Friday 11 May 2012

Works on RM1.5b Samalaju Port to start in January next year

KUCHING (May 11): Works on the interim facilities for the proposed development of the RM1.5 billion Samalaju Port near Bintulu is expected to start by January next year, BINTULU PORT HOLDINGS BHD [] chief executive officer Datuk Mior Ahmad Baiti Mior Lub Ahmad said on Friday.

He said the proposal on the general layout had been submitted to the State Planning Authority on Dec 8, 2011 while PricewaterhouseCoopers had already conducted all the relevant studies and recommendations, including for project funding.

"We are now in the final stages of concluding the deal and the funding aspect has been discussed with our major shareholders involving Petronas, Sarawak State Financial Secretary and Kumpulan Wang Persaraan," he told reporters after Bintulu Port's annual general meeting here.

He said tenders involving several packages for the full development of the port, which was located under the Sarawak Corridor of Renewable Energy (Score), would be called soon.

Once fully operational, he said, Samalaju Port was expected to handle an annual cargo throughput of 18 million metric tonnes compared with 16 million tonnes of non Liquefied Natural Gas (LNG) cargo currently being handled by Bintulu Port.

However, he was confident the cargo volume could rise up to 30 million metric tonnes annually, according to demand, in view of the potentials in the oil and gas industry as well as bulk fertiliser trade during the first phase of development.

The company had been given the task to build, own and operate the proposed port on some 450 hectares of land earmarked by the Sarawak government, he said.

He said Samalaju Port is to serve industries located at Samalaju Industrial Park, 60 km from Bintulu Port and its infrastructure development would be planned accordingly to serve the anticipated cargo generated by the industries within the Score.

Meanwhile, Mior Ahmad Baiti said crude palm oil (CPO) cargo had overtaken container cargo as one of the leading contributors to Bintulu Port's revenue.

With containers being handled at the port relegated to the third leading revenue contributor, he said, the sector saw a drop to 215,451 TEUs (20 foot equivalent units) in 2011 from 251,296 TEUs in 2010.

The group cargo throughput rose by 2.65 per cent to 41.70 million tonnes in 2011 from 40.61 million tonnes in 2010.

LNG still remained the major contributor with 24.89 million tonnes of cargo throughput and the remaining 16.81 million tonnes from non LNG cargoes, he said. — Bernama



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K Seng Seng's 1Q net profit slumps to RM95,000

KUALA LUMPUR: K. Seng Seng Corporation Bhd's net profit plunged 85.41% to RM95,000 in its first quarter ended Mar 31, 2012 from RM651,000 a year ago due to lower purchase orders and fluctuating costs.

In a statement on Bursa Malaysia on Friday, it said revenue fell 8.61% to RM15.18 million from RM16.61 million a year earlier.

Earnings per share were 0.10 sen compared to 0.68 sen.

The group attributed its weak earnings to lower purchase orders from its existing customer base and from the overseas market as well as the fluctuating costs of raw material.



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Malakoff Intl buys indirect stake in Bahrain power, desalination plant

KUALA LUMPUR (May 11): MMC CORPORATION BHD []'s 51%-owned subsidiary Malakoff International Ltd (MIL) has acquired the entire issued and paid up capital of IP Middle East Holding Co Ltd (IPME) from International Power Holdings Ltd (IPR) for US$113.4 million (RM348 million).

In a filing to Bursa Malaysia Securities on Friday, MMC Corp said that as a result of the acquisition, MIL will hold an indirect 40% equity interest in Hidd Power Company B S C (c) Bahrain ("HPC") through IPME, which owns a 57.1% equity interest in IPSUM Hidd Holding Co Ltd, which in turn owns a 70% equity interest in HPC.

"HPC is the owner and operator of a 'Build, Own and Operate' power generation and water desalination plant in Bahrain," it said.

The filing confirmed a report by The Edge Financial Daily on May 3, which said that Malakoff Corp had acquired a 40% stake in Hidd Power Co (HPC), a power and water generation provider located in Bahrain.The deal was signed in Bahrain on Monday, citing reports by the Gulf Daily News and the Bahrain News Agency.



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Weaker regional sentiment weighs KLCI down

KUALA LUMPUR (May 11): The weaker investor sentiment at regional markets weighed on the FBM KLCI and led the benchmark index lower at the mid-day break on Friday.

Asian shares slid on Friday, spawning declines in other risk assets, as deepening political turmoil in the eurozone fuelled concerns about global growth and a huge loss from JPMorgan added to jittery sentiment, according to Reuters.

At the mid-day break, the FBM KLCI fell 1.14 points to 1,586.92.

Losers led gainers by 362 to 176, while 330 counters trade unchanged. Volume was 475.81 million shares valued at RM374.95 million.

