Kulim/Sindora ... May 2008

What’s Up?

Kulim (Malaysia) Bhd’s planned takeover of the remaining 28.96%, or 27.81 million Sindora Bhd shares for RM47.83mil, suffered a setback after the latter’s independent adviser, Affin Investment Bank Bhd, recommended that Sindora shareholders reject the offer of RM1.72 per share.

Affin Investment said it would be better if the shareholders retain their shares as the group’s profitability had been on an increasing trend from 2003 to 2007, except for 2005. It said there was more upside for Sindora’s operations, which included the oil palm plantations. Additionally, the net assets of Sindora did not capture any enhancement from a revaluation of the plantation assets of Sindora.

In this regard, the offer price may not be fully reflective of the inherent value of the Sindora group assets and prospects. It also said the offer price translated into a net price-to-earnings (PE) of 9.13 times, lower than the average PE of comparable companies of 9.26 times.

Sindora’s board of directors, except the interested directors, also concurred with Affin Investment’s decision and recommended that shareholders reject the offer.

On the offer price, the shares traded between RM1 and RM1.73 over the last 12 months (May – May 2008). The highest price of RM1.73 was on April 15 2008 when Kulim extended the mandatory take-over for the remaining Sindora shares.

On Nov 13 2007, Kulim acquired 62.01%, or 59.53 million Sindora shares, from Johor Corp and Johor Capital Holdings Sdn Bhd for RM102.39mil, or RM1.72 per share. Kulim and parties acting in concert collectively held 71.03%. Kulim then extended the offer to acquire the remaining shares of Sindora, which is involved in timber and oil palm plantations. The acquisition would expand Kulim’s plantation assets by 20.1%, or 6,311ha, to 37,733ha.

Sindora’s plantation assets had a market value of RM201mil, or RM81.2mil above the book value of RM119.8mil. However, the market value was not included in its audited accounts for the financial year ended Dec 31, 2007. Based on the market value, Sindora’s adjusted net asset share would be RM2.72 while the adjusted price-to-book multiple would be lower at 0.63 times compared with 0.92 times, it said.

Wijaya ... May 2008

What’s Up!

WIJAYA Baru Global Bhd has signed a memorandum of understanding (MOU) with a Vietnamese authority to bid for infrastructure projects worth an estimated US$3 billion (RM9.8 billion).

The elevated highway, flood mitigation and water treatment plant will be undertaken on a build-and-manage basis, while the solid waste treatment plant and garbage collection projects will be carried out on a build-operate-transfer. The potential jobs in three districts in Ho Chi Minh City include the construction of an elevated highway, flood mitigation, a water treatment plant, solid waste treatment and garbage collection.

It is conducting a viability study, to be completed by the year-end (2008), on the projects. The projects will be nothing less than US$3 billion. They have the first right of refusal for the projects. If Wijaya Baru finds the projects viable, it will look for a Vietnamese partner and hold the majority stake in the formation of a joint-venture company.

Its 45 per cent associate, Wijaya Baru Sdn Bhd, is expected to be the main sub-contractor of a RM300 million flood mitigation project in the East Coast. Wijaya Baru expects to receive up to 80 per cent of the RM300 million job. They have signed an agreement with a friendly party who has been given a letter of intent for a flood mitigation project in the East Coast. A letter of award is expected to be given in the next two weeks to 30 days.

The party has carried out all the designs, finished all negotiations and sent them to the Ministry of Finance and is awaiting the Letter of Award. The flood mitigation project, expected to commence in June 2008, will take about three years to be completed.

Meanwhile, Wijaya Baru (through its associate) is expected to complete the RM340 million flood mitigation project awarded to it in August 2007 by February/March 2009.

They are also talking to the relevant authorities for the second phase of the Selangor flood mitigation that we are carrying out right now. They have started doing the design. They have been told to come out with the technical proposal on the areas that they need to look at to address the flood problems in the lower Klang Valley. Expecting the news on the award of the project with an estimated value of RM1 billion, to be announced later 2008.

To solve the problem at the Sungai Damansara catchment, you need to spend a minimum of RM1 billion to have 100 years of protection. Wijaya Baru also saw opportunities in Pahang, Kedah, Johor and Malacca.

