Stocks in a Focus (20-04-2018)

(April 19): Based on corporate announcements and news flow today, stocks in focus for Friday (Apr 20) may include the following: IHH Healthcare Bhd, Maxis Bhd, Hektar Real Estate Investment Trust, British American Tobacco () Bhd, MK Land Holdings Bhd, Handal Resources Bhd, Bina Darulaman Bhd, Destini Bhd, Ikhmas Jaya Group Bhd, Vizione Holdings Bhd and PUC Bhd.

IHH Healthcare Bhd said today it had issued a non-binding letter to Fortis Healthcare Ltd yesterday to express IHH’s readiness to infuse up to INR4,000 crores into Fortis via a preferential share allotment at a price not exceeding INR160 (about RM9.44) a share.

IHH said the plan forms a part of IHH’s proposal to participate in Fortis.

It explained that the infusion is intended to fund the buyout of assets from RHT Health Trust as well as provide immediate liquidity towards working capital and infrastructure upgrades.

The board of Fortis has acknowledged receipt of the letter and indicated that it is scheduled to meet on April 19 to consider all options.

At this juncture, IHH has not entered into any discussions, negotiations or transactions.

Maxis Bhd‘s net profit for the first quarter ended March 31, 2018 (1QFY18) rose 4.2% to RM523 million, from RM502 million a year earlier, driven by continuous cost optimisation initiatives that offset lower service revenue.

Revenue, however, dropped 5.8% year-on-year (y-o-y) to RM2.2 billion from RM2.4 billion due to increased competition, particularly in the prepaid market.

Maxis declared an interim single-tier tax-free dividend of five sen per share for the ending Dec 31, 2018 to be paid on June 28. The entitlement date for the dividend payment is May 31.

The mobile telecommunication network provider said service revenue was marginally lower at RM1.98 billion, from RM2.1 billion a year ago, due to the decline in the prepaid segment which offset the growth in post-paid.

It added that post-paid revenue grew 5.2% to RM985 million from RM936 million last year, registering the highest shared line acquisition and increased average revenue per account through mobile and fixed offerings. Further, Maxis said prepaid revenue softened to RM849 million from RM1 billion last year due to lower subscription base.

Hektar Real Estate Investment Trust (Hektar ) aims to double its portfolio asset value to RM2.4 billion by 2026, by acquiring at least four assets over the eight-year period.

As at Dec 31, 2017, the REIT’s asset value stood at RM1.2 billion following last year’s acquisition of Segamat Central, bringing its total net lettable area (NLA) to 2 million sq ft.

Hektar REIT executive director and chief executive officer Datuk Hisham Othman said the trust is looking to acquire assets valued at between RM300 million and RM400 million subject to its extensive review process.

He added that the REIT is open to opportunities and is looking at assets in Sabah and to add to its portfolio, but said there has been no plan cast in stone yet.

The fall in the of British American Tobacco (Malaysia) Bhd (BAT) matches the decline in the size of the legal tobacco market in Malaysia, said group chief financial officer Ricardo Guardo.

“There is a correlation between our share price and the size of the legal market, which fell to 41.7% in 2017,” Guardo said. Conversely, the size of the illegal market had grown to 58.3% last year from 52.5% in 2016, added group managing director Erik Stoel.

Going forward, Stoel said that any growth in the group’s revenue and earnings would largely depend on measures the government takes to crack down on illegal trade.

Stoel added that BAT recorded a 53.9% share of the legal domestic tobacco market last year and is committed to staying in Malaysia despite having closed down its production in 2017.

MK Land Holdings Bhd said today its wholly-owned subsidiary Saujana Triangle Sdn Bhd is being sued by the Inland Revenue Board (IRB) over RM26.98 million in additional tax claims for the years of assessment 2011 and 2013.

MK Land said Saujana Triangle was served with a writ of summons and statement of claim yesterday for the amount.

