Trinity Corp’s net loss narrows to RM29m in 3Q from RM83.29m yr ago

KUALA LUMPUR (Dec 29): Trinity Corporation Bhd (formerly TALAM CORPORATION BHD []) posted net loss of RM29.26 million in the third quarter ended Oct 31, 2011 from RM83.29 million a year ago.

It said on Thursday the losses were due to an impairment provision of RM9.20 million made on a piece of development land to be sold to a third party and also provisions made for doubtful debts of RM14.93 million.

Its revenue shrunk 27% to RM37.01 million from RM50.68 million mainly due to lower progress billings from the development projects. Loss per share was 0.74 sen compared with 2.76 sen a year ago.

Trinity said for the nine-month period, its net loss was RM54.08 million compared with the losses of RM81.48 million in the previous corresponding period.

Its revenue jumped 247% to RM434.78 million from RM125.29 million boosted by the completion of the disposal of the 1,322.44 acres of land in Bukit Beruntung 2 to Menteri Besar Selangor (Incorporated).

The pre-tax loss for the current year-to-date of RM52.68 million as compared to a pre-tax loss of RM74.23 million a year ago was due to lower gross margins mainly due to foreseeable loss provision of RM13.80 million on certain development projects of the group.

Trinity said it would also be affected by impairment provisions totaling RM46.30 million consisting of RM37.10 million on two pieces of leasehold development land proposed to be disposed to an associated company and RM9.20 million on a piece of leasehold development land proposed to be disposed to a third party.



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Kumpulan Europlus posts RM1m net profit in 3Q vs RM19m net loss

KUALA LUMPUR (Dec 29): KUMPULAN EUROPLUS BHD [] posted net profit of RM1 million in the third quarter ended Oct 31, 2011 compared with net loss of RM19.31 million a year ago.

It said on Thursday its pre-tax profit of RM1.33 million versus pre-tax loss of RM16.08 million a year ago was mainly due to interest income of RM1.66 million, accretion of equity interest in Talam Corp Bhd of RM 2.21 million and fair value gain of RM 2.09 million on short term investments.

Kumpulan Europlus said its revenue fell 19% to RM3.84 million from RM4.74 million mainly due to lower billings by the group’s manufacturing and CONSTRUCTION [] divisions. Earnings per share were 0.2 sen compare with loss per share of 4.10 sen.

For the nine-month period, it recorded net profit of RM5.01 million in contrast with the net loss of RM24.05 million in the previous corresponding period.

The group recorded a pre-tax profit of RM 5.64 million compared to a pre-tax loss of RM20.07 million mainly due to gains arising from redemption of financial instruments by Trinity totalling RM44.27 million and interest income of RM4.40 million, reduced by fair value loss of RM 6.25 million and provision for doubtful debts of RM23.04 million.

Revenue declined 27.8% to RM14.81 million from RM20.51 million also due to lower billings by the group’s manufacturing and construction divisions.



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Thailand’s Charoen Pokphand buying MKH’s food processing biz for RM64m

KUALA LUMPUR (Dec 29): Thai conglomerate Charoen Pokphand Foods PCL’s Malaysian company is acquiring property-based MKH Bhd’s food processing and livestock farming operations for RM64 million.

MKH Bhd, formerly METRO KAJANG HOLDINGS BHD [], said on Thursday it was selling its unit Makin Jernih Group to Charoen Pokphand Foods (M) Sdn Bhd under its plan to dispose off its non-core business.

It said the group’s focus was on its core business in property development, property investment, CONSTRUCTION [] and oil palm PLANTATION [].

“The proposal disposal will enable the group to raise proceeds to be utilised for the repayment of bank borrowings and working capital,” it said.

The Makin Jernih Group comprises of Makin Jernih Sdn Bhd and its subsidiaries, Chau Yang Farming Sdn Bhd, Tip Top Meat Sdn Bhd and AA Meat Shop Sdn Bhd.

Chau Yang Farming’s core activities are livestock farming and oil palm cultivation, Tip Top Meat is involved in food processing and trading while AA Meat Shop trades in food and meat related products.

For the financial year ended Sept 30, 2011, Makin Jernih recorded an unaudited consolidated profit after tax of RM3.0 million while its unaudited consolidated net assets was RM61.2 million.

“The sale consideration of RM64.0 million represents a premium of approximately 4.4% or RM2.8 million above the consolidated net asset of Makin Jernih based on the unaudited accounts of Makin Jernih as at Sept 30, 2011,” it said.



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Cypark gets RM14.71m contract to upgrade landfill site

KUALA LUMPUR (Dec 29): CYPARK RESOURCES BHD [] has received a contract worth RM14.71 million to upgrade the landfill site at Kok Foh, Jempol in Negeri Sembilan.

The company said on Thursday that it received the letter of acceptance for the contract dated Dec 23 from the National Solid Waste Management Department (NSMWD).

Cypark said the completion date of the project was Nov 6, 2012, which was 44 weeks from the date of site possession of Jan 4, 2012.

It said the contract, among others, involved works for the closure of one part of the landfill and the upgrading of the other part of the landfill into a sanitary cell.

Cypark said the contract was expected to contribute positively to its earnings for the financial year ending Oct 31, 2012.

“The Contract will further strengthen the company's position as one of Malaysia's leading specialists in solid waste management and integrated environmental solution.

“This new contract is in addition to the company's existing contract previously awarded by NSWMD for the safe closure and remediation of 16 landfills across the country of which four sites are also located in Negeri Sembilan,” it said.



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Berjaya Corp 2Q earnings dn 73% to RM22.9m on absence of writebacks

KUALA LUMPUR (Dec 29): BERJAYA CORPORATION BHD [] posted net profit of RM22.96 million in its second quarter ended Oct 31, 2011, down 73.4% from RM86.54 million a year ago in the absence of write-backs.

It said on Thursday that in the previous quarter, there were certain gains on write-back of impairment relating to associated companies and recognition of gains on disposal of subsidiary companies.

“Operationally, the current quarter results are comparable to the previous year corresponding quarter results,” it said.

BCorp’s revenue slipped 1.3% to RM1.69 billion from RM1.72 billion while earnings per share were 0.52 sen compared with 1.97 sen.

It said group's gaming business and consumer marketing and distribution business recorded improved revenue. The gaming business recorded higher revenue despite having a lower number of draws in the current quarter.

“The group's innovative marketing initiatives in retail distribution, especially in Hong Kong and Macau, yielded substantial revenue growth,” it said.

BCrop said revenue was affected by the deconsolidation of Berjaya Sompo Insurance Bhd after the sale of 40% stake in the first quarter and the lower property sales registered by the property development business .

For the first half, its net profit rose 38.4% to RM293.54 million from RM212 million in the previous corresponding period mas mainly due to the exceptional gain recognised arising from the disposal of 40% stake in BSompo. Revenue edged up 0.6% to RM3.48 billion from RM3.46 billion.



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IRCB posts net loss RM5.29 million in 3Q

KUALA LUMPUR (Dec 29): INTEGRATED RUBBER CORPORATION [] Bhd (IRCB) posted net loss RM5.29 million in the third quarter ended Oct 31, 2011 from net profit RM2.88 million a year earlier, on lower output and volatile latex prices.

The company said on Thursday that its revenue for the quarter fell 21.96% to RM24.83 million from RM31.82 million in 2010.

Loss per share was 0.98 sen compared to earnings per share of 1.21 sen, while net assets per share was 14 sen.

For the nine months ended Oct 31, IRCB registered a net loss of RM17.93 million compared to net profit RM3.36 million a year earlier, while revenue decreased to RM86.99 million from RM107.24 million.

Reviewing its performance, IRCB said the drop in revenue was due mainly to decrease in production output caused by the shortage of manpower and volatility of latex price for the third quarter.

It said that in addition, the stock write down of RM1.46 million which was non-recurring in nature further caused deterioration of its results.

On its prospects, IRCB said the volatility of latex price and foreign exchange coupled with the excess supply capacity remain as competitive and challenging factors in the industry.

However, the company said that with the more manageable raw material prices and recovery of manpower, it expects to improve its revenue in the coming quarter.



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KLCI rises for third day, but gains limited

KUALA LUMPUR (Dec 29): The FBM KLCI rose for the third day on Thursday and closed above the 1,500-point level, as the slight recovery at most regional markets and bargain hunting activities lifted the local bourse.

The FBM KLCI closed 2.58 points higher at 1,506.69.

Gainers led losers by 492 to 254, while 335 counters traded unchanged. Volume was 1.59 billion shares valued at RM1.16 billion.

At the regional markets, the Shanghai Composite Index rose 0.16% to 2,173.56, Taiwan’s Taiex gained 0.26% to 7,074.82, South Korea’s Kospi added 0.03% to 1,825.74 and Singapore’s Straits Times Index edged up 0.24% to 2,672.78.

