Wednesday, July 12th, 2017

 

Securitas CEO declared `bankrupt’ after identity theft

STOCKHOLM, July 12 — The man running Sweden’s biggest security firm was declared bankrupt this week after his identity was hacked. Though the sub-optimal branding implications were hard to miss, Securitas AB was able to put the whole awkward…


Yellen sees inflation key uncertainty amid moderate growth

WASHINGTON, July 12 — Federal Reserve Chair Janet Yellen said the US economy should continue to expand over the next few years, allowing the central bank to keep raising interest rates, while also stressing the Fed is monitoring too-low…


India’s June inflation slowest in more than five years

NEW DELHI, July 12 — India’s annual retail inflation eased in June to its slowest pace in more than five years, as food prices fell, building pressure on the central bank to cut interest rate when it meets for a monetary policy review on Aug…


Bank of Canada raises rates, says data will decide future moves

OTTAWA, July 12 — The Bank of Canada raised interest rates for the first time in nearly seven years today, citing confidence in its outlook and a need to look through soft inflation, but said it will wait for more economic data before committing…


US stocks gain on higher oil, Yellen remarks

NEW YORK, July 12 — Wall Street stocks rose early today as Federal Reserve Chair Janet Yellen pledged a “gradual” approach to additional interest rate increases. Yellen, in prepared testimony ahead of a congressional hearing, said she…


Ranhill relocates corporate HQ from KL to Johor Baru

KUALA LUMPUR: Ranhill Holdings Bhd has relocated the current corporate headquarters in Kuala Lumpur to Johor, in a bid to strengthen its core business in the southern region and Sabah and Sarawak.

This will see a significant improvement in organisational and operational efficiencies for the group in the country.

Johor Baru is the site of its largest operating centre, SAJ Ranhill Sdn Bhd, followed by others in Kota Kinabalu, Sabah, and various third-tier cities in China.

Ranhill president and chief executive Tan Sri Hamdan Mohamad said streamlining operations will enable its businesses to progress to the next level. While rising operational costs in Kuala Lumpur contributed to the move to a certain degree, there is also immense potential to be tapped in Johor Baru, which has seen tremendous development over the past decade, he said.

“By relocating, the group can adopt a more agile organisational structure. Being closer to our three main operating sites will also support our aim to be more relevant and responsive to our businesses and key external stakeholders.

“In addition, the move will allow us to have a more efficient cost management structure in place and further develop talent as we strive for operational excellence at our three operating centres,” Hamdan said in a statement.

Through SAJ Ranhill, the group is currently the exclusive water operator for Johor, providing water supply services to the second most populous state in Malaysia. It remains the group’s key business given its mandate as the sole water service provider in Johor, contributing almost 75% to Ranhill’s total revenue in FY2016.

Over the years, SAJ Ranhill has consistently fulfilled key performance indicators set by the National Water Services Commission (SPAN) since the migration to a licensing regime for water supply services in 2009.

The group expects to see further growth on the back of increasing demand for water in Johor, particularly given new housing developments and industrial areas.

In December 2016, SAJ Ranhill inked a memorandum of understanding with Indah Water Konsortium to conduct a joint review on the joint billing exercise with the intention to pursue the integration of water and sewerage services in Johor, which is expected to contribute to the group’s profitability.


Semiconductor boom bodes well for Frontken: HLIB Research

PETALING JAYA: Hong Leong Investment Bank (HLIB) Research has issued a non-rated call on Frontken Corp Bhd with a fair value of 45 sen, and said the group’s semiconductor division is expected to be its major growth driver, leveraging on the booming semiconductor industry.

The company’s shares closed trading up 2 sen to 34.5 sen yesterday, on 21.29 million shares done. It has a market capitalisation of RM361.56 million.

Frontken provides surface metamorphosis and mechanical engineering solutions, serving a wide range of heavy industries.

Its treatment technology modifies material surfaces with unique properties to improve performance, increase efficiency, reduce maintenance cost and extend lifetime.

In a note yesterday, the research house analyst Tan J Young said based on the World Semiconductor Trade Statistics’ latest May data, year-to-date 2017 (YTD17) global sales of semiconductor was even stronger than forecast.

He said that this bodes well for Frontken as its subsidiary Ares Green Tech Corp (AGTC) had expanded seven new production lines in FY16.

“AGTC will be focusing more on foundries with capabilities of 28nm and below which will yield healthier margins at the expense of volume,” he noted.

Tan said the group’s oil and gas (O&G) segment remains its major contributor but the business has been dwindling since FY15 in tandem with the crash in crude oil prices, adding the O&G outlook is uncertain amid the volatility in oil price.

“However, overall industry is still weak but could have bottomed,” he said.

Meanwhile, Tan said the weak ringgit will be a catalyst for the company.

Risks to growth he noted, include foreign exchange, competition, regulatory and implementation risks.

