Stocks to watch: Ingenuity, Glomac, Jaya Tiasa, S P Setia. Malaysia AE Models, Lipo

KUALA LUMPUR (March 23) : The resilience of Malaysian stocks will be keenly watched on Friday as investors weigh the impact of weaker global macro updates against the effects of pre-election sentiment in the country.

Analysts believe April will be crucial in anticipation of announcements on potential winners of big-ticket domestic public projects ahead of Malaysia’s coming genera l election.

The anticipation could have spurred the FBM KLCI to close higher on Thursday despite a still-weak global sentiment emanating from the US, Europe and China.

The FBM KLCI which sank into the red earlier, had rebounded to close at 1,583.24, up 0.71 point on Thursday.

Stocks to watch on Friday include INGENUITY SOLUTIONS BHD [], GLOMAC BHD [], JAYA TIASA HOLDINGS BHD [], S P Setia Bhd, Malaysia AE Models Holdings Bhd (Maemode) and LIPO CORPORATION BHD [].

Bursa Malaysia has queried computer software developer Ingenuity on the unusual trading patterns of the stock on Thursday.

Glomac reported a 33% rise in net profit to RM21.89 million in the third quarter ended Jan 31, 2012 from a year earlier despite revenue falling 18% to RM145.29 million. The property developer said lower cost of sales had mitigated the impact of lower revenue and higher operating expenses during the quarter.

Jaya Tiasa said its net profit rose 14% to RM45.52 million in the quarter ended Jan 31, 2012 from a year earlier as revenue fell marginally to RM237.56 million from RM237.64 million a year earlier. Lower tax expenses had offset lower revenue and higher operating costs during the quarter, according to the timber and oil palm PLANTATION [] entity

S P Setia reported a 19% rise in net profit to RM74 million in the first quarter to Jan 31, 2012 from a year earlier as revenue fell 5% to RM491.58 million. The property developer said it had sold RM933 million worth of PROPERTIES [] during the quarter, up 27% from a year earlier.

Maemode has secured a RM61.93 million baggage handling system job at the new low cost carrier terminal. The contract was awarded by UEMC-Bina Puri J.V.

KOBAY TECHNOLOGY [] BHD [] is acquiring full control of its 53.16% subsidiary Lipo via a selective capital reduction and repayment exercise.

Kobay requested Lipo to reduce the paid-up by cancelling one share for every RM1 paid by Lipo to shareholders as capital repayment.

“All entitled shareholders will receive a cash payment amounting to RM1.25 per Lipo share pursuant to the proposed SCR,” it said.



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Glomac 3Q net profit up 33%

KUALA LUMPUR (March 22) : GLOMAC BHD []’s net profit rose 33% to RM21.89 million in the third quarter ended Jan 31, 2012 from RM16.52 million a year earlier as the property developer’s lower cost of sales mitigated the impact of lower revenue and higher marketing, administration and finance expenses during the quarter.

In a statement to the exchange on Thursday, Glomac said its revenue fell 18% to RM145.29 million against RM176.54 million a year earlier due to the completion of several projects.

Cumulative nine-month net profit climbed 32% to RM63.53 million from RM47.96 million a year earlier while revenue was down 8% to RM407.95 million from RM443.74 million.

Glomac said it sold RM343 million worth of PROPERTIES [] during the nine month period.



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Glomac building warchest for landbanking

Glomac Bhd (Dec 5, 86 sen)
Maintain hold with revised target price of 88 sen from 73 sen: Glomac’s RM35 million 1HFY12 core net profit accounted for 45% of our and consensus full-year estimates. With close to RM50 million (8.6 sen per share) net cash, Glomac is in a good position for accretive landbanking opportunities.

We raise FY13/FY14 earnings forecasts by 4% and revalued net asset value (RNAV) by two sen. We now value Glomac at 88 sen on a lower 40% discount (previously 50%). The formalisation of Bank Negara Malaysia’s prudent lending guidelines should remove surrounding policy risk.

Excluding RM6.5 million net gains from the 49%-owned Thai warehouse disposal, Glomac’s 1HFY12 net profit rose by 12% year-on-year (y-o-y). The y-o-y growth in net profit was due to lower minority interest as its 51%-owned Glomac Tower was completed and handed over in November 2011.