Hong Kong’s Hang Seng Index fell 0.65% to 18,397.92 and Japan’s Nikkei 225 shed 0.29% to 8.398.89.

Meanwhile, European shares rose on Thursday in low volume, recovering from the previous session falls, on hope there would be demand at an Italian auction of long-term sovereign debt after the European Central Bank's three-year funding operation last week, according to Reuters.

On Bursa Malaysia, BAT rose 40 sen to RM49.60, RCI added 33 sen to RM1.80, Cocoaland gained 18 sen to RM2.18, RHB Capital and Sarawak Oil Palms added 17 sen each to RM7.30 and RM5.59, Panasonic gained 16 sen to RM20.02, JT International and Faber rose 15 sen each to RM7.15 and RM1.62, while Batu Kawan gained 14 sen to RM17.44.

Among the decliners, Nestle fell 70 sen to RM56, Box-Pak lost 24 sen to RM2.23, Chin Teck down 20 sen to RM8.79, Southern Acids and Tasek fell 15 sen each to RM2.15 and RM7.80, HLFG lost 12 sen to RM11.56, Perduren fell 10.5 sen 74.5 sen, while UMW and Supermax lost 10 sen each to RM6.85 and RM3.79.

Utopia was the most actively traded counter with 197.45 million shares done. The stock fell one sen to 6.5 sen.

Other actively traded stocks included Sanichi, Mulpha, JCY, KNM, Flonic and LFE Corp.



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Boustead announces RPT

KUALA LUMPUR: Boustead Holdings Bhd’s wholly-owned unit yesterday paid its major shareholder, Lembaga Tabung Angkatan Tentera (LTAT), RM4.5 million or 1.25 times book for a 30% stake in paint-maker Boustead Sissons Paints Sdn Bhd (BSP).

The acquisition by the 100%-unit, Boustead Building Materials Sdn Bhd (BBM), is part of Boustead Holdings’ strategic intent to develop and build a range of building materials businesses under BBM, the company said in a statement yesterday.

Boustead Holdings is also transferring its 70% stake in BSP to BBM for RM10.5 million, valuing 100% of BSP at RM15 million or 1.25 times BSP’s net asset value of RM12.01 million. The purchase consideration also took into consideration of BSP’s future earnings potential.

With 100% of BSP under BBM, the latter can benefit from synergies and cost savings achieved from better economies of scale due to the complementary nature of their businesses, Boustead Holdings said.

That, in turn, is expected to improve BBM’s profitability, it added. “The acquisition also enables BBM to have additional source of income stream in the paint manufacturing business,” the company said.

The acquisition is not expected to materially impact Boustead Holdings’ earnings for FY ending Dec 31, 2011, and does not require any approvals.


This article appeared in The Edge Financial Daily, December 29, 2011.



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Mah Sing caters to market needs

TEFD: What are your expectations for 2012, for your company and the property sector?
Leong: Having achieved more than RM2 billion in sales for 2011, we want to continue the momentum and have set a sales target of RM2.5 billion for 2012.

We are optimistic that we can continue our strong sales momentum as our products cater to market needs and are well sited in strategic locations.

Furthermore, we offer products with good concepts in strategic locations, and with our complete range of properties, we can meet buyers’ needs on many levels and for multiple purposes.With 36 landed residential, high-rise, commercial and industrial developments in our stable, we have a property to meet every need.

As for the property sector outlook, property investments have proven to be a reliable asset class. The key drivers that will continue to sustain and drive this sector will be our young population base, new household formation, high saving rates, low unemployment market and strong economic growth.

Looking at individual segments of the property market, products below RM1 million should do well, and demand should be maintained at the same momentum for products above RM1 million if they are in good locations.

We see continued demand for landed residential properties in good locations, especially in gated and guarded schemes. We also believe that smaller units of serviced apartments which are affordable, yet meet the buyers’ needs will be in demand.

For the commercial segment, smaller SoHo and SoVo properties will continue to be popular due to the affordable price points and the lack of such supply in selected locations, especially in integrated development projects.

Besides location, buyers will focus on the design concept, security, lifestyle, environment, community, amenities and accessibility when acquiring a property.

What impact, if any, do you expect from the euro crisis?

Should the European crisis be prolonged, sentiment may be affected and we are all hoping for a soft landing. At the moment, Malaysia is still projecting a minimum 5% growth in GDP this year and 5% to 6% for next year.

The property market in Malaysia is mainly driven by domestic consumption. For Mah Sing, most of our buyers are locals who are buying for own stay and investment, not speculation.

Thus, there will continue to be demand for these products. These are serious buyers who will still go for properties in good locations and concepts by branded developers.

Judging from our recent preview of M Residence@Rawang, the take-up is still good for products that meet market needs. Over one single weekend, 228 units of link homes valued at RM102 million were taken up in this new township.

These were beginner homes priced from RM360,800 to approximately RM500,000 and meet the current need for quality housing at an accessible entry level.

Will BNM’s recent tightening of consumer borrowings have an impact?

Historically, the tightening of consumer borrowings or an increase in interest rates (if any) does not have a significant correlation with property purchases.

Leong says 2011 has been a very good year for Mah Sing.

In Malaysia, property demand is mainly driven by two things — job security and sentiment.

On a fundamental level, our young population base, new household formation and high saving rates will continue to drive demand for properties. Furthermore, property has always been seen as a good hedge against inflation.

So we look at these two things. In terms of job security, our unemployment is very low, only 3%, and people generally have job security.

We believe that at this juncture, it is more on sentiment, and branded developers offering products that meet market needs in good locations will still see good take-up rates. Developers need to be sensitive to market demand to prevent any mismatch in demand and supply when planning their launches.

What is the company’s plans and focus for 2012?
We hope to achieve another bumper year in 2012, and will focus on launching projects that meet market needs and expectations to support our sales target of RM2.5 billion.

We shall create our market by tapping the pent-up demand of selected sectors and would include new phases in existing projects like Icon City (Petaling Jaya), M City (Jalan Ampang), Icon Residence Mont’ Kiara, Kinrara Residence (Puchong), Garden Residence (Cyberjaya) and Garden Plaza (Cyberjaya), as well as new projects like M Residence@Rawang, all located in the Klang Valley.

Having done very well with iParc@Bukit Jelutong, which was recently named the Best International Industrial Development, we intend to roll out Mah Sing iParc@Iskandar with the same concept in Johor Baru. We will also continue marketing our Sierra Perdana, Sri Pulai Perdana and Austin Perdana (Austin Suites serviced residences) in Johor Baru.

As for Penang island, purchasers can look forward to the maiden previews or launches of Southbay Plaza @Southbay City, Icon Residence Penang and Ferringhi Residence, as well as select units from the Legenda@Southbay bungalow project.

We will continue to be very market-driven, and ride on our branding and expertise to offer niche products which are of good design and value. We shall also focus on and enhance the development appeal of our projects for greater returns to the group and buyers of our properties.

So far, we have met and exceeded market expectations in both sales and financial performance. 2011 was a very good year for us, and we look forward to an even better year in 2012. We have very strong earnings visibility, with unbilled sales of approximately RM2.14 billion as at Sept 30. This is more than twice the revenue we recognised from property development for the whole financial year 2010.

We will also look out for more good landbank even though our unbilled locked-in sales and remaining GDV is estimated at more than RM15 billion and should last the group for five to seven years. We are keen on both privately held land as well as government land that will be developed by the private sector, so that we can continue to enjoy longer term momentum and sustainable growth.

What is your personal wish list for 2012?
I look forward to the smooth implementation of the MRT, Greater KL and other infrastructure projects which are expected to have high impacts. These are expected to have strong impact in terms of economic growth, job creation, improving the standard of living and increase the income level of our people. These initiatives will attract foreign direct investments, expand our growth and increase purchasing power as well as improve our infrastructure and accessibility. All these could potentially improve property values further.

After a rather turbulent year of natural disasters, it is my fervent hope that 2012 will be a calmer and prosperous year for everyone.


The 2012 CEO Outlook series started on Dec 19 and will run every day into January next year. The Edge Financial Daily has so far interviewed Geoffrey Briscoe of BMW Malaysia, Tan Sri Teh Hong Piow of Public Bank Bhd, Jeffrey Chew of OCBC Bank (M) Bhd, Osman Morad of Standard Chartered Bank Malaysia Bhd, Yvonne Chia of Hong Leong Bank Bhd, Tan Sri Lee Oi Hian of Kuala Lumpur Kepong Bhd and Datuk Kelvin Tan of TSH Resources Bhd.


This article appeared in The Edge Financial Daily, December 29, 2011.



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In Brief

Mintye 3Q net profit up 43%

KUALA LUMPUR: Mintye Industries Bhd’s 3QFY12 ended October net profit rose 43% from a year earlier as the automotive brake pad manufacturer raked in higher sales despite registering higher selling and administration expenses.

Net profit came in at RM1.72 million or 2.83 sen a share for 3QFY12 against RM1.2 million or 1.98 sen a year ago. Revenue rose 21% to RM15.07 million from RM12.49 million previously.

