ta securities

 
 

Sinmah Capital to diversify into healthcare

PETALING JAYA: Poultry and property player Sinmah Capital Bhd is acquiring two properties in for a combined RM27 million as part of its plan to diversify into the healthcare business.

In a filing with Bursa Malaysia, Sinmah said the proposed diversification is part of its long-term growth plan to venture into other revenue-generating businesses, in order to mitigate its reliance on poultry and property businesses.

The group is presently involved in poultry, investment holdings, provision of management services, property development and construction.

“The proposed diversification will provide the group with the opportunity to diversify its earnings by venturing into the provision of healthcare services by owning, constructing and operating hospitals providing medical services. The additional revenue contribution from the provision of healthcare services is expected to contribute positively to the group’s future revenue stream and profitability,” it said.

The group said it has the capacity, capabilities and resources to diversify into the healthcare business and will be engaging with reputable healthcare professionals for guidance on greenfield set-up, operational tie-up, management support and resources sharing for the operations of the new business.

SAH Medical Center Sdn Bhd, a 95%-owned subsidiary of Sinmah Amegajaya Healthcare Sdn Bhd, which in turn is a 70%-owned subsidiary of Sinmah, is acquiring a three-star hotel for RM23 million cash and a six-storey commercial building for RM4 million cash from The Aston Holiday Sdn Bhd. Both properties are located on freehold land in Nilai.

The group intends to redevelop the non-operational three-star hotel into an integrated public-private university hospital, which will encompass a public wing and private wing complemented by other functional components including centres of excellence, specialist consultation suites and other ancillary facilities.

The construction of the hospital is expected to commence in the second quarter of 2019 and completed by the second quarter of 2021, subject to the relevant authorities’ approval.

The estimated development cost of the hospital is about RM58 million while the medical equipment cost is about RM15 million.

Meanwhile, the six-storey commercial building will be refurbished into an administrative office for the hospital and/or a hospital expansion, which will be decided at a later stage.

The proposed acquisition of the two properties will be funded via internally generated funds and/or bank borrowings, and will be completed in the second quarter of 2019.

The proposed diversification is subject to approval from the company’s shareholders. TA Securities Holdings Bhd has been appointed as the adviser for the proposals.


Toll hike freeze seen as ‘mildly positive’ for concessionaires

PETALING JAYA: TA Securities views the toll hike freeze on 21 highways across the country next year as mildly positive for toll concessionaires, as the operators can avoid traffic reduction arising from higher toll rates imposed on road users.

In the past, toll highway operators typically experienced a slight decline in traffic volume immediate after a toll rate increase, followed by a gradual recovery in traffic volume as demand for toll roads is largely inelastic, it said in a note last Friday.

Additionally, it said, the toll operators will receive compensation from the government to cover the difference between entitled toll rates under the concession agreements and the actual toll rates charged on end-users.

However, on a broader outlook, TA Securities said, the toll concessionaires are still surrounded with uncertainties following the change of government, noting the Pakatan Harapan government is studying the best method to fulfil its 14th general election manifesto promise.

Last Thursday, the government announced its decision to freeze all toll hikes on 21 highways for all vehicles which are eligible for an increase in 2019, as well as a toll increase freeze for buses on eight highways, and the abolishment of motorcycle tolls.

Earlier this month, the Works Ministry said it would appoint an independent auditor in January to assist the government in preparing data analysis and recommendations, including reduction of toll rates in the short, medium and long term, and eventually abolishing toll collection on all expressways.

The analysis of the results is expected to be ready by May.

“With a reduced upside after a rebound in share price, we downgrade Lingkaran Trans Kota Bhd (Litrak) from ‘buy’ to ‘hold’, with an unchanged target price of RM4.54,” TA Securities said.

Separately, MIDF Research said it maintained its “buy” call for Litrak with an unchanged target price of RM4.92 per share, saying the toll operator is still a defensive player with decent dividend yield of 7.3% for financial year 2020 (FY20).

Litrak, which operates the Damansara-Puchong Highway (LDP) and the Sprint Highway, closed unchanged at RM4.11 on 33,800 shares done last Friday.