Glomac has locked in RM212 million sales in 1HFY12 (Glomac Damansara: 41%; Glomac Rawang: 30%), meeting 42% of its RM500 million target for 2012. We expect sales to pick up in 2H with the launch of RM770 million new projects including: (i) RM370 million BU Centro @ Bandar Utama (phase 1; service apartments at RM560 per sq ft (psf) average selling price and shop offices at RM2.1 million per unit ASP); and (ii) RM270 million Reflection Residences @ Mutiara Damansara (RM750psf ASP).

Post completion of its Thai warehouse sale, Glomac’s net cash position has further improved to RM50 million (or 8.6 sen per share) as at October 2011, from RM13.5 million (2.3 sen per share) as at end-1QFY12. With a stronger war chest, Glomac is looking to expand its landbank aggressively.


It is eyeing both big parcel tracts (more than 161.8ha for township development) and smaller sizes for pocket developments in the Klang Valley.

We raise our FY13/FY14 forecasts by 4% to factor in higher gross development values for Reflection Residences (to RM270 million, from RM250 million) and BU Centro (to RM520 million, from RM400 million) as guided by management.

Management aims to distribute at least 4.75 sen this financial year-end, translating into a 5.8% yield (compared with our 6.5% yield based on 30% payout ratio). — Maybank IB Research, Dec 5


This article appeared in The Edge Financial Daily, December 6, 2011.



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KL shares close marginally higher

Shares of the following companies had unusual moves in Malaysia trading. Stock symbols are in parentheses and prices are as of the 5 p.m. close in Kuala Lumpur. The FTSE Bursa Malaysia KLCI Index rose 0.93 points, or 0.1 per cent, to 1,489.95.

DRB-Hicom Bhd, an automotive, construction and property group, rose 10 per cent to RM2.20, its steepest gain since July 26. The company may have shown interest in acquiring a stake in national carmaker Proton Holdings Bhd from the country’s state investment fund, the Edge newspaper reported.

Glomac Bhd, a property developer, jumped 4.9 per cent to 86 sen, its highest close since Aug. 5. Second-quarter profit surged 50 per cent to RM23.8 million (US$7.6 million) from a year earlier, it said in a statement.

Lion Corp, a steel producer and builder, dropped 5.3 per cent to 18 sen, its lowest close since Oct. 11. The company may issue new shares to raise RM950 million to settle debt owed by its 79 per cent-owned Megasteel Sdn Bhd subsidiary, Lion said in a statement.

Proton Holdings Bhd, the state-controlled carmaker, soared 24.7 per cent to RM4.50, its steepest increase since Sept. 7, 1998. The Edge newspaper reported that Khazanah Nasional Bhd. may ask for bids for its 43 per cent stake in Proton.

Tenaga Nasional Bhd, the country’s biggest power producer, gained 1.4 per cent to RM5.72, set for its highest close since Nov. 16. The company signed a 25-year agreement to buy electricity from Malakoff Corp’s Tanjung Bin power plant when completed in 2016. Tenaga also agreed to sell Malakoff coal for the plant, the power company said in a statement. -- Bloomberg



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Glomac gains on Q2 profit surge

Glomac Bhd, a Malaysian property developer, advanced to the highest level in almost three weeks in Kuala Lumpur trading after second-quarter profit surged 50 percent to RM23.8 million from a year earlier.

The stock rose 1.2 percent to 83 sen at 9:12 a.m. local time, set for the highest close since Nov. 16. -- Bloomberg



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Glomac rises on firm 2Q earnings

KUALA LUMPUR (Dec 5): GLOMAC BHD [] shares rose in early trade on Monday after its net profit for the second quarter ended Oct 31, 2011 rose 50% to RM23.78 million from RM15.88 million a year ago, underpinned by on-going projects particularly Glomac Damansara, Glomac Cyberjaya, Saujana Rawang and Bandar Saujana Utama.

At 9.05am, Glomac added 1.5 sen to 83.5 sen with 76,500 shares traded.

Its revenue for the quarter however declined 4.3pct to RM134.83 million from RM140.89 million, due to completion of two projects namely Glomac Tower and Glomac Galleria.

ECM Libra Investment Research said it maintained its Buy call on the stock premised on Glomac’s strong 3-year earnings CAGR of 35% and more positive news flow on landbanking, en bloc sale and estimated GDV of RM2.6 billion beyond FY12.

“The revised target price of RM1.12 is due to the effect of the share split, and is based on 6x P/E valuation for FY13 earnings.