The ringgit weakened 0.15% to 3.0725 versus the greenback, crude palm oil futures for the third month delivery fell RM41 per tonne to RM3,299, crude oil lost US$1.27 (RM3.90) per barrel to US$95.81 and gold fell US$9.25 an ounce to US$1,584.77.

At the regional markets, Japan's Nikkei 225 fell 0.48% to 8,966.10, Hong Kong's Hang Seng Index fell 1.18% to 19,989.50, the Shanghai Composite Index shed 0.25% to 2,404.31, Taiwan's Taiex fell 1.23% to 7,391.94, south Korea's Kospi lost 1.37% to 1,918.33 and Singapore's Straits Times Index was down 0.72% to 2,882.77.

On Bursa Malaysia, PPB was the top loser in the morning session and fell 34 sen to RM16.14, BAT lost 30 sen to RM53.70, United PLANTATION []s down 24 sen to RM26.26, GAB 22 sen to RM13.40, Southern Acids 19 sen to RM2.26, Tasek 17 sen to RM9.19, while Milux, Shell and Far East lost 10 sen each to RM1.18, RM9.90 and RM7.55 respectively.

Harvest Court was the most actively traded counter, with 37.29 million shares done. The stock fell 4.5 sen to 58 sen.

Other actives included Utopia, Focus, Ariantec, Permaju, LFE Corp, Naim Indah Corp, CSL, Winsun and Metronic.

Gainers included SAM Engineering, Aeon Credit, Aeon, Tahps, Binutulu Port, BLD Plantations, Malpac and Fiamma.



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Century Logistics dips on RHB Research downgrade, cut in fair value

KUALA LUMPUR (May 11): CENTURY LOGISTICS HOLDINGS BHD [] shares fell on Friday after RHB Research downgraded the stock to Underperform and slashed its fair value to RM1.63 (from RM2.09) and said the company’s 1QFY12 net profit came in below expectations.

At 12.25am, Century fell eight sen to RM1.72 to 186,500 shares done.

“We believe this was mainly due to: (1) start-up losses from the operation of its double hull product tanker; (2) Lower-than-expected contribution from the ship-to-ship (STS) segment; and (3) The ongoing strike by container haulage drivers had indirectly hampered its total logistics segment,” the research house said in a note Friday.

RHB Research said that Century believes its weak 1Q12 earnings was the trough and management was optimistic of better earnings ahead as: (1) Oil transport business to turn profit (from losses currently) in the coming quarters as it increases its frequency; and (2) To reinstate 3-4 additional floating storage units (FSUs) in PTP.

“We have reduced our FY12-14 net profit forecast by 10.5-26.1% respectively after imputing lower contribution from the STS segment.

“Fair value is reduced to RM1.63 based on 8x FY12 FD EPS. Downgrade to Underperform,” it said.



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Strategy: CIMB Research maintains Overweight on Indonesia

KUALA LUMPUR (May 11): CIMB Research has maintained its Overweight rating on Indonesia and said first quarter 2012 (1Q12) results were not quite as strong as 4Q11.

“But 1Q12 results were decent despite disappointments from commodity stocks, offset by strong numbers from PROPERTIES [] and telco,” it said in a strategy note on Friday.

The research house said seventy-one percent of companies met or exceeded expectations versus 74% in 4Q11.

Earnings remain under pressure even after four months of downgrades, it said.

It said risks were emerging in the resource sector, though there was upside for non-resource if fuel prices are left untouched. JCI still underperformed ASEAN-4 despite two good months in Mar-Apr.

“Valuations at 13.1x forward P/E are at their 3-year MA, while PBV of 2.9x has factored in a 3%-pt increase in CoE, in our estimate.

“Our bottom-up index target of 4,450 is intact, implying 15.3-12.8x CY12-13 P/Es, as is our Overweight position. A reversal in earnings downgrades should provide a market catalyst,” it said.



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RHB Research downgrades Century Logistics, slashes fair value to RM1.63

KUALA LUMPUR (May 11): RHB Research has downgraded CENTURY LOGISTICS HOLDINGS BHD [] to Underperform and slashed its fair value to RM1.63 (from RM2.09) and said the company’s 1QFY12 net profit came in below expectations.

“We believe this was mainly due to: (1) start-up losses from the operation of its double hull product tanker; (2) Lower-than-expected contribution from the ship-to-ship (STS) segment; and (3) The ongoing strike by container haulage drivers had indirectly hampered its total logistics segment,” the research house said in a note Friday.

RHB Research said that Century believes its weak 1Q12 earnings was the trough and management was optimistic of better earnings ahead as: (1) Oil transport business to turn profit (from losses currently) in the coming quarters as it increases its frequency; and (2) To reinstate 3-4 additional floating storage units (FSUs) in PTP.