They want to specialise in flood mitigation projects. The company, which derives most of its revenue from timber, anticipates a large portion of its profits in 2008 to come from infrastructure projects.

Wijaya ... May 2008

What’s Up!

WIJAYA Baru Global Bhd has signed a memorandum of understanding (MOU) with a Vietnamese authority to bid for infrastructure projects worth an estimated US$3 billion (RM9.8 billion).

The elevated highway, flood mitigation and water treatment plant will be undertaken on a build-and-manage basis, while the solid waste treatment plant and garbage collection projects will be carried out on a build-operate-transfer. The potential jobs in three districts in Ho Chi Minh City include the construction of an elevated highway, flood mitigation, a water treatment plant, solid waste treatment and garbage collection.

It is conducting a viability study, to be completed by the year-end (2008), on the projects. The projects will be nothing less than US$3 billion. They have the first right of refusal for the projects. If Wijaya Baru finds the projects viable, it will look for a Vietnamese partner and hold the majority stake in the formation of a joint-venture company.

Its 45 per cent associate, Wijaya Baru Sdn Bhd, is expected to be the main sub-contractor of a RM300 million flood mitigation project in the East Coast. Wijaya Baru expects to receive up to 80 per cent of the RM300 million job. They have signed an agreement with a friendly party who has been given a letter of intent for a flood mitigation project in the East Coast. A letter of award is expected to be given in the next two weeks to 30 days.

The party has carried out all the designs, finished all negotiations and sent them to the Ministry of Finance and is awaiting the Letter of Award. The flood mitigation project, expected to commence in June 2008, will take about three years to be completed.

Meanwhile, Wijaya Baru (through its associate) is expected to complete the RM340 million flood mitigation project awarded to it in August 2007 by February/March 2009.

They are also talking to the relevant authorities for the second phase of the Selangor flood mitigation that we are carrying out right now. They have started doing the design. They have been told to come out with the technical proposal on the areas that they need to look at to address the flood problems in the lower Klang Valley. Expecting the news on the award of the project with an estimated value of RM1 billion, to be announced later 2008.

To solve the problem at the Sungai Damansara catchment, you need to spend a minimum of RM1 billion to have 100 years of protection. Wijaya Baru also saw opportunities in Pahang, Kedah, Johor and Malacca.

They want to specialise in flood mitigation projects. The company, which derives most of its revenue from timber, anticipates a large portion of its profits in 2008 to come from infrastructure projects.

CAB ... May 2008

What’s NEXT!

It wants to expand its presence in Pakistan and is eyeing the emerging markets in the Middle East to increase the revenue contribution of its processed food division business.

The group already exported its processed food products to the US, Europe, and Pakistan. It will enter the Middle East in 2008..

The processed food division accounted for about 15% of its RM442mil revenue for the financial year ended September 2007. By 2009, we expect its revenue contribution to increase to about 30%. It expects Pakistan to generate the bulk of the revenue for this division in 2008, due to the rising standard of living in the country.

CAB owns and manages three facilities manufacturing processed food products, located in Segambut, Kuala Lumpur; and Nibong Tebal and Air Itam in Penang. The facilities manufacture value-added seafood, dim sum and burger products.

On its poultry business, the group expected the prices of broiler meat to remain stable in 2008.

On its new business venture under the broiler division, the group’s grandparent stockbreeding farm in Kedah would start production in June 2008.

Jadi Imaging ... May 2008

What’s NEXT!

Jadi Imaging Holdings Bhd, a manufacturer of toners, is expected to spend some RM20mil as capital expenditure in 2008, which would go towards the setting up of sales and distributorship in the United States and Europe. The group would also add another line for colour toner production, which is expected to start operation by July 2008.

The group planned to strengthen its position by appointing distributors in Europe and the United States to increase its revenue and market share in those two markets.

For the financial year ended Dec 31, 2007 (FY07), the group exported its toners to 41 countries, the bulk of which went to Asia. The company also plans to increase its colour toner production in view of increasing demand since it started producing colour toner in late 2006.

For the whole of 2007 the group produced 3.5 tonnes of colour toner but in May 2008 it produced seven to eight tonnes of toner to cope with the rising demand.

