Friday, July 31, 2009

GLOMAC ... July 09

GLOMAC registered Net Profit of RM7.2m for 4QE Apr 30, 2009 - a 66.5% increase from RM4.3m in the corresponding quarter of last year.

The jump in quarterly earnings was due mainly to recognition of revenue from the sale of 'Glomac Tower' and the fair value gain for 'Wisma Glomac 3'.

Revenue for the last financial quarter rose 38.7% to RM99.8m from RM72m a year earlier.

However, for the 12-month period, Net Profit slipped 8.12% to RM32.2m from RM35.1m, due to the additional provision for Impairment Loss in a sub bond set off by the effect of the recognition of Fair Value Gain for Wisma Glomac 3.

Revenue was 8.4% higher at RM351.5m from RM324.3m previously.

GLOMAC proposed a Final Dividend of 3.5 sen per share less tax, bringing total Gross Dividend for the year to six sen, versus five sen in FY08.

Based on the ongoing development projects and the level of work targeted to be completed, the Group's performance for the FYE Apr 30, 2010 would remain satisfactory, GLOMAC said in an EXCHANGE filing on Jun 24, 2009.

WCT Bhd ... July 09

It is poised to clinch more public sector jobs after it secured four contracts totalling RM766.48 million for infrastructure works in Medini (Node 1) of Iskandar Malaysia.

These potential jobs include RM100 million to RM200 million additional works for the Kota Kinabalu International Airport, the RM2 billion new low-cost carrier terminal (LCCT) which should be up for tender soon, RM1 billion to RM2 billion Sabah water infrastructure project, additional works for the new Doha International Airport (NDIA) and the RM7 billion to RM10 billion Klang Valley LRT upgrade.

The Iskandar Malaysia award suggested that the government was awarding projects based on merit. This levelled the playing field and would work to WCT’s advantage.

The group has a good chance of clinching more public sector jobs as it has a track record of winning jobs by virtue of being one of the lowest cost and most efficient contractors in Malaysia.

WCT is touted as one of the main winners of the Klang Valley LRT upgrade/extension, a priority mega project scheduled for rollout in 2H09. Tenders are expected to be called in 4Q09.

With the new contracts, WCT’s outstanding order book rose 35% to RM2.9 billion, surpassing WCT’s guidance of RM1 billion of new contracts by year-end (2009).

The jobs awarded to WCT were the second sizeable infrastructure project to be awarded after the award of the tunnelling portion of Interstate Water Transfer Scheme earlier, which reaffirmed that pump-priming in the country was well underway.

With this LOA, WCT is the third local contractor after Loh & Loh and Salcon to be awarded a contract for infrastructure works in Medini this year (2009). It is also the biggest beneficiary of infrastructure projects in Iskandar to date. The RM767 million total project cost represents the biggest package to be dished out to a single contractor in Iskandar. It is also the largest public sector job to be awarded to a local contractor since November 2008.

WCT was currently holding two letters of intent (LOI) for infrastructure works in Sabah worth about RM500 million. They have also proposed another project in Sabah estimated to be worth RM1 billion.

WCT was in a good position to secure work from the proposed new LCCT terminal and also from NDIA. To recap, WCT had received additional works from NDIA worth RM300 million earlier 2009.

WCT intends to execute this recent contract swiftly and bid for more jobs from the same client by using its track record.

WCT is also seeing encouraging signs of a re-acceleration in Middle East job flows — as crude oil prices are hovering above US$60 (RM214.20) per barrel. With the Abu Dhabi F1 project on track to be completed by next month (Aug 2009), it is eyeing more repeat jobs within the massive US$40 billion Yas Island development.

Thursday, July 30, 2009

UM LAND ... July 09

UNITED MALAYAN LAND is reassessing its strategies to mitigate the impact of the global and domestic conomic slowdown. In an EXCHANGE filing Jun 24, 2009, UM LAND Group CEO - ANTHONY YAP said said financial year 2008 had been challenging for the Group.

" .... A combination of low consumer sentiment, economic slowdown and volatile market conditions coupled with a rise in the costs of doing business had affected the Group's overall performance ...." he said.

He said the Group was focusing on its programme to dispose of certain non-core development land in the townships to strategic partners. " .... This strategy will also contribute to the Group's profits, cash flow and enhance the values of the townships' existing development land bank .... The exercise has started at Bandar Seri Alam in Johor which is emerging as a major educational hub with the recent disposal of land parcels to institutions such as MARA COLLEGE, UNIVERSITI KL and UNIVERSITI TEKNOLOGI MARA ...." he said.

YAP added that these institutions of higher learning, together with the presence of 'Regency Medical Centre', Eastern District Police Headquarters and TESCO hypermarket, would have a positive spin-off on the township. He said leasing activities at the township were being expanded to include completed stock.

" .... To date a total of 324 residential units and medium low-cost shophouses have been tenanted in addition to land leases to TESCO, MCDONALD's and TODAY's MARKET ...." he said.

YAP said the Company would also continue to take proactive steps, such as reviewing existing products, revising the launching schedules of new products and downsizing new products. " .... The steps are to ensure sustainability and growth of the Group in order to remain resilient in the face of the challenges ahead ...." he said.

UM LAND's Revenue declined to RM172.1m in for FYE 2008 from RM396.8m recorded in the previous financial year.

Kossan ... July 09

Its earnings for year ending Dec 31 2009 would be checked by foreign exchange hedging forex losses amounting to as much as RM35 million.

This follows a Rm12 million realized forex loss from hedging activities recorded in 1QFY2009, when management hedged receivables at an estimated exchange rate of US$3.40 to US$3.55 in anticipation of a weaker dollar Instead the dollar had strengthened against the ringgit.

Its management had warned of a further forex losses of between RM8 million and Rm9 million in its upcoming 2QFY2009 results.

It is understood that forex losses could be potentially larger than the realized amount in the next few quarters. The forex losses were realized in 4QFY2008 and 1QFY2009.

In spite of forex losses, Kossan reported a flattish net profit of Rm14.5 million in 1QFY2009 from RM14.02 million recorded a year earlier.
It is understood that the company has not entered into any hedging contracts in 2009 and is not expected to incur hedging lossesd in FY2010.

It is normal in the industry to hedge a certain portion of receivables. As the purchase of raw materials, such as latex, and the sale of the finished rubber products are made in US dollars, there is a natural hedge of around 60% to 70%.

It depends on how the company goes about hedging, and what financial instruments are used. Unfortunately, Kossan seems to have exercised poor judgement on this.

The management had not revealed the forex losses at an earlier stage as the hedging is an off balance sheet item. Now that management has a clearer picture of the losses expected.

Wednesday, July 29, 2009

Kim Loong Resources Bhd ... July 09

With cash reserves of about RM70 million, Kim Loong Resources Bhd is in good position to acquire more land.

It has plans to expand its landbank and we hope something will come out soon. With a total landbank of 32,000 acres, the company was looking at areas in Southern Johor, Sabah and Sarawak for its land acquisition. However no fixed allocation had been set for the acquisition which would be funded through cash and borrowings.

The company's plantations were mostly also matured and generating income and would help fund the development of new plantations.

The company will be also launching its new health supplement product namely E-LifeGold by next year. E-LifeGold is a tocotrienol-based product, which is a natural form of Vitamin E extracted from the fruits of oil palm.

KIM LOONG ... Apr 09
Kim Loong Resources Bhd ... Mar 09

KNM ... July 09


Oil and gas (O&G) services provider KNM GROUP expects its earnings for 2009 to be 'comparable to last year (2008)', underpinned by the recovery in oil prices and as the Group engages in higher value added products and services.

Group MD - LEE SWEE ENG said Jun 24, 2009 that KNM was also pushing ahead with its three-pronged business model, which entailed moving up the value chain, seeking new markets and exploring new industries in the O&G sector.

" .... We are moving up the value chain, with the high-end products in our line-up at 55%, due to less competition in that category which in turn reduces the stress on margins ...." said LEE after the shareholders' meeting.

