AirAsia, Scientex, IHH Healthcare, MBSB, Ho Wah Genting, Sino Hua-An, ECS ICT, Tadmax, Stone Master, UEM Sunrise and Mah Sing

By Sangeetha Amarthalingam / theedgemarkets.com   | August 5, 2015 : 10:28 PM MYT   

GEORGE TOWN (Aug 5): Based on corporate announcements and news flow today, companies that may be in focus tomorrow (Thursday, Aug 6) could include: AirAsia, Scientex, IHH Healthcare, MBSB, Ho Wah Genting, Sino Hua-An, ECS ICT, Tadmax, Stone Master, UEM Sunrise and Mah Sing

AirAsia Bhd’s Indonesian unit plans to sell perpetual bonds to bolster its equity position by end-September, to avoid having its operating license revoked.

The company plans to sell as many of the notes as needed, to take its financial position out of negative equity, the unit’s president director Sunu Widyatmoko said in Jakarta on Wednesday, according to Bloomberg.

Negative equity means the value of a company’s assets used to secure loans is less than its outstanding debt.

Indonesian regulators announced on Wednesday that 12 airlines, including PT Indonesia AirAsia ( Financial Dashboard), are at risk of having their permits canceled, if they don’t have positive equity by Sept 30. Regulators will announce in October, whether they’ll revoke the licenses, Transport Minister Ignasius Jonan said, the news agency reported.

AirAsia, the carrier’s Malaysian parent, set up a 1 billion ringgit ($258 million) programme in October, to sell Islamic debt with no set maturity. Widyatmoko didn’t specify if the unit’s bond sale would be part of that programme.

Packaging manufacturer and leading property developer, Scientex Bhd, is acquiring smaller rival Mondi Ipoh Sdn Bhd (MISB) for RM58 million cash to expand its consumer packaging division.

In a filing with Bursa Malaysia today, Scientex said its wholly-owned subsidiary, Scientex Packaging Film Sdn Bhd, had signed a share purchase agreement with Germany's Mondi Consumer Packaging International GmbH to acquire 21.05 million shares or a 100% stake in MISB.

Scientex said the proposed acquisition of MISB will be funded via internal funds.

“The acquisition of MISB will allow the enlarged Scientex Group ( Financial Dashboard) to expand our clientele to include leading international brands in the food and beverage and fast moving consumer goods sectors," Scientex' managing director Lim Peng Jin said in a statement.

IHH Healthcare Bhd ( Financial Dashboard), through its wholly-owned subsidiary Parkway Holdings, has acquired a 74% stake in Hyderabad-based Global Hospitals Group for an equity value of Rs 1,800 crore (RM1.09 billion), Indian news agency The Economic Times reported today.

The report, quoting two sources with direct knowledge of the development, said IHH Healthcare has bought shareholdings of private equity investor Everstone Capital, Anand Rathi Capital Advisor Pvt Ltd and some individual investors in the unlisted chain specialising in liver transplants.

The remaining 26% will continue to be owned by Global Hospitals’ founder Dr K Ravindranath, the sources said.

The report stated that the Global Hospitals chain has a debt of Rs 350 crore (RM210 million).

"The IHH Healthcare Bhd Group has purchased around 74% stake for Rs 2,150 crore, which includes Rs 350-crore debt," the report states, quoting a source involved in the deal.

Malaysia Building Society Bhd ( Financial Dashboard) (MBSB) said it is unaware of any official consent by Bank Negara Malaysia for the bank to merge with Bank Muamalat Malaysia Bhd, in response to an article by a local daily today.

According to a filing with the exchange, it was reported that MBSB had verbally received the central bank’s nod to talk to Bank Muamalat for a possible merger to become the country’s largest standalone Islamic bank.

“We wish to clarify that MBSB is not aware of any official consent or otherwise made by Bank Negara Malaysia, in relation to the abovesaid,” said the bank.

Ho Wah Genting Bhd ( Financial Dashboard) proposed a capital reduction to offset its accumulated loss, and a renounceable rights issue to raise funds for debt repayment.