MIDF Research said that following the freeze on toll rate increases, compensation by the government to Sprint will rise as the Penchala toll plaza is due for a rate hike in next year.

MIDF Research estimated that the overall compensation to Litrak is set to increase to above RM170 million in FY19 and FY20 while earnings contribution from the concessionaires will be unchanged.

However, it said there will be no changes in compensation for the LDP as the toll rates remain unchanged.

“As our current traffic volume and earnings forecasts have taken into account the freeze of toll hikes on intra-city tolls in the country for 2019 as per the Budget 2019 announcement, we are maintaining our earnings estimates at this juncture,” MIDF Research added.


TA Securities maintains ‘buy’ call on Genting despite new lawsuit

PETALING JAYA: TA Securities, which maintained a positive outlook on Genting Bhd, said it would be a big negative surprise to the market if the group fails to defend itself in the latest US$4 billion (RM16.7 billion) copyrights infringement lawsuit slapped against it.

“If Genting fails in defending this case, it will be a big negative surprise to the market as it is hard to imagine that all project designers and consultants involved in the project failed to identify the possible trademark infringement,” it said in a research note today.

Nonetheless, TA Securities believes that the recent sell-off in Genting shares on the back of the risk emanating from the termination of the 20th Century Fox theme park and the infringement of copyright of the Wynn Resorts Holdings buildings was overdone.

On that note, it is maintaining a “buy” call on Genting with a target price of RM8.80.

Genting’s share price rebounded 7 sen or 1.2% to RM6.09 today, while Genting Malaysia was up 2 sen or 0.7% to RM2.97.

To recap, Wynn Resorts, which owns the Wynn and Encore Resorts in Las Vegas, Nevada in the US, has filed a US$4 billion lawsuit against Resorts World Las Vegas (RWLV), which is accused of copying Wynn’s building design for the casino that it is building just across the road.

Wynn claimed that RWLV wants to mislead the public into believing its new 3,000-room project is affiliated with Wynn.

“We reserve our comments on the litigation. However, we would like to highlight that Genting’s interest in Las Vegas started with this abandoned Echelon project from Boyd Gaming, where Genting bought over the site in 2013 for US$350 million. It is believed that Echelon’s foundations and partially built hotel towers as well as an unfinished parking garage on the property’s southwest corner, would be incorporated into the new project,” said TA Securities.

Phase one of RWLV is expected to commence by end of 2020. However, if the court granted the injunction to Wynn, this project would likely be delayed.

TA Securities has not changed its earnings forecasts for Genting pending the final outcome of the litigation. Based on its projections, the group is expected to record a net profit of RM1.32billion, RM1.97billion and RM2.23 billion for FY18, FY19 and FY20 respectively.


Gagasan Nadi Cergas IPO 20 times oversubscribed

PETALING JAYA: The initial public offering (IPO) of construction and facilities management services provider Gagasan Nadi Cergas Bhd available for public subscription has been oversubscribed by 20.2 times.

The group said in a statement that it received a total of 6,029 applications for 423.5 million shares worth a total of RM127 million for its public tranche of 20 million shares that were made available for application by the Malaysian public under its IPO scheme.

The group, which is slated to be listed on Bursa Malaysia’s ACE Market on Jan 8, 2019, expects to raise RM42 million proceeds from the public issue, mainly to be used for working capital.

Its managing director Wan Azman Wan Kamal said the oversubscription of the public tranche, together with strong response from investors for the private placement portion, signifies the confidence of the investing community in its business viability and ability to grow in the future.

The IPO entails a public issue of 140 million new shares and offer for sale of 60 million existing shares at 30 sen per share, representing 26.6% of the group’s enlarged share capital.

The total proceeds from the offer for sale of RM18 million will accrue entirely to the offerors.

Going forward, Wan Azman said the group intends to continue its strategic direction to expand recurring income from long-term contracts through its utilities segment.

As at Nov 15, 2018, the group’s construction order book stood over RM600 million.