Sequentially, net profit and revenue fell 19% and 2.6%, respectively.

Its cumulative nine-month net profit rose 3% to RM5.12 million from RM3.94 million a year ago as revenue rose 14% to RM43.39 million from RM38.1 million.

Alam Maritim lands Shell job

KUALA LUMPUR: Oil and gas support services company Alam Maritim Resources Bhd has secured a RM29.8 million job from Sarawak Shell Bhd to instal offshore transport modules for the oil major.

In a statement yesterday, Alam Maritim said the nine-month contract commenced in the fourth quarter of this year and is expected to complete by May 2012. The contract is not renewable, but is expected to positively boost earnings and net tangible assets for FY11 ending Dec 31 and beyond, it said.

EONCap pays final dividend

KUALA LUMPUR : Recently de-listed EON Capital Bhd (EONCap) yesterday paid its shareholders a final tax-exempt special dividend of three sen a share, higher than the 2.45 sen apiece that it expected to pay shareholders late September.

The payout was on top of the special dividend and capital repayment made in June and September this year, totalling RM 7.76 per share, the company said in an emailed statement yesterday.

The payout followed the disposal of EONCap’s entire assets and liabilities, including EON Bank Group, to Hong Leong Bank Bhd last May. EONCap was delisted from Bursa Malaysia on Sept 27 this year.


This article appeared in The Edge Financial Daily, December 29, 2011.



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Box-Pak awakened by possible takeover?

KUALA LUMPUR: Shares of usually sleepy paper box and carton-maker Box-Pak (M) Bhd gained over a third in two days to hit its highest in 14 years yesterday, even as industry sources speak of a potential acquirer.

Tokyo and Osaka-listed Oji Paper Co Ltd (Japan), Japan’s largest paper company by sales, is believed to be the offeror, market sources said.

Box-Pak officials were not available for comment at press time.

Adding 37 sen or 17.6% to close at its day-high of RM2.47 yesterday, Box-Pak gained 33.5% in the two days after the Christmas weekend. The 2.81 million Box-Pak shares that changed hands yesterday were roughly 10 times the 30-day average volume of 284,950 shares and 100 times its five-year daily average volume of 26,700 shares.

Market watchers see Oji Paper — which has bought three Malaysian paper-related companies since 2010 — Genting Sanyen Industrial Paper, United Kotak Bhd, and HPI Resources Bhd — as a likely suitor for Box-Pak.

An offer may come through its wholly-owned Malaysian arm, Oji Paper Asia Sdn Bhd (OPA), the investment holding vehicle that acquired both United Kotak and HPI Resources, one source said.

To recap, Oji Paper in March last year bought 100% of Genting Sanyen Industrial Paper, a paper and packaging company that was formerly part of the Genting group, from private equity firm CVC Asia Pacific for an undisclosed amount.

December last year, OPA acquired United Kotak for RM1.40 per share at 10.9 times price- earnings ratio (PER) and one times price-to-book value (P/BV). In June this year, OPA offered RM4.40 per share for HPI Resources, which translates to 1.48 times book and 8.82 times earnings.

In comparison, Box-Pak’s closing price of RM2.47 yesterday values the company at 9.98 times PER and 1.32 times P/BV. Net assets per share stood at RM1.87 as at Sept 30.

According to Box-Pak’s FY10 annual report, Kian Joo Can Factory Bhd is its largest shareholder with a 54.83% stake, followed by Amanahraya Trustees Bhd with 5.16%. Kian Joo’s shares rose five sen or 2.42% to RM2.12 yesterday, up 31.4% year-to-date.

OPA did not appear to hold any shares in Box-Pak at the time of writing.

OPA’s conditional takeover offer for United Kotak came on Oct 12 last year, but not before the latter’s share price rose 66.6% from an average price of 73 sen in June 2010 to RM1.22 by Sept 30. Similarly, HPI Resources’ share price jumped 27.18% from RM3.09 to RM3.93 in one week leading up to OPA’s offer on June 15.

Notably, though, a July 13 report by The Edge Financial Daily that paper milling and packaging firm, Muda Holdings Bhd, could be Oji Paper’s next takeover target, was denied by Muda the same day.


This article appeared in The Edge Financial Daily, December 29, 2011.



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Breweries and tobacco avoid duty hikes

Breweries
It was no surprise that the breweries were spared a duty hike by Budget 2012, the sixth year in a row. Looking ahead, we believe that the risk of a hike appears minimal, at least over the next two to three years.

First, Malaysia’s beer prices are the second highest globally and the highest on a GDP-adjusted basis. Second, the long-term consumption trend is far from worrying as we estimate that the long-term forecast compound annual growth rate (since 1998) is a meagre 0.8%, which clearly lags behind average GDP growth of 5% over the same period.

Lastly, Malaysia’s per capita beer consumption of 0.38 litres is the third lowest among 14 countries in the Asia and Australasia region. In fact, Malaysia’s per capita consumption is not even a quarter of the regional average of 1.6 litres. World Health Organisation (WHO) data also indicates that alcohol consumption in Malaysia is far from alarming.

We are “overweight” on breweries. With no duty hike foreseen in the medium term, we expect breweries to register a stable 3% to 4% volume growth. We continue to like the sector’s defensiveness as beer consumption tends to be extremely insensitive to GDP growth.

While we have “buy” ratings on Guinness Anchor Bhd (GAB) and Carlsberg Brewery (M) Bhd, we prefer the former as it has a larger market share within the off-trade and traditional on-trade segment, which tends to be more resilient in ature.

Tobacco
It certainly came as a surprise that cigarette duties were not raised in Budget 2012.

We attribute this to two main factors;

(i) the prevalence of illicit cigarette trade; and more importantly

(ii) attempts by the government to project a people-friendly image given the possibility of an early general election.

We note that it is still possible for the government to raise the duty by means other than the budget. That said, we do not expect excise duties to be raised until Budget 2013 is announced late next year.

We expect Malaysia to see a declining trend in cigarette consumption over the medium to long term as cigarettes are classified as “inferior goods”. Global data show that on a per capita basis, cigarette consumption is inversely related to GDP.

Simply put, higher income nations have a relatively lower proportion of smokers as health awareness tends to be higher. Forecasts from Euromonitor indicate a steady decline in
cigarette consumption for Malaysia.

We are “neutral” on tobacco. While the absence of a duty hike is positive for the sector, we believe the medium-term outlook remains questionable. We have a “buy” rating on JT

International Bhd as we believe there is a possibility of a special dividend being paid.

Its cash pile is now approaching the level at which it last paid a special dividend in mid-2008. As for British American Tobacco (M) Bhd, we remain “neutral”as we deem the stock fairly valued. — OSK Research, Dec 27



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Choo Bee anticipating better demand in 2012

Choo Bee Metal Industries Bhd
(Dec 28, RM1.42)

Maintain add at RM1.42 with target price of RM1.60: After a modest growth in demand for 2011, we are more optimistic and expect demand to be more buoyant in 2012. We anticipate more construction and infrastructure works to come onstream then.

This is on the back of ongoing mega projects like the Second Penang Bridge and KLIA 2 and the anticipation of several other mega projects under the 10th Malaysia Plan. As such, we expect the group’s manufacturing demand to grow by 10% in FY12 and 5% in FY13.

For 9MFY11, we gather that domestic demand for Choo Bee’s flat products grew by about 5% year-on-year (y-o-y).

We gather that Choo Bee’s average selling price (ASP) for 2HFY11 hovered between RM2,600 and RM2,700 per tonne. Recall that in 1QFY11, its ASP reached a peak of about RM3,000 per tonne. Entering into 2012, given the moderating external and domestic economic outlook, we do not anticipate any significant pick-up in prices. As such, we maintain a 5% ASP growth to RM2,950 per tonne in FY12, followed by another 5% growth to RM3,100 per tonne in FY13.



With minimal capital expenditure (capex) in the next couple of years, we are confident that Choo Bee can maintain its six sen net dividend per share, which translates into a decent yield of 4%. We gather that capex would likely be between RM10 million and RM20 million in the next couple of years for upgrading of machines and relocation of a plant.

Recall that the group is also looking to develop the remaining 2.4ha land in Kapar, Klang. The proposal includes building a pipe-making production factory. However, this is still in the initial stage. We do not think that there would be any need for a new plant in the near future as the group utilises 50% of its capacity at present. As such, the group has sufficient capacity in the next couple of years to absorb any potential pick-up in demand.We are currently maintaining our earnings forecasts for FY11 to FY13.

Our “add” rating and target price of RM1.60 (based on six times FY12 price-earnings ratio (PER) remain unchanged. At six times, the valuation multiple is still at a one times PER discount to Hiap Teck Venture Bhd’s target PER in order to account for Choo Bee’s lower share trading liquidity. On average, Choo Bee’s daily trading volume is only 12,000 shares against Hiap Teck’s 450,000.

