KUALA LUMPUR (April 25): Based on corporate news flow and announcements today, stocks in focus tomorrow (Tuesday, April 26) could include: Dayang Enterprise Holdings Bhd, Mega First Corp Bhd, Malaysian Resources Corp Bhd (MRCB), Tanah Makmur Bhd, Imaspro Corporation Bhd, Voir Holdings Bhd, Dutch Lady Milk Industries Bhd, United Plantations Bhd, Bina Darulaman Bhd, Pensonic Holdings Bhd, Axis REIT, Hektar REIT, British American Tobacco (M) Bhd (BAT), Texchem Resources Bhd and Integrated Logistics Bhd.
Dayang Enterprise Holdings Bhd’s wholly-owned subsidiary Dayang Enterprise Sdn Bhd (DESB) has bagged a contract worth up to RM42 million to provide topside maintenance services for Kebabangan Petroleum Operating Co Sdn Bhd.
The contract is for a two-year period starting March 16, with an option to extend for one additional year, valued between RM25 million and up to RM42 million.
Dayang said it expects the contract to contribute positively to its earnings and net assets per share.
Mega First Corp Bhd's 51%-owned unit, Serudong Power Sdn Bhd (SPSB), expects to receive RM7.74 million, a partial award from Sabah Electricity Sdn Bhd (SESB), following a decision made by the Kuala Lumpur Regional Centre for Arbitration Rules.
The sum is in relation to a shortfall in energy and capacity payments for the period between Nov 15, 2007 and Dec 31, 2015 (inclusive of goods and services tax), within 30 days of receiving invoices for the amount from SPSB, without prejudice to the latter's claims in the arbitration.
It said by the partial award, the arbitral tribunal also permitted SPSB to invoice SESB, using a particular fixed operating rate (FOR) and variable operating rate (VOR) stipulated by SESB in the billings for the period from January 2016 to November 2016, without prejudice to SPSB's claims in the arbitration.
Any payments made in accordance with the terms of the partial award may be taken into account by the arbitral tribunal in the making of its final award and in determining the issue and amount of costs and/or interest (if any) in the arbitration, it said.
However, it said the partial award will not have a material impact on the earnings and the net assets of Mega First for the financial year ending Dec 31, 2016.
Malaysian Resources Corp Bhd (MRCB) said the Employees Provident Fund (EPF) has offered to acquire an 80% interest in ‘exchange’ land that the company will be receiving under the National Sports Complex privatization project, for RM421.5 million.
MRCB will hold the remaining 20% stake in the 11.4 hectare (ha) land in Bukit Jalil.
The land is part of three parcels of leasehold “exchange land”, totaling 37.4 ha, to be transferred by the Youth and Sports Ministry and Syarikat Tanah and Harta Sdn Bhd (Hartanah) to Rukun Juang Sdn Bhd, owned 85% by MRCB Land Sdn Bhd, which in turn is a wholly-owned unit of MRCB.
The three parcels of land make up the RM1.632 billion consideration for the privatisation job undertaken by MRCB to refurbish and upgrade facilities at the National Sports Complex.
Rakun Juang was selected to undertake the job on Oct 28 last year in an open tender, and subsequently entered into a privatisation agreement with the federal government and Hartanah.
MRCB said EPF would settle the disposal consideration for `Exchange Land 1’ in two tranches — the first totalling RM397 million (or alternatively calculated on the basis of RM405 per sq ft), and the second totaling RM24.5 million (or alternatively calculated on the bases of RM25 per sq ft).
The interest shall be delivered to EPF upon the receipt of the tranche one purchase price in full by Rakun Juang, MRCB added, saying EPF would be appointed as its main contractor or project delivery partner to the development of the land.
EPF undertakes that it shall enter into a joint venture agreement, a conditional sale and purchase agreement and other related agreements in connection with the sale and purchase of the Interest in the Entity, within 12 months from April 22.
The Crown Prince of Pahang Tengku Abdullah Ibni Ahmad Shah and the parties acting in concert have proposed a selective capital reduction (SCR) to buy out the 158.504 million or 39.81% of Tanah Makmur Bhd entitled shares at RM285.13 million or RM1.80 apiece, before cancelling out those shares and effectively privatising the oil palm planter, bauxite miner and property developer.
The price offered by the Tengku Abdullah comes at a 33 sen or 22.45% premium to the last closing price of RM1.47. Tanah Makmur’s counter was suspended today to make way for this announcement.