“RNAV estimate is also revised to RM1.55 which further supports our target price this is at a 28% discount to RNAV,” the research house said on Monday.



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Bullish sentiment on Bursa set to continue

KUALA LUMPUR: Stocks are expected to continue to trade higher this week, with the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBMKLCI) trying to break the psychological 1,500 mark for the first time in more than three months.

The overall improving sentiments are mainly driven by a coordinated move by major central banks to ease Europe's debt crisis, the greater clarity provided by European policy makers on plans to stabilise the debt situation, as well as encouraging economic data from the US.

Meanwhile, closer at home, speculation of DRB-HICOM Bhd's possible acquisition of major stakes in Proton Holdings Bhd, possible mergers between ECM Libra Financial Group and K&N Kenanga Holdings, as well as Petronas' plans to build its third natural gas terminal in Lumut, will keep investors excited for the week.

"Investors' confidence has significantly improved over the past few trading days, and is expected to stay strong over the near term. This may be the beginning of a year-end rally," said a head of research from a local brokerage.

Analysts expect the immediate resistance level for the benchmark index at about 1,500 level, while the near-term support level is around the 1,470 level.

The FBM KLCI ended four consecutive weeks of losses with a 4.01 per cent gain last week at 1,489.02. It was also the index's highest weekly gain since July 2009.

Last week, the entire market capitalisation of the stock market rose by some RM30 billion to RM1.27 trillion, from RM1.24 trillion the week before.

The gains were partly driven by improving sentiments among foreign fund managers, who boughtalmost RM3 billion and sold RM1.76 billion worth of stocks, resul-ting in a net buying of more than RM1.17 billion.

Last week, the US Federal Reserve and five other central banks lowered the cost of dollar funding to ease Europe's debt crisis, while China reduced the amount of cash that banks must set aside as reserves for the first time since 2008. The reserve ratios will decline by 50 basis points starting today.

Meanwhile, data revealed that payroll gains in the US improved last month, and jobless rate was down to 8.6 per cent, its lowest level since March 2009.

This week, stocks that will be in investors' radar, among others, include Proton and DRB-HICOM on speculation of possible corpo-rate exercise; Glomac Bhd on its 50 per cent jump in second quarter net profit; as well as Tan Chong Motor Holdings Bhd, which a weekly publication reported that its Vietnam venture may reach break-even earlier than expected.



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Stocks to watch: Glomac, Mah Sing, Tan Chong, Fibon

KUALA LUMPUR (Dec 3): The FBM KLCI may trend higher and again test the psychologically important 1,500 level in the week ahead, starting Monday, Dec 5 on more global liquidity and economic optimism.

On Friday, Dec 2, the FBM KLCI closed in positive territory as some key regional markets reversed their earlier losses, but gains at the local market remained muted as investor sentiment stayed cautious.

Week-on-week, the KLCI was up 57.45 points to end at 1,489 with the market capitalisation up RM39.59 billion to RM1,269.59 billion.

Affin Investment Bank head of retail research Dr Nazri Khan said the sentiment could be propped by the coordinated move by central banks including China and Brazil to ease monetary policies.

Another positive factor is the rising expectation of an aggressive cut in the ECB interest rate and stronger EU deal to resolve the debt crisis.

“However, despite the gains spotted worldwide, we recommended caution since the liquidity move is yet to address the core problems that Europe faces which is to provide a long-term sustainable funding solution to the troubled European banking community,” he said.

Dr Nazri expected the broad market to trend higher slowly as they digest more clarity on the EU plan to deal the problems (possibly disclosed in the upcoming Dec 9, EU summit).

“These may includes details on how to enforce budget balancing for troubled countries, how to implement tough austerity measures especially for Portugal, Italy, Ireland, Greece and Spain, how to leverage the rescue funds and how to strengthen the ECB to backstop future crisis,” he pointed out.

Among the stocks which could see trading interest are GLOMAC BHD [], MAH SING GROUP BHD [], TAN CHONG MOTOR HOLDINGS BHD [] and Fibon Bhd.

Glomac's net profit for the second quarter ended Oct 31, 2011 rose 50pct to RM23.78 million from RM15.88 million a year ago, underpinned by on-going projects particularly Glomac Damansara, Glomac Cyberjaya, Saujana Rawang and Bandar Saujana Utama.