We continue to favour Choo Bee for its decent net yield of 4% and potential growth in demand on the back of the Economic Transformation Programme rollout. Despite the recent pick-up in construction steel demand, we remain cautious on flat product manufacturers as demand for flat products normally lags behind long products. Key risk to our call remains the high raw material costs, which will continue to dampen margins. — Affin IB Research, Dec 28




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An early ang pau for Bumi Armada?

Bumi Armada Bhd
(Dec 28, RM4.10)

Maintain buy at RM4.08 with target price of RM4.48: Bumi Armada has announced that its subsidiary, Bumi Armada Offshore Holdings Sdn Bhd, has exercised its call option to purchase the Rainbow River (oil tanker) for RM68 million, pursuant to a memorandum of agreement entered into with Galaxy Naviera Maritime SA, Panama, on Sept 28, 2011.

The purchase will be satisfied by internal funds with the transaction targeted to be completed in 1Q12.

The double hull 246m x 42m Aframax oil tanker, which carries a Panamanian flag, was built in 1999 by Koyo Dockyard Co Ltd and has a gross tonnage of 58,000 tonnes and dead weight tonnage of 107,000 tonnes. According to its latest voyage update, the vessel is scheduled to arrive in Singapore today.

The technical specifications of Rainbow River are consistent with the previous five floating production, storage and offloading (FPSO) conversion candidates deployed by Bumi Armada.

In our previous report, we mentioned that Bumi Armada was tendering for four FPSO contracts, including one in Vietnam (Petroliam Nasional Bhd has a 50% stake) and Malaysia (Belud field), highlighting that results on one of those tenders could be announced within a month. While details remain sketchy, we believe this purchase could signify that the sixth FPSO contract is crystalising.

We are positive on this development and expect to see further news flow relating to this deal. We are maintaining our estimates as we have incorporated two FPSO wins in 2012. Still a “buy” with fair value at RM4.48. — BIMB Securities Research, Dec 28


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PPB arm gets first go-ahead for Wilmar China unit buy

KUALA LUMPUR: PPB Group Bhd’s flour-milling arm, FFM Bhd, has received regulatory go-ahead for one of its three proposed 20%-stake acquisitions in Wilmar International Ltd’s Chinese flour milling units totalling RM80.14 million — paving the way for greater collaboration between the two companies controlled by billionaire Robert Kuok.

In a statement yesterday, PPB said FFM’s 100%-owned Waikari Sdn Bhd had received the go-ahead from the Chongqing Administration for Industry and Commerce to subscribe to a 20% stake in Wilmar’s Yihai (Chongqing) Foodstuffs Co Ltd for US$2.4 million.

The go-ahead came just over a year after Wilmar agreed to pay RM378 million for 20% of FFM on Dec 2, 2010.

Having received the go-ahead from Bank Negara Malaysia in a letter dated Dec 27, Waikari will proceed to complete the proposed subscription, PPB’s statement read.
FFM’s Waikari is also paying US$5.33 million (RM16.89 million) for a 20% stake in Yihai Kerry (Beijing) Oils, Grains & Foodstuffs Industries Co Ltd and US$2.58 million for 20% of Yihai

Kerry (Shenyang) Oils, Grains & Foodstuffs Industries Co Ltd, an earlier statement dated Dec 23 read.

In addition, Waikari may also contribute to a shareholders’ loan of up to US$5.8 million for Yihai Kerry Beijing, US$4.4 million for Yihai Chongqing and US$4.8 million for Yihai Kerry

Shenyang. That would bring Waikari’s total debt plus equity investment in the three Wilmar Chinese flour units to RM80.14 million.

The proposals, which give FFM access to Wilmar’s distribution network in China, are expected to contribute significantly to PPB Group’s future earnings, but would not materially impact numbers for FY ending Dec 31, 2011, PPB said on Dec 23.

There is no financial information on Yihai Chongqing, a newly incorporated flour miller. As at Dec 31, 2010, Yihai Kerry Beijing’s net asset stood at RM48.47 million and had a RM981,399 net loss.

Yihai Kerry Shenyang’s net asset stood at RM39.6 million and had registered a RM1.1 million net loss for the financial period ended Dec 31, 2010.

The proposals are expected to be completed within five months, PPB said.



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WCT in 2nd property venture in Vietnam

WCT Bhd
(Dec 28, RM2.32)
Maintain market perform at RM2.30 with fair value of RM2.08: Via a 70:30 joint venture with local partner Southern Land Corp, WCT has obtained an investment certificate (IC)
from the Vietnamese government to undertake a residential and commercial development on a 4.7ha parcel of land in Binh Hung Commune, Binh Chanh District, Ho Chi Minh City.

We estimate WCT’s latest property venture under WCT-DPN Co Ltd will have a gross development value of about RM500 million, taking a cue from the RM1 billion GDV of the first venture, which is about twice the size in terms of land area.

In January 2008, WCT, via a 67:33 JV called BSC-WCT Co Ltd with another local partner Minh Thien Construction and Trading Co Ltd, obtained the IC to undertake a commercial and retail development called Platinum Plaza on a 9ha tract also in Binh Hung Commune.

We are at best only mildly positive on WCT’s latest development given the expected long gestation period (the Platinum Plaza project has yet to get off the ground after four years).

Not helping either, is the lingering economic uncertainty in Vietnam. Of course, the counter argument is the economic uncertainty in Vietnam could have strengthened WCT’s bargaining position with the local partner.

We maintain our forecasts as we do not expect any contribution from the new project within our forecast period.
Risks to our view include:

(i) new contracts secured in FY11 to FY13 ending December coming in below our target of RM1.5 billion per year; and

(ii) escalation in input costs.

We have turned less enthusiastic on construction stocks as we believe their share price performance is likely to be muted over the next three to six months as:

(i) investor confidence and comfort level that the Klang Valley MRT project will start work soon are being chipped away by further delays in the rollout of certain already long overdue large-scale projects;

(ii) even if the Klang Valley MRT project is to start work as scheduled, initial progress is likely to be painfully slow due to bureaucratic hurdles, which means realistically, earnings impact from the Klang Valley MRT may be a few quarters, or even a year or two away; and

(iii) there is generally a lack of credible new large-scale projects in the pipeline. Indicative fair value for WCT is RM2.08 based on 12 times fully-diluted FY12 earnings per share of 17.3 sen, in line with our benchmark one-year forward target price-earnings ratio of eight to 12 times for the construction sector. — RHB Research, Dec 28


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Offer price for Leong Hup seen as unfair but reasonable

KUALA LUMPUR: The proposed disposal of Leong Hup Holdings Bhd to Emerging Glory Sdn Bhd for a total consideration of RM318.65 million, or RM1.80 per share, is deemed to be “not fair” by an independent adviser. Nevertheless, the offer is deemed “reasonable” in the absence of other offers and shareholders are advised to vote in favour of the deal.

TA Securities Holdings Bhd, the independent adviser for the proposal, in Leong Hup’s circular to shareholders dated Dec 27, said “based on our evaluation on the disposal consideration...and the financial effects of the proposals (in particular, the loss on disposal to Leong Hup arising from the proposed disposal), we find the offer not fair to the non-interested shareholders”.

It arrived at its opinion after making comparisons of the offer price of RM1.80 with, among others, Leong Hup’s net assets (NA), price-to-book ratio (PBR), price-to-earnings ratio (PER), as well as comparable companies. The comparable companies are Huat Lai Resources Bhd and Lay Hong Bhd.

Nevertheless, TA Securities said that after taking into consideration of an evaluation of other factors, namely historical market price and the salient terms of the disposal and there being no alternative offers currently, it found the offer to be reasonable.

In the circular, TA Securities said Leong Hup’s share price had been consistently trading at a discount to the offer price for the last three years prior to the offer, and comparing with its NA.

Hence, the non-interested shareholders would be able to use this disposal as an opportunity to realise their investment in Leong Hup at a higher return than they would obtain in disposing of the same in the open market, it said.

Given this, TA Securities recommended that the shareholders of Leong Hup vote in favour of the proposals. The proposals will be tabled at the upcoming EGM to be held on Jan 19, 2012. The resolution regarding the proposed distribution is required to be passed by a majority of at least 75% of the non-interested shareholders at the EGM.

Leong Hup started out in the early 1960s as a small farm and was listed on the Main Market of Bursa Malaysia on Oct 29, 1990.

Besides its business in poultry, which includes the rearing and distribution of parent-stock day-old chicks, Leong Hup is also an investment holding company.

Some of the directors of Leong Hup are also shareholders of Emerging Glory, a special-purpose private limited company, and they include Datuk Lau Bong Wong, Datuk Lau Eng Guang and Tan Sri Lau Tuang Nguang. Each of them owns 25% of Emerging Glory. The directors and Leong Hup Management Sdn Bhd have a combined 46.74% direct interest in Leong Hup.