The group may see a squeeze in profit margins owing to the depreciation of the greenback against the ringgit as most of its exports were earned in US dollars. Furthermore, the appreciation of the Japanese yen against the ringgit would also increase production costs as resin, the raw material to produce toner, is imported from Japan.

Nevertheless, the group hoped the increase in demand for colour toner would be able to mitigate these two effects on the group bottom's line in 2008.

Wong Engineering Corp Bhd ... May 2008

Wong Engineering specialises in providing design, manufacturing and integration of mechanical and electrical solutions embedded in the enclosures.

What’s NEXT?

It is poised to receive a boost from its metal enclosures designing and manufacturing business. A combination of factors from the group's strategic alliance with Amada Co Ltd, a new customer base, and growing investments in the medical industry in the Asia Pacific, provide grounds for a positive evaluation of the group's performance over the next two years.

*** In October 2007, Wong Engineering formed a partnership with the Japan-based Amada Co Ltd, a specialist manufacturer of metal processing machines. The group invested RM5mil for a new production line, using state-of-the-art metal processing technologies from Amada at its Kulim Hi-Tech Park plant ***

Amada’s technology enables them to reduce the production process for the fabrication of enclosures used in a variety of medical, semiconductor, and industrial equipment.
This helps them to lower their cost of production and speed up the delivery of the products to its customers.

Another key competitive edge of the group is the ability to provide mechanical and electrical solutions embedded in the enclosures.

Wong Engineering has also secured new customers in the medical equipment manufacturing industry. They have recently secured several new customers in Malaysia, Singapore, and Europe. The prospect of increasing its business in the medical equipment sector looks bright, as more such companies in the US and Europe are shifting their production sites to the region. This will increase the outsourcing of metal component manufacturing and designing jobs in the region.

Wong describes the group's business model as catering for those industries that demand a 'low volume, but high-mix of enclosures. Prior to 2006, they were involved in metal stamping of various metal components used in the general and electronic industries.

In 2006, they restructure to focus on designing and fabricating metal enclosures and frames, which gives a higher margin of profitability. Initially it focuses on the production of metal enclosures and frames for telecommunication, test, and high-speed printing equipment.

They are planning to tap the oil and gas and aerospace industries.
In view of the higher cost of raw materials, the group was now (2008) working on a strategic pricing with its customers to stay competitive in the global market.


Financial Results …

The decision to diversify into the designing and fabricating enclosures propelled the group back into the black in financial year (FY) ended Oct 31, 2006. with a pre-tax profit of RM2mil on the back of RM36.8mil turnover. It recorded a pre-tax loss of RM1.6mil on turnover of RM25.7mil in FY 2005. In FY 2007, it recorded a pre-tax profit of RM1.6mil on the back of RM39mil in revenue.

For the first quarter ended January 31 2008, a pre-tax profit of RM255,000 on revenue of RM9.4mil was achieved, compared to RM1.3mil and RM9.9mil in the previous year corresponding quarter.

The lower profit is due to the stringent accounting practice of the group which requires provision for the slow moving inventory amounting to RM539,000. Otherwise, the pre-tax profit would be higher.

OSK ... May 2008

OSK Investment Bank Bhd has hired OCBC Bank (Malaysia) Bhd and Standard Chartered Bank Malaysia Bhd to arrange the sale of its RM400 million medium-term notes. In addition to being the issuer, OSK Investment Bank also acts as an arranger for the deal.

The programme has a tenure of 12 years from the date of first issue of the subordinated notes and qualify as tier 2 capital of OSK. The notes carry a long-term rating of "A3" (with a positive outlook) from RAM Rating Services Bhd.

OSK Investment Bank has a general bank rating of "A2/P1". The additional capital is required for general corporate and business purposes of OSK Investment Bank, including investments and working capital.

GFB ... May 2008

It is investing RM18mil in 2008 to expand its two corrugated packaging materials plants in Vietnam.

The Vietnamese operation was expected to contribute 65% of group revenue this year (2008). The balance 35% would come from its domestic operation compared with about 50% last year (2007).

Golden Frontier planned to list its subsidiary Alcamex Packaging Ltd in Vietnam next year (2009).

