Friday, April 30, 2010

IPO...KimLun Corp Bhd.

The listing exercise will involve a public issue of 64 million new ordinary shares and an offer for sale of 11.3 million ordinary shares of 50 sen each.

Kimlun is principally an investment holding company with three proposed wholly owned subsidiaries namely, Kimlun Sdn Bhd (KLSB), SPC Industries Sdn Bhd (SPC) and I-Buildtech Solutions Pte Ltd (IBT).

The group is an engineering and construction services provider specialising in infrastructure and building construction, construction management, the provision of industrial building systems and manufacturing of concrete products. It also trades in construction and building materials.

KLSB has since 2003 expanded its construction services business to larger-scale building and infrastructure construction works including projects exceeding RM100 million each and heavy engineering works such as flyovers and interchanges.

SPC commenced its business of manufacturing and supply of concrete products in 2002. Its products range from ready-mixed concrete to pre-cast concrete products to meet the demand of infrastructure and building construction in the Malaysian and Singaporean markets.

IBT, which is principally involved in the provision of industrial building systems and trading of construction and building materials, was incorporated in Singapore in 2008 to capitalise on the growing building and construction market in Singapore.

One of its competitive strengths is that it is well positioned to respond to opportunities that the construction industry in Malaysia and Singapore may present, in particular Iskandar Malaysia, where the group has a significant presence.

The group is capable of providing a wide range of engineering and construction services, industrial building systems and concrete products to both the building and infrastructure segments of the construction industry.

Thursday, April 29, 2010

Pantech ... Apr10

S & P Results Review & Earnings Outlook

 Pantech Group reported decent 4QFY10 (Feb) net profit of MYR10.3 mln (-3% YoY), despite a 52.4% YoY decline in revenue to MYR66.5 mln. FY10 net profit of MYR50.4 mln was within our expectations. Pantech also declared a final DPS of 1.2 sen, taking full-year DPS to 4.2 sen, better than our previous forecast of 4 sen.

 After contracting in 3QFY10, revenue from the trading division fell a further 55% YoY and 33% QoQ due to lower sales volume. The manufacturing division on the other hand recorded a 26% QoQ sales growth, albeit still some 40% off the peak in FY09.

 The lower sales revenue was offset by higher operating margins (at 19%), boosted by a partial writeback of inventory writedowns taken in FY09. Assuming half of the FY09 writedown (totaling MYR9.2 mln) was written back, 4QFY10 adjusted operating margin would have shrunk to 12%, not a surprise given the lower asset utilization.

 While the drop in revenue is worrying, we believe investors should be looking ahead to FY11 given the rebound in oil prices and resumption in activity. We expect a stronger showing in FY11, in line with an expected increase in oil & gas capital spending as the global economy recovers. Pantech should also ramp up its manufacturing operations following the lifting of antidumping duties on its products in August 2009.

Recommendation & Investment Risks

 We cut our FY11 forecasts by 12%, to factor in potential delays to our original assumption of new orders given the lower than expected 2HFY10 revenue. As a result, we bring down our call a notch to Hold (from Buy), with a lower 12-month target price of MYR1.00 (from MYR1.10). We also introduce FY12 forecasts in this note.

 We continue to value Pantech on a sum-of-parts basis, pegging the value of its businesses to its trading and manufacturing peers, which now trade at an average of 6.0x and 8.4x calendarized 2010 EPS respectively. Our target price includes a revised 4.2 sen DPS for FY11 (from 4 sen), and implies a 7x multiple against its calendarized 2010 EPS.

 FY11 should see increased activities in the oil & gas services sector, judging from the flurry of contracts awarded by Petronas toward end-2009. We expect this, along with the opening up of new markets and a recovery in the export markets, to drive a recovery in Pantech’s earnings for FY11 onwards.

 Risks to our recommendation and target price include: higher-than expected costs and volatility for raw materials and crude oil, which would hamper contract awards and hit earnings through inventory pricing adjustments.

Dayang ... Apr10

Petronas Carigali is expected to call a tender for its offshore topside maintenance services in the next few months. Early estimates put the contract values for both Peninsular Malaysia (PMO) and Sarawak and Sabah (SKO & SBO) operations at around RM1.2 billion.

Dayang is currently the incumbent for the SKO & SBO while Vastalux holds the PMO operations.

Dayang is well poised to secure the contracts (especially the SKO & SBO) given its long-standing track record as well as ownership of a fleet of workboats which are assets required for the job.

Typically, a maintenance contract value tends to be higher than the original award as additional works apart from those stipulated may need to be carried out.

Similarly, the eventual value of the Sarawak Shell Bhd/Sabah Shell Petroleum Co Ltd (SSB/SSPC) contract could be higher than the RM400 million secured, or 1.25 times of the original value as a rule of thumb, translating into about RM500 million (FY10F contract wins assumption).

Meanwhile, it is understand that Borcos may make a provision for previous years’ taxation owing from vessels’ charter income. However, this is pending discussion with the auditors. Estimate potential downside of 6% in earnings could be made up by stronger contribution from Dayang’s oil and gas operations.

Dayang’s valuation remains undemanding at FY11F price-to-earnings (PE) and price-to-book-value (PBV) of 8.3 times and 1.6 times, respectively.

Dayang offers strong growth (FY09-FY11F net profit compound annual growth rate of 31.3%) and is a good proxy to oil and gas contract newsflow.

Wednesday, April 28, 2010

Bursa ... Apr10

S & P Results Review & Earnings Outlook

 Bursa’s 1Q10 profit was on the low end of our estimates. While revenue is largely within expectations, higher costs are lowering assumed profitability. We are adjusting our 2010 and 2011 profit forecasts lower by 23.6% and 19.1%, respectively. Our 2010 reduction mainly reflects, however, a pushing back in our assumed roll-out of the direct market access trading platform to more broking firms to 4Q10.

 While we lower our numbers, we note that 1Q10 performance does mark a sharp improvement over 1Q09 levels, with the stock market having recovered from the low point of the 2008/2009 bear market. Trading velocity at 30%-35% is expected to be sustained in 2010, while the increase in share price values should help provide revenue support.

 Derivatives revenue so far is limited with no apparent boost from the tie-up with the CME Group as yet. We note there may be risk to our assumed derivatives income, should trading volumes remains lackluster.

 Cost pressures have probably been largely reflected in the 1Q10 numbers, with higher staff costs due to increased bonus budgets. We expect the higher costs can be offset should trading volumes improve. However, with broking firms slower to implement the Direct Market Access system, the boost from the new trading platform to market volumes is not anticipated to be significant until 2011.

Recommendation & Investment Risks
 We retain our Buy call on Bursa but lower our 12-month target price to MYR8.50 (from MYR9.00). Bursa’s share price has consolidated along with the market, but we expect a strong lift in 2H10 market performances as the global economic recovery gains strength.

 As such, trading volumes should rise from 1Q10 levels. We note, however, that 2Q10 may be relatively quieter on a YoY basis given the exceptionally strong activity in 2Q09 and this may weigh on Bursa’s share price performance in the next few months.

 We continue to value Bursa on 32x 12 months forward PER, in line with its historical trading range. Recurring 3-year EPS growth of 27.2% should support the current PER range.

 With our lowered earnings, we have also reduced our assumed 2010 DPS to MYR0.23 from MYR0.34. We continue to assume a dividend payout ratio of 92%.

 Risks to our recommendation and target price include a prolonged consolidation in the stock market on the lack of fresh drivers and limited investor interest. Also systemic risk, as the global financial system continues to recover from the recession and regulatory overhauls may result in deteriorating confidence, leading to lower revenue for Bursa.

SCOMIMR ... Apr10

Shareholders of Scomi Marine Bhd today approved the proposed disposal of a 29.07 per cent stake in CH Offshore Ltd for total cash of about 143.5 million Singapore dollars or RM348.7 million. The proposed disposal would result in a net gain of RM63.6 million for the company, for the current financial year.

Scomi Marine's stake in CH Offshore, held by its wholly-owned subsidiary, Scomi Marines Services Pte Ltd, was sold to Falcon Energy Group Ltd.
In September 2005, the company paid 82 million Singapore dollars for its stake in CH Offshore.

The disposal would help lower its gearing from 0.6 times to 0.2 times.

Scomi Marine will continue with the renewal of its coal and offshore fleet as well as capacity, to enhance capabilities, to meet the current market demand. To date, the company has a current fleet of over 118 vessels which include utility vessels, tugs, barges and accommodations barges. The average fleet age of the Marine Logistics and Offshore Support Services vessels range from 11 to 17 years.

Meanwhile, Scomi Marine will participate in securing projects from Petronas in 2010, and is looking at opportunities in India within two years.

It will also participate if TNB calls for a tender for its coal-fired power plant in Manjung. TNB is undertaking studies to expand the generation capacity of its coal-fired power plant in Manjung, Perak.

Tuesday, April 27, 2010

IPO...Turbo-Mech Bhd

Turbo-Mech, a regional distributor of rotating equipment for the oil, gas and petrochemical industry.

The listing exercise involves a public issue of 18.068 million new shares, of which six million shares were offered to the public, 4.5 million shares woffered to the staff and business associates and 7.568 million shares to be placed out.

Its enlarged paid-up capital of Turbo-Mech of RM54 million, comprising 108 million shares, is scheduled to be listed on April 30.

Turbo-Mech is a regional supplier of rotating equipment including centrifugal pumps, metering pumps, high pressure gas compressors, high pressure pumps, non-seal pumps, steam turbines, industrial cooling fans and spare parts.

Its business of supplying rotating equipment, with the provision of maintenance and repair services, and spare parts to the oil, gas and petrochemical industries enable Turbo-Mech to provide a total solution for its customers.

