Stocks In Focus (14-11-2017)

(Nov 13): Based on corporate announcements and news flow today, stocks in focus on Tuesday (Nov 14) may include Guan Chong, United Plantations, KLCCP Stapled, IJM Corp, Trive Property, Tadmax, Rohas Tecnic, Dataprep, Scicom, Maybank, My E.G. Services and Dutch Lady.

Guan Chong Bhd’s net profit for 3QFY17 leapt 92% to RM29.7 million, from RM15.48 million recorded in the same quarter last year, mainly due to lower cocoa bean prices.

Quarterly revenue slipped 9.1% to RM542.86 million compared with RM597.51 million in 3QFY16, as a result of lower sales volume of cocoa cake and overall selling price of cocoa products.

The company declared a second interim single-tier dividend of one sen per ordinary share to be paid on Dec 27, 2017.

For 9MFY17, net profit rose by 46% to RM58.33 million from RM39.84 million in the same period a year ago. In contrast, revenue fell 6.5% to RM1.66 billion from RM1.77 billion in 9MFY16.

On prospects, Guan Chong said the business environment for FY17 is expected to be challenging, as the demand for cocoa solids remains uncertain amid continued volatility in cocoa bean prices.

United Plantations Bhd‘s net profit 3QFY17 rose 18.8% to RM98.76 million, from RM83.14 million a year ago, thanks to higher revenue incurred in the quarter by both its plantations and refinery segments.

Quarterly revenue rose 26.3% to RM370.82 million, from RM293.67 million previously.

The company announced an interim dividend of 20% per share, together with a special dividend of 10% per share — both with ex-date on Nov 24, and payable on Dec 14.

For 9MFY17, United Plantations posted a profit of RM286.18 million — up nearly 33% from RM215.24 million previously, again with increased contribution from both its core segments.

Revenue in the period rose 33.01% to RM1.11 billion, from RM830.99 million in 9MFY16.

On prospects, United Plantations said the anticipated recovery in overall palm for FY17 may not be as large as initially expected, amid moderating production in 3Q.

KLCCP Stapled Group Bhd’s net profit was almost flat at RM177.7 million for 3QFY17 due to higher operating expenses and lower interest income.

Quarterly revenue came in at RM340.5 million, up 3.3% from the RM329.54 million recorded a year ago.

KLCC Stapled Group, which is made up of KLCC Property Holdings Bhd (KLCCP) and KLCC Real Estate Investment Trust (), said in a separate statement the increase was contributed by stronger performance by the and retail segments.

The group declared a distribution per stapled security of 8.6 sen, consistent with that declared in 3QFY16, which is payable on Dec 28, 2017.

For 9MFY17, KLCCP Stapled Group reported net profit of RM532.38 million, 1.2% lower than the RM538.84 million previously while revenue improved 1.6% to RM1.01 billion from RM998.86 million in 9MFY16.

Moving forward, KLCCP Stapled Group said it expects its performance to be stable for the remainder of the year.

IJM Corp Bhd’s subsidiary, Port Consortium Sdn Bhd announced today that it together with NewOcean Energy () Sdn Bhd, a unit of energy supplier Hong Kong-listed NewOcean Energy Holdings Ltd, have signed land sublease and terminalling agreements for the development of NewOcean’s oil refinery complex in Port.

The project, estimated to cost approximately RM5.1 billion, comprises an oil refinery with an annual production capacity of 3.5 million tonnes, a tank farm serving as a storage depot for entreport trade purposes and a blending plant for various grade of petroleum products.

The project’s first phase is expected to be completed within 24 months and will yield 1.5 million tonnes annually, while the second phase will yield an additional two million tonnes and will take 18 months to be completed.

IJM Corp Bhd’s wholly-owned IJM Construction Sdn Bhd has won a RM378 million design-and-build contract for a corporate office tower in Damansara Uptown.

The contract was awarded by See Hoy Chan Sdn Bhd Group’s subsidiary Damansara Uptown Retail Centre Sdn Bhd.

The Uptown 8 corporate office tower will feature 31 storeys with a net floor area of about 480,000 sq ft, including two levels of commercial space and 1,387 parking bays.

Work for the project will commence this month and it is slated for completion in 39 months.

Trive Property Group Bhd signed a agreement (JVA) with Jiangxi Fujing New Energy Technology Co Ltd for a planned collaboration in the manufacturing and sale of solar energy products, including solar cells and panels.

