Business & Markets 2014
Written by Kamarul Anwar of theedgemalaysia.com
Wednesday, 24 September 2014 21:29
KUALA LUMPUR (Sept 24): Based on news flow and corporate announcements today, these stocks might generate investors' interest tomorrow (Thursday, Sept 25): Abric, QL, Lay Hong, TA Enterprise, Sapura Industrial, Glomac, Coastal Contracts and Scientex.
Abric Bhd has proposed to sell its entire core business of producing electronic security seals to UK-based ESNT International Ltd for RM146 million cash, on a cash-free debt-free basis, effectively turning Abric into a cash-rich shell company.
Once the divestment has been approved and completed, which is planned to take place in the fourth quarter of this year, Abric plans to distribute a special dividend of 30 sen per share, which is about 41% of its stock price of 73.5 sen at today’s close.
“The board (of Abric) believes that the proposed disposal provides an opportunity for Abric to unlock the value of its investments in the disposal companies, at a reasonable price… Abric is expected to record a gain on disposal of approximately RM63.9 million,” the company said in a filing with Bursa Malaysia.
QL Resources Bhd, which holds 26.81% in Lay Hong Bhd, has proposed to undertake a conditional voluntary take-over of the remaining shares that it does not already own in the latter, for RM3.50 per share.
The offer price represents a 1.8% premium over Lay Hong’s last done price of RM3.44, before it was suspended at 2.30 pm today. The stock will resume trading at 9 am tomorrow.
Today’s last done price of RM3.44 is a five-year high, and a significant 78 sen or 29.32% above yesterday’s closing price.
The offer price also represents a 38.89% premium over a 5-day volume weighted average price (VWAP) of Lay Hong, up to and including Sept 23 of RM2.52, and a 91.26% premium over a 12-month VWAP of RM1.83.
Based on Lay Hong’s unaudited net asset of RM2.43 as at June 30, the offer price stood at a premium of 44%.
On the rationale for the take-over, QL said it was because Lay Hong’s controlling shareholders had not re-elected QL’s sole representative, Chia Mak Hooi, as a board member of Lay Hong at its annual general meeting on Monday, “without QL’s prior knowledge”.
TA Enterprise Bhd’s net profit for the second quarter ended July 31, 2014 (2QFY15) jumped 27% to RM40.6 million, from RM31.9 million in 2QFY14, due to improved performance in all its divisions, particularly investment holding, as well as credit and lending.
The stockbroker-cum-developer’s filing with Bursa Malaysia today also showed that revenue for the group increased 45.3% to RM273.8 million in 2QFY15, from RM188.46 million in 2QFY14, mainly due to higher revenue in its broking and financial services, which recorded higher brokerage and corporate advisory income.
For the six months ended July 31, 2014 (1HFY15), the group recorded a net profit of RM98.3 million — a 49.3% jump from the RM65.8 million recorded in 1HFY14; while revenue increased 31.1% to RM484.27 million, from RM369.38 million.
“We expect the stockbroking division [to] continue to operate in a highly competitive and challenging environment, and we will also continue to promote fee-based business and other innovative products to boost our revenue,” said TA Enterprise on its outlook for FY15.
Sapura Industrial Bhd's net profit for the second quarter ended July 31, 2014 (2QFY15), declined by 5.45% to RM3.82 million, against RM4.04 million a year ago; while revenue slipped 4.40% to RM65.36 million, from RM68.37 million.
The revenue drop was attributed by the company to lower domestic volume for certain models, its listing to Bursa Malaysia today showed. Earnings per share fell to 5.25 sen, from 5.56 sen in the previous corresponding quarter.
Looking forward, Sapura Industrial said the total industry volume is projected to grow 2.2% to 670,000 car sets in 2014, from 655,793 last year.
"Despite this, we are cautious that market conditions will continue to be challenging for this sector. As such, the group has intensified efforts to further strengthen operational efficiency," it added.
Glomac Bhd’s net profit for its first quarter ended July 31, 2014 (1QFY15) fell 13.62% to RM20.85 million, from RM24.13 million in 1QFY14, due to lower revenue, as the property developer has completed the Damansara Residences and is on the tail-end of its Bandar Saujana Utama project.
Glomac’s revenue for 1QFY15 consequently dropped 34.35% to RM106.54 million, from the previous corresponding quarter’s RM162.27 million.
Glomac said it had unbilled sales of RM630 million as at end-July, and has lined up launches comprising niche products and affordable properties.
Going forward, Glomac is banking on its portfolio of landed and township projects, for its growth momentum beyond the current financial year ending April 30, 2015 (FY15).
“With our successful land acquisition in Bandar Saujana Utama and Kulaijaya last year, we now have available land bank with potential gross development value of RM8 billion, where more than 85% will be derived from landed residential and affordable township developments,” Glomac said.
The Employees Provident Fund (EPF) has ceased to be a substantial shareholder of Coastal Contracts Bhd, barely two months after the pension fund emerged as a substantial shareholder of the firm.
In a filing with Bursa Malaysia today, the ship builder said EPF disposed of 120,000 shares on the open market on Sept 18. "The disposal of shares was by EPF FD BD (AM INV)," the filing said.
The ship builder said it received the notice of cessation dated Sept 19, today. Following the disposal, EPF still holds a total of 26.51 million shares in the firm.
Scientex Bhd’s net profit soared 61.4% to RM48.8 million for the fourth quarter ended July 31, 2014, from RM30.3 million in the previous corresponding quarter. Revenue jumped 11.9% to RM415.4 million, from RM371.2 million previously.
For the full-year, Scientex’s net profit stood at RM148.5 million, versus RM110.3 million in the previous year; while revenue rose to RM1.59 billion, from RM1.23 billion a year ago.
The predominantly industrial stretch film producer recommended a single-tier final dividend of 13 sen per share. In a statement to Bursa Malaysia, the company said both its manufacturing and property segments saw higher profits, in line with higher revenue recorded.
The firm said its manufacturing segment’s higher revenue and profit was mainly due to the better sales performance achieved from the industrial packaging products and the full-year contribution from the consumer packaging products.
In the property segment, revenue jumped 25.8% mainly due to progress billings from on-going projects, as well as the maiden contribution from the Taman Scientex Senai project, which saw overwhelming response. Scientex added that the response from the new launches of Taman Scientex Pasir Gudang, Taman Scientex Kulai and Taman Mutiara Mas, Johor and Melaka, remained encouraging.
Barring any unforeseen circumstances, the company said it remained optimistic of its performance for both segments in the coming financial year.
Meanwhile, Scientex’s managing director also told reporters today that the company is eyeing a 10-fold increase in its production of biaxially oriented polypropylene (BOPP) film to 60,000 tonnes, from 6,000 tonnes, following the construction of a new BOPP film manufacturing plant in Pulau Indah, Klang.
The plant will be constructed in collaboration with Japan-based Futamura Chemical Co. Ltd, which the group signed a share sale agreement with, yesterday. Lim said the expansion plans will require total capital expenditure of RM300 million, over a period of three years.