Monday, August 30, 2010

FREIGHT ... Aug10

Mercury Securities Sdn Bhd Research House:-

Freight’s (FMH) latest FY10 results revealed steady revenues and profits that were within, but at the higher-end of our earlier expectations for full year FY10.

“FMH reports strong FY10 results”

FMH had recorded a strong y-o-y revenue growth of 38.7% or RM20.8 million to RM74.6 million during its 4Q/FY10 (4Q/FY09: RM53.8 million), contributed by the strong demand for seafreight and airfreight services. The group’s strong seafreight volumes (in TEUs) resulted in segment revenues that were more than 10% above our earlier expectations.

“Seafreight volumes higher than expected”

During 4Q/FY10, revenue from the group’s core business segment - Seafreight services had increased by 56.8% or RM16.8 million. Its Airfreight segment similarly enjoyed a healthy y-o-y growth of 76.7% or RM3.3 million during 4Q/FY10. Meanwhile, FMH’s support services segments such as Warehouse & Distribution, Haulage and Landfreight grew by 23.1%, 35.0% and 85.7% y-o-y respectively during 4Q/FY10.

The group’s Land Transport service which was launched in FY09 to transport loose and full-truck cargoes between Malaysia and Thailand had gained popularity among its existing customers. The expansion in demand for the group’s international freight services had provided further impetus for growth in its domestic logistics services, such as Warehouse & Distribution, Custom Brokerage and Haulage services.

During 4Q/FY10, the group’s profit before tax (PBT) had expanded by RM0.9 million or 15.6% to RM6.6 million (4Q/FY09: RM5.7 million), while the group’s net profit after tax after minority interest (NPATMI) had increased by RM0.7 million to RM4.7 million (4Q/FY09: RM4.0 million). For FY10 ending 30th June 2010, the group had recorded PBT of RM21.8 million against RM19.3 million, a growth of 12.9% y-o-y. The group achieved a growth of 21.2% in NPATMI, an increase of RM2.8 million to RM16.4 million (FY09: RM13.6 million).


FMH’s management remains very focused on its core business in the provision of freight services. Additionally, the group continues to seek opportunities to grow its businesses through potential acquisition within the industry both in domestic and regional markets. FMH’s freight (sea and air) volumes (TEUs) had recovered well in its FY10. The steady performance across most of FMH’s business segments in FY10 and the general improvement in both global and domestic business sentiments augurs well for FMH’s overall performance during its FY11 ending 30th June 2011.

“Bright prospects during FMH’s FY11”

In April 2010, The International Monetary Fund (IMF) stated that the global economy will grow at a faster-than-expected rate this year as it continues to rebound from the crippling financial crisis. In its World Economic Outlook report, the IMF had forecast global economic growth of 4.2% for 2010 and 4.3% for 2011.

The growth in Malaysia’s foreign trade (exports/imports), IPI (Industrial Production Index) and Manufacturing Sales in recent quarters – would augur well for FMH’s freight volumes and FY11 results. The latest available Malaysian economic data (June 2010) revealed slowing growth rates in y-o-y percentage terms but still very strong numbers nevertheless, for instance - IPI (+9.4 y-o-y), and Manufacturing Sales (+13.8% y-o-y), Exports (+17.2% y-o-y) and Imports (+30.1% y-o-y). Malaysia had reported a strong 2Q/2010 GDP growth of +8.9% while Bank Negara Malaysia (BNM) had increased its overnight policy rate (OPR) to 2.75% to stifle inflationary pressures, given that overall economic conditions have improved.

“Asia to drive global growth”

FMH’s traditional focus on intra-Asian trade, with less exposure to the US and Europe trade markets, has enabled the group to recover faster (compared to some competitors) from the lower trade volumes during the global recession last year. Furthermore, global economic growth in the next few years would be led by Asian countries, such as China and India.

During FY10, 22.7% of FMH’s revenues were derived from its overseas operations in Singapore, Australia, Indonesia and Thailand. FMH is getting a steady contribution from its newer subsidiaries in Indonesia and Thailand. FMH’s management is also exploring JV opportunities in other ASEAN countries. FMH’s low-entry-cost and asset light business model has so far proved successful in Indonesia and Thailand.

“Latest venture – Vietnam”

In March 2010, Icon Line (M) SB, a wholly owned subsidiary of FMH had entered into a MOU with Mr Dang Anh Binh to form a JV company for the purpose of starting a freight forwarding business in Vietnam. In April 2010, Icon Line had entered into a JV agreement with Mr Dang to incorporated a JV company in Ho Chi Minh City, Vietnam known as Icon Freight Services Company Ltd.

In July 2010, Icon Line (Malaysia) SB had subscribed VND255 million in Icon Freight Services Co Ltd, representing 51% of total issued and paid-up capital of Icon Freight Services Co Ltd. Thereafter, Icon Freight Services Company Ltd will be a 51% owned subsidiary of Icon Line (M) SB. Currently, FMH is working on setting-up its freight operations in Ho Chi Minh City, Vietnam.

To grow organically, FMH also continually seeks to expand its customer and agent base and to explore new destinations. Additionally, FMH has intensive marketing programmes to meet customers’ demands and also continue to provide value-added services to them. FMH’s management closely monitors its business volumes, receivables collection, industry trends and economic conditions.

YTL Corp ... Aug10

Sources say YTL Corp Bhd’s Wessex Water Ltd may no longer participate in the multi-billion ringgit project to rehabilitate and develop the polluted Klang River.

Britain-based Wessex is a water treatment and sewerage specialist, which together with property developer I-Bhd had been part of a consortium bidding for the Selangor government project.

It is understood that Wessex, together with another consortium and a company, had been chosen to work on different aspects of the project. The other consortium is TSS-Mako Engineering Sdn Bhd while the company is GJA Engineering & Construction Sdn Bhd.

The master planner is DPZ Asia, an architectural and planning firm based in the United States.

The state government is still studying the proposals submitted by the companies and are evaluating and figuring out the best business model for this project. It confirmed that I-Bhd would lead the Wessex Water I-Bhd group portion for the project.

The Klang River stretches 120km, with the first 80km under the purview of Selangor and the balance 40km under the Federal Government.

The massive project is being spearheaded by Selangor MB Tan Sri Abdul Khalid Ibrahim to enhance the state’s tourism and economic profile.

It was unveiled in 2009 as part of the state’s stimulus package. According to reports, the development of the river banks could attract new development and redevelopment projects with gross development value of more than RM50bil, creating thousands of jobs along the way.

Although being spearheaded by the state, financing for the project largely would come from private firms. The entire project is estimated to cost some RM15bil and is expected to span 15 years.

Sunday, August 29, 2010




嗚...! 我! 小時候真的只有這兩張照片ㄚ...

Saturday, August 28, 2010







哇∼∼天啊!居然發現有3 隻蚊子一直想咬兒子,但卻只敢在旁邊飛來飛去,兒子身邊突然好像多了一層防護罩耶!

蚊子僵持了5 分鐘還在飛,但就是不敢靠近,最後居然跑來咬我這在旁邊試驗的媽咪,因為我沒擦,真的有效耶!



Friday, August 27, 2010

Hunza ... Aug10

♦ Bringing forward Alila II. As the approval and agreement process with the state government were smoother than expected, Hunza is looking to bring forward the launch of Alila II to end 2010 (from 3Q2011 previously). The project, which is located at Tanjung Bungah Penang, is worth a GDV
of RM300m. It comprises 260 high-end condo units. Given the positive response received for Alila I (fully sold previously), and Infinity (with a take-up rate of 87% as at Jun 2010), we expect demand for Alila II to be similarly strong. Hunza is likely to step up its Alila II’s selling price to around RM650psf or higher, considering the rising selling price for
Infinity, ranging from RM500psf to RM650psf in the secondary market. Gross margin is hence expected to be higher than Infinity’s 40%.

♦ Low-cost component for Bayan Baru land to start end 2011. To recap, Hunza entered into a SPA to acquire a piece of 17-ha freehold land in Bayan Baru, Penang for RM82.1m cash (or RM45 psf) end-Dec 09. As part of the effort to relocate squatters, management is hopeful to fast track its
approval process with authorities, to kick start its low-cost component to accommodate most of the squatters by end 2011. A total of RM50m has been allocated as relocation cost. The remaining project will comprise medical centre, performance hall, hotel, service apartments etc. If the project
can be kicked off earlier than expected, it will give upside to our earnings forecast for FY13, as we have yet to factor in the earnings contribution from this project.

♦ Reducing unsold stocks. USM (Universiti Sains Malaysia) is currently in talks with Hunza to rent 45 units of its unsold shop offices in Bandar Putra Bertam, Prai, due to insufficient space in the university. If successful, Hunza will not only be able to reduce its unsold inventory, it can also receive rental income, which would amount to RM5m per year for a period of 10 years.

♦ Forecast. As the launch of Alila II is earlier than expected, and to incorporate the contribution of rental income, we revise up our FY11-13 earnings forecasts by 5.7-32.5%.

♦ Risks. The risks include: 1) slowdown in take-up rate due to potential negative perception on Gurney Paragon after the stop-work incident; 2) competition from other developers in Penang; and 3) delays in launches and approvals.

♦ Investment case. No change in our RNAV estimates, and likewise our fair value of RM1.58, based on 50% discount to RNAV. Maintain Buy.

YUNKONG ... Aug10

Yung Kong Galvanising Industries Bhd (YGKI) has forged a strategic partnership with Japan’s Nippon Steel Corp (NSC), which will guarantees it with a long-term supply of raw materials.

NSC would supply up to 50% of steel substrate required by the group in its downstream manufacturing activities. The tie-up will also enable YGKI to get technical assistance by tapping into NSC’s research and development.

YGKI is Malaysia’s second largest producer of galvanised and coated steel products, which has invested some RM350mil in three plants in the Klang Valley. Its fourth factory is in Demak Laut Industrial Park, Malaysia.

Listed on the Tokyo Stock Exchange, NSC, which is principally involved in steel-making and steel fabrication business, has taken up a stake in YGKI through the acquisition of more than 21.7 million redeemable convertible preference shares (RCPS).

NSC paid about RM13mil for the RCPS priced at 60 sen a piece. It could convert the RCPS into YGKI shares anytime within a 10-year period. Another Japanese firm Marubeni-Itochu Steel Inc, a YGKI joint-venture partner since 1983, has a 18.4% stake in YGKI. The conversion of the RCPS by NSC would raise the combined stakes of Japanese investors in YKGI to between 27% and 28%.

Sourcing raw materials at competitive prices from NSC on a long-term basis would help YGKI to plan its manufacturing operations, which was adversely affected by the extreme price volatility of the raw materials two years ago.