It has subsidiaries in Singapore, Indonesia and the Philippines, associated companies in Malaysia, Brunei and Thailand, and a representative office in Vietnam.

The directors intend to recommend and distribute gross dividends of not less than 10% of the net profit distributable to shareholders for the year ending Dec 31, 2010.

PRIVA ... Apr10

It is finalising terms for a possible takeover of a competitor and is in advance talks with another as the ICT outsourcing and consulting services player continues to seek growth through mergers and acquisitions (M&A).

One of the target companies is a telecommunication outfit while another is involved in the information communications technology (ICT) industry.

It will fund these acquisitions with internally generated funds, while using its gearing to mainly finance IT outsourcing contracts.

It had in May 2009 taken over the listing status of Airocom Technology Bhd, now known as Airocom Technology Sdn Bhd, via a reverse takeover (RTO) exercise.

Airocom is involved in mobile gateways and system integration projects to do with communications. The takeover provided Privasia with the platform to enter the telecommunication sphere. The acquisition of Airocom also came with a profit guarantee of RM4.9 million for Privasia at group level for each of the financial years ended Dec 31, 2008 (FY08) and FY09.

Barely six months after the Airocom RTO, Privasia acquired a 70% stake in another communication related company, IPSAT Sdn Bhd, for RM1 million in December 2009. IPSAT is principally engaged in provision of system integration services for ports and logistics, IT outsourcing, e-procurement and wireless communications solutions.

Privasia is also seeking to secure contracts from the Internet and High Speed Broadband (HSBB) service providers, where Privasia could deploy, manage and maintain these infrastructures on behalf of the operators for a fee, while getting the operators to outsource some of the installation, management and maintenance work.

Privasia was awarded with the contract by Jalur Lebar Nasional Sdn Bhd (Jalenas) last month to design, supply and install equipment for the first phase of the HSBB network implemented by Jalenas. The first phase involved the setting up of HSBB infrastructure in Kuantan, Pahang.

Airocom's clients Digi and TM are also involved in the broadband and Internet services, and both have broadband licences in 3G. Telekom is also a major landline Internet service provider, and has recently rolled out its own HSBB service.

Privasia has RM75 million in secured contracts that will last the company for another three to five years. More than 40% are recurring contracts (long term contracts that offer recurring income).

In the longer term, Privasia aims to capture 45% of the total ICT outsourcing services and solutions market share in South East Asia in 10 years, said Puvanesan. For FY09 ended Dec 31, Privasia recorded a net profit of RM1.05 million on the back of RM27.16 million in turnover.

Monday, April 26, 2010

TNB ... Apr10

S & P Results Review & Earnings Outlook

 Tenaga’s strong 2QFY10 (Aug.) net profit (before forex gain) of MYR855.7 mln (+26.8% YoY) was driven by an 8.0% YoY electricity demand growth and lower generating costs (-5.8% YoY). The latter was partly due to a lower average coal cost of USD82/ton (from USD85/ton in 2QFY09) and the strengthening of the Ringgit (MYR).
As a result, net margin improved to 13.5% from 8.5% previously. This brings YTD net profit before forex gain to MYR1.61 bln, accounting for 52.2% of our previous FY10 forecast of MYR3.08 bln.

 In line with the improved results, Tenaga has declared a higher interim gross DPS of 6.0 sen (FY09: 2 sen gross and 2 sen net).

 The outlook remains positive as electricity demand is expected to remain strong. Tenaga’s long-term plan is to expand its existing 2,100MW Janamanjung plant by 2,000MW to be commissioned in 2016, in time with the drop in reserve margin to below 20% from 48% currently. This is in view of the fact that the power transmission from
Bakun to the peninsula is unlikely to take place now.

 We revise higher our 2010 net profit forecast by 8.1% to factor in a stronger 8% YoY (from 4.0%) electricity demand and an average coal cost of USD90/ton (from USD85/ton), as it has already secured 91% of its FY10 coal requirement. We also assume an 8% demand growth in FY11 and a higher average coal cost of USD100/ton, but the impact
will be partially offset by the stronger MYR.

Recommendation & Investment Risks

 We maintain our Buy recommendation on Tenaga but raise our 12-month target price to MYR10.00 (from MYR9.50).

 Our target price continues to be DCF-derived, using a WACC assumption of 7.0% and an unchanged terminal value of 3%. Our target price includes a projected FY10 net DPS of 27.7 sen.

 Tenaga’s earnings visibility has improved, given that coal cost is contained while electricity demand is recovering at a faster rate. Its valuations are undemanding with a FY11 PER of 10.4x, as compared with its forward PER range of between 10.3x-30.4x in the past five years, and its peer group average of 12.3x. Foreign shareholding in the company has also recovered slightly to 8.8% from the low of 8.5% in January 2010. As of one of the largest component stocks in the FBM KLCI, Tenaga has been a market laggard, underperformed the market barometer, rising merely 1.2% YTD vs. the index’s 5.0% YTD gain. Therefore, we believe Tenaga has ample upside potential, and therefore maintaining our Buy recommendation.

 Risks to our recommendation and target price include: (i) an unexpected spike in coal price, (ii) a weakening MYR against major currencies, (iii) slower-than-expected growth in electricity demand, and (iv) the absence of tariff adjustment to allow fuel cost pass-through.

SHL ... Apr10

It has proposed to acquire 60 per cent equity interest in Goodstock Land Sdn Bhd (GSL) for a cash consideration of RM25.56 million from Datuk Yap Teiong Choon and Datuk Yap Chong Lee.

SHL Consolidated is the largest single tenant occupying five-and-half floors in Wisma Sin Heap Lee, a property of which both the building and the land it is situated on is owned by GSL.

The property was valued at RM48 million. The move would allow it to recover RM525,312 or 60 per cent of the share rental payable to GSL. In total, SHL Consolidated would earn an annual rental income of approximately RM1.463 million from its 60 per cent share of rental income derived from the said property.
The rental savings and additional rental income provide a source of sustained recurring income to SHL Consolidated.
The property is strategically located near the intersection of Jalan Tun Razak and Jalan Ampang, near to the Kuala Lumpur City Centre development, SHL Consolidated said.

The purchase consideration would be funded via internally generated funds.

Sunday, April 25, 2010

生活小窍门 ... 3









Saturday, April 24, 2010

生活小窍门 ... 2











Friday, April 23, 2010

CMSB ... Apr10

It is looking at raising funding on a non-recourse basis for its 40% share of the aluminium smelter at Samalaju.

Managing director Datuk Richard Curtis said negotiations for a power purchase agreement for the Salco (Sarawak Aluminium Company Sdn Bhd) aluminium smelter were ongoing and once concluded, final feasibility studies on the design, construction, commissioning and operation of the smelter would commence.

Negotiations between CMS, Rio Tinto Alcan and Sarawak Energy Bhd to finalise a power purchase agreement for the Salco smelter are ongoing.

Salco is a 40:60 joint venture between CMS and Rio Tinto Alcan (a subsidiary of Rio Tinto Aluminium, a leading global mining company based in Australia) to undertake the construction and operation of a huge smelter in Samalaju, Sarawak with a projected initial production capacity of 720,000 tonnes per year.

CMS will gain RM353.9mil from the sale of its stake in UBG Bhd and up to RM352.5mil has been earmarked for potential investment capital to take advantage of business opportunities that Sarawak and SCORE have to offer.

Until those investments have been identified, that money would be placed in liquid low-risk investments and with banks.

A major investment in the horizon for CMS will be the aluminium smelter at Samalaju.

The Sarawak government has also announced that power from the Bakun Dam will be used in SCORE projects. The Salco smelter is a key component of the next wave of development of Sarawak under the SCORE initiative.

SCORE is one of the five regional development corridors being developed throughout the country and is a government initiative to transform Sarawak into a developed state by the year 2020.

It is seen as a major driver of business for the CMS group as the government’s plans for 3 growth nodes in Tanjung Manis, Mukah and Samalaju would translate into higher demand for construction materials.As the leading construction materials producer in Sarawak, CMS is well-positioned to play a major role to support the implementation of SCORE.

CMSB is gearing its operations to meet the growing demand for construction materials such as cement, concrete products, stone aggregates, premix for road surfaces, wires, water pipes, steel pipes, etc.

CMS was also on the lookout for opportunities in which the group could participate in upcoming construction contracts or other investment opportunities as a result of SCORE and the 10th Malaysia Plan.

Apart from directly benefiting from SCORE, CMS feels that associate companies such as KKB Engineering Bhd would add to its position as a one-stop supplier of construction materials in Sarawak.

Another associate of the group, K&N Kenanga Bhd, was aggressively looking to expand its business by helping companies already in the state or hoping to enter Sarawak with advisory services or funding in order to participate in the growth of SCORE.

CMS Group is focused on strengthening its core businesses in construction materials and property development of its large land bank around Kuching.

Thursday, April 22, 2010

HELP ... Apr10

HELP INTERNATIONAL CORP posted strong results for 1QE Jan 2010 due to its strong branding and rising demand for home-grown degrees and financial prudence measures taken during the recession.

For 1QE Jan 2010, Revenue rose 12.7% YoY to RM23.5m. PBT increased by a robust and significant 63.4% YoY to RM3.8m. Net Profit doubled to RM2.4 million. HELP's earnings are seasonal due to intakes. Revenue and Profits are recognised according to the classes conducted for each student enrolled, rather than on a pro-rated basis across the year. As such, its earnings are traditionally weak for the first and third quarters for its FYE Oct each year. Earnings tend to be very strong in the second and fourth quarters (Feb-Apr and Aug-Oct) when classes are in full swing.

