Export-oriented counters, Westports, AirAsia, MAHB, Takaso, REDtone, Suria Capital, KUB Malaysia, Formosa Prosonic and CIMB



By Gho Chee Yuan / theedgemarkets.com   | July 31, 2015 : 11:36 PM MYT   

KUALA LUMPUR (July 31): Based on corporate announcements and news flow today, companies that may be in focus on Monday (Aug 3) could include the following: Export-oriented counters, Westports, AirAsia, MAHB (Financial Dashboard), Takaso, REDtone, Suria Capital, KUB Malaysia, Formosa Prosonic and CIMB.

Export-oriented counters, such as furniture stocks and rubber gloves stocks, may be in focus as the ringgit dipped to its 16-year intraday low of 3.8405 today.

The ringgit closed lower against the greenback on Friday at 3.8230/8260 from yesterday’s closing of 3.8150/8170.

The weakening ringgit was possibly due to the political scandal linked to a state investment company, which weighed on investors sentiment that is already flagging from the protracted slump in oil.

Meanwhile, port operator Westports Holdings Bhd ( Financial Dashboard) may also be closely watched after it posted a marginal decline in its second-quarter net profit, on lower revenue.

Westports' net profit for the three months through June 30, 2015 (2QFY15) stood at RM122.09 million or 3.58 sen per share as compared to RM122.49 million or 3.59 sen per share last year.

Revenue is also weaker at RM405.28 million, 0.9% lower against RM409.03 million in 2QFY14.

Nevertheless, its container throughput increased 3% to 2.16 million TEUs (20-foot equivalent units) from 2.09 million TEUs for the period under review.

It also declared a first interim dividend of 5.32 sen per share amounting to RM181 million for the financial year ending Dec 31, 2015 (FY15), payable on Aug 26, 2015.

For the first half (1HFY15), the port operator registered a net profit of RM242.28 million or 7.1 sen a share, up 4.6% higher from RM231.53 million or 6.79 sen a share in 1HFY14 on reduction of fuel costs while handling a commendable increase in container throughput, which grew 10% to 4.42 million TEUs.

Revenue for 1HFY15 climbed 4.1% to RM804 million from RM772.18 million in 1HFY14.

AirAsia Bhd ( Financial Dashboard) is seeking a RM409 million compensation from Malaysia Airports Holdings Bhd (MAHB) for alleged losses and damages arising from its operation at klia2 and the low-cost carrier terminal (LCCT).

In a statement on Friday, AirAsia (fundamental: 1.4; valuation: 0.2) said it had served a letter of demand to MAHB (fundamental: 1; valuation: 1.4) and Malaysia Airports (Sepang) Sdn Bhd for the alleged loss and damages.

The low-cost carrier has claimed that MAHB, as an airport operator, has failed and/or breached its contractual duties and duty of care which has caused AirAsia to suffer and continue to suffer losses, as a result of MAHB's breach.

It claimed that MAHB's breach has damaged its brand and reputation as the failings of the facilities are perceived to be within the control of AirAsia, with the airline being the single largest operator of klia2.

Takaso Resources Bhd ( Financial Dashboard) is partnered with Makok International Sdn Bhd (MISB) to undertake a mixed development on a piece of freehold land in Kuala Lumpur.

The baby products and condoms maker said it has accepted a conditional offer letter yesterday from MISB, the legal owner of the 1,492.23 sq metres (0.15 ha) land, to acquire a 51% stake in the latter's unit, Masbe Coffee Sdn Bhd (MCSB).

MISB had on June 26, 2015 moved to acquire all the shares of the dormant MCSB from its two shareholders Mak Chong Moon (50%) and the now deceased Mak Kok (50%)'s beneficiaries.

MISB then entered into a joint venture agreement dated Dec 29, 2014 with MCSB to develop the land into a residential, commercial or mixed development project.

“MCSB has obtained the principal Development Order for the land on April 10, 2015. Currently, the development project is at the initial stage,” it added.

“The deal bodes well for the group should it go through,” said Takaso (fundamental: 1.65; valuation: 0) executive director Ong Kah Hoe.

Mobile network services provider REDtone International Bhd ( Financial Dashboard) saw its net loss for the fourth financial quarter ended May 31, 2015 (4QFY15) narrow to RM7.56 million or 0.26 sen per share from RM7.56 million or 1.5 sen per share last year. REDtone is 52.27% owned by tycoon Tan Sri Vincent Tan.