The prices of hot-rolled coils (HRC), which YGKI used to process into pickled and oiled HRC and cold-rolled coils (CRC), soared to US$1,150 per tonne in late 2008, only to crash to US$400 per tonne nine months later. The CRC is mainly used as the feed material for the galvanising line to produce galvanised iron coils (GIC).The GIC is then processed into colour coated coils or other downstream products, like roofing sheets and plain sheets.

YKGI group’s other products are furniture hardware and accessories, tubes and steel products. About 6% of its products are exported.

YGKI had invested some RM100mil in the past three years in its diversification into downstream activities carried out by subsidiary firms under the Star Shine Group.

YGKI posted a strong group pre-tax profit of RM7.75mil on a turnover of RM124.9mil for the second quarter ended June 30,2010, up from RM2.74mil and RM82.3mil respectively during the same period last year.

Thursday, August 26, 2010

CAB ... Aug10

S & P Results Review & Earnings Outlook

• For 2Q10, Carlsberg (M) reported a 56.8% YoY increase in revenue to MYR334.2 mln and a 139.3% YoY increase in net profit to MYR30.8 mln. The improved financial results were within our expectations and market consensus.

• The much improved 2Q10 results were driven by: (i) operational synergies and contribution from acquired subsidiary, Carlsberg Singapore (revenue of MYR75.7 mln and MYR9.6 mln in operating profit), (ii) higher sales associated with the 2010 FIFA World Cup season, (iii) increased supermarket and hypermarket sales, and (iv) higher profit contribution from associate company Lion Brewery (Ceylon). The group has also continued its outperformance in the imported premium beer segment through its subsidiary Luen Heng F&B, which distributes Hoegaarden, Stella Artois and Budweiser.

• Looking forward, we expect domestic demand for beer & stout to remain firm and Carlsberg (M)’s growth will continue to be driven by contribution and operational synergies from Carlsberg Singapore. On the cost side, although malt barley costs have risen in recent months, Carlsberg (M) has partially hedged its raw materials costs through forward buying for the next year. Another concern lies with the uncertainty of an excise duty increase on malt liquor in the upcoming 2011 Budget after a four-year respite.

• In view of the expected results, we maintain our FY10 and FY11 net profit projections.

Recommendation & Investment Risks

• We maintain our Buy recommendation on Carlsberg (M) with a higher 12-month target price of MYR6.00 (previously MYR5.50) after raising our forward dividend projections. Since its acquisition of Carlsberg Singapore, Carlsberg (M) has delivered the operational synergies and
improved profitability associated with the purchase. Besides growth from Carlsberg Singapore, we believe Carlsberg (M) will also benefit from improved domestic beer & stout demand, particularly for the premium segment, on which the group is increasing its attention.

• We continue to derive our 12-month target price using dividend discount model valuation, with an unchanged discount rate ranging from 8.1% to 8.9% (unchanged) and terminal growth of 3% (unchanged). Our higher 12-month target price is due to our raised projected dividend payout ratio. Management has guided for a dividend payout of 50% to 70% of distributable profits.

• Carlsberg (M) has declared an interim dividend of 5 sen less 25% tax and special dividend of 2.5 sen less 25% tax (FY09: interim dividend of 5 sen less 25% tax and nil special dividend).

• Risks to our recommendation and target price include: (i) weaker-than expected demand for beer and stout, (ii) unexpected increase in hop, malted barley and packaging costs, (iii) integration issues and lowerthan-
expected contribution and synergy savings from Carlsberg Singapore, and (iv) an unexpected increase in excise duty on malt liquor during the 2011 Budget.

Notion ... Aug10

Notion VTec Bhd’s executive chairman Thoo Chow Fah has been stepping up the purchase of the company’s shares and warrants of late.

Since Aug 10 2010, Thoo indirectly acquired 500,000 units of Notion shares for less than RM1 million, at prices ranging between RM1.85 and RM1.90, through his wife, Choo Wai Sook. He also purchased an additional 1.98 million warrants, also through his spouse, based on filings with Bursa Malaysia Securities. This brings Thoo’s direct and indirect interest in the company to 9.82% as at Aug 13, 2010.

Notion’s management may be taking advantage of the recent share price dip to raise their stake. Possibly, they could forsee it rising in the future. The move was a positive indication of the management’s confidence in the company and may mean that Notion was working on resolving the issues from its base plate project.

The Samsung 2.5” base plate project was of paramount importance. Notion’s reputation hinges on the Samsung 2.5” base plate project. Successful execution will put earnings back on track and see investors’ confidence regained.

Failure will raise doubt over Notion’s ability to secure and execute new projects. It is a make or break by March 2011. Moreover, Notion had indicated that it would drop the Samsung project if it failed to deliver the product up to the required standard by then.

As such, it will scale down its capex plans to RM30 million for FY11 (from RM100 million), dedicated to its Thai project (RM10 million) and camera segment expansion plans (RM20m).

Wednesday, August 25, 2010

KianJoo ... Aug10

S & P Results Review & Earnings Outlook

• KJCF’s 2Q10 results were above expectations due largely to betterthan-
expected sales and margins at the cans division.

• The cans division saw revenue improve 8% QoQ with a pick-up in demand from the domestic food & beverage sectors. Margins fell slightly to 14.2% from 14.8% in 1Q due to higher raw material prices. We expect strong demand to sustain into 2H10, which is traditionally better due to festive season buying. Additionally, staggered price hikes thus far should contribute to improved margins.

• Corrugated cartons saw revenue jump 15.7% QoQ. Price hikes in 2Q10 averaged 6%-8% but volume growth was also strong. We expect sales to be supported by new capacity in Vietnam which came onstream end-June, doubling existing capacity to 8,000 MT per month. Gross margin rebounded to 6.7% after an exceptionally low 1.8% in 1Q10, which had been impacted by higher raw material prices.

• Revenue from the group’s contract packaging services was stable QoQ but margins were impacted by higher raw material costs, slipping to 0.1% from 4.3% in 1Q10, with higher start-up losses from the group’s outfit in Vietnam, which commenced early this year.

• We raise our 2010 and 2011 net profit forecasts by 9.8% and 9.1% respectively to incorporate higher sales growth for the corrugated cartons division and slightly higher margins.

Recommendation & Investment Risks
• We maintain our Buy call on KJCF but with a higher 12-month target price of MYR1.80 (MYR1.50 previously) on the back of the earnings upgrade and on rolling forward valuations. We like KJCF for its dominant local position in the relatively resilient food & beverage market. Valuations, meanwhile, are undemanding, with the stock trading at a prospective 2011 PER of 7.6x and a P/NTA of 0.8x.

• Our target price is based on a 2010 PER of 8.3x (unchanged), which is based on a 10% premium to the manufacturing sector valuations, and adding on 2010 projected DPS. The premium is to account for KJCF’s broad exposure to the relatively stable food market.

• Surprising positively, management has announced a special DPS of 3.75 sen in addition to its interim DPS of 2.5 sen.

• The status of Can-One’s (CAN MK, MYR1.17, Hold) proposed acquisition of a 32.9% stake in KJCF at MYR1.65 per share for MYR241.1 mln cash from Kian Joo Holdings Sdn Bhd remains unresolved and looks to be a long-drawn process.

• Risks to our recommendation and target price include lower-thanexpected
demand from customers and higher-than-expected raw material costs. Much also remains to be seen as to whether the 32.9% sale to Can-One will materialize, if at all.

Gopeng ... Aug10

An industry observer did not discount the possibility of a capital repayment exercise
in the form of a special dividend, or even a general offer for the plantation and cement company

Its net assets per share is RM1.52.

For the financial year ended Dec 31, 2009, Gopeng posted a net profit of RM39.88 million on the back of RM12.66 million in revenue. Earnings per share was 22.2 sen.

In its most recent results for the first quarter ended March 31, 2010, net profit stood at RM8.64 million, or 4.82 sen per share.

The company also has a reasonably clean balance sheet. As at March 2010, net debt stood at RM16.82 million with a net gearing of just 6.2%.

Incorporated in November 1983, Gopeng was also involved in Project Lebuhraya Utara-Selatan Bhd’s (PLUS) project to design, construct and maintain the road from Ipoh to Gopeng and Tapah to Bidor. It is also engaged in plantations, property development, cement and water treatment plants.

Its most valuable asset is the 35.16% stake in cement producer Perak-Hanjoong Simen Sdn Bhd, which contributes over 90% of Gopeng’s annual net profit.

The group has 417ha of newly-planted oil palm, bringing its total planted area in its Kota Bahroe Estates to 1,446ha. It had also replanted 72ha of low-yielding palms aged 25 years old, adding that more ex-mining land had been identified for the future planting of oil palm.

Its plantation division was the biggest contributor to revenue in FY09, accounting for 78% or RM9.88 million while its property division contributed the remaining 22% or RM2.77 million. However, contributions from associates, mostly from the cement plant, accounted for about 94% of net profit last year.

The company’s major shareholders, as at May 11, 2010, are its executive chairman Mohd Salleh Hashim with a 32.34% stake, Fortuna Gembira Enterprise with 19.33% and Juitaneka Sdn Bhd with 12.08%.

Tuesday, August 24, 2010

BStead/Pharma ... Aug10

Pharmaniaga would pave the way for Boustead, a property and plantation group, to move into the pharmaceutical business in the Asean region “in a serious manner’’.

Boustead would pay RM534mil, or RM5.75 a share, to buy UEM Group’s entire 86.8% stake in the country’ largest integrated healthcare company.

Pharmaniaga owns the concession to supply medical products to government hospitals since 1998, and the contract was renewed last year that extended the concession by another 10 years from Dec 1, 2009.

The generic drugmaker made a record profit of RM60.2mil on revenue of RM1.3bil in the year ended Dec 31, 2009.
It is estimated that the concession business generated around 60% of the group’s annual revenue.

Apart from the local operations, Pharmaniaga holds a 55% stake in PT Millennium Pharmacon International, a pharmaceutical company listed on the Jakarta Stock Exchange.

Buying over Pharmaniaga would signifcantly enhance the profile of the group’s healthcare business and immediate access to overseas markets.

Under the takeover plan, Boustead will extend an offer to buy out the remaining minority shareholders in Pharmaniaga after it acquires the controlling stake from UEM.

Boustead has stated that it plans to keep Pharmaniaga listed on Bursa Malaysia. At this juncture, it is unclear how it intends to achieve that. The stake acquired from UEM alone is 86.8%, and it is likely that the general offer will find some takers. To comply with the stock exchange listing rules, Pharmaniaga needs to maintain a minimum 25% public shareholding spread. The exchange has given the company until the end of the year (2010) to meet the minimum requirement.