For FYE Dec 2008, the Company registered Net Profit of RM336.2m - up from RM186.4m in 2007. Crude oil fell to a low of USD32 (RM112.96) in Dec 2008, off the peak of USD147 in Jun 2008.

LEE said the Group planned to move up the value chain via joint ventures, strategic alliances or mergers and acquisitions, depending on the size of the candidates. " .... There will be some pressure on margins in view of the market situation. But with 55% of our products on the high end, the impact on our margin may not be so severe compared to three or four years ago where we produced more low- and medium-end products ...." he said.

LEE also said that " .... the group is seeing a pickup in demand due to current oil prices hovering near the USD70 per barrel mark ....". KNM is seeing demand picking up in three areas, namely Australia, Brazil and the Middle East, with a higher demand for liquefied natural gas (LNG) in Australia, deepwater oil exploration in Brazil and O&G in the Middle East.

The Group had tendered for RM18 bil worth of work and expected the conversion to be sizeable. " .... Most of the bids that we put in one year ago were recycled back from when the price of oil fell to USD32 per barrel. Over the past three months, since the oil price has been going up, customers are returning to restart discussions ...." LEE said.

The Group had RM525m in cash as of Mar 31, a portion of which KNM used to pay off the first instalment of a loan from MALAYAN BANKING to acquire German engineering group BORSIG. However, its loans and borrowings were RM684.2M. " .... Our gearing ratio is at around 0.5 times, so we are financially very healthy ...." he said.

LEE said KNM began consolidating operations with BORSIG and plans were under way to duplicate some BORSIG products which were not manufactured here. " .... We are also looking at realising the synergy between our plants in Malaysia and Brazil, where there is a big demand, which we are now prioritising to move our high-end products ...." he said.

When asked by reporters on why the Company's shares were still actively traded despite the sharp fall in share prices from 2008, LEE replied that " .... We had a lot of retail investors and fund managers back then when we were the darling of the industry. Our shareholding numbers increased from about 10,000 to about 40,000 .... We have strong fundamentals and no issues. Our share prices were beaten by the market because of exit of foreign funds, affecting the Company's share price ...." he added. KNM's current foreign shareholding numbers stand at almost 30%, down from over 40% at its peak. KNM has strong interest from both retail and institutional shareholdings which are interested in its liquidity, LEE said.

Tuesday, July 28, 2009

Gamuda/KPS ... July 09

Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH) had accepted the revised offer from the Selangor Government for its water-related assets and operations. Kumpulan Perangsang Selangor Bhd, which owns 30% of SPLASH said that SPLASH was accepting the offer subject to several conditions.

The two companies would remain as the operations and maintenance (O&M) operators of Sungai Selangor Water Supply Scheme Phase 1 (SSP1) and Sungai Selangor Water Supply Scheme Phase 3 (SSP3) respectively upon the same terms and conditions as those signed between SPLASH and the operators in January 2000.

The offer price of RM2.97 billion was an estimate and would be finalised or adjusted upon completion of a due diligence exercise by the state government.

Talam ... July 09

Talam Corp Bhd, which had completed its financial regularisation plan, hopes to emerge from the Practice Note 17 status soon.

All financial instruments, which were part of its regularisation plan, had been issued. It will now submit the application to Bursa Malaysia for the uplifting the PN17 status. From the feedback they have from its meeting with Bursa's representative, they are quite confident it will be successful.

As part of the revamp, the company had issued redeeemable convertible preference shares 2009/2014. The additional 60.13 million new shares arising from the conversion of the preference shares were listed on July 23 2009.
Other divestment plans to pare down the company borrowings, such as disposal of properties and land are ongoing. Talam is looking at disposing more than 3,000 acres of land, from its current total land bank of around 7,000 acres. The majority land to be disposed will be from the company's Bandar Bukit Beruntung developement.

After the completion of asset and land disposals, the company will have almost no gearing, and can start anew. Talam has around RM700 million in total borrowings, including outstanding irredeemable convertible unsecured loan stocks of more than RM300 million.

Talam will now focus on completing its outstanding projects, and aims to achieve at least 95% completion rate by the end of the year (2009).

There will be no new property launches by Talam this year (2009), but will start some of the joint venture projects such as Sierra Ukay, Sierra Selayang and Ukay Perdana next year. These projects have a combined gross development value of more than RM1.4 billion.

Monday, July 27, 2009

AXIS REIT ... July 09

Axis REIT has proposed to acquire an industrial complex Axis Steel Centre in Klang from Maximum Icon Sdn Bhd (MISB) for RM65 million cash.

The purchase of the complex, comprising warehouses and office building/spaces on 66,450 sq m of land, met with its investment objectives and growth strategy.
MISB is related to certain directors of the manager and Baiduri Kemas Sdn Bhd, a major unit holder of Axis-REIT.

The properties had been valued an independent firm of registered valuers and that the purchase consideration of RM65 million was at a discount of 13.33% to Axis Steel Centre’s market value of RM75 million.

Axis REIT also proposed to increase its fund size, after its earlier mandate expired on Dec 31, 2008.

Separately, Axis REIT announced on July 20 a net profit of RM12.54 million for its second quarter ended June 30, 2009, up 31% from RM9.59 million the previous corresponding quarter.

Maxis ... July 09

T. Ananda Krishnan may merge one of his companies with his phone group, Maxis Communications Bhd.

Sources say it could be listed on Bursa as early as year end (2009) without its loss making overseas operations.

The funds raised from floating Maxis Malaysia will be used by its owners to expand their business in India and Indonesia. The current thinking is to float MAXIS with little or no debt in its books. Maxis has two tranches of AAA-rated Rm500 million medium term notes expiring in 2014 and 2037 respectively.

Prime Minister Datuk Seri Najib Tun Razak said he wants Maxis, which Ananda has held privately since 2007, to re-list on the local exchange. Such a high-level recommendation means billionaire Ananda, ranked as Malaysia’s second-richest person, is more likely to bring Maxis back to the market, possibly by merging the business with another of his listed units.

If it comes from the number one person in Malaysia, that puts pressure on Ananda. It strengthens the possibility of Ananda doing something with his companies. If you look at the operational synergies between Maxis and Astro, it’s possible. Astro has the content, Maxis is the conduit.

Maxis, 25 per cent-owned by Saudi Telecom Co, is assessing “very seriously” the suggestion to re-list. The return of the mobile-phone operator, which had a market value of RM40 billion (US$11 billion) before it was bought out, would attract capital to Malaysia and increase trading on the local exchange.

Maxis chief executive officer Sandip Das wasn’t available to comment.

Najib had discussed the Maxis initial public offering (IPO) proposal with King Abdullah Abdulaziz Al Saud as Saudi Telecom Co, which owns 25 per cent of Maxis, is a government-linked firm.

The potential listing is expected to boost the profile of the Malaysia-Saudi partnership while enlarging the size of the local stock market. A large and global IPO like Maxis can also help profile Malaysia to international investors.

According to speculation that surfaced in June 2009, Ananda might use Astro or Measat Global Bhd, his listed satellite operator, as a vehicle to hold Maxis. That would create a so- called triple-play telecommunications company offering wireless, television and satellite services.

On July 20 2009, Astro issued a statement confirming it was reviewing options to reorganise, although chief executive officer Ralph Marshall later told reporters a merger with Maxis was not being considered.

Going Forward …

Even if they agree, some doubt it will be relisted anytime soon, because the valuation is lower than the market peak when it went private and doubt it will be the shareholders' first choice.

Perhaps there may be some-thing non-monetary, or new incentives involved such as new opportunities or markets, then the listing may happen sooner.

It will not be as straight forward or as simple as it may seem. It needs to sort out its issues in India. Its operation there needs a lot of funding. It may need to consider stripping India off and put it in a special purpose vehicle, and list Maxis on a clean sheet without India.

Of course, it can relist itself with the Indian entity, but investors won't be too happy about it. Because, after all, it had said one of the reasons it went private was not to burden investors with India's huge capital-expenditure commitment.

Assuming Maxis will be relisted without the Indian entity, would it be strong enough to attract investors?

It does not have much option. It's hard for the company to package Maxis like Axiata because that will take too many mergers and acquisitions. By focusing on the Malaysian market, it could be a good dividend story.