“We have reduced our FY12-14 net profit forecast by 10.5-26.1% respectively after imputing lower contribution from the STS segment.

“Fair value is reduced to RM1.63 based on 8x FY12 FD EPS. Downgrade to Underperform,” it said.



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KLCI edges down at mid-morning in choppy trade

KUALA LUMPUR (May 11): The FBM KLCI edged lower at mid-morning on Friday in choppy trade, in line with the tepid sentiment at key regional markets, and weaker overnight close at Wall Street.

The FBM KLCI edged down 0.01 of a point to 1,588.05 at 10am.

Losers led gainers by 201 to 157, while 243 counters traded unchanged. Volume was 222.23 million shares valued at RM1110.91 million.

BIMB Securities Research in a note Friday said that with Spain currently on a downward economic spiral with Greece scrambling for a government coalition, the US came out with another after market “surprise” that JP Morgan made a US$2bn trading loss.

It said that though the Dow Jones Industrial Average eked out a 20 point gain to 12,855, the JP Morgan incident should dampen investors’ mood.

European markets staged a relief rally of sorts with most ended up in positive territory which we believe could be short lived, it said.

Already, the Spanish banks are crying for help with bail-outs next on the agenda. Regional performances were mixed with Malaysia again defying gravity to chalk up a 3.16 point gain to 1,588.06, it said.

"It is interesting to note that investors’ risks tolerance is higher now with the absence of any panic selling.

"Mirroring our sentiments, we expect the FBM KLCI to trend within a narrow band over the short term of between 1,580-1,600 and expect some downward bias today," it said.

Among the major decliners at mid-morning on Bursa Malaysia were PPB, Tasek, GAB, Orient, Subur Tiasa, MSM, Amway, Century Logistics and Petronas Gas.



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Petronas Gas shares dip after fire at Kerteh plant

KUALALUMPUR (May 11):PETRONAS GAS BHD [] shares retreated on Friday after the company reported a fire incident at its GPP Complex A in Kerteh terengganu on Thurday, in which one person died and two personnel hade been warded.

At 9.26am, PGB fell 10 sen to RM17.18 with 26,200 shares traded.

In a filing Friday, Petronas Gas (PGB) said the fire, which started at 3pm, was brought under control by the Complex's Emergency Response Team at 3.30pm.

The company said the incident happebed at GPP 3 which was under planned maintenance shutdown.

It said there was minimal damage to plan equipment, adding that the incident had not affected the operations of the other gas processing plant units and there was no interruption to the gas suply to the Peninsular Gas Utilisation pipeline network.

"Arising from this incident, there is minimal impact to PGB's earnings," it said.

PGB said that a number of employees of Hyundai-PFCE Consortium (HPC), which is the contractor engaged to undertake the maintenance works at the GPP, were affected by the incident.

"PGB is extending all necessary assistance to the affected personnel and their family members," it said.



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Dialog up in early trade on positive 3Q earnings

KUALA LUMPUR (May 11): DIALOG GROUP BHD []'s shares advanced on Friday after its net profit for the third quarter ended March 31, 2012 rose 7.96% to RM41.39 million from RM38.34 million a year earlier, due mainly to higher revenue and increase in Malaysian operations arising from its provision of specialist products and services, engineering and CONSTRUCTION [] activities and fabrication works.

At 9.20am, Dialog rose five sen to RM2.27 with 292,500 shares traded.

It said on Thursday that revenue for the quarter jumped 39.5% to RM420.04 million from RM301.16 million in 2011, due consolidation of the revenue of the newly acquired fabrication and multi-disciplined engineering company, Fitzroy Engineering Group Ltd, based in New Zealand contributed to the increase in the group's revenue.

Dialog declared an interim 1.1 sen single tier cash dividend per share to be paid on June 29.



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One dead, two warded after fire at PetGas' Kerteh plant

KUALALUMPUR (May 11): One person died and two personnel have been warded following a fire at PETRONAS GAS BHD []'s GPP Complex A in Kerteh, terengganu on Thurday.

In a filing Friday, Petronas Gas (PGB) said the fire, which started at 3pm, was brought under control by the Complex's Emergency Response Team at 3.30pm.

The company said the incident happebed at GPP 3 which was under planned maintenance shutdown.

It said there was minimal damage to plan equipment, adding that the incident had not affected the operations of the other gas processing plant units and there was no interruption to the gas suply to the Peninsular Gas Utilisation pipeline network.

"Arising from this incident, there is minimal impact to PGB's earnings," it said.

