KUALA LUMPUR (Dec 14): Based on corporate announcements and news flows today, companies in focus tomorrow (Tuesday, Dec 15) could include: Tenaga Nasional, George Kent (Malaysia), DRB-Hicom, CIMB Group, NTPM Holdings, E.A. Technique, StemLife and Handal Resources.
Tenaga Nasional Bhd (TNB) (Valuation: 1.20, Fundamental: 1.30) has signed a share sale agreement (SSA) and shareholders agreement to invest in a 30% stake in Turkish power company GAMA Enerji A.S. for US$243 million (RM1.06 billion).
TNB said it has entered into a conditional SSA with GAMA Holding A.S, International Finance Corporation (IFC) and GIF Holding I Cooperatief U.A. to purchase 289.49 million sale shares in GAMA Enerji.
Upon completion of the proposed acquisition, GAMA Holding will have a 50.5% stake in GAMA Enerji, followed by TNB with a 30% stake, IFC with a 14.5% stake, and GIF with a 5% stake.
TNB said the partnership will give the group two seats on GAMA Enerji’s board with extensive control rights, as well as the opportunity to place key senior TNB professionals, particularly in finance, operations and maintenance, in GAMA Enerji’s management.
GAMA Enerji is a power and water infrastructure development company which owns and operates a large and well-balanced portfolio of thermal, wind and hydro assets in Turkey, as well as a large water conveyance project in Jordan.
George Kent (Malaysia) Bhd (Valuation: 1.40, Fundamental: 2.10) saw its net profit surge 67.02% to RM12.07 million in the third financial quarter ended Oct 31, 2016 (3QFY16), from RM7.23 million a year ago, underpinned by the effect of foreign exchange rate on export sales.
The metering and engineering company said revenue for 3QFY16 was up 0.94% to RM96.94 million, from RM96.03 million in 3QFY15.
It also declared a second interim dividend of 1.5 sen per share, amounting to RM4.51 million, for the financial year ending Jan 31, 2016 (FY16), payable on Jan 26, 2016.
For the cumulative nine-month period (9MFY16), the group’s net profit jumped 53.62% to RM30.41 million, from RM19.8 million a year ago. Revenue for 9MFY16 also rose 14.7% to RM270.62 million, from RM235.93 million in 9MFY15.
The group attributed the positive results to the increased contributions from its engineering and metering divisions and the spillover effects from the weakened ringgit, as the majority of metering export sales are denominated in US dollars.
As of Oct 31, the group’s order book stood at RM5.5 billion.
Although the Light Rail Transit Line 3 project is not expected to have any significant effect on the earnings of the group for FY16, it is expected to contribute positively to its future earnings.
DRB-Hicom Bhd (Valuation: 2.00, Fundamental: 0.00) has appointed Datuk Sri Syed Faisal Albar bin Syed Ali Rethza Albar as group chief executive officer (CEO) effective Jan 4, 2016, replacing the outgoing group managing director (MD) Tan Sri Mohd Khamil Jamil.
Syed Faisal was previously CEO of Malakoff Corp Bhd (Valuation: N/A, Fundamental: N/A), Gas Malaysia Bhd (Valuation: 1.10, Fundamental: 2.10), and New Straits Times Press (Malaysia) Bhd.
He was also the former executive director of Konsortium Logistik Bhd and group MD of Pos Malaysia Bhd (Valuation: 1.40, Fundamental: 2.20).
Mohd Khamil, who will reach the retirement age of 60 in January next year, will relinquish his position as group MD of the company on March 1, 2016, and Syed Faisal will assume overall management responsibility and control of DRB-Hicom, according to the group's announcement.
CIMB Group Holdings Bhd (Valuation: 1.65, Fundamental: 0.55) has appointed Mohamed Rafe Mohamed Haneef as chief executive officer (CEO) and executive director of CIMB Islamic Bank Bhd, and the CEO of group Islamic banking division from Jan 4, 2016, filling the post which was left vacant after the resignation of Badlisyah Abdul Ghani in August this year.
The bank was led temporarily by Mohd Shafri Shahul Hamid, prior to Rafe's appointment.
"Rafe is a proven leader, with a deep and broad understanding of Islamic banking, having been an Islamic banker for the last 15 years and [having] worked in multiple financial centres around the world," said CIMB group's chief executive Tengku Datuk Seri Zafrul Aziz in a statement.
Rafe's appointment confirmed a report by The Edge Financial Daily on Sept 23, which had tipped Rafe as the new CEO of CIMB Islamic, after helming HSBC Amanah Malaysia Bhd for almost five years.