With Pharmaniaga likely to be Boustead’s fifth listed company, it is likely that the group’s healthcare division would be housed together.

Boustead’s offer effectively valued Pharmaniaga at about 11 times profit made in FY09.

For the first half ended June 30, Pharmaniaga’s net profit stood at RM24mil.
On an annualised basis, its full-year earnings may fall short of last year’s record performance.

Dividend payout for this year is estimated at a lower 30 sen per share, which still translates to a decent yield of 5.2%.

Pharmaniaga stumbled at the start of 2010 after its manufacturing licence was revoked by the Health Ministry in March. The move was for several non-compliance issues following a routine audit at its facility in Bangi. The factory’s closure in March 2010 contributed to the drop in first quarter, but the profit was back on growth track after normal operations resumed in the second quarter.

Its second-quarter results also revealed that its sales to the government continued to rise due to rising demand for generic drugs, but margins had suffered.

Boustead is the flagship company of Lemabaga Tabung Angkatan Tentera. The diversified conglomerate has over 100 subsidiaries and associate firms, as well as four listed companies in it stable. The group’s core businesses are plantation, heavy industries, property development, financial services and manufacturing. The inclusion of Pharmaniaga’s RM1.3bil-a-year business will make healthcare a new major segment for Boustead.

ECM ... Aug10

Rumoured that a merger and acquisition (M&A) candidate is ECM Libra Financial Group Bhd.

The investment bank, which was formed through a merger between ECM Libra Bhd and Avenue Capital Resources Bhd, had its heydays during the administration of former Prime Minister Tun Abdullah Ahmad Badawi, but has since adopted a relatively low profile.

Back then, it was involved in high-profile corporate deals such as the RM1.113 billion divestment of Killinghall (M) Bhd’s entire stake in Southern Bank Bhd, the listing exercise of AirAsia Bhd, Starhill REIT, and Parkson Retail Group Bhd, among many others.

In the last couple of years, there had been market speculation that the company was up for sale, or was seeking a strategic foreign partner. No corporate developments have since emerged, which some said was due to pricing.

Its net asset value (NAV) per share is RM1.20.

Most stockbroking groups are trading below their net asset value, partly due to the presence of sizeable intangible assets due to goodwill from earlier acquisition exercises.

ECM Libra has high intangible assets, amounting to RM284.5 million. Excluding these intangible assets, ECM Libra’s net tangible assets (NTA) per share is estimated at 85.7 sen, which some quarters opine is the fair value of ECM Libra.

But, its shareholders may beg to differ as what the stock’s actual fair value is. After all, goodwill represents the sum spent when buying out other assets above their NTA.

Veteran banker Tan Sri Azman Hashim is the single largest shareholder of ECM Libra, holding 23.5%; the co-founders Lim Kian Onn and Datuk Seri Kalimullah Masheerul Hassan own 9.48% and 3.97%, respectively. Interestingly, Lim stepped down from the group’s managing director post early this month. He is now the non-executive director.

In February 2010, Kalimullah, who was the chairman and executive director, was redesignated as the group’s chairman and non-executive director. The boardroom changes prompt market gossip that corporate exercises may be brewing in the investment bank.

Fundamentally, ECM Libra appears to be a cash-rich company. At 69 sen, its shares trade well below their net asset value per share of RM1.20 and even NTA per share of 85.7 sen after deducting goodwill. As at April 30 2010, the investment bank had net cash of RM478.8 million or about 58 sen per share.

For the financial year ended Jan 31, 2010, ECM Libra’s net profit jumped several folds to RM40.8 million or 4.99 sen per share, from RM5.1 million or 0.62 sen per share the year before.

Net profit ballooned nearly 48% to RM7.25 million from RM4.9 million for the first financial quarter ended April 30, 2010, while earnings per share rose to 0.9 sen from 0.6 sen. Revenue grew to RM33.8 million from RM23.2 million.

Will the liberalisation of ownership help ECM Libra to find a foreign buyer who can afford and willing to pay the price that is acceptable for its subsbtantial shareholder? The outcome is probably also dependent on whether the shareholders are in a hurry to sell the equity stake or not.

Monday, August 23, 2010

DRBHCom ... Aug10

Following the memorandum of understanding on Aug 2010, Volkswagen is expected to roll out three completely knocked down (CKD) models from the Pekan plant by the end of the first quarter 2011.

The three possible models could be the Golf, Beetle and Passat as they were Volkswagen's top three selling models in Malaysia currently.

As at June 2010, Volkswagen had sold 273 Golf GTis, 96 Beetles and 90 Passats, with all three models combined representing as much as 68 per cent of the total volume sold.

DRB-Hicom will also likely start the CKD assembly of the Audi (also part of the Volkswagen group) by 2012, for which it intends to increase yearly sales from 700 to 1,000 units.

BJCORP ... Aug10

It confirmed it is currently in talks with Singapore-based Kim Eng Holdings Ltd for the latter to take up a strategic investment in its stockbroking arm, Inter-Pacific Securities Sdn Bhd (Inter-Pac).

The diversified group said a detailed announcement would be made once the terms of the proposal have been agreed on.

Kim Eng made a similar announcement to the Singapore Exchange with a strategic investment in Inter-Pac may or may not proceed.

It was reported that the deal would be in the form of cash plus a share swap, with a premium to be paid for the stockbroking licence. Nonetheless, details of the pricing are not known.

The divestment would enable BCorp to tap into Kim Eng, which has a solid reputation in the stockbroking business. The Singaporean broker, on the other hand, would be able to build its clientele in Malaysia.

Sunday, August 22, 2010

20 Rules in any office

1. Rule 1. - The Boss is always right.

2. Rule 2. - If the Boss is wrong, see rule 1.

3. Those who work get more work. Others get pay, perks, and promotions.

4. Ph.D. stands for "Pull Him Down". The more intelligent a person, the more hardworking a person, the more committed a person; the more number of persons are engaged in pulling that person down.

5. If you are good, you will get all the work. If you are really good, you will get out of it.

6.. When the Bosses talk about improving productivity, they are never talking about themselves.

7. It doesn't matter what you do, it only matters what you say you've done and what you are going to do.

8. A pat on the back is only a few centimeters from a kick in the butt.

9. Don't be irreplaceable. If you can't be replaced, you can't be promoted.

10. The more crap you put up with, the more crap you are going to get.

11. If at first you don't succeed, try again. Then quit. No use being a damn fool about it...

12. When you don't know what to do, walk fast and look worried.

13.. Following the rules will not get the job done.

14. If it weren't for the last minute, nothing would get done.

15. Everything can be filed under "Miscellaneous" .

16. No matter how much you do, you never do enough.

17. You can do any amount of work provided it isn't the work you are supposed to be doing.

18. In order to get a promotion, you need not necessarily know your job.

19. In order to get a promotion, you only need to pretend that you know your job.

20. The last person that quit or was fired will be held responsible for everything that goes wrong.

Saturday, August 21, 2010

女生為什麼有小腹 ?



女生為什麼有小腹 ?

答案是 :

因為女生的子宮等皆須保溫,所以才會和男生的不同(男生的在體外,因為精蟲生存溫度要比體溫低 2


各位親愛的朋友,根據醫師的建議:不要因為口渴才去喝水,要為了喝水而喝水,而且每次喝水的量至少要 300~500cc 才能幫助體內新陳代謝,小酌一兩口根本無法解身體的渴,各位請把您的水杯換大一點的吧!

這很重要唷 !不是女生的,要告訴自己的女朋友、 老婆或是女性朋友喔 !

Friday, August 20, 2010

PMBTech ... Aug10

S & P Results Review & Earnings Outlook

• PMBT’s 1H10 results came in within our expectations despite net profit of MYR2.7 mln accounting for only 45% of our 2010 estimate. We expect 2H10 to be stronger on account of more domestic construction and fabrication works in progress.

• 1H10 revenue was marginally better (+0.7% YoY) as higher revenue from its manufacturing and trading segment (+6% YoY) was offset by lower contribution from the construction and fabrication segment (-7% YoY). Nevertheless, profit margins from both segments improved (1H09 margins were affected by the global economic crisis) and boosted operating profit by 54% YoY.

• Revenue for 2Q10 improved 20% QoQ with the construction and fabrication division growing 46% QoQ. This was somewhat expected, as timing issues affected this segment’s revenue contribution during 1Q10. Operating margin, however, halved, as variation orders for some work are pending finalization and should come in by 2H10.

• 2H10 is likely to be stronger compared to 1H10, given higher construction works in progress. We maintain our 2010 and 2011 net earnings forecasts.

Recommendation & Investment Risks

• We maintain our Buy recommendation on PMBT with an unchanged 12-month target price of MYR0.55.

• We continue to base our valuation methodology on a blend of PER and P/B. We apply a target PER of 7x and P/B target of 0.5x (both unchanged) to PMBT’s 2010 EPS and BVPS respectively. The target multiples are benchmarked to historical averages.

• At an undemanding 2010 PER of 6x, we believe PMBT’s valuation is inexpensive. Nevertheless, given its small size in terms of market capitalization, share price performance will likely be capped, which is a factor in our recommendation despite our target price warranting a more aggressive call.

• PMBT announced an interim dividend of 1.5% (or 0.75 sen), which translates to a yield of 1.7%.

• Risks to our recommendation and target price include: (i) volatility in demand and pricing of aluminum and aluminum products and (ii) a sudden downturn in the global and/or domestic economy, which will impact its construction and manufacturing divisions.

Tenaga/MMC Corp ... Aug10

The Energy Commission (EC) hopes to identify the power company that will plant up an additional 1,000MW of electricity by the end of January next year (2011).

They are still in the consultative process, evaluating the proposals submitted by three bidders of existing sites – Tenaga Nasional Bhd (Janamanjung), Malakoff Bhd (Tanjung Bin) and Jimah Power Sdn Bhd (Jimah).

They will pick the winner the latest by the end of January 2011. The winner this round has to ensure that the plant will be operational by the first quarter of 2015.

Each of these existing sites have the space for two more generating units of 1,000MW each.
Tenaga Nasional Bhd, MMC Corporation Bhd and Jimah Energy Ventures could be chosen to develop an additional power plant capacity to overcome the lack shortage of power supply in Peninsular Malaysia.

It was reported that the power to be generated by the Bakun hydroelectric station in Sarawak would not come to Peninsular Malaysia as planned in 2015 as it will be used in the development of the Sarawak Corridor of Renewable Energy.

