Stocks To Watch Bumi Armada, Affin, MPHB Cap, Zhulian, MRCB, Pantech


Business & Markets 2014
Written by Ho Wah Foon of theedgemalaysia.com   
Wednesday, 22 January 2014 19:27

KUALA LUMPUR (Jan 22): Based on news flow and corporate announcements up to 7.15 pm today, the companies that could attract interest tomorrow include the following:

Bumi Armada Bhd’s CEO and executive director Hassan Basma said the firm is optimistic of bagging the floating production, storage and offloading (FPSO) contract for the East Hub project in Block 15/06, off Angola.

Speaking at a contract signing ceremony between Bumi Armada and EnQuest PLC, Hassan said the integrated offshore oil & gas service provider is in the run for 10 FPSO contracts, including the Angola FPSO contract.

“We are optimistic of the outcome and expect to hear about it, maybe, after the Chinese New Year,” said Hassan, adding that Bumi Armada is the frontrunner for the Angola contract.

“The capital expenditure for this contract will be approximately US$1.5 billion, bigger than the Kraken contract of US$1 billion.”

Hassan said he is confident of the outlook despite the competitive FPSO market.

“We are the best,” he declared.

“Today, we are the fourth FPSO player in the world but if we continue on this growth trajectory, we might see ourselves moving up to the top one or two players in 2016,” he added.

On another issue, Hassan said Bumi Armada has plans to raise more capital as the firm has ‘big plans’ in the pipeline. “We will approach the market very soon, perhaps in the first quarter, to raise capital from equity and bonds of approximately US$1.5 billion,” he said.

Affin Holdings Bhd announced today that it has signed an agreement to acquire HwangDBS Investment Bank Berhad and its assets for RM1.36 billion.

The purchase consideration for 100 % of Hwang’s investment banking is RM1.08 billion and this implies a 1.28 times Hwang's book value of RM849.26 million.

The other assets acquired were 70 % Hwang Investment Management Berhad and 49% of Asian Islamic Management Sdn Bhd for a total of RM262 million.

In addition, HDM Futures was also purchased for RM13 million that implies a 1.03 times HDM Futures’ book value of RM 12.59 million.

"The proposed acquisitions will transform Affin's investment banking franchise, adding a suite of complementary strengths and capabilities to drive its strategic plan to become the leading independent investment bank in Malaysia," said Puan Maimoonah Hussain, managing director of Affin Investment Bank.

Zhulian Corporation Bhd’s net profit for its fourth quarter ended 30 November 2013 saw a significant year-on-year (y-o-y) decline of 56% to RM13.7 million from RM31.3 million.

According to its statement to the bourse, revenue for 4QFY13 also fell 33% to RM78.0 million from RM117.2 million in 4QFY12.

However, cumulative net profit for the twelve months to November rose slightly to RM121.0 million compared to RM117.1 million in the previous year, while revenue for the period declined to RM417.1 million from RM450.4 million.

The group attributed the lower revenue for the year to “a fall in the local market demand”, while the higher profit before tax for the year was derived from an increase in the share of profits from associate companies.

The group said it is optimistic of its performance for FY14, despite the hike in fuel prices and electricity tariffs, which may affect domestic consumer sentiment, and also the political instability in Thailand which may affect its exports.

MPHB Capital Bhd said it has received expressions of interest from a party to form “a strategic alliance” with its wholly owned unit, Multi-Purpose Insurans Bhd (MPIB).

“Bank Negara Malaysia (BNM) has, via its letter dated 22 January 2014, stated that BNM has no objection in principle for the company to commence preliminary negotiations with the interested party in relation to the possible disposal of a minority equity interest in MPIB.”

Under the Financial Services Act, 2013, the company is required to obtain the prior approval of BNM before entering into any agreement to effect the disposal.

MPHB Capital said the proposed alliance is line with its business strategies to expand MPIB’s general insurance business, grow new businesses to provide new revenue streams as well as to increase its capacity to underwrite more insurance products.

Malaysian Resources Corp Bhd (MRCB) is mulling over the possibility of selling its stake in the 18km Duta-Ulu Kelang Expressway (DUKE) in the Klang Valley.

In response to news reports on the matter, it said in a statement to Bursa: “MRCB confirms that the board of directors at their meeting held yesterday had deliberated on the proposal to dispose its stake in DUKE.

"The proposal is still at a preliminary stage and the material terms of the proposal are still being negotiated. We wish to confirm that no agreement has been signed," MRCB said.

DUKE links the North Klang Valley Expressway at Jalan Duta to the Middle Ring Road II in Ulu Kelang in the east and Batu Caves in the north.

Hua Yang Bhd posted a net profit of RM19.7 million for the third quarter to end-December 2013, which is slightly lower than RM19.9 million in similar quarter a year ago.

The company declared an interim single tier dividend of 5 sen per share, to be paid at a date to be announced.

Revenue for the third quarter, however, rose to RM129.9 million from RM104.6 million, due to more property launches, the company told Bursa Malaysia.

Profit was lower due to higher sales and marketing expenses incurred for the newly launched property projects, it added.

For the nine months to December 2013, net profits for three quarters totalled RM44.4 million while revenue totalled RM311.6 million. For the previous year nine-months, profits totalled RM53.5 million while revenue stood at RM306.3 million.

The mid-sized property development company said despite the new property cooling measures, it “remains positive” of posting improved results for the financial year ending 31 March 2014.

Pantech Group Holdings Bhd reported a 23% decline in third quarter net profit from a year earlier.

Despite a weaker bottom line, Pantech plans to pay a third interim single-tier dividend of one sen a share.

The pipes, fittings and flow control solutions provider said profit fell on weaker results at its trading unit.

Pantech said net profit dropped to RM12.09 million in the third quarter ended November 30, 2013 from RM15.61 million. Revenue declined to RM131.09 million from RM171.52 million.

"The weaker performance is mainly due to lower contribution from the trading division," Pantech said.

Cumulative nine-month net profit fell to RM41.16 million from RM42.38 million a year earlier. Revenue was RM447.18 million versus RM480.87 million.