According to CIMB, Rafe has specialised in Islamic banking in the last 15 of his 20-year career and has worked in major financial markets, including London, Dubai and Kuala Lumpur.
He is also a member of the Malaysian Bar and the New York State Bar, as well as a SFA-registered securities representative of the UK.
NTPM Holdings Bhd’s (Valuation: 0.5; Fundamental: 1.30) net profit for the second quarter ended Oct 31, 2015 (2QFY16) soared 85% to RM17.04 million or 1.5 sen per share, from RM9.19 million or 0.8 sen per share the previous year, due to improvements in sales and margin.
Revenue for the quarter rose 10.6% to RM152.63 million, from RM138.09 million a year earlier, due to increase in sales of personal care products.
For the six months ended Oct 31, 2015 (1HFY16), net profit rose 84.9% to RM29.96 million or 2.7 sen per share, from RM16.2 million or 1.4 per share in 1HFY15; while revenue added 9.5% to RM296.03 million, from RM270.34 million.
On a segmental basis, its paper products segment saw a 5.4% year-on-year increase in revenue to RM200.9 million, from RM190.6 million; while pre-tax profit rose 66.7% to RM32.1 million, from RM19.3 million, on higher sales and improved margins.
Meanwhile, its personal care products segment posted a revenue of RM95.1 million, up 19.3% from RM79.7 million a year earlier; while net profit close-to-tripled to RM9 million, from RM3.1 million in the previous year.
Going forward, the group said the next financial year will continue to present challenges due to high inflation, volatile currency and the implementation of Goods and Services Tax (GST) effective April 1, 2015.
E.A. Technique (M) Bhd (Valuation & Fundamental: N/A) has teamed up with MTC Engineering Sdn Bhd (MTCE) to undertake floating services operation and its related ancillary activities.
In a filing with Bursa Malaysia, E.A. Technique said this is in line with the group's expansion plan, as well as to strategically expand its venture into floating solutions for marginal oil fields for the oil and gas sector.
The group signed a conditional joint venture (JV) and shareholders' agreement with MTCE to, inter-alia, subscribe to the equity of EAT MTC Floating Services Sdn Bhd (EMF), a dormant company.
Under the JV, E.A. Technique will have a 73% stake in EMF, while the remaining 27% will be held by MTCE.
E.A. Technique intends to fund the financial commitment under the proposed JV, through internal funds and/or borrowings, but the exact combination will be determined at a later date.
The takeover offer for StemLife Bhd (Valuation: 0.00, Fundamental: 1.95) by its largest shareholder, Singapore's Cordlife Group Ltd (Valuation: 2.10, Fundamental: 1.55), at 45 sen cash per share, has been deemed “fair and reasonable" by its independent adviser.
Mercury Securities Sdn Bhd has given a fair and reasonable opinion on the offer by Cordlife, as the offer price represents a premium of 4.65% to 7.14% over the fair value range of the shares, according to the group’s filing to Bursa Malaysia.
Based on the sum-of-parts valuation (SOPV) methodology, the firm had come up with a fair value ranging from RM105.1 million to RM107.3 million, or 42 sen to 43 sen per share.
The independent adviser added that the offer price is equal or higher than the closing market price of StemLife shares, for 85% of the total market days, over the past five years.
Mercury Securities deemed the offer reasonable, considering StemLife's shares are illiquid, with a simple average monthly trading volume-to-free float for the past one year up to October 2015 of 2.88%, compared with the Kuala Lumpur Services Index of 12.92% in the same period.
Accordingly, Mercury Securities has recommended for StemLife shareholders to accept Cordlife's offer, which will remain open for acceptances till Dec 28.
Cordlife currently holds 124.86 million StemLife shares or a 50.45% stake in the company
Handal Resources Bhd (Valuation: 1.10, Fundamental: 1.00) is teaming up with the investment arm of the Kelantan state government and a special purpose vehicle (SPV), to undertake the development and implementation of a tank farming project in Kelantan.
In a filing with Bursa Malaysia, Handal said its wholly-owned subsidiary Handal Engineering Sdn Bhd (HESB) has signed a heads of agreement (HOA) with Perbadanan Menteri Besar Kelantan (PMBK) and SPV Tirai Dimensi Sdn Bhd for the proposed project.
"The rationale for the HOA is to accommodate the intention of the (three) parties to work together for the purpose of undertaking the development and implementation of a tank farming project in Kelantan, in accordance with the terms of the HOA," said Handal.
Under the HOA, HESB will provide financing and undertake the construction of the tank farm, while PMBK will facilitate land acquisitions and other local or state government related matters. Tirai Dimensi, meanwhile, will provide expertise and experience for the successful implementation of the proposed project.
(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.)