Maxis’s cash cow is its Malaysian operations, which is 75% controlled by Ananda Krishnan and 25% by state owned Saudi Telecom Co Ltd. Maxis Malaysia is expected to command a market cap of some rm40 billion.

Back of the envelope calc show that Maxis operations made about RM2.8 billion in pre-tax profit in FY2008. Valuing Maxis at 15 times earnings would give Maxis an EPV of Rm40 billion.

Would Rm40 billion be enough, considering Maxis’ market cap stood at about Rm39 billion when it was privatised? When comparing the value of the privatized Maxis and the Maxis will soon be listed, one has to remember the value can be realised from the overseas operations at a later date.

Selling a 25% stake in Maxis’ Malaysia operations could raise Rm10 billion upfront cash for its promoters, part of which would go towards repaying debt papers that Binariang GSM Sdn Bhd issued to fund Maxis’ privatization I n2007. The latter has rm804 million in debt obligations due in 2010.

As it is, Binariang GSM’s balance sheet is constrained, with debt levels expected to increase to around Rm25 billion by 2010 from around RM21.35 billion as at end 2008. For FY2008, Binariang GSM’s net profit grew 9.4% y-o-y to RM757 million on the back of 113% revenue growth to RM10.51 billion.

Binariang GSM, which owns 100% of MAXIS, also owns 44% of NTS. STC owns 51% of Indonesian NTS directly, with the Indonesian partner holding the remaining 5%.

Binariang GSM had indicated that it may implemented restructuring that would enable Aircel Ltd to be independently funded. An additional US$1.5 billion cash could soon be unlocked by Aircel, Maxis’ 74% owned Indian subsidiary, to help cover the US$5 billion that its owners intend to spend on expansion in India over the next the three years. Aircel had reportedly set July 24 2009 as the deadline for interested parties to bid for its 12000 telecommunications towers.

The rating agency notes that Maxis will find it a challenge to defend its 50% market share of the country’s post paid subscriber based, with its share of the pie slipping to 46.6% in 2008 from 49% in 2007, even as rivals Celcom and Digi move more aggressively into the segment.

Nonetheless, Maxis was still generating strong cash flow. Capex expenditure was less than Rm1 billion in FY2008. Maxis has budgeted Rm5 billion capex for its Malaysian operations over the next four years, more than half of which is slated for 3G infra and broadband.

RAM recently lifted its rating watch on Binariang GSM’s debt papers after the latter provided a formal commitment measures and balance sheet at levels commensurate with the Islamic paper’s ratings.

MAXIS/Astro/Measat ... Jun 09

Sunday, July 26, 2009

Saturday, July 25, 2009





Friday, July 24, 2009

SapInd ... July 09

It is in talks with various local and foreign parties to enhance its product and processing technology. This is to enable the company to grow its business at a faster rate when the economy recovers.

The company planned to upgrade its existing manufacturing processes capability to address market needs while increasing competitiveness.

The company posted a lower pre-tax profit of RM520,000 for the first quarter ended April 30, 2009 compared to a pre-tax profit of RM3.45 million in the same quarter last year. Its revenue rose to RM52.33 million from RM52.14 million previously.

Sapura Industrial has at present five plants, three in Bangi and one in Port Kelang,Selangor and another in Gurun, Kedah.

Thursday, July 23, 2009

WAH SEONG ... July 09


WAH SEONG CORPORATION is scouting for possible acquisitions in 2H-CY2009 to beef up its O&G operations and to make further inroads overseas.

WSC MD & Group CEO - CHAN CHEU LEONG said on Jun 19, 2009 that these measures were necessary to strengthen its global presence for O&G and industrial services operations.

WSC's current Order Book was RM1.36 bil, of which 76% was from the O&G division. It was bidding for both local and overseas O&G projects, including major pipe coating projects in the Australasia region, he said after the Company AGM on Jun 18, 2009.

On WSC's gas compressor operations, CHAN said the business is on track for growth following high demand for natural gas from the market as it is an environmentally friendly source of energy. " .... Although our core O&G activity is pipe-coating, the gas compressor operation provides recurring cash flow to the Group, and is a resilient business with strong fundamentals .... As such, we plan to further grow the rental side of the gas compressor business and in fact, we have invested more than RM150m in building up our rental fleet over the past few years ...." he added.

The Company was tendering for gas compressors rental contracts in the Middle East and Asia Pacific. Currently the division has 74,000 HP in its fleet with a utilisation rate of 85% and the Company's long term plan is to increase its rental fleet HP by between 10% and 15% each year.

On investments in O&G, CHAN said the Company would focus on research and development (R&D) to strengthen its pipe coating operations. This included recent investments in specialised concrete-coating process technology in Europe , introduction of new products and solutions for deepwater coating and other new variants of anti-corrosion coatings.

On the Industrial Services Division (ISD), CHAN said the Company would benefit from infrastructure and other stimulus projects in Malaysia and abroad.

On the division's spiral steel pipe manufacturing business, he said there were plans to penetrate the huge Australian water pipes market by the first half of 2010. Now, WSC was only supplying piling pipes.

" .... The Company's pipe manufacturing operations is also set to benefit on the home front and in Singapore as there is currently about RM400m worth of piling pipes that will be tendered out in the next six months ...." said CHAN.

CHAN added that the Company's plant in Seberang Prai, Penang recently had another production line which would enable it to manufacture 100,000 tonnes of pipes per annum, from 60,000 tonnes currently.


HTpadu ... July 09

It is set to enter the Middle Eastern market with its anticipated appointment as technology partner by an Abu Dhabi government-linked company.

Negotiations with the Abu Dhabi company were in the final stages. What remained to be resolved were operational issues, before their equity participation in a proposed joint venture was firmed up.

Together with its partner, the company will pursue e-government initiatives in the kingdom.

It will explore opportunities to replicate the e-government management experience they have in Malaysia. They are very much involved in population management initiatives, road transport and immigration services, among others in Malaysia.

Going Forward …

It will replicate its existing business model in other countries, adding that it already had established some of its services in Sri Lanka and Indonesia.

The company already has a disaster recovery centre operational in Colombo and is setting up another in Jakarta. The company was also exploring population management initiatives in Sri Lanka, as the country did not have an advanced identification system as that in Malaysia.

They are also focusing on business continuity management (BCM) that seeks to mitigate the impact on organisations when they are hit by a disaster or other emergencies, so that there is a contigency plan to ensure their operation proceeds seamlessly.

For the financial year ended Dec 31, 2008, about 69% of its revenue came from the public sector, recurring revenue was over 70%.

For the first quarter ended March 31, 2009, HeiTech posted a net profit of RM1.06 million on the back of RM87.84 million revenue.

Wednesday, July 22, 2009

HAI-O ... July 09

HAI-O ENTERPRISE is maintaining its Dividend Payout policy of at least 50% of its Net Profit for FYE Apr 30, 2009 (FY09) due to strong growth in revenue.

Group MD - TAN KAI HEE said the Group would keep its promise to shareholders on dividend policy despite the challenging economic environment. " .... To maintain our dividend payout policy is not easy at times like these. However, the current economic crisis has presented a unique opportunity for us, as more people, especially those without employment or wanting to have side income are turning to multi-level marketing (MLM), which in turn, gives us strong revenue ...." he said to THE EDGE FINANCIAL DAILY in an interview reported on Jun 22, 2009.

The Group has a cash position of approximately RM50m giving it an opportunity to look out for new business ventures. " .... Given that the entry cost for new ventures is now lower, it is a good opportunity to start looking around ...." he said, adding that HAI-O preferred to look at new ventures related to its core businesses.

HAI-O is starting its multi-level marketing businesses in Indonesia in Jul 2009, via its Jakarta-based 60%-owned - PT HAI-O. ".... We are targeting 5,000 new members for the first year of operations, which is a conservative number, based on the huge population of Jakarta ...." HEW said, adding that the main products targeted at the Indonesian market would be its water filter system and lingerie.