The growth in Turnover reflects increasing student enrolments and staggered fee increases. Profits and margins increased more significantly due to a higher proportion of students studying for home-grown degrees, ie those awarded under the 'HELP University College' banner, which reduced payments to external universities. PBT Margin expanded from 11% to 16% YoY.

HELP's Balance Sheet remains very strong. Despite paying an initial deposit of RM5m for the purchase of the HELP Residence hostel, its Net Cash position remained virtually unchanged over the last quarter.

Net Cash stood at RM87.2m in Jan 2010. This is equivalent to a significant 98 sen per share � or 48% of the current share price of RM2.03. The sum includes RM30.8 million for fees paid in advance, but excludes the RM20.3 million allocated for the purchase of land for its new campus in Subang 2, Sungei Buloh.

INSIDERASIA said in a report Apr 1, 2010 that HELP is on track for continued double-digit growth in FY2010-2011. The Company's Net Profit has grown a compounded 24% annually over the last four years and looks set to grow 20% annually in the next two years. The Company has a clearly mapped-out growth strategy over the next few years, which culminates in the setting up of its new flagship Subang 2 campus.

In the near-to-medium term, growth will be anchored by growing student numbers � both locally and abroad, the staggered impact of fee increases and the addition of its 'Fraser Business Park' campus. The education provider will also enjoy substantial cost savings from the recently proposed acquisition of 'HELP Residence', which will be fully realised in FY2011 (the acquisition is pending completion). HELP had proposed to buy the 'HELP Residence' building in Damansara Heights in Sep 2009 which is presently used as its hostel, for RM50 million cash, to be paid over a period of five years, with interest accrued at 4% p.a. on the unpaid balance. This works out to RM329 psf.

The acquisition is positive earnings-wise, as savings from rental will far outweigh interest costs. The current annual rental of RM4.1m for the hostel translates into a rental yield of 8.25% for the Vendor, as opposed to interest income of just 2% and the imputed interest rate of 4% for the staggered instalment payments. Thus, HELP could potentially save up to RM3.1m a year in FY2011, which is equivalent to 14% of its PBT in FY2009.

The longer-term growth strategy will focus on the 23.3-acre Subang 2 integrated campus according to INSIDERASIA. This will elevate HELP into a full-fledged university, from its present status as a University College granted since 2004.

The new campus will also serve as a regional centre for its rising overseas student population. This includes those coming to Malaysia to study full-time, as well as those studying overseas for its degrees, most of which the last year is typically spent in Malaysia.

HELP's current student population is about 12,000 in Malaysia. It has over 1,000 students studying for HELP accredited courses overseas, in Vietnam, China and Indonesia. The majority are students enrolled in Vietnam National University.

The overseas ventures involve a "twinning" like arrangements with low risks and entry costs, but high international visibility and earnings potential. HELP provides software, syllabus, training, technical and academic support, without heavy investment in buildings or physical assets.

HELP is expanding its overseas base further, and is in the process of setting up new affiliations with a number of colleges in 2010, including four in Indonesia, 23 in China, one in Cambodia and likely another one in Vietnam, all of which will see students studying for HELP-accredited or twinning degrees.

These new tie-ups will help the company see a significant increase in overseas income from FY2011 onwards. It expects to see about 500-600 new overseas-based students in FY2010 and 1,200-1,600 the following year � in addition to the current base of over 1,000 students.

The new Subang 2 campus will alleviate accommodation and space constraints at its present Damansara campus, and allow for HELP to become a major regional education player.

The rising � and very prohibitive � cost of overseas degrees, and HELP's strong branding and academic standing will continue to increase its student base and ability to increase fees in the future, especially for twinning degrees. This underscores the resilience of its earnings according to INSIDERASIA.

The research house added that HELP has a strong business model and brand name. The strong branding has helped to expand its student population base, extend its presence overseas and increase the appeal of its own home-grown degrees, which are gaining popularity � not just locally but also abroad.

INSIDERASIA, a licensed Investment Advisor expects Net Profit to rise 20% to RM18.5m for FYE Oct 2010 and 21% to RM22.4 million for FYE Oct 2011, with EPS of 20.8 sen and 25.2 sen, respectively.

The research house believes that the latest NTA of RM1.11 per share is severely understated. The Company's main fixed asset, the 11-storey Wisma HELP in Damansara Heights, is carried in its books at only RM32m just RM119 psf for the built-up space. Office building space of that quality is currently ranging from low forced sales values of RM150 psf in Petaling Jaya to new sales of around RM500 psf and more for slightly highly building quality in that vicinity.

INSIDERASIA is of the view that a conservative value of RM350 psf for Wisma HELP will give a value of RM94.2m bringing the value of the building and cash to RM181.4m or RM2.05 per share, around the current share price. This implies that investors are getting HELP's other assets, including the underlying business, valuable franchises and strong branding built up for the past 24 years, for effectively 'free'.

HELP's expansion will be anchored by two new campuses � Fraser Business Park and Subang 2. Due to delays in handover, the new campus at Fraser Business Park on Jalan Sungei Besi, Kuala Lumpur, will open in 4Q-CY2010 instead of May 2010. HELP will lease about 220,000 sq ft of space, which can accommodate up to 5,000 students or a student to space ratio of 44 sf per annum. The campus will cater largely for post-graduate, technical and vocational courses, including a wide range of new courses such as culinary, hospitality, performing arts, physiotherapy and others.

HELP-ICT (the former Sepang Institute of Technology acquired in Nov 2007 will also move from its Klang location to the Fraser Park campus. This will give the new campus an instant base of about 1,500 students and will further widen the appeal of HELP-ICT's engineering, vocational and medical courses, as they were previously limited by its location in Klang.

The longer-term expansion plans will centre on the flagship Subang 2 campus near Sungei Buloh. Located on 23.3 acres, the land was acquired for just RM20 psf or RM20.3m. The entire campus is expected to cost around RM100m, including land cost. HELP hopes to receive building approvals in 2010 and start building in 2011. The first phase, with 300,000 sq ft of built-up space will cost RM50m. This can be easily funded through annual cash flows.

KYM ... Apr10

A packaging products manufacturer, is moving out of its comfort zone, with planned forays into the construction and iron ore processing businesses.

It is also seeking fresh opportunities in the Klang Valley real estate market to expand its income base.

The company would participate in construction jobs within Perak's Teluk Rubiah enclave where Brazil-based mining firm Vale International SA was planning to establish iron ore processing operations and a regional distribution centre for its products, a multi-billion ringgit initiative.

This will involve construction of roads and factories, besides houses and hostels for workers.

KYM via its 54%-owned subsidiary Harta Makmur Sdn Bhd had sold some 480ha (1,200 acres) of leasehold land in Teluk Rubiah to Vale in 2009.

Vale intends to set up a pelletising plant in Teluk Rubiah to process iron ore into pellets as feedstock for steel production. The iron ore will be shipped from South America to Teluk Rubiah. The mining company also plans to establish a distribution centre in Teluk Rubiah to enable the mining firm to have better access to its Asian customers, considering the huge distance between South America and Asia.

"Malaysia project" included a seaport with adequate depth to accommodate ships of 400,000 deadweight tonnes and a handling capacity of up to 30 million tonnes of iron ore in the initial phase. Capital expenditure for the initial phase is estimated at US$900 million (RM2.9 billion), including US$98 million to be spent in 2010. Operations are scheduled to begin in the first half of 2013.

Vale's operations will, however, be confined within an estimated 200ha area while the balance 280ha would serve as a buffer zone. Construction of the facilities in Teluk Rubiah is expected to start in early 2011.

Going forward, KYM could capitalise on its commercial links with Vale to make an initial venture into the iron ore processing business as a new source of income. Both KYM and Vale had deliberated on the idea which could add value to KYM.

The company was also scouting for more land in Kuala Lumpur where the developer intended to develop high-end residential and commercial properties. The move is deemed crucial to grow its property development income contribution to 30% of revenue within two years.

Property development made up less than 1% of KYM's revenue in the financial year ended January 2010.

The expansion to Kuala Lumpur, Malaysia's property hotspot, is seen as a natural progression from the company's initial real estate operations in Teluk Rubiah where the developer still has around 100 acres following the sale of the 1,200 acres to Vale. The remaining 100 acres, earmarked for a mixed development, has the potential to accommodate some 1,000 residential units over the next five years.

Wednesday, April 21, 2010

Maxis ... Apr10

MAXIS expects to maintain a strong cashflow position as it targets a high single-digit revenue growth in 2010 said a Company top executive on Mar 31, 2010.

MAXIS' financing costs are expected to rise in 2010 after it recently borrowed RM5 bil to repay its parent as part of its Pre-Listing restructuring exercise.

" .... We are expecting strong revenue growth this year (2010), which will compensate for the drop in margins ...." said CEO, SANDIP DAS to REUTERS in an interview. " .... At the same time, we are keeping costs under control. We still expect to keep a strong cash flow in the Company after serving our interest costs ...." he said.

MAXIS' US$3.3 bil (RM10.8 bil) re-listing in Nov 2009 was Southeast Asia's biggest ever second-time IPO.

AZRB ... Apr10

It will bid for contracts to build four office towers in Putrajaya worth some RM700 million to grow its income.

It will also bid for other building and infrastructure projects called by Putrajaya Holdings Sdn Bhd.

AZRB is hopeful of getting more contracts by the end of 2010. It is bidding for work in Malaysia, the Middle East and in India.

The unbilled portion of its existing order book is RM1.4 billion and this is expected to grow.

For the year to December 31 2009, AZRB posted a net profit of RM20.7 million on revenue of RM458.1 million.