Upon consulting its solicitors and tax consultants, MK Land said it is of the view that there are reasonable grounds to challenge the claim brought against Saujana Triangle on the basis that there is a valid appeal pending before the Special Commissioners of Income Tax.

Handal Resources Bhd said it is supplying two pedestral cranes to Sapura Fabrication Sdn Bhd for RM7.3 million.

Handal said its wholly-owned subsidiary Handal Offshore Services Sdn Bhd was awarded two contracts for the fabrication, supply and delivery of the two pedestral cranes by December.

The group expects the contracts to contribute positively to its earnings for the financial year ending Dec 31, 2018 (FY18).

Bina Darulaman Bhd (BDB) is confident of overcoming the current challenging business environment by capitalising on undeveloped landbanks, worth RM344.4 million, to sustain future developments.

The primary focus now is to strategise for long-term growth and sustainability, the Kedah-based developer said.

Its chairman Datuk Paduka Rasli Basir said the property division will be focusing on clearing its inventory of available units and introducing new and innovative products that match the market’s requirements.

He added that about 75% of BDB’s product launches would be affordable housing priced at RM400,000 and below.

Destini Bhd has bagged a RM138 million contract from the Defence Ministry to provide maintenance, repair and overhaul (MRO) services and the supply of safety and survival equipment to the Royal Malaysian Air Force (RMAF).

This is in addition to a RM98.2 million three-year contract secured from the Defence Ministry on Dec 8, 2016 to provide similar services to RMAF that ran from Oct 3, 2016.

Destini said its wholly-owned subsidiary Destini Prima Sdn Bhd has accepted a letter of award (LoA) from the Defence Ministry for the additional RM138 million contract.

Under the contract, Destini Prima is required to participate in the Skim Latihan 1Malaysia and provide employment to at least 57 people without cost to the government.

Ikhmas Jaya Group Bhd has secured an RM101.85 million contract for a flood mitigation project in Sungai Pendang, Kedah from the Department of Irrigation and Drainage.

Ikhmas Jaya said the project consists of demolition and site clearance, piling works, upgrading of bridges, upstream and improvement works. It is expected to take 36 months to complete beginning from the date of site possession.

Ikhmas Jaya said that the new project will boost its order book to RM900 million, and is expected to contribute positively to its revenue and earnings for the foreseeable future.

Vizione Holdings Bhd‘s net profit surged 53 times to RM8.06 million in the third financial quarter ended Feb 28, 2018 (3QFY18) from RM152,000 a year ago, mainly due to contribution from the construction works undertaken by its newly-acquired unit Wira Syukur (M) Sdn Bhd.

Wira Syukur has an order book of RM3.75 billion, which will contribute to the group’s earnings visibility over the next several years.

Meanwhile, revenue also jumped more than nine times to RM133.86 million in 3QFY18 from RM14.61 million in 3QFY17.

For the cumulative nine months (9MFY18), the group’s net profit rose more than 36 times to RM15.14 million from RM415,000 a year ago, while revenue increased nine times to RM302.49 million from RM33.05 million in 9MFY17.

PUC Bhd said today that it will be investing up to RM90 million in Celcom Planet Sdn Bhd (CPSB) and as a result, take over management control of 11Street Malaysia.

This follows an announcement last week that PUC incorporated a wholly-owned subsidiary, PUC Ventures Sdn Bhd, which it said will identify opportunities to invest in or acquire equity interests in companies that are principally involved in e-commerce businesses.

In a filing with Bursa Malaysia today, PUC said it has entered into a term sheet with CPSB, Axiata Group Bhd wholly-owned subsidiary Axiata Digital Services Sdn Bhd (ADS), and SK Planet Co Ltd’s wholly-owned subsidiary SK Planet Global Holdings Pte Ltd (SKP) for the purpose of the investment.

It was noted that CPSB is a joint venture between ADS and SKP, which owns and operates the e-commerce platform 11Street Malaysia.

Source: The Edge Markets

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