RHB maintains 'buy' call for Petronas Chemicals

KUALA LUMPUR, Jan 15 — RHB Research has maintained the “buy” call on its top pick oil and gas counter, Petronas Chemicals Group Bhd (PCG), with a new target price of RM11.23. It said PCG’s recent share weaknesses, had been largely priced in…

Sarawak’s internet speed to be 98 per cent faster with Xiddig’s EM-IIG project

KUCHING: Xiddig Cellular Communications Bhd’s (Xiddig) Malaysia International Internet Gateway (EM-IIG) project aims to provide new job opportunities in Sarawak and consequently up the state’s internet speed to satisfy local demand. According to Xiddig Sarawak chairman Datuk Justin Jinggut at a briefing for local contractors on the fibre optic cable installation in Sarawak, this project will […]

FedEx opens RM17.6m integrated facility in Penang

GEORGE TOWN, Jan 10 ― FedEx Express launched its RM17.6 million FedEx Penang Gateway facility in Batu Maung today. The new facility is an integrated warehouse and sorting facility for both FedEx and TNT operations in the region. It will serve as a…

Gagasan Nadi Cergas makes lukewarm debut

PETALING JAYA: Despite rising as much as 33.3% to an intraday high of 40 sen, Gagasan Nadi Cergas Bhd ended its first trading day on the ACE Market of Bursa Malaysia with merely a premium of 0.5 sen or 1.7%.

The stock debuted at a premium of 9 sen to 39 sen at the opening bell, but it pared gains on selling pressure and closed at 30.5 sen on 118.6 million shares changing hands, being the second most actively traded counter.

Gagasan Nadi Cergas managing director Wan Azman Wan Kamal said the group intends to continue its efforts in actively tendering for both public and private sector projects.

“Going forward, we remain positive of the Malaysian construction sector outlook and believe that there are many more projects, such as education institutions, affordable housing and medical centers to be built in the near future.”

“We believe our listing today places us in a good position to support these nation-building initiatives. Additionally, our long-term contracts provide us with a stable foundation of recurring income, as we concurrently endeavour to secure new jobs and deliver ongoing works.”

Gagasan Nadi Cergas’s construction order book includes Rumah Selangorku in Putra Heights and Bukit Raja, 1Malaysia People’s Housing in Pasir Mas, Cardiology Centre for Hospital Serdang and Maktab Rendah Sains Mara in Bagan Datuk.

It also holds long-term contracts, namely a 20-year facility management concession for hostels of International Islamic University Malaysia in Kuantan, Pahang till 2034; a 20-year facility management concession for hostels of Universiti Teknikal Malaysia Melaka in Durian Tunggal, Malacca till 2037; a 20-year operation contract for a District Cooling System (DCS) to supply chilled water to the German-Malaysian Institute, Bangi till 2028 and upcoming 30-year operation contract for a DCS and electricity distribution under the Datum Jelatek development.

Gagasan Nadi Cergas plans to raised RM60 million from its IPO with RM42 million via public issue of new shares and RM18 million from the sale of existing shares.

Some RM14 million will be allocated for funding of the Asean Football Federation mixed development; RM6.5 million for capital expenditure of DCS under the Datum Jelatek development; and RM16.5 million for working capital.

Aviation industry shows greater operational efficiency in 2018

KUALA LUMPUR: Malaysia’s aviation industry had a fairly ‘stable’ 2018 with airlines showing greater efficiency in operations but overall growth has been slowing down as the industry heads towards a matured phase. Maybank Kim Eng analyst Mohsin Aziz said growth in passenger movement for this year was likely to be two per cent, relatively lower […]

Bina Puri’s plans to raise stake in IHP “fair and reasonable”

PETALING JAYA: Bina Puri Holdings Bhd’s proposed acquisition of an additional 54.5% stake in Ideal Heights Properties Sdn Bhd (IHP) is deemed “fair and reasonable” and not detrimental to the shareholders.

“We recommend the non-interested shareholders to vote in favour of the resolution pertaining to the proposed acquisition to be tabled at the company’s forthcoming EGM,” said Inter-Pacific Securities Sdn Bhd in its independent advice letter.

Earlier in August, Bina Puri announced plans to make IHP an indirect subsidiary by buying out stakes of six shareholders through the issuance of new Bina Puri and redeemable preference shares (RPS) in a RM42.7 million related party transaction.

Bina Puri already owns a 12% stake in IHP and will acquire an additional 54.5% via the proposed stake acquisition. IHP is the developer of Kuantan Waterfront Resort City (KWRC).

Bina Puri plans to issue 95.1 million new ordinary shares at an issue price of 24.98 sen per share to satisfy RM23.8 million; a sum of RM10.1 million to be satisfied via the issuance of 40.4 million RPS at an issue price of 24.98 sen a piece and RM8.8 million via the issuance of up to 35.3 million RPS at an issue price of 24.98 sen a piece.

According to Inter-Pacific Securities, the issue price of 24.98 sen per consideration share is at a premium above the five-day VWAP up to and including Aug 27, 2018 being the last trading day prior to the announcement of the proposal.