The group had recorded a higher net loss in 4QFY14 due to an impairment adjustment related to a long outstanding debt owed by a third party.

According to its filing with Bursa Malaysia today, the group will provide RM15.05 million for impairment of the long outstanding debt.

The ACE market-listed company posted a revenue of RM31.87 million for 4QFY15 from RM34.27 million in 4QFY14, due to delays in large projects.

For the full year, REDtone (fundamental: 2.3; valuation: 0.5) recorded a 59.8% jump in net profit to RM11.38 million or 2.18 sen per share from RM7.13 million or 1.42 sen per share in FY14.

Full year revenue also added 6.1% to RM150.37 million in FY15 versus RM141.76 million in FY14.

Looking forward, REDtone expects to see the results in financial year 2016 (FY16) and beyond, specifically in the healthcare, Internet of Things (IoT) and cloud services areas.

The group is set to introduce its first IoT services soon.

“Barring any unforeseen circumstances, the group intends to seek a transfer to the Main Market of Bursa Malaysia,” it added.

Suria Capital Holdings Bhd ( Financial Dashboard)'s unit SCHB Engineering Services Sdn Bhd has yesterday signed a memorandum of understanding (MoU) with the Sabah unit of UK-based Smiths Gore, for property management services and training purposes.

Under the MoU, Smiths Gore provides property management services and training for its wholly-owned subsidiary, SCHB Engineering.

It told Bursa Malaysia today the MoU is to set out the basis for collaboration between the two companies in relation to property management.

Smiths Gore is a chartered property surveyor, valuer and estate agent.

Barely three months after occupying the post, KUB Malaysia Bhd ( Financial Dashboard) group chief executive officer (CEO) Datuk Zainal Abidin Salleh has resigned amid allegations of falsifying his academic qualification.

In a filing with Bursa Malaysia today, KUB (fundamental: 1.15; valuation: 1.5) said Zainal Abidin, 52, has tendered his resignation, citing personal reasons, and the board of directors has accepted it.

KUB said Zainal Abidin will serve a three-month notice period under the terms of his contract.

Zainal Abidin's resignation came after a statement by a shareholder at the group’s annual general meeting on June 16, 2015, on the alleged falsification of his academic qualification.

KUB, which is 23.62%-owned by the Ministry of Finance Inc, named Zainal Abidin as the group CEO on April 17 this year, replacing Datuk Wan Mohd Nor Wan Ahmad, 61, who had left the position in November last year after his contract expired.

Prior to the appointment, Zainal Abiddin was the group chief operating officer.

Formosa Prosonic Industries Bhd ( Financial Dashboard) is disposing of its entire stake in Hong Kong-based subsidiary FP Group Ltd for US$14.30 million (RM54.57 million) to Tonly International Ltd, in anticipation of a significant reduction in orders from its customers in China due to the slowing world economy.

FP Group is a 60%-subsidiary of Formosa Prosonic (fundamental: 1.95; valuation: 2.0). The group is expected to net a one-off gain of approximately RM8.725 million from the disposal.

“The proposed disposal will help to avoid any costs associated with the closure of the China operations in the event that it is no longer viable to keep the overseas operations.

“As such, the proposed disposal will avoid disruption costs such as employee termination or staff layoff costs or stock write-offs, amongst others arising from the closure of FPG,” it said.

According to its filing, it has spent approximately RM19 million for the initial subscription and acquisition of shares in FP Group.

Winmax intends to distribute the proceeds of the sale in the form of dividends to Formosa Prosonic, amounting to RM32.74 million.

It expects to complete the disposal in the third quarter of 2015.

CIMB Group Holdings Bhd ( Financial Dashboard)'s 97.94%-owned Indonesian unit PT Bank CIMB Niaga Tbk posted a lower net profit for the six months ended June 30, 2015 (1HFY15).

CIMB (fundamental: 1.05; valuation: 2.25) told Bursa Malaysia today that CIMB Niaga's net profit for the period dipped 90.98% to Rp176 billion or Rp7.02 per share from Rp1.95 trillion or Rp77.70 per share a year ago due to the high level of provisions predominantly from the coal and coal-related sector.

"The softer 1HFY15 results were attributed to the economic slowdown coupled with a challenging business environment," the banking said in a statement today.

However, its consolidated operating income for 1HFY15 grew 1.5% year-on-year to Rp6.73 trillion.

Going forward, CIMB Niaga said it will continue to offer innovative banking products and services to cater to requirements of the general public and businesses.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)