Stocks To Watch Salcon, HL Industries, Narra, Btoto, Censof, Time Eng, Solid, plantation firms


Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com   
Thursday, 12 September 2013 19:34

KUALA LUMPUR (Sept 12): Based on news flow and corporate announcements today, the stocks that may excite investors tomorrow could include Salcon, HL Industries, Narra, Btoto, Censof, Time Eng, Solid and PLANTATION [] companies.

SALCON BHD [] announced that it has entered into agreements to sell its water concessions in China to a Chinese company, Beijing Enterprises Water Group Limited, for a total cash of RM518.28 million.

It is expected to make a net gain of RM94.6 million from the sale of these concession firms.

In a filing with Bursa Malaysia today, the company said the disposals provide an opportunity for the group to unlock the value of its investments and allow the group to strengthen its financial position by reducing the gearing level of the group.

Proceeds from the proposed disposals will also be used for expansion of the property development segment and/or investments in new income stream.

The net gain attributable to shareholders represents an EPS of RM0.16 and the disposals are expected to contribute positively to Salcon’s future earnings.

Hong Leong Industries announced plans to distribute to its shareholders 345.03 million shares in NARRA INDUSTRIES BHD [], which is buying a concrete and cement manufacturers from companies under the Hong Leong Group. The all-share deal is worth RM448 million.

Both stocks soared after the announcement was made. Narra hit limit up after rising 30 sen or 43% to RM1.00 per share, while Hong Leong Industries closed 30 sen higher at RM5.70 per share.   

Narra, which manufacturers furniture and offers interior-design services, said it is acquiring 100% of concrete producer Hume Industries (M) Sdn Bhd from Hong Leong Industries for RM48 million.

Narra is also buying the entire 175 million six-year 2% non-cumulative irredeemable convertible preference shares in Hume Cement Sdn Bhd from Hong Leong Industries for RM300 million and purchase of the entire stake in Hume Cement from Hong Leong Manufacturing Group Sdn Bhd for RM100 million.

BERJAYA SPORTS TOTO BHD [] (BToto) posted a 10.7% decrease year on year in net profit to RM98.79 million for the first quarter ended July 31, mainly due to the decrease in revenue and pre-tax profit of its principal unit, Sports Toto Malaysia Sdn Bhd.

The group recorded a net profit of RM110.69 million in the previous corresponding period. Revenue for the quarter also dipped, declining by 1.42 % to RM887.1 million from a year ago.

It declared an interim dividend of 4 sen per share.

For the first quarter, basic earnings per share was 7.36 sen, 12.06% lower as compared to 8.37 sen in the previous corresponding quarter.

The company said the gaming sector is expected to be resilient and it expects to maintain its market share.

Censof Holdings Bhd is buying from Khazanah Nasional Bhd its entire 45.03% stake in TIME ENGINEERING BHD [] (TEB) at RM0.20 per share for RM69.8 million cash.

“This decision was made following an extensive tender process initiated by Khazanah to select a new shareholder that would be able to develop TEB to its next phase of growth,” said Khazanah in a statement.

In a separate announcement, Censof said it will be obliged to undertake a mandatory general offer (MGO) for the other 55% shares in TEB after it has completed the purchase of Khazanah Nasional’s 45.03% stake in Time Engineering Bhd (TEB), as required under the local securities law.

Censof said the purchase presents “a good and rare opportunity” for it to expand its business and to leverage on TEB’s resources and infrastructure to create strategic benefits.

Solid Automotive Bhd, which gained 8 sen or 14.3% to end at 64 sen against its IPO price of 56 sen per share on its maiden listing day today, may continue to attract attention tomorrow.

The most-actively traded stock, which attracted a total trading volume of 110,609,300 shares today, opened at 60 sen. Throughout the day, it had hit a high of 68.5 sen and a low of 58.5 sen.

TA Securities has given a target price of 56 sen for the stock while Kenanga Research sees its full value at 57 sen. 

At the listing ceremony this morning, the company, which is involved in automotive after-market parts and components business, said it is looking into expansion of its operations locally and abroad.

Solid Automotive has raised RM19.8 million from its IPO (initial public offering).

Plantation stocks may be in focus again after a respected international expert said palm oil may extend a decline as supply of this most-used cooking oil climbs and biodiesel demand peaks.

Dorab Mistry, director at Godrej International Ltd., said in Singapore a rally in futures since the end of July is over and prices will drop from now.

Prices rebounded 9.5 percent from a three-year low of 2,137 ringgit ($656) a metric ton in July as the spread between palm and gas oil created demand for biodiesel, he said.