Putrajaya Holdings chief Datuk Azlan Abdul Karim said it will call for tenders for the 14- and 15-storey office towers in the next five months.

Each project the group bids for is worth several hundred million ringgit.

It plans to build its base and tap the potential in the Gulf region, covering Saudi Arabia, Qatar, Bahrain, Oman, Kuwait and the United Arab Emirates.
AZRB has four existing projects in Saudi Arabia worth almost RM900 million.

Tuesday, April 20, 2010

Supermax ... Apr10

S & P Results Review & Earnings Outlook

• Supermax reported results that were significantly higher than expectations. 1Q10 net profit of MYR51.5 mln accounted for 34% of our previous 2010 forecast, as margins came in higher than expected.

• Strong glove demand and higher average selling price (ASP) contributed to a 15% YoY rise in 1Q10 revenue to MYR220.7 mln. In addition, better cost efficiency and productivity helped to boost operating margin to 21.6% from 10.6% in 1Q09 and operating profit by 134% YoY to MYR47.6 mln from MYR20.4 mln.

• During the 1Q10 period, latex price surged to an average MYR7.04/kg (+32% QoQ) while USD weakened 1% QoQ against MYR. Despite the headwind, 1Q10 revenue improved 12% QoQ (+8% QoQ in volume sales coupled with +4% QoQ in ASP) while operating profit grew 4% QoQ. Nevertheless, the time lag between adjusting ASP and higher cost (latex) is evident from a marginal squeeze in the operating margin from 23.3% in 4Q09.

• We expect the subsequent quarters to remain robust in terms of glove demand as many customers have delayed orders, considering the recent high latex price. To reflect the stronger 1Q10 margins achieved, we adjust our cost assumptions and lift our 2010 and 2011 earnings estimates to MYR171.7 mln (from MYR152.1 mln) and
MYR195.9 mln (from MYR172.3 mln) respectively.

Recommendation & Investment Risks

• We maintain our Strong Buy recommendation on Supermax with a higher 12-month target price of MYR8.50 (from MYR7.00), after rolling over our valuation year.

• We utilize a target PER of 11x (from 12x) against our projected 2011 (rollover from 2010) EPS for Supermax and add our estimated tax exempt net DPS for 2010 of 11 sen. The reduced target multiple is in line with the reduction in peer average.

• We expect Supermax to continue benefiting from the continued supply-demand imbalance. The recently approved U.S. Healthcare Reform Bill will also add to the glove demand strength over time, as 32 million uninsured Americans will now gain access to healthcare, which will eventually boost demand for gloves. We continue to retain our positive view on Supermax, given that it trades at an undemanding
2010 PER of 9.9x relative to the forecast 2010 EPS growth of 32%.

• Risks to our recommendation and target price include a sudden downturn in glove demand, volatility in latex price and a significant appreciation of the MYR, as revenue is predominantly derived from exports.

KAWAN ... Apr10

Frozen food manufacturer Kawan Food Bhd is optimistic that China will make up as much as 70 per cent of its sales over the next two years.

Kawan Food is well-known for its parathas and chapatis, capturing 60 per cent of its sales each year. It produced more than 200 million parathas in 2009.

In 2009, it reported a net profit of RM13.5 million on revenue of RM88 million.

The export-focused group sells 70 per cent of its products to the UK, France, Germany, Sweden, the Middle East, Japan, Hong Kong, New Zealand and Australia. The US is the group's biggest market, making up about 35 per cent of its export sales.

Kawan Food offers more than 90 products, which include vegetarian selection, tandoori naan, soya protein-based product, samosa, mini buns, flower rolls and dumplings.

Monday, April 19, 2010


It is tendering for RM50 million worth of contracts. Up to March 31 2010, it has an order book of RM13.9 million and are tendering for RM50 million jobs locally and abroad at this moment.

While the palm oil sector remains the company's main focus, it is diversifying into other high-growth sectors, namely oil and gas (O&G), waste management, food processing and pharmaceuticals.

Palm oil is already a major contributor for many years with a stable clientele.

The palm oil sector contributed up to 80% of SEB's revenue in the last few years but contribution from O&G and waste management was expected to grow, reaching 10% over the next three years. The balance is expected to come from the chemical and food industries.

It is actively expanding in O&G and waste management, and not forgetting food and pharmaceuticals. In waste management, it has signed some collaboration and are looking for strategic partners on the oil and gas side.

SEB is an engineering company and fabricator of process equipment for various industries, mainly palm oil, O&G, food and waste management. It fabricates a wide range of mission-critical process equipment and metal structures.

SEB, which recorded revenue and net profit of RM69 million and RM9.2 million in the financial year ended Dec 31, 2009, has ventured into more than 30 countries, with the bulk of contracts coming from Indonesia.

It recently completed Southeast Asia's largest sludge treatment plant in Singapore and a fabrication project for an oil refinery operator in Malaysia.

The exercise will raise RM16.9 million for SEB and RM6.9 million for Success Transformers. Of the RM16.9 million, RM9 million will be allocated for capital expenditure, RM3 million for repayment of borrowings, RM2.9 million for working capital and RM2 million for listing expenses.

Wah Seong ... Apr10

Troubled Italian pipe coating company Socotherm SpA has requested for a second round of bid submissions for its prospective buyers, including Wah Seong Corp Bhd, following the availability of additional information on its finances.

It is estimated that Wah Seong may be prepared to buy assets worth up to Rm500
million, without stretching its balance sheets. Its cash reserves stood at RM471 million as at Dec 2009.

Wah Song’s financial standing is healthy. It has manageable net debt and net gearing of RM280 million and 0.3 times respectively as at Dec 2009. Its total funding facilities are up to RM1.7 billion.

Other than the funds needed for the acquisition of Socotherm, Wah Seong will not need to continuously inject huge capital expenditure to sustain the business.

As the combined business of Wah Seong and Socotherm is expected to have significant pipe coating capacity, very little capital expenditure is expected in the near future. It needs to only ensure that there is sufficient working capital for the pipe coasting business of Scoctherm.

Sunday, April 18, 2010

生活小窍门 ... 1











Saturday, April 17, 2010




Friday, April 16, 2010

MAS ... Apr10


MALAYSIA AIRLINES said late Mar 2010 that the Airline will reinstate most of the capacity it took out during the economic downturn in the coming days to months as demand for air travel picks up except for its American route.

To reinstate capacity, the Airline will add daily flights from Kuala Lumpur to Auckland and Perth from 4 flights to 5 flights and 9 flights to 10 flights per week respectively before end of Mar 2010. For Paris, the plan is to add two weekly flights from 5 flights to 7 flights, and recently it added two weekly flights to Brisbane.

" .... With this and some more, we would have added back more than half the capacity that we took out during the crisis ...." said BERNARD FRANCIS.

MAS was one of the earliest carriers to cut capacity during the crisis by nearly 13% in 2009. It has begun adding some capacity back to the system since Sep 2009 and even with the additional there will be a shortfall since its North America routes remains unchanged until passenger traffic patterns change.

Airlines globally are adding back capacity they cut during the crisis as growth in air passenger is encouraging. The International Air Transport Association said passenger demand was expected to grow by 5.6% in 2010 versus its earlier forecast of 4.5% on the back of the turnaround in the global economy.

The latest data released by the Association of Asia Pacific Airlines showed that airlines in the Asia Pacific region collectively transported 14.2m international passengers in Feb 2010, an increase of 16.9% compared to the same month in 2009.

The Airline said that its forward bookings for 2QE Jun 2010 is showing a strong growth trend with bookings hitting 70% despite 2QE Jun being traditionally a slower quarter. " .... Our forward bookings are definitely doing better than 2009. The second quarter is seasonally the weakest and we carried about 62% load last year ...." said MAS Senior GM, BERNARD FRANCIS to STARBIZ in an interview published on Mar 26, 2010.

Traffic picks up in the third quarter and exceptional growth is experienced by most airlines in quarter four. BERNARD said it would be good if the Airline could end the year with loads of 70% to 75%.

BERNARD said that there was a lot of growth in the Asia-Pacific region, Asean, Europe and Australia but a bit slower in the United States.

By the last quarter of 2010, the Airline will take delivery of three new aircraft and for that it is reviewing its network to add more frequency and routes. It has eyes on the Indian sub continent, Middle East and Asean.

" .... We run labs to determine profit viability of each route that we intend to mount and we will make the announcements in mid-year ...." he said.

BERNARD said MAS is poised to take advantage of the growth as it has in place a network that can support growth and its air fares were attractive.

The Airline will also want to focus on selling Malaysia as a destination in 2010 for in-bound travel. It wants to bring in 5.5m in-bound traffic passengers that could potentially spend RM12.7 bil in tourism money. Bringing in in-bound travellers is done in cooperation with Tourism Malaysia and the Airline offers different packages to lure travellers here.

" .... We are always focused on selling outbound and since 2009 was a bad year for the aviation industry, we thought why not look at Malaysia. We want people to talk about Malaysia as a destination of choice like the way they talk about Bali and Phuket ...." he said.

In 2009, MAS flew in 4.5m inbound passengers, helping the country earn RM11 bil from tourism. The figure is based on assumption that each tourist spends RM2,300 during their stay in Malaysia. Cumulatively over a decade the Airline has helped enriched the nation with over RM2 tril in tourism earnings, BERNARD said.

BStead ... Apr10

It is targeting to sell off its 17,000ha of plantation land in south-west Sumatra before year-end to raise about US$50mil from the sale. Over 50% of the land was currently planted with oil palm.

