growth potential


Parlo Tours completes RTO, lists on the ACE market

PETALING JAYA: Parlo Tours Sdn Bhd, travel management and services group in Malaysia, via a reverse takeover of Cybertowers Bhd has today joined the ACE Market of Bursa Malaysia Securities Berhad, under the name Parlo Bhd.

The group's share price jumped 8.5 sen or 85% to trade at 18.5 sen as at 3.54pm today, with some 23.9 million shares changing hands.

The Parlo group led by CEO Dani Yap acquired Parlo Tours for RM25.0 million, with a profit guarantee of not lower than RM8.6 million combined, for the financial years ended Dec 31, 2016 and Dec 31, 2017 (FYE16 and FYE17).

Based on the average profit guarantee of RM4.3 million per annum, this translates to a price-to-earnings ratio (PER) of 5.8x. The regularisation plan also included a private placement of 84 million Parlo shares at the issue price of RM0.10 per share, to raise funds, mainly for working capital of the group.

Moving forward, the Parlo group has on-going plans to further develop its leisure and corporate travel business through participation in more trade exhibitions and events, increasing advertising and promotional activities as well as expanding our sales and distribution channels.

In addition, the group has plans to increase their participation in e-commerce platform, enabling online travel reservations. This will allow the group to engage in cross border travels and position themselves for a larger market segment.

According to an Independent Market Research Report by Smith Zander International Sdn Bhd1, the global travel and tourism industry has been experiencing growth as international tourist (overnight visitors) arrivals stood at 1.2 billion in 2016, having grown from 950.2 million in 2010 at a compound annual growth rate (CAGR) of 4.5%, and is projected to increase by 3.3% annually between 2016 and 2030, to reach 1.80 billion visitors.

International tourism receipts, representing the expenditure by international tourists for and during tourism trips, stood at US$1,162.5 billion in 2016, having grown from US$919.0 billion in 2010 at a CAGR of 4.0%.

In Malaysia, tourist arrivals increased from 24.6 million persons in 2010 to 26.8 million persons in 2016, at a CAGR of 1.4%, as tourism receipts increased from RM56.5 billion to RM82.1 billion, at a CAGR of 6.4%, during the same period.

Parlo believes that the group will be able to leverage on the growth potential of the tourism industry to substantially increase its revenue and enhance the overall financial performance of the group.

GITP remains cornerstone for Malaysia’s gaming sector

KUCHING: The Genting Integrated Tourism Plan (GITP) remains the catch in 2018 in Malaysia’s gaming sector, analysts opine in an industry insight. The research arm of Hong Leong Investment Bank Bhd (HLIB Research) believed that in Malaysia, the multiyear growth story of GITP will continue to be the catch for Genting Malaysia Bhd (Genting Malaysia) […]

Next Week Stocks in Focus

KUALA LUMPUR (Jan 12): Based on corporate announcements and news flow today, companies in focus on Monday (Jan 15) may include: AirAsia X Bhd, AirAsia…

Paramount buys Cyberjaya land for RM570 million GDV project

PETALING JAYA: Paramount Corp Bhd is buying a piece of freehold residential land measuring approximately 41.406 acres in Cyberjaya, Selangor for RM149.7 million to embark on a property project with a gross development value (GDV) of RM570 million.

In a Bursa Malaysia filing, Paramount said its wholly-owned subsidiary Paramount Property (Lakeside) Sdn Bhd has entered into a sale and purchase agreement (SPA) with Makmur Asiamaju Sdn Bhd (MASB), which is in the business of property development, for the proposed acquisition.

Paramount said the land has been approved for a stratified landed residential development, comprising 418 residential units pursuant to a development order dated Feb 24, 2014 granted by Majlis Perbandaran Sepang to MASB.

With a projected RM570 million GDV to be generated from this development over a period of six years, Paramount said the proposed acquisition will further strengthen the group's current total GDV of RM8.6 billion and contribute positively to its future earnings.

Furthermore, the group said the acquisition is in line with its strategy of replenishing its land bank at locations with strong growth potential and to scale up its property development activities to generate long-term sustainable income.

Barring any unforeseen circumstances, it said the proposed development is expected to commence next year, while the proposed acquisition is expected to be completed within nine months from the date of the SPA.

The purchase consideration will be funded through a combination of internally generated funds and bank borrowings.

Paramount closed four sen or 2.13% higher at RM1.92 with some 363,500 shares traded.

T7 Global partners Chinese firm for mega projects

PETALING JAYA: T7 Global Bhd's subsidiary T7 Kemuncak Sdn Bhd is forming a joint venture (JV) with China Construction Third Engineering (M) Sdn Bhd (CCTE Malaysia) in order to tender for infrastructure and construction projects in Malaysia.

Known as T7 China Construction Third Engineering Sdn Bhd , the JV will bid for East Coast Rail Link (ECRL), Mass Rapid Transit (MRT), Light Rail Transit (LRT) projects and construction business in Malaysia.

T7 and CCTE Malaysia own 51% and 49% equity interest in the JV respectively.

CCTE Malaysia is is an indirect wholly-owned subsidiary of China State Construction Engineering Corporation Ltd (CSCEC) held via China Construction Third Engineering Bureau Co Ltd.