Tengku Abdullah said in a letter to the company today that this is the time for shareholders to realise their investments at a premium ranging from 22.45% to 30%.
“The trading liquidity of Tanah Makmur shares have also been low, with an average daily trading volume of 498,000 Tanah Makmur shares… representing 0.42% of the free float as at April 22, 2016,” he said in the letter.
Imaspro Corporation Bhd (Imaspro) has entered into a share sale agreement with Mosfly International Sdn Bhd (MISB)’s shareholders to acquire 16,516,500 ordinary shares of RM1.00 each, representing the entire equity interest in the share capital of MISB, for a total cash consideration of RM26 million. Upon completion of the proposed acquisition, MISB will become a wholly-owned subsidiary of Imaspro.
The purchase consideration will be satisfied by internally-generated funds and bank borrowings. The exact mix of internally-generated funds and bank borrowings will be decided by the management at a later date.
MISB is involved in trading of mosquito coils, disinfectants and household insecticides, and currently has a 50% shareholding company, namely Mosfly Vietnam Industries Co. Ltd (Mosfly Vietnam) in Vietnam. As of Dec 31, 2015, MISB group’s net assets was RM3.82 million and loss after tax for the year was RM429,768, and its accumulated losses carried forward was RM12.70 million.
The proposed acquisition will complete Imaspro's business strategy in entering the business to consumer (B2C) sector, and allow it to enter into Vietnam household insecticide market as MISB is market leader in Vietnam.
Currently, Imaspro customers are mostly within the business to business (B2B) sector.
MISB has also managed to obtain a business license to import home care products into Vietnam and to distribute it locally. The total market share for home care products in Vietnam is estimated to be around RM5 billion in 2016.”
The proposed acquisition is expected to be completed by the second quarter of 2016.
The take-over offer by Vista Lestari Development Sdn Bhd to Voir Holdings Bhd has turned unconditional, with the same offer price at RM0.50 per share, a steep discount of about 30% to the 72 sen closing price today.
The unconditional take-over offer was for Vista Lestari to acquire 66.93 million shares, representing 50.71% equity in Voir and and 33.47 million warrants, representing 55.78% of the total outstanding warrants in Voir for a total cash consideration of RM36.48 million.
Pursuant to the Section 218(2) of the Capital Market and Services Act 2007 and and Section 9(1), Part III of the Malaysian Code on Take-Overs and Merges 2010, Vista Lestari is obliged to extend a mandatory take-over offer to acquire all remaining Voir shares and remaining warrants not already held by the offeror and its parties acting in concert (PAC), for a cash offer price of RM0.50 per offer share and RM0.09 per Offer warrant.
Voir said that the Board, save for Seow Khim Soon, Ham Hon Kit and Wong Seow Mooi who are deemed interested in the offer (interested directors), has deliberated on the offer and decided not to seek another person to make a take-over offer.
Furthermore, in accordance with Section 15(1) of the Malaysian Code on Take-Overs and Mergers, 2010, the Board (save for the interested directors) has resolved to appoint Mercury Securities Sdn Bhd as the Independent Adviser to advise the non-interested directors and the holders of the offer securities on the fairness and reasonableness of the offer, it added.
On the financial results front, Dutch Lady Milk Industries Bhd’s net profit almost doubled to RM33.89 million or 52.95 sen per share for the first quarter ended March 31, 2016 (1QFY16), compared with RM17.03 million or 26.60 sen a share last year.
The increased profit was driven by higher revenue and favourable dairy raw materials prices. However, the increment was partly offset by the weaker ringgit, the dairy product manufacturer said in a filing to Bursa Malaysia today.
Quarterly revenue grew nearly 27% to RM249.79 million against RM196.89 million last year, with improvement in all product categories.
Lower revenue in the previous corresponding quarter was due to the run-down of activities prior to the relaunch of the company's key products, Dutch Lady explained in the financial result announcement.
Despite the sharp jump in quarterly earnings, Dutch Lady did not declare any dividend.
Moving forward, Dutch Lady expects its business environment to remain challenging against the backdrop of weak consumer confidence, but it remains committed to leveraging on the strength of the Dutch Lady brand, as well as its quality product range of offerings.
United Plantations Bhd saw its net profit for the first quarter ended March 31, 2016 (1QFY16), fall 2% to RM59.76 million or 28.76 sen per share, from RM61.15 million or 29.43 sen per share the previous year.
The bottomline decline was despite a 11% increase in revenue to RM259.58 million, from RM233.92 million a year earlier (1QFY15).