There is a risk that without the power from Bakun, the reserve margin will decline below the 20 per cent threshold.

Energy Commission chairman Tan Sri Dr Ahmad Tajuddin Ali said the government will make an announcement on the matter very soon. The government will make a decision soon on the suggestions made by the commission and the Ministry of Energy, Green Technology and Water on which company will be implementing the project.

The government however has yet to decide on how the contract will be awarded.

The company will be entrusted to increase the power capacity via the use of coal, is able to start operations in 2015.

Ahmad Tajuddin explained that by developing the project from an existing power plant, it would reduce operation cost. Building a new one would take a longer period as it has to undergo an environmental impact study. Industry players say it would take two to three years to build a new plant.

This initiative would also help to complement the government’s efforts to reduce dependency on gas, which currently constitutes 60 per cent of the total power generation.

TNB was recently reported saying that it is proposing to expand its coal-fired power plant in Manjung, Perak, to meet demand for electricity in Peninsular Malaysia.

Industry observers expect the national utility giant to seek to increase the capacity of its Manjung facility by 2,000 megawatt from its current 2,100 megawatt, at an estimated cost of between RM6 billion and RM7 billion.

Meanwhile, MMC's power unit, Malakoff Corporation Bhd which has six plants with a total capacity of 5,020 megawatts, is also ready to expand its Tanjung Bin coal-fired plant if the government requires as it has the land and transmission capacity to supply to the national grid.

On the other hand, Jimah holds a 25-year licence to operate a 1,400-megawatt coal-fired plant near Port Dickson, Negri Sembilan.

Thursday, August 19, 2010

AutoV ... Aug10

S & P Results Review & Earnings Outlook

• AV’s 2Q results were broadly in line with expectations. Net profit of MYR3.9 mln was 12.2% higher QoQ and 80.5% up YoY. Cumulative net profit for 1H10 of MYR7.4 mln was 317% higher YoY and amounted to 56% of our previous 2010 profit estimate.

• The improved profitability was attributed to steady sales of components to Proton (PROH MK, MYR4.49, 4-STARS), mainly in respect of the Exora MPV that was launched April 2009. Management also cited improved market sentiment, resulting in higher demand for the group’s products. Consequently, 1H10 revenue advanced 38.7% YoY to MYR53.9 mln. Operating margin for 1H10 improved to 14.4% from 9.9% in 2H09, reflecting the 13% HoH revenue growth. Effective tax rates remained low due to the utilization of tax losses, which are expected to be exhausted after 3Q10. Hence, effective tax rates are expected to normalize from 4Q10 onwards.

• While Exora sales have remained steady at 2,000-2,500 units per month this year, sales in 2H10 could be slightly shallower HoH due to the festive holidays and year-end effect. There could be some added market interest after Proton launches the Exora Turbo model in early 2011. AV is only expected to be able to further boost sales to Proton when it introduces the Persona replacement model toward end-2011.

• Our 2010 profit estimate is broadly unchanged. However, we lift our 2011 forecast by 6.3% after tweaking our margin assumptions.

Recommendation & Investment Risks

• We reiterate our Buy call and lift our 12-month target price to MYR0.97 (from MYR0.91) in line with our higher earnings estimates.

• Our 12-month target price is derived after ascribing a target PER of 5x (unchanged) to 2011 earnings and includes the forecast DPS for 2010. The target PER multiple is below the target range of 6.5x-11x for other autoparts companies within our coverage. This reflects AV’s smaller market capitalization, smaller product range, smaller business scale, a shorter track record, low traded volume and the high level of dependence on Proton. It has also not yet demonstrated an ability to consistently secure new component supply contracts.

• Nonetheless, we believe AV is attractively valued, given its 4.5x 2011 PER.

• Risks to our forecasts include: (i) lower-than-expected auto sales, (ii) a sustained rise in raw material prices that could squeeze operating margins and (iii) a quicker-than-expected fall-off in the demand for the Exora MPV. In addition, the thinly traded volumes expose the stock to share price volatility, in our opinion.

Genting ... Aug10

Genting Singapore plc’s (GS) UK operation, which it is divesting to Genting Malaysia Bhd (GM), saw an improved business volume in the second quarter ended June 30, 2010.

Its UK casino operations’ revenue for 2Q10 dropped 3% to S$104.9 million (RM244.6 million) from S$108.0 million in the previous corresponding quarter, mainly due to currency translation of the weak pound against the Singapore dollar.

However, the underlying revenue of UK casino operations in pound improved by 6%, due to a higher business volume. Earnings before interest, tax, depreciation and amortisation (Ebitda) in the UK fell 25% to S$9.1 million as a result of bad debt written off.

As for the group, GS posted a net profit of S$396.5 million, compared to a loss of S$50.7 million in 2Q09 mainly due to contribution from its newly opened Resorts World Sentosa that started operations in February 2010.

Revenue came in at S$979.3 million and Ebitda at S$513.9 million. Earnings per share (EPS) stood at 3.27 cents.

For the six months to June 30, GS reported a net profit of S$248,000 versus a loss of S$82.5 million. Revenue rose to S$1.43 billion from S$225.5 million.

The Universal Studio Singapore theme park, which is part of Resorts World, increased its daily maximum capacity to about 8,000 with an average visitor spend of S$84, said GS in a filing to the Singapore Exchange.

Occupancy at Resorts World’s hotels was 70% for the period with an average room rate of S$263 a night.

Genting Bhd is the common shareholder of GM and GS, holding equity stake of 49.06% and 51.73% respectively.

Going Forward …

Given that Genting SP’s outstanding performance in the last few months, it may turn the corner in 2010 after three years of losses. It is certainly turning out to be a money spinner for Genting Group.

Critics however said that the second quarter for Genting SP was much of better than the first quarter. This may subsequently cool off. But seems that Genting SP’s momentum is still strong for now.

The tax structure is different for Malaysia and Singapore. In Singapore, the gaming tax is 15% and 22% for the VIP and the mass markets respectively.

Getning SP may face some challenges of its own, including losing market share to it competitor Marina Bay Sands as the latter ramps up. This may consequently cause margins to slip as it pursues aggressively revenue growth. RWS saw some slowing in business in the first two weeks after opening of MBS, Genting Singapore was able to stem the decline with a slew of new offerings.

Doubts remain whether Genting SP’s solid performance is sustainable once the initial euphoria wears off.

Wednesday, August 18, 2010

Bstead ... Aug10

After more than a year of negotiations, a breakthrough appears to have been achieved in the deadlock of talks between the Penang state government and Boustead Holdings Bhd over a dispute involving the Royale Bintang Hotel project.

It is learned that Boustead has also backed down from its initial RM60 million compensation claim from the Penang Island Municipal Council (MPPP) for having to scale down its Royale Bintang Hotel project from 12 to five floors.

It is learnt that a compromise has been reached and an announcement on the agreement reached between both parties will be announced within two weeks. The settlement could include a drastically reduced and “reasonable” compensation by the state government to Boustead for the scaled-down project.

The state government had directed the developer to scale down the project to meet Unesco’s 18m or five-storey height requirement in the core heritage zone of Weld Quay following George Town’s inscription as a Unesco World Heritage site on July 7, 2008.

It is learnt that the compensation, which was sought by Boustead and agreed upon by the state government, include the cost relating to the land.

There were no problems with the other three projects — Asian Global Business Sdn Bhd’s (AGB) Rice Miller Weld Quay Development in the core zone, E & O Bhd’s annexe building of the E & O Hotel in the buffer zone, and Low Yat group’s project in Jalan Sultan Ahmad Shah.

All four projects were approved before Penang was declared a Unesco World Heritage site on July 7, 2008. The 18m/five-storey height restriction contained in the dossier submitted to Unesco was put in place once the listing was made official.

Boustead’s initial plan was for a RM140 million development of a four-star hotel with 300 rooms. The developer had been given approval to build up to 51m before the Unesco listing.end of listed peers’ of 9.5 times to 11.5 times.

YNHProp ... Aug10

The acquisition of YNHP shares by its major shareholders and directors could be a preclude to bigger corporate moves. The company says the stock purchases are driven by the belief that the shares are undervalued.

Chairman and executive director Daruk YuKuan Chon and MD Datuk Yu Kuan Huat have been acquiring the company’s shares consistently for the last three years (2007-2009) as they feel the stock is undervalued.

Reports have shown that Datuk Yu Kuan Chon had raised his direct equity interest in the company to 17.43% as at Aug 11, 2010 while his brother Kuan Huat increased his holdings to 11.15%. Other major shareholders in YNHP are EPF (5.365) and Aberdeen Management plc has 10.93% stakes.

YNHP has suffered from a lack of earnings visibility as its property projects may be further delayed.

The company’s profit net profit fell to RM14.76 in 1Q2010 million from RM15.17 million a year ago. Its net assets per share stood at Rm1.80 as at March 31.

Going forward … preliminary work has begun on the Menera YNHP project after delays and construction is scheduled to begin within a year as the developer waits for its prime land to reach its full potential.

The company is also talking to potential local and foreign investors but nothing has been confirmed so far. Sources say that YNHP is now talking to a potential foreign investor, which would acquire the tower and own up to a 30% equity portion of the development.

While the retail podium of the towel was sold for RM300 million to various parties, many do not foresee construction beginning anytime soon pending, the conclusion of the talks of the potential business partner.

It has move into healthcare. It had in Feb 2009 signed an MOU with hospital operator Pantai Holdings Bhd to build and lease a private hospital in Sri Manjung, Perak. YNHP will lease the hospital to Pantai, which will operate it.

Tuesday, August 17, 2010

MPHB ... Aug10

It expects revenue to hit the RM5 billion mark in the next five years, driven by its gaming and property development business.
In fiscal year March 31 2010, MPHB recorded net profit of RM327 million on revenue of RM3.3 billion.

Some 80 per cent of the revenue came from the gaming business via its 51 per cent stake in Magnum Holdings Sdn Bhd. The rest were from property, insurance, stockbroking and investment holding.

Its property division has five projects worth over RM10 billion on the table to roll out by next year. The biggest is the redevelopment project in Makati City in the Philippines. It plans to convert a 22ha horseracing track into an integrated development, featuring commercial, residential and retail space as well as a hotel.
MPHB has a 40 per cent stake in listed Philippine Racing Club Inc that owns the race track, which has been relocated to Manila. The project is estimated to worth over RM5 billion and hopes to start construction next year.

At present, MPHB has three projects worth some RM300 million; two residential developments in Penang and one in Pudu, Kuala Lumpur.