Boustead would continue to hive off its non-core and non-performing assets to improve efficiency and also reduce bank borrowings. Boustead had managed to dispose of its non-profitable businesses and non-core assets over the years which had helped to reduce its gearing. Its gearing is currently 0.8 times, compared with 1.2 times in 2009.

On dividends, Boustead would continue with its quarterly dividend payout although it was not a written company policy. The payout was on condition it remained profitable.

For the financial year ended Dec 31, 2009 (FY09), Boustead paid out dividends net-of-tax amounting to 22.1 sen per share. The total dividend payout of RM184mil represents 54% of its attributable profit and a 27% increase from the payout from FY08.

The company would gain RM363 million from its disposal of the 80% stake in BH Insurance (M) Bhd to AXA Affin General Insurance Bhd. In addition, Boustead would also rake in RM75mil profit from BH Insurance’s business prior to the stake sale. After the disposal of BH Insurance, it still maintained a 20% stake in Affin Bank.

Boustead would continue to focus on its six core business divisions - heavy industry,
plantation, property, trading, finance and investment as well as manufacturing and services.

The heavy industry division, especially shipbuilding, would continue to be the key driver of growth for the company. The division now contributed about 30% to revenue, adding that the finance and investment division contributed about 20%, property 20%, plantation 15%, trading 10% and manufacturing 5%.

Thursday, April 15, 2010

ICSLS entitlement calculation eg: SCOMI-LA

If you have buy ICSLS (irredeemable convertible secured loan stocks), how does the % coupon entitlement calculation?

Here is the formula:-
{(Quantity x coupon rate)/frequency of pymt } x par value x tax

Eg: SCOMI-LA, if you have 20000 shares, Coupon of 4% per annum ICSLS, you will entitled for RM19.94.
{(Quantity x coupon rate)/frequency of pymt } x par value x tax
{(20000 x 4%)/4 } x 0.1 x 0.997 = RM19.94

Pelikan ... Apr10

Pelikan International Corp Bhd, which had proposed to take over Frankfurt Stock Exchange-listed Herlitz AG, managed to secured only an additional 3.38% or 368,611 shares, when the offer closed on Tuesday, April 6 2010.

Including the Herlitz shares acquired pursuant to the proposed acquisition, Pelikan owns 7.56 million shares or 69.37% of Herlitz. Accordingly, the proposals are deemed completed.

To recap, in early November 2009, Pelikan signed a deal with Stationery Products SARL, a unit of Advent International, to acquire a 66% stake in Herlitz together with a Falkensee Logistics Centre for €45 million (RM228 million) cash.

Pelikan was also obliged to make a voluntary general offer (VGO) for the 34% stake in Herlitz its does not own.

The price would be determined based on Herlitz’s three-month average weighted share price, which was around €1.85 per share. This meant that a successful VGO would result in an additional €7 million, which would bring the final price tag to €52 million.

Pelikan had expected to see cost savings of over RM100 million from its proposed acquisition of Herlitz AG enroute to achieving its target of €1billion (RM5.06 billion) in turnover in 2012.

Pelikan is a manufacturer and distributor of writing instruments, school stationery, art and hobby products, office supplies and printer consumables.

Wednesday, April 14, 2010

Wah Seong ... Apr10

Wah Seong’s wholly-owned Gas Services International Ltd (GSI) has reached a settlement with Weatherford UK Ltd. Weatherford had claimed damages as a result of GSI’s failure to deliver 28 booster compressors in time for testing and commissioning, comply with relevant standards, specification and fitness for purpose and commissioning/onsite support obligations.

Weatherford had claimed €2.4 million (RM11million) plus additional damages for the breach, which were to be offset against any amount owing to GSI, which had also filed a counter claim. In the settlement, Weatherford agreed to pay US$2 million (RM6.5million) to GSI.

Wah Seong had made some provisions for Weatherford’s claims in the past quarters. But are uncertain at this stage on the quantum of writeback of provisions arising from this settlement.

Assuming full writeback of the full US$2 million, estimate that FY10 net profit could be raised slightly by 5% under a best-case scenario.

Wah Seong’s tender book of RM5.3 billion appears huge but most awards for the tenders are likely to be announced towards year-end. As such, there is a likelihood that Wah Seong’s order book of RM1.4 billion currently could slide towards RM1 billion by 2QFY10, but rebound towards year-end (2010) as new orders materialise.

Wah Seong is still in advanced negotiations with Italy-based Orleans Group to buy a stake — around 60%-70% — in a former Socotherm pipe-coating facility in Port Harcourt, Nigeria.

But to mitigate the huge risks in Nigeria, Wah Seong is looking at a technical arrangement with the Orleans Group to provide pipe-coating consultancy services first but with an option to later buy an equity stake if the operation kicks off successfully.

Incken ... Apr10

About 52.16 million shares or almost 12.4% of plantation counter Inch Kenneth Kajang Rubber plc were crossed in two large off-market trades. The shares were done at 37 sen apiece or a total of RM19.29 million.

Inch Kenneth’s largest shareholder is publicly traded Concrete Engineering Products Bhd (Cepco), which has about 55 million shares or 13.08% equity interest in the company. Other substantial shareholders are Hamptons Property Sdn Bhd, which controls 11.72% or 49.33 million shares, FA Securities Sdn Bhd (7.05% or 29.67 million shares), and Euston Technologies Sdn Bhd (5.36% or 22.56 million shares).

Considering the shareholding structure, the sale of the two blocks of shares could be by Cepco, Hamptons Property, or a combination of FA Securities and Euston Technologies.

Inch Kenneth and Cepco have cross shareholding, with Inch Kenneth controlling 20.16% in Cepco. The two companies were also related to FA Peninsula Bhd, which was delisted in 2007 due to its ailing financials.

According to the Companies Commission of Malaysia, Nazrul Amin Hassan and Nurul Akmal Jamaludin equally own Hamptons Property. The company’s directors are Ramzi Hassan and Muhammad Fahmi Hassan.

FA Securities is 51% controlled by FA Peninsula and 49% by Che Muhamad Fasir Samsudin. The company’s directors are Ismail Nik Man, Rosni Ab Malik, Isa Mustapha and Che Muhamad Fasir.

Euston Technologies is equally controlled by Yasmin Hassan and Norime Nafi, while its directors are Madihah Hassan and Norhusniyati Husin.

According to Inch Kenneth’s annual report for FY08, there are other shareholders such as Lu Pat Sdn Bhd, which controls about 7.4 million shares or 1.77%. Lu Pat owns a quarter of the equity in developer Eng Lian Enterprise Sdn Bhd.
The directors of both Cepco and Inch Kenneth do not have any substantial shareholding in the companies.

For the year ended December 2009, Inch Kenneth posted a net profit of RM362,000 on RM17.66 million revenue.

Tuesday, April 13, 2010

suncity ... Apr10

The group is undertaking a corporate exercise to unlock the value of its properties which will see it injecting its shopping malls, office towers, hotels and hypermarket into its proposed multi-billion ringgit Sunway real estate investment trust (REIT) which will be listed on Bursa Malaysia.

The proposed properties include the Sunway Pyramid shopping mall; 19-storey, five-star Sunway Resort Hotel & Spa; nine-storey Pyramid Tower Hotel; the Menara Sunway office tower block; five-storey Sunway Carnival Mall in Penang; 17-storey Sunway Hotel Seberang Jaya, SunCity Ipoh Hypermarket and the 33-storey Sunway Tower.

The corporate exercise also includes Sunway City disposing of three parcels of leasehold land, measuring 19,406 sq metres in Selangor, to its subsidiary -- Sunway Pyramid Sdn Bhd (SPSB). Sunway City owns a 52% stake of SPSB while the other 48% stake is held by Reco Pyramid Sdn Bhd. The princiapl activity of SPSB is operating a shopping mall.

Sunway City has also proposed to acquire 48 million shares or 48% of SPSB from Reco Pyramid (M) Sdn Bhd (RPSB) and 9.6 million shares or 48% stake in Sunway Resort Hotel Sdn Bhd (SRH) from Reco Resort Hotel (M) Sdn Bhd (RRHSB).

The Sunway REIT's investment objectives is to provide the unitholders with an exposure to a diversified portfolio of authorised investments that will provide stable cash distributions with the potential for sustainable growth of the net asset value per unit.

Subject to the approvals of the relevant authorities, Sunway REIT proposes to undertake a public issue of units in Sunway REIT and subsequent listing of and quotation for its entire issued and paid-up units on the Main Market of Bursa Malaysia Securities Bhd.

The proposed disposal of SCB land and properties will allow the group to realise their investments in the properties.

The proceeds from the proposed disposal of SCB land and the proposed disposal of properties will be used to acquire land bank, working capital, future business expansion and to repay the group's borrowings.

The disposal of the land and properties will also enable the group to enhance the development of the real estate investment market in Malaysia through its proposed holdings in the units in Sunway REIT as well as its involvement in the management of Sunway REIT upon the completion of the proposed listing.

Upon disposal of properties to Sunway REIT, RPSB and RRHSB would sell their 48% stake in SPSB and SRH to Sunway City. Sunway City also agreed to acquire their 48% stakes.

This would then see SPSB continueing to operate Sunway Pyramid Shopping Mall as a premier shopping mall with ice rink and bowling facilities. SRH, which will enter into a hotel master lease with Sunway REIT, will continue to operate Sunway Resort Hotel & Spa and Pyramid Tower Hotel.

Hiap Teck ... Apr10

About 55 million shares representing close to 17% of steelmaker Hiap Teck Venture Bhd were crossed in off-market trades in April 2010 The transactions in two blocks comprising 29.6 million shares and 25.4 million shares were valued at a total of RM88 mllion or RM1.60 per share.