In a filing with Bursa Malaysia, Ho Wah Genting said it intends to cancel 15 sen par value from each existing issued and fully paid-up share of 20 sen.

As at Aug 3, the group’s existing share capital is RM120.23 million, comprising 601.14 million shares of 20 sen each.

The reduction will result in a credit of RM90.17 million, which will be utilised to offset Ho Wah Genting’s (fundamental: 0.35; valuation: 0.3) accumulated losses.

The group’s accumulated losses stood at RM95.04 million as at March 31, 2015 (1QFY15).

Subsequent to the par value reduction, Ho Wah Genting intends to undertake a rights issue to raise up to RM49.41 million, on the basis of one rights share for every one existing share held.

Metallurgical coke producer Sino Hua-An International Bhd ( Financial Dashboard) reported today, its fourth consecutive losing quarter in the three months ended June 30, 2015, (2QFY15), with a net loss of RM20.61 million or 1.84 sen per share, due to the suspension of its subsidiary's production plant.

In the same period last year, Sino Hua-An was seeing a net profit of RM2.6 million or 0.23 sen per share. The group first slipped into the red in 3QFY14, due to lower average selling price of metallurgical coke and lower sales volume, which continued to plague it in 4QFY14.

The plant’s closure started affecting the group’s earnings in 1QFY15, when it posted a net loss of RM11.21 million or 1 sen per share.

In its filing with Bursa Malaysia, Sino Hua-An said the temporary suspension of the production plant was part of the China government’s efforts to compel industries “perceived to be polluting” the environment, to meet newly-revised environmental protection standards.

Consequently, its revenue in 2QFY15 declined 98.6% to RM3.57 million, as compared to RM261.38 million in 2QFY14.

In the cumulative six months (1HFY15), Sino Hua-An’s net loss ballooned to RM31.82 million or 2.84 sen per share, as compared to a net profit of RM3.22 million or 0.29 sen per share in 1HFY14.

Revenue in 1HFY15 declined 72.8% to RM158.32 million, compared with RM581.89 million in 1HFY14.

Malaysia’s largest distributor of information and communications technology (ICT) products, ECS ICT Bhd (Financial Dashboard), reported a 6.5% increase in net profit for its second financial quarter ended June 30, 2015 (2QFY15) to RM8 million or 4.4 sen per share, on higher sales from its ICT distribution segment.

It saw a net profit of RM7.52 million or 4.2 sen per share in 2QFY14, its filing today to Bursa Malaysia showed.

Revenue for the latest quarter was at RM418.79 million, up 7.4% from 2QFY14’s RM389.92 million, due to higher sales from mobility products, namely tablets and smartphones.

For its first financial half ended June 30, 2015 (1HFY15), ECS ICT saw a 41.4% increase in net profit to RM17.39 million, from RM12.3 million a year ago, also due to higher sales in its ICT distribution segment.

The group’s 1HFY15 revenue was RM941.65 million, up 25.9% as compared to its 1HFY14 revenue of RM747.64 million, due to higher sales, mainly from personal computers, notebooks, as well as tablets and smartphones.

Tadmax Resources Bhd ( Financial Dashboard)’s wholly-owned subsidiary, Ganggarak Development Sdn Bhd (GDSB), had on Aug 5, accepted a 36-month Bridging Financing-i facility of RM30 million, granted by Malaysia Building Society Bhd.

According to a filing to Bursa Malaysia, Tadmax (fundamental:0.6 valuation: 0.9) said the facility will be used to part finance the development of Phase 1 of Ganggarak Permai development project, comprising two blocks of residential apartments, totalling 520 units.

The project undertaken by GDSB involves development of a parcel of land, measuring 41.5 acres, located in Ganggarak, Wilayah Persekutuan Labuan, with an estimated total gross development value (GDV) of RM611 million.

Tadmax said the project consists of two main components, namely affordable housing apartments and a mixed development comprising a commercial centre cum condominiums.