By the middle of next year (2011), it targets to launch a RM3 billion project on a 2.4ha site in Kuala Lumpur. The seven-year project will comprise a one million sq ft retail podium, 50-storey luxury condominiums, a 35-storey four-star hotel and a 30-storey office tower. The project will be linked to Berjaya Times Square, Sg Wang Plaza, the new international financial district and Pasar Rakyat redevelopment in Imbi.

MPHB has three joint ventures with Bandaraya Development Bhd to undertake medium- to high-end residential projects worth RM1 billion on land its owns in Rawang and Mimaland in Selangor and in Penang.

The companies are discussing details of the joint-venture agreements.

KurAsia ... Aug10

It is reviving its plan for an insurance venture in Cambodia with a new partner following an earlier stalled collaboration with an institutional partner.

It is applying for insurance licenses in Cambodia but operations are only likely to come onstream in 2011.

At this juncture, they are still in the midst of procuring the necessary licenses in Cambodia. They are also finalizing the business plan and operational road map of the Cambodia JV company with its equity partner.

The Cambodia JV is part of its long term business strategy to expand geographically, particularly in IndoChina.

Apart from extending its geographical reach, its expansion strategy includes diversification to reduce its dependence on its bread and butter motor insurance and plans to widen its distribution channels and reorganize its investment portfolio.

Should Kurnia Asia’s plan in Cambodia materialize, it will join the ranks of early movers in Malaysia’s insurance fraternity

On Aug 2010, it has announced a plan private placement of 148 million new shares, representing 10% of the company’s issued paid up capital of about 1.49 billion.

Assuming an indicative 52 sen per share, the exercise is expected to raise RM77.4 million of which more than half of RM40 million is for the repayment of borrowings while RM35 million will finance working capital needs.

Proceeds from the private placement exercise are expected to be used within six months of the completion of the exercise in 4Q2010.

The shares will be placed out in tranches to individuals and/or institutional shareholders to be indentified.

Earnings dilution due to a larger share capital base post private placement is a concern.

Its net profit fell to RM23.81 million or 11.60 sen a share in 1QFY2010 ended March 31, 2010.

It has borrowings of RM400 million and cash of RM131 million (including indicative private placement proceeds of rm77.4 million), which translates to a net debt position of RM268 million. This suggests a net gearing ratio of 0.8 times based on its shareholders funds of rm331 million.

Monday, August 16, 2010

SPB ... Aug10

Selangor properties bhd, one of Malaysia's oldest and most conservative listed property companies, has a 51% stake, or 45.27 million shares in HELP.

Selprop is the largest landowner in the prime Damansara Heights suburb of Kuala Lumpur, where it owns 33 acres (13.2ha) as well as several commercial buildings, including Menara Milenium, Wisma Damansara, Kompleks Pejabat Damansara and 16 shops along Jalan Batai.

It also has a 50% stake in Claremont Shopping Centre project in Perth, and sizeable cash reserves.

Selprop's stake in HELP is carried at very low costs as Selprop invested in the company during the early stages. According to Selprop's annual report for the financial year ended Oct 31, 2009, the cost of its investments in subsidiaries quoted and which refers to its stake in HELP, stood at only RM2.62 million. That is equivalent to a book cost of just 5.8 sen per HELP share.

The market value of these shares then, according to the annual report, was RM70.63 million, which is equivalent to RM1.56 per share. Based on HELP's closing price of RM3.80, Selprop's stake would now be valued at RM172 million.

Compared with its book cost of just RM2.62 million, Selprop is sitting on unrealised gain of RM169.4 million, which is equivalent to 49 sen per Selprop share. The property company has 343.617 million shares issued. Selprop's net assets per share stood at RM4.95 as at April 30, 2010.

Adding the "unrealised gain" of 49 sen per share will imply a revised net asset value of RM5.43, some 43% above the last traded share price of RM3.80. And this does not yet include the revaluation of its own property assets.

The company derives most of its income from the rental of its properties, although the upcoming launch of the Jalan Batai condominiums in Damansara Heights will lift future earnings.

Delloyd ... Aug10

Delloyd Ventures plans to manufacture buses in Malaysia. It is currently in discussions with Syarikat Prasana Nasional Bhd (SPNB) on the possibility of manufacturing a lower decked long bus. While plans for manufacturing buses in Malaysia are not new, the ongoing discussions with SPNB are a positive indication that could provide a catalyst for the stock.

A contract to procure an elongated high-deck bus for the Jakarta administration was valued at about RM1.1 million to RM1.2 million, with a total order of 42 units in 2008-2010. Given Malaysia's smaller population base, the order would be 10 buses at the most.

Although Delloyd has successfully deployed a number of buses for Jakarta's public transport system, industry observers see some stumbling blocks to the deal due to a lack of accommodative traffic infrastructure for a dedicated bus way for low-deck buses, as well as its bus stations/stops. However, the management is confident that it will secure a contract with SPNB given its track record in Indonesia.

The investment to set up a new production line to kick-start the manufacturing of these buses would be rather minimal, and not exceeding RM30 million as most of the parts are outsourced.

Going forward having made inroads into the auto industry in Indonesia with a bus making venture, is planning to replicate that success by bringing its business to Malaysia.

It is looking at introducing its first bus prototype by 2010 for inspection by the relevant authorities.

Dellyod started its bus manufacturing business in March 2009, when it acquired a 51% stake in PT Asian Auto Intl. This marked the latest by the group to enhance its earnings base.

It has been actively diversifying its revenue base. It ventured into the oil palm industry in 2001 through 90% owned subsidiary.

The plantation division contributed 11.4% to Delloyd’s total revenue for 1Q2010 ended March 31, 2010, but the auto division remains Delloyd mainstay for now. It contributed more than 76% to total sales for the quarter.

Some of Delloyd’s biggest domestic OEM clients based in Malaysia are Proton, Perodua, Toyota, Hyundai Sime Darby…

It exports to more than 10 countries.

Sunday, August 15, 2010









Saturday, August 14, 2010




對於老是往舞會 (PUB)裡鑽的女士們,請小心 ..,

當妳飲用由男生 (陌生人or女生)提供的飲料時,請多警覺及多留心 。



一種 黃體激素製劑 (Progesterex) 這種藥基本上是一種 避孕藥丸 ,

這個藥現在被強暴加害者在舞會上用在強姦受害者以及 使受害者避孕。


而她說 這個藥只由 獸醫 開立在使 大型動物避孕之用,

但我聽到這個藥被與 Rohypnol(roofies)一起當作 約會強姦藥 來使用。


被下藥的女孩在第二天早上 不會記得前一晚所發生的事情 。

現在 Rohypnol不單單被使用著。

Progesterex 在飲料中容易溶解 ,


所以強姦者不必擔憂幾個月後 ,

警檢單位以父源關係 [胎兒]來認定強姦加害者 。

但是這藥的影響並 不是暫時性的 。

Proges terex設計給馬避孕用的 ,

任何女士吃了這個藥將 一輩子無法懷孕 。

所有混蛋只要跟任何在 ' 大學唸獸醫系的朋友'拿這個藥即可遂其犯行。

它是如此地 容易取得,

而 Progesterex即將在各個校園裡 出來。


甚至在 網路上都還有人教導別人 如何使用它 。

Friday, August 13, 2010

Dijyaya ... Aug10

Property developer Dijaya Corporation Bhd has bought two parcels of prime land totalling 37 acres in Danga Bay, Iskandar Malaysia, for RM308 million.

The land is being acquired by Goldhill Quest Sdn Bhd, a joint venture between Nagasari Cerdas Sdn Bhd (a wholly-owned subsidiary of Dijaya Corp) and Global Corporate Development Sdn Bhd, owned by Iskandar Waterfront Sdn Bhd.

The RM3.8 billion investment of Dijaya Corp in Danga Bay is its another milestone in continuing efforts to promote and position Iskandar Malaysia as a premier economic zone.

The sizeable investment by Dijaya and Iskandar Waterfront will have a massive impact on the local economy.

The development in Danga Bay will include prestigious commercial, residential and leisure projects. This will include office and commercial properties, hotel, shopping complex, condominiums and a full range of world-class waterfront lifestyle projects.

Thursday, August 12, 2010

IPO ... Bjretail

Currently there are about 1150 7-Eleven stores nationwide, of which 615 stores are in the Klang Valley and 116 in Johor. Its target is to have 2000 stores within five years.

An increase in the number of stores would mean an increase in sales revenue. For FY2009 ended Dec 31, 7-Eleven achieved a sales revenue of RM1.185 billion and profit after tax of RM25.4 million.

On top of opening new stores, 7-Eleven is looking providing charged services.

The retail business is generally perceived to be highly competitive. However, 7-Eleven hast he lion’ share of the convenience store market in Malaysia due to the government’s ban on the entry of foreign convenience stores.

Apparently, about 60% of the sales in 7-Eleven stores is generated from 7pm-7am. This 7-Eleven is not competing directly with the hypermarkets and traditional sundry shops.

In short, BJRetail’s convenience stores business is in the high growth market where competition is minimal, at least for now.

Nonetheless, 7-Eleven is no the only growth story in BJRetail, in which Tan Sri Vincent owns a 51.8% stake after its listing exercise. BJRetail also sells sewing machines, home appliances and furniture under Singer brand and distributes motorcycles.

Singer provides micro consumer credit to customers who purchase its home appliances. Barely 15% if its sales are in cash. The bulk of sales is on credit and paid off in installments. The provision of credit facilities is another income stream for BJRetail.

In future consumer could become a major income avenue for BJRetail should the company manage to raise more working capital to expand such bueiness.

The company’s non performing loans represent only 4% of Singer’s total sales revenue.

Valuation …

BJRetail’s IPO price is at 50 sen per share. This implies a PER of nearly 22 times based on pro forma EPS of 2.3 sen for FY2009 ended Dec 31.

Convenience stores contributed nearly 75% to BJRetail’s revenue and 64% gross profit of rm490 million.

The valuation is steep in terms of PER, which is close to that of Parkson Holdings. The profit margin that BJRetail is slim.
RHB: 51 sen; Kenanga: 0.49; TA: 53 sen

Furthermore, the potential shareholding and earnings dilution as a result of the conversion of a chunk of icps. There are 962 million ICPS BJRetail. Than through his investment vehicle Premier Merchandise Sdm Bhd, holds nearly 92% of the ICPS while cosway owns 7.7%. The ICPS were iseud when BJRetail acquired 7-Eleven and Singer from Tan and Cosway Corp respectively.

Plans are already in place to list Berjaya Food which houses Berjaya Roasters Sdn Bhd and Berjaya pizza Co Sdm Bhd.


