Stocks in Focus [01-08-2017]

: Based on corporate announcements and news flow today, stocks in focus on Tuesday (August 1) may include: Lotte Chemical Titan Holdings Bhd, Mudajaya Group Bhd, Texchem Resources Bhd, Palette Multimedia Bhd, Berjaya Corp Bhd, United Plantations Bhd, ManagePay Systems Bhd and WMG Holdings Bhd.

Lotte Chemical Titan Holding Bhd’s (LCT) net profit for the second financial quarter ended June 30, 2017 dropped 72% to RM113.62 million from RM404.03 million a year earlier, while revenue fell 11% to RM1.78 billion from RM1.99 billion.

LCT attributed the lower revenue to a decrease in sales volume due to the unplanned water interruption by Syarikat Air Johor (SAJ) in April 2017, coupled with lower sales during the festive holiday in June.

Meanwhile, the group’s profits were dragged down by higher cost of goods sold and higher unit production cost amid the water interruption.

“Other factors contributing to the decrease in profit before tax includes the fair value losses on derivatives of RM21.9 million, property, plant and equipment written off of RM20.1 million and share of loss from associate of RM16 million,” it said.

For the first half of the year, cumulative net profit was down 32% at RM455.77 million from RM676.2 million a year earlier, while revenue came in 7% lower at RM3.69 billion from RM3.99 billion.

LCT also ended the day 23.3% lower at RM4.70 after some 32.38 million shares were traded. Its market capitalisation stood at RM10.68 billion.

Mudajaya Group Bhd has won two contracts valued at RM151.38 million from Petroliam Nasional Bhd (Petronas) to undertake procurement, construction and commissioning (PCC) works for the utilities, interconnecting and offsite (UIO) facilities of the refinery and petrochemical integrated development (Rapid) project in Pengerang, Johor.

Mudajaya said its wholly-owned unit Mudajaya Corp Bhd was awarded the two contracts on July 25 and 26 by PRPC Utilities and Facilities Sdn Bhd, a subsidiary of Petronas.

Project 1 involves PCC of a data centre and telecom equipment room and an electrical substation for the UIO facilities at the Rapid project, while Project 2 involves PCC of civil and infrastructure works at Area 8100 for the UIO facilities.

Texchem Resources Bhd’s net loss widened in the second quarter ended June 30, 2017 (2QFY17) due to lower contribution in its industrial and restaurant divisions.

The group posted a net loss of RM6.11 million for the quarter versus RM3.52 million for 2QFY16.

Revenue grew 9% to RM270.93 million from RM248.47 million in 1QFY16 due to increased contribution from all its divisions

For the first six months of FY17, the group’s net loss expanded by 16.7% to RM6.69 million from RM5.73 million a year earlier, while revenue grew to RM541.91 million from RM505.30 million.

Palette Multimedia Bhd has aborted plans to diversify into the traditional medicine industry after it decided not to proceed to buy a 51% stake in Genopharma Sdn Bhd, as the latter’s current financial performance is below expectations.

On Nov 24 last year, Palette announced that it had signed a term sheet with three individuals — Liao Chunhua, Liu Zhen and Tan Yi Wen — to acquire a 51% stake in Genopharma, which is principally involved in the trading of traditional Chinese medication, food and herbal supplement, for RM1.53 million.

Palette had planned to fund the deal via the issuance of new shares of four sen each in the company at an issue price to be determined later.

Under the deal, the vendors had guaranteed a net profit of at least RM1 million for the ending June 30, 2017 (FY17), RM1.5 million for FY18 and RM2 million for FY19. Palette had also three months to carry out the necessary due diligence on Genopharma’s financial status and affairs.

Separately, Palette said it has inked additional contracts with values exceeding RM18 million, with associate companies of Russian telecommunications giant RKSS Group for its digital cloud infrastructure and video/audio conference communication equipment.

Under the contracts — inked with Trade House Atlantis Ltd and CJSC Gollard — Palette will provide a system for additional deployment of its digital cloud platform in other locations in Russia to support mobile health, telemedicine and other Internet-of-Things (IoT)-related applications. It will also support various cloud application software including mobile health cloud and network access management.

Berjaya Corp Bhd (BCorp) is not proceeding with a proposed (JV) to operate a new pharmacy chain with Australia-based CW Retail Asia Pty Ltd.

“The board of directors of BCorp wishes to announce that all parties have mutually agreed to terminate the proposed joint venture,” the company said in a brief Bursa filing today. No reason was provided.

In March last year, BCorp, through its indirect unit Morning Charm Sdn Bhd, inked a JV deal to own and operate community pharmacy stores and distribute pharmaceutical and non-pharmaceutical products with CW Retail.

At the time, it said Morning Charm, which is 80%-owned by BCorp’s unit Berjaya Group Bhd, would take a 75% stake in the JV company Monarch Wonder Sdn Bhd, with CW Retail — which supplies goods and services to pharmacies and operate pharmaceutical chains in Australia — taking up the rest.

BCorp had then said the project would enable it to expand and strengthen its pharmacy distribution and retail businesses under the co-brand names, as well as make its foray into the pharmacy warehousing business sector.

United Plantations Bhd‘s second-quarter net profit grew 51.7%, thanks to higher production, higher crude palm oil and palm kernel prices, and lower costs of production.

Net profit for the three months ended June 30, 2017 (2QFY17) rose to RM109.75 million from RM72.35 million a year ago. Quarterly revenue also rose 27.9% to RM355.26 million from RM277.73 million in 2QFY16.

For the cumulative six months (1HFY17), the group recorded a 41.9% rise in net profit to RM187.42 million from RM132.12 million a year ago, whereas revenue came in 36.7% higher at RM734.5 million from RM537.31 million in 1HFY16.

The Malaysia Economic Development Council (Mapem) has appointed ManagePay Systems Bhd (MPay) as partner and service provider for its Mapem/MPay Prepaid MasterCard programme for foreigners in Malaysia.

The programme, according to MPay, has received full support from the Malaysian Prime Minister’s Department via a letter issued on July 17 this year.

Under the agreement, MPay will provide foreigners with financial services, namely MPay Wallet mobile application for , physical MPay MasterCard prepaid cards, salary crediting programme and remittance services.

Sabah-based WMG Holdings Bhd (WMG) is looking to launch RM1.3 billion of new projects post-listing via a reverse take-over (RTO) of Tekala Corporation Berhad (Tekala) here today.

Without specifying a timeframe, group managing director Quek Siew Hau said WMG plans to launch the new projects on its existing 44.12 acres of land in Sabah, comprising both residential and commercial properties.

The projects are said to be funded by internally-generated funds and bank borrowings, according to Quek. WMG currently has a total undeveloped land bank of approximately 620 acres, of which 442 acres are in Sandakan and the remaining 178 acres in Kota Kinabalu.

The company’s projects presently include Sejati Walk, which is a shopping mall with 343 shopping units and a commercial centre; Sri Indah Kondominium which are four blocks of 11-storey condominium totalling 480 units; and a Mydin Hypermarket — all under construction in Sandakan.

Source: The Edge Markets

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