Stocks To Watch MAS, Sumatec, Kulim, TNB, Seacera, MAHB, Astra Asia, DVM, DRB-Hicom


Business & Markets 2014
Written by Ho Wah Foon of theedgemalaysia.com   
Tuesday, 24 June 2014 19:27

KUALA LUMPUR (June 24): Based on news flow and corporate announcements today, the companies that may be in focus tomorrow (June 25) could include MAS, Sumatec, Kulim, TNB, Seacera, MAHB, Astra Asia, DVM, DRB-Hicom.

Malaysia Airlines System Bhd (MAS) is likely to be actively traded tomorrow as investors await for news emerging from the company’s annual general meeting (AGM) tomorrow.

Plagued by a series of negative news and downgrades of the stock by analysts, investors are likely to raise many questions at the AGM. The restructuring of MAS may also be in focus.  

After the AGM, MAS will hold a media dialogue session with its chairman, group CEO and senior management team.

Sumatec Resources Bhd, which rose in active trades after the company released an update report on its oil and gas reserves at the Rakushechnoye oil and gas field in Kazakhstan, may continue to attract interest.

In its update supported by a table, Sumatec said in a filing with Bursa Malaysia: “The updated reserves for oil and gas have both increased, with most notably the oil reserves increasing by more than 30%.”

At market close, Sumatec – the top most actively traded stock – rose 3.5 sen or 12.7% to 31 sen on trades of 185.99 million shares. It had hit a high of 32 sen earlier.

The business of Sumatec, the independent oil and gas production firm controlled by Tan Sri Halim Saad, focuses on proven oil/gas assets in Central Asia.

According to the table in the filing, while oil reserves have increased, gas reserves have gone from “contingent” to “proved, probable and possible”.

An additional 10 million barrels of oil is now available under 2P reserves to Sumatec, worth US$175 million in net profit from oil sale, said the company.

Kulim Bhd’s re-entry into Indonesia last October is expected to expand its oil palm landbank by some 40,000 hectares, according to the company.

Kulim’s chairman Datuk Kamaruzzaman Abu Kassim said planting will commence after obtaining environmental and ‘Roundtable on Sustainable Palm Oil’ (RSPO) approvals.

“The group’s move to secure additional landbank via its 74% stake in PT Wisesa Inspirasi Nusantara is key to growth for its plantation segment,” he said after Kulim’s AGM and EGM today.

Kulim’s Managing Director Ahamad Mohamad commented that the company is eager to widen its plantation footprint in Indonesia to improve the group’s financial and operational performance.

Tenaga Nasional Bhd (TNB) expects electricity consumption to increase during the El Nino, which is expected to hit the country soon.

In a statement today, its corporate communications general manager Omar Sidek said during the 2009 El Nino, electricity loading was 2% higher than forecast.

"The effects of the El Nino phenomenon can be felt now... This will result in the increasing use of air-conditioning and fans in the factories, business premises, offices and homes," he said.

Seacera Group Bhd today entered into a memorandum of understanding (MOU) with Intelligent Fence (M) Sdn. Bhd. (IFSB) to bid for a project to build and operate an electric security fence along Malaysia-Thai border.

The project is to build, operate and transfer an electric security fence along the border of Malaysia and Thailand, which is about 506 kilometers, said Seacera.

But the value of the project to be tendered is not stated.

According to Seacera, IFSB is the authorised distributor in Malaysia to market and install the intelligence fence technology derived from South Africa.

Malaysia Airports Holdings Bhd (MAHB) may recognise a one-off earnings in the second half of this year from winning its dispute against the government of Maldives, according to Hong Leong Investment Bank.

Yesterday, MAHB announced that arbitrators in the a proceeding initiated by the Maldivian government has ruled in favour of GMR Male International Airport Pvt Ltd (GMIAL) after its 25-year concession agreement was terminated in 2012.

GMIAL is a special purpose vehicle set up by MAHB and India’s GMD International Ltd (GMR).

The Maldivian government and Maldives Airport Co Ltd (MACL) were ordered to pay GMIAL US$4 million (RM12.84 million) within 42 days.

“Hence, MAHB may recognise one-off earnings in 2H14,” said HLIB. The research house said that MAHB is studying the amount of damages claimable against the Maldivian government and MACL, considering that MAHB had impaired RM21.5 million in investments and RM47.4 million in retained earnings in 4Q12.

Astral Asia Bhd is set to triple its land bank to 15,000 hectares in Indonesia, according to its executive director Lim Guan Shiun.

Speaking to theedgemalaysia.com after the company’s annual general meeting today, Lim said: “We’ve already obtained some offers for land in Kalimantan Barat near the border of Sabah and Sarawak.”

He added that if the negotiations are successful, this would help expand the company’s existing plantation land bank by three times.

“The current landbank size of our company about 5000 hectares and the land we’re looking to acquire is about 12,000 hectares,” he said.

KUB Malaysia Berhad (KUB) expects to maintain its strong performance in the future years after it posted operating profit of RM7.7 million and EBITDA of RM23.5 million for the financial year ended 31 December 2013, said the company.

In 2012, the company posted an operating loss of RM12.3 million and EBITDA of RM4.2 million.

“KUB will share with the members of the media on the details of how KUB could capture sustainable profits and the strategies to continue with this profitability path on Wednesday, June 25, after the group’s 49th annual general meeting,” said KUB.

DVM Technology Bhd has proposed to diversify its business to include the trading of home appliances, as it aims to reduce its dependency on its existing ICT business.

DVM today entered into a share sale agreement with Pacifica Group Sdn Bhd for the acquisition of the entire equity interest in GE Green Sdn Bhd, a company that distributes kitchen appliances, for RM7 million.

“Upon completion of the proposed diversification, the group’s existing business would remain as the core business whilst the distribution of kitchen appliances would become another core business of the group,” said DVM.

DRB-HICOM Bhd announced that its units, Edaran Otomobil Nasional Berhad (EON) and DRB-HICOM Auto Solutions Sdn Bhd (DHAS) have entered into a distributor and import agreement (DIA) with Chrysler Group International LLC for the latter’s vehicles.

Within the terms of the DIA are:

a) The exclusive distribution rights granted by Chrysler to EON for sale and service of selected Chrysler brand new completely built-up motor vehicles, and a non-exclusive distributor of genuine parts and accessories for the Chrysler vehicles;

b) The exclusive import rights granted by Chrysler to DHAS for the import of Chrysler vehicles into Malaysia.

c) The DIA shall be for a period of three years, and will continue in full force for successive and renewable one year term.