Stocks To Watch TNB, Petronas Dagangan, UMW-OG, MAHB, IJM, Keck Seng

Business & Markets 2013
Written by Ho Wah Foon of   
Thursday, 31 October 2013 19:38

KUALA LUMPUR (Oct 31): Based on corporate announcements up to 7.00 pm today, stocks likely to attract interest tomorrow may include TNB, Petronas Dagangan, UMW-OG, MAHB, IJM and Keck Seng.

Tenaga Nasional Bhd’s (TNB’s) net profit plunges 79% year-on-year (y-o-y) to RM219 million in the fourth quarter ended Aug 31, 2013, from RM1.061 billion a year ago.

But revenue for the quarter increased 1.8% y-o-y to RM9.5 billion from RM9.3 billion.

Despite the much lower quarterly profit, Tenaga proposed a final single-tier dividend of 15 sen per share for the period ending Aug 31, 2013.

The state-controlled utilities company blamed the disappointing profit to a jump in operating expenses by RM732.9 million and loss in foreign currency (forex) translation of RM617.1 million.

As for full year performance, net profit recorded RM4.6 billion versus RM4.4 billion while revenue rose to RM37 billion from RM36 billion in the previous year.

“The larger net profit (for the full year) is due to a forex translation gain of RM493.6 million as compared to a loss of RM230.8 million a year earlier,” the group said.

“For the financial year 2014, the board of directors view the group’s prospects to remain stable subject to fuel prices remaining manageable,” Tenaga said.

“The electricity demand growth is expected to remain steady, in line with the expectancy of improving global outlook as supported by the projected domestic economic growth of 5-5.5%.”

Petronas Dagangan Berhad (PDB) posted a slightly lower profit of RM226.2 million for the third quarter ended Sept 30, 2013, compared to RM242.8 million a year ago.

For the quarter, it posted a higher revenue of RM8.4 billion, an increase of RM922.1 million as compared to the corresponding quarter last year, resulting from an increase in sales volume by 9.7% and an increase in average selling price by 2.4%.

In a press statement, the Petronas unit said the unfavourable Means of Platts Singapore (MOPS) price movement and higher operating expenditure have impacted its profit.

Hence, earnings per share decreased to 22.8 sen from 24.4 sen for the same quarter in the preceding year.

PDB anticipates that the industry will remain challenging due to the ongoing uncertainties in the global economy. However, it is confident in retaining our overall market leadership position.

It has declared an interim dividend using single tier of 17.5 sen per ordinary share.

For the nine months to September 2013, PDB posted a total profit of RM660.4 million -- flat compared to RM660.3 million of Jan-Sept 2012. Revenue rose to RM23.95 billion, from RM21.83 billion.

UMW Oil & Gas Corporation Bhd, to debut tomorrow on the Main Market of Bursa Malaysia amid encouraging outlook for offshore drilling in Malaysia and Southeast Asia, is set to lure investor interest.

While UMW O&G has fixed its IPO price at RM2.80, JF Apex has set a fair value of RM3.15 for the stock and Public Investment Bank Research has given it a fair value of RM3.03.

HwangDBS Vickers Research has given a target price of RM3.20 with a 14% return upside, based on the growth potential of UMW-OG that has no direct comparable peer in Malaysia.

Hence, it is likely the stock will be trading above its IPO price of RM2.80 at opening calls tomorrow.

Based on IPO price of RM2.80, UMW-OG’s IPO would be the largest exercise in Malaysia this year, with its RM2.36 billion offering having attracted interest from international and Malaysian investors alike.

Malaysia Airports Holdings Bhd's (MAHB’s) third quarter net profit came in almost flat compared to a year earlier. Bottom line fell 0.2% as staff and construction cost rose while concession payment or user fee to the government doubled.

This came amid lower income from airports managed by MAHB abroad, the airport operator told the exchange today.

MAHB said net profit came to RM112.78 million in the quarter ended September 30, 2013 (3QFY13) compared to RM113.01 million. Revenue however rose to RM972.72 million from RM754.27 million.

"The unfavourable PBT (profit before tax) variance was mainly due to the increase in user fee by more than 100% from RM24.6 million to RM60.9 million.

"The higher user fee expense was attributable to the recognition of 100% user fee on the income statement," MAHB said.

The firm's cumulative 9MFY12 net profit increased to RM340.59 million from RM316.43 million a year earlier. Revenue was higher at RM2.98 billion versus RM2.22 billion.

The Visit Malaysia Year 2014 programme is seen as a growth catalyst for MAHB. The firm said the campaign launched in early 2013 has resulted in a positive impact on growth trends.

IJM Corportion Bhd said its wholly owned unit, JM Construction Sdn Bhd, has today accepted a letter of award from JKG Tower Sdn Bhd for the construction of two commercial blocks in Jalan Raja Laut, Kuala Lumpur.

This contract is worth RM238.35 million and the construction period of the project is 26 months, IJM told Bursa Malaysia.

The project involves the building works of one block of 32-storey office tower and one block of 13-storey elevated car park.

Keck Seng (Malaysia) Bhd, whose share price hit record high today on renewed speculation of a bumper dividend as well as a re-valution of its land in Johor, could come under pressure for profit-taking tomorrow or continue to rise on optimism.

At market close today, Kek Seng soared 59 sen or 9% to RM7.08 per unit on trades of 924,100 shares. The top gainer had earlier hit a high of RM

Expectation of a high dividend is built up again as the year is coming to an end.This is because the government has granted a six-year period between January 1, 2008 and December 31, 2013 to allow companies with unused balances to continue paying franked dividends during the period, he said.

HwangDBS Vickers Research said last December Keck Seng might reward shareholders with a bumper dividend of 96 sen a share with its tax credit balance, but this has not come about so far.

On paper, the net asset per share of Keck Seng as at end-June 2013 was RM5.25, but HwangDBS said in December 2012 it was worth RM8.60 then.