TAN said that given the majority of HAI-O's local distributors were Malays, with some having connections in Indonesia, the market would be easier to penetrate. " .... Indonesia is a good starting point for us. If we are successful there, then we will start looking at establishing our presence in other countries regionally ...." he said.

TAN said China would be the next market after Indonesia that HAI-O was eyeing, possibly within the next two to three years. " .... We already have good businesses in Malaysia, but we know that we cannot contain our businesses locally only. We can say that we are now ready to prepare ourselves for regional expansion ...." he said.

TAN said HAI-O might begin its expansion plans to China with retail outlets in certain parts of the country, but its products would be marketed via single-level marketing, as multi-level marketing activities were not allowed in the country.

He added that, nevertheless, opening retail outlets would enable HAI-O to market more Malaysian-made products into China. " .... We have the advantage of networks with Chinese businessmen and companies, and there is great potential collaborating with some of them .... But, we want to be sure of gaining a foothold there first before we decide to venture into China fully. It will be a slow but steady process ...." TAN said, adding that the Group would still focus on its local businesses first.

HEW said HAI-O would spend between RM2m and RM3m in 2009 to open up to five retail outlets in Malaysia.

Kannaltec ... July 09

It is suspending the subscription agreement between it and the Selangor government to operate and maintain the latter’s broadband infrastructure (SelNet) due to the non-resolution of issues arising from the agreement.

The agreement was suspended effective July 10 2009 until further notice after having exhausted all efforts to resolve the issues.

This could cause disruption to the state’s operations and services to the public.

Kannaltec’s subsidiary Obnet Sdn Bhd had been awarded a 20-year concession in 2003 by the Selangor government to operate and maintain the broadband infrastructure for its 345 state agencies.

Kannaltex Bhd ... Jun 09

Tuesday, July 21, 2009


MUHIBBAH ENGINEERING is bidding for about RM3 bil in projects, both locally and overseas, as it seeks to increase current Book Order of RM4 bil. MD - MAC NGAN BOON said on Jun 22, 2009 that the RM3 bil worth of projects it was eyeing were in the construction sector. " .... It's a mix of both local and overseas jobs. It's hard to say if we will successfully get the jobs, because the environment is far more competitive nowadays .... In good times, we pick up RM1.5 bil out of RM6 bil to RM8 bil tendered. In bad times, we may tender RM3 bil and pick up RM100 million so it's hard to say about the success rate ...." he said after the shareholders on Jun 21, 2009.

" .... With the completion of our L&G marine facility project in Yemen, we are definitely on the radars of major oil companies, their refineries and major oil complexes that are coming up around the world ...." MAC said, adding that " .... more companies were seeking out MUHIBBAH for similar projects following the successful completion of the Yemen project ....".

He also said that the current Order Book of RM4 bil comprised of construction, shipyard and cranes projects for local and international markets.

Of the RM4 bil, the construction order book was about RM2.6 bil and the remaining comprised of a shipyard and cranes at RM820m and RM620m respectively.

Of MUHIBBAH's income of RM381.1m for 1QE Mar 31, 2009, MAC said that 55% was earned locally and the rest from overseas projects. " .... Prior to the economic crisis, our Order Book was 60% foreign and 40% local ...." he said, adding the percentage of jobs was around 40% from local companies and 60% international.

As for 2008, he said it was very difficult as the Group had to contend with high raw and construction materials and scarce plant and equipment for some heavy engineering work until the time of the crisis. ".... Going forward, we see a reversal and this has somewhat helped us in terms of ongoing jobs, and in a way mitigated our rising prices and costs ...." he said.

Muhibbah Engineering Bhd ... July 09

UEM Land ... July 09

Sources say it plans to issue some RM550 million in convertible bonds to raise funds that will be used mainly to speed up the development in Bandar Nusajaya in Iskandar Malaysia.

It is learnt that because of the economic slowdown and credit crunch, sales have been slower that expected and this has affected cash flow. UEM Land does not have the cash in hand and so is looking at the bond market to continue building up infra.

AS at March 20009, UEM Land recorded a deficit in its operating cash flow, amounting to Rm17.11 million.

The conversion price of the convertible bonds is not known yet but UEM Land is essentially a play on the value of its main asset, which is the 9654 acres of land it has in Bandar Nusajaya that forms the main part of Iskandar Malaysia.

At the current price of Rm1.60 per share, it translates to about RM13 per sq ft. But then the strike price for the convertible papers, expected to have a tenure of five years, is anticipated to be much higher. This is based on the assumption that the land price in Bandar Nusajaya will increase significantly over then next few years, considering the massive development taking place there.

For every change in the land price, it will add about 12 sen to the revalued net asset value of UEM Land. So if the assumption is that the average land price is RM20 psf, the strike price could go up to Rm2.50.

Apart from slow sales that affected cash flow, UEM Land ahs also seen a pull out from one of its partners undertaking a portion of the project in the flagship Puteri Harbour development. In June 2009, Damac Properties pulled out of the project.

Apart from Damac, UEM Land is undertaking a few project with a few others, such as UM Land and Limitless holdings Pte Ltd. Limitless has so far injected its share of capital for the development of Puteri Harbour and its unlikely to pull out.

While the Puteri Harbour project is among the most pretigious for UEM Land in Iskandar Malaysia, the company is undertaking seven other developments in Bandar Nusajaya.

UEM Land is supposed to undertake the third phase with its own financing after which the company will lease out the buildings to the federal government on a long term basis.

Its long term liabilities are RM602 million, out of which a large chunk is believed to be due to Khazanah in 2013.

UEM Land ... Nov 2008
UEM Land ... Jan 2009
UEM Land ... Feb 2009
MRCB/UEM Land ... May 09
UEM Land Holdings Bhd ... Jun 09

Monday, July 20, 2009

YTL CORP ... July 09

YTL CORP will take up 75% of the total rights units to be issued by Starhill GLOBAL REAL ESTATE INVESTMENT TRUST under its proposed one-for-one basis.

The Company said Jun 22, 2009 that the rights issue would be at SGD0.35 a unit. As at Jun 22, 2009, the Company owned 26.6% of STARHILL GLOBAL REIT.

STARHILL GLOBAL REIT is an externally managed real estate investment trust established in Singapore as a collective investment scheme. It was listed on the Main Board of the SGX-ST on Sep 20, 2005. As at Jun 18, 2009 STARHILL GLOBAL REIT had a total of 963.7m units in issue.

STARHILL GLOBAL REIT has a diverse portfolio of real estate and real estate assets with the prime objective of delivering regular and stable distributions and to achieve long term growth in the net asset value per unit.

YTL CORP had entered into a sub-underwriting agreement with DBS BANK ltd, MERRILL LYNCH SINGAPORE pl and CREDIT SUISSE SINGAPORE ltd in relation to the issue of 963.7m STARHIL GLOBAL REIT rights shares.

YTL CORP said that the subscription was is in line with YTL CORP's commitment to support STARHILL GLOBAL REIT by facilitating the underwriting of the Rights Issue by the joint lead managers and underwriters.

The Rights Issue would also provide YTL CORP the opportunity to acquire rights units at a discount of approximately 45.3% to the closing market price on Jun 19, 2009 of SGD0.64 per unit.

YTL Corp Bhd/Starhill Global REIT ... July 09
YTL ... Jan 2009
YTL Corp Bhd ... Nov 2008

Astro ... July 09

Sources say in a major restructuring exercise, it is hiving off its 20% owned Indian associate Sun Direct TV and returning some cash to shareholders.

The exercise will effectively result in Astro being solely an operator with local operations while the still loss making overseas unit will be acquired by major shareholders Usaha Tegas Sdn Bhd and Khazanah Nasional Bhd.

There is also speculation about plans to free up more cash as Astro, with some observers suggesting a lucrative 80 sen per share payout to get shareholders to agree to the corporate proposal.

Astro had Rm1.5 billion cash or 60 sen per share as at end April 2009, but it is in a net debt position of Rm362 million due to the drawdown of a US$186 million (Rm690 million) debt facility to finance its investment in India. If the debt from its Indian investment were to be taken out, Astro would be in a net cash position, but it would still be nowhere near the speculated 80 sen a share.

