Stocks to Watch MMHE, TSH, V S Industry, Silk, Muhibbah
Business & Markets 2012
Written by Surin Murugiah of theedgemalaysia.com
Thursday, 28 June 2012 00:00
A + / A - / Reset
KUALA LUMPUR (June 27): The FBM KLCI could extend its gains on Thursday on sustained momentum from the rebound as regional markets rose on bargain hunting a day earlier. The FBM KLCI recovered to close above the 1,600-point level on Wednesday.
Stocks in Singapore, Indonesia and Thailand rose to one-week closing high on Wednesday as buying interest picked up in large cap stocks and banking shares recently hit by falling appetite for riskier assets, according to Reuters. Meanwhile, European shares edged up on Wednesday but the euro was flat, with investors increasingly cautious a day ahead of an EU leaders summit that few expect will do much to resolve the region's debt crisis, now in its third year, it said.
Among the stocks that could be in focus on Thursday are Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE), TSH RESOURCES BHD [], V.S INDUSTRY BHD [], Silk Holdings Bhd and Muhibbah Engineering Bhd.
MMHE's unit Malaysia Marine and Heavy Engineering Sdn Bhd has landed a contract worth a combined total of RM278 million from Sarawak Shell Bhd. In a statement on Wednesday, MMHE said that its unit had successfully bid for the F14/F29 project which comprised of three structures.
MMHE said the first structure was the F14DR-A topside, which would weigh 2,024 tonnes [MT or "metric tons"] when completed. "The topside would be fabricated with the added flexibility of producing up to five (5) gas producing wells in the future," it said.
The second is the procurement, fabrication and yard pre-commissioning of the F14/F29 process module that would weigh 1,731MT, it said. "The third structure that MHB would fabricate is the F14DR-A jacket. The 4-legged, 5 bay jacket concept substructures would support the F14DR-topside. With piles and conductor, the entire jacket would weigh approximately 6,400MT," said MMHE.
TSH's proposed acquisition of Pontian United PLANTATION []s (Pontian) is a friendly merger, said its chairman Datuk Kelvin Tan. He said on Wednesday that the offer valued the remaining 80% stake in 60 year-old Pontian at RM624 million at 14.6 times last three year average earnings.
Half of the offer consideration will be settled via cash and another half in new TSH shares, he said. The offer document will be despatched to Pontian's over 200 shareholders in three weeks, he said. TSH on June 26 had announced the offer to take over Pontian.
V S Industry's net profit for the third quarter ended April 30, 2012 (3Q12) rose 24.4% to RM10.7 million from RM8.6 million a year earlier. The company said on Wednesday revenue rose 9.5% to RM286.89 million from RM262.1 million in 2011. Earnings per share was 5.88 sen compare to 4.72 sen. The company declared a third interim single-tier dividend of two sen per share.
V S Industry managing director Gan Sem Yam in a statement on Wednesday said that although the ongoing economic crisis was widely anticipated to dampen end-user demand for consumer electronics, the company's production plants in Malaysia and Indonesia continued to witness growing sales orders in 3Q12.
Silk's financial performance continues to improve in its third quarter ended April 30, 2012, following a turnaround the previous quarter after five consecutive quarters of losses, due to higher toll collections from its Kajang SILK highway and stronger fleet utilisation in its oil and gas (O&G) division.
For the third quarter financial year 2012, Silk announced a jump of 45% in revenue to RM91.5 million from RM63.1 million a year ago. The group recorded net profit of RM2.3 million for the quarter, a significant improvement compared to the net loss of RM5 million suffered a year ago.
Meanwhile, Muhibbah Engineering Bhd, which saw more than RM75 million erased from its market capitalisation on Wednesday as the stock tumbled in the aftermath of CIMB Bank withdrawing its support for the restructuring of the Asia Petroleum Hub project, could also come under some selling pressure. On Wednesday, Muhibbah lost 18 sen to RM1.02 with 31.2 million shares done, erasing some RM77.15 million off its market capitalisation.
CIMB Research had downgraded Muhibbah Engineering Bhd to a Trading Sell from Trading Buy at RM1.20, and slashed its target price to 94 sen (from RM1.50). In a note on Wednesday, the research house said that chances that Muhibbah would make a provision for Asia Petroleum Hub (APH) bad debts this year had risen as CIMB was withdrawing its support for the restructuring of the APH project.