The group has established a dividend policy of distributing up to 30% of net profit as dividends, from the financial year ending Dec 31, 2019 onwards.

TA Securities Holdings Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.


(ikanadi) ACE Market-bound Gagasan Nadi Cergas unperturbed by negative sentiment

** Pix OPTIONAL **

BY WAN ILAIKA MOHD ZAKARIA

[email protected]

KUALA LUMPUR: Construction player Gagasan Nadi Cergas Bhd, which is en route for listing on the ACE market on Jan 8, 2019, is unperturbed by the weak sentiment in the construction space as it sees positive growth prospects with its strong order book.

The group, which aims to raise RM42 million from its initial public offering (IPO) exercise, has a total order book of over RM600 million as at Nov 15, 2018 and will sustain until 2021.

Speaking at a press conference in conjunction with its prospectus launch yesterday, the group’s managing director Wan Azman Wan Kamal said the group is currently tendering for RM700 million worth of public and private sector projects and expect to see growth in order books going forward.

“I believe that we will be able to secure more jobs in the coming future. In terms of (the group’s) earnings, we have a steady recurring income coming from our concession (projects).

“So I think it should be okay. We are not worried (too much) on this issue,” Wan Azman added, noting the 60% of the group’s earnings come from the construction segment while the remaining 40% from recurring income.

Meanwhile, TA Securities Holdings Bhd’s head of corporate finance Ku Mun Fong believes there is still demand for good fundamental stocks like Gagasan Nadi Cergas.

“Sentiment do play a part. Depending on the market, the investors at large are still looking at fundamental companies to invest.

“Besides that, the group will only be listed in January next year. Next year is a new year, hopefully the investors will be able to consider good fundamental stocks like Gagasan Nadi Cergas ,” Ku added.

TA Securities is the principal adviser, sponsor, underwriter and placement agent for the group’s IPO exercise.

The group’s IPO entails a public issue of 140 million new shares and an offer for sale of 60 million existing shares at 30 sen per share.

Out of the 140 million new shares, 20 million shares will be for application by the Malaysian public and 20 million shares for application by eligible directors, employees and persons who have contributed to the success of the group. The remaining 100 million shares are allocated for private placement to identified investors.

Of the total proceeds raised, RM14 million will be allocated for funding of Asean Football Federation (AFF) mixed development; RM6.5 million for capital expenditure under Datum Jelatek development; RM16.5 million for working capital; and RM5 million for estimated listing expenses.

Meanwhile, the offer for sale of 60 million existing shares that will raise some RM18 million, will be allocated for private placement to identified investors.

Gagasan Nadi is primarily involved in four business segments, namely building construction, provision of facilities management services as concessionaires, operations of district cooling system for the supply of chilled water and electricity distribution, and property development.

The group currently holds three long-term recurring income contracts, including two 20-year student hostel concession projects and a 20-year operation contract to supply chilled water to the German-Malaysian Institute.


ACE Market-bound Gagasan Nadi Cergas unperturbed by negative sentiment

KUALA LUMPUR: Construction player Gagasan Nadi Cergas Bhd, which is en route for listing on the ACE market on Jan 8, 2019, is unperturbed by the weak sentiment in the construction space as it sees positive growth prospects with its strong order book.

The group, which aims to raise RM42 million from its initial public offering (IPO) exercise, has a total order book of over RM600 million as at Nov 15, 2018 and will sustain until 2021.

“I believe that we will be able to secure more jobs in the coming future. In terms of (the group’s) earnings, we have a steady recurring income coming from our concession (projects),” said group managing director Wan Azman Wan Kamal at the prospectus launch today.

Meanwhile, TA Securities Holdings Bhd’s head of corporate finance Ku Mun Fong believes there is still demand for good fundamental stocks like Gagasan Nadi Cergas.

“The group will only be listed in January next year. Hopefully the investors will be able to consider good fundamental stocks like Gagasan Nadi Cergas ,” Ku added.

The group’s IPO entails a public issue of 140 million new shares and an offer for sale of 60 million existing shares at 30 sen per share.

