Stocks In Focus MY (GuocoLand (M), Kanger Int’l, LPI Capital) – 08/04/15
GuocoLand 3Q15 Net Profit Falls 26%
GuocoLand (Malaysia)’s net profits for the third quarter ended 31 March 2015 dropped 26 percent to RM11.6 million from RM15.7 million last year, while revenue fell9.7 percent to RM52.8 million.
The weaker sales was attributable to lower contribution from the group’s commercial development segment, partially offset by better performance in residential development.
For the nine-month period, the group’s net profit declined 57.4 percent to RM17.4 million on the back of a 23.5 percent contraction in revenue to RM136.6 million, coupled with higher finance costs and lower share of results of associates and joint ventures.
Significance: Going forward, the group expects the property market outlook and sentiment to remain cautious, amid credit tightening rules and uncertain economic environment, with its performance expected to be challenging in FY15.
Kanger Eyes 30% Sales Growth
Kanger International, a China bamboo flooring manufacturer, is eyeing for 30 percent sales growth this year from RM66.7 million last year.
To achieve the target, the firm plans to widen its network in China to 80, up from the current 30. It is also looking to expand its product line into bamboo-based furniture in the near term as there is demand from both local and export markets.
At the extraordinary general meeting held on 7 April, the group’s shareholders approved the proposed diversification of principal activities to include property investment and management, with the issuance of redeemable convertible note programme of up to RM100 million, which would be utilised for construction of a commercial building, expansion of dealership, acquisition of land, business expansion and working capital.
Significance: Kanger has plans to build a 19-storey commercial building in Jiang Xi Province, that will be leased to a Vienna Hotel chain to provide a stable recurring income. Management has expressed that they hope to pay dividends 2017 and noted that there is reduction in competition due to the folding of several competitor companies.
LPI Sees 13% Jumps in 1Q15Earnings
LPI Capital‘s net profit for the first quarter ended 31 March 2015 jumped 13.1 percent to RM57.2 million, on the back of a 5 percent increase in operating revenue to RM291.7 million. The better performance was attributed to improvements in results of its wholly-owned insurance subsidiary, Lonpac Insurance.
In 1Q15, Lonpac reported a pre-tax profit of RM53.3 million, a 13.6percent increase year-on-year, as it achieved higher gross and net premium income, coupled with a lower claims incurred ratio of 49.1 percent (1Q14: 50.8 percent).
Notwithstanding the compressed margins and slower market growth, LPI will prioritise shareholder return over premium growth in the insurance segment. Prudent underwriting risk assessment and selection, as well as sound claims management will continue to its key business strategy towards market expansion.
Significance: Facing external economic weaknesses and intense competition, the group said it will continue to implement business innovation and improve its productivity and operational efficiency. The group remains optimistic, hoping to see satisfactory growth in its overall operation.
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GuocoLand 3Q15 Net Profit Falls 26%
GuocoLand (Malaysia)’s net profits for the third quarter ended 31 March 2015 dropped 26 percent to RM11.6 million from RM15.7 million last year, while revenue fell9.7 percent to RM52.8 million.
The weaker sales was attributable to lower contribution from the group’s commercial development segment, partially offset by better performance in residential development.
For the nine-month period, the group’s net profit declined 57.4 percent to RM17.4 million on the back of a 23.5 percent contraction in revenue to RM136.6 million, coupled with higher finance costs and lower share of results of associates and joint ventures.
Significance: Going forward, the group expects the property market outlook and sentiment to remain cautious, amid credit tightening rules and uncertain economic environment, with its performance expected to be challenging in FY15.
Kanger Eyes 30% Sales Growth
Kanger International, a China bamboo flooring manufacturer, is eyeing for 30 percent sales growth this year from RM66.7 million last year.
To achieve the target, the firm plans to widen its network in China to 80, up from the current 30. It is also looking to expand its product line into bamboo-based furniture in the near term as there is demand from both local and export markets.
At the extraordinary general meeting held on 7 April, the group’s shareholders approved the proposed diversification of principal activities to include property investment and management, with the issuance of redeemable convertible note programme of up to RM100 million, which would be utilised for construction of a commercial building, expansion of dealership, acquisition of land, business expansion and working capital.
Significance: Kanger has plans to build a 19-storey commercial building in Jiang Xi Province, that will be leased to a Vienna Hotel chain to provide a stable recurring income. Management has expressed that they hope to pay dividends 2017 and noted that there is reduction in competition due to the folding of several competitor companies.
LPI Sees 13% Jumps in 1Q15Earnings
LPI Capital‘s net profit for the first quarter ended 31 March 2015 jumped 13.1 percent to RM57.2 million, on the back of a 5 percent increase in operating revenue to RM291.7 million. The better performance was attributed to improvements in results of its wholly-owned insurance subsidiary, Lonpac Insurance.
In 1Q15, Lonpac reported a pre-tax profit of RM53.3 million, a 13.6percent increase year-on-year, as it achieved higher gross and net premium income, coupled with a lower claims incurred ratio of 49.1 percent (1Q14: 50.8 percent).
Notwithstanding the compressed margins and slower market growth, LPI will prioritise shareholder return over premium growth in the insurance segment. Prudent underwriting risk assessment and selection, as well as sound claims management will continue to its key business strategy towards market expansion.
Significance: Facing external economic weaknesses and intense competition, the group said it will continue to implement business innovation and improve its productivity and operational efficiency. The group remains optimistic, hoping to see satisfactory growth in its overall operation.
http://www.sharesinv.com