Tadmax said the facility will be solely used to fund the development of the project, and the interest expenses it incurs will be covered by the revenue from the project.

It said the facility is not expected to have any material effect on its net assets, other than upping its gearing by 0.15 times on the full utilisation of the RM30 million, via-a-vis the audited equity attributable to the owners of the company of about RM197 million as at Dec 31, 2014.

Marble and granite products manufacturer Stone Master Corp Bhd (SMCB) has proposed to sign heads of agreement (HOA) with China-based Guangdong Be-Tech Security System, to diversify into electronic security locks business.

In a filing to the Bursa Malaysia today, SMCB (fundamental:0.15; valuation:0) said it proposed to sign an HOA with Guangdong Be-Tech, whereby the latter will grant exclusive agency rights to SMCB, to undertake design and installation contracts under the brand name of “BE-TECH”, in relation to the products and services in Malaysia and Singapore, to be supported by the Guangdong Be-Tech.

The China-incorporated Guangdong Be-Tech is in the business of electronic security locks development, production, sales and services, and provides tailor-made security and access system solution to hotels, high end residential projects, offices, factories and all kind of buildings.

The proposed HOA shall form the framework for future negotiations, which the parties anticipate to culminate within two months, in a definitive agreement to be inked between the parties.   

According to the HOA, Guangdong Be-Tech shall provide SMCB with an assured profit guarantee of 30% of the gross contract value of the contracts procured by the SMCB.

Under the HOA, SMCB shall pay the sum of RM80 million one-time initial agency fee to Guangdong Be-Tech, while Guangdong Be-Tech shall provide SMCB with a one-time initial kick-off package in the form of the products & services, for the value of RM65 million.

UEM Sunrise Bhd ( Financial Dashboard) is seeing stronger-than-expected take-up rate for its latest condominium offering, the Residensi Sefina Mont’ Kiara, which carries a GDV of RM307 million, and expects the project to be fully sold out by early next year.

The group’s acting chief marketing officer, Zadil Hanief Mohamad Zaidi, said the project, comprising 245 residential units with built-ups between 1,333 sq ft and 1,771 sq ft in a 35-storey tower, has recorded a take-up rate of almost 60% since its unveiling.

This exceeded its targeted takeup rate of 40% for 2015, Zadil told reporters today, after launching the project.

Although the response has been encouraging, Zadil said there are still challenges in terms of converting bookings into sales, in view of the tighter lending policies.

Meanwhile, despite the dampened sentiment on the property segment, Zadil said the demand for properties is still high, based on the group’s previous launches this year.

Zadil also said the weakening ringgit has not had any significant impact on its overseas operations.

Mah Sing Group Bhd ( Financial Dashboard) announced today that seven individuals have initiated a legal suit against its wholly-owned unit, Grand Prestige Development Sdn Bhd, over the latter’s proposed acquisition of a piece of prime, freehold tract in Seremban, Negeri Sembilan.

In its filing to Bursa Malaysia, Mah Sing said the seven are Chik Chan Chee @ Cheok Chan Chee, Cheok Choon Yoong, Ling (Liang) Ah Chai, Chang Moy @ Chan Kwai Lan, Wong Ah Kee @ Wong Gin Chin, Koo Seng Hiew and Tiew Choo Seng @ Chang Choo Chew, each being one of the alleged undivided registered proprietors/beneficial owners to the land.  

Grand Prestige has been named as one of the defendants, together with the vendors of the said land, said Mah Sing. Grand Prestige was served with a writ and statement of claim made in the High Court of Seremban, by the plaintiffs today.

The plaintiffs are seeking, amongst others, a declaration that the sales and purchase agreement (SPA) entered into between Grand Prestige and the vendors is invalid.

Recall that grand Prestige had on Aug 11, 2014, entered into an SPA to acquire the piece of land in Mukim Rantau Seremban, measuring 1,051.3 acres, for RM359.56 million cash.

Mah Sing had announced then, that it was planning a mixed development with an estimated GDV of RM7.5 billion on the site, which would be its maiden foray into Negeri Sembilan.

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