The 29.6 million shares or 9.05% stake block is an exact match to major shareholder United Coconut Fibre Products Sdn Bhd’s interest in Hiap Teck. Hiap Teck’s largest shareholder is KHL Sdn Bhd with a 25.8% stake while Lembaga Tabung Haji holds 6.98%.

United Coconut had disposed of 5.5 million shares or a 1.7% stake in Hiap Teck in February 2010. Hiap Teck’s managing director Kua Hock Lai is deemed interested in both United Coconut Fibre and KHL.

Hiap Teck posted a net profit of RM3.9 million for its second quarter ended Jan 31, 2010 against a net loss of RM7.2 million a year earlier as market conditions improved. However, revenue dropped 6% to RM251.4 million from RM267.3 million previously.
Hiap Teck had in March 2010 made the first tranche payment for its 55% acquisition of Eastern Steel Sdn Bhd. The first payment of RM33 million was 30% of the purchase price of RM110 million. The second tranche would be paid later April 2010.

There were concerns over its gearing which it estimated to be at 32.7% for FY10. However, the downside would be limited if the proposed venture secured an off-take agreement with Ji Kang Dimensi and technology from Jinan Iron & Steel Group for the setting up of its blast furnace plant.

Eastern Steel owns two parcels of industrial land with a total combined area of 600 acres in Kemaman, Terengganu on which a blast furnace plant would be built on. It is awaiting approval from the Department of Environment to proceed. The State Economic Planning Unit of Terengganu has also approved the alienation of 1,200 acres of land at Kemaman to Eastern Steel in two phases.

Hiap Teck has said the purchase of Eastern Steel will enable it to become an integrated player with both upstream and downstream operations, thus strengthening its position within the local steel industry and also allowed it to better manage its profit margins.

Monday, April 12, 2010

TSM ... Apr10

By Netresearch-Asia

• TSM’s 4QFY10 were ahead of our expectations due to a better-than-expected performance at the core manufacturing division, and compensation from certain customers for the strong Yen incurred in earlier periods.

• 4QFY10 revenue was up by 21.9% yoy reflecting the recovery in the automotive sector but sharply higher margins from better selling prices and improved productivity helped boost pre-tax profits by more than three-fold. On a sequential basis, 4QFY10 revenue was up 12.5% qoq whilst PBT jumped by a strong 56.7% qoq.

• We are projecting further earnings growth in FY11 on account of higher vehicle unit sales as well as the inclusion of a new subsidiary, Kenseisha (M) Sdn Bhd(KMSB), a hard disk drive manufacturer, from 3Q2010. A fluctuating Yen and increases in copper prices would however impact on margins.

• We have upgraded our forecasts and RNAV-derived price target to RM4.10/share, which implies an FY11F PER of 8x. The shares remain well supported by net cash of RM2.20/share as at the end of Jan 2010. BUY maintained.

GKent ... Apr10

Sources say George Kent and its consortium partners, Loh&Loh corp Bhd and Hazama Corp, are likely to bag up to RM500 million worth of jobs from the Pahang-Selangor interstate raw water transfer project.

Contracts likely to be awarded to the consortium include the water intake and pump station known as Package 3A on the Pahang side, and possibly Langat 2 related subscontracting works, which is in Selangor.

For FY2010 ended Jan 31, Geroge Kent posted a net profit of RM20 million on the back of rm125 million in revenue. For FY2009, the company posted a net profit of RM11.2 million.

It is also worth noting that the company has bid for more than RM1 billion worth of jobs, including those being offered for the inter state water project.

The company’s substantial shareholder is Tan Sri Khoo Kay Peng of MUIB, controls an 8.7% stake. The company’s chairman is Tan Sri Tan Kay Hock, who is also Johan Holdings Bhd chairman and chief executive, is among the people said to be close to Najib. They have known each other for a long time and are also golfing buddies.

Sunday, April 11, 2010


貨到再付款,這是很高招的騙術網路廣告最近一些高價的東西,例如:手機、DVD、notebook、DC.....等都便宜的離譜,並告訴你〝收到貨再付款〞。 (不要以為〝收到貨再付款〞就不會被騙錢....)雖然你會收到全新的機器,而且操作正常。


Saturday, April 10, 2010



在化療之後,臉與手腳全部 變黑浮腫,連走路都有困難。

我回想過去二十年,發現自己雖然滴酒不沾,卻超愛吃消夜,幾乎天天都吃,而且偏愛碳烤的東西 ,凡是天上飛的、地上爬的、海裡游的,我都喜歡吃,三餐沒有海鮮就吃不下,蝦子可以一次吃半斤一斤。



他為自己擬了菜單,主食改吃十殼米,就是把 糙米、黑糯米、小米、小麥、蕎麥、芡實、燕麥、蓮子、麥片、紅薏仁 熬煮在一起,魚不吃,肉不吃, 蔬菜水果大量吃,飯後喝綠茶。 連吃兩個禮拜之後,他就發現自己體力變好了。後來他又增加了健康食品,包括蜂王乳、蜂膠、啤酒酵母、綠藻等,人更精神了,臉上手上的黑色素慢慢褪去,腳也不腫了,「連頭髮都變黑」。


劉哲豪說,他其實到現在還沒有康復,只是學會與癌共存,用最適當的飲食,讓身體 保持最佳狀況。


有人求長壽之道,師父說:「每日一碗十穀健康粥」。果林老和尚將秘方傳予 徐上德醫師。 有一弱女子,被宣布 罹患鼻咽癌,其母每日親熬十穀健康粥,癌症竟奇蹟似地縮小,癌症指數降為正常,主治醫師直呼不可能,問其吃何種藥物,其母說:「皆因十穀健康粥遠勝藥物。」 唐琪小姐現年五十歲,每天一碗十穀健康粥,看起來像三十歲,青春、健康、美麗。 健保局總經理 賴美淑醫師每天吃十穀健康粥,永保工作活力。





微量元素(鋅、鉬、錳、鍺),酵素,抗氧化物、纖維素、氨基酸、生物素,具有降血壓,降膽? T醇,清除血栓,舒緩神經之功用,對便秘、高血壓、皮膚病、闌尾炎、失眠、口角炎效果不亞於醫藥,最重要的是沒有副作用。



Friday, April 9, 2010

REXIT ... Apr10

Rexit Bhd is believed to be on the verge of securing the Employees Provident Fund (EPF) agreement on the development and supply of a software that enables EPF contributors to draw on their savings for medical expenses.

Sources say the deal would be positive for Rexit’s top-line growth but the project’s estimated initial development cost of around RM12 million would put a dent on its bottom line in the coming quarters.

Rexit is also believed to be the only company appointed by EPF to work with the Federation of Investment Managers of Malaysia (FIMM) on developing a software that facilitates online purchase of trust units from EPF contributors’ accounts.

This came three months after the exit December 2009 of Marubeni Corp as Rexit’s substantial shareholder, which dented the international ambitions of the information technology solutions company. In December 2009, Marubeni disposed of some 18.93 million shares or its entire 10% stake in Rexit, in a move that raised concern about the company’s international expansion plan.

Rexit focuses mainly on providing software applications for the insurance industry.

On the local front, one of Rexit’s main income earners is its “e-insurans” gateway for insurance companies and the road transport department for car insurance renewal.

Rexit Venture Sdn Bhd is the largest shareholder in Rexit with a 37.69% stake.

Other major shareholders include T Rowe Price International with 7.71% and HSBC Holdings plc with 5.63%.

Thursday, April 8, 2010

FCW/GBH ... Apr10

Tan Sri Robert Tan owns a direct and deemed interest of 25.01% in FCW with a market value of RM117 million and 73.5% of GBH that is worth Rm167 million. Both FCW and GBH have similar core assets – a parcel of land measuring 30.6 acres in Segambut which currently houses GBH’s warehouse. FCW’s portion of the land is 15.73 acres while GBH’s plot is 14.86 acres.

FCW bought the 15.73 acres in 2007 from GBH for rm86 million cash and subsequently leased it back to GBH for its warehousing needs. The book value of FCW’s plot is rm88.3 million as of June 30, 2009. Meanwhile, GBH’s 14.86 acres are valued at RM119 million after a recent revaluation exercise.

The entire 30.59 acre parcel owned by FCW and GBH together has immediate potential for development because Mon’t Kiara is just a stone thro away. Also nearby is a 47 acre parcel owned by Tan Chong Motor Holdings Bhd. Tan Chong group currently utilizes the land for its vehicle assembly operations. However, the group has plans to build a major property development project on the parcel.

Considering the circumstances, would Tan integrated and coordinate the operations of FCW and GBH? The fact that both companies do not have strong core businesses may be an incentive for Tan to hasten his plans for the two companies to generate better returns.

FCW had revenue of rm4.53 million for six months ended Dec 2009 with 58.4% actually coming from the lease of its Segambut land and the warehouses to GBH. Its telecommunications division which essentially is the trading of equipment and contract manufacturing businesses, brought in only RM1.89 million in revenue and posted losses RM109000. In all FCW, posted a net profit of only rm402000 during the period, primarily due to its leasing income from the land.

Besides the sustainability of FCW’s main revenue and income stream in the form of rentals form GBH is also in question because the latter is loss making. GBH’s core business in the manufacturing of clay pipes and sanitary ware is bleeding millions.

So unless Tan can turn around GBH’s current core business, whether of not the company can continue to pay its rent to FCW – about rm5.3 million a year – remain a big question.

Observers say the answer lies in both companies chaning their core business to property development, using the Segambut land as the platform.
It makes sense to consolidate the land and property development business into one of the two listed companies, with the other focusing on current businesses such as clay pipes and sanitary ware and telecommunications equipment trading or other new businesses. By doing that, it has scale and a better story to sell to investors.