LKT Industrial Bhd ... May 2008

Since its inception in 1948 as a foundry manufacturing metal products, LKT has impeccably grown into an integrated group of companies offering a host of engineering solutions for manufacturing needs.

LKT’s integrated manufacturing network provides solutions ranging from collaborative design and development, fabrication of custom tooling and machine steel structure, plastic injection moulding, module and finished product assembly solutions, among others, to the aerospace, semiconductor, electronics and automotive industries.

It also own brands of ergonomic industrial storage systems and precision cutting tools, sold through its distribution channels worldwide.

What’s Up?
It will embark on a business restructuring and consolidation exercise in the next six months as part of its efforts to enhance its global competitiveness before moving on to expand its business into other industries such as aerospace..

Strategic measures and initiatives will be implemented to revive and address existing issues within the group with the objective of propelling it towards global industrial excellence.

Initial stages of business restructuring will see their venturing into the aerospace industry on top of its existing businesses and this will be expanded to include other industries including medical, solar and oil and gas. The group stand to benefit from leveraging on SAM’s (Singapore Aerospace Manufacturing) vast business outreach and capitalising on its extensive customer network.

*** In September 2007, Singapore Precision Engineering (SPE) which is a subsidiary of SAM, made a general offer to acquire all the shares in LKT that it did not own at RM3.50 each. As of the latest announcement, SPE has received acceptance close to 90% of the shares ***

Financial Results …

For the financial year ended December 31, 2007 the group recorded RM178.8 million revenue in 2007 compared to RM274.3 million in 2006, a decline of 30%. The group registered a loss before tax of RM13.3 million in 2007 compared to a pre-tax profit of RM31.7 million in 2006.

The decline in revenue was attributed by the adverse market situation which influenced the operating environment. Softer equipment demand in the semiconductor industry and the additional provision of doubtful debts and inventory, coupled with the weakening US dollar against the ringgit contributed to the unfavourable results.

QL Resources Bhd ... May 2008

QL Resources Bhd’s wholly-owned subsidiary QL Feedingstuffs Sdn Bhd has been issued with an investment certificate by the Vietnamese authorities for the incorporation of QL Vietnam AgroResources Liability Ltd Company (QLVA).
The subsidiary was in line with its strategy to expand its integrated livestock farming division overseas. It said the paid-up capital of QLVA was US$4 million (RM12.8 million) and its principal activity was producing breeder and chicken eggs.

QL Resources said the investment in QLVA would be via a combination of internal funds and borrowings, QLVA had an approved term of operations in Vietnam for 50 years

DPS ... May 2008

It has proposed to acquire plantation company Biotrend Asia (M) Sdn Bhd (BTA) from several vendors for RM11.5 million.

BTA had obtained the consent from Yayasan Kelantan Darulnaim (Yakin) to carry out an oil palm plantation project covering an area of 4,600 hectares of government land in Kuala Krai, Kelantan.

BTA would be allowed to plant oil palm on the land for 66 years with an option to renew for another 33 years by paying Yakin the prescribed quit rent starting after the expiry of five years from the date of the sub-lease agreement to be signed between Yakin and BTA.

The proceeds from the oil palm plantation would belong solely to BTA. The acquisition would allow it to carry out its business in agro-based industries on a larger scale. The planting was expected to start about six to 12 months after the signing of the sub-lease agreement.

Tradewinds Corp Bhd...May 2008

Tradewinds Corporation Bhd (TCB) has entered into a sale and purchase agreement to buy 25.67 per cent of Tradewinds Hotels and Resorts Sdn Bhd (THRSB) shares and 371.64 million of its irredeemable convertible unsecured loan stocks (ICULS) from Khazanah Nasional Bhd for RM400 million cash.

The proposed acquisitions represent its continuous effort to focus on and streamline its hotel and property development business. The proposed acquisitions will enable TCB to have full control over the future direction of the hotel business.

The purchase consideration was arrived at based on a willing-buyer willing-seller basis, after taking into consideration the net asset of THRSB of about RM1.12 billion based on an audited account of THRSB as at December 31 2007.

The net assets and loss after taxation of THRSB based on the latest audited financial statements for the financial year ended December 2007 are RM1.12 million and RM9.47 million respectively.

