Stocks To Watch MAS, TH Heavy, Shell, Eastland, Lafarge and Manulife

Business & Markets 2013
Written by Ho Wah Foon of   
Tuesday, 13 August 2013 19:11

KUALA LUMPUR (Aug 13): Based on news flow and corporate filings today, the stocks that may attract interest tomorrow could include MAS, TH Heavy, Shell, Eastland, Lafarge and Manulife.

Malaysia Airlines Bhd could be the next government-linked company to be sold if what Minister in the Prime Minister's Department, Datuk Seri Idris Jala, has said is taken as an official guidance.

Idris said today that MAS should not be sold at a loss and in fact, the airline should have been disposed off two years ago when its share was at RM6.20 per unit.

MAS closed at 31.5 sen per share, up 0.5 sen.

"We do not want to sell MAS at a loss. It should be sold based on the right price and at the right time, as it involves public money," Idris said while replying to a question at the Global Malaysia Series talk here.

According to Idris, the government should be involved only in businesses for strategic reasons, such as in defence, infrastructure and the TECHNOLOGY [] sectors, with a long gestation period.

TH Heavy Engineering Bhd (THHE) announced that its wholly owned subsidiary O & G Works Sdn Bhd (OGW) has been awarded “an extension of scope for licence by Petronas for mode of operation ‘Manufacturer’.

TH Heavy told Bursa Malaysia in a filing:
“The award of this licence qualifies OGW to tender and participate for upcoming works, namely offshore pedestal cranes of various types and lifting capacities for Petronas and other oil operators in Malaysia.

“The participation as manufacturer of offshore pedestal cranes is expected to have a positive contribution to the earnings and net assets of OGW and the THHE Group for the current and future financial years.”

Shell Refining Company (Federation of Malaya) Bhd's second quarter net loss narrowed to RM57.86 million from a net loss of RM120.08 million a year earlier. This came mainly on inventory write back and lower taxes during the quarter ended June 30, 2013 (2QFY13).

Shell said revenue fell to RM3.39 billion from RM3.56 billion on lower product prices.

Cumulative 1HFY13 net loss also narrowed to RM82.37 million from a net loss of RM105.45 million a year earlier while revenue declined to RM7 billion from RM7.26 billion.

"The (revenue) decrease is attributable to lower product prices in 2013. Ability to process cheaper sour crude also resulted in lower loss-after-tax in 2QFY13," Shell said.

Looking ahead, Shell said refining margins are expected to "remain challenged" on excess regional capacity and weak product demand.

Meanwhile, Shell said in a separate statement that it has appointed Datuk Yvonne Chia, former group managing director/chief executive officer of HONG LEONG BANK BHD [], as non-executive director of the firm.

Eastland Equity Bhd posted a net profit of RM1.2 million for its second quarter to end-June 2013, lower than RM1.5 million earned in the previous year corresponding quarter.

The company – whose share price had jumped and plunged last month because of speculation (which was subsequently denied) of the involvement of a leading politician’s son -- recorded revenue of RM11.8 million for the current quarter, compared to RM11.9 million.

For the six months to June 2013, the company posted net profit of RM2.1 million, compared to RM1.6 million in the first half of 2012. Revenue was flattish at RM20.6 million.

Lafarge Malaysia Bhd plans to set up a CONSTRUCTION []  development laboratory by year-end to produce better building solutions to reduce construction to cater for a larger population, Bernama reported.

The cement company estimated that Malaysia's population will hit 35 million by 2020, with 70% expected to be concentrated in urban areas.

President/Chief Executive Officer, Bradley Mulroney, said the lab will focus on research and develop products and solutions needed for the construction industry.   

Mulroney said Malaysia faces its biggest challenge in offering affordable prices for housing units, especially in the urban areas.

The company wants to come up with solutions that could help reduce the cost of construction and at the same time emphasis on quality home.

He said the company, which anticipated between four and five per cent market growth per annum, aimed to maintain its capacity to serve projects like the Kuala Lumpur International Airport 2 and Mass Rapid Transit.

Besides cement, the French company’s businesses also included ready-mixed concrete, aggregates and other related materials.

Manulife Holdings Bhd recorded a net profit of RM14.6 million for its second quarter ended June 30, almost double the RM9.6 million in earnings posted in the previous year corresponding quarter. 

This was on the back of revenue of RM235.5 million, compared with RM181.5 million previously. 

Manulife said the higher revenue was mainly due to higher interest income in its investment holding business as well as higher gross premiums in the group's life insurance segment. 

For its cumulative half yearly results, Manulife posted a net profit of RM18.6 million, compared with RM26.9 million at the same time last year. 

The decrease in net profit for the first half of the year came from decrease in realised gains on disposal of investments and higher management expenses for the investment holding segment. 

There was also a loss in earnings for Manulife's other businesses due to "higher management expenses driven by  increase in staff force to support the private retirement scheme launched in November 2012". 

Looking forward, Manulife said its business should remain "satisfactory" with its expansion plans.