Stocks To Watch UEM Sunrise, Starhill Reit, KPJ, IHH, Ireka, Top Glove, Kossan, CB Industrial

Business & Markets 2013
Written by Ho Wah Foon of   
Friday, 14 June 2013 20:58

KUALA LUMPUR (June 14): Based on news flow and corporate announcements today, stocks that may lure interest on June 17 could include  UEM Sunrise, Starhill Reit, KPJ, IHH, Ireka, Top Glove, Kossan and CB Industrial.

UEM SUNRISE BHD [], previously known as UEM Holdings, targets to grow its profit margin by 5-6% this year, with the completion of the acquisition of Sunrise.

The company recorded a profit after tax of RM448.4 million for the financial year ended Dec 31, 2012, up by 49% from RM301.7 million in 2011.

Managing Director Datuk Wan Abdullah Wan Ibrahim told reporters the UEM Sunrise brand encapsulates both UEM Land and Sunrise heritage and expertise.

Starhill Real Estate Investment Trust (Starhill REIT) plans to raise its borrowing limit to 60% of its total assets. This is higher than the statutory 50% limit for Malaysian-listed property trusts.

Starhill REIT, a 56%-subsidiary of YTL Corp Bhd, could be the first property trust to make such a move.

Starhill REIT said the proposed higher borrowing limit will offer the group funding flexibility for larger real estate acquisitions via borrowings in the future.

This proposal comes amid Starhill REIT's plans to raise up to RM800 million via placement of new units in the property trust.

The firm said the placement proceeds will be used to repay its borrowings. To facilitate the placement, the trust intends to increase its fund size to a maximum of 2.13 billion units from the current 1.32 billion.

"The proposed increase in fund size is undertaken to facilitate the issuance of the placement units pursuant to the proposed placement,” said the company.

KPJ HEALTHCARE BHD [], which plans to open hospitals in all Malaysian states, is eyeing Melaka now.

KPJ president/managing director Amiruddin Abdul Satar said the firm is "seriously looking" into having a nationwide presence.

"Save for Perlis, Terengganu and Melaka, we already have operations or are building hospitals in every other state," he said at the Invest Malaysia 2013 event.

Of the three states, Melaka is seen having the highest demand for private healthcare services.

IHH Healthcare Bhd expects higher net profit from its operations for the financial year ending December 31, 2013 (FY13).

The major healthcare group has also been discussing on distributing dividends in the future, though there is no tentative timeline set yet.

Speaking to the media at Invest Malaysia 2013, IHH managing director Dr Lim Cheok Peng said the group will gain a bigger net profit in FY13 as healthcare becomes indispensable for the ageing population.

In FY12, IHH posted a net profit of RM686.6 million excluding exceptional gains. It was 56% bigger than the net profit of RM493.7 million in FY11.

Its revenue ballooned by 110% year-on-year to RM6.98 billion. In FY11, IHH's turnover was RM3.33 billion.

When asked about a dividend payout policy, Lim said IHH has just been listed (on July 25 of last year) and is still in the midst of expansion.

"Any extra cash we make, we will plough it back into our investment. But we have been discussing recently about distributing dividends. We certainly hope to do so in the future," Lim said.

IREKA CORPORATION BHD []'s major shareholders plan to privatise and delist the CONSTRUCTION [] firm via a selective capital reduction (SCR) and cash repayment exercise.

In a statement to the exchange today, Ireka said its major shareholders, who already own 64.7% in the firm, plan to cancel the remaining 35.3% stake they do not own.

Ireka shares "have been thinly traded" and the stock has been transacted below its par value for the past three years, said the statement.

Upon completion of the SCR, the acquirers will own 100% of Ireka. Olymvest will subsequently make a cash repayment of 90 sen a share to minority shareholders of the Ireka.

"The offer will remain open for the board’s acceptance until 5pm on June 28, 2013.

Ireka shares were last traded at 68 sen on June 13. This compares to the company’s latest reported book value of RM1.60 a share.

The firm reported a net loss of RM37.42 million in financial year ended March 31, 2013 compared to a net profit of RM11.1 million a year earlier.

TOP GLOVE CORPORATION BHD [], the world's largest rubber glove producer, expects its full-year financial results ending Aug 31, 2013 to be better than last year if the exchange rate and market condition are stable.

"We will recover soon because the US dollar is stronger than the ringgit now. The third-quarter result is just a temporary setback due to the impact of foreign exchange," company chairman Tan Sri Lim Wee Chai told reporters today. 

Top Glove's pre-tax profit for the third quarter ended May 31, 2013, fell to RM43.373 million from RM63.683 million in the same period last year.

Lim also said Top Glove is revising its 15-year investment plan by increasing it to RM3.8 billion from RM3 billion previously.

This would include the cost of its 30,772-hectare rubber PLANTATION [] venture in Sumatera, Indonesia, in which planting will commence in October 2013 and the first tapping expected in 2020.

Out of the RM3.8 billion, RM3.1 billion will be used for the construction of 40 new factories.

Lim said Top Glove will have 25 factories by April next year with annual capacity of 47.7 billion pieces.

KOSSAN RUBBER INDUSTRIES BHD [] is looking to expand its production capacity to 22 billion pieces per annum by April 2014, from current 16 billion.

"We are currently constructing a plant which will be ready by December this year," said Kossan's CEO Datuk Lim Kuang Sia at Invest Malaysia conference.

"Another two plants are being constructed as well and will be ready by April next year," he added. 

Lim said the investment cost for the plants, used mainly to produce nitrile gloves, is about RM100 million.

CB INDUSTRIAL PRODUCT HOLDING []s Bhd announced that its unit Modipalm Engineering Sdn Bhd has been awarded a service contract from an Indonesian company.

The job entails design, supply, installation and commissioning works of one unit “Continuous Sterilisation Palm Oil Mill of capacity 45 MT/Hr”.

For the supply works which involves imports, the amount totals US$6.136 million.

For the local construction works, the amount totals IDR50,440,250,000 (Indonesian Rupiah).

“The award is expected to contribute positively to the earnings of CBIPH Group for the financial year ending 31 December 2013,” the company said.