If the proposals were approved and the disposal goes through, Leong Hup is expected to be delisted by the end of March next year.

Leong Hup shares have seen an increase in price since their six-month low on Sept 26, which closed at RM1.51. The stock ended unchanged yesterday at RM1.70, on volume of 206,900.




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KLCI to end year on high note

KUALA LUMPUR: The local stock market bellweather FBM KLCI rose for a fifth day yesterday and with tomorrow being the final day of trading for 2011, investors are expecting the upward momentum to continue, ending the year on positive note.

Closing 3.2 points higher at 1,504.11 yesterday, the KLCI has risen nearly 2.7% over the last five days, and is 14.08 points or 0.94% shy of its 2010 year-end closing of 1,518.19 points. However, the KLCI traded close to a year-low volume with around 50 million shares done yesterday and Tuesday, due to the holiday season.

Most of the trading activity yesterday was seen during the last two hours of the second trading session when the KLCI breached its Tuesday close of 1,500.91.

Although activity was higher across the bourse compared with Tuesday, it is believed the KLCI’s uptrend was mainly due to window dressing by institutional fund managers.

Yesterday, a total of 1.27 billion shares valued at RM904.26 million changed hands, resulting in 386 rising stocks versus 314 declining entities. On Tuesday, 993.78 million shares valued at RM743.88 million were traded.

“What we feel is that there is a strong incentive to close the year on a high note above 1,500 points,” TA Investment Management Bhd chief investment officer Choo Swee Kee told The Edge Financial Daily.

Choo said many of the local funds may try to hold the KLCI above 1,500 as it serves as a psychological level to start the new year on a positive note.

He said the Malaysian market would also likely end in positive territory as it has been generally well supported for the whole of this year compared with developed markets such as in Singapore and Hong Kong, which have fallen by about 15% to 20% over the year.

Choo said the support comes from a “first and foremost” view that Malaysia is a defensive market, with many players in the Malaysian market being domestic funds.

He said the government’s Economic Transformation Programme (ETP) is also another reason to support the market. He said there is expectation for the markets to hold up until the general election, widely expected to be held next year.

Chris Eng, who heads OSK Research, shared this view. “At the very least I think there is a strong chance for it to close above 1,500, being so close to it right now.”

Asked about window dressing activity by fund managers towards year-end, Eng said it could happen with government and non-government funds, which is one of the reasons he sees the KLCI potentially closing the year on a high note.

The month of December has also been auspicious for the KLCI. According to a report by MIDF Investment Bank, there were only two years (in 2000 and 2004) since 1995 in which the KLCI ended December lower than it started.

The report said in the last six years, the KLCI has ended the month in the positive gain territory, ranging from 0.4% to 3.4%, while its 16-year average gain in December since 1995 was 3.6%.

Close to the peak of the 2008/09 global financial crisis in December 2008, the KLCI managed to gain 3.9% during the month. It started with 848.43 points on Dec 1, 2008 and ended at 881.63 points on Dec 31, 2008.

With a year-to-date (YTD) decline of 1.9%, the KLCI has been among the best performing indices in the region, outperforming markets such as in India, China, Taiwan, and Hong Kong, all of which have fallen between 19% and 24%.

The other top performing indices were the Philippine PSEi Index rising 3.23%, the Jakarta Composite Index (1.77%), followed by Thailand’s SET Index, down by 0.74%.

Among the region’s worst performing indices this year were Bombay’s Sensex 30, down 23.4% YTD, followed by the Shanghai Composite Index (-22.72%), Taiwan’s Taiex (-21.35%), Hong Kong’s Hang Seng Index (-19.61%), Japan’s Nikkei 225 (-17.65%), Singapore’s Straits Times Index (-16.42%), Australia’s ASX 200 (-13.83%), and South Korea’s Kospi (-11.01%).

Except for the Shanghai Composite Index, which was up 0.18% to close at 2,170.01, all the indices mentioned above were in the red yesterday.

Among the top losers were Bombay’s Sensex 30, ending the day down 1.03% to 15,710.02, and Australia’s ASX 200, closing 1.25% lower to 4,088.80.

Taiwan’s Taiex fell by 0.4% to 7056.67, while Japan’s Nikkei 225 declined by 0.2% to 8423.62 and Singapore’s Straits Times Index was down 0.28% to 2666.25.

The Jakarta Composite Index, ended 0.53% down to 3,769.21, while Thailand’s SET Index closed 0.32% lower at 1,025.12.


This article appeared in The Edge Financial Daily, December 29, 2011.



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Maybulk advances on rising volume despite cautious outlook

KUALA LUMPUR (Dec 29): MALAYSIAN BULK CARRIERS BHD [] (Maybulk) share price advanced in late afternoon trade on Thursday, climbing to a high of RM1.59, despite concerns about a tough 2012 environment for the dry bulk shipping industry.

At 3.57pm, Maybulk was up 13 sen to RM1.58. There were 5.09 million shares done at prices ranging from RM1.46 to RM1.59.

In a recent report, TA Securities Research said its Underweight stance on the dry bulk shipping industry remained intact as it believed the global shipping market was posed for a tough 2012.

“Indeed, Malaysian Bulk Carriers Berhad (Maybulk)’s management foresee a challenging operating environment going forward. Capacity glut and unstable operating costs, primarily due to volatile bunker costs will continue to threaten shipping line profit margins,” it said.

TA Research said the situation may be exacerbated by unusual weather conditions and natural disasters.

Due to the lacklustre industry outlook and the industry’s chronically low profitability, it believed the share price appreciation potential is limited for Maybulk. It added the recurring problem in the shipping sector was still the oversized orderbook as there would be another wave of big ships coming to the industry next year.

“We reiterate our Sell recommendation on Maybulk with a target price of RM1.10 based on Sum-of-Parts valuation methodology. We believe Maybulk appears fully valued within the sector with the recent increase in share prices.

“Potential catalysts to upgrade our target price include: (i) a strong and sustained rebound in Baltic Dry Index, (ii) a faster-than-expected economic recovery; and (iii) better than expected earnings contribution from POSH (PACC Offshore Services Holdings Pte Ltd),” TA Research said.



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KL shares continue uptrend at midafternoon

Shares on Bursa Malaysia extended their gains at mid-afternoon today on bargain-hunting ahead of year-end, dealers said.

At 3pm, the underlying FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.49 points, or 0.23 per cent, to 1,507.60 after opening 4.06 points lower at 1,500.05.

A dealer said interest was confined to the plantation and banking counters with investors confident that these segments would perform well next year.

KL Kepong advanced 32 sen to RM22.90, Sime Darby gained five sen to RM9.04, RHB Capital jumped 14 sen to RM7.27 and CIMB rose four sen to RM7.14.

Trading was positive with gainers outpacing losers by 414 to 229 while 296 counters were unchanged. Volume stood at 1.06 billion worth RM627.35 million.

The Finance Index rose by 50.84 points to 13,425.06, Plantation Index increased 18.42 points to 8,087.28 and the Industrial Index gained 22.98 points to 2,731.00.

The FTSE Bursa Malaysia Emas Index added 33.43 points to 10,352.12, FTSE Bursa Malaysia Mid 70 Index advanced 49.97 points to 11,486.27 and the FTSE Bursa Malaysia Ace Index was 20.44 points higher at 4,075.24.

Of the volume leaders, Sanichi Technology rose 2.5 sen to 17.5 sen and Wijaya-Warrants was up 4.5 sen to 43.5 sen. 1 Utopia, however, lost half sen to seven sen,

Among heavyweights, Maybank declined one sen to RM8.33, Petronas Chemicals rose one sen to RM6.16 and Axiata was two sen higher at RM5.01. -- BERNAMA



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Bumi Armada venture firm seeks US$280m

Armada D1 Pte, a venture between Forbes & Co, controlled by billionaire Pallonji Shapoorji Mistry, and Kuala Lumpur-based Bumi Armada Bhd plans to borrow US$280 million, a person familiar with the matter said.

The eight-year loan will be arranged by SBI Capital Markets Ltd, the investment banking unit of India’s largest lender, State Bank of India, the person said, asking not to be identified as the details are private.

Armada D1 is also in talks with banks to borrow US$100 million in a so-called bridge loan which would have a maturity of less than one year, the person said. -- Bloomberg



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FBM KLCI 3.32 points higher

At 3.00 p.m. today, there were 410 gainers, 229 losers and 301 counters traded unchanged on the Bursa Malaysia.

The FBM-KLCI was at 1,507.43 up 3.32 points, the FBMACE was at 4,075.24 up 20.44 points, and the FBMEmas was at 10,350.06 up 31.37 points.

Turnover was at 1.059 billion shares valued at RM631.350 million. -- Bernama



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Box-Pak falls to 3-month low

Box-Pak Malaysia Bhd, a Malaysian carton manufacturer, fell the most in three months in Kuala Lumpur trading after Kian Joo Can Factory Bhd denied a Business Times report that it was planning a buyout bid.

