Stocks To Watch F&N, IJM, SP Setia, Rimbunan Hijau, CSC Steel, Hartalega, OSK Ventures and UMW

Business & Markets 2013
Written by Ho Wah Foon of   

KUALA LUMPUR (Feb 5): Based on news flow and announcements to the stock exchange today, the stocks to watch tomorrow could include F&N, IJM, SP Setia, Rimbunan Hijau, CSC Steel, Hartalega, OSK Ventures and UMW.

Fraser & Neave Holdings Bhd (F&N) told Bursa it posted a net profit of RM57.1 million on revenue of RM873.7 million for its first quarter ended Dec 31, 2012, up 36.8% from a net profit of RM41.7 million on revenue of RM743.3 million in the previous corresponding quarter.

Group revenue for the quarter rose 18% to RM874 million mainly contributed by Dairies Thailand’s business recovery, with soft drinks revenue maintained.

Looking ahead, F&N said the beverage competitive landscape will remain intense with the competitors aggressively launching its tea and isotonic offerings.

In Kuantan yesterday, IJM CORPORATION BHD [], SP SETIA BHD [], Rimbunan Hijau Group signed separate JV and MOUs on projects with total value of RM10.5 billion with China’s state-owned conglomerate Guangxi Beibu Gulf International Port Group and master developer of Malaysia-China Kuantan Industrial Park (MCKIP).

In a press statement, the East Coast Economic Region Development Council said these investments consist of RM5 billion by Guangxi for three projects in MCKIP, RM3 billion by the Guangxi and IJM in the Kuantan Port expansion project, and RM2.5 billion by the master developer of MCKIP.

MCKIP is made up of a joint venture between a Malaysia consortium and Guanxi-led China consortium.

CSC Steel Holdings Bhd returned to the black in the latest quarter, posting earnings of RM5.62 million for its fourth quarter ended Dec 31, 2012, against losses of RM2.06 million in similar quarter a year ago.

But for the same period, revenue fell 2.7% from RM276.85 million to RM269.57 million.

On 2013 prospects, CSC Steel said market sentiment has recovered and prices of raw materials have also moved upwards. The group hopes to increase the selling prices so as to deflect the higher production costs, said CSC Steel.

The company added it is also positive on the government’s latest move to restructure the steel industry as “the group’s products will be more competitive and this positive development should bring better results for 2013”.

The company also recommended a final dividend of 5 sen per share and a special dividend of 2 sen per share for the financial year ended Dec 31, 2012.

HARTALEGA HOLDINGS BHD []’s strong results may place it in the spot light again. It posted a 19.7% jump in profit after tax to RM60.6 million for its third quarter ended Dec 31, 2012, compared to RM50.7 million a year ago.

In a statement today, Hartalega also declared a 3.5 sen second interim dividend for its financial year ending March 31, 2013, bringing total dividends declared to date 7 sen.

“Given our sterling results and how global demand for nitrile rubber gloves has continued to grow at an exponential rate of 20% driven by customer switching from latex to nitrile, we are bullish on growth prospects in the nitrile market,” Hartalega managing director Kuan Mun Leong said in the statement.

The share of OSK VENTURES INTERNATIONAL BHD [] may suffer a beating on the back of its weak fourth quarter results.

It recorded a fourth quarter net profit of RM3.63 million in Oct-Dec 2012, down 63% from the previous year’s fourth quarter net profit of RM9.81 million.  

Revenue for the fourth quarter was down by some 10.6% to RM2.06 million, compared to RM2.3 million posted in the last quarter of previous year.

However, on a full year basis, the company’s net profit jumped back into the black to RM14.4 million from a net loss of RM27.9 million in the previous financial year, attributable to the gain on disposal of investment in eBrowx Bhd during the year.

UMW HOLDINGS BHD []’s unit UMW Petrodril Sdn Bhd has clinched a USD140 million (RM432 million) job from Sabah Shell Petroleum Co Ltd to supply a top tension riser for the latter's offshore oil and gas operations within Sabah's Malikai deep-water field.

The company said the contract is expected to contribute positively to the 2013 earnings and net assets of the UMW Group.