Stocks To Watch MMHE, plantation firms, Genetec, LCTH, Star and Sunway

Business & Markets 2013
Written by Ho Wah Foon of   
Wednesday, 14 August 2013 19:31

KUALA LUMPUR (Aug 14): Based on corporate announcements today, stocks that may stir up some interest tomorrow could include MMHE, PLANTATION [] stocks, Genetec, LCTH, Star and Sunway.

The broad market may be excited by today’s news that the Eurozone recovery is happening faster than expected, as reported by international news wires.

Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) reported a 14% decline in second quarter net profit from a year earlier, due to lower income from its oil and gas structure CONSTRUCTION [] and repair services.

MMHE, which also repairs ships, said net profit declined to RM47.55 million in the quarter ended June 30, 2013 (2QFY13) from RM55.32 million. Revenue fell to RM786.72 million from RM965.71 million.

Revenue had fallen as construction projects in hand "are nearing completion with relatively-lower value of progress claims remaining," MMHE said.

For the six months to June 2013, MMHE’s cumulative 1HFY13 net profit fell to RM98.15 million from RM133.59 million a year earlier. Revenue however rose to RM1.71 billion from RM1.63 billion.

Looking ahead, MMHE expects its construction division to face downward pressure on profit margins due to competition but its repair-services performance is expected to be "within expectation".

Plantation companies could be in focus after the Malaysian Palm Oil Board (MPOB) announced official data on palm oil stocks, output and exports for July.

Crude palm oil (CPO) futures in most forward months fell after the release of the official data.

Rated companies such as KLK and Batu Kawan, IOI, Genting Plantations may see some interest.

MPOB announced today that end-July palm oil stocks rose – instead of easing -- to 1,664,053 tonnes, which was 1% higher than June’s level of 1,647,604 tonnes.

Local July palm oil output jumped 18.21% month on month to 1,674,857 tonnes, while palm oil exports rose 0.53% month on month to 1,418,678 tonnes.

While stocks and output were higher than expected by the industry, exports were lower than estimated.

JF Apex Research said robust production of palm oil in the coming months of high production cycle is expected to weigh down the prices of the soft commodity.

Genetec TECHNOLOGY [] Bhd announced that it has secured new orders worth RM12.1 million.

The new orders are from existing clients who are global players in hard disc drive, automotive, semiconductor, pharmaceuticals and others.

“The secured orders are expected to contribute positively to Genetec’s earnings for the financial year ending 31 March 2014,” the company informed Bursa Malaysia in a filing.

LCTH Corp Bhd posted a net profit of RM13.88 million in the second quarter ended June 30, 2013, from a net loss of RM11.4 million a year earlier.

The precision plastic injection mould manufacturer told the exchange that its profit had come from asset disposal gains.

Revenue fell to RM56.91 million from RM96.8 million on fewer orders for its products due to a major customer's "change of procurement strategy".

LCTH’s cumulative six-month net profit came to RM12.13 million compared to a net loss of RM15.74 million a year earlier. Revenue however fell to RM105.11 million from RM180.85 million. 

STAR PUBLICATIONS (M) BHD [] saw a 35.5% drop in its net profit to RM28.5 million for the second quarter to June 30, compared with RM44.2 million in the previous year corresponding quarter. 

Revenue also fell to RM251.3 million, compared with the RM299.4 million posted in 2QFY12.

The media group said there had been a drop in revenue and profit in all its business segments: print and new media, radio broadcasting, events/exhibitions and TV. 

For the first half of the year, the Star recorded a drop in net profit to RM54.6 million, from RM76.7 million in the first half of last year. 

Revenue for the first half was RM471.9 million, compared with RM529.4 million.

Looking ahead, the group said it expects the business environment in the media industry to remain highly challenging in 2013. 

"In the media sector, advertising expenditure has remained soft but is expected to gradually pick up in the second half of this year as sentiment improves with the seasonality effect," it said. 

"The media related segments of the group will continue their efforts in growing the advertising revenue and to offer wider advertising platforms to its clients," Star added. 

Sunway Bhd has obtained Islamic loans amounting to a collective US$150 million (about RM491 million) from two foreign banks in Malaysia.

In a statement today, Sunway said it has accepted US$75 million each from Standard Chartered Saadiq Bhd and HSBC Amanah Malaysia Bhd.

Sunway said the loans will facilitate the partial repayment of the group's existing bank borrowings.