The stock dropped 5.7 per cent to RM2.33 at 3.28 p.m. local time, set for its largest decline since Sept 26. -- Bloomberg



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'Neutral' call on Alam Maritim stays

OSK Research Sdn Bhd has maintained a 'neutral' call on investment holding company, Alam Maritim Resources Bhd, at an unchanged price of 85 sen.

In a research note today, OSK said in comparison with other listed vessel operators like Perdana Petroleum, Petra Energy and Tanjung Offshore, Alam Maritim has outperformed its peers in terms of new contracts and quarterly earnings performance.

"The results of its peers were mostly flat or were in red ink quarter after quarter as a result of poor vessels utilisation and dearth of new contracts.

"Although we think Alam Maritim is out-performing its peers, this development has been partly factored into its share price valuation," it said.

OSK said it was positive on the company but maintained its forecast for financial year 2011-12 results.

It said Alam Maritim was expected to clinch more long-term vessel charters in the future.

"About 50 per cent of its vessels are now on long-term charters averaging about a year while the balance 50 per cent are on spot charter.

"Hence, although its utilisation rate fluctuates monthly, we understand that on average it is still hovering at 60 to 80 per cent," it said.

OSK said judging from the industry’s current operating environment, the rate was reasonable in view of the fact that Petroliam Nasional Bhd and its production-sharing contractors were still handing out minimal new vessel contracts. -- BERNAMA



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Box-Pak falls after Kian Joo unaware of privatisation plan

KUALA LUMPUR (Dec 29): Shares of BOX-PAK (MALAYSIA) BHD [] fell in the afternoon session on Thursday after KIAN JOO CAN FACTORY BHD [] stated it was unaware of any negotiations to privatise Box-Pak.

At 2.56pm, it was down eight sen to RM2.39. There were 3.65 million shares done.

The FBM KLCI rose 3.98 points to 1,508.09. Turnover was 1.04 billion shares valued at RM616.39 million. Advancing stocks beat decliners 414 to 225 while 294 counters were unchanged.

During the midday-break, Kian Joo Can declared it was unaware of any negotiations to privatise Box-Pak, though it occasionally might receive expressions of interest in its investments. It added it was not aware of any formal discussions concerning the privatisation.

In a separate statement, Box-Pak also stated it was not aware of any formal discussions concerning the privatisation of Box-Pak.

"The company also wishes to announce that it has not appointed any investment bank in relation to the privatisation,” said Box-Pak.



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Quality Concrete 3Q net profit plunges to RM1.79m

KUALA LUMPUR (Dec 29): QUALITY CONCRETE HOLDINGS BHD [] net profit for the third quarter ended Oct 31, 2011 plunged to RM1.79 million from RM11.83 million a year earlier, due mainly to higher operating cost and lesser profit reported in the HDPE pipes and timber products divisions.

The company said on Thursday that revenue for the quarter rose 39.4% to RM49.82 million year-on-year to RM35.74 million.

Earnings per share for the quarter was 3.09 sen compared to 19.64 sen in 2010, while net assets per share was RM2.69.

For the nine months ended Oct 31, Quality Concrete’s net profit fell to RM3.88 million from RM13.11 million, despite posting an increase in revenue to RM149.54 million from RM107.86 million.

Reviewing its performance, the company said the increase in revenue was from the property and CONSTRUCTION [] division where all the projects undertaken have started commencing works.

However, the company said its overall profit was pulled down by higher operating cost and also lesser profit reported in the HDPE pipes and timber products divisions.

It also said most of the profit achieved in the last financial year included a gain from disposal of a subsidiary company.

On its prospects, Quality Concrete said it would continue to work towards enhancing its performance and financial position in the final quarter of the year.

“Barring any unforeseen circumstances, the management is confident that the group will be able to achieve it,” it said.



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Menang Corp director buys 25m shares from open market

KUALA LUMPUR (Dec 29): Menang Corporation Bhd independent director Prof Dr. Christopher Shun Kong Leng has emerged as a substantial shareholder with 25 million shares or 9.36%.

A filing with Bursa Malaysia on Thursday said he acquired the shares from the open market as at Dec 23. The shares were disposed at 20 sen each by the major shareholders of Menang.

Shun is the son of Menang group managing director and group chief executive officer Datuk Shun Leong Kwong.

According to the company’s website, he was appointed to the board of Menang on February 25, 1991 and was made executive director in April, 1991.

Subsequently, he was appointed group executive director on Jan 1, 1992 and he was promoted to deputy group managing director on July 1, 2005.

On Dec 31, 2007, was re-designated non-executive director. He is also a member of the company’s remuneration committee.



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'Compelling regional growth' for Maybank

The acquisition of Singapore's banking franchise, Kim Eng Holdings, and the longer-term growth potential of Bank Internasional Indonesia (BII), will set the stage for a potentially compelling regional growth for Malayan Banking Bank Bhd (Maybank).

OSK Research said the bank's latest quarter net profit year-on-year (y-o-y) growth of 25.1 per cent and quarter-on-quarter growth of 11.4 per cent, respectively, far outpaced the industry's aggregate of 15.6 per cent and 8.2 per cent, respectively.

"Its earnings were propelled by an industry-beating loans growth of 17.6 per cent, y-o-y, the hefty 62.1 per cent drop in loans loss provision and maiden contribution from Kim Eng," OSK Research said in a note today.

It said BII was also aggressively expanding via new hiring and enlarging its branch network by 43 per cent over the next one-and-a-half years.

The research firm said BII's operating leverage would begin to flow through by financial year 2012 and financial year 2013 on a more stable cost base while generate new revenue from its enlarged presence.

"This would naturally help bring down the cost-to-income ratio closer to the industry average, driven largely by revenue growth from its enhanced infrastructure investments, as costs stabilises," it said.

OSK Research is maintaining a "Buy" call and fair value of RM9.60 on Maybank given the qualities provided by the bank and its alluring 7.6 per cent dividend yield which is the highest among domestic banking stocks. -- Bernama



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Tricubes active, down after revealing accumulated losses of RM17.24m

KUALA LUMPUR (Dec 29): TRICUBES BHD [] shares fell in active trade on Thursday after the company revealed that its accumulated losses for the financial year ended March 31, 2011 was RM17.24 million and not RM7.3 million as stated in its 2011 Annual report.

At 12.30pm, Tricubes fell 2,5 sen to 18.5 sen with 6.5 million shares traded.

Tricubes on Wednesday in a filing to Bursa Malaysia Securities Bhd had said there were typo errors on the accumulated losses as stated in pages 49, 61 and 98 of the 2011 Annual Report.

The announcement by Tricubes followed an audit of its 2011 annual report which was submitted to Bursa on Sept 7.

It said the accumulated losses of RM7,307,315 as stated in pages 49 and 61 in the report was erroneous as the group’s accumulated losses should instead be stated as RM17,240,012.

Meanwhile, the total accumulated losses-realised and accumulated loss as per financial statement of RM719,290 and RM3,129,562 for the group and company level as stated in page 98 should be stated as RM17,240,012 and RM8,508,652, respectively, it said.

The audited report said these conditions indicated the existence of material uncertainties which may cast doubt on the group’s and the company’s ability to continue as a going concern.

It said the ability of the group and the company to continue as going concerns depended upon the continuation of securing of the contracts and support of bankers, creditors and shareholders.

“Currently, the group has secured several contracts and is planning to secure additional contracts with various government agencies and commercial banks for its existing and newly developed products.

“The successfulness of securing new contracts relate to future events which cannot be determined with high degree of certainty at this point in time,” it said.

For the second quarter ended Sept 30, 2011, Tricubes’ net loss widened to RM1.87 million from net loss RM720,000 a year earlier, while revenue dropped to RM798,000 from RM1.06 million in 2010.

Tricubes came into the limelight in April this year after it was roped in to develop the 1 Malaysia email project, or myemail, which then was said to expect to save the federal government some RM200 million over ten years by reducing the cost of sending official correspondence to 50 sen each.

Subsequently, the company was also appointed as the traffic fines collection agent the police department in November.



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OSK upbeat on AirAsia's outlook

OSK Research Sdn Bhd is optimistic on AirAsia Bhd's outlook for 2012 on anticipation that earnings will climb 21 per cent on the back of lower fuel prices amid resilient growth in low-cost travel.

OSK said as low-cost air travel dominated Asean skies with 32 per cent penetration, AirAsia was the best proxy to this resilient segment during times of economic uncertainty.

"AirAsia, which stands to benefit from its two new hubs in Manila and Tokyo, will also get an earnings boost from its fruitful AirAsia Expedia joint venture and its ability to monetise its training academy," it said in an investment note
today.

It said it expected more yields upside for AirAsia going forward as the competitive barriers between it and Malaysian Airlines (MAS) came down after the two agreed to collaborate.