There is also unconfirmed talk of Astro hiving off its stake in Sun Direct TV in preparation for a merger with Maxis Communications Bhd’s Indian unit Aircel Ltd, currently Indian’s seventh largest mobile operator by subscriber base.

So far, one version of rumours about Ananda Krishnan mulling a major corporate exercise involving AStro has been officially denied.

Rumours aside, the fact is that Astro again has positive free cash flow, which is likely to grow together with its Malaysian business, now that there are no longer any material write offs from its discounted Indonesian venture.

Moreover, some RM454 million or two thirds of the US$186 million investment Astro intends to put into its 20% owned Indian associate Sun Direct TV had been spent as at end April 2009.

Astro’s free cash flow, which dipped into the red from 4Q2008 turned positive again in 4Q2009 at Rm44 million. The level of free cash flow is seen as an indicator of a company’s ability to return cash to shareholders. Its free cash flow level more than doubled to Rm103 million in 1Q2009.

Management recently said that it has no plans to re enter Indonesia and only expects to incur some RM4 million cost per quarter due to the ongoing legal cases there that arose from its decision to exit in Aug 2008.

At present, Astro pays out 50% of the next profit from its Malaysian operations as dividends to shareholders.

Management had said previously that it may consider floating Sun Direct TV once its cash flow turns positive sometime in 2013.

Expectations are that should there be a deal, it would be one that is positive for minorities given that any offer would require the approval of Khazanah Nasional and the EPF. Khazanah owns 21.4% while the EPF owns 7.37% as at May 29. Ananda controls 42.35% of Astro.

MAXIS/Astro/Measat ... Jun 09

ASTRO ... Oct 08

Sunday, July 19, 2009







Saturday, July 18, 2009






Friday, July 17, 2009

LHIB ... July 09

Furniture manufacturer is going upstream this year with its own rubber tree plantation to ensure a constant supply of rubber wood.

The Johor government had approved some 3237.48ha in the Endau-Rompin area for the company to plant rubber trees. They are still finalising the cost of planting rubber trees on the land and initially will start with 121.40ha.

It would probably take a few years before the company could harvest the rubber wood from the estate as the raw material for its furniture.

By having its own rubber tree plantation, the company could lessen its dependency on getting rubber wood from other suppliers. The plantation would be undertaken by the company’s subsidiary Lii Hen Plantation Sdn Bhd, which was involved in planting, cultivating, milling and dealing in agriculture products particularly rubber trees and other kinds of wood.
The company would focus on the mid-range furniture as the demand was better compared with the high-end segment for the US market.

Apart from the United States, the company’s exports were also to countries in the Middle East. While most of the American consumers went for bedroom sets, Middle Eastern consumers preferred audio visual cabinet sets and computer tables.

For the financial year ended Dec 31, 2008, the company recorded RM5.32mil net profit on RM173.18mil revenue against RM1.18mil and RM150.28mil respectively for FY2007.

Bjtoto ... July 09

BLand has raised RM190 million after placing out 40 million shares in Berjaya Sports Toto Bhd (BToto). The shares, representing a 3.18% stake in BToto, were placed out at RM4.75 per share.

The placement price was a discount of 30 sen or 5.94% over the weighted average market price of BToto shares for the past three days ended July 6 2009 of RM5.05 per BToto share.

The placement price was at a price-earnings multiple of 14.53 times based on the unaudited earnings per share of the BToto group of 32.68 sen for FY ended April 30, 2009.

The corporate exercise reduced the BLand group’s total stake in BToto by 3.18% to 47.48%. The Berjaya Corporation Bhd Group together with the B-Land Group now own about 48.17% of BToto.

The entire 40 million BToto shares pursuant to the placement were acquired by BLand since 1992 with a total carrying value of about RM37 million in the books of BLand.
The net cash proceeds from the placement would be used by BLand to partially redeem its RM848.10 million 8% secured exchangeable bonds due in 2011. Under the trust deed dated Aug 8, 2006 on the bonds issuance, BLand would, at the option of any bond holder, redeem such bonds on Aug 15, 2009 at a price equal to 100% of its nominal amount. The balance of the proceeds, if any, will be utilised for working capital purposes of the BLand group.

Tan Sri Vincent Tan Chee Yioun, a major shareholder of BLand, has a direct 70.10 million BToto shares or 5.58% in BToto before the placement. He is also deemed interested in 15.10 million BToto Shares or about 1.20% in BToto held by certain subsidiaries of Berjaya Corporation Bhd and other private companies.

Tan had also concurrently with the placement, placed out a total of 15.60 million BToto Shares to placees procured by placement agent.

Thursday, July 16, 2009

UMW ... July 09

UMW Holdings Bhd subsidiary’s US$170 million (RM565.51 million) contract to provide a drilling rig to PCPP Operating Company Sdn Bhd (PCPP), off Sarawak has been terminated. It was notified the contract would not be implemented by PCPP, which comprised of Petronas Carigali (Malaysia), Petrovietnam (Vietnam) and Pertamina (Indonesia).

PCPP had in August 2008 awarded the contract to UMW’s 85%-owned UMW Standard Drilling Sdn Bhd to provide the jack-up drilling rig for PCPP’s Block SK 305 exploration and development drilling programmes.

The contract would have been initially for three years, with an option to extend the period for an additional three years. It was expected to have started on Dec 1, last year.

However, under the new scope of works being drawn up under new contracts for drilling activities, UMW is in discussions and negotiations with other PSC operators in Malaysia” to provide the rig services and to be in operation by September this year (2009).

Wednesday, July 15, 2009

Pharmaniaga ... July 09

It aims to aggressively expand its market overseas, especially in the South-East Asian region, in the next three to five years to grow the business.

The pharmaceutical market in Malaysia is valued at about RM3.5bil, of which RM1.3bil to RM1.5bil is derived from the government sector.

The ratio for patented versus generic pharmaceutical products is 70:30. Pharmaniaga had a 15% share of the local generic pharmaceutical market last year (2008).

The pharmaceutical group currently exports to 30 countries but only about 12 to 15 countries are active with orders every six months. Exports contributed only about 1% to group revenue of RM1.3bil for the financial year ended Dec 31 (FY08).

Pharmaniaga has started the ball rolling on its overseas expansion plans. It already has one foot in Indonesia via its 55% subsidiary, distribution company PT Millennium Pharmacon International Tbk, and a sales and marketing office in Vietnam, which will be a platform for it to penetrate the Indochina market.

Pharmaniaga also plans to tap specific developed markets, such as the United States and Europe, via its new RM110mil manufacturing plant in Puchong, Selangor. The plant, which is not operational yet, will focus on small volume injectable products and should obtain certification for good manufacturing practice by the first quarter of 2010. However, the Puchong plant will initially cater to the local market as Pharmaniaga has already secured a contract of less than RM10mil from the Government.

The group’s other plant in Bangi will focus on solid dosage form products, such as tablets and capsules, and currently manufactures about 58 active (regularly produced) products.

On its concession agreement expiring Nov 30 2009, Pharmaniaga was currently in talks with the Health Ministry and was confident of securing the concession again as “we have met the overall requirements set by the Government.”

The group holds a 15-year concession to supply and distribute pharmaceutical and medical products to hospitals and medical institutions under the ministry. Currently, Pharmaniaga only manufactures 6% or 37 of the 570 products under the approved product price list under the concession, while the rest are procured from 83 vendors.

Pharmaniaga recorded a 21.7% drop in net profit to RM14.5mil for the first quarter ended March 31 versus the previous corresponding period while revenue was marginally higher by 1.3% at RM313.7mil.

CCM/Pharmaniaga .. July 2008

Tuesday, July 14, 2009

DUFU ... July 09


DUFU TECHNOLOGY CORP, the hard disk maker, which remained profitable for 1QE Mar 2009 despite extremely difficult external conditions says that the worst may be over.

For 1QE Mar 2009, revenue declined by 18% YOY to RM23.1m. PBT dropped 45.3% YOY to RM1.7m and Net Profit fell 57% YOY to RM1.3m. The disproportionate decline in profits versus revenue was due to lower economies of scale, causing PBT margins to fall from 10.9% to 7.3%. The profit decline was expected given the challenging conditions the Company and the HDD industry faced in the first quarter of 2009 as the global recession deepened.