Its revenue for the quarter however declined 4.3pct to RM134.83 million from RM140.89 million, due to completion of two projects namely Glomac Tower and Glomac Galleria.

Mah Sing's proposed joint development of 4.08 acres of prime land along Jalan Tun Razak-Jalan Pahang faced a setback after the conditions were not met.

However, Mah Sing said it would explore options to move ahead on this. The project is a niche development – M Sentral -- with an estimated gross development value of RM900 million and it is part of the RM9-billion 58 acre riverside urban regeneration project.

The Edge weekly reports that Tan Chong Motor Holdings Bhd, which invested nearly US$45 million in Nissan Vietnam Co Ltd since acquiring a controlling stake in the company last year, is optimistic that it will reach break-even earlier than anticipated.

Meanwhile, Fibon – a chemical compounds producer -- is poised to enter a new phase of growth with the upcoming launch of its new switchboard Fibon LogiCube.

Anther company which could see trading interest are sports shoe sole manufacturer Xingquan International Sports Holdings Ltd. Its chief executive officer Wu Qingquan is confident that it can maintain its double digit growth in revenue for the financial year ending June 2012, said. The compound annual growth rate from 2006 to 2011 was 39%.

Last Friday, MMC CORPORATION BHD []'s Tanjung Bin Energy Sdn Bhd has sealed a power purchase agreement with TENAGA NASIONAL BHD [] to supply electricity over 25 years. However, the price of electricity which Tanjung Bin would sell to Tenaga was not disclosed in the statement to Bursa Malaysia.



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Glomac 2Q net profit rises 49.7% to RM23.78m

KUALA LUMPUR (Dec 2): GLOMAC BHD []'s net profit for the second quarter ended Oct 31, 2011 rose 49.7% to RM23.78 million from RM15.88 million a year earlier, due mainly to on-going projects particularly Glomac Damansara, Glomac Cyberjaya, Saujana Rawang and Bandar Saujana Utama.

It said on Friday its revenue for the quarter however declined 4.3% to RM134.83 million from RM140.89 million in 2010, due to completion of two projects namely Glomac Tower and Glomac Galleria. Earnings per share for the quarter increased to 4.08 sen year-on-year from 2.72 sen, while net assets per share were RM1.06.

For the six months ended Oct 31, Glomac’s net profit rose 32.4% to RM41.65 million from RM31.44 million in 2010, on the back of revenue RM262.66 million.

Reviewing its performance, Glomac group executive chairman Tan Sri F.D. Mansor said the company’s Glomac Cyberjaya 2 and B.U.Centro @ Bandar Utama projects would further drive its sales growth and enhance its unbilled sales which currently stood at RM555 million.

He said this was a reflection of the strong market interest in Glomac’s development projects, as well as its continuing success in building ourselves as a quality, reliable and innovative developer.

“Albeit that global economic uncertainty persists, we believe Glomac’s prospects remain promising and that we would continue to sustain our earnings growth momentum.

“Excluding the RM1.4 billion worth of PROPERTIES [] we have and will launch in this current financial year, Glomac has a strong pipeline of strategic projects with a total gross development value (GDV) of RM2.6 billion for launch beyond this year.

He said the company’s balance sheet had also continued to improve, having amassed RM385 million in cash.

Glomac Cyberjaya 2, which was officially launched in November 2011, comprises of 3 to 4 ½ shop offices with a total GDV of RM130 million.

The initial phase of B.U.Centro @ Bandar Utama has an estimated GDV of RM370 million, comprising of shop offices which were soft launched in November 2011, and serviced apartments which is targeted for launch in early 2012.



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Glomac business booms despite global slowdown

CYBERJAYA: Glomac Bhd, unfazed by the slowdown in global economy, will continue to expand its property development activities in Malaysia.

The company is looking to increase its projects in hand to improve earnings, said its assistant general manager, group corporate communication and marketing, Fara Eliza FD Mansor.

As at July 31, Glomac has a net cash position of RM361.6 million.


"We are increasing our landbank size and plan to launch more medium- to high-end developments. We will go where the market is," she told Business Times in an interview recently.

The company has close to 405 hectares in its pocket with a potential to develop properties worth RM3.8 billion over the next seven years.

Glomac's net profit rose 14.7 per cent to RM17.9 million in the first quarter ended July 31, mainly attributed to strong contribution from previous and ongoing projects.

Revenue for the quarter surged to RM127.83 million, from RM126.31 million a year ago.