"Under the tie-up, MAS and AirAsia will serve their own target markets and steer clear of head-on competition via heavy airfare discounts.

"AirAsia would be able to reap more benefits from the collaboration following the cessation of Firefly's jet services," it said.

OSK has maintained its "buy" call on AirAsia with a fair value of RM4.57. -- BERNAMA



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'Buy' calls on Axiata, Telekom Malaysia

OSK Research Sdn Bhd has maintained a "buy" call on Axiata Group Bhd with a target price of RM5.60.

In a research statement today, OSK said in the face of global economic uncertainties, the Axiata management has undertaken good strategic initiatives to keep operating cost lean.

"Axiata is also promoting sharing of infrastructure on the back of accelerating data usage, and it remains as an inexpensive regional mobile exposure," it said.

OSK said a major re-rating catalyst would come from a higher dividend payout.

Meanwhile, the research firm has rated Telekom Malaysia Bhd (TM) a "buy" with target price of RM5.15.

It said TM's core earnings were expected to pick up in financial year 2012 as Unifi's footprint expanded to 1.3 million premises.

"We also gather from TM that Unifi's base rose above 200,000 at end-November 2011, beating the management's own expectations and our estimate," it said.

OSK said TM would also benefit from the ramp-up in wholesale contribution following the inking of High-Speed Broadband wholesale agreements with Maxis and P1 this year.

It said the stock remained one of its top picks for exposure to the telecommunications sector.

"Its foreign shareholding level rose 19 per cent at end-October, a level last seen in 2008, reflecting renewed optimism on the stock," it said. -- Bernama



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Quality Concrete posts smaller Q3 profit

Quality Concrete Holdings Bhd posted a smaller pre-tax profit of RM2.38 million for the third quarter ended Oct 31, 2011 against RM12.38 million recorded in the same period last year.

"However, revenue rose to RM49.82 million, during the period under review, from RM35.72 million registered previously," it said in a filing to Bursa Malaysia today.

The company said the higher revenue was mainly contributed by the group's property and construction divisions. -- Bernama



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RHBCap said near OSK unit deal at RM1.9b

RHB Capital Bhd, Malaysia’s sixth-biggest banking group, may pay as much as RM1.9 billion (US$598 million) in shares for OSK Holdings Bhd’s investment bank, three people with knowledge of the matter said.

Talks between the two companies are now centered on a price range of RM1.8 billion to RM1.9 billion, said the people, who asked not to be identified as talks are private. The two banks expect to reach an agreement and seek approval from Malaysia’s central bank by mid-January, two people said.

RHB and OSK said on Oct. 14 that the central bank granted them a three-month window to negotiate the purchase. One of the remaining issues to be resolved is the treatment of some of OSK’s outstanding debt, one person said.

Buying OSK Investment Bank Bhd would allow RHB to overtake CIMB Investment Bank Bhd as the biggest stockbroker in Malaysia, based on data from the country’s stock exchange. Malaysian banks and brokerages have been merging amid increased foreign competition. Hong Leong Bank Bhd. acquired EON Capital Bhdfor US$1.7 billion in May, while K&N Kenanga Holdings Bhd, a brokerage part-owned by Deutsche Bank AG, is in talks to buy the investment banking and broking operations of local rival ECM Libra Financial Group Bhd, two people with knowledge of the matter said on Dec. 1.

RHB may issue new shares worth as much as 10 percent of its existing equity to pay for the OSK unit, three people with knowledge of the matter said last month. The acquisition is still expected to be paid for in stock, two people said. The final price of the purchase will depend on what value is applied to the RHB shares that are issued, one person said.

RHB Chief Executive Officer Kellee Kam Chee Khiong, and U Chen Hock, chief executive officer of OSK Investment Bank didn’t immediately reply to phone calls and e-mails seeking comment.

RHB Capital rose 2.2 percent to RM7.29, while OSK climbed 1.7 percent to RM1.77 at the 12:30 p.m. midday break in Kuala Lumpur today. -- Bloomberg



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Kian Joo says unaware of privatisation plans for Box-Pak, shares at fresh 14-yr high

KUALA LUMPUR (Dec 29): KIAN JOO CAN FACTORY BHD [] has declared it is unaware of any negotiations to privatise BOX-PAK (MALAYSIA) BHD [], though it occasionally might receive expressions of interest in its investments.

It said on Thursday it was not aware of any formal discussions concerning the privatisation.

“The company also wishes to announce that it has not appointed any investment bank in relation to the privatisation,” it said.

Kian Joo said the company from time to time may receive proposals, enquiries and expressions of interest in relation to the company’s various investments.

Box-Pak share price had on Wednesday, surged to its highest in 14 years and closed 37 sen higher at RM2.47. It gained 33.5% in the two days before the Christmas weekend.

At midday on Thursday, it was up two sen to RM2.49, another fresh 14-year high. There were 3.30 million shares done at prices ranging from RM2.40 to RM2.65.



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KLCI regains lost ground as bargain hunting picks up

KUALA LUMPUR (Dec 29): The FBM KLCI regained some lost ground at the mid-day break on Thursday on bargain-hunting activities, in line with the slight recovery at most regional markets.

At 12.30pm, the FBM KLCI rose 5.54 points to 1,509.65, lifted by gains including at banking and select blue chips. Gainers overtook losers by 369 to 213, while 304 counters traded unchanged. Volume was 891.7 million shares valued at RM511.81 million.

The ringgit fell 0.34% to 3.1770 versus the US dollar; crude palm oil futures for the third month delivery fell RM13 per tonne to RM3,172, crude oil gained six cents to US$99.42 while gold rose US$1/22 an ounce to US$1,556,65.

At the regional markets, the Shanghai Composite Index rose 0.33% to 2,177.23, Singapore’s Straits Times Index gained 0.14% to 2,669.99, South Korea’s Kospi was up 0.11% to 1,827.04 and Taiwan’s Taiex added 0.10% to 7,063.48.

Meanwhile, Hong Kong’s Hang Seng Index was down 0.91% to 18,349.90 and Japan’s Nikkei 225 shed 0.58% to 8,374.76.

On Bursa Malaysia, KLK rose 52 sen to RM23.10, Petronas Gas added 50 sen to RM15.60, BAT 30 sen to RM49.50, Petronas Dagangan 18 sen to RM17.38, MPI and Cocoaland 15 sen each to RM2.85 and RM2.15, Faber 13 sen to RM1.60 and Integra 12 sen to RM1.37.

Among the banking stocks, RHB Capital rose 16 sen to RM7.29, Hong Leong Bank eight sen to RM10.92, CIMB seven sen to RM7.17, Public Bank up four sen to RM13.16, AFG three sen to RM3.89, while HLFG and Affin added two sen to RM11.70 and RM3.05.

Utopia was the most actively traded stock with 119.92 million shares traded. The counter fell half a sen to 7 sen.

Other actives included Sanichi, KNM, JCY, Flonic and Sumatec.

Decliners this morning included Nestle, Southern Acids, Tasek, Fiamma, UMW, Y&G, APFT, Teck Guan and MAHB.



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KL shares mixed amid cautious sentiment

Shares on Bursa Malaysia were mixed mid-morning as investors were reluctant to take risk ahead of the year-end, dealers said.

At 10.50am, the underlying FTSE Bursa Malaysia KLCI (FBM KLCI) stood at 1,504.08, down by a mere 0.03 point, after opening 4.06 points lower at 1,500.05.

Volume stood at 467.99 million worth RM240.12 million, with gainers outpacing losers 218 to 200.

A dealer said the key index held steady at its crucial 1,500 mark supported by fund buying in selected heavyweights and also interest in financial counters.

CIMB rose four sen to RM7.14, RHB Capital advanced eight sen to RM7.21 and Hong Leong Bank gained six sen to RM10.90.

The Finance Index jumped 31.62 points to 13,405.84, the Industrial Index added 9.34 points to 2,717.36 while the Plantation Index slipped 17.34 points to 8,051.52.

The FTSE Bursa Malaysia Emas Index gained 1.35 points to 10,320.04, the FTSE Bursa Malaysia Ace Index rose 6.28 points to 4,061.08 while the FTSE Bursa Malaysia Mid 70 Index declined 7.36 points to 11,428.94.

Among the active counters, 1 Utopia was unchanged at 7.5 sen, Wijaya-Warrants rose 3.5 sen to 42.5 sen and JCY-Call Warrant perked one sen to 45 sen.

Among heavyweights, Maybank was flat at RM8.34, Sime Darby gained three sen to RM9.02 while Petronas Chemicals shed one sen to RM6.14. -- Bernama



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Box-Pak continues to rally

KUALA LUMPUR (Dec 29): Shares of paper box and carton-maker Box-Pak (M) Bhd , which hit its highest in 14 years on Dec 28, continued to rally on Thursday as industry sources speak of a potential acquirer.

At 10.30am, Box-Pak was up 10 sen to RM2.57 with 2.52 million shares done.