The first quarter is usually a slow period for the hard disk industry coming after the Christmas season. For 2009, this was crimped further by the global recession and reduced consumer spending.

DUFU faced the challenging times with an average capacity utilisation of 50%-60% in the quarter which has since rebounded to 70%-75% in Apr-May 2009 as orders recovered strongly.

The Company had on Jan 23, 2009 completed the acquisition of FUTRON, a Hong-Kong based HDD company with operations in China, for RM20.5m cash. Of the purchase consideration, RM10m was paid in 1QE Mar 2009, another RM5m to be paid in 2QE Jun 2009 and the balance at the end of the 2009, subject to FUTRON fulfilling a profit guarantee of RM5m.

According to an INSIDERASIA analysis published on Jun 16, 2009, the worst may be over in 1QE Mar 2009. Most export-oriented industries in Malaysia only started feeling the effects of the downturn in 4QE 2008, which extended into a worse performance in 1Q-CY2009. This was also confirmed by export and GDP figures from most Asian countries, including Malaysia.

Sales are up strongly since April-May. DUFU has already seen the worst in terms of sales in 1QE MaR 2009 ? notably in Jan-Feb 2009, a fact also confirmed by rival NOTION VTEC.

DUFU's average capacity utilisation dropped to just 50%-60% in the 1Q-CY2009, but has since rebounded to 70%-75% in Apr-May 2009 as orders recovered. Sales in Apr-May 2009 rebounded as much as 50% from the lows in early 2009.

The HDD sector has been relatively resilient in the global electronics sector in the recession, with demand driven by the need for storage. However, within the industry, there are also marked differences in performance between the major players, depending on their product, pricing and inventory strategies.

Industry leader SEAGATE TECHNOLOGY has not fared well compared with second player WESTERN DIGITAL. Unfortunately, SEAGATE (directly and via Singapore-based MMI) has traditionally been DUFU's argest customer, accounting for over half its sales in previous years.

FUTRON provides a platform for longer-term growth. The FUTRON acquisition provides a platform for future expansion, at a very reasonable price. FUTRON produces HDD components, compressor and sensor components and is presently a sub-contract producer for DUFU.

Until the recent crisis, DUFU's 120,000 sq ft factory in Penang was already fully utilised. FUTRON's factory, near Guangzhou, China, has 90,000 sq ft of usable space and a much lower operating cost structure.

The timing of the acquisition although made as the global crisis was picking up speed, the purchase was made at a reasonable price ? at around FUTRON's Book Value and with a Profit Guarantee of RM5m, which can be offset against the purchase price in the event of a shortfall.

INSIDERASIA expects DUFU's revenue to fall 18% in 2009 before recovering by 10% in 2010. As a result, we expect a 37% fall in PBT to RM6.6m and a 41% decline in Net Profit to RM6mn for 2009.

INSIDERASIA added that just as profits fall disproportionately more than revenue in 2009, the same applies when revenues recover in 2010. We expect both PBT and Net Profit to rise 47% to RM9.7m and RM8.8m, respectively in 2010.

DUFU was established some 20 years ago and is experienced with economic cycles. The Company's Balance Sheet is very modestly geared. The Company has also established a longer-term production expansion plan ? at relatively lower costs ? through FUTRON to benefit from the eventual recovery.

IJM Plantations ... July 09

IJM Plantations Bhd has proposed a rights issue to raise about RM336.56 million from its shareholders to partially finance development of existing and future oil palm plantations mainly in Indonesia.

The corporate exercise would involve a renounceable rights issue of 160.26 million new rights shares with 80.13 million new warrants. This would be on the basis of two rights shares with one free warrant for every eight existing shares held at RM2.10 per rights share.

The issue price of RM2.10 per rights share was a discount of about 16.44% from the theoretical ex-rights price of IJM Plantation shares of RM2.51 based on the five-day volume weighted average market price per share up to July 7 of RM2.62.

IJMPLNT ... March 2009

Monday, July 13, 2009

Tenaga ... July 2009

The electricity tariff review scheduled for this month (July 2009) has been delayed but end-users may have to brace themselves for higher rates not too long from now, according to Energy, Green Technology and Water Minister Datuk Peter Chin.

There was a likelihood that the next electricity tariff review would involve a rate hike. The principle of it is we are moving towards market rates which his referring to natural gas prices. Much of the electricity generated in Malaysia uses natural gas subsidised by the Government.

While 60% of power generated in the country comes from gas and 30% from coal, in terms of cost, coal takes up 60% of fuel cost while gas comprises 40%.

It is known that Tenaga Nasional Bhd (TNB) submitted its proposal for a tariff review at end-April 2009 and that a decision on the matter will be made by the Government this month or next.

In the energy value chain in Malaysia, the Government subsidises the natural gas element, which constitutes more than 67% of the total electricity generation mix, while coal, which is not subsidised, represents about 25% of the total electricity generation mix.

The Government would eventually have to allow the prices of natural gas to float according to market rates, which would mean higher gas prices and inevitably lead to higher electricity rates.

In March 2009, TNB’s average electricity tariff was reduced by 3.7% following a 25% reduction in the price of natural gas (supplied to the power sector) from RM14.31 to RM10.70 per mmbtu (million British thermal units).

TNB president and CEO Datuk Seri Che Khalib Mohamad Noh was recently quoted as saying that TNB had been absorbing the additional costs and had not been passing it on to consumers even though its profits were being eroded.

Meanwhile, TNB and Sarawak Energy Bhd signed a Share Sale Agreement with Sime Darby Energy Sdn Bhd (SDESB) in relation to their acquisition of 100 per cent interest in Sime Darby Power Link Sdn Bhd (SDPLSB).

The purchase consideration was RM15.6 million plus an adjustment amount to cater for additional cash advances made by SDESB to SDPLSB being payment for consultants before the completion of the deal.

SDPLSB is a special purpose vehicle established by SDESB to undertake the development and operation of transmission facilities to supply electricity from Sarawak to Sabah and Sarawak and Peninsular Malaysia.

TNB and SEB will each hold 50 per cent of the issued and fully paid-up capital of SDPLSB, while it is also intended that the Minister of Finance Incorporated participate in the equity of SDPLSB at the appropriate juncture.

By acquiring SDPLSB, TNB and SEB will have a time factor advantage and facilitate a seamless transition for the on-going studies and regulatory approval processes initiated by SDPLSB some 12 months ago.

The acquisition of SDPLSB will allow TNB and SEB to gain access and leverage on the preliminary studies conducted on the project including the on-going EIA on the Indonesian territorial waters.

77 per cent of the undersea HVDC transmission cable is expected to transverse across Indonesian territorial waters. It will connect the Bakun Hydroelectric Plant in Sarawak and Bentong in Pahang.

TENAGA ... May 09
Tenaga ... March 2009
Tenaga ... Jan 2009
Tenaga (TNB)
Tenaga (2) ... Oct 2008
Tenaga (1)... Oct 2008

KSL ... July 09

It will be launching its first mixed property development project in the Klang Valley in the first quarter next year.

The Bandar Bestari project would be sited on 180.64ha of freehold land in Jalan Klang-Banting, about 15km from the Klang town centre. The project, with a gross development value of RM2.5bil, will keep us busy for eight years.

As at Dec 31, 2008, the company had a total land-bank of about 874ha in Klang, Johor Baru, Batu Pahat, Kluang, Segamat, Muar and Mersing, with 45% located within Iskandar Malaysia.

Currently, it has four ongoing projects in Johor Baru – Taman Nusa Bestari, Taman Bestari Indah, Taman Kempas Indah and KSL City – and Maharani Riviera in Muar.

For the financial year ended Dec 31, the company registered net profit of RM90.50mil on revenue of RM216.24mil against RM118.16mil and RM277.41mil respectively in the preceding year.

