.

For the six months ended Nov 30, 2015 (1HFY16), Spritzer's net profit was at RM14.7 million or 10.16 sen per share, up 45.11% from RM10.13 million or 7.38 sen per share a year ago. 1HFY16's revenue rose 10.03% to RM132.28 million, from RM120.22 million.

Semiconductor company Malaysian Pacific Industries Bhd (MPI) saw its net profit for the second quarter ended Dec 31, 2015 (2QFY16) soar 36.9% to RM32.93 million or 17.34 sen per share, due to wider margin products, stronger US dollar and lower material cost.

It posted a net profit of RM24.06 million or 12.67 sen per share in the previous corresponding quarter.

Quarterly revenue grew 12.23% to RM379.69 million, from RM338.29 million in 2QFY16, mainly driven by revenue growth from Asia, the US and Europe.

For the half year of FY16 (1HFY16), MPI's net profit surged 81.6% to RM79.85 million or 42.04 sen per share, from RM43.97 million or 23.16 sen per share last year, helped by the firm US dollar and wider profit margin.

Cumulative revenue came in 15.06% higher at RM766.34 million, against RM666.01 million in 1HFY15.

Moving forward, MPI expects the operating environment to remain challenging, as the semiconductor industry is experiencing slower growth, coupled with uncertainty in the macro economy.

Furniture manufacturer Homeritz Corp Bhd registered a net profit of RM8.89 million for the first quarter ended Nov 30, 2015 (1QFY16), double the RM4.26 million seen a year ago, due to higher sales and the stronger US dollar.

Earnings per share stood at 2.96 sen, compared to 1.42 sen a year earlier.

Revenue grew 21.88% to RM40.67 million from RM33.37 million in 1QFY15.

Announcing its financial results to Bursa Malaysia today, Homeritz said it is operating in global economic uncertainties as well as facing increases in raw materials costs and fluctuation in foreign exchange rates.

Given the above scenario, the group will continue to remain focused in its core business of design, manufacture, and sale of upholstered home furniture.

Palm oil cultivator Chin Teck Plantations Bhd expects to register smaller profits in the near term due to its ongoing oil palm replanting activities and losses incurred by its Indonesian associate, assuming crude palm oil (CPO) prices remain weak.

Its executive vice chairman Goh Wei Lei said today that over 40% of the group's oil palm plantations now are aged above 21 years.

Chin Teck has oil palm estates in Pahang, Kelantan and Negeri Sembilan, with a total 11,327 ha of planted land area. It has replanted 846 ha or 7.5% of its oil palms in 2015, and plans to replant 960 ha or 8.5% more this year.

Goh, who was speaking to reporters today after the group's annual general meeting, also attributed Chin Teck's weaker earnings recently to CPO prices, which have been relatively weak in the past two years.

WZ Satu Bhd, which has an exclusive mining contract to mine bauxite ore in Kuantan, aims to match the last financial year's profit for its mining segment in the current financial year ending Aug 31, 2016 (FY16), driven by improved productivity post-moratorium.

Its chief executive officer Tengku Datuk Seri Uzir Ubaidillah said although the three-month ban on production will affect the group negatively in the short term, due to operational costs in terms of idle machines and manpower, WZ Satu is confident that it will be able to recoup the lost revenue through increased productivity after the moratorium.

At a press conference after the group's annual general meeting today, Uzir said he believes that this three-month moratorium would be beneficial for WZ Satu because it would weed out the ones that are non-conforming to regulations.

Once WZ Satu is allowed to continue production and sales in April, Uzir said he hopes the group can recover the loss in these three months by being more productive.

Practice Note 16 (PN16) company Kejuruteraan Samudra Timur Bhd (KSTB) is proposing a regularisation plan that will pave the way for the company to venture into power generation in Sabah, a capital repayment, followed by a management buyout.

In a bourse filing, KSTB and the substantial shareholders of Sepangar Bay Power Corporation Sdn Bhd (SBPC) - have agreed to negotiate the proposed acquisition of SBPC with the intention to finalise and enter into definitive agreements within 60 days.

SBPC has been granted the right to construct, own and operate a 100-MW combined-cycle gas turbine power plant in Kota Kinabalu, Sabah, under a power purchase agreement with Sabah Electricity Sdn Bhd, which expires on Aug 11, 2029.

KSTB also plans to distribute substantially the cash it retained through either a capital reduction exercise or a combination of capital reduction and dividend payment to reward existing shareholders.

To facilitate the capital repayment, KSTB may undertake a proposed bonus issue of new ordinary shares of 30 sen each.

KSTB then intends to set up a new private limited company (NewCo) to acquire the entire issued and paid-up share capital of KSTB from its shareholders by way of a share exchange exercise.

The NewCo shall then buy up SBPC — at a price to be fixed — with the issuance of new shares. KSTB shall concurrently transfer its listing status to the NewCo after it has been converted into a public company.

There would be a proposed management buyout of all the equity interest in KSTB by the current management of KSTB, which is headed by Darmendran Kunaretnam and Chee Cheng Chun, after the relevant proposals are carried out.

(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.)