Out of the 140 million new shares, 20 million shares will be for application by the Malaysian public and 20 million shares for eligible directors and employees. The remaining 100 million shares are allocated for private placement to identified investors.

Of the total proceeds raised, RM14 million will be allocated for funding of Asean Football Federation (AFF) mixed development; RM6.5 million for capital expenditure under Datum Jelatek development; and RM16.5 million for working capital.


Leveling the broadband playing field

As the backbone of the digital economy, internet connectivity – or high speed internet connectivity in particular – is vital to ensure a nation’s continued digital growth at optimum speed. For the nation to develop its digital economy, high speed internet connectivity needs to be easily accessible by the mass market. However, even as internet […]


Soda tax is near-term bitter for F&N but outlook remains sweet

images

THE implementation of a soda tax on all sugar sweetened beverages next April makes Malaysia the fourth country in Southeast Asia to tackle serious health issues related to excessive sugar intake. Brunei and Thailand were quicker to implement the excise tax in an attempt to reduce sugar consumption, followed at the beginning of the year by the Philippines. The recently tabled Budget 2019 proposed a 40 sen tax per litre on drinks containing more than 5g of sugar or sugar-based sweetener per 100ml as well as fruit and vegetable juicesRead More


Securemetric aims to raise RM17 mln from IPO

KUALA LUMPUR: Cyber security company, Securemetric Bhd, aims to raise RM17 million from its initial public offering (IPO) at 25 sen per share. The company will be retailing 17 million shares to the public till Oct 30 and is slated for listing on the ACE market on Nov 13. It will also issue 48 million […]


Bonia’s subsidiary CRG Inc to be listed on LEAP Market by end of November

PETALING JAYA: Bonia Corp Bhd's wholly owned subsidiary CRG Incorporated Bhd, which is the design, marketing and distribution company for Carlo Rino and CR2 brands, is expected to be listed on the LEAP Market of Bursa Malaysia Securities by end of November.

Outlining its plans in the information memorandum released today, CRG said it aims to increase its geographical footprint in Southeast Asia and the Middle East. This includes developing a strong online presence for its Carlo Rino brand in Southeast Asia over the next five years, to tap into the e-commerce market in the region which is expected to grow to US$29.4 billion (RM122.2 billion) in sales by 2020.

It has also granted Kafak the exclusive rights to use the Carlo Rino brand, as well as operate and manage boutiques carrying the Carlo Rino range in the Middle East for five years, with a five-year renewable period.

“Through this distributorship arrangement, we intend to expand our retail presence to other countries in the Middle East, including the UAE, Qatar and Bahrain,” it said.

In terms of expanding its product range, CRG said it is in the midst of undertaking research on the market for accessories and fashion-related collections, with the aim of launching various accessory product ranges over the next five years.

Its products are generally targeted at young working adults between 18 and 35 years old.

CRG's principal markets are Malaysia, Indonesia and Vietnam. In Malaysia, it has 39 boutiques and outlets, and 120 department store counters. It also has authorised distributors/dealers in Vietnam, Indonesia, Saudi Arabia and Brunei.

According to an information memorandum by the approved adviser and continuing adviser, TA Securities Holdings Bhd, the distribution of CRG shares to entitled shareholders and cash payout, to entitled shareholders who hold less than 100 Bonia shares, is expected to take place in mid-November.

The demerger of CRG involves a series of transactions namely capitalisation, subdivision, conversion and dividend-in-specie. The capitalisation, subdivision and conversion have been completed as of Aug 13.

Bonia will distribute via a dividend-in-specie, its entire shareholding in CRG and rights to CRG shares, to the entitled shareholders on the basis of one CRG share for every one Bonia share, upon receipt of approval-in-principle from Bursa Malaysia Securities for the listing.

The completion of the dividend-in-specie will result in the demerger of CRG from Bonia, and the entitled shareholders will directly hold shares in the same proportion as their shareholdings in Bonia, except for those who hold less than one board lot of Bonia shares, who will be paid cash in lieu of the number of shares they are entitled to.