Based on the audited accounts of TCB as at end December 2007, the proposed acquisitions would result in TCB realising a one-time net gain of RM135.8 million arising from the negative goodwill or an increase in earnings per TCB shares by 12.27 sen.

The proposed acquisitions will be funded by way of internally generated funds and bank borrowings.

*** TCB and its respective subsidiaries are directly holding the hotels and resorts assets such as the Hotel Istana in Kuala Lumpur, Crowne Plaza Mutiara in Kuala Lumpur, Hilton Petaling Jaya, Hilton Kuching, Hilton Batang Ai in Sarawak, Mutiara Taman Negara, Mutiara Johore Baru, Meritus Pelangi Beach Resort & Spa in Langkawi as well as the landed assets of the former Mutiara Beach Resort in Penang and the Mutiara Pedu Lake in Kedah which have ceased operations ***

LCTH Corp Bhd ... dated May 2008

It wants to add automotive manufacturers and disposable medical equipment makers to its list of clients. The move would help the company strengthen its position in the plastic injection moulding segment in the country.

It recently secured a contract to supply parts and components to an automotive company in Australia and are now looking at New Zealand.

Presently, its major clients are multinational corporations in the electrical and electronics sector, home appliances, telecommunication gadgets, IT-related products and power tools.

For the financial year ended Dec 31, 2007, LCTH recorded lower pre-tax profit of RM21.4mil compared with RM34.3mil in 2006. Its revenue rose to RM354.7mil from RM313mil previously.

It had of RM58.352mil in cash and cash equivalents as at end-2007.

Minetech...dated May 2008

It has set aside RM41 million for capital expenditure (capex) in 2008 and 2009 to secure more quarries, amidst preliminary plans to enter high-growth construction markets in the Middle East and Vietnam.

The planned expansion for Minetech, already with aggregate-producing quarry operations across Malaysia, Indonesia and China, is expected to spur the company’s foreign earnings to about a tenth of revenues in 2008. Aggregates or crushed stones are used mainly in the construction of buildings and roads.

Minetech’s capex for financial years 2008 and 2009 involves a sum of RM20 million and RM21 million respectively. Of the total, RM39 million will be spent on machinery and equipment. The remaining RM2 million will be used to secure and develop quarries.

The company had issued RM100 million worth of Islamic bonds in 2006 to bolster its financial position.

Locally, it plans to lease or acquire quarries in areas where it does not have a presence yet. These include Johor, Sabah and Sarawak. It hoped to supply its building materials to builders within Johor’s Iskandar Development Region while quarries in Sabah would focus on township developments in Kota Kinabalu. He did not elaborate on Sarawak.

Financial Results …

The first quarter to March 31, 2008 saw Minetech’s net profit rising significantly to RM2.2 million or 73 sen a share from RM16,000 or one sen a share a year earlier, helped by higher premix sales, besides the company’s ability to pass on its fuel cost for the production of aggregates to buyers. Revenue, meanwhile, surged 38.8% to RM43.14 million.

Maybank....dated May 2008

Market talk that MBB was about to make announcement on the acquisition of a bank in Pakistan. It is going ahead of the acquisition.

MCB’s stock is trading at Pakistan (Rm20.00), which means it is trading at nearly five times its book value. At current prices, a 10% stake in the bank would translate into Rm26.5 billion.

Meanwhile, FITCH Ratings, a global rating agency, believes that Malayan Banking Bhd's purchase of Bank Internasional Indonesia (BII) is unlikely to run into regulatory hitches.

Maybank's management has indicated that the deal will unlikely be affected by the new banking policy in Indonesia, which rules that a single entity cannot own more than two banks there by 2010. The matter still lacks clarity as some fears that the Malaysian government may be viewed as the ultimate owner of both Maybank and Khazanah Nasional Bhd, which already has banking interest in Indonesia. Maybank has also yet to address the issue openly. "The policy is not likely to be applicable to them based on their understanding. Meantime, they are waiting for further clarification from the management, or rather, the Indonesian authority.

Fitch had put Maybank on rating watch after the deal was announced in March 2008, mainly because the large cash transaction was set to affect Maybank's initially robust capital.

Fitch will resolve the rating watch in the coming weeks as its discussions with Maybank management have removed most of the concerns.

