YGL Convergence, Omesti, Poh Kong, MAHB, Hibiscus Petroleum and Land & General

By Sulhi Azman / theedgemarkets.com   | June 10, 2015 : 10:54 PM MYT   

KUALA LUMPUR (June 10): Based on corporate announcements and newsflow today, stocks in focus tomorrow (Thursday, June 11) could include: YGL Convergence, Omesti, Poh Kong, Malaysia Airports Holdings (MAHB) (Financial Dashboard), Hibiscus Petroleum and Land & General.

MSC-status business solution provider YGL Convergence Bhd ( Financial Dashboard) (fundamental: 1.55; valuation: 0) has proposed a private placement to raise some RM3.89 million, assuming an indicative offer price of 22 sen per share.

In a filing with Bursa Malaysia, YGL said of the total, RM3 million will be utilised for the group's research and development (R&D) expenditure, while some RM791,000 will be used as working capital, which may include general expenses.

YGL expects to complete the transaction by the fourth quarter of this year.

Technology firm Omesti Bhd has proposed to distribute up to 5.98 million Microlink Solutions Bhd ( Financial Dashboard) shares that it currently owns, to its entitled shareholders, on the basis of one Microlink shares for every 100 Omesti shares held.

In a filing with Bursa Malaysia, Omesti, which provides technology solutions to the financial industry, announced that the shares will be distributed by way of a dividend-in-specie to be offset against the company’s retained profits.

Omesti (fundamental: 0.95; valuation: 0.6) is the single largest shareholder of Microlink (fundamental: 2.1; valuation: 0.2), with 120.23 million shares or a 79.02% stake in the latter.

The proposed distribution entails the distribution of up to 5.98 million Microlink shares, representing up to about 3.93% equity stake in Microlink.

Omesti is also offering 20.6 million ESOS options to eligible directors and employees of the company.

“The proposed distribution is intended to reward the shareholders for their continued support of Omesti, and its subsidiaries and to provide them with an opportunity to have direct equity participation in the prospects of Microlink and its subsidiaries at zero subscription cost,” said Omesti in the announcement.

In addition, the proposed distribution is undertaken as part of Omesti’s effort to rectify the shortfall in the public shareholding spread of Microlink and is expected to increase the shareholder base and public float of Microlink.

It said the enlarged shareholder base may potentially enhance the liquidity of Microlink shares on Bursa. As at the latest practicable date (June 9), the public shareholding spread of Microlink was 20.84%.

Jeweller Poh Kong Holdings Bhd saw its net profit for the third financial quarter ended April 30, 2015 (3QFY15) almost double to RM7.93 million or 1.93 sen a share, from RM4.13 million or 1.01 sen a share last year, on better net income and improvement in gross profit margin.

Quarterly revenue climbed 15% to RM210.35 million, from RM183.12 million, on higher demand for gold investment products and jewellery products, possibly due to impending implementation of the goods and services tax (GST).

Poh Kong (fundamental: 0.95; valuation: 1.4) said the major revenue contributors were gold jewellery and gold investment products.

"Post-GST, the market demand has dampened, although we expect it will gradually normalised," it added.

For the cumulative nine months (9MFY15), Poh Kong's net profit jumped 86.08% to RM18.72 million or 4.56 sen a share, against RM10.06 million or 2.45 sen a share in 9MFY14; while revenue strengthened to RM620.76 million — up 5% from RM590.16 million in a year ago.

On prospects, Poh Kong expects Malaysians to continue to be cautious in their spending and that will pose the biggest challenge to the retail industry.

“Barring unforeseen circumstances, the group is cautiously optimistic of its performance for FY15,” it added.

Malaysia Airports Holdings Bhd (MAHB) (fundamental: 1; valuation: 1.4) handled 5.6% more passengers in May 2015, with 7.12 million passengers passing through its 39 airports in the country, compared with 6.74 million passengers in May 2014.

Of the total, the airport operator saw 4.1 million passengers pass through the KL International Airport (KLIA) in Sepang in May — a 3.4% rise from 3.96 million a year ago.

International traffic grew 2.1% to 3.28 million, from 3.21 million in May 2014; while domestic traffic rose 8.7% to 3.84 million, from 3.53 million during the same period under review.

Overall aircraft movements grew 5.9% year-on-year in May, with domestic and international registering 6.2% and 5.4% increases respectively.

Meanwhile, for the cumulative five months of this year, MAHB saw a marginal 0.7% increase in passengers passing through its 39 airports to 34.33 million, from 34.08 million in the year-ago period.

The first five months performance was dragged by a 1.1% contraction in passenger traffic at KLIA to 20.05 million, compared with 20.27 million a year ago.

International traffic fell 1.8% to 16.37 million, from 16.66 million a year ago; while domestic traffic dropped 3.2% to 17.97 million, from 17.41 million in the January-May 2014 period.

Upstream oil and gas player Hibiscus Petroleum Bhd ( Financial Dashboard) has fixed the price of the third-tranche of its private placement at 67 sen per share.

“The issue price represents a discount of 4 sen or approximately 5.63% to the five-day volume weighted average market price up to and including June 9, 2015, being the market day immediately prior to the price-fixing date, of approximately 71 sen,” said Hibiscus in a filing with Bursa Malaysia today.

To recap, Hibiscus had on Oct 14, 2014 announced its plan to raise some RM130.18 million via the issuance of up to 89.16 million shares, equivalent to 10% of its issued and paid-up capital.

According to Hibiscus, the bulk of the gross proceeds will be used to develop the West Seahorse oilfield in the offshore Gippsland Basin, Australia.

Property developer Land & General Bhd ( Financial Dashboard) announced its wholly-owned unit Victory Vista Sdn Bhd is acquiring Pembinaan Jaya Megah Sdn Bhd — which will own 112.353 acres of land in Selangor — for RM90 million cash.

Pembinaan Jaya Megah is currently alienating 112.353 acres of a 99-year leasehold land in Bukit Raja, Selangor, from Petaling’s Land and District Office (PTP), according to Land & General’s filing to Bursa Malaysia today.

“On Nov 5, 2014, PTP has given its approval for the alienation of the Land and pursuant to the PTP approval, the leasehold period is 99 years and the expiry of the lease period is not yet not available, pending completion of the alienation of the Land and issuance of land title(s),” said Land & General.

Selangor royalty Tengku Sulaiman Shah Al-Haj Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Al-Haj owns a 30% stake in Pembinaan Jaya Megah, while the remaining 70% interest are held by Datuk Hui Swee Seong and family members.

Land & General said its proposal to acquire Pembinaan Jaya Megah will expand its land bank, which will facilitate future development projects that will contribute positively to its future earnings and cash flows.

According to annual report 2013, Land & General has some 31ha of land for development, with a net book value of RM38.06 million.