Its plantations segment saw a 25% year-on-year (y-o-y) drop in pretax profit to RM60.3 million, due to lower production and higher costs of production during the quarter.
Crude palm oil (CPO) and palm kernel (PK) output increased by 19% and 7% respectively. The higher cost of production of CPO was due to higher manuring cost in the quarter under review, it said.
The group also registered a non-recurring gain of RM9.9 million, following a land acquisition by the government, for the West Coast Expressway.
Meanwhile, its refinery operations saw a surge in pretax profit to RM34 million, from RM3.5 million in the previous year, due to the reversal of unrealised foreign exchange losses, as the ringgit strengthened against the US dollar.
Notwithstanding the above, the extraordinary performance of the refinery for the first quarter is not a realistic reflection of the expected performance for the remaining quarters of 2016, added the group.
Going forward, United Plantations expects a challenging time ahead, amid the El Nino weather phenomenon, but anticipates satisfactory performance for the year, as significant nationwide drop in palm oil stocks in Malaysia which in turn has resulted in a notable recovery in prices, has turnedmarket view from bearish to bullish.
Bina Darulaman Bhd recorded a 36.8% fall in its net profit for the first quarter ended March 31, 2016 (1QFY16) to RM2.32 million, from RM3.67 million a year ago, as its property development segment incurred higher advertising and promotion costs to combat the soft real estate market in Malaysia during the current quarter.
The construction arm and property developer, however, raked in higher sales of RM46.68 million in 1QFY16, compared with RM36.74 million in 1QFY15, due to its property development arm BDB Land Sdn Bhd's sales of Taman Tunku Intan Shafinaz and Darulaman Perdana's houses.
The group expects its core businesses to record respectable performance for this financial year, since the group has sufficient land bank and projects in hand to provide sustainable revenue.
Despite challenging economic conditions, it expects to turn in "a respectable performance" for the current financial year ending Dec 31, 2016.
Electricity home appliances manufacturer Pensonic Holdings Bhd's net profit fell 16.4% to RM1.83 million or 1.41 sen per share for the third financial quarter ended Feb 29, 2016 (3QFY16), from RM2.19 million or 1.69 sen per share a year ago, due to the current adverse economic situation.
Pensonic's revenue for the quarter came in 9.1% lower at RM92.24 million from RM101.46 million in 3QFY15, mainly due to a challenging export market.
It explained that the export sales dropped by 31.3%, due to slowdown in the rate of economic growth in global.
For the cumulative nine months ended Feb 29, 2016 (9MFY16), the group’s net profit jumped 37.1% to RM6.83 million, from RM4.98 million a year ago, due to effort in streamlining in expenditure and cost saving management. This is despite cumulative revenue having slid 4.3% to RM282.63 million, from RM295.47 million in 9MFY15.
Pensonic said it will continue to explore new markets, product innovation and maintain excellent customer relationship, placing emphasis on cost control, inventory management and overhead cost rationalisation.
It will also carry on to promote and distribute its products to overseas customers, through engaging more overseas distributors and business partners as part of its strategy to expand into emerging markets,
Axis Real Estate Investment Trust (Axis REIT), which bills itself as the first shariah-compliant business space and industrial trust, grew its net property income by 0.21% in the first quarter ended March 31, 2016 (1QFY16) to RM35.68 million.
Its income distribution per unit (DPU) in the quarter was maintained at 2.05 sen, with a substantial portion — of two sen per unit — of the distributed income being taxable. Axis REIT Managers Bhd also suggested that unitholders can opt to reinvest up to one sen of the DPU into new units.
Axis REIT said its distributable income in the quarter was RM22.58 million in total, where 99.83% or RM22.55 million will be given to unitholders.
The DPU will be paid out on June 16, 2016.
Axis REIT’s revenue from its property business was up by 1.66% in 1QFY16 to RM41.22 million, while its net profit grew by 7.73% to RM25.12 million, from RM23.32 million a year earlier.
Axis REIT said that the manager is optimistic that in view of the current satisfactory performance of Axis REIT’s existing investment portfolio and its growth strategy to actively pursue quality acquisitions, it will be able to maintain its current performance for the coming quarter and the rest of FY16.
In other news, Axis REIT recorded a revaluation surplus of RM2.5 million for its Axis Shah Alam DC 1, bringing its net asset value to RM1.36 billion — or RM1.2326 per unit. Total asset value stood at RM2.16 billion, growing 0.8% from the year earlier.
