Stocks In Focus [24-10-2017]
KUALA LUMPUR (Oct 23): Based on corporate announcements and news flow today, stocks in focus on Tuesday (Oct 24) may include: Denko, BAT Malaysia, I-Bhd, TAS Offshore, Titijaya Land, KKB Engineering, HeiTech Padu, Berjaya Land, Esthetics International, Axis REIT and T7 Global.
Denko Industrial Corp Bhd is seeking to buy its bigger rival Integrated Manufacturing Solutions Sdn Bhd (IMS) for RM1.19 billion to be satisfied via an allotment of 1.03 billion new shares in Denko at an issue price of RM1.15 per share. The purchase price is 8.9 times Denko’s market value of RM133.72 million.
Denko said the proposed acquisition is part of its plastic injection moulding business expansion strategy to grow its revenue and customer base, and to expand its production capacity, which in turn will improve its financial performance.
It has entered into a Heads of Agreement (HOA) with Denko major shareholder and and executive director-cum-chairman Datuk Seri Foo Chee Juan and Datuk Fong Chiu Wan, who is a person connected with Foo, for the proposed acquisition of 6.2 million shares in IMS.
Denko is also proposing to undertake a private placement of up to 10% of the existing total number of issued shares to independent third party investor(s) to be identified at a later stage. The issue price of the placement shares will also be determined and fixed at a later date.
British American Tobacco (Malaysia) Bhd (BAT Malaysia), which posted a 32.7% year-on-year decline in third-quarter net profit, said it remains concerned with legal volumes continuing to be impacted by the current high incidence of illegal cigarette trade.
It saw its net profit fall to RM143.18 million in the third quarter ended Sept 30, 2017 (3QFY17) from RM212.62 million a year ago, on lower volumes, restructuring expenses and higher operating expenses.
Quarterly revenue also dropped 18.8% to RM757.28 million in 3QFY17 from RM932.19 million in 3QFY16.
Nevertheless, the group declared a third interim dividend of 43 sen per share amounting to RM122.78 million for the financial year ending Dec 31, 2017 (FY17), payable on Nov 23.
Property developer I-Bhd‘s net profit fell 12.7% to RM19.6 million in the third quarter ended Sept 30, 2017 (3QFY17) from RM22.44 million a year ago, on higher maintenance costs for its investment properties during the financial period.
The group’s earnings per share also dropped to 1.85 sen in 3QFY17 from 2.11 sen in 3QFY16. Quarterly revenue fell 7.3% to RM105.32 million from RM113.58 million.
For the cumulative nine months (9MFY17), the group’s net profit, however, grew 10.2% to RM57.82 million from RM52.48 million a year ago, while revenue rose 19.7% to RM335.97 million from RM280.71 million in 9MFY16, due to further sales from the existing projects in i-City, Shah Alam, as well as the advancement of the construction progress.
TAS Offshore Bhd returned to the black in the first financial quarter ended Aug 31, 2017 (1QFY18), posting a net profit of RM2.23 million, from a net loss of RM1.13 million in 1QFY17.
Revenue jumped fivefold to RM10.43 million from RM2.25 million in the previous year. TAS Offshore attributed the improved quarterly results to the sale of two units of tugboats.
Earnings per share stood at 1.27 sen in 1QFY18 compared with a loss per share of 0.64 sen a year ago.
Titijaya Land Bhd said it will receive compensation totalling RM65.25 million over the temporary occupation and usage of its land in Shah Alam for the upcoming third Light Rail Transit (LRT3) project.
The property developer said the compensation will be awarded to its wholly-owned subsidiary, Shah Alam City Centre Sdn Bhd, which is the registered owner of the 65,216 sq m piece of land.
KKB Engineering Bhd has received purchase orders totalling RM23.9 million, for the supply and delivery of mild steel casing and concrete-lined mild steel pipes.
It said the contracts are for its subsidiary, Harum Bidang Sdn Bhd, and were received from CMS Infra Trading Sdn Bhd (CMSIT) and Kimlun Sdn Bhd.
KKB Engineering said it will provide CMSIT the supply and delivery of the concrete-lined mild steel pipes, which will be completed within the first quarter of 2018 (1QFY18).
HeiTech Padu Bhd has won a RM19.2 million contract to undertake mechanical and electrical works for renewable energy substations in Perak.
It said its subsidiary, Duta Technic Sdn Bhd, was awarded the contract by Gading Kencana Development Sdn Bhd.
The contract is for the design, supply, installation and completion of mechanical and electrical works for a 132kV switching substation, and a 33/132kV step-up substation in Bidor.
Works for the project is scheduled to end on May 28, 2018.
Berjaya Land Bhd (BLand) sold 10 million shares or a 0.9% stake in 7-Eleven Malaysia Holdings Bhd for RM14.9 million or RM1.49 per share.
BLand said the disposal, which is expected to record a gain of about RM1.5 million for the group, was done via a direct business transaction on Oct 20.
Following the disposal, BLand now holds 6.5 million 7-Eleven shares or a 0.59% stake. BLand did not disclose the buyer of the said shareholding.
Esthetics International Group Bhd (EIG) will cease to act as the exclusive distributor of LPG Systems skincare equipment in Malaysia effective Jan 17, 2018.
EIG said the reason is due to a change in terms which are no longer favourable and of interest to the group and its wholly-owned subsidiary EIG Dermal Wellness (M) Sdn Bhd.
“EIG will instead channel its attention and resources into its core brands and businesses within the group,” it said, adding that the discontinuation of the LPG distributorship is deemed to be immaterial to the turnover and profitability of the group.
Axis Real Estate Investment Trust (REIT) announced a net property income (NPI) of RM35.92 million for the third quarter ended Sept 30, 2017 (3QFY17), up a marginal 0.33% from RM35.8 million a year ago, thanks to rental proceeds from newly acquired Scomi Facility @ Rawang and Kerry Warehouse.
The better earnings, which came on the back of flattish revenue growth — its 3QFY17 top line came in at RM42 million, versus RM41.98 million a year ago — was also due to positive rental revision and the rental of 17.6 acres (7.12ha) of land at Axis PDI Centre.
The REIT declared a third interim distribution of two sen distribution per unit (DPU) to unitholders, payable on Dec 13.
T7 Global Bhd has entered into a Memorandum of Understanding with three private companies to form a strategic partnership for the construction of the East Coast Rail Line project. The three companies are Eastern Pacific Industrial Corp Bhd, CMC Engineering Sdn Bhd and China State Construction Engineering (M) Sdn Bhd.
Source: The Edge Markets