It has secured a RM220 million loan facility from Bank Pembangunan Malaysia Bhd to part finance the construction of two anchor handling tug supply (AHTS) vessels.

The Islamic Bai' Istisna' facility with Bank Pembangunan was signed by JM Global 3 (Labuan) Plc and JM Global 4 (Labuan) Plc.

The two vessels are expected to be ready and operational by end 2012.

JM Global 3 (Labuan) Plc and JM Global 4 (Labuan) Plc are ship operating companies jointly owned by Jasa Merin (51%), a member of the SILK Holdings Group and GMV-Jasa Sdn Bhd (49%), a unit of Global Maritime Ventures Bhd.

Global Maritime Ventures, a venture capital company, is part of the Bank Pembangunan Group.

Wednesday, August 11, 2010

UBG ... Aug10

PetroSaudi International Ltd (PSI), in a letter to UBG, said it had received in-principle approval from the relevant regulators in Saudi Arabia to enable it to acquire a stake in UBG from Cahya Mata Sarawak Bhd (CMS) and its subsidiary PPES Works (Sarawak) Sdn Bhd.

In December 2009, PetroSaudi had offered to acquire all shares in UBG Bhd for RM2.50 per share, and it would take UBG private and de-list it.

CMS had informed UBG in January 2010 that CMS’ wholly-owned subsidiary Concordance Holdings Sdn Bhd and 51%-owned PPES planned to accept the offers from PetroSaudi to acquire all the 25 sen shares they held in UBG as at Dec 29, 2009 totalling 37.21% subject to the approval of their shareholders and the relevant authorities.

At RM2.50 per share, the stake would cost PetroSaudi RM465.53mil.

PetroSaudi, which is buying the stake through wholly-owned unit Javace Sdn Bhd, was awaiting the formal documented approval, which is expected to be received by mid-September 2010.

As at the date of this announcement, the company (UBG) has yet to receive any notice of takeover from PetroSaudi or Javace Sdn Bhd.

PetroSaudi, an investment holding company with its head office in Saudi Arabia, focuses on energy, construction and other strategic projects in various regions around the world, leveraging on its in-depth knowledge of complex global systems that define the various industries.

It was reported that CMS would gain RM353.9mil from the sale of its stake in UBG, and up to RM352.5mil had been earmarked for potential investment capital to take advantage of business opportunities that Sarawak and the Sarawak Corridor of Renewable Energy (Score) had to offer.

Genting ... Aug10

Its subsidiary Genting New York LLC (Genting NY) has won the bid to develop and operate a video lottery facility at the Aqueduct Racetrack in New York with a proposal that includes US$380 million (RM1.2 billion) as an upfront licensing fee.

New York Lottery announced its evaluation committee had unanimously recommended to the New York governor that Genting NY be awarded the aqueduct racino project.

The recommendation will have to be approved by the New York governor, the temporary president of the New York State Senate and the speaker of the New York State Assembly before the video lottery licence can be awarded.

Genting NY would work closely with the relevant parties, including the operator of the Aqueduct Racetrack, the New York Racing Association, and expected to open the preliminary phase of Resorts World New York six months after the award of the licence.

The video lottery facility, to be called Resorts World New York, would contain 4,500 electronic slot machines or video lottery terminals.

Resorts World New York would include a grand entrance featuring a three-storey atrium with a water show, enclosed skyway pedestrian bridge linking to the mass transit system of New York, 450-seat two-storey festive casual dining promenade and parking facilities for 7,000 cars, including a 2,200-car garage.

Industry observers say the state may approve the bid sooner rather than later given its dire financial state, but there could be further hiccups although a state judge had earlier dismissed the lawsuit by Aqueduct Entertainment Company (AEC), which was the previous winning bidder whose licence application was later denied. AEC planned to seek an injunction that would block final approval by state leaders.

GenM’s proposal had entailed a phased development process that would begin with the opening of a preliminary phase of the facility equipped with 1,600 video lottery terminals six months after approval.

GenM had committed to invest a capital expenditure (capex) of US$41 million within the first 10 years of operations for planned improvements and a minimum of 0.5% of gross gaming revenue for maintenance capital expense.

Tuesday, August 10, 2010

Kretam ... Aug10

Plantation company Kretam Holdings Bhd’s major shareholders have extended an unconditional takeover offer to acquire all the remaining shares they do not already own at RM1.43 cash per share, after they had acquired more shares and converted their irredeemable convertible unsecured loan stocks (ICULS).

For the six months to June 30, 2010, Kretam’s net profit rose 44% to RM17.89 million from RM12.45 million, while revenue grew 20% to RM64.31 million from RM53.54 million. Basic earnings per share rose to 9.62 sen from 6.69 sen.

The company has a clean balance sheet. Cash and cash equivalents stood at RM65.27 million, while total borrowings amounted to RM10 million.

As at June 30, 2010 (FY10), net assets per share stood at RM1.62, pricing the offer at 0.88 times book.

Kretam is also involved in the stockbroking business and has proposed to dispose of its securities unit, Innosabah Securities Bhd, but has yet to find a buyer.

Kretam said it had received a notice of unconditional takeover offer from the joint offerors — Nasalim Sdn Bhd, Santraprise Sdn Bhd and Lim Nyuk Sang @ Freddy Lim (LNS). Parties deemed to be acting in concert are Low Seng Lee, Lim Nyek Kiong @ Lim Nyuk Min, Lim Nyuk Chong @ Lim Nyuk Siong and Lim Nyuk Foh. LNS is Kretam’s executive director and group CEO.

Kretam’s board had deliberated on the notice and did not intend to seek an alternative takeover offer. It will appoint an independent adviser to advise its independent directors and shareholders on the offer.

The joint offerors served notices of conversion of a total of 57.04 million ICULS, representing 23.33% of Kretam’s enlarged share capital, while LNS acquired a total of 4.7 million shares from Lai Ai Fong and Pang Fong Tsao, representing a 1.92% stake.

The transactions raised the joint offerors’ stake in Kretam to 50.11% from 32.64% previously. LNS’ direct interest in Kretam rose to 41.48% from 22.57%, triggering the 33% threshold for a mandatory general offer.

In their notice to Kretam, the joint offerors intended to maintain the company’s listing status and, in the event the minimum public shareholding spread was not met, they would explore various options to rectify the shortfall.

The takeover offer for Kretam follows a spate of privatisation moves, although Kretam’s major shareholders are planning to keep the company listed.

EPIC/AZRB ... Aug10

Sources say state controlled Terengganu Inc Sdn Bhd is planning to privatize its
40.13% unit EPIC.

Terengganu Inc has approached some of the other larger shareholders of EPIC to buy their equity, which will trigger a MGO and lead to a privatization.

Other than Terengganu Inc, the other substantial shareholder of EPIC is Terengganu based construction outfit AZRB which has a 21% stake in EPIC. Amanahraya Trustees Bhd, meanwhile holds 4.7% stake for Public Bank’s Bhd Islamic Opportunities fund and Islamic Treasuries Fund. Great Eastern Life Assurance Bhd holds another 4.5% equity. Another notable shareholder is private company TIS’ ATA’ Ashar Sdn Bhd, which has 3.85% stakes. Other shareholders all have below 1% shareholding in EPIC.

Details such as the pricing of the offer were not available. EPIC however had net asset per share of RM2.04 as at end June 2010.

EPIC is a potential privatization candidate is based on its strong cash flow and balance sheet appeal.

However the success of the privatization will depend on AZRB. It is noteworthy that AZRB bought into EPIC in Oct 2007 at rm2.40 a share, forking out some RM82 million for LTH’s 34.4 million shares. Since the acquisition from LTH, AZRB has marginally increased its stake to 21.3%.

However, AZRB incurred borrowings in acquiring LTH’s shares, which means the company has to make interest payments, which will nudge up its holding cost. The privatization of EPIC is a very political issue. AZRB is a Terengganu based contractor, and it is also known to have political clout, so it is not such ac easy task if AZRB is not agreeable.

It has been buying back its shares since end May 2010 and has close to 1.5 million treasury shares.

For six months ended June 2010, EPIC posted a net profit of RM24.5 million on the back of RM109 million in revenue.

During six months in revenue, EPIC had a net cash flow from operating activities of RM22.4 million, while its deposits, cash and bank balances amounted to RM91.6 million. The company’s short term borrowings amounted to RM6 million while its long term debt obligations were RM19.7 million. Its shareholders funds stood at RM356 million as at end June 2010.

News of EPIC being privatized had been around since 2009.

EPIC main assets are its 99.1% stake in Pangkalan Bekalan Kemaman Sdn Bhd, which has its mainstay in supply base operations for oil and gas industry, and Konsortium Pelabuhan Kemaman Sdn Bhd in which it has 61% shareholding.

Konsortium Pelabuhan Kemaman operates the East Wharf and Liquid Chemical Berth at Kemaman Port on a 60 year concession, which started in Oct 2006. The remaining 39% in Konsortium Pelabuhan Kemaman is owned by construction giant IJM Corp Bhd.

EPIC has purchased 2.6 million of its own shares, paying almost RM4.3 million in the buyback exercise.

The top 30% shareholders controlling more than 78% of its share base.

Monday, August 9, 2010

XinQuan ... Aug10

It has been actively seeking new partners for some time now, is finalizing talks with at least one local party to take up a substantial stake in the company but no deal is impending at the moment.

Currently, the top 10 institutional funds with shareholdings in Xingquan include OTH, KWAP, the EPF, Prudnetial. Tai Zhen Xiang Holdings Ltd is the largest shareholder with a 58.43% stake while LTH is the second largest with a 5.08% stake.

Up to 3Q2010 ended march, its sales and net profit posted healthy growth. In nine months period, net profit rose to RM84.18 million.

It intends to keep its promise of paying out as dividends between 10% and 20% of its current year earnings.

BRDB/Mieco ... Aug10

BRDB is believed to be in talks with a Chinese company to hive off its 56.76% stake in loss making chipboard manufacturer Mieco.

However, details of the Chinese party or the discussions, which are said to be still preliminary, are not available.

It is no secrets that BRDB has been looking to divests its interests in Mieco for some time now to concentrate on its more lucrative property development business.

BRDB will sell if the price is right.

Mieco’s net asset value per share as at March 31, 2010, was rm1.52. The company’s cash and cash equivalents stood at rm1.47 million while borrowings totaled RM169.9 million. It posted a net profit of rm1.4 million for the quarter from a net loss of rm22.6 in the previous corresponding period.

If BRDB is successful in divesting its stake, the disposal could pare debts and fund future projects. As at March 31, 2010, it had cash and cash equivalents of RM144.36 million while total borrowings stood at RM801 million, The company’s net debt of rm657.58 million translates into a gearing ratio of 40%.