KSL Holdings Bhd ... Sept 2008

Sunday, July 12, 2009

Saturday, July 11, 2009

Friday, July 10, 2009

UDA ... July 09

It is considering a plan to raise up to RM500 million by selling shares through a real estate investment trust (REIT) in two years, as it looks at ways of unlocking value from its property assets.

UDA, a unit of the Minister of Finance Inc, plans to list a retail REIT in Malaysia, which would include BB Plaza in Kuala Lumpur, Greentown Mall in Ipoh and Plaza Angsana in Johor Baru.

UDA's current asset is worth over RM2 billion. Besides BB Plaza, Greentown Mall and Plaza Angsana, which have yields of up to 8 per cent, it owns Hentian Puduraya, Hentian Duta, Cahaya Suria, Pertama Complex, Sinar Kota, Plaza UO, Plaza Warisan and Tunas Utama in Kuala Lumpur and Plaza Ampangan in Seremban.

UDA also owns Ancasa Hotel Kuala Lumpur, Puduraya Hotel, Ancasa Resort Allsuites (apartment) Port Dickson, Jerejak Resort & Spa in Penang, and Kuala Terengganu Golf Resort.

UDA will spend RM60 million over the next 6-10 months on a facelift for its malls and commercial buildings, and another RM15 million to refurbish its leisure properties.

Meanwhile, the group's focus will remain on increasing Bumiputera participation in economic activities and property ownership in urban areas.

For fiscal year 2008, UDA posted a net profit of RM28.8 million on revenue of RM313.3 million. Higher revenue attributed to its 14 on-going projects in the Klang Valley, Penang, Johor and Pahang, worth a combined RM900 million.

Thursday, July 9, 2009

Kulim Bhd ... July 09

It will use its new RM430mil loan facility to refinance old debts as well as for working capital requirements for its business operations, including its latest investment in shipping.

The group would utilise about RM310mil to settle some old debts.

The current low interest rate environment provides them with the opportunity to restructure and optimise its capital structure to match its earnings profile and expansionary needs.
The loan would be partly used to finance the replanting of its old oil palm trees.

Meanwhile, Sindora Bhd (in which Kulim has a 76% stake) subsidiary EA Technique (M) Sdn Bhd, via subsidiary Orkim Sdn Bhd, recently acquired six new vessels in view of the profitable charter rates. The loan would be used to partly finance the shipping operations as well.

The group would continue to be on the lookout for plantation land banks.

Meanwhile, Kulim’s London Stock Exchange-listed subsidiary New Britain Palm Oil Ltd’s new £17mil refinery facility in Liverpool was expected to start operation early next year (2010).

The loan facility was structured under the Islamic principle of Ijarah Muntahia Bittamleek or sale and leaseback with ownership of the Ijarah assets transferred to the lessee at the end of the Ijarah tenure. Kulim utilised 16 pieces of self-owned oil palm plantations to facilitate the Ijarah transaction.

The facility was its first syndicated corporate financing deal concluded since its establishment in December last year (2008).

Related post:-
Kulim ... Sept 2008
Kulim/Sindora ... May 2008

Wednesday, July 8, 2009

Fitters ... July 09

Fire safety products manufacturer Fitters Diversified Bhd expects to conclude five agreements to the tune of some US$45 million (RM158.9 million) worth of renewable energy jobs in China and Thailand by the third quarter of this year with 12 more projects in the pipeline.

The deals for the projects include four in China totalling US$30 million for biomass renewable energy plants while its Thailand project worth US$15 million is for municipal solid waste.

It would be doing a fund-raising exercise to undertake these projects but would not happen until the agreements were finalised.

The company, which diversified into the renewable energy business in 2007, is also in the final stages of securing another 12 projects in China, the Philippines, Indonesia and Malaysia. Of the 12 projects, most of them were bids for biomass projects. Each of its biomass projects averages about US$8 million while each of the municipal solid waste project is worth about US$30 million to US$40 million.

On its two contracts valued at nearly RM64.8 million awarded by Keretapi Tanah Melayu Bhd (KTMB) last year (2008), it was still waiting to sign the contracts. The first contract is worth RM54.23 million for the conversion of KTMB’s vacuum and dual- brake systems to air-brake system for KTMB’s wagons. The second contract is to set up a service and maintenance centre for KTMB for RM10.56 million.

Its maiden property project on a 3.37ha parcel of land in Setapak was in full swing. The project, which is a three-storey shopping mall, is scheduled to be completed by the third quarter of 2010. The project is expected to have a gross development value of RM500 million. Fitters had bought the parcel of land and sold it to Parkson Retail Group, which subsequently commissioned the company to build the shopping mall.

Fitters, via its 51%-owned subsidiary through Z’odd Design Sdn Bhd, is also in the midst of bidding for more jobs from its current contract with Universal Studios Singapore Theme Parks.

Fitters would continue to grow its three core businesses in manufacturing and distribution, engineering and construction, and property and new business division.

For its first quarter ended March 31, 2009, Fitters posted a net profit of RM1.43 million on the back of RM24.14 million in revenue, versus a net loss of RM135,000 against RM31.31 million revenue a year earlier. The net profit was due to gains from the finalisation of the disposal of a wholly owned subsidiary, Cameron Fresh Farms Sdn Bhd.

Related post:-
Fitters Diversified Bhd ... Oct 2008

Tuesday, July 7, 2009

TA ... July 09


TA ENTERPRISE's Net Profit for 1QE Apr 30, 2009 rose 6% to RM30.4m from RM28.7m a year ago, mainly due to a writeback of Provision for Doubtful Debts and Forex Gains.

Revenue fell 38.1% to RM72.0m for 1QE Apr 2009 compared with RM116.3m a year ago, underpinned by a drop in income from stock brokerage and sales of property segments.

Basic EPS was 2.13 sen per share versus 2.01 sen.

No dividends were declared in the quarter under review.

The Company in its Jun 17, 2009 EXCHANGE filing said the Group's various business segments were affected in line with the global economic downturn. To deal with the challenging situation, the Group said it would focus on carrying out prudent management practices, acquiring undervalued assets, and coming out with more attractive marketing initiatives.

Taliworks Corp ... July 09

Taliworks Corporation Bhd has completed the due diligence on the proposed RM225 million hazardous waste management project in Indonesia. The company was now awaiting the Indonesian provincial government’s decision on the project.

The opportunities for hazardous waste management are there. Indonesia’s economy is growing.

The project would be undertaken on a joint-venture basis with an Indonesian partner, adding that Taliworks should be able to provide an update of the project by the fourth quarter of this year or early 2010.

Aside from Indonesia, Taliworks had also ventured into China’s waste management industry. It had already started its due diligence on the proposed project in China, but declined to provide the site for the project. If successful, the project could be worth an estimated RM600 million.

Taliworks is also hoping to participate in the RM6 billion Pahang-Selangor inter-state raw water transfer project.

For the financial year ended Dec 31, 2008, water management projects contributed RM135.9 million in revenue, construction projects RM77 million and waste management projects RM13.5 million.

Monday, July 6, 2009

PLUS ... July 09


The Government paid PLUS EXPRESSWAYS the first portion of 2009's compensation amounting to RM92m to PLUS EXPRESSWAYS for not allowing the scheduled increase in toll rates, said PLUS MD - NOORIZAH ABDUL HAMID.

She said the amount accounted for 50% of the estimated full-year compensation, based on PLUS' projected traffic volume. " .... The actual compensation for this year (2009) will be determined next year (2010). The Government will look at the actual traffic volume .... " she told reporters after the Company's AGM on Jun 4, 2009.

According to a revised Concession Agreement in Jan 2002, PLUS is allowed to raise its toll rates by 10% once every three years. It last increased toll rates in 2005.

A scheduled increase was scheduled for Jan 2008 but the Government did not allow it due to high inflation then. In 2008, the Government paid RM185m in compensation to PLUS.

NOORIZAH said the current economic downturn had caused a decrease in traffic volume at some of its highways, and that 2009 would be a challenging year for the Company.

The Company experienced traffic growth of 3.2% for the Jan to Apr 2009, but the Company projected a full-year growth of merely 1% to 2%, NOORIZAH said. This was in contrast to the 5.2% and 7.7% growth registered in 2008 and 2007, respectively.

