growth potential


Malaysia partners two international supply chain managers for palm oil export

PUTRAJAYA, Nov 14 — Malaysia strikes key palm oil partnership deals with two major supply chain managers in the United Arab Emirates (UAE) and China to facilitate greater palm oil penetration in China, India and the Indian sub-continent. The deals…

Ivory Properties buys Penang land for RM65m

The company is considering 70% bank borrowings and 30% internally generated funds to finance the proposed acquisition, the group said in a Bursa Malaysia filing.

“The proposed acquisition represents a strategic purchase in line with its strategy to expand its land bank in locations with growth potential and strengthen its foothold in the property market in Penang.”

The proposed development plan is affordable sea-fronting service apartments with sizes ranging from 485 sq ft to 1,200 sq ft complete with amenities and facilities, aimed at first-time home buyers, working professionals, young families and investors.

Following the completion of the proposed acquisition, the land bank and joint venture development rights of Ivory Group will increase to approximately 86 acres from 84 acres. Its gearing level is also expected to increase to 0.42 times for the financial year ending Dec 31, 2020.

Better second half for Leong Hup seen as poultry prices recover

PETALING JAYA: Leong Hup International Bhd is expected to achieve a better second half year on the back of improving average selling prices (ASP) for day-old-chicks (DOC), broiler and eggs, according to AmResearch.

According to statistics published by the Department of Veterinary Services, since end-June 2019, prices of eggs in Malaysia have risen by 7% while that of broiler chicken and DOCs have increased by 12% and 22% respectively.

“We remained convinced that the long-term outlook for Leong Hup is still positive given the stable demand of chicken while its source of income outside Malaysia such as Singapore Vietnam, Indonesia and the Philippines will provide growth potentials for the group,“ the research house said.

On the other hand, soybean price climbed 4% and there was an uptick in corn price which rose by 24% in 10 weeks from May to July 2019, which AmResearch believes contributed to the higher ASPs.

“We opine that the surge in corn price was due to historically low planting levels in the US as a result of widespread flooding.”

Compared to FY18, average year-to-date (YTD) prices rose by circa 10% for eggs while for broiler and DOC, they have dropped by 9% and 4% respectively. Soybean and corn prices slipped by 5% and 0.7% respectively.

“We believe the drop in poultry prices in Malaysia was due to the cooler weather YTD which may have led to a higher market supply.”

According to the research house’s sensitivity analysis, a 10% increase in prices of Malaysian eggs, DOC and broiler chicken will lift earnings by 0.6%, 0.5% and 0.7% respectively. Malaysian eggs, broiler and DOC made up circa 4%, 6% and 6% respectively of the group’s revenue. Corn and soybean account for circa 19% and 17% of Leong Hup’s total cost of sales.

“Taking this into consideration, we expect Leong Hup’s earnings trajectory and margins to be in line with our forecasts with ebitda (earnings before interest, taxes, depreciation and amortisation) margin of 11.9% in FY19.”

AmResearch maintained its buy call on Leong Hup with an unchanged fair value of RM1.17 a share.

US existing home sales fall nationwide as prices surge

WASHINGTON, Oct 22 — The short supply of housing in the United States pushed prices up sharply in September, causing sales of existing homes to drop, according to new industry figures released today. While low interest rates are enticing buyers to…

Bursa Malaysia opens easier but turns firmer thereafter

KUALA LUMPUR: Bursa Malaysia opened marginally lower but turned firmer thereafter, in line with regional peers and the stronger overnight performance on Wall Street.

At 9.05am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) edged up 0.44 of-a- point to 1,571.37 from Monday’s close of 1,570.93, after opening 0.66 of-a-point easier at 1,570.27.

Market breadth was positive as gainers led losers 146 to 80 with 189 counters unchanged, 1,602 untraded and 36 others suspended.

Turnover amounted to 128.43 million shares worth RM54.62 million.

Malacca Securities Sdn Bhd, however, expect the FBM KLCI to linger longer in a sideways trend under the prevailing environment.

“Upsides still look elusive given the lack of fresh leads and continuing wariness over corporate earnings growth potential.

“At the same time, there is also little selling pressure as the foreign selling has dissipated for now,“ it said.

The stockbroking firm anticipated the key indicator to continue trending within the tight range of between 1,566 and 1,576, for now.

Meanwhile, in a separate note, Public Investment Bank Bhd said the FBM KLCI is anticipated to be trending sideways around the 1,565-mark for the rest of the week.

“Support levels for the index are at 1,500, 1,515 and 1,551, while the resistance levels are at 1,580, 1,600 and 1,622,“ it said.

Regionally, Japan’s Nikkei added 0.25% to 22,548.90, Hong Kong’s Hang Seng Index increased 0.33% to 26,813.8158 and Singapore’s Straits Times Index gained 0.98% to 3,169.96.