It said that the price-to-book (PB) multiple of Bina Puri based on the issue price of the consideration share of 0.29 times is within the PB multiples range of the selected comparable companies from 0.26 times to 0.38 times.

“We are of the view that the issue price of 24.98 sen per consideration share is fair,” it said.

It said that the terms of the sale and purchase agreement are reasonable and not detrimental to the shareholders. The financial effects of the proposed acquisition are also not detrimental to the shareholders.

“We are of the view that the prospects of the IHP group pursuant to the proposed acquisition are positive after taking into consideration, among others, the outlook of the Malaysian economy, which is expected to grow steadily and the prospects of the property market within the locality of the KWRC project,” it added.

FGV expects no major impairments with RM788m hit in Q3

KUALA LUMPUR: FGV Holdings Bhd expects no more major impairments after being dragged into the red for the third quarter ended Sep 30, 2018, due to a RM788.0 million impairment cost.

FGV reported a net loss of RM849.3 million for the third quarter ended Sep 30, 2018, compared with a net profit of RM41.5 million for the corresponding quarter in 2017.

Of this, its charges for Asian Plantation Ltd (APL) accounted for 65% of the total impairments, with RM513 million.

“The biggest one is APL and we have also added in the rest as well, so there shouldn’t be anymore but under the normal cost of business you will have impairment relating to receivables. That’s the normal cost of business, which every business will experience, but exceptional impairments like this, no,” explained FGV chairman and interim CEO Datuk Wira Azhar Abdul Hamid.

Last Friday, FGV announced that it’s dragging 14 former directors and members of management to the docks for the losses arising from the acquisition of APL or alternatively, damages for loss from the acquisition to be assessed by the court. FGV is seeking relief against the defendants for damages totaling RM514 million.

Besides APL, FGV also recognised an impairment of RM53 million for the acquisition of FGV Cambridge Nanosystems Ltd in 2013; RM1.22 million for the acquisition of two units of Troika condominiums; and RM102 million for FGV Green Energy Sdn Bhd, which could not commence operations of a biodiesel plant in Kuantan Port for US$22.5 million.

On the current state of its finances, Azhar noted that while profit has been heavily impacted, cashflow is not an issue.

“From Q1 onwards and let’s say if the numbers still don’t stack up the only people we need to look for is the current management. We are quite confident, we know a lot of issues out there and we can see the initiatives we are taking are actually bearing fruit ,” he said.

An immediate three to six months plan is to optimise it’s cost and efficiency, improve agricultural practices to enhance productivity and improve quality.

It has forecast crude palm oil (CPO) to range between RM1,900 – RM2,100 per metric tonne.

FGV is looking at settlers and third party producers to enhance utilisation of its mills which in turn will potentially increase its CPO production by 10%.

“The objective for FGV moving forward is to minimise our role as a seller of CPO and add value to downstream, looking seriously at what we can do further as far as our downstream operations is concerned, and basically look at our overall integrated value addition,” he added.

FGV continues to focus on correcting its age profile, which at the time of listing was amongst the worst in the industry with 53% of its trees classified as “old”.

“This is an expensive commitment, but we have no choice. The old trees need to be replanted,” Azhar explained.

He expects much better upstream achievement of 20 MT per ha and a much reduced exmill cost of RM1,600 in 2019, with its intiatives.

Commenting on the white paper on Federal Land Development Authority (Felda) to be tabled in Dewan Rakyat on Dec 10, Azhar said he is not fully aware of it although there have been talk of privatisation, and Felda taking back the land under the land lease agreement (LLA), doing the rounds.

“If you look at the LLA let’s say as an extreme example. I’m not saying it’s going to happen, but as an example, let’s say we see Felda taking back the estate under the LLA…there is a compensation formula there as well,” he added.

According to Azhar, remaining at a status quo is the better option.

10 things to look out for in Budget 2019


IF the mid-term review of the 11th Malaysia Plan is a gauge of how the Pakatan Harapan government will frame economic policies, then Budget 2019, to be unveiled tomorrow, will be different. The tone of Budget 2019 is expected to be one where the government keeps a tight lid on the purse strings, as it is down by some RM35bil due to unpaid taxes this year. On top of that, Pakatan Harapan has declared that the federal government debt stands at RM1.087 trillion and not RM686.8bil as stated by theRead More

SMSL, Geenpeace pressure Lynas for permanent disposal facility

KUCHING: Save Malaysia Stop Lynas (SMSL) and Greenpeace Malaysia yesterday maintained that Lynas Corporation must identify a permanent disposal facility (PDF) for wastes produced at its Kuantan refinery, despite the rare earth refiner announcing recycling measures. Australian miner Lynas Corporation said it has been granted an extension to a temporary permit to store residue at […]

Govt welcomes German autos for car project

KUALA LUMPUR: The government is opening its door to German automakers to participate in the third national car project, says the Ministry of International Trade and Industry (MITI). Deputy Minister Dr Ong Kian Ming said there were a lot of German car companies which had been very successful in assembling completely knocked-down (CKD) vehicles with a […]