" .... Our first quarter and fourth quarter are traditionally strong. But we can't sustain the 3.2% growth (in the first four months) due to economic downturn and rising oil prices ...." she said.

However, the Company is committed to paying dividend of at least 16 sen per share in 2009 to shareholders, she added.

Voir Holdings Bhd ... July 09

The company planned to expand on its diversification into the food and beverage sector by opening two more "Garden Lifestyle Store and Cafe" outlets, which are annexed to Voir stores, by year-end.

They will spend between RM1.6 million and RM2 million on both cafes, depending on its size.

While its core business remains in fashion retailing, they are offering lifestyle choices to its customers.

Voir would also continue to explore new product lines, including expanding the sub-labels under existing brands. "Currently, Voir has 17 brands and sub-labels including the Garden Cafe," he said.

Voir's revenue fell 4.76% to RM35 million in its first quarter ended March 31, 2009 from RM36.75 million a year earlier due to the economic slowdown, while its net profit fell 72% to RM719,000 from RM2.67 million due to lower sales and higher c

Sunday, July 5, 2009

Saturday, July 4, 2009

Friday, July 3, 2009

YTL Corp Bhd/Starhill Global REIT ... July 09

YTL Corp Bhd will take up 75% of the total rights units to be issued by Starhill Global Real Estate Investment Trust (REIT) under its proposed one-for-one basis. The rights issue would be at 35 Singapore cents be unit.

As at June 22 2009, it owned 26.6% of Starhill Global REIT.

Starhill Global REIT is an externally managed real estate investment trust established in Singapore as a collective investment scheme. It was listed on the Main Board of the SGX-ST on Sept 20, 2005. As at June 18 2009, Starhill Global REIT has a total of 963.72 million units in issue.

Its core activities relate to the investment in a diverse portfolio of real estate and real estate assets with the prime objective of delivering regular and stable distributions and to achieve long term growth in the net asset value per unit.

YTL Corp had entered into a sub-underwriting agreement with DBS Bank Ltd (DBS), Merrill Lynch (Singapore) Pte Ltd and Credit Suisse (Singapore) Ltd in relation to the issue of 963.72 million new units in Starhill Global REIT.

The subscription was is in line with YTL Corp’s commitment to support Starhill Global REIT by facilitating the underwriting of the rights issue by the joint lead managers and underwriters.

The rights issue would also provide YTL Corp the opportunity to acquire rights units at a discount of approximately 45.3% to the closing market price on June 19, 2009 of 64 cents per unit.

Going forward …

Its official quoted that the rights issue will help strengthen its balance sheet and help them improve financial flexibility. It is part of Starhill Global REIT’s long term proactive capital management strategy. To be sure, to remain conservatively geared as asset prices deflate, REIT’s like Starthill Global are under pressure to boost their equity capital base. And the rebound in the stock market makes this a good time to launch its one for one offer of 960 million new shares at 35 sen each to raise S$337.3 million. But the cash Starhill global REIT is raising will come in handy for another reason.

The REIT owns stakes in Ngee Ann City and Wisma Atria, two of the most prominent properties along Orchard Road, located right next to the much awaited ION Orchard that is due to open on July 21, 2009. An asset enhancement programme is being planned to capitalize on the anticipated upturn in traffic the new mall is likely to attract.

Starhill global says 90% to 100% of the rights proceeds will be used for repayment of debt, acquisition opportunities and asset enhancement initiatives.

The asset enhancement plan for the two malls could potentially add as much as 100,000 sq ft gross floor area, but REIT is more likely to expand the properties by some 40,000 sq ft. They are also thinking of enhancing its façade with more pop up retail space to have the longest linear Orchard Road frontage, so Wisma will be more attractive.

But it could be several months before the REIT gets approval from the co-owners of the two properties for the expansion plans. Starhill Global owns 27% of Ngee Ann City and 74% of Wisma Atria.

The iconic status of the two properties and the 357m of street level frontage along Orchard Road they offer were cited as the key reasons for YTL Corp acquiring control of the REIT.

Besides its stake in Ngee Ann City and Wisma Atri, Starhill global owns seven commercial properties in Tokyo, Japan and a shopping mall in China. The REIt is targeting to grow its portfolio of properties to S$3 billion with in three years.

REIT is scouring around for opportunities to invest in distressed assets in Singapore, Malaysia, China, Japan and Australia.

The rights issue announced could be the portent of an acquisition spree. After the rights issue, Starhill Global’s debt to asset gearing will fall to 20.7% It currently has some S$670 million in debt as at March 31, 2009, of which S$380 million are commercial mortgage backed securities.

Its cost of debt is currently 2.95%.

YTL has given an undertaking to subscribe to its entitlement of 26.6% and an additional 48.4% or a total of 75% of the rights offering. If YTL subscribes for its entire undertaking, it would end up owning as much as 50.8% of the REIT. YTL is seeking a whitewash waiver not to make an offer for the company from shareholders.

YTL ... Jan 2009
YTL Corp Bhd ... Nov 2008

Thursday, July 2, 2009

Muhibbah Engineering Bhd ... July 09

Muhibbah Engineering Bhd is bidding for about RM3 billion in project, both locally and overseas, as it seeks to bolster its current book order of RM4 billion.

The RM3 billion projects it was eyeing were in the construction sector. It’s a mix of both local and overseas jobs. The success rate hinged on the timing and whether the project was compatible with the company expertise.

On the current order book of RM4 billion, it comprised of construction, shipyard and cranes projects for local and international markets. Of the RM4 billion, the construction order book was about RM2.6 billion and the remaining comprised of shipyard and cranes at RM820 million and RM620 million respectively.

Of Muhibbah’s income of RM381.19 million for the first quarter ended March 31, 2009, 55% was earned locally and the rest from overseas projects. Prior to the economic crisis, its order book was 60% foreign and 40% local. The percentage of jobs was around 40% from local companies and 60% international.

Wednesday, July 1, 2009

DRB Hicom Bhd/MMCCorp ... July 09

Sources say it has submitted a proposal to construct a double track railway line from Gemas to Johor Baru spanning 250 km.

This proposal, which could be valued at as much as Rm8 billion, will rival a bid by privately held Global Rail Sdn Bhd that is teaming up with the Chinese consortium China Infraglobe Consortium. Global Rail and its Chinese partners were reported to have submitted a proposal early June 2009 to the finance and transport ministries.

While details were scarce at press time, it is understood that DRB Hicom would end up working with sister company, MMCCorp, as the cargo carried on the railway track would ultimately pass through the PTP.

DRB Hicom is a 55.9% controlled by tycoon Tan Sri Syed Mokhtar also has 51.8% stake in MMC Corp, his flagship vehicle, which owns 70% of PTP.

The proposed Gemas-JB line is to link up with the Seremban to Gemas stretch that is currently being built by Indian based ircon Intl Ltd. There is a possibility that the rail line may even extend Gemas and Johor Baru.

The project would include the building of stations, depots, yards, bridges and the electrification, signaling and communications systems, among others.

A source say the double track railway will bypass KL to avoid congestion in the city, where priority is given to passengers trains.

Global Rail’s largest shareholder is Zulkifli Md Hussain, who owns 51% of Global Rail. Fan Boon Heng and another director, Hau Choo Kiat, have about 30% and 20% equity interest respectively in the company.

While Global Rail and its partner have grand plans, DRB-Hicom’s controlling shareholder Syed Mokhtar is known for his links to UMNO.

MMC and its JV partner, Gamuda had secured the Rm12.5 billion northern portion of the double track project. However, if DRB Hicom secures the southern portion of the project, eyebrows would be raised because ot its track record with rail jobs. To recap, in 2005 the government had terminated a contract with the company to take over the Rm4.6 billion Rawang to Ipoh portion of the double tracking project that had been awarded to it in July 2000. The reason was that the 182 km track was 17 months behind schedule and had exceeded the budget.

For 4Q2009 ended March, DRB-Hicom suffered a net loss of Rm60.7 million on the back of RM1.5 billion in revenue.

DRB-Hicom Bhd/EON ... Nov 2008