Nevertheless, Tan said the group ended FY16 in a net cash position of 6.3 sen per share and expect cash to continue piling up going forward in the absence of major capital expenditure.


Frontken spurred by semiconductor boom

PETALING JAYA: Hong Leong Investment Bank (HLIB) Research has issued a non-rated call on Frontken Corp Bhd with a fair value of 45 sen, and said the group’s semiconductor division is expected to be its major growth driver, leveraging on the booming semiconductor industry.

The company’s shares closed trading up 2 sen to 34.5 sen yesterday, on 21.29 million shares done. It has a market capitalisation of RM361.56 million.

Frontken provides surface metamorphosis and mechanical engineering solutions, serving a wide range of heavy industries.

Its treatment technology modifies material surfaces with unique properties to improve performance, increase efficiency, reduce maintenance cost and extend lifetime.

In a note yesterday, the research house analyst Tan J Young said based on the World Semiconductor Trade Statistics’ latest May data, year-to-date 2017 (YTD17) global sales of semiconductor was even stronger than forecast.

He said that this bodes well for Frontken as its subsidiary Ares Green Tech Corp (AGTC) had expanded seven new production lines in FY16.

“AGTC will be focusing more on foundries with capabilities of 28nm and below which will yield healthier margins at the expense of volume,” he noted.

Tan said the group’s oil and gas (O&G) segment remains its major contributor but the business has been dwindling since FY15 in tandem with the crash in crude oil prices, adding the O&G outlook is uncertain amid the volatility in oil price.

“However, overall industry is still weak but could have bottomed,” he said.

Meanwhile, Tan said the weak ringgit will be a catalyst for the company.

Risks to growth he noted, include foreign exchange, competition, regulatory and implementation risks.

Nevertheless, Tan said the group ended FY16 in a net cash position of 6.3 sen per share and expect cash to continue piling up going forward in the absence of major capital expenditure.


Affin Hwang Capital trims Petra Energy’s earnings forecasts

PETALING JAYA: Affin Hwang Capital Research has cut Petra Energy Bhd’s financial year ending Dec 31, 2017 (FY17) earnings outlook by 21%, in light of the recent correction in global oil prices, which may lead to slower work execution in the near term.

“We are also trimming our 2018-19E earnings after tweaking some balance sheet items,” its analyst Tan Jianyuan said in a report yesterday. “As a result, we lower our target price to RM1.55 (from RM1.66 previously), but reaffirm our ‘buy’ call.”

Tan said the research house continues to favour the group for its turnaround story, healthy balance sheet – which provides ample room for leverage – as well as being a direct proxy to oil prices.

He added that Petra Energy remains a strong contender to win the upcoming modification, construction and maintenance (MCM) contract from Petroliam Nasional Bhd (Petronas), which is to be split into six packages.

He added the group’s Q2’17 revenue is expected to improve quarter-on-quarter (q-o-q) and year-on-year (y-o-y), underpinned by higher level of work activity under the existing Petronas’ Pan Malaysia contract in hand.

“Overall, we expect Q2’17 net profit of about RM5 million, supported by higher work activity, but potentially offset by lower RSC (risk service contracts) contribution as a result of a lower Q2’17 Brent oil price, which has fallen 7% q-o-q from an average of US$54.6 (RM234.23) per barrel (bbl) in Q1 2017 to US$51 per bbl in Q2 2017,” he noted.

Furthermore, the group will also likely be busy executing an engineering, procurement, construction and commissioning contract for an enhanced oil recovery project, which will stretch over the coming quarters.

Based on its scenario analysis, Tan said the research house believes that Petra Energy’s revenue in Q2’17 could see a 15-20% y-o-y increase.

Meanwhile, he said the research house believes the group’s current outstanding order book of RM1.4 billion, which will be expiring in May 2018, may not be fully translated into actual revenue due to its call-out nature.


Prestar Resources considers listing steel unit on ACE Market

PETALING JAYA: Prestar Resources Bhd is considering the listing of its 51%-owned subsidiary Tashin Steel Sdn Bhd on the ACE Market of Bursa Malaysia.

The group said details of the proposed listing have yet to be determined and a detailed announcement will be made in due course once the listing structure is finalised and approved. Tashin Steel has appointed M&A Securities Sdn Bhd as the principal adviser for the listing exercise.

Prestar, which is involved in steel-processing and steel-products manufacturing activities, said the proposed listing is at a preliminary stage and fairly extensive preparatory work is required and that such preparatory work may involve an uncertain time frame.

“The proposed listing is also subject to, among others, satisfactory due diligence and approvals being obtained from the relevant authorities in Malaysia (where required),” it noted.

Prestar also highlighted that there is no assurance that such approvals would be granted and that shareholders should note that the proposed listing may or may not materialise.

Prestar shares rose 5 sen to close at RM1.24 yesterday on some 22,700 shares done, bringing it a market capitalisation of RM251.27 million.