Having off its stake in Mieco will enable BRDB to focus on what it does best – property development, which accounts for the bulk of BRDB’s earnings.

For FY2009, all of brdb’s profit came from the property segment as its manufacturing arm, housed under Mieco, made a loss of RM14.3 million.

The BSC will be one of the main earnings drivers going forward as rents are expected to be stronger.

Sunday, August 8, 2010


作者的妻子因為意外事故離開我身邊已經四年了,我想,妻子留下不會做任何家事的我和孩子,她的心有何等難過呢?我也因為無法兼顧父 母雙親的角色而感到挫折。有一天我為了出差,清晨趕出門,無法將孩子打點好就得離開家,正巧前一天有剩下的飯,我熱了蒸蛋,向還沒有睡醒的孩子交代一聲, 就出門去了。

為了 照顧好孩子飲食三餐的事,我也無力把自己的工作做好。有一天晚上回到家,我只是很簡短地和孩子打個招呼,就因為身體疲累,不想吃晚餐,脫掉西裝之後就直接 往床上躺下。就在那個時候,砰的一聲,紅色的湯汁跟泡麵瞬時弄髒了床單和被單,原來有碗泡麵在棉被裡!這小子真是的,說時遲那時快,我即時拿起一個衣架, 跑出去,往正玩著玩具的兒子的屁股就打,因為我實在是太生氣了,所以不停地打他。但就在這個時候,他邊啜泣邊說了一段話,使我停了下來。

兒子 告訴我說:「飯鍋裡的飯早上已經吃完了,晚餐在幼稚園吃了,但是到了晚上,? 赤阪暀ㄕ^來,我就在櫥櫃的抽屜裡找到了泡麵。 可是我想到爸爸說不能亂動瓦斯爐,所以我就打開洗澡的水龍頭,用熱水泡了泡麵,一個自己吃,另一個想留給爸爸吃。因為怕泡麵涼掉,所以我就把它放在棉被 裡,等你回來。可是因為我正在玩向朋友借來的玩具,所以忘了跟爸爸講。」

我不 想讓兒子看到我在流淚,所以衝到洗手間,將水龍頭打開,大聲地哭。過了一陣子之後,我打起精神來,一面哄著兒子,一面也在他屁股上擦藥,讓他上床睡覺。當 我清理好泡麵弄髒的床單和棉被後,打開兒子的房門一看,發現他仍舊發出哭泣聲,手裡還拿著媽媽的照片。我把頭靠在房門站了許久,看著這一幕。
自從 在一年前發生這件事之後,我為了扮演好媽媽的角色,更加用心地去照顧他。現在兒子快七歲了,不久後就要從幼稚園畢業,進入國小讀書。慶幸的是,兒子在這段 時間毫無陰影,很開朗地成長。

就在 不久前,我再一次打孩子,因為幼稚園來電話說,兒子沒? 野h學校,我心裡覺得很不安,所以早退回家,在整個社區裡大聲地喊他的名字,卻是 遍尋不著。後來在文具店的門?f,看見他站在電玩的前面,於是我很生 氣,又開始一直打他。兒子並沒有說出任何的解釋,只說了聲對不起。後來我才知道,原來剛好是幼稚園要邀請媽媽去 看才藝表演的日子。

發生 這些事的幾天後,兒子回家說,他在幼稚園裡學了寫字,從此他經常關在自己的房間裡不出來,很認真地寫字。我看到兒子這個樣子,想到妻子在天國也一定會因為 看到他這樣而微笑,我就無法忍住淚水。

時間 很快,又過了一年,到了冬天,街頭上都在播放著聖誕節的歌曲,我的兒子卻又闖了一個禍。我正要下班的時候,接到一通社區郵局的電話,說我兒子把一綑沒有寫 地址的信,惡作劇地放在郵筒裡。每年到了年底,正是郵局最忙碌的時候,所以這對他們造成很大的困擾。雖然我已決定不再? 換臚l,但在急忙趕回家後,叫了兒子來,我又忍不住痛打他一頓。兒子這一次只是說他做錯了,卻沒有講出任何理由。我把他推到一個角 落,不管了,自個兒跑到郵局領回那一綑惡作劇的信。我把信丟到他眼前說:「你為什麼要這樣惡作劇?」兒子哭著回答說:「這些信是我要寄給媽媽的。」

當時 我的眼眶紅了起來,心裡很激動,但是因為在兒子面前,所以我盡量隱忍住沒有表現出來。我接著問他:「那麼,為什麼一次寄這麼多信呢?」兒子回答說:「以前 我要把信投進去的時候,因為個兒太矮,所以沒辦法投入,但是最近我再去郵筒時,已經搆得到了,所以我就把以前沒有寄的,一次全部都投進入了。」
我聽 了以後,心中一片茫然,不知道該對孩子說什麼話。過了不久以後,我就跟他說:「媽媽現在在天上,以後你寫完信,把信燒了,就能送到天國去。」等孩子睡著之 後,我到外面燒了那些信。我很好奇到底孩子想跟媽媽說些什麼,所以讀了其中的幾封信。

而當 中有一封信攪動了我的心。

親愛 的媽媽:
我很 想念你!媽媽,今天在幼稚園有才藝表演,但是因為我沒有媽媽,所以沒有去參加,我也沒有告訴爸爸,怕爸爸會想念媽媽。爸爸到處去找我,但我為了讓爸爸看到我很開心的樣子,所以故意坐在電動玩具 面前,雖然爸爸罵我,但是我到最後也沒有告訴他原因。媽媽,我每天都看到爸爸因為想念媽媽而哭泣,我想爸爸也跟我一樣,很想念媽媽吧!但是,媽,我現在已 經記不清楚你的臉。媽媽,請你讓我在夢中,再一次能夠看到你的臉,好嗎?聽說把想念的人的照片放在懷裡睡覺,就會夢到那個人。可是,媽媽,為什麼你沒有出 現在我的夢裡呢?」

讀完 這封信以後,我就開始嚎啕大哭。到底什麼時候,我才能填補妻子的空位呢?

給 已經結婚的女同事:
不要加太多班,工作做不完,一定是公司的某些地方出問 題了,一定要將問題反應給妳的老闆,一直加班也不見的有用的,請務必要照顧自己的身體,才可以好好疼惜妳的小寶貝。

給 已經結婚的男同事:
不要喝太多酒,不要抽太多煙,請問我們的生意,我們的 客戶,有比我們的身體重要嗎?
一定要想一想,有沒有辦法做到客人非我們不行,我們的 差異化在哪裡,我們是否真的懂客人的心,這比拼命喝酒,還重要,請務必要照顧自己的身體,才可以好好疼惜妳的? p寶貝和你的愛人。

給 還沒有結婚的男同事和女同事:
美其實是從愛自己的身體開始 --(蔣勳,身體美學)。
無入而不自得 -- (孔子)。
妳/你們一定要很自在,工作才能做的好,如果工作讓你/妳們的心情做的很辛苦,代表的是我們的公司不夠聰明,那也是公司什麼地方不對了,要勇敢的說出 來,不要讓不聰明的工作與老闆,傷害了妳/你們的身體。

Saturday, August 7, 2010



“我爹。” “你爹是干什么的?”


“报告老师,我是张德开的孪生弟弟,我叫张不开。” “这是谁给你们起的名?”

“报告老师,我姓区,,这个字念”欧”,,我叫区夜,,哦也,,,这是我妈给我取的名,她说生我 的时候刚好打爆了一个电脑戏。”

“报告老师,甘妮娘!” “你怎么骂人啊?!”



“老师,你去死!” “什么?你说什么?!”

“老师,下回说。” “为什么要下回说,你现在就说!”


Friday, August 6, 2010

THPLANT ... Aug10

S & P Results Review & Earnings Outlook

• THP’s 2Q10 net profit dropped 57.2% QoQ. Higher production costs (due to increased manuring activities in 2Q), a drop in sales volume (as production fell due to seasonal factors), lower management fees and a higher tax rate contributed to the profit decline.

• YTD net profit of MYR25.4 mln is up 37.9% YoY, driven by higher palm oil prices and nonrecurring charge for fair value adjustment of ESOS made in 2Q09. This accounts for 33.7% of our full-year forecast, but we view the results to be within our expectations.

• We project higher earnings in 2H as production is expected to pick up due to seasonal factors and improving yields. Nonetheless, FFB production for the full year is likely to decline by about 5% due to the weak production to date. We expect production growth to resume in 2011, driven by its young palms. THP has 36,444 ha of planted oil palms, as at end-2009, of which 33.7% are still immature.

• We expect palm oil prices to remain firm, trading at between MYR2,400/ton and MYR2,600/ton in 2H10 (vs. an average of MYR2,549/ton in 1H and MYR2,260/ton in 2009) in view of the still good demand for palm oil and the current low stock level. The development of La Nina, which brings heavy rainfall, would be a bullish factor for palm oil prices should it prolong until end 2010/early 2011.

Recommendation & Investment Risks
• We maintain our Buy call with an unchanged 12-month target price of MYR1.80.

• THP’s above-average operating margins, high ROEs and good dividend yield will support share price outperformance, in our opinion. Based on THP’s dividend policy of distributing 50% of its net profit, we project a gross DPS of at least 10 sen for 2010 (yield of 6.5%).

• Our target price is based on a PER of 10x projected earnings for 2011 and includes our projected dividend. The assigned multiple is equivalent to the stock’s one-year average forward PER.

• Risks to our recommendation and target price include palm oil price volatility, which could be caused by: (i) stronger-than-expected palm oil and soybean oil production due to good weather; (ii) slower imports of palm oil from the world’s largest vegetable oil buyers, China and India, given the high imported vegetable oil stocks, currently; and (iii) crude oil price movements.

NHFATT ... Aug10

S&P Results Review & Earnings Outlook

- NHF’s 2Q10 results were broadly in line with our forecasts. Net profit for the quarter of MYR8.4 mln (+31.3% YoY and QoQ) brought cumulative 1H10 net profit to MYR14.8 mln (+23.5% YoY) that reached 50.5% of our 2010 estimate.

- Revenue for the period of MYR110.4 mln was 14.3% higher, on the back of higher trading and manufacturing revenue, reflecting the improvement in consumer sentiment and the overall domestic economy, in addition to increased export sales. Trading and
manufacturing revenues were 10.2% and 12.2% higher, respectively.

- EBIT margins for 1H10 improved to 15.2% from 14.6% in 1H09, driven by higher operating leverage and higher income from the sale of steel sheet scrap.

