Stocks to Watch Ideal Jacobs, Kanger International, Tadmax Resources, Tune Ins, Sona Petroleum, Tiong Nam Logistics

Business & Markets 2014
Written by Liew Jia Teng of  
Monday, 18 August 2014 20:57

KUALA LUMPUR (Aug 18): Based on news flow and corporate announcements today, the stocks that may be in focus on Tuesday (Aug 19) may include the following companies:

ACE Market-listed Ideal Jacobs (Malaysia) Corp Bhd, which plans to tap into the oil and gas industry via a reverse takeover (RTO) by Cekap Technical Services Sdn Bhd and MECIP Global Engineers Sdn Bhd, has today signed a master restructuring agreement with CMOG Group Sdn Bhd – a special-purpose vehicle set up to undertake the proposed RTO and to assume the listing status of Ideal Jacobs.

The deal entails the exchange of the entire issued capital of Ideal Jacobs of up to RM13.8 million, comprising up to 138 million shares for up to 138 million new CMOG shares together with up to 69 million free warrants on the basis of one CMOG share for every one existing Ideal Jacobs share. This is together with one warrant for every two CMOG shares, at an entitlement date to be determined and announced later.

Upon completion of the RTO, all existing shareholders of Ideal Jacobs will become shareholders of CMOG and the listing status will be transferred to the latter.

Subsequently, CMOG is expected to raise RM8 million by issuing 32 million new shares to identified investors at 25 sen apiece.

Shares of Ideal Jacobs were suspended since last Thursday (Aug 14), for three consecutive trading days until today. It closed at 72 sen last Wednesday (Aug 13).

China-based bamboo products manufacturer Kanger International Bhd expects “positive” financial results in the second quarter ended June 30, 2014 (2QFY14), which is due to be released tomorrow (Aug 19).

Its managing director Leng Xingmin said the group plans to maintain its performance as per the first half of the year, while expecting sales to pick up in the second half of the year.

For the first quarter ended March 31, 2014 (1QFY14), Kanger generated a net profit of RM1.409 million on revenue of RM12.713 million.

After Kanger’s extraordinary general meeting (EGM) today, Leng told reporters that the firm is also deliberating on entering the Malaysian market, and is discussing the feasibility of setting up offices here.

Earlier at the EGM, shareholders gave Kanger the go-ahead for a one-for-five bonus issue of 86 million shares.

Over the next two years, the group plans to raise some RMB50 million (RM25.6 million) to fund its expansion plans, which include adding another 12 dealerships by the end of the year.

Timber concessionaire and property developer Tadmax Resources Bhd plans to raise gross proceeds of up to RM18.6 million, by issuing some 37.276 million shares via a private placement.

The group also proposed an issuance of 72 million new shares to settle the debt owing to Tadmax director Datuk Faizal Abdullah.

In a filing with Bursa Malaysia today, Tadmax said the proposal will enable the group to reduce its debts to a more prudent level and effectively reduce its total liabilities by RM36 million.

On the private placement, the proceeds will be allocated to finance the settlement of land purchase and property development expenditure, which amounted RM7 million and RM4.6 million respectively, without incurring additional interest costs.

In addition, RM3.5 million will be used to repay bank borrowings, which enable the group to reduce its existing gearing ratio and result in interest savings accordingly.

These proposals are expected to be completed by the fourth quarter of 2014.

Homegrown digital insurance player Tune Ins Holdings Bhd saw its net profit declined 12% to RM14.346 million for the second quarter ended June 30, 2014 (2QFY14) from RM16.305 million a year ago.

The group told Bursa Malaysia that its pre-tax profit of its general insurance business dropped by RM2 million in 2QFY14, as a result of higher staff costs for new hires and higher provision for share of Malaysian Motor Insurance Pool.

However, its revenue increased 5% to RM101.51 million from RM96.707 million in 2QFY13, contributed by higher gross earned premiums as well as higher investment income.

For the six-month cumulative period, Tune Ins’ net profit grew 11% to RM33.593 million from RM30.2 million a year earlier. The group’s revenue also rose 17% to RM215.462 million from RM183.453 million.

Sona Petroleum Bhd, an oil and gas special purpose acquisition company, saw its net loss widen to RM9.019 million in first half ended June 30, 2014 (1HFY14) compared with RM763, 000 a year before.

Sona Petroleum will only generate operating income once it has completed the qualifying acquisition. Currently, the company’s source of income are mainly derived from interest and profit earned from fixed deposit placements, while major expenses were finance costs, expenses incurred in evaluating qualifying acquisitions.

Tiong Nam Logistics Holdings Bhd saw its net profit drop 14% to RM13.194 million in the first quarter ended June 30, 2014 (1QFY15) from RM15.353 million a year ago.

In a filing with Bursa Malaysia today, the group said the decline was mainly due to its construction progress for flagship projects in Shah Alam, dubbed Tiong Nam Industrial Park 2, as well as Tiong Nam Business Park, which is located in Nusajaya, Johor Baru, are near completion stage.

Tiong Nam’s revenue for 1QFY15, however, grew 8% to RM134.278 million from RM124.228 million, on securing of new total logistics customers, higher transportation charged rate and rental rate of warehouses.