Stocks In Focus MY (Berjaya Assets, Daibochi Plastic & Packaging, MSM M’sia) – 12/02/15
BJASSET (3239), DAIBOCI (8125), MSM (5202)
Berjaya Assets 2Q15 Earnings Up 149%
For the second quarter ended 31 December 2014, Berjaya Assets reported a 149.3 percent surge in net profit to RM40.5 million, underpinned by higher profit contribution from its property development and investment business segment arising from higher rental income and higher gain registered on disposal of quoted shares amounting to RM42 million.
In contrast, 2Q15 turnover only rose a marginal 0.4 percent to RM106.1 million, mainly attributed to the increase in revenue reported by the property development and investment business segment.
For the six-month period, earnings grew 43.3 percent to RM47.6 million while top line contracted 1.4 percent to RM203.5 million, due to lower revenue from the hotel and recreation business segment.
Significance: On the future prospects, the group said the implementation of the goods and services tax in April, the falling crude oil prices as well as the lacklustre performance of the tourism industry may impact the domestic economy. However, it expects its property investment, hotel and gaming related businesses to maintain its occupancy rates and market share respectively going forward.
Better FY15 Expected For Daibochi
For the financial year ended 31 December 2014, Daibochi Plastic and Packaging Industry’s net profit fell 13.5 percent to RM23.7 million despite an 11 percent rise in revenue. The lower earnings were mainly due to higher raw material prices (up till 3Q14) and the electricity rate hike starting January 2014.
However, CIMB Equities Research noted that the firm’s net profit was largely in line with market expectations and views 2015 as a better year for the firm, with lower raw material prices and higher export top line growth. Raw materials make up more than 60 percent of Daibochi’s production costs the group generally benefits from profit margin expansion during periods of declining raw material prices.
The research house also pointed out that 50 percent of the group’s revenue is derived from the domestic market, with more than 80 percent of its sales are from the food and beverage sector. It believed that domestic consumers have been cautious during the past year ahead of the implementation of goods and services tax.
Significance: CIMB Research opined that consumer sentiment is improving and domestic spending should recover from 2H15 onwards. That said, the research house has downgraded the stock to ‘Hold’ as it feels that the stock is not cheap following the 10 percent price rally in the past month.
MSM Eyes 2 M&As
MSM Malaysia Holdings, Malaysia’s largest refined sugar producer, is hoping to ink at least two merger and acquisition (M&A) exercises not later than 1H15, according to group chief executive officer Datuk Dr Sheikh Awab Sheikh Abod.
While the company declined to name potential deals, it was revealed that the potential M&As would be related to the its overseas expansion. MSM added that 2015 would be a growth year for its business. Apart from M&As, there are plans to upgrade the firm’s existing refinery plants and to diversify revenue stream into sugar-related downstream activities.
It was noted that the group has RM470 million in cash balances and zero gearing, putting it in a comfortable position to execute M&As. Reports suggested that MSM is already in talks to acquire an Asian upstream company and also in discussions with a foreign partner to buy a sugar plantation company in the region.
Significance: Moving forward, MSM aims to increase capacities at its refineries, hopes to control the entire sugar market in Malaysia and Singapore by 2018 and is also looking to expand in countries such as China, Indonesia and India because of growing consumption in these countries.
http://www.sharesinv.com
BJASSET (3239), DAIBOCI (8125), MSM (5202)
Berjaya Assets 2Q15 Earnings Up 149%
For the second quarter ended 31 December 2014, Berjaya Assets reported a 149.3 percent surge in net profit to RM40.5 million, underpinned by higher profit contribution from its property development and investment business segment arising from higher rental income and higher gain registered on disposal of quoted shares amounting to RM42 million.
In contrast, 2Q15 turnover only rose a marginal 0.4 percent to RM106.1 million, mainly attributed to the increase in revenue reported by the property development and investment business segment.
For the six-month period, earnings grew 43.3 percent to RM47.6 million while top line contracted 1.4 percent to RM203.5 million, due to lower revenue from the hotel and recreation business segment.
Significance: On the future prospects, the group said the implementation of the goods and services tax in April, the falling crude oil prices as well as the lacklustre performance of the tourism industry may impact the domestic economy. However, it expects its property investment, hotel and gaming related businesses to maintain its occupancy rates and market share respectively going forward.
Better FY15 Expected For Daibochi
For the financial year ended 31 December 2014, Daibochi Plastic and Packaging Industry’s net profit fell 13.5 percent to RM23.7 million despite an 11 percent rise in revenue. The lower earnings were mainly due to higher raw material prices (up till 3Q14) and the electricity rate hike starting January 2014.
However, CIMB Equities Research noted that the firm’s net profit was largely in line with market expectations and views 2015 as a better year for the firm, with lower raw material prices and higher export top line growth. Raw materials make up more than 60 percent of Daibochi’s production costs the group generally benefits from profit margin expansion during periods of declining raw material prices.
The research house also pointed out that 50 percent of the group’s revenue is derived from the domestic market, with more than 80 percent of its sales are from the food and beverage sector. It believed that domestic consumers have been cautious during the past year ahead of the implementation of goods and services tax.
Significance: CIMB Research opined that consumer sentiment is improving and domestic spending should recover from 2H15 onwards. That said, the research house has downgraded the stock to ‘Hold’ as it feels that the stock is not cheap following the 10 percent price rally in the past month.
MSM Eyes 2 M&As
MSM Malaysia Holdings, Malaysia’s largest refined sugar producer, is hoping to ink at least two merger and acquisition (M&A) exercises not later than 1H15, according to group chief executive officer Datuk Dr Sheikh Awab Sheikh Abod.
While the company declined to name potential deals, it was revealed that the potential M&As would be related to the its overseas expansion. MSM added that 2015 would be a growth year for its business. Apart from M&As, there are plans to upgrade the firm’s existing refinery plants and to diversify revenue stream into sugar-related downstream activities.
It was noted that the group has RM470 million in cash balances and zero gearing, putting it in a comfortable position to execute M&As. Reports suggested that MSM is already in talks to acquire an Asian upstream company and also in discussions with a foreign partner to buy a sugar plantation company in the region.
Significance: Moving forward, MSM aims to increase capacities at its refineries, hopes to control the entire sugar market in Malaysia and Singapore by 2018 and is also looking to expand in countries such as China, Indonesia and India because of growing consumption in these countries.
http://www.sharesinv.com