Among heavyweights, Maybank gained three sen at RM8.52, Public Bank added four sen to RM19.32, IHH was one sen better at RM5.67, Tenaga slid 10 sen to RM13.70 while Petronas Chemicals was unchanged at RM7.40.

Of the most actives, Green Packet warrant and NetX were flat each at 32 sen and two sen, respectively, Bumi Armada and Lay Hong increased half-a-sen each to 48.5 sen and 51 sen while Ucrest was 1.5 sen higher at 16 sen.

Carlsberg was the top gainer, bagging 28 sen to RM26.54 while the top loser, Nestle shed 60 sen to RM143.60.

The FBM 70 expanded 11.45 points to 14,130.71, the FBMT 100 Index rose 4.47 points to 11,007.68 and the FBM Ace advanced 22.21 points to 4,853.62.

The FBM Emas Index strengthened 5.72 points to 11,198.02, but the FBM Emas Shariah Index declined 3.64 points to 11,805.01.

Sector-wise, the Financial Services Index accumulated 23.27 points to 15,244.46, the Industrial Products & Services Index was 0.17 of a point firmer at 152.81 but the Plantation Index fell 9.66 points to 6,629.81. – Bernama

Bursa opens lower, but steadies on strong Wall Street showing

KUALA LUMPUR, Oct 22 — Bursa Malaysia opened marginally lower but turned firmer thereafter, in line with regional peers and the stronger overnight performance on Wall Street. At 9.05am,  the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) edged…

AirAsia sees inflight Wi-Fi as next income source

KUALA LUMPUR, Oct 20 — AirAsia has been exemplary in using digital and disruptive technologies in increasing its ancillary income, including the introduction of inflight Wi-Fi, which is expected to create a US$130 billion (RM544.2 billion) global…

After Indonesia, GD Express spreads wings to Vietnam

PETALING JAYA: GD Express Carrier Bhd (GDEx) is acquiring a 50% stake in Vietnam’s Noi Bai Express and Trading Joint Stock Company (Netco) for RM13.85 million.

Netco is principally involved in provision of courier and logistics services in Vietnam.

In a Bursa Malaysia filing, GDEx said it has entered into a share sale and purchase agreement with Nguyen Duc The, Trieu Lan Huong and Nguyen Duc Hau for the acquisition.

GDEx has also signed a shareholder’s agreement with 3 Comma Capital Co Ltd, Trieu, Nguyen Xuan Hiep,Tran Thi Thuy Hang, Nguyen Thanh Trung and Duc The to regulate their relationships as shareholders of Netco.

“The proposed acquisition is in line with the group’s regional ambition in building a sustainable Southeast Asia delivery network to serve the community better. The expansion into Vietnam is the continuation of such effort after Indonesia,” it said it its filing.

GDEx said the purchase price was arrived at a willing buyer-willing seller basis after taking into consideration the growth potential of Netco and its extensive delivery network in Vietnam covering all 63 provinces.

Netco currently has four hubs, 45 branches & lodge-in centres and 47 points of delivery.

The proposed acquisition will be financed with internally generated funds, and the agreements are expected to be completed by January 2020.

The acquisition comes after GDEx announced earlier this month that it would be kicking off its regional expansion plan in Indonesia.

To recap, GDEx subscribed to 44.56% of Indonesia’s Development Board-listed PT SAP Express Tbk’s (SAP Express) initial public offering for RM25.8 million.

“We believe Indonesia offers a vast growth opportunity for the courier business, supported by the growth of e-commerce as well as conventional business.

“The continuation of the company’s partnership with SAP Express will enable the company to provide business advice and support, as well as knowledge transfer between the two companies,” it said in an filing with the exchange then.

SAP Express, which is headquartered in Jakarta, mainly provides services in the express delivery segment, as well as transport, distribution and warehousing.

This could also prove to be a rerating catalyst for GDEx by research analysts.

“Rerating catalysts for GDEx would be entry into other Asean countries such as Vietnam and Cambodia, a stronger retail delivery network and services, and the Digital Free Trade Zone development. e-commerce will likely drive demand growth for air cargo and land logistics especially last-mile delivery services,” said MIDF Research in a recent note.

Vietnam among rising stars of global trade, says Standard Chartered

HANOI, Oct 15 — Vietnam has been named one of the rising stars of global trade with the sixth position among the top 20 markets with the greatest potential for future trade growth, Vietnam News Agency (VNA) reported, according to a recent report…

Malaysian firms seek franchise deals in India

NEW DELHI, Oct 11 — Malaysian companies are looking for franchise partnerships in India to benefit from the country's entrepreneurial growth potential. India's largest franchise exhibition starting tomorrow features some of Malaysia's top brands,…