The company and Jiangxi Fujing will form JV company Daima Fujing New Energy Technology Sdn Bhd under the JVA.

Trive said the JV provides an opportunity for the company to develop its solar business, which is expected to provide an additional source of earnings and improve its financial performance.

Tadmax Resources Bhd has announced today that its combined cycle gas turbine (CCGT) power plant project in Pulau Indah will be jointly developed with South Korea’s state-owned utility company, Korea Electric Power Corporation (KEPCO).

Under the terms of the agreement, Tadmax’s project company, Tadmax Indah Power Sdn Bhd (TIP), will be the leading member of the consortium, responsible for the negotiation of project, and preparation and submission of the complete proposal and liaison with related authorities.

It will also be in charge of the engineering procurement and construction (EPC), operations and maintenance (O&M) and gas supply agreement, power purchase agreement (PPA), besides contractors and advisers.

KEPCO will provide technical reviewing of the EPC and long-term supply agreement, preparation of the O&M plan and strategy, technical assistance and consultants, and support to achieve successful financial closing.

Upon successful implementation of the agreement, KEPCO intends to secure a 25% equity interest in TIP.

Rohas Tecnic Bhd has been awarded a turnkey contract to install new power transmission lines and reinforce existing ones in Bangladesh for about RM54 million.

The group’s 75%-subsidiary, HG Power Transmission Sdn Bhd, was awarded the contract by Power Grid Company of Bangladesh Ltd.

It involves the design, supply, installation, testing and commissioning of 34.5km of new transmission lines and reinforcement on 125km of the existing 132 kilovolt (KV) transmission lines.

The project is funded by KfW Development Bank in Germany, and will have an expected completion period of 24 months.

Dataprep Holdings Bhd shareholders have been told to reject the takeover bid launched by businessman Tan Sri Muhammad Ikmal Opat Abdullah, which has been termed “not fair and not reasonable” by independent adviser Mercury Securities Sdn Bhd.

Mercury Securities said while the offer price is higher than the estimated fair value per Dataprep share, it represents a “significant discount” to its volume weighted average price (VWAP).

It said the offer price represents a discount of 32 sen or 66.7% to the one-year VWAP of Dataprep shares of 48 sen, up to Oct 10, i.e. the last full trading day prior to the date of the notice.

It is also lower than the closing market prices of Dataprep shares for about 76% of the total market days over the same one-year period.

The offer is also not reasonable, it said, considering that the offeror intends to maintain the listing status of Dataprep, and the liquidity of Dataprep’s shares, with an average monthly trading volume of 66.44 million.

Scicom (MSC) Bhd said the expiry of a 5-year tax incentive granted on its statutory business process outsourcing (BPO) income derived in Malaysia is not expected to significantly impact the group’s bottom line or its dividend payout ratio.

The group was granted customised incentive of 100% income tax exemption on statutory income derived from outsourcing income for the period between Nov 7, 2012 to Nov 6, 2017.

In August 2016, the administrator revised the KPIs and the tax incentive was reduced from 100% to 70%, which was applicable for the incentive period from the same period.

Its chief executive officer Datuk Seri Leo Suresh Ariyanayakam also dismissed the notion that higher tax expenses for the group would translate into lower dividend payouts to its shareholders.

Scicom has over the last 5 years, declared an average pay-out of approximately 71% of its profits to shareholders in declared dividends, albeit not having a formal dividend policy in place.

Malayan Bhd (Maybank) foresees its mobile-banking transaction value reaching RM22 billion by end-2017, from RM16 billion a year earlier.

Growth will be driven by higher adoption of its mobile-banking application.

Its group chief technology officer Mohd Suhail Amar Suresh said the group’s 2017 year-to-date transaction value is at RM19 billion.

My E.G. Services Bhd group managing director Wong Thean Soon said he is not planning to acquire diversified entity Malayan United Industries Bhd (MUI).

Wong rubbished news reports which suggested he is planning to acquire MUI since he had earlier bought MUI shares as a passive investment.

He said he had disposed of all of his shareholdings in MUI and Palette, and will refrain from making any passive investments in listed in the future.

Dutch Lady Milk Industries Bhd has appointed Tarang Gupta as its new managing director with effect from Jan 1, 2018.

Gupta succeeds Saw Chooi Lee, who had helmed the company for the last three years, said Dutch Lady, which is owned by its parent company Royal FrieslandVampina.

Saw will remain on Dutch Lady’s board, serving as its non-independent non-executive director.

Source: The Edge Markets

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