PGB said that a number of employees of Hyundai-PFCE Consortium (HPC), which is the contractor engaged to undertake the maintenance works at the GPP, were affected by the incident.

"PGB is extending all necessary assistance to the affected personnel and their family members," it said.



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KLCI edges up, blue chips lead

KUALA LUMPUR (May 11): The FBM KLCI edged up marginally in early trade on Friday, lifted by gains at select blue chips.

The benchmark index added 0.29 of a point to 1,588.35 at 9am.

Gainers led losers by 24 to 15, while 32 counters traded unchanged. Volume was 4.5 million shares valued at RM3.25 million.

Meanwhile, Asian shares retreated on Friday, spooked by JPMorgan's $2 billion huge loss from a failed hedging strategy, with investors warily watching political turmoil in the euro zone as they await new Chinese data for clues on its growth outlook, according to Reuters.

Among the early gainers on Bursa Malaysia were KLK, Multico, Petronas Chemicals, UMW, ECB, PPB, Maybank, IOI Corp, Petronas Gas and Aeon Credit.



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CIMB Research maintains Outperform on Dialog

KUALA LUMPUR (May 11): CIMB Research has maintained its Outperform rating on DIALOG GROUP BHD [] at RM2.22 with a revised target price of RM2.93 (from RM2.95) and said delayed contribution from Phase 1 of the Pengerang terminal was behind Dialog’s results letdown, with 9M net profit coming in at only 60% of our full-year forecast and 63% of consensus estimate.

"But our optimism is intact as the earnings shortfall is purely a timing issue," it said in a note Friday.

"We reduce our FY12 EPS for the timing of Phase 1’s contribution.

"Our target price drops slightly as we update our SOP calculation. We continue to value the businesses at 18.2x P/E, a 40% premium over our CY13 target market P/E of 13x. Potential contracts for the Rapid project and marginal fields underpin our Outperform call," it said.



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Stocks to Watch Genting Group, Glenealy, Cuscapi, Century Logistics, Dialog

KUALA LUMPUR (May 11): The FBM KLCI may cap a tumultuous week on Friday on a weaker note, as external pressures have kept Asian equities in throughout the week, while European and US markets appeared to trend lower on Thursday as well.

European shares were down around midday in choppy trade on Thursday, as political concerns in Europe and global growth worries weighed on investor sentiment with basic resource stocks under pressure after weak trade data overnight from China, according to Reuters.

Meanwhile, S&P 500 futures were flat on Thursday as investors paused from a recent bout of selling ahead of the latest report on the labor market, it said.

Among the stocks that could be in focus are the Genting stable of companies, Glenealy PLANTATION []s (Malaya) Bhd, CUSCAPI BHD [], CENTURY LOGISTICS HOLDINGS BHD [], and DIALOG GROUP BHD [].

The Genting companies declared their final dividends respectively. GENTING BHD [] declared a final gross dividend of 4.5 sen per share of 10 sen each; Genting Malaysia declared a final gross dividend of 4.8 sen per share of 10 sen each, while Genting Plantations declared a final gross dividend of 5.75 sen per share of 50 sen each.

Glenealy's net profit fell 52.97% to RM10.93 million for its third quarter ended Mar 31, from RM23.24 million a year ago, due to lower production volume and higher production costs. It said on Thursday that its revenue for the quarter decreased 13.19% to RM60.02 million from RM69.14 million a year earlier.

Cuscapi's net profit plunged 70.92% to RM567,000 for its first quarter ended Mar 31, from RM1.95 million a year ago, dragged down by delays in uncompleted projects. In a statement on Bursa Malaysia on Thursday, the group said its revenue fell 21.34% to RM12.13 million from RM15.42 million a year earlier.

Century Logistics's net profit fell 33% to RM4.29 million in its first quarter ended Mar 31, from RM6.44 million a year ago due to start-up losses from its double hull product tanker. The company said it would be paying a seven sen final dividend in respect of the financial year ended Dec 31, 2011 on May 25, bringing the total single-tier dividend in respect of the year 2011 to 12 sen per share.

Dialog's net profit for the third quarter ended March 31, 2012 rose 7.96% to RM41.39 million from RM38.34 million a year earlier, due mainly to higher revenue and increase in Malaysian operations arising from its provision of specialist products and services, engineering and CONSTRUCTION [] activities and fabrication works.

It said on Thursday that revenue for the quarter jumped 39.5% to RM420.04 million from RM301.16 million in 2011, due consolidation of the revenue of the newly acquired fabrication and multi-disciplined engineering company, Fitzroy Engineering Group Ltd, based in New Zealand contributed to the increase in the group's revenue. Dialog declared an interim 1.1 sen single tier cash dividend per share to be paid on June 29.



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