This can be done by GBH issuing new shares to FCW to acquire the latter’s 15.73 acres of the Segambut land, and FCW then distributing all the GBH shares it received from the deal to its shareholders, which include Tan. The benefit of such a deal is that while it does not require GBH to fork out more cash, it could increase the shares float in GBH and looses the current tight shareholdings in the company, in which Tan holds a 73.5% stake.

GBH is wrapping up its rights issue, into which Tan has pumped in another RM54.6 million (after paying more than RM35 million in a general offer in 2008) for his portion of the two for one rights issue of up to 123 million new GBH shares, which comes with 61.92 million free warrants.

The bulk of the rights issue proceeds of about RM50 million will be utilized to repay bank borrowings. This is crucial to release the land from the charge to financial institutions before GBH can think of developing the land.

GBH’s pro forma NTA per share is rm1.24 after rights issue but before the full conversion of warrants. FCW’s NTA per share is at RM0.63 as at Dec 2009. Worth noting that its 15.73 aces of land in Segambut has not been revalued.

Wednesday, April 7, 2010

IOI Corp ... Apr10

IOI Corporation Bhd may write back the impairment loss made in the financial year ended June 30, 2009 (FY09) on a joint-venture property project in Singapore towards the end of the current financial year since the value of property has risen in the island state.

In FY09, IOI Corp provided for impairment loss of about RM258.6 million on the Pinnacle Collection project, which is located on Sentosa Island. IOI Properties (Singapore) Pte Ltd and its JV partner Ho Bee Investment Ltd successfully tendered for the Pinnacle Collection, a 5.3-acre parcel of land located in Sentosa Cove for S$1.1 billion (RM2.6 billion) in 2008.

Pinnacle Collection is a luxury condominium development with an estimated gross development value of S$2.5 billion. According to IOI Corp, it is the last piece of condominium development left on Sentosa Island, and is scheduled for launch next year.

Tuesday, April 6, 2010

HoHup ... Apr10

It may have to resort to bringing Malton Bhd to court if it is not able to renegotiate a fairer deal in their joint development agreement (JDA) involving a 60-acre plot of land in Bukit Jalil.

If an impasse occurs, a court settlement would seem the only way to resolve it because Ho Hup’s shareholders can’t block the JDA in an EGM, as the agreement does not involve the disposal of assets.

The JDA was entered into and announced by Ho Hup’s previous board led by Datuk Vincent Lye just a few hours before a March 17 2010 EGM that had Lye and the previous board ousted from the company.

Now, the new board of Ho Hup, led by ex-Kuala Lumpur mayor Tan Sri Kamaruzzaman Shariff, is trying to renegotiate the JDA. This is an important task for the new board because the 60 acres in question is Ho Hup’s last piece of land and is the PN17outfit’s only hope for revival.

Bukit Jalil Development Sdn Bhd (BJD), a 70%-owned subsidiary of Ho Hup, was to develop the land jointly with Pioneer Haven Sdn Bhd (PHSB), a wholly owned subsidiary of Malton.

It was agreed that PHSB would be solely responsible for the financing of the development, and that BJD would not fork out any money but would be entitled to at least RM265 million, or 17% share of the project’s gross development value, from Malton, over the various phases of the project.

The minimum entitlement of RM265 million reflects just the market value of the 60-acre land (at RM101.40 per sq ft). If Ho Hup were to sell the land outright, it could get the entire amount or even more in a one-time payment. But in the JDA, it would only get the amount in stages over the development period of say, 10 years? And where is the profit element from this deal? So how can this be fair to Ho Hup?

Ho Hup’s hopes now rested on Malton’s goodwill. The company hopes that Malton will do the right thing and renegotiate a deal that is fair to both parties. Give Ho Hup control of its assets so that it can chart its own destiny.

In order for Ho Hup to survive under its regularisation plan, it would have to resolve its cash flow problems and also look at its future businesses, which is property development and construction.

That plot of land is key to the PN17 company’s revival scheme under a so-called “alternative” regularisation plan proposed by major shareholder Datuk Low Tuck Choy prior to the March 17 2010 EGM. The land is now tied to the JDA.

Meanwhile Ho Hup shareholders voted in favour to sell a 10.87-acre plot of land in Bukit Jalil to Magna Prima Bhd’s subsidiary Permata Juang (M) Sdn Bhd (PJSB) for RM19.41 million, or at RM41.01 psf.

There were higher offers for the land from three other tenders, namely Sagaharta Sdn Bhd, Jublex Sdn Bhd, and Ng Kee Leen, an executive director of Gamuda Bhd who is also the president of Master Builders Association Malaysia (MBAM). According to independent valuer Henry Butcher Malaysia, the said land was valued at RM45.01 psf, or RM21.30 million as at January 2010. The price agreed to with PJSB represents a discount of RM1.89 million or about 8.9% to the land’s current market value.

The company would examine the conditions set out in the sales and purchase agreement (S&P), “as there are legal implications”. This is because the S&P was signed between the previous board and PJSB.

There was a delay in the submission of Ho Hup’s regularisation plans to Bursa Malaysia and the Securities Commission as the previous regularisation plans had taken into account the 60 acres of land, which was now tied to the JDA.

The company would apply to Bursa for another extension of the submission deadline after Ho Hup had applied for a three-month extension on Jan 22, 2010 to address its Practice Note 17 (PN17) status. The current deadline falls on April 4, 2010.

The JDA is a stumbling block for the company and in the meantime it hopes that the regulators would consider an extension.

It was seeking an extension from April 2 up to May 2 2010 to issue the circular to shareholders in relation to the proposed disposal of plot of land in Mukim Petaling measuring 13,398 sq m for RM7.64mil cash to Action Master Sdn Bhd. The planned disposal was first announced in December 2009.

Meanwhile the company has yet to appoint an executive to run the company. As it is, the company appears to have lost control of its most valuable asset, the 60-acre land in Bukit Jalil.

Monday, April 5, 2010

Unisem ...Apr10

It is allocating between US$60 million (RM198.6 million) and US$70 million as capital expenditure (capex) for its current fiscal year to expand capacity and capitalise on rising demand for electrical and electronic (E&E) components and products.

About 75% of the capex would go to expanding production capacity at its manufacturing site in Chengdu, China by building more factories. The remaining 25% will be used to augment the assembly and test capacity at its factories in Ipoh, Malaysia, and Batam, Indonesia.

It will embark on organic growth in 2010 to 2012.

The group’s two factories in China were running at full capacity, and expansion was needed to double the daily semiconductor output to 10 million pieces.

Unisem, which also has factories in the US and UK, has no immediate fund-raising plans.

Customers in Asia accounted for 98% of Unisem’s revenue of RM1.04 billion in FY09’s fourth quarter while the European and US markets contributed the balance, according to notes accompanying the company’s latest quarterly financials.

Orient ... Apr10

Its auto division – once the bread and butter business – is dwindling. It had sold its stake in Hyundai franchise to Sime Darby for RM19.8 million cash. After the sale, Oriental still retains its dealership for Hyundai cars.

Its other interests in the auto sector are a 15% stake in Honda Malaysia Sdn Bhd and a car assembly plant in Tampoi, Johor (which assembles China margues such as Cherry and Berjaya ChangAn).

Without a franchise, it is apparent that the auto related operations are beginning to contribute less to the group’s bottom line. This inevitably puts pressure in management to grow its plantation and property development business.

It has involved in property development for many years but it only ventured into oil palm plantation in 2002 in a bid to diversify the group’s earnings stream.

Due to its conservative strategy, the group’s property and plantation businesses have not grown at a fast pace over the last few years. But the global financial crisis may present more opportunities for Oriental, which sits on a net cash of RM1.44 billion as at March 31, 2009. With a health balance sheet, the group is in a strong position to scoop up cheap plantation assets and development landbank or properties.

For 1Q2009, its property development had become the largest earnings contributor to the group, accounting for 29.7% of its group’s operating profit. This was followed by auto, plantation, investment holdings and resorts, and plastic products manufacturing.

It has a net cash holdings of RM1.44 billion or RM2.79 a share. The cash reserves currently made up of a sizeable portion of the group’s NAV of RM3.64 billion (equivalent to its shareholders’ fund) or RM7.04 per share, as at March 31, 2009.

Oriental has development landbank in Penang and the Klang Valley acquired many years ago, that have not been revalued and are still carried at cost.

It owns a 24 acre plot of vacant freehold land in Mukim Paya Terubong, Penang and still carried a net book value of RM300000.00. It also owns 39.3 acres of vacant freehold land in Tanjung Bungah, Penang which carried at a NBV of RM13.1 million.