CSCEC is the largest construction and real estate conglomerate in China with extensive experience and expertise in buildings, design and engineering, industrial facilities and infrastructure projects.

Listed on the Shanghai Stock Exchange with a market capitalisation of over RMB300 billion (RM191 billion), CSCEC is involved in the business of implementation and supervision of infrastructure works including railways, highways, bridges, harbours, refineries, dams and other related facilities for more than 50 years.

T7 said the JV is in line with its plans to explore businesses in areas with growth potential and will allow the group to leverage on CCTEB's advantage as a construction industry leader.

T7's share price was down by 1.1% to close at 45 sen on some 1.56 million shares done.

Emerging markets set to drive 2018 global growth — World Bank

WASHINGTON: The global economy is set to expand by 3.1 per cent in 2018, slightly up from 3 per cent last year and marking the first year since the 2008 Great Recession that it will near or achieve full growth potential, the World Bank said. In an update of its twice-yearly economic report, the World […]

AirAsia explores India unit IPO, seeks partner for services business

SINGAPORE: Malaysia-based AirAsia Bhd is considering an initial public offering for its Indian unit and seeking a partner for its services business, the carrier’s group chief executive Tan Sri Tony Fernandes said today.

This is the latest in a series of asset monetisations being undertaken by the low-cost airline group, which this week received shareholders’ nod for a reorganisation to make AirAsia Group Bhd the listed holding company for assets across Asia.

AirAsia has already completed a backdoor listing of Indonesia AirAsia TBK PT and finalised a S$119.3 million (RM358.1 million) joint venture for its ground-handling business with Singapore’s SATS Ltd. Its Philippine unit is looking to raise up to US$250 million via an IPO in mid-2018.

AirAsia will seek approval at the next AirAsia India board meeting to pick a banker to start a preliminary process for an IPO, Fernandes posted on Twitter today.

While analysts are “giving zero value to AirAsia India”, the unit is a “very valuable asset with huge growth potential”, he said in separate tweets, adding the subsidiary “was not far from 20 planes and a potential IPO”.

According to Indian regulations, airlines need to have a fleet of at least 20 aircraft to fly on international routes.

AirAsia India, a joint venture with India’s Tata Sons conglomerate, had 14 planes at end-2017. Its revenue last year was expected to double to 12 billion rupees (RM754.9 million) and climb to 18 billion rupees in 2018.

The fast-growing Indian venture reported a net loss of 164 million rupees in the quarter ended September, according to AirAsia’s latest accounts.

“AirAsia India is still incurring start-up losses and in negative equity so it is challenging to ascribe much value to the business at this point,” said Corrine Png, the CEO of transport research firm Crucial Perspective.

However, she said if the Indian venture grew its fleet to 20 and turned profitable, AirAsia’s 49% stake could be worth US$200 million based on listed Indian airline rivals. – Reuters

AirAsia CEO says India unit explores IPO

KUALA LUMPUR, Jan 10 — Malaysia-based carrier AirAsia Bhd’s India unit is looking at a potential initial public offering, the group’s chief executive, Tan Sri Tony Fernandes, said this morning. The company will seek approval at AirAsia…

AirAsia CEO says India unit explores IPO


KUALA LUMPUR: Malaysia-based carrier AirAsia Bhd’s India unit is looking at a potential initial public offering, the group’s chief executive, Tony Fernandes, said on Wednesday.

MB World a ‘buy’ with Rapid development

PETALING JAYA: Hong Leong Investment Bank (HLIB) Research has initiated coverage on MB World Group Bhd with a “buy” call and a target price of RM2.75, offering a 32.2% upside from its current price.

The group’s share price was up 12 sen to RM2.20 today with 129,100 shares traded.

MB World, formerly known as Emas Kiara Industries Bhd, is mainly involved in property development and geotechnical engineering services.

In a note today, HLIB Research said it sees the group as the proxy for Petronas’ Refinery and Petrochemical Integrated Development (Rapid) expansion, given that its maiden township project is benefiting from the growth potential and spill-over effects from both developments in Pengerang and Desaru Coast.

Bucking the lacklustre trend of overall property market, the research house said MB World was able to achieve an overall take-up of more than 80% within a year after the launch of its projects, thanks to its first mover advantage.

Besides the key selling point of close proximity to Pengerang and Rapid projects, HLIB Research said the location also provides the residences a safe distance from the risk of severe environmental impact and pollution in Pengerang.

“Besides, the project is expected to fetch an attractive rental yield in the range of 6%-10% drawing the inference from the rental rate in the neighbour township,” it added.

In addition, HLIB Research said the group is a rising property player in Johor with a total gross development value of RM3.5 billion to be developed for the next 10 years.

The research house said the group’s revenue is expected to rise by three-years compound annual growth rate of 139% in anticipation of continue strong new sales in FY18 and FY19, having achieved about RM566 million sales (excluding Pinnacle Tower project) in FY17.

Furthermore, it said the sustainability of earnings is supported by the unbilled sales of RM275 million as of Q3 FY17 and healthy margin given its low land cost.

“We forecast FY17 and FY18 core earnings at RM27 million (up 70% y-o-y) and RM44 million (up 64% y-o-y), respectively,” it added, noting there is a potential increase in dividend following the projected high earnings growth.