Stocks to Watch Mah Sing, Encorp, Hua Yang, Top Glove, SapuraCrest Petroleum

Business & Markets 2012
Written by Surin Murugiah of   
Wednesday, 17 October 2012 18:05

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KUALA LUMPUR (Oct 18): The FBM KLCI could extend its gains on Thursday, following a firmer close a day earlier that saw the index crossing the 1,660-point level.

Local investor sentiment also perked up in tandem with the improving performance at regional and most European markets on Wednesday.

Asian shares rose to their highest in over five months on Wednesday as strong US earnings reports lifted investor mood, while the euro hit a one-month high against the dollar as Spain retained an investment-grade debt rating, according to Reuters.

The euro touched a one-month high against the dollar and European shares extended the week's gains on Wednesday after Spain clung on to its investment-grade debt rating, it said.

The decision by ratings agency Moody's came as expectations grow that Spain is getting close to formally requesting aid from its European Union partners, potentially allowing the region's central bank to begin buying its bonds, said Reuters.

Among the stocks that could be in focus are MAH SING GROUP BHD []; ENCORP BHD []; HUA YANG BHD []; Top Glove Corp Bhd; and SAPURACREST PETROLEUM BHD [].

Mah Sing could extend its gains on the back of positive outlook for the company's sales targets.

Mah Sing gained as much as 7.3% on Wednesday after MIDF Research in a report on Wednesday said the property developer was well on track to meet its sales target of RM3 billion for the financial year ended Dec 31, 2012.

Mah Sing rose 20 sen to RM2.40 with 3.77 million shares done.

"Over the past 4 to 5 months, Mah Sing had launched and opened for preview a total of 5 projects. Buyers' response has continued to be encouraging; hence, we believe the company is on track to meet full year sales target of RM3 billion," said MIDF in a note Wednesday.

According to the report, the group has already secured sales of RM1.3 billion in the first half of 2012 which accounted for 52% of full year sales target.

MIDF Research has maintained its "buy" rating on Mah Sing with a target price of RM2.85.

Property developer Encorp launched its Encorp Marina Puteri Harbour, which has a total gross development value (GDV) of RM500 million, Tuesday. 

"With its niche features, exceptional quality, impressive facilities and strategic location, Encorp Marina is poised to enhance the investment portfolio of its owners by yielding outstanding returns," said executive chairman Datuk Seri Mohd Effendi Norwawi in a statement on Wednesday.

"Our iconic architecture, inspired by nature, will be able to fulfill our purchasers' need for a superior living experience. Encorp Marina will not only enrich our buyers' capital gains, but also their lifestyle. It is simply 360 degrees of perfection."

Encorp Marina is a high-rise freehold development comprising two towers housing 538 units of service residences as well as retail podiums.

Hua Yang's net profit for the second quarter (2Q) ended Sept 30, 2012 rose to RM17.96 million from RM13.89 million a year earlier, mainly due to steady CONSTRUCTION [] progress recognition.

The company said on Wednesday that its revenue for the quarter climbed to RM103.7 million from RM76.13 million in 2011.

Earnings per share was 11.26 sen from 9.65 sen in 2011, while net assets per share was RM1.94.

For the six months ended Sept 30, Hua Yang posted net profit RM33.53 million compared to RM23.38 million a year earlier.

Hua Yang chief financial officer May Chan in a statement Wednesday said the company expects its property development business to continue its growth momentum going forward given the strong underlying demand.

"With the total unbilled sales of approximately RM471.38 million at the end of September 30, 2012, our earnings visibility in the remaining period of FY2013 is improved."

"We aim to launch a total of RM815 million worth of property projects in the FY2013, spreading across the Klang Valley and the states of Johor and Perak. We will soon be launching our development projects in Desa Pandan and Shah Alam worth RM160 million and RM175 million respectively," she said.

Top Glove's planned rubber PLANTATION []s in Indonesia are expected to generate positive operating cash flow starting from the 10th year of the group's operations there, according to executive director Lim Cheong Guan.

Lim said this follows an estimated cash outflow of RM230 million during the first nine years of the proposed 13-year upstream venture in the neighbouring country.

"In the 10th year, we expect the positive operating cash flow to finance our capital expenditure (capex) in Indonesia.

"We, however, expect our Indonesian operations to be profitable in year one," Lim told at Top Glove's analyst and media briefing on Tuesday.

SapuraCrest Petroleum has a secured a three month extension for the utilisation of its self-erecting tender rig, T-6 valued at approximately US$9.2 million (RM28.06 million) from Carigali Pttepi Operating Company Sdn Bhd (CPOC) and Carigali-hess Operating Company Sdn Bhd (COC).

The T-6 contract — between SapuraCrest Petroleum subsidiary Tioman Drilling Company Sdn Bhd, CPOC and COC — was for an initial duration of 28 months commencing Dec 21, 2010, together with an option for two extensions of three months each.

"The company is pleased to announce that Tioman has, on  Oct 8, 2012, received confirmation that CPOC has agreed to extend the T-6 Contract for a further duration of three months commencing from Apr 21, 2013 until July 20, 2013," said the group in a filing Wednesday.

The group expects the extension to positively contribute towards its earnings and net tangible assets for the financial year ending Jan 31, 2014.