Glomac is currently focusing on four projects, namely Glomac Damansara, Mutiara Damansara Residences and Glomac Utama in Petaling Jaya, Selangor, and Glomac Cyberjaya. The projects are worth close to RM2 billion combined.

While the RM1 billion Glomac Damansara has started, the company is aiming to launch the RM250 million Mutiara Damansara Residences and RM400 million Glomac Utama by the end of this year or in early 2012.

For Glomac Cyberjaya, the company is now introducing phase two, comprising 55 units of three to 41/2-storey shop offices worth RM250 million.

"Phase 1, consisting of 63 units of shop offices, was sold out within six months. There is still a lot of demand for the properties," Fara said.

She said the limelight for 2012 will be a yet-to-be-named project in Puchong, comprising mainly residential, valued at around RM1 billion.

"That will be our next flagship project after Glomac Damansara," Fara said.

Glomac had acquired 80ha of leasehold land in Bandar Metro Puchong for RM77 million this year to undertake the development.

Glomac eyes land in Greater KL for integrated mixed projects

PETALING JAYA: Armed with a net cash position of RM361.6mil as at July 31, 2011, Glomac Bhd is on the lookout to buy small land parcels with fast turnaround and high gross development value potential in the Greater Kuala Lumpur area.

Group managing director and chief executive officer Datuk Fateh Iskandar Mohamed Mansor said negotiations were under way for some suitable sites to be developed into integrated mixed projects.

He said there were some “under-rated” sites where Glomac could use its expertise to enhance the land value through innovative infrastructure, branding, marketing and design.

“At the same time, this strategy will contribute to a solid balance sheet while keeping down the company's debt position,” he noted.

Glomac is also keen to participate in government land privatisation and is looking at some of the projects.

Based on a consistent growth in profit over the past three years, the company is confident of posting a double-digit growth in its earnings for its financial year ending April 30, 2012 (FY2012).

Glomac recorded a profit after tax of RM32mil for FY2009; RM41mil for FY2010; and RM63mil for FY2011.

“For FY2012, Glomac is looking to launch up to RM1.2bil in new projects comprising affordable housing units, medium to medium upper range of properties and commercial projects.

The developments slated for launch this year include projects in Glomac Damansara (RM250mil), Mutiara Damansara Residences (RM250mil), Glomac Utama Phase 1 (RM250mil), Glomac Cyberjaya 2 (RM100mil) and townships in Rawang, Sungai Buloh and Johor (worth a combined RM295mil).

“Having achieved RM100mil in sales for the first quarter ended July 31, Glomac is on track to achieve its sales target of RM500mil for FY2012,” he added.

The company raked in sales of RM418mil in FY11. As at July 31, it has unbilled sales of RM550mil.

Iskandar said Glomac's landbank of close to 404.68ha had an estimated GDV of RM3.8bil. The landbank will keep it busy for the next six to seven years, and he expects Glomac to undertake projects worth some RM600mil a year.

Glomac assistant general manager, group corporate communication and corporate marketing, Fara Eliza FD Mansor said the company would be unveiling its latest property projects at The Star Property Fair 2011 to be held from Nov 25 to 27 at the Kuala Lumpur Convention Centre.

The projects to be exhibited include Glomac Damansara, the company's flagship mixed development on 2.75ha fronting Jalan Damansara.

Fara said the project with a GDV of RM898mil, offered a hybrid mix of business and leisure property.

“Glomac Damansara Residences comprise two blocks of service apartments. The 356 apartments with built up of 876 sq ft to 2, 529 sq ft are priced from RM581,660, or around RM650 per sq ft. So far, 75% of the units have been sold,” she added.

Also sold are the five and eight-storey shop offices (GDV of RM54mil), and the 25-storey corporate tower office suites (GDV of RM171mil) which was sold en-bloc last year.

Glomac Damansara will also have a 16-storey office block and a boutique retail mall (with a total GDV of RM388mil) that will be launched later.

Fara added that the other projects to be showcased at the property fair will be Glomac Utama's double-storey shop offices and service apartments; Mutiara Damansara Residences, consisting of 299 units of 1,200 sq ft to 1,600 sq ft of freehold service apartment project; Sinaran@Suria Residen a gated and guarded development in Cheras and three to 41/2-storey shop offices at the RM250mil Glomac Cyberjaya 2 project.