The Edge Financial Daily on Thursday reported market sources as saying that Tokyo and Osaka-listed Oji Paper Co Ltd (Japan), Japan’s largest paper company by sales, was believed to be the offeror.

Market watchers see Oji Paper — which has bought three Malaysian paper-related companies since 2010 — Genting Sanyen Industrial Paper, UNITED KOTAK BHD [], and HPI Resources Bhd — as a likely suitor for Box-Pak.

An offer may come through its wholly-owned Malaysian arm, Oji Paper Asia Sdn Bhd (OPA), the investment holding vehicle that acquired both United Kotak and HPI Resources, one source said.

For more on Box-Pak, read today’s edition of The Edge Financial Daily



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Asian markets stay edgy on renewed eurozone debt woes

KUALA LUMPUR (Dec 29): External woes, in particular the renewed concerns over the eurozone debt crisis, weighed heavily on global equity markets as nervous investors took profit on the penultimate trading day of 2011.

The FBM KLCI fell 5.18 points to 1,498.93 at 10.01am, dragged by losses at key blue chips.

Losers edged gainers by 165 to 158, while 207 counters traded unchanged. Volume was 277.08 million shares valued at RM131.89 million.

At the regional markets, Japan’s Nikkei 225 fell 0.91% to 8,346.68, Hong Kong’s Hang Seng Index lost 1.04% to 18,326.90, the Shanghai Composite Index was down 0.13% to 2,167.22, Taiwan’s Taiex fell 0.45% to 7,024.71, South Korea’s Kospi lost 0.72% to 1,812.05 and the Singapore Straits Times Index shed 0.27% to 2,659.02.

BIMB Securities Research in a note Dec 29 said investors may yet end 2011 on a jittery note with Eurozone’s problems still very much the starring role, adding that all eyes would be on Italy’s bond auction tomorrow to gauge the sentiments on the financially strapped country though sale of shorter term notes had been rather successful.

As a result, performances of major European bourses sank yesterday, it said.

Over on Wall Street, the situation was not much different with the Dow Jones Industrial Average declining by almost 140 points to 12,151 amid a low trading volume coupled with some realignment of portfolios, it said.

It was also a mixed day for Asian markets from the weak opening over in Europe, it said.

BIMB Research said that domestically, the FBM KLCI remained resilient posting a 3 point gain and stayed above the 1,500 level.

“We would expect the 1,500 to be under pressure today following the weak overseas markets.

“Meanwhile, we noticed that news-flow within the oil & gas sector has been quite apparent over the past weeks and could be a precursor for more to come,” it said.

On Bursa Malaysia, Nestle and KLK fell 20 sen each to RM56.50 and RM22.38, Southern Acids 15 sen to RM2.15, UMW 13 sen to RM6.82, IOI Corp seven sen to RM5.22, Public Bank, Dutch Lady, Genting and AMMB fell six sen each to RM13.06, RM23.16, RM10.90 and RM5.92, whiel Tanjung Offshore shed 4.5 sen to 74 sen.

Utopia was the most actively traded counter with 28 million shares done. The stock was unchanged at 7.5 sen.

Other actives included Sanichi, KNM, JCY, TMS, Flonic and Sumatec.

Gainers included Atis, Boxpak, Integra, DKSH, EKIB, Faber, Maybulk and Perak Corp.



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Faber gains on concession extension news

Faber Group Bhd, a Malaysian hospital support-services provider and property group, rose the most in more than two months after the Star newspaper reported that its unit may get extension for a support-services concession from the government.

The stock gained 5.4 percent to RM1.55 at 9:45 a.m. local time in Kuala Lumpur trading, set for its steepest increase since Oct. 21. -- Bloomberg



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YTL Power declines on EPF stake selldown

YTL Power International Bhd, a Malaysian power producer, fell to a one-week low in Kuala Lumpur trading after the country’s biggest pension fund continued to sell down its stake.

The stock dropped 1.1 percent to RM1.78 at 9:25 a.m. local time, set for its lowest close since Dec. 19.

YTL said in in exchange filing yesterday that the Employees Provident Fund disposed of 1.4 million shares on Dec. 22, bringing its total net sales disclosed this month to about 13 million shares. -- Bloomberg



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Tricubes falls on reporting yearly loss

Tricubes Bhd, a Malaysian software-products developer, fell to a one-week low in Kuala Lumpur trading after correcting its 2011 annual report to show a RM17.2 million annual loss.

The stock dropped 9.5 percent to 19 sen at 9:04 a.m. local time, set for its lowest close since Dec. 22. -- Bloomberg



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Alam Maritim gains on securing contract

Alam Maritim Resources Bhd, a Malaysian oil and gas services provider, climbed to the highest level in almost three weeks in Kuala Lumpur trading after securing a RM29.8 million (US$9.4 million) offshore transportation and installation contract.

The stock gained 2.7 percent to 76 sen at 9:02 a.m. local time, set for the highest close since Dec. 9. -- Bloomberg



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Alam Maritim edges up on contract from S’wak Shell

KUALA LUMPUR (Dec 29): ALAM MARITIM RESOURCES BHD [] shares edged up on Thursday after its unit Alam Maritim (M) Sdn Bhd received a letter of award from Sarawak Shell Bhd for the modules offshore transportation and installation contract valued at RM29.80 million.

At 9.15am, Alam added 1.5 sen to 75.5 sen with 142,100 shares done.

The nine-month contract started the current fourth quarter and the expected date of completion was May 2012.

Affin Investment Bank Bhd Research said in a note Dec 29 said it was positive on the contract win, which was inline with management’s intention to move up the O&G value chain into the transportation and installation segment.

However, the research house maintained its FY11-13 net earnings forecasts as it had imputed RM50 million of transportation and installation contract win for FY11.

“Maintain ADD on Alam Maritim with an unchanged TP of RM0.87, based on 12x CY12 earnings.

“Key re-rating catalysts are winning of long-term OSV charter contracts, award of SOGT pipelaying work and/or other major offshore installation & CONSTRUCTION [] (OIC) contracts,” it said.



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Renewed external worries weigh down KLCI

KUALA LUMPUR (Dec 29): The FBM KLCI fell in early trade and slipped below the 1,500-point level, in line with the dip at regional markets.

US and European shares fell overnight on renewed concerns over euro zone sovereign debt turmoil.

At 9.05am, the FBM KLCI lost 4.78 points to 1,499.33, weighed by losses at key blue chips on profit taking.

Losers led gainers by 64 to 50, while 101 counters traded unchanged. Volume was 45.61 million shares valued at RM19.25 million.

Among the early decliners were KLK, Nestle, Genting, IOI Corp, IJM Corp, Pos Malaysia, Supermax and CIMB.



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OSK Research: LFE Corp may trade higher after peaking at 27.5 sen

KUALA LUMPUR (Dec 29): OSK Retail Research said LFE Corp’s share price may trade higher if it can hold above the short-term support level.

It said on Thursday the stock had been trending higher since early-October, which has culminated in a peak of 27.5 sen three weeks ago.

After the strong move, the stock has been consolidating the gains, correcting exactly 62% of the September-December rally at 14.5 sen.

OSK Research said with LFE share price holding at 14.5 sen in the past four days suggested buying support, possibly nullifying the downside bias of the prior “Black” candles.

“But the new up-leg can only be confirmed on a close above the four-day high of 16.5 sen and when this happens, a purchase can then be made. Otherwise, an aggressive trade may enter now in anticipation of a bottom,” it said.

OSK Research said a stop-loss point was at the recent low of 14.5 sen. The first target is the year high of 27.5 sen and a strong move could see the price testing the two-year high of 38.5 sen.

However, the research house said a close below 14.5 sen would see the continuation of selling that started on Dec 12, while a close below the 10.5 sen support might spell the end of the rally.



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OSK Research: KNM share price may trade higher

KUALA LUMPUR (Dec 29): OSK Retail Research said KNM’s share price may trade higher after closing higher for three days in a row.

It said on Thursday KNM’s share price downtrend that resumed in January continued into December, bucking the trend of the broader market.

“But things may take a turn for the better after posting strong closes in the past three days,” it said.

OSK Research said the “Bullish Engulfing” candle of last Thursday was confirmed by higher closes in the past two days, completing the formation of at least a short-term low at 83 sen.

“The high volume in the past week also suggests possible accumulation activities. Thus, a rebound from the November-December down-leg has started. Purchase can be made at the current level with a stop loss on close below 83 sen,” it said.

OSK Research said a more aggressive trade may opt for the two-day low of 88 sen as a stop loss.

Given the downtrend, the rebound is expected to regain no more than 62% of the decline. A strong move could see the covering of the gap of Nov 23 of RM1.22. The research house said the resistance was also expected at RM1.12, the gap of Nov 24, where the 50-day MAV will be at in the next few days.

OSK Research said a close below 83 sen should see the continuation of the downtrend, with the next support at the psychological 75 sen.



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