AirAsia & MAS

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TIPS ON FILLING YOUR CAR(S) (Good information)

I don't know what you guys are paying for petrol.... but here in Durban we are also paying higher, up to R7.35 per litre.
But my line of work is in petroleum for about 31years now, so here are some tricks to get more of your money's worth for every litre.

Here at the Marian Hill Pipeline where I work in Durban, we deliver about 4 million litres in a 24-hour period thru the pipeline. One day is diesel the next day is jet fuel, and petrol, LRP and Unleaded. We have 34-storage tanks here with a total capacity of 16,800,000 litres.

Only buy or fill up your car or bakkie in the early morning when the ground temperature is still cold. Remember that all service stations have theirstorage tanks buried below ground. The colder the ground the more dense the fuel, when it gets warmer petrol expands,so buying in the afternoon or in theevening....your litre is not exactly a litre.

In the petroleum business, the specific gravity and the temperature of the petrol, diesel and jet fuel, ethanol and other petroleum products plays an important role. A 1-degree rise in temperature is a big deal for this business. But the service stations do not have temperature compensation at the pumps.When you're filling up do not squeeze the trigger of the nozzle to a fast mode.

If you look you will see that the trigger has three (3) stages: low, middle, and high. In slow mode you should be pumping on low speed, thereby minimizing the vapoursthat are created while you are pumping. All hoses at the pump have a vapour return. If you are pumping on the fast rate, some of the liquid that goes to yourtank becomes vapour. Those vapours are being sucked up and back into the underground storage tank so you're getting less worth for your money.

One of the most important tips is to fill up when your tank is HALF FULL.
The reason for this is, the more fuel you have in your tank the less airoccupying its empty space. petrol evaporates faster than you can imagine. Petroleum storage tanks have an internal floating roof. This roof serves as zero clearance between the petrol and the atmosphere, so it minimizes the evaporation. Unlike service stations, here where I work, every truck that we load is temperature compensated so that every litreis actually the exact amount.

Another reminder, if there is a fuel truck pumping into the storage tanks when you stop to buy, DO NOT fill up--most likely the petrol/diesel isbeing stirred up as the fuel is being delivered, and you might pick up some of the dirt that normally settles on the bottom.
Hope this will help you get the most value for your money.

CCB … dated May 2008

CCB is understood It is understood to be mulling a special dividend or capital repayment, which could be announced to Bursa Malaysia by the middle of May 2008.

A board meeting slated for early May 2008 will discuss some details of the payment, which have yet to be ironed out, and finalise the salient features of the repayment plan.

Sources say a payment of about 50 sen per share is being contemplated, which works out to a lump sum of about Rm50.3 million to the SSB shareholders.

As at end Dec 2007, CCB had about RM13.4 million in cash and bank balances, while the company’s trade receivables stood at RM67.9 million.

Why Capital Repayment?

It is further understood that CCB is considering it because there are little prospects to significantly grow its franchise for Mercedes-Benz vehicles locally, on the back of rising competition and thinning profit margins.

CCB’s free cash flow per share is in the region of 70 plus sen a share, and since there is very little capital expenditure, there is no reason for CCB to hold on to the surplus cash.

It is also noteworthy that the repayment plan comes on the back of CCB streamlining its businesses in the wake of the operating environment becoming more competitive with steel prices soaring and margin thinning.

Since Sept 2007, the company had been streamlining its business and divested several non-core assets. It also discontinued its distribution of Peugeot vehicles in Malaysia.

Other cost cutting measures taken by the company include reducing the size of its board of directors.

Equine Capital Bhd ....May 2008

It has seen an unusual shareholding change in privately held Jasa Lumayan Sdn Bhd’s disposal of an 8.2% stake in the company just three days after it acquired the shares.

According to a Bursa Malaysia filing, Jasa Lumayan sold the stake comprising 15.75 million shares in Equine Capital on April 24 2008, just three days after it emerged as a substantial shareholder following the acquisition of the stake.

The filing showed that Jasa Lumayan had bought the stake from Azim Raya Sdn Bhd, the vehicle of Long Ngah Mat Unah, on April 21 2008. It is not clear to whom Jasa Lumayan had sold the stake. The acquisition and disposal prices are not known.