Hektar Real Estate Investment Trust (Hektar REIT) meanwhile said its net property income (NPI) for the first quarter ended March 31, 2016 (1QFY16) was almost flat at RM18.67 million versus RM18.62 million a year earlier, while its revenue for the quarter grew 1.3% to RM31.6 million, from RM31.21 million in 1QFY15.
Its distributable income for the quarter amounted to RM10.42 million or 2.6 sen per unit.
Going forward, Hektar REIT expects retail business to remain challenging in 2016, especially in the light of the slowing economy.
Following the completion of its AEI (asset enhancement initiative) in Central Square, we expect positive contribution in the foreseeable future, it said.
British American Tobacco (M) Bhd (BAT), the largest tobacco company in the country, is requesting for a moratorium on further excise duty hikes from the government, following three consecutive increases since 2013.
"We are calling on the government to moderate the policy...[we are asking for an] excise duty moratorium after [the hikes in the past] three years, to give time for consumers to recover their purchasing power, [and] for [purchase of] illicit cigarettes to go down," BAT managing director Stefano Clini told reporters, after the group's annual general meeting today.
The local tobacco industry has seen three rounds of excise hikes between 2013 and 2015. Tax on tobacco was first hiked by 14% in September 2013, 12% in November 2014 and by a whopping 36% in November 2015.
Clini also said the decision to close down its manufacturing plant in Petaling Jaya is not to protest against the government's several rounds of excise duty hike, but rather it is the right thing to do to create shareholders' value.
Clini said the company is assessing where to source its tobacco products now, which will likely be from Singapore, Korea and Indonesia.
Texchem Resources Bhd, which is in the midst of opening up to 35 more new restaurants this year that will cost it approximately RM20 million, is also looking to grow its venture into the aerospace industry.
In particular, it wants to grow its investment in thick gauge/heavy gauge extrusion machines, which are used in medical and life sciences products, as well as its aerospace products.
According to Texchem president and group chief executive Brian Tan Guan Hooi, the group has set aside a capital expenditure of RM10 million to be used between 2016 and 2018 to invest in these machines.
He said the venture has begun in 2015, when the company began to apply our extrusion machine, which was initially used for the medical and life sciences business, for the aerospace as well automobile sector.
"So what we have recently attained is the approval from one aeroplane manufacturing company to use our production parts in their aircraft, in particular for aircraft galley parts," he told a news conference after the group's annual general meeting, but declined to name the aeroplane manufacturer.
The heavy gauge extrusion machine is also used in medical products, such as body fluid pans and large washing basins used in hospitals.
Tan shared that the group has invested RM3 million in 2015 to expand its factory in Prai, Penang, to include the manufacturing facility for the heavy gauge extrusion machines. The new segment currently contributes about 1% to 2% of revenue, but the group wishes to grow the segment together with medical and life sciences business, accounting for 25% of the group’s revenue.
Meanwhile, as previously reported, Texchem will be expanding its most successful division, i.e. its restaurant division which operates outlets like Sushi King, Yoshinoya, Miraku, Tim Ho Wan and Goku Raku Ramen, this year.
Of the 35 outlets it is looking to open this year, 11 will be Sushi King restaurants, 10 Yoshinoya and 10 Hanamaru.
Texchem executive chairman Tan Sri Fumihiko Konishi shared that the group will set aside RM20 million capital expenditure to open four Doutor Coffee outlets, which is a Japanese coffee franchise, in the Klang Valley.
Integrated Logistics Bhd's storage operation in China has been suspended, following a fire that broke out at Hengyang Petrochemical Pte Ltd (Hengyang), a warehouse storing fuel and chemicals in Jingjiang, Jiangsu province, last Friday (April 22).
Hengyang said it is currently in process of assessing losses due to the incident, and is unable to quantify the losses at present.
Integrated Logistic, through its 70%-owned Integrated Logistics (HK) Ltd, control 25.8% equity stake in Hengyang, amounting to RM27.89 million.
Companies in the news - Dayang Enterprise, Mega First Corp, MRCB, Tanah Makmur, Imaspro Corp, Voir Holdings, Dutch Lady, United Plantations, Bina Darulaman, Pensonic, Axis REIT, Hektar REIT, BAT, Texchem Resources and Integrated Logistics
http://www.theedgemarkets.com/my/article/dayang-enterprise-mega-first-corp-mrcb-tanah-makmur-imaspro-corp-voir-holdings-dutch-lady
