Stocks To Watch SP Setia, Mitrajaya, TA Ent, TA Global, construction, Westports, UMW O&G

Business & Markets 2013
Written by Ho Wah Foon of   
Thursday, 12 December 2013 20:04

KUALA LUMPUR (Dec 12): Based on news flow and corporate announcements today, the stocks that may catch eyeballs tomorrow could include the following:

SP Setia Bhd’s unbilled sales of RM9.6 billion will guarantee earnings for the next three years, CEO Tan Sri Liew Kee Sin said today.

Margin for the property group will jump in 2016, when profits from London and Australia are recognised, he said after releasing SP Setia’s latest results.

Liew said the property developer will be ‘in a good time’ for the next three years despite the ‘gloomy’ property market. “This is the ‘best year ever’ for SP Setia,” Liew said.

SP Setia reported that its sales for the financial year ended Oct 31, 2013, doubled to RM8.24 billion compared to RM4.23 billion last year.

Liew also highlighted that the firm had exceeded its full-year sales target of RM5.5 billion.

Liew said: “As far as profits are concerned, our profit before tax increased only marginally. This is due to the fact that profits from our projects in London and Melbourne can only recognise upon completion.”

“We incurred costs for our projects but profits are not recognised progressively. But come 2016 onwards, we can recognise profits from our projects in London and Melbourne… The margins will jump tremendously.”

For the fourth quarter ended Oct 31 (4QFY13), the group recorded net profit of RM127.29 million, marginally higher than RM127.02 million. Its revenue for the 4QFY13 jumped to RM900.16 million from RM763.62 million previously.

For the full year, the group’s net profit rose 6% to RM417.85 million from RM393.81 million in previous financial year. Revenue rose to RM3.06 billion from RM2.52 billion previously.

S P Setia has proposed a final dividend of seven sen per share.

Mitrajaya Holdings Bhd (MHB) announced it has via its wholly-owned subsidiary accepted a RM428 million award to build office buildings for Suruhanjaya Pencegahan Rasuah Malaysia (SPRM).

In a statement to Bursa Malaysia, the company said its wholly-owned unit Pembinaan Mitrajaya Sdn Bhd accepted the award from Putrajaya Holdings Sdn Bhd, for the proposed design, construction and completion of the office buildings.

MHB said the office buildings consist of three blocks of office towers, seven levels of podium, one level sub-basement and external works for (SPRM) at the Federal Government Administrative Centre, Wilayah Persekutuan Putrajaya.

“The contract is expected to contribute positively to the group’s future earnings,” said MHB.

The group said the contract is for duration of 36 months and is expected to be completed by Dec 25, 2016.

TA Enterprise Berhad’s net profit for the third financial quarter ended October 31, 2013 was, RM42 million, a rise of 24.8% from similar quarter a year ago.

The group attributed its higher profit before tax to higher contribution from its investment portfolios and higher reversal of impairment loss on trade receivables.

Revenue for the quarter fell to RM178 million from RM190 million last year.

“The drop in revenue was mainly attributable to lower contribution from the credit and lending division, and the property development decision,” the company said in a report they filed to Bursa.

Net profit for the nine months to October rose to RM107.8 million from RM60.7 million. Cumulative revenue rose to RM548 million from RM544 million just a year ago.

TA Global Bhd saw its net profit for third quarter to October plunge to RM19 million, compared to RM34 million a year ago.

Revenue of the property group fell by RM10 million to RM159 million.

Construction stocks may be excited by the news that plan for the proposed Singapore-Kuala Lumpur high-speed rail link will be finalised next year.

Prime Minister Datuk Seri Najib Tun Razak said this on Twitter today: “Insya-Allah (God willing), we will be able to finalise the proposed Singapore-KL high-speed rail project next year."

The proposed US$12 billion (RM40 billion) 330km project was announced by the prime minister and his Singaporean counterpart Lee Hsien Loong in February.

Najib said the project, when completed in 2020, would shorten travelling time between the two cities to just 90 minutes, Bernama reported.

Westports Holdings, UMW Oil and Gas as well as Malaysia Marine and Heavy Engineering Holdings will be included into FTSE Bursa Malaysia Hijrah Shariah Index while SapuraKencana Petroleum, Bumi Armada and SP Setia will be excluded.

According to a Bursa Malaysia announcement, all constituent changes will take effect on Dec 23, 2013, and the next review will take place on June 5, 2014.