However, there were two significant off-market trades for 6.8 million shares and another for 5.1 million shares, which crossed at 62 sen or for a total consideration of about RM7.4 million. Notably, the sale at 62 sen is a 19% discount to Equine’s close on Wednesday of 77 sen.

According to the Companies Commission of Malaysia, Jasa Lumayan was registered only on March 11 2008. The company’s two directors are, Wee Beng Aun, who has a 44% stake in Jasa Lumayan and Lee Kian Jin with 25%. Another shareholder of Jasa Lumayan controlling 30% is Suanto Ng.

The shareholding changes came on the back of Equine having been in the spotlight lately after its proposed RM20 billion Penang Global City Centre (PGCC) project was scrapped. Equine had a 25% stake in privately held Abad Naluri Sdn Bhd, the company given the mandate to develop the gargantuan project. The PGCC project was shelved after the opposition Pakatan Rakyat wrested control of Penang from the ruling coalition Barisan Nasional coalition in the last general election held early April 2008.

There have also been two resignations from the board of Equine on May 2008, with the departure of Australian national James Mackenzie Hall and Lim Eu Keong. The duo, were replaced by Datuk Hamzah Md Derus and Wong Kim Seng.

Equine’s controlling shareholder is Datuk Patrick Lim Soo Kit, who is also the company’s executive chairman. He controls 20.4% of Equine’s stock via his private vehicles Indera Muhibbah Sdn Bhd, Perharap Sdn Bhd and Temasya Permai Sdn Bhd.

There has also been a new substantial shareholders in Equine in the form of Smiling Sun Ltd, which is registered in the British Virgin Islands. Smiling Sun emerged as a substantial shareholder in late Jan 2008 with 5.4%. However, by March 2008, Smiling Sun had increased its stake to about 7.9%. The identity of Smiling Sun remains unclear.

Could it be that Lim is looking to cash out after the RM20 billion PGCC project failed to take off?

Company Financial Results …

For the nine months ended Dec 31, 2007, Equine suffered a net loss of RM3.7 million from almost RM70 million in revenue.

Equine’s assets are in its pockets of land located in Selangor, which collectively have a net book value of almost RM300 million, and another 450 acre plot of land ins Selberang Prai, Penang, which has a net book value og about Rm12.5 million.

According to its balance sheet, as at end 2007, Equine had a total debts of about Rm340 million. Meanwhile the company’s total assets amounted to Rm611.7 million.

JAKS....Dated May 2008.

Water pipes maker and contractor Jaks Resources Bhd is targeting a conservative RM300mil in revenue for the financial year ending Dec 31 (FY08), up 6% from FY07's RM282.2mil, as it awaits the confirmation of a number of projects under the Ninth Malaysian Plan (9MP).

The group planned to allocate about RM10mil for capital expenditure to upgrade its machinery in its Bentong plant if it secured the Pahang-Selangor interstate water transfer project and the Langat II water treatment plant in Pahang.

To date, no parties have been awarded the two projects yet. However, Kumpulan Darul Ehsan Bhd (KDEB), the investment arm of the Selangor government, had received a letter of intent from the Government in February 2008. Kumpulan Perangsang Selangor Bhd (KPS), which is 60% owned by KDEB, has a 10% stake in Jaks.

JAKS are confident we should be able to secure some of the packages as they have a strong alliance with KDEB. The projects were expected to be awarded by year-end (2008).

Currently, Jaks is bidding for water-related projects worth RM1.5bil in Malaysia.
Jaks had an unbilled order book worth RM202mil that could last for two years. It currently had on-going projects in Kedah, Selangor, Sabah, Perak, Terengganu and Malacca.

Additionally, Jaks was eyeing water-related projects in Sarawak under the 9MP, he said.
However, he declined to identify the projects.

On expansion overseas, Jaks was in preliminary talks with local partners in Dubai and Vietnam on water works in these countries. Meanwhile, Jaks was not affected by the increase in steel prices as most of its projects were at their tail-end now. Moreover, steel is a controlled item and price increases can be passed on to customers as variable cost.
Besides, Jaks could mitigate the risks of price increases as it had its own manufacturing arm.
Its production facilities were running at 30% to 40% capacity.