Sunday, April 4, 2010


* 有点害羞,但曾在分别的街头,大声说我爱你。
* 同我去庙里求签,轻轻捉住我的手一同跪下。
* 言而有信。
* 从来不迟到——我迟到他不生气。
* 拥抱很久、很紧——每次我起身时几乎是需要慢慢推开他。
* 睡得比我迟一点,醒来早一点。
* 朦胧醒来轻呼我的名字——没有呼错。
* 记得我的日期、鞋号、最怕的事。
* 我很怕虫子,见到虫子大声尖叫他不会笑我。
* 笑起来很像个坏蛋——其实不是。
* 不舒服时,请假带我去看医生,回来路上买冰淇淋做励。
* 开车绝不喝酒,让我系上安全带。
* 帮我做家务,每天。边做边聊天。
* 常常帮助别人,不为什幺。
* 答应我﹕永远不。然后永远不。
* 白煮蛋的黄可以给他吃。
* 雨天散步,背我过积水,说﹕你还可以再胖一些啊。
* 吵嘴时不会一走了之。
* 错了会认错。
* 我说笑话他笑。
* 逛街时我看中同一款式三种颜色的裙子,他说﹕都试一遍好了。
* 试鞋时,他把我的卡通袜叠叠塞进上衣口袋。
* 常常说,有我呢。
* 指甲整齐干凈,喜欢我替他剪指甲。
* 小孩子都喜欢他,常常在楼下玩一裤子泥回来。
* 轻轻拧开我拧不开的汽水瓶。
* 忙时给我订机票,让我带父母一起出去玩。
* 告诉我——24小时随时打电话。
* 告诉我——不要省钱。
* 去义务献血,回来笑嘻嘻掏出一块“福利饼干”给我尝。
* 偷偷买一件两人合穿的雨衣放在车上。
* 我喜欢赤脚,他在副驾驶位脚下铺一小块羊绒毯。
* 与人争论听上去像是解释。
* 教我滑旱冰,扶着我跑了快一千公里。
* 从不上网聊天。
* 他的秘书说帮他缝上脱落的纽扣,他说谢谢,不用。
* 送我的花是盆花,替我浇水。
* 和我下棋,允许我悔棋。
* 他其实很早就对他的父母说起我……
* 喜欢运动,带我去招待女宾俱乐部。
* 穿十年前的牛仔裤仍然合身。
* 他养了一条大狗,他的狗喜欢我。
* 吵嘴时我要他还我送给他的维尼熊,他坚决不还。
* 我不辨方向,他体内有指南针,说——跟牢我。
* 吃我吃剩的东西。
* 我失眠时他陪我聊天。
* 比我高,我取不到的东西让他取。
* 重大的事情和我商量,比如明年的投资计划、周末野餐带不带烧烤架,晚饭吃大白菜还是小白菜。
* 站在商店的洗手间外面等我。
* 我感冒了,他还是会用我的杯子喝水。
* 和大人在一起像大人,和孩子在一起像孩子。
* 喜欢我,从未犹豫,从不和别的女人比较。
* 必须非常合心的东西才会买——买时从不问价格,然后用很久很久。
* 火车站接我,早到十分钟,带一盒蓝莓酸奶。
* 我买给他的东西都合他心,不转送他人。
* 身上的味道很好闻,但他自己不知道。
* 逛街回家,一只眼看电视球赛一只眼看我试新衣。
* 对女人有风度,也有距离。
* 有了他,计算机罢工不必彻夜痛苦。
* 很少叹气。
* 真的可以随时找到他。
* 和他在一起不怕死——也不害怕活下去,活到很老…
* 这种才是电影中的所谓---绝种好男人,HOHO,下辈子去火星找哦

Saturday, April 3, 2010


床蝨(bed bug)「臭蟲科CimicidaeCimex lectularius」可能爆發大流行。













Friday, April 2, 2010

Hiap Teck ... Apr10


Records 1HFY07/10 net profit of RM21.1m. Hiap Teck’s earnings showed considerable improvement on a yoy basis, recording net profit of RM21.1m for 1HFY07/10 compared to a net loss of RM2.4m for 1HFY07/09. Earnings was largely driven by a lower cost
base as revenue declined by a slight 9% yoy to RM531.1m due to lower sales volume. Meanwhile, EBIT margins improved to 6.3% compared to 5.5% for 1HFY07/09.

2QFY07/10 earnings contracted by 77% qoq.
Sequentially, Hiap Teck’s 2QFY07/10 net profit contracted by 77% to RM4.0m, in tandem with the 10% qoq decline in revenue to RM251.4m. Earnings were largely dragged down by the lackluster demand ahead of the Christmas and CNY festivities. Nonetheless, we expect demand to gather momentum in quarters ahead in tandem with expectations of a broad economic recovery.

Results are below expectations. Hiap Teck’s 1HFY07/10 net profit only accounted for 35% and 33% of our and consensus full-year estimates. We are however keeping our forecast unchanged, in anticipation of stronger quarters ahead with an expected pick up in demand post CNY lull. Steel prices are also on the rise, with global HRC prices gaining by 22% since end Jan-10, translating into higher average selling prices for Hiap Teck.

Maintain BUY, unchanged TP of RM1.76. We remain sanguine on Hiap Teck’s earnings prospects, projecting net profit to grow by a strong 41% yoy for FY07/10.
Valuations are undemanding, trading at CY10 PE of 7.0x. Maintain BUY with an unchanged TP of RM1.76, pegged to CY10 PE of 8.5x (mid-point of historical average and 1SD above mean).

SPSetia ... Apr10

SP SETIA posted Net Profit of RM38.1m for 1QE Jan 31, 2010, up 22.5% from the RM31.1m same quarter a year ago. The Company's EXCHANGE filing Mar 18, 2010 said that Revenue rose almost at the same pace of its earnings, up 22.5% to RM363.8m from RM297.0m. EPS was 3.76 sen versus 3.07 sen.

As a result of the better peformance, the Company raised sales target by 25% to RM2 bil for current financial year.

The Company said in its statement that " ....The Group's profit and revenue were mainly derived from its property development activities carried out in the Klang Valley, Johor Bahru and Penang ....". SP SETIA said the ongoing projects which contributed to the Group's profit and revenue include Setia Alam and Setia Eco-Park at Shah Alam, Setia Walk at Pusat Bandar Puchong, Setia Sky Residences at Jalan Tun Razak, Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Bahru and Setia Pearl Island in Penang.

SP SETIA said for 1QE Jan 2010, the Group set a new benchmark, in terms of highest first quarter sales achieved of RM608m � a 16% improvement from its previous high achieved in the first quarter of FY2008 and almost six times the amount recorded a year ago of RM102m.

As at Feb 28, 2010, the Group's sales for the first four months of the financial year totalled RM760. The Group targets to continue strengthening its core landed residential earnings base through sales of existing and new product launches.

Thursday, April 1, 2010

Scientex ... Apr10

S & P Results Review & Earnings Outlook

 Scientex’s 1HFY10 (Jul) results were broadly within our expectations with net profit of MYR25.7 mln reaching 53% of our FY10 projections.

 1HFY10 revenue grew 24% YoY to MYR323.6 mln on increased contributions from both manufacturing and property development divisions. Meanwhile, net profit rose by a substantial 96% YoY due to greater economies of scale and higher profit margins for its residential houses. Consequently, 1HFY10 net profit margin rose to 7.9% from
5.0% in the previous corresponding period.

 For the manufacturing division, management continues to experience pickup in demand for its industrial packaging products. Moreover, the inclusion of a new production line, which was commissioned in January 2010, added approximately another 1,500 mt/month in capacity and lowered overall production fixed costs.

 As for the property segment, the group’s focus on building affordable houses remains successful with 1HFY10 turnover rising 45% YoY to MYR60.1 mln despite the generally soft property market in Johor. Scientex’s property projects are located in Pasir Gudang and Kulai.

 We retain our FY10 and FY11 net profit forecasts of MYR48.4 mln and MYR53.5 mln, respectively.

Recommendation & Investment Risks
 We maintain our Buy recommendation on Scientex with a higher 12-month target price of MYR1.80 (from MYR1.70).

 We derive our target price by ascribing a target PER multiple of 7x (unchanged) against its FY11 earnings (rollover from CY10), inclusive of a projected dividend. The target PER multiple is benchmarked against its manufacturing peers and is also within the 5x-8x PER valuation range for property companies under our coverage.

 We remain positive on Scientex’s prospects, underpinned by the rising demand for its industrial packaging products and residential developments. We believe the group is well-poised to benefit from the ongoing recovery from the global financial crisis. Its earnings delivery has been resilient despite the recent economic downturn. Operations are also backed by a solid balance sheet, with NTA/share of MYR1.80 and net gearing of 0.1x as at January 2010. Considering the group’s
expected healthy earnings growth and strong fundamentals, its prospective 6.1x FY11 PER remains undemanding, in our opinion.

 Risks to our recommendation and target price include a reversal in the demand uptrend for its manufacturing division and softer-thanexpected take-up rates for its property launches.

FajarBaru ... Apr10

- Not entirely negative to Fajarbaru. News that Bina Puri Holdings and UEM may win the RM1b LCCT terminal contract should not be viewed too negatively on Fajarbaru. As the contract has not been awarded and Malaysian Airports have not made any official announcement on which shortlisted-prequalified contracts have been dropped from the bid for the terminal building, there is still a chance that Fajarbaru may secure the
contract or part of it.

- Healthy order book at c. RM450m until CY2012. At present, Fajarbaru is tendering another RM700m worth of contracts with a mix of government and private projects including parking apron works for Malaysia Airports. We expect contract award to be announced in the coming months. Ongoing projects including Double Track Railway, Tampin Hospital and shrimp farm at Terengganu are currently on track while project margin is expected to be a favourable c. 6% to be recognised until CY12.

- Still bidding for the remaining LCCT projects worth about RM300m to RM400m. Apart from the potential RM1b LCCT contract award, Fajarbaru is still bidding for the remaining LCCT contract including parking apron and other small scale structures worth about RM300m to RM400m. We also believe Fajarbaru stands a chanc e to secure sub -contracts from the LCCT contract winners.

- BUY maintained with lower TP RM1.32. (Previously RM1.61). Overall slowdown in awarding major contracts, will slowdown the growth of the construction sector. The intense competition has reduced bid-award strike rates substantially. We revised down our FY10 and FY11 earnings by 24% and 3% respectively, factoring in slower progressive recognition of works and delays in award of new contracts. We still pegged Fajarbaru at 10x PE to FY10 EPS yielding a lower TP at RM1.32.