Stocks To Watch Pet. Dagangan, Digi, Sarawak counters, Tadmax, SILK, UMW-OG, HeiTech, Minetech


Business & Markets 2014
Written by Ho Wah Foon of theedgemalaysia.com   
Thursday, 06 February 2014 20:03

KUALA LUMPUR (Feb 6): Based on corporate announcements today, the counters that may attract attention tomorrow include the following:

Petronas Dagangan Bhd reported a lower fourth quarter net profit of RM151.31 million, compared to RM176.50 million netted in similar quarter a year ago.

But revenue for the fourth quarter ended Dec 31, 2013, rose to RM8.39 billion from RM7.69 billion in the fourth quarter of 2012, according to the company’s filing with Bursa Malaysia.

The huge trading arm of national oil company Petronas declared an interim dividend of 17.5 sen.

Reviewing the fourth quarter results, the company said the increase of RM698.0 million in revenue was due to an increase in average selling price by 6.1% and increase in sales volume by 2.8%.

But higher operating expenditure had depressed profits.

For the full year of 2013, total profits came to RM811.75 million, compared to RM836.84 million in 2012 while revenue totalled RM32.34 billion, up from RM29.51 billion.

Looking ahead, Petronas Dagangan’s retail segment was expected to maintain its margin contribution, mainly from the sales of subsidised petroleum products. Its commercial segment was also expected to maintain its performance.

Digi.com Bhd, rose 17 sen or 3.6% to RM4.85, after announcing a spectacular set of results today.

DiGi.Com Bhd reported a 123% jump in fourth quarter net profit from a year earlier as revenue rose on higher subscriber base and Internet income.

DiGi said net profit jumped to RM548.52 million in the fourth quarter ended December 31, 2013 (4QFY13) from RM245.52 million. Revenue rose to RM1.73 billion from RM1.63 billion.

Its full-year net profit rose to RM1.71 billion from RM1.21 billion a year earlier. Revenue was higher at RM6.73 billion versus RM6.36 billion.

DiGi plans to reward shareholders with a tax-free dividend of seven sen a share for 4QFY13. This brings full-year dividends to 21.3 sen per share.

Looking ahead, DiGi said it expected to see growth, expansion to moderate due to market competition and rising cost. During FY14, DiGi expects revenue to grow between 4% and 6%.

Sarawak’s politically-linked counters, such as CMSB and Naim, will continue to be in focus amid news that Sarawak Chief Minister (CM) Tan Sri Abdul Taib Mahmud is stepping down from its powerful post.

At market close today, Cahya Mata Sarawak Bhd (CMSB) fell 22 sen or 3% to end at RM7.02, Naim Holdings Bhd lost 8 sen or 2.3% to RM3.42 but Dayang Enterprise Holdings Bhd rebounded with a rise of 15 sen or 4% to RM3.75 after yesterday’s fall.

Although there is no official confirmation of this major news that Taib will retire from CM’s post this weekend, there has been no official denial so far.

Dealers said all these counters, which had been the major beneficiaries of Sarawak government contracts in the past, might not continue to enjoy easy flow of government contracts once Taib leaves office.

Tadmax Resources Bhd said it was in preliminary discussions with Felda Global Ventures Bhd and other parties for a land sale.

This followed a report by a local daily saying the timber company, which also delved into property development, was in land sale talks of up to RM1 billion.

In a statement to Bursa Malaysia, Tadmax said: “No definitive terms have been discussed with any party to date and discussions have been generally exploratory.”

SILK Holdings Bhd announced it disposed an anchor handling vessel for RM25 million or US$8 million as part of its fleet renewal and replacement programme.

In a statement to Bursa Malaysia, SILK said its subsidiary Jasa Merin (M) Sdn Bhd had today entered into a memorandum of agreement to dispose the vessel.

SILK said the sales proceed would be partially utilised to fully retire the remaining loan on the vessel of RM6.7 million. The balance would be retained for working capital purposes.

“The disposal will contribute positively to the earnings and assets of SILK for the financial year ending July 31, 2014,” the group said.

UMW Oil & Gas Corporation Bhd (UMW-OG) announced that a unit within the group had commissioned the construction of a rig vessel for US$218 million.

In a statement, it said UMW Drilling 8 (L) Ltd, a wholly owned unit of UMW Rig Asset (L) Ltd, which in turn is a wholly owned subsidiary of UMW-OG, entered into a rig vessel construction agreement today with Keppel FELS Limited for US$218 million.

Under the agreement, Keppel FELS would design and construct the rig vessel for UMW Drilling 8 (L) Ltd, for expected delivery end-September 2015.

“The purchase of the rig vessel is in line with UMW-OG group's plan to raise revenue and profit contributions from its drilling operations…It will also facilitate UMW-OG's expansion specifically in Malaysia and globally,” said UMW-OG in a filing with Bursa Malaysia.

The agreement is expected to contribute positively to the earnings and net assets of the group for the financial year ending 31 December 2015 and thereafter, it added.

HeiTech Padu Bhd has secured two ICT contracts amounting to RM19 million from the Ministry of Health, Malaysia.

The IT systems and technology services provider said it had today accepted the letter of awards for the ICT projects at Hospital Raja Perempuan Zainab II, Kota Bahru; Hospital Tunku Ja’afar, Seremban, and Hospital Bentong, Pahang.

HeiTech also said it would provide the supply and upgrade of infrastructure for the hospitals.

“The proposed transactions are expected to contribute positively to the future earnings of the group,” said HeiTech.

Minetech Resources Bhd has been slapped with an unusual market activity (UMA) query by Bursa Malaysia over the sharp rise in trading volume of the company’s shares today.

Minetech, the third most active counter, saw trades of some 84 million shares. The stock closed higher at 25.5 sen, after gaining 2.5 sen or 11%.

From late January’s 18 sen up to today’s 25.5 sen, the stock has risen by 42%.  

Bursa ordered the mining firm, that also delved in civil engineering works, to respond to its queries immediately for public release after making due enquiry with its directors, major shareholders and other relevant persons.

Bursa queried if there was any corporate development relating to the group’s business and affairs that had not been previously announced.

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