- Finance costs were within expectations but effective tax rates were lower than expected due to reinvestment allowances and the over provision of deferred tax for 2009.

- No dividends were declared in respect of the June quarter.

- We maintain our 2010 and 2011 profit estimates.

Recommendation & Investment Risks

- We maintain our Buy recommendation but lift our 12-month target price to MYR2.80 (from MYR2.60).

- Our target price is derived by ascribing a 7.0x (from 6.5x) target PER to 2011 earnings (unchanged) and adding the forecast net DPS. The target PER remains within the 6x-11x PER range of auto parts companies within our coverage with the higher target multiple reflecting higher peer valuations.

- Nonetheless, we still consider NHF to be an attractive investment given its undemanding valuations with 2011 PER at just 6.1x. NHF has traditionally enjoyed relatively inelastic demand given its focus on the replacement market and ability to consistently improve its competitiveness and operating efficiencies. NHF’s balance sheet remains under-leveraged with a net gearing of just 7.7% at end-June
2010. We also expect NHF to be able to comfortably pay a gross DPS of at least 11 sen (4.6% gross yield).

- We expect the market to re-rate NHF higher when it shows progress of consistently being able to develop new export markets to expand its scale of business.

- Risks to our recommendation and target price include unexpected increases in steel and plastic resin raw material prices, other operating costs and heightened competitive pressures in the marketplace.

Thursday, August 5, 2010

UNISEM ... Aug10

Inet research report;

- Unisem (M) Berhad (Unisem) released its 2QFY10 results and held an analysts’ briefing to provide an update.

- Both turnover and net profit increased by 40.8% and 100.3% to RM359.5m and RM48.1m each.

- The strong results were underpinned by increased sales volumes across the board. This resulted in higher utilisation and thus better profit margins, which managed to offset the negative impact of a stronger Ringgit.

- On a sequential basis, the growth trend continued by another 9.2% qoq in 2QFY10. Due to strong demand, all divisions experienced growth with Unisem Ipoh and Chengdu each growing by 8% and 57% qoq. Unisem Batam and UAT also rose by 12% and 20% qoq.

- For the 1HFY10, while turnover grew by 58% to RM688.8m, net profit surged more than 100% to RM89.7m. In addition to the increase in overall sales volumes, 1HFY09 was also impacted by RM23.1m net loss incurred in 1QFY09.

- Backed by sustained recovery in the semiconductor sector and forecast by customers, management has guided for 5-8% sequential growth in 3QFY10. Utilisation rate remains high at mid-80% for all division.

- In 2QFY10, Unisem Ipoh, Chendu and Batam were profitable while UAT incurred a small loss. Backed by strong take-up rate of bumping services for its capacity expansion by customers, UAT is expected to be profitable in 3QFY10.

- Unisem Chengdu, currently running at full capacity, continues to be the future growth driver. Plans are underway to commence facilitisation work on Phase 2A in 3QFY10, with completion targeted by 1QFY11. The expansion of floor space for Unisem Ipoh was completed in end Jul-10. However, due to limited space for major expansion, future growth will come from change of product mix to highermargin
packages. Driven by strong demand of bumping services, WLCSP and wafer test will continue to grow in line with UAT’s bumping expansion. Unisem Mauritius, positioned as the hub for automotive customers, continues to see higher demand from automotive customers. Growth is expected to come from Bosch and Melexis

- The proposed a bonus issue (3 for 10) was completed on 2-Aug-10, bringing the enlarged shares capital to 674.2m shares.

Inet research Recommendation:-
- We have upgraded our earnings forecast by 20% to account for the better-than-expected profitability. We are maintaining our Buy recommendation for its cheap P/E of 6.8x for FY11 and earnings visibility due to capacity shortages.

Perstima ... Aug10

It views the fluctuation of raw material prices brought about by a new pricing mechanism for iron ore, which commenced this year, and cheaper imports from China, as the biggest challenges for the group going forward.

However, the company hoped to mitigate the price fluctuation risk, after one of its main black steel plate suppliers, JFE Steel Corp Ltd of Japan, commenced production from a new facility in Japan at the end of 2010.

Black steel plate is the main raw material used in manufacturing steel plates, which in turn is mainly utilized for the canning of edible products.

Tin plate exports from China are expected to grow by 33% this year to 600,000 tonnes from 450,000 tonnes in 2009. As Chinese manufacturers are new in the export market, their selling prices are very cheap. However, its managed to keep most of our established customers due to the perceived lower quality of Chinese tin plates.

Perstima is also looking to maintain the record dividend payout of 40.5 sen in the financial year ended March 31, 2010 (FY10), as the company has no major capital expenditure (capex) in the coming year.

It has been paying out dividends of 20 sen per share for three consecutive years since FY07.

Some of the main shareholders of Perstima that are set to benefit from the high dividends are Versalite Sdn Bhd, which has a 32.84% share, and JFE Shoji Trade Corp from Japan, which holds a 13.95% stake. Perstima deputy chairman Hiroshi Kume and non-executive director Rin Nan Yoong control Versalite with 49.99% and 50% stake respectively.

Perstima has sufficient internal funds to finance around RM30 million in capex for the next two years. The company’s cash reserves stood at RM86.03 million as at June 30, 2010, while total borrowing was reduced to just RM9.77 million from RM66.62 million a year earlier.

More than 80% of the company’s production in Malaysia is sold locally, including to major food canning companies such as Can One, Kian Joo and Nestle Malaysia Bhd while the remaining 20% is exported to countries such as Iran, Bangladesh and Sri Lanka.

For its first quarter ended June 30, 2010, its net profit surged 145% year-on-year to RM24.25 million from RM9.9 million, on the back of a 4.3% increase in revenue to RM202.23 million from RM193.87 million.

The company attributed the rise in revenue to “timing differences between the selling price and the raw material price changes coupled with better contribution” from its subsidiary companies.
Earnings per share was higher at 24.42 sen from 9.97 sen previously while net assets per share stood at RM3.22 from RM2.97 previously.

Wednesday, August 4, 2010


MISC Bhd could use the proceeds from the IPO of its engineering unit, Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE), for further expansion such as acquiring more very large crude carriers (VLCC) for its petroleum business.

MISC could leverage on its synergies with VTTI  BV (provider of storage space for fossil fuels), in which it recently acquired a 50% stake, and fund MMHE’s expansion plans, including increased activities in Turkmenistan .

The dilution to MISC’s income from MMHE will be minimal.

The RM300 million cash dividend from MMHE and the potential RM1.6 billion raised from the IPO would reduce MISC’s gearing level from 0.37 times to 0.29 times.

MISC proposed to offer 25.5% of MMHE pursuant to the IPO by the fourth quarter of 2010. Under the IPO, MISC would sell 9.1%, or 146 million shares, to institutional investors, and MMHE will propose a public issue of 16.4%, or 262 million shares.

MMHE was among MISC’s key earnings contributors and the company had grown to become a significant contributor in recent years by helping to cushion the impact of decelerating earnings from other divisions, especially losses at MISC’s liner division.

In the preceding year (FY10), MMHE was one of the leading revenue contributors of MISC group, accounting for revenue of RM6.1 billion and PAT (profit after tax) of RM284.1 million.  The thin margins in FY3/10 were mainly due to a large recognition of procurement activities that fetched thin margins during the financial year.

It is believed that margins were likely to be higher going forward as the unit benefited from the potential upturn in the oil and gas cycle on the back of sizeable orderbook replenishment.

MISC’s cost of investment in MMHE from Oct 11, 1991 to Jan 14, 2008 stood at RM303.8 million, representing an investment cost of about 22.7 sen per MMHE share.

The listing exercise might involve the revaluation of some key assets owned by MMHE, which would translate into a one-off exceptional gain for MISC.

The offer for sale of 146 million shares by MISC would also give rise to a disposal gain which could amount to RM655 million (a gain of RM4.48 per share based on the IPO price of RM4.71).

While this type of profit is usually categorised as an exceptional gain by the investment community, this would eventually unlock MISC’s long term investment and bump up its group shareholders’ funds and NTA per share.
Valuations …
In most cases, holding companies with various businesses float some of their units to unlock value in the parent company. This is especially when a holding company believes that the value of its subsidiaries is not reflected in the holding company.
However, in MISC Bhd’s case, its proposed listing of MMHE, which is currently a wholly owned unit. The exercise was announced by Najib as part of the government’s efforts to drive liquidity in the capital markets.
With the listing of MMHE, MISC will be able to unlock the value of MMHE for shareholders. Not only will MISC shareholders get RM300 million in dividends before the listing, MISC will gain from the disposal of a stake in MMHE via the IPO. There is also an asset revaluation exercise that will benefit MISC.
Although MISC will get some cash from the listing, it will not make an impact on the shipping giant considering it already has RM7.8 billion in its coffers.
From the PER and earnings per share enhancement point of view, MISC is not getting a good deal from the proposed listing of MMHE. At closing price of RM8.80, MISC is already trading at a PER of more than 49 times. Even if MISC hits RM10, based on forecast FY2011 earnings, MISC will still be trading 22 times PER.
MISC has not announced MMHE’s IPO price and PER. However, estimates shows that upon listing, MMHE is likely to be valued lower than MISC. This is based on industry trends that value oil and gas stocks at about 16 times PER.
Research houses is valuing MMHE in its entirely at rm4.8 billion based on MMHE’s net profit forecast of rm300 million with a one year forward target PER of 16 times. The valuation is already at the upper end of its benchmark one year forward target PER band for the oil and gas sector to reflect MMHE’s strong fundamentals and ultimate controlling shareholder, which is Petronas, the national oil company.
Technically, if MMHE is indeed floated to enhance its value, it ought to be trading at similar or higher PER. However, from the PER perspective, MMHE is more likely to face value erosion than enhancement from its listing exercise.
The listing does not look good for MISC either. MISC’s high valuations show that the market has already priced in MMHE. This means there is not much value to be added into the stock following the listing.
Also, MISC’s EPS is likely fall following the listing of MMHW. This is because MISC will no longer own 100% of MMHE and will not be able to equity account MMHE’s businesses into is consolidated group earnings.
MMHE’s oil and gas and heavy engineering businesses are the jewel in MISC’s crown. Its financial summary shows that MMHE contributes over 40% to MISC’s net profit in FY2010. MMHE also has an order of more than RM6 billion as at Dec 31, 2009.
MMHE’s earnings contribution to MISC has become even more important at a time when MISC is still weighed down by weaker earnings in its other divisions, shipping and containers.
However, these gains are one-off in nature and MISC shareholders effectively get less indirect exposure in MMHE – 74.5% stake, instead of 100% previously.